Thanks - great bedtime reading! Sweet dreams all.
WaveriderView Yesterday's Discussion.

$$$$$296.00$$$$$

Danger...for U.S. in IsraelIsrael is trying to get the U.S.to open the next terrorist front in Israel occupied territory.
They are trying to get the U.S. troops to do thier fighting for them.We are getting sucked in if we do this.
Sharon needs to go home and shut his big fat mouth.
It woulden't surprise me if a U.S. representative would get killed there as a justification to suck us in.

$$$$$275.50$$$$$

$$$$$$$$$$273.00$$$$$$$$$$$$$$

What does your post have to do with Gold?

No reasonable person can doubt that the suicide bombers attacking Isreal are terrorists?

Amd a reasonable person could wonder whether or not you are
an Anti-semite, judging from your comments. Or even a Jew hater.

CONTEST
$$$$$350.00$$$$$

Cause for price rise.
A royal prince will will be born in Japan.
The government will announce the minting of a commemerative gold coin to celebrate the first male born since 1965 in the worlds oldest monarchy.
The coin will be available to all Japanese citizens at the equivalent of $300 u.s. an ounce.
Best wishes for the princess.
(one can hope, but likely another failed opportunity to move 70 million ounces)

Michael:

I received the latest quarterly News and Views yesterday, and put a dent in it last evening. Professional presentation and quality content. My hat is off to you.

Thanks.

Whoops, just heard it`s a princess. congrats to the family

I agree with your post. I feel their is too much European opposition to further Middle East intervention, for US bombingto spread outside Afganistan. Unless, as you point out, their is a Mossad hit (or CIA, KGB, MJ12, etc.)

Beyond that statement, I just can't be civil. So I will stop here.

Have a good weekend all,

TheCoinGuy

You are more than welcome and I am glad you enjoyed it. I hope to find more interesting and enlightening information to bring back to the forum in the future as close to and on topic as possible. This neophyte, as well, is searching for truth on a very rocky path, which is not always about PMs or the economy. At the end of this yellow brick road, I know we will all find what we have been looking for, however slippery the slope may have been.

Good luck to all and be well.
____________________________________________

$$$$ 271.50 $$$$

The PTB are capping POG, preventing war, terrorist, and economic jitters from triggering a safe haven buying deluge, that would grow into a tidal surge, breaching their puny fortifications on their manure island. They have instructed the PPT to prop the DOW and other indices. They have encouraged Americans to borrow against their belongings, max out credit lines, and hold stocks for "next years recovery". They are parading mistletoe attired celebrities, entertainers, politicians, and pastors as merry and patriotic spokespeople for the "American Way" and "Christmas Spirit". They may wish to insure that the most profitable retail month is not a bust.

http://www.siliconinvestor.com/headlines/financial/20011201/390432.htmlSnipppit:

BUENOS AIRES, Argentina (Reuters) - Argentina will convert peso bank deposits into dollars and temporarily limit cash withdrawals, a top official told local radio on Saturday amid fears of a run on banks by nervous savers.

"There is a restriction on the use of cash," Cabinet Chief Chrystian Colombo said. "You can't take out more than $1,000 in cash."

"The government has made these decisions so that the people can truly feel secure that their money is in the bank and that, in accordance with the law, that money is untouchable and that money, in accordance with the law of convertibility, is being transferred immediately into dollars in order to ensure all citizens that have fixed term deposits that their savings are secure," Colombo said.

Waverider: Faith in the government...swallow their line of BS...believe that black is white and white is black, and... you too can feel "secure".

Progress Report as of 12/1/01 10:30MT
------
MK says: HEAR YE! HEAR YE!! --we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex. Each entry must be surrounded by $$$$$$ dollar signs as follows $$$$$30,000$$$$$. The winner will receive a one tenth ounce Austrian Philharmonic. Let's make the guesses in 50� increments. All entries must be posted by 5pm MST Tuesday, December 4th.
====
$$$$$350.00$$$$$sourdough (12/1/01; 09:28:15MT
*****300.00*****Max Rabbitz (11/30/01; 20:07:20MT
$$$$$$296.50$$$$$$tedw (11/30/01; 19:50:42MT
$$$$$296.00$$$$$THX-1138 (12/1/01; 00:31:32
$$$$$ $292.50 $$$$$darkhorse (11/30/01; 18:48:35MT
$$$$$289.50$$$$$goldquest (11/30/01; 23:12:21MT
$$$$$287.75$$$$$Hydro (11/30/01; 20:53:23MT
$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$$ 281.00 $$$$$VanRip (11/30/01; 21:05:14MT
$$$$$$$280.50$$$$$$Solomon Weaver (11/30/01; 23:03:28MT
$$$$$$279.50$$$$$$The CoinGuy (11/29/01; 21:48:53MT
$$$$$$ 278.50 $$$$$$Broken Tee (11/30/01; 10:52:21MT
$$$$$277.5$$$$$Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$Waverider (11/30/01; 01:23:24MT
$$$$$$276.60$$$$$$wiley (11/29/01; 22:47:01MT
$$$$$$$276.50$$$$$$$goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$275.50$$$$$Ducat (12/01/01; 07:48:39MT
$$$$$$ 275.00 $$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$Black Blade (11/29/01; 21:54:25MT
$$$$$$274.00$$$$$mikal (11/30/01; 22:54:23MT
$$$$$$ 273.50 $$$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$$$$$$273.00$$$$$$$$$$$$$$Canuck (12/01/01; 09:00:56MT $$$$$272.50$$$$$Mythical (11/30/01; 18:08:12MT
$$$$$ 272.00 $$$$$Henri (11/30/01; 11:44:46MT
$$$$ 271.50 $$$$ Argent (12/1/01; 10:16:21MT
====
TickTock, Go HIGH or Go LOW, but go !
<;-)

$$$$$278.00$$$$$

You know what, Dark horse, I've been thinking what you've been thinking.

We're due for a contest and it would be productive to tap the collective wisdom around this noble Table. I agree.

But how to break the psychic dam and get the ideas to flow?

Nothing like a challenge to match the quality of the poster and lurkers present. This idea came to me while having
lunch today and browsing over the latest GRANT�S Interest Rate Observer. It seems that one of James Grant's
friends -- a fellow named Paul L. Kasreil who does economic research for Northern Trust Co. -- posed a most
far-reaching question. One that is making the rounds among people who talk markets as well as those who enjoy the
same as a worthy pre-occupation.

The question is this:

------------------------------------ Alan Greenspan: Maestro or Music Man? ----------------------------

The book, "Maestro", was the subject of a great deal of conversation here when it came out several months ago and
opinion was pretty much divided on it -- some thought it characterized a master at the peak of his powers. Others
saw it as a whitewash of a Fed chairman who simply injected liquidity willy-nilly at a time when the world had no
where to turn but the dollar. Some called him genius. Others called him lucky. Still others called him confused --
pumping money into the system at one turn and deriding "irrational exuberance" the next.

But Maestro or Music Man?? Now that's intriguing, and very much worth a contest.

For those of you scratching your head at the choice, I will remind you that The Music Man, one of America's
favorite all-time musicals, is the story of band director/con artist. The following from famed critic, Clifford Ridley
captures the Music Man for our purposes:

"Bierko is a younger Hill than Preston, yet with his slicked-back hair, his self- dramatizing gestures and his roving
eyes constantly scouting for trouble, he's every inch the two-bit con man. As advertised, he delivers Hill's fervid
patter with dash and musicality; and at the end, when he's unmasked by the unconditional love of a good woman,
he's quite touching. And he has a splendid foil in Luker, who sings Marian's arching melodies in a limpid soprano
and persuasively metamorphoses from chilly skeptic to loving co-conspirator. She also has a fine way of saying
"Ssssh" - an admonition, fortunately, that this ebullient production mostly ignores."

And then here's a passage from the preface to Bob Woodward's "Maestro" which more than adequately captures the
essence of the Maestro side of the coin:

"Greenspan is slated to remain chairman of the Federal Reserve until 2004. Not only is he a major figure in the
world's economic past, he is central to its future. He has been frank enough to stand before the new and amazing
economic circumstances that he helped create and in the end declare them a mystery. It is impossible to account fully
for the continuing high growth, record employment, low inflation and high stock market."

And, toward the end of this important book:

"Greenspan also represents something more than the confidence wing of the American Personality. He stands at the
point where the country's eternal optimism meets the country's abiding suspicion that something will go wrong. . .
That fear also creates a kind of excitement and anticipation.Greenspan stands at the crossroads of optimisim and
pessimism. Each of us is a character in the nation's great economic soap opera; Greenspan is both director and
producer."

So, the question before the table is this:

***** "Alan Greenspan, Maestro or Music Man?" *****

Lovable Con-Man or Brilliant Fed Chairman?

I will leave with another thought of Mr. Kasreil -- as I think the computer cannot be taken out of the present
equation without missing a major part of the analysis:

"Economics how do we measure that? Well, I can tell you there has been a very increase in productivity, at least at
my shop. When I joined the Northern Trust over 15 years ago, it took three senior economists and three research
assistants about two weeks to come out with an inaccurate economic forecast, and with this laptop, I can do it all by
myself in one day."

The world, I know, is not spinning any faster than it used to be but who among us would deny that it is. . . . . . . .
.So Maestro or Music? You be the judge.

Each entry must address the question in sufficient length but no more than is absolutely necessary to make the point
-- the eternal bane of the writer. An appropriate link is acceptable. The contest will be judged not on the choice you
make but on the erudition and argumentative skills used to make your case. Please surround your entry with stars as
shown. The winner will get a lucky French Angel gold coin -- the one they say Napoleon carried throughout his
campaigns until he lost it . . . . .the day before Waterloo. As Darkhorse suggests the entry-post must also include
some reference as to what the future might bring by the end of the year (for posterity's sake). As always, the post
must conclude with how all of this relates to gold and gold ownership -- and it is there that the worm turns, where
the contest will decided. The runners up -- two of them -- will receive a Mexican Azteca silver coin.

First time posters will receive a one-ounce U.S. Silver Eagle but in order to claim the price you must indicate that
you are a first-time poster with Jill Snyder (jill@usagold.com). The post must be an entry into the main contest --
"Alan Greenspan, Maestro or Music Man." First time posts in the price guessing contest (see below) do not count
toward the Silver Eage Prize. Pls include your current mailing address.

The posting contest will go from this moment through Sunday, December 9, 2001 when midnight graces the purple
mountain majesties.

* * * * * * * * * * *

In addition to the posting contest, we will have a price guessing contest. Where gold will close on Friday,
December 7th on the Comex -- the December contract. Each entry must be surrounded by $$$$$$ dollar signs as
follows $$$$$30,000$$$$$. All entries must be posted by 5pm MST Tuesday, December 4th.
The winner -- he or she who comes closest to that closing price -- will receive a one
tenth ounce Austrian Philharmonic.

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

Good luck all. May the best poster win.

$$$$$$288.50$$$$$

$$$$$$$279.00$$$$$$$

Hello There!I am a crazy canuck, that's right, one of your northern neighbors. I have been studying posts in this forum for quite some time now (lurking about), and I must say that I am very pleased with the various viewpoints presented in this forum. I must also commend various posters on their literary skills, some posts are quite poetic and thought provoking. I am also very pleased that I have been granted the opportunity to perhaps share a few ideas of my own, although I do not posses the economic background to the same degree as most of you do.
I really want to buy some gold Maple Leafs (1 oz) somewhere between $10,000 and $30,000 worth as my method of stability in investment form. What I find really frustrating is/are:

1) The value of the canadian dollar
2) The accessibility of the precious metal
3) The terrible markup of the coin over POG

It seems everyone feels you should have to pay so much for your gold, that if the value of it increases, you're certain not to make any gains. Sorry I must subject you to my perils, but I thought some of you might appreciate the frustration I'm experiencing here.

OH YES, I ALMOST FORGOT $$$$$$277.75$$$$$$ (Optimistic)

$$$$$278.00$$$$$

"Let's make the guesses in 50� increments."

I thought that meant on the dollar and half dollar...I see at least three that aren't....

The "increments of 50 cents" guidance from MK may have been AFTER some of those "guesses", OR it may have been an "error" in judgment.
<;-(

Gandalf the White (11/30/01; 22:02:50MT - usagold.com msg#: 66171)
UPDATE ------GC1Z Price Guessing Contest
Progress Report as of 11/30/01 21:30MT
------
USAGOLD (11/29/01; 19:37:04MT - usagold.com msg#: 66079)
HEAR YE! HEAR YE!! A POSTING CONTEST CALLING UPON YOUR MOST POWERFUL, WELL-HONED & ERUDITE SKILLS!! AND THIS IS GOING TO BE A GOOD ONE. .
In addition to the posting contest, we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex -- the December contract. Each entry must be surrounded by $$$$$$ dollar signs as follows $$$$$30,000$$$$$. The winner -- he or she who comes closest to that closing price -- will receive a one tenth ounce Austrian Philharmonic.
----
USAGOLD (11/29/01; 19:41:44MT - usagold.com msg#: 66080)
Contest!!
I neglected to put a close date on the price guessing contest. All entries must be posted by 5pm MST Tuesday, December 4th.
----
USAGOLD (11/29/01; 21:07:22MT - usagold.com msg#: 66096)
All. . .Contest!!
I have the good news that my far-seeing and wizardrous friend, Gandalf the White (who I predict will be starring in a movie real soon) will be monitoring the price guessing contest. Let's make the guesses in 50� increments.
====

I see that the Democrats have started spewing vomitous lies again. I during the presidential election I had predicted that George Bush or Al Gore would be remembered as the Herbert Hoover of our generation. It would not have mattered who was elected to the presidency. The recession was already locked in as early as March 2000 when the Internet and High Tech bubbles burst (in spite of some NBER bubble-headed academics). That was during the last year of the Bubba Clinton presidency. However, just as Herbert Hoover inherited an economic disaster, so too has George Bush.

Now the Democrats are calling this recession "The Bush Recession." It was inevitable as politicians are far from being the best and brightest that America has to offer. There are now Democrat Radio advertisements blaming George Bush for the deepening recession. Obviously there are hopes that the political seeds will be planted for the 2002 elections. It would not have mattered who was elected to the presidency whether it was George Bush, Al Gore, Harry Browne, Pat Buchanan, or Ross Perot. The result will be the same. There is no cure for the recession, it has to run its course.

This recession is going to be a gruesome affair as consumer and corporate debt are at record levels, corporate earnings are falling faster than lead balloons, and the "Bone Pile" grows at a furious pace. The Trolls, Pimps, and Pied Pipers of Wall Street are now screaming at the top of their lungs for Americans to buy, buy, buy�. It is somehow supposed to be patriotic to go into debt and be beholding to the banksters. Heck, just last month Goldman Sachs Pimp Abby Jo Cohen said that Enron shares were undervalued. Hmmm� All I can say is be careful, it's a jungle out there. In a word - "GRIM"

- Black Blade

Slayed some ducks this morning and now I'm off to slay more ducks!

$$$$$$320.00$$$$$$$ABCANUCK

Just to make sure we're all on the same page, when I said "50� increments" I meant full dollar or half-dollar guesses.

As such,

$675.50 OK

$675.00 OK

$675.10 Not OK

$675.25 Not OK

$675.60 Not OK

Etc.

If someone has guessed not rounding to dollar or half-dollar, you can make another guess, but to my knowledge only one was made outside the rule and it was corrected (which is OK).

IMO,proper credit(pun intended)for the recession must be given to it's true authors;Greenspan and the merry pranksters at the Federal Reserve.The reason the Fed was created was to take the money creation machine out of the hands of the easily swayed politicians.The bankers assured us that this was necessary for proper'stable monetary policy:wrong,total abject failure.

Now,when the finger of blame is being directed in various directions by differing groups with their own agendas(like the Fed),it becomes critically important to not let them get away with it again.No politician should wear the goat horns for this debacle,they are mere fringe players in the unfolding drama.That being said,Bush's remedies,including his dubious war aims,may just make him partially culpable in extending and amplifying the damage.

.

$$$$$272.50$$$$$

Correction!!!

My guess last night should read $$$$$300.00$$$$$$
not******300.00********

Got distracted by Maria and a few brews. Best keep those hobbits away from the brews.....Maria too.

Dec 10th POG for physical = $587 (and accelerating)
Heee heee
paper is toast
(Buenos Aires street corner)

http://m1.mny.co.za/422567CB004DBB8F/UNID/DMKY-4QTJYMThis article is a good *educational read* for a *basic* understanding of derivatives and the causal relationship between the gold derivative market and the POG.
Snippit:
"The danger, and allure, of derivatives is that one can control an inordinate amount of the underlying asset with very little capital. This is a double edged sword. Small changes in the price of the underlying asset can create eye-popping profits or cause instant bankruptcy."

Black Blade: Very admirable, kudos - sounds like you've got all your ducks in order :)

Cheers,
Waverider

Yep, the ducks are all plucked, cleaned, wrapped and lined up in the freezer. You could say that I got all my ducks in a row ;-)

$$$$$$268.50$$$$$$

http://www.globeinvestor.com/servlet/WireFeedRedirect/RT/D,D/20011130/wmath30?cf=GlobeInvestor/config&vg=BigAdVariableGenerator&slug=wmath30&date=20011130&archive=rtgam
Snippit:

Enron was a true Old Economy titan, a stalwart member of the Dow Jones industrial average, a multibillion-dollar colossus with real, hard assets and $170-billion (U.S.) in sales. And yet, this former blue chip is on its way to joining Pets.com and the rest of the Internet all-stars on the trash heap of history. Years worth of financial statements called into question, its debt downgraded to junk-bond status, its stock slashed to pennies from over $80 earlier this year, Enron is expected to file for bankruptcy protection soon in one of the largest such cases in U.S. history - almost twice as large as Texaco, which went under in 1987. Enron is an example to others that corporate hubris and investor mania were by no means restricted to Internet startups.

If there is any overlap between Enron and the dozens of dot-com flameouts that have plunged earthward over the past year, it would be the fact that the Houston company was in some senses just as virtual an entity as Egghead.com - or, perhaps a better example: the hedge fund known as Long-Term Capital Management, which collapsed in a multibillion-dollar pile of debt and derivatives in 1998. Like LTCM, Enron's assets were primarily based on derivative contracts involving natural gas, electricity, and other commodities the energy giant had gotten into swapping, such as various metals, pulp and paper, water, and even spare Internet capacity.

Not unlike the Internet startups that so many investors ridiculed for their New Economy, "end of the business cycle" hubris, Enron also thought it was a different breed of company - one to which the normal rules of finance no longer applied. What started as a way of hedging natural gas deliveries became a virtual derivative-trading giant, with thousands of contracts and counter-contracts swapping everything from lumber and plastic to weather-related insurance risk and fibre-optic bandwidth. Adding off balance-sheet financing to the mix made the whole structure even more unstable, until the slightest disruption was enough to make it topple.


Black Blade: The derivatives game is a "virtual" minefield. We should expect to see more of this over the next few months as corporate earnings go from "cash to trash." The rumor is that they were involved in base and precious metals as well. Probably not enough to stir the PM markets. I understand that CB Gold loans may be cut back further in coming months. Perhaps that is why hedge funds like AngloGold and Barrick are in a panic and looking to snap up other miners. The world of exotic investments could be in for a rude "wake up call."

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1007161669931&call_page=TS_Business&call_pageid=968350072197&call_pagepath=Business/News&col=969048863851
Snippit:

COME, LET US peck the putrefying carcass of Enron Corp. Let us pluck the tastiest morsels that still cling to the Houston-based "energy giant," the company yesterday removed from the Dow Jones "Titans Index," the one expected to file for bankruptcy any minute, marking the biggest, fastest corporate collapse in North American history. (Old stock price: $89 U.S.; new stock price: 26 cents.)

Ah, here's something meaty. Arthur Andersen LLP, principal auditor to the company. Fees to scrutinize the pipeline company turned online energy trader in the year 2000: $25 million. That would be the payment for ensuring that the company's financial statements were prepared in accordance with Generally Accepted Accounting Principles. Those would be the same financial statements that have been thrown out the window, redone and refiled, now weighted with hundreds of millions of dollars in vanishing earnings.

Yum. More flesh. Oh look! It's Arthur Andersen again. In addition to the $25 million, the Big Five accounting firm was paid $27 million in "Other Fees." Said "other fees" relate to "business process and risk management consulting [and]... due diligence procedures related to acquisitions or other activities." Etc.


Black Blade: Now Arthur Andersen LLP is under investigation for "cooking the books." The SEC wants to know what the hell Arthur Andersen LLP was doing when they should have been auditing the books. It appears that there was a conflict of interest or possibly some bribery involved for Arthur Andersen LLP to look the other way.

http://www.financialsense.com/stormwatch/update.htm
Snippit:

For investors and consumers it was obvious from the mounting layoffs and shrinking asset portfolios that the economy was in trouble, obvious to everyone except Wall Street and the Networks. The economy continued its descent which began in the summer of 2000. The job layoffs, the drop in capital spending, and a contracting manufacturing sector told the whole story. Wall Street was convinced that the downturn was just a minor squall that would soon pass. The consecutive Fed rate cuts would surely guarantee a return to normal weather. The mantra became the "V" shaped recovery, a short blip on the radar screen, expected by the third quarter with profits and the economy back on track. Unfortunately, it became clear by the second quarter that wasn't going to happen. Company earnings were contracting along with the economy. Layoffs continued and companies issued warnings for the second half of the year.

So far the greatest asset bubble of the last century has been partially deflated without generating a systemic crisis. Investors have suffered massive losses in their wealth. The job market is soft and more jobs are being lost each week. The technology industry is still suffering from a capacity glut and the manufacturing sector is still contracting, but the ship is still afloat. The clock is ticking and we still have those wild cards of derivatives, oil, and war. We should know within the next two quarters if Mr. Greenspan's grand money experiment will have worked. If he is able to reinflate the economy, resurrect the stock market bubble, keep gold and silver prices from rising, keep a lid on energy prices, deflect the collateral damage from war, bring world peace, and tame the derivative monster from turning into a financial contagion, he would have rightfully earned a place on the cover of Time magazine. He would indeed have become Greenspan Superman.


Black Blade: Jim Puplava has another good article worth reading. The Economy is in a shambles and sinking fast. Get out of debt while you can, get dry goods and basic necessities stored away as you would for a natural disaster or extended unemployment, get Gold and Silver portfolio insurance, and get enough cash on hand for several months expenses. Who would have predicted the events of the last few months (Terrorist diving passenger jets into skyscrapers, the super giant Enron corporation going tits up, etc.). Prepare for the worst and hope for the best. We live in "Interesting Times."
View Yesterday's Discussion.

No country risk from Normandy -AngloGold
Snippit:

MELBOURNE, Dec 2 (Reuters) - South Africa's AngloGold Ltd on Sunday rejected suggestions that country risk could count against it in the battle with U.S.-based Newmont Mining Corp (NYSE:NEM) for Australia's Normandy Mining Ltd (Australia:NDY.AX ). Newmont has highlighted that it is has no South African political risk exposure, offers a U.S. domicile and a balanced country risk portfolio.

AngloGold Chief Executive Officer Bobby Godsell told the Seven Network Sunday Sunrise programme his company also had a balanced portfolio and country risk was not an issue. ``I think that's a bit rich, really. I think that's the Americans coming over the top,'' he said. Godsell said Newmont this year had made its profits out of Peru, Bolivia, Indonesia and Uzbekistan.

He added AngloGold's U.S. operations had been affected by the California power crisis which caused soaring electricity rates. "Now frankly, you wouldn't expect in a First World country, would you, for a power grid to collapse. All countries have risk profiles. I think for risk the best you can do is balance your portfolio,'' he said.

Black Blade: Interesting comments about the US power crisis, true but still interesting. AngloGold "Must" win Normandy at all costs. They like Barrick have backed themselves into a corner. They "MUST" acquire cheap ounces to deliver into their hedge book.

$$$$$$297.50$$$$$$ ($300 soon to be breached but maybe later in December)
------------------------------------------------------------
Sie Buena Fe - from Buenos Aires?, my national team scraped a very last minute win at your Plata stadium in front of 80,000+ locals, phew!(smile). - Netking

I do like the fact that he views credit expansion as culprit rather than just monetary expansion by the banks. However, there are a great number of issues he ignores:

1. The debt instruments he speaks of were funded by cash flows. At the typical rate of return on assets of 6-9% to 15-20% for SP companies, one would expect credit to grow in some proportion to that, as returns are rarely spent on consumption. Thus credit expansion is not necessarily artificial, and thus not by itself a sign of economic ailments.

2. Arbitrage Debt such as embeded within much of the financial chains of ownership (a fiduciary company sells a retail contract at a particular rate, and uses proceeds to buy other debt securities that are themselves composed of other debt securities) is not a "financial bubble" because the base assets underlying the whole chain are the same. The methodology of counting each layer in the chain as further debt and then adding up the total is misleading. While these structures were not at all possible those many years ago, the current low cost of accounting, clearing, and trading makes this type of structure much more attractive as it allows customized diversification for both the retail investor and his fiduciaries, and is only a substitute for direct ownership of the base debt by the retail investor.

3. The effect of government taxation and spending on the net rate of return is substantial and must result in an increase in financial asset values as effective government taxation falls, even if the cash flows behind the financial assets are the same. In this process, as nominal interest rates fall to the borrower along with government taxing and spending, the net return to the lender can remain the same.

Thus if a business producing $1 bil of cash flow and tax rates are 60%, that cash flow can produce only $0.4 billion to the lender thus a fully leveraged business would be able to service a $10 billion loan at an interest rate of 10% ($1 bil/10%), but the lender would only see a 4% return. If tax rates dropped to 40%, then the same 4% net return to the lender would imply an interest rate of 6.7%, meaning that the same business can service the interest on a $15 billion loan ($1 bil/6.7%), which it would certainly do. That in itself would raise outstanding credit by 50%, not counting the added expansion in production and incomes in the overall economy as a result of government's falling share of consumption and income.

4. He does not look at the classic business investment boom associated with the expansion - which peaked at 17% of domestic spending without R&D, and at near 30% with it. These indicate a rise in investment one would expect from a contraction in government's burden on the economy.


5. His talk of credit expansion rather than monetary expansion brings to the fore the point that the Fed Funds rate, rather than being a means for the Fed to add or subtract liquidity of its own, is acting as a statutory interest rate.

The Fed is not adding substantial permanent liquidity itself, but has banks and the rest of the credit market players do it. In expectation of Fed actions to change rates, the market preempts the banks by lowering short rates before the banks have a chance to start lending at the lower Fed rate cost of funds (plus their margin).

Noland does not touch on any of this.

6. There is a "deflationary" type demand for credit just to pay off outstanding debts. The appropriate analysis of the credit expansion in the fiat monetary world is with the tools of the monetary supply and demand balance. With this balance at hand, one can see that the actual EXCESS credit expansion was not on a large scale, but rather restrained (if not non existent) during the bulk of the expansion, with the post LTCM credit expansion of 98-99 being the only clear cut period of a classic credit bubble.

7. There should also be an obvious effect of savings and spending decisions by people and businesses on interest rates - particularly short term ones. Thus the "flight to liquidity" characteristic of recessionary fears on the part of both businesses and consumers is a flight to short term funds, which SHOULD lower short rates. The near freeze in corporate investment spending and the drop in consumer spending following the 9-11 attacks caused exactly that kind of motion, thus causing a substantially greater portion of funds to flow to banks and money market funds rather than equities and private market bonds, and factors of direct investment. The result must be a substantial drop in short rates regardless of Fed action, in fact, it would be irresponsible in the extreme if the Fed did not react with a rapid decline in its own short rate.

7. Noland ignores the very substantial flows resulting from EXCESS credit expansion driven by monetary injections by central banks abroad during the decade of the 90s - carry trades of various sorts. He ignores the international credit flows effects that the BOJ created using near 0% rates over half a decade, and through its very agressive injection of funds.



Therefore, I tend to discount his opinions though I follow more closely his reasoning and his rich library of quotations from economists I do appreciate.

http://inq.philly.com/content/inquirer/2001/12/02/business/PERS02.htmPhila. Inquirer, Sunday Business Front Page.

Saw a friend yesterday. Talked about Enron. He got 'killed', as did his parents. He's very angry at broker, hypesters, and market in general for this and past losses. Will be moving to self manage all family funds. Told him about gold. Very, very intersted in options and stocks. It's a start.
************************

"...Shareholders, who have filed a blizzard of lawsuits, have reason to feel wronged: For years, the company relied on an accounting loophole to conceal the enormous risks it was taking. While the Enron case is extreme, this loophole is widely used by American corporations, and the Securities and Exchange Commission and Congress should close it.

The back story to the Enron drama began in the early 1990s, as the company moved beyond its gas-pipeline business to found the energy-trading industry, made possible by deregulation.

In recent years, the company served as a sort of combination stock exchange and brokerage house. It made a market for hundreds of products that enabled power utilities, big energy users, and speculators to buy and sell energy the way traditional commodities traders buy and sell corn, soybeans and sow bellies.

This business requires enormous capital, since Enron, when it played the role of middleman, had to guarantee that contracts between other parties would be fulfilled even if one party defaulted. It's similar to the way a bank guarantees you will get your savings back even if your deposit was lent to a homeowner who didn't make his mortgage payments. Except that a bank has federal deposit insurance; Enron did not.

In the late 1990s, Enron executives bragged that they had found a clever way to raise all this capital: They used subsidiaries, partnerships, and other "special-purpose entities" to keep the related transactions off Enron's financial statements. That way, Enron could avoid the pitfalls of ordinary capital-raising methods. Selling stock would have diluted the value of Enron's existing shares; selling bonds would have hurt the company's credit rating.

Moreover, by using special-purpose entities, or SPEs, the company could hide behind accounting rules that let it keep secret essential information about assets, debts, and future financial obligations..."
***********

'Special Purpose Entities'!

Reckless legislation, overly agressive management. Works fine when the bull is deemed eternal. Not so good when the bear facts are required.

Progress Report as of 12/2/01 10:10MT
------
MK says: HEAR YE! HEAR YE!! --we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex. Each entry must be surrounded by dollar signs as follows $$$$$30,000$$$$$. The winner will receive a one tenth ounce Austrian Philharmonic. Let's make the guesses in 50� increments. All entries must be posted by 5pm MST Tuesday, December 4th.
------
$$$$390$$$$$ Chicken man (12/1/01; 19:16:27MT
$$$$$350.00$$$$$sourdough (12/1/01; 09:28:15MT
$$$$$$320.00$$$$$$Scarab (12/1/01; 15:30:22MT
$$$$$300.00$$$$$Max Rabbitz (11/30/01; 20:07:20MT
$$$$$$297.50$$$$$$ Netking (12/2/01; 01:53:34MT
$$$$$$296.50$$$$$$tedw (11/30/01; 19:50:42MT
$$$$$296.00$$$$$THX-1138 (12/1/01; 00:31:32
$$$$$ $292.50 $$$$$darkhorse (11/30/01; 18:48:35MT
$$$$$289.50$$$$$goldquest (11/30/01; 23:12:21MT
$$$$$$288.50$$$$$slingshot (12/1/01; 13:02:04MT
$$$$$287.75$$$$$Hydro (11/30/01; 20:53:23MT
$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$$$281.50$$$$$$Buena Fe (12/1/01; 20:51:51MT
$$$$$ 281.00 $$$$$VanRip (11/30/01; 21:05:14MT
$$$$$280.50$$$$$$Solomon Weaver (11/30/01; 23:03:28MT
$$$$$$279.50$$$$$$The CoinGuy (11/29/01; 21:48:53MT
$$$$$$$279.00$$$$$$$Shermag (12/1/01; 13:30:47MT
$$$$$$ 278.50 $$$$$$Broken Tee (11/30/01; 10:52:21MT
$$$$$278.00$$$$$Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$$ RobotGuy (12/1/01; 13:31:55MT
$$$$$277.5$$$$$Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$Waverider (11/30/01; 01:23:24MT
$$$$$$276.60$$$$$$wiley (11/29/01; 22:47:01MT
$$$$$276.50$$$$$$$goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$275.50$$$$$Ducat (12/01/01; 07:48:39MT
$$$$$$ 275.00 $$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$Black Blade (11/29/01; 21:54:25MT
$$$$$$274.00$$$$$mikal (11/30/01; 22:54:23MT
$$$$$$ 273.50 $$$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$$273.00$$$$$$$$Canuck (12/01/01; 09:00:56MT
$$$$$272.50$$$$$Mythical (11/30/01; 18:08:12MT
$$$$$ 272.00 $$$$$Henri (11/30/01; 11:44:46MT
$$$$ 271.50 $$$$ Argent (12/1/01; 10:16:21MT
$$$$$$270.00$$$$$$Flatlander (12/1/01; 18:32:56MT
$$$$$$268.50$$$$$$HopeingII (12/1/01; 22:37:42MT
----
<;-)

Progress Report as of 12/2/01 10:10MT
------
MK says: HEAR YE! HEAR YE!! --we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex. Each entry must be surrounded by dollar signs as follows $$$$$30,000$$$$$. The winner will receive a one tenth ounce Austrian Philharmonic. Let's make the guesses in 50� increments. All entries must be posted by 5pm MST Tuesday, December 4th.
------
$$$$390$$$$$ Chicken man (12/1/01; 19:16:27MT
$$$$$350.00$$$$$sourdough (12/1/01; 09:28:15MT
$$$$$$320.00$$$$$$Scarab (12/1/01; 15:30:22MT
$$$$$300.00$$$$$Max Rabbitz (11/30/01; 20:07:20MT
$$$$$$297.50$$$$$$ Netking (12/2/01; 01:53:34MT
$$$$$$296.50$$$$$$tedw (11/30/01; 19:50:42MT
$$$$$296.00$$$$$THX-1138 (12/1/01; 00:31:32
$$$$$ $292.50 $$$$$darkhorse (11/30/01; 18:48:35MT
$$$$$289.50$$$$$goldquest (11/30/01; 23:12:21MT
$$$$$$288.50$$$$$slingshot (12/1/01; 13:02:04MT
$$$$$287.75$$$$$Hydro (11/30/01; 20:53:23MT
$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$$$281.50$$$$$$Buena Fe (12/1/01; 20:51:51MT
$$$$$ 281.00 $$$$$VanRip (11/30/01; 21:05:14MT
$$$$$280.50$$$$$$Solomon Weaver (11/30/01; 23:03:28MT
$$$$$$279.50$$$$$$The CoinGuy (11/29/01; 21:48:53MT
$$$$$$$279.00$$$$$$$Shermag (12/1/01; 13:30:47MT
$$$$$$ 278.50 $$$$$$Broken Tee (11/30/01; 10:52:21MT
$$$$$278.00$$$$$Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$$ RobotGuy (12/1/01; 13:31:55MT
$$$$$277.5$$$$$Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$Waverider (11/30/01; 01:23:24MT
$$$$$$276.60$$$$$$wiley (11/29/01; 22:47:01MT
$$$$$276.50$$$$$$$goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$275.50$$$$$Ducat (12/01/01; 07:48:39MT
$$$$$$ 275.00 $$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$Black Blade (11/29/01; 21:54:25MT
$$$$$$274.00$$$$$mikal (11/30/01; 22:54:23MT
$$$$$$ 273.50 $$$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$$273.00$$$$$$$$Canuck (12/01/01; 09:00:56MT
$$$$$272.50$$$$$Mythical (11/30/01; 18:08:12MT
$$$$$ 272.00 $$$$$Henri (11/30/01; 11:44:46MT
$$$$ 271.50 $$$$ Argent (12/1/01; 10:16:21MT
$$$$$$270.00$$$$$$Flatlander (12/1/01; 18:32:56MT
$$$$$$268.50$$$$$$HopeingII (12/1/01; 22:37:42MT
----
<;-)

<;-)

$$$$$280.00$$$$$
I think gold moves back up this week.

I guess its pretty clear that Enron "cooked" its books. The question I have is how many other US Corporations are just plain lying about their financial situation. How widespread is it? Proforma liars and loophole liars. How many other kinds of liars are there. It does not give one a lot of faith in the US economy,the Stock Market,or the SEC.

$$$$282.00$$$$

OK Gandy, get me in.What if the price lands on 25 cents?

<;-)
Not to Worry, SIR Goldfly!!
The COMEX only uses tenths of a point in the pricing.
Perhaps the NEXT contest will use "dime" increments ?
We shall see.

http://biz.yahoo.com/rb/011202/business_stocks_outlook_dc_3.html
Snippit:

NEW YORK (Reuters) - For months, investors have seen the silver lining in every cloud, but a bucket of economic data this week may remind them an anticipated rebound is still far off, raining on Wall Street's recent rally and sending stocks lower. Investors pinning their hopes on a recovery by the middle of 2002 could get a dose of reality about the near-term outlook from upcoming economic statistics -- including Friday's key U.S. jobs data and a closely watched U.S. manufacturing sector report due on Monday.


Black Blade: This week could be "Interesting." However, the real harsh data will come out after the first of the year as many small and medium sized firms slash and burn. These companies wish to wait til after the holidays to give out the bad news and pink slips (when everyone is in debt from holiday shopping). Meanwhile there is absolutely no positive news to trade on. Corporate earnings are declining and as share prices increase it is ever more apparent that the stock market is grossly overvalued in spite of claims to the contrary by the Trolls, Pied Pipers and Pimps of Wall Street. It does not look to improve for some time. In a word - "GRIM"

http://biz.yahoo.com/rb/011202/business_enron_history_dc_1.html
Snippit:

NEW YORK (Reuters) - The sudden humbling of energy trader Enron Corp. (NYSE:ENE) is likely to earn the company a place in any roster of the biggest corporate collapses and financial scandals in history.


Black Blade: Interesting article. We should see a lot of fallout over this Enron derivatives scam.

http://biz.yahoo.com/rf/011202/wab002412_1.html
Snippit:

HOUSTON, Dec 2 (Reuters) - Enron Corp. (NYSE:ENE), its energy trading empire in tatters, filed for Chapter 11 bankruptcy on Sunday, and hit rival and one-time suitor
Dynegy Inc. (NYSE:DYN) with a $10 billion breach of contract lawsuit for pulling out of a last-ditch merger effort.

The filing in federal bankruptcy court in the Southern District of New York sought protection from creditors while Enron, burdened with at least $16 billion in debt, tries to reorganize its finances. Under Chapter 11 of the U.S. bankruptcy code, a company can continue to operate while it and creditors work out a reorganization plan. The lawsuit accuses Dynegy of wrongfully terminating a $9 billion merger deal last Wednesday. Enron also said it would implement substantial work force cuts, primarily at its Houston headquarters.


Black Blade: Tits Up! Shocking! Not really. It is finally done. 21,000 Enron employees eventually go off to the "Bone Pile" and many who lost their life savings in Enron stock while CEO Lay trots off with a cool $12 million. "Interesting Times"

http://biz.yahoo.com/apf/011202/ford_cutbacks_1.html
Report: Ford to Announce Cost Cutting Measures, Including Laying Off Hundreds of Hourly Workers

Snippit:

DEARBORN, Mich. (AP) -- Ford Motor Co. [NYSE:F] is expected to lay out several steps to stem losses, including cutting some benefits for white-collar employees and laying off hundreds of hourly workers. The latest moves, which could save the company hundreds of millions of dollars, are detailed in a draft of a company news release -- dated for issue on Wednesday -- that was reported by The Detroit News on Sunday. In that document, Ford chairman and chief executive William Clay Ford Jr. called the moves painful but necessary and said more actions are to come.

Black Blade: More nonessential "Bones" driven off to the growing "Bone Pile." In a word - "GRIM"

Mikal, are you from Texas?

Oro

Glad to see your detailed rebuttal to this weeks Bubble Report.

One of the great things in economics is so many differing opions that are all somehow right.

The main take home message for me from Noland is that consumers are using their homes to buy their durable goods.

I really appreciate your posts because they remind me that although the system is under stress.....there is still a lot of strength remaining in the dollar....and that is good because a rapid dollar demise would be devastating.....my hope is for a 30-50% correction over about 3 years..which would simply bring us back to historic norms...and let us export goods again...

POS

This must be a first! A federal bankruptcy court open for business on a Sunday! They must want to keep the markets orderly for Monday! To bad Enron didn't file for chapter 7. That would have really upset the NYSE.

$$$$ $269.00$$$$$

http://news.bbc.co.uk/hi/english/world/americas/newsid_1687000/1687201.stmSnippet:
The Argentine Government has announced emergency measures in an effort to prevent the collapse of its financial system as citizens rush to withdraw their savings. Savers will be restricted to withdrawing no more than $1,000 in cash per month, and - with a few exceptions - transfers of funds abroad will also be limited to $1000. . . . "

Comment: Hmmmm, the peoples search for confidence, security & above all . . . . sound money.

$$$$$290.00$$$$$

Progress Report as of 12/2/01 16:40MT
------
MK says: HEAR YE! HEAR YE!! --we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex. Each entry must be surrounded by dollar signs as follows $$$$$30,000$$$$$. The winner will receive a one tenth ounce Austrian Philharmonic. Let's make the guesses in 50� increments. All entries must be posted by 5pm MST Tuesday, December 4th.
===
$$$$390$$$$$ Chicken man (12/1/01; 19:16:27MT
$$$$$350.00$$$$$sourdough (12/1/01; 09:28:15MT
$$$$$$320.00$$$$$$Scarab (12/1/01; 15:30:22MT
$$$$$300.00$$$$$Max Rabbitz (11/30/01; 20:07:20MT
$$$$$$297.50$$$$$$ Netking (12/2/01; 01:53:34MT

$$$$$$296.50$$$$$$tedw (11/30/01; 19:50:42MT
$$$$$296.00$$$$$THX-1138 (12/1/01; 00:31:32

$$$$$ $292.50 $$$$$darkhorse (11/30/01; 18:48:35MT

$$$$$290.00$$$$$ji (12/2/01; 16:36:24MT
$$$$$289.50$$$$$goldquest (11/30/01; 23:12:21MT

$$$$$$288.50$$$$$slingshot (12/1/01; 13:02:04MT

$$$$$287.75$$$$$Hydro (11/30/01; 20:53:23MT

$$$$$285.00$$$$$Quixote (12/2/01; 15:04:57MT

$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$282.00$$$$Maiden Fan (12/2/01; 11:13:21MT
$$$$$$281.50$$$$$$Buena Fe (12/1/01; 20:51:51MT
$$$$$ 281.00 $$$$$VanRip (11/30/01; 21:05:14MT
$$$$$280.50$$$$$$Solomon Weaver (11/30/01; 23:03:28MT
$$$$$280.00$$$$$Yellow Jacket (12/2/01; 10:51:56MT
$$$$$$279.50$$$$$$The CoinGuy (11/29/01; 21:48:53MT
$$$$$$$279.00$$$$$$$Shermag (12/1/01; 13:30:47MT
$$$$$$ 278.50 $$$$$$Broken Tee (11/30/01; 10:52:21MT
$$$$$278.00$$$$$Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$$ RobotGuy (12/1/01; 13:31:55MT
$$$$$277.5$$$$$Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$Waverider (11/30/01; 01:23:24MT
$$$$$$276.60$$$$$$wiley (11/29/01; 22:47:01MT
$$$$$276.50$$$$$$$goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$275.50$$$$$Ducat (12/01/01; 07:48:39MT
$$$$$$ 275.00 $$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$Black Blade (11/29/01; 21:54:25MT
$$$$$$274.00$$$$$mikal (11/30/01; 22:54:23MT
$$$$$$ 273.50 $$$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$$273.00$$$$$$$$Canuck (12/01/01; 09:00:56MT
$$$$$272.50$$$$$Mythical (11/30/01; 18:08:12MT
$$$$$272.50$$$$$BR549 (12/1/01; 19:16:51MT
$$$$$ 272.00 $$$$$Henri (11/30/01; 11:44:46MT
$$$$ 271.50 $$$$ Argent (12/1/01; 10:16:21MT
$$$$$$$ 271.00 $$$$$Goldfly (12/2/01; 12:07:06MT

$$$$$$270.00$$$$$$Flatlander (12/1/01; 18:32:56MT

$$$$ $269.00$$$$$megatron (12/2/01; 14:50:46MT
$$$$$$268.50$$$$$$HopeingII (12/1/01; 22:37:42MT
====
See the "open guesses" ? Also, if I have missed your "guess post", please YELL at me.
<;-)

$$$$$$$$$$$$ 270.50 $$$$$$$$$$$$$$$$$

http://www.mrci.com/qpnight.asp
The market indices are pointing to a lower open probably as a result of Enron's bankruptcy filing this afternoon. Foriegn currencies are crashing tonight against the USD as the shock waves are ripping across the globe. Even petroleum prices are falling as the Global economy is poised to crater below the 9-11 levels and petroleum demand is expected to fall in kind. Going forward we could see bankruptcies from the resulting Enron shakeout. Look for an acceleration in layoff announcements and earnings warnings. Those corporations with excessive debt are likely to experience a lot of severe pain. In a word - "GRIM"

$$$$$269.50$$$$$
Hope I'm to low :)

http://www.worldtribune.com/worldtribune/breaking_1.htmlA key M.E. meeting over the weekend to determine the course of action in the days & weeks ahead. After events of the last few days one thing we can be sure won't happen is . . . nothing. - Netking

Snippet:
"In his meeting with President George Bush today, Israeli Prime Minister Ariel Sharon may seek U.S. backing for a counterattack that would either exile Yasser Arafat or destroy the Palestinian Authority altogether.

Sharon had been scheduled to meet Bush on Monday. But aides said Bush has agreed to meet Sharon at Sunday noon Eastern Standard Time in the wake of two devastating suicide bombings over the weekend that killed at least 25 Israelis. . . ."

this is a test
1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9

this is another test
___________1_____2_____3_____4_____5_____6_____7_____8_____9
1_____2_____3_____4_____5_____6_____7_____8_____9

http://money.cnn.com/2001/12/02/markets/sun_lookahead/
Snippit:

Dow, Nasdaq stand on brink of a dubious milestone not seen since 1974

NEW YORK (CNN/Money) - The U.S. stock market faces a daunting task this month, when only a heroic gain can save the major indexes from the first back-to-back annual decline in 27 years.

Black Blade: Nothing but bad news everywhere you look. Get out of debt, get Gold and Silver portfolio insurance, get basic goods and food stores, and get enough cash on hand to meet expenses. The comparisons should be made to 1929 - not 1974.

$$$$$272.50$$$$$Mythical (11/30/01; 18:08:12MT
$$$$$272.50$$$$$BR549 (12/1/01; 19:16:51MT

Sorry, Mythical beat me to the winning entry.

How about $$$$$268.00$$$$$ instead.

My guess (hope) is $$$$$302.50$$$$$
Gene

$$$$$278.00$$$$$Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$$ RobotGuy (12/1/01; 13:31:55MT

Correct me if I am wrong but I believe that the first guess at a price owns that price. Is that correct?

PANIC IN ARGENTINA, COLLAPSE NEAR . . . . . Argentina edged close to bankruptcy yesterday as people queued at cashpoint machines and bank tellers' windows to withdraw money after a government decree restricting bank withdrawals and overseas transfers. Passengers on planes and ships were frisked for illegal dollar stashes before leaving the country. The decree sparked fears of an imminent devaluation of the peso, wiping out savings overnight. (As reported by Independent.co.uk)

ENRON COLLAPSES: CONCERNS OF DOMINO EFFECT. . . . . "By every measure, this is the largest Chapter 11 case in history,'' said Peter Chapman, president of Bankruptcy Creditors Service Inc. ``If Enron were a sovereign nation, it would be the 30th-largest in the world between Egypt and Malaysia." (As reported by Bloomberg.com)

NEW YORK TIMES MAGAZINE RUNS COVER STORY: "IS THE AGE OF AFFLUENCE OVER?". . . . .

DOLLAR IN TROUBLE . . . . . . . As hopes fade for an early U.S. economic recovery, there's little reason for the dollar to do well this week . . . . . . (As reported by Dow Jones Newswires)

Gold up $1.10 in Access market . . . . . . . .

http://www.usagold.com/onlinestore/special.htmlHey MK, how's THAT for site support?

R.

http://news.bbc.co.uk/hi/english/business/newsid_1688000/1688271.stmSnippit:
"The slowdown in the UK service sector is getting worse and more interest rate cuts may be needed according to a new report.

The latest quarterly survey of the sector by the Confederation of British Industry (CBI) and Deloitte & Touche found business volumes, confidence, profitability and prices all falling.

"You would dismiss this survey at your peril," said Roger Bootle, economic adviser to Deloitte & Touche, who argued that the Bank of England's Monetary Policy Committee (MPC) should think about cutting interest rates further.

"While some members of the MPC still think that their battle is with inflation, this survey makes it clear that for most business people their battle is now with deflation."

The Bank of England has already cut rates seven times this year, bringing the UK base rate down to 4%, as it tries to steer the UK's economy away from a recession."

Waverider: Lots of global economic doom 'n gloom, but when is POG going to move - the million $$$ question...

Shermag (12/2/01; 18:59:18MT - usagold.com msg#: 66253)
Gandalf, two guesses at same price
$$$$$278.00$$$$$Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$$ RobotGuy (12/1/01; 13:31:55MT
===
I do not make the rules, BUT, I do believe that you are correct ! Suggestion is, that Sir RobotGuy trys again.
<;-)

No apolgy is necessary Sir. Winning bid? I should be so lucky(or should I say our newest little 5 month old goldbug should be, as she will be the one receiving in the end. Actually, I have faith that our generous host would furnish an additional prize in the event of identical bids. Please continue your fine contributions!

$$$$$$263.80$$$$$$

Just read an interesting article in GQ(Gentlemen Quarterly for the uninitiated). There is a section called "My Twenty Grand", where the writer of the article recommends different investments. The December issues article concentrates on US gold coins and starts like this:

When Times are good, any investment will do. P/E ratio? Fuhgeddaboudit! When times are lean, shorting stock is the smart play. But when times are terrible , what glitters is good old gold. For centuries, whenever wars have started and woes have stacked up, people have tended to turn paper money into the precious metal. Does it make sense? Maybe not, but paper is paper, however staunchly governments back it; the ancient need for the sheer physicality of the yellow ore can't be denied..

They go on to explain the facets of grading, why US coins are good to hold as part of an overall portfolio strategy, as well as a few staunch tips from David Tripp where he makes specific recommendations. He stated he likes the 5 piece $20 type set(Type I,II, and II Liberty, High-Relief St. Gaudens, Regular St. Gaudens). NOTE: It is a beautiful set with lots of gold, but it is also a lot of money. For specific recommendations, I'd talk to your humble host.

I just thought it was a timely article from what I've read in here today.

The only part of the article, I didn't care for is the part of the highlight above, where the author says, "Does it make sense? Maybe not". I think it makes a lot of sense. I've been sleeping well at night, my friends at Enron haven't. A strong statement? Yes. Although, after I've read all of these articles coming out of Turkey, Argentina, and probably next Japan. I think it's time for some of these people to wake up to the harsh reality of fiscal and financial responsibility, or at least don't invest all of your eggs in the same basket.

A relative whispered this to me after dinner last night, "Think its time to jump into Enron?". I about spit my coffee across the table. I was glad to read on here today that Enron filed, I figured it might save another person from making a wrong decision. I've had plenty of friends jump on another local bandwagon(LVLT), boy the stories I could tell...

The Bubble is still alive,

The CoinGuy

Now that Enron has filed Chapter 11, what's to keep them from securing an additional line of credit from their now-desparate creditors and shorting the metals markets to oblivion?

To answer your very good question:

(Your link) Both timely and strong.

That's why I need you guys. Always leaving things off. Forgetting things. Wandering about without a purpose.

Oh my. . . . . .

Thanks, Randy.

By the way these Russian pieces are very difficult to get -- the 15 Rouble variety -- and they are a beautiful thing to see with the double headed eagle reverse. We've had a good reaction thus far, but I do not think that people understand the potential here or they would be completely gone by now. A good item to stick away for children and grandchildren -- not to speak of its ability to raise the interest level in a collection of pre-1933 items. We've never had them before and I don't think we will see a hoard like this again for awhile. Well worth adding now while you can.

I was not aware of how strong Anglo Gold's position was
over Newmont on the Normandy merger until I read what
Tim Wood of Mining Web revealed on Nov 30 01, and what
Black Blade said today Dec 02 01 on the USA Gold Forum.

Tim revealed that:

1. Anglo Gold for the 3rd Q 2001 had the most
" net profit per share "
of 21 top world gold producers representing 94%
of world gold production

2. Anglo Gold was the only company of the above group
to make it to the " North East Corner " - the best
corner to be in - of the 'area' chart which Tim
devised with:

y axis being: Total Ounces of Gold Produced

x axis being: Net Profit per ounce

Black Blade quoted Anglo Gold Chief Bobby Godsell:

"Godsell said
Newmont this year had made its profits out of Peru, Bolivia, Indonesia
and Uzbekistan.
He added AngloGold's U.S. operations (ed: Newmont's home
base) had been affected by the California
power crisis which caused soaring electricity rates... All countries have risk profiles."


Looking at Anglo Gold's superior balance sheet and the substantial political and energy supply risk facing Newmont, it would seem that Normandy shareholders would be
prudent to go with Anglo Gold.

AX

I don't know if you were around for it, but we recommended the $20 St. Gaudens and Liberties in various grades as collector items for those of our clientele looking for a greater risk/reward ratio than bullion and pre-1933. We placed some very big numbers with various clients. Most of the recommended group shot up over $100 or better per coin and then settled back a bit. This would be a good time to add if you didn't catch the first wave. We're looking for more upside and rate them a buy and hold for the right type of client. I'll add again that we do not see these as a replacement for a safe-haven holding, but they do have strong appeal as a capital gain vehicle and worth a commitment as a supplement to one's overall holdings. Thanks for bringing it up and giving me an excuse to tell this little story.

Mythical (msg#: 66258)---

I am glad to see what wise parents she is already blessed with. I hope that she wins.

Regards,

BR549

Unfortunately Tim Wood does not account for actual profits. He uses "cash operating profits." This is Gold mining's version of Pro Forma accounting. A much better measure is the PE ratio where actual cash in hand after expenses is used. Tim Wood neglects these "minor" issues. Hedge fund AngloGold is in dire straits as they "MUST" win this bidding war. They have their backs against the wall. If the POG rises significantly, they and hedge fund Barrick will go tits up. Clearly the combination of unhedged Newmont and unhedged/no debt Franco-Nevada is the much better deal. Cheers!

- Black Blade

$$$$286.50$$$$$
I'm always optimistic. :)

Ive had my thinking cap on a little.

Agnico-Eagle (AEM) has been mentioned many times as an unhedged gold miner. However, I stumbled on to a site today that listed it as Also a major silver miner. The information was a little dated but state 3,000,000 ounces of silver in 1997.

Does anyone know AEM current status as a silver producer?
It could be a single ticket to 2 rides.
*******************************************************

Also the largest silver producer in the world appears to be
BHP billiton (NYSE:bhp) and it appears to be a profitable company with a P/E Ratio of about 20. Are they hedged?
Whats the skinny?

http://quote.yahoo.com/m2?u
The Nikkei and Hang Seng are falling hard tonight as the Enron scam is sending shock waves across the globe tonight.

http://www.usagold.com/cpm/hoppe.htmlI was struck with the fact that Argentinian authorities are shaking people down at customs to see if they are trying to escape with dollars. We must remember that in Argentina the dollar is being used as a proxy for gold -- and I don't quarrel with that ( mistaken as the notion might be). I do pose a question though for their American counterparts -- "Which currency would an American use as a proxy for gold?" I have often said that in 1933, the U.S. government did not confiscate gold because they needed the asset; they confiscated it because they needed the American people to hold onto the currency no matter how much they devalued it. I have little doubt that the Argentinian government is of the same frame of mind -- no matter the damage to the citizenry (as described in the snippet below). In both cases -- the U.S. then and Argentina now -- the relationship between citizen and currency would best be described as a "shotgun marriage." You can see in the Argentinian situation another claim I have often made "Don't underestimate what government's will do to their citizens when the need is acute." I still feel that pre-1933 gold coins stand the best chance of keeping the client safe if the government should move against gold. Few people know that pre-1933 gold coins were traded in the United States between 1933 (when gold was confiscated and outlawed) and 1975 (when it was relegalized), and that premiums actually skyrocketed in the late 1960s when it became apparent that the dollar was being overproduced. Those interested in learning more about this can go to the link above to get the details in a report written by George Cooper and myself titled "You Can Suvive a Potential Gold Confiscation." The information at that page is very well organized and makes a strong case. The premiums for pre-1933 European gold coins over bullion, though higher, are not as high as many believe. It is worth looking into.

Sorry that I can't help you with AEM. I worked briefly for BHP on a couple of projects in the early 1990's. They were primarily a conglomerate with extensive base metal interests. They were also involved in everything from steel, coal, petroleum, industrial holdings, and my favorite - Fosters brewing. As far as silver, I don't think that they were a primary silver producer, though silver is a strong secondary component of base metal production. BHP was in terrible financial shape for several years. I understand that they have shaken loose of several unproductive holdings including their copper mines. Cheers!

- Black Blade

$$$$$$$331.00$$$$$$$

I've been around USAGOLD since it's inception, in fact I remember the days of Big Trader at Kitco.

"I'll add again that we do not see these as a replacement for a safe-haven holding"

This stood out to me from your post, wise words my fellow gold bug. Gold comes in many forms, and it may all be hard and yellow, but the return is not always the same, and I don't believe all forms are held for the same reason. I hold bullion, foreign, as well as U.S. premium coins at different times because of the leverage factor. It pays to diversify even within the yellow metal itself. This is why a person needs to consult a professional in this area of numismatics...From what I can tell you are well qualified.



The (physical)CoinGuy

Hi Waverider, I suspect that was a rhetorical question but I couldn't resist a response.

Waverider: "Lots of global economic doom 'n gloom, but when is POG going to move - the million $$$ question..."

I keep telling myself that this is an all or nothing game. Gold cannot be allowed to rise for obvious reasons, all of which include critical global financial ramifications. Being 'real money', as miniscule as it is in market cap terms, it is still the folcrum for several very important economic indicators.

38 billion $ buys all the gold mines in the world and 375 billion $ buys all the gold (36,000+- tonnes) 'stored' in Central Banks (wherever those deep dark places may be!) Putting that into perspective, AOL market cap is 163 billion, GE's is 400 billion, Microsoft's is 344 billion, JPM's is 79 billion (and shrinking thanks to Enron).

So we have a very small industry (and related assets) which are crucial to the health of several major economic indicators which influence global economic conditions. These very powerful, interested partys, literally having all the money in the world at their disposal, are going to manipulate for their best interests.

The strategy is simple. Keep the POG rangebound so investors like you and I will say: "Lots of global economic doom 'n gloom, but when is POG going to move" (sound familiar?). I've been saying the same thing for years, as have we all (recall Canuck's passionate post on Friday).

The gold cartel hammers away at the POG causing pyschological damage to those considering the precious metals markets. Up until now they have had to fight only the few savvy investors like we here who understand their game, and they desperately want to keep it that way.

If 'the investing herd' ever joined our side, bringing their trillions of descretionary capital into this tiny market, the cartel would be roadkill, and they know it. So stategic discouragement, at important times, is the name of the game.

What is so utterly amazing is that through so many recent volatile economic and political situations, POG has remained rangebound. Precise hammering after 911 shocked the investment world that POG did not take out 300.

That's damage that not only quashed the initial ralley, but will have residual effects in playing out negatively in any future gold moves. People are not missing the recent 'weak performance' out of gold, and they are hesitant to enter.

The cartel strategy, reminds me of that small band of soldiers who are able to keep the enemy's entire army at bay through deception. These few imply, through building hundreds of campfires each night, that their numbers are greater than they are. The army becomes discouraged at the believed size of their opponent and eventually withdrawls.

But keep in mind that this is a tightrope of sorts. Manipulation cannot be precieved as obvious. They must continue this without the appearance of intervention, and it grows more difficult each day thanks to GATA. This may be our greatest hope. The growing transparency of POG manipulation.

Is it dead? Will anything ever shake loose the iron grip of the world's elitist money changers and allow confidence to soar back into real money? I truly don't know, but I do believe the truth will come out. It always does. When it does, rest in the knowledge that if all Hell finally comes out with it, you have secured a position to safely ride it out.

Meanwhile, thanks to MK for the contests (and Gandalph the White for such accurate updates, with open spaces). As we prepare and wait, nice to pass the time like this.

Silver comment from Mr Leonard Kaplan:
"Upon a doubling of short-term lease rates in London on Friday, silver prices managed to rally 10 cents for the week and even flirted with resistance at the $4.20 level.
Silver prices are being pushed a bit by sympathetic support
from copper and the base metals, which have been very strong, and by some rumors about the potential leasing activity, or lack of such, from Warren Buffet, who probably still owns about 130 million ounces of silver.

"There are consistent rumors floating around to do with our friend Warren (Buffett) in Omaha," Leonard Kaplan, president of Prospector Asset Management in Evanston, Ill. said. "The question is, is he going to lease his silver out again? Don't forget annual renewal is in January-February." With London bankers unlikely to offer him a yearly lease rate of more than 0.75%, Kaplan doubted Buffett would have any interest in renewing leases. "If he doesn't lease it out, silver would probably rise sharply," he predicted. But Buffett could simply be playing with the bankers, waiting for lease rates to rise.

Netking Comment: The current "blow out" in Ag lease rates, a sure sign of an impending "spike" in the POS, which also happens to match up with seasonal trading patterns over 30+ years & also current cycle timing . . . . stay tuned.

I suspect "nobody(paper long)will be allowed out alive" from Comex if the POS tries to go too far past $10/Oz too quickly. Interesting days ahead friends.

http://www.geocities.com/Broadway/Stage/8901/bandpractice.htmlAlan Greenspan is the "Music Man"

Meredith Willson's "The Music Man":
"Welcome to band practice! We're working on the Minuet in G right now. Are you familiar with the Minuet in G? You know, la de da de da de da, la de da, la de da. And again..........If not, try "76 Trombones"

76 TROMBONES

76 trombones led the big parade

With a hundred and ten cornets close at hand

They were followed by rows and rows of the finest virtuosos

The cream of every famous band

76 trombones hit the counterpoint
While a hundred and ten cornets blazed the way
To the rhythm of march! march! march!

All the kids began to march
And they're marching still right today!
Or try "Ya Got Trouble"

YA GOT TROUBLE "

Well either you are closing your eyes to a situation you do not wish to acknowledge...

Or you are not aware of the calibre of disaster
Indicated by the presence of a pool table in your community
Weeellll, ya got trouble my friend

Right here, I say, trouble right here in River City "



BR-Well said, Robert Preston---

Robert Preston, the original Music Man was the role model for Alan Greenspan. AG started with a reputation of being the Maestro Arthur Fiedler of economics only to end up as the victim of his own misguided policies. He has practiced his craft of economics and banking similar to the hours put in by the maestro of the Boston Pops. AG practiced his skills as an underling to the financial community always with his objective to lead the nation's overall financial strategy in perfect harmony.

AG did not believe in gambling but because he allowed financial manipulations such as derivatives to prosper under his watch, he will be the "Music Man" over the greatest financial disaster of all times.

Robert Preston was a pool hustler skilled in the ways of a professional gambler. He loved to say: "Saturday night-and that's trouble! Ya got trouble folks! Right here in River City! Trouble with a capital T and that rhymes with P and that stands for pool! Oh, ho we got trouble. We're in terrible, terrible trouble "

We got trouble right here in the USA and its all because of the not so well intended AG maestro's misguided leadership of the Fed. AG took traditional economic theory and misapplied it to a derivative world. The reason the fiscal and monetary policy of the FED is not working in this modern era is that AG did not take into account the gambling that was taking place in derivatives.

Interest rate reductions will not work if all bets are hedged via derivatives. The recent Enron collapse is the beginning of many economic failures both public and private around the world which will be caused by the inattention to what is really happening.

Derivatives, a.k.a. "risk shifting", are not reflected in Enron, the Fed, world corporations, world banks, or any financial statements. The only solution is to regulate corporations via entities similar to the SEC and other world regulatory agencies such as the World Bank. The world's Central Banks need to regulate themselves via rules established by the BIS and their own incentives to prevent disaster.

All paper by its own definition is corrupt and the only non-corruptible financial strategy is to own physical Gold.

Once you have accumulated enough physical Gold to hedge yourself against the abuses built into the "paper" systemic meltdown that is coming, then you can sit back, relax, and enjoy the music.

The economy that AG attempts to orchestrate is playing a tune of its own and not according to AG's intended direction. Once you are safe with enough physical Gold, then the band can play on to your benefit, and to the manipulator's detriment.

BR549

Let's get ready to rumble! This brawl should bring gold to public exposure!

http://biz.yahoo.com/rf/011203/syd149974_1.htmlSorry, try this.

http://biz.yahoo.com/rf/011203/syd149974_1.html
Snippit:

SYDNEY, Dec 3 (Reuters) - Courted by the world's two biggest gold miners, Australia's Normandy Mining Ltd told shareholders on Monday to sit tight on a fresh bid by South Africa's AngloGold Ltd and raised the prospect of ``further developments''.

THE KICKER

AngloGold yielding some seven million ounces a year, argues it will maintain a hedging policy within Normandy, meaning it will sell at least part of what is mines at fixed future prices. Newmont has said it would unwind Normandy's hedge book of around 7.7 million ounces, running through 2010, to align it with its own policy of direct exposure to fluctuations in world bullion markets.


Black Blade: As I have said, AngloGold "MUST" acquire Normandy at all costs. They "MUST" have more ounces to deliver into the hedge book. AngloGold is desperate beyond description. They face the prospect of going tits up if they don't get enough ounces to deliver. If they get Normandy they will likely gut the deposits like a fish through high-grading. It should be noted that CB's and BB"s are about to greatly reduce their Gold giveaway programs (aka Gold loans). This puts the screws to AngloGold and other hedge funds like Barrick. Booby Godsell is sweating bullets as it is crunch time for AngloGold. "Interesting Times"

http://afr.com/companies/2001/12/03/FFXJ4GI4RUC.html

Snippit:

Normandy Mining said on Monday that it was premature to make any recommendation on AngloGold's revised takeover offer for the company, flagging the likelihood of "further developments", given Newmont Mining's continued interest. AngloGold last week raised its offer for the Australian gold miner, adding a 20� per share cash sweetener to its scrip offer of 2.15 AngloGold shares for every 100 Normandy shares.


Black Blade: No one mentions that there is a $40 million breakup fee if the Newmont-Normandy deal fails. That has to be drawn into the equation even with AngloGold sweetening the offer. AngloGold is so desperate that Newmont could keep raising the bid to a level that when AngloGold covers, they will put AngloGold in financial distress. AngloGold "MUST" cover. They have no choice.

Extremely well articulated uponroof - thank you. It was, as you said, a bit of a rhetorical question but it's reassuring reading thoughts/ideas that mirror your own when it seems that most of the world wants you to believe differently. You're dead on - the truth does always come out - always - and not even Eddie and his boys will succeed in this perpetrated lie indefinately. My only..how can I say..misgiving.. is that as this unfolds and/or explodes, alot of people are getting/going to get hurt - some deservedly, probably many more quite innocently (and ignorantly). In the meantime, yes, we prepare and wait...patiently, and have a beer or two!
Cheers,
Waverider

http://quote.yahoo.com/m2?u
The Nikkei and Hang Seng indices get ripped a new one tonight. A resumption of the race to sub 10,000? The Enron shock waves rip through Asia and now on to Europe.

If you are going to ship Gold or any other precious item as a Holiday gift to your loved ones or others, then you should know some facts about those "Big Ugly Brown Trucks" and other shipping methods gained from years of experience as a vendor. Our company ships "Hand Made in the USA" ART all over the world, and we have some strong feelings about how shipments should be made in the US and internationally.

If you want your Holiday gift to arrive before the end of the year, then you should plan on shipping it no later than next week.

Some little known other facts about shipping:
1. When you use a shipping service located in a shopping center, do not take the insurance, it is a waste of money, especially if you use the Brown Truck service. They will gladly take your insurance money at sometimes double the transporter's going rate but the odds of you collecting damages from a lost or mutilated shipment are slim at best, so save your money.
2. Why the shipper will not pay your claims on insurance. The brown truck service will use one of two arguments against your insurance claim�the item was not packed properly and so it was not the shipper's fault. It does not matter whether you packed it yourself or had the shipping center pack it, the argument is the same.

OR, it is not their fault that the package was not delivered in a timely manner. The brown truck company does not guarantee any shipments timely arrival after 11/11 via their fine print policy. If you ship Christmas goods and they arrive in January, then they will return your lost package to you eventually, and call it even. Or course, you have lost your customer's business or your loved one's respect but who cares�certainly not the big ugly brown truck company.
3. Even if you did file a claim on insurance, it will not be paid to you. The most amazing part of the brown truck company policy--you as a shipper do not have a contract with the shipping company (the shopping center shipping center does) even though you paid the insurance premium. Therefore, the transporter will only pay the shipping center and not you. You then have to collect from the shipping center which is privately owned. If they decide not to pay you, then you may have to bring a lawsuit against them. they go bankrupt all of the timne and if you have a significant claim in precious metals, then you may have a lot of difficulty collecting. Not so with the postal service.

Solutions:
If you are thick headed and think that the only way to ship it to use the ugly brown truck company, then either take the package down to one of their shipping hubs or have the package picked up at your house or business. Don't use a shipping center. Again, the stupid way to ship.

We have used the United States Postal Service and have never had a lost or damaged package since 1995. We suggest to use priority mail (2/3 day delivery in the US and somewhat longer internationally). Send your package as ordinary mail with delivery confirmation. Insurance is optional, but if you identify it as Gold coins, you may not be using your best judgment. Insurance, package tracking, and other services are available that the big ugly brown truck service offers, but why bother? Do you really care where your package went? We had a package stop in 10 states that was supposed to have gone less than a thousand miles. What you really care about is that it ends up where you sent it.

I have opinions about the other so called overnighters but they are similar to the ugly brown truck outfit. And for every horror story that someone may have about the U.S. postal service, I would bet that I have twice as many about the ugly brown truck outfit from customers who specify them as their delivery preference (they have a right because they do pay the shipping).

Good luck in getting your gift where it needs to go on a timely basis.

Busy with last minute shopper's shipments, so let me be the first to wish everyone Happy Holidays!

BR549

BB: Thanks for your thoughts/news/etc...

Waverider

http://news.bbc.co.uk/hi/english/world/americas/newsid_1688000/1688837.stm
Cavallo, the guy who speculated 10 years ago that pegging the peso to the dollar would make a stable currency of the peso, is saying that currency speculators have brought down the peso-dollar link. He's even likening them to vultures according the text under the picture at the link.

Yet, the truth of the matter is that far from causing monetary fluctuations, it is the currency speculator who prevents them. And far from safeguarding the stability of the peso, it is Cavallo who must bear the prime responsibility for causing the present crisis. It is indeed Cavallo who instituted the peso-dollar peg, thereby causing the present crisis. Cavallo's hatred for the currency speculator is as great a perversion of justice as can be imagined. We can best see this by realising that the currency speculator is a person who buys and sells dollars/pesos in the hope of making a profit. She is the one who, in the time-honoured phrase, tries to �buy low and sell high� as explained by yours truly's namesake.

The speculator is the person who lessens currency fluctuations by buying dollars/pesos when their price is low in pesos/dollars and by selling dollar/pesos when their price is high in pesos/dollars. If speculators are wrong in their evaluations, they will be weeded out.

Contrast this to Cavallo. He also tried to lessen currency fluctuations. He has been wrong, but unfortunately for the Argentines, there is no weeding-out process for speculating government bureaucrats. Since Cavallo's salary did not rise and fall with the success of his speculative ventures (the peso-dollar peg) and since his own money is safe in Swiss bank-accounts, he was careless in his speculation that pegging the peso to the dollar would make a stable currency of the peso.

Source: BLOCK, W., "Defending the Undefendable", New York, Fleet Press Corporation, 1976View Yesterday's Discussion.

There has been considerable discussion on this forum on the avaliability of silver in units of 100 ounces or less. There have been several reports that these smaller units are un-avaliable at many coin shops. This development should be expected. But, are we painting an accurate picture of silver avaliability?

Last week I called a major West Coast coin dealer and talked to the owner about silver. He said the following:

"There is a shortage of silver. I have had to raise my premiums to the customer about 66% when compared to pre 9-11. I still have adequate supplies of 100 ounce silver bars avaliable but they carry the higher premium."

One week ago, I talked to another silver bug and he said that he had visited a few coin shops and they were effectively out of silver.

Just wanted to "keep the record straight" so that we all can make prudent and informed investment decisions.

http://groups.yahoo.com/group/gata/message/931More about GATA's work at the New Orleans
Investment Conference:

http://groups.yahoo.com/group/gata/message/931


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

http://www.businessweek.comEnron was owned by some of the strongest mutual fund management teams, and some of the debt market players with the strongest analytical teams. These groups got their heads handed to them with only Oscar Schaefer, among Wall Street high profile personalities, having publicly predicted the problem in Barron's as far back as June.

Everybody was taken in, and so were, it seems, top Enron management. The only escapee seeming to understand what happened - and he is completely silent - is the suddenly disappearing former CEO Skilling who quit a short while back in Mid Aug leaving behind a rich compensation and severance package untouched.

Miscalculations on the scale of Enron's that take in the best minds the financial world has to offer can only be result of systemic miscues such as provided by artificial credit expansions, where an artificial low interest rate is dictated by the central bank.

To quote myself (msg #66129):
"The Enron Boom and Bust were an immediate and unavoidable result of REGULATION. The regulator who caused the disaster was Greenspan himself. He did this by forcing upon us a credit expansion, which allocated capital to Enron through the use of bank credit. Once through direct bank lending at below market rates in 1998-99, and again by artificially lowering derivative time premiums - which are proportional to the exponential of the interest rate. This allowed Enron to open trading operations that were only marginally profitable using bank credit, and then forced them to compete with under-priced premiums - which forced the profit margin below that required to justify the initial investment. The losses drove the company under. Once they were weakened, everybody took positions counter to Enron's in expectation of their forced liquidation, thus amplifying the potential losses.

"The mechanism of failure was the normal and routine mechanism seen in every central bank inflation activity since these were first created. The credit expansion in response to LTCM's near collapse, a 1 trillion dollar problem, created Enron's 1 trillion dollar problem.....

"The derivatives trade is just quicker to react to credit expansions and more sensitive to departures of interest rates from their market clearing levels. Excess Bank Credit is immediately applied to derivative trading, by expanding outstanding risk capital. Volumes of derivatives grow when interest rates are at low artificial levels because the fees charged by traders to put their capital at risk are lowered exponentially. The time premiums are lowered by the artificial low interest charges as they are proportional to an exponent of the interest rate, and demand increases at a higher rate than a drop in price.

"Thus at say, 5% interest rate, the result of an error in interest rate setting of 0.25% too low (the Fed's favorite step size) would cause the time premiums to fall by 5.4% and would cause outstanding volumes to expand by some 20%. If that error is followed by simply setting the "right" interest rate, then the market will try to contract the 20% excess derivative volumes. As the new price would be at the higher level of 5.7% higher (5.4% on the way down is 5.7% on the way up), the result would be that the issuers of the prior (lower priced) derivatives would have a loss of 5.7% on a volume of 120 derivatives vs, the 100 they would otherwise have issued, or a loss of 6.8% of capital put at risk. If the issuer was operating with 10% reserves, the borrowing at 4.75% at which the 120 derivative contracts (instead of 100 at 5%) were issued would have obtained a wipeout of 68% of their capital, effectively putting them out of business.

"Thus if the Fed was 0.25% behind the curve in raising interest rates in 1999-2000, then 0.25% behind the curve in lowering interest rates on the way down in 2001, then the wipeout of capital of 10% reserved derivative issuers would be assured because of the reverse error, of having rates 0.25% HIGHER causes market clearing issuance levels to fall by a further 17% beyond the fall from 120 to 100. Outstanding contracts would TREND TOWARDS A fall from 120* to 83 as the premium's prices would rise 11.7% (AT 5.25% RELATIVE TO THAT AT 4.75%) and bring a 14% CAPITAL loss. Only those reserved at a level much higher than 14% would survive. All the derivatives issued by the weaker issuers would become near worthless (commonly 20 cents on the dollar), and would be repurchased from the surviving issuers at the higher premiums resulting from the erroneously high interest rates, and from the fact that capital offered for risk would be, initially at least, insufficient to fill market demand (because of the wipeout of weaker competitor's capital)."


I think the credit market (treasury rate) and commodity market volatility we have gone through immediately after the Oct 24 resignation of Enron's Fastow (CFO) and on the Nov 9 declaration of Dynergy's intentions, was the process of undoing Enron's books, as was (I suspect) the Treasury's decision to stop the 30 year bond. The latter had the intended effect of immediately dropping interest rates and putting Enron's supposedly strong book of treasuries up by 6% (a big change for a highly leveraged company).


It is the Fed's over-reaction to the 98 LTCM crisis which I see as having caused the great expansion of derivatives on Enron's part. Others in the market, who have learned from prior experience what the limits of leverage are in the derivatives arena may not have this sort of problem.

The counterside to a below market fiat interest rate is a below market gold (and silver) interest rate, which should cause a similar expansion in gold derivatives.

Sir Ski, I think the main theme to these reports was that silver is "beginning" to be unavailable in some/many places, but seemingly not in others. Sir Galearis did some good investigative work (some posts over last week or so)which indicates some of the smaller bars are being melted down to make 1,000 oz bars(+/- 12%) and that investor demand for coins/bars is increasing also. My city is "silver dry" as are it seems a number of other places. Some spots in the USA are not out including parts of the West Coast as is also the case with parts of Australia which has an ok supply for the moment. (USAGold/CPM is a silver seller)

The figures on world silver inventory cannot be disproved. Neither can the fact that 5,000 years of mined silver has been nearly used up and that the yearly deficit of silver useage from what is supplied has entered it's second decade.

Leasing & short selling has contained the POS but not for much longer. The real power of this market (like gold) will be in the hands of those who hold the physical metal, not a paper promise. The greater the degree of manipulation (in amount & time) . . . . the greater will be the realignment of markets forces needed to bring the fundamental forces of demand and supply to where they should be.

We are now facing a silver shortage for years & years to come, the only thing that can change now is remaining physical supply and . . . P-R-I-C-E. - Netking

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=25480This is great! The U.S. Mint is selling silver dollars with hidden knives inside.

http://www.newsmax.com/archives/articles/2001/12/2/203059.shtmlIn this morning's editorial, Chris Ruddy of NewsMax talks about the New Orleans Investment Conference.

Mr. Ruddy mentions (among other things) meeting Barbara Bush. One notable quote: "I was reminded of what a friend at the Hoover Institute who has advised W. told me: 'Remember, W. takes after his mother and, fortunately, not his father.'"

http://quote.yahoo.com/m2?u
European markets head lower on Enron fallout. US indices are alo set to move lower.

http://biz.yahoo.com/rb/011203/business_markets_global_dc_1.html
Snippit:

LONDON Dec 3 (Reuters) - The dollar and share markets lost ground on Monday as the collapse of U.S. energy trader Enron and renewed jitters about the Argentine economy added to market fears about the timing and pace of a global economic revival. Banking stocks led the downturn on worries about the sector's exposure to Enron which on Sunday filed for bankruptcy protection from creditors. Spanish banks were also hit by news Argentina had introduced restrictions on the transfers of funds abroad and set a $250 per week limit on cash withdrawals. The restrictions came after Argentines lined up for hours on Friday to withdraw cash, worried their savings could be frozen as the government carries out a massive debt restructuring to trim interest costs on its $132 billion debt.


Black Blade: Last night I saw news footage of the Argentine run on the banks. It was just like the run on Russian banks a few years ago. Panicked bank customers were swarming tellers cages demanding their money. I am afraid that many will lose out as the peso is devalued before they can get their cash and exchange it for something of value.

http://biz.yahoo.com/rf/011203/l03107945_1.html
Snippit:

JOHANNESBURG, Dec 3 (Reuters) - The world's largest gold miner AngloGold on Monday raised the handling fees it will pay brokers to encourage shareholders of Australia's Normandy Mining Ltd (Australia:NDY.AX ) to accept its takeover bid soon. "AngloGold believes it is appropriate to pay the modified handling fees to encourage brokers to initiate acceptances for our superior offer given the pending Christmas period,'' AngloGold said in a statement.

Black Blade: Sheer desperation! Newmont could put the screws to hedge fund gold short AngloGold with a higher bid and playing up the $40 million walk-away fee that will be paid by Anglo if Newmont-Franco-Normandy merger fails. Bobby Godsell must be sweating bullets.

http://news.bbc.co.uk/hi/english/world/middle_east/newsid_1689000/1689729.stmIsraeli helicopter gunships have launched a series of air strikes on Palestinian targets in the Gaza Strip.
The BBC's Kylie Morris says Palestinian leader Yasser Arafat's headquarters have been hit and are on fire. Mr Arafat is reported to be in Ramallah on the West Bank.
Our correspondent says there have been a series of large explosions and the attacks are continuing across the city.
...

$$$$$$$$$300.50*********

http://www.usagold.com/Order_Form.html12/3/01

In Brief: Gold surged in international markets pushed by Enron declaring the largest bankruptcy in U.S. history and the Argentina peso and economy hurtling toward possible collapse. The potential ripple effect to the world banking system from this one-two punch had the dollar and equities markets reeling in overnight markets and caused a surge in safe-haven gold demand in both Asia and Europe. Driven in recent weeks by consistently strong physical buying internationally, gold could get an added boost if speculators decide to cover the large short position on the Comex. J.P. Morgan, according to a Dow Jones reported, declared the yellow metal in a "bull mode."

Those of you looking for a deeper understanding of the forces at work in the gold market will find our latest Quarterly Review a beacon in a sea of market confusion. In it, master analyst and prominent market maven, James Grant offers his views on the subject in an extensive article not to be missed titled "For Real Money." You can receive Mr. Gran'ts thinking by hard copy and private download by going to our sign-up page linked above and requesting an Introductory Information Packet. And Mr. Grant is only a small part of our 32-page Review. We also feature some advice from Hong Kong's Dr. Marc Faber "When Things Don't Add Up," and my own "After the Twin Towers: New Realities for Gold Investors." All in all, the net effect is to re-orient your thinking to the present circumstances. Your inquiry is welcome.

We also invite you to browse our jewelry section. The Termine-Winer Classic Collection of 18-karat designer crafted jewelry was suggested to us by the World Gold Council. It is of very high quality, sure to please and the prices are right. I know most male shoppers like to put things off to the last minute but given the price breaks and lack of sales taxes that come with buying from us on-line, it might pay to get this done as soon as possible. If you wait too long we may not be able to get you the order on time. Just call and talk to Marie or order right at the page on-line. Your order will come by Fed-Ex -- a done deal. Your selection comes in a very nice black velvet box with a very classy card that goes with it. We really went out of our way this year to offer something we think your loved ones will appreciate.

To see our jewelry line go to the link above (Where Santa rides the reindeer!)

Those looking for an on-line overview of the forces at work in the gold market will find the review to the right of interest. It covers the longer term view.

I've posted some good article summaries and links at the Commentary and Review page.

If you have an interest in pricing out gold coins or having your questions answered, you phone call is welcomed at the toll-free phone numbers at the bottom of this page.

"Bobby Godsell must be sweating bullets."

In reading you description of BGs possible state of mind I was reminded of the old Lee Trevino story about pressure on the golf course. Someone said to him one time that the pressure over a three foot putt to a win a major championship must be unbearable. Trevino, who at one time made his daily bread (beer money?) hustling the country club circuit, said that in those situations there was no pressure at all. "My money's not on the line," he said, " If I miss the putt I still make a big paycheck." Then he added, "Making a three foot putt to win a $100 Nassau when you only have $10 in your pocket is the definition of pressure."

Caveat: Quotes might not be exact but the message is there. Godsell will still get his paycheck whether or not the Normandy deal flies, so the bullets he sweats are likely of the crocodile variety. If these hedged mine company managers had their own money on the line, I doubt the mining companies would be in the trouble they are in now with respect to the hedging mess. Who would want to own a gold mining company that had essentially placed a bet against the very metal it depended upon to make a profit? Hypocrisy aside, it's alot easier to justify when stockholder money, not yours, is on the line. Then again, Bob Davie did get fired over the weekend, didn't he -- with four years left on his contract -- so maybe Godsell is sweating bullets. I would like to think he is.

You know what, Dark horse, I've been thinking what you've been thinking.

We're due for a contest and it would be productive to tap the collective wisdom around this noble Table. I agree.

But how to break the psychic dam and get the ideas to flow?

Nothing like a challenge to match the quality of the poster and lurkers present. This idea came to me while having
lunch today and browsing over the latest GRANT�S Interest Rate Observer. It seems that one of James Grant's
friends -- a fellow named Paul L. Kasreil who does economic research for Northern Trust Co. -- posed a most
far-reaching question. One that is making the rounds among people who talk markets as well as those who enjoy the
same as a worthy pre-occupation.

The question is this:

------------------------------------ Alan Greenspan: Maestro or Music Man? ----------------------------

The book, "Maestro", was the subject of a great deal of conversation here when it came out several months ago and
opinion was pretty much divided on it -- some thought it characterized a master at the peak of his powers. Others
saw it as a whitewash of a Fed chairman who simply injected liquidity willy-nilly at a time when the world had no
where to turn but the dollar. Some called him genius. Others called him lucky. Still others called him confused --
pumping money into the system at one turn and deriding "irrational exuberance" the next.

But Maestro or Music Man?? Now that's intriguing, and very much worth a contest.

For those of you scratching your head at the choice, I will remind you that The Music Man, one of America's
favorite all-time musicals, is the story of band director/con artist. The following from famed critic, Clifford Ridley
captures the Music Man for our purposes:

"Bierko is a younger Hill than Preston, yet with his slicked-back hair, his self- dramatizing gestures and his roving
eyes constantly scouting for trouble, he's every inch the two-bit con man. As advertised, he delivers Hill's fervid
patter with dash and musicality; and at the end, when he's unmasked by the unconditional love of a good woman,
he's quite touching. And he has a splendid foil in Luker, who sings Marian's arching melodies in a limpid soprano
and persuasively metamorphoses from chilly skeptic to loving co-conspirator. She also has a fine way of saying
"Ssssh" - an admonition, fortunately, that this ebullient production mostly ignores."

And then here's a passage from the preface to Bob Woodward's "Maestro" which more than adequately captures the
essence of the Maestro side of the coin:

"Greenspan is slated to remain chairman of the Federal Reserve until 2004. Not only is he a major figure in the
world's economic past, he is central to its future. He has been frank enough to stand before the new and amazing
economic circumstances that he helped create and in the end declare them a mystery. It is impossible to account fully
for the continuing high growth, record employment, low inflation and high stock market."

And, toward the end of this important book:

"Greenspan also represents something more than the confidence wing of the American Personality. He stands at the
point where the country's eternal optimism meets the country's abiding suspicion that something will go wrong. . .
That fear also creates a kind of excitement and anticipation.Greenspan stands at the crossroads of optimisim and
pessimism. Each of us is a character in the nation's great economic soap opera; Greenspan is both director and
producer."

So, the question before the table is this:

***** "Alan Greenspan, Maestro or Music Man?" *****

Lovable Con-Man or Brilliant Fed Chairman?

I will leave with another thought of Mr. Kasreil -- as I think the computer cannot be taken out of the present
equation without missing a major part of the analysis:

"Economics how do we measure that? Well, I can tell you there has been a very increase in productivity, at least at
my shop. When I joined the Northern Trust over 15 years ago, it took three senior economists and three research
assistants about two weeks to come out with an inaccurate economic forecast, and with this laptop, I can do it all by
myself in one day."

The world, I know, is not spinning any faster than it used to be but who among us would deny that it is. . . . . . . .
.So Maestro or Music? You be the judge.

Each entry must address the question in sufficient length but no more than is absolutely necessary to make the point
-- the eternal bane of the writer. An appropriate link is acceptable. The contest will be judged not on the choice you
make but on the erudition and argumentative skills used to make your case. Please surround your entry with stars as
shown. The winner will get a lucky French Angel gold coin -- the one they say Napoleon carried throughout his
campaigns until he lost it . . . . .the day before Waterloo. As Darkhorse suggests the entry-post must also include
some reference as to what the future might bring by the end of the year (for posterity's sake). As always, the post
must conclude with how all of this relates to gold and gold ownership -- and it is there that the worm turns, where
the contest will decided. The runners up -- two of them -- will receive a Mexican Azteca silver coin.

First time posters will receive a one-ounce U.S. Silver Eagle but in order to claim the price you must indicate that
you are a first-time poster with Jill Snyder (jill@usagold.com). The post must be an entry into the main contest --
"Alan Greenspan, Maestro or Music Man." First time posts in the price guessing contest (see below) do not count
toward the Silver Eage Prize. Pls include your current mailing address.

The posting contest will go from this moment through Sunday, December 9, 2001 when midnight graces the purple
mountain majesties.

* * * * * * * * * * *

In addition to the posting contest, we will have a price guessing contest. Where gold will close on Friday,
December 7th on the Comex -- the December contract. Each entry must be surrounded by $$$$$$ dollar signs as
follows $$$$$30,000$$$$$. All entries must be posted by 5pm MST Tuesday, December 4th.
The winner -- he or she who comes closest to that closing price -- will receive a one
tenth ounce Austrian Philharmonic.

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

Good luck all. May the best poster win.

http://www.economist.com/agenda/displayStory.cfm?Story_ID=894167
Good article on Enron and the unfolding implications.Does
this sound familiar?

"Dynergy never gave the impression of being terribly keen on the deal despite bullying by bankers."

Bullying bankers,including some from JPM and C,probably sweating the odd bullet.

Needed an upgrade!

$$$$$283.50$$$$$

In the recent past (past few months) bull raids of 3-5 bucks have begun at noon est, after London close. PM bull raid beginning?

Progress Report as of 12/3/01 10:20MT
------
MK says: HEAR YE! HEAR YE!! --we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex. Each entry must be surrounded by dollar signs as follows $$$$$30,000$$$$$. The winner will receive a one tenth ounce Austrian Philharmonic. Let's make the guesses in 50� increments. All entries must be posted by 5pm MST Tuesday, December 4th.
===
$$$$390$$$$$ Chicken man (12/1/01; 19:16:27MT

$$$$$350.00$$$$$sourdough (12/1/01; 09:28:15MT

$$$$$$$331.00$$$$$$$LimitUp (12/2/01; 21:33:35MT

$$$$$$320.00$$$$$$Scarab (12/1/01; 15:30:22MT

$$$$$302.50$$$$$Gene (12/2/01; 18:22:33MT

$$$$$$$300.50*******Goldfinger 2 (12/3/01; 08:12:43MT
$$$$$300.00$$$$$Max Rabbitz (11/30/01; 20:07:20MT

$$$$$$297.50$$$$$$ Netking (12/2/01; 01:53:34MT

$$$$$$296.50$$$$$$tedw (11/30/01; 19:50:42MT
$$$$$296.00$$$$$THX-1138 (12/1/01; 00:31:32

$$$$$ $292.50 $$$$$darkhorse (11/30/01; 18:48:35MT

$$$$$290.00$$$$$ji (12/2/01; 16:36:24MT
$$$$$289.50$$$$$goldquest (11/30/01; 23:12:21MT

$$$$$$288.50$$$$$slingshot (12/1/01; 13:02:04MT

$$$$$287.75$$$$$Hydro (11/30/01; 20:53:23MT

$$$$286.50$$$$$ROSEBUD99 (12/2/01; 21:21:03MT

$$$$$285.00$$$$$Quixote (12/2/01; 15:04:57MT

$$$$$283.50$$$$$Lamprey (12/03/01; 09:52:17MT

$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$282.00$$$$Maiden Fan (12/2/01; 11:13:21MT
$$$$$$281.50$$$$$$Buena Fe (12/1/01; 20:51:51MT
$$$$$ 281.00 $$$$$VanRip (11/30/01; 21:05:14MT
$$$$$280.50$$$$$$Solomon Weaver (11/30/01; 23:03:28MT
$$$$$280.00$$$$$Yellow Jacket (12/2/01; 10:51:56MT
$$$$$$279.50$$$$$$The CoinGuy (11/29/01; 21:48:53MT
$$$$$$$279.00$$$$$$$Shermag (12/1/01; 13:30:47MT
$$$$$$ 278.50 $$$$$$Broken Tee (11/30/01; 10:52:21MT
$$$$$278.00$$$$$Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$$ RobotGuy (12/1/01; 13:31:55MT
$$$$$277.5$$$$$Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$Waverider (11/30/01; 01:23:24MT
$$$$$$276.60$$$$$$wiley (11/29/01; 22:47:01MT
$$$$$276.50$$$$$$$goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$275.50$$$$$Ducat (12/01/01; 07:48:39MT
$$$$$$ 275.00 $$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$Black Blade (11/29/01; 21:54:25MT
$$$$$$274.00$$$$$mikal (11/30/01; 22:54:23MT
$$$$$$ 273.50 $$$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$$273.00$$$$$$$$Canuck (12/01/01; 09:00:56MT
$$$$$272.50$$$$$Mythical (11/30/01; 18:08:12MT
$$$$$ 272.00 $$$$$Henri (11/30/01; 11:44:46MT
$$$$ 271.50 $$$$ Argent (12/1/01; 10:16:21MT
$$$$$ 271.00 $$$$$Goldfly (12/2/01; 12:07:06MT
$$$$ 270.50 $$$$HOOSIER GOLDBUG (12/2/01; 17:14:24MT
$$$$$$270.00$$$$$$Flatlander (12/1/01; 18:32:56MT
$$$$$269.50$$$$$ Frosty (12/2/01; 17:28:43MT
$$$$ $269.00$$$$$megatron (12/2/01; 14:50:46MT
$$$$$$268.50$$$$$$HopeingII (12/1/01; 22:37:42MT
$$$$$268.00$$$$$ BR549 (12/2/01; 18:13:47MT

$$$$$$263.80$$$$$$WW Oracle (12/2/01; 20:19:51MT
===
Less than 29 hours to go. The price has ranged from a low of $273 to a high of $276.50 --- so far!!
<;-)

http://biz.yahoo.com/rf/011203/n03376189_1.htmlEnron, NAPM, Argentina, Japan, Israel, Afghanistan, NDY, etc etc. If I had to guess I'd say it'll be up between now and Friday.


"...It's looking okay on the charts now,'' he added. ``We have got to get through $278, and if we do that I think we can get right up around the $282/283 area ..."


Hummmm, Let's see now, who has guessed between 282 and 283?

Was wanting to thank you for posting the Dec futures contract(GC1Z), I was wondering if the winning price was based off the futures contract or spot. I was over at MRCI, and for the first time hoping gold didn't go up to fast(grin).

Also, I haven't seen much of a move in the long end of gold lease rates, but short term, especially 1m has really been on the move. Too much more and we'll be looking at backwardation. I'm not predicting this, but it sure seems to me the spread is getting closer each day.

ORO: Appreciated your comments on ENE, I've heard different debt levels, secured and unsecured, that are floating around internationally. Amounts from several billion secured, with 20-30 billion unsecured. And then I hear the "trillion" # bantied about, I believe I even heard that one on CNBC. That would be a heck of a stretch, from 30b to 1 trillion? Any idea which # its closer too? Or is this an item best left to the accountants and lawyers?

Best Regards,

T(p)CG

uponroof,

I think you forgot the most important part of your analysis:

"...It's looking okay on the charts now,'' he added. ``We have got to get through $278, and if we do that I think we can get right up around the $282/283 area ..."

, and by Friday afternoon, we should be just in time to back & fill for a close right around 279.50...smile.


The CoinGuy

http://www.mips1.net/enrgy.nsf/Current/85256A090002840F85256B13000EA374?OpenDocumentTim Wood's take on the damages. Some very good responses from readers at the bottom of the page also.


"...On that basis, we might conclude that Enron could have derivative exposure of at least $100 billion assuming that it was not nearly as aggressive or adventurous; hence the $250 billion estimate mentioned earlier. But that is still massive by any means and dwarfs the $3.65 billion that was required to bail out LCTM. If exposure of $1.25 trillion could be closed out with time and $3.65 billion, then how much easier to quell Enron's upset.

So much for being too big to fail. Something has changed and it cannot be that Enron was a Texas oil business that the Wall Street smoothies disdained. Of course, there is a genuine hint of malfeasance in all this while LCTM was just guilty of recklessness and hubris. That may be the sum total of the explanation. The other possibility is too awful to contemplate � that you must rack up bolder losses to get the Fed's attention.

The James Dean school of finance. Live fast, die young, don't worry about the corpse..."

Notice also that I omitted the 'chief dealer' was talking about February gold, not GC1Z (Dec 01). Oh well, didn't take long for that to come out. ;-) but I looked smart there for a few minutes.

In any event, best of luck to you my friend...

actually, I'm rooting for Chicken Man (390).

cheers

I'll have to be honest here...I'm rooting for Chicken Man too...and by Friday would do nicely.

Go Chicken Man Go!!!!


TCG

I also hope Chicken Man wins, heck I don't even mind if his winning guess is $10 short(smile). Rich. maybe MK could add Ag in the future & try to make it a Au/Ag double guess!

My apologies Artie, I didn't realize that you posted a contest guess for $278.00. I didn't see any regulation on the number of guesses for the same value, but I would assume there is only one prize available. You have submitted your guess prior to mine, so therefore should the price close at 278.00 I commend you on your swift action. For all intents and purposes, I too shall root for the Chicken Man.

GC1Z Settled at $276.9 today on the COMEX, after hitting a high of $277.5
<;-)

http://www.theage.com.au/business/2001/12/04/FFXUOHI4RUC.htmlSnippet:
Expectations grew yesterday that the world's most powerful gold company, the Canadian-based Barrick, was about to blow away competing bids for Normandy Mining by AngloGold and Newmont.

If it comes to pass - there is no guarantee it will - Normandy chief and founder Robert Champion de Crespigny will have his once seemingly magical $4 billion target valuation for the group in sight . . . "

Comment: If Barrick enters the ring this will not be surprising but it WILL be interesting. As we have said before the stakes are very high to all players, they will play to win. - Netking

http://finance.lycos.com/home/livecharts/applet.aspWOW -- Look at the AU chart on the 30 Min int.
Someone is getting OUT bigtime !!
Looks as if BB has nailed another one correctly!!!
<;-)

http://www.skolnicksreport.com/tebm1.htmlCrooked congressmen? Who would have thought it!
It is only going to get worse. Buy GOLD, NOW!

http://www.usagold.com/cpm/goldhelp.html

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

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Alan Greenspan conducts the Financial System Pops in his beautifully rendered "Variations on a Theme of Classical Inflation in D-Flat"


In the realm of Romantic monetary manifestations, Inflation enjoys unmatched staying power. The majority of its mature works have been repertoire staples from the time they were composed, and likely will remain so as long as bankers walk the earth.

Most of Inflation's output is concentrated within small forms, where its evil genius truly takes wing. Its Chinese and Roman inheritance is reflected in the heroic manias and incredibly varied crashes. The coin-clipping, edge-shaving, and over-worked printing presses reveal the influence of statists bel canto melodic filigree along with the air of the tulip bulb dealers of Holland where Inflation cum options contract also held court. The more complex and personal works, however, embody a strong classical streak. If the Etudes of Asian Contagion represent the New Testament of debasement technique, the subject's youthful bank failures, variations on currency devaluation, and sundry occasional national emergencies reveal that Inflation's thieving style was pretty much solidified from an early age.

Tackling Inflation en masse is a formidable challenge even for as voracious an inflationist as Alan Greenspan, who busies himself with "tiny" projects like the LTCM debacle, bailout de Mexico, and, once again, lowering his rates. Originating in the late 1980s, his complete Inflation cycle is bundled as a specially priced box set for the upcoming meltdown of the world financial system. There's much to admire here. Greenspan's dynamically charged, gutsy conducting style exemplifies Rothbard's analogy of Inflation's music to "consumers buried in flowers." Like his one-time teacher Ayn Rand, Greenspan has a keen feeling for Inflation's polyphonic textures, abetted by his active and imaginative left hand, the US Treasury Department. His leisurely, exploratory approach to the Bonds, Gold, the LTCM Ballade, and the late interest rate adjustments uncover details that often go unnoticed, yet also weaken the rhythmic fiber of the more lyrical, harmonically dense Argentine Waltz. On the other hand, the slower Etudes breeze by with freely singing cantabiles, and the musically slight but liquidity-draining early rate increases of �99 came off with idiomatic flair. Not so for the mature polonaises of �00-�01, which are spongy and prosaic compared with Rubin's rhythmic spring and lilting authority.

The works for Congressional Testimony and Greenspeak Overtures, though, shine with unpressured inflection and more sympathetic conducting than usual. It's interesting to compare Greenspan's ruminative conducting in the orchestral version of the FOMC Prelude and Grande Polonaise de Humphrey-Hawkins with the ECB's leaner, more unbuttoned unaccompanied version. The Third World Waltzes offer fascinating contrasts as well, from the inflationist's melancholy, cello-like rising left hand line in the Asia minor to his bracing, poker-faced reading of the American bubble. It's hit and miss with the Preludes: some are sharply profiled and projected, while others seem less digested, as if they had been "gotten up" for the microphone. By the same token, few inflationists take on the thankless Gold Crush Sonata in public, yet Greenspan's strong and committed conducting elevates the music beyond the ambitious student work it is. He also manages to make the curious, seldom played "Central Banks Stand Ready� Op. 46" sound more unimportant than usual, and makes as cogent a case for rarities like bullion, collectibles and golden works of art all the more appealing.

Greenspan's engineering takes on a metallic hue at loud moments, yet is more consistent than the uneven, tubby sonics hampering much of those from Sub-Saharan Africa and nations in which bananas or corned beef are the primary cash crop. The latter and the Asian Tiger's complete Inflation for the Ages (both omitting the concerted works) are packaged in space-saving cardboard, as opposed to these individual jewel cases housed in a thin box. No single inflationist can do equal justice to all of these works, yet Greenspan's stimulating and often masterly artistry is well worth the modest cost of 15 years of depression for the price of 10.

Verdict: Music Man

The CoinGuy (12/03/01; 11:33:43MT - usagold.com msg#: 66306)
Gandalf, ORO...
Was wanting to thank you for posting the Dec futures contract(GC1Z), I was wondering if the winning price was based off the futures contract or spot. I was over at MRCI, and for the first time hoping gold didn't go up to fast(grin).
=====
Yes indeed, it is the COMEX Dec Future contract (GC1Z) Settlement on Dec. 7th close that we are prognosticating. --
AND I too say "Go Chicken Man Go!!!!
<;-)

Just a short note from Dallas, the hometown of GATA's Bill Murphy - as I'm looking forward to have dinner with him tomorrow again.

It seems to me that Bill, Chris Powell and Reg Howe, as well as James Turk and many others are now starting to make a real impact as many of the excellent speakers at the conference admitted to a heavy hand in the gold market, if not outright intervention.

It was also great to meet the fine people of Harmony and Durban Roodeport, who again stepped up to the plate with their ongoing and generous support of GATA. I would like to salute them for their courage and think both companies have an outstanding management team, which bodes well for the future of their respective companies. I also hope that some other unhedged gold producers would follow their example.

Last, but not least I've been particularily pleased to meet some of the finest folks on this forum and the cafe. Special regards to Auspec and his most charming better half and Cavan Man, among many others.

I'm planning to do a more extensive overview on the conference as seen from an european view, when I get home next week.

Regards to all - cb2

http://quotes.ino.com/exchanges/?c=metalsGold (NYMEX:GC) ]
Market--------Open--High--Low---Last--Change-Time
GCX1 Nov 2001 277.2 277.2 274.1 274.1 0 settle 7:28AM
GCZ1 Dec 2001 274.2 277.5 274.2 276.9 +3.2 settle 2:53PM
GCF2 Jan 2002 274.8 274.8 274.7 277.7 0 settle 2:53PM
GCG2 Feb 2002 275.8 278.7 275.5 277.9 +3.1 settle 2:53PM
--
Gold Spot (XAUUSDO)
Market Open High Low Last Change Time
Index-------275.20 278.50 274.80 278 +2.80 3:30PM
---
FROM the LINK which is reached from the USAGOLD Board Box above this Message Center.
NOTE that SPOT which closed later than the Futures markets continued to advance and is Higher that the GC1Z settlement. GO Chicken Man, GO !!

http://news.independent.co.uk/world/americas/story.jsp?story=108003Snippet:
"Argentina edged close to bankruptcy yesterday as people queued at cashpoint machines and bank tellers' windows to withdraw money after a government decree restricting bank withdrawals and overseas transfers.

Passengers on planes and ships were frisked for illegal dollar stashes before leaving the country. The decree sparked fears of an imminent devaluation of the peso, wiping out savings overnight.

The run on the banks was only the latest sign that the financial crisis that has rocked Latin America's third-largest economy for the past four years shows no signs of abating. . . . "

Just give Elwood the award right now. I am laughing hard because it reminds me of the Simpsons episode where Homer was a film festival judge and Barney made a B+W french film about alchoholism and instead Homer voted for a short film of a guy getting kicked in the ba..s. Stop stop.....

$$$$$ 294.00 $$$$$

http://groups.yahoo.com/group/gata/message/931Remarks at GATA reception at New Orleans
Investment Conference.

http://groups.yahoo.com/group/gata/message/931

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

$$$$$286$$$$$

*******283.00******* someone had to guess it? all the best to all of you goldroadlx7 good day!!

I wonder if any of Conductor Greenspan's recordings will go silver, gold, or platinum.

$$$$$283.00$$$$$ opps! my mistake on not using $ on my guess. sorry !! goldroadlx7

http://www.forbes.com/2001/01/30/layoffs.html
Enron has begun to "Slash and Burn" as 4,000 nonessential "Bones" head off to the "Bone Pile." Many more will join these poor folks, many of whom just lost their life savings and the accumulation of several years worth of retirement funds loaded with Enron stock. In a word - "GRIM"

http://www.321gold.com/editorials/droke/droke120301.htmlClif says:
"The gold market, in true-to-form counter-cyclical fashion, is trading opposite the equities market and the U.S. dollar, and will likely test the lows near $270 over the next several days. Silver, meanwhile, could see a bounce and feeble rally to $4.20-$4.25 before turning down to test the lows of the year near $4.00 - and perhaps slightly below. Both silver and gold are in the process of absorbing the last remaining lines of supply, and should be clear to launch their respective bull markets sometime in the first quarter of 2002.

Comex December gold futures are oscillating in sine wave fashion within a $25 trading range. The upper boundary of the cycle channels is at $295 with the lower boundary at $270 or slightly below. From the looks of the current cycle channel configuration, gold should continue meandering sideways over the next few weeks into early 2002 before finally turning around in the first quarter and heading upward to test psychological resistance at $300. Once the overhead supply that exists between $300-$320 is taken out gold will have the all-clear to trend upward and anon in a bullish Year 2002 for the yellow metal. . . "

http://biz.yahoo.com/apf/011203/argentina_economy_3.html
Angry Argentines Crowd Banks After Government Partially Freezes Bank Accounts

Snippit:

BUENOS AIRES, Argentina (AP) -- Banks overflowed with thousands of angry Argentines on Monday after the government partially froze bank accounts to stem a nationwide run on banks and avert financial collapse. Economy Minister Domingo Cavallo announced restrictions over the weekend, saying it was his only option to defend the Argentine peso's one-to-one peg to the dollar and escape a possible devaluation. The measure bars people from withdrawing more than $250 in cash per week from their accounts and restricts transfers abroad to $1,000 a month. Beyond that, Argentines will have to make payments using bank debit cards, credit cards, or checks to pay goods.

Banks filled for hours with disgruntled and confused clients. Some rushed in at closing time, like Juan Manuel Dedionigis, 26, who pounded noisily on the plate glass windows of a bank branch trying to get some attention. ``These new restrictions don't make any sense at all,'' he complained angrily. ``With the little cash they'll let us have, I guess I can get by for 10, maybe 15 days.''

Black Blade: Like scenes from 1929 or more recently - Russia 1998. Maybe coming soon to a bank near you. The Global Economy is in bad shape and getting worse. I know that I keep harping on this over and over, but it still makes sense - get out of debt, get basic dry goods and food stores, get Gold and Silver portfolio insurance, and have plenty of cash on hand for several months expenses. I know that tonight there are a few million Argentines who wish they had taken that advice. "Interesting Times"

http://biz.yahoo.com/rf/011203/n03254157_1.html
Snippit:

NEW YORK, Dec 3 (Reuters) - More Americans struggled to make their mortgage payments in the third quarter, as more people lost their jobs in a weak economy, according to a mortgage industry survey released on Monday. ``The weakening GDP (gross domestic product) and job losses in the technology and manufacturing sectors have affected homeowners' ability to keep their mortgage payments current,'' said Douglas Duncan, chief economist at the Mortgage Bankers Association of America in a statement. In fact, homeowners have not lived these tough times in a decade during the height of the last recession. Low-income households were especially hard hit, according to the latest mortgage payment data.

Not only falling behind in their mortgage payments, Americans, saddled with debt burdens not seen in nearly 15 years, have been struggling to meet other debt obligations. Last month, bond rating service Standard & Poor's estimated that 5.1 percentage of credit cardholders were late in making their card payments in September, unchanged from August but up 1.4 percentage point from a year earlier. Americans, despite heavy debt burden and a worsening jobs picture, dug deeper into their wallets at the end of the third quarter, the government reported early Monday. Personal spending rose 2.9 percent in October for the biggest one-month increase ever, as record low mortgage interest rates lined the pockets of homeowners who refinanced in record numbers and automakers lured buyers with zero-interest car loans.


Black Blade: Consumer debt is rising and we will see record default rates. I expect to see record home foreclosures. I also wonder how many people lured by zero interest on auto purchases will be facing down the repo-man? The "Bone Pile" continues to grow and is likely to continue growing as this recession deepens further. Also of interest is how severe the shock waves will be as the Enron saga plays out. Many consumers will find themselves trapped with excessive debt. In a word - "GRIM"

"We're all in this together (like Argentina)"Enron Lines Up $1.5 Billion in Bankruptcy Financing
(Update4)
By Jeff St. Onge and Jim Polson

New York, Dec. 3 (Bloomberg) -- Enron Corp., a day after filing the biggest
bankruptcy case in U.S. history, lined up $1.5 billion in Chapter 11 financing from
a bank group led by J.P. Morgan Chase & Co. and Citigroup Inc.'s Citibank.

U.S. Bankruptcy Judge Arthur Gonzalez in New York City let Enron draw $250
million from the credit line to keep its energy trading and other operations running
while it tries to reorganize. Seeking to avoid complete collapse, Enron cut 4,000
jobs at its Houston headquarters, more than half its staff there.

``Trading operations will continue and pipeline operations will continue,'' said
spokeswoman Karen Denne.

Gonzalez scheduled a Jan. 7 hearing to consider giving Enron access to the full
$1.5 billion line of credit. The company was down to its last $500 million in cash
without the help, Enron lawyer Martin Bienenstock told Gonzalez at a hearing
that lasted into the evening.

Enron also is suing Dynegy Inc. for $10 billion for its rival's about-face in
withdrawing a $23 billion bid to acquire Enron. Today Dynegy retaliated, suing in
a Texas court to gain control of Enron's Northern Natural Gas Co. pipeline.

Enron sought bankruptcy protection to rescue and revive its trading business,
which accounted for most of its $101.8 billion in revenue last year, said
Bienenstock.

Shares of Enron rose 14 cents to 39 cents. The stock traded as high as $90.75
last year.

Negotiations

The company is negotiating with three companies of ``impeccable
creditworthiness'' and hopes one will become a partner in its energy-trading
business, Bienenstock said. He said the company had less than a week since
Dynegy canceled its takeover to obtain temporary financing. ``Under the
circumstances, this was the only available credit,'' he said.

Enron won Gonzalez's permission to pay a minimum of $4,500 in severance to
fired employees, to spend as much as $40 million to complete construction of its
office tower in Houston and up to $8 million for Internet access and other
expenses critical to its trading operation.

Enron and at least 13 units declared bankruptcy yesterday, listing total assets of
$49.8 billion and debts of $31.2 billion.

Enron's trading business plummeted after the company in mid- October reported
a third-quarter loss of $1.01 billion, Bienenstock said. Before that, Enron's trading
book carried a value of $12 billion. Today, that has fallen to $6 billion to $7 billion,
he said.

``We do not today have every `i' dotted and every `t' crossed,'' in crafting a
reorganization strategy, Bienenstock said. More Enron businesses will file for
bankruptcy protection, he said, without providing details.

Enron's nosedive -- its shares have lost 99 percent of their value -- has also
placed a spotlight on Arthur Andersen LLP, the company's auditor. Enron said
last month it overstated its 1998 income by $113 million, part of $586 million that
the company cut from its profits since 1997. The Securities and Exchange
Commission is investigating.

Exodus

The company had about 21,000 employees at the end of September, two-thirds
in the U.S., about a fifth in the U.K. and the rest in other parts of the world. It
fired 1,100 workers in the U.K. last week.

Workers streamed out of Enron's sleek glass office tower in downtown Houston
today, carrying boxes of personal possessions and saying their goodbyes.
Police officers on horseback helped direct traffic on nearby streets.

Employees said they were separated at the office into two groups. One was told
to leave and check Enron voice-mail for updates on their status. Others were told
they will be kept and were ordered to stay on the job.

``The worst thing was the ones they are going to keep were whisked away into a
room like they were having champagne and caviar, and we were getting booted,''
said Chris Ihrig, who traded steel and forest products. ``They always preached
respect, integrity, communications and excellence, and it never was upheld.''

Enron Chairman Kenneth Lay said he will try to keep workers who are key to
running trading operations, which used to provide 97 percent of Enron's revenue.

BERLIN (Reuters) - Germany is suffering its most severe recession in 20 years, the president of the Ifo economic institute, Hans-Werner Sinn, has said.

"We are now in a recession which - probably - is as sharp as the one in 1981," Sinn told reporters, referring to the downturn Germany suffered during the second oil crisis in 1981.

Sinn said the closely-watched Ifo business climate index had in the last two months fallen as sharply as it did in 1973. Sinn called on the German government to bring forward planned tax cuts and launch a state programme to boost investment. The German government has so far refused to do either.

is trading up five cents to $4.23 right now in Sydney and Hong Kong. Perhaps Chicken man's $390. will be a winner. If silver moves up a few dollars, gold will be afraid to stay behind.
Play nicely now Silver. Let your buddy Gold climb with you.
I just received this months "Futures" magazine and noticed another article by James Cormier-Chisholm called "Silver: Tarnished no more". If it's got anything newsworthy, I'll report tomorrow as it's late here and I have to get up before the sun does in the morning.
Say good night Rich...

It was bound to happen. With Robert Rubin and Gerald Ford on the board of directors with Citicorp, how could they miss. There is also some heavy hitters on the board of directors for JPM. Oil types.

Come on. What about an attack on the Golden Gate?

Invisible Hand...does that make you an optimist or a pessimist...or just a realist? Smile...

Bangkok Post (12/4/01)
"CRASH OF '97"
Baht swaps blamed for forex losses
Charges to be laid against Rerngchai
by Staff Writer: Parista Yuthamanop Wichit Sirithaveeporn
(try and say that name four times rapidly !)

Swap transactions taken by the Bank of Thailand during the 1997 defence of the baht had caused net losses for the country's foreign reserves, M.R. Pridiyathorn Devakula, central bank governor, announced yesterday.

The ruling clears the way for formal legal charges to be taken against Rerngchai Marakanond, who served as central bank governor from July 1996 to July 1997.

The central bank last Friday ruled that Mr Rerngchai had been severely negligent in his duties relating to the baht defence. Under state laws, officials causing damage to the state can be held personally liable.

M.R. Pridiyathorn said the extent of the losses would be finalised today and then forwarded to prosecutors for formal charges to be filed later this week.

The plaintiff in the case would be both the central bank and the Exchange Equalisation Fund.

Finance Minister Somkid Jatusripitak yesterday said that the government would not intervene in the case on whether to press charges.

If Mr Rerngchai had evidence or documentation to present in his defence, he could do so within the court system, he said.

M.R. Pridiyathorn said over 2,000 transactions related to the baht defence and carried out from Nov 30, 1996, to Jun 30, 1997, were examined to assess total damages.

``Some of the transactions resulted in profits, some losses. But overall, there was a net loss for the reserves,'' he said.

Pointedly, he said the swap contracts would calculate damages at the time of their maturity.

The swaps, some of which carried terms as long as one year, allowed the central bank to intervene in the currency markets while maintaining reserve figures at artificially high levels.

The fixed exchange system had come under heavy stress in the first half of 1997, as declining market confidence, a weakening economy and cracks in the financial system led speculators and investors to abandon the baht.

But the attacks took their toll, and the central bank eventually was forced to float the baht in July 1997 after reserves were exhausted after more than US$24 billion in swaps were taken out. The following month, in August, the government was forced to accept a $17.2-billion standby credit programme from the International Monetary Fund.

Even so, the baht continued to fall throughout late 1997 and early 1998, reaching a low at nearly 58 to the US dollar.

The Chuan Leekpai government, which came to power in late 1997, established several investigative panels to study the actions taken by the central bank regarding the baht defence and assistance given to ailing banks and finance companies.

Pichet Phanvichartkul, a deputy finance minister in the Chuan cabinet, said findings of several of the committees had changed after M.R. Pridiyathorn became central bank governor.

Mr Pichet appointed a 10-member panel chaired by Pramuk Sawasdi-mongkol to investigate potential legal violations made by central bank executives during the crisis in late 1999.

He said the full findings had been already forwarded to the central bank and prosecutors earlier this year.

But the central bank had failed to press any criminal charges, or impose disciplinary action as recommended by the committee, Mr Pichet said.

He said findings of gross negligence by a committee assessing potential civil damages had also been diluted in many cases, and pointedly noted that several of the executives singled out by the report were now economic advisers to the Thaksin Shinawatra government.

Among the officials cleared last week by the central bank for civil violations were former governors Vijit Supinit and Chaiyawat Wibulswasdi, both serving now as government advisers.

Mr Pichet said the Democrat party would monitor the final results of the investigation and the actions taken by the government.

Senate leaders also said they would ask the central bank to clarify its findings in the case.

Suchon Chaleekrua, chairman of the Senate banking and finance panel, said yesterday he would ask the finance minister, the central bank governor and the Comptroller-General to testify about the case on Friday.
====
Too bad THIS law in Thailand can not be used in the USA !
<;-)

http://globeinvestor.com/servlet/WireFeedRedirect/RT/C/20011203/wenro?cf=GlobeInvestor/config&vg=BigAdVariableGenerator&slug=wenro&date=20011203&archive=rtgam"Snippit"

Enron Canada Corp.'s attempt to escape the fate of its parent will be put to the test in an Alberta court tomorrow when it faces clients over its bid to force them to uphold their contracts.

The company, the Canadian gas and electricity trading unit of beleaguered Enron Corp., was hit with a slew of contract suspensions and cancellations as a result of its parent's credit downgrade last week and filing for bankruptcy protection on the weekend. Enron provided the credit guarantees for Enron Canada.

But Enron Canada, which wasn't included in the bankruptcy filing, is solvent and can continue to operate if the court grants an injunction preventing contract cancellations, company chief executive Robson Milnthorp said in an affidavit filed Friday.

"Enron Canada is solvent and able to pay its obligations as they become due provided that those who transact with Enron Canada continue to perform their obligations," the affidavit read. It described the Canadian business climate in regards to Enron as one of "market hysteria."

Among Enron Canada's counterparties, including oil and gas producers, utilities and power producers, the company's actions were greeted with reserve or skepticism.

Mr. Feuchuk said PrimeWest has already entered into new contracts for the gas that had been covered by the Enron Canada contracts.

At senior producer Talisman Energy Inc., which suspended contracts with Enron Canada last week, spokesman David Mann said the company will be opposing Enron Canada's request on Wednesday..."

Forthwith are three reasons why you are being restrained from withdrawing more of your money from the banking system in your country:

1. There is likely only 2-3% of actual currency available as a percentage of total deposits for physical withdrawal.

2. The currency cannot be printed fast enough.

3. Money as we have all known it for the last thirty years is only a concept.

Comprendez amigos? Get Gold.....CM

$$$$$266.50$$$$$ The worse things get, the more they'll stomp the price down.

http://www.buenosairesherald.com/An "insiders view" per Buenos Aires Herald:

Banking restrictions decreed by President Fernando de la R�a on Saturday come into effect today. The President and Economy Minister Domingo Cavallo said on national television last night the measures were taken to fight "an enormous speculative attack" against Argentina.

Earlier in the day politicians from all sides of the spectrum had lashed out at the government's measures. These were designed to stop a bank run which on Friday seemed to be leading to financial collapse. "We have come out to defend ourselves," said De la R�a in a three-minute TV address. "National unity is today more important than ever." Cavallo spoke for over 20 minutes right after the President and explained the details of the cash flow restrictions. The measures include a 250-peso or dollar cap on the funds account holders can withdraw in cash every week. "I apologize because I know many of you became scared by the measures. But we are doing this to defend your savings. Those financial vultures that destroyed Russia and Ecuador are not going to beat us," said Cavallo . . . ."

http://www.themoscowtimes.com/stories/2001/12/04/042.htmlSnippit:

Falling world oil prices are threatening the profitability of Russian oil firms that provide much of the country's hard currency earnings and are leading to calls for a policy of ruble depreciation.

Proponents insist it would benefit not only domestic oil firms by reducing production costs but all industry as it claws its way back from a decade-long slump.

But critics warn that even a controlled depreciation could bring about a fresh surge in inflation, historically one of the country's biggest economic problems, and destabilize its currency market, reducing the benefits from oil exports. Russia is the world's second-biggest oil exporter after Saudi Arabia.

"Oil companies don't need it. With oil prices where they are right now, these companies are still very profitable," said Roland Nash, chief economist at Renaissance Capital. "If prices fall to $12 per barrel, it might be an idea. Now, a ruble devaluation would do more harm than good."

Benchmark Brent crude climbed toward $19 a barrel in London on Monday.

The ruble's official rate is set daily by the Central Bank. Usually, the rate is based on the results of a special trading session in the foreign exchange market that is controlled by the Central Bank and into which exporters must sell 50 percent of their hard currency earnings.

While the Central Bank has been allowing the currency to ease versus the dollar, it has only allowed it to slip at a rate slower than that of domestic inflation. At first that policy, adopted in the months after the August 1998 financial crisis, sparked worries that manufacturers would lose competitiveness and that the economy would be harmed.

But oil prices rose to over $30 at the end of 2000 and in early 2001, setting the economy growing at a tempo unseen in the last decade. Oil firms are still continuing to export at maximum capacity, bringing billions of dollars back home to fill tax coffers and allow the Central Bank to stockpile record reserves.

But falling oil prices have led to calls in some quarters for a ruble depreciation that would cut domestic production costs and improve profit margins.

"That is confidential information, but it is known to me," said Nikolai Gonchar, a member of the influential budget committee in the State Duma..."

$$$$$284.00$$$$$

My wife and I use a national group health insurance program through a professional organization that we are members of. We just got a rate increase notice of 19.4%! This is on top of about a 10% increase about 8 months ago! The increased rate is only gauranteed through 2002.

I guess someone has noticed that Greenspan & Co. are working overtime on the presses.

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B242256B170053A89F?OpenDocumentSnippit:
JOHANNESBURG � The spectacular crash of the South African rand has helped the Johannesburg gold board to register almost a hundred percent growth this year. Far from calling an end to the twelve-month bull run, analysts are expecting shares to run still further as ever-increasing local currency margins filter through to the bottom line.

The run in gold shares, despite a dollar gold price that remains monotonously trapped below $290/oz, suggests that the view that the dollar-gold price drives the Johannesburg market is carrying less water. Since the beginning of December last year, the dollar price has averaged at an uninspiring $270.80/oz, peaking briefly at $293.25 and reaching a more protracted low around the $255.95 level.

Conversely, though, the rand-gold price has gone ballistic. At the beginning of December last year, bullion was at R66,720/kg, with the rand at R7.58 to the dollar. Today, South African producers are reaping the benefits of a R91,880/kg gold price, with the rand hovering tentatively around R10.43 to the dollar..." and more, including graphs.

I had group health insurance (Blue Cross Anthem) and I too noticed that the premiums would rise almost on a monthly basis, or so it seemed. I dumped that turkey. Since I am self-employed I was fortunate enough to qualify for a Medical Savings Account (MSA) through a professional association. I have a high deductible so that premiums are low and the cash I put into the MSA account is tax deductible and earnings are tax deferred like an IRA.

- Black Blade

$$$$284.50$$$$$$

Progress Report as of 12/3/01 22:22MT
------
MK says: HEAR YE! HEAR YE!! --we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex. Each entry must be surrounded by dollar signs as follows $$$$$30,000$$$$$. The winner will receive a one tenth ounce Austrian Philharmonic. Let's make the guesses in 50� increments. All entries must be posted by 5pm MST Tuesday, December 4th.
===
$$$3,257.50$$$$$ The Invisible Hand (12/3/01; 20:30:25MT
$$$$$390.00$$$$$ Chicken man (12/1/01; 19:16:27MT

$$$$$350.00$$$$$ sourdough (12/1/01; 09:28:15MT

$$$$$331.00$$$$$ LimitUp (12/2/01; 21:33:35MT

$$$$$320.00$$$$$ Scarab (12/1/01; 15:30:22MT

$$$$$302.50$$$$$ Gene (12/2/01; 18:22:33MT

$$$$$300.50***** Goldfinger 2 (12/3/01; 08:12:43MT
$$$$$300.00$$$$$ Max Rabbitz (11/30/01; 20:07:20MT

$$$$$297.50$$$$$ Netking (12/2/01; 01:53:34MT

$$$$$296.50$$$$$ tedw (11/30/01; 19:50:42MT
$$$$$296.00$$$$$ THX-1138 (12/1/01; 00:31:32MT

$$$$$294.00$$$$$ Neubie (12/3/01; 14:22:02MT

$$$$$292.50$$$$$ darkhorse (11/30/01; 18:48:35MT

$$$$$290.00$$$$$ ji (12/2/01; 16:36:24MT
$$$$$289.50$$$$$ goldquest (11/30/01; 23:12:21MT

$$$$$288.50$$$$$ slingshot (12/1/01; 13:02:04MT

$$$$$287.75$$$$$ Hydro (11/30/01; 20:53:23MT

$$$$$286.50$$$$$ ROSEBUD99 (12/2/01; 21:21:03MT
$$$$$286.00$$$$$ balzac (12/3/01; 14:43:03MT

$$$$$285.00$$$$$ Quixote (12/2/01; 15:04:57MT
$$$$284.50$$$$$$ Rx Gold (12/3/01; 22:20:41MT
$$$$$284.00$$$$$ redloc (12/3/01; 21:20:33MT
$$$$$283.50$$$$$ Lamprey (12/03/01; 09:52:17MT
$$$$$283.00$$$$$ goldroadlx7 (12/03/01; 15:27:45MT
$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$$282.00$$$$$ Maiden Fan (12/2/01; 11:13:21MT
$$$$$281.50$$$$$ Buena Fe (12/1/01; 20:51:51MT
$$$$$281.00$$$$$ VanRip (11/30/01; 21:05:14MT
$$$$$280.50$$$$$ Solomon Weaver (11/30/01; 23:03:28MT
$$$$$280.00$$$$$ Yellow Jacket (12/2/01; 10:51:56MT
$$$$$279.50$$$$$ The CoinGuy (11/29/01; 21:48:53MT
$$$$$279.00$$$$$ Shermag (12/1/01; 13:30:47MT
$$$$$278.50$$$$$ Broken Tee (11/30/01; 10:52:21MT
$$$$$278.00$$$$$ Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$ RobotGuy (12/1/01; 13:31:55MT
$$$$$277.50$$$$$ Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$ Waverider (11/30/01; 01:23:24MT
$$$$$276.60$$$$$ wiley (11/29/01; 22:47:01MT
$$$$$276.50$$$$$ goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$275.50$$$$$ Ducat (12/01/01; 07:48:39MT
$$$$$275.00$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$ Black Blade (11/29/01; 21:54:25MT
$$$$$274.00$$$$$ mikal (11/30/01; 22:54:23MT
$$$$$273.50$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$273.00$$$$$ Canuck (12/01/01; 09:00:56MT
$$$$$272.50$$$$$ Mythical (11/30/01; 18:08:12MT
$$$$$272.00$$$$$ Henri (11/30/01; 11:44:46MT
$$$$$271.50$$$$$ Argent (12/1/01; 10:16:21MT
$$$$$271.00$$$$$ Goldfly (12/2/01; 12:07:06MT
$$$$$270.50$$$$$ HOOSIER GOLDBUG (12/2/01; 17:14:24MT
$$$$$270.00$$$$$ Flatlander (12/1/01; 18:32:56MT
$$$$$269.50$$$$$ Frosty (12/2/01; 17:28:43MT
$$$$$269.00$$$$$ megatron (12/2/01; 14:50:46MT
$$$$$268.50$$$$$ HopeingII (12/1/01; 22:37:42MT
$$$$$268.00$$$$$ BR549 (12/2/01; 18:13:47MT

$$$$$266.50$$$$$ auric (12/3/01; 20:58:09MT

$$$$$263.80$$$$$ WW Oracle (12/2/01; 20:19:51MT
====
Go HIGH or Go low, BUT GO !!! Less than 19 hours to give USAGOLD Forum your "GUESS"
<;-)

Gold moving slightly down.

nugget101 (12/3/01; 22:42:32MT - usagold.com msg#: 66352)
******** $276.10 *********
Gold moving slightly down.
===
Sir Nugget101 --- IF the above is a CONTEST entry --
Please read the post #66351 (directly below your post)
THEN if you wish to enter the contest, please REDO your guess. Thanks
<;-)

Call me an opportunist, a wishful thinker or somebody who would like gold urgently to skyrocket.

coco
I'm an optimist

http://www.sovereignstrategist.com/articles/18.cfmA somewhat humourful view of much we already know about the SM.....

"With the stock market up substantially from September's three year low, Wall Street pundits and analysts and the popular media are once again beating the drum for "the bottom". It seems this bear market has seen more bottoms than a box of Pampers. Unfortunately for the handful of naive investors who haven't yet realized that the so-called experts don't know bottoms from holes in the ground, every one of these "market bottoms" has proven to be false.

"But this is THE bottom," the experts tell us. "And this time, we really mean it." .........

It would be quite a feat for a record-breaking expansion to be followed by one of the mildest recessions on record. It would be much like throwing a basketball fifty feet into the air and then watching it fall ten feet toward earth, stop, and then head higher once again, defying all laws of physics. ......."

. . .


Poor old Solomon

Was out at the new Flatirons Crossing Mall near Denver last night, a beautiful example of the shopping pomp of the 90s (where a real estate agent this summer told me the houses near the Mall just had to go up in value because Malls always drive home values up). My wife is looking for childrens snow boots and the clerk at the nice kiddie-shoe-Laden told me upon my query that "sales" this year were about 50% of last years...granted, the Mall had just opened and so people we actually going out of there way to get there to shop.

Oh, and by the way....this year, the huge new Movie Theatre complex is actually finished, so one would think that traffic should be a little higher as people plan a movie and a shopping event.....

POSView Yesterday's Discussion.

http://biz.yahoo.com/rf/011204/syd187658_1.html
Snippit:

SYDNEY, Dec 4 (Reuters) - Newmont Mining Ltd applied on Tuesday for a restraining order delaying rival AngloGold Ltd from paying higher fees to brokers who rope in acceptances for its offer to acquire Normandy Mining Ltd (Australia:NDY.AX). Nigel Morris, director of the Australian Takeovers panel, which has jurisdiction in the matter, said the government agency would rule on the application ``late Wednesday at the earliest''. Johannesburg-based AngloGold said it had agreed not make any payments to brokers until the matter was resolved.

Black Blade: Now Newmont put forward a legal challenge - delaying action. Share prices of NEM and AU could adjust so the bids over the next few days are probably roughly equal. It also give NEM time to counter with a higher bid. This is getting to be an "interesting" soap opera. Also add in the $40 million break up fee on AngloGold's end and the bids are pretty much a wash.

Hey, I'll just bring up the rear for the time being!

http://biz.yahoo.com/rf/011204/syd168855_1.html
Snippit:

SYDNEY, Dec 4 (Reuters) - Normandy Mining Ltd (Australia:NDY.AX) shares touched a three-and-a-half year high on Tuesday on the possibility of a third bidder joining the fight for the Australian gold miner. No new names have come forward, although Canada's Barrick Gold Corp (NYSE:ABX) has been mentioned by analysts as a competitor with enough clout to potentially outshoot both Newmont and AngloGold for Normandy. ``You can't rule out a company like Barrick, but you need to ask, if they are serious, why wait until now,'' said a mining analyst. But others have suggested that AngloGold may have reached its bidding limit and may be unwilling to continue a bidding war.

Black Blade: Maybe it's ABX to the rescue in order to keep Normandy in Hedge Fund hands. It would not be surprising. ABX and AU are both desperate and in the same difficult situation as they need more "cheap" ounces to deliver into the hedge books (eating their young?). If successful, they will of course gut the heart out of Normandy's deposits.

http://www.thewest.com.au/20011204/business/tw-business-home-sto34927.htmlComment: The days of the "hedge hog" is going fast. The current moves within the industry show a pronounced scramble to unwind the perceived contingent liability that a large hedged position in a rising gold market is to the producer. - Netking

Snippet:

GOLD hedging by Australian producers continues to decline, according to JPMorgan's September Quarter hedging review released today.

The review showed hedging in the three month period totalled 36.5 million ounces at A$591 per ounce, down 1.4 million ounces or 3.7 per cent on the June quarter figure of 37.9 million ounces at A$627 per ounce.

Thirteen companies reduced their ounces hedged by a combined total of 1.8 million ounces while five companies added 500,000 ounces. Lihir increased its book by 133,000 ounces and Normandy NFM and Hill 50 by about 90,000 ounces.

The biggest decrease for the quarter was Normandy Mining which was down 182,000 ounces to 9.59 million ounces; Newcrest 153,000 ounces to 6.57 million ounces and Sons of Gwalia 75,000 ounces to 3.35 million ounces.

According to the review, hedging now covers 43 per cent of Australian gold reserves, down from 46 per cent in the June quarter. . . . "

http://www.usagold.com/ProductsPage.html

" 'Good as gold' speaks only of yellow metal:
a Truth lost as often as money
by players in leverage, credit banking systems, and Ponzi schemes."

-- R. Strauss

http://smh.com.au/news/0112/04/biztech/biztech12.htmlI suspect there will be some surprises at the end of the day, things are not always what they seem, and this game os far from over. - Netking

Snippet:
Expectations grew yesterday that the world's most powerful gold company, Canada's Barrick Gold, was about to blow away competing bids by AngloGold and Newmont for Normandy Mining. . . .

Normandy is Australia's biggest gold producer and, as a unit, has the ability to make either Barrick, Newmont or AngloGold the world's biggest gold producer. . . .

But the stakes involved suggest that even if it is all over for AngloGold and Newmont, Barrick has at least one shot to fire, ensuring in the process that it becomes the world's dominant gold producer instead of an enlarged AngloGold-Normandy or Newmont-Normandy.

Big is by no means best in the gold business but the major players nevertheless hate being second best on basic measures. Because of its superior financial performance, thanks to astute hedging, Barrick could out-shoot Newmont in any (cash) bidding for Normandy. AngloGold is considered a worthy competitor but without the North American valuation multiples of Barrick, it would start well behind."

http://www.usagold.com/jewelry/gold/buy_18k_index.htmlATTENTION Holiday Shoppers!
"We invite you to browse our jewelry section. The Termine & Winer Classic Collection of 18-karat designer crafted jewelry was suggested to us by the World Gold Council. It is of very high quality, sure to please and the prices are right. I know most male shoppers like to put things off to the last minute but given the price breaks and lack of sales taxes that come with buying from us on-line, it might pay to get this done as soon as possible. If you wait too long we may not be able to get you the order on time. Just call and talk to Marie or order right at the page on-line. Your order will come by Fed-Ex -- a done deal. Your selection comes in a very nice black velvet box with a very classy card that goes with it. We really went out of our way this year to offer something we think your loved ones will appreciate." --MK

WASHINGTON (Reuters) - President Bush on Tuesday will announce new steps in the U.S.-led effort to shut down financial support for international terrorism, a senior administration official said.

The offical on Monday declined to characterize the measures. The White House said Bush would deliver a statement on "the financial aspects of terrorism" at 11 a.m., before leaving on a day trip to Florida.

As part of its campaign against global terrorism, the United States and its allies have already taken several steps to disrupt the financing of suspected terrorist groups.

Since the Sept. 11 attacks that triggered the anti-terrorism war, the United States has tightened laws to control money laundering, ordered a freeze on assets of suspected individuals and organizations and closed money-transfer businesses suspected of aiding targeted groups.

$$$$$$$285.50$$$$$$$
alia iacta est

http://uk.news.yahoo.com/011204/80/ckesq.htmlLONDON (Reuters) - British fixed-line telecoms giant BT is cutting 13,000 jobs at its retail division.


The job cuts, announced on Tuesday, are part of moves announced earlier to cut 850 million pounds costs over three years.


In its earlier statement, BT Group Plc detailed targets for its fixed-line voice call division and unveiled a new off-peak calls package to tempt retail customers as competition hots up.


BT said it was aiming for three percent compound annual growth in revenue for the four years to 2004/05 for BT Retail

The most important coalition-partner in the evolving Middle East drama is Russia. Russian oil barrons and the Russian state of affairs, do smell a gigantic opportunity, in the present re-balancing of forces and interests of the West versus M.E.

Al Qaida has the oil-element in his program, somewhere down the road. 1,2 billion moslims/islamists will unite in their anger against, what they call a western conspiracy against islam. For instance, the 2 billion dollars per year, that are used to buy friendship and peace from Egypt, will become insufficient. The same strategy of peace for dollars will be applied to Pakistan and Afghanistan.

Friendship with Russia (second largest oil supplier) will prove to be a very, very surprising gamble. Because most of the revenues from resource-plundering goes to an extreme small group of looters. A highly un-reliable partnership, from all points of vieuw.

Are there Palestinian factions part of the Al Qaida program
for resurrection of islam ? At what stage of the ME-turmoil, will oil supply be cut off ? And is it possible to stop escalation at that particular critical POO-point ?

ME-turmoil has already 50 years of age, since the erection of the state of Israel in 1949.

In other words, the POO has already been managed, by the demander and not the suppliers, for 50 years.
For this reason, I suspect that a sudden explosion in POO (not supply/demand related) will signal in who's favor the anti-terror campaign is evolving. A very good reason for not postponing the further accumulation of Physical and realising that a 600$ target POG is a high underestimation.

World opinion is unmoved on the Afghanistan events, due to absolute lack of images. Is the Palestinian cause, compensating for this ? I am afraid that Al Qaida is much more than simply some fanatical radicalism !?
It is an anti Anglo-Saxon, rapidly swelling mood/strategy.
Intrinsicaly more dangerous than terror on itself. it is a make or break plan wich will affect the dollar through oil with consequences for Gold !? And will the euro be the unwanted benefittor ?

350,000 tonnes of coins heading for the crusher
By Bettina Wassener in Frankfurt
Published: December 3 2001 18:31 | Last Updated: December 3 2001 18:37



When the 12 countries of the eurozone start to trade in their old notes and coins for euros on January 1, the machine they call "the Decoiner" will be ready.

Across the eurozone, 350,000 tons of legacy coins need to be rounded up, stored and ultimately melted down so their metal can be recycled.

A large chunk of this cash is in the form of higher denomination coins, and is valuable enough to require guarding against theft. EuroCoin, a coin minting company based in the German town of Schwerte, estimates that secure transport of such coins would cost six to eight times as much as simple transport of scrap metal by truck.

Enter the Decoiner. Looking appropriately rather like a rubbish skip, the decoiner squashes higher denomination coins and renders them worthless to thieves, allowing them to be transported and stored more cheaply until the scrap metal is melted down for use elsewhere.

EuroCoin's dozen or so machines, which can be shipped to central banks' coin storage sites, swallow up to five tons of money an hour, spitting them out at the other end as deeply grooved and bent versions of their former selves.

EuroCoin will be in charge of devaluing coins in Germany, Austria, Italy, and is the dominant player in the field. It also hopes to obtain contracts from Ireland and Finland soon.

In Germany alone 5bn higher-denomination "silver" coins (50 pfennig, 1, 2, and 5 DM) weighing 35,300 tons will be collected. There have been small-scale trial runs in the country, but the coin-mangling operation only really gets into full swing in January, when the parallel task of euro distribution is out of the way.

Apart from being the nemesis of D-mark, schilling and lire coins, EuroCoin is also the single biggest producer of the "coin blanks" that make up the new euro coins. The company has contracts with 11 of the 12 eurozone nations to produce 25bn such raw metal discs, which individual central banks later mint into the finished, detailed coins that will end up in 300m eurozone citizens' pockets from January 1.

The metal from the German "silver" coins, for example, is suited for re-use in the production of elements of the "bicoloured" E1 and E2 euro coins, which are composed of a core disc encircled by a ring of different metal.

EuroCoin will therefore bid to buy the legacy coin metal from the relevant national authorities for euro production. Once the bulk of that job is done, the metal can also be used in the production of other currencies, such as Thai baht or Malaysian ringgit, it says.

"Some 12m coin blanks are produced daily at our main production site in Schwerte alone," says Katja Vogt, EuroCoin's spokesperson. "One in two euro coins will originate with us."

The production of coins (euros and other currencies) - rather than coin crushing - is in fact the company's main source of revenue. EuroCoin's sales have risen to around DM500m a year, the bulk of which stems from euro-related contracts (production as well as "decoining"). However, Daniel Sheffer, member of the board at EuroCoin, expects the single currency to keep generating business for the company for years to come beyond E-day. "For the immediate changeover, about 160-170 coins have been produced per eurozone inhabitant. This is well below the roughly 250 D-mark and pfennig coins per head we currently have in Germany, indicating that the initial supply of euro coins right now is at the lower end of what is likely to be needed in the longer term," he says. "There will also be added demand for euro coins and notes as EU enlargement progresses."

Argentines ponder life with empty wallets
By Thomas Cat�n in Buenos Aires
Published: December 3 2001 20:11 | Last Updated: December 4 2001 02:20



Confused Argentines were struggling on Monday to work out how the government's new banking and exchange restrictions would affect their daily lives.

Bank account-holders are now limited to withdrawing $250 a week in cash. Any amount above that must be spent by cheque, credit card or debit card. In addition, Argentines may take no more than $1,000 in cash abroad. Companies must obtain official clearance to make foreign payments above that amount.

The draconian measures were announced at the weekend after a run on deposits threatened the banking system.

On Monday, Argentines faced a vast range of questions. Many wondered how payments could be made to workers operating in Argentina's vast black economy - including maids, taxi-drivers, restaurant staff, psychoanalysts, plumbers and even prostitutes. Few have the ability to take credit or debit cards but fear that clients will be loath to part with their newly limited cash.

Domingo Cavallo, the economy minister, said all such people would now have to set up bank accounts and become part of the formal economy. The government will offer an amnesty for any companies declaring workers that had previously been paid "under the table".

Small businesses - few of which have the ability to accept electronic payments - also suffered on Monday as customers sought out others that did. The government said that the machines needed to carry out debit and credit card payments would be made available en masse and their cost would be tax-deductible.

Others wondered how they would take holidays abroad - the southern hemisphere summer is here and many Argentines go abroad for Christmas and New Year. This year, however, they will be able to take only $1,000 in cash and, even abroad, they will not be able to exceed the limits on withdrawals from cash dispensing machines.

On Monday, many travel agents remained closed as the owners met to figure out how to operate.

President Fernando de la R�a on Monday tried to reassure people that the temporary restrictions, which are slated to last 90 days, would not affect the value of their savings. "Everyone's savings are secure," he insisted. "The measures were taken for that very reason."

For many Argentines, however, the measures bring back bitter memories of the "Plan Bonex" 11 years ago, under which fixed-term deposits were confiscated by the government and turned into 10-year bonds. The bonds quickly dropped to 30 cents on the dollar in the secondary market, wiping out the savings of many Argentines.

The latest measures also raised the spectre of a return to the financial madness that beset the country in the late 1980s, when inflation reached 5,000 per cent. Such inflation rates were tamed in 1991 by introducing a currency board, which backed every peso in circulation by a dollar in reserve. Under a "convertibility" law, introduced by Mr Cavallo during a previous stint as economy minister, the banks must change a peso for a dollar on demand, guaranteeing the 1-to-1 exchange rate.

However, the new restrictions call into question whether the currency system has been adulterated. Some economists predict a chaotic situation in which several parallel currency markets spring up in the informal economy, much as they did in the 1980s.

Filomena, the owner of a downtown Buenos Aires newspaper kiosk, said some custo mers had paid for their newspapers and magazines by cheque. Still others had inquired whether they could pay by debit card. She did not know if she would buy the debit machine.

One other thing she noticed; she had not sold a single copy of Ole, a sporting paper, all morning, even though a big football match was played on Sunday. But she had sold out of Ambito Financiero - a financial tabloid that made its name in the 1980s predicting the next currency devaluation.

Call me cynical, but I wonder how many of these moves are a prelude to defense of the dollar. In other words, could this be the groundwork for exchange and currency controls? Perhaps this anti-terror campaign is fortuitously providing cover for anticipated moves?

http://www.washingtonpost.com/wp-dyn/articles/A42467-2001Nov30.htmlMr Will offers his take on the economic news we all must filter through.
************

"...Law One: All news is economic news. Law Two: All economic news is bad news.

Terrorists attack. U.S. forces advance. Katie Couric is in love. Or not. All this is economic news? Indeed. Consumer spending is three-quarters of all economic activity, so anything that affects their sense of well-being is economic news..."

snip

"...Just eight days after the terrorist attacks, General Motors launched zero percent financing. Other automakers followed, more vehicles were sold in October than in any month ever, and 2001 may be the second- or third-best sales year in Detroit's history. How can this be bad news? Here is how.

The financing effectively meant a 4.7 percent drop in the prices manufacturers were charging for cars, so profit margins are now minuscule. Furthermore, what an analyst calls "profitless prosperity" is cannibalizing future sales, which probably will plummet when normal financing resumes. See? Record sales can be seen as depressing news..."


*******
OK George, Beauty always was in the eye of the beholder. But when did the gummint stimulus package come to include 'corrective' laser eye surgery? Gold is the tail that wags major economic indicators, which in turn influences global economic conditions. Contestants in this beauty contest are sleeping with the judges. Gold is a judge with a gun at it's head.

http://biz.yahoo.com/rf/011204/n04299544_1.html
Snippit:

WASHINGTON, Dec 4 (Reuters) - A senior U.S. Treasury Department official on Tuesday dismissed as unfounded a report in the New York Post newspaper that the Bush administration wanted to replace Treasury Secretary Paul O'Neill.

Black Blade: Funny how "nonsense" sometimes turns out to be what happens down the road. The strong dollar policy has hurt many US multinationals. Now the deepening recession could also be cause for O'Nell to be concerned about his job. Repeat after me - "do you want fries with that?"

Thanks for noticing this article! I have an ominous feeling that somehow precious metals will be mentioned in this anti-terrorism package. I guess we'll find out in ten minutes.

I had a dream that I saw those words;
"The Gold Trail Discussion has been updated"
Oh well.
Have a golden day.

Econoclast, I imagine Trail Guide is out there wishing he could communicate with us. But he knows from sad experience that anything he says is sure to be misunderstood. It breaks my heart that this good man is having to walk the Trail in silence (and the rest of us are forced to do without his wise and kindly words) because a few fellow hikers can't resist throwing rocks.

Perhaps Trail Guide might be well advised to secure some good quality hiking boots, just in case he trips over some rocks. Also, a really good crash helmet just for protection from those falling rocks. This will assist in maintaining positional integrity on the trail.

$$$$287.00$$$$

Probably too high, but thought I'd give it a try.

Thanks for the forum.

--Novice Bear

http://smh.com.au/news/0112/05/biztech/biztech14.htmlSnippet:
Newmont has called on the Takeovers Panel to ban AngloGold from increasing its reward to brokers who round up acceptances to its $3.6 billion bid for Australia's biggest gold producer, Normandy Mining. The panel said it had accepted an undertaking from AngloGold that it would not make any payments under the reward system until the panel had considered the Newmont application for a ban, probably late today.

AngloGold proposed to increase the handling fee payable to brokers from 0.75 per cent to between 1 and 2.5 per cent depending on the size of the acceptances the brokers delivered. The only catch was the increased reward only applied until December 11. The move was seen as a pressure play, giving AngloGold's offer additional momentum against the competing offer from Newmont which will not be capable of acceptance by Normandy shareholders until well into next year.

AngloGold said that it "offered the fees to the Australian broking community in good faith and believes that they are equitable and fully comply with Australian law. . . . "

Gold can be created by atomic action on Platinum, but it is an extreemly expensive process for obvious reasons. Paper money can be counterfeited quite easily and often is. Gold that has not been brought to the surface must undergo quite a process before it can be held and cherished for it's rarity. "Digital" money can quite easily be mis-allocated. Gold has many purposes and has been valued throughout history for it's rarity and splendour. The digital/paper "honour" system has only been around for a few years respectively. All of these observations may be made by any individual, but if you study the pure simplicity of reasons for owning Gold, you sharply realize that you must indeed have some. Consider the population of this planet with respect to ownership of gold, is there enough for each of us to have some?


As Black Blade would say "Definitely interesting times."

http://sg.biz.yahoo.com/011204/15/2144i.htmlIf Barrick moves, they may have THE punch to take Normandy otherwise the suggestion is a Barrick-Anglo partnership - Netking

Main points:
Shares in Australia's largest gold miner, Normandy Mining Ltd. (A.NDY), on Tuesday rose to their highest level since a takeover war first erupted, on talk that Canada's Barrick Gold Corp. (ABX) may be poised to join the fight. Normandy shares at one stage were as high as A$1.66 on speculation that Barrick plans to launch a bid pitched around A$1.80 a share and valuing Normandy at upwards of US$4 billion . . . .

Normandy is one of the last independent gold miners of significant size to be sought by the world's gold majors.
It is a particularly tempting target for Barrick given that Barrick's merger partner, Homestake Mining Co. (HM), is Normandy's equal partner in Australia's largest gold mine, the Super Pit in Western Australia.

Homestake shareholders are due to approve the US$2.3 billion merger with Barrick at a meeting on Dec. 14. AngloGold is currently the world's largest gold producer, but would be leapfrogged by either Newmont or Barrick if either secured Normandy. Mark Pervan, resources analyst with Daiwa Securities SMBC in Melbourne, said a bid from Barrick would "make a lot of sense."

He noted that Barrick probably has the balance sheet and cash generating power to trump either AngloGold or Newmont, while Normandy's closeness to Homestake means that it could generate greater cost savings from a marriage. Normandy shareholders also could be more attracted to a paper and cash offer from Barrick given that AngloGold is offering generally less attractive South African paper, and Newmont's bid is complicated by its related takeover of 19.9% Normandy holder Franco-Nevada Mining Corp. (T.FN) of Canada.

. . . Even if Barrick doesn't bid for Normandy, it is being tipped as the most logical partner for AngloGold should the South Africans lose out to Newmont.

Why?

Is a bailout imminent!?

Is there a buyout in the works!?

No and no.

JPMChase just lent $1.5 billion to ENE to allow some time to maximize efficient liquidation of assets. Not out of the kindness of their hearts, but to help insure partial recovery of their 2 billion, which btw ENE filed as 'lost' a few days ago (this last $1.5 billion lent through bankruptcy court which insures recovery for JPMChase).

Will this story come out, or will the hypesters mislead the herd again insinuating that Enron is not yet dead, etc etc? DUH! Can you hear CNBC now? Watch the herd charge up this carcass's rectum another buck....then of course, lose it all again. Hope I'm wrong.

$$$$$$271.75$$$$$$

My father always said, "If there argument is weak, you'll know it when the insults start flying".

I've enjoyed the Trail, and unless I've underestimated the class and integrity of FOA, I'm just not willing to believe he "went to go to rest from his labors", because of any adversity from this site. I believe Sir Douglas is waiting for his position to evolve. Nothing proves ones position without time involved, and I believe it won't be long before we hear from him again. I, too enjoyed the handholding along the Trail, but my pages, well worn from study, still stand with positional integrity from my viewpoint. I say let those rocks(I'd prefer nuggets) fly if need be, in business, I've always dealt from a position of strength, I feel his analysis is no different.

Steven(The Coin Guy)

http://news.bbc.co.uk/hi/english/business/newsid_1691000/1691585.stmIn a fresh blow to the economic prospects for the eurozone economies, consumer confidence in Europe slumped to a new four-year low. The business and consumer confidence index, compiled by the EU, fell to 98.8 in November, compared to 99.3 in October. . . .

Meanwhile, prospects are growing particularly gloomy in Germany, Europe's largest economy. Germany's finance minister, Hans Eichel, has said that German economic growth could be as low as 0.75% next year, compared to the 1.25% official forecast.

That could put pressure on Germany's budget deficit, which is likely to be near the limit set by the eurozone's growth and stability pact of 3%. The EU says Germany must put its budget in balance by 2004, but denies that it is planning any sanctions against Germany before it completes its new budget forecasts. . . ."

http://www.chron.com/cs/CDA/story.hts/topstory/1157013Dec. 4, 2001, 12:14PM

"With Lenders Lined Up, Enron Stock Surges"


********
HOO BOY! Wait till those other derivative shoes start dropping a la Emelda Marcos.

.....and yes, they are asking the man on the (CNBC) street if it's too early to buy Enron. Incredible.

*********
Also very important today...President Bush freezes assets of Hamas (charities based in the US). Saying Hamas is a 'terrorist group'. This is not what the Islamic world wants to hear, who sees them as 'freedom fighters'. How will the arab world respond? The battlelines have been drawn and the energy market is in this picture.
**********

Oh, let's not forget what Sadaam just said also (to paraphrase)...."If you attack me, I will attack Israel". Now what do you think he has in mind when he says 'attack'?

Meanwhile, of course, gold is down.

http://news.bbc.co.uk/hi/english/business/newsid_1691000/1691651.stmTransbrasil Airlines has suspended all its flights indefinitely after running out of money to pay for fuel supplies from Anglo-Dutch oil firm Shell. "The company has a problem with money...(it) hasn't money to pay for fuel," a Transbrasil spokesman told BBC News Online.

Transbrasil president Celso Cirpriani is in talks with Shell, the airline's only fuel supplier, to find a way to get its fleet flying again. "The door remains open, we're talking to them," said a spokesman for Shell in London.

Transbrasil, which owes $350m, has been forced to pay cash in advance for its fuel for several months and owes wages to some of its 2,000 staff. . . . "

Comment: The government & private sector fallout is only just beginning.

http://www.boston.com/dailynews/338/economy/Leading_Democrat_doubts_Senate:.shtml
Tales from balanced budget land.Seems the administration needs a little more flexibility,despite the recent dispatching of the 30 yr. bond and surpluses as far as the eye can see.As mentioned in the article;

"Administration officials have made no specific request about how high they would raise the debt limit.But they said an increase of 750 billion to 800 billion would be enough to preclude an additional increase for at least a year."

I assume,given the magnitude of that figure,that the mentioned congressional aid is a Democrat.

I keep track of all of the FUNDAMENTALS in all of the various markets that I follow. They give me the best guidance as to the ultimate direction a market will take. I then usually wait for TECHNICAL ANALYSIS (TA) to tell me WHEN enter or exit a position.

The snip that follows seems to be yet another positive "fundamental" for all of the PM complex.

From "The international forecaster" November 2001 (HC#2) by Bob Chapman.

"Japanese purchases of gold investment products, such as bars and coins, were 10-15 tons in September, nearly four times the monthly average for the first eight months of the year. Merchants see even higher purchases in the months ahead as demand for safe assets continues. As the yen weakens the flight to quality will pick up speed. Japanese savings protection by the government, like our FDIC, goes from full coverage to a maximum of $82,638 starting in April. We see a deluge of funds going into gold. What sane Japanese wouldn't swtch funds over that limit to gold (plus silver and platinum?) with most of the banks already insolvent? Average household savings is $115,700."

$$$$$288$$$$$

http://www.aei.org/eo/eo13507.htmJohn H. Makin - Economic Outlook

Snippet:

"We are fast rediscovering an uncomfortable truth buried between the lines in the 384 pages of Keynes's General Theory: Central banks cannot end recessions that they did not cause. After 450 basis points of rate cuts by the Federal Reserve so far this year, the Fed's press release after the November 6 Open Market Committee meeting sounded almost apocalyptic: "Heightened uncertainty and concerns about a deterioration in business conditions both here and abroad are damping economic activity. For the foreseeable future . . . the risks are weighted mainly toward conditions that may generate economic weakness. . . . "

Gandalf, good wizard, please place my guess in the small opening between THX and Neubie. Thanks guys for making a little room for me.
Rich

$$$$277.75$$$$

Gandalf, MK didn't specify that the choices had to be in 50 cent increments.

*****$289.00*****
Anchored with gold in the harbor as the seas continue their restless stirrings. Patience, steady mates.
Wky

http://www.nytimes.com/2001/12/02/business/yourmoney/02FIVE.html?searchpv=past7daysMucho speculation about how far reaching Enron type explosions are, how much more can we expect, and what to look for. Mr. Turner, former big mahoff accountant at the SEC, is very candid in stating "we will undoubtedly see more" , "this is an iceberg, and the Titanic just hit it".
*******************

"Q. Are there other accounting time bombs, warning signs?

A. Given the way audits have been conducted, more by inquiry than by real investigation in the last few years, we will undoubtedly see more. This is an iceberg, and the Titanic just hit it. A study by Andersen last year showed that there were 230 restatements, the majority in the technology industry, but manufacturing was in there as well. That would be something to look for. But I think more than that, I'd encourage investors to look for C.E.O.'s or C.F.O.'s who are aggressive in their financial reporting and accounting practices, and that's where the time bombs are likely to be..."
***********

BTW- NY Times seems to be digging in on this story as far as deregulation, culpable parties, etc.

http://minerals.usgs.gov/minerals/pubs/commodity/gold/There is an interesting reference in the January 2001 report that shows US gold in the Treasury. If you look at the report it shows 8140 tons in 1997, 8130 tons in 1998, 8170 tons in 1999, and then suddenly it is back down to 8140 tons in 2000. The note (4) in the line references total Treasury stock includes gold in Exchange Stabilization Fund.

I wonder where this writer got his information since the Treasury denies that the Stabilization Fund has gold.

For those that are interested in Silver go back to the main menu and check out the silver report.

-Beowulf

Does anyone have a handle on what happened to peoples trading accounts? Were they frozen? Obviously another huge blinking 'lightbulb over head' as to why you want your assets outside your 'legal' domicile. That means gold as well. BTW almost everyone in Brazil is 'on the payroll' too, just like Canada. Tick tock tick tock......

$$$$$289.00$$$$$

Can anyone confirm if our comrades at the FAA have unequivocally ruled this an "accident"? Sure has been quiet.

SILVER OPINIONS(compiled by James Cook)
More people are expressing favorable opinions about silver. Editor Brien Lundin asks, "What's the only investment Warren Buffet, George Soros and Bill Gates agree on?" The answer is silver, a commodity Lundin claims is both undervalued and indispensable. "This is why all three of these gentlemen, along with untold thousands of far-sighted investors, have positioned themselves to earn huge profits during a silver-price break-out."

Editor Robert Chapman writes, "The first rule of investing is to buy low and sell high, but very few people actually practice this rule. The world has very little silver and Warren Buffet owns a quarter of it. Silver went to $50 twenty years ago when there was plenty of silver available�.. If you doubt silver can go up ten or eleven times in price just look at the fact it already did that when silver was readily available. Also, look at the fact that palladium recently went up ten times in price in only four years�.. We feel this could be a once in a lifetime opportunity none of us will ever see again. We missed out on this twenty years ago and we are not missing out again."

Newsletter author James Puplava warns, "A day is coming when the price of silver will rise. The demand/supply deficit points to silver's scarcity. I believe that when that day arrives, we will see what happened in Japan when the price of palladium rose. The Japanese Commodity Exchange (TOCOM) changed the rules to stop buyers from taking delivery by requiring cash buyers to post 2-3 times the amount of the actual cash purchase price of palladium. The CFTC has similar rules known as congestion whereby they could alter the rules to prevent or slowdown delivery�.. Given the situation that now exists on the COMEX, I recommend taking possession and delivery of all silver purchases. If you are buying large quantities, I would find a safe and reputable place to store it. Leaving it at the COMEX, given today's enormous commercial short position, is not prudent."

Editor Lawrence Roulston writes, "The underlying fundamentals of the silver market are more bullish than perhaps any other commodity. Virtually every investor or analyst who has examined the silver market agrees that the silver price must rise�.. a big move in the silver price is not only inevitable, but the time for that move is fast approaching�.. The situation in the silver market simply can not continue much longer. For 12 consecutive years, industrial demand for silver has outstripped supplies. The result has been massive draw downs of inventories, which are now described by the leading experts as fast approaching �critical levels��.. Some of the most successful investors in the world have already acted to position themselves for the inevitable rally in the silver price. The time to act is now, because the silver price can move very quickly, leaving investors in the dust�.."
Silver expert David Morgan says, "The silver market is ready to make a historic move. Once the move begins, those that waited will look for the pullback, it will not happen until silver is significantly above today's level." Since everybody has an opinion, I'll add mine. In silver you have an ageless precious metal with an intrinsic value now selling at historic lows. This tangible asset stands outside the paper monetary system. There's nothing else like it. It has universal demand by industry and by people around the world who value it because it's scarce and precious. It has the edge on gold because of its shrinking world supply, although a boost in the gold price would help silver. It can be highly volatile, and in the past its dramatic price gains have staggered the imagination. We think that, because of the dire state of the world economy, it's the best thing you can own right now. Of course, that's only our opinion and yes, we're trying to sell it to you, but what's the potential for loss at these levels compared to the potential for gain? Furthermore, the U.S. is eyeball to eyeball with a financial catastrophe that could send hordes of people into precious metals. You've heard that old clich� about a "ground floor opportunity." This may be the best one you will see for a long time to come. . . ."

Is there a link for that silver piece? It just so happens I have a friend recently intrigued with silver and have been looking for various links to supply him with. Anything else appreciated also. Thanks.

THE SILVER IMPERATIVE
Most silver experts, including Ted Butler, advocate silver because of the growing discrepancy between supply and demand. But I think it's important to own it primarily because of an approaching economic crisis. There is not a single piece of positive economic news that would lead any rational observer to conclude that an economic upturn is coming next year. Highly touted housing starts have flattened out and stopped growing. An upturn needs growth, not the kind of severe declines in profits and capital investment that are plunging our economy towards a worse than Japan-type scenario.

We all know that the policy prescription for this crunch is to push out more money through interest rate cuts, added bank reserves, tax cuts, mortgage refinancings, tax rebates and added government spending. Unfortunately, it's not working. Too much prior damage from booming credit growth, speculative excess and overconsumption have left a sick economy. Problems for corporations won't go away quickly, no matter what. They face rising bankruptcies, mounting write-offs, credit restrictions, and sinking profits that lead to massive layoffs. We've mentioned their intractable problems before; a too high dollar, a ferocious trade balance, downsizing and restructuring, weak balance sheets, lack of pricing power, untrustworthy financial data, rising depreciation charges and too much debt. Add to this litany of worries a mountain of super-leveraged financial derivatives (doubling since the NASDAQ decline), the return of government deficits, astronomical stock values and an incredible burst of misplaced optimism that leaves most people terribly vulnerable to a crash. Others agree. Doug Casey writes, "I don't believe we're looking at just another cyclical downturn this time. We could be � but I don't think so. The meltdown of the bubble economy; the dissipation of perhaps trillions in the busted tech boom; the negative wealth effect from the collapse of stocks; now real estate, and next the dollar; the huge buildup of capacity which will go idle; the historic debt burden; and now a war that could go on for many years add up to a truly deadly combination."

Richard Russell tells us, "The bull market of 1982 to 1999 saw the greatest amount and level of excesses in financial and economic history. The bear market that follows will not be a little two-year affair. Somewhere along the line the bear market correction is going to get serious. And I mean REALLY serious. Bear markets are not markets in which we are meant to make money. Bear markets are markets in which we are supposed to survive." Steve Puetz warns, "Excessive valuations, excessive leverage, and underlying economic weakness cannot be ignored forever�.. A bear market never ends until all forms of leverage are liquidated to a certain degree. And the liquidation hasn't even started in derivatives. There's a lot of air holding up blue-chip stocks. It'll be a long way down before this bear market is over." Bob Prechter's newsletter writes, "�.. a depression and not a recession is underway�.." Bill Buckler says, "A general and global recession is now sweeping across the world." Mr. X warns, "Don't be caught off guard by the greatest crash and depression in history." Doug Noland states, "Credit excesses of such magnitude are increasingly destabilizing for both the economy and the financial system."

Dr. Kurt Richebacher tells us, "The U.S. economy is crumbling fast. The immediate key causes are plunging profits and capital spending. But the root cause has been conclusively identified: grossly inflated consumer spending, as reflected in the collapse of personal saving and the explosion of the trade deficit. What we saw in the past few years was not a new paradigm U.S. economy bursting of health, but a bubble economy that has been bursting of unprecedented credit and debt excesses. Ever looser money and credit, and overconfidence, are maintaining the illusion of stability of an economy and a financial system that are in reality vulnerable as never before. "Our focus remains strictly on corporate profits and capital spending as the most important influences determining the economy's growth trend. They portend further drastic deterioration. The U.S. economy is precariously held upright by two bubbles that have yet to burst: the housing bubble and the dollar bubble. At the same time, a myriad of excesses in the financial system threaten to trigger a systemic crisis. It is really a barrage of bubbles waiting for the shock to confidence that will burst them altogether. That shock to confidence is due when disappointing data unravels the high-riding hopes for the coming U.S. economic recovery. For good reasons, the desire to see and to predict that recovery is pathological."

If these economic experts are correct then it's imperative you take measures to protect yourself. In our mind silver offers the most protection, the greatest upside and the least risk. If you do not have at least 10% of what you own in silver (or gold) you could be wiped out in the days ahead. Nobody knows the future, but believing the endless hype from Wall Street can prove deadly to your financial health."

Call CPM/USAGold for your gold & silver needs, today!

Sir Uponroof, the site for that article also sells Ag/Au so I didn't post the link here per forum guidelines. Cheers Netking

http://www.latimes.com/business/la-000096336dec04.story?coll=la%2Dheadlines%2Dbusiness
Snippit:

Enron Corp. warned electricity customers Monday that it might be unable to serve them all because of the financial problems that led the Houston energy giant to file for the largest bankruptcy in U.S. history. Such a pullout could cause short-term disruptions in California if done with little notice, especially on a cold day with many power plant outages and extra demand from holiday light displays, energy officials warned.

But the state's relatively new power-buying operation would be up to the task of lining up any extra electricity that might be needed for Enron's customers, officials said. They just want as much notification as possible to avoid the frightening shortfalls of last winter and spring, when power buyers frantically scoured the West by phone to scare up any available megawatt to prevent rolling blackouts. Gov. Gray Davis said he doubts Enron's bankruptcy filing will have an immediate effect on California, although he predicted it could result in rising wholesale electricity prices in coming days.


Black Blade: Energy Crisis Part II? The last Energy Crisis triggered this current recession by hitting the consumer and corporate bottom line. As every postwar recession has been preceded by an Energy Crisis.

www.silver-investor.com

Check this link uponroof-it provides financial commentary on PM, with an emphais on silver.
Cheers,
Waverider

http://www.washingtonpost.com/wp-dyn/articles/A52503-2001Dec3.html
Snippit:

As layoffs spread across the country, the portion of U.S. homeowners falling into foreclosure reached its highest recorded level in the third quarter, and the percentage slipping behind in their mortgage payments was the highest in 10 years, the Mortgage Bankers Association said yesterday.

Lenders began foreclosure proceedings against 0.38 percent of homeowners in the third quarter, the highest level since they began tracking the figure in 1972, although not much higher than it was during several quarters in the mid-1990s, the bankers Association said. Meanwhile 4.87 percent of homeowners had fallen at least 30 days behind in their payment. Mortgage experts predicted the numbers will get worse before they get better if unemployment, the key factor affecting the rate of foreclosures and delinquencies, continues to rise, as economists expect it will.


Black Blade: Get out of debt, get Gold and Silver portfolio insurance, get enough cash on hand for several months expenses, get food stores and basic necessities. This recession is hurting many who simply did not take personal responsibility and prepare for unexpected events like unemployment, family crisis, losses on investments, natural disaster, economic upheaval, etc. At every turn the Pimps, Pied Pipers and Trolls of Wall Street sing their siren songs that the recession will end this quarter, no next quarter, well maybe the second quarter next year, well�.maybe �.. You get the picture, in the meantime many will lose their homes, financial well being, etc.

http://cbs.marketwatch.com/news/story.asp?guid=%7BB3DC2603%2D5AAA%2D4AE2%2D80DF%2D6A4B1C588C39%7D&siteid=mktw
Snippit:

Richard Russell, who has been writing Dow Theory Letters since 1958, touches on the subject. "I continue to receive questions as to whether there's manipulation going on in the stock market. I've resisted this idea a long time, but slowly and surely I've come to the conclusion that yes, the Fed does step in at various times and manipulate the market," he says. Russell, who has been following markets for more than 50 years, has one of the most highly respected investment newsletters in this country. Based in La Jolla, Calif., Russell has been looking at the stock market's behavior this autumn and wondering just what keeps prices so robust. "How do they do it?" he asks in his newsletter, which is available only by subscription for $250 a year. "My guess is that the Fed does it through one or more large brokerage houses, and it's done with S&P futures. Too many times I've seen the market turn at critical junctures, and I believe it's beyond coincidence."

Black Blade: Thom Calandra and Richard Russell don't exactly finger the President's Working Group on Financial Markets (aka Plunge Protection Team). Although John Crudele at the NY Post has tackled this touchy subject in the mainstream press. Interesting article though. I have noticed that Richard Russell has recently been making several statements in regard to this recession as being a severe deepening recession. "Interesting Times"

http://www.buenosairesherald.com/Thanks for the help. I'm hot on the trail now. Looking for the basic hype stuff for now. The info on what this silver market is capable of given the shortages and possibly incredible demand dynamics if(when) it gets hot. Netking's first segment (Silver Opinions) typifies this. A perfect teaser. I challenge all here to send that segment to any of your paper friends. If they do not show interest they do not have a pulse. Thanks again.
********

magatron-went reading the Buenos Aires newspapers and got an eyefull regarding whats frozen and what's not. Try this link above for the full story. Here's an excerpt from the editorial:

"...What is perhaps as distressing as the situation of the most vulnerable and of the least paid members of society is that, once again, privilege in a measure and the fashion of an eighteenth century court is alive and well incorporated in all decisions in Argentina: high-ranking officials in the government structure and others with access to power have been excluded from submitting to what might be called the two-fifty rule for withdrawal of funds. Which means that the government does not set an example even at this late hour in its unrelenting failure, rather, it simply perpetuates the endemic corruption that is part of our society. This means that those who seek to break the new rules, commit fraud, by-pass banking regulations, clandestinely remit funds abroad, or otherwise choose to evade the most recent salvation package will not be lawbreakers but mere emulators of our seniors and betters. However, another two billion lost in the nation's reserves would have put the entire financial viability of the banking network on the brink of disaster..."
*********

The South American culture is not helping the situation at all. But then we Americans have our own cultural vices which are surfacing now via Enron.

How do we know without an associated gram weight for each piece?

http://www.quicken.com/investments/charts/?period=1WEEK&charttype=HIST&big=off&plot=LINE&othersym=&mavg=&dji=&sp500=&nasdaq=&symbol=GETurns out the EPA wants them to dredge the Hudson River to remove PCBs (CNBC). This is going to cost some bucks and looks like somebody had some advance knowledge of the ruling. At the time GE had a permit to dump. The PCBs are now buried in the river sediment digging will only stir them up. Most have already leached into the Ocean anyway. Too late. This is similar to the EPA mandating several Wisconsin rivers to be dredged after the majority of PCB residues have already leached into Lake Michigan and the remainder are safely buried under the sediment. Maybe a hurricane will come along and stir up those Wisconsin River bed sediments.

If you want to own something where you are the insider....own gold and a little silver too.

UPDATE ------GC1Z Price Guessing Contest
Progress Report as of 12/4/01 19:00MT
------
USAGOLD (11/29/01; 19:37:04MT - usagold.com msg#: 66079)
HEAR YE! HEAR YE!! A POSTING CONTEST CALLING UPON YOUR MOST POWERFUL, WELL-HONED & ERUDITE SKILLS!! AND THIS IS GOING TO BE A GOOD ONE. .
In addition to the posting contest, we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex -- the December contract. Each entry must be surrounded by $$$$$$ dollar signs as follows $$$$$30,000$$$$$. The winner -- he or she who comes closest to that closing price -- will receive a one tenth ounce Austrian Philharmonic.
----
USAGOLD (11/29/01; 19:41:44MT - usagold.com msg#: 66080)
Contest!!
I neglected to put a close date on the price guessing contest. All entries must be posted by 5pm MST Tuesday, December 4th.
----
USAGOLD (11/29/01; 21:07:22MT - usagold.com msg#: 66096)
All. . .Contest!!
I have the good news that my far-seeing and wizardrous friend, Gandalf the White (who I predict will be starring in a movie real soon) will be monitoring the price guessing contest. Let's make the guesses in 50� increments.
====
The Wiz says --Thank you all for your prognostications!!
The clock has struck 17:00 MST on Tuesday the 4th of December, 2001 and the CONTEST is now closed.

Twas the "Wky_Woodsman" that just got in under the gun for the final official guess. I have posted above, the instructions and rules that MK setforth for all to follow. There was only one guess posted before the "50 cent increment" rule was made, and that one was luckly MINE,
and met the 50 cent rule.)

Below are listed the "CONTEST ENTRIES". Some that MAY be considered to be "Non-conforming" entries are listed AFTER the "conforming" list. The Wiz is only the scribe and not the JUDGE ! Judging shall be done by the Owner of the Castle. Best of luck to all and we all await the Settlement of GC1Z on Friday.
<;-)
=====
$$$$3,257.50$$$$ The Invisible Hand (12/3/01; 20:30:25MT
$$$$$390.00$$$$$ Chicken man (12/1/01; 19:16:27MT
$$$$$350.00$$$$$ sourdough (12/1/01; 09:28:15MT
$$$$$331.00$$$$$ LimitUp (12/2/01; 21:33:35MT
$$$$$320.00$$$$$ Scarab (12/1/01; 15:30:22MT
$$$$$302.50$$$$$ Gene (12/2/01; 18:22:33MT
$$$$$300.50***** Goldfinger 2 (12/3/01; 08:12:43MT
$$$$$300.00$$$$$ Max Rabbitz (11/30/01; 20:07:20MT
$$$$$297.50$$$$$ Netking (12/2/01; 01:53:34MT
$$$$$296.50$$$$$ tedw (11/30/01; 19:50:42MT
$$$$$296.00$$$$$ THX-1138 (12/1/01; 00:31:32MT
$$$$$295.00$$$$$ R Powell (12/4/01; 14:22:03MT
$$$$$294.00$$$$$ Neubie (12/3/01; 14:22:02MT
$$$$$292.50$$$$$ darkhorse (11/30/01; 18:48:35MT
$$$$$291.00$$$$$ coco (12/3/01; 23:43:10MT
$$$$$290.00$$$$$ ji (12/2/01; 16:36:24MT
$$$$$289.50$$$$$ goldquest (11/30/01; 23:12:21MT
$$$$$289.00$$$$$ Wky_Woodsman (12/4/01; 14:51:44MT
$$$$$288.50$$$$$ slingshot (12/1/01; 13:02:04MT
$$$$$288.00$$$$$ Goldenmean (12/04/01; 13:28:00MT
$$$$$287.00$$$$$ Novice Bear (12/4/01; 10:02:05MT
$$$$$286.50$$$$$ ROSEBUD99 (12/2/01; 21:21:03MT
$$$$$286.00$$$$$ balzac (12/3/01; 14:43:03MT
$$$$$285.50$$$$$ Achilles (12/04/01; 04:28:10MT
$$$$$285.00$$$$$ Quixote (12/2/01; 15:04:57MT
$$$$$284.50$$$$$ Rx Gold (12/3/01; 22:20:41MT
$$$$$284.00$$$$$ redloc (12/3/01; 21:20:33MT
$$$$$283.50$$$$$ Lamprey (12/03/01; 09:52:17MT
$$$$$283.00$$$$$ goldroadlx7 (12/03/01; 15:27:45MT
$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$$282.00$$$$$ Maiden Fan (12/2/01; 11:13:21MT
$$$$$281.50$$$$$ Buena Fe (12/1/01; 20:51:51MT
$$$$$281.00$$$$$ VanRip (11/30/01; 21:05:14MT
$$$$$280.50$$$$$ Solomon Weaver (11/30/01; 23:03:28MT
$$$$$280.00$$$$$ Yellow Jacket (12/2/01; 10:51:56MT
$$$$$279.50$$$$$ The CoinGuy (11/29/01; 21:48:53MT
$$$$$279.00$$$$$ Shermag (12/1/01; 13:30:47MT
$$$$$278.50$$$$$ Broken Tee (11/30/01; 10:52:21MT
$$$$$278.00$$$$$ Artie Farkle (12/1/01; 11:04:03MT
$$$$$278.00$$$$$ RobotGuy (12/1/01; 13:31:55MT
$$$$$277.50$$$$$ Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$ Waverider (11/30/01; 01:23:24MT
$$$$$276.50$$$$$ goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$275.50$$$$$ Ducat (12/01/01; 07:48:39MT
$$$$$275.00$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$ Black Blade (11/29/01; 21:54:25MT
$$$$$274.00$$$$$ mikal (11/30/01; 22:54:23MT
$$$$$273.50$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$273.00$$$$$ Canuck (12/01/01; 09:00:56MT
$$$$$272.50$$$$$ Mythical (11/30/01; 18:08:12MT
$$$$$272.00$$$$$ Henri (11/30/01; 11:44:46MT
$$$$$271.50$$$$$ Argent (12/1/01; 10:16:21MT
$$$$$271.00$$$$$ Goldfly (12/2/01; 12:07:06MT
$$$$$270.50$$$$$ HOOSIER GOLDBUG (12/2/01; 17:14:24MT
$$$$$270.00$$$$$ Flatlander (12/1/01; 18:32:56MT
$$$$$269.50$$$$$ Frosty (12/2/01; 17:28:43MT
$$$$$269.00$$$$$ megatron (12/2/01; 14:50:46MT
$$$$$268.50$$$$$ HopeingII (12/1/01; 22:37:42MT
$$$$$268.00$$$$$ BR549 (12/2/01; 18:13:47MT
$$$$$266.50$$$$$ auric (12/3/01; 20:58:09MT
$$$$$263.80$$$$$ WW Oracle (12/2/01; 20:19:51MT
$$$$$261.00$$$$$ TEX (12/4/01; 00:34:52MT
============
$$$$$287.75$$$$$ Hydro (11/30/01; 20:53:23MT
---
$$$277.75$$$$Canuck Gold (12/4/01; 14:45:34MT
- usagold.com msg#: 66394) COMEX close on Friday
Gandalf, MK didn't specify that the choices
had to be in 50 cent increments.
---
$$$$$276.60$$$$$ wiley (11/29/01; 22:47:01MT
---
$$$$271.75$$$$Humble Pie (12/4/01; 11:29:15MT
- usagold.com msg#: 66384) GOLD GUESSING CONTEST
==================================================

www.butlerresearch.com/archive_free.htmlSir Uponroof, this free public archive from Mr Butler of 25 or so silver articles will also prove very useful to anybody wanting to learn more about PM's. Cheers Netking

http://www.quicken.com/investments/charts/?period=1WEEK&charttype=HIST&big=off&plot=LINE&othersym=&mavg=&dji=&sp500=&nasdaq=&symbol=GEToday the EPA announced that GE would have to dredge the Hudson River to remove PCB contamination from earlier dumping even though they had a permit at the time (CNBC). This will cost much. I suspect that the Hudson River is similar to several Eastern Wisconsin Rivers (Sheboygan & Fox) where the EPA has now mandated dredging to remove PCBs even though 2/3rds or the PCBs have already leached into Lake Michigan and the remainder are buried under the sediment. Dredging will only stir up the residue and further contaminate Lake Michigan and the fish.

I think insiders knew last Friday that this ruling would come down. Does anyone monitor the stock holdings (and shortings) of the EPA Administrators?

If you want to be an insider buy a some physical gold and silver, and sleep well at night.

To answer my own question. Yes. There are lots of disclosure forms the government requires. More than you want to fill out. However, we are only human. We gain friends and status if we can provide something of value to those who are close. In my experience the attempt of Government to avoid corruption is a hopeless cause. Yet what is the alternative? Mostly gold in my opinion.

http://groups.yahoo.com/group/gata/message/933AngloGold's Bobby Godsell wants to reduce
hedging at his own company and at Normandy:

http://groups.yahoo.com/group/gata/message/933


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

http://sg.biz.yahoo.com/011204/16/212fv.html
Snippit:

PERTH, Dec 4 Asia Pulse - Australian gold producers continued to cut down on hedging activities last quarter, according to JPMorgan's September Quarter hedging review. The review showed hedging in the three month period totalled 36.5 million ounces at $A591 ($US307.44) per ounce, down 1.4 million ounces or 3.7 per cent on the June quarter figure of 37.9 million ounces at A$627 per ounce.

Thirteen companies reduced their ounces hedged by a combined total of 1.8 million ounces while five companies added 500,000 ounces. Lihir increased its book by 133,000 ounces and Normandy NFM and Hill 50 by about 90,000 ounces. The largest decrease for the quarter was Normandy Mining which was down 182,000 ounces to 9.59 million ounces; Newcrest 153,000 ounces to 6.57 million ounces and Sons of Gwalia 75,000 ounces to 3.35 million ounces. According to the review, hedging now covers 43 per cent of Australian gold reserves, down from 46 per cent in the June quarter.


Black Blade: Newmont has threatened to unwind Normandy hedges if their bid is successful. An effective withdrawal of 9.59 million ounces from the paper gold supply. A good reason for AU and ABX to step in and make sure that does not happen. A rising POG will devastate the hedge fund miners.

Interesting to see this long time hedger squirm his way through the poor reputation he has built at the cost of honest investors and producers.

Thoughtful in that he is definitely using all grey matter available to win an unwinable PR war.


*Deep Breath*.....count to ten.....

Timing here is no 'COINCIDENCE'. This is for the benefit of those critical to the NDY deal. Period.

If Mr Godsell wants 'CREDIBILITY' the markets open shortly. BUY A FEW TONNES OF GOLD. Until his actions continue in reducing hedged gold to the point of a clear, irreversible, long term change in philosophy I will remain suspicious.

This little change of heart borders on sickening and I must stop typing before I say something very offensive.
*************

Anxious to read what others persuing NDY, who have a long established DEMONSTRATED policy against hedging, have to say about this conversion.

http://sg.biz.yahoo.com/011203/15/20mq5.html
Snippit:

[Dow Jones] Normandy (NDY) advises shareholders to "do nothing" on AngloGold (AGG) offer until board makes formal recommendation. Normandy board believes it's "premature" to make recommendation, which could be interpreted as Normandy hanging back on expectation of higher Newmont offer. Would expect Newmont to make counter offer in next few weeks as Normandy anticipates responding to AngloGold's offer by Dec. 13. NDY up 1.3% at A$1.62, above A$1.60 inferred AGG offer price.

Black Blade: A higher Newmont bid is expected. I notice that the shills at miningweb.com are afraid to address several issues such as the walk-away fee that AU will have to give to NEM if the Newmont-Franco-Normandy deal fails due to a successful AU bid. They also seem ignore the effects of a rising NEM and Franco-Nevada share price on the resulting Normandy bid. It is clear where miningweb.com sentiments lie. Now Hedge Fund ABX steps into the picture. It would appear that the titans of the hedged and unhedged Gold miners have made Normandy their battle ground for dominance.


RE: uponroof - Personally I see no conversion - only a PR campaign by AU to draw in the unsuspecting "marks." After 14 years of forward sales I do not expect a suddenly "enlightened" Bobby Godsell to see the error of his ways.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APA2b_ha.SmFwYW5l
......``This could destabilize the entire financial system,'' said Toru Komatsu, an independent fund manager who advises individual investors at Komatsu Portfolio Advisors Co. ``It's unbelievable that some fund managers had more than 5 percent of their portfolios in Enron bonds.'' ...........

12/04 23:00
Japanese Regulators Will Tighten Fund Rules After Enron Losses
By Takahiko Hyuga

Tokyo, Dec. 5 (Bloomberg) -- Japanese regulators will tighten rules this month for asset managers after Enron Corp.'s bankruptcy prompted investors to withdraw more than 2 trillion yen ($16 billion) from funds that owned the company's bonds.

The Investment Trusts Association, a self-regulatory group, will form a committee as early as Friday to consider rules to require funds to invest in debt rated investment grade or above, said Naoyuki Ichikura, an official at the association.

Merrill Lynch Investment Managers Japan Ltd., AIG Global Investment Corp., Nomura Holdings Inc., Daiwa Securities Group Inc. and nine other asset management firms are likely to join the committee, he said.

The redemptions, more than the 66 billion yen of Enron bonds held by Japanese funds, reflect concern money managers are investing in debt that is too risky. That may reverse the flow of $11 trillion in savings into mutual funds, making it harder for companies to finance their business.

``This could destabilize the entire financial system,'' said Toru Komatsu, an independent fund manager who advises individual investors at Komatsu Portfolio Advisors Co. ``It's unbelievable that some fund managers had more than 5 percent of their portfolios in Enron bonds.''

Daiwa Asset Management Co., Nikko Asset Management Co., UFJ Partners Asset Management Co., Japan Investment Trust Management Co. and Sumisei Global Investment Trust Management Co. reported losses on funds caused by their Enron exposure. Some money market funds, which guarantee to preserve capital for investors, fell into the red.

Junk Bonds

Enron's credit rating was cut to junk status Nov. 28 by the three leading rating companies. A junk rating means a company's bonds are considered below investment grade because they have a higher risk of default.

Japan's Financial Services Agency asked the fund association to tighten rules on operations and sales for money management funds to avoid a repeat of the cancellations that occurred since Enron collapsed, the Nihon Keizai newspaper reported earlier today. Regulators also want to limit investments in short-term debt.

The new committee may also discuss whether asset management companies should report the performance of their funds more regularly than twice a year, Ichikura said.

http://money.cnn.com/2001/12/04/news/sec_numbers/
Earnings data on "pro forma" basis should be viewed skeptically.

Snippit:

NEW YORK (CNN/Money) - The nation's top securities regulator warned Tuesday that companies could be sued if they mislead investors by issuing confusing so-called "pro forma" financial results, weighing in on an issue of increasing concern to analysts and investors. The Securities and Exchange Commission also warned investors to view such reports with "appropriate and healthy skepticism."

Companies discussing their quarterly profits usually report earnings from continuing operations, based on Generally Accepted Accounting Principles. Increasingly, however, companies have reported "pro forma" results, which have no standards and pick out certain aspects of a company's business and highlight others, usually to the company's benefit.


Black Blade: DITTO! "Pro Forma" is a scam that is commonly used to confuse the investor and infer a much better outlook for a company than is usually the case. Some companies such as Cisco and Amazon.com are known for their rosy earnings forecasts (on a Pro Forma basis) when in reality they are bleeding cash and losing money at a furious pace. If these scams are made illegal then perhaps the investor will likely get a case of "Sticker Shock" when considering share purchases.

Half of my gold stocks have been merged into Barrack,and half have been merged into Newmont.I never bought a single share of either and now I own both.
I am left with Newmont that has a higher stock price little or no hedges but more debt and Barrack that has less debt lots of hedges but more cash.
It appears I have a hedge .Maybe its that Yin and Yang thing !Anyway, its not earnings that makes a stock go up,its more buyers than sellers.When the time comes for the big buyers to buy in,the only place that can provide liquidity will be Newmont and Barrack and they both will go up.

From the Oct./Nov. issue of "The Bull & Bear Financial Report". (The following statistics are a little outdated in light of the apparant bear market rally that we are presently experiencing.)


"Ninety-nine percent of (mutual) funds declined in the quarter, he worse period since the fourth quarter of the 1987 market crash year. .... The top-performing sock mutual funds for the first nine months of 2001 are:

Rydex Venture 100, $66 million in assets, up 94%

ProFunds UltraShort, $54 million in assets, up 92%

Rydex Arktor Investor, $64 million, up 62%

Pro Funds UltraBear, $55 million, up 52%

Potomac OTC/Short, $3.3 million, up 51%

Lethold Grizzly Short, $6 million, up 50%

Rydex Tempest 500, $83 million, up 50%

End of snip......

If you add up the figures in the above report, a rather interesting bit of information comes to light. THERE WAS ONLY A TOTAL OF $331.3 MILLION INVESTED IN ALL OF THESE WINNERS PUT TOGETHER!! I am quite sure that this total represents far less than one tenth of one percent of all funds entrusted to mutual fund managers in America!! What a remarkably tiny, tiny percentage of people that had the courage to "swim against the stream". Furthermore, you can bet that at least 25% of the above "short" money was placed as hedge protection to off-set various "long" stock positions. Thus the % of successful investors was even smaller that these numbers indicate.

So what is the moral of the story??

You can be in the extreme minority and yet be the only one that is right about the future movement of a given market. This would seem the be the case in the area of silver and gold at this juncture. Presently, the % of mutual fund money invested in silver and gold stocks is a very tiny figure. And yet, these funds are up roughly 30% on average over the past 365 days. The silver-investor web site recently said that the percentage of silver bulls was around 17%. I am not aware of any market anywhere that has ever approached these levels. Extreme pessimism in the face of unbelievably positive fundamentals equals opportunity.

One last note. I learned/observed this at the top of the stock market: There were several vocal bears at the top. However their votes don't count as virtually NO ONE was heeding or otherwise ACTING on the advice.

Years ago (1968) I was in the Garment business in N.Y.I was a contractor (and a creditor) for my Dad and his partner.They had 1 million in inventory and not 1 cent of it was their money.In 1968 the Department stores all started taking 60-90 days to pay thier bills instead of the usuall 30.This meant Dad and his partner needed 1 to 2 hundred thousand more cash per month to meet cash flow needs,payroll etc. They were technichly bankrupt
(no cash)but good accounts receivable.There was a creditors meeting set up.Before the meeting Dads partner asked me "How much do you think I owe the three piece goods manufacturers ?(N.Carolina cloth makers).I replied about $300,000 dollars.He said "You know what! they'r going to give me more credit before I come out of the meeting."Fat chance"! I thought.
To make a long story short ,he got the additional credit.
They had no choice but to keep him in business if they wanted any chance of getting thier money back.In one years time everybody got paid,every month had to be kept current plus 10 per cent of back bills paid.The accounts receivable went directly into the creditors bank account first when each check was received.The bottom line was they got paid ,but subsequent years when credit was needed everybody tightened up and no credit was available.They had bad memorys of near disasters and without credit the business was finished.Even though everybody got paid.
Enrons temporary cash infusion will only stall off the bankruptsy .You notice the lenders are the same people they already owe to! Been there done that!View Yesterday's Discussion.

All eyes should be on the middle east. Isreal has said it is going to take stepped up action against the P.A., and it already has.Whatever Muslim/arab support for the war on terrorism is about to evaporate in my humble opinion. The battle lines are being drawn.

The Saudi ruling elite will distance itself from the US as the US tacitly supports the Isreali actions. If an attack on Iraq follows soon in connection with these other activites, we can expect to see,at least, action by OPEC to cut off oil.

The coalition thing just cannot work. As long as Iran,Syria,the PA, et all., see the suicide bombers as freedom fighters in their demented minds, there is no possibility of peace.

Quote of the day: "You cant make peace with a snake"- author unknown

http://www.texnews.com/1998/biz/credit0301.htmlI believe the linked article "Is credit a plastic house of cards?" remains relevant despite having been written in 1998.

http://news.bbc.co.uk/hi/english/business/newsid_1693000/1693156.stmSnippets from the BBC's website:

Russia has agreed to cut its oil output by 150,000 barrels per day from next year.
Crude oil prices at London's International Petroleum Exchange surged immediately after the news.
�
Opec was expecting Russia, the world's second largest oil exporter, to cut its output by 200,000 per day.
And it is not yet clear whether the members of Opec will be satisfied with Russia's offering.


Those snippets were breaking news. The BBC World Service Radio reported in the last five minutes that since 911, Russia prefers to be seen as an energy ally of the West. Make of it what you want.

http://www.boston.com/dailyglobe2/339/business/SEC_vows_crackdown_on_reports+.shtml
SEC says pro forma results can amount to fraud

Snippit:

WASHINGTON - The Securities and Exchange Commission threatened to sue companies that mislead investors with pro forma accounting, which typically makes companies' earnings look better by excluding some costs. ''The antifraud provisions of the federal securities laws apply to a company issuing pro forma financial information,'' the SEC said on its Web site. The SEC also warned investors to view these widely used accounting reports with suspicion. Pro forma reports ''might create a confusing or misleading impression,'' the agency said.

Black Blade: I have hammered on the "Pro Forma" accounting scam before. The SEC has finally seen the light. Maybe we will see less of this nonsense.

http://biz.yahoo.com/rb/011205/business_markets_oil_dc_3.html
Snippit:

LONDON (Reuters) - Oil prices jumped sharply on Wednesday after Russia decided to slash exports from next month, lifting market hopes for a global supply cut. Russia's decision to cut five percent of its exports was welcomed by heavyweight Saudi Arabia, which has led OPEC demands for Russia to join its efforts to curb excess supplies.

Russian Prime Minister Mikhail Kasyanov met local oil companies on Wednesday morning and a government spokesman said the firms ``consider it possible to carry out a deeper reduction in the export of oil, which will reach 150,000 barrels a day from January 1, 2002.''


Black Blade: OPEC had hoped that Russia would cut production 200,000 bbl/day. Norway agreed to cut 200,000 bbl/day and Mexico had agreed to cut 100,000 bbl/day. Still, this could push petroleum prices higher and slam the Global Economy a bit more. This will likely draw down US oil inventories though. The Gold mining industry should take note.

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B242256B190045B46A?OpenDocumentInteresting day in South Africa.

Noon JSE (Johannesburg Stock Exchange):
HAR (Harmony) up 11.3%
ANG (Anglosoldout) up 6.5%
GFI (Goldfields) up 7.8%
DUR (Durban Roodeport Deep) up 6%

All this with bullion down 0.27 percent at $275.85.
*************
This is a safe haven move to be sure. Going into stocks not bullion is big house panic. Just as XAU outperforming POG is bullish indicator, so is this. Producers are not missing this action and should be looking to spruce up their house by reduce hedges. On that subject, if you were looking to reduce hedges, in order to improve your balance sheet against a rising POG (ahem....and of course to 'woo' a mine and it's investors whom you were trying to buyout), where would you look to enter? How about 275+-?. What's wrong with that price? Would you be waiting for POG to lose more value into the 260's? Ridiculous. The floor at 272 is all but concrete, IMHO. Now is as good a time as any. In fact if you wait too long, you might miss your chance at truly cheap gold. Mr Godsell, we investors watch your every move and await your wisdom here.

If Godsell starts putting his money where his mouth is, we might really see some action in POG, and through that, spark stocks worldwide.

later

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3IX6P4UUC&live=trueSnippit:

The game is up in Argentina. The government is in effect defaulting and has now also imposed restrictions on withdrawals from banks and on access to dollars for transactions abroad. The question is: what happens next?

All ways forward involve default and debt restructuring, not just by the government but by the private sector as well. Organising these defaults will be very messy. The convertibility scheme is also in effect dead: it would be impossibly costly to restore the belief a peso is as good as a dollar. So the choices that matter are between dollarisation at the current rate, devaluation and then dollarisation at a lower rate, or floating the peso..."

Some Canadians suggest that a low dollar policy for Canada is good for business. If you compare Canadian average earnings to American average earnings you can appreciate that American people must spend quite a bit less for their gold. I am very jealous of that fact, however as the Canadian dollar increases in value, and the POG lowers, I get very excited. A low dollar policy may be good for business, but a high dollar is good for the investor. With all of my Canadian goldbug friends I will cheer "GO DOLLAR!!!"

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Like LTCM, we are talking notional values on derivatives that have expiration dates. The derivatives allow a very small time premium to "control" a large chunk of "underlying", usually at a rate below 2% per month, and at under 1% on quiet markets. That is why the pricing of the time premiums is so important, and why interest rate setting errors by the Fed affect these markets so strongly.

The story is one of bubbles leading to crashes leading to low interest rates leading to new bubbles etc..

Thus when the Fed did not raise rates as oil prices rose in 1997, it created a bubble going into 1998, which brought LTCM to access funds it should never have had an opportunity to obtain and enter trades that should have appeared unprofitable if interest rates charged to them were higher. In response to the LTCM debacle, the Fed lowered rates too far. The reaction by the Fed was too slow, and once it was in place it lasted too long. The result was the internet/tech bubble and the second derivative bubble. These burst and put the new internet/tech companies that should never have been funded, out of business and now drove Enron into bankruptcy. Along with them are a million mortgage delinquents that should never have gotten such large mortgages.

After all of this, the Fed should have reacted more quickly in lowering rates in 2000, and in raising them in 1999. The short term market that the Fed is trying to replace is naturally a volatile market, it is an error in itself to have a "stable" monetary policy. All the latter means is that the Fed will induce errors all the time as its steady interest rate is at one time too low and at another too high. The low rate errors produce bubbles, the high rate errors delay investment and drive fundumentally good businesses into bankruptcy. A second error is in focusing mostly on US economic conditions when the dollar is used internationally and one third to half its value and liquidity is determined by the actions of foreign borrowers and lenders.

To some extent, the Fed should have operated to offset pressures from the actions of other central banks, particularly when the Japanese were lowering rates to the ground in 93-95, the Fed should have reacted quickly to counteract the Japanese inflation, which would have prevented the 94-5 Asian bubble and its ultimate bursting in 96 and collapse in 97-8. In a global trade and capital flow environment it is wrong to key interest rates to domestic factors alone. When industry is moving its investment focus to Asia, it is not appropriate to maintain low interest rates at home, letting millions burry themselves in mortgages they were only marginally able to serve nor to allow continued marginally profitable investment in businesses that would go bust shortly after their new Asian competitors went online.


In short, the Fed should have moved more quickly. Should have reversed course as soon as possible into tightening, and should have counteracted inflationary forces from abroad.

And finally: By my measures, the global credit market bubble (and it was global and it was a bubble) had a relatively minor contribution from Fed policy. The main culprit was the BOJ, which funneled funds from its own inflation to the global credit markets. That is where near 0% rates have been rampant for half a decade. These funds, having been lent into Europe these past 4 years, found no use there because of the limitations on profitability imposed by regulation and labor culture, and displaced local savings abroad - into Asia and the US.

As should be the result, investors from Europe using Japanese funds, and the Japanese sources of these funds will suffer more than any other group including "overleveraged consumers" in the US. If the dollar were to devalue 30% against the euro and yen, there is no machinery, auto, tech, pharma, or agriculture industry within these countries that could withstand the US competition exactly because the Japanese capital, though invested more in Europe since the mid 90s, left that currency area into the US and built up an enormous capital base, particularly in R&D intelectual capital.

In Brief: Gold traded quietly for the second day despite the repercussions from the Enron collapse still rippling through the financial sector, Russia deciding to play ball on oil cuts, and Argentina wading further into its economic quagmire. According to European press reports, gold ignored all that and concentrated instead on the dollar which posted a marginal gain against the euro, but the real answer to gold's continued range bound behavior despite leakage in the financial system that should have sent the passengers to the third deck in search of the life jackets.

Analysis: The fact of the matter is that investors are buying gold and continue to do so in record numbers. So what is really going on in the gold market?

For a partial answer to that question, I would like to bring to your attention a New York Times article this morning on the high-flying New York Belfer family which happened to own a huge stake in the beleaguered Enron corporation. The article isn't particularly revealing in its coverage of Robert Belfer's plight. Outside the size of Belfer's loss -- some $2 billion -- it isn't much substantially different from the plight of a thousand others who have lost a bundle in that debacle. Toward the article's end, however, the Times points out a cause and effect relationship that anyone who regularly visits this page will immediately recognize -- a set of circumstances which does raise the interest level, (if not the blood pressure.)

". . .in 1996," the article reads, "Belco (Belfer's oil company taken public through Goldman Sachs) had started hedging its bets on oil prices, mostly through Enron. The bets worked out as long as oil and gas prices stayed low. But when prices rose, Belco was out of luck. Last year, it paid Enron $34 million under these complex hedging arrangements, and had to take a hit to its income statement of more than $100 million."

Earlier, the Times quotes one Bernard Feshbach -- an energy consultant -- as saying he was never impressed with Belco and its hedging strategy. "In a minor way," he said, "it was just like Enron. Everything got so complicated that nobody knew what was happening."

What we are learning as one infamous derivatives' debacle after another unfolds before us is that no one -- probably not even the broker/bankers who put the deals together -- know what's going in these complex arrangements. Remember the lament of Barings Bank, Orange County, Procter & Gamble, Ashanti -- and now Enron (the list could go those are just a few off the top of my head)? In each case without exception they pleaded "We didn't understand what was happening to us."


The traders responsible for these positions -- in oil, in the grains, in copper, in a dozen other commodities, and, yes, in gold -- know that if they keep the position on, and they keep feeding it with ever larger derivative positions:
A) the price doesn't move, and as long as they can keep the price from moving
B) their clients will not take losses that could be counted in the billions, And
C) the companies to whom they sold these strategies will postpone bankruptcy proceedings and ugly headlines, And
D) the traders themselves -- as well as the befuddled CFOs to whom they've sold these trading progams -- aren't going to get caught.

The problem is not they've made these bets, but their size -- which is enormous. As such, each day still on the job is a good day for the hedging strategist, but as Enron has shown us, that fateful day of reckoning on the employment scene can dawn without warning. The trader's demise is nothing if it isn't sudden and unexpected (at least as far as the outside world is concerned).
Just the slightest twist in the markets and the parts (along with the recriminations) begin to fly in every direction. Things can get ugly in a hurry, and someone will have to take the blame. Just ask any of the Enron traders pouring over the Wall Street Journal employment section this morning, and contemplating whether or not they are going to need legal representation.

In the meantime, as far as the gold market is concerned, we could be as little as one Enron away from its greatest rise in history.

* * *

So as gold owners, or potential gold owners, the scenario outlined above is the situation we must take under consideration. To say that there isn't something sinister going on in the gold market is not to have been paying attention over the years.

What I think we are beginning to understand is that this thing goes much deeper than just the gold market. It encompasses nearly every aspect of the price finding mechanism within the economy. As a client asked the other day when the light went on: "Where did this start? Were the universities teaching this or something?" It's like asking "Where did the anthrax come from?"

The question comes down to whether or not you believe that this financial system -- glued together in nearly every way with derivatives -- is going to hold together. With each passing Enron (and make no mistake, there are others out there waiting for their day in the glaring lights), the structure holding the system in place erodes a little further.

When systemic risk progresses to rollover -- and the massive infection already breeding in the financial system surpasses the ability to resist and bounce back -- you will be glad you had the foresight to buy a little gold when the derivative traders were conveniently holding it down for you. After all, as we have said all along, gold isn't an investment anyway, but an insurance policy, and the twain, it seems, will meet at about the time the system begins to unravel.

* * * * *

Those of you looking for a deeper understanding of the forces at work in the gold market will find our latest Quarterly Review a beacon in a sea of market confusion. In it, master analyst and prominent market maven, James Grant offers his views on the subject in an extensive article not to be missed titled "For Real Money." You can receive Mr. Gran'ts thinking by hard copy and private download by going to our sign-up page and requesting an Introductory Information Packet. And Mr. Grant is only a small part of our 32-page Review. We also feature some advice from Hong Kong's Dr. Marc Faber "When Things Don't Add Up," and my own "After the Twin Towers: New Realities for Gold Investors." All in all, the net effect is to re-orient your thinking to the present circumstances. Your inquiry is welcome.

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Those looking for an on-line overview of the forces at work in the gold market will find the review at our Commentary & Review section of interest. It covers the longer term view. Registration is requred go to the Info Packet link above.

I've also posted some good article summaries and links at the Commentary & Review page.

If you have an interest in pricing out gold coins or having your questions answered, you phone call is welcomed at the toll-free phone numbers at the bottom of this page.

The CAN$ and goldHello sir, to a fellow Canuck.

I am not as knowlegeable about fiscal affairs as many on this forum - which is not of course to say that this is not more than the average Canadian or (for that matter) even saying that much - but my brother stated something the other day that may cast some light on the subject. Whenever he has bought gold through the years of our fluctuating exchange rate with the USD, he has noted that while the CAN$ has fallen the POG in CAN$ terms has risen.

However, as the price of gold on COMEX has fallen over the years, what he has paid in CAN$ terms has remained relatively the same.

This is somewhat subjective on his/our part, of course, but one wonders if other gold producing countries have a similar pattern with their currencies and the POG.

I welcome comments from others out there about this too.
Randy?

Best regards, and welcome aboard.

G.

P.S. It is heading for 16 degrees C. here in Ontarioland today and it is a lot warmer on the outside now than it was a day or so ago (smile). I'll be back in the PM.

The trend continues for euroland asset management

The consolidated financial statement for the recent week reveals that the European Central Bank and the euro member central banks allowed their net position in foreign currency to decrease yet further -- down EUR 400 million during this time period to EUR 255.5 billion.

The position in gold assets remained undiminished at EUR 128.233 billion. The 12,521 tonnes of official gold this represents is currently valued at EUR 318.53 per ounce for quarterly accounting purposes in the eurosystem. This will all be revalued through mark-to-market obligations in 3-1/2 weeks.

Bottom line:
Q: What does this mean, very fundamentally, for the rank and file gold owner?
A: The managers of a very significant currency block (which rivals the dollar) have positioned themselves -- not accidentally -- to allow a never-ending run-up in the value of the metal... and to benefit thereby.

R.

Lately I seem to be able to only scan the top few posts each morning before I have to run out for the day, but I just want to put in here that it was a treat to wake up to Oro's commentary on Noland (Inflation/Deflation) a few days ago. I'm almost through Noland (printed out to read at traffic lights, etc.) and then I'll be able to go back and see how Oro's take illuminates it.

I think one strong current going on here is how surprised we all are at the strength of "The System", and Oro brings some unique insights and analysis that offers some explanation (still beyond me to confirm or contradict from my own knowledge).

Of course, we all believe in economic fundamentals, perhaps too strongly in a time when psychology (and chicanery) has trumped it. And of course we know these can be only temporary. But what a long temporary!

There are going to be a lot of sad, bitter investors/gamblers out there when this shakes out. Elderly poor.

I woke up this morning thinking (in line with famous quotes like "Where's the beef?" and "Show me the money" and "Where are the customers' yachts?"):

"Where are the earnings?"

Of course there are not the earnings over a normal lifespan to support the valuations of today (though Oro helps with this a bit with his tax rate observations). Then I thought "And gold shows almost no earnings, which is why they shun it now." But gold is a bet/insurance that people have strayed too far from understanding not only what earnings are, but what money is.

And, in an upside down kind of situation, they cannot backtrack to a re-affirming of earnings (unless it's your own business, and probably a contrarian one) without taking a strong stand on a reversal of moneys.

In one quick attempt at a definition: Money is whatever people have faith in. But the crowd's faith in some things can vanish quickly, while rising or holding steady in others.

"each day still on the job is a good day for the hedging strategist"

And, Michael, you are an amazing writer. If this were a wise society, there would be a national position of teaching & influence for those of such wisdom. But, then, look what they did to Socrates...

I want to start out with a couple of comments regarding these folk's analysis of economic and monetary issues.

First, I would like to say that I agree with the Austrian school fundumental principles that inform their opinions. However, I find some of their applications of these principles lacking.

Comments:

1. First of all, they do not view the savings statistics with as much skepticism as they view CPI or GDP deflator inflation measures. Savings data, however, do not include two major elements: stock options compensation and capital gains resulting from stock buy-backs, which have dominated the US stock markets for nearly a decade and provided an extra 1% to 2% on top of the 1.8%-3% dividend payouts during this period. This has distorted many measures including income measures - and thus savings measures.

Savings results including these two measures of income:

A Savings rate including stock options compensation
B Savings rate including financial asset accretion by stock Buy backs
A B
Mar-59 10%
Jun-59 10%
Sep-59 9%
Dec-59 10%
Mar-60 10%
Jun-60 9%
Sep-60 10%
Dec-60 9%
Mar-61 10%
Jun-61 11%
Sep-61 11%
Dec-61 11%
Mar-62 11%
Jun-62 11%
Sep-62 11%
Dec-62 10%
Mar-63 10%
Jun-63 11%
Sep-63 10%
Dec-63 11%
Mar-64 12%
Jun-64 12%
Sep-64 11%
Dec-64 13%
Mar-65 11%
Jun-65 11%
Sep-65 13%
Dec-65 12%
Mar-66 11%
Jun-66 11%
Sep-66 11%
Dec-66 11%
Mar-67 12%
Jun-67 12%
Sep-67 12%
Dec-67 13%
Mar-68 12%
Jun-68 12%
Sep-68 10%
Dec-68 11%
Mar-69 10%
Jun-69 11%
Sep-69 12%
Dec-69 11%
Mar-70 11%
Jun-70 12%
Sep-70 13%
Dec-70 13%
Mar-71 13%
Jun-71 14%
Sep-71 13%
Dec-71 13%
Mar-72 12%
Jun-72 10%
Sep-72 12%
Dec-72 13%
Mar-73 13%
Jun-73 13%
Sep-73 14%
Dec-73 15%
Mar-74 14%
Jun-74 13%
Sep-74 13%
Dec-74 14%
Mar-75 12%
Jun-75 15%
Sep-75 13%
Dec-75 13%
Mar-76 12%
Jun-76 12%
Sep-76 12%
Dec-76 12%
Mar-77 12%
Jun-77 11%
Sep-77 12%
Dec-77 12%
Mar-78 13%
Jun-78 12%
Sep-78 12%
Dec-78 12%
Mar-79 13%
Jun-79 12%
Sep-79 12%
Dec-79 13%
Mar-80 13% 13%
Jun-80 13% 13%
Sep-80 13% 13%
Dec-80 14% 14%
Mar-81 14% 13%
Jun-81 13% 13%
Sep-81 15% 14%
Dec-81 15% 15%
Mar-82 14% 15%
Jun-82 14% 15%
Sep-82 14% 14%
Dec-82 13% 13%
Mar-83 13% 12%
Jun-83 12% 11%
Sep-83 12% 11%
Dec-83 13% 12%
Mar-84 14% 14%
Jun-84 14% 15%
Sep-84 15% 17%
Dec-84 14% 17%
Mar-85 12% 15%
Jun-85 13% 15%
Sep-85 11% 14%
Dec-85 13% 15%
Mar-86 13% 15%
Jun-86 13% 15%
Sep-86 12% 14%
Dec-86 11% 13%
Mar-87 12% 14%
Jun-87 11% 13%
Sep-87 11% 12%
Dec-87 12% 13%
Mar-88 11% 13%
Jun-88 11% 14%
Sep-88 11% 14%
Dec-88 12% 14%
Mar-89 12% 15%
Jun-89 11% 14%
Sep-89 11% 14%
Dec-89 11% 13%
Mar-90 11% 13%
Jun-90 11% 12%
Sep-90 11% 11%
Dec-90 11% 11%
Mar-91 11% 11%
Jun-91 12% 10%
Sep-91 12% 10%
Dec-91 13% 12%
Mar-92 13% 11%
Jun-92 13% 11%
Sep-92 12% 11%
Dec-92 14% 12%
Mar-93 10% 9%
Jun-93 11% 10%
Sep-93 10% 9%
Dec-93 12% 11%
Mar-94 9% 8%
Jun-94 10% 9%
Sep-94 10% 10%
Dec-94 10% 10%
Mar-95 10% 10%
Jun-95 9% 10%
Sep-95 9% 9%
Dec-95 9% 10%
Mar-96 9% 11%
Jun-96 9% 10%
Sep-96 9% 10%
Dec-96 9% 10%
Mar-97 8% 10%
Jun-97 9% 11%
Sep-97 9% 11%
Dec-97 9% 11%
Mar-98 12% 13%
Jun-98 11% 12%
Sep-98 9% 11%
Dec-98 10% 13%
Mar-99 8% 12%
Jun-99 8% 12%
Sep-99 7% 11%
Dec-99 8% 10%
Mar-00 7% 9%
Jun-00 6% 8%
Sep-00 6% 7%
Dec-00 2% 4%
Mar-01 1% 4%
Jun-01 1% 4%
Sep-01 3% 5%


As Austrian theory predicts, the artificial inflation of credit (consumption claims on non-existent resources) resulted in actual reduction in real savings of real resources and a loss of nominal savings rates later on as real incomes were hurt by the credit expansion and invested past savings lost their value according to the preceding substitution of artificial credit for real savings.



2. Despite much news of IPOs during the Tech boom, these never reached such a scale as to bring the capital raising function of the stock market into use. On net, listed companies have been returning funds to the markets at rates reaching $300 bil per year - it is foreign companies who raised capital here - at over $100 bil a year. Nearly all of the discussion of low valuation regarding dividend yields can be put to rest on the basis of this alone. Since the combined stock buy back and dividend yield only dropped to 3.3% for a short while, and was about 4% through most of the late 90s and 2000.

This is the result of the tax preference given to capital gains over dividend income, which makes the current after tax rate similar to a 6% yield in 1990.

This has also caused a shift in corporate capital funding from stock to debt - at a rate of 1/2 trillion dollars per year during most of the post 98 boom and now, with only a notch during the year 2000 drop in savings rates when debt issuance fell to $300 billion.

cont. later

http://www.usagold.com/Order_Form.htmlMK said this earlier:
"Those of you looking for a deeper understanding of the forces at work in the gold market will find our latest Quarterly Review a beacon in a sea of market confusion. In it, master analyst and prominent market maven, James Grant offers his views on the subject in an extensive article not to be missed titled 'For Real Money'."

By simply saying "Show me the info!" using the request form we've provided (see link above), you can enjoy the same information services that are provided to Centennial's regular clientele. Jill will provide you with your own access codes with which to download the quarterly reports as they become available. And the current one is still hot off the press. Act now and enjoy it today.

(And if you choose to take things a step further saying "show me the bargains!", by picking up the phone any thime during Denver business hours you can enjoy the same competitive pricing on gold that has been offered for three decades to Centennial's thousands of satisfied customers.)

R.

...and look what they did to FOA / Trail Guide...

R.

A friend of mine who is a gold trader in Manhattan recently met a couple of young, witty, intelligent and attractive derivative salesmen (female salespersons; pardon moi)at a local pub. Whilst exchanging pleasantries, each discovered the other's profession. My friend decided he would have a little fun and asked, "what are derivatives anyway?". The answer: I really can't explain that; but, you see, we have this teriffic software blah, blah blah......

Behold this house of straw, er, cards, oh, "whatever!" we call the new economy. Sovereign "giants" have seen this all developing for many years. In fact, I will wager that the '87 crash was a wake up call. FOA said as much.

Now, we see and we KNOW what we observe in the financial realm of (dis) order is not right; yea, cannot be right. Look at the DOW today or the NDQ or S&P. I care not if it is inflation or deflation to infinity and beyond.

I'll be in the golden lifeboat while paying for my ticket with Euro's.

As I was driving through a parking lot yesterday watching a tiny little woman trying to navigate same while attempting not to hit anything with her giant SUV all the while listening to the glib and loquacious "Brian Mc Fadden of the Wall Street Journal Report" I thought, yes, the world is right. (right!) Sorry for the rant.......CM

From WGC Rhona O'Connell's daily gold market commentary:

"Mongolia's central bank said on Wednesday it bought 13,452.6 kg of gold in the first 11 months of this year, 11.7 percent up from the same period of last year. This would suggest that it is easily on target for national production of 14 tonnes this year, as the Central Bank buys virtually all local output."

2. cont.

Corporate debt was still being picked up by foreign buyers at a $230 billion rate as of Q2, up parabolicly from $20 bil in 1994, with equity purchases and direct investment (in plant and equipment etc.) following suit in similar proportions, though with a slight delay.

This is more an indication of non-dollar monetary/credit inflation outside the US displacing real savings from abroad into the US. That is in no way a bad thing. In today's global markets, the irresponsible inflating action of a foreign central bank would translate quickly into real capital resources flows from net exporting countries into non-inflating (or at least less inflating) countries. Net importers who inflate would simply suffer a currency collapse due to a loss of reserves from excess consumption, and a net outflow of capital.

3. The next issue to consider was discussed before, namely the result of de-facto tax rate reduction being a cause for the expansion of financial assets volumes, and therefore of debt levels. This is HEALTHY. My estimates indicate that effective tax rates have fallen over the past decade from 62% to 46%, thus making possible a better than 60% growth in REAL financial assets (net of price inflation). The 60% growth would hold even if real profits did not rise at all, but merely staid the same. This growth level was overshot to 82% in the peak bubble quarter of Q1 2000, corrected below that to 40% at the bottom of the post 9 11 crash, and has pretty much returned to being up 60% after the financial market recovery.

If one accounts for actual real profits growth then the appropriate figure is probably closer to the peak 80% + mark, which would probably have been retained had the post LTCM credit bubble not occurred. The bubble brought resources to be allocated by credit expansion rather than savings out of income (i.e. real resources), this brought about the internet/telecom bubble, a misallocation of resources if ever there was one, and a retail space bubble, another massive misallocation of resources.

The artificial credit sucked resources away from areas of the economy upstream from the consumer such as Energy. It created shortages of labor and other resources where the artificial credit was expended: in the tech sector and its Wall Street capital support services, brought income levels there up substantially, and thus attracted people and resources from the rest of the economy. The artificial income resulting from the artificial credit caused an unsustainable artificial rise in consumption.

The resources allocated towards servicing this artificial income, as well as for serving the artificial credit spenders in tech land and later in retailing were wasted because the underlying infrastructure investment in Energy etc., needed to produce the inputs into these new capacities was missing, and labor resources were over extended and brought to the wrong locations (silly valley, silly alley, etc.). Where great big silly houses were built to accommodate highly paid tech experts who would soon lose their income. Not surprisingly, some in the Valley real estate biz are talking of a 25% drop in high end home prices as the probable result. But not to worry, the techies are still in extremely short supply in the Midwest and in the peripheral cities/metro areas where the technology is being implemented. Once the tech experts discover this they will move to where they are actually needed, either physically, or by telecommuting.

The misallocation of resources by artificial credit pushing had to result ultimately in the following (according to Austrian business/credit cycle analysis):
a. A decline in the purchasing power or value of savings already invested (or rather malinvested). Which would require people to increase savings rates to match prior savings targets (now further away) and protect against the risk of losing wage income.
b. A "nuclear winter" (to borrow Fleckenstein's term) in capital expenditure where investment was in excess. And a proportional drop in incomes and employment in those capital producing industries.
c. The above would bring a rise of unemployment rates and a drop of consumption by those employed by the over-extended industries, and as a result of the reduction of their demand, consumer goods prices relative to labor income outside these industries should RISE.
d. The prices of industrial/service inputs strained disproportionately upwards during the peak of the boom (Nat Gas and Electricity), would fall accordingly. The companies that were loss makers at those artificially inflated input costs would return to profitability and start initiating new capital investments as the margin between prior product price and input prices makes the expansion of capacity attractive again.


Thus savings would the key to recovery: an increase in savings would re-orient prices of final products back to sustainable proportions to input costs. Both consumer and producer goods (energy) would fall relative to wage with the proportion of the fall of producer goods prices being significantly greater (because consumer's savings would continue being spent whiie producers sell from inventory and lower capital spending, thus lowering producer goods prices, and lowering input costs to the rest of industry and thus to still employed labor. Ultimately some labor will move out of former boom towns and into where it is needed.

http://www.usagold.com/goldenchalkboard/gc_turkey.htmlAs you know, the fluctuations in the international currency exchange rates can yield unique perspectives on the "performance" of gold -- depending on one's place of residence (local currency). What has been seen in Canada is a subdued (to put it mildly) version of what everyone in Turkey already knows quite well. (see URL)

Great discussion topic!

R.

I appreciated the response. I wasn't looking for a recap of the LTCM debacle(too painful), and the ensuing FED and Fred reliquification model, but your effort was a great read. I believe I've read almost every post you've put up on this forum, and detail is something, I've never found lacking in your posts. Thanks for taking the time.

I was one of those market participants who wasn't too happy with the Fed Policy(fall 98), and the whipsaw ride I enjoyed through July of 99. FWIW, I agree with your "In short" statement. Since then, I've been net short the market, but playing the techs on rallys. This has definately been a traders market.

I've read many an analyst who has used "should have" and "could have" when referring to Fed Policy, this seems to be the norm as of late, any consideration for a "stable" monetary policy in this environment, seems a mute point. Reliquification, with a lagging market policy doesn't make for stability in anyones book, unless you're a speculator.

I also read with interest your conclusions on the Europeans misallocation of capital during this period. I've considered this to be the case all along, but I look forward to examining the facts as the US growth machine chugs on 4 cylinders instead of 8. Will(has) the rest of the world caught our cold, or will it adapt and move on.

I guess I could just go with the flow, and say we've bottomed, but at this time, I just don't see the evidence.

Cavan Man: since when is your opinion a rant, FWIW, I always enjoy your posts, I didn't consider this last one to be anything but stellar.

gotta run, and get some lunch...

take care all,

The CoinGuy

Appreciate your ongoing analysis and thoughts. However, the scene from my perspective is FUBAR or approaching with great alacrity. What is desperately needed is a new monetary order. While Gates can keep building on DOS in the near term, I do not believe the same can be said for the USD/IMF.

4. cont. (should have been put at "The artificial credit sucked resources away ...")


To summarize: A business/credit cycle consists of the following:

1. An artificial expansion of credit driven by interest rates set arbitrarily too low by a central bank foreign OR domestic.

Note: Domestic source credit expansion creates the most damage at home where its correction causes a loss of purchasing power of portfolios along with losses of income. Foreign sourced credit expansion brings the loss of portfolio assets onto the foreign lenders and retains the income and productive capacity at the investment target, bringing real incomes up at the investment target, and down at the inflation source (either through unemployment or lower real wages).

2. Artificial credit expansion allocates capital/producer resources away from actual cash flow producing industries to industries with unlikely/risky future cash flows. There, incomes rise and bring about further capital allocation to service the consumption of the new artificial income. The income is made available to consumers before they actually produce a product.

3. As capacity built with artificial credit expansion funding comes on-line, resources are rapidly stretched and labor and resource prices rise above plan, making much of the new capacity and some of the old loss making. At the same time, prices of the products fall as new supply produced by the new capacity hits the markets.

4. The loss making capacity is shut down or reduced, portfolio assets issued by the loss making capacity's owners lose some or all of their value, and the assets liquidated or their control reallocated by the creditors. The resource and labor draw by the loss making capacity is reduced or eliminated, lowering labor rates and producer goods pricing.

5. Margins in the rest of industry are returned to prior levels and are then improved as loss making industries shut down capacity, and input factor prices drop.

6. Some savings and remaining portfolio assets are spent by the unemployed along with a rise of real incomes for labor remaining employed which is now saving a greater portion of its income (thus final consumer product prices are lowered relative to income), and rise relative to producer goods, particularly fixed capital and equivalents.

7. New investment returns into action as operations resume profitability with lower producer goods prices and capacity growth and with lower debt burdens on liquidated capacity. Labor is reallocated to where it was short before, and producer goods formerly lacking in investment due to higher margins and lower capital goods (and services) costs.



The key to understanding the cycle is that what makes a portion of credit expansion artificial is that the allocation is not of actual savings out of income but of claims to the same savings issued by people who did not have the income. Only actual savings can be invested. The result of the attempt to invest non-existent savings is a rise in the price of existing saved resources.

This makes the new businesses into loss makers and causes the lenders to lose some or all of their investment in proportion to double the "missing" savings because of the multiple waste: the production of unwanted product, the consumption of more valuable factors by the new production of unwanted goods, and the consumption of capital resources in malinvestments that could have been used to invest in production of products that were in demand.

The solution to the problem is composed of (1) the release of labor and other resources from consumption by loss making business, (2) reallocation of REAL income to those who earn it, (3) increased savings by remaining income earners, (4) readjustment of relative prices of labor, consumer goods, producer goods, capital equipment/services, debt burdens and financial income. The results are higher profits to strong businesses, reduced overall debt burdens, and either enough savings to build capacity for the producer goods in short supply or to build capital equipment that reduces their consumption, or in the case of no new savings, enough reduction of loss making capacity to return to a balance of producer goods and final product sales.

Alan Greenspan, Maestro or Music Man?

The answer calls for a judgement of actions and decisions. It requires an
estimate or opinion of past performance. By what criterion shall we judge the Fed.
chairman? Can extenuating circumstances mollify criticism or enhanse praise?

I submit that Alan Greenspan, when appointed chairman, became one of the
most powerful players in an ongoing game already in progress. There were
economic forces, conditions and circumstances working and evolving in the
framework of an incomprehensibly complex global web. The game was already
afoot with the rules predetermined, some apparent, some not; some adhered to and
some not. Tough conditions, indeed.

Has Greenspan, as Maestro, welded those forces at his disposal in such a way
so as to ensure or produce a prosperous and healthy economy? Or acted so as to
provide the environment necessary for one? Is this then the criterion by which we
should judge the Fed. chairman? If so, shall we judge by this prosperous and
healthy economic standard only? That is, does this end justify what some may
consider the unethical or deceitful means employed to attain this desired economic
state?

I submit that Alan Greenspan, as Music Man (flim-flam man), well knows the
importance that public confidence plays in the state of the economy. Although a
view of the total economic struggle or anything close to a complete
comprehension of it are assets not entirely available to him, still Alan Greenspan
knows that the appearance of control, instilling confidence, must always be
maintained. Indeed, "The essence of financial distress is loss of confidence."
(Manias, Panics and Crashes, Kindleberger)

Whether led with the deft hand of a master or the deceit of a confidence man or
with a combination of both, we are, none the less, now approaching the end of
2001. The question now becomes that which great men have asked throughout our
history, "How fares the Union?" Specifically, in our judgement of the Fed.
chairman, do we have a prosperous and healthy economy?

My opinion is that we do not. I believe that the economy has suffered an
implosion from the bursting of an irrational, speculative bubble. This is not
unique to economic history but still very painful. It may have been prevented with
monetary restraint. The overvaluation of stock prices has begun a corrective
phase. The ongoing creation of fiat money (debt), the cost of its creation and
supporting its continued existence remains. The excess use of credit has created a
disruption of the economic forces or the invisible hand which normally acts to
stabilize the monetary system. The expansion and uplifting of one nation's fiat
currency to that of the world's reserve may precipitate more unforeseen and
undesireable results. Only time will reveal the potential dangers of this global
monetary (credit) explosion. Greenspan's term in office has witnessed the bursting
of a speculative stock price bubble, will it also preside over a debt (credit) crisis?
Excess speculation always implies credit. "Credit was the Siamese twin of
speculation; they were born at the same time and exhibited the same nature;
inextricably linked, they could never be totally separated." (Devil Take The
Hindmost, Edward Chancellor).

My verdict is that Alan Greenspan has presided over a great speculative mania
during which that which we call money has completely escaped his control. In that
this event, even though it created temporary prosperity for some, did not ensure or
produce a prosperous and healthy economy but instead has sown the seeds of a
monetary crisis, I find Alan Greenspan's perforance a dismal failure. However, it
is also my belief that monetary control was never within the scope of his powers.
Perhaps this is as it should be.

Alan Greenspan is neither "Maestro" nor "Music Man" and is exonerated as
the sole perpetrator of our present "grim" situation. Although most influencial in
the unfolding of these events, no one man, no matter how influencial, can control
them entirely.

As to his handling of the present situation- specifically his reaction of
providing more unbridled liquidity- I believe he is guilty of attempting to preserve
the present unbalanced situation by further endangering the future. In this, he has
assumed the role of lender of last resort, controller of central banks. " Central
banks should act one way (lending freely) to halt the panic, but another (leaving
the market to its own devices) to improve the chances of preventing future panics.
Actuality inevitably dominates contingency. Today wins over tomorrow."
(Manias, Panics, and Crashes, Charles Kindleberger).

In conclusion, I perceive Alan Greenspan as more an unwitting accomplice in
a rigged game than a master player or confidence man. Our present economic
situation appears to have evolved to the brink of a monetary or credit crisis which
could precipitate a global systemic meltdown. Should this occur or appear likely
to occur, confidence in all man-made paper assets, born from obligation or credit,
will be destroyed. This confidence is based on perceived value or the future
fulfillment of another's obligation or performance. Any crisis in confidence
destroys all value of these so-called assets. Real or tangible possessions will retain
value although that value, expressed as a number of monetary units, will change.
Needless to say, the most widely acceptable or recognised store of value
throughout history has been and is precious metals-- silver and gold!! Gold will
always remain aloof from and immune to the economic follies of man.

Cavan Man and Coin Guy, thanks for comments.

5. The current scenario is that of increased savings caused by the following:
a. Great fear of job losses, greater desire for insurance coverage causing a rise in direct savings through debt reduction or actual savings (that includes insurance premiums). This is occurring both here and abroad.
b. Labor in marginally productive or loss making industry is being released onto the labor market, thus greatly reducing their net negative productive value (thus reducing wasteful portions of industrial consumption) and reducing consumption overall.
c. Removal of retirees and some employee portfolio assets from bankrupt companies such as Polaroid, steel (Bethlehem and LTV), Tech (Lucent etc.), Enron, forcing back to work or to reduce consumption funded from punctured investment.
d. An end to employee "hoarding". Where employees were held "just in case" for the rebound in the economy, thus preventing the rebound from happening (it can't happen until labor moves from twiddling thumbs and "make work" to actual productive work.
e. The 20% drop in real financial assets going into end September was sufficient to dampen financial asset source consumption by business.
f. The bulk of the tax rebate was saved rather than consumed. The lower rates will help quite a few people save more rather than escape taxes.



Considering all this, I expect to see the savings numbers improve substantially in Oct. and those for Sep to improve as well. My guess is that savings rates were at the 8% level for the Sep quarter, and would probably sit just under 10% for this quarter.

Flows into MMFs and Mutuals show a very strong pickup over the past couple of months and indicate a peak flow. Furthermore, banks are being stuffed with cash, forcing them to buy short bonds off the market. In short: interest rates are falling because people and businesses are saving more than other people and businesses are borrowing, the Fed is behind the curve on this one.

You know what, Dark horse, I've been thinking what you've been thinking.

We're due for a contest and it would be productive to tap the collective wisdom around this noble
Table. I agree.

But how to break the psychic dam and get the ideas to flow?

Nothing like a challenge to match the quality of the poster and lurkers present. This idea came to
me while having
lunch today and browsing over the latest GRANT�S Interest Rate Observer. It seems that one of
James Grant's
friends -- a fellow named Paul L. Kasreil who does economic research for Northern Trust Co. --
posed a most
far-reaching question. One that is making the rounds among people who talk markets as well as
those who enjoy the
same as a worthy pre-occupation.

The question is this:

------------------------------------ Alan Greenspan: Maestro or Music Man? ----------------------------

The book, "Maestro", was the subject of a great deal of conversation here when it came out
several months ago and
opinion was pretty much divided on it -- some thought it characterized a master at the peak of his
powers. Others
saw it as a whitewash of a Fed chairman who simply injected liquidity willy-nilly at a time when
the world had no
where to turn but the dollar. Some called him genius. Others called him lucky. Still others called
him confused --
pumping money into the system at one turn and deriding "irrational exuberance" the next.

But Maestro or Music Man?? Now that's intriguing, and very much worth a contest.

For those of you scratching your head at the choice, I will remind you that The Music Man, one
of America's
favorite all-time musicals, is the story of band director/con artist. The following from famed
critic, Clifford Ridley
captures the Music Man for our purposes:

"Bierko is a younger Hill than Preston, yet with his slicked-back hair, his self- dramatizing
gestures and his roving
eyes constantly scouting for trouble, he's every inch the two-bit con man. As advertised, he
delivers Hill's fervid
patter with dash and musicality; and at the end, when he's unmasked by the unconditional love of
a good woman,
he's quite touching. And he has a splendid foil in Luker, who sings Marian's arching melodies in
a limpid soprano
and persuasively metamorphoses from chilly skeptic to loving co-conspirator. She also has a fine
way of saying
"Ssssh" - an admonition, fortunately, that this ebullient production mostly ignores."

And then here's a passage from the preface to Bob Woodward's "Maestro" which more than
adequately captures the
essence of the Maestro side of the coin:

"Greenspan is slated to remain chairman of the Federal Reserve until 2004. Not only is he a
major figure in the
world's economic past, he is central to its future. He has been frank enough to stand before the
new and amazing
economic circumstances that he helped create and in the end declare them a mystery. It is
impossible to account fully
for the continuing high growth, record employment, low inflation and high stock market."

And, toward the end of this important book:

"Greenspan also represents something more than the confidence wing of the American
Personality. He stands at the
point where the country's eternal optimism meets the country's abiding suspicion that something
will go wrong. . .
That fear also creates a kind of excitement and anticipation.Greenspan stands at the crossroads of
optimisim and
pessimism. Each of us is a character in the nation's great economic soap opera; Greenspan is
both director and
producer."

So, the question before the table is this:

***** "Alan Greenspan, Maestro or Music Man?" *****

Lovable Con-Man or Brilliant Fed Chairman?

I will leave with another thought of Mr. Kasreil -- as I think the computer cannot be taken out of
the present
equation without missing a major part of the analysis:

"Economics how do we measure that? Well, I can tell you there has been a very increase in
productivity, at least at
my shop. When I joined the Northern Trust over 15 years ago, it took three senior economists
and three research
assistants about two weeks to come out with an inaccurate economic forecast, and with this
laptop, I can do it all by
myself in one day."

The world, I know, is not spinning any faster than it used to be but who among us would deny
that it is. . . . . . . .
.So Maestro or Music? You be the judge.

Each entry must address the question in sufficient length but no more than is absolutely
necessary to make the point
-- the eternal bane of the writer. An appropriate link is acceptable. The contest will be judged not
on the choice you
make but on the erudition and argumentative skills used to make your case. Please surround your
entry with stars as
shown. The winner will get a lucky French Angel gold coin -- the one they say Napoleon carried
throughout his
campaigns until he lost it . . . . .the day before Waterloo. As Darkhorse suggests the entry-post
must also include
some reference as to what the future might bring by the end of the year (for posterity's sake). As
always, the post
must conclude with how all of this relates to gold and gold ownership -- and it is there that the
worm turns, where
the contest will decided. The runners up -- two of them -- will receive a Mexican Azteca silver
coin.

First time posters will receive a one-ounce U.S. Silver Eagle but in order to claim the price you
must indicate that
you are a first-time poster with Jill Snyder (jill@usagold.com). The post must be an entry into
the main contest --
"Alan Greenspan, Maestro or Music Man." First time posts in the price guessing contest (see
below) do not count
toward the Silver Eage Prize. Pls include your current mailing address.

The posting contest will go from this moment through Sunday, December 9, 2001 when
midnight graces the purple
mountain majesties.

* * * * * * * * * * *



Good luck all. May the best poster win.

Good luck to all who enetered our price guessing contest. Next time we'll take Gandalf's advice and make the increments 10�.

By the way, thanks Gandalf for running a very successful contest. I think we all enjoyed the past few days and appreciate your efforts.

Lots of entries. . . . .

From today's USAGOLD report, on the subject of massive, delta-hedged derivative positions- "It encompasses nearly every aspect of the price fixing mechanism within the economy."
I can offer a partial answer and one book reference in response to your client's question, "Where did this start?"
From "Devil Take the Hindmost" by Edward Chancellor, page 10, comes the following,
"All manner of financial products and services were traded on the Amsterdam Exchange (a New Exchange was founded in 1610): commodities, current exchange, shareholdings, maritime insurance... (it was) a money market, a finance market, (and) a stock exchange. Naturally, the Exchange became a crucible for speculative activities."
And further describing this Exchange's activities,
"Stock options-- which gave the buyer the right, but unlike the futures contract not the obligation, to buy or sell shares at a fixed price during the contract period-- were also traded on the Exchange. ... Futures, options, and ducation shares are examples of what we call derivatives, namely financial contracts which derive their value from an underlying asset, such as a share."

A ducation, Chancellor explains, were shares valued at only one-tenth normal value. These existed in 1610 in Amsterdam and their purpose was to allow the less wealthy to participate in the game (lower stakes). This immediately reminded me of the Mini-S+P contract valued at one-fifth the normal contract and, of course, initiated so that even poor suckers could enter the casino.
Derivatives are not new. The speed of computer assisted trading is relatively new and has been applied to derivative trading. This increased power has created a situation wherein a major "meltdown" can (has the potential to) occur in very tight, small timeframe. The enhansed power of the computer has also provided the ability to complicate these oftentimes offseting positions to infinity. Maybe the most powerful computer wins!
Chancellor's book is among the best I've read (slowly with a ruler and pen for underlining) and studied. Very well written and also includes hundreds of footnotes. Thanks Mr. Chancellor, wherever you are.
Rich

ORO, you are talking out of both sides of your mouth. You have in recent past been quite vocal that the Fed be abolished, and now here you are seen expressing what is tantamount to an endorsement for proactive Fed action.

Get it together.

I know it sounds as if I am advocating a very active Fed.

I am not. I am saying only that the Fed, in order to do its inherently impossible job, must change interest rates much more quickly than it does and to particular levels that I can only guess at. I can say that the Fed seems to have overdone it by far already (my preliminary figs for the past two months, updated today indicate that a 1/2% hike may soon be in order, if the time is not there yet). I hope to see a defacto reversal of policy soon.

I still think the world would be better off with no central banks at all, particularly the US would be better off without the Fed.


There is still no hope for a bubble/crash free economic progression so long as the Fed and its counterparts exist. And there is yet to be a net importing country that can cause an actual deflationary trend within its own boundaries under a fiat regime even when carrying out a deficit credit supply demand balance.

http://www.usagold.com/THEGILDEDOPINION.htmlMy overdue Puplava update is on the way.

R.

http://biz.yahoo.com/rf/011205/n05145741_2.htmlExcerpt:
--------BUENOS AIRES, Argentina, Dec 5 (Reuters) - Argentina on Wednesday scrambled for cash to keep making its debt payments as credit agencies warned that the government's banking controls had effectively violated its decade-long policy pegging the peso currency on a par with the U.S. dollar.

...But local equities traders were encouraged by the possibility Argentina might ``dollarize,'' or scrap the peso completely and replace it with the U.S. currency.--------

Sure. And why NOT?? After all, it's just a "name" when you REALLY know what a dollar is.

The neighbor is burning, and yes, you should worry. Better still, take action. Diversify out of dollars and into gold.

R.

http://biz.yahoo.com/rf/011205/n05245060_2.html Are you sleeping through it, or are you taking adaptave actions?

Excerpt:
--------NEW YORK, Dec 5 (Reuters) - It's been a wild ride for the U.S. Treasuries market the past six weeks, and the nauseating minute-by-minute price swings may not end any time soon.

...Events have slammed the bond market this year -- from the Federal Reserve slashing interest rates to the lowest level in 40 years, to the Sept. 11 attacks and a Treasury Department decision to cancel future issuance of 30-year bonds.

Some traders said they have not seen sessions this volatile since the 1998 Russian debt crisis and near collapse of giant hedge fund Long-Term Capital Management.

...In addition, the recent meltdown of Enron Corp.may have forced the giant energy trader to liquidate interest rate holdings, exacerbating the downward spiral in Treasuries and interest rate futures.

At the same time, trading desks are reluctant to take major positions before year end to preserve profits in this year's fixed-income rally. But as selling accelerated on Wednesday, dealers jumped in to protect this year's gains and bonuses.---------

Hopfully you're seen the signs (of which these are but a few). The rest is up to you.

R.

Tolkien Would Have Hated 'Rings' Film -Biographer
Updated 6:06 PM ET December 5, 2001

By Mike Collett-White

LONDON (Reuters) - J.R.R. Tolkien would have hated the forthcoming Hollywood adaptation of his magical ``The Lord of the Rings,'' but millions of movie-goers around the world are unlikely to agree, Tolkien's biographer said Wednesday.

Michael White, whose book about the Oxford professor and creator of the trilogy set in the mysterious Middle Earth comes out this week, predicted the film would even out-sell fantasy flick ``Harry Potter and the Sorcerer's Stone.''

``The Harry Potter film has broken the box office records,'' White said in a telephone interview. ``But I am going to put my head on the block and predict that 'The Lord of the Rings' will just pip it.''

``The Fellowship of the Ring,'' the first in a trilogy of films based on Tolkien's best-loved novels, premieres in London Dec. 10 amid intense hype over its box office potential.

Ironically its creator, a mild-mannered British academic who fought in the trenches in France during World War One, would have loathed the whole project.

``I think he would have just closed his eyes to it,'' White said of Tolkien, who died in 1973 at age 81.

``He had a hatred of all things Hollywood and did not believe in the idea of imitation being the best form of flattery. As a writer I find that staggering.''

The dark tales about Frodo Baggins the intrepid hobbit became bestsellers only late in life for the pipe-smoking family man, a fact Tolkien is unlikely to have regretted.

``Being a cult figure in one's own lifetime,'' he is quoted as saying ``I am afraid is not at all pleasant. In my case at any rate it makes me feel extremely small and inadequate.''

``The Lord of the Rings'' trilogy and ``The Hobbit'' have sold 160 million copies between them and Tolkien has been voted the 20th century's most popular writer in numerous polls.

Comparisons between the two big-budget films based on best-selling books of sorcery and dragons and released almost simultaneously are inevitable.

And while some members of the Tolkien family choose to have nothing to do with the Hollywood adaptation, the stakes for the movie industry are high.

The Tolkien series will cost an estimated $300 million to make. The film ``Harry Potter and the Sorcerer's Stone,'' meanwhile, has already netted over $200 million in North America alone.

J.K. Rowling, author of four Harry Potter adventures which sold a total 100 million copies in just four years, is reported to be on track to become the world's first billionaire writer.

White said the comparisons had been overdone, and that the books upon which the two films are based differ significantly.

``The Harry Potter books are much more rooted in everyday life while 'The Lord of the Rings' is set in a totally alien world with no direct link to the real world at all.''

But the competition between the two films is likely to benefit both sides in the long run.

``A lot of Harry Potter film and book fans are getting interested in 'The Lord of the Rings,''' White said.

http://moneycentral.msn.com/investor/charts/chartdl.asp?FC=1&Symbol=nem&CA=1&CB=1&CC=1&CD=1&CP=0&PT=5Just seeing if this link works from the forum

I am happy to see cool heads in Israel even while under stress.My first instinct when I saw Sharon coming here was he is taking the opportunity to get U.S. troops involved
in Mid East.IMHO the most dangerous thing we could do.I saw two high level Israel officials take the same position that U.S. troops should not be there at this time.Israel should take out terrorists and not worry about Arafat.I don't think he is the brains in that bunch anyway.Either he can control his troops or he can't.If he can't he needs to go.Without him someone will have to surface as spokesman or spokeswomen.I am no fan of Sharon,but Arafat was a fool not to take Baraks offer,it simply shows someone else is pulling his strings.
I am reminded of a cartoon I once saw ,it involved a hitchhiker who wouldent take a ride from a car that stopped some distance away ,he reasoned, maybe the next one will stop closer!Arafat is akin to the hitchiker.
I would like to see a Palastinian spokeswomen come forward,I believe her name is Ashwari(I hope I spelled her name right).She seems to be a level headed intelligent spokeswomen.

Mr. Godsell,

I am a man with modest income and modest education and I feel slightly intimidated to send you a note with a question. I believe what drives me to this is the fact that you and I can share this note as equals, 2 men with an
interest in gold. I have held gold in my hand as a miner and now I 'hold' gold as an investment. The alluring magnetism of gold is perplexing. I am sure this brings us to certain parallels.

During the late '90's I watched the amazing acceleration of paper assets and

became concerned about the stability of the world's financial sytem(s). In 1999 I bought shares of Franco-Nevada; the selection of FN was based on my interest in it's royalty program.

So time comes to present day, my knowledge of gold has improved enormously and I watch in awe the 'battle' between your firm and Newmont for the ownership of Normandy.

I know very little of the 3 corporations (AU, NEM, NRDY) but allow me to make a point; because of my loyalty to Franco, I have taken sides with Newmont on the grounds that Franco approached Newmont to form the largest
'unhedged' gold mining company in the world. Numerous commentary discuss a central theme, that is, a war is emerging between the 'hedged' and the 'unhedged' and as a whole 'hedging' is unwinding in the gold industry.

In my studies of commodities I have surmissed that prudent 'hedging' strategies will enhance profitability in a declining market. Once a base, a low if you will, has been formed these hedges need to be unwound to
participant in a rising market. My belief that gold has bottomed then re-inforces my interests in Franco.

I quote from Franco-Nevada's 2001 Annual Report: Outlook for Gold

"Gold demand exceeds supply by 1000 tons annually. The shortfall has been made up by Central Bank selling and loans to producers who pre-sell their production. These Central Bank sources of supply could possibly go on for
another 5 to 8 years or until faith in paper currencies erode. The US trade deficit is unsustainable at US$400 billion annually. Falling stock prices and interest rates could shatter confidence and lead to a flight to gold.
The best indicator of higher commodity prices is a sustained period where prices are below the all-in costs of production. This situation currently exists in the gold industry."

Gold has such a complex history and has had the role of keeping paper money honest. It is indeed sad that some modern governments wish to extinguish this through alledged foul means. It is also alledged that corruption runs
down through certain government ranks to the owners and senior management of certain gold producers. I do not know if these allegations are true.

This gold war will end in the not-to-distant future. The world in the last few years has become very unstable and volatile. The outcome as I see it will end in one of 2 ways; gold will regain its monetary status and will
return to buoy financial markets or secondly, the outcome renders gold as a 'barbaric metal'. I ask you Sir, what then keeps paper honest, what then serves as asset of reserve without lien?

Rumours run wild of a Barrick/Anglogold relationship. Barrick's motives and direction are difficult to comprehend and thus I find it improbable that I would support Barrick.


Anglogold will play a massive role in the future direction of gold and dispite the infinite complexities of gold, Anglogold's next few moves will point clearly to the answer to my simple question.

Does Anglogold support or not support gold in its historical and traditional role?


Dear Mr X,

I am very glad that you have emailed me. One of the best parts of my job, and from which I have leaened a great deal about gold, investment and the company for which I work is just this type of communication.

Perhaps the most direct way I can respond to your question is to offer you my 'formula' for a sound gold market. It goes like this:

1. Gold companies must in the first instance end irresponsible and wealth destroying over production of gold. New mine production in the period 1985
to 2000 rose be a staggering 54% or 900 tonnes PER ANNUM. Much of this was loss making or marginal gold, only supported by hedged prices. AngloGold has done its share. Since 1998 we have closed or sold some 4.3 million
ounces of annual production, of which I would estimate, at least 3,00 million ounces has come outof the market altogether.
2. Producers should hedge responsibly. Our hedging policy is to sell forward UP TO 50% of five years of production. We have never reached that limit. IN fact because of present market circumstances, and because we
think the price is likely to move up, this year we have reduced gold sold forward from nearly 18 million ounces to just over 14 million. Over the next five years 19 million ounces of production are unhedged (and remember
that this year we have sold some 6 million ounces over the five year period.
3. Producers should invest in their product, which in my mind is both investment gold (coins, bars etc) and what I would describe as 'value jewellery' as is available in the East, all 22 and 24 carat, sold by gold content with a re-purchase agreement. If we could rally every major producer around these three objectives our industry will have a great future.

Regards

Bobby


(Thoughts on replies?)

Canuck

http://www.bankstocks.com/ResearchArticle.asp?Article=472New Economy Accounting gets caught. How much more is out there? A snippit:

"Take, for instance, those now-notorious "Special Purpose Entities" (SPEs) that Enron used to accumulate off-balance
sheet liabilities. Berardino complains that in accounting for them, the auditors� hands were tied. "As the rules stand
today," he writes, "sponsoring companies can keep the
assets and liabilities of SPEs off their consolidated financial statements, even though they retain a majority of the related risks and rewards. . . .

Uh, no. Rather, it's time to apply the current rules correctly. In fact, that's what Enron finally did on Nov. 8 (prodded no doubt, by Andersen) when it restated its last four years worth of financials by�you guessed it--consolidating the SPEs onto its balance sheet.



You just gotta know there is a lot more of this accounting going on out there.

The Wisdom of Aristotle (sure miss him)I will never forget Aristotle suggesting I reconsider my investment in BEARX as in his opinion, the markets were very likely to continue inflating with everything else denominated in USD$. I am happy I took his advice.

Very nice of him to personally answer your Email. I wonder what his definition of irresponsible hedging would be?

Argentina sold thier gold and bought Dollars and the Dollar got stronger'so whats the problem?
What they forgot was who they trade with.When you trading partner has a weak currency he has a trade advantage over you.The second part of the problem was when this happened with the old currency ,they could simply devalue enough to get trade back in balance and they still had thier gold to maintain confidence in thier currency.Now when the Dollar gets stronger thier exports dry up .They are at the mercy of the Dollar and U.S. policy.
One should only link currency with ones majority trade partners or maintain your independence with gold.
Gold is Freedom.
South Africa is reducing the labor cost of thier mines by devaluing the Rand.What they should have done was back the Rand with Gold and Attract investment into thier country and lessen thier dependence on the mines.
Both countrys would be better off with gold backing thier currencys.

Today the DOW ripped past 10,000 and NASDAQ blasts through 2,000. And what a better day to accomplish this feat. It was exactly 5 years ago today that Alan Greenspan uttered those two famous words - "IRRATIONAL EXUBERANCE." And what was the DOW then? The DOW was roughly 6,534 when those famous words were spoken. There is no real fundamental support for the current surge in share prices as earnings continue to fall, debt is at record levels and valuations are at extremely absurd levels. Yet the stock markets surge forward on some minor data from a better than expected NAPM services report.

I have 2 words that are not so famous but are equally important when all is said and done - "CORPORATE EARNINGS." Yep, that's right - "CORPORATE EARNINGS." Earnings are still falling. PE valuations are at record highs and rocketing higher. This is a result of both declining earnings and higher share prices. As the old lady in the old Wendy's commercials used to say - "Where's the beef?" Trolls like James Cramer and Larry Kudlow would argue that stocks are a bargain and yet I do not see it. These are the same Trolls that said we would see a recovery last quarter, this quarter, well maybe next year, oh well maybe the second half of next year - so jump in now and buy stocks because it is patriotic and don't miss the rally when it comes.

I think that we still have too many unknowns in this market and a very dismal outlook on "CORPORATE EARNINGS." We now see oil moving higher as now even Russia has joined other non-OPEC oil producers and has agreed to cut production. Even as this winter is getting colder (not as cold as last year), more energy is being used. The economy is tanking and the result is lower petroleum demand. Yet the oil producers are determined to maintain a trading range between $22.00/bbl to $25.00/bbl. These higher prices act as tax that hits the corporate bottom line. I see no fundamental reasoning for a surging stock market yet. A couple more quarters of declining earnings and a few more large additions to the growing "Bone Pile" and we may see the surging stock markets unravel.

- Black Blade

http://biz.yahoo.com/rb/011205/business_economy_argentina_dc_2.html
Snippit:

BUENOS AIRES/WASHINGTON (Reuters) - The International Monetary Fund on Wednesday dashed Argentina's hopes for a much-needed $1.3 billion loan, taking the South American nation closer to committing the biggest sovereign debt default in history.

Black Blade: Today Argentine courts ruled that the limitations on bank withdrawals were unconstitutional. It should also be noted that for the well connected (the wealthy and politicians) the rules did not apply. The Masters still rule over the Serfs.

http://biz.yahoo.com/rf/011205/syd187658_1.html
Snippit:

SYDNEY, Dec 6 (Reuters) - South African miner AngloGold said on Thursday it had withdrawn arrangements to pay higher fees to brokers who rope in acceptances for its offer to acquire Normandy Mining Ltd (Australia:NDY.AX). AngloGold said the decision was made in light of rival bidder Newmont Mining Corp's (NYSE:NEM) application to the Australian Takeovers panel for a restraining order delaying the fee arrangements, and a deferral of Normandy's recommendation on its offer.

Black Blade: The soap opera continues like a bad episode of "Dallas."

http://biz.yahoo.com/apf/011205/cna_financial_cuts_2.html
Insurer CNA Financial, Hit by Claims Linked to Terror Attacks, Cuts1,850 Jobs in Overhaul

Snippit:

CHICAGO (AP) -- CNA Financial Corp., hit hard by insurance claims linked to the World Trade Center attack, announced a restructuring Wednesday that will eliminate 1,850 jobs -- 10 percent of its work force. The nation's second-biggest business insurer said it is restructuring its property/casualty and life insurance operations, discontinuing its variable life and annuity business, consolidating real estate locations and making related job cuts nationwide.

Black Blade: These "Bones" are not insured and are sent off to the "Bone Pile." This is bad for yours truly as I have life insurance with these clowns.

http://biz.yahoo.com/rf/011205/n05257974_1.html
Snippit:

SANTIAGO, Chile, Dec 5 (Reuters) - Chile's state-owned Codelco, the world's No. 1 copper producer, on Wednesday announced a much-anticipated production cutback in a bid to prop up prices for the metal amid weak global demand.

Black Blade: Asarco has also announced that they too will cut production and layoff workers. Not to mention the cut in production of by-product Gold and Silver.

http://dailynews.yahoo.com/h/ap/20011205/tc/agere_jobs_2.html
Snippit:

ALLENTOWN, Pa. (AP) - Agere Systems will cut another 950 jobs, or 7.8 percent of its work force, in New Jersey and Pennsylvania in response to slumping demand for semiconductors, the company said Wednesday.

Black Blade: More nonessential "Bones" cast upon the ever-growing "Bone Pile."

Your last post referred to increasing interest rate volatility...not seen since the 1998 financial crisis. Recall that JPMC is short volatility on $20 trillion in intrest rate derivatives. Who in today's small world of big bankers is NOW willing to take those low volatility trades?...Trillions of dollars worth. The cost of derivatives is set by implied volatility so it will require far more value at risk capital today to cover those trades that were originally acquired during quiescent times. It actually gets better...

JPMC now recalculates their Enron exposure to be $3 billion. Perhaps we should plot the rising number much like grandmothers in Florida do to plot approaching hurricane postions. The last word on the Enron storm seems many weeks in the future.

Mr. Greenspan can't escape this one. Self appointed Congressional "fact finders" are on the loose at Enron...they have the full scent. The body count stands at 21,000 Enron employees and their 401k plans. Those people have NOTHING to lose as such, they are a dangerous force.

The SEC is suddenly speaking about pro forma earnings. The Federal Reserve's spin soldiers are uncharacteristically mute just now. During LTCM the chairman was out front, visible, calling Wall Street conferences, reportedly claiming he had $150 billion to work with.

This time around $150 billion is chump change.

http://biz.yahoo.com/rf/011205/n05185343_2.html
Snippit:

MERRILLVILLE, Ind., Dec 5 (Reuters) - Diversified gas utility NiSource Inc. (NYSE:NI) said on Wednesday it will shut down an Indiana power plant, cutting about 112 jobs, as it streamlines operations amid declining demand for electricity.

Black Blade: This is just one of several dozen recently announced smaller layoffs that gets little attention that is sweeping across the US (and the Globe). The "Bone Pile" keeps growing and consumer confidence keeps falling along with the axes. Again I say get out of debt, get Gold and Silver portfolio insurance, get enough cash for several months expenses, get food stores and dry goods. If anything you will sleep easier and be secure in the knowledge that come what may you have taken an important step toward independence.

http://www.forbes.com/2001/01/30/layoffs.html
And yet a couple little "Piles" of "Bones" added to the growing "Bone Pile." A recovering and robust economy? I think not!

Thanks for sharing your correspondence with Mr Godsell. I found his words less than convincing to be sure. A few thoughts on the situation if I may:
***

Anglosoldout being a healthy corporation, had no reason to engage in hedging, especially to the insane degree they persued.

Hedging utilized by leveraged, streamlined miners to carry cash flow while the POG is down is almost excusable (DROOY). What Anglosoldout was/is doing is far from necessary to supplement 'survival' cash flow.

They have turned producing physical gold into producing IOU notes, restricting gold's intrinsic value through limiting the upside potential. This takes the heart out of gold. They will argue that in doing so, the downside potential has likewise been neutralized. Yes, but now you are not producing a commodity which balances supply demand forces, you are producing denominated debt notes.

Neutralizing potential, in either direction, also removes incentive to be competitive within your market. Pro product bias and building inventive advantages to increase efficient production are lost. In exchange, more inventive banking strategies are found. Just as the heart is taken out of the gold, the heart for mining is also lost.

When these paper exchanges are done on the extravegent scale we see at Anglosoldout it negatively affects the entire market value of gold. All that gold in the ground being bastardized (before ever seeing the light of day) weighs heavily on above ground values. Anglosoldout is nothing less than the enemy of higher POG.

This recent 'conversion' foisted on us with embarassing lack of believability is pure desperation. Years of hedging, under different more favorable conditions, has taken away the heart for mining. It was all too easy to hedge a flatlined POG. They grew to enjoy it and exploit it. In doing so the future was soldout.

Yes unhedged ounces (by the tonnes) are needed to balance out the incredible 40 some percent of gold production hedged forward for 4-5 years. The horrendous misjudgment in excessive hedging is a clear indication of very poor management. As this goes down, and NDY G*dwilling rejects their offer, the CEO will be held responsible.

What we are seeing now may be the first signs of his demise?

Can there even be real savings without real money? I would have to reply with an emphatic no. I believe this concept is the whole crux of the matter.

The terminal flaw in the current arrangement is that real effort, work, genius, goods, life, time, blood, sweat, and tears are ultimately traded everywhere as a matter of state policy, for an easily manipulable fiction, i.e., the Euro, the Yen, and especially the US dollar. Thus, the bulk of theory and calculation developed from prior monetary periods where real savings were stored and exchangeable for real money are of dubious utility because that theory was developed under a system where the unit of measure was a fixed, physical constant, if at least for a time. Money doesn't necessarily have to be gold or silver, though these have been acceptable and well used in the past. Money does have to be something instead of nothing, and preferably something quite tangible and relatively rare, characteristics which enhance the somethingness of money.

Following a period of confusion and oscillation, perhaps short or perhaps long, I believe the current global arrangement will converge on some combination of physical slavery and collapse. Although the initial something takers are a small and privileged group, and they would prefer to keep it that way (excepting for their own human greed and lust of power), sooner or later more and more of the remaining participants in the fiction will realize their error (or at the very least that the system seems to "work" less and less well for them ) and will also see themselves as equally (or more!) deserving of something for nothing. The initial something takers must then respond either by reluctantly adding more participants to their group, further burdening the remaining something producers, or the something takers must further physically coerce some or all of the remaining something producers into continuing as nothing receivers in order to rebalance the system. Eventually, the system becomes all or nearly all something takers (nothing producers). Since human beings cannot, in fact, live on nothing, collapse is inevitable.

Ploys like switching to or adding new fictional moneys (the Euro) may extend the time this takes to play out or it may not. In a way, the Euro introduction would seem to either add more something takers to the mix or move the balance of benefits in their direction. Or perhaps the Euro is merely a desperate effort to keep the game afloat until the oil runs out? In any event, mathematically, morally, and sociologically, the system becomes more and more unstable and untenable, a la 1980's USSR, and terminates in Totalitarianism, collapse, or first one followed by the other.

Galearis & Robot Guy:

In regard to your question about the relationship between the Can$ and the POG...I looked at this a while ago and "eye balled" some Ca$ and POG graphs juxtaposed, and visually it appeared that there was no correlation. But oh, yes...the eye can deceive...

I ran correlation coefficients tonight on the Can$ in US cents, and the POG in US$ from 1972 to 1992. (For anyone interested in statistics, I used SPSS, N=21, df=19, critical value=0.549 @0.01 significance).

I calculated a correlation coefficient of -.75 (A perfect correlation between the 2 variables is -1.0)
This means that yes, there is a significant correlation between the Can$ in US cents and the POG in US$ - as one rises, the other falls. (If they moved in the same direction, i.e. rise and fall together,the value would be +)

What's important to remember however, is that a correlation DOES NOT mean causation - in other words, a rising POG is NOT the cause/reason the CA$ moves lower, or vice versa.

I don't have the POG in Ca$ for that same time period. I'll try to find/calculate it I'll run these again in Ca$ values.

Hope this helps,
Cheers,
Waverider
View Yesterday's Discussion.

I have taken a one-week break to 'suck back and reload'. I spent a little time calculating loses. I am embarrassed to release the number of thousands of dollars I have burnt chasing stocks. Flipping oil stocks, gold stocks even techs and biotechs have severely impacted return. I am not a gambler by nature but for some distorted reason I have taken to this on-line casino and I have paid the price.

I am not in serious financial straits but enough is enough, I have admitted to myself that I am 'no good' at investing. I try to justify my losses by looking at the Nasdaq which lets say for mathematical reasons has been 'halved' but I sense a bit of denial on my part. I should throw every dime into a 'balanced' fund and walk away and cancel all on-line access but I'm not at the 'action' point quite yet.

I have great respect for this forum, I have learned immensely for which I give thanks. I told my wife last night that I was sick and tired of losing money (although I didn't give her a figure; I only told her I was ahead of Nasdaq) and spilled my guts. I told her my biggest fear was being out of the (gold) explosion when it occured. So here I am, afraid to be out and going broke being in.

I have identified the problem, now to a solution.

Thoughts?

Canuck.

http://cbs.marketwatch.com/news/story.asp?guid=%7B5917E62C%2D586E%2D4B97%2DAD9A%2DDDE929EB85E6%7D&siteid=mktw
Snippit:

LONDON (CBS.MW) - Citing constraints from the weak U.S. economy, Dutch bank and insurer ING Group on Thursday set plans to cut 1,600 jobs in its U.S. operations.

Black Blade: More nonessential unproductive "Bones" off to the growing "Bone Pile." Looks to get worse going forward. It is now being reported that costs associated with the September attacks will be much higher due to unexpected costs in cleanup and lost business.

Follow the trail.

Convert disposable income and savings for the long run into physical gold in hand. At least you will have a harder time losing that. I think the premiums now are not much more a hit than broker fees or fund loads.

You will not be leveraged other than the (and I believe this) substantial undervaluation assigned to gold.

Supposedly even the gold stocks will be crushed when the paper chips (or is it asbestos dust) finally settle. I still have faith in the trend toward closing hedges. and hold mostly non-hedged mines; however, I only use captive money for these trades (IRA).

I think that time will prove out physical's value but it will be a tough row to hoe to make it through the drought designed to bring all gold forward to strong hands.

When it trades for a paper price of $96 we will all wonder where. No real gold will be found at those prices...only paper promises.

Simplify. First get debt free. then save nuts for the long winter ahead...there is still time.

Took a profit on Harmony shares yesterday. And some end of year adjustments in oil stocks to counterbalance gains.

http://biz.yahoo.com/rf/011206/l0636752_1.html
Snippit:

Other traders suggested that silver's steadiness could possibly be attributed to the metals arm of U.S. energy trader Enron (NYSE:ENE) unwinding positions before being sold off. "Enron could be a possible cause, but I don't really know. It's feasible, Enron may have had open market positions and got caught in the trap,'' one trader said. Enron's metals trading arm, Enron Metals Ltd, which predominately trades base metals, has had a relatively small business in precious metals since it acquired the precious metals arm of German energy group Metallgesellschaft AG.

In the platinum group metals (PGMs), palladium held firm and edged ever closer to the key $400.00/ounce barrier after soaring on TOCOM overnight as expectations of more supply disruption next year from top producer Russia fuelled the market. Spot palladium was indicated at $375.00/385.00 against $368.00/378.00 at the last close in New York. Russian exports of PGMs have been disrupted by bureaucratic delays in issuing annual export quotas and licenses, triggering anxiety among consumers as the year draws to a close. ``People are perceiving problems with Russia's supply and just positioning themselves accordingly rather than having problems at the beginning of the year,'' one trader said. In the platinum group metals (PGMs), palladium held firm and edged ever closer to the key $400.00/ounce barrier after soaring on TOCOM overnight as expectations of more supply disruption next year from top producer Russia fuelled the market.

Russian exports of PGMs have been disrupted by bureaucratic delays in issuing annual export quotas and licenses, triggering anxiety among consumers as the year draws to a close. ``People are perceiving problems with Russia's supply and just positioning themselves accordingly rather than having problems at the beginning of the year,'' one trader said.


Black Blade: It was rumored that Enron had been dabbling in the PM derivatives markets. Looks possible. Also I got an email from my friend Sergei. He maintains that the Russian PGM stockpiles are depleted. He says that the reports of Russian exports are "greatly exaggerated." He also noted that Norilsk Nickel has "temporarily" shut down some mining operations due to low metals prices. So there it is. It would appear that the Russians are again (or still) short of any significant PGM supply. Look for the TOCOM and NYMEX to default on PGM contracts again. The Japanese TOCOM managers have absolutely no honor and known to cheat investors, and as far as the NYMEX managers are concerned that is a given.

To all who expected to see me in New Orleans. Alas, it was not to be, and I sorely regret that I could not attend. Perhaps there will be another time.

Black Blade's bone pile mounts increasing evidence that Ayn Rand's revolt could be underway. In "Atlas Shrugged", the prime movers revolted against all who fed upon their productivity.

These days the biggest hand to be fed is that of governance. Hmmm.

Prophesy so compelling

Good morning Canuck,

Your post reminded me of myself when you say, "I have admitted to myself that I am 'no good' at investing." I once lost a lot of money in gold stocks, oil stocks (no biotechs, though...). In fact, your whole post sounds strangely like an episode in my life. And I bet that there are not too few others on these forums who could say the same.

Other than commiserating, what can anyone offer of practical use? Most of it would be a mix of personal opinion, experience, and some conclusion. Much of this will sound right when it is offered, but it will also conflict with a bunch of other stuff that also sounds right. So at the end of the day, you have to go with what sets best with your comprehension of life at that moment. You and I will continue to make mistakes, but what will separate you or I from the fool will be an earnest quest to learn from them, and improve our decisions down the road. And "as iron sharpens iron, so one man sharpens another," hopefully the words of many diverse individuals here will sharpen us as much as they sometimes can confuse us.

Without wishing to sound trite, I would offer that the general mantra of this site, "buy physical gold," is the most prudent way to allocate your savings. How much? "As much as your understanding allows," is what FOA said, and with this I concur. You know all the reasons. Equities, debt, derivatives? If you do not have the instincts of the trader/speculator, you will probably always lose. I gathered you were trading, and not making long term investments because of your term "flipping."

Many think they have this ability, but their track record speaks otherwise. What they have is the fascination with the hunt, not the talent for hunting. Unless you have the gift to discern the movements of the beast, and the will to act decisively, you will lose. Two people can analyze the same information, and even come to the same mental conclusions. One will take action, the other might take action, and ten minutes later. The one will win, the other will most likely lose.

Case in point. I said to myself as ENE was in its death spiral, "you know, this is too big to fail, 'they' will not let it happen. Somehow it will be bailed out, and even if it isn't there will be a time lag until the final pronouncement of death. Good trading opportunity. I have quite a few thousand available. All I have to do is click the mouse a couple times, and probably turn around a good profit in less than a week." Was I right in this assessment? YOU BET!! Did I act? No. What if I get in today? Too late, it'll probably tank, or languish. Or worse, it'll drop just a bit, and begin a slow two-steps-backward, one-step-forward descent, and I'll pray for it to just break even, and swear to never do this again, and lose sleep... and you know the rest... I don't have the chemistry for trading. Investing? True investing? You have to judge this for yourself. I am not disposed to equities right now because of lot of reasons, all have been beaten to death here in the past.

In my very humble opinion, I will say that a very thorough read of the entire Another/FOA archives will give you such abundant food for thought, that, while perhaps not having all your questions answered, will strengthen you enough to feel confident in addressing them.

I say a "very thorough" read because I know that when reading this material one will come across tough spots, and after spending a few moments, say, "well I pretty much know what they're saying," and move on. The large amount of material, and the interesting nature of what these gentlemen say, causes one to keep going just to keep up. If this should apply to you, I cannot but recommend taking the real time, and real effort to pursue what they say until the light goes on and you "get it."

I don't mean that you will nor must agree with all that they say, but what they offer is truly quite profound. Personally, I subscribe to their line of thinking as it sets best with my apprehension of things in life thus far.

If anyone else should respond to your post, they may offer something diametrically opposite to this, and they may sound right. Perhaps they are right, perhaps we are all wrong. In the spirit of Keynes, we are all dead in the long run, but in the anti-spirit of Keynes, the safest holding of your excess wealth is physical gold in hand. Lay up your treasures in Heaven, but keep a prudent store of your wealth for your earthly journey...

Sorry if I rambled, but I hope something here is of use...

Best regards,
miner

What strikes me about these markets is the emotional volatility. The slightest hint of a movement can cause the entire herd to change direction. Look at bonds yesterday! The second time in a month this happened. There is lots of hot money out there looking for a return.

I think Doug Noland has some very good points. Our money is based on credit and it is the poor quality of this credit that is the major threat to our financial system today. I have no confidence in the new economy insurance instruments that are supposed to make secure silk purses out of poor credit sows ears. Even money market funds are based on the credit quality of Joe six-pack's mortgage, and he just bought another SUV on credit. What to do? My plan over the last year and more has been to steadily turn paper into gold and wait for a better day.

The herd has stampeded towards what they think is that sunny day when they can all retire early and rich. I wish it were likely. But storm clouds are forming and time is getting short. It's not a matter of getting wealthy but of surviving the coming storm, both financial and physical. Ramadan ends in about a week and I don't believe the terrorists are through. Dirty nuclear devices (not bombs) are believed to be in radical Islamic hands and could easily be in any number of western cities. I hope not, but I expect and am prepared for the worst should something like this happen. This is not the time to be counting paper profits and planning early retirements. IMO most early retirements in the next few years will not be voluntary.

Thank-you gentlemn for following up on my post regarding CAN$ and POG corelation. Despite what the past has indicated, please don't ruin my dream of buying gold cheaper. Here a couple of gentlemen will slap me in the face with the reality of the past and wake me out of a lucid dream state. I CAN STILL HOPE CAN'T I??? ;) All in good humour gentlemen, thank you for your input.

I am at the same place you are my friend. I have made a few 'educated' guess investments since the beginning of Jan '00 and needless to say, I didn't choose an opportune time to get into it. I have had one or two good hits to keep me floating but I also know the feeling all too well. I have actually done something very very risky, but after reading an article by a very wealthy man I was convinced that I am not the only person who has tried this. I have placed all of my eggs in one basket, and yes it is a gold stock. After some reasearch on the company I have personally concluded that this stock will go up and that it will return to me a comfortable sum. No more diversification for me, too much juggling. I will sit on my paper, perhaps buy a little physical to play with and look at, and wait for my magic bean sprout to take. What did the wealthy man say?? Do exactly what everyone tells you not to do.

Your brutal honesty is very refreshing and much admired. It has triggered quite a bit of interest from fellow PM sufferers. Allow me to join the purge.

Each year I spend thousands on life, home, business, car and even horse insurance. Money that I never see again. Should I feel remorse over this? NO! I am much more upset if I buy a box of cereal without a coupon which was left at home.

My 'protection investments' in PM's are as follows: 40% in physical, split 50/50 between gold and silver, 40% in mining stocks which I move around (without much sucess) depending on numerous indicators including company reports, market outlooks, politics, societal and health concerns, economies, environmental trends etc. etc. The 20% left is spent, and I do mean 'spent', on call options.

The physical and stocks are holding their own. The options I classify as paper insurance. Money to be spent and never seen again (like insurance premiums)....here is where my guilt surfaces. As an option trader am I contributing to the paper bastardization of gold and silver? Perhaps. I have not yet fully evolved into that 'physical only' holder that most folks become after years and years and years in this game.

Are 'physical only' holders in sole occupation of the precious metals high ground? Perhaps, but I like to compare this with salvation (excuse this detour, but knowing the strong sentiment for physical here I better explain).

Once an understanding of fiat deception is gained you are then 'saved'. 'Sanctification' (the moving towards physical only holdings) if you will, ocurrs at each one's individual pace. While all are in fact saved, old temptations (paper vehicles) still have some power over them during the sactification process. Obviously once in 'physical only' the downside risk (Hell) becomes zero if you have gained an understanding of real intrinsic value versus man's imposed value.

Sorry for that detour. Not really a perfect example as it is difficult to square any 'money', no matter how pure, with salvation. Not sure I'll ever reach physical only 'understanding'. Please, no prayers chanting for me. ;-)

Back to protection investing. Given the enormous uncertainty of economies, world affairs, currencies, etc etc. it is nothing less than negligent (assuming you are 'saved', having knowledge of the truth) to proceed through life without these PM protective measures.

So, I look at this as a devinly inspired insurance of sorts that has a real cost yet must be implemented in order to live with ones conscience. Hang in there Canuck, we are all there with you.

gotta run

Special Townhall Report
Stage Set for GOLD Rally!!

Kevin DeMeritt

December 5, 2001

Five Ways the Euro Could Weaken the Dollar

You've probably heard the saying: "when it comes to your breakfast, the chicken was involved (eggs) . . . but the pig was committed (bacon)." On January 1st, 2002, twelve European nations will understand that difference only too well. That's "E-Day," when Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain will start bidding a fond farewell to their respective currencies and commit to going fully "online" with the Euro, Europe's single common currency, by February 28, 2002 at the latest.

Although the Euro became the common currency for eleven of these nations back in 1999 (that is, the participating currencies were fixed in value against one another and against the Euro), the members were still allowed a foot in the door with the retention of their own paper money and coins. Now, however, that "foot" gets permanently removed and the door will forever shut on such historic currencies as the French Franc, and the Italian Lira.

It will rank as the single biggest monetary event in history. What happens next, though, may severely weaken the "world's" dominant currency, the Dollar.

Surviving its Challenges to Challenge the Dollar

To be sure, the Euro has faced steep challenges. For example, there is no precedent of a large geographical area having a single currency that was not also a single state. The logistics of the changeover are mindboggling, too. All in all, though, it appears that the nations involved will take this enormous leap of faith on the first of the year . . . and that's what has holders of Dollar-denominated assets�and currencies like the British Pound that are closely tied to the Dollar�concerned. Here are five reasons why the Euro could send the Dollar into a tailspin:

1. Designed to Out-Dollar the Dollar.

As Jill Considine, president of the New York Clearinghouse Association, which handles most US currency transactions says, "Its not just another currency�There's going to be a new, competitive landscape." Italian Prime Minister Romano Prodi put it more bluntly, "We are building a competitor to the Dollar, there is no doubt about that." This, of course, was the intent of the Euro�succeeding the Dollar as the world's premier currency was part of the original "mission statement" of it creators.

2. Greater than US Economic Strength.

The economic might represented by the combination of Euro nations is greater than the US. That's both in terms of gross domestic product and world trade. The total value of the EMU countries' stocks, bonds (both public and corporate), and bank lending amounts to US$23 trillion . . . $3 trillion higher than the US.

The Financial Times estimates that up to $1 trillion in international investment may quickly shift from US Dollars to Euros, sending the Dollar into a tailspin. It follows that as more and more international trade is conducted in Euros, the demand for Dollars will decline to that extent. Along with the Dollar's strength and prestige.

3. A More Secure Central Bank.

This all-powerful, supranational European Central Bank will act like our own Federal Reserve, but with one important difference: free of the political meddling the Fed endures, it will be far more independent and better equipped to push the strength of its currency. Managing it will be monetary hardliners headquartered in Frankfurt who have been raised on the strength of the Deutsche Mark. The member nations boast an average 25 percent gold reserve. With this kind of strength, management and independence, the world's financial markets will probably see the Euro as a more secure storehouse of wealth than one backed by the only partially independent Fed. The bottom line? The "European Fed" will further add to the growing number of defections to the Euro.

4. The New Reserve Currency?

Since the Dollar has been the base of world trade, foreign banks have kept it in reserve. For example, the Japanese central bank holds an all-time record $350 billion Dollar reserve. As the Euro comes online just how much of that $350 billion will be traded for Euros? Now, add in all the other countries who might trade Dollars for Euros and the number becomes astronomical.

5. Changing Perception of the World's Superpower.

Never-before-seen terrorist events in America, a looming US recession, and a poor Dollar performance against the Euro in 2001 all set the stage for the January 1st changeover. With the twelve European nations committing to the Euro at this critical juncture, the world may begin seeing America as a suddenly vulnerable superpower. A loss of confidence in the Dollar may ensue. And confidence in the Euro may accelerate. That's especially so should terrorism escalate in the US. A report by the HSBC Group of London concerning the declining Dollar stated, "The risk of a disorderly meltdown scenario is increasing, raising significant dangers for the global economy."

Is Your Portfolio Tied to a Weakening Dollar?

So where should the wise investor put his money now that the countdown to a falling Dollar is nearing zero? Probably not Euros, that's for sure. While Investing in the Euro may seem a smart strategy in 2002, the volatility of this brand new and undeveloped market may simply be impossible to handle. There's too much currency risk, too much uncertainty connected with Europe's single common currency just yet. Until this market matures, you could be whipsawed out of any monies you invest here.

Instead, investors should follow the example set by the Austrian Central Bank and other world institutions. Rather than selling gold in expectation of 2002, the Austrian Central Bank�its nation being among the twelve Euro nations�recently bought $1 billion in gold. This "currency neutral" asset exists outside the world of currency volatility and is a stable, storehouse of value. Which is why the Euro nations are busily building their gold reserves.

Like these institutions, you, too, should up your portfolio's percentage of the golden metal. A falling Dollar is serious business. You can prepare for it the way people have preserved their spending power since time immemorial. That means reconfiguring your portfolio to include 15 percent in gold. This is a prudent move in any economy because gold is "negatively correlated" to Dollar-denominated stocks, bonds, and funds. That means not only do gold coins boast a superior track record to equities, gold often moves contrary to the direction of these paper assets and the Dollar, providing you with a solid diversification. It's a smart move. Otherwise, you might just wake up to find that your portfolio was tied way too tightly to a falling US Dollar.

posts and commentsApologies for my lack of posts yesterday. I had some problems logging on...

First: across the months lease rates for silver have jumped enormously this morning as additional signs of unhealthy market imbalances; one is under the impression that shortness of metal supply is becoming more widespread and mainstream savvy.

Also, news about India and disquisition of CB silver bullion reserves have not yet been reported on this forum. The Indian government is apparently considering the domestic sale of some 32 m. o. of the metal to its own people. I consider this some verification of the measure of concern the Indian government has over deepening currency worries. The silver would soak up rupees, not dollars. It is amazing how quiet everyone out there has been about this... The financial sector would seem to have missed a story with deep, deep spin potential.

Canuck: fascinating conversation with Mr. Godsell. He praises you and thanks individuals like you for improving his knowledge about his industry and then proceeds to politely ignore/dismiss your information about the market fundamentals from your perspective. Is he being disingenuous? Nevertheless, he did spend some time on his essay from what must be a busy schedule for him (especially now) and accolades are deserving.

Waverider: Thank you for your help in the CAN$/POG. I was going to do a similar study (eyeball/graph) work up myself. In the back of my mind has festered the notion that exchange rates are influenced (manipulated) in some way because of asset bases - especially gold. Those countries that are rich in the metal, S.A., Canada, have suffered increasing problems with their currencies that would have little to do with the fundamentals associated with the printing press and easy credit. Canada has not inflated nearly as much as others, but as you say there may be more factors at play here than just POG. However, also at the back of my mind was the notion that these currency fluctuation would infer a quasi-gold price stability. As the POG declined in USD while our own dollar declined in exchange rate purchasing power, the CAN$POG has remained MORE neutral.
Subjective impressions only on our part.

Best regards,

G.

Thank you for your post, it shed much new light on my understanding of the impact this change over could have.

http://www.321gold.com/snippet:
************************
Thirdly and perhaps most importantly, the conversion of all the European national currencies into euro notes and coins begins on 1st January 2002 and must be complete by 28th February 2002. Euro-bulls no doubt believe that once the euro has a physical presence its value relative to the Dollar will rise, but that is not how these things usually go. Not everyone who owns German Marks and French Francs will be happy to exchange them for euros. In fact, some of the existing holders of Marks and Francs will prefer the perceived safety of an international currency that has been around for longer than 15 minutes. The forced conversion to euros may therefore give the demand for US Dollars a substantial boost during the first quarter of next year. Note that this is potentially one time when a weak euro will not go hand-in-hand with a weak gold price since a flight from the euro would probably boost both Dollar demand and gold demand.
**********
Excellent read.

G.

I know that story only too well. I have a friend who burned through over a million dollars in the last two years. She is sick with herself. She got caught up in the online stock market casino like a drug. I tried to convince her of what what happening to her, but she couldn't get past the excitement. Now she buys coins and real estate.
For what it is worth, my suggestion is that everytime you want to invest, buy some gold coins and give them to your wife to put away for you. It will add up fast, and you will be a hero to her. I have no investments except for my house and gold and silver coins. Chancy? Who cares. I have my investments in my possession. That is the most important thing to me in these days where analysts and investment brokers are the lowest of the low.

WoesWe all have them, old son. In fact, as most of us on this forum have discovered, gold and silver investments in terms of dollars out of the cache for our daily needs have not been resounding successes either. But at least with investing in the metal, one KNOWS that one is not the riding a buffalo over a cliff with the rest of the herd.

And our time has to come! At the risk of projecting a little here, a lot of the disquiet comes from feelings of helplessness, frustration and betrayal. Chicken-Licken (sp?)and gold bugs will be right in the end. The sky is falling; it may be invisible to most but it will hurt nevertheless when it lands. That's why they invented precious metals.

Regards,

G.

The name of the game is to take as much effert and energy from people possable (Money). What better plan. Get the hole world to save a valueless asset in dollars and then crash it on them. Also take away their ablitlity to hedge themselfes in a dollar crash by exploding the derivitives markets with no intention of letting the derivitives function. DEFAULT. We did it to them. Game seems fair to me. Sell all call options people want, they wont take no delivery on an option, especially when the price always falls away from them, they will just buy another one when the other fails. Then the worst nightmare happens. Folks who were betting on golds price to rise finally are right only as their market fails them. They are left holding nothing in gold. And the game is so much more effective for concentrating others efforts into your hands. They dont want to share their wealth. I cut my option investing out after the Placer Dome anouncement spike retreat. If it is something I can kick myself over I had better stay away. Just like buying another option. If you feel the desire that bad, at least straddle the things. You have a chance. Straddles are cheaper then they apear. How would you be sitting if all your leveraged option bets were made as straddles? Any profits go towards physical. Cause you can bet we will face another attack, once the Euro is out. When that happens gold will be set free. A dirty nuke is all it takes. Simple as that. Way to much power will be on the line, for that to not happen.

Note: Farfel contacted me today to reproduce the letter below. I believe his response to Mr. Godsell's claims, as posted by Chris Powell here the other day, worth noting. Farfel's opinions do not necessarily reflect those of the management.


Dear Mr. Goldsell:

I just read your formula for a sound gold market. Once again, I cannot
help but be amazed at the preposterous and overtly disingenuous
recommendations you make. The tragic aspect of the matter is
that if a person like yourself in a position of authority repeatedly
tells the world that the sun is purple, then eventually people begin to
believe that it is, indeed, purple.

1) You complain that gold mining companies produced too much gold over
the last fifteen years. Yet it is generally acknowledged that the gold
industry's global annual production is insufficient to meet annual
global consumer demand - - as such, gold scrap suppliers and Central
banks have been compelled since 1996 to sell huge quantities of gold
into the marketplace in order to make up the deficit. They have done
so at risk to their various fiat paper currencies, often rendering them
as no more than debt instruments backed by the good faith of government
rather than any intrinsic value assets.

Furthermore, it is generally acknowledged that bullion banks hold at
least a 6000 ton net short gold position (aggregated during the
longstanding gold carry trade) such that it is necessary to maximize
gold production in order to allow those enormous gold short positions to
be covered over time.

So if anything, today there is a tremendous global gold mining industry
production shortage that can only be made up by gold scrap sales in
combination with Central bank sales plus irrationally large multi-year
forward sales by the gold mining industry. Without such extraordinary
price suppression efforts, gold would trade at a much higher price
today.

2) Your 50% annual gold production hedge covering a five year span is
far too aggressive (I would actually describe it as overtly reckless)
and acts as a suppressant to the gold price. If you really want to see
the gold price rise (and it is transparently obvious you do not), then
you (and the entire gold industry) would aggressively lobby the CFTC
and all other national gold market regulators to limit forward sales of gold to NO more than one year's production.
That is the norm for most commodities yet for some reason gold (and
silver) production can be super-hedged while other commodities cannot.
Of course, we know why: gold is viewed by most countries as de facto
money, the asset of last resort, a veritable and chronic threat to US
dollar hegemony in the world currency system. This remains true even
as you and other super-hedged gold producers attempt to change that
perception and transform gold into a non-essential metal with no higher
purpose than the frivolous adornment of the human body.

3) You have lobbied other gold producers to focus their efforts in
ramping up gold jewelry demand while completely ignoring a campaign to
promote gold as a contrarian asset of choice. That fact is not
surprising since your actions on behalf of Anglogold are, in reality,
actions against your own shareholders in favor of your heavily short
bullion bank counterparties.

The proof is in the pudding as, despite Anglogold's past profits, its
huge gold short position in the form of over aggressive hedges has
contributed to the decline of the gold price and the resultant
depreciation of the entire value of your gold reserves. Hence the
inevitable and continuing long term decline in your stock price since
the value of a gold mining company's aggregate reserves is ultimately a
most significant factor today in determining stock price.

Mr. Goldsell, the best remedy for the malaise affecting the gold
industry is your summary removal from office (along with other
super-hedgers) who act in concert with bullion bank counterparties and
anti-gold Western central banks in order to suppress the gold price and
diminsh the value of the entire gold industry's aggregate reserves.
That these actions are undertaken to protect the US Dollar is neither an

act of pro-American allegiance nor the preservation of a "happy" global
economic status quo; rather it is a disdainful subversion of the free
market capitalist system; a perpetuation of market moral hazard; and an
overt display of cronyism designed to protect those gold short market
associates who have painted themselves into a corner with no immediate
avenue of escape.

Please cease your unmitigated bullshit once and for all. Today's gold
investors have slowly but surely grown wise to your inveterate
obfuscations; your unyielding double-speak; and your insufferable
duplicity.

Please relinquish your office once and for all. If not, hopefully, your
shareholders will revolt sooner than later and send you to pasture where
you belong.


Very Truly,
Farfel

Our money is based on the credit quality of Joe six-pack's credit quality of his credit card or bank mortgage. It is also the ability for bond, stock and currency manipulators and speculators who act in collusion with one another to vampire investors. An example of this is Enron. Another one is Barrick. Barrick Gold does not own the "Pasmua-Lama" gold project in Chile and that is its main listed holdings. Barrick Gold like Enron is a finance company. It makes its so called profits with paper trading. Like Enron the profits made are shown and loses are hidden. People have to realize that gold like the fiat money deposits are now used as reserves by banks to make new loans. There is 3 kinds of gold, 1= commodity gold worth about $275 2= deep storage gold worth very little because of the cost to get it out of the ground 3= credit creation gold traded between central banks worth many times commodity gold. The reserve requirements on the 11 central banks that make up the FED is 3% which goes into 100 33 times, times $275 commodity gold price= $9,000. No# is based on information which has got me into trouble many times. Banks like Barrick will kill individuals who bring forth information that is not in their interest. What do you think will happen to Barrick stock if they were to anounce that they had defrauded stockholders on the Pascua-Lama ownership. What do you think will happen to bank deposits if banks anounced there is no backing for those deposits.

What motive has Mr. Godsell in reversing his tack on hedging at this point in time? Does he seek to woo Normandy shareholder's to believe AU will serve their interests any better than Newmont? Or, has he glimpsed the future where an uncontained run on paper gold results in ownership of his company being turned over to the bullion bankers in a liquidation of assets as they have claim to 50%/40% of his reserves yet to be mined.

Maybe his future delivery contracts only pay out cash infusions monthly and he didn't receive his last check from Uncle JPM?

RE: Farfel's opinionsMike, why not? Farfel's letter sums it up nicely as usual. For myself, that is my opinion.

Hello David. I believe this gentleman works for Lear Financial? If so then he is the person who reported that the CB of Austria recently purchased $US 1 BIllion of AU bullion. BTW, a mutual (Austrian) acquaintance who I have also had the great pleasure of meeting personally believes this report to be true. Salutations friend......CM

"All that part of creation that lies within our observation is liable to change. Even mighty states and kingdoms are not exempted. If we look into history, we shall find some nations rising from contemptible beginnings and spreading their influence, until the whole globe is subjected to their ways. When they have reached the summit of grandeur, some minute and unsuspected cause commonly affects their ruin, and the empire of the world is transferred to some other place. Immortal Rome was at first an insignificant village, inhabited only by a few abandoned ruffians, but by degrees it rose to stupendous height, and excelled in arts and arms all the nations that preceded it. But the demolition of Carthage (what one should think should have established it in supreme dominion) by removing all danger, suffered it to sink into debauchery, and made it at length an easy prey to Barbarians".

John Adams
Letter to Nathan Webb
October 12, 1755

Canuck: I stand alongside all timeless (for a reason) wisdom. I hope you do likewise.

Rarely post, but I just had to let you know you're not alone. You're even one step ahead of me since at least you made the realization yourself.

My "awakening" was when my wife went to the "bone pile" last week. For years she has worked a heck of a lot harder (physical vs my mental job) for a heck of a lot less. For years I've taken a portion of "my" income and justified my speculation mentally with "we can afford it". Really what I have done is gambled away her hard earned money in what amouts to a rigged crap game. She thinks I've been investing her pay for retirement and now feels that since she's lost her job, our retirement is in jeopardy. I still haven't told her where "her" income has gone.

My partial salvation has been this forum. You see, I've always been a contrarian and my occupation requires I stay on top of financial issues. Since our beloved politicians and FED have this one totally screwed up, I started lurking, reading, etc., and started buying physical (thanks to FOA) three months ago.

Like you, I'm afraid I won't have enough when the time comes, (it's coming faster than we think because I'm not ready), but what I have personally done is cut out all of "my", and I do mean "my" extra spending on anything other than necessities (I even pack my own lunch, quit smoking, drinking, etc. and its tough) and buy physical and give it to my wife to keep. It goes in her safe deposit box and I can't get to it.

Hang in there ye who sounds like in same boat as me. Paper crosses can be heavy.

I don't mean this in a condecending way, but you should never play if you can't afford to lose. Everything is a gamble, walking down the street is a gamble. Were you a loser for walking down the street and stubbing your toe? Maybe Woody Allen might think so. I don't. Life is a complex series of decisions. You made some decisions. Live with them, learn and move on. Is someone a gambler who is farming even though he knows the gov't is actively working against him? Was that a stupid decision he made 40 years ago? Will buying $10k worth of gold/silver bullion in 2001 in piece of s$^%$^$t Canadian currency be viewed as a gamble in 30 years? That is the kind of 'gamble' I will take EVERY TIME.

Michael, thanks for posting Farfel's letter. I have always enjoyed his written thoughts and can picture his blood presure rising as he typed it. Well written based on sound fundamental facts and then flavored with his strong sentiment. Thanks Farfel!
*******
Canuck and all who answered. In all probability, we all have a great deal in common, in that, as far as investments go, we have all enjoyed gains and suffered loses. Myself, I'm still somewhere between completely broke and outrageously wealthy. Still working, paying the monthly bills and holding both paper bets and physical silver.
May I offer a favorite, once more

Don't put your hope in ungodly men, or
Be a slave to what somebody else believes.
If you need somebody you can trust,
Trust yourself.
---Bob Dylan

Please ensure that you step on the gold price tommorrow so that it closes at $272 and Henri can win the little Philharmonic.

Thanks in advance
Henri

There are two criteria for judging a man: words and actions. Think about which one is a more accurate measuring stick of character judgments concerning morality and integrity. A mans words may be used for an initial sizing up of his character by others, or for him to reveal beliefs and opinions he holds dear to another. His words can clarify, obfuscate, lie about, reveal, and portend many things about a person , and can be used for a myriad of reasons known only to himself. They form a �blanket� in which a person wraps themselves, good or bad, announcing their character traits to the world around them. And in a world driven by the �perception is reality� mantra, they hold the highest esteem , amongst many, when spoken publicly by someone of �repute�. Not I.
The problem with words is at some point they become just that, words. They must be followed with the physical form of character, and that is action. There is a vast gulf between men of words and men of action, my friends. A gulf I fear that is so vast, most of society cannot or will not see across it. They are content to listen to the words of others and accept them at face value as they are being trained to do. Not I.
The true man of action has no need for many words, really. His �sentences� are constantly spoken for him, manifested by his work and actions. The individual of integrity and character is constantly broadcasting his �beliefs� by actions that reflect them. The man who �says one thing and does another� formerly garnered little respect amongst his peers, hence the saying, and yet people are becoming willing to accept that trait in insidious ways , in every aspect of their lives, without examining the consequences. Not I.
I cannot be swayed by words that are not followed by actions. The ratio of words to action in the modern world is alarming. As long as you are talking you are perceived to be �acting�. Nothing could be further from the truth. It is inversely proportional. �Perception is reality� is for the most morally bankrupt level of humanity, a segment that has lost the ability to take a moral or ethical stand on anything, let alone act on it. My friends, "Reality is Reality".

My diatribes about Alan Greenspan stem from my observance of his double standards on ethics, the individual, altruism, and government . His statements from the 60's on gold and the welfare state should be read before every day in class, or football games, or the opening of a Congressional session. Anyone knows that central control and individual honor and integrity cannot survive in the same body or mind without massive dosages of self -delusion. But then, your doing �God's work�, aren't you Alan. His actions have shown him to be nothing more than a �bag man� for interests that appear to be �Up with people� on the surface, but completely falacious when juxtaposed against his former so called �beliefs� in the individual and freedom from gov't. The chairman has NEVER made a clear statement that ALL can understand outlining the destruction of the US dollar and the gov't continuing role in it's purposeful debasement. The weak argument that �no one would listen� is laughable. EVERYONE would listen. THAT is why he doesn't say it. The corruption and moral decay of the last 10 years have never been witnessed in America before, and if the saying that �you get what you deserve� is correct, then Alan Greenspan is the perfect man for the job. Almost pathologically afraid of saying anything that could upset his political masters, their �bitch� mumbled here and there about �irrational exuberance� �productivity increases� and a whole raft of what he and everyone else knows is UTTER NONSENSE. The name of the game he plays is �Goebell-esque� crowd delusion. Doing everything and anything possible to defend the massed idiots of world finance by subversion is in no way shape or form a reason to garner respect for anyone. It is reason only for utter contempt. When perusing the minutes of any number of recorded meetings of the Chairman you always get a sense that they are trying desperately to �subvert� the laws of America, in order to �save� someone from �something� These minutes are brushed off like everything else today, with a ho hum oh well someone has to attitude that I cannot fathom.. The fact that �the most powerful banker� in the world has not, in 13 years ,and will not order a public audit of America's gold reserves is revealing to an incredible degree. Obviously the Emporer has no clothes. By his actions, the mental disease of altruism and self-delusional have become more and more apparent, like watching a person slowly dying of Lou Gerhig's disease. Keep doing �God's work� Alan, I'm sure your place among the �chosen few� is assured. You are a sickening man. Maybe to offset all your delusional subversions you could write a new short treatise on gold and the welfare state and read it on national television when you retire. It would make a nice bookend to your carreer. I won't hold my breath.

Sorry guys but it's going to take a nuclear war before the
price of gold rises. As long as they print money and keep the media at bay from telling the truth... its a "free for all" until Europe steps in or ...... a nuclear war. cheers for now

Brilliant addendum to the "deflation versus hyperinflation" debate.
21 years (1980) of interest rates and currencies gambling, dwarfing the stockmarkets 10 to 20 times in volume, will and must result in taking *Gold* back to where it belongs.
Be it a goldstandard mutant (Fekete) or free physical gold (FOA).

The zero-rate trap is the great finale. After runaway inflation of the eighties, the concerted action(s) on bringing those high IRs down, was the only tool left to add extension time on the prosperity miracle. Fekete explains what this did to the evolution of total debt. Irredeemable debt (and currency)! Interest rates have only one way to go from zero : up ! And the price-inflation that has been capped for the past 20 years, must come out of its cave(s).

Rising IRs, will have a *devastating* effect, as never before.

Keynes theory has been applicated for the simple reason that a majority within the collectivity can't possibly be, or ever become Gold related. Gold's discipline isn't applicable on western (political) democracies (?)
They can't adjust to the *natural* rithmes and cycles of contraction and expansion. This relentless greed has a price. A very high price.

Controlled Re-inflating is out of the question now. That's why zero rates are achieved in the first place. Japan the US and even Europ, have no alternative(s) left, but to keep IRs as low as possible for as long as possible. With the consequence of making things worse in the elapsing time.

Wednesday's IBD, reporting Tuesday's closing numbers lists the December CBOT contract as having gained 6.90 cents while the Feb. contract lost 5.40, April and June lost 7.40 and August lost 7.20 cents.
The same day's trading (Tuesday last) on the larger Comex exchange saw the spot month and all futures down 7.20 cents with only three exceptions, two months at 7.30 and one at 7.40.
I don't know if this is a reflection of the very thinly traded CBOT silver or if it is an omen of coming events. I have a suspicion that we will see the paper silver market in severe backwardation before the end of year 2002. There are trading positions designed to take advantage of the spot price exceeding the futures quote.
I have grown very attached to my little stash of physical holdings and will not sell unless forced to but, for those holding physical with the intention of dishoarding at higher prices, knowledge and awareness of this backwardation phenomenon might offer clues as to just when to sell. It would probably be sometime during the transition back from a state of backwardation to normal contango. However, that's about as far as I dare go as I have no more knowledge or experience here, just supposins.
But, signs of or the initial beginnings of backwardation may be interpreted, like smoke belching from the top of a volcano, as a warning of shortages in the spot and immediate futures markets.
Galearis- I like that image of riding a buffalo over a cliff with the rest of the herd. I did some work for a fellow who ordered silver Buffalo coins, immediately after receiving the advertisement literature from the mint, only to have his payment returned- sorry, sold out!
*****
USAGOLD, Michael, what do you see/hear of the availability of silver??? Thanks
Rich

http://www.washingtonpost.com/wp-dyn/articles/A58396-2001Dec4.html"The American economy has officially entered what promises to be the worst recession since the early 1980s and, conceivably, the worst since World War II. But you'd hardly know from the media, which have treated the economic story as a sideshow. To take one example: When the National Bureau of Economic Research -- the academic group that designates business cycles -- declared the recession last week, the New York Times didn't even put the story on Page 1...."

snip

"We're just at the start of the consumption side of the recession," says economist John Makin of the American Enterprise Institute. There's a new worry. Most post-World War II recessions began with declining consumption. By contrast, this one started with lower corporate investment: the result of excess spending on the Internet and communications networks. Consumer buying kept rising -- though at a slower pace -- and sustained overall growth. If consumers now retreat, the recession will deepen.

Just why Wall Street dismisses these dangers isn't clear. One possibility is self-interest. "The stock market touts refuse to stop hyping stocks," says Makin. A zippier market means more trading, more profits and bigger bonuses. It's also possible that average investors -- professional money managers and ordinary people -- remain hypnotized by the market. The "bubble" has burst, and the long-term trend is up. Buy now...."
*****

Well the pounce on the Enron bounce has subsided. Down 28% today. Who were those people? Were they serious in thinking that a declared bankrupt company would offer value of some sort? Or were they playing into the herd mentality? I think the latter. It's a sick, sick state of mind the Stock market has degenerated into. Hypesters driving the herd and insiders preying on them. This Enron action the last few days speaks volumes about what passes for 'investing'.

Similar to piling more sandbags on the dike even though you are certain the flood will eventually break through. You know also that restraining the waters now will only (must) enhanse the coming flood damage.
Save today by sacrificing tomorrow?
Who will break the dam now? Similar to wondering which of my children would have the ability to end my life if it consisted of only constant pain and I were not able to pull the plug? My wife used to work as a home health aid, often comforting those beyond healing. I hope I have Hemingway's guts when the time comes, if the situation reguires. Is our economy terminally ill? Is Alan Greenspan treating it in the hopes of recovery or just easing it along into the hereafter?
As usual, more questions than answers.
Rich

You know what, Dark horse, I've been thinking what you've been thinking.

We're due for a contest and it would be productive to tap the collective wisdom around this noble
Table. I agree.

But how to break the psychic dam and get the ideas to flow?

Nothing like a challenge to match the quality of the poster and lurkers present. This idea came to
me while having
lunch today and browsing over the latest GRANT�S Interest Rate Observer. It seems that one of
James Grant's
friends -- a fellow named Paul L. Kasreil who does economic research for Northern Trust Co. --
posed a most
far-reaching question. One that is making the rounds among people who talk markets as well as
those who enjoy the
same as a worthy pre-occupation.

The question is this:

------------------------------------ Alan Greenspan: Maestro or Music Man? ----------------------------

The book, "Maestro", was the subject of a great deal of conversation here when it came out
several months ago and
opinion was pretty much divided on it -- some thought it characterized a master at the peak of his
powers. Others
saw it as a whitewash of a Fed chairman who simply injected liquidity willy-nilly at a time when
the world had no
where to turn but the dollar. Some called him genius. Others called him lucky. Still others called
him confused --
pumping money into the system at one turn and deriding "irrational exuberance" the next.

But Maestro or Music Man?? Now that's intriguing, and very much worth a contest.

For those of you scratching your head at the choice, I will remind you that The Music Man, one
of America's
favorite all-time musicals, is the story of band director/con artist. The following from famed
critic, Clifford Ridley
captures the Music Man for our purposes:

"Bierko is a younger Hill than Preston, yet with his slicked-back hair, his self- dramatizing
gestures and his roving
eyes constantly scouting for trouble, he's every inch the two-bit con man. As advertised, he
delivers Hill's fervid
patter with dash and musicality; and at the end, when he's unmasked by the unconditional love of
a good woman,
he's quite touching. And he has a splendid foil in Luker, who sings Marian's arching melodies in
a limpid soprano
and persuasively metamorphoses from chilly skeptic to loving co-conspirator. She also has a fine
way of saying
"Ssssh" - an admonition, fortunately, that this ebullient production mostly ignores."

And then here's a passage from the preface to Bob Woodward's "Maestro" which more than
adequately captures the
essence of the Maestro side of the coin:

"Greenspan is slated to remain chairman of the Federal Reserve until 2004. Not only is he a
major figure in the
world's economic past, he is central to its future. He has been frank enough to stand before the
new and amazing
economic circumstances that he helped create and in the end declare them a mystery. It is
impossible to account fully
for the continuing high growth, record employment, low inflation and high stock market."

And, toward the end of this important book:

"Greenspan also represents something more than the confidence wing of the American
Personality. He stands at the
point where the country's eternal optimism meets the country's abiding suspicion that something
will go wrong. . .
That fear also creates a kind of excitement and anticipation.Greenspan stands at the crossroads of
optimisim and
pessimism. Each of us is a character in the nation's great economic soap opera; Greenspan is
both director and
producer."

So, the question before the table is this:

***** "Alan Greenspan, Maestro or Music Man?" *****

Lovable Con-Man or Brilliant Fed Chairman?

I will leave with another thought of Mr. Kasreil -- as I think the computer cannot be taken out of
the present
equation without missing a major part of the analysis:

"Economics how do we measure that? Well, I can tell you there has been a very increase in
productivity, at least at
my shop. When I joined the Northern Trust over 15 years ago, it took three senior economists
and three research
assistants about two weeks to come out with an inaccurate economic forecast, and with this
laptop, I can do it all by
myself in one day."

The world, I know, is not spinning any faster than it used to be but who among us would deny
that it is. . . . . . . .
.So Maestro or Music? You be the judge.

Each entry must address the question in sufficient length but no more than is absolutely
necessary to make the point
-- the eternal bane of the writer. An appropriate link is acceptable. The contest will be judged not
on the choice you
make but on the erudition and argumentative skills used to make your case. Please surround your
entry with stars as
shown. The winner will get a lucky French Angel gold coin -- the one they say Napoleon carried
throughout his
campaigns until he lost it . . . . .the day before Waterloo. As Darkhorse suggests the entry-post
must also include
some reference as to what the future might bring by the end of the year (for posterity's sake). As
always, the post
must conclude with how all of this relates to gold and gold ownership -- and it is there that the
worm turns, where
the contest will decided. The runners up -- two of them -- will receive a Mexican Azteca silver
coin.

First time posters will receive a one-ounce U.S. Silver Eagle but in order to claim the price you
must indicate that
you are a first-time poster with Jill Snyder (jill@usagold.com). The post must be an entry into
the main contest --
"Alan Greenspan, Maestro or Music Man." First time posts in the price guessing contest (see
below) do not count
toward the Silver Eage Prize. Pls include your current mailing address.

The posting contest will go from this moment through Sunday, December 9, 2001 when midnight graces the purple
mountain majesties.

* * * * * * * * * * *

Passing through the room on my way elsewhere I saw your question and remembered hearing the answer provided not long ago. I looked into the matter and found this following post from early November. I hope it helps. --Randy

-------
USAGOLD (11/9/01; 09:42:38MT - usagold.com msg#: 65008)

To: Galearis, Rhody, Netking

Though I would like to think that the lack of one hundred ounce silver bars in the market is the result of a shortage, in the interest of objective analysis, I need to point out that the reason for that is rather straight-forward. They (the refiners) don't make them anymore, but make 1000 ounce industrial bars instead. And the reason for that is lack of investor demand at this time. (Not to say that that might not change at some point in the future.)

Aside: At the same time, I would like to get more information on the chronic premium problems with the silver Eagles.

I was asked some time back to find out what I could about the possible silver shortage and I did make some phone calls and got a quick education. I'll reduce my findings with respect to the future of silver to two words and let all of the silver bulls sort out their meaning:

Warren Buffet

One must also take into consideration, as I said in the ABCs of Gold Investing, silver is a solid inflation hedge but remains to be proven as a deflation hedge. What that means is that one would not hold onto a silver position through thick and thin like they would gold. At the same time, for those looking for a spec, silver has some merit -- once the role of "he who holds the keys" is fully understood. [...]
-------------------

MK and I have previously conversed about this issue, and I can assure you that the finer points are more easily expressed in spoken conversation. If you'd like to receive the full quality of MK's input on these various precious metals matters, I strongly suggest you pick up the phone and give him a call. That's what he's there for, and he loves doing what he does. -R.

Dear Randy: My son's fifth-grade class is studying South America, and they have to do projects relating to South America. One of my son's projects will be to bring in a gold Argentino 5 peso and a gold Uruguayan 5 peso. Last year in your information sheet, you said that one Argentino 5 peso coin equals 500 trillion original pesos in paper form. Does that mean they cost 500 trillion today? How much (approximately) would one coin cost in Argentina (and Uruguay)? Has the amount changed much in the last year, and especially in the last week?

Thanks very much!! They're beautiful little coins, and I'm VERY glad I have them, especially as I read about Argentina's current problems!

http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0Wow,

Just checked in to see what had been posted on the forum today. Upon a precursory perusing, I particularly liked the post from Miner49er, good sound reasoning from where I stand. Also, "The Stranger" stepped in with his wisdom. Always glad to see your posts, lets me know you're still out there.

Today's commentary from Roach(MWD)is an especially good read. When I've felt as though I've lost my bearing, he always seems to get me back on course.

Well, it looks like I've got my reading cut out for me...

Canuck, hang in there,

The CoinGuy

Good work as usual, thanks. I remember reading it and thinking that, as is usual for the silver market, definitive answers are hard to come by. It is indeed plausible that small bar production would be cut back if demand were scarse. Small bar production might also decline if there were not enough for all size bars with larger industrial size bars easier to deal with. I guess we need to keep our ears and eyes open as usual. Thanks!
Rich

You know, I looked at a price chart and realized how I really managed to undersell MK's competence in my previous post.

In an effort to be brief, I only excerpted the portion of his post that was pertinent to answering RPowell's question. This is the concluding portion of MK's November 9th post that I omitted.

(MK continues...)
----------------
Personally, for a spec item, I like palladium at these prices better, but that's a personal preference and not investment advice as such holdings are very risky to say the least. Lastly, I would consider either play a minor aspect of the portfolio with gold playing a much more aggressive, prominent and central role (given the times in which we live.)

Gold for the long run.

Silver for a spec. . .caveat emptor.

Thank you

MK
--------------------------

Well, I've got to hand it to the guy. At the time his post was written, palladium was going for $325 per ounce. Now, less than one month later, palladium is up to $390. Sometimes I get caught up in the news and forget to fully appreciate that I have a friend IN the metals markets *right here* as a valuable resource. All the more reason to get comfortable with the idea of giving him and his staff a call with your investment interests and questions. (And don't worry, you won't ever have to deal with me -- even accidentally).

Randy (far away at The Tower)

http://www.usagold.com/onlinestore/Uruguayspecial.htmlLeigh,
I'm not surprised to hear that you like your South American coins. I know that I like mine very much, particularly the Argentinos.

Sounds like your son's class will be enjoying a nice presentation and getting a solid education at the same time.

The URL above may be of help to you in this matter. Let me know if more is needed.

R.

(Excerpt from my presentation last year at the above URL)
--------------
Special Pre-1933 Limited On-line Offer
The Uruguayan 5 Pesos Gold Coin
�
As demonstrated in our previous offering of the German 20 mark gold coin, if history teaches anything, it is that government cannot be trusted to manage money. But unlike the flash ending of the 1923 German mark (where it required 726 billion paper marks to buy what one mark could purchase in 1914,) it seems to be the sad legacy of many Latin American currencies to suffer "an endless death" at the inflationary hands of their official custodians. And so it has been with the fate of the Uruguayan peso during the latter half of the 20th century.

In 1930, the Uruguayan peso was of slightly greater value than the U.S. dollar. (Twenty U.S. dollars were "worth" the 0.9675 troy ounces of gold contained in the $20 double-eagle gold piece, whereas twenty Uruguayan pesos were "worth" the 1.0004 troy ounces of gold contained in four of these 5-peso facevalue coins.) As inflation took its toll, the New Peso was introduced in 1975 to replace the old peso at a rate of 1 NP for 1,000 old pesos. But alas, the New Peso also fell victim to these same inflationary trends, and was itself supplanted in turn at a rate of 1-for-1,000 NP in March 1993 by the "newer" peso which is currently in circulation today at 12 pesos [(1/1,000 NP) (1/1,000 old pesos)] per U.S. dollar.

When measured today using gold as the benchmark, since 1930 the U.S. dollar has been reduced to one-fourteenth of its former gold value--as currently available on the spot gold market. The original Uruguayan peso has fared considerably worse. Adjusting for the two thousand-peso "reverse splits," it would require savings of more than 3.4 BILLION of the original paper pesos to equal the single ounce of gold comprised by four of these featured coins bearing 20 pesos total face value.

As with Germany, for those who were wise enough to be holding their currency in the form of these gold coins instead of paper notes or bank deposit accounts, the intrinsic value of the gold in the coin preserved their purchasing power for real goods over time, thus preserving their monetary wealth. Today, after 70 years of inflation in Uruguay, each 5 peso gold coin retains the same purchasing power as found in 856,000,000 of those original "old pesos" that were unfortunately held in the form of paper or bank deposits.

http://www.prudentbear.com/bearthoughts.htmI'm wondering if any of Argentina's citizens have bought any gold? I thought I heard today, the Argentinian government was meddling with retiree's pensions. Anyone who has seen the article, I would appreciate it if you would post a link for me. Now the snippit:

The IMF denied Argentina their $1.3 bil December loan yesterday evening, which now likely means default/devaluation will likely come sooner rather than later. There is also the talk that Argentina may dollarize, which would have bearish implications for the dollar. In a bizarre twist, the MerVal actually rose 11 percent today as Argentines, fearing seizure of bank deposits, yanked money out of banks and bought stocks. Here's how one trader put it: "People are desperately escaping from banks. They're calling us frantically wanting to invest in stocks, even government bonds. That's how bad it is. They don't even care where their money goes, as long as it's not in banks."

I hope BB doesn't mind? This looks "Grim".

The CoinGuy

Hate to see a fellow Goldbug feeling down in the dumps. If I may say a few words to cheer you up.

Its never to late to buy physical.
It is still dirt cheap.
TPTB still want the price of gold to be low.
Gold still can be acquired.

A wise man knows his limitations. Get a plan. Keep it simple. One ounce at a time. If you can afford more, all the better.

With all this stuff going on, TPTB must be sucking down the
pepto bismol by the gallon.
Hang in there, Canuck
Slingshot

I have a friend who is a large dealer in the West. We were discussing Geopolitical events two-weeks ago and the
mention of silver bars did come up.

He told me, one of the smaller dealers he supplies called and they were chuckling over this demand they've heard for 100 oz bars. He said he'd had 18 of those bars gathering dust in his safe for quite some time, thought he'd put them up on the wire and see if the premiums he heard being paid for the bars was true. Needless to say, he received 280 bids for them in short order. They're not laughing now.

I don't know whether these bars are being melted for industrial size bars, or are being hoarded by small investors, but I do know the "action" has caught quite a few's people attention that are in the position to jump on this bandwagon with force, and are watching the situation closely. I might also add their also watching the situation at the Treasury in Canada and US too.

I "again" would say it probably is best to consult Michael's opinion on the situation, this could be a speculative play, or it simply could be a flash in the pan.

I myself, have personally stayed away from these areas of the market, and prefer to play the tortoise, than the hare.
I've always believed in accumulation over the long haul, and let the cards/currency fall where they fall. My gains equal the gains on my properties at this point, and this is good enough for me.

The CoinGuy

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=TOPST&ARTICLE_ID=129093
Snippit:

HOUSTON, Dec. 6 -- US natural gas prices should jump sharply in the first quarter as demand jumps in the face of limited supply. Marshall Adkins, managing director of Raymond James & Associates, Houston, made that prediction at an International Association of Drilling Contractors conference in Houston. Adkins and other speakers warned of industry's limits in meeting natural gas demand, both from onshore and Gulf of Mexico fields. "We may need $4/Mcf or higher gas prices to even stabilize Gulf of Mexico production," he said. Adkins said gulf production will decline because new prospects are smaller than before. Meanwhile, he said industry is drilling deeper -- 40% deeper since 1983 -- setting a trend of higher costs per well. Despite a tripling of rig activity in the past 2 years, he said US gas production is slipping anyway and "in the next 5 years it may go down big."

The industry's drilling performance has been generally poor in recent years as the focus shifts to deeper and harder to tap reservoirs. "We have to increase our drilling efficiency." Paul Hilton, TotalFinaElf E&P USA Inc.'s senior vice-president for offshore, agreed industry's prospects in the gulf are getting much smaller. "We are going deeper in water and drilling depths, and deeper in risk when we do." Another problem, he said, is that some of those prospects are 100 miles from existing infrastructure, requiring a "high dollar investment per barrel of oil equivalent."


Black Blade: Due to other distractions in the World today, focus has shifted from the "Energy Crisis." The "Energy Crisis" hasn't gone away. As outlined above the major natural gas fields are depleting and targets are smaller all the while costs are rising. It was an "Energy Crisis" that triggered this recession and any new "Energy Shocks" will cap any recovery and could even aggravate the current recession further. Meanwhile an economic recovery will increase energy demand at a time when exploration and production is beginning to slowdown. Also virtually every new power plant is natural gas fired. Even so, Congress has shelved the "Energy Bill" for now. As Warren Buffett has said, this recession will likely last a very long time.

It is always good to read Farfel's writings. I see he is still in "good form." Cheers!

Good to see that The Stranger is still dropping by occasionally.

Now we just need to have Koan drop in to give us a good old "Bear" story.

- Black Blade

http://biz.yahoo.com/rf/011206/n06206110_7.html
Snippit:

BUENOS AIRES, Dec 6 (Reuters) - Argentina's cash-starved government seized local pension fund money on Thursday in a desperate effort to keep the country's economy afloat in the face of foreign loan cutoffs. Protesters threw eggs and stones at the Central Bank building, amid growing public anger at President Fernando de la Rua's government and there were signs that a de facto devaluation of the peso currency had already begun. Economists warned that without international help, there was little hope of the South American nation of 37 million people avoiding history's worst sovereign debt default.

``Once I get all my money, I'm going to take it to Uruguay or put it in an account in the Cayman Islands or New York. I have no trust at all in the financial system or the government,'' said bank customer Federico, 32. One well-dressed woman thumped a cash machine at a Citibank branch demanding U.S. dollars which never came. Television showed pictures of labor union protesters throwing stones and eggs at the Central Bank building in central Buenos Aires. A window was broken and graffiti on the wall of the building read: ``The Nation Is In Danger, We Must Struggle''.


Black Blade: (Para mi amigos Argentinos) �Compre Oro no los D--lares! �No conf'e en el gobierno! Proteja ustedes mismos contra el desastre econ--mico y compre oro para seguridad econ--mica.

This is the way it always happens isn't it? Carrot and the Stick - The rulers get fat off the sweat and blood of the serfs.

MK and Randy - perhaps Argentina will shake loose of a few more of those Argentinos. It would be nice to see more of those offered again. "Gold to the people" ya know.

http://biz.yahoo.com/rf/011206/l06184898_2.html
Snippit:

LONDON, Dec 6 (Reuters) - Europe's biggest software group SAP on Thursday said it would cut seven percent of U.S. jobs or about 300 posts despite recent reassurances of a strong sales recovery following the September attacks on the United States.

Black Blade: 300 more off to the "Bone Pile."

http://biz.yahoo.com/rf/011206/n06338564_1.html

Snippit:

NEW YORK, Dec 6 (Reuters) - A grim employment report on Friday could halt the downward momentum that has gripped U.S. Treasuries this week by casting doubt on the growing view that an economic recovery could come sooner than anticipated. Wall Street economists polled by Reuters estimate U.S. employers shed nearly 190,000 jobs from payrolls in November, bringing the unemployment rate to 5.6 percent compared with 5.4 percent in October. That would be the highest jobless rate in more than five years, following a shock 0.5 percentage-point spike in the prior month. Such a rise would suggest to many investors that the potential for economic growth is still dampened by a weak labor market.

Black Blade: In the morning we shall see. Many have no more benefits and are no longer counted and others have taken lower paying positions. This does not bode well for a rapid economic recovery. In a word - "GRIM"

http://biz.yahoo.com/rf/011206/n06178763_1.html
Snippit:

OAKLAND, Calif., Dec 6 (Reuters) - The Clorox Co. (NYSE:CLX), a maker of household products such as bleach, said on Thursday it will lay off 260 U.S. employees, or about 8 percent of its salaried U.S. work force , in an effort to cut costs and save $40 million to $45 million annually by 2003.

Black Blade: OK, bleached "Bones?" Off to the "Bone Pile."

http://biz.yahoo.com/rf/011206/n06366042_1.html
Snippit:

The Bloomington, Minnesota-based company, which late last month closed an Indiana plant and shifted manufacturing to facilities elsewhere, said the move will eliminate about 440 jobs.

Black Blade: More nonessential "Bones" are cast aside. There are many more job losses than can be listed here from small companies across the US. This is not the sign of a recovering economy in spite of what Wall Street Trolls like Jim Cramer and Larry Kudlow say.

Wow, the compassion, the bond and the affection I feel for you guys is beyond words.

I am going to re-read the days notes, I am sure I will have to make a point of a couple statements. Nerves of steel and hearts of gold come first to mind.

Truth is paramount and the future is clouded, it will take supreme confidence and a stellar vision to see what comes forth. The world is shaded, it is greedy and crooked, I fear for my children. I have shed a tear a million times wishing for righteousness, you guys have proved to me today that I am not alone, the people here at this forum are representative of truth.

The truth shall prevail so help me God.

I am not a religious man, but in my last few posts I have shed my skin. I know God does not have a '$' stamped on his forehead and I know God does not count money. This world has gone to hell and I know this is not his vision.

Enough religion.

I cashed in a 'volatile' mutual fund for a 'balanced' fund today and a) I don't know if it will do 'better' (whatever that means) and b) I don't care. I stopped at my local, yocal exchange currency 'store' and bought 20 oz. of silver. It's the first physical I have bought in 4 months. It felt really, REALLY good. There was a 10 gram JM bar of silver that cost $2, that's 2 dollars Canadian. I told the teller it was a Christmas gift for the dog. She looked at me like I was from Mars, I glared back as if she was from Jupiter. I lost my buddy beagle this summer, beagle #2 deserves the best, yes?

Did I tell you about the beagle sniffing out gold at 1300 metres? ;) (Watch your back yards!!!!)

The 19 year old daughter drew up her Christmas list; televisions, CD 'burners', cash. You know the drill. I told her we should go to Afganistan and do an gift exchange with the children there. Eyes rolled, give me a break. I guess I'm out-of-touch with the entire 'freaking' world.

Back to you guys.

I wondered too far into the 'profit' world. I exchanged labour for paper and have been burned, not critically, thanks to old-time heros like Stranger, Galearis and Megatron and new time heros like uponroof and slingshot. I am making a critical error quoting names without reference to todays posts, I thank all.

I am in the process of regrouping, there will be a golden day friends, it is not a question of if but when. One MUST keep their head screwed on straight through these bizarre times. I will be there, I promise. You guys and the hoards of physical gold advocates that follow us have my personal invitation to follow. Can anyone with a conscience tell me that the world is a better place in the last few years, last generation?

This day is for you guys, tomorrow will be ours. When gold hits 4 digits the first half-dozen rounds (in Ottawa) are on me!

Canuck

Glad to see that you're feeling better. The world is a shady, crooked place and it may not be a better place than 10 years ago. We live in tumultuous times when it's all the more necessary to chart your course and not allow the worldly seductions and distractions that bombard us every day to deter you. Prepare your storm anchor but also remember to take notice every day of the beauty that *is* in the world.
ps - glad to hear the dog survived the week (smile)
Cheers,
Waverider

slingshot

A wise man knows his limitations

R Powell

I'm still somewhere between completely broke and outrageously wealthy.

megatron

you should never play if you can't afford to lose.

Pizz

Paper crosses can be heavy

Cavan Man

When they have reached the summit of grandeur, some minute and unsuspected cause commonly affects their ruin, and the empire of the world is transferred to some other place.

Rockgrabber

A dirty nuke is all it takes

Galearis

But at least with investing in the metal, one KNOWS that one is not the riding a buffalo over a cliff with the rest of the herd

Hipplebeck

That is the most important thing to me in these days where analysts and investment brokers are the lowest of the low.

uponroof

Once an understanding of fiat deception is gained you are then 'saved'. 'Sanctification' (the moving towards physical only holdings) if you will, ocurrs at each one's individual pace. While all are in fact saved, old temptations (paper vehicles) still have some power over them during the sactification process. Obviously once in 'physical only' the downside risk (Hell) becomes zero if you have gained an understanding of real intrinsic value versus man's imposed value.

RobotGuy

What did the wealthy man say?? Do exactly what everyone tells you not to do.

Max Rabbitz

The slightest hint of a movement can cause the entire herd to change direction.

miner49er

What they have is the fascination with the hunt, not the talent for hunting. Unless you have the gift to discern the movements of the beast, and the will to act decisively, you will lose.

Henri

Simplify. First get debt free. then save nuts for the long winter ahead...there is still time.

"Prepare your storm anchor but also remember to take notice every day of the beauty that *is* in the world"

And today's beauty is your word Ms. Waverider of Vancouver.

Galearis and Robot Guy:

Gelearis - your subjective impressions of recent trends are correct Sir. I ran correlations from 1981 to 2000 - Ca$ in US cents and POG in US$. The coefficient is not significant - or neutral as you suggested. I ran the same in Ca$ against the POG in Ca$ and I couldn't calculate the coefficient - the scatterplot was all over the place.
Robot Guy - hope this blows a little wind back into your sails - there's always hope :)
Cheers,
Waverider

Lots of talk all over about silver. Sometimes I think most get so involved over day to day, hour by hour, minute by minute OVER-ANALYZATION that we can't see the forest for the trees. Small silver is starting to be in short supply and the price is jumping. Gold hasn't yet. I'll tell you what my PM guy told me last week.

I'm lucky, I have a mint here in the soggy Northwest 10 minutes from my office. Every month (for the past three since I started "listening" to most all here) I've bought a little physical and I ask a few questions.

The ratio he sells (Ag:Au) is about 20:1 (right now). I said why? If I've got to pack it around I want gold. Simple he says, right now the small silver buyers are worried blue collar types facing layoffs at Boeing and all their suppliers (big business here). They never were big into the markets, little savings, but the ones with enough sense come in and buy 5 oz a payday. THEY CAN'T AFFORD GOLD. Kids, mortgages, food and clothes.

The potential gold buyers' are still jumping back into SM with both feet trying to get even. The next down turn will chase more into silver, and a few into gold (the ones who get out earllier). When TPTB crash it some more, the more well heeled will start pulling small quantities of gold off the market.

OK, I said, what next. He said wait till the the small bond players, small business owners, and the guy's in CD's start to get nervous. (Wave 3??) Finally the big boys (big bonds, CD's etc.) climb in like 79-80. (Wave 5??) I'll still sell more silver by weight, but the gold boys will be throwing the bucks.

It's starting, the big boys are getting nervous, the lease rate chart is starting to look like the polygraph on the Green River Killer (one of my golf buddy's wife worked side by side with this guy for 15 years - says he's nice.)

Anyway, thank you all for the education, I'm learning a lot of econ and how the world works, but PATIENCE is the key. Everone here is going to make a lot of money over the long run - lets hope it IS the long run so we can enjoy spending a little of it.

Have a good evening and a great Friday.


I don't agree with the mess our elected officals have got us in, but we the people have to take a little credit for the problem. I thought about it a bit tonite as I

Astonishing. In a moment of jest you tip your cards for all the world to see the weakness of your hand! Despite all help, your bluff is called and this obsession with 'units of account' and their accumulation remains. A fog and your personal demon.

You must put substance ahead of appearance, lest you sell your life for "many digits" of bolivar- or peso-knowledge for which you have no need. In time, even the hungry fool shall learn that the brownish banana has more value than several pretty wax fruits feeding only ego.

Take your guidance from those here and you may more surely come to enjoy the fruits of the living.

Just noticed your mention of my dog, thank you. I was thinking about drilling a small hole in the 10 gram silver bar and hanging it with his I.D. bracelets. The first precious metal advocate dog?!

It's been very warm in Ottawa the last couple weeks, I heard a fellow mention weather like Vancouver! Looks like a possibility of a green X-Mas, first in a long, long time.

I noticed a post of yours a couple days ago, very heavy on the math. Are you inclined that way?

It's 11:00 (EST), must depart, golden dreams beckon.

Sorry bout the last two lines on previous post - another subject I didn't delete.

"4 digits" was not defined mon ami!!

A bientot.

After gold finally hits four digits (your fingers), that is indeed THE proper time to provide for the rounds in Ottawa.

Whether Greenspan is considered at present a maestro or flim flam man is simply irrelevant in the long term course of history. At best, he will be judged to be one of the best or worst coin clippers of his era, depending on your point of view. Were he not here, THEY would find someone else to do their bidding.

Suffice it to say that someone figured out how to make gold someone else`s liability during his tenure and the US has entered into "Beggar all thy neighbour" economic hegemony for a while longer than otherwise would have been the case.
During Greenspan`s lifetime, the Central Banks have gone from owning 70% of the worlds` gold to 30%. Only 30% of other peoples money to go, and we know that many participants will not play chicken to the last ounce!

What is really interesting is that THEY could have gotten to this Ayn Rand disciple and previous gold advocate in the first place. Know your enemy I suppose. He has become an Anti-Rourke! Not that I am an advocate of the enlightened selfishness philosophy of the spiritually devoid Ayn Rand.
Sometimes, I think he simply wants to be the protagonist in the whole gold versus fiat play and be alive to see the outcome!
Anyway, my verdict is neither maestro nor music man, just another coin clipper on the way back to reality!

Young single male that I am (30), I just got home from having a few barley malts (2:25 am) and the first thing I did was log on. Thank you for admitting to me that the world isn't functioning to traditional standards. I will keep up my hopes. Thank you for the advanced research brother!!! As for me!?! I need some zzzzzzzs!!

Go Dollar!!View Yesterday's Discussion.

No Sir, Not the economy is terminally ill, but its masters and managers are totally mis-guiding the natural process of the economy. The "interventionists", who aren't economical actors, must be pushed out. They are parasiting on and colluding with the economic activity as such. Regulation and de-regulation, are the causes for permanent mis-management, wich are leading us to cathastrophies. Normal economic activity is a self-regulating process. And there will always be people who want to steer it. This leads to un-natural hyperconcentrations and disturbing imbalances.

Too much state, and declining individuality ! The harmony of diversity is in the process of being destroyed.

The zero rate policy and artificial currency proportions are the most visible external characteristics of the general mis-management. The boom > bust procedure/cause.
The past 20 years will enter history as the super-managed/regulated, economy period. Big scale DE-REGULATION must follow for recovery. A simple "back to normal", where *Gold*, will automatically regain its role.

Interventionists are taking decisions that a normal individual would never mistakenly do. Are you going to give your neighbour a credit with a 2% interest rate, or refinance his house for 120% ? Are you going to subsidize your ailing competitors ? Are you going to bail out your brothers and sisters ? Are you going to run your business with 120% of debt to assets ? etc...etc...

It has to get worse, before it can turn for the better. 101 logics.

25 days

US$/Euro 0.892 -0.001

Gold $274.65 +0.35

http://www.usagold.com/gildedopinion/Jensen/20011205.htmlInternational Editor Holger Jensen discusses the following two topics:

HEADLINE: Sharon, Arafat dueling possibly for one last time

Both 73, Ariel Sharon and Yasser Arafat have been adversaries for decades, ever since one was a soldier in the young state of Israel and the other a guerrilla leader of the Palestinians it left homeless. Both call each other "terrorist" and both are accused of war crimes.

Sharon accuses Arafat of directing the intifada, calling him a "thug" and a "terrorist." Arafat protests that he cannot control the suicide bombers of Hamas and Islamic Jihad -- even his authority over Fatah and other Palestinian security organs has become questionable -- while maintaining that Israel invites terrorism by continuing its occupation of Palestinian land and engaging in "state terrorism" against the Palestinian people. Whoever is right, the death toll is nearing 1,000, with Palestinian casualties outnumbering Israeli 3-to-1.

-AND-

HEADLINE: Wherever Arafat jumps, ice is dangerously thin

Arafat was roundly condemned by many Palestinians for becoming "Israel's policeman," but got away with it because he was then engaged in serious peace talks that promised Palestinian statehood. Now the peace process is dead, Arafat's popularity is waning and he has no political gains to convince the Palestinians that a cease-fire is justified. Gazans are already protesting his latest arrests with signs saying: "The fighters are behind the walls of the Authority's prison while the collaborators with the Israelis are free." So, is Arafat leading the intifada as Israel charges or is he the "collaborator" reviled in Gaza?

http://www.usagold.com/gildedopinion/puplava/20011130.html
(excerpts from the URL above)

Like the Internet bubble that ran between 1997-99, current earnings don't back the recent rise in technology shares. Like then and like now, the rise is without any regard to fundamentals or financials. The 40% rally in tech stocks since September 21 is running way ahead of fundamentals and it could lead to another sharp correction. This is a momentum-driven market and nothing more. Most stocks are going up against a weak outlook for profits and a declining economy with very little signs of improvement. The bubble is back and it is being reinflated by the Fed, hype, hope and hyperbole. The question now is, How long will it last?

Everybody knows price and the latest news, but nothing below the surface. Ask questions about real earnings, macroeconomics, microeconomics, global economies, and monetary inflation policies, nobody knows or cares. Where the price is at the moment and what is currently flashing on their screen is all they know. Everything else is much too complicated.

This lack of understanding of economics or investing is why so many people got burned when the market bubble burst. Devoid of independent thinking, they don't process what they read and hear. It is why they will get burned again. They fall victim to trends and fads and have simply become followers. They are easy prey and like sheep are being led to the slaughter again.

(click link to read more)

http://www.usagold.com/jewelry/gold/buy_18k_index.html

Leave the crowded malls to the throngs of other people's kids while you shop easily from home for the perfect gift your loved-one will cherish. You'll enjoy receiving online pricing for designer 18-karat gold by Termine & Winer without sales taxes (plus free delivery!) all from the comfort of your current chair. Best of all, your purchase will help nourish this website as you give the gift that keeps giving year after year... GOLD!

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

"Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives

Please Remember: It is your purchase from Centennial Precious Metals / USAGOLD that nourishes these pages.

http://biz.yahoo.com/rf/011207/l0741891_1.html
Snippit:

LONDON, Dec 7 (Reuters) - Palladium took centre stage on the precious metals market on Friday morning in Europe, as prices jumped $19 an ounce on the back of nervousness about Russian supply, analysts said.

Black Blade: Pd and Pt supply concerns continue as noted previously. The Russians rauded the tockpiles in 1998. BTW, look at the near term silver lease rates (backwardation).

http://biz.yahoo.com/rf/011207/n07299053_1.html
Snippit:

OTTAWA, Dec 7 (Reuters) - An increase in the number of people looking for work pushed Canada's unemployment rate up to 7.5 percent in November, the highest level for more than two years, Statistics Canada said on Friday.

Black Blade: "You want fries with that�..eh?" US unemployment data is released in about 20 minutes.

http://www.usatoday.com/money/economy/2001-12-06-productivity.htm
WASHINGTON (Reuters) � U.S. worker productivity grew at a weaker pace than expected in the third quarter, with the number of hours workers spent on the job falling at the fastest rate in more than a decade as the nation struggled to pull out of recession, a government report Thursday showed. -

The "Bone Pile" keeps on growing higher than expected. Unemployment is now at 5.7% vs. 5.4% in October. A grim Christmas for many US households. A loss of 331,000 jobs in November and October numbers have been revised downward much further. This is "GRIM" data as it confirms that the economy is getting worse - not better as the Trolls of Wall Street have been screeching over the last several weeks. Now they are screeching that it is a backward looking number - how typical. Look for the FED to panic and lower rates again.

- Black Blade

The U.S. unemployment rate jumped to 5.7 percent in November as employers cut 331,000 jobs, the government said Friday, as the country struggled along in recession. Wall Street forecasts called for payrolls to fall by 201,000 with unemployment rising to 5.6 percent. This is the worst back-to-back monthly decline since the early 1980's recession. CNBC Troll Larry Kudlow is really stretching for an explanation why it is now a good time to invest. Some bimbo Marcy Rosell - yep, another CNBC Trollette is really struggling to come up with some reasons why the economy will recover because of lower employment. Yeah, that worked in the 1930's, 1970's, etc. huh? Look for the cheerleading Trolls and Trolletes to come out of the woodwork to pump the markets.

- Black Blade

http://biz.yahoo.com/rb/011207/business_economy_jobs_dc_2.html
Snippit:

WASHINGTON (Reuters) - The U.S. economy shed jobs at a searing pace for a second month in a row during November as the unemployment rate shot up to its highest level in more than six years, the government said on Friday in a report implying the recession may bite deeper and longer than thought.

The Labor Department said another 331,000 jobs were lost last month -- far worse than the 189,000 that Wall Street economists had anticipated -- on top of a revised 468,000 that were cut in October. Previously, the department said 415,000 jobs were shed in October. The October and November job losses were the worst for any two months in more than 20 years, since May and June of 1980, department officials said.

Black Blade: Look for the data to get worse going forward. This is not a typical recession. It follows one of the most rabid speculative bubbles of recent history. This next year after the holidays portends to get much worse. Get out of debt! Get several months of cash to meet expenses, get food stores and basic necessities, and get Gold and Silver portfolio insurance. Prepare as you would for an extended period of no income or as if there were a natural disaster. If nothing happens then fine - but at least you will be prepare for the unexpected - after all is that not the function of "insurance"?

Don't know what happened to your most recent post...it seems to have dissappeared but I fully agreed with it. Wish I could find it again.

For the case of Post 66510 I think that one has to consider that negative interest rates are not only a possibility but in terms of a real return (after inflation?)a current reality.

What is so magical about breaking the zero interest barrier that people do not seriously consider it as a viable alternative?

Someone please correct me if I am totally wrong but should governments continue to print worthless (unbacked except by an exceptionally large pile of bad debt which was formerly considered as debt that could be made good) fiat without restraint, the only recourse to right the economic (price setting) function of the fiat is to destroy the excess in a controlled burn manner. This would be a de facto deflation. Her is how it works.

Govt prints enough fiat to cover the bad debt sector by issuing loans that need to pay back only part of the principle lent...say 50% in some time in the future. These loans then slow the rate of credit creation in the same manner that has been done with declining interest. So not only is the loan interest free but the govt pays you to take the cash.

Competing fiat currency regimes like the yen (jury is out on Euro) can then jockey for that position that offers the most potential for future worth of the fiat as demand driven deflation goes into full swing. That country with the best record of eliminating bad debt from books and replacing it with productivity based gains wins the race back to sovereign solvency.

The zero IR gray as it may be into and out of negative real return (Fiat destruction...slow burn) is a dip in this direction. Burning...the removal of fiat from circulation along with all its offspring credit created. If the bad debts can be retired along with the burned fiat, the newly cooked books can be brought into balance. In a way this has been accomplished on a minor scale with the dot com mania and the SM bubble. No earnings and trillions of fiat wiped out. This debt reckoning though falls on the wrong hands (individual consumer). The banks are the ones that need to recognize and destroy the bad debts incurred instead of continually rolling them over. The govt program must key the negative IR loans to bad debt destruction including govt borrowing which is by definition a "bad" (read as non-productive)debt upon the masses.

Consider this as thought works in progress please. If anyone feels up to the task please feel free to jump into the fray.

The advantage of this system is that it retains the current fiat without having to "accutely "devalue" it. Its integrity is restored over time and it may be considered a directed austerity program. Govt created the bad debt it must bite the bullet to relieve the people of its burden. Less govt anyone?

Oh there it is 66544. Well said Sir!

I completely understand your concern, and agree with most of your "insurance" albeit for different reasons.

If our current situation deteriorates as fast as you are implying, yes, stockpile a few months of food, water, (you forgot amunition), but only if you're anticipating enough terrorist activity to totally disrupt life as we know it.
Personally I think it is a possibility and a good idea, but not because of an expected bounce in unemployment.

As far as getting out of debt, I'm recommending to people to get liquid. If you are not liquid and are afraid of being in the bone pile, borrow as much as you can long term (while you can) at a fixed rate. Liquidity will keep you going longer than being debt free. Pay off variable debt as best you can and keep cash and PMs. If you have the ability to get out of debt and still have liquidity, by all means do it. Capital one just offered me 15K @ 9.9 for 84 months with a $255.00 payment. I may do it and buy PM's. My humble accounting brain figures I've got a probable upside of 100+% return if things really go to hell, and if they don't, I can still sell off a little to meet needs, make the payment and ride out the storm.

Just a humble bean-counter's opinion.

http://www.mises.com/fullstory.asp?control=838&FS=The+Power+of+Gold
"The perennial debate over gold is as old as civilization. What makes money valuable? Why do we happily accept some pieces of paper and refuse others?"

$272 is my Mark good start on it already

Pizz: "Liquidity will keep you going longer than being debt free. " I've been waiting for someone to put it like that, my thoughts exactly (BB: I agree on debt-free principle, but it's hard to change one's net worth overnight -- Pizz is recommending adjustments to its allocations, and this is definitely the time to lock in fixed rates. The only question remaining for me is how much liquidity to keep in $ reserves (and where) vs into PMs. Gee, don't I sound like a Euro CB now???)

R Powell: Why don't I enter contests around here? 'Cause someone always beats me to my own best ideas! If I wrote my musings on AG now, everyone would think I was plagiarizing you. So thanks, for sparing me the writing effort, and, for putting my own thoughts in better words than I was likely to. (And yours was the only one I've had time to read yet -- probably half the others will nail it beautifully, too. What a bunch!)

Henri -- Glad you love music, too. I got to walk (very fast) past the Phil once, while changing train stations in Vienna... (Q: Is the Phil the only currently-issued European gold coin, until the ECB does one?)

http://www.hussman.com/hussman/html/datapage.htmI am glad I started that discussion on the the CAN$ tracking gold and never dreamed someone would pick up that particular ball and run such a labour intensive distance with it. Purchasing pms is often the juggling act with price vs exchange rate intermixed with all the rest of life's little challenges that get in the way. Thanks.

If you like doing these little projects (and I suspect you do) you might like to visit the above web site for a source of a lot of raw data. There is a nice section on currencies.

Best regards,

G.

wouldseem to indicate some considerable disturbance in the force.

Forgot to post this..

G.

Assuming your liquidity will be in currency and PM's, you won't need as much currency as you think - expecially if you have credit lines. The Gov and banks will have to provide liquidity - even Argentina is making sure everyone has at least 250 of something a week - gotta eat or face revolution.

Banks will advance liquidity as long as they have money - even if your unemployed. Money is inventory to them and they'll have to put it out just to say in business. If you're on the bone pile you won't be getting a loan to buy a new car or house, but they won't be forcing an employment check if you take a cash advance on your plastic.

I'm in the process of putting as much into PMs as I can. A larger dilema is Au vs. Ag. Which will be easier to liquidate if you need it. Right now I'm thinking equal weight gold vs silver. Silver will be easier to liquidate and that would hopefully leave you Au for capital after the dust settles, and I do honestly believe the gold will more than compensate for the bulk of your fixed rate debt 5 years out.

One thing no one has talked about on any forum that I've seen is the millions of leveraged home owners in these ARM mortgages. THESE ARE TIME BOMBS AND IF YOU HAVE ONE GET THE H*LL OUT NOW WITH A FIXED RATE!!!! Long term rates are NOT going any lower. Again - pay off or convert all variable rate cards and loans into fixed. If not you will lose everything you've got 5 years down the road.

Again - just a humble bean-counter's opinion. (But I do practice what I preach!)

In a sense I have to agree with your position. As I have never been in debt and am never really in debt I can't really empathize with that situation. However, I do have some expenditures but I always have more assets (like cash, stocks, hard assets and PMs) on hand than I have debt. I pay for everything up front. I recently bought another work truck (2001 Dodge Ram) for cash (OK so I put it on a credit card which I paid off within a couple of weeks - why hassle a CTR - Cash Transfer Report for the Infernal Revenue Service).

I also keep several months of food on hand which I use and rotate. I also keep a lot of wild game in the freezer and at a local meat processor locker. In fact this weekend I will pick up some elk flesh for consumption. I also went in on the purchase of a young buffalo bull with a couple of friends that we will have butchered in the next few weeks.

I guess I have always figured that if I can't afford something then I can afford to do without. I suppose that once one allows himself or herself to get into a debt position it is very difficult to get out of debt. I have also been quite poor financially in the past and have lived off the land for months at a time (even in winter). One of the advantages of living in the western states. I guess what I am saying is - no body owns me, I own myself and I am the master of my own destiny. I am a sovereign individual and I wouldn't have it any other way.

Everyone has to do what they can for their own particular situation. I am jsut glad that I can sleep very well without the financial worries I see among my friends. Cheers!

- Black Blade

Au to ag should read equal dollars not equal weight

Sorry, trying to post and work at same time!!

I'm a displaced country boy fighting it out in the city.

I used to have your values and extremely wise money management, but somehow got wound up a bit too far in the "debt" trap like everyone else.

I'll be back in the country within 5 years. Just too much BS in the city. Now I definily have to back to work. Unfortunately I'm one of those unlucky managers that has to make the decisions of which employees go on the "bone pile" this week in order to hopefully save the jobs of the ones we plan to have left. I know "Grim", be thankful you don't have to do it - its tough.

(I work in the car business - you sure didn't let a dealer make too much off of you - good job!!!)

Pizz

We got some snow today so no work - just play. I will take off a couple of hours with a friend and his dog. I have a new Browning 10 gauge pump that "must" be broken in, so we are off to slay some ducks (and maybe Canadian honkers) for a couple of hours. Maybe I will slip by the Orvis shop and check out a new fly rod. Hopefully after the first of the year (February/March) I will reevaluate my holdings and adjust my investment percentages. It looks as if I may increase my weighting in physical Gold and possibly Silver - then I will have to give the castle a call. Cheers!

- Black Blade

Oh yeah, the auto dealer just about fainted when he asked how I wanted to finance the truck purchase after haggling down the price. I said "you take a check or credit card?" I have to admit, I did look a bit scruffy that day as I just came in from the field after bringing in a NG well. It was a lot of fun.

a good read.This piece quite struck a cord with me especially the anecdotal sections wherein he describes conversations with young investors. His point here is that todays investor goes with the flow and follows pricing moves rather than doing any in-depth research into the fundamentals of each company's health/viability. Of course we all knew this as a factor in bubble creation.

But it also reminded me of a similar topic of discussion in a totally different area. Well, perhaps not that different. I was listening to an academic on education some years back who had spent his life analyzing how high school students processed information presented in the classroom. His premis from his many years of observation was that there was a fundamental change in how the modern student related to the world. He described this behavior as analogous to tribal profiles manifesting in the individuals as being incapable of delving with depth into any topics taught, prone to following fads, being much less curious, having considerable short term memory problems (incapable of remembering what happened last week, for example), and generally less able to think in a linear and logical manner. He noticed this phenominon as a GROUP trait and therefore very worrisome to him as a socially concious teacher.

His argument focused on the computer as being the problem. The students were more used to the instant gratification aspect of being able to "call up" the answers on the internet rather than looking at the raw data and drawing on the grey matter computer we all have in our heads.

A lot of this argument gets lost in this paraphrase, but he concluded that student behavior and learning has fundamentally changed from that of twenty years ago.

Perhaps we are seeing some of these people in the investment community now.

Disturbing.

G.

http://www.timesofindia.com/articleshow.asp?art_id=328987948Interesting article on the goings on in the Indian jewellry business. Mr. Godsell are you paying attention?

nippet:
***********

the Bureau of Indian Standards performed a random sampling at 15 jewellery showrooms in the capital. The findings: only three jewellers were selling gold with the acclaimed 22 caratage.

For the rest, it ranged anywhere between 21 to 13 carats. The survey confirmed the worst fears of gold buyers. BIS simultaneously talked about the certification it has put in place to safeguard the interests of gold buyers.
*******

Uh huh,,,,
Time to get back to the real world....

G.

http://smh.com.au/news/0112/08/biztech/biztech10.htmlGood article came from Auz's

Really know how to make an old country boy homesick. Wouldn't do that on purpose, wud ya?

By the way, hope you eat what you shoot, and if you do and I ever get to know you well enough for an invite to dinner, remind me to bring a pair of needle nose to pick the shot out of the duck - those old 10 ga put up a lot of lead - or maybe we'll have duck burger, just won't have to grind it up.

Get a couple for me - Have a great snow day!!!

Pizz

http://www.usagold.com/onlinestore/special.htmlEarlier in the week we saw Mongolia upping its gold holdings. Here again, WGC's Rhona O'Connell reports in her daily gold market commentary the lastest central bank activity. From Russia:

--------The Russian Government has announced that its Central Bank gold holdings rose to US$4.011 Billion at the end of November from US$3.986 Billion at end-October, implying that gold holdings rose to 415.9 tonnes from 413.4 tonnes at the end of the previous month. The statement added that the increase in gold holdings since the end of last year is 8.2%, suggesting an increase of 31.5 tonnes over the period.-------

Speaking of Russian gold...
As winter weather becomes ever more entrenched for those of us sharing space on the Northern Hemisphere, you'll want to pocket your share of these warm Russian gold coins which embody the very spirit of endurance against the bitter chill. They've survived over one century of cold Russian winters, including a COLD war. (not to mention a revolution and two world wars!)

http://business-times.asia1.com.sg/thearts/story/0,2276,30063,00.html?HEADLINE: The art of gold

(December 8, 2001) ANYONE familiar with Chinese tastes would know how much gold is valued. As prevalent as it is in Chinese ornamental and decorative culture, there was a time when other metals like bronze were more highly valued. That gold is now so precious, and Chinese gold craftsmanship so highly skilled, is partly thanks to the Persians.
[...]
....Since the influx of Persian craftsmen in the Tang Dynasty, the Chinese affiliation with gold and silver became a permanent affair.

Despite this, gold still isn't prioritised as reliable historical indicators of Chinese metallurgy - simply because it's too easily melted down, and re-cast, losing its history, although not its value, each time it is passed on.
-------------

Bottom line: this article has a great "bottom line".

Thanks so much for the information about the Uruguayan peso. The projects were due today, and everyone liked the gold coins. Most of the kids had never one.

My son and a few friends wrote up and performed a play about some conquistadors, complete with beheadings and sword fights. They'll definitely be sorry to leave the South American unit.

I'm in complete agreement with Black Blade - it would be great to see those coins offered again!

I just want to say that I'm disappointed that you didn't win the price guessing contest. I was in your corner all the way. I thought your guess was a tad too high but everyone else obviously much too low so I thought you might win.
The link above gives us the Feb. contract close, not the December close as asked for.
Happy weekend!
Rich

Regarding coin availability, whenever I feel inspired (or compelled) to add new faces to my own holdings, I simply phone MK with my special request. It has been my pleasant experience to find that he'll invariably say, "You want some? Sure, we can get you those." And without much ado he'll quote me a price and get my order into the pipeline.

I'm sure most of Centennial's clientele will agree with me -- life is more keenly felt when you have an order in the pipeline. A great feeling, to be sure; like a kid again, awaiting the arrival of birthdays or Christmas.

The pipeline: now you know why, during discrete conversation among friends, my "codename" for placing orders with MK is "calling the plumber".

Bottom line: If you want Argentinos today, it doesn't hurt to ask.

R.

As listed at Kitco for Pearl Harbor Day plus 60 years,

1 month 5.0225%
2 month 5.0113
3 month 3.5038
6 month 2.0962
1 year 3.0700
So much for whatever was left of any carry trade using silver. The short term one and two month rates were up the most today. Do we sense a disturbance in the force?
Happy weekend
Rich

The Royal Trumpets have sounded, (quietly this time), and the Keeper of the Castle has determined that the "GC1Z" Settlement on Friday December 7th was at $273.9

MK was looking at the entries and saw:

$$$$$274.50$$$$$ Black Blade (11/29/01; 21:54:25MT
$$$$$274.00$$$$$ mikal (11/30/01; 22:54:23MT
$$$$$273.50$$$$$ Christian (11/30/01; 06:41:42MT

Therefore "mikal" was closest and Black Blade and Christian were "runners-ups". Sir Mikal shall be receiving a one-tenth ounce Golden Austrian Philharmonic from Centennial Precious Metals, Inc. BUT, though Centennial Precious Metals, Inc. was only going to award one prize per the announcment, it was so much fun that MK will forward one Silver Eagle, to each runners-up.
---
We all know whom it is that has a "Heart of Gold" !
<;-)

Before you pronounce the end of a carry trend such as this, it might pay to bear in mind that there is more to factor than just the relative interest rates. Expectations of parity changes may often outweigh interest rates in motivating capital flows. Seeing silver poised to hit the skids prompts one to borrow-and-sell the metal now. That's the easy part. What then separates the men from the boys is found in their subsequent choices of "employment" (investment strategy) for that pool of newly raised funds.

I doubt that those few small-timers out there who are already in over their heads in silver having bought a bill of goods will pay any heed to this, preferring to put on a brave face or turn a blind eye. Ignorance is bliss and hope springs eternal, or so the saying goes. I've come to accept that that is the nature of the game. All efforts to the contrary, there is no hope of helping those who will not help themselves.

Bottom line: Gold. Not silver. There, I've said it outright. The advice is wholly and only mine, the decision is only and wholly yours. And forward we shall go from here, step by step, every step of the way. Happy trails? For some more than others, I'm quite sure of it.

Randy

Pizz (12/6/01; 20:57:44MT - usagold.com msg#: 66536)
General Observation

"The ratio he sells (Ag:Au) is about 20:1 (right now). I said why? If I've got to pack it around I want gold. Simple he says, right now the small silver buyers are worried blue collar types facing layoffs at Boeing and all their suppliers (big business here). They never were big into the markets, little savings, but the ones with enough sense come in and buy 5 oz a payday. THEY CAN'T AFFORD GOLD. Kids, mortgages, food and clothes."

You have me confused with your comment, "Seeing silver poised to hit the skids prompts one to borrow-and-sell the metal now."
I had noticed that silver lease rates had gone up appreciably and commented that this should end any remaining silver carry trade. This should end any extra supply (from leased and sold metal) in the supply/demand equation. It should also end all profitability in renewing existing leases (why continue a lease at higher rates when fixed asset returns have come down toward lease rates) so, when past leases expire, they will not be renewed. This should add extra demand to the supply/demand equation, no? More demand from those seeking to return borrowed silver.
So, I don't see silver poised to hit the skids. I think there is a good chance that silver prices are ready to rise, perhaps substantially and quickly. I view the rise in lease rates as more likely the indication of a shortage than the attempt to raise capital at these low prices.
Rich

Why thank you! I just got in and have to pluck duck feathers while I consume copious amounts of Negra Modelo. The Silver Eagle is a beautiful coin and I look forward to its arrival. Again I thank you both on helping to make this Round Table so enjoyable with good people for good company. Cheers!

- Black Blade

Your words,


"I doubt that those few small-timers out there who are already in over their heads in silver having bought a bill of goods will pay any heed to this, preferring to put on a brave face or turn a blind eye. Ignorance is bliss and hope springs eternal, or so the saying goes. I've come to accept that that is the nature of the game. All efforts to the contrary, there is no hope of helping those who will not help themselves."
********
I can definitely say that I am a small-timer and I believe many here are also such. I wasn't aware that you thought those of us invested in silver had "bought a bill of goods" but I, for one, have learned to never turn a blind eye to any information or opinion concerning silver.
Can you elaborate on why (fundamental supply/demand information or otherwise)you believe silver enthusiasts have been hoodwinked?
Also you said, "Gold. Not silver."
Do you think, then, that their futures are not connected as "precious metals"? I never believed there had to be a certain price ratio between the two but I have always envisioned them as sharing the same fate. I find it hard to envision conditions or perceptions that would raise the fiat price or value of one without the other.
What then is this "bill of goods" you believe is misleading us and why "Gold. Not silver."?
Rich

Don't bother fretting over moronic prattle. Soon there will be a new 'mantra' from the muslim cleric and we will be shown how wrong we are, by those wise men who know all. ...........

Think of the guy in the comic book store on the Simpson's.That's all you need to visualize.

In fact, I'm going to take this one giant step further, let's say Warren Buffet, Doug Casey, Bill Fleckenstien, Bill Gates, George Soros, The Chinese, the Indian subcontinent, and MEXICO, all ALL WRONG?!?!? and a guy who polices a website is RIGHT??!?!??!?!? VHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAHAHAHHAHAHAHAHHAHHAHAHAAHAHAHAHHAHAAHAHAHAHAHAHAHHAHAHAHAHHAHHAHAHHAAHHAHAHAAHHAHHHHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHH

The dirivitives market driving the gold and silver price is like the tail waggin'the dog.
Why don't the physical holders simply offer thier holdings of gold at 500/oz and silver at 12/oz.Thereby creating a seperate market for physical than for paper.Then the asked price will drive the market and not the bid price.When the perception becomes that there are two markets seperate and distinct markets,who will want to own paper?.They will have to sell paper and buy cash at the higher price.Why bother with paper when cash commands a better price.
In short, create two seperate markets one paper and one physical.We gold bugs control the physical market for sure in silver ,why let paper set the price?The answer lies in creating two seperate markets.When the cash market sets a higher price than that for future delivery the futures people that "Backwardation"and it almost always fortells of higher futures prices to come in the paper market.That is how physical can set the price and not the paper dirivatives.We must change the perception first ,the price change will follow.Getting the miners to participate in setting the physical price would be esential ,but a central marketing authority will be needed to establish prices for physical similar to opec.Then the paper market will become irrelevant.

I'll leave certainty under the category of death and taxes only. Especially as this pertains to silver!
Site steward obviously holds the opinion that silver enthusiasm is misplaced. I hope he will tell us why. Any analysis of this market embracing only positive imput can only lead to a biased conclusion. It's only natural, in human nature, to look for and rejoice in information that reinforces our entered into positions. The safety, enhansement or even (dare I say it) withdrawal of that position may depend on keeping an open mind and objective analysis of whatever facts we can gather. In this regard, information which may lead to the conclusion that the POS will not increase in the near future is as vital as any other info.
Other than a huge unknown stash of silver supply and the technical (rear view mirror type) arguement that our fundamental analysis is somehow flawed because the POS is and remains low, I know of no other reasons why the POS will not rise. If the site steward will share his reasoning or information why he believes higher POS is not going to happen and why silver will not react with gold, I would like very much to listen.
Thanks
Rich

Perhaps you missed the point of my post. His opinion obviously means NOTHING to the most sophisticated and connected(and richest) investors the world has ever seen. Why bother listening? It's prattle.

http://www.portal.telegraph.co.uk/money/main.jhtml;$sessionid$USAZCTAAAAJALQFIQMGCFF4AVCBQUIV0?xml=/money/2001/12/08/cnarg08.xml&sSheet=/money/2001/12/08/ixcity.html
http://www.portal.telegraph.co.uk/money/main.jhtml;$sessionid$USAZCTAAAAJALQFIQMGCFF4AVCBQUIV0?xml=/money/2001/12/08/cnarg08.xml&sSheet=/money/2001/12/08/ixcity.html

is not the pointIn a world as cluttered up with corruption and leverage plays, where demand and price are estranged, where the only truths seem to be assigned to or from politics and the bible one cannot say that one metal will lose/win over another. This is not like comparing apples to oranges in value judgement.

The point is the discussion of what is better or worse is ever the specious one when so much is missing from which to base a judgement. The world has never been here before and seen the fiscal to ecological sickness that is the reality for the confused peoples living on it. When it comes out the other side of this one can only be sure of one thing. Change. There will be gold and there will be silver and for all we know neither will have any meaning for any of us. Except lament.

Best regards and good night,

G.

I, too, feel a duty to "weigh in" on what you've said, Randy. I don't feel "hood-winked" at all, and I'll stand with my silver, AND gold, as the price for each gets beyond the reach of all us "small timers" that didn't have the foresight to get in on the ground floor. I fully realize there's plenty of room for misunderstanding where two people don't have the luxury of vis-a-vis conversations, but after reading your post numerous times over the evening, I still come up with the same interpretations. It smacks of condescending attitudes towards those that invest in silver (even physical positions), and anybody that doesn't have a couple thousand $'s/month to put lay out for PM's. I agree with megatron (I'm sorry to admit THAT doesn't happen too often) when I say I'm in pretty good company w/the Buffets, Soros, Gates et al that see silver as a pretty d**n good investment. I'm pretty sure none of us have any inside knowledge of future events, so I'm real comfortable with my physical silver position which, most likely, will out perform gold (at least on a percentage basis, if not totally surpass it in price; hey, it's possible...isn't silver more scarce than gold, when it comes down to available supply meeting total demand?) when prices do take off. I'll stop before I get too far. I really had to wrestle with this thing; if there's one thing I can't stand it's an arrogant, condescending attitude that totally dismisses somebody else because of differing opinions ("Bottom line: Gold. Not silver." and "Happy trails? For some more than others, I'm quite sure of it."). Randy, sorry for the rant if we've totally misconstrued your points...it just doesn't seem like I have.

Michael, Randy, Gandy, and staff: Thank you so much for the chance to enter and win another fun contest! And it is a privilege and distinct pleasure to benefit from your hard work, experience, dedication, and integrity. You have in many ways, the most innovative, informative, and supportive investment and educational services in the country, the world for that matter- free to a large and diverse public: cutting edge publications and web commentaries and news reviews, expert opinions from some of the world's top thinkers, free consultations, the discussion round table, and more to add to your modestly priced treasures of wisdom and wealth. Invigorating and essential to navigate today's turbulent, sometimes tortuous investment waters.

http://dailynews.yahoo.com/h/nm/20011207/bs/economy_jobs_dc_8.html
Snippit:

WASHINGTON (Reuters) - The U.S. economy shed jobs at a searing pace for a second straight month in November, the government said on Friday in a report analysts said assured further interest-rate cuts to combat recession. The economy lost 331,000 nonfarm jobs last month, the Labor Department said, far worse than the 189,000 that Wall Street economists had anticipated. November's losses came on top of a revised 468,000-jobs payroll plunge in October -- a total 799,000 jobs scrubbed from payrolls in a two-month period. The last time job markets suffered a similarly devastating back-to-back blow was in May and June 1980 when 806,000 jobs were lost.

The Fed has reduced rates 10 times already this year and analysts said the bleak figures made an 11th reduction at its meeting on Tuesday a virtual certainty. The central bank's federal funds rate already is at a 40-year low of 2 percent.

Black Blade: A record 11 FED rate cuts and more to come is obvious sheer panic. Even the ECB decided not to cut rates because they knew it would be seen as a panic. The FED has no choice. The US economy could very well follow in the footsteps of the Japanese economy.

http://smh.com.au/news/0112/08/biztech/biztech10.html
Snippit:

AngloGold suffered another blow yesterday in its $3.7 billion bid for Normandy Mining as the Takeovers Panel ruled a break fee imposed by rival suitor Newmont Mining had not inhibited competition. AngloGold and Newmont are battling it out for control of Australia's biggest gold miner, considered one of the last prize acquisitions in the sector. AngloGold came back with a cash-sweetened offer last week after its original bid was trumped by Newmont, which has the recommendation of the Normandy board. The three-way Newmont deal - it will also take over 19.9 per cent Normandy shareholder Franco-Nevada Mining Corp, which has agreed to sell its stake - includes a $38.33 million break fee, if the deals fall through.

Black Blade: I had brought these points up here before. I also brought them up at miningweb.com, however, these were embarrassing points for those "analysts" and I asked "hard" questions that they were ill equipped to deal with. The result was that this pro-AngloGold and pro-Barrick web site deleted my point-by-point rebuttals. The AngloGold shills at miningweb.com also have given a lot of misinformation in their articles and misleading data in their charts as well. It truly is a battle between the hedgers and non-hedgers. This battle over Normandy will be but one battle and the non-hedgers face a formidable task as the hedgers gang up with the support of biased shills and financial backers. Be very suspect of these alleged "analysts." The POG will eventually break free in spite of the best efforts by the hedgers and their "friends."

A few interesting tidbits I found tonight:

Silver is first recorded on the London Fix in 1792 @ US$1.29
Gold is first recorded on the London Fix in 1833 @ US$20.65
From 1833 to 1999 Silver increased from $1.29 to $5.22 (4x)
From 1833 to 1999 Gold increased from $20.65 to $278.88(13.5x)

And..you know what's coming next...from 1970-1999..yep, they correlate...as gold increases, silver increases (which we all knew).

So I too, along with R. Powell am interested in the sitesteward's reasoning when the data seems to suggest otherwise.

Cheers,
Waverider

Galearis - thank you for the link - there's a LOT of raw data there - weeks...of number crunching as it were!
Cheers,
Waverider

It is easy sometimes to forget that advice, such as Randy has freely offerred, is well-intentioned. I sense in his post the frustration and difficulty in acquiring consensus among the Knights, for the faith in a new, unshackled, and universally referenced gold value, overshadowing silver in a new and unfamiliar financial system and a market across the ocean. Thank Randy for sticking his neck out and using sarcasm with decency and restraint rather than overreacting and labelling him as condescending or arrogant or moronic. His post confirms my suspicion that I have acted upon in recent days: That gold coins are dwindling in supply, the window of cheap prices is almost shut, and silver is not envisioned by TPTB as a reserve asset or trade currency of nations, but more as a captive commodity like wheat, rubber , and copper currently are. Further, the supply of silver in private hoards reinforces the notion that Buffett, Soros, and other elite insiders mean serious business in world resources. All posts deserve measured consideration, at the very least, respect.

http://www.thetimes.co.uk/article/0,,2001560012-2001565548,00.html
Snippit:

MULLAH MUHAMMAD OMAR was last night apparently being held captive as the Taleban lost control of their spiritual stronghold of Kandahar in a major breakthrough for the American-led coalition. The Pentagon said that word of Mullah Omar's capture was "potentially interesting". It said, however, that it had no independent verification from US special forces. A spokesman said: "In the absence of that we will tend to see what comes out." Mullah Omar's apparent capture ended a day of confusion, during which it appeared that he might have escaped the grip of the new Afghan administration, and the Americans.

Black Blade: Interesting news, however, at this point just a rumor. When Osama Bin Laden is captured we might see some positive reaction in the markets. However, more terrorist acts are likely as angered supporters go "Jihad." Or as we might say - "Go Postal."

Black Blade:
Kudos on wacking the quacks :) That's an interesting comment about the miningweb. I read something on it earlier this week and actually emailed a question to the sitesteward and asked him to forward it to you (they won't without consent)-it was in regard to DROOY's hedge position-a bit too specific to post here. Nevertheless, I have another question, if I may. You used the term "backwardation" earlier today in relation to the near term silver lease rates. I think someone else referred to it as well...what exactly is that - please, when you have a moment.
Cheers,
Waverider

A new gold value, a new and unfamiliar financial system, a new market across the ocean, is a place Trail Guide mentioned several times before his latest vacation. Though my gold and silver holdings are being adjusted to a heavier weighting in gold, silver, mostly bullion coinage of USA, Canada, & Mexico and other silver, bullion items of beauty, rarity, and investment potential will remain.

I joined the forum very recently and have found it difficult and very time consuming (but worthwhile)to wade through the archives as there isn't a search engine. If you are willing, could you expand a bit/summarize by what Trail Guide means by an unfamiliar financial system and a new market across the ocean?
Cheeers,
WaveriderView Yesterday's Discussion.

http://www.kitco.com/market/LFrate.html
Backwardation is a market condition where spot rates or near term rates exceed forward rates. Contango is the opposite condition where forward rates exceed spot rates. Normally forward rates are typically contango. In the commodities markets such as precious metals and energy markets, the prevailing condition may eflect supply and demand. For example, if the Gold or Silver market is contango, it may indicate a glut of immediately available supply. Backwardation might indicate an immediate shortage. The near term Silver lease rates are currently higher than the forward rates and this reflects a possible shortage of the metal, in other words these higher near term lease rates are in "Backwardation." We have also seen the same activity in the PGM markets as a result of Russia having depleted their PGM reserves. I hope that this helps.

- Black Blade

BTW, as far as DROOY hedges, I understand that they are being unwound as they seem to feel that Gold prices will be advancing in the near future. This is probably why AU and ABX are in such desperate straights and appear to be willing to pay dearly for more acquisitions.

Yes, you can find what you need in the link, in parentheses, at the top of our hosts' pages: (Gold Trail). A new , unfamiliar financial system will be replacing the current one- unfamiliar because its details cannot be revealed at this delicate time, nor can its key spokesmen be revealed for the same reasons, stability and security taking precedence. Also, a new gold market across the ocean is where you will soon look for your updated gold settlements and actual prices and possibly for currency exchange rates as well, as the credibility and feasibility of USA markets may have to be gradually reinstituted.

Congratulations on the POG contest. I also have several uncirculated Morgan silver dollars and Liberty gold pieces in my collection. I think that these older pieces are much more interesting and in a way more beautiful than the newer styles. Just a preference perhaps. I hold much more in bullion and mining shares. Again - congrats!

- Black Blade

Thank you both. mikal - I found the link which I haven't yet explored - so much reading..so much wisdom..the more I learn the more I realize I don't know. Thanks again and golden dreams.
Waverider :)

My apologies - yes - congratulations to both of you.
Cheers,
Waverider

Besides the link (Gold Trail), Trail Guide (FOA), Randy and others posts found in archives have more on this as well the Euro, the dollar, derivatives and related topics.

Thank you both- it was mere luck on my part that one of the many more qualified Knights over or undershot the mark. I tended toward optimism, but gold has been held in tighter and tighter ranges, etc... Have a great night.

The answer to that question is so important as we search for the clues that will reveal the future direction of the economy, and more specifically, how economic events will affect our shared passion, the value and worth of gold.
Is Alan Greenspan truly the "master of the universe"? Does he have the knowledge and the power to "play" the United States, and by extension, the world's economy as if he were Gabriel playing the trumpet? Or is he simply a Music Man? A relatively powerless cog in a highly complicated and chaotic system, conning the world into believing there exists a person who understands it all and knows which levers to pull to keep it humming.
This author humbly submits to the notion that Alan Greenspan incorporates aspects of both the Maestro, and the Music Man into his persona. The ultimate judgment of which label reigns supreme will not be able to be determined until the march of time has overtaken our economy and we have gained the clarity that comes from being able to look at the question in a historical context.
Alan Greenspan became chairman of the Federal Reserve in 1987. He inherited an economic and monetary system that was the antithesis of the system he espoused in his younger days as a contemporary of the famous Ayn Rand.
An important question that must be addressed is: What is the nature of the position of Federal Reserve chairman? Does the world's most prominent banker, no matter who holds the title, have the level of power necessary to control the economy? Yes, the chairman is a powerful actor on the world stage and must have an extremely high level of knowledge and understanding to avoid making a catastrophic "wrong" decision. But also, as we all know, banking itself is a confidence game, so therefore, an important tool of the Maestro is the ability, when necessary, to become the Music Man. Perhaps the economy needs a Music Man to play the role of Maestro?
As complex as our economy has become, even a Maestro in the position of Federal Reserve chairman does not have the power to control it. He can no longer control the money supply due to the growth of the commercial credit industry, and also due to the fact that our "Maestro" admits that he no longer even knows what "money" is. He can tamper with the money supply and also with interest rates, but the control of either has evolved beyond his abilities and the ability of his position. He has shown himself to be the Maestro through applying short-term patches here and there just to keep the economy working as long as it has, despite its foundational and structural weaknesses. His position has evolved so that his greatest tool is to be a Music Man perceived by the world as being a Maestro.
Another important question to address while attempting to determine whether Mr. Greenspan is a Maestro or a Music Man is: What are his true motivations?
The answer to this may never be known. The author can see four possible answers to the question of his motives. First, he is an active participant in trying to set up a New World Order that will deliver control of the world to an elite group of banking/corporate fascists. Second, he is working within the financial and monetary system he inherited to optimize its functioning for the benefit of the citizens of the United States. Third, he is working for the benefit of the banks, believing that is the best course for the economy and the citizens. Fourth, and probably just wishful thinking, he has a secret and grand scheme to bring down the whole house of cards in a way that will bring the end of the welfare state that he detested early in his career, along with the return of sound money.
Without the advantage of being able to look at the outcomes of his actions and his motivations from a historical viewpoint, it is impossible to know, and just conjecture to label him Maestro or Music Man.
Whatever the answer to that question, he has managed to keep "the wheels on the wagon" through both ups and downs while presidents have come and gone. Although our economy seems to be heading to a more precarious and unbalanced position on a day by day basis, with his precious tool of "increased liquidity" and his abilities to be preceived as the Maestro by both Wall St. and the public, there is no reason to think that the Music Man will lose the confidence of the world during this month. The economic world turns slowly, and its timing has never been correctly predicted.
In the long run, however, there is one thing we can be sure of. Gold will again shine as a result of his steering of the economy. No matter what his true motivations are. And whether he is a Maestro or Music Man. If the economy is set up to fail, it will be delivered to the very people who currently own almost all the gold--gold will shine. If it is to fail because he is a disciple of John Galt--gold will shine. If he is merely a Music Man, held up as a Maestro, and doing the best he can, his economy will ultimately fail due to its reliance on unbacked and unsound money. Gold will return to prominence when the inevitable transpires.

http://biz.yahoo.com/apf/011207/sun_country_2.html
Snippit:

Sun Country Airlines Laying Off Nearly All Its 900 Remaining Employees.

Black Blade: More redundant "Bones" off to the "Bone Pile."

http://biz.yahoo.com/apf/011207/getchell_job_cuts_1.html
Layoff Notices Sent to All 210 Employees of Getchell Gold Mine Near Winnemucca, Nevada

Snippit:

WINNEMUCCA, Nev. (AP) -- Placer Dome Inc. told all 210 employees of its Getchell Mine northeast of Winnemucca that they may be laid off in two months, according to general manager Tim Baker. The mine had more than 600 employees when it was acquired by Placer Dome in 1999. About 200 were laid off shortly after the merger with Getchell Gold Corp. Last year, another 100 jobs were eliminated when the project was scaled back to exploration and development only.

Black Blade: The towns of Winnemucca, Ely, Tonopah and Elko are turning into ghost towns at this pace. I understand that some laid off miners are taking minimum wage casino jobs. I know of a geologist who works security in a casino, another who works as a stock boy at a WalMart, and an engineer who works at a local brothel (maybe as a towel boy). In a word - "GRIM"

http://dailynews.yahoo.com/h/ap/20011207/bs/credit_suisse_cuts_3.html
Snippit:

ZURICH, Switzerland (AP) - The Credit Suisse Group said Friday that it hopes to achieve savings next year of $650 million by cutting more than 2,400 jobs at its U.S. investment banking unit.

Black Blade: Banker "Bones" off to the growing "Bone Pile." This is not looking good for a supposed recovering economy.

http://dailynews.yahoo.com/h/ap/20011207/bs/lockheed_telecommunications_1.html
Snippit:

LANHAM, Md. (AP) - Lockheed Martin Corp. said Friday it will get out of the global telecommunications business, cutting 650 jobs and taking a $1.7 billion fourth-quarter charge.

Black Blade: "Tele-Bones" sent off to the "Bone Pile." Look for larger numbers of layoffs after the holidays as the bad news keeps piling up and corporate earnings fail to materialize.

http://biz.yahoo.com/apf/011207/enron_layoffs_1.html
Snippit:

Enron Lays Off 200 More Workers in Power Trading Unit.

Black Blade: Only about 17,000 more to trot off to the "Bone Pile." There are call for investigations into senior management insider trading just prior to the company's recent troubles and suspicious "bonuses" and "incentives" paid to Enron managers while the rank and file get pink slips and see their 401K plans ravaged. A lot of energy and other commodities contracts may be in trouble as well. In a word - "GRIM"

http://biz.yahoo.com/rf/011207/n07136653_1.html
Snippit:

NEW YORK, Dec 7 (Reuters) -A gloomy outlook for the energy business threatens deeper cuts in the sector's workforce next year after the number of workers in U.S. oil and gas drilling slipped in November from recent three-year highs, experts said. Oil and gas drilling jobs fell 1,000 to 339,000 workers in November, according to the Department of Labor's monthly report Friday.

Black Blade: Another sector to add mightily to the growing "Bone Pile." That's a lot of nonessential "Bones" to cast aside.

BACK FROM THE BRINK....always lurking (too stupid to
post)....congrats MIKAL...BLACK BLADE: you're the man!...
CANUCK: Many hardworking men of reason have seen their
paper burn. Almost none hold metals. Your explosion is
inevitable. The last few hours are always the longest..
....FOA: Your patriotism was never in question ...you're
liked and needed.


I am ashamed to say that I took advantage of 911.
Stopped buying gold (temporarily). Instead went for
canadian airline stocks! (felt like death merchant).
Already liquid and golden; this rally is over.

SO WHAT SMELLS FUNNY? In my 40 yrs I have NEVER seen:
A) All major world economies simultaneously slip
( only read about that, yikes!)
B) Free money
C) Gold price manipulation to this extent
D) One superpower
E) A completely groundless stock rally (fueled by
disincentives to park money elsewhere)
F) A new generation of borrowers and spenders with
such little concern for economic fundamentals.

Play the paper , pay the rent, buy food CONVERT ALL
EXCESS TO PHYSICAL! (The only mantra I can chant with
conviction. The only way I feel safe.)

Gold is not an investment vehicle. It is the Fort Knox
That backs your life. Never to be sold; better passed
on to next generation. TREMENDOUS COLLATERAL FOR PAPER
GAMES. TRUE WEALTH!


Goodweekend to all, I receive great comfort and guidance
from you men of intellect! Keep posting!

Is nothing more than an imposter wizard behind a paper
curtain; pulling squeeky levers to distract us from the
realization that the yellow brick road is, in itself the
true prize. NOW WE CAN CHARGE A TOLL AND BUY COURAGE ,
HEART AND A BRAIN!

I need to clarify Sir my #66601 - I was refering only to your duck hunting. It only occured to me later that my phrase could be interpreted as double-edged humor of incredibly bad taste. Needed to clarify - I'm humbled to walk in the company of such learned men.
Waverider

Good day to everyone.

How much silver should one have in relation to Gold?

I am going to use $5.00 spot silver and $275.00 spot gold.

Also that time honored ratio of 16-1. Let there be no doubt that Gold is King and thats where we all want to go.

If you buy 16 oz of silver it is $90.00
One oz of gold $275.00. Silver now is just 1/3 the price of gold if you use the ratio.
Now take Silver spot to gold spot. It would take 55 oz of silver to one oz gold. Using the ratio 16-1 silver should be about $17.00 per oz. So why don't I buy silver in huge amounts? Cause I am not a financial wizard and this I can understand. I figure the PTB can hold the price of gold down
at will (at this time) but when the US goverment starts to buy silver. If silver goes to $10.00 and my cost average at $4.85 my conversion to gold will be nice. So for me its 2/3 gold and 1/3 silver cost using the 16-1 ratio.

We are all trying to get from here to there. The HOW and the way we use it is the hard part.

Fact is that I don't want to miss either the explosion in silver or gold like I did the last times.

Slingshot

16 x $5.00 is $80.00
All the better.
Slingshot

"Gold is not an investment vehicle. It is the Fort Knox that backs your life."

Thank you "A Canadian"! For myself though, I will qualify your statement to mean my (secular) life. Kind regards...CM

There is no "ideal" ratio for everyone. Way too many variables. ORO's probably one of the most knowledgeable posters I've had the pleasure of reading and even he can only come up with his opinion based upon the facts at hand, his own research, and his perception of the future. Then he'd have to apply the results to a specific situation.

I'll advise a speculator completely different than a young couple with two kids on a limited income. But here's how I kind of do it for myself:

My first step is to take my best guess of where I'm at on the economic trail, where the trail is leading, and then try to position myself so as to not run off a cliff. PM's may be looked at as spare tires, parachutes, food caches, or anything else that will help keep you on the trail. We as individuals have no control of where the trail is going, I'm just trying to stay on it without a major crack-up.


Now, my post on how much Au vs. Ag is based upon my current perceptions (which follow).

1. The economy has a better than 50-50 chance of going into a major depression. It will play out over 5-15 years. The best case is a severe recession (we're there now).


2. Unemployment will go much higher than currently expected.

3. Long term rates have bottomed.

4. The dollar is in serious trouble and will eventually be devalued 20 to 30 % minimum. (I still haven't figured how they're going to do it - I just feel they have to.)

5. Gold will go up. Silver will go up faster on a percentage basis (its cheaper and therefore more affordable for the masses). Both will go up more than the present value of dollars borrowed at current fixed rates. PM's will not outperform dollars borrowed at variable rates (again MY gut feel). Interest rates will climb much faster than any expect (six to 18 months).

6. Most of us will have our purchasing power cut by the devaluation and slowing economy - some much more than others.

PM's for me are 25% disaster insurance (this was less than 5% a year ago and based upon a major 8.0+ earthquake happening in Seattle. I'm revaluating upwards towards 50% rather quickly based upon my perception of war, terrorists, and depression possiblities), 60% investment, and 15% speculation.

My ratio (right now and subject to ongoing adjustment) of Au to Ag is as follows:

Disaster insurance is in silver. I can easily liquidate it here, in cash, in small amounts as I may need it. If I couldn't do this, it would be in cash under the mattress.

The investment is gold in hand. If I'm going to hold I prefer small, high value PM's. Don't want to use a hand truck to get in to my buyer.

The 15% speculation is a penny paper gold stock and its only in one, and its so speculative that I haven't seen it mentioned on any forum. I mentally have already written it off (if you're prepared for the worst, and if the worst happens, you still will have you're emotional head on somewhat straight), BUT MOST OF ALL I CAN AFFORD TO LOSE IT!

Bottom line, do your homework, make your own decisions, and take all posted information with a warry mind (including mine).

Solid financial planning is not scanning the board over at K*t*o, getting a couple idiots' opinions based upon a ten cent move in silver, then rushing out and trying to find a 100 oz bar that may or may not be readily available for reasons no one may know at this time!

Hope I haven't rambled too much.

Pizz

(Hey Black Blade - what's your bagged duck look like? Guts and feathers???)




















My perception, and I repeat, my perception, at this time

http://biz.yahoo.com/rf/011207/n07343606_1.htmlBUENOS AIRES, Argentina, Dec 7 (Reuters) - Lawmakers from Argentina's main opposition Peronist Party said on Friday they would go to court to try to block the cash-strapped government from tapping Central Bank reserves to pay its debt.
--------------

Economic developments in times of stress can drive monetary events in directions that would otherwise not be expected in times of calm. As individuals, we have no control over the disposition of our national reserves or the fate of our unit of currency. Complete helplessness need not be compulsory, however. Gold fills the void for all persons wise enough to have acquired it during orderly times.

R.

http://biz.yahoo.com/rb/011208/business_stocks_week_dc_1.html
Snippit:

NEW YORK (Reuters) - This is the weirdest recession ever to hit the stock market. Consumers are spending thanks to an avalanche of interest-rate cuts, but companies can't plow their way out because bankers are so tight-fisted. The Federal Reserve chopped interest rates 10 times and flooded the system with a trillion dollars since January but the soft money policy has failed to have an electrifying effect on the economy and corporate earnings.

The betting is that the Fed will take another stab at jump-starting the $10 trillion economy by lowering again at next Tuesday's policy-setting meeting, possibly pushing the key interest rate to 1.75 percent from 2 percent, which was already a 40-year low.


Black Blade: Rate cuts galore with massive infusion of cheap dollars and it just ain't working! Yeah the market indices have surged higher but that does not translate into increasing corporate profits. I suspect this will be a "M" shaped stock market.

Pizz - Just got a couple of mallards - not badly mangled. Went out this morning and only got a small teal. Crock pot is fired up with duck and orange-sauce, then to laid over "golden" saffron rice with some sweet hot Thai peppers gently swilled down with copious amounts of Fat Tire ale. Off to slay ducks this afternoon.

http://biz.yahoo.com/rb/011208/business_utilities_enron_lawsuit_dc_1.html
Snippit:

HOUSTON (Reuters) - Attorneys for a bank suing bankrupt energy trader Enron Corp. (NYSE:ENE) asked a federal judge to freeze $1.1 billion in assets belonging to Enron executives on grounds they could flee the country with the money. Amalgamated Bank, which manages worker retirement funds, has charged that 29 Enron executives and members of the board of directors pocketed $1.1 billion in insider trades in recent years when the company allegedly artificially inflated earnings to jack up the stock price. Amalgamated attorney Bill Lerach told Rosenthal his clients had lost more than $10 million in the collapse of Enron and hoped to get some of it back from the now-wealthy Enron executives.

Lerach outlined what he alleged was a massive conspiracy of fraud and greed in the executive suites of the Houston-based company. ``There was fraud at the top, fraud by the board,'' he charged in arguments before a courtroom packed with lawyers. ''It's worse than any civil fraud case we've ever seen.'' He said former Enron chief executive Jeff Skilling, who resigned in August after just six months on the job, had gone to Brazil and that former chief financial officer Andrew Fastow, who left the company in October, may have flown to Israel via Canada. ``I don't want to accuse people of being a flight risk, but I do want to suggest it could be more than an academic exercise in this case,'' he said.


Black Blade: "Flight Risk?" That's interesting. Reminds me of an old joke. North Carolina's state motto is "First in Flight." It has been suggested that was also the state militia's motto during the Civil and Revolutionary Wars.

I agree there is no ideal ratio for everyone. Maybe the 16-1 or 2/3 gold 1/3 silver puts me in a comfort zone using price as a driver.
I try to make my Best Guess based on my preception on things happening and adjust as the need arises.
After reading your post we do see the world in the same light.
Thanks for your insight.

Slingshot
King of short ramble.

http://biz.yahoo.com/apf/011208/recession_holiday_blues_2.html
With 800,000 Americans Laid Off Since Sept. 11, Recession Bringing a Blue Christmas for Many

Snippit:

One worked for Enron, another served fast food for Taco Bell. The third was a United Airlines flight attendant. Three mothers head anxiously toward Christmas with faint hope of getting the present they most need -- a new job. They are among more than 800,000 Americans laid off since Sept. 11, struggling to keep their families' spirits up as the season of celebration coincides jarringly with recession. ``The decorations are up, but the atmosphere is not cheery,'' said Clentine Coleman, social services director for Catholic Charities in Las Vegas. ``You don't see a lot of hoopla over the holidays this year -- it's people just trying to make it through.''

One of Coleman's clients is Emilia Posas, 27, recently laid off by Taco Bell as tourism in Las Vegas dipped sharply. Posas' husband, Alberto, also lost his construction job. ``I've put in job applications at different places,'' Posas said. ``But it's hard. Everybody says, 'No. It's too slow.'' The couple -- with children ages 8, 7 and 2 -- is used to festive Christmas celebrations, but not this year. ``I don't have money for rent, utilities, food, nothing,'' Posas said. ``My children are sad.''

In Houston, Tammie Huthmacher -- six months pregnant and mother of an 8-year-old -- was among 4,000 employees laid off Monday in the stunning collapse of energy-trading giant Enron. Her husband still has a job, but they relied on both salaries to meet mortgage and car payments. Christmas normally features a get-together with both sides of the family, and lots of gift-giving. ``This year I'm trying to figure out how to get presents just for my son -- no one else,'' said Huthmacher, 27, at her home in suburban Sugar Land. ``I don't even know how I'm going to buy groceries next week, let alone Christmas. It's devastating.''

Sheila Adams, one of 22,000 flight attendants laid off by the nation's airlines since the terror attacks, can no longer afford her New York apartment. A single parent with a teen-age daughter, Adams will move in with her recently widowed mother in Portland, Ore., trying to avoid gloom at a time when her brother also just lost his job.


Black Blade: These are just a few tales from the "Bone Pile." Don't let this happen to you! Get prepared! American businesses and corporations are pinning their hopes on people throwing cash into the cash registers this Christmas. For many it is "do or die." Amazon.com has said repeatedly that this Christmas will make them profitable. I seriously doubt that. As Warren Buffett has said, this recession will be a long-term contracted recession. Get ready because we haven't even begun to see the worst of this economic contraction. Get out of debt, get prepared, and get Gold and Silver portfolio insurance to balance the coming slide in paper investments.

I'm curious as to how much of this .15 cent rise in the POS has been due to the closing of the base metal mines, and how much is attributable to the rumour of Buffet not renewing leases. How much , percentage wise of the zinc and copper supply has been shut off? Quite a few world class operations are scaling back. I'd be curious to see any mathematical relationship research.

http://www.austrian-mint.com/e/goldrein.htmHere is a really stunning picture of some gold. Cutting out this picture and leaving it around in your office at work would be the best advertisement for gold imaginable.

(From UK's Telegraph)Argentina appropriates pension funds
By David Litterick (Filed: 08/12/2001)

THE Argentine government has seized private pension funds to try to keep the country's
ailing economy afloat.

An estimated �2.4 billion was taken from privately held accounts and converted into
treasury bonds that were then deposited in the Argentine Treasury's account at the
state-owned bank Banco de la Nacion.

Economy minister Domingo Cavallo said the money would be used to pay debt, public
sector salaries and pensions. Although he pledged that the money would be returned to
the banks from which it had been seized, he gave no indication of when that might be.

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Stories%20UK&tp=ad_uknews&T=news_storypage99.ht&ad=uktop&s=APBFYPBWpQmFuayBvHEADLINE: Bank of England Predicts `Success' in Introducing Euro Notes

London, Dec. 8 (Bloomberg) -- The dozen European nations sharing a common currency probably will succeed in introducing euro notes and coins with only minor problems, the Bank of England predicted. ........ The EU introduced the euro on Jan. 1, 1999, for some transactions. The actual notes and coins go into circulation Jan. 1. The U.K. is not taking part in the single currency, but British companies doing business with single-currency countries will need to account for the currency on their books, and some retailers have said they'll accept the notes and coins.

http://www.timesofindia.com/articleshow.asp?art_id=1705731067HEADLINE: Euro to receive Charlemagne Prize

---------Europe's fledgling single currency, the euro, will receive the prestigious International Charlemagne Prize awarded annually for contributions to European unity, the city of Aachen said Saturday.

"From January 2002, the euro will be far more than the single currency for Europe," prize committee spokesman Walter Eversheim said. "It will contribute to a common European identity, stabilize the community and foster peace."------------

The effect of the euro, when notes and coins are fully in place, for the strength of the European community and its economy (and by extention, the rest of the world) will not be negligible.

R.

These numbers are from Friday's IBD reporting Thursday's closing contracts on the silver Comex, the paper trade if you like.
Dec. 2001 = 421.70 +4.10
Dec. 2002 = 429.10 +2.70
Dec. 2003 = 435.60 +1.30
Dec. 2004 = 445.00 +0.70

What does it mean? I haven't yet seen the closing numbers for Friday but I can say that this is not business as usual. I saw nothing unusual in the volume or open interest number.
Congrats to Christian, mikal and Black Blade!
Happy weekend
Rich

Mr President,
Have I got a Deal for you!
I believe I have found a solution to the problem the Taliban has presented
in regard to young men in Afghanistan who are promised 64 Virgins and entry to Heaven
if they die
prior to having sex and in the course of service to thier country on the field of battle
while trying to kill the Infidels.
Here's the deal
No 1. You get 63 Virgins when you die.
No.2. You get 1 Virgin now.
No 3. You get to live as long as you can.
No.4. You have to convert to Christianity.
No 5. You must marry the Virgin.
No.6 You must obey the 10 Commandments
(including "thou shalt not kill").
The only caveat is (No 1 depends on availability)
As you can see it's a better deal !
You get to live ,you get 1 Virgin now and you still get to Heaven !.
Mr. President ,you can even bring the Pope in on the Deal.
And if the Jews want to participate they can make the same offer,
just take the word Christianity out of No 4.and substitute Judaism.
This can be presented as joint effort by Jews and Christians alike
and everybody wins.
It's a good Deal.!

Respectfully Yours
An American Citizen

http:/hindustantimes.com/nonfram/081201/dlame10.aspWestern Intelligence knew of Laden plan since 1995: Report AFP Berlin, December 7

http://hindustantimes.com/nonfram/081201/dlame10.aspMy apologies, here is the correct link.

A paradoxical irony exists in the life of any prominent figure. On the one hand, an abundance of information is usually available that can fuel almost any interpretation of the individual. On the other, truly only a handful of people ever really get to know a person. And can even one of these genuinely comprehend the myriad complexities that make up the circumstances into which one's life is cast; or know the thought processes that comprise the soul? Fortunate are those who have any to simply appreciate, no less comprehend.

The life of Alan Greenspan intersected with the current of world history in 1987 when he was appointed Chairman of the Board of Governors of the U. S. Federal Reserve System. The vast sum of experiences, thoughts, and actions of Alan Greenspan now became united with the even more vast, and incomprehensible history of "the Fed." Alan Greenspan was as he was in that year, and the Fed was as it was, and consequently the state of the U. S. economy, and importantly for us, its effect on our lives.

The public knowledge of Alan Greenspan is, as with others, a mixture of fact and hearsay. From this has been formed the entire spectrum of opinion: from saint to sinner, messiah to madman, maestro to music man. Even if a man cannot be satisfactorily "known" solely on the basis of his actions, he is surely judged by them. And the basis on which Alan Greenspan is almost entirely judged involves one and only one action -- the adjustment of interest rates -- and most frequently just the rate charged for overnight use of funds by member banks of the Federal Reserve, or the Fed Funds rate.

Not only do most people have no more than a superficial knowledge of what these transactions are, fewer still have any capacity to knowledgeably discuss their impact. Yet everyone has an opinion about them, and by extension an opinion about the man who dictates them.

An entity comes into existence when the pressure exerted by its proponents overcomes its opposition. And the composition of its proponents inevitably includes the coalesced forces of the gamut of self-interests. Not a coalition, as these forces are not necessarily in league with the others, but their synthesis nonetheless exists. Among the mix are the true-believers, the crooks and con-men, and the opportunists. Each beholds in the entity the potential advantages to their benefit. Each plays off the other as much as they do the opposition until the momentum obtains a life of its own, and if successful, the entity itself is born.

So it was with the Federal Reserve System in 1913. True believers subscribed to the need for, summarily, a "lender of last resort" to avoid the bank panics of the past. Crooks and con-men recognized the possibilities for abuse, and opportunists saw that riding this wave could get them in on the ground floor of something really big. Notwithstanding the abuse of parliamentary procedure that brought the Fed into existence right before the Congressional Christmas recess, the public was evidently ready for such an animal, or at least enough disposed to acquiescence, that opposition to the enactment never gained a footing.

What Chairman Greenspan inherited some 74 years later was truly nothing less than a beast. A system whose suffusion had saturated every pore of the globe, and had so permeated our lives that we were not even conscious of its influence. Indeed many argue that the system itself is no longer the primary actor, but rather has been marginalized to impotency in the shadows of its offspring: the U. S. dollar based credit system, and derivatives markets -- the real forces to be reckoned with in today's financial world.

The United States and all those entrenched in U. S. dollar based assets are engaged in a formidable struggle with a rising competitive currency, the euro. The struggle is for primacy in being the chief global reserve currency, and unit of account for trade settlement. Each faction comprises the whole range of self-interests, some visible, some not; some identifiable, some not, or mis-identified. And in this complicated and confusing mist of information (fact and hearsay), opinions flourish, and ignorance remains the inspiring genius behind most editorial pages.

It is in this world that this chief Governor must truly govern, which literally means to steer. In the spirit of the Statesman he must navigate not to arrive at perfection, but at what is practicable; not for justice, upon which no two factions will agree; but for an equilibrium in which no faction is so disaffected as to threaten a damaging engagement, or powerful enough in relation to the remaining powers as to make such a threat a reality.

This the role of a Central Banker!? What of simply maintaining the integrity of the currency? Well I suppose if he were the very first Fed Governor, and got to write the rules, and had plenipotentiary powers vested in him, he might be able to do just that... for a while anyway... But his position is not granted the luxury of armchair analysis, and a test lab for practice. He is dealt the hand he is dealt, and must enter the game in progress. The actions he takes are realtime, and irreversible. He has not inherited a text book case study with the answers at the back. Where he intersects with the sum total of all history is where he must begin his work. And as we attempt to discuss what he has done with it all, we must confront our own struggles to interpret the little we know without further distorting it with of our own biases.

Alan Greenspan has acted to the best of his not small abilities. He has had to restrain, assuage, and compromise with all forces. Where there has been folly, he must not expose the fool, where impropriety, he cannot be the whistle-blower, as his role is not policeman. Has the pressure of a perceived unfixable situation caused him to err, and err again? Only as often as you or I, and probably less. Has such pressure ever caused him to stretch or even break the rules? I don't know, but we have all done as much on our own scale somewhere in our lives. Does the Fed operate within its charter? No, I think it has clearly overstepped its bounds, but it is no easy, possibly even feasible matter to try and turn back the clock here. Given the momentum of things as they are unfolding, to try to go back from here would do no more than cause a footnote to be registered of one man's quixotic gesture to change a world that did not want to be changed.

The role of the Statesman is to limit conflict, and mitigate the catastrophic; hence fostering an environment for stability. He must attempt this by deploying his strategy against opposing and often hostile forces who are not prone to cooperate for so vague a notion as the "common good," but must be compelled to cooperate because it is perceived to be in their best interest. Is this his chartered role? No, not really. But if you found yourself suddenly in charge of a juggernaut hurtling uncontrollably who-knows-where, you might be inclined to don a few different hats in order to gain some control.

In light of all this, what does the future hold? Fundamentally, the U. S. dollar, the issued note of the Federal Reserve, is in terminal condition as far as its role as a global reserve asset, implying its ability to represent a stable value store. I believe it was given an extension of life to this end as a result of the "War on Terrorism." Support was provided to allow a semblance of soundness to legitimize the immense expansion of our debt to fund the war effort, and increased security measures. This was so because the world generally agreed that it was in their interests to let us use our resources to contain and hopefully subdue a rogue entity who had demonstrated both the will and capacity to upset the stability of the world order.

Once the perception is that the crisis has abated, support will no longer be guaranteed. We may be at that point now (witness the stress in bonds, which is very possibly a foreign liquidation of dollars).

With the U. S. Treasury unable to convincingly affect the long end of the yield curve to their advantage, the Fed will probably lobby Congress early next session for authority to deal in mortgage-backed GSEs. They will get their wishes. This will probably drop yields for a moment, and maybe two if this ignites housing, and encourages home-equity mortgages to the end that consumer spending spikes. But even at that it will likely be short-lived.

The current spike in silver is a head fake, and silver will come out of the woodwork to pour on this fire before it gets out of control. It will come from some big player, who will certainly be compensated for the favor.

A sudden overwhelming rise in the gold price will be resisted. Such a rise would so risk a tectonic shift in the balance of power that the ensuing unknowns can not be tolerated. Political nobodies, who have substantial gold, collectively become a force to be reckoned with if gold goes up a hundred-fold. The unpredictability of these new powers as to how they would behave generates tremendous political pressure to manage any price rise carefully.

The bigger players are however leaving hints all over the place that gold will rise again. They seem to be suggesting relatively small, and controlled increases. Collectively their endeavors will synthesize into bringing this general theme to fruition. Once more, not necessarily in league (although such conspiring probably does exist), but rather by their diverse interests best being served by a similar outcome.

I think we are best to heed the clues left us by the big guns, but act according to the wisdom offered us by Mike, Randy, FOA, Another, and countless others, i.e., to buy the physical metal itself. These big players, who have unfathomable power to influence things, are likely to be successful in their undertakings (in the short term, anyway). In order to achieve their ends, some nasty activity will take place, and if you are holding paper that can be manipulated at will, you will suffer.

So buy gold, not its substitutes. Live your life each day as much as possible without worrying what "they" are going to do next. With a savings vehicle as road-tested as the yellow metal, that is still being sold at fire-sale prices, you really cannot go wrong.

Personally, I don't want gold to go to $20,000 tomorrow (or even $2,000), and it's not for want of further accumulation. In fact if you really reflected upon what life would be like if the global economy blew up so badly, and so quickly that it would precipitate such a rise, you wouldn't either. It is for the avoidance of such catastrophes that the Fed acts today (and other Central Banks) so contrary to its original charge. It has evolved into this both by its own actions, and the actions (or want of actions) of others. It has acted on a global scale, influenced by massive world wars, political cataclysms, and upheavals of such orders of magnitude for nearly 88 years that it is indeed more surprising that it has not transformed even more radically.

While we may argue forever about how bad things really are or were, and make conjecture about what would have happened had this or that been done, we were not in the hot seat, experiencing the relentless pressures, the tests of our convictions, the challenges to our integrity, receiving insults and derisions, and tempted by the beguiling and intoxicating potions of power and praise. In light of that, I think Alan Greenspan has done his job well. Not without mistakes and even regrets -- yet I'm sure he would be the first to jump up and admit that; but he has done well.

So my hats off to Maestro Greenspan; and gold -- get you some...

miner49er

Mikal: Congratulations on your contest victory. Glad to see that has given you the incentive to post more often- I enjoy your posts. Also congrats go out to Black Blade and Christian on runner-up victories.

Lady Leigh: Somehow I sense that my little girl will one day do exactly as your young ones are doing today- dazzle the youngsters with the ultimate form of wealth. I too enjoy my Uruguayan Pesos and Argentino's purchased at Centennial, but after coming up empty on this latest contest I have a hankering for some Russian gold. I may give in to the online offer and I would suggest to anyone else considering it that they won't be disappointed. I currently own a Russian 15 Rouble and the coin is quite beautiful. As Henri would say: Clink, Clink!

Mr Gresham: If I may be so bold as to answer your question to Henri. It is my understanding that the British mint a current bullion coin- the Brittania which is tremendously beautiful(carries a nice premium) coin as is it's design. There is also a mint located in the United Kingdom and (France?) called the Pobjoy Mint that mints the "Cats series", Cherubs, and the Isle of Man Angels that are quite beautiful and popular. I believe these would all constitute European, if I'm wrong I apologize. Hope this helps.

Megatron:

megatron (12/7/01; 20:38:28MT - usagold.com msg#: 66587)
In Fact.....
In fact, I'm going to take this one giant step further, let's say Warren Buffet, Doug Casey, Bill Fleckenstien, Bill Gates, George Soros, The Chinese, the Indian subcontinent, and MEXICO, all ALL WRONG?!?!? and a guy who polices a website is RIGHT??!?!??!?!? VHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAHAHAHHAHAHAHAHHAHHAHAHAAHAHAHAHHAHAAHAHAHAHAHAHAHHAHAHAHAHHAHHAHAHHAAHHAHAHAAHHAHHHHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHH


megatron (12/7/01; 20:29:31MT - usagold.com msg#: 66586)
RPowell
Think of the guy in the comic book store on the Simpson's.That's all you need to visualize.

megatron (12/7/01; 20:25:51MT - usagold.com msg#: 66585)
RPowell
Don't bother fretting over moronic prattle. Soon there will be a new 'mantra' from the muslim cleric and we will be shown how wrong we are, by those wise men who know all. ...........


In all fairness, I too would like to see Silver appreciate nicely and I'll admit that I prefer Gold to Silver, but I think your posts crossed the line. Actually, I think these latest musings from yourself set a new precedent for "moronic prattle". You speak so fondly of the animated cartoon The Simpson's and cleverly associate certain people on this forum with the characters on the show (perhaps in relation to your profession of cartoon technical production is it?) so I thought it would be fun to steal a page from your book and mention who I visualize when I read your tasteless posts- that would be Barney. For those of you not familiar with the Simpson's, Barney is the worthless drunk who chronically belches while exhibiting certains flashes of brilliance on occasion. Yeah...that's funny!

To all: I apologize, but I think certain trash belong at "that other site".

Mythical

Yeah it was in bad taste. Too bad I'm right.

I had to address your owning that Browning 10 Guage. I'm a country boy myself, and don't usually speak up about the fact that city ways are "just not for me".

I grew up with a Remington, but bought that Browning last year. the kick wasn't as hard, the accuracy was there, and I showed my friends up shooting skeets in the backyard. I'm a Southpaw, so I bought the BPS with the feed/ejection out of the bottom. Overall, a high quality shotgun.

I have to admit I am sick and tired of reading these posts with you snabbing those ducks(smile). Around here(southern Nebraska in Superior, look at yer map) we live in the flyway, but it seems the only ducks we get through here are those damn snow geese by the hundreds of thousands. They blanket the sky, but they also taste like liver and kidneys...

In the early fall, the best hunting thats available around here are the mourning doves. The best darn meat in the world...cooked properly that is. Other than that, the pheasant takes the cake.


You know...I can't wait for gold to rise. I don't care(well actually I do) if FOA's target is reached, I'm just waiting for the party that is going to commence afterwards. I'm looking forward to meeting all the posters and lurkers alike. This ought to be interesting...

Of course, this has something to do with gold..Ain't those Browning triggers pretty?

The Country CoinGuyView Yesterday's Discussion.

In Wednesday's commentary, Michael said that "We could be as little as one Enron away from its greatest rise in history"
USAGOLD (12/5/01; 09:27:52MT - usagold.com msg#: 66435)

I am wondering whether Argentina is not that next Enron.

Black Blade's msg 66526(�Compre Oro no los D--lares! �No conf'e en el gobierno! Proteja ustedes mismos contra el desastre econ--mico y compre oro para seguridad econ--mica) of last Thursday from which the title of this message is taken was 'translated� as follows by the BBC:
"The big problem the [International Monetary] Fund has with Argentina is the same that investors and Argentines themselves have - we don't have faith in the ability of the government. So the Fund should not believe promises the government makes will be fulfilled," said Aldo Abram, an economist with consultants Exante.
http://news.bbc.co.uk/hi/english/business/newsid_1698000/1698399.stm

Last time I checked Drudge was still posting a message from DPA saying that
(Argentine Interior Minister Ramon) Mestre said that the need to present a united front was such that President de la Rua might even be meeting on Friday afternoon with his predecessor, Carlos Menem, to forge a political agreement between the ruling Radical Civic Union party and the Peronists
http://www.drudgereport.com/flash4.htm

The article also said that Cavallo went back to Washington on Friday. The BBC reports that the talks failed and quotes Cavallo as saying
"I am leaving because we have to work with the president, the cabinet and the provincial governors so that we are sure we are able to what's necessary so that Argentina inspires credibility," Mr Cavallo said.
http://news.bbc.co.uk/hi/english/business/newsid_1698000/1698399.stm

Tomorrow, Monday December 10, there's a general strike in Venezuela.
NEW YORK, Dec 7 (Reuters) - Wall Street investors braced for a general strike in Venezuela on Monday, amid worries that political missteps in the standoff between business leaders and the government might escalate into violence.
http://biz.yahoo.com/rf/011207/n07311992_1.html

Yes, I know Argentina and Venezuela are not neighbours but they share the same half-continent, but if Argentina is going to influence all other emerging markets and thereby the rest of the world, will it not be itself influenced by events in Caracas?

To paraphrase Henri's msg#: 66485 of last Thursday: Who's John Galt (for goldbugs)?

Your posting # 66556 about deflation/zero rates : Answer is covered by miner49er's (Brilliant) post of # 66639.

To all silver believers : Apart from the supply/demand and LT abysmal pricing of silver...will it be considered as a permanent "store of wealth" in the coming total collapse that is threathening the currency (money) basics ?
If Gold's Valuation, moves into the forefront again, and goes ballistic (far beyond 600$)...will silver not be abonded, somewhere down that road and join the dominating ruling of Gold ? I personally am afraid that this might happen, considering the big picture. Silver as more a commodity than Gold, become less commodity and more money again.

http://www.sunday-times.co.uk/article/0,,9008-2001570057,00.htmlIt is ironic that the demise of the D-mark should have uncovered such a huge cache of undeclared earnings. The D-mark's arrival in 1948 rescued a nation mired in the black market. But more recently the market has re-emerged and grown, though for different reasons.
Post-war Germany was a wasteland that survived on barter; 21st century Germans are siphoning off the fat of the land into baubles, Mercedes cars and foreign accounts.

====

The article doesn't speak about flight to gold contrary to the article in Der Spiegel mentioned in
The Invisible Hand (11/17/01; 19:12:57MT - usagold.com msg#: 65506)
Flight from the black Deutsche Mark to the yellow
http://www.spiegel.de/spiegel/0,1518,168276,00.html

Perhaps manipulation is preventing the POG from displaying the influx of pre-euro money. Who knows?

As a first brief recap of the N.O. Investment Conference, which traditionally is the meeting place of 'benign' contrarians, I couldn't help but notice that even some of the most sturdy anti-conspiracy guys have begun leaning towards using increasingly stronger words in this context.

- Starting from intervention, certainly a heavy hand to hold down gold, outright manipulation, gold cartel and cabal to conspiracy were the terms used in describing the
gold market since 1995, even by some of the most ardent believers in the theorem of demand/supply driven (free) markets. - The action of the gold market of the last few years can't be rationalized as typical market behavior driven by fundamentals any longer.

As MK said in his great essay a few days ago - we may be only one more Enron away - before the gold frees itself from the shackles of the cartel has gained credibility.

Any event from here on may spark gold's meteoric rise. Is it Anglo's double speak Bobby G. is "sweating bullets" (thanks for coining this term, whoever takes the credit) as Peter Munk may also start re-thinking the wisdom of opverhedging at a long market bottom building, the NEM/FN/NDY merger has a fair chance to succeed and, yes, another Enron...

Following is quoted from Bob Chapman:



FOCUS STOCK � Gold, A Cycle Opportunity:

Over the past twenty years gold has been manipulated down by Central Banks. It has been demeaned by New Era investors as a viable investment vehicle and generally struggled within a strong dollar and dis-inflationary environment. So it is within this extreme cycle of abandonment by individual and professional investors that is allowing a confluence of positive factors to develop in unrecognized fashion that is creating a 12 to 18-month cycle play for gold, that has the potential to triple the value of the XAU index over that period of time. Gold responds well historically during periods of extremes. Economic fundamentals are now at points of extreme, in terms of deflationary unwinding, as well as combined fiscal and monetary stimulus, along with technical evidence that the CRB index and copper may have bottomed, and it may suggest a new cycle of inflation is just ahead. Pronounced deflation or inflation is supportive for Gold as a value anchor and a viable tradable currency. Our war effort worldwide is at its greatest commitment since World War II. Year over year gold demand continues to out-pace production. While the list of viable producers has diminished, most marginal producers have gone out of business. And there are no new production projects of any great degree planned in the near future. Gold is at extreme levels of under-ownership at this point of the cycle, so that the least amount of positive shift will have a dramatic affect upwards on pricing. Technicals are now aligned more positively and match points over the past 20 years that resulted in rallies for physical gold of $100 to $200/oz. Finally, the shift of ownership for gold above ground has gone from weak to strong hands. Because we believe that downside risk is minimal, we suggest a weighting in one or two gold stocks equal to 5% for a conservative portfolio and up to 10% for aggressive portfolios. This is a cycle play only at this time.
unquote -

More later - with regards cb2

I noticed that Chapman of the International Forecaster
is recommending AEM (Agnico-Eagle) as a Silver mining play.


Since they are also an unhedged gold miner, it is looking to me like AEM is a good gold/silver play. I havent had time to research their current silver production, but they have a reputation as a silver miner.

Any thoughts?

http://biz.yahoo.com/rb/011208/business_economy_argentina_dc_3.html
Snippit:

BUENOS AIRES, Argentina (Reuters) - Argentina's Economy Minister, Domingo Cavallo, said on Saturday he was coming back home from ``very, very good'' meetings with the IMF in Washington but likely faced a political maelstrom over spending cuts needed to rescue the country from disaster. As Argentines flooded banks, worried their savings could be vaporized by a major economic meltdown, Cavallo put a positive spin on talks aimed at coaxing $1.3 billion in badly needed frozen aid from the International Monetary Fund.

Despite widespread fears that the debt crisis could lead Argentina to devalue its peso currency -- which would instantly bankrupt thousands of people -- politicians and many on the street dread the idea of further budget cuts. With social tensions bubbling -- after egg-throwing protesters pelted the Central Bank last week and sharks from the opposition
Peronist Party said to be circling weakened President Fernando de la Rua -- forming political consensus was expected to be anything but easy. Paying the price for years of runaway budget deficits, De la Rua's government has hacked several billion dollars off its spending plans since taking office two years ago after promising to spur the economy.

Argentines were taking no chances, betting the IMF would refuse the funds and send the country tumbling into financial ruin and devaluing their savings. ``I'm not taking any chances,'' said Sonia Verbitich, a 52-year-old housewife, as she waited in line at a cash machine on Saturday. ``I've seen crises before but this one looks really bad, so I'm taking out as much cash as I can.'' Most large banks worked overtime on Saturday, opening their doors for extra hours to attend to jittery customers. Argentine banks have seen deposits decline about 17 percent this year. Over $1 billion left the system on just one day earlier this month. That run led the government to slap strict limits on bank withdrawals, limiting Argentines to just $250 a week in cash withdrawals for the next 90 days until Cavallo can sort out the country's debt problems with creditors. The tough rules slowed withdrawals, but at a steep price: the ensuing cash crunch has frozen consumer spending, with retail sales down as much as 80 percent last week compared to the week before, a merchants' group said on Saturday.


Black Blade: This does not look good. Just this last week the Argentine government confiscated pension funds to pay its bills. It looks as if revolution (again) is a possibility. Maybe they will sell off the last of their gold Argentinos and we might see some of them show up at the castle. Who knows?

Invisible Hand,

We should see a lot of fallout as the Argentine situation deteriorates. Russian Bond Default, LTCM, Asian Contagion, Global Recession, etc. It seems as if it is one thing after another and the FED and IMF are like the little Dutch boy sticking his fingers in the dike to plug all the leaks.


Coinguy

Got a couple of mallards this morning just down the road and going out again in a couple of hours. The 10 gauge is a hefty gun. Probably not a lot of kick because of the weight. Yes, that is a nice gold plated trigger and a bit of gold inlay on the engraved underside of the trigger guard. Nice engraving of ducks on one side and turkeys on the other. Snow geese? Now that would be fun. Hope to nail some Canadians soon (geese that is). Cheers!

I was discussing the money center banks short exposure,and incentive to keep POG low w/ friend last night and he suggested that, contrary to Hamilton's argument that JPM's incentive to keep POG low is to keep from blowing up their delta hedge position, rather, their 2 primary reasons are 1)greed - the gold carry trade has been a license to print money for them, and 2) their desire to keep their customers from blowing up their hedge books (Ashanti style). He also argues that JPM has no real short exposure to POG. In short, mining company A sells forward, bank B buys option from A, B leases gold from central bank C @ say Libor -1, sells it at $x and reinvests @ say Libor +1, this profit pays for option bought from A. If POG didn't move this becomes a scratch trade for B except for commissions (peanuts). They do however now own a free option (long calls) However, if POG goes down they purchase gold at a price below $x and there's your profit (on the profitable short sale). If POG were to rise they own the calls bought
from A, thus no exposure to a rise in POG. What a deal wouldn't we all like these types of 'no-risk trades'.

Take it a few steps forward.... do the banks really care for their customers that much, yeah right.....greed - well if the POG were to explode they could make one hell of a lot more $ from the free calls they own. The central banks must be complicit in some sort of deal. If they're not one must assume that 1) the banks are greedy, but 'not that greedy' and 2) they really do care about the fidicuary duty to their marks, er,...I mean customers.

http://www.dailyreckoning.com/speculator9/sec1.htmlIt should be remembered that silver has preceded gold in monetary uses historically, and has outperformed gold when the small buyer increased relative income to the high and mighty. Why? because it is the "poor man's gold" and a one oz. coin costs much less than the minimal 1/20 th ounce gold piece (which is nearly a spec of dust). Considering that the rich are business owners and their executives, it would stand to reason that during a recession, which is the loss of business' profit power, silver outperforms gold. Gold tracks profits and silver tracks revenue just as labor earns the bulk of revenue.

For less than the price of two 1 oz gold pieces one can (if they find any) buy a 100 oz bar. For the 5 oz. silver buyer, the alternative is a 1/10 oz gold piece or two. And that 1/10 th oz piece is not going to be divisible, but the 5 one oz pieces would.

So, if you are rich because you owned the cash flow from a business but your labor costs have come too close to revenue to provide you much cash flow, then you simply lose your income. Labor, which was priced out of your employment would obviously have the upper hand in relative incomes going into a recession. Indeed, the recession's main characteristic (as it was of "stagflation" in the late 60s and 70s) was a rise in relative incomes of wage earners to business income. Over the stagflationary 70s the ratio shifted from early 60's 33% business income to labor income, to 21% in 1971, to below 15% in 1982. The ratio flattened and rose slowly through the 80s and peaked at a near 1960's 26% level in 1998, from which point it went to below 20% at the end of September.



As to the stock of silver in weak hands and the leverage of silver derivatives in relation to annual production, governments (i.e. weak hands) no longer hold substantial silver stocks despite the bulk of silver being landed in the US like a heavy rock during the "demonetization" of silver in Europe of the 19th century. The silver coinage stock hanging over the markets for decades has finally come to an end. Remaining silver stocks not in private hands are minimal. Those in monetary silver bar form are miniscule and becoming disproportionate to derivatives - about 1.4 billion notional ounces, 400 million netted. This compares with 1.6 billion and 800 mil netted in 1997, when silver rose nearly 60% (these are estimates from LBMA and OCC data, not hard numbers - and may be considered as having a +/- 20% error).

Gold stocks at central banks, though shrouded in obfuscatory book keeping, are still providing a heavy overhang relative to silver. Though FOA and his thieving "giant" friends have no intentions on creating a silver bubble as they do in gold, it is silver that is stretched thinner.

If we use LBMA transfer volumes as a guide to liquidity in these markets, then while gold clearings fell 40% since 1997, silver clearings fell 65%. Furthermore, copper producers have shut down some capacity, thus lowering silver supply while gold exploration has become much cheaper (see Doug Casey's article at URL above), and his arguments for increased gold demand from newly industrialized Asia hold doubly for silver.


Silver clearings at LBMA fell from 8 times gold clearings (in oz.) to less than 5 times. That indicating a greater tightness in silver than in gold, considering that silver is historically produced at a 1:13 to 1:15 proportion to gold.


Thus if silver supply is leaner than that of gold relative to demand, then the result of a "gold bubble" resulting from ECB and other central bank's purchases of gold to "back" their currency would be a substantially higher proportional rise in silver prices, as the excess gold price rise caused by CB purchases in Another's "better gold standard" would bring a large scale accumulation of silver in private hands to replace gold taken by central banks. Thus silver could very well be the first revived monetary metal resulting from the CB's artificial "gold bubble".

We'll have to discuss this more carefully later.

If Hamilton's right and the banks have short exposure to a rise in POG, then it is the result of cowboys at the desks, ie. Nick Leason. Possibly they are so sure this is a gimme trade by the guv, that they are in fact short calls up to their eyeballs. These short volatility traders see the selling of options as printing money, and some love to pick up nickels in front of a steam roller.

Shame on Mr. Chapman; only 10%??? He must be referring to gold cufflinks alone eh?

Are we being set up for a devaluation in the dollar? Consider this: Bush/Putin agreement to limit Russian oil output and thus a decrease in its price (good for economic recovery, hedge against terrorist disruption of supply, and rise in the price of crude to $26 after dollar devaluation?); IMF refuses to help Argentina (they know that aid in the form of a 30%? dollar devaluation is on the way which would effectively reduce their bond debt by 30%); official debut of the Euro January 2002 (parity with US dollar would make its acceptance a little more likely though it would make their exports more expensive); Gold funds going short, commercials going long; Gold mining companies reducing the size of their hedge books; Enron disaster; Plunging 30 year bond; JPMC's interest rate derivative book; dwindling US gold and silver reserves; running out of interest rate cuts; and did you know that 3 out of the 4 people occupying the office of the Secretary of the Treasury during major devaluations since the 1970s were Texans? (John Connalley, Lloyd Bensten, and Jim Baker, excuse the spelling).

Any such historian of numbers may impress the idle public by his skill at driving a car forward with a blackened windshield, cleverly using the rearview mirror as his guide. Alas! The road turns, as does his fortune.

ORO, forgive me for entering into the fray, but I was appalled at your statement about "FOA and his thieving friends." That was a slanderous thing to say. You have no proof that FOA and his friends are thieves. It is far more likely that FOA and ANOTHER are simply messengers trying to warn us of the upcoming financial storm. And you want to shoot them because you don't like their message.

ORO, you shouldn't make such terrible charges without serious proof, which you can't possibly have without knowing who FOA is and exactly what his role is in the coming events.

RE: OROI completely agree with you. There is no reason to be so rude and inconsiderate.

ORO: I have read several additional sources/opinions that draw the same conclusions as FOA. I believe FOA is drawing conclusions based upon knowledge and experience. You believe he has an agenda. Perhaps we are both right. Nevertheless, your ideological differentiation does not require insult and slander for your point(s) to be made.

"Gold stocks at central banks, though shrouded in obfuscatory book keeping, are still providing a heavy overhang relative to silver. Though FOA and his thieving "giant" friends have no intentions on creating a silver bubble as they do in gold, it is silver that is stretched thinner."


ORO,

Statements like this aren't necessary to get your point across, nor do they lend to strengthening your argument. I happen to believe you have the most profilic well thought out posts on this site, and I was enjoying the read, but statements like these I have seen keeps this from being the well-lit clean place I think we all enjoy.

I've never seen a direct insult from the other party mentioned in your comments, this lends itself to others believing this is a continous personal attack on FOA.

Most people can overlook a point where you take apart Anothers argument, here and there, and understand your point, and these "points" are well taken, but these "personal" attacks grow tiresome over time.

For the sake of the board, can you please refrain?

Gold to the moon...Silver too

The CoinGuy

Maybe Mr. Chapman really meant 100%?
In actuality this paragraph posted called "A Cycle Opportunity" is by Nick Russo and his newsletter called Momentum Monitor. Robt. Chapman gave full credit for this piece in his Cafe post, but not in his GE post, thus the confusion, apparently.

Personally, I'm gonna take it as a typo, no?
Kind Regards!

Excellent perspective, nobody's fool wrote that post.

Let's see about a dollar devaluation:

POG at $ 275......... add in an additional 30%.......takes us to approx $357..........not bad for starters!
Alas, it appears as though THEY can keep the lid on the suppressed gold market for 3 more weeks to finish out the full year. OR CAN THEY????

I thought ORO's post was very informative and IMO, Another and FOA are quite capable of defending themselves if they feel the need.

Overlooking the taking apart of a point, and with good reason, means that you will forget that someone disagrees with your guru.

We MUST keep an open mind to ALL ideas and Yes, question them, take them apart and see if the idea can withstand scrutiny. If not, then it is not valid

ORO: Please keep offering your opinions, so that we can make comparisons with opinions of others. I found nothing offensive in your post, only opinions.
Later, Interstate

http://biz.yahoo.com/prnews/011209/lasu002_1.htmlNewmont wants it bad!

I'm simply filling in a gap here for those that are missing some Trail activity, OK? Please don't take me too seriously, as that is usually a mistake.

Don't buy mining shares.
Don't buy gold futures or options.
The US$ is failing, the Euro is preening.
Ignore the fundamentals of silver, they're a big lie.
Stick with physical gold for the future it will hold.
Paper can pack quite a charge, but is ephemeral.
We must wrest control of the gold pricing mechanism from the Western 'markets'.

Who are FOA and Friends? Friends of the Euro, no doubt, and thus Friends of fiat, what else is possible? Certainly Friends of gold {in hand} and certainly to the benefit of the fiat Euro. Which is their BEST Friend, gold or Euro?

Eurocrats, Bureaurocrats, Aristocrats, Western-rats....... choose your pison carefully, eh?

Oh, by the way......This guy is most sincerely grateful for the FOA message!

Looks like NEM topped AU counter offer (which was "the last" offer according to AU Spokesman) substantially and NDY Management approves and will advise shareholders accordingly.

If correct - a major feat for non-hedgers and a major feat for physical gold - and unhedged miners ... times are a' changing...

Cheers - cb2

Thank you Belgian, I just returned from the weekend scout camping trip and was wondering if anyone had addressed the issue. Your post was a welcome milepost marker in the daunting task of trying to catch up.

Thanks once again

http://biz.yahoo.com/rf/011209/syb006207_1.html
Snippit:

SYDNEY, Dec 10 (Reuters) - Takeover target Normandy Mining Ltd said on Monday its board recommended shareholders accept a revised A$1.90 a share bid from Newmont Mining Corp (NYSE:NEM). The latest salvo in a bidding war between U.S. group Newmont and South African rival AngloGold, offers shareholders 0.0385 Newmont shares and 40 Australian cents for each Normandy shares, a 15 percent premium to AngloGold's rival offer. ``The offer is above the recently revised AngloGold offer by a good margin, which is a great result for Normandy shareholders and consistent with the Normandy board's objectives throughout this process,'' Normandy chief executive Robert Champion de Crespigny said in a statement to the Australian Stock Exchange.

Black Blade: This NEM counter offer was expected as Normandy told shareholders to wait for the NEM response. As desperate as AngloGold is I would expect Bobby Godsell to tender a counter offer unless he absolutely can't afford it or get a loan. Maybe AU and ABX will throw in together as both of these hedgers are extremely desperate to keep the POG in check. If NEM begins to unwind 9 million oz. of Normandy edges it will mean "Game Over" for Gold shorts AU and ABX. If the POG rises, both AU and ABX are toast.

I don't disagree with anything you said. ORO's posts are healthy blood for the forum, and I thoroughly agree that all opinions should be considered, but personal attacks don't lend strength to any argument? Do they?

I must not have explained myself well enough. I enjoy ORO's posts. When I check into the forum, as I have been doing for years now. I always look forward to a post from ORO, his clear concise arguments are always well written
dissertations of whatever topic he has chosen. "Always" a pleasurable read.

I realize FOA/Another can defend themselves, and I don't feel as though I need to put my .02 in on their behalf.

To the contrary, I was putting my big mouth in on Michaels behalf because he has been kind enough to allow a forum with little moderation, "a clean well-lit place" where forum members should be able to express their opinions free from personal attacks.



I was clearly commenting on the remark, not the person who made the remark, or in defense of to whom the remark was meant.

This was my point of contention, if it wasn't clear, I apologize...

The CoinGuy

I'm not quite sure if they can wait until the end of the year. It will depend on how serious the Argentina/Enron situation becomes (1998 revisited-Russia/LTCM however this time their are too many balls to juggle). Alan Greenspan is running out of options. Sorry, I noticed I left out the word "not" in front of "to limit Russian oil output..."

An argument directed at the speaker and not the facts or logic of his argument...generally used when the facts do not favor the individual using this form of fallacious argument.
Those of us on this forum have enough enemies outside the gold community. Please,let us be civil to each other.

http://biz.yahoo.com/rf/011209/syd216379_1.html
Snippit:

Analysts said the new bid, which is above the top end of an independent expert valuation from Grant Samuel & Associates of A$1.48 to A$1.88, would make it very difficult for AngloGold or any other interested party to stay in the race. ``Newmont have bid what they hope to be a knockout bid above the top end of the expert valuation of A$1.88,'' said Commonwealth Securities resources analyst John Cathcart. "It will make it difficult for AngloGold to come back with a counter bid as they will be paying far more than the independent expert valuation,'' he said. Cathcart did not think the door was completely closed to new bidders such as Canada's Barrick Gold (Toronto:ABX.TO). However, he said the bidding had probably reached its highest point.

Black Blade: I would suspect that miningweb.com "analysts" Tim Wood and David McKay are really bummed out tonight as their masters backed the losing horse. I figured that this race had a long way to go to the finish. It still may not be over. There is a lot more at stake than what appears on the surface.

www.binladen.com/options/oi/435748432/$25millionI've been thinking HARD this week-end and I have come up with this. If gold has a nice run this week I will make some decent coin. If gold flips and flops I will have to strike up some dough the old-fashioned way.

Now I hear that Mr. Laden's head is worth 25 million, eyes blinking or not.

And I've been hearing that this world is getting turned around worse than #8 Robertson woodscrew. The Phillips screw was patented in the States but the Canadian 'square' Robertson was issued here first, in the bona-fide True North.
(Rumour has it that Eskimos secure an igloo with #10, 3 inch self-tapping screws between ice blocks.)

So. . . . . in the unlikely event that I do not make a 'piss-pile' of 'money' this week I
have taken the unprecidented task of booking a one-way flight to Afganistan. The back-up plan is to capture the 'Binster', book the 25 million. . . . . and . . . . let's say. . . . . . . . .lie low.

After a day or three, I may call a fervent news station and tell them that Osama and I are hanging out, lying low playing some 'Monopoly' and 'Risk'. This is to attract attention. Soon I suspect, a monster crowd will gather outside of my motel room and I will open the door revealing a 'duct-taped' Bin Laden. I know my god-damn rights so I can turn over Mr. Laden or I can negotiate a better deal for his release.

The opening bid for a 'swap' option will be $26,000,000. . .. . . . call options on the man's life expectancy will open at $1,000 per contract at a strike price of 41. . . . expiry to be determined. Shares prices in the motel ('End Of The Road'; ETR, Nasdaq) I imagine will increase sharply from 17 cents to $3,200 but I expect traders open interest to fall off dramatically after expiry of DEAD0102OBL.


I was out this week-end and got my brokerage license Saturday morning so I will personally handle all transactions, I pre-warn any of you paper-players not to mess with me because I have my 20-hour futures and options certificate. Opening bids can be forwarded to the above link.

Canuck, B.S.A.

I'M COMING WITH YOU. (multihead screwdriver is packed.)

A friendly, level-headed offering of statistics, comparisons, and conclusions is "discussion" and enthusiastically welcome here 24/7. Whether it is reasoned, impartial, and decisive conclusions that "take apart" an idea or theory is subjective. Oro's points do not go beyond opinion, especially when offered without reasoned conclusions and with assumptions of future silver affinity and offtake. Abstractions, generalizations, and presumptions are fine when offered in the right spirit, but I won't be convinced by seeing them over and over with or without accolades from anyone.

So now the push is for a Au/ABX/NRDY merger.

What happens in this event?

Are you a Canuck dude?

You'd better hurry up. The Drudge Report says that Osama's going to commit suicide on TV.

Will that be "Pay-Per-View"?