HOW can a market run such a large deficit for so long and not ration supply with price movement? Treasury buys silver from China at a cost of $16.42 (last weeks price and sells for $4 and change and makes a profit of $4 and change. The real cost is less then 1 cent to print the paper needed for this transaction. Companies that do business in China like CPQ, Loral etc then take this paper back home. Same is done with gold. Barrick sells most of its gold for $380. Russia never had any control over its platinum exports. USA Treasury controlled it. The price went up in order to make possible the return of money lend to Russia.--- Physical gold all over the world is changing hands. What used to be citizen's gold in the hands of government is now being sold to the owners of central banks. They simply reprice it for credit creation and create new loans with it. It is one hell of a money machine. And we the people so stupit borrow. They are now in the process of issuing new credit cards, and we the people have been pre-selected to apply for the cards. Once you (we) are approved, you (we will enjoy a credit line of up to $100,000 with no anual fee. It is easy to apply for our cards. Simply sign and return the enclosed Credit Card Issue Certificate. But please don't wait. This is once in a life time opportunity. Annual Percentage Rate 31.90% Late payment fee: $125.00 on balances of $50.00 or greater; $50.00 on balances of less than $50.00. A security interest will be retained under the uniform commercial code to secure the purchase price of merchandise charged to your (our) accounts. In god we trust all other pay cash.

http://quote.yahoo.com/m2?u
Oh yeah, here we go again. Asian markets are in the red and it is now a question of will the Hang Seng go below 11,000 tonight and how soon will the Nikkei go below 10,000. There is a lot of worry about the health of Japanese banks. There are rumors that many if not most are simply "insolvent." They have just refused to let the IMF audit their books. It has been known that they have kept nonperforming loans on the books and even have gone as far as to "cook the books." A few years ago, many Japanese bankers were arrested and imprisoned for fraud. Maybe there is good reason why they fear an audit. Something to think about.

- Black Blade

Oh yes. I had very good luck yesterday on Slough Creek and caught several nice sized Rainbows and some "Golden" Cutthroat. Today we went out on Yellowstone Lake and did well. I was able to "Slay" some Lake Trout and release a couple Cutthroats. Tomorrow I try my luck fly-fishing for Brookies on the Gardiner River before heading home. It should be amusing as I can just picture 4 inebriated male members of the Black Blade clan charging through the Moose brush with delicate fishing gear. Only thing missing is the high country "Golden Trout" to make it complete. I just hope that all forum members who went fishing this weekend had luck and a well deserved break. Now comes bird season and then on to slay some ducks. Cheers!

- Black Blade

Japan has an alternative to reposesing U.S. investments,they can and most probably will PRINT Yen with which to buy Dollars with.They will do this with the blessing of the U.S.The U.S> will BEG them not to sell Treasury securities as this will most likely cause interest rates to rise and a collapse of the U.S. economy.Japan must keep the Dollar strong in order to export .In order to placate U.S.pleas not to sell U.S.Securities and also satisify thier own desire for a strong Dollar I believe they will print Yen with which they will buy Dollars everytime it shows weakness.The result of this will be to export inflation to Japan (those Yen will find thier way back to Japan).Hyper -inflation will be the result in Japan.At first a little will be welcome news ,a respite from the current Depression in Japan,but it will turn into a torrent.You can kiss the Yen goodbye.Smiles will be the order of the day in N.Y.and DC.We can then pay our trade deficit off with worthless Yen.The trap is set and the bait about to be taken.

http://biz.yahoo.com/rb/010902/business_euro_citizens_dc.html
Snippit:

PARIS (Reuters) - Four months before euro notes and coins hit streets from Helsinki to Rome, the dawning of a new currency era is splitting Europeans into prophets of doom, a few brave evangelists and hordes of confused agnostics. Yet as a Europe-wide media blitz gets under way to tout the changeover, many citizens in the 12 euro zone states are already showing a surprising level of awareness about the new arrival and an acceptance of likely teething troubles.

Black Blade: Will the Euro survive? I don't know, I still have my doubts. 11 different countries, cultures, political philosophies, and yet they all must maintain fiscal discipline for it to work. I think that's a tall order. We shall see though as the time is near for the new currency to be presented to the people. MK asked CB2 and Belgian their perspective on the Euro. I suspect that this debate will rage for some time.

http://biz.yahoo.com/rb/010902/business_markets_forex_dc.html
Snippit:

TOKYO (Reuters) - The yen gave grudging ground on Monday after Japanese officials stepped up their verbal campaign to restrain the currency. The latest round of veiled threats from the Ministry of Finance raised the prospect of coordinated action from the Group of Seven and involving the United States in particular. While dealers harbor serious doubts any such cooperation will be forthcoming, it was enough to keep dollar bears at bay. A U.S. Labor Day holiday also meant the market was thin and vulnerable while the week ahead is littered with potentially explosive data from the U.S., Japan and euro zone.

Black Blade: We shall see. Japan's economy is in serious trouble and they have no room to make any mistakes now. The Japanese banks are likely to be insolvent, the BOJ is ready to push negative interest rates, and Japan's dirty little secret - the postal retirement fund is insolvent as well. The best description for the Japanese economy is "Grim."

"Is deflation good for owners of physical gold? If falling prices are occurring across the board similar to what is happening in Japan, the Fed is manipulating the price of gold from moving upward as GATA, me, and others think, then what better purchasing power hedge of the relative value of goods and services, than accumulating physical gold? The key word here is "relative"."BR549

BR549....Dan Ascani over at Gold-Eagle has written lots on this.

The way I look at it, in the context of today's western investment environment: A truely serious and extended deflationary period will be particularly hard on many large structures....as hedge books go way into the red, many large banks can get in serious trouble without their depositors or investors not knowing what is really going on....we are collectively disappointed in how the poor "performance" of the stock market has made our balance on our 401Ks look worse....but imagine when people have to understand that the bonds, money markets, CDs etc. have lost value below principle (a reality in Argentina today, no?)

At the same time, deflation punishes debt holders.

The simple thing about gold is that it is a financial asset which is liquid like cash but for which there is no corresponding liability.

I sometimes laugh when I see all these intellegent gold bugs on this site, who have read and digested the message of Another and friends, get so excited or upset based on the paper trading price of gold. If gold were to go up $100 an ounce on next Tuesday...we would have excited banter about how much more we had....

In the end, for the physical holder, the cool cold metal sits tucked away in some dark hiding place, sitting quietly, its molecular structure totally untouched by the daily events at the COMEX. We trust it because it is the real NO CHANGE investment.
.. . . . .. . . ... . . .

On Silver.

Maybe it is because I am a patient man when it comes to silver....

At the end of WWII, less than 60 years ago, the US had massive amounts of silver, used silver as coin, and had about 200 million people. It doesn't really matter if it was 3 or 6 or 10 billion ounces of silver..What matters is that the massive growth in electric and electronic industries which defined the late 1900s, has created a massive increase in the use of silver. What does seem pretty obvious is that the average American has consumed something on the average of 1 ounce of silver per capita per year.

In the next 40 years, we are going to need to produce modern products for several billion more people, as silver usage rises with modernization.

De or In Au or Ag


POS

http://finance.yahoo.com/m2?uDown 2.49% . . . at this rate we're looking at breaching 10,000 by mid-week, the week's looking ugly for them with further negative reports due out after market action.

* Hitachi, the most actively traded issue on the Tokyo bourse's main board, dived 10.06 percent to 876 yen, extending the previous session's 4.32 percent drop.

* Nikon Corp , one of the world's largest makers of steppers used to etch circuitry onto chips, tumbled 12.57 percent after the company said it would announce revised earnings estimates at 5 p.m.(0800 GMT).

* NTT DoCoMo Inc , Tokyo's largest issue by market capitalisation, lost 4.79 percent to 1.39 million yen after Morgan Stanley cut its investment rating.
------------------------------------------------------------
Meanwhile in Australia, The biggest bank 'National Australia Bank' reported a $3billion write down & dropped over 13% on the local stock exchange, today.
------------------------------------------------------------
Tannehill(60706) Thanks for the info.View Yesterday's Discussion.

http://quote.yahoo.com/m2?u
This is just the beginning I'm afraid. There is no light at the end of the tunnel in any of the World's markets. Equities valuations are absurdly high and there is no information to suggest that there will be any improvement in corporate earnings - none whatsoever.

Last week you essentially asked ... "How should I invest this sum of monery?"

What follows below is possibly one-tenth of the answer that you seek.

First of all, I will assume that you are the AVERAGE guy in every respect. After all, if you are 90 years old and on your deathbead, you should be spending and enjoying the fruits of your labor and not investing.

Last week you essentially asked ... "How should I invest this sum of money?"

What follows below is possibly one-tenth of the answer that you seek.

First of all, I will assume that you are AVERAGE guy in every respect. After all, if you are 90 years old and on your deathbed, you should be spending and enjoying the fruits of your labor and not investing.

I have developed my own 23 point investment strategy. Some of which follows:

#1 Constantly study and re-study all financial literature that I have at hand .... I want to become so well informed about an investment that I can talk about its merits for one hour. (Ski .. White Rose, because your are a regular at this site, your should be able to talk INTELLIGENTLY and FACTUALLY about how bad the outlook for our economy is for one hour.)

#3 Invest 10% in TEN different and widely diversified areas simultaneously. (Ski ... Ideally put one-tenth of your capital in each of the ten areas.)

#4 Be in investments that have a 90% chance of profit. Look and wait for either highly depressed or highly inflated situations with comparatively little risk to capital. (Ski ... Look for historically EXTREME situations ... Either extremely overvalued or extremely undervalued opportunities.)

#5 Be primarily in investments that have the potential of going up by a factor or ten. (Ski ... Why play around with an investment that is expected to return 10% when 100% returns over the business cycle are possible? Theoretically, using this method, if 9 out of 10 of your investments somehow go to zero and your final investment goes up by a factor of ten, you will have broke even .... worse case scenario.)

#12 Invest in WHAT IS HAPPENING versus WHAT COULD HAPPEN. In other words, invest in what is CERTAIN. (Ski ... self explanitory.)

Hold these thoughts and let's move on ....

As a rule of thumb, MARKETS FALL TWICE AS FAST AS THEY RISE. This is a truly PROFOUND thought! What this suggests to the investor is that you can generally make money TWICE as fast invested in falling markets as you can in rising markets. Therefore, at the very least, one of your above ten investment areas should be SHORTING something that is extremely overpriced. Shorting is the opposite of going LONG. It is nothing more than betting that the price of something is too high and you are expecting it to fall.

There are esentially three shorting strategies in use.

1. EXTENSIVE INDIVIDUAL STOCK ANALYSIS: choosing individual targets.

2. PLAYING TAG-A-LONG: using charts, moving averages, price declines, channel breakouts and other "technical idicators" to jump on a fallng candidate.

3. MAKING SECTOR BETS: the concept that a whole sector of the market is in for tough times.

White Rose, let's focus on this third strategy ... MAKING SECTOR BETS. This is the particular shorting strategy that you are probably the most qualified to enter based on what you should already know from lurking at this web site. What I am suggesting as a possible candidate for one-tenth of your investment capital is to short the S&P 500 index. What you will essentially be betting is that the overall stock market value of the 500 largest companies in the US is currently much too high and is in for a long fall. Do you think that this is true or not? Could you carry on a factual discussion for an hour that would support the idea that our economy and therefore the stock market is going to significantly go down from these levels? Is there a 90% chance of this happening? Is this CURRENTLY HAPPENING or is it just something that COULD happen?

If you think that the S&P 500 is overpriced and due for a fall, what is the most effective way to short this market and capitalize on its expected drop? So far, the best vehicle that I have found to accomplish this is by buying a particular mutual fund that is called the Pro Funds Ultra Bear. Stock symbol URPIX. The fund uses a strategy whereby it is always fully invested at double the inverse of the S&P 500 index. What that means is that every time the S&P 500 DECLINES by -1%, the fund INCREASES by +2%.

Year to date the S&P is down -14.14%. Doubling this figure, you would have made +28.28% so far this year with this fund. At its high, the S&P hit around 1,550 and is now down to 1,133. If you think that it has a lot further to fall, this fund could serve your purposes for one-tenth of your funds.

Rotsa-ruck

http://www.publicdebt.treas.gov/opd/opdpenny.htmThe latest public debt figure as at end of August: $5,806,301,992,643.13 . . .

www.kitco.comDate: Mon Sep 03 2001 00:34
ANOTHER (THOUGHTS!) ID#200346:
Mr. Cashcobb,
As we have discussed in the past the "American Dream" is making World Nightmare. Gold will be revalued and not all will like this new price. America will pay a heavy burden for this free fiat that holds only promise. The time has come for much "mashing of teeth" and gold will once again act like gold. This free gold will trade no more! We will talk when you return. yes?
Thank You
Another

Steve H. - FYI: This also recently(K2)from Another, whether the same person, or another "Another"(smile)I don't know, but a reasonable post on the current situation worth repeating. - Netking
------------------------------------------------------------
Date: Mon Aug 27 2001 10:45 ANOTHER(LATE THOUGHTS!)ID#260332:
Climactic developments engulf us! Look toward the Middle East. Soon the oil will be locked in combat with the dollar! How better than to strike the dollar in it�s weak underbelly? Soon all sales of oil will be done in: EUROs! All "new" sales of "external reserve gold" will soon be done in: EUROs! They will have little use to sell gold for US$ reserves as they will have "much of that currency" already.

As events progress, all/most "external gold reserves" of the "Euro Group Countries" will move towards the ECB and be settled in Euros. As gold will always be traded and denominated in the world currency that settles oil sales. Even Swiss gold will be sold to European Central Bank ( ECB ) for Euros for defense against the falling dollar. Yes, most dollar derivatives will fail as "worldwide gold trading in US$" stops from "contract default"! Will the dollar be weak in gold? Indeed, it may not exist as a market for gold!

The large gold backing for the Euro and the "much greater" gold reserves for the individual countries of the Euro, is a direct result from observations of gold buying by oil! If it is well known by the BIS that a move by oil to bring crude to $10.00 US, is a precursor to an "new world oil currency", then it is well known to the Euro makers! Gold will be managed back to a range of $320/$360 with much hope for participation of Euro as "the" "currency/gold" payment for oil. My knowledge is that the new range will bring a breakup to the London operation, with the ensuing run by gold to infinity.

One should grasp that "today, your wealth, is not what your currency say it is"! In this world, paper currency is for trade, only! It is for the buying, selling, earning and paying, not for knowing the value of your family holdings! Know this, "the printers of paper do never tell the owner that the money has less value, that judgment is reserved for the person you offer that currency to"! Again, I ask, how can we know a true value for our assets, when they are known only in currency that finds it's worth, as in the exchange rate for another currency?

Some say, "I hold investments of great increase these past years, and am much ahead of the inflation, if it should come". I say, "your investments, worldwide, have moved little, as it has been the currencies that denominate your assets, that fall a great deal". The price inflation that comes, it is larger than your vision can see! Your past, holds little of knowing value outside of currencies, this does block the good view!

It is a well known, considered problem that, if not fixed, will take the "Western World" back in time many years. Perhaps, luxury will be lost, and many will live as "third world countries". Some may find this a "better outcome" in life? However: Our world economic system does survive many problems. Humankind must battle the war and distrust with great intensity. Always, we find, it is the honest person of simple means that leads the lost! These same citizens will find a security for the future that comes from the past. History has shown the physical gold does hold true against all odds.

We watch the approach of this change, and discuss it, together, yes? It will truly be "a gold market as none before".

But in time, "that too will pass as swift clouds on a moon less night". I will again be gone for a time.

Thank You (End)

An hour after I got back from a very successful fishing trip with the kids, the family dog was hit by a car. Half an hour later I watched the beagle die. Beagle II, only a year old has not stopped sniffing around looking for his buddy and the kids have not stopped crying.

The fog lifts from the lake again, the sun crests the horizon 'encore une fois' but today will not be golden.

I may be gone for a week or two.

Canuck.

The scale and magnitude of the recent total (global) falsifications, has nothing to do anymore with, accepted intervention.
Be it stockmarket indexes, individual stocks, interest rates, currencies and Gold. Investment and speculation have been replaced by *Gambling*. The propaganda-force of the media (Steve Hickel)invented a new range of explanations in a neverlasting blah, blah, blah...word-diarhea. The great majority enjoys the fun and doesn't want to see or hear the overwhelming evidence of the falsifications. Japan, still is the best of references. IMF not allowed to have a peep at the Bank's boiled books and figures. etc...

It is this greatest show on earth that all Gold-Holders should bear in mind when *time* is frustrating.

Gradually, a majority will realize that we are all stucked in the middle of a burlesque comedy. This will result in wild and violent scrambles for the few exits left.
No this is not another episode of vulgar and cheap, doom and gloom. Just a reminder of what is subconsciously hidden in the reflex part of our brain. The fact that the unwinding process goes irritatingly slow with the avoidance of any shock (crash), is evidence of the gravity of the situation. The shock surprise is kept for the final stupor.
Don't you recognize this frightening pattern ?

Gamblers only stop gambling when they lost everything. Count the rising number of decimated stocks from their ATHs.
A rule of fist was, that most of decimated stocks, were ready for the graveyard. Will there be enough tombstones ?

And still, no Gold or Silver philes, are 100% (sorry) convinced that there is no other refuge imaginable for the time being. Any kind of panic, shall and will, result in a price-inflation. Scarcity as contrast to abundance or saturation. The recent past development went with ligthening speed. Everything adjusted just fine to this maximum momentum. The break of any parabolic (hyperbolic) move is always deep and prolonged.

Cheap oil and Gold made all this possible or was the result of the described move. Food for academic discussions, but the result is already predictable.

I do observe many staff rotations in different enterprises and see an ever increasing rotation speed. Small and middle sized businesses are in some kind of "keep on going" mood for already a long time now. The natural profit/expansion possibilities are totally gone. Business-culture (?) has changed into a gambling-bluff-competition. These are field-observations and therefore perceptive, due to lack of statistical evidence. But it tells me nevertheless, more than enough about where we are heading. Born in 1949 at the supposedly start of the Kondratieff cycle, it is amazing to realize that it strongly seems that I'm living this cycle from A to Z.

A reread of press comments in the 1997 period...learned that the German vision on EMU gold was closely looked at.
Unfortunately all information on German Gold is unavailable and can't give us a clue as to how Gold is involved into the "stability" pact, that is mostly German inspired (Weimar memories). Further on the look out for other clues.
And more specific a German/US/Gold relation. This could indicate some kind of depreciation-speed ($/�) agreement or consensus ?

When the Bullets Start Running Out...!!!




M3, the broadest measure of money supply, has been acting very strangely indeed over the last 6 weeks.
After having set a torrid 13 week-growth rate yearly average of 20.29% by June 18th, this record appears to have been only possible due to the expenditure of the last stock of ammunition available to the Fed, in their relentless war against real money.


Indeed, the current 13 week growth rate yearly average has rapidly plummeted and has slowed down to only 6.30%, which is a full percentage point lower than in early 2000.


Since M1 is still growing at a healthy 6.1% yearly clip, and M2 growth is running at a good 8.68%, the current M3 growth rate of 12.3% in the Fed report seems to be misleading. There have been so many changes in the M3 accounting of the Fed lately, that probably this is the cause of the difference between the author's calculated 6.3% rate and the Fed's 12.3%. (All figures referred to our benchmark 13 week period.)


The author became intrigued due to the apparent slowness of current M3 growth rate compared to its previous performance and compared to current M1 and M2 rates.


A quick analysis of M3 behavior, shows very clearly that it peaked in magnitude by July 23, where it stood at 7,691.9 billion.
Since then, it has DECREASED, and though figures are still PRELIMINARY, nevertheless, the flattening to down-trend behavior started in reality as early as the 9th of July.
Up to August 20, M3 stood at 7,657.6 billion, for a preliminary reduction of 34.3 billion in 4 weeks.


Even though it is very tempting to dismiss this M3 reduction as a preliminary figure, an analysis of the components of M3 shows clearly that most of the reduction is concentrated in only two components: Institutional Money Funds and Large Denomination Time Deposits at Commercial banks.


Therefore, even if preliminary, this CONTRACTION in the specific M3 components could be the harbinger of further things to come, as the author can think of only certain explanations for the alleged reduction.


A possibility could very well be explained if money has started to flow out of the US to Europe or Asia, which ties in very well with the timing of the recent fortunes of the US dollar.
Another possibility could include investment, at a higher rate than M3 creation, into Real Money: Gold, Silver.
Another possibility still, could include additional funding for the PPT to prop up the faltering stock market, or even better and attempt by Mr. Greenspan to lengthen the agony a few extra months, by perhaps bailing out a hedge fund and taking some losses.


Since we cannot know for sure and can only speculate as to the real cause for the contraction, we will leave it at that for the moment.
But what is clear to all of us now, is that there are indeed some tidal forces in the financial realm that appear to be even stronger than the will and resources of the manipulators.


Truly, it appears as if this time they have started running out of bullets, and some people very rightly are starting to run for cover.


Last week, in a speech at Jackson Hole, Wyoming, Mr. Greenspan had the following to say:


"After having been relatively stable for a number of decades, the aggregate ratio of household net worth to income rose steeply over the second half of the 1990s and reached an unprecedented level by early last year. That ratio has subsequently retraced some of its earlier gains.

But we must ask whether the aggregate ratio of net worth to income is a sufficient statistic for summarizing the effect of capital gains on economic behavior or, alternatively, whether the distribution of capital gains across assets and the manner in which those gains are realized also are significant determinants of spending. To answer these questions, we need far more information than we currently possess about the nature and the sources of capital gains and the interaction of these gains with credit markets and consumer behavior. "


Since at the FED, they appear to have been having problems lately recognizing the difference between real wealth and illusory wealth, perhaps it is better to start acting with real caution now, and we will redouble our effort of doing our own home-work.
For if they do not know, who knows then ? They have been studying, manipulating and safeguarding the American economy from the uncertainties of panics, inflation and economic dislocations since 1914. And the record speaks for itself. They are lucky, in the author's opinion, to be a branch of the government, with no accountability to the public, otherwise in the private industry they would have been fired a 100 times over.


This is a unique time, since not very often we have the opportunity to study an important Money Supply indicator behaving as erratically as this one is doing right now.


Stay tuned........And be warned, "The Hyper-Inflationary Depression is here."




"Azteca de Oro"

interesting posts from the lwside1 (yahoogroups) board today:

Date: Mon, 03 Sep 2001 04:17:03 -0000
From: "Carlos Ramirez"
Subject: Re: The BIS Fires the First Shot

Doing a google search for Panizzutti, Giacomo P. of the BIS didn�t show up in the first pages... But Frederic Panizzutti did. What does Frederic P. do? He is one of the officials at MKS investment... this company is active in trading gold bullion. I�m pretty certain that this is purely a coincidence and no BIS official would pass inside information to a relative or a person that just happened to carry the same surname.

LOL.

Here�s the link.

http://www.mips1.net/MGDmds.nsf/UNID/NBEN-4JHM5H?OpenDocument

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

Date: Mon, 3 Sep 2001 15:35:36 +0200
From: "Hugh Whinfrey"
Subject: Sv: Re: The BIS Fires the First Shot

Carlos notes:

> Doing a google search for Panizzutti, Giacomo P. of the BIS didn�t show up =
> in the first pages... But Frederic Panizzutti did. What does Frederic P. do?=
> He is one of the officials at MKS investment... this company is active in t=
> rading gold bullion. I�m pretty certain that this is purely a coincidence an=
> d no BIS official would pass inside information to a relative or a person th=
> at just happened to carry the same surname.
>
> LOL.
>
> Here�s the link.
>
> http://www.mips1.net/MGDmds.nsf/UNID/NBEN-4JHM5H?OpenDocument


Bingo. Paydirt. See:

http://www.mks.ch/company/finance.html

Snippit:

"Core business : gold trading

This same sense of innovation and development to meet changing requirements is evident in MKS
Finance's core business - gold trading. MKS is today one of the leading trading groups in the
increasingly important markets of the Far East, India and the Middle East and is an
international Associate member of the LBMA. It handles approximately 80 per cent of all gold
officially imported into Saudi Arabia and is responsible for an increasing volume of new
business in the emerging markets in Asia. The close historical integration between gold and
finance meant gold markets were the proving ground for financial innovation. MKS Finance has
been in the forefront of this activity. From plain vanilla spot and forward trading MKS Finance
is now actively involved in a wide range of much more sophisticated activity. The range includes:

location, purity and quality swaps
risk assessment, forwards, options, hedging and EFPs
forward leasing arrangements and deferred accounts
gold notes, loans and mine finance arrangements

Sophisticated and increasingly complex financially engineered products will continue to
develop. MKS will be at the centre of these developments, offering a full range of services in
both gold and foreign exchange markets."

Hugh

http://www.washingtonpost.com/wp-dyn/articles/A24876-2001Aug31.htmlGood Morning All,

Well Greenspan, at the annual Jackson Hole (Wyoming) conference is again asking more questions than giving answers. A typical position of someone seeking to assign blame elsewhere.

snip>

"...As Greenspan put it, "we need far more information than we currently possess about the nature and the sources of capital gains and the interaction of these gains with credit markets and consumer behavior."

Translation: Nobody really knows how consumers react when the values of their investments skyrockets and then tanks as they have over the last four years. And nobody really understands what people do when the housing market gets so hot that the value of families homes soars as much the stock market did during the 1990s..."

end snip<

Mr Greensapn has been flying blind since he relentlessly pumped up the Stock Market bubble. Putting the Stock Market and Dollar on steroids at the behest of 'policy makers' (Clinton and Rubin) was a guarantee of restricted future understanding. Greenspan sold his ability to understand and control the economy, along with his soul, to 'policy-makers' years ago.

So what's Greenspan's solution consist of now?......

snip>

"Sizable swings in the market values of business and household assets have created important challenges for policy-makers," Greenspan said.

end snip<

We are about to have a full blown 'policy-maker' infight over the dwindling budget surplus which will lack entirely of economic substance and ooze of political soundbite warfare. To suggest that 'policy-makers' would actually seek to solve deep rooted economic problems, that will be very unpopular to implement, is insane. Especially during budget surplus posturing. More like preemptive blame tactics by Mr. Greenspan who perhaps has gained some insight on political gamesmanship, if nothing else.

So, we will have the 2 major political partys blaming each other for depleted budget surpluses (which were never really there in the first place), the FED strategically blaming both for their lack of sound economic policy making, and both partys blaming the FED for everything in between.

meanwhile.....

I would love to hear a substanitive debate on real estate value appreciation. I suspect it has something to do with actual value... bricks and mortar, sweat equity, confidence in tangible assets, etc....the commom man's last bastion of security if you will. However, this debate will never make the halls of Congress.

What might cause this last engine (housing) to flame out and how do we avoid it? According to Greenspan the answers are to be found in the rhetoric laden halls of Congress and the White House. HA! Greenspan's next sit down in front of Congress should be real fun as the blame game is now in full swing.

If you can't dazzle them with Brilliance, Baffle them with
BS.
Its hard to remember that your original intention was to drain the swamp when your up to your BUTT in alligators.
Slingshot

Sympathies for your family's loss.
auspec

Thanks for the comments, but it does not address the issue of individual bonds vs. bond funds in the current situation. Thanks to all who have helped me on this issue.

By the way, I am confused by the advice to only invest in items to which one has certain knowledge of an impending increase by a factor of 10. To me, this raises many issues of who knows what, and how this information is transmitted.

Would you be willing to suggest sample investments for which you have certain knowledge will increase by a factor of 10? I must be 10 times stupider than you, since I struggle to come up with investments which will only retain their value in the present situation.

Canuck (msg#: 60721)

Sorry to hear that a good vacation went bad.

From a elitist/CB's point of view;

-inflation weakens/controls savers, deflation stregthen them

-deflation weakens/controls debtors, inflation strengthens them

-In past Japan elite talk vey conservative (deflation), but create inflation becouse most citizen are "savers", hense maintain control.

-American elite create deflation (strong dollar policy), because most citizen are debtors, all the while they yak about the dangers of inflation - to hide/mask the very thing that would free their citizens.

BOOOOOOOOOOOOOOM elite get waaaaaaay to greedy, injustice rampant, imbalances every where, judgement (from out of this world) falls, "jubilee" sing the masses! US hyperinflation frees the citizen who respect Judge! Because Judge say "BUY GOLD" cause IT IS PRECIOUS!

-----------------------------------------------------------Japan elite now realise that "judgement" of American elite unavoidable! so they reverse course and SAY they will weaken the yen ....... all the while they sell the $!!!!!!! as evidenced by the trend (rising yen) that screams "you lie"

World is very sick now ...... much more turbulence ahead, JUBILEE only last short while before elite begin again to plan/implement control, just another cycle in life.

From your post #60722:
"Born in 1949 at the supposedly start of the Kondratieff cycle, it is amazing to realize that it strongly seems that I'm living this cycle from A to Z."
Comment-- I guess this makes you an honorary 'BOOMER', in more ways than one!
This thing has had 'bad ending' written all over it for nearly a decade. Perpetual ongoing foolishness, but pay day looms ahead. What comes first, more meaningful accumulation or paydirt {literally}?? Your lilliputians, given enough time, will do the massive buying job you are seeking. buffet and Saloman can be cowered into submission by the hammer of the US 'Judicial' system, but the same system is basically powerless against the hoards {hordes} of discerning individuals. The PE act with great arrogance, but we can take heart, for pride goes before the fall. This Fall? Don't the leaves regularly turn golden this time of year?
When does the PE finally realize that their fate is sealed, the timeline and the dwindling bullets make the case for withdrawal? Maybe Haiti, Barbados, St. Thomas or Honduras have official gold to contribute to the {lost} cause? Maybe Rothschie and Rocky will put their own on the table {never}, more likely they will join us in the vast accumulation of dwindling available physical. MOST likely this event is well underway, see Soros and various Rothschild bank announcements. Their resource grab to date has been ultra-successful, ask HM, Ashanti and others. They are widespread and diversified enough to allow for major failures of even the likes of Buttock Gold, as the scraps will eventually fall their way. What, you thought you would be able to pick up Buttock's ASSets for pennies on the dollar? Yet the scraps also Flo our way {with the dreaded {by some}'leverage' encoded within}, be there for the ultimate win. Go with the Flo!
Yes, we will have -flation, and it will be great for gold, regardless, I would rather spend my time basking in the golden sunshine than prognosticating various -flations, thank you. Can you count to 1992?
My current accumulations are among the encumbered, get it while you can.
auspec

Writing while you're writing, thinking like you're thinking.
Yes, the Jubilee, we want FREE!

yippee yahooee we agree, and shall see the great juubileee
labor dayee a great a holidayee
too start the changee
we shall see
we shall see

tee hee

Gee, sorry to hear about your dog. It is a shame to have so much joy and happiness one minute and then to experience loss and sorrow the next. I don't have a dog now, however, I have had dogs in the past. They are the perfect companions who never complain (though at times they probably should). They are always happy to see you (even when they probably shouldn't). They are always forgiving (even when they probably shouldn't). I hope all goes well for you and yours.

- Black Blade

http://quote.yahoo.com/m2?u
Looks like the carnage in Asia got carried over to Europe as well. I don't see any positive news yet. This could be just the beginning. Now we have the OPEC production cuts going into effect the started on the 1st. Corporate earnings are under severe pressure and the only thing that the Pied Pipers and Pundits can say is that it is up to the consumer to keep spending. The consumer is tapped out and up to his eyeballs in debt. The crumbs from George Dubya's table in the form of a pathetic miniscule tax cut won't do "Diddly Squat." The economy is in deep trouble and we are in a deepening Recession regardless of what massaged GDP statistics reflect. It is going to get a lot worse as there is simply no light at the end of the tunnel. Definitely time to secure a position of PMs along with other investments for portfolio insurance. The "Perfect Storm" is approaching.

http://www.skolnicksreport.com/pingmkts.htmla must read...

Like the first atomic bomb, gold can be the destroyer of worlds. And those who understand the history of currencies, understand that if gold goes up, paper money goes down. And hard.

The monopoly presslords, oil-soaked and chained to the banks and the banker-judges, as promoters of hot-air backed paper money, are never in a position to tell us the truth about important events. They fudged on the way the common people of the United States were dragooned into being poison-gassed, shot to pieces, and dying in World War One, in Europe's own bloody mess. The liars and whores of the press did not tell us what was involved in 1941 in advance, in the attack on Pearl Harbor. They issued fake stories to explain away orchestrated events and political assassinations of the 20th Century.

Federal Reserve Commissar Alan Redspan announces interest rate cuts and the Establishment liars/pundits proclaim it is to help the poor economy and to prevent a recession. Some understand, however, that jiggling with the interest rates may have a secret reason.

Starting about the 1990s, to promote paper money, private Central Banks worldwide, and bullion banks like Goldman Sachs [who reportedly have fled U.S. jurisdiction to be in London] and British royalty-linked J.P.Morgan, have been attacking the price of gold. Through all kinds of market and news media tricks, through forward sales, derivatives, and such, this anti-gold gang pushed down the price of gold until it was way below the cost of production of the most efficient mines in the world.

In the process, the anti-gold cabal have been short upwards of ten years average annual gold production. An emergency obviously could and would be created if there was a squeeze on the "gold shorts", such as the price-fixing criminals interwoven with the Bank of England and the Federal Reserve, both actually PRIVATE central banks masquerading as official government entities.

The so-called "U.S. Dollar",not government currency but private notes of the Federal Reserve, backed by nothing but hot air, would suddenly be exposed as simply a skilled magician's trick, money rabbits multiplied out of a banker's fractional reserve hat.

So, are we, as ordinary Americans, facing commotions as to gold, the real reason for rate cuts? To somehow support the huge gold loans by the short-selling anti-gold mafia? The consequences of exposing this could have a profound influence on the future of the Federal Reserve and what I prefer to call the Bunk of England, both private, yes, conspiratorial, central banks. [The real owners of the Federal Reserve are NOT the member banks, as mentioned in Establishment business text books, but rather a group of shadowy mostly non-Americans, some of whom meet once a year in secret meetings to plan the destiny of ordinary people, that is, the meetings of the Bilderberg Group

http://news.bbc.co.uk/hi/english/business/newsid_1518000/1518713.stm
Snippit:

Londoners may not have much to celebrate soon. Some 144,000 jobs in London could be lost by the end of the next year as the capital's economy stalls, according to a new forecast from the Centre for Economics & Business Research (CEBR).

Black Blade: That's quite an addition to the "Bone Pile." Nice news to hear on Labor Day. And this is just the financial sector in London town. It does not say much about the other sectors. These are "non-essential" - "Bags of Bones" to be cast upon the ever growing "Bone Pile." Looks like there is much to be concerned about. In a word - "Grim."

Greetings,

Had good success fishing brookies this morning and now to visit with relatives, consume "Golden" ales, eat trout fried to a "Golden" brown doused with lemon, a side of fried potatoes, and reminisce over good times. Then off over the other side of the Big Horn Mountains. Now we await to see what may come this week as more bad economic news is sure to hit. Cheers!

- Black Blade

Banker Jokes will be more popular than Lawyer Jokes.

Did you hear about the banker who lost a quarter?

Never will!

Slingshot

#12 Invest in WHAT IS HAPPENING vs WHAT COULD HAPPEN. In other words, invest in what is CERTAIN.

White Rose, I am an individual that has always attemped to learn as much as possible from my mistakes in an attempt to become an even better investor.

Several years ago when South Africa was about to formally end its experiment with apartheid and Mandela was coming into power, a great many newsletter writers came to the conclusion that the world was going to end because of an interuption in the supply of the strategic metals that come from South Africa. Platinum was the metal that was mentioned the most. ..... I bit ..... I waited with my platinum .......nothing happened ....... WHY??

In retrospect, I realized that my investment mistake was caused because I had bet on something that COULD HAVE HAPPENED versus something that was CERTAIN TO HAPPEN. Yes, we could have had great social termoil
in South Africa that would have made the price of platinum expode. But do I want to make these kind of investment bets?? After a bit a soul searching, I came to the conclusion that if I really want to succeed at investing, I will pass on these kinds of opportunities. I have resolved to stalk, wait and pounce on only the RARE and PERFECT opportunities that only occasionally pass by all of us in our lifetimes.

White Rose, I'm sure that you would now want to ask "So what do you think is now out there that is CERTAIN TO HAPPEN? So, give me some examples!"

With annual world supply of gold at 2,500 tones and annual demand at 4,000 tones, can't you see that it is impossible for the price of gold to stay where it is? With the supplies of silver running out and a deficit that has been going on since at least 1990, isn't it a certainty that prices must rise? With the stock market reaching valuation levels that have never before seen in the history of this country, doesn't it have to correct this imbalance at some point? There are 500 or so nuclear power plants in the world that can only use one fuel ... uranium. Yet we are only mining around 50% of the demand. How is it evenly remotely possible that uranium prices will stay where they are? Black Blade seems to have made a wonderful case for natural gas. It's actually rare that there is so many wonderful investment opportunities all happening at just about the same time.

Just to change the picture a little bit, let me close with a different avenue altogether. Christmas comes every year to where I live. It's certain. Every year, people want Christmas trees. It's certain. I am the only one around that buys them for 37 cents and waits about 7 years. They certainly grow and have a market value of $37 ..... a hundred to one return on money. This is generally how I think about investments and opportunities.

When Bankers are jumping out of windows,consider following them....there must be money to be made down there!

Canuck : Suffering and death is indeed very confronting for children. Sad day.

Nickel62 : post#60723 is inspiring.

AEL : I've been Googling, Panizzutti (the Giacomo one) with quess who : Jessica Cross from virtual.gold.com. Both were to find at the WGC family. Sure it is a very small world and we also include Jessica's husband from the South African Reserve Bank.

A very strange sentence of Jessy still makes me ponder :....
CBs continue to " PRIVATISE " their assets, through loans and sales...
It was the common plus/minus 5.000 tonnes of CB Gold, mentionned by Giacomo, that immediately made me think about Jessy the sumo wrestler (her hobby).

Without the net, we never could have realised, how very small this Gold web is. Has or still is J.C. & Co involved in ...privatising gold... in a very particular way...and with the help... of some very close friends ??? No allusions but a naugthy tought.

The following post is from Catherine Austin Fitts from the LeMetropole Cafe Chat site, with her permission of course. She was responding to someone who expressed an opinion that the Howe lawsuit had no chance of success.

The Howe Lawsuit is not doomed. If the courts use these references to kill the case they are confirming that there is no law.
The appearance of the rule of law is too valuable to the capital markets to be this obvious, so it is unlikely to take that position. If they do, the precedent is invaluable for communicating to folks what is really going on.

One of the best movies on Washington today is Gladiator. It is supposed to be about Rome, but it is a metaphor. Do see it. The line that is relevant to what Reg is doing---which I believe is invaluable and important---is the one in which the the man who owns him and puts on the productions says "Gladiator, you must win the crowds". It becomes clear as the movie progresses why even the Emperor can not rule against the crowd.

In another vein, I am increasingly convinced that the ESF machinations are very much part of a slush fund operations that are part of what I have been dealing with at HUD. I think there is one committee that manages a increasingly large black budget and slush fund operation that touches many agencies. They are the same committee that manages the "control file" system, and that is said to be moving so much money abroad. Whatever the power is in whomever the Shadow Government is---it is here. Follow the money.

With that in mind I have been researching historical slush fund operations starting way back with the Nazi money run by the Dulles brothers from Sullivan and Cromwell. I have just ordered a book on Operation Sunrise, the process by which Dulles accepted early surrender in exchange for a whole load of cash at the end of WWII.

In the meantime, here is an excerpt from Blowback by Christopher Simpson that I sent to Bill last night.

Bill {Murphy}:

I have been going back and reviewing Reg Howe's lawsuit and the documents on the GATA trying to figure out how to connect the dots between Treasury's gold transactions and material omissions and misleading disclosure with what I believe are Treasury/FED manipulation of government slush funds for black budget/covert operations at HUD, Social Security and other federal agencies---and a pattern of material omissions and misleading disclosure at those agencies.

With that in mind, I was re-reading Christopher Simpson's description of Dulles and Sullivan & Cromwell's role in working with the Vatican to influence post WW-II elections in Italy, using the slush funds financed with Nazi Gold. I first started looking at this in response to trying to understand the game that Rubin was playing with reparations for Nazi gold during 1995-97.
(For more information on the reparations "war" during the Clinton Administration, see http://www.newsmakingnews.com/catharvarddatadumpnazigold.htm) It helps as your read the excerpt below to remember that the US intelligence agencies (including ONI) worked very closely with the Italian mafia for their help in the Italian landing and WWII.

Oddly enough it was the Administration's efforts on Nazi gold that enabled researchers to access the archives for OSS and WWII intelligence operations that illuminate the extraordinary interconnections between AIG and the CIA and US intelligence operations. I can forward some of that material if you are interested.

I believe that much of US history in the last fifty years can be explained by the process required to replenish these slush funds, as the black budgets and covert operations grew steadily and hence the hunger for off balance sheet money grew with it. The Sullivan & Cromwell-Goldman Sachs-AIG-Treasury-State-Fed dance is not something that sprung up lately.

Here are some excerpts. As roads grew up along cow paths, so perhaps what we are seeing in terms
of false accounting and missing assets--whether at HUD or Treasury---is something for which history can provide some clues.

Our thanks to Simpson whose book is truly remarkable. I recommend it highly for those
who want to understand how the money really works.

Catherine Austin Fitts
Solari

=====
Pages 87-92:

Not all the clandestine containment programs were aimed at the USSR and its satellites.
Some of the early applications of these tactics began in Western Europe. The Italian elections of early 1948 marked another important milestone in the development of US covert operations and in high-level US support for use of former Nazi collaborators....

The Italian Communist party was favored to score heavily in the 1948 elections, and many
analysts said that the party might democratically win control of the country's' government.
This prospect created such alarm in Washington that George Kennan--by then the foremost
long range strategist for the US government--went so far as to advocate direct US military
occupation of the Foggia oil fields if the voting results went wrong from the point of view
of the United States.

Washington's apprehension was shared-indeed, was enthusiastically fueled--by the Holy See.
The church's hierarchy, which was already under severe economic and political pressure in Eastern Europe, feared a Community takeover of the very heart of its institution, or at least of
its worldly resources......

The election campaign became a major test of containment and of its accompanying clandestine political warfare strategy. Allen Dulles, Frank Wisner, James Angleton, William Colby, and a team
of other top-ranked US intelligence officials put together a crash program of propaganda, sabotage, and secret funding of Christian Democratic candidates designed to frustrate the
Italian Communist Party's ambitions. The CIA was a young organization in those days and was
primarily limited (until June 1948) to simple information gathering and analysis. Therefore, much
of this campaign was handled on an ad hoc basis out of the offices of Allen and John Foster Dulles at the Sullivan & Cromwell law firm in New York. Kennan watched events unfold from
his vantage point at State Department headquarters in Washington, while Thayer kept up a steady
cannonade of pro-West and anti-Communist broadcasts over the Voice of America.

Working in close coordination with the Vatican and with prominent Americans of Italian or Catholic heritage, the CIA found that its effort in Italy succeeded well beyond expectations. On a public level the United States dumped $350 million in announced civil and military aid into the country during this campaign alone. Bing Crosby, Frank Sinatra, Gary Cooper, and a score of
other prominent Americans were enlisted to make radio broadcasts to Italy warning against the
Communist electoral menace.......

Francis Cardinal Spellman of New York served as a crucial go-between in CIA-Vatican negotiations.
"The Vatican [has] been promised that American funds would be available to assist in the presentation of the anti-Communist appeal to the Italian public," Spellman wrote following a meeting with US Secretary of State Marshall. The US government, the cardinal said, had secretly
"released large sums in 'black currency' in Italy to the Catholic Church." This "black currency" did not come from the American taxpayers. Rather, a substantial part of the funding for clandestine activities in Italy came from captured Nazi German assets, including money and gold that the Nazis had looted from the Jews.

The trail of this tainted money dates back to 1941, when the War Powers Act authorized the US Treasury's Exchange Stabilization Fund to serve as a holding pool for captured Nazi valuables--currency, gold, precious metals, and even stocks and bonds--seized as the Germans or other Axis governments attempted to smuggle them out of Europe. The captured wealth, which eventually totaled tens of millions of dollars, included substantial amounts of blood money that the Nazis had pillaged from their victims. Indeed, it was precisely this type of criminal booty that overeager Nazis had most frequently attempted to export from Europe.

The Exchange Stabilization Fund was authorized to safeguard the portion of the Nazi hoard that had been uncovered and confiscated by the United States in the Safehaven program which sought
to interdict the German smuggling efforts. The official purpose of the fund was to serve as a hedge against inflation and as a bankers' tool to dampen the effects of currency speculation in the fragile economies of postwar Europe and Latin America. In reality, this pool of money became a secret source of financing for US clandestine operations in the early days of the CIA.

The first known payments from the Exchange Stabilization Fund were made during the hotly contested Italian election. The CIA withdrew about $10MM from the fund in late 1947, laundered it through a myriad of bank accounts, then used that money to finance sensitive Italian operations.
This was the 'black currency' that Cardinal Spellman asserted was given to the Vatican for anti-Communist agitation.

COMMENTS from auspec-- Business as usual in the US{CI}A! Lemetropole subscribers will be quite familiar with this ongoing story. For those unfamiliar with Catherine she became a gov target because her co was tracking and routing out HUD frauds. She lost her co and has been put through sheer Hell, but has recently been vindicated of any wrongdoing. Quite the battler! Are all familiar with the astounding amount of money lost or unaccounted for at HUD, was it $400B? HUD is only one Govt Agency, is it likely to be the only one used for slush fund purposes, other than the ESF? A poster on a different site explained to me that MANY Govt Agencies operate with less than, shall we say, 'full disclosure'. Information only gained on a 'need to know' basis. Catherine advised me that a 'control file' is a file w sufficient info to blackmail a person into being a bit more controllable. Wonder what's in the judge's control file that is to decide the Reg Howe case?
Isn't this absolutely wild to see the ESF and gold connections, AGAIN! The ESF was originally funded with confiscated {stolen} gold, then topped off with Nazi {stolen} gold post WW2, and now used to suppress the POG. If they think they can again supply this Fund by 'exchanging' gold advocates' gold for some paper IOUs, they best reconsider that undertaking. All illusions of remaining freedoms will be gone. This secretive Govt slush fund should aptly be called the GSF, Gold Stabilization Fraud!

Bottom line---- Shadow Government, believe it!

I've enjoyed your investment strategies, thanks.
From 60740, you said, "With the stock markets reaching valuations that have never before seen in the history of this country, doesn't it have to correct this imbalance at some point?"
Without a totally new economic order with entirely new means of valuations, I have to answer yes, definitely yes. With world markets crashing around us, with corporate and consumer debt about tapped out and with real estate overpriced and overleveraged, is this the time?
Will the September and October be the time to be holding market index put options?
I know, it's risky but I'd appreciate your opinion.
I already have physical silver and leveraged paper bets on precious metals. I guess my question is one of timing the next Dow and Duck moves down. Any thoughts?
Thanks
Rich

Yes, fine Sir Auspec, we all own so much to this site, host and guests, that I'm always trying to do my best for coming up with the student-quality that lays in my possibilities to produce. OK enough flattering. Onwards (hum)

As far as we know up until now, there is no evidence of private gold flowing to official vaults. The officials are reshuffling (re-distributing), most probably, the same (rather constant) total volume (plus/minus 30.000 tons) of official gold. And yes, why should they accumulate more gold as it stands now. Are we far from reality, if we conclude that gold (more tonnes) is in the process of increasing privatisation ? Now what does this mean ?

Private Gold (say, the Giants)must know that this pseudo-privatisation has a purpose (well defined or not) and is not
an accidental confluence of things. Private gold-owners-holders-users-traders, only have one ideal (target), once they have more than enough certainty of the whole story : that ideal is to get physical gold in (private) possession as cheap, as obscenely cheap as possible. Not one single official stood up and shouted : enough is enough ! And I'm still doubting about the true purpose of the WA as an official enough is enough . Sorry, that I still don't know what's not adding up in this act. Was it a signal that the official gold side wanted to say to private gold that it got to greedy and was exaggerating in massaging POG down ? Because, why should you call your fellow official goldholders onto the order and discipline ? And was it the private accumulators who used the media to over-expose and dramatise the discrete official gold re-distribution ?
And are the private gold-accumulators, responsible for not knowing who is buying non EMU-gold (UK/Swiss etc..) ?

These Giants don't put 100% of their wealth in physical Gold. Only a well defined fraction of it. The time element is totally irrelevant for this permanent maneuver. But they wan't to accumulate it at the lowest price, wich is in the same time an unresistable invitation to accumulate more than the normal fraction of it. Yes, when you were able to get something that is almost for nothing and you know damned well what the value of it is...than you overdue it and become arrogant. Auspec, do you follow me on this ? Or is it way out of possibility ?

There must definitely be a very particular reason, why POG is and can be hold at this sub 300$ price. I simply don't buy any supply/demand logic or whatsoever. And the same goes for Crude Oil. The R & R dynasties + friends, must rule today more than ever. And they were taken by surprise in sept. '99. Official gold versus Private gold ? The pre-mature (panic-confusion) spike ?

My point is the following:aren't we to much focussed on the official builders of whatever and do we ignore these private gold accumulators at our peril ? Who is ruling : private or official ? Help !

Thanks for communicating this piece of insight. Might be of some inspiration for Sir Tim Wood, who is having a hard time at Mweb. Wood is still struggling with the "squeeze" and "cornering" aspect of the whole affair. I do understand his point of vieuw very well ( but have quite some strong reservations). I've gone through this myself sheer out of pure naive ignorance. And that is a different reason.

But it is exactly the fact that Gold isn't (IS NOT) been cornered (squeezed) that is the fundamental ! Cocoa that grows on trees in every exotic place, managed to almost double in price after its down-raid.

Auspec, allow me to take your posting under my pillow for a good night's rest. Nighty.

Rich.(60744) I've been thinking after researching & reading (especially Ted B's stuff) that Ag may move "vertical" (as big brother gold will too) when it goes.

There is a total short & leased Ag position of around 2,000,000,000 ounces (2 billion) and a known world inventory of around 150,000,000 ounces (150 million) ie each physical ounce could be "pre-accounted for" about 13 times over . . . all paper "may" ignite & burn in this unique market setting including mine, although if the physical goes tothe levels you & me know it can do we care?

I may sell out of all paper given the first Gamma spike in the POS. All IMVHO - regards Murray

test

I received the following from FOA by private e-mail:

Michael,

I cannot post now as that area of my system is already being reworked. In my earlier mail to you I mentioned several weeks, same thing goes for trail posts. As to your question concerning all the various Another posters floating around:

--- "Is this Another or just a good imitation" ?----

It's not him, just another floater trying his best.(smile) A asked me to "walk away" from the old rough crowd at your main forum so people wouldn't associate their foolishness with us. If we decided to leave for good, you would not be reading me at the trail or getting this mail either. He would cut off all communications with the same permanence that was demonstrated at Kitco. Once gone it's over and he never goes back, that's his style. Besides, I can tell you (and those that know him already know this) that the last thing he would be doing is posting right now!

Have a nice labor day, this will be my last reply for a while. See you in a few weeks, my friend.


- - - - - - - -

MK: I hope this puts the speculation to rest. Anyone can go to our archives and cannibalize sentences from "Another (Thoughts!)" or "In the Footsteps of Giants" and make it look like a post from Another. If you want to read the real thing we invite you to go to the "Another (Thoughts!)" archives where you will find a wealth of information -- and it's authentic Another. . . .Those who are newcomers might find these enigmatic postings an eye-opener -- as have many before you. I do believe that when Another is ready to post again, he will do it here.

Also, what follows immediately below was contained in another private correspondence from FOA. Though a private communication to me, I felt it important enough to ask permission to post it here which he graciously granted. . . . .

- - - - - - - -

FOA: Looking back, Another was a true master of understanding people's
thought processes. He knew that none of us, that's you, me or any of the
rest of us raised inside a background of American financial
understanding, would ever accept his position thrust; with him just
spelling it out in the open. Especially when this whole financial /
political transition has been taking place over more than a decade and
a half. By the way, he started this some decades ago. So, he decided to
ask readers and listeners to think for themselves; by presenting bits
and pieces of the flaws in our "Western Thought" as others saw it and as
it pertained to his world of gold and oil. Not wanting to prove
anything, while asking us to prove everything for ourselves; as these
long term events unfolded.

I understand that there are a large group of basic individuals that
fully understand our line of what is happening and are buying gold. What
I never envisioned was how many groups make up the gold trader crowd;
all standing apart from the Physical Gold Advocates. Further, I never
thought they would segregate into so many vocal tribes, each trying to
advance their own minor position in the gold world and willing to step
all over themselves and anyone else in the process. I find it all a real
show / play to watch as it truly demonstrates the very human dynamic
Western governments have use to distort modern gold thought. I now
understand that Another did fully grasp just how distorted this chain of
thought was and went around it all by waiting for events to completely
destroy their concepts; instead of debating with a host of gold tribes.

In the end, physical gold will win out and prove to be the greatest
wealth holding anyone has ever known. Unable to grasp that only a
transition of political influence by old world players can break this
modern American Western hold on gold, these tribes are vulnerable to the
same government influence they long for. Their wealth will be portioned
by those same Western governments as world political reality forces our
American leaders to embrace a world "free market" in physical gold.
While abrogating, thru taxes and windfall appropriations, all forms of
paper gold ownership.

Today they chant; " we want our leaders to recognize gold again"! OH, it
will all right and the impact such a recognition will have on these
various paper gold plays will leave these gold tribes dancing around a
midnight fire! (smile) If nothing else, the entertainment of watching
them spew brime on each other will be quite an act to follow. If nothing
else it will educate future investors as to where to look for reason.
Indeed, the law of ages never changes as ones conduct in social
interaction still identifies oratory as being worthy or no. People that
relish rash interaction always find themselves surrounded by fools.
Eventually broke fools! (smile)

- - - - - -

MK: Hope everyone had a restful weekend. Judging from the market action overseas today, we could be in for an interesting week.

I have maintained that to be a successful investor you only need to be able to answer three questions. WHAT to buy, WHEN to buy and WHEN to sell. These simple questions are very deceptive. They appear to be very easy to answer but history tells us that few people who attempt to become investors ever succeed. Ask the IRS .... (Hey this may actually be something that they are good for!)

R. Powell ....You essentially asked, "Given that the stock market is going down, WHEN should one buy DOW & DUCK index put options?"

I have asked myself, "Could I factually talk about this particular market for one hour?" .... And my answer was no. So, I am convinced that I do not know enough about this subject and should basically shut up.

I only try to post here if I think I have something important to add that others are not saying. In this vein, I mentioned a BEAR MARKET mutual fund (URPIX) earlier today #60717. Why did I mention it?? Because most here see serious economic and stock market problems for as far as the eye can see and yet they are apparently blind to the possibility to cashing in on it.

One of my own investment principles says, "#23. It makes absolutely no sense to purchase (or study) good economic advice and not make purchases, adjustments, or otherwise heed the advice by putting at least some of it into investment practice."

We all know people that can talk intelligently about various investment possibility for hours on end and yet they never do ANYTHING about capitalizing on it. Why have they wasted their time and/or money?

We may be witnessing one of the biggest economic crashes in all of our history .... so why aren't more people attempting to take advangage it?

...................................

R. Powell, Netking and all other AG posters ... thanks for all of your work!

Looks like I've been away for a year and half or so...Have had time to read posts for the past few weeks to acclimate myself with who and what has been going on. Looks as though there are many new posters, to all I say "Hi". Also see some of the older posters of the board are still here, although Gandalf and the The Stranger look to be absent? Gandalf I can understand, because spike and spot seem to be on a short leash, but the commentary of "The Stranger" has always been what I call, "Hearty and worth observing".

I thought it time to start taking a little more interest in what is going on in the world of the yellow metal, and for some the white, since I believe we are in interesting times to say the least. Have always found this forum to be the place for cutting edge information on many topics of interest, and am proud to be part of the Table Round.

I have spoken to our friend Randy over the last few weeks through e-mail, and have to say his intelligence far surpasses that of my own and wish to see his commentary on currencies, currency expansion, and the role of Gold as a monetary reserve asset expanded through the coming months.

Was truly glad to see FOA posting...I remember when I first started posting back in �98...I was wondering who this FOA character is? Well I have a lot of the trail to catch up on, but I have been amazed so far.

As I received my new posting code today, I realized the last time I received my code was right before the Washington Agreement...I have high expectations this time around(grin)...although I do keep this statement from FOA in mind. I even wrote it down in my personal notes(among others).

"Two entirely separate factions are in the gold game; one vocal and unhappy, the other quiet and very pleased to buy gold at lower prices".

Although I enjoy low prices, and have taken advantage of this, as a knight, on my armor I would brazenly scribble patience across my breast...something it has taken me years to develop. I believe as an investor in the yellow metal your ability to persevere in this area has been tested time and again. Some stand, some fall, all are better for it.

The CoinGuy

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=23288832&ID=cnniw≻ategory=Metals+%26+Minerals%3APrecious&The following is worth a read reflecting the growing flight into Gold & other PM's - Netking
------------------------------------------------------------
Snippit:
". . . It appears a growing number of investors are bypassing Wall Street for Fort Knox. "In real general terms when the stock market isn't doing well, people invest in gold," Hornsby said. "Gold and paper are opposites: When one goes up, the other goes down."

Hornsby said now is the time to jump on the golden bandwagon. At press time gold was trading at $260 an ounce, well below the $320 it costs to make. "It's a case of monkey see, monkey do," Hornsby said. "Now that the market is off, more and more of the public is going toward gold.
"It won't be long before gold prices reflect that."

*** Gold demand to rise ***

Others who deal in precious metals also speculate there will be an increase in demand for gold. John van Eck, founder of the Van Eck precious metals funds, writes in a report posted on GoldCentral.com in late July:

"If the economic and financial imbalances are more serious than expected and a recession begins, the Fed may fight it with ever lower short-term interest rates rather than allow free market forces to correct the imbalances quickly although painfully.

"The fight may well be prolonged. Thus, creditors may be punished over a longer period with negligible or negative real interest rates. This period has already begun. Gold, historically, has been a refuge from such discrimination as creditors seek to preserve their wealth in real terms.

"The longer the period of negative real returns, the greater the possible gold investment demand." Gold might be the hot thing, but it's hardly the hot new thing. Since the first known gold coin was struck in Lydia in 700 BC, man has used precious metals as a storehouse of value.

*** Other investment metals ***
Although gold is by far the most popular investment metal, the quad of precious metals (meaning their prices traditionally move in concert) also includes silver, platinum and palladium. Like gold, all are considered to be antiinflationary and negatively correlated to stocks. . . .

I too, have been missing for a few months, due to a series of heart attacks, and just returned this evening.
I'll be archive diving as time allows.

Hello the round table! (Drinks are on me.)

http://quote.yahoo.com/m2?u
The Asian markets are down once again as investors continue to absorb the bad news, Japanese corporations are hurting from severe losses and Japanese banks are teetering on the edge of insolvency. The news that Japanese banks refuse an audit of their books raises a lot of hard hitting questions. Investors have good reason to be wary.

Very sorry to hear that you've been ill.
It's a blessing to all here that you're able to return to us.

Good health and more gold to all.
-r.s.

September 3, 2001

By KATE BERRY
The Orange County Register


"Consumers, hold on to your pocketbooks.

State officials, utility companies and energy consultants are calculating the financial blow from the state's energy crisis - and the results aren't pretty.

One preliminary estimate, by Pacific Gas & Electric, San Francisco's bankrupt utility, puts the price at an average of $6,800 over the next decade for each of the 10 million ratepayers of the state's three big investor-owned utilities. That $68 billion is the state's estimate of its power-buying costs.

But the costs don't end there. The state's purchases account for only one-third of the power supplied by the state's three largest utilities. Add to that a hodge-podge of other anticipated costs, from the bailout of Southern California Edison to conservation programs to upgrades to transmission lines, and the price rises.

Economists believe California's energy crisis will go down in history as one of the most-expensive public policy fiascoes ever, with some estimates putting the tab at more than $100 billion."


NOW ADD TO THIS, A PIECE FROM ANOTHER ARTICLE


California Mandates Electric Cars

By Cat Lazaroff

"SACRAMENTO, California, January 30, 2001 (ENS) - Despite pressure from the auto industry, California air quality officials voted last week to require automakers to sell electric cars and other zero emissions vehicles in the state by 2003..."


This reminds me of the movie, Catch 22.
Just like Yossarian, I have a little life raft. Only, mine is not rubber. It is golden with silver paddles. : )

http://www.sunday-times.co.uk/news/pages/sti/2001/09/02/stibusecn03002.html?
Snippit:

Many economists play down the impact of the oil price but the fact is that when it rises sharply, economies always start to slow down about 18 months later. Oil price puts skids under growth. WHAT is black, sticky, comes in large tubs and causes depressions?

The answer is oil - and, more precisely, large rises in the price of oil. Our planet is sliding into recession because the price of oil trebled between January 1999 and September 2000. British unemployment will soon be rising, and is likely to peak in the winter of 2002-03. Although some economists refuse to pay attention to the oil-price explanation for business cycles, this theory fits the facts better than any other. And it has matched them repeatedly over the decades. A good bumper sticker for Washington would be: "You weren't paying attention, Mr Greenspan. Every world slowdown has been preceded by a hike in energy costs". Four oil-price explosions have produced four world slowdowns.

Black Blade: I have been hammering on this very same thing for some time now. This is a very good article and I STRONGLY suggest that all read this. It has been true in the past, it is true now, and will be true in the future. Watch the markets tank and sit on some hard assets like Gold and Silver.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Latest%20Columns&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=blk&s=AO5QK6BOoSU1GIHRv
Snippit:

The IMF's plans to audit Japan are actually part of a series of reviews of some of the world's biggest countries. The U.K. and Canada are among those who've agreed to such inspections. Tokyo's hasty denial of the IMF's request validates analysts' biggest fear: it has something to hide. Japan's authorities put problem loans held by lenders -- including regional banks, credit cooperatives and thrifts -- at about 150 trillion yen. Many private forecasts are much higher. Goldman Sachs, for example, estimates Japanese lenders' non- performing loans total are as much as 237 trillion yen. Government officials say they too are trying to figure out the true magnitude of the problem. The FSA wants to double its staff of auditors and step up its investigations. Yet the IMF wants to take matters into its own hands. The reason? Whether out of denial, incompetence or deceit, Tokyo has been underestimating its bad-loan problem for a decade.

The gaping divide between Tokyo's estimates of the bad loan problem and those of private analysts are raising eyebrows. The IMF last month questioned the gap and now it wants to inspect Japan's banks ``to help shed more light on these issues.'' That's exactly what Japan seems to want to avoid. If so, it's not hard to figure out why. If the bad loan problem is as bad as some observers think and the world finds out the true depths of the nation's financial troubles, investors may shun yen assets and consumers may stop spending.



Black Blade: The big rumor now is that Japan may be the first G7 nation to request an IMF bailout! This is BIG NEWS! It is widely rumored that Japanese Banks are insolvent and may go under soon dragging the Japanese economy into the toilet and the country into a Depression. Now the situation is expected to be so bad as that Japan may request an IMF bailout of the likes only seen in emerging markets. Stay tuned - this looks to get "Interesting."

http://dailynews.yahoo.com/h/nm/20010830/bs/financial_creditcards_moodys_dc_1.html
Snippit:

NEW YORK (Reuters) - More Americans fell behind in their credit card payments in July, reflecting the tough economic climate and a spike in bankruptcy filings, bond rating service Moody's Investors Service said on Thursday. Credit card delinquency rate, on account balance 30 days past due, rose to 5.06 percent last month, up from 4.41 percent in June, which was the eighth straight month in which the delinquency rate rose from a year ago, Moody's said. The rising delinquency rate coincided with a slowdown in consumer spending, which has kept the economy afloat as Corporate America has been struggling. Their yield, or the annualized percentage of income collected during the month, in July was 19.39 percent, up marginally from 19.34 percent a year earlier.

Black Blade: I said it before, and I say it again - Get Outta Debt! This economy is going south in a hurry and the last thing anyone needs is to be in debt to Loan Sharks. Then think about portfolio protection with PMs. Don't get caught with your pants around your ankles.

http://quote.yahoo.com/m2?u
The Nikkei has rebounded over 200 pts. to the positive in face of bad economic data and no positive news. Question is, Who is buying? We live in "Interesting Times."

Ever wondered where all those trillions of bad derivative deals went to die?


The gaping divide ... the WORLD is insolvent.View Yesterday's Discussion.

A friend goldphile (Kev) succeeded in asking some parlemantery, goldquestions through his deputy. The Reynders answer(s) was plain vanilla Washington Agreement compliance, with nothing to read between the lines or nothing like a hint.

Let's say your current mortgage balance for your 5 Br 4 Ba pride and joy stands at $300,000. The market value during inflationary times when you bought it was $400K.

But the Federal Reserve has been selling securities via the NY Federal Reserve and thereby contracting the money supply. This deleting of permanent reserves means that member banks, securities dealers, etc. are having to absorb liquidity out of their systems in order to buy what the Fed has been selling. Similar to the way that the Fed creates money out of thin air via the fractional banking system, it now "un-creates" it. If you look at M3, then this is what has been happening over the past few weeks and may forecast a definite deflationary trend.

I have difficulty with the concept of deflation because other than a few brief periods, I have always existed in an inflationary system. The gold window was closed and fiat has been the recognized legal tender ever since. Let's say that the Fed continues this policy of contraction to the extent that Japan's banks have contracted their economic system. What does that mean to your house above?

During the inflationary times when you bought your real estate, it was worth $400K and if inflation continued at a steady rate, then your house could have been worth $500K, 600K. Everybody understands this because we grew up with it.

During times of hyper-DEflation however, let's say your castle now only has a market value of $100K. You still owe the banksters $300K but you can't sell it. If you could find some sucker to buy it then you could in turn go buy your neighbors larger castle for $125K. You are what the realtor's call "stuck upside down" in what you thought was an appreciating asset. You mortgage payments are now clearly out of line with what you can afford because the relative buying power of your wages has declined disproportionately to your percentage of income that you originally allocated for mortgage expense. You will burn all of your assets refusing to admit to yourself what is happening until you can't do it anymore.

So what happens to your castle? �the banks will foreclose on you as soon as they can, and sell your castle for market value of $100K and thereby deflate the money supply by another $200K. They need to replace your loan where they can loan out more of their fractional reserves and make more interest money. How does the bankster system encourage new borrowing�they get the Fed to lower interest rates. (Only 3.5% more to go to zero).

Isn't this what is happening?

Of course if you sell your current castle for its inflated worth before it is too late�you will get an entirely different scenario. Sell it today for whatever you can get, take the proceeds and purchase for cash (no mortgages anymore) a lesser house, take the difference and put into physical gold, then you are hedged regardless of what happens to the economy.

Watch M3 very closely because current reports indicate that it is too late for Japan. But it may not be too late for you.

http://library.northernlight.com/FC20010903830000089.html?cb=0&dx=1006≻=0#docSnippit:
"Gokhran had faced the problem of a shortage of gold on the market. The reason for that is the fact that Gokhran does not credit gold mining companies, which are hence forced to sell gold to the banks. That is why Gokhran is now buying gold on the secondary market, i.e. from banks and not from manufacturers"

http://www.globeinvestor.com/servlet/WireFeedRedirect/D,C/20010903/wxconsu?cf=GlobeInvestor/config&vg=BigAdVariableGenerator&slug=wxconsu&date=20010903&archive=rtgam
Snippit:

Washington - After gamely keeping the sputtering U.S. economy going for months, American consumers are suddenly showing dangerous signs of running out of gas. The combination of months of grim economic news, a stock market selloff and stretched lines of credit are starting to weigh heavily on consumer confidence. Even a cash infusion from a first instalment of President George W. Bush's $1.3-trillion (U.S.) tax cut has had no perceptible impact on consumer behaviour. Most economists still expect the United States to narrowly avoid a recession. But a growing number now say that's exactly what may be in store if consumers stop spending.

Black Blade: Consumers are tapped out. Looks "Grim"

http://www.latimes.com/business/la-000071460sep04.story?coll=la%2Dheadlines%2Dbusiness
Snippit:

Americans who own stock funds have been hanging tough so far in the market's steep slide, even buying more shares for most of this year. But the latest sell-off, which last week pushed the Dow Jones index below 10,000 again, could change more investors' mood, some experts worry. Heavy selling of mutual funds, if it materializes, could make matters worse for the stock market, which already has suffered its sharpest loss in at least 13 years, as the economy has weakened and corporate profits have plunged. In previous deep market declines, such as 1973-74 and 1987, stock fund investors became net sellers of fund shares for extended periods, meaning the dollars withdrawn swamped new money going in.


Black Blade: To raid the IRA and 401K? Many should probably cut their losses and rune for the exits. BTW, it is almost time for tax loss selling. Usually September is the worst month for the stock market followed by October which has the distinction of having the most market crashes.

http://www.boston.com/dailyglobe2/247/business/Stock_funds_fall_5_in_Aug_worst_first_8_months_since_1974+.shtml
Snippit:

Stock mutual funds fell 5 percent in August, capping their worst performance for the first eight months of any year since 1974, when stock prices plunged following the Arab oil embargo. The average stock fund has lost 13.9 percent this year through August, according to preliminary data from New York-based fund tracking firm Lipper Inc., the most since a 22.4 percent plunge during the first eight months of 1974.

Black Blade: Energy crisis preceded the current Recession as well. People have been running for the exits as there is no light at the end of the tunnel except the oncoming train. Time for PM insurance.

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3I9SM25RC&live=true&useoverridetemplate=IXL8L4VRRBC&tagid=IXLMS1QTICCGood Morning all,

A short work week here in the US after the Labor Day holiday, which makes it somewhat easier to accept the last days of summer. Where did it go?!

The IMF report is bleak. The media has begun commenting calling for the global players to seek "an orderly decline of the dollar". Of course if the dollar "plunges" we could be in for a "catastrophic global collapse".

Has anyone seen any of those "This Time it's Different" commercials on CNBC that were so prolific a few months ago?
They were right, it is different this time. One big happy global family.
**********************************************************

snip>

"....For the US, the immediate danger is that the cyclical downturn will gather momentum, especially if further falls in asset prices and fears of unemployment should cause consumers to retrench. There would then be the possibility of a catastrophic global collapse exacerbated by a plunging dollar and serious dis-array in financial markets.

The IMF, which thinks the dollar is overvalued, is plainly worried by this possibility. It says much depends on whether a fast rate of US productivity growth can soon be resumed. If such hopes were disappointed, equity markets and investment could fall further. And if foreign investors took fright, the US's huge current account deficit could push the dollar over a precipice.

The combination of tax cuts and the Federal Reserve's aggressive lowering of interest rates may avert this danger but, in spite of this easing, the strong dollar has continued to be a drag on the economy.

Fortunately, global and US inflation, which accelerated after the oil price rise last year, is generally expected to moderate. So there should be room for further cuts in official rates if necessary.

More generally, industrial countries must recognise that the convergence of economic cycles means that they will sink or swim together. That means they must all encourage an orderly decline in the dollar - if only by their rhetoric. They must also look to the longer term, refusing to be diverted from structural reforms and resisting the threats to free trade that proliferate in a cold economic climate."

end.
********************************************************

Don't forget what happened to the dollar when the IMF declared it overvalued. I believe this 'LEAK' of their gloomy report (which first came out last week) was intentional. Just as political 'bad news' is trickled out over time to difuse an explosion, the IMF and PTB chose to leak this very explosive report. All responsible partys in this global economic nightmare are walking on eggshells in every calculated move they make. And well they should.

http://www.usagold.com/Order_Form.htmlNote: If you would like to receive an information packet on gold (how to buy it -- our products and services) and a free trial subscription to our newsletter, News & Views, please go to the link above. For those seeking a higher level of understanding with respect to the gold market, many of the concepts addressed briefly below are covered in detail in our upcoming 32-page Quarterly Review. Please go to the link above to register for your packet. By registering, you will also gain free access for a limited time period to our client only Commentary and Review page.

9/3/01

In Brief: Gold took a hit in early
trading after a less than inspiring night
overseas, but seems to be working its way
higher as we go to fetch this over to the
server. The yellow metal thus far has
gone south along with the euro -- the
pricing of which reflects currency
traders view that the latest ECB rate cut
signals a return to the weak euro/strong
dollar venue that has dominated the forex
markets since shortly after the single
currency was introduced. This view as it
relates to gold might not hold up in the
near term for reasons offered further
down, but right now traders are linking
gold with the euro and that might prove
to be a mistake. We predicted the euro
might run into some rough weather here
the day of the ECB rate cut announcement.
(See "Wither the Single Currency: Euro
Introduced under Interest Rate Cloud"
below.) Though the euro rallied briefly
the day of the announcement it has
plummeted recklessly downhill ever since.

Though some services are reporting that
the large net long position on the Comex
could be responsible for the drop in
gold, this move looks almost exclusively
currency related. As we said last week,
it won't be long until the mainstream
press is touting the "strong-dollar
policy" once again. But this is the wrong
medicine at the wrong time. Americans
under the circumstances will likely learn
very quickly that the "strong dollar
policy" could very well translate to a
"strong recession." And there's little
doubt that the weakened demand in the
United States will hurt European
business. In other words the rate cut
could very well backfire on the ECB
unless the U.S. Federal Reserve moves to
cut rates even more aggressively than it
already has.

The Commitment of Traders for the Comex
gold contract revealed a gold market
moving toward a more balanced approach
with the commercial longs liquidating
about 30% of their positions over the
course of the week. This is likely to
remove the sword of Damocles effect the
long position has had on the gold market,
but once again this is a sidebar to the
real action. The current conditions could
give way quickly to a more solid gold
market in the weeks and months to come as
investors around the world realize that
we are seeing is the foundation being
laid for an inflation of the world
economy. Gold will play its traditional
as an inflation hedge and safe-haven from
systemic risk -- risk which grows
proportionately even as you read this
(almost) daily report. We will take a few
days off unless overall market conditions
warrant a new look. Have a good week,
fellow goldmeisters.

Gold demand at Centennial Precious
Metals/ USAGOLD has been very strong the
past few days with investors citing as
primary incentives the flagging stock
market (now under the benchmark 10,000
figure) and general unease over the
economic situation. September and October
usually end up the worst months for
equities globally and the best months for
international gold demand. That
combination could lead to some
interesting market action in the weeks
and months ahead. MK

Inflation and deflation are only velocity indicators of
* PERMANENT CURRENCY DEPRECIATION * (PCD) ! The flalalas indicate the cycles of the unproductive-debt-growth, that cancers on all currencies, in different degrees.

As long as we don't find a system where natural-expansive-growth, can be achieved with debt, allowed to default...PCD, will remain on the order of the day and here to stay.

The days of final reckoning have been masterly postponed and marvelously hidden, through expert management and blatant falsification of a monsterous paper circus.

The US$ is the champion and Icarus of the Permanent Depreciating Currencies. His flight is very close to the sun, at present. It's getting very hot now. All the past damage of mis-management will be accounted for in one go. No need to urge everybody to do it in a controlled and disciplined way (IMF). It already has been controlled for much too long. Nobody can summ up all debt that is accumulated on the dollar's wings. A huge, very huge amount that has been rolled over for more than 30 years now. Just bear in mind constantly how it feels when somebody is in debt with you and you realise you will never, ever be paid back. Rather unpleasant, isn't it ? That's the feeling you get when confetti is used for saving. Huuuuge Debts !

Relax and prepare yourself .

PDP8's, then PDP16's. The world's largest computer company in terms of units sold. An egotist who refuses to let go of the helm and all of a sudden�

CHOMP!

Along comes at the time the world's largest CRT vendor and swallows the larger DEC in a reverse stock swap. Cleverly, they bought them with their own money. A downturn in high tech and all of a sudden�

CHOMP!

The genius of Packard is squandered by a dumb blonde who should have been fired 90 days after she was appointed CEO. With outsourced manufacturing overseas, poor quality control, declining sales, and deteriorating earnings, she acquires the equally listless Compaq.

CHOMP!

The same European Union who killed the GE/Honeywell deal will kill this one.


Chop! Chop!

There goes another 15,000 jobs, another slew of small businessmen, another portion of competition in the only industry segment the US still dominates.

Big Bidness! Ain't it wonderful?

Either take responsibility to enforce the US anti-trust laws to the benefit of small business or forever give up your rights to the EU.

CHOMP!

U.S. domination of the world economy by the rest of the world.

...as our friend Belgian put it in such a compelling way - here are some snippets from today's "The Daily Reckoning" by Bill Bonner, having Kurt Richebaecher as a guest:

"MASSIVE DEFLATION

"All over the Anglo-Saxon world," said Dr. Kurt Richebacher on Saturday's visit, speaking with a strong German accent, "it's the same. High debt, low savings...low real capital investment in real industries.

"And they all think they're getting rich. That is the amazing thing. They think they can get rich by spending their money.

"Where did this consumer spending idea come from? That's what I want to know. It's crazy. No respectable economist ever thought you could get rich by spending your money. It's saving that produces wealth - the opposite of spending. It's saving and investing and profits. Anything else is pure mumbo- jumbo, nonsense."

Dr. Richebacher was an infantryman in the German army in WWII.

"I was injured after only a few days," he reports. "Then I spent two years in a hospital recovering. It was there that I discovered an interest in economics..."

A half century later, Dr. Richebacher is retired from his post as chief economist of Dresdner Bank. He lives in the south of France, walks with a silver handled cane and drives a sporty BMW.

Here at the Daily Reckoning, we recognize that predictions about the future are little more than tall guessing. Still, we can't quite break the habit.

Lately, we've been wondering how long the current business downturn and bear market might last. "How bad will it get?" Daily Reckoning readers want to know. Here we offer another guess.

Intuition tells us that nature is symmetrical. Americans climbed a mountain of rising stock prices and apparent economic prosperity over the last 18 years. We imagine that the other side of the mountain will be similar. What goes up, we figure, will go down about as much.

Experience tells us that this is how things work in the topography of markets as well as that of mountain ranges.

Every bubble is fully corrected. Every one. There have been no new eras. None.

Each correction has taken prices - whether it was the price of gold or of Kuwaiti stocks - back to the long term trend. There have been no exceptions. Ever.

In the 20th century, there were two 17-year bear markets - one from '29 to '46 and another from '65 to '82. And there were two major bull markets, one 20 years long, from '46 to '66, and another 18 years long, from '82 to 2000.

Each major bull market has been corrected by a major bear market of nearly equal duration. How could it be that, this time, an 18-year bull market will be set right by only 18 months of falling prices? How could it be that prices at the bottom of this short bear market cycle are still higher than at the top of previous bull markets? The idea contradicts both intuition and experience.

Kurt Richebacher points out that it contradicts theory too.

"This is the worst bubble in economic history...worse than '29...worse than Japan...

"There is no theory of economics that says that consumer confidence is the key to prosperity," he says. "What matters is savings and business profits. It is profits that are the key. And this new Information Age. What a joke! It is the Misinformation Age. Everybody had so much information they didn't seem to notice anything important. That is true for economists too.

"Nobody noticed that profits were collapsing. Now we know that the new technology is essentially profitless."

Dr. Richebacher is an essentialist. He reduces economics to its important features and rarely takes his eye off them. So concentrated is his attention on these economic verities that his conversation rarely strays. You feel a Maryland legislator could choke to death on a granola bar right in front of him and he would continue talking about productivity figures. At least you hope so.

"At the end of July, some new information came out that completely demolished the myth of American prosperity. Productivity proved to be no better than it has always been. In fact, the number is still flattered by these hedonic adjustments that they make. The real number for productivity growth is probably zero. All this new technology has made no improvement in productivity.

"And profits, too...the number was revised downward at the end of July. Now we see the whole technology sector is operating at a loss. And even at the height of the tech boom, profits were greatly inflated by stock market profits. Since the end of '98, the entire technology sector has made no profits. Nothing. It has been a profit catastrophe.

"The real cause of the economic slowdown is the lack of profits - which has lead to a collapse in capital spending. But who notices? No one!"

No one but Kurt Richebacher and a handful of Daily Reckoning readers.

Instead of guessing about the future, Dr. Richebacher noticed that Americans have been impoverishing themselves in the last few years. Believing that they were getting rich in stocks (and now real estate), Americans stepped up consumer spending - thus wasting the savings that real prosperity requires.

"The problem in America is not consumer confidence," explains Dr. Richebacher, "but the excessive confidence that Americans feel in the future. And the Europeans believe in this American delusion even more than the Americans themselves. They continue to finance U.S. deficits. Total U.S. dollar assets outside of America have now reached $9 trillion - almost equal to U.S. GDP."

Foreigners may be dumb, Dr Richebacher believes, but stupidity runs in cycles, just like stock market prices and hemlines. Pretty soon, Europeans are going to feel they are a little bit too exposed to the dollar. They're not necessarily going to dump all their dollar holdings, but they are going to hedge.

"When the hedging begins," Dr. Richebacher ventures a guess, "we will have massive deflation of all kinds. The dollar, stocks, bonds, real estate. Everything."

- Never thought to contribute to the '-flation debate', as it becomes clear that paper assets will have to deflate, to allow hard reality to re-inflate to levels, where the production of these can realize some profits and not only add to the demise of reality.
The NAPM figure came out much higher than expectations - a fact that Wall Street enjoys, boyz, are you out'a step with reality, as it just may mean - scrap up the last bean, before the plate is scrapped clean.

Productivity gains - as AG has touted as the means of the new means of new economy, are scrapped and whatever the BLS may deliver has already been added to the dump of history.
And lastly - Mega Mergers of cripples in the IT industrydon't seem to calm the ripples, tearing through the bare rest of the manu-facturing industry.
Though, BB, seeing the consolidation at the oil patch taking on a new dimension of urgency. Santa Fe and and Global Marine, Devon and Anderson Expl. (a 4,6 billion $ deal in cash - my old friend J.C.A. got himself a price!-
are seemingly consolidating at a faster pace than the entire gold mining industry.
A fact, which may have to do with the price appreciation in energy and the next in row will be an accident to happen to real producers of wealth, however stealth at this point and time.

... Well, it's great to see the markets react to fallacy as the denial of reality will be around for years - as you can't ever expect a majority to act 'reasonably'!

... and MK - inflation, the euro and its untimely cut rate policy - and that's what it is, untimely and political! Though, I don't feel it will do much over time to kill the reality of the new arrival, which is now here for all to see - in reality, losing its virtuality.
- Personally, I'm depressed about losing some identity and moving on to a new currency as the DM/ATS has been holding an never wavering equilibri-ty for so long.

... All told, I'd go for gold as long as it's a give away politically - maybe, you should too?

Best regards, cb2

I'm a frequent lurker at USAGold and just wanted to say I'm so sorry about the loss of one of your Beagles.

Our family owns two beagles and it would be quite upsetting
if something happened to one of them.

Hope your children are doing O.K.

It's a wonder both our dogs are still with us. They have
gotten out of the yard on more occassions than I can count.

The beagle's strong sense of smell and endless curiousity, makes it more difficult to keep them out of harm's way.

Novice Bear

Canuck ... I am too truly sorry about your loss of a Beagle - as my "Suffy" is a true and tri-coloured Beagle and the 3rd. generation in my direct family.
... As I know, you can't have more splendid companions
- I feel with you - cb2

Gandalf, far be it for me to interpret (paraphrase) FOA line by line, but you ask a very important question by e-mail which I will try to answer here for all. I hope you don't mind, but I think the whole Table Round might gain traction by your good question and my attempt at an answer:

Your question had to do with "interpretation" of the message I posted last night. Here's my response.

MK: I think what he is saying basically is that there are many vested and competing interests in the paper gold market that Another was well aware of long ago and that he (FOA) did not factor into his own thinking until recently. Rather than take on all these competing interests in an endless rhetorical battle, Another has decided to allow events to do his talking for him. What he has put out for public consumption in the past is a guideline that will get the investor where he or she needs to be -- in the physical metal.

(I find this sentence particularly interesting as it shows Another's basic methodology: "Not wanting to prove anything,asking us to prove everything for ourselves; as these long term events unfolded." Those who have studied Western philosophy are very familiar with the Socratic method of leading the student to an understanding through a series of questions and challenges. The word "education" derives from the Latin "educare" -- "to lead out of" -- as in to lead out of ignorance. To lecture is one method of "leading out of" but for long lasting results educators have long known that the Socratic method -- if it can be employed -- is the most effective. One wonders if educators nowadays even think about such things. We hope that to be the case! Another apparently understands the methodology.)

The key paragraph starts with "In the end, physical gold will win out and prove to be the greatest wealth holding anyone has ever known." All these competing interests will feel the sting of the metal itself as an "old world" belief system manifests itself in the markets (perhaps the European financial establishment?). All will be forced by the implosion of the paper gold market (and the dollar as well) to understand the real meaning of gold-in- the-hand. All gold related paper will burn along with most other paper assets. This is my interpretation, Gandalf, of the message in its essence. Others may have a different interpretation but this is mine. We welcome further discussion and interpretation. MK

On the other hand we have 15,000 potential small business owners who, now disenfranchised and majorly distrustful of big business, will probably assist in pulling us out of the coming difficult adjustments...that is if big brother can allow small business to thrive and not crush it with burdensome taxes.

- on Kurt R's deflation. I.e. real estate, which insinuates that R.E. today is not a hard asset any more, just a new hedging instrument to create more paper (debt- think about it) with the (govern-mental... can u say mental governed basket cases? - pray!) aid of Ginnies and Fannies to the foray - and the decay of the citizens ownership to their spirit to 'own' the home, they can't afford any more than to call the homeland the heartland of liberty.

... as liberty is lost in relation to the printing (even minting) of new fiat FRN's - an economic relativity -
advancing rapidly to the end scheme of all relativity as it hits reality outside of virtuality.
Get a hard (asset) topped roof, to the proof of your stability in an environment of increasing volatility of your (financial) future - a.k.a. the golden roof (Goldenes Dach'l in Innsbruck, Tyrol- a several century old proof for the endurance of gold)- won't ever leak and swamp your precious belongings...

See you - holding wealth true - cb2

http://biz.yahoo.com/rf/010904/n04314714_2.htmlMEXICO CITY, Sept 4 (Reuters) - With Mexican interest rates at record lows and the currency sturdy, big Mexican companies that usually depend on dollar debt are considering issuing peso debt... "This could be a good time for Mexican companies to consider issuing debt in pesos, or converting dollar denominated debt into pesos," one analyst who covers Mexican corporate debt said on condition of anonymity.
-------

No comment needed from me. Just "do the math".

R.

CBII : Yes Sir, that fellow Kurt Richebacher, is "the" kind of rock-solid man, that I would like to be associated with.
Straithforward thinking from the basics and to hell with all blahblahblah.

M.K. : The " all paper will burn ", is indeed a very difficult notion to be understood and (!) to be accepted for most of us. T.G.'s use of the word Gambling versus Speculation does say it all. With Gambling, indicating the end-phase of the paper-evolution.
The HP/CPQ *paper*-merger is the kind of daily evidence that hyperconcentration at this magnitude, indicates the end-phase of contraction and not the start of an expansion.

On top of this, we have the Dow (intra day) spike wich was so predictable again (Netking). Again evidence of manipulative falsification instead of a normal and spontanious (natural) rebound move. Organised paper-giants (funds) who generate more paper "in concert". The K. Richebacher (archytypes) are too rocksolid to get intimitated by such a circus, and wait. But the masses are and will inevitably remain impressed by these heroic nonsense and keep on participating.

I've already passed the "saturation" point, mentionned by slingshot, a few days ago. I'm amused and much less frustrated about lost *Gambling* opportunities. Simply because the whole show gets more and more tricky. For instance, I'm watching those days (increasing) that POO is setting a 2% (and more) intra day range in price. A sign on the wall. Can't figure out if this volatility is mostly paper-induced or the real thing. But it surely contrasts with the lacklustre volatility of brother (or is it sister) Gold.


Do we have any idea about the amount of that is involved in daily [ oil+gold+interest rates+dollar ] virtual moves ? All this paper against the real stuffs is certainly not the kind of volume that is necessary to maintain "liquidity". 3/4 of it, has passed the purpose of healthy speculation and evolved progresivily into a pure gambling business due to lack of too much paper too little real business. That is the main reason that sooooooh much paper (currency), futile paper in excess must and shall burn, because it is so unusefull and completely unproductive. It only serves a paper-illusion and nothing else. This process has an ending, an unevitable ending.
That is how I'm interpreting the attitude of oil versus the dollar-valuation. Oil says : dollar is overvalued and I want more dollars for my barrils. Oil is the one and only capable of doing such a thing at the situation we are in now. Nothing else has pricing power now.

Will oil be the match that will ligth the paper fire ?

http://biz.yahoo.com/rf/010904/n04126675.htmlNEW YORK, Sept 4 (Reuters) - The Federal Reserve is prepared to continue cutting interest rates, a quarter point at a time, until signs of recovery emerge, the Wall Street Journal reported in its online edition on Tuesday.
---------

No comment needed from me.

R.

On economy, peace and derivative nouvelle financial cuisine ... The wisdom of the "Nobel Price" Committee has given this, hitherto undaunted price to real laureats in their specific fields; and who am I to give advice ... except the Yassir Arafat's and Black, Sholes suggest some holes in the infallability of the committee.

Ya'ssir, I do see some holes as in USS LTCM, though I hope that the merrier the weather will enable the rescue of students from Rudi Dornbush's (scrubby, or is it shrubby)view.
cb2

re: "Mexican companies consider switching out of dollar-denominated debt"

For "big float"'s return home to start with MEXICO...
The perverse reality of fiat currency taken to it's extreme.

------------------------------------------------------
I have observed that many very successful corporate entities,leaders in their respective markets, are presently very tight for cash.

I could name several companies whose biggest problem for the past 4-5 years seemed to be finding more production capacity and enough employees.
Among these are companies whose markets are pretty stable even today, such as food companies, a major European tire manufacturer with facilities in America, etc.

Could this cash squeeze be due to the urgent conversion of all possible assets from the US$ to Euros, in advance of the final stage of the new currency's actualization next year?

In open market operations today, while the market rate in overnight interbank lending was slightly firmer than the FOMC target, the Trading Desk initiated $2 billion worth of 27-day repurchase agreements and $3.95 billion in two-day repos to bolster the level of reserves in the nation's banking system.

R.

Henri�

Amen brother! But only if most of these 15,000 disenfranchises are entrepreneurial in spirit. I get advice from people now and then suggesting that I do this or that to improve my business endeavors. The most frequent suggestions come from those who feed at a corporate (or government) trough somewhere because that is the safe thing for them to do. During that wild party of the 90's, we had Secretary's of Commerce and Labor who never held a real job outside of government (or the University System) and have never had the responsibility of meeting a payroll.

I spent many years in the computer industry and have watched it deteriorate geometrically beginning after the bubble expansion of the 90's.

Big business springs from small business. Small business employs more and creates more than all of big business combined. Small business (other than the toothless Chamber of Commerce) is not represented by lobbyists, generally does not benefit from Congressional Legislation, watches quietly as most of the new protective legislation is passed in favor of big business, and dies from predators like Bill Gates who steal its innovations and use them for their own gains. CNBC, the PR Machine, hails General Electric's retiring predator as the greatest innovator and corporate head in history. Harold Geneen had similar accolades during his reign as Chief Predator at ITT.

Henri, I hope that you are correct and one of these laid off individuals is able to gather enough capital to implement an idea that will compete with HP/Compaq/Digital Equipment/GE in the free market. But I am afraid that if this fledgling entrepreneur does become too much of a thorn in Big Bus's side, they will be destroyed by the bankster system before their tree can bear fruit.

Let's hope not. IMHO the small business risk taker is the only hope the U.S. has at this period in our economic history to gain a foothold out of the sink hole that government and big business currently has all of us in.

http://www.eubusiness.com/cgi-bin/item.cgi?id=56998&d=101&h=240&f=56&dateformat=%25o%2520%25B%2520%25YA report on the issue, according to this article, indicates ---the referendum will not be won on economics or even political leadership alone, though strong political leadership will be crucial. People's fears of a "loss of national identity" need to be addressed.---

People sure do love their national CURRENCY, don't they? (As a depreciating commodity, everything works reasonably fine if they simply earn it and then spend it. For savings, however, they should turn to the wealth of gold -- the right tool for the right job.)

This article indicates that a successful pro-euro referendum campaign could be conducted in a matter of only months, not years. (Which would lead one to think that pro-gold sentiment could be raised among the general public even quicker and easier still.)

R.

Excellent observations,glad to have you and your across the pond perspective back again.

Belgian (msg#: 60770)-

"PCD, unproductive-debt-growth, a system where natural-expansive-growth, can be achieved with debt"

I know that I probably missed these terms somewhere in your past postings. I looked back but could not seem to find these definitions. If you would kindly point me in the right direction, I would greatly appreciate it.

I enjoyed reading your #60779 and your other postings.

Regards,

BR549

http://www.usagold.com/onlinestore/special.html

Why buy Dutch gold?

Because Centennial won't sell you tulips.

Are you done buying those nice little rarities? Better not wait too long according to 'The American Advisor'

I know I have posted this before. I am only repeating what I am hearing on a nationally broadcast radio show. It seems they 'know' that substantial money will be flowing into the coin market soon. The other day they reported that a pension fund has already bought in. The implication is that much more money is to follow.

The American Advisor today:

"....We have inside information as to some institutional money that is going to be coming into the coin market. While we can't give you all the details, yet we think that this institutional money could have a dramatic impact on the market.....We're talking about money from fund managers...millions and millions and millions of dollars into the coin market,....chasing after fewer and fewer coins...."


FWIW...

(The American Advisor is a subsidiary of one of the largest coin dealers in this Country). Please do your own DD.

Hi

Dow Jones came creeping along a little up for today, closing at .... say 9997-10000. Wow, the mark is being held somewhat.

What should Joe Sixpack ( = Otto Normalo auf amerikanisch) do now ? Take some profits and make picnic in the den of woe , it is a cheap holiday there, said an analyst, you can get a lot of bugs and worms to eat there, he said.


By
diehard

I just wanted to provide our fellows again with some of your phrases that I believe show your excellent thought-processes as you carve your way into the mountain of mysteries that we all face. When things unwind, your descriptions show well the color and taste of times ahead.

"Investment and speculation have been replaced by *Gambling*"

"It is this greatest show on earth that all Gold-Holders should bear in mind when *time* is frustrating. "

"...wild and violent scrambles for the few exits left...what is subconsciously hidden in the reflex part of our brain...The shock surprise is kept for the final stupor."

"Gamblers only stop gambling when they lose everything."

"Any kind of panic, shall and will, result in a price-inflation. Scarcity as contrast to abundance or saturation. ... The break of any parabolic (hyperbolic) move is always deep and prolonged."

"Small and middle sized businesses are in some kind of "keep on going" mood for already a long time now. The natural profit/expansion possibilities are totally gone. Business-culture (?) has changed into a gambling-bluff-competition."

"Unfortunately all information on German Gold is unavailable and can't give us a clue as to how Gold is involved into the "stability" pact, that is mostly German inspired (Weimar memories). Further on the look out for other clues. And more specific a German/US/Gold relation. "

(Mr G: This is the kind of research I thank you for doing. Of course, only hints can be found for now; 20 years till they speak for historic record. Central bankers are the most tight-lipped of all political figures, and the Germans among them would be most skilled at maneuvering their Panzer divisions close to the border before the drama of combat commences.)

Sir Belgian, I am delighted by your tenacity in thinking, and writing, on this "big picture" we share pieces of here each day. It would be an honor to meet you someday, and see how your thoughts play in the other fields of your curiosity.

1/ Thanks for the go between.

2/ Winnable euro-referendum in UK and general public interest in Gold ?
The major part of the general public has been dis-connected from Gold. The "why's" and "how's" are well elaborated by TG. The hard core goldbugs stick to their goldmine gambles and project the past linearly. Right or wrong ? I've made my choice. CPM will start selling physical gold en masse when Gold shows signs of de-hibernation ! Say a break through 350$/ounce. Then all the information, education, mentoring, aqcuired from this wonderfull team will suddenly be used for massive action.

It is a minuscule minority that is searching for these Giant footsteps. Gold is and has always been, IMVHO, the most exclusive toy of discrete ruling clans...generation after generation. The TG's language is cryptic and needs intense study to understand the profound meaning(s).
The Giants lead and the general public follows (the price).

This very same process is still organized, at present, in the stockmarket. Manipulating (lowering) rates has the effect of mobilizing (luring), hesitating fiat, to join the paper market and accept (pass) the hot(ter) patato.

It doesn't matter how we call or define this process. It is just happening. But FEAR and DOUBT are sight troubling any vision. As simple and as human as that.

Our talks are just killing waiting-time before witnessing factual evidence of our intuitions. With our study, we are much more prepared to profit from the coming dramatic revaluation of Gold. Optimizing that once in a lifetime opportunity. Because that is exactly what these Giants are after. POG into the thousands and not the goldbugs target of 600$. It is when Gold starts to reach the 1980 level, that hell will break loose for good. The enormous past paper-fraud will be exposed, freely. Because it will be classified as history and so everybody is entitled to his interpretation of that history.

Once jobs are lost at the present rythm, the vicious circle starts to spin counter clock wise. They know it and will do anything to turn it around. Whatever the outcome, but accelerating currency depreciation is a given. Deflation means that you allow debt to default. And total debt is way too big to default...so, there is no alternative.
And all this is so magnificantly hidden for the general public with it's good faith and humble status.
The financial industry is in the impossibility to come up for this general public or risks instant jumpings from the windows. The artificial monumental paper-industry is a Giant tail that wags that little specy of economic dog.
Nothing more and nothing less. Pavlov revisited at every opening bell on Wall Street.

The present 300 million EMU people will, like it or not, double at least. It will result in economic expansion, without doubt. Believe it or not, but it took quite some time for myself as an european to realise what exactly was/is going on. Thanks again to TG /MK and many others here. Expansive growth, means automatically, flalala and Goldvaluation must align, exclusive or inclusive TG's theories.

Again, this corresponds with what TG says : the war between $ and gold is secundary to the possibility and gravity of the war from the $ against the �. This leaves us with no other conclusion that (physical) Gold is in pole position.
And very important for europeans is the TAX aspect of the future wich is still very different from the US management.
And the importance of the present TAX-free-Gold is in european context something extra-ordinairy as a signal.
But unfortunately not understood. PAUZE !

Looks like a food fight at "the casino" again today. What a perfect vehicle for long term investors. Surely the next news/sound bite will get us over the hump?

- Invisible, you have visible post !
- BR549 : A somewhat unconventional, student-like terminology (and vieuws) on economics. (I'm not an economic). Got heavily inspired trough intensive study of all USAGOLD archives. 1.500 hours already and not in the least bored! On the contrary, I'm only starting to get some grip on it. May I suggest you do the same and let us spread the word all together. It's getting late in euroland and will certainly elaborate on your questions in time.
- Hi gentleman Gresham : Indeed, I'm hooked on this 5.000 year old element Au. And I want to know it all before having a rest and go for something else as exciting as Au.
W'll talk later for sure.
- Uponroof and the Fund's millions for coins. Gentlemen, do it please. Go for it and have a look at these splendid Dutch jewels.
Sir on the roof, you must have an eagle's vieuw from there.

It is the purest of natural laws, that REAL VALUABLES, wich are suppressed for such a long period of time, will resurrect, inevitably, with Zarathoustra allures.
The suppression was not without reason as will the resurrection. Gold's revaluation will not be just accidental due to lack of alternative or out of boredom...but for very fundamental reasons. Goldbugs will have a very hard time, when they see that physical gold, has been overlooked almost pathetically. Goldadvocates are still in doubt and don't know why. I have much understanding for all the reasons that can be brought up for Gold-Hesitation. Most of the very important decisions in live, require a lot of courage. And there are many different types of courage. Intellectual and physical.
Forerunning and following courageous men and women. And the smaller we are, the more courage has to be produced.

Compare our position against the one of these Giant Funds who have to decide to be on Gold or not. At present, so litlle is needed for causing so much on Gold. Bush will meet Koizumo (Japan) again later on on. They have surely something to discuss on currency. The IMF and Japan...the second biggest economy on earth. How much explosive material do we still have to accumulate before lift off ?
Nikkei + 369 points after a dive of + 300 points...Vegas is in the air !

Slowly but surely, the mighthy paper-generators, will feel really uncomfortable with the played monopoly edition of the past decade. Denial, Acceptance and Capitulation, over and over, again, as leading milestones in the same old natural process. Four seasons or monsoons...? as long as it is cyclic ! Bedtime and thanks for the factual infos.

Cobra, thanks for the (60772) thoughts of Dr.(?)Richebacher. It's nice to see one's views confirmed, in no uncertain term(s).

CPM, my small box of silver arrived safely today, thanks. Now, about the tulips, this is just a temporary snafu in the supply chain, yes? I have only to await my wife's decision (concerning the colors) before finalising our order. Please keep us advised as to availability, thanks.
Rich

Gold $275.00 Goldbugs accumulate at Dirt cheap Prices.
$300.00 Goldbugs accelerate buying. PTB increase
buying to squeeze market to keep physical
from public.
$350.00 Joe sixpack wakes up from stupor. starts
buying in small amounts.
$400.00 Coin/ bullion dealers 7-10 day order period
Public shifts to poor mans gold.
$500.00 Gold brought at $800.00 in 1980 sold back
into market.
$650.00 Gold sales slow. Public takes hard look at
Gold. Decision to buy gold or food. Middle
class hard pressed.
$800.00 Gold sales oscillate. Getting out of reach
for general public.
$900.00 PTB and wealthy become main buyers. Public
left behind.

Gold goes to the Moon!
Just a possibility? Wanted to show the small time investor
My Opinion of the window of opportunity at this time.

Slingshot

http://www.forbes.com/2001/01/30/layoffs.html
The nonessential "Bags of Bones" are piling up with increased fervor as companies can't seem to add to the "Bone Pile" fast enough. This is not a good sign for a supposedly robust economy. The strong dollar policy is killing US business as exports are falling off sharply. Looks as if layoffs will pick up to keep pace.

Re: "The all paper will burn, is indeed a very difficult notion to be understood and to be accepted for most of us. . . ."
------------------------------------------------------------
Netking: My view is where paper is exchanged for the same value as physical PM's on the basis & trust that the paper is backed up by PM when in fact it isn't backed up by a PM . . . . there will come a violent parting between the paper & physical PM markets.

The PM paper will burn & be found to be worthless. There is simply too much paper & not enough physical to back up that promised physical PM on demand or upon obligation. Eg for Ag the ratio is roughly 13:1 for short sold & leased paper over actual known physical in existence.

Paper certificates, lease agreements & signed promises will mean nothing I am sorry to say . . . . what WILL matter is WHERE is the physical PM, and more importantly WHO owns it. - regards Murray

As you have rendered the historical memo of Harold G. Geneen, who rightly should be hallowed at a Hall of Fame of american industry, with quite a few others.
Though now we're talking about a guy called "The Neutron", Jack Welch, laying off 100K people, even before the belch!... in 82, diversifying GE - a company, like ITT to a mere service industry - ... I'd wonder if Jack the Neutron will be re-named The Ripper ... so far he's at par and the manager of the decade by business magazines - a fate, which contrarians have been right so far - becomes the era's new pariah! ... as GE's earnings seem to be tied to the new "industry", while manufacturing capacity is down to 7% of the entity - in its entirety.

... and as I can see genius, bordering on stupidity, in all serenity I would have only taken 1% of the fee this guy, alledgedly has earned firing, coming from a labor family, a third of his employees.

So, now we know, fire most of you're staff and be tough and change, or better re-act to the fact that you're tough and big enough to play the same game as the 'money' monopoly has insured you to be!

- So much for the pure service industry ... and do you still think the numbers of the BLS (Bureau of -extensive- Liberal Statistics) are nothing than bullshit, no- they're exponentially so ... and you wanna'be - the next in death row, just brush bush on the ... e.co(no)m - perfidy - ...

- Well, in reality, I'm kin'da unhappy that the new administration doesn't seem to see the fallacy of economic un-reality, they've inherited ... and even, if they may see
the un-imaginable mimicri of reality ... created by the Clinton /Rubin artificial re-spiracy of an asthmatic paper $ Reserve Currency ( Pauper Lungs for Iron lungs).

- Though probably, the new administration - I'm elected to work for you ( and can only launch - the thinking process at my ranch and a BBQ) - I'm mistaken and then I work for the ... Electorate ... re-electing me ... since that seems kind'a right! G'nite ... cb2 ... and count my ballot, even if it has no depression - YET!

This proposed merger reminds me of the Stone Container/Jefferson Smurfit merger in the paper industry. Massive debt, poor profitability and even poorer prospects going forward are all apt characterizations of these four companies. This merger is about survival.

Cobra, I know you are young enough to remember this fine tune........."Our day will come"...yes?

It is strange isn't it? The Hewlett Packard and Compaq deal is like saying: You got a company in the toilet, And I got a company in the toilet, so let us merge our companies and make one really big company that is in the toilet. Not much of a business plan, synergies aside. Hmmm...

Harry authorised me to �publish� my correspondence with him following our telephone conversation here at usagold.com. So here it is.


Dear Mr. Browne:

I thank you again the time you made for me this morning, � euh last night.

To the question whether the price of gold is being manipulated, you replied by e-mail:
I doubt that the price of gold is being manipulated. In the 1960s and the 1970s, western governments and the IMF used their resources to try to keep the gold price down at $35. By the end of the decade it was at $800. No one is rich enough to be able to manipulate the price of gold.

You told me that gold will only rise during turmoil if there's already inflation.
(Gold also may profit from political or military crises that feed anxiety and increase the demand for a store of value. During periods of declining inflation (such as the mid-1980s), crises that cause the demand for money to rise are bullish for the US dollar. But during periods of rising inflation (such as the late 1970s), such events increase the demand for gold. So if a political or military crisis occurs during an inflationary period, gold can profit from it (The Economic Time-Bomb, p.153))

You told me that if I'm too much invested in gold I'm too much counting on inflation. You also told me that every argument for gold's rise could have been made been in 1985.

What if gold is being manipulated through derivatives (paper gold � wagers on its future price) or through other ways which I�m not intelligent enough to understand but which you will find at www.gata.org ? What if this was not yet the case in 1985? Does this not bring us back to the decade before and after 1971?

Reginald Howe, the plaintiff in the December 2000 court case against the bullion banks, the Fed, the Treasury (Exchange Stabilization Fund), comes to court on October 09 to decide whether it will be thrown out of go to discovery, has a website www.goldensextant.com .

After my signature you will find (the translation of) my understanding of the gold situation as I got it published in February 2000 (10 months before Howe's lawsuit) in the Belgian daily De Financieel Economische Tijd.
(found at The Invisible Hand (09/13/00; 21:14:46MT - usagold.com msg#: 36624)

Do you stand by your doubts that gold is being manipulated?

If, as you told me, gold is in the $ 272 range since years, why is that so? Is that not an indication of manipulation?

Best regards,
The Invisible Hand


Dear The Invisible Hand:

>What if gold is being manipulated through
derivatives (paper gold - wagers on
its future price) or through other ways which I'm
not intelligent enough to
understand but which you will find at www.gata.org
? What if this was not yet
the case in 1985? Does this not bring us back to
the decade before and after
1971?<

I don't believe so. So long as the general
expectation was that gold couldn't deviate from
$35 an ounce, it was relatively easy to maintain
that price. But during the 1960s, the demand for
gold became greater and greater -- despite the
general feeling that the price would never rise.
And once the gold pool ended at the end of the
1960s, it was obvious that governments couldn't
overrule the market any longer; this let loose a
flood and let a genie out of the bottle that can't
be put back.

Hundreds of billions of dollars worth of gold are
traded daily. Like the stock market, the gold
market is far too big for anyone or any government
to control. Gold rose during the 1970s at the very
time both the U.S. government and the IMF were
conducting regular gold sales. The market is
simply too big to manipulate.

Those who want to believe in conspiracies
continually come up with new reasons that "this
time it's different," but it never is.

>Reginald Howe, the plaintiff in the December 2000
court case against the
bullion banks, the Fed, the Treasury (Exchange
Stabilization Fund), comes to
court on October 09 to decide whether it will be
thrown out of go to
discovery, has a website www.goldensextant.com .<

I looked at the website. But there's far too much
material there for me to study and comment, when I
don't believe that (1) anyone is big enough to
control the gold market or (2) the U.S. courts
care anything about it.

>Do you stand by your doubts that gold is being
manipulated?<

Most definitely.

>If, as you told me, gold is in the $ 272 range
since years, why is that so? Is
that not an indication of manipulation?<

No. The range has been fairly wide. I'm working
from memory, but I'd say that it's probably been
between $260 and $400 since 1990. That narrow a
range is of interest only to scalpers, but it's
wide enough to be perfectly natural given the lack
of inflation during that period.

>The oil producers from the Middle-East could
therefore obtain less gold than
before with the dollars received for their oil.
Out of love for gold, they
were thus forced to increase their prices which
caused the first oil crisis.<

If the oil producers could raise their price at
will for _any_ reason, they would have done so
before -- just as you or I would. They were able
to get away with the price increases only because
the U.S. government had recently imposed price
controls on oil & gas producers in the U.S.,
effectively limiting competition to OPEC. When the
price controls were lifted in the early 1980s, the
oil price collapsed -- from the mid $30s all the
way down to $6 a barrel within two years. Neither
the rising price nor the falling price had nothing
to do with gold. The idea that it did is a
romantic notion being peddled by someone who wants
us to believe that gold's rise is imminent for
some new equally-fanciful reason.

>The reason is not that there is too few but too
much demand for gold. Due to
the high demand, 10 to 14,000 metric tonnes of
paper gold contracts have been
signed since 1980. Those contract are concluded by
gold mines with the bullion
banks, among others, the prominent US banks J.P.
Morgan, Goldman Sachs, Credit
Suisse/First Boston and Republic, in order to
secure their future income. The
contracts are being guaranteed by the central
banks. They are in fact wagers
upon the future price of gold as it will be
determined by the buying and
selling of the traders of physical gold. The
contracts are sold by the bullion
banks to the oil producers and by the gold mines
to the hedge funds. Every
increase in the price of gold leads to problems
for the gold mines (cq the
hedge funds) which must then sell gold below the
market price. And what's the
risk for the hedge funds if the realise that they
cannot reimburse their loans
because the necessary gold will only be mined in
10 years time? Hence, the
recent problems for the whole financial sector and
especially for the quoted
banks and thus for the dollar in connection with
the fiasco's of Ashanti
Goldmines and Long Term Capital Management
(LTCM).<

All very plausible -- except that this same story
was peddled sometime in the mid-1990s and nothing
ever came of it.

>Will the euro replace the dollar as the reserve
currency in international trade? This euro is
being backed by 15 percent of
gold reserves.<

As I mentioned on the phone, the gold reserves are
meaningless if you can't convert paper currency to
gold.

>Because the trade balance euroland is, in
contradistinction to
the American trade balance, positive, a rising
price of gold will support the
value of the reserves of the euro and thus the
euro itself.<

It won't change a thing. The whole idea of a
united Europe is a pipe dream -- which is why the
Euro hasn't lived up to the expectations of
strength that people imagined it would have.

With best wishes,

Harry

According to Paplava's last installment of "The Perfect Financial Storm" General Electric's profits, such as they are, are 50% derived from financial revenue such as, I suppose, GE Capital Finance.
70% of this year's second quarter earnings for General Motors came from it's financial investments. It used to be they made money by building and selling cars and trucks. Now they make money by giving you the truck, enough to insure it, some cash for your pocket and payments to cover all costs Plus their own profits. No money? Don't worry, no payments until later with GMAC!
I applied for and received (all in about 10 minutes) a Sears store card some years ago to get the discount offered with the store card. A few years later I received a plastic credit card with a $5000 limit. It was my Sears "store" card which had morphised into a general credit card.
The 30 stocks of the Dow used to be brick and motar companies, but now, it seems everyone is in the finance business. No wonder the Greenman says he doesn't know how much money there is.
Rich

Ruby and the Romantics! Good tune.

"Hundreds of billions of dollars worth of gold are
traded daily. Like the stock market, the gold
market is far too big for anyone or any government
to control. Gold rose during the 1970s at the very
time both the U.S. government and the IMF were
conducting regular gold sales. The market is
simply too big to manipulate."

True or false assumption? I believe false because COMEX is a thin market compared to the Dow or Bonds. This market can be easily controlled by comparitively small amounts of gold.Its price affects the less visible gold markets such as LBMA.


"All very plausible -- except that this same story
was peddled sometime in the mid-1990s and nothing
ever came of it."

Story? A story is either true or false or somewhere in between. Just because it hasn't occured yet does not mean it is not true. What we see here is a big chess game with moves and counter moves all designed to speed up then slow down this golden chess game. Harry refutes what you say, but fails to offer a better explaination.

Are you sure that was Harry Browne and not Neil Cavuto?

My Economics/Finances portion of my brain is empty. I read all of the posts here but I don't understand much of what you theorize. BUT, I'm learning and right now I would like to be educated on the following if someone would be willing to use their time to explain the following:
1. Why did the Dow make such a dramatic turnaround during the last hour of trading today?
2. If I want to add to my mattress keepings, what percentage of each PM should I purchase?
3. Should one keep ANY fiat on hand?
4. What is the consequence/s of the fallen surplus that was "supposedly" existed?
5. IMO, we are in deep recession - rampant
inflation. Am I off base? If not, when will
TPTB/Treasury direct the course for the sheep?
6. Did you see, hear, read about Nevada's Germ Laboratory? Veerrry Interesting.

Thank you for your patience with my questions.
Soj

http://www.iii.co.uk/uknews/?articleid=4160711∾tion=articleExcerpt:

---Addressing an international economic conference organised by his Social Democratic party on the eve of an informal dinner in Berlin with French president Jacques Chirac and Premier Lionel Jospin, [German chancellor Gerhard] Schroeder said there is a need to recognise "weak spots" in the international financial system, such as offshore centres, hedge funds and derivatives.

"So I want to discuss with our European and especially French partners how we can react to these relatively autonomous speculative financial flows," he said.---

How well will the dollar fare in the event of any "retooling" of the international financial system to shore up weaknesses and deficiencies? Or derivatives, for that matter? Imagine gold price-discovery absent the derivative/futures markets. Coming to a theater near you?

R.

http://www.financialsense.com/series2/riders/complete.htm I think you answered your 1st question with the opening statement of your 5th question. Today was a sucker's rally. IMHO it's time to sell the stock market rallies and buy the silver/gold market dips.
James Puplava's 10 part essay called "The Perfect Financial Storm" may give some insight into many of your questions. It can be found at the link above.
Blake Blade has given, what I believe to be, the best financial advice for these interesting times, namely, "get out of debt". It's offen not a question of how much money one makes but rather how little one can survive on.
Our host can advise you as to how much gold and silver to hold. That's personal as are one's finances.
All this is, of course, not financial advice which I'm not qualified to dispense.
Rich

Thanks for the dialogue with Harry Browne.
It would seem from his answer stating that, Howe's website would be too time consuming to read and not worth reading because it can not possibly be true since (in his opinion) the gold market can not be manipulated, states not only his opinion but the reason that he has summarily dismissed any and all possibly that gold is not priced by a freely traded market.
We can not discuss how many angels can dance on the head of a pin with anyone who does not believe in the existence of angels and therefore will not investigate anything to do with them. Oh, by the way, it depends upon the size of the angels.
Rich

http://www.usagold.com/onlinestore/special.htmlI just now had a chance to take a quick look at the consolidated financial statement of the Eurosystem released today -- revealing stats of last week's operations.

In a nutshell, there was a EUR 200 million drawdown in the value of reserve assets held in the form of foreign currency. Meanwhile, assets in the form of gold and gold receivables declined by only EUR 10 million as a result of one member CB selling one tonne of gold (likely the Dutch, resuming their schedule of sales under the Central Bank Gold Agreement -- the so-called "Washington Agreement").

If you want to lay claim to Dutch gold, do it here and now. (click URL above, or call Centennial tomorrow.) The price is good, and the gold is still fresh! (i.e., one hundered years (+/-) in this particular minted form, brilliant uncirculated condition!)

R.

I am reposting a few excerpts from recent FOA on the trail. This first one is from message #104 8/28/01, reprinted w/o permission {smile}:
Still, as part of this political war of economies and currencies, the ECB / BIS played into our gold war theme. Aside from a separate strategy that kept cheap gold commitments flowing for cheap oil,,,,, Euroland played our gold war, too, as we murdered the paper marketplace along with the whole dollar gold system it was built on. I think that the US, just recently, caught on to the "total meaning" of the Washington agreement and is now rethinking what to do with their position.

They shifted their war on gold to become a war on the Euro,,,, only too late. Now, knowing that the Euro is a fact, we must have a super gold price if the dollar is to stay in the game! The question becomes one of supporting a cheap paper price for the sole function of keeping the market and all its bullion players alive. With the war on gold over, they need to turn their tanks around to face the
real enemy but cannot.

If we try to save the dollar gold markets, they will morph into a pure paper system with no gold supply to back them; paper would eventually be priced way below world physical markets. They will become a pure cash settlement item, in a way like the OEX. This will easily drive oil pricing into
Euros. If we adopt a week dollar policy, trash the IMF and it's SDRs (prior to ECB withdrawal) we will have to supply gold bullion outright and allow a true market price based on some currency supporting function; still at thousands per ounce. Our entire anglo - London gold markets will spin
off hugh,,,,, nation busting financial loses. By the way,,,, this is why our boy is driving for EMU as soon as possible. (smile)

In all of this; the main story / component is oil supply! We must keep our dollar function, if only in a diminished fashion, in order to buy oil imports. Once the dollar fully fails, everyone (our partners like Mexico and Canada) will bolt for using Euros as reserves and international settlements. OIL value in the US would spike sky high even as local inflation drives alternative energy supplies to
become uneconomic to produce. Even at $200 a barrel equivalent. END

The 2nd repost is from FOA #101 8/24/01:
At the right time the Euro Zone will withdraw from the IMF, leaving the US and its factions as the only support for dollar credit assets held overseas. Then the evolution of SDR use our guide knows so well will be complete. This will leave the SDR interpretation open to only one avenue to finding support: its basket currency function dissolved, gold will have to flow from American based stocks. With most of the present official credit gold leverage built upon IMF protocols, the US will find itself shipping ever higher priced gold to defend an even lower valuation of dollar exchange rates. END.

auspec notes: There is a LOT of meat in these 2 snippets. Unless I'm mistaken, and it wouldn't be the 1st time {cb2's Kurt R. says even stupidity is cyclical, so I'm hoping for a break real soon}, FOA is delving into this SDR issue IN RESPONSE to James Turk's investigative Wurk. Since FOA already knew all these intricacies of SDRs and gold transfers, I am now asking for the NEXT piece of the puzzle, BEFORE someone else 'breaks' the story. Maybe his life's circumstances allow for analysis of breaking events yet no personal 'scoops' spelled out in advance, could be. I will take my lessons wherever they arise from, but wouldn't mind an accelerated program. What say you FOA?
Now, what do I see as the most important part of the above snippets? The ECB leaving the IMF, no doubt, "..trash{ing} the IMF and it's SDRs"! This is the split in the world CBs/elitists that is so hard for many to swallow. This "ECB/BIS play{ing into our gold war theme" is the piece of the puzzle that never seemed to have a home. The BIS is not currently being sued by Reg Howe and GATA w/o reason. They are clearly a significant part of the gold schemes going on now, and this has been a large part of the difficulty in seeing the Europeans actually dividing from the Anglo-Americans as it regards gold events. They have certainly NOT APPEARED to be very divided. Oh yeah, the WA hinted at same, but also seemed to need some prosthetic teeth, or at least a good reline.
The significant date of the EU currency is nearly upon us and this has been held out to be a watershed event. I'm ready, we're all ready, will it be timely? When will the BIS diss the IMF? When can we say those glorious words {acronyms} AMFIMF? Gold may break free, thank you kindly, but the next entity will simply be IMF2, imvho.
Why is it that James Turk claims up to 78% of US gold is 'gone' as of now {allocated at least] and FOA says "we will have to suply gold bullion outright" as a FUTURE event? Are these 2 positions reconcilable? Maybe they are, I'm really not sure. the US{CI}A has always honored its commitments hasn't it??
Hey FOA, throw us another bone, will ya, man?
Kind regards,
auspec{yclicality}

http://quote.yahoo.com/m2?u
The Nikkei is falling hard again, this time after the NASDAQ and S&P posted losses. The DOW charged higher only to give most of the gains as investors "sold the rally" and reality set in. The DOW rocketed higher on lowered expectations of the "Purchasing Managers" index. If the bar is lowered enough, then at some point expectations will be met or beaten. Many investors are grasping at straws in a maddening attempt to remain solvent. It appears to be a losing game as the Global Economy slips into the Recessionary abyss. Time to clear off the books and get some hard assets like PMs to ride out this "Perfect Storm."

http://groups.yahoo.com/group/gata/message/879AngloGold seen taking over Normandy.

http://groups.yahoo.com/group/gata/message/879


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

gata-subscribe@yahoogroups.com

Belgian (msg#: 60794)--
I understand. Should I choose to invest 1,500 hours it will be into "Flip Wilson's" old school of what's happening now. I was hoping that you could provide me some succinct definitions of your terms but was sorry to learn it would take you some time to do so. Thanks anyhow.

CoBra(too) (msg#: 60799)�
Your genius for arriving at the bottom line post after post continues to amaze me. Kurt Richebacher and other of your ideas deserves much more bandwidth and much deeper thought.

Cavan Man , R Powell, BB�
Very simply, I agree with your latest posts. It is amazing to me that mergers of mega business (that limit competition, constrict entrepeneurs ability to enter the market) continue to bask in the media spotlight as being good for this country. Dumb blondes seem to be in charge of this economy.

Warmest regards,

BR549

Sojourner, I'll give you my truth although I think there are far better here to assist.

1. Why did the Dow make such a dramatic turnaround during the last hour of trading today?

People playing the market now are traders. There are a lot new new methods to influence prices and markets these days, from futures to derivatives markets. I don't claim to understand them to any great depth and doubt many do. The markets ran up today because some people thought it would be a good way to kick off the new season and get everyone on board. They went down because others thought it was all bogus and were looking for a good exit point.

2. If I want to add to my mattress keepings, what percentage of each PM should I purchase?

I think TG, and Randy (Site Steward), are correct, mostly gold. Gold is a political metal and will be the currency of international trade settlement. It was never meant for peasants. Get it while you can. Silver is far more useful industrially than gold and has a great future. It could multiply more than gold but is dependent upon industial use more than a store of value. I own slightly more ounces of silver than gold. I bought platinum many years ago but do not plan to invest more. The platinum group metals are most valuable for their catalytic potential in fuel cells and catalytic converters but are thus dependent again on economic conditions and the markets in farther in the future I think. There may also be alternatives to the catalyst properties as the auto companies have found a way to cut their demand in half this last year.

3. Should one keep ANY fiat on hand?

Yes. But I tend to keep spending mine on more gold.... it gets hard to control. I want to keep enough on hand for 3 months normal expenses, at least. Anything that has legal tender status is valuable, even if it's beaver skins.

4. What is the consequence/s of the fallen surplus that was "supposedly" existed?

It depends on what they want to do about it. I never thought it existed. Just part of the credit bubble. People may get concerned and think there might be a problem. This could be positive. They could wake up and try to protect themselves by buying gold before it is too late. Or they could just blame George Bush and end up jumping from the frying pan into the fire. Some minds were never made for thinking.

5. IMO, we are in deep recession - rampant inflation. Am I off base? If not, when will
TPTB/Treasury direct the course for the sheep?

I have not seen a lot of inflation in most day-to-day items. I now shop at Wall Mart and pay less then last year for many things. WOW! In my opinion Inflation has been mostly confined to services (medical) and investment assets as this is what the baby boomers now want most of all. Back in the 60's and 70's it was cars and food and clothes and houses. Same inflation just different outlets for now. We are now in a profits recession/depression where the investment returns will be disappointing at best. The PTB are already doing everything possible to direct the sheep. How long until the mutton is served ????? I do not buy gold because of the potential for inflation (real as it is) but rather because it is so extraordinarily undervalued and it's future monetary role in world trade. And because it is about the only honest thing out there right now.

6. Did you see, hear, read about Nevada's Germ Laboratory? Veerrry Interesting.

No. Tell us about it.

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=TOPST&ARTICLE_ID=114685
Snippit:

HOUSTON, Aug. 31 -- The US gasoline industry will be wracked by greater price volatility in the next 2-3 years as it adjusts to environmental regulations that restrict its ability to cope with rapid market changes, analysts said Friday. In the past, he said, the market was better able to deal with sudden changes in supply or demand, in part because there was spare storage and refining capacity that allowed greater flexibility. But market changes in recent years have made industry management reluctant to tie up capital in inventory.

With refineries operating at peak capacity almost year-round, there's no spare capacity to bring on in an emergency. In fact, disruption of any refinery's operation can trigger a potential disaster, as when a fire knocked out Citgo Petroleum Corp.'s 158,650 b/d Lemont, Ill., refinery (OGJ Online, Aug. 24, 2001). Proliferation of specially blended "boutique" gasolines mandated for specific markets also reduced the industry's flexibility to manufacture and distribute products as needed to supply area shortages, Goldstein said. As a result, he said, "Price now has to carry the extra work of clearing the market." But it takes a relatively large change in price to force even a small change in demand. "The environmentalists love it. They support high prices on petroleum," he said. "And refiners' (profit) margins have improved, so they also benefit."


Black Blade: In short gasoline prices are high and will likely go higher. OPEC may be a factor, yet nutty EPA decrees have only made a bad situation worse. In short, gasoline prices will be high and that will add to higher transportation costs that must be passed on to the consumer. Now that is not included in the CPI core-rate so we shouldn't worry - right?

http://biz.yahoo.com/rf/010904/tav024288.htmlI've noticed there seems to be a lack of accountability for the Japanese to accept responsibility for their own plight. . . . . every down day is usually accompanied with a link to a negative Americanism (per above headline)as a blame, not a focus on their own "house of cards" yes.

The only Germ Lab that I am aware of anywhere near Nevada is the US Army research and development center at Dugway Proving Grounds in the western Utah desert, (on the southern boundary of the Goshute Indian Reservation in Skull Valley, Utah) where chemical and biological agents are developed. Mostly civilian workers are there now with a minimal military presence. In the 1960's a flock of sheep were "accidentally" dosed with nerve gas. Quite an embarrassment for the Army as it was supposed to be a "secret" facility. Now it even is featured in Sci-Fi flicks like "Species." OUCH! Now the old nerve gas and biological (bug) canisters are deteriorating so they are transported to the South Tooele Utah Army Depot for disposal in extremely high temperature incinerators.

- Black Blade

Tough, we'll see Monsieur de Crespigny, what your other partner, namely Franco Nevada will have to say ... about the Anglo raid, and BTW a little late - as I rate Anglo(s) as late pirate brigades for "bullion estates" - Hey, mates, your truly down under ... Seems a desperate move a' la Barrick(ade) to improve unencumbered reserves - to service the Bullion Banks hold on 'your cheap sold forward gold' - creeps... No, don't tell me, as I assume Franco will make a 'plume' and to hell with it.
Doom and Gloom for the last bit of gold producing industry - to wit - who needs thee ...? ... ever 2cb

If you will excuse an uninvited remark the difference between now and the 74-81 period is that the US now has the cooperation of the Saudis and the Persian Gulf States due to the boogey man looming to the north of them. In the late '70's they were buying gold like $ were going out of style (and in a sense they were) now they are lenders and sellers of gold.

Saddam Hussein is the best thing the PTB have for keeping the oil states in check - for a while yet anyway.

The fact that the Europeans do not have the cojones to deal with that issue alone is also the reason they will never enter full scale economic warefare with the US. Gamesmanship? for sure, but no full scale economic war. Without Middle Eastern oil Europe is bankrupt and the US is the only power strong enough to hold the ME in check - for a while yet.

FWIW

http://quote.yahoo.com/m2?u
Asia is mostly in the Red. The Nikkei and Hang Seng are racing for sub 10,000. "Interesting Times"

Hello All,

I just got done reading my latest edition of "World Coin News". For those of you that aren't familiar with the publication it is basically a newspaper magazine like Barron's that is a great educator of those interested in world coins. After seeing the "ad" for the Queen Wilhemina's on the forum earlier today it jarred from memory an article I read on Saturday. I thought some of you might find it of interest. Not wanting to infringe on any copyright laws, I'll post as much of a snippit as I can.

DO GOLD COINS REPRESENT AN OPPORTUNITY?

Snippit 1

"It's a buyers market out there for collectors with US dollars to spend. The question, as always, is will collectors take advantage of the opportunity?

At a time of new issues from world mints that are made of gold seem to be declining in numbers, enterprising dealers are acquiring stocks of interesting and what used to be incredibly scarce older gold coins and putting them on the market."

Snippit 2

"Even in periodicals geared toward the collector of US coins, you find other world gold coins sprinkled in ads at prices that strike us as incredibly cheap.

How will the collectors respond? There is a paradox at work here?

Back in the 1970's when the price of gold bullion was following a parabolic curve higher and higher, eventually peaking out at $850 a troy ounce in early 1980, buyers couldn't get enough of gold coins. No matter what the price, they bought. No matter how high the mintage, they bought. No matter what the theme, they bought. All that mattered was acquiring some of that glittering precious metal before the price shot even higher. After all, conventional wisdom had it that a $1,000. a troy ounce was a certainty and $5,000. an ounce wasn't too far down the road, because everybody knew inflation was beyond the control of the world's central banks."

Snippit 3

"It is perhaps not so much that people are convinced that the price of the precious metal is going down as it is that we have all the time in the world to enjoy current market conditions. If I don't buy today, I can always buy tomorrow at a similar price, the reasoning goes.

This complacency is rewarded as long as the market stays in its present condition. But how long will it remain there? The world is changing. The truths of the 1990's seem to be giving way to what the new truths will be in the 2000's. With new truths come new behaviors, and new behaviors breed uncertainty. Uncertainty has always fueled demand for gold.

The gold coins that seem to be everywhere appearing at reasonable prices can jump back into hands that will keep them of the market as long as the previous holders.

Nobody will sound a two-minute warning to tell all potential gold owners to act now before the rules change. Something will happen and the sense of all the time in the world will be eliminated. The scramble will start.

When bona fide rarities come to market at reasonably prices, treat it as an opportunity that may never come again. Buy if you are interested. Refrain if that isn't your thing, but recognize the unusual nature of the event and act in full knowledge that it may never happen again.

Nobody can know the future. But you can know what is is you want to collect and whether opportunity is knocking at your door. If it is answer."


The reason why I post this is when I was young, many of these coins were unobtainable. Not only because I didn't have deep pockets at the time, but many of these coins were rarely seen. I've only had a sincere interest in foreign coins for the last few years. The premiums on these coins are ridiculously low compared to yesteryear, and of course they are beautiful.

For you collectors such as I, at these prices it's relatively easy to put a Country's type set together, or buy a whole series for that matter.

It's interesting in the same edition the Venerable Bowers & Merena Galleries are advertising a contest. The contest entails a 100 word essay on "How B&M can help you build a world coin collection". It seems they have had a lot of demand for world coins, but haven�t started carrying them to date. This sure tells us that our host here is not behind the curve in numismatics...I believe he has been offering them for years.

There could be a trend developing for not only buying world coins for investment potential, but for collecting as well. Even if the trend is in its beginning stages, I have noticed quite a bit more attention being paid to this area for some time now and thought I would pass it on.

Good evening,

The CoinGuy

Normandy Mining Limited ( "Normandy" ) responds as follows to the announcement by AngloGold Limited ( "AngloGold" ) regarding its intention to make an offer to acquire all of the shares in Normandy.

AngloGold proposes to offer 2.15 AngloGold shares for each 100 Normandy shares. The offer values Normandy at A$3.2 billion(or A$1.42 per share)based on the closing price of AngloGold on the New York Stock Exchange yesterday. The offer represents a premium of 29% to Normandy's closing price yesterday.

The Normandy Board has appointed Macquarie Bank to assist them in assessing AngloGold's offer and in preparing a formal recommendation to Normandy shareholders.

The Chairman and Chief Executive Officer of Normandy, Mr Robert Champion de Crespigny, said today: "Our Board will make a full assessment of the offer on behalf of our
shareholders as rapidly as possible and then inform them of our views.

It is fair to say that the objectives AngloGold has in this offer are similar to the strategies we at Normandy have expressed for some time. Consolidation in the gold and other commodity sectors is necessary as companies seek to gain critical mass, both operationally and in order to gain more efficient access to capital through greater liquidity and better market ratings.

Normandy has acted as a consolidator in this industry to date but we recognise that even larger scale is now required. I am pleased that AngloGold recognises the quality of Normandy's substantial Australian and international gold operations and its strategy of focussing on the gold industry. AngloGold is one of the leading companies in this industry and its offer is a logical industry move. However, we need to complete a full review of the offer so that we can make a recommendation to Normandy shareholders. We have commenced this process and will keep shareholders advised.

Shareholders will have several weeks from the date that they receive the bidder's statement to consider the offer and the Board's recommendation. Shareholders need take no action until they have received this advice. The Normandy Board will continue to keep the company's shareholders
abreast of any issues that emerge throughout the course of this offer process."

R J Champion de Crespigny
CHIEF EXECUTIVE

http://www.nypost.com/business/32253.htmThis is where the hardworking foot hits the cruel pavement of the real world.

The sheople are sensing the storm before TPTB are ready to acknowledge it. They are pulling in their over-extended financial arms and looking inward, in contraction. The future stinks of multi-national corporations and governments deciding how best to manage the global human herd.

As KR reminded us, a nation doesn't save by spending. We are in a downward economic spiral that is masked and falsely portrayed by media, govt and corporate spinners. We are as cows milked by their owners. Try not paying any of a plethora of taxes and see who really owns what you claim as personal property---house, car, bank account, credit cards, minor children, physical freedom -- in a word, your liberty.

Perhaps the most favorable entities to assume the likeness of are offshore and corporate. TPTB use these for personal and business matters all the time. Why not everyone?

Nails are all that Hammers can see. Don't be a nail, mate.

Why would Harry Browne say something that patently absurd when he knows full well the 'damage' two hucksters caused to the silver market in 1980. His statement does not jive with history, plain and simple.

http://www.thescotsman.co.uk/business.cfm?id=104913&keyword=the
Snippit:

It did nothing to lighten the mood at this year's Offshore Europe Conference 2001, being held in Aberdeen this week, when the grim prediction was made that Britain is in danger of becoming heavily reliant on imported gas for its energy needs in less than 20 years. "In future, Britain will become increasingly dependent on imports of fuel, particularly gas," energy minister Brian Wilson told the assembled industry bigwigs, analysts and hangers on. Yet for most in the business, it will not come as a shock. After a revolutionary decade in the North Sea oil and gas industry, the sector still appears seriously flawed.

Black Blade: I am not surprised at the fact that the North Sea fields are in decline, however, I am surprised that it isn't depleting sooner.
View Yesterday's Discussion.

http://timesofindia.indiatimes.com/articleshow.asp?art_id=1446408654Snippit:
"More than 140,000 jobs in Japan's auto industry may go by 2005 as firms struggle to boost efficiency and increase profits amid a prolonged global economic slump, said a major car union on Tuesday.

"We estimate 143,000 jobs could go by the end of 2005 through natural attrition as companies cut back on hiring new staff or replacing old employees who retire or choose to leave," said policy bureau chief of the Confederation of Japan Automobile Workers' Unions, Yoshiro Sato.

The predicted job cuts represent 18.8 percent of the total auto industry workforce. Around 761,600 people currently work in Japan's automobile industry, Sato said.

"Times are very tough for automakers at the moment because of intense competition from abroad and the impact of the sluggish global economy. . . ."
-----------------------------------------------------------
The news for our Japanese friends just doesn't get any better - Netking

http://www.thescotsman.co.uk/business.cfm?id=104699
Snippit:

BRITAIN'S beleaguered manufacturing sector is heading deeper into recession, with output last month slumping to its lowest level in more than two and a half years. The latest monthly purchasing managers' survey from the Chartered Institute of Purchasing and Supply (CIPS) showed manufacturing production endured a sharper than forecast fall as it continues to be battered by the US-led global slowdown and the high rate of sterling.

Export orders fell at their fastest rate since January 1999, reflecting both the collapse in the US market and a further fall in sales to the eurozone as well as sterling's current strength. The survey also showed employment in the sector continued to fall sharply, with companies continuing to shed workers in a desperate bid to cut costs.


Black Blade: The economy is not much better across the pond. I guess those BOE gold auctions didn't help.

Netking : Can you confirm that Paper Ag versus total physical Ag = 13 to 1 ! Thanks.

Randy :#60809 - Gerhard Schroeder (Germany and France) and their focus on " The Speculative weak spot in the International Financial system " !!!! GEEEERHARD...IT IS VEGAS/MONACO GAAAAAAAMMMMMMBLINGGGGGGGGGG !
Helmuth Schmit (a man of the world), already stated his deep worries about the insane volatility through exhorbitant financial managed leverage, a few years ago. So it is all quite late in the process that they start raising voices. But it is part of the deroulement.

Invisible : Good Harry looks tired and relies on somewhat outdated instincts. His answers are a representative for how the less informed are looking against the present transition-period. With much understanding for it from my side.

BR549: Briefly on Permanent Currency Depreciation : Debt, and more precisely, unproductive Debt, in permanent increasing quantities against a dis-proportionate production of real goods and services, is the reason why this snowball that started rolling 30 years ago...will and must grow to a suffocating and distroying avalanche.
It is a linear process with increasing momentum where the cyclic aspect of it (infla/defla) is reduced to insignificant mini cycles. It is when the avalanche is reaching the village in the valley that the awaikening will be rude...very rude. In the mean time, it keeps on snowing and more and more fiat confetti (snow) is created out of nothing and worst of all, having no other purpose than superficial fun for all monopoly players, playing near the comfortable open woodfire, inthe valley's houses.

Dynamite man : I'm afraid that your explosive logic is wrong ? The M.E. has paid for the Gulf defense and is getting onwards with no (much less) complexes. Bear in mind that europ is working hard on oil and gas in the former USSR areas. These resources can easely flow through pipilines into the whole of europ. And it is not, because europ doesn't wan't war, that we have to live with and under the dominance of stand by warlords.
Today, a Chineze delegation arrived here and the talks are very, very significant.!!! China/Europ and that famous US schield ! China is, like it or not, heading for a very important place under the geo-political sun ! Adjust some of the old logic. The world is evoluating with a few billion new people coming in and most importantly, some shift in power balance. And power does not always mean : armed forces and confrontation. Can you agree on at least part of this vieuw, without taking the timing into consideration ?

Hello Sir Belgian,
Between the COMEX, leasing and OTC, we have a 2 billion ounce silver short position (minimum). There is also 125-150 million ounces of known physical silver inventory(nobody can prove more). The above calculation shows a ratio of 13-16:1

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT32BZ7T8RC&live=true&tagid=IXLI0L9Z1BCThe leaked report data confirms what we already knew, & despite "cooking the books" in the previous quarter to try & avoid the technical qualification of recession, all but the Japanese know they are in a recession.("We are not, I repeat NOT in a recession!" - Nippongate)- Netking
------------------------------------------------------------
Snippit:
Japan's Cabinet Office has told members of the ruling party coalition government that the economy contracted by around 1 per cent in the second quarter, ahead of the official release of the figures this Friday.

However, the government on Wednesday publicly denied the 1 per cent figure for the three months to the end of June, saying it was only discussing private sector estimates.

The figure is in line with economists' estimates but will still mark the first quarter of negative growth for three quarters, confirming widely held beliefs that the world's second largest economy is already in a recession.

Japan will avoid a return to a technical recession - two consecutive quarters of contraction - after it recalculated the first quarter's figures so that they were positive rather than negative. . . .

http://quote.yahoo.com/m2?u
After the Nikkei and Hang Seng get drilled for losses, European markets are falling as well.

09/04 17:37
California Buys Time With $5.7 Bln Note Sale: Rates of Return
By Dennis Walters

Sacramento, California, Sept. 4 (Bloomberg) -- California's efforts to shore up its finances got a boost
when a cool summer prevented power blackouts. The state may catch a second break when it sells $5.7
billion of notes next week.

California likely will pay around 2.4 percent, the lowest rate since 1994, on the nine-month tax-exempt
notes, investors said. That's down more than 2 percentage points from last year, driven by a decline in the
country's benchmark interest rates.

California needs the cash from the sale to help replenish coffers after lending $6.1 billion to the state's
Department of Water Resources to help it buy electricity for investor-owned utilities that were hammered
by a power shortage in the state.

The state is ``getting a real gift on interest rates,'' said Bud Byrnes, chief executive of RH Investment Corp.
in Los Angeles, which specializes in California municipal bond trading.

The state said the notes sale will let it cover spending through the fiscal year ending next June 30 even if
the Department of Water Resources doesn't repay it by then.

The water department may have trouble repaying the loan because a $12.5 billion bond sale it has
planned for late October could be delayed by legal challenges from utilities and consumers.

The note sale ``will take pressure off the general fund in terms of immediate reimbursement,'' Claire
Cohen, vice chairwoman of Fitch Inc., said in a conference call with investors last week. With proceeds
from the notes in hand, a delay in the bond sale ``wouldn't have that much effect on the state.''

The water department also plans to use proceeds from the bond sale to repay a $4.3 billion interim loan it
arranged with J.P. Morgan Chase & Co. and other banks in June. The department faces an increase in the
loan's interest rate if it doesn't repay it by the end of October. The rate would surge to 7 percent from 4.14
percent, tacking on $10.2 million to the department's financing tab each month.

`Lot of Supply'

The state's electricity spending and a slowing economy wiped out a projected budget surplus, making the
note sale a necessity.

Investor concern about California's shrinking budget surplus will prevent yields from falling further in the
note sale, analysts said. The size of the sale -- it's the biggest note in the municipal market this year -- will
also keep yields up.

``That's an awful lot of supply'' for investors to absorb, said Todd Pardula, who oversees about $760
million in California tax-exempt money market funds for American Century Investments.

Two years ago, the state sold similar notes at 3.3 percent, 40 basis points below the average yield on
those securities, according to an index compiled by The Bond Buyer newspaper.

In contrast, California is expected to borrow next week at yields closer to the market average, which was
2.44 percent last week. A yield of 2.5 percent or higher may be needed to drum up demand, Pardula and
other investors said.

Moody's Investors Service and Standard & Poor's lowered California's credit bond ratings this year on
concern the energy spending was eroding the state's finances.

California ``is not quite the credit (it) used to be,'' said William Henderson, a vice president of Blackrock
Institutional Management. He said he doesn't plan to buy the notes next week.

The water department's planned bond sale, which would be the largest municipal borrowing in U.S.
history, will also keep borrowing costs up as investors leave room in their portfolios for that debt.

Money Inflows

Still, analysts say there will be demand for the debt after the Federal Reserve cut its benchmark overnight
interest rate seven times this year to 3.5 percent. Money is flowing into fixed income funds, including
those that specialize in municipal notes sold within California's borders.

Tax-free money market funds' assets have risen almost 10 percent this year as investors pulled out of
declining stocks, Imoneynet Inc. said. Municipal bond funds also have benefited, taking in more money in
July -- $2.33 billion -- than they have since May 1998, the Investment Company Institute said.

Yields are tumbling as money flows in. The average yield on tax-free money market funds tracked by
Imoneynet Inc. fell to 1.81 percent last week, its lowest level in seven years.

California's notes will soak up some of that cash in part because investors are clamoring for higher-rated
securities, Byrnes said. Fitch Inc. assigned today its highest credit rating to the notes.

The state plans to sell a mix of notes offering a fixed-rate and yields based on an index, such as the Bond
Market Association Municipal Swap Index. Notes tied to an index can provide lower costs for a borrower
than fixed-rate debt.

The state's finance officials are slated to hold a conference call with investors Wednesday to present
California's finances and the note sale.



Blackblade and all....
I'm speechless, absolutely dumbfounded that anyone would even consider buying into this version of "Orange County" 2001....as risk verses return ratio is totally "out the window" here..in fact almost everywhere else also now..as soon as they all "wake up" the're gonna head for the door at the same time. By then it will all be over..glad I'm holdin' my Maples and my Eagles...I may be just a lurker here, but I was buyin' into the hard stuff since '90..
I have a feeling this year's "post Labor Day" party is going to be interesting...

http://biz.yahoo.com/rf/010905/n05234152.html
Snippit:

WILMINGTON, Del, Sept 5 (Reuters) - Chemical company Hercules Inc. (NYSE:HPC) said Wednesday it will lay off some 300 workers and cut some more jobs in Europe as part of a restructuring plan.

Black Blade: More "Bones" cast upon the ever growing "Bone Pile" as yet another company sheds nonessential "Bags of Bones."

http://biz.yahoo.com/rf/010904/n04676009.html
Snippit:

NEW YORK, Sept 4 (Reuters) - Late payments on mortgage loans insured by the U.S. government's Federal Housing Administration rose to record highs in this year's second quarter as job cuts and a slowing economy hurt homeowners. The pickup in late payments was evident in all mortgage loans and the credit situation for homeowners is expected to worsen.

Black Blade: Looks ugly on the home front as well. This could not be good news as it just might contribute to the expected real estate bubble that many expect. This also does not bode well for individual investor sentiment in equities markets either. The consumer is tapped out. It will only worsen - hang on for the ride!

I think Mr. Brown is brilliant but, he has evidently not studied the contemporary gold market in the depth needed to understand the current dynamics at play.

clink clink clink
clink clink clink
:-)

Word in from large Veterinary clinic.
People are starting to elect euthanasia over expensive surgery options. Very lackluster response to Vaccination notices. Animals that are coming in are at more advanced stages of illness than usual.

I guess the pinch is to be felt by all family members.
Time was when people would spend more on health care for their animals than they would on themselves (neglecting health insurance premiums).

It was my impression from FOA postings that FOA was not fully attuned to the implications of all the various forms of gold derivatives. It is "Another" that is revealing the meaning behind events as they unfold to FOA and then through FOA to (US)A Gold forum.

Perhaps he has gone to get the next set of insights.

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3HX8NZ7RC&live=true
This is one of the most bearish articles I've seen on the carnage that has been inflicted and the the carnage yet to be inflicted on this sector.

Malinvestments,obviously;but inspired by what influence?

Sir Auspec # 60813 : IMF/BIS/ECB . Their "REAL" intentions are too well hidden for me to detect. Their masses of academic literature don't provide me with workable clues.
I have to wait and rely on an other kind of onion peelers to do this specific job. But...come and look at that universal currency, "the dollar", from an upside down angle :

The basic (intrinsic) value (purchasing power) of the dollar, is determined by his 2 most universal determinators : GOLD and OIL ! And not the other way around.
The dollar-printers are not telling the, outside US, dollar-users (9 Trillion $ = almost US-GDP), at how much, that dollar is valued.

GOLD + OIL are the perfect tools to make or break the value of the dollar. For the simple reason that GOLD/OIL are exchanged for US$.

This upside-down-vision is in full contrast to what we all have been accepting for so long. It all dates from before 1971. Then that piece of dollar-paper was almost as good as GOLD and later almost as good as OIL. This is of course the TG's Fundamental and a very difficult paradox (virtual contradiction) for the globe to understand and accept.

IMF/BIS/ECB, have no grip on OIL and have only GOLD for maneuvering. OIL is the tool of the private, dollarvalue- determinators. And the GOLD from IMF/BIS/ECB is a fraction of the 140.000 tonnes that holds the leverage and sets the tone.

Further upside down thinking : Why isn't Gold been promoted by the Central Banks and their soldiers ? Why is that unique piece of METAL-CONFIDENCE treated so badly ? Why must the SELL-PSHYCHOSIS be maintained ? Gold received an additionnal purpose. Not only as a reserve to be used in extreme emergency, but now as a dollar-balancing-tool.
Gold-reserves...Custodial Gold...Deep Storage Gold !!!
No matter what the exact meaning of it is. The fact that it is re-named is evidence of that additional purpose (use) for Gold. 12 EMU-members have to re-organise their Gold-Holdings and add proportionally to a Gold-Pool (ECB).
If the � had no plans with Gold, they (ECB) should have left all these goldstashes for what they were.

All this is strongly suggesting to me that at one particular moment, when all fruits are ripe...a very strong GOLD-SIGNAL will be given by the Currency-Planners !
In the mean time, they must be sure that the Private Gold Holders don't interfere with "the" plan. That's obtained as a result from and with the paper-hysteria. In the mean time, OIL is working on his part of the dollar(de)valuation in concert with the Golden TAX-Collectors.(75% tax on oil)

Now, do we have to call this whole set-up a conspiracy or a master plan or bright management ? Don't know. But acting as if all, is business as usual, is absurd.

The real masters are the ones who arbitrage Gold / OIL /DOLLAR. The Rothshilds ! & Cos.

The private Gold-Hunters are not allowed to corner Gold and devalue the dollar to 1.000 dollars for one ounce. Because the 9 Trillion paperdollars can't be shredded, before they have been covered (replaced-exchanged) with something else, where a majority, determines that it has more value.

The subtility of this enormous maneuver can only be executed by the cr�me de la cr�me of monetary planners and builders. They do hold all their cards very close against the chests. No glimpse of it...or was the WA...a voluntary blinking ?

The recent "frictions" between � and $ are difficult to analyse, logically. Because of interactions with the capital-flow-tsunamis. Interest rates and economic activity are imvho, rather secundary. We are all contracting anyway.

Anti-Gold and Oil-impact-minimalization, must be regarded upside down and considered as to have a purpose. And it is very normal that none of the financial analysts are going to report from such an upside down position ! Can you imagine...

http://www.gold-eagle.com/editorials_01/schicht090601.html - answers most of your latest questions, IMHO. Hope
it works - regards cb2

Note: A lot of GAAP assumptions are thrown over the side for purposes of this illustration.


Our Bank of Cornfield County is real small. We are brand new and have just joined the Federal Reserve System. The entire net worth of our entire county banking system is: $8,000.00.

Bank A (that's us) = $8K.
The other banks in Cornfield have a total current net worth right now of = $0.00 but that is going to change.

Our balance sheet (Bank A) consists of $8K in cash (Asset) and $8K in stockholders equity (Liability). There are 9 other new banks in the county started at the same time and we have agreed to keep all of our banking transactions simple and within the county.

A local beekeeper, who gets stung a lot, wants to buy a car. Our beekeeper has $4K in cash that he inherited and brought into the county. The car he wishes to purchase is worth at least $8K according to our "Blue book" appraisals.

Our bank has agreed to lend the beekeeper $8K.

The old owner of the car will receive $8K of paper cash from Bank A and $4K from the beekeeper after the loan takes place�

Our revised books post loan at Bank A now show cash = $0, notes rec.=$8K and stockholders equity = $8K. So far no change in anybody's basic net worth and no new fiat put into circulation.

The net result is the borrower already had $4K in cash which he provided to the owner of the car, he borrowed $8K, and the bank issued a piece of paper worth $8K against an encumbered depreciating asset. No new money has been created here. All transactions are in balance. The car is carried on the bank books at $8K (not $12K which is its current market value).

The $12K paid to the old owner of the car goes wherever he desires. No new money in circulation here. No inflation or deflation. No fractionalized banking, no multiplier effect, no new money created.

If the transaction is paid off as per the contract, the only new money that is created is interest accumulation on the principle which is in return for the money obligated.

That's the economic perfect world here in Cornfield County�

Now let's talk about fractionalized banking.
The seller of the car has an account at bank B in our county. He deposits the entire $12K (the $4K in cash received from the buyer and the $8K he received from Bank A) into his savings account at Bank B. Bank B is just getting started and although it began with $0.00 now it has a balance sheet of Cash=$12K and Depositors Savings Payable of $12K.

Following the guidelines of the Fed, Bank B has a reserve requirement of 10%, which means that it must keep $1,200 in reserves (of the $12K) of its new depositor and can lend out the remainder as a loan. It loans out its maximum less the reserve and the person receiving the loan takes the $10,800 he/she received and deposits it into Bank C. Bank C must keep $1,080 but can loan out the remainder for all of the banks in the system. Net, Net the money supply in the county has been increased by approx. 10 times the original amount of $12K The new money equates to approximately $120K. (This simple example does not take into effect loan origination fees, expenses, bad debts, etc).

Now let's go back up to the original loan. Where does the $8K go that was the equity in the original loan? The bank carries the loan at $8K and the un-depreciated value of the collateral is carried as a liability at the same $8K. The excess value of capital over collateral goes into the economy and depending upon the velocity and multiplier effect at the time of the loan, may or may not be inflationary or deflationary to the ability to buy goods and services within the county. (this is another topic for later)

The Banksters rationale for the multiplier effect is that if money is going to sit, then banks need to optimize their returns by lending out more than they physically have. This is where the problem of fiat manipulation begins. Credit is created and the ratio of monetary value to real assets is out of balance, to the banksters favorite.


Why don't banks and the FED want you to invest in physical Gold?

If the seller of the car takes his $12K (assuming that he owned the car without a corresponding liability), and goes to his favorite coin dealer and buys $12K of gold. The multiplier effect and fractionalized banking ceases to exist at this first transaction. There is not $120K of additional money introduced into the banksters economic system, and therefore the banksters must earn their returns based upon their actual real rates of return of their real physical assets.

Therefore the Banksters hate the thought of physical gold and via the FED manipulate GOLD's price downwards at every opportunity to discourage investing in Gold and prevent the above from happening. There is no mystery here. It is straight accounting. The mystery occurs from a lack of information available to the Sheeple resulting from a lack of reliable information provided by the Fed.

If you choose to incur debt, then you are participating in bankster fraud and they will manipulate you out of a portion of your assets. On the other hand, if you choose to accumulate physical Gold, then you have an asset without a corresponding liability.

It's your choice.

Regards from Cornfield County,

BR549

http://www.infoplease.com/ce6/bus/A0825353.htmlI do not warrant that this info is completely accurate since I don't know enough about it; however. it may be useful to some newbies as a brief description of how we got into this mess.

http://www.prudentbear.com/boards/user/non-frames/message.asp?forumid=4&messageid=68123&threadid=68123
Meet the new boss'same as the old boss.

From the sounds of this,Koizumi stared into the abyss and has lost his nerve and appetite for sweeping reform.

Interesting times,where goeth the Japanese dilemma now?

http://www.usagold.com/goldenchalkboard/gc_stockbubble.htmlBriefing.com writes of current market action: "The selling pace has picked up once again with the Dow a full participant in this move.... [Cisco Systems CEO John Chambers] at a seminar in Tokyo last night...said that half of the Nasdaq 100 might not be around five years from now, though it was clear he was referring not just to failures, but to consolidation as well..."

Is a picture worth a thousand words in the anatomy of a bubble? (see URL above)

Here are some excerpts of haunting words from CoBra(too)'s post yesterday (9/4/01; 10:29:25MT - usagold.com msg#: 60772), Bill Bonner's interview with Kurt Richenbacher:

----"Every bubble is fully corrected. Every one. There have been no new eras. None."

"Each correction has taken prices ... back to the long term trend. There have been no exceptions. Ever."

"Each major bull market has been corrected by a major bear market of nearly equal duration. How could it be that, this time, an 18-year bull market will be set right by only 18 months of falling prices? How could it be that prices at the bottom of this short bear market cycle are still higher than at the top of previous bull markets? The idea contradicts both intuition and experience."

"This is the worst bubble in economic history...worse than '29...worse than Japan..."----

R.

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Currency%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_currency&s=AO5ZfjxYuVHJlYXN1Excerpt:

Washington, Sept. 5 (Bloomberg) -- The U.S. is committed to a strong dollar and doesn't plan to change its policy, although the Bush administration hasn't necessarily ruled out intervening in currency markets, Treasury Secretary Paul O'Neill said.----

Further on intervention, from the article:

----In July, President George W. Bush said the U.S. wouldn't "artificially" enter markets. "That's not the role, in my judgment, of the country. The market ought to do that, not the nation," he said.

Top White House economic adviser Lawrence Lindsey has also questioned the wisdom of intervening in currency markets, as the Clinton administration did in September 2000 and June 1998.

Pressed, O'Neill suggested their comments didn't mean the administration has ruled out buying or selling dollars to manipulate the currency's value.----

What must be recognized is that, under the IMF agreements for floating currencies, member nations are compelled to enter the currency markets as appropriate to counter "disorderly market conditions" or "erratic fluctuations" in exchange rates.

And what asset, primarily, can the U.S. call upon to buy back vast quantities of dollars as necessary? The very same Treasury gold that Nixon refused to deliver in 1971. The difference that can make this system workable today (whereas it wasn't back then) is the potential for the gold to be "put to work" at floating values. Technically speaking, any quantity is "enough" to get the job done -- assuming the price is high enough.

The only gold you can count on is the gold you own yourself. That is to say, the government will no sooner split up "its" gold among us, the citizens, than it will give away its buildings, bridges, and office equipment to us. Ain't gonna happen. We can only sit back and hope that these items in use by the government are used wisely rather than foolishly.

If you want to ensure that gold is used wisely, then take control of some of it for yourself. No one will do this for you.

R.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=24283I don't know if anyone has referenced this article on this site since it appeared on WorldNetDaily last week (8/30/01). In fact, the first reference in the mainstream news that I saw was last night on the 10 pm news. There was a short blurb about Colorado troops being airlifted to Saudia Arabia in order to defend both Kuwait and Saudia Arabia. The operation was dubbed Operation Desert ????

The implications of this report are staggering for all markets--especially gold and oil--but no one seems to care, at least not yet. I attribute this malaise to the hangover from the late August/Labor Day celebrations. One paragraph in particular from this report stands out: "Saddam counts on Israel being pinned down by the Hezbollah and, therefore, too busy to join the fray against Iraq. [Iraqi Vice President] Ramadan told his Syrian hosts that Iraq, if attacked by America, would not hesitate to launch missile strikes against Saudia Arabia, Kuwait and Israel. as well as U.S. military targets in the Middle East, Red Sea and Persian Gulf."

This massing of troops is occurring at the next turning point in the markets which encompasses Labor Day, the Jewish feast days of Rosh HaShanah and Yom Kippur, and the beginning of autumn. I don't see how a major conflict can be averted during this time. World stock markets are vulnerable to a crash, as Japan's Nikkei Dow has plunged to levels not seen since 1984 and the venerable (and so far resilient) Dow Jones Industrials just poked below 10,000 last week and again earlier today. The months of September and October have not been kind to equities in years past. By contrast, gold has tended to make sharp moves upwards during these months.

Add to the above the facts that Argentina has not solved and will not solve its $130 billion debt crisis and could default at any time. Furthermore, now that the ECB has yielded to pressure to lower interest rates by 0.25% last week, we now see cheaper money flooding the markets. It won't be long before gold makes its move.

In closing, I appeal to all lurkers and posters on this site who are clients of mine here at Centennial to take inventory of their gold holdings. If you have been waiting to begin your purchases or want to add to your holdings, now is the time to do so by calling me. While I don't have a crystal ball and cannot give exact dates when things will happen, I am of the opinion that rational human beings will come to the conclusion that the fuse on world events has been lit and that time is short. In this type of gold market, it is always better to be a few days/weeks/months too early rather than a day too late. When any one of the foregoing events alone or in combination occurs, gold could jump dramatically and never look back.

GC

CBII, yep Sir, liked the Hans Schicht approach. A bit emotional but nevertheless to the point. Have a look at Saville's article.

BR549 : Correct : Banks will never promote Gold. I should have been nuancating much more in the upside down stuff.
They don't have to promote anti-debt stuff. Such a promotion would obviously be a self-limiting movement.
But there is a big difference between using (treating) Gold as a confidence-anchor and masterminding a Gold-aversion or indifference at least !
And here the banks are playing a very dangerous game.
Up until now, there is not the slightiest sign of paper-currency-distrust, within the general public. And then follows the next question : who will have to distrust and panic about his paper-currency, first ? Dollar-holders or other ? That will be the moment where Gold and Confidence will be associated again.

For this reason, I don't want to exclude the possibility that the US could defend the dollar at its highest panic stage with the official buying of Gold instead of stealthly shifting the remaining gold for defense. Who knows...2 types of dollars : US and outside the US. Different defense strategies necessary.

Allow me to repeat that at very decisive moments, the extreme power of Gold, can be life-saving or completely destructive. Gold has an enormous psychological impact when it becomes a crisis-management-tool.

Putting Gold on a sideline and out of sight is a pre-meditated act ! The siruation must definitely be so dramatic that the "normalisation" of Gold is irreversable.
Gold wasn't allowed to follow and indicate the intrinsic value of the dollar ! Gold should have permanently, revealed the truth. Oil will do the job and is allowed to do it (from the european side), because of the windfall taxes and the coming strategy (oil for euros) to avoid economic collapse. This is the essence of TG's (and Co)geniality.

Look what happened the past 2 days : POO from 27$ >> 26$...dollar-strength against euro...and interest rates declines, indicating that currencies are supposed to be strong. But POG, knowing better, doesn't move proportionally. Thus no synchronisation (so far).
Evidence for $/� friction and less $/gold friction.msg 106FOA.

Have a look at Saville's charts of USTB30yrs and POG (neighbours GE). The Elliott Wave I/II/III/IV/V pattern up is highly probable. We are at 107 days from �-bang. And the behaviour of the big 4 $/euro/$/oil, within the next 100 days, is going to tell us (with evidence) if we are having it right more or less. I do see it the Kurt Richebacher way!
And you ?

Sir MarkeTalk(60850)I think I may have posted that one but the implications are worthy of serious consideration.

I note also Sir from a report early today that there is rumoured to be an impending attack being planned against Iran's nuclear capability capacity to "nip it in the bud" before a bigger problem is created. We noted that this happened against Iraq in the last couple of decades also.

http://www.investmentrarities.com/09-04-01.htmlFrom Mr Cooks latest Doom & Gloom, worth a read - Netking
-----------------------------------------------------------
". . . .Finally, we need to say something nice about silver.

Radio host, Jim Puplava recently asked silver expert, David Morgan the following question. "What about the short position?

David: That's a very good question and it comes up frequently. There is a very complete piece written recently by Ted Butler that I have linked from my site. He makes some very interesting points. The most important to me are, first, the overall short position is huge � still over one half billion ounces of silver. The second, and I think far more fascinating point, is that the commercials are holding the smallest short position, probably ever.

Jim: Explain for our listeners who are the commercials?

David: The commercials are generally known as the insiders. These are the folks that know the most about any given commodity market. These are mining companies dealers with inventory in storage, big players! They are not always correct, but they are right more often than not. So this implies that the people with the most knowledge are not willing to short the silver market aggressively. The shorts are being held by technical trading funds. These are usually firms that trade on computer generated signals. These funds have been getting whipsawed in the silver market and I am not sure if they are making much money at all. These people are short half a billion ounces, what happened if contract holders demand settlement in silver?

Well, the market WILL explode. We have already had an example of this. Let me digress for a minute back to the silver squeeze under the Hunt's. Some have the idea the Hunts were only playing the paper market. Although they did have huge contract positions, it was because they were taking physical silver off the exchange that the real problems began. Some of the silver longs, as their contracts approached maturity, were refusing to sell offsetting contracts. Instead, they were giving notice that they intended to take delivery of the metal. The growing practice of demanding delivery was what put real pressure on the shorts. Hunt and his partners took delivery at one time of 23 million ounces. Hunt had also taken delivery in 1974, but I forget the amount. During this period when one of the major shorts was getting into trouble, they devised a plan to sell 5000 to 10,000 contracts of silver �at the market� five minutes before the close. This did put pressure on the market for some time. This means, �Whatever the price is, I'm selling!� This is similar to what is currently happening in the gold market presently, with Goldman Sachs and others selling vast amounts of contracts. What is sad from my point of view is that since well over 90% of all the commodities only trade in paper, these financial powerhouses cannot get into trouble, unless the physical commodity is demanded to be delivered off the exchange."

Thanks for your clarification as to whom exactly is speaking on the recent trail. There have been ongoing references to this third person, even one that described him as being 'funny looking'. I would think one would only talk that way about oneself, no? Whatever! The message is what is most important, whichever one of these two friends are speaking.
Congrats on your recent clinks.

http://www.newsmax.com/showinsidecover.shtml?a=2001/9/5/95628Link provided herewith for recent reference to this - Netking.

Dear Sir, thank you for bringing this article to my attention. I am perforce on the telephone most of the day and I don't get to surf the web as I wish. This pending strike against Iran I would consider more dangerous in terms of the oil supply because Iran is a bigger player and has more resources than Iraq. All in all, just another "powder keg" which is waiting to explode. Perhaps as I write this the fuse to this powder keg has already been lit. Now if we could only figure out how long the fuse is.

http://www.nymex.comJust couldn't wait any longer, was afraid Sir Black Blade may have missed this. As if London couldn't create enough, now New York is able to create and trade more paper barrels of oil as they started "trading" (creating) Brent Crude today. Looks like OPEC is going to have more paper to fight, maybe they will trade back some of the paper gold.

Just so it doesn't get too boring threw in an old gold press release at the bottom -<=>-

*********************************************
Press Releases
Release Date: 09/05/01
Brent Crude Futures Set Record For First Day Volume


FOR IMMEDIATE RELEASE
Contact: Nachamah Jacobovits
(212) 299-2430
BRENT CRUDE FUTURES SET RECORD FOR FIRST DAY VOLUME

NEW YORK, NY, September 5, 2001 -- The New York Mercantile Exchange, Inc., announced that the Brent crude oil futures contract launched this morning traded an estimated 13,293 lots, more than double the previous Exchange record for trading in a new contract.

The previous record was 5,102 contracts, set by crude oil options on November 14, 1986.

Exchange President J. Robert Collins, Jr., said, "We are very pleased with the responsiveness by the energy industry and trading community to our efforts to design and expedite products that reflect evolving customer needs. In launching this contract, we had very positive feedback to the business advantages that the Exchange could offer this marketplace, and we are delighted to witness this tangible demonstration of support by market participants, which bodes well for the introduction of Brent options trading tomorrow, and the Brent/WTI spread options contract on Friday."

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

Press Releases
Release Date: 09/28/99
Gold Futures Sets Electronic Trading Volume Record


FOR IMMEDIATE RELEASE
Contact:
Nachamah Jacobovits (212) 299-2430
Maria Gonzalez (212) 299-2436

NEW YORK, N.Y., September 28, 1999 - Gold futures trading set a record during the September 27 session on the New York Mercantile Exchange ACCESS� electronic trading system when 6,785 contracts were traded, surpassing the previous record of 3,780 contracts traded on May 7, 1999.

Total futures trading for the COMEX Division also reached a record with 7,975 contracts traded last night, exceeding the previous record of 4,883 contracts traded on May 7, 1999.

Exchange President R. Patrick Thompson said, "This record demonstrates the expanded activity in the gold futures market, using the contract around the clock as a tool for global price discovery and risk management."

****************
Wondering if gold futures trading might set a new record any time soon?
That's all from Tannehill

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=24355Another one of interest on 'black gold' - Netking
------------------------------------------------------------
Snippit:
"Chinese researchers have discovered massive new gas and oil deposits in Tibet in southwestern China, the newspaper China Daily reported. The estimates, though tentative, will likely aid China's attempts to increase foreign interest and investment in its western regions, which in turn will strengthen Beijing's control across the country.

Researchers discovered the new oil and gas deposits in a 63-mile belt in Tibet's Qiantang basin. Government officials estimate the belt contains 4 billion to 5.4 billion tons of gas and oil. . . . "

http://www.321gold.com/charts/seasonal_gold.html Graphs show (regardless of outside influences) now is good time to buy PM's in terms of the seasonal dynamics.
Gold (per link above)
Silver: http://www.321gold.com/charts/seasonal_silver.html

@Belgian (msg#: 60851)�

I concur with his assumption that M3 is the true indicator of where this economy is headed. Because of the wild party of the 90's, we have expanded our "credit bubble" until the balloon is beyond being over inflated. During the dot.com idiocy of the last few years, the wise analysts kept telling us that anticipated future earnings were the key----not real earnings and you can not expect profits in Amazon.com type start-up's for many years. That did not necessarily mean that the stock's were overvalued, you just had to measure them differently than say old style old economy investors like Warren Buffet does.

Do I agree that the problem that what the U.S. has now is its gluttonous, debt ridden, live beyond our means American consumer. You betcha! I don't expect profits to pull the U.S. out of recession in the short term. There is no savings here, there is no tax incentive for capital gains investment, there is no reason that American Industry would invest in Capital Equipment, there is no manufacturing being created, there is nothing here now but a society that Consumes cheap imported goods via a strong dollar. We have outsourced our labor, our wages are being downsized and deflated via massive layoffs, and the banks are owning an amazing amount of real estate via foreclosures that they can't sell. The Fed is headed towards below 3% at either its next FOMC or the one after that, and rate reductions are not working.

Where I would respectfully disagree with a giant like Dr. Kurt is his belief that inflation is taking place. I think that there is a trend in the contraction of M3 over the past few weeks. This is a sign of deflation and not inflation. Is he the best there is right now? Maybe. Am I going to argue with him---no thanks I don't have the tools!

In reference to the Euro, it has declined from its coming out introduction date at .91US$ to .88 now. The Euro is fiat and the Europeans had better get their manipulation shoes on if they want to compete with the U$. We are still the best in the world at this.

I am not sure the dollar has an "intrinsic value" but I pretty much concur with your other ideas in ref to Gold.

I need additional time to reflect on the Elliot Wave theory and the strategy of a two tiered defense of the $ from outside and inside the US.

Great food for thought.

Regards,

BR549

http://www.forbes.com/2001/01/30/layoffs.html
The "Bone Pile" grows! More nonessential "Bones" cast aside like unwanted rubbish.

This new trading scheme has been in the works for some time. The question is whether these paper barrels with be used to manipulate the market. I somehow doubt it as OPEC has shown the resolve to manage the market with production quotas and a minimum of cheating. Therefore any drop in oil prices would likely be countered by OPEC. However, this new scheme to pluck the speculators (pidgeons) clean is somewhat amusing. Cheers!

- Black Blade

http://quote.yahoo.com/m2?u
Asian Markets are hit for losses again as the Nikkei and Hand Seng duke it out to see who can cross below the 10,000 level first. Meanwhile US Markets keep getting tagged for losses as well. The broad US market (S&P Index) has lost steadily for several months now. Looks like it will continue as there is no positive news to be found and with minor spikes as investors grasp at straws on statistically insignificant rises releases of NAPM data. Investor psychology is at best "amusing."

http://dailynews.yahoo.com/h/nm/20010905/bs/economy_layoffs_challenger_dc_1.html
Snippit:

``There is no evidence reported by any industry that anything that could be called a significant sustainable rebound is on the horizon for this year or even early next year,'' the report said. The high-tech industries of telecommunications, computers and electronics were hit hardest -- total layoff announcements in the three sectors rose 1,223 percent from one year prior.

U.S. firms have announced a total of 1,123,356 layoffs so far this year, only 165,736 fewer than the combined total for 1999 and 2000, Challenger said.

Challenger started its survey in 1993.


Black Blade: No surprise as this Recession will only get worse. There is no light at the end of the tunnel. Corporate earnings keep falling and analysts keep revising estimates (lowering the bar) so companies can meet or exceed some phoney level of expectation. One supposed cure to slow the gushing of red ink is to slash jobs.

There's more to Transylvania than Castle Dracula !

Some analysts take the view that low gold prices will
lead to lower worldwide production as smaller mines
become uneconomic, but this theory will surely be
tested as the massive proven reserves in the
Transylvanian region, which to my knowledge show the
lowest costs of production anywhere in the world, come
on line. These reserves may reshape the production cost
profile of the gold industry worldwide in the near
term, and facilitate further "production cost" driven
takeovers (Anglo/ Normandy for example). Rio Tinto, Normandy, Gabriel Resources are all there in a significant way .......
Does anyone have any views as to how these recent
developments in Romania will affect gold in terms of
supply and further consolidation within the industry ?
View Yesterday's Discussion.

Economist, Professor and Nobelprice-winner : *Stop the euro*

Amazing how man can be "USED" ! Used and de-integrated for other purposes than the truth. The euro coins and paper are being dispatched now. And still an anti-euro campaign must continue. Voila, I don't mind my neighbour being succesfull.
But the dollar can't stand his coming neighbour, even before he has moved in.

The language that M.F. has been using is not, academic reflexion on EMU (no objections), but inconsistant argumentations with destructive undertones. Too much work to elaborate here on the forum.

� and $ are in the arena and Gold will decide. And M.F. is one out of so many individuals that became influential, through artificial creation, and with the only purpose to be used and discarded at convenience. Sad, very sad. I wouldn't like to be lived like that. Would you ?

Anglogold and Normandy (Franco Nevada & ?) - Briefly : The forecasted strategic maneuvers from the ruler and Co-manager of Gold, are being materialized. Target = domination of more than 20% of the total available underground gold. From fragmentation to hyperconcentration. Goldcrisis is used as opportunity.

With the above 2 examples, I've learned, *again*, that nothing seems what it is, often...very often !

http://quote.yahoo.com/m2?u
The Nikkei and Hang Seng are in a virtual dead heat. Euro markets are all red. Looks like an "Interesting" day lies ahead.

http://biz.yahoo.com/rb/010906/business_financial_japan_moodys_dc.html
Snippit:

TOKYO (Reuters) - U.S. credit rating agency Moody's Investors Service said on Thursday it had put Japanese government bonds on review for possible downgrade, citing risks that a weak economy and deflation posed for the country's fiscal position. If Moody's follows through and lowers its Aa2 rating on yen-denominated domestic securities issued or guaranteed by the Japanese government, that would put the risk rating of Japanese bonds on par with Taiwan and Slovenia and a notch below Portugal.

Black Blade: Who didn't see this coming? World's second largest economy on par with Slovenia - Hmmm�

Report: Fed Ponders Buying Private Bonds
Last Updated: September 06, 2001 01:07 AM ET


WASHINGTON (Reuters) - The Federal Reserve could take the unprecedented step of buying corporate bonds within the next several years, because the U.S. Treasury bonds it now buys are becoming scarce, USA Today reported on Thursday, quoting senior government officials.

The newspaper, citing sources familiar with the proposal, said the U.S. central bank could seek legislation from Congress in two years and invest in the private bond market by 2005.

The Fed is considering such a move because as the federal government pays off the national debt with budget surpluses, the Treasury bonds issued to cover the debt are becoming increasingly scarce, the report said.

Current projections are that the $3.3 trillion debt will be virtually retired by 2010, according to the newspaper.

The purchase of private bonds by the Fed would be a significant move because it could open the door for other government agencies to invest their reserves in the private market, USA Today said.

The Social Security Administration, for example, which now holds only Treasury bonds, could invest its reserves in the private market to increase the rate of return and improve the retirement system's long-term solvency, the newspaper said.

"Whether it's the Fed or Social Security, one day there will be cash to be invested outside the government," said Gary Gensler, a former U.S. Treasury Department official who helped develop former President Bill Clinton's proposal to invest the Social Security surplus in the stock market. "It just happens that the Fed will be the first one there."

Fed Chairman Alan Greenspan ardently opposed Clinton's plan to invest some Social Security reserves in stocks, but Greenspan hinted in February that the central bank might have to consider buying private bonds as the national debt shrinks, the newspaper said.

Report: Fed Ponders Buying Private Bonds
Last Updated: September 06, 2001 01:07 AM ET


WASHINGTON (Reuters) - The Federal Reserve could take the unprecedented step of buying corporate bonds within the next several years, because the U.S. Treasury bonds it now buys are becoming scarce, USA Today reported on Thursday, quoting senior government officials.

The newspaper, citing sources familiar with the proposal, said the U.S. central bank could seek legislation from Congress in two years and invest in the private bond market by 2005.

The Fed is considering such a move because as the federal government pays off the national debt with budget surpluses, the Treasury bonds issued to cover the debt are becoming increasingly scarce, the report said.

Current projections are that the $3.3 trillion debt will be virtually retired by 2010, according to the newspaper.

The purchase of private bonds by the Fed would be a significant move because it could open the door for other government agencies to invest their reserves in the private market, USA Today said.

The Social Security Administration, for example, which now holds only Treasury bonds, could invest its reserves in the private market to increase the rate of return and improve the retirement system's long-term solvency, the newspaper said.

"Whether it's the Fed or Social Security, one day there will be cash to be invested outside the government," said Gary Gensler, a former U.S. Treasury Department official who helped develop former President Bill Clinton's proposal to invest the Social Security surplus in the stock market. "It just happens that the Fed will be the first one there."

Fed Chairman Alan Greenspan ardently opposed Clinton's plan to invest some Social Security reserves in stocks, but Greenspan hinted in February that the central bank might have to consider buying private bonds as the national debt shrinks, the newspaper said.

http://biz.yahoo.com/rf/010906/n06329136.htmlI provided commentary on this issue several months ago, and nearly two years before that touched on it with a more cursory overview of implications. For longtime, faithful readers of these pages it should come as no surprise that we see it now gaining broader treatment in the mainstream press -- the issue of private/commercial debt versus public/government debt acting as a foundational element of our banking (monetary) system.

Here are some key excerpts from this article (URL given above):
------
WASHINGTON, Sept 6 (Reuters) - The Federal Reserve could take the unprecedented step of buying corporate bonds within the next several years, because the U.S. Treasury bonds it now buys are becoming scarce, USA Today reported on Thursday, quoting senior government officials.
+
The newspaper, citing sources familiar with the proposal, said the U.S. central bank could seek legislation from Congress in two years and invest in the private bond market by 2005.
...
The purchase of private bonds by the Fed would be a significant move because it could open the door...
-------
The article also quotes former Treasury staffer Gary Gensler saying, "Whether it's the Fed or Social Security, one day there will be cash to be invested outside the government. It just happens that the Fed will be the first one there."

The up-side of this as the bottom line:
Governments SHOULD balance their budgets through taxation (and spending austerity) rather than through borrowing. When it comes to application of funds for true productivity, government "investment" of funds obtained on credit simply can't hold a candle to private/commercial practice. As such, it could be said that commercial debt is more "credible" than government debt (This "credibility" is not to be confused with actual risk of default, which is less for the sovereign that retains unlimited borrowing authority -- thus further undermining the potential "quality" of money when borrowed shamelessly by sovereigns (govt.s)).

At the end of the day, however, we must admit that the money supply can be increased through the natural banking process of deposits being lent/borrowed -- regardless of the public/private nature of the borrower. This expansion also occurs regardless of the specific nature of the monetary unit being used within the banking system. That is to say, the accounting of the banking system could be fundamentally based on metal, paper or digital units of ounces, dollars, or pesos, and yet the "artificial" expansion would occur nevertheless. (Case in point: it is this *apparent* expansion of gold supply through the commercially-dominated activity of the bullion banking system that has contributed to gold liquidity even at these current low prices -- prices which would otherwise be unsustainably low in a physical-based, non-banking market.)

Can you imagine the political gamesmanship involved as the Fed decides which corporations will and will not receive the coveted "nod of approval" for use in conducting monetary policy? The same "troubles" could be imagined for the new ECB pondering the "politically-correct" mix of sovereign debt among member nations to use in monetary policy operations.

Having covered this ground, it should therefore come as no surprise that the ECB will not lend directly to its member national governments through purchase of its members' sovereign debt; and the Maastricht Treaty calling for narrow latitude in participating governments running balanced budgets.

Can you imagine some rocket scientist somewhere coming up with an idea to simply eliminate the element of political favoritism in the conduct of monetary policy operations (with respect to liquidity) on BOTH sides of the Atlantic through the use of gold as THE primary reserve asset? (Marked to market values, of course, reflecting the market's sentiment on the rarity and savings-usage value of physical gold in tandem with the relative abundance of the currency denominating the price.)

Just "food for thought" to accompany your daily news!

Randy

Belgian (09/06/01; 01:59:30MT - usagold.com msg#: 60866)
Milton Friedman
Economist, Professor and Nobelprice-winner : *Stop the euro*

Friedman has wanted a world currency for a long time.
And he wants it to be the dollar.

http://cnnfn.cnn.com/2001/09/05/economy/job_cuts/
Snippit:

Announced cuts fall from July, but total for the year so far tops all of 2000. And with the August numbers, total job cuts announced this year climbed to 1.12 million, 83 percent higher than the total for all of last year, the Chicago-based firm said. "There is no evidence reported by any industry that anything that could be called a significant sustainable rebound is on the horizon for this year or even into early next year," the report said.

"Consumers are said to have more income (including the Bush tax cut), but are spending less," said John Challenger, chief executive of Challenger Gray & Christmas. "That may be the strongest indication that recovery from the current situation may be longer off than Wall Street analysts expect."

Black Blade: The "Bones" of discarded nonessential workers are piling up faster than can be counted. Consider that just as many don't qualify for benefits and therefore go uncounted and other laid off have not reentered the workforce. The ever growing "Bone Pile." So much for consumer spending to "save the economy."

http://quote.yahoo.com/m2?u
Market action in Europe is at best "Grim." Looks like an "Interesting" day for the US too.

Black Blade: agree the new contract activity is to fleece speculators.

Tannehill: The only problem with such new activity is that it doesn't really put any new oil in the pipe. Correct me if I'm wrong, but isn't the Oil industry Index called the "Goldman Sachs Index"? Does that name sound familiar?
Perhaps they tried applying this paper game to the gold industry after cutting their teeth on oil and making a virtual killing in paper profits by selling short. Remember $10 POO's just before it was discovered there wasn't really any oil backing the contracts? Prices then went to over $28/barrel. The events to follow were Southeast asian crisis and the dismantlement of the yen carry trade which was replaced by a gold carry trade...then the Washington agreement...

Interesting times no?

Hmmm...when the Fed buys USTB's it is controlling the money supply...or so I thought. Scarce Bonds? Aren't the Chinese and Japanese selling theirs? Perhaps they have converted them to Euro's already. Does this mean that the Fed is signalling that it will not buy back foreign debt from Euro-zzone bankers? Someone said the $Dollars will burn. I for one would be happy to see our foreign debt burn with them.

What does it mean when the Fed buys Corporate Bonds? It does not do diddly for money supply control. Are they actually trying to profit or is it a way for the govt to subsidize its "friend's business" when all else is going to hell in a hand basket. Certainly there wouldn't be any funny business going on as to who's bonds get bought or from whom the Corporate bonds get bought.

If I were a goldman Sachs or something and I was stuck with a bunch of corporate debt I couldn't pass do to looming "economy" issues, I would be happy to know that the Fed was in the market for this trash.

If I was a big business (too big to fail) I would also be happy to know that the govt was going to support the purchase of my bonds that give me operating capital when things get tough.

Iff this is the direction things are going then it is becoming obvious that something is rotten in Washington but not necessarily in Denmark.

Apologies to my Danish ancestors for that last remark.

Noble knights! Please excuse my rantings. I seem to be having a bout of cynicism of late.

http://futures.tradingcharts.com/chart/TR/MFalling Bond prices indicate plentiful supply. Looks like the Washington Agreement opened some eyes. Perhaps this was where the Asians parted with US obligations in part. My question is who was buying? Big pension and retirement funds leaving the stock bull? Or was it only the Fed trying to soak up liquidity?

The powers that be must be absolutely desperate!! With the April 5th 01 gap in the NASD looming right around 1700 they put out the rumor that MSFT is confirming this quarters guidance...market rallies. Subsequently MSFT denies they said that.

The market is down hard again off the open this morning and what happens??? another MSFT announcement. This time that the justice department won't seek the company's breakup. Stock rallies for 5 minutes and then is sold off hard again!!! Feels to me like the other shoe about to drop.

G$

the rumor used yesterday to turn the markets from hell was that Microsoft "affirmed its outlook", this morning on CNBC the CFO of MS reports that NO Such guidance was given .................. and nobody hardily gives a comment, they're all to scared of the "media mofia" who keeps them in line!

YOU ARE THE LAUGHING STOCK OF THE WORLD, WALL STREET!" Your tables are being over turned, you are on FIRE!

http://www.dailyreckoning.co/body_index.cfm - You got to love these guys, as they are calling it as they see it and keep their humor up.

Now it seems the SM's are in a real tanking mood. The $ reversed sharply and POG is apparently taking the hint, or
is it the excuse to rally a bit? Anyway, the 270 mark seems to become a newly established bottom - well, we'll take it step by step.
cb2

With the paper-hangers in retreat,we need a recognized "emoticon", similar to the :-) (smiley-face),
to denote serious gloating.

I saw an unusual sight today. I went to do some work for one of my customers which happened to be Edward Jones Investment Co. It is a tiny office with two people working there. Today, however; they had two extra people working in the waiting area each having a make shift desk and a phone calling up people and trying to get them to come in and set up a 401K or whatever else they can get them to invest in.

Looks like to me they are getting hungry!

http://afr.com/companies/2001/09/07/FFXQ3OWF9RC.htmlSnippit:
AngloGold does not expect a counter offer to its $3.2 billion scrip bid for Normandy Mining, claiming yesterday that its offer provides value for Normandy shareholders that other bidders would find hard to match.

The South African group's executive director, Mr Kelvin Williams, in Sydney yesterday to sell the offer, said AngloGold's proposal would add value for shareholders of both companies in a way that potential offers from other global gold companies could not.

"There are obviously others looking for value and doing their arithmetic but we wouldn't put it [a counter-bid] as highly likely," Mr Williams said . . . "

Henri, there's nothing wrong with cynicism. If done with a straight face, I consider it sophisticated humor.
RS, how about G+G for gloatin and grinnin?
If someone says Parity, do you think of the U.S. dollar and the Euro? Or do we think about the Hang Seng, the Nikkei and the Dow?
Ski, concerning those index puts, I'm gloatin and grinnin inspite of my cynicism! Now, when to bail out?
Rich

Buena Fe (msg#: 60880)�

Speaking of CNBC, did you catch the call in from the little old lady who said that she owned some stocks- Dell, Cisco, Ariba, Lucent and asked the "please someone buy these dogs my firm owns" analyst of the hour what she should do. She added that they were all "good stocks" but have lost a lot of value.

Ariba has declined from a high of above $173.00 to $1.90. I'm glad she doesn't own any "bad" stocks.

I would be willing to bet my stash that she doesn't own a single ounce of real wealth.

BR549

I believe that all of the telephone questions on CNBC are staged. Earlier today the phone lines were not working yet the "pundit" already had the question for the "guest". They probably have someone in the office do the "call-in" anyway. just another lie in the "house-of-cards" they are building.

They also had a "guest" tell eveyone where to "park your cash" earlier today. Only recommendation was a CD. right now the "opportunity cost" of holding gold, even for just speculative purposes, is almost nothing.

I like investments I can hold in my hand (gold) or walk on (real estate).

cwa

http://www.usagold.com/onlinestore/special.html

Why should YOU buy gold from Centennial?

Because no one else will do it for you.

1-800-869-5115

This morning the trade in overnight funds was in line with the FOMC target of 3.5 percent, so the Fed obviously had other factors in mind with its massive injection of $14.106 billion into the reserves of the nation's banking system today.

Of this amount, $851 million was permanently added through the outright purchase of Treasury securities by the Fed.

On a rolling "temporary" basis, $2 billion was added through 28-day repos, $6.75 billion was added with seven-day repos, and the whole lot was polished off with $4.505 billion added through overnight repurchase agreements.

R.

I also heard that Solomon Smith Barney has just laid off over 100 of its top Sr. Director level money managers. These guys are long in the tooth and high in the annual dollar. They handled some of the firms most complicated financial entities including "derivatives".

You think that maybe SSB has just issued themselves a poison pill.

Speculation on the reason(s)? To this poor mind that seems like a helluva lot of cash! I don't remember seeing a figure that high before. Have you?

http://www.house.gov/paul/tst/tst2001/tst090301.htmFrom the link above:

RON PAUL's
TEXAS STRAIGHT TALK
A Weekly Colum
Return to the
Texas Straight Talk directory
Project FREEDOM
Opening Page

September 3, 2001
------------------------------------------------

The Fed Cannot Create Prosperity


Last week Federal Reserve chairman Alan Greenspan discussed the state of the US economy during a conference held in Wyoming. He was quite candid in his admission that the economic outlook remains gloomy, especially given the sobering numbers recently released in the media. Economic growth, measured by GDP, has fallen to .2%, the lowest in 8 years- meaning the economy is nearly in a recession. The Dow and Nasdaq averages suffered losses throughout August. Consumer spending, supposedly the one bright spot in the outlook, is also wavering. American families undoubtedly know first-hand that the job market is very shaky, and it was only a matter of time until purchases of new houses, cars, and retail goods declined. A tumble in the real estate markets may be the last straw that sends the economy into a tailspin.

All of these economic problems have developed despite the massive interest rate- cutting measure taken by the Fed over the past two years. Chairman Greenspan has cut interest rates 7 times in 2001 alone, most recently in mid-August. However, the markets have not responded, and Wall Street continues to pressure the Fed to reduce rates even more. This trend developed steadily throughout the 1990's- each time the economy showed signs of a downturn, the Fed cut rates. Yet it is becoming apparent that this practice cannot work forever, and that every short-term fix simply puts off the inevitable painful correction that must follow.

The Japanese economy provides a vivid example of the futility of manipulating interest rates. Japan's central bank began cutting rates more than a decade ago, but the country remains mired in a stagnant economy. Ultimately, interest rates were cut to zero, where they have remained for several years. This rate-cutting has failed to stimulate the economy, however. The Nikkei stock market index remains at 1980s levels, while Japanese unemployment recently reached 5%, the highest rate in decades. The Japanese experience should tell us that prosperity cannot be created out of thin air by a central bank.

Still, while some in America have begun to challenge the wisdom of Alan Greenspan, few seem to question the concept of the Fed bank itself. In fact, the financial and political press never discuss the dangers of a fiat currency system managed by a centralized bank. Remember, every time the Fed cuts interest rates, it expands the amount of money in the economy. Economists have a simple word for this increase in the money supply: inflation. Inflation means your money has less buying power and your retirement savings are worth less. Yet we never hear the Fed criticized for its inflationary measures- on the contrary, Greenspan was widely praised throughout the 1990s as the all-knowing sage responsible for the good times.

The truth is that the good times may be coming to an end. The Fed, far from being our savior, is actually the cause of the current economic troubles. The Fed's easy credit policies flooded the economy with cheap money over the last decade, but the bills are coming due. With lots of artificial investment capital in the marketplace, businesses and individuals spent with less discipline and incurred more debt. The stock market became wildly overvalued, with many companies trading at outrageous prices. We should expect both personal and business bankruptcies to continue to climb as the bubble bursts.

In a truly free society, interest rates should be set by the market. The laws of supply and demand work better than any government bureaucrat in determining the correct cost of money, and without the political favoritism and secrecy that characterize central banks. Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution. The turbulent period we are entering may serve to remind Americans that the Fed cannot suspend the laws of economics. The key to lasting prosperity is a return to true private banking, where interest rates are set by the free market and dollars are backed by gold.


****************************************
And I thought we were in for a "soft landing", everyone got their golden parachutes strapped on?

http://biz.yahoo.com/rb/010906/business_economy_dc_2.htmlStage 1: The tide is in, the water is PERRRFECT - we frolic and play to our heart's content.

Stage 2: Suddenly, we notice the water rapidly becoming much shallower --- "hey, this isn't the time for low tide...."

Stage 3: We turn around and look out -- FEAR overwhelms us as we see the wall of water bearing down at breakneck speed --

Tsunami!!!

Here it comes, folks...hope you've all made it to higher ground.

http://biz.yahoo.com/rf/010906/t131483_2.htmlWhat, me speculate? (apologies to Alfred E. Neuman)

$14 billion is indeed a large, rare add. In the past three years I can recall maybe only two others of similar size.

Just like the Bank of Japan, the Fed surely recognizes that it is powerless to directly stimulate meaningful economic growth. It surely does not WANT inflation, but is willing to pay that ultimate price in order to avoid the alterntive -- monetary deflation (which it will attempt to keep at bay with every gadget in its limited toolchest as necessary.)

You may gain some insight from this article which I dredged up for you. (Before you rush to thank me, please know that the effort was small. This sorta thing appears almost daily; I practically grabbed this one at random.)

Excerpt from the article:

[The Bank of Japan said it would] "expand its monthly purchases of long-term Japanese government bonds to 600 billion yen from 400 billion yen to boost liquidity in the credit market."
+
"The BOJ adopted its current policy framework of quantitative easing in March by flooding the banking system with funds through its money market operations."

Though I won't speculate on the circumstances of today's large addition to banking reserves, I will take this opportunity to suggest that, in comparing our current situation with Japan's past experiences, we may be seeing "similar shoes" fitting onto different feet -- ours.

With these various Fed actions, unless you are working the Desk, it is nearly impossible to tell what to read into any given operation. You just don't know when any given open market operation might be the necessary sterilization of off-market transactions initiated by the Treasury or for international accounts.

Despite our relative ignorance, the significance remains, however. The net effect of these adds is inflationary as compared with a condition absent these adds.

Randy

-Used to be the old adage of interest rate cuts. So what do
7 steps in a row mean ... a Crumble, or is it Tumble?
The equity markets certainly seem to crumble, getting ready for the big tumble?
The news from the economic front ...
- and I don't mean the pseudo, nor psychedelic news spewed by NCBC,or its european counterpart NTV, where even the most horrific eco stats or earnings warnings are dissected and turned over so often to soften the impact and keep the 'buy the dips' intact -
... should by now be clear to even the most hardline bulls, that we've entered a global recession and any more touting of goldilocks may lead us right into an unprecedented global depression.
Unfortunately, the precedences may be, we who have set out to concquer the world may not be stopped by such mundane considerations of what the consequences may ultimately be. Heard that before? Encore!

As it becomes clear, the vicious cycle is in full swing and as the debt trap coils its spring, evermore to the core of the economy.

No debt, though real money - as this site has helped me immensely not to waver from the chosen path - has earned me today a red rose from my spouse after 32 years as of today!
Thanks to all of you - cb2

Best wishes on your anniversary, now and evermore!

Randy

Cutting Int Rates will do nothing except reduce the cost of going into debt.It doesent change the fact your still going deeper into debt ,but at a slower pace.Big Deal.How gracious of the Bankers.Whats needed is Investment Tax credit for business,a direct reduction in tax if you make a investment in new plant and equipment.Next is needed depreciation schedules that reflect the true cost of replacement of everything.Expenceing everything with a life of 5 years or less.This will reduce taxes and improve cash flow for business.It will allow a big increase in spending for Corporations and job creation.Its the reverse of what we have now,The depreciation schedules falsely and deceptively increase tax revenue by falsely making it look like earnings are good'simply by not allowing companies to deduct expenses.The government is competeing with business for money and they have stacked the deck to give politicians "surpluses"that they can spend to get elected.The politicians will let business go broke before they will cut taxes for them. We need to change the way we elect politicians to correct this problem.Spending limits must be imposed,campaign time must be limited to 3 months and free air time to qualifing candidates would help.

http://www.thebulliondesk.com/reports/prospector.htmMr Leonard Kaplan makes comment on the Ag market as follows:
------------------------------------------------------------
". . . Something is definitely happening in the silver market but I am not quite sure what. But, it would appear that higher prices seem to be imminent as (1) London is now trading at a large premium to the New York spot price, perhaps as much as 3 to 4 cents at present, and (2) the technical charts are looking better to me than they have in a long time. It may be the right time for a real sharp, very short lived short covering rally. Lets hope so, as traders who follow our recommendations are long. . .

. . . sometimes traders trade their systems, sometimes traders trade the charts, and sometimes traders trade their guts. I just gotta feeling we are going higher. The best season for demand is soon upon us and the technical formation on the charts is improving. Option premiums are still quite high.
------------------------------------------------------------
Worth being aware of that the last high profile investor(WB) who made a stand in the Ag market did so in London. Maybe there's less chance in London of legal interference in the upcoming squeeze? - Netking

You said, "would you?"
She said "I do!"
Something old, something new
Something borrowed
Something blue
Now it's been 32
Congratulations, Cobra(too)

And thanks for all your thoughts posted here!
Rich

Snippet:
This trip to Washington was emotionally much different. This time, I felt like a scout on a reconnaissance mission into enemy territory. "Enemy" in the sense that it has become clear over the past 3 years that GATA is taking on "The Establishment" - they being Democrats, Republicans, the mainstream press, the big money power brokers, Wall Street, the bullion banks, etc. - who can be further described as the U.S. power structure elite.

Washington IS establishment - defined as such in that Washington is all about politics and it is the ensconced incumbents that rule the day - which is what the U.S. campaign finance reform flap has been all about. They don't become ex-incumbents very easily. The first rule of the establishment to stay in power in Washington is to protect the status quo and for most of the politicians that means protecting their fund raisers. Exposing the gold scandal will affect big money interests all over the U.S. These interests would rather not know about the gold fraud or even acknowledge hearing about it.

All of us in the Caf� are aware of the serious financial implications which will result once the GATA camp revelations are understood by the mainstream. There are even some in our camp that say that GATA's revelations should not be revealed for those very reasons. I say just the opposite.

On May 10, 2000 when the above mentioned GATA delegation met with the Speaker, we told him that we had found a malignant cancer that was spreading. It would be curable by chemotherapy type of treatments which would be very painful and that the side effects would be most unpleasant, but the patient would live. We explained to Speaker Hastert that to do nothing and go into denial could be fatal. We also offered that if the Republicans won the White House and they did nothing, that it would most likely blow up on their watch and they would be blamed.

They had their chance and it now appears the Republicans have blown the opportunity to rectify the inappropriate gold scheme upon taking over the Administration and placing the blame where it should most go - to the Clinton Administration for ramping up the gold manipulation, as if they were on gold-capping steroids.

Almost a year and one half later since GATA's visit to the Capital Building, the problem is that much worse as the U.S. stock market bubble has broken and our equity markets face devastation. Worse, it has taken an additional 1800 to 2400 tonnes of central bank gold to be supplied to the physical market to keep the gold price from rising. That gold is gone, which means the gold problem has worsened to the amount of that expended tonnage and it continues to worsen daily. That is part of the reason why 40 to 60 tonnes of "earmarked" gold has left the N.Y. Fed every month this year. END

auspec comment: Know thine enemy well.

Happy Anniversary.
32 Golden Years .9999 Fine.
Slingshot

http://www.washingtonpost.com/wp-srv/aponline/20010906/aponline153047_000.htmBy David McHughAssociated Press WriterThursday, Sept. 6, 2001; 3:30 p.m. EDT FRANKFURT, Germany ��
Brand new euro bills were stolen Thursday from a German cash-transport truck, police said, exposing the limits of security aimed at preventing counterfeiters from getting hold of the currency ahead of its launch in January.
�.

I only view Kaplan's opinions on occasion. Does he often make statements like "I just gotta feeling we are going higher."?
I'm wondering how unusual this statement is for this analyst? For a forum silverbug to say something to this effect is normal but for an analyst who makes his living selling advice, this is not usual, no? Without being right, one's credibility as an advisor suffers with such statements, much like the boy who cried wolf too many times.
Of course if he's right, he looks like a genius.
I certainly hope he's a very clarvoyant fellow?
How often does he publish gut feelings?

Many analysts and traders warn about shorting a quiet (silver) market. I've never heard warnings about being long in a quiet market so the fundamentals, technicals and an old trading adage are all in our favor.
The stock markets look like they are on the edge. I've had the same feelings about them going down that Kaplan has about silver going up. Perhaps they will connect with the equities' down forcing the precious' up and up with a vengeance. Hope so.
Rich

http://asia.dailynews.yahoo.com/headlines/business/afp/article.html?s=asia/headlines/010907/business/afp/Japan_s_GDP_falls_0.8_percent_in_the_three_months_to_June.htmlAs expected the official figures have come out close to 1%. It will take a miracle of "parting the red sea" proportions to avoid a similar+ result for the next result yes - Netking
------------------------------------------------------------
Snippet:
Japan's gross domestic product (GDP) fell 0.8 percent in the three months to June from the previous quarter, the Cabinet Office said Friday.On an annualised basis, the world's second-biggest economy contracted 3.2 percent during the quarter . . . "
------------------------------------------------------------
Rich. - I don't believe Len's observation over London V's New York Ag is of a "normal" situation, if there is one in this market. There is a disparity there for sure, I guess "why" is the $64 Million question. I think the commentator is usually a market technician, he has been around a while & proven to be a reasonable judge on the market. - Netking

There are bank robberies and counterfeiting of dollars here and abroad on a regular basis.

Up scope!
Target bearing 115' Merchantmen, Stockmarket Class.
Load all tubes. Wide dispersal pattern.Bring us to Firing depth.
Down Scope.
Aye! Aye! Captain.

Tubes loaded , Firing Depth Sir.
Very Well, Chief.

Fire 1 Unemployment WHOOOSH
Fire 2 Consumer Confidence WHOOOSH
Fire 3 Consumer Debt WHOOOSH
Fire 4 Bankruptcys WHOOOSH
Fire 5 Trade Deficit WHOOOSH
Fire 6 US DOLLAR WHOOOSH

All FISH AWAY AND RUNNING TRUE SIR!

Very Well Sonar. ATTACK SUB GOLDBUG

We await impact.
Slingshot

Whoops!! An anti-submarine destroyer, the U.S.S. Cabal, has been sighted in the vicinity. Torpedoes are loaded.

cwa (09/06/01; 13:34:55MT - usagold.com msg#: 60887) - You wrote: I believe that all of the telephone questions on CNBC are staged. Earlier today the phone lines were not working yet the pundit" already had the question for the "guest". They probably have someone in the office do the "call-in" anyway. just another lie in the "house-of-cards" they are building.

Black Blade: Either that or over half of them are calling from India. Notice that about half the time they have an Indian accent? Hmmm�

Up proctoscope!

Met newpaperguytypes in DC. They had sore hands from note taking. There is no stopping the gold manipulation story now. The gold shorts might have two weeks maybe even three.

This is a paradigm shift . Chet Rayhmo, the "R" in TRW once said:

"Of the ten largest vacuum tube manufacturers, none participated in the transistor revolution".

The same thing that keeps investors away from gold is what kept the tube makers away from transistors.

In a paradigm domain there are two and only two kinds of people. Those who have the new truth and those who cling to the old dogma. Thomas Kuhn writes eloquently and voluminously on what happens in a scientific paradigm shift.

There are differences, of course, because of the interventional nature of the gold market. But the similarities outweigh them. There is a rapid shift. The speculative attack will be triggered by an imbalance in information flow.

Information that is secured by the attackers and not by the defenders. At this stage the defenders of the weak dollar policy...the "Smash the South Africans" strong dollar policy...are about a month behind the data flow. This underestimation will turn into an undertow as the truth continues to validate their fraud and etch away at the integrity of Federal Reserve and United States Treasury.

There are now much more than a handful of crack reporters on both sides of the Atlantic who smell blood in the water.

http://www.forbes.com/2001/01/30/layoffs.html
Once wasn't enough for Motorola, so here's another 2000 nonessential "Bags of Bones" for the "Bone Pile." Going to get much worse. This Recession is only getting under way.

Load Anti-Ship Missile, "GOLD DUST"

Secret Weapon from the GATA WORKS.
Fire when ready!
Slingshot

http://quote.yahoo.com/m2?u
Asia is in the Red once again. The persistent questions about bad bank loans, potential fraud at Japanese banks, insolvent retirement funds, etc. just won't go away.

http://biz.yahoo.com/rb/010906/business_tech_motorola_outlook_dc_5.html
Snippit:

CHICAGO (Reuters) - Motorola Inc. (NYSE:MOT) on Thursday warned of yet another sales shortfall and will slash 2,000 more jobs, as the gloomy global telecommunications sector refuses to brighten. The latest in a string of warnings from the world's No. 2 mobile phone maker comes just over a month after Chairman and Chief Executive Christopher Galvin apologized to shareholders for its consistently poor performance and pledged improvement. Earlier this summer, Galvin said he thought that the downtrodden sector was nearing bottom.

Black Blade: "Bone Pile" keeps on growing. This is a sign of a horrible economy. Gold insurance is still cheap and equities are still expensive even at these crashing prices. All that wealth gone - "to Money Heaven."

Thats really going after their "Six O'Clock".
Slingshot

http://biz.yahoo.com/rf/010905/n05319779.html
Snippit:

SAN FRANCISCO, Sept 5 (Reuters) - Winter is the next big hurdle facing California as it struggles to fortify its shaky electric power system and avoid another energy crisis, industry analysts warn. Despite dire forecasts of blackouts this summer because of a chronic supply shortage, the nation's most populous state scraped through without outages due to a big conservation push, mild temperatures and more megawatts coming on the grid.

``By no means is California out of the woods yet,'' Peter Moritzburke, a research director with Cambridge Energy Research Associates in Oakland told Reuters. Winter brings increased demand for power for heating homes and businesses. San Francisco, in the north, uses more power in winter than in summer.

Black Blade: The Pacific Northwest usually looks to Kalifornia for excess power during Winter - not this year and when they need it most during a drought year when hydropower is in short supply. Question is do the Grasshoppers prepare while they have a reprieve or do they squander another opportunity? I bet they squander it.

I've been reading his column for a year or so now. Free at first but he now charges ($50/yr) over at Grant's Investor. Having made this plug I feel better about repeating his comments tonight on the euro the dollar and gold.

"In today's New York Times, there is an interesting story by Edmund Andrews called "Euro's Entry Is Forcing Europe's Hidden Hoards to Surface." (Registration required.) I think this is a behind-the-scenes story for one of the reasons why the dollar has been so strong: Europeans have been buying dollars because the advent of the actual euro this January will render their currencies nonexistent. The point is, sometime in the not-too-distant future, the euro will be a currency and that bid under the dollar may evaporate. Of course, when discussing the euro or the dollar, you're essentially talking about a battle amongst unarmed opponents, both of which amount to confetti that can be printed at the drop of a hat. Ultimately, people are going to seek out a currency that offers a real store of value, and it ought to be the gold market. Gold has been resting for a while now, but it's hard to see how one of these days, it will not have its day."

Max: Bill Fleckenstein is on the board of PAAS, a silver mine, but his comments have been pro-gold the last month or so. Many posters know him. I give him great credit for keeping me out of the stock markets this last year. The hype and fraud are staggering. He shies from conspiracy theories or government manipulation themes but knows something strange is happening. I hope he's bought his physical.

It seems that pre-1933 gold coins are getting harder to find. I think they will be the first to disappear from the market. I'm hoping those Dutch Guilders are still around for my next payday. I'm lacking the Queens. I remember some young Dutch queens offered earlier. I missed out. Funny how I remember these things. The last time I collected stuff was baseball cards a long time ago.... I'll hide these better.

http://dailynews.yahoo.com/h/ap/20010906/bs/natural_gas_prices_1.html
Snippit:

NEW YORK (AP) - Last year, the natural gas industry experienced its own version of ``The Perfect Storm'': low supplies and high demand collided unexpectedly, wreaking havoc as prices soared. Now the conditions have been reversed and the drama lies in watching prices plummet.

Black Blade: I will try to get to some "interesting" information on this and more on energy - perhaps this weekend. Several major NG projects have scaled back exploration and production, been put on hold, or lack the necessary government permits and can't go forward. The result is that NG prices have likely bottomed and could very easily rise from here. That could keep energy prices high or even much higher putting more pressure on an already stressed economy in Recession. Hard assets like Gold and Silver are cheap and necessary as portfolio insurance.

The truth about the Federal Reserve and the U.S. Treasury with not be forth coming from the News Media of the USA. It will have to come from another country. Then when they finally expose the truth nothing will happen. The blame game will be just like all the other news breaks and the USA public will be lulled into another vegetative state.
Unless the story has Blood and Guts in it.
Slingshot

Thank you for all that information on energy. I've followed the energy field almost as much as gold this last year....as much as time allows. They are related. Since I can't hoard energy I accumulate gold.

There is something funny going on with the natural gas storage numbers. Something called a balancing number to make up the difference between what is produced and stored. This number has been at record highs this year, indicating the gas counted as entering storage is much greater than that reported produced. I suspect that they (AGA) are just using estimates from past years to fill in what they don't know or not everyone is reporting. But the discrepancy is about double previous records.

Even with the recent collapse in natural gas prices there is a big premium being paid for each buyout of small E&P's. The people doing the drilling seem to value it more than the market. I've heard that with NG prices under $2.50 MMCF on land and $3.00 MMCF in the Gulf drilling is not economic. With prices now under this level the question is whether companies think the price will bounce right back up and just keep drilling till their last dollar. Those inscrutable oil&gas men. You know these people. What do you think? Buy gold?

http://groups.yahoo.com/group/gata/message/881GATA Chairman Bill Murphy reports on his trip
to Washington and says the gold story is
going to break.

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

gata-subscribe@yahoogroups.com

CoBra(too) (msg#: 60895)�

Terrific! How fortunate for the few of us are that were lucky (blessed enough) to have found a lifelong match. There are ideas in which I can provide the first few words and she knows how to complete the thought, and vice versa. Happy Anniversary and our best wishes for many more to come. Time is the ultimate confirmation of a decision well made.

Chris Powell (msg#: 60921)�

Go Midas Go! Let's protect his back and hope there is someone in DC who he visited that has not already sold out. He has friends here but the enemy is well financed and extremely dangerous. GATA is taking on all of the corrupt and moving into new territory blanketed by land mines.

U$ Goldbugs need to provide any assistance that we can at this critical period.

How can we help GATA Chairman Bill Murphy?

Actually many onshore NG projects are profitable at under $2.00/Mbtu, even in the current economic climate. However, many companies are cutting back E&P due to the relatively low prices. One must remember that in recent years much of the new NG production is from "nonconventional" sources. That is previously uneconomic natural gas in small traps in "tight" formations, and Coal Bed Methane for example, have come into play as the more traditional offshore and large onshore oil field sources have seriously declined. As prices fall, many larger players such as Anadarko, Huber, Texaco, Shell, Yates, Pennaco, etc. have pulled in their horns so to speak and many projects have slowed down or have been shutdown. This means that current and short-term demand will draw down available storage, especially if forecasts are correct and it turns out that this winter is colder than normal.

The AGA has really dropped the ball, as they don't really have a lot of detailed data to work with. They rely on companies in the industry to be open and provide storage data, and most won't freely give out proprietary information, so in effect they "guess." This has come back to haunt them as they released a report a couple of weeks ago that storage injection numbers were down to 3 billion Mfc/week. They later revised that number to 50 billion/Mfc. That is a huge difference. Obviously this calls into question the reliability of their data and it is quite possible that their data is suspect.

The NG storage is "assumed" to be anywhere from 14% to 18% greater than last year. The lower prices are based on assumptions that temperatures this winter will be moderate, however, a normal to cold winter could draw heavily on NG storage as most homes in the US are heated with NG and not heating oil or electricity. There is no option to switch between fuels. All new power generation is and will be NG-fired only. Without increasing the construction of dual-fuel facilities or promoting an increased reliance on other sources such as nuclear or coal power generation, natural gas prices are destined to rise as more natural gas is used to generate electricity.

Natural gas is the real sleeper to the energy crisis. The economy depends on "Cheap Energy." There is absolutely no option whatsoever! If energy is costly we have a recession. If energy is cheap we have a robust economy. It is a fact of life. Robust Bull Market economies run wild on "Cheap Energy." Therefore we have a vicious cycle. Develop a lot of cheap energy real fast, bring power costs down and at the same time increase supply while depressing the price resulting in less E&P and have a booming economy. Then with less E&P, oil and NG supplies dwindle as current supply is depleted which results in higher energy prices resulting in economic Recession.

This time around it was the "New Economy" that sucked up a lot of excess "Cheap Energy." As the energy supply dwindled, energy costs increased and the "New Economy" crashed and $Trillions vanished with it - gone to "Money Heaven." The crash is far from over because even though energy costs have come down, the energy costs are still much higher than the average cost over the last few years, as much as two to three times higher. These costs have hit corporate earnings hard. The costs of raw materials are much higher and the energy costs of manufacturers have also increased. In short the current Recession is a direct result of the energy crisis in spite of the claims of pundits who claim that energy isn't important anymore. In other words - "Checkmate" - Recession!

You are right! You can't easily store hydrocarbons as a hedge or for insurance. Yet with the current low prices for precious metals we have a real option for storing wealth conveniently. Notice that during the market crash PM stock and fund investments have done well. The physical metal (the ultimate insurance) tends to follow the mining stocks. However, I accumulate physical PMs as portfolio insurance and stocks as speculation for profit. Cheers!

- Black Blade

In the words of Winston Churchill:
"Never has so much been owed by so many to so few".
Keep fighting the good fight guys, the greater the trial the sweeter the victory! - Netking

http://biz.yahoo.com/rb/010907/business_economy_japan_gdp_dc_1.html
Snippit:

TOKYO (Reuters) - The Japanese economy shrank in the second quarter of 2001, official figures confirmed on Friday, underscoring the tough task ahead for Prime Minister Junichiro Koizumi as he embarks on an ambitious program of reforms. Within an hour of the release of the dismal data Koizumi, as expected, gave cabinet the go-ahead to prepare an extra budget to try to boost the economy and deal with rising unemployment. Earlier, the government said gross domestic product (GDP) contracted 0.8 percent in April-June from the previous quarter, in real terms -- an annualized decline of 3.2 percent.

With Japan's unemployment rate at a record 5.0 percent and set to rise, Finance Minister Masajuro Shiokawa said the extra budget would focus on jobs, not public works as in the past. Over-spending on public works is one reason Japan has the highest level of public debt among big industrial nations -- 666 trillion yen ($5.5 trillion), approaching 130 percent of Gdp.

Credit ratings agency Moody's Investors Service added to Japan's pain on Thursday, announcing it had put Japan's credit rating on review for possible downgrade.



Black Blade: Japan is in Recession - surprise, surprise. Now a report out says that 14 Japanese banks could be in very serious trouble (insolvent?). They are also likely to forego their dividends. This is unheard of. This only confirms what we knew - Japan is in the 4th recession in the last 10 years. Going Global? The US is in Recession and many emerging markets are as well.

The Japanese government now is talking "New Deal." A jobs program ala the Depression era programs in the US where meaningless jobs were created to provide work for the masses. Is this fear or what?

The outlook is "GRIM."

http://biz.yahoo.com/rf/010906/t132270_1.html
Snippit:

TOKYO, Sept 7 (Reuters) - Shares in Asahi Bank Ltd plunged more than 25 percent in morning trading on Friday due to growing expectation that it and other major Japanese banks would have to skip interim dividend payouts. The Tokyo-based commercial bank said it had not yet decided to skip the interim dividend payment, slamming recent media reports that doing so alone would directly lead to a management crisis and the bank's nationalisation.


Black Blade: "And another one bites the dust." The Japanese economy is in a world of hurt as it is official - Recession. The banks are taking it on the chin for good reason. There are gargantuan nonperforming loans still on the books. Now the IMF is about to look under the slime and may discover how many Japanese banks "cooked the books." This will not be pretty.

Next - US Investment Banks?

Thank you so much for helping me with my questions. I just returned home about an hour ago and have not been able to reply to your reply. I will do so tomorrow.
Black Blade - Do you still want the info on Germ Facility in Nevada?

Back to you both tomorrow. Goodnight.
Sj

http://biz.yahoo.com/smart/010905/200109051stocwatc.html
Snippit:

BANKING STOCKS HAVE fallen almost in lockstep with the economy this year. But that situation could - we repeat, could - be changing. For more than a year, financial institutions like Citigroup (NYSE:C), Bank of America (NYSE:BAC), J.P. Morgan Chase (NYSE:JPM) and Bank of New York (NYSE:BK) have been grappling with a rising number of bad loans made to big businesses in the late 1990s - especially to now-struggling telecommunications companies. They've been forced either to eat some of those loans or to sell them at a deep discount in the so-called secondary-loan market. The result? A serious drag on profits and stock prices, despite the Federal Reserve's aggressive rate cutting this year.

But that rosy scenario doesn't account for a major potential trouble spot on the balance sheets of banks big and small: consumer and small-business defaults. Up until now, the damage to bank balance sheets has been mostly limited to major commercial loans. But if smaller businesses and consumers, feeling the pinch of rising job losses and dampening consumer sentiment, begin to default on their credit cards and credit lines, it could be a sign that the economy is falling headfirst into recession. If bank officials say they expect the number of bad loans to increase during the third-quarter earnings season, that could spell trouble not only for bank stocks but for the overall stock market as well.

And right now, there are some signs of weakness among consumers, who up until this point have been propping up the nation's ailing economy. Moody's Investors Services reports that the percentage of Americans either falling behind or defaulting on their credit bills has risen steadily this year. In June, the percentage of consumer credit delinquencies hit 4.98%. That's up 16% from the same time a year ago. Meanwhile, the pace at which banks and credit-card companies are being forced to write off credit debts as uncollectable is up about 20% year-over-year. Consumer debt now stands at a record $7.4 trillion. And just this week, the Mortgage Bankers Association of America reported that 4.63% of the nation's homeowners had fallen behind on their mortgage payments in the second quarter, an increase from 4.37% in the first quarter.

Black Blade: BINGO!

Just curious as to what Germ Lab is in Nevada. Is it a government or private facility and what kind of "Germs" are involved? I know of the Dugway Proving Grounds facility in western Utah, but I am not aware of a Nevada facility unless it might be associated with Nellis AFB and the Nevada test facility. Cheers!

- Black Blade

http://biz.yahoo.com/rf/010907/tav024309_1.html
TOKYO, Sept 7 (Reuters) - Two Japanese banks, Asahi Bank and Daiwa Bank , are likely to soon begin formal negotiations on merging their operations, the daily Nihon Keizai Shimbun reported on Friday, without quoting sources.

Black Blade: Here we go again - I got a crappy company, you got a crappy company, so let's merge and make one really huge crappy company. What is this? Bigger is better even if both institutions are in deep trouble? There is a history of troubled (insolvent?) Japanese Bank mergers - sometimes at the direction of the government. Does this really fool anyone? Japan's economy is on the verge of total collapse. Hmmm�
View Yesterday's Discussion.

http://www.bullatomsci.org/issues/1994/jf94/jf94Armenia.html"Armenia has been an independent state for more than two years now. But people here joke that the country is not only independent of Russia, it's also independent of gas, light, warm water, and heat..." [from a 1994 story]

"A new type of mafia has sprung up in the capital city of Yerevan. People who have connections with employees of the city's energy system act as brokers between inhabitants of certain blocks or buildings and the energy officials. Because electricity is rationed, there is competition between blocks. The length of time that a block receives electricity depends on the amount of money residents can scrape together..."

http://www.tacisinfo.ru/brochure/reside_e/curr.htmThe current energy situation in Armenia...

"Shortages in food, raw materials and energy supplies have caused severe hardship for much of the population, heat and electricity have been rationed to a few hours a day, economic activity has been heavily constrained and many industrial enterprises have been forced to shut down..."

"Some villages are now required to pay for their electricity in advance, in others payment of 50% of bills results in an extra hour of electricity. This incentive has not been very effective as individuals fail to appreciate the link between their actions and the service provided..."

http://www.reliefweb.int/w/rwb.nsf/6686f45896f15dbc852567ae00530132/aa328b0553cf087c852569a50053d494?OpenDocumentTajikistan (Nov 2000)

"the electricity grid had been neglected for the last 10 years"

"many districts would be without gas or electricity for much of the winter"

http://www.whps.act.edu.au/mission1/interviews.htmCanberra during the Second World War

"In your home at night there was no electricity"

This following is sourced from silver-investor.com & shows further pressure being put upon the supply side of the silver situation, and this after recent projections suggested that this years silver deficit could be 20% bigger than projected. - Netking
------------------------------------------------------------
Breaking News

MELBOURNE - Pasminco shares fell for a sixth day after the Australian Financial Review said the top zinc miner and refiner may have to close or sell its three Australian smelters as it tries to repay $US1.5 billion of debt. The Hobart, Cockle Creek and Port Pirie plants were unlikely to find buyers and would probably need to be closed, the newspaper said, citing unnamed analysts. Pasminco spokesman Peter Griffin denied the report. The stock closed down 1.8c, or 22.5 per cent, at 6.1Ac, valuing Pasminco at
$A78 million, compared with $A1.9 billion on December 31, 1999.

Pasminco is aiming to sell its biggest mine, Century, by the end of this year. Canada's Noranda Inc and Teck Corp, and closely held Glencore International AG, are considering bids for Queensland's Century, valued by analysts at about $A1 billion.

Century, the world's second-biggest zinc mine after Teck's Red Dog operation in Alaska, is expected to reach full capacity in December.

NOTE: If the mines close about 14 million ounces/yr of Ag will go out of production. Also, Pasminco was heavily SHORT silver last year, perhaps they have covered, their annual report is due out soon.

http://meforum.org.cnchost.com/meq/sept99/collapsing.htmThe Collapsing Syrian Economy

"Electricity supply is faulty, with long blackouts continuing for hours quite common, especially in rural areas..."

A net oil exporter (est. until 2020), yet...

"its output has already peaked and is now declining, its oil-field equipment is deteriorating due to foreign exchange problems, and its refinery capacity is shrinking. As domestic use of petroleum increases, the Syrian production is ever more being consumed"

---

"I sang and danced and played, all through the days and into the nights! It was a wonderful time!"

The Grasshopper and the Ant (Jean De La Fontaine, late 1600's):
http://www.pacificnet.net/~johnr/cgi/aesop1.cgi?jdlf&i1ms&i2l.jpg

The Grasshopper and the Ant (Author Unknown):
http://www.mtsu.edu/~cbader/ghplit.html

Namaste'.... Black Blade!

http://www.flex.com/~jai/articles/namaste1.htmlTo Black Blade - I honour and respect your introduction of the concept of the Grasshoppers and your unremitting focus on the energy issue. Keep up the good work.

I thought mysterious language was reserved for politicians and other mystics.
But what about this?

GATA � Back from another trip to Washington : The gold story is going to break (September 06, 2001)
�
Strangely, almost no one in Washington even realizes
what is about to be exposed in the weeks and months
ahead. The do not know about our army because their
press refused to let them know we were advancing and
why. Yet, the gold scandal will effect most every
person in Washington because it will have international
and financial market impact. That is inescapable.

That is why I found it both amusing and sad that the
GATA army was surrounding the Washington establishment
while few in the establishment, or those that live in
the area, even know what is going on. That is going to
change soon.
�
The GATA story will be all over the world press in the
weeks to come. One story will lead to another.
�

Usul,

Thank you, those examples could be a reminder that the industrialized world must be vigilant when it comes to ensuring a constant ample supply of energy if the Global Economy is to survive. We still have many problems on the horizon such as decaying energy infrastructure (pipeline, transmission grid, aging refineries, aging power generating facilities, etc.), NIMBY, increasing dependence on hydrocarbon imports from potentially hostile producers, etc. The economy depends on ample supply of cheap dependable energy. Higher energy costs have triggered the current Recession as has always happened in every postwar Recession. These problems have not been fully addressed and so high energy costs will likely remain with us. For our own protection we accumulate Gold and Silver for portfolio insurance. We see cracks developing all around us as World markets are in serious trouble. Cheers!

- Black Blade

http://quote.yahoo.com/m2?u
Asian and European Markets still get hammered. The Global Recession is on - the game is afoot.

Unemployment rockets to 4.9%! Looks very UGLY! Market futures are crashing as I write this! This is much worse news than expected. The "Bone Pile" growth is way too much for the market to bear. Even Larry Kudlow on CNBC said "Recessionary!"

Whew, I need to get more coffee and wake up. The Holiday retail season looks very "Grim" as fewer consumers will have freed up cash on hand. The Market Futures are Crashing. Look out below and load up on PMs! Into the lifeboats - women and children first!

No comprende? Major press coverage is coming Howe and GATA's way according to Bill, make that the irrepressible Bill. What I like most about this particular Midas report is that the cabal is identified as simply the establishment, be it Republican or Democrat, as the more skeptical among us also view the world. This ongoing gold manipulation merely reinforces that opinion, and shows GB2 to be little more than a continuation of the process. Bill Murphy had high hopes that the current administration would seperate themselves from the previous one, not that easy unfortunately. The tenacles are quite pervasive.
Does this help or is there more clarification needed?

Too bad for the Pacific northwest...guess their kicking themselves in the butts now for cancelling the WPPS project back in the 80's. Those extra 2500 megawatts would have come in handy. Did I mention it was a nuke project on the Columbia River?

I wonder if that 14% extra NG stored will be sufficient to fire the newly installed Gas turbine generating capacity? Those buggers suck gas like a screaming banshee.

My guess is that 14% won't be enough.

If you can buy Jan gas futures for $2/MCF you may make a killing. (Not investment advice)just something to ponder.

Hey, man! Per your post # 60922:
"How{e} can we help GATA chairman Bill Murphy?"
They need $, letters to Representatives and encouragement. For anyone interested, the New Orleans Investment Conference in late November is going to feature Murphy, Veneroso, Turk, our own Chris Powell as well as MANY others of similar mind. Personally I expect fireworks PRIOR to this Conference and eagerly await attending it.
Regards,
auspec

I think the reference might be to the vernacular of the GATA camp. I suppose it is desirable though to maintain an even handed thrust; both academic/legalistic (public pronouncements) and BM's playing their co-equal roles.
Politics almost always precludes a common sense approach. In this case, denial and cover up is the easier path to trod. I am not surprised in the least. Calling a spade a spade is good business but really now, should we expect anything more of officialdom? They are doing what they "do".

http://news.bbc.co.uk/hi/english/business/newsid_1530000/1530573.stmThe French-Italian domestic appliance maker Moulinex-Brandt has filed for bankruptcy protection.
The company had been trying to organise a refinancing package but the attempt failed.

It reported "colossal" losses earlier this year and in April announced a restructuring plan which involved cutting 4,000 jobs.

Moulinex merged with the German company Brandt last year and the group makes a wide range of domestic goods including food processors, microwave ovens and washing machines.

On Thursday the company's shares fell 18% on the Paris Stock Exchange before they were suspended.

Proud history

Moulinex became a household name through its kitchen blenders and appliances - the first of which it launched in 1932.

It also enjoyed great success in the US when it began making microwave ovens in the 1980s.

But the company was hit hard by the emerging market crises in Asia and Russia, which saw sales plummet and competitors cut prices aggressively.

The company has only made a profit twice in the past ten years and its debt levels are estimated to be about 766m euros (�472m).

In December last year Moulinex merged with El.Fi, the Italian company which owned the Brandt household appliance brand.

The Italian family run business owns a 74.3% majority stake in the company.

In April this year it announced a restructuring plan including closing factories in France, Brazil and Ireland, and cut 4,000 jobs.

Shareholder blamed

The decision to file for bankruptcy protection was blamed on the company's main shareholder by Moulinex's chairman Patrick Puy.

"The banks' contribution was ready. It would have required the shareholder to play its role. I am sorry to say that it did not want to fulfil its obligations, this is a pity," he said.

"To pull off these negotiations we would have needed the understanding from trade unions and of the government and politicians. We had this," he added.

fRAUD-FRAUD- FRAUDI listened to a debate last night between Senator Conrad and a member of the Bush administration about "paying down the debt"with Surplus funds from Social Security income taxes.
Senator Conrad wants to buy back the Bonds in the fund and replace them with currency.
Let me see if I got this right.
He wants to take an obligation of the U.S Government that carries the full faith and credit of the taxing power of of the same government (the Bond that yields 5,6,maybe 7 %){a piece of paper] and replace it with another piece of paper (greenback)that says "I owe you nothing".This is supposed to make retired people "feel good"about paying down the debt.
The Democrats want to destroy the earning capacity of the retirement fund just like they destroyed the yield on CD's of retirees.Retirees that depend on the yield of savings to live have seen thier income cut in half in the last few years,and the government cries why don't you save more?
WHAT A FRAUD!SUBSTITUTE A HIGH YIELDING PIECE OF PAPER(BOND) FOR A PIECE OF PAPER THAT SAYS I OWE YOU NOTHING.

A FRAUD IS BEING COMMITTEDWhen government buys back a bond that has a high yield,what do you get in return?Do you get a "silver certificate"greenback that says you can redeem this at the Federal Reserve bank for a little baggie of silver?Oh No ,not any more it don't say that.Does it say on your greenback "U.S. Banknote"Oh No ,that would be a claim on the assets of U.S.government and maybe on the gold reserve.
Do you know what it does say ?
It says I OWE YOU NOTHING.

http://www.usagold.com/Order_Form.htmlNote: If you would like to receive an information packet on gold (how to buy it -- our products and services) and a free trial subscription to our newsletter, News & Views, please go to the link above. For those seeking a higher level of understanding with respect to the gold market, many of the concepts addressed briefly below are covered in detail in our upcoming 32-page Quarterly Review. Please go to the link above to register for your packet.


In Brief: Gold showed signs of life going into
the weekend defying the typical behavior in the
gold market just prior to one of the Bank of
England's bi-monthly gold giveaways. Seems that
investors are much more worried about

(1) a major bear market (The DJIA is
down 125), (2) the recession
(Unemployment at 4.9%) and, (3) the
attendant systemic risks

than Wall Street would like to admit. As a result
fear and loathing seem to rippling through the
financial sector. Investors are buying gold.
Inquiries and activity are on the rise at
CPM/USAGOLD.

Such sentiments seem to be over-riding the
typical "Pre-Auction Gold Meltdown Blues."
Neither the British Exchequer's office nor the
Bank of England have offered a suitable
explanation for their on-going sales. They worked
hard for many months to make the British people
(and the world) believe they were selling because
they wanted a better return on their reserve
position -- better to be in euros and dollars,
they said. Since then the euro has tanked and
yields on both currencies have dropped
precipitously. By and large, none of the
concocted reasons have stood the test of time. So
why do the auctions continue? Good question. Ask
the geniuses at BOE and the Blair government.
Even with gold holding its own (and actually on
the average I would say its up since the time of
the first group of auctions) gold is a better bet
than the either the dollar or euro as things
stand today. My European friends tell me that
Britain will succumb to the euro. I'm not so
certain. The British people have a streak of
independence hardened by the reality of its
geographical status as an island nation. They
might surprise those holding the majority
opinion.

The best thing going for gold is the growing
systemic risk alluded to below by Mr. Marc Faber.
Western banks are in trouble buried under a
mountain of bad telecom and third world debt, and
it's only going to get worse. Earnings in the
rest of the sectors -- bar-none -- are a
disaster. That will migrate to the banking houses
faster than you can say "credit rating." Japan
revealed today that its economy shrunk by .8%
because, says it finance minister, the United
States has greatly cut its imports. Now how is
that going to make the rest of the world feel?
The forex markets can't seem to make heads or
tails of all this scariness so they run in one
direction today and the opposite direction
tomorrow. U.S. Treasury Secretary O'Neill says
there's nothing to be confused about which, of
course, raises the whole specter of confusion to
a vast and increasingly anxious world of currency
and stock trades. So it goes. The volatile brew
bubbles on. . . . .

This will not only instigate worldwide demand; it
could also generate a wave of short-covering, and
it is interesting to note the overnight reports
indicating the beginnings of just that in the
Asian and European gold markets. One wonders with
all the concern beginning to center around the
banks whether or not their highly leveraged
derivative positions -- including those in the
gold market -- will come under closer scrutiny
and tighter control. These are times that try a
bankers' soul -- a time to shed, not nurture,
systemic risks. In my view, portfolio management
committees will be awfully fussy from here on
out, and gold speculations are alot easier to
shed than multi-billion telecom loans with very
large and vital economic enterprises (with huge
payrolls). If gold should get away, we could see
the derivative short -position that's kept the
price of gold unravel rather quickly. .
.overnight, if you will. That would be more than
good for gold. The larger systemic risks may
force closure of the smaller as banks look to
trim their overall books -- a process we believe
to have affected the gold carry trade already. Be
ready for surprises. . . . .

That's it for today. See you back here Monday.
Have a good weekend, my fellow goldmeisters.
Please read on. I've posted some interesting,
timely snippets. MK

Systemic Risk Makes Gold the "Only Perfect Hedge"

"The gold bear market is more than 20 years old
and has either already ended or is at least
approaching its end, as more and more investors
will come to share my view that something simply
doesn't add up in the present monetary system
(which isn't really a system) and that one day
the ownership of a store of value that is totally
uncorrelated to financial assets will be a highly
rewarding investment. Thus, I urge our readers to
gradually accumulate physical gold and gold
shares. In fact, our readers should follow my
advice but also hope that I am wrong, because if
gold really does take off the way I think it
will, then obviously something else will go badly
wrong and destroy wealth on a massive scale.
Thus, I recommend gold as the only perfect hedge
against the systematic risk I was referring to
above. - - - Mark Faber, Gloom,Boom & Doom Report


MORE AT DAILY MARKET REPORT PAGE

http://www.geocities.com/aaiken/compaper.htm
Descent from the Himalayas for the C&I loans.Another one of those early '95 blast-off charts from the Rubin era.

Thanks to Oblomov.

Yes Sir B.Murphy... * THE GOLD SIGNAL * !!!!

The paper stockmarket Trillions that were created out of cold air and served, to polarize to a much greater extend,
the collecting smarties and the dumb loosers. All these Trillions of irrational stockvaluations, had nothing to do with the correct amount of goods and services that were provided. Joe sixpack will loose his savings, illusions and honour, with the beginning of paper-vaporization.

This is the drama behind the fraudulent game that was !
Good money, saved money, used into the paper-game, is now ridiculed with nothing else than debt.

What should and could " GOLD " have done to avoid this shamefull, fraudulent robbery of the ignorant ?

Gold could have signaled that too much money has been 'created'. Gold could have signaled how much of this money was/is, un-productive debt money. Gold could have stopped the artificial monetary policy on interest rates.
Gold could have warned all savers, with good dollars, to have stayed away from the tantalling paper-chase.

No, Gold was not allowed to do what it should have done, when it was/is confronted with Fraudulent management by " THEM " !

The unwinding process shifted into second gear. An intermediair bottom will soon be reached in september/october, where the 9 month cycle will have a rest.
Only to resume a new cycle with another "lower" bottom. Up until all un-real paper has been distroyed and conservative valuations are reached with dramatic revised profit-projections. Severe undervaluation of quality must first be obtained before any restart of any kind of expansion is possible.

Gold failed to protect all these little, hard working people. Wilhelm Tell (Gold) was captured and imprissoned.
Those Trillions of debt-stockmarket-dollars, that have been conquered by the smarties, can still melt away, if Gold starts putting a much lower value on the looted dollars.
And than the lilliputans, pay twice : first in decimated SM-paper and secondly in devaluing dollars.

Thanks Sir Bill ! Thanks for taking on the defense and exposing the fraud.

Good Morning BB,
I first saw the story on Fox News and then it was on CNBC and ABC (maybe others). I did a search on the net and there are several articles about this lab. You can find it at
http://www.msnbc.com/news/623713.asp
The search for "Germ Laboratory in Nevade" will yield many more sites.

Oh, our wonderful guardians.

Later,
Sj

Sir, if B.Murphy succeeds in alarming the media with the point that "the Gold Signal" could have avoided the present ongoing implosion...they must lend him their ears !

Bill has a very good point here. It is when something dramatic (SM-implosion), starts to materialize, the establishment and the managers have to make a move. And the Gold-Story might start to become managed in another way.
Because it is not only Gold that was not allowed to give any signals...but much other indicators as well. So "they" will have to make choices and start looking for scapegoats etc...etc...

If...only, *Gold* could get connected...

But everything will be put at work to soften the shock, timewise. A lot of different crash-brakes will surface...but when these breaks get over-heated...nothing will work ! GATA is the only one out there that still can link Gold to the debacle !!!!!!! Let us support them with every tool we can, each one of us !

- Still mesmerized by just now hearing an excellent interview with long term German Chancellor Helmut Kohl, an early visionary for the EU and his visions never faltered.

Will try to recapitulate his intense and clear outlook over the weekend, as time allows, made 2 pages of notes.
Just one statement vis a vis the euro, which astounded me, though positively and I might as well start with a snippet from Henry Kissenger: "The EU, could you please let me have their telephone number!" - Sounds like the euro, a currency without a country! H.K's response to the chicken and egg question of the euro was, as of necessity the country will follow the common currency ... much more on that topic later... cb2

PS: Thanks to all my friends for the congrats on our 32nd
(not Street) anniversary -
.

http://www.usagold.com/goldenchalkboard/gc_stockbubble.htmlPerhaps the downside has only just BEGUN.

You decide. (see link)

Companies and stocks must ultimately justify their values through credible profitability of the underlying business, and this profitability comes under doubt in an economic downturn -- even to the point of threatening the continuing existence of the company. Bankruptcies do happen and all investment can be lost.

Bottom line:

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. It is wealth itself. It is valued worldwide simply for its "form and function" -- an immutable financial commodity which is immune to the contagious collapses to which all financial paper is prone.

Call Centennial today. You never know what the weekend holds in store, and in this global marketplace an event on the far side of the world while you sleep or play can adversely affect the credibility of your financial position.

R.

http://www.usagold.com/onlinestore/special.html

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

http://www.usagold.com/THEGILDEDOPINION.htmlThere's plenty of "brain food" to be found at the Gilded Opinion. Make a selection from among the articles, then report back to your friends at the forum with your thoughts and recommendations!

R.

http://www.usagold.com/DailyQuotes.htmlWith our newswire we bring you the news you need to know... all day, every day.

Find out what's happening NOW.

http://www.usagold.com/cpm/abcs.htmlSit down with this one and you'll have plenty to talk about!

"The ABCs of Gold Investing" -- written by our very own Michael Kosares.

We all witnessed during the second half of the �90's, the creation and inflation of a bubble in the realms of the stock market, and across the spectrum of financial assets in general. This was done through a coordinated effort within the interconnected and incestuous financial world lorded over by the FED as a front for its owners.

Easy money and credit, along with market manipulation, lack of regulation, hype and propaganda, all were tools used to create the "wealth effect".

The "wealth effect" affected both individuals and businesses in a similar manner. It has discouraged the work ethic and the recognition that true wealth is generated by the accumulation of real assets or the production of real goods in excess of the inputs required for said production.

Instead, wealth has been redefined as large numbers on a piece of paper. The "gambling" mentality in quest of these large numbers replaced the work ethic.

The owners of the monetary system (along with almost everything else) took their cut of all the financial transactions along the way just like the "house" in a casino.

By "pumping up" the system in this way and creating the bubbles which led to the wealth effect, the owners/controllers/orchestrators achieved their primary goal.

Everybody, individuals and businesses alike, contracted for huge expansions in debt based on their hugely inflated paper wealth positions.

This massive debt expansion served three purposes. The first was to help keep the game going by serving as a base for increasing the funny money supply. The second was to create profits for the paper pushers. The third purpose for the creation of the bubbles which facilitated the debt expansion has not yet played itself out but was the main reason for the expansion.

The debt levels that have been contracted by society at large were based on this perceived wealth effect which people were led to believe would keep expanding. Now as the bubbles get pricked and the "wealth" evaporates, the debt becomes too much of a burden.

We (except maybe some of us who can still think) have been defrauded into contracting a level of debt which was based on an illusion of wealth and prosperity. As the illusion clears and reality comes into the picture, we will witness the largest redistribution and concentration of wealth into the hands that own this debt, ever seen in history. The holders of all this debt are happily taking their profits while they are waiting for the big payoff; foreclosure.

Was it simple greed that led to this orchestrated creation of a wealth effect in order to get us to contract for too much debt? Do the motives go past greed to power lust? Or is the ultimate goal to achieve a transformation in the "order" of the world?

I don't know how we can protect /insulate ourselves from the large-scale transformation(s) that the coming redistribution is going to lead to. But on a small, individual scale, it seems that the best advice for preparing for whatever the future is going to bring, is old advice to those who can see the direction we're headed. Get your personal financial situation in order---reduce/eliminate debt and convert all paper numbers to real assets or real goods productive capacity.

Courtesy of the owners of the paper, CPM is having a "fire sale" on the "realest" of real assets. When the paper burns, the sale will be over forever.

http://www.theage.com.au/business/2001/09/08/FFXZBL6VARC.htmlSnippit:
Normandy Mining has started to trade at a premium to the scrip-only offer from South Africa's AngloGold. Opinions on the reason for the premium is split between two camps.

The first camp thinks that if AngloGold wants to secure the approval of the Normandy board, it will need to sweeten the offer. The same camp offers the hope that Normandy's 20 per cent shareholder, Franco-Nevada of Canada, will make sure there is a higher offer and, failing that, a counter-bid might be made by Barrick Homestake or Placer Dome.

The second camp believes the premium reflects the fact that after heavy sharemarket trade, the remaining Normandy shareholder base is warming to the prospect of the AngloGold takeover . . .

auspec (msg#: 60946)
RE: The New Orleans Investment Conference in late November. Who knows, I may show up.

Horatio (msg#: 60950) You may want to read Randy's post about that very concern located at site steward (8/31/01; 00:18:55MT - usagold.com msg#: 60582).

Snippet: "When the Fed adds permanent reserves to the banking system through the outright purchase of these Treasury securities, it takes ownership of the security as an asset on its balance sheet and compensates the former owner with payment in dollars. These dollars are truly "created out of thin air", and they offset the security (asset) by being recorded on the liability side of the Fed's balance sheet."

FYI, your URL links do not work so I am guessing based upon your post.

Thanks,

BR549

Sonar to Con.
Go Sonar.
We have a hit Sir!

Up Scope!

Confirmed. No.1 right on the bow. (unemployment)

Sonar contact Dead Abeam Starboard.

Confirmed. Bring Her 90' Starboard Chief.

Aye! Sir.

You all have a great weekend. Going camping! Looking forward to Monday.
Slingshot

I have made plane and hotel reservations today and registered to attend the New Orleans Investment Conference. Am really looking forward to going and hearing the very interesting lineup of guests, especially the gold supporters and meeting the great folks from GATA. Maybe USAGOLD Forum folks could have a drink together.

http://sg.biz.yahoo.com/010905/3/1e99i.htmlSnippet:
South Africa's AngloGold Ltd , the world's largest gold producer, said on Wednesday it would "easily" absorb the hedge book of target Normandy Mining .

AngloGold earlier on Wednesday unveiled a surprise offer for Normandy, valuing Australia's largest gold miner at A$3.2 billion (US$1.7 billion).

"Their hedge book would fit quite easily into our hedging policy," AngloGold Finance Director Jonathan Best told a presentation in Johannesburg.

Best later told U.S. analysts that Normandy was more heavily hedged than AngloGold, "but when you combine the two it's less than three years of production that is hedged over a long period of time".

"When you combine the two, we are sitting with 23 percent of our reserves hedged. We can absorb this hedge book quite easily and it won't give us very much heartburn," Best said during a telephone conference call with American analysts. . ."
------------------------------------------------------------
From reading around and hearing the "Cabal" news network (grin) on this it seems the short position may in fact be 25,000,000 (25 million) ounces, ouch! If this is not a liability with a bigggg "L" please tell me what is.

Consider this contingent liability against the current Comex short futures gold position and other production statistics in this gold market about to explode. - Netking

http://www.forbes.com/2001/01/30/layoffs.html
More of "Dem Bones."

Where else but N.O. would a 'Voyager' go in late November? Glad to hear of your plans. I have several internet friends that I hope to meet there, will put your name in the hat also. You are the 4th from USAG that I know of for sure, and it sounds like you, also, will be at the GATA dinner, no?
Regards,
auspec

http://biz.yahoo.com/rb/010907/business_bush_economy_concern_dc_1.html
Snippit:

WASHINGTON (Reuters) - President Bush on Friday expressed concern about higher U.S. unemployment and urged Congress to enact his ``pro-growth agenda'' to create energy- and export-related jobs.

Black Blade: Energy and jobs? That would be killing two birds with one stone. There is much political and environmental opposition to increasing energy in the US, therefore this Recession will be very painful and last a very long time until political sentiment concerning energy changes.

Can you get from Cornfield County to N.O. somehow{e}? Make it for sure, man, and bring annie with you to cavort around with my 'artist', as well as us gold advocates. Do you know {to ALL} that you can sign up for $300 less by being my friend? It's so bad they gotta pay people to like me these days. My permission for anyone to ask CPM for my e-mail for any arrangements to accomplish this. Also, if you sign up under GATA they will make a contribution to the 'boyz'. Such a deal and fried ersters {oysters} with Raja to boot. Gold ready to fly, my favorite Jr. is drillin, lookin for a grand time in the Big Easy. may even attend a few lectures.
Regards,
auspec

Yes, I wouldn't miss the GATA reception,Thursday evening. My wife is coming also. We will leave the rain and snow behind. Hope to meet you and the others.

I believe Bill Murphy, that between now and the end of November anything can happen in the world of gold. That the potential for gold to become a serious subject of the conference could prove to be most enjoyable, from our perspective. Maybe the truth of gold suppression will be reveled to all. That would certainly be something to witness in person.

N.O. Party--

Thanks for the invite. We don't have any airports here except for the crop dusters.

N.O. is only about 4 hours from Cornfield County by Motor Home which works out "good since I don't fly anyhow".

I will check with Miss Annie to see if she can get all of her Christmas Art orders shipped by then. It really sounds like a hoot especially that drink in the bar and a few lectures on Gold. Will let you know if we can make it.

Regards from Cornfield County,

BR549

Since Friday nights are usually quiet I thought I'd post a letter I just sent to some family and friends. You guys are the latter to the best of my knowledge.
I mention a real estate sale in the letter. I am convinced enough by what I've learned here, elsewhere and through my studies that bad days are coming soon so that we actually sold a small warehouse that was supposed to provide some income for retirement. I guess we're re-allocating the investment. Anyway, the rest of the letter needs no further explanation other than to let you know my family and many associates are convinced that my economic views are, if not demented, at least crazy.
Happy weekend!


Concrete work has slowed down a little but I was happy to take a few days off from that to concentrate on the economic situation. This was affordable as we sold (closed) our warehouse condo last week. We sold for $4000 less than what me originally paid for it in 1986 but with the coming recession/depression, we needed to liquidate and pay off credit card debt. Hopefully, with tightening of the belts, we'll survive the coming crash. I believe what I've been annoying you with for some time, is now becoming visible to even the stubborn "buy stocks" cheerleaders of the peoples stock market channel- CNBC.
It will grind down because the government has curbs to suspend computer sell orders whenever the indexes decline by a set percentage. Otherwise preset sell orders would take the Dow and Nasduck down at internet speed. The Economic Stabilization Force will slow the descent as best they can but they can prevent it. Mr. Greenspan will also probably lower rates by one half point at the next FOMC meeting. He risks panic, in my opinion, with intermeeting cuts such as we saw earlier this year. The next cut may move the markets higher but I doubt they'll hold the gains for more than two days if indeed, they don't reverse back downward before the end of the day he cuts them.
Rate cuts are his only weapon but each cut weakens the dollar (as do the falling markets). Inflation numbers have been doctored (along with most government fiqures) for so long that, in light of the unveiling downturn, the hope for assurance from their release is becoming mute. An example of a doctored number is the discounting of the higher price tag on cars and trucks through what they call "value enhansement" by which they say the new $25,000 truck actually costs no more than the new vehicle that you bought 20 years ago for $8,000 because the new one has more and better technology. This shows up in the CPI (consumer price index) and PPI (producer price index). The new Bush administration appears ignorant of the underlying problems and, as such, will not hide, discount or lie about them as much as Clintons people did.
The dollar's weakening and real inflation rates are lowering the real return on dollar denominated assets. Soon even T-bills and Bonds will not preserve or protect wealth and the dollar's real value will depreciate at even faster rates than it the recent past. The technology and dot coms have been slaughtered but there are Bigger problems dead ahead in corporate and consumer Debt which simply can not be sustained without an expanding economy. Our economy is so structured that it must expand or implode. Real estate, which is overvalued and overleveraged, will be the second bubble to burst.
Quick recovery? Who knows? It will depend upon how much denial and passing of blame happens. I believe it will only be washed away with the demise or near demise of the fiat dollar currency. There will be a panic soon to move from paper assets to tangible ones (but not real estate at present prices!). The only things that I know of that will retain value will be tangible hard assets and, as a store of value, gold and silver. If the dollar survives in its present form, I believe it may deflation initially and briefly before we see massive inflation. By inflation I mean Both the increase of dollars (with huge amounts returning to this country from overseas) and the increase in the price of goods and services (which most think of as inflation).
My own opinion, at present, is a long and drawn out recession/depression of many years.
The present situation is the result of many, many years in the making and will not be "fixed" quickly. It has been prolonged through greed and deceit. I'm sorry to be the messenger of what you may consider "over the edge" thoughts but I think a warning is important. I hope it will be heeded even if only some small preparations are made. What I and others have foreseen is now occuring. The events are unfolding. Let me give some phrases to look for in economic news shortly.
Think of me when you hear "global meltdown", "fund liquidation", "flight to quality", and/ or "depreciating value". Remember me when you hear of "floating currency values" changing at cyberspeed. Or when you hear that it wasn't too much selling but simply "no buyers" in the market.
Enough of this. I hope all is well with you and family and I do hope that I am reading the economy wrong! I'd rather a crushed ego than a 30's style depression.
Rich and family

Most definitely! A long drawn out contraction. This quarter's corporate earnings will be "throwing gasoline on the fire." Earnings are falling fast as is consumer confidence. Some are saying that the pathetic miniscule tax rebate is not going to new purchases, but rather to savings and reducing debt. There is no light at the end of the tunnel - just the sound of an oncoming train. Hand on for the ride. It is going to get "Interesting."

This essay snippet is from LeMetropole Cafe {you may consider a membership as it's great and a direct link w Bill Murphy and GATA actions}. Adam Hamilton, one of the GATA Boyz put up this piece-- The JPM Derivatives Monster:

Of that huge $43.9t, JPMorganChase, a single holding company, controls a breathtaking $26.3t worth of derivatives in notional terms! JPM represents 59.8% of the total derivatives market controlled by US commercial banks and trusts per the OCC. Why on earth would one entity run up such gargantuan exposure to derivatives? Perhaps JPM controls nearly 60% of the commercial bank segment of the derivatives market because maybe it holds 60% of the commercial bank assets in the United States of America. We constructed the next graph from "Table 1" of the Q1 2001 OCC Bank Derivatives Report as well to investigate this very question.



Although JPM is a very large commercial bank, it only represents around 12.6% of the total commercial bank assets in the United States per the Q1 OCC report. The pie size in this second graph is $4.9t. This number implies that, in general, the US commercial banking system has a derivatives notional value to assets ratio of 9 to 1, pretty extraordinary leverage when one realizes that a large portion of a given bank's assets are not usually the shareholders' but represent funds entrusted to the bank by depositors in various forms. It is also pretty extraordinary gross leverage for an industry that prides itself in being "conservative". A 9 to 1 implied leverage to assets achieved through derivatives sounds more like hedge fund territory than banking!

JPMorganChase controls 12.6% of the total commercial bank and trust assets in the United States, but a whopping 59.8% of the total commercial bank and trust derivatives market. JPM's implied derivatives leverage on assets ratio is a colossal 43 to 1. Why would one superbank risk such extreme derivatives exposure relative to its asset base?

Even more provocative and outright frightening is the ratio of the notional value of JPM's derivatives positions to its shareholder capital. Per JPM's latest 10-Q quarterly financial report filed with the US Securities and Exchange Commission available at www.jpmorganchase.com/pdfdoc/jpmchase/10Q2Q01.pdf , JPM reported a stockholders' equity balance of $42b. $42b is a lot of capital and is nothing to scoff at, but when compared to an outstanding aggregate derivatives position with a notional value of $26,276b, JPM's implied leverage on stockholder equity is utterly mind-blowing. For every dollar that JPM's shareholders own free and clear, JPM management has pyramided on almost $626 worth of derivatives exposure in notional terms to the highly risky and highly volatile derivatives market! 626 to 1 implied leverage?!? Why, why, why?

While the latest JPM 10-Q was released in mid-August and pertains to Q2 while the latest OCC derivatives report is from Q1, this cross quarter comparison still accurately shows the hyper-extreme leverage inherent in JPM's aggregate derivatives exposure. If we instead use JPM's Q1 10-Q to ensure we are comparing apples to apples, the implied leverage on stockholders' equity changes little to 611 to 1 on $43b of stockholders' equity.

In financial circles 10 to 1 leverage is considered very aggressive, 100 to 1 is considered to be in the kamikaze realm, but we don't ever recall hearing about large-scale leveraged operations exceeding 100 to 1 outside of the horrible example of the doomed super hedge fund Long Term Capital Management. JPM's management may have effectively created the most leveraged large hedge fund in the history of the world by using $42b worth of shareholders' equity to control derivatives representing a notional value of a staggering $26,276b. After we shook off the blunt shock of learning of an implied leverage of 626 to 1 by the United States' premier Wall Street bank and elite Dow 30 blue-chip company, we continued to dig deeper into the revealing OCC Bank Derivatives Report. END

auspec comment-- Do you think I should tell my niece, who recently started with JPM/C exactly what they are about??

Thank you for your explanation that GATA's theory of the link between gold and the coming debacle will soon be covered in/by the press.

McAgSpec - Go ahead tell your niece, I'd certainly like to know if I was in her position! I can't make it to New Orleans Conference but y'all have fun there . . . just watch out for Putin's plants!

I am attending as a guest of auspec although I am hoping he still claims me as such as it might appear we sometimes disagree. To all who would like to attend and kibbutz with him I can assure you he is a first class gentleman. To all who would like to have a drink in the bar I can assure you I will buy the first round.

Mario Gabelli is tap dancing with Lou on "public television". ".....dink adink a do......ahhhhh...I got a million of 'em". Any guesses?

Agreed.
I watched some of the peoples' stock market television today and, as is their custom, after interviewing some guest analysts, CNBC's announcers asked what stocks were being recommended. But, twice I heard the analyst asked, "What companies, IF ANY, are you looking at now?" As usual, it is assumed that all recommendations are for buying (not shorting).
Fleckenstein was asked the same about a half year ago and, after looking questioningly at the announcer, said, "You mean to buy?". The announcer was at a loss for words. Fleck then said the present rally (the market was up that day) wouldn't even tempt him to cover any of his shorts. He has not been asked back since, to my knowledge.
Liz Claman also stated today that the markets were very bad for investors today. Again, the total lack of knowledge that stock markets can be approached from the short side. I'm beginning to believe that most of the cheerleaders on CNBC really did believe a great deal of the positive hype they've been promoting for so long. Some of them look genuinely concerned and confused now.
There was also some mention today of large sell orders in big name companies. I was half listening but I think it was an order to sell 8 million shares of AOL. The point is this may be the beginning of forced fund sales, perhaps to raise fiat to pay customers withdrawing from mutual funds. Forced liquidation in a downtrending market? Gasoline, you bet!
How many whose job it is to keep millions invested are wondering about which stocks- If Any, and then where when real return on bonds and such decline?
I keep wondering how little of this massive money flow- looking for a home- it would take to set off precious metals?
With all your good work reporting the growing bone pile and similar news at the neighboring castle which they call nails in the coffin, we should not be surprised at the growing unemployment numbers. It was mentioned at GE that someone must have forgotten to doctor the figures.
Thanks for all your ongoing efforts, some of which have influenced my present positions and, of course, the sale of real estate mentioned earlier.
What do you see in the future? Grinding down, bounce up or crash for stocks and, of course, when for gold and silver?
Happy weekend to all
Rich

everywhere and yet, there's not a rally in sight. What has become of the theory/guess that monetary growth would be the tide that would lift all boats?

Thanks for sharing that letter. I admire your conviction! Hope to see you in the Big Easy...CM

I never told the buried gold
Upon the hill- that lies -
I saw the sun - his plunder done
Crouch low to guard his prize.

He stood as near
As stood you here -
Did but a snake bisect the brake
My life had forfeit been.

That was a wondrous booty -
I hope 'twas honest gained.
Those were the fairest ingots
That ever kissed the spade!

Whether to keep the secret -
Whether to reveal -
Whether as I ponder
Kidd will sudden sail -

Could a shrewd advise me
We might e'en divide -
Should a shrewd betray me -
Atropos decide!

Emily Dickinson
c. 1858

Funny that you should mention people redeeming their mutual funds. Today I closed out my remaining position in Janus Mercury Fund. I had already gathered up profits before but I had a nominal position left and finally decided to bail. I just wonder how many others were doing the same today. I really don't know what will happen on Monday as strange things have happened before. I suspect that the overall trend for the market is down as there is just absolutely no positive news to go on. Corporate profits are falling faster than a Stock Broker in freefall from 20 stories. I can almost see Liz Claman shaking her head and breaking down in tears on camera as she interviews some bonehead analyst and then she suddenly realizes: "Oh my God! My entire retirement is tied up in the stock market in GE's 401K program and they invest heavily on this Jerk's recommendations!" I think that PMs will really take off only as a last resort when people look around and see nothing but carnage (not that things are all that cheery now). PMs are after all the ultimate portfolio insurance. Cheers!

- Black Blade

I, too, wrote a message of warning to the immediate members of my clan just last night. They still remember my warnings of the possibilities of Y2K and, since nothing happened, they probably think I need more recovery time for my "condition"! (grin) Added on top of that the wife thinks I'm crazy/stupid/gullible (there's irony for ya) for believing that the economy is/will be so bad. Still, it doesn't stop me from doing what I must to protect as much of my ASSets as possible with what little I have. One day at a time, gentlemen....

Putin's plants??? The niece will get the piece, thanks.

I believe the Federal gov't will start to get heavy handed on the SM buy side pretty soon, a la 1987, to keep the shorts at bay. They really don't want everyone piling on.

Of course you're still claimed, as I can't remember much we disagree about, other than you have much more faith in the system than I do. Mere trifles. Now, I have copied your offer to buy the first round, hope not to catch you unaware. A couple of your internet friends could be accused of being connoiseurs, or at least a connoiseur wanna-bees. You may have a little 'splaining' to do in Dec. when the Visa bill comes in!
Cheers in advance,
auspec

If "all paper will burn" then, the folks at JPM should consider cogeneration (of losses and perhaps BTU's).

Could the SM's be considered "all paper"?

We definitely agree that the Constitution is a document par excellence looking for an owner.

The world is going to "rock". Will we never learn?

The Constitution has million of owners, such as me and thee, yet it has no country, as it used to be. What will they ever do with these 'dinosaurs' and our refusal to play along? A spirit and a force and a determination that cannot be subdued, for once a man tastes freedom he shall not come unglued. Speak out, say it while you can, join the quest for justice, along with Cavan Man.
May the Guinness be with you,
a

England is old and small and the local folks started
running out of places to bury people. So they would dig up coffins and would take the bones to a "bone house" and reuse the grave. When reopening these coffins, 1 out of 25 coffins were found to have scratch marks on the inside {no son muertos BB} and they realized they had been burying people alive. So they thought they would tie a string on the wrist of the corpse, lead it through the coffin and up through the ground and tie it to a bell. Someone would have to sit out in the graveyard all night {the "graveyard shift} to listen for the bell; thus someone could ber 'saved by the bell" or was considered a "dead ringer". END

So, put that in your bone pile, BB, if there is any room left. I volunteer to stay awake all night and listen for JPM/C's ring.
Respectfully yours,
auspec

McAuspec Re:"Putins Plants"(aka operatives)

I was referring in jest good Sir to the letter your received from our "Mafia competitors" & posted about (auspec 07/17/01; 18:28:57MT - usagold.com msg#: 58234) an excerpt from your post of the letter per below :- Netking
------------------------------------------------------------
". . . A mere semi-monthly 20 to 25 tonne gold auction has you mesmerized and paralyzed. Need I bring up the name Putin? HaHa, what mice your lot is. How about the last 10 years mention of 'digital photography' sending the silver shrinkers to the showers?"
"You commoners need to wash up a bit if you're going to get a leg up on our esteemed Committee . . . "

Wazzup with the availability of silver maple leafs? Am looking to get more stock.

http://cbs.marketwatch.com/news/story.asp?guid=%7B1F3782AB%2D857F%2D459E%2DB0C3%2D0C9356DEF2FE%7D&siteid=mktw
1,000-point one-day Dow drop needed for 'healing'

Snippit:

Schaeffer says professionals - equity analysts, economists and strategists at Wall Street banks - are putting the 18-month decline in stock market valuations in the best possible light. Most of the Wall Street crowd is unwilling to accept the stock market's verdict that corporate profits and the American economy at large will languish. "The strategists are fundamentally based and they have this approach where the lower the market goes, the more attractive it becomes," Schaeffer said Thursday. "Go through Abby Cohen's comments (Goldman Sachs strategist) and she will gratuitously add that if the market goes any lower she'll be even more bullish."

Schaeffer says professionals - equity analysts, economists and strategists at Wall Street banks - are putting the 18-month decline in stock market valuations in the best possible light. Most of the Wall Street crowd is unwilling to accept the stock market's verdict that corporate profits and the American economy at large will languish. "The strategists are fundamentally based and they have this approach where the lower the market goes, the more attractive it becomes," Schaeffer said Thursday. "Go through Abby Cohen's comments (Goldman Sachs strategist) and she will gratuitously add that if the market goes any lower she'll be even more bullish."

Black Blade: At year end when GS trots out the old girl and Abby Jo's predictions of DOW at 12,500 and S&P 500 at 1650 fails to materialize, I wonder what her excuse will be. Dow below 7000, NASDAQ 800, and S&P below 600 seems to be more realistic. It could actually be much worse. Today a friend asked what I think the floor would be. I said "well, you can't go lower than zero."

http://biz.yahoo.com/rf/010907/n07526168_2.html
Snippit:

NEW YORK, Sept 7 (Reuters) - Investors waiting for a rebound in corporate profits to help bolster the tumbling stock market had better not hold their breath: Corporate America's earnings woes will be around for at least the rest of the year. Data showing the U.S. unemployment rate hit a four-year high in August buffeted Wall Street on Friday, fanning worries that consumer spending will slip and crimp earnings further.

``There's no sign of light at the end of the profits recession tunnel,'' said Hugh Johnson, chief investment officer at First Albany Corp. ``The visibility is just thick fog.''

Black Blade: As I have been saying. DITTO!
View Yesterday's Discussion.

I am visiting in Houston for a few days.

At the Saks store I went up to the Men's Clothing Department for a chat with the salesman, who has sold me clothing in the past.

"Mr. Sierra, I've had this job for fifteen years, and I never saw things so bad! The only buyers are men in the oil and gas business."

I said I wasn't shopping for the moment.

"Come back soon and BUY SOMETHING, please!"

Restaurants are strangely quiet. Hmmmmm!

The "Galleria", the leading mall in Houston, was very quiet indeed. Few or no shoppers in the stores.

That's the news from Houston.

Looks like "the party's over" in the U.S. of A. Now the work of cleaning up begins, and it will take years and years. We are at the end of an era, and the beginning of a new era. It's not going to be pretty.

Sierra.

http://www.dismal.com/thoughts/article.asp?aid=1357
Snippit:

While demand for gasoline has remained surprisingly buoyant, refiners have cut back on production because of tightening margins and necessary maintenance work. Weaker imports have further contributed to falling inventories. The results are gasoline stocks have once again fallen below the psychologically important 200 million barrel benchmark.

Price volatility in the U.S. gasoline market results from a structural shortage in refinery capacity, which requires refiners to run their plants at capacity utilization rates that are not sustainable in the long term. Refiners may delay maintenance work and risk longer outages or even unplanned breakdowns in order to increase output when prices are high.

Invariably, when profit margins decline, refiners have to cut back production and schedule delayed maintenance. In which case, if demand continues to be strong, gasoline stocks are depleted once again, and prices rise. This is exactly what is happening now. After refiners were prompted by high prices early in the driving season to increase production by running their plants at full capacity, stocks increased and subsequently margins decreased. When refiners eventually cut back on production to reduce wear and tear and perform necessary repairs and maintenance, inventories plunged.


Black Blade: Another sleeper that is about to awaken. The near capacity refining problems become evident every time a refinery explodes and burns - sometimes due to delayed maintenance. One more refinery explosion could just about trigger a sharp increase in gasoline and distillate prices. Higher transportation costs will also hit the bottom line at US corporations.

http://www.dismal.com/thoughts/article.asp?aid=1360
Snippit:

It was a long summer for the economy, as a glance at financial markets reveals all too clearly.

Black Blade: A lot of "Grim" data will likely be released next week. That could pressure the markets again next week.

megatron (09/07/01; 22:53:18MT - usagold.com msg#: 60997)
Netking Wazzup with the availability of silver maple leafs? Am looking to get more stock.
------------------------------------------------------------
Megatron, I haven't heard of any major shortages of Ag maples to this point. There has been some grizzles about orders for 100/Oz bars not being filled to the spec's ordered though, including quantity supplied and the "wrong" stamp being on the top etc. It would appear from feedback some sources won't sell them (100/Oz'ers) anymore and others are saying "take what I can get" etc. I don't know how widespread this is though, it may just be an isolated thing? USAGOLD are good people & may be able to source if anything is available as the squeeze hits.

It must be more than crystal clear by now, that everything on extreme volatility, we are undergoing, is the result of of that very peculiar something new : DERIVATIVES ! The Gambler's alpha and omega !

These massive slingshots, make everything, as unpredictable as can possibly be. All fundamental references in relation to valuation, are radically, out of use. The financial / economical happening is hermetically * Monitored * !

The whole economy is genetically engeneered / modified / transmutated ! The real economy has degraded into a vulgar feeding bottom for Gambling. Yep, it is as bad and ugly as this !

What is described by Zelotes, is also happening, on the very small individual scale. Yes, even in conservative Europ. The idiocy, that I'm witnessing, when spending some time at my broker's office...is simply unbelievable.

Now, that I've come to terms with this *un-natural* / *virtual* mind-boggling figure-dance...I'm only smiling when that yellowish tangible, reflects those early sunbeams, with soft glowing warmth. Yes, autumn, ideal time for romance.

Yes, definitely YES, we will see more adrenaline-up-swings in the Dance of the paper Lords ! Everything is possible...and that is new ! Or isn't it...South Sea...Tulips...bulbsbubbles.

Liked the friday POO-move, very, very much ! Is he (POO) derivatable by the JPM/C lords of fire ? I doubt it.

But at present, it is not only, part of the globe that is going under...it is happening in concert (US/Europ/Asia). Weakening all over and no possibility for compensation.

And let me put it this way : Gibson paradox or not...as long as homo economicus isn't able to find a way to live with interest rates of about 2% or 3% (maximum)...Permanent Currency Depreciation (cancer), will remain on the order of the day and severe global unbalancing will be increasingly disturbing. No, not the Goldstandard option again, but all future virtuality must and can only be referred to that one and only Pemanent Gold Valuation. No sign of any alternative yet to be detected ! Or did I miss something ?

Heard a new term yesterday, at least new to me.
On CNBC they were using "perceived value ratio of 14 to 1." Or "early 2002 perceived value ratio of 10 to 1."

What happened to P/E or Price Earnings Ratio?

http://www.cnn.com/2001/CAREER/trends/09/06/china.trade.jobs/index.html This study found between October 2000 and April 30 this year, 80 U.S. corporations have announced intentions to head for China, and they feel the actual number may be double that.

http://www.gold-eagle.com/gold_digest_01/hamilton091001.htmlHere's Zelotes' entire JPM derivative article, what a yeoman's work this guy does, he gets 5 stars in my book!

Yesterday I found myself going through the day thinking "Is this the day the wheels come off?" And it seemed to be "Maybe, but when the day comes, they're ALL coming off together."

I think Greenspan's view of his historical role will be to congratulate himself on how long he kept an impossible Ponzi situation going, with the tools (psychological leverage in a world of gambling derivs) available.

1998 is when they took one bolt off of each remaining wheel and "fixed" the LTCM wheel. Now they're down to about one bolt holding on each wheel. When one blows, they'll all pop. Kee-rash!

OF COURSE, they'll manipulate as long as they can one of the easier-leveraged psychological indicators: gold. (Using "throwaway" institutional shells like JPM. Same in banking: FDIC. Housing: FNM) Controlling POG is just part of the "bigger picture", until it isn't possible anymore.

My fuzzy-minded question of the morning is: How does FOA's paper gold market breakdown happen? Not, apparently, by a preceding POG-spike, according to his timeline of events. Sounds like a sheer "physical" failure.

Is he speaking of derivative-writers like JPM, Deutschbank? Gold producing ndustry-related markets like LBMA? Or "consumer" US gambler type market like Comex? What is the meltdown path for each of those? (And WHO is writing the paper calls on something like Comex? And WHO is supplying the needed physical to keep it delivering when called to?) Things about market mechanics I just haven't gotten into my memory, even after two years reading here.

I agree that liquidations are causing additional forced selling by the funds to raise capital. This is going to begin as a trickle and end with an avalanche. All of the real stock "buyers" must still be on Labor Day vacation.

One brief appearance by a bear fund pundit showed a 23% increase since Jan 1st. Did you catch the talking head who was an expert on Funds whose favorite was Janus and was very critical of another Wired Fund? The "dog" fund had lost 32% value since the beginning of the year but Janus has only lost 25%. Give me a break.

The only thing stupider was the female financial analyst still touting dollar cost averaging in this bear market. A close second are those that recommend you consolidate your non collateralized credit card bills by taking a tax deductible second on your house where the banksters can lay claim to your real estate. Dumb, dum, and dummer.

I also noticed that "the bond babe's bio" mysteriously disappeared from the CNBC WEB site. Some talking heads headed for the bone pile.

The only commentator that I pay attention to is Chicago CBOT Rick. His bio confirms that unlike the others, he has been there and done that. In fact he is still a member of CBOT and has been involved as a VP with Gold trading in his past although I do think he would be fired if he touted PM's too much now. If the others teleprompter's fail, they babble like those analysts that keep assuring everyone that the markets have reached their bottom. I think that if a PM oriented network came along to compete with these equity types, it would out rate the competition similar to how Fox News Channel has buried CNN and all of the others in the viewer ratings.

Get rid of those equity based 401K's and get into physical PM's because it is going to get a lot worse and may not get any better for a long, long time.

BR549

I got a letter from the US Mint Dept. of Treasury about the gold reclassifications via Sen Grassley's office

They answer 14 questions. They are as follows

1. How much total gold is owned and held by the US Treasury?
2. Where is this US Treasury gold physically located?
3. Has the amount of gold owned and held by the US Treasury Dept. changed much throughout the years?
4. Where are these gold coins manufactured
5. If gold coins are being manufactured and sold why isn't the balance of the Treasury gold being more rapidly depleted?
6. How much US Mint-purchased gold makes up the balance of gold stored at West Point?
7.Could you describe in more detail how the "working stock" and "replacement" gold works?
8. How does the Mint account for this activity?
9. Has the Mint changed its accounting treatment of gold?
10. Then what's changed?
11. What did you change in your reporting to FMS?
12. How does FMS fit into this?
13.Why has the gold at West Point been reclassified? Is this gold still owned by the US government? If not, what is the authority for its having left the possession of the US
government? Whose gold is it now? What has the US received for it?
14. What is being done to avoid this confusion in the future?

If anyone wants to see what they say I will type out the answer they give. It is to long to put down on the forum all at once.

Also, it looks like the US Mint have sold out of 1oz proofs of gold and silver dollars according to their no longer available items.

Was your letter from the mint signed by John P. Mitchell?
And was a form letter entitled " Overview of Accounting Treatment of U.S. Gold" attached? I received this same stuff from Rep Joe Skeen (NM)in response to my questions. Looks like a lot of us are asking what's going on, so they printed up a convenient set of answers to send to everyone.Personally, I don't know why any custodial service would have any knowledge of who owns the stuff they are guarding.They simply hold the gold for the Treasury(who are the ones with the knowledge of who owns it.
Regards, Gene

My letter was signed by Lorinda Daniel, Dir. of Policy and Legislative Affairs US Mint. The title of the attached information was the same as yours "Overview of Accounting Treatment of US Gold"

May I suggest ORO,09/27/00,#37697,good stuff about the bankers' dilemma,especially in the area of gold commitments to be delivered upon.

http://www.ustreas.gov/opc/opc0084.html
According to the Treasury-- "On March 15, 2001, in response to a lawsuit initiated by Mr. Reginald Howe, the U.S. Attorney's office in Boston filed a motion to dismiss. Mr. Howe's complaint alleges that the Exchange Stabilization Fund (ESF) has been used over the past several years to manipulate the price of gold.
The ESF has not been used to manipulate gold prices. In fact, the ESF has not held gold since 1978. It does not engage in any transactions in the market for any metal such as gold, either in spot markets or in any of its various derivative forms. The holdings of the ESF consist exclusively of foreign currency (euros and yen), Special Drawing Rights (SDRs) and dollars. These assets are reflected in weekly press releases that are indexed in our Topical Readings of Selected Treasury Documents About International Reserve Positions. The press release also reports information about Federal Reserve holdings of foreign exchange, Treasury holdings of gold and the U.S. reserve position in the IMF, none of which are ESF assets. The ESF is audited annually and its financial statements are provided monthly to the Congress. We would like to emphasize that the Treasury Department does not seek to manipulate the price of gold or any other metal by intervening in or otherwise interfering with the market."

Question #1: Where are these ESF audit reports since the ESF is audited annually and its financial statements are provided monthly to the Congress? I cannot find them.

Question #2: There has been a report once each week for "Topical Readings of Selected Treasury Documents About International Reserve Positions" Why did these reports stop as of July 10,2001?

Question #3: Why was it necessary for The Treasury to issue Gold Certificates and SDR Certificates unless it was for the specific purpose of manipulating and selling the title to physical Gold?

Let' see if they have the answers to these questions already pre-printed.

Regards,

BR549

http://www.usagold.com/TaylorBatraCrash.htmlI've been thinking lately about where the typical investor out there might invest his or her hard earned money once the realization hits home that we are in a primary bear market -- and that primary bear markets are quite a different animals than primary bull markets. To wit. . .yesterday's reaction to the unemployment numbers. In a bull market an increase on that level would have been seen as a temporary glitch, nothing to really worry about. The market would have hiccupped, righted itself and started higher. How many times did we see that happen during the bull run of the 1990s? The pundits would have found a reason for it, but the real reason would have been that we were in a " primary bull market" and nothing stops the bull when it wants to run. A primary "Bear Market" is a totally different animal and produces the same consistency in response only NEGATIVE. So-so news is taken as discomforting; discomforting as painful; painful as very bad; very bad as disastrous; disastrous as the end (as in stick a fork in it). And good news? There's no such thing as good news in a primary bear market -- only bad news dressed up as good to satiate the public.

I was surprised the other day to have a potential gold investor, seemingly sophisticated, explain to me that before 10 months were up, the bull would be on the run again on Wall Street. All the terrible things that have happened over the past year and a half will have been wiped away like waking up from a bad dream. I didn't have the heart (or the time) to argue with this individual. I begged off but what I should have said is that the average bear market in stocks lasts 12 to 15 years; that bear markets tend to affect the whole economy; and, that once the bear flashes his claws, he is very difficult to distract from his mission -- which is to destroy capital like nothing most invesotrs have ever experienced before. Never make eye contact with the bear, back away slowly and speak soothingly. . .or become the bear's lunch. It's not a matter of waking up from the dream; it's a matter of living through it and coming out the other side still alive and kicking (financially that is).

So here's the Investment Scorecard as I see it Short & Sweet:

Stocks: The bear has only begun to do its work. Earnings are still way out of kilter reflecting a market that still has a long ways to go on the downside. (See Randy's charts at the Golden Chalkboard. It's only just begun.) Keep in mind that as the economy softens, profits and earnings will weaken further and the bear will claw ever deeper into stock values. Stock are still dangerously over-valued even after the most recent corrections. They could half again from here. If the dollar breaks, the correction could turn into a rout as foreign investors playing stocks as a proxy for the dollar head for the exits. Don't believe Wall Street when it says we have reached "capitulation" and now is the time to dive back in. Capitulation will come when historic earnings levels are well below or near parity with historic lows and not before. When all hope is lost, then capitulation will spike stocks to their final low. The current cry that "capitulation" has inaugurated the next leg up is the same argument as the New Paradigm (earnings and valuations no longer matter, etc.) only using a new vocabulary. Don't believe it. Beyond these traditional considerations, there is the wholly new presence (to bear markets) of massive one-way derivative bets that, when un-wound, could unleash the grizzly -- and bring down the economy in a nightmarish crash that will be seen as a prototype, a bear of a different scope and dimension, just as margin selling (a much tamer version of leverage) became the grizzly of the 1929 Crash.

Bonds: The bond market rally -- part a reflection of stock market weakness, part a reflection of the strong dollar, and part a response to the fictional budget surplus -- is about to end according to widely disseminated Bloomberg article this morning. "The bond market is a laggard this year of the deteriorating fiscal backdrop," says Barclay's Gemma Wright. The article rightly points out the threat of a return to the bad old days of government deficits, monetizing debt and increased taxation could scrap the government bond buy-back program and tank the bond market. The government offered a market for bonds when it ran a surplus, it can't do that if its back borrowing to the tune of $100 billion per year. We have said repeatedly here and in News & Views that the government never really ran a surplus; now the truth is becoming apparent. The reality hasn't changed but the perception has. And in the bond market perception is everything. On top of all this, you have the bond market's worst nightmare returning in the form of inflation. The bear is not only loose in the stock market, it is loose and angry in the bond market. The bond market will not be the place to be over the next few years, and if you have to be there, make sure you hedge that bet with gold. (See "Savings" below)

Real Estate: There's a glimmer of hope here (as I alluded to about a week ago in the form of retirement or second and third homes, resort property) but that's all. Commerical real estate will continue to suffer from the socio-economic consequences of computerization and down-sizing. There hasn't been a skyscraper built in downtown Denver since the 1970s. How about your community? Residential appears a better bet than commercial but how many homes can an individual own. To buy a house, one needs to afford the down payment. With tax rates where they are and young people's earning power at risk in this economy, where are the starter home buyers going to come from to bump homeowners to the next level? We hope it will happen. But, with the bear on the loose, I'd be careful. I like real estate better than paper, but this has to played close to the vest.

Exotics: You can always make money on an exotic bet of one kind or another; but it's just as easy to lose as win. A flip of the coin, to be sure. Don't put too many eggs in this basket.

Own your own business: There's a story in this morning's Denver Post about a woman who had herself fired at a Chicago dot-com in order to receive enough severance pay to finance start-up -- a company which hosts internet sites for non-profit companies. She made an interesing comment and perhaps the first positive and intelligent response I've seen to the gathering economic gloom. "This is the best time to start a business," she said. "Look at evolution. When things get tough, the dinosaurs all died off but the small mammals did really well. It's really the same model." This is the diametric opposite of the New Paradigm model which featured very large organizations very skilled at spending money, but utter failures at making it. While many of the New Paradigm entrepeneurs made money by putting distance between themselves and their investors' money, this budding entrepeneur will be attempting to actually make a profit. We wish her well, and anyone else who decides to go this risky road. Probably one out of ten small business -- or maybe worse -- survives its first three years, so go into it with eyes open, your goals attainable, and checkbook ready (It's going to cost you.) I think her description of the current economy fits it like a glove. And yes, I do consider a small business an investment -- in the present as well as the future.

Savings: Here we get to the place where most investors are going to end up. The most logical alternative in an economy like this is to basically sit it out. Save. Wait for events to take their course. Since a bear market, as I mentioned earlier can last longer than most anticipate, you could find a great deal of psychological and financial comfort in this alternative. The big goal is to keep your money while others are losing theirs. No one knows if this current economic situation will resolve itself in deflation or inflation. I include gold in the savings category, because it is essentially a cash account/savings the greatest attribute of which is its standing as an asset of last resort which carries with it no contingent liability. That's why central banks hold it on their balance sheets and that's why you should carry in on your. Gold is the ultimate savings vehicle. Cash works but it can disappear in an inflationary conflagration and it can be put under lock and key (that is, unavailable to you -- as it was in the 1930s when the banks closed) or defaulted upon if deflation scours the financial landscape. If you have cash savings in bank instruments (like Certified Deposits, etc), a bad economy could cause borrowers to default, the bank in turn to slide into trouble at which time it might then default on your savings vehicle. Though corporate and government paper -- which forms the basis of many money market funds -- holds a smaller risk of default (many say it will be the last to go), it can be erode very quickly if inflation were to rear its ugly head, a distinct possibility and one alluded to recently by Nobel economist Milton Friedman. Gold is the only asset -- and the most liquid asset -- that protects the investor against both inflation and deflation no matter in which order they arrive. Just what type of gold you should own is a question that can be answered in a short conversation with your Centennial Precious Metals/USAGOLD representative. We invite your inquiry. Our very experienced staff can be a great help and comport to the beginning gold investor. Gold is what we do -- and nothing else.

Inflationary Depression: The more I study the situation, and the more I see of the unfolding economic saga (especially over the last few weeks), the more I believe that we are in for a long and protracted period stagflationary consequences in the world economy. We could slide off the razor's edge into either inflation or deflation, but I think the economist closest to a real understanding of what we are up against is Dr. Ravi Batra. Here is what he said in an interview in August of 1999. I encourage our readers to read that whole interview again (Linked at the top) keeping in mind it was concluded long before the signs began to manifest themselves in reality. The mainstream press criticized Batra when he made this forecast, but, as it turns out, he was well ahead of his counterparts in understanding the forces at work in this economy.

Said Dr. Batra:

. . .[D]ebt created prosperity cannot last forever. So we have gotten into this mess by: First, allowing wages to lag behind productivity and secondly by artificially bolstering
demand by creating a tremendous amount of debt. All we have done is simply postponed the problem. And, since this postponement has been going on for many years, the mess is potentially catastrophic. . . . .

Normally we should have a deflationary depression. In fact in all of U.S. history, we have never had an inflationary depression. But I think the future one will be an exception and there are two or three reasons why I think so. First of all let's look at all the economies that have borrowed heavily from abroad and are now in turmoil, like the Asian Tigers and Brazil or Russia. When the trouble started, their currencies collapsed, and not only their stock prices fell, but their product prices and unemployment both went up. So they have an inflationary recession right now. The reason they have not had a depression is because the U.S. economy has remained strong, so they have been able to export and keep their economies going. But it is inflationary in nature, which is the exception to what used to happen in the past. The reason why it is inflationary is that their currencies have collapsed. And that is what I fear for the U.S. dollar as well. I fear the U.S. dollar will fall very sharply once the nightmare hits the U.S. End Quote

And. . .

"I have a number of investment ideas in my book, but what I
am saying is to stay away from any long term investment except gold." End Quote

I am not certain that Dr. Batra's outcome is the most likely one. But the whiff of serious systemic risk can be detected everywhere one turns. Anything is possible. However, Batra makes a great deal of sense. I encourage all to read the Gilded Opinion piece again if you already have; and study it thoroughly if you are reading it for the first time. I think you will be impressed with his practical understanding of the economy we live in as well as his insight and foresight.

I hope this gives you something to think about this weekend, especially those who have spent this weekend searching the internet for some answers in an investment milieu that currently spawns nothing but questions. You've landed in the right place. I think you will find USAGOLD amenable to your needs in these uncertain times. It is a clean, well-lighted place for those seeking answers no more mainstream press pablum. You will find much to consider here at our Fourm from our fine group of posters, to our daily market reports and Gilded Opinion section. And then there's the Gold Trail . . . not to be missed. We invite you to make this web site and Centennial Precious Metals/USAGOLD your information headquarters for the interim.

BOOKMARK IT, MY FELLOW GOLDMEISTER!

I read the Hamilton piece courtesy of the link you provided. I now, no longer have any confidence in the "system" as you so aptly put it. The essay is not so much pertaining to gold directly as it does to the financial architecture of the world we live in. ANYBODY WHO HAS A BUCK TO INVEST OR WHO HAS A FAMILY HAD BETTER READ THIS ESSAY BY ADAM HAMILTON.

So, Sir auspec, may I join your table conversation?

http://www.deadbullweekly.com/DowNasdaqWeek.html
Many important support levels have been pierced,especially in last week's carnage.After a long hold-out,the S&P and the Dow sure look shaky.

That being said,the authorities are looking at the same charts.I feel there will be some sort of rescue mission launched in the next few weeks,maybe the capital gains tax for example.

The slow motion train wreck seems to be gathering speed.The currency markets are gyrating wildly,however,gold and oil seem to be on their own little island of stability.One wonders how long that can last.

Cominco has cut back on Silver production at their Trail smelter this year . They are shut down this month so that they can sell their surplus electricity. Trail normally produces about 12 million ozs per year. They won't produce that number this year. Further cutbacks are Possible in the lead zinc business as inventory is increasing while the world economies are contracting.(sourced: silver-investor.com)

http://www.usagold.com/onlinestore/special.html

Gold Today!

Because you never know what tomorrow will bring.

In this global marketplace, an event on the far side of the world (even while you sleep or play) can adversely affect the performance-credibility of your commercial positions and financial portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its reliable "form and function" -- a steadfast financial commodity immune to the contagious collapses to which all financial paper is prone.

Thanks for the reference to ORO's #37697 9-27-00, much appreciative of this particular ORO piece {as well as any others suggested for read or reread, in the future}. So the banking system with its nuclear derivatives is unable to withstand a mere hiccup, w/o "a panic into tangibles"? Clearly an accident waiting to happen.

"....may I join your table conversation?"
C.M., you've been heading up this conversation all along, no reason to stop now.
Off to a wedding ceremony, hope to get a good look at the exchanged bands; yellow or flush with platinum?

http://www.washingtonpost.com/wp-dyn/articles/A54633-2001Sep6.html
Snippit:

Japan's gross domestic product declined at an annual rate of 3.2 percent in the April-June quarter, affirming widespread predictions among private economists that the nation's economy is sinking into third recession in a decade.

The simultaneous arrival of bad news and surge in market pessimism in Japan, the European Union and the United States, where markets yesterday hit their lowest levels since April, were the latest manifestation of a worldwide economic slowdown.

Black Blade: Looks "Grim." Europe and the US are in Recession. As we approach the third quarter "Confession Season" will wait for word on ever lower corporate earnings and more layoffs. PMs are still cheap insurance for the approaching "Perfect Storm."

Snippit:

SALT LAKE CITY, Sept 7 (Reuters) - Federal Reserve Bank of San Francisco President Robert Parry said on Friday the U.S. economy still faced the risk of further weakness and the latest government jobs report showed unemployment rising at a ``very significant rate.'' The Fed president, who is currently not a voter on the Fed's rate-setting Federal Open Market Committee, said sliding stocks, slower global growth and a fall in consumer confidence could undermine the consumer spending that has so far kept the economy out of recession. ``What are the risks on the road ahead? One is that consumers might pull in their horns more than they have,'' he said. ``Consumer spending has held up reasonably well. Indeed, it's the main reason the economy has not slipped into recession.''

Black Blade; Now wait for the third quarter "Confession Season" as companies report lower earnings and prospects. The FED is likely to cut interest rates again in yet another unprecedented consecutive panicked attempt to save the faltering US economy. In a word - "GRIM"

http://www.mips1.net/MGFin.nsf/Current/4225685F0043D37A42256AC00046F1E5?OpenDocument&ByLine=Mark+ReynoldsSnippet:
Shares in Anglo American tumbled more than 6% as investors sold off their stock after the company posted weaker than expected interim results earlier today. The company delivered headline profit of $884m, down 7% on last years figures . . . with the 1AGLBP warrant the worst casualty dropping as much as 83%.
------------------------------------------------------------
One can't blame Anglo for "seizing the day" during this window of opportunity with the Barrick (potential rival) merger deal not being bedded down until November & given the current exchange rate. If I was a mining co, would I want to merge with this co? . . . no thanks - Netking.

Mr. O'Neil is saying in China today that the US is emerging from a "slowdown". We very well might "emerge" soon and gain steam but, who is this guy kidding? He sounds like a stockbroker.

http://biz.yahoo.com/rb/010908/business_economy_outlook_nabe_dc_1.html
Snippit:

NEW YORK (Reuters) - Sliding stock markets, rising U.S. unemployment and spreading global economic gloom are prompting economists to reassess their forecasts of U.S. economic growth and Federal Reserve interest rate cuts. The darkening economic outlook, in sharp contrast to the optimism seen just a year ago, provides the backdrop to the annual meeting of the National Association of Business Economists (NABE) in New York that starts on Sunday.

Friday's sour report showing a spike up in the U.S. unemployment rate in August was the catalyst for many prominent Wall Street economists to rejigger their forecasts for growth and Fed rate policy as hopes fade for a second half 2001 rebound in the world's largest economy. ``Hope for a second half recovery is rapidly fading,'' economists at Lehman Brothers wrote in a report on Friday.

Black Blade: I hear "Taps" playing in the background. It appears that it will get much worse before it gets before. Keep loading up the "Golden" lifeboats.

http://biz.yahoo.com/rb/010908/business_economy_profits_dc_1.html
Snippit:

NEW YORK (Reuters) - Investors waiting for a rebound in corporate profits to help bolster the tumbling stock market had better not hold their breath: Corporate America's earnings woes will be around for at least the rest of the year. A surge in the U.S. unemployment rate in August to its highest level in almost four years on Friday sent a tremor through Wall Street, sparking renewed concern that consumer spending will slide and further cut corporate profits.

With the economy barely growing and the once robust technology sector still struggling with the aftermath of the dot-com and telecom implosion, companies will have a hard time wringing out profits in the months ahead, analysts said. ``There's no sign of light at the end of the profits recession tunnel,'' said Hugh Johnson, chief investment officer at First Albany Corp. ``The visibility is just thick fog.''

Black Blade: PM portfolio insurance is required in times like these. The economic outlook is at best "Grim." The global economy is crashing through the floorboards. There is no sign that the economy will improve; yet signs abound at every turn that the economy will deteriorate much further. Hang on for the ride.

http://news.bbc.co.uk/hi/english/business/newsid_1530000/1530731.stmSnippet:

- US President George W Bush says he is deeply concerned by news that unemployment in the United States has reached a four-year high

- Mr Bush said: "The slowdown is real and is affecting too many lives. I want the American people to know we're deeply concerned about the unemployment rates and we intend to do something about it."

- Democrats said the figures were evidence of economic mismanagement by Mr Bush's administration

- The figures surprised economists, almost all of whom had been expecting only a marginal rise from July's 4.5%.

- The jobless rate was the highest seen in the United States since September 1997 and raises the prospect of another emergency cut in interest rates in an attempt to keep the country out of recession . . .

http://biz.yahoo.com/rb/010908/business_markets_stocks_waitinggame_dc_1.html
Snippit:

NEW YORK (Reuters) - The framework for a stock market recovery is in place, but Wall Street is stuck in the basement and better corporate profits are the only way up. Wall Street pros say equities will remain second-class assets -- despite lower energy prices, smaller inventories of capital equipment, almost nonexistent inflation, tax rebates, strong new home sales and consumers who keep flocking to stores - until they see signs of sustainable earnings growth. While the Federal Reserve has chopped interest rates seven times this year to jump-start the lagging U.S. economy, and even hinted more cuts may come, investors still shun stocks.

``Investors are scared to death,'' said Phil Orlando, chief investment officer for Value Line Asset Management, which oversees $6 billion. ``They're saying 'I'm not going to buy a single more share until I see a return to corporate profits.''

Black Blade: "Grim" news at every turn. No real positive news anywhere.

Notice how the Democrats are blaming Bush and the Republicans for the problems in the economy. No one seems to mention that the government is still operating under the Clinton-Gore budget for the fiscal year ending at the end of October. In effect they are blaming themselves for their own fiscal policy. Truly bizarre.

just wait until Oct/Nov when everybody starts looking for money to buy Christmas for their kids. Any money the average guy has left in the markets will disappear under the tree for what may be the last decent Christmas for a while.

Black Blade - On accountability & blame: I was watching a news feature on TV the other night about Japan . . . they said suicide rates are going up through the roof there and it's a real problem.

They said one of the problems was Japanese executives inability to deal with self accountability and 'key performance indicators' not meeting target on a micro & macro level, they took this as a "personal failure" in many cases and could not cope with it.
------------------------------------------------------------
Darkhorse - Yes, it will really "hit the fan" by the years end during the traditional Christmas season spend up. The household debt levels are up in the "nimbo stratus zone", people will be concerned about job security & will be starting to use spare money to reduce debt. This situation is going to be self perpetuating (aka 'Catch 22').

- Netking

Beautiful day today. I took a bike ride today around the subdivision which just got expanded and connected to a local park. The football field at the local park was crowded with....5 year olds, all in bright new uniforms. Too little to pass the ball, all the plays were runs. The linemen had to be reminded to not suck their thumbs. Dozens of little 5 year old girls with uniforms and pom poms doing cheers on the side lines. School Flags, officials, and coaches, families and a hot dog stand. Off in separate areas were the 10 year olds with bright new uniforms, massive shoulder pads and helmits waiting their turn. Lots of new SUV's. This is not an exclusive area. Can't get much more American Dream. Not a clue as to what's coming.

In the computer age when all global currencies are but intantaneously transferrable fiat digital entries, that currency which can hold its relative value for at least 3 days and is the least expensive to utilize will hold top honors.

The prospect of negative interest rates is not ridiculous in a purely fiat world. Here we have real people being paid to utilize certain digital formats in order to channel the flow of business (the creation of profit making circumstance)through certain banking establishments where settlement is registered. It is the flow of fiat currency that will generate fees for the banks.

If the fiat currency fees can be converted quickly enough into reserve real assets. The accumulation of such assets serve as the basis for growth and distribution of dividends to bank shareholders. These dividends would be payable in whatever form of fiat the shareholder desires. In the lightning fast world of business. todays hero fiat may be tomorrows dog.

The old paradigm of positive interest rates made sense when business was conducted with currency backed by hard assets. Currency that the banks actually wanted back because it held value in and of itself.

Those days are long behind us.

Let's all wake up and smell the coffee.

The World is on the verge of economic upheaval. Equities markets around the World are crashing with no relief in sight. The World is also in the early stages of a real and serious energy crisis that will likely destroy much of the Global economy. In the US that day is upon us.

In the US, the energy crisis is not limited to California. The California energy crisis will extend to other parts of the country. Evidence suggests that Europe is out of spare energy capacity. Even Brazil is in a severe energy crisis with mandated conservation and threats of rolling blackouts. Russia coped with failing natural gas supplies this past winter by shutting off supply to millions of homes during one of the coldest winters on record. Blackouts and energy shortages in most of the rest of the World are so common that that they are not newsworthy. In emerging countries blackouts occur like clockwork.

The free market will eventually solve the energy crisis one way or another, but it works in a brutal cutthroat way. It could take a lot of time to accomplish and the destruction it does in the meantime could be devastating. The economy depends on "Cheap Energy," however, "Cheap Energy" is likely a thing of the past. According to Simmons and Company Intl. To solve the energy crisis it will take an expansion of the entire energy complex by around 30% and at the same time the World's entire energy infrastructure that allows industry to "affordably" use over 180 millions bbl of oil/day equivalent must be rebuilt or upgraded. For reference the World consumes 77 million bbl oil/day.

There are some "Grim" facts that suggest most of the World's existing oil and gas basins are getting long in the tooth. These basins are experiencing rates of decline so rapid that the aggressive expansion of smaller fields will never be able to make up for the shortfall of energy. We also lack the drill rigs and the manpower to fight this decline with any significant effect. The energy crisis resulted in higher energy costs and that triggered this current economic Recession. Unfortunately we simply do not have the resources or political will to increase our energy capacity, refining capacity, or improve our energy infrastructure. The only logical conclusion is that this Recession will get much worse and probably will rival that of the 1970's - even be comparable to the Great Depression. In is in a word - "Grim."

- Black Blade
View Yesterday's Discussion.

You : ...currency backed by hard assets...

There is sooooo much to say about IR . Soooooo many things have gone * completely * wrong on this (IR) very vital Indicator ! Allow me an attempt to synthesise.

IRs have only 2 indicative functions :

1/ Indicate the future purchasing power of the currency.
2/ Indicate the solvency of the debtor.

Voila...the conclusions are very simple : Low IRs indicate your confidence of strong purchasing power (future) of the currency and signal your trust in the solvency of your debtor.

No wonder that everything is done to keep these IRs :DOWN !
THIS HAS NOTHING - NOTHING - NOTHING - TO DO WITH ECONOMIC ACTIVITY !!!!!!!!!! (sorry)

Low and declining IRs are under normal (natural) conditions, signaling/indicating, Trust and Natural (ritme) Expansive Growth !!!

Again : The "Flation"- blahblahblah is totally secundary to the all circumvent Permanent Currency Depreciation !
The real dynamics that are taking place are not at all corresponding with the economic theories as such.
What is really happening is much more vulgar than what all these timeconsuming, nice theories are pretending !

Again : IRs, for the past 30 years, have been managed BLATANTLY ! The Permanent Fraud of showing the wrong picture. Only possible with all collectivities, producing, a never ending amount of confetti, one way or another.

DEBT was only capable of creating much more DEBT. And it takes ever more DEBT to keep things going and avoid total financial collapse !!!! The confetti manufacturers have only one worry : KEEP IT ALL HIDDEN ! And we all agree, because it is so much fun.

There is no quick fix for this old game, people like and keep on playing. We just want and do play permanent overtime. We managed to sail through the 1980's IRs explosion/signal. The next explosion is most probably FATAL ! Japanese ZERO RATES, didn't re-start the machine so far. This zero-IR is hiding the fact that everything has already collapsed. It is exactly the opposite of indicating that future purchasing power will be great and that all debtors are solvent and will pay it all back !!!!!

That is the main reason that GOLD **** MUST **** remain unknown ! How are you going to tell all the folks that it Alice is not living in Wonderland anymore ? Hard, harder, hardest, to keep quiet and HOPE, it will go away... soon.

Sorry for having shouted that loud on such a quiet sunday morning. Please do enjoy your coffee, Sir Henri.

http://www.israelnationalnews.com/news.php3?id=9483It appears to be back to "business as usual" in the M.E. with reports just in indicating another bombing, this time in the crowded Nahariya railway station. Now a wait for the reprisal . . . this region has become so volatile it could "blow" at any time.

Important : Academics, Professors, Economist, are pointing to the " Perfect IR Management " ! They let us know, that we don't need Gold anymore in a monetary function. IRs are at war with Gold !

Nothing structural changed in economics from the ATH - IRs of the 1980-s. The only thing that changed was a concerted global-management- agreement on IRs. It worked ! POG, declined in function of its commodity laws and IRs declined globally. Why did this had to be realized ?

IRs are the rent-price of DEBT. They wanted to dike in the uncontrollable growth of debt. All IRs are added to the existing mountains of existing and accumulating debt. Lowering IRs, brakes the Debt-Growth and provides a tool to roll it over, with the idea behind it that economic growth will become greater than debt growth, one day ! That's the mechanical dynamic behind it. Declining POG was necessary to make it happen.

Japan was the first to reach the valuation mania bubble top. It is also the first to reach "zero IRs". In other words : Come and borrow Yen-confetti for free. The future purchasing power is guaranteed (zero IRs) and the Yen-Manufacturer is 100% solvent ! Jihaaaa
Why don't we all borrow Yen and start a business. This Yen with zero IR must be at the hight of his strength and can only weaken, so that it is easier to pay him back, when the business is succesfull ? Logical, isn't it ?

The same fate, awaits the US$. A continued decline in $-IR (ST) suggests (SUG-GES-TS : !!!) that this currency will hold its purchasing power and that everything is all right with the $-debtors and their debt. Yeah, yeah, sure...you will get your money back ! Don't worry ! And if I was not so sure about this, I would ask you a much higher rentprice (IR) for this money to cover all risks.

Voila, that is where we are now. Low, lower, lowest IRs and...nobody wants that money (or is it debt) anymore !!!!!
Strange, isn't it ! What is wrong with you, good people ?
Don't you trust us ?

Debt-Saturation is as trying to solve as much sugar as possible into a glass of water. There is a limit and than you have to drink it. Debt must default or the debt-growth must be forced to continue by heating the water (lower IRs) and enhancing the solubility of the sugar.

pauze

What's next, after low or zero IRs ? Who wants to hold any kind of IR-generating-debt-paper at these low to very low returns ? And do these Debt-Holders have a choice ? Hey, you, baby-boomers, overthere ? What is it that made you so confident about the future purchasing power of that debt-paper ? Who said that you will be paid back as contracted ?
And if your currency is as strong as you think that the IR's indicate...why do these oil-barrons, want more of it for the same barril ?

What will happen to all debt if suddenly the declining IR-trend, breaks and reverses ?
The utmost importance of IR-lows + Gold (POG) enforcement, does explain the JPM/C derivative situation !
In a Kondratieff-winter-economy, you can't afford to manage these IRs back up again. That would guarantee total collapse. (IR and economy are not related anymore).
Highering IRs would increase, immediately the debt-growth on top of the declining economy and lower purchasing power with negative effect on confidence for the consumer, resulting in a further contraction-reflex. And how can IRs be up-managed without an increasing POG, that should ultimately signal that something is very wrong, systemically.

Is it wrong to conclude that the IR-decline-voyage is indicating that the managers ran out of inspiration ?
What about all these "savers" (consumers),who are holding debt-instruments as an apple for that rainy day ? A rather painfull (catch 22) situation. Consume or add to debt ! No way out or in between ?

Now that the last of the standing stockmarkets, risks to implode...IR-focus will become more acute for confetti holders. That last alternative to stay ahead of PCD is slowly evaporating. W're left with ardent hopes that the economy will re-start, soon. But the full amount of sugar (debt) remains in the glass of water. How can we add more water (confetti) ? How can we heat (lower IRs) up the water ? Is it wise to sell appreciated bonds and call CPM, before it gets dark ?

Debt-Paper is 10 times bigger than stockmarket-paper. If oil should corner gold...hell breaks loose ! Dancing on the vulcano crater is indeed great fun.

My hat is off to you sir and Great Thanks for the energy you put into this forum

Yesterday I went to our local bullion dealer to buy some silver bullion. The fellow had some interesting tales to tell re silver supply. Bought a 50 ozer and exchanged some views and news of anecdotal nature.

I thought for a fellow in his business he was very candid about his knowledge of the local markets. For example, he has a man coming in once a week, usually Saturday who buys 20 oz of Ag Maples and sells them all for between $20 and $30 ea. Last year he, (the bullion dealer) continued and said that he bought $100,000.00 in sterling scrap. He says this year that he has only been able to purchase "a small fraction of this".
His opinion about this: "people are hoarding". This implies either some understanding of spot prices by the public and the supply problems thereof or, more likely, a glimmer of the BIG bust coming.

As I said in an earlier post, my visits with various collectibles shops in various areas of Ontario has revealed great demand for sterling and drastically reduced supplies. Nobody has seen much sterling to buy this year but lotsa dealers have been looking. So far, my dealer has good supplies of gold and silver bullion.
All a FWIW, of course.

A good friend of ours, who is I might add a great person but not the sharpest pencil in the box, ASKED ME the other
day about whether silver is a good investment. She only knew that she felt she should buy some, when I asked her how she got onto that investment idea. If that is not the classic fall hording inate behavior described by Davidson et al I don't know what is. She wasn't interested in silver her whole life until two weeks ago. Funny huh?

Thanks to all posters on this board for their great efforts to enlighten all to "the Diogenes position"., the position of honesty, truth and true value.
And thanks to you Centennial for yesterday's delivery...there's nothing like gold in hand.

From Bob Chapman's International Forecaster @ LeMetropole Cafe:
If you are wondering how demi-god Alan Greenspan created bubbles in Nasdaq, debt, the markets, real estate and derivatives, listen to this. He increased M3 by 9.19% in 1997, 11.28% in 1998, 8.76% in 1999, 8.54% in 2000 and in the first 8 months of 2001, 21.5%. This is financial debauchery. The FED, and other elitists want a tech revival and that is the main reason they are throwing money at the economy. The second reason is to keep the real estate and debt bubbles from bursting and to keep consumer spending roaring. We get 25 offers for credit cards a week and now they are phoning offering us $100,000 Platinum lines. The only parallel we can make is 1929-32. Based on that correction the Dow has to go to 6450 or lower. We believe this time it will be much worse, except for the Dillingers� and Nelsons�, most people abided by the law during the last depression. Not today, once unemployment goes up and the last three bubbles break, our major cities will be in chaos. This market is like jell-o. It has no backbone and no ability to rally. Just as in 1929-32 lower interest rates are doing no good and can't when you have bubbles. Look at Japan's zero rates. The result is a 10,300 Nikkei Dow and the bottom is nowhere in sight. Japan has the third largest economy in the world and it's in depression. The morons on CNBC, Wall Street, and in the government just don't get it or they are lying through their teeth. Even the dolts at the IMF say, "if US productivity growth is less than expected, then the stock markets could fall, triggering sharp declines in business investment and private consumption." They say that would cause a global recession, and possibly substantial financial market turbulence including a possible abrupt decline of the dollar. As we know that has already happened. $720 billion in US Treasury paper is held by Japan, the UK, China and Hong Kong and Germany. Do you really think they'll stand still for 20-40% losses? This financial collapse has the earmarks of delivering the same financial chaos as the collapse of the Lombard System, the Hanseatic League, 1923 Weimar German and the 1929-32 crash. The President's Working Group in Financial Markets, known as the Plunge Protection Team, will not stop the deluge. This is the group formed by the elitists in 1987 to manipulate our markets. The final nail in the cross is the derivative bubble, which will decimate world banking, insurance and stock brokerages. There is $150 trillion in derivatives floating around the world with no home and backing. You may find issue with this, but China could use this turmoil to attack the United States, especially if the bulk of our armed forces are fighting in the Middle East or the Balkans. The US is unprepared for a two front war, while civil war is raging throughout America. We hope you are getting the message. As we move up to these events the FED will have no choice but to crank up the printing presses in an attempt to save the system. As banks, brokerage houses and insurance companies, etc. perch on the edge of financial oblivion, the FED will attempt to bail them out, which will leave us with hyperinflation. The dollar will collapse, interest rates on Treasury paper will move back to 20% and gold and silver shares, bullion and coins will head into the stratosphere. Now you can understand why there are major mergers within mining companies controlled by the elitists. They'll be invested there just as you will be. Unfortunately 95% of Americans won't participate, not having a clue to what is going on. END

Comments: Here is much of the rationale for mining mergers, the resource grab. They can't pick up much physical like we do because that will explode/expose the game, but they can pick up miners. thus the shares are leading bullion in price action. They are NOT putting Anglo and Normandy together to have them flushed when POG spikes.

It was discovered about a month ago by David Walker, shipdiving@aol.com, that Norges Bank, the Central Bank of Norway, placed its entire gold reserve of 33.5 tons with the Bank of England for the purpose of loaning it to various institutions, namely the gold manipulation cartel. It was valued at 20% below market value.

As far as we are concerned the merger of AngloGold and Normandy is an expected non-event. We suspect the South African government will be forced in the future to allow Anglo to take over Gold Fields. Barrick after consuming Homestake will take out Newmont and perhaps even Placer. Then Barrick and AngloGold will merge. Then as the colossus is completed gold will miraculously rise again. We believe that will all be accomplished next year.

Yes Sir Belgian the coffee here is fine may I offer you a cup?

Having read your posts, I do not think we dissgree on most of what you have said.

I fully agree gold must remain an unknown...or at least unattached to any given currency "valuation". This is not inconsistent with what A/FOA are advancing. Gold backed currency was part of the old paradigm of the necessity for sovereign govt solvency and balanced "accounting" for the flow of goods and services across borders.

My point (I think) is that under the old paradigm, there are very few sovereign nations that have truly maintained solvency as it used to be described. The rules had to be changed over time to maintain an illusion of solvency where none existed. Rather than create mass financial collapse immediately, the rules were changed slowly and with sleight of hand such that monetary thinking continued down the same path.

Those players who were aware the rules had changed could choose to either continue to play the charade knowing the timing of the revelation (that the idea of govt issued debt is farcical)was going to be very difficult to predict, or cash in their chips while there were still some real assets left in the dealer's bank drawer. Those nations which continued down the path of hard money thinking could only be injured if they bought into the "new" deal.

What is next is the necessary step of permanent currency deflation after an extensive inflationary period...that is if we are to continue the game with the old debt backed currencies.

You are right. No one will wish to hold confetti based debt paper. In a world where govts print currency at will to supply the demands of expanding debt beyond sovereign means to repay, the issue of debt repayment is a matter of jacking up the speed of the printing press and/or lately the expansion of derivative "accounting".

Of what possible credibility is sovereign debt, when it is issued beyond all means to repay. Debt is expanding at rates that far exceed not only real growth, but even potential growth.

There must be a reckoning if only the realization that since 1971 it has only been a sophisticated game. The illusion was maintained using a funhouse set of mirrors that projected assumed real wealth backing on paper instruments. SDR's, SDR certs and the whole derivative paper chase are but secondary and tertiary levels of reflection of the farce.

Deflation necessary to keep the game afloat may be theoretically accomplished without collapse by breaking the zero interest barrier. Absurd? Borrow 10 billion yen from the Japanese govt (a primary suppier of not debt but paper tolls to stimulate growth) and lender of ultimate risk. The terms of the loan are that the money be actually used to fund the chartered growth projects and that only 900 million yen are to be repaid with the proceeds of the chartered project. This is the negative interest rate.

What do they care if the money is repaid as long as the end result is acheived (economic growth). Since it is just paper anyway, if the debt is not repaid the deflationary purpose has been acheived in the non-recirculation of that "loaned" (chartered) currency. People are still using yen but now there are less of them circulating causing the intrinsic value of what remains to be higher when there is net yen demand. This is true even if the loan is repaid.

If you think about it, it is really the same thing as govt subsidizing business. Has this been occuring? Of course.
Did govt subsidize Chrysler corp, the railroads...other too big to fail enterprises like Mexico and Brazil? What did they finance it with? Future taxpayer revenues? Be serious now. If that were true, I would expect a rebate from my govt when Daimler-Benz purchased the rescued entity.

Did the american taxpayer subsidize cheap japanese auto imports that caused chrysler insolvency in the first place? Let's see, I use $ to buy an import, the manufacturer trades those $ for yen sooner or later and either the bank, the Japanese govt, or the manufacturer buys US bonds with the $ earning them 8-10% return/yr. Since the cost of manufacturing the car is recovered as well as sufficient means to retool and expand the factories, the cycle is continued until the cost to the US taxpayer of having bought that cheap import 20 years ago is many multiples of the cost of an American made vehicle. In the process, the american capacity to manufacture was destroyed. Who owns Chrysler now?

But I digress.

The point is that fiat is just that, a tool to facilitate growth and distribute its benefits among those who participate in the adventure. When we place actual intrinsic value upon such a slip of digital accounting we depart from reality. Therin lies the need to convert fiat profits into vehicles that do not have these characteristics...namely gold and other unencumbered assets such as real estate and businesses that generate profit.

In a deflationary environment it may even profit the holder to retain the fiat rather than convert in that the directed function of the negative IR is to deflate the currency which would then appreciate in buying power.

The bad debt which now is being circulated among debt holders can be written into the negative returns to govt such that "solvency" (that point at which the bad debt of the past is fully liquidated) may be recovered.

A negative IR is where a supplier of ultimate resort pays a borrower to utilize this vehicle to instill growth within his own borders. Charity is when a govt issues its fiat to a concern that suses it to stimulate growth in another sovereign economy.

By this reasoning all debt issued to facilitate the growth of Japan or any other Non-US sovereign entity and those $'s paid out to such entities in return on investment should be considered as non-recoverable foreign aid. Since the buyers of the debt instruments purchased them with $'s the original capital was already recovered. Default on the US issued "obligations" is merely a cessation of foreign aid when it becomes apparent that such aid was no longer in the interest of the US.

Instant collapse? I think the Euro-zone folks were actually refering to this as US paper "burning". The lost value to the economies in their (and I assume yours since your moniker identifies you as a euro-zone participant) plan will be recovered by "deflating" the gold paper market and therefore boost the purchasing power of real physical gold held as reserves within your central banking system.

OK yeaah fine I'm all for thaat as I hold physical as well and hope to at least stay even during the tumultous gyrations about to unfold.

Competition for fiat use will take(or has alreadytaken)the form of who offers settlement services for the lowest fees and can retain or even increase the relative purchasing power of their fiat.

The Japanese will apparently be the first to venture into the negative IR fiat arena in an effort to deflate its currency without causing widespread recession. It's an interesting proposal :-) (sorry couldn't resist that one). The Japanese govt will allow you to keep 1 out of every 10 yen you borrow just for the sheer excitement of having your investment needs supplied by their bankers who are paid by a fee structure at market determined rates. Intoxicating. The question is whether they will apply the principle at home alone or attempt to deflate foreign held yen as well.

The Japanese have ventured into this sort of project chartering before in promoting uneeded infrastructure work in Japan that was really only thinly disguised public welfare projects sometimes viewed as uneeded construction projects awarded to certain govt friendly businesses. To be effective in stimulating growth the investment must be into ventures not already plagued by oversupply/overcapacity problems. Can you say inspiration for new innovative technologies?

I think I have not violated the first of your IR indicator functions in that "future purchasing power of the currency" can be read into how quickly the overall currency is gaining in purchasing power through deflation.
I think however the second indicative function you mentioned is a non-starter in a negative interest rate (deflationary) environment. The IR as an indicator of the "solvency of a debtor" is moot in a purely fiat domain where the fiat is supplied by an issuer of infinite "solvency" (govt). It turns the issue of "solvency of the borrower" into a domestic political matter independent of the issuer. The potential "appreciation value" in terms of an increase in purchasing power of the fiat over time is only dependent on the potential of the borrower or user of the fiat to accomplish growth and how quickly the govt can extinguish the precondition debt from the books of its financial institutions in an act of fiat debt destruction (deflation).

Perhaps the govt will take all existing bad debts on the banks books and allow them to start fresh as fee takers only not to be comingled with "investment houses".

The bad debts are written down against the disappearing fiat until parity and beyond is acheived.

As more govts compete for business fiat stashes will ebb and flow across the globe. Why spend inflated money for precious metals holdings now when 20 years down the road you will be able to buy as much with less fiat? Because what matters right now is whethering the immediate fallout from the financial storm of the paradigm change.

OK, so you say immediate deflation can be accomplished by just collapsing all banks and have the govt absorb all bad debt. Nope, when the govt assumes the debt it does not intend to repay it. It intends to write it off over time against fiat deflation.

Hope this doesn't incite another tirade from you Belgian. I just want to present the way I see things falling out in the near future.

I still can't imagine what would prompt the US to ship actual physical gold out of the control of it sovereign boundaries if this is what is in store for us?

As a baby boomer, do I think our fiat is actually worth a hoot? Absolutely not! I can't see any reason whatsoever for the US dollar to be as highly valued as it is now. Perhaps it is other nations keeping it so during their conversions of US assets over into euro-zone denominated assets...more bang for the buck so to speak . When the important players are all converted, the dollar will be allowed to fall but only after the paper gold markets collapse.

Perhaps the important players fear re-ignition of the american industrial base in a low dollar purchasing power environment. Why america could actually sell goods overseas cheaply then. I wonder if euros would subsidize that recovery??? Wait a minute . Who owns chrysler now?

Enjoying the discourse,
Henri

What happens with goldminers, if....

Gold should regain " officially ", its status as legal tender money ! Miners do mine, Gold as an industrial commodity. What if they suddenly become money-miners ?

Gold has been used for and controlled for such a long period, with such finesse that I have that very strong intuition that something very special has been planned for/with Gold ! POG has been managed in function of its commodity purpose and been allowed to be traded, physically, as to not disturb, physical demand for the gold-industry. The Gold-Managers didn't want POG to decline to such an extend that the gold-industry should start protesting. In this part of the management (POG-not/sub-200$), I suspect some evidence for a sudden, unexpected, restoration of the monetary function of Gold.

Is Anglogold behaving in anticipation of such an event ?
Are they getting organised to become a (heavy regulated and severly controlled )money-miner ? Possibly.

I do remember that some years ago, many banks advised to buy into the paper-gold, rather than the physical, as to avoid the then imposed 1% VAT. And then suddenly, last year that VAT was abolished. So, adding/abolishing any tax-rate on gold, can happen in seconds. If POG should explode and valuations should get out of hand, because of massive-panic-hoarding...this could be easely countered with imposing a heavy tax on physical gold buys. And how should such and evolution affect the valuation of mine(money)enterprises ?

The same reasoning can be done for holding miningshares.
What will happen to these shares if high priced Gold is gifted with a tax ? Inevitable, should POG fly into the thousands and very unlikely for the 600$
/ounce propagandists. Beyond the 600$/ounce, it will be too late to start accumulating the physical. There is a tax-free shop here on your screen (CPM).

What is your strategy for such an eventuality, dear Sir ?

Must admit that I have to digest some major parts of the write off / deflation vieuw ! Very strong post, and need some time to reflect on it !

Solving "the" structural debt problem with default/write offs and defla is highly unprobable (imvho).
When one of two lovers has been unfaithfull...they can be succesfull with a restart. But if it is about a permanent unfaithfullness...nothing is possible anymore. They both have to look for someone else.

Correct me if I misunderstood your point, please. Thanks.

...Negative IR is to deflate the currency...

Correct ! No more tirades about "Good" or "Bad" money.

It seems that you still believe in that "intervention" phenomina, where economic activity, can be steered, permanently. For every problem with growth, there is an appropiate solution. Me think that we reached kind of an ending here (sugar-water) aka saturation .

A fiat-printer can not default in principle. But economy cannot be imposed eternally. At a certain point, you, me and all the others, start to leave the collectivity and individualize. This happens when things turn sour.

Since we are dealing with probabilities here, I'll use some TG words...and we watch it together. Thanks Henry.

http://www.usagold.com
First of all, let me say I have nothing but the utmost respect for Reg Howe of www.goldensextant.com. If you scan his website you cannot help but come away with the conclusion that the man is an American Patriot.

That being said, let me explain why I think his lawsuit is doomed to failure. The suit should not be dismissed, make no mistake about it. There is, at least, enough circumstantial evidence to allow discovery to proceed.

The problem is not so much with the suit as it is with a corrupt Federal Judiciary. When powerful econmic interests ( and he is dealing with the most powerful economic interests in the world) collide with the law and the Constitution, it is the econmic interests that prevail.

Evidence of this fact is legion. Just look at the Golden Sextant site and the case asking the Supreme Court to decide the Money issue. Certiorai was denied by the court. They closed the door to his pleas.

Suits against Nafta have also failed although it is clear that Nafta is a treaty that was not ratifed as the Constituion says it must be ( Calling it an agreement doesnt make it less of a treaty and you are a victim of minc control if you believe differently).

The Federal Reserve System itself is patently unconstitutional but the courts will never rule that way.

The sad truth of the matter is we live in a country where large parts of the Constitution are not in effect, and the powers that be want it that way.

And that is why I expect the Reg Howe suit to be dismissed.

But Reg Howe gets points in heaven for trying.

Just back from weekend's drive-about...

Old Yeller, thanks, it would be Oro answers most in-depth structural questions; I just don't have him separately sorted-out and searchable in my files yet -- glad you're keeping an index, and I'll read it.

Belgian, you got Henri to say more than he's said in months (years?) here, so I relish reading you both, tonight I hope... But isn't it amazing -- you are two average guys, right? Not trained PhD economists or anything like that, and look at the depth you get into! The wonderful possibilities of the middle-aged brain continuing to learn and grow in understanding is in my thoughts, as I watch a little one begin her schooling...

http://www.menewsline.com/stories/2001/september/09_10_3.htmlSnippet:
Iran and Syria are prepared to upgrade strategic relations in face of the prospect of war with Israel.

Diplomatic sources said Iran and Syria are preparing high-level visits over the next few weeks. This would begin with a visit by Iranian Defense Minister Ali Shamkhani to Damascus. This would be followed by a visit to Teheran by Syrian Defense Minister Mustafa Tlas.

The sources said the two countries want to discuss increased military and defense coordination. Iran and Syria have joined in several weapons programs, particularly in the development of Scud C missiles.

The heightened cooperation comes amid tension along the Israeli-Lebanese border. Israel has threatened to strike Syrian targets in Lebanon in retaliation for any Hizbullah strike . . .

I expect that the Howe lawsuit will be dismissed as well. The courts know who their masters are. As far as the US Constitution, it is nothing more than scratch paper with ink on it. Our Rulers in Washington have seized power and as those who are drunk with power, nothing will stand in their way, not even the Supreme Court. Even ignoring or voiding parts of the Constitution and the Bill of Rights. Need proof? Check out the atrocities that occur daily in the name of the War on American Citizens �� er, War on Drugs.

The loss of our rights have been upheld by the Supreme Court because they know who their masters are. This is quite common. For example, the seizure and forfeiture act is nothing more than a license for law enforcement to steal property. This law came about because incompetent prosecutors lost case after case to well paid defense lawyers. By stealing the assets of the accused, they could not afford adequate counsel and most had to rely on inept public defenders.

Ever know of a case challenging the legality of the Federal Income Tax having ever come before the Supreme Court for a hearing? Of course not, these cowards simply avoid the issue by refusing to hear the case. I really don't see much of a chance for the Howe lawsuit ever getting very far, in fact I expect that it will be dismissed out of hand. Remember - they are the Rulers and we are the Serfs. Sad, but true.

- Black Blade

The opening paragraph is a hoot!To wit:

The Utah Gun Owners Alliance urged members to picket a Utah Republicans� meeting at which VP Dick Cheney was speaking with signs including "GOP Doesn't Mean Gun Owners Prohibited." The secret service suggested that people licensed to carry concealed weapons leave them in their cars or check them in for storage. Two knives and 25 guns were collected. As we all know criminal behavior is kept in check if they fear an armed, law-abiding populace. It is no wonder Mr. Cheney was concerned.

One wonders whether or not Mr. Chapman is always quite clear on the point he is trying to make!

Off topic, but what a hoot!

... with your asessement, except you see the world from a pure $ - perspective, which may have been the correct perceptive! - far too long.
And that in itself may be too deceptive to not become repetitive for much longer.

In brief - the $-supremacy is tested, as the bubbles get blasted ... one by one ... -SM's, credit, RE and ultimately derivatives - and what's left of the supremacy may not be much fun! ... resulting in defaulting in reality!

... while the rest of the globe stands by in awe to see the US of A - imploding internally and eroding any and all credibility, internally and eventuallay - even externally!

- as systemic risk and fallacy is a new reality of the volatility in global markets, where counter party's are essentially balancing their precarious 'notional' values between the few, as stratopherically leveraged, though friendly artisans ... who may on cue call upon a FED rescue! ... and may be due to exit 'next' to a bail out of blowing the last exit apart.

As JPM/C may even be to tall to forestall such a rescue , the FED just may pave the way to undo the derivative screw ... and just declare ...new rules -
- i.e. your playing MY game and lest you expect some equilibrity - go ahead and build your own supremacy!

... unfortunately, that's exactly what's happening, without a thought to renew real stability - and still on the pure relativity of economic agility or activity, without the measure -as seen in the .com industry - of no what-so-ever profitability.

We'll see, if to a degree the euro will outlive the $ spree ... though, all told, I'll go for gold as fiat currencies happen to change their X-change rates by decree, relative and adverse to liberte', fraternite' and egalite', ... and, of course decency ... cb2

Saw an interest rate article recently and am trying to recall where I saw this.

Short 'real interest rates', that is (short) interest rates less inflation are at a very low margin with the USA leading (least) at approximately 0.50 %.

Anyone else see that article?

The following reply to a case made also for outright dismissal of the Howe lawsuit was posted at Cafe Chat site by Catherine Austin Fitts who has had her own run in with the Feds:
"The Howe Lawsuit is not doomed. If the courts use these references to kill the case they are confirming that there is no law." {taking a no jurisdiction stance}.
"The appearance of the rule of law is too valuable to the capital markets to be this obvious, so it is unlikely to take that position. If they do, the precedent is invaluable for communicating to folks what is really going on." END.

Comments: I also agree with you guys that the case will not go forward, but something tells me that we will somehow{e] be thrown a 'bone', possibly inadvertently, that will advance the cause. In actuality this 'case' goes forward with or without this lawsuit, as the markets have the ultimate say in the matter. The truth is springing up everywhere we look anyway, and the trail is still quite 'hot'. The GATA/Howe case would simply accelerate the inevitable.
That being said, I believe CAF has a wonderful point in that MANY more people will come to realize the 'magnitude of the monster' we face if/when the case is tossed. Knowledge is so powerful! A lot more 'realists' or skeptics such as we are will make it harder to fool folks down the line {Isn't that a naive wish?}. So a dismissal needs to be screamed from the mountaintops.
I have heard very interesting comment about this particular Judge in that he has taken most difficult stances previously in his career. I wonder how{e] much he enjoys being a Judge?

I picked up a book entitled 'Deflation' last week and am nearing the end of the first scan. The book was written by A. Gary Shilling (1998).

The author is expecting deflation and the book outlines the following 'deflationary forces':

1)End of cold war led to global cuts in defense spending.

2)Major country government spending and deficits are shrinking.

3)Central banks continue to fight the last war - inflation

4)G-7 retirements will lead to reduced benefits and slower growth in incomes and spending.

5)Restructuring continues in English-speaking lands and will spread.

6)Technology cuts costs and promotes productivity.

7)Information via the Internet increases competition.

8)Mass distribution to consumers reduces costs and prices.

9)Ongoing deregulation cuts prices.

10)Global sources of goods and services curtail costs.

11)The spreading of market economies increases global supply

12)The dollar will continue to strengthen.

13)Asian financial and economic problems will intensify global glut and reduce worldwide prices.

14)US consumers will switch from borrowing and spending to saving.

Each chapter discusses the above 'forces'. Very interesting so far.


Canuck.

As listed by the 9/10/01 edition of the IBD newspaper, year to date percentages,

Defence -9.5%
Consumer -11.5%
Defensive -12.6%
Medical/Healthcare -13.6%
Leisure +2.4%
Gold +22.9%

Also listed are the Dow Utilities, Dow Transports, Russell 2000, and the American Stock Exchange- all down year to date.
If investors insist upon remaining in the markets (on the long side) and if they are moving around from sector to sector as the peoples' stock market television channel likes to tell us, then as other sectors continue down, shouldn't we see more and more buying in the gold sector. Even those with no knowledge of gold as a storage of value immune to depreciating economies should be able to read what I've repeated from the newspaper. Also, trend following (technical analysts) money managers will notice that the charts look good! Soon maybe we'll get some reinforcing "irrational exuberance" to lift POG and POS.
Hope so! I'm ready to (as Solomon says) learn, earn and have fun.
Up or down tomorrow?
Rich

Is now open and down more than 200 points.

Nikkei down more than 283 points as I type this post...

Short term I'm looking for 890 area on the S&P, 8000 or so on the DOW....

Don't be surprised if we get an '87-type crash here this Fall to reach these trendline support levels as we did over a decade ago (after that, who knows?).

I get the feeling that a "washout" might actually be looked upon as a blessing by Wallstreet and Washington at this point.

L.

The ongoing miner mergers are a very clear signal that overhedged companies may fairly easily find a way to square their books. Will they let it go at that or then throw caution and future reserves to the wind? What is the signal that the end game is upon us? BarAngloPlacHomeGoldFNormaDurbHarm Mining Limited?
Trail guide does clearly warn of regulation and taxation of the gold industry as events unfold. You see gold has ALWAYS been money to the elitists, in spite of their public protestations. the above mentioned mining conglomerate/monster would surely be a powerful tool in the PE arsenal, no? It is simply real estate unless they plan on extracting product which of course they will do. As you know, however even some of DeBeers competitors make a nice living in spite of the controlled diamond market. What is my strategy {buffered by physical of course}? What happens if Podunk mining finds a rich and vast kimberlite in the NW Territories? They cash in even as the succumb to the 'monopoly', no? same will always happen in the entire resource industry, imho. Mining is done most efficiently at a more grass root level, think small, mobile and motivated. this will not change any time soon. No resource exploration {done mostly by Juniors} no end product. This above named conglomerate has no more reserves than the individual companies had prior to merging/cannabalization. Their exploration budgets and staffs have been severely curtailed during this extreme part of the CYCLE! So, to where does the great One {Gretsky} see the puck going? That's right Podunk Gold and Sticks Silver, where I patiently await their arrival. If we come through with a discovery {big 'if', but corresponding extreme leverage} it will have to be bid for, taxes, regulations or not. With no incentive to explore, there shall be no exploration, at least not by small companies.
With an extremely undervalued Junior miner, buying it when no one else wants it, success is only a drill hole away {as is failure}. No waiting for POG or POS to finally perform, drilling this month, this week. That's my strategy, complete the CYCLE of resource mining, play a game that at least appears to be stacking up in my favor. The last cycle saw stocks like Diamond Fields Resources return $25 or more for every $ invested, but things were nowhere near as depressed when DFR was purchased for $1 as they are now. One of my big mistakes in the past cycly was in largely overlooking physical, no more.
Regards,
auspec{ulator}

There will be a lot of dollars converting to Euros here.
------------
VATICAN OFFICIALLY CONVERTING TO EURO
VATICAN, (CWNews.com) - The Vatican has confirmed that the euro will be its official unit of currency, as of January 1, 2002.

The official announcement adopting the euro was published in Acta Apostolicae Sedis, the official publication of Vatican actions, on September 6.

The Vatican had already indicated, in December 1998, that the euro would become the official unit of monetary exchange inside the city-state. In December 2000, the Vatican concluded a monetary pact with Italy governing the introduction of the new currency.

The Vatican will now adopt the euro according to the schedule and conditions set up by the European Union. The agreement allows for the Vatican to mint coins engraved with its own designs. To date there has been no announcement from the Vatican as to whose image would appear on the coins.

http://biz.yahoo.com/rb/010909/business_bush_economy_dc_1.html
Snippit:

WASHINGTON (Reuters) - President Bush supports a capital gains tax cut in principle but hopes for now that his $1.35 trillion tax cut will stimulate the ailing U.S. economy, a top congressional Republican said on Sunday. With Friday's August unemployment report showing the U.S. jobless rate jumped to a nearly four-year high of 4.9 percent, Bush has said that he is worried about people losing their jobs and that his administration planned to do something about it.

Black Blade: Desperate times call for desperate measures. Looks like the Herbert Hoover of our generation is grasping at straws.

http://biz.yahoo.com/rf/010909/tau025378_1.html
Snippit:

TOKYO, Sept 10 (Reuters) - Tokyo's key Nikkei stock average opened sharply lower on Monday, hitting a fresh 17-year low after shocking U.S. jobs data sent Wall Street crumbling and stoked worries that consumption of Japanese goods abroad would slow.

Black Blade: Not to mention that Japanese banks are rumored to be insolvent and may be forced by the government to seek mergers. There is a lot of apprehension about IMF audits of Japanese bank as it is widely expected that these banks "cooked the books." Looks as if more news will be coming out over the next several days.

http://www.mrci.com/qpnight.asp
The USD is falling tonight. US Market futures are down as well. The Nikkei is rebounding from one heck of a plunge in the early going. Looks like an "interesting" day in the markets are ahead.

http://www.msnbc.com/news/626257.asp?cp1=1#BODYIn one word friends, things look: "grim".
Got gold yet?

http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/09/09/state2308EDT0137.DTL&type=news
Snippit:

After enjoying two decades of low electricity rates, some large California businesses are now threatening to sue following recent increases of up to 49 percent. In an effort to remedy the energy crisis, a series of decisions by the Public Utilities Commission has swept away 20 years of preferential treatment for the factories, mills and refineries that devour a third of the state's electricity and employ thousands of workers.

The result, business groups say, is a shift in costs to the large consumers and is leading to layoffs and threats to sue for the right to shop around for better deals. Many have joined a massive lobbying campaign aimed at wrangling better treatment from the state Legislature. Advocates for small consumers, however, say even with the recent rate increases those businesses are still a long way from paying their fair share of electricity costs. Households for years have been paying too much for electricity to keep rates low for businesses.

Black Blade: The move to raise energy costs even further on business also results in higher costs to consumers. In other words, industry doesn't pay, but consumers do. This will also result in attempts to salvage the bottom line with higher prices, and cutting expenses - that includes adding to the "Bone Pile." I suspect that there will be more companies joining the exodus out of California in search of more favorable business environments and lower costs.

http://ogj.pennnet.com/articles/web_article_display.cfm?Section=OnlineArticles&ARTICLE_CATEGORY=Elect&ARTICLE_ID=115486
Snippit:

HOUSTON, Sept. 6 -- Natural gas consumption is expected to decline 1.3% this year, compared to last, a government agency said Thursday, reflecting sharp reductions in industrial gas demand, particularly related to processes other than the production of electricity. The US economic slowdown and the absence of any sustained and broad-based boost in fuel use from summer electricity demand have pushed up gas supplies, the US Energy Information Administration said. At the end of August, working gas in storage amounted to 2,603 bcf, 19% above the low year-ago levels, and 7.6% above the previous 5-year average.

Forecasters said normal weather conditions and a modest recovery in industrial output during the forecast period are not expected to generate much in the way of new upward pressure on gas prices through 2002. "We believe that production capability is more than sufficient to balance the US natural gas market without any significant price spikes over at least the next 15 months," the agency said. Unless the weather is unusually harsh in the gas consuming regions of the country, EIA projected the spot price of gas will average under $3/Mcf this winter, and well under that amount for all of year 2002. The average for 2001 is now projected to be about $4.20/Mcf.

Black Blade: The higher prices for energy threw the economy into a deepening Recession. The result is much less industrial activity and rising layoffs. The EIA data also was used by some economists to predict that oil prices would remain below $5/bbl forever. We know accurate that forecast was. The NOAA has predicted colder than normal weather patterns this winter. We shall see. Also more NG-fired power plants are coming on line and they are not dual-fuel facilities. That is they are confined to natural gas as a fuel. Meanwhile prices are low dow to moderate temperatures before we head into winter.

http://quote.yahoo.com/m2?u
Asian markets are in the Red tonight though some are barely in the Red. Rumors continue to fly that Japanese Banks are on the verge of insolvency and the same is said of the Postal retirement fund. There is another rumor that the Japanese government is likely to step in an prop up the Nikkei with government funds.

http://quote.yahoo.com/m2?u
Down -321 and falling fast. Might not be long before sub 10,000. Serious concerns over Japanese Banks wearing on Japanese markets.View Yesterday's Discussion.

I see the Aussies 'All Ordinaries' up +0.15% was one of the few to resist the current, but for how long

I remember it being said years ago that the NIKKEI below 16,000 was harmful to the survival of many of the banks over there. . . here we are at 10,000 with things turning to custard rapidly.

When you have Co's with highly inflated balance sheets with paper assets(being shares in other highly inflated Co's built with paper assets also) . . . then as the NIKKEI drops and keeps going down . . . "Apocalypse Now!"

http://debka.com/It would seem that the next two weeks may be interesting ones to watch:

- A meltdown appears to be gathering pace in the equity markets, this in turn will cause further chain reactions. The best financial minds out there can not seem to solve this one.

- The Middle East continues to be petrol waiting to ignite. Interesting that Bill Clinton was reported to have said (on his current o/seas tour) that the one thing he regrets from his time in office was not being able to solve the M/East crisis.

Meanwhile, in the take it or leave it department: "Bible Code Software" has yielded a "Prophecy" date of September 18 2001 War in Middle East apparently,(still looking for a link on this one to check it out myself).

- Netking

Thanks for the input. Only a short reflexion on the 3 subjects (miningstrategy/Henry's deflation/R.Howe's lawsuit)
: Aren't we living in an "ORCHESTRATED" world : ?
Where we have so little to say on the music and the dance.
And isn't this reality...the best argument for holding that physical in possession ? I do feel like a chomp of bleeding meat, floathing into a piranha infested pool. There is so little certainty left to build on. Just a very strong feeling !

Huh the irony in the newspapers " statistics say he said she said ... and on it goes real estate ... up up ( what else can they say ?.. and yet In the business section I read dont borrow $'s, things are grim. huh perhaps only
an equitable society could have so many slow learners in hoc up to there bone teeth lah. But the pollies are protecting the electorate !. yeah righty O.

http://quote.yahoo.com/m2?u
Markets have been thoroughly crushed in Europe this morning. Not to mention that US Market futures look absolutely horrific! Looks like a Very Wild Ride on Wall Street at the open. Hang on for the ride. Better get some Gold and Silver life-lines to smooth out the volatility and as insurance. As I have been saying for a while now - it looks "GRIM"

http://biz.yahoo.com/rf/010910/l1019635_1.html
Snippit:

LONDON, Sep 10 (Reuters) - Gold bullion prices traded moderately higher in Europe on Monday, but the market was cautious ahead of Wednesday's 20-tonne auction by the Bank of England (BoE), dealers and analysts said.

Black Blade: With the FTSE getting "ripped a new one" the BOE sure is intent on selling that "Barbarous Relic" before it runs up in value. Hmmm�

http://www.chicagotribune.com/business/printedition/chi-0109090537sep09.story?coll=chi%2Dprintbusiness%2Dhed
Analysts worry latest dip could prompt selling

Snippit:

The stock market's summer swoon has Wall Street worried that many small investors might begin to cash in their mutual funds, eliminating a key source of support for share prices. Americans who own stock funds have been hanging tough so far in the market's steep slide, even buying more shares for most of this year. But the latest sell-off, which pushed the Dow Jones index below 10,000 again, could change more investors' mood, some experts worry. Heavy selling of mutual funds, if it materializes, could make matters worse for the stock market, which already has suffered its sharpest loss in more than a decade as the economy has weakened and corporate profits have plunged.

In previous deep market declines, such as 1973-74 and 1987, stock fund investors became net sellers of fund shares for extended periods, meaning the dollars withdrawn swamped new money going in.

Black Blade: I can hear them running for the exit shouting "Feet don't fail me now!" It looks absolutely ?Grim" with absolutely no positive news to be found anywhere and Pied Pipers and media Talking Heads grasping at straws for support. Grab a "Golden Lifeboat" before all seats are taken.

http://www.mrci.com/qpnight.asp
US Companies continue to reel under the strong US Dollar policy as exports dwindle. Looks like a very "GRIM" week on Wall Street!

Huge buying comes into Intel and Microsoft 15 minutes after the open. Both Nasdaq heavy weights, and DOW components! How convenient.

Financial/Political/Corporate America (FPCA) is under siege from the seeds of their own creed. Although they fight the battles dirty with "no holds barred" they have LOST. Time will deliver all the messy details. Look up America better things are ahead.

http://stockcharts.com/webcgi/wb.exe?Perf.web+$GOLD,$COMPQ,$XAU,$huiTake a look at the chart at the above link.
Yikes,
NASdAq down 40%,
s&P down 19%,
goLd up 2%, good have that one well in hand
X?aU up 25%,
GoLd bUgs index up 70%....
^^^^^^70%???? sounds like a dotcom... They are going to have to stomp us down once again. Look out here it comes, gold bugs....
That's all from Tannehill

Thank you for indulging my decrepitating thinking organ. Your responses to my partially developed out-of the-box thought probes/teasers have helped me to "crystallize" my syntheses.

When I post such neo-prescient blather as msg#: 61034 it is my hope that I will get feedback that will help develop the thought driftings with intelligent discourse.

I really liked your analogy of the super-saturated sugar water. If I may, can I advance a continuance along this theme?

Let's imagine that the dissolved sugar... certainly added to sweeten the pot (sorry couldn't resist again) represents active and, for those that sought to capitalize on others industry and innovation, productive debt instruments. Lets call these for want of a better term "marketable debt instruments". Depending on the conditions of solubility...your "temperature coefficient", the relative heating or cooling of the mixture by the supplier of the water (let's think of it as "liquidity") :-)...more sugar (debt) can be loaded into the pot solution and dissolved.

This addition of sugar can be allowed to dissolve freely and slowly (as in once somebody borrows money, it does take awhile for the funds to generate income from which the debt can be repaid with interest (the realm of corporate debt...a new factory being built or some retooling for a new and promising product), or we can "stir" the pot by insisting that this debt become productive immediately upon issuance (not a wise move).

Let's call this "stirring" activity "agitation" of the debt. Slow mechanical mixing of the solution does not improve the "conditions of solubility" but does do two things. 1) it circulates the pre-pubescent debt particles (those particles of sugar that have yet to become productive) throughout the solution allowing the solution to fully dissolve these particles up to its carrying capacity. and 2) it causes the solution to become "murky" or cloudy.

To be fair, without agitation, the distribution of sugar within the pot becomes somewhat layered with that solution lying closest to the undissolved grains at the bottom of the pot becoming saturated first. The folks that supply liquidity to not yet productive corporate debt we can call bottom feeders. They incur a risk that the debt will never become productive which should be reflected in a higher rate of interest up front. Bottom feeders being who they are then attempt to pass this risk upward into the as yet unsaturated zone. This is not "agitation" per se, nor a testament to their own marketing skills, but a natural consequence of the higher rate of promised return. "Agitation" is a phenomenon that can best be described as market driven wherein this as yet unproductive debt is distributed into the upper unsaturated zone where it has exposure to "liquidity" that is not yet saturated. For the as yet unproductive debt (undissolved particles) such mechanical translocation will allow dissolution up to the carrying capacity of the finite amount of liquidity in the pot and its relative "temperature". When the conditions are "natural" room temperature, without the need to heat or cool the solution, the point at which stirring ceases to be effective at forcing dissolution of the non-performing particulate component is that point at which the solution refuses to become clear. It is "murky" and cloudy.

When the stirring stops, the undissolved component falls out to the bottom of the pot (larger heavier particles first). This is natural and represents a circumstance that is relatively economically healthy.

Yes, in time, it is possible that some of the "sugar" added to the pot was not "sugar" at all but someones idea that did not pan out and the debt incurred did not become productive. These particles are not "soluble" and therefore will never "dissolve" no matter how long they stay in the pot or how much the pot is stirred. They are easily identifiable by those who incurred the debt but not so easily identified by those holding the notes except when the non-performance results in bankruptcy of the venture (typical occurrence for small ventures that do not pan out...small business in other words). As the size of the borrower increases, the likelihood that the bad idea which does not become productive results in bankruptcy becomes more remote. Hence analysis of "solvency of the borrower" is useful in Corporate debt for those assuming the risk of loaning capital. These loans usually become "dissolved" more quickly and carry a lower rate of return reflective of the risk component.

The problem is that regardless of the solvency of the borrower, the debt never became productive. Yet it continues to occupy space and time in "solution" displacing other possibly eventually useful debt instruments by reducing the overall carrying capacity of the pot. Outside the pot, internal pressure on the borrower to make good on the loan to retain its "reputation" as a preferred source of sugar results in the removal of reserves from the company to pay the interest (cheaper than buying back the bad loan) never mind the principle. A means must be contrived internally to pay the carrying cost of the loan. This would be an increase in the price of some other product sold by this company and the consumer actually is bearing the burden of the circulating but insoluble debt.

So, let's review for a minute.

Analysis of bad (non-performing) debt. There are two categories. 1) debt incurred for good ideas that have not yet come to fruition rendering the debt "productive", and 2) debt carried by borrowers that will never be productive.

If all cannot now see the need for a "pool sweep" (deflation) periodically even under natural dissolution conditions, then you should re-read the above section.

Problem #1 with the system: Failure to institute proper identification and timely removal of non-performing debt from the pot results in diminished carrying capacity.

Problem #2: the system is predisposed to favor dissolution of debt by large cororate borrowers to the point of blatant discrimination against and or exclusion of small business. This is bad because non-performing debt of small business is more likely to be caught and removed from the pot and is therefore an inherently more healthy a brand of sugar to be added.

Problem # 3 The system is predisposed to accumulate over time only non-performing debt instruments since performing debt is retired in that the excess profit generated by the venture may be used to pay off the debt and increase the profit margin of the original borrower. The circulating non-performing debt in solution then eventually utilizes the entire carrying capacity of the pot.

Present "solutions" to the dissolution problem: #1 agitate more quickly adding heat as well as mechanical energy to the solution allowing a small increase in carrying capacity as long as the stirring continues.

Problem with fix #1: Agitation requires energy to be added. This energy must be obtained somewhere other than the pot. Energy used to stir the pot not now available for other uses. In other words squandered resources.

Fix #2 add "liquidity" to the pot. More water higher carrying capacity. This works until the pot cannot hold any more liquid. This fix is limited by the amount of non-performing debt on the bottom as these particles displace volume and therfore the amount of liquid that can be added.

Once Fix #2 has become ineffective heating the solution directly increases the carrying capacity. How is this done? Lower the solubility coefficient for sugar or provide the illusion that the carrying capacity of the solution has been increased somehow.

A)Tax breaks for large corps to help them manage (carry)their unprofitable ventures??? This is bad and non-productive in that they should recognize and retire such debt ASAP once it is identified as having entered category 2 non-performing status.

B)Print money to replace that which is no longer being channeled and recirculated into productive endeavors. Inflationary! Creates the illusion that liquidity has been increased since more $ are now available for loaning. Reality nothing was changed the pot did not suddenly get bigger.

Problem with fix #2 Physical impossibility. The dissolution coefficient of sugar is a physical constant. Heating the solution once begun must be continued. Again see problem with fix #1.

Fix #3 Transfer non-performing debt to another pot and start over. Ouch! results in much spillage floods burns from scalding hot fluid etc.

Find a pot owned by someone else that has extra holding capacity is is yet unused and borrow it for awhile. Pay them for the priviledge of using it with the extra dollars printed in Fix #2B (Not inflationary unless new dollars come back and try to enter first pot again. Without them knowing what is going on saturate their pot with your non-performing circulating (dissolved) debt from pot 1 thereby allowing a net increase in the carrying capacity of pot 1.

Problem with Fix #3 buys time but not overall carrying capacity on a global scale. There are only so many pots to piss in. Results in transborder movement of capital and "international" complications.

Overall problem with current system: excess energy required for fix #1 and Fix #2 came from the issuance of govt debt vehicles which are by definition "non-performing".

These circulating (dissolved) non-performing debts have been added to pot #1 and are considered of a much higher quality sugar than they obviously deserve due to their mode of issuance.

Fix #4 step 1 stop stirring. allows natural layering to take place if only corporate debt were added. "Old particles which should have been retired long ago if they had been at all productive tend to "agglutinate" with others of a similar age making larger particles.

Step 2 stir lightly and run pool sweep removing larger particles (deflation).

Problem with fix #4 not applied until way too late and does not displace "high quality" sugar that should not have been allowed to be added in the first place.

Fix #5 after fix #4
Step 1: cool the solution and let all dissolved components crystallize and fall out. High quality sugar will make larger crystals.

Step 2 Stir lightly while allowing pot to return to room temperature. large crystals will not dissolve as quickly

Step 3 run pool sweep (deflation)

Fix # 6 after Fix #4, and #5

Restructure and regulate the addition of sugar (inflationary)
How? Get a small melting pot. All new debt added must have a projected date of productivity or that time when the funds can reasonably be expected to support themselves if all goes according to plan. No interest allowed to be charged in the interim. Once the debt is self supporting (e.g., marketable), it can be transferred to the big healthy clear solution pot but only after submitting a debt retirement plan. No govt debt allowed. (none needed)

Central banks take risks of and manage and market initial debt cycle. If a debt does not become productive, it is put in a grave next to the others. The money, supplied from nowhere (fiat printing press?) just disappears and is not missed by the big pot nor does it occupy space and time in the big pot reducing its carrying capacity. (no problem)
Although some of the printed fiat is used on paying people, those funds then go into the other "pot" and are recirculated there. Reporting requirements of the borrowers will include "how much" entered this other pot, and an equivalent amount is drained from the domestic banks reserves and destroyed removed from the pot. (Different from Taxation)

The funds printed and used to build "Stuff" that has value should be sold or appropriated This "property" may be acquired by other borrowers with a reasonable plan to make use of the resource. The funds used to build the stuff are added to the second borrowers debt and if productive, enter the clear pool. Central banks don't issue non-productive govt debt to "fund" these entrepeneurial activities, they just print the money. If it does not become productive, it does not enter the "economy"

Sweeping of non-performing debt from both pools limits the inflationary pressure.

Comments?

Later...the "other" pot...mortgage and other consumer debt.

Hope you found this interesting.

Can any of you gentlemen or gentleladies point me to the website that tracks the imminent deaths of the dotcoms and predicts the month of their DOA dates? I would be greatful for this, my co worker proclaims that amazon is doing great, and I want to present him with some cold hard facts.

manning an oar in the golden lifeboat,

Christopher

http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n10276368&feed=reu&date=20010910&cat=USMARKETHEADLINE: Canada Dollar Up, But Poised to Weaken Further

TORONTO, Sept 10 (Reuters) - The Canadian dollar rose on Monday morning, but analysts said it was poised to weaken further in the near term as the market frets over the North American economy.----

Further in this article, Jack Spitz, regional manager of foreign exchange at National Bank of Canada said, "Canada is not necessarily trading on its own economic news. It's trading on North American economic news, predominantly U.S. economic news. If it's soft, it's going to hurt Canada."

Reading the road ahead, if you can't count on your currency to maintain its purchasing power, you would be wise to promptly exchange it for highly liquid hard assets (e.g., gold) that would be more likely to persevere and/or gain value in the days ahead -- with paper assets coming under additional confidence pressures as fallout from the ecomomic downturn and reactionary easing of monetary policies by the governing authorities.

Call Centennial. They can help in more ways than one.

R.

Yessir,just sold another 22,000 ozs. from our pathetic little pile,off to buy some more USTs.

Sad state of affairs.This coming from a nation with a history built on mineral discoveries and great mining entrepreneurs.The exploration industry has been totally devastated,investors have lost almost all their capital and still our government keeps selling out our heritage to perpetuate the game.

As Charlie Brown says;"Aaaaargh!"

http://www.eubusiness.com/cgi-bin/item.cgi?id=57382&d=101&h=240&f=56&dateformat=%25o%2520%25B%2520%25YHEADLINE: Iranian foreign minister hopes trade accord with EU "soon as possible"

According to this article, today in Belgium, Kamal Kharrazi (in the first visit since 1979 by an Iranian foreign minister to the European union) said that Iran "attaches great importance to our relationship with the EU and we hope that the (trade) agreement...will be negotiated and signed as soon as possible. That is the best way for more (bilateral) cooperation, considering the strategic location of Iran ...its huge resources in energy ... and its being at the crossroad between East and West."

Dollar holders need to come to terms with the new reality that world commerse no longer needs to be centered around the dollar with its subsequent support. No matter what your opinion may be regarding the euro as a worthy competitor, surely you will agree that the very presence of this competition going forward will have an impact on the dollar.

R.

http://www.eubusiness.com/cgi-bin/item.cgi?id=56161&d=101&h=240&f=56&dateformat=%25o%2520%25B%2520%25YIn reporting on the current account, the European Central Bank said that following a net investment outflow in May of EUR 15.5 billion, June gave rise to a net inflow for direct and portfolio investments totaling EUR 19.8 billion.

A mere consequence of the "competition" mentioned in the prior post?

R.

http://www.eubusiness.com/cgi-bin/item.cgi?id=56898&d=101&h=240&f=56&dateformat=%25o%2520%25B%2520%25YHEADLINE: EU/China Summit focuses on rights, co-operation

Although primarily documenting the human rights issues covered in this meeting with Chinese Prime Minister Zhu Rongji and Belgian Prime Minister Guy Verhofstadt, this article also mentions that China has completed its necessary dealings with the US and EU as preparation for joining the World Trade Organization at the November meeting to be held in Qatar.

I might add that it is in conjuction with the WTO effort that China is striving toward a convertible currency and as part of that, liberalization of its gold market -- already underway and scheduled to increase pace in only four months.

R.

http://www.eubusiness.com/cgi-bin/item.cgi?id=57269&d=101&h=240&f=56&dateformat=%25o%2520%25B%2520%25YInterestingly, the 12-nation currency union ran a trade surplus of EUR 5 billion in June, but when Britain's large net trade deficit is lumped in as part of the 15-nation European Union, the region's international trade position turns negative for the month by EUR 4.4 billion.

A Eurostat spokesman said, "It's the UK that accounts for most of the difference," pointing out that Britain had already racked up a EUR 26.7 billion trade deficit with the rest of the world from January to May of this year, up 1.3 billion over that same period one year ago.

Looking at the trade position, the UK is sorta like a lightweight United States, succeeding (thus far) in printing (borrowing) its way to prosperity.

But there's always a day of reckoning...

How far will the pound fall before the British citizens clamor for alternative savings? Centennial is here to help, with insured deliveries of gold to their door. Just call... nearly as easy as ordering pizza!

R.

http://www.downside.com/deathwatch.htmlI think I've got it right here, in my favorites...let's see -- do a Find for "death", ok... here it is. Boy, sure takes a long time to load! (Glad I didn't waste the end of the 90s trying to play up one of these, I know some deeply in debt who are still counting on their 'website' to come in...)

Sir, it took me some re-reading for full absorbtion.
All the fixes (and their variants), you are suggesting, have already been used, in the recent past 30 years.

Sorry to stir up the pot a bit more violently, with my conclusion that the present situation is actually worse than the debt (any kind of debt) / growth debacle :
Financial management, is now, hyperconcentrated and extremely leveraged, with the 100 or 140 Trillion in derivatives. That is a new and very complicating factor, that will make your fixes unworkable.

I have very little knowledge about the finesses of derivatives. But I do see how markets move and behave.
The orchestration is Gigantic. Mechanical and Artificial.

We are with both feeth into a Big Brother plat consistant.
Plenty of creativity and enormous implementing power to steer and fix. Look very closely at our tiny gold-fraction of the total market. Feel that market and come with me to this conclusion through systematic elimination of all other possibilities.

Control the market for Intel/MSFT/GE/IBM and you are deciding on the world's faith. This never happened before (in my experience) on such a scale, magnitude, intensity and time. Hyperconcentration, equiped with the finest tools.

This hyper-strength carries mega risk. As if there is nothing to loose anymore.

You are in the camp of the rational intellectualists. Pragmatically, Convinced you can make it happen, again and again. There is no such thing as a infla/defla, exit or backdoor. All beginnings and ends must pass through the same single entrance.

Zero or negative IRs come and go. Permanent Currency depreciations start and stop. And so on.
Deflation is in fashion. An elegant way to explain what we think we are seeing. They are trying to orchestrate a deflation AS ANOTHER ATTEMPT TO FIX IT .

Difficult, yes very difficult to come to terms with such an idea. I rather would like to join your cautious optimism and be able to get on with a normal approach of the markets.

I'm only projecting socio/economic "Micro" events into a macro picture. People and businesses on the corner of the street. Their behavior...their thoughts...their reactions.
I do agree, that it is a very unconventional way of pretenting to know something about economics.

What the orchestrates do forget, is that people as individuals and later as groups can change their attitudes drastically and very suddenly in non-accordance with the music : "I" and later "we", don't dance anymore to your tune ! Basta !

Nice to hear you dear Henry. Gold the deflating metal...pssssst, ha-ve-so-me-mo-re, encore.

Have just received the latest issue of News and Views; it is simply outstanding! Talk about "must reads". Thanks for keeping a simple mind on your mailing list....CM

http://www.larouchepub.com/other/2001/2834chervonetz.html
Value-based currencies---

The Fed is manipulating its paper into oblivion. If the United States, trapped in a quagmire of derivatives must liquidate our treasury to keep the banking system afloat, then we will indeed be the last country on Earth to allow PM based currencies. I think that the Fed has set upon a course to preserve the strength of the dollar at all costs by maintaining POG at $275/oz.+-. Putting PM's into the hands of the people via a value-based currency provides equilibrium in world currencies and removes the manipulative power of CB's. Of course, banksters hate that idea.

My friend Raha broke the story of the Russian's going to value based currencies via the minting of their Chervonets first. As a result I wrote several posts regarding the possibilities that the Russian intention was to crash the dollar via trading gold coins to their citizens for hoarded FRN's (some $100BB currently estimated inside Russia).

According to the "Will Russia Light the Fuse On 'Paper H-Bomb' of World Debt?" the Russians opting---- "for "Chervonets," explaining that the coin will not be valued at its face value of 10 rubles or strictly according to its gold content of 7.742 grams, but will be subject to a regular price-fixing by the Central Bank, based on the price of gold on the London exchange, the ruble exchange rate of the dollar, and "the interests of the Central Bank itself, and of the retail network." The first gold coins were to be received by commercial banks, authorized to conduct sales and purchases of chervontsy.
Interviewed by Nezavisimaya about the Bank of Russia move, senior liberal reformer Yevgeni Yasin said that he thought that "the gold chervontsy will not be used as a medium of exchange, but will be a means for savings and accumulation."

The Russians have frozen all import and export of PM's for the time being. The Fed's only hope to stave off the dollars complete demise may be that the Russian and Chinese Central Banks are just as corrupt as they are in reference to the manipulation of Gold.

If indeed the coffers of our national treasury are being drained, either physically or otherwise, then the only alternative that we as citizens have for hanging onto gold is to hoard it personally. The Russian's (and Chinese) now have more than enough gold ammunition accumulated to begin this all out assault on the FRN.

As a short term defense you had better let the POG rise Alan until they can talk Sen. Phil Gramm into replacing you.

BR549

Gentlemen,
Thank you for great posts. I've really enjoyed them, though I wouldn't accept an invitation to your respective tea parties -nor, would the Chinese, I presume.
As even the English spoil their great Darjeeling and Earl Grey's by diluting the brew with milk, honey or lemon -I shudder as to the barbaric dilution of the majestic taste of the true brew ;-). In the Austrian Alps you'd lace your tea with only with clear distilled - Schnaps - called Jaga-Tee (hunters tea), Ha! - pretty similar to Irish Coffee...

Well, while we're lacing the global economy with more monetary dilution than any tea can absorb, without being classified as mere hot water, more green leafs are supplied to add color. Though the taste remains stale and the waste
of paper leafs fail to improve the tonic. An economic brew watered down to mildew ...

Ever tried tea with flakes of gold? Supposed to be good for health and wealth - I was led to understand!

au a-g'nite - cb2

I have been researching the Fed and ran across an interesting quote (interesting to me anyway) and thought some of you might want to read it (if you haven't already).
"The Federal Reserve System establishes the most giantic trust on earth. When the President signs this act, the invisible government by the money power will be legitimized. The new law will create inflation whenever the trusts want inflation. From now on, depressions will be
scientifically created."
Congressman Lindbergh in 1913

I've never liked my tea "white" as the anglo-saxons say. BTW, where can I find this wonderful Austrian moonshine--N.O. perchance? Hopefully speaking.....CM

BR549-- This idea of gold coins has been floated out of Russia every few years. It is just another one of their ploys, like a big chess game. Even reported previously here at USA gold, by TYoung who had picked it up from "Donald" over at Kitco. more urban legends from Russia?

Here is an old repost from October 11, 1998 from the USA Gold archives.
******************
TYoung (10/11/98; 11:09:12MDT - Msg ID:523)
Russia minting gold coins...to USE...
From the esteemed "Donald" at Kitco...what a find...and the first country to turn to gold shall be saved...IMHO.

Here is the URL http://www.russiatoday.com:80/rtoday/business/news/98100906.html

Tom
************************

The link is no longer any good, but you get the idea, you can't believe everything you read on the internet at the time you read it...
That's all from Tannehill

Down scope.
90' Starboard Sir.
Helm Ahead Full. Depth: one, five, zero.
Aye Sir, Ahead Full.
Sonar Con.

Second Hit Sir! (Consumer Confidence)
Contact closing fast, Dead ahead sir.
Gentlemen, We are going to play a game of CHICKEN!

One, five, Zero, Depth Sir.
Tactical, Check C.P.M. (countermeasure/protection/maximum)
(CENTENNIAL PRECIOUS METALS)
Chief,they have the ASWPPT system and we may have to do some fancy driving.
( Anti-sub warfare plunge protection team)
Sir, those IRC8 torpedos and M3 Depth Charges may be a problem. (Interest rate cut#8/M3 money supply)
Steady as you go Chief.
Aye,Sir.
-----------------------------------------------------------

No bargain hunters today? Has the plunge protection team run out of steam?
Slingshot

... I'm booked at the Sheraton as I understand that's were the main event is taking place. Boring? - no, as I intend to scout the land as well as looking forward to meet you all - and will bring a dilutive Jaga Tee tonic along.

(BTW- was quite pleased to have had a call from a lady in the organzing committee, telling me she had to call Bill Murphy for may phone number ... small world "gold bug" department).

So long - cb2

"As even the English spoil their great Darjeeling and Earl Grey's by diluting the brew with milk, honey or lemon -I shudder as to the barbaric dilution of the majestic taste of the true brew ;-). In the Austrian Alps you'd lace your tea with only with clear distilled - Schnaps - called Jaga-Tee (hunters tea), Ha! - pretty similar to Irish Coffee..."
. . . . . .
In the Swiss Alps (particulary Wallis) you can ask for a black tea served with a shot of "Dole" wine.....that was one of my favorites...

POS

Interstate-"From now on, depressions will be scientifically created."
Congressman Lindbergh in 1913"
The Fed sure did a bang up job of scientifically creating one during the 30's.

Tannehill (msg#: 61098)

http://www.therussianissues.com/text/stories/2001/06/06/991817178/994254726.html
"The Chervonets, the replica of gold coins that circulated in Russia in the 1920s, has made a historic comeback after the Bank of Russia put them in circulation on Tuesday. The Chervontsi that have cluttered the shelves of the Bank of Russia's depository since the 1980 Moscow Olympics have been declared to be a legitimate payment means on the territory of Russia together with coins issued after January 1, 1998. As a result, Russia has got a new financial instrument that may soon become a serious alternative to the U.S dollar."

http://www.larouchepub.com/other/2001/2828_chervonetz.html
"Russia is getting ready for the dollar to crash. Preparedness measures have moved from the realm of published warnings, to concrete actions, such as the Central Bank's decision to put the gold chervonets coin into circulation. The short-term purpose of that move is to attract Russians' savings out of the dollar, and into the Russian chervonets, in a country where $100 billion or more is held in cash (U.S. Federal Reserve Notes). Beyond that result, the Russian currency shift could become a stepping stone to more profound changes in international monetary policy�as nations seek safety from the disintegration of the Anglo-American-centered world financial system."

http://www.cbr.ru/eng/bank-notes_coins/memorable_coins/
"According to the decision of the Board of Directors of the Bank of Russia taken on March 5, 2001 the gold Chervonets coin and the silver one "Sable" are circulating on the territory of the Russian Federation as legal tender equally with new coins put into circulation from January 1, 1998."

There sure are a lot of links out there now pertaining to this subject. In fact there are over 300 additional links on the Internet for the action that Russia's CB put into effect on 3/2/01. You are confusing the coin with the intent. The Russian's want those hoarded FRN's out from underneath their citizen's mattresses. That is the intent.

BR549

I was interested to hear more from 'the other department'on the prophesy in question. It is interesting that many signs today point I believe to the return of 'the metal'.

I have just returned from Switzerland where I sold some 40 Kruger Rands from a Metal account that I held with a large Swiss Bank. I was told that they could not give me a an exact rate as it takes approx 2 working days to
finalise the deal....when I placed the selling order the gold price was SFR466 and a couple of days later (the rate the bank credited my account with was SFR459.) I asked the sales person that this wouldn't make much sense as in theory the gold price cld drop by half within two days and a
large investor/seller cldn't get an accurate position. But apparently this is the way it's done in Switzerland (although some Swiss Bankers I know disputed that). I have written to the Eidg. Bankenkommission (Federal Banking Commission in Berne, Switzerland and awaiting their result)
but I was wondering if this is a world wide practice....When I wrote to GM of that Swiss Bank I told them that I was going to publish my experience on a bulletin board if I could find one that deals with gold coins....now I might just have found one....
Would appreciate if you cld give me some leads where I cld obtain more accurate information on this..
thankyou
Fish

BR549
Confused to say the least, you want links on the internet-- do a google search on Russia international debt default and LTCM debacle. And now you want to believe that a country that declared bankruptcy and defaulted on its loan payments is going to gather the where with all to issue enough gold coins to make a difference. Somebody has been talking to Alice and the white rabbit, offf with their heads...
That's enough from Tannehill

Though (poor old) Solomon Weaver's Dole in the Wallis (Vallais) - seems to me you've 'skied' Le Grande Culouir in Verbier and ended up at Attelas' II, mon dieu, before the they've doled out the last bouttelle of Dole - after the experience I've been in need of the tonic ... .
The meeting place for the pistaniards to crash the (de-)luge down over moguls (Mugeln)to an alpine town, where they please to either do the Raclette or the cheese fondue, with the Kirsch (cherry schnaps) - you bet! ... have disconnected me with "Garcon" - another Dole or send me straight to the "Garconniere", mon ami, Pierre, drole?

Ski the Alps - the ancient gold producing areas -cb2

... What a sin - to get a message across to your kin (of mind), so never mind ....

Jim grant opines in the N.Y. Times
(richard640) Sep 10, 19:39

September 9, 2001

Sometimes the Economy Needs a Setback
By JAMES GRANT

The weak economy and the multi-trillion-dollar drop in the value of stocks have raised a rash of recrimination. Never a people to suffer the loss of money in silence, Americans are demanding to know what happened to them. The truth is simple: There was a boom.

A boom is a phase of accelerated prosperity. For ignition, it requires easy money. For inspiration, it draws on new technology. A decade ago, farsighted investors saw a glorious future for the personal computer in the context of the more peaceful world after the cold war. Stock prices began to rise � and rose and rose. The cost of financing new investment fell correspondingly, until by about the middle of the decade the money became too cheap to pass up. Business investment soared, employment rose, reported profits climbed.

Booms begin in reality and rise to fantasy. Stock investors seemed to forget that more capital spending means more competition, not less; that more competition implies lower profit margins, not higher ones; and that lower profit margins do not point to rising stock prices. It seemed to slip their minds that high- technology companies work ceaselessly to make their own products obsolete, not just those of their competitors � that they are inherently self-destructive.

At the 2000 peak of the titanic bull market, as shares in companies with no visible means of support commanded high prices, the value of all stocks as a percentage of the American gross domestic product reached 183 percent, more than twice the level before the crash in 1929. Were investors out of their minds? Wall Street analysts were happy to reassure them on this point: No, they were the privileged financiers of the new economy. Digital communications were like the wheel or gunpowder or the internal combustion engine, only better. The Internet would revolutionize the conveyance of human thought. To quibble about the valuation of companies as potentially transforming as any listed on the Nasdaq stock market was seen almost as an act of ingratitude. The same went for questioning the integrity of the companies' reports of lush profits.

In markets all things are cyclical, even the idea that markets are not cyclical. The notion that the millennial economy was in some way "new" was an early portent of confusion. Since the dawn of the industrial age, technology has been lightening the burden of work and driving the pace of economic change. In 1850, as the telegraph was beginning to anticipate the Internet, about 65 percent of the American labor force worked on farms. In 2000, only 2.4 percent did. The prolonged migration of hands and minds from the field to the factory, office and classroom is all productivity growth � the same phenomenon the chairman of the Federal Reserve Board rhapsodizes over. It's true, just as Alan Greenspan says, that technological progress is the bulwark of the modern economy. Then again, it has been true for most of the past 200 years.

In 1932 an eminent German analyst of business cycles, Wilhelm R�pke, looked back from amid the debris of the Depression. Citing a series of inventions and innovations � railroads, steelmaking, electricity, chemical production, the automobile � he wrote: "The jumpy increases in investment characterizing every boom are usually connected with some technological advance. . . . Our economic system reacts to the stimulus . . . with the prompt and complete mobilization of all its inner forces in order to carry it out everywhere in the shortest possible time. But this acceleration and concentration has evidently to be bought at the expense of a disturbance of equilibrium which is slowly overcome in time of depression."

R�pke wrote before the 1946 Employment Act, which directed the United States government to cut recessions short � using tax breaks, for example, or cuts in interest rates � even if these actions stymie a salutary process of economic adjustment. No one doubts the humanity of this law. Yet equally, no one can doubt the inhumanity of a decade- long string of palliatives in Japan, intended to insulate the Japanese people from the consequences of their bubble economy of the 1980's. Rather than suppressing the bust, the government has only managed to prolong it, for a decade and counting.

Booms not only precede busts; they also cause them. When capital is so cheap that it might as well be free, entrepreneurs make marginal investments. They build and hire expecting the good times to continue to roll. Optimistic bankers and steadily rising stock prices shield new businesses from having to show profits any sooner than "eventually." Then, when the stars change alignment and investors decide to withhold new financing, many companies are cash-poor and must retrench or shut down. It is the work of a bear market to reduce the prices of the white elephants until they are cheap enough to interest a new class of buyers.

The boom-and-bust pattern has characterized the United States economy since before the railroads. Growth has been two steps forward and one step back, cycle by cycle. Headlong building has been followed by necessary tearing down, which has been followed by another lusty round of building. Observing this sequence from across the seas, foreigners just shake their heads.

Less and less, however, are we bold and irrepressible Americans willing to suffer the tearing-down phase of the cycle. After all, it has seemed increasingly unnecessary. With a rising incidence of federal intervention in financial markets, expansions have become longer and contractions shorter. And year in and year out, the United States is allowed to consume more of the world's goods than it produces (the difference being approximately defined as the trade deficit, running in excess of $400 billion a year).

We have listened respectfully as our financial elder statesmen have speculated on the likelihood that digital technology has permanently reduced the level of uncertainty in our commercial life � never mind that last year the information technology industries had no inkling that the demand for their products was beginning to undergo a very old-fashioned collapse.


Even moderate expansions produce their share of misconceived investments, and the 90's boom, the gaudiest on record, was no exception. In the upswing, faith in the American financial leaders bordered on idolatry. Now there is disillusionment. Investors are right to resent Wall Street for its conflicts of interest and to upbraid Alan Greenspan for his wide-eyed embrace of the so- called productivity miracle. But the underlying source of recurring cycles in any economy is the average human being.

The financial historian Max Winkler concluded his tale of the fantastic career of the swindler-financier Ivar Kreuger, the "Swedish match king," with the ancient epigram "Mundus vult decipi; ergo decipiatur": The world wants to be deceived; let it therefore be deceived. The Romans might have added, for financial context, that the world is most credulous during bull markets. Prosperity makes it gullible.






To richard640...From Goldenrod.
() Sep 10, 19:31


I appear before you with tongue firmly pressed in cheek!

First I would like to say that I read all your posts and find interest in them. The forum would not be the same, being poorer without them.

As for the fulsome praise you heaped upon my humble head, my first thought was to protest as to my unworthiness.

On reflection I decided to heed the long ago advice given to me by a dear acquaintance, who said to me:

"You should really learn to except praise graciously, although, I am afraid, in your case, it will be scant and offered at rare intervals".
Keeping that advice in mind, I do indeed thank you for the kind words.

Some of the time I do take the ideas of others and...re-work them. Giving myself an aura of erudition, which, in the main, rightly should belong to others.

Below, I have tried to express what I mean, or have I?.......[;-).



When it was said "Above all else, to thine own self be true".

What the man was only saying was "You should stick to you, like glue".

And when that harassed king cried out "Once more unto the breach, dear friends",

What he was really trying to tell them was, "We have a fence to mend!".

When put into simple language, much easier to understand,

Thus "Alas poor Yorrick, I knew him well",

Translates to "As of late, he was six feet underground".

And Hamlet's famous soliloquy "To be or not to be?"

Turns into a more understandable,
" Should I be the death of me?"

There are lots of well known phrases, that need a cleaning up,

So "veni! vidi! vici!" would read "I won, so you belt-up!".

I'm sure you could think of many more, that, if their essence were clarified,

Could continue on in a living tongue, and not in dusty books reside!

YHS...Goldenrod.


- Alea iacta est - Ceasar, before crossing the Rubicon ...

cb2