Thought this may be of interest!


$hifty


1 . Gold Star Parents Annuity Act (Introduced in the House)[H.R.4709.IH]
2 . Gold Restitution Act of 1999 (Introduced in the House)[H.R.2453.IH]
3 . Pope John Paul II Congressional Gold Medal Act (Engrossed in House )[H.R.3544.EH]
4 . Pope John Paul II Congressional Gold Medal Act (Introduced in the House)[H.R.3544.IH]
5 . Milton Friedman Congressional Gold Medal Act (Engrossed in Senate)[S.1971.ES]
6 . To authorize the President to award a gold medal on behalf of the Congress honoring Wilma G. Rudolph in recognition of her enduring contributions to humanity and women's athletics in... (Introduced in the House)[H.R.384.IH]
7 . To authorize the President to award a gold medal on behalf of the Congress to Mrs. Yaffa Eliach in recognition of her outstanding and enduring contributions toward scholarship about... (Introduced in the Senate)[S.561.IS]
8 . To authorize the President to award gold medals on behalf of the Congress to the family of Andrew Jackson Higgins and the wartime employees of Higgins Industries, in recognition of... (Introduced in the House)[H.R.4384.IH]
9 . Father Theodore M. Hesburgh Congressional Gold Medal Act (Engrossed in House )[H.R.1932.EH]
10 . Pope John Paul II Congressional Gold Medal Act (Received in the Senate)[H.R.3544.RDS]
11 . To provide for the award of a gold medal on behalf of the Congress to former President Ronald Reagan and his wife Nancy Reagan in recognition of their service to the Nation. (Engrossed in House )[H.R.3591.EH]
12 . Pope John Paul II Congressional Gold Medal Act (Enrolled Bill)[H.R.3544.ENR]
13 . To amend titles 10 and 14, United States Code, to provide for the use of gold in the metal content of the Medal of Honor. (Introduced in the House)[H.R.3584.IH]
14 . Father Theodore M. Hesburgh Congressional Gold Medal Act (Introduced in the Senate)[S.1332.IS]
15 . To authorize the President to award a gold medal on behalf of Congress to Muhammad Ali in recognition of his outstanding athletic accomplishments and enduring contributions to humanity,... (Introduced in the Senate)[S.2078.IS]
16 . To provide for the award of a gold medal on behalf of the Congress to former President Ronald Reagan and his wife Nancy Reagan in recognition of their service to the Nation. (Placed on the Calendar in the Senate)[H.R.3591.PCS]
17 . Milton Friedman Congressional Gold Medal Act (Referred in House)[S.1971.RFH]
18 . John Glenn Congressional Gold Medal Act (Introduced in the House)[H.R.239.IH]
19 . To authorize the President to award a gold medal on behalf of Congress to Pope John Paul II in recognition of his outstanding and enduring contributions to humanity, and for other purposes. (Introduced in the Senate)[S.2453.IS]
20 . Milton Friedman Congressional Gold Medal Act (Introduced in the House)[H.R.4672.IH]
21 . To authorize the President to award a gold medal on behalf of Congress to General Wesley K. Clark, United States Army, in recognition of his outstanding leadership and service during... (Introduced in the Senate)[S.2824.IS]
22 . Father Theodore M. Hesburgh Congressional Gold Medal Act (Received in the Senate)[H.R.1932.RDS]
23 . To authorize the President to present a gold medal on behalf of Congress to former President Jimmy Carter and his wife Rosalynn Carter in recognition of their service to the Nation. (Introduced in the Senate)[S.2641.IS]
24 . To present a congressional gold medal to astronauts Neil A. Armstrong, Buzz Aldrin, and Michael Collins, the crew of Apollo 11. (Engrossed in House )[H.R.2815.EH]
25 . Father Theodore M. Hesburgh Congressional Gold Medal Act (Enrolled Bill)[H.R.1932.ENR]
26 . To present a congressional gold medal to astronauts Neil A. Armstrong, Buzz Aldrin, and Michael Collins, the crew of Apollo 11. (Introduced in the House)[H.R.2815.IH]
27 . To provide for the award of a gold medal on behalf of the Congress to former President Ronald Reagan and his wife Nancy Reagan in recognition of their service to the Nation. (Introduced in the Senate)[S.2459.IS]
28 . To authorize the President to award a gold medal on behalf of the Congress to Rosa Parks in recognition of her contributions to the Nation. (Engrossed in Senate)[S.531.ES]
29 . Milton Friedman Congressional Gold Medal Act (Introduced in the Senate)[S.1971.IS]
30 . To provide for the award of a gold medal on behalf of the Congress to former President Ronald Reagan and his wife Nancy Reagan in recognition of their service to the Nation. (Enrolled Bill)[H.R.3591.ENR]
31 . To authorize the President to award a gold medal on behalf of the Congress to Rosa Parks in recognition of her contributions to the Nation. (Introduced in the Senate)[S.531.IS]
32 . Milton Friedman Congressional Gold Medal Act (Considered and Passed by the Senate)[S.1971.CPS]
33 . To authorize the President to present gold medals on behalf of the Congress to astronauts Neil A. Armstrong, Edwin E. `Buzz' Aldrin, Jr., and Michael Collins, the crew of Apollo 11. (Introduced in the Senate)[S.2632.IS]
34 . To authorize the President to award a gold medal on behalf of the Congress to Charles M. Schulz in recognition of his lasting artistic contributions to the Nation and the world. (Engrossed in House )[H.R.3642.EH]
35 . Andrew Jackson Higgins Gold Medal Act (Introduced in the Senate)[S.2689.IS]
36 . Resolved, That the bill from the House of Representatives (H.R. 3642) entitled `An Act to authorize the President to award a gold medal on behalf of the Congress to Charles M. Schulz... (Engrossed Senate Amendment)[H.R.3642.EAS]
37 . To authorize the President to award a gold medal on behalf of the Congress to John Cardinal O'Connor, Archbishop of New York, in recognition of his accomplishments as a priest, a chaplain,... (Engrossed in House )[H.R.3557.EH]
38 . To authorize the President to award a gold medal on behalf of the Congress to Charles M. Schulz in recognition of his lasting artistic contributions to the Nation and the world, and... (Introduced in the Senate)[S.2060.IS]
39 . To authorize the President to award a gold medal on behalf of the Congress to Jesse L. Jackson, Sr. in recognition of his outstanding and enduring contributions to the Nation. (Introduced in the House)[H.R.1709.IH]
40 . To authorize the President to award a gold medal on behalf of the Congress to John Cardinal O'Connor, Archbishop of New York, in recognition of his accomplishments as a priest, a chaplain,... (Introduced in the Senate)[S.2076.IS]
41 . Father Theodore M. Hesburgh Congressional Gold Medal Act (Introduced in the House)[H.R.1932.IH]
42 . To authorize the President to award a gold medal on behalf of the Congress to General Henry H. Shelton and to provide for the production of bronze duplicates of such medal for sale... (Introduced in the House)[H.R.2672.IH]
43 . To authorize the President to present a gold medal on behalf of the Congress to former President Jimmy Carter and his wife Rosalynn Carter in recognition of their service to the Nation. (Introduced in the House)[H.R.4289.IH]
44 . To present a congressional gold medal to astronauts Neil A. Armstrong, Buzz Aldrin, and Michael Collins, the crew of Apollo 11. (Referred in Senate)[H.R.2815.RFS]
45 . To authorize the President to award a gold medal on behalf of the Congress to Rosa Parks in recognition of her contributions to the Nation. (Enrolled Bill)[S.531.ENR]
46 . To authorize the President to award a gold medal on behalf of the Congress to Jesse L. Jackson, Sr. in recognition of his outstanding and enduring contributions to the Nation. (Introduced in the House)[H.R.1821.IH]
47 . To authorize the President to award a gold medal on behalf of the Congress to Charles M. Schulz in recognition of his lasting artistic contributions to the Nation and the world. (Referred in Senate)[H.R.3642.RFS]
48 . Honoring the Navajo Code Talkers Act (Introduced in the Senate)[S.2408.IS]
49 . Expressing the sense of the Congress in opposition to the use of proceeds from gold sales by the International Monetary Fund for structural adjustment programs in developing countries. (Introduced in the House)[H.CON.RES.132.IH]
50 . Honoring the Navajo Code Talkers Act (Introduced in the House)[H.R.4527.IH]

View Yesterday's Discussion.

BB- Netking:
Recall SDRers posts several mth's ago at Kitco?
The gist was if Au was driven below $280, the PGM prices would explode.

Me-thinks we are seeing this now.

Not meaning to discredit both your well researched info ;-0)

Topaz: I didn't pick that scenario, but that's OK. I have got my tickets paid in full though for the 'Silver Express', it's due to leave the station shortly & promises a ride faster than the Japanese bullet train!

Black_Blade; I read on another gold forum a while back that "When Kaplan talks idiots listen." This may be a little harsh on him. Some of the better analysts around are only correct 60% of the time anyway but employing moving stops makes incredible success on managed funds despite the 40% 'close out'. The problem is often some of these analysts know what is going to happen but not necessarily exactly WHEN, hence waiting with the finger on our 'keyboard trigger' for the right time.
Kaplan to his credit did pick the recent top late last year in gold & sold out at that peak much to fellow gold analysts disgust who were about to ride a 'gravy train' to the stratosphere.
What in my opinion makes a "great" analyst as opposed from merely "quite a good one" is timing rather than events predicted themselves. Wolanchuk is another with plenty of good predictions, but mostly only in the sweet by & by although many savior his every word.

Yup, same here! phyz only though. 50/1 Ag/Au x Wt
Seems to me if the Man(ipulators) allow Au back to the $280-300 range in the process taking the shine off the Dollar, then PGM's will Top/drop. Time will tell (hopefully)

FWIW- DO NOT trade on my scatterbrain notions.

What's the Dinar/Dirham ratio, svp?
ORO looked at this a while back but it'd take an eternity to find it in archives.

I have nothing against Kaplan. He and I would both consider ourselves contrarians, though he prefers Technical Analysis, whereas I prefer Fundamental Analysis. I do have trouble with the idea of following "professional" analysts as they generally tout a position after it has already moved. I don't necessarily place Kaplan in that crowd though. I am mostly refering to analysts from the investment houses who are usually "a day late and a dollar short". I think of them more as followers who exhibit a lemming-like behavior. They don't tend to look at the big picture but rather run with the other lemmings. When this happens, I tend to take a very close look at what is happening and start to crunch the numbers. You may have noticed that these analysts tend to tout stocks that have already peaked or tell investors to sell after a stock has already bottomed. That is why I like to use the general consensus of analysts as one predictor for buying/selling stock in addition to looking at the balance sheet and the overall big picture. I have had some success using this strategy. I sold most of my Telecoms and Techs when they began touting them. I now have some profits and some "free-ride" shares to boot, and all that was before the NASDAQ crash. I bought oil drillers and services when they claimed oil was headed for $5.00/bbl. So you see, I love analysts. God forbid that they begin to make correct calls on the market. PGMs were ripe for the recent moves over the last few months. It was a "no-brainer", in spite of some attempted manipulation by the TOCOM. The forces that manipulate the Gold and Silver prices could lose control eventually, so I continue to accumulate some physical and mining shares on the cheap while I can. Meanwhile, I am quite comfortable as analysts "pan" Gold (pun intended). This latest Bull market in equities has been good for many portfolio managers, but it didn't require a lot of rocket-science. One could have papered the floor of the monkey cage at the local zoo and probably could have let the droppings select a winning portfolio. I suspect that life could get a bit rough for these portfolio managers in the near future.

BTW, Pd is now up $18.00 at $828.00/oz and Pt is up $9.00 at $584.00 in overnight trading. Shorts are covering, throwing in the towel and heading the the showers. Of course I grabbed a position in physical Pt a couple of years ago and hold some SWC. Could be only a matter of time for gold to follow the PGMs. I wonder if some strategic reserve metal will suddenly show up on the market in a desperate attempt to hold down the price of PGMs? Somehow, I doubt it.

Sources: Bridge News, and BloombergAsia Precious Metals Review: Physical, short-covering firm gold
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--August 1--Physical demand and short-covering supported spot gold for much of the Asian trading session on Tuesday but the trading was extremely sluggish, dealers said. Spot platinum and palladium extended the overnight gains, while selling offers increased at the U.S. $590 and $830 levels, respectively, they noted.

Black Blade: Need I say anything here? Can you say short squeeze? I knew you could.

Tokyo, August 1 (Bloomberg) �

Futures contracts for the following commodities are moving in Tokyo. The ticker symbol for the most active contract is given in parentheses. Platinum for June 2001 delivery {JAA } on the Tokyo Commodity Exchange, the world's biggest market for platinum futures, rose its trading limit of 80 yen, or 4.28 percent, to a 10-year high of 1,950 yen a gram ($553.75 a troy ounce). Speculators bought on expectations Russia, the second-largest platinum producer, will not resume shipments until later this year, a trader said. Speculators bought on concern demand will further rise from automakers seeking supplies of the metal for use in anti-pollution devices, a trader said. Platinum also gained after the metal rose 2.5 percent overnight on the New York Mercantile Exchange, the trader added. (News: NI PGM)

Black Blade: Limit up on TOCOM.

Meanwhile, S&P Futures up +0.10, Fair Value down -1.99. Market may be searching for direction and probably head lower at the open if these levels hold. Au is comatose though up $0.10 at $277.30, Ag down a penny at $4.96, Pt is still rising +$8.00 at $581.00 ($588.00 at AM London Fix), and Pd is up $19.00 at $830.00 ($835.00 at AM London Fix). Oil is barely creeping up $0.10 to $27.53/bbl in spite of lacking capacity at refineries and Saudi statements that a 20 trading day cycle above $28.00/bbl is required before an increase in production. Looks to be another interesting day on Wall Street.

http://www.usagold.com/INFOPACKET.html#anchor1692132We are pleased to make available to you the recently completed CLIENT MEMORANDUM: "How You Can Survive a Potential Gold Confiscation".

Assembled by George R. Cooper, J.D. and by Michael J. Kosares, this memorandum explains how a gold confiscation might be possible once again --nearly 70 years after the last one occurred in 1933 under President Franklin Roosevelt. Offering a Question & Answer overview with supporting appendices, this memorandum provides to our knowledge the most detailed and comprehensive documentation assembled to date on the subject of gold confiscation in the United States.

We do not in any way intend this to be a formal legal opinion, but rather a simple presentation of documents and political/economic history that might help you form your own opinion on this matter in which we believe, given the weight of legal precedent as reprinted here, that pre-1933 gold coins offer the most suitable protection (for the acquisition-oriented yet confiscation-minded individual) against a potential government gold confiscation.

This memorandum is available AT NO CHARGE as a .pdf file (Portable Document Format), or for a small fee for the quality bound and printed 50-page document. Click the link given above to learn more.

double bottom, go up fill the gap, wheat to follow. good for crb. got gold. need more.

gold

need to take out 288-89, now let's go.

you cannot control, only catch. Tsung Tsai

http://www.mises.org/fullarticle.asp?control=477&month=23&title=Can+the+Boom+Last%3F&id=23eom

http://www.kitcomm.com/comments/gold/2000q3/2000%5F07/1000727.094128.gold%5Fcoas.htm
A post from "Gold Coaster" last week on another forum stated that a Dow Jones newswire through Australia had carried a report about lack of volume in the gold market. It stated that one possible reason was that a .... "John Tyree, a broker at Fimat ( ? ) in New York" had heard that a major trade house is running the market and that this had discouraged a lot of the locals. These traders had gone "downstairs to the Nymex to trade energy futures."

Do you see this sort of thing happening? If so, what chance to you (or we) have of beating "them"?

http://www.usagold.com/Order_Form.html For a Gold Investor Starter Info Packet8/1/00 Indications
�Current
�Change
Gold December Comex
284.00
+0.80
Silver Sep Comex
5.04
+0.01
30 Yr TBond Sept CBOT
98~26
+0~07
Dollar Index June NYBOT
109.27
-0.10


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(8/1/00) www.USAGOLD.com Daily Market Report . . .Gold
recovered a bit in the early going but continued to seesaw just
above the $275 mark. Gold seems to be reacting to yesterday's
dollar weakness which appeared about mid-session yesterday. This
morning the dollar is mixed -- off slightly against the European
currencies and up slightly against the yen. Thin summer conditions
continued in the gold market in Europe where many are on
summertime break. In the United States, July usually marks the
height of the summer doldrums and demand begins to recover about
mid-August. Savvy gold buyers often time purchases for the
summertime trough when gold is often cyclically at a low point and
just before we go into the fall buying season.

Since mid last year we have been getting good physical buying on
the dips and aggressive paper selling on the upside breaks
probably from the big three gold trading banks -- Citibank, Chase
and Morgan. Evidence of this recently cropped up in a report from
the World Gold Council and was cited in the upcoming August News
& Views. Reports the Council: " . . .the notional value of the
off-balance sheet contracts in gold derivatives of the 416
commercial banks regulated by the OCC had risen to $83.4 billion,
corresponding to around 9,000 tonnes of gold, at end-September
from $61.4 billion at end-June. Subsequently the notional value
rose to $87.6 billion at end-December and to $95.5 billion at
end-March 2000. (Ed.Note: !!!) Nearly $80 billion of the March
figure was accounted for by just three banks: Chase Manhattan,
Morgan Guaranty and Citibank." Common sense dictates that if that
kind of derivative power were coupled on the long side with the
strong international demand already in progress, gold would be
flirting with an $800 price, not $280. So we are going to assume
that the Big Three are net short the gold options market.

Please note that the World Gold Council points out that these
derivative positions are "off-balance sheet." Up until the new
procedures went into effect, derivative gains and losses could be
buried as a footnote to the financials. From here on out, they
must be incorporated in the bottom line. In other words, they must
be recognized. We do not know at this point what the effects of
this reporting are going to be; but if Leann Baker, the top gold
mining analyst for Salomon Smith Barney, is right (See Gilded
Opinion: A New Millennium Gold Rush), under the new rules
"derivative-related damage to company balance sheets could be
staggering." The presumption follows that if the damage were
indeed "staggering" some of the practices which up until now have
contributed to keeping the gold price in check would be at the
very least phased out, and possibly dumped as soon as possible --
at the behest of angry and now pro-active shareholders and board
members.

The recent disclosure on Friday by Newmont Mining Company that it
had taken a significant loss due at least partially to its
"marked-to-market" derivative positions might the first of many
such reports. Though Newmont is considered a lightly hedged
company and marking to market doesn't really threaten its on-going
viability, it does illustrate the phenomena. Whether or not,
Newmont is a bellwether in this regard remains to be seen. There
is little doubt though, at least within the culture of gold mining
companies and their stockholders, it has attracted attention
because Newmont is a case in point as to what happens to a gold
mining company's bottom line when the physical price exceeds the
forward sale price. Newmont sold gold forward at $270. At the end
of June and the second quarter, gold was trading in the $290
range.

The prime question hanging over investment markets is how the new
procedures will affect a variety of financial businesses,
including gold mining companies. We should get our first inkling
over the next few weeks.

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

Please note that we have changed our daily gold pricing from the
August to the December gold contract.

An Invitation:

The August issue of News & Views: Forecasts, Commentary &
Analysis on the Economy and Precious Metals, is now being
edited and will be on the way to the printer shortly. This month's
issue reveals some very interesting statistical information on the
worldwide gold derivative position. Short & Sweet opens this
month as follows:

"Now that gold has successfully navigated the July doldrums,
what do we have to look forward to? How does a price of $2500
per ounce sound? That's the number Leigh Goehring of Prudential
Investments dropped in a Forbes magazine interview in mid-July.
His reasoning echoes themes developed in this newsletter last
month: "I am a raging bull when it comes to gold," he declares.
"In times of inflation, people always end up just gravitating to
it. . . The period where the U.S. economy could expand without
fear of inflation is quickly coming to an end."

For those unfamiliar with our widely circulated newsletter, a few
words of description are in order. It's publication is greatly
anticipated each month as it probably provides the best summary on
gold news and opinion available today. The Short & Sweet format
mentioned above offers gold events in a rapid fire, no-nonsense,
bullet format designed for busy people who want gold related news
and opinion without the unnecessary fluff. Appropriate charts,
tables and graphs are also published to better summarize the
information. We also offer the clever political and financial
cartoons of the award winning Ed Stein of the Rocky Mountain News.
News & Views is a private letter offered free to our current and
prospective clientele.

Along with the latest issue of News & Views, you will receive our
Gold Almanac 2000 which offers fundamental background on the
yellow metal. The theme of this year's Almanac is wealth
preservation and one of the key articles is how those in the
1970s -- a decade many are comparing to the present -- not only
survived double digit inflation, but prospered. The packet is
offered at no cost or obligation.

You can call Marie at 1-800-869-5115 to request the
newsletter and Almanac or click above.

These brokers don't care which way a mkt moves as long as they're makin money.

97% are crooks just like cftc and nfa etc.(the police of an industry out of control.

Why you think greenspan talks about offshore trading and overseas exchanges.

When gold turns as , it is showing signs, the guys you've learned to hate will be your loved ones. They will fuel this puppy and it will be global.

Forget u.s. exchanges. gold is world class!!!!! Never forget her , she's a class act. fiat is trash.

Now you're talking! Keep the good stuff comin' - cb2

Aristotle (07/27/00; 18:10:02MT - usagold.com msg#: 34031)
Maaaaaaan Overboard!
Confer msg#: 34009
Dr. Hein has gone over the edge. Quick, somebody throw him a lifeline! It's always a shame when a great thinker starts to spiral into the abyss as a product of such close scrutiny of an issue that molehills become mountains into which you clip the wing of your airplane. Sure, compared to a perfect world many things appear to come up short, but they certainly aren't BLEAK. Sheeeeeesh, Doc. Take two and call me in the morning.

�

Gold discussion. Get you some. ---Aristotle
------
Thanks for the kind words, Aristotle.
SteveH, your Worldnetdaily article was an important article. Thanks.
-----
Aristotle, Hein is precisely right. He may be undergoing a period of despair, but he is still correct in essence. The taking over of money by the state both with and against the bankers over a period of nearly 400 years, is very much key to separation of control of government from the governed. If government prints up the money at will then it can buy anything and anyone. It bought the bankers and vice versa, of course.
If people choose to hide their finances and avoid taxation in gray/black markets (in high tax nations the underground economy often reaches over 40% and in some rare cases up to 80%), it has no effect on the ability of government to obtain resources in the short run, until the citizens also stop using government scrip for trade. The reversion to barter may actually be beneficial in the modern world of electronic settlement, because it would give the people involved a substitute for artificial exchange media that can be developed into a parallel settlement system where the settlement is with title to physical assets held outside their countryn

ET quotes a key view of Hein's which I share to a great extent; government in its current version as the incorporated organization of the "modern democratic state", is still in the business of extortion and the selling of privilege. Though democracy allows some measure of freedom, and presses government to respond somewhat to popular concerns, there is still no way for government to provide anything without taking it from someone else. Government's legal structures of decision-making are very far from having input from individuals at the "grass roots" level, and do not make necessary any obligation to respond to this input. In the rule-making functions, government agencies have more solid obligations to other governments and other agencies than to the individuals affected by their decisions and in who's name the government acts.

As people of means have managed to move themselves and their funds to more friendly jurisdictions, the governments of "modern democratic states" have come to the point of claiming to have authority to tax their individual citizens when these individuals are abroad in other jurisdictions, and imposing "exit taxes" on the citizens who want to eliminate citizenship. Governments of "modern democratic states" are claiming outright that they OWN the citizen, and such ownership is being recognized in international treaties such as those reported in the worldnetdaily report posted here a while ago:
http://www.worldnetdaily.com/bluesky_bresnahan/20000731_xnbre_bank_priva.shtml
.
The Roth IRA program was used to convert future income tax revenue to current tax revenue, the capital gains tax cut and holding period shortening gave the current holders of stock an opportunity to sell at a lower tax bite and induced buyers to come in expecting higher retention of future capital gains. All of these are indications of a government hunger for current funds. Since the new funds are used to pay down the external debt of the US government (the amounts owed the SS trust fund are WITHIN the government). The question is raised as to why this is so important.

Obviously the banking information disclosure in the bill above and the OECD report it quotes are implying that OECD governments are tax starved, and that they have the intention to conduct "tax competition" in keeping business and "geographically mobile income" within their borders. If this smacks of 1930s style restriction on trade, capital flows, and movement of labor and equipment, it is because the governments are desperate to keep actual economic activity and assets within their reach. Once international currency banking becomes open to the view of "tax authorities" and the "managers" of international trade and capital flows, they will soon attempt to control these further in their favor and to take away whatever they can.
This being the last refuge of currency assets from government, the next step will be into cyberspace and encrypted trade settlement with gold and other commodities and without currencies at all. These will not even show up on the global trade and banking statistics, not to speak of their not being covered by any of the elements of the legal infrastructure of the currency system, since the economic activity will grow to skirt the currency system altogether through what governments would call "barter".

The absence of an escape route for profits from taxation will lead to the movement of the most profitable businesses and the most productive people of the OECD's more extortion prone jurisdictions to other countries where individual property and privacy are protected better, and where the cost of the protection is much lower and less subject to government control. "Industrialized countries" of North America and Western Europe will suffer the actual realization of the effects of their deindustrialization over the past 40 or 30 years (US and Europe, respectively) when the supply of cheap goods from indebted nations is cut off as currency diminishes in importance for settlement of trade in the next few decades.

See the report itself:
http://www.oecd.org/daf/fa/harm_tax/harmtax.htm#Report
The report points to the "tax havens" as practicing "harmful" tax competition. Though taxes are 98% harmful to the economic well being of the population (since they remove spending of people from that which they choose to that which they did not), the bank secrecy which allows people to avoid taxation by their native governments is called "harmful". Harmful to whom?
The governments of the OECD countries are obviously those that feel "harmed". Being deprived of their "fair" share of their cattle's (a.k.a. citizens) income and assets. And limiting their powers for taxing and "managing other aspects of globalization such as trade, investment, capital flows" (OECD Secretary General Donald J. Johnston). These are all elements of the "free market" which the OECD governments have been trying to circumvent and distort for all of their history. The growth of global trade at rates much higher than those of any of the economies of these nations is exactly because central "management" of it was absent or ineffective, and allowed many corporations and individuals to make business and investment decisions without their native government's input and often outside those government's knowledge and control.

The OECD claims that the "tax havens" are not "appropriate" authorities for determination of tax liabilities on income and assets of the people and corporations in the OECD member's jurisdictions. OECD governments will quickly find that the reaction to this approach to grabbing more of their people's wealth will be the physical escape of both businesses and people to the tax havens, so that future tax collections will drop further and more steeply, despite a possible short term rise during the adjustment period.

Aristotle and CavanMan, Hein is 100% correct in his observation, and the mechanics of state are structured exactly so as to obtain maximum control with minimum expenditure of resources. Thus banks must report "unusual" actions of their customers and employers withhold income taxes, while individuals and corporations must provide government with the documentation of their income and their revenues and expenses. Government has always been a commercial enterprise, whether in the form of monarchy or republic, or majoritarian democratic dictatorship, and its business that of a protection racket and extortion machine. Its tool is the threat of violence. Government IS corruption.

http://www.usagold.comMr. Wolavka has it so close to the truth...When this market turns up (starts an uptrend) those that are short will probably cover, and others will get long the gold market.

Can you imagine what kind of power this market can have if we can get one or two big boys to cover? much less turn them bullish?

Some on this forum think futures are the enemy...are you listening Mr. T. Crier?
Futures are not...in fact futures will help us all make plenty as the bull gets going.

We are team-mates...all of us...stock, physical, and futures bull-market traders...and we will make money...

Start the trend bullish, the fundamentals are changing...and the gold fever starts.

One guy says: buy cheap buy now (Scruffy from GE.)So call up the host...and buy some coins if you want...we are cheap right now...and it's NOT going to last...

Stop BLAMING the futures people...ok, blame the shorts, but remember, they have been winning for awhile...turn them friendly...we get a great ride up that will feed on itself.

Thanks for the reply and the pep talk. Sure looks like you can handle those guys trying to bust our chops. I'm with you. Let 'er rip, and let us know what you're up to.

>>>>>Though democracy allows some measure of freedom, and presses government
to respond somewhat to popular concerns, there is still no way for government to provide anything without taking it from someone else. --- Government IS corruption.<<<<<<

That's the nuts and bolts of it alright. But even if you put it up on billboards around the country, the Sheeple wouldn't "Get it"!

At least we can put this post in the Hall of Fame. Consider it nominated.

Don't have too much to disagree with other than I prefer metal. Must add though I've been reading comments like that for over a year now. Every trader has been wrong YTD. Thank you for your insight. I hope you are correct.

Sir Gold_Hunter, you posted; "Some on this forum think futures are the enemy...are you listening Mr. T. Crier?
Futures are not...in fact futures will help us all make plenty as the bull gets going." Netking responds; It sounds good for all of us (and for your occupation and my trading also GH!) but the challenge is the paper may burn when the market really takes off and it will burn for sure at a certain rate of price movement over time....there is the risk Sir.(Townie may add his opinion on this)

Topaz - You posted; "What's the Dinar/Dirham ratio, svp?
ORO looked at this a while back but it'd take an eternity to find it in archives" > Sorry buddy, don't have this at hand, maybe another on the forum can help.

Black_Blade - "We can't live with them and we can live without them!" (I refer to Analysts and not our wives)

ORO, if you have a mind to and a few minutes, could you give the forum an update on the current state of the gold market within the macreconomic environment; where we're at and where we're headed? Not looking for investment advice nor timing, just your analysis of the facts as you interpret them. Many thanks....CM

http://biz.yahoo.com/prnews/000720/placer_dom_10.htmlCurrently the share price is up slightly on(PDG).
Below is an explanation of their hedge-ing strategy which seemed to provide almost as much income as the sale of metal. Click above URL for latest report.



<<<(i) Forward contracts include:

a) Spot deferred forward contracts - a forward sale which will accrue
contango until the intended delivery date of the contract. The
rate at which contango accrues will be determined by U.S. dollar
interest rates less gold lease rates existing at the time of each
rollover. The average price reflects the expected value to
maturity of the contracts.
b) Fixed forward contracts - a forward contract where the interest
rate and gold lease rate of the contract are fixed to the maturity
of the contract.
c) Fixed interest floating lease rate contracts - a forward sale
which has the U.S. dollar interest rate fixed to the maturity of
the contract. Gold lease rates are reset at rollover dates
ranging from 3 months to 3 years. The average price reflects the
expected value to maturity of the contracts based on assumed gold
lease rates.
(ii) Put and call options are disclosed based on the intended delivery
date of the option. The expiry date of the option may differ from
the intended delivery date.


Forward sales contracts establish a selling price for future production at the time they are entered
into, thereby limiting the risk of declining prices but also limiting potential gains on price increases.

Put options purchased by the Corporation establish a minimum sales price for the production
covered by such put options and permit the Corporation to participate in any price increases above
the strike price of such put options.

Call options sold by the Corporation provide the buyer with the right, but not the obligation, to
purchase production from the Corporation at a predetermined price on the exercise date of the
option.

Call options purchased by the Corporation provide the Corporation with the right, but not the
obligation, to purchase the commodity from the counter- party at a predetermined price on the
exercise date of the option.

The actual gain or loss to be realized on the commodity hedging contracts will be determined by the
spot price on the maturity of the contracts.

Placer Dome Inc. is one of the world's largest gold mining companies, producing about 3 million
ounces (90 tonnes) of gold annually at production costs that are among the lowest in the industry.
The Corporation's shares are traded under the symbol PDG on the Toronto, New York, Paris,
Swiss and Australian stock exchanges. International Depository Receipts for its shares are traded on
the Brussels Stock Exchange.>>>

Posted for educational purposes only.....beesting.

http://www.murabitun.org/WITO/introduction/02what.html
According to Islamic Law...


The Islamic Dinar is a specific weight
of gold equivalent to 4.3 grams.

The Islamic Dirham is a specific
weight of silver equivalent to 3.0
grams.


Hope this posts O.K.....beesting.

abandoning bank secrecy and tax havens alltogether - seems a
step towards "1984", including total financial and personal control. The smokesreen of mafia et al money laundering being a mere excuse to achieve these ends without having to declare the purpose openly?
As you know this has been a major topic in the last Portugese EU-summit in June as Austria - may have stubbornly , though hapharzedly- used their constitutional right to this personal freedom of at least some banking discretion (in the original meaning) as a lever to lift the "sanctions". Though, I feel every discretion in individual dealings with their banks has to be "private" in order to keep up some semblance of personal liberty in a world getting more "Orwellian" with the day.

Over the years tax havens have become more and more beleagured, blackmailed and finally massively attacked under
the pretext of laundering, while the main purpose -mostly- used to be save(r) havens from already severely taxed capital to more (tax) friendly environs - versus evasion or laundering.
The Swiss have been attacked since the Mark Rich commodity scam and have been blackmailed to the effect to exclude them from the US markets in the 80-ies - may have been cheaper to tell the IRS and Co. to bbugger off and use substitutes and may have even saved their gold. Liechtenstein came under fire recently -thanks to Kohl's election funding - and so on...

It looks like laundering and tax evasion takes a backseat to the real purpose - control. Got gold? - bury it deeply!
cb2

http://www.oecd.org/daf/fa/material/mat_03.htm#material_tax competitionModel Treaty
Tax Statistics
Transfer Pricing
Tax Evasion
Consumption Tax
Non Member Activities
Harmful Tax Practices
Financial Innovation
Electronic Commerce
Fighting Corruption
Strategic Management .

http://www.washtimes.com/internatlads/bahamas/7.html
"Julian Francis, governor of the Central Bank (Bahamas), indicated that the OECD report was high-handed and ill-informed and that some evidence indicates that the initiative was spearheaded by a few countries and that not all OECD countries are of the same view. "

"The Honorable William Allen, minister of finance, clearly explained to the OECD in his 'Statement by The Bahamas to the OECD Forum on Harmful Tax Practices,' that 'The Bahamas has never had, throughout our entire history, a tax on income and capital and does not hold to the view that such taxes are inherently a natural component of an appropriate tax regime. The Bahamas is an international financial services center; it is not a tax haven developed to facilitate tax evasion for international purposes. The Bahamas has no interest in facilitating, aiding or abetting unlawful acts, nor will it be associated with rogue action of individual countries or groupings. The Bahamas position has been clearly stated: We have no desire for businesses seeking to hide or shelter money derived from corruption, drug trafficking or the proceeds of other criminal activities.' "

ORO: Note that not associating with rogue nations would leave the USA and Britain completely out of the picture. Why does he join the chorus against drugs? Why not join together with many other countries threatened by the OECD power grab to make a clear offer to druggies and tax evaders to come and operate their finances freely and openly in the Bahamas and other low tax countries? Neither of these are criminal activities as they do not directly involve fraud or violence, but that made necessary in reaction to that perpetrated by the thieving and controling governments they seek to escape.

The US has already invaded countries from Granada to Panama in order to "fight drugs" and "money laundering". There is only the threat of overt violence by the US and the other countries who have let it do their dirty work to back up the OECD demands. Doubtless, this threat has been made. I suggest the Bahamas should go shopping for Nukes in Uzbekistan, China, India, and Pakistan - it is the only effective detterent to the US and friends.

http://www.g8summit.gov.uk/forfin/tax.shtml
"The G7 agreement;

i) reinforces the OECD's Report which provides a platform for tackling harmful tax competition, and for obtaining more information about transactions in tax havens and preferential tax regimes. This complements and mutually reinforces the EU Code of Conduct on Business Taxation;

ii) addresses a potential weakness in international anti-money laundering systems by ensuring that financial institutions report suspicions about the movement of criminal assets regardless of whether they believe that the criminality involved is tax related. This is partly motivated by growing evidence that criminals can evade anti money laundering systems by presenting their affairs as tax related to reassure their bankers, brokers and professional advisors;

iii) provides an important new source of intelligence to tax authorities by making it possible for suspicious transaction reports received by law enforcement agencies to be made accessible to those investigating tax related crimes domestically or overseas. "

"UK Financial Secretary Dawn Primarolo was yesterday appointed the first chairman of the new EU Code of Conduct Group. The Group, which will assess the business taxation regimes of member States and examine the extent to which they contain elements that represent harmful tax competition, will meet regularly and report back to Ecofin council meetings. Ms Primarolo has been appointed for a two-year term (HMT press notice 70/98). "

ORO: The new "Untouchables". USA and UK lead the charge and conduct the administration of EU efforts to squeeze one more drop out of their people and the rest of the world.


http://www.iccwbo.org/home/statements_rules/statements/2000/harmful_tax.asp
Letter dated 10 May 2000 from the Chair of the ICC Commission on Taxation to the Chair of the UN Ad Hoc Group of Experts on International Cooperation in Tax Matters

The Business and Industry Advisory Committee to the OECD... points out certain shortcomings, fundamental flaws and biased and onesided opinions in the OECD's Report. It especially felt that the views expressed in the Report stem too much and nearly exclusively from the taxing authorities' general perception that there apparently exist possibilities for abuse by the business community. While in general questioning many of the premises used in the Report, BIAC concludes by urging the OECD not to promote new obstacles to cross border trade and investments and to avoid discrimination in the field of mobile activities. Furthermore, it emphasizes that the thrust against low or lower tax burdens or jurisdictions is inappropriate and that the outcry against tax competition is counterproductive. "

ORO: Why do these people "respectfully submit" anything to the UN. Why not call the member governments murderers, thieves and kidnappers and the organization a "racket"? Same goes for the OECD and the various G-7 "task forces" organized by government agencies attempting to recapture escaped citizens (i.e. slaves) and their assets and incomes.

http://www.fsforum.org/Press/Home.html
The G-7 are treating the rules that they write as "international standards" that are claimed to be superior and expect them to bind other sovereign jurisdictions (unexplained is why) and not acting according to these "standards" is viewed as grounds for retaliatory action such as unilaterally canceling international agreements on debt and interbank settlements. This ammounts to breach of contract, but the small "tax havens" are viewed as having no power to retaliate.

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

US Treasury statement from 6.26.2000

"U.S. Department of the Treasury

TREASURY WELCOMES OECD REPORT ON HARMFUL TAX COMPETITION

Treasury Secretary Lawrence H. Summers today welcomed the OECD's report on the global effort to protect the integrity of national tax systems from harmful tax competition. The report details the OECD's work in this area and identifies 35 jurisdictions as tax havens and 47 tax regimes in OECD member countries as potentially harmful.

"The identification of tax havens and potentially harmful tax regimes is a crucial step in preventing distortions that could undermine the benefits of enhanced capital mobility of today's economy," said Secretary Summers. "It is our hope that the listed tax haven jurisdictions will take this opportunity to work with the OECD to reform their harmful tax practices."

Last week, the OECD announced that six jurisdictions made commitments to eliminate their harmful tax practices and would not be included in the tax haven list, even if they otherwise would have met the tax haven criteria OECD member countries committed to eliminate their harmful tax practices in 1998. Those countries will be meeting with many non-member countries this week at a symposium in Paris to further discuss ways to address the global problem of harmful tax competition.

"We encourage all countries to follow the example set by the OECD member countries and six non-member jurisdictions that have committed to eliminate harmful tax practices," Secretary Summers said.

The OECD's Forum on Harmful Tax Practices, which the United States co-chairs, was established in April 1998 to address the growing problem of unfair tax competition. The Forum will continue its efforts by working with cooperative tax havens, developing more detailed guidance to help countries determine whether their tax regimes are actually harmful, and developing and coordinating defensive sanctions."

ORO: "Defensive actions" are what? Banking embargoes? Trade sanctions?
Since all the methods of "defensive action" require breach of existing trade agreements by the OECD and G-7 members and require imposition of external law on independent sovereignties, the "defensive actions" are CAUSUS BELI, and justify the taking of countermeasures by the 41 countries that are such affected. Ultimately, the "defensive action" can only be backed up by threat of invasion.

Anyone remember the UN charter? Perhaps 2(4)2 rings a bell?

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

The implications of these (and other) actions are that the US and the OECD government's revenue and law/security agencies have grown to overcome the public political world and are pushing around legislators and leaders of the executive functions. The separation of interests of the great banking houses, their owners, and the businesses in their groups, is growing to quick fruition. Though much of the big old money is enveloped in anassailable "foundations", much of the current activity occurs in these tax havens. The attack by the G-7, IMF, World Bank, and OECD member's bureaucracies on the cushy deals of the politicians and large businesses is indicating that those elements that have kept government's urges in check, are falling back just as the populace has grown disenchanted with the possibility of government ever being able to provide any value at all that can't be had at lesser cost without it.

There have been claims that the political structure of the two parties has undergone a struggle between business, organized religion, racketeers and government bureaucracy for ultimate control. It seems that the bureaucrats now have the ultimate upper hand within the two parties, as the two last presidents and the current republican candidate were associated intimately with covert organizations.
Also, the congress seems very happy to let go its control over revenue and security/law agencies at the Federal level in repeated attempts (some successful) to give the agencies complete, unaccountable, and arbitrary power over any and all individuals and organizations. The retractions of power giveaways to the Federal agencies only occur after loud protests come from the voters.

It seems that the current departure of interests dates back to 1974, and the current ascendancy of the agencies dates back to 1986 or so. Today, the business and banking interests share declining power to influence government externally, and must cut deals with members of the bureaucracy itself, as they have obtained power over many individual congressmen and over all of the cabinet.

Will it be a former congressman who will do the next attack on a Federal building?








ORO: They want EVERY SINGLE PENNY, and if they let you keep it, they want to know where it is. The only reason they would care is that they want to take it later, if not today.

According to Islamic Law...

How can I use them?

The Islamic Dinar is a specific weight
of gold equivalent to 4.3 grams.

The Islamic Dirham is a specific
weight of silver equivalent to 3.0
grams.

Umar Ibn al-Khattab established the
known standard relationship between
them based on their weights: dinars
must be equivalent to 10 dirhams."

As a simple farmer, I have greatly enjoyed the recent analogies of crops, commodities, futures, and profits to place the phonemics of gold within reach of the masses.

I would recommend the words of Sun Zu, "...the States' first duty lies in the defense and acquisition of territory..."

No mater how miserly, there is not a patch of ground that someone won't fight to the death over. I contend all wars have been fought over defense and acquisition of territory.
All commodities, including a "Super Commodity", such as Gold, can be transported. Land can only be transformed.

Trading ON commodities or paper for profit is mere speculation. Trading IN commodities for gold or land, is wealth acquisition.

("Speculation" about the "profitability" of "wealth acquisition" is easily answered by taking a seat at my supper table....)
nummus aureus

I second Sir Peter's nomination of ORO's msg#: 34332 to the Hall of Fame. Couldn't have said it as well myself.

"Right Arm"?? Perversion of the 60s, "Right ON!!"

High regards,
Journeyman

Answers more than my query - best cb2

I would like to second as a third ORO's 34332 to HoF - alas
then came 34342.
As it always is with ORO one great post is followed by another great post.
I would hate to see any of his posts obscured by being abandoned to Halls of famous oblivion, though I guess we'd have to simply wait for ORO completing his book. I would like to subscribe for 3 volumes of first editions, since I suspect it will be sold out before hitting the bookstore (not AMZN).
In spite of above allow me to be the third seconder of
ORO's 34332 and first mover for HoF of 34342 -cb2

http://cbs.marketwatch.com/news/current/futures.htx?source=htx/http2_mwOil futures set to rocket higher
API data on crude stocks drawdown called �shocking'

NEW YORK (CBS.MW) -- Crude futures shot up 40 points in overnight trading after the American Petroleum Institute reported that oil stocks fell 9 million barrels in the latest week.

"This almost seems too unbelievable to be true," said Phil Flynn, senior markets analyst at Alaron Trading. In comparison, he noted, the market expected stocks to build by 300,000 to 700,000 barrels. "Where did the crude go?"

Flynn said that if the Energy Department confirms the number Wednesday, crude would take a rocket ride.

"If this number is correct, this will shake the market to its rafters," he said. "I would say that, overall, the crude-oil-stock drop will overshadow the entire complex. If the DOE confirms a sizable drop, a lot of people will need to re-evaluate this market." .....................

Gotta love that language......just wait till they're talkin about GOLD!!!!!!!!!!!!!!!!!!!!!!!!

Have you noticed that people around here have taken a liking to you?

There have been more than perhaps two handfulls of closing days when, like today, one index would be up 80 something and the other down 80 something. I haven't kept a journal but I am sure of it. What it means (probably nothing) I don't know but it does seem a little odd.

Disclaimer: I do not believe in conspiracies.

Michael,
I just wanted to say -before I turn in (and forget) today's market report was a classic -thank you -cb2

I don't believe in cabalistic plots say's one conspirator to his accomplice a.k.a. the fly, as he finds himself entangled in the spiders web. Gold night - cb2

A very Ponzi Day today in New York !

$hifty

SIR ORO,

You be one RADICAL dude -- and when you're right you're right!

"The US has already invaded countries from Granada to Panama in order to "fight drugs" and "money
laundering". There is only the threat of overt violence by the US and the other countries who have let
it do their dirty work to back up the OECD demands. Doubtless, this threat has been made. I
suggest the Bahamas should go shopping for Nukes in Uzbekistan, China, India, and Pakistan - it is
the only effective detterent to the US and friends." -ORO

High regards, J.

testing indeed

CoBra. . .This morning's report retells an old position now finding some credibility thanks to Newmont's typically Western forthrightness. Since they sit on a good portion of the new South Africa as you have so tellingly asserted, perhaps they can afford to be honest. (I hope I haven't broken a confidence there.) This bullion bank thing is a passing phenomena in the history of gold and gold mining -- the gold in the Carlin belt will be there no matter what positions the bullion banks talk the mining companies into assuming. It would be good for all of us in this industry from top to bottom to keep that in mind. And perhaps we should reassert that "he owns the gold makes the rules", not "he who owns the paper representing that gold." Pay off the paper and get rid of the bullion bankers, they are an impediment to personal and corporate success -- not to speak of the industry.

Shifty. . .Today was one of those days for which the Ponzi report was designed, yes?

ORO. . .Nukes didn't cut if for Russia. I would develop the casinos and beachfront property before I developed the nukes. More money it. More power.

nummus aureus. . .Spoken as a man hardened by the fires of experience. Please post more often. I am a reader.

Beesting. . .Why did Smith Barney (Leann Baker in charge) downgrade Placer???? I would like to know!

Crude oil, natural gas, unleaded gas and heating oil all up very strong at this hour.

Thanks for that link to the Senholz piece.

Trading is so thin right now a stiff breeze could knock the price back a couple of bucks. Even considering the BOE sales (on behalf of all the Irishman who have been persecuted for many centuries, thank you Brittania) we saw the same basic weak patterns last summer at this time. Q4 is a much better season for gold. Hang in there.

Being a minimalist in all things, especially government, I can very much appreciate your point of view. However, some government is desirable and in fact necessary. Where and when did we begin get off on the wrong track? What solutions do you propose? Do we have Hamilton's legacy still to blame? I've read your comments about Lincoln. I must candidly say I find them to be a little hard to swallow. Many thanks always.........CM

http://www.fgmr.com/response.htmFrom above link;

'My conclusion in the last letter was: "It would appear that the Gold Reserve is intact, safely stored in Fort Knox and the other storage sites."'

This is a pre-recorded message from Bonedaddy..... ... please stay on the line. Until there is a political action committee for GOLD that has as much stroke as the NRA, I'm a single source donor to political causes. I am giving more in "campaign type" contributions than ever this year. But, it's all going to the NRA Institue for Legislative Action! When the Republicans call I'll tell them I'm already doing my part for the Bush\Cheney ticket.
THROUGH THE NRA! Choke on it HILLARY! This is a great way to contribute to the political process and make sure the money is fighting the liberals.

FREEDOM......get you some!

http://biz.yahoo.com/c/20000801/d.html?pdgDown Grade was from "buy" to "Outperform"!
No reason for downgrade released, but I would guess it has something to do with the new accounting procedures, that recently went into affect.
Stay tuned, Homestake just released their quarterly report showing a loss. Will post ASAP....beesting.

Pt just broke the $602.00/oz level as shorts are getting absolutely crushed! Pd is up yet another $8.00 at $840.00 as the short squeeze exterminates the short cockroaches and the TOCOM finds itself powerless to stop this juggernaut! The big rumor today is that auto manufacturers are seriously drawn down on the PGM metals and may have to compensate for the rising PGM prices. Hmmmmm...., raise the price of autos maybe? Thats OK, the CPI core rate will suddenly strip out any increases here. Gotta screw the Social Security recipients out of their COLA increases somehow. Meanwhile, the other PMs are languishing. It shouldn't be long before they too rise in sympathy or at least as a result of the "phantom" inflation.

On an ionteresting note, the "Individual Investor" magazine reports that many more businesses are using loans to fund employee stock options and to repurchase shares, hoping to prop up share prices. This is just another abuse of accounting practices by large corporations. In the last three years, large corporations added more than $1 trillion (that's with a "T") in debt and bought back more than $525 billion in their own stock. IBM is one of the worst offenders, spending $32 billion in the last 5 years! All to repurchase 770 million shares. However, earnings have amopunted to only $31.1 billion and debt has increased to $28.1 billion from $21.6 billion! This kind of leveraging has gone unnoticed by most investors. Yet again the analysts haven't been paying attention. (Thank God I bailed at $132/share!). This is terrible! The interest on this debt must be paid out of operating income, and we are about to see some investors get caught "Flat-Footed". If the FED is successful in slowing the economy, then look out below, because many investors (sleepers) will awken to financial ruin. OK, so much for my diatribe.

Netking msg. 34337. DITTO! These 20 something analysts will learn their lesson when they have their "trail by fire" come the next recession!

Beesting msg. 34339. Placer Dome, it isn't really a bad company considering all the upheaval. At least they have committed to a policy of no more hedging. The "analysts" (Here I go again!), don't see the big-picture as usual. Yes, Las Cristinas is written off. No surprise there. The analysts, however, are disappointed that Getchell won't go into production right away. What they don't seem to realize is that this deposit is "Humongus(sp)" it is huge! In other words, everytime that they put down a drill hole in order to define the ore deposit, they seem to either extend the size of the deposit, or find a new ore zone! I think that's a pretty good problem top have. Obviously, they are about to dive into production until the deposit is defined and the ore extracted in the most efficient and profitable manner as is possible. But these 20-something rocket scientists aren't as brilliant as some think. It is trully amazing what an undergraduate liberal arts degree will produce these days!

OOPS!I wrote: Obviously, they are about to dive into production until the deposit is defined and the ore extracted in the most efficient and profitable manner as is possible. Should read: Obviously, they are NOT about to dive into production until the deposit is defined and the ore extracted in the most efficient and profitable manner as is possible.

http://biz.yahoo.com/cnw/000801/ca_homesta.htmlHomestake began Goldmining operations over 120 years ago and is one of the oldest companies listed on the New York Stock Exchange.
Get the full quarterly report by clicking above URL....beesting.

I agree, expect that I'm glad that the US preserved my access to a steady Nutmeg supply from Grenada! Glad that it safe, whew, I was really worried about that ;-) BTW, whole Nutmeg is and can be used as a hallucinogenic drug! Maybe there is a drug war link in there somewhere.

I received this tonight from Bill Murphy !

$hifty

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$


Le Metropole Members,


"Oil futures set to rocket higher"
"API data on crude stocks drawdown called 'shocking'"

NEW YORK (CBS.MW) -- Crude futures shot up 40 points
in overnight trading after the American Petroleum
Institute reported that oil stocks fell 9 million
barrels in the latest week.

"This almost seems too unbelievable to be true," said
Phil Flynn, senior markets analyst at Alaron Trading.
In comparison, he noted, the market expected stocks
to build by 300,000 to 700,000 barrels. "Where did
the crude go?"

Flynn said that if the Energy Department confirms
the number Wednesday, crude would take a rocket ride.

"If this number is correct, this will shake the
market to its rafters," he said. "I would say that,
overall, the crude-oil-stock drop will overshadow
the entire complex. If the DOE confirms a sizable
drop, a lot of people will need to re-evaluate
this market." ....................



Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

PGMs Continue to FLY!

Updated 9:29 AM ET August 1, 2000
By Samantha Shields
LONDON, Aug 1 (Reuters) - Platinum metals pushed ever higher on a dearth of Russian metal on Tuesday afternoon in Europe, traders said. "The moral of the story is that there's absolutely nothing for sale at the moment...$1,000 for palladium could be 24 hours away," a dealer in London said. Palladium fixed at a record $842.00 a troy ounce in London, its fourth successive high since Monday morning, while platinum found a fix at a fresh 11-year peak at $592.00. Platinum was seen aiming for $600, a level it last overcame in December 1988. LEAD FROM JAPAN Dealers said the rallies in the metals, both used in the production of autocatalysts to clean car exhaust fumes, might become self-perpetuating as Europe played follow-the-leader with the key Japanese market. "TOCOM has ended limit up for the past two days, and that will happen again tomorrow, Europe's coming in every day to fresh impetus," another dealer said. TOCOM said on Tuesday it would widen the daily price limit on palladium futures for delivery next year to 120 yen/gram on Wednesday from the current 80 yen. Dealers and analysts said volatility had been exacerbated by thin summer trading, but that the root cause of the rally remained Russian export activity. "While Russia indicated in June that it wanted to resume negotiations on term deals for 2000, Japanese traders report that progress has been painfully slow," Lawrence Eagles at brokers GNI said in his August review. The main complaint, he added, was that Russia's sole export agency, Almazjuvelirexport, was asking too high a price for the metal. "In the meantime Russian spot sales have been virtually non-existent, implying that they are prepared to back up their negotiations by tightening the physical market," Eagles said. Russia produces around two thirds of the world's palladium and a third of its platinum. Japan is the world's biggest importer of the metals, using them to make electical components and jewellery as well as autocatalysts. ((Samantha Shields, London Newsroom, +44 (0)20 7542 8071, fax +44 (0)20 7542 8077, london.commodities.desk+reuters.com))

Black Blade: The part about the Japanese calling the Russians approach to negotiations as painfully slow. Somehow a saying comes to mind: "The pot calling the Kettle black". Wake up and smell the manure! The Russkies don't got it! In the rush for hard currency over the last few years, they depleted their stockpiles. The miners aren't all that productive when they aren't paid on a regular basis, and Norilsk in a notoriously inefficient production facility! PGMs gotta go up yet again. How soon will Gold and Silver follow? Who knows, but then that is also a manipulation story.

That's true! Did you know that NG storage is at only 45% of levels this time last year? I have bought into a some NG plays because NG is in EXTREME short supply, and NG power generation plants are the wave of the future. Not to mention that EPA guidelines and Carbon-credits favor NG over other sources. Also GE has a 3 year backlog of power turbanes. Of course, (Here I go again!) analysts were once again late to this party. They are just starting to reach concensus on NG, so maybe the top is already close at hand. At least these monkeys haven't jumped on PMs yet. Amazing that they haven't jumped on PGMs yet, so there has to be some significant upside.

Source: CBS.MarketWatch.comAPI data on crude stocks drawdown called �shocking'
By Lisa Sanders, CBS.MarketWatch.com
Last Update: 5:56 PM ET Aug 1, 2000 NewsWatch Latest headlines
NEW YORK (CBS.MW) -- Crude futures shot up 40 points in overnight trading after the American Petroleum Institute reported that oil stocks fell 9 million barrels in the latest week. "This almost seems too unbelievable to be true," said Phil Flynn, senior markets analyst at Alaron Trading. In comparison, he noted, the market expected stocks to build by 300,000 to 700,000 barrels. "Where did the crude go?" Flynn said that if the Energy Department confirms the number Wednesday, crude would take a rocket ride. "If this number is correct, this will shake the market to its rafters," he said. "I would say that, overall, the crude-oil-stock drop will overshadow the entire complex. If the DOE confirms a sizable drop, a lot of people will need to re-evaluate this market." On the products side, the API reported that distillate stocks rose by 1 million barrels vs. the expectation of a decline of 200,000 to 500,000 barrels. "It's bearish on the heating-oil side, but not wildly bearish because distillate stocks should build in August to get prepared for winter," Flynn said. Meanwhile, the API said that gasoline stocks decreased by 1 million barrels, which compares with the expected 200,000 to 500,000 barrels lower.
"A bullish number, but not as wildly bullish as the crude," Flynn said. Implied demand, which was unusually low last week, rose to 8.91 million barrels from 8.13 million barrels a day. Crude futures, which rose by 36 cents to settle at $27.79 a barrel on the New York Mercantile Exchange, advanced to $28.22 in overnight dealings. September heating oil, which added 1.19 cents to settle at 76.84, gained 101 points, while September unleaded gasoline, which added 2.34 cents to settle at 87.21, rose by 174 points. On Monday, crude-oil prices fell after OPEC President Ali Rodriguez was quoted as saying production in July was 700,000 bpd above the new supply ceiling In the equities markets, the Oil Service Index (OSX: news, msgs) added 3.40 to close at 118.32, while the CBOE Oil Index (OIX: news, msgs) dropped 0.48 to close at 282.53.

Natural gas rallies
September natural gas rallied to settle at $3.987 per million British thermal unit, an increase of 5.6 percent, after reaching an intra-day trading high of $4.030. It was the first time for the price to drive higher than $4.000 since July 19. Driving the rally was the tropical storm gaining ground in the Gulf of Mexico, along with warmer weather in the American Midwest, signaling the possibility of a return to typical summer weather and air-conditioning use, Flynn said. Flynn said that Wednesday's American Gas Association storage report on natural-gas supplies would be closely watched.

Palladium, platinum set highs
September palladium hit new all-time highs in Tuesday's session, spurred by demand and continuing concerns over the supply situation in Russia. September palladium gained $23.05 to settle at $842 after reaching $848 an ounce in intraday trading. Both the high trade and the settled price took out the contract highs achieved Monday of $828 intraday and $818.95 settled, said Dave Meger, senior metals analyst at Alaron Trading. October platinum followed suit, climbing $12.30 to settle at $591.90 after reaching $593 an ounce earlier in the session. Both the settled and the high trade prices are new contract highs, Meger said. For platinum, it's a "combination of tight supply and very strong demand from the auto sector and the upcoming stockpiling for jewelry demand going into the end of the year," Meger said. Meanwhile, August gold headed higher Tuesday, while silver moved lower in early trading. On the Commodities Exchange division of the New York Mercantile Exchange, gold added 10 cents to settle at $276.90. Silver lost 0.01 cent to settle at $5.028. "We've been in the same trading range for what seems like months," said Phil Flynn, senior markets analysts at Alaron. "We need some dramatic move to break us out. The last big rally on silver was when word was leaking out that Warren Buffett was buying a year ago."

Black Blade: Anyone reading the "Morning Wakeup Call" already knows this. 1) Petroleum refiners don't want to hold oil in reserve and pay an inventory tax. They operate on thin margins. Add to that any decline in the price of oil and they are in a world of hurt. 2) NG storage is only at 45% of last year's levels. And; 3) The Russians don't have it, won't and can't deliver it, and the Japanese are fools for believing that they can deliver it.

http://www.canbus.com/magazine_items/2000/july10_00_nogas.shtml Read article linked above, i can Vouch for the authenticity since i live in Calgary and work in the Oil patch. I know of some of these guys in the industry.
GOLD IS GOING TO BOOOOOOOOMMMMMMMMM!!!!!! and very soon.

G.T

I'm hoping I didn't miss the rapture, as I look around these halls I see no posts from today, 8-1-00.

Just my lonely little old post from 7-31.

Is there anybody in here? (deafening silence)

Test, test, (echoes)

Thanks beesting/Netking for your efforts on the bi-metallic currency, I'm aware 7 Dinars weighs the same as 10 Dirhams but it seems the Islamic Trading Org doesn't nominate a Ratio in Value ie: say I buy something costing 2 Dirham and tender a Dinar- how much change do I get?
Therein lies a problem that I'd of thought was fundamental in promotion of this alternative.
Perhaps a nominal exchange rate to begin with and floating in the future, Thoughts anyone?

elevator guy:
No rapture yet mon- unless you squirrelled away some plat/pall paper a while ago a-la THC or BB.

If so feel free to Rapture to your hearts content;-)View Yesterday's Discussion.

I was thinking about investing in NG and also oil drilling.
But all my money is in Gold and Gold mining stocks. I have little cash . Bought a beautiful bracelet for my wife for our anniversary. 21K Gold from Bahrain. The salesman wanted $400. It was on sale!
I paid $100. and a 1 oz gold maple leaf that had a dent on the edge.

$hifty

Elevator Guy,
The trick is to go to the archives by clicking on yesterday's discussion and then, when you're at the day before yesterday, click on today's discussion
The IVH

Now platinum just charged ahead $20.00/oz to blast through $600.00 to $606.00. I would sure hate to be on the "short" end of the stick! Some shorts must have been absolutely crushed this last couple of weeks. Could be a lesson here for Gold and Silver shorts. Meanwhile, Pd is up $8.00 to $840.00/oz. A few privately placed purchases on any available physical will send this PGM market into orbit (forget about the Stratosphere).

SHIFTY: I like the idea that ME and Asian gold jewelry is much higher in purity. I have gold chain and a couple of rings in 24K gold that I got in Hong Kong, It looks so much nicer than garbage gold (18K and less) that has a lot of junk metal in it. Jewelers in the US try to sell the public on garbage gold by telling them that higher grade gold is too soft. Actually, they enjoy high premiums and scalp hefty margins by using a miserly amount of gold in jewelry, so why sell a premium product? Sounds like your woman got herself a thoughtful and considerate man!

Almost forgot. Gold Maples and Australian Nuggets are among my favorites. I think that you can see my theme here with 24K Gold ;-)

Students charged with cashing in on drafting class
By David Pitt, Associated Press, 8/1/2000 19:41

TALLAPOOSA, Ga. (AP) Students made counterfeit money on a computer in their high school drafting class and passed hundreds of dollars in fake bills around town, police said Tuesday. Four Haralson County High School students and an adult friend have been charged with felony forgery in the alleged counterfeit scheme. Police Chief David Godfrey said the suspects made about 200 bills in $1, $5, $10 and $20 denominations on the final days of the school year and distributed about 50 bills at businesses. Godfrey believes as many as 25 bills continue to be in circulation in Tallapoosa, a town of about 2,800 people 50 miles west of Atlanta. A school custodian told police last week that she saw the students making the bills in a computer-aided drafting class. The fake bills were first confirmed with a special pen that when marked on a counterfeit bill shows brown in color. On real currency the pen's marking is invisible, Godfrey said. All five suspects have been released on bond, but two more arrests were expected, Godfrey said. Computers, monitors, keyboards and printers were seized for analysis, and a computer also was taken from the home of suspect Tracy King, 17. Police said images of counterfeit money were also found on his computer. Attempts to reach the suspects for comment Tuesday were unsuccessful. Since the first few bills were discovered, the police department has held a class for business owners on counterfeit identification that has helped confiscate the 25 bills police have in evidence.

Black Blade: These young future Central Bankers were just getting an early start on their education. OK, so there wasn't exactly a measure of Fractional Reserves involved, but hey, give the kids a break ;-)

http://m1.mny.co.za/MGPlat.nsf/Current/4225685F0043D6538025692E0056C3A9?OpenDocumentThe link is to an interesting read on the current PGM short squeeze. Particularly interesting is the section about the Japanese rocket-scientists who misread the market and sold metal that they didn't have. Ya just gotta love these guys, always the eternal optimists!

http://www.mips1.net/MGPlat.nsf/Current/4225685F0043D65342256913003C3FD7?OpenDocumentThis link is to an article for anyone who wishes to see a sample of how analysts completely misread the markets. I love these guys! They are great reverse barometers!

Sources: Bridge News and BloombergTHE EASTERN FRONT:

Asia Precious Metals Review: Yen, Australia dlr move spot gold
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Aug. 2--The movement of the yen and the Australian dollar against the U.S. dollar dominated the spot gold market in Asia on Wednesday, with market sentiment remaining bearish, dealers said. Spot platinum prices extended the overnight's gains in Asia following the limit-ups of the Tokyo Commodity Exchange platinum futures, while spot palladium failed to rise further on the lack of trading interest, they
said.

Black Blade: Of course Pd rose nicely in Europe. Rumor is that a large fund (hedge fund?) bought a large position in physical Pt. We shall see what transpires.

THE RUSSIAN FRONT:

Norilsk Warns of Looming Shortage of Palladium, Platinum
By Eduard Gismatullin

Moscow, Aug. 2 (Bloomberg) -- RAO Norilsk Nickel, the world's top palladium producer, warned of a looming shortage of palladium and platinum at a time of record-high palladium prices because of a lack of shipments from other Russian sources. ``Prices are increasing but there is not enough of the physical metal,'' said Yuri Kotlyar, chairman of Norilsk, which analysts estimate sells about a third of the world's palladium. ``We are the only exporter from Russia now, and we do not have enough metal for the overheated market.'' Palladium prices in London reached a record high for a third day, gaining as much as $24.50, or 3 percent, to $847.50 an ounce. Prices since June have soared by a third as a lack of Russian sales forced traders to compete for available supplies. Kotlyar's comment signals no relief is on the way for buyers in the $5.47 billion market for platinum-group metals. This marks the fourth straight year that sporadic Russian shipments left a shortfall of metals for use in everything from jewelry to catalytic converters, which strip pollution from auto exhausts. Platinum prices also jumped, gaining as much as $26.25 an ounce, or 4.5 percent, to $612 an ounce in London, just $9 below a record reached in July 1988. Prices this year have gained 38 percent. Russia sells about two-thirds of the world's palladium and one-fifth of all platinum. In addition to Norilsk, the Russian government ships the metal from the state precious metals reserve Gokhran and central bank stockpiles. All exports are done by the state monopoly, Almazjuvelirexport. South African producers, the second-largest source of palladium and the largest miner of platinum, said they were largely powerless to refill inventories.

Contracts

``Most of our metal is contracted so there is nothing we can do,'' said Bob Gilmour, a spokesman for Impala Platinum Holdings Ltd., the world's second-biggest platinum producer, in Johannesburg. ``What we produce is what we supply to the market, and that's the same with most other (South African) producers. There's nothing we can do to bring the price down.'' In early June Gokhran said that it will refrain from exporting platinum and palladium this year because the government doesn't need additional revenue because of a budget surplus. Palladium prices had slid to around $618 an ounce from $685 an ounce in the second half of June on a short-term increase in Russian shipments. The metal has gained 33 percent over the past month as such sales dried up, traders and analysts said. Now, Norilsk is likely selling metal directly from the melt shop to the market, traders said. ``Norilsk is shipping hot metal immediately snapped up by the market,'' said Ross Norman, analyst at TheBullionDesk.com. ``These are really hand-to-mouth deliveries. Every spare stock in any company will be sold.'' Russia doubled palladium deliveries to Switzerland to 2.54 metric tons in June from 1.25 tons in May, the Swiss Customs Office said. In the meantime, it slashed platinum shipments to 2.62 tons, down almost two-thirds from 6.97 tons in May. South Africa cut platinum deliveries to Switzerland to 887 kilograms in June from 1.4 tons in May, while palladium shipments, at 128 kilograms, were little changed from 124 kilograms. Still, traders said they don't see a slowdown in South African platinum exports, mainly sent to Japan and the U.S.

$1,000 Palladium?

`Palladium is on a trip to $1,000 an ounce,'' Norman said. ``Platinum will likely stop at $630 because demand from jewelers is elastic. Jewelry demand from China and Japan came to a halt about $150 an ounce ago.'' Norilsk said the lack of the Russia's coordinated policy in the precious metals trade leads to the metals unstable market. The company criticized the lack of any initiative to negotiate a joint marketing strategy. ``The market's high prices are driven by speculative actions,'' Kotlyar said. ``Lots of traders entered the market with the high prices and are now searching for the metal to fulfill their long-term contacts.'' Even with the deficit in supplies, Norilsk has no plan to increase exports, the company said. Norilsk exports part of its precious metals production and accumulates stockpiles. ``We have planned our revenue (for this year) and sell as much as our budget require,'' said Kotlyar. ``We do not want generate hyper-profit, which will be offset with higher taxes.'' Norilsk also warned of possible suspensions to platinum and palladium trading at commodities exchanges, as happened in Japan earlier this year. In February the Tokyo Commodity Exchange, the world's biggest marketplace for palladium futures, fixed palladium prices for April to December contracts, though trading has been allowed in contracts for delivery next year.

Black Blade: Well, well. They finally admit it, We don't have the metal! The buck passing and blame game is just beginng. The excuses are also choice. We have planned our revenue (for this year) and sell as much as our budget require,"' ``We do not want generate hyper-profit, which will be offset with higher taxes.'' But this statement: ``Prices are increasing but there is not enough of the physical metal,'' says it all!!!!!!!

Meanwhile, S&P Futures up +1.90, Fair Value up +1.76, a slight positive for the Wall Street open. Oil up +$0.55 at $28.34/bbl on news of lower than expected oil inventories. Au is up +$0.30 at $277.10, Ag down a penny to $4.96, Pt is very strongly up $18.00 to $604.00 ($612.00 at London AM Fix), and Pd is up +$8.00 at $840.00 ($855.00 London Fix). PGMs should continue to be strong today in light of the Russian admission!

When do you get it. Keep drivin the dollar up and will push crude off the charts.

Give up??? Black and Gold, sounds like the old steel curtain outa Pittsburgh.

Gold knows.

http://www.russiatoday.com/investorinsight/business.php3?id=185193Russian supply seen falling!

http://www.zolatimes.com/V4.31/williamson_russia.htmlI too submit my second for ORO's message to enter the hallowed hall of fame. Just catching up after a week incommunicado as scoutmaster in the woods with young charges.

Oro, your message speaks to what has been happening over the last 25 years and is I believe correctly identified as the source of both moral decay and the transfer of property rights from the people to the government (e.g., the people may own whatever they choose as long as they understand that they themselves are owned by the government and that what belongs to them really belongs to the government).

I could not help but notice how seriously close we are to the situation described by Anne Williamson in her excellant article at the link above. She makes the point that Russia lacks private property and contract sanctity. What has occurred there is a natural progression of trying to impose capitalism from the top down. It results in the slavery of the people to those who would peddle influence. Our own society IS fundamentally different in structure...but has evolved in the same direction. We have been disinherited from our right to change the system because the two/one party system limits the choices we have for change in leadership. The displacement of ownership of government script from the bankers (Fed) to the government (treasury) by indirect means seals the fate of the common man.

Hang on close!!!!!!!!!!!!!!!!!!!!

Norilsk sees PGM sales to Japan starting Sept/Oct
MOSCOW, Aug 2 (Reuters) - Russian metals giant Norilsk Nickel expects this year's sales of platinum group metals to Japanese customers under term contracts to start in September or October, a spokeswoman for first deputy CEO Dmitry Zelenin said on Wednesday.

``The negotiations with Japanese consumers on signing contracts on PGM supplies continue. Everything is going according to plan and we expect the implementation of the contracts to start in September or October,'' she told Reuters.

Palladium was fixed at an all-time high of $855 per ounce and platinum at a 12-year high of $612 per ounce in London earlier on Wednesday, largely driven by the absence of Russian metal from the Japanese market.

Black Blade: "WOLF!, WOLF!"

magic number in dec close again is 284.00

Black Blade

I also am fond of Maple Leaf's and nuggets. I have a few Pandas too.

I first saw the beauty of pure gold jewelry wile looking at some Spanish gold from a ship that sank off the coast ( Florida ) in 1715. Once you see it, its hard to like the 18k and lower grade. But the one thing that the Spanish were fond of was putting an emerald in the middle of the gold. That really sets off the yellow gold.
Mel Fisher has two museums in Florida. I have been to the one in Vero Beach. Worth stopping if you find yourself down here in Florida!

$hifty

8/2/00 Indications
�Current
�Change
Gold December Comex
284.40
+1.20
Silver Sep Comex
5.02
nc
30 Yr TBond Sept CBOT
99~04
+0~05
Dollar Index June NYBOT
110.46
+0.58


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(8/2/00) www.USAGOLD.com Daily Market Report . . .Gold
shrugged off the summertime blues this morning adding $1.20 to the
price as oil rocketed higher responding to reports that national
oil stocks had been drawn down significantly. The European market
remained subdued as it moved into the August vacation season, and
Asian trading was dominated by dollar strength which kept the
yellow range bound. The market is dominated, as has been the case
for several weeks, by physical purchasing on the dips and paper
selling when it rises. Reuters reports the oil market as having
been "stunned" that U.S. crude stocks had fallen a "staggering"
nine million barrels. A typical monthly fluctuation is one to
three million barrels. That's two weeks in a row pundits have been
surprised at the numbers being thrown off by the rocket-ship
economy. Crude is up 71� as we go to fetch this over to the server
and the Dow is acting like there is no connection between these
events and interest rates, and gold appears to be weakening.
Perhaps the consensus opinion on Wall Street is that Alan
Greenspan and the Fed wouldn't dare raise interest rates ramping
up to the November election. They could be wrong. Some might say
that AG owes the Bush family one: George Sr. blamed the 1991
recession for his loss at the polls in 1992 -- a recession brought
on by Greenspan-led Fed tightening. The dollar is having a field
day against the European currencies and the yen. Don't forget we
have unemployment data on Friday though with what's already been
reported what could those numbers bring to the table that we don't
already know. At some point soon, these markets will have to come
to grips with the reality oozing to the surface like so much
mid-East oil -- we are in an inflationary economy and there's no
going back.

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

Please note that we have changed our daily gold pricing from the
August to the December gold contract.

An Invitation:

The August issue of News & Views: Forecasts, Commentary &
Analysis on the Economy and Precious Metals, is now being
edited and will be on the way to the printer shortly. This month's
issue reveals some very interesting statistical information on the
worldwide gold derivative position. Short & Sweet opens this
month as follows:

"Now that gold has successfully navigated the July doldrums,
what do we have to look forward to? How does a price of $2500
per ounce sound? That's the number Leigh Goehring of Prudential
Investments dropped in a Forbes magazine interview in mid-July.
His reasoning echoes themes developed in this newsletter last
month: "I am a raging bull when it comes to gold," he declares.
"In times of inflation, people always end up just gravitating to
it. . . The period where the U.S. economy could expand without
fear of inflation is quickly coming to an end."

For those unfamiliar with our widely circulated newsletter, a few
words of description are in order. It's publication is greatly
anticipated each month as it probably provides the best summary on
gold news and opinion available today. The Short & Sweet format
mentioned above offers gold events in a rapid fire, no-nonsense,
bullet format designed for busy people who want gold related news
and opinion without the unnecessary fluff. Appropriate charts,
tables and graphs are also published to better summarize the
information. We also offer the clever political and financial
cartoons of the award winning Ed Stein of the Rocky Mountain News.
News & Views is a private letter offered free to our current and
prospective clientele.

Along with the latest issue of News & Views, you will receive our
Gold Almanac 2000 which offers fundamental background on the
yellow metal. The theme of this year's Almanac is wealth
preservation and one of the key articles is how those in the
1970s -- a decade many are comparing to the present -- not only
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DISCUSSION FORUM --for round the clock gold news & commentary from
the public

http://www.tfc.com/syndication/MarketMavensReport/Mavens-Gold.html?G=MarketMavensReport&T=Gold%20Market&A=Mavens-Goldincredulous golden journey. I have not said much of late, as have not had much to say. I just watch each day with my mouth slightly wider open than the day before as events unfold. Some observations though:

-- Oil continues to trend higher. So much so that it seems someone or some entity(ies) are holding it back (much like some entity(ies) are holding gold down.

-- Obviously platinum group metals are rallying but this is also confusing as some have postulated that this market will be used (by who knows whom) to take gold higher.

-- But, take today for example, the Duck (NASDAQ) and the Dow are doing well. Yet over the last week or so, they have not. Yet, the DOW seems to want to rise when the Duck goes down, except today, when they both appear to be rising. Except, let's see what happens in the last hour of the day, when the Duck has a hard time holding its own lately.

-- I continue to see gold sentiment is very low, but I see glimmers of hope out there, so it probably won't rally any time soon, especially when the dollar seems to find hidden strenghth out of nowhere. Apparently, this strength comes in part or in whole from our record trade deficit that continues to break monthly records.

Then to top all of this off, I now read the below:

Who Will Buy ? Gold Sales down 97%

Posted Thursday, July 27, 2000 at 09:04 AM EST
By David Marantette

We've been reviewing the six-month coin sales figures provided by the U.S. Mint. The decline in sales of gold coins and platinum coins has been dramatic so far this year. At the same time, sales of silver coins has increased.

In the first six months of this year, U.S. gold coin sales in ounces have fallen from 1,243,000 oz. to 29,000 oz. This is a decline of 1,214,000 oz., or -97.66%.

Platinum coin sales have dropped from 42,100 oz. to 13,700 oz. This is a decline of 28,400 oz., or -67.45%. During these gold and platinum coin sales declines, sales of silver coins have risen from 4,443,000 oz.to 5,139,500 oz. This is a gain of 696,500 oz., or +13.55%.

It seems very strange to us that gold coin sales should decline so steeply. It also seems strange that, at the same time, sales of silver coins should rise.

Some may say that the decline in Gold sales is the result of stockpiling gold coins in advance of the Y2K scare. Remember, computers were supposed to blow up and the world would stop turning. Gold would become the only medium of exchange.

Well, computers didn't blow up, and the world still turns. There has also been a decline in sales of gold coins as people now realize they no longer need gold coins to buy bread. Fewer people buying gold coins? Almost no one! Sales of gold coins peaked in 1999 at 1,243,000 ounces. The Y2K scare was a definite factor, but was it so much so that six months of sales in year 2000 doesn't even equal the smallest one month of 1999?

Have the jewelers stopped jewelering?

The current decline in the sale of gold coins remains a mystery to us.

What is causing the sales of silver coins to increase is also a mystery. Digital cameras, if anything, are causing a decline in the use of Silver in the photographic industry. Is Silver being used in new computers to greater extent? Somewhere else in industry? We don't see it. Buy coins? Who wants silver coins?

The current price of Silver does not reflect an increased use of any percent by industry, or any demand by silver jewelers. The price of Gold, on the other hand, does reflect a general neglect of the metal for almost all purposes.

So who will buy gold coins again, and why? At the moment, no one seems to want them.

Source: David Marantette's Goldstock Letter, July 24, 2000, Published by Troubadour Inc., PO Box 1490, Hanalei, HI 96714, 808-826-6550

*** You know, the cow pucks are getting so high, even the cows can't maneuver anymore.

http://www.abc.net.au/news/business/2000/08/item20000802110452_1.htmWith the Franco Nevada merger still in process, Gold Fields has now acquired an exploration project in Australia: the Crush Creek site in Queensland. Other Australian acquistions were said to be on hold until the merger is finalized.

Makes a guy believe that they must see a bright future for the yellow metal. We certainly do.

from www.cnnfn.com:


U.S. new home sales fall
11:01 a ET
In another sign of the slowing U.S. economy, new home sales plunged 3.7 percent in June to their lowest level in more than two years.

breaks 5990 and closes over it could be start for dollar dumping.

I would not post anything from David Marantette
He is the biggest LOSER in the market. Just when
things get started he ALWAYS trades OUT! He touts
a big success record which is questionable, vary
questionable. He tried a FUND but was made to QUIT
by the gument officials, THEY cought up with HIM.

http://biz.yahoo.com/rf/000802/l02438522.htmlDeutsche Bank's fund management division will this Autumn be launching its first hedge fund to be managed in London, though it will be domiciled in the Cayman Islands. The fund will apparently not be leveraged, will "operate with a market neutral long-short mandate" and head of Deutsche Asset Management's London quantitative group Shaun Coleman said, "There is a greater willingness to consider these sort of alternative investment strategies, and that's what we are relying on."

How about the Clinton administration and the "plunge protecting team" coordinate a failure to save move with the clear nomination of the Republican Team and then as the market brings the 401K lemmings out of their holes squeeling from their heavy financal losses, the Democrats tap Robert Rubin to be the Vice Presidentaly running mate with Mr."I don't really have a clue" Gore.

Daily charts of swiss franc and gold, sep and dec contracts,

check out lows on the 19th of july in both, then todays price action.

golds outside day and if, if we stay at these levels, we could gap higher tomorrow. Too early to tell but worth watching, close in dec at 284, positive, 285 very bullish.

sep franc at 5990 close is strong.

http://www.SelectSectors.com/agpm70.gif
FSAGX moving Up

Down from this morning signficantly. Might actually have trouble staying in the black, eh?

http://www.militia-watchdog.org/suss1.htmThis link is to a site showing all the different arguments and court cases involving people claiming Federal Reserve Notes weren't legal tender, wouldn't pay taxes because they weren't payed in gold. It's very interesting but takes a lot of time to go through all the info.

Got Gold..Gettin' More

Beowulf

Hey Aristotle - thanks for the response. And thanks for fixing the typo. I never know if I should fix the stuff I quote. What is the consensus anyway?

I don't find Hein's message bleak. He seems to be the voice of reason as far as I'm concerned. Many seem to believe that sound money will somehow be the end of the world. I disagree, sound money will be the people's salvation. It may be the end of the world for the bankers however.

"Economics is a daunting subject, but a few basic truths remain obvious, even if ignored: if you
use fiat created by a privileged class, you are the slave of that class. When you exchange your
production for their imaginary "money," you finance your own enslavement. Money, being the
life blood of society, must be sound if the body politic is to be sound. When it is corrupt, society
sickens. We see corruption in art, literature, education, journalism, medicine, and especially,
the law. Our roads and bridges are deteriorating, our national security is diminished, our
economy is poised on the brink of disaster, and we seem headed for a one-world tyranny. Just
an unfortunate series of events? Hardly, but such a series of catastrophes could not come about
unless the conspirators possessed one essential advantage: the control of the printing press to
churn out what the people accept as "money." Given that, there is nothing, and no one, that
they cannot buy or control. Economics, insofar as it ignores the nature of "money" and its
consequences, is an irrelevant diversion and distraction." - Paul Hein

Aristotle, I hope the control of money returns to the free market. You may believe this is now beyond the realm of possibility, but I do not. This 'free-gold' concept may be where we are headed temporarily but I don't believe it will fix the real problem. I'm with Hein - "Given that, there is nothing, and no one, that they cannot buy or control". There is no freedom for any of us without control of our money.

Control - get some!

There is growing concern regarding the merger of the two
exchanges (London/Frankfurt, located in London under UK
jurisdiction):

German companies would have to report and account under
German AND UK regulations. Because of the massive costs
this would encourage or even force German companies to
move their headquarters to London with the effect of
layoffs of thousands of highly qualified jobs.

Also it is mentioned that the involved stocks would NOT
be traded in Euros BUT IN DOLLARS ( at least companies
ARE ALREADY told by exchange officials that they can
choose in which currency they want their stock to be traded,
which in the end means the same: 'due to unforeseeable
technical reason only dollar quotation is possible')

Therefore,
-raise of capital through IPO's or secondaries would take
place in Dollars.
-due to the involvement of NASDAQ, the German New Market
which is supposed to remain in Frankfurt but being managed
in London, would finally also be absorbed from London
and be quoted in Dollars.
-there would arise a natural need for the other big
companies in Euroland(in France, Italy etc.)to be quoted
in London -in dollars- as well.

The implications, particularly for the EURO and the complete
EURO-Zone, could be devastating, while for the dollar it
would mean a new use as settlement currency whith the
additional need of hundreds of billions of dollars.

A guest to an Investment Congress in Moscow told me that
high ranked officials of US Investment Banks have already
celebrated the elimination of their main competitor thanks
to their(US) promotion of this development.

Could it be that Mr. Seifert (President of Deutsche Boerse)
turns out to be the troyanian horse for the EURO?

Wouldn't it mean a further transition INTO rather than FROM
a dollar world, as Sir FOA describes it?

The dollar ruling the world forever? Implications for gold??

Sirs Aristotle, ORO, CB2 (Gruess Gott, Herr Nachbar!)
MK,TC, all: any insights here? Comments?

Sir FOA: Due to your a.m. message you have been involved
in the process of creating this new exchange. If you read
this, may I please ask you as well for a comment after your return?
I really need some guidance here. As a 'Eurolander',
I'm deeply concerned not only because of the implications
this all might have on the dollar-euro-gold relationship,
but also for EUROPE's further development and future at all.


Thank you very much all


P.S. I'd like to second Lady Leigh's personal nomination
for the HOF by MK. Her honesty and kindness of heart
make this forum even more unique.

http://www.crbindex.com/CRB Index showing gold price ( LAST ) $283.00

I just got in so I dont know if this is true!

$hifty

Sure dives like a DUCK too.
Negative reversal me thinks.
<;-)

Trail Guide (5/24/2000; 7:33:47MT - usagold.com msg#: 31148)
"...I've been closely following (involved) the progress of the new iX pan European market. What a convoluted thing this is turning into. It still looks good and will ultimately transform the world stock trading arenas. Especially in that it will further along London's move into the Euro Zone sphere.
"We follow this very closely because once this Britain Euro link passes the (mental / political) half way mark of no return, it will also start a frenzied rush away from dollar based gold trading. Actually it will only make clear to many what has been in progress for some time. Stranding anyone, including governments, power brokers and the like into holding depreciating gold paper. This is all part of an extremely broad based transition from a dollar world. So, this is where my energy has been focused these many weeks." FOA




To save valuable research time I have looked up and post here, the relevant FOA post that BH (msg#: 34403) refers to above.

BH: Would you be so kind as to post a URL for those wishing to look further into your provocative subject matter?

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

Release Date: August 1, 2000

Rates for Monday, July 31, 2000

Federal funds 6.64


Treasury constant maturities:
3-month 6.27
10-year 6.04
20-year 6.13
30-year 5.79

upside-down spread FF vs long bond = (0.85%)

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

Release Date: August 2, 2000

Rates for Tuesday, August 1, 2000

Federal funds 6.51


Treasury constant maturities:
3-month 6.25
10-year 6.00
20-year 6.09
30-year 5.74

upside-down spread FF vs long bond = (0.77%)

YES, Shifty that is correct for the Dec PAPER contract on the COMEX ! That is up $0.2 from the close of NY trading which was hit hard by massive paper sales.
IF you want real SPOT the Dog quotes, try
http://www.forextrading.com/forexartists/page1.htm
add GLD= to the top left square and hit return to see the long term chart and then hit the request botton to see the streaming quotes -- now at $277.50 Spot. This is directly in line with another quote board of
http://www.thebulliondesk.com/
Good luck!
<;-)

I got it! I put in favorites this time.

I thank you.

$hifty
:)

PH in LA

In no way my message was intended to be 'provocative'
or offensive.

It mainly reflects an article in the German magazin 'Effekten-Spiegel' and comments in some (not much yet)
other newspapers and more so my personal concerns. But
to my best knowledge, many details -i.e. currency-
are not definitively fixed yet. And in an Interview with
the 'Frankfurter Allgemeine Zeitung' of May 24th, Mr.
Seifert stated there would be no 'legal garanty' for
the Neue Markt to remain in Frankfurt.

I'll try to find some URL's for you in english, but as
far as I know there aren't many who allow acces to their
articles.

Thank you for the insight. FOA has many times talked about "political will" in the context of how determined many are to leave the dollar world. Having read much about the subject, I can certainly understand why there might be "political will". To me, it makes perfectly good sense. Looking out for many months now upon the various markets, it is certainly hard for me to see any "political will".

Looming inflation and the US asset bubbles are still the best reason to own gold for wealth protection and perhaps for a modest profit. "Tis a provocative subject. Thanks!

Thank you all for the unbelievable compliment you have given me! I don't know how the HOF concept would work, and if you decide not to do it after all (because our conversations mingle and feed off each other, and it is our web of friendship that makes up the Forum's success), I'll understand. It is a pleasure to have every one of you as friends! I spend a lot of time thinking about you and eagerly reading each new post, and of course have formed mental pictures of everyone. Thank you, USAGOLD -- you have offered a priceless gift to goldhearts all over the world, free for the taking, and you have enriched our lives beyond measure.

So please don't bother to bear with me, as I just (old & great lady feels unjust?-maybe she's got a point!) got back to skim the forum.
MK - Classics never, ever hurt - no prob - ever - though tku for the kind consideration in terms of NV as new SA - where the geological parenthood belongs to a Dr. Ralph Roberts, formerly of the USGS ... just by chance! - and I may be totally wrong - though it was RR bringing NEM to listen ... and the rest is history - NEM # 1 to .... plant - only spoiled by Barrick's pledge (spelled:plague) to better, or beggar their neighbor on Carlin - won't stop the development of new SA in NV.

@ BH - wellcome & Gruess Gott Nachbar - mehr spaeter (frueher) -cb2

I am looking very close at International economic events as they unfold.

BUT, looking as hard as I might,it is difficult to "SEE".

An update from FOA, would sure be welcome.

We need some "inside" information.

As you're looking for "inside" information, I can only say please look for "insight" - Sounds snide? Is wise ... cb2

PS: Lady Leigh - a special HoF to do you justice! ...
reread (some) Daphne du Maurier -

Sometimes following my own insights have got me rather lost in the forest. ! :-).

CoBra, I read the book you mentioned ("Rebecca"), and it's terrifying! I first read it at age 15 at my great-aunt's house. It was storming that night, and a picture of her deceased husband was looking down at me. It was a let-down to discover beautiful Rebecca's true character at the end of the book! But it was a fun read; I couldn't put the book down, and I've read it several times since.

It's late where you are! Better get some sleep, and we'll look for some posts from you tomorrow.

Do teens nowadays read old-fashioned books like "Rebecca" anymore? Books set in places they've never been, in previous time periods? I don't know a lot of teens, but the few I know would scarcely be able to sound out the words in such novels, much less understand them, much less have the desire to read such things. Today in WorldNetDaily there's an article about how someone in Germany wants to ban the Bible. If that person would just wait a generation or so he would find that almost no one has good enough reading skills to understand it.

Hi Leigh you wrote; "Today in WorldNetDaily...someone in Germany wants to ban the Bible. If that person would just wait a generation or so he would find that almost no one has good enough reading skills to understand it." > How can they ban the "Manufacturers Handbook"!, �.in any case given that scenario, "The Manufacturer" would still be around, right!

BH:

Please forgive my inaccurate use of the English language. I didn't mean to imply that your post was in any way offensive or "provocative"... a better word would have been "interesting".

And please do give us any additional info in the form of URLs that you run accross (yes, in English, if possible!)

It's true! Apparently the Bible is too gruesome and judgemental and bloodthirsty for today's peaceful world. It may soon be on the "not for children" list unless the "human-rights violating" passages are removed.

Let's see how it holds up, said reversal in dec gold was made on 7-31.

shows nov beans reversed up also on 7-31 , totally confirmed today.

We shall see.

AngloGold Ltd Chief Executive Bobby Godsell said recently that a wave of consolidation would leave between three and five dominant players in the world gold mining industry.
Godsell said gold companies needed to get bigger, with at least $10 billion in market capitalisation, to attract major
investors.

Godsell said; "The return record of the gold industry in the past two-and-a-half decades has not been great. If we are to maintain and expand investor interest in this segment...I would expect the gold industry to consolidate to three to five large companies that are globally active".

If that did not happen, Godsell said it was possible that gold would disappear as an investment category. "That is quite possible. People don't really think about the silver industry as an automatic call for portfolio diversification," he added.

At the start of this year there were 12 companies producing more than one million ounces of gold annually. AngloGold is the world's largest gold producer with forecast output of seven million ounces this year.

"If there are to be three to five globally competitive, globally sized companies. I'm anxious that AngloGold be one of them," Godsell said.

On the Forex site what do you set the Time at?

$hifty
:)

Lots of volume today. 90,900! I wonder why?
The share price did not change.

$hifty
:)

trying to express one's thoughts in the futile effort to type - even hoping to get most of the spelling (-forget vernacular) half-way right - it does never compensate for verbal nuances - so this is for Lady Leigh - re-read "Rebecca" did not mean you should (as in an order)- only phonetically I've RE;RED same (not me! Though I! ... am (are?) to blame!) again.
... and when tomorrow comes ... and the forests (Hi Hat) consist of trees and the 'bucks' are green with grease of monetary ease - it's time to release the truth of the lease - of our gold - cb's! ... reluctantly -cb2

Severe t-storms up to 60K feet in my line of flight tonight...back on ground.....Tokyo down 385 and change.

Equity markets are wobbly.

Just today I received a promotional flyer from an analyst named Rebecca Nolan. She writes a financial newsletter out of Hong Kong. Apparently, the promo piece states that she has caught all of the major downturns in the stock market going back to 1987. She even called the top in the Dow, S&P and Nasdaq this past March. Now she is calling for a horrendous bear market to begin in mid August just in time for the election! Could this have anything to do with Dr. Quackspan raising interest rates once again in response to a robust GDP of 5.2% and the onward and upward march of oil prices? Just yesterday the API reported crude inventories dropped an astonishing 9 million barrels while private industry watchers were forecasting a rise of 700,000 barrels. Question: Who is stockpiling the oil and why? Is there an imminent conflagration brewing in the Middle East between Jews and Arabs over Jerusalem? Perhaps a re-run of the 1973 Arab oil embargo?

Anyway, analyst Steve Puetz joins Rebecca Nolan in calling for the stock markets to turn down with a vengeance on or about August 8-10th. This will be the third "killer" wave in terms of Elliott Wave analysis. Analyst Charles Planck is on record for the third wave to have started at the most recent peak registered on July 19-20th, from which the Nasdaq has lost about 500 points! A personal friend now retired who used to be my stockbroker (when I lived in Chicago) told me on the phone yesterday that he sold all of his holdings back in late February and now expects the hot air to come rushing out of the Nasdaq with the result that it will drop below 2,000 and maybe even see 1,000. Wouldn't that be a surprise! Amazon.bomb and Dr. Poop are just some of the companies to watch wither away. Just imagine what kind of dent that would put in the earnings of the IPO makers such as Goldman Sachs, Merrill Lynch, Salomon Smith Barney et al. Last year Goldman Sachs reported that it did business which topped $1 trillion. Top partners made about $1 billion each on salary and stock. So any stock market downturn will certainly kill this golden goose.

As the stocks drop, we should see the ripple effect in foreigners selling their holdings and then repatriating their proceeds, which means selling U.S. Dollars and buying foreign currencies. This will be the spark to ignite the gold rally which I have been telling my clients to expect before the election to be followed by an even bigger rally after the election into 2001 and here's why.

There is another piece of bad news for stock investors and it is about to hit full force in January 2001. Apparently, the Treasury Department and IRS have launched an initiative, under revised section 1441 and 1442 of the Internal Revenue Code, to drive home taxes from U.S. taxpayers' international investments. The following is excerpted from "Mountain Vision" newsletter (3rd quarter 2000)--courtesy of one of Centennial's clients (initials "DR")--which is published by BFI Consulting AG in Switzerland. Its website is: www.bfi-consulting.com. "Revised regulations under section 1441 and 1442 of the U.S. Internal Revenue Code will take effect in January of 2001. These regulations set out the steps that must be taken in order for such income to be eligible for any reduction or exemption of the 30% U.S. withholding tax applicable to non-U.S. persons. . .

"Banks around the world in jurisdictions with bank secrecy laws will need to force their clients to formally agree to divulge their identity to U.S. authorities via a W-8-BEN form if they want to invest (or stay invested) in U.S. securities. In case clients do not agree, they have to exclude U.S. securities from their portfolio. THIS ALSO ENTAILS THAT U.S. CLIENTS WILL BE FORCED TO LIQUIDATE ALL PRESENT HOLDINGS OF U.S. SECURITIES IN OFFSHORE PORTFOLIOS BY THE END OF 2000 IN ORDER TO AVOID A 31% PENALTY ON ALL PROCEEDS (NOT JUST CAPITAL GAINS ON INCOME) DERIVING FROM THE SALE OR REDEMPTION OF U.S. SECURITIES AFTER JANUARY 1ST, 2000." (Emphasis added.)

In any case, this legislation cannot be good news for a falling stock market. Watch the talking heads on CNBC to jump on this as the reason for the crash of the stock market. All in all, this bad news for stocks means really good news for gold investors. Our day of vindication is close at hand. To all of my clients here at Centennial who have posed that age-old question of when will gold rally, the above quote may just hold the answer. Add this reason to the other compelling reasons (phoney CPI numbers, rising oil prices, rising interest rates, falling stock earnings and thus falling stock prices, Dow/gold ratio out of balance, gold/oil ratio out of balance, gold/platinum ratio out of balance, skyrocketing palladium price to record $860/oz., and 29-year gold cycle by Chris Carolan of Calendar Research) and this all adds up to the most amazing confluence of bullish events for gold since the mid 1970s.

Silly!, You set the time box for any time you wish ! <;-)
From the "next tick chart" being the "1 Min" and hit the Request button. All the way up to a five year chart with the "Weekly" time button. Try them all and have yourself a chart show !!
<;-)View Yesterday's Discussion.

Some of Aragorn III's lightning is playing about in the ol'e ball tonight. The Hobbits had looked at all the DUCK charts and hit the "Summation and Prognostication" button, when the Crystal Ball went into "SUPREME FIREWORKS" mode. Maybe the tide is turning in favor of the Goldhearts ?
<;-)

I was not sure if the time had to do with when it would update or if I would be able to even see an update if I was to stretch out the time line.

OK I get it.

$hifty
:)

Good to see you exercising fingers and mind again Steve.

Japan Nikkei 225 2:00AM 15814.44 -391.75 -2.42%

$hifty
:)

http://www.uk-wire.com/articles/200008030700499094O.htmlGold Fields Ld
3 August 2000


GOLD FIELDS REPORTS SUBSTANTIAL IMPROVEMENT IN EARNINGS OVER PREVIOUS QUARTER

$hifty
:)

Sir Markettalk; Interesting predictions by Ms Nolan & others, the proof will be as they say "in the eating". Some of us here will watch these dates mentioned in the short term with interest. Analysts!

Last major breakout in dec gold was 5-31 to 6-2.

Now we are back @ the point where the train left the station, 282, final spike down or are we gonna take out 285 then 289 then 291 then 298?

I'll settle for 298 today.

Source: Business DayAnalysts say palladium's upward trend to continue

Price increases blamed on uncertainty of Russian metal availability PALLADIUM prices continued their upward movement yesterday, fixing at a record high of $855 in London, from Tuesday's $835. In New York platinum ended at $611,00, $22 dollar higher than Tuesday's close. Analysts predict the trend to continue, saying prices of between 1000/oz and $1200/oz are realistic in the next few months, although it is difficult to predict the peaks. Analysts blame the successive price increases on uncertainty over the availability of Russian palladium supplies and the costs of borrowing. "Since Russia is able to derive increased revenue from its oil, as the price of crude has risen, they feel little pressure to sell more palladium." Oil was 2,41% higher at $28,46 a barrel yesterday. Metal analysts say there is talk of Russia freeing some of its supply in September, which would increase liquidity and ease the prices. The share prices of SA platinum producers rallied as platinum prices went through the roof this week, fixing at $588/oz in London yesterday. Anglo American Platinum's (Amplats's) share price rose 6,48% yesterday, closing at R227. Impala Platinum's (Implats's) share price also jumped 4,76% to close at R286. Analysts say while higher prices are good in the short term, they may be problematic in the long term. "Higher prices are a demand deterrent," said one dealer. Some disagree, saying availability, not price, is the driving factor behind demand. There is concern that high prices could spur demand for substitutes in the motor catalyst industry and damage the jewellery trade. Ross Norman of TheBullionDesk.com said if platinum prices continued to increase, the jewellery market could "switch off" in Japan. Local analysts disagree, saying jewellery demand is more a function of the economic health of countries like Japan, not only of spot prices. Talk that Amplats and Implats are unable to boost shipments in the short term has led to further fears of shortages. Amplats says it will increase its capacity 75% over six years, but there is a lead time before this feeds into the supply chain. Norman says if the platinum price rises to the $633/oz resistance level (last reached in August 1987), it could encourage long-positioned Japanese investors to take profit. The spot price has already risen from $470/oz to $612/oz in just more than three months, so there may be a chance of this happening soon.

Black Blade: Well now, in Lemming-like fashion the so-called analysts are late to the party. I may relax my position on PGMs for now while these clowns try to horn in on every ones fun. Long-term, PGMs still look good from a fundamental standpoint. BTW, Pt id down -$18.00 at $580.00, and Pd down -$21.00 at $825.00, however, this has been a very nice run.

Is this it???? 280.-81 in dec gold. Get it over with, I'm buying so keep selling.

Oil is up +$0.23 at $28.49/bbl and rising on supply concerns. Many (here we go again) analysts from the major investment houses were playing down petroleum over the last couple of weeks. After all, they reason, it is "old economy" and things are different this time, there is a "new economy" where petroleum doesn't matter, it's a new paradigm, trees really do grow to the sky, etc. This weeks' API inventory numbers were down 9 million barrels and the analysts were caught flat-footed once again. They were trotted out in front of the financial media and while tripping over words, they mumbled asinine comments such as "summer vacation is almost over" and other meaningless drivel. What these 20 something financial wizards fresh out-of diapers with under-graduate liberal arts degrees fail to understand is that one must think like an industry insider and look at the big picture. First of all, The Saudis and everyone else can pump oil like there is no tomorrow and it won't matter. The refiners work off of very thin margins. They are not going to fill their tank farms with oil and pay inventory taxes if they don't have to. They would rather operate under "just in time" inventory, especially when there is a threat that the price of oil could drop causing them some serious pain. If they were to buy 1 million barrels at $28.00/bb, and the price drops to $25.00/bbl, then they lost $3 million! With very thin margins, some could be under water. Sorry, it ain't gonna happen! They have been burned before, and they don't relish being burned again. The fundamentals still look good for oil and NG, drillers, and services. Rising prices in petroleum and the lack of NG for power generation will play havoc with the economy, new or old. Locking in some gold now looks like a better deal all the time. At least the analysts still hate it, it is under valued, CB play musical chair shuffling gold amongst themselves (it rarely reaches the markets), demand exceeds supply, and that works for me.

Source: Bridge NewsEngelhard-CLAL exec sees PGM prices rising, prefers stability

New York--Aug. 2--Engelhard-CLAL general manager of metals, Didier Julienne, expects palladium and platinum prices to continue their climb, but he would instead prefer some stability in pricing. He told BridgeNews that current prices of platinum and palladium are "out of control" and that the "hikes are very bad for the market." (Story .22562)

Black Blade: HA! Oh really?

THE EASTERN FRONT:

Asia Precious Metals Review: Spot gold firms on Japan buying

Tokyo--Aug. 3--Spot gold firmed in Asia Thursday due to buying from Japan, while trading interest from other Asia-based players was tepid, dealers said. Although market sentiment for platinum remained bearish, profit-taking from Japan depressed the price, they said. (Story .2200)

Black Blade: PGMs still look good overall. Some speculators may trim their sails a bit, but PGMs are in critically short supply. I trimmed a few shares of SWC, but not because of price, but rather I am losing faith in management. I think they are incompetent and they missed this party. Still hold some shares, but continue to hold the physical.

THE RUSSIAN FRONT:

Russian Norilsk likely to start PGM supply to Japan September-October

Moscow--Aug. 2--Norilsk Nickel, Russia's largest producer of nickel, copper and platinum group metals (PGM), is likely to start PGM supplies to Japan in September-October, Norilsk's First Deputy General Director Dmitry Zelenin said Wednesday, quoted by the Interfax news agency. (Story .13259)

Black Blade: Russian cries of "WOLF" may have shaken some speculators, and that may have caused some Japanese to loosen their hold over night. Even after the Russians admitted to not having enough metal yesterday.

Meanwhile, S&P Futures are down -8.00, fair value -3.45, indicating a drop a the open on Wall Street at these levels. Overnight markets in the Pacific Rim and European were down. NG is back over $4.00 at $4.27 bcf, and rising as California is likely to go to stage 3 energy conservation with intentional rolling brown-outs. They want the energy and air-conditioning, they just don't want power plants (they offend the eyes!), hmmmmm����, Au is down -$1.15 at $275.15, Ag down 2 cents at $4.94, Pt tumbled 19.00 to $581.00, and Pd got slapped down $28.00 to $818.00, though they are at much higher prices than a few days ago. I would expect that during this so-called "earnings season", those that are last to report, will likely have disappointing numbers. Could get interesting.

Thanks Topaz.

True or False?

Euro falling because it is taking on more and more debt as a currency?

Dollar is rising because trade deficit is increasing even more than before?

Gold is falling because the dollar is rocketing?



While you think about that, tell us what event(s) will turn the dollar on its back; or, what will cause a trend reversal?

In reference to your post yesterday. The booty from the Atocha was quite a Haul for Mel Fischer. Unfortunately his son and daughter-in-law lost their lives in the pursuit. The crew are back on site and still retreiving "the goods". I saw some of the peices that the took on tour around the country. Quite impressive. I was not in a position to make any purchases, but my favorite was a very thick chain with a gold cross studded with uncut emeralds (a couple were missing). It wasn't for sale though. Next time maybe. They plan to look for some large silver ingots. The tour wasw Well worth it. You are lucky to be able to see the booty since your in FL.

Russia's Norilsk Nickel says has been exporting PGM since March

Moscow--Aug. 3--Norilsk Nickel, Russia's giant copper, nickel and platinum group metals (PGM) producer, has been steadily exporting PGM to the world markets since March, when the government approved the PGM exports quota for 2000, Norilsk Chairman Yury Kotlyar said Thursday. He said the recent surge in PGM prices was due to the Central Bank of Russia and Gokhran's--the state depositary for precious metals--reluctance to sell PGM. (Story .13064)

Black Blade: A spit in the ocean. And it still isn't being delivered. Hmmmm�.., more "WOLF?" Of course the Chairman has been claiming deliveries soon for a year now, and this contrasts to yesterday's statement of there not being enough metal. When dealing with the Russians, also act like your from Missouri and sy "Show Me!"

because, if it does today, what it did yesterday, then we are seeing the tip of the iceberg. Yesterday's swing was about 100 points. That would mean today, we could see 213 or lower. We watch, we wait...

because, if it does today, what it did yesterday, then we are seeing the tip of the iceberg. Yesterday's swing was about 100 points. That would mean today, we could see -213 or lower. We watch, we wait...

http://www.womensgroup.org/gold_20000311.htmlFound this link at Gold-Eagle. It is a long, interesting article on the war against gold. Here are the last few summary paragraphs:

Gold is not only a threat to a paper currency, but electronic money as well. By destroying the value of gold, the Group of Eight will also destroy the gold foundations and resources of the African countries which have some of the largest and most profitable gold mines in the world. By selling gold, the central banks, which have tons of it, will bring the price down long enough to be able to purchase, for pennies on the dollar, major gold mines as these countries scramble to find assets to sell in order to keep their heads above water.

Since the central banks own vast quantities of gold, and the International Monetary Fund collects their dues in gold, do you think they are going to destroy their savings? No, they are not that foolish. They are creating the perfect situation which will allow them to accumulate more of the gold reserves of the world while at the same time giving Joe Average the impression that it has no value!

(Doesn't this sound like what Trail Guide has been telling us?)

Endure, you shall prevail.

I hope so!

Would it be far out on a limb to consider the suggestion that with enough planning someone would say �

We will be inflating the money supply down the road, so let's institute a futures market whereby we can sell short the price of commdities and keep the prices of raw materials as low as possible as long as possible. We will use the huge money supplies we have to drive the commodity prices down and trap the commodity producers into playing the game to keep their financing available.
Works for both metals and grains.
Seems to me like this might be the ultimate trap.

I am not an economist. I have just been reading what has been presented here and at GE and trying to get a reading on the big picture. Yes, I subscribe to the good book which foretells of essentually one system. SO I asked myself � how could they pull this off?

Drive the price of gold low so some party(ies) can accumulate as much as possible to control the future financial system.
Drive the price of commodities down with a large money supply via futures markets. This will bankrupt fundamental industries and allow them to be owned by the financial system.

Where does this leave gold? I'm not sure.
Being used to establish a new financial system? I say probably.
Where does this leave gold stock stockholders? I beginning to agree with FOA. Out in the cold. Stockholders are last in line.
Will we be able to legally leverage what gold we have to help preserve ourselves and others? This is my biggest unknown. As I look at the laws and executive orders which have been are are being established without legal challenge. This concerns me. People who carry out those orders do not question them in any way. BUT look below at my perspective which has been changing.
What is the timeline? Who cares � peace of mind is far more important. If we look to make a fortune overnight like most investing in stocks, then we are truly gambling.
=> I consider PROFIT something which can be reasonably expected to be attained through sacrifice which is set aside and worthy of storage as a measure of wealth (financial or spiritual).

From posts I made here several months ago, some of you may recall that I decided to take on the IRS and those tax laws which I feel we have been manipulated into abiding by even though they (the laws) are exactly what our founding fathers seemed to have been trying to prevent.
Well, I'm learning more. I'm not sure working for a big company like I do which submits legal W-2 documents to the IRS stating that I earned wages, that I am headed for victory.
I have been trying to put things in perspective. Trust in God not my own understanding. That goes for my commitment to gold as money and wealth since in my own understanding I think it is the only way for governments and bankers to be kept from stealing from the people in non-obvious (to the masses) ways (fiat). He keeps telling me � Do not try to figure out all of these things, but rely on God and he will take care of me. For those of you who believe in God, this is just what He has been impressing on me for myself � no one else, but I needed to share it. For those of you who detest the concept of God, please overlook my straightforward thoughts on this matter.
The words of a GE poster a week or so ago really rung true with me. The essense of his post can be summed up by 2 Chron 7:14. I don't think that will happen because it does not fit in with how the scripture lays things out.

I really got slammed by one of my supposed best friends for believing such propoganda and passing on email regarding things like the "Know Your Customer" legislation. What I am finding is that this is very much the typical attitude of the American citizen.
I want so much for us to remain to live in a land of freedom, but I'm not sure that people today understand true freedom.

With warmest regards,

http://www.womensgroup.org/gold_20000311.htmlThis post should be in the hall of fame along with the full-text (with permission of course). A little out of the ordinary to have repost make it into the hall of fame, but this one is so important that an exception or new category ruling must be made.

To all,

If you don't read every word of this, then you have missed a post of great significance. We owe Leigh great thanks.

http://www.greenspun.com/bboard/q-and-a.tcl?topic=Grassroots%20Information
You ask >>>> Will we be able to legally leverage what gold we have to help preserve ourselves and others? <<<<<

This is a major part of the answer ----


> Facts that speak for themselves:
>
> "In 1929, the Soviet Union established gun control. From 1929 to 1953,
about
> 20 million dissidents, unable to defend themselves, were rounded up and
> exterminated.
>
> "In 1911, Turkey established gun control. From 1915 to 1917, 1.5 million
> Armenians, unable to defend themselves, were rounded up and exterminated.
>
> "Germany established gun control in 1938 and from 1939 to 1945, 13
million
> Jews and others who were unable to defend themselves, were rounded up and
> exterminated.
>
> "China established gun control in 1935. From 1948 to 1952, 20 million
> political dissidents, unable to defend themselves,were rounded up and
> exterminated.
>
> "Guatemala established gun control in 1964. From 1964 to 1981, 100,000
> Mayan Indians, unable to defend themselves,were rounded up and
exterminated.
>
> "Uganda established gun control in 1970. From 1971 to 1979, 300,000
> Christians, unable to defend themselves, were rounded up and
exterminated.
>
> "Cambodia established gun control in 1956. From 1975 to 1977, one million
> 'educated' people, unable to defend themselves, were rounded up and
> exterminated."

"...Euro falling because it is taking on more and more debt as a currency?

False...the US$ has significant debt yet it is rising. If Eurodollar debt is being rolled into Euro eurodebt, it is being done at a favorable exchange to the debt holder. The borrower will owe more euro's and the loan will have increased value when the euro rises. If euro denomunated debt is being sold for Eurodollar denominated debt in a refinancing move, the borrower will make out later when the dollar falls and the euro rises. This could be a source of the shortage...I don't really know or have any evidence. I read somewhere that the rising dollar is the result of the shortage of dollars but now I can't remember where I read it.

"...Dollar is rising because trade deficit is increasing even more than before?

False...Dollar is rising because there is a shortage of dollars overseas for settlement of dollar denominated debt. Not sure if this is related to the treasury buy-backs (Trade of foreign currency for US$ denominated debt). If the US treasury can squeeze the global players for dollars that easily...perhaps the market is not in as much trouble as it would otherwise seem. Long term the squeeze will hasten the exit to a new global reserve currency.

"...Gold is falling because the dollar is rocketing?"

Largely true...still looking for a schism in this relationship.

blew down and cleaned house, let's see what they do now.

http://www.usagold.com/Order_Form.html To Receive A Gold Information Packet for New Investors8/3/00 Indications
�Current
�Change
Gold DECEMBER COMEX
281.30
-1.50
Silver Sep Comex
5.01
-0.02
30 Yr TBond Sept CBOT
99~10
+0~09
Dollar Index June NYBOT
110.92
+0.44


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(8/3/00) www.USAGOLD.com Daily Market Report . . .Gold
continued its downtrend this morning following both the European
currencies and stocks lower. Producer and fund related selling
dominated European trade and the negative sentiment carried over
to the New York open. Japanese buying was reported in the Asian
market overnight. Gold demand has strengthened in India with Rupee
weakness the main incentive. India is the largest market for gold
bullion in the world.

Gold faltered despite more bad news on the inflation front. U.S.
factory orders rose 5.5% -- the largest gain in nine years. In the
currency markets, the euro continued to weaken on news that the
European Central Bank would not be raising interest rates. The
unemployment report due out tomorrow could have a major effect on
the markets with interest rate concerns at the top of most
investors' lists.

There appears to be some conflicting evidence in the numbers of
late with some showing the economy slowing down and others showing
the economy running at full speed and showing no response to
series of Fed interest rate increases over the past several
months. Our view is a political one: That the mainstream press has
been pushing the "slowdown" scenario as a mantra to induce the Fed
not to raise interest rates at the upcoming Fed meeting and
thereby boost the Gore candidacy. Despite those efforts, the
reality has been an inflationary build-up that has been masked by
government price reports but all too evident to the typical
consumer. The recent reports on crude supplies being radically
drawn down for example do not bode well for the future in that
they point to more gasoline, fuel oil, etc. price increases down
the road that will likely impact in the Fall.

That's it for today, fellow goldmeisters. We'll see you here
tomorrow.

Please note that we have changed our daily gold pricing from the
August to the December gold contract.

An Invitation:

The August issue of News & Views: Forecasts, Commentary &
Analysis on the Economy and Precious Metals, is now being
edited and will be on the way to the printer shortly. This month's
issue reveals some very interesting statistical information on the
worldwide gold derivative position. Short & Sweet opens this
month as follows:

"Now that gold has successfully navigated the July doldrums,
what do we have to look forward to? How does a price of $2500
per ounce sound? That's the number Leigh Goehring of Prudential
Investments dropped in a Forbes magazine interview in mid-July.
His reasoning echoes themes developed in this newsletter last
month: "I am a raging bull when it comes to gold," he declares.
"In times of inflation, people always end up just gravitating to
it. . . The period where the U.S. economy could expand without
fear of inflation is quickly coming to an end."

For those unfamiliar with our widely circulated newsletter, a few
words of description are in order. It's publication is greatly
anticipated each month as it probably provides the best summary on
gold news and opinion available today. The Short & Sweet format
mentioned above offers gold events in a rapid fire, no-nonsense,
bullet format designed for busy people who want gold related news
and opinion without the unnecessary fluff. Appropriate charts,
tables and graphs are also published to better summarize the
information. We also offer the clever political and financial
cartoons of the award winning Ed Stein of the Rocky Mountain News.
News & Views is a private letter offered free to our current and
prospective clientele.

Along with the latest issue of News & Views, you will receive our
Gold Almanac 2000 which offers fundamental background on the
yellow metal. The theme of this year's Almanac is wealth
preservation and one of the key articles is how those in the
1970s -- a decade many are comparing to the present -- not only
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offered at no cost or obligation.

You can call Marie at 1-800-869-5115 to request the
newsletter and Almanac or click here.

To Receive our Gold Almanac 2000 *****FREE*****

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DISCUSSION FORUM --for round the clock gold news & commentary from
the public

Can they hold it down here @ 279?????. I'll buy, who wants to sell??

If we subtract the rate of inflation from the federal funds rate, we can obtain the "real" federal funds rate.

In January1999 (before the Fed geban raising rates), the real fed funds rate stood at 3.05% (i.e., 4.75% - 1.7%).

Based on the most recent data, the real federal funds rate stands at 2.80% (i.e., 6.5% - 3.7%).

So when Michael noted today that there is confusion, he could have also noted that the Fed has not been sufficiently aggressive, in real terms, if it wants to slow down the economy and reduce inflationary pressures. Additionally, in a recent OECD report, before the last FOMC meeting, the OECD noted that the Fed should increase the fed funds rate by 75 basis points if it is serious about addressing inflation.

Do the manipulators think that a falling price will scare gold bugs into dumping there gold? At this point I will ride it into the dirt! I have been poor before and may be again if gold keeps this up. High Ho Silver... and Gold!
The race to the bottom continues.

$hifty

http://www.parliament.the-stationery-office.co.uk/pa/ld199697/ldhansrd/pdvn/lds00/text/00524-04.htmhttp://www.guardianunlimited.co.uk/EMU/Story/0,2763,217101,00.html

London and Frankfurt marry to create champion of Europe

Economic and Monetary Union: special report

Mark Milner and Jill Treanor
Thursday May 4, 2000

The historic merger between the stock exchanges of London and Frankfurt announced yesterday is expected to prompt a wave of consolidation in Europe.
The merger of Europe's two largest markets to form iX, unthinkable just two years ago, was given an additional global dimension through a link with US technology market Nasdaq.

Smaller exchanges in Milan and Madrid yesterday signalled their desire to join the alliance, which will be one of the world's most powerful exchanges. Others are expected to follow suit, and were invited to do so by the heads of iX yesterday. The London International Financial Futures and Options Exchange (Liffe) is one of their potential partners.

Announcing their much leaked merger, the London stock exchange and Deutsche B�rse tried to dampen anxieties that the euro would now become the currency of business in the City. Don Cruickshank, newly appointed chairman of the London exchange who will retain the position in iX, insisted it was not up to the exchange to decide whether British companies should list their shares in euros.

Yesterday's deal is a carefully constructed balance of interests between London and Frankfurt, neither of which wanted to be seen as junior partner in a deal which has been two years in the making. They gave up on plans to create a pan-European platform for trading involving eight competing exchanges and agreed a straight two-way merger. "What belongs together, finally comes together," said Werner Seifert, the Frankfurt chief executive who will hold the same position in iX.

"It is good news that the fragmentation and bickering about who is going to be champion of Europe is going away. I think in the next few months others are going to fall into line," said one investment banker yesterday.

London will be centre for trading in the 500 biggest shares in Europe; the administration - the chief executive will relocate to the City - and its regulations will be used for trading. Frankfurt will provide the electronic trading platform and be the centre for hi-tech stocks.

Gavin Casey, the chief executive of the London exchange for the last four years, said "egos mustn't stand in the way" of the creation of a single European exchange. He will leave this year and is expected to receive a hefty pay-off. He was credited yesterday with cementing the deal, particularly the involvement of Nasdaq.

Combining the two exchanges is expected to involve cost savings and job losses, but Mr Seifert declined to be specific. The merger has prompted talks between the two main European share settlement houses, Crest in London and Clearstream in Frankfurt.

How share trading will change: the ins and outs of listing, pricing and buying

Will share prices look different in the newspaper?

For now, no. Newspapers will continue to list prices in pounds and pence for as long as firms use them and readers want to see prices quoted in sterling.

Is it the end of the FTSE 100?

It might be its death knell, although the move towards a wider benchmark has been developing for some time. The exchanges have yet to decide which indices will be used but for now, the FTSE 100 and its sister indices are safe.

Does this mean we have to buy euros to buy shares?

Share prices in the UK will not be quoted in euros until firms do so. If and when euro dealing does get under way, settlement systems should mean that brokers will be able to cope with multi-currency deals. Unless Britain joins the euro, however, investors will also have to watch currency gyrations in any euro trades.

Will stamp duty be payable?

On companies registered in the UK, yes, until the chancellor decides to scrap it.

Do I get dividends in euros?

If investors have bought shares in companies where the euro has been introduced, the dividends will be accounted for euros. Not until the UK adopts the euro will firms here start to pay in euros.

Will the cost of trading go up?

The exchanges insist it should go down as brokerage costs fall.

------------
The London and Frankfurt Stock Exchanges
24 May 2000 : Column 778 3.29 p.m.
Lord Lamont of Lerwick � call attention to � the consequences for companies and investors, including pension funds, if shares have to be denominated in euros; �.
� they are then equally justified in keeping an eye on the future of the London Stock Exchange, an institution of enormous importance for our economy.
The proposed merger of the two stock exchanges could be immensely beneficial to London and to the whole of Europe. � Much of what I have read leads me to believe that it has been somewhat hastily cobbled together, partly in response to past failures of technology, and also pressures from competitors like NASDAQ. The merger seems to be the classic response of the traditional monopolist to embrace a competitor.
�details are extremely hazy. It is rather ironic that the Stock Exchange should propose a merger without a prospectus and without giving the kinds of detail that it would itself require from a company proposing to list on the exchange. � Mr Levitt, the chairman of the United States Securities and Exchange Commission, �is himself somewhat sceptical and has said:

"Having been an alumnus of six aborted (market) mergers in the US I wonder about how they are going to apply, and the likelihood of, a common listing and common governance structure".
... On the German side, iX will have one shareholder with a 50 per cent stake; on the UK side there will be 298 shareholders, each with a 0.17 per cent stake. Looking at those figures, no one would imagine that the London Stock Exchange had seven times the assets of its German counterpart or that there was twice the trading volume in London as in Frankfurt. On the face of it, it does not look like a merger of equals. One is puzzled by the concessions which have been made.
I appreciate that the Deutsche Borse has said that it is going to vote only in accordance with the votes passed by its members rather than using its entire shareholding. Nonetheless the structure sends a strange message. The proposed structure of the growth stocks market with NASDAQ also seems strange with six out of the 12 directorships going to the United States and the rest split between Germany and the United Kingdom.
--------------------------
ORO: I am assuming that from FOA's perspective, the German side is expecting to have the power to ruin the London financial center in a currency crunch, and that the English side thinks so too.
Where the NASDAQ fits in with 50% vs 25% each for the others is completely bewildering to me. Is it for real? Or is the NASDAQ just being strung along and that part of the deal is intended to never come to fruition?
--------------------------
... It is not satisfactory to have 40 different exchanges serving a single market. When the LSE and the Deutsche Borse come together they could be a formidable force, accounting for 53 per cent of trading in equities in Europe. It is argued that that will reduce costs, spreads and increase liquidity. �
�The real battle is between traditional exchanges, Internet dealing and ECNs, ... Many of the questions that this merger is attempting to answer will be decided, not by officials of the markets, but by the markets themselves. They may well turn out to be very different from those wished on us by the officials of the two exchanges who, incidentally, stand to make huge sums of money out of these proposals.
� it is intended that the 300 to 500 English and German blue-chip larger companies will be quoted in London. Some people have speculated that this will mean the end of the FTSE 100 and all-share indices. �there should be a credible replacement index because unless there are derivatives attached to those indices one will not get the liquidity in the market ...
While the older, mature companies are to remain quoted in London, the exciting new growth stocks are to be in a new exchange to be set up jointly with NASDAQ in Frankfurt. No company wants to be described as a low growth company, but one wonders what is going to happen to the medium capital stocks, �whether the markets themselves will decide which stock is quoted in which market.
�what will that mean for London's initial public offering business? Will it continue in London? What guarantee can there be that when growth companies, the new electronics companies, become the blue-chip companies of tomorrow, they will mysteriously return to London? It is noteworthy that Microsoft in the United States has chosen to continue to remain quoted on NASDAQ. If the new, exciting UK companies of the future are all of necessity driven to Frankfurt, there is a very considerable risk that they will be followed by an exodus of professional firms, advisers and investment banks.
� regulatory arbitrage. In the United Kingdom we have a more fully developed and efficient system of regulation than in Germany although it is fair to say that Germany is rapidly improving. Is Daimler Chrysler really going to want to be regulated by the � London listing authority [FSA], and submit itself to all the requirements �on corporate governance and the role of non-executive directors and directors' remuneration? �
� will the new small technology companies be able to side-step UK standards of reporting and accounting by being quoted in Germany? �if they are to have lower standards of regulation in future, they will lose much of their attraction to UK pension funds and institutions. It is a very great pity that the FSA cannot be the regulatory authority for both exchanges.
� transparency of trading in the market. � German trading rules are notoriously opaque. Huge block trades are carried out without reporting and in secret. It seems inevitable from the arrangements put forward that this anti-competitive practice will be extended.
The justification for this deal is economies of scale. But economies of scale do not come about just by putting together two organizations called exchanges. The real economies of scale could come in relation to clearing systems. Eighty per cent of transaction costs occur in back offices ...
A low-cost pan-European equity trading market needs a common settlement system. Yet the proposed arrangements exclude Deutsche Borse's 50 per cent stake in Clearstream and also leave in place the multiple expensive settlement arrangements ...
What had been planned in London and, � promoted by the Bank of England was a larger role for the London Clearing House �[as a] central counter-party for all markets and allowed [to] net trading. As the LCH already acts as a central counter-party to the international derivatives business, � capturing even greater efficiencies. It is not clear whether that has been compromised or just ignored in the deal with Frankfurt. �
----------------------------
ORO: In the FOA view, the LCH should be bankrupted by the gold default, perhaps that is why it is being ignored in the deal.
----------------------------
� It must mean the end of stamp duty on shares. If the merger goes ahead, the Chancellor will have no choice in that matter; otherwise share trading will move wholesale to Germany.
� trading platforms �The Sets system, �is to be scrapped in favour of the German Xetra. ...
Both Sets and Xetra were designed by the same firm, Andersen Consulting �Xetra has been out of action quite a lot in the recent past, including last week. Both systems are old, and faster and more advanced systems are becoming available. � another change will be extremely expensive for the small brokers, even if it is petty change to the big investment banks [ORO: and that is probably the reason for this]. ...
One of the suspicions [ORO: not suspicion, but certainty] about the merger is that it is driven by the needs of the large investment banks with insufficient regard for retail investors and institutions [ORO:the regard given is to find a new way to squeeze them]. �what is good for Goldman Sachs is not necessarily good for a free, open share market. ... Whatever Mr Cruickshank now says, certainly the Stock Exchange originally intended that all companies should be quoted in euros. � the exchange seems to have retreated somewhat from that position.
[ORO:This is in opposition to BH's hope (?) that dollar settlement would take over]
To compel companies to be quoted in euros, even though Britain continues to stay out of the euro [ORO: If the FOA view holds any water, London will be within EMU, so that would not be a problem], would be to impose an extra cost, both on the retail investor and on the UK pension funds. �
�surely it is another matter that should be decided by the market. As long as Britain is outside the euro, companies, taking into account the views of investors, should decide in which currency they wish their company shares to be quoted. A modern trading platform should easily be capable of that.
� question marks against this merger. It is not clear that the proposals are in the interests of investors [ORO: it ain't]. It may be that the competition authorities in Brussels will be able to examine the matter and obtain some of the detailed information that has been missing from the debate [ORO: they probably have and don't give a hoot]. �
Lord Layard: �our economic relations with the rest of Europe are so important to us. As an academic economist, � I spent time on the politics of unemployment, �on the politics of reforming Russia, �spent time on the reform of education and employment in Britain. However, my main job is running a research unit studying the causes of national prosperity, which include two key factors underlying this debate: the issue of industrial structure and the issue of currencies.
... When the information revolution was getting under way, many people thought that it would reduce the need for large companies and large banks, because it would so greatly reduce the cost of transactions between different separate companies. In fact, the reverse has happened because the cost of transactions has fallen, even more inside companies than it has between companies. So we now see mergers taking place in every industry and we are not necessarily reducing competition because the pace of globalisation is so rapid. The same general logic is behind the merger that we are debating today.
---------------------------
ORO: The cost of external transactions is NOW falling much faster than that of internal transactions, so that while the statement is historically correct, I don't expect it to be so in future. Ma� and Pa's biz doesn't have 5 MHz T lines, but they will soon have enough broadband capacity on hand to obtain most of the benefits, and the same goes for effective transaction computers. Cheap tools for the huge corporation are becoming cheap for the small biz as well. The dis-economies of scale will break through soon enough.
---------------------------
A related logic is producing mergers between currencies. As capital flows have become ever easier between currencies, the cost of exchange rate uncertainty and exchange rate fluctuations has risen and the benefits from using a single currency have, therefore, increased. �
---------------------------
ORO: that currency should be GOLD.
---------------------------
... The basic fact is that a single currency increases trade and capital flows within the area that it covers. Thus, it increases productivity and living standards. An obvious example is Canada. Canada has its own currency, but it shares a very long land border with the United States, so most parts of Canada are nearer to the United States than they are to the rest of Canada. Canada also speaks the same language as the United States and has a free trade area with the United States, but it has a different currency.
The result is that a typical Canadian province does 20 times more business with another Canadian province than it does with a US state which is equally distant and equally wealthy. Since trade in a large market increases competition and increases productivity and living standards, Canada's separate currency is an important reason why Canada is only four-fifths as rich as the United States. Therefore, free trade is not enough--not enough for a truly free flow of goods and not enough for a truly free flow of capital, ...
� the past 30 years has not been at all like that [stable competitive currency conditions]. The exchange rate has in fact been a major source of shocks and uncertainty, rather than a smooth mechanism of adjustment, and the main source of fluctuations in our national competitiveness, �
... The main argument against EMU, of course, is that we would lose our ability to vary our interest rates so as to offset those shocks which particularly affect Britain because of our particular economic structure. However, on inspection, it turns out that our industrial structure is, fortunately for us, very similar to the average of Europe as a whole. There is much less difference between Britain and the rest of Europe than there is between a typical US region�yet all those regions of the United States happily share a common currency.
�[does] a single currency needs a large federal budget. ..if Texas has a bust, the US federal government in Washington helps it out with higher unemployment insurance and lower tax claims. People often argue that a single currency in Europe can work only if there is a large federal budget in Brussels. However, this overlooks the simple fact that US states are mostly forced by law to balance their budgets year by year, so they need that external support from Washington. The fact is that in Britain we already have more automatic stabilisation from within our own national budget than any US state receives from Washington. ..therefore, �a single European currency would [not] need a large federal budget in Brussels to enable it to work.
� new technology is driving us towards a new world in which there are more large companies and more large currencies�.
---------------------------
ORO: if it is not untrue already, it will soon be. The drive to assemble large corporations is related to the rise in compensation of scarce top talent and the competition from smaller companies eating at the margins of the large ones. The latter react by buying up the smaller players and by merging to economize on talent costs. The threat to currencies from a generalized breakdown of the overextended credit and currency world is driving the merger of currencies. The growing inability of governments in finding out what the income and assets of citizens, and shrinking opportunities to tax them without uniform global cooperation from other governments, is making meaningless of "full faith and credit" of a government as standing behind its currency.
---------------------------
�
Lord Northbrook: �
� practicalities of the proposed merger between the London Stock Exchange and the Deutsche Borse. ... Companies which seek to offer their goods and services outside their own geographic borders often most successfully do so by acquisitions and mergers, especially as competition becomes fiercer. A combination of NASDAQ Europe, electronic crossing networks, � means that the choice strategically for the London Stock Exchange appears to be either alliance or decline.
Five markets are effectively formed by iX. The first is the blue chip market, which will take Europe's top 300 to 500 companies and will trade in either sterling or euros, depending on the company and its primary trading currency. The second is a high growth market for technology companies, which will be formed on a 50-50 basis between NASDAQ Europe and iX. These stocks are expected to trade in euros. UK and German companies that do not qualify for either the blue chip or high growth markets will continue to trade on their own local exchanges�
�stamp duty disparities, regulatory problems and the aim of doing all trading in euros are major problems,... the high technology area of iX. The high technology companies will come from the Frankfurt Neuer Market, the London Stock Exchange's Techmark stocks, excluding the upper tier, blue chip ones, and from NASDAQ. These stocks are expected to trade in euros. [ORO: I wonder if that means that the bulk of speculative trading volume is expected to move to Euro settlement, will they follow SEC rules or those provided by a new international securities regulator?] � a quoted London technology stock � will find that�the currency of its share price change but will also find that it will be regulated by the German regulator. Such a change may discourage technology companies from coming to the market and will also create problems if they move from one level to another. UK investors may also be deterred from investing in them with a euro share price. Also, there may well be extra custody costs in holding the share. [ORO: assuming there is still a pound sterling, and that Britain is not threatened by a self made ruin because of its participation in stabilization of the dollar].
� main administrative areas where major upheaval will occur as a result of the merger. � trading platforms. The market for blue chip stocks will be regulated in the UK but will �be one set of costs to change to Xetra from SETS then a second and much bigger cost to rebuild the whole entity to give, as the exchange press release said,

"a Common Market model and regulatory approach",
offering trading in all UK equities. Some have estimated the cost of the first change to be at least �500,000 per firm and the second step--the major rebuild--to be many more times that.
The settlement situation ... Crest, the UK system, �Deutsche Borse clearing system to be �merging with Cedel to form Clearstream. �
� a central counterparty. Neither the Deutsche Borse nor the London Stock Exchange has one. However Eurex (the European Futures and Options Exchange) does, and it is part of the deal. � London Clearing House to create a central counterparty for SETS. � the UK will continue to build the central counterparty. �linked to Euronext (the French, Dutch and Belgian Exchanges proposed merger) [then] to create a central counterparty for the entire merger. ..
"It is intended that trading on the unified Pan-European market will ultimately feed one central counterparty".
Who will pay for that? And is it to be in the UK or Geri�l�R@��, � capt�)0g even greater efficiencies. It is not clear whether that has been compromised or just ignored in the deal with Frankfurt. �
----------------------------
ORO: In the FOA view, the LCH should be bankrupted by the gold default, perhaps that is why it is being ignored in the deal.
----------------------------
� It must mean the end of stamp duty on shares. If the merger goes ahead, the Chancellor will have no choice in that matter; otherwise share trading will move wholesale to Germany.
� trading platforms �The Sets system, �is to be scrapped in favour of the German Xetra. ...
Both Sets and Xetra were designed by the same firm, Andersen Consulting �Xetra has been out of action quite a lot in the recent past, including last week. Both systems are old, and faster and more advanced systems are becoming available. � another change will be extremely expensive for the small brokers, even if it is petty change to the big investment banks [ORO: and that is probably the reason for this]. ...
One of the suspicions [ORO: not suspicion, but certainty] about the merger is that it is driven by the needs of the large investment banks with insufficient regard for retail investors and institutions [ORO:the regard given is to find a new way to squeeze them]. �what is good for Goldman Sachs is not necessarily good for a free, open share market. ... Whatever Mr Cruickshank now says, certainly the Stock Exchange originally intended that all companies should be quoted in euros. � the exchange seems to have retreated somewhat from that position.
[ORO:This is in opposition to BH's hope (?) that dollar settlement would take over]
To compel companies to be quoted in euros, even though Britain continues to stay out of the euro [ORO: If the FOA view holds any water, London will be within EMU, so that would not be a problem], would be to impose an extra cost, both on the retail investor and on the UK pension funds. �
�surely it is another matter that should be decided by the market. As long as Britain is outside the euro, companies, taking into account the views of investors, should decide in which currency they wish their company shares to be quoted. A modern trading platform should easily be capable of that.
� question marks against this merger. It is not clear that the proposals are in the interests of investors [ORO: it ain't]. It may be that the competition authorities in Brussels will be able to examine the matter and obtain some of the detailed information that has been missing from the debate [ORO: they probably have and don't give a hoot]. �
Lord Layard: �our economic relations with the rest of Europe are so important to us. As an academic economist, � I spent time on the politics of unemployment, �on the politics of reforming Russia, �spent time on the reform of education and employment in Britain. However, my main job is running a research unit studying the causes of national prosperity, which include two key factors underlying this debate: the issue of industrial structure and the issue of currencies.
... When the information revolution was getting under way, many people thought that it would reduce the need for large companies and large banks, because it would so greatly reduce the cost of transactions between different separate companies. In fact, the reverse

... When the information revolution was getting under way, many people thought that it would reduce the need for large companies and large banks, because it would so greatly reduce the cost of transactions between different separate companies. In fact, the reverse has happened because the cost of transactions has fallen, even more inside companies than it has between companies. So we now see mergers taking place in every industry and we are not necessarily reducing competition because the pace of globalisation is so rapid. The same general logic is behind the merger that we are debating today.
---------------------------
ORO: The cost of external transactions is NOW falling much faster than that of internal transactions, so that while the statement is historically correct, I don't expect it to be so in future. Ma� and Pa's biz doesn't have 5 MHz T lines, but they will soon have enough broadband capacity on hand to obtain most of the benefits, and the same goes for effective transaction computers. Cheap tools for the huge corporation are becoming cheap for the small biz as well. The dis-economies of scale will break through soon enough.
---------------------------
A related logic is producing mergers between currencies. As capital flows have become ever easier between currencies, the cost of exchange rate uncertainty and exchange rate fluctuations has risen and the benefits from using a single currency have, therefore, increased. �
---------------------------
ORO: that currency should be GOLD.
---------------------------
... The basic fact is that a single currency increases trade and capital flows within the area that it covers. Thus, it increases productivity and living standards. An obvious example is Canada. Canada has its own currency, but it shares a very long land border with the United States, so most parts of Canada are nearer to the United States than they are to the rest of Canada. Canada also speaks the same language as the United States and has a free trade area with the United States, but it has a different currency.
The result is that a typical Canadian province does 20 times more business with another Canadian province than it does with a US state which is equally distant and equally wealthy. Since trade in a large market increases competition and increases productivity and living standards, Canada's separate currency is an important reason why Canada is only four-fifths as rich as the United States. Therefore, free trade is not enough--not enough for a truly free flow of goods and not enough for a truly free flow of capital, ...
� the past 30 years has not been at all like that [stable competitive currency conditions]. The exchange rate has in fact been a major source of shocks and uncertainty, rather than a smooth mechanism of adjustment, and the main source of fluctuations in our national competitiveness, �
... The main argument against EMU, of course, is that we would lose our ability to vary our interest rates so as to offset those shocks which particularly affect Britain because of our particular economic structure. However, on inspection, it turns out that our industrial structure is, fortunately for us, very similar to the average of Europe as a whole. There is much less difference between Britain and the rest of Europe than there is between a typical US region�yet all those regions of the United States happily share a common currency.
�[does] a single currency needs a large federal budget. ..if Texas has a bust, the US federal government in Washington helps it out with higher unemployment insurance and lower tax claims. People often argue that a single currency in Europe can work only if there is a large federal budget in Brussels. However, this overlooks the simple fact that US states are mostly forced by law to balance their budgets year by year, so they need that external support from Washington. The fact is that in Britain we already have more automatic stabilisation from within our own national budget than any US state receives from Washington. ..therefore, �a single European currency would [not] need a large federal budget in Brussels to enable it to work.
� new technology is driving us towards a new world in which there are more large companies and more large currencies�.
---------------------------
ORO: if it is not untrue already, it will soon be. The drive to assemble large corporations is related to the rise in compensation of scarce top talent and the competition from smaller companies eating at the margins of the large ones. The latter react by buying up the smaller players and by merging to economize on talent costs. The threat to currencies from a generalized breakdown of the overextended credit and currency world is driving the merger of currencies. The growing inability of governments in finding out what the income and assets of citizens, and shrinking opportunities to tax them without uniform global cooperation from other governments, is making meaningless of "full faith and credit" of a government as standing behind its currency.
---------------------------
�
Lord Northbrook: �
� practicalities of the proposed merger between the London Stock Exchange and the Deutsche Borse. ... Companies which seek to offer their goods and services outside their own geographic borders often most successfully do so by acquisitions and mergers, especially as competition becomes fiercer. A combination of NASDAQ Europe, electronic crossing networks, � means that the choice strategically for the London Stock Exchange appears to be either alliance or decline.
Five markets are effectively formed by iX. The first is the blue chip market, which will take Europe's top 300 to 500 companies and will trade in either sterling or euros, depending on the company and its primary trading currency. The second is a high growth market for technology companies, which will be formed on a 50-50 basis between NASDAQ Europe and iX. These stocks are expected to trade in euros. UK and German companies that do not qualify for either the blue chip or high growth markets will continue to trade on their own local exchanges�
�stamp duty disparities, regulatory problems and the aim of doing all trading in euros are major problems,... the high technology area of iX. The high technology companies will come from the Frankfurt Neuer Market, the London Stock Exchange's Techmark stocks, excluding the upper tier, blue chip ones, and from NASDAQ. These stocks are expected to trade in euros. [ORO: I wonder if that means that the bulk of speculative trading volume is expected to move to Euro settlement, will they follow SEC rules or those provided by a new international securities regulator?] � a quoted London technology stock � will find that�the currency of its share price change but will also find that it will be regulated by the German regulator. Such a change may discourage technology companies from coming to the market and will also create problems if they move from one level to another. UK investors may also be deterred from investing in them with a euro share price. Also, there may well be extra custody costs in holding the share. [ORO: assuming there is still a pound sterling, and that Britain is not threatened by a self made ruin because of its participation in stabilization of the dollar].
� main administrative areas where major upheaval will occur as a result of the merger. � trading platforms. The market for blue chip stocks will be regulated in the UK but will �be one set of costs to change to Xetra from SETS then a second and much bigger cost to rebuild the whole entity to give, as the exchange press release said,

"a Common Market model and regulatory approach",
offering trading in all UK equities. Some have estimated the cost of the first change to be at least �500,000 per firm and the second step--the major rebuild--to be many more times that.
The settlement situation ... Crest, the UK system, �Deutsche Borse clearing system to be �merging with Cedel to form Clearstream. �
� a central counterparty. Neither the Deutsche Borse nor the London Stock Exchange has one. However Eurex (the European Futures and Options Exchange) does, and it is part of the deal. � London Clearing House to create a central counterparty for SETS. � the UK will continue to build the central counterparty. �linked to Euronext (the French, Dutch and Belgian Exchanges proposed merger) [then] to create a central counterparty for the entire merger. ..
"It is intended that trading on the unified Pan-European market will ultimately feed one central counterparty".
Who will pay for that? And is it to be in the UK or Germany? [ORO: in the EU, of course] ...
�regulation of the merged markets. The "big five" brokers �[say that] it is not practical to have a single unified market for all equity securities, given different liquidity characteristics, it is essential to have a single regulatory system which is transparent and flexible. � also needs one set of listing requirements and trading rules with fully transparent trading so professionals can see both what securities are changing hands and at what price. ..German rules are notoriously opaque and less demanding than the FSA. Brokers can carry out huge block trades in secret. Frankfurt listing rules are also unnecessarily complicated. ...it is surprising that the FSA, � as the UK listing authority, has not made that point where it is overwhelmingly best placed to be iX's regulator as well as the single listing authority. [ORO: FOA suggested that the Big of the past will not be the Big of the future.]
�
� the private investor must not be excluded, especially at a time when the Government are urging people into ISAs, [ORO:IRAs] employee share schemes and stakeholder pensions. In the first three months of this year, more than 6 million bargains [ORO: retirement plan conversions] were traded for the private investor.
4.5 p.m.
Lord Haskel: �
� I wonder why we are debating the merger now. Despite yesterday's decision by the supervisory board in Frankfurt, � the deal is not done �
� Lord Lamont, sees this as yet more "euro creep";[ORO: Most definitely what FOA had in mind] yet another way that the euro is entering our lives, and perhaps he does not like it. But, like it or not, this is an inevitable part of being engaged in Europe. Mergers and consolidations are part of this engagement. They are part of being more competitive in the single market� economics is the driving force here, not politics.
� about companies denominating their shares in euros...some companies already do this because it suits them. Indeed, our top 300 companies are quoted in both euros and sterling every day, � companies have secondary listings in New York, again because it suits them. Currencies are a matter for the users of the market. Exchanges cannot force companies to take currency risks.
� currency risk for our pension funds. But the merger changes very little. If investors want their investments to remain in sterling, the shares will continue to be quoted in sterling. �. The real currency concern is that the merger is taking place when the euro and sterling are misaligned and do not represent economic fundamentals. The undervaluation of the euro and the overvaluation of sterling could cause misleading measures of market capitalisation...
�our concern must be how well it will serve the British economy and British business� lower transaction costs and more liquidity? Will British business be disadvantaged, �? Unlike the exchange rate, which only affects some parts of our economy, this will affect every part because every part of every sector of our economy is quoted on stock markets. The uncertainty will affect our businesses. .. uncertainty surrounding this merger may have an adverse effect on output and jobs in the real economy--and that is where it matters. � I hope that the terms of the merger will be finalised as soon as possible.
�at first sight, this merger would seem to benefit large companies and financial institutions. � greater exposure, lower transactions costs and greater liquidity. � small and medium-sized companies� has been much more volatile, with huge fluctuations. Thanks to the gung-ho attitude towards dot.com businesses, many good companies have seen large declines �valuations relative to their continental competitors.
� recent PE ratio for consumer durables has been about 8.9 [on LSE], whereas in Germany it has been 11, and in France it has been 14. [ORO: that is due to high UK rates and the fact that the EU countries are coming out of a slow period whereas the UK is at the end of a longish expansion.] That has caused some medium-sized companies to seek to withdraw from the London Stock Exchange by selling out to private equity funds. � Will [iX] provide them with a better or larger PE ratio? �
�implications of this merger and its impact on our economy. Will it be a suitable market for the investment of our pension funds? If the iX is to be a privately owned, centrally organised monopoly market, it may offer our pension funds a poor deal. [ORO: That is most likely its purpose � to prevent distributed markets where competition between counterparties and ECNs can come out with the large and inefficient EU players on the bottom, scrambling for business.] �matters of corporate governance and competition must be clarified and they must be got right.
Will there be access for the small investor and the small broker? �
� the cost of adapting to whatever settlement system � may be prohibitive for the small investor and broker.
�Will there be common accounting? Accounting is different in the UK from in Germany. There was a report in the newspapers last Thursday that regulators had agreed a common set of accounts for listing on stock exchanges anywhere in the world. �the committee charged with carrying out that work was set up in 1973.
� regulation. �rules in Britain and Germany are different, but they are converging. �
�Duty is payable on UK shares wherever they are traded. However the ADR loophole which enables British shares to be traded in New York has operated for some 10 years, I think. Will there be a similar loophole in Frankfurt or, � will stamp duty have to be abolished? �few of these questions are matters for the Government. �merger matters are largely for the competition authorities, the regulators, the shareholders, the staff and directors of the companies themselves. ...
�
Lord Desai: �
� mergers are seldom economically efficient. Every time economists study mergers, they find that they give tremendous help to the managers but never help the shareholders and very seldom help the consumers. .. seldom can we subscribe to a Darwinian notion that mergers take place for efficiency considerations or because the more efficient firms take over the less efficient ones. Normally, the cash-rich, less efficient firm takes over the rapidly growing, cash-strapped firm�
� we have a large Stock Exchange--historically, the largest in Europe--merging with a fast-growing exchange. The growth rates of the German Stock Exchange are quite spectacular. Between 1995 and 1998, in terms of new funds raised on the market, the German market doubled every year. While London was nine times Germany in terms of funds raised in 1995, it was only five times by 1998...
�complacency in London�London tends to regard itself as absolutely the best because it is the largest. The largest markets have to watch and make quite sure that they are as competitive as � there has been a rapid growth of small equity markets all over Europe. They are very innovative markets�
�whether the London market can make itself more competitive; �could it actually improve its practices and learn from other markets? Can it survive at the top? �
�
�Stock markets are �intermediaries. The fact that they have to be efficient is in all our interests...I do not care where my pension fund puts its money as long as it gets me a large return. I do not care about the colour of the currency in which it trades or where it puts money: � I consider the question of which currency markets trade in to be a purely technical one and of no significance.
� smart people; they should know how to hedge against exchange rate risks� �will it increase efficiency? Right now ... There is insufficient information on hand to consider � One of the reasons behind the merger was the fact that NASDAQ was threatening to come to Europe. � such a merger will �stave off a separate NASDAQ/Europe and integrate NASDAQ into iX. �
�the stock exchanges have not proved themselves to be very efficient in the technology that they deploy. Basically, it is quite pathetic that they cannot get a proper computer system designed to do business; �
�There is so much trade inside the US that 97 per cent of all trades are netted out. They do not really have separate settlements, ... There are far too many different markets and one has to settle bilaterally with lots of different markets. The more that markets merge, the more we shall be able to net out. That will lead to a tremendous growth in efficiency. �
�
Lord Lea of Crondall: �.last week Mr Michael Fallon said that the Stock Exchange had not only surrendered the towels round the pool to the Germans but also given up the hotel as well. �
�
�sterling is now a relatively small currency pushed between the two tectonic plates of the euro and the dollar.
Our exposure to greater foreign exchange risk has been clear ever since the euro project got off the ground; indeed, I would say that it has got off the ground successfully. �
�.respected financial journalist, Mr Anthony Hilton, the City Editor of the Evening Standard. He wrote on 18th May,
"People fail to realise that the London Stock Exchange was negotiating with a pistol held to its head. Both it and the German Exchange are shedding their mutual status but the capitalisation of the German market was destined to be two to three times greater than that of the London Exchange--and it was also planning to raise a cash war chest. So in a few months' time the Germans could have mounted a hostile bid that London would have found impossible to resist.

Faced with this option, Casey [the chief executive] has struck easily the best deal available for London--a much better deal than his hand would have suggested. Those who oppose it should stop and think what the alternative is. Casey deserves credit, not brickbats".
�
By the end of next year�all the continental-owned companies are likely to be quoted uniquely in euros. My expectation is that many British companies will also be quoted uniquely in euros. � a sterling facility will be available �if a company is quoted in euros, [but] the actual listing on the board will be in only one currency. There will be no dual currency listings. �
"dual pricing will not be allowed",
because that could lead to imbalances and resultant wider spreads. �Deutsche Borse states,
"A company's shares will be traded in only one currency in order to concentrate the liquidity in one order book".
�whereas we could all foresee circumstances in which all trades were in euros, no one could foresee circumstances in which they would all be in pounds. �
The Financial Times �states,
"at least it is a bold attempt to break the deadlocked self-interest that has bedevilled all attempts to create a much needed pan-European market".
�We have in the world today three basic time zones: Asia, Europe and America. Given that 24-hour trading will not be followed to the letter with stockbrokers working through the night--�trading hours for the large internationally traded stocks will be eight hours in Tokyo, eight hours in this part of the world and eight hours in New York. �
� there will be three big players around the world in the sense of three time zone players. That is the typical kind of oligopoly that exists in many industries at the present time�
�many industries that wish to have a spread of investments�need to look to Europe, America and Japan, not to UK equities. That is the way that pension funds invest. � it is an illusion to think that extra costs will result from what may become euro-denominated prices in Frankfurt. � pension funds' exposure to Europe is about 10 per cent�of a total of �400 billion.
�The stock of equities in this country in relation to GDP is much larger than that of the Germans. If the Germans go in the Anglo-Saxon direction, I believe that they will soon have a bigger equity stock.
�
Lord Barnett: �
�.
�I am rather surprised that some Conservative politicians--of all people--have said that they should tell the markets how to handle the merger. �
�
Mr Portillo's arguments:
�hi-tech stocks will move to Frankfurt, �some parts of the merged exchanges will have some parts of the business. �London is far and away the bigger financial centre; it is hugely bigger.
Perhaps many of the banks that the noble Lord has told us he represents will be based in both centres--�
�[the] shift �will be from Frankfurt to London rather than the other way round. � German regulations, � Lord Saatchi--who will reply to the debate for the Opposition.
"if shares have to be denominated in euros".
�the market will decide these matters; shares will be denominated in the way that the market wishes them to be denominated. �
�
�Lord Lamont, said in The Times, and similarly in his speech:
"A merger of the London and Frankfurt stock exchanges on the right terms could be immensely beneficial to all concerned. The vision of a market that covers half the equity trading in Europe is a bold one".
�
Certainly there is a Eurosceptic argument. I take the other side of that argument, �
Lord Blackwell: �the outcome of a merger of this kind will be ultimately determined by the markets, and that the markets will prosper only if they provide an effective and efficient trading system that meets the needs of customers. There are plenty of competitors around who will displace the merged exchange if it does not achieve that position. [ORO: If regulatory structures do not interfere. The competition should come first, the merger second. If not, the merged mega-exchange will find friends in officialdom that will freeze out competition.]
..the principle of global exchanges [provides the] benefits to be had from liquidity in depth; from the growth in size and scale of exchanges; and from the bringing together of trading that reflects the increasingly international trading portfolios of many investors.
�.
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�most critical question now, �is whether the two parties can agree terms that will allow the optimum market outcome to emerge unconstrained by political compromises, fudges and woolliness that are likely to cause problems later... Lord Desai, mentioned that many mergers fail to deliver benefits �they may give different answers to different audiences, and thus fail to get clarity in advance on where they are actually taking the merged organisation. �how power will be distributed �
�where the operation, control and wealth creation will lie between the two organisations as they come together. ... Physical location [of the exchange]--�is much less important � than where the traders, their screens, the users and the customers are located...
�I think most people would expect that the focus of traders and screens will remain in London. �because that is where most of the major institutions are already located. Their resources, systems, infrastructure and their people are there and nothing in the merger itself would prevent that situation from continuing �
� the settlement and clearing systems... physical location is much less important because�the exchanges ultimately end up using the most efficient settlement system that can be put together, � given the evolution of electronic processing--"global straight-through processing" I think is the new term�There is nothing per se in the merger that would prevent that happening, so long as vested interests do not try to stop it happening in fixed locations in one place or another. [ORO: which the Germans seem to be doing. This merger has more to do with avoiding competition from distributed networks than with efficiency.]
� the power to set the rules lies outside the exchanges themselves... efficient markets clearly need the right balance between� transparency and�the avoidance of undue burdens being placed on the listing companies and the traders. I think it is also important, �that the markets continue to allow the effective operation of takeover rules and the corporate activity which is important to economic efficiency.
�the market participants will want reassurance that the volume market, �will continue to operate within the successful and open United Kingdom regulatory framework that has evolved and � not be distorted by compromises or harmonisations that introduce �.the lack of transparency that has perhaps characterised some of the Continental exchanges, or that places barriers in the way of takeover activity.
The regulations, �for the proposed smaller company exchange, where over-rigid listing rules could block the raising of new capital. If�under German regulation initially, �we need �regulation [to] �meet the needs of United Kingdom companies and �investors in �high-tech shares.
� what the ultimate objective is, in terms of separate regulation in these two markets: �under some common regulatory framework to allow shares to move from one to the other, and to have some harmonisation. � [or] to keep them separate, which ultimately may well be competitive rather than complementary.
�My noble friend mentioned that the United Kingdom risks being disadvantaged by stamp duty� in the United Kingdom which is different from the rest of the Continent. � [is] Government � prepared to accept that implication. �
�[the iX] itself has now recognised that attempting to enforce a single currency trading in euros, if that ever was contemplated, is not a valid option. �it is the needs of customers that will prevail. � as long as the United Kingdom is outside the euro, �investors [need] to be able to invest in UK denominated assets� the listers [should be free to] choose [the currency of trade]. � the exchange will have to offer dual currency trading in a number of shares. If it does not, investors will go elsewhere.
�
����������
ORO: It should be understood that the whole notion of regulation and the differing settlement systems are the result of government attempts to control corporations within their jurisdictions, and to keep investment funds within their borders. This is a remnant of the socialist revolution of the 100 years from the second French republic to the beginning of the end in the 60s. There were never any market forces that dictated the particular regulations and transparency or lack of it as institutionalized in the current markets. Had exchanges been free to offer the markets different accounting and open or hidden bid/ask posting and clearing standards, and compete on the basis of both that set of issues and of costs, it could be argued that something would be given up. Considering that market requirements were never a consideration in setting the rules, it is likely that the large corporations and the great banks will continue setting rules in any transnational organization that would regulate the new iX, just that the rule making would be one more step removed from public control through politics, and forever disconnected from the actual needs of the bulk of investors, corporations, and banks as the rules set the advantages of the large and connected players in reinforced concrete.
����������
5 p.m.
Viscount Chandos: �I am no longer the practising investment banker �I am also an adviser--in commercial rather than political terms--to a member of the London Stock Exchange specialising in "growth" companies.
� losses suffered by UK pension funds from holding securities currently traded for settlement in euros. � [is] an economic fallacy, �
The euro-denominated securities held by UK pension funds are predominantly equities and hence real assets rather than monetary ones. [ORO: actually, they are both] �the performance of such an equity portfolio �[is the result of both] the share price and the exchange rate. Since the launch of the euro, eurozone equities have generally performed well, not least because in many cases companies have benefited from the competitive exchange rate in which they trade. The denomination or principal currency of settlement for an equity security is essentially a veil. �the London Stock Exchange and the Deutsche Borse [clarified] that it will be their customers who determine in which currency or currencies shares will be traded.
�the London Stock Exchange is a commercial organisation with no monopoly or privileged status beyond the legacy from its earlier, more protected position�
�national interest �[is in] the maintenance and, �enhancement of London's position in the global financial markets, generating employment and other economic benefits. However, even more in the national interest is to see the most efficient and dynamic capital markets made available to UK companies of all kinds to finance their investment, expansion and growth.
� American economics writer, Professor Brock, � argued convincingly for a causal connection between the superior record over the past 10 years of the US in net job creation and in the vibrancy of its capital markets, in particular NASDAQ and the venture capital community. [ORO: and the completely artificial currency flow circuit that drives both to malinvestment.] �the promotion of new companies and new jobs in the new economy �[will benefit from] closing of that gap between Europe's capital markets and those in America. We should not shrink from sacrificing, if it is necessary, 1,000 jobs in the City if, by so doing, some 5,000 lasting new jobs are created in emerging companies, financed by a strengthened stock market.
�the �--iX--offers the best prospects for enhancing the provision of capital to small, medium and large companies, � efficiency gains �could be achieved through massively increased netting of counter-party risks should, through reducing the capital needed by member firms to support their customer business, lower the cost of dealing for all investors; �any capital thereby freed up will then be available to support proprietary trading by member firms, �which in large part determines the market liquidity available to long-term investors.
The separation--in both the British and German markets--between stock exchanges, clearing houses and settlement systems means that a simultaneous resolution of all these detailed issues is impracticable. I believe that, in the first instance, the merger of the two exchanges is the best possible way of achieving the desired efficiencies in settlement and risk management.
�the growth company market, �the most difficult area for many market participants and commentators. There is no doubt that the German Neu Markt has been highly successful. �the ceding of the centre of the new growth market to Frankfurt feels threatening to UK technology and other high growth companies, �[but] if the strengths of the Neu Markt and NASDAQ can be brought to bear for the benefit of UK companies, then this will be for the national good.
�member firms of the London Stock Exchange, �[should] look at the industrial, commercial and financial world around them. The very structures and institutions which may have served industry well 30 or 40 years ago are unlikely to be appropriate now, as companies both large and small trade in a hugely more open and international market.
�The leaders of some of the country's largest merchant banks urged a continuation of banks' ability to conceal their actual profitability through the use of hidden reserves. I recall an argument that took place at around the same time with a then banking colleague who vigorously asserted that it was in our employer's interest to continue as long as possible the archaic system of a Bank of England queue for new issues in the London stock market to protect the status quo and our banks' established positions. [ORO: The continental markets are freeing themselves from local control during this transition between breakdown of national control, and the establishment of a powerful Eurocracy that will attempt to control everyone from Brussels. I expect the same banks will do their best to obtain unfair advantage there instead of through their national legislatures.]
�for all the traditional strengths of the City, it was attitudes such as those which contributed to the virtual disappearance of British-owned investment banks. �
Lord Newby: �
�the background to the situation in which we find ourselves is typical of Britain's relations with Europe. �the City began this process with a fair degree of complacency. � that pre-eminence was unlikely to be challenged by any continental upstart. �something is going on and �we need to respond if we are not to lose that pre-eminence; unless we get a move on, the consolidation will take place without us. �there was such a rush before the French alternative [international stock exchange] scheme � that we have something of a "cobbled together" scheme. �
�The Deutsche Borse has approved it; therefore, there is a body of support for it on that side of the Channel which needs to be borne in mind. If London were to pull back, having come this far with German support, it would lead to a major question of credibility for the London Stock Exchange. �there is now an increasing number of options in terms of new systems of stock market trading, which means that we cannot merely fall back on our past position. �
�regulatory framework. � in Frankfurt� has lower disclosure standards and, �. less consumer-friendly .. than � London. �Frankfurt [moving towards openness], clearly it will not lead, before any merger is completed, to a single regulatory framework. �that within the single body of the merged exchange �virtually every aspect of the way in which a stock is treated will depend on exactly where it will be listed first. That seems unsustainable in the longer term.
�
�It is clear that the very large players have been consulted up to now but the medium and small players in London have not. �consulting the private investor �on some of these issues is impractical and is unlikely to lead to a clear view being expressed. �
�who bears the changeover costs. �[suggests the exchange help smaller traders.]
�which shares will be quoted in euros, and whether having some quoted in euros and some in sterling will cause difficulties. �. We shall see whether it proves in reality to be a problem�
�whether the merger will lead to Frankfurt or London being pre-eminent. [ORO: it is intended that the Euro will be pre-eminent] �concern �that the bulk of business will go to Frankfurt, because that is where the new stocks will be traded, including the high-tech stocks. �Frankfurt �[fears] that companies will opt to list stocks in London when they have the option. �when both sides express equally strongly held fears that the other side has the advantage, one has an instinctive sense that they have got it just about right. �
�.
�
�a consolidation of Europe's stock exchanges must make sense--that 40 is simply too many. �In the single European market a consolidation of exchanges will make mergers and acquisitions across Europe easier, and it will be easier for individuals to hold shares. �the impetus for this European movement is not coming from �Brussels or from the Council or the European Parliament. It is coming from American merchant banks. [ORO: And they are holy and beyond reproach? Are they fleeing the dollar, or are they dollarizing the EU stock markets?] �In a sense, we are now following the market. In a number of economic issues that is a good principle.
If �consolidation in Europe makes sense, and that it should be market driven, �it must make sense to have a single regulatory platform. �
�The exact shape of the exchanges in London and across Europe must be market-driven. �where there is a regulatory role to play, we have spent a great deal of time thinking about how to achieve a fair and transparent system.
5.20 p.m.
Lord Saatchi: �

recently I read in a local newspaper that the iX is NOT a certain thing,no details left in my brain'sorry.Are we all getting screwed or what?

Thanks ORO!

TD, you said...
"...I consider PROFIT something which can be reasonably expected to be attained through sacrifice which is set aside and worthy of storage as a measure of wealth (financial or spiritual)."

I agree that the concepts of financial and spiritual profit are related.
I consider profit to be a measure of one's ability to transfer momentary (fleeting) economic advantage into a stable store of value to be used in rougher times.
Financially speaking some portion of one's material profit should be reinvested into growing a business that has room to grow, or to divert that portion of those profits to a new endeavor that holds promise of growing the base of profitability (diversification). The remainder should be sequestered as a hedge against the loss of the entire profit generation structure. The seed corn of a new venture so to speak. The use of profit in this way serves the purpose of heaven because as your endeavors grow they help others to create a store of value commensurate with their contribution to the effort. When profits are created only on paper and by tricks of accounting, one is destroying the basis of profitability...it is a devious and deceptive practice that does not serve heaven as someone will be left holding the bag.

Similarly, the spirit profits by giving of goodwill toward others. By helping them along the path of knowledge of what they are really here for. The fortitude of our spirit is affected by the actions of those around us. If we give what we can to help those around us, our store of value is the goodwill toward us by our fellow beings. In times of hardship, our fellow man can do much to restore our spirit...but this goodwill is not inexhaustable.

I know that there is a source of spiritual power that is inexhaustable. In the same way, the bounty of heaven upon earth will not fail as long as we understand the nature of it.

We should think of the profit derived of the material world in the same way that we consider the goodwill of mankind. A fleeting advantage rapidly consumed. To use it wisely, is to apply it to the benefit of all. Accrue only that portion of profit in hard asset needed to sustain oneself and dependents for 1-3 years. The rest must be introduced back into the fray in an attempt to serve heaven...not by donation but by the introduction of enterprise.

If what you say is true, ...dollar is in short supply to pay debt overseas... and this is the real reason the dollar is rising, then liquidity would have to be drained from that zone in order to control dollar strength. Conversely, those interested in making their dollar payments may be selling off Euros cheaply to get into dollars driving the Euro lower. Gold is merely a follower (inversely speaking) of the dollar. In other words:

Dollar shortage creates demand for dollar.
Dollar creators hold back or buy up supply.
Dollar rises.
Euro demand lessens, thus lowers.
Gold follows dollar inversely.

So, when the dollar is in threat of drying up and all heck is about to break loose. Create some more dollars to let out some wind. This rocky-back'n forth motion could continue for quite some time. Net result being inflation and record trade defecits. Inflation because the tap of dollars is open for a long time. Trade deficit goes higher because US dollar holder, credit card holder, home equity loan holder consumers buy-buy-buy foreign goods as long as dollar is high. Eventually, the system fails because the sail rips and the normal (abnormal) control mechanisms snap.

Gold is the insurance policy that all CB's appear to be selling but in fact are redistributing. All are positioning for the big wind, if it comes...no...when it comes.

Lots of positioning going on know. We are just the pawns in this game.

The arrow that will pierce the sail is likely to be a random, unforseen event (probably another hedge fund or two or three). No, I said, unseen. Hmmm, I wonder what it will be?

Look at the price of gold now. Kitco shows $272.80, down $3.50!!!!

Pull those gib sheets in tighter. Heave too, matey!

US 30yr bonds and US$ are testing very important long-term resistance just as gold is testing very important support......Friday or Monday should settle the tug-o-war........I bet gold wins!!!!!!!!! Paper (of assorted varieties) loses.

The lessons I have taken and my analysis of implications are as follows:

The London markets are behind the times and are poised to lose stature because of:
- The growth of economic activity in the EMU due to lower costs of currency transaction and due to the motivation of the individual members to compete for the retention of business now that the borders do not limit business activity.
- The growth of potential market depth and liquidity in a greater stock trading arena (not just stock exchanges).
- The internal trade on the continent has moved from dollar settlement to Euro settlement, thus making the dollar bridge to London more costly for the EMU businesses than a Euro bridge. Since most UK trade is with the EMU countries, it stands to reason that costs would be lower with Euro settlement.
- Because of the above, the transnational corporations in the UK would find it cheaper to conduct business if their stocks were traded in Euro, as is a large part of their business is conducted in the EMU currency. Many would move to have their primary listing in Europe because of this. New companies with prospects of doing a high proportion of Euro business would prefer listing on an exchange in the Euro zone, where revenue and competition occurr.
- London has given up its investment house ownership mostly to US companies and a smaller portion to Continentals, because of its support of the US and its dollar. FOA tells us of the pending doom of the City if the UK does not join the EMU. Not least in cause, is the gold banking system's insolvency due to the gold market's location in London, and its role in keeping the dollar the reserve currency.
- The initial insistence on having all trade on the combined iX done in Euro, has given way to a preservation of existing settlement and trade systems with division of each currency's "territory" according to market capitalization, and allowing future moves between the two markets as the listed companies and their shareholders prefer.
- The NASDAQ moves into Europe should be viewed in our context of dollar vs. Euro and as response to technological innovation:
First, on technology:
* The NASDAQ is threatened by the existence of the technology to circumvent all exchanges in favor of open networks, and the lack of any economic need for the exchange's regulatory structure, which is driven by government rules, not by market choice.
* Similar threats stand in front of the established EU exchanges and London.
* Therefore, the merger trend is an attempt to create monolithic economies of scale to compete with the economies of open-access networks (which can allow anyone to be his own broker).
* This is the context of netting saving 97% of potential settlement costs in the US exchanges, while networks have to settle each transaction separately. The drop of settlement costs has already eliminated netting in bank transactions, no doubt it will do the same for the networks in the near future. The advantages of netting have been completely utilized, exposing the costs of the exchange bureaucracy and rule compliance to direct competition with networks. Fund managers will eventually defeat the attempts of the exchanges and old brokerages to retain government favor as they are finding the networks that much cheaper to use.
* The European stock exchange ventures are trying to circumvent this same competition by following the NASDAQ's old path, and by creating a brokerage constituency that is broad enough to put pressure on the regulators to favor them. Even with political favor, they will fail. The networks are just plainly more efficient.

The currency front:
* The NASDAQ has always been best aware of corporate growth opportunities. EMU is making Europe much more attractive for investors as the obfuscation by currency and interest rate moves is removed and allows investors to compare apples to apples, even as some accounting standards remain different. While one can unravel accounting structures, one can not take out currency behavior when comparing companies listed in different currencies. The larger potential market facing each new corporation as a result of the union makes for greater growth opportunities than were ever available in the US.
* The NASDAQ can also be viewed as attempting to move away from conducting its business only in dollars, desiring a hedge against the dollar arena by participating in the Euro denominated trade.
* Though capital costs in the US have been subsidized heavilly by seigniorage of the dollar, the US will quickly develop into a strong exporter if the dollar drifts down rather than falls like a rock as the remaining indebted emerging economies keeping the dollar afloat, that are not yet dollar creditors become such (more on this later). If the dollar explodes, the export move will have to wait for stability to come back. This would tend to favor lower capital costs in the Euro zone relative to the US, and a growth company stock bubble is more likely to emerge there than in the US after the dollar deflates. This being the NASDAQ's expertise, they would necessarilly try to establish themselves in the Euro zone before it becomes too obvious and the locals decide to go it alone.

- Finally, the transnational regulatory structure that is being implied is economically unnecessary, as most are, and will serve to create an institution with no accountability favoring the particular interests that can afford to pay for bribing the regulators and withstanding the regulatory burden. To the extent that alternative exchanges and networks are allowed to operate in some jurisdictions, one can expect that the international rules set by those mega-corporations who get their way will explode in their face at some point down the road.

You said:
"...Dollar shortage creates demand for dollar.
Dollar creators hold back or buy up supply.
Dollar rises."

Yes, and we are following what is described in the excellant article pointed out by Leigh (Thanks Leigh!) as "Mercantilism" with our dollar rather than with commodities. As a global reserve currency, indeed our dollar has become little more than a commodity (which we can produce rather efficiently). An unfortunate consequence is that commodity is transferred in large tranches by derivative paper...counterfeit dollars (as paper gold is not real gold until it is actually delivered).

How was mercantilism in commodities defeated in the article Leigh pointed out? By creation of a new system of settlement.

I foresee that the stronger the stench of dollar mercantilism, the quicker the world will embrace an alternative settlement system.

Stockholders are the ultimate holders of the corporate "bag of S**t". There is no place upon the back of enterprise for those who seek to profit without effort. A successful endeavor has no real need to become a public affair.

preceding message was for Twice Disciplined

I agree that the obvious settlement choice for the new exchange is the euro. I see 50% ownership of US based entities worrysome and probably the source of elation. If settlement in US$ triumphs, it will undermine the entire reason for creation of the euro. London may be a major european financial center now, but if they think they can pull off that one successfully, they have been taking too many trips in Amsterdam.

You said:
"...* Though capital costs in the US have been subsidized heavilly by seigniorage of the dollar, the US will quickly develop into a strong exporter if the dollar drifts down rather than falls like a rock as the remaining indebted emerging economies keeping the dollar afloat, that are not yet dollar creditors become such (more on this later). If the dollar explodes, the export move will have to wait for stability to come back."

It seems at this point that the drive toward dollarization of South and Central America (as well as Canada and Mexico)
now makes sense. The US will ride on the backs of these emerging dollarites to supply goods to the world should the dollar fall. There will be no move to re-industrialize America. We are now addicted to consumerism and are a service driven society. Breaking that habit now will be costly. We will enslave the southern hemisphere with dollar debt and have them manufacture our way to continued affluence. If the dollar advances further, post dollarization those adopting it will stagnate.

http://www.kitco.com/charts/liveplatinum.htmlYep...looking at the chart for live platinum the moment the analysts (aka 'Beagle Boys')jumped on the bandwagon, it went the other way...but we knew that.

The debt loads of Mexico and Brazil are falling rather rapidly. The Eurodollar and emerging market bond spreads are not moving much relative to US short term rates despite the currency weakening of indebted EMs. The country showing inverted yield curves is not Brazil or Korea, but the US. Turkey and Argentina and the Arab and oil nations are the only ones adding substantially to their foreign debt exposure. I don't think Brazil's current economic and political leaders see any benefit from dollarization. The 15% seigniorage sharing proposed for Ecuador and Argentina are a complete joke. Even if the two keep this for a while, a dollar crunch will still send them over to alternative currencies.

Even Indonesia is heading towards balance of debt. Korea and Malaysia have already done so and are running forward big time. It is quite an amazing situation.

The Fed is not fighting "inflation" directly, it is trying to keep the dollar afloat. It is trying to keep the trade deficit and income flow deficit dollars exported by the US coming back into financial markets (particularly into equities, that do not create an income flow) rather than buying goods and real property.

Foreign investment flows are competing with debt repayment for the dollars, and last year investments won out at $188 billion, whereas debt repayment only did $130 billion. And dollar note accumulation abroad did only $20-25 billion. This was with a hike in commercial interest rates from below 7% to over 8% during 1999. 1998 saw the same debt repayment levels as 1999, but much lower investment flows.

The crashy stock markets are still attracting flows, but are not likely to increase them substantially enough to inhibit debt repayment at these interest rates and oil prices (higher oil prices force countries to increase dollar reserves instead of paying down debt). Both interest rates and oil prices had to rise considerably in order to avoid effective debt repayment. But the aftermath of the next dollar (and Yen) debtor crisis will see more of the lagards paying off their debts. The next crisis is now forming and should see substantial damage to the remaining debtors. For them, it has become too clearly the source of economic problems. They are going to eliminate the bulk of their debt by default or by repayment as soon as they can. For Chinese, Japanese and other creditor nations, the sums on hand are sufficient to bail out most of the remaining debtors. A conversion of "tax haven" dollars into the soon to be floated yuan and into yen and Euro is also sufficient to eliminate the remaining debt. Definitely, the combination of both would destroy the dollar's remaining foreign debt base.
The developing dollar supply crisis will be a a less intense one than the 97-98 one, but at its end it will be ringing the end of the dollar's old NWO and bringing in a new order that is still not fixed and which is questionable in its stability and possible lifespan.

Right now it seems that the crisis will end in summer 2001, or so. At that time, treasury interest rates should have gone as low as they will, and foreign currencies should have dropped as far as they will go. The stock market in the US should have had its last hurrah (in inflation adjusted terms), and the new president (Bush?) will have to lead a country of consumers into becoming producers just when the prospect of retirement starts enticing the boomers to drop out of the labor markets. He will also need to control the revenue and security bureaucracy and their friends in finance from attempting to continue their rule of the world well past the point at which it is possible without heavy bloodshed. If they don't fade gently into the night, we will have to survive a very hard political climate for a decade or so before they start killing each other rather than standing united against us.

We wait and see.

I've jumped ahead of a few posts accumulating here, so I will just dump them later today or perhaps tomorrow.

http://www.fraserinstitute.ca/publications/critical_issues/1999/amero/section_03.html
Hello everyone! I've been lurking and learning for quite a while now. Anyone have an opinion on this article and the possible implications for gold? Is anyone familiar with The Fraser Institute?



"On the day the North American Monetary Union is created--perhaps on January 1, 2010--Canada, the United States, and Mexico will replace their national currencies with the amero.1 On that day, all American dollar notes and coins will be exchanged at the rate of one US dollar for one amero (). Canadian and Mexican currencies will be exchanged at rates that leave unchanged their nations' competitiveness and wealth. In all three countries, the prices of goods and services, wages, assets, and liabilities will be simultaneously converted into ameros at the rates at which currency notes are exchanged."

Sir ORO!

I had hoped for some sort of answer, but I never expected SUCH a reply. Thank you very much for
taking the time, Sir.

I must concede I feel a bit dizzy after the first read, so I will reread it and hope to be able to contribute a bit
if the discussion should continue.

What I can say for now, no, I didn't hope the dollar would take over as settlement currency for the new exchange, I rather feared it. Because in my opinion this would help the dollar tremdously to keep it's position as THE world currency for a (long?) period of time with (negative) implications for gold. It would also mean a major hit against the Euro.

So I agree with you, the settlement should take place in Euros, even though as far as I know, officials
involved in the merger have constantly avoided to give a clear statement on details, including settlement.

I have an acquaintance in the gold business who took an order today for $500,000.00 from a Canuck (perhaps ours'?). The customer ordered 1 OZ gold bars and made the comment that he didn't think the stuff would be available much longer but, that he had been wrong before. This same source is selling "proof sets" at melt. Go figure.

One form of paper Gold, the COMEX Gold futures contracts, are being sold down the river as necessary.

This comes as no surprise whatsoever. It's been explained here at the forum in full over the course of the last few weeks, so those of you reading along who aren't blinded by the trader mentality can take comfort in your understanding of why events are unfolding this way. It signals that moment draws closer when physical Gold will makes its pricing breakaway. If you don't have metal, you can't participate in the "new market". Enjoy!

Gold. Get you some. ---Aristotle

I believe you. However, the proof is in the tasting of the pudding. By my count, it is long past dessert hour. Kind regards...CM

To clarify in advance of a foodfight:
Not that there is anything "wrong" with having what I referred to in that last post as "a trader mentality", its just that the futures traders don't seem to see these financial instruments for what they are and how it is that they are utilized by the industry (banking that is, not mining.)

If your bullish on Gold, keep trading futures if you wish, with my blessing. Its your neck, after all, and you would be wise to evaluate who is standing on it and what their motivations are.

In the end, you'll find it is the on-hand ownership of metal that is important, not paper. Just reflect on 1933 and 1971.

Gold. As historic events repeat. ---Aristotle

By my reckoning, things are moving frightfully fast.

Gold. Get you some. ---Aristotle

The following comes from a memo to Austrian economist, Thomas DiLorenzo from Jude Wanniski, dated today 8/3/00. Thought it might be of general interest here.

"It was Canadian economist Robert Mundell, 1999's Nobel Laureate, who first noted this close connection to gold and oil. When President Nixon cut the dollar link to gold in 1971, Mundell predicted there would soon be "a dramatic rise in the price of oil, and thence all other commodities." Conversely, when the price of gold fell, it seemed reasonable to me that there would soon be a dramatic decline in the price of oil -- and thence all other commodities. I tried to persuade Fed Chairman Alan Greenspan then that by starving the banking system of liquidity in late 1996 and 1997, the gold price would fall, precipitating a monetary deflation. When he dismissed my warnings, I then explained the problem to Sen. Bob Torricelli [D-NJ] and asked him if he could get me a meeting with President Clinton. He called President Clinton's chief-of-staff, Erskine Bowles, who in turn asked then Deputy Treasury Secretary Lawrence Summers to meet with me, to hear my concerns. I did so in his office, in April 1997, and while he dismissed my concerns about the declining gold price, did say he would be happy to have me stay in touch. I'd done my best, Professor, but you know it is not easy being taken seriously when you bring the yellow metal into the equation. If he were asked today about all this, Alan Greenspan would acknowledge my warnings well in advance of the collapse of commodity prices in general, oil in particular. So would my clients, particularly those at the Independent Petroleum Association of America and the American Farm Bureau Federation. They tell me now they wish they had paid more attention to my warnings." End

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

Release Date: August 3, 2000

Rates for Wednesday, August 2, 2000

Federal funds 6.42

Treasury constant maturities:
3-month 6.07
10-year 5.98
20-year 6.09
30-year 5.77

upside-down spread FF vs long bond = (0.65%)

Is everyone out buying gold tonight at the big sale?

I think everyone is just trying to sift thru ORO's stuff from today....

http://www.womensgroup.org/gold_20000311.htmlLeigh: That article was a good read. Thanks Leigh. I wonder if MK could get permission to put it into the "Guilded Opinion" to complement the other fine articles.

SteveH: I was at my local Gun-Shop and saw a posting of some proposed legislation. I see that there are some new absurb proposals by Sen. Fine-swine, Boxer (Box-car Bertha), Schumer(?) (Low-rent Charlie) and others to make firearms purchases and ownership extremely prohibitive. Conditions include: Finger-printing, wavers to legal rights, submission to warrantless searches, etc. Not likely to pass, but these Festering Bags of Puss have publically shown their true intentions.

Welcome to the discussion. I read the link on the proposed North American currency. It seem to me that whether we are talking about Euros or Amerios, paper currencies are running for cover. Currency systems combine for the same reasons that corporations do. Because of the perception that merging will help them to deal more effectivly with the competition. This will be prove to be one of the great fallacies of the late twentieth century. Size begets complacency. Complacency is a leading cause of accidental death. When corporations fail the pain is usually confined to the the "investors" that got scammed into buying shares in the racket. When currencies fail, nations generally end up in a war for some vaguely patriotic cause.
So, to answer your question, I think the fad of currencies combining is not so much good for GOLD as it is bad for the paper that masquerades as money. The value of paper is as fleeting as the integrity of the men who print it. But GOLD, it's the Bonedaddy of the whole currency tribe!

RkyMtGold

Here's from the cover of BLOCK, Walter E., (ed.), Economics and the Environment - A Reconciliation, The Fraser Institute, 1990.

The Fraser Institute is an independent Canadian economic and social research and educational organization. It has as its objective the redirection of public attention to the role of competitive markets in providing for the well-being of Canadians. Where markets work, the Institute's interest lies in trying to discover prospects for improvement. Where markets do not work, its interest lies in finding the reasons. Where competitive markets have been replaced by government control, the interest of the Institute lies in documenting objectively the nature of the improvement or deterioration resulting from government intervention.

I don't know whether Walter is still with the Institute. I do know however that he's a fan and friend of the late Murray ROTHBARD and that he's the author of a book under the title "Defending the Undefendable" in which he defends the pimp, prostitute, scab, slumlord, libeller, moneylender and other scapegoats in the rogue's gallery of American society.

When they merge the Euros and the Amerios we will all be so happy we can call them Cheerios!

Good Night All

$hifty
:)

Hello to our host MK and other fine member-posters to this excellent forum. I concider myself a student at this forum and am often overwhelmed by the astute contributors and their material posted here. Thank you one and all.

I have also followed "SDers" posts and comments @ Kitco, really think he belongs at MK's table. Thank you Mr. "SDer" for your excellent work that I have taken the liberty of posting here. "S"

Date: Thu Aug 03 2000 10:04
SDRer (Ted Butler-from the root cellar, central bank control tenets) ID#246299:
Copyright � 2000 SDRer/Kitco Inc. All rights reserved
The "HOW?" of it�

Law on National Bank
Document Number: FBIS-SOV-1999-0718
22 Jun 99 pp 4-7
City of Kiev, 20 May 1999, No. 679-IX

[FBIS Translated Text]

Section I. General Provisions Article 1. Terms and concepts The terms and concepts used in this Law have the following meaning:
�
"bank metals--gold, silver, platinum, and metals in the platinum group
brought ( refined ) to the highest purity corresponding to world standards, in ingots or powder, that have a certificate of quality, as well as coins made of precious metals; "

"gold currency reserve--the reserves�as reflected in the balance
sheet of the National Bank�which includes assets RECOGNIZED BY
THE WORLD COMMUNITY AS INTERNATIONAL AND DESIGNATED FOR INTERNATIONAL
SETTLEMENTS; "

"metals accounts--accounts that are opened by authorized banks�to
account for operations that are made with bank metals; "

"the requirements for the minimum amounts of gold currency reserves; "

PRICE STABILITY--the MAINTENANCE of the SYSTEM OF PRICES at a certain level BY MEANS OF SUPPORTING a stable exchange rate for the monetary unit�;
http://www.cper.kiev.ua/legal_translations/LawOnNBU.htm

That is one DARK, DANK root cellar! But here, in black and gold, is the way of it. Suffice to say one is convinced this is NOT a whimsy of the Bank of the Ukraine, rather the WILL of the world's central banks [save our foot dragging recalcitrant--exception to prove the Rule]. Currency data confirms their stated goal: 'Price Stability' through currency control.{:- ) bbml


Date: Thu Aug 03 2000 22:25
SDRer (What they admit in public...) ID#246299:
Copyright � 2000 SDRer/Kitco Inc. All rights reserved

Commodity? [Middle English commodite, from Old French, convenience, from Latin commodit�s, from commodus, convenient.

In sessions held at the BIS the COMMITTEE OF EXPERTS ON GOLD AND FOREIGN EXCHANGE also monitors financial market developments with a view to identifying their implications for central bank policies and operating procedures.
http://www.bis.org/about/profil99.htm

Meeting more regularly - at the time of the monthly meetings - the Committee of Experts on Gold and Foreign Exchange also monitors ongoing financial market developments with a view to their implications for central bank policies and operating procedures.
http://www.beyond-the-illusion.com/files/New-Files/981031/aboutBIS.txt

Hornswoggled. And we laugh cause the Indians accepted glass beads for Manhatten. What goes around comes around. {:- ( (


Date: Thu Aug 03 2000 22:42
SDRer (STABILITY) ID#246299:


1/23/1994,
POG in Euro was 313.05

8/8/1996
POG in Euro was 306.966

7/31/1997
POG in Europ was 303.92

Friday, August 4, 2000
1 Gold ( oz. ) = 302.678 Euro

Golly gee wilikers Mr. Rogers, do you think they're up to something?

The following is an incomplete summary that partially answers your question of a few days back.
-----------------------
Regarding the current conditions, the most frightening is the amazing drop in demand deposits - what banks use to settle fund transfers, and which even money market funds (that replaced the bulk of demand deposits for the purpose of checking and debt payments) need some demand deposit assets. More on this later.

The Fed will probably need to start injecting funds on a major scale before the year is out if bank debt growth slows down, and if it does not, the Fed will need to do the same a short while later, depending on the rate of growth in the current accounts deficit.

Exports of US dollars in "physical" currency are continuing on their merry way as foreigners keep a larger proportion of their funds in hand, particularly the portion of dollars in hand, vs. those on account.

Consumer sentiment, though down from its peak, is still strong, and I believe the consumer will buy with both hands as they have always done when prices seemed attractive. Buy the dip is the consumer's motto, not just the consumer as investor. Remember Wilma and Betty: "Ch-a-a-arge".

The current accounts are headed to another stair step upwards as the dollar debtors are growing desperate again and the Fed is trying again to squeeze the Developing Country consumer out of the markets for consumer goods. There should be a further markup in the dollar and a surge of imports. Even the strongest of the Asian currencies are beginning to show strains against the dollar as both higher interest rates and higher oil prices are squeezing them to (1) pay down dollar debt, (2) hike up dollar reserves, (3) push exports out the door more aggressively in order to obtain dollars.

The actions above are a great part of the US success in maintaining the dollar exchange rate and foreign demand for treasuries for the purpose of reserves is keeping a lid on long term treasury rates. The resumed Yen carry trade has increased the demand for treasuries as well. The buyback program is moving the maturity of 30 year treasuries back to 1-5 years; cutting the natural interest rate spread between the various maturities.

I believe the recent Petroleum Institute data indicate that the doubling of natural gas prices has contributed to the oil price stabilization at the top of the Saudi dictated range, and the decline in oil inventory as some oil is siphoned off for storage and use in dual fuel energy and chemical feedstock plants. Turns out that not consumers or industrial users were responsible for the drop in inventories, nor distribution into small inventory holders, but simply a lack of importation from OPEC sources. Though this is not at all sustainable, since the gas supply is not growing because of the Clinton Administration's non-response to requests for regulatory approval, many plants will use oil whenever it falls. Only two reasons can stand behind this, 1) US oil companies are playing chicken with Saudi and friends (or the two Bills � Clinton and Richardson � are doing it for them) with an eye to starve them of dollars, which they need in order to make debt payments, 2) Saudi and friends are declining dollar offers for oil due either 2a) to attempt pressuring the US to get Israel and the PLO to settle, 2b) they do not want one sided dollars (i.e. that can not be exchanged for other currencies/gold because they come from the US rather than from exchange of other currency). Both of the latter are very dangerous, and the Hillary anti-Arab outburst probably have something to do with 2a, just as the long and intense negotiations had (with Clinton making his appearances with the Arrafat rather than both sides, trying to compensate).

The picture is very bad.

Met with an antique dealer near a very posh resort, says he had to start following the stock market because buyers were spending when stocks were up and stopped dead in their tracks when the stock market came down. Many antique dealers have told me that high quality antiques are very hard to come by and they have resorted to buying imported and locally made copies. Lower end product comes from the Philippines and Indonesia, higher quality stuff comes from Italy and the West coast. I take it to mean that distribution has been going on in a big way over the last few months as well off people prefer to keep Empire end tables over Yahoo and SP index funds beyond a certain balance.

The gold market appears poised for another rebound as foreign gold prices are nearing new highs that should attract speculative foreign capital, though I would only expect the drag upwards to be enough to induce further selling of paper from miners that would keep the dollar POG from rising beyond $360 through the Indian wedding season spike. High prices in Rupiah, and the SE Asian currencies (when they come down against the dollar again, as they have started recently) will limit consumption some. It should be noted that gold is nearly as large an import into India as is oil in dollar terms, nearing $7 billion. A curiosity is that South Africa produces $4.5 billion.

The strengthening dollar behavior on the buy side - inducing less buying, and the high prices in producer nations - inducing more producer selling, are going to limit expansion of physical sales in the developing world as they tempt SA and Aussie miners to hedge. Higher treasury interest rates on the short term notes have raised the dollar prices obtained by miners to an $18/oz. premium for one year forward sales.

High oil prices, however, should induce further ME purchases. Also inducing further gold demand is the astronomic Turkish price inflation.

I would expect the signal for immediate tightness in the physical market to be higher premiums on coins, particularly for maples and other high purity coins, and higher lease rates. So far, these are both behaving sluggishly, though lease rates are showing the first slight signs of tightness and premiums are no longer falling.

If the developing dollar credit market seizure abroad becomes serious, beyond that market's current tightness, expect less "help" from the IMF, which will force many banks to renegotiate emerging market loans (to private corporations and banks) and to write off some of them that are likely to fail. If the Fed responds to the "suction" of dollars from demand deposits to the foreign markets with new money printing and/or lower rates, then the dollar will start suffering and gold will rise further than it would otherwise. The "self generating" of checkable money by the issue of short term securities into the money market funds (MMF) is pretty much outside the Fed's immediate control as the issuers and buyers are both managed by the same organizations, and use bank demand deposits rather than Fed accounts as reserves � thus allowing the deposits at the Fed to be leveraged into bank demand deposits and then into the MMFs by factors on the order of 40.

When the bankers hit a bump that makes further commercial paper issuance too dangerous, the Fed will have to step in to start injecting funds.

Over 98 and 99, the following developing market countries have improved their financial balances:
By $1 to $2 billion:
Peru, Slovakia, Hungary, Brunei, Iran
By $2 to $5 billion:
Colombia, South Africa, Philippines, Macao, Syria, Iraq, India
By $5-10 billion:
Chile, Russia (would you have imagined that?), Israel (the former perpetual debtor is now a creditor nation), Malaysia (a creditor nation since last year), Mexico

Greatest advancements:
Thailand $47 billion, paid down $44 billion of debt
China, $32 billion now a US creditor on the order of $180 billion (est. for this year)
Indonesia $21 billion (they paid down $20 billion in bank debt)
Korea, $20 billion (they paid down $33 billion in bank debt, partially refinanced with bonds) and a creditor nation since last year
Brazil, $13 billion (they paid down $20 billion in bank debt partially refinanced with bonds)
Taiwan, $13 billion (US creditor on the order of $140 billion est. this year)

The countries going backwards were Argentina (in a small way), Turkey (substantially), Saudi, Arab nations and the oil states (though not by much when size is considered).

That puts dollar destruction by bank debt repayment on the order $220 billion over 1998-99, and accounts for 85% of the statistical discrepancy in the Fed Flow of funds reports for the two years. Demand deposits show this up as well. Most of the balance is in dollar bills sent abroad, which I estimate at some $50 billion over the same period (number still needs some work, but a preliminary estimate is enough for now).

One more year like this and you have put the US demand deposit accounts at critical level, and the Fed will have to do something about it in a big way. Switch printing press on, set dial to "warp 8".

The attack on the "tax havens" is another element in the same picture. They had accumulated vast new deposits over the past two years, and have moved from being $500 billion creditors to the world to being some $700-750 billion. The hope is to improve US currency positioning by at least a one time sucking of a chunk of that change into the US, UK, and EU (to a lesser extent) pockets. After that, I expect that the intellectual capital that does the financial management will leave NYC, London, and Connecticut in favor of these jurisdictions, and take most of that half of the funds that were invested within the US with them. They have till 2005 to make the transition before the "tax havens" are forced to recognize the UK, US, and EU exit taxes.

The High Tech community may soon follow with the best management and R&D people leaving for tax free living and business. The physical plant for most of the industry is already outside the US anyway. All that is left here is part of the clientele, the core of the R&D, and the Universities. The people are mobile and few, the support staffs replaceable, and the homeland is quickly becoming an albatross.

If a natural break in the gold banking system does not occur by 2005, it will be forced by either the Arabs or the EU. Fortunately, us goldbugs will not have to wait that long, as the Fed will need to start up the printing press next year, and the market seems to expect 7% price inflation already.

View Yesterday's Discussion.

The following is an answer to your question of the reason for the upside down spread, within context of a piece of research I have been doing that bears on the issue.
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The inversion is a sign of credit market tightness - the crossover dates to Jan. Bank liabilities and treasuries are equivalent in their being indirect and direct government liabilities, respectively. That since bank liabilities are guaranteed by government (it has been increasingly drawn on of late).

Banks have two alternative liquidity sources; the Fed and private depositors. When a bank creates a loan it creates an offsetting liability in the form of a checking account entry, which the borrower spends immediately and which becomes the seller's assets. The bank must compete with government and with private credit market securities for the location of that seller's asset on their books. Cash money does not stay long in that form. M1 is the cash money, of which electronic settlement cash has fallen at a rate 20% since the mid 90s as the efficiency of bank settlement and speed lessened the need for immediate cash entries. The replacement; money market accounts, which are direct participants in the debt security markets. These have been growing at much greater rates relative to bank's settlement cash (a small portion of MM accounts is held as bank settlement cash). The overall growth rate of settlement cash and MM accounts has been some 9% annually. Having 0 reserve requirements, lacking FDIC contributions, and minimal regulation, the MM accounts offer lesser costs, and can offer better return to the holders of bank liabilities. The advent of MM funds is a direct result of computer and networking advances of 30 years ago.

Thus, the banks must offer something that MMFs can't in order to maintain any competitiveness in retaining settlement cash. This advantage is the Fed's discount window and the government guarantee, and the advent of bank MMFs (if ya can't beat 'em, join 'em). MMFs hold short term paper up to 1 year+ in maturity and having an average maturity of 90 days. Many of these MMFs use government paper so that they can maintain safety seeking customers who would otherwise go to bank checking accounts. The Fed's open market operations affect both MMFs and banks directly. The Fed's discount window is open only to banks. Thus, financial market settlements are all done in the banks, and they serve the MMFs as major high volume clients for settlement services.

The CDs at banks compete with 1 yr to 5 yr treasuries for safe money deposits. Savings deposits compete with MMFs holding short term government paper and high grade corporate and bank papers.

Thus we have a 4.3 to 1 ratio of domestic bank checkable money to true electronic settlement money. Total checkable money is at a 7.7 to 1 ratio to settlement money (a.k.a. demand deposits). More on this follows the discussion of the inverted yield curve on Treasuries.

Now we can look at the significance of the Fed discount and funds rate hikes in this context.

Low Fed rates cause an increase in settlement money as banks can offer loans at lower rates than the credit market as a whole despite the higher costs of the bank's structure and regulatory burden, because the Fed stands ready to replace settlement money lost to the competitors (MMFs, bonds, etc.) with funds bearing a below market rate. This lowers the floor on the bank's deposit rates, and pushes some to seek a higher return in the credit markets. But it allows banks to expand lending regardless of market rates competing for the bank liability holder's business.

High Fed rates don't allow the banks to lend below market, and they must raise their rates on deposits. As a result, some Money Market account holders sell and put the funds in bank deposits (savings and CDs). The Money Market fund managers are forced to sell the longest term securities from their portfolio of short term securities (90 day average maturity), thus raising short term rates on treasuries. A similar process occurs with bond funds as marginal performers with lowish yields are forced to let go some of their holdings to raise the cash needed to transfer to banks, where customers are getting higher "risk adjusted" returns. This action pushes long term interest rates on corporate and mortgage debt, particularly of low quality (junk) debt often held by the worst performing bond funds along with treasuries (to avoid disaster to principal).

The tendency of dollar settlement cash to move to foreign lands and "die" as it is used to pay down dollar debt is completely ignored in the public discussion on monetary issues by both officialdom and the financial press and academia. The mysterious "statistical discrepancy" in both Fed and IMF statistics is covered by the net dollar debt retirement process, and the stretching of remaining debt to longer maturities. The myth of the GDP, GNI (income) and trade balance adding up, comes from the purposeful ignorance of these monetary phenomena. The GDP and GNI discrepancy in the Fed's flow of funds reports is mirrored in the IMF's unbalanced trade statistics, where there are more exports than imports � something that should be nonsensical if it were not for dollars being drained by the indebted emerging nations who are exporting goods and services and paying down dollar debt with export dollars � thus causing absorption of dollars into nothingness and maintaining the value of the dollar through a one sided trade.

This phenomenon also explains, in part, the incredible decline in bank settlement cash, as it tends to drop in rough proportion to the current accounts deficit, just as "physical" currency outstanding grows in proportion to the current accounts deficit. Foreign dollar holders are more prone to hold cash dollars than Americans (in proportion to their overall dollar holdings). In many countries, dollar bank accounts are as trustworthy in holding dollars as cats are trustworthy in keeping milk. The net draw on US settlement cash by foreigners paying down debt is on the order of the statistical discrepancy (around 130 billion).

Some monetary history from Fed data (lies, damned lies, and statistics�):

The decline in settlement cash (M1) relative to outstanding debt is nothing short of amazing. It has come to a 45 fold leverage. The history of this leverage is interesting in itself, as it grew from just over 8 to 23 from 1959 till 1982, without a single hitch as mainframe and network technology advances allowed less settlement cash to be used for service of more and more debt, and methods were made available to substitute bonds for debt settlement money in money market accounts. Leverage to settlement cash remained steady from 1982 to 1987 at the 22-24 range. Since 1987, the leverage grew from 22 to 27 in 1991, but slid back in the 1991-1993 period, bottoming out below 22. With the advent of new network and computing technology, the leverage has grown explosively since 1994, hitting growth rates far greater than any seen previously. The growth in this measure hit near 20% in 1996-7 and has remained quite high at 14% this year as transaction costs continue to decline.

When considering demand deposits alone as the true core of settlement cash, it now serves a debt system 77 times larger, with that leverage now growing at near 20% rates after slowing from 1991 through 1994 after the debt market seizure of 1991 prompted the Fed to inject cash at over 10% growth rates in that deflationary period. This is up from the historical 9 to 12 leverage in the period 1960-1970. 14 in the early 70s, growing at a 10% rate in the late 70s to 25 in 1978, and at a 20% rate in the early 80s to 33 in 1983. Growth slowed to 10% in the next 2 years into 85 when leverage grew to 40. In the 1985-87 period, the Fed let loose the monetary base and allowed demand cash to grow at the 10% "emergency" rate as debt growth outstripped technology's ability to rotate the same cash to service that much debt. The same growth rate hit a ceiling in 1990 at over 56 fold leverage as this cycle repeated and Fed money was injected till a 45 level was hit in 94. Leverage grew again from 1995 till today, with 77 leverage and over 15% growth rates in it. The technology advancements now allow cash settlement multiple times per hour using the same cash as transaction costs took another dive with current networking, minicomputer and mainframe technology advancements. Banks have managed to reduce reserve demands by a factor of 10 relative to the debt served by it (both within banks and the within the credit markets as a whole).

As a sign of the carry trade in Yen, it is interesting to note that the ratio of debt to monetary base in Japan has been falling despite Japan's being up to date on the appropriate technology. The main reason is that nearly all debt growth in Japan has come from Yen lending to banks and businesses at the monetary base level (bank demand deposits). This is the carry trade effect, and it seems to have accumulated to over $600 billion.

Looking at checkable accounts on hand, though the leverage of checking capable accounts has risen to nearly 7.5 times demand deposit levels, the leverage of debt to checkable deposits (which can settle debt) has fallen from the peak of 15.6 in 1978 to 10.5 today. While this is up from 8 at the open of the 60s, the decline from 1978's peak price inflation acceleration is very dramatic. The debt to cash preference that grew from 8 in 1959 to 12 in 1970 took off with the advent of serious price inflation just before the break of the Bretton Woods gold standard. The 1978 transition has to do with the growth of non-demand, or interest bearing checking, which made it possible for people and corporations with large balances to lose an acceptably smaller portion of their cash account's purchasing power, so that it need not be augmented by as much debt. From 15% of cash holdings in 1978, interest bearing checkables grew to 64% of cash holdings in 1982, and debt to checkables ratio fell from the 15.6 peak, back to the 12 level not seen since 1970. During the 80s, the debt to checkables ratio held at the 12-13 level till 1991. Since then, the ratio has eroded steadily, falling into 1994, holding steady till a slight inflationary fear started in 1996-7, raising the ratio from 11.26 to 11.75. At that point, the inflationary fears fell away as imported goods supply exploded with the collapse of dollar indebted foreign economies and their elimination of both inventories and demand. The calm of price inflation fears lowered the debt preference, resulting in a drop of the debt to checkables ratio to the current 10.5-10.6 level - which shows inflationary fears at post Kennedy recession 1960s levels despite actual 1980s levels in price inflation.

The connection between these is that checkable balances are intended for near term spending, rather than investment and savings, and debt is always spent. Thus holding checkables rather than using debt is an expression of either confidence in the near term purchasing power of currency, or the fear of not having sufficient future income to service new debt. Both of these are non-inflationary expectations, as is the lesser motive of collecting cash for the purpose of making debt payments in the near future (rather than rolling over debt).

The key issue of the bank's settlement accounts and their leverage (demand deposits) is that of monetary conditions within the debt markets. While banks have managed to improve their use of settlement cash by leaps and bounds, they lack the ability to produce plain cash as needed without the Fed, which has been reluctant to inject "too much" settlement money on a permanent basis.

The following is a work in progress and I have been reluctant to post it, not least because of the presence of some equations. I am not quite sure where this is headed, but hope all here should criticize this less

Black-Scholes models are not often viewed from an economic perspective, definitely less often from Mises' side of it, where he warns against reliance on economic statistics and the fallacies of equations.

Rather than using the Black Scholes model itself, I am using some of the assumptions that underly it.
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Mises' theory of interest starts out defining interest as the rate of discount of good X in the further future vs. having it in the immediate future.

It is the discount of the two birds in the bush relative to the one bird in the hand.

Viewing interest in this way, the argument goes into the necessity of an implied concept of interest in the setting of price for any productive property. If a property produces a certain quantity of goods per year, and there is no end to the stream it can produce, then without a concept of interest, there could not be a price set on the property, because the appropriate value would be all of the goods it would produce - i.e. infinity, unless future goods had a lower value relative to current goods.

Thus rates of interest originates in the mutual discount by various market participants of the value of future goods relative to the value of current goods. (1) Thus when current needs are very pressing relative to expectations of future needs, the price of future goods drops relative to the price of goods currently available. (2) When future supply relative to future needs is expected to be substantially more pressing than current supply relative to current needs, then discounts of future goods would be lower, and might even provide a premium. In this case, though, the expected future shortage would cause the buyers of contracts to pick carefully among the contract counterparties in order to avoid those who are unlikely to be able to deliver. (3) Under normal circumstances the markets are capable of delivering goods in the future with a small degree of uncertainty. Production (supply) and demand normally both proceed to grow in tandem, with capacity being planned ahead to provide most of the supply required in the future at roughly current prices and the discount of future prices is at normal market levels over prologed periods.

So under "normal" circumstances, the general rate of originary interest, or REAL interest is
IRi= 100%-FPRi(t)/SPRi
where
FPRi(t) = futures contract price for supply of good or service i at time t in the future
SPRi = spot contract price for immediate delivery of item i.
Prices being in terms of other goods at spot, hence the designation R for "real" prices.

These are generalized for the economy as a whole, and are different (though usually close) for each product. When such values are significantly greater for one product relative to the rest (the discount of future products is great, indicating a current shortage), then there would be an opportunity for an entrepreneur to obtain a higher than market return by investing his productive resources in production of the goods. If there is a premium on future production relative to current production (FPRi(t) > SPRi and a negative interest rate) then the entrepreneur is signaled by the markets that there is an opportunity to provide a product that the market is expecting to be in short supply in the future. The entrepreneur can sell forward his production and invest in new production capacity with a fixed profit in place. If such a situation persists, then it must be because the equipment and resources necessary for future production (investment/capital goods) is not available or future inputs have an even higher premium than the final product.

The argument progresses to point out that no particular monetary policy, legal limitation, or arbitrary rule can change this interest rate without changing the fundamental personal choices of people as to how much less a future item will be worth to them relative to one at hand.

Through this concept we can now approach the standard model of Black and Scholes for futures contracts which applies the following assumptions:
1. There is a monetary interest rate provided by the market,
2. A central bank exists which can print up as much currency as necessary to pay government obligations,
3. There is negligible risk of a contract for delivery not being fulfilled (though they do not say so themselves, there is an alternate condition; that such contracts would not ever be submitted to their issuer to be filled in any substantial amount, or that the terms of contract would change � or are set - so that delivery is not required when the contract matures while there is actual need for the product, but that the deliverable is currency in the quantity necessary to purchase the product on the spot market).

As a result of these assumptions, the mathematicians came up with the concept of the "risk free interest rate", the rate of interest at which treasuries trade, where they see no possibility of having default risk. In the purchase of an item at a set price through a futures contract, one is protected from price inflationary effects because there is presumably no default risk.

Thus they come up with a "no arbitrage" condition in which a purchaser of futures can use the cash available to put into treasuries of the same maturity as the futures contract (presented here in simplified form) assuming negligible storage costs:
For the buyer:
FPNi(t) => SPNi * (1 + INT)
For the arbitrageur or seller:
FPNi(t) <= SPNi * (1 + INC)
INC > INT
where
FPNi(t) = futures contract price for supply of good or service i at time t in the future
SPNi = spot contract price for immediate delivery of item i.
Prices being in nominal terms in the currency denominating both the futures and the , hence the designation N for "nominal" prices.
INT = The nominal interest on Treasuries � or the "risk free interest rate"
INC = The commercial interest rate

To connect the two sets of relations we have to take into account the possibility of a general price change whereby SPNi(t) (spot price at time t) would differ substantially from SPNi at the initial time for most products.
Thus we would have an index comparing SPNV(t) =sum(SPNi(t)*Vi(t)) to SPNV =sum(SPNi*Vi), where Vi is the volume of product changing hands (this would be a product consumption index similar to the GDP). Since we are interested in the changes in the price levels, we would take out of this set all the items or groups of items with substantially differing volumes of trade so that the content would be such that Vi(t)=Vi approximately. Thus SPN(t) =sum(SPNi(t)) and SPN =sum(SPNi) for the "fixed" basket, which would provide the benchmark for general prices (a simpler and more revealing version of the CPI).

So we can approximate the "REAL" prices using this "inflation index":
SPRi = SPNi / SPN
FPRi(t)= FPNi(t) / SPNX(t)

X is added to the SPN(t) to designate an expected rather than a realized general price change.

Using these relations with the interest relations and assuming that IRi converges to a characteristic rate, IR, leads to:
IR = IRi = 1 - FPRi(t) / SPRi = 1 � FPNi(t) / SPNX(t) * SPN / SPNi
1 � IR => (1 + INT) * SPN / SPNX(t)
IR <= 1 � (1 + INT) * SPN / SPNX(t)
IR + INT * SPN / SPNX(t) <= (SPNX(t) � SPN) / SPNX(t) = FX = Expected general price inflation rate, and expected currency depreciation rate.
Over a sufficiently short period and sufficiently low "FX", the number SPN / SPNX(t) is close enough to 1 so we can write:
INT <= FX � IR

This is a perverse result, indicating that when there is a normal condition of discounting of future product relative to current product (IR > 0), the nominal interest rate would be below the market's expected general currency depreciation rate. The only condition in which this would be appropriate is one in which there is a market expectation of perpetual future shortage of the particular good in question (IR < 0) relative to its current abundance. This essentially means that the interest rates charged to government securities must be below the expected currency depreciation rate if the originary interest is maintained as positive (normal condition that may be reversed for some items but not for all of them all of the time � unless there is a built in assumption that implies excess demand for all goods).

Taking a look at historical values for IR for 1 year at about 1.5% in the gold standard days and the current government 1 year note rate of 6.1% leads one to the conclusion that FX would be => 6.1% + 1.5% or 7.6%

Since such a shortage is built into the assumption structure of these relationships, we have to examine them more carefully.

Checking the arbitrageur's equation's effects to start this examination (the one using the limit of commercial interest rates available for the arbitrageur) we have:
INC => FX - IR

This would indicate a higher commercial interest rate relative to the expected currency depreciation rate, but leaves the REAL interest rate in a negative relation.
One year LIBOR available to bank trading desks is now about 7.15%, thus is estimated by the markets as
FX <= INC +IR = 7.15% + 1.5% = 8.65%
Thus 7.6% < FX < 8.65%
And INC � INT = 1% for banks
The intuitive expectation would be (at least for commercial interest rates) that INC� = FX + IR + DRX (DRX being the expected default rate on commercial loans less recovery potential, default rates are running at about 2% and recoveries are 60-75% on autos, 100% or more on older mortgages) and INT� = FX + IR would be expected for the government interest rate by the same line of intuitive thought.

For bank customers borrowing at prime lending rates (INC=prime) of 9.5% or at 1 year ARM (mortgages with adjustable rates) at 7.25%, and 9% caps, and high rated corporate bonds at 8%. Other consumer interest is 14% for revolving credit, 9.6% for 4 year auto loans.
Business (small) and consumer loans end up at 9.5% to 14% and for loans without government support and 8 to 8.5% for mortgages, which assume government credit lines could be tapped to maintain them.

The implied figures for "inflation" and historical IR give consumer interest at:
INC� = FX + IR + DRX
9.5% = 7.6% + 1.5% +DRX for prime loans
DRX = 0.5%
4.9% for revolving consumer credit default net of recovery � which is very low for credit card loans.
On ARMs the DRX turns out to be negative at �1.85% or so � meaning that recovery is expected to be higher than the loan amount in the case of default, and at 2% default, this would mean an expected recovery which is better than the loan amount, or that the ARM is expected to be turned over into a fixed mortgage well before interest rates are adjusted. If a smaller value is assumed for IR for the one year period, then, say at 1%, FX would be 7.1%, DRX for prime loans would be 1.5% and for the ARM it would be -0.15%

The point of the latter exercise is to find out whether FX is actually the figure implied by the combination of the standard futures contract valuation model and that of the originary interest assumption in which I have no doubt � when the FX is used in the rather obvious intuitive form for interest. It turns out that consumer and small business loans are indeed valued appropriately using the historical IR and the implied FX from the treasury note yield in the form derived above, as the default and recovery values calculated are reasonable for the secured consumer loans and the business loans.

In short, it seems that the market valuations implied by the futures model and the originary interest assumption are functioning properly and the equations are appropriate.

It also tells us that the actual currency depreciation rate discounted by the markets is some 7%-7.5%, double that reported by government agencies, and in line with monetary growth rates on the wider debt aggregates M3 and total non-financial debt.
The question remaining is why is there a reversed relationship between the government debt rate and the real/originary interest rate structured into the most basic assumptions.

In the above review, we rejected the notion that the real interest rate is negative, i.e. assumes consistent and perpetual shortages that the entrepreneur is not expected to be able to supply. The general real interest is at its traditional value (at least in the data presented here for 1 year and some revolving debt).

Is there something in the assumptions of the standard futures models that uniquely and necessarily requires government to pay a negative real interest rate on its obligations that amounts to a discount of double the real rate relative to other borrowers? As in:

INC� � INT = FX + IR +DRX � (FX � IR) = 2 IR +DRX
Spread for consumer borrowing vs. government borrowing.

The assumption of government obligations not being subject to default because of the ability of the government to print as much in funds as it wishes to cover shortfalls in revenue that would otherwise make its obligations weaker in standing, necessarily creates a natural discount for government borrowing and that discount should be DRX, but this has yet to force the markets to provide the government with a negative net interest � that is the government receiving more in valuable goods and services purchased with borrowed currency than it will ever pay back.

Let us now examine the assumption of negligible counter party risk and ask whether the assumption implies the necessary excess discount. The exchanges and banks conducting trade are guaranteed by the central bank to provide all the currency necessary to settle the futures contracts, even if the exchange, the settlement banks, and the underwriting banks are bankrupt. All bank liabilities are defacto guaranteed through government guarantee of FDIC and the central bank's well known policy of supplying liquidity (as bank reserves) on demand by the purchase of government obligations, and of government agency debt. This guarantee is an economic good with a particular value.

On the futures exchanges and in bank deposits and bank bonds (financial commercial paper), though the obligation to supply a good in the future may not be filled, the nominal payout at an amount equal to the spot market price would be guaranteed by the exchange's counterparty guarantee, and the exchange guaranteed by the underwriting banks, the banks, in turn, would be guaranteed by the insurance fund or the central bank, both of which are government operations guaranteed by the government. What is the value of the guarantee to futures buyers of having the funds available (by government printing) to purchase a quantity of a good they expect to need in the future? It is the discount they would otherwise expect to get for delaying purchase on the spot market of a good needed in the future. It is the originary interest itself.

Mises distinguishes between saving and investment. Savings are collecting canned goods, clothing and bags of wheat or flour for future use, as well as collecting of tradable items that are expected to be exchanged in the future for products needed at that future time. They actually incur a loss due to spoilage, loss, and due to the need for storage space having the necessary properties. Investment, on the physical plane is the procurement of productive equipment and service that increases a desired output of final or intermediate services and products. The investment incurs risk of the expenditure failing to produce a sufficient number of products (goods and services) of the requisite quality to have made the effort worthwhile.

Tradable items chosen for long term savings would tend to be those that are often sought, and of limited quantity such that their value would rise with populations and productivity. A key requisite for functional savings of tradables is rarity, a property seldom achieved by any currency. Through long experience, it would be found that the most effective items for this function would be metals that are difficult to produce, and therefore rare, virtually indestructible (as opposed to their form, which most definitely is destructible), and would feature less sensitivity to local tastes, since all are aware of their rarity. Their attractiveness would be in appreciation rather than purchasing power stability alone.

Items of rarity, precious metals included, are those that are not expected to be readily available in the future in quantity. They are those for which current and expected future supply of equals or substitutes is small or non existent. Of necessity, these would be antique items, art works of limited production (i.e. after the artist's death), or precious metals, which have a large above ground stock that is little changed by new production. The economic significance of placing savings in these forms is in the restraint of consumption of currently produced goods. The inputs that would have been needed for the production of the consumer goods that were not consumed through this action of savings in rare tradables, are free for creation of the capital needed for future production of goods and services. The entrepreneur can only respond to consumer choices (both current and those the entrepreneur expects in the future) of what products to provide for in current investment and to the degree consumers will decide not to consume in near term future output is the sum total resource the entrepreneurs have available for investment.

When one puts funds into a savings account, though he refrains from consumption, the bank loans out what is on deposit (and then some) to both consumers and entrepreneurs. Thus, savings in banks are substantially less effective in removing demand for consumption than savings in rare goods. Quite simply, the "savings accounts" are not savings at all, they are investments � and poor investments at that. The condition for bank accounts to be an effective means of physical savings is that of limited money; where moneys for settlement among banks are limited because of the lack of a "lender of last resort", and bank lending volumes expand at the rate of growth in the stock of the monetary metals and rare tradables, which in turn grow with productivity. Under these conditions, known as "free banking" (no central monetary authority or regulatory body and free-market money � precious metal money), the savings of one do not become the spending of another, but become the investment of an entrepreneur.

Saving in currency accounts would be a good alternative to storing the necessities of the future even if a loss of purchasing power is expected so long as the costs of storage, loss, and spoilage are greater than the perceived or expected net loss from currency depreciation less interest received. Contrary to savings in gold that tend to appreciate during a lifetime in purchasing power of common goods, and thus store purchasing power effectively, savings in fiduciary gold suffer the loss of the whole or great part of the balance if placed in the wrong bank. This was the reason for banks trying their best to make a show of stability and conservative philosophy by constructing elaborate banking facilities, dressing in "bankers stripes" etc.. Savers are not looking for a return on their investment as an entrepreneur would, they are looking to a return of most of their principal � their savings of purchasing power � not for the purpose of gain, but for the purpose of conservation.

For this reason, for a saver at a bank or at a fund holding bank liabilities, the guarantee of availability of the deposits has a value as well. The saver is willing to forgo that portion of the depreciation of currency not covered by interest returns for the purpose of avoiding the costs of storage and spoilage or the unlikely but very frightening prospect of having his gold lost or stolen, or discovering his gold was fake. Thus the saver in the old world of gold banking was only depositing for convenience and safety, which banks � being entrepreneurial in nature � just would not provide. After facing this truth one too many times, a perceived safety was found in a guarantee of deposits by government, even if the deposits were no longer gold. The current saver will go to the bank expecting a complete nominal recovery of all deposits and a partial or complete recovery of purchasing power loss by interest payments accruing on his balances. He will tolerate the net loss of purchasing power to the point of these losses being perceived to be greater than the costs of storage and spoilage, but will go into savings in gold and other tradables only once they have established a clear upward trend in currency price.

Thus the spoilage and storage loss rate, SSR, is the value of the government guarantee of bank balances, because that is the cost of the alternative. Though I don't know this to be a fact, I think SSR is commonly on the same order as IR, perhaps even very close. In this case then, the savings depositor's interest expectation IND would be IND => FX - SSR ~= FX - IR.

Thus banks would provide an interest rate => FX � IR and government securities, which are a less convenient alternative to banking, would be bid for whenever INT => FX � IR. Thus government would not be willing, and would not be required by the markets to pay more than FX � IR in interest, so INT <= FX - IR.

Banks will not provide a depositor of savings with a rate higher than INT, because the purchase of government securities is necessary to provide assets that are salable to the central bank, which until recently were only direct government obligations. The inclusion of debt of government sponsored enterprises has expanded the range of paper accepted by the central bank for currency reserve creation, but the mortgage backed paper includes some degree of nominal principal risk.

Investment is the entrepreneurial activity of collecting current resources for the construction of plant, research, design, and organization for production of future goods and services. The rate of investment returns must be higher than the discount rate for future goods over current goods. If the investment were not to provide this extra return, then the resources used in construction of equipment and organization were wasted, and the entrepreneur would have generated a net loss.

The financial investor is one who has accumulated resources as savings and seeks speculative gain by partnering with an entrepreneur seeking resources to invest in a venture that appears profitable. Meaning that the discounted value of expected future production less resources consumed in process would be greater than the resources invested. The future production profit would be discounted because of the natural discount of originary interest. The venture must be expected to provide a higher REAL rate of return than that of originary interest. The method of partnering with the entrepreneur is either through loan or through equity � a sharing of a proportion of future business returns without specification of particular quantities. A loan provides a particular return without a specified proportion of the business� profit.

Though the financial investor and the entrepreneur may have chance to meet (and in the internet age they are much more likely to do so) there is an equity and bond exchange where investor and entrepreneur would both go to exchange the resources of the investor and the opportunity provided by the entrepreneur. Since both are unlikely to know much about each other, the exchange is populated by investment bankers who will broker between the investor and the entrepreneur for a share in the profits of the two (in the internet age, some aspects of broking are substantially less valuable as information provided by investment analysts may be used directly without any broker intermediation at all, the current high broking fees are a result of the legal structures of the exchanges which force investors in the initial offer of equity or debt to go to the broker, and the same goes for the entrepreneur. In the future, this legal restriction is likely to be lifted and the many competent analytical services and investment relations services will sell their wares directly to the investor and the entrepreneur rather than be confined within investment banks that have been given gate-keeping privileges by government and have exacted an artificially inflated toll on all who wish to pass into the exchange).

In business returns we see the difference between future price of business output and the future price of business inputs as the source of future profit which is discounted by the investor for the purpose of making the decision of investment. Recognizing that expected returns will differ widely, we can still use a representative business rate of return in REAL and monetary terms, and state for a continuous business "m":
BRRXm = sum over time[(FPRXout(t)-FPRXin(t))/(1 + IR)^t] / [SPRcap + FPRXin(to)]
FPRXout(t)= sum of products of expected future output price times expected output volume for each output (X denoting an expected future price, R denoting REAL prices in terms of present goods)
FPRXin(t) = sum of products of expected future input price times expected input volume for each input (X denoting an expected future price, R denoting REAL prices in terms of present goods, and including interest expense and foregone income from alternative occupation)
SPRcap = sum of products of capital goods price times capital volume for each capital item (R denoting REAL prices in terms of present goods, capital items being both goods and services)
FPRXin(to) = sum of initial inputs (price and volume multiples as above) needed at the future time, "to", at which operations begin
BRRXm = the business rate of return for venture "m"

Examining this in a one time interval that assumes consumed capital was invested and the residual capital perhaps sold, but in this case being ignored, and assuming that all inputs and outputs are contracted for future delivery (since more is sold than is purchased on the future contract exchanges and over the counter, this should result in a wash regarding the interest rate benefit and the fees, and for a high profit margin business it should surely be a net positive) � this being a substantial simplification, we have:

BRRm= (FPRout(t) � FPRin(t))/(1 + IR) / SPRCcap
(C being used in SPRCcap to signify consumed capital)
(FPRout(t) � FPRin(t)) / SPRCcap would then be the REAL internal rate of return on capital of the business, RROCm.
Substituting the nominal to real relationships in similar fashion to that done above:
SPRcap = SPNcap/ SPN
FPRout(t)= FPNout(t) / SPNX(t)
FPRin(t)= FPNin(t) / SPNX(t)
BRNm = BRRm + FX (nominal return of business)
We obtain:
BRNm = FX + (FPNout(t) � FPNin(t)) / (1 + IR) / SPNCcap / (1 + FX)

(FPNout(t) � FPNin(t))/ SPNCcap is the nominal equivalent of the internal rate of return on capital
Using the standard futures model within this value we have:
(SPNout �SPNin) * (1 + INT) / SPNCcap
And we can then use a net equivalent to business returns of
NROCm = (SPNout �SPNin) / SPNCcap

For small nominal values of FX and IR we have a few approximations at our disposal: 1-X ~= 1/(1+X) and (1+X)*(1+Y)~=(1+X+Y) for small X and Y (1-X would be about 1% higher than 1/(1+X), and the error on the second expression would be about �1% when using numbers on the order of those we would use here, and both errors should mitigate against each other)
Thus we have:
BRNm = FX +NROCm * (1+INT � FX � IR)
Substituting INT = FX � IR:

BRNm = FX + NROCm * (1 - 2 * IR)

Currency savings would move to investment if the expected return, BRNXm, is greater than bank nominal interest rate for depositors and expected business risk BSKXm so long as there are savers turning into investors and have not yet allocated as much as they are willing to investment. We used bank interest as being slightly higher than treasury interest, INT = FX - IR:
Equity investors will buy stock so long as BRNXm => FX � IR + BSKXm (Note that because of varying tax rates on capital gains and interest, while this relationship holds for tax free pension and IRA/401k accounts, it is different for a taxable account: BRNXm * (1-TaxCG) => (FX � IR + BSKXm) * (1-TaxInc), which at current rates would be about BRNXm => 0.6 * (FX � IR + BSKXm), thus taxable accounts would price stock higher than non-taxable accounts)
Businesses will prefer to sell stock so long as the stock market's assumed return, BRNXm is higher than their own "risk adjusted" expectation (presumably closer to reality) BRNm, and will prefer to borrow and perhaps buy back stock while the market's assumed return is lower than their own expectations. (Because of the odd tax treatment and accounting treatment differential on stock options, businesses can save on wage expenses by selling stock to employees, while buying the stock back on the market to maintain the stock price and report only the effects of dilution on their share capital's portion of earnings, and then borrow or use cash flow to purchase back stock sold by the employees some 4 years after options were granted. This has the effect of employees lending the company a portion of their wages for the common 4 year vesting period.)

Business will expand by borrowing if, BRNm > INC�, and therefore when BRNm > FX + IR + DRX
FX + NROCm * (1 - 2 * IR) > FX + IR + DRX
NROCm * (1 - 2 * IR) > IR + DRX
NROCm > IR +DRX

Low borrowing conditions:
Equity financing is preferable for business (it does not mean that new borrowing stops) when:
BRNXm > FX � IR + BSKXm (condition for funds flowing from bank savings to equities)
BRNXm > BRNm = FX + NROCm * (1 - 2 * IR) (condition for business preference for equity sale rather than debt financing for new business)
And:
BRNXm > FX � IR + BSKXm > BRNm = FX + NROCm * (1 - 2 * IR)
Or simplified to:
� IR + BSKXm > NROCm * (1 - 2 * IR)
or:
(BSKXm �IR) / (1 - 2 * IR) > NROCm
Since business would have greater flexibility as to borrowing under these circumstances, then banks would be faced with a buyer's market for the loans they sell.
BRNm > FX + IR + DRX, and NROCm > IR +DRX
So:
(BSKXm �IR) / (1 - 2 * IR) > NROCm > IR + DRX
That simplifies to:
BSKXm > 2*IR +DRX
Which is the conclusion that equity risk estimates are greater than debt market risk estimates. Under the conditions assumed, this is the case for high market valuations. Under these conditions, the market for equity financing is not directly responsive to the currency depreciation rate for estimating business risk for public companies.

Congress has tried, very successfully, to make conditions for high equity valuations as strong as possible. First is the ESOP accounting method that hides from the investor the effects of employee wage expenditure met with stock option issuance. Corporations that had been saddled with unfounded pension plans now run a surplus which allows them to remove people near retirement from the full-time full benefit payroll to pensioners on a much reduced part time compensation, cutting costs by 30-50%. The driver for this has been the dual rise in bond and stock returns over the 1981-1999 period. Pension liabilities have fallen from a net draw on corporate finance to a net positive. Many corporations are attempting to move away from the pension system to "cash balance" programs and 401K plans that have a defined contribution rather than a defined benefit, thus eliminating future retirement obligations from corporate books. Once the transition from unfunded pensions to funded pensions was made, i.e. empty promises were replaced by actual holdings, the cost to employers of continuing traditional pension plans was simply too high. Thus the mass exodus of employers from this type of retirement benefit plan, particularly now that future income is threatened. The tax differential between income and capital gains was meant to make future capital gains seem more attractive to taxable investors while letting some very well off current holders of stocks out of their positions at a reduced tax cost. The current tax treatment allows capital gains (at a tax rate of TaxCG) a much better after tax return than income investment (at a tax rate of TaxInc):
BRNXm * (1-TaxCG) => (FX � IR + BSKXm) * (1-TaxInc),
BRNXm => (FX � IR + BSKXm) * (1-TaxInc) / (1-TaxCG),

Plugging in current tax rates, we have (1-TaxInc) / (1-TaxCG) = 0.6 to 0.7
Thus
BRNXm => (FX � IR + BSKXm) * 0.6, and
(FX � IR + BSKXm) * 0.6 > BRNm
(FX � IR + BSKXm) * 0.6 > FX + NROCm * (1 - 2 * IR)
BSKXm > 0.66*FX + 2.66*IR +DRX, instead of BSKXm > 2*IR +DRX, thus indicating that a direct sensitivity to currency depreciation has been introduced into the relationship, and that the difference between bond market and equity market risk estimates has grown from 2*IR to 0.66*FX + 2.66*IR.

This being a mathematical derivation, it does not indicate whether DRX or BSKX have changed as a result of the tax preference, nor whether FX or IR have been affected, and for that matter, this does not yet tell us of the change in BRN or NROC that has occurred as a result. We know, however, that the result should be a strong change in the portfolio allocations of taxable relative to non-taxable portfolios so that taxed portfolios would be much heavier in equity than non-taxed portfolios such as retirement plans and foreign investors.

The conclusions are confirmed by the Flow of Funds reports. Indeed, the portion of corporate financing coming from stock sales (other than ESOPs) is falling relative to debt, which is rising. Over half the new debt of corporations is used to buy back stock. A phenomenon that has gathered strength throughout the bull market of the 1990s. Another item related to this distortion is that tax free institutional investors are selling stock and buying debt securities. This is less prominent, however, with foreign investors at the moment, who are investing more heavily in equities and through direct investment in production plants and real estate. Also interesting is the fact that when companies formerly favored by the markets fall in price, thus eliminating the practicability of ESOP as compensation (employees lose confidence over time as the stock does not perform), they suffer greatly and trade at a P/E multiple in the single digits. This is a result of their stock price performance having eliminated the next year's ESOP derived cash flow and the company trading as an operating business rather than "just" a stock. The corporations with rising stock prices are expected to enjoy substantial contributions from their ESOPs and therefore trade as the sum of values as a running business and a stock with an ESOP pump that feeds the previous year's stock appreciation into the next year's cash flow and earnings.

I've got an idea for the design of the new Amero! It should feature a picture of The Joker from the old Batman series!
Then we can call them Ceasar Ameros...(silence)...get it?...Ceasar...Romero?..played the joker?
OK, I'll shut up and go back to lurking.
simply me

Palladium falls on Russian export fears
- Friday, August 4, 2000
Palladium fell more than 7 per cent yesterday, erasing two-thirds of the gains made during a week-long rally, on speculation that Russia, the world's largest producer, will resume exports to Japan. Deliveries to Japan, the No. 2 importer of the metal, which is used in automobiles and electronics, probably will begin in September or October, Russian news agency Interfax reported. With prices more than double year-ago levels and reaching a record yesterday, Russia and Japan probably are close to reaching a new supply agreement after five weeks of talks, buyers said. Russia hasn't shipped any metal since early July, when supply talks began with Japanese importers, traders said. Last year, Japan accounted for about one-third of global demand for the metal, which is used to make the catalytic converters that remove pollutants from auto exhaust. Prices have quadrupled over the past three years as disruptions of exports from Russia reduced supplies at a time of growing demand from automakers. Palladium could resume its rally after a brief decline, some traders said. Sugar rose for a second day, topping 11 cents (U.S.) a pound for the first time in 2� years, on speculation that Brazil, the world's top grower, has less available to export than had been expected. Brazil's government yesterday lowered the ethanol content in gasoline to 22 per cent from 24 per cent, citing reduced output of sugar, which is used to make ethanol. Brazil said in May it expects sugar exports to drop by more than half this year to less than six million tons. Brazil had already cut its sugar exports this year through June by 64 per cent from a year earlier, as more of its output was used to make ethanol. In May, Brazil's agriculture minister said total sugar production from the crop being harvested would fall to 14 million tons, down 29 per cent from last year's 19.6 million. Exports last year totaled 12.1 million tons.
Crude oil rose for a third straight session, as an unexpected inventory decline raised concern that U.S. refiners will have less oil to process for the winter heating season. Oil supplies posted their biggest drop in six months as imports plunged 20 per cent to eight million barrels a day, an industry report Tuesday showed. That prompted concern that inventories 13 per cent below year-ago levels may not be replenished in time to meet the surge in demand for heating oil this winter.

Black Blade: More cries of "WOLF!" Nothing has changed. Every time the price of PGMs rises, the parrots are trotted out before the media, claiming "all is well!" and "Shipments will resume!" This has gone on for over a year now. It is truly amazing how gullible the media and some traders are. Expect PGM prices to resume their climb.

GM seeks to reduce palladium, platinum needs
RAYONG, Thailand, Aug 3 (Reuters) - General Motors Corp, the world's largest automaker, said on Thursday it was investigating ways of reducing the palladium and platinum content of its car catalysts amid a surge in the price of the two metals. "Yes, our manufacturers are going to reduce the loading of precious metals in the catalyst,'' GM Chairman Jack Smith said at a news conference in Thailand to mark the official opening of a new plant. ``I think you will see a great deal of effort to reduce...the loading in the catalyst through technological improvement,'' Smith said. ``Secondly there will be very effective programmes to reclaim used catalysts to allow us to reduce (use of) the metals. Both strategies are important to reduce the reliance on sources in Russia and South Africa.'' Palladium, used in car catalysts to cleanse noxious gases, surged to a new all-time high this week. Platinum, used in jewellery but also in catalysts and electronics, reached 12-year highs. Stricter emission control standards globally will boost demand over the next few years, although car makers are scrambling for substitutes, particularly for palladium, whose price has risen from just $120 an ounce in 1997.

Black Blade: Should be a neat trick. They have been trying to come up with a new technology for years. It is beginning to look more and more like fuel-cell technology may be on track. That will only add pressure to PGMs going forward. As far as recycling PGMs from old catalysts, there is nothing new here. Recycling of old catalysts for recovery of PGMs is a standard operation in every junkyard in the US. Refiners have made a booming business from recycling catalytic converters. Ho-Hum.

BTW, Pt and Pd are clawing back from yesterday's losses and reality sets in. The so-called "Future Deliveries" haven't materialized. Both metals are up +$7.00.

Good work, + others on this forum. enjoy all.

oil will break the dollars back, then gold will run.

Many thanks for your writings.

My take is that the Government "take", is way way out of proportion to their theatrical production value, and that Batra is right, we have slim "progress" going on here

Uncle Sam you have killed us.

The strivings of Humanity for simple existance has now been compomised such that the level of risk is an abomination and blasphemy.

Everyone should know now that when the Gamemaster show ringmasters squeal "Lets make a Deal" that behind

Door no. 1........Depression - Imoverishment
Door no. 2........Severe civil-unrest - Civil War
Door no. 3.........Dictatorship - Despotism

You bet!! I won the lottery the other day and then bought the half-million in gold and tomorrow I'm going to flap my wings and fly to the moon.

Thanks for wishing!!

Watch employment report out soon.

Something up ! Only a fund would sell into a hole. good time to cover hedges.

support in dec at 277.40 and yesterdays low 278.50 Breakout back at 284. which did not hold , I missed boat but will hang on.

Sources: Reuters and Bridge NewsTHE AMERICAN FRONT:

NY Precious Metals Review: Palladium, platinum, tumble

New York--Aug. 3--NYMEX platinum and palladium futures tumbled Thursday on profit-taking amid news that Russia's Norilsk Nickel has been steadily exporting the two metals since March and has also made one-time deliveries to Japanese customers ahead of settling long term contracts. Sep palladium ended down 7.4% at $792.10 per ounce with Oct platinum down 6.7% at $563.5. (Story .2333)

Black Blade: Not enough metal. PGM prices rising in overnight trading. Yesterday, the Russian propaganda ministry made an assault on PGMs and fifth columnists in the speculator ranks fled in panic. Strong hands are consolidating in overnight trading.

THE ASIAN FRONT:

Asia Precious Metals Review: Gold stabilizes on physical demand

Tokyo--Aug. 4--Physical demand stabilized the price of gold in Asia Friday after an overnight fall in the U.S. market, dealers said. Platinum and palladium also firmed up in the Asian spot market despite lower prices on the Tokyo Commodity Exchange (TOCOM), where the two metals futures fell sharply following overnight NYMEX price falls, dealers said. (Story .2200)

Black Blade: Tactical retreat? Battle lines consolidating on the Asian Front.

THE WESTERN FRONT:

Gold slumps, looks vulnerable to further selling
08/04/00

LONDON, Aug 4 (Reuters) - Gold slumped on Friday morning after being sold overnight in New York on the continuing strength of the U.S. dollar against other currencies, dealers said. Gold fixed at $273.30 a troy ounce in London at the morning fix, down from $275.50 on Thursday afternoon. Spot was indicated at $272.90/$273.40 at 1011GMT from $273.70/$274.80 at its previous New York close. ``Gold has reached a critical level and the fact that it failed to move higher in the last few weeks despite the bullish chart technical picture could result in a general sentiment turnaround,'' Frederic Panizzutti at MKS Finance in Geneva said, adding that breaks through $272.00 and $270.00 could spark large waves of selling. Other dealers said the fall of the platinum group metals from record highs on Thursday affected sentiment in gold. "When the ballistic platinum and palladium markets turned lower yesterday the rug was pulled out from under the gold market. Prices now look set to test support at $271.50, and below that the next key support level is the May low of $269.10,'' broker GNI said in its daily report to clients. Platinum and palladium showed signs of consolidating at current levels, as the market is still unsure about Russian exports despite reassurances that metal would be delivered to Japan in September or October. Spot platinum was indicated at $568.00/$578.00 at 1021 GMT from $566.00/$576.00 while palladium was at $790.00/$805.00 from $787.00/$802.00. Silver was quietly unchanged at $4.95/$4.97 on Thursday morning. ((Samantha Shields, London Newsroom, +44 (0)20 7542 8071, fax +44 (0)20 7542 8077, london.commodities.desk+reuters.com))

Black Blade: Fire sale at a PM dealer near you! "Buy Cheap!, Sell Dear"- Witch of Wall Street. Sounds like a plan.

Meanwhile, S&P Futures up +3.50. Fair Value up +3.42 indicating a moderately positive open on Wall Street. This can change when the July unemployment numbers are released in about 30 minutes. A drop in unemployment to 3.8% or lower could cause a tumble at the NY open. Oil is up $0.37 at $29.03/bbl on supply concerns, especially concerning very low inventories of heating oil. California fries and the Gov. asks for investigations into price-gouging, hmmmm�, isn't this the state that says no drilling for oil off Santa Barbara!, no drilling for NG in the valleys!, no building of power plants as it "offends the eyes", and yet, they wonder why their power bills are higher and they have rolling blackouts. What a strange people that live in California. Au is down -$1.00 at $272.00, Ag unchanged at $4.94, Pt now up only +$2.00 at $563.00, and Pd up $7.00 at $790.00.

Thanks and a comment.......I appreciate the time you took to respond to my question. Time is a precious commodity!

Comment: I think the idea of quoting pan-European equities in dollars on a pan-European exchange is patently absurd. If this came about, they'd be tossing in the towel on the Euro wouldn't they? Talk about loss of sovereignty!! If anything, I suspect the unease about the Euro, particularly in Germany, is sending a message, either sent intentionally or unintentionally, to ECB bureaucrats. I still find it curious that the ECB has not intervened on behalf of the Euro.

Hope you're right about POG. Since I don't have the time or stomach for gambling in the US markets at this time and believe shorting the dollar is a very prudent rationalization, that is where I'm at. Have a good weekend Sir Knight....CM

Thanks for the voluminous contributions. My you have been prolific of late! The mathematical concepts and acronyms have my head spinning. Perhaps someone can put together a quick reference List of what each one means so we can refer to it as we read. I find that as I follow the discussion, I forget what the ones defined earlier mean...early altzheimers I suppose.

Ceaser Amero's! ROTLMAO
Joker's image extremely appropriate. You were in rare form last night. Hope you slept well.

Source: Business DayPrice increases blamed on uncertainty of Russian metal availability
PALLADIUM prices continued their upward movement yesterday, fixing at a record high of $855 in London, from Tuesday's $835. In New York platinum ended at $611,00, $22 dollar higher than Tuesday's close. Analysts predict the trend to continue, saying prices of between 1000/oz and $1200/oz are realistic in the next few months, although it is difficult to predict the peaks. Analysts blame the successive price increases on uncertainty over the availability of Russian palladium supplies and the costs of borrowing.
"Since Russia is able to derive increased revenue from its oil, as the price of crude has risen, they feel little pressure to sell more palladium." Oil was 2,41% higher at $28,46 a barrel yesterday. Metal analysts say there is talk of Russia freeing some of its supply in September, which would increase liquidity and ease the prices. The share prices of SA platinum producers rallied as platinum prices went through the roof this week, fixing at $588/oz in London yesterday. Anglo American Platinum's (Amplats's) share price rose 6,48% yesterday, closing at R227. Impala Platinum's (Implats's) share price also jumped 4,76% to close at R286. Analysts say while higher prices are good in the short term, they may be problematic in the long term. "Higher prices are a demand deterrent," said one dealer. Some disagree, saying availability, not price, is the driving factor behind demand. There is concern that high prices could spur demand for substitutes in the motor catalyst industry and damage the jewellery trade. Ross Norman of TheBullionDesk.com said if platinum prices continued to increase, the jewellery market could "switch off" in Japan. Local analysts disagree, saying jewellery demand is more a function of the economic health of countries like Japan, not only of spot prices. Talk that Amplats and Implats are unable to boost shipments in the short term has led to further fears of shortages. Amplats says it will increase its capacity 75% over six years, but there is a lead time before this feeds into the supply chain. Norman says if the platinum price rises to the $633/oz resistance level (last reached in August 1987), it could encourage long-positioned Japanese investors to take profit. The spot price has already risen from $470/oz to $612/oz in just more than three months, so there may be a chance of this happening soon

Black Blade: $1200/oz Pt? Maybe. Weak hands in Japan closed out at $630 yesterday. PGMs rising again today, Pt up $5.00, and Pd up +$19.00

reality sets in and we're off to the races!

long bond backs away from 99/28.....so far anyway
US$ backs away from 111-112 range....so far anyway
Dow backs away from 10,800ish declining resistance form bearish diamond formation (weekly chart)
gold backs away from support dec-277....so far anyway
......maybe August won't be so boring after all.

Wolavka.....don't give up!
ORO.....I'm sitting here with springs & gears & pulleys & bolts all hanging out the side of my head, oil dripping everywhere.........major over exstention of..of compre.hen.sion ca.pa...ci......ty.....($&#*&$)*&#^%)^
thanks that was a great offering, at least I'll have the weekend to reconstruct my internal hard drive LOL

A local numismatic club recently had members take a handful of the "New Dollar" coins out to the mall in an attempt to run an informal survey of what the general public actually thought of the coins.

Of 125 people surveyed, 96 thought the coins were actually being made of GOLD !!!! When questioned why they thought so, all invariably referred to the "Gold Dollar" campaign put on by the U.S. Mint.

With even the Vice President referring to them as "Gold Dollars", is it any wonder that the public continues to be "desensitized" to the thought of REAL GOLD as an investment vehicle ?

Or was this just another piece of "the plan" ?

Makes you wonder, eh ?

Looks like a good day to go fishing, soak in some rays, and down some Anchor Steam ale. Other metals are comatose. Maybe tomorrow.

Doesn't look like a lot of action in the PM trades this morning. Pd making a comeback and other metals are on life support. Gone fishing, besides found a couple of sixpacks of Moose Drool, and a sixpack of Scape Goat. Got priorities ya know ;-)

http://www.usagold.com/Order_Form.html8/4/00
�Current
�Change
Gold Spot(Indication)
273.10
-0.40
Silver Spot (Indication)
4.96
-0.02
30 Yr TBond Sept CBOT
99~09
-0~03
Dollar Index June NYBOT
110.75
-0.05


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(8/4/00) www.USAGOLD.com Daily Market Report . . Yesterday's
drop in gold price (as well as the trend's vindication which
followed in London) was blamed variously on heavy fund selling, a
technical break below the $275 level which encouraged tailgate
selling, the strong and seemingly irrepressible dollar, and hopes
for a positive employment report (meaning, of course, we have more
unemployed workers this month than we had last month). "It (yellow
metal) had to make a move sooner or later'so the specs started to
sell it down in London after lunch," one dealer told Reuters. One
wonders what those traders had for lunch that so changed their
outlook on the gold price. As it is, we would call all of this so
much fussing over nothing, and put the blame squarely where it
belongs --on the summer doldrums, a time of year when thin markets
can be moved in either direction with just the slightest push. The
most redeeming news came from Standard Bank which dabbed a little
salve on the wound by saying the break below $275 "attracted a
considerable amount of short covering." So there you have it: A
little shove starts the rock down the hill but not so speedily
that one could not catch it. Ah, the blessings of a thin
summertime gold market. Seems. . . there ain't no cure for the
summertime blues. Unless of course, you have a short position you
must cover, or you are a gold buyer (I mean the real thing) -- in
which case these prices look very attractive on the long term
charts. As we have said in the past, these summertime troughs can
look pretty attractive in retrospect. The price has been known to
recover just as the heat moves on and the leaves start to turn.

FLASH!! The employment numbers are now out and it appears that we
somehow both gained and lost workers during July. The federal
government sent a dogged and determined census crew home but the
private sector added jobs. We'll let the market sort this one out,
but at the outset, it does not appear that this is particularly
good news with respect to interest rates. Temps being put on ice
does not seem likely to translate to an sort of lasting trend. It
is not likely that the Fed will read this report and internalize
the notion that this hot economy has somehow cooled off.

The hot, sultry August could very well get even hotter and more
sultry before its gets cooler.

That's it for today, fellow goldmeisters. We'll see you here
tomorrow.

Please note that we have changed our daily gold pricing to reflect
indicated spot prices on gold and silver at the request of several
readers.

An Invitation:

If you like the type of analysis you just read, you might find our
newsletter interesting. The August issue of News & Views:
Forecasts, Commentary & Analysis on the Economy and
Precious Metals, reveals some very interesting statistical
information on the worldwide gold derivative position and offers
the outlook for gold from several analysts.

Short & Sweet opens this month as follows:

"Now that gold has successfully navigated the July doldrums,
what do we have to look forward to? How does a price of $2500
per ounce sound? That's the number Leigh Goehring of Prudential
Investments dropped in a Forbes magazine interview in mid-July.
His reasoning echoes themes developed in this newsletter last
month: "I am a raging bull when it comes to gold," he declares.
"In times of inflation, people always end up just gravitating to
it. . . The period where the U.S. economy could expand without
fear of inflation is quickly coming to an end."

For those unfamiliar with our widely circulated newsletter, a few
words of description are in order. It's publication is greatly
anticipated each month as it probably provides the best summary on
gold news and opinion available today. The Short & Sweet format
mentioned above offers gold events in a rapid fire, no-nonsense,
bullet format designed for busy people who want gold related news
and opinion without the unnecessary fluff. Appropriate charts,
tables and graphs are also published to better summarize the
information. We also offer the clever political and financial
cartoons of the award winning Ed Stein of the Rocky Mountain News.
News & Views is a private letter offered free to our current and
prospective clientele.

Along with the latest issue of News & Views, you will receive our
Gold Almanac 2000 which offers fundamental background on the
yellow metal. The theme of this year's Almanac is wealth
preservation and one of the key articles is how those in the
1970s -- a decade many are comparing to the present -- not only
survived double digit inflation, but prospered. The packet is
offered at no cost or obligation.

You can call Marie at 1-800-869-5115 to request the
newsletter and Almanac or click above.

meats
grains
oil
gold now starting to move,

If yes, it seems very few have - r.s.v.p. - responded to this generous offer. In view of GS partners cashing in their chips, I feel that, maybe only the insiders were invited to begin with, while those in dire need of some physical may be
vacationing somewhere else on the boon of the latest (final?)strenght of the US pa(u)per, though taking their gold (credit) card along.
Have a great vacation - it may be a while before you can afford another like it - cb2

Some of the Hobbits have been thinking that SIR ORO's "Postings" should be placed in a separate archive as it appears that he continues to write his book at the TableRound. THAT is great STUFF, SIR ORO ! All the Hobbits have to do now is read slowly and try to catch up with your thinking !
-- NAW -- Keep him tied to the TableRound and keep him in paper, quills and ink.
<;-)

Not that I've expressed similar suggestions before, though I forgot to add a PS and thanks to ORO for the liberal helpings for a weekend's contemplation. Again thank you Sir for your efforts - cb2

waiting on grains and gold.

A friend was telling me about an interesting person he met a couple weeks ago.
He was a Caucasian man in his 40's that spoke very fluent Vietnamese, Chinese,
Korean, Japanese, German, English, Arabic, and probably other languages as
well- an extremely intelligent person with a lot of knowledge of history,
geopolitics, etc. He called himself Albert, though this might have been an alias-
the man turned out to be a con artist of sorts in the end.

They (my friend and this man) met several native Asians which 'Albert' spoke
to in some of the above languages. He also read and translated several articles
for my friend during the course of their travels. It became apparent 'Albert'
knew a great deal about daily life and culture in Asia, 1960's North Vietnam in
particular, so this part of his story (living in NVN in the 1960's) was possibly
valid. (The con involved transferring cash from my friend's pocket to Albert's,
as usual.) He carried several well-worn travel bags with him, containing all
sorts of papers, articles, coins and mementos from Asia, Europe, etc.

One of the articles came from a Chinese-language newspaper, published in
either Singapore, Shanghai, or Hong Kong- I can't remember which. At any rate,
it is a well-known, globally circulated paper with regional editions, such as NE US,
US west coast, etc., backed in some fashion by communist China. There are two
sections, a world and regional news section and an entertainment section.

'Albert' had a clipping from a few weeks prior, perhaps July 2000, from the entertainment
section of this paper. It was a short piece of fluff about vampires and Dracula- a few
words were in English as is common in this paper. Albert was making the claim that
this article contained a very simple code, based on a popular children's game in China.

Each week there is a new article about something silly, buried in the entertainment
section along with the rest of the fluff. What distinguishes the article of interest is
that it always begins with a number rather than a word. Different regional editions
may have different articles like it. The code involves something like counting the
number of characters down (Chinese is read top to bottom, right to left) from the
first number, then writing down the character (or number?) that corresponds to the
count from the first character (the first word, which is a number expressed as a
Chinese character). My friend didn't get the exact gist of the code, but it was
something about continuing to count off characters from each succeeding number
in the little article, which contains several numbers. 'Albert' said that you collect these
articles each week and write down the numbers or characters of interest. From time
to time a decoding article is published.

'Albert' also talked about stashes of AK-47's in the US, Red Army uniforms tucked
away in closets, Chinese nuclear strike plans, an old map from Mao days for partitioning
North America, W-88 knockoffs, the usual stuff like that. He and my friend stopped
at a store for the latest paper, which apparently also had such an article.

Bearing in mind the caveat above, about the con artist, what 'Albert' was saying
is that the articles are now broadcasting a message, something about
"prepare for November".

This may well be 100% bull, I really don't know. 'Albert' is real, some of his stories
are obviously not. Maybe some intelligent person out there in the community would
look into it.

watch dec gold open interest.

First of all, IF a person can not speak or understand most languages, another person can not be determined to be "Fluent" in another language!! One may know "SOME" words and phrases of a language and be able to speak with others in that language, BUT the unenlightened one would not know if the others were discussing the weather or the plot of the year. One should not worry about China planning to overthrow the US as they do not have to do anything as the US is cutting their own wrists, and will "give" China and others everything anyway.
Tis a GREAT Joke though, Turnaround.
<;-)

www.lemetropolecafe.comThe Rape of Russia

by Anne Williamson

from The Laissez Faire City Times, Vol 4, No 31, July 31, 2000

Editor's Note
The following is Anne Williamson's testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999.

It shows how the historic opportunity given the U.S. to help transform Russia into a free, peaceful, pro-Western country was squandered in the form of a bruising economic rape carried out by corrupt Russian politicians and businessmen, assisted by Bush and (especially) Clinton administrations engaged in political payoffs to Wall Street bankers and others, and by childish ineptitude and greed on the part of the U.S. Treasury and the Harvard Institute for International Development, assisted by fellow travelers and manipulators at Nordex, the IMF, the World Bank, and the Federal Reserve.

The losers were the Russian people and (mainly) U.S. tax-payers.

And the winners? Ms. Williamson names names, and that's why the elite media has shut out her book. She indicates their heroes are thieves, and they are afraid she may be right.

�Zola

http://www.zolatimes.com

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

. . . I should like to add just a few words about myself by way of introduction. I am the author of Contagion: The Betrayal of Liberty, Russia, and the United States in the 1990s, which will be available to Committee Members and the American public in time for the nation's Thanksgiving holiday. Prior to beginning my work on the book, I covered just about all things Russian for a broad range of publications which included inter alia The Wall Street Journal, The New York Times, Mother Jones, Art and Antiques, Premiere, Film Comment and SPY Magazine. From the late 1980s until 1997, I maintained homes in both Moscow and the United States. And therefore I can say for much of the last decade I had the privilege of being a witness to a dramatic history and the pleasure and excitement of sharing with the Russian people their remarkable land, language and culture. And it is with a profound gratitude to and a deep respect for that noble, heroic and too long-suffering people that I speak to you today.

In the matter before us � the question of the many billions in capital that fled Russia to Western shores via the Bank of New York and other Western banks � we have had a window thrown open on what the financial affairs of a country without property rights, without banks, without the certainty of contract, without an accountable government or a leadership decent enough to be concerned with the national interest or its own citizens� well-being looks like. It's not a pretty picture, is it? But let there be no mistake, in Russia the West has truly been the author of its own misery. And there is no mistake as to who the victims are, i.e. Western, principally U.S., taxpayers and Russian citizens whose national legacy was stolen only to be squandered and/or invested in Western real estate and equities markets.

The failure to understand where Communism ended and Russia began insured that the Clinton Administration's policy towards Russia would be riddled with error and ultimately ineffective. Two mistakes are key to understanding what went wrong and why.

The first mistake was the West's perception of the elected Russian president, Boris Yeltsin; where American triumphalists saw a great democrat determined to destroy the Communist system for freedom's sake, Soviet history will record a usurper. A usurper's first task is to transform a thin layer of the self-interested rabble into a constituency. Western assistance, IMF lending and the targeted division of national assets are what provided Boris Yeltsin the initial wherewithal to purchase his constituency of ex-Komsomol [Communist Youth League] bank chiefs, who were given the freedom and the mechanisms to plunder their own country in tandem with a resurgent and more economically competent criminal class. The new elite learned everything about the confiscation of wealth, but nothing about its creation. Worse yet, this new elite thrives in the conditions of chaos and eschews the very stability for which the United States so fervently hopes knowing full well, as they do, that stability will severely hamper their ability to obtain outrageous profits. Consequently, Yeltsin's "reform" government was and is doomed to sustain this parasitic political base composed of the banking oligarchy.

Property Rights

The second mistake lay in a profound misunderstanding of Russian culture and in the Harvard Institute of International Development advisers� disregard for the very basis for their own country's success; property rights. It was a very grave error. Private property is not only the most effective instrument of economic organization, it is also the organizational mechanism of an independent civil society. The protection of property, both of individuals� and that of a nation, has justified the existence of and a population's acceptance of the modern state and its public levies.

Russian property rights are tricky; property has never been distributed, but only confiscated and awarded on a cyclical basis. For the big players property exists, as it always has, only where there is power. For the common man, the property right hasn't advanced much beyond custom which prevents the taking of any man's shelter, clothes or tools so long as continuous usage is demonstrable. An additional, purely Slavic feature of the Russians� concept of property is the shared belief that each has a claim upon some part of the whole.

In ancient �Rus, property existed for the individual as a claim - or an entitlement if you will - to a shared asset, a votchina or "estate", held by all the members of a particular clan. This understanding of property still informs the culture; though Westerners bemoan Moscow mayor Yury Lyuzhkov's retention of the system of the residential permit ("propiska") as an impediment to a flexible labor force, the policy is one of Lyuzhkov's most popular. Muscovites are well-satisfied with a mayor who polices outsiders as they believe any proprietor of such a great estate as Moscow should.

The Russians� failure to accept the Roman concept of private property has compelled them to suffer the coercive powers of the state so that at the very least a civil order, if not a civil society, might be established and sustained. The hackneyed idea that Russians have some special longing for tyranny is a pernicious myth. Rather, they share the common human need for predictable event undergirded by civil and state institutions and their difficult history is the result of their struggle to achieve both in the absence of private property. Since only the Tsar or the Party had property, no individual Russian could be sure of long-term usage of anything upon which to create wealth. And it is the poor to whom the property right matters most of all because property is the poor man's ticket into the game of wealth creation. The rich, after all, have their money and their friends to protect their holdings, while the poor must rely upon the law alone.

Connections

In the absence of property, it was access - the opportunity to seek opportunity - and favor in which the Russians began to traffic. The connections one achieved, in turn, became the most essential tools a human being could grasp, employ and, over time, in which he might trade. Where relationships, not laws, are used to define society's boundaries, tribute must be paid. Bribery, extortion and subterfuge have been the inevitable result. What marks the Russian condition in particular is the scale of these activities, which is colossal. Russia, then, is a negotiated culture, the opposite of the openly competitive culture productive markets require.

Ironically, the nontransferability of the votchina system's entitlement was the very flaw a shareholding culture and an equities market could have addressed successfully had Lenin's revolutionary dictum of "Property to the people! Factories to the workers!" been realized. And such a program existed. It was designed by Larisa Piasheva, a free market Russian economist who was appointed by Moscow mayor Gavriil Popov to design and execute a program for the privatization of Moscow's assets. Ms. Piasheva's program was a fearless and rapid plunge into the market which would have distributed property widely into Russia's many eager hands. Further, the program � inspired as it was by the policies of Ludwig Erhard and his adviser, the renowned Austrian economist Wilhelm Roepke - did not rely upon Western lending but instead tailored itself to maximize direct Western investment.

When the Administration says it had no choice but to rely upon the bad actors it did select for American largesse, Congress should recall Larisa Piasheva. How different today's Russia might have been had only the Bush Administration and the many Western advisers from the IMF, the World Bank, the International Finance Corporation, the European Bank for Reconstruction and Development and the Harvard Institute of International Development then on the ground in Moscow chosen to champion Ms. Piasheva's vision of a rapid disbursement of property to the people rather than to the "golden children" of the Soviet nomenklatura.

Instead, after robbing the Russian people of the only capital they had to participate in the new market � the nation's household savings � by freeing prices in what was a monopolistic economy and which delivered a 2500 percent inflation in 1992, America's "brave, young Russian reformers" ginned-up a development theory of "Big Capitalism" based on Karl Marx's mistaken edict that capitalism requires the "primitive accumulation of capital". Big capitalists would appear instantly, they said, and a broadly-based market economy shortly thereafter if only the pockets of pre-selected members of their own ex-Komsomol circle were properly stuffed. Those who hankered for a public reputation were to secure the government perches from which they would pass state assets to their brethren in the nascent business community, happy in the knowledge that they too would be kicked back a significant cut of the swag. The US-led West accommodated the reformers� cockeyed theory by designing a rapid and easily manipulated voucher privatization program that was really only a transfer of title and which was funded with $325 million US taxpayers� dollars.

Vouchers and Vandals

Voucher privatization's conceits were compounded by a grievous insult; unregulated voucher investment funds, which the privatizers encouraged the uncertain Russian citizenry to patronize. Hundreds and hundreds of investment funds simply walked with their clients� vouchers, reselling them to domestic criminals, Red Directors, western investment banks and international money launderers. In other words, the lion's share of Russian money laundering occurs when capital enters the country, and what we see today in the Bank of New York scandal is, in fact, properly understood as capital flight. When the 18 month-long thieves� banquet that voucher privatization was concluded in July 1994, the program, whose very design left the controlling shareholding of any single enterprise in the hands of the state, had actually institutionalized the state as the determinant owner of all that had formerly belonged to "the people".

Co-temporaneously with voucher privatization, an early and precipitous Bush Administration initiative was coming to fruition. In early 1992, the "Bankers Forum" project was wheeled into place by a former New York Fed chief, Gerald Corrigan, who at George Bush's direction sent in a group of experts from the Fed, commercial banks and the Volunteer Corps on an off-the-books mission to teach the Russians at the Central Bank the bond game. Moscow-based Dialog Bank's Peter Derby, who explained the project's background remarked, "Basically, when Corrigan asks, I guess no one turns him down, because people reacted instantaneously. It was done by private investors, who were asked by a person you can't say no to" (my emphases).

The improbable yields (290 percent on 3-month paper at one point) on the Russian market's GKO instruments were paid with US taxpayers� money via IMF loans. Guess where all investment went? By yielding those kind of non-market returns, the bond market insured that all the country's resources and all that it was capable of attracting went to the support of the state, just as Tsarism and Communism had done previously.

So lush were the bond market's rewards that dubious market participants included the Russian Central Bank itself through an off-shore firm known as Fimaco. The involvement of the Harvard Institute of International Development's [HIID] honchos in the same conflict-of-interest activities has already been admitted publicly and remains the object of a Boston Grand Jury's scrutiny. The Harvard Management Corporation[HMC], which invests the university's endowment, was also an avid purchaser of Russian bonds, a dubious and unsettling history since there is no legal separation of HMC and the university itself. According to the Russian Interior Ministry's Department of Organized Crime, Western employees of Russian banks, Western bankers and consultants, Russian bankers and anecdotal evidence, other likely participants include certain employees of the U.S. Treasury, of the multilateral agencies (most especially the World Bank's Moscow offices), of bilateral aid agencies, and policy and program consultants acting through accounts established in their wives� maiden names with non-U.S. reporting brokerages in Moscow. Even the Ford Foundation's Moscow office sponsored its own internal Russian bond shop for which the unthinking Russian managers once asked this reporter to drum up U.S. investors.

Clinton Buys Wall Street

One particularly striking aspect of Bill Clinton's presidency is how aggressively his administration has worked to capture the political support of the financial sector, offering up heretofore unseen gobs of government favor. [A disproportionate number of firms receiving OPIC (Overseas Private Investment Corporation, a government entity) guarantees, Export-Import bank lending, and IFC (International Finance Corporation, the private lending arm of the World Bank) and Russian Enterprise Fund participation were generous contributors to both Clinton campaign coffers and the DNC.] The basic formula was simple, it's not the rocket science Russia's Harvard advisers intimated it was: The bread and butter of all equity markets are bonds. Wall Street wanted a debt market. You build it and we'll come, they said.

The aid program delivered best it could what was in reality a flimsy contrivance, which - in turn - was really only an exotic venue through which to pass public funds to selected Russians of the Clintons� and HIID's choosing and to Wall Street investment banks the Clintons hoped to entice permanently into their orbit of supporters and contributors. In short, the Russian bond market was the Arkansas Development Finance Authority gone international.

Today the Clinton Administration's chief defense for their hand in Russia's ruin is that somebody had to keep the communists at bay. But there were no communists in Russia by late 1991, only nascent investment bankers looking to nail down a stake any which way. Communism had evaporated by late 1987, the year in which the Russian people were allowed to hold convertible foreign currencies. Overnight, the power of money displaced the power of ideology.

The Role of Nordex and FPI

Though some now say the loans-for-shares privatization program marked the reformers� fall from grace, I beg to differ. On 14 September 1991, Vladimir Shcherbakov, the last First Deputy Prime Minister of the Soviet Union, formed with two other partners, one of which was the now notorious Austrian firm, Nordex GmbH, the International Foundation for Privatization and Private Investment [FPI]. FPI's charter was legitimized by Gorbachev's signature and approved by 13 heads of what were still constituent republics.

In an interview published in a 1993 issue of VIP, the vanity organ of the commercialized nomenklatura, Shcherbakov reported excellent relations with the new regime of "eager young reformers" � Gaidar, Chubais et al � and their leader, Boris Yeltsin. All hail-fellows-well-met. So too did FPI enjoy similarly sympathetic connections to the EBRD, the IMF and the UN Industrial Development Organization. Shcherbakov even boasted about FPI's "new approach to the problem of the property of the Western Army Groups in Eastern Germany that comes down to its joint exploitation by Russian and German businesses", an eyepopping admission since a year after the interview was published, the Russian scandal was Bonn's claim that Soviet weaponry sales to rogue regimes originating in the Western Army Group had amounted to a $4 billion criminal take.

A former employee of FPI, speaking through clenched teeth, reported, "It's [FPI] not a well-known organization, but it's one of the most wealthy and most powerful organizations in Russia," and their work was engineering commission-paying deals for money or privilege with the Kremlin, thereby organizing a pipeline of tribute typical of corrupt regimes. "I can't say it publicly, I can't prove my position with documents, but I know they were privatizing companies, the very best companies, before we had a privatization program."

The CIA has determined that through Nordex, FPI seized the export earnings from Russia's natural resource companies � oil, gas, platinum, gold, diamonds � and from industrial firms exporting items such as steel and aluminum and then stashed the hefty profits in Western bank accounts. And only now, eight years almost to the day later, do US taxpayers learn that the "eager, young reformers" to whom their resources were sent for the purpose of building a new Russia were in league from day one with the exhausted Soviet nomenklatura in a scheme to loot Russia's wealth and park it in the West.

Yegor Gaidar still insists, John Lloyd was good enough to remind us in his recent New York Times Sunday Magazine article, that "he had no choice but to let prices rise to increase supply and to scrap trade barriers so that foreign commodities could begin to fill store shelves." v Freeing Prices Without Privitization

Gaidar's assertion is untenable. The Soviet Union was economically self-sufficient except for bananas, coffee and coconuts. Foreign commodities weren't required to fill Soviet shops. And even though the ruble was not convertible, that characteristic had nothing to do with the sudden shortages in late autumn 1991, which were only slightly worse than those normally encountered in the last thin years of Gorbachev's perestroika.

No one had stopped producing, but shops were suddenly nearly empty. Producers had begun hoarding, as had fearful consumers, but why? It wasn't that Yeltsin announced in November 1991 that the government intended to free prices, it's that he also announced the exact date on which prices would be freed. Predictably, producers withheld their product from market and rubbed their hands together like flies awaiting the coming feast which Yeltsin's newly announced policy guaranteed. Within a week of the ill-considered speech, Muscovites� needs were being rationed.

However, Gaidar really was under pressure, but the pressure was coming from the West to open Russia to unrestricted imports in return for multilateral lending. Gaidar soon delivered a trade policy that was 100 percent back-to-front, accommodating as it did the self-serving demands of both the West and Russia's nascent banking oligarchy; Russian manufacturing was to take the brunt of unrestricted foreign competition, but domestic banking was to be protected from competition! Even Russian Central Bank Chairman Viktor Gerashchenko protested, but the Russian bankers were accommodated and the IMF continued lending. So much for the "leverage" foreign policy elites claim foreign assistance programs provide the U.S.

In 1991, there was no hope whatsoever that wheezebag Soviet industries could compete with Western products. For decades, prices were set by Gosplan (State Ministry of Central Planning), any enterprise profits were claimed as Soviet tax revenues, all customer bases were guaranteed and therefore no enterprise had a financial incentive to compete. Without competition, there was never any need to improve quality.

How could freeing prices alone change this equation? Free prices only work to the benefit of consumers when producers compete with one another in the marketplace to satisfy customers� demands, leaving consumers postitioned to reap the most benefit at the lowest price. Clearly, an equitable and transparent privatization that would have delivered property widely to Russia's many eager hands should have preceded the freeing of prices. And during privatization, native producers should have enjoyed some protectionism at least, as did developing American industry and manufacture in the 19th century.

Jeff Sachs Can't Read

Competent advisers would have known Russia never did develop an effective banking sector and system of credit in a 1000 years of her history. The story of Russian banking � ancient and modern � always has the same plot, only the names and the dates change. S.Y. Borovoi's easily obtained history of 18th century banking outlines a typical episode involving a certain "Suterland, who received 2 million pounds for transfer to London, but instead lent the sums to Prince Potyomkin (800,000), Finance Minister Vyazemsky, Foreign Minister Bezborodko and even to the future emperor Pavel. The debt of these honorable people was, according to the custom, forgiven and paid by the state." (My emphasis)

Certainly eager Western banks should have been given admission to Russia. By working initially with more developed and well-capitalized Western banks and later by competing with them, Russian banks could have developed quickly and today be mediating capital responsibly and profitably. No good economic purpose was achieved by foisting subsidized billion dollar loans onto Russia for the purchase of Western consumer goods.

Once the crime of voucher privatization was fully realized, thereafter ensued a years-long highly-criminal and oftentimes murderous scramble for hands-on control of the enterprises. Directors stashed profits abroad, withheld employees� wages and after cash famine set in, used those wages, confiscated profits and state subsidies to "buy" the workers� shares from them. The really good stuff - oil companies, metals plants, telecoms - was distributed to essentially seven individuals, "the oligarchs", on insider auctions whose results were agreed beforehand. Once effective control was established, directors - uncertain themselves of the durability of their claim to the newly-acquired property - chose to asset strip with impunity instead of developing their new holdings.

Unsurprisingly, the entire jury-rigged effort has collapsed in flames. The bond market has gone bust, Russia is crushed by her IMF loan payments, and O Staff ,��1�0ency Departm,br>


JONATHAN LEE, MD#

Staff Physician, Emergency Department



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Hospital Program Coordinator



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Last night I put on CNN (cabal news network ) and they were talking about oil. They said they asked analysts where they saw OIL going. One said he thought it would stay at $28.00 and the other said he could see it going down! Funny, I'm no analyst but I thought it would go higher and I thought of our friend Black Blade! I see today oil is up! Black Blade has something there in doing the opposite of what the analysts say. Don't you just love it!

On another note: Simply Me your idea about the "Joker " Ceasar Romero on the new Ceasar Ameros dollar is great ! Now we need something for the reverse side, hmmm ?
Also what should it be made out of ?

I may have something here, it could have a picture of Pinnochio on the back and be made out of wood! It would be a renewable resource and would be easy to float!

$hifty
:)

no bounce in grains but oil did its' job.

Gold will move off this support so hang on. Dollar is doomed.

http://biz.yahoo.com/rf/000804/n04630310.htmlThere was the Dutch tulip bulbs or yester year...now the 'internet house of cards' ably led by it's flagship Amazon. I'm showing my young ones that they're watching history being written.

"Therefore having done all to stand, stand!"

http://www.zolatimes.com/V4.31/williamson_russia.htmlI liked this one, it is marvelous:

"So who wags the tail of the money dog? Citizens who labor to create wealth for themselves and their families or folks like IMF chief Michel Camdessus, a French socialist and lifetime bureaucrat, and his deputy, Stanley Fischer, WHO TOGETHER ARE QUITE POSSIBLY THE TWO MOST INCOMPETENT PEOPLE ON THE PLANET? Sadly, it appears a once free people are slowly but surely being enserfed to globalism's useless hors d�oeuvres eaters and incompetent lenders."

Thanks Nickel62 for putting us onto the article. She is wonderfully perceptive and well written, I await her book eagerly.

http://www.zolatimes.com/V4.31/williamson_russia.html"... it's really not very surprising that at the end of the century, not quite a century after America instituted the Federal Reserve and thereby began the process that would deliver the power of creating unlimited debt to the political class, the White House is occupied by a couple who share not so much a marriage as they do a collection of felonies."

What a hoot.

I've been running some MACD/RSI charts etc through my system. The not so good news is that from a TA perspective some further price weakness could be in store for gold. G'Bugs no doubt hope that theses signals are convergent although it will present some further accumulation opportunities in that time limited window of opportunity.

http://www.tax-news.com/html/oldnews/st_jbaHeigl_02_08_00.htmUK Envoy To Bahamas Speaks Out In Support Of OECD, by Mandy Robinson,
Tax-news.com, London 2nd August 2000

"If e-commerce and e-trading operations are to go ahead problem-free, amendments to international policy must take place. This is the message from the Bahamas UK Envoy, Peter Heigl. Otherwise gains from criminal activities and money laundering will continue to act as 'haemorrhages on the world's economy � I don't think any of us would want to see success on the basis of crime.' "

I think the actual concern voiced by the UK Envy, is that he does not want to see his country's failure on the basis of state theft through confiscatory taxation.


More from the Sovereign Society:

+ OFFSHORE NEWS +
..............................................................
Caribbean Havens Struggle Post-Blacklist
..............................................................
BRIDGETOWN, Barbados. Columnist TONY SNOW gives a clear picture of
what may face Caribbean tax havens blacklisted by the world's rich
nations. Good story at LINK:
http://www.nationnews.com/StoryView.cfm?Record=4615&Section=Business
=============
ROAD TOWN, BVI. The Royal Virgin Islands Police Force has seized $US35
million from local offshore fraudsters, with help from foreign police.
BVI is cracking down after OECD and FATF blacklist reports. LINK:
http://www.islandsun.com/2000-july/270700/local5-v4i15.html
=============
St JOHNS, Antigua. High official defends the island nation's offshore
business reputation after anti-porno arrest. LINK:
http://www.cananews.com/cbi/businessupdate615.htm
=============
KINGSTOWN, St Vincent. One of 6 suspended offshore banks whose
licenses were revoked by the government's Offshore Authority two weeks
ago, is appealing the decision. LINK:
http://www.cananews.com/cbi/businessupdate621.htm
============
BASSETERRE, St. Kitts & Nevis. The government has named a special
solicitor general in the ministry of finance to strengthen offshore
sector regulation, post-OECD. LINK:
http://www.cananews.com/cbi/businessupdate620.htm
=================
NASSAU, The Bahamas. In a patronizing warning worthy of the the late,
unlamented British raj, the UK ambassador has warned the islands to
clean up their financial act or else. LINK:
http://www.tax-news.com/html/oldnews/st_jbaHeigl_02_08_00.htm
......................................
The Bahamas acting PM says the nation will not tolerate money
laundering, but wont scrap bank secrecy. But lawyers and IBC
incorporators soon may be forced to reveal clients. LINK:
http://www.tax-news.com/html/oldnews/st_jbabostwick_01_08_00.htm
......................................
Prime Minister INGRAHAM and Bahamas opposition playing blame game over
OECD and FATF blacklisting. LINK:
http://www.tax-news.com/html/oldnews/st_jbaingraham_31_07_00.htm
........................................
And the top Bahamas trade official says the local push for offshore
e-commerce is a major reason for blacklisting. LINK:
http://www.tax-news.com/html/oldnews/st_jbaecom_27_07_00.htm
===========================
London Blackmails Belize on Tax Breaks
............................................................
BELMOPAN. Belize has bowed to British government pressure to tighten
change offshore tax breaks in a move that will hit the business
interests of Lord ASHCROFT, the controversial Conservative peer. The
UK government suspended debt relief to Belize to force the issue.
LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT30IJ66BBC&live=true&useoverridetemplate=IXLZHNNP94C

=====================
Panama Government in Trouble
..............................................
PANAMA CITY. A year ago, Panamanians were optimistic after Mireya
MOSCOSO's election as president. Now they are not so certain about her
or the future. LINK:
http://www.journalstar.com/nation?story_id=950&date=20000728&past=
===========================
Financial Times Publishes Offshore Series
.............................................................
In the wake of the OECD and FATF attacks on haven nations, London's
leading financial daily last week published a series of articles about
the UK's own tax havens. (Free FT website registration required for
first time users)
===========================
1) UK tax havens in deep trouble, LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3ZQCY02BC&live=true
2) London wants UK havens to raise taxes. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3HFJXY0BC&live=true
3) UK tax havens risk sanctions or worse. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3BLMXY0BC&live=true
4) Secret "brass plate" business corporations are major concern. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT35OXU02BC&live=true
6) The CITY in London could be big loser if tax havens are forced to
fold. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3PAKOX3BC&live=true
7) Channel Islands & the Isle of Man LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3P5URF2BC&live=true
8) Guernsey stands alone in the face of sanctions. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3XCVJM6BC&live=true
9) Isle of Man sees possible ways out. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT326QTC5BC&live=true
============

http://www.tax-news.com/html/oldnews/st_jbaecom_27_07_00.htm" ...Ian Fair of the Bahamas Financial Services Board who said '"Offshore","tax haven" and "secrecy" are the buzz words words that the world is gripping onto and saying these are why we don't want countries like the Bahamas. But the reality is they have woken up to the fact that the world has become very mobile. The large countries of the world have encouraged this mobility, they have encouraged world trade now, all of a sudden, they realize that their tax base is mobile too and they are very concerned about it.' "

Finally an honest word spoken without doubt.

Knock knock

Anybody home?

You left the door open

Hello?...

Like someone posted earlier, we're, no doubt, awash in the wave of your previous messages.

So it appears that instead of someone "stopping the motor that runs the world", the motor is "shipping out"...an interesting alternative if it can work.

Wondering what you think of Sir Aristotle's idea of physical breaking with contract pricing in the near future.

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3JXC4OGBC&live=true&tagid=ZZZHJ52NA0CGold Fields; Improved profits in the June quarter & still waiting for official permission for its planned $3.7bn all-paper merger with Franco-Nevada...

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

Release Date: August 4, 2000

Rates for Thursday, August 3, 2000

Federal funds 6.45

Treasury constant maturities:
3-month 6.23
10-year 5.95
20-year 6.05
30-year 5.74

upside-down spread FF vs long bond = (0.71%)

You gotta be kidding!!

Everybody's buried in reading your stuff.

I know it takes massive amounts of time to write all that, but even the reading time is getting up there.

BTW while you've been up to your eyeballs in the keyboard did you happen to notice I nominated, and there were the required three seconds, for two of your posts in this past week

Just who are u? I think I speak for many here. Can you tell us anything of yourself, in public? It is understood if you cannot, but inquiring minds want to know!

I am in a unique position with respect to this Forum in that I am probably the only who hears on a regular basis from our lurkers (who number in the thousands but for reasons of their own never post). Let me assure you that you are widely read, are having an effect, and that you have a large following that awaits each and every post. I've stopped counting the number of times one goldmeister or another has called and in the course of a conversation on world politics, economics, and the price and value of gold has remarked "That Oro is something else." -- or something along those lines. Just thought I'd pass that along. . .

http://216.46.231.211/credit.htm
Hey ORO - you da man!


Don't miss this week's credit report from Doug Noland. From the report:

"Not surprisingly, the first wave of defaults is coming from the
junk sector. According to the Los Angeles Times, Moody's
"projects that (junk bond) defaults in the 12 months ending
2001 will total more than 8% of bonds outstanding, up from
5.4% so far this year." So far this year, 65 issues have
defaulted, compared to a record 108 defaults last year. The
previous record was 88 defaults in 1990. "Many recent
defaults stem from a period of easy money in late 1997 and
early 1998, when corporate earnings were strong, foreign
money was pouring into U.S. debt markets, and investors
generally let down their guard," according to analyst John
Lonski at Moody's. In the first quarter of 1998 alone, $30
billion in low-rated bonds were issued. Many junk deals that
shouldn't have been done at all are now coming undone,
Lonski said. `It's payback time,' he said."



"We agree completely with Mr. Lonski - not only will it be
payback time going forward, but it should also be recognized
that the most problematic loans are made during "a period of
easy money." We watched the post 1987 crash "easy money"
period fuel real estate bubbles that culminated with the S&L
and banking crisis of the early 1980s. This led to a historic
"easy money" period in the early 1990s that fostered
unprecedented financial system leverage and the severe credit
market disruption in 1994. This crisis culminated with the
Orange County bankruptcy and Mexican collapse, with the
subsequent Mexican bailout. The next post-crisis period of
easy money - "reliquefication" - fueled the terminal stage of
credit and speculative excess throughout SE Asia, Russia, and
emerging markets generally. The Fed was forced to respond to
this series of inevitable busts by lowering interest rates and
accommodating the greatest period of "easy money" in history
- a virtual unending "reliquefication." Unprecedented
money and credit growth for the past two years has fueled an
economic boom and a massive
technology/Internet/Telecommunications bubble. Moreover,
money and credit excess powered a great asset bubble,
particularly in financial assets and home prices. "

Ah Hell ORO, I'm still muddling through the "House of Lords" post. You might have to slow down a bit, my brain is full ;-)

Those postings of today are VERY deep ! Lots to chew on in there and one can not get distracted in the middle of one, as then one must start all over !!! That one with the formulae is challenging, to say the least.
Take a coffee break ORO !! -- Please !!!
At least until tomorrow.
Oh -- Thanks again.
<;-)

http://www.thebullandbear.com/resource/index1.htmlThe link provides access to a good synopsis of the developing oil crunch. But since oil is excluded from the core rate inflation numbers, I wouldn't be too concerned about it ;-)View Yesterday's Discussion.

http://www.thebullandbear.com/resource/index1.htmlThe link also leads to an interseting analysis of NG in the coming years. But I wouldn't worry about that either, unless I lived in S. California where Utilities are despised and unwanted until a heat wave and blackouts occur. I tend to think of Aesop's fable, "The ant and the Grasshopper", hmmmmm...........

http://www.thebullandbear.com/resource/index1.htmlSays exactly what I've been saying about Pd for over a year now, and especially the so the last few weeks. Also, a little jab at politics vs. energy at the end. Anyway, these articles should provide some good weekend reading and perhaps discussion. Later, an interesting weekend reading assignment about the historical events surrounding the OPEC energy crunch of the 1970's, and we might ask "could it happen again?", and what significance did it have on the economy and PMs.

http:/www.StocksandNews.com
Brian Trumbore
President/Editor, StocksandNews.com
Before there was an OPEC (the Organization of Petroleum Exporting Countries), the great oil companies of the West ruled the roost. Oil is the lifeblood of the industrialized nations. It is used in planes, cars, tanks, skyscrapers, industrial plant, fertilizer, drugs and synthetics. Yet back before the days of OPEC the great oil companies often retained 65% or more of the revenue from a product that was produced on someone else's property. In 1960, many of the oil producing nations, from both the Middle East and elsewhere (like Indonesia and Venezuela) formed a cartel to protect their interests.
The goal of OPEC was to present a common front in negotiations with the giant oil companies, which themselves worked closely together. OPEC set the stage for a new process in which the producer nations would eventually take over the functions of the companies, at least in production, and retain much more of the revenues. But OPEC really had little impact from its founding in 1960 until 1973. Then all hell broke loose.
In 1973 the U.S. and the Western world were in the midst of an inflationary spiral. The world had become highly vulnerable to commodity cartels. Twenty years of prosperity and accelerating population growth had created heavy demand for raw materials. In the U.S., consumer prices were rising at an 8.5% clip. Inflation rates in other nations were often much higher. The demand for Middle Eastern oil had been increasing throughout the industrialized world and the needs of these countries grew far faster than production. OPEC was growing stronger and more determined to increase their share of the profits.
President Nixon, as part of his ill-fated price control program, had slapped controls on oil in March of 1973. The U.S., which had been self sufficient in energy as recently as 1950, was now importing some 35% of its energy needs. U.S. petroleum reserves were nearly gone. Governments, corporations and individuals were entirely unprepared for what would happen next.
On October 6, 1973, the Jewish holy day of Yom Kippur, Egyptian forces attacked Israel from across the Suez Canal while at the same time Syrian troops were flooding the Golan Heights in a total surprise offensive. After early losses, Israeli counterattacks quickly pushed into Syrian territory in the north while troops outflanked the Egyptian army in the south. Israel, with help from the U.S., succeeded in reversing the Arab gains and a cease fire was concluded in November.
On October 17, OPEC struck back against the West by imposing an oil embargo on the U.S. and increasing prices by 70% to America's Western European allies. Overnight, the price of a barrel of oil to these nations rose from $3 to $5.11. [In January, 1974, they raised it further to $11.65]. The U.S. and the Netherlands, in particular, were singled out for their support of Israel in the war.
When OPEC announced the sharp price rise, the shock waves were immediate. Industrial democracies, accustomed to uninterrupted sources of cheap, imported oil, were suddenly at the mercy of a "modern Arab," standing up to American oil companies that had once held their nations in a vise grip. Many of these "new" Arabs were Harvard educated and familiar with the ways of the West. And to many Americans it was impossible to understand how their standard of living was now being held hostage to obscure border clashes in strange parts of the world.
The embargo in the U.S. came at a time when 85% of American workers drove to their places of employment each day. Suddenly, President Nixon had to set the nation on a course of voluntary rationing. He called upon homeowners to turn down their thermostats and for companies to trim work hours. Gas stations were asked to hold their sales to a max of ten gallons per customer.
In the month of November, 1973, Nixon proposed an extension of Daylight Savings Time and a total ban on the sale of gasoline on Sunday's. [Both passed later by Congress]. But the biggest legislative initiative was the approval by Congress on November 13 of a trans-Alaskan oil pipeline, designed to supply 2,000,000 barrels of oil a day. [This was completed in 1977].
A severe recession hit much of the Western world, including the U.S. And as gasoline lines snaked their way around city blocks and tempers flared (the price at the pump had risen from 30 cents a gallon to about $1.20 at the height of the crisis), conspiracy theories abounded. The rumor with the widest circulation had the whole crisis as being contrived by the major oil importers who were supposedly secretly raking in the profits.
And how did Wall Street respond? Well, as you might imagine shares in oil stocks performed well as profits soared, but the rest of the market swooned 15% between 10/17/73 and the end of November [The Dow Jones fell from 962 to 822]. This ended up being the middle of the great Bear Market that would see the Dow Jones go from its 1/11/73 high of 1051 to 577 by 12/6/74, a whopping 45% over nearly two years. As for the embargo, the Arabs lifted it against the U.S. on March 18, 1974 [The Dow stood at 874].

http://www.StocksandNews.com
Brian Trumbore
President/Editor, StocksandNews.com
Well, as I like to say, I certainly don't expect these columns to win any Pulitzer's. To wit, I really should have explained what countries are members of OPEC before I did last week's article. So please accept my apology as we go back, back, back�to fill in some gaps.
OPEC was formed at a conference held in Baghdad, September 10-14, 1960. There were five original members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Between 1960 and 1975, the organization expanded to 13 members with the addition of Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador and Gabon. Ecuador dropped out in December 1992 and in January 1995 Gabon was removed from the roster.
Despite all of its press, and influence, it may surprise you to learn that OPEC produces just 40 percent of the world's oil. It does, however, hold more than 77 percent of the world's proven reserves. OPEC also contains nearly all of the world's excess oil production capacity.
Non-OPEC nations thus produce nearly 60 percent of the world's crude oil. But non-OPEC countries have smaller reserves which are being depleted more rapidly than in OPEC. For this reason, it behooves these nations to continue to aggressively pursue new energy sources.
Current non-OPEC production is concentrated in seven countries: Canada, the United Kingdom, Norway, Mexico, China, Russia and the U.S. Five of these seven are net exporters to the world oil market, the U.S. and China being the exceptions. Together, the seven account for about 60 percent of non-OPEC production, with the U.S. and Russia being the largest. The remaining sources of non-OPEC oil are from 14 nations, including Syria, Brazil, Colombia and Oman.
Continuing then where we left off last week.
In March 1974 the Arab oil embargo was lifted but the event had left its mark. American prosperity had depended in part on what the Shah of Iran described as "the mystical power of the oil companies," or, the arrogance with which the industrial world, in the role of colonial power, claimed dominion over the planet's natural resources.
The price of oil continued to rise throughout the '70s. And oil wasn't the only commodity to do so. By 1980, other commodities such as tin, silver and gold rose to all-time highs while rubber, cotton and grain also rose to high levels.
In 1974 the Consumer Price Index rose to 11 percent. This was the highest peacetime price-surge in American history. By 1975, President Gerald Ford had unveiled his "Whip Inflation Now" program.
Meanwhile, between 1973 and '78, annual revenues from oil in the main Arab producing countries grew enormously. For example:
Saudi Arabia's rose from $4.35 billion to $36 billion, Kuwait's went from $1.7B to $9.2B, and Iraq's increased from $1.8B to $23.6B.
But this increase in wealth led to an increase in dependence on the very industrialized countries they had sought to teach a lesson. The producing countries had to sell their oil, and the industrial countries were their main customers. In the course of the 1970s, the excess of demand over supply came to an end, because of economic recession, attempts to economize in fuel consumption, and increased production by countries which were not members of OPEC.
The bargaining position of OPEC grew weaker and a high and uniform price level was going to be difficult to maintain. And the huge surpluses that were created in the producing nations had to be invested somewhere so, for the most part, they were invested in the industrial countries. They had to go to the same nations for technical expertise in order to develop their own economies and they sought outside help in building their armed forces.
The U.S. was also increasingly prepared to threaten force if oil supplies were interrupted again. We were not just worried about revolutions in the producing countries but also the extension of Soviet influence in the region, i.e., the 1979 invasion of Afghanistan.
After the 1973 oil embargo, Kissinger and Nixon had looked on Iran as an important regional ally. Unlike King Faisal in Saudi Arabia, the Shah of Iran did not use his oil to place political pressure on the U.S., although he greatly increased its price. [The U.S. did still supply Saudi Arabia with large amounts of aid]. In addition, Iran allowed the U.S. to refuel ships at its ports and continued American antagonism of the Soviet Union.
Nevertheless, the second oil crisis (which really started in 1978 when Iran led a new price increase), accelerated as a result of the Iranian revolution as well as political reaction to the Camp David Accords between Egypt and Israel. Oil was to hit $40 a barrel by 1981.
But eventually the price peaked due, again, to the simple forces of supply and demand. The industrialized nations began to develop more efficient uses of energy while OPEC failed to maintain a united front on prices and volume of production. The price of crude has generally been in a free fall since '81. Even with the recent price rise, in inflation-adjusted terms, we have a long ways to go to begin to come close to the levels of the late 70s / early 80s.
And one interesting note: there was an item in the Wall Street Journal recently concerning Russia's Gazprom, the world's largest producer and exporter of natural gas. They are proposing a cartel along the lines of OPEC to raise the price of gas, a lot of which is used in Europe. Gazprom is looking to reach agreements with two other major gas producers, Norway and Algeria. If gas prices remain low, Gazprom warned, Russia may balk at extending supply contracts in Western Europe.
Finally, what have we learned from the two price shocks of the '70s? Little. We still import way too much oil. Asia, for example, is back up to around 70% [from the Middle East] in some countries. Should the global economic recovery continue, there is no doubt that the $22 prices of today will look cheap in a year or so.

Oil is perking up again. Today NY crude closed just shy of $30.00/bbl at $29.92/bbl. Heating Oil Futures are up as is NG, which is near its record high levels. The analysts and pundits have been claiming that oil was destined to retreat in face of Saudi production increases. Instead, they are now eating crow. These poor dazed and confused souls completely misread the "Big-Picture". While California swelters in high temperatures and the threat of rolling blackouts is a very real possibility, calls for price-gouging investigations abound. However, the people have been living on borrowed time. The next generation of power plants will likely be all NG powered, as all others are environmentally or politically incorrect. Of course, the pundits and analysts will tell us that there is no threat of inflation, why just look at the PPI and CPI core rates. But a look at the "Big-Picture" will clearly show that the threat of inflation is not only real, but also an absolute certainty. The increased costs will show up in goods and services. They will be passed along to the consumer.

Firstly, there isn't enough production of hydrocarbons. But that is only part of it. There isn't enough refining capacity to process oil into fuel products (gasoline and heating oil for example). The refiners have very thin margins and are hamstrung due to volatile prices, and inventory taxes. It is much more prudent then to work with "just-in-time" inventories. There is also the threat to power generation, transportation and transportation of goods, in spite of the analysts and pundits claims that we are in a new economy and that oil is no longer important. Secondly, hydrocarbons provide many of the chemicals that make our daily lives a bit more livable. The agricultural community needs fertilizers and pesticides in order to meet the demands of a growing world population. A severe decrease in the petrochemical sector would increase food prices as well, but don't worry, the analysts and pundits have that solved as well. They just exclude that from the "Core Rate" so now it is unimportant, or better yet, use some form of hedonic statistics to monkey the inflation numbers. We have to account for the cost of a "better life" and "better product" you know. Without petrochemicals the western world likely resemble Ethiopia, Sudan or Somalia. I could stand to lose a few pounds, but really! Thirdly, another area, within the petrochemical sector and one that we heavily count on is plastics. Yes boys and girls, plastic comes from petroleum. We use it to store products, and to manufacture products.
In fact the computer that you are likely reading this post on is made with a substantial amount of plastic. Plastics are important in the manufacture of medical devices and pharmaceutical delivery systems. The list of course is endless. But you get my drift.

The analysts and pundits that you see marched out in front of the camera on CNBC, Bloomberg, and CNNfn are not living in reality when they say oil isn't that important anymore, especially in the new economy. It WILL show up in INFLATION. We have a serious shortage of NG as well. NG storage is at 45% of last year� levels. If this winter is a normal winter, then look out. As electric prices are soaring in S. California because of a heat wave, think what will happen if the east coast and mid-west experience a normal winter. Oil and gas rigs have not been replaced over the years when Petroleum prices were low. Some builders have not built any replacement rigs since the 1970's. If there were to be an expanded exploration and production boom, then how could it proceed? General Electric produces NG power turbines for the utility industry. There is at least a 3-year backlog. NG power generating plants are not being built fast enough to keep up with demand. Under regulation, there wasn't any incentive to build costly power plants, as recovering costs were questionable. Now "the chickens have come to roost" as it were. This is all on top of the fact that there isn't enough NG discovered and stored to power these plants anyway. The Canadians will be needing more of their NG for domestic use in the coming years and we in the US won't be able to count on them to keep the pipelines open. Of course in the US we have placed much of the likely petroleum targets off limits due to some environmental concerns. The politicians remove target areas such as the California coast, the Alaska North Slope, the Rocky Mountain Front, Southern Utah desert, etc. A look at the "Big-Picture" give a very clear signal that energy costs are definitely going to rise. So get out your old WIN (Whip Inflation Now) buttons, and wear them proudly � it's "d�j� vu all over again.

Fridays closing petroleum futures numbers:

CRUDE OIL FUTR Sep00 29.920 up 1.260 change 4.400%
HEATING OIL FUTR Sep00 82.200 up 2.740 change 3.450%
NATURAL GAS FUTR Sep00 4.300 up 0.050 change 1.180%

I really enjoy your well written commentary.

You know, "energy" is in everything that we do and vital in every aspect of the lives we live. Anyone who maintains that "energy" is no longer a factor is completely nuts.

What do you think about fuel cells as they might pertain to power generation in the coming decades? Thanks.

NG service cost where we live is doubling effective immediately. My $12.50 off season bill is now a little over $25. Also, the electric company's turbines are fueled by NG--electric is going up also.

I wanted to make sure everyone had seen the article from the Le Metropole Cafe website but wasn't sure if it had already appeared here. Your comment told me that there was some value in posting it. I will try to do the same with other pieces as I find them.

Second all that about Oro...

Someday, wouldn't it be great to know all 'bout him!

http://www.goldbug.net/but for everyone else, the link above provides what I think is a great explanation of the state of things financial and why. It may be preaching to the choir for many of you regulars but some of the newbies and lurkers should find it of interest. Clear and easy reading well worth the time. Comments welcome.

Peter Asher, your msg#: 34220 from last weekend regarding house boats. I wanted to follow up and chat a little about your idea but, alas, I've been tossed about by numerous distractions and lost my way. Wondering what motivates you in that direction versus something of deeper displacement (i.e. ocean going), sail power (i.e. relatively free energy), etc.?

http://www.goldbug.net/
Hello All,

I am reading the above link, posted by JavaMan. This forum previously offered some discussion regarding the gold currently being exported by the United States in excess of the gold it is currently producing.

The article at http://www.goldbug.net/ also discusses this issue, as follows:

***
The US Government is exporting large amounts of gold. From January through August 1999, official U.S. gold exports of gold averaged around 220 tonnes per month. In September they rose to 976 tonnes, in October 400 tonnes, in November 1008 tonnes, in December 783 tonnes, in January 727 tonnes, and February 921 tonnes. The U.S. new mine production of gold is about 2,500 tonnes per year. So we have exported about twice as much gold as was produced! Exporting gold keeps the dollar strong, which keeps prices low and encourages foreigners to invest in American markets. Of course when we run out of gold to sell we will be broke!
***

The obvious question is: Where is this exrta gold comimg from? The article just zips right by this issue, does not promptly address it (However, the issue may be addressed later in the article; I am not finished reading it.)

The article implies that gold mining companies in the United States are exporting the gold they produce, which is not a safe ussumption. I am guessing that the United Sates is probably a net consumer of gold.


Can anyone offer an answer for his interesting situation? I can think of the following possibilities:

a) the article does not provide true facts (somehow the facts are not what they seem; the numbers are distorted or lend themselves to being easily misunderstood)

b) mining companies are selling gold they have stock piled

c) some combination of a and b

d) other

I have been reading this forum since before it began, and other Internet gold forums too. The general message is "Doom and gloom, here it comes, prepare now, buy gold." OK, so a few years later gold is still up a few, down a few. That is where we are now, and the big question is still: when will the crash hit?

The above listed article says the crash (stocks way down, dollar down, gold way up) will hit when the "United States" has exported all its gold. (Who are they, the "United States"?) Somehow I am under the impression that the people in the United States are net consumers of gold. Who is doing all this exporting of gold? Maybe we can better understand this issue of the "United States" exporting gold by focussing on the nature of the statistics quoted for gold production and export.

I am ready to listen.

Parsifal

The numbers are wrong. They are annual rates for moonthly exports (divide by 12 to get the actual export for the month), not monthly. 2500 tonnes are produced by the whole world, not just the US.

http://www.fuelcells.orgThe link provides an interesting comentary. I know that there are at least 2 direct plays on Fuel-Cell technology. One is Ballard Power Systems of Canada. They have a few pilot projects including public transportation buses in Chicago and some in Canada. I bekieve that they trade in Canada and soon on the NASDAQ. The other is Fuel Cell Energy (NASDAQ: FCEL). Ballard appears to be better positioned though. The fuel cells can use most any fuel from hydrogen to methanol to NG. Some have even used waste water from sewage. I have seen some plans that are mostly based on hybrids that use hydrocarbons and electric. I am not really sure how the whole system works though. So far a viable mass production vehicle is quite a ways off. Then there is the problem of setting in place a distribution system for what ever fuel is to be the standard. It could solve a lot of fuel supply problems. The version under study uses platinum, I think that there might be some form of osmotic diffusion? involved through a membrane perhaps? However, this could also add a bit of pressure to the PGM supply if it were to take hold. It would be interesting to see some of this strange new technology take hold for vehicular power and power generation. Like I said I am not an expert on this subject. I think that Ponds and Fleischman of the University of Utah, used a platinum membrane to generate bursts of power in what they mistook for Cold Fusion a few years ago. It seems that it was a form of chemical energy, perhaps along the lines of fuel cell technology. Now wouldn't that be fun. They were derided because they mistook something for cold fusion, that turns out to be an equally important discovery.

Anyway, I may have some problems getting on the internet over the next couple of days. I am using a friends computer and we are outta here. Seems that we got a forest fire down the mountain and my lines are out. I'll check back later if I can.

The following is part of a letter I received from the Tocqueville Gold Fund. I have edited out the advertisement portions. It's nothing earth-shatteringly new but a well-written quick wrap-up from a member of the GATA team, home now from Paris.
"After attending the annual Financial Times gold conference in Paris during late June, I conclude that the surprise financial event that will create investment demand for gold will be a dollar crisis. The presentations of central bankers and bullion dealers were loaded with caution as to the outlook for gold, but no mention was made as to the risks to the outlook for the dollar. This should not be surprising for the central bankers in large part are trend following bureaucrats while bullion dealers have been making a handsome living from getting others to sell gold short. The U.S. trade deficit is now approaching $400 billion per year. As a percentage of GDP, it is at the highest level in history, a projected 4%. More worrisome, foreigners now hold 22% of all US government debt. It is only their willingness to recycle these passively accumulated dollars into US capital markets that sustains the dollar at its current levels. It is this same willingness to accept dollars at current exchange rates in return for goods and services that underlies a low US inflation rate. The dollar is clearly benefiting from a confidence game that is in its terminal stages. A change in sentiment would be disastrous for the dollar, the US capital markets, and other paper currencues. Gold is the alternative currency that would surely benefit."
Sincerely,
John Hathaway

If I'm not mistaken John Hathaway's opinion that a weakening dollar will announce a rising POG is the same opinion often heard from our fine host, M.K. Two fairly knowledgable men when the subject is gold, no? Anybody happen to know just when this is scheduled to happen? It's been almost six months since the yield curve inverted.

http://home.columbus.rr.com/rossl/gold.htmThe chart shows the Euro has taken a dive vs. the SDR and the major currencies.

Parsifal--
Those gold export numbers are taken from US govt statistics.
I have read (maybe here?) that the gold export numbers include foreign owned gold that has been on deposit in banks (particularly the NY Fed) in this country. The government has been including foreigners taking their own gold out of the US as "exports" to pad the export number in order to mask the thru size of the trade deficit.

An exercise on the lighter side...Some catch-phrases and sayings that if people thought about, could counter-act the gold is just a commodity/barbarous relic train of thought...

"Good as Gold"
A Golden Parachute
He who owns the gold makes the rules
A Gold Card
A Gold Record
A Gold Medal (the top prize)
Gold watch for retirement
A "Gold Top" Les Paul is tops among electric guitars
Columbian Gold is the mystical prize of some
Something can be "golden"--"silence is golden"

Anyone else have any others?

Golden streets in heaven. God won't be putting any barbarous relics around up there.

I saw an ad today for Camel "Turkish Gold" cigarettes. The slogan was "pleasure to burn." Doesn't that make you think of ANOTHER and "all paper will burn?"

First, Special Thank you's to Sir ORO for all your time effort and brainpower so generously shared here, and to Sir Black Blade for all your up to the minute reports.(I'm 3 weeks behind on reading)

Sir Parsifal, the poster known as TownCrier may have all the information, on Gold imports/exports you are seeking, and also a poster who hasn't posted for a while known as Elwood. Yoo Hoo Sir Elwood where are you?

From my notes here is what I have jotted down over the months:

South Africa, the worlds leading producer of Gold, produces about 400 tonnes annually!

The U.S. is the worlds "Second" largest producer of Gold producing(Mining) under 400 tonnes, exact amount unknown?

The U.S. Mint sold 61 tonnes of American Gold Eagles in 1999,all Gold sold by the U.S. Mint is supposed to be mined from U.S. Gold mines. However, sometime in 1999 American Eagle Gold coin demand was so great a special one time minting of American Eagles was done in Australia.This was also attributed to a break down at the U.S. Mints "Jobber" plants.

From Sept, 1999 to Feb. 2000( 6 months) a 481.5 tonne (Export)imbalance showed up on Official U.S. Gold Export/Import figures.

From Sir LeLand # 30619 5/16/2000 From insight magazine:
U.S. produces 400 tonnes per year, 70% is used for Jewelry and Art, 23% electronics & Industry & 7% for Dentistry.
(Comment...Where do Gold Coins fit in?)

Source AngloGold Annual report:
More than 80% of the worlds newly mined Gold is used in the manufacture of Gold Jewelry.(80% of 2550 tonnes(WGC Figures) = 2040 tonnes for jewelry worldwide annually)
The U.S. and Europe account for 1/3 of total demand for Gold in the form of Jewelry.( 1/3 of 2040 tonnes = 679.32 U.S. and Europe combined) 1/2 of that figure is: 338.66 tonnes, so we can assume about 338.66 tonnes of Gold is bought in the U.S. for Jewelry only. However, a large amount of Gold Jewelry is imported into the U.S.( Italy, Thialand, etc.)
So that kind of leaves us right back where we started from; How much Gold does the U.S. consume???

There are 8138 tonnes of Gold currently(June 30, 2000) carried in the account of the U.S.Treasury.(261,626,070.759 Fine Troy Ounces)
http://www.fms.treas.gov/gold/

MORE NOTES:
Some of the Gold carried in U.S. export figures may be Gold held in "Trust" by The U.S. Federal Reserve System for other Central Banks, and other Countries. Recent BOE Gold sales may??? fall into this catagory...Unknown!

How much "Scrap or Melt Gold" is coming on the U.S.market on an annual basis? Would anyone have figures on that?World Market?
In my family alone,(Distant Relatives) $13,000 in Gold coins turned up "Missing". But thats a story for another post.
What is the annual world demand for Gold coins, Medals,Commemoratives etc.?

Anyway, running out of time as usual...Those in the Know...are still Buying Gold at bargain prices...beesting.

http://www.goldbug.net/
Thanks for the responses. The article seemed to me to be really good, right up to the point where it tries to make a statement as to when the crash will occur. Maybe the author wants so strongly (just like many of us) to define some reliable criteria that can be used to predict when the crash will occur, that he has badly misunderstood the meaning of the gold export statistics kept by the U.S. government.

On a related note though, if foreign entities (governments, banks, private individuals, etc.) are withdrawing gold from safekeeping in the United States at a rate that is very much accelerated, well, that is noteworthy. Why leave gold here in the United States for so many years (for potection?), and then choose now to move it somewhere else?

Lafisrap

Thanks for the response.

beesting:
> From Sept, 1999 to Feb. 2000( 6 months) a 481.5 tonne
> (Export)imbalance showed up on Official U.S.
> Gold Export/Import figures.

Yes, I remember Oro posted or commented on the United States government gold import/export figures a few weeks ago. Thanks for the refresher. Mow I am wondering how much gold foreign entities (governments, banks, individuals) have been keeping here in the United States for safekeeping, how quickly they are reclaiming it, why they have chosen to reclaim their gold at this time, and what is the meaning of this event.

If it turns out that the rest of the world is reclaiming their gold from safekeeping in the United States as fast as they can (at a rate that indicates panic), then let me be the first to declare the crash is here now, because if formerly trusting people now see the United States as a place to quickly move gold from, they do not trust the United States to keep their gold safe. Of course, when trust is gone in general (as is in Russia?), business can proceed only under more difficult circumstances.

Parsifal

Checked the calendar.

Checked the organizer.

Checked MS Outlook.

I'll be darned, my incompetent secretary forgot to pencil in the date....

http://www.observer.co.uk/business/story/0,6903,351010,00.htmlFears of new hi-tech crash feared

Dive in US mutual funds could spark world slump � Investors exit after a disastrous July

Paul Farrelly, city editor
Sunday August 6, 2000

Fears are growing in top financial circles of a further slump in hi-tech shares, which may prompt a global stock market crash.
Concern focuses on the huge US mutual funds sector, where investors appear finally to have lost patience with 'growth funds' after a disastrous performance in July.

A large-scale exit would, in turn, prompt a massive sell-off of telecoms, media and technology (TMT) stocks, with huge reverberations for world markets.

One large fund at the centre of the worries is the Denver-based Janus Capital Corp, which manages �200 billion in assets. Its two main international funds, Janus Worldwide and Janus Overseas, were worth �33bn earlier this year. Among their biggest investments are �2.1bn of shares in Finnish mobile phone maker Nokia, �1.4bn in Vodafone AirTouch, �360m in Colt Telecom and �540m in Spain's Telefonica.

'There is a growing concern that redemptions will see mutual funds cut their holdings,' said one UK equity strategist. 'They run lots of tech and tech's got whacked.'

Another senior City broker added: 'For Janus read an awful lot of other funds out there. Lot of New York funds have nothing but growth stocks, and the man in the street is finally taking fright.'

The fall-out from the hi-tech retreat claimed another scalp in the UK last week, as computer group ICL scrapped its flotation. Two of the high est-profile internet firms, Boo.com and ClickMango, have already shut up shop, while online music retailer Jungle.com has also postponed its flotation.

Despite market turbulence and prices at a record high, individual US investors have remained bullish, investing a record �130bn in the mutuals, the US equivalent of unit trusts, in the first six months of this year. But in the past week the mood has changed.

Average US equity funds fell 15 per cent in value in the third quarter, the biggest quarterly fall since 1990. This weekend, however, Janus tried to quash rumours of big sell-offs, including Nokia shares, by insisting its funds had not suffered any 'material redemptions' in July.

But brokers fear turbulence stretching into the autumn - traditional crash territory - especially if US interest rates rise. 'Some highly rated hi-tech companies will finally get back to fair value,' said Terry Smith, head of City firm Collins Stewart. 'It's a hell of a long way down from here.'

Markets braced for bellwether Cisco's results

World markets are bracing themselves for the announcement on Tuesday of internet network equipment maker Cisco Systems' fourth-quarter results. Cisco, the second-biggest company on the planet after Microsoft, is seen as a bell wether for new economy stocks.

Mike Ching, Merrill Lynch's influential US internet analyst, said: 'If they disappoint, it's panic time.'

The consensus is that revenues should grow by 11 per cent to $5.25 billion. Earn ings per share are expected to be 15 cents.

Analysts want to see if Cisco anticipates a US slowdown: 'If these guys are cautious it could get messy.'



$hifty

http://www.stockcharts.com/charts/$YLD.htmlLast week marked the last step of inversion in the treasury yield curve: short term notes have climbed in yield above the rest of the treasuries.

The yield inversion started in Jan this year and has now gone into complete inversion.

Private bonds and mortgages have not inverted, but the spreads between long and short term rates has fallen from 2-3% at the extreme ends to under 1.5%. Also, in the long term bond market, the spread of 15 and 30 year mortgages, normally over 1% has fallen to near and under 0.5%.

The annualized interest rate spread between the 30 yr mortgage and 5 year treasury (US mortgages are refinanced or changed due to relocation after an average of 5 years) comes now to just under 2%, down from 1998's 2.45% and last year's 2.25%, but way up from 1.25% in 1996 (the same level it was in the early to mid 1970s, which was still higher than it was before that, in the 60s).

It is interesting to note that the markets have always provided a far greater spread - allowance for mortgage defaults than is justified by historical data, that shows a MAXIMUM of only 0.31% since 1991 on residential mortgages, and a PEAK of only 1.4% on all mortgages since 1985.

(The number I used in the post on Black Scholes and interest rates was mistaken, it was for consumer loans, not mortgages)

The estimate of originary interest for these periods on a 30 year mortgage (actual average maturity 5 years - and thus the probable time period for which the mortgage investor plans) would range from 0.57% in 1996 to 1.18% in 1998 and 0.92% currently.
(Estimates use actual treasury-mortgage spreads and actual bank loss reserve alocations)


View Yesterday's Discussion.

Remember the long lines outside the pawn brokers shops in the late 70s'?

Class rings in 5 gallon buckets, siverware and art work destroyed for its' metal value. (shame)

We are moving again toward the coming event.

Not for investment advice, but watch mtlm.

Does this interest rate inversion signify and display the catch-22 desperation attendant in dollar denomination?

To wit, if dollar drops, then because of balance of trade bleeding, imports costs roar. But, on other hand, if dollar does not stay strong, then foreign trade surplus will not be recycled back into wall street.

I can see that the Fed, which can effect short term rates is raising to support dollar, but don't understand why the long end of "the market" is not looking out to higher inflation.

Is it because Giants are liquidating long end and going for politically induced high short end?

at his hilarious best over at G-E editorials... and still hits the nail suare. Don't miss it - cb2

by 2003 it will turn over 70 military scrap yards to private firms starting in utah, nev. wash. calif. alot of aging ships are decommissioned cut up etc.

After reading Keith Barron's "Major Gold Producers Eating Their Young" at the Le Metropole site, I am reminded that this is precisely what many of us thought the operative plan as long as two years ago, when it was apparent that the gold mining companies had an interest in running down gold for some reason -- though we didn't know what it was Several offered the theory that they were trying to drive the juniors to the wall in order to acquire properties cheap. In those days, we wrote about the mining companies lined up single file from the edge of the cliff watching as one of their fellows after the other hoping that somehow it would all end before it became their turn. That line has gotten shorter. And we stopped talking about it as too gruesome a subject. Watching an industry commit industrial suicide has not been our idea of fun. For the most part, though, the acquisitions have not occurred except on a limited scale. The tangle emerges when one realizes that a company like Ashanti really cannot be acquired because of its disastrous hedgebook, and the properties must be awfully good to warrant acquisition at today's depressed prices. No one in the industry has the capital to take the once and future hits of an Ashanti, or a Cambior, or a Barrick for that matter. Then, in these workouts, you always have the bullion bank whining about how its going to its loans retired -- gold loans that is, payable in hard metal, not paper promises. That's an obstacle to that theory's fruition as well. So, all in all, it doesn't appear to have been any sort of any pre-planned strategy fit for the latest economic thriller, but more a paper-clip and bubble gum fix-up to keep alive and well the gold carry upon which so many careers depend. What has always puzzled me is who bought that physical gold that is promised up to ten years out at $360 and do these people have to answer to anybody? I doubt there are private investors willing to contract a gold deliver five, seven and ten years into the future. At present these particular gold trading geniuses look pretty ridiculous taking delivery on $360 gold when the price is $275; not to say they won't feel substantially better about it ten, five or even one year out. Isn't someone in the organization holding the $360 contract likely to ask: " I say, Humboldt, my good man, how did we end up with these $360 an ounce gold bars?" To which Humboldt replies: "Not certain about that Wilson. The fellows over at Goldman stuck us with them, it seems. Not to worry, those people over at USAGOLD Forum will pull the price up."

*********

My take on the Republican National convention is that just before the opening gavel was struck there was an alien intervention in which all the Republicans were beamed out of the Hall and a bunch of replacement Democrats beamed in. Most Reagan style Republicans are left with the potentially benign hope George W will run to the Left and govern to the Right. But then again, we don't want to talk about this sort of thing do we. . .for fear of Gore. All for fear of Gore. I know. I understand. There's something about that convention that I would describe as surrealistic -- almost like it didn't really happen, but then again, I know that it did. For a few days, Republicans were able to experience the same delusional "rush" Democrats so often do at their conventions when they fantasize, teary-eyed how they are going to help all those unfortunate people out there who have been stranded on Life's highway. The only question remaining is what will happen to the Republican Party when all those abducted conservatives return -- those same conservatives whose philosophy carried the day in 1996 and gave Republicans control of Congress for the first time in a long while. The Buchanan candidacy looms Nader-like in the distance. . .

*************

I would like to register my opinion that the 10 Kroner Danish gold coin we are now offering is a steal for medium to long term gold accumulators and bargain hunters. We are pleased to be able to offer it. I am surprised that some haven't discovered the potential and secured most of the hoard already -- in essence jumped on a good opportunity for the long run. Most of the 10 Kroners being offered were minted in 1900, a year when only 204,000 were manufactured. In terms of gold weight, the coin weighs .1296 ozs exactly one-half the 20 Kroner coin. Usually the smaller coins carry a higher premium than the larger coin of the same genre; but, in this case, the buyer is paying the same price per ounce of gold in either case. That alone makes the 10 kroner a bargain in my estimation. Also, my 1990 Krause catalogue of World Gold Coins lists the 10 Kroner at $200 (nearly the same listed value as most of the heavier 20 Kroner coins). So you can see that at least Krause rates the 10 kroner coin a scarcer item. We are selling the coin for $57. (Please note: Though I am close, if not excact, on those catalogue numbers, I am at home and going from memory. My catalogue is an older one by the way -- the 1990 version. The point I am trying to make is with respect to relative values. Also, this does not mean that you can get $200 for the coin if you take it to the local coin shop.) We have about one thousand 10 kroners left and they will go out on a first-come, first-served basis. I would suggest securing a few of this item while you still can. I think its a good buy. You can order over the weekend through the on-line system. We try to secure items with some appeal beyond the ordinary run of the mill items for these offerings. The Uruguay five peso -- sold out -- was one of these and the general response from buyers has been very positive. We are still getting inquiries on further purchases but we are unable to find the supply to fill the on-going demand. These Danish kroners, particularly the 10 kroner, may in the long run prove even more elusive. My strong advice would be to move on the item while its available.

****************

The response to our Client Memorandum: You Can Survive a Potential Gold Confiscation has been significant with several bullion owners deciding to trade for pre-1933 items. We encourage anyone who is thinking along these lines to call the office and talk to George Cooper or myself while premiums are still low on the Sovereigns, Guilders, Swiss, etc. We do believe that the timing is good if you have an interest. By the way, part of your trade can include the Danish 10 kroner coin if you so wish. If you haven't received the report but would like to receive, it is available by e-mail at no charge and $25 if you would like a hard copy. Pleae visit our Info Packet page for details.

**************

I read the article posted by Shifty yesterday with a great deal of interest. If I recall correctly, the Janus Fund lost a top notch fund manager recently because he found it impossible to unload a position (I presume in tech stocks) without the bids dropping precipitously. In other words, they saw him coming. The same tale of woe was told by the manager of Soros' Quantum Fund when he resigned. Both talked about managing smaller funds whose activities could be hidden in the overall volumes. We always wondered what free market force would bring this market to a top. Little did we know that this market force would be funds who couldn't get out of their positions, yet that's what seems to be the case. Some horrendous losses are going to be taken and fund holders are going to want out. When that happens, run for cover, because its going to get nasty -- election or no election.

**************************

I suspect next week will be continuation of the summer doldrums for the most part, though we may see some bottoming action in gold, and some indications for the future. The stock market continues to move sideways and the carnage in the New Paradigm stocks seems evident to anyone who cares to look. On top of that we have the oil situation -- low crude stocks and rising prices. Inflation could once again become the hot topic with Productity being released Tuesday and July PPI Friday. This could make for an interesting week with all markets beginning to ramp up for the Fall, and yellow metal demand coming out its summer doldrums as the month progresses. We should also get further evidence next week whether or not the dollar has resumed its bull climb or what we've witnessed in the past week or so is just a technical upside correction in an overall downtrend. The ECB's apparent disinterest in raising euro interest rates may have been telling in this regard. We'll see what the week brings. . . .

Thanks for this forum, it has been helpful in sorting out what is likely underlying years of gold market nonresponsiveness to fundamentals. I accept your premise that physical gold will be the ultimate winner in this global financial struggle, but am concerned about being able to ultimately claim victory against an opponent in charge of making the rules. It is clear that pre-1933 coins add a layer of protection vs. FDR Act 2. I also know that Homestake performed marvellously in the years subsequent to 1933. Can you give me a likely scenario for performance of gold mining stocks in case of another gold grab other than possible excess taxes on gold profits? Also concerning silver, how does one add a layer of protection in the ultimate upside scenario? Please respond or guide me to previous posts that specifically address these Q. Thank you fellow honest money advocates!

Another fly in the ointment is that many mutual funds carry debt. In the light of the volatility of the last few years many funds with very low cash (fully invested) borrow money to pay out redemptions rather than allow themselves to be forced to sell shares, to be whipsawed by the markets and their frightened unit holders.

As I own no MFs I don't get any literature to check re this question, it's sure to be buried in the fine print, and I would hope that there are stricht rules re this practice.

Yet another snowflake sitting atop the avalanche.

gidsek

that was re your post of yesterday evening.

gidsek

USAGOLD (08/06/00; 10:47:53MT - usagold.com msg#: 34571)Michael: Very nice commentary this morning. Covered all bases. Sad but true as they say.

I am reminded at this moment in the "Wealth Transfer" epoch, of the feeling shortly before a Hurricane strikes. All is calm and serene, the dire forecasts seem unreal. How can such a comfortable environment be about to, in just a moment, become a cataclysm?

Yet it does. And the next time that history repeat itself, one still tends to think: How can this beautiful, late summer day, be about to turn into such a Storm?

Got high ground??

The gold mining industry is obviously one in deep trouble and much of it of its own making. We were among the first to warn that not all gold stocks were created equal and we have been vindicated in that respect through two developments: One, the virtual failure of the junior gold mining company as a financial entity, and two, the recognition that some hedged gold mining companies are actually a bet against gold and will go down in value as gold goes up.

Having said that, I am not one to rule out gold stocks as a viable play for the future. I believe that one day the United States and the world will be forced to return to gold as at least a component of the international monetary system, if not its benchmark. Then gold mining companies will be among the best investments one can make. Up until then, one must be very careful. In recent months, a very clear and important distinction has been made between heavily hedged miners and those lightly or rationally hedged. Make sure you stick with the former if you wish to short gold, and the latter if you think gold is going higher.

When gold returns in full bloom to the monetary system, gold mining companies will step to the fore, though there is no way of knowing which gold stocks traded today will be the prime beneficiaries of this future political/economic event. This is the initial problem in buying a gold mining stock. What the management is and does today, might not be what the management can be and will do in the future. The all-out hedger of today could become the pure miner of tomorrow; the pure miner of today could become the all-out hedger of tomorrow. Then there's the problem of merger and acquisition and what the position the new entity will take.

By and large, I would say that hedging has become largely discredited even in mining company top-floor corporate suites simply because they've been found out; it's been publicized and the stockholders don't like it. The question for most mining companies is "How do we get out of this?" Not, "How do we get in?" (Though there are a couple notable exceptions). Rather than include a copper mining company in the XAU to fill the hole left by hedged companies that go down when gold goes up (thus causing the XAU to fail as an indicator) what the Philadelphia Exchange should do is include only unhedged, or at least rationally hedged, companies in the index and let the rest dangle in quasi-hedge fund land. Then its index would once again be viable.

The above far outweighs at the moment any consideration as to whether or not mining companies would be worth owning should there be a gold confiscation (followed by a gold monopoly overseen by the government, and the hoped-for returns). The Homestake example is interesting in that it had the quality and quantity of reserves to benefit as well as the expertise to extract the metal at a profit. I will leave the analysis of which companies now fit into that category to the stock analysts.

I can safely say though that gold in the hand not connected in any way to the management and future viability of a gold mining company is a far superior asset for those interested in asset preservation -- especially under current circumstances when one wonders if even some of the mine company CEOs understand what going on with their hedge books. To be sure, some mining companies will do extremely well in the event of a gold confiscation because presumably that would be a coincident with some increased official role for gold. But the question is: "Which ones?" And, "How can you tell they'll be around when that big moment comes?" Don't forget just a little over a year ago, Ashanti was viewed as one of the premier up and coming mining companies in the world. Now we are concerned that it may not even exist a year from today. There are no such doubts about the 50 British sovereigns one can easily hold in the palm of one's hand.

I am not a silver expert and I usually get in trouble with people when I share my views in that regard, so I'm going to leave that alone.

What I think people miss quite often is the fact that these are different asset classes -- gold, gold stocks and silver -- that perform quite differently under any given set of economic and/or financial circumstances. That is why the wise counselor always counsels diversification no matter which asset class he represents -- I emphasize the use of the words, "wise counsellor."

As Dr. Moneywise says, "Use the right tool for the job, and the job gets done. Choose wrongly and you'll spend the day cursing the one you've got in your hand."

Michael,

I mostly agree with your opinion on the gold mining industry, though I feel you might ask the ancient question, what came first the chicken or the egg.

Take ABX (Barrick) as a most recent example. The company is only around some 16 years as it got lucky on its Goldstrike property in Nevada and still would be revered as a great gold mining company, wouldn't it have turned a hedge fund. Still -even if most of us have our qualms - it is one of the most successful in its industry and has the means to pick up juniors with a meaningful reserve/resource base at bargain prices.

What I'm saying is every mining company started out exploring and developing, even 120yr old HM (Homestake) started small. The junior exploration companies of the 80' and 90's may have in part become pure speculation - isn't it a neat parallel to the dot com's of today failing to be a financial asset tomorrow? -, though some have gone out and prospected in area's, which have been long "sterilized" from new geological and technical expertise, either by lack of investment, knowledge or purely political reasons.

Newmont, btw. eventually became a major gold miner by spinning off its gold assets under the pressure of take- over threats by the likes T. Boone Pickens.

Still it has been the enterprising juniors finding new world class gold deposits, while the majors have been busy
trying to get more cost effective at the minesite. True again, the CFO's were trying to do their part in hedging to insure stable sales prices, which eventually added to their demise. But again - chicken or egg - forward selling of gold was legitimate practice in order to develop production. Only with the arrival of the hedge fund crowd gold leasing was discovered as a hugely profitable carry trade - yes and some miners got "carried" away!

BRE-X, an unfortunate scam, coming not only at the wrong time, but having other, more severe implications in the sense, that whether the mining industry, nor the brokerage or banking community came out smelling like roses, though that's not the topic.

The topic may be, that certain CB's and BB's may have a vested interest in a low gold price, or the conception that gold forever will stay a malinvestment.

A "malinvestment", I happily accept at todays prices in physical form, in some, as you say even rationally hedged producers and in few duly researched juniors.

Regards cb2

Oro, please don't be too hard on your secretary as Shifty and Gidsek have revealed the date in question as this coming Tuesday. Thanks guys. Shifty let us know that Tuesday is report card day for Cisco's earnings (second in size to Microsoft) and Gidsek tells us that large mutual funds like Janus are fully invested to the point of borrowing money to meet redemption obligations, rather than sell stock for cash. So, a poor Cisco earnings report leads to pressure (margin calls) on fully invested funds which brings about forced equity sales by those players very much in the limelight. This alerts the smaller money managers and down we go. Simple, no? I was just curious as to the date, thanks guys. Perhaps I'll buy some gold before Tuesday.

http://www.SelectSectors.com/pog.gifFive day POG forecast has been changed.
The model now is in terms of US$, CRB,
30Yr-Treas, Oil.

I will keep searching for a model that makes it go Up!!

Schippi, I know you spend a lot of time with the charts, but it's not the model that makes the POG go up!!

http://www.worldnetdaily.com/bluesky_metcalf_news/20000806_xngme_the_govern.shtml
Anyone know if this is on the level? It looks right, but the implications, not the process by which it could happen, are one of those things that right now I just find hard to balieve.

Regards,
Journeyman

"Another fly in the ointment is that many mutual funds carry debt. In the light of the volatility of the last few years
many funds with very low cash (fully invested) borrow money to pay out redemptions rather than allow themselves
to be forced to sell shares, to be whipsawed by the markets and their frightened unit holders."

Hey gidsek - good point! They will borrow to pay out their losses. Losses monetized as debt. I'm finding it hard to believe that losses can be forever monetized. But hey, I'm from the old school.

Periodic Ponzi UpdateNasdaq 3,787.36 + Dow 10,767.75 = 14,555.11 divide by 2 = 7,277.55 Ponzi

Up 190.47 Ponzi Points from last week!

$hifty
:)

http://www.sco.ca.gov/ard/cafr/cafr99.htmThe assets of the nearly 60,000 government corporations and trusts, including pension funds ("fiduciary funds"). CALPERS and other state retirement funds are among the largest of Wall Street's clients.

The total of CAFR accounts is somewhere substantially north of $60 trillion, coming down to $1 billion per government corporation, not at all that big if you remember that it includes all of the assets of public pension funds, the public universities, the school districts, all state county and municipality parks etc. and the Federal government and its thousands of funds, subsidiary agency corporations, including such "stars" as FDIC, FHLB, HUD housing corporations etc..

Take a close look at the above URL and you will find one tip of one iceberg.

For just the California state university system, real estate holdings are likely worth at least a few hundred billions.

To put things in perspective, the US GNI has near $10 trillion, which comes off of an asset base that can be estimated as the inverse of a particular return, say 5%, giving a $200 trillion asset base.

The Fed's flow of funds shows a 2.5 to 1 ratio of new "financial sources" (i.e. assets) to new debt. If over the years a $26 trillion debt base was formed, the financial asset base that grew around it is probably on the order of $50 trillion, to $75 trillion. This is without the asset accumulation out of cash flow.

The assets on government books at the different levels are not as surprisingly big as it seems on first hearing of them.

Thanx for the info, ORO. I owe you another one!!

Regards,
Journeyman

OK. But what does this *mean*.

Can we actually pay off the national debt by giving the Fed Central Park and letting them build a casino or what?

I don't quite get it. These sums I've been reading about look pretty HUGE to me. ("A billion here, a billion there......") But if these things are really tied up in equities funds and bonds and such, then this is all really just BS anyway.

Seems really strange to me....

I can understand your feeling of unreality watching the Republicrats' convention. It's rare for me to agree with the Sunday talk show pundits, but they called it pretty well. They described it as a masterfully staged media event, where the far right got virtually everything it wanted in terms of policy, and the moderates dominated the podium. This is a VERY confident bunch right now, and justifiably so. Bush has few problems with his base since selecting Cheney, and Gore has all kinds of trouble, including a big poll deficit.

You spoke of surreal. I've been having nightmares about the Gore I saw on Meet The Depressed a few weeks ago. He was the sorriest, scariest, most transparent imitation of a human being, attempting to do banter-like schtick with Russert. God, my flesh still crawls at the thought. I'm glad W has such a commanding lead, so I can vote Libertarian, as I have since 1980, without fear of Gore actually having a chance!

My personal prediction: Buchannan will be a non-factor, and Nader will surprise. Gore has far more to worry about from Nader, than does W from Buchannan. The bottom line: the 2000 election will be a lose/lose proposition for the average person and his/her freedom, no matter which of the 2 major candidates wins. Hold on to your wallets and kiss your liberties goodbye, either way.

M

http://www.sco.ca.gov/ard/cafr/1999/06.pdfThe summary here is the direct state of Cal asset base, which has $520 billion for 1999, with $130 billion of liabilities and "retained earnings" of $6.7, billion.

This does not include the land owned by the State of Cal and it's agencies, just the "fixed assets", or buildings, at an historical value. At noted Cal fixed assets of near $39 billion, a multiplier should be used to reconcile current to historical values. As an arbitrary value, a multiple of 5 seems to work for old line corporations. Appliying this to Cal, we have something like $200 billion. This would add up to under $700 billion in Cal state gov assets.

This does not include political subdivision accounts and independent state agencies and state sponsored enterprises.

Davidson and Mogg have referred to gov as an "employee owned organization" with a monopoly. The one thing they actually care about is what they hold in their pension funds, and what career advancement they can obtain by being "team players" with private corporations. That depends on the regulatory power they have obtained and on the assets under their control. All 3 items should show substantial growth to satisfy the organization.

The bulk of the assets is pension funds.

The bulk of real assets is undisclosed in up-to-date values.

The whole thing is rather meaningless so far as debts are concerned, and the "National Debt" is the debt of the Federal government, not of the people. The Federal government is a corporate entity that "tax farms" the USA on behalf of its employees, the noisy political groups, the US debt holders, and the private interests that can pay the individual employees enough (in terms of "career" enhancement or indirect business preferences) to have the rules moved in their favor.

The US gov is one of the few industrialized nations that has not privatized much and not sold off substantial properties.

We'll see when that comes about.

testView Yesterday's Discussion.

test

Dec gold will be interesting, should be up day, pattern calls for it.

A run back to 284 may complete rt side of head for a possible h&s pattern. ( reverse H & S )

Tuesdays cisco kid was a friend of mine, may break techs.

interesting week for gold.

http://interactive.wsj.com/articles/SB96543051040081665.htmBarron's running an editorial on ESOPs.

Among the points:

"...companies that gave everybody options discovered that the incentive had become a key factor in their success: ...concentrate all workers' minds wonderfully on their company's performance..."

"...permits companies to deduct the value of options when an employee exercises them. At the same time the employee pays ordinary income tax on the same value. Neither one of these tax transactions shows up in a company's financial reporting of earnings, ..."

"Microsoft, ...cash flow report notes a corporate tax benefit of about $4 billion. " 1/2 of income, 1/6 of revenue.

Notes that stock options are issued in lieu of cash compensation.

"When stock options are issued, the corporation hands over to the employees something that the employee recognizes has value, and which the corporation pretends has no value. When the employee cashes in the option, the value is obvious, readily calculable, and taxable. But never, except on the tax accounts, does the corporation acknowledge the true cost of stock options."

Quotes Buffett: "If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? And if expenses shouldn't go into the calculation of earnings, where in the world should they go?"

Great read.

Barron's online, get you some.

97% pattern

Some scarey squiggles.
Great graphing graphics.
Obliged, ORO.
Goldsun

You may be interested to know that in the case of the USD and Asian currencies collapsing at some stage, the Chinese Central Bank has a return to the gold standard as an option in its contingency plan for such an eventuality. As my source remarked: "In the Chinese and Japanese language, gold or silver means money"

like BKX, DOT and such. Weren't it old Philadelphia, I'd say, well it's old private banking territory. The DJII had similar adjustments last year - you've got to give credit to the new economy - even Greenspan does it - en masse!

So enter more copper to gold and silver - FCX hasn't been that pure a pm producer either - exchange # 2 gold producer Goldfields (mostly unhedged) for Meridian (no weighting yet for an underweight) and what you get is a weighting of totally hedged producers. So now you've got a gold and silver index, presumably going against any surge in the pm's.

Brilliant! -Isn't it. Like ORO's ESOP's it's a modern Aesopean fable. Your FED up cb2

watch them, see if the go up!!

http://www.usagold.com/Order_Form.html8/7/00
�Current
�Change
Gold Spot(Indication)
274.00
+1.40
Silver Spot (Indication)
4.94
+0.03
30 Yr TBond Sept CBOT
99~17
-0~05
Dollar Index June NYBOT
110.75
+0.03


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(8/7/00) www.USAGOLD.com Daily Market Report . . . Gold
moved up smartly in early Monday trading in what appears at the
outset to be a short covering rally. There was little in the way
of news to explain the up swing. European and Asian overnight
trading was quiet. We could see some additional action before the
week is out with a series of key reports being issued as the week
progresses: Productivity on Tuesday, Beige Book on Wednesday,
Export/Import Prices on Thursday, and Retail Sales and Producer
Prices on Friday. Investors will be watching carefully for further
signs of inflation.

That's it for today, fellow goldmeisters. We'll see you here
tomorrow.

Please note that we have changed our daily gold pricing to reflect
indicated spot prices on gold and silver at the request of several
readers.

An Invitation:

If you like the type of analysis you just read, you might find our
newsletter interesting. The August issue of News & Views:
Forecasts, Commentary & Analysis on the Economy and
Precious Metals, reveals some very interesting statistical
information on the worldwide gold derivative position and offers
the outlook for gold from several analysts.

Short & Sweet opens this month as follows:

"Now that gold has successfully navigated the July doldrums,
what do we have to look forward to? How does a price of $2500
per ounce sound? That's the number Leigh Goehring of Prudential
Investments dropped in a Forbes magazine interview in mid-July.
His reasoning echoes themes developed in this newsletter last
month: "I am a raging bull when it comes to gold," he declares.
"In times of inflation, people always end up just gravitating to
it. . . The period where the U.S. economy could expand without
fear of inflation is quickly coming to an end."

For those unfamiliar with our widely circulated newsletter, a few
words of description are in order. It's publication is greatly
anticipated each month as it probably provides the best summary on
gold news and opinion available today. The Short & Sweet format
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and opinion without the unnecessary fluff. Appropriate charts,
tables and graphs are also published to better summarize the
information. We also offer the clever political and financial
cartoons of the award winning Ed Stein of the Rocky Mountain News.
News & Views is a private letter offered free to our current and
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Along with the latest issue of News & Views, you will receive our
Gold Almanac 2000 which offers fundamental background on the
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You can call Marie at 1-800-869-5115 to request the
newsletter and Almanac or click above

http://www.drudgereport.com/flash1.htm08/07/2000 08:18:30
China warns U.S. of ``serious damage'' if Chen visits

Beijing (dpa) - China warned of ``serious damage'' to Sino-U.S. relations if a proposed transit through Los Angeles airport by Taiwan President Chen Shui-bian goes ahead next week, state media said on Monday.

The Chinese government had made ``serious representations'' about the U.S. allowing Chen's transit and had expressed its ``strong dissatisfaction'' and ``firm opposition,'' Foreign Ministry spokesman Zhu Bangzao told national radio on Monday evening.

``The Taiwan authorities are using transit as an excuse to carry out separatist activities,'' Zhu said.

Chen plans to land in the U.S, which has no official ties with Taiwan, on August 13 for an overnight stopover en route to the Caribbean.

The U.S. has issued Chen with a transit visa but has said no government officials would meet him.

On Friday, Beijing reacted angrily to a call by 12 countries for the United Nations to consider admitting Taiwan, saying the move was ``gross interference'' and a ``flagrant violation'' of the U.N. Charter.

China also marked its August 1 Army Day with a warning to Taiwan that it had ``the firm determination and necessary means to stop all separatist activities.''

$hifty

Gore chooses Senator Lieberman in an effort to distance himself and his candidacy from the last eight years. The President embraces Lieberman and Gore's choice. VP Gore's strategy has backfired. The President isn't helping VP Gore. The President, knowing there might be some choppy economic H2O dead ahead, actually prefers Bush. The set up is for Hillary Clinton in 2004???

The set up in gold for more shorts to cover, with tomorrows cisco report we should see some more short covering in gold.

Bad news ahead for stock mkts. swiss franc looks good.

Don't give up, we're close.

Cisco's earnings will not disappoint AND "Productivity" will also be a very market friendly number. LOOk at the market today it already knows it!

AUGUST is now the worst month of the year. NO longer OCTOBER, even if the Nasdaq drops 15% it has rallied back 30-40% in the fall the last 3 years!

Tommorrow will be no different! I am now a total believer in FARFEL's commentary of late the entire markets are RIGGED .

To always favor the stock owners,unless they are GOLD stocks those are manipulated down, bye default, due to the cap on the physical Gold price.

Short of a complete collaspe the P.O.G will never be allowed to rise, and if it does for some unforseen reason it will be pounded right back down again to punish the people that bought it,over and over and over again until the pain is so great that you will SELL,SELL,SELL.

Tommorrow will be proof of the above, i guarantee it.

Hey F.O.A or T.G? what happened to you? I need to hear how Gold is going to $30,000/oz. Did you get mauled by a gold bear a.k.a, a "short seller" or did a stock Bull get to you?

We all await your return, why have you stopped posting????
Are things that busy that you have no time for us? Or have things in the Gold market got that bad, that you have thrown in the towel on the "Gold Trail"

G.T

Where R you?
On vacation?
Just wondering if you had a comment on the China story?
Do you think the US Government will have any response ?
I don't expect any as their masters have spoken!
Another sad day for the USA.

Shifty
:(

Whatever it turns out to be -the Dow tries to at least show some vigor in view of renewed strenght of the US $ - All other -paper currencies - have either surrendered, or feel happy supporting the save haven scam (excuse me opportunistic export potential) - and a r e happy with what their getting for their toil. Well, so am I - I'm exceedingly optinmistic that I'll get my share as well. And well deserved! I would stress.
After all, I was believin' in a new unit of account coming into existence in an economically, politcally and l.t. even defense unified Europe - The EU - a new world power emerging, printing their own fiat - even stating that gold is an important reserve asset officially - and then doing nothing to protect this important asset. No, just on the other hand, the old political differences start to resurface in view of too much (financial, or is it political?)power in the hands of the ECB, instead of the proven hands of the Bundesbank, or (maybe not so proven) in the Banque Centrale de Francaise.

Undermining the ECB by the major countries, means undermining the EU. And as our old friend from 68, good old Joschka, the coctail (mostly of the Molotow variety) throwing Fischer is kindly letting us know - it's time for a Europe of two speeds. So, I'm really happy, I don't have to hurry, not to worry, I'll get there in time too... and as one of the most serious Austrian comedian's remarked about "bikers": " ... though I don't know (yet) where I'm headin', the faster I'll be there...!
Sounds like the fate of ... please state your preference:
Economy
US $
Greenspan
Equities
Bonds
Debt (double bubble)
Budget Surplus: a. spend it
b. pay back some insignificant ... debt
Or forget all the above, since we're the greatest ... spenders the world has ever seen!

Enjoy the Summer's rally as long as you're not there - yet -
and don't ever ask "where"?

Oh well, wishing uncle Scrooge would at least have spared some silver quarters instead of copper pennies. At least it's not for gold alone! Or is it?

cb2

In twenty-five words or less WHAT'S WRONG WITH ARTICLE?

NEW YORK, Aug 7 (Reuters) - U.S. Treasuries drooped on Monday after a wave of buying dried up and market participants made room for $25 billion of new government supply due this week.

---------

By the way on "Who was the first writer to my knowledge using the tail wagging the dog metaphor with reference to COMEX gold pricing dominating physical gold pricing?"

It was R.E. McMaster, Editor, The Reaper.

http://biz.yahoo.com/rf/000807/n07613534.html U.S. Treasuries skid as market prepares for supplyBut you don't really need to whole story to figure it out.

.What's Wrong with This Article? Yahoo - Document Has Expired

Do I win !!!

$hifty

I'm afraid I'm too stupid to figure this one - after all the
treasury made my long (treasury) bond unavailable by buying all the goodies for themeselves - ending up in-verse (is that a dirty word?) - and issuing more of the short term variety at higher interest(ing - X) rates - really quite interesting say's Mr. carp to Missus, trying to avoid the hook of the shabby secrets of the wellfare statists' tirades against gold... as somebody said about the golden hook standing in the way of insidious confiscation of wealth ...

To the most In-Credi(ble)t-Creating- Creatures... (didn't wanna say it)the most magnificent magician amongst the world's topmost chameleonic turncoats - Alan's - the Green
Spanners - ...
Die spinnen, die Roemer (Asterix) ...

I may have posted something about this movie previously but here it goes again as I rented the Video and watched it again. Made in 1981 starring Kris Kristofferson and Jane Fonda, the plot is really very close to what I think will happen in th4e near future. A large bank is in trouble and it is saved by Max of Ist New York Band, sort of a AG type guy. He hires Kris to straighten bank out. In the meantime Max is cooperating with some Arab countries to transfer Large sums of money to secret account and from there to buy gold. All this is very secret as it means that the Arabs are pulling out of the dollar and Masx is trying to make it an orderly transition. Kris gets wind of the account which is being kept secret by killing those that know and who confronts Max. In the meantime Jane gets wind of the story and lets the Saudis know she knows. Then the next day all the Money is pulled out of American Banks, causing bank failures and general panic in financial markets. The dollar begins to fall and the bank runs follow. In one scene one of the bank employees come running in and says" The dollar is falling and GOLD is at $2000.00 per Oz". the ending shows riots in different cities and countries as wide spread unemployment hits the people. That is a real fast critic of the movie it really is pretty interesting. Oh, by the way , what do you think would happen in a similar situation today? White Hills

Don't worry Michael,
I'll settle for the golden handshake and retire -

- for tonight!

Good (k-)night - cb2

Please forgive the spelling as I am trying to wash and brush dogs while typing. Not really good idea, Also Max blow his brains out at the end of the movie and Kris gets Jane but they are both broke. White Hills

Please don't misunderstand me, I appreciate the role of the junior gold mining company as well as you, and perhaps in the end it is the lack of future production, coupled with the central bank clampdown on lease source, which undermines the carry trade.

In most of my writings on this branch of goldology, I simply try to make clear that gold stock ownership is not a proxy for owning the real thing, like many stockbrokers would like to have the gold investor believe. They are two distinctly different asset classes. Once the client understands that purchasing stock in a junior mining company is a speculative venture, and not a substitute for owning gold money, they can allocate funds properly and accordingly. I have spoken over the years with too many investors who were persuaded to invest a substantial amount of their assets in the juniors ( and the majors, by the way) and that portfolio is now worth less than ten cents on the dollar. I still get the calls and they usually want to know if I beleive there's any hope for this or that company. Quite often, they already know the answer to that question. There only choice is to hold and hope. Had these same investors prudently carved off a small protion of their gold investment for the juniors, put another portion in physical, and generally diversified across the asset spectrum, they would not be telling a tale of woe. That's all I'm trying to say and its pretty much the same message I've always delivered. On the other hand, as you so rightly point out, a small investment in the right place could yield a substantial return.

I have little doubt that you agree with me on this issue, but I thought I needed to state it directly as a follow-up to both my own writings on Sunday and your subsequent commentary, so there was no doubt where I stood.

Thanks, CoBra(Too).

The link works on my computer. Do you really get an error message on yours?

http://www.gold-eagle.com/charts/gegfi_intro.htmlBy the way, did you see that Vronsky has developed an alternative index to XAU? Go to the link. . .

Good idea, Vronsky. . .

I too get "Document has expired". USAGOLD, you probably have cached the article locally on your machine and that version is what is retrieved when you click the link. To test this, you can clear out your cache and see if the link continues to work. I suspect it won't.

I too get "Document has expired". USAGOLD, you probably have cached the article locally on your machine and that version is what is retrieved when you click the link. To test this, you can clear out your cache and see if the link continues to work. I suspect it won't.

http://biz.yahoo.com/rf/000807/n07613534.htmlSorry about that wild speculation. USAGOLD, it appears you added the text "U.S. Treasuries skid as market prepares for supply But" to the link which makes for one strange URL. The link above works.

Yes, and I just checked again still no go.

$hifty

Thank you! I got it now too.

German not so good but you get the message.
China to be a factor.

96.5 cents for a bu. The u.s. is sick. big time.

http://biz.yahoo.com/rf/000807/n07613534.html U.S. Treasuries skidas market preparesfor supply
Prices fall on treasuries as 25 bil in new paper pays of 25 bil in maturing securities, while paying down 71 mil of debt. They make it sound like a lot, but doesn't the government spend 71 mil in about ten minutes?

Nice post. As a fellow contrarian, I always thought it best to question everything....

Where for art thou, Gold?

Where is FOA lately?

Ishnalas' Wisconsin, by itself stands alone.

Haleakala- House of the sun, Maui, The Best.

Grand Cayman Freedom!!!!!!!!!!!!!!

It's time for Gold!!!!!!!!!!!!!!!!!!!!!

Love Turks and Caicos too!!!!!!!!!!!!!!

Soloman Weaver! -- Do you mean that you are not with FOA ?
The Hobbits thought that surely you were guarding him. -- FOA must be reshaping the new iX markets as it looks as if a few things slipped out of place and the whole thing may be injurious to the Euro. -- He was last seen in the tube between France and England in his GOLD Mercedes.
<;-)

Cavan Man,

Gore's selection of VP is not going to help him. He's getting murdered in the polls, even after the announcement. I must also disagree re: Hillary in 2004. She'll be slinking out of NY with her forked tail between her legs this November, and find that her pathological, sex-addicted hubby has "screwed" her out of any chance at the presidency in 2004. Ever hear of Clinton fatigue? Actually, it's gone beyond fatigue to outright repulsion. Couldn't happen to a nicer family!

Oro,

Would you consider retrieving and posting the Barrons article on ESOPs you mentioned earlier today? I followed the link, but access is apparently limited to WSJ Interactive subscribers.

M

Sorry Solomon --- can not spell cat somedays !
<;-(

http://www.theonion.com/onion3626/hersheys_pay_obese.htmlHERSHEY, PA--In one of the largest product-liability rulings in U.S. history, the Hershey Foods Corporation was ordered by a Pennsylvania jury Monday to pay $135 billion in restitution fees to 900,000 obese Americans who for years consumed the company's fattening snack foods.

($hifty: check out the whole story at link above! I cant believe this. It makes me wonder how much Goldman Sachs and friends will owe the Gold bugs for mental anguish!)

Cali moving into gold. Ask D.O.J. there lawyers work both sides.

You ain't seen nothin yet.

Spot the Dog is at the HIGH of the day at the end of the day! Golden sunset in Hobbitsville.
<;-)

Mike Abbella, X d.o.j.

Russian boys will gut you!!!!!!!!!!!!!

we're here to stay.

Gold. Street people know, wake up CB's

Spot the Dog is at the HIGH of the day at the end of the day! Golden sunset in Hobbitsville.
<;-)

Both will kill you!!!!!!!!!!!!!!!!!!!!!!!! No questions>

It's a joke. (You knew that, right?)


Gandalf - OK, we heard you the first time!

dec gold close over 278.70 very positive today. Don't be deceived.

Assholes in govt. have made you feel that gold is contra ban like drugs, when in fact they are the ones addicted to the ultimate investment.

You see they are assholes, these are the facts, sorry for the tone .

you win they lose , stick it to them.

I did not know that! I heard it on the radio and had my doubts so I clicked on dogpile and saw the story!
LOL
I'm glad , The world has not completely lost it's mind yet . It was starting to get like the twilight zone!



$hifty

That message that posted twice was my advise to Shifty that something smelled in the Onion and it was not Chocolate !
Somehow my ol'e computer sent the old message instead of the news one.
<;-)
Sing us all a new song, Goldfly !!
"Ol'e man Gandy"
<;-)

Spot the Dog just jumped to $274.50 !
Jump Spot Jump !
<;-)

I just went to the Onion and saw this one , I hope this guy is not a gold bug!

LOL

INDIANAPOLIS--Despite assuming that he had lost every last possible ounce of hope long ago, area office-supply coordinator Bob Dempsey, 31, was surprised to discover Monday that he did, in fact, possess one tiny additional shred of hope, which he subsequently lost.

"whisper" number for cisco kid is 17c/share.
"The soft landing is alive and kicking for the markets, believe it".

G.T

Tuesday, August 8, 2000 2:17 p.m. JST
IMF Annual Report To Recommend BOJ Keep Zero-Rate Policy
WASHINGTON (Nikkei)--The International Monetary Fund will state in its annual report on the Japanese economy that it is too early for the Bank of Japan to scrap its policy of holding short-term interest rates near zero, The Nihon Keizai Shimbun has learned.
====
Does anyone do what the IMF suggests ?
<;-)

I suggest you get a trial subscription - or better yet, an actual subscription.

Lots of good stuff from the combined online site. WSJ, Barron's, SmartMoney, and DJ newswires. Worth the money.

View Yesterday's Discussion.

@ wolavka With about a million acres in flames, shouldn't there be a rise in Lumber prices. @ $50,000 yield per acre there's a loss of 50 billion $ of inventory.

Alternativly, there is the consideration that the fire epidemic will lead to more generous logging practice approvals.

Depends on where destruction / hits growers.

Water tables dropping will cause human problem if this winters moisture does not pick up. Strange times.

Pockets of problems effect some not all.

Interesting post on kitco by albert Chung (sp) on gold .

HEDGING Some new twists to an old argument

Investors have turned against gold companies that hedge after two companies were almost pushed into insolvency because of it. But the industry remains divided on the issue,
by Gillian O'Connor

At last month's annual meeting Peter Munk, chairman of the Canadian gold miner Barrick Gold, mounted an impassioned defence of the company's strategy of hedging (selling forward) the gold it produces. Twelve months ago such a defence would have been unnecessary. Barrick has been hedging for years, and argues that this has generated more than $1.5bn of extra profit for its shareholders. The snag is that North American investors have turned against gold companies that hedge after two smaller companies, Ashanti and Cambior, were almost pushed into insolvency by badly positioned hedge books (portfolios of forwards and options) when the gold price rose sharply last October. The shares of known hedgers, such as Barrick, have stagnated in spite of good earnings and cash flow figures. And on the prosaic yardstick of the company's share price, Barrick's additional $1.5bn of hedging profits have not been reflected in its shareholders' wealth. The hedging debate is an old one. Some miners have never hedged, on the grounds that their job is to get the stuff out of the ground, not play the derivatives market. Others argue that any board of directors that purports to look after shareholders' interests has a moral duty to hedge, if only to take advantage of the "free" profits offered by the gap between the price of borrowing money and the price of borrowing gold. And some investors have always been against hedging on the grounds that it makes it harder for them to know the effect of changes in the gold price on companies' profitability, and to hop on and off the shares accordingly. But the debate has developed several new strands over the past year. Critics have argued that hedging sales are bad for the gold price, and therefore the industry at large, even if they are good for the particular company that hedges.

And some companies that hedge in North America and South Africa have complained that investors ought to distinguish between their conservative hedging programmes, which are safe and beneficial, and other people's high risk ones. In Australia, by contrast, where hedging is a far more entrenched part of the gold mining scene, the debate has never really taken off. True, several Australian companies have paid lip service to the wave of anti-hedging sentiment by saying recently that they have not been increasing their hedges. But the size and complexity of their remaining books would still make most North Americans boggle. Gold Fields Mineral Services, the consultancy, has argued that heavy selling by gold miners played a major part in driving the gold price down to just above $250 an ounce last year. Their statistics suggest that in the first nine months of 1999 producer hedging added 715 tonnes to the market. Forward sales do not add to the amount of gold dug up, but they accelerate its impact on the market's supply/demand balance. It was as if the Bank of England had dumped the whole of the UK's gold reserves on the market. (Neatly enough, UK reserves also tallied 715 tonnes before the auctions began.) In the fourth quarter of 1999 most gold miners (but not the Australians) bought back some of their hedges, and so took gold out of the market. And in February of this year the new president of Placer Dome, the other large Canadian gold miner, called for the industry to rethink its hedging policies in order to support the gold price, and said that it would not be taking out any new hedges. Most of the other companies toed the line, albeit with varying degrees of enthusiasm. Thereafter, many companies' reports on trading in the first quarter of 2000 emphasised that they had not taken out new hedge contracts and "delivered into" existing ones, which in theory ought to tighten market supplies, and help support the price. The fact that it has remained generally quite weak suggests either pledge-breaking on a massive scale or that hedge selling is only one of the factors that can create weakness.

Black Blade: I really don't have a lot to say on this matter as I would likely be "preaching to the choir". However, although Barrick (ABX) may have realized greater profits through hedging, the shareholder has not enjoyed any enhanced share value. In fact, ABX shareholders have suffered lower returns. The fact that forward sales hurt the industry as a whole, the concept of forward sales has hurt shareholders of gold equities, including ABX. In fact, shareholders of Harmony Gold (HGMCY), an unhedged miner, have realized a near double on the value of their shares during the same time that ABX was plummeting in value. The only ones benefiting from the ABX forward sales programme appear to be the Fat-Cats in management who squirrel away the fat bonus checks and incentives, while the shareholders go wanting.

The following post from theminingweb.com forum illustrates the point that hedged companies are not necessarily more profitable than unhedged. NOTE: This is not posted as investment advice, but only to illustrate a point about hedged vs. Unhedged miners and the alleged profit picture.

I'm not angry with ABX, but I still do not see any real value in this Turkey. HGMCY PER stands around 11.8 vs. 22.4 for ABX. HGMCY is a bargain in comparison. Same can be said of other SA golds such as Goldfields, and AngloGold. Shareholder value for ABX has been dismal at best. While
ABX management has reaped healthy bonuses, the shareholder has been given the shaft (pun intended) and has seen the value of his stock fall faster than a lead balloon. Dividend yields (payouts) are just the price that one expects to receive for as a reward (suffering) for holding such an "excellent" and "profitable" company like ABX. Note that AngloGold rewards shareholders with a nice payout for
their long-suffering commitment (They also have a rather large hedge position as well). Oh yeah, AU, GOLD, and HGMCY are also on the acquisition trail and quite profitable. As far as the US inflation statement, that is debatable as well, unless you actually believe the CPI and PPI numbers are real and not manipulated. That of course could take a lot of bandwidth explaining how the Bureau of Labor Statistics phonies up the CPI, PPI and the Core Rate numbers. But back to some basics with ABX vs. SA Golds. First off, HGMCY has much more leverage/gearing toward the gold price than ABX, that's a given. HGMCY is somewhat vertically integrated (production, refining, marketing, end-product manufacturing, etc.)profiting from upstream and downstream operations whereas ABX has to rely on hedging its product (leverage/gearing to a rising POG is minimal). Current Rand=Dollar(US) exchange rates favor SA golds as well. ABX's future looks even more glum in terms of forward looking earnings growth rates. Just some examples (these are pulled from analysts estimates in quicken, though all are very similar to other sources as well such as Zacks, CIBC, etc):

ABX: PER 22.4, GR -0.07%, PEG NA,
AU: PER 12.8, GR 17%, PEG 0.753 (Not Bad!),
GOLD: PER 17.3, GR 25%, PEG 0.692 (Better!),
HGMCY: PER 11, GR 67.2%, PEG 0.176 (outstanding!).

GR is forward looking growth rate estimates, ABX does slightly better/worse depending on other estimates from other sources, in some instances HGMCY comes out much better . PEG Ratio (Price/Earnings divided by Growth Rate).

I don't have anything personal against ABX, I just see other gold mining equities that provide much better potential for shareholder value. I think that ABX is a real Turkey. Granted, there are many more gold mining companies that are much worse than ABX. However, when this great "profitable" gold company only rewards management with fat bonuses, and shareholders with a declining share price and a pitiful dividend payout, one has to wonder who management is working for.

http://www.ft.com/ftsurveys/industry/scce36.htmSources: Bride News, and Financial Times.

Asia Precious Metals Review: Gold rises in sluggish trading
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Aug. 8--Physical demand continued to support spot gold prices in Asia Tuesday in sluggish trade, dealers said. Market sentiment for gold improved after the U.S. $272 per ounce level repeatedly held over the past two days, dealers noted. Spot palladium remained weak after falling sharply overnight in the United States, while spot platinum firmed on physical demand, they said. Spot gold was also firmed in line with strong prices of the Tokyo Commodity Exchange (TOCOM) gold futures, dealers said. Selling interest
was minimal in the spot market on Tuesday, they added. Owing to improved market sentiment, dealers adjusted up spot gold's nearby resistance to $276 from $274. Gold's nearby support is set at $273. Trading of spot platinum and palladium was quiet in Asia as Asia-based players were reluctant to take fresh positions due to the recent volatility, dealers said. Some spot dealers see physical demand supporting spot platinum at the current price level. Some dealers said the next movement of palladium remained unclear, while others expected the price to fall sharply in the near term on technical corrections. TOCOM palladium futures fell sharply on Tuesday hitting its limit-downs following the overnight's NYMEX price fall, TOCOM dealers said, adding the futures almost lost last week's gains. Expectations that Russia will start palladium 2000 shipments under long-term contract to Japan in September did not impact heavily on the
TOCOM palladium on Tuesday, but the price could fluctuate in the near term given the sluggish market conditions, the dealers said. They said few individual speculators traded TOCOM palladium futures
currently due to its volatility, and many end-users kept away from the market to wait for lower prices.
One physical trader said this week's falls in TOCOM palladium futures were good to players wanting to buy the metal, and a further price decline would activate buying interest from Japanese end-users. TOCOM platinum futures rose on short-covering on Tuesday. Dealers said individual speculators still expected the platinum price to remain firm in the near term on expectations that Russia won't start 2000 platinum shipment under long-term contract to Japan soon. Many dealers and analysts don't expect significant changes on platinum and palladium supplies in Japan even if Russia's export agency Almaz starts 2000 delivery of the two metals under long-term contract to Japan, as Russia's supplies are likely to be smaller than last year.

Black Blade: Gold still sluggish but stabilizing. Profit taking continues on PGMs as traders are uncertain about Russian claims to begin shipping in September. Don't count on it until the metal is actually delivered. The Russians have cried "WOLF!" so often, that this is likely just another head-fake. BTW, Rh is down -$200/0z in overnight Asian trades. Some traders apparently were concerned that the TOCOM may enter into the PGM market as they did when the Pd default came into play, so some traders decided to take profits. The dominoes fell, and now PGMs may be set to consolidate at close to these levels.

PGM OUTLOOK:

Riding the white wave
Platinum has been temporarily eclipsed by palladium, but has more staying power,
by Gillian O'Connor

Platinum and palladium are textbook metals. Prices periodically take off as a surge in demand squeezes supplies, but nemesis usually follows in fairly short order. Either something happens to cut demand, just as supply is expanding to plug the by now non-existent gap, or the volatility and high prices persuade powerful customers to switch to an alternative. In the 1970s the introduction of autocatalysts, which employed platinum in the process of cleaning up motor exhaust fumes, broke the producer cartel and sent the platinum price soaring. But the recession provoked by the oil crisis hit demand just as a number of mine expansion programmes finally came onstream. The result was that the price, which had topped $800 an ounce, dropped below $300 again. The second boom came in the late 1980s, when economic growth sent demand soaring past supply again. Again there was a surge in investment, and several new projects were developed. This time the effect of the downturn in the US motor market was exacerbated by a substantial increase in Russian exports of all platinum group metals. Again, the platinum price collapsed.

Meanwhile, palladium, which had always been much cheaper, began to win customers from platinum. Most palladium is produced in Russia, and the Russians kept the price relatively stable. Industries that could use either platinum or palladium, notably the motor manufacturers, began to switch to palladium. In 1990 most palladium went to the electronics and dental markets; autocatalyst usage was tiny compared with that of platinum. But by 1995 palladium had caught up, and by 1999 its autocatalyst sales were three and a half times as large as platinum's. But palladium's new-found popularity looks set to wane gradually, and it is likely to be the junior metal again by the end of the decade, if not earlier. Demand has shot well ahead of mine production and, at the end of the 1990s, the Russians, who had been plugging the gap with sales from their stockpile, appeared to lose control of their exports. Supplies were erratic and unpredictable, and prices accordingly went all over the place. Last year even platinum got caught up in the Russian exports tangle. But in the longer term the victim looks likely to be palladium, which has recently also become more expensive than platinum. Customers have been switching or preparing to switch from palladium to alternatives, and working on ways to use less palladium if they do continue to use it. Some electronics customers are already turning to nickel. But in autocatalysts the big beneficiary is likely to be platinum - or other platinum group metals such as rhodium. In May, for example, General Motors said that it is planning to cut its palladium use by 30 per cent by 2002 through a combination of improved technology and increased use of platinum. Such switches take time, though much less time than they used to. And the palladium price is likely to stay high and erratic for the next year or so, since demand still exceeds supply and is growing, and the Russian stockpile, which has provided a buffer, is dwindling. But in the medium term it is platinum which has become the hot metal again.

This leaves the South Africans, who produce the most platinum, chuckling all the way to the refinery. But only if they do not repeat the mistakes of the last century, and expand so fast that they kill their own market. In some industries, such as aluminium, the industry leaders are prepared to act as "swing producers" - expand production when demand expands, and mothball some capacity when it slackens. Alcoa and Alcan both do this, because aluminium is very vulnerable to substitution by other metals, and they are as keen to keep prices stable as their customers. Amplats, the industry leader in platinum, insists that it has no intention of acting as a swing producer. But it considers prospects for the metal so encouraging that it is starting a major expansion programme, which will increase production to 75 per cent above its 1999 level by 2006. Several other companies are also starting new projects or reopening old ones in South Africa. Already the metal price movements mean that at current prices the market value of South Africa's annual production of platinum group metals rivals that of its gold output. Soon it could substantially outstrip it. In the Northern hemisphere Norilsk Nickel, the big Russian producer, has hinted that it too may be increasing its output of platinum group metals, although this would have more effect on supplies of palladium than platinum. Unlike palladium, whose future is inextricably linked with autocatalysts, platinum's customer base is more evenly spread. Autocatalyst sales, stagnant or declining during the last decade, are expected to start growing again, as emission standards tighten steadily round the world. Sales for petrol engines will benefit at palladium's expense. But diesel engines already normally use platinum. So any increase in the popularity of diesels, or any anti-pollution measures specifically directed at trucks and other heavy vehicles, will increase platinum sales. But, unlike palladium, platinum also has a non-industrial market: jewellery. The popularity of platinum jewellery increased steadily for most of the past decade. But in the past couple of years it has soared, thanks to strong sales in countries other than Japan, its traditional stronghold. The market for platinum jewellery remains tiny compared with that for gold. And until the last few years Japan accounted for the vast majority of sales - which became bad news when Japan entered its seemingly endless recession.

But unlike gold, where the big jewellery markets of India, the rest of Asia and the Middle East are primarily investment markets in disguise, platinum jewellery has always been bought as a fashion item. Demand has increased steadily from a very low base in both Europe and North America. But in the last few years it has gained additional impetus from what is known as the "white wave". The taste for white metal jewellery - white gold, platinum and even stainless steel - moved out from exclusive jewellers to high street shops. Although absolute sales in the US and Europe are still modest, some of the increases are impressive. In North America, for instance, demand rose by 22 per cent in 1999, and in the UK it increased by no less than 68 percent. But the real surprise has been the staggering growth in demand from China, which appears to have survived the metal's price rise. Indeed, platinum pundits Johnson Matthey say: "It would not be altogether a surprise if demand from the Chinese platinum jewellery industry were to overtake demand from Japan in the near future."

Black Blade: Good analysis overall.

SILVER OUTLOOK:

SILVER: Resilient in face of supply side pressure
Demand for jewellery, silverware and industrial applications is rising, but Chinese exports remain a threat, by Paul Solman

Although the prices of gold, platinum and palladium have swung sharply in the past year, silver has remained within a narrow trading range. Two years ago spot silver prices were pushed up from $5.50 a troy ounce to $7.80 a troy ounce on revelations that US investor Warren Buffett had stockpiled about 16 per cent of world supplies. But despite a surge in government and central bank sales, in 1999 the average price of silver fell 6 per cent. Over the past year the average price has been $5.22, and a similar trading range of $4.90 to $5.50 is expected for the next 12 months. Nevertheless, some analysts believe the silver market has held up well to changes in supply and demand. Gold Fields Mineral Services, a London-based research group, says: "Silver prices have shown considerable resilience in the face of massive supply side pressure." China led world sales last year, putting an estimated 61m troy ounces (1,900 tonnes) on the market and accounting for almost 7 per cent of world silver supplies. However, mines failed to increase production for the first time in five years. A big factor was a pollution scare in Mexico, the world's largest producer, which meant that one of the country's main processing plants was unable to accept material from many small miners. The narrow trading range in 1999 also sparked a wave of disinvestment, which rose 62 per cent last year to 79.5m ounces. "Funds generally did not seem to show a great degree of interest in the market last year, as the perception appeared to be that the price would remain locked into a range until Mr Buffett and other large holders gave some indication of what their intentions were," says Gold Fields Mineral Services.

On the demand side, jewellery, silverware and industrial applications fuelled a 5 per cent rise in fabrication demand in 1999, and consumption is expected to stay strong. Offtake by the photographic industry, which uses silver to make film, is also likely to remain stable, though it rose only 0.7 per cent last year. Analysts say the threat posed by digital photographic technology remains some way off. Although the price of digital cameras is falling and image quality is improving, costs remain high relative to traditional, silver-based photography. Meanwhile, analysts remain divided as to whether Mr Buffett and his company Berkshire Hathaway still retain his silver stockpile - at one stage thought to total about 129.7m troy ounces. Early last year it was suggested that Mr Buffett had started to dispose of his hoard but many analysts believe those rumours to be false. But instead of being viewed as a positive vote for silver, Mr Buffett's holdings are seen as overshadowing the market. They could also help to replace China's sales on to the market, which are expected to slow this year. "The key point is the level at which Mr Buffett is prepared to sell," says Paul Walker at Gold Fields Mineral Services. "If it is $6, for example, that would suggest the price can not go any higher than that before substantial supplies are made available." Andy Smith of Mitsui still believes it likely that Mr Buffett has run down his stockpile. "Since March 1998, no annual report of Berkshire Hathaway has mentioned commodity prices in market risk disclosures, yet these are supposed to include significant risks," Mr Smith says. "Ergo his silver position is insignificant." But he adds: "While initially a relief, his exit might mean another 20 years before the next major investor comes along to breathe some life into this market."

Black Blade: The supply equation is questionable. Andy Smith obviously doe not understand Warren Buffett's investment philosophy. He should read "The Buffett Way".

Meanwhile, S&P Futures down -5.20, fair value down -7.28, indicating a rocky open on Wall Street. Oil up +$0.08 to $28.99/bbl. Au up +$0.30 at $273.30, Ag unchanged at $4.89, Pt recovering up +$7.00 at $573.00, Pd up +$10.00 at $742.00, and Rh down -$200.00 overnight in Asia. Could get interesting today.

Platinum is up +$7.00, and Pd is up +$30.00 in another run-up at the NY open.

Pt up +$8.00, and Pd up +$45.00!

Thank you for your response, MK. I've never had any doubts about where you stand and admire your stance.

Incidentally, there is an interesting letter from a Bill Henderson from Nevada to Bill Murphy at the cafe stating with almost similar (to my) words, what I've been saying about the old Silver -now Gold - State.

Much more to the point is the latest Harry Schulz letter, giving some insight in Chris Thompson's (CEO Goldfields) thinking at the FT Gold coference in Paris. CT " The world is running out of gold reserves - faster than you think!"

I've always thought that this may be the case, as you Michael have also stated this as the potential turning point, we now hear it from one of the most prestigious gold miners, though it still seems like a stealth bomber, hovering behind the clouds, though it is like awaiting the accident bound to happen. This, amongst other indications are behind my reasoning that the gold markets are close to a
sea change in conception, where the hedge gangs, the BB's and CB's will be sweating lead bullets instead of the golden variety they've already squandered at fire sale prices.

I think were more on the same wavelength as you might have felt and I'll take the opportunity again to thank you for your marvellous website were very real people meet and discuss their favorite topic.
cb2

Black Blade- thanks for your latest posts and hard work- in particular your excellent comments -

Wolavka - got a kick out of your word for word translation-
took me a while to understand my own lingo! - w.t.s.t.f

http://www.usagold.comWe have a potential double-bottom on the chart (Dec gold) in case anyone has an interest, afterall, everyone looks at the same charts...

We turned in this area last time...277.50 actually...

If this area holds...adding more coins to your stash from our sponsor is good business for all...

Double bottoms are a technical tool that sometimes pay nice "dividends"...good luck team-mates.

Yes, I see that, Do you also see potential to run back to 284, which forms rt side of head for reverse H&S.?

In your opinion, although the momentum is lost and the Euro is floundering, is there any hope of at least an "official" yet indirect connection of the Euro to AU in the future or is that the million $USD question?

Also, I cannot believe ix equities would be quoted in dollars. I know that's a complex subject but, what a potential disaster for the Continent!

http://www.usagold.com/Order_Form.html8/8/00
�Current
�Change
Gold Spot(Indication)
273.60
-0.50
Silver Spot (Indication)
4.91
-0.03
30 Yr TBond Sept CBOT
99~17
+0~07
Dollar Index June NYBOT
111.18
+0.03


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(8/8/00) www.USAGOLD.com Daily Market Report . . . Gold was
slightly weaker at the New York open after a quiet night overseas.
We did have reports of strong physical demand and short covering
in Asia overnight despite weakened demand in India, physical
gold's largest market, due to a delay in the monsoon season and
the weaker Indian rupee. The monsoon delay, according to Economic
Times, could affect the amount of cash rural gold buyers, who make
up the bulk of India's gold buyers, will have to make gold
purchases. The European gold markets were quiet as the summertime
slowdown continued to dominate psychology.

An interesting Financial Times article published this morning
reinforces an argument made here several times in the past that
aggressively hedged gold mining companies are increasingly seen as
a bet against, rather than for, gold. As a result, investors are
increasingly shunning those companies for one's with less
aggressive hedge books. This is important to gold physical owners
and advocates in the medium to long term because it will
eventually cause heavily hedged mining companies to reassess their
game plan in the interest of keeping a strong market for their
stock. A key part of that assessment will be whether or not to
continue forward selling programs that have contributed
substantially to gold's weakness over the last few years. Any
major change, and reversing of hedge positions, could have a
dramatic effect on the price of gold itself.

As the FT article points out, "The snag is that North American
investors have turned against gold companies that hedge after two
smaller companies, Ashanti and Cambior, were almost pushed into
insolvency by badly positioned hedge books (portfolios of forwards
and options) when the gold price rose sharply last October. The
shares of known hedgers, such as Barrick, have stagnated in spite
of good earnings and cash flow figures. And on the prosaic
yardstick of the company's share price, Barrick's additional
$1.5bn of hedging profits have not been reflected in its
shareholders' wealth." To follow this building sentiment among
gold stock investors to a logical conclusion, one wonders what
would occur to Barrick's stock price if it were to liquidate its
hedge book and the gold price went quickly over the $400 mark.
Would that not constitute a more effective corporate strategy in
the long run? They must see that it beats the tar out of
attempting to justify a hedging policy that has already been
proven to drag down stock values in a rising market.

Maybe Barrick will see the light, but we doubt it. The Financial
Times in that same article took note of Peter Munk's "impassioned
defence" of hedging at Barrick's annual stockholder's meeting.
(Munk is chairman at Barrick) At last year's meeting, if memory
serves, the same Mr. Munk offered an equally impassioned defense
of gold as a monetary item which should be held sacrosanct in the
official reserves of the world's central banks. He got his way on
that one when the Washington Agreement was made public in
September. One hopes he sees the light on his own company's role
in keeping down the gold price and makes the proper amends.

That's it for today, fellow goldmeisters. We'll see you here
tomorrow.

An Invitation:

If you like the type of analysis you just read, you might find our
newsletter interesting. The August issue of News & Views:
Forecasts, Commentary & Analysis on the Economy and
Precious Metals, reveals some very interesting statistical
information on the worldwide gold derivative position and offers
the outlook for gold from several analysts.

Short & Sweet opens this month as follows:

"Now that gold has successfully navigated the July doldrums,
what do we have to look forward to? How does a price of $2500
per ounce sound? That's the number Leigh Goehring of Prudential
Investments dropped in a Forbes magazine interview in mid-July.
His reasoning echoes themes developed in this newsletter last
month: "I am a raging bull when it comes to gold," he declares.
"In times of inflation, people always end up just gravitating to
it. . . The period where the U.S. economy could expand without
fear of inflation is quickly coming to an end."

For those unfamiliar with our widely circulated newsletter, a few
words of description are in order. It's publication is greatly
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gold news and opinion available today. The Short & Sweet format
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and opinion without the unnecessary fluff. Appropriate charts,
tables and graphs are also published to better summarize the
information. We also offer the clever political and financial
cartoons of the award winning Ed Stein of the Rocky Mountain News.
News & Views is a private letter offered free to our current and
prospective clientele.

Along with the latest issue of News & Views, you will receive our
Gold Almanac 2000 which offers fundamental background on the
yellow metal. The theme of this year's Almanac is wealth
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newsletter and Almanac or click above.

Those COMEX bullyboys just did it AGAIN ! -- Hit Spot for a $2 drop when the COMEX opened ! -- AND some folks still think that there is no conspiracy ? -- They are trying to PROVE GATA correct !
<;-)

CM - re iX, personally I can't imagine any other currency
than the Euro as contract currency for this new iternational X-change. Though, if the Euro, as some may feel will never in reality outlive its infancy - anything might be possible.

The management of the Euro by the ECB may be described as
benign neglect so far, though it suited the economies of Euroland nicely. The political equation of the softie currency is a different matter, alltogether. The Germans want their strong and stable DM back, while France wants politics to influence ECB policy, while others may further
defer joining the 11 euro block countries. Something has to be decided soon, but again I doubt it, since there is a total absence of any common political will.

The ECB reserves include 15% of gold holdings and a few months back there was some talk about doubling the gold component, which seem to have been abandoned. Technically all 11 members would have more than sufficient gold reserves to do the trick, but again I doubt it. Though I have been of the opinion that there should be more to the Washington Agreement than a brief price spike, again I've given up my hopes in view of Deutsche Bank's and UBS's gold derivative positions. It seems that the shirts (not shorts) are closer to EU CB's heart, than the ECB or the Euro.

My 2 cents only and hoping that history will prove me wrong. Gotta run - take care cb2

FOA said long ago if the euro fails,Gold will go even higher as there would be no alternative to the dollar.100'000$/oz? Don't say it is impossible!Can you spell "total chaos"?

@all:assuming there will be a new Gold market,what do you think,is it better to introduce it before the real euro starts in 2002?Or are they running out of time anyway?
My Gold biased view: it would strenghten the acceptance of the euro money considerable,think about all those DM loving germans etc.!
The new money must be better than the old one.
Look what happened to the "neue Rechtschreibung" (new spelling reform),the Frankfurter Allgemeine Zeitung just showed the middle finger to the bureaucrats,"we use from now on the old spelling again,period"

The trail faded away in the sand.And now we are just thirsty.

If I were to personally meet the great man, I'm absolutely certain that I would smash him in the mouth and follow up with a quick kick to the groin. I would then pick him up, dust him off and proceed to pick his brain for all it's worth. FARFEL is truely one of the great posters of all time. It saddens me to see him down on his "luck" but it outrages me to see a small cadre of piss-ant posters critize his comments. They are incapable of debate. They are lacking in any original thought. The only "claim to fame" that one of these clods has, is to argue with Ted Butler, over a subject that Teb has forgotten more about than the clod will ever know. The other "mindless wonder" can only swear at FARFEL....and swear poorly at that! Now, when The Great One swears we are not the least bit offended because it's done with such style and (dare I say it?) grace. The Great One can drop an "F" bomb which seem perfectly appropriate for the mood of his message. The "triumvirate of trash" at kitco are not fit to carry his jock strap...they'd certainly try to smell it...let alone direct a criticism at him. They are vulgar air heads, at best. (The third turd is a walking zero...enough said.)
Now I feel better...To examine an insightful post, go to Gold Eagle, look up FARFEL's challenge to Lenny, and enjoy.

http://www.bloomberg.com/feature.htmlI have been waiting/lurking in the deep forest until events resolve - havent seen TG though - he must be even deeper.

Here's another article on stock options from Bloombergs

The Tangled Web of Options Grants
By Graef Crystal

(Commentary. Graef Crystal is a columnist for Bloomberg News. The opinions expressed are his own.)

San Diego, Aug 8 (Bloomberg) -- Paul Revere's cry that `the British are coming' may be sounded again, this time by a chorus of American CEOs fearful that their precious stock options may be tossed overboard like so much unwanted tea.

Britain's rule-making Accounting Standard Board has proposed that U.K. companies charge the estimated present value of stock options against earnings -- a bold move by accountants that could wipe out the profits of some companies altogether.

This lionhearted proposal, I predict, is likely to reopen a debate in the U.S., where the granting of stock options has long been overly generous, as well as chaotic.

Under the present system, American companies charge their earnings with precisely nothing for stock option grants. When, for example, Walt Disney Co's Michael Eisner exercised stock options in December 1997, he took in $570 million dollars on a single day, though a portion went to pay taxes on his windfall. And not one cent was ever charged to the company's earnings.

That chaos reigns is clear from a study I just completed of the size of option grants in 1999 to CEOs of the 500 largest (by market capitalization) companies. I found I could explain only 17 percent of the variation in the size of these grants by taking account of differences in company size, company shareholder return performance and type of industry. Stated another way, 83 percent of the variations may best be put in the category of, ``Your guess is as good as mine.''

Zero Sum Game

A tangled web has been woven around stock options since the 1950s, when the American accounting rules-making body, then known as the Accounting Principles Board (APB), commissioned a number of academics to advise it how much an option was worth.

Thougheach academic was given the same set of facts, there was no unanimity on the subject. Where one thought an option was worth, say, $20 a share, another academic said it was worth $15 and a third weighed in at $10.

Then, in a magnificent non sequitur, the APB declared that since the learned scholars couldn't agree, the cost of an option should therefore be zero. Zero? Pardon me, but did any learned scholar say an option was worth zero?

To a conservative accounting body, the guiding principle seems to be, ``When in doubt do nothing.'' And that is what the APB did. Perhaps the board was buoyed by the knowledge that nothing, in mathematics, is zero.

So, for 50 years, American companies have charged their earnings with precisely nothing for stock option grants. Walt Disney's Eisner was simply following the Mickey Mouse logic that's prevailed for the past half century.

Galvanizing FASB

In the early 1990s, I wrote a book called ``In Search of Excess: The Overcompensation of American Executives.'' Among other things, I lambasted the successor of the APB, now called the Financial Accounting Standards Board, for inaction on the issue of stock options and suggested to Senator Carl Levin that perhaps he ought to hold hearings on the subject.

He did, threatening FASB at the subsequent hearings that if it didn't move quickly, he would ask Congress to order the imposition of a charge to earnings for stock option grants.

The Michigan Democrat's threat galvanized FASB. In 1993, it published a proposed regulation in which charges to earnings would be required, thus doing the right thing seven years before the British.

Then all hell broke loose. The business community reacted as though it had been gored (that's with a small ``g"). The Silicon Valley response was particularly vigorous. At another Senate hearing in which I testified, the then president of the American Electronics Association waved an auditor's study that claimed a charge to earnings for stock option grants would cause the typical Silicon Valley firm's profit to decline by 35 percent.

To my way of thinking, that staggering percentage was a most persuasive argument for why a charge to earnings should be imposed. After all, we weren't talking about minutiae here.

`Principles'

Others thought differently, swayed by Silicon Valley bleating that a charge to earnings would cause companies to throw all the little people out of the stock options boat. (Big grants for the big people were, of course, a necessity of life). Even California's liberal Democrats, Senators Barbara Boxer and Dianne Feinstein among them, joined to threaten FASB with its very existence if it went ahead with its folly.

One begins to understand why the American organization dropped the word ``Principles'' from its title for ``Standards.'' FASB demonstrated its lack of principles twice, first caving in to Senator Levin's threat and then, after crafting a proposal to charge earnings for stock option grants, giving in to Senators Boxer, Feinstein and cohorts by withdrawing the proposal.

While there continues to be no charge to earnings for stock option grants, companies do have to show (in an obscure footnote to their income statement) what the impact would have been had FASB not taken a dive.

All this helps explain the wild increase in the size of stock option grants. For example, between 1993, when FASB first proposed a charge to earnings, and 1999, the stock options of General Electric Co's CEO, Jack Welch, soared from a present value of $4.4 million to $29.9 million.

Fun House Mirror

Even worse may be the chaos in the size of grants. Consider, for instance, two companies almost identical in size but vastly different in performance. The first is Cox Communications Inc. Its three-year shareholder return performance ranked it in the top 22 percent of the 500-company distribution. It gave its CEO, James O. Robbins, an option grant in 1999 that I estimate had a present value of $1.7 million.

A second company, Fort James Corp., whose shareholder return performance ranked it in the bottom 19 percent, gave its CEO, Miles L. Marsh, an option with double the estimated present value, $3.4 million.

Such differences can distort the pay-for-performance principle in the manner of a fun house mirror. If Robbins doubles his company's stock price, he makes $3.4 million from his 1999 stock option grant. But given the much larger size of his option grant, Marsh can garner the same $3.4 million by generating only a 38 percent increase in his company's stock price.

Even if the British proposals for valuing stock option grants aren't adopted, the accountants have already sparked controversy and, in all probability, caused some knee trembling among CEOs.

For American accountants, the proposals should at least provide a fresh reminder of Sir Walter Scott's apt verse:

Oh, what a tangled web we weave,

When first we practice to deceive!

To All: I want to apologize to Farfel for the song I wrote about him two weeks ago (in which he put his trust in Gore and the Nasdaq, to a disastrous end). Farfel, I was just carried away by the first line of a song suggested by another poster, and I took it too far and probably humiliated you. We all love you here and look forward to your posts. Of course not everyone agrees with your pessimistic mood -- many of us believe with Trail Guide that the gold trail will be heating up soon. But we enjoy your vivacious posts and miss hearing from you. Please don't stop posting here because of my misguided attempt at humor.

I done Farfel wrong!
I won't write another song!

I'm still buying and waiting.

http://www.worldlinkfutures.com/charts/menu.htmThought I'd share...enjoy :-)

Oh, hang in there, everyone. Our day will come (when we're no longer laughed and snickered at for our views!).

Thanks for posting the extraordinary article on FASB and the British change in accounting rules. I have said repeatedly that the new accounting rules will not only have an impact on the gold industry, but the corporate community as a whole. We have a market driven to extremes by derivatives -- it lives by the derivative; it shall die by the derivative.

To quote:

"Then all hell broke loose. The business community reacted as though it had been gored (that's with a small ``g"). The Silicon Valley response was particularly vigorous."

And why shouldn't it be vigourous? It seems that printing money is not reserved to the central bank. We can all join in, if the market is stupid enough to grant value to what's printed. And this market is plenty stupid. A narcotic to rival any. . .and legal. I would have howled too.

I believe that years from now some brilliantly endowed professor sagely esconced in some hallowed hall will be put upon by his students to explain what was the one single event that brought an end to the greatest financial bubble since the days of John Law, and he will retire to his studies only to emerge with a single utterance:

"It was a change in the way they counted their money; it was all in the accounting and when the accounting broke down, IT broke down. Billions were lost in a moment of time and the twist of an awful fate and only a handful knew that fate the day it was sealed by a simple, but virulent, change in accounting practices. After all the speculation, all the analysis, all the theory: Who would have guessed?"

Thanks for adding an important analysis to this Table's repertoire.

Test

Do you have an update on US AU exports?

My time has been consumed by other things lately. I'll work on updating the charts over the next week.

Regards,
Elwood

www.mrci.comIt seems oil and gas are always there to remind the markets that if they want to go up then pay the price. Onward and upward hoo!

Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM)(Access) Sep 29.15 29.97 29.11 29.87 +0.75 8/8/00 20:29 29.89 29.87
Crude Oil(NYM)(Access) Oct 28.87 29.66 28.87 29.52 +0.65 8/8/00 20:42 29.52 29.50
Heating Oil(NYM)(Access) Sep 80.25 81.80 80.10 81.70b +1.87 8/8/00 20:40 81.90 81.50
Unleaded Gas(NYM)(Access) Sep 86.28 88.00 86.28 88.00 +1.72 8/8/00 18:45 87.90 87.70
Natural Gas(NYM)(Access) Sep 4.440 4.475 4.416 4.470 +0.061 8/8/00 15:59 4.472 4.470

Source: Bridge NewsNY Precious Metals Review: Palladium recovers after Mon slide New York--Aug. 8--NYMEX Sep palladium futures managed to recover in Tuesday's session, after making a hefty slide to an 18-day low on Monday. They settled up $33.60 or 4.6% at $772. Palladium appears to be stabilizing after tumbling over the last few days, following Wednesday's jump to an all-time high of $859. (Story .2333)

Black Blade: After some unconfirmed Russian sales, the Russians failed to deliver additional supplies. As a result, PGM prices are recovering. Profit taking in Asia appears to have run its course for now.

Bridge Futures Outlook: Palladium stays strong on Russia jitters New York--Aug. 8--While futures of the precious metal palladium have slipped back this week from the all-time high of $859 per ounce they hit last Wednesday, they are nevertheless staying strong. Market players remain concerned that Russia, the world's largest producer, will be unable to provide sufficient material to satisfy strong demand, making palladium vulnerable to further price spikes, with some suggesting that it could climb over the $1,000 level. (Story .1275)

Black Blade: Without Russian supply, then industrial users will have to move to platinum. Then platinum will experience the same sharp price increase as well. BTW, Pd is up another +$13.00 in overnight trading, while Pt is down -$4.00.

Venezuela extends Placer Dome's contract at Las Cristinas Caracas--Aug. 8--The Venezuelan Corporation of Guyana (CVG) said in a statement Tuesday that it would give a year's extension to the contract which allows Canada's Placer Dome Inc. to operate its Las Cristinas gold mine. Placer Dome's contract ran out in July at the same time as it announced it would pull out of the $575 million project due to a plunge in international gold prices. (Story .22073)

Black Blade: On a side note, the big write-down of Las Cristinas hurt PDG's profit picture this quarter. The question is whether this mine will ever open or not. Also, some traders speculated that Crystallex (KRY) would "inherit" the property. If Au prices recover to much higher levels, who knows, maybe PDG will make a run at Las Cristinas and recover their capital losses. Tonight Au and Ag are on life support.

http://www.crbindex.com/news/story2203.html!Venezuela extends Placer Dome's contract at Las Cristinas
Caracas--Aug. 8--The Venezuelan Corporation of Guyana (CVG) said in a
statement Tuesday that it would give a year's extension to the contract which
allows Canada's Placer Dome Inc. to operate its Las Cristinas gold mine. Placer
Dome's contract ran out in July at the same time as it announced it would pull
out of the $575 million project due to a plunge in international gold prices.
(Story .22073)

I saw this earlier, thought you would like to see it.

$hifty
:)

In the magical world of accounting rules for tax and public reporting, the value of options at excercise is obvious. The value at issue is questionable, as is the value at any time in between issue and exercise. Yet, considering the option as an indefinite debt against the company, we can use the current exercise value as an estimate of the option's value.

There is no honest excuse for the current state of accounting the ESOPs.

The Boxer/Feinstein position is characteristic of the current administration and Democratic party attitude towards the financial machinations that have kept up appearances.

Since the time of the failed 93 rule proposal, when the loss of apparent earnings would have been 35% of profits in the tech sector, the problem had grown from one of difficulty to one of clear impossibility.

The 35% of 1993 tech profits attributed to the accounting trick have grown to over 100% of earnings for many technology corporations. In some cases, the level has reached parity with revenue.

By my estimate, the total value of stock option exercises without adjusting for rise in values of outstanding options this year will match at least 80% of total corporate earnings, and possibly be at 110% of them.

Had all corporations done as Buffet had done with General Re after he bought it (change the outstanding options to cash bonuses and raises in pay), the tech sector would have been shown to be devoid of profit, and most of the blue chips would suffer very substantial downward revisions to their stated income, of between 25% and 50%.

In 1998 (that is for 1997 stock exercises) the estimates published in a Business Week short were that 40% of SP 500 profits were composed of tax benefits of stock option exercise. By my reckoning, that would translate into a total benefit to the earnings reported at 60% of reported earnings just from the options exercised. From options outstanding, the benefit would have been in the ball park of an ADDITIONAL 70% of reported earnings, bringing the total to 130% of reported earnings.

The same can be applied to the NASDAQ, where the NASDAQ100 index companies make wildly irresponsible use of stock options and have a trailing PE of 150. The result would be a shocking 70-80% of REVENUE. In particular cases, it would be over 100% of revenue.

In the ESOP accounting game we can say that never have so many been so exuberant abount so little, to paraphrase Curchill.

And...
Never have such magnitudes of loss been presented as profit.

Not even in their wildest dreams have the bankers imagined that they could be outdone by so many in presenting nothing as something, and an empty vault as one brimming.

http://www.remarq.com/read/5584/q_7i6NfIrW_cAAAAA?idx=0&si=msg&q=%2BJames+%2Tuesday August 8, 2000; 12:10 AM EDT
Traficant Drops Treason Bombshell on Reno

Ohio Democratic congressman James Traficant accused Attorney General Janet
Reno of treason Monday night, saying he has evidence that she was
blackmailed not to appoint an independent counsel to investigate the
Clinton-Gore administration on Chinagate charges.

Appearing on Fox News Channel's "Hannity & Colmes," the Ohio Democrat
announced that he has five affidavits from individuals who charge that Reno
was repeatedly arrested for drunk driving in Florida during the 1980s, had
sex with a lesbian call girl and got her job as Miami's state attorney
through mob connections.

Traficant, who predicted last month that Reno was about to indict him on
corruption charges, suggested that Reno's encounter with the call girl had
been captured on videotape.

Critics of Traficant say the Congressman's comments on Reno are motivated by
the fact he is the subject of an FBI/Justice Dept. probe of having received
possible kickbacks.

Supporters of Traficant say that the Congressman has been targeted by the
Clinton White House and the FBI because of his criticism of federal handling
of controversies such as the Vince Foster death, TWA 800 and Waco.

The maverick congressman and frequent Clinton administration critic said the
FBI learned about some of the damaging evidence on Reno during a 1993
background check prior to her appointment to attorney general. But he said
he did not know whether the material was turned over to the Senate during
her confirmation hearing.

TRAFICANT: I have received several affidavits, and here's what these
affidavits allege. I have done some cursory investigation and will follow up
further myself on a limited budget. What I received was that Janet Reno was
first appointed to Dade County state attorney, they call them state
attorneys there, as a favor and a thank-you to the mob.

Number two, she's a lesbian. And I really don't care about anybody's sexual
preference ...

COLMES: Well, what are you saying that for ...

TRAFICANT: Hear me, hear me. This is an affidavit. This is an affidavit I'm
speaking to and I want you to listen to me. 'Cause I don't really care about
anybody's sexual preference.

COLMES: Then why bring it up?

TRAFICANT: Because it's in the affidavit, and listen to the salient points,
Alan. I'm not talking about Democrat and Republican. And I want you to set
Democrat aside tonight and set Republican aside tonight.

Janet Reno had a relationship with a call girl who was associated with
organized crime figures. And they have videotapes of this woman. Now hear
me. Also you had five police officers stop Janet Reno for substance abuse,
namely DUI - under the influence - willing to testify, never testified.

Now, here's the point I'm making. Listen very carefully. I will be
submitting FOIA requests. Because I believe Janet Reno in her failure to
appoint an independent counsel, specifically on the threatening issue, the
national security issue, China - she did so because of her blackmailability.

I want to know why, and how long it took for the FBI to investigate, if they
gave this information to the Senate, if the Senate knew about compromises
they had from outside the government. They knew about her past history of
alcoholism, her association with call girls. And they did interview several
of the affiants that have in fact given me these affidavits. Now hold on.

HANNITY: Hey, Congressman, well hold on one second. Let me ask a couple ...
Let's clarify. You have just declared war tonight on Janet Reno.

TRAFICANT: Yes, I have.

HANNITY: You made some very severe allegations. You say you have affidavits.
Who are these affidavits from?

TRAFICANT: These affiants wish to remain anonymous, but they will testify in
an open court or a congressional hearing of appropriate nature.

HANNITY: You are saying she is associated, and that people will testify with
evidence, that she was connected to the mob?

TRAFICANT: Yes, that's exactly what I'm saying. And because of the fact -
and I'm looking into this - I'm not throwing any darts at the president at
this point or anybody. I want to know if the president got that information.
I want to know the timespan from when the FBI went down and interviewed
these affiants on these particular allegations, and how long it took for her
to be confirmed.

Janet Reno was one of the exceptions. They waved that 72-hour period from
the hearing to the confirmation. And in a lovefest she became the attorney
general, and I'm accusing the attorney general of treason right here.

#####################################################
Could it be ??? Someone with a shovel is heading out to the barn!
Might things be starting to unravel?
Time will tell.

$hifty



View Yesterday's Discussion.

I want to make this as short as possible, but anyone that still believes in the F.O.A/T.G theory of the paper price separating from the Physical Gold price read on.

I remember F.O.A saying that "Another" thought or said he believed the P.O.G would go to $200/oz. F.O.A said that he/she was shocked to hear that, and figured it would not, and would rise in price first and continue on up. Got to get to $30,000/oz somehow. F.O.A mentioned that would be the nicest way to resolve the coming price transition to the "New Gold Market"

This would also benefit the shareholders as the P.O.G went up and maybe allow them to transition over to physical metal if there was any to be found?

Well folks hang onto your hats i think "Another" will be proven correct.

Here is why, Everybody(Gold share holders) are upset by the
fact that Goldfields the 3rd largest Gold producer has been removed from the "XAU" and replaced with Phelps Dodge a copper producer, i think it's weighting on the index is 15-17%. Also another gold producer was added that has apparently hedged 50% of their production, the name escapes me, but it has been mentioned over at kitco and G.E

So what does this all mean?? I believe the complete opposite of what everyone is thinking. That being i firmly suspect that the P.O.G is going to drop further as the big banks back out of the paper markets, look at the low O.I at the comex.Investors are speculating that the P.O.G is going higher and thats why "GoldFields" was removed from the "XAU".

So not to attract attention to the "XAU" because of a rising Gold price,WRONG! Very wrong! IS not Goldfields 100% unhedged? What would happen to the "XAU" when the paper price of the GOLD metal starts to drop, Remember, Gold(metal) is the thermometer!!! Its so simple the "XAU" would start to crash, and panic investors to sell their paper gold shares, which would bring an end to the mines a little to soon for comfort.

Therefor insert into the index "XAU" a copper mine because you know inflation is coming and copper will keep up the index so all appears as being well? Look at the "XAU" yesterday it was up when Gold was down? Sure we've seen gold up and shares down or flat also, but thats more likely due to lack of confidence in the P.O.G moving higher.

Anyways yesterday gold goes down the "XAU" goes up? Why? because copper was up and any hegded goldmining shares stay the same
because they've hedged or do better because they show more of a profit? I presume?

This strategy will work very, very, well for them, firstly it prevents any PANIC selling of shares, which then could easily start buying GOLD(metal) at the $250/oz range. They will come up with all kinds of Bullshit as to why the P.O.G is only at $250/oz and falling, and will point to the XAU and say. See Gold will rally or come back up look at the XAU it hasn't fallen. They know everybody watches the XAU and not the P.O.G when it comes to market direction,but remember this market is not as before, or of your grandfathers!

Why would they do this??? Simple, they know the Dollar is going to fail and they want their hands on all the Goldmines, period. How will they do it? They will drive the price low enough to push un-hedged mines into bankruptcy first and if not, get them to sell forward, and prolong the game,either way they are going to try to get the GOLD.

Now what about the hedged companies, you say, or they say, no problem, we've hedged, we are safe, and laughing all the way to the bank. WRONG,very wrong when the time is right,i'd say at a point when production becomes more expensive than an OZ of Gold mined pays them lookout, PAPER MARKET magically breaks down and the physical price skyrockets!!!!

Now they come in and clean up and take over the hegded mines,YES? Just look at what happened To Ashanti mines in Ghana, Also the F---ing Queen of England, personally paid a visit to Ghana right after the fact,talk about a "smoking gun". Also Cambior in Montreal, Canada got taken to the cleaners. They are still rollingover their loan payback amount, in the hundreds of millions of dollars i might add.
I read about them time to time in the paper about how they are selling this property or that property and trying to pay back this phoney fiat money,due to their involvement in forward selling and selling of call options.

Yes i do believe this to be the "Masterplan" What else could it be? I don't believe in this DELATION crap anymore! Right Stranger? Look around,people, everything is going up and up!
It's a great way to scare us Physical GOLD holders also into selling our metal, they know a low gold price portends deflation? I say never! Will not happen. Notice no one even debates with the Stranger over inflation anymore, WHY? because it's here now,right now!TRUELY IT IS!
This game they are acting out is one big "ruse" to scare the Gold miners and the Gold owners into selling big time,Hey they got to get the GOLD somehow, without panicing the common folk, got to hand it to them they are pretty smart or should i say DEVIOUS!!!!!!!!

IN the bitter end and it will be bitter, death of any kind always is, and i suspect the Papermarket dying will be no different,these are the cold hard facts, I,am so sorry!

In the final analysis Physical Gold Holders Will probally be the only ones left standing when this "Perfect Storm" finally passes. GO GOLD,GO PHYSICAL YOU,VE BEEN WARNED!!!
As God as my witness I've told the whole truth and nothing but the truth as far as i understand it.

G.T

A few days Skiing beats the hell outa watching POG squirm No?

G.T.
Good to see you're over your confidence crisis., The Cambior/Ashanti thingie gave us an insight into the murky world of $300-320 POG and you can rest assured we won't be goin there again. (Leastwise not intentionally)
Still the US$ remains on it's relentless upward trend along with the Yen & Pound- (despite all attempts by the BoE including their much despised (Au)ctions, to effect a slide)
Pretty well all others have a favourable Au ratio.

Next phase will be interesting:-
(a) run Au up to 290ish- will PGM's/Oil retreat?
(b) Screw down to 260's- Oil to $38- where plats?

Interestinger-n-interestinger.

http://www.usagold.com/DailyQuotes.htmlNow you know what's been keeping us busy here in The Tower...like a one-legged man at a butt-kicking contest.

This is a real nice addition to the site. Congradulations.

Am enjoying the news stories on the EURO. Very interesting.

Well done and thank you - been on the verge of rounding up a posse to send after you - best cb2

T.C.
Filed in "favourites" ( spelt without the "U" :-))
A++ effort.
All:
Not wanting to steal BB's thunder- but I thought this interesting, (courtesy BRIDGE)
China PBOC Shenzhen considers building precious metals refinery
Hong Kong--Aug. 9--The Shenzhen Branch of the People's Bank of China (PBOC), the central bank, is considering building a precious metals refinery in the country's southern special economic zone of Shenzhen, an official at the PBOC
Shenzhen branch told BridgeNews Wednesday. But he indicated that no plans had been finalized. (Story .10958)

Oil, commodites = big trouble ahead.

Last ditch effort, time now for gold.

Any spike now below 277 in dec is a final clean out. With oil news the spike down if it happens won't last.

Again watch CHINA

GT: I always am interested in what you have to say so keep on sayin' it. You do seem to vaciliate a little bit though don't you think?

Sources: BridgeNews and ReutersJapanese buyers end 2000 Russian palladium talks; delivery to start Sept. Tokyo--Aug. 9--A few Japanese buyers have finalized talks with Russia's export agency Almaz on 2000 palladium shipments under long-term contract, buyer sources told BridgeNews on Wednesday. Almaz is expected to start the palladium delivery at the beginning of September and end in late December, they said. (Story .10416)

Black Blade: Old news, but not delivered yet.

Asia Precious Metals Review: Gold eases on Australia selling Tokyo--Aug. 9--Selling from Australia pushed down spot gold late in the Asian trading after consolidating at about U.S. $273 for much of Wednesday's trading, dealers said. Spot platinum and palladium market continued to be dominated by prices on the Tokyo Commodity Exchange (TOCOM) with thin activity from other Asian players, they said. (Story .2200)

Black Blade: Gold slowly sliding down overnight, and PGMs mixed. Funny that no one seems to know who is selling gold in Australia.


Palladium Rebounds, Oil And Grains Firm
NEW YORK (Reuters) - Palladium prices shot higher on Tuesday, pulling platinum up with them as the markets continued to debate whether an expected resumption of Russian shipments will satisfy demand from automakers and other consumers. In other featured commodities trading, oil markets closed firm awaiting a weekly report on U.S. petroleum usage and stockpiles. Soybeans led grains higher as forecasts for hotter weather next week prompted some cautious profit taking. At the New York Mercantile Exchange, palladium rebounded after dropping back by more than $130 from the record high it had set last week. Palladium for September delivery closed $33.60 higher at $772.00 an ounce. That gain also helped sister metal platinum, which is also valued by the automobile, electronics and jewelry industries. October platinum rose $13.40 an ounce at $577.60. Traders said that a large commercial buyer bid up palladium through New York dealers early in the day, bargain-hunting for supplies, traders said. Physical supplies of the metal, used by automakers to clean exhaust gases, are still very tight. The market awaits completion of talks for fresh Russian shipments to Japan under term contracts for this year. Japanese traders said on Monday that a deal was imminent for palladium, but no official confirmation has been seen. Russia controls about 20 percent of global platinum supplies but about two-thirds of available palladium. It has often held back shipments since 1997, haggling for better prices. Palladium now is three times the price of gold.
In other markets, oil closed quietly higher as traders awaited the weekly estimates on U.S. oil usage by the American Petroleum Institute, an industry group. Crude oil for September delivery at the NYMEX closed 21 cents higher at $29.12 a barrel. September heating oil rose 1.62 cents at 79.83 cents a gallon and September gasoline ended 1.48 cents a gallon higher at 86.28 cents. Oil traders said they expected on average 2.0 million barrel increase in crude oil stocks for the week ended Aug. 4. But that was seen as too small to overcome the bullishness spurred by a surprise 9.0 million drawdown reported last week.
At the Chicago Board of Trade, soybeans led grain markets higher as traders began squaring positions ahead of Friday's monthly U.S. Agriculture Department crop estimates and after some fresh forecasts for hotter Midwest weather. Soybeans for September delivery closed 7 cents a bushel higher at $4.44-1/4. September corn rose 1-3/4 cents at $1.79-1/2 a bushel and September wheat closed 3 cents higher at $2.36-1/2. Forecasts for hot weather in the U.S. Midwest crop region added some support. The National Weather Service's six- to 10-day outlook issued on Monday night for early next week called for above to much-above normal temperatures with the hottest weather in the Dakotas, Minnesota, western Iowa and all of Nebraska, which are corn and soybean growing areas. However, most traders believe it will take more than one hot spell to change the overall picture for the next year of big surpluses in grains. Earlier on Tuesday, a survey of 1,250 grain elevators and merchandisers in the Corn Belt conducted by Chicago-based analyst Conrad Leslie estimated that this year's U.S. corn production will total a near-record 10.19 billion bushels and soybeans a record 2.94 billion bushels. Last year, corn production was 9.43 billion bushels and soybeans totaled 2.64 billion.

Black Blade: Maybe I should stop buying PMs and buy grain. I could brew my own beer ya know. PGM shipments from Russia at this point won't satisfy demand. Russian stockpile supplies are questionable. Oil inventories could surprise many, as there is likely to be a shortfall again.

Meanwhile, S&P Futures are up +6.00, Fair Value up +6.59, should be a bit of a pop to the positive side at the NY open. Oil is up $0.89 at $30.01/bbl on inventory concerns. NG is up $0.061 at $4.47 bcf closing in on its high. Au is down -$1.00 at $271.90 (OUCH), Ag is down a penny at $4.85 (What a Bargain!), Pt is off -$6.00 at $572.00, and Pd is up +13.00 at $775.00 as traders digest the Russian story on PGMs.

Crude Oil Jumps as U.S. Inventories Drop to 24-Year Low

London, Aug. 9 (Bloomberg) -- Crude oil rose more than 4 percent after a report indicated U.S. inventories declined last week to their lowest level in more than two decades, increasing concern of a shortage of heating oil this winter. Crude oil supplies dropped 0.8 percent to 282.6 million barrels, the American Petroleum Institute said, a level not seen since August 1976. Inventories of distillate fuels such as heating oil also fell, leaving reserves 20 percent lower than a year ago with the start of the U.S. winter just four months away. ``The across-the-board-stock draw is making people think,'' said Tim Noest, trader at ADM Investor Services International. ``Inventories are now below where they were in March and June, and oil got up to $33 then.'' Brent crude oil for September settlement rose as much as $1.25, or 4.3 percent, to $30.15 a barrel on London's International Petroleum Exchange. Crude oil for September delivery on the New York Mercantile Exchange was up $1.10 at $30.22 a barrel in electronic trading. During the summer, refiners have focused on making gasoline to meet the needs of the U.S. driving season rather than build up supplies of heating oil, analysts said. Supplies of distillate fuels last week declined by 1.18 million barrels to 111.4 million barrels, the API said.

Crude

The API's weekly survey also said crude oil inventories in the U.S., the world's biggest energy consumer, last week fell 2.1 million barrels to 282.6 million barrels. Inventories are now 13 percent below last year, according to the API. Analysts surveyed by Bloomberg had expected the report to show an increase of in crude oil of between 2 million and 2.9 million barrels, after dropping 9 million barrels the week before. The drop a week earlier was the largest decline in six months, and prices rose 7 percent in the following four days. Still, some analysts speculated the findings may be revised. The U.S. Department of Energy largely confirmed the prior API survey. This week's DOE report is due out today at 9 a.m. New York time. Oil inventories are falling even after the Organization of
Petroleum Exporting Countries boosted output twice this year. OPEC has increased production by more than 2 million barrels a day, or2.7 percent of the world's daily output. OPEC, which pumps about 40 percent of the world's oil, meets again in September, and traders doubt the group will raise output again before then. Oil has gained about 40 percent in the last year. The price of a group of crude oils OPEC monitors stood at $26.61 a barrel on Monday, compared with the $25 target the group has set.

IEA

Oil topped $30 a barrel in London for the first time since July 14 even as the International Energy Agency said the outlook for prices may not be as strong as previously expected. Rising oil prices spurred production while restraining demand more than expected this year, the IEA's monthly report said, reducing the need for OPEC to increase output for a third time. Producers pumped 76.2 million barrels daily in the second quarter, 1 million more than in the first three months of the year. Consumers will use an average 75.8 million barrels a day this year, 1.3 million lower than expected a year ago, said the IEA, a forecaster for 25 oil-consuming countries.


Black Blade: Don't worry, it won't show up in the Core Rate, so all is well! Also, with hedonic statistics, I'm sure that the quality of travel has improved, so it must be higher quality oil. Ya just gotta love government statisticians. They're about as much fun as analysts are. Analyst, many who by the way, said last week and earlier this week that oil inventories would rise and oil prices would fall. My favorite contrary barometers, they've done it again. Buffoonery of epic proportions. They really shouldn't take the 2 drink minimum seriously at lunch.

Love your stuff. MK ought to advertise out on the net:

"Black Blade's Morning Wakeup Call -

Analysis with Attitude!"


I wish at some point in the last three months or so you would have posted something like "You know I'm right about this stuff, you'd better invest in Palladium."

I probably still wouldn't have done it. Oh well......

gf

While oil is potentially poised to rise to even higher levels short to medium term, most of the not $ world has to cope with a double whammy. Almost record high $ vs most other currencies - euro < 90 and stocking for winter just begins.

The oil producers must be happy to skim off the $ highs and higher oil price... as long as they know what to do with it, the $ that is. They probably don't want to see another Petro-$ glut a la 70's? ... and are they pickig up all the physical as per A/FOA? Seems to me a precarious balancing act between prudence of pricing and choking economies ...
Oh, I keep forgetting - NO Inflation.

Is this a means to mop up external $'s? So, who pray, will keep sending their ex-extra greenbacks to the oh so save haven in future and keep the financial markets running full steam? Is the day of reckoning close, or can AG still postpone the charade until ... until history will have judged ... even -once- great men can't abolish economic cycles - be they boom or bust or more benign, as in "soft landing", which noone (or is it Salzburg Festivals annual recurring "Jedermann"?) ever experienced.
... And the winner is - the traditional Austrian School of economics - ain't I proud? No, terrified of the consequences to the sheeple! As the establishment shoul be - musigs only! cb2

We aims to please! With so many drones (investment analysts) out there spouting off the sanctioned company line, and not wanting to ruffle any feathers of potential corporate clients, it is only natural that someone without any ties to the investment community take a look at the "Big-Picture" and say "there's something rotten in the state of Denmark". As far as the PGM markets are concerned, Russia is an economic basket case. The rule of law, where it exists is arbitrary at best. Russian politics is absolutely corrupt, organized crime is pervasive, and in order to survive, the people are reduced to the most base common denominator. Russian politicians are in bed with organized crime. Anything of value is either stolen or sold for hard currency. Any foreign enterprise that invests in the former Soviet Union is crazy. The tax laws change with the wind, and can add up to well above 100% of profits (if there are any). When I was in that part of the world, it was really depressing to see so many people begging, and nice looking women trained as doctors, lawyers, etc. having to resort to prostitution in order to survive and feed their children. Russian (or CIS) industry is grossly inefficient. The concept of free-markets is a foreign concept and only exists in the black market. So, my take is, any real stockpile of PMs has either been scavenged, stolen, or sold off. Anything new coming out of the ground may make it to the western markets through official channels. But I am certain that there will be a lot of "leakage" as well. The continuous statements that deliveries will be made and that those commitments will be honored ring hollow. The former Soviet Union has always operated this way. Since Russia is the largest producer of palladium, it is a safe bet that Pd and even Pt will eventually rise to much higher prices.

BTW, Pd is the only PM in positive territory this morning. Up +$10.00, at $772.00.

I realise that this observation that I am about to share may have absolutely no basis in reality, but it may interest those who value God's Word. I am not claiming to be a prophet or anything....just observing something wierd.

The "New York Composite Index".....since July 1999....has hit major resistance and reversed over half a dozen times at the number 666.....it has stopped between 666.00 and 666.90 (the all time high April/00) several times including this morning 666.45. Why can't it break out to 667 or higher? Is this some kind of invisible wall that will not be breached? The number 666 is a very "pregnant" number in scripture with many esoteric beliefs surrounding it. It is called the "number of man".....maybe we're reaching somekind of spiritual barrier where God is saying enough is enough! I don't know....it just seams wierd.

Great stuff on oil.......lowest inventories since 1976!!!!!! do they realise how much higher consumptions is since then!!!!!!!! Natural gas is busting out also.....BIG change is in the wind..... Buy GOLD!!!!!!!!

=, Panama canal. More trouble ahead.

I haven't bought one ounce of gold because I thought an economic disaster or event of highly negative proportions was headed our way. However, I am becoming increasingly convinced that we will not be able to avoid something terrible that will adversely impact many lives (economically i.e.). I hope I am wrong. I hate to admit I feel this way.

But i like asa, not intended as advise:

http://www.SelectSectors.com/gldprd96to00.gif The difference between the 2 week EMA and 4 week EMA
defines the oscillator. The length or period of the
oscillator Up and Down cycles are shown as a bar chart
for the 01/01/96 To 08/08/00 time frame. The chart uses
FSAGX data, but should be representative of all Gold Indexes.

That's probably the reason you should buy some more in this
greatest of all fire sales - 't makes you feel and sleep a lot better, while others try to buy back in a sold out buyers market. Only thingy of value! Best cb2

I'm not a chartist, though my gut feeling is we've seen a short term (May) double bottom - bottoms up friends - and a secular bull market in gold will emerge anytime now.
Please don't take me fo granted - I'm not advising jumping into gold and their shares head over heels - only
keep accumulating - time's and what's more physical 's running out on the bears and btw. Goldman sucks - learned a lot of new linguistics (slang) on other sites - cb (too)

Would like to see dec move back to 290-91 before close.

Yes Cavan Man, I admit I do sway to and fro, because money is such an emotional subject for me, especially GOLD!!
Topaz, yes it's nice to have ones confidence back. I must give credit for alot of my knowledge and inspiration to where it is due, that is F.O.A.

Reading F.O.A has taken me on a journey i never thought possible, its been truly fantastic and i hope F.O.A is O.K! and returns once again to join us at the round table.

Question or maybe more of an observation? How can OIL be screaming upwards and the P.O.G be dropping? are we seeing the beginning of a breakdown in paper pricing on the comex?
Or are they just selling more paper in derivative form?
Or are more mines hegding and selling forward? Or have they found more Gold to pay the heating bill? Or all the above?

As "Another" used to say "time will tell all", and he also mentioned to watch the "price of OIL"! Well I can tell you now, more than just as GOLD owners, are now watching the P.O.Oil.

This winter is going to be something, with alot more to come. That does appear to be a FACT! that you can hang your hat on! Along with alot of other changes as noted here on this forum daily.
G.T

Its a slow day!The Gold Bug and the Dot-com investor


In a Gold field one summer's day a Dot-com investor was partying and spending and living the good life being totally content. A Gold Bug passed by,
bearing along with great toil a large stash of gold coins ( from Centennial Metals) he was taking to the
nest.

"Why not come and party with me," said the Dot-com investor "instead of toiling and moiling in that way?"

"I am helping to lay up real wealth before the crash," said the Gold Bug,
"and recommend you to do the same."

"Why bother about a crash?" said the Dot-com investor ; we have got
plenty of up side at present." But the Gold Bug went on its way and
continued its toil. When the crash came the Dot-com investor had no
wealth and found itself dying of hunger, while it saw the Gold Bugs
living life and feeding their families without any worries from the stores of wealth they had
collected during the "New Economy ! " Then the Dot-com investor knew:


It is best to prepare for the days of necessity.


"GOT GOLD?"
What are you waiting for?
$hifty

My gracious, but wouldn't you love to see it selling for that, if you are in accumulation mode, that is. Almost as pretty as $30,000/oz

According to a Bloomberg report the FED see's slower growth ahead, which will retain prices. Even if labor markets continue tight and credit concerns are making banks choosier in their lending policies (old umbrella politics - lend 'em during sunshine and call 'em back at first signs of rain)-. FOMC discussions even have conservative Meyer on rates hold.

Above is a fast recap, explaining clearly - no more rate hikes - at least not before elections ... I'm truly amazed.`The prognostic capabilities of the FED seem as flexible as their policies. After "surprise" vigorous revival of 2nd. Qu. GDP growth, just announced last week at 5,2%, surprise, surprise FED's seeing slower growth and no effect on prices. Tihgt labor, tighter energy - probably compensated by "choosier" credit - as it were the only concern of banksters - will restrain any inflationary forces.

You've got to give credit (and don't be too choosy about it either) to those - no the right sort of the too big to fail - guys, or is it cronies to still maintain the stamina to spin it their way.

There's an end to everything - only saugages (german:no Austrian= Wuerstel) have two - and who in the end is the "Wurstel" (german:no Austrian= Clown)? Guess who - cb2

when you need him?
Staking his privy family run in Park City in preparation of the Olympics? Noblesse oblige - pardon monsieur - save some
of the golden tickets for your bugsy amis at today's prices.
Best from the Al(b)ps -cb2

Index finger too fast - gold too low - cb2 - too late

... wassa matter with the Dow, SnP and Naz, while Spot, the
Labrador- not the golden Retriever, broke certain support levels. So, Retrievers aren't golden these days - the stock markets are easy equalizers to this kind of non-performance.
Punitive Punctures in the Tube may "herald" times of oxygen deficits ahead - after all the NW is burning (sorry I'm a forrester by training -so no pun intended) - only to
the fact of the overwhelming oversupply of "Greenleaves" causing similar effects now and in future. To all affected my heartfelt commiseration.

Relax- I'll promise not to post again tonight - cb2

http://www.ardemgaz.com/today/ark/blynra09.htmlHere's one for the protecting yourself and your gold scrap book.

NRA's LaPierre comes out firing at convention

MICHAEL ROWETT
ARKANSAS DEMOCRAT-GAZETTE

HOT SPRINGS -- A National Rifle Association leader who took aim Tuesday at President Clinton, Vice President Gore and media whipped the crowd of nearly 2,000 gun-rights supporters into a frenzy of applause by asserting that all three promote unconstitutional efforts to regulate firearms. NRA Executive Vice President Wayne LaPierre of Fairfax, Va., headlined the Second Amendment rally at the Hot Springs Convention Center sponsored by the Dixie Sport Shooting Association of Hot Springs. LaPierre warned the crowd of supporters of gun owners' rights that gun licensing and registration proposals promoted by Clinton and Gore are just the first steps in a scheme to confiscate all guns.
"The next step is a knock on your door to confiscate your firearm, and we are not going to let that happen," LaPierre said to thunderous applause. "This administration doesn't enforce existing gun laws. Every time a horrible crime occurs, they run in front of the cameras and propose 20 new [gun] laws, and then when the cameras go away, they go back to not enforcing the law."
LaPierre in March claimed that Clinton's refusal to enforce existing gun laws shows that the president "is willing to accept a certain amount of killing to further his political agenda," including Gore's election as president. LaPierre stood by those remarks Tuesday, insisting that the "Clinton-Gore administration" has "deliberately, intentionally and inexcusably" blocked federal prosecution of crimes committed with guns.
LaPierre contended that news coverage is biased against the NRA. He argued that the press never mentions the NRA's gun-safety programs for children while "overzealously" covering school shootings like those at Westside Middle School near Jonesboro in 1998 and at Columbine High School in Colorado last year.
Gov. Mike Huckabee seconded LaPierre's criticisms of news coverage. Huckabee welcomed LaPierre to Arkansas with an Arkansas Traveler certificate and a prototype of the customized 12-gauge shotgun shells Remington Arms Co.'s Lonoke plant is making for the governor. The shell didn't contain ammunition but bore the same inscription as the live shells: "Mike Huckabee, a governor who supports the 2nd Amendment."
"The Constitution was never written to restrict citizens; it was written to restrict government," Huckabee said, eliciting another standing ovation. The governor argued that while news groups strongly support the First Amendment -- which guarantees freedom of the press, among other things -- they aren't so supportive of the Second Amendment.
The Second Amendment to the U.S. Constitution states: "A well-regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed."
Huckabee argued that the concealed-weapon law passed by the Legislature in 1995-- during the tenure of his predecessor, Democratic Gov. Jim Guy Tucker -- has resulted in a drop in gun violence in Arkansas. After adoption of the law, murders committed with firearms dropped by 21.5 percent in 1996 and by 42 percent over the next three years, Huckabee said.
Huckabee tempered his barbs with humor, joking that one of the prizes up for auction after the rally was "mud wrestling between Rosie O'Donnell and Janet Reno," in a reference to the talk show host who favors gun control and Clinton's attorney general. The Republican governor also quipped that Clinton's support of measures such as waiting periods to buy a handgun has made the Clinton the "membership drive chairman" for the NRA.
The rally was billed as a "grass-roots," nonpolitical event, but several speakers -- particularly 4th Congressional District U.S. Rep. Jay Dickey, R-Pine Bluff, and 1st Congressional District GOP candidate Susan Myshka of Jonesboro -- sprinkled their speeches opposing gun control with attacks on their Democratic opponents.
Myshka blasted her opponent, incumbent Democratic U.S. Rep. Marion Berry of Gillett, for scoring an "F" on NRA legislative scorecards, and she promoted herself as a die-hard supporter of gun-rights.
"As a woman, I take it as a personal offense to tell me I have to have trigger locks because when I've got someone knocking at my door at 2:30 in the morning, I don't want to be looking around for a key," Myshka said. "I want to be looking under my bed to get my Smith & Wesson .916-pump shotgun and say, 'Come on. I'm sure you've got the wrong address.'
"Myshka pledged to "never vote for any gun law," adding that she'd "die over that before I'll give it up [gun-rights]." She said violence-saturated video games are more to blame for gun violence than an abundance of lawfully owned guns.
Tuesday's rally also offered a preview of the political fireworks in the hotly contested 4th District race. Dickey fired rhetorical shots at state Sen. Mike Ross of Prescott, his Democratic opponent, who also sat on the panel.
Dickey contended that Ross' support for gun rights, which has earned him an A+ rating from the NRA during his state Senate tenure, is questionable because Ross is to attend a fund-raiser next month attended by gun-control proponents like Clinton and House Minority Leader Richard Gephardt, D-Mo.
Ross responded that just because he's a Democrat doesn't mean he automatically supports every position held by Clinton and Gore. Ross said he disagrees with both of them on gun issues.
"I'm a south Arkansas Democrat who knows we don't need more gun laws," Ross said.

This article was published on Wednesday, August 9, 2000

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

Release Date: August 7, 2000

Rates for Friday, August 4, 2000

Federal funds 6.44

Treasury constant maturities:
3-month 6.23
10-year 5.91
20-year 6.03
30-year 5.72

upside-down spread FF vs long bond = (0.72%)

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

Release Date: August 8, 2000

Rates for Monday, August 7, 2000

Federal funds 6.46

Treasury constant maturities:
3-month 6.28
10-year 5.97
20-year 6.06
30-year 5.76

upside-down spread FF vs long bond = (0.70%)

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

Release Date: August 9, 2000

Rates for Tuesday, August 8, 2000

Federal funds 6.44

Treasury constant maturities:
3-month 6.26
10-year 5.93
20-year 6.06
30-year 5.76

upside-down spread FF vs long bond = (0.68%)

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

Release Date: August 9, 2000

Rates for Tuesday, August 8, 2000

Federal funds 6.44

Treasury constant maturities:
3-month 6.26
10-year 5.93
20-year 6.06
30-year 5.73 (Corrected from 5.76)

upside-down spread FF vs long bond = (0.71%)

Please have patience with me. I am young (not afraid to admit it) and don't know much about gold and the gold market. I guess I know more than most people my age but I'm trying to educate myself so if everyone would be patient and help educate a "youngin" in the was of gold, the gold market and the gold standard (which I realize we are no longer on) I would really appreciate it. What are the P.O.G and F.O.A? What is the "XAU"? What does it mean to for a gold mine to be "hedged" or "unhedged"?

Have watched the News stations and looked in the local newspaper and could not find any mention of the charges brought by Rep Traficant concerning J. Reno. Whats Up ? This should be a big story. Let me know if there has been any further developments. White Hills

I swore not to post again tonight - though please suit yourself - I'm the odd European meandering around on the best of all gold forums - please start with usagold home page - it'll give you all the answers you'll need to be able
to "read" these people.
Well, POG = Price of Gold
FOA = Friend of "Another" - hallowed at this site
for his thoughts!
Hedged or unhedged - the Hamlet question - please ask again
after reading more, where? Here!
Wellcome again, young one - best cb2

An abomination - used to be the Philadelphia gold and silver
Index - now defunct - more at another time - stick around -cb2

http://www.KKGOFM.com/playlist&kmozart%20live.htmAs usual, it's been a long time between postings for me. This time it was because I was off doing my annual stint teaching Chamber Music at the Idyllwild Arts Academy. Good music! Good concerts! Good students! BUT, in the meantime, the POG has again dipped dangerously low. Gee whizikers, when will it finally get going???? Is it possible that Robert Prechter is right and that gold will ultimately drop to the low $180's? Seems to me that with the price of oil remaining at relatively high levels inflation numbers ought to be coming in higher. But then we've probably never had an administration so adept at cooking books as this one...

While we wait for something positive to happen to the POG, I thought I'd give fair advance warning to all my buddies here at the Round Table about an upcoming concert. It will be performed and broadcast live on KMZT (105.1 FM for those in the LA area) at 6 PM Pacific Time, Sunday September 3. (The Sunday around Labor Day). It can also be heard over the Internet by going to:
http://www.KKGOFM.com/playlist&kmozart%20live.htm

My Trio (The Pacific Trio) will play the 2nd Piano Trio by Joaquin Turina (a beautiful piece!) and then our cellist will be replaced by a great French Horn player for the Brahms Horn Trio (a magnificent piece!). Please put it on your calendars and listen in. Be sure to account for any time differences between your local and US Pacific Time. With MK's indulgence, I plan to post notice of it and the URL a few more times as the concert approaches - just as a reminder. (Mike - let me know if that's not OK) I promise to try to write something about gold at the same time. Anyway, hope you can all listen in. I'm sure you will enjoy it.

Glad to be back. Best wishes to you all.

and my (old) lady adores Brahms - hoping to be able to catch it over here on the old continent - otherwise you've just got to provide (records?) - or is it I-T-(ins) - regards cb2

Welcome bambie-You have probably just begun one of your life's most intriguing journeys. P.O.G is the price of gold currently and it is a contrarian's dream today. F.O.A. is an elusive wise man that has been missing since June 14th, but will probably be back on site soon. You will have a very difficult time understanding him initially, but be patient as he has many lifetime's of knowledge. The XAU is no longer relevant because it has been tampered with by God knows who. It used to be the Phila. gold and silver index, like the Dow is to stocks. It may no longer correspond to the price of gold and silver because of some of the dubious companies now listed in this index. Hedging is selling gold on the cheap today instead of holding it in anticipation of future higher gains. It is recently been overused and has been a detriment to P.O.G. The journey you have possibly started entails international financial intrigue and understanding, motives of world govt's, and maybe even the making of a life's fortune. I believe your timing could not be much better! Godspeed

http://talk.broadcastamerica.com/stations/moreinfo/bio.phtml/Stations/The%2520Roger%2520Fredinburg%2520Show/bio?call=ts01023If you go to this link and click archives it will play last nights Roger Fredinburg show. Its one of the first thing he talks about!
Roger has a good radio show each night. The other day he said something about the next President having to deal with a bank crisis ! I guess he read the GATA stuff I sent him!


PS His main web page address is:
http://www.regularguy.com/

$hifty

http://biz.yahoo.com/e/000809/nem.htmlNewmont reported a net loss of $.10 per share for the first half of 2000.

<ounces for the remainder of 2000 from its Minahasa mine in Indonesia at an average price of $454
per ounce>>

Full report at above URL.....beesting.

This might help you understand a few basics. Came to me in my e-mail today.
Le Metropole Members,

The following article appears in today's money
commentary in www.salon.com

Fool's gold

How I bought into a sucker's scheme.

- - - - - - - - - - - -
By Barrie Walsh

Aug. 9, 2000 | I blame some of it on myself. But I
blame the rest of it on the government. Inflation
has arrived, but no one will admit it.

Even as we continue to read data that indicates the
economy is slowing, the I-word goes officially
unuttered, and the Fed withholds its option to raise
interest rates. Commander Alan Greenspan placates a f
razzled Wall Street with a reassuring message that
new hikes do not appear necessary.

This is why I continue to lose money.

Historically, gold is a great bet against inflation.
Last February, when inflation seemed imminent, Placer
Dome, the world's fifth-largest gold producer, joined
others in the industry with an announcement that
seemed to open up a primo investment opportunity.

For years, gold companies sold their product at a
price higher than the market. This practice, called
hedging, becomes profitable when gold prices fall.
But if gold prices rise, the companies get stuck
with the lower price.

Placer Dome, in Vancouver, B.C., said there would
be no more hedging. And gold rallied nicely. I jumped
in and purchased a chunk of Placer Dome shares.
Unfortunately, the rally fizzled within days. My
decision turned out to be a big mistake.

So what went wrong?

The Gold Anti-Trust Action (GATA), a lobbying group
in Dallas, believes the gold market is being
manipulated. I do, too.

When I first started looking into the matter in
February, I wasn't convinced; today, something
suspicious indeed seems to be going on. GATA chairman
Bill Murphy, who's worked in the gold industry for
30 years, says the U.S. government is conspiring
with the Exchange Stabilization Fund and some bullion
banks to hold down the price of gold for political
and financial gain. (The ESF, under the jurisdiction
of the secretary of Treasury, was formed in 1934
to provide exchange rate stability in the foreign
exchange market.)

Murphy's evidence: record gold demand and rising
inflation.

Annual gold demand and prices have been rising but
the government's Producer Price Index (PPI) and
Consumer Price Index (CPI) haven't shown much
upward movement. Some in the media, including New
York Post business writer John Crudele, have
questioned the government's official inflation
reports. Even Greenspan sometimes relies on private
data to access the state of the economy. Murphy
attributes the refusal to acknowledge inflation
to the coming election -- a time when no one wants
to put a damper on the good times.

But look at oil prices and it's clear there's reason
to be concerned. Last year, crude oil traded at
between $14 and $15 per barrel; it's currently trading
at $30 per barrel -- a 13-year high. Inflationary
pressures from high oil prices are significant, though
often dismissed by Wall Street as not being part
of the "core" inflation rate. Yet, world finance
ministers at a July meeting in Japan said high oil
prices could hinder global economic growth.

Commodity prices and wages are rising. With demand
so much greater than supply, the price of gold
should be rising.

So how is this alleged manipulation being carried out?
GATA describes the process like this: The world's
central banks have large reserves of gold, which are
loaned to bullion banks, and which, in turn, are
sold to jewelry makers and others. Central banks
charge a low interest rate -- say 1 percent on the
borrowed gold.

When bullion banks sell gold short, they have an
obligation to replace the borrowed gold. (Selling
an investment that you don't own is referred to as
selling short.) If the price goes down, the gold
can be purchased at a lower price and returned to
the central bank at a profit. If the price goes up,
the bullion banks lose money because they have to
pay a higher price to replace the gold.

Meanwhile, Murphy says, bullion banks invest proceeds
from the gold sales at a much higher rate than the
1 percent they are charged to borrow the gold.

Gold analyst Frank Veneroso claims world gold loans
to bullion banks at present are as high as 12,000
tonnes (a ton equalling 1,000 kg). Not every analyst
agrees with his figure, but there is growing concern
about the large amount of outstanding gold loans.

GATA says a financial crisis could occur if investors
start buying lots of gold. Heavy buying would spike
the price of gold and bullion banks would be forced
to quickly buy back the gold they have borrowed ...
at a much higher price. Murphy believes that under
those conditions, the selling pressure would not
be strong enough to offset the frenzied buying.
The bullion banks would lose a lot of money.

Gold now sells at about $281 an ounce. Veneroso
believes the price would be closer to $600 if the
manipulation of the gold market stops. GATA has met
with Speaker of the House Denny Hastert, R-Ill., and
handed out a 100-page document called "Gold Derivative
Banking Crisis," detailing the alleged manipulation
to the Senate Banking Committee. Since then, the
Senate subcommittee on Technology, Terrorism and
Government Information has requested copies of the
document, and GATA has asked for a full investigation.

In September 1999, the European Central Bank signed
the "Washington Agreement," which limits gold sales
for five years by 15 central banks to 400 tonnes per
year. This signaled a lower available gold supply.
Heavy selling ensued and another rally fizzled.

If this story is true, then I have bought into a
rigged market -- a sucker's rally. I am hardly alone
in my frustration. What am I going to do with my
Placer Dome shares? For now, I'll hold on. I think
inflation is very much alive, if not accurately
reported. The stock market's volatility is a big
concern; I am worried about the U.S dollar bubble.
If things go sour, gold could go to $600. It all
comes down to patience.

For now, I'll keep polishing.


www.salon.com | Aug. 9, 2000

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

About the writer


Please be aware that there is a lot more to what is 'going on' in the financial world than the manipulation of gold. The impending death of the dollar, for instance, extremely important because it the WORLDs' reserve currency right now.
The dollar, at one time, represented a certain amount of gold. It doesn't any more, and hasn't for many years. The dollar is now just paper, and if it represents anything, it is debt.
Gold is solid, unchanging substance, with value always. The dollar is what is called 'fiat' currency, created by banks so they can have better control of the worlds' wealth.
Also, be aware that our own Federal Reserve bank is a PRIVATE CORPORATION, NOT a government entity. The U.S. Federal reserve controls monetary policy in the U.S.
Because the dollar is used internationally, whatever happens to our dollar, our stock market, etc., WILL affect the ecnoomics of the world. Things to think about.

I am just a beginner myself, but the above letter explains the 'gold manipulation' aspect pretty simply, and should get you started. May I also suggest you go to the Trail Guide link above, and begin reading. There is plenty there to confuse and enlighten you. Read, read again, read some more. Things will begin to sink in.

I meant the 'Gold Trail' link above. Much of what FOA has said here, is archived there. Reading the words of FOA and ANOTHER, whether they are right about how things will unfold or not, I gaurentee you, you will get a great education, and a pretty clear view of the "Big picture" of the world in international economics.

All, Hello! Yes, I'm still here, lurking and learning.
Hope the rest of you enjoy the letter as well.

Hi, Leigh!

I know you came here to learn about gold, and here I am throwing the whole world of international economics at you.
I do this, because in order to understand gold, the role it plays in the world now, and the role it MAY play in the future, I really feel you need to look at the 'big picrture', the whole thing. Gold is important in it all.
Call it wholistic economics. :}

P.s. I myself hold gold for insurance, a feeling of independence from the 'machine', (Kidding myself, of course, but it's a bit of the rebel in me), and security. It may or may not feed my family, it may or may not make me richer than many at a point when most are broken. I can't read the future. But it seems like a fairly intelligent thing to do. I like to eat, I am dependent on the systems' system, and the system is getting weaker every day. Gold is 'just in case', for me. Others are hoping for the Big Rally, when gold 'goes to the moon'. I feel, if gold goes to the moon, it will be because the fiat world is burning, and I am not so sure that will be a good thing for its' dependents at all.
I'm rambling. Sorry guys. I'm outta here again.
Love, Scrappy.

Shifty,

I don't know it any of it's true, or if anything will come of it, but the Traficant rant was by far the best entertainment I've seen today. Thanks for posting it.

Hmmm. Let's see...Ventura's a Gov, The Rock appears at the Republican Convention. I'VE GOT IT!! Reno vs. Traficant in a steel cage match. Loser gets indicted. My money's on the scrappy lesbian. Lord it's fun when Dems smell chum and begin eating each other!

M

Source: BridgeNewsForce majeure declared on Falconbridge Sudbury copper output London--Aug. 9--Canadian nickel and copper miner Falconbridge has declared force majeure on copper shipments out of its Sudbury, Ontario operations due to ongoing strike action by workers at the facility. Falconbridge informed its customers Wednesday morning that its copper deliveries will be 40% down on contractual deliveries for the month of August, with details for copper deliveries in September due to be released "nearer the time," a Falconbridge spokeswoman said. (Story .13876)

Falconbridge says still "several weeks" of Sudbury nickel stocks London--Aug 9--Canadian miner Falconbridge said Wednesday that it still has "several weeks worth" of nickel stocks at its Sudbury, Ontario operations, and any potential contractual delivery problems were still a long way off, a company spokeswoman told BridgeNews. The announcement comes in the wake of this morning's force majeure declaration on copper shipments at the nickel and copper facility. The group produced 41,000-tonnes of copper-in-concentrate in 1999. (Story .17856)


These 2 press releases came out today. So, what's wrong with this picture? Copper prices are rising again, and of course, declaring force majeure would be nice if you have a large supply on hand. Renegotiate terms, and sell the supply at the higher price. At the same time, the Cu price continues to rise. Interesting idea.

http://www.russiatoday.com/investorinsight/business.php3?id=187427DITTO!

http://www.mises.org/Also

http://www.mises.org/product.asp?sku=B164

I have been reading in Rothbard's tome and in a couple of his other works. The read is difficult because of the great clarity of his writing.

The problem for me is in the shock I feel after reading each of his basic propositions. The clarity of writing makes it inescapable to think of the consequences of his statements for today's economic structures and practices. The other part of it is the irrefutable nature of the basic arguments. Things are set clearly and that is indeed a shock for anyone used to reading economics, even Austrian economists.

Ouch

Any and all Rothbard is hereby highly recommended reading.

Its sad. That story should be on every news report! The silence is defining. Where are the Republicans? Are they all so corrupt that nothing can be done! Where are the journalists? Is there wide spread blackmail? At this point in time nothing would surprise me.

CNBC's resident buffoon, Ron Insana today said that a secret source claimed that the increased output Saudi oil would appear on the market in the next few weeks. He suggested that oil prices would be dropping. Strange, since the 20 day trading cycle of Brent North Sea Oil priced at over $28.00/bbl has failed to materialize, does this mean that he Saudis are liars? It is difficult to believe much of anything touted by the talking heads in the financial media as they parrot the "company line". Any additional petroleum that enters into the market must first find a home. The refiners don't want it. Their tank farms are nearly empty and inventories are at 24-year lows. This we have discussed over the last few weeks, and so it is no surprise here. The API inventory numbers also confirm that driver behavior has not really changed and as prices of gasoline rise, drivers have not cut back their driving behavior. So what will the Saudis do with all this extra oil? If the refiners continue to operate on the "just-in-time" inventory model, avoiding inventory taxes and possible losses if the price should fall, where will all this oil end up? Curiously, as Ron Insana was waxing philosophical, the price of oil rose to $30.35/bbl, oil services and energy stocks reached all-time highs.

Just lurking of late with many tasks on my plate. You will find all you need here in the HOF (Hall of Fame) the Archives (Another Thoughts) and Walking the Gold Trail with FOA. Relax among friends and learn away. View Yesterday's Discussion.

http://www.mises.org/oil.aspMost of the topics covered are critiques of US EPA (i.e. Gore) limiting potential oil supplies on the one hand, and introducing "oxygenates" that make gasoline production more costly. There are articles on the general ignorance of economics among the political class. Also, there is the often repeated observation that in the "mini" oil crisis of today the government has created the crisis but insists that someone else is responsible.

The libertarian economists are expecting that the public will again clamor for additional government intervention.

Today, when I ask people "do you trust politicians?" the answer is a unanimous "no". When I continue to ask "do you believe politicians are corrupt?" the answer is less decisive, but is still a solid "yes".

Then I ask, "then why should you expect the bureaucrats they hire to be any better?", and follow up with "and why should you expect the laws and regulations they pass would be any good?"

I also would like to welcome you. You came to the right place to learn about GOLD!

$hifty
:)

Thank you all for you patience and thank you for answering my questions. There will be more to come as this sort of thing intrigues me greatly.

I stumbled across this site while looking up info on the Trilateralist Commission. Auspec said something about this being international intrigues and gov't motives.

Yeah, I have a life full of international intrigue and gov't motives ahead of me. I want to be the president of the United States on day. If I am not, I think I am meant to lead (don't take that as me thinking too highly of myself, I just can't imagine how I could ever be happy if I were not leading something or improving something, or right in the middle of politics of some sort) and I am headed for a career in international politics. I realize, since I'm not selling my soul to...well, since I'm a free thinker and can be a bit radical for some--probably not for those on this site--I may have a problem but it is all about trying and having a strong leader.

How knows what the future holds. In the mean time I'm finding out what is out there and educating myself on as much as possible. I'm getting a feel for other peoples' beliefs and theories. I appreciate you guys and gals back tracking and answering my questions and hope I won't become too much of a pest with future questions (believe me there will be many.)

Why is it scary for the price of gold to fall below a certain amount? What does that mean for the economy, what does it mean period?

Sometimes I think being on the gold standard again would not be a half bad idea. I don't fully understand the working of the gold standard in conjunction with inflation. My history teacher did not do a good job answering my questions on the subject and my dad has tried. Maybe someone here could tell me what the advantages and disadvantages would be and how the gold standard works in conjunction with inflation.

My dad stated that he felt the gold market is being manipulated but who is manipulating it? How would holding down the price of gold be profitable politically or financially?

I have decided that the job of the media, newspapers being no exception, is not to publicize or print the news but to censor it. It seems to me that a lot of times we seem to be getting the same side of many stories so what are some good papers, underground or otherwise, that tell the other side of the story, the story we are not being told?

While I do not know that much about the oil situation I do know that among other things, it is affecting the price of gas. I want to understand the oil situation better as well. In the mean time, I suggest, in lue of the recent oil...problems and gas price increases, we all convert our gas burning beasts to propane. I am telling you, it is a lot cheaper, better for the engin, better for the air and if your beast will not pass smog on gas it probably will on propane because it is cleaner burning. In addition, propane is safer than gas, easier of the pocket book and those of us running our gas guzzling beasts (for me a �56 Chevy pickup) on propane the oil situation (while important to us all) is, at least, not such a burden on the pocket book.

OK......I've just about had it.I really can't sit back and watch the price of gold go below $270/oz. Being new to the game, I bought too much at the same and much higher price. SO........it looks like the "paper markets" are going to hang in there and not blow until the general election is over. I'm thinking about taking approximately half of my physical and cash it in. Then, (as I figure it) invest the cash in the market until I make up my losses on physical. In the meantime, it really looks like gold will continue to drop. I'll then begin buying physical back at the lower prices and hopefully get into a decent mix of various physical holdings (at different price per ounce) that will average out over the long run.

Anybody want to call me crazy?

The attitude you took is that of the trader. Traders are out to do a quick buck. The first rule is to have made your decisions on when to sell well before you bought. As a trader, you would also know that one does not go out into an alternative trading vehicle in order to "make back losses". One goes into an alternative because of conviction of its superiority in providing higher returns more quickly.

The investor buys value in the expectation that "eventually" it will out. That over the life of the investor, the value buy would be a profitable one as the markets recognize it. Of course, the great value could also become a substantially better value. Thus the value investor moves his investments among the best opportunities, investing gradually, and sometimes diversifying.

The traditional role for gold is neither of the above, it is insurance against fiduciary failure. It is the one financial asset that is not a promise (debt, dollars, bank accounts) and is not a hope (equity) for someone else to perform well. It is precisely when debt is not paid in good faith and performance expectations are not met that gold does best.

Buffet said it is only when the tide goes out that you see who was swimming without a bathing suit. Gold is the bathing suit for the swimmers in the financial markets.

Decide as you will, you should first know why you are holding gold.

TEX- Yer CRAZY! ;-)
Bambie- Gold represents the ultimate competition to Fiat, or let's say, Paper Currencies.
All these smart people who wear Suits figured they could control the POG in a slow but sure reduction in value in relation to the US$.
All their mates thought they could too and hopped on the Bandwagon by "shorting" Gold ie:- selling something you don't own.
So there's this big shortfall in the Supply/Demand ratio that, up until the Washington Agreement, was expected to be filled by the Central Banks of the World Leasing/selling into the Physical Market.
The WA limited the flow of Bullion into the Marketplace and it appears those who were not signatories to the Agreement have been pretty well tapped of Supply.
Just a note- Silver is in an even worse predicament!

As you continue your quest you'll find this subject to be the most fasinating/intriguing/frustrating topic on the Planet.
You will also, when you are up to speed, be able to clear a Room of otherwise interested people, in minutes FLAT.

WELCOME to the World of Goldbuggery.

Your comment about a "leader" goes to Gold also...

Since 1971 when the US abandoned the practise of honoring International Debt with Gold, the planet has been without a Financial Leader ie No one thing represents the foundation of the Financial System.
This is assumed by most hard asset devotees to be a recipe for eventual Disaster.
Good luck with your ambitions.

It was the stated policy of the US up till 1976.

The only difference today is that it is no longer stated.

Bought @ 284

Bought @ 277.40

Expect bounce back to 284, if we take it out 289 than 290-91

Be patient, you will win.

Sources: Yahoo Biz news, AP Newswire, and Bridge newsTHE EASTERN FRONT:

Asia Precious Metals Review: Gold trades at US $272-273
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Aug. 10--Spot gold traded at the range of U.S. $272-273 per ounce for much of the Asian trading on Thursday with physical demand supporting the price, dealers said. As gold stood firm at $272, short-covering may push up the price later in Europe, some predicted. Trading of spot silver, platinum and palladium was very sluggish in Asia.

Black Blade: Yawn

PGM NEWS:

Ford plans to cut costs by switching nine vehicles from expensive palladium to platinum in catalytic converters within the next 12 months.

Black Blade: Good for Pt as Pd supplies are sketchy as best. Russia may provide some Pd concurrently with mining from Norilsk, but after maybe a month of deliveries, they are back to ground zero.

ON THE LIGHTER SIDE OF THE NEWS:

CBS Apologizes For Bush Graphic
By Lynn Elber
AP Television Writer
Wednesday, Aug. 9, 2000; 7:39 p.m. EDT

LOS ANGELES �� CBS apologized Wednesday for a violent anti-George W. Bush message that flashed briefly on the screen during the "The Late Late Show with Craig Kilborn" last week. The phrase "Snipers wanted" was shown Friday across footage of Bush accepting his nomination as the Republican presidential candidate at the party's Philadelphia convention. "This graphic, which was not accompanied by any remarks from Mr. Kilborn, should not have been included in the telecast and is not consistent with our broadcast standards," CBS said in a statement. The network called the display "an inappropriate and regrettable graphic," adding that it and program producer Worldwide Pants Inc. "deeply regret this incident." The company said it would take appropriate action. A Bush spokesman said the candidate accepted the apology "Is unfortunate something like that has happened," Bush campaign spokesman Dan Bartlett said from Austin, Texas. "We accept their apology and look forward to seeing the results of their investigation." Worldwide Pants, David Letterman's production company, also produces "Late Show with David Letterman," which airs immediately before Kilborn's daily show. The phrase concerning Bush appeared on the screen during a segment of the show called "In the News," which features photos, video clips and Kilborn's commentary on current events. Kilborn took over in March 1999 as host of "The Late Late Show," which debuted in 1995 as a talk show with host Tom Snyder. A message seeking comment from Kilborn was not immediately returned Wednesday.

Black Blade: I wonder how many calls were received requesting applications. I guess Al Gore will do anything to win.

Meanwhile, S&P Futures are up +1.00, Fair Value +0.98, somewhat neutral. Oil is down a whopping 10 cents to $30.25/bbl. NG is still flirting with all-time highs and could move up and storage inventory concerns. Au is up +$0.90 at $272.20 (good price to accumulate), Ag is unchanged at $4.85 (a decent price), Pt is down -$4.00 at $570.00, and Pd is up +$6.00 at $785.00 on its way toward $800.00 and beyond. Some people have wondered whether Warren Buffett would get cold feet and dump his silver position. Not likely! Warren the great value investor is likely to be quietly accumulating more as before. When asked how long one should an investment, he replied "Forever". He rarely sells, in fact he is the ultimate definition of "Tight-Wad". Silver and Gold are bargains right now. George Soros recently was said to have increased his position in Apex Silver (SIL). That, however, is just a rumor as of now. The Big Billionaire investors still hold a position in PMs. Note that Bill Gates has a 10.3% position in Pan American Silver (PAAS). I don't bet against these players.

PGMs rising on NY open. Pt up $3.00, and Pd up $8.00. Yeah, "the other white metals". Time to go to the gym.

Technical indicators are showing a bottom approaching in gold and particularly in silver. Most likely to be reached within Aug and Sep.

Watch silver for the first move.

The first silver action may come as early as next week since COTs are well beyond "normal" extremes of relative positioning, and option expiration should be behind us by then.

Gold should see a serious attack attempted within the coming few weeks, probably within the next two. I expect that to be a buying opportunity at 265 or so (with any luck).

Note the volatility in GCZ0-GCQ0, the premium is jumping all over the place. That means that some are having trouble obtaining gold and some others are scrambling to supply it just in time.

Remember that this year is likely to see over 1500 tonnes in the gold deficit. Fresh sources may be drying up soon.

Someone on this forum once described the current world economic situation as a "slow motion train wreck" and that seems to me to be about the best four word analysis that I have seen so far.The problem for many gold hearts however seems to be that we crave a sort of catastrophic resolution of the issues in which gold will shoot up astronomically overnight and we will all be millionairs.

As an example take the situation with oil. Many of the analysts that study depletion rates for oil are now saying that world oil production is likely to peak around 2008. I personally have no way of knowing weither this is true or not. Some insist that the more accurate date is 2020, some say longer, but the most common figure I am reading puts the date at 2008, about 7 years away .While in the grand scheme of things this is just a nano-second in the realm of investment planning it is quite a long time out.

What we seem to be witnessing now is a historic repricing of oil upwards, that seems at least for the time being to be contained within the $ 25- 40 price range. How long this will hold is anybody's guess but it does not seem unreasonable to think that it could hold for another 18 months.

The mechanics of the oil supply- demand -exploration sequence have been stated numerous times and might be summerized as follows. When supplies become constrained the price goes up, as the price goes up more money is spent on exploration, which brings in more supply ,which brings the price back down to a new equillibrium. In general the more easily produced oil is exhausted first and as the price rises then oil that is harder to reach and costs more to produce becomes economically feasable.

So when the price reaches $30 per barrel ,oil that costs $25 per barrel to produce becomes economically feasable. When the price hits $35 per barrel then oil that costs $30 per barrel to produce becomes economically feasable and so on., and in fact we do seem to be seeing fairly substantial new exploration occuring at the present time ,which should bring new supplies on line ,which probably will keep the price of oil from shooting through the roof in the next two or three years. Of course if there is political turmoil somewhere in the oil producing countries then all bets are off.

We have also been told numerous times that the current price of oil at about $28 per barrel is in reality about the same as it was 25 years ago after the rate of inflation of the dollar is factored in over that time period. So in fact the price increases in oil that we have seen so far are really fairly moderate, perhaps explaining why the inflation that everyone has been expecting has not really materialized in a major way.

This is not to say that the Another -FOA scenario that has been developed here over the last couple of years is not true.It simply has not been tested yet.

http://www.usagold.com/Order_Form.htmlDAILY COMMENTARY

(8/10/00) www.USAGOLD.com . . .Gold showed some signs
of life this morning defying the dreary dog days of summer
seemingly in response to a postive demand report from the World
Gold Council and the markets dealing out a general tone that could
stack as favorable to the yellow metal. The dollar is down hard today
against the euro and Swiss franc. Volatile crude oil is up this
morning as Venezuela's President Hugo Chavez, an oil price hawk,
travels to the mid-east for a round of talks with various heads of state
including Saddam Hussein. Tomorrow we have the Producer Price
report to be followed Tuesday by Consumer Prices (though given the
current government propensity to shade economic reports to the
Clinton administration's advantage, we don't expect much in the way
of drama). Nevertheless, the public seems to be internalizing a
growing inflation psychology which is helping demand for the
yellow metal.

A further hint of things to come was apparent in yesterday's Federal
Reserve report that the economy is slowing - - a characterization few
believe at this point but most understand as election year posturing.
One would assume that the Fed is laying groundwork for non-action
at the upcoming Fed meeting. The stock market however is not quite
so sure about what all this means as it meanders this morning
looking for direction.

The gold price is being supported at the current level by physical
buying, but it is cautious buying. Some big players are watching for
a break that would take gold below the $270 mark, where solid
support would likely surface. Others are beginning to cover their
shorts.

The World Gold Council reports that gold demand "continues to hold
steady" -- down just 2% from last years record levels in the second
quarter. The Council reports strong gains in Asia where gold demand
has risen as those economies recover from the 1997 Contagion
disaster. We have reported here in the past our contention that Asian
demand will dominate the market this year as investors burnt by the
currency meltdowns in that part of the world take measures to protect
themselves against a repeat performance. The World Gold Council's
findings seem to vindiate that position with Malaysian demand up
22%, Thailand, up 69% and Taiwan, up 13%. We expect Asian
physical demand to underpin the gold market for some time to come.
As mentioned here previously, this is a good time of year to make a
gold purchase since seasonally it usually marks the low water mark
on the price charts.

That's it for today, fellow goldmeisters. We'll see you here
tomorrow.


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http://www.worldnetdaily.com/bluesky_sperry_news/20000810_xnspy_pat_puts_m.shtml
ELECTION 2000
Pat puts money
where mouth is
When it comes to investing in New
Economy, Buchanan takes no stock


By Paul Sperry
� 2000 WorldNetDaily.com

WASHINGTON -- Pat Buchanan has been
consistently down-in-the-mouth about the
new, global economy. So consistent, in fact,
that when it comes to investing in it, he's put his more than $1 million where his mouth is.

Federal Election Commission records show
that Buchanan, who this week hopes to earn
the Reform Party nod for president, has sat
out the record run-up in high-tech and
multinational stocks over the past five years.

In fact, Buchanan invests like someone
waiting for a world financial crash.

He's got most of his $1.2
million portfolio tied up in
cash, municipal bonds,
mostly in his home state of
Virginia, and gold and silver
-- as in ounces of bullion,
not shares of mining
concerns. He actually has at least $250,000, or
20 percent of his holdings, in precious metals
stashed away somewhere (see chart).

Oil surges on Kuwait/Iraq Tensions

Oil surges on Kuwait/Iraq Tensions

"If I am not, I think I am meant to lead (don't take that as me thinking too highly of myself, I just can't imagine how I could ever be happy if I were not leading something or improving something, or right in the middle of politics of some sort) and I am headed for a career in international politics."

Hang in there B ... one day a cure will be found.

gidsek

TOPAZ - Thanks for confirming my own suspicions (smile)
ORO - Comments well taken. Again, I got into the business with good intentions but initial bad advice. Just trying to get to the point that I can "reinvest" in physical with a more logical long term process.
YIKES!

http://www.usagold.com/DailyQuotes.htmlThese things are to be expected in a technologically advanced world from time to time.

Funny, though. I've never needed to spritz down my gold. There's a lesson in there, somewhere.

here is the newspapper you asked for http://www.spotlight.org

http://www.usagold.com/DailyQuotes.html http://www.usagold.com/DailyQuotes.htmlJust a suggestion, but if it's at all possible it might be nice to include the closing price of Crude Oil on the above quotes page, as well. FOA and Another certainly have posited a link between the POO and the POG. It would be nice to be able to get all the price information in one spot. Thanks for considering it.

Select Gold ( FSAGX ) posted the largest percentage gain
today, with respect to the other 37 Select Portfolio funds.
Lets hope it's a sign of the future!

dec gold is going to move. wedged in with short range to breakout. 277.20 ------------279. Excuse ppi report but it was in mkt on wednesdays low. should get good short covering now.

I've been quite busy the past few weeks, so not sure this quote has been posted yet...it's from this week's Barron's. From an interview with Marvin Shwartz - manager of the highly regarded Neuberger Berman Fund.

August 7, 2000
pp. 28-32, copyright Barron's

..."We are heading for a crisis in petroleum. And a potential crisis in natural gas is right around the corner because you cannot easily import additional quantities of natural gas. With petroleum, you can lean hard enough on the Saudis and they will do us a favor and open up some valves. But even that is becoming rather precarious as a long-term solution. Every day the world is consuming 77 million barrels of oil. World oil demand is growing at TWO MILLION BARRELS A DAY (my emphasis), with the growth of China, Japan's comeback and the business pickup in Europe. We just don't have the excess supplies that are going to feed this insatiable demand. From a short-term view, natural gas is the more urgent of the two problems. And from a long-term view, and I mean less that five years, we are going to have a problem with petroleum."

So, 500,000 additional barrels a day is like spitting in the wind...and it's the increases from Asia driving this train.

Hey Gang- Here we are in the depths of gold market despair once again and one of my heroes, John Hathaway, comes out w an article on the Gold Eagle forum. Have you ever noticed his incredible timing at writing about the gold market just before it soars? One more time, John, w a little more staying power please! Let's say just for the sake of discussion that I came to the rescue of some boys that got in a jam a few yrs back by shorting excess gold and getting caught with their boots off. I took over their losing position because I have the deepest pockets and also a great deal at stake in this matter. What is my plan to get out of this mess with most of my chips intact? First of all I am hoping for a home run scenario- will do everything in my considerable power to get the gold price down in a panic low, ideally to the 200$ level that all were so fearful of about a year ago. Then can cash in the shorts and go long, laughing all the way to the [bullion] bank at the expense of those that panicked. My second scenario is a singles game and it has been ongoing for several years now. I basically run the market $10 to $20 in one direction, pick up a few chips and then run the market the other direction for a few more. If this is done enough times [ Lord only knows how many ] this ugly short position will go away. The moral to this story is that the true gold advocates must avoid, at all costs, the panic low they are looking for. You there Tex? There shorts get less painful every $20 they clip away at, but my guess is time and size of position is not on their side. Bambie, it looks like you're getting a few spikes on the top of your head. Good luck on leading the multitudes, I am working dilligently at leading myself through life's maize, as well as being a follower. I also am new to this site but have been fairly consumed since 93 w precious metals- thus even my mother calls me AUSPEC.

Re >>> Every day the world is
consuming 77 million barrels of oil. World oil demand is growing at TWO MILLION
BARRELS A DAY (my emphasis)<<<<

That would mean "World oil conumption will double every 38 1/2 days." I think some numbers are being tossed around a little on the loose side here.

Would double in 38 1/2 triple in another 38 1/2 etc.

NOT likly

ORO, you took me by surprise with "Technical indicators are showing a bottom approaching in gold and particularly in silver" (34742). I guess I have never thought of you as someone who views markets from the technical analyst's point of view by which I imply market predictions based on time cycles, recurring chart patterns, wave theories, Fibonacci numbers and such. What specific indicators have brought you to this conclusion? I have never resolved how much truth to bestow on technical analysis or if such predictions of market resistance and support prove correct simply because enough people believe them to be correct, and act/trade/invest accordingly.
Concerning silver, total open interest according to IBD on 8/4/00 was 75,342 contracts. Total O.I. listed in today's WSJ is 89,533. I don't know if these numbers are in the catagory of technical or fundamental analysis but I do believe the increase indicates a possible move upward in the price of silver and, as they move together more often than not, gold. Technical analysis has impressed me with being a better timing indicator than fundamentals and is the reason that I'm trying to understand it more. It's the fundamentals that offer the solution (IMHO) of market prediction and putting all the fundamental ducks in the right order is exactly what offers the challange (provides the fun) for me.
If you can, what fundamentals brought you to that conclusion and what does the O.I. tell us?
Thanks R.Powell

I'm glad you caught that, because it was that part of the quote that really took me aback. I agree, seems outlandish - I've double checked the quote and it is as appeared. Maybe misquoted in Barron's.

Someone posted recently that China is refining 4.4 million barrels more a day than this time last year, so maybe it should have been 2 million more barrels a month(?). Who knows.

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

Release Date: August 10, 2000

Rates for Wednesday, August 9, 2000

Federal funds 6.48

Treasury constant maturities:
3-month 6.25
10-year 5.81
20-year 6.02
30-year 5.73

upside-down spread FF vs long bond = (0.75%)

That would double global consumption in three years. That's still an awful lot of new cars, fertilizer and plastics to be produced, in that time.

Maybe he meant to say "Oil cosumptions is increasing at a rate of 2 million barrels a day per year."

Dear Friends, I am sorry for breaking one of your rules in my recent post. When it was removed I figured out what I had done wrong {inadvertently}. Wouldn't mind it being edited or reworked. Thanks, AUSPEC

Just for the record, nobody removed one of your posts.

Towncrier is off celebrating his birthday and I just tuned in and we are the only two so empowered.

After you post, if you don't see your post, try clicking the refresh or reload button and the Forum will reload.

And there it will be. . .

Also, note the message numbers are in sequential order.

TEST

A Big Hello to Michael Kosares and all the people at Centennial Precious Metals!

And Hello To Everyone That Reads And Writes On The USAGOLD FORUM!


I have been away for a while and consumed some good Thoughts from many people in many places. Having only been back a few days, I have a large personal agenda to take care of. Once
that is done, I'll offer up my views and Another's perception on this ongoing evolution of Gold. Some of this has again arrived in the familiar "Another (Thoughts)" context.

By now most of you may agree that our world economic function is fast changing in a dangerous way. This new function's direction has blocked the return to "normal" markets and the "normal" paper contract prices many of us experienced in our youth. In Dollar terms, we will never see these markets correctly value anything in our economic structure again. We are on a march into total dollar hyperinflation as our dollar evolves. Now, more than ever for the USA, "paper contracts of all forms must expand rapidly" or our dollar and our way of life will fail sooner rather than later! I think this slow process is well understood by many quiet thinkers, worldwide.

From Another before I departed:

========

"Look every direction to world's currencies as these do price gold for modern economy. I say now this not price of my gold. It be price of "your Western gold"! These Western gold values be true! It must it has no weight! My friend, man who does control not wealth, has no wealth, yes? Indeed,
any man that be "surprised" as value falls of paper gold wealth he owns and controls not "be a great asset to one that sells such wealth", yes?

We ask now what be "true value" of gold in world if all have contract metal but few do control value of contract? A world where economy stand on "strong legs" of government money and debt. Strong indeed with good flow of oil? Oil that once was pumped for "two golds" of equal worth.

Two golds there still be this new day, two golds. However one holds no value and held by many. Other holds value as never before, held by few. This oil, it slow now until there be one gold, one gold for all to see!" This day on, two gold bring "weak legs".

Another (Thoughts)

=========

Thanks everyone, I'll be back in a few days or so.
FOA/ your Trail Guide

Thank you "denboy" I found your comments very interesting and worth sharing with other forums. "S"

The Gold Drama
(denboy) Aug 10, 20:27

We are witnessing an interesting drama taking place. The gold price has been knocked down to such an incredibly low price that even a small uptick could cause a tidal wave of buying.
The gold manipulators see themselves as "Custer's last stand" in order to protect the U.S. paper dollar and all the myriad of international fiat curencies from the wrath of the "MONARCH OF ALL MONARCHS' - gold (Shakespeare).
The manipulators are now caught in a dreadful dilemma. They have to skewer the price down permanently - in perpetuity.
The low price of gold is a mirror image of the severity of the economic situation which is currently experiencing depression and inflation simultaneously. 64,000 corporate layoffs announced for the month of July and how many non-corporate layoffs? The manipulators are fighting for their economic lives!
As soon as gold goes up the whole sordid manipulation is exposed. The lower the price goes the more international demand for the metal, causing the Central Bankers and manipulators et al to be obliged to sell all their gold in order for the financial hoax to continue to be perpetrated

So physical gold for oil again eh? I wonder how domestic, Mexican and Venezualan oil will play for physical? They are not of the dinar mindset, no?

Welcome back! Glad to see you!

Your input here is so appreciated! Thank you.

FOA, welcome back. Your "timing" is perfect.

If authorities think the wild fires out west are bad, wait till the assorted paper markets get goin! I hear thunder, I smell lightning!
Gold is Precious

Welcome back, I see that you have returned to your old handle. Since you bring up Another, do you have any of his views concerning the most recent petroleum crises? Also, is he likely to drop in on this forum and take a few questions now that he has been absent for so long? My take is that the oil demand-supply equation has become quite out of balance, and I expect that oil could rise to $40.00/bbl in short order. In fact, if this winter should be a bit on the severe side, then $50.00/bbl oil would not be out of the question, not to mention record high prices for Natural Gas. The last couple of US recessions were preceded by sharp rises in oil, mostly out of political concerns. The most severe was of course, the OPEC induced shortage in the early 1970's in response the the US support of Israel, and secondly the short lived recession due to the Persian Gulf conflict. Now, this time the petroleum question is quite different as it is based on the fundamentals of supply and demand and is likely to be a long-term sustained problem possibly leading to a long-term recession (if history is a guide). I would like your veiw on this. Also, if Another were to be so kind, I would like to read his perception of this issue as well, especially since he apparrently "might" has some unique insight here. Thanks in advance - Black Blade.

Black Blade...ORO...get ready boys, you're going to be called upon to decipher the mysteries from abroad.
TIA

A rumor that has been floating in some circles over the last couple of days about silver supply, is that the most recent Gold Fields Mineral services (GFMS)report on silver may have mistated silver stockpiles. The rumor says that Warren Buffett's 20% of world silver peoduction supply was double counted. First, as supply onto the market when leased, and Secondly, as "above ground supply" as though it was all still in the London warehouse. this is only a rumor, but if true, it would account for a lot of discrepancies in the "Silver report". Also, the question arises, could it be possible that this was an isolated incident? Also, could this be another reason that GFMS refused to debate GATA on the PM supply issue? It certainly cvould raise a lot of red flags.

Just came back from dinner with my family celebrating my 49th birthday. We all went to a lovely Italian restaurant full of Frank Sinatra memorabilia. Old tunes from the 40's by Jerry Vale, Dean Martin, Rosemary Clooney and ol'Blue Eyes himself played at just the right level for conversation. Calamari appetizer, garden salad topped with mandarin orange vinegrette, scallops florentine entree, crusty Italian bread, and a magnificent not-too-sweet hand-made canoli for desert...all washed down with a smooth French Merlot. If Vito Corleone had walked in, I wouldn't have been surprised. It was heaven! And my two youngest sons...11 and 12 actually behaved themselves!
And then to come home and look in on may favorite website to see FOA post again!...with the additional treat of a message from Another!! I'm just too excited for words!
Their arrival portends new excitement in the gold market and I'm READY! Will the paper and physical prices part ways soon?

An enthusiastic Welcome Back to FOA and Another!
from simply me

P.S. To Tex: In six months you will see how crazy that plan was. Besides, in which stocks or fund were you going to invest for that sure-fire return to put back in gold? Merril-Lynch wants to know!

Did you park the GOLD Mercedes in London or Paris ?
<;-)
WELCOME BACK HOME!

Whew.......I guess you would call that late night/early morning post something similar to "a momentary lapse of reason". I gotta get some real sleep and stay away until morning. Thanks TOPAZ, ORO, AUSPEC and SIMPLY ME for the comments. Think I scared FOA and ANOTHER enough to return?
See you all later in lurker land. I gotta hit the sack.
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!!!!!!!!!!

Query: Did anyone watch "Dateline" Wednesday night? There were two primary subjects which caught my attention: the world of banking and politics; and the world of humans interacting with sharks. Come to think of it, I believe there is a definite connection between bankers and sharks. Anyway, the story about how our illustrious (notorious?) Chase Manhattan Bank supported the rise of Adolf Hitler to power. In fact, Chase Manhattan was more than eager to finance the "Rueckwanderung" program of the Nazis. Why would that be? Because faschism was good for business. Everyone had a job, no welfare loafers, and the trains ran on time! And Chase Manhattan knew what it was doing. It took an act of Congress to prohibit trading with the enemy. Otherwise, it would have been business as usual throughout the war.

Fast forward to the present day. In the upcoming August issue of our firm's newsletter, News & Views, we quote the World Gold Council's July 2000 Report wherein it states the figures compiled by the Office of the Comptroller of the Currency on the value of gold derivatives. Without stealing the thunder of our publication, as of 31 March 2000 the off-balance sheet value of gold derivatives of the U.S. commercial banks stood at approximately $95.5 billion--up from around $87 billion at the end of 1999. With the way the gold market has been pounded in recent months, I am sure that the value of gold derivatives is well in excess of $100 billion and probably approaching $120 billion. Now guess who is one of the major players? You guessed it--Chase Manhattan Bank!

Now to all of those skeptics who talk to me on the phone or who read this forum: If Chase Manhattan can finance Adolf Hitler, the greatest tyrant of the 20th century, who caused directly or indirectly the deaths of about 50 million people, then why is it such a stretch to believe that Chase Manhattan is actively manipulating the gold market? Are the skeptics brain-dead or just wanting to believe the party line? One final thought. History has a funny way of revealing hidden things at precisely the right moment (for the masses) and at precisely the wrong moment (for the manipulators). It would not surprise me that this story of Chase's involvement in Hitler's war machine could lead to a gargantuan settlement and payout to the victims of the Holocaust courtesy of the World Jewish Congress. Just witness what happened to the Swiss banks and German companies in the past 3-6 months. If Chase Manhattan has to pay, then where will the money come from to continue the gold derivatives game? And what if the gold price jumps (for any number of reasons) above $310/ounce and Chase is forced to cover its shorts? Last September's $80 rally in one week will be chicken feed in comparison. We are now talking hundreds of dollars per ounce.

Just checking in one more time at a late hour -- and seeing the first (latest) posts announcing FOA's return! I'm looking forward to some juicy reading. Something that "we happy few" could use right about now...

www.kitco.comDate: Fri Aug 11 2000 00:23
Earl (John Disney:) ID#227238:
Copyright � 2000 Earl/Kitco Inc. All rights reserved
More on your 3:28 from last nite. This taken from the following link:

http://www.gold.org/Gra/Speeches/Rp000411.htm

Total central banks sales 90-99: 3153 tons. ...... average: 312/yr.
Of that total, some 1643 tons in period 95-99.

Total leased gold in yrs 90-99: 4000 tons.
Average in early years was about 250 tons/yr. Rose to about 500 tons/yr in the period 95-99. ..... ( no $hit! )

The divining rod points to average probable dishoarding rate of about 800 tons/yr over 90-99 period.

Estimates for annual dishoarding rate, for the next 5 years are no more than 700 tons/yr or 3500 total.

============================
You failed to note the period for producer forwards ( the 2500 tons ) but spread over the 90s that would have put total gold dumping at some 1050 tons per year. ......... And that still does not account for private stashes made to earn their keep via the generous lease rate.

In a nutshell, we're still a couple of ounces shy of 14,000 tons but mostly over 10,000 total ( total dishoard ) . ....... less total reported sales of 3150 tons........ and we have some 7000 tons on lease and at risk of default.

Closing comment from speech:

"The influence of official stocks on sentiment in the gold market, which has dominated discussion in the past 10 years, will inevitably decline in the long run. This is because the share of the total above-ground gold stock held by the official sector is declining, as all newly mined gold goes into private hands."

Townie & Simply Me:
Many happy returns both of you.

FOA:
Your input has been sorely missed- welcome back!View Yesterday's Discussion.

The "two Golds" posting as offered by FOA from the hand/mind of Another certainly is vastly removed from his previous "style" No?

Let's put it down to not attempting to converse in English for so long----------- Yup, thats it!

Isn't it???

has raised interest rates %1/4.

gidsek

Many who purchased gold will think to cash out on a run up.

This will be different than the 70's.

Fat lady sings,

http://www.foxmarketwire.com/wires/0811/f_rt_0811_2.smlBOJ rate hike and FOA return?

Nonetheless, dare I say this is not a coincidence?

So, what is the effect of a raising interest rate environment in Japan from here forward?

Sorry, but I have nothing but questions this morning, eh?