http://www.gold-eagle.com/gold_digest_01/stott060601.htmlThe latest from Stott, not up to the Butler & Morgan camp standard Ag bulls. . . . but still worth a read right.
------------------------------------------------------------ R Powell(55436)Re<: ". . . I left word with the tower watch to keep a sharp eye open for Maddog and Richard 640. . .">
Amen from Netking, welcome to all newbugs, Dr Richard640 may as well come here too, lets face it, everbody else is! Richards spin on things would be a good blend, apples of gold in settings of silver in fact.

Econoclast (6/5/01; 09:06:46MT - usagold.com msg#: 55392)

You make some logical reason why no confiscation but when has the government ever been logical.

I believe confiscation will happen for these reasons:

1.) They got away with it once. They will be bold enough to think they can do it again.

2.) If the poster (I forget his name) is right about the powers that be making sure they get all the gold and leaving none for anybody else, this will be the only way to shake out whatever gold held by us goldbug no matter it will cost more than yielded. Also, if it comes to that point, the soliers and policemen who do the shaken down will most likely be paid in some form of military script. So it may not cost them more.

3.) If the rumors of Fort Knox being totally empty of gold are true, then when paper money does collapse the government will be desperate enough to try anything.

The Confiscation will not take the form of the last robbery.

No I believe it will be made under the drug confiscation laws. As things break down, those who sell drugs will have more reason to turn to gold. I already have reason to believe this is happening. Police shake down dealers all the time and take their cash. I happen to come across a shakedown and saw the cops take the cash but dealer claim something as a cheap copper good luck charm. Actually I recognized it as gold but the policemen didn't. He got to keep his "good luck charm" You can bet that dealer told his friends.

One day the government will get into it head the only gold in use is being used by drug dealers. No honest person would want gold. There's no honest use they would claim and no reason to have gold unless you were trying to hide asset made from drug profiteering. So they plan to seize any gold coins and jewelery as an effort on heir never-ending war on drugs.

Since the government can claim to be fighting drugs, it can reassure other countries this is not reputiating the debt they own to them or a sign of inflation or any or the other lies they claim.

Anyway, I would like my fellow goldbugs to watch out for the day when the government decided to make holding gold illegal because it is part of the drug trade.


> I don't believe confiscation will happen this time around.

> 1. (and most importantly IMO) In 1933, gold was official
> money. Now, gold is officialy a commodity and not money
> anymore. Since gold is no longer part of the nation's
> money supply, I find it difficult to understand how
> confiscation could be implemented. Could the gov't make
> soybeans or coffee illegal (and not be just laughed at)?

> 2. Because gold is no longer money, and has even been
> forced out of the investment picture by the paper
> pushers, the amount dispersed between the citizens of the > U.S. is most likely not very much (sorry, I don't have an > estimate). And the gold that is now out, is kept
> privately and quietly by people who I believe would not
> generally give it up easily. Any effort to "round up"
> private gold would probably cost more than it yielded
>

Gold, Silver, CopperSound money must be something people believe in, something they esteem as having value.

Sound money is not easy to come by, but not so rare that everybody can't have some.

Sound money should not decay, or, deteriorate over time, even under adverse conditions. Sound money should not be subject to inflation .

The soundest money that has ever been is Gold, followed by Silver and Copper. i hesitate to add copper, but it is somewhat rare and is handy for small purchases, taxes, etc.

Nickle, zinc and paper are not sound at all, only fools could believe in.

Cattle, spices, herbs, etc. can all be used as money, but are for short term use and cannot be considered, "sound".

Guns, could be considered sound money under the right circumstances. But they are cumbersome and dangerous if not handled properly, not for your "average" saver.

We have been taught by our gov't not to save for a rainy day. Interest rates are so low, it just does not pay to save any more. We don't raise gardens because it does not pay, we can buy our food much cheaper and easier than we can raise it.

We have been taught by our gov't to be "grasshopper's", it's really not "our" fault. We elect these "leader's", but they have a mind of their own and do not always do as they are instructed.

Hi, working-kirk! I enjoy reading your messages! You always seem to have some great stories.

When I read your post on confiscation, my heart sank because it seemed completely possible. But then I got to thinking about how other countries are encouraging their citizens to hold precious metals. How would it look if a nice Chinese family got arrested over here because they were carrying a few Pandas (something completely legal in China)? Wouldn't that make us look unreasonable? Or if Mexican citizens, who are being encouraged to buy silver, were shaken down at the border? We would look like the most human rights violating country on earth! Think about the new Moslem money! If American Moslems want to hold gold dinars, wouldn't the government be denying them freedom of religious expression if they interfered with that?

So now my spirits are back up - not because I think the U.S. is becoming more reasonable, but because other countries are!

SOUND MONEYAn esscential characteristic: Sound Money is not easily inflated or produced.

Please Orville, a little respect for our last coin with intrinsic value....the mighty Nickel. I know that most of you are not aware of the following startling fact but since Orville has broached this sensitive topic I feel it is my duty, as a Nickel hoarder, to inform you that our financial system is hanging by a Nickel thread. When the Nickel finally receives the full effects of Gresham's Law, an incredible hyperinflation will ensue....that's what I just learned from an operative of Bob Chapman and I think he's right.

I like nickle, but because of it's a fairly common metal, i don't keep much in the old vault'since there is not much room left. with gold and silver so dog gone cheap, heck even the sterling may be keeping company with the nickle, soon ;)

It seems that some (all) minimg stocks will be hurt by increased energy prices and availability problems. Do you have any thoughts on which companies that may have the best energy supplies?

MO VER MEG

Were I you, and I don't know enough of your situation to be intelligent about this, but making some assumptions...

I would select say 5% of my area, and sell logging rights to that area, (which finances you and the operation at least somewhat). Then, after it was clearcut, I would firekill the remaining vegetation, lay down some straight lines, and plant seedlings. Next year, and for a couple of years, you would need to mow the competing vegetation till the seedlings were able to self kill the competing stuff. You could do about 5% per year. The nice neat lines and regular spacing, make subsequent work a breeze, and insure straight growth. In 21 years, you can start over with the first 5%, or take every second tree if you want really fat logs.

j'Bear

That old vault of yours must be something to see...way to go.

I've found that the best way to save nickels is to throw them out back...yep, just toss them into a path leading to the rear of the yard. There's nothing like a brisk morning walk along a nickel coated path...bare footed is the best. When those nickels squiggy up between your toes it makes you feel tingly all over.

It looks like this AU and AG market is going to test our patience....again.

Sounds like a real hoot! make sure your bare feet are dry in freezing weather or you might get stuck on your morning stroll....

Sometimes when i need an i.d. tag, i put a nickle through the rolling machine. it makes a nice oval shaped blank, easy to engrave or stamp.

I suppose if it closes below 265 we can expect more of the same, yes, patience is the key.

Best of luck in (Y)our investments,
OG

auspec: Re: your remark of our jaded response to Lady Leigh's Fort Knox revelation. I believe we have discussed this issue before (perhaps many times) and so the appearance of apathy. However, we do have many newbies here and I have no objection to re-hashing this issue.

As I recall, I posted previously that Fort Knox was built in the 1930's and at that time was a perfectly adequate means of safeguarding the nation's gold. Here we are today in the 21st century, however, and with twenty something Russian suitcase bombs mysteriously "missing", the Goldfinger scenario suddenly becomes a real possibility. Fort Knox was never built to withstand that kind of assault and so if I were in charge of the gold, I would long ago have moved it elsewhere. Thus we have 2 possible explanations for the disappearance of Fort Knox gold:
1) It has been legitimately moved to "higher ground".
2) It has been sold.

Actually...there is...a third possibility...
It may at this very moment be residing in a Swiss account in the name of our illustrious ex-president. In fact, this is probably the most likely of the three! There ya go...mystery solved!! J' m'appelle Clousseau!!!

netking: You asked for comments on the COT being net short in gold. Well I commented on this a while back also, along with my prediction (based on other peoples predictions) that POG would drop. Actually this is a logical possibility and I based this statement on the fact that before "they" would let gold rise, they first must run the longs by driving it down. And they wouldn't want their friends to lose money on the downside so before driving it down, they first must run the shorts by driving it up. The result: a spike up and then a spike down. We've had the spike up. BTW: COTs are now very short at nearly 100,000 contracts as of 5/29.

Good, Fair, Thoughtful Response and Well Measured Too!And if you stay away from questioning FOA/TG in any way whatsoever you will never see the Tower Tool, Assassin EscapeTheMatrix.

Add TrailsDear Christian,
Up here in New England, some folks have banded together to make good use of their lots. And if I remember correctly, you have 967 acres. Snowmobile and Trail bike/FourWheeler clubs have sprung up and combined their resources with those of logging companies and state land to provide thousands upon thousand of miles of great trails. And the public, the private landowners and both the state and federal gov'ts have worked pretty well together on this. There is money to be made/shared by al, who work on it. If this might be your cup of tea, you micht check it out. I do not know your circumstances, but you might find this of use. We have several farms and log clearing operations going on right behind where we live and I bought the family a couple of snowmobiles. It is a great way to recreate without driving far. As for you, if you are in a seasonal type location...you can kick the users out after the season and have your peace and quiet back. Good for you, being able to have this much land.

http://www.ustreas.gov/opc/opc0079.html
Everything you ever wanted to know about Fort Knox.....
Except, how much gold (if any) is really in there.....

Funny why they keep it such a secret, being OUR gold and all.....Just makes you wonder....WHAT "THEY" ARE REALLY UP TO? sURE it is obvious, but so long as only "THEY" know the secret, "WHO" can say any different?

Go GATA, Go Gold, Go Nickle

OG

private conversation...please ignoreHey Orville, remember that ass chewing you gave me awhile back? Well thanks, I needed that.

Now Orv, if you're going to start pushing nickel (A GREAT IDEA) you gotta spell it correctly...it's "L before E except after K"...so in this case it's "nickel"....I think.

Now we're even, hehe.

http://www.newswire.ca/releases/June2001/06/c1522.htmlThanks, JMB for your gentle correction. I appreciate the opportunity to correct my mistakes instead of repeating them.

Looks like nickel is doing fine.

OG

FED has created too much money for US economy. This makes inflation certain down the road. The question is the severity.

When the USDollar gets "whacked" not today, this will put gasoline on the fire. As a "practical economist" always appealing to the law of supply and demand, I am pegging 2003 to 2005 as the inflationary window. Takes time for the money blunder to work through the system.

Gold & Silver will LEAD this inflation. Their ultimate high will be determined by the severity of the inflation. What about the deflation argument? The FED has shown its remedy...easy money!! They will pump money and even go as low as 1% Fed Funds Rate to fight recession or deflation!! All IMHO.

Flat as trader and going Golfing again...healthy and addictive.

Good Luck All
PS Sold Swiss Franc at loss...fight another day.

General Washington's VisionThank you for posting that story.

$hifty

Sorry you 'lost' on the Swf. I'm waiting to step in (long).
When the 'blue line crosses the red line' :')
(moving avg's of course)

i have wondered, where would the bullion banks or the likes of goldman sacks be classified. If they were "the commercial traders" then in the case of gold, we would expect them to be net short right?? and in the end(when ever that is ) they will be wrong right??? Thoughts??

Politics and the WGC seem to be coming together more and moreThe WGC is not my favorite organization, but this time they are moving in the right direction. The jist of this release is based on the premise that "gold is not a mere commodity"
There's a reason Central Banks continue to hold gold in their vaults. They are actually going after the IMF to rewrite the international gold transaction laws.....and they're using ammo from an former BoE and IMF official.

OK WGC......you have my attention. I am impressed, HOWEVER, now is the time to put your money where your little press release (mouth) is. How about spending some of that 22 million dollar advertising budget to lobby those capable of changing the laws....and while your at it, donate about 2 million to GATA.

That would do a hell of a lot more good than any glitzy magazine jewellery campaign. Gold is a political prisoner and your supposed to be our 'State Dept.' not a trinket cart selling jewellery on the streets of India.
***********************************************************

WORLD GOLD COUNCIL

For IMMEDIATE release � 6 June 2001


Gold's role in the IMF

LONDON: 6 June, 2001 � The current prohibition by the International Monetary Fund against using gold as an exchange rate peg is anachronistic and potentially damaging to some developing countries, it is said in a new report from the World Gold Council (WGC).

The WGC has published an updated version of its study into the role of gold in the International Monetary Fund's activities. The study, "The IMF and Gold", was prepared by Dick Ware, a former Bank of England and IMF official, currently working for the World Gold Council.

The paper analyses the operations of the IMF and its use of gold since the Fund's creation in the immediate aftermath of the Second World War. Mr Ware traces the developments in the Fund's policies and strategies through the economic turmoil of the 1950s and 1960s and the collapse of the Bretton Woods system, which culminated in the early 1970s in a deliberate attempt to write gold out of official monetary arrangements.

However, Mr Ware says that the current prohibition in the IMF's Articles against using gold as part of a country's exchange rate arrangements is anachronistic and should be dispensed with. For a number of countries it may be sensible to incorporate gold in a currency or commodity basket anchoring the exchange rate.

"We are not talking here about a return to an all-embracing Gold Standard. But for some countries the use, or part-use, of gold in an exchange rate peg might be beneficial. For some developing countries, especially where gold forms a significant part of their exports, establishing some sort of link to its price may make more sense than tracking the dollar and creating an exposure to the effects of US economic policy," he says.

However, such an arrangement would require a change in the IMF's Articles which would be a "long and arduous process. But times have moved on and there is no longer any need to anathematize gold, especially if its partial use in this way might improve the economic lot of a small number of countries which need all the stability they can get."

The IMF continues to hold gold as it serves an important function in underpinning the Fund's financial strength. Mr Ware says this is especially important today when the Fund is able to make available to members unprecedentedly large multiples of quota. Furthermore, it has remained the majority view of the Fund's members that it is better for it to retain its gold against unknown contingencies rather than to sell it and invest the proceeds elsewhere. The IMF's gold holdings have also recently been used to support the debt-relief programme for the Heavily-Indebted Poor Countries (HIPCs) and Mr Ware argues that such activities demonstrate that gold is by no means an idle asset.

Central banks are also large holders of gold and, despite some gold sales in recent years, the official sector still holds some 33,000 tonnes of gold, around 25% of the world's total above ground stocks. Of this the IMF holds 3,217 tonnes, about 10% of official sector holdings and a little more than 2% of total stocks.

Mr Ware says that one of the reasons why so much gold is still held by the official sector reflects gold's earlier role as an explicit anchor for both domestic and international monetary systems. While that role has changed in theory there is little desire on the part of many official holders to dispose of their gold. Countries such as the USA, France, Germany and Italy continue to hold significant stocks.

Gold is not a �mere� commodity, he says. "The major economic powers continue to hold - and see value in holding - gold in their reserves. The IMF's undoubted credit-standing is also supported by the gold in its balance sheet. Gold gives a monetary authority a degree of freedom on a different plane from that obtained by holding reserves in foreign currencies."

"Since no one can forsee what the next 50 years will bring to the international monetary system, the ability of the IMF to respond is paramount," he says. "At that stage gold might once again become a factor and both the IMF and its members would be pleased to have retained it."

The "IMF and Gold" is essential reading for anyone interested in the activities of the gold market and the international financial system. It can be obtained from the World Gold Council at 45 Pall Mall, London, SW1Y 5JG. Telephone: 020 7930 5171.
- ends -

Contacts: Dick Ware, WGC
020 7930 5171
Keith Irons, Bankside Consultants
020 7220 7477 or 07885 356 639




The World Gold Council is an international association of leading gold producers which has the primary aim of increasing demand for gold world-wide. The WGC has its headquarters in London and maintains regional offices in New York, Singapore, Dubai, Tokyo and Mumbai.

From the looks of it I won't be 'longing' for any Swf until it strongly crosses 61.5 (upwards). Some of these moving avg crossings give very accurate signals to go short,though, at this point I would be wary of shorting anything that was inversely correlated to the $US. Boy, if there was ever a long term short, when the gov't announces it's selling 1000 tons. Looks like a double bottom,?.Thoughts?

JMB (06/06/01; 07:34:38MT - usagold.com msg#: 55467)
"Please Orville, a little respect for our last coin with intrinsic value....the mighty Nickel."

according to:
http://www.centercoin.com/coin_information/library/jefferson_nickels_1938__present.htm

Jefferson Nickel content: Composition: 75% copper, 25% nickel

Netking, in a silver crisis, what do you think the chances are of silver-consuming photo film being outlawed? After all, we can buy digital cameras if we want to take pictures. I think film is the largest user of silver, and outlawing it would ease up demand quite a bit.

It would be VERY hard to confiscate silver, I think. Can you imagine troopers going from house to house rounding up people's sterling sets and raiding sock drawers?

My personal experience with the 'new economy' came to an undramatic end today. The co. I have worked for producing 3D cartoon SFX cash flow became critically low, and so a 'fix-it' ceo was brought in from New York. He 'fixed it' :)
We had, at the peak,400 employees. 80% were under 30 years old. Many took 'early retirement' packages. Fortunately for me being old and experienced(37), they laid me off to help clear the balance sheet, and are re-hiring me under contract in two months for the fall shows. At twice the money! The rationale is that this will make shareholders happy in the short-term, long-term who knows. Extremely stupid management. Now I can trade gold stocks all summer long:)

Your research indicates 25% nickel in the nickel...right you are. Now then for your next assignment....I think the nickel has more intrinsic value than any other of our coins in circulation. Am I correct? Guesses are accepted.

JMB (6/6/01; 11:54:55MT - usagold.com msg#: 55488)

AEL Your research indicates 25% nickel in the nickel...
right you are. Now then for your next assignment....
I think the nickel has more intrinsic value than any
other of our coins in circulation. Am I correct?

......... close call. The nickel is 25% nickel, and
nickel is going for circa $8/lb, while copper is going
for circa $2/lb. If pennies and nickels were the same
size/weight, and pennies were 100% copper (are they?),
then it would be even-steven between the two. In any case
the difference cannot be very great.

I forgot about the 75% copper in the nickels! So obviously
the nickels have much more intrinsic value than pennies.
("much" more! he!)

To Peter Asher and Al Fulchino (all others may scroll past please)

I did not want in any way to fan the few gossipy flames that seem to always burn at the edges (and occasionally flare up brighter than gold) here at the Castle's roundtable. I must grudgingly offer this post, however, having recently received an e-mail insisting that any silence on such matters can be construed as "agreement" or "submission" on particular items. I know for certain that at least one of you feels this way in particular, hence this post.

Peter, on Friday, we were all witness to an immature outburst by a poster known as Golden Truth in which he "played the victim card". Rather than striving for clearer perspective and better understanding, he chose instead to lash out and blame what he currently perceives as his investment mistakes on another poster or posters. In all my experience with people, this is not an act of maturity, nor is it the hallmark of this forum. To be sure, unless an investment advisor or money manager has been specifically hired for the purpose of managing a person's money, that person carries the responsibility for his own investment actions. It is as simple as that.

And yet, Peter, when I chastized this individual's behavior in a fashion suitable to the particulars of the occasion, you rose out of the grass like his personal white knight with an effort to turn the table on me. With some new logic that I have yet to understand, you claimed that this "victim" also had dyslexia, and somehow as a result of the dyslexia was not deserving of my rebuke. Peter, I am not a doctor, but I scarcely believe that dyslexia can be offered as an excuse for the immature denial of self-responsibility at issue at the time. Am I missing something here, or is adult behavior too high a standard to be promoted at the forum? It sure seems to have served us well in the past, but then, perhaps, you didn't have an axe to grind?

Al Fulchino, you seem to have embraced the idea that the poster called escapethematrix is either a friend or agent of mine specifically, or of The Tower in general. If he were, I would think that I would know -- for two reasons. One, this particular gold-related aspect of The Tower's overall operations is not widely publicized, privacy and discretion being the better part of valor in such things. It is therefore a reasonable claim that I have familiar relationships with all associates who are directly knowledgeable and supportive of these efforts. I would think I would know them if they were posting here.

Second, I have the pleasant task of greeting and welcoming each new arrival to this forum if and when they request to have a posting password issued to them. As this river of humanity flows steadily past my corner office at The Tower, it is indeed the case that a face known to me is among them, in which times my standard greeting is more uniquely tailored to suit the level of friendship. It could be said that the simple act of registration at the forum is how they demonstrate their support, for as a rule, sadly, they do not use their passwords to post.

With that, escapethematrix is not the handle that anyone known to me has chosen, and memory is not at issue here because my records show that this password was issued only five months ago. So, unless this kind person has since been "hired on" at The Tower without sharing this tidbit of information, then I am confident that he is not a "TowerTool" or somesuch as you have recently elected to "place your bets". Al, does it seem so unlikely or distasteful to you that anyone here could have possibly earned any unsolicited support from among the large population of eligible posters at this forum? To be sure, any "solicited" support as you imply arrives only by phone, e-mail, or sit-down meetings down the street beside the industrial coffeebean roaster (ref. ealier post).

Various projects have kept me well-occupied, so I don't know if this has been previously posted here. BridgeNews recently reported that the People's Bank of China is targeting January 1, 2002 to open the country's first gold market in Shanghai, provided all goes well with a trial trading system to be launched October-December of this year.

Quite a day, January 1st. Official introduction of the tangible euro currency within the European Monetary Union, AND a new gold market in China. Are you keeping pace with the changing times? To be sure, the world-reserve use of the dollar is little more than a legacy of the past.

Leigh(55486)- Good questions. I have to dash for some appointments, will reply soon PTL.

MountainGold/Megatron - Swf?, Si call's are best thing since sliced bread.

Thanks to MK, Randy & CPM staff for a great forum, THE place to be.

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=21302444&ID=cnniw≻ategory=Metals+%26+Minerals%3APrecious55 MILLION BUCKS!!!!!

Can you imagine what GATA could do with that kind of money? I saw a message from them the other day that mentioned the 'take' for the day (contributions) at $430.00. How can they possibly compete against the forces they challenge on that kind of budget?! Sorry, but I am going to ask all to support GATA (and LeMet) in any way you can.

I wonder if the majority of mines that contribute to the WGC 'ad campaign' pushed hard enough, they could squeeze a 'paltry' million bucks out of the budget for GATA.

The gold industry (WGC) is forever playing catch up with public perception. Now the WGC is playing on the 'historical significance' of gold, which is better than the fashion model image adorned in gold, but seriously lacking any political punch.

Use some of that 55 million to change politicians and bankers minds, not consumers shopping habits.
***********************************************************

From the article:

"...The $55 million campaign will focus on "warmth, sensuality, spirituality and the historical significance associated with gold..."

"...said WGC global marketing manager Michael Pace. "Gold isn't just about adornment. It's about a deeper inner feeling of confidence and positivity which is created when consumers wear gold..."
***********************************************************
btw-Randy at the Tower-It is refreshing to see an open discussion about posting conduct, good or bad, at this forum. Much better than posters guessing as to what their status is amongst the ones with their fingers on the button. In other words I do appreciate you being up front.
Please let me know if promoting GATA/LeMet is not acceptable.

The Fed is trading Treasury debt for GSE debt. Why? The IMF was something else before it was called the IMF. What was it? Presently Greenspan is doing what the Bank of Japan did years ago and that is using home mortgage collateral (GSE's) to increase money supply. Because of doing just that Japan went through a massive real estate collapse. Why is the Fed using increased loans on home mortgage to hold the stock market from falling? For money to be good it has to produce usefull and real things. If you inflate a $100,000 house to $300,000 is the house really worth more? Credit Creation gold is based on a bundle of commodities. What are they? All this came into being in 1976. According to the FED they own the money- even if it is in my wallet. The FED owns the gold even if I have it buried somewhere. Money is a contract against another persons labor owned by the FED. Stock and bond certivicates are owned by the FED. Who owns the FED. Are we the United States of whoever owns the FED. We are private property of the FED. I thought owning people was against the law.

A video commercial or still image ad with the following:
********************************************************

A Dollar Bill and Gold Coin on a split screen...
A lit match underneath each....
The dollar burns up....

The words: "How safe is your 'money'"
*********************************************************

Simple, to the point, yet subliminal and thought provoking.

We have to start somewhere. Little 10 second ads like that on CNBC would make a dent in the current preception of 'useless gold'.

Ok the soapbox is free.

Hundreds of millions will die in the journey
out of BABYLON.

The sin was that the EVIL was denied.

Thank you for your #55489-90You've confirmed my suspicions...The Mighty Nickel RULES! Our entire monetary system rests on the intrinsic strength of the nickel...a great starter coin for kids to save. The pre-1982 penny is a good one. Give them two "phonies" for one "copper" and they'll save like crazy. Some of the '82's are good but set them aside.

Now for your next assignment.

Do you think DROOY will break a Buck and/or will the Lease Rates break 2% before this "buying opportunity" ends? I kind think both will happen....what does your research indicate?

Could be a major low in NOW!!

Consider Canadian Dollar...had buy at 6520 basis June contract now 6560...this is good sign for commodities like Gold and Silver....my work suggests 6700 to 7000 in next 8 weeks.
No investment advice and IMHO Do your own due diligence.

I'll Let this Forum know when SF is breaking out.....Gold and Silver will follow the SF or all go up together.

Back to work(writer& trader) after nice round of Golf...a little work a little play...just like in kindergarden!

Later...
PS USDollar is strong since British Pound and Euro weak...wins by default.

Thanks for the update....??

Bring Official Gold (OG) into the daylight. Stop treating these Goldreserves as exiled in obscure catacombes. Change Gold's pseudo mystique into genuine public responsability.
Have the courage to populize it (again) without the necessaty for secret competition with currency. Stop the un-necessary (speculative) selling/lending(leasing) and derivative plays that are not at all compatible with the "anchor" function. Spend all 55 mil.$ on this kind of initiatives. Reserve a part of Goldreserves for creditcreation with Goldbonds and minimal interest. Use it to stop the permanent depreciation spiral. This is the kind of new research that I humbly want to suggest to major goldproducers and holders. Let the gold-industry come up with promotion money. Let Gold made a peace pact with its rival US$ and let them live together. AN adequate sensibilazation campaign might help to get creative thinking to start.

The excisting attitude versus gold is sclerosised. It is up to the goldproducers, despitite their fragmentation, to revitalise Gold in a more creative fashion. They lack the courage or the incentive or creativity ?

Stubbornly refusing to promote, responsibly, the investment purpose of Gold, against jewelry...is nefast for both.
Glowing Gold needs the firm perception of everlasting value.
Goldproducers don't carry any responsibilty towards currency support or promotion. It is not enough anymore to be a good miner. A BMW is a splendid car, but much more than that. Wakie, wakie, producers !

Sat down and did a little calculating on the values of the two coins being discussed.

The current "melt" value of the coins figured at $6.27/lb nickel and $1.76/lb copper are as follows:

The "nickel" 5 cent coin (75% copper - 25% nickel composition) is worth approximately 3.22 cents

The current copper plated zinc cent (1982 to date) is worth only a very tiny fraction of a cent. Couldn't even find a good quote on zinc to make the calculation.

HOWEVER, the older one cent coins are another story......

1981 and earlier one cent coins (pennies) contain 95 percent copper and the balance a mixture of zinc and tin, making them "bronze" rather than copper cents. At todays quote of $1.76/lb copper, the older cents are worth 1.169 cents each, or 16.9 percent over face value.

Worth picking out of pocket change ? Still alot of them floating around !

As for other "clad" coinage currently in circulation, the dime, quarter, and half are made up of an outer shell of 75% copper - 25% nickel, same alloy as the five cent coin, sandwiched over a core of pure copper. Was unable to find an exact weight of the component metals in these coins, but they would be far less (percentage wise) than the lower denomination 5 cent coin or the older one cent coins.

A not so off subject (IMO) response.
Randy, I stand corrected! Your "chastised this individual's behavior in a fashion suitable to the particulars of the occasion," was a response that I thought violated the agreed upon standards of decorum. I wasn't aware that �tit-for-tat� was an exception. I totally agree with you regarding your view of GT's post and had you at the time said your " To be sure, unless an investment advisor or money manager has been specifically hired for the purpose of managing a person's money, that person carries the responsibility for his own investment actions. It is as simple as that." the standards would have been upheld.

When I, in your words, " rose out of the grass" (now there's a dandy line) I was referring to a specific post of GT's where he requested our bearing with him regarding his communication difficulties. Beyond the essence of what you posted today, your rebuke IMO should have been on the E-mail line. What provoked me to �strike like a snake � as you imply, was what I considered an abuse of power. As the person who has the position of deleting pass codes at their finger tips, shouldn't you strive to the greatest degree to maintain dignity and decorum?

Finally, re << you didn't have an axe to grind? >> --- Most certainly!

I keep my ax constantly honed, (You should try some of Robin's cayenne laced brain formula) all the better to slice off the heads of concepts that violate empirical data.

Since you are obviously aware that I have taken a few swings in your direction,
I will identify the targets so that you may have a better chance to deflect the blows.

1) The discussion regarding the recipe for hyperinflation where you responded to specific quantitative analysis by saying you had already spoken proof to the contrary and were too busy to respond to someone who you consider should have read what you said and then had simply failed to understand the absolute truth of it.

2) You post frequent reports of Fed injections into the money supplies, at random apparently when they service your position. You do not address the quantitative totals as they may rise or fall, and a month ago I asked you if you could comment on the report of the �decline� in M-3, to which there was total IMO self serving silence.

You are, of course, not obligated to do anything other than what you are doing. And I am not obligated to remain silent while waiting to see, using CM's phrase of yesterday, "�whether or not (whatever) is a (whatever), time will tell."

Sincerely; (If I am a snake in the grass, try and regard me as) �your� snake in the grass: Peter

As Bobby Godsell of Mega-Hedger Anglo was made President of WGC recently he already called for countries being in hock to the IMF to pay back in gold. A procedure not allowed since the Jamaica Accord, I presume -all loans and servicing of same has to be in equivalent of paper-SDR's -
what a crock! Speaking of the fox in the chicken coop - pop goes the weasel!

I don't know, what to make of it, except my gut feeling is Bobby may sell everything forward - even Go(l)d. So in terms of supporting GATA I would suggest to invest just 1% of your net profit on your next gold/or mining deal to their/our case and it's even tax deductible for US. - And you'll never know, who was helping whom to the gain ...

Or do you - cb2

The Fed temporarily absorbed $3.445 billion from banking system reserves today through open market matched sale-purchase transactions. The market in federal funds was slightly soft, at 3.94 percent and below the FOMC target.

However, contrary to that action, the Fed also engaged in the addition of $470 million in permanent reserves via the outright purchase of Treasury bonds (dated November 2021 - February 2029) in open market operations.

Go figure. Then diversify into gold.

Asked earlier, "I have wondered, where would the bullion banks or the likes of goldman sacks be classified?"
This was asked in reference to the COT reports.
I believe that Goldman, Chase and others act as brokers for others and trade "on their own handle" for themselves. These guys also are the bullion banks, no??
As speculative traders or brokers representing the same, they should be classified as large speculators (not commercials) in the COT reports. But, when operating as bullion banks, they are contributing to the supply of product to the market so they are now "commercials" in the COT report, yes?? This is using a definition of "commercials" as either suppliers or users of product.
Rosebud99, good question. Is this a possible answer as to why the COT reports, like so many usually reliable indicators, often don't help in analysing the gold market. Goldman and others must love the confusion. Can anyone help Rich and Rosebud99??
Rich

Grow herb. Forget hemp. Put (hide) about 1 plant per acre for roughly 1000. Take the money out of the goverments pockets. Plus what a great product. SIr, I am sure you then realize the story with Dupont, and the making of weed illigal, due to the fact hemp was easy to make into paper, but natural paper was not Duponts angle on business, hence money. So they could not have it. I have an idea besides that one. Its a cool product too. Bamboo. You can eat it, use it fool all sort of building applications, it makes fuel, and its catching on. BambooPlantet.com (I think. Yep people are starting to actually buy it. BAMBOO, another plant of the future. But only when Mr. Babylon dies. Untill then free concretized energy, go gold.

I believe I extended to you the benefit of any doubt and the courteous title/role of "white knight" in describing your actions. In an attempt to capture an artistic flavor, I chose "grass" over either "rocks" or "earth" in describing the appearance of the mounted champion as he arrives upon the scene, cresting a nearby roll of land. OK, fine. So let's say you rose from the hoof-trodden soil or the bowels of the earth. Do you like that better? The fact that you see yourself as my "snake" tells me something. Not pleasant. Why is mine an ankle you desire to strike? Is a simple exchange of thoughts (limited to gold/economics/money) not enough to ask of a forum and those who participate? Is it absolutely necessary that your personally preferred "stance" be validated as THE single correct one through consensus or by attrition of those with energy to raise an alternate view as time allows them? You seem to have misjudged our limitations. We are not electing an emperor here. We are here to discsuss the many strands in this golden web that mankind has woven. I'll leave it at that.

Aunuggets says: "1981 and earlier one cent coins (pennies) contain 95 percent copper and the balance a mixture of zinc and tin, making them "bronze" rather than copper cents. At todays quote of $1.76/lb copper, the older cents are worth 1.169 cents each, or 16.9 percent over face value."
**********SIR Gold Nuggets -- where are you getting the $1.76 a pound price for Spot copper ? The Hobbits have lots of those old "dirty coppers" to sell you at those prices !!
<;-)

Every time I waltz into my favorite local coin shop to pick up a little junk silver the dealer tries to sell me war nickels. (some �42, all �43, �44, �45 nickels composition as follows: - 35% silver, 56% copper, and 9% manganese. He tells me that he will sell them to me at very close to silver melt, I think. He tells me also that 20 of these nickels are worth more than 10 post '64 dimes. Well whoop-ty-do. Something seems inconsistant there as it wouldn't take much to exceed the value of 10 post '64 dimes. I haven't bitten yet. Anyone out there know much about these particular nickels?

I was wondering also: Nickel must have been in high demand for war related reasons. But what? � Copper penny production was replaced by steel in �43. Looks to me like we need a war (real war) to be able to cash in on the pre-�82 pennies and non-war nickels.

Another note: - apart form the storage problem I am convinced that circulated 40% Kennedy's are the best bet for future melt when silver goes to the moon.

Diversify, I say: - it is fun if not profitable. Like this: a couple of certified MS 63 or MS 64 common St. Gaudins, $1,000 face bag (junk) silver, $1,000 face 40% silver, 2,000 Silver Eagles, 1,000 BU 1921 Morgan Silver Dollars, 100 (1 oz)Gold Eagles, 100,000 pre-�82 pennies and 25,000 rounds of lead. Something strange like this will pay off some day. This is definitely investment advice. Accumulation advice - Gold Eagles only! No, I am not associated with USAGOLD, save as a small time customer and a big time recommender. USAGOLD would, of necessity, have to distance itself from me. Too far over the edge.

HBM

Much like 'government intelligence'

since Alan Greenspan can't even definite money, how are we as mere mortals supposed to define sound money.

I may not know what sound money is, but I definitely know what it is not.

Sound money does not go like this...

Print currency => buy gold, print more currency => buy more gold, continue printing currency like it is going out of style => sell gold

you now have sound money because it is backed by gold...not

Am I the last sheeple on the planet earth or what?

That's all from Tannehill

Your're on track! However, I wish you would address Peter's #2. I've often asked myself about these injection proclamations. "$2 billion today; so what? How 'bout a comparison to same period last year?" What did Lord North say about lies, damned lies and statistics or do I have the wrong source? Regards.....CM

OOPS !! Can you tell I don't deal in copper much ? (grin) Reading (or misreading) the wrong charts..... A penny is still (less than) a penny.

In '82 the Mints pumped out Copper Pennies (AUNUGGETS would say Bronze which sounds even better) and phoney Pennies. You'll have to weigh each one to determine which one you have. Have your kids keep them all just to be on the safe side.

http://www.usagold.com/wgc.htmlExcerpt of this week's report from WGC:

"On Monday Saudi Arabia slashed customs tariffs on imports into the Kingdom from 12% to 5%. This move comes hard on the heels of a decision earlier in the month to ease trade regulations by allowing preferential tariffs on imports of goods from other Gulf Co-operation Council (GCC) states and will help Saudi Arabia qualify to join the World Trade Organisation. Prior to this decision 95% of imported gold jewellery entered the Saudi market through parallel routes due to the high customs duty. It is thought that the estimated 30 tonnes of jewellery entering the Kingdom via these routes will now find its way through legal channels."

If I remember correctly, it takes about 18 of the war-time era nickels to equal a troy ounce of silver, whereas 10 "PRE"-1964 dimes would equal only approximately .72 troy ounces of silver.

Agree with you on the 40% silver JFKs..... Lots of upside potential with very little downside risk, currently selling at less than 35% premium over FACE VALUE.

Esteemed HBM...

RE: "Diversify, I say: - it is fun if not profitable. Like this: a couple of certified MS 63 or MS 64 common St. Gaudins, $1,000 face bag (junk) silver, $1,000 face 40% silver, 2,000 Silver Eagles, 1,000 BU 1921 Morgan Silver Dollars, 100 (1 oz)Gold Eagles, 100,000 pre-�82 pennies and 25,000 rounds of lead. Something strange like this will pay off some day. This is definitely investment advice. Accumulation advice - Gold Eagles only!"

Agree...I like making my "accumulation" fun also... But Am curious...would you please explain reasoning for "Gold Eagles only"

Thanks,

SLD

http://www.federalreserve.gov/Peter posted as follows:

---"2) You post frequent reports of Fed injections into the money supplies, at random apparently when they service your position. You do not address the quantitative totals as they may rise or fall, and a month ago I asked you if you could comment on the report of the �decline� in M-3, to which there was total IMO self serving silence.---END---

To be sure, my silence is not self serving, but links and stats and thoughts that I leave behind when I DO post certainly are! Frequently, I use the forum like a cyber notepad to record the gold-related events of the day for MY future reference. In that regard, I'll not offer an apology that my efforts do not always suit the specific needs of all posters. It was never envisioned by anyone here in The Tower (or over at Centennial's "castle") that they would. I rather doubt that someone could be the cyber-librarian-on-demand for one and all, yet I am amazed at how close some have come to providing exactly that service from time to time, such as we see occasionally from ORO and Trail Guide.

To clarify, Peter has somewhat mischaracterized things in his text. It is not "Fed injections into the **money_supplies**" upon which I have kept a reasonable watch. More correctly, it is their injections into **banking_reserves** that holds my attention, and is the subject of many forum "notes". If I might perchance gain any insights in this dollar arena, I have found that they come from these daily monetary policy operations rather than from the daily size of M3.

But if it is M3 that you want, and I must deliver something of value, then here is a leg up to the filing cabinet in which you can appease your every curiosity in that regard: the Fed website (URL given above) contains a wealth of historic data.

"Snapshots" of unadjusted data for M3 over a reasonable epoch is as follows (units are billions of dollars):

May 21st: 7506
Apr 2001: 7505
Mar 2001: 7392
Feb 2001: 7297
Jan 2001: 7226

Oct 2000: 6946
Jul 2000: 6810
Apr 2000: 6782
Jan 2000: 6595

Oct 1999: 6327
Jul 1999: 6218

It grows like the corn. I therefore "watch it no more than necessary".

I hope this was helpful.

If you are asking about mining companies with energy supply. I am not sure as I don't invest in N. American Miners other than INCO (N) the Canadian nickel producer and Franco-Nevada (T.FN) which is a natural resource royalty company. I do have shares in HGMCY and GOLD, but they are profitable unhedged gold miners in SA, and I don't believe that they have any energy concerns. I heard from people I know in the Gold mining business in Nevada, and Copper mining in Arizona that power costs are killing these producers. NEM and ABX supposedly have some assurances from the state of Nevada that prices will be capped for their benefit, however, I heard (rumors) that the higher energy costs have already taken a toll as there apparently has been some management shakeups directly due to the energy crisis. Also NEM and ABX are extremely energy intensive as these miners are "Shake and Bake" operations (Mill and Autoclave) because they have refractory ores that require more costly processing than oxidized ore. There may be some similar issues with PDG at Getchell when they start up operations again, however, Cortez-pipeline I believe is better off due to oxidized ores. In Arizona, PD's troubles are well known, as all copper miners are extremely energy intensive. The situation must be the same with their competitor Grupo Mexico (formerly ASARCO). I personally know of several small Nevada and California operators that are closed or have severely restricted mining as a direct result of high energy costs. These problems in my opinion will get much worse. They have to unless someone(?) or some entity will subsidize these miners. At current metals prices, I simply don't see it happening. For now I am content to buy physical gold/silver and the 3 mining shares that I have mentioned. N. American miners are just way too risky right now with very few minor exceptions. Cheers!

- Black Blade

from: http://groups.yahoo.com/group/EnergyResources (?) (probably)

Date: Tue, 7 Nov 2000 16:18:44 -0500
From: "Rick Reese"
Subject: It ain't just oil

A book from Youngquist arrived yesterday: Mineral Resources,
Economics, and the Environment by Stephen E. Kesler. The
audience is the clan of geologists, and it is filled with the
jargon of this clan.

On page 322 is an interesting table of minerals. They are sorted
on the basis of known reserves, divided by the annual rate of
current consumption, estimating the years of supply remaining.
The author shouts at us to make sure that we understand that
these figures are overly optimistic, because they do not reflect
the effect of a growing rate of consumption, or a declining rate
of production. He does not present us with Hubbert curves of
discovery or production for these minerals.

The mineral reserves that will be eliminated in 10 to 25 years
include: thallium, sulfur, mercury, gold, arsenic, lead, zinc,
diamond, silver, and indium.

Those that will last 25 to 50 years include: molybdenum, oil,
selenium, fluorspar, copper, uranium, bismuth, manganese,
graphite, barite, strontium, peat, tin, and cadmium.

Natural gas is in the 50 to 100 year list. For gas guzzling
North Americans, the remaining supply will be consumed much
sooner. Also in this category are: cobalt, vermiculite,
phosphate, rhenium, antimony, tantalum, ilmenite, tungsten,
zirconium, and nickel.

Lately, I've been thinking about other Hubbert curves. Things
close to peak, or beyond peak, may include global fish harvests,
fresh water production, and timber cutting. Reserves of our
precious and priceless topsoil likely peaked somewhere around
10,000 years ago (on dry land, not below water).

Take care,

Rick

"Do you think DROOY will break a Buck and/or will the Lease
Rates break 2% before this "buying opportunity" ends?
...what does your research indicate?"

.......... hoo, boy! My "research" in that area is wholly
inadequate, sorry. I am not much of a paper player, and
these little squiggles to and fro while the sham "market"
survives do not interest me much. Just a settin' and a
waitin' for the nuclear explosion...... ;-)

Have you ever thought about growing asparagus? If your soil is right it can yeild $3000-$4000 per acre if done right. People really buy it in the Spring if it is fresh. :)

Short History Lesson - Green Gold, Greed, and Politics

Your right about DuPont and the hemp legislation. It was the combined efforts of Harry DuPont (of DuPont Chemical), William Randolph Hearst, and Harry J. Anslinger (former head of the Dept. of Prohibition - which later became the ATF). These principals had special interests in making hemp illegal. Harry DuPont as you said, had an interest as DuPont Chemical had the chemical bleaching process for wood pulp in the paper making process, William R. Hearst had extensive timber holdings and a newspaper conglomerate (he also made up the term "Marijuana" for hemp - it sounds foreign and therefore evil), and Harry Anslinger who headed the Dept. of Prohibition that was later converted into the ATF - Bureau of Alcohol, Tobacco, and Firearms when the 18th amendment was repealed. Due to political, and apparently monetary payoffs hemp was made illegal to benefit the corporate financial interests of Hearst and DuPont. Anslinger, famous for the government sponsored campy cult-classic film "Reefer Madness," apparently used this issue as a political stepping stone. All this occurred although there never was a social problem associated with the abuse of cannabis. It was purely economic as hemp manufactured paper was more durable, required no chemical bleaching, was easily recycled, and was a renewable resource with rapid growth requiring less land. Of course the continued use of hemp (also useful as a textile, source of high quality oil, etc.) would have meant less profit for Hearst and DuPont. It had very little to do with the evil drug destroying the morals of the youth of America as portrayed. That is the short version.

- Black Blade

As TQ (from another time and another forum) and I have exponded on since last Fall, commodities do not show much inflation. In fact more deflation than anything else! Point is that global economies are, and have been, contracting at a higher rate than most anyone seems to recognize. Not so easy to find a commodity bull.. outside $ and maybe soybean meal, and that is thin pickings. Houston real estate? Yea, homes are appreciating because of the local energy and technology driven economy but an exception to the contraction, I think. Want to solve the energy problem? At least on a cyclical basis put the breaks on world economies.

Hey Moutaingold! You called that one.. strong $ caused by weak # and Euro; but you forgot Yen and Swiss Franc! Nothing get's past you MG:)

Am honored to be a humble part of this forum but it is coming up way short on sex appeal! Where are the female posters to flirt with!!!! Where are you when I need you Maplegirl:(

Gee, hope I am not being too frivolous.

Inflation is being built NOW for 2003 to 2005 and then another spike in 2010. Inflation has a very predictable 30 year cycle top to top....1973 to 1975,1980. There is no general inflationary pressure now.

This will change as the massive money creation works its way through the system. Couple this with USDollar decline and a 8% to 15% inflation rate is likely. Could go to hyper inflation. I give it a 20% probability.

Gold will start to move roughly 18 months before the "sweet" spot of inflation is visible. We are close to that move.

Deflation is not likely. The FED will go to 0.25% FED Funds rate to counter deflation. They will bailout everybody they can. IMHO Later...

Boy the Lakers look like the NASDAQ at 5000!!!

PS Long Canadian Dollar and no Swiss Franc position.
Long AEM, GLG and PDG, Silver and Gold bullion...wish I could buy 100k Silver.....say Granpa..how did you make your fortune back in the O's.....Silver, my boy Silver!!!

Sir

Re: my post # 55510

As for accumulation (Gold Eagles Only) I have to admit that I sort of had my tongue in my cheek when I made that statement. I do not have scientific thoughts to support it. It is just my approach. Let me say this, if I lived in Canada, I would probably prefer Gold Maple Leafs and if I lived anywhere else in the world other the U.S. or Canada, I would probably have said Krugerrands.

Certain things are unique about the Gold Eagles for U.S. citizens.

1)They are by congressional decree, legally classified as numismatic coins.
2)Except during times of high volatility in POG, the premium, though higher than the Kruggerrand, tends to be very reasonable and very stable.
3)It is my opinion that they are now and will continue to be the most liquid of all near bullion in the U.S., and any lack of liquidity in the future would only arise from the possibility of their someday becoming de facto numismatic coins, a situation, should it arise, would result in a tradeoff of higher value for a small reduction in liquidity.
4)Remember, I am talking accumulation here, which by my definition, means not to be sold off but to be passed on to my heirs. The only exchange I could contemplate for myself would be that of delivery from certain death and or imprisonment, i.e. passage from Nazi Germany to a safe haven. (The trading of one safe haven for another). If one's definition of accumulation were different from my definition then more speculation would be in order in the form of numismatic gold, so-called double play. I would not criticize anyone's choice in that direction, just as long as they have the right motivations. The point is that we are in a temporary situation whereby we can accumulate with minimal downside risk. I just have a hard time paying twice as much and more for less than one ounce of gold. There are many arguments for Pre-33 US gold and I will not take exception to those arguments at this time; however, I reserve the right to address certain disagreements with Numismatic Gold at some point in the future, whenever I get my ducks in a row. I have misplaced the best document I have ever seen arguing against the point that so-called protection from confiscation of Pre-33 US Gold has some abiding value over Gold Eagles. I have been looking for the document off and on for several months. When I locate the document, I will post it on this forum. It will, I think, generate enough real and honorable discussion on this forum, to settle in most minds the question about the "hoped for" advantages of confiscation avoidance expected by the holding of Pre-33 Gold as opposed to U.S. Gold Eagles. Of course you can tell which way I lean, else, I would not step forward with the accumulation preference of Gold Eagles.

Very respectfully,

HBM

PS: The salutation in your post did not go unnoticed. I was deeply honored by it.

It would appear that after a brief episode of running roughshod through the hallways of the Great World Monetary System,all the while observing none of the rules of decorum and protocol;our true and honest friend,gold,has been effectively subdued.Perhaps a more fitting description would be lobotomized'strapped to a gurney and relegated to the Monetary Recovery Center,where it must re-learn it's proper role in the grand scheme.

One of these days a unspoken,powerful ally of our friend will hurl an unstoppable object through the bars of suppression and truly set our friend free.

Cuckoo's Nest II,coming soon,we hope.

Good shot Moutaingold! But when you go golfing in that little mountain town, watch out for the guys with ten gallon hats! They are Texan bandidos looking to rape and pillage your county! Tell the local constable about them but be sure and draw picture of their hats, repeat yourself twice and above all make sure they are looking at your lips. Otherwise it will take them MONTHS to figure out what is going on:(

Nice to engage you mi amigo.

Sir,

Thanks for that information. It confirms my suspicions all along. When the local coin dealer said that 20 wartime nickels are worth more than 10 post-64 dimes, he meant, "20 wartime nickels are worth more than 10 pre-65 dimes. Those 40% Kennedys sure do look good at 65 cents or less per coin, don't they?

Very respectfully,

HBM

PS: Wartime nickels and circulated 40% Kennedys only make sense as melt supply when spot goes up and away, don't you think. I just cannot find myself convincing very many people as to the value of these coins just to get them to buy them from me. The efforts of educating a prospective buyer would be lost, it seems, due to the shadow cast on the sellers motives. In other words we would have a liquidity problem were it not for the established melt value vs. current spot at the time of liquidation.

http://biz.yahoo.com/apf/010606/california_economy.html
California's Economy Is at Risk As Power Crunch Continues

Snippit:

About half of Southern California Edison's 4.3 million residential and commercial customers and two-thirds of the 4.8 million served by Pacific Gas & Electric will see rate increases that average around 37 percent. Agricultural customers will pay 15 to 20 percent more under the plan. Small businesses say they will adjust to the higher electric bills, but can't absorb much more in the way of increased energy costs.

Black Blade: Looks more grim each passing day. The agricultural problems associated with higher energy costs could kill the industry, or at least put an end to many family farms. The California energy crisis could very well be a category killer as far as agribusiness is concerned. Food costs have already risen as much as 50% in some areas so far this year. The question is how much pricing control is left in the agribusiness?

Although I am a much dimmer bulb than most, I am pleased to know that I can read and understand the same tea leaves as you. I'll leave the debating here to you as you like it. Thanks.

We've had no CA grapes here in the MW to date. That's a bit unusual. Perhaps this condition is symptomatic?

HBM,

I think you already covered some very good points concerning (modern bullion) U.S. Gold Eagles in favor of some of the heavily touted pre-1933 gold coins:

"Certain things are unique about the Gold Eagles for U.S. citizens.

1)They are by congressional decree, legally classified as numismatic coins.

2)Except during times of high volatility in POG, the premium, though higher than the Kruggerrand, tends to be very reasonable and very stable.

3)It is my opinion that they are now and will continue to be the most liquid of all near bullion in the U.S., and any lack of liquidity in the future would only arise from the possibility of their someday becoming de facto numismatic coins, a situation, should it arise, would result in a tradeoff of higher value for a small reduction in liquidity.

4)Remember, I am talking accumulation here, which by my definition, means not to be sold off but to be passed on to my heirs. The only exchange I could contemplate for myself would be that of delivery from certain death and or imprisonment, i.e. passage from Nazi Germany to a safe haven. (The trading of one safe haven for another)."

"......to settle in most minds the question about the "hoped for" advantages of confiscation avoidance expected by the holding of Pre-33 Gold as opposed to U.S. Gold Eagles......", I think you have to look at the fact that bullion gold eagles ARE declared numismatic by the U.S.
Government, and the fact that they sell for many multiples of their "face value", by definition the meaning of "numismatic" coins.

As you infer, the farther you get from a base commodity value of any material or "item", the greater the degree of "relative liquidity" involved, at least in MOST cases.

I believe I've read the material you are referring to concerning pre-1933 numismatic gold vs. modern bullion gold, but don't recall the source.

In any case, there is nothing in the end that will prevent the confiscation of ANY gold if those who make the rules decide to change those rules on a whim. Just because "numismatic" gold was "exempt" from confiscation in the past as many claim (it actually was not until sometime in the 1950s if I recall - leaving a questionable void of several years in the mean time), doesn't necessarily mean the same "rules" will apply in the future. If they can make 'em, they can certainly change 'em !!

One of the arguements of the 1933 dated St. Gaudens double eagle under scrutiny by the Secret Service (et al) in recent years as being "illegal" was that gold coins were "illegal" to hold from Roosevelt's 1933 grab until the "clarification" of the law in 195?.... If that were the case, then ALL gold coins made prior to the clarification would or could be considered "contraband". Otherwise how could they have been held "legally" during the period of 1933 - 195?..... and if not legal then, how could they exist "legally" now ? Same old "spin" on government edict.....

Like all laws, there were "loopholes", and like all laws, there will be "loopholes" in any future confiscation attempts.

http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR200106061180.3_64d10015e1d625da
Snippit:

Jun. 5--An electricity supply forecast for gloom in June was based on overly optimistic assumptions about how many plants would be off-line. The gloomy prediction was based on a historic average of 2,500 megawatts from power plants being unavailable because of maintenance or breakdowns. In fact, plants producing 8,500 megawatts were off-line Friday, and that figure is not expected to get down to 3,000 megawatts until the end of June. Whether the 6,000 megawatt difference will translate into more blackouts will depend on the weather and the availability of power from other states.

Black Blade: More Grim News - Moderate temperatures have helped, however, the summer season hasn't really begun yet. The California economy is at risk with higher energy costs and the potential loss of manufacturing capacity due to potential (very likely) rolling blackouts. And to think that the recent heat wave saved California by melting the low snowpack providing short term relief in the form of a quick dose of hydroelectric power. It also means that there will be less hydro power this summer.

I think your comment that "......we would have a liquidity problem were it not for the established melt value vs. current spot at the time of liquidation" pretty much explains my own feelings concerning such coins as the 40% JFK halves.

Supposing a cost basis at your mentioned 65 cents per coin, you can figure an unlimited upside potential (depending on just how close to the moon silver does eventually fly), while at the same time, having an absolute risk factor of 15 cents per coin, or 30%.

After all, we can always spend 'em at the corner market if all else fails....... (grin)

http://www.thestreet.com/markets/detox/1450464.html
Snippit:

The problem in contemporary economics, at least on Wall Street, is that no one concentrates enough on relative prices. An economy can slow primarily because one sector has been hit -- tech, in this case -- but if other sectors are experiencing a bottleneck in the supply of labor, materials and capital, inflation can still rise. Because too little was invested in energy production in the '90s, prices in that sector are soaring. And something similar can be seen in health care and housing.

However, if the Fed prints money so that people can pay for higher-priced items, including energy, the economy doesn't have to make a big adjustment -- for the moment. Paul Kasriel, chief economist at Northern Trust, gives a simple illustration of this point. Say an agricultural economy experiences a drought and production falls off. The central bank increases money supply. But the economy needs water to make the corn grow, not money. Instead, more money simply means higher prices. And today, the Fed can't supply natural gas, gasoline, new drug therapies, residential housing, or anything else that is in short supply. All it has to offer is paper money. "This increase in money supply is a recipe for inflation," Kasriel says.

Black Blade: DITTO! Good article, well worth reading. Short and sweet - to the point!

BTW, Cavan Man - I kinda miss Concord grapes, haven't had those for years.

http://www.sfgate.com/cgi-bin/article.cgi?file=chronicle/archive/2001/06/03/BU236485.DTL&type=business
Debt could swallow up consumer, say experts

Snippit:

The rising tide of consumer debt could become a torrent that drowns the entire economy, some economists warn. With industry already in a slump, the only thing that has kept the nation out of recession has been the willingness of consumers to dig into their pockets and buy. That spending has been fueled by an ever-increasing use of credit. Now, though, as the economy swoons, jobs are disappearing, income growth is slowing and the personal savings rate is shrinking. With 6.6 trillion in consumer debt outstanding, the American shopper is literally in danger of maxing out. That could knock out the final prop holding up the economy.

Black Blade: Some of us here have discussed this in the past. Investors are tapped out. Who is left to "float" the market? Read this article and you see why I say get out of debt if at all possible. Definitely a good time to accumulate PMs as the economic "Big Picture" deteriorates more rapidly.

Also, some interesting news on the NG front that I might post this weekend if time permits. NG prices are set to surge again as a number of factors converge. Stay tuned.

part of your chat:


HBM,

I think you already covered some very good points concerning (modern bullion) U.S. Gold Eagles in favor of some of the heavily touted pre-1933 gold coins:

"Certain things are unique about the Gold Eagles for U.S. citizens.

1)They are by congressional decree, legally classified as numismatic coins.

me: can you tell me where I could see this for myself? I was not aware of this and was always told that only pre- 1933 were thought of as numismatic and likely to be protected from confiscation. I do believe you both, but I would like to do my own due diligence, just to satisfy myself that I spent the time to see for myself. Thank you in advance.

http://www.forbes.com/2001/01/30/layoffs.html;$sessionid$DNSW0BYAAABILQFIAGWCFFIMore layoffs with each passing day. Is this the sign of a healthy economy? Hmmm....

Sir

I would like to comment upon two of your points:

You say, " I think you have to look at the fact that bullion gold eagles ARE declared numismatic by the U.S. Government, and the fact that they sell for many multiples of their "face value", by definition the meaning of "numismatic" coins." End of your quote

My comment:

I am not sure what you are referring to as per the second half of that statement. As best as I can recall, there was an official ruling deeming as numismatic those coins that attain a market value in excess of 115% of the market value of the metal content. I do not recall any definition as to the relationship of the selling price of a coin to its face (legal tender) value having been used in the determination of numismatic status. Of course I am being technical and what you say would apply anyway.


You say, "In any case, there is nothing in the end that will prevent the confiscation of ANY gold if those who make the rules decide to change those rules on a whim. Just because "numismatic" gold was "exempt" from confiscation in the past as many claim (it actually was not until sometime in the 1950s if I recall - leaving a questionable void of several years in the mean time), doesn't necessarily mean the same "rules" will apply in the future. If they can make 'em, they can certainly change 'em !!"

My comment:

Amen, brother Ben!!!!!!! What you say has been crystal clear to me for a long, long time. I am always in doubt as to the motive of those who would encourage others to buy from them by misleading them into thinking that they have a better chance of non-confiscation just by buying pre-1933 gold coins. I would think that a law passed by both houses of congress declaring that certain coins, i.e. US Gold Eagles, to be defined as numismatic to have a much better chance of passing muster than those classified by official proclamation (pre-1933 gold) with the required premium of 15% over metal content price. As you have said. It doesn't matter. A totalitarian government can change the rules any time it wants without so much as a whimper by its subjects.

Very respectfully,

HBM

Al Fulchino @ # 55538
me: can you tell me where I could see this for myself? I was not aware of this and was always told that only pre- 1933 were thought of as numismatic and likely to be protected from confiscation. I do believe you both, but I would like to do my own due diligence, just to satisfy myself that I spent the time to see for myself. Thank you in advance

Sir,

I am out of town at the present time. I will find the source for the congressional definition for Gold Eagles when I get back to my office in a few days. It comes straight out of the legal wording in the 1985 law authorizing the minting of the coins. Maybe someone will beat me to the punch and save me the trouble. If not I will provide you with the answer. On my word of honor this is not a rumor sort of thing. Of course as we have already stated if gives us no guarantee that congress will not change the rules at any moment it might be pleased to do so.

Very respectfully,

HBM

You do not pay double the gold price for pre-1933 gold coins unless you want to. The entry level ;pre-1933 European coins run between 14% and 20% over the gold price -- a small price to pay in my estimation for the extra layer of protection. One ounce bullion coins run 5% to 6% over the gold price, and the quarter ounce coins run in the 10% to 12% range.

If you are looking for the definitive text on pre-1933 gold coins and confiscation I would suggest

"How You Can Survive a Potential Gold Confiscation"
by George R. Cooper, J.D. and Michael J. Kosares

We would be happy to forward a copy to you. It is the product of extensive research.

It is absurd to believe that something issued as bullion coins and distributed to the tune of millions of ounces in the United States at bullion prices (and not likely to accrue any numismatic value anytime soon) would not be subject to confiscation if the government decides to put a stop to the flow of gold as it did in 1933. What you must attempt to guesstimate is what the government will do in the case of another confiscation in the future. Any laws on the books right now may or may not necessarily affect the law if the monetary system is in dire straits and the government is forced to confiscate in order to keep the populace from emptying the banks. In the case of pre-1933 gold coins they have already enjoyed a long history and lengthy precedent as collectors' items. If you believe that Eagles are numismatic items, I believe you will get your chance to prove that in court if there ever is a confiscation because I believe that is precisely what they will take. That is your choice, but I believe you are upping your risk. Nothing in this regard is etched in stone. Your investment decision is relegated to probabilities, not certainties and each investor is going to have to make choices.

In 1933, numismatic gold (which was defined as any gold coin minted before 1933) was exempted because it didn't threaten the government's objective of keeping the masses in the currency. Further precedent susequently further solidified the notion that pre-1933 gold coins were considered collectors' items and exempt from government The enforcement problem was another problem for the government. There were hundreds of coins of already established scarcity and rarity that would have been turned in and melted down at $20.67 per ounce had the exemption order not been issued. Under the constitution (Fifth amendment), we still have the protection from government confiscation "without just compensation." The Roosevelt administration feared an avalanche of law suits from aggrieved individuals who had their collector coins melted by the government, so they decided that it would be easier just to let it go. And let's face it, the more important objective was to stanch the flow of big money and bullion -- hence the confiscation and clamp down in the first place.

As you might imagine, this is a complicated issue and I can't reduce a nearly 50 page monograph on the subject including support documents to a few paragraphs. For someone to suggest though that the government would somehow allow bullion to circulate when bullion has been confiscated is preposterous and at cross-purposes with the objectives of a confiscation, i.e., currency controls, protection of the banking system, etc.

The best protection, though not foolproof, is pre-1933 European gold coins and for the extra 8% to 15% over the gold price well worth the price -- especially at these artificially suppressed prices. To me it is rather foolish, if you believe a confiscation possible or probable, to save the 10% or so but expose yourself to a much more serious problem down the road -- being separated from your gold at the time you need it the most. With your gold holdings, I would not advise being penny wise but pound foolish. (I might add at this point that in 1968 as the London Gold Pool was breaking down and investors in the United States had a heightened interest in gold as a monetary hedge, the German 20 mark coins that so many of our clientele have purchased sold at 75% over the gold value; in 1971 just before Nixon devalued the dollar and shut the gold window, they sold for 175% over the gold price. Few people know that between 1933 when gold was confiscated and 1975 when gold was re-legalized pre-1933 gold coins traded freely in the United States.)

Having said all that, if you believe, or any investor believes, that a confiscation is improbable or impossible, he is better off in the bullion coins and saving the extra cost. If you are half and half on the concept, make your holdings half and half. If you believe, as I do, that confiscation is a strong possibility or even a probability, the extra cost, as I have said, is a small price to pay. My own gold holdings are primarily pre-1933 if that means anything to any of our readers.

As I said to Black Blade, I say to you: Thank you. Those posts of yours are most helpful. Besides that I get depressed just going to the FRB site. Seeing it come from you makes it somewhat more bearable [no pun intended].

Sir

I have always considered your posts regarding the Fed injections to be a "checking the pulse and blood pressure" sort of thing. I for one have always appreciated the information and do wish you would continue. When this sort of information is available for us, it saves time for us to dig into other areas. As for your motives, I believe that you deserve the benefit of the doubt. Because of your work in this area we are able to share what we find in other areas. We are all in this together.

If I might suggest, you sometimes come on a little authoritatively in some of your posts and we libertarian animals get all riled up. I think I know where Cavan Man and Peter are coming from. Certain animals just do not cotton too highly to a cage.

Very respectfully,

HBM

Good Sir

I do have in my office a copy of "How You Can Survive a Potential Gold Confiscation" by George R. Cooper, J.D. and Michael J. Kosares; however, I do not consider it to be the definitive text on the matter.

I will re-read your post to me and locate the information which takes a strong and well thought out position opposite that of yours.

I will study your suggestions concerning the cost of holding pre-1933. My response will of necessity be at a future date due to time constraints. I do hope that you will not think that I am just putting you off. If you change my mind about the pre-1933 confiscation matter, you will probably have a pile of sales on your hands at the prices which you state. The back and forth on this may be a better way to get your point across than the "definitive" text to which you refer, and the resulting increase in the volume of sales in this area of your market will be significant. I am not adverse to having my mind changed.

Very respectfully,

HBM

PS: Perhaps, I should check the price of MS 63 and MS 64 St. Gaudins coins and be more specific in my posts. The last time I checked was when POG was higher than today (circa pre-Y2K). You speak of non-certified coins, maybe, and that is fair enough to call my statement(double the price) into question.

I love to research truth. Thanks for speaking up for Hemp. Amazing storing. Sort of "(kind)" of goes hand in hand with the gold thingy (Goverment Manipulation). Buggers just cant live up to the good ol truth!!!!! (((How can you, when you have hid it all.))) GGGOOOOOO OOOPPEECCC!!! hahhahahaha

View Yesterday's Discussion.

http://www.villagevoice.com/issues/0122/kick.shtmlOn your subject of green gold, you might enjoy the above link with comments by some of the worlds foremost putting-ticians. Perhaps these are the folks we need to address with respect to the gold/economy manipulation; they seem a little more free and honest thinking than the usual cast of characters.

Appearing off topic to many - My feelings are that many in our world, are victimized by those that have the most to profit from other's villification. Need I mention those that desire a sound money environment, within the realm of gold and silver, ala the ole rag - the "Constitution". Wasn't that rag printed on fiber of green gold?

Salutations,
IronHead

#55504 : After having read "Gold to underpin emerging market currencies" (MWB), I concluded that this suggestion has nothing to do with re-valuation of Gold but much more with opening another box with selfish and shortsighted opportunities, serving the short term policies of specific goldproducers. Inspiring the following : let us (AU) do the mining for these poor countries and pay back with their gold that we mined ? Or something like that.

And how can you possibly strengthen a debt loaded, vaporizing currency with mining more gold and subsequently depressing its price ?

If South African B.Godsell is so concerned about dramatic weakening currencies and underpinning gold aid...why isn't he applying this idea in his own county in the first place ?
A stronger Rand would cut goldproduction immediately.

IMVHO, there is only one solution to get Gold back where it belongs and that is "Permanent Accumulation" of physical gold, by motivated private Gold-Holders. When a higher pricing of Gold "signals" its Value, all theories about gold and intrinsic force, will emerge in the public opinion, again, as if they were just (re)invented. It is this kind of glowing gold-activism that is productive and efficient. My way of supporting GATA is just in doing what I say, and keep on accumulating as modest as it is.

And I do have a lot of understanding for peoples sceptisim towards Gold. I went trough it myself. But thanks to the grandioze education on this Forum...I've changed my attitude dramatically and most probably, for ever ! Thank you CPM.

Lady Leigh(55486)
***You Posted:"Netking, in a silver crisis, what do you think the chances are of silver-consuming photo film being outlawed?"
>>> Leigh, very little chance of this I believe(IMHO).In the USA no, PRC certainly not. World industrial demand, for tens of thousands of small but high volume uses, is inelastic and price insensitive. For example a typical roll of film uses about 1/100 oz of silver. So, a very small amount is actually used in film yet it is vital, no silver means no film. Because most end products use such a small amount per unit produced that the cost of silver per unit is a small percentage of the total cost. However, it is indispensable regardless of its price. The Ag shortage when it kicks into manifestation to the physical commodity pricing structure will be causing a rationing facilitation in itself, it will also cause "some" inventory to come out of "hiding", but not much. Back in 1980's boom we experienced this (when silver went to $52.50/Oz, over $102/Oz in todays dollars when inventory back then was healthy), people were lining up with the family silverware,. . . "Honey! it may have been Ma in laws wedding present, but just think what we'll get for this stuff!". I will expect USA "Blue Chips" who are heavy users to be looked after with preferential supply allocation. Silver can go to $8, 12, 18, 26, 52, 125...etc etc.(Forbes Magazine published an article recently called " Gold at $2500 per ounce, IF silver goes for the short term to 1/10th POS/POG ratio to restore upground supply then hello to $250/Oz). Items will still be manufactured, life will still go on, prices (of the finished items) may rise some to reflect the increased costs, but they'll still be made. There are over 1,000 uses for silver currently and it's still growing as we speak. The hard part is going to be getting supply for the many users, the second part is paying for it, the former is the challenge NOT the latter. There was a time (briefly in history) where Ag was thought of as more valuable than Au, this may happen again briefly, who knows, I don't, but nothing is impossible. Did not Paul said at the gate beautiful: "SILVER and gold have I none. . ."

***You posted: "It would be VERY hard to confiscate silver, I think. Can you imagine troopers going from house to house rounding up people's sterling sets and raiding sock drawers?"
>>> Leigh, You're right with what you say. However we need to see what happened with this in the past. Remember when Gold was confiscated in the past?. . .not that long ago right. A law can be passed on this at the right time, failure to comply would have a predictable outcome, and there are reasonably good change of ownership records around in some cases. Moonshine, Gold, Silver, once upon a time Coffee! God forbid what'd Sir Peter Asher do . As Ted B. says: Silver will eventually be rationed. Not necessarily by government, but by the free market's application of extremely high prices. What is rationing? A dictionary defines it as an equitable apportionment of something in short supply. But, there is rationing and there is severe rationing. From Economics 101 we know that the law of supply and demand balances itself through price. This is the cornerstone of our free market system. Price changes stimulate or curtail demand. High prices ration supply. Have a read of http://www.gloomdoom.com/05-08-01.html for more on this. regards NetKing

My previous post re:"Silver and gold.."(as you know)should have read Peter at the end of the first paragraph(Act3:6).

http://www.gloomdoom.com/Weeklytemplate.htmlTed Butler's latest. Snippits:(If you don't own silver, then you don't clearly understand these facts).

". . . As soon as leasing ends, which it must, the silver manipulation is over. Then the price will soar. But when will that be, I am often asked. And, as I always answer, I don't know when, but I do know how. When is unknowable. How is knowable � big and violently. Because we know how and not when, concentrate on how. What I mean is, make sure you're positioned now, because when the days comes, if you're not in, you probably will never get in. The price can explode and move up so fast you're left behind. . ."

". . . Whenever a market is artificially suppressed a powerful force builds up that will eventually rectify the imbalance and drive up the price. Take government price controls as an example. Once they are lifted the price of the controlled item soars upward. We saw that with gold in the 1960's and 1970's and with numerous products at the end of the Second World War. This silver price suppression is worse. A huge chunk of the available supply has been used up and erased at an artificially low price depleting the supply. At the same time the lack of a proper higher market price has lessened silver production, discouraged substitutes and made reliance on cheap silver that much greater. Silver has been held down by people selling silver they don't own outside the laws of supply and demand, with no regard to price. It's embarrassingly kooky. When it backfires, as it must, the participants will be crushed by market forces that will set the true price at much higher levels. If you don't own silver, then you don't clearly understand these facts. Because once you truly comprehend the silver predicament you see an opportunity unprecedented in history for violent price action to the upside. . ."

Both are "ar-ti-fi-cially" Low. Both do "NOT" reflect the "intrinsics" of the global state of the economy and the currencies in particular. Very easy to understand for all of us (non economic geniusses) if tomorrow you are asked to give credit to someone or are forced to sell physical gold for whatever reason.
IRs are hiding debt ! POG is hiding permanent depreciation.
Both succeed in fooling the masses for quite a long time now. I remain convinced that IR-changes are affecting economic activity very, very, very little.Genuine Expansion is at its maximum with "stable" IRs ! To be compared with the degree of job-security and profitability-regularity.

IRs + G are masking and "Protecting" , bad debt and increasing depreciation through Low price (%+POG) management. The collectivity succeeded in organising a talkie talkie economy. As in politics, the media are the main collaboraters. This ongoing process is extremely difficult to discover. It takes a hell of a lot of courage to make such a statement with high degree of certainty. Because, "who are we" after all ?

Growth with stable IRs is the one and only kind of growth that is genuine and productive (expansive). All other kinds of growth have a certain degree of artificiallity and provoques imbalences that are never sustainable. The reason why this doesn't seem to be possible is that passionate desire for fast development and competitive dominance.
They want it all and they want it now ! Simplified translation.

Lowering IRs is an attempt to slow down the speed of increasing debt-growth. Oxygen (not air) for consumed goods and services that need to be repaid. All Debt is paralytic at the present degree ! Individually, Officially and for the majority of entreprises as well. Past claims about growth and expansion were fake. History will give evidence of this later. It is not too little too late but rather too much too fast. Japan (second worldpower), remains the best example of the amount of "artificiality" that has been build into a super fast quasi expansion. It still is a dead end street to me.

The present debt situation is such that a (normal) slow down in economic expansion is "NOT" permitted. It is a glass house overcultivated plant. A winter with some declining heat, is guarantee for collapse. Europ is forced again to lower its IRs. Unemployment and above all "artificial" employment or temporarely (insecure) employment are the ingredients for collapse. With slowing growth and declining tax revenues, the debt burden cannot be serviced anymore.

The Asian region is discussing the "Protectionism" spectre.
When and where did we heard that before ? (1929 ?)
Capital expenditure in Japan is dramatically down and affects GDP. Hyperconcentration (mergers and acquisitions) + the net-folly caused the delay for the day of reckoning.
Circus acts with IRs and Gold, distracted an over-enthousiastic public.

Have a nice and peacefull day.

Trouble brewing in Ireland. Blair moving post haste towards a rererendum leaving Hague et al in the dust (Hague not to be trusted anyway a "Maggie" NOT).

It is interesting that we see these posts about Green Gold, confiscation, etc. The "War on Drugs" is the perfect scam. The protections and rights laid out in the US constitution is meaningless because of laws regarding confiscation in the cause of fighting inanimate objects and drugs. BTW, your right Ironhead, the original copies of the US Constitution were written on hemp paper. Hemp was also grown at Mt. Vernon by George Washington, and at Monticello by Thomas Jefferson, but I digress. The point is we now have the "Seizure and Forfeiture Act" (signed into law by Daddy Bush) where anything of value can be confiscated (stolen) by law enforcement without cause as the US Supreme Court deemed that property has no rights. Yeah, I know it sounds absurd doesn't it? In Louisiana for example there are specks on a map where this theft is an industry where police routinely use traffic stops to steal cars, cash, jewelry, etc. by claiming that one must prove that the items were not purchased with proceeds from illegal activity. However, this theft happens all the time and to recover these stolen funds, it would require one with substantial means to fight the officially sanctioned theft. Even so, it is more costly to fight the confiscation than to just let it go. Some politicians have vowed to fight for repeal of this law (I'm not holding my breath), while others such as Orrin Hatch (R-UT) continue to favor this law. Personally, I don't see any politician working to give up any government power. Both conservatives and liberals are equally guilty here. This brings me to the next question. How safe is any gold investment from confiscation? My physical is extremely well hidden so I tend to not worry that much about it. I guess it is a matter of degree perhaps where pre-33 numismatic coin is safest and bullion is least safe from confiscation. We do live under an increasingly oppressive government. I guess it's "for the children" and that makes it OK to lose constitutional rights and individual liberty somehow. Comments anyone? I gotta run - will check in tonight. Cheers!

- Black Blade

Really enjoy the depth of the coins and confiscation topic, it is long overdue. IMO the issue of confiscation regarding the gold eagle has not been adequately addressed. There are two gold eagles, one numismatic, one bullion.

The normal gold eagle selling for 6% or so above spot is bullion. Sure you can collect it, you can collect most anything, yet you are still collecting bullion. I believe this gold eagle was born to let Uncle Sam sell his $42/oz Au for considerably more $$$ to the same people he has no fear of confiscating it from.

The numismatic gold eagle is the "PROOF" coin. It sells new for at least 100% above spot. Special dies, additional striking and polishing of dies, and considerably less produced- make the case for numismaticity for a modern non circulating gold coin. To those who wish to pay Uncle Sam this high a premium for a "gold eagle", there is little concern of confiscation-since the price paid is a de facto confiscation (at least of the green stuff).

I find the pre-33 european argument somewhat intriguing but not convincing. Collectable coins? Absolutely! But as pointed out before will Uncle Sam recognize their numismatic status? There are individual year/mint combinations that are valued at multiples of their melt value, yet most sell for premiums of less than 15% over melt value.

The IRS(?) in the early '80s tipped their hand on Uncle Sams view of numismatic coins- any coin that is not commonly available for at least 15% or more over its melt value- is considered bullion. As far as I know this is not "law", yet it gives insight into the mindset of those who will make the rules.

IMHO Uncle Sam will take care of his deep pocket friends and their private property by writing the confiscation law for their benefit. It is not the "walking in the foot steps of giants" that is operative here. Instead I see it as "being one of the family" if you will, certainly a poor relation, but one of the family nonetheless as far as collecting numismatic gold is concerned. That is why I prefer common date pre-33 US gold pieces, raw (not slabbed!) in as good a condition as one can afford. Even our giant relations cannot complete a collection without the common dates.

Also:

1. I think the post was by aunuggets(?) recently about the coin collecting and the grading services? That post is required reading for anyone considering numismatic coins.

2. The most liquid of any gold coin is a raw, uncirculated common date US Double eagle with good eye appeal. At least among those of us who "collect".

3. "Hoarding" bullion and "Collecting" numismatic coins are not the same.

Welcome back, SLATT!

Megatron, you are a guy to be envied.

Your thoughts on Godsell's latest "proposals",really hit the mark.The veneer of spin on these statements is laughable.It's pretty obvious that these statements and proposals for a new advertising campaign are lame diversions to implementing the true objectives.

It seems to me that because gold is considered "just a commodity", that it would be easier to confiscate it now than it was the last time. Back then it was peoples "Money" that was being taken...now it would just be a certain "thing" the govt would need in time of crisis.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=23132 These fine leaders are going to need an exuse for this financial mess. I am sure they have many, but a Mid-East conflict would sure be great for them. They can blame the gold, and inflation, dollar fall on a war. Its been floating out there for some time.

Msg to Black Blade: Thoroughly enjoy your meaningful comments. Am particularly looking forward to your thoughts on NG prices which you may post this weekend.
Incidentally, look at recent press release by Golconda Resources. They may be on verge of palladium / platinum discovery. What do you think?
Thanks.

http://www.usagold.com/onlinestore/special.htmlThanks to each of you who support Centennial with your gold-buying business, and who also support these online offers. The Queen Victory Sovereigns are now down, with supplies nearly exhausted. If you missed your chance to order them online, call the office. They might be able to scrape up enough to keep to happy.

Of course, they always have the full assortment of bullion, numismatic, and semi-numismatic coinage... these changing online offers are simply specially selected additions that are not typically found in the regular menu of items.

As such, you'll want to check out this latest offer of Prussian coins in "Gem Brilliant" uncirculated condition from 1873-1873. They feature the German Kaiser (also King of Prussia) Wilhelm I.

Trivia question: What does Queen Victoria (from our previous offer) have in common with Wilhelm I?

(click the URL given above to discover the "grand" answer)

I agree with the premise that the facts/fundamentals are being obscured. I presume the purpose is to allow the orderly exit of the cognizent at maximum payout (high dollar into low Euro). It would seem that in order to break the ever expanding cycle of credit/debt creation, (the goal being to make money disappear faster than it is being created)the forces must be brought to bear on a known point of leverage...Black-Scholes. When events are caused to transpire contrary to what is predicted by the BS theory, money disappears! Now that this revelation is out of the bag and its discoverers were made whole (friends of the PTB) and no longer indulge in such frivolity(???), these destructive forces can be brought to bear on those who still believe in BS. I therefore predict a period of violent volatility in all markets. Rough seas for those who would attempt to grow their fiat holdings. This also explains the proliferation of derivatives. Option prices always benefit from increased volatility. I think though that there must be a limit to the madness and all appearances of control will slowly disintegrate.

When you said:

"...Growth with stable IRs is the one and only kind of growth that is genuine and productive (expansive). All other kinds of growth have a certain degree of artificiallity and provoques imbalences that are never sustainable."

I am curious as to how you reconcile that statement with the recent posting describing the Islamic dictates based on a gold and silver economy and the illegality of IRs period. Surely the expansion of the Ottoman Empire and North African excursions into Spain were not the result of stagnancy. Even in Roman times before specie was degraded and the populous was disarmed, growth could be classified as "impressive" albeit at the heft of military prowess. These civilizations and those referred to by FOA, lasted far longer than our recent spate of existence as nation states.

While I am not Islamic, I have to admit that they have a (non-) interesting idea.

http://cgi.ebay.com/aw-cgi/ebayISAPI.dll?ViewItem⁢em=1152987650&r=0&t=0∈dexURL=0&photoDisplayType=2#ebaylargephotohostingThese Maxims are Worthy of Saul Alinsky

"LAWS" OF POLITICS


1. Never give a bureaucrat a chance to say no.
2. Don't fire all your ammunition at once.

3. Don't get mad except on purpose.

4. Effort is admirable. Achievement is valuable.

5. Make the opponents' goal more expensive than it's worth.

6. Give 'em a title and get 'em involved.

7. Expand the leadership.

8. You can't beat a plan with no plan.

9. Political technology determines political success.

10. Sound doctrine is sound politics.

11. In politics, you have your word and your friends; go back on either and you're dead.

12. Keep your eye on the main chance and don't stop to kick every barking dog.

13. Don't make the perfect the enemy of the good.

14. Remember the other side has troubles too.

15. Don't treat good guys like you treat bad guys.

16. A well-run movement takes care of its own.

17. Hire at least as many to the right of you as to the left of you.

18. You can't save the world if you can't pay the rent.

19. All gains are incremental; some increments aren't gains.

20. A stable movement requries a healthy, reciprocal I.O.U. flow among its participants. Don't keep a careful tally.

21. An ounce of loyalty is worth a pound of cleverness.

22. Never miss a political meeting if you think there's the slightest chance you'll wish you'd been there.

23. In volunteer politics, a builder can build faster than a destroyer can destroy.

24. Actions have consequences.

25. The mind can absorb no more than the seat can endure.

26. Personnel is policy.

27. Remember it's a long ball game.

28. The test of moral ideas is moral results.

29. You can't beat somebody with nobody.

30. Better a snake in the grass than a viper in your bosom.

31. Don't fully trust anyone until he has stuck with a good cause which he saw was losing.

32. A prompt, generous letter of thanks can seal a commitment which otherwise might disappear when the going gets rough.

33. Governing is campaigning by different means.

34. You cannot make friends of your enemies by making enemies of your friends.

35. Choose your enemies as carefully as you choose your friends.

36. Keep a secure home base.

37. Don't rely on being given anything you don't ask for.

38. In politics, nothing moves unless it's pushed.

39. Winners aren't perfect. They made fewer mistakes than their rivals.

40. One big reason is better than many little reasons.

41. In moments of crisis, the initiative passes to those who are best prepared.

42. Politics is of the heart as well as of the mind. Many people don't care how much you know until they know how much you care.

43. Promptly report your action to the one who requested it.

44. Moral outrage is the most powerful motivating force in politics.

45. Pray as if it all depended on God; work as if it all depended on you.

by Morton C. Blackwell, President, The Leadership Institute

clink, clink, clink, clink

Very good post....The argument for silver in a nutshell. All other factors, of course, remaining stable - i.e. demand.

The interesting and controversial point that Trail Guide made, the $.50/oz silver price could also come true. If so, he is expecting total (as in complete) fiat/economic collapse of the world economy. Gold over silver WOULD then make sense as we could more easily shoulder our packs of gold and join the long lines of refugees tramping across the dusty landscape (smile). In other words, if Trail Guide is correct, the COST of a bull market (what bull market in this environment?) should lead one to question its merits.

Following that train of logic, we should all hope that gold too doesn't "go to da moon". In other words $.05 silver means no precious metal markets beyond the barter level. In other words $.05 silver means $30,000/oz gold (with none sold). In other words, we had better hope that free markets never come to pass and that gold forever stays in its manipulated tight trading range.

For every gain there is a loss, for every loss there is a gain. Be careful what we hope for, it may come true...

G.

(Lady)Leigh: Thanks!

Henri: You hit on an interesting point concerning gold now as a "commodity" and during the last confiscation as peoples "money".

The gold coins confiscated by FDR were those coins in circulation, i.e. common currency and bullion. Numismatic coins of the time certainly included those coins no longer minted before the confiscation. If one was so inclined to turn in such numismatic coins, Uncle Sam would have gladly compensated you with the green stuff. I believe coins in circulation are technically the property of the US government since it is illegal for me to willfuly destroy or deface the currency. If it was truly my property, why would it be illegal? Gold coins withdrawn from circulation by FDR were government property. When the government withdraws a coin or fiat paper from circulation, the holders of such items are free to exchange the old currency for the new, or to hold onto the old currency. Holding the old currency does not guarantee that the local bank or store will accept it, but eventually (if not immediately) the numismatic value of the item will prevail.

The gold eagles of today are legal tender in the amount of $50. To anyone who has ever bought one it is a no brainer. $50 face purchased for around $272? IMO the $50 face value is there for a reason. It is the price Uncle Sam will compensate the holders of bullion IF there is another confiscation. IMO "proof" gold eagles and pre-33 US gold coins will not be subject to confiscation. The 15% or greater stipulation is all inclusive and easily verified. I dare say all recognizable pre-33 US gold coins will maintain that level. Uncirculated examples will always maintain a premium of 30%+.

If one desires to preserve wealth in the USA via ownership of gold, I believe the common date/mint, raw, uncirculated US double eagle is the best compromize.

http://www.brecorder.com/story/000022/200106/20010607/200106070066.shtml?Metals:~Gold,~Palladium~GroupChina is figuring out how to make money at gold. This new 'open market' in China could be just another bastardizing gold scam. Seems they are happy with 'cash'.

Which is why they jumped all over that move to 297 a few weeks ago by selling >40 TONNES<.

"...Its fixing lags the international spot market price changes, thus allowing large gaps between the prices of the international and domestic prices to develop, encouraging the export of gold to Hong Kong to take advantage of the price differential..."
**********************************************************

Seems abusing gold for profit is quite an international sport. Hell, might as well put it in the Olympics. The country that can squeeze the most fiat out of gold will get......drum roll please.....A GOLD MEDAL!!

btw-The Chinese this time, will enjoy the disqualification of America for illegal steroid abuse (trillions in derivatives).

Sorry.....a spell of pessimism. It will pass.

Just opened a small brokerage account at a well known firm. I had to indemnify "Nasdaq" COMPLETELY before firing up for online trading. What a freak show equity investing has become. Whatever happened to the "allocating capital" concept; gone with the wind(age)?

Henri(#55562): Islamic community acting on their specific Gold/Silver/IRs principle, are a spit in the global economy ocean based on western capitalistic thinking. In practice they are dollarized as well and their sound principles only live in theory.
Your "Violent Volatility", says it all. How can something grow with such an amount of (destructive-etheric) violence ?
Fortunes are made and destroyed in no time. We already had exuberant violent volatility for more than 6 years now.
Valuations up and down with double digit figures in a matter of minutes. All know where and how this greatest show on earth will end. Inevitably with collapse. We seem to be immunised for masses of decimation. Seemingly healthy stock market indexes hide lots of dramas with a performant smoke screen. The collectivity behaves as if feeling very comfortable and succeeds in transferring this attitude to the public. Don't worry a be happy !
My reflections on the present big picture are intuitive.
Trying to point, why, I'm using the word "collapse". It is inspired on the investigation on the "quality" of the so called expansion. Blame, me, for being to philosophical and not pragmatic enough ? I've found my quality in a 5.000 years old metal that everybody still wants but doesn't need.
And probably it is because Gold hasn't been so violent (yet).

Old Yeller: glad that your interpretation on B.Godsell (WGC) is giving some confirmation. Otherwise, I feel so lonely (wink).

Rockgrabber : sure, a "war" is a classic and elegant (?) way out. Do they need that same old "costly" excuse ?
Isn't it more practical to blame China or Japan or even the Euro ? And why not Derivatives or POO ? Or a humble mea culpa on hyper speculation and irrational valuation (Greenspan sacrifice)?
Will see when we get there.

Confiscation of Gold : wouldn't it be more appropiate to simply tax the ownership of physical gold ? Old habbits and reflexes from the collectivity towards responsible individuals die hard ?

There's a story though I don't know if I can source it, that Rep. Ron Paul who sponsored the U.S. Eagle legislation, pushed for language that gold ownership in the United States be made a "right." Congress opted to keep it a "privilege." I agree that the proof U.S. Eagles would be considered "numismatic."

The so-called 15% rule is elusive. We could not find the reference, but it has been advanced in the context of "reporting requirements" in the 1985 legislation. If anybody has the exact language and the source we would like to see it. Supposedly, there is some kind of rule that when a dealer buys back pre-1933 it must be at 15% over the gold value to escape 1099 filing. But that has to do with "reporting requirements" and not confiscation so far as we can gather. Of course, there hasn't been a confiscation since 1985 so the government has not had a chance to define "bullion" and "numismatics" in that context and extend that rule beyond reporting.

As I say, I believe precedent remains on the side of pre-1933 gold coins and in favor of the owner of those items, and might very well be THE determing factor. As such, it represents the best probablility of escaping a future confiscation.

Most, if not all the precedent is contained in "How You Can Survive a Potential Gold Confiscation." George Cooper assembled a "Chronology of Documents Relating to Gold Confiscation" which extends Henry Mark Holzer's original chronology on gold confiscation. Holzer is Professor of Law at Brooklyn Law School and was Ayn Rand's attorney. We came by the chronology through our good friend, Elizabeth Currier, at the Committee for Monetary Research and Education in North Carolina. For those with a more scholarly bent, this chronology which appears as Appendix IV in the monograph sketches the precedent which favors pre-1933 gold coin ownership as a hedge against gold confiscation. There is also some very valuable analysis in the appendix from Donald Hoppe who first advanced some of these theories in the late 1960s early 1970s.

Anyone interested in the 48-page "Confiscation" memo is welcome to call the office and we will e-mail it to you. Clients may request a hard copy (limited availability).
You can also e-mail marie@usagold.com to receive a copy.

If a market is remotely free, examining price patterns and price trends will work. Do a little experiment. Look at 10 different markets over the last 20 years. You'll see patterns that repeat again and again.

Gold and Silver reflect all that is knoweable through its price structure. Sure they are "manipulated". All markets are manipulated to a certain degree. The USDollar can be printed by economic and political "elites". They can control the supply but not the demand.

As for the stock market being manipulated, this is wrong headed. Certainly, the FED has a "crash protection" fund to stabilize the stock market if it does a Oct 1987 crash. They do not intervene each day.

Gold is very easy to manipulate since no real public investor demand exists. When I did a poll of 10 random people, I found that 8 out 10 thought dollar was backed by some Gold! Why would you buy Gold if the paper IS Gold? The economic ignorance in this country is widespread. The something for nothing attitude is also widespread!

Technical analysis is the closest way to use scientific methods on the market. Psychology helps too. Price tells all. Sometimes it tells you what you do not want to hear!

PS Canadian Dollar is breaking out. This is a good sign for commodities in general.

Later...back to work.

Welcome back SL&TT ! - Now if we can just get your alter bookend back, we'll have a complete shelf, no?

Regarding the confiscation issue - Do any of our resident alchemists know the melting point (not political or mass correlated economic hyper volatility event), but actual literal degree of restructuring the molecules? I believe around 1700 deg. F. Would not this be the "international exchange" answer to any repugnant stealing? Black Gold at it's finest in line with all other attempts at prohibition.

are climbing again....All rates are now over 2% with some indication of forward sales (Barrick or Aussi?).

G.

Thanks!

The melting point of gold is 1974 degrees F. If melted, it better melt into jewelry, or it is bullion. Think of the pressure applied to some people not to SMILE for fear of confiscation of their bullion, er teeth!

Rest assured this Steve McGarrett will warmly welcome Wo Fat back to this rock, lodging courtesy of HPD!

.

Belgian, does everything not coincide perfectly? Here we are Euro Introduction, Japans problems (the worlds problems), hyper speculation that leads to irrational valuations, energy problems, a Mid-East conflict, and yet the US dollar is so very strong. Great time to take overvalued dollars and turn them into undervalued Euros. I just cant believe things have set up for such a perfect storm. A storm is blowing in, and they are forcasting clear sailing. Good way to lose your vessels=concretized energy=money=gold (if you believe them). Everyone of those is a trial balloon (floating idea) to come. This is coming together to perfectly not to have been desighned

Value is not always in the number. You can have a high number with little value, as well as a low number with high value. I will take home prices for example. When talking to folks, and they ask, is the price of my house going to now go down. I think yes, but if it somehow stays up here or even charges higher (with lower rates) you will see that value of the number (say 500,000) go way down. This is inflation. The percieved value in numbers is nothing but an illusion. The number does not mean the value. The value is in how much energy that number commands. Yes the US buck commands much energy at this moment, but that is all it is, a moment. And the buck has so much energy stored in it right now, due to low artificial gold price. Gold is and commands energy, and the buck right now buys cheap gold, therefore lots of energy. That is all money is, is concretized energy. Why store up your energy in a valueless fiat creation. Why not store it in what makes that valueless fiat creation look so strong? The "Real Deal" GOLD! These moments last not forever, that is why I am feeling anxious. Dont put your faith in an illusion= the US dollar (even people or goverments for that matter).

definitiondefinition
http://law2.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t29t32+2111+32++%28ira%20bullion%29%20%20%20%20%20%20%20%20%20%20
There has been a lot of discussion on what defines a numismatic coin. This is an excerpt from the US Code which defines the Gold eagles as numismatic, according to the US congress.
CITE-
31 USC Sec. 5112 01/05/99
-EXPCITE-
TITLE 31 - MONEY AND FINANCE
SUBTITLE IV - MONEY
CHAPTER 51 - COINS AND CURRENCY
SUBCHAPTER II - GENERAL AUTHORITY
(i)(1) Notwithstanding section 5111(a)(1) of this title, the Secretary shall mint and issue the gold coins described in paragraphs (7), (8), (9), and (10) of subsection (a) of this section, in quantities sufficient to meet public demand, and such gold coins shall -
(A) have a design determined by the Secretary, except that the

fifty dollar gold coin shall have -
(i) on the obverse side, a design symbolic of Liberty; and
(ii) on the reverse side, a design representing a family of eagles, with the male carrying an olive branch and flying above a nest containing a female eagle and hatchlings;
(B) have inscriptions of the denomination, the weight of the

fine gold content, the year of minting or issuance, and the words ''Liberty'', ''In God We Trust'', ''United States of America'', and ''E Pluribus Unum''; and (C) have reeded edges.
(2)(A) The Secretary shall sell the coins minted under this subsection to the public at a price equal to the market value of the bullion at the time of sale, plus the cost of minting, marketing, and distributing such coins (including labor, materials, dies, use of machinery, and promotional and overhead expenses).
(B) The Secretary shall make bulk sales of the coins minted under this subsection at a reasonable discount.
(3) For purposes of section 5132(a)(1) of this title, all coins minted under this subsection shall be considered to be numismatic items.

The silver eagle and the states quarters are included in numismatic items in other sections of this code.

This has been laying around on my desktop for a while. Sorry I didn't the posters handle but I believe the posting date was 12/02/00 if someone wants to look it up.

Back to the lurkhausen.

http://www.lemetropolecafe.comFunny you should mention about economic shock! LeMetropoleCafe has just (in the last few minutes) put out a wonderful commentary on that very subject. It's called "A Ring of Dominoes" by Daan Joubert, served at the Toulouse-Lautrec Table.

http://charts-d.quote.com:443/990444275790?User=demo&Pswd=demo&DataType=GIF&Symbol=COMEX:GC01M∬erval=10:255&Ht=400&Wd=600&Display=0&Study=VOL&Param1=0&Param2=0&Param3=0&FontSize=14Got this link from here a while back (found it quite useful, hope you don't mind me using it...)

Can anyone who is familiar with this explain whether my eyes are seeing correctly, or if there was an error in the charting algorithm at 10:00am?

Vielen Dank...
miner

http://www.prudentbear.com/boards/user/non-frames/message.asp?forumid=4&messageid=51463&threadid=51463
Is it just me,or is this debate starting to look pretty silly.The fundamentals are terrible,the more everyone talks in circles,hopefully,the quicker the top will arrive.

If that is how it is written, it is contrary to the prevalent attitude in the numismatic community. Go to any show, shop, collector or read any widely circulated numismatic guide/magazine and pre-33 US gold is universally accepted as numismatic, pre-33 European fractional as semi-numismatic, and post-33 gold coins from anywhere as predominately bullion. Post-33 proof coins excepted.

Defining a semi-numismatic coin is where there is the greatest room for disagreement. I believe the 15% criteria was proposed to address this interesting niche in collecting. Beware of the pre-33 European fractionals that were in reality minted from the original dies after 1933!

As for the government defining the term numismatic, would it be any less confusing than their constant redefining of our 2nd Amendment "....right to keep and bear arms shall not be infringed."?

http://www.msnbc.com/news/584064.asp?bt=prgy





"THERE WAS A LOT of fear that drove prices up to begin with, and now it's clear that that fear was misplaced," said Ken Miller, analyst for Purvin and Gertz in Houston. "Pump prices are certainly going to come down."
Wholesale gasoline prices in most areas of the country have fallen between 15 and 25 percent since their highs at the end of May due to steadily growing supply. The cost of the fuel fresh from refineries in the Gulf Coast is now as low as 73 cents a gallon, compared with 91 cents less than two weeks ago.
The supply growth has erased a deep deficit and brought U.S. gasoline stocks to more than 6 million barrels, or 3 percent, ahead of last year. This is attributed to a brisk domestic refining pace and strong imports, according to the American Petroleum Institute.



The outlook could awaken the nation's motorists from their gasoline nightmare, caused by near-record retail prices of $1.69 a gallon, and more than $2 a gallon in certain areas of the West Coast and Midwest, according to the American Automobile Association's daily survey.
Advertisement

The high prices were driven by fears of short supplies this summer � a season of traditionally high gasoline demand � and recollections of last year's spike in the Midwest which drove prices as high as $2.75 in some major cities.
But this summer's relief is not likely to come immediately, analysts said, since retailers often take two weeks or more to start reflecting their lower costs at the pumps.










"It looks like the improved supplies will be depressing gasoline prices at the marketplace," said Jerry Cheske, spokesman for the AAA. "But, historically speaking, retail prices are slower to follow wholesale declines than increases."
Cheske added that regional supply disruptions, like a refinery shutdown or a pipeline leak, could send prices at some service stations the other way. Also, Iraq's cutoff of most of its oil exports due to a row with the United Nations could keep crude oil prices high and offer support for gasoline values.







Nonetheless, the improved outlook puts the prospect of $3 gasoline farther out of reach, even after reports of oil companies ordering large number �3's in California this spring to hang in the dollar slot at filling stations.
"The shortage is over," said one Texas gasoline trader Wednesday. "There's plenty of gasoline out there."

Our present dollar policy is backed by credit creation gold, a new form of commodity backing for a modern system that is not based on the commodity gold but a commodity bundle that consists of oil, natural gas, agriculture commodities, (corn, wheat, soybeans) mineral commodities, housing. There are two requirements of a modern international credit creation gold standard. 1-Ending the monetization of government debt +2-Ending the monetization of reserve currencies or in our case the $currency. By sharply increasing the net reserves of the world as a whole, and sharply lower interest rates to stimulate investment in physical assets (industry) to increase employment. The dollar reserve currency is to be phased out and a credit creation gold currency made up of a bundle of commodities is being phased in. Presently that credit creation gold made up of a commodity gold is priced at $112,000. But I have no idea how much is in that bundle. Can somebody help me. Also Greenspan has and is retiring some foreign currency reserves by swaps of offsetting claims with gold or if there is no gold it is amortized with government- to- government debt. The monetary gold used in the make up of the commodity bundle has been repriced and can not be leased or sold. The gold lease going on is a simple means of selling excess gold. This information I got out of Switzerland and in no way can I say how or who for I will never have access to that again. There is no way I can get honest information from the USA government so I have to look elswhere. There is a lot of holes in this but I hope some of you can help me fill them. We are way off course, I have been wrong, and there is no reliable information available. What we are seeing is the start of monetization world wide of all raw materials and and ever increasing debt for the middle class that is rapidly annihilating them and delivering them into Third World Status. This will enrich the bankers, the owners of the FED+BIS thill they own it all. By all I mean not just all of the property, but us also. People can be mortgaged and jailed if they fail to pay.

Among the lesser known uses of nickel during WWII was its intensive use in the Manhatten Project. Its critical application at that time was in the barrier membrane used to concentrate the U235 through gaseous diffusion.

You are scoring two points : "coincidence" and "energy".
Yes, Sir...that's to the point !

This is not my field of study, but I thought I would run this idea up the flagpole. Maybe MK and others will salute, or maybe they'll burn the flag. Either way, this thought will have been aired, and perhaps I can benefit from any following dialog.

The pre-1933 international gold coinage was originally alloyed and minted for circulation purposes. Common sense alone suggests strongly that these are not the same as "bullion" items.

There are good quantities generally available, and they sell at bargain prices representing a low premium over spot gold prices, making them a competitive alternative to bullion for those who want to own the most gold for their purchasing dollars.

While many of these old world coins are CURRENTLY available at premiums near and below the "15 percent criteria" versus the gold content value, can anyone imagine what would happen to the premiums on these items if rumors of a governmental gold bullion confiscation began to leak? To my mind, the premiums would climb impressively as bullion holders (and perhaps paper dollar holders too) tried to move into any avenue that offered them ANY degree of safety from straight commodity bullion. First the premiums on the "undisputable" numismatics (U.S. Liberty and St Gaudens) would rise prohibatively high, followed rapidly by rising premiums in the European and other international old world gold coinage as they absorb the overflow.

No government would want the snafu of dealing on a case by case basis with each individual as they claim the special collectible merits and argue the minutia of this or that gold sovereign, French rooster or angel, Dutch guilder, or Swiss helvetia. IF (and that's a big if) a gold confiscation were deemed the expedient economic solution by Congress during a crisis, it would quickly become a daunting task to pay "fair market value" for any gold occurring in "non-commodity form", that is to say, anything that isn't obviously a simple bullion item pre-stamped with telltale weight and fineness. For the price-conscious quantity-minded gold investor who is also wary of Congressional whims, the so-called "semi-numismatic" pre-33 European (international) gold coinage offers a solid middle ground. And that's where I comfortably stand. Call Centennial and ask about their prices on brilliant uncirculated gold Swiss francs or British sovereigns. You'll be pleasantly surprised how affordable they are.

Mexico City, June 7, 2001

Grupo Elektra, quoted on the NYSE under symbol EKT, and Banco de Mexico, Mexico's Central Bank, have signed a contract authorizing Grupo Elektra as a distributor of Banco de Mexico's "Libertad" one ounce silver .999 coin, which has no face value and is legal tender under certain circumstances.

Grupo Elektra operates 550 stores throughout Mexico. It will initiate operations in silver sales and re-purchases from the public at five stores in the Cuernavaca area, later this month, for the purpose of gathering experience in this field, which is new to the company. National expansion will follow shortly thereafter.

Grupo Elektra expects to be selling and buying silver "Libertad" coins in all its stores, by year end.

The readers at this Forum may be interested in this piece of news.

Greenspan is using the housing component of credit creation gold to support the stock market. Fannie Mae and Freddie Mac created money is supporting the stock market in order for the insiders to continue selling. The stock market is going to decline in an orderly fashion....

Gold has an important 19 year anniversary June21,2001. June 21st, 1982 was an important low. Both dates had solar eclipses.

My Time study indicates a very powerful major turn for Gold and Silver about now. I am looking for big bull run till 2006. Any astro cycle stuff? I use Gann and Delta.

Anyone else do work like this on the markets?

PS Canadian Dollar swing trade buy working great. Nice when your system works!!!

Later>>>

Libertad is "legal tender under certain circumstances". Were the circumstances given?

Here is a piece of relevant data for TA usage for comparing 1982 to 2001. Mr. T was clearly accumulating physical in 1982. Recent commercials with Mr. T clearly show that he has been divesting himself of physical. Everyone blames the cabal, yet no one holds Mr. T accountable? **[SMILE]**

Any discussion of the Helms visit and dollarization in the press there?

I have reviewed the Monetary Law and it is, unfortunately, rather vague in its stipulations.

For one thing, it is clear that the Bank of Mexico has the obligation to buy any quantity of these "Libertad" coins from whoever tenders them, and pay the seller for them at the day's price, posted by the B. of M.

Also, it appears that if a debtor can show that he received silver coins in a credit operation, the debtor can pay off that debt in the same silver coin. This apparently would favor the debtor in silver, if the price of silver falls.

And, if silver rises, the savers in silver can always go to the B. of M. and sell their revalued silver at the current price, for paper pesos.

Further, since these coins are legal tender, they can be exported freely and should be free of import duties into any other country.

And further, since the coins are legal tender, in effect money, there is no VAT (Value Added Tax) on their sale within Mexico.

Hope this helps!

Sierra

I did not catch any news in the papers regarding dollarization for Mexico.

As I remember, the reports were noncommmital and vague. Probably too sensitive to be reported (truthfully).

I greatly fear that dollarization was on the agenda, but I have no substantiation. Pres. Fox has declared clearly, that he will not dollarize the Mexican economy. But, it may be expedient to do so.

On another subject, I see increasing rumblings of protectionism in the U.S. - it had to happen sooner or later.

Everything seems to be getting fouled up for Mr. GWB.

A financial man who was recently in N.Y., told me that the "old guys" are very worried and all are in liquid instruments. They say the only reason the scenario has not caved in as yet, is the large number of youths in finance, who do not realize the seriousness of the situation.

The Mexican financial man said to me, "Sometime in the next quarter, IF a really big darling goes into bankruptcy due to excessive debt, the dominoes will begin to fall." Which fits in closely with the recent article in lemetropolecafe.com which examines the domino effect.

What a mess! Count your eagles and maples.

Sierra

Uponroof: Notice how much mileage GE has been getting with "cabal" Tending to make my eyes glaze over. The two years I spent there I never said two words.

1) cabal

2) Greenscum

Moutaingold: Looks like a good trade with Cnd$ but my stuff tells me that it is in an ongoing bear market and this latest rally is of poor quality and has very little left. And if the poor thing is counting on the price of commodities to bail it out:(

Your buddy in gold

Gramps

http://www.plata.com.mx/plata/english.htmSierra Madre(55588)
Thanks for this! we've been watching this Mexican development, do you have more details on the "numbers" for this, or any http: links?

http://www.financialsense.com/series2/tactics4/complete.htm "Recent Fed. stats showed that broad money supply expanded by $25 billion in the latest week and by an incredible $810 billion over the last twelve months."
This is just one sentence from Jim Puplava's (Part 9) latest installment. I read about one quarter of it while it was printing. Be sure to fill the ink containers if you decide to do the same as it prints out at 31 pages. From what I've read, it's very good. It mentions many of those economic occurances that are spoken of here, including natural resourses/commodities and shiny metals.
I found this next door.
Rich

Sierra, that bit of news can be and should be considered an "In Your Face" to the IMF, who is the agency responsible for the current use of "Fiat" money the world over.
Do you have an internet link to the breaking story in english yet?
Did the story give a date on just when the .999 Silver coins would be sold?

Now if I could just talk my wife into a trip to Mexico when the coins are put up for sale....hmmmmm.....Thanks for the news.....beesting.

...Well, well, as I see the partying is going on and no-one cares about reality - swingin' twenties and so on - can't you see - the miracle economy is done and gone - forever!
The BS of the BLS was found out to be lacking the statists of Greenspanesque artists and the rest may be found in TA, sans fundamentals - as they say - it's free fall (no tax nor toll) from today - join the bungee jumping foray ... and pray ... not to bounce as Nasd or DJ, dead cat Disc Jockey! - just buy an ounce of reality - I do and you? cb2

This may be hard to take for both of us but I totally agree with all of that. I am sitting here looking at a note for tonight's posting that says "Escalating fear of confiscation." The only thing I can add is that as the various national mints add more Eagles Maples and Phillies etc. to the total bullion coin inventory, the smaller the proportion of pre-33s becomes. Also, as gold regains its popularity as an investment vehicle, I would expect the numismatics to be more tightly held than the bullions. Both aspects would widen the premium well before the fear of confiscation kicked in hard.

The best protection against confiscation would then be that, due to the expanded differntial, the threat of pre-33s as money would be diminished in the governments game. The pre-33s would be asset property of much higher value then melt and would be taxable on transfer. If they were subject to confiscation that taxable asset would vanish as there would be no collectors to buy them.

Thanks for the info on the Libertad. Interesting concepts emanating from Mexico of late, open political debate and now REAL MONEY! May both concepts cross our border!

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The "lack of savings" discussed at some length here at the forum and in articles, some of which you posted is a lack of very particular savings, after tax deposits in taxable accounts. Anyone doing so with anything other than "emergency money" would be called an idiot by Suz' Orman and crew. As I had shown before, since 401(k) and IRA contributions, as well as mutual fund purchases do not show up on the savings side, nor do real investment properties (gold, rarities, and real estate) we have a problem of irrelevant definitions for savings - only the most repellant vehicle is regarded as such. Furthermore, stock option compensation does not show up on the income side. Nor does capital gain show up on the income side, particularly not in real estate, antiques and art. Nor does "black market" income show up.

My favorite example of this discrepancy is Israel ca. 1973-8 with prices skyrocketing, and the aggregate sales accountings surpassing aggregate income by 15% chronically. While assets appreciate and the "black market" thrives. The case studies on the period still pale in comparison to some periods in the 60s when people used canned goods for black market money. One anecdote related to me was that an enterprising manufacturer simply stuffed some empty cans in the shipping cartons of canned goods that were used for money. In a somewhat grotesque version of Gresham's law, the cartons with more empty cans were used in trade first, not only because their value was lower, but because they were simply lighter. The merchants would hapilly accept the cartons with empty cans just as the full ones because they would be traded again throughout the day. Only when deciding on what to keep for savings would anyone care whether the cans in the carton are all full.

It is not so much that people in general are over-spending, it is that younger people (and thus poorer people) and lower income older workers were riding the artificial boom that was created when cars were built without oil production and refining capacity to power them, server farms built without electric supply to keep them running, exurbia was populated and only in 1998 did the Federal incompetents let the funding for roads loose. The counter to the investment boom was the lack of infrastructure investment. The reason for the feel good boom was the fact that no upstream investment accompanied the expansion in downstream capacity in retailing, in high tech, in new high tech services and consumer products.

Inventory was slowly eliminated by high tech enabling "just in time" delivery and empowering the designers and marketers to come much closer to consumer's preferences due to the ease of product and process design. Thus anything more complex than a sofa became obsolete by the time it was home. While the power to make it run was not being made available.

We could buy megahouses because no one was building roads to them, the electric company did not invest in more power generation, the oil companies were not producing oil or refined product to power the SUV that you needed in order to travel over the craggy roads, freeing up the labor and materials so that you could build a fancier house, have 5 TVs and 3 computers, etc.. And this does not take into account the import boom driven by dollar debt deflation abroad, where even residential real-estate fell 30% in dollar terms, where emerging Economies took out 2 or 2.4 trillion dollars in debt and paid that down to 0.5 trillion, in all of 4 years.

The lower income people that skipped obtaining the specialized skills for infrastructure work ended up on construction crews, in hamburger flipping jobs, and in retail. Some of the specialized infrastructure people went over to flipping stocks and consulting on the complexities of regulatory issues for their former employers, or doing the regulation themselves, the "no" rubber stamp in hand.

Needless to say, people save in things other than bank savings, where real returns "suck", and moved funds into tax favored accounts, where the tax favor is worth a 15% return - at a minimum. They also speculate in real-estate by buying as much house as they can clean on a weekend. As I detailed before, for the middle income people, taking an extra tax favored mortgage on $10000 and putting it in an IRA/401(k), saves $2800 in taxes the same year, from a 401(k) you can take back the $10000 as a loan and do the home improvement project (or whatever), and still spend the $2800 tax benefit. You pay yourself the interest, and deduct the 7% interest, $700 the next year, giving you an after tax payment of $504. or 5%. If you did not loan yourself the money, but kept it in the IRA, you can earn 7% by buying your own mortgage in a mortgage backed security. The $10000 will earn $700 the first year, and you will pay (after tax) $500, net earnings are $200. On the 5th year you have $4000 of earnings in the IRA, you have paid $2400 in interest after tax, with a net $1600 profit from interest and another $2800 you spent, which after paying the 10% penalty if you lose your income, taking out the money at the most tax opportune time gives you a $3400 profit, whatever appreciation and enjoyment you got out of the extra size house, most likely something around $3000 for the appreciation, leaving you with a net $6400 profit on the bank's money in 5 years. You carry various risks, but it is the most savvy penny pinchers I see doing this. Thank you mister tax man for the distortion.

All you really need is to hold a job for 3 years to break even.

Real estate bubble? Of course.

The savings are in the extra house you got for speculative (investment) purposes rather than direct utility, and in the mortgage loan you pay off while keeping the balance in the tax advantaged account. Can you beat that? Save by going into debt? Assuring yourself of the benefit before you go through the deprivations of saving?

Furthermore, the demographic bubble is pushing this with more and more people expecting greater future incomes as they age. A counter-intuitive finding out of a recent demographic study I was doiing is that the most rapidly growing age group is the one enjoying the most rapid gains in income. They create their own "liquidity", they become more valuable because they understand the needs and wants of the fastest growing marketing target. They also understand their technologies etc.. When the boomers were turning from 30 +/-5 to 40 +/-5 they saw an improvement in wage relative to 30 year olds, from 15% higher wage during the prior generation to 30% higher wage. Thus boomers could expect better incomes increasing at a higher rate than the rest of society, particularly the early to middle boomers who populate the managerial levels in the new corporations built to serve the later born masses and employ them.

During the 70s, 20 million in the 40 year old group were earning 12% and later 15% more than 30 year olds. from 1980 till 1993, their numbers grew to 40 million, and the improvement in income over 30 year olds grew to 30%. Now that the numbers are stabilizing just over 40 million, the wage improvement over 30 year olds dropped back to 15%.

In the late 70s and early 80s, 50 year olds earned as much as the boomers then entering the 40 year old group. Now that boomers are increasingly filling this age group, the wage improvement went from none with 20 million in 82, to 12% with 37 million in 1999, going on 42 million in 2005.

The echo boom generation is just filling in for the bust generation, and will only start changing the work demographic in 2010. It is interesting that the age groups will be about 40-44 million for each 10 year group at that time. It will make for an interesting situation, as each group will be succeeded by another of near identical size. One would expect no need for substantial fresh housing and steady rather than booming growth following the boomers.

By the way, the old Census Bureau estimates were so wrong that even the highest immigration effect estimates have fallen below the reality of the latest census. Thus the actual growth in younger generations may be larger than these figures once Census is done fiddling with them and publishes.



Back to the money front, where it is true that lower income people are not saving, middle income people above $70K on the Coasts and $50k in the Midwest do invest - rather than save, putting their funds in non-taxable accounts, in real items and real-estate, and in stocks and bonds. Their actual income is greater than reported, and their savings may actually come about as a front loaded speculation, where the investment target is obtained first, funded by debt, and the debt is covered after the fact of investment. At least for boomers this seems more likely, as their prospects seem to improve substantially in relative terms as they age, therefore making the front end investment and back end payment more appropriate for them. There is also the odd lack of self discipline that makes "must do" debt pay downs a more attractive proposition than "should do" savings. Thus the modern savings system is focused on increasing equity ownership of a leveraged investment.

No wonder they beat the government at its debt game. They are forever positioned to enjoy price inflation as it erodes their debt and increases the relative value of their assets. Obviously the life lesson of the 70s.


As indicated earlier, the credit boom condition is not so damaging of its own, in creating the new capacity that it does close to the consumer, but in the imbalance that forms farther from the consumer, where no supply capacity is built to feed the downstream demand because price signals are distorted where debt creates capacity where people expect an opportunity ("the new") instead of where it is producing a current return. Come a few years, the investments close to the consumer and the general investment in efficiency enhancing computers and software, are put in place with much less of a return than expected when the projects were funded. The main culprit is the lack of investment in upstream supply in the face of increased downstream demand making for rising input costs relative to revenue. The "new businesses" earn a fraction of expected returns while upstream producers of basic industries, particularly energy extraction and production, unexpectedly earn the returns on the capital of the "new businesses".

The stock market had shown up the errors of the corporations and their financiers among financial institutions hyping loudly the next Blodget Special and Mary Meeker dis-Opportunity on the net. The markets first jacked up the stocks of tech suppliers, and smacked down the stocks of their customers, which were nearly everybody. The high tech leaders gained in market cap, while the average stock, and the advance decline line receded. Now that the high tech projects are in place and the returns are nowhere to be seen, investment in this field has dried up and the markets reward the former high tech customers with higher stock values and punish the high tech leadership with lower values. The average stock is climbing as the AD line advances, while leading tech suppliers lose steam.

The credit expansion in a fiat money system enhances errors of the thundering herd because they can borrow financial resources into existence with plain hype of expectations instead of borrowing from existing cash flow producers. Thus the judgments of current income producers are trumped by those of debt (and leveraged equity) issuers who fund first and find takers for the credit assets later. Inevitably, losses are made by the issuers and the financing institutions who carry the paper on their books and the producers of current income find no reason to buy these issues. This is where the Fed comes in with lower interest rates. Their purpose is to alleviate the losses at the boom financing institutions and to herd current income producers into buying the low grade paper by denying them a market return on safer (read as short term) investments. If one had not understood this before, it should be obvious now that the thundering herd IS Wall Street and its financial professionals, among them the Fed. As the herd dashes towards the cliffs overhanging the deep gorge, the professionals are putting the finishing touches on the research about why the herd is heading where it is and how great that place must be, and rush to ride the leading beasts moments before they fall over the cliff.

Professionals require solid evidence, cohesive theory, and proof before they understand and accept a business trend. It is inevitable that the expertise that is involved in the trend is freed up only as it approaches its end, when the expert practitioners find no further opportunities and are free to write professional looking reports and papers full of proof and theories of the inevitability of the trend and its endless benefits, which the financial professionals then repeat as they form a consensus at the end of the business trend. The truth of the matter is that talents for riding an emerging trend and profiting from it vary and change along the trend, and among trends. It is only those who fly by the seat of their pants without taking the trouble to justify explicitly what they see and do that have a chance to benefit from an emerging and building trend. The semi explicit who can formulate a convincing investment sales pitch do best at the middle of the trend as it matured and had grown in scale. The explicit analysis of the professionals is available only at the maturity and at the end of the trend, giving justifications for the late coming and large scale investments that mark the end of the trend and are the cause of its demise as the financiers overwhelm the opportunities that caused the business trend, filling all the nooks and crannies of the trend's market segments with an overwhelming flood of investments that will earn a negative return for the financiers and their clients.

What keeps these financiers and professionals in their jobs is the Fed's rescue package of low interest rates that force the income producing market participants out of the safety of short term assets into long term assets as the financiers refinance their paper issuer's balance sheets with short term funds that reduce long term liabilities. Note that since just before the Fed started with lowering short rates, the banks started growing the monetary aggregates, while the debt aggregates, particularly the commercial debt, stood in place or grew more slowly. Today's banking is the lifeless arbitrageur of Fed dictated funding, without the ability to understand the markets or any incentive to gain that understanding so long as the Fed is there to dictate short term rates as a matter of law rather than market. Recent financial deregulation may lead out of this as banks gain expertise in broader areas of investment, marketing, and financial services now that we have had a few years of actual competition in this area. I only hold my breath here because of the stench and the opportunities to escape it now arising, not because of great expectations of a cleanup.


Back to the monetary issues, I looked again at my rough estimates for the US dollar debt supply and demand within the US credit markets. These are showing:
excess supply in the 60s till 1969 with the greatest over-supply in the mid 1960s (+3% excess at peak),
a deficit in recessionary 1969-70 (-3% deficit),
a historic surge unprecedented in the statistics in the 1972-3 period (+5% excess at peak),
a mild short term deficit in 1974-5 (-1%, a mild deficit),
another wave of extreme surplus for 1975-1979 with a near 1972 level peak in 1978 (+4%),
a horrendous depressionary deficit as Volcker sprung shut the global debt trap in late 1979 at a deficit of �2%, leading to a peak squeeze of those who dared be short the dollar at the 1981-3 period with levels at an extreme deficit of �6% (13% of the economy as measured by GDP), and continuing till 1984 with a �1% deficit,
ending his term, Volcker let out a short 60s level supply excess of just under +3% through 1987, when Greenspan took over,
Greenspan oversaw a deficit period of great depressionary breadth and depth at �2% in 1988, -3% in 1989, -4% in 1990, -5% in 1991, -4% in 1992-3, -4% in 1994-5, and a loosening in 1995-7 to �2%, and 1998 with full balance,
1999 to date has been in negative territory, at �1%.

When this is adjusted for tax effects, the figures are raised in the 1970s-through 1986 by +1.5%, and by +1% in the post tax reform period when the bulk of consumer interest was put out of schedule A. This leads to revision of the late 80s to negative, but close to neutral period in 1995-7, a slight positive in 1998, and neutral since then.

The tight money policy � and that is what I see internally in the US � had little effect on internal price inflation as the currency continued depreciating despite a large deficit, underscoring that fiat currency is impossible to maintain whether deflationary or inflationary monetary conditions prevail. Both entail currency depreciation.

So, who is the culprit of the boom and bust cycles after 1980? Volcker, and later Greenspan, were quite obviously responsible for the bust portion of the credit cycles. Who did the booms? Well, it seems that the most recent one was purely a Fed jr. operation (the BOJ), operating with the LDP politicians to deny the Japanese the benefits of consuming their own production. They had dropped interest rates to next to nothing in 1995, and have reached nothing in 1998-2001. The BOJ has been buying up dollars, i.e. Treasuries, to the tune of $800 billion by the end of this year. Thus supplying dollar backed yen to the internal market beset by deflationary monetary conditions on a scale of the great depression, to paper over losses on defaulting debt, depreciating real-estate, and high market shares in shrinking markets. The BOJ stands squarely in the center of the boom bust cycles of this period, pumping up money that flees Japan at the first opportunity and never comes back. The fact remains that the late 80s Japanese investment boom had filled any potential opportunity in the industries of that age with mountains of investment. They proceeded to wash international investment into emerging Asia and other markets, from 1995 till 1997:

Korea, 90 billion dollars in international lending (bank and bond market) in 1994, 240 billion in 1997, grew 170%.
Indonesia, $80 bil in �94, to $130 bil in 1997, up 63%.
Malaysia: $21 bil to nearly 70, over 3 fold.
Thailand: 75 to 205, nearly 3 fold.
China: 100 to 180, up 80%.
Taiwan � flat.
Philippines: 12 to over 33, approaching 3 fold,
Brazil: 130 to 230, up 80%
Mexico � down slightly.
Argentina: 60 to over 100, 66% growth
Chile: 20 to 45, more than doubling.

Banking centers:
Singapore � 440 to 620, up 40%
Hong Kong: 650 to 900, up 40%

US:
Corporate bonds: $150 billion issued per year in 1994, peak of $550 billion per year in 1997-8, courtesy of the BOJ sponsored yen carry trade, growth in issuance rate was 250%.
NET foreign purchases of US equities, $20 in early 94, $80 in 98, $175 in 2000 billions all figures.
Agency issues: 1994 $300 bil. 1999, growing immediately following the end of the yen spike of 1998, $650 billion.
Gross foreign investment flow - $110 billion in 1994, $560 billion in 1997-8 peak, $650 billion latest data (2000).
Is it the Fed that kept interest rates at next to nothing?

Europe:
Gross international borrowings from $3.5 trillion in 1994 (BOJ rates at 1.75%) to $8 trillion in 2000 (BOJ funds at 0.25%) through $4.4 trillion in late1998 (BOJ rates at 0.5%), up 120% from 94, up close to 100% since late 98. It should be pointed out that at 1984 (BOJ rates at 5%, down from 9%) levels were a mere $1 trillion in international bank lending and bonds for Europe, which grew 3 fold by 1993 (BOJ lowers rates from 3.25% to 2.5%).

While the Japanese money supply at M2 + CD at 510 trillion yen in 1994, grew to near 610 trillion yen, the action at near cash M1 of 120 trillion yen in late 1993 (flat for 4 years) went on to grow 50% by 1998, and reached near 210 trillion yen recently, up 80%. This compares with a US M1 SHRINKING by 10% over the same period. This is the hottest most leverageable money on earth. Japanese borrowing, expressed in the broader monetary aggregates less M1 is next to nothing. All of this increase in the Japanese monetary base went abroad with a magnification through the Euroyen markets where the under 2% cost of funds caused this under $1 trillion of near pure cash to be leveraged up to a potential $25 trillion of bonds, bank lending, equities and derivatives. With nearly $2 trillion paid off in crashing Asia and , the money was re-lent in the USA and in Europe. Helping Europe get out of its funk and turbocharging the US high tech economy (something Japanese know about, having destroyed their own industries with it just a short decade ago).

The BOJ is doing this, and the Fed has no tools at its disposal to change this. It is only a hardening of monetary policy in Japan and a massive loosening in strangling Japanese regulation that can price the Japanese consumer back into his market, and price out the rest of the world.


The trigger event was the Japanese lowering of interest rates in 1995 which created a push to lend everywhere around the globe. The secondary trigger was the push of cash by the BOJ in this same period. With the investment opportunities of Japan being filled to excess before 1990 and with government policy restricting Japanese consumers from buying anything, all this yen was pushed abroad where it is building up and then wrecking everything in sight. Setting up, with IMF and Fed assistance, dollar debt traps for the world as a whole. First, Japanese consumers were priced out of their own production, then their neighbors around the pacific rim (note that Korea has increased industrial production 65% since the debt trap was sprung in 1997 and its domestic economy flattened into 1998, nearly all of it is exported as the trade balance went from -$25 billion to +$40 billion in early 1999 and now +$10 bil. as domestic consumption recovers now that the foreign debts are largely paid or have foreign reserves against them). Coming soon is Europe and then the US.

The Japanese action, by sending out money forcefully into the international markets, prices in foreign consumers and industries catering to them, who both enjoy increased borrowing power due to artificially low interest rates, and are induced to buy the cheap products of the new capacity built with only market share in mind rather than profits. Since the international monetary system is a dollar denominated one, the Japanese policy has the strongest effect in the US, where the Fed has obviously tried to fight it, and where it joins the dollar debt squeezeR