Is anyone else having trouble accessing Kitco and /or Quote.com info?
I can bring up Quote.com, but it wont display the spot price overseas. Just a blank window, where it usually shows the spot/ask/settle 30 minutes delayed.
Kitco wont come up at all.
Does anyone have a good site where you can see the spot price overseas in real time?

$301.10.

This just in from GATA:

Good read!

9:15p EDT Thursday, September 30, 1999

Dear Friend of GATA and Gold:

Here's an essay by GATA's vice chairman and treasurer,
John D. Meyer, founder of Berkshire Financial Advisors
in Great Barrington, Mass., and a 30-year veteran of
the money-management business, posted at
www.lemetropolecafe.com.

Better than anything else I've seen, John's essay
explains the meaning of the decision by the European
central banks to stop facilitating the gold carry
trade.

Please post this as seems useful.

CHRIS POWELL, Secretary
Gold Anti-Trust Action Committee Inc.

* * *

THE WORLD DECLARES MONETARY INDEPENDENCE
FROM THE U.S. DOLLAR
AND HANNIBAL'S WORST NIGHTMARE BEGINS

www.lemetropolecafe.com


By JOHN D. MEYER
Vice Chairman and Treasurer
Gold Anti-Trust Action Committee Inc.


September 28, 1999

Three cheers for Midas Murphy!

Pinch me quick and tell me I'm not dreaming. How can
this be? Fourteen European central banks plus even the
English Poodle announce that they will restrict gold
sales and lending for the next five years. In one
dramatic sweeping step the reign of terror besieging
the gold bullion market has been broken. But the
question remains: Why would the European central banks
wish to reassure the gold markets?

For many years the gold world has been throttled by
perceptions and short selling. Central banks gold sales
were in fact never the problem, but the gold lending
and the well-orchestrated propaganda directed by the
United States was. Since early 1996 the threat of
central bank gold sales and a raising volume of gold
lending strategically timed and presented by the
mainstream financial press attacked gold whenever an
uptrend threatened. This has now ended.

THE TWILIGHT OF THE DOLLAR

With the monetary system facing the greatest defaults
since the 1930s, the manipulation of gold, the ultimate
preserver of wealth, serves precisely to conceal the
bankruptcy of our current monetary system.

Single events often appear distant and unrelated, yet
with a more critical eye they can be seen to be part of
a pattern. It is my position that the European central
bank announcement is a defining moment in monetary
history. The propaganda windmills, mostly English
speaking, would have you believe that money is a
creation of government. As Martin Armstrong liked to
say, gold has been demonetized.

We hold a different view. Namely, that money is
determined by a market process. The European central
bank decision is a major part of this market process,
which has two consequences.

First, it partially restores gold's monetary role.
Second, and more importantly, it is a determined
attempt to turn away from the dollar as a reserve
currency.

The reality is that the greatest crisis in credit since
the 1930s is under way. While the problem may appear to
have begun in Asia, in fact its origin is a monetary
system that allows the United States to have "deficits
without tears." Every nation in the world has suffered
as they have been forced to import our inflation (that
is, to buy dollars and U.S. debt) because it is the
reserve currency of the world's financial system. The
dollar as the reserve currency forces other countries
to accept our paper as payment for their goods and
services. Jacques Rueff named this dirty little secret
"The Monetary Sin of the West."

Our global monetary system is dysfunctional. The Asian
currency epidemic was the first act in a play destined
to take down the U.S. dollar. Starting with Mexico in
1995, Asia in 1997, and Russia and Brazil in 1998, we
have experienced an escalation in each crisis as larger
and larger countries are ravaged. The monetary mischief
of competitive currency devaluations claimed its first
victim in North America with the collapse last fall of
Long-Term Capital Management.

As 1998 was ending the Japanese authorities (December
22) blind-sided the financial markets, saying that they
would cut back their purchases of Japanese government
bonds. Japanese long term bond prices were pummeled and
the U. S. dollar crumbled. Then on Jan. 1, 1999, Prime
Minister Obuchi proposed the establishment of a
monetary system composed of three key currencies -- the
yen, the dollar, and the euro. Japan signaled its
intention to internationalize the yen turning it into
the key currency of Asia.

On Sept. 20 this year, despite warnings, the Bank of
Japan refused to ease monetary policy to curb a rapid
rise in the yen against the dollar. A week later the
European central banks befriended gold.

The Russian default in 1998 launched us into a new
phase of this meltdown, which directly affected the
derivative arena. Default has been staved off for
decades through credit expansion (i.e., bailouts). New
debt piled on the old. Finally, when the excesses are
too great and the economies too anemic, default becomes
the final solution. Default immediately exposes
systemic weaknesses. Since derivatives are leveraged
contracts dependent upon an underlying "asset," default
of the underlying asset immediately wipes out that
derivative. The wizards' computer model programs are
not programmed for events that might cause a non-
standard deviation movement.

For the Federal Reserve to admit that a single hedge
fund, with a mere $4 billion in equity, jeopardized the
entire financial system is an admission of a profound
failure in the Federal Reserve policy. What can be the
justification for bailing out a den of gamblers?

It proves the mutual dependency and just how cozy the
alliance is between Wall Street and Washington. LTCM
was bailed out because government officials realized
other hedge funds and Wall Street trading desks had
similar leveraged positions. This crisis is still
largely unknown to the public. It is the story of the
"carry trade," the naked borrowing of yen and gold to
finance these extraordinarily leveraged positions of
the financial community.

Between August and October 1998 the yen fell from 147
to 112. Then, on Oct. 15, facing a breakdown in the
interbank payment system, the Fed initiated the first
of three rate cuts. As 1999 commenced the U.S.
financial system had been brought back from the brink
by another massive ballooning of credit.

These fixes have merely exacerbated the underlying
systemic risks. After decades of a policy of "too big
to fail," the Fed's unwillingness to address underlying
structural problems of debt has led to putting the
entire system at risk.

The Bank of Japan and the European central banks are
declaring an end to this state of affairs. The U.S.
financial markets have become a fool's paradise, and
the affairs of LTCM down to the current scandals
involving Martin Armstrong and others have not been
lost on the global banking community.

As a young man Alan Greenspan wrote an essay titled
"Gold and Economic Freedom," detailed the cause of the
1929 crash. It appears to me as though he repeats the
mistakes he accused the Fed of committing in 1927-28.

That is, Greenspan has created a bubble
(hyperinflation) in our financial markets. Wall Street
has become a casino. The greatest fear for the central
bankers of the world is the U.S. dollar, which
comprises the bulk of their monetary reserves.

For years now the mainstream gold analysis has been
fixated on the supply of gold. This is not the issue.
The critical determinant in the price of gold
ultimately is the supply of DOLLARS. As the United
States is the world's largest debtor nation, with
endlessly mounting trade deficits, negative savings,
and inflated security markets, it is not hard to image
the fear motivating recent developments by the Japanese
and the Europeans. Enough is enough. Gold reserves are
not the problem for central banks but rather their
excessive position of dollars, which has entered a
major secular downtrend.

THE COMING DOLLAR BACKLASH

The European central banks' new gold policy must be
viewed as an aggressive escalation in their policy to
establish monetary independence. The world has crossed
the threshold into a monetary system that will be
comprised of three reserve currencies. Gold is no
longer to be held hostage to American monetary policy.

On this point it is quite interesting to see that the
English Poodle, in an obvious break with its American
friends, has turned its leash over to the Europeans.

It will be interesting to see what response the Bank of
Japan will make to the European central banks. An Asian
yen-backed currency has a long way to go to equal the
gold reserves backing the dollar and the euro. Until
now the currency world has been engaged in a
competitive race to the cellar. It could be that the
race for competitive legitimacy has begun. Central
banks' bids for gold are likely to far exceed the sale
limits just established by the Europeans. The historic
actions by the European central banks and Japan over
recent days are extremely bearish for the dollar and
U.S. financial markets. So far the markets have failed
to understand this.

WHERE DOES GATA GO FROM HERE?

As treasurer of GATA I wish express our sincere
appreciation for the support from hundreds of people
who have rallied to our cause. Your letters and notes
have been a source of strength to the committee. We
salute and thank you. We are likewise indebted to a
select and courageous few within the gold-mining
community. Unfortunately most mining companies have yet
to come on board.

Clearly the surge of events is vindicating and
confirming the task set out by GATA. No matter how
sweet this first victory may be, a long battle still
lies ahead. We need to capitalize on this moment by
moving on to the next level of our investigation.

It would be gratifying to see some of the senior gold
mining companies step forward to support GATA
publically. GATA Chairman Bill Murphy has detailed one
of our failed attempts (the "Vancouver Affair") to find
major corporate support. "Hannibal" seems to have a
long reach.

We have made many other attempts to enlist the larger
mining houses. One senior North American producer
approached us last spring and actually explored a
relationship with us for nearly a month. We cooperated
in every way, opening all our work for the company's
review. Then suddenly the company disappeared without
explanation. Phone calls were not returned. We were
just plain dumped.

Someday we may tell the world about that episode too;
the story rivals the "Vancouver Affair." For now we
continue patiently with restraint, but hope that the
larger members of the mining industry will awake and
throw aside their fears.

One way or another GATA is here for the duration. Keep
up the support. We will prevail.

A FINAL WORD

Murphy's heroic effort and foresight are only now
beginning to be understood. Bill and his Internet site,
www.lemetropolecafe.com, have nailed the events that
are now unfolding. If the Bank of England's gold sale
didn't convince the world that the gold market was
being manipulated, maybe a $60 explosion in the gold
price will. The recent extreme price action in gold
should show that the market has been suppressed. One
wonders how much it will take to generate an
acknowledgment of Bill's tremendous performance.

-END-


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

eGroups.com home: http://www.egroups.com/group/gata
http://www.egroups.com - Simplifying group communications

Friday October 1, 12:16 am Eastern Time
Gold price falters as signs of liquidity emerge
SYDNEY, Oct 1 (Reuters) - A unexpected injection of liquidity overnight and expectations of more gold hitting the market soon were threatening to end gold's dramatic bull run this week, bullion dealers and analysts said on Friday.

Spot gold was fetching US$297.50/$299.50 per troy ounce at 12:56 p.m. Sydney Time (0256 GMT) after slipping below $300 an ounce on Thursday, a first sign that the market's short covering rally had lost a step, dealers said.

Lease rates -- as high as 10 percent at the height of gold's dizzying ascent -- have recoiled to a still-higher-than-usual but more palatable four-to five percent, possibly responding to the Thursday announcement by African miner Ashanti Goldfields Co Ltd (Australia:AHA.AX - news) that it had restructured 80 percent of its hedge book, equivalent to 80 million ounces.

Lower lease rates encourage more borrowers.

``Gold must return to around $305 to regain the momentum,'' Keith Goode, an analyst for Bell Securities Ltd in Sydney said.

``It is looking quite vulnerable right now, and there is the danger of a bull trap,'' Goode said.

Gold rocketed to a momentary peak of $327.30 an ounce earlier this week as short position holders scrambled for bullion to minimise losses after 15 European central banks vowed to cap gold sales at 400 tonnes a year and keep leasings in check.

The ceiling on gold sales was largely in line with what the banks had been collectively disposing of in the past, but served to remove uncertainty over how the banks would manage their reserves.

Since the Sunday announcement, rumours of other official holders of gold taking up the slack with fresh disposals of bullion have abounded, although no banks have stated they were new sellers.

``Lots of fingers are pointing to Russia and other parts of western and eastern Europe, but so far it's just talk,'' said a bullion dealer in Melbourne.

The Ashanti announcement may have more do with market sentiment and perception than any actual new gold entering the worldwide trough, the so-called ``gold pool,'' where borrowers go for their bullion.

Ashanti said the restructuring was initiated before the gold rally as part of its contingency planning, Bell's Goode noted.

Also, it included converting a substantial component of the forward sales positions into synthetic put options.

``It means the gold didn't enter the system,'' Goode said.

Synthetic puts are established by purchasing of call options and a long or short underlying position.

In a further sign of diminishing volatility, the spread between bid and offer prices for spot gold narrowed to between $1.50 and $2.00 an ounce from around $3.00 on Thursday.

Spot gold and forward prices were for a period in backwardation in which spot gold is dearer than the future gold price -- an unusual situation for this market -- but prices had now converged, traders said.

http://biz.yahoo.com/rf/991001/l.html

below's link. oops.

http://www.gold-eagle.com/gold_digest_99/chapman100299.html"...That money was used to provide liquidity for world stock and bond markets, particularly the U.S. markets. That source of liquidity is now dead. Next we expect the yen at 103 to be borrowed and sold, the carry-trade and the funds will be used to keep the stock market correction at 15%-20% and 30-year bond yields at 5 3/4% to 6%. That action and with the help of central banks the yen will be moved down to 118 again. We can assure you the Japanese were reamed at the G-7 meeting for acting unilaterally. Unless the yen goes lower, that game will end in a few months and two sources of world financial liquidity will be gone. The third, carry-trade in the Swiss franc is over. The currency should trade down to 1.55 and could go to 1.65, but that's it. Thus, if these three sources of liquidity dry up, the gold carry-trade finished and yen and franc carry-trade limited, then banks will be forced to create liquidity. They'll do this by monetizing debt. That is the Fed buying U.S. Treasury Paper, which is immediately inflationary. Otherwise they'll print money which will show up in inflation in 6-12 months. Gold went to $329 and corrected back to $309. It will consolidate between $300-$320, then by the end of January should be attacking $350 an ounce. The bad news is the stock market will trade between 9200 and 11,306 for 6 to 9 months, then head lower...."

Leigh, we received 0.75kg with the other 1kg due for delivery next week.
It was on wednesday 29th september, that all the branch managers of BBL were called to an emergency meeting in Leuven regarding gold sales. I do not yet know the outcome of the meeting, but it would appear that they are still deliverying gold. Perhaps someone with some inside access to the BBL structure can enquire and enlighten us. FOX?

Chapman doesn't seem to take insolvent hedge funds into account. Or am I missing something? In 1998, we saw a crisis develop after LTCM was going belly up. The meltdown was averted by an astute Alan Greenspan and Robert Rubin. Since then, the re-established stability has been a fragile one and it was recently jolted by gold's new life. We don't yet know the full consequences of this jump in POG, but it's a pretty safe bet that some big financial houses and hedge funds are deep underwater.

Furthermore, what happens to the US dollar hinges on what the Japanese do. If they start bringing their money home, taking it out of US Treasuries, Wall Street and the dollar go down much, much sooner than 6-9 months. And as for the carry trades, they're dead. They leave very nasty burns.

Maybe I'm being a pessimist, but I wouldn't be surprised to see Clinton on TV by the end of October, talking to the American people about the deepening economic crisis. I've been wrong plenty of times before, but we haven't seen all the fallout from gold's resurgence.

http://www.metalsman.com/masterprices.htmTry this one.....

Platinum up $26??

http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999Delivery on COMEX gold contracts is usually the last Friday of the month. Trading on the October contract ends on Oct 27 and delivery is due on Oct 29. Expect a squeeze in about 3 weeks.

Leigh, i told FOA, Koan yesterday that i was getting back on (ole horse with no name) and to resume the race...must have caught them by surprize,,,,at this moment $422 up $31.
Maybe they don't know their way around the track,,,,no matter i'll gladly be their escort.....
BY the way...would you have the honor of naming my horse?? a good noble name perhaps... one that will motivate him???
Names are important ya know,,,, each one contains a certain karma....a winner/leaders name for he has assumed the leadership role from the start....as he goes forward the others then follow.... as he retreats the others still follow....looks like gold and silver are caught in my wake....OH well, Higher! Horse with no name!!

The other horse story, Ritch Man's Gold and Yellow Gold are getting tired of the evil owner stalking them with his S&P 100 rope.... they will try and charge him today, look for a fight to break out.....

i may be a little spooky.. but harmless... what did you expect to find in such an enchanted place as this...
a scarecrow with no brains??? ...only straw..(sigh)...
Love and Peace to all........and follow the Yellow Gold Road!.....

Goldspoon, you've got me baffled!! The horse with no name is the palladium horse, who is half dead right now. I thought the platinum horse was Ritch Man's Gold, and that he was running in the same race as Golden Sun and Silver Mood (I figured you'd changed the names of Yellow Gold and Hi Ho Silver). So now there are TWO races going on? What's the difference?

I can't think of a good name for the palladium horse because I don't know anything about palladium. Isn't it invisible or something? I mean, has anyone ever seen any?

I want the bear and the bull to come charging in and mess up the race. Can you work them in somehow?

Every time the gold bug gallery lets out a cheer... it spooks him....easy Goldspoon (talking to myself) you don't want to fall off again and hit your head or we'll never get where we're going....

That was a typo.

The October contract is relatively thinly traded and the shorts _could_ borrow to cover their obligations. It is possible that the day of reckoning could be postponed until the end of December.
The Dec contract has 128505 contracts open. What happens if 100000 contracts holders get delivery notices? That is ten million ounces! It hurts my head to think about it. To put that in perspective, Anglogold produces seven million ounces per year. They are the biggest!
Of course, this analysis is centered on the COMEX. There are other contracts to consider. Gold leases do not have any specific schedules and a large lease could come due at any time.
The end is near for the shorts. There is not much time to accumulate physical.

There are two stories going on...the first one is not a race..it's an escape from the evil owner...remember Stocks was just running around in the corral showing off to the bidders that were buying him and when he stumbled from running so hard Ritch Man's Gold and Yellow Gold jumped the fence to excape and run free..... and now the evil owner is trying to recapture them with a rope made from the S&P 100 stock index (it's 200 day moving average is very important to the future direction of the stock market if the average on the downside can be broken agressively money will come out of stocks to power gold higher....i expect to see a battle here today over this).....

Horse Race....FOA, KOAN, and myself were in a heated discussion about leadership of this race FOA favored GOld, Koan favored Silver, i did not tell them that i would be riding platinum.....
So i named these horses different names so as not to be confusing.....Golden SUN, and Silver Moon, and when platinum fell first (signaling the retreat of the rest) FOA quiped "it was a horse with no name" thus it neads a name...any suggestions from anyone or shall i name him myself.....if suggestions are submitted i have the authors privlige to pick....after all i'm trying to ride this unruley beast.... and the trick is he needs a good winners name...


My fault.... "only staw"....

not staw

Goldspoon, "Horse with no name" sounds like a good enough name, after all a band named America had a hit with the same title. BTW, s&p futures down 5 pts. I don't know what fair value is but looks like a the market open will be down if it holds. Gold is at $303 in London. Off to the races!

http://www.us.net/potomac/pencak.htmlbut first Dec gold up $6.50!

This was a case in a may carry state. My take on it is that the courts look for legal arguments without logic that support their bias. You decide.

The Carry Trades all seem to hurt somebody. Protecting that gold:

Christopher PENCAK, Plaintiff,

v.

CONCEALED WEAPON LICENSING
BOARD FOR the COUNTY OF ST. CLAIR;
County of St. Clair; Marion Sargent, in her
official capacity and individual capacity;
Jean Gibson Sturtbridge, in her official and
individual capacity; Det. Sgt. Michael Waite;
in his official and individual capacity;
Sgt. Michael G. Bloomfield, in his official
and individual capacity, jointly and severally,
Defendant.

No. 94-73073.

United States District Court,
E.D. Michigan,
Southern Division.

Dec. 16, 1994.

Applicant for concealed weapons permit brought action chaltenging county's alleged policy of blanket denial of licenses and denial, of license to him. On board's motion for, summary judgment, the District Court, Edmunds, J., held that: (1) county licensing board was legal entity which could be sued; (2) Second Amendment does not apply to states; (3) denial of license did not infringe upon applicant's rights to interstate or intrastate travel; and (4) denial did not violate due process.

Judgment for defendant.

1. Federal Civil Procedure [key]2546

Mere existence of scintilla of evidence in support of nonmovant is not sufficient to avoid summary judgment, as there must be sufficient evidence upon which jury could reasonably find for the nonmovant. Fed. Rules Civ.Proc.Rule 56(c), 28 Ll.S.C.A.

2. Counties [key]208

Michigan county concealed weapons linsing board is an entity that can be sued, t merely department of the county. C.L.A. � 28.426(1).

3. States [key]4.1(2)


Weapons [key]1
Second Amendment does not apply to the states. U.S.C.A. Const.Amend. 2.

4. Constitutional Law [key]225.1

Second Amendment does not provide invidual fundamental right to carry concealed weapon as to which strict scrutiny analysis would be applicable under equal protection guarantee of Fourteenth Amendment. U.S.C.A. Const.Amends. 2, 14.

5. Constitutional Law [key]83(6)

Weapons [key]12
Refusal of county concealed weapons licensing board to grant permit did not deny applicant the right to travel, even though he claimed that it deprived him of the right to migrate to that county from another county iere he had a license.

6. Constitution Law [key]83(6)

Right to intrastate travel is a basic freedom under the Michigan Constitution, and analysis of government burdens on intrastate under that Constitution is identical to analysis applied to government burdens on interstate travel under the United States Constitution.

7. Constitutional Law [key]83(4.1)

Not every policy that possibly burdens the to travel triggers strict scrutiny, as court must consider whether policy at issue deters migration or serves to penalize the right to travel. U.S.C.A. Const.Amend: 14.

8. Constitutional Law [key]277(1)

Property interests protected by due process clause do not arise whenever person has only abstract need or desire for or unilateral expectation of a benefit; they arise from legitimate claims of entitlement defined by existing rules or understandings that stem from independent source, such as state law. U.S.C.A. Const.Amend. 14.

9. Constitutional Law [key]287.1

Weapons [key]12
Applicant for concealed weapon ficense who had been ucensed in prior county of residence did not have due process rights violated by county's alleged policy of blanket denial of concealed weapons pernuts. U.S.C.A. Const.Amend. 14; M.C.L.A. � 28.426(1).



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

Christopher Pencak, Warren, MI, for plaintiff.

Laura Amtsbuechler, St. Clair Shores, MI, Eric Eggan, Lansing, MI, for defendant.


MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANTS' MOTION
TO DISMISS OR FOR SUMMARY JUDGMENT

EDMUNDS; District Judge.

This matter has come before the Court upon Defendants' Concealed Weapon Licensing Board for the County of St. Clair; County of St. Clair; and the members of the Board, Marion Sargent, Jean Gibaon Sturtbridge, Det. Sgt. Michael, Waite, and Sgt. Michael G.. Bloomfield Motion to Dismiss or for Summary Judgment.

Background

Plaintiff Christopher Pencak is an Attorney and "Pharmacy Consultant." For many years he carried a concealed weapons license issued by Concealed Weapons Licensing Board for the County of Macomb, restricted to two years while licensed as an attorney. The license expired on September 10, 1993. Some time prior to September 10, 1993, Plaintiff moved from Macomb County to . St. Clair County. Plaintiff applied in St. Clair County for a renewal of his license. He alleges that he was told by the county clerk that he should not spend his money for the renewal application because "nobody gets a CCW permit in St. Clair County. That is just the way it is." Plaintiff requested the renewal application nonetheless and paid the fee. He also requested an appointment with the prosecutor. Plaintiff alleges that the prosecutor told Pencak that the county had a policy of not issuing CCW permits, that the county licensing board would hold a hearing for him but that it would be futile, and that others have sued concerning this policy in St. Clair County Circuit Court but have been denied relief.

Plaintiff appeared at the hearing November 18, 1993 and presented his reasons for requiring his CCW permit to be renewed and his compliance with applicable law. Plaintiff contended that in his work representing criminal defendants and visiting pharmacy clients late at night he is subject to physical danger and therefore must be allowed to carry a concealed weapon.

The Board denied Plaintiff's application because it determined that Pencak did not provide compelling reasons for the issuance of a permit.

Plaintiff filed a complaint in this Court under 42 U.S.C. � 1983 asserting that the denial of his application to have a concealed weapons license by the St. Clair County Concealed Weapons Licensing Board violates the Second Amendment's right to bear arms, and the Fifth and Fourteenth Amendments and Michigan Constitution guarantees of due process and equal protection because he met all the statutory requirements to carry a concealed weapon, but was not awarded a permit pursuant to Defendants' blanket policy of denying such permits. Defendants' filed this Motion to Dismiss or for Summary Judgment, arguing that the St. Clair County Concealed Weapons Licensing Board is not a legal entity that can be sued, that the Board's exercise of its discretion to deny Plaintiff a permit was reasonable, and that Plaintiff has failed to establish a liberty or property inierest in either a license to carry a concealed weapon or to have his license renewed.

II. Standards of review


A. Standard for a motion to dismise
In considering a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) this Court "must construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claims that would entitle him to relief." In re Delorean Motor Company, 991 F.2d 1236, 1240 (6th Cir.1993). A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint. Elliot Co., Inc. v. Caribbean Utilities Co., Ltd., 513 F.2d 1176, 1182 (6th Cir.1975). . The complaint must include direct or indirect allegations "respecting all the material elements to sustain a recovery under some viable legal theory." In re Delorean Motor Company, 991 y F.2d at 1240. (citations omitted). A motion to dismiss a complafnt for failure to state a claim should not be granted "unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (citations omitted).


B. Standard for summary,judgment

In considering a motion for summary judgment, the Court may grant the motion only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). I As the Supreme Court ruled in Celotex, "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The court must view the allegationa of the complaint in the light most favorable to the non-moving party. Windsor v. The Tenneasean, 719 F.2d 155, 158 (6th Cir.1983). "Tho evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc." 477 U.S. 242, 256, 106 S.Ct. 2506, 2619, L.Ed.2d 202 (1986).

[1] But the mere existence of a scintilla of evidence in support of the non-movant is not sufficient; there must be sufficient eviice upon which a jury could reasonably for the non-movant. Liberty Lobby, 477 U.S. at 252, 106 S.Ct. at 2512. "The movant has the burden of showing that there is no genuine issue of fact, but the plaintiff is not thereby relieved of his own burden of producing in turn evidence that would support a jury verdict." Id. at 256, 106 S.Ct. at 2514. "Where the record taken as a whole could not lead a rational trier of fact to find for the moving party, there is no 'genuine issue' for trial." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1989) (citing Matsuda ELectric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, lO6 S.Ct. 1348, 89 L.E2d 638 (1986)).

III. Analysis


A. Whether the Board is a legal entity that can be sued.
[2] Plaintiff has named as one Defendant Concealed Weapons Licensing Board for County of St. Clair. Defendants argue the Board is not a separate legal entity but rather, a department of St. Clair County thus not a legal entity that can be sued. Hughson v. County of Antrim, 707 F.Supp. 304 (W.D.Mich.l988).

The Concealed Weapons Licensing Board for the County of St. Clair is a creature of state statute, not a department of St. Clair County. Section 28.426(1) of Mich.Comp. Laws Ann. provides that


[t]he prosecuting attorney, the sheriff, and the director of the department of state police, or their respective authorized deputies shall constitute boards exclusively authorized to issue a license to an applicant residing within their respective counties, to carry a pistol concealed on the person and to carry a pistol, whether concealed or otherwise, in a vehicle operated or occupied by the applicant. The county clerk of each county shall be clerk of the licensing board, which board shall be knows as the concealed weapon licensing board . . . .

Mich.Comp.Laws Ann. � 28.426(1). Further, the concealed weapons license itself makes clear that the concealed weapons licensing boards are state statutory creations. The top of the license reads "Michigan Department of State Police," "Michigan Concealed Pistols License." The license provides that the applicant is "hereby licensed by the Concealed Weapons Licensing Board to carry a pistol ..." and at the bottom of the license lists the issuing county. Based on the foregoing, the Concealed Weapons Licensing Board for the County of St. Clear is a state, rather than county, department. Therefore, it is a proper legal entity against which a suit may lie.
B. Second Amendment

[3] Plaintiff asserts that Defendants deprived him of his right to carry a concealed weapon guaranteed by the Second Amendment to the United States Constitution. Plaintiff's Second Amendment claim is not viable because the Second Amendment does not apply to the states. "The Second Amendment declares that it shall not be infringed, but this . .. means no more than that it shall not be infringed by Congress. This is one of the amendments that has no other effect than to restrict the powers of the National Government. Presser v. Illinois, 116 U.S. 252, 265, 6 S.Ct. 580, 584, 29 L.Ed. 615 (1886). Federal courts still follow Presser. E.g., Quilici v. Village of Morton Grove, 695 F.2d 261, 269 (7th Cir.1982), cert. denied, 464 U.S. 863, 104 S.Ct. 194, 78 L.Ed.2d I70 (1983).

C. Equal protection

[4] Plaintiff argues, that Defendants' denial of a concealed weapon license violated the Fourteenth Amendment's guarantee of equal protection: Plaintiff apparently argues that Defendants deprived him of the fundamental right to carry a concealed weapon and travel, thus triggering strict scrutiny. The Second Amendment, however, does not provide Plaintiff with a fundamental right to carry a concealed weapon. An individual has "no private right to keep and bear arms under the Second Amendment . . ." United States v. Warin, 530 F.2d 103; 106 (6th Cir.), cert. denied, 426 U.S. 948, 96 S.Ct. 3168, 49 L.Ed.2d 1185 (1976).

[5, 6] Nor does the St. Clair County Concealed Weapons Licensing Board's refusal to grant Plaintiff a permit deny him the right to travel. The right to interstate travel is a basic constitutional freedom. Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969). The right to intrastate travel is a basic freedom under the Michigan Constitution, and the analysis of government burdens on intrastate travel under the Michigan Constitution is identical to the analysis applied to government burdens on interstate travel under the United States Constitution. Musto v. Redford Township, 137 Mich.App. 30, 34, 357 N.W.2d 791 (1984).

[7] Plaintiff contends that through their blanket policy of denying residents concealed weapons permits, Defendants have unconstitutionally deprived him of the right� to migrate to St. Clair County. But not every policy that possibly burdens the right to travel triggers strict scrutiny. The court must consider whether the policy at issue deter migration or serves to penalize the right to travel. Memorial Hospital v. Maricopa County, 415 U.S. 250, 257, 94 S.Ct. 1076, 1081-82, 39 L.Ed.2d 306 (1974). Further, the "right to interstate [and intrastate] travel must be seen as insuring new residents the same right to vital government benefits and privileges in the States [and Counties] to which they migrate as are eqjoyed by other residents." Id at 261, 94 S.Ct. at 1084. Plaintiff has cited no authority for the proposition that denial of a concealed weapon permit deters migration, penalizes the right to travel, or that a concealed weapons pernut is a "vital government benefit[ ) arid privilege[ ]." While Plaintiff may feel a bit less secure not being able to carry a concealed weapon on his person or in his car when he drives into urban areas, the denial of a license for a concealed weapon is not tantamount to the denial or waiting period for the right to vote, Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972), or to receive welfare or medical benefits, Shapiro, supra, and Maricopa County, supra. A con cealed weapons license is not even a government benefit that rises to the level of benefits deemed by the United States Supreme Court as not vital, such as lower university tuition, Starns v. Malkerson, 401 U.S. 985, 91 S.C. 1231, 28 L.Ed.2d 527 (1971), or suing for divorce, Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975). Based on the foregoing, Defendants did not deprive Plaintiff of the right to travel and strict scrutiny is not triggered.

Therefore, the court must apply the rational basis test. This test is easily met. The state has an obvious "legitimate interest in limiting access to weapons peculiarly suited for criminal purposes." People v. McFadden, 31 Mich.App. 512, 516, 188 N.W.2d 191 (1971).

D. Due Process

[8, 9] Plaintiff finally argues that Defendants deprived him of due process of law by its blanket policy of denying concealed weapon permits. Nevertheless, Defendants are entitled to judgment as a matter of law because there is no genuine issue of ,material fact that Plaintiff has a property interest in obtaining ,a license to carry, a concealed weapon.1 Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise whenever a person has only "an abstract need or desire for," or "unilateral expectation of," a benefit. Board of Regents v. Roth, 408 U.S. 564, 677, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). Rather, they arise from "legitimate claim[s] of entitlement . . . defined by existing rules or understandings that stem from an independent source such as state law."' Id.

In Erdelyi v. O'Brien, 680 F.2d 61 (9th Cir.1982), the Ninth Circuit Court of Appeals considered a claim by a plaintiff who had been denied a license to carry a concealed weapon and who brought suit under � 1983 alleging that the denial of the license violated her right to due process. The court rejected plaintiff's constitutional challenge, holding that plaintiff had no property interest in carrying a concealed weapon. The court reasoned:

Concealed weapons are closely regulated by the State of California.... Whether the statute creates a property interest in concealed weapons licenses depends largely upon the extent to which the statute contains mandatory language that restricts the discretion of the (issuing authority] to deny licenses to applicants who claim to meet the minimum eligibility requirements. Section 12050 explicitly grants discretion to the issuing officer to issue or not issue a license to applicants meeting the minimum statutory requirements. Where state law gives the issuing authority broad discretion to grant or deny license applications in a closely regulated field, initial applicants do not have a property right in such licenses protected by the Fourteenth Amendment. Id. (citations omitted).

The Michigan Concealed Weapons Law similarly grants discretion to the issuing authority. It establishes boards for each county exclusively authorized to issue a license to applicant residing within their respective counties. Mich.Comp.Laws Ann. � 28.426(1). The statute establishes minimum criteria for concealed weapons permit. An applicant for a permit to carry a concealed weapon must be at least 18 years old, a United States citizen and reside in the State of Michigan for at least the past six months. Id The statute further provides that "[a] license shall at be issued unless it appears that the applicant has good reason to fear injury to his or her person or property, or has other proper reasons, and is a suitable person to be licensed. Id.

The St. Clair County Concealed Weapons Licensing Board Policy Manual in effect at the time Plaintiff applied for a license there makes clear that Pencak does not have a legitimate claim of entitlement to a concealed weapons permit. First, the Policy Manual grants the Board a large degree of discretion in issuing permits. It provides that [l]icensing may be available depending iupon the facts and circumstances presentred to the Concealed Weapons Licensing Board in support of an application. The Concealed Weapons Licensing Board will ievaluate all applications uniformly and exercise its discretion as it deems proper to assure the safety, interest and well-being of the citizens of this County and State.

Manual, page 4.

Moreover, the manual makes clear that the County Board normally will not issue concealed weapons permits. The manual provides for two types of permits: general and restrictive. General permits are restricted to "those persons connected with the criminal justice system, where there is a legitimate threat of bodily injury because of past, present or future dealing , with criminal defendants." Manual, page 5. Further, the manual provides that "[t]his Board will require the applicant to establish by clear and convincing evidence that the presumption against issuance of [a general] license should be overruled in his or her case." Id.

The manual specifies four categorieg of restricted licenses, two of which Plaintiff conceivably could avail himself. One category is the "Direct Transit between BankBusiness/Home" permit. To obtain this permit, an applicant must, among other things, demonstrate the dangerousness of the area in which he or she transacts business and the unreasonableness of alternative measures which would accomplish the same purpose without the necessity of a concealed weapon license. Manual, page 8. Moreover, "[a] license of this nature will not normally be issued . . ." and an applicant "must establish by clear and convincing evidence that this presumption against licensing should be overruled in his or her individual case." Id. The other category of which Plainiiff might fit is an "employment-related" permit. But to obtain one of these restricted permits, the applicant should be a security or bank guard. Manual, page 10. Based on the foregoing, there is no genuine issue of material fact that Plaintiff does not have a property interest in obtaining a concealed weapon license. Plaintiff argues that Erdelyi only applies to initial applications for licenses and that he has a property interest in a license renewal. This argument has no merit. First, the manual, expressly indicates that one should not expect to have his or her permit renewed as of right. The manual provides that


[l]icense holders who move here from another Michigan county are not automatically issued a St. Clair County. License. The fact that the applicant has a previous permit will be noted, if a photocopy is provided to the Board, but the application will be considered as "new" and not a "renewal," and will be judged pursuant to St. Clair County standards and procedures.

Manual, page 13. Second, the structure of the Michigan concealed weapons statute shows that each county is responsible for determining to whom it will issue concealed weapons licenses. The statute establishes county boards and vests them with the exclusive authority to issue such licenses. Mich. Comp.Laws Ann. � 28.426(1). "[P)ower to issue and revoke [concealed weapons]

"Rich man's gold" is charging hard down the backstretch at $28 (420), "Yellow gold" at $7.30 (305), and "Silver moon" (5.66) at 0.10. "Horse with no name" looks to be hung up at the gate? The race is on!

Thank for the input... i picked up on the song connection and wondered if someone else did....
What is your link to look at the S&P futures contract?

Steve, very interesting. I am fortunate enough to live where there is relatively little problem in getting a CW permit. The only requirement is a short course dealing with the legal issues and some time on the range with the instructor. My take is where the laws are patently absurd, why bother with a CW permit? Better judged by 12, than carried by 6.

I heard the s&p futures over the radio, but I think that they can be accessed on the CNBC site, or on their station. I would like to know a www link as well.

http://www.cme.com/cgi-bin/gflash.cgiS&P 500

and more

A .380 in the proper holster with the right attire is CC.

BTW, Colt is exiting the consumer toy business.

www.mrci.com

http://www.kitco.com/lease.rate.htmlLease Rates for platinum at 27%!!!!! What's going on?

Thanks for the links all. s&p futures are sinking fast -6.90.

Previous post "special" thanks to Cavan Man and ss of nep!

Spot 308!
Here spike, good doggy!
(Loved that analogy, Goldfly!)

You're exactly right -- all carry trades are manipulated in the manner wished by those who administer the particular trade. FWIW, in Michigan, three adjoining counties with fairly similar demographics administer the CCW law in completely different manners. In Oakland County, only 10% general permits are issued, the balance being restricted permits; in Macomb County, virtually all applicants are issued general permits; and in St. Clair County, as noted in the case you cited, virtually no CCW permits are issued.

The activities over the last week certainly have made me confident that I've been carrying the right metal -- the bright, yellow, shiny kind! Thanks to all who frequent this place of great thinking.

Welcome Granny! The talk here is quite excited at the moment, so new posters may not be afforded all the cordiality that is normal on this forum. (Shame on us) In regard to your investment question, you have very nearly arrived at the proper answer. You have come here, to the round table of gold. Your only decisions now are how much and what form to aquire. If you choose to purchase physical metal and take possession, your gold will be "close at hand in any emergency". Let's peer down the road several years. If the dollar has collapsed, I doubt you will be kicking yourself because you bought Maple Leafs instead of Angels. There are advantages to both. The pre-1933 gold was exempted from the last government gold confiscation. It is selling at a small premium now and there is currently no requirement for dealers to report it if you choose to sell it back through a dealer. If you trade it to your neighbor for a few buckets of wheat, any gold is probably not reportable. Of course gold is only a money question, the best investment one can make now, or at any other time, is time spent in prayer.

Do you speak IPSC?

As I opened my planner (brain substitute) to today's date, I read the daily quote and believe it is apropos for veterans and new visitors of this site.

"No trumpets sound when the important decisions of our life are made. Destiny is made known silently." Agnes DeMille

Can any of our Austrailian posters enlighten me on the confiscation of weapons there? What is public sentiment? What ploy did the government use to justify such a radical action? What weapons were affected?

What are the chances of getting a "search" function on the forum so we can search for a topic by keyword or poster name?

Broncos and Jets, who to bet on.........

-30 yr T-Bond = new low (within this cycle)
-$ = new lows (same)
-SP 500 = soon to follow?

The financial earthquake of the past weekend has many tremors!!!!!!!!!
Keep Awake

MARKET REPORT (10/1/99): Day Five of the Big Breakout....Here comes October --
the cruelest month in investment markets -- living up to its reputation....Dow down 75.
Bonds getting hammered. Yen, euro very strong. Gold up $7.50 (was up $11.50 earlier)
after a strong European market. Merrill Lynch presciently goes out on limb, raises Q4 gold
price estimate to $300. Courageous call since gold is already $306 and has been as high as
the $320s. Bridge News reports that "NYMEX is currently trying to resolve some of the
complaints it has received from customers who were unable to get their gold option orders
executed on the COMEX division this week." Funny. We never had the problem when the
shorts dominated the market action. Nor did anyone raise the margin requirements on
COMEX gold contracts until the small investor deluged the market with buy orders this past
week. That might backfire on the exchange since it amounts to a higher capital requirement
in order for the shorts to cover. Standard Bank London is calling support in the $290-95
range and overhead resistance at $315 - 30. Gold lease rates down on Russia saying they
will offer gold to the lease market. That's it for today, my fellow goldmeisters. Have a
good weekend. (See the links below for more info.)

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.

Given the opinions of some of our esteemed Knights that the POG is charted for rather lofty levels, a thought comes to mind. For the most part, I have been picking up physical from the Bank of Nova Scotia. Primarily I do this because the manager is a close friend, and the bank itself is within easy walking distance. They (BNS) give me (as Sir Canamami pointed out earlier) a pretty good routing, both coming (buying) and going (selling, if I chose to do so) on several levels such as currency exchange, service charges, armoured car charges, and a couple of others that I can't recall without getting steamed up again. As the POG begins its' journey to the stratosphere, these "little extras" start to become very annoying!!
Now, there are alternatives. Those being some larger and well established companies such CPM, and more prevalent smaller "Mom and Pop" operations operating out of tiny little shops that have been around since we were kids. The latter, are the ones that I see facing a financial timebomb. All of a sudden, inventory costs may multiply, wholesale financing may come into question, if even only in the form of operating loans. How will these small operations survive with the POG at, say, $3,000/oz, requiring an inventory that may be valued in the hundreds of thousands, if not into the million catagory.
My thoughts are that banks, the ones that will have been smacked in the hindquarters by the very industry that is now coming to them for financial backing, may be somewhat less than enthusiastic about "sleeping with the enemy".
Thoughts anyone??

No49

Bonedaddy,

Thanks for the welcome. I'm granny enough to know "BUSY" so no hurt feelings here.

So what do I do with this dreaded "legal tender"?????????

I love horses and in all colors, cautious pale or flashy white or golden royal. As I ask of all my critters, I require all to earn their keep most of the time. All work to some extent, even if only to sleep in the front yard at night (big doggies) for physical presence (If burglars, murderers, rapist, terrorist, etc.. did make it through the canine brigade and into the house, and if they survived our arsenal, they would probably trip over enough big doggies to cause enough injury to seriously slow down or arrest retreat!!!) FROM LESSONS LEARNED IN THE "REAL" WORLD (much observation and minor "experience").... DO NOT resist ANY "officers" of the law, no matter how innocent you are!!!!

I haven't had enough time to get in prerequisite reading with such a sudden turn of events (shame on ME) to be able to make very wise judgments right now. I imagine many "ol timers" are scratching their heads, wondering what to do. Granny is about to pull out her hair!

All post are studied; looking for more direction or even specific ADVICE.

Be well all

Received a call this a.m. that delivery on a few 1 oz. Gold Eagles will be delayed for about 2 weeks. Reason given that mint is behind, or something like that. Is this usual at "ordinary" times or does this have anything to do with what is going on right now? (I'm not a "dealer" by any means; just ordering from one.)

http://biz.yahoo.com/rf/990930/ber.htmlIn a nutshell, the Fed will accept a broader array of collateral for longer periods when banks need to "borrow" cash as their customers' deposits are withdrawn or spent down in advance of Y2K.

Hi again, granny! You know, it would be inappropriate for any of us to give you advice on gold buying since we're not dealers. Luckily, Mr. Kosares IS a very experienced (and nice) one; I imagine he will be happy to help you. There's a phone number on the "Info Packet" page, or you can e-mail him. Good luck!

http://biz.yahoo.com/rf/990930/bgh.htmlThe SecTreas carefully tip-toes around a strong-dollar question (and doesn't reveal its fate), as Japan is made out early in the article to be the key to the world economy. That's a lot of weight to bear for an island nation, isn't it? We should change their name to Atlas. The dollar and the yen have a fate that is tied, that's why there is all this "concern."

You know, it wasn't long ago (days) that an ECB official said a strong Japan would be preferred, but that the European Union would prosper regardless the outcome in Japan.

http://biz.yahoo.com/rf/991001/qe.htmlAt what point will the Fed start accepting beanie babies and baseball trading cards as collateral to replenish the banking system's reserves?

Looks like a short term bottom in gold lease rates is in today. The Platinum lease rates are still through the roof.

Once the newly borrowed gold finishes reaching the market, the next tranche from Russia, if it ever gets off the ground, will be absorbed. Then we will see the market go in to the next upswing. The exposure of the BNY deals with Russians probably had to do with the refusal of the Russians to send out the gold to market.

We rarely get to see what the banking system is actually like. This glimpse through the gold market is the most public ever. The banking system gets overextended in a cyclical fashion as bankers chase in turn after borrowers or depositors. As this herd of bankers (they could barely hide the fact that they are Zebra herds, hence the pinstripes) changes short term rates to at once entice depositors or borrowers, we see these huge moves. Why is this system so unstable? Afew reasons, but one of the main reasons is psychological. The banker is usually conservative, as any dealer in leverage should be, and thus tends to seek backing in consensus. Consensus leads to everyone moving to the one side of the boat, eventually leading to a noticeable lilt to one side as leverage is employed. The second point is the borrow short, lend long strategy, from which the banks earn their spread, allways imperfectly balancing risks and rewards. Inevitably, the trouble caused by one view dominating the direction of leverage ends up pushing the other way.
Bankers cooperate. They are risk averse as the munitions warehouse is. They know each sits on a barrel of powder and there are live fuze lines connecting all of them. That is why they put together the Federal Reserve system, to stabilize the daily dealings and avoid small disasters on the one hand, and to palm off their losses on the poppulation at large. Banker's schemes to save themselves have backfired as all attempts at cornering and regulating markets allways do. The creation of the ultimate market regulator, the Fed, has created a shared risk, as a portion of all the powder kegs is put into one big one, to which all fuze lines, now bigger and more reliable, connect. As in 29-39, there is no escape from an explosion of the whole system. The international interconnectedness of all banks and central banks, has created a new doomsday mechanism. Banking business revolves arround avoiding its detonation while attempting to profit from the sale of matches (in return for more powder).
Government, of course, would like nothing better than to continuously extort the bankers and have been doing this since the gilded age and before. In this routine the politician is allways in a banker's pocket. Through obvious and public cooperation, we have learned to follow the bankers and their representatives in congress and the executive branch. Together they determine the policies that shape economic and international life.
While in centuries past the world at large was less affected by the banks, their tie with government and the money printing press has eliminated all chances of isolation from the doomsday mechanism.
The match lit in Mexico at the end of 94 lit the fuze and has been steadilly blowing up one deposit of powder after another. We all watch as instead of severing connections to the powder kegs now burning, the bankers attempt to snuff the flame by smothering it with more powder while replacing the old powder with new powder and laying down fresh new fuze lines. Meanwhile, the advancing firefront approaches the central barrel of the doomsday mechanism. We put on the golden sun glasses and walk away from the center hoping that we are far enough away and that the glasses will allow us to watch safely.

http://biz.yahoo.com/rf/991001/t4.htmlRouble? What's a rouble? Here's a look at Russia's real money and the cost of transactions.

Good day, all! I've been reading this board for quite a while, but this is my first post. I just had a rather unsettling call from my broker, who seemed rather emphatic that I should exit my long position in gold. (I have Feb 00 290 calls, & June 00 290 calls). He said: "Several analysts are calling for a big drop on Monday."

I asked him if those analysts explained what event could lead to such a drop, when (a) the carry trade has been curtailed, and (b) the shorts are going nuts trying to buy at virtually any price. He couldn't (wouldn't?) give me a satisfactory answer. I've been considering taking some profit before any major pullback, so I went ahead and placed the order to liquidate the Feb calls. He was still upset that I wanted to hold on to the June calls. (I don't think we're anywhere near done with this bull rush.)

Is anyone aware of some major event that could tank the price sufficiently to make a broker behave in this manner? Have seen nothing here or at GATA that suggests this, and the demand still seems very strong. Any comment would be greatly appreciated.

So, if I have my gold buried somewhere, let's presume in a place secured enough to hamper metal detection of it all... what measures can the govt. take against me, physical and legal to confiscate it?? How do they know that I have not "bartered" it all away?

The only thing that could tank gold on the weekend, I would think, would be an announcement of a large amount about to hit the market. It cannot be the Europeans. Could the US dishoard onto the market without Ccongressional approval? I don't think there is enough elsewhere to do the trick. Everyone else is buying. Or alternatively, they could announce that the market is closing until....... Don't know the answer to that one. I take it your broker did not divulge any sources?

Agreed, ORO, that the present situation is a fantastic glimse of "what the banking system is actually like." Maybe a little imagination coupled with your astute comments and observations can help illuminate the "strange call from (Marius') broker" (10/01/99; 10:52:01MDT - Msg ID:15098) who tells us that: "Several analysts are calling for a big drop on Monday."

Welcome Marius!

If you have been reading here for any length of time you certainly know that analysts' calling does not determine drops (or rises) in markets. In fact, I find it a much better perspective to recognize analyists' "calls" for what they really are; explanations invented after the fact for poorly understood events, then backdated to convince the gullible that they were delivered early enough to qualify as predictions.

No one knows the future. We all extrapolate from the present to prepare ourselves for it. But that is not knowing. It is guessing. Sometimes educated guessing...sometimes not. If your broker was unable to offer "a satisfactory answer" it would suggest that he is unprepared and/or uneducated in his extrapolations. It can be very hard for us non-professionals to admit that most brokers are about as qualified to extrapolate the future from the present as, say, used car salesmen.

It sounds like yours got a directive from his boss coming down through the chain-of-command to cover all calls, no matter what. How could he even hope to know what will happen from now until June 2000? You should be pondering FOA's many warnings about paper and defaults rather than whether or not a big drop is coming before monday that will not be corrected before next June.

Just my 2-cents worth. After all, you did ask.

Again, welcome. Your information is very interesting and does fit perfectly with the view we are getting here. Thanks for your contribution.

Glad to have you here. Please, don't be a stranger. IMHO, I'd get another broker. I'd avoid the ups and downs of trading paper. You will sleep sounder and live longer if you buy the metal and lock it up. If you have been watching for awhile, you probably agree with me that the best analysis is right here. Our host is undoubtedly one of the most knowledgable gold analysts in the US and perhaps the world. I'd give him a call at 800-869-5115.

Possibly there is a sell gold campaign being circulated by the big guys, who control the analysts as much as the news people.

Otherwise, it's the usual --"Find customers with profits and get them to sell", this is the best way to churn accounts.

Could someone please direct me to a report stating that Russia is now leasing their gold. Russia has publically stated that they are now selling but I haven't seen any statements regarding them leasing. At the end of the daily report, michael comments on Russia leasing.

ORO! You surpass yourself!

Clear vision is such a pleasure to see put into clear writing.

My Oro WP document (30 pgs.) grows daily.

I relish the thought of re-reading it soon, and returning to today's posting later for a refresher.

Don't know the import or verity of this one.

http://www.dawn.com/daily/19991001/ebr7.htm

gidsek

http://www.dawn.com/daily/19991001/ebr7.htmgidsek

The last I read was the the Russian CB had increased the discount at which it buys domestically mined gold to %5.5 from well below that.

This is a greater hit than the %5 export duty so whereas once it was less advantageous for miners or whomever to export gold now is more.

Sorry no link, was from Yahoo I think. Read this on Kitco last night.

Remember this is a battle, and battles that are worth winning never go your way over their entire course.

gidsek

This is my first post but I am unable to allow my shyness to continue in the midst of all this excitement. I have been lurking here since early March. I made the decision last January to liquidate stocks and mutual finds because of a growing fear of loosing everything to the Y2K horseman.

I found Michael's book quite by accident (it shouldn't have been in the book section of Barnes and Noble that I was perusing) and since I have always lived by the premise that "everything happens for a reason", I read the book, made the call to MK and sent him a check. This is certainly atypical behavior for me since I am not a very trusting perosn especially where money is concerned. As soon as i heard his voice on the telephone I KNEW this was a man I could trust and with whom I would have a long and prosperous association.

I feel now as if I know each and everyone of you personally. You have made me laugh out loud and at times have brought tears to my eyes. Such a wealth of sensitivity, intelligence and grace. I have learned so much not only about gold and economics but about life. Thank you. If you will allow me, i would like to be a contributor to this incredible forum of wise ones.

P.S. Goldfly.....I live about 60 miles north of Nashville and may be able to help you with your song writing career.

Thanks, everyone, for your comments about what could be going on with my broker. I did cross my mind, after posting the question, that they might have someone desperate for having sold calls in this climate. He's usually pretty good at not "churning", plus the broker doesn't get a commission for closing the position. I had already decided to try switching to on-line, discounted commission service, and this latest situation reinforces the idea!

I agree that it doesn't seem likely enough gold could just show up to shut this run down. I am familiar with the opinions here re: "paper" gold, and don't intend to stay in options indefinitely. I'd definitely consider the physical metal or stocks with some of the options profits.

I close with Bill Murphy's recent battle cry: Be strong, go long!

"In the last Midas, I reported to you that several sources told me that the Federal Reserve was "jawboning" futures
commission merchants not to pressure firms to "deliver gold." In other words, they know that the gold is not there
for the shorts to deliver and, as I have long suspected, it appears that they are protecting the positions of certain bullion dealers and of other financial institutions that are short gold. This corroborative information is clear evidence that the gold market has been manipulated as the Gold Anti-Trust Action Committee has alleged.

Two days ago, I received information that a futures commission was told by another futures commission merchant that it was prepared not to deliver gold on its "gold forward or futures contract" obligations that was expected by a client of the firm who was standing for delivery. In essence, the shorts were declaring "force majeure" - WE
CANNOT DELIVER.

This is not a Comex problem as far as I know. From what I am hearing, it is an OTC problem, where few people really know what is really going on behind the scenes. The firm that expected delivery was stunned. It was about to be "floored." According to our sources, this firm then got a phone call from the Federal Reserve requesting that they do not pressure the shorts into making delivery and that they would make sure that the longs received their gold. I am not privy as to exactly how that would happen.

According to another source, there were actually a couple of firms that told the longs that they were not prepared to deliver "forward" contract gold in the size expected. Goldman Sachs is one of the firms mentioned to me that is not prepared to fulfil its obligations. That is what my sources in the market place are telling me.

It should be of no surprise to any of you that Counterparty Risk Management Group Co-Chair's, Goldman Sachs and J.P. Morgan were all over London CNBC this morning talking down the gold market. Sources tell me that Goldman suggested on the tube that the big gold shorts covered on the run up while Morgan's Kevin Crisp was calling for $275 to $280 gold when this blip was sorted out. Whose risk are they both concerned about?

Strange. Today, Goldman Sachs and Chase banks were big buyers of gold options on Comex. Why buy options if you are not bullish or you believe the gold market has topped out for the time being. Yes, the buying can be for clients. Are their clients not listening to them? On that note, for maybe the first time in Comex history, the gold option volatility is higher than that for the silver contract.

There are other Goldman Sachs stories out there, but I want more confirmation of them before I present them to you.

Last night, I received a phone from a "very plugged in hedge fund manager" who confirmed to me that George Soros is long "forward" gold. NOT COMEX GOLD. That is not a rumor anymore; that is a fact, according to my source. Soros is also long aluminum and silver according to that same source.

This source also tells me that George Soros most likely does Comex business with Refco as do many of the big hedge funds. I do not know about who he does his OTC business with or who he trades with in London. However, according to this hedge fund manager, one should start at Refco as a starting place in tying this altogether.

This extraordinary development is an affront to all that believe in free markets.

There has been an orchestration by some bullion dealers and some of our own "officialdom" to hold down the gold price so that their own selfish interests can be served. In the meantime, gold miners are out of work, gold companies are going bankrupt, gold stock shareholders have been decimated, etc.

This is an outrage of the highest order and it has been going on for some time. "

http://biz.yahoo.com/rf/991001/t4.htmlHere it is again.

The jist of the situation is that if gold holding Russians are more inclined to hold cash than gold, it is now less "taxed" for them to export the gold than to sell it to the Russian central bank (by 0.5%). If they sell it to the bank, the bank has the gold, and they get the cash. If they instead export the gold out of the country, they give up 5% at the time of the operation...however, this gold may be moving under a cash sale motive, or for deposit in outside bullion banks to earn the high lease returns. There is no way to know for certain, except the easing lease rate indicates some of the immediate pressure has come off. If I were in Russia, I'd rather hold my gold given the uncertainties, but if forced to move it, I'd far rather lease it than sell it outright for the obvious reasons. But as just said, the risks are too great to part with it, although some will anyway I'm sure.

Does anyone know why platinum lease rates have gone so high today? Does it have any relevance to other precious metals?

A glimpse of things to come. I was not aware of the closure of the Karachi gold exchange. It is telling that they fell apart at $290. LBMA is still functional. I wonder at what price they keel over at the point of no possible short term supply being able to save them?

The wide anticipation of a plunge will assure the lack of such a plunge coming from the Karachi market's demand. Could eveybody be witholding buys because of this expectation? Bodes well for the future of POG.

PH in LA and Mr Gresham, thanks.
I am sorry not to be writing much on the analytical side now, but hopefully there will be some time later.

http://biz.yahoo.com/rf/991001/xh.htmlSNB Chairman Hans Meyer said on Friday, "It will be in our own interest to exercise the necessary diligence when converting part of our gold holdings into interest-bearing assets."

Now, we all know full-well that interest is a product of the business contracts and NOT of the asset itself as some of our Knights have discussed previously. As we watch gold lease rates go sky high it is abundantly clear that gold can be utilized as an interest bearing asset. Mr. Meyer is not telling the straight story. Could it be that when the interest generating gold lending operation collapses upon itself that all future gold lending will be prohibited? Whouldn't that be nice. You can borrow national currencies for repayment with interest, but gold supply will henceforth not be allowed to be artificially expanded.

Yes, The Tower does like that thought! In a world of freely floating currencies, gold will always be the unadulterated yardstick.

http://biz.yahoo.com/rf/991001/uo.htmlWe'll know next Tuesday what the Fed thinks. But for now, investors were spooked by the National Association of Purchasing Management's manufacturing index which jumped to 57.8 in September. This greatly exceeded analysts' forecasts for a slight rise over August, predicting 54.3 for September.

http://www.prorege.com/north/6348.htmlGary North answers a reader.

Perhaps Murphy answered your question.

I like his pointing out that putting kitties Morgan and Goldman in charge of determining the risks to the milk bowl is not done in the interest of other hungry kitties.

If this has been posted already I apologize.

Date: Fri Oct 01 1999 14:33
crazytimes (the BOMBSHELL from Bill Murpy!!!) ID#344326:
Copyright � 1999 crazytimes/Kitco Inc. All rights reserved
"BOMBSHELL !"

In the last Midas, I reported to you that several sources told me that the Federal Reserve was "jawboning" futures commission merchants not to pressure firms to "deliver gold." In other words, they know that the gold is not there for the shorts to deliver and, as I have long suspected, it appears that they are protecting the positions of certain bullion dealers and of other financial institutions that are short gold. This corroborative information is clear evidence that the gold market has been manipulated as the Gold Anti-Trust Action Committee has alleged.

Two days ago, I received information that a futures commission was told by another futures commission merchant that it was prepared not to deliver gold on its " gold forward or futures contract" obligations that was expected by a client of the firm who was standing for delivery. In essence, the shorts were declaring "force majeure" - WE CANNOT DELIVER.

This is not a Comex problem as far as I know. From what I am hearing, it is an OTC problem, where few people really know what is really going on behind the scenes. The firm that expected delivery was stunned. It was about to be "floored." According to our sources, this firm then got a phone call from the Federal Reserve requesting that they do not pressure the shorts into making delivery and that they would make sure that the longs received their gold. I am not privy as to exactly how that would happen.

According to another source, there were actually a couple of firms that told the longs that they were not prepared to deliver "forward" contract gold in the size expected. Goldman Sachs is one of the firms mentioned to me that is not prepared to fulfil its obligations. That is what my sources in the market place are telling me.

It should be of no surprise to any of you that Counterparty Risk Management Group Co-Chair's, Goldman Sachs and J.P. Morgan were all over London CNBC this morning talking down the gold market. Sources tell me that Goldman suggested on the tube that the big gold shorts covered on the run up while Morgan's Kevin Crisp was calling for $275 to $280 gold when this blip was sorted out. Whose risk are they both concerned about?

Strange. Today, Goldman Sachs and Chase banks were big buyers of gold options on Comex. Why buy options if you are not bullish or you believe the gold market has topped out for the time being. Yes, the buying can be for clients. Are their clients not listening to them? On that note, for maybe the first time in Comex history, the gold option volatility is higher than that for the silver contract.

There are other Goldman Sachs stories out there, but I want more confirmation of them before I present them to you.

Last night, I received a phone from a "very plugged in hedge fund manager" who confirmed to me that George Soros is long "forward" gold. NOT COMEX GOLD. That is not a rumor anymore; that is a fact, according to my source. Soros is also long aluminum and silver according to that same source.

This source also tells me that George Soros most likely does Comex business with Refco as do many of the big hedge funds. I do not know about who he does his OTC business with or who he trades with in London. However, according to this hedge fund manager, one should start at Refco as a starting place in tying this altogether.

This extraordinary development is an affront to all that believe in free markets.

There has been an orchestration by some bullion dealers and some of our own "officialdom" to hold down the gold price so that their own selfish interests can be served. In the meantime, gold miners are out of work, gold companies are going bankrupt, gold stock shareholders have been decimated, etc.

This is an outrage of the highest order and it has been going on for some time.

gidsek

My humble apologies. Credit where credit is due!! Very tired here (I see little scrollbars when I close my eyes).

gidsek

was simply being "at your service."

Tsk, tsk... Such rhetoric. One would think that people ran the futures exchanges for the benefit of the poor suckers trying to do business with them! ;^)

This sound like a replay of the Hunt Brothers. It might be worthwhile to point out a couple of things:

a.) The Hunt Brothers lost. The way they lost was that the exchanges changed the rules on them.

b.) Seeing a futures exchange as "fair" or a "free market" is horrifically naive for any "informed observer" of the markets.

c.) What the futures exchanges do or not do, in colusion or not in colusion with the Fed is utterly irrelevant to the big picture. All this paoper manipulation has masked and, in fact aggravated, a large and widening spread between supply and demand for the physical bullion.

Why it may still be possible to "buy bullion in Belgium" the day may not be too far off where it is not. Unless Al has the combination number for Fort Knox, all this "bombshell" stuff is "market stablization".

In other words the Plunge Protection Team will do what Plunge Protection Teams do.

What is VERY interesting about this is basically that the physical gold markets are very, very close to official force majeur for large physical bullion positions. However, this has largely been the case unofficially for the last couple of years according to BT/The Writer/Another.

So what happens when Tifany stops doing gold?

Gary North is wrong on this one. I know. I am in the printing business. "Intaglio" is a reference to rotogravure printing where cylinder is engraved with the image to be reproduced on paper. The engraving is below the surface of the cylinder and creates microscopic cells which hold microscopic amounts of ink. The depth of these cells is measured in microns. This type of process is suited for very long and continuous runs (yeah, that sounds like the FED right?)and will provide excellent color consistency. Offset printing on the other hand is on par with gravure as regards quality; no one outside of the printing industry could tell the difference between the two processes and many within the industry cannot tell! I have seen the same job printed offset and intaglio, laid side by side and could only "tell the difference" by looking thru a printer's glass.

While some sort of a special press might be required to print money, there is nothing special about the process. The company I work with has two "intaglio" presses.

I wonder what else Gary North is not entirely clear about?

My first post.
I've been a viewer of this site for years and have learned a great deal from all of the participants.For this I am truly grateful.
Your posts gave me the courage to keep buying gold when the horizon looked dark and menacing. I was fortunate to hear and act on, "GOT GOLD ANYONE", and decided to commit to purchasing on a monthly basis as the price of POG went down.
Then some one said watch your allocation of assets and then I stopped.
I don't know how to give back to this forum,and admit that I have been a sponge at this site.
I am registered at a number of other investment sites and do not have time to keep up with all of them on a daily basis. I submit the following that comes from a daily news alert. I hope this is appropriate to the last few days of discussion.

Date: Fri, 1 Oct 1999 10:08:16 -0400
From: dailyreckoning@agora-inc.com
GOLD AT $380/OZ?
A COMMENT FROM JAMES PASSIN...
I just got back this morning from South Africa.
We met with some "institutional analysts" near Johannesburg. The gold analyst
gave us a very bearish presentation on gold and gold shares. He talked about
cental bank selling, etc.-and predicted further declines in gold and gold shares.
The next day, gold began a 3-day rally of $50.
As you may know, I have been waiting for a massive gold rally all year. Gold
looked like the classic "bull trap" -- the market was building up a huge short
position and universal pessimism, while physical inventory was being squeezed out
of the market (evidenced by the doubling in lease rates). The strength in other
commodities, weakness in dollar/yen and resurgence of inflation created a
fundamentally bullish environment.
The move reveals the poverty of robotic "trend following," which keeps you short
at the bottom and long at the top, and only seems useful in explaining
yesterday's price action. The trend followers are trapped: the popular trade was
to borrow gold at 2%, sell it into the market ($270 - $255) and then invest the
proceeds into U.S. treasuries at 6% on 20X leverage. With the dollar weak and
gold strong, this trade has turned into a total disaster. Stop losses are getting
triggered. There are rumors of hedge fund implosions (including the Tiger fund).
The central banks are brilliant: they trapped the shorts by staging a bogus gold
auction which created trivial overhang but overwhelming bearishness. Whether the
unexpected demand came from jewelry wholesalers or short sellers, the demand is
there...The new central bank policies of restraining leasing and curtailing sales
have altered the economics of producer hedging (since producers short against
future production and recapture the spread between the lease rate and treasuries
on the proceeds) and speculative short selling. I believe that gold could trade
as high as $380.
However, the central banks are still intent on liquidating their inventories.
Unless an inflationary spiral emerges (which is now possible), I would expect
central bank supply to flood the market if gold in fact reaches the upper $300s.
Yes I like The expresion "GOT GOD ANYONE?" Sorry my sense of humor got in there. Should be Gold also. Popeye

.

http://www.kitco.com/lease.rate.htmlPlatinum is a special animal....a must have for militarys and industrys....Some industrys stockpile for hard to get times 40 times rarer than gold...
So whith this stockpile laying around lets lend it and make some more platinum for our time...A same (simular as gold carry trade) except x10 due to i being rarer and fewer sources of rescue....
Thus the lease/forward trade has degraded into loan sharking.
Youse knows what happens when youse don't pays the loan eh, Guetio??? Where's my stuff Guetio?? kraaacckckkkk.....

Point well made! GFD.

Since it was the futures exchange who brought down the Hunts by changing the rules, there is no reason whatsoever that they might not do it again.

In one of his last posts, FOA mentioned that they might push down the price one last time before it goes completely ballistic. It seems like a move such as this might do just that. An announcement over the weekend... something like the exchange is in suspension, all contracts and options to be settled in cash within 6 months (with interest), etc. That would drive the price through the floor as everyone ran for cover. Later, things could reopen under completely different rules. ie. street gold vs. paper contracts, big taxes on physical sales... etc.

Where is FOA on this?

Welcome to the party! Looks like its gonna be a hummdinger, here, very soon! Other lurkers: come out of the woodwork.
(Angel, are you really an angel? :) )

http://www.dawn.com/daily/19991001/ebr7.htm?

Cavan Man (10/01/99; 14:36:12MDT - Msg ID:15123): are you saying that it is (rather) easy to counterfeit U.S. currency? North may have some of his tech details wrong (uniqueness of "intaglio"), but his point was that authentic FRNs have a measure of "specialness" (is it the paper?) and cannot be duplicated at will. If this is incorrect, perhaps we should all get into the printing biz, while FRNs are still worth something... ;)

There is much excitement and talk in The Tower about the gold-quest movie "Three Kings" (opening today) so everyone here is making haste to wrap this up for the grand opening. This TownCrier is typing as fast as possible, so please for give the mistakes. We'll give you the review when The Tower is re-manned.

Yesterday's stock market rally in hindsight seems to have truly been driven by quarterly position adjustments as we described yesterday, and the selling resumed today right from the start. Only a late day rally saved the indices from bigger losses on the day. The DOW lost nearly 64, and the Nasdaq gave back nine points.

The 30-Yr Bond took a beating on a surge in the National Association of Purchasing Management's manufacturing index. This was discussed in an earlier report, so suffice to say that the long bond lost 1-9/32 in price, driving the yield up to 6.145%.

In currencies, the dollar lost 1.22 yen over the previous close, and the euro climbed to $1.0724, gaining .29 cents.

Turning now to gold, the day's price gain of $6.30 beat the $5.80 seen on the December contract. We wonder when this will become standard operating procedure. For now, spot prices were last quoted in NY at $304.00. We'll turn it over to Bridge News for comments on today's futures trading:

NY Precious Metals Review: Dec gold up $5.8 after NAPM figures
By Melanie Lovatt and Tina Petersen, Bridge News
Washington--Oct 1--COMEX Dec gold settled up $5.80 at $305.3 per
ounce, boosted by the dip in bonds, stocks and the dollar's continued
slide against the yen.

The financial markets were hit by the jump in the US Sep National
Association of Purchasing Management index, with the price component
hitting its highest level since May 1995.
The US NAPM Sep price index was at 67.6, up from August's 59.8. The
big NAPM number is fueling inflation fears, a positive for gold which is
often used as an inflation hedge.
However, some are concerned that it will encourage the US Federal
Reserve to hike interest rates at its meeting next Tuesday and Wednesday,
which could prove a short-term negative for gold.
Nevertheless, traders said that the gold market remains bullish and
that it was simply following its recent trend, which resulted in Tuesday's
1 1/2-year high of $329.

Leonard Kaplan, chief bullion dealer at LFG Bullion Services, noted
that while lease rates have fallen back from their highs of over 9% for 1
month this week, they remain "enormously high at 4.8%." He noted that they
are "10 times what they were a few months ago" and should continue to fuel
gold's price rally.

[Here's our interjection of the gold lease rates at day's end:

1-month 5.1510% -1.7490
2-month 5.2200% -1.2510
3-month 5.5850% -1.4980
6-month 4.9610% -0.5000
12-mnth 4.5400% -0.4950 ... now back to our tale...]

With lease rates at these levels and the continued need for many
players to cover options exposure, the price could rally up to $340-360,
Kaplan said.

He noted that gold had held support when Dec slipped back to $295.10
Thursday and could now head higher. "It is a bull market and it will tend
to move higher when there is no significant news," he said.
Bill O'Neill, director of futures research for Merrill Lynch said
today that gold prices should at least average $300 per ounce in the
fourth quarter of this year, with a near-term range of $280-340. O'Neill
said this week's announcement that European and Swiss central banks will
cap gold sales and limit lending alleviates the major negative for the
market.
David Meger, senior metals analyst at Alaron Trading, said that on a
purely technical basis, he could call for a "blow off top," which is a
spike that would end the move higher. However, he said that he can't agree
with this on a fundamental basis. "There are too many leasers and people
with options exposure still," he said. He noted that he expected to see
them try to gradually cover their positions in small tranches on the
London open. "They'll try to cover gradually because they've already
gotten enough attention," he said.
Dec gold reached a high of $310 in the morning, its highest level
since Wednesday's $322.40. Traders said they expect gold to continue to be
supported on the breaks. "This is the first time I am having a really
positive view toward the market," said an analyst.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN
---

COMEX delivery intentions so far for October is now up to 1,603 contracts (5 tonnes). Today, 120 notices were added to yesterday's First Notice Day sum of 1,483 contracts.
+
We'll walk you trough this if you're interested, if not, skip ahead my merry friend. When COMEX trading began yesterday, there were 2114 October contracts in open interest...a theoretical buyer on one side and a theoretical seller on the other side at the price agreed upon at the time they put up their margins and "shook hands" on the deal. The market changed from under them when it became obvious to others following the European central bank announcement that gold would not be "abandoned" as the important financial asset which it truly is. The resulting scurry of these new "investors" to get in on the action pushed prices up to these new levels, as buyers were much more aggressive than sellers.
+
From records now available of yesterday's events, we can see that of the 2,114 open October gold contracts, by the end of the day that number had been reduced by 1,502, and stood at 612 open contracts this morning. Recall from earlier that yesterday morning, 1,483 contracts were called for delivery, so of the 1,502 contracts that were closed yesterday, we can see that only 19 of them chose to settle with cash. That translates to over 98% of the contracts as being settled with metal. Wow. [Can anyone confirm what the deadline is to provide delivery on a gold contract? Last day of month, maybe? That question was raised yesterday, and we've yet to confirm the answer.]
+
This morning began with a whopping (by comparison) 126,972 open December contracts. With each contract theoretically representing the potential for 100 oz to be called up "front and center!", that could mobilized 395 tonnes of gold that isn't necessarily in the hands of the theoretical "seller." If their contract were called for delivery, they'd probably pass the buck by immediately purchasing another December contract and announce delivery intentions on that with which to settle their other obligation. And so the buck gets passed as sellers turn buyers, and only if a seller is found prepared to deliver gold at the new price does this cascading meltdown (meltup?) find some relief. Otherwise, someone at some point has to turn to the spot market. And we must ask ourselves again, why didn't the buyers simply seek spot gold in the first place? We seem to recall positing that size can't be gotten at spot markets without gunning the price. Any other suggestions? Open interest for all COMEX gold contracts total 209,241...theoretical obligations to mobilize 651 tonnes. Hah!

Wouldn't it be nice to take a similar walk throught the LBMA? Always keep in mind as you read this that the COMEX is dwarfed by both size and type of operations occurring through the LBMA.

Bottom line on futures: the contract pricing by supply and demand forces acting upon the contracts themselves may (or may not) earn you a dollar profit, but there is no guarantee that this trading will reflect the realities of the physical supply and demand, or that your contracts could be successfully exchanged for physical. Stepping over now to the less theoretical, more tangible side of the COMEX operations, the gold depositories saw a little reshuffling action today. Registered gold at the Scotia Mocatta vault was transferred to the Registered inventory at Republic National. 14,609 ounces to be exact. Apparently somebody wanted it a little closer to home. Meanwhile, 385 oz (12 kilos) of Eligible gold fled the Scotia Mocatta scene altogether. We're sure the new owner is quite proud of his London Good Delivery Bar...if that's what it was. Total COMEX gold inventory stands at 927,620 ounces (less than 29 tonnes). Given the high rate of contract exchange for physical, it becomes somewhat within the scope of reality to compare that amount with the 395 tonne potential sitting in current December open interest. This could get interesting. And then there's alway the LBMA, which could be imploding even as we speak...we'd never know 'til it was too late.

The Towers scouts are kept busy in their quests for news of gold, so we don't see a change to provide additional comments of the pale precious metals as occasionally requested. MK over at the Castle (CPM) has available the various metals, but here in The Tower it is gold that holds our interest and keeps us plenty busy. This following commentary was taken from Bridge News, and underscores The Tower's reluctance to track the white metals:

----Despite the run-up in platinum and palladium, traders said they are
seeing very little consumer interest.------
Traders said that profit-taking sales were being offset by trade house purchasing.

As you'll see, there is a fundamental difference between the PGM's and the monetary driven market of gold. Only gold is exactly gold, so to speak. This is also shown in the following comments Bridge reported regarding silver:

-----Silver is seeing a lack of follow through from the recent gold run-up,
but a trader explained that the reasons that gold has rallied do not apply
to silver.
Nevertheless, he still expects silver to act as a "tag along" commodity
and to reach $5.70 in the near term.-----

November crude future opened strongly, reaching the day's high of $24.85 before settling back for a 3c gain on the day, closing at $24.54 in trading that was described as boring on thin volume.

And that's the view from here...after the close.

http://www.wallstreetuncut.com/wsuArchive.htmWe are in the middle of the bear raid. Why do you think the futures were in backwardation? If you expected delivery on the COMEX you would have bought the futures when they were selling well below spot.
News has been coming out to supress:
Russian selling/lending, response +$6. Why? it means there might be delivery, thereby getting some to buy futures instead of waiting on the sidelines as cash is freed up from their stocks.

Besides, there used to be a mint at Placer, and minting and minting equipment is really a cheap if quality control is not that much of an issue. All producers can hire minters to get their product to the public.

Great interviews, Granville - his musical analogy is marvelous:
http://www.wallstreetuncut.com/scripts/audiohurl.asp?format=ns⌖=wsu19991001-final
http://www.wallstreetuncut.com/scripts/audiohurl.asp?format=rm⌖=wsu19991001-final
Others at link above, including Faber, Flecky, Tice, Dent, Eliades, Montgomery, Bianco...

Thanks you for asking. I enjoy your posts.

Yes, undoubtedly there is "something" special about printing FRN. Certainly, the paper(stock) is different and that is 50% of the job. The printing business is very complex and highly specialized as well as fragmented. There are many niches. I took the liberty of taking this particular opportunity to imply that Mr. North may not have all of the facts straight across the board on other issues relating to you know what as well. That's because I am SO weary of all the gloom and doom talk everywhere. BTW, I am guilty as anyone.

Moreover, what he represented was not pure, unadulterated truth (I believe there is such animal). If I see misinformation, I like to point it out. Thanks again for asking now, back to gold.

http://www.geocities.com/TheTropics/Shores/6299/Karachi.htmlSteveH:

Karachi is in Pakistan. (See Link)

Regarding the possibility of suspending trading in the futures markets or limiting ability to take delivery: no way. Not gonna happen. In today's financial climate, that would be like dangling a bloody steak in front of a pack of starving wolves. It would broadcast a message to the world that there was no gold to be found and that the powers that be are desperate. Gold would have to get to $900 an ounce again before they took measures that drastic, because such a move would expose their terror in full.

And furthermore, since there is no manipulation to point to as reason for intervention, as there was in the case of the Hunt brothers, such a move would completely destroy the credibility of the exchange- which would be immediately slapped with billions of dollars in lawsuits, by the way. The COMEX, a privately owned entity, has no desire to destroy itself, regardless of the government's needs or interests.

And a side note to those of you who pooh-pooh paper over actually buying physical: those who bought out of the money gold options are sitting on anywhere from five hundred to five thousand percent returns right now, while the physical metal is still up less than 40%. I could cash out half my option positions right now, buy physical with it, and be miles ahead of anyone who invested the same amount of capital in physical from the getgo.

Soros pointed out that not only do you want to find divergences between perception and reality, you also want to ride the false trends as long as they are profitable.

Also: five days is usually about the time that clearing firms start getting nasty in regards to margin calls, which means next week shorts should really start feeling the heat. Suggestions that this was a short-covering rally that is almost over are completely ludicrous; if that were the case we would have seen open interest fall off rapidly. Ain't happened.

I have found many of the comments on the USA Gold Link to be very helpful and wonder if anyone has any idea of the hedge posture of Dayton Mining. Thanks

The Company realized an average gold price of US$336 per ounce in 1998 compared with US$402 per ounce in 1997. Dayton's hedging program for 1999 consists of 84,000 ounces of puts at US$340 per ounce. These hedges are spread evenly over the year at 7,000 ounces per month.

http://www.dayton-mining.com/I don't know for sure. See their web site. It has a vague statement about hedging. The share volume this afternoon was over a million. I don't know what that means except there are plenty of buyers and sellers for a gold stock that costs 9 cents a share.

phaedrus: I feel that the key here is to go in eyes very wide open and take a balanced approach. Sophisticated traders should be playing both sides using successful paper trades to build a larger position in bullion. I would say that not having a position in bullion at this stage given all the warning signs out there is tempting fate.

Having said all of that, I would like to add that I am still amused at the idea of COMEX being a "fair and free" market...

the cost of a 1oz kruggerand at the only coin shop in a town nearby is $335+tax unless you buy $1,000 worth then it is tax free

Hi....I take it you are familiar with this "theory"......there is a lot to be gleaned from reading his books.....

Enjoyed your take on the markets....

http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999TC sez:
[Can anyone confirm what the deadline is to provide delivery on a gold contract? Last day of month, maybe? That question was raised yesterday, and we've yet to confirm the answer.]


I posted the answer this morning at 04:39 while you were still in bed. Msg ID:15060
See the link above!


Also, TC sez:
"And so the buck gets passed as sellers turn buyers, and only if a seller is found prepared to deliver gold at the new price does this cascading meltdown (meltup?) find some relief. Otherwise, someone at some point has to turn to the spot market. And we must ask ourselves again, why didn't the buyers simply seek spot gold in the first place? We seem to recall positing that size can't be gotten at spot markets without gunning the price. Any other suggestions? Open interest for all COMEX gold contracts total 209,241...theoretical obligations to mobilize 651 tonnes. Hah!"


The textbooks on futures markets all say that a trader shouldn't worry about delivery until the last day or so. Most contracts typically get closed out and/or rolled over into the next month. Futures are for hedging price risk and speculation. If the COMEX gold market becomes a venue to force delivery in quantities, then the gold market has indeed siezed up.


Are you ready for gold to take off like a rocket?

http://www.iol.co.za/news/newsview.php3?click_id=79&art_id=qw938813941868M100&set_id=1That make it 2 in 48 hours, looks like something BIG is going on in South Africa against the marxist ANC Gov ?

Angel - ROFL!! ROFL!!

Oh my.......oh, let me catch my breath.....

Hey Gandalf! You should have bought the rights to "I Got AU Babe" when you had the chance! Ha Ha HAAA.....

Angel, I surely appreciate the thought, but you couldn't be serious......




Could you???

This excerpt is undoubtedly being used out of the context that the author intended, but I just couldn't resist undelining this part in my mind's eye:

".....THE STOCK MARKET DISCOUNTS THE FUTURE, which is why a bull market invariably ends when the short term outlook for earnings growth appears to be at its brightest and commences amidst the worst stages of an economic decline. This discounting mechanism, applied to the Y2K phenomenon, may mean that the negative impact of Y2K on the stock market will be felt prior to 1/1/00...."

...........and inversely, such a discounting mechanism will proportionately reinforce the POG, all other new factors aside.

We are now less than two weeks into a new bull market in gold. I am reminded of the first two-week drop in the Vancouver Stock Exchange in June 1996. Very few of us believed it was for real then. The VSE Index then fell from a high of 1480 to a low of 380. It took less than 30 months.

I think the current sea change in the markets is much greater than the final touches on the gold bear market that is now over, Bob Prechter notwithstanding.

These investment interests that are so massively short gold, might consider gold stocks as a hedge to their gold positions. It may not be the best hedge in the world, but it may be the best hedge available in the world.

The world has allowed the U.S. to export its inflation while the U.S. wallowed in the success of its extravagance. No more. The dollars that have flooded the globe should now start finding their way back into the U.S.

So in terms of U.S. dollars, hard goods of all sorts should start rising in price.

This is my first post on this forum. I think I'll step back now and see how it is received before saying more.

Thank you.

@onlychild (10/01/99; 08:30:04MDT - Msg ID:15086)

The Firearm confiscation in Australia followed a Masacre in a tourist restraunt in which 26 people(I think) were killed.

The killer was an heir to a large gambling fortune who also it seemes has the maturity of a pre-teen, a deadly combination.

Tha arms subject to confiscation/with compensation were Semi-automatic shotguns and rifles of any caliber as well as pump action shotguns. Hanguns which are strictly controlled were not considered within the framework of the policy/legistlation. The rumour is the additional work to ban handguns would have caused the anouncement of the new legislation to fall after the 6.00Pm News time slot.

Any political or social commentater in Australia who speakes favourably toward the shooting sports or firearms for self protection is howled down and derided as a "redneck". During the formutation of the new gunlaws representatives of the shooting sports and representatives of the firearm industry were excluded from presenting their views or offerin advice on formulating a workable system of regulation.

I myself am a sporting pistol shooter and have suffered many derogatory taunts about my "fixation" with firarms. I might also add that I served in the Australian defence forces in the Infantry man as a younger man.

God bless,
Snowy.

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=11423193
"For what it is worth, Alan G has been PERSONALLY jawboning big money Gold Buyers to not add physical stockpiles positions since Late March, so this bombshell of Murph's is nothing new."--ole 49r @ Silicon Investor Gold Price Monitor


The poster at SI who calls himself "Ole49r" seems very sure of himself. Bill Murphy's bombshell was news to me. Anyone else heard anything about this before today and "since late March"?

All:
I just finished reading all the posts today and must say that this is a wonderful group. It's not just the information that's presented as it's great to see it all assembled. Rather, it's good to see everyone offering their feelings (not just their projections) as this market evolves. It's becoming impossible to discuss with everyone because so many people are entering here. Each with their
own slant or take on the day's moves. Very, very good! Michael has created a "one of a kind".

Gold always has been an emotional subject. Especially if you buy it for it's future monetary value instead of trying to quickly trade it for cash. I know there are traders here. It's seen in their cool style and council. For them gold is but a quick paper liquidation and "if I ever need to" it's "off to USAGOLD" to purchase. Hmmmm.

Yes phaedrus, in your world "it ain't going to happen". The failure of paper, that is. But please consider that I move in a different world from you. No, not the high speed "connected" "mover" environment. Rather it's a world attached to a timeline of "ages old" events and "reoccurring human nature". This realm exists today in the minds of a people you will mostly never know. Yet, they hold the very destiny of our modern currency system in their hands. Intelligent, sharp, and filed with "the simple Thoughts", they do very well understand the western differences of common sense. Up vs down, rough vs smooth and most especially "I have" vs "they owes"!

Presently, in your world, the concept of holding "paper gold "they owes"" can and does gain the great percentage returns you reference. I expect your ability to trade will move you quickly ahead of all others before you when the time comes. Then again, it strains credibility to suggest that one could "out trade" every other player when "lightning strikes in the night". I think I saw a movie
where it was counselled "a man's just got to know his limitations". I have been given a view of this storm and my feet are not that fast.

My message (as an extension of Another's) is for the ones that are so very slow. That's me, too! We are doomed to trod the slow path as do the giants, because, in the end things go up faster than traders can revalue paper. Funny as it may seem, all of us will most likely again meet the "fast
traders" though our location in the race will somehow change.
Imagine, if you will the logic of Another:

"This world be still round, my friend. And days have changed with modern toys for boys to play. Though they circle the earth with much speed, full circle bring them but one step "behind me""

Some people may not like the connotations that presents, but boy, it sure keeps my brain clear.

ALL: The end of this currency game will see people trading their hearts out only to use all their winnings to buy the same amount of gold (or much less) they could have purchased in the first place. They did the same thing in Rome, still fighting over economic contracts as the war raged just outside the walls.

Trading IOU paper will never create more gold for anyone until they liquidate and buy. Mostly we don't and what we usually truly gain is only more paper with an "attitude" to prove it. It is against human nature to expect anyone to leave a paper crap table while they are ahead. Millions
and millions of gamblers try to convince themselves and others that they can do it. 99.9% of them never have and never will. It's a siren song as old as time itself. It's the same in the modern stock markets. When the game "truly" ends, few walk away with what they thought they had.

We are on the road of returning to the natural, true monetary values of gold. Values that will not be the one ounce for a suit some still proclaim relevant. It value will be magnified 100 times by the modern advances this society has created. Some will lose their jobs, some will lose money, but the world will not end. Babies will be born and employers will employ. Only the yardstick for measuring wealth will have changed. As events unfold this truth, Another will respond to reference this journey we all will travel. Truly, "events will prove all things".

Thanks ALL FOA

Thanks so much for the info on firearms. I am afraid that our own government is taking advantage of several senseless incidents of violence here to move closer to confiscation in the US. Any student of history should be scared stiff at the ramifications of a disarmed public. If only Tom Jefferson and his cronies were around to explain what they meant in the Second Amendment......

P.S. Isn't it funny that many of the gun control advocates are what we call "pro-choice". What has become of a society when it believes that deadly force against the unborn is acceptable, but deadly force against an assailant is not.

Thanks, FOA, for you fine comment today.

Like most here, I marvel at how your predictions are being fulfilled. Recently you said that a move to $300 would bring about the first defaults. You have described what is going on beneath the surface during this pause. It certainly sounds like turmoil and devastation. And this after only a move to �$300, a level that seemed like a floor only a few months ago. Andy Smith goes on record that gold is suddenly money again... after proclaiming that it was a mere commodity for how many years? He now pleads with the Europeans to reconsider their new position in order to avoid dire consequences. What will be happening when spot reaches the $400 area, if the system is threatened with collapse at $300? Most of us remember $400 (and higher) POG. The world funtioned just fine then. The world of gold is "not as before" Another has been telling us for years. Obviously!

You (and Another) have said many times that the other side will fight furiously to preserve their system. And we know that Big Trader/The Writer/Another has tried to show us how close to collapse their system has been since December of 1996. Today Bill Murphy strongly hints that no settlement by delivery will be allowed on the Comex beginning as soon as this Monday. Has the situation deteriorated so far so fast? Do you know anything about this? What effect on the physical market would such a move imply? Would it bring about a final spike downward to give us one last chance to load up at Michael's Company Store?

You recently said that small purchases of street gold might remain available until November 99. Is that timeline running out?

How much time do we really have?

Bravo F.O.A, Bravo!!!
From all in the "Bullion Boyz Club".
Hope to hear from you in the near future again.
G.T :-)

Date: Fri Oct 01 1999 22:41
flierdude (Can somebody help me out here?) ID#341249:
Copyright � 1999 flierdude/Kitco Inc. All rights reserved
Up until June of this year I had never bought an option. I loaded up on Dec gold calls and Dow puts. In the last 3 days I have tryed to unload 10 of the calls, and, my target price had been hit each of the three days. But, no execution of the trade.

I have a very poor opinion of options right now because of this. I am just wanting to sell ten 320's to get back my original investment on all these option plays from June that I made. The rest I will let ride for 2 or 3 weeks.

I have a very strong feeling that the entire gold options market is going to default. My question to you is this. Do you think this is possible?
If so, at what gold spot price will it default? What would be your best guess of the timing of this default?

Thank You,

Mike

PH in LA (10/01/99; 20:41:09MDT - Msg ID:15150) Sez:

"Do you know anything about this? What effect on the physical market would such a move imply? Would it bring about a final spike downward to give us one last chance to load up at Michael's Company Store?"

I fail to see the logic in a prediciton of a downward spike. Who is going to dump their physical gold right now? Russians? Pakistanis? Buy whatever you can before Monday morning !!!

FOA,

I would gladly meet you anywhere in the continental US to enjoy a very fine meal at my expense if only to discuss anything and everything (even rugby) EXCEPT the subject of gold with you.

My meager words cannot express the respect and admiration I have for you. Cyberspace is a very strange place to meet someone and to assess motivation and character. However, I am with you on that road no matter what the final destination might be. Many thanks for your time...CM

15134 & 15152Phaedrus

"And a side note to those of you who pooh-pooh paper over actually buying physical: those who bought out of the money gold options are sitting on anywhere from five hundred to five thousand percent returns right now, while the physical metal is still up less than 40%. I could cash out half my
option positions right now, buy physical with it, and be miles ahead of anyone who invested the same amount of capital in physical from the getgo."

I felt much the same way prior to today! I was convinced by my broker to at least liquidate my Feb 2000 290 calls. As of 4:45PM EST, more than 2 hours after COMEX closed, no transaction had been made. He would only offer a market order (no limit orders accepted), and could not assure me a timely fill. Hmmm. Yes, this trade makes me rich "on paper", but it's worthless if it can't be executed. Don't count it 'till it's in the bank!

Is anyone aware whether a market order can be canceled once initiated?

Here in the west, we would do well to consider the wisdom of the east and of cultures and peoples who have been engaged in commerce for over 5000 years. We complain about and comment upon contemporary media. However, egocentricity has created a historical bias in education towards the "Western Heritage" which has robbed us of valuable lessons learned centuries ago by peoples who walk this earth still.

http://biz.yahoo.com/rf/991001/bbl.htmla little sample:
"The near collapse of Long Term Capital Management LP, which specialized in highly risky
investment bets, last year prompted its main creditor banks to come up with a $3.5 billion dollar
salvage package. The deal was arranged by New York Federal Reserve President William
McDonough amid fears that the firm's demise could devastate the entire global finance system."

PH, Everybody,
I have more to say than could possibly write now. When I get back we will have an awful lot to cover. We'll all understand later.

Golden Truth,
The "Bullion Boys" did OK today. Golden Sun just about outran (percentage wise) everything. Easy to do when one horse (Silver Moon) hits the rail and flips his rider, "backwards", no less! (smile)

Goldspoon, my vote is "horse with no name" for Platinum. I now remember the song by America.

ALL:
The Russian announcement was in some ways like the English sale. They were asked to publicly say it to drive others to lease before they did (and lower the rate). A ploy only, as some bank shorts withdrew their bid to cover now, waiting to see what would happen (this also lowered
demand (and rates)). The USSR was always the very best at gold trading. Cut your shirt clean off and you never knew you lost it! Dumb, stupid Russian dealers??? No more so than us. Russians good at poker, oh yes. Russians announce deal before the fact to bid themselves a lower rate?? Did anyone buy that one?

I bet Michael still has gold for sale. Still at a good price for a while at least. All you paper traders better take the advise of this old Western Scout, "watch your top knot out there"!

Be back when I can................FOA

Marius (10/01/99; 21:45:29MDT - Msg ID:15155) Sez:

"Is anyone aware whether a market order can be canceled once initiated?"

I'm not sure about the rules at COMEX, but generally, you can cancel an order if your "cancel" gets to the floor traders before they execute your order. I suggest you contact your broker before the Monday open.
Afterwards, fire your broker!

I have more to gain than most with a continuing gold rally; but its hard to argue with Kaplan on gold. He says lease rates have declined from 9 to 4.8% and the shorts have been covered. We are really only $15 above the pre BOE debacle. Gold has been freed, but I think the chances are better than even that Kaplan is right and we will see a correction. My guess would be to $285. I believe if there was a real shortage in gold the world community would right now be bidding it much higher than it is. For those who search for objectivity you must consider Kaplan's statistics.
Both gold and silver are running total deficits, but both have overhangs that will be adjusted over the next year or two with some sort of supply/demand equation. Last several of us ( the stranger was one, I believe, I miss his posts) felt gold would find a floor at 250 - we were pretty adamant, for those who remember! Others talked about $200, $100 and even $10. So far those of us who were talking $250 floor while not being very sexy, were correct - it looks like. Just trying to inject a little sobriety.

"I fail to see the logic in a prediciton of a downward spike. Who is going to dump their physical gold right now? Russians? Pakistanis? Buy whatever you can before Monday morning !!!"

RossL:

We have discussed, disected and guessed for many hours over many years about what exactly is the POG or the Spot Price. It seems to be a very strange animal; part supply/demand, part derivitive/paper/option, part sale of leased material, whatever that means (derivitives) in this crazy, modern world of gold. FOA and Another have predicted a separation of physical, street gold from paper/option/futures market gold. No one can say exactly how or when that will occur. Would the price of physical follow the futures' price down one more time? Or would this be the event that uncouples the two? There is logic in both answers. Certainly, those who have watched these 20 years have seen the price fall, even when no one is "dumping their physical gold...Russians? Pakistanis?"

You are correct in that there is little logic to be found here, (except in a convoluted, illogical sort of way). The modern world has never seen an outright default in the gold market's "dirty float" as it has functioned since 1971. Anyone who claims to see which way it will go by the simple use of logic had better be prepared to explain many things unknowable to many of us.

BTW, where do you propose that we "buy whatever (we) can before Monday morning"?

Marius:
I remember Another speaking to this question of execution long ago: "Your plan is a good one... but the question at that time will not be 'How good is your plan?' But rather 'How good is your broker?'

Truly, this market is not "as before".

From � Peter Asher (9/28/99; 21:18:44MDT - Msg ID:14805)
>>>>>The Comex was not guaranteeing limit orders today, due to the
chaotic activity, and market orders were at the floor traders mercy.<<<<<

I bought three Nov. 550 Silver last Friday morning for $100 + comm. each. I called my broker when they were trading at .29 ($1450) He, in his panic gave me the quote for the Dec. 550, of .37 and I decided to sell one contract into the "blow-off" I thought was occurring. That's when he told me that "because trading was so fast, Comex was not guaranteeing any limit orders even if the price traded through."

I took the chance and got the .29 high of that period. (I consistently get good aggressive executions from the Comex floor with this company. Later, when the blow-off actually occurred (Spot ran to $5.95) To .40 then down to .18 then to .32 then to .20 and the .27, all in two hours. So who knows what would have occurred later with market order? The November options are actually calls on the December contract that expire on the second Friday of Oct. instead of November. They are a very thin issue! The broker and I have been going around a bit over the "Would have could have" of his false quote.

Later I figured out a strategy that is viable when you have an 'in the money' option. You can sell the future itself and then exercise the option to call in the buy side. You have both the liquidity of the futures market and the probability that future will be trading a little higher than the equivalent option price. (When well in the money)

http://news.excite.com/news/r/991001/22/financial-ltcmLTCM may be out of business, Fed's
McDonough says

You think gold is going through the roof before Monday, the above places can sell you all you want. The fundamentals look good for gold and all of the PM's, but it will take time. As I have said before speculation is hard to quantify. When any of the PM's rise or fall it has an effect on the other PM's. Remember ALL PM's rose this week and it was all a change in psychology and technicals of trading (i.e. short covering, etc) - nothing fundamental changed. If COMEX gets short of gold and gold rises India can sell gold and silver until the cows come home - whatever that means - if the price is high enough.

Dollar volume on both the Vancouver and Alberta exchanges was small v - 8.8 mil and A - 6.7 mil.

Ok, I'm not one of the "bullion boys". I did'nt get the big picture, 'cause I started late. Now get off my back, will 'ya? Sheesh!

My question is for anyone who has tried to sell their call options. Have your orders been filled? What kind of order did you place? If you tell your broker that you want to sell "at the market", does that mean that they may sell your position at any old price they come up with? (Is there any skill to it, or do they just lower the price until someone buys?) What is a limit order? Is that where you tell your broker to sell your option for no less than a certain price, and that order stands until it is withdrawn?
I knew this stuff once, a few years ago, but only traded once, and then I got busy with work, and didn't look into the markets until recently. (Thats my story, and I'm sticking to it!)

FOA

I appreciated reading your response to Mr Phaedrus.
Your analogy about the gambler in all of us should serve as a lesson to all those who think they can outrade the mob!

Physical is the only way to go.

Hello, I've only been lurking here for a couple of months. It would seem that you good people have covered just about everything I might have to say on the subjects of gold, fiat currency, gun control, etc. I broke my financial back fighting against fiat currency in 87. Now that my back is better, I just accumulate physical, and equity gold and silver. once again just sayin HELLO.

http://www.jonesheward.com/commentary.cfmThis week's conference call is well worth the time for a follower of this Forum. Gold was the main topic of the call. Most relevant portions are minutes 0:00 - 15:45 and 29:30 to 33:30. A very wide-ranging discussion, and too lengthy to summarize.

Since the street price of gold has gone up to around the price of $320 I was thinking about purchasing a couple Canadian Mountie coins. My reasoning is with the increasing supply issues of US Eagles, and Maple leafs, and Krugerands, I figure nobody has thought about purchasing the Mounties as the price remained $320/oz while spot gold was at $255. I will have to ask my coin dealer what coins are actually the cheapest, but if the current prices are within $2 of a Mountie, I am going for them this week. They are actually much prettier than a Maple Leaf. Does anyone have any thoughts about this?

http://www.egroups.com/group/gata/223.html?Latest "Midas" commentary
by GATA Chairman Bill Murphy.
Spread the word.

Leroy,

Gold's story actually seems to have made it to a major newspaper. I remember when Aldous Huxley (forgive me if I spelled the name wrong) spoke at my University. He spoke of a people from Africa and his tale of writing about them. His manner, diction, and story captivated and enthralled me. For the next four years I searched for his book. I told many people of the man and his tale but the book never came out. I had all but given up on telling the story but one day I heard that a book called ROOTS had just made it to the New York Best Sellers List. It was huge. Never before had I seen such fanfare and hoorah. I actually felt disappointed that a story whose banner I had raised for years after the speach, was no so large and telling that my part in it was over. I am beginning to feel that way about the gold baton, but not yet. But the parallel is quite similar. For over a year I have been telling gold's story without trying to be offensive or overbearing or out of place but as in Roots, it has been an obscure story that seemed to be a forgotten niche that seems to be exploding as Roots did to be one of the major stories of the decade.

SteveH

PS. This is from GATA:


11:30p EDT Friday, October 1, 1999

Dear Friend of GATA and Gold:

The gold carry trade and the short squeeze are finally
news for the mainstream press. Here's a fine article
from the Sydney Morning Herald for Saturday, October 2.
Those of us on the other side of the planet get to read
it a day before publication!

CHRIS POWELL, Secretary
Gold Anti-Trust Action Committee Inc.

* * *

A SQUEEZE TO PLEASE

By Steve Burrell
Sydney Morning Herald

Saturday, October 2, 1999

Paul Lee, the head of gold trading at Dresdner
Kleinwort Benson in Sydney, could be forgiven for
forgetting where he lived this week.

He didn't go to bed for three nights straight as he and
his fellow traders stayed at their screens around the
clock, riding the biggest and fastest rise in the gold
price in almost 20 years.

Lee's sleepless-in-the-saddle week began last Sunday
with unexpected news from the other side of the world.

With his unruly shock of hair and unfashionable black-
framed glasses, European Central Bank president Wim
Duisenberg looks more like a slightly owlish university
don than a white knight.

But when he and 15 of his fellow European central
bankers announced at the IMF-World Bank meeting in
Washington that they were capping sales and lending of
gold out of their official reserves, they became a
battalion of white knights and the Seventh Cavalry
rolled into one for the beleaguered gold sector.

The unprecedented announcement took the market
completely by surprise and sparked one of the most
dramatic surges in the gold price in a generation.

The gold price soared almost 25 percent in a few days
to as high as $US329 an ounce 30 percent above its
late August low of $US252.90 before consolidating
around $US300 by the end of the week.

On Tuesday alone, the London price rose $US20.40 an
ounce, the largest increase in dollar or percentage
terms in more than 17 years.

The agreement, master-minded by the central banks of
the world's 10 biggest economies, was a co-ordinated
attempt to reverse the long slump in the gold price
which had recently seen it crash to 20-year lows of
around $US250 an ounce, putting gold producers around
the word under extreme pressure.

Secret discussions on the deal began in earnest in
August, after an announcement on May 7 by the UK that
it was planning to sell gold reserves sparked a $US30
per ounce crash in the gold price and left the market
vulnerable to further falls.

Last weekend's announcement lifted a black cloud which
had hung over the gold market for more than three
years.

"The enormity of the announcement by European central
banks cannot be underestimated," says Colonial State
Bank chief economist Craig James. "The threat of
central bank sales was the prime factor driving the
gold price lower.

"The expectation of lower prices led to short selling
by speculators, inducing further downside.

"The removal of the spectre of substantial central bank
sales means mine supply and demand will again be the
main determinants of the gold price."

But while the sudden, spectacular surge in the gold
price has produced some happy miners and gold company
shareholders, for others the revival of the precious
metal has come as an expensive surprise.

For a lot of speculators, including some of the world's
biggest hedge funds, it was a case of the free lunch
biting back.

They were up to their eyeballs in the financial
markets' latest version of a licence to print money,
the "gold carry trade."

The near-vertical trajectory of the once-languishing
gold price in the wake of the central bank announcement
has all the hallmarks of a rush of speculators to the
exits.

The hedge funds and other financial market heavyweights
including, market rumour has it , big investment banks
such as Goldman Sachs were forced to unwind plays which
could involve around $US25 billion ($38.4 billion) in
borrowed gold, frantically buying to cover their
"short" positions and driving the price up even
further.

On Tuesday, as gold prices spiked higher to $US326 from
$US304 in matter of minutes, rumours swirled about
massive buying by a New York dealer on behalf of a
client unwinding a $4 billion bet on the gold price
falling, according to the Wall Street Journal.

Gold's amazing resurgence may also have dramatically
changed the rules of the game for many producers, who,
like the funds, had borrowed central bank gold and sold
forward to hedge their production.

The higher interest cost of carrying these positions
means it is no longer profitable for them to sell
forward and may even prompt a major buyback by
producers to cover these short positions, according to
some analysts.

As Paul Lee notes: "Structurally, the entire industry
has changed."

The "gold carry" is a close cousin of the "yen carry
trade," which got the hedge funds into so much trouble
last year.

Speculators borrowed yen at ultra-low interest rates
and reinvested the proceeds in higher yielding
securities a guaranteed money-making proposition until
the yen started to rise against the US dollar and made
paying back the borrowings more expensive. With the
gold carry, hedge funds and other speculators borrow
gold from a central bank, leveraging up their position
by using bank credit to increase the size of the
exposure.

They then sell this borrowed gold and invest the
proceeds in other securities, such as US Treasury
bonds.

The trick in this case was that, until recently, the
cost of borrowing gold was only around 1.5 percent to
2 percent because central banks, keen to earn some
interest on their large gold holdings, were prepared
lend it out at a low rate.

With rates on US Treasuries at more than 5.5 percent,
it was money for jam.

What's more, with gold prices falling, they could also
expect to make money when they eventually returned the
gold to the central bank because they could buy it at a
lower price than when they borrowed it a standard
speculative play called shorting the market .

With leverage, these speculative positions could
deliver the hedge funds and their investors returns of
40 percent or more.

Unlike the yen carry trade, there is no currency risk
involved, though, as they were to discover, they were
exposed to interest rate risk and, of course, the
chance that the gold price might actually rise.

With central banks selling their gold reserves, so-
called "fabrication" demand for gold in the previously
strong Asian market still recovering from the economic
crisis and inflation low, there seemed little risk of
that.

If anything, with the spectre of central bank sales
hanging over the market, further falls were expected.

It was little wonder that the hedge funds arrived in
droves to take advantage of this free lunch during the
past year or two.

Just as no-one really knows how exposed the hedge funds
were to the yen last year, it is hard to be sure how
big their short position in gold was going into last
week and at what price those positions started going
under water.

Some analysts have put their collective short positions
as high as 8,000 tonnes. More reliable estimates of
central bank lending of around 5,000 to 6,000 tonnes to
both forward selling gold producers and speculators
suggests it would be closer to 2,000 to 2,500 tonnes.
Still, that's up to $US25 billion worth of gold at
current prices.

One of the first signs that the magic pudding of the
gold carry was about to turn sour came the previous
week when gold rallied almost $US6 an ounce in the wake
of the Bank of England's second auction of its gold
reserves.

The 25-tonne auction, part of a gradual unloading of
half of Britain's total reserves, was eight times
oversubscribed, with some of the world's biggest
producers among those buying up big to cover short
hedging positions.

The subsequent price rise to more than $US260 an ounce
was only the beginning.

The rally was supercharged over the weekend with the
surprise announcement by the European central banks
that they were capping annual gold sales from their
official reserves at 400 tonnes for the next five
years. With sales of around 1,715 tonnes by the UK and
Switzerland already decided, this was close to a
moratorium on selling until late 2004.

It also dramatically reduced the amount of central bank
gold likely to be sold worldwide in the next few years.

Together the European central banks, the US and the
International Monetary Fund hold 80 percent of
official sector gold. With the IMF changing its mind
about on-market sales to fund its recent debt relief
initiative and the US not having sold gold since the
late 1970s, the European decision was pivotal.

The announcement largely removed the threat of massive
central bank sales which had hung over the market since
the Belgian central bank announced it was unloading
gold reserves in March 1996 a fear which was
intensified greatly when Australia's own Reserve Bank
revealed in early July 1997 it had already begun
selling gold.

The European banks' weekend announcement fuelled an
immediate $US16-an-ounce jump in the gold price, taking
it above $US280 an ounce for the first time since early
May.

Although the average price at which the funds were
carrying their gold positions is unclear, this would
have started to take them close to the danger zone
where it would cost them more to repay the gold they
had borrowed from the central banks than when they
borrowed it.

They were already facing a squeeze from another
direction the interest rates charged by the central
banks for borrowing their gold. In recent months this
so-called lease rate had jumped from 1.5 percent to
around 4 percent, amid rumours the central banks were
withdrawing gold from the market. This sharply reduced
gains on the gold carry.

At one stage during the turmoil of the past week the
lease rate climbed above 10 percent.

For those borrowing on a "floating lease" basis akin to
a floating rate mortgage this means the gold carry was
costing them a lot of money.

Significantly, the European banks said last weekend
that, in addition to limiting their gold sales, they
would also curb their gold lending, agreeing "not to
expand their gold leasings and their use of gold
futures and options over this period".

With the European central banks holding around a third
of the estimated 5,000 to 6,000 tonne pool of bullion
reserves available to be lent out, this could have a
significant impact on the level of gold borrowings and
will help keep lease rates high.

Combined with the rising gold price, the rise in the
lease rates appears to have been the signal for the
speculators to get out by buying gold to cover their
short positions.

This bail-out made the climb in the gold price even
more spectacular, driving it as high as $US329 an ounce
in London trading on Wednedsay and leaving it at $US302
an ounce, a rise of 14 percent over the week,
yesterday.

The short squeeze was tightened even further by the
fact there were few sellers in the market. This was
partly because producers and other holders of gold were
waiting to see if the price rose further and partly
because producers were themselves short because of
previous forward selling at prices much lower than
prevailing now.

In effect their position was not much better than the
hedge fund themselves.

To put this week's rise in perspective, however, the
gold price is still well below the $US340 to $US350 an
ounce range that prevailed before the RBA's sale
announcement in mid-1997.

And it's still miles away from the $US400-an-ounce
levels of early 1996, before the Belgian sales
announcement not to mention its all-time high of $835
an ounce in 1980.

Although there is a big question mark over whether gold
will approach the levels of two years ago, the price
outlook is definitely brighter and current levels could
well be maintained or bettered, according to analysts.

While the recent spikes were driven by the bail-out of
the speculators, the rise in the gold price is also
reflecting shifting fundamentals in the industry and
the world economy.

The unexpectedly rapid recovery from financial crisis
of many of the East Asian economies among the biggest
buyers of gold for jewellery and other manufacturing
uses means fabrication demand is stronger and likely to
improve, as will the generally stronger outlook for the
world economy as whole.

The World Gold Council put gold demand at record levels
in the June quarter, with supply down by 5 percent on
six months earlier.

The annual gap between fabrication demand and mine
production has been around 500 tonnes for the past few
years and, according to a respected analyst of the
market, NM Rothschild & Sons chief economist Ric Simes,
it will rise to 1,000 tonnes a year for each of the
next few years as mine production growth slows.

The prospect of higher global inflation and signs that
the recent era of US dollar strength is coming to an
end also makes gold a more attractive proposition,
though the inflation hedge factor is far less important
than it has been in the past.

And on the supply side of the market, the European
central banks' decision to limit sales and lending,
along with the rethink on sales by the IMF, will also
lend price support.

After the present bout of volatility and short-covering
passes, Dresdner's Paul Lee sees the gold price
establishing a new firm foundation around $US275 to
$US280, although he doesn't rule out the price spiking
even higher than $US329 in the short term if hedging
positions continue to be unwound.

With demand firm, Colonial State Bank's Craig James
sees the price returning to around the $US325 to $US350
level which prevailed before the threat of central bank
sales slammed the market.

Rothschild's Ric Simes sees the price settling above
$US300 an ounce. "The reasons why gold might trend
higher were already accumulating (before the recent
price jump)," he said.

"They included US dollar weakness, strong physical
demand, the current short-term liquidity issues,
strength in other commodity prices, especially oil,
strong coin demand in the US and marked slowdown in
mine production growth.

"Y2K and weaknesses, or a sharp fall, in US equities
were other candidates that could lend strength to any
rally."

Simes says the likelihood of producers selling forward
could cap further price rallies in coming months,
though they may be deterred from this if the market
stays in a state of "backwardation", where spot prices
are higher than prices for future sales.

"Longer term, the market deficits will absorb sizable
amounts of above-ground stocks," he said. "Given where
costs of production are, a price settling above $US300
an ounce and noticeably above this level if the US
dollar is weak would appear warranted."

-END-


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As I understand these coins are sold at 320 ( I saw 325 ) with a put option to sell them back at 310, good till 12/31/99. In the last POG spike I saw the price of mounties rise above their "normal" price right along with the rest of the coins. I don't know about the purity of the Mounties but assuming that they are equivalent to Maples, once the other coins rise, the Mounties at the same price would have a free asset ( 310 put ) attached.

Hi,
First post with a question or two...
Deciding to gamble a little on the y2k situation(much uncertainty there.....) I purchased a feb 280 gold call($180.00) and a couple of march 700 silver calls($250.00) about 3 or 4 weeks ago. If my math is right the gold call is up 1600%($2950) and the silver up 160%($400).

The online trading firm i purchased them through now says:


UNTIL FURTHER NOTICE, ALL NEW METAL OPTION ORDERS MUST BE
MARKET ORDERS. WORKING
LIMIT OR STOP ORDERS PRIOR TO 9/30 WILL CONTINUTE TO WORK BUT CAN
ONLY BE
CANCELLED OR CXL/REPLACED TO THE MARKET. ANY ATTEMPTS TO
CXL/REPLACE AN ORDER
MAY BE REJECTED BY THE FLOOR WITHOUT NOTICE. ALL COMEX ORDERS
CONTINUE TO BE
NOT HELD.

Needless to say the orders to sell that I placed two days ago were rejected because of the above.(market orders only being accepted..)

I don't really know what goes on in the options pits but i have my suspicions that it's not quite on the up and up. If I enter a market order to sell I am at their mercy as to what price I will receive. It seems to me that they play games like selling at the lows of the day and buying at the highs of the day. The quote yesterday (which was the first full day of the new policy stated above) was about $3300 for the high and $200 for the low which was way out of line of the past few days. The price of gold did not fluctuate enough to warrant $200 for the low yet somehow the floor brokers found it.....

I'm not willing to let these contracts go for a song and it seems the trading conditions have calmed to a level where this policy is not really needed but they want to have the luxury of selling me out for next to nothing.

Any insight from the many knowledgeable people here would be appreciated as to what I should do and also how the game on the floor really is.

BTW, I do collect coins and have physical also. (just in case...)

Thanks for your time. I really enjoy reading all of your posts here ! A wealth of information :-)
Tanglewild

I think you mean Alex Haley. What an interesting letter! Leroy is a lucky person to have a friend like you.

Good Morning
About a month ago I posted a question concerning gold lease agreements, namely, Do these entities who lease out gold require it to be paid back as gold when the lease is up, or do they accept payment in currency? No one knew exactly how these agreements work. I guess none of us has seen one of the lease agreements. It is a very important question. If indeed the gold has to be paid back as gold and even perhaps the percentage rate is required to be paid in gold, then as I postulated, the central banks are going to acquire gold out of these lease agreements.
Everyone on the forum keeps saying that the speculators borrow the gold, then sell it on the market, then buy treasuries etc. with it. Well what happens at the end of the lease? Let's say I borrowed gold on a one month lease, sold it, and bought something else with it. At the end of the month, do I settle up with the gold bank in cash? Do I rollover the lease, or do I buy that gold back on the open market to return it to the gold bank? It seems the only way to make money doing this is to pay back in currency unless the gold price continually goes down, in which case I could buy back the gold on the open market at the end of the month and return it to the gold bank.
In any case, the important question is: Do these entities who lease out gold require the pay back to be in gold or do they accept pay back in currency?
This one question is the determining factor in whether the central banks have been, in reality, selling gold in their leasing agreements or actually acquiring gold. If the payment is required to be paid back in gold, then all these leasing agreements are hanging over these traders and speculators until they return all that leased gold, plus interest. The central banks squeeze a bunch of gold out of the markets to put in their vaults and at the same time it becomes much more valuable. Could they have done this on purpose?

For years the shorts have had the market by the tail, and very few cryed "foul". (Except for this forum, and GATA, and maybe a couple of others)
Our lives continued, because there was nothing we could do about it.
Now that the market, due to a shift in the worlds currency paradigm, by the European Central Banks cutting the dollar loose to float like a dead fish, there has been a sea change of events, and the market has turned for us, we immediately have thoughts like:
It won't last.
Our side is still doomed.
There will be fresh gold somewhere to bail out the shorts, so they can maintain their strangle hold.
A few of us anxiously scour the net and the news wires, looking for signs of default and seizure. And what you look for, you will find.
I feel there is kind of a psychology of defeat in some of us, that won't let us ride the wave of success.
Its almost like someone saying, after they have been set free: "I don't deserve this, maybe I better let them beat me again, just to keep order in the universe- Gosh, look, they have whips and chains!" And while focusing on what "they" can do, we look not in the direction of freedom, just at the door.
Don't crumble.
Be brave.
A new day is dawning.
Gold is for free men.

The following is a condensed version of all the major issues that I have discussed so far regarding gold.

Gold short position.

Have no doubt, the gold short position is still intact, virtually unchanged from before the rally. The physical gold obligations are 8000 to 10000 tons, the pure paper gold (short) derivatives account for at least that amount once over (call options etc).
Sources:
Quoting gold bear Andy Smith, 6000 tons of CB gold were lent, 1500 from EU members. Actually, I believe he is referring to the combination of CB and semi-official institutions, including the Vatican, Saudi and Kuwaiti royals, etc..
An additional 2000-4000 tons were taken from private unallocated gold accounts.
The physical borrowing mechanism has two parts, the producer hedge/forward and the speculative borrower using the gold for financing or as a pure short. The gold producer hedge is only 3500 tons. The balance is speculative ammounting to 4500 to 6500 tons.
The pure paper positions are predominantly intended for directional speculation and the issue of naked calls hoping that they expire worthless and from spread trades.
Each borrowing operation generates two short positions as the bullion is lent to the bullion bank (BB) and re-lent to the final borrower, be it the producer or the speculator. The bullion hits the market as certificates or as straight physical gold, sold by the BB for the borrower. The BB may then sell the miner's contract for a third short. Both the BB and the borrower are short where the BB also has a long position, but if the miner's hedge is sold, the BB has a naked position.
In this way, at least two buyers are satisfied and perhaps three with the same one ounce.

Supply demand deficits:
The 500 ton annual supply deficit of the past 5 or more years, has been met by this mechanism, according to Veneroso's estimates. In addition to this, there is the Arab oil position. Over the last decade about 1500 tons were purchased per year in long term supply contracts. These are generated by the trade of short term oil futures for long term gold forwards of the mines (or speculators), while the gold was lent by the Arab oil party, and then repurchased by them. This gold never hit the market. Purely a closed door operation. When added up over the last 10 years, minus the supply delivered from these contracts to the Arab oil countries and the scrap recovery from Asian sales last year (say 1000 tons), we have just under 9500 tons of physical gold supplied to the buyers, 2/3 to the Arab oil buyers, the balance to the markets. Using the mechanism described above, at least just under 19000 tons were shorted.

Price short covering interaction.
Gold demand, though price sensitive in the East, is inversely related to the price in the West. Thus demand increases on the way down in price. On the way up, demand declines more slowly because of the jumping on of Western momentum player. Therefore, there is an assymetry favorable towards the long side. Furthermore, there is a tendency to return to sustainable production levels, rather than operation at 140% of design capacity through highgrading. Producers will also be wary of increasing investment in new production beyond the current depressed levels that are only sufficient to replace 60% of current production going into 2005. The retrenchment in production from last years' peak will ammount to a 5% to 10% drop if prices are stable and rising, or a quick 20 to 40% drop if prices rise well above $400 and stabilize there. It is the combination of these basics with the aggressiveness of short covering under duress that will shoot prices higher.
By my estimate of the price reaction to the short covering during the initial stages of the process, there would be a $2.4 (+/- $0.70) rise in price during short covering for every $1 lost during the shorting process. Since the shorting process dropped prices from over $400 in late 96 to the previous low level of $250, the gold price recovery as a result of this element alone should give rise to a $500 price. Longer term, the gold short position formed in the 95-96 period prior to the fall in price, will be added to this to raise the price further, perhaps contributing to an extra $100 gain. On top of this is the growth in demand and the assured loss of future supply from lack of investment and from cessation of fresh leasing. The result is unpredictable, but is surely to be quite robust. So a stable price level should be very significantly above $600 that would be caused by short covering alone. Doubling this figure would not be difficult in such a thinned market.

Dollar weakness.
The abysmal US economic performance of the last few years has brought the world a sea of dollars, currently the major export the US has ever produced (including the current value of all of WWII munitions "exports" to Dresden and the like). US manufacturing has withered, and we have turned into a nation of traders of the goods and money of others, plunderers of the weak, debtors to the strong. The borrowed bubble lent by Japan and Europe is being eliminated through repatriation. The foreign debt of poor and quickly re-emerging countries is being rapidly eliminated with each purchase at the neighborhood mall, and vulture capitalists exchanging debt for equity. Even quicker has been the elimination of $ denominated debt of the Asian countries by its the refinancing to Euros, SF and Yen. They will soon not need $ for debt settlement.
If oil countries start selling their oil in all currencies, or join the EU in using the Euro, there will be no reason left for anyone to keep $. They will not be percieved as a store of value any longer. The sea of debt of the US will look for anything American to buy, from alfalfa to zeolites. BMW, Mercedes, Toyota, Honda, Toshiba, Sony and others built plants here in the expectation of a decline in $ that would make a Ford Taurus come closer in price to a Hyundai Elantra. Import -export parity probably stands at 40 - 60 Yen to the dollar and a 60%-70% devaluation relative even to the Yuan.
The promise of the Fed to monetize all debt in order to keep the banking system liquid will end up with the most massive money printing operation since Weimar and Brazil. If only this were to occur, the $ would fall into an abyss as did the Ruble. If not, the banking system will implode as Japanese, Swiss and EU creditors leave the markets and flight capital returns to its home. The latter case would result in a rapid drop in the $ accompanied by massive collapse. Just that the bottom would not be as low.

Military roles
The Anglo world's moralistic and humanistic intervention is broadly viewed as destabilizing and dangerous. It forces all nations to ask under what circumstances would their borders be under assault and whether they, or indeed the US and its Anglo allies would come short upon this "humanistic" examination. Malaysia's Mahatir Muhamed, though I abhor him and his political system, has stated the issue outright. It is a parsimonious missionary force to bring moral and political colonialism back into independent countries if they just don't happen to have atomic weapons.
China, Russia, Pakistan, and India will quickly assist anybody with a flag and money in putting together their own little MAD for self protection from the US. The world will be a much less stable place and the US high tech forces will be useless in these conditions. The US would face the fact that in its zeal to protect the weak, it has become a pariah nation and a destructive force serving its own agendas in the guise of phillanthropy and peace.

The current system is on its last legs. No matter how terrible the retribution for dismantling the $ reserve system and its mirror of the US/Anglo military "police" actions, the alternatives are worse for both the US and the rest of the world.

If desperate enough or if it is important enough, gov will take whatever measures necessary to get what some beaurecrat wants without thought to legalities.
Because your gold isn't registered in a database, I wouldn't be too worried about them knocking on your door. They might, and ASK... but they would probably be bluffing. I won't be surprised if we see a patriotic appeal for gold redemption (ala Korea) with a veiled threat at the end but the logistics are too great in my opinion.
Now guns are a different matter..... as is any extra food that you have "hoarded" (quantity decided arbitrarily by thugs).

Cut this guy some slack. He's not a printer nor would say he is an expert in that field. I would expect he means that the quality of the printing will be noticably poorer and therefore apparent to even the dimmest sheeple. I would expect that there wouldn't be enough paper stock available and they would have to use something entirely different. Maybe something like military script or food stamps. That alone would kill confidence. Forgery is easier and this money would most likely only be able to be used domestically.

Arsenal of weapons? Buried gold? As Yosemite Sam would say, "thats my kinda gal". Leigh is right, call CPM and talk to one of the dealers. (I'll put in a plug for George now. I have been ordering my stash from him since 1996.) They can advise on availability and advantages of the different type of PHYSICAL gold. Of course a lady of your caliber (pun intnded) would only buy the physical and take delivery. You don't have to be concerned about the long delivery times when ordering from CPM. They're honest. By the way I've got three "quarter horses with chrome" standing in the corral and another on order for March Delivery. Tobianos one and all.

PH in LA

I've been wrong before, and I'm sure I'll be proven wrong again! There are local coin dealers open Saturday with gold for sale... I think I will buy some. Preserving wealth is more important than making trading gains measured in dollars.
If the "price of gold" now goes down in terms of dollars it will signal deflation. Deflation would bring defaults in the capital markets.

We absolutely have covered this many times before, but I now have the "gut feeling" that the time is here. Another short-covering rally could start ant any time.

Hipplebeck

I think your summary of gold leasing is pretty close, but you need to add the risk of default into the picture. The central banks wont be accumulating gold if the borrowers default.
Paying back the principle + interest is not a problem if the borrower is a gold miner who wants to finance production. If the borrower is a speculator, then he could be squeezed.

About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.

About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.

About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.

Sorry if my first sentence seemed aimed at you, Marius. I was talking to that little man of wisdom and reason, who I've been ignoring, as he taps me on the shoulder and says:"Why don't you buy some REAL gold?"

The second part of that post was kind of a continuation of your discussion about market orders, and limit orders.

From reading a few of the other posts, it appears that we are subject to the whim of the floor traders now!

It is my understanding that principle + interest on gold leases are to be paid back in gold.

It seems to me that now might be the time to resurect some of the investment ideas of 1995 and 1996 when the small gold stocks were flying high and every investment banker was fighting over raising financing for every moose pasture that they could find in most of the western and eastern world. As the apparent commodity appreciation continues the dollar decline and the relative weakness in the stock and bond markets will unleash a healthy amount of investment capital looking for a home. To say nothing of an army of investment bankers willing to finance anything that moves. Many of the scams of that last market are gone and thank god. But there were some actual viable deposits that faded into obscurity when the economics changed so radically and can now be bought for a song. This forum is repleat with individuals who have experience in this area and now is the time to be sharing the information. Too often after the move has gone too far along all you hear are already invested owners talking their personal book,in a rather hopefull wish that it will somehow make their own stocks go higher. Many of these deposits where highly valued in the marketplace and some of them still have vialbel gold mining and gold production comapanies that trade on exchanges. These woill be the first to raise new capital and thereby the stock price when the investment banking cycle starts again in this sector.CARPE DEIM

Thanks all. I really appreciate you guys(includes gals) and all that I'm learning from ya.

Suppose one runs out today, to a few local pawn shops, to check on coins and maybe buy. Any coins in particular one should focus on? Any ideas about how much over spot one should stay under for newly minted coins and/or junk, silver/gold (excuse my PM grammer but I'm still in first grade :D )? BTW (by the way) one doesn't feel real comfortable purchasing too much "local" especially with potential hardships approaching in about 90 days.

Granny does carry a big stick, literally. (A branch fell off a tree this week, firmly lodging in the wipers across the hood of Big Red, granny's F250 diesel.)Granny has gotten many a good chuckle especially when someone "gets it".

That's Alex Haley, not Aldous Huxley. The latter was well known for a book called "The doors to perception" along with many novels, one of which was "Island."

Excercise the Gold option by calling in the underlying future, You are close to having enough equity to meet the margin requirement and you will have a month longer on the future.

The Silver call has plenty of time to let more events unfold.

Peter Asher:

Didn't he also write the wildly futuristic novel "1984"?

George Orwell. Aldous Huxley (1894-1963) wrote "Brave New World." He was the grandson of the famous sociologist Thomas Henry Huxley and the brother of the noted biologist Sir Julian Huxley. (We have a World Book Encyclopedia next to the computer desk!)

How was "Three Kings?" Is it worth going to see? Did you see a lot of gold?

It was the "Other one" , "Brave New World"

Granny, don't feel that you have to buy your coins locally, unless there's a merchant that you like and trust. There are lots of dealers on the Internet, or you can go to your nearest big city. Don't be afraid to have the coins shipped. I was at first (sending gold by U.S. MAIL? Are you crazy????), but it's actually very safe. There's a long paper trail the Postal employees have to follow, and if anyone is caught stealing they are fired. The prices are very competitive. I like to buy bullion coins, which are new, very pretty, and often 0.999 pure. They're also a better bet than purchasing coins you aren't familiar with, especially if you aren't quite sure of the dealer.

http://www.prudentbear.com/markcomm/markcomm.htmThe latest commentary from the Prudent Bear, David Tice ...

>Our sense is that developments in Europe could now prove most significant. It certainly appears to us that the European Central Bank (ECB) is preparing the markets for a rate increase at its meeting next Thursday, and they may decide to act aggressively. A strong tone of independence now emanates from European officials. With tough talk focused on rising inflationary pressures, ECB President Wim Duisenberg and Chief Economist Otmar Issing provide quite a contrast to dovish pronouncements from our central bankers. While European central bankers are becoming noticeably nervous, our Federal Reserve apparently could not be happier.

...

All the same, with the continuation of such banter, we would be very surprised if the Federal Reserve increases interest rates next Tuesday and we sense the stock market anticipating no action by the Fed. We certainly now assume that the Fed is going to let this bubble run its course, instead of acting responsibly. However, if the Europeans do raise rates next week, this could prove a significant event for the US bubble. With the dollar acutely vulnerable right now, higher European interest rates could quickly translate into a weaker dollar that would likely put additional pressure on US interest rates and stock prices. In this regard, we will repeat a point we made within Wednesday's rambling commentary: "the Fed is losing control." <

got toilet paper ??

http://www.house.gov/paul/press/press99/pr100199.htm>WASHINGTON, DC -- In approving the House-Senate compromise on the Transportation Appropriations legislation Friday, the House of Representatives killed an ill-conceived plan that would have prevented Americans from getting new jobs, boarding airplanes or exercising their Second Amendment rights without holding a National ID card. The National ID was slated to go into effect Oct. 1, 2000.<

Which means the totalitarians will now try Plan B.

Thanks Leigh. I just recently made two "online" purchases of recently minted bullion. I have received one shipment but the other is "delayed". Reason told has something to do with minting backlog or such. I'm unsure if I should be uneasy about this or if this is "normal". In both cases the "dealers" are either well known, recommended or highly visible and in both cases I have spoken with the proprietor, personally. I am happy with the arrived purchase and when second arrives I'm certain(hope) I'll say the same. AND they are really pretty and pristine. Had to get the dissecting microscope out, though, to really appreciate the 1/10 oz. Hubby was shocked that so much "worth" could be contained in such a small package! Easy to hide/bury though. He's more used to "vintage" silver.

I thought I'd venture down to the local shops to see if I could find any bargains. Last time I was in the shops I wasn't as prepared as I am now (although a little bit of knowledge CAN be dangerous, I realize). Appreciate your assistance. Be well.

Thank you, God, and thank you, Ron Paul! Mr. Paul is a diligent advocate for our freedom, and we owe him A LOT!!!

It was late/early. Thanks.

First of all ,thanks for that post this A.M......thank you for your "time" you spent putting the "pieces of the puzzle" together...!

This is a post from marketforum.com (it is mainly a forum that chats soybeans, corn, hogs, cattle etc).... the main "buzz" now is gold calls and the bad/no fills they have been receiving from the COMEX...here is the post:











" Nymex/Comex Follies Herald End of Open Outcry???

Posted By: John J. Lothian
Saturday, 2 October 1999, at 11:53 a.m.

With the follies at the Nymex/Comex this week, the inking of the Eurex/CBOT deal and the
announcement by the MGE they will enter into an agreement with a company called ePit to develop an
electronic commodity exchange, could this week have been the turning point for the end of open outcry
trading in the U.S. as we know it.

The Nymex/Comex was ill-prepared for the huge explosion of order volume they saw this week. They
seemingly have had their heads in the sand as the Internet revolution and technological advancements
have brought new demands upon the efficiency of their markets.

They have seemingly ignored the success of the E-mini S&P contract at the CME, which not only
helped ease the flow of customer paper into and out of the big S&P 500 pit, but has attracted masses
of new traders into the futures markets. For example, why has the Nymex/Comex not started side by
side trading with their ACCESS electronic trading system during the day, or better offered a smaller
size contract on it running side by side with the big pit traded contracts. I believe this approach has
added liquidity to the S&Ps, not stolen volume from them. While a Nymex/Comex approach would be
somewhat more similar to the un-robust CBOT Project A offerings during the day, it would at least
give the exchange another avenue to handle explosions of volume. Open ACCESS up to the FIX API
the CME is introducing (if possible?) and suddenly the Nymex/Comex has opened their markets to
electronic futures traders around the world in a meaningful way.

Electronic traders do already have access to the Nymex/Comex, but the efficiency ends at the point
where the human brokers can not handle the volume of order flow. The Nymex/Comex, to my
knowledge, has done nothing to technologically enhance the open outcry efficiency. At the CBOT
there are about 100 Electronic Clerk (EC) terminals which aid brokers and clerks in managing the
customer orders, easing execution, and speeding reporting of fills. In fact, my CBOT floor manager this
week told me he has an EC pilot program in the Corn options, where this terminal is receiving only
straight buy and sell corn option market orders. That is a first, to my knowledge. At the CME, they
are behind in their unofficial goal to put 200 CUBS2 terminals in by the end of 1999. However, I can
now route orders to 5 different CUBS2 terminals on the CME floor and the list is growing every
month.

In the old days the flow of orders was limited to the number of phone clerks on the trading floor and
the speed they could take orders. It was also limited by the number of floor runners and their ability to
get orders into the brokers quickly and return to the desk for more orders. Sometimes runners would
stack up getting into a particular busy broker, thus the flow of orders was regulated by this physical
limitation.

With Internet order routing systems routing orders to New York, the flow of orders to the trading floor
is a function of the number and speed of order printers on the trading floors. Those printers and
computer systems can quickly send hundreds of orders to the trading floor within minutes. From there
though the Nymex/Comex did not and does not have a technological tool to help manage this order
flow. They could throw more human beings at the pits, pull clerks and runners off of other pits and
desks. I am sure there was plenty of this people shuffling going on at the Nymex/Comex this week, but
during the largest volumes it could not meet the challenge.

Clearly to me, the Nymex/Comex needs to technologically advance the efficiency of their open outcry
trading, or their black eye this week will speed the demise of open outcry trading at all U.S. exchanges.
The Nymex/Comex failure to efficiently perform this week for the retail traders presents an opening
for a would be predatory exchange or e-alliance. Once an existing or new exchange shows it can steal
the business of an open outcry market here in the U.S., momentum will be increasing for more markets
to switch to electronic trading or have volume stolen from existing markets.

Here is my suggestions for the Nymex/Comex:

1) Enhance open outcry trading by opening the exchange to the entrance of Electronic Clerk or CUBS2
terminals from the CBOT and CME to connect them to existing TOPS networking in place. 2) Create a
* sized gold and silver contract and trade them on ACCESS 23 * hours during the trading week. 3) Give
away free quotes for your ACCESS contracts. 4) Develop an open API for ACCESS to open the
system up to Internet order routing systems. 5) Promote the heck out of these contracts on the
Internet. 6) If you can't do these things by yourself in a timely manner, think about merging with
another exchange that has the technological ability already. It is not enough today just to transform
yourself into a for-profit corporation, you must have the strategic partners, capital and mass to
effectively compete. 7) At least forge an alliance with another exchange to get access to better
technology if you can't bring the necessary products to market in a timely fashion. It is better to make
some new alliances than have competitors develop competing products you can't match.

The Nymex/Comex must understand they don't exist in a vacuum. The gold and silver markets are
nearly as old as human civilization. Every country uses petroleum products. Today more of the
world's population has inexpensive access to futures prices than ever before in history, via free and
fee-based Internet sites and services. The traders who have flocked to the stock index trading in then
last 18 + years and are now trading via the Internet or through technologically equipped brokers are
clearly familiar with the traditional gold and silver markets. All it took to attract some attention to the
gold and silver market was the first substantial bull move in 13 years on Monday.

I will admit that the almost continuous bear market in gold for the last 13 years left a lot of people
with low expectations for this market. On Tuesday driving to the train I heard some analyst/trader
being quoted on the radio as saying the market action on Monday suggested that by the end of the year
Gold could be trading at $300 per ounce. It actually took only 26 minutes of trading on Tuesday until
the December contract traded there. Yowza!

The world has clearly changed because of the technological advancements and accompanying cost
barrier reductions. Millions of people can and have visited futures exchanges cyber visitor galleries via
the Internet. The huge spikes in the E-mini S&P on Fed announcements and government reports should
be a sign of the power of the global public's interest in our markets and a warning about the
inefficiency of the physical limitations of open outcry trading. If this kind of interest in the e-mini S&P
continually has this type of effect during key moments, how can un-enhanced open outcry trading
compete during similar surges in trading interest? I don't think it can.

Lets hope the Nymex/Comex can put aside traditional territorial political concerns and enhances their
open outcry trading before their follies turn into a trend and speed the end of open outcry trading in
the U.S. as we know it. I acknowledge the inevitability of the dominance of electronic trading, but am
hoping for a smooth transition rather than a disruptive one.

Regards,

John J. Lothian

Disclosure: Futures trading involves financial risk, lots of it!

Disclosure: John J. Lothian is the President of the Electronic Trading Division of The Price Futures
Group, Inc., an Introducing Broker. "

The poster has some very good points....and a vision where the future of trading is headed.....it is going into the cyber world because it HAS to...! way too much volume to handle by the "open outcry" method....
One thing I have been wondering about is how this lease scam will end....all the paper just can't be covered unless it is "settled" in paper.....if "24hr world trading" via the WWW (World Wide WAIT) there could not be a "settlement point" to demand delivery.... would you be so kind to share what you "see"....?
thx

Date: Sat Apr 18 1998 22:31
LIBERTY__A (Gold mining stocks and their golden path!) ID#263379:
Copyright � 1998 LIBERTY__A/Kitco Inc. All rights reserved


...As much as I would like to follow your specific recommendations of owning physical gold now, I cannot at this time for reasons stated below. Others that post here at KITCO are gold bugs of the western world belief ( as you labeled) that are staged, and ready for that big gold move as you have postulated. Unfortunately, most with gold mining stocks in possession that maintain a present day formidable loss that at some point will be regained.

Now, I'm sure a large majority here can relate to this position and question.

My plan is one that switches from my gold mining stocks ( before they burn ) to the physical, for a hold of a lifetime, as you have gracefully stated.

I acknowledge a possible LOCK in the physical gold market at, or about $1,000.

1 ) Sell 1/2 position of the mining stocks @ $650 and buy physical gold. ( coins or bars )
2 ) Sell the remaining 1/2 position @ $750 and complete the physical gold purchase.

This would assure a possible great % stock profit and more purchasing power to buy the physical. How do you envision gold availability at this level?

Mr. Another, can you be specific. Is this plan a viable one, and what caviats to you envison? Please advise this writer and your audience.

Best regards, and thank you.....



Date: Sun Apr 19 1998 00:08
ANOTHER (THOUGHTS!) ID#60253:
Copyright � 1998 ANOTHER/Kitco Inc. All rights reserved

Mr. Liberty_A,
Sir, the plan is good, the question is, "how good is your broker"? Noone can know how this world change will come about, in specifics. The gold market may lock at $400? Or $4,000! When the
public perception does come to understand, many entities I know of will not be buying "at the market" as your broker will. These ones, they will be "above the market", "well above the market"!
Will you bid $1,000 when your broker screen shows $475? I myself, as a country will be "there"! You sir, will stand well behind most in line.

I tell my children, as you may tell yours: "when a thousand hungry lions fight for one scrap of food, small dogs should hide with what's in their belly"

Thank You

I had to go to the Post office to pick up my coins that came via registered mail. While I was signing all the forms the Postmaster plunked down two boxes aprox. 6 inches long by 4 inches wide stating "these little suckers are heavy...what ya got in there gold bullion?".....if only he'd known.

Aldous Huxley was also a close friend of the infamous Timothy Leary. Opps, I guess that tells you how old I am.

Goldfly...how about a new song entitled "The Night They Drove The Gold Shorts Down". Just a suggestion

Just a short sweet story.

Recently my 84 yr. old father had successful, mutiple bypass surgery (it didn't go all that smoothly for about a year but he's doing much better and we still have him around to love and enjoy.)

Just prior to taking him to hospital, for scheduled surgery, he insisted that we empty the contents of his safety deposit box to find his one and only 1800's gold coin. The BAGS of coins were quite shocking to us as we remembered, from childhood, his occasionally bringing out his books of coin collection so carefully arranged and protected. He sold off most of his silver in the 70's and made a nice profit but continued to collect silver, unbeknownst to us, by throwing coins, any silver coin, in a bag, then bags, and then more bags (they are heavy). It took two of us to take the box out of its drawer after taking seve`;�:':--pGET /business/cpm/cpmforum/archives/3019999/default.html HTTP/1.0
Host: www.usagold.com
Accept: */*, q

Your last post to Skeptic was a great summary. Times are going to change very fast from here on out. Since we are entering a stage where inflation could be a very big issue I have a few questions about it.

In physics there is the concept of a half life for radioactive material. It is the time it takes for the radioactivite intensity of the material to decrease to one half of its original intensity.

In any inflationary environment the dollar would also have a half life for its value: the time it took for the dollar to be worth fifty cents.

Someone asked me if I could predict how fast the dollar would decay if the US did not devalue but monetized the debt? I thought about it and was clueless due to the fact that there are so many varibles like repatriazation.

Then I said to myself, there must be upper(faster) and lower(slower) bounds to the problem. Clearly on the slower side you could say its at about 7% inflation which would give a half life of about 10 years.

The difficultly for me is estimating the fastest half life. If the Fed kept pumping repos and buying treasuries and we had repatriaization at a super fast rate, what would be the fasted time it would take to get a 50% decrease in the dollar's buying power within the US? Could it happen in six months? It would seem that for us to experience rapid inflation in the US, those repatriated dollars would have to get into the US and actually be used purchase goods and competed with US dollars on mainstreet; and that take a bit of time. No?

Also, it the US dollar was devalued by fifty percent, how long would it take before the dollar dropped by 50% on main street?

Could you provide a bit of input here. I am not expecting a direct preciction. However, an orientation of how to look at the half life problem and the what the key variables are would be very helpful.

Angel

If memory serves, you wouldn't have to change much else for a great Gold celebration song. If I can find my Baez Albums tonight, I'll take a crack at it.

Where were you in the summer of '66? I believe that was the year that Leary did the "Turn on, "Tune in, "Drop out" seminar at the Fillmore East with incense, candles and as background music, the Massa Luba.

About song publishing, I have music and lyrics to a future fiction folk-song about Miners of all ores. It's also a 'treatment' for a potential screenplay, so I haven't gone public with it as yet. Interested?

Peter@peterasher.com

Hello. I would not buy from local coin shops unless the size of your purchase warrants. I would purchase pre-'33/34 European bullion coins and newly minted 1 OZ. Austrian Philharmonics. I would not buy US Eagles or gold coins denominated by any other country with strong ties to the US dollar. The European bullion coins will have some numismatic value because of dates/condition. Since the troy weight is approximately a 1/4 OZ. or less, they can also be used as the "money" they once were if necessary. The Austrian coins have the highest monetary value (2000 Schillings) about $US180 last time I looked and they are closely tied to the Euro block. Both products will be a store of wealth. The Philharmonics could be considered an "investment" if your diversification strategy permits. MK can sell you all you need.

Your many contributions are, right on!

I really enjoyed your last two posts here! Thank you.

Since I didn't have to wade through so much quantitative analysis that is difficult for me to understand (my education deficit disorder problem), I now have a better understanding of your overall perspective. Also, I now know that you are also a regular midwestern guy ala Spock (his last enagagement with the dilithium crystals) when he said to Kirk; "I have been and always will be your friend". Know what I mean Vern?

RE: Gloom and Doomy Forecasts

My wife has an Aunt I have known for about six years. Her Aunt recently spent a week with us. Sophia is a Greek immigrant who came to this country in 1953 with many other ethnic Greeks living in an area of Albania bordering Epiros (northern Greece).

During WWII, it was uncertain with the continental upheaval which way things would turn out for these people; would they be governed by Nazi's, Communist's or, the Royalist's? There were six villages in this particular area and for the most part, the people who lived there including Sophia and her family stayed put until they could be certain which side in the conflagration would win out above the others. In 1943, IN THE MIDDLE OF WWII, it became clear that a very bad man who they still discuss Hoxa (pronounced HOJA) was taking control of the country. He was a murderer and a communist. In 1943, Sophia's father, a Greek grocer in his Albanian village, moved alone to Greece and opened a restaurant; IN THE MIDDLE OF WWII! Later, Sophia and the rest of his family reunited (about three years or so) in Greece and they were lucky enough to share a two room bunkhouse with another family where they cooked on a camping stove for eight years. Sophia had a friend, Aristea who slept with her in the same bed for eight years. While Sophia's financial fortunes did not turn out as well as many others from Sopiki (one of the six villages), her brother for one came to this country in 1956 unable to speak a word of English, with no money, took a job as a waiter, and parlayed his hard work into a donut shop and now owns resort property in Florida; truly a self made man; not the Bill Gates variety. Aristea's husband has a similar story only his fortune was built upon real estate as well as hard work.

I am sure we can all tell a story like this. The point is, as Dean Acheson's father was fond of saying to his son, "buck up lad". Here in the US, win, lose or draw, we are the luckiest civilization in the history of the modern or ancient world. Even if worse comes to worse, we sure do have alot to fall back upon.

Hello - Leigh - you've made my day by looking over to the other Midas site - thanks for signing up and I'm not the only one giving Bill Murphy a lot of credit in expressing his views, without fear of repercussion to some of the big guns in your and anybody else's government. -
And that, on the other hand is part of my belief, that the dollarization, globalization, (blatant) manipulation et al of all and every market -the gold market in particular - will not just surrender peacefullly in a way, where a new regimen (sounder?) can take its place right away. No, I feel, like many others here (A,FOA, ORO et al) that the final battle in an ongoing war against the hegemony of the paperization of the world in terms of US currency is coming under attack- a world which is starting to become weary of debts being seviced by more debts, or IOU's and a world, which is and has been financing the bubble economy of the US for too long -fearing the collapse of the consumer of the last resort and, of course the paper debt it (Asia & EU) still hasn't reptriated.
EC and ECB's gold sale curb was a more than pleasant, though unexpectedly harsh (in wording) surprise at this, hinting on very grave disequilibriums - probably because of the lenient posture towards derivative trading in the US/UK banking community, spelling major upheavals akin to systemic risks in todays monetary (or better $-) system - finally identified as grandest scale scam casino.
This is not free trade, nor is it capitalism, no it isn't even casino capitalism - it is pure gambling - made possible by the worlds largest cash pools and banks leveraging the gamblers up to their hilts - and not caring a damn about their risk/reward ratio anymore, which their doomed shareholders will remind them in time. The licence to create (il-)legal tender IOU's, was never supposed to be the licence to use this swindle for their own benefit.
Since I'm getting carried away, I would like to conclude - If they have gotten away with this scam sofar, it will be pretty tough to fight them on their own turf - and it may take some time!
Still, goldhearts, our time has just begun and wer'e looking ahead to a prolonged bull market for gold - and I would like to add, while A/FOA's message is clear and understood, don't expect the opposition to surrender that easy.

Thank you CB2

Next week:
The horse with no name rises from the dead, after being shot last week and begins to check out! The other horses stand around for awhile from shock and amazement then begin to follow.

Next Month: From Goldspoon's bones.... Y2K fears are in the background as more imeadiate concerns grip the world.. the natural and manmade disasters increase in number and the time between each event grows ever shorter....Disease and illness also begin to play a role...The urge to Hoard becomes strong....
(Sell insurance company stocks as the come under increasing pressure).....as if the others wouldn't.....

I don't know how you wondered onto that subject, but the Huxley family is/was? one of the great intellectual families over the last 150 years. Sir Julian Huxley is famous for his great defense of Charles Darwin. I am very curious about Mondays action on the PM's. The stage seems to be set for a rise with inflation up and hedging down. But I am worried about Kaplan's bearish comments and statistics. The variable which could make the difference on the upsdide would be new buyer's which is almost impossible to predict and would counter act Kaplans stats. Over the longer term I am more bullish. Kaiser is real bullish. He thinks this is the $800 move. Sure hope he is right as I can then do my trading fome Bora, Bora. Peter, Aldous Huxley is famous for Brave New World - you and I and a few others are probably the only one's who ever read Door's of Perception ( I thought a very good treatise). lol

Regression analysis of all 39 Fidelity Select sectors
which collectively act as a proxy for the market, show:
Precious Metals (FDPMX) and Select Gold ( FSAGX)
to be in First and Second place on the 30 day regression table.
Also FDPMX is First on the 60 day table and FSAGX is Third.

My suggestion to all Gold Bears including S.J. Kaplan is
to do the math!

Elevator Guy: no offense taken! I'm in much the same position as you. For a variety of reasons, options trading has been "my thing" for the past year and a half. I do want to get some of the profits into less risky vehicles, so physical and/or stocks will get a fair hearing from me.

Koan, RossL, Peter Asher et al: The COMEX/broker tale keeps getting more interesting. The recent article posted here about NYMEX/COMEX being technologically backward helps explain a lot. But I get ahead of myself.

Got a call from my broker this PM, indicating a "preliminary
fill" on my market order to sell Feb 00 290 calls. ACCORDING TO COMEX I can't consider this a completed fill (ie, trade with the money) until it is confirmed. The broker said it is theoretically possible for the price to be adjusted, or the trade to be undone. They have not had it happen to their traders yet, but know of others who weren't so lucky. So, until I hear back (hopefully on Monday) it's in the bag...unless it isn't! These guys have done very well for me for the past year and a half, which is one reason I didn't consider on-line trading sooner. I find some of what they did in this interval suspect, but I'm not saying or doing anything about it until the profits from everything (still have June 00 290's) are really in hand!

FYI: I bought the calls in July at 2.8, & they were supposedly liquidated at 23. If I recall my math accurately, that's about 721%.

Best of luck to all, & hold on. This ride's just getting started!

Original lyrics to follow:
---
The Bank of England is my name, and I served my master's gain
Till Duisenberg's cavalry came and tore up the carry game
In September of '99, the shorts were hungry and on the line.
To the twenty first, the POG still fell, it's a ti-me I remember oh so well.

** Chorus
The Night They Drove the Gold Shorts Down, and all the phones were ringing,
The Night They Drove the Gold Shorts Down, and all the Forum was Cheering. They went La, La Yad-de-dah---- ETC.

**
Back with my wife in Tennessee, when one day she came to me.
Virgil, quick, come and see, There goes the P-O-G.
Now I don't have to be choppin' wood, and I don't care if the Fiat's no good.
Ya take what you need and you leave the rest, but they should ne-ver taken the ve-ry best.

**
Chorus
**
Like my father before me, I will work for Gold.
Like the Gold-hearts, who never sold.
Like Another, so proud and brave, will put the Yankee bankers in their grave.
I swear by the Mine beneath my feet, you can't ra-ise the dollar when it's in defeat!

**
Chorus

thanks to the incredible Internet, Robin was able to get the lyrics in minutes. Here they are.

:THE NIGHT THEY DROVE OLD DIXIE DOWN}
{st:The Band}

[C] [Am] Virgil [C/G]Caine is the name, and I serve[F]d on th[F/E]e
Danvill[Dm]e train,
[Am] 'Til Stoneman'[C/G]s Calvery came an[F]d tore up th[F/E]e
tracks[Dm] again.
[Am/E] In the winter o[F]f '65, We wer[C]e hungry, jus[Dm]t barely
alive.
[Am/E] By May the tenth[F], Richmond had fell, it's a ti[C]me I
[Dm]remember, oh s[D]o well,

{c:Chorus}
The [C/G]Night They Dr[Fmaj7]ove Old Dixie [C/G]Down, and the
[Fmaj7]bells were ringing,
The [C/G]Night They [Fmaj7]Drove Old Dixie [C/G]Down, and the
[Fmaj7]people were singin'. They went
[C/G]La, La, La, [Am]La, La, La, [Gsus4]La, La, La, La, La, La,
[F] La, La,

[Am] Back with my wife i[C]n Tennessee, Whe[F]n one day sh[F/E]e
called t[Dm]o me,
[Am] "Virgil[C], quick, come see[F], there goe[F/E]s Robert E[Dm].
Lee!"
[Am/E] Now I don't min[F]d choppin' wood, and [C]I don't care if
th[Dm]e money's no good.
[Am/E] Ya take what ya need and y[F]a leave the rest,
But the[C]y never should hav[Dm]e taken the ver[D]y best.
(Chorus)

[Am] Like my father [C]before me[F], I wil[F/E]l work th[Dm]e land,
[Am] Like my brothe[C]r above me[F], who took [F/E]a rebe[Dm]l
stand.
[Am/E] He was just eighteen[F], proud and brave,[C] But a Yankee
laid hi[Dm]m in his grave,
[Am/E] I swear by the mud [F]below my feet,
Yo[C]u can't raise a Caine bac[Dm]k up when he's in [D]defeat.
(Chorus and fade)

Peter, that's brilliant!!

I shopped around today and found that American Gold Eagles are still generally available. The price is a bit higher though, between $330 and $335 per ounce.

It appears that the preminum over spot has gone up by about $5. One of the larger coin dealers told me that as the spot price of gold recently increased, his sales of American Gold Eagles dropped off to almost nothing. That's what he said, and he still charged me the additional $5 premium. It does not make sense to me.

I sure do need gold to go to $30,000 per ounce. I hear Monday will be an exciting day for the gold markets. I will be only watching for a while.

Lafisrap

Dear CM,
History is all about fall back positions - we're the greatest already and we've got every shelter to fall back to if worse comes to worse, that is exactly what the Romans felt, while war was raging outside the "LIMES".

A modern equivalent is Drexel, Burnham's Michael Milken, who smartly derived that only 16 corporate (AAA+) rated +triple A bonds were left in the late seventies. He therefor deduced Junk bonds should overall have a better performance on average- He's been pretty right for some time - So have the "hedge" funds - FOR THE LAST TIME!

OK-I've got to vote tomorrow - Austria's gen'l elections - would be real tough, if there was an alternate .... for me ...
CB2

Thanks for the inspirational story.

The sub-heading from the cover of "True Comics" in the '40's

"Truth is stranger, and a thousand times more thrilling, then fiction."

I have always wondered to what extent silver may be manipulted by the users? If silver gets above $6.00 or if the comex stocks drop below 70,000,000 oz, I think anyone who may be manipulatiing it will lose control as it should directly go to $7.00. Gold is harder to figure because we don't realy know what the short positions are, or, once again, the potential demand. The world does seem to be buying big time - which was real evident when gold was around $250. Even the gold carry, foreward selling and shorts couldn't push it below that figure - too much demand at those prices. I think one of the reasons gold took off better than silver was more short covering on gold, but silver will catch up - $10 before $500. Last, silver now has the big guns in its corner, Bill Gates, Soros and Buffet - they now all have an interest in a rising silver price. The monastic trio.

I think there was an old John Coltrane album with Miles Davis, and Theloneous Monk or a woman, called the Monastic Trio -always liked the sound of it - three inspired muscians. Schippi, I hope you are right because I havn't taken much off the table, I am pretty much long - let your long positions run. Kaplan is just so persuasive.

Hi to all.
I really can't believe my ears these days . Too much optimism.. too much .... Like that had anything to do with the sudden rise in POG.
First of all the rally started over seas each time and was met with opposition only when it reached the shores of "the Land of the free" . Pardon my pessimism.
We have only, in our brighter outlook'seen others recognized that the patient is not dead afterall as we new all along. Kaplan even had the nerve to say we had a double top in the last few days and it was all over because of our optimisim. Irresponsible at best . Maybe suspect. He has ignored even what the main stream is beginning to recognize as a reality. I am starting to feel more like I did about him as I did when reading M. Armstrong. Just doesn't add up

This forum or any other is not responsible because of a little glee of emotion leaks out. These statements are meant to further someone elses gain. Not ours for sure.

Is the POG overvalued yet. I have not heard one statement that the price is to high. Just that it might go down anyway.We all have been thru a lot of that and short term ,in this market, anything can happen. What we are witnessing
is the Calvary HAS ARRIVED. This is what Another and FOA and ORO have alluded to . The titans have started at it and we at this point can participate carefully but we must recognize that until an agreement is worked out ( or may already have been started)this is war and anything goes.
Surely the bell has rung and we all here have a ring side seat . FOA AND Anothers is probably the safest(buy physical)
and for traders (much to gain and much to lose)many gyrations bring both profits and losses
We can all sit back and enjoy the show knowing that we are not alone . THE CALVARY HAS ARRIVED


ORO- enjoyed reading your re-cap of your posts .Great work.

Leigh -- Thank you!!

Angel, Goldfly.

I hope it was OK to answer Angel's suggestion (and inspiration) for those lyrics.

The Forum was engaged in *extremely active posting*, so I assumed that Angel had placed a *market* order, rather then one *limited* to Goldfly.

Peter, Thank you.

Also, don't forget that Leo Burnett started his agency in the middle of the great depression; people who knew him told Leo he was crazy and would end up selling apples on street corners.

In their lobbies (LB's) today in the Chicago Loop, they feature bowls of apples for their visitors with a greeting card to relate the history of the agency

Some months ago here someone made a comment concerning embedded chip architecture in plastics (resin) manufacturing plants. The concern was that the process would freeze up in some way and the tubes, pipes etc would become clogged with an intermediate substance that would permanently take those lines down....something like that. Chaos would follow.

I have a friend who is an attorney for Monsanto; they have basically the same concerns in many of their plants. Guess how they intend to respond? Monsanto will take their plants offline and fill the "lines" with water until they can sort things out. Yankee ingenuity!

Thank you for the advice Peter, I think that's a great idea regarding calling in the futures contract on the gold. I was wondering if it would be better for me to call it in just before expiration or sooner? I don't even know how to call it in..lol. Any help would be appreciated :-)
Thanks,
TW

Peter, that was Great ! I can't believe you wrote that so fast. Maybe Goldfly can work on something else.....Hmmmm lets see, something mellow. How about "The first Time Ever I Saw An Ounce" ala Roberta Flack.

Stopped in at my local coin dealer after grocery shopping to see if he had anything left. I pretty much cleaned him out on Wednesday. He had a few Philharmonics and some .10 oz Mapleleafs. I bought them all and told him to call me when he got more but he didn't think he would get anymore anytime soon. He said silver was his biggest mover but he wouldn't or couldn't elaborate.

Cavan Man...wonderful story. My father's family immigrated to the East coast from Turkey in 1910. They were Armenians escaping the persecution of the Turks. I remember hearing all the horror stories while growing up and thought everyone must have this kind of background. I also know that they brought GOLD with them and that enabled them to start a business.

now you've done it . gonna have that tune in our heads.
good job

Maybe goldfly will will write one and we'll enjoy that one also.

It would be best to call it in when your equity exceeds the margin requirement. It's just a request to your broker to excercise you option. Your account is debited with the strike price and credited with the furture's value at the time of execution. The differential is your margin acct. value.

Angel,

Ah, you must be a shrewd one; to your credit!

History remembers but "the West" does not; there was an Armenian holocaust of significant proportions during that period.

During the last week I watched the share price of Eldorado Gold go from $0.98 on Sept 20 to close at $1.30 on Oct 1. That is up about 33%, performing well because Eldo is said to be one of those producers whose share price is strongly tied to the spot price of gold.

However - this is what Eldo had to say in their 2Q financial rpt.

Hedging Programs
Eldorado unwound gold hedges to a value of $5 million in this quarter, and used the proceeds to pay down debt. The Company now has 510,000 ounces hedged, representing 100% of production for the next three years, at an average price of $297 per ounce. The hedged ounces are all in instruments that enable them to be rolled over, should spot prices exceed the strike price. The Company conducts an active currency hedging program for Brazilian currency (Real). At present, all real denominated operating costs are fully hedged for 6 months, and the Company has the capacity to extend this for a further 6 months if appropriate.

So...they have the next 3 yrs production hedged at $297/oz, but can roll those hedges over if spot gets too high.

My question is that if the hedges are rolled over, aren't they rolled over using the current higher lease rates? So that if you roll them over, it might not benefit that much, if at all. And therefore Eldo may not benefit from the higher gold prices, and following Another/FOA's postings, may even be hurt by them.

But here is an interesting point - Eldo is 39% owned by....Gold Fields Limited.

Peter, can you imagine? Start a new business in the middle of WWII! When I remarked upon that feat, Sopia said; "When you have a family you do what you have to do."

Of genuine concern to all I think is the fact that many Americans have never had to, "do what they have to do". or, at least they forget.

oops! Make that $0.98 on Sept 24

Shrewd? Yes I have been called that before. Guess it is in the genes. I am extremely proud of my heritage. Everyone tried to take a piece of the Armenians but they still kept coming back. There aren't too many of us left.

Genes don't lie. Believe it! CM

Where is our kindred spirit FOA tonight?

I'd can Kaplan. Wisdom and knowledge he has but, he trades his book same as the rest. I've thrown in my lot with Another/FOA/ORO et al. I have a real good feeling about those guys.

I forgot to mention Mike Kosares. His analysis is the best!
We're lucky he hangs around with us. He could be working for one of the networks you know.

Testing.

Is there anyone here that went thru confiscation, in the 30's? or anywhere? I would like to hear what can be said from first hand experience. It would be useful to us all.

An issue is at hand, if gold DOES get to anything like $30,000 then it is POSSIBLE that many who do not hold gold in gov't and in society as a whole is likely to be jealous and it would be politically correct to make an issue of ownership.

The POG has received numerous bonuses in the last 12 days.

The 15 member EU consortium placed a cap on gold sales, there is no 'sudden' supply to flood the market. Demand will and does exceed supply even moreso. I am buying physical Monday and if I am buying physical there must be a fierce demand for I have to be thoroughly convinced. I am not saying that I am correct, I am saying that I am ultra conservative and I see no data indicating gold's retreat.

Oil has doubled, this must lead to inflation. One can analyse until blue in the face, but oil and its refined byproducts affect the price of everything ie: shipping a bag of milk to the grocery store; taking a cab; a courier.
Oil's price has filtered to the individual.

The dollar drop vs the yen. Higher import costs will impact
cost of living. A 20% increase in yen increases everything purchased from Japan.

Gold has been at a bottom for many years, this does not guarantee upswing but it does provide confidence of one.

Supply and demand, ultimately, dictates cost/price. Forget, for a moment, the collusion debate, the BOE auction, the FED, the paper chase, etc. There IS unbelievable demand for gold, the world is nervous, the markets and the financial players are beyond anxious, the volatility is absurd and investors are perplexed. We are well inside 100 days to year 2000 and most of us KNOW turmoil is to set. No need to discuss Y2K, the company I work for will miss Y2K targets by 10%. Time, money and resources have and will dictate the outcome, not Y2K itself. I fear 10% of other companies will miss targets by 10% and this is the essence of why Y2K will be what it will be.

There have been several posts today indicating the decay of paper gold. This is the FOA/Another theory manifesting. Ask
yourself if there is going to be a turnaround. The answer is you can't UNSCRAMBLE A SCRAMBLED EGG.

Cavan Man (10/2/99; 14:00:24MDT - Msg ID:15208):
"I would not buy US Eagles or gold coins denominated by any other country with strong ties to the US dollar."

Why is this? Is not bullion bullion? When it comes time to sell/trade, would not bullion be bullion, regardless of the particular geopolitical issue?

THX- Mounties..... Unless your afraid of the POG crashing again, they're really not that big of a deal. About a year ago, when the POG was still up there (or that is, almost up here), I bought a number of them. I was able to laugh all through this year knowing I had time. But now it's only going to buy you a couple of months. Unless you're buying a good quantity, I wouldn't worry about it. Except of course if you just want something different....

Goldspoon- The Bone Report? Hmmmmm.... It's got potential. Should Townie start getting his resume out?

Peter- You extracted much more out of that song than I could have. (Never got into The Band.)

Angel- It seems a number of postal employees are too nosy for their own good. Once when we got a PM delivery, they kept asking my wife "Is this somebody?" (OK, get this- they thought that it was someone's cremated remains) and "What's in there?" It seems the postman was really shook up that it might be an urn with ashes... (I don't know, I'm suspicious, but I wasn't there to gauge him...) I told her next time to just say that's what it is or that it's computer or car parts.

Roberta Flak? Ewwww.... that's not my speed either. Tell you what, I've got a half-baked project that I should finish to keep it timely anyway. Something worthy of Nashville. I'll try and crank it out.

Cavan Man- I think FOA is incommunicado. From past experience, something like "I'll get back when I can" could be awhile.

Aristotle, Aragorn III, Gandalf, Stranger- What are you guys doing? Did you make a foursome and go off to a 5000 hole golf course? Or are you spending the days in the backroom, counting out your chests of gold?

Regards all,

GF

www.kitco.comgood work Dabchick:

Date: Sat Oct 02 1999 10:13
Dabchick (Valuing gold independent of fiat currencies) ID#258195:
Copyright � 1999 Dabchick/Kitco Inc. All rights reserved
Here are the Dabchick Gold Index figures for the past week ( calculated from the London Bullion Market figures published in the F.T. ) . All figures refer to the London close.
These figures are intended to show changes in the True Value of Gold relative to its value in January 1982. Because these values are independent of debased fiat paper currencies, they are also independent of the inflation caused to all other prices by governments that indulge in fiat currency debasement.
Date... | Close | . High. | .. Low .. |
27 Sep | 65.12 | 66.10 | 65.08 |
28 Sep | 69.91 | 70.90 | 65.83 |
29 Sep | 69.98 | 75.07 | 68.48 |
30 Sep | 69.46 | 70.84 | 68.76 |
01 Oct | 70.37 | 70.48 | 68.76 |
( Basis : Jan 1982 = 100 ) .
The dramatic up-move in the index this week is more pronounced ( by far ) than any I've seen in my records of the last 18 years. Its significance ( IMHO ) should not be under-estimated. Its rapidity and size probably signals the end of the long bear market, particularly as it was launched from the last 20-year low at 59.46 only one week previously ( on 17th Sept ) .
Furthermore, Friday's close at 70.37 took the index above the 22-month congestion area between 68-70. Although some resistance was evident at the 70 level on Tues, Weds, Thurs this week, there was only slight loss of momentum. The 70 level could now turn out to be another launch-pad. Let's hope so.
Regards.............Dabchick

Agreed. I believe their logic is the pre-1933 confiscation for one, but new philharmonics over Eagles, I am not sure the logic. I know the reporting requirements for Eagles are less because they are US currency, whereas philharmonics would have reporting requirement if over a certain value. Obviously that could be a big deal to some.

Perhaps they will explain.

Thankyou !

I never heard of "The Band" They came up on the lyric search.

I know the song as sung by my most revered singer on earth, Joan Baez. She has the ability to take a concept that you may not believe in, and put the emotion of the belief into her song so that you feel the feeling of believing it, and then therefore believe.

http://www.ccrkba.org/1999Emersoncase2amend.htmlThe above link is the latest and most significant 2nd ammendment case as it was in 1999 and it breaks the oldest hold on the 2nd ammendment by the Federal Courts that used to say she was a state right and not an individual right; not anymore. This is a most interesting read. This may change things in a case-law system that has hitherto been against individual rights.

snippet:

By January of 1788, Delaware, Pennsylvania, New Jersey, Georgia and Connecticut ratified the Constitution without insisting upon amendments. Several specific amendments were proposed, but were not adopted at the time the Constitution was ratified. The Pennsylvania convention, for example, debated fifteen amendments, one of which concerned the right of the people to be armed, another with the militia. The amendment on the right to bear arms read:

That the people have a right to bear arms for the defence of themselves and their own State, or the United States, or for the purpose of killing game; and no law shall be passed for disarming the people or any of them, unless for crimes committed, or real danger of public injury from individuals; and as standing armies in time of peace are dangerous to liberty, they ought not to be kept up; and that the military shall be kept under strict subordination to and be governed by the civil power.

MALCOLM, supra at 158 (citing PENNSYLVANIA AND THE FEDERAL CONSTITUTION, 1787-1788, at 422).


The Massachusetts convention also ratified the Constitution with an attached list of proposed amendments. Id. In the end, the ratification convention was so evenly divided between those for and against the Constitution that the federalists agreed to amendments to assure ratification. Id. Samuel Adams proposed that the Constitution

[B]e never construed to authorize Congress to infringe the just liberty of the press, or the rights of conscience; or to prevent the people of the United States, who are peaceable citizens, from keeping their own arms; or to raise standing armies, unless when necessary for the defence of the United States, or of some one or more of them; or to prevent the people from petitioning, in a peaceable and orderly manner, the federal legislature, for a redress of their grievances: or to subject the people to unreasonable searches and seizures.

snippet 2:

Structural Analysis

The structure of the Second Amendment within the Bill of Rights proves that the right to bear arms is an individual right, rather than a collective one. The collective rights� idea that the Second Amendment can only be viewed in terms of state or federal power "ignores the implication that might be drawn from the Second, Ninth, and Tenth Amendments: the citizenry itself can be viewed as an important third component of republican governance as far as it stands ready to defend republican liberty against the depredations of the other two structures, however futile that might appear as a practical matter." Sanford Levinson, The Embarrassing Second Amendment, 99 YALE L.J. 637, 651 (1989).

Third snippet:

This Court has not had recent occasion to consider the nature of the substantive right safeguarded by the Second Amendment. [see footnote 2] If, however, the Second Amendment is read to confer a personal right to "keep and bear arms," a colorable argument exists that the Federal Government's regulatory scheme, at least as it pertains to the purely intrastate sale or possession of firearms, runs afoul of that Amendment's protections. [see footnote 3]

Final snippet:

[comment: and here comes the best part. Don't you love it?]

Some scholars have argued that even if the original intent of the Second Amendment was to provide an individual right to bear arms, modern-day prudential concerns about social costs outweigh such original intent and should govern current review of the amendment. However, there is a problem with such reasoning. If one accepts the plausibility of any of the arguments on behalf of a strong reading of the Second Amendment, but, nevertheless, rejects them in the name of social prudence and the present-day consequences of an individual right to bear arms, why do we not apply such consequentialist criteria to each and every part of the Bill of Rights? Levinson, supra at 658.

As Professor Ronald Dworkin has argued, what it means to take rights seriously is that one will honor them even when there is significant social cost in doing so. Protecting freedom of speech, the rights of criminal defendants, or any other part of the Bill of Rights has significant costs�criminals going free, oppressed groups having to hear viciously racist speech and so on�consequences which we take for granted in defending the Bill of Rights. This mind-set changes, however, when the Second Amendment is concerned. "Cost-benefit" analysis, rightly or wrongly, has become viewed as a "conservative" weapon to attack liberal rights. Yet the tables are strikingly turned when the Second Amendment comes into play. Here "conservatives" argue in effect that social costs are irrelevant and "liberals" argue for a notion of the "living Constitution" and "changed circumstances" that would have the practical consequence of erasing the Second Amendment from the Constitution. Levinson, supra at 657-58.

Other commentators, including Justice Scalia, have argued that even if there would be "few tears shed if and when the Second Amendment is held to guarantee nothing more than the state National Guard, this would simply show that the Founders were right when they feared that some future generation might wish to abandon liberties that they considered essential, and so sought to protect those liberties in a Bill of Rights. We may tolerate the abridgement of property rights and the elimination of a right to bear arms; but we should not pretend that these are not reductions of rights."

Just a quick refresher on the pros and cons of exercising your gold call options that are now in the money.

Basic principles
1. Managing time value is one of the keys to options trading.
2. Determining the proper strike is one of the keys to options trading.
3. Deep in the money options lose their time value.
4. Exercising options erases the time value.

For example, lets say that spot is 310 on Monday. A June 2000 call at the strike price of 280 is deep in the money. Lets say I predict a continuing bull market in gold and I think gold will hit 350 by January and 400 by May.

Determinations
1. I need to calculate my return, based on my predictions, of holding the option until May.
2. I need to calculate the current time value and intrinsic value of the option.
3. I need to calculate my return, based on my predictions, of exercising that call for one futures contract.
4. I need to calculate my return, based on my predictions, of selling that call and buying several out-of-the-money June 400 calls. The price of June 400 calls is pure time value and no intrinsic value.
5. I need to consider the lack of customer service that now exists at the COMEX.

Generally, options will be better off sold than exercised unless they are due to expire within the week.

My opinion is that I would be better off selling the call right now and buying as many June 350's or 400's that I can with the proceeds.
Check out some of these scenarios before you exercise that call! Leverage is able and waiting!

Feel free to critique this analysis or add to it.

The issue on the floor today was the current problem in the Comex option pit involving "Premium rape" There is no binding valuation constraint, and there have been some absurd sale prices far below the intrinsic value of the option contract.

Also, when the future spikes briefly on a blowoff the in the money option may not keep pace. When silver spiked to 5.95 the Nov. 5.50 only traded as high as .40, for one tick.

The exercise manuever is a way to sell into a more liquid market.

My thanks to Ross and Peter for their time and suggestions as to the options. Considering the state of the comex right now and more than 3 months left on the option i will elect to wait it out a bit and not be at the mercy of the floor brokers. I too think this bull has young legs under it and more suprises may be in store in the near future.
Best of everything to you both and thanks again.
TW

As long as we are on this subject I will show you a cool trick regarding stock options: For a real example take Pan American Silver (10% just purchased by Bill Gates): All in Canadian: Stock is about $11. wts about 3.30-45 - 1 for1. with a strike price of 9 dollars (2 bucks in the money) - wts are good until feb 2001. Lets say you bought 1000 shares. It would cost you $11,000, but the wts would only cost you $3,450. If the stock goes up the wts should track the stock 1 for 1 with 3.5 leverage. But lets say the stock drops to $7. If you bought the stock you would now be $4,000 in the hole, BUT and this is a big but (pun intended) the wts would probably only drop to around 1.50 ot 1.75 because they would retain time value and leverage value. In essence a free lunch. Leverage on the upside and reduced loss on the downside. Pretty cool huh?

Peter, I agree with you that fast moving markets will also have to be taken into consideration. Another general principle would should be added:
If your time horizion is timing the markets to the minute, then you should be trading futures instead of options.

A quick refresher on the pros and cons of exercising your gold call options that are now in the money.

Basic principles
1. Managing time value is one of the keys to options trading.
2. Determining the proper strike is one of the keys to options trading.
3. Deep in the money options lose their time value.
4. Exercising options erases the time value.
5, If your time horizion is timing the markets to the minute, then you should be trading futures instead of options. An exercised option converts to a future at the open of the next trading day. Your best sale price may be had by shorting a future at today's peak price and giving your broker instructions to exercise the option during the same day.

For example, lets say that spot is 310 on Monday. A June 2000 call at the strike price of 280 is deep in the money. Lets say I predict a continuing bull market in gold and I think gold will hit 350 by January and 400 by May.

Determinations
1. I need to calculate my return, based on my predictions, of holding the option until May.
2. I need to calculate the current time value and intrinsic value of the option.
3. I need to calculate my return, based on my predictions, of exercising that call for one futures contract.
4. I need to calculate my return, based on my predictions, of selling that call and buying several out-of-the-money June 400 calls. The price of June 400 calls is pure time value and no intrinsic value.
5. I need to consider the lack of customer service that now exists at the COMEX.

Generally, options will be better off sold than exercised unless they are due to expire within the week.

My opinion is that I would be better off selling the call right now and buying as many June 350's or 400's that I can with the proceeds.
Check out some of these scenarios before you exercise that call! Leverage is able and waiting!

Feel free to critique this analysis or add to it.

P.S. The future you short MUST be the sane month as your call option!

Hopefully you know the tune to Guns and Roses "Sweet Child of Mine"

"Sweet gold of mine"

Its got a shine, that it seems to me,
Gives us a chance at prosperity,
And by the grace of God,
We'll enter a bright new day.

Now and then, when I'm feeling down,
I'll take out my stash, of golden crowns,
And with the gains they've seen,
It really blows me away.

Chorus: Whoa, whoa, whoa, Sweet gold of mine,
Whoa, whoa, whoa, Sweet gold of mine

They're serving bear steaks on the trading floor,
While Goldamn Sachs, makes for the door,
And the rapist shorts,
They got no where to hide.

Change will come, to our economy,
When only real gold, is good currency,
'Cause without Europes' banks,
The dollar's on a downhill slide.

Chorus: Whoa Whoa Whoa, Sweet gold of mine,
Whoa Whoa Whoa, Sweet gold of mine.


Another good candidate for revised lyrics would be Collective Soul's "Shine" Someone wanna take a stab at it?

The future you sell must be the one that your option CALLS.

Confusion comes from the fact that in-between months on options are the right to buy the next months future, but expire a month earlier. This confusion is further compounded by the option carring the same monthly designation as its callable future, expires the month before.

Example:: A Dec 300 gives you the right to buy the Dec future for $300, but only till the second Friday in NOVEMBER . The Nov 300 (In-between month) Gives you the right to buy that same Dec future, but only till the second Friday in OCTOBER.

Dear Granny: If you're worried about your Gold Eagles arriving in a timely manner, perhaps you could call your dealer and ask him to substitute another coin, like Maple Leafs or something. It would be better than getting stuck with nothing if the market goes down!

I'm not going to post much today because I'm sick, but I was lying in bed thinking about your Eagles and wanted to let you know that you can do this. That's what I'd do anyway.

SteveH,

Thanx for the link to the Emerson case. Do you know if this was appealed to the Circuit Court of Appeals? I've devoted some of my spare time to developing an argument which would protect Canadians' right to own firearms, based on pre-Confederation and other statutes. At present, most of the provinces are taking part in an proceeding to strike down the federal government's new gun registration system, but I doubt they're invoking the arguments I would use, and given the biases' of the extreme liberal-leftist Supreme Court of Canada, the provinces will lose. (Being a government employee, I won't have the chance to make these arguments unless I go back into private practice). I used to be a rah-rah Canadian patriot, but I'm so demoralized by the actions of the SCC and the various governments that I would emigrate to the US if I were just a touch younger (could have trouble getting in now). The US has many of the same problems, but at least one can cut out and protect a private space for oneself in the US.

www.prudentbear.comIn Friday's commentary, Mr. Tice speaks of the growing independence of the ECB vis a vis their gold pronouncement and, the likelihood of an increase in interest rates there.

Canuck, said in #15243: "...the company I work for will miss Y2K targets by 10%. Time, money and resources have and will dictate the outcome, not Y2K itself. I fear 10% of other companies will miss targets by 10% and this is the essence of why Y2K will be what it will be."

I agree with the statement above. In fact, they will be lucky of they only miss the deadline by 10%. I used to work in testing of large engineering systems. When we got to what looked like the last %10 percent on a project, only the old timers know that we were nowhere's near the last 10%.

What happens is that there is a transistion near the end of projects that go from many isolated subsytems (that are being built) to the joining of these subsytems into a large system whose parts must work in harmony. Most of the employees are involved in the subsystem building and they indeed are at the 90% completion stage. Each subsystem manager sees only 10% left in his subsystem budget. They are the ones the set in the idea the the overall project has only 10% to go.

Then the days of full system testing start and this is time of the wildcard. All sorts of things go wrong a this stage and it is not until the full up system is turned on and tested that you have any idea of how far along you entire system is.

This "all up" full system testing is just beginning in many companies. They are just now getting a handle on where they stand. They are finding out that they are way behind.

For many, tracking Y2k progress has become a bit of a bore. However, now is the time when all the important data is coming on line. Get re-involved. Read the data. They are finding that the most frequent form of errors are numerical errors that are transfered from one subsytem to another that won't cause a shut down but will cause an infection. If too many of these numerical infections spread there will be no way to stop the spread of the infections.

Get re-involved. Read the data. You have your own castle to watch over so get on watch. Don't look back on these days and let it be said your castle went down on your watch.

We are entering an era we will never forget.

Get your gold while you can but recognize that gold is not enough. Get prepared.

I has been said, by those in programming, that 90% of large programming projects are 90% completed for about 90% of the time during which they exist.

Here's the first paragraph of a very interesting article by a friend of mine -- Terry Cottam, a Y2K activist in Canada. I can post the whole article if you all would like (do not want to spam the board with Y2K stuff). Terry is a tad hysterical, but only a small tad; the risks are very real; this article is nicely documented......

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

Date: Thu, 23 Sep 1999 11:34:09 -0400
From: Terry Cottam
Subject: Oil Disruptions May Crash Markets In January 2000

OIL DISRUPTIONS MAY CRASH MARKETS IN JANUARY 2000
-------------------------------------------------

By Terry Cottam, Ottawa, Canada, 23 Sep 1999

Revised, expanded from an article for Peace and Environment News,
Oct 1999

IN THIS ARTICLE:
-- Markets could crash
-- Long-term food shortages likely
-- The "Lucy factor"
-- Authorities fight efforts to prepare
-- What's Next?

OIL IS OFTEN OVERLOOKED in all the seemingly good news lately on Y2K.
The International Energy Agency (IEA) warns "vulnerabilities still exist
at all levels of the oil supply chain." [1] A survey by Gartner Group
revealed U.S. companies have "not been providing accurate disclosures"
on their Y2K risks. The IEA says this could have "serious implications"
for oil supplies. [2] Another oil industry observer expects "multiple
embedded systems going down on each oil well" with no parts or
replacement systems available "for quite a long while." [3]

........

Tomcat,

We're in full agreement. The potential for an economic slowdown and related social problems have a fairly high probability IMHO. You and I had the discussion here several months ago regarding manufacturing systems, JIT, SPD, interconnectivity, etc. In the one of the major manufacturing businesses that are left in the US, last month's review on Y2K remediation at just one manufacturing plant gave me cause for concern. The report went something like this: "...381 programmable controllers replaced, 217 programs fixed, and 244 tools/machines with known problems that will not be corrected due to time, money, resources,etc. The date codes in these programs will be rolled back to a January 1999 date in December 1999, and we'll fix the problems in 2000. Still have xxx hundred machines to verify for compliance, which will be done by 9/30/99." This is only ONE component plant of dozens that supply many larger plants at only one manufacturer. These plants in turn deal with thousands of suppliers. If there's only 1% failure in the last 10%, there will be problems. I know the possible effect of this is hard to grasp if one doesn't work in a business sector or industry that is so reliant on interconnectivity and good data. As some naysayers have suggested, you might be able to go back to manual methods in some areas, but this would have the same effect as ******* in the wind. The time lost in material and cash flow alone in these tight systems will quickly cause the related economic slowdown. Then as sales slow, so does employment, and the cycle becomes self-fulfilling. We need to fix the problems, not go back to the pre-industrial days. To the manufacturer's credit, at one of dozens of plants, they will try a full plant date roll-forward sometime before the end of this year to see how the remediation to-date will work. They're working to prepare for the worst, and now hope for the best.

Tomcat said it well, "Get your gold while you can but recognize that gold is not enough. Get prepared."

Hey guys, how's it goin? TC - excellent piece! You're right, with all the gold excitement, etc., nobody is paying much attention to that big bear sneaking up behind them. More and more candid responses to readiness are making the news but they're being downplayed or reported on page D34. I heard the the Feds are going to try to improve readiness amongst the populace starting this month as they've been accused of downplaying the situation to the point of complacency. Apathy reigns. Maybe knocking a few thousand off the Dow would get people's attention, eh? Probably only wishful thinking on my part!

Turbo - thanks for that bit about the National ID card. Good to see that at least some can see the freedom and liberty ramifications from that bit of bs. Now if we could just find some more reps like Ron Paul. At least we won't be stuck with a national id when we want to exchange our gold for Euros, eh?

AEL - hey buddy, this is posted from the Linux platform. You gotta get it to believe it! I'm working on loading the Linux version of PGP today. I can pull up USAGold forum in about 2.5 seconds as I no longer use a browser such as Netscape because the desktop of KDE (the GUI interface) is a browser. The platform treats http files just like any other file and can be iconed to the desktop just like any other program or file. Pretty cool and very fast!

Options traders - good luck you guys, I think you'll need it. I've been trading futures and options for a long time and as of the first of this year I stopped trading altogether. The reason for my pullback from these markets is liquidity. Last fall when everybody was loading up on the Dec 390 calls my broker buddy in Chicago called and we talked about the situation for a couple of hours. He is one of the principle's in a very large trading firm there. We have talked several times since. He says and I quote, 'People don't understand how thin some of these options markets are'. In other words, just because you have bought a put or call DOESN'T mean the guy on the other side of the trade has any money! Believe it! The only way you can get paid is if the markets trade within their normal volatility because that is how the options are priced initially. Once markets move outside this average window of volatility to any great degree, the market will cease to trade as some have found out this week. You have to remember, brokerage houses are going to try to protect their big clients (read - option writers (of course, this is where all the money has always been made in this racket)), before they try to help the little traders (read - you guys). Imagine this scenario - market moves against big trader big time, broker gets call, 'Hey Bob, I need a few days to cover that position, can you help me out?' 'Sure Ed, but I can't put the firm at risk, so instead of loaning you your margin maybe we can slow down the execution for a few days and hope that the Fed can intervene enough to slow down the move.' Now, you have to believe that this is exactly what is happening as traders and clearinghouses search for any liquidity they can find to keep from going belly up and closing the markets. If the clearinghouses can't or won't cover these trades the markets will not open the following morning. Believe it! In my opinion the greatest risk today is not the trade itself but the clearing of the trade. Remember, your profit is only someone elses loss if he has the money or can borrow it from someone else.

This trading game is getting more like y2k everyday. This following bit of wisdom from an unknown author is appropriate, 'It's not the odds, it's the stakes'.

ET

Dear AEL: Would you mind either posting the whole article or printing a link for it? I'd like to read it. Thank you.

This is a July 1999 ruling and as such stands (for now). I would doubt an Appelate Court would rule against it or that the state would move it up the ladder as based on my reading, it was extremely well written with very sound logic. The state would take a chance of it holding precedence to a much wider range of cases or it possibly being picked up by the Supreme Court and I believe that they wouldn't risk that. My opinion.

ET (10/3/99; 9:42:39MDT - Msg ID:15266):
"I can pull up USAGold forum in about 2.5 seconds as I
no longer use a browser such as Netscape"

???

I had understood this to be a bandwidth deal, not a matter of which (or whether) browser. The 50K or 100K (or whatever) worth of gold forum text comes thru the line at whatever speed it comes thru (28k, 56k, or DSL-speed, or T1-speed, or whatever); the browser cannot slow things down appreciably, I dont think (?). Explain.

Hey AEL - you want me to explain it? Beats me! If I load the Netscape browser and attempt to load the forum it takes about 3 seconds. Now just testing from the desktop it took 2 seconds. Could be some overhead involved or different cache sizes, I'm not familiar enough with the system to know but maybe after a few weeks of learning how it functions I can tell you. The difference is insignificant at any rate.

After having spent a number of hours over the last week playing with this thing I can see that in the future this might give Microsoft a run for their money even at the single user level. It's not quite there yet unless you have some background with these things and it lacks the application base that Windows has. It hasn't quit on me however and it's been up and running since last weekend. I've had problems with Windows dropping ISP connections and locking up requiring reboot (of course this always seemed to happen right before I hit the 'Post Message' button). It has some rough edges yet but from a stability standpoint seems to be quite excellent. I've reviewed the list of applications that come with this version and from a cost/benefit basis it can't be beat. Fifty bucks buys an enormous amount of built-in's including two complete office setups, several development languages, graphics, games, multimedia, network/internet, and a host of nifty utility packages. Online documentation is adequate but I went ahead and bought the Que book ($40) anyway.

Maybe we can get old Tomcat to test it for us and give us a real insiders view, eh? Thanks for the response.

ET

On Thursday, my commodity broker said that only market orders were allowed in the Gold options pit...no limit orders. I scaned my 38 years of commodity trading experience to try to remember a similar occurance, but I could not. I thought "These guys must be desperate." Then I looked at the numbers. As of Thursdays close, there were about 525,000 Gold calls outstanding. The floor traders or locals are the people who usually wright or sell us options. They have been getting our money for the last three years. As of September 21st, the committment of traders report said that the large traders were long only about 25,000 contracts. That means that the locals could be naked short over 400,000 calls. With an open interest of just over 200,000, where are they going to find the liquidity to get hedged. If Gold were to go up to $400 per ounce, their loss could be upwards of $4 billion. That could be enough to bring down the exchange.

I've had the idea for a long time that if Gold was ever freed, it would go straight to about $475 without a decent thechnical correction. It now looks to me like it will be there before the end of this month.

It's pay back time, but i'm not going to stay for the last tick. It may be that if the exchange closes, I may get nothing.

I did not mean to offend any of you with regards to your feelings on Y2k. I am very prepared myself. I even bought some KI just in case. Need H2O filter and porto-potty and a little more food then I am done.

Sorry to all.....CM

Hey Ray - 38 years! How many times have you made a fortune and lost a fortune?

It seems to me the Comex is already bankrupt. They can't cover these positions and they know it. The floor traders have had it and if I'm not mistaken the only backup they have is the exchange itself. I suppose they'll have to get in the ever-increasing-in-length line at the Fed for their bailout. It makes you wonder if they'll be able to find a chair of their own when the music stops. I think what people forget is the fact that gold isn't just 'any' commodity. It is real money and when the world starts demanding real money an exchange such as this will never have the liquidity to keep the market stable (or even open for that matter).

- got liquidity?

ET

Hey CM - offense? What offense?

Like Tomcat has said, the big test is yet to come! Only one test matters and that is the one at the end of the year when it all tries to work together. Only then will one know if he made the right call, eh? Just like this gold thing, when everybody knows what to do, it's too late to do anything! We're all speculators at this point, some seem to be a bit more conservative than others. Who was it that said, 'Time will prove all things!'?

ET

Tomcat - Well said. Having consulted with a number of software/high-tech firms, projects generally are on time until 90% of the budgeted time has elapsed. Then, if the project isn't cancelled, it's rushed to "completion" in order to minimize the number of months the project will slip. All sorts of corner cutting is promoted, particularly in testing, and the product is put into production/shipped to the customer. Then, the phone starts ringing off the hook as users scream bloody murder that the stuff doesn't work. This causes huge amounts of fire fighting resources to be chaotically flung upon the mess. This is called in Y2k terms, "Fix on Failure". Good luck with this strategy in a globally interconnected system of systems that nobody understands or could ever hope to. I think there's two questions we should be asking ourselves -- in this order. Prepared for Y2k? Got gold, too? Best, DD

OK, let's liven things up a little bit here. Let's write songs! I'll start:

GOLDBUGS' GLOAT TO OUR STOCKHOLDING FRIENDS

If you miss the train we're on,
You will know the gold's all gone.
Lord, it's 500 now and to the moon!
To the moon, to the moon, to the moon, to the moon,
Lord, it's 500 now and to the moon!

Not a shirt on your back,
Not a penny to your name.
Lord, you don't have a home left, anyway,
Anyway, anyway, anyway, anyway,
Lord, you don't have a home left, anyway.

Would anyone care to add lyrics, or write new songs? Angel, would you like to judge our feeble little efforts? No prize or anything, just a break from boredom.

I must confess to being the "Agent Provocateur" to Leigh's decision to be the leader of the Forum Glee Club. I wrote this for a post last night, and then chickened out and sent it just to Leigh and Angel. ----Personally, I could use some distraction between now and tomorrow's Comex opening

Today, inspired by our new member, Angel, we bring you the first unauthorized broadcast of the Forum "New Gold Oprey"

First to the tune and following lyrics of Baez's "Copper Kettle"

Get you a cooper kettle, get you a copper coil.
Cover with new made corn mash, and never more you'll toil.

(Chorus)
You'll just lay there by the juniper, while the moon is bright,
Watch them jugs a filling, in the pale moonlight.

My daddy he made whisky, my granddaddy did too,
We ain't paid no whisky tax since seventeen ninety-two.
*****
We have the Commodities E-trader theme song ----

Get you a copper future, get you a future in oil.
Cover your short sale corn cash, and never more you'll toil.

Chorus:
You'll just stay there by the computer, trading through the night.
Watch those orders filling, though bid and asked are tight.

My daddy he traded risky, my granddaddy did too.
I've been taking profits, since nineteen ninety-two.

Chorus ---

Then we have, to a tune and words you will all remember,
The "Short Seller's Lament.

Oh, I missed the trend we're on, didn't know the Gold's all gone.
You could hear me screaming loud, "Five hundred dollars?"

(Chorus)
Five hundred dollars! Five hundred dollars! Spot Gold's got me by the collar.
You could hear me screaming load, "Five Hundred dollars?

(Then the second stanza works as written!!!)
Not a shirt on my back, not a penny to my name.
Lord, I can't a'go on living this a'way. ------

This is first of many "tumor rumors" (COMEX is terminally ill)....there will be more too..! as to the health of the COMEX....they are bent in a pretty bad way about now,but they won't go busted....they can't go busted right now, the FED needs them....if the US loses their "gold market",then where is gold going to be traded in the world....and what "influence" could the FED have on the POG...? they have their "ways" of healing theirselves.....GS could "dump" all their gold they have been accumilating,nice profit to boot....the floor could increase volitility to the upside first to get all the boys standing around the water cooler to buy the hottest thing going (gold calls)....then "beat the living daylight" out of the metal markets......and increase the margin due to extreme volitility.....this would give the floor a great chance to get on the right side of the market...eh?
The game being played at the COMEX is a zero sum game....for every $ "won" , some poor ole soul lost a $.....I don't look for the COMEX to belly up as much as I do all the little dot. com. commodity trading firms.....if you don't get your margin call to your brokerage firm,they have to have sufficiant capital to cover their traders loses overnight.....every brokerage has to play "bank" ....the COMEX does not play "bank"...in a case where a brokerage firm can't cover their loses ,all accounts are frozen (ie, Griffin Trading Co,Dec,98, London)...this comes from the Mar99 issue of FUTURES mag.....

The point I'm trying to make is don't worry about the COMEX....worry about the firm that is "holding" your money...ps...I'm in the process of transfering my account to a "large" firm...
What was your first trade 28 yrs ago..?

Chicken Man

If I read you right, The money owed by the option writer is secured by his credit and margin with his Brokerage outfit and that ALL positions that firm has with the Comex are subject to being held as collateral.

BTW Remember several months back, they HALVED the margin requirements on option writing. That is a perfect example of braiding your own hanging rope.

Leigh...I love it and I would love to be a judge but I don't have very much time today. # 2 son is coming home on leave from the Navy and I have spent all day cooking his favorite foods and getting ready......maybe later tonight after we have had time to catch up.

Peter...so glad you deceided to post. As I told you last night I smell Grammy.

All: I certainly hope we aren't offending anyone with all this levity. We still have hours before the overseas markets open on what may be the start of the BIG GOLD RUSH.
Besides I would really like to see Goldfly tackle something like "Bad To The Bone". I should have known he wasn't a Roberta Flack kinda guy.

http://www.house.gov/paul/openingpage.htm
You said:

<<>>

Check out Congressman's Paul home page at the above link, called PROJECT FREEDOM. Be sure to read his biography.
The following is from his web page:


The Congressional Record (House)
May 16, 1997
Voting for libertarianism is voting for Liberty

[Page: H2862]

(Responding to criticism from two members, both saying that Ron Paul is too consistent.)
(Mr. PAUL asked and was given permission to address the House for 1 minute.)

Mr. PAUL. Mr. Speaker, we have just finished the debate on the jobs programs bill, and in the discussion I was referred to as a libertarian, but a very consistent one that voted the same way on each type of legislation.

I would like to remind my colleagues that voting for libertarianism is voting for liberty. Also it is a very consistent vote with the doctrine of enumerated powers. It is said in the Constitution that we can only do here in the Congress which is enumerated by the clauses within the document. So therefore, if it is said that I am very consistent and want to be labeled as libertarian, that is one thing, I do not deny that. But in the other sense, I am a strict constitutionalist that obeys and listens very carefully to my pledge to the Constitution as well as paying close attention to the ninth and tenth amendment.

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

I also urge everyone to check out the Libertarian Party web site at http://www.lp.org/ and be sure to take the World's Smallest Political Quiz.

AREM

The way I read it ...till the CFTC sorts out everthing ...it's frozen....the question is ...when would they get around to "sorting" things out....? after the market peaked..?.and leave one high and dry without any profits
This could change the tears of joy to tears of sorrow....something a person "remembers for a lifetime"...! why take a chance on a under-capitalize firm to save 5 bucks..?

Turbo: Your post on the national ID card was very helpful. I was wondering if that bill would go through.

Mike55: I remember out earlier communication. The information you presented about that manufacturing company could, IMO, very well be a representative example of a firm's preparadness. Scary.

DD: If more people could experience the BS, unethical actions, and fraud that occurs in the last 10% of a project then we would would have a lot more people prepared for y2k.

Peter Asher: I lived in Hollywood and worked in Burbank for over twenty years. Got to know a lot of people in the music and film industry. You would do great there with your creativity.

Chicken man: Great perspective on who is liable. But what happens if we have four or five LTCMs? Perhaps the expression is Doomer Rumor Tumor! Can the FED print money that faster then the tumor spreads?

AREM: I am checking into the Libertarian Party. Got to do something. Hope we have elections next fall!

Leigh: I read and enjoy your posts. Nice to have you hear.

Cavan Man: Didn't see anything that would be taken as offensive. Always get something out of your posts and questions.

AEL: Do you have a link to your friends's post?

MK: Just started reading your recommended "The House of Morgan". So far so good. One of the first things that I notice is that the Morgan interests have been super close to the FED and they are one of the groups who are very short on gold! Makes one wonder.

The Stranger, Aristotle, Aragorn III et al: Where are you?

All: Should be a very interesting week which we all will share.

Regression analysis of all 39 Fidelity Select sectors
which collectively act as a proxy for the market, show:
Precious Metals (FDPMX) and Select Gold ( FSAGX)
to be in First and Second place on the 30 day
regression table.
Also FDPMX is First on the 60 day table
and FSAGX is Third.
FSAGX & FDPMX Hourly Gold chart:
http://www.SelectSectors.com/agpm70.gif
Ps:
Even if you hate mutual funds, The Select Gold
sectors have less noise than the XAU, and therefore
are better/easier for prediction.

Time to wakeup SPOT and SPIKE !! -- and see what you started at the FORUM, --- Tis looking more like MoTown or Country Hoedown boards now. -- Get Au or get the Blues.
<;-)

http://www.gold-eagle.com/research/butlerndx.html
My positive position on silver has been, over time, highly influenced by Ted Butler, the author of the above linked article.

When reading the above post, which sounds a bit wild, keep in mind who the author is. The author, Ted Butler, was exposing the gold/silver short scam when many of us did not have a clue. He preached and talked and wrote when many could care less. In April of 97 he wrote a public letter to Mr. Greenspan and Mr. Rubin exposing the scam directly to them. This year he took on the commodity regulators. Ted knows commodity trading and is tough. I respect him.

Y2K........ 10% left.Glad you guys responded to my message last night.

Y2K will be a terror, make no mistake about it. The financially elite have and will deal with it (ie: countries,
corporations and individuals). The financially strapped are forced with 'FOF'. How does that grab you? The oil industry
has seen low margin prices for a long time (say up to 10 months ago), they have not had time nor money to 'anticipate' Y2K remediation. The USA imports nearly 30% of its oil from S.A. Can you begin to imagine if the USA receives 70% of its required oil in Jan. 2000?

I was aimlessly walking about the ranch today when it dawned on me that coffee is going to go through the roof.
Coffee is S.A. Chocolate bars, hmmmm, caramilk bars, I told my kids I'm buying 1,000 caramilk bars just in case of Y2K.
My son said, "What if Y2K is nothing and you have a 1,000 caramilk bars, what are you going to do with them?"

I'm going to eat them, son; and if Y2K is fearsome, I will eat half and sell the other half for $7.95 each!

Thus my friends, is the no-lose scenario for Y2K, which co-incidentally involves purchasing LARGE BAGS OF GOLD.

>Now if we could just find some more reps like Ron Paul.<

Right you are ... the potential is there, but as you undoubtedly know, those potential reps reside in the Libertarian Party, as AREM points out, and the LP just can't seem to get any traction. Recent figures do show, however, that the LP has multiplied both it's membership and contributors on the order of eight-fold in just the last 4 years or so.

It's interesting that in this Klinton-conceived New Era economy , that the major parties appear to be fracturing. The anointed Democrat, VP Gore, is facing a challenge from Bradley, with others possible (Warren Beatty ?!) The Republicans are seeing defections (Buchanan, Bob Smith). Even the Reform Party now has the American Reform Party splintering off.

Peering into my crystal ball (I can't claim my crystal ball has the clarity of Gandalf's), I see the LP being pulled into the mainstream when hard times hit and persist and the masses become desperate for answers ... wishful thinking perhaps.

>At least we won't be stuck with a national id when we want to exchange our gold for Euros, eh?<

Indeed !! But they'll likely have some pernicious scheme up their sleeve. Therefore, one might want to consider hedging against the dollar in other ways too, such as an account held in another currency (as touched on the other day by gidsek and PH in LA) or in the Franklin-Templeton Hard Currency Fund, which protects against a weakening dollar by investing in other currencies (when last checked about a year ago, it was about 75% in the mark, franc, and yen, I believe).

Keep us updated on your experience with Linux ... that's interesting.

By the way, given your talent for providing an appropriate Mises quote for any situation, have you considered doing a regular snippet of Mises quotes ?? How 'bout it ?? I even have a name to suggest !! Mises Pieces !! (Apologies to Reece's).

Here, in response to a couple requests, is the full writeup that I mentioned earlier. It is a bit long, but very well-documented; a neat piece to clip and mail to friends who shrug off Y2K. It is not anywhere on the web that I know of. I got it by email.

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


Date: Thu, 23 Sep 1999 11:34:09 -0400
From: Terry Cottam
Subject: Oil Disruptions May Crash Markets In January 2000

OIL DISRUPTIONS MAY CRASH MARKETS IN JANUARY 2000
-------------------------------------------------

By Terry Cottam, Ottawa, Canada, 23 Sep 1999

Revised, expanded from an article for Peace and Environment News,
Oct 1999

IN THIS ARTICLE:
-- Markets could crash
-- Long-term food shortages likely
-- The "Lucy factor"
-- Authorities fight efforts to prepare
-- What's Next?

OIL IS OFTEN OVERLOOKED in all the seemingly good news lately on Y2K. The
International Energy Agency (IEA) warns "vulnerabilities still exist at all levels of
the oil supply chain." [1] A survey by Gartner Group revealed U.S. companies have "not
been providing accurate disclosures" on their Y2K risks. The IEA says this could have
"serious implications" for oil supplies. [2] Another oil industry observer expects
"multiple embedded systems going down on each oil well" with no parts or replacement
systems available "for quite a long while." [3]

Canada exports to the US, which in turn imports half its supply. The Maritimes depend
entirely on imports. But the Canadian Association of Petroleum Producers surveyed its
members and says 100 per cent "expect to have mission critical systems tested and
compliant ...before year-end 1999." [4]

Such Y2K self-reporting is usually unaudited and therefore unreliable. The National
Energy Board (NEB) has quietly imposed a requirement for third-party Y2K auditing for
"all major regulated pipelines." However other NEB-regulated companies are only
"required to file quarterly progress reports." [5] We should watch for more details in
upcoming Y2K hearings, shortly after House of Commons resumes sitting on Oct 12th.
They are open to the public only for viewing, and are barely publicized. Please see my
website below for updates on time and place.

The American Petroleum Institute (API) says "Americans can expect few, if any,
shortages," [6] and says major oil exporters such as Venezuela and Saudi Arabia will
be prepared. [7] More credible sources such as the Gartner Group [8] suggest OPEC
countries are far behind in Y2K oil preparations. The API also claims the industry
"has no plans to ration fuel and foresees no need to do so." [9] In fact, OPEC
producers are increasing the risk of shortages by deliberately CUTTING PRODUCTION TO
KEEP PRICES UP even though Y2K fears may "cause consumers, processors and distributors
to stockpile crude oil and products." [10]

Oil may still be enroute from the Arabian Gulf for the first 35 days of 2000. [11] But
by mid-January, if the tankers are loading less oil, this foretells rising oil prices
and gasoline rationing. The U.S. Strategic Petroleum Reserve could supply 3.9 million
barrels per day for 90 more days. [12] At worst, the reserves would run out in May
2000. The U.S. General Accounting Office questions whether the reserve "would be
available or sufficient in case of shortages," and says U.S. companies "haven't
established a cooperative nationwide contingency plan for Y2K problems, such as supply
shortages or disruptions." [13]

MARKETS COULD CRASH

The stock markets may react within days of the first reports of serious oil shortages
in January 2000. They are already unstable, having been weakened by government
controls which encourage stock market speculation. Says Mark Germine, an American
expert in systems theory: "If the market were in a stable position, the Y2K phenomenon
would have only a minor, transient effect. However, we are already in an overinflated
market of the same magnitude as accompanied the crash of 1929. Our current 'control'
of the market, is, paradoxically, what has caused us to reach this position of loss of
control." [14]

If the markets crashed, then "we would suddenly be in a very different world" says
currency expert Bernard Lietaer. "In 1929, the stock market crashed, but the gold
standard held. The monetary system held." But now, power has shifted drastically from
governments to financial markets. Lietaer cites the Roman Empire collapse, which ended
Roman currency. "That was, of course, at a time when it took about a century and a
half for the breakdown to spread through the empire; now it would take a few hours."
[15] In the Depression, economic suffering prompted people to start up local
currencies. This may again become a desirable complement to federal currencies if they
become destabilized. (For a new way to quickly launch local currencies, please see
http://communityway.org.)

Why this fragility, especially since the financial sector is widely deemed a low Y2K
risk? For starters, "sectors it totally depends on like energy and telecommunications
are at high-to-medium risk" says Roberto Verzola. As depositors and fund managers get
their funds out of high-risk areas, they would likely seek "real, tangible assets
which do not lose their value so easily -- land, production facilities and tools,
goods, precious metals, and so on." But for years, governments have allowed banks to
issue dubious loans using new money. As a result, "$20 to $50 of money or its
equivalent is circulating today for every dollar of real goods and services." If
nervous investors try to convert all these floating dollars at once into real goods
and services, "we'd have the equivalent of some 20 cars racing for the parking space
for one." [16]

LONG-TERM FOOD SHORTAGES LIKELY

May 2000 is also planting season in the Northern Hemisphere. Economist Ed Yardeni
asked the U.S. Senate: "Will disruptions in our energy supply chains (electric, oil,
and gas) hamper the ability of farmers to grow their crops and feed their livestock?"
[17] According to the Food and Agriculture Organization (FAO), the whole food chain is
vulnerable. "Basic inputs like seeds and fertilizers could be threatened - as well as
supplies of irrigation water and electricity." However, "most experts pinpoint
transportation as the weakest link." [18] Food requires on average 2000 km of
motorized transport from farm to fork. [19] Supermarkets hold just three days supply
of food. Here in Ottawa, Canada, unlike other cities, we have no food warehousing
facilities.

THE "LUCY FACTOR"

Many people assume that governments and corporations won't let Y2K affect their hold
on power. But Jim Lord notes that "over the past thirty years and more, six of every
seven large software projects are either finished late or cancelled. Meanwhile, Y2K is
the largest and most expensive software project in history and it has an inflexible
deadline." [20]

Lord refers to the "Lucy Factor" after the running gag in the Peanuts comic strip.
"What makes this gag so funny is that Lucy always assures Charlie that THIS TIME she
won't move the ball. Good old trusting Charlie always believes her but she always
moves the ball. And down goes Charlie."

The authorities are Lucy. We are Charlie Brown. Decades of managerial incompetence
brought us the Y2K problem in the first place. In 1960, Robert Bemer, an "IBM wizard"
joined 47 other industry and government specialists in lobbying for the four-digit
date standard. But in 1970, the U.S. Department of Defense, the largest computer
operator on earth, set the industry standard by refusing to adopt the four-digit year.
"For bigger-bang-for-the-buck reasons, it was unshakable on the subject of year dates:
no 19s. 'They wouldn't listen to anything else,' says Harry White, a D.O.D.
computer-code specialist and Bemer ally. 'They were more occupied with ... Vietnam.'"
[21]

People have been fooled by the official "happy talk" on Y2K into assuming business as
usual. For instance, last week, over 1,000 organizations from 80 countries demanded a
halt to talks in Seattle by the World Trade Organization (WTO), fearing it is becoming
a "secret world government." [22] But this won't happen if cheap, plentiful oil comes
to an end. The WTO, its giant corporate clients, and nation-states of any size all
rely completely on "bug-free" technology, including oil-based transport, to maintain
their organizational integrity. Meanwhile, it's a safe bet that few of those 1,000
citizens groups are planning for any disruptions in grants, fundraising, transport,
faxing, email or phones next year, or anticipate their staff, volunteers and donors
will suffer loss of food, water, heat, money or other essentials.

AUTHORITIES FIGHT EFFORTS TO PREPARE

The Cassandra Project is widely acclaimed as the pioneer of Y2K community preparedness
groups. Its mottos are "Individual preparedness is for those who can. Community
preparedness is for those who cannot" [23] and "The best security is a prepared
neighbor." [24] But across North America, grassroots organizers report that "very
little progress has been made" with local governments since January. Public interest
"began to plummet" in March. Since then, community organizing has become "increasingly
difficult." [25]

Boulder County, Colorado remains a notable exception. There, Kathy Garcia spearheaded
a successful model of neighbourhood organizing. It has been spread far and wide by
Utne Reader's Y2K Citizens Action Guide, an invaluable, practical little booklet. [26]
But cynical reviewers found it naively upbeat. [27] In retrospect, the guide
underestimated opposition to community organizing.

READY-2000, our local Y2K "public/private partnership" declined a request by our Y2K
citizens group that they distribute the guide. They did not allow us to join their
planning process. True, we have some of the best prepared municipal services in North
America. Hence their slogan "we expect little or no service disruptions." But few
residents bothered to attend their poorly publicized "community forums." [28] They
dismissed our arguments that we cannot trust unverified, self-reported assurances on
oil, food and other critical outside dependencies.

Because Ottawa experienced the ice storm, READY-2000 suggests that residents stock up
for 4-7 days of problems. But the proportion of residents intending to purchase extra
supplies has dropped by half, from 50.1% in January to 23.1% in July, even though food
and other goods may never be this cheap again. [29] Almost everywhere else,
authorities discourage stockpiling for more than a "three-day winter storm." Beyond
that is deemed to be hoarding and panic. [30]

WHAT'S NEXT?

With just 100 days left until the year 2000, we now have the benefit of some
disturbing hindsight. Many city residents will not prepare until after they suffer
disruptions. If the economy crashes, Ottawa may still avoid the riots and looting
which will undoubtedly hit large U.S. cities.

If oil becomes scarce or very expensive, only a fortunate few may own or drive a
vehicle. After a difficult winter, we may see more urban food production. The
population may shift towards food and water supplies. The city may be forced to become
like rural areas, more prepared and mutually supportive. The Cassandra Project
cautions, "you can't get away from this problem. You're safer and better off in an
area you know well... No matter how bad it gets, problems will eventually pass. We're
always stronger and better able to handle any emergency if we all work together." [31]
But for now, working together is precluded by the implacable opposition of big
business and big government.

Please see http://y2k.inode.org for more references on oil, money, Y2K preparedness,
and the upcoming Y2K federal hearings here in Ottawa.

-------

Terry Cottam can be emailed at y2k-ottawa@inode.org, or tel. (613) 236-6433 (your
feedback is much appreciated). He has researched the Year 2000 computer problem for 15
months, informing local residents with support from the Ontario Public Interest
Research Groups at Carleton University and the University of Ottawa (OPIRG-Carleton,
OPIRG-Ottawa). He co-founded the Y2K Centretown Preparedness Group in November 1998.
It went region-wide in February 1999, then dissolved in July 1999.

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

Endnotes:

1 International Energy Agency, "Update on the IEA's Y2K Activities," July 1999
http://www.iea.org/ieay2k/homepage.htm

2 International Energy Agency, "IEA Working Paper: The Year 2000 Problem and the Oil
Industry, Preliminary Findings," Mar 1999 http://www.iea.org/ieay2k/html/Prefind.htm

3 Gold-Eagle - The Internet's Premier Financial Magazine, Oil and Natural Gas: Are
They the Real Problems in Y2K? - Jun 21, 1999
http://www.gold-eagle.com/editorials_99/rc062199.html

4 Canadian Association of Petroleum Producers (CAPP), Canadian Gas Association (CGA),
Press Release: "Year 2000 Readiness; A Status Review of Canadian crude oil and natural
gas producers plus related natural gas transmission and distribution systems." May
1999 http://www.cga.ca/PressRelease/cgacapp.htm

5 John McCarthy, Business Leader, Operations, National Energy Board, (403) 299-2766,
jmccarthy@neb.gc.ca. Emailed response, 21 Sep 1999

6 American Petroleum Institute, "Y2K Questions and Answers for Consumers," August 16
1999, http://www.api.org/ecit/y2k/faqs/consumer.html#available

7 American Petroleum Institute, "Imports Will Flow to the U.S. During Year 2000
Conversion," 06/28/1999 http://www.api.org/ecit/y2k/whitepapers/imports.html

8 Lou Marcoccio, Research Director, Gartner Group, cited in "Y2K could affect flow of
U.S. oil imports," Kate Snow, CNN, March 21, 1999.
http://www.cnn.com/TECH/computing/9903/21/bigpicture.y2k.hln/

9 American Petroleum Institute, "Y2K Questions and Answers for Consumers," August 16,
1999, http://www.api.org/ecit/y2k/faqs/consumer.html#ration

10 World Bank, "Global Commodity Markets, Summary," July 1999
http://www.worldbank.org/prospects/gcmonline/summary.pdf See also "Special Feature,
Anticipating Y2K," July 1999
http://www.worldbank.org/prospects/gcmonline/y2kfeature.pdf

11 American Petroleum Institute, "Imports Will Flow to the U.S. During Year 2000
Conversion," 06/28/1999 http://www.api.org/ecit/y2k/whitepapers/imports.html

12 U.S. General Accounting Office, "Year 2000 Computing Crisis: Readiness of the Oil
and Gas Industries," May 19, 1999, pp 3-4
http://www.gao.gov/monthly.list/may99/may9913.htm#4

13 E. L. Core, "IEA, USS, GAO, DJN, NYT: Fear-Mongering, Panic-Baiting Y2K Money
Grubbers?" June 2, 1999, http://www.wbn.com/y2ktimebomb/Media/lcore9922.htm

14 Mark Germine, M.D. (publishes e-journal Dynamical Psychiatry) "Y2K Crash: Why this?
Why Now?" On the website "Book of Eli" (an anonymous author),
http://www.bookofeli.com/photo.htm

15 Bernard Lietaer, "Beyond Greed and Scarcity," Interview by Sarah van Gelder,
Editor, Yes! A Journal of Positive Futures, Spring 1997
http://www.futurenet.org/2Money/Lietaer.html

16 Roberto Verzola, "Y2K: The Homestretch,"
http://www.inode.org/y2k-news-archive/msg00031.html

17 Dr. Edward Yardeni, Chief Economist & Managing Director, Deutsche Bank Securities,
one of eleven unanswered questions on Y2K and the Food Supply in his "Statement to the
U.S. Senate Committee On Agriculture, Nutrition, and Forestry, Hearing on the Year
2000 Problem and Agriculture," July 22, 1998
http://www.senate.gov/~agriculture/yardeni.htm

18 U.N. Food and Agriculture Organization (FAO), "The Millennium Bug threatens food
supply systems - developing countries are also vulnerable, FAO warns," 19 April 1999
http://www.fao.org/news/1999/990302-e.htm

19 Donella H. Meadows, adjunct professor, environmental studies, Dartmouth College,
Nova Scotia, "Y2K and the Average Bite of Food," 2 July 1998, The Global Citizen,
http://iisd1.iisd.ca/pcdf/meadows/y2k.htm

20 Jim Lord, "The Real Y2K Problem," April 12, 1999,
http://www.wbn.com/y2ktimebomb/Tip/Lord/lord9915.htm

21 Robert Sam Anson, "The Y2K Nightmare," January 1999, Vanity Fair,
http://www.bookofeli.com/Y2Kstockmarket.htm

22 "NGOs Mobilise Against WTO," BRIDGES Weekly Trade News Digest, Vol.3, Number 37, 20
Sep 1999, http://www.ictsd.org/html/newsdigest.htm or
http://www.flora.org/flora.mai-not/13875

23 Paloma O'Riley, "Individual Preparation for Y2K," 2 Feb 1999. Cassandra Project,
http://cassandraproject.org/indprep.html

24 Paloma O'Riley, "Individual Preparation for Y2K," XI. A. "Your Neighborhood"

25 Y2K Grassroots Community Preparedness Survey, 20 May 1999,
http://www.nhne.com/y2kgrassrootssurvey/index.html

26 Utne Reader Citizens Action Guide, http://www.utne.com/aY2K.tmpl

27a Christina Spencer, Editorial Pages Editor, Ottawa Citizen, review of Utne Reader
Y2K Citizens Action Guide, 1999/01/04
http://www.ottawacitizen.com/columnists/spencer/990104/jan4.html

27b James Poniewozik, Salon online magazine, "the world is ending -- LET'S GET TO KNOW
OUR NEIGHBORS!" 1999/01/05, http://www.salon.com/media/poni/1999/01/05poni2.html

28 "APOCALYPSE (maybe): What if someone called a calamity and nobody came?" Ottawa
Citizen, 1999.05.30, The Citizen's Weekly, C5
http://www.inode.org/y2k-news-archive/msg00021.html

29 Corporate Research Group Ltd., "PERCEPTIONS 2000 - #2, JULY 1999; Awareness of Year
2000 computer problem," survey of 407 adults in the Ottawa-Hull area, week of July
26th, 1999, http://www.inode.org/y2k-news-archive/msg00032.html

30 "Letter to [CBS] 60 Minutes from the Food Industry," posted on the Web by the U.S.
Department of Agriculture, June 1999 http://www.usda.gov/aphis/FSWG/60minutesltr.html

31 Cassandra Project, "Year 2000 Frequently Asked Questions (FAQ),"
http://cassandraproject.org/y2kfaq.html

Cavan Man -- What offense? Certainly none taken. I apologize if my post was construed by you to be directed at anyone on this site. My comment of "naysayers" was related to co-workers, a lot of the general populace, and unfortunately, even some of my family members. Since the fact is that "no one knows for sure" what may happen, being prepared with the basics, including gold, seems to make sense to me.

Tomcat -- Thanks. We're on the same page.

Canuck -- Choose the industry: oil, food, finance, medical, raw materials/finished goods....let's hope for the best. If it's non-eventful and there's certain goods I have in surplus, I'll use what I can and donate the rest to elderly neighbors, shelters, and soup kitchens that are always in need.

Gotta' go -- three sons in need of the computer for homework. Thanks all!

'In my opinion the greatest risk today is not the trade itself but the clearing of the trade. Remember, your profit is only someone elses loss if he has the money or can borrow it from someone else.'
--------------------------------------------------------

This is the tail end of ET's message, please review and contemplate the A/FOA messages of 12 months prior. Review the past 2 days posts in reference to 'option' problems.

IMHO, this is not the time to hedge, speculate, bet on 'futures', buy an 'option', liquidity is the key, you must have physical in hand, physical in hand dictates your position, you control the price. Be careful, be confident,
hold it in your hand, the price IS going up, do you want to be in a position of buying or selling?

Dear AEL: Thank you for posting your friend's report. I was wondering what he would say about why authorities are discouraging people from preparing. That's something I CANNOT understand. Unless there is some diabolical plan to make everyone subservient to the government for food and power, it would be in their best interest to make sure people are well-fed and comfortable.

The other day I went to the base housing office to ask about their Y2K preparedness. I wasn't confrontational; I was earnestly trying to find out what preparations they have made so I could fill in the gaps. The head of the office smilingly assured me that the power companies in the Northeast WOULD NOT FAIL because they run on older operating systems. Western systems, which are newer, might have trouble for a few days. Therefore, he said, they have made NO plans at all because nothing will happen. As we were saying goodbye, he told the clerk to make sure she got my name. WHY? Will my house be raided first by the military police? I lie awake at night in fear of having my house searched and supplies taken.

You know, if things like food confiscation and so on do happen, people are going to be horrified. Bill Clinton will make himself the most hated person in America, and he will risk assassination. I honestly can't imagine what is going through the minds of these policymakers.

Did anyone see the message last night on Gold Eagle about the man who was told by a bank teller that in two weeks they would stop giving out cash?

Just to let you know, I use Explorer, on a T1 connection, and USA GOLD Forum just appears instantaneously.
So I don't think its the browser that is the biggest issue, although I'm sure there are subtle differences between some of the browsers on the market.

Just wanted to mention that your messages in the last week to 10 days have been extremely informative.

A couple weeks ago I was not following you at all.

Thanks.

Spot:

$404/oz.

$307.40 in US dollars

http://www.egroups.com/group/gata/226.html?Latest from GATA.

Canuck, can you tell me where you are getting this info? I've been using quote.com/livechartscom/, and they show something like $306 right now, and the exchange has the letter code "g". What exchange is that? I think the New York market letter code is "w". (That refers to the COMEX, right? And of course its closed right now)

And what is the letter code for Sydney?

Some help, please?

Can you suggest a foodstuffs list or other essential items IYHO? Thanks.

Kitco shows $308.3. Market is just opening up.

Would someone mind straightening me out in reference to something in Chris Powell's story? I thought the gold in Fort Knox was never to be touched, at all. How can Goldman Sachs or any other firm even think of getting their paws on it? The gold belongs to the U.S. citizens; doesn't Congress have to give permission for it to be sold? Was that a joke in the story?

Thanks for the post regarding confiscation. I am in total agreement with Justice Scalia. I had a thought earlier, that more than concerns me. I fear that I have lived during the generation that watched its freedom and country get lost in its comfort.

at $308.30.

Thanks Al.

http://www.provide.net/~aelewis/gold/y2kstock.htmtry the above link

You're not alone (ranger). It breaks my heart more than I can tell.

RE: Air Filtration

I am looking for the type of "gas masks" I have seen used in Israel. Anyone know where these can be bought? Thanks..CM

In our euphoria of watching the gold market breakout, we may not have noticed the largest asset transfer in US history. This transfer is being foisted upon the American people by the Federal Reserve Bank.

What is the pattern for disposal of fiat currency during times of hyperinflation? Spend the currency as fast as possible on any asset at almost any price in order to get from paper to things of value.

The Fed has announced that they will accept any collateral in exchange for FRNs sent to the banks as "liquidity injections." Pine trees and ink in exchange for assets of value. If the subject bank thought it worthy collateral for a loan, it must have some value.

Most people have accepted the action of the Federal Reserve Bank as necessary to keep local banks liquid. It will keep the local bank liquid but at the expense of transferring the title to all local assets to the Federal Reserve.

Picture a local bank in Anywhere USA. It is run by Mr. Joe Banker and was run by his father before him. Local Bank has been the lender for our area for two generations. They hold mortgages on farms, ranches, homes, commercial property, tractors, earth moving equipment, cars, motorcycles etc. Any of this has value but is also the infrastructure for the local economy.

Who is the largest employer in your area? Has Joe Banker loaned them money? If he has, then there is a mortgage.

Local Bank run by Joe Banker has only 2% reserves but not to worry. The Fed will ship him all the pine trees and ink he needs to stay liquid. The Fed will accept any collateral the bank has for the paper exchange (FRNs.)

Joe Banker draws down 100% liquidity to return all deposits to his customers. Joe Banker surrenders all the collateral to the Fed because he is sure all his customers will be redeposit the withdrawn cash and he can redeem the collateral from the Fed. No one gets hurt or so we are led to believe. The money is not redeposited. Joe Banker has paid all his depositors and has retained his good name but Local Bank has no deposits and no collateral to bring in income. Local Bank is now out of business with "no one getting hurt." Joe Banker came thru for them.

What about all the local assets? They are now held as collateral by the Federal Reserve Bank. If the payments are made on time the assets remain in the local economy. If not, foreclosure.

Will 90% of the assets in the US revert to the Federal Reserve in the coming crises? Pine trees and ink (FRNs) was all it took to transfer the wealth of a nation to these bankers for one last fleecing.

What do they do with the assets? The real estate will be sold into the market after a new monetary system has been established. This will be a 10 - 20 year process.

How about equipment, factories, cars, boats, motorcycles, tractor, earth moving equipment, etc?
Much of this will be put on ships and sold in world markets for EUROs. What a way to change worthless FRNs into EUROs. Is this possible? If a Harley Davidson motorcycle will sell for $50 thousand US now in Europe, will it bring $20 thousand EUROs under fire sale conditions? All it cost the Fed was pine trees and ink.

Is the local steel mill needed in the US during a severe depression? No problem. Lay off the 700 employees, ship the equipment to (?) in exchange for EUROs and use it to manufacture steel that the US can purchase at a later date. There is a world market for all the inventory also.

Garment and shoe factories have already left the country. Anyone can list many products that our parents helped to manufacture that are now imported. Much of the equipment to make the imports is the same equipment our parents labored over to make the very same product and at the same time a living for their families.

How about the excavation and road building company near you? What would their dozers, scrapers, maintainers, etc. bring in EUROs if the used equipment was loaded onto a ship and exported? All it will cost the Fed is pine trees and ink. They will pay labor to load the ships in the same FRN currency, pine trees and ink.

Does the forgiving of poor nations debt have anything to do with this picture? Is it part of the fleecing of America? Yes, These "POOR" nations will now be free to purchase vital equipment (to our nation) exported from the US. They can then use our previous industries to export products to the US of A as our economy recovers. Since we have no equipment, factories or industrial facilities we are at their mercy. It will be a long, painful and expensive experience.

Will the Federal Reserve Bank care if their money making charter is revoked? If it is, they still walk away with most of the assets that were formerly our national wealth.

Summary:

- The Federal Reserve Bank exchanges FRNs for title to any and all assets as banks are forced to ask for printed notes to stay liquid.

- The Fed will then acquire clear title to most of the assets in the US as defaults occur. This includes real estate, factories, vehicles, boats, motorcycles and any thing else that is valuable enough to carry a mortgage.

- The Fed can then export factories, equipment, cars, boats, etc. to other countries in exchange for EUROs. This could also be in partnership with the Fed in overseas plants.

- It will be many years before the US can recover any manufacturing capability especially if the remaining industrial equipment is exported.

- All central banks, including the Federal Reserve Bank need the debt forgiveness for "poor" countries that is now talked about. This would allow a clean slate for establishment of exported industry and equipment in foreign countries. All this will be done in EUROs or any currency except FRNs. What a way for bankers to transfer from the $US to safer currencies.

It appears that in less than one hundred years, the Federal Reserve bankers have managed to fleece the American people of our entire national wealth. We are now a third rate country with the best military in the world. However this is only for a short time because we are broke.

If this happened to the US, will it be the same in all countries? Are all central bankers playing thi

Sorry. This is the last part of the previous post that did not post.

If this happened to the US, will it be the same in all countries? Are all central bankers playing this game? Will they also demand collateral that will eventually give them tittle to most assets in foreign countries?

While all the attention is on the stock market and gold, the Fed is moving all the wealth of our nation out the back door.

I know this is fiction. I made it up. Could it be true? Is there any discussion? If not, I will drop the subject but I am afraid for the US of A.

I have gold. Will I be able to buy a shoe factory with it? All my shoes are foreign made at this time. What the US of A sells is information. I can't wear or eat information and I need a tractor to plow my farm.

Got gold?

"why authorities are discouraging people from preparing..."

Not discouraging really, Leigh, just profoundly unenthusiastic and dismissive about the whole thing. And to the extent that there is awareness, the orientation is to stress the "3 day storm" scenario so as to prevent panic -- which is a real risk, vis a vis the banking system, etc. 'Course, far as I'm concerned, the banking system *ought* to be brought down... by a dynamic and engaged citizenry, demanding an end to the fraud of fractional reserve banking, the federal reserve system, debt money, etc. But more likely would be the banking system brought down by paniced and disengaged individuals, all seeking to get their own dough out and to hell with the consequences to anyone else. Quite understandable, and I don't blame anyone, but it would be nice to think that we could figure an equitable and fair way out of such a mess, as a society. Impossible as long as there are no leaders of integrity and moral sensibility -- as there are not. (Geez, how did I get off onto that rant?)

Anyhoo, the authorities (naturally) want everyone to think that everything will be A-OK in order to avert panic, which would result in mass bank withdrawals, mutual fund redemptions, etc., etc., (mass movement out of paper and intangibles) which could/would in turn precipitate a stock market collapse, mass insolvencies, etc., etc., you fill in the blanks. The whole financial casino/"system" could possibly blow up before the rollover, which would make the actual computer-related problems much worse. This has always been my second-biggest fear, after national electrical grid shutdown of any significant duration (which now -- happily -- looks pretty unlikely).

Upper 60-minute bollinger for Dec. gold is $310. She is at $308.80 now. Should it hit $312 then I believe it will track up to (possibly) $320 tonight or tomorrow.

Steve,

What the heck is an upper 60 minute bollinger?

I picked up one of those Israeli masks at a gun show for about 12 bucks; extra filter cannisters for about 5 bucks. I've seen them in army surplus stores at higher prices. Not a bad idea to have some things like this around. I've also got some very fine-pore masks used by painters and asbestos workers. I hope to God(dess) that I'll never need stuff like that.

Now, $309.50.

Cavan: I have seen these advertised at www.watertanks.com. Unfortunately, that site is down tonight. I have purchased 55-gallon water drums from this company, and they delivered them quickly.

AEL: Thank you. Can you believe all this is going to happen in less than three months? I started preparing in earnest last December, and it seems like no time at all. And the whole subject is still a mystery.

Clint H: Did you really write that? It sounds plausible to me. Another excellent reason to have gold!

Pulling your leg with the $404/oz. I'm sorry, the week-end is over, Sydney is open, no more kidding around.

Let's have a good week!! (Hopefully $404 at the end of the week)

What do you advise regards holding silver? Thanks.

Man, you can really communicate. Call it fiction if you will but that piece you just wrote really hits home.

Thanks. We live in an area that has a fault that when last moved, reversed the course of Big Muddy. With all the quake action, we're just waiting here.

CM,

Where you getting your prices (real time)?

SteveH

Dear Cavan Man: My father-in-law, who is 79, remembers his great-aunt telling about that earthquake (she lived through it). If I can get him to tell me the story again, I'll write it up for you.

Where is Goldspoon? He must be out riding his Horse with No Name. They're far in the lead this evening!

After the city of Rome was sacked and surrendered for the last time about 432 AD, the western world entered the dark and then the middle ages culminating in the renaissance and next, the reformation.

What does it profit the world to devastate the US economy so as you describe? It doesn't. Perhaps I misunderstand. You use great deductive reasoning and good logic but methinks your theory is implausible.

Leigh: Peter Asher wanted to me to tell you that his lines are down and he couldn't continuew communicating.

Canuck: Thanks for the nice compliment. It is a great group we have here.

Cavan Man: I expect silver to take some heat as gold is sorted out. I then expect it to go above $8 (fairly soon). I holding for the long run. All physical. No paper.

CM, I live in Texas and you can usually find them at the Gun Shows, I don't remember where you live but that would be my suggestion. Sincerely, The Scot

Pardon. I meant to tie both paragraphs together with the statement, "Why send the US back to the Middle Ages"?

What do you buy?

http://www.kitco.com/gold.live.htmlSteve,

I use the above. It now shows $309

"System" crashes and gold owners provide investment capital pool(s). Sound like a headline?

Why wouldn't big bro allow the physical holders to rise? After all, the important people will more than likely be taken care of anyway yes?

Quote.com shows Dec Gold (GC9Z) at 308.6 with a 30 min lag and FOREX.com shows SPOT the Dog at $307.20 at 7:26 PDT.
<;-)

http://www.usplastic.comCavan Man -- The link from AEL is the best overall checklist I have found in the last year. While some may consider it a little over the edge, depending on your perspective, it does hit all the areas and causes you to think of basics you may not have considered.

AEL -- Your 15309 post is what I've discussed before. The government is walking the fine line between adequate and timely disclosure versus "everything's fine". If the potential extent of problems were disclosed, people may just pay attention and cause "panic" that would bring the fractional reserve system and the equities markets to their knees. They've missed the boat on spreading the word over an extended period of time that would allow orderly transition of investments and supply preparedness.

Leigh -- I've dealt with United States Plastic Corp. in Ohio earlier this year and have been very satisfied with their products, prices, and delivery. Try the link I posted (hope it works or I'll have to get one of my kids to show me how to do it). :-)

FOA said last Sunday that gold owners would be sought after and encouraged to spend their gold to get the economy going again. Another said the same thing in his "Thoughts!" Remember, he said holding gold would be smiled upon and holding Euros would be frowned at.

Though FOA did imply we'd be taxed in a big way. I've been thinking about taxation lately, because I have heard the IRS is having Y2K problems. Does anyone think this will usher in a national sales tax instead of an income tax? It would make record-keeping a lot easier for the IRS.

Cavan Man, You wrote,
<<describe? It doesn't. Perhaps I misunderstand. You use great deductive
reasoning and good logic but methinks your theory is implausible.>>>
I don't know. It's just scares me that this could happen and no one is preparing for it. I hope I'm wrong and you are right.

Leigh
<<excellent reason to have gold.>>>
Thanks. It's just a thought. We need to kick it around. If I'm right how do we prepare or prevent some of it from happening?

Tomcat, you wrote
<piece you just wrote really hits home.>>

Thanks for the comeback. It scares me. If I'm right the recovery time for America will be much longer than the "30s." We are not self-sufficient any more.

Well I went and bought two more coins Saturday. The regular coin dealer wasn't there and won't be in until Tuesday. (Death in family or something...can't remember exactly). Because that person also is the stores coin buyer, (others just run the counter) they couldn't tell me much about Canadian Mounties or their prices. All they could quote was US Eagles ($330), Maple Leafs ($330), Krugerands ($326). I decided to purchase the Maple Leafs. The shop worker said they should be in by next Saturday.


Regarding sending US into Dark Ages:
If you were a foreign country hostile to the USA, what would you do to attack it?
The easiest way I thought of was to cause social unrest and internal strife.
The best way was to Crash the Stock Market and wipe out the "savings" of over 50% of the US population.
Hey, if one wacked out day trader in Atlanta went on a shooting spree from losing $500k, what would happen if more that 30 million lost their life savings? Think about it.
A foreign country wouldn't even have to set foot in the US and it would be hard to trace who caused the crash.

Since I can only get here on a catch-as-catch-can basis, I ask forgiveness if this has been adressed before. I seem to remember a question (discussion?) on US Eagles versus Austrian Philharmonics. The face value of 2000 Schillings at the current exchange rate is about $156 compared to an Eagle at $50. Perhaps face value is a moot point depending on currency fluctuations or devaluations that are difficult to predict. What are the pros/cons of the Eagle versus Philharmonic relative to taxation, reporting requirements on purchase/sale, etc? I'm clear on the pre-'33 coins, but am thinking I may want to shift my modern bullion mix one way or the other. Comments or suggestions, anyone? Thanks in advance.

http://www.reuters.com/news/I hope that link works. It doesn't look very specific. This article talks about China partially deregulating its silver market, with gold to follow.

Dear Clint: I feel, from reading Christian prophecy books about the "last days," that I know the end of the story (i.e., the "beast" who controls all commerce, mandatory biochips, major food shortages, horrifying devastation all over the world). What I don't know is how far we are from those last days, and just how the story will play out until we get there.

What I REALLY believe is that there are powerful forces in the world which want to see humankind subservient to an elitist ruling class. I believe they've been plotting and working toward this for many years now and Y2K will be the catalyst that sparks it off. How we'll fare as gold owners, I don't know. I do think we're in the best position financially we can be in. But the rules could change on us.

Hey guys - I wish I had more time, I'm off to Michigan early tomorrow so I'm getting ready tonight. Thanks for the kind words Turbo, I'll leave you with a passage this evening from F A Hayek, as it seems appropriate for Mr. Al. I'm making some good progress on this Linux deal but the main reason I'm doing it is so I have some other skills to fall back on come the new year. I'm trying to relearn some C++ I used to know and pick up Perl and Java. These PC's will still be around and maybe even relied on further in the future than now. It can't hurt.

Canuck - I'm sure the options traders at least see the other side of the story now. As they always tell you when you first start out, only trade with money you can afford to lose. They never tell you that you can think you won but still lose anyway! I agree, the first priority is hard assets in your pocket.

CM - I hope AEL's list helps you out. I don't have anything to add except that finishing up your preps while the dollar still buys a lot is crucial. We seem to be fighting two different deadlines here.

Here's the Hayek from 'The Road to Serfdom', 1944;

"If we are to build a better world, we must have the courage to make a new start - even if that means some reculer pour mieux sauter. It is not those who believe in inevitable tendencies who show this courage, not those who preach a 'New Order' which is no more than a projection of the tendencies of the last forty years, and who can think of nothing better than to imitate Hitler. It is, indeed, those who cry loudest for the New Order who are most completely under the sway of the ideas which have created this war and most of the evils from which we suffer. The young are right if they have little confidence in the ideas which rule most of their elders. But they are mistaken or misled when they believe that these are still the liberal ideas of the nineteenth century, which, in fact, the younger generation hardly knows. Though we neither can wish nor possess the power to go back to the reality of the nineteenth century, we have the opportunity to realize its ideals - and they were not mean. We have little right to feel in this respect superior to our grandfathers; and we should never forget that it is we, the twentieth century, and not they, who have made a mess of things. If they had not yet fully learned what was necessary to create the world they wanted, the experience we have since gained ought to have equipped us better for the task. If in the first attempt to create a world of free men we have failed, we must try again. The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century."

-- end Hayek.

It's a good read. I highly recommend it. Talk to you guys later this week.

ET

http://www.reuters.com/news/nope, the link takes you to the Reuters headline page. However if you change the business news window from "top stories" to "commodities/energy" and hit the refresh button, the headline linking the article will become available.

I hope that works for anyone foolish enough to try to follow my directions.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Vqz
IMF Declines Comment on Report Camdessus to Resign as Managing Director By Heidi
Przybyla

IMF Spokesman Declines Comment on Report Camdessus to Resign

Washington, Oct. 2 (Bloomberg) -- An International Monetary Fund spokesman declined
comment on reports that Michel Camdessus plans to resign as IMF managing director.
``I'm not commenting one way or the other because I don't know,'' said Graham Newman,
IMF chief press officer. Newman was responding to a report today in the Independent
newspaper in London that Camdessus will quit the IMF's top job by Christmas.

The Independent cited unnamed Washington sources as saying that Camdessus met with
senior officials last week to tell them of his intention to resign.

Talk that Camdessus might resign circulated in Washington this week, where IMF
officials were meeting. Camdessus gave the reports short shrift when asked about them
at a press conference Thursday. ``I hear that (an IMF spokesman) keeps repeating that I
enjoy my job,'' said Camdessus. ``I must confirm it.''

Francisco Baker, another IMF spokesman, said Camdessus has previously denied plans
to step down. ``He has already denied this several times,'' he said.

Baker suggested nothing has changed since Camdessus' comments Thursday. ``You think
he is going to say something Thursday and then change his mind?'' Baker said.

Camdessus, a former chairman of the European Economic Community and French
finance minister, has been in his current position since 1987.

A Bank of France spokesman said he had ``no comment on the (resignation) rumors,''
which to his knowledge ``have no basis.''

$308.40 now and getting ready for another jump !
<;-)

For what its worth, I would like to suggest that it is very unlikely that the den of thieves and rapists otherwise known as COMEX will ever be alowed to default. Too damaging to public confidence in the markets. Now the Fed may rightly want certain operators in COMEX to suffer a well deserved demise but will only do it in a fashion that is discrete and efficient.

The risk in this game is having too much paper and not enough physical.

Great piece! I wish I had time to sit down and write an essay such as yours, but I don't. So can I borrow it? I think it may be closer to reality than we would care to know. By the way, there are two US shoe companies that I buy from: Mason Shoe and Danner. http://www.masonshoe.com/catalog.html http://www.danner.com

http://www.egroups.com/group/gata/228.html?Big news from GATA.

Thanks, TomCat

Had another Y2K drill out here at the end of the world where the USA literally falls into the sea.

All four lines went dead, went next door, dead, Two miles down, dead. Next, drive 8 miles out of the forest into cell-phone reception territory, nada! North another 4 miles, phones are working, So we had half the exchange area down INCLUDING the land line that feeds the local cell tower. Always thought the cell phone was the backup system, guess not.

Called into Sprint on weekend repair, got someone hundreds of miles away, no record of trouble called in after two hours of service down. I was the first one who kept driving until they found a live line. Before I found it I was having weird thoughts like, somebody nuked Portland, maybe the gold shorts sabotaged the national phone system.

Sprint lady says "we'll put a work order in for service tomorrow." I said "WHAT? You've got half a county down!!" "Well sir, I just enter the data ---yada yada---"

Went home, went nuts, Where's gold? where's silver? What's happening on the Forum?

Drove 15 miles to the top of cascade head where I can pick up the next cell-phone zone and called TomCat and got quotes. Whew!! Phones came back on an hour ago.

Leigh, Goldfly, Angel! Maybe we can do a Y2K song to that old country-western that goes "I miss you already, and your not even gone"

"The link from AEL is the best overall checklist I have found in the last year" ... thanks! there are several other very good ones, more detailed than mine. "While some may consider it a little over the edge" ... yes, well, at the time I composed it (about a year ago) I thought that a shutdown of the national (or large regional) power grid of many weeks or even months duration was possible, and in that case one almost cannot be over-prepared. I no longer think that this is a major possibility worth going far out of one's way to prepare for; though it is still possible.

Spot at 309.10 on Forex at 11:17 PDT
GC9Z sez 309 at 2:19 NY time
while the K Chart sez "oops another down spike error" corrected -- and then 307.75 at 2:20 NY time.
Jump SPOT Jump ! --- WHERE IS Spike ?
<;-)

Good Evening Peter. PDX is still here and in good working order (as we are now the CITY THAT WORKS instead of The City of Roses which we were for so long.) Dec. gold at 308.90 up 3.60.

Have been away from the round table from early August until last Sunday night. WOW what a time to return. Left PDX in early August on our boat for extended cruising in the San Juan Islands, Gulf Islands, and southeast Vancouver Island. Up there after awhile, it really does not matter what day it is. No TV watching, reading newspaper, or Internet. I was truly unplugged. Having Orcas swimming next to your boat is very exciting, but not nearly the elation from last Sunday night & Monday. I am glad to be back to the forum.

THX-1138 � The GPS rollover was a complete non-event for nearly all systems. I have the northeaster 951X integrated into the Robertson AP20 autopilot. A terrific combination. In an electronics store in Victoria BC talked to a very knowledgeable storeowner who advised me this was actually the second rollover. Scratch one millennium disaster.

Sir TownCrier � Have really enjoyed your reports From The Tower.

Lastly ,welcome to all the new contributors. Am amazed at the increase.

Gold now 309.

NorthStar 951X GPS / Chart Plotter

Well written piece. Sometimes taking something to the most extreme possibility makes it easier to comprehend and identify a smaller scale version of the event.

First of all, where would the administrative labor force to foreclose on everything come from. I once joked here, that the big career opportunity of Y2K would be "Repo-Man." Half the creditors would die of old age before they saw a dime from the auctions.

Secondly, such an event would see the "Dogs turning on their masters." Remember those "Suits" who drove out to repossess a farm in South Dakota or thereabouts, maybe 15-20 years ago. The Farmer just upped and shot them. --- Lots of Sheriffs will be needed too.

Some earlier comments on this: from 3/7/99; 20:24:33MDT - Msg ID:3074 (the Y2K contest)

>>>On the personal level, the major item at risk is homes. Most are heavily mortgaged. The most depressing part in Nick Guardio's current newsletter is his statement that most home mortgages have a clause requiring payment-in-full on demand which takes affect if the appraisal value falls below the outstanding loan balance. The specter of banker-landlords receiving their tribute from a nation of tenants is truly gruesome. However the last time there was a great depression, a far smaller amount of the population were home owners. (I believe the current figure is 66%.) Just as Florida and one other state currently allow unlimited home equity to survive bankruptcy, it's not unthinkable that in a financial meltdown there might be a moratorium on principle residence mortgages. Which is the larger voting block � the home owners of the land or the stockholders of the lending institutions? <<
And back on 1/13 and 1/14 I was having a three-way chat with AEL and Turbohawg-----

<<
In a "collapse" scenario, only the providers of a debt moratorium on homes and cars will remain in office! Its the guys holding the paper that will be wiped out.<<<

http://biz.yahoo.com/apf/991003/japan_econ_1.htmlIn early reports, the Tankan was said to have "exceeded analysts' expectations."
In later reports, it was said to be "pretty much in line with our expectations"
http://biz.yahoo.com/rf/991004/bd.html
Does anyone smell a rat?

New kid on the block...been reading the forum for awhile thought I'd join the rank and file. I'm an ex-coin dealer out of Nebraska, and hold physical. Been pretty excited about the upturn in the market. I guess all I have to say, is "About Darn Time". Would like to thank MK for the great articles, he convinced me to stay in the market, I had to quit dealing, no money to be had.

Coin Guy

Must be the spin.
New Tankan still negative, but not quite as negative,
so spin nurses rotate about "improvement".
Poor rat suffering alone, but soon to have company.
Goldsun

Gold's up $9.70 in overnight trading. What a lovely way to wake up on a Monday morning!

I notice that you quoted information from Nick's Guarino's Wall Street Underground. This publication, although it seems a bit "hyped" at times, is fascinating to me. Many here would probably agree with Nicks assesment of the buying opportunity that exists in gold. The letter also states that oil prices will not remain strong over the long term. After reading many of your posts, I hold your thoughts in high esteem. I have grown wary (weary)of promises to deliver, and WSU always has a big one at the close. (I had the five thousand dollars once and thought about the offer, but then I found a guy to trade me gold for my paper.) Would you give an opinion as to the accuracy of this publication?

Welcome to the roundtable. If you have any data or opinion on what happens to the numismatic market during tough times I would like to hear what you have to say.

I used to collect coins. Not for not for profit or investment, although I did ok, but for the love of it. Unfortunately, I did not stay in the hobby long enough to build up a group of dealers that I could trust. I specialized in Silver Dollars from the late 1700s to the early 1800s. I knew that niche well, better than many dealers, and that led me to find that some could not be trusted. Actually more that just some. Too many coins were altered in the back room.

Since one of my ways to enjoy an endevour is develop the friendship and trust of those I deal with I, with some sadness, chose not to continue my love of the coin. These were pre-internet day and I have often thought of returning to this love but using the internet to develop better relationships; like on this forum.

BTW, most of the gold I hold is uncirculated pre-1900 pieces.

Didn't I read that you were under the weather? Here at the Bone home, it's a sad day for all when Bonemomma is down. I hope today finds you feeling much better. Up $9.70 overnight, perhaps a toast with a GOLDEN glass of orange juice would be in order?

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=11435122The gold perma-bear known as Hutch over at SI Gold Price Monitor posted comments there this morning (see link). Since I am not a registered poster there, I beg your indulgence for posting a response here. (Up early here on the west coast... couldn't sleep.)

"The central banks have also agreed not to increase their gold lending arrangements and derivative operations above current levels for the next five years... They never even suggested lowering those levels to 1998, 97, 96, 95 levels. Thus, this is a promise with no depth. If we assume that CB selling, leasing, and derivatives transaction have been at an all time high for the 1999 year, then a promise to go no higher becomes a deception. A falsehood, construction to lead the POG up based solely on ideas, and not based in fundamental or technical reasons. So the triumvir has only created a situation where the benefits of the derivatives and leasing becomes in their favor, and not the investors." HUTCH at SI Gold Price Monitor

Please, Mr. Hutch, let us ponder for a moment, your misinterpretation of the ECB's announcement.

By pledging not to increase their gold lending arrangements for the next five years above current levels, the Europeans are in effect freezing that level, allowing for no more leasing whatsoever. Lowering levels to 98, 97, 96, or 95 levels would imply cancelling leasing agreements already in place, which would be a default of sorts on already agreed-upon arrangements. However, even agreements already in place can only be sustained by rolling them over into new agreements. If this avenue is to be curtailed, the escape valve of leasing to supress the market price is effectly closed off. This is not a question of percentages. It is one of reality.

The market has made the proper interpretation of reality, as it always does. Are you smarter than the market? Those who would have us believe that eventually find themselves in trouble. It happened to Martin Armstrong... it can happen to you if you allow your investments to follow your flawed thought processes.

Beware!

Dec. gold now...$315.00

this from kitco from GATA:

Date: Mon Oct 04 1999 01:21
Winston (Latest from GATA: SA producers to restrict gold supply.) ID#243420:
"Bill disclosed Friday that some shorts are
already defaulting. He has another big scoop
in the second weekend dispatch: South
African gold producers are about to unite to
restrict production and thereby apply the
fatal pressure to the already faltering gold-
leasing business. This will create a bit of
an OPEC for gold."
http://www.egroups.com/group/gata/228.html?

Dec gold. Now $315.50.

Thanks for asking -- it's just a cold. I was sicker yesterday morning, but feel better today, thanks to heavy doses of aspirin and antihistamine. Are you on East Coast time too?

What is the meaning of "a moratorium on a mortgage"?

My brother and I discussed the issue of total market crash, if most people's mortgages became default, what would the banks do? Take the house and rent it out? Wipe out debts and give them the house (maybe if bank went under?) Very difficult subject I think, considering the mass of the problem. It would leave millions in the streets, I doubt they would let that happen.

Squeeze is on!

Pretty dumb, shorting gold right before Y2k.

Spot 313.

All rise for the national anthem (South Africa's):

"Nkosi sikelel' iAfrika"

My song for the group (no translation necessary):

He-he-hahaha-hahaha-hahaha -- ahhhhhh -- WIPE OUT!

Good Morning
The world is attacking us aren't they? (USA)
Can't blame them, though
We're the imperialists.
Deep down, I believe they all would love to see the US take a dive. Those we did not defeat, we rescued, which can leave just as much of a feeling of resentment.

Good morning. Your question on home repossetion is a good one and we do have a precedent as to what the government does in a case such of this. If you remember the great fall of the Savings and Loans just 15 years ago. The government forclosed on homes by the millions. Never "worked with" the home owner to help him through hard times. They foreclosed, put the owner and his family out in the street and then let the home sit empty for years before they even attempted to sell it. By then it had deterioted badly and they sold it for 50% of its earlier value.

The government is not very smart, has no compassion for it's own people but will forgive debt of other nations at the drop of a hat.

Sincerely, The Scot

Thanks for the reply,I would assume this is what would happen but, I would think there would be some other profitable answer to the problem than just letting the house deteriorate. But then again I agree they can be stupid.

Thanks again!

http://www.gold-eagle.com/editorials_99/madhok100499.html
"In the end I want to remind the readers that to defend a Long position taken at $400/oz, you need $400. While to defend a Short position at $400/oz, you need an oz of Gold."

Sunil Madhok
skmoi@emirates.net.ae
United Arab Emirates

5 October 1999

MARKET REPORT (10/4/99): Day Six of the Big Breakout....Gold up another $9 as
we start the week as options traders scramble to cover naked call options. Call option
owners are being kept at abeyance by traders allowing only open "at market" fills -- thus
leaving the advantage to the traders scrambling for cover. But what advantage? The
market's getting away from them, and the sell bulge reflecting an extraordinarily high
volume keeps backing up. High volatility reigns. How long until that market is deemed to
be in crisis mode and trading halted? FWN reports a strong cash London market with lease
rates firming slightly. Long time gold trader Leonard Kaplan declares "It's a bull market!"
The London trade was followed by a strong open in New York with gold soaring to one
and a half year highs. "Rumours abound, even more than usual, about massive hedge fund
short positions,'' Macquarie Equities Metals Analyst Kamal Naqvi via Reuters. "There is
almost equally dramatic talk about the books held by major bullion banks and some gold
producers. Even if these rumours are only partly true, then gold prices will continue to be
volatile for weeks, if not months, to come,'' he added. Providing a real life example of
what happens when a gold market gets squeezed, a Karachi newspaper reported over the
weekend that gold trading has been suspended in the local bullion market after a major
market maker defaulted on forward delivery contracts. The newspaper reports that "In the
meantime, a massive heart attack led to the death of a senior bullion dealer who could not
sustain the shock after suffering heavy losses in forward dealing." The Karachi market is in
chaos with dealers and the public alike scrambling for a dwindling supply of gold.

That's it for now, fellow goldmeisters. Have a good day.

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
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Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
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Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.

mike55 (10/3/99; 21:11:08MDT - Msg ID:15333)
Eagles vs. Phillies
Since I can only get here on a catch-as-catch-can basis, I ask forgiveness if this has been adressed before. I seem to remember a question (discussion?) on US Eagles versus Austrian Philharmonics. The face value of 2000 Schillings at the current exchange rate is about $156 compared to an Eagle at $50. Perhaps face value is a moot point depending on currency fluctuations or devaluations that are difficult to predict. What are the pros/cons of the Eagle versus Philharmonic relative to taxation, reporting
requirements on purchase/sale, etc? I'm clear on the pre-'33 coins, but am thinking I may want to shift my modern bullion mix one way or the other. Comments or suggestions, anyone? Thanks in advance.

Hello all! And a good gold-up morning to you! Good Spot, good Spike! Nice doggies!

I have Dec calls, and Feb calls, and I noticed that this morning according to the NYMEX website, when spot was $314, my Dec 270 call options had a value of $4400 each, and Feb 270 was $4500 each.
Spot hasn't changed all that much, but when I checked back, the quoted options prices had dropped a couple of hundred dollars.
It doesn't seem reasonable that this drop is due to the spot price, since it hasn't changed all that much.
And it doesn't seem that this drop would be due to the decaying time value of the options, since they have a long way to go until expiration, and we are in a bull market.
Can anyone tell me why these quoted options prices actually went down???

Sir, being a European, I feel that would not be (political),
or otherwise correct. I, for one like the US and its people and what it stands/stood for very much and have lots of friends.
No, I think it's more the deterioration of the global hegemony of dollarization, with all its discussed excesses in the (financial/derivative) that is the cause of the present credit and asset bubble. Too many countries have been severely maimed by unscrupolous speculation and manipulation, which this system has, maybe unwittingly at first, afforded to few though major players within the same.

I think ECB's move to curb the carry trades was born from the necessity to return to sounder monetary discipline before the whole system blows up, leaving no one unscathed.

A potential meltdown of the US$ and financial markets would affect all and no one could wish for such an outcome, but we all would wish for a retreat of official interference, manipulation and potentially collusion of markets in the age of cronie casino capitalism.
Keep America great - go gold and enforce fair markets.
Best CB2

One month lease rates for platinum at 40.4%??? Can anyone explain what is happening there and its effects?

Europe did a nice job of pushing up the POG this morning. Any bets on how far the shorts will beat it back down this afternoon in New York? I'll guess $4.80. The Scot

New high for Spot today at 316.30 at 9:15 Pacific time !!! -- XAU is going wild too. WHERE is Spike ? Limit is $75. on the COMEX -- any thoughts of when we could see a limit ?
<;-)

BLASTOFF ! ---- $317.80
<;-)

Spike! What's the matter fella?

Grrrrrrrr....

Spot! What's up boy?

(Knock knock knock)

GRRRRRRRRRrrrrrrrrRRRRRRRR

I wonder who that is? What's wrong with you guys?

Oh, it's Mr. Short.

RRRRRaaarrrrfffff. Grrrrrrrrrrrr. ROOWWWWWFFFF.

Goldfly, I'm warning you. You had better do something about those dooooooooogggggggsss!!!!

Spot! Spike! COME BACK YOU TWO! ....... Eh, well.... ok, .....never mind.

Have fun guys!


Spot 316.90

Elevator Guy - Pure demand & supply, the shorts have been
covering for sure. Demand has been higher near the beginning
of the scessions of late & then drops away a little. Buyers
& sellers can quote what they want . . . pure market
economics.

Within the past few minutes, on a service I subscribe to, I noted that spread between bid and ask was greater than $5.
Never seen this big a spread before. Significance? Volatility indicator?

I have been fortunate to travel internationally more so than the average person. The most profound observation I am left with after my travels is that humanity, fundamentally is pretty much the same everywhere. Too many labels and too much hubris make for bad emotions wherever one might be.

Any surprises in your elections?

I too show a wide $5.25 difference between BID and ASK -- but notice that most all trades are on the sell side! -- This will change and the spread widen when Mr. Short gets tired of treading water and starts to sink.-- GETUM Spot!
<;-)

June 2000 Calls with strike of $400 ...now selling at $900.
Those that purchased these at $30 ... well done!

Spot the dog was resting for a while and now jumped to $317.90
<;-)

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 318.5 319.5 318.5 319.5 +1.5 10/4/99 13:20 319.5 319.0
Gold(CMX) Feb 320.0 320.0 319.6 320.0b +1.5 10/4/99 13:17 320.0 319.4


Dow and Nasdaq were up, but I don't know why?

@SteveHDollar up, yen down, 30 yr. US bond up, G7 currency interventionto weaken yen.Regards, Journeyman

Peter Asher, You wrote,

<<>>
You are a true diplomat. It was very extreme. I had read your previous comments. It was probably your thoughts that triggered my analysis. I read all your posts. they are very helpful. Thanks.

onlychild, you wrote,
<yours, but I don't. So can I borrow it?>>
You are kind to say so. Use it as you wish.

Leigh, you wrote,
<<which want to see humankind subservient to an elitist ruling class. I
believe they've been plotting and working toward this for many years now
and Y2K will be the catalyst that sparks it off.>>>
Good statement. We tend to forget that there people who would enslave us. Your two other points were good also. Thanks.

Clint, thank you for the kind words. Your depection reminds me of this line from "Peter and the Wolf." >> "But what if a wolf DOES come out of the forest, what then?" said Grandfather.<<<

Leigh: Powerful forces in the world have wanted
to see humankind subservient to an elitist ruling class since somone invented the spear and the crown!

Any thoughts on the announcement tomorrow??

Rates up or unchanged? How will either affect the POG.

My feeling is A.G. is damned if he does, and damned if he doesn't. If he raises rates the markets will be hammered, if he does not the dollar continues slide. Not convinced how either will affect the POG.

Thoughts?

Are there still bears in the woods? POG seeems to be steadily rising. What do you think? Is a pullback in the making? Many thanks.

Gold just traded at 322 on the overnight, up 4 bucks.

In regards to Greenspan, I think the market will go down whether he raises rates or not. They had their party today. He'll probably adopt a tightening bias and leave it at that... though he also knows that he's going to have to surprise this market if he wants to get any respect. I for one will have my guns ready to short the dow the split second the announcement is made if he raises.

The markets are not spinning out of control so the rise in POG should be steady. Technicals are still on the strong side and disbelief is still common among economists. There is a strong chance things will hold as the price goes up and Greenspan monetizes eveything in sight. The buying power of the $ is the US' traditional choice for a default mechanism. The banking system is at risk if the $ value is maintained.
If the shorts fall apart at the $355 area, expect extrememe turmoil and the Holzman street price vs paper price to hit the ANOTHER/FOA targets before long. The $ and bonds should fall apart long before this so they are the things to watch.

-Very rhetoric question for most of the forum - don't we still hope, against all reason, that this final battle in the fiat money system will be played out in a way not ending in global financial and economic armageddon?
We all, I do know, hope for the best outcome for all, but we do feel the major powers overplayed their hand and what may be worse are still at it exacerbating the ultimate outcome - that's the real scary thought.
@CM-Hello my friend, I've been the son of a diplomat - even if my posts don't ever suggest that-so I've been a traveller most of my live.
The outcome of our elections, though condemmned internationally, because of right wing overtaking conservatives as 2nd or 3rd runner ups to the social democrats, scaled down to 33%, worst ever, is as I see it a major change in our buerocratic concept of democracy - and even if I personally can't just now conceive the ultimate outcome, I would like to stress that the "right wing kid" Joerg Heider is not a Le Pen, but a popular demagogue, who got his votes from former and "fed up" labor. While I miss a real liberal faction, I do feel our conservative party should take a breather from coalition and rejuvenate - a la' Germany!
The mainstream press just presses on and looks at the loudest voices, claiming we've potentially elected a new Hitler-ridiculous (reminiscent of the Waldheim affair, not doing justice to us at all) people are just fed up with 50 y's of beaurocratic Austrian style of "social partnership" or better proportional representation. Give us a chance at real democracy and we'll take care of any excesses. Trust me, we've had more than learned our lesson some generations ago - now we're in the process of getting up to speed with democracy. Thank you, CM, for your concern - I'll continue as the picture becomes more clear.
As an afterthought - we're talking about a country, which has assimilated 2 million refugees since WWII - 25% of total population in 50 years and I'm kind'a proud of our success!
Best CB2 thank you - and think gold!

Date: Mon Oct 04 1999 18:12
JP (The rising POG is saying that a massive Dow decline is to take place between Oct 15-25.) ID#237237: Copyright � 1999 JP/Kitco Inc. All rights reserved

The financial panic is upon us. We will have US gold backed currency within the next 2 years. A massive depression will follow the Dow decline and will last for a minimum of 5 years. Forget about inflation for many years to come despite the rising CRB. Most of the rise in the CRB is attributable to the recent precious metals advance. A massive decline will start to take place in real estate prices and all commodities in general ( except for gold ) after the Dow debacle.. Next year, short as well as long term interest will collapse as the depression sets in. Gold (with temporary corrections) will continue to rise for at least 5 years.




Date: Mon Oct 04 1999 18:12
SEQUIN (Goldman 's) ID#25171:
Copyright � 1999 SEQUIN/Kitco Inc. All rights reserved
Goldman's Option trader got fired .

You guys can't even start to imagine how much blood there is.

Bullion banks are in panic mode : derivative positions too big to cover , no liquidity , fear about medium size mine defaults because of overhedging and margin calls .

Very bad words in board rooms these days.

Banks hesitate to be the one who pulls the trigger on mines since they could start a cascading default chain reaction.

UBS is dead.


Morgan is sh*tting razor blades but not dead yet .

Morgan stanley disappeared from radar screen.

They NEEEEED Gold to go down .

There is about 1 year production of buy order between 280/295. If these guys start to panic it might get interesting. But too much blood is not always the best you can hope for: Beware of CBs stepping in.

If there are small to medium mines defaulting , we could see contagion on the XAU. So I would prefer an orderly rise.

I know this is too much to ask for and I am a little bit excited. THKS

OVER 180 bids at 3:20 NY time and delayed half a hour ! -- This means that the Dec Gold price is not going to go down!!
Spot the Dog and Spike are trying to rest from the great day chasing Mr. Short, BUT looks as if there are a whole bunch of their BUDS now ready to help them. -- The golden bears have not yet started to break, but they are starting to sweat!!!
<;-)

Though I've never really been a trader - you're one doing you're homework - not only for trading purposes, but in the framework macro-economic, monetary, currency and maybe, most importantly - sentiment indicators. Please keep up your great work, wherever you choose to post on whatever is on your mind - Thank you - CB2

I just saw a trade at 323 in the after-hours access market. Wouldn't it be nice if the 330 level was crossed before the open in New York on Tuesday morning??

321.10 in a big JUMP for Spotty, Spot's younger brother.
<;-)

AND that is with a 15 minute LAG !
Get it while you can, IF you can.
My LOCAL dealer friend sez there is a $10 prem on 1 oz. Eagles over Maple Leaves now.
What is the Street price of that ugly KRand ?
<;-)

KRands aren't ugly. As long as you don't look at the reverse ...

Your post ..."don't we still hope, against all reason, that this final battle in the fiat money system will be played out in a way not ending in global financial and economic armageddon?
We all, I do know, hope for the best outcome for all, but we do feel the major powers overplayed their hand and what may be worse are still at it exacerbating the ultimate outcome - that's the real scary thought."

CB2, I'm glad you made the statement above. All of us on this forum, in our hopes for Gold to go to the moon, know what this will actually mean for the world ecomomy.It will be a pretty ugly situation. Lets hope we can "Win" our gold battle without massive casualities. Good Post !
The Scot

I believe it can be orderly. I refuse to believe in financial armageddon. The puppeteers know the right strings to pull and compromise they will. If the many different worst case scenarios detailed here are played out, then I say good show! Know why? Then it must be the Creator's Will and despite "the sorrows", that's a reason to rejoice

Pat Sajak (sp?) is doing his part.

Just overheard the show on the tube while washing dishes. Yes to all, I am a real renaissance man. One of the prizes offered was, "solid silver and gold bars". No kidding. CM

Thanks. Can you repost your Kitco's over yonder? (here)?

Premiums are typically lower.

I was in a FED Bank this afternoon. All hands will be on deck for the "rollover". Also, there is no more window service. Too bad; here, it is such a beautiful (fiat) bank lobby. Could it be fear of the pitchforks?

Greetings all! Can anyone fill me in on why silver has yet to blast off. I would have thought it would've been by now.
Thanx

Hi guys - It's true that it would be nice to see the back of this funny money system broken with few casualties. It's so nice to have our cake and eat it, too. But it's unlikely to happen that way, I believe. The current system is a win/lose system whereby the the rich get richer at the expense of the rest of the people. I believe there's a larger issue than who dies with the most toys. Is the current system exploiting the natural balance of things to the point of being unstainable? It appears that we may be blessed to break this old win at any cost paradigm, regardless of the cost. Am I willing to suffer the change now in order to provide a better world for my kids and grand kids? Yes. I am. Do I hope it won't be too bad? Yes, I do. Am I optimistic for a soft landing? No. I'm not. As human beings, passengers on space ship Earth, at some point, our integrity must become more important than power hungry egos and our pocket books. Sure, it's a pointedly idealistic belief that we might someday begin to work together. But, what the hell? We've got to believe in something. Right? Best, DD

I checked this afternoon and KRands were $330 and US Eagles were $343. At there prices, you can buy 27 Krands cheaper than 26 Eagles.

When gold hits $10000 per ounce, you will wish you bought those ugly ol' non-politically-correct Krugerrands!

>>>>The puppeteers know the right
strings to pull and compromise they will. <<<

"They" are going to have to deal with the new gold paradigm. They must! It will be a surer path to continued riches for the established power and money brokers to have serfdom chained to inflationary bias than to have us all eating grass. Think about it. The "rents" will be so much greater for them. World events are moving the western economies. Gold calls the tune. I believe we are witnessing history. Why not? The world makes histroy every day. If you discount the FOA/Another storyline, then you are guilty of selective perception. It can happen.

Don't pay attention to the Kitco qoute on silver, Use The other guys!

DD, I know you are right, I was just hoping for the impossible.

Cavan Man, The Lord has us in the palm of His hand.

Sincerely, The Scot

I posted earlier regarding a $5.25 spread on bid/ask for spot. On the night session, the spread is now $7.80!!!! I ask again....significance?

What's going on with Kitco, seems to have unreliable updates? Where else can I go for foreign spot. Heck, what is the spot. Here spot...

Coinguy

There has been much discussed the last few days about which coins to buy. I think Granny started it all. Let me put in my thoughts, if you please.
If worse comes to worse, and Gold is actually bartered on the streets, I believe the "fineness" will play a factor. The 24K coins are going to worth more than the
22k's. Right now we pay a premium for Eagles even though they only have 22k content. I think it is a waste to by anything but 24k. Anyone agree?

IMHO when the spread widens to this amount (+$7) tween the bid and ask -- there are few sellers on the market side. -- I believe that the market maker is required to make a market by stating an offer price and if the market moves too fast he may not be able to cover his own sales.
<;-)

Agree. 24K = more AU.

Which coins?

The Scot
Maple leafs are .9999 fine one ounce gold. 24K.
The KRrands and the Eagles are 1 ounce gold wilt 10% copper alloyed in for hardness and durability. 22K. They have the same number of atoms of Au as the maple leafs.

The spread

I Just looked at livecharts.com and bid is $325.4 while ask is $326.4 a few minutes ago I saw a bid of $325 for 104 contracts! Somebody is buying big time!

www.forex.freeservers.com/main2.htmlSpot the Dog is the fictious "present" price of Gold! There are many reporting boards and in many values other that US$! --- the best one that I have found is at the forex board which is setup for currancy exchange quotes.
BUT if you click GLD= and change the time to MIN and click "request" -- WALLA WALLA bing bang !!
<;-)

Scot,

As far as coins go, I've always viewed my coins the same way I view my stock portfolio. I keep some in the investment grades(MS63 to MS65), I also have purchased a few rarities, and commons as well. I've also bought quite a few common silver and gold pieces(junk silver and gold) intended to use in a barter situation, if the need arises. As far as 22k or 24k, some people say the American eagles will be easily recognized as a "real" gold coin because it's American, I myself don't care. I don't think the price difference is worth the worry. Especially when you're in a rising market. Just be glad you bought in now. Go Spot Go...

http://www.quote.com/livechartscom/Coin Guy, you can see the Sydney market, (I think), trading at
If the window doesnt appear when you click on the link, try typing in the address manually.
When the screen comes up, it will show INDU, the Dow, at todays close. Click in the text field for the symbol name, and type in for example gcz9, to see the December contract.
You can vary the time scale of the chart also.

Where is it? Anybody have a clue? What do the best mids here say?

Gold at $325 is still cheap IMHO.

the spread tween the Dec Future bid and ask AND the spread tween the SPOT the Dog BID and ASK are far different !
<;-)

Thanks for all the help guys, was getting tired of KittyCo...

www.kitco.comDec now...$324.30!!!!

from Trader_Vic [I like these words]:

Date: Mon Oct 04 1999 20:55
trader_vic (NETPI...) ID#316402:
Copyright � 1999 trader_vic/Kitco Inc. All rights reserved
As far as this move is concerned, don't even worry about the oversold condition until gold reaches $525/oz....Until then, we will just be cleaning out the shorts...or shall I say the SHORTS will be cleaning out their own shorts!!! When you consider that the normal level of gold should have been $500/oz if it had not been used as a hedge instrument, it only makes sense that until we reach the INITIAL RELATIVE VALUE OF GOLD we are just in an equalization phase....Once this phase is completed in the next several months, we can then really trade gold as the asset it trully is...It could get really hairy in here as the gold shorts unwind loosing positions and all the others just default on their investments like PEI, there is a financial disaster out there waiting and it is bigger than Y2K..the only difference is that Y2K has more publicity...This disaster is one that those in the know won't tell and will take it to their grave...or their demise!!! Watch gold, it will clear $350/oz with no problems at all and when the ball really starts rolling and the fund managers start to jump in, it will be the most fabulous bull you have ever seen....much better than 1979 & 80....this one has 100 times the power behind it that the 70's did...just think of the inflation in $ that went into the stock market that will flow directly into gold over the next 6 months...and with gold you have the thinest market of any stock issued...that's because THERE IS NO MORE GOLD!!!!

The monthly bollinger is at $335 and guess what is approaching it. If gold hits $350, then it is likely that it will track up the upper bollinger to around $380 or higher. The weekly u.b. was at $280. It is broken. The daily u.b. was at $260 and it is broken. Next goal is $335. Tonight?

CB2 thanks -
Cavan Man thanks for reminding me.

Date: Mon Oct 04 1999 18:56
ORO (@Surfer Mine defaults) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
Long term the mine defaults will only hurt overhedged miners, causing their assets to come to market, where all the golden sharks will come to feast.
So far, not too many medium/larger companies are in trouble. Many may refinance long term hedges given half a chance, even if survival would be a touch and go situation. If SEQUIN has it right, and my data indicate that is an understatement, then there will be a general dump of all miners, then a quick reversal in the unhedged, or lightly hedged survivors. I try to buy only those mines that have no hedges, or mines with hedges covering a small portion of production and having multiple mines ( so that closure of a mine would not be a disaster ) .
Right now I am looking for "goat pasture" gold explorers, open to suggestions. Checked out MYNG, I see a 100% to 200% dilution at the POG $300-$350 range before they produce their first ounce. So at current prices, with intentions and capacity to produce 16000 to 35000 Oz per year at 150 to 250 margins, I'd say that comes to 5-10c present value per share in the current POG range, and if they are very lucky in financing, it might be worth up to 20c. Things get interesting if POG holds over $350. Right now they have weak claims for a large gravel deposit and have to fix their debt as well as financing a mine. The weak claims would prevent an agreement with a major, say PDG/NEM. Maybe a non-distressed medium size producer would take them on.

Date: Mon Oct 04 1999 18:49
SEQUIN (On the other hand , ) ID#25171:
Copyright � 1999 SEQUIN/Kitco Inc. All rights reserved
derivatives books are so screwed that to protect them bulion banks had to buy an aggregated 15 M oz ( this doesn't take into account mine or spec buybacks ) If Gold goes back down , they will have to sell back .
If it goes up again , they will have to buy again : sounds too bad to be true ? It is the principle of gamma minus which I explained here a year ago ( give or take a few months ! )
So why not cut the position ? The problem is that in normal time , it is easy to find liquidity in options to buy 1 to 2 M oz of a strike without moving the market too much . Now , with 100 000 oz you clean the offers and you have to go 2 % vol higher to find the next offer . Since most of the option market makers have open positions in the tens of million of oz , it is just impossible .
The conclusion is that we will have very violent moves up and down with a bias toward the upside since the 100 M oz gorilla is looming around at 290 .
Very sharp pullbacks are possible due to this derivatives positions and most risk managers are waiting for the first defaults in the next 2 months.
You can trust banks to try to cover it up but since I have the best of info , I will make sure that you know about it .
Look at GCZ9 now , and smile . ( up 4 to 322 as I write this piece )
THKS

Date: Mon Oct 04 1999 18:12
SEQUIN (Goldman 's) ID#25171:
Copyright � 1999 SEQUIN/Kitco Inc. All rights reserved
Option trader got fired .
You guys can't even start to imagine how much blood there is .
Bullion banks are in panic mode : derivative positions too big to cover , no liquidity , fear about medium size mine defaults because of overhedging and margin calls .
Very bad words in board rooms these days.
Banks hesitate to be the one who pulls the trigger on mines since they could start a cascading default chain reaction.
UBS is dead.
Goldman is dead.
Morgan is sh*tting razor blades but not dead yet .
Morgan stanley disappeared from radar screen.
They NEEEEED Gold to go down .
There is about 1 year production of buy order between 280 / 295
If these guys start to panic it might get interesting . But too much blood is not always the best you can hope for : Beware of CBs stepping in .
If there are small to medium mines defaulting , we could see contagion on the XAU.
So I would prefer an orderly rise .
I know this is too much to ask for and I am a little bit excited.
THKS




Date: Mon Oct 04 1999 19:33
Silverbaron (Did the Fed bail out Goldman Sux?) ID#290456:

This one especially for SEQUIN "Goldman is dead"...

Gold producers forced to rejig hedge books

http://196.36.119.130/miningwebgold.nsf/Current/422567D9004530DF4225680000724BF6?OpenDocument



Date: Mon Oct 04 1999 21:18
ORO (@EJ @Old Gold) ID#71231:
EJ - exctically one second too late. Austrians still have to come up with a less painful transition scheme.

Old Gold - If economists saw this, why didn't they suggest some way to get arround it? Perhaps the Emperors of Rome wanted not to hear of the future belittlement of their pricipality?


Date: Mon Oct 04 1999 19:40
OLD GOLD (How the US has Benefitted from the Global Crisis) ID#242325:
Copyright � 1999 OLD GOLD/Kitco Inc. All rights reserved
Excerps from a recent academic study on the globasl financial system. After reading this I wonder why the European CBs waited so long to pull the plug on the gold carry trade.



There is no such grassroots activity in the U.S. as yet. Partly, this may
reflect the fact that the U.S. economy has thus far benefited in various
ways from the global crisis. These include seignorage profits. Over
two-thirds of U.S. currency is held outside the United States. Some is drug money, but mainly it's the increasing use of the dollar as a store of value by middle-income households upset by the instability of their local currency. The difference between the face value of the bills and the minor cost of printing them, adds up to annual seignorage profits of about 0.5% of GDP.

Another boon to the U.S. economy has been the flight to U.S. bonds by
foreign investors, whose share of all private holdings of U.S. bonds rose
from 21% at the beginning of 1995 to 38% at the end of 1998. In addition,
developing countries, who in 1997 already held 55% of global official
reserves--mainly U.S. treasury notes--though transacting only 25% of world
trade, have been desperately trying to regain the confidence of the
financial markets by increasing their dollar reserves. This has meant
curtailing imports and emphasizing exports, which has severely depressed
world prices for their chief exports: primary goods and labor-intensive
manufactures. Thus the U.S. has been able to increase its foreign
liabilities to cover its rapidly growing trade deficit without having to
raise interest rates, as the rest of the world has to do, in order to get
foreigners to hold its currency and securities.

The dark side is that U.S. residents whose income and wealth derives from
owning financial assets or who are employed in skilled jobs in the
nontraded goods sector have garnered the lion's share of the benefits. In
contrast, workers in the exporting and import-competing industries have
lost high-paid jobs and have had to migrate to lower wage, service sector
jobs. Feeling their profits squeezed by unusually low prices, agriculture,
mining, steel, and other material producing industries with political clout
are joining with labor in demanding import protection. Washington's attempt
to ride both its high horses--free trade and free capital mobility--is
becoming politically precarious.


Date: Mon Oct 04 1999 19:34
EJ (ORO - yessir) ID#23066:
Except for that little problem in the 1970s, the scheme has worked pretty well. Problem is, all the MIT and Harvard educated technocrats running the monetary policies of the world's largest nations are all in agreement as to how the global economy ought to work. As a bonus, they can all swap stories about chugging scorpion bowls at the Hong Kong in Harvard Square. But there are a few fruitcakes at MIT and Harvard who are gaining some acclaim. They are bringing up the arguments of the Austrian school.

Just in time.
-EJ

Date: Mon Oct 04 1999 19:11
ORO (@EJ - Old words from the BIS) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
The thing they thought they could do, was to make the decision, on the part of the world as a whole, as to what is money.
They discovered, the hard and embarassing way, that the markets decide what is money, not CBs or governments. What success they may have in pushing the paper currencies over the PMs requires constant work in an environment of fluctuating debt loads and exchange rates. Their opinions are allways wrong so that eventually, somewhere, they end up introducing a large distortion in the markets/economy, ending with a bubble like today's stocks, accompanied by artificial depression, as in commodities and gold. Their control one day is the best indicator of their loosing it on the next day, when their control mechanism backfires.

Date: Mon Oct 04 1999 05:11
ORO (@Captain Kirk - How the worthless is valued) ID#71231:
Copyright � 1999 ORO All rights reserved
It is no secret that the best way to build demand for something is to make it someone's obligation. No better way to do that than through debt and taxes. Debt, in particular, is great because it has the stamp of commitment from the debtor, apparently given out of his own good will.
Thus the token has value because the debtors owe it. Say I found an enormous cave full of bats, and I had a banking lisence, if my bank were to loan you clumps of bat droppings at 1% interest rates and there was a farmer willing to take bat droppings for corn because it makes for a good fertilizer, then that would quickly become the cheapest fertilizer and everyone would borrow it. Then, as the first interest payments were coming due I raise interest rates to 20% and demand the return of my bat droppings or that you refinance the interest payments you owe. Very soon, bat droppings will have become very precious and many a farmer will kick himself for using dear bat dung for fertilizer. There would be great explorations for bat caves. Bat farms would eventually be built and the purchasing power of my bat dung hoard would rise as long as not to many went into receivership and interest rates kept ahead of bat dung production, lending and findings there would allways be more demand for bat dung than supply.
But what would happen if guano of an extinct albatros were to be offered at a 1% rate by the bank of some enterprising pacific island? Though their guano would be extremely cheap, their great enterprise, hard work, and fierce resistance to imports would cause them a great accumulation of my bat droppings. My borrowers would be at a loss to return any of the albatros guano borrowed. When the island demanded the return of its guano, it would cause a great devaluation of my bat droppings, because of the great ammount of guano debt owed, the stockpile of bat droppings everywhere and that would be suddenly seeking exchange for guano. There would be a great surge in prices quoted in bat dung. I would not raise interest rates out of fear of further depressing the economy of the world, and exacerbating the rate of bankruptcy already caused by guano debt. Since my bat dung currency is dependent upon demand for debt settlement and bankruptcy eliminates debt, future demand for bat dung would suffer

The US has trapped the world in $ debt in the late 70s and again in the early 90s. The mechanism is well known and simple. You lower interest rates and people borrow if there is something to buy with the currency you lend. When foreigners, particularly Emerging Market nations borrow, they pay a significant premium to US interest rates. Essentially the rates they pay are higher for the simple reason that they are not capable of printing $. Just as the credit card company is best served by your maintenance of a steady or growing balance as long as you are capable of making a certain minimal payment, so does the EM nation emerge from independence into debt and must maintain payments on it. This makes for the international demand for $ that the EMs must supply. Hence the demand for $ is maintained as well as its value.
The great EM debt buildup occurred in the 70s as oil, then newly made tradable exclusively in $ ( 1969 ) , made necessary the export of goods to the US in order to obtain those $. Special "development" loans from the Wrold Bank, the IMF, and commercial banks backed by US government guarantees were made available at interest rates lower than the US inflation rate. All in the interest of creating international demand for $.
Upon the beginning of Paul Volcker's taking of the reigns of the Fed, the interest rates were hiked skywards and many EM nations suffered steep currency devaluations and debt defaults that made their $ debt much more difficult to service. As a result, much of the world's supply of goods and services became cheaper for the US consumer and the US economy became the mock economy that it is today. $ supply became the more difficult, whereas goods were made plentiful for those supplying $.
Today, the Swiss Franc, Yen, Euro and gold, the latter in particular.

Is it not obvious that the value of money is made out of the debt burden of its debtor's? Is it not obvious that the currency game has been set up against the $ on all fronts, but particularly gold?

Great pieces explaining different aspect of this in clear stories are to be found in Dr. Paul Hein's articles.
A Primer On Money
http://www.golden-eagle.com/editorials_98/hein031798.html
The T.Heft Plantation
http://www.golden-eagle.com/gold_digest_98/hein110298.html

http://www.golden-eagle.com/gold_digest_99/hein070899.html
Money, Lies, and Adding-Machine Tape
http://www.golden-eagle.com/gold_digest_99/hein060199.html

Date: Mon Oct 04 1999 02:27
Captain_Kirk (africanminer@gold as money) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved


Supposedly around 1975, the U.S. congress suspended the FDR 1933 executive type order which suspended ( anulled? ) all gold contracts. Supposedly, today, one can write a contract for payment in gold. However, any decrease in the gold price of the post-1933 dollar is viewed as a "profit" for post-1933 dollar tax purposes for the one exchanging gold for goods or for post-1933 dollars. That is, you might have to find some post-1933 dollars to pay out as Federal taxes if you realize a "gain" from the transaction. I guess the Federals want you to track each and every piece of gold, assign a post-1933 dollar "price" to it, and compare this original "price" with the final "price" when you exchange that particular piece of gold for something. If you exchange hard assets for the original piece of gold ( never use post-1933 dollars ) , then somehow, somebody has to determine the "fair market value" in post-1933 dollars for the original transaction. Ect., Ect. The whole scheme is quite confusing to me, and it is entirely unclear what they want you to do. I suppose the Federals don't won't you using gold for money, they want you to use their "primo" post-1933 dollars. Of course, I have yet to figure out just what one of these post-1933 dollars is for sure. I guess it is what they tell you it is. But they won't actually tell you what it is. It gets really confusing to me. I would prefer to stick with an ounce of this or a pound of that, which would make things a lot simpler, or so it seems to me.

Date: Mon Oct 04 1999 18:05
ORO (Technicals - SJ Kaplan) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
I tried to move out a big chunk of my position too ( hoping to unload 1/3-1/2 ) , just as Kaplan was, with an eye to immediately reenter on the pullback. I was too slow and have too many positions, by the time I had enough limit orders in for sale ( I do classic TA to determine targets and use oscilators to time - the swings were just too quick and I could not keep up with the analyssis ) , the pullback was well underway, managed to get out of DROOY at 2.5, and reentered at 2.0.
Got out of 1/3 of my CAU at 9/16 and tried to get a fill at 7/16 and 3/8, which didn't happen ( yet-and the chart shows it may not happen at all ) .

Gold - at POG over 315 we are hovering above the old resistance. Breaking above the 324 mark ( bid ) or 329 ( ask ) should push up to the 340/350 area rather quickly, leaving $355 as the next intermediate term target. Gold is enjoying a combination of attention and disbelief, which is rather bullish.

XAU - A break over 89 and especially 92, should easilly lead to 104-105, and the XAU should then continue to about 120 at the vicinity of $350.

If the market does not fall appart as it did in Karachi, the outlook for gold shares and futures is good. If not, the gold markets will seize up and your physical will be the only thing holding value in the markets.

Recent actions by the SA miners to limit production seems to indicate their belief that the markets are not going to fall apart. We shall watch carefully.

Nasdaq- does anyone else see significance in the shoulder line not being broken on the Nasdaq composite's daily chart head and shoulders ( 1 month ) ?
Note that the formation could be a flag ( 2 months ) , as part of a steep cup and saucer, C&S ( 3 months ) .
If the shoulder line at 2820 is broken upwards convincingly, then the flag and C&S would play in to give upside targets of 3100 and 3300, respectively.
If the Neck line support under 2700 is broken, then 2500 is a good target downside, followed by a 2000-2100 downside target for the double top formation of the last 6 months.
Oscilators indicate this up move in the Nasdaq is for real but should fizzle and bring back the negative trend as an oscilator lower high.

The bearish scenario is more in line with the S&P500 H&S so long as the SP500 ( cash ) remains below 1380. A reversal at 1310-1330 tomorrow is probably has the most negative implications.

If the VIX drops to 23 or less, I would consider this rally weak and expect a quick reversal downwards at or just after options expiration.

http://www.egroups.com/group/gata/230.html?John Crudele's column
in Monday's NY Post.

http://www.egroups.com/group/gata/230.html?

http://www.egroups.com/group/gata/230.html?John Crudele's Monday column.

No, I'm on Rocky Mountain Time. No traffic or streetlights here. Sometimes the antelope come in the yard and the dog barks. Then I rise with the east coast. Bloomberg is good TV at 04:00. Glad you're better.

www.kitco.comHI ALL, WHAT A DAY/NIGHT
(ANGEL) Oct 04, 20:27

Bigdog thought I would go with DROOY ,HARMONY, and DAY, meeting with broker tomorrow I know they've had quite a run up but I think this has just started. I couldn't get any options, they're still not taking any limit orders, its strange to watch the screen and see people being skided, Jesse James never did so well. CNBC actually did an interview with a woman from one of the big banks ( sorry I didn't catch the names I came in on the middle) she actually talked about the hedgers problems and admitted they weren't clear yet. She looked as if she swallowed a pickle the whole time. By the way has anyone heard any more on the problems at the comex ? I heard they had thousands of orders hanging out unable to be filled.


Le Metropole members,

At the moment, the price of gold is trying to take out
the critical $315 area. If it can close above $315 spot
look out. One month lease rates are over 5%. Bullion
dealers are fealing great stress.

"Left Flank" on a roll today. This is the time
to keep the pressure on the shorts. Pay back time!

This just in:

THE FIX WAS IN: BRITS ROLLED ON GOLD
By John Crudele

New York Post
October 4, 1999


THE price of gold soared last week after a number
of Central Banks said they won't unload extra gold
onto the open market for the next five years. The
precious metal jumped to $329 an ounce, up almost
30 percent.

We outsiders will probably never know what prompted
the statement by the 15 governments. But it is very
interesting that an outfit called the Gold Anti-Trust
Action Committee, headed by former pro footballer
Bill Murphy, recently hired lawyers in Britain and
enlisted the help of Parliamentary members to find
out if the price of the precious metal was being
purposely kept down.

Why England? Because the Bank of England announced
last May that it was going to sell tons of gold on
the open market. Whenever there's a big seller like
that it obviously keeps the price down - whether
it's gold or dog biscuits.

"It just raised the whole issue of what was going
on. It's real simple," said Murphy. "The powers
that be went to the English government and said
we can't let gold go above $290."

That, of course, isn't the way markets are supposed
to work. So Murphy's group - headquartered down in
Houston but reaching farther through an website -
pestered members of Parliament to bring up the
gold sale for debate, which occurred this past June.

Senator Phil Gramm, chairman of the U.S. Senate
Banking Committee, got a copy of the Parliament
debate in July. Was Murphy the one who started the
ball rolling that eventally caused the 15 banks to
announce that they were laying off gold? We'll never
know. But it's as good a guess as any right now.

It looks as if someone manipulated gold prices again
last week. Despite being at $329 an ounce in the early
part of last week, gold closed at just under $300 an
ounce on Thursday. The strike price on gold futures
contracts just happens to be $300 an ounce. The very
next day gold went back up to around $311 an ounce. End


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Le Metropole members,

Yes, the "Left Flank" continues to gain ground.
Great coverage from savvy South African journalist,
Jonathon Rosenthal.

>From Business Day, Cape Times, October 1st, 1999.

INSIDE MINING - Jonathan Rosenthal

Martin Armstrong the bear is deep in the woods
Who is Martin Armstrong, what is Princeton Economics
International and what does it matter anyhow? These
are probably normal and healthy responses in the
colonies when we learn that another US hedge fund
manager is up on fraud charges.

So what if this one-time financial guru and darling
of the market took about $1 billion from Japanese
investors and now has about $46 million left in
the bank. So what if he gave his depositors false
accounts and now has three regulatory agencies
from two countries baying for his blood.

In the new economic order hedge funds going belly up
in the US are almost as common as cellphone thefts
down here.Except that quite a few prominent people in
the gold market are convinced that Armstrong was
really short on gold. Depending on who you ask he
was short anything from 300 tons to 800 tons. And
some believe that he sold short at about the $260
to $265 mark and has incurred further hair-raising
paper losses of $30 an ounce over the past few weeks.

And if Armstrong really was that short of gold, a
point Princeton Economics denied in a statement it
released last week, it could have profound
implications for the gold price. The court-appointed
managers now trying to salvage his fund could be
forced to cover the position through buying up 300
to 800 tons in an ever-tightening market.

Brett Kebble, the deputy chairman of JCI Gold, said
he believed Armstrong had run up a short position
of 800 tons."Martin Armstrong has been bearish about
gold and has been writing furiously about what a
terrible investment it is. He has been short on
gold for some time," Kebble said.

The Gold Anti-Trust Action Committee, a campaigning
organisation that argues the gold price has been
the victim of massive manipulation by powerful
financial interests, believed Armstrong had borrowed
or was short to the tune of 746 tons.

Others suggested that while Armstrong was likely to
have gone short, as he repeatedly wrote opinion
pieces and argued that the gold price was likely
to fall to $200 an ounce, they found it hard to
believe that his short position could be so large.

Garry Mead, the head of reasearch at the World Gold
Council, said he would be surprised to find that
Armstrong's fund had run up a position of that size.

Michael Coulson, head of mining research at Paribas in
London, said he would not be surprised to find
Armstrong short but suggested that a position of no
more than 300 tons was more realistic.

The US Commodities Futures Trading Commission, one of
three watchdog bodies that filed legal action against
Armstrong, refused to comment on his position.
The Securities Exchange Commission was more helpful
but had no idea what positions he might have taken
in the commodities market.

The haggle about the size of Armstrong's position
is not simply an esoteric search for truth, but could
play a large role in determining how far the rally
in the gold price could go.

Gold Fields Mineral Services (GFMS), the commodities
research group, estimates that the total size of
the net speculative short position in the market
is probably not much more than 400 or 500 tons.
That's not counting the several thousand tons of
gold that producers have sold forward. GFMS admits
that if the short position is significantly larger
than it believes it to be, then gold could rally to
$400 or even $500 an ounce.

If Armstrong is indeed short of gold, even by only
300 tons, then it implies that the GFMS figures
underestimate the short position hanging over the
market. This then opens the door to some pretty
wild assumptions as to the size of the total position.
Kebble believes it could be as large as 4,000 tons,
which implies a large number of funds are in a tight
spot right now.

If that is the case then there will simply not be
enough gold avilable on the physical market to
cover those positions. Huge hedge funds would be
unable to meet their margin calls as the price rises.

The ensuing crisis would make the collapse of Long
Term Capital Management look like a walk in the park.

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

Date: Mon Oct 04 1999 19:11
ORO (@EJ - Old words from the BIS) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
The thing they thought they could do, was to make the decision, on the part of the world as a whole, as to what is money.
They discovered, the hard and embarassing way, that the markets decide what is money, not CBs or governments. What success they may have in pushing the paper currencies over the PMs requires constant work in an environment of fluctuating debt loads and exchange rates. Their opinions are allways wrong so that eventually, somewhere, they end up introducing a large distortion in the markets/economy, ending with a bubble like today's stocks, accompanied by artificial depression, as in commodities and gold. Their control one day is the best indicator of their loosing it on the next day, when their control mechanism backfires.

and I see ORO and a few of us others are sharing the wealth (info):

Date: Mon Oct 04 1999 19:01
NewPhys (Something Nasty this way comes!) ID#392177:
Copyright � 1999 NewPhys/Kitco Inc. All rights reserved
JP: I regretfully think you are right. This rapid a rise in the price of gold is unprecedented. The equity markets will continue along for some time, blissfully ignorant of the damage being done to the investment banking sector. Shockwaves will eventually pass through the rest of the world's economy, unless the CB's step in and sell gold. But -- what concessions would the US have to make for the European CB's to do this?
It will be interesting to see what happens to the US dollar, and US interest rates. Will we have a warning shot across the bow like we did in 1987, when the US dollar dropped more than 5% in a few days? I am beginning to suspect things could evolve very quickly. The 'information era' -- the 'awakening' of the net appears to have accelerated time. Or, at least the nonlinear events. I'll bet there are some Rothschilds who are watching with glee at the capitulation of the US -- goldwise, that is. Eventually the BIS will step in. For a price.

Rember the Bill Murphy rumor of the SA mines announcing they would limit production. Was that the announcement or was that the rumor? If it was the rumor then the SWHTF when the rumor comes out because the ECB announcement knocked gold up...what...$30? The limit on production announcement could have an even more exponential affect, eh?

www.gold-eagle.comfrom YGM:

(YGM) Oct 04, 19:45

Remember there's still a dark side in the mix. If you don't think Bankers are worried study all the press releases at the B.I.S. site. I have for along time and it
comes down to this---- They are preparing for----
---Bank defaults
---Hedge fund collapses
---Credit and debt squeezes
---Bank cash runs etc etc
***If you read between the lines and all the double talk the future of PAPER after Y2K looks pretty grim. Want to venture a guess as to how much Gold the BIS and other Central Banks have accumulated over the years that they've let the many Gold borrowers and shorters run wild? Remember CBs' are where the richest and most powerful place their bets and we all know he who has the most Gold makes the rules. Want to guess how many defaults there will be soon on Gold deliveries and futures contracts. I don't but it will be mind boggling if
indeed there are 10-14000 tonnes sold short!!!!!
Anyway I now also own alot of paper but I'm only counting on my physical metal while the eggs lay unhatched. Paper is only good for firestarter til it's turned into Gold!!!--YGM.

nttp://www.bis.org/home.htm

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....

What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.

What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.

People who want to see the US take a dive have strange thought patterns, I've always said. It's impossible to defend idiots like ClintonRubinGreenspan, but nothing is easier than defending the American Constitution, in it's original intent and form. Only an envious liberal would deny the genius that allowed the creation of the free markets we enjoy, although lately some havn't been all that "free'.
Here in Canada, US bashing is second only to hockey in terms of recreation. I find it pathetic and sad.

What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.

Don't confuse the GPS calendar rollover with a Y2K event, the two are very different. As an analogy, the GPS rollover is more like a preprogrammed rollover from 12-31-99 to 1-1-(19)00. It's "calendar" never leaves it's present "century", and just continues in a time loop. It also has nothing to do with a "two digit" year or a "four digit" year.
Your boat: are you downloading the web off SSB, or Comsat?

cant seem to download todays discustion

Don't confuse the GPS calendar rollover with a Y2K event, the two are very different. As an analogy, the GPS rollover is more like a preprogrammed rollover from 12-31-99 to 1-1-(19)00. It's "calendar" never leaves it's present "century", and just continues in a time loop. It also has nothing to do with a "two digit" year or a "four digit" year.
Your boat: are you downloading the web off SSB, or Comsat?

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....

GATA warning about the POSSIBILITY of imminent intervention by the Fed to save the gold shorts.

GATA warning about the POSSIBILITY of imminent intervention by the Fed to save the gold shorts.

Spot $330.30!!!!!

Two-standard deviations or so either side of the price that depending on the measurement has a propensity to watch the underlying security trade within the bands whereby they go from one to the other with a fair degree of regularity. However, when a stock or security or gold in this case approaches then breaks through a new level is usually attained after which the in band up and down cyclicals recommence in earnest. We are see a rally of rallies in gold right now and the approachment and break out of the bollingers is just another indicator that the rally is a hot one.

Me thinks the charts look ready for a breakout...me thinks. Mind the Gap.

Invented by John Bollinger (www.equitytrader.com).
The bands above and below the average over a period, usually 20 days on a dayly chart.
Upper band = average + n Standard deviations
Lower band = average - n Standard deviations
n usually taken as 2
Easy to do on spread sheets.

Usage:
Breakouts:
Upper band break out after a steady market is a statistically significant event indicating that the new trend (in the direction of the breakout) is underway. As in "a gold market not as before"
Temporary spike tops and bottoms occur when the band is broken in the direction of the trend in a "blowoff" vertical fashion. The temporary top is usually arround the same distance away from the upper band as the upper band is away from the average.

Trending: A powerful bull trend appeats as prices moving along the upper band. A powerfull bear trend appears as prices moving along the botom band.

Reversal: Spike tops as above, round tops are seen as a reversal between the bands, above the average but below the upper band.

Volatility: The width of the bands relative to the price level is an indication of volatility (usually measured as the standard deviation). Also the narrowing of the bands (low volatility) is commonly a precursor to high volatility. Thus a very narrow BB is an indication of a large move ahead.
Narrow volatility and the spike are the strongest/most reliable indicators. Breakouts can be misleading, with no followthrough.

http://www.thestreet.com/comment/taskmaster/789110.htmlTonight is lookin' good...POG spot at 329.5 and no down-side on Kitco charts.

Scot, RossL, and Coinguy, Yes Krugers are nice design, but the color is butt-ugly. Personally I buy mapleleafs. Even Eagles pale in comparison. Sorry, but I prefer the brilliance of 24K as opposed to the low-budget imitations, and I'm US citizen, so patriotism doesn't play with me.

Interesting article on the street.com about short positions in Au. The above link should get you there, if not, then search the site.

Megatron, as John Candy (who was canadian) said "Canada? isn't that the 51st state?"

alls well zianet has been touch and go in southern NM

Well we seem to be going parabolic upon opening in the Hongkong market. Lessee here... 100 mil oz of 390 calls at say spot at 340, say, tomorrow morning... how many of those were naked did you say?? :o

If Al does not shoot this thing down first thing tomorrow start worrying about a more real crises brewing somewhere else, maybe related maybe not...

Sorry, I guess you need a trial membership for the link that I posted. Anyway, Megatron...the J. Candy quote was from the movie "Canadian Bacon". Also the greatest put-down of Canada was about the beer, but I digress. Personally I like Moosehead.

The overall content of the article on the link posted was that of several analysts are beginning to seriously believe the rumors of short positions, and one claims that LTCM really was short 300+ tons Au, irregargless of their (LTCM)denials. The consensus is that there is really at least an overall 4000 ton short position, and possibly greater.

"Shorts" in American could be similar to "knickers" in English.

"When I received the Nobel Prize, the only big lump sum of money I have ever seen, I had to do something with it. The easiest way to drop this hot potato was to invest it, to buy shares. I knew that World War II was coming and I was afraid that if I had shares which rise in case of war, I would wish for war. So I asked my agent to buy shares which go down in the event of war. This he did. I lost my money and saved my soul."

Albert Szent-Gyorgyi

ARE YOU GOING TO TELL US ABOUT THIS, OR ARE YOU TRYING TO KEEP US UP ALL NIGHT ? ? ?

Are you from Ruidoso? My father is a builder there and gets his net access through zianet as well.
TO ALL: WHAT'S WITH SILVER?????!!!!!!!!!!!!

"Where have all the KITCO posters gone?
Long time passing
Where have all the KITCO posters gone?
Long time ago"

All the negative gold hypesters, from Disney to Jims to EB to LGB to Jeil to Selby...they don't seem to be posting much lately over at that forum.

Amazing what a vertical gold rush can do to those who bet against the phenomenon or refused to recognize the initial power of its manifestation.

Does it have legs?

Hmmmmm, well powerful forces are sure to intervene and oppose the rally. The big question is: when?

My own pet theory is this: I think that the general market (stocks and bonds) must be taken down or else various sectoral inflationary explosions will be enormous. You can only fudge the economic stats for so long, but at a certain point, reality slaps you in the face. So, I tend to believe that this little gold rush is sanctioned, if not encouraged, by Greenspan and gang. They need to raise interest rates to stem sectoral inflation and protect the Dollar, and gold's current upspike serves to validate an interest rate hike.

At the same time, Big Money needs a repository of safety and since gold is held by such a small percentage of the population, then gold should become that favored repository for the wealthy. Over time, maybe in another several months, the average investor will begin to dip his toes into the gold market. However, judging from my own empirical observations, the average investor still has little to no clue what is going on with precious metals today. The mainstream media has ensured that this gold verticality is occurring without any ballyhoo or great publicity.

Until the small investor gets tuned in, then it's all "wall of worry" stuff, and there will be many gold bears who will have their asses handed to them as they continuously try and pick a top on the developing gold mania.

As for myself, well, I continue to stay away from gold for the most part, waiting to see the BUY volumes escalate to a point indicating enough populist BUY pressure to overcome any interventionist efforts by the major central banks.

For those who worry about the disastrous effects to certain gold shorting bullion banks...and for those who figure Fed intervention is certain to preclude this problem, well, I am doubtful and cynical (as usual). Why? Because I think there are likely powerful, relatively healthy investment firms with great influence at the Fed and they would eagerly greet a debacle amongst various gold shorting bullion banks so that they can swoop in and pick up the pieces for pennies on the dollar -- No different than the game hedged gold miners played as they picked up the remains of collapsed unhedged gold producers over the past few years.

In conclusion, I believe that the average investor has been brainwashed to believe that gold has been one of history's most severely underperforming assets. So until gold can breach 800 an ounce (its Carter Era high point), then anti-gold propagandists can continue to note its inability to rise above its 20 year old price vs. stocks that are far ahead of their 20 year old prices. The anti-gold crowd can continue support the idea that gold is a "forever underperformer" vs. paper assets.

When gold breaks 800, then and only then, will I feel notably emboldened to get into gold in a big way. That should be the populist trigger where ALL anti-gold propaganda no longer holds water nor has any notable effect.
Gold finally PERFORMS above 800, and it should move to 2000 or higher (IF it can ever get there).

We have a long way to go before that happens.

Thanks

F*

I have never seen anything like the relentless nature of this up move since mid august of 1982 when as a young portfolio manager with too much cash I watched an exploding stock market beginning lift off from the 770 on the DOW level where it had been range bound since 1968. It took me several months and a few kicks in the pants from older portfolio managers to realize that things had changed. I had been surviving by selling every rise and waiting for the market to come back down as it always had for the few years I had been in the business. This was different-this was a bull market. And as on of the old guys snarled at me "you don't trade stocks in a bull market you idiot you own them" I never did like that guy but it was very good advice. Well gentlemen we are in a bull market and one that is only days old. I pray I have the brains and guts to "own 'em" this time because I'm getting pretty old and there may not be many more chances to be in at the beginning of a full bull cycle.

http://www.egroups.com/group/gata/232.html?Includes latest intelligence
from GATA Chairman Bill "Midas" Murphy.

Conseco Unit Loses Court Fight, Must Pay Iowa Rent in Gold


Washington, Oct. 4 ( Bloomberg ) -- A unit of Conseco Inc. failed
to
overturn a court order that increased its rent on a Des Moines, Iowa,
office
building by about 1,500 percent -- and required payment in gold coins.

Siding with a family of modern-day prospectors, the U.S. Supreme
Court
today rejected an appeal by Conseco Annuity Assurance Co. The decision
leaves intact a lower court order to pay $1.8 million in back rent, plus
about
$370,000 a year until 2016, on the Des Moines Building.

Today's action ends an unusual legal battle that saw the building
owners, descendants of businessman John Trostel, invoke a World War
I-era
lease provision letting them demand lease payments in gold. Conseco, an
insurer and
consumer lender based in Carmel, Indiana, argued unsuccessfully that the

provision long ago had ceased to have any legal significance.

Conseco predicted in court papers that the lower-court ruling will
``ignite a modern-day gold rush'' that could benefit landlords with
similar
leases.

When the 99-year lease was signed in 1917, gold clauses were common

contractual provisions that protected property owners against
fluctuations
in the value of the dollar. Congress and President Franklin D. Roosevelt
banned gold
clauses in 1933 as part of their efforts to devalue the dollar and
inflate
prices.

Revised Law

In 1977 Congress changed the law so that new leases could include
gold
clauses. Although that law by itself didn't affect the Des Moines
Building
gold clause, the Trostel family said the transfer of the contract to
Conseco
Annuity's corporate predecessor, American Life & Casualty Insurance Co.,

created a new lease and revived the gold provision.

The St. Louis-based 8th U.S. Circuit Court of Appeals agreed,
saying
Conseco had to pay its rent in gold. A federal trial judge then
concluded
that the company owed almost 6,000 troy ounces in back rent and almost
100
ounces per month until the lease expires. At current gold prices, the
annual
rent will be more than 15 times the $23,000 paid until 1993.

At the Supreme Court, Conseco argued unsuccessfully that the
appeals
court misconstrued the 1977 law. Today's decision marks the third time
the
nation's top tribunal has reviewed an appeal by Conseco on various
issues in the
case.

Trostel family lawyer Jim Doran said his clients probably won't
demand
that Conseco actually deliver gold coins. ``As a matter of negotiation,
we
would probably agree to a cash equivalent,'' he said.

Conseco, based in Carmel, Indiana, acquired American Life in 1996
and
moved the unit's headquarters out of Des Moines. Much of the building is
now
vacant.

The case is Conseco Annuity Assurance v. Trostel, 98-1796.

Oct/04/1999 10:15

( C ) Copyright 1999 Bloomberg L.P.



Any redistribution of Bloomberg content, including by framing or
similar means, is expressly prohibited without the prior written consent
of
Bloomberg L.P. Any reference to the material must be properly
attributed to Bloomberg
News.

Got that off of Kitco.

By the way, how would someone go about inserting a gold clause into a house or car sale?
And if you actually had someoen pay you gold what would be the reporting requirements?
Do you report it using the coin face value (US Eagles $50) or spot price?

http://www.egroups.com/group/gata/233.html?The gold wildfire sweeps the world.

It sounds, to me, like sibling rivalry. Little brother is tired of getting picked on by big brother, and worse, sometimes even having to wear his handme downs! So little brother takes small revenges whenever he can. Nothing serious. Big brother knows it's only a matter of time and potential before everything is equalized, so he taunts little brother while he still can. (Little Brother is not so little anymore!)
But if you take a look around the neighborhood, Little Brother and Big Brother are more like each other, and closer in basic ideals, than anyone else in the world. They grew up together. They may disagree on a lot of things; but when the chips are down, I believe these brothers (US and Canada) will prove to be each others' best friends.
(Except for Quebec?)

Yes, I understand that the GPS rollover and Y2K are not related. It was a facetious shot at the extreme Y2K doomsday crowd. Do not have the ability to connect to Internet via any method except by cell phone at sea. Very slow and expensive. Don't use.

Have been reading other posts. Many, many, banks, firms, people, have tremendous loss potential at the rising POG. What kind of counter attack can be expected? Seems that if POG keeps going up, little can be done to prevent a major toilet flushing. Not that they don't deserve it. Any thoughts?

How come the COMEX traders can demand "X" amount of dollars, when I want to buy something, but now that I want to sell that same thing, they say "no limit orders"
Where is the fairness in that?
Boy is that a one-way rigged game!

But in other news, how do you think we should be setting ourselves up for the coming fall of the DOW, fall of the dollar, rise of the Euro? I guess there is a sea change going on in our economy, that will last through 2000, and hang around for years.
Obviously, the safest place to store value is gold. Especially now, and while the dollar slides.
But assuming the dollar doesn't absolutely dry up and blow away, which is reasonable to think that it wont, we can still make profits denominated in dollars. Good profits.
I guess we can short everything that we think will go down.
I'm kinda new to this investment stuff.
Any thoughts out there on this?

I think AG is taking a cue from Teddy Roosevelt and doing just that to keep a lid on things.

To put the brakes on "Irrational exuberance" by raising interest rates would crash the economy. The solution is to apply the brakes by hinting, threatening or "Taking a bias towards" raising interest rates. This way, he keeps a lid on the Market without pulling the plug on liquidity.

The action by the Euro CB's joined by Japan could be a deliberate attempt to back Greenspan (And the Dollar) into a corner. The breakout in Gold makes it all the more disastrous if he were to raise rates.

http://www.egroups.com/group/gata/231.html?Highlights:
The rapid growth of these fractional reserve accounts
in recent years has had the effect of expanding the
supply of gold traded in spot markets much faster than
can be accounted for by new mine production and
mobilization of central bank reserves. Unlike non-
monetary commodities, the injection of new physical
supplies of gold into the market is subjected to a
multiplier effect, where each ounce of gold stored in
London creates several ounces worth of claims against
gold by successive deposits and loans. Undoubtedly this
leveraging of leased central bank gold via bullion
banking has been a major factor in depressing gold
prices.
The mere existence of market conditions such as we are
observing today may prompt the ordinary members of the
LBMA to lose confidence in the LBMA's market makers and
clearing members and demand redemption. If that
happens, the issuers of "paper gold" could be facing
ruin, and the unbacked "paper gold" itself will vanish.

So if A.G. does not raise rates and only hints of that what impact does this have on the POG?

I see spot at 328 this am, perhaps there is enough momentum now that A.G. nor the good Lord can't stop it now.

Should be a tough day for 'shorts' today.

Thoughts?

Let me seee..... you limited up in Tokeo last night..Good Dog Spot! Now for London..... Jump, Boy Jump!!!

My Op.. Greenspan is in a box... He must raise rates now or risk capital flight that supports the debt into Gold. Add the need to make it more costly to pull cash out for 2kay.
A good ole October correction (not crash) is really what the market needs at this point.
As my Mom would say when i was a kid and i got to antsy...Son, what you need is a good workin'. She then proceeded to fill my mouth with casteroil....sure took the fight out of me...Even "If" you didn't have this gold thing... somebody needs to throw some cold water on the market to get them to sober up before they fly to close to the sun and the wax melts.......
But i'm not Greenspan......

I just read last nights posts and links, is this ever getting messy.

I've got to think CB's are going to hold gold now, EU consortium, IMHO, is holding because ot their belief that gold will be the final reserve holding when the dust settles. Who and why would anyone dump gold now to bring down the price?

Let's start a guessing pool for Comex spot close as posted by USAGOLD.....Me first...$332.27.... Closest guess get's bragin rites.....Guesses must be posted before the Comex opens to count.....

Date: Tue Oct 05 1999 06:32
ORO (@Mozel - Currency war) ID#71231:
Copyright � 1999 ORO All rights reserved
Mozel - Excellent thinking in Mozelland, how does one gain entry to Mozelland?
1. Saving the LBMA was something that the Europeans seemed to be willing to forgo ( see ANOTHER commentary ) . Considering that UK was in hock to the EU, has it been the joining of the UK with the EU action that allowed it to keep the LBMA? Was the EU also interested in the use of UKs large $ reserves?
2. The sudden disappearance of ANOTHER, FOA and most heavy thinkers save SteveH from USAGOLD through this turmoil seems to indicate that a job has been finished there. Alternatively, it could be that there is some great business and policy work to be finished - regarding the change of circumstances with the UK changing allegiance. If these are truly wired in, is this the reason?
3. Thinking through the issues that must have been dealt with in assembling the EU, it becomes obvious what it is that national currencies and their associated bank debt can do to distort economic relationships. In putting themselves in one salad bowl, the EU members were obviously made aware of the degree of US segniorage and the fact that goods are traded with the US in return for obligations that ammount to an assumption that Americans will decide to honor when Europeans or Japanese try to cash in - when in the past these were never honored. This obviously would be tolerated only as long as the US is offering something sufficiently valuable in return - i.e. defense.
A few things changed since the cold war ended, or even before. ( 1 ) The US, UK, Australia and Canada have lost the mission which allowed them to print their way into prosperity. ( 2 ) The world at large is so much more developed that the US is just too small in relation to be able to provide the currency of trade without heavy trade deficits that plunder the world, while impoverishing everyone. ( 3 ) The web of debt the US created in the 70s to enslave the emerging economies of the world had come to the point of deflationary collapse that made default impossible to escape. With their default would have come the end of subservience of Africa, South America and Asia, and of the international value of the $ and the reserves of the EU members. By the end of 98 Emerging market debt had fallen by more than 1/4, probably 1/3. The Emerging market debt trap fell appart, and EU and Japan could just plain wipe out this debt in order to eliminate $ demand and the source of the US' prosperity. Do you think this was it?
4. The elimination of the power of $ debt must have been the key to eliminating the $ tax on international trade. This must have been the reasoning for lowering the interest rates on the key currencies outside the EU ( including gold ) to near 0 soon after the Maastricht treaty. This put the US itself in a debt trap identical to the one it put the emerging markets in, no?
5. Relating to the political thinking of the EU - you put up the issue of gold as a tool of national and individual sovereignty. Is it the control of one's currency being the key? or is it the issue of Europe coming to the conclusion that national currencies are means of escaping economic consequences of trade imbalances? Particularly when through perpetuation of debt, the currency of the US allowed it preferrential pricing for commodities that Europe and Japan could not obtain gratis - in return for printing $. ANOTHER made a big deal of this issue.
( Much of the Purchasing Power Parity discrepancy between the US and the EU/Japan can be explained by this fact, and the fact that they are $ creditors, only a portion is actually related to the inefficiencies of their markets )
6. Have the "powers that be" relized that some control must be given up anyway, because of the internet? As the issue of the sovereignty of the individual transcending all borders and the yoke of national currencies was just a question of time?
Finally - what do you think of the oil for gold deals and the participation of the oil countries in the scheme?
I suspect that Russia's stopping the sales of gold after its spy at the LBMA was outed was no coincidence. Nor their doing energy deals with Europe in Euro. I think the ability to collapse the LBMA and thereby stop the supply of oil to the US and its banker allies was a crucial issue.

Thank you.

PS Thoughts of South African complicity with Europe. Might one say that the SAf had found out through us here and at USAGOLD, what a farce the economic miracle of the US really was, and most significantly - that the US was trading SAf gold for Arab oil and through this were obtaining all other commodities and Asia's manufactured goods? Could the understanding of this be behind the recent spate of political killings in SAf ( particularly the attempt on the Mines Minister?

Date: Tue Oct 05 1999 05:15
mozel (@Cap'n Kirk @Midas @What's It all About, Alphie ?) ID#153110:
Copyright � 1999 mozel/Kitco Inc. All rights reserved
@Capn' Kirk Unsolicited advice: Let the nearby ignorant and their mentors, like sleeping dogs, lie.

@Midas "Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?" Hm. Well, USG sponsored a couple of generations of "future leaders" to be "eddicated" in the renowned indoctrination camps of the Ivy League and copy cat "institutions of hirer learning". This dumbdown by degree program and bribes and UN postings and other inducements enabled USG to bring into bondage a great portion of South America and parts of Asia and Africa by means of debt obligations denominated in greenbacks. The amount of worldwide debt is a big change from past times. Human and Mother Nature have not changed.

Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?" What sudden about turn ? What is the unit of account in the EU ?

@Alphie As Ah have sayed befoah, gold is the sine qua non of Sovereignty. Central Banks are the instrumentalities of government. The EU Bankspeak on gold was proxy for the Sovereigns' speaking themselves.
Gold's apolitical empowerment of Sovereighty constitutes its national and individual utility. There is no political independence without monetary independence. What nations want today, people within nations will want tomorrow.
The United States fought its War of Independence mostly on bills of credit. In the aftermath "not worth a Continental" became a byword. The United States fought the Cold War of bills of credit. We are in the aftermath. The difference between then and now is that supposedly the United States has 8,000 tons of gold with which to re-establish its credit. The similarity between then and now is that the domestic holders of continental greenbacks are holding nothing but printed paper.

Date: Tue Oct 05 1999 02:13
Midas (Mozel) ID#165282:
Copyright � 1999 Midas/Kitco Inc. All rights reserved
"The culturlal memory of what is money has been erased."

This seems to be the case in North America, where, although there are firm believers here at Kitco, I don't believe there is anywhere near the culteral depth of confidence in gold as there is in most older cultures.

Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?

Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?

Very interested in your thoughts on these questions.

Date: Tue Oct 05 1999 01:55
mozel (@Thoughts From Mozelland) ID#153110:
Copyright � 1999 mozel/Kitco Inc. All rights reserved
The international exchange rate for gold is the LBMA rate. UK is pivot for gold. BOE "auctions" enough gold to cure LBMA or, in other words, to prevent LBMA failure in a gold rush. This also makes Uncle across the pond happy for the temporary relief provided. UK can now let gold run.
The Europeans announced sales of no more than X tons per year for the next five years. This gold is already in the market as leased gold. Over the next five years the existing European gold leases will be refused rollover. Very orderly.
Somebody forgot to tell the Paki's. Karachi was crushed.
Is Hong Kong in trouble ?
Are the African miners in trouble ? Or part of the great European gold ambuscade ? Who will be buying defaulting miners ?
The only entity which can save the Comex is the Federal Reserve. It has the authority, the paper, and the gold to do it.
But, even if Comex goes the way of Karachi, it matters not except to the US banking system.
What matters is that LBMA stays open. The UK have to keep LBMA open if they wish to be the gold center for Europe. Default in London will come from default of forward sold mine contracts, contracts sold by those small to medium US mines which the US banks are openly discussing foreclosing upon. How many of those contracts were sold in London and whether or not the Federal Reserve will order the banks not to foreclose on mines under water in the US and Canada will determine whether or not LBMA will stay open. The unhedged strong shall devour the weak.
The news smudgeout on the gold market is a demonstration of the power of the government over the broadcasters and of the mind control power of the broadcasters over the masses. Notice who is solicited for comment. The nature of their comments identify people in the know who have consented to participate in concealment. It may mean gold can be revalued without shaking the confidence of people. Because the cultural memory of what is money has been erased.
You say this much concealment is not possible. I tell you look into the secrets being kept by the lawyers, attorneys, and judges as a condition of their practice of law. Those who grant the permission to practice, control the practice, the speech, and even the thought of the practitioners. The same control exists over bankers and brokers and even broadcasters.
Whos will come step up to the gold line of truth or consequences first, the Japanese or the Americans ?

Goldspoon, I'll say $335.50

What are the chances this was all kept seceret from the FED? i would think if the Russians knew it The USA would have been aware also?
The old money ties of the UK to the US is well known. Has the actions of the Fed also been a well scripted part in this play? If so what is the twist in the final act of this conspiracy of nations?
If the US is not a willing partner in this, LOOK for a counter measure.....After all it takes soooo long for this to unfold a defence surely was prepared..... any ideas as to what it might be??

can a doller devaluation be close.

Secret stockpiling of Gold and Silver by the USA as prices were falling.... a planned return to a gold backed dollar....it's new value.... $50 to the ounce of Gold, the face value of Gold Eagles and one Dollar to the ounce of Silver, the face value of Silver Eagles......any other wild ideas??

Good Dog!
Goldfly, you've trained him well.....

$342

ORO --

You have richly rewarded my insomnia -- thanks!

How the mighty are fallen!

Martin Luther King, Jr.: "The arc of the moral universe bends long, but it bends toward justice." Let us see some justice in our lifetimes, I pray.

When the printer's done, off to bed with "Reposts and the Great Mozel". But I won't sleep. 30+ years of Economics, and it feels like this year -- no, this WEEK -- I'm just starting to get "this picture." (Ah, SIX beautiful pages to read...)

(Has Oliver Stone bought the movie rights yet? Will Donald Sutherland play ANOTHER? Gene Hackman FOA? Stay tuned...)

Spot now at 336....who'll guess 350???

$338.0000000000!!!!!!!!!!!!!!!!!!! Up $20.00!!!!!!!!!!

(...some NY folks are going to have a fit)

http://www.kitco.com/gold.graph.htmlThe 24 hour spot gold chart of Kitco at the above link is stalled. Is there some other source of this information?

http://www.quote.com/livechartscom/livechart?symbols=gc99z

Try this it works for me... thanks Gandalf!!

Gandalf the White (10/04/99; 19:08:05MDT - Msg ID:15416)
CoinGuy's Question
www.forex.freeservers.com/main2.html
Spot the Dog is the fictious "present" price of Gold! There are many reporting boards and in many values other that US$! --- the best one that I have found is at the forex board which is setup for currancy exchange quotes.
BUT if you click GLD= and change the time to MIN and click "request" -- WALLA WALLA bing bang !!
<;-)

Hey all, check out platinum at Kitco! $3.00/ounce, down $403! It's a fire sale! What other strange goofs are going to occur at that site next? I know, it's the anti-platinum cabal! This is going to be one very weird day I'm afraid. Go gold!

Click here: Listen To Don Coxe latest call, very interasting

I want to change my guess to $365.50

http://webevents.broadcast.com/accutel/jonesheward/ very interasting

They must crush gold and support the dollar prior to announcing that rates remain unchanged. I think they will switch the bias towards tightening. We may get a pull-back here.

All, have any of you given thought to Gold passing Platinum and what that might mean. Seems a real possibility to me.
The Scot

I'm going out on a limb here, the fed raises rates .25 to curb the market. Otherwise, it's another bout of irrational exuberance. I think AG tries to put a curb on market activity, without pricking the bubble. Spot jumps to 336.50, just my .02.

coinguy

MARKET REPORT (10/5/99): Day Seven of the Big Breakout....Gold up $8.50 at
$325 after hitting $333 in Asian and European trading overnight, and $339 in an early
morning blitz in Manhattan ........... "TOCOM must be suffering some type of short
squeeze as COMEX has seen," commented one broker to FWN. "Their liquidity is pretty
thin too."We're seeing the reemergence of the Asian consumer as a buyer, and Korean
buying is way up now," the broker added.*...............Since the overnight short-covering
blitzkrieg, the price has settled a bit. In a late day conversation with LFGs Leonard Kaplan,
he mentioned to me that someone offered ten tons of gold late yesterday and it was swept
up by a single buyer "about 30 seconds after it was offered."..........The buyer was
believed to be covering a short position. I wouldn't think that the fate of those ten tons
marks an end to the driving needs in the gold market. And then there's the fate of the all
those unhedged calls we talked about yesterday adding uncertainly to an already volatile
situation.**.............. Robert Rubin returned to Wall Street yesterday to say: "Just as they
reap the benefits of their decisions, private creditors and investors must also bear the risk of
failure,'' Rubin told members of the Bond Market Association at a gala dinner. "Financial
markets have fluctuated between extremes and this should be a sobering warning,'' he
added.............While most of Wall Street is thinking "no interest rate increase
announcement" after today's FOMC meeting; they also have to know that the market is
taking interest rates higher whether the Fed wants to or not. The counter-party risks
associated with the run-up in gold has to have the Fed worried. They won't make a public
issue of raising rates now for that reason; they'll let the market take them up so the Federal
Reserve can escape shouldering the blame. The net result though will still be an equities
market correction................ "Option market traders," says Helen McCaffrey of N.M.
Rothschild & Son, "continue to stare in disbelief at volatilities which have spiked to
extraordinary levels over the past week.'' She went on to say that "people" are a "little bit
concerned" that we might see further short covering from producers a la Ashanti's 80%
hedge book unwinding last week.............Gold lease rates are coming down but the return
to the 4% level hasn't seemed to cool the gold market. We think lease rates might bottom
here the evidence of which would send a new shockwave through the bullion bank
community...............XAU closed yesterday at 88.81 up 5.90. Gold stocks are regaining
their shine. I've done well with my Gold Fields.................Of the 2000 tons to be sold
by European banks over the next five years it appears that 1300 of it will be Swiss. Bridge
News quotes Swiss National Bank spokesman Werner Abegg as saying: "The SNB will
sell the 1,300 tonnes as part of the common European central bank sales agreement," he
said. Presumably that "agreement" is the one referred to in the bombshell announcement of
September 26, 1999 -- now known as Gold Sunday..............Heard on the Internet: The
cry of the bulls -- "See you at $400!".............That's it for today, my fellow goldmeisters.
Happy Trails until we meet again. We'll leave up the Big Breakout links for awhile (See
below) for all the newcomers. Welcome aboard to all those trying to find out what in the
world is happening in the gold market! Please also see the offer for a free sample copy of
our newsletter News & Views below............MK

* Those of you who regularly visit this page know that we have predicted the return of the Asian buyer (a
singularly important ingredient to the long term gold mix) since the days of the Asian contagion last year.
All you have to do is look at the price of gold in any of those currencies to know the reason why. Asians
will buy gold to protect themselves against any future manifestations of the contagion. They have been
converted to goldmeister status for life. Will Americans follow suit? Let's hope that any lessons learned are
before, not after, the fact.

**Those of you enamored with Elliott analysis might take an interest in a thumbnail Elliott sketch we ran
in the office yesterday complete with some Fibonacci ratio application. I mentioned to George Cooper, our
resident techie, that he could now take his gold charts out again because with a relatively free market now in
place -- thanks to the European central bankers -- technical analysis in gold will regain its uses. It seems
that wave one has taken us from $255 to $329. Then we had the wave two correction down to $301 area
(.38 of upmove) which matched beautifully with the Golden section retracement predicted by Prechter in his
early book, now we are in a three wave -- the long wave both in duration and price escalation. It is not
surprising that many technical analysts are putting strong support at $301. One waves are erratic, often
unpredictable, fast and furious; two's the same. Threes are longer, more stable in character and that's what we
think we are now in. I'm sure those of you who follow the Elliott model will have your own version of
this, but that's the way we see it. Any of you who have done the Wave three math work that would lead you
to a top end prediction are encouraged to offer it either at the FORUM or by e-mail and we will take a look
at it.

That's it for now, fellow goldmeisters. Have a good day.

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.

http://www.kc.frb.org/spch&bio/finanreg.htmThomas M. Hoenig, President of Federal Reserve Bank of Kansas City, presented a speech to the Chicago Fed's conference on "Lessons from Recent Global Financial Crises"

Some highlights:

"Over the past two decades, we have seen an increased incidence of financial crises, both in industrialized countries and in emerging market economies. These crises have not only disrupted the financial systems in affected countries but also have had severe effects on economic activity. Appropriately, much of the focus of this conference is on understanding the causes of these crises and on developing appropriate public policy responses. ... I think it is clear that we cannot return to, and probably do not want to return to, the highly regulated and segmented financial systems of the past. We do want to give greater scope to the market to guide the evolution of the financial system. ...

Moreover, as we proceed, we need to recognize the new realities of the financial landscape. Financial institutions will continue to increase in size, traditional boundaries between intermediaries will continue to disappear, new and more complex financial products will be developed, and cross-border linkages will increase. ... In this environment, it is clear that a redesign of regulatory policies will center on two questions: how can we make greater use of market discipline, and how can we adapt regulation and supervisory procedures to the new realities? In the final analysis, the financial system of the future is likely to be more vibrant and efficient but, also, more prone to occasional crises.

Over the past two decades, a large number of countries have experienced a serious financial crisis that has weakened the banking system, reduced credit availability, and slowed economic growth. ... many of these crises have spilled over to other countries through currency and asset markets and through disruption of trade. ... In many instances, a crisis was preceded by a rapid expansion in credit availability that was in turn associated with a prior effort to liberalize the financial system.

We recognize that there is no going back to a framework of segmented financial markets and tight regulatory control over deposit rates, bank expansion, and banking activities. And, we acknowledge the need to give greater scope to market forces in guiding the evolution of the financial system.

The difficulty with all this, however, is that we now operate in an environment with larger and more complex financial institutions whose potential failure threatens the solvency of existing insurance funds and may pose risks to the payments system. Moreover, in today's freewheeling financial markets, herd mentality may apply market discipline abruptly and at inconvenient times, punishing institutions and individual consumers rather than controlling their risk taking. Thus, while we wish to enjoy the benefits of a market-driven financial system, we may not be comfortable with the consequences when markets are disrupted or when financial institutions seem likely to fail. Few supervisory authorities will want to be responsible for the type of economic disruption recently seen in Southeast Asia and even fewer will want to risk starting a global financial crisis.

Market discipline is clearly necessary if our financial system is to have the appropriate incentives, and disincentives, guiding its evolution and development.
We should also recognize, though, that our continued reliance on public safety nets and "too big to fail" policies will necessarily temper the use of market discipline. In fact, it will be difficult to escape these limitations, given the externalities that exist in banking. Public protection may also be needed because of the learning curve that market participants and regulators will face in our rapidly changing financial environment. Therefore, the critical question is not whether we should move toward greater market discipline, to which the answer is yes. Instead, we must ask ourselves how we can make market discipline more effective within the context of public safety nets. ...

As we reestablish this equilibrium [between market and regulatory discipline], the number of crises should diminish. However, since the new equilibrium will likely place more emphasis on allowing market forces to guide the development of the financial system, realistically, we are likely to experience somewhat more crises than the historical norm. This is simply the result of allowing markets to play a larger role in the financial system."
---
Do yo get the sense that times are changing? Whatever the endgame may be, gold will always get you comfortably through the transition.

Clinton & Tony Blair both signed on to third world, espec.African "debt relief." What's the REAL reason behind this?Journeyman

http://biz.yahoo.com/rf/991004/1h.htmlThe Fed says they don't anticipate Y2K to affect monetary policy in any way, though as we reported a few weeks ago, Fed Governor Edward Kelley said, "The Federal Reserve will remain prepared at all times, as it has in the past, to do whatever it deems to be necessary to have in place the best possible monetary policy."

The three-month London Interbank Offered Rate (LIBOR) was raised by 57 basis points last week (near 6.08 percent) in what was seen as a nod to Y2K anxiety. Due to Y2K anxiety, Richard Berner, chief economist at Morgan Stanley Dean Witter said, "People are willing to pay up for liquidity."

http://biz.yahoo.com/rf/991004/bcv.htmlOften, there is great truths hidden in humor. In a lighter moment during a speech last night to the Bond Market Association, ex-SecTreas Robert Rubin said he has enjoyed taking some time off, and found a major benefit to private life, saying "While I would argue my points in Washington, in the private sector I could just go short." The audience laughed, but my friends, that is SOOO true. As a public official in that position you jawbone positives because its your job...the truthful signals you send when you know the reality is at odds with the administration's desires must be done subtly. Such as the infamous statement of Rubin and Summmers, "a strong dollar remains in the best interest of the United States." That's may be true enough, but you'll notice it contains no promise that the dollar can be kept that way.

Dear Mr. Scot......
It's not impossible, but it's highly unlikely.
Whenever they came close there was a sudden
beakout and platinum far outpaced gold.

Unless something basically has changed, I would
expect the same thing to occur in the near future.

It is an intersting market though.....no?

I'm expecting a correction in this fast runup.
then in November back to going to new highs....
Gold that is, and of course pl as well

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001WUUinteresting tutorial and thread on the TB2000 site

http://biz.yahoo.com/rf/991005/xf.htmlAnalysts expect the Fed to hold steady on rates but to adopt a tightening bias. After today, Nov. 16 and Dec. 21 are the two remaining opportunities this year for the FOMC to adjust monetary policy at regularly scheduled meetings.

Howdy all. Does Granny feel fortunate she "discovered" this stable of BRILLIANCE???? You bet!!! Thank you for being.

Hope you don't mind her making so much use of your wisdom. Just know that you are helping to protect her(and many other's) fanny(s). AND she is very appreciative!!!!!(Although she may be "master" in some areas she is very "novice" in this area. Know that she is passing on this extended kindness even more these days.)

QUESTION: Granny has a considerable amount (for Granny) of physical gold located in a "pool" with a large, well known, Financial Management Corporation. It is part of her Self-Employed Pension Profit Sharing Fund and she cannot touch it until after October 15th, 1999. She had few choices in terms of type of gold that would qualify for non-taxable funds; "pool" was fast, easy, and qualified. (Being in the highest tax bracket, a maximum allowed contribution to this fund keeps a significant amount of $'s out of Uncle Sam's hands and in Granny's pocket-book!! AND Granny is above the age where penalty is assessed for withdrawal of funds.)

Is Granny's "gold" safe for a few more days??? (This is a very reputable organization.) Any advice on how to take personal possession, as soon as she can?

Granny has been caught, as many others have, with a sudden need to be more educated than she is, and little time left to do so. BTW�. Last night's posts were so SURREALISTIC!!!! Granny was wondering if she had slipped over the edge or if it was the other way around.

Be kind to yourself and others.
Hogs and Kusses,
Granny

ORO:

Do I detect a tiny insecurity in your writings on the question of Another's "oil for gold" thesis? You brought it up again with Mozel today and have mentioned it several other times without total conviction.

I recall my own interpretation of the concept when Another offered it long ago. It seemed then more like reference to a general policy of cheap oil in a financial climate that included cheap gold rather than a signed document with definite numerical agreed price/quantity ratios written formally in stone, as it was taken by critics anxious to find flaws in the story to discredit it. It seemed at the time that Another was referring to the economic system as a whole rather than to a formal agreement. Of course, it could be that my own understanding of these concepts, built as they are on very general terms, sought naturally to frame the question (and answer) in these terms. I do recall an instance when FOA referred to the oil for gold idea as one that was never implemented; rather like a threat that had been overhanging the system for some time (even one not necessarily even communicated directly to the West... rather just a theoretical possibility not intended to be lost on the Western powers). Although I commented on it at the time, I did not see an adequate clarification from FOA. It seemed like almost a mental slip on his part.

Are you convinced about Another/FOA being here at USAGold on some sort of mission that seems to have been accomplished, as you implied in your post to Mozel? One of my very first impressions of Another was that his intention was to stimulate the purchase of physical gold. I soon ruled that out in my own mind because I could not see beyond a coin shop owner trying to sell a few more ounces. Even though Michael Kosares had jumped on his writings by publishing "In the Footsteps of Giants" there seemed to be no connection between Another and MK, especially when I compared their respective writing styles. (MK was always very explicit both in public and in private that he was not Another.)

Looking at this question through your writings I still suspect that Another's motive was indeed to stimulate demand for physical. He, as much as anyone, would understand that the stalemate of short sales driving the POG ever lower would be vulnerable at the point that actual physical gold became removed from the game by physical holders. (But it always jsut seemed like a few spooky postings on the internet could hardly hope to accomplish much in the broader scope of things.) In fact, wasn't his claim of huge short overhangs made even before Frank Veneroso's work became public? Another also seemed to understand the situation of the LBMA long before it was common knowledge. He knew about the huge volumes of trading there before the bombshell announcement acknowledging it was released. And I remember him musing long ago to the effect that, "It is a sad thing, this LBMA... It will cease to exist before the coming storm in this new gold market subsides".

In any case, there is little question in my mind that Another/FOA know too much for their participation in this forum to be without purpose. That they do so in order to stimulate their own interest and knowledge seems like a very weak explanation as they contribute far more than they could ever hope to receive back.

Comments and replies: ph@ProdigitalRecords.com�

GFD? Any thoughts either public or private?

Not MY insecurity.

I am looking at the making of a convincing argument for others.

The shadow of the oil for gold deals is found in the data. and is enough for me. The evidence you need to convince people about this is tantamount to a baseball bat to the head. People may accept the idea that the $ may one day in the future be considered worthless. That it has been so for 30 years and was completely skirted in the last 10 is something else.

I am sure you are right in saying FOA/Another have been here to stimulate gold buying. But I believe their motives are altruistic. They see a major decline in the US fiat money system on the horizon and have been warning people here to be ready for it. The best way is to return to the historic store of wealth, gold. Paper is paper, regardless of whose face is on it and the more you print the less valuable it becomes. The US has exported its debt for many years now to the benefit of its own citizens. 30 trillion US IOUs out there now, I think I read.

I hope FOA/Another have not left us but I suspect with events moving at a faster pace now they are probably very busy with little or no time to devote to the internet.

ORO:

Are you and Mozel the same person? Or would that be a personal question?

Phos:

With events moving at a faster pace now they are undoubtedly very busy with more time than ever spent on the internet (keeping a finger on the pulse, as it were).

I, too, hope they will return at their earliest opportunity.

With so much tumult in the gold markets , I would surmise that at this particular juncture, FOA and Another et al are probably very involved with the responsibilities of their respective careers. I do not believe they are gone for good.

MK is Another? Ha. I have met him personally. While it is difficult to trust anyone these days, I would and do trust him. He is a very successful man with no good reason to ruin his name by perpetuating fraud here or anywhere for that matter. I don't know him well but this I can tell you; he is an honorable man.

Good thoughts from you sir. Could it be that these two gentlemen (FOA/Another) are motivated simply by good works and intentions? Hard to believe in this day and age!

The analysis corroborating by ORO is very compelling. We shall see.

If you owned vast amounts of precious resources in a mostly uninhabitable part of the world, would you trade for "promises" or, if you had a choice, would you monetize gold to a certain extent vis a vis the Euro and in the process.

That's the question to be asked.

Dear PH and Phos: Remember what FOA said as he signed off on Friday night:

PH, Everybody,
I have more to say than could possibly write now. When I get back we will have an awful lot to cover. We'll all understand later.

Judging from the stares of incredulity I got when recounting this story and reviewing its implications with knowledgeable people who are involved in the financial markets, I would say they needed to have a place to send people to look at the picture in some detail without telling the whole story. They needed a place to find out how people would react.
The anger I found when Americans were plopped into ANOTHER's world of hard reality in mystic images as would be given by the old sage, was no short of amazing. "Nuke 'em" was not a rare response, it was the first response. Americans would rather kill en masse rather than live on the same plane with the rest of the world. Americans seemed to be more enamored of the illusion of the $ than of the actual lives of people in other lands.
After a while, the anger subsides and people start thinking differently, they suspect everything floated by the government. The thinking in terms of dollars remains, but the certainty is gone. They need a new way of thinking, because these ideas created a void and there was no acceptable replacement.

From one "average, boring, midwestern guy" to (perhaps) another........thanks for your presence here.

We live here in a very sick culture. This is not the same country I have read so much about in the history books.

No, I am not Mozel.

Mozel continued working out his understanding of economic reality as presented by Mises and Hayek, and sought more and new evidence for the foibles of government in the monetary and political world. I abandoned this pursuit for nearly twenty years. I have come back to it over the last few years but have alot of reading to do to refresh my memory and stimulate further thinking.
Mozel is in this daily. It is an old occupation for him.

US Mint's new dollar coin to contain manganese brass, copper
By Bridge News
Washington--Oct 5--The US Mint announced today that the alloy for itsnew dollar coin will be a 3-layer clad system of manganese brass and copper. A Mint spokesman could not immediately say when the Mint would be issuing a solicitation to procure manganese brass and copper for the new coin, which will replace the Susan B. Anthony coin in early 2000.

The core of the new dollar will contain copper and the outer layer will be manganese brass, the Mint spokesman said. At a press conference in New York, Mint director Philip Diehl said the new alloy has been designed to produce an attractive coin that is golden in color and that matches the electro-magnetic signature and physical specifications (size and weight) of the Susan B. Anthony coin. He said the new coin is expected to be accepted immediately by the thousands of vending and mass transit machines that currently accept the Susan B. Anthony coins.

The "golden dollar" is easily distinguished by sight and touch from both the quarter and the Susan B. Anthony coin. It is gold in color and bears a smooth edge, similar to the nickel, Diehl said. Both the quarter and the Susan B. Anthony coin have ribbed edges. The coin is also distinguishable by its extra-wide border. Diehl added that the one key indication of the future success of the new dollar coin is the growing demand for the Susan B. Anthony. The Mint is now shipping more than 5 million Susan B. Anthony coins every month and the current supply will be depleted before the new golden dollar becomes available in early 2000. To bridge this gap, Diehl said the 1999 Susan B. Anthony are being minted to ensure that consumers who currently use the dollar coins will be able to continue to do so before the golden dollar is launched, said Diehl.
---
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.

Does anyone perceived that the surging demand for the previously scorned "Susan B" might be fueled by Y2K?

Yes, a boring midwestern X engineer. But it is an adopted identity, chosen rather than born into.

The FED will not raise interest, COWARDS! Whats the matter afraid of "Crashing" the markets A.G?
Go GOLD go,now is the time to crush the U.S dollar.
GO EURO!!!GO.
They have adopted a bias of tighting which will leave a dark cloud over the markets. Ha Ha Ha Ha Ha !!!!!!!!!!

Down 100 pts. in three minutes, now rebounding. Imagine if they had raised the interest rate

With the end of the third quarter, the European Central Bank remarked their gold reserves to market value, the value at which the gold will be booked until December 31st. The official valuation of ECB gold reserves increased from last quarter's mark of �114.988 billion to this quarter's value (for the same gold) at �128.222 billion.

It would seem that the central banks have finally found a stable fashion in which to do business. Whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that foreign currency can with much greater speed wipe out those yield-gains and much additional value besides.

BONDS fall, S&P futures down,and the DOW lost 100 points instantly as groans from the trading floor could be heard at the N.Y stock exchange.

Gee really breaks my GOLDENHEART. ;-)

http://www.goldensextant.com/commentary.html#anchor71256Granny:
Your question about "pool" gold is commented on at the above link.

ORO - So true about thinking in the US. But I think it goes even deeper. Our beliefs as a country/culture have become our prison. We don't see how we resist any new thought/belief that counters the status quo. America, the land of the free? Hardly. We the sheeple hold these lies to be self evident. However, the human mind, which creates our experience, is naturally resistant to change. We (our minds) don't change unless emotionally motivated to do so. Literally, the amount of change is directly related to the emotional content of the experience. That's why big life changes are always accompanied by significant emotional (life-changing) events. At the core of the changes we are about to experience is the changing of the mind-sets of a great many people about "how things are". With considerable "luck" we might even transform from "what's in it for me" thinking to something more sustainable for all.Changing is the most difficult thing humans must do. Many of us would rather die than change. This does not bode well for a smooth transition. It will probably be the hardest lesson of this century for the sheeple. Reality may come knocking in a big way. It will probably be a big shock (significant emotional event) when the sheeple's paper falls or the digits disappear into the cyber pit of Y2k. We, I believe, are in the end game of a western mind-set that is about to be turned up side down. Keep up the great work. Best, DD

Had just seen the Kudlow CNBC commentary.

Looks scared.

Points: (1) Fed should stop being wishy washy, and just say what it needs to say: "we'll keep on fighting for the $". (2) CNBC: mantra, "no inflation". (3) Kudlow Unsaid: CPI is a cooked stew, the tough meat has been softened. (4) Kudlow on Inflationary Reality-also see Pesek article on Volcker- oil prices, commodity indexes, gold, dollar index say $ is not what it used to be. (5) Kudlo time to choose a strong $ (Unsaid that it means weak banks) or a weak dollar and inflation. He preffers the strong $, and suggests the Fed tighten the money supply.
What Kudlow does not seem to understand is that there are no more doors open, all are clogged with $ debt.
1. The tightening of the money supply. The banks are in a liquidity squeeze due to the unwinding of Japanese and Euro deposits, and domestic Y2K withdrawals. The Fed prints money to bail them out. (a) The slightest tightening would destroy the banks and the resulting US recession would kill the $ anyway. It would also increase the number of EM defaults that kill off the future demand for $. (b) Continuing the current policy of "temporary" monetization of bonds and tassled loafers will kill the $. (c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d) Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $. (e) A moratorium on imports can prevent further $ deterioration, but that would cause horrible inflation as the US tries to replace imports.

>>>We the sheeple hold these lies to be self evident. <<<

I love it. Print up some bumper stickers!!

Thanks Bunches.

Granny does have a segregated (identified) account and feels somewhat less stressed but won't feel really comfortable until that pretty stuff is right here weighing down the pockets of her apron. Granny doesn't mind, in these times, paying a litte extra for storage and insurance.
......"There are also gold certificate programs in which the gold is held in allocated, segregated or identified accounts, in which event title to the gold rests with the customer, the relationship created is a bailment, and the gold is neither carried on the bank's balance sheet nor available for leasing. These accounts offer the customer greater security but also typically incur higher storage and insurance charges and of course do not pay any interest...(snip).....Private depositors, on the other hand, worry principally about themselves. Should they begin to doubt the soundness of their bullion bankers, they could start an old-fashioned bank panic in the blink of an eye."

Now for those people who do not have segregated (or identified) accounts .... ideas on if they should demand delivery very soon??

More info welcome. Be well.

The shock of some people I talked to before over the sudden rise in $ POG was something else, for the first time they were truly thinking through what I said. The fear on the phone was palpable. The questions that were asked show that they are now completely lost.

I suspect that "ANOTHER" has not abandoned us but is monitoring us closely. With many of his predictions coming true it's time for a little "rest & relaxation".
Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up.
Just kidding (Smile)
Sincerely, The Scot

http://biz.yahoo.com/rf/991005/2p.htmlText of FOMC's statement from Reuters.

Gold= breakout (#1) accomplished
Bonds= breakdown!!!!!!(#2) underway
S&P 500= correction/crash (#3) soon to follow
$= meltdown (#4) any moment

I take no joy in the pain that the readjustments in the worlds financial scales is causing. But I do look forward to a short (1-3year period) of greater freedom!
Keep Well!

"...Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up...."
Granny can only dream that she will any time soon have the knowledge possessed by our 'ol Sages!!!! (Not that she isn't a quick study.)She loves walking with GIANTS but can only offer questions, at this time. Hopefully some of her questions will stimulate answers for those who are too meek to ask.

RUN and JUMP Spot !
<;-)

ORO - It's amazing, isn't it? We go merrily along filtering out anything that doesn't fit with present perceptions/beliefs and WHOOPS! Reality begins to catch up with mind-set. For anyone who has faced significant adversity or change, I think it's natural that fear is the first responce. We actually have to get to fear before we go into denial, a likely next step. However, as reality pounds on the old coconut, we move more toward acceptance and finally action. Acceptance and action take the fear away...at least most of it. We'll probably go through these steps as individuals and as a culture if things come as unglued as is currently indicated. Keep a close eye on Y2k. 00 may be the final bale of straw on an already flattened camel. Best, DD

They were out all night and boy- they look dog-tired.

Rrrrrrrrrr....

Oh, sorry Spike, no offence.

They seem, however, to be quite happy, and after devouring their bowls, have settled themselves for a nap by the computer to await the Town Criers report.

I too cannot wait to see this one....

GF

I would like to second Peter Asher

>>>We the sheeple hold these lies to be self evident. <<<

Wins the medal of honor for saying of the day, phrase of the week......

http://196.36.119.130/BusToday.nsf/Current/422567D900452FF842256801006240D7?OpenDocumentLooks like Bill Murphy and GATA are finally gaining the recognition they deserve. Appeared on South Africa's most popular financial news show, Moneyweb. Would recommend this site to anyone seeking REAL information on what is transpiring in SA's financial markets.

http://biz.yahoo.com/rf/991005/1b.htmlA congressionally commissioned report by the General Accounting Office was released this week. It accused the International Monetary Fund of understating its lending capacity through the deduction of $19 billion in liquid reserves to a reserve fund that hasn't been used in over 20 years. It also claimed the IMF may be unprepared for the millennium date change.

This report will surely add fuel to the fire as Congress debates in the coming weeks whether to impose its veto authority in regard to the IMF's intention to revalue a portion of its gold reserves in a scheme to provide debt relief to the world's poorest countries.

http://biz.yahoo.com/rf/991005/44.htmlIt was exactly a year ago that U.S. Treasury 30-year bond's reached an all-time low yield of 4.69 percent.

Analysts said it had more to do with flight-to-safety capital flows following a global crisis--including the Russian debt default--than it had to do with economic fundamentals. One analyst said those rates were not sustainable from the very start, and were "artificially low."

Current U.S. 30-year bond rates are 6.168%. By contrast, a recent auction of Brazillian treasuries occurred with a yield of over 22%.

http://www.usagold.com/wgc.htmlTHIS WEEK IN GOLD has now been updated with the latest weekly gold market commentary, hot off the press by the World Gold Council. Their staff recounts the events of September 27 - October 1, the exciting and volatile week following the european announcement curbing future gold sales and leasing operations. In the WGC's words, "This agreement marks an unprecedented level of co-ordination among governments about gold reserves and changes the entire market background."

Also in this week's commentary:
"By this time a serious shortage of physical metal was emerging. Gold lease rates, which had been strengthening for the previous two months, suddenly rocketed with the one-month rate soaring above 10% on Wednesday, pushing the market into backwardation (spot prices higher than forward prices)."

Grab your torch to get there at the link above, though you won't need it when you arrive at this well-lit room.

We'll see you when you get back.

http://www.gold.org/Gra/Statistics/Osgchart.htmThis is a helpful chart for those who think they've missed their gold-buying opportunity. Although the chart shows only recent years, gold is still near 20 year lows, and in truth, the buying opportunity remains for as long as sellers may be found...but at what price? Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.

Often wondered about FOA and Another; even MK and Another.

How does Granny know of 'ol Sage? (15531)

And definitely, Farfel is Stranger!

ET,

Remember the '13th of the month theory', to be released first Wednesday of the month, tomorrow.

Thoughts?

Does anyone have Sept. PPI and CPI release dates?

I anticipate week of 12th. Please confirm.

Want to have some fun? Guess what tomorrow's Comex closing price is.... as posted by Townie or USAGOLD... entries must be posted here before this site rolls over to tomorrow...the winner is the person who gets closest to the posted price (over or under is OK, Just be the closest)...
The winner gets the title of "USAGOLD ORICLE FOR A DAY" (braggin rights)..... Good Luck!! but you'll have to beat me..(i'm preety good ya know... handsome and modest too)...


RossL and i played the game this morning just before the Comex opened.... the winner was...well, i don't want to embareass Ross.....

Howdy All,
Must be a coincidence. Please don't make any more of it than it is ... there is enough excitement and mystery to worry about. Granny doesn't know the'ol Sage you are probably referring to. "Sage" is a common but not too often used word in Granny's vocabulary (rare the human who can qualify). Be well, granny
Back to assemblin storage shelves for you know what ... don't we all wish we could say we needed this much storage for Go*d!!?? ... come to think of it ... this T-paper and green coffee beans might be worth their weight in Go*d in a few months!!)

OK...I'll Play. Tomorrow's the day...limit up...$399.00.

$343.00

Me too ..... $357

OK! I was hit by a spell of irrational exuberance this morning. Tomorrow close is $332.30

I've felt compelled for some time to make a comment or two on the thoughts of these two fine gentlemen and as I post here from time to time I felt it prudent to espouse from my regular chair at the Gold-Eagle forum, and have just done so. Tit for tat for site recomendations.

SteveH--I've also wanted to say I'm very flattered that you felt some of my personal thoughts there were worthy of re-posting here. It helps make the time taken to read & write
personal views more worthwhile. Thanks--YGM

I'm in: $336.50

Think someone here can out guess that bunch over at KittyCO?
i don't have postin' rights over there....never felt it was worth it....but if someone wants to copy my posts over, well..... it would make thins a bit more interesting wouldn't it???

That's OK Ross..... anybody can make a mistake...bbbBBAAWWWWHHHA!! .....oops...i new i couldn't say that with a straight face..;>}

Hello. I do not understand the meaning of your last post. Could you clarify please? Thanks.

I think you may have been asking about October's dates which are PPI on Friday the 15th and the CPI on Monday the 19th.
My guess for tomorrow...a little backing and filling before the next leg up...318.80 at the close.

So...the "money" runs to gold.
We have waited for this a long time...
But will the long awaited move for gold mean
the end for the U.S. dollar?
It is with a cold lump in my belly that I see my faith
in gold being rewarded.
Another is proving to be quite astute...no?
The U.S.A. may be a "changed" place soon enough...

Oh, just in case....sept's dates were the 10th and the 15th

I'm not sure what you don't understand? Possibly I lost you by mentioning that my comments were made at Gold-Eagle forum? Have you been there? If not I will post the link if you
wish.--YGM

PS: I like BOTH sites equally well and used to post here
quite often but it's hard to have two ongoing group relationships at once so I read here daily and post at Gold-Eagle. Hope this helps.-----YGM.

Yes Voyager, it seems that we ARE presently witnessing the flushing of your mentioned toilet. Counter attacks? If 10 tons was snatched up on COMEX only 30 seconds after the offer, it would seem that any such tactic would only prove futile and a gross waste of wealth by any organization that attempted. And even then, it was probably only to cover the short.
Thoughts? The parameters of the world gold market have changed (Eurobank announcement).....different rules now....it's a brave new world and we're sailing into uncharted waters (at least in the modern sense). This coupled with Y2K, an immovable deadline breathing down our necks, and you have an event without precedent. I myself look forward to the economic cleansing to come (unfortunately I still have a very large economic interest in the status quo), just as an old forrest NEEDS a brushfire, only this time, I think that this will be the catalyst of worldwide tax reduction, hence worldwide goverment reduction, and ultimately greater liberties. Our internet has given us an unprecedented view and power as individuals, that did not exist but a decade ago. The game is different, just very few people have opened their minds wide enough to see it. All major paradigm changes in history, (of lesser calibur than mentioned above), have all resulted in immediate and violent change of hands of power and wealth. It is in each of our rational best interest to recognize this change, and act accordingly.

Sorry to be a pessimist but I predict that tomorrow's closing Comex gold price will be $313.90.

In your post on Kudlow you stated:
"(c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d)
Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $."

Could you explain (c)? I just didn't get it.

Regarding (d), how does increasing interest rates flood the world with dollars? Does the loss in liquidity cause the redemtion of bonds and notes etc.? I thought tightening (raising rates) lessened liquidity and this meant less, not more, dollars.

Still reviewing your post re Mozel. Good stuff.

PLEASE....not two nights in a row without TC's wisdom!!!!!

The technical prowess of this gold battle is astonishing. By rights that 4.5 drop should have clobbered this but it bounced back with vengeance. Sides!

Well said Cmax.....

Ross....my contrarrian indicator......(Ok, sorry Ross, love ya man) Platinum up big tomorrow....remember if platinum has a slow day gold ain't goin nowhere much....The big boys telegraph what they are thinkin with the price of platinum...(study this and read em like a book)....hence if Platinum is up big, gold is turned loose to break the 330 resistance level..(OK,..OK...im' gettin to it..sheesh..)
Comex Close, Gold tomorrow...$343.73.....

Now $328.

Hope you're feelin' better. Mother CM is down tonight. You know the old saying? "A house without a Mother is like a ship without a rudder; a house without a Father is no bother."

I visited my coin dealer friend. His thoughts (remember he went through the 79'-80' run in gold and silver) were that the public hasn't even become involved in this.

I asked him what would happen when it did.

He said there would be no gold available for a while.

He said there was a ways to go with this one yet, because the public weren't buyers yet, not like in the late 70's.

That's what he said.

YGM, you deserve the credit. Good piece.

Gold now up (dec that is) $1.00. She is turning. This is the day against night again.

TA shows upper bollinger on 60-minute chart at 334.50. That means if she hits $338 or higher she may track up. Last night it hit $337 or so and reversed (just like a good technical). There appears to be nothing technical about this trading yet, except to define some underlying forces of which we probably can't begin to grasp, not yet anyway.

Onwards.

Sometimes when one is entering uncharted waters (such as where we are now), it helps to review where you have been. For me, my whole perception of the economic world collapsed in the last days of January 1997, when the LBMA broke silence and made a press release disclosing their daily gold volumes. The following day it was published, I posted the following on Kitco, which was the beginning of a personal odessey and discovery as to the real nature of the world's money system. Now in hindsight, it may seem a little funny, but believe me, it wasn't at the time. We have all come a long way since this day.

Kitco January 31, 1997

HOW HOW WOW....., is this "enlightened" age of information, exist something SO large as loco London?? It has been hidden all this time not by government mandate...but by private enterprise. Selby gives a number of 241,000
tons per year moved through this market; that is 660 TONS PER DAY! And we have been blaming news releases on the Dutch for their little 300 ton sale (during the year) as a major contributing factor in the slump of gold? No way. The "discovery" of loco London, economically, is akin to the discovery of the New World by Columbus. 30 million ounces traded in ONE day (Jan 29)? These are not COMEX numbers....these are numbers of a GOLDEN ALTERNATE CURRENCY, here and NOW. I don't think the world has yet REALLY assimilated what this really means. Goldbugs have been putting the excuse of their plight on old "management" by Central Banks. With these numbers flowing in the previously occulted London Exchange, Central Bank's could not possibly manipulate. Gold then must be acting NOW as a commodity, supply and demand. And the price that we have now, is it's commodity price (rather than manipulated price). And as any commodity, it is subject to the market's perception. Popular economists refer to gold as a dead horse....these are not numbers of an inactive currency. WHEN the masses translate this loco London information, the perception of gold must change dramatically.

After all, this information was only released what....3 days ago? The Central Bank directors must be squirming when they see these numbers. With such incredibly high volume, and great fundamentals, do you REALLY think that this large of a market can allow gold to drop much further? I don't see how. However, we do have a paradox:
Since gold as an alternative currency DOES exist, why is it SO cheap? I remember Ann Rand saying somewhere
that in nature, paradoxes cannot exist......one must recheck their premises. Our PREMISES definitely need some
rechecking now; OR the general market needs to recheck their's. Gold, with this volume (and new information), is
behaving paranormally. Next question is:

What ever prompted the "perfectly" occulted London gold market to go public??

This is against the very nature of it's participants. And against the interests of the Central Bank's and governments.
This London market is no little news...what are their intentions with this release? First thing that comes to mind, is that if I wanted to undermine the very root of fiat currencies, this is exactly the information I would release.

Dear Cavan Man: Thank you for asking about me! I'm actually sicker, so I'm just quietly lurking and reading what you guys write. Hope Mrs. Cavan is feeling better soon.

Town Crier has been very quiet for a couple of days; I hope he's all right. He promised to fill us in on "Three Kings." TC, what was the movie like?

My call for tomorrow is $325.

Cmax: If "the rougher times to come" elevated the awareness and action level of just one percent of the population who then spread the word on the internet then we would have a new and more honest world. During the depression statistics showed that people spent more time at the theater. If we have a depression perhaps more will have time for the internet! The internet can spread more truth and expose more lies faster than any medium in history.

YGM: Like your stuff. Could you post your Gold-Eagle posts over here when you feel it is appropriate?

PH in LA: You might be right about the motives of ANOTHER and FOA. However, rather than focus on who ANOTHER and FOA might be, should we not reflect on who we have become because of them?

I exchanged some FRN for Irish Punts today. My first thought was, my, this money really looks funny. Just thinking about it; there is no difference between the two really. Question; why is the Irish pound and the British Pound so "dear" in dollar value?

Here's a point--I've been looking at the US dollar for so very long, I actually think it should be worth more than an Irish Punt or, anything else for that matter. I remember the first time I went to Ireland. I wondered why I gave them 500 and got back 250. Anyway, my point is that a mountain will need to be moved to get people weaned even a little bit off the $ and into some hard assets beholden to none. This thought is from your last post. A friend of mine considers gold ownership a "hobby". Once John Q. Public begins to move in the direction of AU, "Katy bar the door".

http://moneycentral.msn.com/articles/invest/jubak/4749.asp?special=msnnipThis "expert" suggests building a cash position for the next six weeks. He tells us how shaky the market is and outlines the losers. OK so far, but he goes on to state that there is nothing on the rise right now. Has he been in a cave or what?

YGM...So what is this comment?

Tomcat:
Just part of the process of assessing whether we have become all that we might think we have... You know, just tryin' to get closer and closer to reality. It's a process that never ends!

I believe Mr. PH espoused a belief in FOA/Another endeavoring to encourage PM ownership earlier today. Am I correct? I don't want to scroll back. If that is so, I ask; what is their motivation? Everyone posting and lurking here who would buy 1000 OZ. would affect the POG in a very small way. Why then? I have a hunch. These two gentlemen are the penultimate insiders. I am playing my hunch.

Yes, indeed!

Tomcat
With the few living brain cells that are still functioning, my basic math tells me that if physical gold to paper gold ratio is 100:1.....and if as you say only 1 percent of the population was elevated to the awareness to act, then the 1 percent of the perceptive population should then hold 100% of the physical gold, no? (smiley thing)

The most-watched financial news of the day was whether the Federal Reserve Board's FOMC meeting would result in either a change in lending rates, or an altered bias at the least. The decision was announced today at 2:15 EDT that they voted to leave rates as is (federal funds rate target at 5.25% and discount rate at 4.75%), but that they adopted a policy directive biased toward raising interest rates in the future. Stocks and bonds immediately turned sharply south, and gold, which had always been in positive territory, rebounded from a sag in its earlier highs during its brief remaining trading period.

As reported by TheStreet.com, Dennis Gartman, publisher of The Gartman Letter, suggested that the FOMC members might have gotten a preview the Labor Department's September employment report, (to be released Friday) and if strong it would explain the tightening bias. This seems credible in light of the Fed's press release regarding the FOMC decision in which they say "Nonetheless, the growth of demand has continued to outpace that of supply, as evidenced by a decreasing pool of available workers willing to take jobs." Gartman suggests that scrutiny must now shift to the September PPI and CPI (released mid-October) and to the October jobs report (released November 5) in advance of the FOMC's next meeting on November 16. In an interesting additional note, Gartman says, "But for Y2K, there's no question they would have moved to tighten. They are praying for some slowdown in the numbers that will allow them not to tighten before the end of the year."

At Wall Street's closing bell, the DOW and Nasdaq regained ground from the post-FOMC selloff to finish essentially even on the day, although NYSE decliners outnumbered advancers nearly 4-3, and 145 issues set new 52-week lows while only 54 reached new highs.

The 30-year Bond was the day's biggest basketcase, losing 1-6/32 in price (6.168%), plumbing the depths near its lowest price of the year.

In currencies, the dollar also weakened after the Federal Open Market Committee announcement, probably in reaction to the decline in bonds and stocks. Dollar/yen settled down from an earlier 5-day high of 107.14 to close at �106.52 per dollar. The euro/yen reached nearly a month high on the Fed decision as dealers covered shorts and corporate customers bought the euro/dollar. Also a factor is the expectation for a possible euro-rate tightening as the European Central Bank counterpart to the FOMC meets Thursday. The euro settled up at �114.41 per euro.

Bridge News gives another thorough report today with comments from traders and dealers on life in the futures pits, so we'll cut away to them shortly. But first, we'll quickly catch you up on spot gold price movement in NY from our last GOLDEN VIEW on Friday. (For those wondering, our absence was due to a long-overdue visit to the Castle (Centennial Precious Metals). We hitched the horses to the wagon and made the long trip from The Tower (which is frankly little more than our humble news outpost here in the endless wilderness of the internet). Believe this meek TownCrier when he says the Castle (CPM) is even more impressive in person than it is over the Net. Thanks go out to Michael for his hospitality while we were in Denver and within his Halls.) Spot prices were last quoted in NY today at $324, up $6.70 over Monday's close of $317.30--which was up $13.30 over Friday's $304 close (which in turn was up $6.30 from Thursday, etc).

NY Precious Metals Review: Dec gold up 2.5%; trims early rally
By Darcy Keith, Bridge News
New York--Oct 5--COMEX Dec gold futures settled up $8.0, or 2.52%, at
$326.0 per ounce, trimming more than half of its early morning gains that
brought Dec to a 2-year high of $339.00. Gold saw fierce gains today in
overnight ACCESS trading, but could not sustain the lofty levels for long
as profit-taking set in during regular COMEX trade.

While most of gold's retracement off its highs came amid the first
hour of trading, further selling pressure emerged following the US Fed's
announcement that it has left interest rates unchanged.
Although most analysts believed the Fed would keep rates unchanged,
there were still some thoughts that they might hike, and such a scenario
could have sent stock markets tumbling and investors fleeing to the safe
haven of gold.

[On the other hand, such nonchalance by the Fed in regard to inflation should send PROACTIVE investors toward gold--to seek its safety while the Fed demonstrates such trivial inflation-fighting stamina. If the Fed were more actively "doing something," these same investors might conceivably shun gold in deference to the Fed; however, that same action by the Fed would surely send both stocks and bonds lower, leaving gold as the only place to be by both proactive AND reactive investors at large. So, where gold temporarily had a huge day in early trading, it settled for simply a "big" day.]

While the Fed kept interest rates unchanged, it also announced that it
had adopted a tightening bias, which may have limited the downward
reaction in the gold market.
According to a number of sources, a large gold transaction took place
in ACCESS trading late Monday above the market price at that time, and
this helped to spur further buying interest in Asia and Europe overnight.
One dealer said some 10 tonnes of gold, or 3,500 contracts, was offered at
$321, when spot gold was hovering close to $315. A buyer--rumored to be in
desperate need of short-covering--was found, the sources said.
Others said the sudden move in gold prices overnight was related to
options plays, as well as many rumors making the rounds, including talk
that a major gold producer has started to embark on programs of hedge
restructuring or buy-backs.
The only confirmed development, however, was that Ashanti Goldfields
has been left with an obligation to pay margin calls to its gold-hedging
counterparties because of the recent huge rise in the gold price. Ashanti
said it has entered an arrangement with its hedging partners for
continuing support.

Some players said, however, it was a sudden rush of short-covering in
an otherwise illiquid market helping gold to post its overnight gains.
"TOCOM must be suffering some type of short squeeze as COMEX has
seen," commented one broker. "Their liquidity is pretty thin too."
"We're seeing the reemergence of the Asian consumer as a buyer, and
Korean buying is way up now," the broker added.
More of this short-covering and options activity in gold--both
overseas and in the US--is seen continuing.
"I still think there's a whole lot of shorts," said Leonard Kaplan,
chief bullion dealer with LFG Bullion Services. "Now that we're moving
higher and higher, it is delta hedging of the options that's driving the
marketplace."
Vanessa Motto, analyst with CPM Group, said the rally is primarily
being driven by short-covering, rather than a lot of fresh long positions
being put on. "A lot of people are waiting to see
how this all shakes out before taking fresh positions," she said.
Continuing to lend support, added Kaplan, are firm lease rates. This
morning, 1-month lease rates were seen around 4.60%, which is down
slightly from 5.00-5.50% Monday, but still far above lease rates of just 1
month ago.

[currently the gold lease rates are:
1-month 4.4220%
2-month 4.5000%
3-month 4.8800%
6-month 5.0660%
12-mnth 5.1210%....]

Doris Hildebrandt, gold dealer with Toronto Dominion Bank in Toronto,
said that spot gold jumped very quickly overnight from about $320 to $330.
"That's got to be because of a big option play. There's clearly some huge
option plays going on; people are getting killed," she said.
Hildebrandt suggested that gold quickly ran out of upward momentum
when New York trading opened this morning because there were feelings the
overnight rally was overdone. "Whatever was forcing it up overnight in
Asia and Europe, New York traders don't necessarily see that as a buying
opportunity," she said.
Hildebrandt also noted that $340 is a major resistance level for spot
gold, and it was not surprising that prices backed off those levels when
New York trading began. However, should gold be able to break above that
resistance level and stay there, gold could have much further to climb,
she said.

The break through $340 in 1993--thanks to positions taken by George
Soros and Sir James Goldsmith--led to a major bull market.
On the downside good support should come in a $320-325, Hildebrandt
said.

David Meger, senior metals analyst with Alaron Trading, also cited the
covering of large lease positions that had been accumulated over the last
few months as a key driving force behind gold's rally.
"This just reeks of further lease covering, which is effectively
putting more buying into the marketplace," said Meger. The big US banks
are believed to be behind much of the lease covering, he added.
Meger also added that gold has reached levels where the locals will
"step in front of some of these rallies."

[******Here comes the best paragraph of the whole affair, and had it not been said here, we'd have surely said it elsewhere. (In fact, we alluded to it in an earlier post when we said "Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.") One small official proclamation here or there and *POW*...it's a totally different market than your see-thru plastic rulers and graph paper said it was.********]

Most market players agree that it is not technicals driving the
market, but fundamentals, following last week's shock announcement that
several key European banks have agreed to limit gold sales and lending.
"The psychology has totally reversed here," said a broker. "Without
the central banks selling and lending into the market, we have a shortfall
of supplies, as they have been up until now making up the difference
between supply and demand."

In the news today, the Australian National Bank said it has no plans
to sell gold for the foreseeable future. Also, Canada said it sold
136,000 ounces of gold in September.

[Here, we think our lovely Bridge reporter meant to say Austrian (not Australian) National Bank. Another Bridge report gives details that ANB board member Peter Zoellner was commenting on the 15 European central banks reaching their now famous decision at the September IMF meeting, and further elaborating that the ANB currently holds 407 tonnes gold. Australia now holds only about 80 tonnes (they are not expected to sell either, by the way.)]
***
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No further reproduction without written permission from FWN.
---
In other gold news from Bridge, The New York Mercantile Exchange indicated it is additional gold options strike prices for trading outside the parameters of those normally listed, effective Wednesday. Volatility or expectations of yet more to come must have surely played into that decision.

Now that Andy Smith's anti-gold rhetoric has faded somewhat, apparently the latest bear to go crashing through the china shop is Ted Arnold, analyst at Pru-Bache. According to his report, this current state of robust health in the gold market is merely a reprieve from an ultimately oversupplied market, and Arnold further argues that the central banks who were signatories on last week's gold sales moratorium will remain "very overweight gold" and will "eventually cheat" on the agreement. What would they have to gain by cheating except paper? With the future of the "strong dollar" in grave doubt, and a yen that would like to be jawboned into the grave along side, gold reserves seem the only way to go...especially when you consider how the Europeans are going about it. Watch this, as reported earlier today...

In their third such quarterly revaluation of gold reserves to market following the initial valuation of gold reserves at market values with the introduction of the euro based on December 31 values, this latest gold revaluation increased the ECB' reserves by �13.234 billion over the previous quarter. The official valuation of
European Central Bank gold reserves at which the gold will be booked until December 31st now stands at �128.222 billion, up from last quarter's mark of �114.988 billion (for the same gold.)
Take note, Mr. Arnold... whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that currency can easily erase those gains and much more besides. So, what's wrong with gold now, Mr. Arnold? Wake up and smell the paper burning, my friend.

Follow along with this one if you can...
You may recall from our last report (on Friday) that the day began with open interest in 612 October contracts, with 120 receiving delivery intentions that morning. Monday stats reveal that by end-of-day Friday, Open Interest (October) dropped by 152 to 460 contracts. New delivery intentions on Monday were received for 18 contracts (bringing the total for Oct. to 1,621), and Tuesday stats reveal that by end-of-Monday, open interest had changed by a net drop of 13, leaving 447 contracts in open interest.
+
This is where it gets interesting, because this morning's delivery intentions exceeded--by almost double--yesterday's remaining open interest in the October gold contract. Unless our read on this is mistaken, because the turnaround was immediate, this clearly appears to be new contracts entered into for the sole purpose of acquiring gold. Though we don't know whether there was a brief period of backwardation since yesterday's close, it almost looks as though this were an arbitrage opportunity during which spot prices were higher than future prices...otherwise, why wasn't this same delivery sought on the spot market to begin with? From First Notice Day for Delivery Intentions on September 30th, October contacts in open interest totaled only 2,114. In the ensuing four days, delivery intentions have been announced on 2,437 contracts so far for October. Either way you slice it, the final interpretation remains the same...the physical market is TIGHT.

There was no change in COMEX gold depositories both Monday and Tuesday. Inventory stands at 839,029 Registered ounces and 88,591 Eligible ounces for a total of 927,620 ounces housed within vaults at ScotiaMocatta and Republic National.

In the oil market, traders said they were concerned about the outcome of a meeting to be held in late November between oil ministers of Mexico, Venezuela and Saudi Arabia. Their concern is that these ministers could discuss whether to keep their output cut agreement past March, and when a market is going well, any news that could disrupt things is always of concern. Venezuela Energy Minister Ali Rodriguez said the discussion would be about output levels, oil demand and world inventories.

On the topic of inventories, the United Arab Emirates Oil Minister Obaid al-Nassiri said that despite this rise in oil prices, "figures indicate that [world oil] inventories are still high compared to ordinary levels," and that OPEC's decision in September to maintain the production cuts through March 31, 2000 "would lead to
the stability of the oil market." Nassiri was speaking at an oil conference in Abu Dhabi Monday.

In NYMEX crude futures trading today, prices hit a 1-month low ahead of weekly inventory data that were generally expected to show crude stockpiles as flat or up last week. November crude ended down 28c at
$23.48 before the subsequent API report confirmed that US crude stockpiles rose 1.004 million barrels last
week, which was actually more than double what most brokers had expected (flat to up only 400,000 barrels.) In overnight Access trading, contracts for November WTI had lost an additional 14c.

And that's the view from here...after the close.

PH: You said "Just part of the process of assessing whether we have become all that we might think we have..." Very well put. Now you have me wonderin! Thanks for all you posts. I follow all your stuff.

Cavan Man: I agree. They are certainly positioned with unique perspective.Hard to believe it is not on the inside. BTW, I think you asked yesterday or Sunday what I buy. For gold its almost all pre-1899 uncirculated fifth ounces pieces like angles and roosters. One pays a small premium over Eagles for these. Cheap insurance as far as I am concerned. For silver it is all bags of pre-65 dimes and halves which I am told is the most popular for of silver.

Here's what i have so far...(oh yeah..no changing guesses)

apdcheif-$399
Canuck- $343
Granny- $357
RossL- $332.30
onlychild$336.50
Tanglewild$318.80 (like your handle)
Silvertongue$313.90
Goldspoon$343.73 (can't stand this guy..such a knowit all)
Tomcat $325 (keep it up you'll go places)
SteveH ??
Leigh ??
Others ??

TC: Great upate.

Cmax: Yes, I agree. I was also alluding to the fact the if one percent of the population just woke up regarding how sheeplized they have become; how the press is bought off, how our Constitutions is no longer ours, etc. then perhaps, through the internet, there would be a ray of hope. Even now, as we speak, a transformation in freedom might be occuring. It might be a grass roots movement but it must be growing, even if small.

My guess on tomorrow's COMEX close. (It's so volatile, who knows, but it may be a day for retrenchment). I hope I'm wrong: I really want it to spike out of control.

The priority is to save banks from default/insolvency. The way this is done, the CB borrows or buys the banks' assets and in return deposits cash (electronic or paper) at the bank. If the asset is held to maturity, there will be more money in the system until that point is reached. It is therefore inflationary. If the asset is in default, the cash sent to the bank is permanently in the economy and it is highly inflationary.
That is why the Fed does "temporary" borrowings under reposession agreements rather than straight purchases. But the repos are more probably going to turn into outright purchases because the cash withdrawals will not come back (negative US savings rate and cash withdrawals for Y2K, most significant are Yen withdrawals).
When the Japanese withdraws funds from the US bank and converts them to Yen, those deposits are replaced by either Fed repos or by the bank selling loans on the free market, or simply not rolling over old loans that come due. Looking at the US banks, the loss of deposits from abroad will cause them to drop their own assets abroad, hence the severe tumble of the Eurodollar and rise in interest rates. When this happens, the $ obligations of foreigners are diminished, while the $ obligations of US entities remain the same. The $ dumped into the market by the Japanese withdrawal are sopped up by the US banks not rolling over old debt or selling/refinancing assets into Euro based or Yen based hands.
So the math makes every repo by the Fed a net injection of $ into the international economy now. While each unreplaced or sold foreign $ loan removes future $ demand from the world outside the US. The rest of it ends up in the US markets where the sale of assets causes rates to rise.
The Fed action weekens the dollar now, the bank response weakens the $ later or the bond market now.
The "tightening" by the Fed means that the $ will fall later instead of now. In the long run the result is the same.
The effect of raising interest rates in a debtor nation undergoing an exodus of foreign funds is inflationary and weakens the currency as the increased rates increase outgoing payments more than they do incoming payments. Therefore $ supply to the world increases. If enough $ are recycled back into the US system because of higher rates, then the $ may stay strong a while longer, but the future supply of $ would increase.
Last year, the $ income from the teeny debt owed to US creditors was smaller than the $ payments made by the US to foreigners. This acts as a trigger for a vicious circle-
1. if interest rates are low, there will be an unwinding of foreign owned debt, and $ will fall
2. if interest rates are high, US interest payments will grow, and the US economy will see both higher prices as a result of higher interest costs and on top of this the economy would slow. The slower economy makes investing in US operations unattractive and the incoming money seeking high returns is balanced by outgoing money rebuffed by low economic returns from the slow economy.
3. If Money supply is restricted (as Kudlow suggests), then the severely undercapitalized banking system collapses and investors panic, selling off everything quickly.
4. Prices of foreign supplied commodities rise as $ falls, and more $ are supplied.

The $ would fall until the $ needed for repayment of interest abroad or for importing US products and their proxy (still oil and gold - and most other commodities) are no longer less than the $ supplied by net US interest payments and imports into the US as well as outgoing investment money. At this point, the $ index (DX) value at which this balance is achieved is at the 40 to 60 range vs 98 today.