Good evening HH:
On Deutche-welle (german/english radio) today the 25 bp increase in rates were reasoned as being directly related to OIL price increases.
There didn't seem any great consern (still) re: US$/EURO.
At least they're honest and recognise the inflationary impact of the Oil price increase - albeit oil HAS gone up much more in E than in $.
When you think about it, to expect to take a "snapshot" of eleven different economies, all in different cycles of econ activity, then "cast in stone" a common currency is a pretty big ask, NO?
Then accept that these 11 fractal (they basically hate each others guts) countries are to waltz off arm-in-arm and live happily ever after--------NAAAA!
It's STILL got all the hallmarks of a "Dollar wreak havoc on thyself" scenario and when, and only when that happens-- THEN euro will declare for GOLD, accompanied by China etc. MVHO
View Yesterday's Discussion.

I think you are too hard on yourself when you say "MVHO" regarding the items you've forecasted--because you are essentially already correct, though most people don't see it that way. Yet.

While not widely recognized as such, Europe already has "declared for Gold" when they included Gold assets within the ECB reserves that would be regularly marked to market. The implications of this as the prominent international practice is huge. Where it was necessary, member nations, and even Greece on the threshold, were all required to drop national policy impediments to free trade of Gold.

"...accompanied by China" you say? Bingo. Already in the works. Restructuring markets for the free trade of Gold, that is.

Why the focus on free market Gold, a person might ask? Because a fixed Gold exchange standard is not practical for the reason you articulated skepticism regarding the political and social acceptance of the euro as a unified currency for even "just a tiny block" of countries. You said--"When you think about it, to expect to take a "snapshot" of eleven different economies, all in different cycles of econ activity, then "cast in stone" a common currency is a pretty big ask, NO?
Then accept that these 11 fractal (they basically hate each others guts) countries are to waltz off arm-in-arm and live happily ever after--------NAAAA!"

If you envision resistance among a trading block of 11 countries "shackling" themselves to a single yet holistically flexible currency, is their any practical hope that the entire world would do it for a single inflexible currency in the form of Gold? That's an even bigger ask, and probably rates an even bigger "NAAAAA!" It's better to let Gold fulfill the role in the world that it is uniquely suited to serve--as THE monetary reserve asset held eagerly by nations, banks, corporations, and individuals.

This drive toward freemarket Gold is good thing, and should eventually be seen by monetary thinkers as a natural turn of events--the culmination of past experience and developments to simply "allow" a monetary system to exist which can function in harmony with man's "predictably capricious" character.

On a related note, regarding your earlier seeking of Aragorn--who's well and will surely appreciate your inquiry--it was this same inescapeable human element that most troubled his thoughts regarding what he came to agree was clearly the best-suited system (FreeGold) to accommodate mankind's nature. He held no worries for the longevity of FreeGold once it had itself been well-established, but maintained concern for a waning commitment of followthrough at such a time when the U.S. feels the pinch as the international FreeGold standard gets raised higher up the flagpole. Clearly seeing this as the greatest modern promise for all of mankind coming within reach, Aragorn's concern was that as the necessary and ultimate victory for FreeGold draws ever nearer, "our hands may prove too small to hold it."

Because the U.S. would likely turn bad-tempered upon the loss of its priviliged status in international trade, the "hoisting of the standard" would best be brought about through the comparatively slower but natural evolutionary forces of the multitudes in the international marketplace than through any official "lightning in the night" declaration by any single and easily identifiable "target for anger" in the eyes of the U.S. However, it must be said that any way you slice it, the discomfort felt in the U.S. is from laying in a bed of our own making.

Fortunately, we have at least the potential to attain a good productive capacity, and could soon enough thereafter be participating well with the world on a level playing field of mutually beneficial economic exchange. Furthermore, Aragorn had not long ago suggested that ANOTHER and his message should be treated with the full respect owed to a potential Nobel candidate or laureate; and upon being asked "Economics or Peace?" his answer was "Both at once." That's pretty high praise, my friends, directed toward an anonymous someone who puts messages into bottles to be set adrift upon our cyber sea. And I'm definately inclined to agree. FreeGold strikes the perfect balance--hanging like the description of my "monetary pendulum" with an idealistic yet pragmatic perfection at dead center.

Gold as a fairly valued reserve asset. Get you some. ---Aristotle

The following are just a few government proposals to put the screws to the petroleum industry. Prices will continue to rise, and the blame will go to OPEC, or the "Big, Bad Oil" Companies, but will not land at the feet of those most at blame - the gubbermint! - Black Blade

ANWR monument

This fall President Bill Clinton could designate the Arctic National Wildlife Refuge coastal plain as a national monument. Rep. Don Young (R-Alas.) has asked Clinton to confirm or deny those rumors. Young is chairman of the House Resources Committee, which has jurisdiction over federal lands. Clinton reportedly is considering using his powers under the 1906 Antiquities Act to declare a monument on ANWR's coastal plain, preventing any future development. The coastal plain east of Prudhoe Bay field is believed to contain large oil reserves but cannot be leased unless authorized by Congress. Young said the Alaska National Interest Lands Conservation Act mandates that only Congress can designate monuments, wilderness areas, and refuges on federal lands in Alaska.

Black Blade: This is probably the last possible undiscovered giant oil field in NA. Alaskans want it, but outsiders figure they know best for Alaska. I guess Billy-Bob Clinton dreamt this up while relaxing by the "cement pond". Why shucks, he shoulda called up ole Jed Clampett, Jethro, Granny and Ellie-May and discussed it at one of the White House hoe-downs. Why hell, he could get cousin Hillary, er the wife Hillary, and buy oil futures first. Those cattle futures worked out well.

Diesel sulfur

By December, the Environmental Protection Agency plans to issue a final rule to cut the sulfur content in diesel fuel 97% from the current 500 ppm to 15 ppm. It said diesel must be significantly cleaner-burning to ensure that truck and bus pollution control technology is effective. The American Petroleum Institute warned EPA that the rule will cause shortages. It said, "The refining industry is unable to produce sufficient 15 ppm sulfur diesel, nor can our distribution system supply it across the country."

Black Blade: More refining at stressed refiners, cutting back on available supplies of distillates, and increasing the cost of diesel. Looks like another contribution to inflation and deliveries of goods and services will cost more.

Wilderness roads

In the fall the U.S. Forest Service will be reviewing public comments regarding its proposed a ban on road construction in nearly a quarter of the 192-million-acre National Forest system. The proposal covers more than 54 million acres of inventoried roadless areas. It would allow forest managers to propose additional protection for the inventoried areas and other smaller roadless areas through local forest planning processes. The Independent Petroleum Association of America said, "The nation needs more access, not less, to areas of this country where oil and gas may be found." House and Senate committees have held hearings critical of the proposal.

Black Blade: Wonder why we aren't self-reliant for are oil needs? Of course after Bruce Babbit's, Al Gore's, and Billy-Bobs "slash and burn" policy of the western lands due to misguided ideas of environmentalism and conservationism, petroleum and mining companies may be allowed onto the resulting "moonscape".

By: THE ASSOCIATED PRESSHigh gas, oil prices may make winter a bit costly

Charleston Daily Mail

CHICAGO - Whether they use natural gas or oil to heat their homes, consumers can expect higher energy costs this winter, with natural gas and heating oil prices near historic highs. "This year the squirrel isn't burying any nuts and we're going into the winter on fumes," said Phil Flynn, an energy analyst for Alaron Trading Corp. in Chicago. "Unless something dramatic happens, we're looking at a very expensive winter." Energy markets were jolted this week by a combination of developments that sent prices shooting higher - an unexpected drop in U.S. crude oil stockpiles coupled with a pipeline explosion in New Mexico and a hurricane that raised fears of another blow to already- low natural gas supplies. Soon the aftershocks will be felt by consumers, whose utilities already were warning them to brace for big bills ahead. Suzanne deGraff, a natural gas customer from Rochester, N.Y., said she's been told her monthly bill from Rochester Gas and Electric Co. will jump about $26 to $130. "I'm not happy," she said, "but, again, they're the only ones in town. What am I going to do?"

Whether a customer's utility provides natural gas or heating oil, there appears to be no way around prices
heading higher than last winter - one of the costliest home heating seasons ever. Home heating oil prices surged this week to their highest since the Gulf War in the wake of industry surveys showing inventories of U.S. crude oil, its source, dropping to 24-year lows. Heating oil remains more than 50 percent more expensive than a year ago. The increase is blamed partly on a cutback in production by the Organization of the Petroleum Exporting Countries.

Natural gas has rocketed upward for different reasons.

U.S. supplies of natural gas have been declining since the mid- 1990s amid a drop in production by energy
firms that didn't find it worth their while when prices were low. Prices have more than doubled in the last year and a half and reached an all-time high of $4.85 per 1,000 cubic feet this week on the New York Merc, where futures prices are a precursor for wholesale and retail trends. Making matters worse, production hasn't been revved back up, rising just 1 percent this year. And demand is up sharply in a booming economy that has industrial use surging and more Americans plugging into computers. The nation depends increasingly on natural gas to generate electricity as utilities gradually switch from coal and nuclear-powered plants. The situation has worsened this summer, with heavy usage for air conditioners preventing the industry from stockpiling for the winter as it usually does. Natural gas inventories are near six-year lows. That leaves gas prices highly susceptible to supply disruptions - such as last Saturday's pipeline explosion in New Mexico that killed 11 people and shut down a primary gas main supplying California. Hurricane Debby's brief advance toward key production facilities in the Caribbean and the Gulf of Mexico raised fears of similar trouble and propelled prices higher before they fell back. Experts say consumers could skate by this winter only if last year's warmest winter on record is followed by one at least as warm.


Black Blade: Got my wood-burning stove, several cords of juniper, and a whole mountain range of trees. Looks like a few people might be shivering in the dark though. I guess some could keep warm by thinking warm fuzzy thoughts of how they are contributing to the environment with self-sacrifice, and how there is no inflation because the new economy doesn't require petroleum. I'll think of them while I sit by a cozy fire, smoke a stogie, and read a good book with a glass of brandy in hand. Then again, maybe I'll just get naked and roll around in my gold bullion :-)

PURCHASING POWERThat philosophical ditty, that begins with, " and the race does not go to the swift" is false.

Tes it does go to the swift. To those who have concluded what means are best deployed to safeguard purchasing power over spans of time greater than 1 qwarter.

Make no mistake, the tempo of musical chairs spiraling around a black hole of debt, in our virtual world, has reached overwhelm speed.

I see many, many running harder and harder, but slipping behind as purchasing power relentlessly evaporates, almost in an invisable process.

The implications of more and more of the masses being unable
to afford a standard of living that Masison Avenue portrays as "normal", will continue to escalate social angst and
unrest.

PURCHASING POWERThat philosophical ditty, that begins with, " and the race does not go to the swift" is false.

Tes it does go to the swift. To those who have concluded what means are best deployed to safeguard purchasing power over spans of time greater than 1 qwarter.

Make no mistake, the tempo of musical chairs spiraling around a black hole of debt, in our virtual world, has reached overwhelm speed.

I see many, many running harder and harder, but slipping behind as purchasing power relentlessly evaporates, almost in an invisable process.

The implications of more and more of the masses being unable
to afford a standard of living that Masison Avenue portrays as "normal", will continue to escalate social angst and
unrest.

"FRANKFURTER ALLGEMEINE ZEITUNG

August 30, 2000
Is the gold price manipulated by large banks and the American government?..."

Given GATA's assumption that the FAZ articles were inspired by the Bundesbank,with the above title they would show they want a free Gold.In the other article,the words "free market" are used in the context of the Gold market:

"..In the free market, which in the case of gold is being
"made" ..."

Another interesting sentence:

"..they have to take a good look at the solvency of their
own clients as well their counterparties, when trading with derivatives.." (sounds like a warning!)

And there is no talk of Central Banks manipulations-a sign that the present Gold market is not backed anymore by them?

My speculation:Europe wants a free Gold market (June rumour!)-a fact, and the FAZ articles were the warning shot.

(BTW,Switzerland will end with selling of the first tranche end of Sept..Details of the second tranche are still open I think)

I really love your message from early this morning about Free Gold. It set me to wondering, though. When you consider that most European nations are essentially socialist, and that the U.S. is getting more that way every day, I wonder how long it would take the government to decide that gold could better be used for "the common good" rather than personal wealth.

Here's the results of palladium auctions on one ounce pieces
over at our popular auction website:

Bermuda Commemorative $698.01 (did not meet reserve)
Soviet Ballerina 790.00 (bidding ends today)
Engelhard ingot 708.00 (did not meet reserve)
Panda 725.00

So the average price on our off-market palladium is $730.25, just shy of NYMEX's frozen $740 spot price. Also note that once the Ballarina is gone, there are no more bullion pieces up for auction.

According to one of my sources in the business, the Defense Logistics Agency is auctioning some of its palladium stockpile, providing a small amount to the market. Apparently, most manufacturers are awaiting a resumption of shipments from Russia. This source also states that there is no dealing directly with Russian miners as all palladium is sold through a state agency.

**************************************************************

As you can see, off-market palladium is going for no more than NYMEX's frozen spot price. Draw your own conclusions.....

Uncle Oro,

Can we PLEASE have one more horse racing story Uncle Oro?

Stranger,

The NEW ECONOMY is keeping inflation in check; it's the best thing since sliced bread!!

The "Defense Logistics Agency" has auctioned 100,000 ounces, and the remaining 800,000 ounces are to be auctioned also. There was only 900,000 ounces in the strategic reserve to begin with, and it is all for sale. As far as an auction for a couple of one ounce bullion Pd coins is concerned, I seriously doubt that the major industrial consumers are going to waste their time bidding on ebay. Most manufacturers are working off their Pd stockpiles (sponge-form), and taking contractual deliveries from western sources. Others have switched back to the Pt-Rh combination that they used previous to the innovation of Pd catalyst technology. Besides, there isn't any Pd in sufficient quantity to be sold and the market is effectively dead. Even the COT in Pd futures no longer exists. The prices are more likely posted as a formality than anything else. Speculators have likely left for "greener pastures".

-Black Bladeb

Any idea what DLA is getting for their reserves?

Thanks.

Source: BridgeNewsTHE EASTERN FRONT:

Asia Precious Metals Review: Gold extends rise on short-covering
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Sept. 1--Spot gold extended overnight gains to Asia on Friday due to short-covering amid a lack of selling interest, dealers said. Spot gold is expected to break the nearby resistance of U.S. $280 later Friday or early next week, but it would be hard to test the next resistance of $285, as selling from central banks and producers could emerge, they said. The Asian trading concentrated on gold, while trading of other precious metals remained sluggish.

Black Blade: Cool!

THE WESTERN FRONT:

Technical Update: Gold and silver mining stocks firming

New York--Aug. 31--With gold being a drag on the Bridge/Commodity Research Bureau price index's rally, there are signs emerging in the stock market that suggest that the end of its bear market may be near. The XAU gold and silver
stocks index has been stable for the past month and showed some encouraging technicals as silver rallied. Stocks can perk up before their related commodities so it may be time to give both a closer look. (Story .20415)

Black Blade: Cool Again! The question is whether we go into the long weekend on a higher note, or do the shorts hammer the PMs.

Meanwhile, S&P Futures are up +7.00, Fair Value +24.18, indicating a very strong to extremely strong NY open at these levels. Oil is off $0.12 at $32.02/bbl, and NG is off its all-time high at $4.765 Mbtu. Au is off 90 cents at $276.00, Ag is unchanged at $4.94, Pt up +$5.00 at $590.00 ($590.00 London AM), and Pt up +$5.00 at $718.00 ($724.00 London).

No numbers have been given, nor has the buyer been identified for the first 100,000 ounces. I don't know if there is a schedule in place or if only certain buyers are allowed. It could go direct to the market via the COMEX or between the auto-manufacturers. However, once sold, the situation of depleted Pd supplies remains. The western suppliers of course produce greater amounts of Pt, and therefore it is likely that Pt and Rh will be under greater pressure going forward, though not as efficent as Pd. We will have to await auction results provided the DLA folks are willing to make them known.

Stocks Rising and Gold under a bit of PressureRally in store for shares
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 9:07 AM ET Sep 1, 2000

NEW YORK (CBS.MW) - A friendly August jobs report will give buyers reason to cheer at the open Friday as it reinforces their view that the Fed can stay sidelined, perhaps for the remainder of the year. September S&P 500 futures tacked on 12.60 points, or 0.9 percent, and were trading roughly 12.50 points above fair value, according to figures provided by HL Camp & Co. Nasdaq futures, meanwhile, climbed 83.00 points, or 2.0 percent, extending earlier gains. Non-farm payrolls fell by 105,000, catching Wall Street off guard with the large drop. But market watchers need to sift through the August numbers more carefully, as they were skewed by the Verizon strike and government layoffs of temporary census workers. Excluding the impact of the strike and the government layoffs, 102,000 non-farm jobs were created. Within the report, the unemployment rate rose to 4.1 percent compared to the 4 percent rate in the previous month. Average hourly earnings rose by 0.3 percent, less compared to expectations. The Federal Reserve's main concern throughout the tightening cycle has been the taut labor market, which it fears will eventually fuel wage inflation. Thus far, however, productivity growth has continued to outstrip wage inflation. View Economic Preview, economic calendar and forecasts and historical economic data. Investors will keep their eye on the retail sector following Thursday's fallout on the heels of some earnings warnings and less-than-stellar same store sale results Separately, Trim Tabs said all equity funds saw inflows of $5.6 billion during the week ended Aug. 30 - the same amount witnessed in the previous week. Equity funds investing chiefly in U.S. stocks had inflows of $5.4 billion compared with inflows of $5.6 billion in the previous week. In the bond market, Treasurys gained ground, erasing earlier losses, as the tame employment report brought out the bulls. On Thursday, the long end enjoyed a stellar rally. The 10-year Treasury note added 9/32 to yield ($TNX: news, msgs) 5.69 percent and the 30-year bond added 3/32 to yield ($TYX: news, msgs) 5.66 percent. The market will also get a look at the August National Association of Purchasing Management index Friday, which is expected to come in at 51.8 percent, according to a survey of economists conducted by CBS MarketWatch.com. On Thursday, the Chicago Purchasing Managers index slid to 46.5 percent in August from the previous month's reading of 52 percent. A reading below 50 percent indicates a contracting manufacturing sector. Over in the currency market, dollar/yen (C_JPY: news, msgs) lost 0.2 percent to 106.49 while euro/dollar (C_EUR: news, msgs) slipped 0.7 percent to 0.8884.

dollar down(-1.19); Euro up (1.20)

Hello Ari,
Great news about AIII- if I recall he did indicate his absence (from the forum) in his last post but it has been rather a long time.
The esteem you hold Aragorn in is very impressive and if minds such as yours (and his) are about rectifying the imbalences inherent in the current system then I can rest easily.
So too your mutual admiration for the thoughts of Another. (shared here)
One can only hope time finds HIM also able to return to this fold.
One question if I may Ari,
What is your take on ORO's position that a Freegold system is doomed to failure given Greshams Law, in which he cited the Roman experience as an historical example?
When time permits svp good Sir.

http://www.usagold.com/Order_Form.htmlDAILY COMMENTARY

(9/1/00) www.USAGOLD.com . . . Gold was down
slightly on light Asian selling and lack of
short covering follow-through in Asia and Europe
overnight. There is little in the way of fresh
gold news this morning though we note with
interest some traders predicting a resumption of
the short covering that along with strong Asian
physical demand pushed gold up $4 yesterday.
Today's COMEX session will be cut short ramping
up to the long Labor Day weekend.

Oil is ignoring the prospect of increased
Saudi production with one London trader
remarking that "traders do not generally believe
that a half million barrel per day [increase]
will be sufficient." Also, Goldman Sachs
commented that crude inventories relative to
demand were at their lowest level since the
1970s. The net result is crude trading steady
near the $33 mark in the early going.

Soft jobs data was working the Dow higher
this morning but the report was jello-like in
its consistency. One observes that much of the
employment losses were the result of one-time
events -- census workers being sent home and the
Verizon strike. One wonders if the optimism
about the Fed and interest rates will hold among
the more realistic on Wall Street.

The dollar is taking a hit against the major
currencies with the euro and yen leading the
way. The move is questionable though when one
takes into account the European Central Bank's
anemic one-quarter point interest rate increase.
The next few days will tell whether or not there
has been a change in sentiment, or if something
else might be going on -- like co-ordinated
intervention to ameliorate the ECB's weak swing.

We'll see if all of this accrues to gold's
benefit as the day moves along.

Have a nice weekend, fellow goldmeisters, we'll
see you back here on Monday.

If you would like to receive an introductory information packet on gold ownership through USAGOLD/Centennial Precious Metals, please click on the link above.

Source: Gold news, p. 8 (The Gold Institute) AngloGold LTD., the world's largest gold producer, and Mintek, South Africa's national metallurgical research organization, have launched a joint venture to pursue the research and development of gold's industrial uses.

Named Project AuTEK, the purpose of the 50/50 joint venture will be to exploit gold's unique properties for industrial applications and focus on the uses of gold as a catalysts in chemical processes. The company hopes to discover and promote additional uses of gold as a catalysts in air purification, automotive applications and in the chemical industry.

Speaking at the announcement of the project, Dave Hodgson, AngloGold's Executive Officer responsible for technology, said: "The changing emphasis of society towards a cleaner and more user friendly environment has created more opportunities for gold which will be the subject of the collaborative venture's research."

Next year, AngloGold also plans to conduct a conference in South Africa of international researchers and potential commercial users of gold and related applications.

Mike Cortie, Manager of the project's research division at Mintek, said: "The commercial application of the catalytic properties of gold has yet to be proven and tested." He added: "Our immediate next step is to compare the potential gold catalysts to the existing ones and establish their commercial viability. There is technological proof that gold has potential application in certain types of fuel cells that provide environmentally friendly power and in heavy industry chemical synthesis. We have started our research by targeting the use of gold in catalysts designed to remove pollutants such as carbon monoxide from air."

Project officials expect that early applications will help clean air in office buildings, airplanes and other confined areas with heavy concentrations of people.

Black Blade: I see a moral dilemma developing here for radical environmentalists who hate mining. And it's cheaper and more abundant than PGMs!

http://www.SelectSectors.com/gldresit.gif Jim
Select Gold ( FSAGX ) is a good proxy for the Gold stocks.
The Gold overhead resistance chart at:

Shows that a multi year Downtrend in Gold has been concluded,
and that an Uptrend channel is now in place. Further it appears that
we are now at the bottom of this Uptrend channel, poised for a
move to the Upside.

Best Regards
Schippi

The following is a good read that many who visit here will enjoy pondering. It is from a
monthly newsletter printed by Pastor Mike Rattin of the Faith Baptist Church in
Hollis.NH He includes a Biblical passage and a short story by an unknown author.
Whether the story is true or not, I do not know, but if there are any refiners of silver
among us, your input would be useful. I will just let it stand by itself and offer it up for
your comsumption. Enjoy and thanks for reading.

Refiner's Fire
"He will sit as a refiner and purifier of silver; he will purify the Levites and refine them
like gold and silver. Then the Lord will have men who will bring offerings in
righteousness, " Malachi 3:3 (NIV)

Some time ago, a few ladies met in a certain city to read yje scriptures, and make them
the subject of conversation. While reading the third chapter of Malachi they came upon a
remarkable expression in the third verse. "And He will sit as a refiner and purifier of
silver."

One ladies opinion was that it was intended to convey the view of the sanctifying
influence of the grace of God. Then she proposed to visit a silversmith and report to them
what he said on the subject. She went accordingly and without telling the object of her
errand, begged to know the process of refining silver, which he fully described to her.
"But Sir" she said" do you sit while the work of refining is going on?"
"Oh, yes Madam," replied the silversmith. "I must sit with my eye steadily fixed on the
furnace for if the time necessary for refining be exceeded in the slightest degree, the
silver will be injured."
The lady at once saw the beauty, and comfort too, of the expression, "He will sit as a
refiner and purifier of silver.:

God sees the need to put his children into the furnace of trials; His eye is steadily intent
on the work of purifying, and His wisdom and love are both engaged in the best manner
for them. Their trials do not come at random; "the very hairs of your head are
numbered."
As the lady was leaving the shop, the silversmith called her back and said he still had
more to mention, that he knows the process od purifying is complete when he can see his
own image reflected in the silver. -Author unknown

A while back someone here, possibly ET
mentioned that he believed in good and bad ideas, not necessarily good and bad people.
And this concept caught my eye, when I saw it. I was a bit puzzled that this concept could
be held when we witness in our daily news, the stories of genocide, rapes, child abuse
good and bad economic policies etc. Surely, I thought this person is another intellect who
only lives in the realm of his head. A genuinely fine person he may very well be.
He probably does all kinds of fine things for family friends and country, but can he really
believe that there are no good or bad people? So for a week or so now I have pondered
his statement and wondered if perhaps my idea of things was incorrect. I have in fact
come to see that this person is partially right, and that I am partially right. Giving my
friend here the first shot, I say that he is correct that whether it be an economic idea, or a
murderous idea, the idea itself is indeed good or bad. But my departure is this, people
themselves will always posses free choice and and more importantly will. A will for this
good idea or bad idea. It is very important to recognize that a human being is the
conveyor of the good or bad idea. If for instance a flower contains a gene that makes its
petals red, is that flower not red? Then by the same token if a man harbors a bad idea, is
he not know by that same idea? Be it good or bad? And whether he just wishes it or
carries it out?

It is very important to not isolate an idea from a person who carries it out, whether it be
Bill Clinton, Alan Greenspan, Ronald Reagan or Adolph Hitler. To say that the idea held
to in the heart and mind can be separated from the person is incorrect. And is indeed
nothing more than an intellectual gymnastic.

Arutz Sheva News Service

Friday, Sept. 1, 2000 / Rosh Chodesh Elul, 5760
------------------------------------------------

U.S. ALERT CONFUSES ISRAEL
Jerusalem government sources are having trouble understanding why exactly United States forces in Germany have suddenly gone on anti-Scud alert. Prime Minister Barak said that Israel is keeping an eye on the
situation in Iraq, and that as far as is known, there is no need to send Patriot missiles to Israel. The Washington Post reported today, in the name of Pentagon sources, that Iraq is liable to attack a nation "friendly with the U.S." one month from now. Other sources in the American capital
feel that the entire issue is an election-campaign gimmick, as the Republicans have accused the ruling Democrats of being "soft" on Iraq.

Al, thank you for your beautiful messages! I agree with you that we're given free will to make choices, and our choices define our characters. Thankfully, regardless of the bad choices we've made in the past (and who hasn't made TONS of them?), we can always start afresh.

http://www.crbindex.com/curquote/crbquote.mhtmlBridge/CRB Current Quotes
Other Futures Markets

Bridge/CRB Index


Page snapshot Fri 01 Sep 2000 14:01 ET
Description Last Change Percent Change
Bridge CRB Index 228.46 +1.05 +0.46 %
Bridge CRB Futures Price Index 226.25 +0.65 +0.29 %
--------------------------------------------------------

228.46 and rising.

http://www.mises.org/humanaction/chap9sec2.aspHey Al - thanks for the thoughtful response. Please do not consider me an intellectual, idealist or any such type. I'm simply a guy that was shown the path of free markets nearly 35 years ago. It has given me much time to study the many authors that have written of economics and politics. Interestingly enough, the first book which started me down this road was Ayn Rand's "Fountainhead". I next read "Atlas Shrugged" and "We The Living". I see one of our newest members here is reading about John Galt. Also please do not equate my belief in free markets to the recent statist protection programs like NAFTA and GATT. Although they trumpet themselves to be in the interest of free trade, they are merely protection schemes for the status quo.

When I said I was much more concerned about bad ideas than bad people it is in regards to economic organization. Sure there are bad people out there but a bad idea can have a much greater impact on society than a few bad people. Now put together bad people with bad ideas and you end up with world wars.

Above is a chapter from Mises' "Human Action", which I hope you will get a chance to read. He explains the importance of ideas in our society. Below are a couple of paragraphs from this chapter which focus on our discussion at hand. Thanks again for the reply and I hope you come to understand that we are not as far apart as it may seem.

"In the field of society's economic organization there are the liberals advocating private ownership of the means of production,
the socialists advocating public ownership of the means of production, and the interventionists advocating a third system which,
they contend, is as far from socialism as it is from capitalism. In the clash of these parties there is again much talk about basic
philosophical issues. People speak of true liberty, equality, social justice, the rights of the individual, community, solidarity, and
humanitarianism. But each party is intent upon proving by ratiocination and by referring to historical experience that only the
system it recommends will make the citizens prosperous and satisfied. They tell the people that realization of their program will
raise the standard of living to a higher level than realization of any other party's program. They insist upon the expediency of their
plans and upon their utility. It is obvious that they do not differ from one another with regard to ends but only as to means. They
all pretend to aim at the highest material welfare for the majority of citizens.

"The nationalists stress the point that there is an irreconcilable conflict between the interests of various nations, but that, on the
other hand, the rightly understood interests of all the citizens within the nation are harmonious. A nation can prosper only at the
expense of other nations; the individual citizen can fare well only if his nation flourishes. The liberals have a different opinion. They
believe that the interests of various nations harmonize no less than those of the various groups, classes, and strata of individuals
within a nation. They believe that peaceful international cooperation is a more appropriate means than conflict for the attainment
of the end which they and the nationalists are both aiming at: their own nation's welfare. They do not, as the nationalists charge,
advocate peace and free trade in order to betray their own nation's interests to those of foreigners. On the contrary, they
consider peace and free trade the best means to make their own nation wealthy. What separates the free traders from the
nationalists are not ends, but the means recommended for attainment of the ends common to both."

From another gold site,

" I just recieved my quarterly report this morning from Franco Nevada. I note that they have no debt, shareholder equity is 1.4 billion, and they have 713 million in cash.
What if they were to sell gold bonds and purchase gold with the cash recieved. One billion worth of gold bonds would purchase 100 tonnes of physical. If they market this successfully they could remove a lot of physical from the market. They would be doing the complete opposite of Barrick Gold, supporting the price of gold instead of trashing it.
Anyways I phoned FN inv. rel. and posed this investment plan to them and asked what they thought aboutit. Their reply was that they hadn't thought about it but that it was a interesting idea."
-----------------------------------------------------------

Any thoughts on this?

T.I.A.

Credit to PM Trader (Gold-Eagle).

Anyone feeling concerned about numbers, shorts or CB sales should read this; mathematics in it's simplest form, astute
observation.
----------------------------------------------------------
"Demand does NOT have to increase in order for the gold price to spike. So what if the CB's are selling 2 to 2 1/2 tonnes of gold per trading day. The deficit is (4000-1500)/250=6 tonnes per trading day. Where is the other 3 1/2 to 4 tonnes coming from. I'll tell you where it HAS come from ... Uruguay, Kuwait, Chili, ...

One might argue that this DEFICIT will be met by increased leasing. I say no. I say the CB's are very concerned about their 10,000 tonne exposure right now. Why? The Washington Agreement was instated because the gold price was getting so low as to further choke off production. This cannot be allowed if they are to have any hope of getting their gold back.

The DEFICIT is not linear at the rate of 6 tonnes per day. In fact, we are entering an annual period where demand is heightened. Thus, one could reasonably argue that the DEFICIT averaged 5 3/4 tonnes per day for the first three quarters of the year, and that the remainder of the year the DEFICIT may average 6 3/4 tonnes. These people have been struggling all year to deal with the DEFICIT implied by a weaker demand period. How are they going to deal w/ an increased DEFICIT as a result of a heightened demand period.

Why do you think the WGC did a study to see what the people thought about the relationship of CB gold "reserves" and strength of currency. The supposition was that they really did not care. The result said the EXACT OPPOSITE. These shorts are trying everything they can to postpone the inevitable. Gold will rise as a result of their inability to feed the BEAST. Investment demand will increase as a result of increased price (not the reverse).

The dollar need not fall, the euro need not rise, the A$ need not rise, the J$ need not rise, the DOW and NAZDAQ need not fall, inflation need not come, deflation need not come, a new Asian crisis is not needed, posters on this board need not be negative or positive, the price of beans in Zimbabwe currency need not stablilize; Gold is set to rise because they can no longer feed the BEAST.

The only way that one could reasonably argue against the prior conclusion is to admit a priori that gold is currently at free and fair market value. This I think we all can agree is ludicrous.

PM "

Do you think today's sharp rise in the Euro against the Dollar is a result of ECB intervention or is it just market perception that interest rates are rising in Europe and staying flat until the U.S. presidential election?

....at 13.44 G-E

G-E 13.36 Taken from an AP wire story.

I have been a looong time reader and fan. Based on yours and others insight, I am confident about upcoming moves in gold. I appreciate so much the opportunity of 'once in a lifetime' that is present 'in our lifetime.' I would like to say thanks by treating you to a Mexican dinner in or near Aiken, SC. Your thoughts on 'free gold' have inspired me to provide what I can at this time 'Free Mexican Food'! Ask for Kevin at 803-641-2941 or email kjames@duesouth.net.

Thanks for the HAPPY TRAILS!

Gold rally continues. So the POG corrected $1.20 today, no biggie and with a three day holiday weekend and early market close you can chalk it up to Labor Day. XAU on the other hand was again a stellar performer and showing continued bullish divergence. It corrected 50% of yesterday's upmove and closed like it wants to move higher, closing: 52.84 +0.50 (+0.96%). And that in light of a Friday close with a 3 day weekend and 1.2 POG drop. Very impressive. Gbugs enjoy the weekend in peace. By Tuesday's open it is possible that one of our international hot spots will begin to flare up and GOLD "iz lukin' gud."
Keep the gbug faith.
XAU charts are currently a mixed affair and not flashing a clear go ahead short-term, but that condition can last awhile. However, the long term techs/charts are acting super and looking even better than I had expected. This puppy appears to have legs, at least thus far. I would expect either some early weakness on Tuesday or another explosive up move. If weakness presents itself, it should be temporary and another opportunity to buy low.
That expected opening gap, which I mentioned Wedsnesday before the close, for Thursday's open materialized. You gotta love it when a plan comes together. However, the question is whether or not it is a break-away gap. Odds favor that it is....and that means higher prices ahead. We will know more next week.
Again, everyone enjoy the holiday weekend. GO GOLD...GO XAU!
tTt

Does it ever seem perverse to you that when the unemployment rate goes up, i.e. people who want to work lose jobs, that that's considered "good for the economy" and the stock-market goes up?

QUESTION OF THE DAY: Why wouldn't this perverse aberration happen if we were on a TRUE (convertible) gold standard?

Regards,
Journeyman

P.S. This one is a bit of a sleeper -- there's a bit more to it than meets the eye.

I think you stumped the entire Forum with your question! Nobody has posted for hours! Why don't you give us a hint?

As you know Marke T., I've been a bit of a sceptic on the euro lately -, mostly due to political intervention and expressed my thoughts towards my feelings. As I still feel the 1/4% rate hike is too little and too late, something else of much greater consequence may have happened recently.
Let me explain. I'm sure you've heard about the preeminent German newspaper articles in the FAZ (Frankfurter
Allgemeine Zeitung)about manipulated gold and other markets, which some of my international friends feel that the "Bundesbank" has stealthily launched and meant to shoot a volley across the bows of some BB's. In particular the Deutsche Bank (incl. BT) and maybe even the US-Treasury - stating that the euro zone is now totally "fed" up (pun intended)with the $ playing games with the rest of the world.
I'm not sure if gamely Mr. Summers will be up to playing the game in the same league as R. -gamey Rubin would have coped. Some-things are definitely changing - and as I'm aware I only indirectly answered your question - and while we're talking the perception of the future is changing more rapidly than ever - conclusion: sell some more of your inflated paper for real value. Best cb2

PS: MK - Thank you for kind offer - I'm proud being a first!

Haven't talked for a while. Hope all's well with you and family - guess you too smell the changing tide, though didn't feel called to answer your quest.

To say it with Bill Murphy, we'll win the day - soon -
Thanks for being here - we all love you - take care and have a great long weekend (forget labour - for once) - enjoy - your's fondly -cb2

Thank you for your extremely sweet message!! I've been here almost every day just lurking mostly. I've noticed your posts on LeMetropole Chat. Yes, I too am sensing the winds of change, and I've loaded up my little boat.

Had the opportunity to speak with MK the other day on a non-Forum related matter. He's so nice! He's the host of our nonstop party, and what a generous and genteel one he is.

ROR on Kitco is agitating for a D.C. Kitcofest. I wrote and suggested to him that he put out a call for a tri-site gold fest. Would anyone here be interested?

A glorious early Spring morning here in the Land of Oz. From my vantage point atop Casa del Topaz, the Olympic City away to the East is abuzz with pre-games preparations- streets being re-marked, lawns mowed and pavements swept. "Welcome World" signage of all descriptions being nailed, dragged, hung and posted in every vantage point that MAY happen to secure a nanosecond of fame via the world-wide media coverage. "The Games of the new Millenium"- proudly bought to you by--- {here insert any one of the miriad, mostly Americo-centric multinational conglomerate juggernauts that have "attached" themselves like grotesque blood-sucking paracites to this once noble but alas now pitiful Organization}.
As the coming weeks unfold, the good people of Sydney will be pushed, shoved, re-directed and abused-all in the name of the "Olympic Spirit" and as Sydneysiders, will take all these knocks in their stride and graciously come back for more.
Yes, these Olympics are guaranteed to provide a "bitter-sweet" experience. Athletes, Spectators, and the hundreds involved in the organization of same will roll with the punches and bend to the point of breaking to hopefully come out the other end still smiling.
From this involved Sydneysider may I extend a warm welcome to all Gold-bugs - either physically or virtually - to the Games of the XXVII Olympiad�����..(This space for rent)���.

http://home.columbus.rr.com/rossl/gold.htm
Last 2 weeks the big move is the � / �

Hmm, a hint - - - hmm. Well, it has to do with anticipating -- and betting on -- something that can happen with fiat money that can't be anticipated with gold - - - because it couldn't be easily controlled with a gold standard.

Regards,
Journeyman

I understand the DLA's auction process is rather one-sided. One must be approved to bid, one bids vis-vis the London fix, and the highest bidder does not necessarily get the product. Apparently the government decides whether or not to sell after they see all the bids. And if you win, you have to pick up at some military base in New Jersey. This info comes to me second-hand and I have no way of really verifying it, though it sounds credible knowing what I do about government.

I never meant to infer that industrial consumers of palladium would bid for palladium on ebay. I simply posted the info to make a point about off-market prices following the frozen NYMEX price. Currently, I'm doing historical research into gold and have yet to find any evidence of a black market in AU following the Gold Reserve Act in 1934. There was a secondary industrial market, but the pricing structure there did not seem to vary from the official price of $35.

I have always considered this phenomenon strange also. But I have never delved any deeper into an explanation than to make the assumption that it occured because increasing unemployment has been used as the rationale for the Fed to lower interest rates. But, your question has stopped me in my mental tracks. By asking why this would not happen if we were on a GOLD backed system, you lead me down a very interesting path. So, here we go....
If the money supply were not manipulated to try and achieve various political outcomes, (and I think we must
find that the manipulations are political, because social engineering is political by definition), then the cycles of lending and subsequent confiscation through default would be greatly minimized. A GOLD backed currency limits credit creation. The Fed wouldn't have a loan-sharking operation that confiscates wealth. On a GOLD backed standard the working man would not be coerced into borrowing what he surely cannot repay, to obtain what he certainly cannot afford,and trying and achieve a standard of living completely beyond his means. If it were not for rampant credit creation, and the willingness of the masses to gorge themselves on it, everything any normal person would want or need would be so much more affordable. In 1913 We The People appointed a ruling class that has since enslaved us by our own greed. It's a classic case of giving us enough rope to entangle ourselves and then reeling us in. It reminds me of one of the temptations that Christ was faced with when Satan took him up on a high place and showed him the riches of the world. This may not be the answer you had in mind, but I eagerly await your thoughts on the subject. Thank you for startling me into thought.

It wouldn't surprise me if that is how the DLA auctioned it's metals. The government has a history of preferential treatment to various industries and certain companies within different sectors. As far as gold is concerned, my grandfather had held onto quite a bit of gold coin even after FDR stole much from other US citizens. I am happy to say that I happened to "inherit" several various Liberties and St. Gaudens, and a few Indians. I remember him saying that "If the gubbermint didn't like it, too bad." and that "there's always Mexico and canada." During the depression they got by since they had a farm/ranch and took odd jobs, but the gold was for "just in case." I imagine that if it became necessary, the gold would have been good as barter with just about anyone. It seems that a lot of people didn't pay any attention to the gubbermint back then. There was at least a limited "black market" for "raw" gold among those who were able mine it and use it as barter, but since FRNs were accepted as an exchange medium it is reasonable that a flourishing wide-ranging black market didn't develop. Interesting is that just most people ignored taxes as well. Times sure have changed. Now it is hard to ignore the gubbermint as they have proven that they are perfectly willing to murder people at the drop of a hat. Also, if one really wants physical Pd, then there are 10 oz. Engelhard bars that can be purchased. Maybe MK and the USAGOLD have access to that market.

Regarding your Question Of The Day: Could it have something to do with the fact that a nation's gold supply can not be increased as fast as it's fiat supply?

First in Aussie by law one needed a permit to protest , then it was you cannot own a gun ( Fear a Government that fears your gun) and now re: the Olympics , in the local newspaper a story reads " I find it difficult to believe that the Government is trying to introduce legislation that would enable the Australian Defence Force to not only arrest civilians without informing them of the reason but to shoot to kill civilians in public protests.
Self Explanatory huh . Off the subject abit, but whose going for Gold in this game ?. I bite my tongue !View Yesterday's Discussion.

http://www.intercontinentalexchange.com/This new intercontinentalexchange,is it another shot against Gold and physical holders?Founders are the usual suspects in the Gold manipulation game.What do you think?

Source: Gold News (Gold Institute) July/August 2000
Early Inscriptions Were Guarantees

Scientists at the British Museum in London have come up with a novel explanation for inscriptions on the world's earliest known coins, which were minted in Lydia, Turkey, more than 2,600 years ago. They argue that the stamp on the small coins was like a modern day refiner's �good delivery� mark, a guarantee of their gold or silver content.

Until about 620 B.C.E., non-barter commercial transactions were made using weighed quantities of scrap gold or silver. However, in the rivers ofd Asia Minor (now Turkey) large amounts of electrum, a very pale yellow natural alloy of gold with 20-50 percent silver, were found, but the gold/silver content varied.

The British Museum researchers, led by metallurgist Paul Craddock, believe that the invention of �coins� with clear stamps on them overcame this problem. Craftsmen simply added extra silver to achieve a consistent balance of 55 percent gold and 45 percent silver. Then they put the guaranteeing stamp, or �chop�, on each small ingot - creating the first coins of a clearly defined value.

A gold refinery was also set up in Sardis, the capital of Lydia, where goldsmiths worked at improving coin quality. They mixed natural electrum dust and salt in a clay pot, then heated the mixture to around 750 degrees Centigrade (1,590 Fahrenheit). Iron minerals from the clay pot reacted with the salt to produce ferric chloride and chlorine gases, which reacted with the silver in the electrum to form gaseous silver chloride. In five days, all the silver could be extracted from five kilos (161 oz.) leaving pure gold.

Craddock told "The Independent" newspaper in London, "It's taken ten years to disentangle the complex story of the origins of coinage. Using modern scanning electron microscopes and X-ray spectrometry equipment, we have been able for the first time to appreciate fully the genius of the metal workers of the ancient world."

By Christopher Pala
SPECIAL TO THE ST. PETERSBURG TIMES
Photo by Bellona Foundation

Some people say a project to convert nuclear-powered submarines into cargo carriers is crazy, others believe it is feasible. In any case, the navy is behind it. And the isolated mining and smelter conglomerate Norilsk Nickel in the north of Siberia hopes what must be the boldest swords-to-plough-shares project in history will allow it to ship thousands of tons of nickel under the ice off the Arctic coast in all weathers. The submarines in question are "boomers," stealthy behemoths carrying long-range ballistic missiles. The boomer is arguably the most lethal weapon ever built, and the biggest of them all - Norilsk Nickel's object of desire - is the one called Akula, or shark, and NATO calls Typhoon.

Designed with unique ice-breaking capabilities, it carries 20 SS-N-20 missiles, each with 10 warheads, for a total of 200 independently targeted nuclear bombs seven times more powerful than the one that hit Hiroshima. It's no wonder that it inspired the best-selling book "The Hunt for Red October." Three Akulas are more or less operational and the other three were headed for destruction under a U.S.-funded, $250-million program to help the impoverished navy pay for the costly dismantling. The Akula caught the eye of the management of Norilsk Nickel, the world's biggest producer of nickel, an essential ingredient of steel. Built in the 1930s with prison labor at the cost of thousands of lives, the sprawling Norilsk "kombinat" is one of the nation's most profitable enterprises, with 1999 sales of $2.944 billion and profits of $1.278 billion. Its 103,000 employees produce 22 percent of the world's nickel, along with 60 percent of its palladium and 40 percent of its platinum, plus copper and cobalt.

But getting these valuable metals - nickel topped $10,000 a ton last year - to their markets is no easy task. The ore is loaded onto ships in Dudinka, a bleak port on the vast Yenisei River, for the 560 kilometers north to the Kara Sea, where they turn west for the 1,760-kilometer voyage to Murmansk, the nation's main ice-free Arctic port. River and sea are covered with thick ice for nine months of the year, so the cargo ships must follow one of the nation's nuclear-powered icebreakers for most of the trip.

There are now six icebreakers in operation; all are owned by the state but operated by Murmansk Sea Line, a subsidiary of the nation's No.1 oil firm LUKoil. The fleet is overextended and under-maintained and one icebreaker is due to be retired in a few years, said Norilsk Nickel spokesman Anatoly Komrakov. Norilsk Nickel managers worry that at that time, LUKoil may give preference to oil over metal in its allocation of icebreaker time, especially since LUKoil is developing its Arctic fields and rapidly expanding its fleet of tankers. And building a new nuclear icebreaker would cost at least $150 million. So last year, Komrakov said, the company commissioned St. Petersburg's Rubin Design Bureau, designer of the Akula, to study the feasibility of turning Akulas, minus missile-and torpedo-launchers, into cargo ships.

In the meantime, Norilsk Nickel general director Alexander Khloponin headed for the Sevmash shipyard in Severodvinsk, near Arkhangelsk, where the Akulas were built in the 1980s and where the first one was being dismantled. He had no trouble convincing the navy brass to delay the cutting up of the next one scheduled for the blowtorch while the study was underway: They love his plan, just as they hate losing the gem of their strategic submarine fleet. Admiral Vladimir Kuroyedov, commander of the navy, recently told a television interviewer that the project "is the best way to use surplus submarines." The designers delivered their verdict in February: For $80 million, an Akula can be made to carry 12,000 tons of cargo safely and reliably. First, it would plow through the surface ice while descending the shallow Yenisei River. Then it would slide below the ice and, at a speed of 25 knots, three times faster than an icebreaker-led convoy, head for Murmansk, where its load would be transhipped to surface vessels. The entire operation would take place in or near Russian waters. With three all-weather Akulas plying the Dudinka-Murmansk route, Norilsk Nickel wouldn't need to depend on LUKoil's icebreakers any more. Norilsk Nickel chairman Yury Kotlyar has been downright enthusiastic.

"I think this project is absolutely realistic," he told a wire service last February. "I am certain we will have our first sea trials next year." Meanwhile, a second study is being done to evaluate more precisely the cost of modifying the company's docks and of operating the subs. Norilsk Nickel's Komrakov said results are due in January. He said his company favors creating a joint venture with the navy. The submarine crews will work as civilians - and presumably be paid more than the paltry $50 a month they now receive. But others are not so sure the project is viable. "It's a crazy idea - it's far too dangerous," said researcher Thomas Nilsen of Norway's Bellona Foundation, which monitors environmental threats posed by the Northern Fleet. "Navigating the Kara Sea is very tricky because it's so shallow." U.S. submarine expert and author Norman Polmar differs. "It's a great idea: these are marvelous ships that include tremendous feats of engineering," he said. "I know the designers at Rubin [Design Bureau] well, and if they say that it can be done, I believe them." "But I doubt it would be economical," he added, "because these things are horribly expensive to run."

"It's economically unrealistic," agreed analyst Mikhail Seleznyov of Moscow's United Financial Group. "They should use their healthy cash flow to build icebreakers." Still, suggests defense analyst Robert Norris of the Natural Resources Defense Council in Washington, D.C., "We should support commercial conversion." Ambassador Thomas Graham, former head of the Arms Control Agency who lives in Washington, said U.S.-Russian treaties involve only the destruction of launchers. "The owning nation can dispose of the ship as it wishes," so U.S. agreement would not be required.

Black Blade: Oh yeah, I like the "more or less operational" part in light of the stellar record of Soviet Sub safety and recent events. Doesn't sound feasible as all modern subs are prohibitively expensive. The cost is even greater as recovery costs from sunken subs just adds to the costs. Of course they have to have product to deliver which as far as PGMs is concerned is in doubt.

Source: Oil and Gas Journal
Soaring oil prices may have come too late to avert both a collapse in oil supply growth from countries outside
the Organization of Petroleum Exporting Countries and a new rig market famine next year, according to Petrodata
Research, the forecasting arm of industry data analysts OneOffshore Inc. Though oil companies have been flush with cash for the last year, this new money is being spent not on drilling wells but rather on "defending their balance
sheets, buying back shares, and competing with high growth technology stocks," said Petrodata analyst Maarten van Mourik. The current state of the market and "underlying pressures" are signaling a repeat of the 1995-98 cycle, in Van Mourik's opinion, which ended in the oil price crash and pan-industry recession. As well as its negative influence on oil supply, the spending drop over the last 2 years is also hitting the deepwater rig markets, states Van Mourik. He believes new oil company plans for fast-tracking new frontier field developments will likely be "too optimistic" in the light of an imminent rig market squeeze. "Poor day rates have made contractors wary of committing to further building of new rigs," he said. "As a result, we predict that the available fleet will be insufficient again shortly to cope with increasing demand and develop the potential of all those deepwater fields."

Black Blade: The low number of rigs is only a part of this equation. The lack refining capacity makes it a moot point! No new refineries have been built in the US since the 1970's mostly due to EPA and other various gubbermint regulations. A very severe energy crunch is just over the horizon.

KYOTO TREATY IS DEAD AS NATIONS BAIL OUT:

The Australian government has agreed to exclude LNG from the nation's overall greenhouse gas reduction measures. It also has postponed plans to create a domestic greenhouse gas emissions-trading regime until similar trading schemes are introduced elsewhere. The decision has been welcomed by the Australian petroleum industry.

Black Blade: This treaty is as good as dead. When the energy crunch is in full force, shivering masses in their unlit caves (homes) will demand suspension of regulations and treaties in favor of the daily conveniences that they have become accustomed to. Of course, it will be costly, and in spite of what the drones say in the financial media, it will show up in inflation.

Two energy companies that may be worth a look: Dynatec (DY,T) and Keywest Energy (KWE,T).

MOVERMEG

Yesterday Journeyman posed the following to the forum:

"Does it ever seem perverse to you that when the unemployment rate goes up, i.e. people who want to work lose jobs, that that's considered "good for the economy" and the stock-market goes up?"

"QUESTION OF THE DAY: Why wouldn't this perverse aberration happen if we were on a TRUE (convertible) gold standard?"

To which I offer this response:

First, the standard storyline on why this aberration happens. The market participants (probably correctly) percieve that there will be no central bank response to increase interest rates, ensuring that the credit expansion and the consequent stock market bubble can continue unabated.

Now, in the environment of a TRUE gold standard, an increase in unemployment signifies a genuine slowing of the economy, with the attendant reduction in economic activity and business profitability. With the discipline imposed by a TRUE gold standard, the credit cycle must follow through to an adjustment downward to flush out the untennable economic activities undertaken in the preceeding expansion. Any portion of the banking industry that ignores this reality will likely see convertibility in action, in the withdrawal of deposits as it increasingly is percieved as a risk of failure.

Source: Gold News, p. 6, (gold Institute) July/August 2000
Of Cabbages and King Midas
Plants Extract Gold from Soil

Extracting gold from vegetables, phytomining, has been known about for years, but a New Zealand scientists says he can get gold from cabbages in an economically viable manner.

Gold found in topsoil can often make its way into plants through roots. The plants are then processed and tiny amounts of gold can be obtained.

Now, Chris Anderson of Massey University, who has been working on the project for years, says that growing cabbages over rock debris, known as tailings, from old mines, can be done commercially. He estimates that extracting more than a kilogram (2.2 pounds) of plants by using a chemical that he stumbled upon in the laboratory during his experiments. The chemical is placed on the tailings and makes the gold soluble for around 10 days. The dried plants are burned and the gold remains.

Researchers from the Institute of Natural Resources previously tested Anderson's earlier plant mining techniques in which he used ammonium thicynanate to help make gold more soluble. At that time, the process was not economically viable because of the cost of the chemicals. The new process, Anderson says, uses smaller amounts of chemicals and fewer chemicals and could be worthwhile even at current gold prices.

During the past few years, scientists have used plants to absorb many substances from the earth including heavy metal pollutants such as mercury. University of Georgia scientists found that a genetically engineered Yellow Poplar not only absorbed mercury but seemed to thrive on it. The trees converted the mercury to a less toxic form sending it out through their leaves to the atmosphere.

Black Blade: Maybe the kids are right. Don't eat your vegetables � mine them. There used to be a company called Biomine that used vegetation clippings and for analysis and exploration for mining.

Shermag: Another interesting point is this: Why is slowing down the economy and therefore the rate of growth and compressing profit margins considered good for the economy? Certainly is difficult to understand this "New Economy"

MO VER MEG: Thanks, I'll look into them.

Source: Gold News p.5 (Gold Institute) July/August 2000
Researchers at Monash University in Australia say they have found a way to eliminate the use of cyanide in gold leaching processes by overcoming problems associated with using chloride solutions, an alternative method.

Cyanide leaching is the most popular method overall in the gold extraction process but it is controversial because of cyanide's perceived potential for harming the environment,

Until now, miners who wanted to use the activated carbon and chloride solution process to convert gold ions to gold metal had to destroy the carbon to recover the gold. This destruction of carbon is expensive. Monash scientists say they have found two forms of activated carbon that do not destroy the gold chloride ion and can be stripped without destroying the carbon.

John Cashion of the Department of Physics says that the work continues on the discovery and that a pilot plant in Kalgoorlie will open in several months. It will be managed by Perth-based Rand Mining NL.


Black Blade: What we in the industry have commonly called the "Bleach Leach" process. An interesting possibility, as there are many so-called "environmentalists" who oppose the use of cyanide. Cyanide gold extraction is now banned in Montana, yet this process could be used in its place. The wacko "environmentalists" would have to dream up another line of opposition to mining.

Currently NY Crude is at $33.40/bbl up +$0.26, and NG is at $4.835 Mbtu near all-time highs up +0.053. Could get very interesting this coming week. I'm outta here for a while. Going to go fish, swill beer, and plant cabbages ;-)

http://www.csmonitor.com/durable/1997/11/05/intl/intl.1.htmlHere's an old article from 1997. Gold had dropped to a 12 year low; $307.

Interesting comments on Swiss sales (from 1997), CB sales and the supply shortfall being made up from same.

Do we have the stamina? Another 3 year wait?

Time will tell.

or, Strange Means of Measuring ValueJourneyman,

About eight years ago when I began studying financial markets and became a mainstream investor, I too could not understand why when a company announced a layoff of 15K, the stock took off like a rocket. To me, that just didn't make sense. But then, I was new to the game and not wise in the ways of Wall Street.

At first blush, it seems illogical; not rational for a stock to rise precipitously on the backs of labor in this example. Perhaps that is the point? The pure fiat system is not logical nor rational because it cannot sustain itself indefinitely hence, it is fundamentally an unstable means of maintaining monetary order within a society.

That's probably not the answer you are looking for but I am out of time (to really think) once again. Fine question!

PS: I do not think we will ever return to a pure gold standard. This concept of "freegold" is much more logical.

http://www.fortunecity.com/roswell/daniken/443/nelsonrockefellerandfortknoxscandel.htmHere's an article from 1975!!! Fort Knox gold gone?

Has this BS been going on for 25 years?

http://www.etext.org/Politics/Beter.Audio.Letter/dbal02"The Government was taking gold out by twilight in trucks,
and I accused them of it and proved it on them because I had
people who were posted who are friends of mine. They were
telling me in the Treasury that they were not taking the gold
out, but I had friends who told me the hour and the minute when
they'll come out for another load. Oh yes, they've taken a lot
of gold out of there they won't admit. It's terrible."

(Signed) FRANK CHELF

Subscribed and sworn to before me this 7th day of April 1975."

http://peterbeter.miesto.sk/docs/all/dbal01.htm"...gold illegally obtained by the Exchange Stabalization Fund..."
-------------

Oh my!! From 1975!!

http://www.l0pht.com/pub/tezcat/Beter/Beter04.txt"On September 5, 1975, a reporter posed the following question to Dr.
Abdul-Rahman Al-Atteqi, Minister of Finance of Kuwait, at the National
Press Club, quote: "None of the oil-producing states spoke during the
World Bank and IMF meetings. Why not?"

Dr. Al-Atteqi answered, quote:

"Addressing people seems to be of no meaning. If the United Nations or
World Bank meetings had a time to listen exactly as good listeners
should, everyone would speak, but most of the speeches just go into
the air. Nobody hears it--whispering, most of the delegates out of the
room--and then it is a text in a book. If it happens, sometimes
somebody reads it. This is why. And secondly, it is known who runs the
policy of the Monetary System of the world, and we cannot for the time
being compete with them. We are in their hands. So this is a fact. We
have to live with it unless we break through--and we are looking for
that time."
--------------------------------------------------------
".....WE ARE LOOKING FOR THAT TIME......"

From 1975, is it the time??

http://www.l0pht.com/pub/tezcat/Beter/Beter58The Ro ckefeller interests, now under the control of John J. McCloy
and associates, arranged earlier this year for eight billion dollars
($8,000,000,000)--that's eight thousand million dollars--in gold to be
paid to the leader of Iraq, Saddam Hussein. A very special private
underground warehouse in Zurich was used in this transfer of gold.
This gold was an outright bribe. It was to persuade Iraq to attack
Iran. Eight billion dollars, my friends, is a lot of money, but it was
a cheap price for the Rockefeller oil cartel, and for two reasons:

First, the gold which was used to bribe Iraq to start the war was
part of the gold which was stolen from you and me! The bulk of the
gold taken from America's stockpiles was flown to Europe on
multinational corporate jets. So, my friends, that $8-billion in gold
did not cost the oil companies anything except some jet fuel, but it
cost you and me part of our monetary gold, and it has been used to
start a war for which you and I will pay even more.

http://csf.colorado.edu/forums/longwaves/apr00/msg00612.html1997/1998 gold audits at Fort Knox are inconclusive!!

Is the gold there or not?

Also, manipulation theories during the April '00 crash.

Is another classic, I'm sure everyone has read over at G-E. It is a must read for all Goldhearts - best cb2

http://216.46.231.211/credit.htmEvery week, I think he can't possibly top what he's written before -- very often (this one especially) he does.

It's just an amazing keep-on-going bubble, and it's brought out writers to match it (including here at the Forum). I'm just lucky to have found a ringside seat to watch it from, next to some smart and vocal critics.

Now, protecting and maybe enhancing my savings and purchasing power ("making money") from all this knowledge -- that's another matter. Being too far ahead of the crowd doesn't seem to work. So far. Maybe something to be learned from the Wall Street crowd? N-a-a-a-a-h!

Maybe my choice has been just to sleep better at night. I'm turning out to be a lousy timer on so many things. But, everytime I see the initials "PMG" (Precious Metals Group?), I think "Peace of Mind Guaranteed".

Oh well, humanity may repeal 5000 years of historic valuation. Has it within its collective power of choice. But it's a bad, bad bet to make.

Who's game for a Saturday night hike? I'll bring the flashlights, Cavan Man, you bring the marshmallows, someone else, how about some chocolate bars and graham crackers? All we need is Trail Guide! TG, we'll all be waiting under the big USAGOLD sign - you can't miss us!

A gradual monthly decline of the United States' current account deficit.....


Note: Additional points will be awarded for striking fear into any unwary neophytes who may be lurking.

Feel free to add as many sentences as necessary. Let it flow, IT'S SATURDAY NIGHT!

BB:
"Another interesting point is this: Why is slowing down the economy and therefore the rate of growth and compressing profit margins considered good for the economy? Certainly is difficult to understand this "New Economy"".

Shermag:
The thinking of the "new economy" adherents is simply amazing, isn't it. This should go down as one of the great false paradoxes of the mania. As to the logic that produces this belief, as best I can discern, it realy is as simple as: a slowing economy means no imminent interest rate hikes (or possibly eventual easing), and therefore a perpetuation of the expansion.

Throw in generous dollops of liquidity and like Pavlovian dogs, the greater fools rush in.

I was just reading over my latest post when a deeper truth jumped out at me. We HAVE been hiking in the dark all along! If it weren't for Trail Guide, Another, Aristotle and a few others "in the know" to shine their lights and guide us, we'd all be stumbling around and in danger of falling off a cliff! What a debt of gratitude we owe our wise friends!

Trail Guide, we're still waiting under the sign, but it's getting dark and cold. Won't you at least show up for the campfire and s'mores?

JMB's Saturday Night PuzzlerA gradual monthly decline of the United States' current account deficit..... although seemingly more benign than an abrupt drop, can hardly be considered a successful outcome. At the current rate of bleeding approaching $400B annually, a gradual decline could possibly result in a further accumulated deficit increase approaching one trillion dollars. This would be above an beyond the enormous accumulated deficit to date. This would be a further trillion dollars of foreign claims against the assets, present or future, of U.S. citizens. Hardly something to take comfort in.

"A gradual monthly decline of United State's current account deficit...." Is Impossible.

Leigh;
Until Trail Guide arrives, I've brought a radio to play 'Golden Oldies'.

http://www.SelectSectors.com/gldind.gifThe Gold Indicator chart at:

Displays, The XAU, Gold(Cmx), CRB, FSAGX and
the US-Dollar Index, on a percentage basis, so that
different time periods may be compared. The data
currently shows, the CRB accelerating Up, the US$
Index, dropping and an inverted head and shoulders
formation in the XAU. This all points to a move Up
for Gold.

Good going guys! ALL good answers!

Thanks Shermag -- I won't have to answer now. From my viewpoint, you nailed it.

High Regards,
Journeyman

Thanks. High praise indeed from someone who has earned my respect.

http://www.cross-currents.net/charts.htmSharing his latest, for those who've been appreciating his charts this year...

Good Evening, All!

Hope everyone is enjoying the long weekend. It has been (gulp!) over 2 decades since I took college level economics, but something stirred in my memory reading Shermag's explanation of why higher unemployment is viewed as positive by the market.

Rightly or wrongly, low unemployment leads to (in the minds of neo-Keynesians, anyhow) a tight labor market, higher wage demands, and thus: inflationary expectations. "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally dishonest attempt to obscure what is being inflated. As the Austrian economists argue convincingly, rising prices are a symptom of inflation, not the malaise itself. Follow the money (supply)!!

I remember that the economists were in the process of inventing another fake form of inflation while I was in college: oil shock inflation! While there's no argument that higher oil prices can have negative consequences for dependent consumers, THERE IS NO INFLATION WITHOUT AN INCREASE IN THE MONEY SUPPLY!

http://www.sunday-times.co.uk/news/pages/sti/2000/09/03/stifgneur02002.html
Rasmussen must reassure Danes the euro will not mean surrender to the central bank.

Chocolate euros seduce
Denmark

-- The "yes" team is touring
Denmark with chocolate euro coins, covered in gold
foil, while the "no" team has retaliated with its own
bag of chocolate kroner in silver foil. Both taste the
same; the question is whether the Danes will find the
euro more difficult to swallow. -----

Interesting site.

http://www.capitalism.org/home.htmInteresting site.

Black Blade suggests:

"Black Blade: This treaty is as good as dead. When the energy crunch is in full force, shivering masses
in their unlit caves (homes) will demand suspension of regulations and treaties in favor of the daily
conveniences that they have become accustomed to. Of course, it will be costly, and **in spite of what
the drones say in the financial media, it will show up in inflation.**"

QUESTION 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Regards,
Journeyman

P.S. I think these are easier than the last one?

Q 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?....hmmm, the extra money spent on energy would take away from expenditures on hot dogs and what have you, no?
Q 2: What would happen?....ah, that's easy...we'd all live longer :)
My puzzler has me stumped....I'm thinking we just might see a gradual decline in our current account deficit in the not too distant future. Since we need a continous increase in credit to keep the bubble expanding, maybe this hypothetical current account decrease would set off a liquidity crisis which would undermine the foreign bullish sentiment toward our "mighty" dollar (gag me).
I feel very comfortable with my "hot dog" conclusion, but as to this "declining current account" fairytale, well....I don't know. Am I all wet? (Be gentle, it's late) Thanks.

This question is not as easy as it appears on the surface. We are about to tread in untried waters. The old rules of inflation may have to be put aside, as this developing energy crunch is so fundamentally based on supply and demand without any hope of relief without the deployment of other alternative energy sources. So here is my attempt at a convoluted answer.

A true gold standard requires fiscal discipline. This is something that the Keynesians seem to have conveniently forgotten. One cannot print gold just as one cannot tax the populace into prosperity. As inflationary forces make an impact, gold rises in value as well, I think that Marius alludes to this with a reference to rising money supply. However, without the constraints of a gold standard, money (such as it is) can be printed at will. This is on the minds of all petroleum and energy producers. This is not to say that there would be no inflation under a gold standard, yet the intrinsic value of gold should at least theoretically rise in tandem with other commodities including petroleum. Gold should also hold value in a deflationary environment as well. During the inflation of the 1970� and early 1980's gold had outperformed most other investment vehicles. During the depression of 1929 through the 1930's, gold held its value (under the gold standard), and even outperformed in that environment. Since gold was illegal for the peons to own, the next best proxy, Homestake Mining stock not only held up in the deflationary environment, but also rose over 519 percent from October 1929 to December 1935 (a compound rate of 35% per annum). The thing that is most important to remember here is that the problem with rising petroleum costs is that we truly are running out of oil. There are no more real super-giants (Very large oil fields) to be found. The easy pickings are found. There are a few smaller fields to be sure, but these will be more costly to find, explore, define and produce from. This situation is different from the typical inflation that we have come to expect. This is more a fundamental case of supply and demand. The only additional production capacity is in Saudi, and even then there is no more refining capacity. Add to this rising demand from emerging world economies, increased energy needs in the developed world (new economy), restriction of petroleum production, restrictions on politically incorrect energy sources (nuclear, coal, wind, and solar), and the energy needs from those countries who have depleted their own resources. It seems apparent that inflation is inevitable, though I would think that a gold standard could minimize or even mitigate the rising costs much better than current fiscal policy of "money supply". In other words, there just isn't a lot of intrinsic value in printed paper and national debt instruments. This is about as good as I can determine after several servings of my favorite adult beverages.

http://www.KKGOFM.com/playlist&kmozart%20live.htmSince we are in the midst of a slow holiday weekend evening I thought I'd take this moment to post a final (off topic) reminder about my concert tomorrow night at 6 PM (Pacific Time). I hope many of you will be able to catch my performance over the net at the above link. Don't forget to account for your local time zone. Those of you in the LA area can listen on KMZT (FM 105.1). I hope this concert will serve to warm the cockles of the hearts of all the lords and ladies of this esteemed round table. I'll be thinking of you all. Gotta get to bed now. Night all...
View Yesterday's Discussion.

http://www.egroups.com/message/gata/519Latest from Reg Howe, analyzing the
recent stories about GATA and gold
in the Frankfurter Allgemine.

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@eGroups.com

start quote -
Date: Sun, 03 Sep 2000 06:50:51 -0000
Subject: [GATA] European banks may be ready for showdown over gold
...
The danger, of course, is that soaring gold prices could trigger
sharp and mutually reinforcing sell offs in stocks, bonds and the
U.S. dollar.
...
- end quote

Has anybody some (Austrian perhaps, smile) thoughts about gold confiscation in Europe? Yes, I know it would be "Europeans" would trigger the POG rise, but this would result in a dramatic fall of (European) stocks and bonds, and then the politicians will assume they have to do something to save I-don't-know-what and could well follow the example across the Atlantic?

http://www.newsmax.com/commentarchive.shtml?a=2000/9/2/113957Frightening article: what he doesn't say is how the companies described, suvive financially.

When Work Leaves the Workplace

John L. Perry
September 2, 2000

Excerpt >>> They see a swelling gaggle of younger applicants for
employment who show up, dressed more
appropriately for vacation than work, demonstrating
no visible curiosity about the company or what it is
trying to achieve, concerned only about benefits,
hours, vacation days, "personal" days, how often to
expect raises, when promotions are handed out and
whether the company will pay to further their
education.

They are not interested in work; what they want is a
job.

http://www.faz.de/IN/INtemplates/Verlag/default.aspAwhile back I wrote in this Forum of the FAZ "showing the middlefinger" to the establishment-bureaucrats when they announced that they will use from now on the old spelling again (in the german speaking countries there was a widely discussed "Rechtschreibereform","new spelling reform",the people were against it but it was then introduced without asking us).
The leading conservative/liberal(in the european Hayek sense!) is again shooting against the current politically left establishment with the Goldmanipulation articles.Something must have changed!

@Leigh: Socialist and Gold, your concern recently about "collectivation of Gold": maybe the revival of Gold will kick socialists out of office?A political revolution?A rebirth of conservative ideals,family'spending only what you have etc.?

the leading conservative/liberal...NEWSPAPER OF GERMANY

Any word from The Stranger?
Maybe he is still reading ORO's long post!
he he he
:)
Back to bed.
$hifty

http://www.sunday-times.co.uk/news/pages/Sunday-Times/frontpage.html?999London Sunday Times
September 3 2000
BUSINESS NEWS

Prices are set to rise again this winter. By David Smith and David Parsley

Oil skid ahead

JUST 18 months ago the oil sector was bemoaning a low oil price and the doomsayers were predicting that the crude price, then below $10 a barrel, might hit a new all-time low of $6 a barrel.

Oil majors such as Royal Dutch/Shell, BP Amoco and Texaco were demanding cuts in petroleum revenue tax (PRT), the government's main North Sea tax, so they could make a profit on the oil they were producing. The situation, we were led to believe, was dire.

Today the oil price has bounced decisively back above $30 a barrel, despite the efforts of Saudi Arabia and some of the other members of (the Organisation of Petroleum Exporting Countries (Opec), to steer it lower.

The fear, indeed, is that prices could head even higher over the winter months. Oil stocks are low, just as the big consuming countries move into winter. Earlier in the summer petrol shortages in America helped to push crude prices sharply higher as the refiners scrambled for supplies. Now, say analysts, the same thing could happen again because of a supply squeeze in the heating- oil market. And if Europe and America look to be heading into a severe winter, the upward spike for oil prices could be sharp, with some predicting $40 or even $50 a barrel.

"We know that there is plenty of oil in tankers, steaming towards the main markets, and we know that $3 or $4 of the present price reflects pure speculation," says one industry executive. "The question is whether the oil gets there in time to head off further speculative rises in the price."

Part of the problem has been created by the dynamics of the market itself. For the oil majors that hold most of the stocks, the sharp rise in crude prices has made it expensive and unprofitable to do so. They have had an incentive to operate on low stock levels until spot and futures prices for crude move back into line.

Opec, meanwhile, seems no better at controlling the market at a time of sharply rising prices than it was when oil was tumbling in value. Last week Saudi Arabia called for a "suitable" increase in output to be agreed when the cartel meets on September 10. It has pledged a 500,000 barrel a day rise in output to try to calm the market.

Not all Opec members are, however, sympathetic, fearing that increasing production would play into the hands of the West by pushing prices sharply lower. Iraq's recent output has been low.

Whatever the prospects, the economic effects of higher oil prices are already apparent. The European Central Bank, which on Thursday raised the cost of borrowing, has presided over a near-doubling of interest rates in little more than six months, because the combination of dearer oil and a weak euro has pushed inflation above its target ceiling of 2%. Higher rates have also pushed up British inflation, which had threatened to drop below the Bank of England's target "floor" of 1.5%.

Some believe that the economic impact of the latest spike in oil prices, which is now taking on an air of permanence, has further to run.

More than a quarter of a century ago, oil derailed the global economy when Opec quadrupled crude prices. Some economists believe that history could repeat itself.

Andrew Oswald, a Warwick University economics professor, notes that every previous episode of sharply higher oil prices has been followed by recession - in the 1970s, early 1980s and early 1990s. Recent signs of an economic slowdown in America, he believes, could be the signal that a similar oil impact is starting to show through now.

The most visible effect, meanwhile, is at the petrol pumps. Last week Laurent Fabius, the French finance minister, announced cuts in the cost of domestic heating oil and in motoring taxes to offset rising oil prices. The pressure on Gordon Brown to follow suit by cutting petrol duties will intensify in the run-up to his pre-budget report in November.
....

Sir 714,

You're looking in the wrong place for historical data on gold
"smuggling" circa 1933. It's only necessary to know that the
"official" gold price was $32 in 1933 and that it increased
(currently at ~$275) to know that the equivalent of smuggling
gold happened. At the point the establishment admitted there was
an "official" price (the official $40/oz. recently abandoned in
the wierd accounting "revaluation" scam by IMF is one of the corroborating
fossils of that time) and a "market price" and they weren't the
same, the establishment admitted as much, and that they had
completely lost control of it.

Of course, this was an atypical kind of smuggling: Usually
smuggling happens when governments are trying to keep prices of
protected goods high, not low, and they want to keep foreign
competing goods OUT, not domestic goods IN. Attempting to keep
national treasures IN a country when those outside want to buy
them is a similar "reverse smuggling" situation. Thus, you'd
have to look for smuggling of gold OUT of USA.

And since the Federal Reserve/USA Corp. scamsters at that time
had just stolen most of our ancestors' gold, there wasn't much in
the hands of the American _people _for them to smuggle out.
_Foreigners_, however saw the possibilities - - - and took
delivery of that "national treasure" (just stolen from our
ancestors) in ever increasing amounts, and "smuggled OUT" to them
by the Fed Reserve/USA Corp. scamsters. Until Nixon closed the
gold window to foreigners in 1971 - - - and the official vs.
"black [free] market" prices separated, never to meet again.

Regards,
Journeyman

Technical problems prevented me from bringing the marshmallows yesterday eve. I've kept the bag though for our next fireside chat. Have a wonderful day.

www.kitco.comThis is too unbelieveable...

-- repost

Date: Sun Sep 03 2000 06:45
FoolsGold (Goldman Sachs...Going Under?..Ass Up ?...hope so) ID#334200:
Copyright � 2000 FoolsGold/Kitco Inc. All rights reserved
Home Page Sherman H. Skolnick Email: ...1187 more words.

http://www.trumanlibrary.org/oralhist/bernsten.htmInvisible Hand, the odds to me seem low that gold confiscation would occur in Europe, particularly France, one of the largest holders of gold. From the aforementioned link:

"In the course of the discussion, Morgenthau brought up the problem of France's ability to pay for the planes and other war supplies that France was buying. That led to a discussion of France establishing a foreign exchange control because the French people don't readily accommodate themselves to the Government coming along and controlling their financial affairs."

This is a quote from an interview with Bernard Bernstein, an attorney with the US Treasury Department from 1933-1942, and gives us some indication of the common folks' attitude there towards government. Perhaps it has changed in recent times, but there is no history of gold confiscation in Europe, outside of war, when it was forcefully taken by invading forces, as when Hitler confiscated the gold in the Czech National Bank.

*********************************************************

Journeyman, I am puzzled by your attitude.

First you say, "You're looking in the wrong place for historical data on gold "smuggling" circa 1933." I did not know you were aware of where I may be researching for information on the history of gold.

Second, you say, " It's only necessary to know..."
Sir, I am a simple man, a seeker of truth. It is NEVER only necessary to know..."
It is necessary to understand, with an open mind. Always.

Otherwise, thank you for your input. You have given me a line to work on. Currently I am researching legal cases involving miners who sued the government for the right to set their own prices for their product. I will endeavor to extend that effort to uncover any cases that involved the smuggling of gold out of the US.

714 values truth more than gold....

...my previous post should have read "...but I can find no history of gold confiscation in Europe, outside of war..."

Thank you.

"PS: I do not think we will ever return to a pure gold standard.
This concept of "freegold" is much more logical." -Cavan Man
(09/02/00; 09:27:19MT - usagold.com msg#: 35880

You could be right. But Keynes didn't really think we'd ever get
OFF the classical Gold Standard, which had evolved over 20
centuries or so! The question is _should_ we return to a
classical gold standard?

Now a little conceptual legerdemain: When was the "classical
gold standard?" Was it during A. the Federal Reserve/USA Corp.
money cartel beginning about 1913? Or was it B. during the "free
banking" era which predated that bankster inspired and controlled
cartel? During the "free banking" era, there was no official US
Government fiat currency; each bank issued it's own competing
redeemable & convertible gold-backed (mostly) certificates.

The answer is B. And the "free banking" era is remarkably
similar to what Trail Guide suggests as "Free Gold." With one
glaring exception: There was no banking cartel to retain monopoly
paper-money issuing power, and as a result, history shows that
inter-bank competition kept the banks in line _very_ well, and I
might add, predictibly kept them in line much better than did the
Federal Reserve.

Of course, in fairness I must admit that the _real_ goal of the
Federal Reserve Act wasn't to keep the banks in line, at least
not from the custormer's viewpoint. It was quite the opposite --
to allow them to counterfeit "redeemable in gold on demand" paper
certificates without the rather immediate "run-on-the-bank"
consequences caused by customer scrutiny on unsafe banking
practices during the preceeding "free banking" period. The
"Roaring Twenties" and the "Great Depression" were the rather
immediate result. Followed recently by the Mexican meltdown, the
Asian Contagion, and the imminent dollar debacle when
"foreigners" finally decide to send BIG-float back home to us.

So, if you accept my analysis, SHOULD we return to the free-
banking "Classical Gold Standard?"

If not, why not?

Regards,
Journeyman

P.S. If you don't think so, consider the implications of a BOE
target FLOOR for inflation as per the following:

"Higher rates have also pushed up British inflation, which had
threatened to drop below the Bank of England's target '_floor_'
of 1.5%." -London Sunday Times, September 3, 2000, BUSINESS, Oil
Skid Ahead http://www.sunday-times.co.uk/news/pages/Sunday-
Times/frontpage.html?999 [&Thanx to The Invisible Hand (9/3/2000;
5:35:23MT - usagold.com msg#: 35914)]

P.P.S. To the extent people understand they are targeted to be
robbed of a MINIMUM of 1.5% of their fiat holdings per year, I
suggest they will opt, with internet access available to all, for
some version of "freegold" free-banking --- such as available
from e-gold.com --- and without the PLANNED robbery of a minimum
of 1.5% of their holdings inherent in government vapor paper.

Hello Everyone,

Sorry I couldn't make it for our hike yesterday! I was waiting for some input before taking up the walking stick and heading out onto the path. Because this is a big American weekend, most readers will have more time than usual,,,,, and some major things are happening,,, a longer walk is warranted (smile).

Will be posting later and joining the main forum.

Trail Guise

http://www.gold-eagle.com/gold_digest_00/hamilton090400.htmlI have reading and researching for almost 2 years now and have come across this article which, in my opinion explains in great detail and with exacting clarity how and why stock markets are overvalued.

This is a phenominal read, I highly recommend.

Source: ReutersAre Fast-Rising Oil Prices Economy-Killers?
Last updated: 02 Sep 2000 18:05 GMT (Reuters)

By Pierre Belec
NEW YORK (Reuters) - Is it fair to call soaring oil prices economy-killers? Some experts say yes, yet Wall Street has been relaxed about the explosion in oil prices and the prospect that energy may be a expensive item for a long time. Indeed, this year's surge in crude oil prices to a 10-year high has changed the inflation script. Gasoline prices at the pump reached record levels this summer and heating oil and natural gas prices are forecast to go through the roof this winter. With the stock market chugging along nicely, investors seem to be hoping that the economy will be miraculously lucky in avoiding the nasties from oil's spike. Something else has changed. The interest-rate environment is no longer as favorable, now that the Federal Reserve has pushed up the cost of borrowing by 1.75 percentage points to a nine-year high. The central bank's goal is to zap consumer spending, which has powered the economy's expansion to a record 10th year. The concern is that such long-running growth could spark a cycle of inflation. Faced with this new economic landscape, the Nervous Nellies say higher interest rates and oil prices are a bad mix that may slam the economy. "We remain concerned that rising energy prices will spill over into non-energy prices, raising core consumer price inflation and the need for higher interest rates," says Gail Dudack, chief investment strategist for UBS Warburg.

RIGHT OR WRONG? CHECK IT OUT.
"Certainly, higher interest rates, higher energy costs and slower job growth suggest that the economy cannot keep up its previous pace," says Allen Sinai, chief global economist for Primark Decision Economics Inc. "The 175-basis-point increase of short-term interest rates (by the Fed) and $75 billion to $100 billion equivalent tax hike from higher energy prices must slow the economy. But how much so is not clear," he said. Others cited the psychological negative that soaring energy prices will have on the consumer and producer price indexes through year-end. With the PPI and CPI trending higher, the bigger the odds of more interest-rate increases as inflation-fighting Alan Greenspan, the Fed chairman, turns up the noise about the damage that escalating oil prices will have on the economy.

GOODBYE TO ERA OF ULTRA-LOW INFLATION
"You'd never know there was a crisis on Wall Street," says Stephen Leeb, editor of Personal Finance, a financial newsletter. "Like the rest of America, the investment community thinks the high price of energy is just temporary. Prices are not going to come down. In fact, they are going to continue to soar." Oil prices have more than tripled since February 1999, climbing from an unusually depressed $10 to more than $30 a barrel. Heating oil prices galloped to a 10-year high this week and now stand at twice the level of the winter of 1999, at more than $1 a gallon. There's more bad news for heating oil customers. Abnormally low supplies will keep upward pressure on prices. U.S. heating oil stocks are down 39 percent from a year ago and in the Northeast, the world's largest heating oil market, reserves have plunged to 20 million barrels from 45 million in 1999, according to the American Petroleum Institute. In another twist of 'Our gain is your pain' theme, U.S. producers of heating oil are shipping heating oil to Europe because prices are higher on the Continent. Natural gas producers, meanwhile, are asking state regulators for double-digit price increases with natgas already costing more than twice as much as a year ago. The summer wasn't a walk in the park for the automobile-dependent Americans. Gasoline prices climbed to a record high of more than $2 a gallon in some areas of the country. After a two-month slide, gasoline prices are again climbing because of skyrocketing oil prices.

FAIR TO GIVE ENERGY PRICES AN ECONOMY-KILLER STATUS?
"Most economists have too short of a memory -- or they don't have one because they did not live through it -- but the last period of hyper-inflation in 1974 was started by rising energy prices, which crept into all other goods and services," says Ned Riley, chief investment strategist for State Street Global Advisors in Boston. "Back then, most people excused away the inflation pressure because it was energy-related and clearly OPEC was going to break down and crumble and we would not have an inflation problem," he said. "Inflation peaked around 1980 and it showed that it was not a short-lived thing, but rather a quite significant period of protracted rising prices and wages catching up with the cost of buying goods," Riley said. Rising energy prices also caused or aggravated recessions in the 1980s and 1990s. For the last half-decade, cheap oil may have boosted global economic growth by keeping inflation low. But the great times came to an end in the spring of 1998, when the Organization of Petroleum Exporting Countries, known for its lack of discipline, finally got its act together and started cutting back on supplies. The concern now is that the global economy may be seeing the start of a fundamental change in the oil market. If so, energy costs may stay high for a long time, or until OPEC infighting starts again, or a global recession causes the world to gag on excess oil production. Meanwhile, U.S. inflation gauges have been mysteriously tame this summer, despite record gasoline prices. But the impact of fast-rising oil prices may take up to 1-1/2 years to fully snake through the economy. Sinai said Greenspan does not have as much elbow room as in 1999, when inflation was missing from the radar screen. Last year, the core rate of inflation, which excludes the wildly fluctuating food and energy prices, edged up just 1.5 percent -- under the Fed's tolerance of 2.0 percent. This year, the core rate has risen to 2.5 percent. "Any ratcheting-up from here would put the Federal Reserve in a very difficult position in terms of maintaining price level stability, which is the Fed's stated goal," Sinai said. The explosion in energy prices may be more damaging to the economies of other industrialized countries because they pay for oil in U.S. dollars, which is a currency that is strong against the weak euro. Yet some experts say energy prices are not as much of a factor in this 'New Economy' because technology has transformed how business is done. In other words, technology has rendered historical inflation extinct. Others disagree. In 1990, when Iraq invaded Kuwait, oil doubled to more than $40 a barrel and U.S. inflation shot up to more than 6 percent from 4.6 percent in 1989. Ten years later, can the "Great Technology Revolution" have so radically changed the way the economy works that it will be immune to leaping oil prices? That seems to be the hope on Wall Street.

Black Blade: Really lays it on the line. Stephen Leeb made his mark in the oil run-up in the 1970's. He is bullish on petroleum, energy, and PMs. History does repeat itself, no matter what the "New Paradigm" people say. How many times have we heard throughout history that it's different this time? In the late 1800's it was the telegraph and railroads, the early 1900's it was the automobile and utilities, in the 1920's it was radio, in the 1960's it was "tronics" and synergies, in the 1960's to early 1970's it was the "Nifty Fifty", and now it's tech and dot.coms. But history does repeat itself! Every postwar recession was preceded by an increase in oil prices!

No one took the 1973 Arab Oil Embargo seriously until it was too late. Just like Aesop's fable of the " Ant and Grasshopper", those who recognized oportunity did well and prepared for the consequences. The drones who continued on in blissfull ignorance were caught unawares.

- "Those who do not remember are condemned to repeat it" - George Santayana

Source: Science NewsBy R. Monastersky

Cheap oil has helped fuel the economic boom of the 1990s. But petroleum prices will jump drastically in the near future, as the world starts to feel the pinch of tightening hydrocarbon supplies, according to several forecasts.

Some see the shock coming in only a few years, while others put it off for more than 2 decades. Nonetheless, these pessimistic predictions agree that oil production will soon peak and then start sliding downward, even as demand for oil continues to climb.

"For over 150 years, mankind has been used to an ever-growing supply of cheap and abundant energy," says Colin J. Campbell, a former exploration geologist now doing studies for Petroconsultants in Geneva. His analysis calls for production to peak in less than a decade. "The implications of this on industry, world politics, and economics seems to me to be enormous," he said this week at the annual meeting of the Geological Society of America in Toronto.

Campbell and his colleague at Petroconsultants Jean H. Laherr�re reached their conclusion by estimating the remaining underground reserves of so-called conventional petroleum -- oil that is relatively easy to extract. Such oil accounts for 95 percent of the 800 billion barrels of oil that the world has burned thus far, says Campbell.

Going country by country, Campbell and Laherr�re started with published tallies of oil deposits and made adjustments in cases where industry data indicates that nations had inflated their figures. Extrapolating from these numbers and past oil-discovery rates, they estimate that roughly 1 trillion barrels of oil remain in known and undiscovered fields.

Production will peak, they hypothesize, when the quantity of oil already burned equals the amount yet to be extracted. They expect that point to come within a decade but project oil prices to jump even sooner. The economic impact will occur when nations in the Organization of Petroleum Exporting Countries gain control of the market after production begins to drop outside the Middle East.

When worldwide production starts falling, nations could tap into nonconventional sources of oil, such as heavy oil, tar, and hydrocarbons locked in shales. But these will cost more to extract and process, say the researchers.

Numbers only slightly more optimistic appeared in a March report by the International Energy Agency in Paris, which estimates there are 1.5 trillion barrels of conventional oil in reserves. The agency predicted that production would peak before 2015, so by 2020, demand will exceed supply by 17 million barrels a day.

At this week's meeting, John D. Edwards of the University of Colorado at Boulder estimated that 2 trillion barrels of oil exist in known and undiscovered fields. Though he pushes the production peak back to 2020, his result "should urge us now to consider replacement energies."

Some energy analysts, however, dispute such worrisome forecasts. Thomas S. Ahlbrandt of the U.S. Geological Survey in Denver, who leads an ongoing federal effort to estimate global reserves, finds hope in new technologies that allow companies to pursue oil in the deep sea and other areas previously unexamined. "Since 1990, the area available for exploration has doubled in the world."

Advances are also helping companies after they locate oil. Three-dimensional seismic imaging has improved the mapping of fields, and whereas engineers once bored only vertically through Earth's crust, they now can steer their drilling, even horizontally.

In its 1998 International Energy Outlook, the U.S. Energy Information Administration concluded that "technologies continue to evolve that significantly enhance both exploration and production capabilities." It does not forecast production to peak during the time frame of its analysis, which runs to 2020.

Economist Morris Adelman of the Massachusetts Institute of Technology challenges the practice of estimating oil reserves. "Nobody knows how much hydrocarbon exists or what percentage of that will be recoverable," he says.

Judging from the histories of other geologic commodities, Adelman sees reasons to expect an increasing petroleum supply. "The tendency to deplete [a resource] is counteracted by increases in knowledge," he says.

From Science News, Vol. 154, No. 18, October 31, 1998, p. 278.

Black Blade: That time has come! Time to hedge is upon us.

714: "Journeyman, I am puzzled by your attitude. First you say,
'You're looking in the wrong place for historical data on gold
"smuggling" circa 1933.' I did not know you were aware of where I
may be researching for information on the history of gold."

J-man: Ya got me there fair and square, podner. Since smuggling
is generally perceived as bringing goods INTO a jurisdiction
against gubbmint edicts, I ASS-U-ME-d you were looking in that
historical direction, rather than at gold smuggled OUT of US.

714: "Second, you say, 'It's only necessary to know...' Sir, I am
a simple man, a seeker of truth. It is NEVER 'only necessary to
know...' It is necessary to understand, with an open mind.
Always."

J-man: In general, I agree with you -- I always prefer to
understand as many minute details as I am able and have time for
- - - and believe it or not, I also try to keep an open mind --
because perhaps in that stance, my understanding will evolve.

But in communication and chess, often we have to settle for
heuristics -- short-cuts or substitutes to understanding --
because we lack time or band-width for more. I was merely
observing that persistent price differentials for "the same" item
can only persist, especially in the "modern" world only as a
result of gubbmint intereference in trade. There was indeed a
price differential in gold that persisted, and human nature being
what it is, you can be relatively sure _someone_ was exploiting
it.

Perhaps you wish to quibble with my description of the resultant
exchange activity as "smuggling" since it was done by the same
constituted authorities who call it "murder" if you do it but
"national security" if they do. But because such a quibble is
consistent with the common perceptions which excuse governments
for all crimes, I'll accept that quibble as understandable.

714: "Currently I am researching legal cases involving miners who
sued the government for the right to set their own prices for
their product. I will endeavor to extend that effort to uncover
any cases that involved the smuggling of gold out of the US."

J-man: It's clear you're a heavy dude. Look forward to learning
from you!

"714 values truth more than gold...."

Damn good! Me too. I suspect we're allies.

Regards,
Journeyman

Hello Journeyman, you said..."Of course, in fairness I must admit that the real goal of the Federal Reserve Act wasn't to keep the banks in line, at least not from the customer's viewpoint. It was quite the opposite -- to allow them to counterfeit "redeemable in gold on demand" paper certificates without the rather immediate "run-on-the-bank" consequences caused by customer scrutiny on unsafe banking practices during the preceding "free banking" period."

And let's not forget what is perhaps the most significant feature of the Act, "the Bailout", which transfers the cost of failures when they do occur, because of bank runs, bad bank loans, etc. to the American tax payer!


Bonedaddy, your msg#: 35865...what an excellent question. I say, What an excellent answer! If one is to come away with only a single thought, it is surely this: "In 1913 We The People appointed a ruling class that has since enslaved us by our own greed." Can you say..."Hotel California"?


Al Fulchino, as I go along the journey, all too often kicking and screaming, your msg#: 35843 re: the Refiners Fire, causes me to stop and take pause. Thank you, sir.

Natural Gas is Going to be the Real Big Problem!Oil Crisis News from Around the World source: The Coming Global Energy Crisis
�� Aug. 10, 2000 �� SolarQuest� iNet News Service �� (This report by Charles T. Maxwell, Senior Energy Analyst (maxwell@weedenco.com) was posted by Ilan Goldman.)
The low natural gas reinjection numbers we have seen so far this spring in the US tell their own tale. We are not on our way to putting three trillion cubic feet of gas, or anything like it, into storage for use next winter. From a low of one trillion cubic feet (and nearly 50 % of that is facility and line "fill", i.e., is not usable), we would be fortunate now to bring stored supplies up to 2.3 Tcf by early next November, the start of the gas consuming season. Given the presumed retreat of the La Ni--a weather pattern, the strong US economy, and the substantial number of new natural-gas-fueled base-load generating plants using combined-cycle technology coming on stream over the next six months, I have had to revise my estimate for peak gas storage down a bit from the 2.5 Tcf number I was using two months ago.
In practical terms, unless the coming winter approaches the highly-unusual, +13% warmer-than usual season we have just passed through, US gas storage numbers are accumulating in a potentially disastrous pattern of insufficient gas to take this country through the full span of cold weather to April of 2001. There is the possibility that we will be forced to allocate gas supplies to private homes, government departments and public institutions, to defense installations and to schools, universities, hospitals, and so on. To the degree that is necessary, gas will have to be allocated away from manufacturing industry.
Hit hardest, in such a period, would be sectors of the economy that use a high proportion of natural gas in their fuel mix such as cement plants, glass works, heat-treating and metal-shaping plants, heavy chemicals, steel, copper and aluminum makers, and so on. Subsequently, problems of insufficient production of component parts and intermediate materials could quickly spread to car and aircraft manufacturers, commercial construction and machine assembly industries. In short, the use of natural gas is so widespread in our manufacturing system that shortages of it for, say, a two month period from late January of 2001 to late March would wreak havoc on many areas of our economy.
It would surely slow national GDP growth, and heavily penalize the profits of many industrial firms. However, all this is theoretical. It really couldn't turn out this way, could it? Yes, it could. And, unless the trends I see in place now of close to 3% incremental natural gas consumption in the US vs. flat or slightly down natural gas production are reversed for some reason I cannot now perceive, the "disaster scenario" outlined above must be considered the most likely one.
Perhaps the most intriguing part of the emerging outlook for a shortfall in gas supplies is not the fact that the crisis has arrived (after all it has been predicted for years, and, up to now, nothing serious has occurred), but rather the point that we are advancing deeper and deeper into this energy problem and no one, other than a few Wall Street analysts, are making any warning noises about it. The media is quiet.
It is either non-believing or unimpressed by the dimensions of what is visible. Government, at all levels, is complacent. There are no public outcries even from executive figures in gas consuming industries that are heavily dependent on the fuel. We are becalmed in a sea of silence on this issue as we pass into summer. The weather is fair, and the "livin� is easy". And, when winter comes? It's just another season, following summer. Nothing to worry about.
However, a few important people in the system quite plainly see the outlines of what is to come. Their traders are bidding up the price of natural gas dramatically (now 100% higher than the last year's $2.10 per mm btu price at this season) in order to secure supplies for storage now - supplies that may not be available next February when many industries could be facing downtime. These gas buyers are doing their homework. And, it is their lead that investors should be following.
Still, I am ahead of the story in my surprise that the media has not yet picked up on the coming crisis. For over the years (and I have a good many of them), it has been my experience that there is a repetitive cycle to how these "threats" to the system are understood and acted on by different parts of our society.
In the case of the emerging shortage of natural gas, to take the example before us, the first group to identify it was the industry specialists (apart from many natural gas production company managers who had spotted it years in advance), in particular a small group of Wall Street analysts who were doing their weekly storage sums and saw that behind the fa�ade of last winter's warmth was a highly worrisome picture of an industry failing to convert its greater effort to find supplies (some 650 rigs drilling for gas this year vs. some 380 drilling for gas last year at the same time) into rising output figures. Across the board, analysts in the oil and gas industry are now convinced there is a substantial problem ahead.
This is Stage One, and it is nearly completed.
Stage Two is the tricky one. Analysts must convince their portfolio people that the problem is real, and direct them to what areas of the market to buy and what to avoid to maximize investment returns. But, portfolio managers are resistant to these arguments (they have heard them before) . So, only a few comprehend and accept the fundamental story, then take action. But, those brave souls start building upward momentum into the limited group of gas producing stocks that can be bought in size by the institutions (APC-53, BR-45, UCL-38, APA-60, DVN-60, and EOG-32, in order of descending capitalization) . Then, that section of institutional portfolio managers which cannot yet grasp the play itself but which is attuned to moving into stock groups with rising upward momentum in the market (for whatever reason), can be expected to swing onto the story. In this case, the natural gas producing group has recently come up on everyone's charts as being in the lift-off stage.
Finally, the remaining portfolio managers, still not convinced, are forced to act in order to maintain their performance rankings, and they belatedly enter the game.
We are better than halfway through Stage Two now, as I make it out. The fundamental players are "in", and the momentum players are starting to react. But, as to a general capitulation of portfolio managers to the natural gas shortage concept, that will be reserved for quarter-ending rallies in June and September yet to come, if I am reading the tea leaves correctly.
As I have previously noted, the media have not yet focused on this problem. That will be Stage Three.
There is a substantial story to tell here. Outages in industrial plants across (mainly) the Midwest and Northeast, with tens of thousands of workers staying home, is a major development. When TV reporters, newspapers and magazines eventually pick up the trend, perhaps several months will have passed and the situation may well be seen as more grave. Having professionally worked through the period of Energy Crisis I and II, it would not surprise me if the media termed the new "threat" as Energy Crisis III.
However, I don't think that this natural gas problem will have the public impact of the first two crises. Lack of gasoline (read mobility) and long waiting lines to obtain it may be more effective in influencing the American psyche than 100 industrial plants being shut down. However, Energy Crisis III is a convenient name, and at least it has the advantage of catching people's attention. Stage Three is a big step in the development of a crisis mentality in the market for gas-related stocks. But, we are not yet into this stage.
On the basis of widespread (future) media attention, Stage Four would involve governmental reaction to this, on all levels. By late summer and early autumn, we will be into the late days of the Clinton Administration's time in office. It certainly could be a political problem to admit that something this important had been allowed to develop, unbeknown to all, into a significant threat to the system.
On the other hand, the issue cannot be easily swept under the carpet because its effects are too close to breaking through into public consciousness. Moreover, the Gore-Bush pre-election debates should be in full swing by then, and Bush would be well guided to raise points, such as this, in which he has had some practical experience and for which no anticipatory consideration has been made in the non-existent national energy plan that President Clinton never formulated (nor did any other previous US president). As I see it, the Government will be forced to confirm the size and scope of the gas problem, and will further alarm industry by referring to the possibility of gas allocation on a national, state or local level.
Stage Four could well occur in September and October of this year. Its outcome would logically lead to Stage Five, the final rush to panic and overexposure. This would be the result of heightened media attention, followed by effective governmental confirmation that the problem was real and might not be easily fixed except through significant sacrifices on the part of the public. Stage Five would represent a general recognition that we could be entering a difficult period of fuel shortages and that the effects might be more serious than mere "inconvenience". It should be noted that under any allocation formula, those organizations and industries that could switch from natural gas to propane, butane, heating oil or residual fuel oil would be asked to do so. And, subsequently, these products might themselves run short under the impact of unexpectedly high demand. They might also advance dramatically in price.
Stage Five would also imply a highly visible case for investing in companies that might be best positioned to assist in solving the natural gas shortage. The final run of small investors� funds into the natural gas producers might represent a "tsunami" of money seeking entry to a play already suffering from limited capitalization, thus forcing gas producer share prices into the "blue yonder".
Stage Five, perhaps occurring in mid-to-late autumn, would, of course, be immediately followed by the actual onset of cold weather. By then, investors would also have full knowledge of the country's three-quarter-filled gas storage position. Early outages might start to occur, for coincidental reasons, in late January of 2001. However, the main weight of the shortfall would be expected to fall when different major storage points in various consuming regions of the country ran out of supplies in February and March of next year. That is when companies, facing closedowns for lack of fuel, should be most pressured to bid for gas to avoid the termination of output and temporary disbandment of their labor forces. So, we have assumed a peak to natural gas prices in February of 2001, probably in the $6.00 - 7.00 per mm btu range following a prolonged period of cold weather.
This could be the high point of fear, when many businesses could be driven to uneconomic decisions just to survive.This would logically be the exit point for experienced investors. With all five stages of the play completed, and the axe of cold weather fallen, this would be the time to collect your chips and leave the game. Conditions will likely not be so desperate or so uncertain again for some time, experience teaches us. Of course, the natural gas problem itself will not suddenly go away. It will take many seasons to find an answer to it. But, we will solve the problem, as we always do. And, as we move through the crisis and consider our options, all kinds of answers will present themselves. Meanwhile, the stock prices of natural gas producers would be expected to start down as early desperation gave way to later resolution.
What will be the eventual answers to the natural gas shortfall? Think about a higher range of prices, application of additional technology, new generations of sophisticated drilling rigs, more LNG receiving terminals, and what can come south from Alaska.

Oil Price and Depletion by iNet News Manager
Oil Crisis News from Around the World source: The Coming Global Energy Crisis
�� June 6, 2000 �� SolarQuest� iNet News Service �� Movements in the price of oil may be delivering a message beyond the simple balance of supply and demand. [by C.J.Campbell]
Starting from a low of about $10 in February 1999, price rose consistently in a well defined band to a High of $34 around March 10th 2000. This rise may in fact have represented the unseen iron hand of depletion rather than any particular OPEC action. The High triggered a certain panic in Washington and general outrage in the USA, even with calls for military intervention. The Secretary of Energy then toured the world trying to persuade the producers to produce more. His efforts were met with sympathy, of which the market got wind and started marking down the price in anticipation of the critical OPEC meeting on March 27th. Five days before this, the US Geological Survey made (or was persuaded to make) a Press Release of an unfinished report that not only exaggerated the size of the undiscovered and the scope for reserve growth but increased radically the potential of the three countries of North America. Observers may be forgiven for concluding that this was politically motivated to undermine OPEC confidence.
OPEC did make a conciliatory gesture, declaring a policy to hold price in the $22-$28 band. Significantly, Iran declined to sign. The reason may have been - not so much that it disagreed with the OPEC position - but that it did not want to admit that it could not physically meet its quota, which would have diminished its political stance in the region.
Oil price fell to about $25.50 by the March 27th meeting, but then strengthened briefly because the OPEC offer was not seen as being generous enough. Oil price then plunged again, reflecting the arrival of a large number of tankers, which had been dispatched previously to give weight to OPEC's gesture. Some of these tankers drew their cargoes from floating storage in the Gulf rather than increased production.
Oil price bottomed at about $21.50 around April 10th, when the impact of these deliveries passed, and began to firm hesitantly until the end of April. It then became evident that supply was not going to be enough to both meet demand and replenish depleted stocks. Price then soared to $28, and began to breach the OPEC ceiling, at which point it also entered again the long term band that has been developing over the past 12 months.
So far as the movements over the next few months are concerned, we may speculate as follows.
Price will dither around $28 to see if OPEC will or can increase production to hold its declared range of $22-28. Within a matter of weeks it may become doubtful if it can. Price will then pass through the emotional $30 barrier. That will trigger another political spasm in Washington, and new calls for military intervention will be voiced. There will be pressure on Norway, Mexico and Venezuela to increase production to counter what is wrongly perceived in certain quarters as the Muslims holding the West to ransom. There will be a lot of rhetoric of a very damaging type. It will soon however become evident that these three countries cannot physically increase their production rapidly.
We should also not forget the position of Russia and the Caspian. Russia is now facing serious food shortages, which force it to increase imports. This is a heavy burden on its foreign exchange, almost all of which comes from the export of oil. By the autumn, the harvest will be in reducing the pressure to export oil, which is in increasing demand internally as the domestic economy improves. Falling Russian exports will be further pressure for higher world oil price.
It seems that the Kashagan East well in the northern Caspian has made a discovery of about 10 billion barrel (another Prudhoe Bay) in an immensely expensive operation. It is however a solitary huge structure and does not herald further major discoveries capable of having a world impact. The potential of the Caspian has been generally exaggerated in a pitiful example of wishful thinking as the West dreams of countering Middle East control. Confirmation of this discovery may however cause a temporary emotional fall in oil price. It may also trigger further tensions about the ownership of the Caspian. Russia and Iran have claimed that it is a lake not a sea and that it is owned jointly by the contiguous countries. Kazakhstan and Azerbaijan naturally claim that their offshore extensions belong to them. Russia or other neighbouring countries they have a lever to impose their will as the pipelines have to pass through their territories. The US will likely want to get embroiled in this affair with the carrot of financial help and the stick of military intervention, possibly related to the Chechnyan civil war, but it may end in another failed policy.
Gradually the market will perceive that there is neither an OPEC ceiling nor a roof above it. Prices will soar into the $40s. That in turn will trigger a stockmarket crash and another Asian recession. By year end, all of this may have curbed demand sufficiently to allow oil prices to fall back to the mid $30s. In any event, the days of cheap oil are well and truly over.
The US situation seems to be particularly serious because this oil crisis will coincide with serious gas shortages. Gas depletes very differently from oil due to its higher molecular mobility and recovery factor. Instead of following a bell curve, production is capped by the limits of the pipeline and the market. In an unregulated market, such a plateau runs its course with few signals that it is about to end, it being often cheaper to produce the last cubic foot than the first. The plateau ends not in a slope but in a cliff. The United States may now be looking over the edge of this cliff.
For all of these reasons, the new President will face some kind of economic discontinuity.
We are not running out of oil, merely reaching the peak of production. Peak is not the end of the world. But the perception that the fuel that has driven the economic prosperity of the last 50 years is getting expensive and in short supply will have a radical impact on business decisions and investment strategies.
It takes no feat of intellect to see these patterns and pressures. But it is a picture that no one wishes to see, which explains the scale of denial and obfuscation. In this context, we may note that the President of the American Association of Petroleum Geologists (which is colluding with the USGS) launched an editorial against a study of depletion in the May issue of the AAPG Explorer. He sought to discredit it, but in fact confirmed it when he stressed that the production of non-conventional oil and gas could be stepped up in North America. This is expensive stuff, and no one produces it if there are abundant supplies of cheap conventional oil. In other words, the hoped-for growth of non-conventional oil and gas implies the peak of conventional hydrocarbons and a radical increase in price. But why does the AAPG not discuss the obvious implication instead of pretending that there is a seamless transition? Incidentally, the new USGS study claims that new discovery will amount to 724 Gb between the years 1995 and 2025. It means that it is already short almost 100 Gb, and cannot possibly catch up with its totally implausible target.
We can expect this denial and obfuscation to continue, but while it misleads many, it also offers great investment opportunities to those who are not deceived and have the courage to plan for the inevitable.

In a nutshell - Now would be an excellent time to prepare for the coming energy crunch. Prepare as some did with the percieved threat of Y2K, get stocks of necessities, Gold and Silver, good defensive stock positions, and hold on for the wild ride. If you prepared for Y2K, then you're already a step up on everyone else. Nothing wrong with preparation. Remember Aesop's fable - "The Ant and The Grasshopper"

Going fishin' - later, Black Blade.

What is your take on the intercontinentalexchange?This seems not the new physical market we are hoping for (no smile).
But it seems they were in a hurry as their webpage has a lot of bugs built in.

Civil Defense Stance Is Exercise In Common SenseThe running of each household, as if it were a soveriegn little country, is by far, in addition to the holding of precious metals, the cement that is needed to enhance and safeguard your lives, fortunes, and future.

Everyones level of dependance on the "system", going just right, needs to be looked at very carefully.

This is the time to get a grip on procrastination, and lay in supplies and fine tune operating proceedures to ensure
that you will continue to wake up and smell the coffee.

Is the rest of the world trading gold tonight and tomorrow?

$hifty

http://www.kkgofm.com/log_files/kkgolog7a.htmYou posted just after midnite -- are you scheduled for Sunday (link above -- "Sundays at Six: Pacific Trio"), or Monday?

Trail Guide to post later today -- oooh boy -- only (almost) thing that can keep me inside on a sunny afternoon.

http://www.KKGOFM.com/playlist&kmozart%20live.htmYes, that's right. "Sunday's at 6" is the name of the show. The Pacific Trio is the name of my Trio. The concert is today -Sunday the 3rd - at 6 PM. Hope you can listen in. It's good luck that I looked in on USA Gold this morning to see your message. Thanks for providing the opportunity to make things crystal clear. See y'all later...

http://www.KKGOFM.com/playlist&kmozart%20live.htmItr was still Saturday for me when I posted. Sorry about the confusion.

Journeyman posed these two excellent questions yesterday:

QUESTION 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

My response:

1. Inflation, properly defined as an increase in the money supply, is held in check by the convertibility to gold. Energy price rises do not create more gold, and since the currency in question is tied closely to the available gold on deposit, the money supply is more or less held stable.

Inflation, otherwise defined as a general rise in prices, would not occur, as there would be a corresponding price decline of other goods. Sort of like saying the same amount of money now chasing some goods (energy) more than others.

2. An energy price rise , first of all, would reflect some change in the market condition, such as a depletion of more easily exploitable reserves and a shift to more costly energy sources, some technological development that increases demand (the jet engine spawning a huge air travel industry for example), or possibly some shift in consumer preferences (the proliferation of air conditioning comes to mind).
This rise in prices would cause an adjustment in the economy on numerous fronts some of which are:
a) As mentioned above, there would be a shift away from consumption of other goods.
b) There would also be a decline in the currently established consumption patterns of energy. People would drive less for example.
c) There would be capital invested toward more efficient energy utilization (building insulation standards increased).
d) A shift in capital would occur toward exploration for more energy, and more complete utilization of existing reserves.
e) There would be a shift to less costly energy sources.

In short life would go on, and the economy would absorb the reality of more costly energy in the least wasteful manner.


BTW, I thought JMB had a great response, especially to the second question (lol).

I have believed since its inception that Kyoto never would be implemented as agreed. Too costly both economically and politically. What concerns me greatly is the opportunity it provides for our governments to do that which they do worst. Among the possibilities:
- Create new expensive and permanant bureaucracies, enlarge the existing ones.
- Impose a new or increased tax in the name of providing the correct incentives.
- Impose more regulations on all.
- Increase its redistributionist activity.
- Increase its direct activity in the market.

No good will come of it.

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

http://www.sunday-times.co.uk/news/pages/sti/2000/09/03/stifgnnws02001.html
Some time ago, I posted about a visit I made to the Olin/Flinchbaugh facility in York, PA where they manufacture the "Tank Killer" armament that was used successfully in Desert Storm against Iraq. It's a high-speed round of depleted uranium that goes through tank armor like a hot knife through butter.

The link above takes you to info about a "minor detail" I wasn't aware of until now. Thanks to GoldbBrick at Kitco for the heads up.

Well, Sir, we've all probably read everything there is to read about and into the latest FAZ articles, including the really great comments by Reg Howe and others on the main gold fora.
I personally have been expecting a second tranche, leg or whatever on the WA and posted here and on the cafe chat some weeks back about my notions. Well, it did happen, since the feeling is it was BuBa (Bundesbank) sending this volley, aimed at FED and TSY, aagainst further gold- and as a consequence $-manipulation. Though BuBa wouldn't go it alone anymore - meaning they would have covered their back at least by other leading euro cb's and ECB (id est WA).
To my knowledge, Europe never officially confiscated gold, nor madethe acquisition of at least old and/or bullion coins illegal - though in some countries you couldn't buy bullion bars, or say Krugers for different reasons as economic boycotts -vs f.i. SA, or in era's of foreign exchange regulations, like post WWII, or tax or tariff considerations - otherwise the acquisition of gold and gold coinage by the public was mostly eendorsed and wellcomed by european states throughout history, since it was and still is a profitable business to the usually still gov. owned (not anymore everywhere, though)mints and the tax man.
As the typical last century European has lost all his currency savings at least twice, gold was always a part of the overall asset equation for the more affluent and may still be, though maybe "restricted" to the older generation now, as our stock markets are not too far behind the US X-changes.
In the aftermath of the Soth East Asian and Russian crisis there was a noticeable pick up in bullion sales throughout Europe, never followed by Y2K or any other concerns. So the complacency over here is matching the US, with the exception of ever lessening acceptance of the euro.
Being a contrarian (or hoping to endure) I should pick up some more euro currency (smile), though I'd rather pick up some more gold - even if it's still at $-inflated "contract"
value. The difference may prove to be negligible - x-change some more of your respective currency for reality - best cb2

Nor was the posession of gold illegal - at least to my knowledge - even under the Hitler regime I'm not aware of such a measure - for the "general" public, if there such left.
cb2

http://news.bbc.co.uk/hi/english/world/middle_east/newsid_908000/908930.stmSaddam Hussein has lymph cancer, trouble breathing, memory loss, poor eyesight and lack of concentration. Sources say he's been like this for a long time.

FOA -- I'm no expert on the original Mr G, since I picked my name in the Y2k bank run context last year, and I've had to learn a lot since then.

But, I think what he said HAS held true, and you had it reversed: "Where government decrees it to be used as a legal tender, the bad money drives good out of circulation."

In this case, people are stashing their gold, a la Martin Armstrong (maybe not right in their hall closets, however) and spending, first, their credit e-money, second their e-bank deposits of their paychecks, and third, the paper green stuff that might survive the first two categories.

Of course most of them have no gold, but, instinctively, they're loading up on credit purchases (houses, cars, etc.), spending each others' IRA's out of those money market funds, and generally waiting for the whole house of cards to come down (gotta go - guests -- put in appearance so I can next catch Strad Master on Internet radio in 25 minutes, too -- OK?)

It's either a mystery or I'm getting older faster than I realize.
I hit the Gold Trail link as instructed...sure enough there was Trail Guide's latest post...but I'm feeling a little pang of hunger, so it's off to the local eatery for a bite...I return with a full belly (thank God...if Sen. Lieberman can do it, so can I) and much to my consternation the Trail Guide's post has been stolen. I'll tell you whom I suspect...KITCO, yep, JavaMan used Gold Brick's kitco post so they've retaliated...the nerve of those guys!
It's either that, or my judgement is being affected by a real bad gas attack (Steak Cesar Salad with Onions and Garlic Bread).
Now it could be that I'm hitting the wrong buttons...I need some help, please. Where do I go to see the Trail Guide's latest post and how do I get there?TIA

http://chinadaily.com.cn.net/bw/history/2000/08/b1-3gold.827.html
Hope I got this link right.
Article is called, Golden Comeback Launched
Happy holiday to all!
PS I found this while looking for news of the Chinese cotton crop which I've been discussing at cottontrading.com

CoBra(too), your " x-change some more of your respective currency for reality"... is a great one liner!


JMB, the link works for me so I think the good folks at Kitco are in the clear. If you go to the Trail page, hold down your Shift key, and Refresh your browser, all should be ok, no?

Thank you so much, Sir.
To Kitco: Sorry guys, my bad.

Has anyone heard from the Stranger, in reply to private e-mails. I have sent him a couple of messages lately, but no reply. Let us hope and pray he is alright. His e-mail address still appears to be functioning, so that is a positive sign.

CoBra Too and 714,
Thank you for your reassuring words.
I'll definitely sleep better now.

Mr Gresham,

Ha! Ha! I never thought it would be picked up the way you saw it. Yes, I meant to imply that "it was driving bad money into circulation"! You are right, I put it in a context that could be easily seen as reversed. Hope everyone can understand it?

When I say Gresham law is not working; I wanted to point out how the dollar price is not reflecting this "good money" (gold) accumulation as it drives our fiat dollars into circulation. It's doing this because what we as Western Style investors assume to be gold is really paper.

Oh well, it's my poor use of thought direction.

Also,
I think the waiting is finally over. Everyone is accepting that crude is going higher and not from any fundamental reasons. This surge in perceived value of oil has become so blatant that it's obviously not just from demand. This will play out as a fall in all currencies relative to oil, but once it breaks $35 to $45 (or sooner) the dollar will begin to roll over. That's because producers are prepared to
bid the excess profits for both gold and Euros! By the time crude gets that high the US trade deficit will be truly explosive,,,,, and no one is willing to guess the impact.
Further, without a corresponding plunge in perceived gold values, using paper gold as the measure, the dollar will be going into it's first real free fall. I think Europe will allow a swift default cascade in gold banking, but only because they now have major buying support shaping up and it's being voiced from dollar reserve holders. That support will be aimed squarely at spot physical. A prospect that was not legitimate with cheaper oil.
We shall see!

thanks for your comments on my post, I'll try to word things a little more clearly.

Trail Guide

canamami: did you check his web site? I don't have the address but I remember he posted it one time with photo's and family stuff. There may be something there .

Cavan Man (08/29/00; 18:36:09MT - usagold.com msg#: 35715)
Trail Guide/FOA...RE: ix What do you make of the OM bid for LSE as reported in the FT today?

Hello Cavan Man,

I think OM Gruppen would be a better platform for Euro Land trading. They are way ahead of the rest. It makes no difference who takes the lead politically, in developing future market infrastructure. What counts is the whole Euro thrust at the moment. Who buys or merges with LSE is not all that important, OM will be a European player whether alone or with another. So will London, they just have a hard time digesting that fact right now.

I bet shares will be quoted in Euros. What say you?

Trail Guide

I many have missed a response to the post below, I have searched a couple of times, but to no avail.. However....any comment would be appreciated.

Al Fulchino (08/21/00; 19:16:50MT - usagold.com msg#: 35277)
Trail Guide
Could you flesh out in further detail the last two sentences of the paragraph from your most recent posting. And one other point, if the long and shorts *already* scramble to settle, why isn't there more price volatility. Thank you.

"A fraud? To say that the shorts have sold a metal contract that they cannot deliver against,,,,,, holds no more meaning than the fact that the longs cannot pay for metal they have contracted to take! As proof, watch as both sides always scramble to close out the majority of contracts for cash before they must settle. Betting on the price movements of something is not buying real wealth and running from a contract should prove it in the open to changing "Western Thinkers". Waiting for the shorts to be had, in order for your paper investments to gain value may be a long wait indeed. If this continues further, and now with the blessing of Europe, it's the paper longs that may be had as the
shorts are let off the hook as the market is destroyed!"

Keep it comming man! I am building my own archive of your posts on the energy situation. Your post are important to me for (at least) two reasons. First, I'm trying to warn my friends and family that inflation will soon ravage America again. And second, I loathe revisionist history. By printing your well sourced posts I am documenting the causes
for later generations. Let's face it, if Bush wins the election, the economy is still going to hell in a hand basket. The Clinton News Network (CNN) will be sure to hang everthing on the evil oil men, Bush and Cheney. It won't be long before the text books pick it up.
To others here at USA GOLD: Consider printing and filing some of the other excellent posts that appear here.
What if something were to happen to the on line archives?
Many of the statements made by BB, Another, FOA, Stranger, Aristotle, et al, will make much more sense after the pages have yellowed with age. Jessica Fletcher won't solve this mystery in a half hour program. And the carnage may last for generations. This is truly the information age, if we live in ignorance, it's only because we refuse to see. You shall know the truth, and the truth shall set you free.

Gold up $1.20 tonight!

Strad - BRAVO, BRAVO -Unfortunately I missed the beginning due to the need for an over 4k update. What I did get to hear sounded wonderful, thank you for this Sunday night treat.
MK - I hope Marie and her husband are feeling better and a speedy recovery is in the future.
Trail Guide - Did I miss any of your posts I noticed that 1-5 and 31-33 are not represented, I have a hard enough time understanding what is happening without missing puzzle pieces. I imagine as long as I continue to call Mr. Kosares on a periodic basis I will be safe.

"Know the truth and it will set you free. But first it will make you damn mad." -M. Scott Peck, M.D.

Regards, J.

http://www.egroups.com/message/gata/520European central bank officials are waking
up to market manipulations in the United
States, and GATA is the alarm clock.


To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@eGroups.com

You know I agree. How's your #1 Iron?

http://www.ft.com/hippocampus/newsecon.htm#oneSaudi prince to meet Clinton for oil price talks

Abdullah bin Abdulaziz, Saudi Arabia's crown prince, was due to meet with US President Bill Clinton later in the week to discuss effective methods of lowering the international price of crude oil, according to local media. Prince Abdullah, who effectively runs the kingdom, arrived in the US to begin a one-month tour. The two leaders were also expected to discuss the Middle East peace process and Iraq. Mr Clinton earlier called on oil producers, including Saudi Arabia, to maximise their output capacity in a bid to calm escalating prices to somewhere between $20 and $25.

THINGS MUST BE GETTING INTENSE BEHIND THE CURTAINS......FOA, THANKS FOR YOUR CONTINUES CONTRIBUTIONS!

Al Fulchino (09/03/00; 19:38:42MT - usagold.com msg#: 35953)
Trail Guide
I many have missed a response to the post below, I have searched a couple of times, but to no avail.. However....any comment would be appreciated.Al Fulchino (08/21/00; 19:16:50MT - usagold.com msg#: 35277)
--------------------------------------
Hello Al,

I often write or refer to the Comex and their future contracts. But in reality, I'm just as much pointing out the whole system. With that in mind:

Every month or so a very large collection of open interest builds up in a leading futures month. From almost as long as I can remember, the vast majority of these contracts are worked off thru either cash trading or cash settlement. This is what I refer to as "running from a contract" because
they don't want physical delivery. There is nothing wrong with some of this because a portion of these traders use the system as a hedge. But, Comex trading is nothing compared to the whole world of gold paper and all the physical traded doesn't require this much hedging. Obviously, by a wide margin most of these transactions do not involve the transfer of bullion. As I said before, by trading and settling in cash, this huge paper pool has created not only an illusion of physical demand but a much larger illusion of physical supply. It is never tested for price validity by settling in physical and does understate the true price of bullion. Therein is the system for controlling the perceived value of gold. In this format, supply can equal and overcome any demand built on currency inflation because the supply is a function of the same fiat liquidity.

But this is yesterday's news. That period is ending with this end run from oil! We should prepare for the destruction of our dollar gold markets now.

Further, I fully well expect the entire bullion banking sector to be frozen by official decree and settled in an understated cash price. Even as the physical trades onward and upward. This will devastate many mines, investors and hedgers but save the banks. We shall see!

thanks
Trail Guide

Cavan Man (09/03/00; 20:30:12MT - usagold.com msg#: 35959)

Cavan Man, I do try to use a #2 iron but it's rough on my ego! (smile)

Further, I fully well expect the entire bullion banking sector to be frozen by official decree and settled in an understated cash price. Even as the physical trades onward and upward. This will devastate many mines, investors and hedgers but save the banks. We shall see!


"SAVE THE BANKS".......NOW I KNOW WITHOUT A DOUBT THAT YOU UNDERSTAND THIS CHANGE OF A LIFETIME BEFORE US!

HEY ALL...I'M GOING TO BECOME A BANKER.....I'VE GOT GOLD...HEE HEE.....ON SECOND THOUGHT I THINK I'LL KEEP MY SOUL.

Trail Guide, do you percieve that the fuss over Jerusalem and its holy sites (et al) has any bearing or influence on the present currency/banking/power conflict before us? Men have fought over ideologies probably just as often as wealth, and the conflict over Jerusalem is truly much older than the present currency one.

Also, big shindig going on at the U.N. this week, 185 leaders form around the world comin to visit and all. I hear that Bono (of U2 music fame) is presenting a petition signed by some 21million people, supporting further debt relief for the poor.........go Bono GO! I'll vote for you.

http://www.faz.com/IN/INtemplates/eFAZ/docmain.asp?sub={AFE5369A-1A96-11D4-B984-009027BA226C}&doc={D8097BF3-6F80-11D4-B993-009027BA226C}Life for Britons Beyond the Euro May Soon Be Coming to an End

By Christian Schubert and Bettina Schulz

Will Britons now finally be forced to join the euro? This debate has been re-ignited by outside sources. Japanese carmaker Toyota just announced its intention to renegotiate current contracts and stipulate in all new contracts that its British suppliers must invoice solely in euros. Otherwise it might consider closing its production sites in Britain.

The exchange rate has made Toyota's British production location no longer competitive. ...............

Hello Buena Fe,


I'm sure you will keep your soul, my friend. I think mine is still safe,,,, I think? (smile)!

But, truly,,,, our gold bankers were only following behind a political wave that's changing things. No different than the hard money crowd that has tried to follow behind a gold move. One group was on the correct side and the other was on the wrong side. Nothing more.

How many local and international traders you know that would not have shorted gold for all they were worth if they knew how the game was being played? Even with a pro hard money stance, I bet they would have borrowed all the gold a CB would lend,,,,, and sell it down with the best of them. Further, how many big bankers do you think are personally very long physical,,,, even as they voice their evil projections of gold being worthless?

It's no different on the mining front. Most (but not all) investors went long shares or pumped money into the business for the leverage it could produce,,,,,, not the wealth preserving qualities so many of them proclaimed of bullion. The same as if someone tells everyone that will listen how their life will not be the same without a new ford,,,,, then he goes without a vehicle himself to allow the purchase of ford stock for himself?????? The examples of these traits are all over if we look for them. Not just in the possession of bankers!

Every so often a change comes along that makes old fashioned ideals and concepts look like something only a genius could understand. Yet, it's just recognizing where we are on the trail and doing what has to work instead of what will work the most.

Physical gold, as simple and stupid that holding may be,,,,, will outwork all the brains on our planet. Like keeping cash in a shoe box,,,, under the bed during the great 1930 bank failures,,,,, the leverage in gold today is a thousand times greater.

I ramble on.
Trail Guide

Hello! Lovely day for a hike! Thanks for pointing out the unfamiliar flora and fauna along the way!
I have a question. Maybe I'm just dense, but the Euro and the Dollar cannot be equal world reserve currencies unless they can both be traded for oil, right? So, when was the Euros for Oil trade deal announced, or did I miss it?
Thanks for your time and your patience,
simply me

Buena Fe (09/03/00; 21:24:39MT - usagold.com msg#: 35964)
(No Subject)
Trail Guide, do you percieve that the fuss over Jerusalem and its holy sites (et al) ??

Buena Fe,

Oh, It's all part of our travels through life. Jerusalem has and will always be a problem. I think it will be many generations before that area is finally worked out.

On your note about Britons and the Euro? Ha! Ha! Life is good! I'm getting closer to winning my dollar bet from Michael K.!

Thanks
Trail Guide

Ramble on my (our) friend TG, these discussions are as satisfying as a fine, dry wine during a feast of tender lamb, garlic mashed potatos, sauteed snowpeas/onions and peppers! (apologies to any vegetarians among us)

My mother holds a family hierloom (?) that I'm sure many here would enjoy to look at and ponder its story.....a small tin box......hand painted......that held her parents (my grandparents) mobile-wealth (gold jelewry etc.) as they fled Russia 1919.......everything else was lost....but what was in that box bridged all chasms and enabled a new beginning!

First of all, a very WELCOME BACK...it appears you had a most fruitful and enjoyable sojourn.

I too, have had a very busy summer and have not had the available time to continue my previous and consummate lurking and occasional posting...but I'm trying to catch up with the thoughtful and intelligent commentary of the many wonderful posters who frequent here.

My Questions:(08/20/00 msg#30)
You stated, "If this continues further, and now with the blessing of Europe, it's the paper longs that may be had as the shorts are let off the hook as the market is destroyed!"

After having read Howe's excellent commentary and also Murphy's, is it your implication that Deustch Bank is absorbing the derivatives in order to prevent Euro "bleeding" or is there another context to this statement?

Also: (09/03/00 msg#34) Concerning the "two ways (or a combination of both):"..."one or two government and /or private entities to pull the cord"...or..."The price of oil rises until price inflation can no longer be contained."

In the first way: Who would have the INTESTINAL FORTITUDE! IN THE "OPEN"! To "pull the cord"???

In the second way: Will the oil producers be able to withstand the political pressure that will undoubtedly be placed on them?

Strad Master: I was very disappointed in missing your concert...my problem---not enough network bandwith???

Black Blade: Very fine commentary!!!

ORO: Where are you??? Miss yours!!!

Rgds to ALL

Simply Me (09/03/00; 21:54:04MT - usagold.com msg#: 35967)

Hello Simply Me,
It just could be that it's being discussed with Mr. Clinton this week.

I have to go now.

Trail Guide

law (09/03/00; 22:12:07MT - usagold.com msg#: 35970)

I'll discuss tomorrow.
thanks

HI-HAT (#35931): Your absolutely right! This petroleum crisis is coming. There's no doubt about it. This is not a man made crisis, but rather a simple case of available supply, the ability to process it, and the limited ability to produce it. The result is not only some inflationary event, but also rather an event that has the potential to seriously impact our lives, as we know it. I'm fortunate enough to live where I can live off the bounty of what nature provides. But most in this country don't have that luxury. The best that one can do for him/herself and family is to be prepared for any and all contingencies. Certainly it is wise to have supplies of the necessities no matter what, whether it is because of a family health crisis, employment crisis (layoff), national/international economic disaster, energy crisis, etc. If one were to be in an earthquake prone area for example, it would only be prudent to prepare for a serious disruption to one's daily life. What we are facing is more real and quantifiable than the perceived Y2K crisis. Either way you slice it, there is nothing wrong with the peace of mind than should there be any crisis situation arise, then it is possible to provide for one's self and family. I'm not what you would call religious by any measure (probably due to my extensive background in the earth sciences perhaps;-)), though I know that there are some religious folk here, they may be able to compare the necessity of preparation for such events to Jacob in Egypt and the 7 years of plenty vs. following 7 years of famine. Gold and Silver are a means to transfer wealth over the great divide, for portfolio insurance, and as the currency of last resort. Remember the persecuted in WWII and in Kosovo who had gold as opposed to those who didn't.

Shermag (#35937): DITTO! Once the government creates an agency, it becomes institutionalized. You just can't get rid of it. When it is no longer necessary, you need the pin it down and drive a stake through its heart. And even then it probably won't die. Look at the Bureau of Alcohol and Tobacco (BATF) in the US. It used to be the Department of Prohibition. Once alcohol prohibition was repealed, they became an agency in search of a mission (much as today). They are now nothing more than a bunch of incompetent "keystone cops". These crooks in the Federal Mafia only know to extort the proceeds of the productivity of the citizenry at the risk of creating a financial disaster. Power is more addictive than any drug (including tobacco, alcohol and heroin). They get involved where they are not wanted or needed. And they work to please the majority by stomping all over the rights of the minority for votes and to keep a grip on power.

Bonedaddy (#35954): I think that you and I are in somewhat similar career tracks. I have been involved in the oil and gas business in the past and keep my contacts there. However, I am now in the mineral and metals exploration and mining business. I think that it is clear to many that the developing situation in petroleum is more a fundamental case of supply and demand. The refining capacity is the major limiting factor. No matter how much oil is pumped, there is no more real refining capacity. With capacity at 95%+, any little disturbance at any refinery or necessary shutdown for maintenance will be felt. The only possible source of increased production is from Saudi where they have maybe 5% extra capacity. NG, however, will be the big story and is really being overlooked. The 3 year backlog for NG powered turbines, the EPA constraints on coal and oil powered power generation plants (along with their allotted EPA mandated "carbon credits"), and the political opposition to nuclear, wind, and solar power generation means that NG as the only viable source for "clean" energy will come under severe pressure as the production capacity and infrastructure simply does not exist. The only other sources of petroleum are from heavy oils, asphalt tar sands, biomass fuels, and oil shales. These are all much more costly for the production of petroleum. Prices for everything as a result are bound to be passed along to the consumer, resulting in inflation. It will be next to impossible to bury this (very real) inflation in so-called "hedonic statistics" and other manipulative bogus and increasingly meaningless CPI and PPI numbers.

Canamami: You're right. I hope all is well with Stranger. Perhaps he is on holiday. Perhaps when MK and the guard at the castle sent him an issue of "News and Views" they might want to put in a note to ask if he is well. I will be in his part of the country soon for a couple of days. Hope he's OK.

Buena Fe (#35969): Yikes! " �dry wine during a feast of tender lamb, garlic mashed potatoes, saut�ed snowpeas/onions and peppers!" Talk about bringing out the Basque in me1 should add a little mint jelly and garlic bread to that! ;-)

All: Been a great day! Caught a 9 pound rainbow!!! Though it looks as if the pine nut crop will not be so good this year. Oh yeah, I let that monster go. I didn't want to, but I was only interested in stocking the freezer with pan-size. Besides, dove season is about to begin, and I love deep fried dove breasts.

Does anyone know what the official positions of other countries around the world was towards gold confiscation in the 1930's? Mexico? Canada? European countries? others?
Was the US the only country that did this?

Nasdaq 4,234.33 + Dow 11,238.78 = 15,473.11 divide by 2 = 7,736 PONZI

UP 118.90 from last week
The bubble grows!
Got Gold?
$hifty
:)

gold still going up!
UP $1.50 so far tonight!
$277.40
:)
$hiftyView Yesterday's Discussion.

Source: Barron'sby James Srodes, Barrons, Oct 19, 1998

Most news analysts got it wrong when they credited low oil prices for the recent proposed $48 billion takeover of Amoco by British Petroleum. What's really driving this mega-merger is an impending global oil shortage that will have profound economic and social implications. Seen in this light, the BP-Amoco merger makes short and long-term sense, and the light also shines on other oil companies.

For European companies like BP, marriages of convenience with American merger partners will offer shelters for profits from the uncertainties of the European monetary union. Also, there will be cost savings from cutting staff and consolidating offices. And U.S. oil companies like Amoco bring retail service-station networks and refineries into the world's largest market for petroleum products. But most of all, the new hybrid giants will have the muscle to survive critical challenges that loom in the not-too-distant future.

Behind the BP pursuit of an American base is a recent series of alerts from many respected petroleum engineers, acknowledged by oil-industry executives and government energy planners: We rapidly approach the point where the global output of new discoveries of oil will begin to contract sharply even as the world demand for energy products becomes still more acute.

Put most simply, a consensus has formed in recent months that within a few years new supplies of conventional oil energy will be outstripped by spiking world demand. Very soon after that the real volume of oil output will begin to shrink abruptly -- even as demand growth coasts a bit higher.

We've seen this before, but the 21st century's supply disruptions and soaring prices will dwarf the OPEC crunches of 1973 and 1979.

The best industry estimates reckon that the world began this year with 1,020 billion barrels of oil in "proved" reserves. At the current production rate of 23.6 billion barrels a year, these supplies would last only another 43 years -- if there were no growth in demand.

As for growth in supply, the industry has spent the past 20 years exploiting a new age of discovery technology. Now many oil geologists say that 90% of the globe's oil fields have already been tapped and many are already exhausted.

Bigger Problem

There are several things wrong with the current consensus. Many of the OPEC nations have been inflating their estimates of proved oil reserves. More obviously, consumption of oil products has already jumped by 50% in Asia and by a third in Latin America, since 1990. By the estimated peak production year of 2010, world demand will have risen by more than 60% to as much as 40 billion barrels a year. Finally, there is the geological bad news that once a mature oil field reaches the midpoint in its productive life it becomes harder to pump out each remaining barrel. Examples of mature fields include much of the Middle East, the North Slope and the North Sea.

Two remarkable things about this latest crisis outcry are how recent it is and how authoritative are the alarmists. It was only last November that two top oil geologists presented papers on the impending oil depletion to a conference of the International Energy Agency of the United Nations in Paris. Colin J. Campbell, an Oxford-trained geologist, and his French counterpart, Jean H. Laherrere, have been senior geologists for firms such as Total, Texaco and Amoco for more than 40 years. Currently they work at the industry think tank Petroconsultants in Geneva.

The two geologists were so convincing that the IEA dropped a generation-old view that held oil discoveries to be merely a function of price -- that is, the higher the price the more oil will be found. Last March, at the Moscow summit of the Group of Eight major industrial nations, the IEA presented its own paper to the national leaders accepting the Campbell-Laherrere view that sometime between 2010 and 2020 the crisis will be upon us full blast. The Campbell-Laherrere analysis also cut the reserve of oil currently known to be in the ground to about 850 billion barrels.

Since then, others have joined in the public debate. Recently, Franco Bernabe, chief executive of the Italian oil company ENI SpA, has given a series of interviews in which he moved the doomsday clock forward to between 2000 and 2005. He forecast that today's world price for a barrel of oil would soon begin to rise from its $15 base and quickly pass the $30 mark. He forecast that both the British and Norwegian sides of the North Sea will begin to see production declines within three years. The United States passed its peak (even with Alaska) long ago. Left open for argument is the amount of new oil left to be discovered in the Third World.

So much global economic progress depends on the exploitation of oil. Energy from all hydrocarbon sources accounts for 80% of what makes our world go and oil accounts for 38% of all energy used. And it's oil that truly powers economic activity because it produces so much raw lift for activities, since it is so movable and can be used in so many ways.

Most "alternative" energy sources require more energy to get them running than they ever produce. For instance, it takes 71% more energy to produce a gallon of ethanol from grain than the energy contained in a gallon of ethanol will generate in use. A barrel of oil routinely offers 10 or more times the raw power for our activities than it takes to get it, conferring an enormous profit not only on the companies that supply oil but on the entire economy.

Some alternative sources are just the figurative drop in the bucket. Wind generators require technological investments that outweigh the power they can generate, even if every windy hillside is sown with them. Solar cells pay off only in remote locations. Other substitutes are possible and may provide almost as much economic profit. But construction of nuclear reactors or projects to wrench oil from shale deposits have mostly been cancelled during the last 20 years of oil surplus and low prices. And coal, which is abundant and profitable, has environmental costs. The recent uproar when strip miners blasted the top of a scenic West Virginia mountain showed just how much of our environmental consciousness will have to be reassessed during the next energy crisis.

Advancing the Market

This is where market forces come in and why the BP-Amoco merger fits the rough logic of the days ahead. Soon enough the giant oil combines of the next decade will find themselves doing battle with the likes of Vice President Gore and British Prime Minister Tony Blair. The bigger the major oil producers become, the longer they can hold out against the temptations of politicians to redistribute what oil remains. The 'Seventies offer a convincing example of the impulse to tax "windfall profits" and spend the proceeds on vegetarian-style alternative energy sources.

Then very quickly the fight will be over the dwindling petro-reserves themselves. Those nations rich with oil and strong in resolve will get their energy fix. By that standard America can thrive quite nicely; so, too, can countries as diverse as Britain, Mexico and South Africa. Other European Union members will fare according to their ability to command and pay for energy (in dollars and not in euros, thank you).

Much of the social safety net that defines the industrial West will be up for debate again at considerable political pain. Nuclear power, with all the fears it raises, will be back on the policy agenda again.

There will be obvious nations at risk too. Some are already visible on the horizon. Russia, which has lost control of the petro-energy subsidies that made collectivism possible, is imploding before us. Japan, which must import each barrel it uses of economic growth, is adrift. Even some nations that have oil -- Indonesia and Nigeria, for example -- must show they can control it, lest it be poured down the drain of civil strife.

Other productive and oil-rich regions face challenges. The Middle East with its easy pickings grows increasingly unstable with each passing day. Some new fields, such as the Caspian Sea area, are hostage to rival bands of terrorists whichever way their pipelines head.

Finally there are the have-nots, those poor nations strangled by a poverty that can be alleviated only by massive use of more and cheaper energy. Think of China, India or Pakistan unable to obtain the means of prosperity and the picture grows dark indeed. The struggle for national prosperity fueled by energy will not automatically go to the rich and already powerful. The nuclear wild card makes players of all nations.

Left to market forces, the energy producers of the world will find and exploit a range of energy resources at the prices that reflect the needs of the world. But the vision of the last half century -- that anyone can have everything -- is no longer likely.

JAMES SRODES is a Washington writer specializing in international business.

Black Blade: Both Colin J. Campbell, an Oxford-trained geologist, and his French counterpart, Jean H. Laherrere, have quite a bit of research on this subject. Laherrere has put forth some rather complicated mathematical models that I have tried in the past. I could post some of that research, however, it is more detailed and complicated than what should be posted on this forum. I don't know what it is, but the French seem to put out a lot of Geo-statisticians. I have worked with several and most really are on top of their game. Campbell has presented several professional papers as well as a book on this subject as well. Though this Barron's article is almost 2 years old, it is somewhat accurate. The political speculation is a bit hard to digest, but then you hust never know. Stranger things have happened.

An acquaintance of mine has recently concluded a small trade
with Centennial Precious Metals, swapping some of his bullion coins
for pre-1933 coins. Apparently, CPM does this type of transaction
as a matter of course. The coins he received back are exceptionally
nice (I'm not a numismatist, so can't call the grade), some of the
later-date Sovereigns looked nearly uncirculated.

What also made this particularly outstanding was the amount of personal
attention and customer service my friend received (he's a worrier and
something of a pain), even to the point of personal calls from the
proprietor. He tells me that each and everything that CPM said they
would do, they did.

For the record, I do not have any connection with CPM, just an interested
and admiring bystander.

And a most hearty welcome back to our Trail Guide, and thank you
for being.


Wish ORO were here, wish I could 'grasp' it all.

Had anybody today's Frankfurter Allgemeine in his hands?
If so, anything on Gold/GATA?

Source: BridgeNewsAsia Precious Metals Review: Gold firms on Australian buying
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Sept. 4--Buying from Australia supported spot gold in Asia on Monday despite selling from Japan and profit-taking from other Asian Sources, dealers said. Gold is expected to move in a narrow range of U.S. $276.50-$278.50 per ounce later Monday amid the long-weekend in the United States, they said. Spot platinum rose following the strength of the price of the Tokyo Commodity Exchange platinum futures.

Weaker Australian-dollar denominated gold prices triggered buying from Australian sources in the spot market, dealers said. But, profit taking from physical traders later shaved gains and capped the price of gold below $278 during the Asian trading, they said. Dealers see gold meeting strong resistance at $280. The price of silver and palladium hardly moved Monday in Asia, while spot platinum was supported by strong TOCOM platinum prices, dealers said, adding trading of spot platinum remained sluggish. In Japan, end-users remained reluctant to buy platinum in the spot market due to relatively high prices, Japanese traders said. Japanese physical platinum buyers said they had not heard of news about the arrival of Russian 2000 delivery of PGM (platinum group metals) under long-term contract. The delivery is expected to start in September. On the TOCOM, short-covering and fresh buying pushed up platinum futures prices sharply in the afternoon hitting its limit-ups as a slow response to Friday's NYMEX platinum futures rises, TOCOM dealers said. As TOCOM gasoline and kerosene futures hit limit-downs early in the morning, TOCOM inter-day traders retreated from trading of the two futures and joined the platinum futures rally, dealers noted. TOCOM gold fell on profit taking in thin trade, TOCOM dealers said.


Black Blade: Ho Hum. But Pt spiked up sharply, while Pd paper trades continue to languish since the TOCOM and NYMEX manipulation schemes were recently publicly revealed.

IPE Oil: Oct Brent called to open 10-15 cents higher By Jim Washer, BridgeNews London--Sept. 4--IPE October Brent crude futures were called to open up 10-15 cents Monday morning at the start of what is expected to be a quiet day on the London market, brokers said. September gas oil futures had started the day stronger, up $2.00 at $312.00 per tonne in electronic trading. -Overall sentiment for the energy complex remains firm, but the little profit-taking seen late Friday on IPE Brent could encourage a rebound in early trade Monday, one IPE broker said. Trading was expected to be quiet, with the NYMEX closed for the U.S. Labor Day holiday and some players likely to be absent from the London market attending industry events. --Both NYMEX and IPE crude futures had posted modest gains Friday as the market awaited word of whether or not OPEC will raise production at its Sept. 10 meeting in Vienna. The market was also influenced by flattening out of positions ahead of the U.S. Labor Day long weekend. With the NYMEX closing early, the IPE will also shut early at 1700 BST. --The statement issued last week by Saudi Arabia reiterating the kingdom's commitment to a rise in production to cool spiraling oil prices is of "considerable significance" despite its lack of positive impact on oil prices when it was released on Aug. 30, the Middle East Economic Survey said Monday.

-Farmers and truck drivers in France have begun blockading petrol depots and oil refineries in protest against the price of diesel fuel, British Broadcasting Corp. radio reported Monday. The organizers, led by French road haulage federation FNTR, said they would deploy some 2,000 lorries at more than 70 installations around the country.

Black Blade: US Markets are closed for Labor Day. With the continued strength in North Sea Brent oil, there could be significant follow-through on NY Crude tomorrow. A new Goldman Sachs prediction of $40.00+/bbl has been released. The stage for a severe recession is being set.

Meanwhile, Au is up +$0.90 at $276.80, Ag down -$0.02 at $4.93, Pt up now only +$8.00 at $601.00 ($612.00 London AM), and Pd down -$8.00 at $710.00 ($718.00 London AM). The Saudis are trying to talk oil down by hinting at production increases, but there is not much room for increased capacity either in production or refining capacity. Looks as if petroleum is going to come under a lot of pressure with accompanying price spikes. Anyway, I will be off for a few days in the Great White North conferencing with some clients. I will check in periodically and see if are long-lost friends appear ;-)

Sometimes its cheaper to put 10 cents under a fridge to level it than to go out and buy a wedge. I was once asked
in Basic Engineering the question " How strong is a piece of chain " and most said " what a daft question". Some said in essence that depends what carat it is or re: Breaking strain ='s Safety factor X's Safe working load or WWL etc, or I would ask the authorised authority etc etc . . Oops the pass answer ( A piece of chain is only as strong as its weakest link) But re: Oil and energy etc & 10/1 ratio's re: Pt and Pd and Technology dependant country elements and $. What safety factor i.e.( A proportion of the breaking strain ) will it take to expose the truth in the United States newspapers. the Answer US... :)

FOA - Black Blade & ALL - ?Is Sheikh Yamani serious as quoted below or does he represent a smoke screen and a convenient diversion from the real action of new currency settlement arrangements for Oil? I respectfully question his statements, as I hold him in high regard. "S"

Monday September 4 4:21 AM ET
Yamani Says OPEC Accelerating End of the Oil Era

By Richard Mably

LONDON (Reuters) - Saudi Arabia's Sheikh Ahmed Zaki Yamani is in little doubt -- petroleum prices now spiralling out of control will prove a last hoorah for OPEC oil power.

For the former Saudi oil minister, the return to $30 a barrel crude has only hastened the day when the Organization of the Petroleum Exporting Countries will be left staring at untouched fuel reserves, marking the end of the oil era.

``OPEC has a very short memory. It will pay a heavy price for not acting in 1999 to control oil prices. Now it is too late,'' he said in an interview with Reuters.

``The Stone Age came to an end not for a lack of stones and the oil age will end, but not for a lack of oil.''

As Saudi oil minister from 1962 to 1986, Yamani, now 70, was the embodiment of Arab oil power.

The architect of a dramatic upheaval in the world's economic order during the 1970s' oil price explosions, his name became synonymous with OPEC.

The cartel this weekend marks the 40th anniversary of its birth in Baghdad on September 10, 1960. Petroleum ministers meet on Sunday to decide output policy for this winter.

Yamani says it is too late now for OPEC to refill petroleum product tanks in the West where inventories of heating oil are running short for the northern hemisphere's cold months.

``I think prices might go a bit higher this winter but further ahead in 2001 prices will start to come down and longer term it is horrible for OPEC,'' he said.

Technology To Squeeze Opec

Within 20 years, he predicts, technology will have cut deep into demand for transport fuels.

Crude will slump even more heavily than the single-digit prices seen during the last glut, in 1998.

This year's oil price scare will feed rival non-OPEC production, suppress demand and, most damagingly for OPEC, breed new fuel technologies.

He sees hybrid engines for automobiles and hydrogen fuel-cells drastically cutting the consumption of gasoline while big new finds lift crude flows from non-OPEC nations.

``Technology is a real enemy for OPEC. Technology will reduce consumption and increase production from areas outside OPEC.''

``The real victims will be countries like Saudi Arabia with huge reserves which they can do nothing with -- the oil will stay in the ground for ever.''

OPEC, said Yamani, had failed to learn the lessons of the series of gluts and shortages which have marked its turbulent history.

Its leading negotiator during the oil price rises of OPEC's heyday, Yamani says his warnings against pushing crude too high went unheeded.

``I will never forget. It was 1979. I was in Caracas and I said that at this price -- it was $28 a barrel at the time -- OPEC production will drop, OPEC countries will fight each other. I said production has to be raised to lower prices. They said I was crazy.''

While Saudi Arabia, sitting on 100 years of reserves, now favors prices no higher than $25 a barrel, fellow OPEC members remain keen to squeeze their customers for as much short-term revenue as possible.

``There are some members in OPEC who always tried to resist extra production -- like Venezuela, Iran, Libya. In OPEC, from day one that has not changed,'' said Yamani.

Leading Role In Producer Sovereignty

Yamani remains proud of his role in wresting power over petroleum revenues from the oil majors, the assertion of OPEC's central objective -- sovereignty by the exporting countries over their resources.

He cites the Tehran Agreement of February 1971, when the oil companies abandoned their long-standing 50-50 share of revenues to cede the Gulf producers a majority return of 55 percent.

``That was a big step forward for OPEC,'' he said.

And then on October 16, 1973 just days after the start of the Arab-Israeli war, Yamani and five other Gulf OPEC petroleum ministers took charge for the first time of the price of oil.

Unilaterally they lifted posted crude prices, previously set by the oil companies, by 70 percent to over $5 a barrel.

``Prices were now fixed by producers. Now we were masters of our own resources,'' remembers Yamani.

The following day Saudi King Faisal sanctioned the Arab oil embargo to punish the West for its support of Israel.

Within months oil prices had trebled and the industrialized world was tipped into the sort of recession which some economists fear could be repeated again if oil prices do not ease soon.

Carlos The Jackal

Yamani, born in Mecca in 1930, remains a devout Muslim despite daunting personal experience.

He was present in 1975 when an assassin shot his mentor, Saudi King Faisal.

Later that year he was among ministers taken hostage and held to ransom at OPEC headquarters in Vienna by the guerrilla Ilich Ramirez Sanchez, alias Carlos 'the Jackal'.

Taken on flights to Algiers, Tripoli and then back to Algiers Yamani was told that he and the Iranian oil minister irrevocably had been sentenced to death.

``Carlos told me I would die. I was sure I would die. I wrote my will. I was prepared.''

Famed for his softly-spoken negotiating skills, Yamani also was a favorite with the press.

``Often they knew more about OPEC affairs then the ministers they were questioning,'' he said.

http://www.bondweek.com/bw/article.html?NOAUTH=1&SECTION=strat&XP_TABLE=current&XP_RECORD=967828682
September 2000 4, 2000 VOL. XX, NO. 36


TWO U.S. MANAGERS PILE INTO EURO ASSETS.
�Matt Benz & Julie E. Satow

At least two U.S. bond managers are implementing allocation shifts into euro-denominated assets on the view that the beleaguered currency�which was trading below $0.90 last week, down from $1.05 a year ago�is poised to roar back. Officials at Brandywine Asset Management and Waddell & Reed cite Europe's strong growth, and the prospect that the resultant higher interest rates will reverse the currency's stubborn downward spiral, as compelling reasons for dollar-based investors to ramp up their euro-denominated bond exposure.

Brandywine has extended its position in euro-dominated bonds by $330 million and is planning to move another 7% of its $1.1 billion in global fixed income assets to euro-denominated sovereigns and corporates, on the view that the euro is going to strengthen against the greenback.

Since last fall Stephen Smith, high yield portfolio manager, has foreseen the U.S. economy slowing�even as Europe's picks up speed�because of the ballooning U.S. deficit, interest rate hikes and the price rises in oil and low-end goods such as cigarettes. Dollar weakness "could cause capital to flock to Europe," said Smith. Prior to last year, the global bond portfolio was almost entirely hedged into dollars, but the hedges largely have been eliminated. Though the majority of his foray in the European market has been in sovereigns, Smith is cautiously dipping his toe into corporates as well; his first such purchase was $30 million worth of a recent euro-denominated deal from Clear Channel Communications. Brandywine, which is looking for more seven- to 10-year euro telecom paper, especially if spreads go 150 basis points off the 10-year Treasury, is especially keeping its eye on the upcoming deals from British Telecom and Telefonica. It has cut back to zero U.K. issues, and decreased exposure to Swedish, New Zealand and U.S. paper.

WADDELL & REED�S �CURRENCY BET
�

Waddell & Reed recently used cash to purchase $15 million in euro-denominated bonds, on the view that the euro will strengthen as investor attention shifts from the U.S. to brighter economic growth prospects in Europe. Jim Cusser, portfolio manager for some $500 million in fixed-income, says he bought three- and four-year paper from Dutch financial behemoth ING Groep and two American companies, GMAC and IBM, which issued global bonds denominated in euros. "There's no bond bet going on here�and I don't think there's a credit bet�so much as there is a currency bet," he says. Cusser foresees the euro strengthening over the next 6-12 months on rising local demand for European goods, business-friendly tax reform in Germany and a possible end to the European Central Bank's rate hikes. Meanwhile, the U.S. is beginning to see the effects of the Federal Reserve's tightening cycle in indicators such as home purchases, he says. The Overland Park, Kan.-based fund is allocated 50% to corporates, 30% to mortgage-backed securities, 10% to asset-backed securities, 9% to Treasuries and 1% to cash. At 6.19 years, duration is long its benchmark, the 4.81-year Lehman Brothers Aggregate Bond index

Hello there,
According to your latest post it seems some others are starting to hop onto the contrarian bandwaggon - bombed out assets may be best candidates for a turnaround! Though not a great "pile" tet.
How about digging deeper in Goldman's bomb crater and get some real value for your $'s - cb2

CURRENT EVENTS- We may as well have some fun while patiently awaiting more fireworks!
GATA's GDBC says POG is manip. by US & UK via OTC derivatives backed by ESF w\o OK of AG & FED. SOS came from LTCM fiasco & stress to CBs, BBs, IMF, & AU lingers. WA is a jolt to mkts., but GS, JPM, etc. douse the flames. 1\2 of PGMs run anyway as TS hits TF re Pd. on TOCOM & NYMEX, CFTC is MIA re COMEX. OPEC amps the POO in order to buy more yell. met. yet no inflation. The pols get involved as govt. honesty is AWOL. The FIG is no fraud, but the CPI is. They contam the XAU yet the obscure HUI remains pure. The DOW, S&P, NAZ, & US$ soar as planned, while the ECBs & Euro languish. LBMA, under H2O w 2 many IOUs, gets dissed by BIS. BuBa vs. Bubba debuts, UBS, DB, & SNB scramble for physical. POG plummets & the PUDCs w HIV\AIDS are SOL. The GBs are PIAs to USG, claim FAZ articles are WA 2, await >POG ASAP.
Recs for Au HOF IMHO- Midas, Chris, Frank, Reg, Ted B., & TG\FOA.
Recs for Au HOS- FDR, RMN, wjc, BoE, GS, & GFMS.

Hope this clears up any confusion!

AUSPEC [no FOB]

P.S. Ag also.

FUNTASTIC !
<;-)

Thanks again for posting your msg. over at this site - I've just had to respond again - as GTW said FUNTASTIC! Cheers -cb2

This brilliant short essay is not only state of the art, but a compressed, though extensive observation of today's financial markets - leading the underlying economy - or vice versa? - deserves a place in HOF - with some annotations for the less initiated (smile) - so I'd love to "initiate" the first nomination - in the hope to find seconders - cb2

has been talking like this for years. Nothing new here.

Although a Saudi by birth, his primary allegiance now is too oil consumers, not producers. His predictions of the end of the oil age are nothing but propoganda designed to encourage oil producers to push down the price.

BTW, when discussing oil prices people should realize that even at today's $32 oil, many European nations probably receive more in tax revenue from gasoline sales than the oil producers do for the crude used to make that gasoline. When these nations complain about the inflationary impact of "high' oil prices, the stench of hypocrisy becomes almost too strong to bear.

This post has my second for HOF nomination.

I'd just like to add that GLOBL FIN/MON ORDR est FUBAR!

Turnaround. . . .Thanks for the kind words.

We just today introduced here at USAGOLD our European Delivery Program -- a service by which we will be offering gold coins to Euro-based private investors. We believe that USAGOLD/Centennial Precious Metals is the first U.S. based gold firm to overcome the nuances of offering gold in Europe. It took a long time to put the system together, but it is now solidly in place. By co-incidence, it was no more than thirty minutes after putting the final piece in the puzzle that we had our first European gold order. An auger of things to come? That order came from a goodly knight who has occupied his esteemed seat at this table almost from the beginning. Though we come from many backgrounds and countries, we all have one thing in common -- an understanding of the importance of gold, not just for our personal portfolios but in the larger sense as a symbol of our standing as individuals apart from government. We will be bulk-shipping information packets to Brussels next week for futher dissemination to interested gold buyers in Europe, so please go to the "Request Info" link, if you have an interest.

With the ECB making noise about raising interest rates to combat inflation in Euroland, it echoes through the financial sector that rising oil is having its effect. The fact that Europeans must first convert euros to dollars to buy oil exacerbates the currency problem in Europe and sets up situation exploitable by the speculators. I admire Mr. Trichet's comments about speculators trashing the euro undeservedly. Sounds very much, though, like the comments made by leaders in the Tiger countries a few years age when the hedge funds trashed their currencies and economies in the process.

Until central bankers in concert move to throttle the profliferation of derivatives, and the EU in particular moves to cut the dollar out of the middle, they will find their policies, like the positions of gold owners, undermined by traders who can place a position bet at pennies on the dollar. In the case of currency trashing, the implications are wide and deep as we found out in Asia -- and Europe though it has teeth remains vulnerable. In the case of gold, most gold owners can afford to wait out the attacks of the derivative slingers. For Europe, as a nation, it is a different story. Because derivatives' players can take a currency in whatever direction they see fit -- like dogs on the trail of a fox -- they can do extraordinary damage to individual portfolios within the targeted zone -- including, as saw in Asia, tearing the quarry to pieces.

Investors in Europe will find protection, as they have for centuries, in the comfortable confines of gold ownership, and we hope to help with that process.

LeSin. . .Thanks for putting up Sheik Yamani's comments. However, I do not buy his argument. Though fuel cells, and hydrogen based systems are in our future, it will be a long time until oil is driven from the economy -- I would guess at leasat a decade, maybe longer. Just the problem of conversion is a technical problem with a long lead time. Add to that the vested interests of the oil industry working to protect its turf and you have the makings of a long drawn out process. The changes Sheik Yamani envisions are likely to happen but the driving force will not be the price of oil; it will be environmental concerns, and as I've said, I don't see it happening overnight. I do not know what's driving his thinking these days, but it has a surreal quality that I find difficult to bet hard money on. Remember there was much talk of alternative energy after the last oil siege in the 1970s and early 1980s. Little or nothing happened to the point where we come full circle. The San Francisco Examiner today tells us that the Sierra Club will begin a campaign against the SUV -- as a gas guzzling, global warming, air polluting symbol of American excess.

Cavan (St. Louis) Man. . . . I will take the Broncos in the big game later, but I need at least six. Rams are no fluke! Elway picked them late season last year to go all the way, and they did. Bronco's rebuilding. New faces everywhere, though Terrell is ready to play. What's the weather like there today?

http://www.usagold.com/announcement/europeantelegram.htmlPlease e-mail your questions and comments. . . . .

Over here in humidityville the weather is balmy. Actually we've a respite from the 100 in absolute temps combined with high humidity this past week. Our brethren across I70 were not so lucky.

Will you take the wager for (4 points to Broncos)with the prize being a Canadian Silver Dollar?

How about five points and lunch the next time we get together? Don't have any Canadian silver dollars (I don't think). Is Warner healthy?

Auspic=Sharefin?

Good day Black Blade and everyone. I will attempt to briefly address your posted request
for a "religious perspective." I do not wish to upset any poster by my response, but I will
present a biblical perspective to your inquiry. IF you will be offended by religious stuff: PLEASE SCROLL PAST THIS POST!
Black Blade (09/03/00; 23:11:16MT - usagold.com msg#: 35973)
I'm not what you would call religious by any measure (probably due to my extensive
background in the earth sciences perhaps;-)), though I know that there are some religious
folk here, they may be able to compare the necessity of preparation for such events to
Jacob in Egypt and the 7 years of plenty vs. following 7 years of famine. Gold and Silver
are a means to transfer wealth over the great divide, for portfolio insurance, and as the
currency of last resort. Remember the persecuted in WWII and in Kosovo who had gold
as opposed to those who didn't.
-----
You are astute to make the comparison between current global economic conditions with
the events of Joseph (the son of Jacob; Joseph become prime minister of Egypt about
3900 years ago) and Pharaoh. Joseph was able, through God's interpretation of Pharaohs
dream, to give an interpretation to Pharaoh's request for an interpretation of a troubling
dream he had. Pharaoh's court mystics, astrologers, mediums, etc., where unable to
interpret, but The Most High God gave Pharaoh an answer through Joseph. To make the
long story short, Joseph told Pharaoh that the interpretation was that there were to come 7
very prosperous (fat) years followed by 7 very economically horrible (lean) years. As a
result, Pharaoh appointed Joseph to a powerful position with all necessary official
authority given to him for the purpose of preparing for the 7 lean years. The 7 lean years
in the days of Joseph were caused by natural conditions during which crops failed and
famine ruled the day in that area of the world. Joseph had saved Egypt, his family
(Jacob's household) and others from famine and untold suffering. Today, we are
eventually going to face another lean period caused by economic abuses, bubbles and
manipulations. The wise have been preparing and will intensify preparations, especially
as we come closer to the end of our prosperous years, even as Joseph prepared back in
ancient Egypt. Gold is an essential element in that preparation.
Other related Biblical teachings:
Proverbs 27:23 Be diligent to know the state of your flocks, And attend to your herds;
----Which tells us to be diligent in business (and investments) and continually attend to
their status.
1 Timothy 5:8 But if anyone does not provide for his own, and especially for those of his
household, he has denied the faith and is worse than an unbeliever.
----We must provide for our family: both in fat years and lean years. Thus we must make
preparations for lean years during the fat years (as did Joseph). AKA: Buy low, Sell high!
1 Peter 1:7 that the genuineness of your faith, being much more precious than gold that
perishes, though it is tested by fire, may be found to praise, honor, and glory at the
revelation of Jesus Christ,
----Our faith is in God and not in the gold we possess. The gold (and other wise
investments) is a preparation for lean year turmoil and not an end in itself. At least not for
the believer.
I hope that this has cast some religious perspective on your post.

You drive a hard bargain! I would be happy to make the wager; done.

I am hearing that Warner's arm is bothering him. We'll see tonight. Thanks....CM

Peter,

I had the pleasure of seeing a tape of Mr. Browne (is it Harold) speak at the Libertarian convention the other day. I am very impressed with him and will probably vote his way.

It's a bet.

auspec (09/04/00; 08:53:16MT - usagold.com msg#: 35986)
GOLD ECONOMICS- ABBREVIATED VERSION
====
The Hobbits are happy to provide the 2nd Second !
ANYone for the Required 3rd Second ?
---
<;-)

http://www.hubbertpeak.com/campbell/commons.htmSomething to add to the oil thoughts.

http://www.hubbertpeak.com/campbell/commons.htm

Presentation to a House of Commons All-Party Committee
on July 7th 1999
THE IMMINENT PEAK OF WORLD OIL PRODUCTION

by
C.J. Campbell

The HOF nomination in question is also located on kitco authored by Sharefin. Either they are one and the same or one has borrowed the others work. HOF verification is in order. What says the author?

To Steve H- The author of this article is me, AUSPEC. The article was posted on this forum as well as LeMetropole Cafe. Unaware of Kitco posting and doubt there are 2 tangled minds that simultaneously thought up this piece. Am honored to possibly be nominated to HOF by my CHOSEN peers, thank you.
AUSPEC

I read with interest FOA's latest and
noted his comments on the "paper market"
in AU.

"If the gold market was to shift to say, 5 day hard
delivery, how could one trade their contracts for gold?
Yes, you guessed it, paper would trade all right,,,,,
at a huge discount."

And why would paper trade at a huge discount? If the
last few years are any indication, a non-performing
contract could simply be rolled over by way of a commonly
used clause in gold leases. We didn't see paper trade
at a huge discount during last fall's spike up. What
we saw was an increase in leasing, probably due in
large part to rollovers. And as long as the world's
reserve currency, the vaunted US$, remains stable, what
better way to inject liquidity into the paper trade?

And this, "...what counter party on the other side of
your contract could deliver?" This is exactly what's
occurred in palladium, but what happens? The price is
frozen, volume vanishes, and the market adjusts to
palladiums absence. Would not the market adjust to
gold's absence, and instead, trade on dollars and yen
and euros? Is this not the history of money?

And here's one that just doesn't jibe, "More and more
investors pay a larger escalating premium to get physical
"now"." All this year, I've been finding incredible deals
on French, Swiss, and English bullion coins, among others,
that are available for only 5% above spot. Very fine grade
coins minted in the 1800's, some of them. I've NEVER seen
such deals as I have this year. And everything I see in
the AU market indicates investors have been selling
off their bullion more than they've been buying.

Paper gold reflects the "real thing". The real thing is
being unceremoniously dumped into the marketplace by CBs,
who rightly or wrongly, no longer value it as they once did.
The key to gold is not oil. The key to gold is the world's
reserve currency, the US$, and the opportunities it presents
for usurious profits, such profits that are mimicked by the
paper market in gold. Someday, who knows when, the US$ will be devalued. And then gold will soar...

"What will make this "modern gold market evaporate"?"

Devaluation.

************************************************************
Salaam.

Was out of town (Highland Games) for the weekend and didn't get a chance to respond to these questions by Journeyman:

< true (convertible) gold standard?

QUESTION 2: What WOULD happen?>>

My simple answer for 1.:
We have to look back at the "Barter" system to answer this, and use a little math.Using "barter", prices should reflect "TRUE" supply and demand.Here's what I come up with pricing crude oil in Gold:
If we divide $275 per ounce Gold by $30 per barrel oil we come up with 9.167 barrels of crude oil for an ounce of Gold.
Lets make the math easier:
If Gold is about $311 per ounce and crude oil is about $31.10 per barrel we would get about 10 barrels of crude oil for an ounce of Gold.
Now lets price "things" in Gold! Most of the world uses the easier metric system, so instead of using infinitesimal small fractions of an ounce of Gold, lets switch amounts of Gold to grams.
One ounce of Gold = 31.103 grams.(We could use "grains"( 1 ounce Gold = 480 grains{Troy Wt.} , but nobody I know uses this measurement either)
So using the above, 10 barrels of crude oil now costs 31.103 grams of Gold, one barrel of oil(55 gallons?) would cost about 3.1103 grams of Gold(or $31.10).One gallon of crude oil would cost .0565509 of a gram of Gold(or .57 cents).

Lets break it down further:
If one barrel of oil equals 55 gallons(?? U.S. measurement)how much Gold will it take to buy refined gasoline at the pump?
I'm going to use a 3 to 1 ratio because in the U.S. about 1/4 of the cost, at the pump, is taxes. 3 times .0565509 = .1696527 of a gram of Gold.(or about $1.70 per gallon)

The ratio of Gold for stuff wouldn't(hasn't in the 5000 year history of using Gold for money)change dramatically until either the "stuff" or Gold becomes over abundent or scarse.

Question 2. What would happen?
Well IMHO, as the supply of oil worldwide decreases over a long period of time( Thank You Black Blade)the cost(oil for Gold)of the oil would increase "UNTIL" an equilibrium is reached, making hydrogen powered engines more economical than gas and diesel.( I think the process has already been developed to run vehicles directly on altered hydrogen gas derived from water) Than as the "cost" of production of hydrogen fuel from water decreases(big rush to be first) the "price"(Gold)would stabilize the entire worlds economies along with unlimited, clean burning, hydrogen fuel.(Also if We the People can retake control of Government expenditures.....IN GOLD!!!)

From John Lennon's "Imagine":
"You may call me a dreamer, but I'm not the only one, I hope someday you'll join us,and the world can be one.(At Peace)
Thanks for Reading.....beesting.

Genesis 47:15-26Thanks for the information about Joseph. You left out one really interesting fact about the story. When the Egyptians' money failed (was all spent)later in the famine, the Egyptians sold their cattle to the government. The government fed them. The following year the Egyptians sold their land to the government and offered themselves as servants. A deal was worked out for the government to own the land and the people to work it. Egyptian citizens would receive four-fifths of their harvest and the government would claim one-fifth. The people, for temporary safety, gave up claim to their own land forever.

http://www.usagold.com
Real money is not Federal Reservem Notes. And real money is not Gold either!!!

As anyone in any prison in these United States knows real money is cigarettes!!!

Now, when I quit smoking in 1978 cigarettes were .50 Cents a pack. They are now $2.60 a pack and thats if you buy them discount in cartons.

Therefore anyone can obviously see that the oveerall rate of inflation since 1978 is 500%+.


Cigarettes,real money, get you some.

Your words--

The key to gold is the world's reserve currency, the US$ [...] Someday, who knows when, the US$ will be devalued. And then gold will soar...

"What will make this "modern gold market evaporate"?"

Devaluation.
--------------------------------------------------------

Please pardon my interjection during your dialog with FOA, but I find this all to be far too fascinating a subject matter to sit idly by on the sidelines.

Could I possibly encourage you to share your thoughts regarding the following?

Please consider what it is that underlies this fiduciary media we call the dollar, and then accordingly, how is it that the fiduciary dollars will be "devalued" against this same underlying element--whatever it is?

This question must be addressed before moving on to the next, or this exercise is meaningless.
.
.
.

OK, having given thought to that matter, does it not now strike you as more conceivable that it will not be dollars but rather the "devaluation" of fiduciary Gold contracts in all shapes and forms against the underlying Gold asset that will bring about "a new reality" in the Gold market?

The dollar need not fail as a prerequisite for Gold to leap to a new valuation (in terms of goods and currencies, dollar included) coming as a result of the paper Gold falling into discredit; but just the same, under such an event the dollar itself would have lost its last supporting leg in the international arena, and would subsequently plunge even further against the rising physical Gold valuation.

Gold. Get you some. ---Aristotle

Aristotle, I am not in disagreement with you but I wish to make a point. For the current price discovery mechanism for POG to fail, someone(s) must step forward and take delivery; there must be massive buying. I mean "massive"! Am I right?

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he
wrote:

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho�'��e�

Hi Cavan Man.

I think it may be even easier than the manner you suggest.

Try to imagine the impact on price discovery, and consequential credibility of those prices, if the would-be buyers of these paper positions simply walked away.

Gold. Get you some. ---Aristotle

http://www.sharelynx.net/Markets/Master.htmLet me say that your guess is way off.
I read the post here and enjoyed it immensely.
Couldn't resist posting it back at Kitco.

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he
wrote:

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho���.���GET /orgs/dgh/now_an1.gif HTTP/1.0
Host: www.dghems.org
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Accept-Encoding: gzip, deflate
User-Agent: Mozilla/4.0 (compatible; MSIE 5.0; AOL 5.0; Windows 98; DigExt)
Via: HTTP/1.1 db[AC121F88] (Traffic-Server/3.0.9 [uScMs f p eN:t cCMi p s ])

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Although miles of cyberspace may lie between us, it looks like we are close enough to shake hands. The pleasure is mine.

Gold. Get you some. ---Aristotle

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he
wrote:

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho/2psWu�sQ�GET /business/cpm/gildedopinion/crowdsandgold.html HTTP/1.0
Host: www.usagold.com
Accept: image/gif, image/x-xbitmap, image/jpeg, image/pjpeg, */*
Referer: http://www.sharelynx.net/Markets/RecentArticles.htm
Accept-Language: en-us
Accept-Encoding: gzip, deflate
User-Agent: Mozilla/4.0 (compatible; MSIE 5.0; AOL 5.0; Windows 95; DigExt)
Via: HTTP/1.1 df[AC12208C] (Traffic-Server/3.0.9 [uScMs f p eN:t cCMi p s ])

pe

Leigh, I have wanted to thank you for the warm welcome you had extended to me when I first began posting at USA. It was not overlooked and is greatly appreciated. Thank you.
In regards to your: (09/04/00; 15:37:41MT) post, you are absolutely correct. However, it sounds so much like 19.99% credit card debt that I hesitate to make that obvious connection, although one could. The government of Egypt, under Pharaoh's rule and Joseph's guidance, did in fact grab up virtually everything for a song and a seed (the excess food stored during the 7 fat years). Of course, all belongs to the Lord, but it seems that again He will permit all to be grasped by the beast (i.e., the NWO thingy this time around). The ungodly world system will be permitted to prevail and the time will come shortly when the people will exchange their remaining freedoms and rights for a few crumbs to feed upon and restoration of civil chaos. But first things must begin to unravel. Perhaps as the USD hits the skids, the Chinese flex their military muscles, the MidEast erupts and the Euro regains stature and takes gold higher as it rallies, perhaps, just perhaps the scenario will begin to burst full bloom on the world scene. It seems that Solomon was correct when he said "There is nothing new under the sun."
GOT GOLD?....Go Gold!!!...

Why would they walk away? If the discovery market is populated by sellers and buyers who, for the most part, have no intention of taking possession, why wouldn't they be content with "business as usual". Further, if gold market traders are content with the paper game to settle their "bets", won't it take a large BELIEVER(s) in the metal to create a marketplace more to their liking? If not, why not?

Signed,

An enquiring mind

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he
wrote:

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho`�x����fcfc
�8�� ' s/dhpd/images/atmu/33.jpg HTTP/1.1
Accept: */*
Referer: http://www.denverems.org/

Leigh, you said,

"...Egyptians sold their land to the government and offered themselves as servants. A deal was worked out for the government to own the land and the people to work it. Egyptian citizens would receive four-fifths of their harvest and the government would claim one-fifth. The people, for temporary safety, gave up claim to their own land forever."


HBM comments:

A few months back while I was reading the account of Joseph and the Egyptian famine I made a mental note about it as follows:

'This was the first historical account of agricultural sharecropping. As you, Leigh, have noted the sharecroppers kept 80% of the produce.'

My grandfather was a sharecroper and I have always been interested as to how the arrangement works. My understanding is that, though sharecropping no longer goes on where I live it is not unlike a farmer renting land and paying the landowner in a couple of ways. One common way is to pay the owner with 1/3 of the crop. The other is cash rent up front. Cash rent up front would run less than an expected 1/3 of the crop because the entire risk goes to the renter in a "cash rent up front" agreement.

I know this seems a trivial subject but I did want to point out that compared to our situation today, it seems that the sharecroppers in Egypt were not quite so oppressed percentage-wise, paying only 20% as opposed to 33%.

Also the gold which an astute one places in hand today may very well put him in a position to acquire land from those who thumb their noses at "gold bugs", and to become the landlord of the future. No doubt there is going to be an enormous transfer of wealth when the coming liquidation of debt comes to pass.

HBM

PS: From your insight we have a good example of the fact that if you have no property you are a slave, ie. you have no other way to earn food and shelter than to hire out your physical mind and body. 'if one does not have enough of the physical stuff he may run out of it during the liquidation and end up as a slave with no other choice but that of selling himself into slavery just to eat.

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he
wrote:

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally dishog,(ge/p�Z���Accept-Encoding: gzip
Accept-Language: en
Accept-Charset: iso-8859-1,*,utf-8

set:
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M�]��߰ 9޸GET /business/cpm/logohorizon.jpeg HTTP/1.0
Referer: http://www.usagold.com/cpmforum/
Connection: Keep-Alive
User-Agent: Mozilla/4.72 [en] (Win95; U)
Host: www.usagold.com
Accept: image/gif, image/x-xbitmap, image/jpeg, image/pjpeg, image/png
Accept-Encoding: gzip
Accept-Language: en
Accept-Charset: iso-88

Sheesh!!! Sorry -- had some kind of glitch. I didn't know anything got thru cause I couldn't read the forum after I tried to post!! Some sort of problem with leading spaces on successive lines again, I think. Anyway, here's the message I've been cluttering up the forum with for most of the day:

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he
wrote:

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally dishonest
attempt to obscure what is being inflated. *As the
Austrian economists argue convincingly, rising prices
are a symptom of inflation, not the malaise itself.
Follow the money (supply)!! *... I remember that the
economists were in the process of inventing another
fake form of inflation while I was in college: oil
shock inflation! ... THERE IS NO INFLATION WITHOUT AN
INCREASE IN THE MONEY SUPPLY! -Marius (09/02/00;
21:47:34MT - usagold.com msg#: 35900

JMB also nailed it:

Q 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold
standard?....hmmm, the extra money spent on energy
would take away from expenditures on hot dogs and what
have you, no? -JMB (09/02/00; 23:26:46MT - usagold.com
msg#: 35905

As did Shermag:

Inflation, otherwise defined as a general rise in
prices, would not occur, as there would be a
corresponding price decline of other goods. Sort of
like saying the same amount of money now chasing some
goods (energy) more than others. -Shermag (09/03/00;
13:16:53MT - usagold.com msg#: 35936

Shermag nailed QUESTION 2 as well.

Interesting response from Black Blade!

Sorry if I missed anyone.

I would simply say that without an increase in the money (gold)
supply -- and no counterfeiting of REDEEMABLE IN GOLD ON DEMAND
paper gold certificates without gold to back them allowed -- a
_general_ price inflation simply can't happen. In this
situation, any increase in energy prices simply MUST come out of
other parts of "the economy" (yea, like hotdogs for example) as
reduced sales or lower prices. Of course, increased productivity
could soften the blow in some sectors.

Now before someone out there claims, "It is in just such a
situation as this that we need 'flexible' fiat," keep in mind
that ultimately what "money" is allocating is human hours. It
could be current hours, saved-up hours, or promised (debt) hours.

Even in a robotized industry, it is ultimately the human hours of
the maintenence workers, programmers -- and past hours of
investors and founders in the case of capital equipment. But
there are only so many _current_ human hours available. And no
derivatives can increase the supply of these. Thus _something
else_ has to give.

Valuing human hours is highly complex, depending as they do on
buyers in dynamic markets, etc., etc., etc. --- and that's why we
use "money." None the less, it is hours allocated, and you can't
have something for nothing. Therefore, even if you increase the
money supply to accomodate increased oil prices, unless you
believe in Santa Claus, _someone_ eats it.

If you're solidly in the _classical_ gold free-banking system (or
other relatively stable) money supply situation, the lower-price,
fewer-sales chips fall where "the market" determines. That is,
what people decide they can no longer afford is what the
"invisible hand" plucks from the economic vine.

If the bankers increase the "flexible fiat" money supply on the
other hand, those who get to "spend" the money first (i.e. the
bankers and their government cronies and borrowers) get to spend
"uninflated" currency while everyone else's "stored hour" value,
stored in that currency, deteriorates as the supply is diluted by
that first spending.

T.A.N.S.T.A.A.F.L.

Regards,
Journeyman

Glad to see the 'futures' and the 'paper game' is STILL in great debate.

Let's work this out backwards.

What do I want to see? Gold at $5,000 CDN/oz. (I just picked a number). At current CDN/US currency levels, that's about $3,000 US/oz.

Now we know that gold is gold and bread is bread and gold can buy cheeseburgers and a fine suit. Gold is relative so I do not believe it's inherent value to rise. If gold's value were to rise enough to buy 2 suits that would be a very,very good thing. However I believe it to be more probable that the currency would drop. It is the money that is inflated.

Oil is fetching a high price because of high demand, gold is near a low because of low demand, it really is that simple. CB's are selling and leasing and if you read the first line of the W.A. it states that the 15 member European consortium is limiting sales to 400 tonnes/yr. They are selling gold. New mine production ADDS to this supply consequently supply meets and/or exceeds demand. The CONFIDENCE that supply will meet and/or exceed demand allows the 'paper' boys to short the snot out of gold.

When and if this reverses the paper crowd WILL 'walk away'.
When there is a foreseeable supply/demand deficit anyone caught short will pay dearly because at 5,000 tonnes short as per GFMS or 10,000 tonnes short as per R.Howe or 14,000 tonnes short as per GATA the price of gold will skyrocket.
This I believe to be the essence of this 'paper market' blow-up.

But, the paper blow-up WILL be a ramification or an aftermath of the cause. If you have ever mined, dynamite needs a blasting cap to ignite. You can throw a sack of dynamite down an ore pass and watch it bounce all the way down without an explosion.

Continuing the 'backwardization' of this story, what will be the blasting cap of gold to set off the dynamite. It may be the reversal or at least the perception of, in the supply and demand statistics. It may be the fall of the dollar, $600 'equilibrium' price of gold will definitely set off the dynamite paper markets. An oil catastrophy this winter could set off some fireworks. The stock market may play into our hands as well; there have been numerous earnings warnings, another April crash could do it. Tensions in several regions of the world sparking war may be the fuse. In short, a trigger causing the 'cap' to explode will in turn light the dynamite.

My bet is a falling US dollar. The insatiable US consumer borrowing and buying binge will soon fall. The CONFIDENCE in the US dollar is hinged on the fact that they will buy and buy until every dollar is spent. US imports foster foreign economies and when this slows or stops the CONFIDENCE will fade. Dollars are handed out (money supply) so buy, buy, buy. If you hand kids money to go into the candy store do they come back with change? Never!! So when foreigners perceive the dilution of the buck or a slowdown in imports or a slowdown of economic activity the confidence in America will be questioned. Dollars will be sent home further diluting (too much paper) the currency and we know a lower dollar will cause higher gold. The turmoil conceived from this will cause the nervous nellies in the paper world to cover. The explosion in the paper market (first caused by the 'dollar blasting cap') will send gold to the moon. The resultant higher demand and possible CB withdrawal will further escalate the POG.

Result: The price of gold = $11,100US/oz. (+,- 99%)
When: Jan.15, 2001. (+,- many moons)

Note: This is a dream that occured to me last night so actual occurences as above would be co-incidental.

Thanks for your responses directed towards me this past weekend. It was very kind of you all.

And there's the euro/dollar 'fuse'

From another site,

"Thank you ... my gut feel is that one morning we will wake to see gold limit up in London, as a result of a news release from the European Central banks. Coming in to NY, there will be panic in the "Street(s)".

In keeping w/ my prior analogy, one might say the European CB's have a wire cutters and events are forcing them to use it.

The shorts will be crushed."

http://search.ft.com/search/multi/globalarchive.jsp?docId=000822003112&query=ltcm&resultsShown=20&resultsToRequest=100For Fair Use

FINANCIAL POST: MERIWETHER SAYS HE'S SORRY FOR LTCM COLLAPSE
Financial Post - Canada, Aug 22, 2000, 457 words

GREENWICH, Conn. - John Meriwether has apologized for the collapse two years ago of his hedge fund, Long-Term Capital Management, which sent financial markets around the world into a panic, the Wall Street Journal and the Financial Times reported.

"Our whole approach was fundamentally flawed," Meriwether told the Journal. "I feel enormous remorse."

Mr. Meriwether's fund lost US$4 billion after a debt default by Russia in 1998 prompted investors to shun corporate and mortgage-backed bonds and buy less risky, more-easily traded government securities. Fourteen securities firms and banks organized a US$3.6 billion bailout in September of that year to avert the turmoil a forced sale of LTCM's investments would have caused.

Mr. Meriwether, 52, said LTCM's investing strategy -- bets that relationships between the prices of similar securities would return to historical norms -- was sound. What the firm failed to anticipate was investor behavior during a financial panic.

"It worked well in normal times but in the crisis . . . we were left with much more risk than we expected and we didn't have the capital to support those risks," Meriwether's chief deputy, Eric Rosenfeld, told the Financial Times.

LTCM's investments included bets on Danish mortgage bonds, takeover stocks and junk bonds. Mr. Meriwether's losses were magnified because the wagers were made using borrowed money -- as much as US$50 for each US$1 of the firm's cash.

"We believed that diversity meant safety," Mr. Meriwether told the Journal. "Although high leverage doesn't necessarily mean too much risk, we did have too much leverage," he said. "The possibility of losing that much money was not part of our mind-set."

The General Accounting Office, the investigative arm of the U.S. Congress, said in a November report that the Federal Reserve system, the Securities and Exchange Commission and other U.S. financial regulators didn't adequately coordinate to identify risks that led to LTCM's problems. It said the firm's failure to follow "sound risk management practices" may have been due to "overreliance on the reputations of LTCM's principals."

"His shortcoming was that he was his own boss, unlike most other traders who are held accountable for their actions," said Joseph Pregiato, co-head of institutional fixed-income sales at Josephthal & Co." It was fortunate for him that he didn't have a boss to answer to, but unfortunate for the investors."

Mr. Meriwether formed LTCM in 1993 after losing his job as vice chairman of Salomon Brothers. He was joined by some of his top proteges from the firm as well as by Nobel Prize award winners Robert Merton and Myron Scholes. They initially raised a US$2-billion fund and, in some years, generated returns of more than 40%.

The executives lost US$1.9-billion when the fund collapsed. Mr. Meriwether lost more than 90% of his net worth of more than US$150- million, the Journal said, citing people close to the matter.

LTCM has paid back all the money it owed the firms. It made private apologies to investors, including UBS AG, which lost almost US$690 million through its work with Mr. Meriwether's firm, the FT said.

Mr. Meriwether now has a new fund -- JWM Partners. The firm had about US$400 million of assets, as of July, and returned 7% in the first half of the year, people familiar with the performance said.

All Material Subject to Copyright

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

Hello Law,

Your post:

------law (09/03/00; 22:12:07MT - usagold.com msg#: 35970)
Trail Guide: Questions concerning your recent posts! First of all, a very WELCOME BACK...it appears you had a most fruitful and enjoyable sojourn.
I too, have had a very busy summer and have not had the available time to continue my previous and consummate lurking and occasional posting...but I'm trying to catch up with the thoughtful and intelligent commentary of the many wonderful posters who frequent here.

My Questions:(08/20/00 msg#30)
You stated, "If this continues further, and now with the blessing of Europe, it's the paper longs that may be had as the shorts are let off the hook as the market is destroyed!"

After having read Howe's excellent commentary and also Murphy's, is it your implication thatDeustch Bank is absorbing the derivatives in order to prevent Euro "bleeding" or is there another context to this statement?
-------------

Mr. Law, I fully well believe all the following:

That the Euro and EuroLand's thrust is to have gold compliment that currency in a future context. Buried deep in the trading habits of our ECBs largest bank members are many gold derivatives that were expressly created for Euro cash settlement,,,,,if,,,, and only if the ECB/BIS make good on a
FreeGold based value for gold.

We must understand that the Euro is not bleeding, it is marking time as the markets evolve from political will. My friend, Euro value is a very movable item. Just as oil was worth only $10 heading to $6,,,, and now has been politically placed at $30 heading to $50+,,,,,,,, so too will the Euro be "politically placed".

Further: I think the portion of Deustch's position that is not correlated to FreeGold has no general liability beyond a failing paper gold market. If this world wide arena is inflated into oblivion and politically settled at say $50??,,,,, who is going to hurt? Yes, the very players that were trying to leverage against the odds that Paper gold would keep the dollar going and oil priced in dollars only.
Truly, if our modern paper gold price only went to $400 or $500 that move would maintain the integrity of all the gold industry, save the paper markets at the expense of many big banks,,,,, and save the dollar for another day.

That is not going to happen! We are on the road to super high priced physical gold at the expense of the dollar,,,,, at the expense of the entire way our modern gold market is valued,,,,, and at the expense of the dollar banking system that maintains that market. In the process we will find out that """your wealth, it not what your dollar say it is"""!

Your post:

--Also: (09/03/00 msg#34) Concerning the "two ways (or a combination of both):"..."one or two government and /or private entities to pull the cord"...or..."The price of oil rises until price inflation can no longer be contained."

In the first way: Who would have the INTESTINAL FORTITUDE! IN THE "OPEN"! To
"pull the cord"???-------


Well Sir Law, anyone that begins to perceive that holding official dollar reserves makes no sense in a two currency world. Especially where the dollar maker,,,,USA,,,, is forever running a trade deficit. Indeed, why hold dollars when so many more are always coming your way? Most
especially today (amd this is the major kicker),,,, if oil is going to punch the dollar deficit through the roof at $40,,,,, how can we soak up the flood that's coming with $50 oil?

Truly, rising oil will bring the bid for physical gold and Euros and it will be a worldwide based demand. It will "initially" have nothing to do with perceived (by officials outside)US price inflation and everything to do with our ongoing US dollar inflation. Watch oil,,, it builds INTESTINAL FORTITUDE!

Your post:

---In the second way: Will the oil producers be able to withstand the political pressure that will undoubtedly be placed on them?------

My good man,,,, the pressure is on the US to maintain world dollar oil settlement! The existence of the Euro is the Master Play on this chess board! Please dig through my last posts.

Thanks
Trail Guide

http://www.usagold.com/announcement/europeantelegram.html
Great Job, USAGOLD!
I'm sure CPM is the first.

You know, a "great horse" is always running for the finish line while the "near great" stay in the pack. Just trying to catch the ones in front of them!

And indeed, just like riding gold, smart people will stay with a winner.


USAGOLD (09/04/00; 11:30:26MT - usagold.com msg#: 35993)
Here's the link for details on the European Delivery Program
http://www.usagold.com/announcement/europeantelegram.html
Please e-mail your questions and comments. . . . .

Your friend
Trail Guide

And, I add, great timing! (smile)

Since I noticed that StradMaster offered a link to a live stream of his concert yesterday, I would like to report on the real thing from the perspective of one (myself) who was in the audience: The concert was a great success on every level... from the golden tones of his Stradivarius to the warm reception accorded the performances. Our collegue should be congratulated and future performances anticipated with pleasure.

Trail Guide:

May I add my voice to the chorus that has welcomed your return. It seemed like a very long summer without your posts.

From the tone and content of your most recent writings, it feels like the boredom may soon be a thing of the past? One minor question: Is the term "Freegold" one that you and/or Another have coined (pun noted) to denominate the new system, or is it one that is already being used by future participants in the new system and others who have occasion to speak/write of such things?

Welcome back!

Your "Questions" were not only enjoyable they were most worthwhile. Thank you, keep them coming.
[Ultimately, "money" allocates human hours.] That concept is worth the price of admission and I sincerely hope that I have rephrased it properly. If not, do not hesitate to "nail" me.

Something strange going on tonight . I just received this e-mail from Bill Murphy. Then again who can be sure ? I did received the first one also.
Hang in there Bill.

$hifty

```````````````````````````````````````````````````````````



Le Metropole Members,

Good Lord. I worked a good bit of Labor Day Weekend and am now conronted with this email that was supposed to be from me but I did not let it out or said anything of the kind.

This does SUCK - and that is a "quote." I spent much of my Labor Day Holiday weekend speaking with Frank Veneroso. He has not published any material in months because he has learned that GATA's accusuations and suppositions are basically correct. He will not talk about the gold market any more because he has learned a great deal that confirms almost all of what GATA has to say and he fears if he stays too close to us that he will be killed.

This sounds like Looney Toones. But, what after what just happened tonite, I am fearful for my life too and have to get what I know out there. Who cares about being a dead martyr?

I want to enjoy my life, don't you?

This is getting too close for comfort. How do YOU like to be a part of this? Rooting for a TV character is one thing, living it is another. That, I can assure you!

SOME HOW and SOME WAY some internet freak and part of the "gold cabal" put out the following in some kind of internt technique. It was not me. This is horrible, behond words that I can express in this venue.
Ske a Tail Feather out there. Buy gold shares- physical
gold - wake up - stop being embarrased to talk to friends
about gold investments.

The Phantom email said:

Tis the time to:......... Say it Loud, GATA is RIGHT and I am Proud, but who cares about GATA, I will make a fortune by investing in gold now and in gold shares.

This is Bill Murphy agreeing and talking. Hound me forever if the "Say it Loud" crowd is wrong. The proof is in the pudding. HOUND ME.

The deal is so much different as this pathetic American investment scene unfolds. Then, it will be what should gold stock should we go to - as in Bob Bishop of noted gold stock
FAME.

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

I see that Crude is up tonight +$0.43 to $33.81/bbl, pushing toward $40.00/bbl. Heating oil is also higher on supply concerns. Also Pt is now over $11.00 to $604.00, possibly headed to another limit-up session in Tokyo. Just dropped in for a quick peek while on the road. Spending the night and tomorrow in Spokane, WA., then to Vancouver, CA., and finish up in Salt Lake City, UT. Looks like maybe this week could be interesting in the markets. We shall see. A friend of mine that works for a small independent oil and gas producer in Alberta tells me that after the last couple of years of depression and concern in his corporate office, the mood is very upbeat and that the consensus is that business is going to be much better going forward. BTW, had a meal at a restaurant called "Chapter 11", I hope that was just a fluke ;-) View Yesterday's Discussion.

Thanks so much, PH, for the public acknowlegement!! Much appreciated. Hope others here got to hear the concert, as well. I'm certainly very curious if the internet link worked or not.

Trail Guide, you write: "Truly, rising oil will bring the bid for physical gold and Euros and it will be a worldwide based demand. It will "initially" have nothing to do with perceived (by officials outside)US price inflation and everything to do with our ongoing US dollar inflation." It certainly seems like your astute predictions are starting to come to pass. Do you have any thoughts on the societal impact of the monumental changes you describe? I know that's probably not your field of interest, but still you must have some inkling of what the world might look like a few bends down the trail. Any comment would be most appreciated.

PS: It is wonderful to have you back and to be reading you once again. Makes me feel like I have an inside / ringside seat, watching as one of the most important events in modern history unfolds. Thanks so much for your ongoing commentary.

http://finance.yahoo.com/m2?uLots of red ink in Asia/Pacific markets tonight!
$hifty

Hello, Strad Master. I tried to listen to your performance on my Real Player. Was able to link up to the radio station, but no sound came through. Can't explain the problem. Sorry,I was unable to listen. Took violin lessons in 4th grade on an inherited old Kopf. I was awful. I was really looking forward to hearing a master making a Stradivarius sing!

Hello, Trail Guide. Thanks for the heads up! I'll be scanning the news for clues this week. I don't imagine the American press will be giving anything away in the headlines.

Thoroughly enjoying the news and discussions here.
simply me

Cavan Man, you make an excellent point. In offering the view that if this market were populated by participants operating with full awareness that the market positions had no obligation for physical settlement--even if for no other reason than the participants' own agreements to enter and exit their positions with cash settlement (like betting on the Super Bowl)--you suggest that the participants would be inclined to carry onward with "business as usual," caring not a whit for the underlying disassociation of metal realities as compared with the pricing "realities" that they "define" (or "discover") themselves through their own paper trading arena.

(OK, let me stand back and try to absorb what I've just written. It's horribly constructed, but the best I could do in one breath.)

Perhaps the key here is for us to take a very close look at what "business as usual" is, exactly. In consideration of this, you suggested ----"if gold market traders are content with the paper game to settle their "bets", won't it take a large BELIEVER(s) in the metal to create a marketplace more to their liking? If not, why not?"----

Part of our assessment of "business as usual" would require that we understand the motivations that drive each the buying side and the selling side to place their bets in the first place--assuming, per your request, that they they harbor no notions that metallic settlement will be sought or attempted, irregardless of its impossibility.

Obviously, the typical to large player who seeks Gold does it directly and for immediate delivery through the likes of our host here at USAGOLD, whereas the really big players capable of moving markets would likely make less direct arrangements. In neither typical case is the acquisition of Gold pursued through the futures market. Now if we pause here for a minute, doesn't it strike us as odd that the some of the futures players are seemingly placing leveraged bets to profit based on whether this metallic demand driving prices higher or lower--and yet it is their placement of bets (and the subsequent trading thereof) that currently dictates this price level under speculation? With futures operating under such an unattached-to-physical-settlement / business-as-usual sentiment, we can maybe agree on two things--
1.) that the trading action of these futures is driven by the traders' own expectations of futures price movement and has nothing to do with the quantity of physical Gold movement occuring concurrently and as a result in the "real world," and
2.) because traders are seeking leveraged profits with their margin money based on the price movements of these futures contracts, the actual price LEVEL is irrelevant to them--except that at lower prices, the same small price swing translates into a higher percentage payout versus the number of contract positions that could be held against any fixed quantity of margin money with which to participate in the speculation.

Due to its universal acceptibility and stability, Gold functions as nearly the ultimate end in the pursuit of wealth, whereas dollars are only the transitionary means as a "necessary evil" toward gaining these ends--and "big/smart/old money" knows this. They are not likely to pass up gaining Gold at these prices in favor of paying up the margin on a host of contracts. We could say that these physical buyers have already "walked away" from the futures markets.

So who's left as the participants in the paper market providing this currently accepted method of price discovery, and what are their motivations? In light of the big picture, the participating longs are relatively and collectively a "babe in the woods" against those willing and motivated to participate as shorts in this environment. Beyond the selection of industrial or institutional longs that likely have legitimate interest in short term price hedgeing, the balance of the longs would be an assortment of uninitiated Goldbugs not particulary well-versed in monetary history who are unwisely throwing themselves on the mercy of a market meant to serve a purpose other than to provide for their enrichment through rising Gold prices. On the contrary, these paper-Gold markets were instrumental in propping up the valuation of the dollar at the expense of Gold when convertibility failed finally in 1971. Just consider this--the dollar convertibility didn't fail because big players were clamoring for ways to turn their dollar holdings into yet more dollars; they were pressuring to absorb any available Gold as preferable to holding dollars due to the ongoing U.S. trade deficit and swelling Eurodollar accounts. Some of the biggest players are still holding the bag, and it would be only the naive and uninitiated who might believe Gold has fallen out of favor while the dollar has somehow been miraculously cured of its ills in spite of the last 30 years of swelling trade deficits.

As the remaining naive long participants come up to speed, they too will see themselves to have been duly distracted and chasing goals that never could fulfill the goals of building wealth, leading them in turn to walk away from attempting to buy Gold's price (derivative), and to focus on buying Gold's weath (metal).

As for a "large BELIEVER" that you mention, any among a number of central banks that have been stuck with large dollar holdings (and very little hope of converting them for anything of value) will fit your description. While the illusion of the value of their dollar holdings will surely be lost in any attempt to dishoard their dollar accounts, their goal must necessarily now focus on allowing an appreciation of their current Gold assets to compensate them for their lost value that the dollar policy has handed them over the decades.

Gold. Get you some. ---Aristotle

Dec gold , breakout points
282 284 289

Commodities set to move higher, gold will respond.

http:www.kitcomm.com/cgi-bin/comments/gold/display_short.cgiI'm surprised no one has remarked on Caper's article from last night:

Caper (Makin Da Switch) ID#277242:
Riyadh set to switch to euro
Riyadh (Reuters) - Saudi Arabia has issued a circular to all chambers of commerce in the kingdom directing them to stop using various European currencies and to switch instead to using the single European currency, the euro.

The Commerce Ministry said in the circular obtained by Reuters yesterday that the Saudi Arabian Monetary Agency, or central bank, would start using the euro ($0.891) from September 13 in all its foreign currency accounts instead of the individual currencies of the 11 countries in the euro zone.

"We hope that you will notify all chambers of commerce and industry members...to stop using the currencies indicated in all payment orders...and to use the European currency, the euro, instead," the circular said.

The Saudi Arabian riyal is pegged to the dollar. The euro was launched at the start of 1999, but euro coins and notes will not enter into circulation until 2002.
_______
They can't exactly demand euros for oil until they actually are up and using euros! Also, isn't September 13 supposed to be an eventual day Mid-East-wise? Could this switch to euros be part of that?

Leigh
Thank you for the reminder. The announcement of the use of a single European Currency 'Euro' instead of the 11 individual currencies was known. However as you so stated - IT IS UPON US. Imagine, soon every Country in the World will be making similar announcements as did the Saudia Arabians. They have a need to lead because of Oil Settlements and to get their houses & Gold Stores in order quickly.

FOA/TG & Another, I trust, can comment so much better than I on this matter? Please Sirs? I am certain that we will here more from them about this subject soon and at an ever increasing frequencies. "S"

Note: The wild Conversion Rate Swings this morning EURO v US$ v Yen. Swings making Precious Metals look increasingly STABLE, yes.
"S"

The political flexibility of Rubin/Goldman Sachs et all to manipulate the US dollar higher by pounding the base it is measured in down(gold spot price)is going to get harder to maintain as the awareness of the political heat growing on the damage being done to US manufacturers and the labor that works in manufacturing focuses attention on the manipulation of the US dollar and gold. See story below for simple understanding of why they are manipulating gold.It is that most of the supporters of the Democrats benefitted from a strong dollar policy. Wall Street bubble beneficiaries and Hollywood moguls and Dot com/High technology manufacturers whose ability to raise billions through stock option and share issusance scemes overcame the negatives of higher US prices, especially since their costs were largely from manufacturing in China and Taiwan. THe largely republican US based manufacturers were sacreficed in the name of the Clinton/Rubin good times floated on a sea of paper money and a tightly manipulated gold price that gave "value" to the US dollar by comparison.
Top Financial News
Tue, 05 Sep 2000, 7:57am EDT
U.S. Economy: Some Companies Pay For Strong Dollar, Economy
By Tammy Williamson


Washington, Sept. 5 (Bloomberg) -- The euro's 12 percent drop against the dollar since January 3 has beaten up on shoemaker Reebok International Ltd. along with other U.S. companies selling auto parts, chemicals and just about everything else in Europe.

The decline in the European currency, which traded at a record low of 88.37 cents last week compared with $1.03 on January 11, means a pair of training shoes selling for 87 euros in Germany this year was worth anywhere from $77 to $90. The cost in exchanging euros for dollars eroded Reebok's sales by more than $10 million in the quarter that ended June 30 compared with a year earlier.

Reebok's example underscores a paradox of the record economic expansion that has kept the dollar rising and made U.S. investments attractive to overseas investors. Even as the dollar's strength has helped keep inflation in check by holding down the cost of imports, dozens of companies across a range of industries are paying a price through diminished earnings.

``Despite the economy slowing a bit this year, it's still healthy and vibrant and we still have a strong U.S. dollar,'' said Jake Dollarhide, vice president and portfolio manager of Fredric Russell Investment Management Co. in Tulsa, Oklahoma. ``U.S. companies whose sales are dependent upon European countries -- their profits will continue to be reduced or hurt by the weak euro.''

Goodyear Tire & Rubber Co. received less for tires than it would have without the slump; Whirlpool Corp., less on its appliances; and Hercules Inc., less on its paper-making chemicals. Reebok's rival, Nike Inc., also had to sell more cheaply. In all, 206 companies in the Standard & Poor's 500 index did business in Europe last year, according to S&P CompuStat, a database.

Reebok and Nike

Reebok, based in Canton, Massachusetts, reported July 25 that its worldwide sales of the Reebok brand in this year's second quarter were $559.6 million, down 1.8 percent from $570.1 million in the second quarter ended June 30, 1999. The company said sales would have grown by $1.6 million without currency fluctuations.

Nike reported that its European revenue would have grown 23 percent in the quarter ended May 31 without the change in the euro. Instead, revenue grew 8 percent.

U.S. athletic shoe companies are competing for a rising European market and against Germany's Adidas-Salomon AG.

The strong dollar may be spelling deeper trouble for U.S. companies. Since the end of June 1995, the dollar has gained as much as 24 percent against the currencies of its trading partners and most recently was 21 percent higher.

Manufacturing Weak

``The U.S. is losing market share because the dollar's high,'' said Robert Mellman, an economist with J.P. Morgan Securities in New York, in an interview. ``You can see that in the auto industry, where imports are rising. You also see it with producers of steel and commodity chemicals.''

The growing strength of the dollar has aggravated the decline of U.S. traditional manufacturing at the same time U.S. production of chips, communications equipment and computers has expanded, Mellman said in a recent analysis. The last Federal Reserve report on industrial production showed that excluding the manufacture of computers, semiconductors and communications equipment, output rose 0.1 percent in July, compared with 0.4 percent overall.

``Whether high-tech manufacturing can remain immune to the effects of an elevated dollar is an obvious and important issue,'' Mellman said in his report.

Consumer Spending

U.S. spending on consumer goods has grown between three times and four times as fast as production since the mid-1990s, the study says. Overseas companies are filling the gap. While part of this reflects the underlying trend of moving mills and factories to lower-cost sources overseas, the appreciation of the dollar has played a role -- especially in the rising import share of foreign- made autos and parts, Mellman said.

Volkswagen AG, Europe's largest automaker, is among the overseas companies gaining a larger share of the U.S. market. The company reported Friday that U.S. sales of VW-brand autos rose 5.8 percent in August, compared with a year earlier, on record sales of Jettas and Passats. Sales by the Audi luxury unit gained 10.7 percent. Audi is having its best-ever year in the U.S., with sales up almost 33 percent in the first eight months of 2000.

A reason for the attractiveness of the dollar is the record U.S. expansion combined with the Fed's target lending rate for overnight loans between banks of 6.5 percent -- the highest central bank benchmark rate among the Group of Seven large industrial nations. European central bankers last week raised the main refinancing rate a quarter point to 4.5 percent to keep inflation in check.

The Outlook

The euro gained against the dollar on Friday because reports showed U.S. unemployment rose and U.S. manufacturing declined in August -- both signs of cooling. Traders nonetheless expect the euro's rise to be short-lived because investors are still more confident about economic growth in the U.S. than in the 11-country euro region.

``European investors will be attracted to the U.S. companies, possibly leading to more funds flow from Europe to the U.S.,'' said Shigeru Hashimoto, foreign exchange manager at Sanwa Bank Ltd. In Tokyo.

While currency problems aren't new, the decline in the euro - - introduced in January 1999 and originally trading at $1.17 per euro -- caught many companies off guard. ``Most investment houses had expected the euro to strengthen last year and this year,'' said Marc Chandler, chief currency strategist at Mellon Bank in New York.

Hedging Didn't Work

That's a reason fewer companies benefited from such hedging activities as buying Eurodollar futures or entering into custom- made derivatives contracts.

Global companies do get benefits from financing business or purchasing goods and services in local currencies. McDonald's Corp. buys most of its cheese slices for European burgers from Golden Vale Plc, based in Ireland, which uses the euro as its currency. McDonald's also reported in July that a stronger Japanese yen ``partly offset'' the damage from the weaker euro, Australian dollar and British pound.

The difficulties for U.S. companies could ease, analysts say. The growth differential between the U.S. and its trading partners should disappear in 2002, according to analysis in August by Chase Securities Inc. If cooler economic growth in the U.S. keeps interest rates from rising, foreign currencies could strengthen.

``At that point, U.S. minivans, SUV's, and trucks become more attractive abroad,'' said Chandler.



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MK-The Broncos will definitely be a contender this year and I thought Griese looked teriffic!

However, since a tie is like, "kissing your sister", as we used to say in the neighborhood, I look forward to our next meeting and cup of coffee. Kind regards....CM

Sources: Financial Times and theminingwebGold miners still hedging bets
By Gillian O'Connor
Published: September 5 2000 02:41GMT | Last Updated: September 5 2000 06:19GMT

The rapid growth in the gold derivatives market, in which miners Ashanti and Cambior ran up heavy paper losses last year, has peaked and derivative contracts, used by mining companies to protect and improve revenues, are becoming less complex. But miners are likely to continue hedging, despite the wave of anti-hedging sentiment that followed last year's price spike. These are some of the conclusions of a study by Jessica Cross of consultants Virtual Metals, published on Monday by the World Gold Council, a marketing organisation founded and funded by some of the largest gold mining companies. One factor that distinguishes gold from other commodities is that there is a large stock of metal above ground - much of it in central bank vaults - with no natural buyers. This surplus has become the basis for a large and sophisticated derivatives trade. The gold derivatives market, which has doubled in size twice in the past decade and reached a peak of 5,500 tonnes late last year, has thrived because central banks are willing to lend metal cheaply to earn at least some interest on this part of their reserves. If they could not do this, more might be tempted to sell, given that central bankers are increasingly questioning gold's role in reserves. The fact that gold loan rates are normally well below other interest rates has encouraged miners to hedge (sell future production through forwards and options) because they can receive more than by selling on the spot market.

Hedging has become a way to supplement miners' profits, not merely protect them. This accelerated selling has helped depress spot prices, while low gold interest rates have encouraged hedge funds and others to borrow gold cheaply and invest in higher yielding assets. In the first half of last year, as the gold price was tumbling, some gold enthusiasts spoke of an international conspiracy to depress prices. But as Ms Cross states: "No evidence was found of any collusive behaviour on the part of market participants to manipulate the price."

Most derivatives trading (60 per cent) was by the miners themselves. With a few notorious exceptions, hedging has been so beneficial to miners' profits that it has allowed them to defer the full consequences of falling prices. Ms Cross suggests this has "more than likely delayed mine closures, probably delayed mergers and the restructuring of the industry and . . . encouraged expansion of the reserve base". After last year's price spike, which followed the Washington agreement in September by European central banks to limit gold sales and loans, sentiment turned against hedging - particularly some of the high risk- high return "exotic" products, blamed for aggravating problems at Ashanti and Cambior. In February, several producers foreswore new hedging, which produced another price spike. Ms Cross says the switch towards "plain vanilla" products looks set to remain, but will pose problems for both miners and bullion bankers.

Miners cannot afford to give up hedging, but their profits subsidy will shrink. Meanwhile, those with low credit ratings may find premiums loaded against them - assuming the banks are unable to impose margin limits more generally. Gold Derivatives, by Jessica Cross. Available from the World Gold Council, +44 (0)207-766-2709.

Black Blade: If a Au company must sell forward to exist, then they have no reason to be in the business. I only bet on unhedged, profitable, largely debt-free and growing Au companies like Harmony (HGMCY), Franco-Nevada (FN), and Goldfields (GOLD). The most profitable Au companies are all unhedged with perhaps the exception of AngloGold (AU). I think that these companies that forward sell (short) their product have no confidence in their product. If they have no confidence in their product, why should anyone else? They should take a very close look as to why they are in business and reread the fine-print in those derivative contracts. Yeah, forward sales were a stellar success for Ashanti and Cambior! If you got Au companies that are hedged, then tread on at your own peril. I'm only going with the unhedged companies above and physical. If investors bailed out of the forward sold companies, then they would hopefully get the message that investors want a profit, not just tread water without gains from a future rising POG.

Gold producer hedging is set to contract

Gold producer hedging could well contract in the next few years, according to a study on the gold derivatives market for the World Gold Council. The trend change, which is the first in fifteen years, indicates that exploration and the mining of new gold projects could slow down markedly unless the spot price of gold rises substantially. But since there are still huge above ground central bank and private inventories of gold, the contraction in hedging will not be sufficient to boost the gold price, according to the study. Both jewellery and investment demand must grow to achieve this aim. Jessica Jacks head of precious metals consultants, Virtual Gold and an authority on gold derivatives, conducted the study on behalf of the council. She calculates that the amount of gold in the lending and swaps market i.e. total liquidity in the gold derivatives markets, at the end of December 1999 was 5 230 tons and 90% of the supply came from central banks. The gold derivatives market has doubled every five years, but growth is likely to decline in coming years, mainly because mines will cut back on hedging, contends Jacks. At the end of last year, the nominal hedge book of the mines totalled 4,038 tonnes or 158% of total 1999 output. This compares with 3 908 tons in June 1999 and 3,048 tons in December 1998. But net hedging, as a result of reducing and reinstating hedge positions within a contract period, was a much smaller 3,021 tonnes at the end of 1999. North America represented one third of the hedge book, followed by Australia nearly 30% and South Africa almost 25%.

Jacks concludes that speculative bear sales or purchases in the derivatives market could accentuate volatility and upward or downward movements, but do little to alter trends. She estimates that the net short positions of banks, hedge funds and other speculators fell to 394 tons or 7.5% of the total derivatives position at the end of December last year. In June last year, net bear positions were a much higher 647 tons or 13% of the total. That contributed to higher volatility and the sharp short covering third quarter rally, but the greater proportion came from mines covering hedge positions. Certainly, that small percentage is insufficient to drive down gold for long periods and cannot be the cause for the miserable performance of gold in the past decade. Her research findings suggest that a "number of fundamental factors are likely to precipitate a change in the international gold hedge book". First, the average realized price on hedged gold of marginal producers in North America and Australia are not covering costs of production. Thus producers will be discouraged from borrowing gold from central banks and using the proceeds to finance projects. Second, the sudden surge in prices in September and early this year are also discouraging producers to sell production forward i.e. hedge via exotic derivative instruments. This limits the mines from selling forward to finance future projects. Margin calls are a major disincentive. Third, the introduction of the new FAS133 (US Financial Accounting Standards Board Statement 133) accounting system is another deterrent against off balance sheet hedge transactions.

Jacks says that the huge above ground inventories and dearth of investment demand has created a tendency where the gold derivatives market favors the short (bear) side of the market. Had investment demand been higher, derivatives participants would have traded on the "long" i.e. bull side of the market. In short, the tail isn't wagging the dog.

By: Neil Behrmann

Black Blade: A slightly different take on the same study. As the hedgers drop like flies as the cost of production remains high and the companies high-grade their deposits, the profitable unhedged companies can pick over their carcasses for the best assets and the bullion banks are left holding the bag for the forward sold hedges (remember Dakota Mining?). One can also wonder that if Au drops, then why wouldn't some companies buy physical cheap and unwind some of the hedge-book for a quick and easy profit (much like AU and GOLD did last year at one of the BOE auctions)? Meanwhile, I'm still long the best companies and physical Au, Ag, Pt, and some numismatics.

Meanwhile, before I head out, NY Crude Oil is up +$0.62 at $34.00/bbl on its way to $40.00/bbl and beyond! Distillates are also looking strong! Au is off $1.40, Ag off 2 cents, Pd (why do I bother? It's a dead market) is down -$8.00, and Pt is up +$2.00 and continues to bounce around $600.00. Markets look about neutral at the start. I'm on the road, and will try to keep up with all the excellent posts for the next few days.

Leigh (#36039): I saw that last night. I wasn't sure if this is the prelude to a switch from the dollar to Euro for oil that has been alluded to by FOA and Another. Could get interesting, yes? Maybe FOA/TG or even Another could tackle this in more detail if they get an inside look.

Even those of us who are situated at the back of this classroom can not help but notice that this seems to be of great importance, an ominous death knell of the mighty Dollar. Is the end so soon upon us?
Trail Guide, which way do we go?

Christopher

http://www.sharelynx.net/Markets/Master.htmGold derivatives market growth to decline
http://business.iafrica.com/news/sabusinessnews/60168.htm

In derivatives you're either long or short.
Yet Jessica states "The derivative market in gold by end-1999 was represented by a total of some 5 230 tons of metal," Cross told industry experts gathered for a presentation of her research.

Of this, 387 tons were implied short positions, compared with 393 tons out of a lesser total 4 904 tons at end-June last year."

----
What about the other 4,500 tons?

---
"One factor that distinguishes gold from other commodities is that there is a large stock of metal above ground - much of it in central bank vaults - with no natural buyers. This surplus has become the basis for a large and sophisticated derivatives trade."
--
How many times over-subscribed were the London auctions?
Continually time after time.
With even miners stepping up to buy cheap gold.

How come if there's no "Natural Buyers" that we're seeing one after another country selling off their reserves?
Never a mention of the buyer but always the sellers are loudly announced.
For every seller there's a buyer and obviously they're happy to take it up at these prices.
How many tons this year sold by this method?
If the buyer's weren't there the price would plummet or no sale would take place.

------
"The gold derivatives market, which has doubled in size twice in the past decade and reached a peak of 5,500 tonnes late last year,"
--
Perusing the Derivatives report from the OCC
http://www.occ.treas.gov/deriv/deriv.htm
First quarter 2000 -- 184 KB PDF
http://www.occ.treas.gov/ftp/deriv/dq100.pdf
---
Taking one ton of gold to be worth approx $10,000,000, we can see that it's presumed that the total derivative markets on gold are in the vicinity of $55,200,000,000 or 55 billion.

Yet from the OCC derivatives sheet they total up the derivatives on gold as being the following from page 16:
96Q1 - 63.3 billion
96Q2 - 59.3 billion
96Q3 - 69 billion
96Q4 - 61.8 billion
97Q1 - 62.6 billion
97Q2 - 56.6 billion
97Q3 - 66.1 billion
97Q4 - 68.8 billion
98Q1 - 70.5 billion
98Q2 - 75.6 billion
98Q3 - 79.7 billion
98Q4 - 73.6 billion
99Q1 - 72.8 billion
99Q2 - 67.4 billion
99Q3 - 91.3 billion
99Q4 - 92.5 billion
00Q1 - 99.5 billion

So from following through these numbers we can see that it's only in the last year that the amount of derivatives have expanded considerably, with the latest numbers showing no slowdown.

With the greatest increases showing in under 1 year contracts and then 1 to 5 year contracts.

Using our rate of $10,000,000 per ton these figures would account for almost 10,000 tons.

Please note:
*Note: Figures above exclude foreign exchange contracts with an original maturity of 14 days or less, futures contracts, written options,
basis swaps, and any other contracts not subject to risk-based capital requirements.
*Note: Currently, the Call Report does not include maturity breakouts for credit derivatives. Credit derivatives have been excluded here.

Now if we have a look at the three biggest banks holding gold derivatives we see that: page 26
MORGAN GUARANTY holds approx $36,300,000,000 (1/5 of it's entire asset base)
CHASE MANHATTAN BANK holds approx $31,500,000,000 (1/10 of it's entire asset base)
CITIBANK holds approx $11,800,000,000 (1/33 of it's entire asset base)

For a total of $79,700,000,000 in gold derivatives.
With a total for all US banks at $95,542,000,000

Which adds up close to my earlier guess.
Almost double what is being claimed
And this is only in the US.

We then peruse Reginald Howe's excellent money trail and see on this page - about 3/4 way down
http://www.goldensextant.com/commentary12.html

Deutsche Bank holding $51,200,000,000 or 4934 tonnes
Dresdner Bank holding $15,300,000,000 or 1472 tonnes
UBS OTC holding $74,100,000,000 or 7151 tonnes
Credit Suisse holding $18,000,000,000 or 1736 tonnes

The total of the above US & European banks comes out to a massive 28,243 tonnes.


Almost five fold what is being claimed and all the data shows that these numbers are on the increase (up to 1Q 2000)

What about the English gold haters???

-------------
The fact that gold loan rates are normally well below other interest rates has encouraged miners to hedge ( sell future production through forwards and options ) because they can receive more than by selling on the spot market.

----
We can see in the below lease rates that leading up to the POG breakout lease rates where rising considerably.
http://www.cairns.net.au/~sharefin/Charts/GoldLeasemt.gif
Presumably the rising rates were a product of traders reviewing their positions and readjusting their positions.

Now we see a benign lease rate which seems to indicate that few are doing little with their positions and there's little interest in leasing more gold.
(If they can't entice people to lease their gold then they've got to drop their rates to become more attractive.)

-----
In the first half of last year, as the gold price was tumbling, some gold enthusiasts spoke of an international conspiracy to depress prices. But as Ms Cross states: "No evidence was found of any collusive behavior on the part of market participants to manipulate the price."
----
The above statement is as much bunk as the above assertions.
It's well know amongst the industry that many of GATA's suppositions are in fact correct.
One only need to watch the POG on opening and to observe the traders doing the bidding.
Also observing the massive build-up in derivatives one can sense that an awful lot of money and effort has been put into holding the price of gold down.

----
Most derivatives trading ( 60 per cent ) was by the miners themselves.
---
The above numbers released by the banks seem to make the above statement ludicrous.
Does she infer that miners are carrying 30,000 plus tonnes of derivatives???

----
With a few notorious exceptions, hedging has been so beneficial to miners' profits that it has allowed them to defer the full consequences of falling prices.
---
It appears that there has been a definitive attempt to force the price of gold lower.
I would hazard a guess that miners have been forced into hedging because of the price falling.
Had not the price been pushed downwards then there would have been little need for hedging so extensively.
So the miners have been forced into hedging just to stay alive.
----

Ms Cross suggests this has "more than likely delayed mine closures, probably delayed mergers and the restructuring of the industry and . . . encouraged expansion of the reserve base".
---
I would suggest that goldmines forced to run on low gold prices have been forced into closing mines earlier, high grading and agreeing to unscrupulous deals being forced upon them by the banks.
With little surplus cash to run on there's been little exploration in compression to the earlier years around 1994 - 1996 when the gold price was rising and every miner was drilling and buying up as many prospective tenements as they could.
We can well see in the last few years how many miners have been forced out of gold mining and to seek more lucrative returns by turning to internet services.
Many miners have been beaten back to such levels that they cannot raise the necessary capital to explore and develop potential mines.
Back in 1996 there were dozens of small to medium size mines opening for production.
Now in 2000 only the big cashed up companies can afford such luxuries.

Now we're looking at a mining base where many of the smaller companies have folded or moved on.
Resources have been picked over by high-grading so that some companies will be faced trying to extract profits from poorer grade ore with rising costs.
Having to contend with rising inflation and over priced fuel.
Many companies have been discounted (due to abysmal performance) to such an extent that their reserves & cash assets are worth far more than their scripts.
Takeovers are now on the increase as the few monster capitalized companies are moving around and picking up what's left of many fine companies for cents in the dollar.

The industry has basically been wrecked - global production is currently falling
And all that will be left of many small functional companies will be taken up by the remaining behemoths.

I intrigues me how the World Gold Council can release such bunk with incorrect facts contained if not for the purpose of covering up what is happening within these markets.

I feel that they should be taken to task for this and the real truth should be released.
Many small third world countries have suffered and will continue to suffer due to the negligent actions of the industry in looking after itself.

And in the long run the few companies that will weather this financial gold storm well will be the biggest US Gold companies.
Swallowing up all and every cheapened asset that has been forced in price down to the bedrock.

It almost appears like an American conspiracy!!!!!

278-279

Sir Sharefin,
I can't agree more with your latest post and thank you for posting it here as well, I guess. The numbers add up to stunning levels of shorts, if you take Reg's count on BB gold derivatives into account. So, even if it's only leased - meaning still carried on the books of CB's- the nature of these derivative instruments means that somebody in the chain - CB(leased)-BB-Hedge Fund or other sold physical into market, leveraged the proceeds to higher yielding financial "assets"- a word, which may become obsolete in the future- and the BB's still hold the obligation to deliver the physical back to CB's.
Physical gold, a hard asset not multiplying at the whim of anybody's "creative" credit creation schemes - and according to the above - has "virtually", or is it in hard reality owed to CB's, which can never hope to retrieve it. ... So far for AG's counterparty risk statement, that CB's stand ready to fill any void, or kill any rally in gold ... and since you're from the land of Oz you'll understand the last lines of a WWII song from emanating from your great country:
" As we stand a'loof
They can't sh.t at on the roof
The only place clean
In our latrine!"

As I've been following your posts for a couple of years as of lately I didn't find time to scroll Kitco for the bones. Though I've been perusing your website quite often - what great work of putting it together - Thank you and best to you -cb2

@ MK - Always a pace ahead of the pack - great to have direct (delivery!)access over on the old continent to some of your outstanding offers! Tku and all the success, which is due to you - cb2

"Please consider what it is that underlies this fiduciary media we call the dollar, and then accordingly, how is it that the fiduciary dollars will be "devalued" against this same underlying element--whatever it is?"

Psychology underlies the creation, and destruction, of all
money, yes? In some parts of the world, in a different age, men found seashells desirable as a medium of exchange. Here in America, some natives took beads and trickets to be money. And when the United States was in the process of being founded, the "continental" was created by the government as a medium of exchange, but failed when people no longer believed in it and what it promised, leading to America's first financial crisis. The continental is, indeed, an interesting study. The crisis led to the creation of a stable US currency. Money is a game of confidence.

And so it is with gold and the US$. Gold has a very long history as money. Thousands of years. And this is its strength. The US dollar, once based on gold, began to be separated from it by the Gold Reserve Act and the subsequent administrative regulations. The GRA was part of a larger movement around the world to weaken the gold standard and eventually do away with it. Why? The gold standard limited the creation of money (there's only so much gold, yes) and inhibited the growth of credit. Note that the European powers went off the gold standard temporarily when WWI began, because it limited their ability to wage war by limiting their credit.

So the GRA took gold out of circulation in America, thus ending its role as a currency, but gold still retained its monetary qualities by virtue of its being held in the CBs as a reserve asset. And the US$ evolved, through a series of agreements (and its isolation from the ravages of WWII), into what we have today...the world's reserve currency. And CBs came to realize the by holding US$'s, they could utilize interest-bearing instruments to earn an income on that reserve asset that was not possible for their gold reserves until the rise of derivatives in the last 20 years. But by then it was too late for gold. The US$ carried far more weight in the world's monetary reserves, and more importantly, in world trade, than gold ever could.

The upshot of all this is that ALL money, including gold, is a commodity. That is, it is something useful (see dictionary). And in a credit economy as we live in now, the US$ and paper is far more useful than gold. But like any commodity, it value fluctuates on supply and demand, as we saw in the early 70's with the US$'s devaluation, which was highlighted by oil prices. But it was not caused by oil prices, or the oil-for-gold trade (which is very small). It was caused by a LOSS OF FAITH in its value. Nothing more, nothing less. The dilemna of CBs who want out now is that they are married to the dollar, by virtue of their holdings, and it would be a very expensive divorce.

As for fiduciary gold contracts, they are NOT gold contracts. They are dollar contracts. The gold business today is like this: take one part gold, ten (or twenty, or fifty) parts dollars, throw them into a big pot, like Comex, stir well, at a constant valuation, and, voila, you have the paper gold trade. All that it takes to keep this trade going is a relatively constant valuation between gold and the US$, and some physical to cover the interest on these contracts. It can go indefinitely, as these contracts can generally be rolled over. Let the valuation between the dollar and gold change, and the short-covering will be massive, lending itself to a rapid rise in POG, a hint of which we saw last September. And with the world's CBs continuing to sell off the gold reserves and a real lack of interest in gold on investors part, I cannot see POG rising before the US$ is devalued.

Why do I think the US$ will be devalued at some point? Look at the US trade deficit. One can only promise the moon for so long before there is a loss of faith, a loss of confidence. And that is the downside to a credit economy.
***************************************************

A friend of gold is a friend of mine....

... So is the $-Index - up again to almost new records - +0,95 and the euro - close to all time low 88,35 - only the POO is slowly gaining ground, while POG is pounded, or is it "'ounced" in these days of "virtual" supply?
cb2

http://www.usagold.com/Order_Form.htmlDAILY COMMENTARY

(9/5/00) www.USAGOLD.com . . .Gold weakened
overnight as the euro plummeted and oil soared.
Though such incongruities might befuddle the
reader at first glance, one should keep in mind
that Europe must buy the dollar first, then oil
-- a situation which translates to the citizens
of the EU depressing their own currency in
order to buy crude. Forex speculators
understand all too well the direct line
relationship between oil prices and euro value,
play the hand dealt them, and exacerbate the
euro tumble on nearly a daily basis. The
Europeans do not find this comforting, and the
way things are going we wouldn't be surprised
to see the EU slip into a crisis mode if things
don't improve. To be sure, over the long Labor
Day weekend in the United States, the French
central bank, in the person of governor
Jean-Claude Trichet, blasted "speculators",
according to a weekend Reuters report, and
accusing them of "flagrant underestimation" of
the euro's value. This euro weakness, along
with weakness in the yen and Swiss franc
against the dollar, is being blamed by analysts
for gold's weakness this morning.

The European and Asian gold markets were quiet
this morning though under the circumstances one
can only wonder why. It will be a light report
week with Productivity on Wednesday being the
most important. We also have Consumer Credit on
Friday.

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

�



Had it with the tired, one-sided
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you want a fresh view of the gold market go to
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gold investors.

Question: As the US$ Price of oil rises, other countries have to increase their prices for goods sold to the US to get more $ to pay for oil, n'est ce pas? What is the logical outcome of this recursive cycle, as the POL inflates, everything inflates??

Thanks for any comments

Goldfan

stuff a dollar in your mouth, tastes good.

hope it pastes well:

MSNBC NEWS SERVICES


PARIS, Sept. 5 � Petrol shortages crippled service stations around France on Tuesday as truck owners protesting against rising fuel prices tightened their grip on supplies and urgent high-level negotiations failed to find a compromise.

CAR DRIVERS queued bumper-to-bumper at stations selling petrol � some under strict quotas imposed by local authorities � or cruised around town searching for more supplies.
Late-night talks between Transport Minister Jean-Claude Gayssot and the truck owners broke up without agreement, with the protesters demanding cuts in fuel taxes of about 20 percent. Gayssot was only ready to offer about half that amount.
"We didn't reach agreement because the gap separating us on the indispensable cut in fuel tax is still too wide," Rene Petit, head of the Federation of Road Hauliers (FNTR), told reporters when the talks broke up after midnight.
Interviewed on France Inter radio on Tuesday morning, Gayssot said, "I hope things will unblocked soon."

GROWING SUPPORT FOR PROTEST
The truckers� protest, which has been joined by farmers, ambulance drivers and other workers groaning under rising fuel prices, started on Monday on the heels of a fishermen's blockade of ports which stranded thousands of British tourists last week.

That movement ended when the government agreed to compensate fishermen for a 75 percent rise in the cost of untaxed fuel.
The protesters, who simply have to park their trucks outside the entrances to refineries and fuel depots to cut off supplies, have blocked almost all wholesale fuel sources in France, oil industry associations and truckers groups said.
Many filling stations have run dry, especially in cities in the east and south-east such as Lyon, Marseille and Grenoble.
By Monday evening, thousands of vehicles had joined the protest that affected 80 facilities throughout France, she said.
In the area surrounding the southern port city of Marseille, 30 to 40 percent of gas stations had run dry, the regional police headquarters said. In eastern France, many drivers headed to neighboring countries to buy gasoline.




EMERGENCY SUPPLIES ONLY
The prefect (government representative) in Lyon ordered 12 petrol stations to turn back motorists and supply only doctors, hospitals, emergency services and firefighters.
Prime Minister Lionel Jospin promised at the weekend to study ways of easing the impact of soaring fuel costs on truckers who pay diesel fuel between 4.50 francs ($0.61) and five francs a liter.





� MSNBC Cable coverage
Watch MSNBC Cable for coverage of this and other stories



Among the crippled installations were major refineries in Feyzin near Lyon, Donges near Nantes in the west, Reichstett near Strasbourg, Fos near Marseille and Gonfreville and Grand Couronne in Normandy.
The protesters were also blocking river oil terminals in Strasbourg and Lyon, and stopping trucks delivering fuel to the airports of Mulhouse-Basel and the Riviera capital Nice.

The Associated Press and Reuters contributed to this report.

No way they can hold gold back, it's gonna go, wake up call.

Time has come to hold someone responsible.

Move to Maui. House of sun and Gold.

The World Gold Council has got to be the most incompetent and ineffective trade group of all time. They are like sheep being led to the slaughter.

Great Post Mate!
So Glad to see you here!!!
beesting.

http://www.sjmercury.com/world/worldwire/docs/367690l.htmBRISBANE (Reuters) - Eight people were killed on Tuesday when a light plane crashed in Australia's remote northeast after flying 3,000 km (1,900 miles) across the continent on apparent autopilot.

The plane set out with seven miners on a short flight from Perth to the gold mining town of Leonora, both in Western Australia, but authorities believe the plane depressurized, leaving the pilot and miners unconscious.

Two aircraft tracked the Beechcraft King Air 200 twin-engine turboprop from near Alice Springs in central Australia before it crashed at about 2:10 a.m. (1510 GMT) on a property near Bourketown, in far northern Queensland state, authorities said.

The plane did not respond to radio contact and traveled northeast across the vast outback, flying virtually in a straight line across three states before running out of fuel and crashing.

Sons of Gwalia Ltd, one of Australia's largest gold producers, said seven of its employees who worked at Leonora were on the charter flight.

``It has been confirmed that there were no survivors,'' company chairman Peter Lalor said in a statement.

Initial local media reports said the Beechcraft was in the air for five to seven hours.

``It would appear as though the airplane was on autopilot, certainly on heading hold and it would have maintained a constant heading until the aircraft ran out of fuel, at least on one engine anyway,'' said Barry Sargeant from the Australian Transport Safety Bureau.

``It's consistent with some sort of a problem with the cabin pressurization system or oxygen system, (but) that's yet to be determined of course,'' he told Australian Broadcasting Corp (ABC) radio.

A Queensland police spokesman said fog had prevented investigators from getting near the remote crash site during the morning.

``A helicopter was going to be used to ferry people into the crash site but due to the weather... it appears we may not be able to use that now,'' police spokesman Brian Swift told ABC.

Pilot Steve Patrick of the Royal Flying Doctor Service, who tracked the wayward Beechcraft over the outback for more than an hour until it crashed, said it was flying at 25,000 feet with no life evident on board.

``The plane was slowly descending the whole way and then it descended into the ground,'' he told the ABC. ``There was an explosion on impact, then there was a fire straight after.''

Australian officials likened the tragedy to the jet crash which killed golf champion Payne Stewart in the United States in October last year.

Stewart and five others died after their Lear 35 twin-engine jet flew for hours across the U.S. with no one at the controls, finally crashing in South Dakota after running out of fuel.

http://www.goldfields.co.za/GOLD FIELDS AND OUTOKUMPU ANNOUNCE 2.9 MILLION OUNCE PGE RESOURCE AT ARCTIC PLATINUM PARTNERSHIP IN FINLAND

$hifty

holding dec run up before close.

Top Financial News
Tue, 05 Sep 2000, 12:35pm EDT
National Grid to Acquire Niagara Mohawk for $8.9 Bln
(Update5)
By Catarina Aleix London, Sept. 5 (Bloomberg) -- National Grid Group Plc, owner of the power-transmission network in England and Wales, agreed to buy Niagara Mohawk Holdings Inc. for $8.9 billion in cash, stock and assumed debt,continuing an expansion into the U.S. that it began almost two years ago.
National Grid bought New England Electric of Westborough, Massachusetts, in March for $4.7 billion in cash and assumed debt, and Eastern Utilities Associates of Boston for $1.03 billion in cash and assumed debt in April.

National Grid owns and operates the overhead lines and underground cables that transmit electricity across England and Wales. It was formed in 1990 as part of the U.K. government's plans to sell the electricity industry to the public.

Niagara Mohawk is selling its power plants to concentrate on the business of delivering electricity over its 24,000-square-mile power network, the largest in New York state.

National Grid is being advised by N.M. Rothschild & Sons and Donaldson, Lufkin & Jenrette is advising Niagara Mohawk.

Reuters newswire just carried a story that President Clinton will meet with Saudi Crown Prince Abdullah tomorrow evening in New York for a discussion about increasing oil production. This meeting comes just four days before OPEC meets in Vienna to discuss increasing oil production. It is interesting that Crown Prince is the Saudi spokesman while King Fahd is in failing health. Once King Fahd dies, then the Crown Prince is the heir apparent. For anyone who has followed politics in the Saudi kingdom, all of the other princes were educated in the West--either at Harvard, Stanford or Oxford/Cambridge. And hence they are sympathetic to the concerns and demands of the West. Crown Prince Abdullah is the only prince who sports "Bedouin"-type thinking and who is openly hostile to the West. He is, in essence, an Arab nationalist who wants higher oil prices indefinitely.

We shall see if Slick Willie's charisma can charm this gruff character. Maybe a veiled threat of letting Bad Boy Saddam loose on the region might convince him. How would you like to be a fly on the wall at this meeting??

Uhh,didn't TG say "tomorrow,it (euro pricing) will be presented to Clinton"?

Chances to bring the gold debate mainstream and discuss it with a genius.

People of the forum I've been reading posts here for a few years now and hold all poster opinions in high regard. I believe that it is time to take the debate to Main Street and start educating the people on the principles of sound money and explain how their economy has been highjacked. This may be one way of doing that.

In the September 3, 2000 issue of Parade Magazine, the "Ask Marilyn" section. Marilyn Vos Savant is asked the following question "What do you think of the idea of electronic money and of living in a cashless society?"� Her reply in part is "Conceptually, it doesn't seem much different from using paper money instead of gold coins." Conceptually could be the key word here because we do not live in a conceptual world. If that were the case conceptually the paper gold market would always be synchronized with the physical gold market.

Would anybody like to debate MS. Vos Savant on this matter? It's out of my league. She can be reached at:

Ask Marilyn, Parade, 711 third Ave., New York, N.Y. 10017

Or

By E-mail at marilyn@parade.com
(Please include name, city and state)


PS. Strad Master, that was an excellent performance the other night and I posted so about 15 minutes after it finished, I would love to hear more of your music if it is possible.


Thanks,
Joe

Trail Guide (09/03/00; 22:13:19MT - usagold.com msg#: 35971)
(No Subject)
Simply Me (09/03/00; 21:54:04MT - usagold.com msg#: 35967)

Hello Simply Me,
It just could be that it's being discussed with Mr. Clinton this week.

I have to go now.

Trail Guide

Sorry, I can't answer your question about TG with a definite yes or no. But from what is happening with the euro sliding against the Dollar and on top of that rising crude oil prices (in Dollars), Europeans cannot be very happy with the current state of affairs. I smell intervention of some type. My confidential sources tell me that a showdown between America and Europe over the gold price will occur very soon. And it will correct what should have been done last September/October when gold spiked $80/ounce. Another sharp rise in gold would surely help the euro at this juncture.

UNCIVIL SERVICE: THE FEDERAL RESERVE AS A WORKPLACE
Over the past two decades, America's private pension system has massively
shifted investment risk to workers as employers embraced 401(k) plans and
other defined contribution pension programs that let the whims of the
market - or the acumen of plan participants - determine an individual's
retirement benefit. Like the rest of the federal government, however, the
Federal Reserve continues to provide its employees the security of a
guaranteed benefit after retirement.

Unlike the rest of the federal government, the central bank's defined
benefit pension plan has realized bountiful returns on its stock-rich
portfolio during the long bull market of the 1980s and 1990s. Because the
self-financing Fed sets pay grades that far exceed the federal norm - and
because employees' pension benefit can equal as much as 80 percent of
their
average salary during peak earning years - these heady portfolio returns
have helped fund some of the public sector's more comfortable retirements.

So why are scores of the Board of Governors' longest-tenured employees
suing
the Fed over the management of their pension plan? And why, at an
institution famed for its sternly hierarchical folkways and internal
resolve, does this group of dissident plaintiffs include some of the
central
bank's most senior managers?

...for the rest of FMC's new report, go to:
www.fmcenter.org/fmc_superpage.asp?ID=408


MILLIONAIRES MAKING POLICY:
Speaking at the Federal Reserve's annual Jackson Hole conference on August
25, Chairman Alan Greenspan noted "considerable unease" among some
citizens
"about the way markets distribute wealth." Nevertheless, Greenspan and
his
colleagues have been served very well by these distributional mechanisms.
According to the attached Financial Markets Center analysis of recently
released financial disclosure statements, the five members of the Fed's
Board of Governors saw their aggregate net worth jump by 17 to 20 percent
during the course of 1999.

...for the rest of an analysis of the governors new financial disclosures,
go to:
www.fmcenter.org/fmc_superpage.asp?ID=409
...for the only online access to key portions of Fed officials' actual
financial disclosure statements, go to:
www.fmcenter.org/fmc_superpage.asp?ID=240

Read carefully >>> "Conceptually, it doesn't seem much
different from using paper money instead of gold coins." <<<<

She is not saying that conceptually, paper money is synchronized with gold coins.She is saying that electronic money is no different than paper money when used *instead* of gold coins.

We agree with that! She does not, however, enlighten her readers as to the significance of that "Instead"

If the Europeans really want to hike gold prices they can easily do so by cutting the supply of cheap bullion to the lease market. One year lease rates now are down to 1.3% -- about as low as they have ever been. A big gold rally is out of the question unless lease rates move up considerably.

Never forget the old adage -- "watch what they do, not what they say." To date there is no solid evidence the Europeans really want higher gold prices. They are lending their gold to the bullion banks for next to nothing.

Hi Peter,
Thanks for clarifying that thought, I guess I read it differently.

Joe

http://www.gold.org/Gra/Pr/GoldDeriva.htm(excerpts)
LONDON: Monday, 4 September 2000 - The rapid growth of the gold derivatives market in recent years is likely to slow in future. Limitations on gold lending by central banks and a slow-down in producer hedging will both contribute to a reduction in derivative market activities. This is one of several important conclusions arising from a detailed study of the gold market commissioned by the World Gold Council and published today.

Lack of transparency and the different behavioural characteristics of the gold market to other commodity markets have hindered understanding of the market and the way it operates, and led in 1999 to the Council sponsoring a major research project into gold derivatives to obtain a better assessment of the market's size, scope, operation and effect.

Among the main findings of the study are:

--At end-1999, total gold liquidity (the amount of gold lent or on swaps) was 5,230 tonnes, slightly down from a peak of 5,500 tonnes in the immediate aftermath of the Washington Agreement at end-September 1999. Of this, 4,710 tonnes - some 90% - was supplied from central banks and other official institutions. Official sector gold liquidity more than doubled between 1990 (900 tonnes) and 1995 (2,100 tonnes) and doubled again between 1995 and 1999.

--Central banks not covered by, or associated with, the Washington Agreement on Gold (WAG) have lent, overall, a far higher proportion of their gold reserves than central banks covered by the WAG. Prior to the Agreement the gold market assumed that potentially substantial quantities of gold could if required come onto the lending market from Washington Agreement signatories. However for the duration of the Washington Agreement (until September 2004), those central banks covered by WAG, and others informally associated with it, have agreed not to increase the amount of gold they lend to the market. There are therefore limited quantities of official sector gold - probably a maximum of 1,000 tonnes in practice - available to fuel growth in the lending market until 2004. This contrasts with estimated growth of 2,600 tonnes between 1995 and 1999.

--On average, the official sector lends 14% of its declared gold holdings. However the proportion varies substantially from country to country. If the USA, Japan, IMF and major European countries that do not lend are excluded the proportion rises to 25%.

--The bullion-banking industry has been subject to extensive restructuring in recent years. This has had a substantial effect on available credit. Banks' trading limits have declined in recent years and are currently collectively likely to total some 2.5-3.5m oz (75 to 110 tonnes) of combined short-term net exposure.

--The mining industry is thus the greatest user of lent gold. Short speculative positions exist but appear to be of lesser size. The growth of derivatives has played its part in price discovery but cannot be isolated as the dominant factor.

--Mining companies themselves are also facing several hedging-related challenges and a number of factors suggest that the peak of hedging is over. The Washington Agreement precipitated a review of hedging practices by both miners and bullion banks and there is a move away from the use of the more complex derivative products. The decline in exploration activity will affect future production and hence limit the scope and demand for hedging. Finally the introduction of the FAS133 accounting standard will also affect the choice of product.

--No evidence was found of any collusive behaviour on the part of market participants to manipulate the price.

[The full 196 page report is accessible from the link given above]

A reality check. If they want the Euro to go down, they can hardly be in favor of higher gold prices.

Euro Falls to Record vs Yen on Remarks From Germany's
Schroeder
By Mark Tannenbaum

New York, Sept. 5 (Bloomberg) -- The euro fell to a new low against the yen as German Chancellor Gerhard
Schroeder said he welcomed the currency's decline, sparking concern the views of euro-zone politicians
may be at odds with the European Central Bank.

The 11-nation currency touched a record against the yen for the second day in three, after Thursday's
drop on concern an interest-rate boost by the ECB will crimp economic growth. Analysts say Schroeder's
remarks yesterday contrast with those of European Central Bank officials, who have been trying to bolster
the currency and say it is undervalued.

``People think when there's conflict between politicians and a central bank it doesn't do a currency any
good,'' as it calls into question the bank's ability to conduct monetary policy independently, said Marc
Chandler, chief currency strategist at Mellon Financial Corp. Investors ``are still looking for new lows in the
euro'' in coming days, he said.

Europe's common currency dropped to 94.070 yen, from 94.935 yesterday, and earlier sank to a record
low of 93.765. The previous low, reached Thursday, was 94 yen. The euro fell to 88.85 U.S. cents, from
89.74 yesterday, after falling as low as 88.50 cents earlier. That's not far above its record low of 88.37, set
Thursday.

Two straight days of declines for the euro have more than erased the gains the currency staged Friday,
after a report showed the U.S. jobless rate unexpectedly rose in August. The statistics boosted
expectations the U.S. economy is slowing more quickly than previously expected, which could start to
raise the relative appeal of euro-zone assets.

`Reason to be Happy'

Still, some economists said it's too early to say the U.S. is cooling off enough to lead investors to shift
more aggressively toward Europe.

The dollar is benefiting as investors think the U.S. is in a ``best of all possible worlds'' scenario, in which the
Fed stops raising rates while still allowing the economy to grow robustly, said Ram Bhagavatula, chief
economist at Royal Bank of Scotland Financial Markets.

Other analysts said concern persists that euro-zone growth will be choked off by the ECB's move
Thursday to raise its benchmark rate by a quarter-point, to 4.5 percent, to stem inflation from surging oil
prices and the euro's decline.

Still, the Schroeder comments helped sour the mood on the currency at the start of the week.

``The current euro-dollar rate is more of a reason to be happy than concerned,'' Schroeder said in a
speech yesterday at a conference on doing business in Eastern Germany.

`Statement of Fact'

His remarks came the same day as Bank of France Governor Jean- Claude Trichet, who's on the ECB's
17-member governing council, said ``the euro is clearly very undervalued by most market participants.'' He
spoke on radio station RTL.

While the Schroeder comments contributed to euro declines, ``we view this as a statement of fact rather
than any policy dispute with the ECB,'' Bob Sinche, Citibank's chief currency strategist, wrote in a
comment today. He added that he expects the bout of euro strength seen last week to re-emerge in
coming weeks.

The yen was little changed against the dollar, at 105.86 per dollar, from 105.81 yesterday. It earlier fell as
low as 106.55, on speculation Moody's Investors Service will downgrade Japan's credit rating soon,
analysts said.

Such speculation has continued to surface among traders and investors as Moody's has been reviewing
Japan's ``Aa1'' credit rating for a downgrade since Feb. 17. It cut Japan's top-notch ``AAA'' standing in
November 1998, saying the government was spending too much. A decision may come as early as this
month, traders said. A Moody's spokesman declined to comment.

http://www.metro-press.com/SAUDIARABIA/saudi.html What oil has become. Published - 23rd September 99

"Saudi Arabia's oil boom days are over, Crown Prince Abdullah said earlier this year. And everything in the country is changing because of it..."

http://www.salamiran.org/Media/TehranTimes/990602.html#HLN34Hmmm... wonder how they're getting on... finish in 2005?

Hello - oldgold - please don't take me too seriously tonight- though the last "Schroder" who's made some sense was "Peanuts" - and I am a fan - of nuts - and as I'm trying to get to grips with this new currency in the making - it is, isn't it - in the making?
Or is it in the un-making - thanks to petty socialist squabbles, hegemony and political influence in a more than ever fragile community - held together by economic needs and necessities by all, dependent on the whims of few more powerful - or better more equal? - Let's wait for Denmark's euro referendum later this month! - - and even if the Saudi's are regaling their banks to do business in the euro solely, within the EU - it only tells me they've had it with the $!
I'm not the renegade you'll suspect from above - no - more like a burnt moth getting too close to the candle - though I'm a fan of open fire places too - cb2

Hi folks!

I realize this little thing I've written on free trade is a day
late, ah, actually three weeks or so late - - - - but I don't
think you'll find it a dollar short! I could be wrong. If so,
object! This "post" is three weeks late mostly because it's
taken me that long to put it together. So, what I'm gonna do to
spare your eyesight is to post one section every day or so for
awhile. Comments and particularly criticisms or objections are
most welcome.

By the way, our hero (and heroine, gold, plays a central role - - -
but doesn't make an entrance till later.

OK. Heeere we go!

Free trade is a hot-button issue. Everywhere. And it always has
been. Buchanan billed himself as "next to Ronald Reagan, the
strongest free-trader in the White House," -- but he changed his
mind. So what gives? Is free-trade in free markets really so
controversial? If so, why? Who _really_ benefits from free
trade -- and who is hurt by it?

Consider the following:

"(h) *The countryside was cut out of trade in the
Middle Ages*.

'Up to and during the course of the fifteenth century
the towns were the sole centers of commerce and
industry to such an extent that none of it was allowed
to escape into the open country' (Pirenne, _Economic
and Social History_, p.169). 'The struggle against
rural trading and against rural handicrafts lasted at
least seven or eight hundred years' (Heckscher,
_Mercantilism_, 1935, Vol. I, p. 129). '*The severity
of these measures increased with the growth of
'democratic government*' . . . . 'All through the
fourteenth century regular armed expeditions were sent
out against all the villages in the neighborhood and
looms or fulling-vats [in which cloth was dyed] were
broken or carried away.' (Pirenne, _op.cit_., p. 211)."
-Karl Polanyi, _The Great Transformation_. (Boston:
Beacon Press 1957), p. 277

Seven or eight centuries of "struggle against rural trading," not
to mention a century of loom-stealing and vat-smashing does seem
to indicate free-trading was rather a hot-button issue even in
medeival times, don't you think?

Inherent in the idea that whole villages opposed free trading
amongst the rural folks is that for some reason _the
establishment_ particularly doesn't like free trading. And
contrary to the common perception of some free-trade advocates,
businessmen are in the lead of the establishment which doesn't
like free trade in free markets.

My first clue to [Ayn] Rand's greatest mistake,
though I failed to understand it at the time, came as a
friend of mine (Larry) and I gave a talk to the Las
Vegas Junior Chamber of Commerce (the "JCs"). We
presented two libertarian issues; heroin
decriminalization to demonstrate civil liberties and
free trade in free markets to demonstrate economic
freedom. Since JCs are business folks, we figured we'd
get static on decriminalization, but if we addressed
the free-trade issues last, we would leave them with a
positive impression.
+
Sure enough, immediately after the
decriminalization presentation one JC stood up, and in
a very agitated manner let us know that we were crazy
to propose such a thing. Before we could answer,
another JC said, "Sit down Bob. They're right." There
was a murmur of assent from the rest of the thirty or
so in the audience. Larry and I looked at each other
amazed. We figured we were over the hump.
+
After our _free market_ presentation, however,
there was dead silence. We felt a chill. Someone
murmured something like "You can't have _that_ sort of
thing going on." This audience of business people,
which had accepted decriminalization, figuratively
turned it's collective back on us. We had violated
some hallowed but unstated rule. It was as if actually
mentioning free markets, acknowledging they even
existed, was unacceptably foul manners. What was going
on here? -L. Reichard White, "Ayn Rand's Greatest
Mistake, Why Almost Everyone Hates Free-Trade, and
Where Totalitarianism Comes From"

Thus whole villages, tradesmen, and workers of all kinds --
including business persons -- dislike (to put it mildly) the
competiton they have to deal with when free-trade is possible.
Here's why:

The consumers do not care about the investments made
with regard to past market conditions and do not bother
about the vested interests of entrepreneurs,
capitalists, land-owners, and workers, who may be hurt
by changes in the structure of prices. Such sentiments
play no role in the formation of prices (It is
precisely the fact that the market does not respect
vested interests that makes the people concerned ask
for government interference.) -Ludwig von Mises, Human
Action A Treatise on Economics, Third Revised Edition
(Chicago, Illinois: Contemporary Books, Inc. 1966),
pg. 337 [available also from
http://www.mises.org/humanaction.asp]

Notice I didn't include _governments_ in with those groups who
don't like free trade. Mises above provides the key as to why
governments may even "like" free-trade when he observed, "the
people concerned ask for government interference." Free trade
gives governments a big opportunity to make money - - - by
interfering with it on behalf of "the people (vested interests)
concerned."

What's clear is that large numbers of people have historically
perceived problems with free trade. Since we're having this
discussion here at USAGOLD, it's clear this perception of
problems with free trade persists to this day.

Comming next: Free-trade II: The Good _So who DOES like free
trade?_

Regards,
Journeyman

... of reading Dr. Jessica Cross of "Virtual Metals Research" on gold derivatives -

TC- as I'm aware you're not the cynic I'm becoming (though I still hope you didn't have to cope with all the
196 pages of total misinformation), I have to admit I'm becoming a bit irritated by the funders of this kind of (mis-) information. It does remind me of the tombstone, stating - " here rests the rest of the gold industry"-RIP -
(Rip off In Pieces) - your friend - alas sorry - cb2

I offer both a question (two, actually), and a comment.

In one post you said:
"Key European Politicial Welcomes Plunging Euro
A reality check. If they want the Euro to go down, they can hardly be in favor of higher gold prices."

In what regard to you see higher gold prices acting at cross-purposes with either a weaker euro or with euroland's best interest? It comes to my mind that the purchasing strength of a currency is not built upon the value of the issuing bank's reserves, but rather upon the monetary policy and use of that currency. Only when offered for currency redemption or employed through foreign exchange operations (which the ECB has a distinct policy preference to avoid doing) would total reserve valuations affect the external strngth of the currency.

To see this another way, we note that the ECB also has, unavoidably, dollars held in reserves; yet we do not hear anyone suggesting that the rising value of the dollar would also cause the euro to be strengthened in parallel.

In another post, you said:
"Never forget the old adage -- "watch what they do, not what they say." To date there is no solid evidence the Europeans really want higher gold prices. They are lending their gold to the bullion banks for next to nothing."

If we are to watch what they do, then what is to be drawn from the Washington Agreement that has been done? And having brought it up, given the general purpose behind interest rates, what do you feel to be the proper rate for the gold leasing that remains underway?

Here's a comment from our Central Banking Insider that elaborates a bit on your posted piece on the Federal Reserve. Your article stated:
"Speaking at the Federal Reserve's annual Jackson Hole conference on August 25, Chairman Alan Greenspan noted "considerable unease" among some citizens "about the way markets distribute wealth." Nevertheless, Greenspan and his colleagues have been served very well by these distributional mechanisms. According to the attached Financial Markets Center analysis of recently released financial disclosure statements, the five members of the Fed's Board of Governors saw their aggregate net worth jump by 17 to 20 percent during the course of 1999."

I thought it might be of interest to pass this additional info along regarding the nature of the Fed Chairman's investment position from our August report:
---
According to a financial disclosure report, the value of Alan Greenspan's investments in 1999 totalled between $3.4m and $7m, up from $2.5m to $6.4m in 1998. To avoid conflict of interest, Greenspan holds neither equities nor longer-term bonds, both of which can be affected by interest rate decision which he makes as chairman of the Fed. His largest assets are four Treasury bills valued at between $500,000 and $1m.

Greenspan, 74, who earned $136,700 last year, is comparatively one of the less well-paid central bankers. Last year, the Economist magazine reported that Bank of Italy governor Antonio Fazio was the highest paid central banker in the world, with a reported salary of $600,000.
---

http://www.usagold.com/announcement/europeantelegram.html...more due to shortage constraints than personal choice. I would like to give it the once-over in order to fairly access the quality of Dr. Cross' findings and conclusions, but alas, until that chance arrives, I had to settle for providing the link to the rest of the fine minds here along with some selected excerpts from the executive summary.

Regarding this issue of time...the link above hints at one of the latest projects that we've been busy with here in The Tower on behalf of the good folks at Centennial. Now that MK has cleared the administrative, logistical, and paperwork hurdles for providing direct gold delivery within the European Union, it's time to...

"Wake the kids and phone the neighbors!"

... We'll be prepared to sound the Alphorn - even waking the
deaf - Though still cross with Jessica's dross - cb2

the post of acronyms by AUSPEC.

That makes it official, eh?

When do we get part two?

$hifty
:)

Is good??

Regards, J.

I look foward to reading more.

$hifty
:)

http://www.telegraph.co.uk/et?ac=000114832908976&rtmo=fqwlqass&atmo=ggggg3JK&pg=/et/00/9/6/wfra06.htmlBy Patrick Bishop in Paris

From a link at DRUDGE

$hifty

http://216.46.231.211/international.htm
Hey fellows - hope this finds all of you well. I'd like to contribute this article to the discussion of free trade. This article questions the results of the 'free trade' model expoused by the IMF/US. Unfortunately, the author doesn't seem to recognize that the one thing that needs to be free for all other things to be free is the medium of exchange, or money. He hints at the cause of the problem with this last paragraph. It is easy to understand why so much confusion surrounds the issue when the idea of 'free trade' is couched in terms of so-called 'Western Thought'. I think you guys will find the article interesting.

"Simply asserting something does not make it true. The US
Central Intelligence Agency may claim that the reforms in
New Zealand have boosted growth and moved incomes
towards the levels of the big Western European economies, but
the statistics it provides in its 1999 Factbook show the
opposite. Malaysia's economy recorded double-digit growth
during the first half of this year, despite its pointed refusal to
adopt textbook IMF proposals. Even today, the country is not
given any credit for the policies enacted to reverse the tide of
deflation which afflicted the whole region during 1998. The
varied experiences of the countries cited above suggest that a
headlong determination to subjugate everything blindly to a
preconceived model risks promoting a backlash that
ultimately can engender something as mutually destructive
as trade protectionism. However appropriate and successful
the neo-liberal model has been in the United States
historically, Western policy makers must recognise that the
attempt to impose a one-size-fits-all model all around the
globe exacerbates conflicts between the world's economic
powers, and engenders suspicion and dread in countries as
diverse as France to Korea. It triggers attempts to break away
from institutions that are perceived to be excessively in the
clutch of the "Washington consensus", such as the IMF, with
organisations that are thought to be more amenable to
pre-existing social and cultural mores. This is one factor
which continues to underlie the drive by the Asian nations
(now including China) to form an Asian Monetary Fund. And
at a time when the United States is showing a dangerously
high degree of dependence of foreign inflows to sustain its
growth and, indeed, its very economic system's success, does it
make sense to burn bridges with the rest of the world through
a one-sided advocacy of a single self-regulating global market
model?"

The Bloomberg article does not point out anything we didn't already know. It emphasizes, though, a view we've expressed before on these pages:

Those who believe that the central banks are involved in some kind of a conspiracy to control European and American society through the banking system must come to grips with the inclination of these same central banks to accomodate the political sector -- left or right. In America, Greenspan accomodates the Clinton administration with easy money; and, the ECB accomodates the essentially leftist governments of Europe by keeping the euro cheaper than the dollar. Hence the favorable comments from the Shroeder government on the weak euro, and the Gore campaign basking in an economy fueled by policies of a Republican central banker named Alan Greenspan.

Nothing in modern economic life happens in a vacuum -- not even monetary policy despite the claims of those who would like to see our central banks as separate from politics.


An even more critic al decision has to do with how the central banks and the political sector will deal with hedge funds and bank trading departments who through the use of cheap derivatives virtually have the ability to print money on a par with the central bankers -- an interesting quandary for the central banks, but a threat to their ability to institute an effective monetary policy.

P.S. One must not lose sight of the one thing that determines the views of a bureaucrat whether in the financial or political branches -- Job Security. That is both a blessing and a curse, and I'll leave it to you to decide which from your individual point of view.

http://www.SelectSectors.com/pog.gif POG Chart with 5 day forecast

FSAGX Wavelet Chart:
http://www.SelectSectors.com/wavelet.gif

Both Charts are pointing Up

ET (09/05/00; 19:44:53MT - usagold.com msg#: 36086)
Journeyman, Shifty, Al

Interesting segment, while I am in agreement that the IMF is no role model for anyone, I disagree that all "Western Thought" regarding free trade is misguided. I get worried when the "West" and its ideas are unilaterally trashed . I would still rather be sitting on our side of the fence, all in all.

Best to you!