USAGOLD Gold Discussion Forum Archive

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AristotleBeesting---Ahhhh, yes...Sovereignty! What life is all about!#69636/1/99; 0:03:50

Great stuff! And here's the one will show up out of the blue and simply give it to you. However, it is yours for the taking--a frame of mind, attitude, perspective (call it what you like.) A lifestyle. Avoid operating on auto-pilot. Be deliberate and exercise judgement in all that you do.

If a seagull can hatch in this wild Garden among the stars, and be free to navigate the various bounties and trials of life, why can't we also? Methinks the world needs more birds like Jonathan Livingston.

Sovereignty. Take you some. ---Aristotle

something elseGreetings, musings, and questions#69646/1/99; 1:21:05


This is my first posting. I am prompted to write in order to postulate a very simplistic theory that was prompted by SteveH's 6820 post. But first I want to say how much I love you guys! I have been reading USA Gold's Market Report for some time now, but only recently checked out the forum. The only problem is that my obsession for reading it keeps me up way to late at night!

I would also like to say that I am grateful to find such an abundance of knowledge and insight. All I have heard around me lately is cheerleading for the bull market and denial of the present bubble and its mania. My belief in the value of physical gold tends to garner only bemusement and tolerance for my ignorant beliefs at best. So I tend to keep my opinions to myself. Time will speak for itself in the long run.

So on to my postulation. So far, the focus of the solution to the problem of the repayment of the huge amounts of gold outstanding due to the gold-carry trade seems to have focused on the euro. Perhaps, it is simpler than that. Steve states that an "estimated 14,000 tons of gold that has been involved in the gold-carry trade needs to be paid back. It is impossible to pay it back in gold as most of the Central Bank loans demanded so now it would seem that the financial parties in the gold-carry business need a source of gold to pay back these loans. It appears that only two escape hatches exist for the gold-carry players. Keeping the price of gold down by shorting it on COMEX (this is akin to naked shorting as insufficient gold bullion doesn't appear to exist to cover the 200,000 open interest contracts) or repaying the loans in a medium acceptable to the banks who loaned the gold in the first place."

Try this idea on for size. The BOE announcement to sell reserves is an action that has been acknowledged to drive the price of gold lower. Huge quantities of gold short positions remain outstanding on the market. Sooner or later, the physical metal must be repurchased to make good on the outstanding short positions. With so many institutions worldwide having such a vested interest in the covering of these short positions, what better way to solve the problem then by: a) taking measures to drive down the cost of gold to levels sufficiently low to assure the ability to cover the short positions (and possibly manage to make a tidy profit as well); b) making the physical metal available at those prices to the short holders for the necessary repurchase which in turn enables c) the gold 'borrowers’ to return the outstanding gold borrowed to the lenders.

It may be that this idea has been alluded to before in these postings. However, I have not seen it stated explicitly, therefore I bring it before you for your (collective) comment and insight.

I leave with one more burning (for myself anyway!) question.

Why on earth, would one consider bulk sale of gold reserves when gold is trading at 20 year lows? In the life of common people, like myself, we don't usually sell out the family jewels at rock bottom prices unless we are feeling VERY desperate! I would think one would only sell off those jewels when one is completely desperate, and there is NOTHING ELSE OF ANY VALUE LEFT TO SELL!

It is ironic that the purchase of gold bullion by individual investors continues to increase while the price of the investment hits a 20 year low. What's wrong with this picture?

GoldsunVatican gold#69656/1/99; 2:06:40

While information on the Vatican's financial holdings is certainly of interest, I have long been curious as to the existence and financial holdings of analogous organizations in other religions, such as Muslim, Judaism, Buddhism, Hinduism and last but perhaps not least, Parsees and Jains. Information on Parsee participation in the development of Hong Kong would be particularly welcome. Although I have no knowledge of the Vatican's financial affairs, I occasionally find myself wondering if they haven't gotten into some sort of bind which required outside assistance.

Oregon GeezerScary Bilderberg agenda stuff#69666/1/99; 2:33:43

You can also find the site on today's
SteveHTossed and turned all night...#69676/1/99; 4:37:01

August gold now ... what!? I must double check this...yes it is true!


something else. Your idea is ideal, problem is the market appears to be divided: physical and paper. To pay back in physical of such a large quantity is not possible or seems not possible. Part of the problem is that we don't see the true physical market. It is hidden from our eyes. That is why Michael said watch the market.

I believe that even two thousand tons of gold can't be found to satisfy needs, except at CB's and they are giving it up anymore, unless they have to (BOE?).

Silver TongueGold#69686/1/99; 5:30:18

Much is said about countries dumping their gold because they have too. What strikes me is the fact that if England dumps its gold at these bargain basement prices and if the citizenry is lapping up gold at these ridiculously low prices that all England has to do one it has dumped the gold is to confiscate the gold back from the citizens at an even lower price than that at which they were forced to sell the gold in the first place. Is there anything wrong with this logic? I hope that there is.
GoldflyCavan Man, Goldsun#69696/1/99; 6:38:14

Have seen a number of references to Washington's vision, never heard of it being attributed to Lincoln....

When I get more info, I'll pass it on.


TownCrierSaudi Prince Says Iran Has Right To Arm Itself#69706/1/99; 8:09:45

"All countries follow the same policy..." he said.
Policy is "for the benefit the Gulf region"

USAGOLDToday Market Report: Some Gut Wrenching Action in the Early Going#69716/1/99; 8:17:58

MARKET REPORT(6/1/99): Whoever has their foot on gold's neck kept it there this
morning as gold opened at $271.50 on the August contract ran to $277.10 (up $5.60 from
the open) and then promptly plummeted to the $266.30 before recovering to $268.80 --
quite a gut wrenching opening to the week. It all happened so fast at the open, that most of
the investment world didn't even know it happened -- like a Phantom -- but if the MRCI
report is correct, and it usually is, the open, high and low are there for all to see. If Reuters
is to be believed, the latest short attack has originated with the mining companies who are
running ahead of the Bank of England, who in turn is running ahead of the European
central banks (all of which have said categorically they have no intention of selling their
gold), who in turn are running ahead of the International Monetary Fund (which has yet to
make an official declaration on gold, but the smart money is betting they won't be selling),
and finally, ahead of the public which is not selling at all but buying -- at record levels.
With all the running one would think that the gold market was really the seemingly chaotic
Bolder Boulder (won by an Ethiopian not a London gold trader), rather than the staid and
gentlemanly proposition it is so fond of advancing as its modus operandi. Ah...the vagaries
and nuances of the free, unbiased and responsible British press. It is obvious that
something is going on in the gold market -- some great forces pulling underneath the
surface, like a riptide, and some equally strong forces looking for opportunities to cover
previous short positions. It appears we have come to the volatile stage in market action.
Keep your ear to the rail. Anything could happen.

Meanwhile the eyes of the currency world were on the euro which suffered a disastrous end
to last week with calls from all corners of Europe that something be done to prop up the
new-born, but ailing, reserve currency. European Central Bank officials talked of
interventions and abandoning their policy of benign neglect. The market is reacting half
heartedly to all the politics in the early going. Traders are waiting to see if something more
than rhetoric will emerge from all the bustle on the continent.

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

TownCrierSaudi banks unite to create Arab giant#69726/1/99; 8:30:42

The merged bank, to be called SAMBA, would be able to compete more effectively "especially in light of the restructuring that is currently taking place in the regional economies..."
USAGOLDSteve H....#69736/1/99; 8:41:53

I wanted to mention that the Washington vision reminded me that Washington warned in his Farewell Address that we should avoid foreign entanglements especially in Europe (if I remember right). The vision may have had a profound impact on his foreign policy. At the very least, there were plenty of philosophical consistencies between his vision and foreign policy. Thanks for the interesting post which I had not seen before. Do we know when that account was written and whether or not it's part of Washington's official papers?
USAGOLDGoldfly...#69746/1/99; 8:46:23

My apologies, o bard of bards. The question below should have been directed to you.
TownCrierANALYSIS-Sustained low prices may force gold mine cuts#69756/1/99; 8:57:27

Puny supply at risk of becoming smaller.
TownCrierFOCUS-European markets await U.S. data, gold dives#69766/1/99; 9:02:16

Stocks, bonds, gold, and the NAPM
TownCrierMcDonough says strong U.S. dollar in U.S. interest#69776/1/99; 9:12:54

How soon until they employ a parrot to deliver this same old routine? Why so much official jawboning? Seems like shades of 1971... Stuff must be about to hit the fan.
GoldflyUSAGOLD#69786/1/99; 9:17:19

As I was telling Goldsun and The Man from Cavan: what you see is pretty much all I know. I am trying to get some documentation whether the item was published in the National Tribune prior to the Civil War.

While the publication wouldn't prove that it came from Gen. Washington, I think it would lend more credence to the possibility since it seems to predict the War Between the States and it's outcome.

I doubt very much that it belongs with Washington's papers, as it would probably get much more airplay (not mainstream airplay, just more.)

Anyway if I find out anything more, I'll post it.


TechnicianKeep your powder dry#69796/1/99; 9:51:02

I have been a lurker for years on Gold Forum. My peak experience in life may have been selling part of my gold position at $800. That market served me well and I have waited 20 years for another. We are near but a final purge is necessary. Stick with dollar averaging coins until a clear reversal is signaled.

I am a high school math teacher and and retired AIR Force. I have a hobby of creating software for commodity analysis which is much inspired from Wilder. Seems to work pretty good. I have no commercial interests at all but I do have a personal website, It is only for public perusal, fun and exchange of ideas. Used homestead and it was really easy to create it and for free!!! Presently, everthing except sugar looks like a short. What, is this some kind of deflational collapse with the $ ever higher?

One story to tell. I am married to a Russian and have a Russian mother-in-law. I proudly showed her my collection of gold maples, kruggers, pandas, etc. when she cut me off with the remark. "Gypsies sell those bite one next time you buy." I was taken back by her perspective and realized that gold is different things to different people. Few living Russians have had nor do any have the opportunity to own gold. Their miserable condition may be part of that lost freedom.

Maybe today is the start of the purge that will lead us to a key reversal bottom. Only in last year have I regained my interest in gold. Now I wait very patiently for the signal which will be fast and hard and very visible to those who have been patient.

One of the high points in my life was selling some of my gold position at $800 (wish I had sold all of it;) The market was very good to me those 20 years ago and I feel the juices once more that have lain dormant for two decades.

Read the forums and understand the undercurrents and patiently wait.

Thanks for all those who visited my little home made web site. It was real easy with Homestead and for free. Please share your ideas with me on the technical aspects of the markets. So many have came but I feel as if i am talking to a wall. Let's make it a fun place, bring ideas!!!

TownCrierRobust NAPM seen pushing Fed closer to rate hike#69806/1/99; 9:52:54

Bearish for Bonds because the Fed may raise rates. Bearish for Stocks, which are fearful of higher cost of borrowing money. Hmmmmm, let's see now... Got GOLD?
TechnicianSloppy posting:(#69816/1/99; 9:55:15

My last post, somehow, came out as two prepared posting instead of one I wanted. If a little confussing, that is what happen. Be more careful next time.
TownCrierIndonesia: Suharto goes off the money #69826/1/99; 10:11:40

The Central Bank in Indonesia has dumped the portrait of former President Suharto on its largest bank note.

The new 50,000 rupiah bank note (worth around six dollars)will now bear the portrait of the composer of their national anthem.

Wow! 50,000 ledger units of theirs equals 6 ledger units of ours. If you had only 120 American dollars, you'd be a rupiah-millionaire. Numbers mean nothing. It's all about purchasing power, folks.

TownCrierWorld Trade Wars #69836/1/99; 10:20:59

The world is at war again - over trade. Governments and producers squabble over beef, bananas, steel and other goods. Once again some countries try to 'protect' their faltering industries behind trade barriers.
BBC News Online takes a look at the dangers facing the world economy with a compendium of links at this site.

You know, if YOUR money is not as acceptible as MY money or THEIR money, how on earth will we ever do business? It is all about GOLD, but the leaders won't face the music.

TownCrierRate hike for eurozone possible (Al says, "I don't THINK so, Tim.")#69846/1/99; 10:30:04

Although it was mentioned by a senior Bundesbank official that an intrest rate rise could be used to strengthen investors' confidence, given the structure of the euro it is easily argued that "the idea that the exchange rate is a real problem for ECB policymakers is just way outside any reasonable analysis".
TownCrierDaytraders Fret When Margin Comes Calling #69856/1/99; 12:18:22

In the end, the piper must be paid.
Cavan ManPeter Asher#69866/1/99; 12:24:37

I cannot comment on the EU. I do not have the knowledge to give an opinion. Having travelled a bit internationally and having reached the conclusion from my travels abroad that "humanity" shares many common threads, I want to assume the EU has similar problems across the board.
TownCrierAbhorring a News Vacuum, Market Waits in Vain for Selling Climax#69876/1/99; 12:42:53

The cat is out of the bag. Now that you know what the run-of-the-mill reporter DOESN'T know, feel free to dismiss their stories, and think for yourself.

But of course, I try to give you the stories that are not run-of-the-mill, so stay tuned!

TownCrierOIL:Iraq finds chemical weapons in UNSCOM office. [What the ??]#69886/1/99; 12:52:22

United Nations--Jun 1--1246 ET--The United Nations Security Council is
currently in an emergency consultation called by Russia after Iraq found
chemical weapons in the Baghdad offices of UNSCOM, the UN group charged
with monitoring Iraq's disarmament progress, a diplomat who spoke under
conditions of anonymity, explained. However, Chief UN Weapons Inspector
Richard Butler, as he was entering the meeting, said: "Experts know of
nothing alarming." By Carola Hoyos

London--Jun 1--0037 ET--All members of OPEC favor extending the group's
agreement made in March to cut its collective oil output by over 1.7
million barrels per day to support oil prices, a senior official at the
Iranian oil ministry said today. By Alex Lawler

Kuwait--Jun 1--0040 ET--Current oil prices are "satisfactory" but should
improve in the second half of the year, according to Kuwait's Oil Minister
Sheikh Saud al-Nasser al-Sabah. By Agence France-Presse

Milan--Jun 1--0121 ET--Erg, an Italian oil refiner and gas station
operator, said it will reduce production at its oil refinery ISAB di
Priolo in Sicily by about 25% and will not sell refined oil on the spot
market this month. By Sharifa Pastori

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

TownCrierNY Precious Metals Review: Gold hits 20-yr low#69896/1/99; 13:33:57

By Darcy Keith, Bridge News
New York--Jun 1--COMEX Aug gold futures settled down $2.5 at $269.5
after hitting a fresh contract low of $267.0 on Australian producer hedge
selling overnight. Gold also hit a fresh 20-year low on nearby continuous
monthly charts. Jly silver traded in the opposite direction today,
settling up 9.0c at $4.985 on bank and fund buying. Silver got a boost
today from a newswire report indicating that Mexican producer Penoles
plans to cut its silver and lead exports by 10% this year from 1998
levels, traders said.

The Australian producer hedge selling overnight in gold was spurred by
a weaker Australian dollar versus the greenback. The Australian dollar hit
1 1/2-month lows against the US currency today amid widespread selling by
US banks.
One large US bank and one large German bank were said to be
particularly heavy sellers today. The triggering of some sell stops may
have also helped to accelerate the move.

The Australian producer selling overnight spurred further weakness in
the European spot market, where volumes were thin following the 3-day
holiday weekend. Some of the thin conditions may have contributed to the
sharp sell-off gold saw today, traders said.

Gold remains the victim of overwhelmingly bearish sentiment, which was
intensified last month with news that the UK Treasury plans to sell off
more than half its gold reserves starting on Jly 6.
Some players have become optimistic for gold as spot prices resisted
to sink sharply below $270 over the past several days, but the break of
that level has brought in further disappointed selling.
"It's hard to find anyone positive on gold right now," said Leonard
Kaplan, chief bullion dealer of LFG Bullion Services. "The trade and
speculators are going to remain on the bear side of the market until it
penetrates at least one or two resistance points on the upside." He said
$270.75-271 for cash prices should provide some resistance, although more
serious resistance won't be seen until $275-280.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

TownCrierNews From the Tower: U.S. Treasuries crushed at futures close#69906/1/99; 13:39:20

Treasuries experience their worst sell-off since May 14.
A dollar can be no better than its bond. Yikes!

TownCrierMarkets tumble; dollar slips; Bonds crumble on strong NAPM #69916/1/99; 13:48:12

"In this kind of market, he said, value isn't important. Direction is what matters..."

But in the end, value will win the day, my friend. Gold.

TownCrierTea leaves#69926/1/99; 14:20:55

Most IMM currency futures ended higher as the prospect for higher U.S. interest rates sparked a heavy selloff in both U.S. T-bonds and stocks, which in turn dampened demand for dollars.
TownCrierWhat? We worry?--A commentator's fun reminder that Y2K hasn't gone away.#69936/1/99; 14:30:57

A mixed bag of advice and smiles.
TownCrierWhat Drives the Price of Gold?#69946/1/99; 16:02:23

Although dated this week, I seem to recall this same essay from weeks ago...some sorta weird deja vu, maybe. Final analysis, it is better to hold gold "too soon" than to try to get it "too late."

Yeah, kinda like toilet paper. Who waits until AFTER they need it to make a trip to the store? Some things you just gotta have in advance, ya know??

Golden TruthResponse to Something else and Thuggery?#69956/1/99; 16:09:57

Hope this somewhat answers your thoughts.I,amsure my answers aren't 100% correct but i believe they're close. Anyone else please feel free to respond. (b)They are the ones (shorters)who are making Physical GOLD available at prices for the necessary repurchase to them selves the (short holders). Kind of like a dog chasing his own tail,or a circle that keeps getting smaller.(Implosion?) They can't cover 14,000m.t(metrictonnes), even the B.O.E sale is only 450-480m.t. Thats not even enough to cover the 200,000 o.i contracts which equals 622.08m.t. I believe F.O.A when he says they(B.O.E) sold to cover their currency, being that the "Pound" is tied to the U.S dollar. (c) They can never return the GOLD to the C.B no matter how low the price goes. Would you give up your GOLD @$150/oz to cover what you now know to be someone else's short selling? NOT ME or any other C.B's .This is where the fireworks have started! This is also why they(shorters) will have to pay back the C.B's with a proxy for GOLD with the "EURO" since it represents GOLD backing! (a) Sorry to address (a) lastly but i don't want to forget it. Yes they might make some profit in shorting GOLD but only until it implodes, which is soon! Lastly i have my own idea i've been kicking around alot! It came to me in part by what "ANOTHER" has said in the past that the Goverments will do quote "WHAT EVER IS NECESSARY TO PULL THE REAL MONEY BACK IN" unquote. The TREPCA mining complex just keeps coming back to haunt me! Like most WARS, the KOSOVA war is about money-BIG MONEY. It has nothing to do with ethnic cleansing,genocide,or atrocities. It's all about money. FOLLOW THE MONEY. Its a bold power grab to control the mining complex in KOSOVO. Next make "slobo" a criminal, already done? Then everything is wide open in the publics eye for the Goverments to sieze any and all assets of a criminal! under such a premise? Besides who is going to pay for Kosovo to be rebuilt? and the massive amounts of money needed to pay for the resettlement of the Poor Poor Refuges. Even though we've killed hundreds of you with our Smart bombs? oh must just be dumb targets for that to have happened. Not to mention thousands of people dying from exposure to the elements, so sorry once again but i've got a fat juicy steak scarf down and 14,000m.t of GOLD to pull back in. Some one once mentioned on this forum that they hope the u.s gov, won't resort to "thuggery" I think it was Aristotle. Well guess what we live in the real World where real people are dying, including "INOCCENT" people in Yugoslavia. How many soldiers have really died? So in my eyes thuggery it is! The mines are worth TRILLIONS of dollars. Even if the u.s gov. Spent 100 billion dollars and the mine was only worth ONE TRILLION it only cost 10% to wage this WAR and to steal the mines. Believe me they will take the mine if Yugoslavia falls! What they are doing is out right pure unadulterated EVIL! This is is where they can get 14,000m.t of GOLD and for very cheap labour costs also and it will take only a couple of years to get it. The u.s gov knows this and is going to hang in there tooth and nail until it does. I also wonder if others in the GOLD shorting business know this also so they are told to just keep shorting away,and we will come to your rescue, besides your doing us a favour in under mining the EURO. We need to get rid of them dam europeans and that pesky EURO, you know how much we HATE competition especially against our reserve currency. The real tricky part though is preventing WWIII. Something that was alluded to in the letter called "THE STING" was the hope that a World War could be avoided when the u.s dollar was unreserved. I wonder if "BORIS YELSTIN" ever got a copy of the "STING" that Russia had been given a routine castration. I bet that would put some pressure on the powers that be to get the Hell out of Europe. If not nostradamus's(sp) prediction about the "KING OF TERROR FALLING FROM THE SKY" in July 1999 doesn't seem all that far away anymore. Well got to run i have to e-mail somebody? over in RUSSIA. thanks Golden Truth!!!!!!!!!!!!!!!!!!!!!!!
CoBra(too)Bul-lion#69966/1/99; 16:10:30

Comex and OTC gold shorts reaching proportions of no return - Mike Coulson of Paribas or Brett Kebble (JCI) openly quoting alledged short positions up to 14.000 tons of AU- in the main stream media.
The lenders/leasers of gold will have a lot of explaining to do to their constituents, as to the whereabouts of their physical reserve asset, since there simply is no way to get the bullion back to the vaults. It simply is not available, not at any price, however low it will become depressed in this kind of quantity!
The physical market is booming-supply deficits can't be saturated from new mine production since years and are growing disproportional- as demand is going through the roof and the PoG remaining at these levels or heading lower still, will eventually and dramatically curb production in terms of total production costs, further excesserbating the problem of unavailability.
The equation of equilibrium in terms of supply/demand comes to mind, even if admitting to a split gold market, i.e. paper gold vs physical, the gold lenders/leasers will wake up to the fact that their physical, while maybe still in their vaults, is forfeited and effectively sold - while new production, in part is also forfeited by forwards, and potential production curbed by price. The real and total production costs, including capital costs, amortization and reclamation are close to today's gold price level and a lot of producers are eating out of their hedge book already. Aside from ongoing depreciations of the producers currency, there is not much left to alleviate the strain on margins.
The super bowl finals between the young team of fiat (bulls) vs the legendary quarterbacks of bul(lion), while being (un)-officially staked, will once more see the bul-lions rewarded with the true golden trophy.

Golden TruthU.R.L correction#69976/1/99; 16:26:26

OPS sorry i left out one letter. Also i wanted to add to my last post about the fact the the British Army seem awefully dam hungary to invade Kosovo. Maybe i,am reading this all wrong they aren't going for the GOLD after all. Its the poor muslem pheasants they LOVE so dearly and that they can't wait to send their soldiers in to DIE for silly me. Also why is the the U.S.A so friendly with the KLA a know terrorist group all i here is how commited the US is against terrorism. I guess this is somewhat of an Oxy Moron ?????????? GO figure i know i have.
CoBra(too)@at golden Truth....#69986/1/99; 16:41:13

Have not seen your message before posting mine. 14.000 tons of AU shorts seem to become mainstraem knowledge - though not the ramnifications of this number. Pls forgive me for posting similar, if coincidently,ideas.
I loved the way your Brits seem "hung(a)ry" to deploy ground troops to propbably help the 300.000 ethnic Hungarians out of Northern Serbia? No pun intended!

Golden TruthSpelling#69996/1/99; 17:19:49

Hello CoBra, I knew somebody would see a spelling mistake or to but i,am a beginner typist and subscribe to the "Hunt and Peck" method. So it takes me a reeeaaalllyyy long time to type out my thoughts. There for my spelling is inversely proportional to the speed at which i type, so sorry but i was in a hurry.That aside what do you think of my scenario about invading Kosovo for the GOLD mine? I think your post was perfect timing, and not what so ever an intrusion of mine i think its just that more people are finding out about the truth and are now going to start questioning what is going on? Your post is cold hard evidence of that fact!!! We should be aware of the fact that people do KILL other people for Money, the question is who much more for the goverments and GOLD.I really question the MOTIVE for an impending invasion into Kosovo by the HUNGRY Brits also maybe camouflaged as the L.B.M.A?
CoBra(too)@Golden Truth#70006/1/99; 17:49:04

Thank you for your immediate response, which I can't reciprocate right away in every facet, sincee I can't verify the alledged multi-billion mining concern in Kosovo.
It is 1.30 a.m. in my part of the world, though I don't think this ongoing bombing (back to stone age as NATO quotes) over Kosovo is for any economic benefit- no - it is alledgedly the first war in history for humanitarian reasons!?!
I'll try to express my thoughts more clearly tomorrow-regards -CoBra(too)

TechnicianGold refuses to take a downdraft!#70016/1/99; 19:00:10

I do not wish to create fantasies from clouds or reading the future in tea leaves but todays action in gold piques the mind. Why the close on the high? Lot's of short interest but not so much downward action. The stuff is greatly oversold and I suspect the shorts are in for, at least the short term, a lot of trouble. Don't know so much about western conspiracies in the Balkans, Nato is not that smart but I can read charts. Lot's of volume on this downdraft. Where is the "meat"
jinx44CoBra(too) and the complex#70026/1/99; 19:20:41

From what I've read about the natural resources in Kosovo, there is every reason for a criminal group to be bombing the sh*t out of FRY. If you look up the Stari Trg mining area and the Trepka mining complex, you will note that this huge mineral wealth has attracted thugs from way back to Roman times. The Germans occupied this area to make U-Boat batteries and mine gold. The area still produces much of the worlds submarine batteries. I read recently that a greek mining consortium has signed a 3 year deal to mine gold, silver, cadmium and lead. The deal was worth $1.5Trillion I think. But NATO is there for the children. I wonder how much soap you can render out of a childs body? Maybe there is money to be made here!! Besides, the third way crowd doesn't need these useless eaters anyway.
Gandalf the WhiteLooking at MY crystal ball !#70036/1/99; 19:25:02

Now "no one" should go out and expend the farm on my observation of the clearing clouds within my crystal ball, BUT, the levels of todays drop at the opening and the recovery to close at the highs in the physical and major stocks tells me that we are going to see real fireworks tomorrow !! --- The chartists are saying not to think about it, JUST BUY. --- But the "Physical" shorts will have their way until they run out of everything that they can throw at Spot the dog and the Aug contract. Twil be a great show tomorrow. To protect the crystal ball, I shall now cover it with the velvet cloak and not look again until the close of COMEX. Later all.

Gandalf the WhiteClarification !!#70046/1/99; 19:27:58

When one speaks of stocks, ONLY PM stocks are considered, AND NOT those high flying ".com" or DOW thingies !!!

Technicianbad link#70056/1/99; 19:32:07

Sorry, bad link. If you wish to visit my humble home page try this one!
Cavan ManSir Gandalf#70066/1/99; 19:33:50

Remember the old fortune cookie proverb: "Those that live by crystal ball often end up eating glass" (hope you're right)
TomcatTechnician#70076/1/99; 19:55:43

Found your last post interesting. Could you tell us what numbers and trends you look at, and explain how you use this data to draw your conclusions. Please note that I am not questioning your conclusions, but after visiting your homemade site I became curious.
Peter AsherHello ! Congress???#70086/1/99; 20:18:01

We had Senator Ron Wydon at our monthly chamber of commerce meeting today. Small group, maybe 60 people. He said some intriguing things during his talk regarding the political process and current issues, but I'm going to save that data for another post. Since the 'fur is flying' a bit around our primary subject tonight, I'll cut to the chase.

After the meeting, I managed to get in contact, and while shaking his hand and introducing myself, I asked him if he had any awareness or activity regarding the selling of IMF gold, 15% of which belonged to The USA. He said "I don't know anything about this" !!.

Peter AsherYou tell me#70096/1/99; 20:26:41

Down another dollar tonight , Unbelievable!!

It seems that gold has gone from being systematicaly driven down, to a genuine selling panic. One having no more rational regarding fundementals than the internet stocks do on the up side.

The one difference, is that downside bubbles have real physical limitations.

SteveHMost direct statements to date...#70106/1/99; 20:56:18

I thought FOA's word worthy of one more post tonight. Note there is no mincing of words here. Most interesting barometer of imminent change, eh?

FOA (5/31/99; 21:10:17MDT - Msg ID:6943) Comment canamami (5/27/99;
14:44:45MDT - Msg ID:6800) FOA, Is it your position that the BIS will
not intervene to protect the POG at $280, or any level, given the
existence of the Euro? How does this theory jibe with the Euro's
declining value in relation to the $US? When did you arrive at the
conclusion that the BIS will not, or no longer, ensure the POG stays
above $280.00?

I look forward to your return, to hear your contributions to the
discussion. Thank You, canamami.

Canamami, They gain more leverage against the dollar with each new gold
short written. I believe they decided to allow the market to "implode"
when it became apparent that the US was going to encourage gold. This
political decision came about around the time that Mr. R. quit. As I
said earlier, they now hold a sword over the market that everyone should
be aware of. It could fall at any moment and end any further purchases
of gold at today's values.

I think the $280 price was based on an old formula they used long ago.
I'll offer it later when I have more time. Also note that the Euro was
never to rise against the dollar until the dollar fell from it's own
weight. The Euro was to become the "fallback" reserve currency that
received the flight from a failing IMF / dollar system. The BIS / ECB
was very surprise that it opened as strong as it did. Many who criticize
the ECB for not supporting it are the same ones who object to the "dirty
float" and "rigged" dollar. Yet, here the ECB is trying to offer a fair,
self evaluating currency and the speculators are crying for
"intervention"! No doubt the same ones that currently "intervene" in the
paper gold markets to save their skins. We shall see. FOA

FOA (5/31/99; 20:47:00MDT - Msg ID:6942) Reply tlc (5/27/99; 14:42:54MDT
- Msg ID:6798) paper gold contracts I am puzzled by the statement that
there is an excess of paper gold "shorts" in the market. It is my
opinion that you cannot just open a "short" position without an
offsetting "long" position being created. Can anyone shed some light on
this for me?

tlc, Hello, usually, the short side of a contract must (theoretically)
supply real gold to complete the transaction. The long side must supply
currency to complete. True, every position offsets. The problem arises
from shorts not being able to supply gold because they don't have it.
It's not that there are excess "shorts", rather no excess gold. does
this help? FOA

FOA (5/31/99; 20:39:01MDT - Msg ID:6938) Comment -------------Cassius
(05/27/99; 12:09:10MDT - Msg ID:6795) FOA's msgs 6766 and 6783
-----Also, could you please expound on your statement (msg #67660)"One
can also see why the US will encourage a higher "world" price for gold,
even as it's native market is destroyed!" This isn't intuitively clear
to me why the US would do so. Thanks for your shared insight.

Hello Cassius, I hope some of the recent posts added to your other
stated considerations. As for the US anticipated actions? It's the only
play available to them! They cannot sell their gold in quantity (see my
other posts) and the current shorting is based on the "equity" of the
local bullion traders, not the future supply of gold! That equity is at
"major" risk as I write. The dollar "will" be devalued with a rising
world gold price and there is nothing the US political factions can do
to stop it. As I said before, they will make as much political hay out
of an inevitable situation as possible. In that light they may close the
paper gold markets as they begin to fail from non delivery (a future
event). Then begin a series of verbal prouncements about "how much gold
the US has" and "how much backing it provides for the dollar". Remember,
gold is no longer the threat, the Euro is! Thanks FOA

FOA (5/31/99; 20:23:16MDT - Msg ID:6937) (No Subject)
-------------USAGOLD (5/27/99; 9:29:58MDT - Msg ID:6787) Today's Gold
Market Report: Central Banks Cannot Print Gold---------

Fine report USAGOLD! We should all read this again and save it!

FOA (5/31/99; 20:17:39MDT - Msg ID:6936) Comment ---------canamami
(5/27/99; 6:03:41MDT - Msg ID:6781) Brief Musings I only have time for a
couple of sentences. 1. The POG is not completely unimportant, even for
hardcore physical gold buffs. Would one still feel the same about gold
if it were valued at $10.00 per ounce, to use an extreme example? 2. The
recent and continued price slide appears to me outside of the realm of
the hypotheses of FOA/Another and must subject those hypotheses to
further examination, to any person who seeks objective verification of
hypotheses. Obviously, the BIS is not intervening to hold the POG at
$280.00. The POG has dropped more than a $5 to $6 fluctuation from about
$283. Our friends are learned, and I eagerly look forward to their input
on this, IMHO and respectful opinion, unpredicted weakness. Thank You,

Hello canamami, I know you posted again about this, but I wanted to
comment. If you have kept up with the massive writing here, I hope you
were able to grasp some of the other fine points made by all. In
addition I add: The range to purchase gold looks to be the same. Yes, it
has dropped further (another 10 lower?), but as the shorts attempt to
lower it, the physical market will, no doubt "discredit the paper
market" through a large disparity in prices. Soon, one may not be able
to purchase bullion as the entire system begins to break down. At the
point of breakdown, physical may not be available, except at much higher
prices. The "risk" is becoming obvious and clear, worldwide! We shall
see. Thanks, FOA

FOA (5/31/99; 20:02:57MDT - Msg ID:6935) Comment ---------------The
Flying Scotsman (5/27/99; 4:08:42MDT - Msg
ID:6779)Farfel.............Gold Price G'Day, Weel, it lokks like the
Gold price is going down like a "pork chop in a synagogue". This current
compression of the gold price, how long can it last ? If as FOA infers
that there are now two "Gold Camps", which one has the deepest pockets ?
The "other" markets, well they appear to be in and out like a fiddler's
elbow. Aye---------------

Hello and welcome Scotsman! Your question of "which one has the deepest
pockets ? Well it used to be that the one with the most gold made the
rules and maybe it still does. Currently, it's the geopolitical group
with the "world reserve currency" that holds the reins. However, this
new open market for gold is about to award that title to a new entity.
You see, it's not just "how deep the pockets are", but rather "what
supports them that counts".

FOA (5/31/99; 19:38:51MDT - Msg ID:6934) Comment -------beesting
(05/25/99; 22:57:14MDT - Msg ID:6742) Gold seen well supported near
lows. Flemings global
mining group said in a report: The unique liquidity provided by Central
Bank lending to the Gold market had prevented severe lease rate spikes,
allowing the market to be played for the short side for extended
periods.((3long years)). While it was hard to say when this dynamic
would change, for now and while there was negative sentiment,"this
structure creates an Achilles heel which invites attack,"Fleming said.
Click above URL for more.------------------

Hello beesting, Boy, "unique" is the right word! If I wanted to expand a
market, the best way to do it is to offer almost "zero" rates to finance
it, right? Then, after some 10,000 to 15,000 tonnes of gold were leased
around, I would control the equity of every player by controlling the
lending interest rates. The above "lease rate spikes" can easily be
created by withholding supply through open bidding for gold! It's a
political sword that the BIS now holds over the paper shorts. All the
market can do now is keep creating short paper by using "company equity"
instead of gold. In time, the entire paper gold market drowns in
"fictional" sales and becomes completely discredited as a true physical
supply source. What a mess for them! What a success for real gold!
thanks FOA

FOA (5/31/99; 19:18:33MDT - Msg ID:6933) Comment ----------USAGOLD
(05/25/99; 20:37:01MDT - Msg ID:6735) Stever.......and All.....

"For those who say this has been an exceedingly long and dark period for
gold, I would counsel that these cycles play out over many years period
of time. The stock bear market that started on a constant dollar scale
in 1965 did not come back to the level from which it first descended
until 1982-83. Similarly, the stock market high of 1929 was not reached
again until 1942. Bear markets can be long and merciless but always
darkest before the dawn. Gold's overdue, Steve, but I still wouldn't go
out and load up future's contracts or call options."------

Michael, A very nice post. I read it all. Your last item should give
people an idea of how long term these things can be. We must all
remember that the perspective that most analysts write from (the last
Barrons article?) is only using the action of gold from 1975+/-! They do
not allow the "history of paper currencies" to influence their thinking.
The US dollar is only some 30+/- years old when one considers how long
it has been off a gold standard. During that time it has created more
debt than has ever existed during the use of "any" form of money! Truly,
a failure of this modern paper would turn the current analysts of gold
on it's head and make the wait seem like only a moment in time. We will
see it happen and chronicle the results on this forum. thanks for
providing it, FOA

FOA (5/31/99; 18:57:01MDT - Msg ID:6931) Reply Cavan Man (05/25/99;
10:39:10MDT - Msg ID:6719) FOA & Another I am new to the Forum and the
subject near and dear. With the help of this Forum I am learning a great
deal. Many times in reading your posts I am uncertain as to the meaning.
Could you recommend a short reading list for my continued enlightenment
and edification? Many thanks!

Hello Cavan Man, It has taken me a lifetime to grasp how money is used
among nations. Hopefully, with the internet it will require only 1/4 a
lifetime for you. However long it takes, I can assure you it is an
interesting and useful endeavor. Sorry, I know of no short list? thanks
for reading and discussing

FOA (5/31/99; 18:43:56MDT - Msg ID:6930) Comment! -------TownCrier
(5/25/99; 9:30:58MDT - Msg ID:6717)---- Eddie Georte: British Gold Sale
"A Very Sensible Portfolio Decision"
l "He (Eddie George) dismissed accusations that the policy was a device
to prop up the ailing euroas 'conspiracy theory gone to extreme'.

Towncrier asks: "What happened to the days when central bank reserves
existed to defend one's currencies, not garner the best

TownCrier, The above is only part of your post, but still an important
part. Most of the public discussion concerning the BOE gold sales
revolves around the obvious. Such as "they sold gold to bring reserves
in line to join the Euro" or "they leased gold earlier and now this move
is just to cover those leases gone bad" or it was "open manipulation
because they announced it first in order to push down the gold price".

My point all along was that they did none of the above. Your statement,
TC, is the closest to the truth. Let me explain:

If they (BOE) were selling gold as a direct course to join the Euro,
they would have handled it exactly in the same manner as the Dutch and
other EMU nations did. Sell the gold quietly and direct it towards
contract completion. This was done quietly to bring the best trade and
to deliver the gold into "private EMU friendly" hands. All of the pre
EMU deals were done in this fashion and the BOE would have done the same
"IF" the purpose was for "reserve balance" prior to Euro application.

It is true that they are active in the gold leasing market. No one would
expect anything less when the members of the LBMA are so very close to
the BOE. I believe one of the members is the very agent for the
government! (Someone here should be able to help confirm this for the
group). However, this new sale of gold could never be used to "square
the books" for gold already leased because the old leased contracts were
done at a much higher price. The "auction" would have to be concluded at
a much higher price than today for the numbers to match. A rare event,

The open announcement of sales did move the dollar price of gold, but
that was not the purpose of this "verbal action". They had no choice but
to announce, because they (BOE) were about to sell "unencumbered"
physical vault gold to LBMA members. It was an obvious public statement
to show that the LBMA had a "line" on "freed up real gold" to satisfy "a
pressing situation"! Someone in the world community needed to know that
this "future" gold was available with no way to reverse the sale. A
public statement does just that! The credibility of the BOE to perform
was put on the line. Otherwise, the sale would have been held quietly
and privately, over time, just as the EMU sales were.

Back to your item, TC, "What happened to the days when central bank
reserves existed to defend one's currencies, not garner the best
returns?". Well you have hit the nail exactly upon the head. This BOE
gold "IS" currency reserves and it was being used to defend the
currency. Only, it was not the pound that was being defended, it was the
dollar! As USAGOLD once said, some nations grow weary of using their
reserves to back a foreign reserve currency, so to do the british grow
tired. Because they were part of the IMF / dollar faction (thanks again
Steve #6820), England used the services of the LBMA and the gold
reserves of the BOE to help strengthen the dollar. They expanded the
gold supply (and world ownership) by selling various paper gold
securities. They did this because the dollar is "their" reserve currency
also, it mainly backs the pound! Today, we come to a point where a major
reserve currency change threatens every dollar holding nation, and
London is in danger of becoming the "odd man of Europe" during this
time. With the BIS having succeeded in leveraging the dollar into the
brink of "implosion" Briton must make a dash for the EMU, even if the
resulting "dollar slaughter" will destroy their LBMA through an
exploding physical gold price. This, my friends, is what the BOE gold
sale is all about. They are clearly saving a small portion of their
bullion bank empire prior to EMU. The sale has nothing to do with
"balancing reserves" to meet ECB criteria.

Many words to make a small point. On to other comments. FOA

TechnicianWhy a bottom?#70116/1/99; 20:56:19

I have been asked by the forum why I think interim lows are in. Honestly, my indicators do not indicate a buy only an oversold situation. But commodities can become more over sold. My opinion is simply a conclusion of contrary opinion and my oversold indicator. Good for buying coins and mining stock but not futures. I will make that call when I see it;)
Golden TruthWho is buying the Gold???#70126/1/99; 21:18:44

I know there has been some one here always asking who is buying all the Gold? I believe its the U.S.America, thats right. Due to fear of losing control of the Gold market and then no longer being able to make deals. They are letting the shorts continue to keep this ball rolling for there accumulation program,you can't really believe they don't know what is happening or that they are not accumulating. They know they have 15 Trillion in i.o.u's out and 6 Trillion in federal debt. If one billion oz's of Gold are amassed at an average cost of $320/oz and the price is upped to $3000/oz. The Goverment now has 3 Trillion in assets to back up their debt.Hopefully enough to persuade the holders of the debt currency not to trade it in for the EURO. The Euro will likely replace the dollar as the Worlds currency by early next millenium. The Euro may go straight to E-cash and eliminate hard currency altogether. The talk about Euroland breaking up and the Euro failing? NO CHANCE. Y2K will see to any adjustments that are needed. The Euro will survive and then DOMINATE!! The money flow will likely move this way : US dollars will move to buy cheap Gold and Silver-especially in the U.K where Gold must be purchased in US dollars. WHY? I will leave that up to your imagination. Once the smart money trades inflated US dollars for GOLD , Y2K will reverse the play. GOLD will then be traded or used to obtain a large amount of EURO's before dropping back down. thanks Golden truth.
AristotleRead this link. You will know EXACTLY why Gold is your friend, even when its value is obtainable with fewer dollars.#70136/2/99; 0:06:43

Excerpt from an article that documents the hell that some tech stock owners are feeling:

For people in option limbo, the theory goes, dips in the market become emotional catastrophes. In the age of the day trader, when stocks can soar and fall dozens of points on innuendo alone, any given day can be a disaster.
"People come in, and they're suffering so much from the anxiety of it all they can't even work," says Stephen Goldbart, a clinical psychologist.
When a company's stock flames out for good, it leaves behind charred souls.
"There are all these fantasies about the good life, a life most of these people have never lived, and suddenly it's taken away," says Goldbart. "They get frozen and numb around issues of money. It's almost like post-traumatic stress disorder." [click the link and read it all...quite pathetic, actually. Poor saps. I've never heard a tale of a Gold coin going bankrupt, particularly during the worst of times. Why fret your life away? Sheeeesh.]

And think about this element, also. As surprising as these downward movements are, it should not be difficult for any reasonable mind to conclude that any and all of these Gold price movements (including any future surprises) could as easily be to the upside.

Review the fundamentals.

All evidence suggests that the dollar's strength is on borrowed time. While it is taking a bit of a scenic route to get there, the 30-year bond is heading south. The dollar is truly a castle built in the sky. When it falls, so will the purchasing power of all cash savings. Gold is safe. Gold is real.

Sure, the argument could be made in HINDSIGHT that a person would have been better off to hold on to his life's accumulated cash savings, to swap for Gold not one moment prior to these current prices; but then again, who knows IN REAL TIME which direction the next move will be? As I offered, it could have been UP just as easily. We'll get there, and with far more Gold than the late-comers! And in the meanwhile, isn't it true that we are not on emotional pins and needles to the extent of those tech stock traders? Isn't the right life a wonderful one indeed? Just like good ol' Aragorn, call me "Mr. Serenity."

Sir Golden Truth asked, "Who is buying the Gold???" Well, I can assure you now that my bills have been paid for the month, I AM! With a constant salary, and fairly constant expenses, this could turn out to be my heaviest "paycheck" yet, with the latest Gold/dollar exchange rate giving me a de facto raise in my metal salary! You can make paper money, or you can make Gold money. Now more than ever, the choice is an obvious one.

Gold. Make you some. ---Aristotle

AristotleThe possession of Gold has ruined fewer men than the lack of it. --Thomas Bailey Aldrich#70146/2/99; 0:39:17

It is extraordinary how many emotional storms one may weather in safety if one is ballasted with ever so little Gold. --William McFee (1881-1902)

Like liberty, Gold never stays where it is undervalued. --J.S. Morill (1810-1898)

There can be no doubt that the international Gold standard, as it evolved in the nineteenth century, provided the growing industrial world with the most efficient system of adjustments for balance of payments which it was ever to have, either by accident or by conscious planning. --W.M. Scammell (1920-)

Truth must be ground for every man by himself out of its husk, with such help as he can get, indeed, but not without stern labor of his own. --John Ruskin

Though wisdom cannot be gotten for Gold, still less can be gotten without it. --Samuel Butler (1835-1902)

Gold opens all locks, no lock will hold against the power of Gold. --George Herbert (1593-1633)

Gold is pale because it has so many thieves plotting against it. --Diogenes (412-323 B.C.)

[thanks to MK for these quotes which were gathered in his ABC's of Gold Investing book. And thanks, also, for this month's newsletter...though I can't believe you found the stomach to quote J.M. Keynes in the header, even though the sentiment expressed was appropriate. But C'mon, MK...Keynes?? Will Rogers never met him, I'm sure of it.]

Gold. Get you some. ---Aristotle (1999)

Oregon GeezerPeter Asher's message #7008#70156/2/99; 2:56:13

You sounded a little surprised that Sen. Ron "The Weasel" Wyden did not know about any possible selling of IMF gold. For decades I have lived in The Weasel's district when he was in the House of Reps. Getting some rational thoughts through to him from a conservative perspective is like pushing a rhino through the cat door. He's a dyed in the wool socialist and so he would not give a damn about the selling and buying of gold no matter the consequences unless that activity would benefit the poor, children, hobos, bums or other targets of "compassion." I wrote him off a long time ago.
SteveHAugust gold now...#70166/2/99; 5:23:40

Peter AsherGeezer#70176/2/99; 6:49:32

Acoding to what you say, the sale of IMF gold for the purpose of relieving poor nations of debt,would have made him a staunch advocate. Actually he appears to be the antithises of a socialist. "It is not the place of Government to create job's, that is for the private sector to do". "The problem facing most Issues today is that each of several opposing groups has just enough power to stop things, creating political gridlock."
Peter AsherCavan Man#70186/2/99; 7:13:39

Regarding your posts <I cannot comment on the EU. I do not have the knowledge to give an opinion. Having travailed a bit internationally and having reached the conclusion from my travels abroad that "humanity" shares many common threads, I want to assume the EU has similar problems across the board.> And, <Mr Asher: I love this country dearly but the signs (of problems) are everywhere.> (Which were in answer to my #6941 of 5/31 "Dollar-Euro")

The above URL may shed some light.

Excerpt -- "There is little doubt that the dollar has got problems but the euro
has got even bigger problems," said David Bloom, currency
strategist at HSBC Markets in London.

USAGOLDToday's Gold Report: Gold Hovers, Euro Record Low, Dollar Nears 1990s High#70196/2/99; 8:22:54

MARKET REPORT(6/2/99): Gold hovered near yesterday's levels as the dollar
strengthened against most currencies, but most notably the euro which fell below $1.04 and
set a new lifetime low. Reuters reports this morning that European Central Bank (ECB)
president Wim Duisenberg "failed to throw the euro a lifeline." Interventions decoupled
from strong economic policies usually have a short term effect on the market and the ECB is
attempting to send a message that is more interested in the medium to long term with respect
to the currency, as a opposed to a quick fix. In lieu of all this the dollar is approaching its
high against most currencies for the 1990s. Gold broke to the $266 level in Asian trading
overnight but then recovered in Europe on "modest" short covering. The Reuters London
report quotes one Australian security analyst as saying that he didn't think Australian mines
would be shutting down unless the price went to $260 -- an assurance that had more than
one mine company shareholder blink and re-read the statement to make sure it was
understood properly.

There has been quite a bit written on the Bank of England (BOE) sale and we won't belabor
what has become a well-studied event, but we just had to pass along this short analysis
from the Standard Bank of London: "The UK announced its decision to sell more than 400
tons of its gold reserves on May 7th and have subsequently explained the move as simply a
portfolio investment decision, looking to shift into higher yielding assets. Since then gold
has fallen almost 8.50% in less than a month and they have not yet sold an ounce. Not very
clever!" I'll second that.

In other gold news, Bridge News reports a senior official at the World Gold Council as
saying that "World gold prices have hit bottom and begun to stabilize, providing a good
opportunity for buyers." Bridge also reports strong buying in China as the People's Bank
of China cut prices by 7.4% last week.

That's it for today, fellow goldmeisters. More later if anything crops up.

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

TownCrierGreenspan mum on U.S. rates, warns on free trade#70206/2/99; 11:22:03

"We try to promote free trade on the mistaken ground that it will create jobs. The reason should be that it enhances standards of living through the effects of competition on productivity." -----FRB Chairman Alan Greenspan
TownCrierSales of New Homes Up 9.2 Percent#70216/2/99; 11:31:53

April single-family home sales jump 9.2 pct from March to seasonally adjusted 978,000, far exceeding the 890,000 forecast. It is the second highest level on record.
TownCrierEuro Sinks to Record Low, Duisenberg offers comments#70226/2/99; 11:42:01

"I'm inclined to play down short-term volatility moves in the exchange rate," he said after the bank's regular biweekly meeting. "In the long run, I see more factors pointing at an appreciation of the euro than at a depreciation of the euro."

Also said that Italy was within the rules, and that any weakening of the adopted strict fiscal/budgetary criteria "would be a real reason for concern" for the euro.

That makes it sound distinctly different than the dollar, doesn't it?

TownCrierMore euro news you can use#70236/2/99; 11:57:16

"The euro is a currency firmly based on internal price stability and therefore has a clear potential for a stronger external value," and the ECB will refrain from a currency intervention.

The former Italian prime minister said, "I think we will have a strong euro in the future because there will be the conditions for this to happen."

TownCrierBonds Drop on Home Sales Report#70246/2/99; 12:03:52

The bond market is running scared...
TownCrierRate Fears Ratchet Up the Pressure on Net Stocks#70256/2/99; 12:09:14

Summary of stuff that someone thought was worth writing about. Inflationary pressures and what not...
TownCrierGold news you can use#70266/2/99; 12:18:56

Karachi--Jun 2--World gold prices have hit bottom and begun to stabilize,
providing a good opportunity for buyers, according to a senior official of the
World Gold Council. By Fakhr Ahmad

Tokyo--Jun 2--In the wake of overnight fears of a crash in US stocks, the US
dollar traded almost flat against other majors today as players remain wary of
the US Federal Reserve's next move and its possible impact on US markets. By
Rika Yamamoto

Hong Kong--June 2--China's gold consumption is expected to rise after the
People's Bank of China, the central bank, cut purchase and sales prices of
the metal last week, the official China Daily reported today. PBOC cut the
purchasing price of gold by 7.4% per gram last week, it said. The paper did
not provide current purchase and sales prices of gold. Bridge News

Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission

CoBra(too)The Kosovo price?#70276/2/99; 12:23:42

@ Golden Truth Msg. 6999 & Jinx44 Msg. 7002

I do know about the Trepka & Stari complex (chrome, zink, copper & lead), as I know about huge copper/gold mines and huge potential in Albania itself. Both complexes are poly-metallic and, yes, potentially huge, with even some PGM-potential in their ultramafic layered geology.
Having been in mining finance for a long time I'm always wary of multibillion (trillion) $ deposits or deals. I must admit, I'm not aware of the Greek deal and frankly, I feel that noone ever would consider, or would come close to the financial means of backing such a megabucks deal.
Living close to the Balkan's, where some in this country sarcastically feel it's beginning right before the SE border of our capital - fortunately my place is located west of the place - I have been whitness to the misery of ethnic cleansing of former Yugoslavia. Starting with Slovenia, which did not work out, but even some of our border towns were affected. Croatia was already a major struggle, Bosnia-Herzegowina is still not settled in reality and the Dayton settlements do not work, since they did nothing to factor the centuries of ethnic hate into the "truce", like Croatian Ustascha's vs Serbian Chetnik's becoming the ultimate of brutality, or even bestiality during WWII.
Kosovo, is the historical battleground, where the Serbian nobility rallied around their king at the famous battle of the "Amselfeld" in 1389 and ended with the complete subjugation of Serbia under Turk(ish)Rule for centuries. The dream of greater Serbian kingdom is older than the millenium. It always stayed a dream.
Slobodan Milosevic is hopefully the last of the Balkan tyrants to dream this impossible dream - and he is responsible for several hundred thousands victims and millions of displaced refugees. (In WWI the Austrian Emperor , Franz Joseph,was qouted: "Serbien muss sterbien" -Serbia has to be eliminated)
In view of the ongoing ethnic cleansing and the resulting slaughterhouse it is time to stop this madman, though I agree it is a European problem. Europe, almost 55 years after the devastating war is, at this time not ready to (politically)shape its own fate, but working on it.
As we can see the US PPT (plunge protection team) is recalling every favor , once granted to keep up the rest of us to finance the (paper) asset bubble - and at this stage global consensus is leaning in the direction of complying, since alternate scenarios are spelling doom (systemic risk?), we may not want to risk.

That is part of my believe in the l.t. success of the euro currency and of the l.t. proven qualities of gold as the only historical medium of fair exchange, barter or more to the point valuation of reality. While hoping, together with AG, RR and the rest of PPT, for a soft landing solution, I have given up hope in view of the uncontrolled (hedge) monsters now dictating, where the global economic, currency and human capital is headed. - YOU BET! -

(I disassociate myself from any typos, this message is unrevised-) Regards CoBra2

TownCrierHear ye! Hear ye! #70286/2/99; 13:46:09

THIS WEEK IN GOLD has now been updated!
Follow the link above to view gold market commentary from World Gold Council staff for the past week (May 24 - May 28, 1999). It looks like the people of India will be "making gold" this year. Let's join in!

TownCrierNY Precious Metals Review: Aug gold dn $2.4, still pressured#70296/2/99; 13:54:35

By Melanie Lovatt, Bridge News
New York--Jun 2--COMEX Aug gold futures settled down $2.40 at $267.10
per ounce after revisiting Tuesday's $267 contract low. Traders said that
the market remains beset by bearish sentiment, following its move Tuesday
to yet another fresh 20-year low on nearby continuous charts. While some
of today's selling pressure was tied to options activity, the market as a
whole was subdued.

One trader noted that the buying of Jly puts at $260 had helped
selling and shows that the outlook is still negative.
Leonard Kaplan, chief bullion dealer at LFG Bullion Services in
Chicago noted that put options are also clustered at the $265 level. "The
closer we get to $265, the more accelerated the move will be due to delta
hedging," he noted.
"It's not easy to stand in front of a runaway train." However, he
suggested that today's price slide was due "more to a lack of buying" than
"big selling pressure."

He noted that this is understandable, given that the news remains
bearish with gold's fall to 20-year lows "not a psychological highpoint."
He said that many feel they have no need to buy ahead of the UK
Treasury's first gold auction set for Jly 6.

However, the first two to three UK Treasury gold sales could be the
key to a turnaround in the gold price, said Kjeld Thygesen, managing
director of the UK's Lion Resource Management Ltd. and advisor to the
Midas Fund. "If the first two to three auctions go well and are
oversubscribed, this may be the bottom of the market," he said.

Tony Caen, senior precious metals dealer at Credit Lyonnais Rouse,
said that "volume seems to be tailing off as people figure how to trade at
life of contract lows."
"People are only trading gold when they really have to do something,"
he said.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN.

TownCrierEchoes of the Fifth of rising oil#70306/2/99; 14:04:49

London--Jun 2--1229 ET--Saudi Arabia is confident OPEC members were in
full compliance with oil cut pledges in May, a Saudi official said. The
official also said Saudi strategists still expected oil prices to rise in
the "next few weeks" as reduced oil supply affects the market. By Mona

New York--Jun 1--Based on the significant decline in oil export loadings
to 20.935 million bpd in the first 2 weeks of May from 21.36 million bpd
in April, OPEC countries are continuing to make strides towards reducing
output, according to tanker tracking data. Forward tanker charter data
also reveals the downward trend in OPEC exports is likely to continue
through June. By Karyn Peterson and Carola Hoyos

Tallinn--Jun 2--1021 ET--Latvian oil terminal operator Ventspils Nafta's
total loaded crude oil and products in May fell 4.5% to 1.924 million
tonnes, from 2.015 million tonnes in April. By David Mardiste

New York--Jun 2--1017 ET--Iraq exported an average of 2.44 million bpd of
crude oil in the week to Friday under the UN's oil-for-food deal, compared
with 2.2 million bpd in the previous week, according to a UN report. The
higher-than-usual export volume came during the week Iraq and the UN
agreed to extend the oil-for-food deal for another 6-month round. By
Carola Hoyos

London--Jun 2--0659 ET--OPEC is likely to agree to extend the oil
output-cuts package that came into effect Apr 1 to support oil prices, an
OPEC official said.
The comment comes amid words of caution from Venezuela's Oil Minister Ali
Rodriguez, who said on Friday that it was too soon to consider such
action. By Alex Lawler

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN.

TechnicianBuy more gold coins, not futures#70316/2/99; 14:47:29

We goldbugs have a lot of competition. Higher interest rates, a stock market which is not so dead, yet, and an incredibly (for time being) strong $. Dollar average bullion coins until the moment arrives for derivatives. By the way my purchase of Durban deep yesterday hasn't budged. Still 1 7/8 last I looked. All this touting on Eagle, USA and KITCO (what happend to KITCO?) just to get me to help support the price or is it for real? By the way, if you visit my web site, try the zip code weather channel. One of best I have seen with local doppler..every thing. Keep the faith!!! Gold looks a lot better in just about any other currency.
TownCrierTea leaves for the day#70326/2/99; 14:48:41

Most IMM currencies, led by euros, end sharply lower
Quixotea parable#70336/2/99; 14:57:06

a stock broker and a gold heart were crossing the atlantic in an airplane. halfway through the flight, the co-pilot announced that there was a problem. "the plane only has one hour of fuel left, and we're still two hours from the coast." he admitted, but then continued. "not to worry, this is a small airplane and we carry enough parachutes for all our passengers. we will fly as far as we can and then jump when the plane runs out of fuel". he then proceeded to the back of the plane and began to hand out the parachutes, but was interrupted by the stock broker.
"hold on! there's no need to hand out the parachutes yet." insisted the broker. "we still have an hour of fuel left, and there's no need for us to sit here holding bulky parachutes. if we hold onto our tickets, you can exchange them for parachutes when the time comes."
"what!" the gold heart exclaimed. "i want my parachute now!" but he was not heard over the commotion as the passengers frantically searched their belongings for their tickets. concerned, he struggled to the back of the plane and convinced a stewardess to trade him a parachute for his ticket. he then returned to his seat and waited.
as the plane flew on, the co-pilot counted the parachutes, did some quick math, and announced "two parachutes are now available for each remaining ticket holder."
"the remainder of us will each have a reserve chute." boasted the stock broker to the gold heart.
after an hour the plane engine sputtered and died. the passengers rushed to the back of the plane where the co-pilot began handing each passenger two parachutes. at the back of the line, the broker saw the gold heart headed for the open door with his single parachute. "don't you wish you'd waited to exchange your ticket until the co-pilot had counted the parachutes?" he asked.
"no." replied the gold heart as he stepped into the doorway. "the co-pilot's the one who fueled the plane."

AristotleHey Quixote, great parable!#70346/2/99; 16:02:38

I wonder how many of the passengers actually recieved their two parachutes, and how many had nothing but tickets to flap as the plane went nose down?

Keep 'em coming!
Golden parachute. Get you one. ---Aristotle

Golden TruthGold For Silver?#70356/2/99; 16:03:15

I've come to the conclusion that GOLD can't drop any lower than the price of SILVER. Which at that time i will trade or swap all my 2KG for 2KG of Gold. If i,am really smart i'll probabably wait until the buyers of "puts" drive the price down to $1/oz, before i swap over. That way i can make a 400% profit and take home 10kgs of Gold for my 2kgs of Siver. Now just imagine if Silver rallies and doubles in price,the upside potential is fantastic. Yes folks i know your probabably saying why not wait until it goes lower than a $buck. All i can say is i guess i,am just not that greedy unlike our paper shorting @#%&*(()!~ buddies. Now get out there and buy some Silver i have,nt lost any money on it since i bought it. Which was the same time i've purchased Gold and since have lost $20/oz US. REMEMBER folks the once in a lifetime (millenium)deal to trade Silver for Gold only comes once every thousand years. I can honestly say i'll be quite happy not to be here for it next time either. On a more serious vein there definitely seems to be a two teir market our so i,am lead to believe. It absolutely bewilders me how Gold can be the at a 1979 $price in 1999? When you can not buy a house today at a 1979 price even if the dollar is at 1999 high, which to me means that a house should be cheaper. Also we know that the dollar today has lost most of its purchasing power so that if you compared what $100 in 1979 bought compared to what $100 in 1999 bought you would see a BIG BIG diference?? Iwould say it would be equivalent to buying an oz of gold at $265 in 1979 to an oz of gold costing $2650 dollars in 1999. What the Hell is going on? are all the currencies of the World being destroyed that people from other parts of the World can no longer afford to buy Gold no matter what the price is. Due to the fact that no matter how low Gold goes their currencies go lower? If that is truley what is going on WOE WOE to the World for ther will be a DEPRESSION this Planet has never seen the like of before. ANY PRUDENT COMMENTS WELCOME!!! ( I Smell Fear!) Golden Truth
CoBra(too)Delta Hedging...#70366/2/99; 16:06:17

Seeing all those beautifully construed hedging facilities - after all, one of the Black-Sholes noble laureats, winning his hard earned price by placing his mathematically correct rocket scientific (equations) or is it bets based on delta option theories - even the Greek alphabet allows for 24 letters, so how about "omega options/" - was in need of the first in history bail out of a 'hedge fund" called Long Term Capital Mismanegement(name implying insurance towards the vagaries of "off"-markets).
LTCM, the former cheer leader of the gang(-sters)completely misinterpreted the term "hedging" and the the new era technical translation of the day became known as leveraging, which again is a future bet, equivalent to the state lottery. But there is one distinct difference. While the state lottery strives by taxing the herd of unsuspecting happy sheep, the hedge funds invented the economical method of taxing the (greedy) banking establishment, or the shepherds of the new derivative way - akin to greenmail - where there is no escape outside of systemic risk - hence the necessity of PPT - and now the necessity of providing insurance against counterparty risk (an euphemism of an 80 trillion $ derivative, overleveraged, carry trade risk of the banking community? of mostly 10 (et al bullion) banks.

Euro currency may have been the catalyst to put the brakes to the total and global dollarization, for the short term, while gold will be the Alpha to Omega to put the $-printing press of ever more IOU's to rest and test.

$265/oz of AU - make you some more ....

beestingA different way of measuring the current worth of paper currency.#70376/2/99; 16:49:55

At 10:30 A M (New York time) it took 257.62 Euro's to buy one ounce of Gold at world spot price.See above URL.
If Mr.FOA's analysis for the future turns out to be correct, in the long term, we all should get used to pricing Gold in Euro's.
Now, since the introduction of the Euro it has been valued in relation ship to the dollar.A paper fiat currency.
All paper fiat currencies flucuate wildly in relation to each other,because of(you name it,political reasons,economic turmoil,wars,financial manipulation,press releases,and many more reasons)Gold remains Gold no matter who got elected,who bombed who,or who's economy changes radically.
When you value the Euro to Gold(real money), instead of the dollar, since its inception'see what it has done.I don't have charts available to do this but some-body out there may.

So,despite all the negative news about the Euro it still took more dollars(about $266) to buy an ounce of Gold than it did Euro's.(257.62) Therefore we can conclude of the two currencies the Euro is the strongest in relation to purchase of Gold at present.

In other local news,went to town today and did my part to create a shortage in Gold.(bought physical)Local coin shop said no unusual volume in sales today,the locals think the price is going lower.
Ran into an old friend whose family used to own a Gold mine, but since lost it,and she related'some locals had recently donated a 9 OUNCE nugget,to the local museum,found many years ago not too far away.
There's still Gold in them thar hills.........beesting

SteveHAugust gold now...#70386/2/99; 17:44:39


Date: Wed Jun 02 1999 17:19
SteveIS (Euro vs. Dollar) ID#286353:
Copyright © 1999 SteveIS/Kitco Inc. All rights reserved
Volker said that the whole world economy depends on amazon.bomb. Amazon depends on the PPT. The PPT depends on gold leasing for their rescue missions.

Neither Europe nor Japan nor China will endanger the PPT operations. They will prepare for the inevitable failure by buying gold. But not in a way to upset the market. The idea of ANOTHER that the EURO would challenge the dollar is simplistic. The Europeans are happy to have our economy support theirs. They are happy to let us spend our money defending them. They are happy to buy gold cheaply.

They fear a disaster in our financial markets however. After the disaster gold will be necessary to clean up the mess. Meanwhile no world governments want to rock the boat. Rubins goons have free reign to bloody gold.

Smell blood?

Be a shark. Snap it up!


SteveHSteveH not equal to SteveIS#70396/2/99; 18:04:03

SteveIS post is from kitco and is not me. Just a good message.

Look at this (good thing computers exist, how else could they track all this? Y2K...hmmm!):

Press release Press enquiries: +41 61 / 280 81 88
Ref. No.: 22/1999E
2 June 1999

The global OTC derivatives market at end-December 1998
The BIS is releasing today for end-December 1998 the second set of semiannual statistics on positions in the global over-the-counter (OTC) derivatives market under the new regular reporting framework. The statistics include the notional amounts and gross market values outstanding of the worldwide consolidated OTC derivatives exposure of major banks and dealers in the G10 countries1. They cover the four main categories of market risk: foreign exchange, interest rate, equity and commodity2.

After adjustment for double-counting resulting from positions between reporting institutions, the total estimated notional amount of outstanding OTC contracts stood at $80 trillion at end-December 1998, an 11% increase over the revised $72 trillion reported for end-June 1998. This expansion led to a rise in the market share of OTC derivative instruments relative to those traded on exchanges (from 84% to 86% - see Table 1)3.

A strong increase in interest rate and equity-linked contracts (18% and 17% respectively) more than offset the decline in foreign exchange and commodity contracts (by 4% and 8% respectively). Interest rate instruments thus remained by far the largest component of the OTC market (72%), followed by foreign exchange products (26%) and those based on equities and commodities (with 2% and 0.6% respectively).

Much of the expansion in business over the review period can be attributed to the financial turbulence that followed the Russian debt moratorium and the near-collapse of LTCM. This was particularly true in the interest rate segment, where the widespread unwinding of leveraged positions led to an upsurge in interest rate swaps. The increase in interest rate contracts was particularly pronounced in the Deutsche mark (42%), yen (36%) and Swiss franc (25%) segments. While this reflected the ongoing development of derivatives markets outside North America, in the case of the mark it may have been related to the growing benchmark role of German instruments. The financial turbulence of the second half of 1998 also appears to have had an impact on the sectoral distribution of activity, with a notable concentration of interest rate business within the group of reporting dealers (rising from 43% to 49%).

In the area of equity contracts, the sharp drop of equity markets prompted investors to seek protection, leading to a significant increase in related options. There was, however, a marked contrast between the various regions, with positions held on European and Japanese equities rising strongly and those on North American stocks dropping sharply. While European business appears to have benefited from the growing popularity of retail-targeted investment products, Japanese activity probably received support from the liberalisation and legal clarification of OTC trading. The drop in US and emerging market transactions seems to have been related to the cutback in leveraged transactions, since much of the reduction was in business with non-reporting financial institutions.

In contrast, the sharp swings seen in the major currency pairs in the second half of 1998 do not seem to have been associated with a higher volume of open positions in currency instruments. Indeed, while currency contracts were stable overall, there was a major drop in the options segment. The reduced demand for such products has been attributed to a number of factors, including the withdrawal of leveraged investors in the wake of the Russian moratorium and the near-collapse of LTCM, the stability of European cross rates and a reluctance of investors to deal in emerging market currencies. Moreover, the sudden weakness of the dollar was associated with a substantial increase in market volatility, which made intermediaries reluctant to take positions and pushed up hedging costs for customers (as seen in the reduced stock of contracts held by non-financial customers).

The various market segments continued to demonstrate a number of idiosyncracies. Thus, while there was a rise in the average maturity of interest rate contracts (with 36% maturing within one year compared with 41% at end-June - see Table 3), the share of short-term currency-related contracts increased further (from 87% to 88%). Furthermore, the dollar was the counterpart to 88% of foreign exchange transactions, but only to 28% of interest-rate-related positions.

There was a 25% increase in estimated gross market values in the second half of 1998, to $3.2 trillion. However, taking into consideration the increase in the overall stock of transactions, the rise in market values was less significant, from 3.6% to 4% of reported notional amounts. It should be stressed that such values exaggerate actual credit exposure, since they exclude netting and other risk reducing arrangements. Allowing for netting, the increase in the derivatives-related credit exposure of reporting institutions was much smaller, rising by $0.1 trillion to $1.3 trillion (or to 12% of on-balance sheet international banking assets). The ratio of gross market values to notional amounts varied considerably across individual market segments, ranging from less than 1% for FRAs to 30% for equity-linked forwards and swaps.

1The notional amount, which is generally used as a reference to calculate cash flows under individual contracts, provides a comparison of market size between related cash and derivatives markets. Gross market value is defined as the sum (in absolute terms) of the positive market value of all reporters' contracts and the negative market value of their contracts with non-reporters (as a proxy for the positive market value of non-reporters' positions). It measures the replacement cost of all outstanding contracts had they been settled on 31 December 1998.
2It should be noted that the development of sophisticated trading strategies, the expansion of cross-market linkages and regulatory arbitrage have made it more difficult to interpret the evolution of individual market risk categories.
3The closing-out or modification of existing OTC positions generally results in the creation of new counterparty relationships, whereas most exchange-traded positions can be unwound through opposite contracts and are in most instances reversed before contract expiry. It should also be noted that non-financial contracts and options on single equities are excluded from the BIS data on exchange-traded activity.

SteveHWhat a bunch of munk!#70406/2/99; 18:15:41

June 2, 1999

ORONTO -- The price of gold has fallen to levels unseen in more than 20 years. But
that does not seem to faze Peter Munk, chairman of the Barrick Gold Corp., one of
the world's biggest and most profitable mining companies.

"I'm not a gold bug," Munk said. "I didn't form Barrick because I love gold. To me it was a
fabulous business opportunity." Even in the current market, he said, the company produces
gold for less than half the price it gets, and "to me, that's like paradise."

Munk's appraisal of the gold business has not shifted, even though the price has fallen from
more than $400 an ounce three years ago to $267 late Tuesday. The most recent reason for
the decline is the announcement by Britain last month that it would sell half its gold reserves,
aggravating oversupply fears.

Certainly, higher prices would make Barrick even more profitable. But it is now "the most
profitable gold company in the world," Munk said. So his concerns are not those of the
world's gold traders and speculators.

Munk, 71, has been involved in other businesses -- stereo manufacturing, hotels in the South
Seas, oil and gas -- with mixed results. But he has done exceptionally well with Barrick,
which he helped establish in 1983. Today it mines gold in Ontario and Quebec provinces as
well as in Nevada, Peru and Chile.

Last year, the company earned a record $301 million on revenue of $1.3 billion, even though
the average spot price for an ounce of gold was $294 in 1998, down from $332 in 1997.

Barrick fared well for three reasons. It mined 5 percent more gold, lowered its operating
costs by 12 percent to $160 an ounce, and sold its output for an average price of $400 an
ounce by hedging -- selling gold it had not yet produced.

Not one ounce of gold Barrick has mined has ever been sold for the market price. Working
with investment bankers, it sells contracts for future delivery and invests the proceeds from
those transactions in high-quality securities. After commissions are paid, Barrick records the
gains from its investments as part of the selling price for gold.

So while the price of bullion has been falling hard, Barrick stock has held up quite well. On
Tuesday, Barrick shares traded on the New York Stock Exchange fell 31.25 cents to
$16.9375, well within their 52-week range of $12.875 to $23.625.

Several precious-metals analysts expect Barrick's profit to keep rising because the company
is less reliant on high-cost mines and is expanding low-cost operations. In a recent report,
HSBC Securities in Toronto said it expected Barrick's profit to rise to $334 million, even
though its average selling price for an ounce of gold is projected to fall roughly 4 percent, to

During a recent and rare interview in Toronto, Munk described Britain's proposed sale over
two years of 415 metric tons of gold, or 913,000 pounds, as a relatively small quantity that
had provoked a knee-jerk reaction. "There is nothing that this market can come up with in
terms of bad news that has not been totally digested by the main holders," he said.

Unlike longtime gold bugs who fret about the vulnerability that has settled around gold,
making it no different from other commodities, Munk said he thought the price of bullion had
been amazingly strong. Had he been asked 10 years ago what sales from reserves by
governments would do to the price, "I would have said it would have been between $40 and
$50" an ounce.

But this degree of price resilience in the face of bad news, he maintained, "really proves that
gold has a fundamental balance of value as a commodity that is supported by healthy demand
that is created by the world's population getting wealthier."

Nonetheless, there are reasons why the world commodity price of gold is languishing. Other
experts point out that gold no longer plays a key role in world financial markets or as a hedge
in investment portfolios. Moreover, some of the biggest owners of gold are selling. Central
banks in six countries -- Canada, Australia, Belgium, the Netherlands, Argentina and the
Czech Republic -- have already sold bullion from their reserves. Joining Britain will be
Switzerland, selling more than 1,000 tons. The International Monetary Fund may also
become a seller.

The new European Central Bank has determined that its member countries will commit gold
for 15 percent of the reserves backing the euro currency. But according to the Gold Survey
for 1999, published by Gold Fields Mineral Services Ltd. of London, three countries have
considerably more gold -- Germany, with 32 percent of its reserves in bullion, France with
40 percent and Italy with 45 percent.

The possibility that chunks of these holdings, totaling 10,000 metric tons, will spill into a
market with total annual demand just over 4,000 tons worries speculators. The United States
has more than 8,000 metric tons, according to the Gold Survey.

Other forces at work in the financial markets are hurting gold.

One has been the lending of gold by central bankers to hedge funds, which have sold into the
market with the hope of repaying the banks later with cheaper bars. Interest on this lending is
a source of revenue for the central banks. The other has been distress selling within battered
Asian economies, which led to a large increase in what is known in the industry as scrap
supplies. Last year, scrap rose 70 percent to almost 1,000 tons, Gold Fields said.

Munk expressed belief that the gold market would absorb the central bank sales without
much disruption as long as the bankers make their intentions clear.

"Once you have transparency, the market is large enough," he said. "The gold market is as
liquid as for any currency."

Absorbing central bank sales may take time. But the annual demand for gold has been
slightly above 4,000 metric tons for the last few years, while new supplies from mines have
totaled about 2,500 metric tons. Low prices have taken some high-cost mines out of

Munk acknowledged that few rich people now hoard gold bars to protect themselves against
economic uncertainty -- they prefer U.S. government bonds. But, he said, the impact has
been offset by new wealth that economic growth is creating not just in North America and
Europe but also in such countries as India, China and Turkey.

"The explosion of the consumer pool, the trillions of dollars of wealth created by the stock
market -- all that just increases a constantly growing fundamental demand," he said. "And it
has nothing to do with people who 15 years ago bought gold because they believed in the
doomsday of the financial world, like my grandfather did."

CassiusSteveH Re:Your post #7038#70416/2/99; 18:27:09

I think there's something here, but I can't figure out the meaning of PPT. I'm a country boy! Please, what does it mean? Thanks much, Cassius
Golden TruthCoBra(too) The Kosovo Price?#70426/2/99; 18:31:10

Hello CoBra (too) Check out Mozel's June2/99 :06:30ampost Ties in nicely With GOLD and the U.S Gov's outrageous conduct in the Balkans. Snoop around and get some accounts of the devastation caused by the hospital bombing and a personel account of a Dead 17 year old girl told or seen thru anothers eyes. You Bet!!! Golden Truth
Golden TruthCassius#70436/2/99; 18:55:06

PPT is an acronym for "Plunge Protection Team" Hope this Helps!
THX-1138Stock Market Plunge Protection Team#70446/2/99; 19:34:45

Found this nice little link on Eagle Forum.

Says that Clinton has been having Rubin and Greenspan prop the market up everytime it drops, by buying S&P futures.

One of the respondents has suggested that the money used to do this is probably coming from the Government Thrift Savings Plan. I used to pay into that fund but quit to buy the yellow stuff. Finally moved my money out of the C Fund which is invested in stock and transfered it to the G Fund which is invested in bonds. If I could I would bail all the money out, but I think the only way I could do that would be to use the money to purchase a house. (first time home buyers can do this and get a tax break) If the TSP money has been used to prop the market up the market then I guess I can kiss it good buy. Kind of glad I stopped paying into it.

turbohawgTownCrier#70456/2/99; 19:39:20

thanks for the Greenspan link ...

>"We try to promote free trade on the mistaken ground that it will create jobs. The reason should be that it enhances standards of living through the effects of competition on productivity." -----FRB Chairman Alan Greenspan

It's good to see Greenspan out there making the case for free trade ... if only those politicians who are supposed to be on our side would do the same ... are they capable ??

Furthemore, shouldn't the case be made on more than just economic grounds ?? Isn't the MORAL case at least as important ??

What right does one person or group have to dictate who another person trades with ?? What right does govt have to step in and decide the winners and losers ?? Power, yes ... right, no. If one chooses to, say, buy steel from Russia for any reason, cheaper price or not, what moral case can another make to prevent him from doing so ??

Where are the leaders in this pseudo-free country who have the integrity and courage to stand up for free trade because it's just ?? Where is the devotion to the principle of individual liberty ??

Greenspan no doubt understands the moral case, given his Randian background. But after years spent overseeing and legitimizing the welfare state by means of central bank fiscal policy and currency manipulation, would he be credible ??

'Scuse the rant.

Welcome back Ari ol'chap ... I see you quickly got back into form.

Al FulchinoCalm before the storm?#70466/2/99; 19:59:05

Gasoline wholesale price drop of 2 cents/gallon today. First drop since the 18-20 cents/gallon runup earlier in the spring.
CassiusTo: Golden Truth#70476/2/99; 20:09:35

Ah, yes, that does make the msg more meaningful. Thanks, Cassius
Cavan ManCommodity Prices: Linerboard & Medium#70486/2/99; 20:12:39

Linerboard is the stuff corrugated packaging is made of. Medium is the squiggly stuff in the middle. The cost of linerboard converted into various corrugated packaging products affects almost every product we consume. Strange to say but life without corrugated boxes would be quite difficult. Recently, there has been a wave of consolidation in the industry. The trend is continuing consolidation. As the industry consolidates, excess capacity is taken offline permanently. Prices are rising. The industry is moving ahead with a second price increase this year and expects to get it; the first increase sailed thru. (FYI to all )
CassiusWould the Japanese dump their US Treasuries. This scenario says yes.#70496/2/99; 20:29:53

Depressed about the price of Gold. Well, no matter how the situation plays out with the Europliles vs. the $philes, this scenario says that by 3/31/00, the POG is destined to move up, with the resultant inflation driving it. I always wondered what would be the trigger for them to send all those $$$$ back to us. Cassius
Cavan ManGW & Foreign Entanglements#70506/2/99; 20:32:50

USAGOLD: I believe Washington's concern for foreign entanglements reflected the often pitched battle between Jefferson and Hamilton; one being in the French sphere and the other in the British. Also, there were dark, storm clouds on the horizon in France as you know.
AristotleFrom SteveH's article on Mr. Munk and Barrick Gold#70516/2/99; 20:44:26

"Not one ounce of gold Barrick has mined has ever been sold for the market price."

Did anyone else find that line as remarkable as I did??

"Not one ounce of gold Barrick has mined has ever been sold for the market price!"

Oh, yeah. Sure. When you are buying shares of Barrick's mining business, you certainly should NOT be confused into thinking that you are in ANY stretch of the imagination using Gold as your hedge against a dollar-demise. Sheeeesh! For their business paradigm, they might as well be baking Nabisco Oreo Cookies and speculating on Gold futures on the side.

Granted, the paradigm worked fine under falling Gold prices. Gold above their averaged hedged price will put them in a losing position for the amount sold forward. Stay nimble, Peter ol' boy, and guess well, or you are surely here today and gone tomorrow. I'd rather lock in PAYMENTS of future dollars than RECEIPTS of future dollars. Isn't there a Public Relations problem when you deliver Gold at $400 per ounce at a time when everyone else gets thousand$, and minimum wage has become $100 per hour?

Don't laugh. Gold is obtained against just such a scenario, and you, Mr. Munk, have a business paradigm that is no proxy for Gold. See if you can change your listing on Wall St. to Perhaps you would then be better rewarded for your efforts.

AristotleTurbohawg, I'm glad to be back, old friend!#70526/2/99; 21:09:50

Loved your comments to TownCrier on free trade. This comment of yours may help people see things as they should:

"If one chooses to, say, buy steel from Russia for any reason, cheaper price or not, what moral case can another make to prevent him from doing so?"

Excellent! And because steel is a metal, it makes the example even better. As you "buy" steel from them, they are getting something of equivalent value in return. What are they getting? In other words, what are you paying with? Let's assume they are too wise to accept our fiat currencies. Let's say you are paying with wheat (a good, solid, international-type trade, wouldn't you agree?).

OK, now let's take a different look at this. What person can really identify which person is buying from which? Who is the buyer and who is the seller? (Let's not use that uncivilized word, "barter") Are you buying steel with wheat, or are they buying wheat with steel? IT DOES NOT MATTER!!! What matters is that the TRADE DOES OCCUR!

And as you say, what power or entity would dare intefere with this exercise of human rights?

Let's get back to money. Simply imagine that instead of steel, Gold is used in the above transaction. And because it works so well, imagine if Gold were to play one side of each and every transaction that couldn't otherwise conveniently match desired imports. Gold is money, my friends. Insist on free trade, and honest money. If the money doesn't work, neither will trade. (And on my honor, I really enjoy cooking with spices from all over the world, and drinking beer from everywhere, coffee, tea, cheapest petrol, etc.)

Gold. Insist on it, and make you some. ---Aristotle

jinx44Bail out! THX 1138#70536/2/99; 21:14:18

Take the money out of the fund, buy a house, get a 125% mortgage and buy the yellow. Let the bank and the govt eat the house. It's only FRNny money! And to all those who's knees jerk and they murmer "gee, that's not right", wake up and feel the handcuffs. A 1930 dollar is worth 7 cents today. Legal theft anybody?
THX-1138reply to jinx44#70546/2/99; 21:23:35

I would love to buy a house with it, but not in the State I currently live in. Besides, if I was to default on the house and loan I could lose my job and security clearance due to financial problems. (Real big issue in the office I am at because you become a security risk.) Was in Alaska once and have been trying to find a job to transfer back up there. Really hard. Never move to Alaska if you don't have a job to go to. More than 17% unemployment during winter months.
Golden TruthCURRENCY CRISIS#70556/2/99; 22:59:41

Excellent interview with the original Gold Bug JAMES DINES. Very current and easy to understand. Ties in to my earlier post today about World Currencies racing each other to the bottom and our coming depression. BTW i havn't heard much lately from Gata?? Anyone hear of something lately? They seemed to be going strong a couple of weeks ago and now nothing. Also what about the June rumour that the YGM talked about saying that i think german cherez(sp) the banker out of PERU said the price of GOLD would be set free? I guess he meant DOWN? Also where is this staged currency crisis where you turn in your old money for new money that has a metallic strip in it? Wait the best one yet a staged Gasoline Shortage? i just saw gasoline drop 2cents today. One thing i leared here is that "conspiracies are cheap and it takes real money to buy booze" That seems to be the problem the more Gold i buy on dollar cost averaging the less booze i can buy and the more money i lose. I,am beginning to think lifes to short for this and we cah never Win. GOLD is way to manipulated and they have gotten real good at it. What do you think? i'll gladly eat my words if someone knows better, i mean how low can they go and for how long? In the mean time GOLD SUCKS! Because our Goverments SUCK BIGTIME and i feel until that stops we are all Doomed. Just read about the "Plunge Protection Team" over at that other US gold site and you'll know what i mean they been buying 5000 lots on the s&p500 to prop up the Bubble and aparrently to help hillary clinton line here pockets. I mean talk about corruption! Can't really blame a guy for be somewhat disappointed can you. I hope they all Burn in HELL and are salted with fire night and day and may their GOLD be used against them in JUDGEMENT DAY and consume their FLESH to the BONE!!!!!! Now there's something i can sink my teeth into. The price of GOLD may never rise but your torment WILL BE ETERNAL!!!!!!!! AS GOD AS MY WITNESS AND SAVIOUR.
Golden TruthPlunge Protection Team#70566/2/99; 23:22:09

Here it is Folks more SKULDUGGERY!!!
Peter AsherTurbo, Ari, Jinx, Golden Truth !!!!#70576/2/99; 23:39:15

You guys are in great form tonight, great reading. Give 'em hell.!! --- THX, to bad your hands are tied, it's a good plan. I believe I once quoted a famous philosopher about "intelligence being measured by the ability to evaluate relative importances." The scenerio you want to protect yourself from may include the demise of the job in any event. Gold could be a great asset to "grub stake" your own business. As the song say's, "Take that job and shove it"
Golden TruthJune Gold Now $264.10#70586/2/99; 23:45:30

Hey everybody all together now how low can you go? Don't be shy jump on in and lets do the GOLDEN LIMBO yah, wa hoo what a party? I stil say can't go much lower than Silver right?
Peter AsherGolden Truth#70596/2/99; 23:56:05

That URl is drawing a blank.
Peter AsherB.O.E. & Spot at $263.50#70606/3/99; 0:01:43

I do belief I'm getting a morbid satifaction out of this. That'll teach 'em.
Peter AsherSpeaking of free trade.#70616/3/99; 0:11:47

Another thing that came up at the meeting yesterday with Senator Wydon, was that there is a story out that the Post Office wants a tax levied on E-Mail, with them receiving the funds to make up for their "losses'. The Senator said that since he is the author of the Internet Freedom Bill, he would certainly be waging war against that idea.

If something like that were to be considered, I think our motto should be "If they tax E-Mail, Go Postal !"

Golden TruthPeter Asher#70626/3/99; 0:25:57

Please elaborate on my url drawing a blank i was just posting that gold was now 263.50 but it didn't work and your post beat to the punch. Yet what happened to my message did you see it for a brief micro second? If not what is your meaning? Golden Truth.
SteveHDepression#70636/3/99; 0:34:34

I am depressed. Yup. Why?

Everything is opposite the way it should be. History will favor the crazy late nineties. Hindsight will be strong then.

Where is Ralph Nader when you need him?

Where is my proza...?

August gold is depressing too...$265.50.

Peter...don't post is even more depressingly lower.

Well, Clint Eastwood said as Josey Wales, "...When things are looking real bad, you got to get real plumb mean...."

or something like that. There I feel better.

Golden TruthSteve H #70646/3/99; 0:44:49

Howdy Steve H loved your Clint eastwood quote he was definately one of the Good guys! Loved all his movies, especially The Good The Bad and The Ugly! The theme music really added substance also oh the good old Days.
Golden TruthGold Spot Now 263.65 up 15cents Whoppee Do!#70656/3/99; 1:10:01

Where is F.O.A when you really need him eh!
HLimeGold mine closes#70666/3/99; 2:25:41

Just read in our local rag that the Nixon Fork mine will close.
That is 40,000 oz Au per year that they can not manipulate.
The mine was way out in the sticks a few clicks from McGrath.
Perhaps that was part of the reason, higher production costs.
Then and again it may be the tip of the ice burg.


Silver TongueClay Pigeons#70676/3/99; 5:01:39

I understand that we can get $270.00 per coin per Candian Maple leaf from a hunting club up in Canada for use as clay pigeons at a hunting range. This gold will also make great paper weights as well on my desk at the office. Since the price has dropped so dramatically it reminds me about the automobile burglary up in Denver where the thief broke in and deposited several tickets to a Denver Nuggets basketball game. With the price of gold this low we won't have to worry about someone stealing our gold. Boys and girls I think that if we can weather the storm this gold is going to make us proud. Obviously it is not going to happen this month however. Frustration being the mother of despair helps us to realize that we are not economic orphans. Have faith and buy your ration of gold today.
SteveHAugust gold is now...#70686/3/99; 5:13:28

too depressing to post. I wrote this elsewhere:

Gold at $263.50 is a paper price. I don't think much actual physical is being delivered at these prices. I remind myself that the futures market requires a seller and buyer. The buyer of the contract pays dollars, the seller gold, if delivery takes place.

So, what will bust this price is soon to arrive,imo, to a theater near you: the physical delivery of gold in record proportions at this price.

As proof of not being able to get gold at this price, coins still cost $280-plus plus tax where I live.

What we have here is a market whose paper is disproportionate to its physical demand. This drive lower in paper gold appears strongly to be a deliberate attempt by questionable forces to discredit gold and to drive it as low as will gold, just as it seems S&P futures seem to be equally manipulated higher by unknown and questionable forces (could these be one and the same?). So, it seems every step lower is a step closer to the end-game.

All I can say is join GATA, write your congressmen and women, senators, SEC, etc. be vocal and politely point out to these folks the blatant and unacceptable onslought of market-makers upon these two market areas.

Remember also that this is about a currency war and who will rest the position of world reserve currency. The US$/IMF camp has lots of ammunition in what appears to be a loosing game since every dollar that is printed without one being destroyed further weakens the $.

Gold is discipline and people always find discipline returns in hard times. In the meantime, this would seem to be the grandest of all physical gold and [gold-related stock] buying opportunities.

JuliaFOA#70696/3/99; 6:37:41

FOA, It's been awhile since our exchange on 5/21/99. I paste it here for your convenience. Thank you for responding to me.

Forgive me, but was that your answer? I've watched for more from you but haven't seen these issues addressed. Did I miss something? Thank you. Julia

Julia (05/21/99; 13:19:20MDT - Msg ID:6574)
FOA - About the U S Dollar's Fall From Grace
FOA, Please forgive me if you have answered this question a million times in a million ways but I still don't
quite have in focus all the logical sequence of events or indicators that are revealed when a currency is going
down, especially US currency.

Please, would you explain what happens to the private citizen as their currency is being devalued? What is
their life like as it happens? What would be prudent things to prepare with other than buying gold. I've read
assorted bits from the good minds here but I have to admit that I'm having trouble piecing them all together
enough to be able to make decisions for my family. I would like to hear your thoughts about what the big
picture looks like in a simple step-by-step fashion using layman's terms....sorry, I don't know much about this
FOA and it's hard to keep it all straight over so many posts.
"When this happens then look for this to happen." "Prepare for this to happen by doing that."

For example, I think someone here recently mentioned that one of the things that will happen is that the USG
will call for the exchange of all the old 20's, 50's and 100's and if you happen not to be an insider and didn't
meet the deadline then you lost those dollars. Does this mean if my cash, not talking about my gold stash now
but my spending money, is in all new 100's, 50's and 20's I won't have anything to worry about when the US
currency crashes? Or does this mean I need to be in 1's, 5's and 10's?

Again I apologize for taking up your time with this naive request. I will be eternally grateful for your thoughts.

Please feel free not to waste your time on this if you wish. You will not hurt my feelings and I will read your
other thoughts with just as much enthusiasm. Thanks. Julia

Your response:

FOA (05/21/99; 18:09:04MDT - Msg ID:6587)
Julia, I get your point and will try to offer what you ask. Keep in mind that this is all like a chess game, with
each player holding a different motive for their course of action. Just as has happened with Britain and the
BOE thing. Their purpose differs greatly from the wants of the USA. Even the US was walking one direction
and may now have changed that!
As for the citizen / investor, their perception of most modern political maneuvers is difficult at best because
most Westerners have no formal education of real money and how the recent (20 years) events have been an

We will talk at length about this. thanks FOA

TechnicianFriedrick A. Hayek#70706/3/99; 7:02:38

I was 22, 40 years ago, when I read Hayek's " Road to Serfdom" I remains the one definitive book for me above all others. I have seen the world change with an understanding eye thanks to Friedrick. Published in 1944 it remains must read for all who seek to understand. If you have not read, please do.

Gold is terribly oversold, would not be surprised with an up day today.

Cavan ManA Golden Truth#70716/3/99; 7:02:48

Dear Sir: I am posting this because of concern for you. That last post from yesterday that gave the Dines interview link unmasked your frustration and probably others as well. You are quite right about the degree of corruption in the American government and among the government's minions. The United States is at the same time "Slouching Towards Gomorrah" while maintaining at least a profile as the most religious country on earth. How can this be? Simple; today's opiate of the masses is economic prosperity. We have all been lulled into a stupor. I am not stupefied and apparently neither are you. However much "EVIL" has made its mark upon this government, it has not marked you unless you acquiesce. Do not fear in your frustration; fear leads to the dark side Golden Truth; the path is hatred. I share your sentiments and your frustration. However, I do not believe the perception in these economic times is reality. History is a good teacher. History can help us predict the future. The big money and mockers of this day and age will eventually crash the system. It may take time though. The world economy is balanced precariously much like the US stock market. Some outside force/event will upset the apple cart. When that happens, gold will soar. Since gold is an inherent threat to government monetary policy, at that time expect a full court press on gold. Maybe then it will be time to get out. As for me, I am keeping what I have bought through thick and thin. Gold is more than insurance; it is freedom. So, my final thoguhts are (and I apologize for the rambling), be in the world but not of it. Go about your business and keep your own counsel. Be at peace. Many will eventually receive their just desserts. Let us be certain that you and I are counted among the just men who are barely saved.
Cavan ManGolden Truth Continued#70726/3/99; 7:07:51

The good guys always win in the end!
Peter AsherGetting un-stuck#70736/3/99; 7:14:57

$263.50 to $$266.40 to $265.00, now $265.25 in less than two hours. Volitility + mobility + recovery = ecstasy
Peter AsherCavan Man#70746/3/99; 7:19:23

Good Morning. Well said,"truth for Golden Truth" good start on the day.
TownCrierBelgrade accepts peace document brought by envoys#70756/3/99; 7:30:00

"Yugoslavia accepts the peace document brought together by the highest representatives of the European Union and Russia"
Will NATO reject it and keep dropping bombs? Place your bets...

TownCrierfrom the Something Is Brewing Department -- "China to Banks: Close Yuan Accounts"#70766/3/99; 7:36:28

Read this! A precursor to yuan devaluation? Something else?
TownCrierSteel Producers Seek More Tariffs#70776/3/99; 7:44:58

The industry filed its latest complaints Wednesday, asking the federal government to impose tariffs.

Here is one for our free trade people to rail about. Should we pay more for steel because our next-door neighbor can't or won't sell it as cheaply as a source across the road will sell it?
Al says, "I don't THINK so, Tim."

TownCrierGreenspan voices free trade fears #70786/3/99; 7:56:54

US Federal Reserve Chairman Alan Greenspan says he is concerned at signs of weakening support for free trade in America. "It is clear that all economic progress rests on competition. It would be a great tragedy were we to stop the wheels of progress because of an incapacity to assist the victims of progress."
TownCrierSerbia accepts peace plan #70796/3/99; 8:07:33

Slobodan Milosevic accepts an international peace plan for Kosovo - but bombing is set to continue until he withdraws his troops.

From the Ernest & Julio Gallo School of military thought, "We will spare no infrastructure before it's time."

TownCrierASIA FOREX - Regionals relaxed despite yuan scare#70806/3/99; 8:13:35

A pile of currency commentary...lots of paper with little substance.
USAGOLDToday's Gold Report: Y2K Buying Recharges#70816/3/99; 8:58:52

MARKET REPORT(6/3/99): Gold opened slightly lower today after trading down nearly
$2 in yesterday's session. Overnight the metal was pushed to the $263.50 level in Tokyo
where short covering entered the market and prevented the yellow from dropping further.
The Tokyo drop was attributed to Australian producer selling. The trend continued into
European trade. There were no new features to the market today and the trends evident
since the BOE announcement appear to still dominate trading. Rumors of an additional two
million ounce "put" purchase by Morgan Stanley on Tuesday have kept most paper traders
on the short side of the market.

At the same time, the low prices continue to encourage physical purchases. At CPM (and I
am certain other gold firms), purchases of gold coins have reached levels that we haven't
seen since the fourth quarter last year and first quarter this year. It is not as hectic as it was
then, but it is close. April was subdued, but volume began to pick up in mid-May and now
the Y2K buyers are back in full force.

Speaking of Y2K, talking with many of the people interested in purchasing gold as the price
drops, we find that investors are not as concerned at this time about massive disruptions in
the United States resulting from "the bug." Instead most are concerned about breakdowns
in raw material supply lines, particularly oil, as the embedded chip problem manifests itself
in a slowdown, or even shutdown, of delivery systems in oil producing areas. In turn many
investors think that those breakdowns, or slowdowns, could manifest themselves in higher
prices and an inflationary tone next year. They are buying gold in case those breakdowns or
slowdowns translate to acute shortages, rationing, etc.

There are also concerns about the banking and settlement problems in international trade due
to the large number of unresolved computer problems all over the world. R.E. McMaster,
editor of the The Reaper newsletter points to a acute problem in Japan -- the world's second
largest economy. He says that of the 19 big Japanese banks, only two are 75% Y2K ready,
over 50% are 25% prepared. He goes on to point out that eight of these banks rank among
the world's top twenty. "Japan," he says, "is a mammoth Y2K domino that could topple the
whole financial system globally."

The other concern bothering investors is the over-valued stock market. Many see it as a
bubble waiting to burst and have decided to convert some of their paper profits into gold to
preserve the gains.

Bridge News reports this morning that "The Gold Anti-Trust Action Committee (GATA)
chairman Bill Murphy today said that the massive gold lending has reached a point which
may pose a 'systemic risk' and called for greater transparency in central bank gold lending
practices. GATA estimates that gold speculative borrowing is around 3,000 tonnes and that
total gold lent into the market ranges from 8,000 to 10,000 tonnes."

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

USAGOLDIncredible!! #70826/3/99; 9:54:56


Please read the following carefully if you intend to stay online and
continue using email:

The last few months have revealed an alarming trend in the Government of
the United States attempting to quietly push through legislation that
will affect your use of the Internet.

Under proposed legislation the U.S. Postal Service will be attempting to
bilk email users out of "alternate postage fees".

Bill 602P will permit the Federal Govty to charge a 5 cent surcharge on
every email delivered, by billing Internet Service Providers at source.

The consumer would then be billed in turn by the ISP. Washington D.C.
lawyer Richard Stepp is working without pay to prevent this legislation
from becoming law.

The U.S. Postal Service is claiming that lost revenue due to the
proliferation of email is costing nearly $230,000,000 in revenue per

You may have noticed their recent ad campaign "There is nothing like a

Since the average citizen received about 10 pieces of email per day in
1998, the cost to the typical individual would be an additional 50
cents per day, or over $180 dollars per year, above and beyond their regular
Internet costs.

Note that this would be money paid directly to the U.S. Postal Service
for a service they do not even provide.

The whole point of the Internet is democracy and non-interference.

If the federal government is permitted to tamper with our liberties by
adding a surcharge to email, who knows where it will end.

You are already paying an exorbitant price for snail mail because of
bureacratic efficiency.

It currently takes up to 6 days for a letter to be delivered from New
York to Buffalo.

If the U.S. Postal Service is allowed to tinker with email, it will
the end of the "free" Internet in the United States.

One congressman, Tony Schnell (r) has even suggested a "twenty to forty
dollar per month surcharge on all Internet service" above and beyond
government's proposed email charges.

Note that most of the major newspapers have ignored the story, the only
exception being the Washingtonian which called the idea of email
surcharge "a useful concept who's time has come" (March 6th 1999

Don't sit by and watch your freedoms erode away!

Send this e-mail to EVERYONE on your list,

and tell all your friends and relatives to write to their congressman
and say "No!" to Bill 602P.

It will only take a few moments of your time, and could very well be
instrumental in killing a bill we don't want.

Kate Turner
Assistant to Richard Stepp, Berger, Stepp and Gorman Attorneys at Law
216 Concorde Street, Vienna, Va.

Louis Williams
Louis B. Williams, Jr.
Austin Area Manager
Chicago Title Insurance Company
1601 Rio Grande Street, Suite 300
Austin, TX 78701
512-480-8353, (F) 512-469-5814, This email address is being protected from spambots. You need JavaScript enabled to view it.

Golden TruthThanks Cavan Man!#70836/3/99; 10:20:23

Your right in everything you spoke of to me. I guess i have been hitting my spirtual thumb with a golden hammer lately. I might add i think i wacked myself in the head a few times lately as well. Thanks for the "most excellent" and kind words, my spirt has been encouraged and may i please also some day, be able to watch over you to be able to repay my debt of "Spirtual Encouragement" unto you. Time to go out and buy "John Hagee"s book, His Glory Revealed. N.B The Truth shall Set You Free! thanks Golden Truth.
GoldflyGee MK, I wish youda asked me first!#70846/3/99; 10:29:35

That email tax thing is a hoax. That is, HOAX!

Click on the last link in the second paragraph of the above link.

Always check your source!


USAGOLDThanks, Goldfly....#70856/3/99; 10:43:26

Glad it is a hoax...
NORTH OF 49E-mail taxation--the forces of evil thwarted again!!!#70866/3/99; 10:55:18

Don't feel bad, the exact same thing hit Canada about three weeks ago. It came out with the exact same format, complete with the address of a "reputable" law firm that was supposedly battling for our rights---"for free"---like that's going to happen in our lifetime!!!

Gandalf the WhiteGC9Q is now "lookin good"#70876/3/99; 11:07:39

268.3 on my crystal ball now.

TownCrierNYSE Delays Extending Trading Hours#70886/3/99; 12:33:46

Y2K cited as a significant reason for the delay. They must be VERY concerned about Y2K in general, because frankly, I don't see much connection between Y2K and length of trading hours. Either everything works--from opening to closing bell--or it doesn't. Are you willing to bet your wealth that it doesn't?
TownCrierFed looking for inflation acceleration-Gramlich#70896/3/99; 12:37:13

But he declined to comment further on the U.S. monetary policy outlook. "I'm sorry but this a very delicate time," he said.
AristotleHere's a nifty nugget I found while dredging through the archives.#70906/3/99; 13:33:05

Can you guess who said it?
- - - - - - - -
"You asked if you were on the right track. Well...there are as many
facets as shattered glass, different facets holding the strongest appeal
for different people. You touched upon but a few. Nor will I attempt
it...BOOKS are written on this. To the limited extent we discussed some
of these matters I thoroughly enjoyed the exchange. Thanks for your
part. My gold awareness and position has developed as I see through the
eyes of an engineer. The world abounds with opportunities for the
professional art of applying science to the optimum conversion of
resources to benefit mankind. If put to the task, a team of engineers
could NOT devise a monetary tool or system nearly as perfectly suited
for use as is gold. Economists certainly could not do it. Witness their
track record. Any viable monetary system MUST use gold as a fundamental
element. Any resistance to using gold could be viewed as a product of
intellectual stubbornness and arrogance...or else it must be admitted
that the device is crafted for the benefit of the few at the expense of
the others. You do not use a screwdriver to drive nails when a hammer is
at hand. Similarly, why would you build bridges with paper and
imagination when there is a world-class engineering alternative?
Beginning with honesty, integrity, and ethics, you arrive at gold.
A different conclusion reveals a different beginning..."
- - - - - - - - - -

Perfect money. Get you some. ---Aristotle

TownCrierNY Precious Metals Review: Jun gold up after new 20-yr low#70916/3/99; 13:37:28

By Melanie Lovatt, Bridge News
New York--Jun 3--COMEX Aug gold futures managed to recoup early
losses, settling up 50c at $267.60 per ounce. Aug had fallen to another
contract low and fresh 20-year low on continuous charts of $265.20 per
ounce in the overnight NYMEX Access trading session. Traders said that
gold saw little activity in the US session, managing to edge up as day
traders were caught short by the uptick.
However, they warned that sentiment remains negative and suggested that
gold could be due for a further slide.
One trader suggested there was "little rationale" for today's climb,
attributing it mostly to day traders, but also to some short covering from
one major fund, which was "probably getting a bit nervous."

"Fund buying late in London caught the market short and there was a
rally ahead of New York. People did what they had to do, leaving NY alone
to slowly and painfully drift back up," said Tony Caen, senior precious
metals dealer at Credit Lyonnais Rouse, noting that interest in today's
market was "light."
He said that after day traders had covered, they were "left to lick
their wounds" for the rest of the day. He noted that activity was subdued
because players were treating the market with some caution. "people just
don't know how to trade gold at these new low levels," he said.

The overnight slide was triggered as spot gold fell below $265 support
on selling from Australia, with stop-loss selling then leading to a
further tumble.
Some believed that sell orders were placed by US investors through
Australia based dealers, while others said selling could have come from
Australian producers.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

koanegg on my face#70926/3/99; 14:15:55

Well, I was obviously wrong about gold holding above $268. Like many, I have no idea where we go from here, but I just do not see gold going much lower or silver for that matter. My G and S junior metal stocks are way above what I paid for them in August 98. Wait and watch I guess. I still think this is the time to buy any precious metals or metals stocks.
TownCrierFed's Meyer sees strains emerging in U.S. banking#70936/3/99; 14:23:58

The U.S. banking industry is showing signs of strain..."the volume of nonperforming assets increased last year for the first time since 1991 with the deterioration concentrated within commercial and industrial loans," Meyer said.

Credence Clearwater Revival says, "I see a bad moon (er, loan) risin'..."

TownCrierTECHNICALS-Forex market views and key chart levels#70946/3/99; 14:27:21

Gimme a break. If we all used gold, we could send these clowns packing for home...
TownCrierThe Fed Prepares to Go Hiking#70956/3/99; 14:31:06

Will they, or won't they? Analysts weigh in.
TownCrierStocks End Mixed After Late Wave of Selling#70966/3/99; 14:35:44

A recap on the market action of the day.
TownCrierEU worried about Y2K, nuclear power plants #70976/3/99; 14:42:54,4,37310,00.html?owv

The European Commission expressed alarm today about potential Y2K disruptions to public infrastructure within EU borders--including electricity blackouts, breakdowns of wastewater pumping stations, and overloading of telecoms networks, saying it was especially worried about nuclear power plants in the former Soviet bloc.
JCTexe-mail tax hoax#70986/3/99; 14:48:23

To All:
I apologize to all of you for the hoax "e-mail tax warning." I sent it to MK, so any barbs should be aimed at me. MK I apologize to you, too, my friend. Also, thanks to whoever posted the hoax warning site...think I'll be checking it from time to time.

TownCrierS.F. Fed head expects few Y2K bank problems#70996/3/99; 14:51:59

During the second and third quarters, some of the most severe cases of Y2K noncompliance could be made a matter of public record according to the S.F. Fed official.

Citizens were discouraged from withdrawing money from their accounts, with the rationale that the FDIC (Federal Deposit Insurance Corp) could cover losses up to $100,000, but not if the money was under your mattress.

OK, now wait a minute. If the money is under your mattress, it would seem that you wouldn't need the FDIC at all. Further, if Y2K glitches shut down the bank, surely those same glitches would derail the FDIC!
These are the times that try men's souls...

Peter AsherMichael, Goldfly,#71006/3/99; 14:55:56

Did you see my # 1761 at the bottom of today's page. At least one Senator is on top of whatever may come at us regarding Internet taxation. And, at least I heard it directly from him in person, rather than from a journalist's allegations. I feel that what a Politician say's at a grass roots local meeting is more likely to be his true intentions than pre- election campaign events.

Regardless of the Hoax report, I say "where there is smoke there is fire", and I still smell something burning! I predict we'll hear more about this. The specifics of that report may have been false, but the concept sounds to bad not to be true.

TownCrierMs. Rivlin resigns...BOARD OF GOVERNORS VICE CHAIRMAN#71016/3/99; 16:24:56

The Honorable William J. Clinton
The White House
Washington, D.C. 20500

Dear Mr. President:

I write to submit my resignation from the Federal Reserve Board of Governors (and from my position as Vice Chair) effective July 16, 1999.

I have had a wonderful time at the Federal Reserve. It has been a privilege to serve with Alan Greenspan and my fellow members on the Board for the last three years. The Fed is a strong bulwark of U.S. economic policy, and I believe we have contributed to keeping the American economy growing and reducing strains in the international financial system. Thank you for giving me this opportunity...etc.
With warm personal regards,
(Signed Alice)
Alice M. Rivlin

TownCrierRemarks by Governor Laurence H. Meyer from the Federal Reserve Board #71026/3/99; 16:51:20

During the 1990s, banking organizations have increased tremendously in size as a result of the consolidation process, and the complexity of many bank activities has grown as well. These developments have crucial implications for bank supervisors, including those pertaining to systemic risks. In many respects, they have also made bank supervision more difficult.

We have not yet achieved "financial modernization" in terms of legislation, but we certainly have a far different banking and financial industry than existed a decade ago. Undoubtedly, more change is on the horizon, as distinctions among financial institutions continue to erode. That fact simply underscores the need for Congress to modify U.S. banking laws and permit the regulatory environment to catch up with market events.

Meanwhile, bank supervisors and regulators should remain focused on their principal tasks. First, to ensure that the banking system remains sufficiently safe and sound, posing little risk to the federal safety net and adequately protected against systemic risk. Second, to ensure that the industry continues to provide the American public with a full range of competitively priced banking services and conforms to legislative standards of competitiveness.


We are pursuing our objectives both domestically among ourselves and abroad through the Basel Committee on Bank Supervision, under the auspices of the Bank for International Settlements in Basel, Switzerland. We are designing a way forward, building upon the "three pillars" approach outlined in a consultative document released today by the Basel Supervisors Committee, a subject I will return to in a moment. This approach encompasses (1) a strong, risk-sensitive regulatory capital standard; (2) an active supervisory program; and (3) improved bank disclosures that allow the marketplace to evaluate an institution's risk posture and to reward or discipline it appropriately.

In my remarks today, I would like to address many of these and other points, with particular emphasis on the supervisory process and how we at the Federal Reserve are adapting to change. At the outset, I would emphasize that bank supervision is, by its nature, a dynamic process. Our practices must constantly improve or they will become quickly outdated. Supervisors must also be flexible, both in their application of supervisory techniques to banks and in their expectations regarding what practices individual banks should follow.


One aspect of supervision that has become more crucial to our oversight process relates to systemic risk and to the activities of our largest banking organizations. A decade ago, for example, the 20 largest U.S. banking organizations held 68 percent of the assets of the 50 largest bank holding companies; now its 82 percent. Then, the 20 largest holding companies held 37 percent of all U.S. commercial bank assets; now that figure has risen to 64 percent.

Those figures conceal, of course, the dramatic increase in the complexity of their activities represented by securitizations and derivative products. The notional value of derivative and futures contracts held by U.S. banks now exceeds $33 trillion, nearly five times the level at the end of 1990. Securitizations by U.S. banks, at $270 billion, have grown as fast and are expanding beyond consumer-based loans, such as credit card and auto loans, to commercial credits. Virtually all of these securitization and derivative activities are concentrated among the largest banks. While notional values and amounts securitized say almost nothing about the level of underlying risk to individual banks, they speak strongly to the increased volume and complexity of large bank activities and of the somewhat hidden risks they face. For these organizations, balance sheets and traditional lending have much different meanings from a decade ago.

... [here is the good part. Why can't they say GOLD instead of masking the term as "high-quality, low-risk assets"?]

New Capital Proposal
As I mentioned earlier, the Basel Committee on Banking Supervision has now released its long awaited consultative report on revisions to the 1988 Basel Capital Accord. For the largest institutions, the Accord has increasingly been weakened by the changes that have occurred in financial markets. Most importantly banks here and abroad have been engaging in capital arbitrage techniques designed to move their higher quality, lower-risk assets to securities markets, sometimes reducing their capital charges on these assets more than proportional to the retained risk positions. In addition, the remaining higher-credit risk assets have the same regulatory capital charges as the lower-risk assets that have been securitized, changing the meaning of the resultant capital ratio. For these and other reasons, the 1988 Accord has become increasingly undermined and the risk-weighted capital ratios have become more difficult to interpret.

Modifying the Accord is an incredibly complex and difficult procedure, not only because it must be negotiated among 12 nations and affect the policies of many more, but also because the issues are so difficult...

[That should be enough brain food for one evening!]

jinx44Revolting Rivlin Routed#71036/3/99; 17:03:28

Dear Alice is a socialist hack that bj-boy WJC got into the USTreasury. Here first pronouncement was to suggest a one time 15% tax on ALL savings accounts, 401's, etc and a yearly 15% tax on the remainder. She has certainly made the rounds and will now exit with a cushy ivory tower job where she can help plot the rest of the demise of this country. We haven't seen the last of her third way machinations.
Gandalf the WhiteHere are a couple of items from SJ Kaplan which confirms my crystal ball is NOT in need of adjustment !#71046/3/99; 17:23:22

Gold Mining Outlook
by Steven Jon Kaplan
Updated @ 6:20 p.m. EDT, Thursday, June 3, 1999.

COMMENTS OF THE DAY: Commodities ended significantly higher on Thursday, their fourth consecutive strong showing, while precious metals closed mixed once again with sharp divergences. Gold edged up 50 cents to $265.90 spot after touching a new historic low of $263.25 spot at 11:18 p.m. EDT on Wednesday, June 2, 1999. Silver fell 4.0 cents, platinum surged $4.00, and palladium retreated $1.25. The
spread between the XAU and spot gold continued to fall, dropping 0.7 to 203.5, and is now quite substantially below recent norms near 220. This gap is likely to widen especially as the yellow metal rallies above $290; it is recommended that investors continue to switch from North American to non-North American gold shares. In other markets, bonds fell slightly, while the U.S. dollar rose
slightly and equities closed mixed.

KAPLAN'S CORNER: Question: What will happen to the spread between the XAU and spot gold as the gold price rises? Answer: The spread essentially represents the cost per ounce of production. As the gold price rises, demand for qualified workers increases, pushing up wages of gold miners. In addition, expansion projects are undertaken which would not be economic at lower prices, thus
increasing the average cost per ounce of production. Therefore, as the price of gold rises, so does the spread. At $300 per ounce the spread is about 220 (i.e., with gold at $300, the XAU will be roughly 80). At $350 per ounce it is likely to be closer to 230 (XAU = 120).

USAGOLDJCTex#71056/3/99; 17:36:07

Your post is appreciated. It's no biggie. We need to be ever alert and if an occasional error is the cost of that than it's a small price to pay. Please do not hesitate to send me other information as it comes to you.
SteveHInterpretation?#71066/3/99; 17:38:37

For the largest institutions, the Accord has increasingly
been weakened by the changes that have occurred in
financial markets. Most importantly banks here and abroad have been engaging in capital arbitrage techniques designed to move their higher quality, lower-risk assets to securities markets, sometimes reducing their capital charges on these assets more than proportional to the retained risk positions. In addition, the remaining higher-credit risk assets have the same regulatory capital charges as the lower-risk assets that have been securitized, changing the meaning of the resultant capital ratio. For these and other reasons, the 1988 Accord has become increasingly undermined and the risk-weighted capital ratios have become more difficult to interpret....

Some large banks have been lending gold out to obtain a return on investment (can't figure out what it means: sometimes reducing their capital charges on these assets more than proportional to the retained risk positions).

Then I can't really understand the next sentence. At least I got the gold lease part right. Thoughts?

USAGOLDSteve,#71076/3/99; 20:10:19

For what it's worth, that looks like something Alan Greenspan would have written -- skillfully arcane. An answer without an answer to a question no one would bother to ask. I think there are a number of politicians in Congress who would move to regulate derivatives if they could just figure out where in God's name to start. AG is making sure they keep looking around for the starting line. The quote was meant to confuse. And you say, "huh?" Me too.
mike55NYSE Extended Trading Session#71086/3/99; 20:23:53

Interesting to note that in April of this year over one hundred of the largest firms held a marathon session of simulated trades leading up to the 12/31/99 rollover and a few days following that date. As I recall, the report was essentially rosy, some minor glitches, and plenty of time to fix things.

Now the evolution of the paper trading mania turns to extended hours, kinda' like your local 7-11...."we're always open!" (Disclaimer: Barring any unforseen meltdown). A couple of days ago it sounded like it was full speed ahead to almost round-the-clock trading some time this year.

Today comes news that "we're really too busy with that fraction-to-decimal conversion work and that pesky Y2K thing". Wait a minute....what changed between April and June that increased the Y2K workload and made it such a priority? Nothing. It's been there all the time.

If you're going to trade paper, make sure it's for metal!

Peter AsherSteve#71096/3/99; 20:33:44

First, a definition of an earlier part of the statement:

<<I would emphasize that bank supervision is, by its nature, a dynamic process. Our
practices must constantly improve or they will become quickly outdated. Supervisors must also
be flexible, both in their application of supervisory techniques to banks and in their expectation regarding what practices individual banks should follow.

This translates to "There is no policy. What ever we do will depend on which way the financial and political wind is blowing."

I will attempt to translate the statement in question, but I may do no better than they did.

<<Most importantly banks here and abroad have been engaging in capital
arbitrage techniques designed to move their higher quality, lower-risk assets to securities
markets, sometimes reducing their capital charges on these assets more than proportional to the
retained risk positions. In addition, the remaining higher-credit risk assets have the same
regulatory capital charges as the lower-risk assets that have been securitized, changing the
meaning of the resultant capital ratio. For these and other reasons, the 1988 Accord has become
increasingly undermined and the risk-weighted capital ratios have become more difficult to

When they lend (sell) gold, to buy securities that will yield more, they are not properly quantifying the increased danger of getting wiped out due to owning paper instead of gold. Therefore whatever regulations exist to protect the assets are being circumvented. And therefore who ever is responsible for monitoring this is being blind-sided.

USAGOLDE Mail Question on Gold Loans from Chris#71106/3/99; 20:50:05

I wonder if you would not mind answering a question for me, actually two
questions. First how do we KNOW that there is so much gold sold short,
forward etc? Second if we agree that 8000 to 10000 tons IS sold forward, how
big an economic impact would that have on the world economy if all that had
to be covered fairly quickly. And of course what gold price might we see
after the dust settles, that is what range would be see gold trade in for
the year or so after such dust were to settle? The main question is how we
know that so much gold is short and how big a financial impact covering
might have? Thanks. I ask this because in the March June Kaiser Bottom
Fishing Report ( you can get a copy probably from him at 925 631 9748, there
is a very intelligent article on gold when points how that the numbers
thrown around seem to be speculations and to his knowledge, he does not know
of any subtantive proof or evidence that there in fact is such a large short
position. Thanks. Chris.


Chris, I will post your questions and let things take their course. I am sure you will get much opinion from the Table Round, and invite all to comment on your important questions.

Let me just say that the risks are large and give you a rough outline why:

1. Most of the top people in the industry believe that 8000 tons are short of the mark. Some go as high as 14,000 tons. These numbers did not come out of the clear blue. They came from people like Frank Veneroso, a respected analyst with deep ties among central bankers. The traders also believe that the exposure is significant. I was told today by a major trader that the current rumor is that LTCM alone is short 1000 tons. Please note: You have not seen one top line central banker refute these figures or even comment on them.

2. The risk is with the counterparties who have gauranteed these gold loans to all sorts of borrowers but primarily mining companies and hedge funds. These are some of the top financial institutions in the United States. If for some reason the borrowers can't make good, the counterparties will have too.

3. I continue to believe that the BOE sale might be related to bailing out a counterparty in Britain. I don't think they would be doing this unless the entire British financial system were jeopardized by this counterparty failing. Just think what would happen if a similar circumstance were to develop here in the United States As you probably already know the pound is plummeting and the reason is that the market smells blood in the water. This is not a minor event.

4. Ultimately, what it all might mean is that once counterparties are threatened with failure central banks might be required to bail them out with gold -- an item unlike paper that cannot be printed. It could mean massive depletion of reserves in the host countries and all that that would portend, including an attack on the currency.

I would not make the mistake of taking this lightly. If reserve depletion is an abstract to you, consider what happened to Malaysia, Thailand, the Phillipines, Indonesia, S. Korea, Brazil, Argentina and Russia once their currency reserves were depleted. It is not a pretty picture.

Hopefully this will tie some loose ends together and perhaps help you develop some conclusions of your own. At the least I hope it encourages further study, because this is my purpose. My answer is not comprehensive but meant to offer a starting point.


SteveHPeter#71116/3/99; 20:53:47

By George, I think you have it. The fed just admitted that banks may just have a systemic problem caused by new paradigms and regulations that don't even account for them, let alone regulators who can figure them out.

Odd that you chose the word blindside as often times a traffic light only goes up after several or one fatal accident. In other words, traffic lights (regulations) only happen when accidents point out safety problems. This is management by exception. Well, as derivatives, and the yen and gold carry trades are accidents waiting to happen. To those of us who either drive through that intersection or who are merely pedestrians witnessing the congestion and traffic at that intersection, we fully realize there is a problem, we have enven notified all we know in government that their is a problem, but either government isn't listening or it has been stalled in committee or the engineers can't decide what kind of traffic signal, four way stop, yield sign is really needed to control that traffic.

From my perspective, it appears that until derivatives can be blamed as the cause of a major traffic accident at that intersection in our financial system, either nothing will be done or the wrong sign will be put in place. But if you are a believer in homeostasis or equilibrium, then all systems out of equilibrium will return to a steady state given enough time, time that we all agree is running out for the new-paradign financial markets of leased gold, PPT's, and derivatives (whose definitions boggle the mind, not even counting the complexity of managing them). In other words, sit at that intersection long enough you will see lots of close calls then the big one. I think lots of close calls have already ocurred. Now we await the big one. You can see it is inevitable, you just wish you could get someone out their direct traffic until it happens but you just can't get through to the number at city hall to make it happen.

So the next time each of us drives through our home towns, try to imagine which of the traffic signals you are passing were put there only after an accident that caught city official's attention enough to warrant the placement of that signal. Then think of the gold market today. Scary.

Peter AsherThanks Steve#71126/3/99; 21:02:12

Glad to see I achieved something. And, thanks for the quick response

I wonder if the purpose of the doublespeak is to keep us from seeing what's going on, while being able to say they told us so.

SteveHPeter#71136/3/99; 21:12:08

You can answer that question by looking at how they say things they want you to understand. My guess is obfuscation makes the obvious obtuse, eh?

How about this?


EUROPEAN Union leaders are to try to introduce a euro-gagging order in a desperate attempt to restore confidence in the ailing single currency.
Under a German proposal presented to finance ministers at the EU summit in Cologne yesterday, only Wim Duisenberg, President of the European Central Bank, and his deputy Christian Noyer will be allowed to comment officially on the euro's performance.

The move came as Tony Blair joined a co-ordinated rallying call from EU leaders to help to boost the beleaguered currency, insisting that he wanted Britain to join the single currency soon after the next election.

The euro's dire performance recently has become a source of severe embarrassment to the euroland countries. Although Europe's poor economic performance is regarded as the root cause of the euro's decline, often contradictory comments from European Central Bank (ECB) members and European finance ministers have created confusion in the markets and raised a big question over the currency's credibility.

Heavyweights such as Hans Tietmeyer, the Bundesbank President, have indicated their unhappiness with the currency's decline and raised the prospect of ECB market intervention to prop the euro.

The official ECB line, however, has been to play down the euro's slide as a normal function of the currency markets. Some politicians have also hinted that a weak euro may prove helpful in boosting EU export prospects.

Speaking at the summit yesterday, Mr Blair said that his intention to hold a referendum on British entry early in the next Parliament was "real" as long as the Government's conditions were met. He added: "What is important to realise is that it is in Britain's interest that the euro succeeds."

His comments on the timing of possible British entry differed in tone from his remarks at Labour's European election campaign launch two weeks ago, when he said that he would not be tied down by an "arbitrary timetable".

The Tories accused Mr Blair of trying to make up for an earlier "lapse of leadership", but welcomed the fact that "belatedly" he had introduced the Government's euro-enthusiasm into campaigning for the June 10 polls.

Government officials denied that Mr Blair had shifted his position. However, his attempt to talk up the single currency and the likelihood of British entry betrayed the concerns among EU leaders at the euro's continued slide.


Bundesbank chief hints at ECB prop for euro


HANS TIETMEYER, President of the Bundesbank, yesterday hinted that the European Central Bank could still intervene in the markets to prop up the ailing euro, insisting the ECB is not neglecting the exchange rate.
"We are not in favour of any neglect of the exchange rate. The markets have not realised the potential of the euro, it is up to them if they want to lose money," Herr Tietmeyer said in a speech at Oxford University.

The comments, however, appeared to contradict the views of Wim Duisenberg, President of the ECB, who on Wednesday said he was inclined to play down the recent fall in the euro.

Mr Duisenberg's views were yesterday echoed by Guy Quaden, Governor of the Belgian Central Bank and an ECB governor, who claimed the euro's decline in value was "not greatly important".

The ECB's apparent inability to agree a coherent line on the euro has been one of the main factors in the currency's rapid slide this week.

The latest confusion took a fresh toll of the euro, which earlier had enjoyed a brief respite bolstered by the news that the Yugoslav Parliament has accepted a peace plan for Kosovo.

The euro climbed from a new dollar low of $1.0303 to clear $1.04 before tumbling back towards $1.0330. The euro also shed its gains against the pound to trade at about 64.30p, compared with a high of 64.76p earlier in the day.

A leading economist yesterday forecast that the euro could fall as low as $0.90 by the end of the year. David Hale, chief economist of Zurich Financial Services and a member of the academic advisory board of the Federal Reserve Bank of Chicago, said the failure of European politicians to kick-start structural reforms and strong growth prospects in the US would continue to depress the euro.

He added that Germany had entered EMU with an overvalued currency and would need "a soft currency to compensate".

SteveHBanc(ruptcies)#71146/3/99; 21:15:34

WILLIAMSBURG, Va. (Reuters) - The U.S. banking industry is showing signs of strain, Federal Reserve Governor Laurence Meyer told an industry group on Thursday, as he said the Fed was stepping up its supervision of big banks.
"We are beginning to see slippage in important indicators of industry strength," he told a conference of state bank supervisors, noting that bad loans were on the rise for the first time since the end of the 1990-91 recession.
"Though still low by historical standards, the volume of non-performing assets increased last year for the first time since 1991 with the deterioration concentrated within commercial and industrial loans," Meyer said.
In addition, delinquencies on agricultural loans have risen because of extremely weak markets for many farm products, he added. Farmers have suffered in recent years because of ailing demand from crisis-stricken Asian nations and Russia that has driven commodity prices down.
As one of several agencies with regulatory authority over U.S. banking, the Fed has begun "sharpening its supervisory focus" over their increasingly complex operations to make sure the banking system is not placed at risk, Meyer said.
Fully 82 percent of the assets of the 50 largest bank holding companies are now held by 20 large banks, Meyer noted, which are more and more involved in activities like packaging their assets into securities and in derivatives dealing.
"We now give increased attention to roughly 20 U.S.-owned and another 10 foreign-owned banks," Meyer said, basically the biggest ones and those with the most complex domestic and international oversight structure....

Cavan ManEmail On Gold Loans From Chris#71156/3/99; 21:18:23

USAGOLD: Your response is teriffic!. I am humbled by the knowledge and intellect displayed at this forum. For those who are becoming frustrated and forlorn with regards to market direction I say; be extra patient and bide your time.
SteveH$268.20#71166/3/99; 21:21:16

What is August gold now?
Cavan ManThe New Graphics#71176/3/99; 21:22:49

Just a thought but has anyone considered the impact of the new paper's graphics on the public psyche if indeed there is a dollar crisis or any other affecting the world's reserve currency? In my opinion the paper looks like monoploy money and the coinage looks like subway tokens. Is my perception off the mark?
Cavan ManThe New Graphics#71186/3/99; 21:27:11

Just a thought but has anyone considered the impact of the new paper's graphics on the public psyche if indeed there is a dollar crisis or any other affecting the world's reserve currency? In my opinion the paper looks like monoploy money and the coinage looks like subway tokens. Is my perception off the mark?
Richard, OregonI'm A Man Of Faith#71196/3/99; 22:26:39

I generally just sit back and listen to you "wiser than I" knights discuss the world of economics and just why things are happening the way they are. But as of late, I've heard an increasing number of round table participants worrying or complaining about the continued fall in the POG (price of gold) for what ever reason.

I just wanted to state that you are not alone. I believe everyone here is disappointed with the POG. We're all waiting for that illusive 'significant rise' and when we often feel/think it's just around the corner, but then bang, another bomb is dropped and the POG continues it's fall.

When I purchased my first gold, the seller told me to plan on a '3-5 year' turn. Now that's only been a year and a half ago, so I've got 1 ½ to 3 ½ years left. I planned for my holdings to supplement my retirement and that's not for at least ten years or so, so I think I'm ok, no matter what the POG is today.

I've disciplined my self to purchase an ounce or half or so, occasionally, just to increase my holdings, ever so slightly. I pick up a ½ the other day. The local guy said 'The markets really down. Selling is good and I'm buying all the way down.' I said 'Yep, that's how you make money'. He agreed. He buying all he can get, even though he's losing money on every coin he sells today.

Cheer up you who are not seeing the big picture. For me, I'm a man of faith and 'God is still on the throne.' Nothing's changed. Buy gold! As someone here 'wiser than I' said once, "Gold, created with the universe". It ain't over. Buy what you can! (If the POG was rising and rising, you'd be wondering why you didn't buy more when it was down. (Try dollar cost averaging for your gold.)

Gandalf the WhiteBIG SPARKS in my crystal ball !#71206/3/99; 23:15:48

It keeps telling me to hold on as "we ain't seen nuttin yet!" --- good for Gold, but the bottom may fall out of the balloon. -- Something is going to snap SOON. -- Do you all get the same feeling ? -- OK, what will it be? -- Speak to me MK, "Ari", the PhD of LA, PeterH and Aragorn III.

something elseCurrency exchange rates#71216/3/99; 23:27:04

Does anyone know of any websites that post the daily exchange rate for dollars & the yen?

Also on a side note. With the amount of US debt outstanding (reference the May newsletter), Fed Chairman Greenspan would not prove to popular should the interst rate be allowed to rise. Any thoughts?

Peter AsherSteve#71226/3/99; 23:42:37

That whole speech reminds me of something I read recently about the media war coverage, "that journalists were commenting on everyone's perception of the events, rather than on the events themselves."

Also, It seems like they want market forces to somehow behave according to the desires of whoever makes the most persuasive lecture, rather than to behave according to what they are.-- Market forces!

"The name is not the thing"

P.S: posting problems tonight, much delay.

TomcatTrue Trader versus True Believer#71236/3/99; 23:55:15

This debate was posted on Kitco earlier today by farfel. Who do you think wins the debate?

farfel (@GOLDEN GOLD psychological BULL.) ID#341227:Copyright © 1999 farfel/Kitco Inc. All rights reserved

Golden Gloves said...

You speak of the gold market's ability to ignore bad news. It did not, in fact, ignore any of the items on your list. Each of them played a part in bringing gold down below $300 in the first place. Each of the items was already factored into the market. Accordingly, the gold market was not ignoring this information during the bounce, but rather had already factored those items into the price.

Farfel Says...

When the Swiss Gold Sale was announced originally, gold analysts noted that the Swiss people would have to vote on a new constitution allowing gold to be de-linked from the franc. Many pundits suggested the Swiss people would never vote in favor of this amendment. YET THEY DID...and upon the announcement gold DID NOT FALL. Gold ignored the NEW bad news regarding the Swiss popular vote.

When the the Bank of England's top dog initially proposed the IMF sellits gold, various gold analysts suggested it would never happen because the US would never approve such a measure. Yet, when Clinton, Rubin, and Gore abruptly announced ( within a one week period ) their desires to see the US sell its gold, the market essentially ignored their announcements. Gold ignored the NEW bad news indicating the American government's sudden keen interest in selling IMF gold.

When the Bank of Canada announced its most recent sale of gold, it was unexpected and left field in nature, given that the government had announced earlier a subsidization relief effort for the ailing gold mining industry. Yet, the gold market ignored the ensuing BOC gold sale bad news.

All these issues were left field events that goldbugs essentially shrugged off. You can argue that they were already factored into the gold price...but in reality, that was not the case.


Golden Gloves says...

The violent reaction to the BOE news was due to the fact that it was a new piece of bad news... each time there has been a new piece of bad news, gold has reacted very decisively -- by going down.

Farfel says...

Again, see my previous paragraph plus my earlier post from yesterday. Gold's violent reaction downward was a case of market rigging by gold shorting institutions that had been alerted earlier of the announcement and proceeded to bombard the market with sell orders. Ask Bill Murphy
for further details.

Further evidence that gold is basing into a psychological bull market (albeit a broad ranged base ) is provided in the reactions of its complementary markets' inability to respond positively to good news.
DELL reports fantastic earnings ( 40% increase ) ...but the stock falls 30%. Several internet stocks have IPO's in the past month and only rise 30% vs. historical norm of 200%-300%


Golden Gloves says....

Mr. Fleckenstein doesn't help much by telling us that it will stop going down when it stops reacting badly to news. Tell us at what price this will happen Bill. Tell us when to buy.

He sounds a lot like Mr. Steven Kaplan. He has advised buying it all the way down.

Farfel says...

Why is Fleckenstein wrong to promote a pro-gold perspective in the market? Only through such promotion will people finally "get it" and move from ludicrously overpriced equities and bonds valued in (unofficially ) depreciating US dollars into a true flight to safety. But any transition from a bull to a bear and vice versa is usually not an overnight process and takes much time. The promotion of gold, even while it falls, is not wrong or invalid. The pro-gold voice should be heard, even as the market suggests it is wrong. As long as that voice is heard, the bear CAN
change to a bull. You advocate silencing it and almost demand goldbugs simply accept the New Era gospel that gold is effectively of no value.
You essentially say, "Roll over and die...or else join the gold shorting crowd." No gold bull can be erected on the basis of the extinction of goldbugs and a goldbug voice. For long term traders, the gold drop should not be too bothersome. So, I do not understand why you are so
upset by Fleckenstein's or Kaplan's perspectives?


Golden Gloves says...

Well yes, one day it will stop declining and will even move up for a while. If he keeps repeating this day after day, does that make him "right" when it finally happens?

Farfel says....

Yes, he will be RIGHT if the upspike in gold makes up for some 20 years of the metal's decline. Based upon market analysis and the huge uncoverable gold short position, there is every reason to believe that, absent government intervention, gold can climb to a new price that will make up for many years of decline.

Golden Gloves says...

Finally, a point about this ongoing argument about manipulation. Manipulation won't work over a prolonged period of time, swimming against the fundamentals. If the shorts were truly WRONG then there would be a pack of buyers waiting for their every sale. Ain't happening.
The duration of the move down should tell you that there is much more than manipulation at work here.

Farfel says...

The shorts control the paper market. Their game is a paper game. If there is any event that compels huge purchases of metal AND THE PURCHASERS DEMAND DELIVERY, then the game is over for the shorts. They cannot deliver, plain and simple. So, as long as the paper markets are healthy ( and lately they are looking particularly sickly ) , then the shorts can manipulate their paper trades and avoid concretizing the paper into gold reality. A stock or bond market crash will end this paper game and compel a flight into real hard assets. If I believe that event MIGHT occur tomorrow, then why would I want to hold paper for so much as 24 hours? Remember, FIVE PER CENT of the population controls NINETY FIVE PER CENT of the wealth. I prefer to be in the five percent of the population that is swimming against the populist mania, especially since I know that when the hysterical crowd is racing for hard assets, the upspikes will be tremendous and ONE MIGHT NOT BE ABLE TO GET POSSESSION OF THE DESIRED ASSET At ALL.


Golden Gloves says....

The manipulation argument is very curious for another reason. Many gold bulls are, in effect, arguing that the government, cabal, whoever, is ALL POWERFUL. They can not be overcome by the fundamentals --yet. The argument continues that there will come a day when they are rendered POWERLESS -- forces will overwhelm them ( Y2K or otherwise ) which they are incapable of defending against. In other
words, an all or nothing analysis. ALL POWERFUL now...

Of course, odds are that neither is the case.

Farfel says...

Prior to the crash of '29, some of the most powerful men in the nation called the shots. Later, those same powerful men were jumping out of windows to their death.

Powerful now, powerless tomorrow....more than likely, THAT is exactly how this corrupt manipulation of the markets will resolve itself. Former idols will be disparaged, ridiculed and extinguished...and those who
were out of favor raised in stature.

Only in America is such a revolution seen as "inconceivable." But America is no longer the country it once was. All evidence suggests an empire in decline, no different than Britain at the beginning of the century.

Golden Gloves says...

Just recognize it for what it is. one of the all time bear markets. it remains so until proven otherwise. the burden of proof is on the bulls. When it is finally back in the bull mode, it will be apparent to all. you won't have to call it a psychological bull market. and you will be able to make plenty of money playing that TREND. you don't have to be in ahead of time, absorbing all this pain... contrary to the prevailing analysis on KITCO.

Farfel says...

Perception is an interesting thing. You insist that we continue to recognize gold in a BEAR market mode. You are aghast at the idea of somebody like myself denying the existence of a gold bear any longer.

Well, I remain adamant that all indications are a notable change in goldbug psychology...a diminishing fear and self-assuredness in the validity of goldbug perception. It is a prolonged basing of a gold bull, but it is truly occurring....what I call a psychological gold bull.

Let me tell a little creating the light bulb, Thomas Edison utilized a variety of experiments and failed 500 times before finally reaching his goal.

A journalist asked him, "Mr. Edison, how did it feel to fail 500 times on the way to achieving your incredible invention? Were you not immensely depressed and discouraged by the entire process?"

Edison responded, "Actually, I never saw it that way. As far as I am concerned, the invention of the light bulb was a 500 step process. Each step was absolutely necessary to reach the goal and I am proud of each and every step.

My point is is all a matter of perception. I have long advocated a change in perception in the gold market and the dissemination of that perception to the media and public.

On the other hand, you, Mr. Golden Gloves, insist that goldbugs adhereto the Establishment's single-minded, unrelenting negative perception on the gold market.

Goldbugs are all Tom Edisons, who believe in the certain truth of their perceptions even as all those around them insist that it is invalid.

Of course, that is why they must be extinguished...but Truth will rise to the top and Truth will find its own bull market someday.


Golden TruthFarfel Kicked Golded Gloves BUTT!#71246/4/99; 0:33:15

Excellent debate Just call me a true believer also in the "Golden Light" that will shine from the tops of the hills. As "Edison" said i didn't fail 500 times when trying to invent the Light Bulb, it was a 500 hundred step process. I also agree with farfel about perception and i perceive we are at step number 499 of the next GOLDEN BULL. The Golden Light will also be very very BRIGHT! What an awesome sight for holders of GOLD it will be. How fearful for holders of Gold paper shorts as they go up in Flames from the intense burning Heat. Buy real physical GOLD before its to LATE!!! Golden Truth.
Peter AsherFarful wins on this alone#71256/4/99; 1:12:04

<<Prior to the crash of '29, some of the most powerful men in the nation called the shots. Later,
those same powerful men were jumping out of windows to their death.>>

GoldsunJulia#71266/4/99; 2:26:53

We know two things about the future:
It won't be perfect.
It will happen in present time.
As a result, striving for perfection in physical preparation will probably prove counterproductive. Also, if our preparations for the future instill or reinforce a habit of placing our energy in the future, we will be less able to deal with the future when it happens, as it always does, in the present.

turbohawgWorldNetDaily's Claire Wolfe#71276/4/99; 2:48:35

a can't miss ... a freedom article, not a gold article ... but ultimately, are they not one and the same ??
SteveHAugust gold now...#71286/4/99; 3:12:09


11:30p EDT Thursday, June 3, 1999

Dear Friend of GATA and Gold:

A quick dispatch on the New York gold show -- that is,
the Northeast Investment in Mining Conference -- just
ended tonight at the Marriot Marquis hotel on Times
Square in New York.

The bad news is that observers said this was the least
well attended Northeast gold show in about five years,
which I suppose is only to be expected, given the
depressed condition of the precious metals markets. The
sinking price of gold, which took some bad knocks even
as we convened, bore heavily on the meeting. I counted
as participants only two major mining companies and two
widely recognized juniors -- the former being Harmony
and Durban Roodeport Deep, the latter being Bema Gold
and Campbell Resources.

While dozens of exploration and pre-production
companies were represented, GATA's delegation had to
wonder how many of them would still be around in even
six months without a substantial rebound in the POG.
The people from these companies were hard sells even
for GATA's $20 raffle tickets -- and we could hardly
blame them.

Enough of the bad news -- not that any of us needs to
hear it, but we have to be straight with you. This
remains a frightful struggle against long odds.

But GATA can do only what it can do and we do have some
good news:

* Several speakers at the conference yesterday and
today, including the conference's gracious organizers,
referred to GATA and urged support for us.

* A lawyer whose firm represents Goldman Sachs, the
investment banking company generally believed to be the
worst enemy of gold, attended the conference and was
keeping an eye on GATA.

* GATA Chairman Bill Murphy was interviewed at length
yesterday and today by reporters from some major news
organizations: Reuters, Bloomberg, Bridge News, Dow
Jones, and, most important, The Wall Street Journal.
Despite extensive publicity about GATA around the
world, like the story in the Sunday London Times two
weeks ago, we haven't yet cracked the New York
financial press. We hope that this will change shortly,
and we really don't care what they say about us as long
as they spell our name right. (No matter what is said
about us, our friends will know us and find us.)

* The senior partner of GATA's law firm, Berger &
Montague of Philadelphia -- Merrill G. Davidoff --
attended both days of the show and helped signify our

* We distributed hundreds of handbills and made some
promising international contacts for moral,
evidentiary, and financial support.

* It was especially valuable and, for me, touching that
several GATA supporters took time out from their jobs
and traveled long distances at their own expense to
help us staff our booth and carry our message to every
corner of the show. This gives us courage. We are
blessed to have such friends.

* And most important of all, there was GATA Chairman
Bill Murphy's 20-minute speech this afternoon. It was
the best attended and most anticipated event of the
conference. It was standing room only, since there were
more than 300 people in the hall already when Bill
began to speak. Bill quickly electrified the crowd by
recounting GATA's formation, purposes, progress, and
plans, and by making our appeal for support. I will
distribute his speech to you and post it at our
Internet site,, in a few days, once we all
get back home and settled and move the speech out of
one computer and into another.

So give me a couple of days to catch up on what
happened in the rest of the world while we were holed
up in New York. I hope to bring you more news soon. In
the meantime, please post and distribute this dispatch
as may seem useful to our cause.

As always, thanks for your interest.

Secretary, Gold Anti-Trust Action Committee Inc.
( This email address is being protected from spambots. You need JavaScript enabled to view it. )

-END- is a site that has currency info.

SteveHGATA love it!#71296/4/99; 3:20:41

1:45a Friday, June 4, 1999

Dear Friend of GATA and Gold:

Here's one more indication that the Gold Anti-Trust
Action Committee is now fully mainstream.

The June issue of Mark Skousen's "Forecasts &
Strategies" newsletter, published today, endorses
GATA's analysis of the gold market and gives us a
good plug.

Skousen doesn't get our legal strategy quite right;
we're not planning necessarily to sue governments and
central banks, since they probably would be immune
to any lawsuit, but rather private interests -- investment
houses and bullion banks -- that are colluding to carry
out the desires of governments and central banks, but
for Skousen's purposes those details don't matter much;
what matters is the explanation for the strange action in
the price of gold.

Here's what Skousen writes:

"Oil has risen 50 percent to $18 a barrel this past
month, but gold has struggled. A big reason: the Bank
of England's unexpected announcement that it intends to
sell half its gold holdings through monthly auctions
beginning in August.

"It seems odd, almost conspiratorial, that a major
central bank would announce that it was selling gold in
the future. Why would they want lower prices for their

"It appears to be a deliberate act to keep down the
price of gold for political reasons. After all, prior
to the announcement, gold and gold stocks were moving
up rapidly, and Alan Greenspan and other central
bankers may have started to worry. According to my
sources, the short interest on gold is at an all-time
high, and a dramatic rise in the gold price would doom
major producers. In any case, the psychology of gold
remains highly negative given this official attack.

"Interestingly, an organization called the Gold
Antitrust Action Committee has just been formed to sue
various governments and central banks for manipulating
the price of gold. Lawyers have to be the most creative
people on earth. I'll keep you posted on further

You can check out Mark Skousen's "Forecasts &
Strategies" at

Secretary, Gold Anti-Trust Action Committee Inc.


SteveHAugust gold ....#71306/4/99; 3:41:12

$268.50, asking $268.60. I am asking $10K (whoops, couldn't resist), paper only.

New dollar coin gold color??

Cage Rattler@something else - Currency exchange rates in realtime (also gold)#71316/4/99; 5:19:20

This site also has euro analysis (intraday to longer term) from a technical perspective by some extremely succesful traders.
TechnicianRusian crop failure?#71326/4/99; 5:42:16

Anyone hear rumblings of major Rusian drop failure? My Russian friends are reporting unprecdented cold Spring with very late plantings and replantings.Could explain the sudden interest in grains I have been observing. Remember last Russian crop failure? Gold benefited. $18 beans.
SteveHNYTIMES says...#71336/4/99; 6:01:52


COLOGNE, Germany -- The leaders of 15 European countries decided Thursday to make the European Union a military power for the first time in its 42-year history, with command headquarters, staffs and forces of its own for peacekeeping and peacemaking missions in future crises like those in Kosovo or Bosnia.

Long an economic giant, the European Union Thursday has a common currency, the euro, in 11 countries. But when it comes to foreign and defense policy, Europe does not even have a telephone number, as Henry A. Kissinger sarcastically observed 25 years ago when he was Secretary of State.

All that will change by the end of next year, the 15 leaders vowed Thursday.

By late 2000, according to the plan announced at the European Union summit meeting here, a single foreign and security policy czar will speak for Europe and carry out the military will of European leaders.

The move will enable many of the members of NATO, as well as several European nations that are not in the alliance, to mount their own campaigns without America's might.

The European leaders declared:

"The union must have the capacity for autonomous action, backed up by credible military forces, the means to decide to use them, and a readiness to do so, in order to respond to international crises without prejudice to actions by NATO."

They echoed language first used by President Jacques Chirac of France and Prime Minister Tony Blair of Britain six months ago after two crises in the Balkans showed how far Europe still had to go to be taken seriously as a military power, even on its own continent. Neither in Bosnia nor in Kosovo were European countries, whose total armed forces exceed those of the United States in size, able to project military power convincingly enough to halt the violence.

Thursday, all 15 leaders agreed to absorb the functions of the 10-nation Western European Union, a long-dormant European defense alliance founded a year before NATO in 1948. They said the Western European Union's 60,000-troop force, Eurocorps, would be put at the disposal of the new, more assertive Europe that is taking shape under the European Union. "In that event," they said, "the W.E.U. as an organization would have completed its purpose."

With Germany's 1990 unification acting as a spur to its neighbors to closer unity, the Treaty of European Union, negotiated at the end of 1991, committed the Europeans to a common currency and a common foreign and security policy and defense policy, building on the common market they created in 1957....

Golden TruthDow Up Again#71346/4/99; 8:05:42

They are buying the market again this morning. Gold down a buck as soon as market opens in New York???
JuliaDon't Worry? Be Happy?#71356/4/99; 8:29:00

Goldsun, Thank you for your good words. You seem to be addressing my questions to FOA on 5/21/99 that I re-posted yesterday, Julia (6/3/99; 6:37:41MDT - Msg ID:7069.)
And I seem to be having difficulty finding the answers I'm looking for to my questions, so I think that I'm not being clear in what it is I want to know, but your THOUGHTS are very much appreciated. Thanks. Julia

something elseSteveH and Cage Rattler#71366/4/99; 8:30:15

Thanks for the website links!
TownCrierMore Confusion Over State of Euro#71376/4/99; 8:37:07

Wordsmithing gets attention.
USAGOLDToday's Gold Market Report: The Real Rate of Return#71386/4/99; 8:38:50

MARKET REPORT(6/3/99): August gold opened $1.10 higher this morning and then
was promptly beat down by the dark side in a manner similar to what occurred two days
ago. The metal is straining to escape the clutches of the short sellers but, as we have said so
many times here, Main Street and Wall Street have different intentions with respect to the
yellow metal. Main Street wants to own it. Wall Street wants to abuse it and in the process
keep alive the highly lucrative and speculative gold-carry trade. Killing these rallies early in
the day is an attempt to keep public awareness of what's going in the gold market to a
minimum. You don't have the press knocking on the door and asking annoying questions
when it appears that gold is stuck in the doldrums. Let it start going up everyday and you
have to deal with querulous questions like --"What is happening with the dollar? Do you
foresee a long term downtrend with gold now in a bull market? Will this effect (God
forbid...)......the.....THE stock market?" The press knows that the public worldwide is
buying gold, but they choose to underplay the fact giving the dark side latitude to do what it
wants with this market. Acknowledging the demand would prompt the obvious: "Why is
the public so interested in gold?" So the dark side moves ruthlessly forward unencumbered
by reality. It would also most likely ignite even stronger demand as the momentum crowd
got wind of what was going on.

Let me bring what could develop as a source of problems for gold's tormentors in the near
future -- the real rate of return. The real rate is a simple calculation that is formulated like

30 Yr T Bond rate - (inflation + taxes as a % of return) = Real Rate of

This simple little formula is a major proposition for sophisticated money managers because
it tells you whether or you are getting a real return on your money or a fictitious nominal
return which is essentially meaningless or non-existent.

One year ago, your real rate of return looked like this (assuming a 40% tax bracket):

5% - (2.1% + 2 %) = .9%

In other words, you received real return of .9% on your hard earned money -- not bad
when compared to historical real rates of return.

Today, your real rate of return looks like this:

5% - (9.08% + 2%) = - 6.8%

That's right -- minus 6.8% when you factor in April's 9.08% Consumer Price Index
growth rate. Not good. The markets are waiting to see if the April numbers are for real and
not an aberration. Given the situation in oil, and because oil plays such a crucial role in both
the CPI and Producer Price Index, we do see the April inflation rate as an aberration but the
start of a new trend. When money managers around the world get out their slide rules and
make these calculations, money is likely to move where the real rate of return is better -- if
there are such places (and right now they are few and far between.) Still another argument
to go to gold.


In gold market news this morning, London Reuters is reporting gold holding $3 above the
twenty year low of $263.85 for those of you who like your historical benchmarks clearly
delineated. `Gold looks set to consolidate in the mid $260's in the near term ahead of the
first UK auction on the 6th July - the calm before the storm,'' said one London dealer. He
didn't mention which way the storm was going to take gold. The Commitment of Traders
report will be released today after the COMEX close at which time we will have a clear idea
what's happened with the enormous short position in gold.

Bridge News reports in London that "The Bank of England (BOE) has published the results
of consultation conducted with London Bullion Market Association (LBMA) members
regarding the gold auctions it plans to begin Jly 6. 'Following the announcement May 7 of
plans to hold a series of gold auctions this financial year, the Bank launched a process of
consultation with members of the London Bullion Market Association on the practical
details of the auctions. This consultation exercise has now been completed,' the Bank said
in a statement.

Those of you who follow this report on a daily basis know that we question whether or not
these sales are nothing more than a bail out of gold loan counterparties on the ropes. Was
this meeting a discussion how to divvy up the gold?

Two other interesting nuggets dropped by Bridge News that fit nicely into the current
discussion on gold:

"Given the significant amounts of gold central banks have apparently lent into the market
there may be potential for a short squeeze situation to develop, Henry Bingham, president
of Van Eck Institutional Advisors, said. A fair amount of the gold that has been lent into the
market has been lent to producers, but there is also a significant amount lent to the carry


"Central bank gold lending is increasing and will this year likely exceed the 4,300 tonnes
seen at the end of 1998, said Philip Klapwijk, managing director of Gold Fields Mineral
Services Ltd. However, Klapwijk dismissed speculation that central bank lending may be
as high as 6,000-10,000 tonnes, saying that such numbers were "fanciful." Gold Fields
Mineral Services expects that central bank gold sales will be lower than the 412 tonnes seen
in 1998, even including the recently announced UK Treasury gold sale plan."

That's it for today....

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

TownCrierUnemployment Falls to 4.2 Percent#71396/4/99; 8:40:48

Economists were split on whether today's report will make the Fed more likely or less likely to start raising interest rates. Average hourly earnings rose by 3.6 percent in May over a year ago. Mining sector lost 7,000 jobs.
TownCrierDollar opens US largely steady, shrugs off jobs data#71406/4/99; 8:44:57

"The focus is squarely on negativity surrounding Europe," a trader said. "There seems to be a lot of infighting, and people are starting to talk about the remote possiblity that things are getting fragile and maybe the euro won't last."

Either way, gold wins big. Think about it...

ss of nepCOLEMAN - Committee of 300#71416/4/99; 9:15:52

Coleman publishes a newsletter. WIR
WIR has a web page

Coleman has written a report on Gold & Silver.

JuliaQuestions, questions and more questions#71426/4/99; 9:26:29

FOA? ANOTHER? MK, Aragorn III? Ari? Peter? Steve? Towncrier? Gandalf? North of 49? Are there any Knights or Ladies out there willing to share their THOUGHTS?????.....

For the record, I believe that too much time spent worrying about what might happen in the future robs us of valuable energy to live life to it's fullest today. Asking questions and gathering information from people knowledgeable in world economics and history, in order to be prepared for a stormy, unfamiliar future, is not worrying. To have a careless, head-in-the-sand, happy-go-lucky, "if you just have faith" attitude about facing the future of our currency tanking for the first time in my lifetime, is not my style. I believe God is all powerful, all knowing and always present. Part of God's answers to prayer have always come to me through prayerful and purposeful questions to and answers from other people. I believe God made each of us to hold a piece of the puzzle and my life is always blessed when someone more versed than me takes the time to share their THOUGHTS with me along my life's journey. And in return I hope I have helped someone else along the way too.

So, to some, maybe my questions appear to be worrying. I intend them to lead me to (1) God's will for my life (2) Closer relationships to other people and (3) A better understanding of the ways of the world than I have now. Rest assured that I don't expect anyone to give me a road map with all the sights and stops along the way marked for me. I do expect to have a better understanding about the direction I want to take after our conversation.

Also, no one needs to sell me on gold. I am buying as it goes down. I am not worried about it . My reasons are with ANOTHER, FOA, Aragorn III, and others here whose reasons for buying gold don't go up and down with the price. Besides that, it seems to me to be the only underpriced investment on the market.

All this to ask questions of you.

What has happened to the people in other countries as they endured the devaluation of their currency. Do you see our experience being different just because we are The United States of America. In other words are there circumstances in our country that would minimize the effects or maybe even magnify them?

I think that Y2k and the devaluation of our money will be harder on the USA because we have had the means to become maxed out industrialized and computerized so we have further to fall. We don't have experience in living without the modernization of our lifestyle. My mother tells that she never knew there was a depression because they had everything they needed on their farm. Today there are fewer people, including me, that can say that in the USA.

Does a country just throw out their devalued currency and print new money? If so, what does one do now to prepare for that event?

In your THOUGHTS, is our position as world reserve currency an atom bomb for our country vs the type of disasters that other countries have experienced who don't hold that position in the world?

Please correct me if I'm wrong, but if we are facing a currency devaluation, won't that affect every aspect of our lives... not just financially? It seems only prudent that we know what life is like for the others in this world who have gone through a devaluation of their currency. The 1929 stock market crash was devastating but it didn't leave us without faith in our money too. What vehicle do you see us using for spending money when our current one tanks? Do you see people having to trade in their paper money for new paper money or is it that the devalued money will not buy as much as before and it is just a matter of time before it recovers. What was/is life like in the Asian countries before and then recovering from devaluation of their currency? Are they recovering as I read in the mainstream press?

I believe in order to be prepared , people have to know their own weaknesses and do what can be done to strengthen them. I feel quite vulnerable and dependent on our way of modern living.

Is being prepared for Y2k enough to prepare us for our currency tanking too? What do you think will happen to the people holding cash for y2k and our money is devalued?

I look forward to the THOUGHTS you have. Thank you.


TownCrierGood stats in this one! - - Fed Has Nest Egg For Any Y2k Crisis#71436/4/99; 9:31:22

Fed has stockpiled enough paper for every American adult to withdraw $1,000 at year's end ($200 billion). For perspective, however, more than $2 trillion pass through the Fed's banking system each day.

Check out S.F. district pres. Perry's asinine statement:
"As an economist, I deal with probabilities all the time. I think the probabilities are very high that on Jan. 1, 2000, nothing very unusual is going to happen."

Duh...nice stretch! "As an outdoorsman, I deal with weather all the time. I think the weather next year will be 75, partly cloudy, with a chance of rain."

Golden TruthY2K Nestegg But Its The Goverments!#71446/4/99; 9:39:57

The Federal Goverment has a 200 BILLION$$$ nestegg ready to go for any Y2K problems real or imagined? Thats $1000 per every person in the U.S. Do you really think that after putting together that kind of cash they are going to let, the price of GOLD rise? This is exactly the the opposite of what they are going to prevent, a perfect example of market psycholgy manipulation. They know record amounts of GOLD are being purchased if anthing they will continue to HAMMER the price down so that most if not all people will lose money on their Insurance? stragegy and buy it back for less! They (Gov) have been playing this Game? for a lot longer than the average bear say 15 or so years. Then they will gloat and say "See i told you not to worry about our paper assets" The whole system is totally rigged always has been and always will be.If my calculations are correct and i checked them twice $200,000,000,000 dollars and GOLD at say 270/oz equals 23040 metric tonnes gold that is 9.2 years of GOLD production!! at 2500mt/year or 2.88 times as much GOLD as the USA claims to have on hand! Thats a lot of cash (Firepower) the thing that really hit me while doing this small calculation is that this has got to inflate the money supply. Or does it? i don't know how the system works exactly but common sense tells me it would. the numbers are here maybe someone else can elaborate on the money supply end of things. So for a quick recap $200,000,000,000 dollars at $270/oz would also equal 740,740,740.7 million oz's of GOLD. Look at the beauty of numubers the above amount all are 740 right to infinity and numbers NEVER LIE unless they are manipulated i rest my case! Golden Truth.
USAGOLDFarfel...Plus a Thought on Shutting Down Markets#71456/4/99; 9:59:02

I want to once again commend you on your unflagging and formidable defense of the yellow metal. Your dichotomy between the paper trade and real gold market is something every gold advocate should try to understand completely. I will add this one comment to your work.

The concentration of economic power in fewer and fewer hands on Wall Street, and the unknowing abdication of that power by Main Street allows the operators in financial markets to wield nearly unlimited power in whatever way they choose. What chance does the physical gold owner have to run the price up when people like J Aron or Morgan Stanley can offset their physical dollar for dollar purchase, with a put option purchased at 10¢ or less on the dollar? Yet that is what is happening. The fact of that matter is that this building short position is little more than a pyramidding scheme to keep the real market from asserting itself, and the losses realized. Like all pyramidding schemes ultimately there is a day of reckoning where the real market must be satisfied. In this case, it could mean enormous losses, financial institution failure, general financial panic and massive inflationary bailouts -- as the gold market because of the gold carry-trade finds itself at the very epicenter of the derivative madness that has gripped financial markets.

I would also add to your analysis that though many jumped out windows in 1929, others went to jail including the president of National City Bank (the predecessor to Citibank) who was convicted of collusion and market rigging.

There's one more point I would like to slip in here that I've been meaning to get posted here and now seems like the appropriate time.

Those who think that what is going in the markets today with respect to market manipulation, rigging, collusion and the like is something new should read Ron Chernow's excellent account of the rise of "The House of Morgan." Reading how various Wall Street groups maneuvered against each other at the turn of the century also does damage to the monolitic conspiracy theories that crop from time to time at these FORA.

One piece of historical reality that sent a chill through me had to do with a panic that seized Wall Street in July 1914 associated with the fear of war in Europe. The New York stock exchange confronted with a flood of sell orders, simply shut down with the blessing of the Secretary of the Treasury and did not re-open until December -- six months later, and "normal trading" did not resume until the following Spring. In other words, those who viewed stocks as a proxy for cash in those days were disengaged from their assets for nearly a year. And it wasn't war that precipitated the event; it was the flood of sell orders.

Chernow relates the story of how a group of stockbrokers would gather on the street to trade stocks clandestinely. Called the "gutter market", the institution started with "four boys and a dog" presumably as couriers and was quickly closed down tby the New York Stock Exchange.

In other words if you owned stocks, you were locked in for the duration. Anyone who thinks that the New York Stock Exchange would not take similar actions today, sanctioned by the Federal government, do not fully understand the atavistic survival mentality of both the government and Wall Street financial institutions. If closing down the exchange means survival of the institutions and that the public takes the loss; then the public takes the loss. So be it. The clear message is that if you wish to diversify your assets into gold, you had better do it now. If there really is a panic in the stock market, you may be cut off from your funds and unable to protect your profits.

Diversification......The key in this bubble economy.

TownCrierHeavy fighting in Kashmir #71466/4/99; 10:04:12

India and Pakistan have again been exchanging intense artillery fire in the disputed region of Kashmir.

I thought it was now high time to call some attention to this flare up.

Golden TruthRight ON USA GOLD!#71476/4/99; 10:19:36

Now thats Truth in the Media!! Tell it like it is no more fluff and that everything will be fine, its such "B.S" Your article cuts right to the Bone. BRAVO!! and keep it coming it will be best for the heard to feel PAIN now for their very hearts may fail from the fear lurking around the corner? Golden Truth.
TownCrierGreenspan's deputy resigns #71486/4/99; 10:24:20

As the Committee's biggest "dove," her absence from the next FOMC meeting could tip the scales towards raising interest rates, a move that is dreaded by stock market investors around the world.
Peter AsherMichael, Julia, Gandalf#71496/4/99; 10:51:10

Michael: Great Post!!

Julia: Got to do serious work today, will try to write tonight.

Gandalf: likewise

CoBra(too)FED created bubble, bubble, toil and trouble #71506/4/99; 11:06:19

Couldn't resist to quote the reknowned and conservative analyst Ned Davis, from the respected research firm of same name.
"Some time ago I wrote in praise of the three Fed chairman - William McChesney Martin, Paul Volcker and Alan Greenspan. Subsequently I have cooled on AG, mostly due to his rate cut last October... the day before options expiration. I saw it to be an extremely manipulative effort to not only squeeze the shorts to keep the bubble from bursting, but, in fact, to dangerously use what he himself called "irrational exhuberance" stock market bubble to rescue the global economy. All of this may be worthy goals, but my belief is that by appearing to completely panic at the first sign of a stock market risk, AG was saying to all investors that risk would be very limited with this Fed, thus encouraging OBSCENE (my holler) speculation. The Fed to underscore its determination to grow the stock market bubble, later cut interest twice more with NO weakness in the U.S. economy, and TOILED to produce a money supply growth explosion at some of the highest rates in history..."

AG's actions led to overinvestment, overconsumption and overspeculation in derivatives, unparalleled in history, which almost caused global collapse. The Fed backing of the bubble now led to record negative savings and household debt relative to GNP. Also historical highs in margin debt (2% GNP or restated $173 billion), an annualized record trade deficit of $310 billion, which in anybody's book is unsustainable.
IMHO, from here on the PPT has to work overtime, including weekends and, of course, nights, where it is easiest to introduce the sinister outcomes of their toil.
The frustration of the advocates of truth and fair play is becoming seriously tested and I, for one, deeply detest these (c)overt actions of manipulating the collective intelligence and idea(l)s of all of us.
Also thank you MK for your open words @ the latest USAGOLD, which I will try to promote to European friends.

NORTH OF 49Julia#71516/4/99; 12:51:04

First of all, I am astounded that you listed me among the giants in your opening sentence! I fear that I would be taxed to even walk in the shadow of the knowledge of these heavyweights. As I mentioned to Michael one time, "I feel like a guy that showed up at a black tie affair, wearing a pair of Levis", but I will attempt to impart my philosophy to a question or two of which you ask.

To begin with, let me say that I fully agree with your Spiritual take on our existance on this "third rock from the sun". This amazing environment that supports us cannot, IMHO be the result of simple evolution. It is much too organized for that. And further, in looking at ouselves, I am not ready to believe that I am 99,000th second cousin to pond scum. There just has to be more to it than that!!
I also believe that there is a natural order to things--all things. From tides, lunar cycles, seasons, life itself, to--yes, even the markets. In the latter catagory, I am not alone, as Welles Wilder, noted commodity analyst has spent most of his career enlarging this concept ( I guess it is most commonly noted within our vernacular as "what goes around, comes around". The IMF, BIS, FED, bullion banks, whomever, it doesn't matter, can "tinker", but they can't reroute the future of a Natural Cycle. If there were ever any violaters of the concept that "History Repeats Itself", it's this lot!

In answer to your question of how life would be after the tanking of the US$, I am reminded of a story told to me by an acquaintance, that visited Disneyland some years ago. While sitting on a park bench, he noticed a gentleman dressed in a white maintenance uniform picking up pieces of paper using a stick with a nail protruding from one end of it. Apparently it was his break time, so he came over and sat down beside my friend and the two of them started up a conversation.

"Must be an interesting job, working here at Disneyland eh?"
my friend asked.
"Oh ya, I just love it here--it's just great!"
"Pretty exciting too I'll bet?"
"I'll say! I just can't wait to get to work in the morning, but I guess I'ld have to say it's not as exciting as my last job."
"Oh, really?" My friend asked. "What did you used to do?"
"Oh, I was one of those Air Traffic Controllers that thought they could push Ronnie around!"

Now, Julia, the point I am trying to make here, is that it is very possible that some dramatic changes are in store for us here, but instead of dwelling on the negative aspect of our outcome, who's to say that some distancing from our present situations might not be a bad thing? Correct me if I am wrong here, but isn't the principal of Abundance, the concentration on the Sourse and Supply rather than the form and effect?

Keep the faith my friend, because as history as proven, it is your best friend.


TownCrierFifth Horseman rides upon the dusty plains...#71526/4/99; 13:08:42

London--Jun 4--1111 ET--OPEC oil output in May, excluding Iraq, was 23.45
million bpd, down 120,000 bpd from April production of 23.57 million bpd,
a Bridge News survey found. But total OPEC production for May was 26.09
million bpd, up from 26.02 million bpd in April, partly due to an increase
in Iraqi output Those figures show an improvement in OPEC's rate of
compliance in May with its pledged output cuts compared to April. By Alex

Tokyo--Jun 4--0640 ET--Iraqi crude oil for July lifting are rolling into
Asia under the new round of the UN-sanctioned oil-for-food, enticing a
steady stream of buyers with its affordability, traders said. By Taizo

Mexico City--Jun 3--1826 ET--Mexico's Energy Secretary Luis Tellez will
travel to Riyadh, Saudi Arabia, Friday to meet with his Saudi and Kuwaiti
counterparts, according to a secretariat press release. Last Friday,
Tellez said that the meeting will discuss the current situation of crude
oil prices as well as possibility of extending March's oil cutback
agreement beyond Apr 1, 2000.

New York--Jun 4--NYMEX energy futures rallied, buoyed by bullish news
of refinery outages and estimates of 89% OPEC compliance in May.
The market was supported by news that Equilon is planning to shut its
Anacortes, Washington refinery's 53,000 barrels-per-day catcracker for
approximately 2 weeks.
"Refinery problems
caught people by surprise," a broker said. "Gasoline made a nice pop back

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No further reproduction without written permission from FWN

Chicken man"A Very Delicate Time"#71536/4/99; 14:15:55

"I'm sorry but this a very delicate time" said Gramlich.....I wonder what is wrong?....sounds like a "danger-thin ice" warning......could the China move be part of it...? I think's my reasoning.....China is saying "we will buy all our outstanding "off-shore.. Hong Kong hot money till June 10th....after that it is all the yauns are inside China's one can attack if there is nothing to for the Hong Kong $ it is on it's own......Hong Kong "conquered" due to curriency for the value of the yaun , it could be figured in taels of gold,and then reconverted to a dollar value....thus is gold went up in dollar terms the yaun would increase in value....good news for China...bad news for the US in cost of importing goods
How would China pay all these Yaun accounts off?....with US$ from their war chest of $130+ Bil of Fed gives China a "good" excuse to sell US paper....if the selling starts can it stop....yes it can, with the Fed at the ready with $200 Bil Y2K money.....IOU's for greenbacks,then trade the greenbacks for gold...remember the "last" one out of the $US is a rotten egg!......time to make a golden egg...?

TownCrierDebtor countries must use IMF cash carefully-IMF#71546/4/99; 14:17:11

IMF pleas for collective action clauses in bond contracts which "stop individual bondholders from blocking much-needed rescheduling deals and removes the need for unanimous agreement on rescheduling debt payments."

Just keep 'em rolling...
I think the F in IMF now stands for Farce.

TownCrierCamdessus wants early decision on IMF gold sales#71556/4/99; 14:28:31

Although U.S officials have been among the primary mouthpieces calling for IMF gold sales, its representative at the IMF cannot vote in favor of the idea unless the U.S. Congress gives the sales its nod of approval. Director Camdessus would like this matter resolved before the Farce er, Fund's annual meeting in September.
TownCrierRemarks by Michel Camdessus, Managing Director IMF, at the Council on Foreign Relations#71566/4/99; 14:39:48

Global Financial Reform: The Evolving Agenda

[excerpt from end of speech. You can read it all at the link, but I don't know why you would want to...]

Before concluding, let me mention two further issues that will need to be on our minds in the next few months as we consider how to strengthen global financial stability and promote economic progress.

First, legitimate questions have been raised about the role of exchange rate arrangements in economic management and crisis situations. It has been striking that most countries in crisis over the past two years were operating some form of pegged arrangement or tightly managed float. We must consider carefully whether such arrangements, per se, are defective or whether they simply have a finite life appropriate to certain stages of development, at certain times and under certain conditions. Indeed it may be argued by some that the problems are primarily technical--reflecting poor composition, or too rigid adjustment mechanisms. In some quarters at least a preference is emerging in favor of regimes that are closer to one end or the other of the spectrum: free floats at one extreme, or currency boards at the other. But ultimately, the primary focus has to be on domestic economic policies which must support unwaveringly the regime of choice. These issues will be debated carefully by the Executive Board in the coming months.

In a related area, I see an increasing need for deepening the commitment to intensified cooperation among the leading industrial countries in the interests of balanced growth and international monetary stability. Increasingly we see the emergence of a tripolar system of currencies, reinforced by the recent launch of the euro, and yet the economic performance of the three currency areas remains quite unbalanced. Quite rightly, domestic concerns will remain uppermost in each country's decision-making, but, since decisions taken at home inevitably reverberate around the world, what we need is stronger cooperation between these three major currency zones, for they cannot ignore their responsibilities for maintaining the stability of the global monetary system.

Second, we must redouble our efforts to integrate into the globalized economy those developing countries that are not yet benefiting from globalization. Many obstacles stand in the way. One of the issues high on the agenda at present is an effort to strengthen the heavily indebted poor countries (HIPC) Initiative. I am confident that, with many proposals having been put forward by the international community, we will soon see agreement on an enhanced initiative that will offer deeper relief to countries pursuing strong reform programs.

But we should not forget the cost element. The Fund is fully committed to this initiative--an initiative it took with its sister the World Bank--yet even under the existing level of debt relief, the Fund's contribution to the HIPC Initiative--which must rely importantly on contributions from members--is not yet fully financed. While some members have made substantial pledges, a shortfall still exists in what is needed to finance the Fund's contribution to the existing Initiative--and to keep ESAF operations running without interruption.

Among the financing options for these operations for the poorer countries, has been the proposal that the IMF should sell a small portion of its gold. I would hope to see a resolution of this question, together with the other financing issues related to the ESAF and the HIPC Initiative, ahead of the IMF Annual Meetings in the Fall. If a decision is taken to sell gold, we will make every effort to ensure that such sales are conducted with minimal disruption to the markets.

Even if this initiative is successful, it will remove only one obstacle to development for a limited number of countries. At one level, I am pleased by the desire that is coming from our membership to see a firm linkage between social policies and debt relief which certainly will contribute to alleviation of poverty. But broader efforts still are needed. The best antidote to poverty is sustainable high-quality growth: without that debt relief will be ineffective in the long-run, and any social progress will prove transient. Therefore we must provide the opportunity for the low income countries to realize export-oriented expansions. The industrial countries can play a part by liberalizing their trade regimes to allow broadly unrestrained access to the access of the poorest countries. Just as important, it is time now for the industrial countries to shake off the "aid fatigue" that has afflicted them for at least the past decade, and that has caused official development assistance (ODA) to fall to its lowest level relative to GDP in a generation. What the international community has learned over the period is that ODA is ineffective when it is not supported by sound policies. Rather than withdrawing assistance, let us find ways of encouraging good policies to promote growth in parallel with enhanced flows. And as we have so lamentably failed in fulfilling our pledge to get the 0.7 percent of world GDP allocated to ODA by the year 2000, may the leaders of the world, instead of undertaking new generous pledges, commit themselves to seriously review those pledges they have already undertaken on the occasion of previous world conferences.

These are just a few of the issues that stand out as we look forward to the next century. For the past two years, we have been preoccupied with the need to resolve crises and to build up the defenses of the international economy against further attacks of contagion. But now we have the opportunity to press ahead with longer-term changes to the system, including the task of making the benefits of globalization available to a much larger number of countries, including the poorer developing countries. Clearly we need a stable global economy for this to be carried forward, and the prospects are now much better than a few months ago. But we also need a high degree of commitment and cooperation within the international community. That too is within our reach.

TownCrierNY Precious Metals Review#71576/4/99; 15:48:06

By Tina Petersen, Bridge News
Washington--Jun 4--Aug gold was rangebound
in thin trading, settling down 40c at $267.2 per ounce.
Aug gold "saw yet again anther disappointing performance,"
said a trader. "Every uptick we see invites someone else to sell," he
said. "We've been seeing a pattern of making contract lows nearly on a
daily basis. There's been a tremendous downtrend." Aug hit a contract low
Thursday of $265.2.
Traders said Aug has good support at $265 and could continue to that
that level.
Gold may see as much as $3 short covering rallies, "but that will be
sold into," said a trader. Trader warned that sentiment remains negative
and suggested that gold could be due for a further slide. "We've got the
Bank of England gold sales to still deal with," he said. First sales are
set for Jul 6. He noted that gold prices have fallen $25 since the
announcement was made. "And there's more downside to be felt yet," he said.

[Bring it on!!]

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

PH in LAJoke of the day.#71586/4/99; 15:48:39


Date: Fri Jun 04 1999 13:00
Jadedone (Compgeek) ID#254175:
Copyright © 1999 Jadedone/Kitco Inc. All rights reserved
"...A real possibility of the (refinery) fires is that when crude was (at) rock bottom, on paper it would of been cost effective to buy gasoline, run it backwards through the refinery, and sell the crude (on the open market)."

Ya gotta wonder what makes a guy like this tick.

At least it shows why I hardly ever go over there even to read anymore.

TownCrierU.S. CREDIT OUTLOOK--The U.S. Treasuries market just can't catch a break#71596/4/99; 16:06:44

Sentiment in the Treasuries Market remains "poor to awful."
An analyst said it would easily spook and trade off if someone said "Boo!" Now let's see... What would be a safe alternative to bonds?

TownCrierU.S. CREDIT OUTLOOK--The U.S. Treasuries market just can't catch a break#71606/4/99; 16:07:44

Oops, forgot to include the link. Check this one out for sure!!
TownCrierCurrency tea leaves...#71616/4/99; 16:10:57

IMM currency futures end higher, except for yen
TechnicianGold's week 7-11 June:)#71626/4/99; 16:38:53

Never have I seen such an oversold market that has simply stopped going down. Nothing is for sure but this coming week should be a "smiley" one for the gold bugs. Off to Florida to bake in sun, wife's idea.
USAGOLDReplies/Comments#71636/4/99; 17:10:47

To all: I always this table to have an international flavor. Seems we're getting there. Welcome all, from all corners of the golden globe.

HLime: I remember an old Ronald Reagan quote to the effect that the difference between a recession and a depression is when the guy down the street is out a job it's a recession, when I'm out a job its a depression. If this doesn't turn around, the mines will be closing down everywhere -- a depression for all but the Barrick's of the world who sold their production forward, borrowed against those forward sales, and contributed to the price decline which closed the mine in McGrath.

Technician: I agree with you on the Road to Serfdom by Hayek ( a good study) which essentially says that you can no more be a little bit socialist than you can be a little bit pregnant -- a certain amount of inevitablility enters the picture.

SteveH: It appears that Mr. Tietmeyer is getting a little tight about the euro but I am not so certain that it is Mr. Wim "Benign Neglect" Duisenberg, not the other members of the ECB board, who should be gagged. Wasn't Netherlands, Duisenberg's home country, a gold seller and a soft currency country? I don't know if Mr. Duisenberg brough such sentiments with him to the ECB but I'm beginning to wonder.

Julia: This is strictly my view but I do think it can be proven. In the second half of the Twentieth Century, devaluations have always been followed by what I would call an inflationary depression where you have rising prices, rising interest rates and other symptoms of inflation mixed with rising unemployment, bankruptcies, cratering equities markets, etc. Do you remember the old misery index -- the inflation rate and unemployment added together? That phrase was coined in the 1970s to describe a set of circumstances brought on by the devaluation of the U.S. $ (against gold) in the early 1970s. Similar devaluations in Malaysia, Mexico, Indonesia, South Korea, the Phillipines, Brazil and Argentina (against the dollar) wreaked similar havoc in those countries but to a greater degree than what happened in the United States in the 1970s. My view is that we will undergo a similar ordeal in the United States at some point in the future. The circumstances are similar in the United States to what they were in the contagion countries -- chronic trade deficits, budget deficits, improperly allocated credit , money printing -- a massive external debt with limited ability to export enough to pay off those loans. I don't need to tell you gold's role in such situations -- a quick scan through gold price charts after the devaluation in those various currencies tells its own story. Whenever I wonder about the effects of a devaluation on an economy, I simply go back and review what happened in the United States in the Seventies. That pretty much tells the story. What is particularly frightening about the possibility of something like this happening in the United States is that I doubt Japan or Europe will come running to our rescue with a bailout package the way we routinely send the IMF out to clean up messes and provide the means for bailing out theinternational banks, so I agree with you on that score as well. I know that this hasn't been short. Perhaps FOA or Another will have additional thoughts for you on this score. I hope so. I too would like to see how they might respond.

USAGOLDJulia...#71646/4/99; 17:16:07

An additional thought: Japan, Europe and the Gulf could justifiably argue that they have already done what they can to bail out the United States since they hold such a large proportion of our external debt, so perhaps I was unfair in my earlier comment about what might happen if the U.S. were to get in deep trouble.
turbohawgremember KYC ??#71656/4/99; 18:57:59

It's alive and well despite recent Congressional action. Went to my bank today to write a check on my brokerage acct like I do every now and then to get cash. It was not written for a particularly large amount (not that I could write a check for a particularly large amount anyway) ... the teller said she couldn't give it to me ... I thought that was odd since I'd done it before ... she said it was due to the balance in my bank acct. I told her I'd not only done it several times before but I usually get more than that ... and that the status of my bank acct was no different than it ever has been ... I use this acct only to get cash. She was pretty quiet. I said "something must have changed" ... asked her if this was due to the Know Your Customer rules ... she said "yeah, kinda". I said "I thought they were shot down". She said "yeah, they rely pretty heavy on it". Omnipotent govt in action.

... which seems to dovetail quite nicely with MK's earlier comments. Once could easily substitute the words 'cash' for stocks and 'bank' for exchange.

>In other words if you owned stocks, you were locked in for the duration. Anyone who thinks that the New York Stock Exchange would not take similar actions today, sanctioned by the Federal government, do not fully understand the atavistic survival mentality of both the government and Wall Street financial institutions. If closing down the exchange
means survival of the institutions and that the public takes the loss; then the public takes the loss. So be it. The clear message is that if you wish to diversify your assets into gold, you had better do it now. If there really is a panic in the stock market, you may be cut off from your funds and unable to protect your profits.<

Now as a result of this action by them, what (further) reaction do you think it will elicit by me ??

tlcthank you FOA#71666/4/99; 19:01:05

You did help clarify the short gold positions thank you. I certainly appreciate your presence at this forum along with all the fine posters that contribute to my education.
Cavan ManTo Julia#71676/4/99; 19:23:31

Dear Lady of the Round Table; you are wiser than you know I'm sure and not a damsel in distress. I was counting out some French Francs tonight. I had two thoughts; first, this is REAL money and how I love the feel of it; second, my only regret in buying gold is that it costs so much. Why is gold so expensive?!

I understand why you are concerned. You are rightfully concerned for your safety both economic and otherwise. Much can and probably will go awry either socially or economically in this world of ours. I did not mention the political dimension because it is plain for all to see that our systems of government are failing us; failing us because of the accelerating weaknesses of our own humanity. We live in an age of iron ships and wooden men do we not? Murphy's Law certainly applies to all of us collectively today in social, economic and political contexts; whatever can go wrong will go wrong. You know all this and you are confident in your purchases of gold. One cannot be more prepared than you are. You have responded to all of the external circumstances haunting your and our existence intellectually by making preparations. You have prepared for the worst and are hoping for the best correct? So, my question to you is, why worry so? You have done your best. You are a good citizen.

Certainly, if you seek a better understanding about the reality of the world we live in you will find it here at this most excellent exchange. However, if not for this forum, a prudent person such as youself of course would ask, "What sayeth common sense?".

If you seek to understand God's will for your life you will not find it here; you will find it within yourself, in your heart. You will find what you seek only through intense and consistent prayer; that is the only way. I know this because several times, I have found it myself. Good luck to're on the right track!

Cavan ManTo USAGOLD#71686/4/99; 19:31:55

Do you think we could all move somewhere Randian like and just shrug?

I must keep thanking you for your wisdom and understanding of world economics. You are right. The turning of the worm will be a protracted affair; perhaps a couple of years or more. Gold is freedom; if not in this market than in the next (black).

The ScotTO HAVE AND TO HOLD TILL DEATH DO US PART#71696/4/99; 20:17:44

Reading your post this eve has brought about thoughts new to me. Being new to this forum and a novice at gold ownership. I originally purchased my gold because I was convinced that by late December, I would be able to reap huge paper profits from my investment. But now, I am getting these new feelings . What would I do with all of that Monopoly money? I have grown tired of the game. In these golden years of life, I need nothing but love and contintment. Having the comfort of my yellow treasure, A loving family, a good wine, soft music and assurance for my God. It may not get any better than this. Thanks, The Scot

Cavan ManFor Golden Truth#71706/4/99; 20:18:36

For your consideration.....

"Liberty is so holy a thing, that God was forced to permit Evil, that it might exist."

Lord Acton

USAGOLDCavan Man...#71716/4/99; 20:19:18

Thank you for your kind comments. Please understand, I do not mean to portray the potential results of decay to be long or medium term only. The disease in my view is well advanced and could manifest itself at any moment without further warning. We just don't know. Let me be clear and unequivocal: The correction could come at any time -- next week for all I know. At the same time, I am grateful for any time we can get.
Cavan ManScot:#71726/4/99; 20:21:04

We enjoy the same; those of us not "so golden". Good thought.
USAGOLDThe Scot, Cavan Man....#71736/4/99; 20:32:20

Wonderful sentiments beautifully expressed. You humble this exalted table with your eloguence and civility.
Cavan ManUSAGOLD#71746/4/99; 20:44:34

You've been at this game a lot longer than I and others have. Speaking for myself only, I concede that you are also much brighter than myself (the proverbial "average bear"). I know that Y2K is only one very small reason to purchase gold. Perhaps you could list the many reasons to own gold for those looking at the comments here. I think a bullet point listing would suffice for all.
Peter AsherTurbo#71756/4/99; 20:52:48

You said "on your brokerage account." Was that an account where the funds were not IN the same bank as the account you were writing the check on. If so, they may not have wanted to risk collecting from the account of a brokerage house. Who knows if it will be there on Monday.
Cavan ManOne For The Road....#71766/4/99; 20:57:38

"Better is a little with righteousness than large income with injustice"


USAGOLDCavan Man...#71776/4/99; 21:03:24

Avoiding a discussion about the first part of your most recent post, let me say that we have Five Horsemen of the New Apocalypse so far:

1. Y2K
2. The overvalued stock market
3. The Asian contagion
4. Euro Introduction ( which I have not taken off the list)
5. Rising oil

I am now considering adding a sixth, and long time members of this table might consider that to be the heralding trumpet in a call to contest. Did I say the word, "Trumpet?" No not that. Please, not that. And this is not a call to contest. No need to worry, my fellow knights and ladies.... I have much to consider before identifying this sixth visage looming on the golden horizon.

THX-1138More news on the Bilderberg Meeting in Portugal#71786/4/99; 21:19:50

Here is a new article about the meeting along with a link to the current list of attendees.
Golden TruthGOLD Article in the National Post. Pretty Good!#71796/4/99; 22:25:48

Very interesting report a definite sign of things to come! First click on "Choose Box" down arrow, when sub menu pops up click on "INVESTING" about 3/4's of the way down. Its easy try it 3 out of the 4 people interviewed are starting to figure whats happening the 4th doesn't want to admit it and he's only 30% sure. Groovy BABY! Golden Truth
Golden TruthKeep forgetting to include the http:// Sorry!#71806/4/99; 22:34:17

Try This U.R.L For GOLD!!!!!!!!!!!!!!!!!!!
Gandalf the WhiteRe: a few of Julia's questions#71816/5/99; 0:44:01

Julia (6/4/99; 9:26:29MDT - Msg ID:7142)
Questions, questions and more questions
FOA? ANOTHER? MK, Aragorn III? Ari? Peter? Steve? Towncrier? Gandalf? North of 49? Are there any Knights or Ladies out there willing to share their THOUGHTS?????.....
I believe God made each of us to hold a piece of the puzzle and my life is always blessed when someone more versed than me takes the time to share their THOUGHTS with me along my life's journey. All this to ask questions of you. I look forward to the THOUGHTS you have. Thank you.
Julia, I like No49, do thank you for including me in your illustrious group of posters at the FORUM to ask of such deep questions. I will attempt to share my piece of the puzzle as I have witnessed it. That being an answer to your following three questions.
"What has happened to the people in other countries as they endured the devaluation of their currency ?" --- "What was/is life like in the Asian countries before and then recovering from devaluation of their currency? --- Are they recovering as I read in the mainstream press?"

This is as I understood what I saw happen in Thailand, one of the first to have a currency crisis. You must realize that this was as seen through the eyes of a "farang" and hopefully there are others that can testify to the true impacts of the native Thai experiences.
Thailand was one of the economic "tigers" of SEAsia and foreign capital flowed into the land from all the major sources of the world the early 1990's. The SEC stock market was similar to the last few years of the DOW and reached over 1250 in 1995. New high-rise buildings were popping up like mushrooms in the spring, in the major cities of Thailand. New factories assembling electronics and high tech goods expanded the need for the labor force in the large cities. The minimum rate of pay for such workers was set by the Thai Gov. at 90 Baht per day. ( the work day being 10 hours per day and the work week
being six days per week, Sunday off ) The exchange rate on the Baht was very stable 25 Baht=a US$. Building of apartments and ocean resort condominiums went wild. The minimum wage rate increased in about three steps to over 135 Baht by 1995 as jobs were available and trained workers scarce. In 1995, evidence of the massive overbuilding was easily seen as high-rise buildings were not filled, and offers of almost free rental was seen in leasing of apartments in Bangkok. Resort condos started to become
vacant and not operated as they defaulted to the mortgage companies. Many of the mortgage and finance companies had little supervision controls on the terms of the loans and many had no collateral. These finance companies started failing and capital started leaving the SEC and the major banks to head out of the country. In June of 1996, the Thai CB froze the assets of all finance companies and banks and devalued the Baht. The Baht went from 25 to the US$, to over 50 to the US$ in a short period of time, before the IMF stepped in and said that it would provide assistance LOANS if certain policies would be implemented. The Thai CB and Gov. agreed and raised interest rates on bank savings accounts to over twenty percent to
hold the remaining the funds in place. The major banks were shown to be sound and allowed to open. Many of the small banks and mortgage companies were taken over by the CB and all non-producing assets liquidated by public auction. All near current mortgages of the mortgage and failed banks were lumped into large packages and offered for sale to foreign "bankers". GS was a major purchaser of such packages at about 10% of the value. How did this impact the common person on the street ? Many people lost their jobs! Many foreign companies closed their doors, not to return. Many projects were canceled. If the person was lucky to still have a job --- nothing changed. Except one thing ! All sales of foreign imported goods stopped completely. No one bought Washington apples as no one could afford those luxuries at the new price. The economy was completely internal !! The only way was for Thailand to "export" itself out of trouble by the sales of commodities. After a tough period of almost two years, things are better. The Baht has stabilized at about 37 Baht to the US$ and the SEC (stock market) has returned to about the 450 level from the bottom of about 250 late last year. BUT things are not like they were before and
it will be many years before the impact will be forgotten. --- One note -- Thai people wear Gold jewelry
(0.965 Au) and know the value of having the protection of Gold to help overcome currency glitches. You
may have also seen the work of one Buddhist Monk that organized donations from Thai's within the country and throughout the world to collect a tonne of Gold to present to the King for the use of national Bank.

Peter AsherTurbohawg#71826/5/99; 4:30:48

You mentioned awhile ago, you were having trouble getting on line from remote locations. We have had major problems with phone line interference knocking out all our online, E-Mail, and fax operations; 75% of the time. Tonight we were down from before 9 PM to after 2 AM. Sprint is still working on it.

At first, there was a lot of insistence that the provider's equipment was faulty, but the problem turned out to be unique to our four phone lines, three computer/modems and two ISP's no matter which combination we tried. Finally, while trying to upload line analysis data from his portable computer and having it crash, the line man had proof that "inaudible electronic noise" is intermittently occurring, which mucks up the constant back and forth signals that must stay clean for all these little blips to stay in touch with each other. Then they electronicly located an intermittent inteference section somewhere between here and the town 12 miles away. Now the have to find and fix it.

This apparently is a common problem on rural phone lines. They can be OK on voice carry but silently failing at Internet flows. There is an article in the current issue of Mother Earth News, on this.

Peter AsherMichael#71836/5/99; 4:47:48

These coincidences keep occurring. This evening I was saying to Robin that it isn't a stock market crash that is going to set everyone scrambling madly for Gold. It's going to be when the -------. I wonder if it's your sixth horseman. Now that you've announced your considering announcing a "Sixth Horseman" contest, maybe I should wait for the event: Yes?
Cavan ManUSAGOLD#71846/5/99; 5:21:51

MK-I do not completely understand the significance of the Euro as it relates to the "Five Horseman". Could you explain or could a member of the forum take a stab at it?
Cavan ManUSAGOLD#71856/5/99; 5:22:11

MK-I do not completely understand the significance of the Euro as it relates to the "Five Horseman". Could you explain or could a member of the forum take a stab at it?
SteveHSame facts; different conclusion#71866/5/99; 5:37:09

"...Movements in the price of bullion are crucial because they tend to lead commodities in general, explains Mr. Sokoloff, who runs a private forecasting firm called 13D Research Inc. out of Sun Valley, Idaho. Gold's moves, in turn, lead inflation and ultimately interest rates.

It looks to me that there's a pretty good chance that gold is breaking down here," he says. "I think it's signalling deflation...."


If physical gold were not in record-high demand and the paper-market wasn't a reflection of history's largest short position then I might agree. But his premise only would stand on water if gold were in a free market. Otherwise, gold is signalling a dollar devaluation. That is if you remove the influence of gold-leasing practices from the price of gold, you end up with the potential mother of all gold price rises. Unencumbered gold will likely rise swiftly and severely.

So, the theory that gold foretells the future direction of commodities is only good in an unmanipulated market, unless all other instances of gold foretelling future prices of commodities were also manipulated markets. As gold-leasing appears to be a recent phenomena, I believe that we are about to see a period of high inflation against other currencies with falling real-estate and automobile sales and prices of same (at least on the used market) and high unemployment with a further increase in bankruptcies while consumer debt is reduced and risky loans are written off. In other words, Japan with a twist (the twist being the mother of all currency devaluations and the rapid rise in the price of gold). In this scenario, the price of oil will rise dramatically and diesel-powered cars will once more see great demand. Peoples lives will be changed because easy credit will be shunned or avoided and Navy showers and neighborhood pot luck suppers, motorcycle parking spots and bicycle racks will become a new experience of gen-X (generation x).

TomcatSteve H: Inflation or Deflation? Perhaps both!#71876/5/99; 7:15:00

Steve, in the long run I, like you, see inflation coming. However, we might see deflation happening first with a inflationary collapse coming later. Here is an example of how that could occur.

Lets make a assumption that the Plunge Protection Team (PPT) musters up enough control to keep the bubble from bursting until Oct/Nov 99. Further, lets assume that only 20% of international industry will be behind in their y2k remediation. By Nov/Dec we will see international banking and industry moving into their contingency plans for y2k preparation. These months will be see a loss in investor confidence, whether justified or not.

Now, given this scenerio, lets say, Steve, that you are an international investor with hundreds of millions in foriegn stocks and bonds and foriegn currenency. Are you going to leave your money in corporate stocks and bonds? Will you be buying the Yen or the Euro when you find out that Japan and Europe are behind in remediation? Which exit doors will you choose?

Plus, some of your own investors are pulling out of your fund in a flight to quality. Small bank runs are beginning to start. Governments are printing money but their own people want $US, gold or silver instead! Given this, where will you find quality?

My take is that by Dec, fear will set in and there will be a flight from stocks and to silver, gold, AND US treasury notes. This is a run to the dollar, not from it. And, oddly enough, their are many dollars to run to! This, combined with falling profits, layoffs, and increasing inventories is deflationary.

If an international and US collapse occurs from all this then the US will have to print its way out of the problem and we could see massive inflation. But there could be six months of massive deflation first. What's your take on this, Steve?

FOASteveH (6/5/99; 5:37:09MDT - Msg ID:7186)#71886/5/99; 10:45:10

SteveH and ALL:

Steve, I believe you are following a chain of thought that leads to many answers about this gold market. Most everyone agrees, even more so today, that this is a "new gold market". It truly is unlike anything seen sense the dollar went off the standard in 71. Analysts have often used
"technical interpretation", "supply and demand" or "price inflation changes" to explain it's past value trends. Yet, during these twenty some years, each of these "methodologies" have been shown to work only "part of the time". Truly, a thinking person can plainly see that the correlation between the dollar price of gold and the amount of "dollar currency inflation" is far out of line.
Some other factor is clearly at play, yet few will accept any "premise" that could, potentially, destroy their "present paper gold portfolio". Many investors talk about the terrible "gold - carry trade", "CBs leasing gold", "bullion banks shorting gold", "mines selling gold forward", and they want it all to stop so gold can return to it's proper commodity price structure! Yet, their perception is as such that all of this will end in a blaze of "short squeeze fire" with their own paper gold investments intact. Yes their personal "gold options", "comex gold futures", "mining stocks" and "gold certificates" will soar in value as this entire industry "practice" melts before the eyes of a disbelieving "wall street"!

This form of "gold investing logic" was born during the recent history that allowed for a super - expanding world dollar reserve to exist along with a gold market of "static value". As few as five years ago, no one questioned how the equity value of practically every world asset could be
expanded far beyond their economic worth without the gold value reflecting that "asset inflation". Lost in the reasoning was the "common sense" conclusion that only an "expanding currency base" could represent these asset values beyond practical, useful, economic purpose. So, many gold
bugs just shrugged off this "extended conflict" and said "someday people are going to recognize it and buy gold".

The lost fact in all of this was that "people were buying gold" on a massive worldwide scale and the dollar price was not reflecting it. Current "gold investing logic" says that cannot happen because "there is a buyer and a seller" for every commodity and the price quickly reflects it. This is true, except that only gold has been warehoused as money, to an extent far beyond it's commodity use (thank Mr. Parks of FAME for pointing this out to the WGC). It is here, that we confront the reason for "why gold has not kept pace" these past years. And why this new market is coming to the end of it's "era".

Steve, I again thank you for reposting my writing. In those posts it was offered how the overall gold market ownership was exploded during these years as every entity embraced the concept of lending gold. Truly, they all saw the money to be made for themselves, but did not fully question the "motive" behind lending gold for almost "no return" by the lenders. Most just accepted the public pronouncement that the "CBs were at war with gold" or that they were "obtaining a return on assets". I think any person, with a brain in their head knew that no one in this world lends anything for free (without a motive), so lets not discuss that one. Also true, some of the CBs are at war with gold, but only "some of them"!

The Euro / faction only appeared to be "at war" as some of them sold gold. However, one must look at the facts behind this, before reaching a conclusion. Haruko Fukuda, World Gold Council chief executive, pointed out on Friday that only two EURO CBs had sold gold, Belgium and Holland. I (FOA) know that those sales were done in private with the gold going into "friendly hands". It was the US / IMF faction that proclaimed to the world that "all of Europe was
selling off their gold reserves" with the purpose to "unmoney gold". Nothing could have been further from the truth. A quick look at statistics as given by the WGC offers:

""In fact the NET amount of sales from the official sector in the last 10 years was only 312 tonnes. Hardly a
landslide," she (Haruko Fukuda) said."

Steve, that is only an average of 31 tonnes a year hitting
the streets. This very fact negates the analysis of many "gold thinkers", in that they say the "CBs are filling the gold consumption deficit. The current deficit is being filled buy investors selling physical gold and holding paper gold. This was recently pointed out by myself, using Another's Thoughts from long ago. It was scoffed at then, now this logic is coming into view.

If one looks, clearly the most gold being sold onto the market is coming from entities that occupy the US / IMF sphere. Australia, Argentina and Canada to name a few. Yet, even these sales are consumed into this massive "new market" with only the small amount mentioned above set free. This same faction is also the one that is flooding the world with "gold paper" that has little behind it except the "currency equity" of the issuer. Their idea of a backed short sale is the holding of "OTC options". Many of the sales over the last few years were little more than "naked" shorts.
In this light it should be easy to see that the world paper gold market is "degenerating in quality", to a point of no return. Small investors are clearly "at risk" from an impending destruction of the current "paper mechanism" that sets the world price of gold. In much the same way the US
stopped the function of the COMEX silver market (in the 80s), because of inability to deliver silver. So will it shut down the gold market. Let's face facts, it was never intended to deliver gold, rather it's purpose was to "bet" on and manage the direction of gold's price! It's an old function, of this short history of gold that worked well as long as investors wanted to expand holdings using paper. But, all eras come to an end and so does this one.

The world wanted cheaper gold to replace dollar reserves. Some entities have taken advantage of this and invested in gold marked with a new "genealogy", that of the Euro and the BIS. Others will have to fight the war on a different front. I suspect that many "IMF / Faction" paper gold holders will be in the US courts for years trying to pursue what never existed, real gold. We shall see.

More likely than not, the BOE sales will mark the end of the road for this current gold market. While their decision appears "foolish" in public, Another knows that these actions are not taken lightly. The currency creators of other nations (Canada?) must also be "feeling foolish" as they stare into future national bankruptcy from price inflation. An inflation brought about from backing a failing dollar by selling their peoples gold to other CBs. The citizens find them to be "smart operators" as the appearance is that of earning interest as gold falls in price. Few understand, as do the treasury officials, that the lower price of gold comes from hollow paper selling. Nor will
they equate $200 oil to a lack of national gold. Later, many investors will grasp why physical gold purchased anywhere from $400 down was a fantastic chance of a "century in nature". Seldom does such a major change take place in ones lifetime.

I ask, what comes first in creating dollar value, "confidence in the dollar" as many think or "confidence in the ability of the dollar to settle contracts"? The history of paper currencies shows that citizens will continue to use even worthless currencies as long as they will settle old contracts. Find your books and research it for yourself. Then ask the question, "in the near future, will I be
holding paper contracts in need of settlement in dollars"? In this light, one can see why the real gold market is cornered, the physical market, that is. You see, oil and gold mix well in these new troubled times.

Thank you for reading and discussing. FOA

Reference Link:

Peter AsherSteve and Tom:#71896/5/99; 11:30:42

If I might add a word or two.

I see it as Tom depicts, up to <<My take is that by Dec, fear will set in and there will be a flight from stocks and to silver, gold, AND US treasury notes. This is a run to the dollar, not from it. And, oddly enough, their are many dollars to run to! This, combined with falling profits, layoffs, and increasing inventories is deflationary.>>

Even though there would be many dollars, STORING them will be the concern. The recessionary aspects of the business slowdown, would of course be deflationary, in the prices of CONSUMABLE products. However, Money will be primarily seeking a save haven, and in this new and different muck up of Y2K and 'Tulip time', paper storage of any kind will be an anathema. Money will seek those assets that hold their PHYSICAL value, not just their trade value.

So, while the general economy of goods and services crashes, liquidity would flow to the classic intangibles. These should experience definitive inflation, while the products of industry and labor go begging.

If I was that theoretical investor with hundreds of millions of dollars, I would be purchasing Timber tracts Maybe some carefully selected prime (not dependent on irrigation) farm land and --Gold.

Cavan ManQuestion For Wise Minds#71906/5/99; 11:40:57

SteveH, FOA, Tomcat, Peter Asher et al:

I have two questions if anyone would like to help out....

1. At this point in time meaning 6-99, if you had the perfect opportunity to launch a new business , would you do it? Let me qualify "perfect"; excellent idea with modest cost of entry, say, $25K. I am really asking about timing because this is not the sort of idea that depends on economic turbulence. This friend of mine has been waiting for her chance (to go into business) for about ten years and thinks she finally has what she is looking for.

The second question is all mine.....

2. What percentages of physical gold and cash would you maintain at this time? Thanks you.

turbohawgPeter#71916/5/99; 11:47:39

Thanks for your responses.

Your description of my banking/brokerage situation is accurate. I have no doubt that the reason you cited for their denial of my request is at least partly true. Fact is, if I was in their position I wouldn't have given it to me either !!! But they have been ... on multiple occasions ... and in greater amounts ... which suggests to me that they're now tightening up. I don't mean to make it sound any more serious than the inconvenience that it was ... I'm not losing any sleep ... I'll simply alter my preparations slightly so as to insure against getting caught without any access to my funds in the future.

My bank may have been overly lax to begin with. Since I've hardly used a bank at all for the last several years I have nothing to compare to. Last summer (prior to the near mkt crash) I walked into this same bank after having had my acct open for a relatively short time, an unfamiliar face, and requested a sizable loan to be paid back short term in one lump sum with funds that I knew I would be receiving. There was no request for any kind of proof that those funds would in fact be coming, nor any request for proof of income of any kind, nor (if I remember correctly) no proof of ID !!! As fast as this went through, I'm not sure she even ran a credit check on the name I gave her (which was my real name, of course) !!! Makes me wonder if it would be this easy again ... perhaps I'll go try it just for sh*ts and giggles.

Regarding ISP's, my frustration with the one I use has been offset only slightly by the fact that it travels with me. In considering your comments and having recently checked out many others and finding that they can't accomodate my needs, it may be that the technology and development behind it all is still too rudimentary at some levels to expect more.

Thanks again for your responses.

Gandalf the WhiteHere is the article FOA referred to --- note other items at the end.#71926/5/99; 11:48:01

Yahoo! Headlines Business

Friday June 4, 7:42 AM
Gold council says IMF sales plan will not work
MELBOURNE, June 4 - World Gold Council chief executive Haruko Fukuda said on Friday an International Monetary Fund plan to sell gold to help poor countries would not achieve its aim. Fukuda said the IMF was yet to finalise plans but its announcement earlier this year raised concerns about how much gold could be put into the market. "We have done a lot of research at the World Gold Council and it is quite clear this is not in the interests of these countries because many of these countries are gold producers and exporters," she told reporters at a briefing.
"If by the IMF's actions the gold price was to decline it actually does not help these countries because export earnings decline." IMF managing director Michel Camdessus said in April that the IMF planned to sell some of its 103 million ounce stockpile to pay for a programme of debt
relief to help poor countries. Some ministers have argued for sales of five million ounces, while others have pushed for sales of 10 million ounces or more. Fukuda was named in February as the new chief executive of the World Gold
Council which is funded by mining companies to promote gold. Fukuda said an increasing amount of the council's time was also taken up with liaising with central banks, which have put pressure on gold prices through the sale of reserves. She said there was unlikely to be further pressure on gold prices from countries who have linked their currencies to the euro. "There are only two European central banks that have sold gold, and they are not likely to sell any more, and they are Belgium and Holland," she said. "They did so because they needed to raise capital ahead of joining the euro." Fukuda said in the past 10 years gold sale by central banks in Australia, Argentina, Canada, Belgium and Holland had been partly offset by purchases by central banks in other nations. "In fact the net amount of sales from the official sector in the last 10 years was only 312 tonnes. Hardly a landslide," she said.
Category : Business
Previous Story: No reason for euro to fall further--Japan's Kuroda (Reuters)
Next Story: U.S. Jewish group to sue Bank Austria for $400 mln (Reuters)

Gandalf the WhiteCavan's Question#71936/5/99; 11:56:17

My advise to that friend that has waited years to invest the $25K is that it is a "franchise", it would be better to just burn the $25K and get some heat from the paper, as the other option will provide less. -- However, if this is a self run services type business, the results may be different. Now is not the time to think about jumping into a new adventure!

SteveHCavan Man#71946/5/99; 12:21:31

I think a gold bullion and silver exchange shop might be a good idea but best to have a deep-pocket backer if people start buying or selling in ernest.
Peter AsherCavan Man#71956/5/99; 12:31:33

The big question is will the business remain viable during economic turbulence? We have been pondering this dilemma ourselves at this time. Obviously, Dot com endeavors are worthless if the net crashes, High-End design and construction will zero out, and even the ability to jump into general construction from a well equipped and technically expert position will find a very crowded pond to swim in.

It is said that during the Great Depression, Bars and movie houses did very well. People will always scrounge up something to blot out the reality for a while.

One thought we've had (which we're to remote for) is a small grocery store that could obtain most of it's inventory on a local or regional level, not being dependent on computer managed stock and shipping, or getting past Green Beret' warehouse guards

Since it's something specific that your friend is looking at, you need to envision how the customer base might be affected

USAGOLDGandalf...#71966/5/99; 12:34:10

In order to balance the sentence describing the World Gold Council as "funded by mining companies to promote gold," a sentence should be added after this:

"IMF managing director Michel Camdessus said in April that the IMF planned to sell some of its 103 million ounce
stockpile to pay for a programme of debt relief to help poor countries."

Which reads:

"The International Monetary Fund (IMF) was founded after World War II to promote fiat money and international socialism."

If you insist on shining the glaring light on one vested interest, it is only fair to shine it equally well on the opposing vested interest.

Peter AsherCavan Man#71976/5/99; 12:42:03

The big question is will the business remain viable during economic turbulence? We have been pondering this dilemma ourselves at this time. Obviously, Dot com endeavors are worthless if the net crashes, High-End design and construction will zero out, and even the ability to jump into general construction from a well equipped and technically expert position will find a very crowded pond to swim in.

It is said that during the Great Depression, Bars and movie houses did very well. People will always scrounge up something to blot out the reality for a while.

One thought we've had (which we're to remote for) is a small grocery store that could obtain most of it's inventory on a local or regional level, not being dependent on computer managed stock and shipping, or getting past Green Beret' warehouse guards

Since it's something specific that your friend is looking at, you need to envision how the customer base might be affected by the various scenarios discussed here. This mornings posts alone should be helpful.


I would only leave in the bank what I needed to pay bills, I'd keep enough cash for a couple of months life support purchases and if I had paid off my mortgage and completed my Y2Y, generator, wood stove ,fuel and firewood and food storage acquisitions, I'd put anything else in the mail to CPM.

TomcatCavan Man#71986/5/99; 12:44:34

$25K is not a lot to start a business. Any business would have to be flexible and designed to make it through the turbulent times ahead. My suggestion, which would take less than $25K, would be a barter exchange. Current barter exchanges operate at a profit and you would be overwhelmed with business in either an inflationary or deflationary collapse.
Cavan ManPeter Asher#71996/5/99; 13:09:31

Thanks. Would you pay off your mortgage if you had the cash today? Would or should that be a priority?
Cavan ManUSAGOLD#72006/5/99; 13:11:16

How do you really feel about the IMF? We should all be out playing golf!
Cavan ManPeter Asher#72016/5/99; 13:14:47

I think Y2K is going to be more of a problem than most people think. You sould as if you are taking it more seriously than I am. I have the generator but not the wood stove. Ha! I bought a kerosene heater in lieu of the stove. Any other thoughts? Could it posssibly be that bad?
Cavan ManGandalf.....#72026/5/99; 13:19:36

Great humor and good common sense! Here's a question for you to ponder....Why do we gather at this forum and take the precautions we discuss? Are we more intelligent or more practical than the rest of the world or are we simply a support group for one another enjoying the company of others that see as we do?
Cavan ManAnother Question#72036/5/99; 13:27:03

Anyone want to take a crack at what to do with an IRA (currently in MM Treasuries) while we're on the general topic?
FOATime to go again.#72046/5/99; 13:56:21

Julia and ALL,
I have not forgotten our discussion from the other day. It will be pursued in time. As I am still
very busy, I offer what I can. thanks FOA

Peter AsherCavan Man, re' Golf#72056/5/99; 14:06:15

That's the best advice yet today. I'm going back out in the drizzle and finish building a deck, I'm working on a long winded answer to Julia but I'll finish it later.
Cavan ManPeter Asher#72066/5/99; 14:25:51

Terribly hot and humid here albeit typical; I'm having a pint while watching the girls wash my car!
AristotleA word or two for Julia#72076/5/99; 14:44:44

It looks like you've received good responses to your set of questions and concerns, but I didn't see that anyone has yet addressed these question of yours:

<"Does a country just throw out their devalued currency and print new money?

"In your THOUGHTS, is our position as world reserve currency an atom bomb for our country vs the type of disasters that other countries have experienced who don't hold that position in the world?">

The answer to the first question is "No." The currency remains in use, but with a diminished purchasing power. Any cash savings you has is thereby eroded, even though the numbers in the account remain the same. The difference is felt when you go to spend your savings. The world would price its exports to Amereica accordingly, and you would therefore see prices of EVERYTHING eventually rise. Because workers are the furthest down the economic "foodchain," they would be the last to see their salaries adjusted upward to reflect the devalued currency. As a result, they might have to rely heavily upon savings...which has lost its buying power! By having your savings in Gold, that problem is avoided.

Let's take a look at a brief comment from an article that SteveH posted two weeks ago by Cheryl Strauss Einhorn:

"...Asians, who had been net sellers [of Gold] last year, have begun buying again."

They weren't selling Gold in the typical Western way of thinking about it (which would be to sell for a profit due to its rise in price from the local currency devaluation that swept the reagion.) No, they weren't "selling" Gold, but rather SPENDING their Gold savings as necessary to meet their needs. And you can see now that many price and salary adjustments have worked their way through the "foodchain," the Asian working are buying (which means SAVING) Gold again.

Let's also take another look at FOA's recent remarks, which fit in beautifully here:

<I ask, what comes first in creating dollar value, "confidence in the dollar" as many think or "confidence in the ability of the dollar to settle contracts"? The history of paper currencies shows that citizens will continue to use even worthless currencies as long as they will settle old contracts. Find your books and research it for yourself. Then ask the question, "in the near future, will I be
holding paper contracts in need of settlement in dollars"?>

You may currently have contracts obligating you to deliver dollars at future intervals. A home loan for example. Or rent. In the example of rent, even though the dollar has devalued by let's say 50%, your rent won't double until your landlord can modify the rent agreement. However, countries exporting goods to the US would immediately double their prices (as it would be done for them on the foreign exchange markets during the proper exchange rate computations.) Your salary at work won't increase until your employer doubles the price of his products in order to pass these increased import costs along to the customers. As you are both a worker AND a customer, you can see how a certain gridlock can seize the system. Gold savings is the ultimate lubricant. In a sense, through Gold you help to save yourself AND save the world...some jobs simply won't exist unless there is demand for their product, often manifested in the presence of discretionary income or savings of others.

In regard to your second question, "Yes!" The devaluations experienced by other countries have come about when the supply of currency created becomes factored into prices and exchange rates after a period of complacency by the markets that didn't allow for a continuous slow evolution of price adjustments. Like pressures that build up in a geologic fault, one day it just suddenly gives--snap! You can easily convince yourself that in the unique circumstance of being the world reserve currency all these years, there is a VAST supply of dollars and past complacency pressuring the system for a very substantial *snap!* the likes of which has never been demonstrated by the devaluation of a currency within a banana republic. As in the preceeding paragraph, we will look to any citizens of the world that maintain viable discretionary income and savings with which to lubricate our ensuing economic gridlock. History books may some day be commending the European Monetary Union for having the presence of mind to forecast these events, and to provide for an escape route via the euro as an independent currency alternative (to the dollar) that will reveal the preeminence of Gold in the monetary systems of the world. I say "reveal" and not "reestablish" simply because the Gold has never left the stage. It has been standing quitely behind several props in this earthly economics play as we hurtle through space with an obscure script and owners manual.

Again, Gold never left the scene. Keep working for it--you'll need it all-too-soon for the exact same reasons that you need money. ---Aristotle

Cavan ManAristotle#72086/5/99; 15:04:13

Could you please elaborate on your remarks about the EMU and the Euro. That is the piece of the puzzle I cannot fit. If you don't mind...please.
THX-1138Some personal thoughts#72096/5/99; 15:25:32

It hit me a couple of days ago. I keep hearing from Pastors and other Godly men and women that they see a dark cloud hanging over America. Well I think that cloud is the spirit of GREED. (6th Horseman?. Everyone thinks they will be rich in the future just by investing in the stockmarket. They have total control over their lives.

HA! you can't have control over your own life if the market is rigged.

The only way to bring America back to the Godly way our forefathers wanted isn't through the government. Everything in that direction has been stacked against us. The only way for people to return to God is if they lose everything they earned and saved. When the stock market crashes you will see one of the largest religious revivals ever seen in America as people with no hope turn to God for help.

The reason I am trying to accumulate as much Gold as I can is in order to help my family when they lose all the money they have invested. My Father thinks I am nuts and is worried that I am losing all that interest I could be earning in the stockmarket. I look at my little hoard of Gold as his salvation from poverty.

Just had to get this off my chest.

Gandalf the WhiteQuick replies, and then to work!#72106/5/99; 15:50:31

USAGOLD -- Yes, even the WGC does not set the world straight on the IMF as you do !!! I only setforth that posting as it was in part, from what FOA was quoting.
I too feel that the IMF will fall during the forthcoming dark battle.

Caven Man -- I truly feel that we gather here at the FORUM among these Knights and Ladies of the Tableround as we were destined to participate in the learning experience setforth by our Host, MK. -- What is it that you find here that is not found elsewhere ? --- THE answer is TRUTH, kindness and civility!!! -- I have surfed the web for long periods and stopped a number of times in search of what this FORUM has. I have found my home. Please jump in all you "lurkers" and express your doubts, questions, and comments. Like I tell my "students", "There is no such thing as a dumb question ! -- Only dumb answers." So now you all see why I am quiet much of the time.

Cavan ManGandalf#72116/5/99; 15:55:49

This is my home also. I happen to like the host although we have never met. Do you ever ask yourself the question; what if I am wrong? By the way, do you know what "IMHO" means speaking of stupid questions? Signed....the student
Cavan ManTHX-1138#72126/5/99; 16:02:35

The pursuit of is ruining our culture from the top down and bottom up. We shall see if you are right. I think you are. It is time we all learned a lesson. If so, the medicine will be strong but hopefully, we will find the cure for what ails us. Didn't Santayana say something like the third millenium will be religious or it will not be? Help me out there with this fellow Knights and Ladies.
Gandalf the Whiteeasy answers#72136/5/99; 16:20:57

Cavan Man --- Took me a while to pickup on the abbreviations used in cyberspace to save time and save the ones that have a hard time spelling the "King's Angrit" !
IMHO mean "In My Humble Opinion"
BTW, (By The Way), variations of that are IMNSHO which adds "Not SO"-- but we will never see that use on this FORUM.

CoBra(too)(No Subject)#72146/5/99; 16:23:32

Lot's of issues raised by FOA - in answer to Steve H. - I am still at a loss, even if do agree mostly with FOA's conclusions, there are still some deductions, which are either not totally coherent or do need more explanations.
I agree on the difference of paper gold and physical bullion markets, but when the whole shebang of derivative, forward and carry trade in gold took hold, there have been the CB's lending or leasing to bullion banks-we all know who they are-, who in turn sold the physical to the market in order to generate cheap $'s to lend to hedge funds as well as producers. IMHO, it is the bullion banks, which guaranteed to return the physical asset (AU) to the CB's and that is where the systemic risk is located.
I can't care less about the wisdom of Barrick or some of the Aussie hedgers, except being detrimental to their own demise. What I'm more interested in is the fact, that most CB's in the gold lending/leasing business are awaking to the fact that their gold is effectively sold and there may be no way to recuperate it at agreed terms, notwithstanding the fact that their only hard currency asset was devalued at least 30 to 40% in no time -the meagre interest they have recouped in the few years of leasing may have outstripped the storage costs but in no way makes up for the massive devaluation of their only true currency reserve - another euphemism for new technocrat's paradigm, or is it imbeciles?

Anyway, in view of the (mostly speculative, sorry derivative carry trade shorts in AU), the generally accepted size being a whopping 14.000 tons of gold shorts in the "paper gold" market, while the physical demand is booming, growing exponentially since years (while production is falling for the first time in years),it is only vis a vis the US$ that gold is marking new lows, the POG is up vs all other currencies!).
The fundamental problem as Paul Volcker, Dr Yen et al. have expressed openly is the dependency on the only global reserve currency - THE US (credit bubble, stock market ...) $ - , to prolong the (virtual) concept(-ion) of an ever-expanding economy of the new era.
In this sense some of the BC's seem at war with gold. It does seem to be a losing proposition, since most of the aledged BC sellers probably will wake up to the fact, that they don't have any AU left, which would be available in unencumbered status.
Yes, I agree - make you some gold - but also keep in mind the game is played by heavy-weights, who will not surrender easily -, though they've forfeited a lot of the $-future via expanding the credit bubble aggressively.
Enjoy your weekend....

AristotleMortgages#72156/5/99; 16:35:06

Cavan Man, you asked, "Would you pay off your mortgage if you had the cash today? Would or should that be a priority?"

I recently had this same topic of discussion with a friend, and this is what I told him.
I don't feel that would be the most prudent course of action. (Perhaps you, Cavan Man, have already come to that conclusion if you mustered the patience to read through my typo-ridden response to Julia.) Obviously, because we can't predict future events with absolute certainty, it is prudent to pursue a course that capitalizes on your foresight of the most likely outcome, but also leaves you nimble enough to deal with something you don't expect.

By sinking all of your monetary savings into your home mortgage, you give up a lot of flexibility. The dollar is far more likely to tank than to get significantly stronger. By taking out a mortgage, whether you view it this way or not, you are effectively "shorting" the dollar. That is, you are selling your dollar-denominated productivity at the time the mortgage is written, to be "covered" (bought back) with your future productivity denominated in perhaps cheaper dollars.

If you are of the mind that dollars, as a monetary asset, will be getting even cheaper, don't be so quick to close out this short position. Let it ride and make the payments as needed. But don't squander your available savings in the meanwhile on something like a trip to Hawaii. In that example, it won't be there to redeem as needed for future payment obligations should a problem develop with your personal productivity/earning power. Gold is a safe and flexible asset class that eliminates a number of your financial uncertainties. Flexibility is vital. If you paid off your motgage, and some situation were to develop in which you needed cash, you would find it more difficult to liquidate a portion of your house to raise this money than you would to sell/spend some of your Gold. Further, if the dollar tanks, the higher(!) interest rate on any new home equity loan you might seek would probably be difficult to deal with. Meanwhile, the dollar/Gold exchange rate would soar, and a small amount of Gold savings could be used to cover old contract obligations (such as existing loan payments) or make the needed acquisition of goods with its purchasing power that wouldn't go south with that of the dollar.

In summary, my friend saw the prudence in this approach under the existing economic environment: to sit on his mortgage, making the minimum payments necessary to service the debt. Extra earnings would be saved, some as cash but most as Gold. If the bank moves to increase the interest rate on his variable-rate loan by some onerous amount (like we see in countries that experience devaluation of their currency), he would at that time, and only at that time, consider paying down as much principle as possible. I guess if you have a fixed interest rate, you might as well ride that particular "dollar-short" all the way down. Suffice to say, lenders don't like devaluations as much as borrowers do. But as a borrower, your key question must be, "Can you ensure a future income stream?" Because even with cheap dollars, and an entry-level position as a store clerk paying $40 per hour, it doesn't do you any good if you are completely out of work and out of Gold (now priced MUCH higher!). How would you service your debt? I hope this has been helpful.

As I said to Julia, a person needs Gold for the exact same reason that a person needs money. It's what it is! ---Aristotle

Cavan ManGandalf & Aristotle#72166/5/99; 16:44:07

To Gandalf....thanks! To Aristotle.....I have the same opinion; just looking for affirmation. I could not have expressed my (our) rationale so eloquently.
AristotleTwo items#72176/5/99; 16:51:25

CoBra(too), I don't believe I have ever had the pleasure of exchanging words with you in the past. It is long overdue. "Greetings! I'm glad you have joined our good company."

Cavan Man, I didn't see your EMU and euro question to me until after I posted that piece on mortgages. I'll toss something together in a moment...

CoBra(too)The question ....#72186/5/99; 17:05:41

Sorry - I seem to get carried away with my own answers...or is it questioning my own answers...

FOA - If the CB's and producers leased or forwarded gold - as I understand via bullion banks to counterparties -it would, probably not take much (AU) in terms of the first default of these counterparties (LTCM-?, why else would it be a systemic risk - except all other delta option et al derivative instruments invested in Russian bonds to exaggerate interest difference - just kidding???)- to be unable to cover -at all!
Gold, as it seems has mostly found private buyers, who increasingly feel the pressure of having to "compete" with the US$. A luxury no one wants to repeat from here on! Not even the euro, which may be (have been)the catalyst, next to a single SE-Asian currency to question the supremacy of reprintable paper $ as sole reserve currency.

Again answering my own questions - sorry - unintended - Pls
comment! Regards CB(too)

Buena FeLUST!!!!!#72196/5/99; 17:20:28

The IMF/US dollar financial managers/backers LUST for one thing more than anything else! Confidence in their precious (sik!) paper, as FOA and others have previously commented. When that confidence is truly threatened they (the PPT crowd) will stop at nothing to keep the ship afloat. But they are only men and women like us, not "gods", so it (confidence) will come to an end. Maybe sooner than we think.

I agree with the wise ones of this forum. BUY PHYSICAL AU!
Paper means/holds nothing.

Keep Well!!

PS If you can, look at a very long term (back to 1979 at least) chart of the US-30YR T-Bond. We appear to be hovering just above the long-term support trend line. When (not if) this is broken LOOK OUT BELOW!!! And LOOK UP FOR AU!

AristotleReply to Cavan Man#72206/5/99; 17:31:57

"Aristotle, could you please elaborate on your remarks about the EMU and the Euro. That is the piece of the puzzle I cannot fit. If you don't mind...please."

At the moment, time has grown short for me. I had promised a friend I would try to wrap up some paperwork on a project today, and that awaits my further attention. So finding myself short of time, I realize that your question is HUGE! I wish you had been more specific when you requested elaboration. If I may be so bold as to guess where the trouble spot lies, I will offer this short answer. If I have mis-guessed, let me know and will target that area when time allows.

How will the EMU and euro help "save the world," so to speak? We must revisit the economic gridlock that develops when money goes bad. There is a vicious circle when the workers that fill a demand are also the customers that create the demand in a closed (self contained) system. If you have no money and no income to generate demand for a product, such as cookware, or portable radios, the company certainly won't be hiring you or anyone else to manufacture such items that can't be bought. Either everyone works and consumes, or nobody works and consumes. Quickly, let's revisit my key example to Julia:

<"...In the example of rent, even though the dollar has devalued by let's say 50%, your rent won't double until your landlord can modify the rent agreement. However, countries exporting goods to the US would immediately double their prices (as it would be done for them on the foreign exchange markets during the proper exchange rate computations.) Your salary at work won't increase until your employer doubles the price of his products in order to pass these increased import costs along to the customers. As you are both a worker AND a customer, you can see how a certain gridlock can seize the system. Gold savings is the ultimate lubricant. In a sense, through Gold you help to save yourself AND save the world...some jobs simply won't exist unless there is demand for their product, often manifested in the presence of discretionary income or savings of others.">

To better see how the EMU and euro will save the world from gridlock, use my old standby trick of simply thinking of countries as Big People. If we have some people that don't go down with the ship--meaning, that they use money that functions independently of the dollar--they will remain as a viable entity to help relubricate the cogs and gears of an otherwise seized up global economic machine.
The euro was created to be specifically self-sustaining and independent of other national currencies. Its value will be held in its ability to purchase Gold and to settle contracts.

America has a choice to either put up protectionist walls and create a closed system where we only trade goods and services internally with our tree-bark money (as in the Marco Polo visit to the Great Khan), or else we accept the bitter pill of our cumulative past monetary mismanagemant and look to those remaining viable parts of the world (non-EMU/dollar nations) to grease our wheels. ---Aristotle

JCTexGandalf The White#72216/5/99; 17:46:12

I absolutely second the motion: "learning experience setforth by our Host, MK. -- What is it that you find here that is not found elsewhere ? --- THE answer is TRUTH, kindness and civility!!! " I would also add a person can get quite an education on this site. I, for one, am very grateful for all of the above.
CoBra(too)@Aristotle#72226/5/99; 17:51:12

Sir Aristotle,
Thank you for recognising a humble newbee on the internet and the forums of real value, which I seem to luckily have stumbled upon early.
After some consideration on the available gold forums I have taken a chance to jump into the IMHO, most sophisticated round table of honoured knights of the golden grail and end up feeling mostly inadequate in articulating my beliefs and fears (probably) in such a knowledgeable and noble place.
IMHO-in the long run the fundamental economics of demand/
supply will not be controlled by PPT - it will be controlled
by us - the market (participants).
Take care and thank you for your consideration

Cavan ManEuro#72236/5/99; 17:55:41

Aristotle, My heretofore perspective on the Euro was/is tha t it simply is a new currency created out of the need to have one because of the EMU. With a single currency and economic union, Europe becomes a much bigger player; probably the upside looks better this way for growth and prosperity. Souns like there is another agenda I am not aware of. That is the reason I ask the question.
USAGOLDComments/Replies/Requests#72246/5/99; 18:39:56

Gandalf...I wanted to thank of your description of the situation in Thailand prior to and just after The Contagion ripped through that unfortunate country. I can remember reading a National Geographic on Malaysia just before the The Contagion hit there. NG featured the twin towers in Kuala Lampur, the tallest buildings in the world. I thought to myself "Why are they building skyscrapers to the sky in a country where most of the fields are still plowed by oxen?" It was an obvious incongruity. It was only later that I found the reasons why. Now those buildings too remain an empty monument to greed and stupidity and the people remain impoverished. I've handled baht chain as a curiosity back in my youth...It is a kind of currency with each link of standard weight and fineness. Jewlelry in much of the east is really currency. When gold's detractors point disparagingly to the demand for gold jewelry as the mainstay of the market -- and thereby denigrate it as money -- they show their ignorance about gold as money in the East. Thanks Gandalf -- a great post.

P.S. Don't get me started on the IMF. I was just registering my usual complaint about the press’ anti gold bias more than anything else.

Cavan Man: The significance of the euro? Up until its introduction, there was no paper competitor in the treasuries of the world for the dollar. Now there is. Though it is off to a rocky start, I do not think it will continue to be rocky. Now the dollar is the best of a bad lot. If the current inflation rates continue (based on oil), the real rate of return on the dollar will collapse and we will have a flip flop. I think the euro could be the beneficiary. At the same time, Peter Asher's recent post on the subject got my attention. There is much to what he says. I need to consider his post. And Peter, by the way....

Peter....We are a ways from a the sixth...........As you can see the Fifth is beginning to wreak the havoc I had anticipated. Number five could be a major problem for the paper money crowd. The Gulf has effectively devalued the dollar. We just don't know it yet.

Tomcat...Y2K is the wild card in the deck -- and those playing this poker game had better not forget its presence. Please keep us informed on the most important aspects of the bug's growth and infection of our economic system, as you are quintessentially qualified to separate the wheat from the chaff to our collective benefits. So, good sir, what is the latest on this issue? I know you're holding out on us.

FOA...Do we know how much of the gold carry trade has gone into U.S. Treasuries? I don't think there is a figure available but I wonder if you have heard anything. Do you think that the British sale might be a call on their gold reserve resulting from a counter-party having gone belly-up? (sorry for the crude reference) And if so, do you believe other central banks could be similarly burdened? What I mean is they have to bail out the counter party to save their own banking system. Please answer at your leisure as you know you have much to deal with, but I think you see I do not ask this casually.

Thank you for your on-going presence here, FOA. I am sure that you see how much the Table Round appreciates your regular visits.

Turbo...I wanted to say that we have had many reports similar to the one you reported here. I think that the employees at the banks don't have a clue what they are supposed to do with respect to Know Your Customer. Though the idea has supposedly been beaten down in Congress, it seems to be still in effect. I don't understand this. It is strange. We have reports of strange questions for people buying cashier's checks and trying to withdraw cash. Those encountering problems along these lines need know that this is their money that they are asking for. Don't be afraid to raise a fuss. The assumption that we are all drug dealers laundering money is ludicrous.

We had a gun show in Denver today and it had double to triple the attendance over last year. Though the press would like to classify all these people as criminals...once again this is ludicrous.

Buena Fe...I think you are on to something looking at the bond chart from 1979 on. That's when the hard money rally ended and the paper money rally began. OK all you engineers, let's pull out those charts and run the the EW numbers and Fibonaccis and see where we are at with this? Does it look like the long term gold chart from 1968 to let's say 1981? Just wondering. ??? Try running it in constant dollars, as well as nominal. Let's see what we come up with. A silver eagle for the best technical presentation comparing the two by Friday of next week.

To all: Thank you for your kind comments. They are sustaining. But it is you who make this FORUM what it is.
And we are among the top gathering places on the Internet. I cannot believe the number of requests we have gotten for posting privileges just in the past week.

Cavan ManUSAGOLD#72256/5/99; 19:13:30

MK- Could you expand on your comments regarding Arab Oil devaluing the dollar? It sounds like you believe their efforts to get the price up are directed specifically at the dollar. When prices for any good or service rise the "money" buys less so it (money) is devalued right? If AB raise their wholsale price for BUD then they devalue the dollar also. Commodity prices are entirely subject to supply and demand yes/no? Less production equals a higher price. I have commented on that same scenario in the forest products (paper) industry. Please explain. Thanks.
Richard, OregonSome Personal Thoughts! Reply#72266/5/99; 20:13:57

THX-1138 (6/5/99; 15:25:32MDT - Msg ID:7209)
Some personal thoughts - Thanks for sharing some of those personal thoughts. They were good words, I see as you do. Back to basics, God, maker of the original money, and Gold, created by the Master himself. Nice to hear of another believer, in Gold and in God.

BeowulfWho has the correct figures on CB sales?#72276/5/99; 22:19:20

After reading that report from the World Gold Council (WGC) posted earlier something started to bother me. Look at the above article from the London Financial Times (LFT). The total sales of Ms. Fukuda quotes for official sales for the last 10 years is 312 tonnes, but the article from the LFT states 6,700 tonnes of "Official" gold being sold, a difference of 6,388 tonnes. Who's right? Was 6,388 tonnes of gold sold or loaned out that the World Gold Council didn't know about?

I'm sorry I didn't post this later but it just dawned on me where I last saw these numbers.


Beowulfcorrection#72286/5/99; 22:34:30

Correction: My previous post should read "The Financial Times", instead of The London Financial Times.
Peter AsherMortgages#72296/5/99; 23:22:51

Earlier today I referred to paying off one's mortgage as a protection against economic turbulence. Aristotle's reply is quite valid and very astute. However, one should at least pay out into the future a bit in any event. While inflation can be a plus for debt holders, severe deflation can be a disaster.

Some people will not have much equity at stake, but those who have a high percentage of equity in their home not only have something substantial to loose, they are a more tempting foreclosure target.

Our own situation is more unique, as we regard our property as irreplaceable and wish to have it free and clear in any event.

As Janis Joplin sang in 'Bobby McGee',-- "Freedom's just another word for nothing left to loose."

Buena FeRamblings#72306/6/99; 0:35:57

Have you ever bought something (like a car or a house), or created something (like a great dinner party or a piece of art) that stood out far above in comparison to what your friends owned/created, that you feared turning your peers into instant enemies due to their possible reaction of envy/jealousy? So instead of being proud of it and showing it off, you kinda talked it down and scaped every bit of humility together that you could muster so as to ease their initial reation to your accomplishment, hoping that maybe after a little time went by they would appreciate it as much as you do!

Well I don't know if I communicated this thought very well, and maybe someone else has or will say it better, but I believe that this senario describes how Europe feels and has been acting about their little creation called the Euro!

They have been very humble, almost contrite, although a might bit aloof about the whole thing IMHO. And yet if ANOTHER/FOA are correct in their assertions, this little thing called the Euro is really a financial neutron bomb to the dollar paper crowd.

Time will tell all.
Keep Well

JuliaAnswers to my questions#72316/6/99; 0:40:00

Goldsun, Thanks again for your earlier post. Julia

TO North of 49, USAGOLD, Cavan Man, The Scot, Gandalf, Aristotle, FOA and Peter.......

What a great bunch of guys you are. I've been away and when I dropped in to visit my favorite "Knight Spot" tonight, ..well......... I was overwhelmed to find so much has been written to me. I have made copies of your responses to my multitude of questions and will read them all tomorrow since it is quite late (or early) here now. It will take every bit of my mental ability to grasp it all I'm sure. You are kind to take the time to share your thoughts with me. I consider every one of them a gift and a piece of the puzzle of "how our economic world works" in these times. I'm truly blessed to have found this place.

TO Peter - Can't wait to hear that "long winded" response you mentioned. Thank you for considering my questions.

TO FOA - this all started with my questions for you, my friend.. I apologize. I feel I may have been insensitive to how busy you are right now. I look forward to your input when you have the time. Thank you.

All - Looking forward to reading all of the good stuff inbetween the posts to me.

Good night. And thank you again.

something elseA (perhaps naïve) thought of mine regarding the EU and the euro#72326/6/99; 1:01:47

A comment was made in this forum a day or two back regarding the creation of a unified military for the EU. The establishment of the euro in combination with the newly created unified EU military seems to suggest that Europe has finally decided that it has had enough of Americas reign of dominance. The establishment of a single currency that is independent of the machinations of the US monetary system, coupled with a strong military that is independent of (and perhaps somewhat disdainful of?) NATO, suggests the near fulfillment of a goal of progressive disassociation from Americas heretofore-unchallenged international control. The recent OPEC alliance for price control is another cog in the wheel (or should I say 'nail in the coffin’?).

Why is it, I have the feeling that there will be no safety net (bailout) there for us when we fall?

SteveHHow it might play out#72336/6/99; 3:37:58

From the above site:

"The tip-off that the BBM's have exhausted their potential leases of gold and silver was when LTCM had to use the FRB to bail itself out instead of just borrowing or leasing precious metals and selling the hard assets for cash to cover their emerging market and trading losses.

So what happens now? I suggest the following scenario may unfold over the next ten years...."

My take on his scenario is that it will be compressed to within one year. I say that because of Y2K and oil and short covering. In other words, the rubberband is wound tight on the balsam wood toy airplane and when the kid lets go of it, it will fly immediately. IMO.

SteveHA slight rewrite and FOA/A's comments left out (not my choice) but...#72346/6/99; 3:58:20

gold-eagle picks up (with my permission) the currency war comments.
SteveHWord is definetly getting out...#72356/6/99; 4:04:22

Corroboration and reaffirmation....
SteveHAgain, wrong interpretation...#72366/6/99; 4:09:56

From Sunday's London Times:

"...The draft summit statement stated that "the European council is not at all concerned by the current development in the euro's foreign exchange rate".

However, the passage was excised after some heads of government expressed fears that trying to send out a message that there was no need to panic would induce just that...."

I interpret that quote differently. They have a trump card and haven't played it yet.

SteveHVenerasso on gold...#72376/6/99; 4:50:45

Must read on Bank of England Gold sales especially part ii about 1/3 the way down where the A/FOA agenda is confirmed vis a vis:

'The deliberate deception again leads one to the conclusion there is a hidden agenda behind the sale [BOE] ... implicitly suggesting an ideological battle between an Anglo-American camp, and the Continental Europeans on the other...."

This is further cooberation to the intepretation of A/FOA. It further points out that A/FOA fall defintely belong to the Continental European camp. Based on the period of postings here and on Kitco and the consitency in their theme from the beginning with the exception that they started out discussion gold for oil then later Euro for oil tells us that the hidden trump card is oil.

Further to the discussion, the quality of the information over such an extended period of time demonstrates the insider knowledge of these two posters inside the European camp. The increased urgency in there message may be intrepreted to mean that the outcome is nearing its end game or just a more openly fought conflict on the gold and currency board where the final victory will be world reserve currency status.


Recent statements by the Euro banking authorities in support of the Euro and the removal of the statements playing down the Euro's recent fall is clear evidence that the TIMES article falls into the dollar camp and their interpretation of the Euro bank official is not even close to the remarks true meaning.

JCTexTurbohawg: a day or so ago, you related an instance where your bank#72386/6/99; 7:48:54

teller refused to cash your check from your brokerage house. Most likely, your check was for more than was in your bank account, in which case, he/she would require you to wait for the funds to clear [usually, 4 days]. This is often a good practice, but can also be viewed as simply a way for the bank to "work the float" on you. However, it is possible that the Federal bank examiners are "encouraging" the bank to follow certain practices whatever they are called. Belive me, they do know how to "encourage."
JCTexGold-Carry question regarding loan agreement and collateral#72396/6/99; 8:00:19

It occurs to me that NO banker is going to lend money without collateral and a collateral agreement attached to loan agreement. Is that true in the Gold-Carry setup??? If it is, then it would seem to me that it is the mining company stockholders that are going to [ultimately] pay the price when the gold-carry unravels. It would also be true that the Central Bank would be the ultimate winner because they would end up virtually [if not actually] owning the mine because the chain of collateral would be from the mine to the boullion bank to the large commercial bank to the Central bank. True or False??
JuliaNorth of 49#72406/6/99; 9:51:44

See....I knew you held a piece of the proverbial puzzle. Your black tie is showing!! You can't hide it anymore!!

I remember when you were out there in the Yukon??was it? talking to us from an oil rig?? or something like that?? You were in a storm where you said the wind was blowing huge pieces of ice around like they were marshmallows?? I was really glad when you got back in one piece from wherever that was.

My point is that you have life experiences different from mine and no matter what the topic we discuss together, you will always have your story to tell from those experiences that will add a fresh perspective to what I have experienced.

Your wise comments (msg 7151) about cycles in nature as well as the markets helped soothe the fretting I felt nagging at me. Thank you. I want to relax and learn to ride the waves that occur from the cycles of the markets. But just like learning to bodysurf the ocean waves, I expect to have my face rubbed in the sand and gulps of salt water strangle me a few times before I get it right and can ride the long ones in to the beach. After patiently waiting, trying to maneuver myself to be in just the right spot at just the right time, missing a big one or getting dunked by one because I wasn't prepared for it to happen so fast, finally I catch "a big one." Ahhhh! It is a wonderful feeling of success after riding it to shore, lying in the sand, basking in the "golden " sun, letting the little "after-waves" wash over me pulling sand from under my body as the tide continues its natural ebb and flow cycle....... It was worth everything I went through to get there.

My experience has taught me that I can make alot of headway if I search out the "how to's" from other people. My father taught me the joy of bodysurfing and even now in my more mature years, I still feel the wonderful rush of joy when I catch a big wave and ride it in to the beach! He is no longer with me in this life, but what I learned from him, which was alot more than bodysurfing the waves ofcourse, will affect my life always. Same goes here.

Thank you so much for being here. In the words of someone I call a mentor, "We will watch this new gold market together, yes?"

USAGOLDJCTex...#72416/6/99; 9:57:28

The central banks rely on the bullion banks as counterparties for repayment (i.e., Morgan Stanley, Goldman Sachs, Credit Suisse, Scotia Mocatta etc.) via a standard contract agreement. If a mine goes belly up, the bullion banks are forced to get the gold to the central bank creditors. The bullion banks are then usually forced into bankruptcy proceedings to be repaid -- the recent Royal Oak situation being a good example. Scotia Mocatta -- a gold lender to Royal Oak -- is in line with everybody else to be repaid at (10¢) on the dollar. They will not get gold from Royal Oak, yet gold, not paper currency, is what they owe. They will have to make good to the central bank somehow. This fact of gold lending life explains much in the way of the behavior of the bullion banks in the options markets, and explains the vested interest bullion banks have in keeping the price down. In times like these with the price down, this is not a problem. SM goes into the market finds the gold and returns it. In an environment where the price is rising, or lease rates are rising, and there is a scarcity of metal, they have a problem. Now picture that on a mass scale (not an isolated incident) and you begin to see what some have talked about around here in terms of a major gold spike at some point along the way. You also begin to see what I am talking about when I ask FOA/Another if the Bank of England is acting as gold provider of last resort to the London Bullion Marketing Association. It could be that it is either that or face acute problems in the British banking sector due to one or more bullion banks being pushed to the ropes.

When these loans go to bankruptcy court obviously there is more than one creditor knocking on the door. The courts are called upon to sort things out. The most likely scenario would be the sale of the mine(s) and whatever other assets are laying around and parcelling out the proceeds. In the meantime because mines are high maintenance engineering projects, you have rapid depreciation of the assets in real terms (not one of those neat little regression schedules), i.e. the mine fills with water, equipment goes bad, miners leave for better prospects, environmental problems intensify, lenders become very cautious, etc. I'm sure you get the picture. Sure, through a series of financial machinations the central bank has call on that mine, but what do they have in reality. (Sort of like those empty towers in Malaysia -- the tallest, empty buildings in the world!) Thus, they rely on the bullion banks. This is the hidden time bomb in the gold market of which only those of us with an acute interest in the yellow metal are even faintly aware.

USAGOLDJCTex...#72426/6/99; 10:09:03

P.S. You're right that the mine company stockholders pay the ultimate price and should scream the loudest. The Royal Oak stockholder now holds essentially a worthless piece of paper, while the creditors pick over the corpse. It's a no win situation, and to think that the mining companies brought this danger to the doorstep themselves by going along with this gold lending business from the very start. Perhaps they didn't understand they were committing industrial suicide -- I don't know. Like much else in today's world, many in the gold mining industry settled for short term profits at the expense of long term health -- seemingly clever until that darkened figure appears at your (not somebody else's) door.

I am happy to see people like Chris Thompson at Anglo and John Willson at Placer fighting the good fight publicly in behalf of the industry. They are to be credited for making a courageous stand.

ETUSAGOLD#72436/6/99; 13:23:54

Hey Mike - enjoyed reading the last couple of week's posts. I see you are considering another horseman. I would nominate the above article for your consideration. It would appear some have decided to take it upon themselves to run the world. The above article and another by Bob Novak are indeed chilling in their possible ramifications for all. Novak's can be found at;

It seems to me these people know we are on the verge of financial collapse and they have no intention of giving up any political power. Terrorism appears to be the tool of choice to keep the great unwashed in line until some new financial system can be implemented.

I saw you asked Tomcat about the current situation concerning y2k and I hope you don't mind me throwing in my 2 cents. The situation in a word could be described as desperate. Very few entities could be described as ready to carry on business as usual. I'm starting to believe my own pessimistic conclusion concerning the economic ramifications of y2k has indeed been way too optimistic. This is shaping up as a total economic collapse of historic proportions. I've failed to find any evidence to the contrary. Virtually every industry in the world is far, far behind in remediation efforts and this does not bode well for any currency except gold. I think it is time for all to put aside any further concerns and concentrate on getting through the next few years in a much smaller economic environment. Although I agree with the Another/FOA theory of a new payment system coming on line I believe they have underestimated the economic impact from y2k and the resulting decline in oil demand. I wouldn't be surprised to see overall demand for oil fall by half or more. We will see. At any rate, time is now very short concerning making preparations for y2k and with the advent of new state-sponsored terrorism disguised as some sort of good, we have the makings of a completely unheard of economic and political environment in which to wind our way through.


JuliaUSAGOLD#72446/6/99; 14:00:34

MK.....Thank you for making it possible to come here and find intelligent, gentle people to talk to about gold and the ways of the world. You are a good leader and I appreciate the time you took to answer my questions.

I remember the 70's. I don't remember being especially inconvenienced though. I look back and can say I was oblivious to what was happening in world economics. In the US there were lines for gas but I had food, shelter, water and a job. This devauation will be different when it happens wouldn't it? Nixon had taken us off the gold standard then, right? And people began to see gold as an antiquated relic and were willing to stay in US$ and ride it out? Whereas now, gold is chomping at the bit, trying to loosen its shackles which the IMF/US$ bunch is struggling to keep on it. This time there is so much more debt attached to our currency and so little gold to pay for it with years ahead already sold. (I'm treading on thin ice here trying to piece together things that I have read or think to be true. So, please feel free to correct me.)

As I understand the chess game that FOA has mentioned in his post, the two players are, the IMF/US$ bunch versus BIS/Euro bunch. And like chess there are many different pieces. To name a few I understand, euro, inflation, y2k, manipulation, oil, but I know there are others that I don't fully understand like gold carrying trade, COMEX, derivatives. Isn't all this more sinister than a group of businessmen and eastern rulers deciding that they were not getting enough for their oil in the 70's. Doesn't that signal a worse situation than the 70's??

Do you think that if one is prepared for y2k, one is then prepared for the mother of all $ devaluations?

Got to be at a meeting soon so I must go.
Thanks, Julia

JuliaET#72456/6/99; 14:04:29

Would you be willing to share what you have done personally to prepare for y2k?


CoBra(too)inevitability of discontinuities...#72466/6/99; 14:52:20

It has been a real summer weekend, fronts of thunder storms kept at bay and leisurely contemplating the generosity of sharing the indepth thoughts of so many at this forum.

The war at Kosova, hopefully, becoming history, though not quite yet with the doubletalk of Milosevic, who now does not seem to have anything more to lose; Nor the misery of the refugees nor the bombed out Serbian people nor Europe's clear mandate to rebuild this region in their own (back-) yard. It is slowly dawning upon ones mind that the post WWII world order is rapidly being dumped to history.
The new era, and I don't mean the new paradigm of IT and hi tech approach, the forever lasting economic growth apostles stand for and are preaching to the "brave new world" (not only day traders), may be emerging as a total discontinuation from what we became to accept as the parameters of the way we chose to live and manage our affairs in life. The inevitability of discontinuities will affect all and it is no wonder that governments will do everything possible to resist change-since their election to power was in the past.
As I've reread some chapters of "The Great Reckoning", by James D. Davisdson and William Rees-Mogg (published 1991), where they already deplored the destruction of gold convertibility as the major mistake to the discipline of creating stable expectations, we now face, IMHO, major upheavals in view of the almost total dollarization of the global economy, with its apparent fallouts in major regions of global society. The introduction of the euro currency being the catalyst to rapid change and conceptual reorientation and, as I feel, the SE Asian block will counter with their own currency block, the world will discontinue todays appearance(s) by tomorrow.
At the twilight of the second millenium B.C., I feel, we did not even heed and digest the bloody lessons of the 20th. century, in spite of gigantic technological advances, which can never replace the yardstick of balanced and fair advancement of mutual respect and understanding.

The Rise and Fall of the proverbial "Roman Empire", revisited may be a future topic of a Steven Spielberg blockbuster (get tickets).

Sorry for taking up (too) much space in philosophising.

ETJulia#72476/6/99; 14:58:42

Hey Julia - I began preparing three years ago but basically I went at it with the idea that my income could be reduced to zero due to a financial collapse. I moved out of the suburbs about a year and a half ago and bought ten acres and a house out in the sticks in Kansas. My wife and I have always gardened and canned a lot of food so all we've done is increase the size and scope of our garden. We've come up with a couple of backup water sources aside from the county water system. We've installed wood stoves and basically purchased enough supplies to last us for a couple of years if we have no money or supplies get very expensive. Like Aristotle, I've always kept most of my savings in metals rather than paper. I guess our biggest fear has been having to go to the government for assistance so we have taken it upon ourselves to eliminate this possibility and be in a position to help our neighbors. Most of the people around here are pretty self-sufficient and are y2k aware so I guess we've achieved a certain piece of mind.

I do believe bank runs and martial law are inevitable. I don't believe in the end that government will be of much assistance to most. They haven't prepared any more than any other entity. I'm also convinced that certain areas will experience some civil unrest and the government will have it's hands full maintaining order. You'll likely have to provide your own security in some areas.

On the plus side I do believe that those that are prepared will fare well in a new, more free political and economic environment. I'd say you will need to get by on your own for the first 6 months or so but an economy will emerge, if not an economy similar to today's. I think what has happened in Russia over the last few years is likely what will happen here in the US. The world didn't end, it just changed.

If you have any specific questions, I'll be happy to tell you what we've done. Contact Mike for my email address.


CoBra(too)Si tacuisses-philosophos mansisses #72486/6/99; 15:01:51

I should have heeded this ancient advice - and not only in my typos.
Thanks anyway for your patience....

Peter AsherEconomic Cannibalism#72496/6/99; 16:03:32

This writing started out as a response to Julia, but as more and more of us responded to her, the subject evolved into more than just devaluation.

Before I get into the essence of this laborious treatise, I would like to add to some commentary regarding our Forum itself. It was said yesterday that "TRUTH, kindness and civility" were the key ingredients that make the Forum special. I would like to add a fourth, and in doing so, answer a question that was raised several days ago. A poster wanted to know why one of our most highly praised contributors (in their words, "of such great intellect") would take the time to write on this Forum? That fourth ingredient is COMRADERY ! That certainly is my most cherished aspect of this group.

So, on to the subject at hand:
'Economic Cannibalism' is a term I have created to describe the aberrations that cause the distress in our economic system. The excesses of consumer credit (and the squandering of credit) cannibalize our wealth by using up much of the affluence of our productivity in satisfying our immediate pleasures at the expense of greater productive ability to enhance our lives in the long run. Credit is, of course, what currency is all about.

When concerned about devaluation, one has to focus on just what currency is. I think I've pointed out before that Gold is asset money and currency is credit money. Simply put, currency is someone's 'title' to goods or services produced by the country issuing it. Whether the holder has earned it, borrowed it from someone who did, had it advanced by a CB printing press, or traded for it with a currency from somewhere else, it is just that, a title. The government may or may not secure that title with 'asset' money. Operationally, the citizens of the issuing nation deliver things in exchange for it. Then they have 'title' to someone else's production.

It's how much production that title will buy that is the essence of inflation, deflation, Dollar up, Euro down, etc. So what determines how much that currency will buy? A piece of my post #6941-5/31 (The one that "got Michael's attention"(Thank you, Michael) would apply to all currencies, not just the Euro and Dollar

<<Creditors evaluate a debtor both by the amount of debt he carries and by his ability to service it. If a company is seen to have a strong earnings potential, they can borrow a greater percentage of their future earnings. Likewise, I perceive that the strength of a nation's currency is based on the interrelationship of balance of trade, balance of currency debt, productive capability and desirability of product. My belief and philosophy is that the nuts and bolts are senior to the trading games (certainly in the long run). Any earnings (read: "gleanings") from currency trading must piggy-back on the production chain of mine or cut, fabricate and assemble, market and ship, real world of economics.>>

Both consumer credit and squandered credit, weaken the strength of any economic structure by spending created product on that which will not produce in return. While consumer credit is the lubricant that oils the wheels of the economy, it is also the via for the abuse that cripples the work flows of society. To elaborate: Even in our new "just in time" inventory economy, borrowed capital is needed to pay for the production and delivery at each stage of the source-to-consumer chain, and if future earnings are 'spent' in the present for things that make one's life more productive, then the economic machinery operates more powerfully. But, when credit functions to purchase a more affluent life style than the value of what one is producing, a tune is being danced to for which the piper has not yet been paid.

Squandered credit is, of course, even more disabling to the power of an economy. Michael described one form of this in a nutshell when he wrote, regarding Gandalf's description of the Thai collapse, "Why are they building skyscrapers to the sky in a country where most of the fields are still plowed by oxen?" Empty buildings planned to receive external currency as rent, but earning none, while internally, nothing is spent to enhance the most basic primitive production facilities. All materiel advance is tapped out with no economic exchange created to replace it. In the final tally, it's not tapping out credit that triggers collapse, it's the absence of the ability to repay it.

The malignant forms of credit squandering are more familiar. Social programs that encourage non- production (much worse in the EU than in the USA, and part of the Euro's weakness), armament, and munitions. (How much of that product has gone up in smoke in Yugoslavia?) And now somebody has to foot the bill for a 100 billion dollar reconstruction project.)

As we approach this Millennium milestone, I think of some of the visions that were around when I was a kid. We thought we would ring in the year 2000 with cities around the globe filled with affluent people living in an architectural paradise, while colonizing the solar system and maybe a star or two. Instead we're worrying about who's currency ox gets gored, who will eat a full meal, and whose kids will survive the bombs and bullets. Forgive me for this turning into a sermon, but sometimes one thing just leads to another.

So Julia, you did ask after all about devaluation and what to do about the threat.
In responding to Steve and Tom yesterday, I outlined the method of escaping the effects of a devalued currency. Don't store any value in it! If you don't have a property or other resource you feel comfortable with, then Gold is the sure thing to hold value. While the purchasing power of Gold may, in times like this, decline, it is certain that when it is the monetary medium of choice or necessity, Gold will buy dear!


Currency can be devalued and defaulted. In the long run, it is not a question of whether an ounce of gold will buy $100, $300 or $800 worth of things at any particular time. The fact that it will ALWAYS buy something, is what makes Gold eternal.

The Scotjulia: Simple y2k plan#72506/6/99; 16:31:34

Julia, you had asked soneone else for a Y2K preperation plan. Let me give you one example. It may be work, or it may fail completely. I think the "Betting Odds" are with me. Step one. Borrow as much money as you can. Buy 1oz bullion coins that are .9999 fine gold for about $290.00 each. Sell half of the Gold in late December. You will propbaly get $1,000.00 each for them at that time. Pay off the loan in Febuary or March of year 2000. The money will have devalued about 50% which means you only had to actually pay back half the money you borrowed. Give the rest of the cash to the poor and keep the balance of the Gold. You will have done a very good deed and God will have rewarded you for it. Sincerely, The Scot
The ScotjULIA#72516/6/99; 17:08:34

The ScotJulia#72526/6/99; 17:10:26

P.S. When you go to repay the loan, if the bank is gone, be sure to give all of the cash to the poor. The Scot
searchingGold Leasing#72536/6/99; 17:32:34

I have really enjoyed everyone's comments on Gold Leasing and Y2K. Not having a very strong background in how leasing works I need help. Who borrows against the gold and who sells it to buy US Bonds which go up as gold goes down and sells it for a profit? Can someone take me from the first step to the last so that someone like myself understands how the entire transaction works. Thank you for your patience in advance. I have learned so much from all of you
TomcatPeter Asher #72546/6/99; 18:09:36

Your post on econmic cannibalism is both enlightening and inspirational. Inspirational in reminding us that we are on the right track with gold (the asset currency).

It was also inspirational in that while reading it I kept thinking of the increasing productivity of the third world and how some of the profits of that productivity are stolen via their national debt burden. Hopefully, with a future gold backed financial system, these productive countries will actually see the fruits of their labor.

I am both tired and guilty of eating the fruit of their labor.

Gandalf the WhiteTechnical Review & Comments Requested#72556/6/99; 18:15:12

Found this at that other board, and wish someone to advise if this is a feasible worry, or another "red herring". Thanks <;-)
> Date: Sun Jun 06 1999 15:20
> Silverbear (Y2K-2 ) ID#119246:
> Copyright © 1999 Silverbear/Kitco Inc. All rights reserved
> I've been a COBOL programmer for about 15 years. The shop were I work is diligently working on the Y2K problem but no long ago we realized that making the code Y2K compliant is just part of a much larger problem.
> Like us, many other large corporations are now discovering or soon will discover that much if not all or their corporate data is saved on records which contain an "effective date" and a "termination date" which is what tells the computers processing their data, when a given record is "effective".
> The problem is, when these databases were originally built years ago, the programmers knew the systems couldn't handle dates after 12-31-1999. So what did they do? They put 12-31-1999 or 12-31-99 in the termination date when the databases were built. To make matters worse, users have been keying termination dates of '12-31-99' on records for years because entering 12-31-00 would end up as 12-31-1900. Worse yet, many programs were coded so that if the termination date was left blank when a record was added, the program would plug it with '12-31-99' or '12-31-1999'.
>No problem, just change all the termination dates to say
'01-01-3000'? You know how long it takes to do this on trillons of records? And what about all the records that have been added this last year with a valid termination date of '12-31-1999'? How do you tell these records from the ones where the termination date should be open ended?
> What happens if you make a record with a termination date of '12-31-1999' open ended and as a result it overlaps the dates on another record that is not supposed to become effective until say '01-01-2000' but has already been loaded for next years new pricing, etc? Do this and you end up with more than one record with the same key in effect at the same time. I won't even go into what programs do when they encounter this but needless to say it's not good.
> To sum it up, we can make every program on the planet Y2K compliant and come '12-31-1999' much of the worlds data is going to cease to be "effective". Fixing this data is going to be just as big or a bigger problem than fixing the code. It will require looking at every single record on every database in the world. It will require massive downtime for systems while the databases are off line during the massive updates that will be required.
> Worse yet, it will require many more programmers as are currently working on the code to fix this the data in time. Where will they come from? There's not enough time to train more now. You know how many companies test for Y2K compliance? They set the system date on a spare machine greater than '12-31-1999' and then run the production data from yesterday against their current production databases. Guess what? The date of service, invoice date, etc. on yesterdays data works fine with the bad data because the date of service, invoice date, etc is still less than
> In otherwords, most Y2K testing as it's been done to date has not even identified this problem!
> Do not look for this on 60 minutes anytime soon. Any shops that are now aware of this will be keeping very quiet until they have time to determine how bad the problem is.
>You have been warned.

SteveHChris#72566/6/99; 18:41:05

Chris in response to your comments on gold-eagle, which I won't post here without your permission (this time), I would like to remind all that 'my theory in 6820 is merely a summary of what I believe A/FOA are posting. I state that I believe I understand what they are proposing and put it in a way that I could understand it. Nothing is ever black and white but that was as close to b&w as I could come.

I am not sure what NWO means although I have an idea. Occams Razor theory states the simplest explanation is the best:

Some countries not happy with US$ debt.
Devise a new currency not so encumbered.
Convince 11 countries to use it.
Back it with gold.

Seems straight forward to me. What you propose is another step or two in the above, making it more complicated. Whatever the motives are it seems that the A/FOA posting explain much of what goes on. I am open to any explanation as long as it explains the meat of the matter. So far I give A/FOA an A for effort and consistency.

I published what I did so others could also understand. How each of us reacts to it is to each our own. My regret in all of what they posted, if true, is that as an American I wish that the US had, does, and will manage its finances better. One thing is for sure the A/FOA message can't be ignored, especially if true. What do you think?

for the poster looking for leasing info, it is tough to grasp because I believe there are two kinds of gold leasing. First is the European style and the other the American style. FOA alludes to these. In the European case, apparently these are done with the CB keeping the gold, in the case of the other, I believe they let the gold go. The leasing isn't truly a lease per se as the CB's really loan the gold or a certificate. The lease rate is the difference between the interest rate and the gold loan rate, leaving a lease rate, which can go negative. Ted Butler over at the gold-eagle site has a number of good posts on leasing. I tried to find the URL but was unsuccessful. Perhaps you could drop Vronsky a note and he could tell you the URL.

SteveHChris#72576/6/99; 20:22:33

Yes, time will tell all. August gold now...$266.??
FOA(No Subject)#72586/6/99; 21:01:57

Your post about the convoluted court "workout" of bankrupt mines is one for much consideration. In the event of mine assets being managed by a court trustee, I add: A massive increase in gold prices during this time would require the trustee to reopen the mine at a large profit, even during long drawn-out negotiations. Any new government taxes on such profits would require escrow for later payment "ahead of other players". Also, bullion bank claims would be
fully paid in gold (over a very, very long time) as the new economics of mining make such claims worthy to be satisfied. I do think the BBs will be fighting the government over any new taxes. Truly a mess. Please see below!

Please note that Mr. Faber suspects some CBs to buy back gold at a much higher price. I would add that they will use Euros to do this as that currency will be the "transactional" settlement medium for gold world wide. A price of $1,000 and higher will mark the end of the dollar as is presently known.

Also, his thoughts of "excessive profit taxes" are becoming a more common view as trends reverse. Again, I add that the "journey" from $280 gold to $1,000 gold "will" bring his massive increase in mine stock prices. The problem for most investors will be in timing the selling point. I
think, few will be able to sell their positions in the two or three days time required for gold to make this trip. Does anyone that thinks the shift from this era of gold price management into the era of paper gold "loss management" will bring a gentle price rise over months and years. If one
trades their position on that "premise", I think they will be holding these mine investments for much longer than anticipated. Any new tax legislation will be, no doubt, "grand fathered"! We shall see.

I apologize for not having the link to this story. Perhaps someone can provide it?

Dr Doom: gold, Murdoch, Soros

By Tony Boyd

Dr Marc Faber is the Hong Kong-based contrarian also known as Dr Doom. He writes a monthly newsletter called the Gloom, Boom and Doom report for 900 institutions and wealthy private individuals including some of Australia's better known multi-millionaires. Here he talks to Tony Boyd about his latest views.

On the gold price
Let's assume for one reason or another the psychology in the world changes in favour of an inflationary psychology
or for whatever reason people say they want to own gold.

With the world's population of 6 billion people, if each
person buys one gram of gold each worth about $13 that
would be about 6,000 tons of gold when there is an annual supply of 2,500 tons. The swing factor will be dramatic.

On gold and central banks I am prepared to bet with anyone in Australia that the central banks, which today are selling gold at less than $US300 an ounce, will go back and buy it at more than$US1,000 a ounce in a few years' time.

I am convinced it's going to be that way because I think
eventually the power will be taken away from the central
banks and the world will go back to some kind of financial system that has automatic built-in stabilisers.

The gold standard had some faults but the whole industrial revolution and the tremendous growth in the
world that occurred between 1800 and 1930 occurred under a gold standard, so you cannot dismiss the fact that the gold standard had some merits.

On a soaring gold price I think the gold price will go up so dramatically that governments will introduce excessive profit taxes on producers or, worse, expropriate them altogether.

If the gold price moves from say $US280 at the present
time to $US400, gold shares will go up by up to 200 per
cent, easily. So you have more leverage in gold shares, but if the gold price goes to more than $US1,000 then I would worry about excess profit taxes.

beestingJohn Q. Public doesn't have a clue about the real value of Gold!#72596/6/99; 21:02:00

First'searching #7253,
Check out FOA post #7186 6/5/99 which I consider a masterpeice of logic,and USAGOLD's earlier post today,than attack archives-your Gold education has begun!

Second,@ Peter Archer and Tomcat;
Great post Peter,on economic cannibalism,I would like to add something I picked up on, if I may.
About 2 years ago I was selling an un-named(legal) product made in the U.S.A. when a customer remarked loudly that,I can get that(un-named legal product) cheaper at the discount store. So, I researched it.Seems the product he was referring to was made and produced in mainland China,and exported to the U.S.Upon further research I found; For the cost of hiring one U.S. worker(beleive it or not) 1200 Chinese workers could be hired.How can workers in high cost of living countries compete with that? By the way this product has to be produced manually.One other thought,the exchange rates have a lot to do with this un-equalization,if a one world Gold currency(measured in grams of Gold.Example:one dollar = one gram of Gold) ever came about, IMHO, trade would be equalized,however a side effect would be a lower standard of living for affluent nations and a higher standard of living for emerging nations.

Now,my opinion, on the U.S. public.
Yesterday, I started an innocent conversation with a local Jeweler/Goldsmith I've known for about 3 years.I asked him what he thought about the recent drop in the world spot price of Gold.
His reply,(remember he's a Goldsmith);Oh,words to the affect of,"Gold is a barbarous relic." I proceeded to explain a small portion of what I have learned on this forum to him. After a few minutes,his mouth dropped open, and the really's,and you don't say's'started coming,and wouldn't let up. After about 1/2 hour we both had to go to work.
I than realized the total population of the U.S.(except for the Gold disscussion groups) has been thoroughly and completly duped by the mainstream anti-Gold campaign.FWIW(for what it's worth).........beesting

beestingQuestion to FOA or any of our European friends.#72606/6/99; 21:19:50

Question: DO the workers in the 11 Euro Countries make the same wages performing the same duties?
Example:A grape picker in Italy,a grape picker in France,a grape picker in Germany?
Thank you in advance........beesting

FOA(No Subject)#72616/6/99; 21:38:40

Beasting, thank you for thinking through my post #7188 (7186 was steveH). I have always found that the "masterful" mind belongs to the one that can understand what the writer has written! In this day of language "slang", offered in every country, reading has become the most difficult task.

SteveH, also thank you for your grade of "A". I believe everyone that follows USAGOLD will pass this class in good economic health (myself included). We live our lives to produce something of value to others. This is indeed the basis of world trade. However, "fair" trading requires
understanding of each other as much as mastering the knowledge of "the transaction". This forum exposes the true nature of that progress as we gain the knowledge understanding people as well as ourselves.

Also, I add this story to your evolution. "Have you ever talked to someone that said the sun would rise in the east and then the world would end? When asked if they could explain? The reply was, I don't know the mechanics of rising suns. I'll leave that to the experts. But truly, this
world will end after the light, because it came to me in a dream. Dreams, I asked? I could never figure those either, but they are true, came the reply.

Thanks FOA

Gandalf the WhitePoor Spot the Dog !!#72626/6/99; 21:40:03

As soon as Gold opened in Hong Kong, someone droped a load on Spot the Dog !! --- Dropped it over one US$ to 264.40 and it wiggled around plus or minus a bit for two hours before it popped back up and is now 264.70

JadeA lower price of Gold in USD's hints at USD Devaluation?????#72636/6/99; 21:46:05

It's most interesting that from the introduction of the Euro at the first of the year, the price of Gold in USD and the Euro/USD exchange rate have slid about 10% each to this date. This slide has almost occurred in tandem as it relates to the USD. Now from the Euro point of view, this really cannot hurt to much as exports to the US Zone have become 10% more competitive, while the Euro Zone industrial base enjoys interest rates half of what their counterparts must live with here in the US. The competitive advantage enjoyed by Euro Zone business is rather heavy handed at this moment. Now if you start to look around the Globe, the same picture is emerging. Now what occurs here is a massive export of US Dollars to these Economies. Or in other words, an increase in US Dollar reserves due to the increasing pace of exports to the US Zone from points around the Globe. And of course, the only threat to these USD Reserve holdings would be a potentital devaluation of the Dollar. So back to the price of Gold in USD's. Is not the "low price of Gold" in USD's, not a reflection of the potentital risk of devaluation to your USD reserves. After a devaluation, the price of Gold in relation to the devalued currency always buys more currency units. So prior to that devaluation [and now with a slight hint of potentital devaluation in the air] would not that currency [USD] demand a low Gold price as risk/based insurance needed to hold massive amounts of the USD currency as reserves. Now of course to take advantage of this insurance, you would have to convert a portion of your USD currency reserves to Gold. And of course the world must never know, so this conversion would take place in the world Central Banks secret dealing amongst each other. So maybe the lower we see Gold go in USD's, the greater the worlds USD reserve holders believe the risk of USD devaluation is close at hand. We see no Euro Zone/Pacific Rim CB's selling gold. Only the US/IMF group appear to be sellers.
FOAComment.#72646/6/99; 21:46:38

beesting (6/6/99; 21:19:50MDT - Msg ID:7260)

My answer is no. But, I suspect there is more to your question. Please, continue?

I will make time to return and reply in seven hours or so. Other duties call. thank you beesting

Gandalf the WhiteQuestion to FOA#72656/6/99; 21:51:59

Where in your opinion will Aragorn III's "Thunder in the night" occur ? --- Now we watch the Spot gold start out the week "Downunder" and move to HK before reaching London and ending in the US. -- Do you await the BoE, bailout of the Brittish BB's before the blastoff in the price of Au ? -- OR will the cause be from another tightning of the OPEC taps before the Y2K effect sets in ? -- Let us hear your pronostications on the timing of this event. Thanks for everything you have pointed the Goldhearts toward, and we shall all meet you sometime at the future world gold trading site in the East.

TomcatTen reasons to by gold#72666/6/99; 22:51:05

Michael, on Saturday, I believe, you asked that I make a contrubution the forum on Y2k. I believe you said that I was holding out and perhaps that is true. Y2k has been discussed on the internet so much and for so long that I have felt that many are not interested. Despite this, at your request, I will give it shot.

First, let me list a few disclaimers. What I am about to say about Y2k is my opinion based on a one year study. Note I said opinion. That is the biggest problem with y2k. It is hard to draw conclusions based on an event that we have never experienced before. I am suspect of anyone who claims with certainty that Y2k is going to be a blip in the road or a catastrophe.

Second. My background: I was for many years a systems engineering consultant that was brought into large aeospace projects (rocket launches, etc.) that were behind schedule (just like many y2k projects). I witnessed dozens of engineers telling me how things were ok because their project was ok. We always started out with dozens of subsystems that had checked out ok on an individual basis. We never knew the real status of a rocket payload until wie assembled all the subsytems and tried to get the sysetem working. It was after the initial test of the complete system that reality set in.

An unproven system is not, I repeat not, the sum of its parts. The approach to Y2k is fix the subsystems, put them all together, don't test everything working together, and hope that on Jan 1, 2000, the many systems connected together will work.

The systems work it did was years ago. For the past twenty years I have been a business consultant. Currently I am involved in ten partnerships.

Ok, why am I of the opinion that y2k is going to have serious consequence. Here are 10 reasons:

1. First, believe it or not, y2k as a problem is not even defined correctly. As most of you know, y2k progress is reported by stating how well each company is doing on their internal remediation. Solving internal remdediation is only one part of the problem. The big problem is getting the software and hardware of many sub-systems talking together properly after their internal remediation has been completed. 1999 should have been the year for system/system testing. Instead, large intrasystem tests of many computers communicating are only being done by the US based banks and a few other industries.

2. If at least 20% of all firms experience substantial delays due to their internal y2k problems then delays are enough to create a dominoe effect which will create more that a 20% decline in productivity. This model is based on a personal math model that I sketched out. Internationally, 20% of the firms are going to experience delays. In the US this may or may not occur.

3. A year ago, I did not believe the government progress reports. I still don't. Some reports say that fortune 500 companies are 90% done. If industry is so far along on y2k projects there would tens of thousands of y2k software types looking for jobs; instead, their is a shortage of qualified y2k programmers.

4. US industry depends on US and foriegn suppliers; some of whom won't make it. GM, depends on close to 100,000 suppliers. Close to 5000 of those suppliers, I am told, are very critical. My opinion is that GM and many firms like GM have a massive supplier problem.

5. European utilities are in trouble. Japan started late and many are still in denial. Foriegn oil companies are behind. Italy and Venesuala are still trying to get a y2k budget approved. This list goes on....

6. My opinion is that their will be a small number of bank runs both internationally and in the US. These will be televised. The media, unless prevented by the government, will amplify these events. The media has under-reported on y2k. The bank runs will be publicized by the media and there will be a flight to gold, silver and, US treasury notes.

7. One of the big problems is that cash based businesses will withold some of their cash income instead of depositing that cash. My opinion is that this is a larger problem than Joe Sixpack withdrawing $1000 from his savings.

8. I believe that in December a small percentage of firms will shut down early. They will take a holiday. This will be publicized by the media and there will be a flight to gold, silver and US treasury notes.

9. During the tense days of December I believe their will be a small percentage of countries experiencing politcial turmoil. This will be publicized by the media and there will be a flight to gold, silver and US treasury notes.

10. Finally, in December, I believe that about 10% of the public are going to "get it" and this will be publicized by the media and there will be a flight to gold, silver, and US treasury notes.

Will all this be enough burst the bubble? Can't say, since the Plunge Protectioin Team may have more up their sleeves. I can say with assurance, however, the PPT are going to be very busy in December. And if the bubble does burst then it will be due to y2k or some other reason than the current Plunge Protected Mania.

One last point. If gold and silver go sky high in December then I believe there will be a POG crash in January because, oddly enough, I beleive January will be somewhat mild, y2k wise. The effects of Y2k won't start being felt heavily until March or April when inventory/supplier problems start to show up.

So, Michael and friends, there you have it. As you can see, a lot of how I feel is do to my opinion on how the public and media play on eachother. Lets hope I am wrong! But in the meantime: gold! Get you some!

TomcatTen reasons to by gold#72676/6/99; 22:54:40

Michael, on Saturday, I believe, you asked that I make a contrubution the forum on Y2k. I believe you said that I was holding out and perhaps that is true. Y2k has been discussed on the internet so much and for so long that I have felt that many are not interested. Despite this, at your request, I will give it shot.

First, let me list a few disclaimers. What I am about to say about Y2k is my opinion based on a one year study. Note I said opinion. That is the biggest problem with y2k. It is hard to draw conclusions based on an event that we have never experienced before. I am suspect of anyone who claims with certainty that Y2k is going to be a blip in the road or a catastrophe.

Second. My background: I was for many years a systems engineering consultant that was brought into large aeospace pro œ.0.2 Acc Acc

Gandalf the WhiteThanks, Tomcat for the Y2K opinions!#72686/6/99; 23:01:21

NOW, please comment on my posting #7255.

beestingFollow up to msg#7260 to FOA.#72696/6/99; 23:51:29

FOA,you are so kind to share your financial knowledge with us(North Americans-all of us our different we're from all over the world) we can only repay you with insights into our thoughts,I hope that is enough.
In the U.S. there is currently demand for certain skilled occupations;Doctors,nurses top athletes. These occupations can very easily legally work in the U.S.(with proper immigration papers) demanding and receiving higher wages than they may get in their respective home countries.Hence, a higher standard of living for themselves and their families.
Now, my point is,wages may not vary from country to country(as they do now)with the use of a single currency(Euro),in the long term,when workers are payed in Euro's only.FOA do you agree with this?
Let me put this thought in perspective for our North American friends.
Example: A Canadian,or Mexican loses considerable purchasing power when exchanging their Peso's or Dollars for U.S.currency when traveling to the U.S.
In my humble opinion if North America and other Latin American Countries ever went to the all U.S. dollar system (similar to what the Euro Countries are doing) after a long time would an equilibrium be established?
Again In My Humble Opinion, only with some type of dollar that includes Gold as it's base support.......Got Gold.......beesting

VoyagerJulia#72706/7/99; 0:40:11

I have been caching up on the last several days of forum reading, and one thing that has come up several times is the reference to God and of one's view of their belief in a "personal God". As one who is not a Christian, I thought to offer another perspective.

The Buddha taught that "Religion is not to prepare one for death; it is to prepare one to live".
Often we say that he or she died of cancer, heart attack, stroke or other illness. However, the real cause of death is birth itself. Illness and old age is only a condition. From these words of wisdom, we must realize that what is important is how to live one's life between birth and death. Each of us is born as a human being in this world. The question to us is, are we living, as a human being should? It is an ancient question.

Throughout our live, we accumulate possession's, get married, have children. They are all impermanent. As we grow older or upon death, our possession's pass on to our children, our home is sold, and our children eventually die. Everything is evolving and impermanent. Changing hands you might say. Our human existence, in many ways, is like riding a commuter train, we are constantly watching others come and go, until it is our turn to disembark.

We all take turns in living and leaving this life. What makes life meaningful is not that we all "get on and off" life's train, but whether or not we realize the deep significance of the journey before we reach our exit.

Gold has brought the people of this forum together. This commonality all of us share is also a metaphor for all of us searching how to live this life as a sentient being, how to protect our family, our wealth, to live with strength and joy, and to appreciate our existence. Gold is seems to me is more permanent than anything else in our existence.

Socrates statement of "Know Thy Self" is to know why one "knows" gold.

SteveHAugust gold now...#72716/7/99; 1:25:42


Some heavy bids of 20 contracts right now.

The above link is the Butler link I was looking for earlier. In that you will find a few articles on gold leasing.

FOA, I am still trying to figure out your story of the rising sun. Best I can figure is the person listening was more concerned about the mechanics of what would cause what was said then the actual event itself. Yep, that must be the message.

Regarding the rise in the price of gold, if it goes from 267 to $1,000 in three days, and then moves higher still, these excess taxes you mention make sense, but I have yet to see our government move that quickly. I see your point of knowing when to sell shares during such a rise, it is always best to remove profits in any rally. Perhaps this will be the rally of all rallys then excess profit taxes will obviously dent it greatly, if I see your point here. Of course, just the mere mention of that could dent it too.

Here is Bill Murphy's speach given at a recent mining convention.

Here is GATA Chairman Bill Murphy's speech to the
Northeast Investment in Mining Conference last Thursday
at the Marriot Marquis hotel in New York.

Secretary, Gold Anti-Trust Action Committee Inc.

* * *

Much is being said about the Gold Anti-Trust Action
Committee, but unfortunately most if it has been sound-
byte analysis. So today I thought I would try and set
the record straight by explaining the background of
GATA, what we are trying to accomplish, and what it can
mean to all of you.

I have a background of some 25 years in the commodity
markets, but until the past few years had little
interest in gold. In my formative years I was fortunate
to be around and learn from some great economic minds.
One of the great commodity traders of all time is Dan
Ritchie, the chancellor of Denver University. I saw him
turn down both the Harvard chancellorship and D.K.
Ludvig's request to run his empire. Ludvig was probably
the wealthiest man in the world at the time.

There was Ray Dalio, who heads up the esteemed
Bridgewater Associates, who manage $15 billion
including some foreign government portfolios. And then
there is Frank Veneroso, whom most of you know from his
work in the gold market. But Frank is well-known to me
for his consultative expertise in advising the IFC, the
World Bank, and many governments in macro-economic
matters. The finance minister of Mexico called for "the
priest" (Frank) when they had serious financial

I learned a great deal about the commodity markets from
all of them, and having been a limit-position futures
trader myself at times, I think I have come to learn
something how about how markets trade.

So it was with great excitement and with the help of
Donald & Co.'s, John Brimelow that I decided to launch
my own financial website,,
around Labor Day last year. I was fortunate to attract
some outstanding financial commentators. Charles
Peabody, oft quoted by Barron's Editor Alan Abelson, is
one of the top banking analysts in the United States.
David Tice of the Prudent Bear Fund is constantly on
CNBC. Paris' Eric Barande is well-known among the
central bankers of France. And Dr. Neville Bennett
teaches Japanese history in Canterbury, New Zealand,
while writing for the National Business Review.

But more to the point of why we are all here today.
This past September the gold market looked to me like
it was poised for one of the big moves of all time.
Demand was strong and it appeared that the supply
plagues of the past couple of years were subsiding. Any
pre-EMU selling by European Central Banks would be over
by the end of they year. The Asian crisis and scrap
supply shock, which included a 300-tonne mobilization
from Korea alone, was behind us, and it appeared that
producer forward selling would be greatly slowed
because of the low gold price. That left only leased
gold as a major supply concern.

At the time I thought this might be a plus. Long-Term
Capital Management was blowing up. Over that summer we
had heard that they were short some 300 tonnes of
borrowed gold as part of a "carry trade." The gold
price started to rally toward $300 and we licked our
chops as we prepared for LTCM to buy back its

Then the word spread that LTCM was let out of this
position in an "off-market transaction" -- a rigged
trade so that the price of gold would not shoot up.

The fall went on and every time it looked as if the
price of gold would take off, the same crowd of bullion
banks would knock it down. We then heard that this same
cartel was offering unheard-of relaxed credit terms to
producers if they would just sell forward. It was
reported to us that a well-known gold analyst was
requested by his higher-ups to tone down his
bullishness on gold. At the same time we twice received
feedback from very reliable sources that U.S.
officialdom asked Asian officialdom to refrain from any
aggressive gold purchases.

After all this the Counterparty Risk Management Group,
led by Goldman Sachs and J.P. Morgan, was formed to
manage risks in the financial sector along with the
likes of Credit Suisse. How long do you think it would
stand if Chrysler, GM, and Ford got together to do the
same thing in the automobile industry?

There was much more and I wrote a piece called
"Scandale Gold." Le Metropole member Chris Powell, the
managing editor of the Journal Inquirer in Connecticut,
said it looked to him like we might have violations of
the Sherman and Clayton anti-trust acts here, so we
should stop complaining and do something about it. That
is how GATA came into being.

We put out a press release and then I was on CNBC.
Coincidentally, Merrill Davidoff, a senior partner of
Berger & Montague of Philadelphia, one of the most
prestigious law firms in the U.S., had just signed up
at my website at the suggestion of John Devlin of Bema
Gold, so we contacted him.

Chris, GATA's hard-working Vice Chairman John Meyer,
and I flew down to Philadelphia a few days later. What
a dream! Merrill, who is here today, was very
knowledgeable about the gold market, and our other
attorney would be Jerome Marcus, just off of the front
page of The New York Times as it was discovered that he
was the behind-the-scenes brains of the Paula Jones
case. Further, Berger and Montague had been plaintiff's
counsel in such powerhouse cases as the Michael
Milken/Drexel Burnham case, the Exxon/Valdez case, the
Orange County case, and many others.

The clarion call went out for support from people all
over the world just like yourselves. Many of your
fellow gold shareholders and a few mining companies
quietly gave us the funds to retain this dream law

Then we needed a plan to seize the day.

Perhaps I have had too much idle time these past years
and watched too many movies, but after seeing the TV
serial about the great Zulu warrior of South Africa,
Shaka, I decided to fashion our battle plan after his.
To vanquish his foes, Shaka formed a diamond formation
that became an enveloping horn. We would do the same.

At the front of the diamond was our retention of Berger
& Montague. This firm is so highly regarded that our
adversaries and supporters alike would know that we are
for real. Those who might have information about
manipulation in the gold market might more easily come
forth and speak confidentially with our lawyers.
Merrill and Jerome would be available at times to fly
anywhere in the world to speak with those who have

Merrill and Jerome told us: "This is a just case about
price-fixing. It goes on all the time."

Thus we would confront the colluders head-on with legal

Right about then I was flooded with emails and amazed
at how many people said that threats would now be
coming our way. They questioned us whether this might
be too intimidating -- confronting Wall Street's
giants, the most powerful financial entities in the
world. The only way I could answer the intimidation
question was that everything seemed relative.

About 30 years ago I was playing wide receiver for the
Boston Patriots of the old American Football League in
a game against the Kansas City Chiefs. Over the middle
I went on a pass pattern when out of nowhere Hall-of-
Famer Willie Lanier punched me in the face. Down I
went. A bit dazed, I staggered back to my huddle. As I
reached the line of scrimmage, I looked up and saw 6-
10, 280-pound Buck Buchanan and 6-9, 300-pound Ernie
Ladd glaring at me. I thought that if these two both
hit me at the same time, I am a goner.

Now THAT'S intimidation! That was big way back then.

While proceeding with our investigation, we would call
for the left flank to flare out and start to encircle
those who have no regard for the free market. The left
flank would be a public-relations campaign that
targeted Congress. We would alert Congress to the size
of the gold "spec" borrowings and the gold loans. We
believe them to be 3,000 to 10,000 tonnes. Since mine
production in 1998 was only 2,529 tonnes, we believe
the gold loans have become too big to pay back in a
short time. They have now become a "systemic risk"
problem, and if they are not reduced soon, they could
cause another savings-and-loan type of financial

I went to Washington and met with U.S. Rep. Jim Saxton,
chairman of the Joint Economic Committee, his staff
director, and their senior macro-economic adviser. I
also met with the senior counsel of the House Banking
and Financial Services Committee and the staff director
of the Capital Market Subcommittee, which I found out
is investigating Long-Term Capital Management for anti-
trust violations.

I urged them all to look into our contentions in the
most vigorous manner. I suggested that they quiz
Federal Reserve Chairman Alan Greenspan the next time
he testified before committee.

Whether it was a result of GATA's effort or not, the
following has occurred:

1. Saxton issued a strong statement against the IMF
gold sales the day after my visit. A well-known bullion
dealer analyst said that "GATA mugged Saxton" into
making that statement.

2. Greenspan WAS quizzed in his next banking committee
appearance about the very issues we raised. Some of his
comments are controversial, but he did say, "Gold
represents the ultimate form of payment in the world."

That is now on record and I feel reasonably confident
that we would not have that statement if it were not in
good part because of GATA's efforts. I would be also
remiss if I did not laud Larry Parks of the Foundation
for Monetary Advancement, who has been very effective
in this area.

The understanding by many market followers that the
gold market is being manipulated is spreading rapidly

My namesake and technical analyst guru, John Murphy,
came out on CNBC and said he would not analyze the gold
market because it is manipulated.

And just last Friday I received this note from South

"Dear Bill:

"Just thought I'd let you know that I'm noticing almost
daily in the South African press the odd mention of a
possible conspiracy in the gold market. Today, in a
widely read financial daily, the Business Report, we
have a nice 20-odd paragraph column on GATA, yourself
being quoted at length. It comes across quite well.

"The columnist says all we need to find now is the
smoking gun. Well, the way these things are being
discussed publicly lately, who knows? It might be soon.



Meanwhile and very curiously, the mainstream U.S. press
has refused to present our side of the gold story.
Ditto with the London press; the Financial Times of
London actually told a prominent gold analyst that we
were "dangerous" -- but to whom?

Yet, all in all, I would say the left flank has begun
to unnerve our foes. Outstanding progress is being been

We have now unleashed the right flank and progress is
being made there too. The plan was to go to the gold
companies via the press and letters to their CEOs and
ask them to speak up for their industry, to take some
action, and to get behind us.

Now we realize the producers have a big dilemma. He's
called "Hannibal Lechter."

For the bullion bankers are eating the producer's
lunch. They are flooding the market place with gold
supply via 1 percent gold loans known as the "gold-
carry trade." They flood the media with bearish
propaganda which tends to feed on itself and scare the
producers half to death, pleading with them to sell
forward even at these very low gold prices.

The producers have been "silenced like lambs."

Why? Because Hannibal is their credit lifeline, their
banker. The gold producer privately loathes what is
going on, but fearing to alienate Hannibal, does little
or nothing about it. The result of that silence has
produced a slaughter.

Meanwhile "Hannibal Lechter" makes fat fees and a
fortune by investing his virtually interest-free gold
loans in other investment vehicles. How would you like
it if your papa came to you today and said, "Son, go
borrow what you want, practically no risk, practically
no interest, and invest it." How well do you think you
could do? If you had some bad debts that had to be
repaid, would that sort of proposal help you get back
on your feet?

"But Dad," you might say, "such a deal. How can that

"Oh, don't worry, Son. We'll make sure the gold price
does not go up for some time. You won't have to worry
about paying back the gold loan with a higher gold
price. Only some poor, gold-producing countries, gold
producers, gold miners, and gold shareholders will
suffer, and they don't matter."

Alan Greenspan's twice-made comment, on July 24 before
the House Banking Committee and July 30 before the
Senate Agricultural Committee -- "Central banks stand
ready to lease gold in increasing quantities should the
price rise" -- set the recent stage for this big-money
game and for the manipulation of the gold price.

The gold market manipulators have taken no chances of
losing control of this rigged market and money-making
bonanza. Their line of defense points -- first right
above $300 -- have ratcheted down to $296 and then
$290. But this scheme could blow up in their faces at
any time. The natural supply-demand deficit, which
Frank Veneroso thinks could be 1,500-2,000 tonnes this
year, is making it harder and harder to keep the price
down. For example, the natural supply/demand deficit is
four to five times the intended Bank of England sale.

According to Haruko Fakuda of the World Gold Council,
the British decision to sell gold was a "political
one." What does that really mean and why was it done?
Could it be that the manipulators were running out of
supply to hold the gold price down? Does the fact that
Goldman Sachs' international economist, Gavyn Davies,
just happens to be Tony Blair's economist, have
anything to do with this political decision?

That is too much to deal with here. Suffice to say we
have been very heartened by the recent comments coming
from leaders of the producing community.

Chris Thompson, chairman of Gold Fields, led off with a
comment about the dealers trying to talk the market
down by spreading unfounded rumors. That was followed
by John Wilson, president of Placer Dome, who spoke of
"malign forces" acting together to hold down the price
of gold.

We are asking all the gold companies to get behind our
big-tent campaign in some way. In addition to
conducting an investigation of the gold price
manipulation, we are lobbying Congress to vote against
the IMF gold sales. You might like to know that Tom
DeLay, the House power broker, is circulating a letter
right now about his grave concerns in this matter. He
joins congressional heavyweights, Jim Saxton, Tom
Daschel, and Dick Armey, who are opposed to the IMF
gold sales.

We also are pressing on with the banking committees,
feeding them information about the size of the gold
loans, and we are encouraging them to find out what is
going on here for themselves -- before a crisis

To do all this we need the support of the industry. The
World Gold Council is doing a fine job in promoting
gold demand around the world. But there are things we
can accomplish that are just too sensitive for the gold
council to touch.

We are asking the senior gold producers for some decent
financial support on a confidential basis, and we want
every gold company, no matter how small, to purchase
one of the fine-art limited-edition GATA prints. If
they cannot afford the $500, we are asking them to be
responsible for finding just one shareholder who can
afford it.

In this work of art, Absolut Vodka artist Alain Despert
has brilliantly captured the spirit of GATA. The people
in his painting are all of us. By taking our own
concerted action we can make a difference.

The diamond formation has just begun to turn into the
"enveloping horn." We believe that without this onerous
supply of borrowed gold it would take an equilibrium
gold price of $450 to $500 to clear the market. What
would that do to the share price of your favorite gold

With your help GATA will surge forward. It is only a
matter of time before a John Dean comes walking in the
door or someone sends us a stained dress. The
enveloping horn will close in on the "Hannibal
Lechters." They will have to cover their shorts and
retreat out of the back end of our horn. The price of
gold will rise dramatically and then all of us here
will be the ones with the happy grin.


SteveHTimes and Euro#72726/7/99; 1:40:40

From the Times

June 7 1999 EUROPE

Germans turn against euro


GERMAN faith in the euro is crumbling, according to an opinion poll published yesterday. It is bad news for Gerhard Schröder, the Chancellor, as he tries to mobilise voters for the European elections, which are being held in Germany on Sunday. According to Dimap Polling Institute, 59 per cent of Germans are now convinced that the euro will remain a weak currency. In January only 28 per cent were so pessimistic. The euro was sold to the Germans by Helmut Kohl, the former Chancellor, on the basis that the new currency would be as strong and stable as the mark. The Germans were sceptical about this - for a year two thirds of the nation opposed the euro - but the mood seemed to be changing. There was no choice but to accept the euro since no referendum was on offer.

But the fall of the euro against the dollar has shocked many Germans who feel they were cheated by the politicians. The Dimap figures demonstrate that 75 per cent believe the weak euro is limiting economic growth in Germany.

The most entrenched scepticism was recorded in eastern Germany, where people who exchanged their communist currency for hard marks only nine years ago are suspicious of European economic and monetary union. Those aged between 45 and 59 were also strongly sceptical: 75 per cent said that the euro was a weak currency.

Blair tries to bury the currency issue


Euro sweets prove success TONY BLAIR yesterday urged voters not to turn Thursday's European elections into a referendum on the single currency, amid Labour fears that the euro could prove a vote-loser for the party.

Mr Blair said the health of the euro should not influence how people vote. He said voters would have a chance to give their verdict on monetary union when the Government called a referendum on the issue, and instead asked the electorate to judge the Government this week on the "constructive" role he had forged for Britain in Europe.

However, the Conservatives are poised to push the single currency to the heart of their final drive in an effort to ensure that it dominates the last three days of campaigning.

The Tories' last election broadcast, to be shown tonight, will focus on Labour's support for the euro and tomorrow Mr Hague will unveil an election poster which states: "The pound is only safe with the Conservatives."

Mr Hague will also use two campaign rallies, in the West Midlands tomorrow and in London on Wednesday, to make a final pitch to voters who normally back Labour or the Liberal Democrats but who have reservations about the future of sterling.

Labour will seek to inject some life into its campaign today when John Prescott takes to the "battle bus" that he used during the 1997 general election. With the turnout predicted to be the lowest ever at around 25 per cent, Labour will also use Mo Mowlam, the Northern Ireland Secretary and one of the most popular ministers with the public, to front today's press conference.

Following its failure to sign up Alex Ferguson, the Manchester United manager, for the Euro campaign, Labour will feature Lisa Potts, the former teacher who was awarded the George Medal for her bravery in a machete attack, in the party's last election broadcast tomorrow.

UsulGarden of the Book of Gold#72736/7/99; 1:42:30

"I have to admit that my favourite garden was The Garden
Of The Book Of Gold by His Highness Shaikh Zayed bin
Sultan Al-Nahyan. One couldn't fail to be moved by the
sense of tranquillity and reverence which emanated from
this temple-like garden with the centrepiece of the gold
engraved marble structure. It wasn't a coincidence that the
water feature leading our eyes to the book of gold look
resembled the aisle leading up to an altar in any church we
may know.

Strong links to Muslim and Christian faiths was carefully
combined to a wonderful effect. The 12 beautiful and
proud palm trees mirrored the 12 apostles. The reverent
tone was set by Phoenix dactylifera with citrus and
Ptychosperma providing the secondary planting. Native
desert plants were also planted. As the official press
release stated, "The garden demonstrates an air of
tranquillity and calm. Water creates the feeling of coolness
and arbours face the reflecting pool allowing for repose
and quiet contemplation". If there has even been a truly
accurate description of anything, then this was it.

As with Arabella Lennox-Boyd's winning garden last year,
the Garden Of The Book Of Gold made one feel as if the
hustle and bustle all around was simply non-existent - the
garden demanded your attention in a kind and benevolent
way as if seemed to pulsate a profound sense of
tranquillity. The memory of this truly inspiring garden is one
which I will be privileged to treasure for many years.
Incidentally, after Chelsea '99, the Garden Of The Book Of
Gold will be reconstructed at a property of His Highness! "


SteveHBIS#72746/7/99; 1:51:38

Date: Sun Jun 06 1999 23:10
Goldteck (Long-Term Capital Management near miss demonstrates world market's vulnerability ) ID#431200:
Copyright © 1999 Goldteck/Kitco Inc. All rights reserved
By Tony Boyd, Global Markets Editor The Bank for International Settlements has shed new light on the near collapse of the highly leveraged hedge fund, Long-Term Capital Management. In doing so the central bank to the world's central banks has shown how vulnerable the world is to another financial crisis and the possibility that it could strike without warning. In its annual report released today, the BIS said LTCM was perhaps the world's single-most active user of interest rate swaps. "By August, 1998, $US750 billion ( $1,153 billion ) of LTCM's total notional derivatives exposure of more than $US1 trillion was in such swaps with about 50 counter-parties around the world," the BIS said. "This swap exposure represented more than 5 per cent of the total reported to central banks by dealers vis a vis 'other' financial institutions in the ( June 1998 ) survey. "While the current exposure of its counter-parties was fully collateralised, these had taken no protection against the potential increases in exposures resulting from changes in market values. "Only when LTCM's dire situation became known in September did counter-parties start to seek additional capital. "The fund's efforts to raise cash by selling its most liquid securities were felt in markets around the world, transmitting the shock wave from low-rated ( non-liquid ) securities to benchmark instruments. "Thus even if the Russian default was the trigger, the turmoil of last autumn stemmed primarily from the build-up of excessively large concentrated exposures to customers who proved to be more vulnerable to market, credit and liquidity risks than had been supposed." The BIS said that the LTCM crisis revealed the inadequacy of information supplied by leveraged investors to the extent of their market-risk exposures, the nature of their trading strategies and the validity of their risk management methodologies. "This ( the LTCM crisis ) showed that core financial markets are insulted less then ever from crises that appear at the periphery of the system." It said that existing statistical frameworks could not be readily used to arrive at a comprehensive and consistent value of global positions. Although efforts are being made to improve transparency, "the conceptual and practical challenges should not be underestimated". "Pending a resolution of their issues, there will have to be continuing reliance on current data sources, with their weaknesses factored into market participants' decision making processes," the BIS said. The annual report concluded by warning developing countries to move cautiously in their dismantling of controls on short-term inflows and to guard against capital outflows by building foreign exchange reserves. It also highlighted the way in which international banks have become drawn into lending which is not based upon relationships, a trend that is exacerbating market risks. "Market risk is more highly correlated with credit risk than previously thought, since market exposures are often built on leverage, and credit risk is also more highly correlated with liquidity risk than previously realised," the BIS said.

UsulEuro#72756/7/99; 3:28:43

Euro sinks to new depths, gold +0.80
SteveHUsul#72766/7/99; 5:02:37

Looks like it is just you and I this morning so far. August gold is now...$268.20 with very strong bids (40s).

Euro seems to be getting bashed just like gold now...hmmm?

SteveHMaybe we have focused in on the wrong oil!#72776/7/99; 5:07:05

Indian vegetable oil defaults possible - traders
BOMBAY, June 4 (Reuters) - Falling world prices might force Indian vegetable oils importers to default on recent purchases, mostly from Malaysia and some South American countries, industry sources said on Friday.

Traders said they did not rule out the possibility of some defaults having already taken place.

``Everyone is worried because defaults are looming now. It appears that a lot of April and May contracts are still not executed,'' one leading industry official told Reuters.

``Importers are rolling over their contracts. The market continues to go down and their losses are rising.''

SteveHAlways the same twist...#72786/7/99; 5:29:04

Related Quotes


delayed 20 mins - disclaimer

Monday June 7, 6:46 am Eastern Time
China gold price reforms may burnish lustre
By Nailene Chou Wiest

SHANGHAI, June 7 (Reuters) - A plan to bring China's gold prices more in line with the global market could encourage better designs to lure more customers, but in the short term demand could weaken in the face of falling prices, trade sources said.

A State Development Planning Commission official was quoted by the official Xinhua news agency on Sunday as saying that the proposed reforms would involve revamping the ways domestic wholesale and retail gold prices were set.

Albert Cheng, Asia area manager of the World Gold Council, said price reform was a positive step to enhance gold's attraction as jewllery and offer Chinese consumers more choice, though not necessarily lowering the overall cost.

Currently jewellery manufacturers had no incentives to improve designs because gold prices quoted in retail stores included material and labour, he said.

By separating the charges, the gold price reforms would encourage improvement in design and increase the appeal of gold jewellery in the face of competition from platinum and diamond, Cheng said.

The World Gold Council estimated that gold demand in mainland China rose a year-on-year five percent in the first quarter to 55 tonnes.

Xinhua put China's gold consumption, including non-jewellery use, at approximately about 192 tonnes, which makes it the fourth largest gold market in the world.

Gold jewellery store managers in Shanghai said if the reforms simply meant lower prices, they feared consumers might shy away from buying gold at least for a while.

``Generally customers buy gold when prices were rising and held back when prices were falling,'' said a manager at Shanghai's Old Temple Gold Jewellry Company.

If people expected prices to fall, they people would be even less inclined to buy now, he said.

Currently world gold prices were hovering above 20-year lows at $263.85. Chinese consumers pay an average 20-35 yuan ($2.40-4.20) higher per gram than items sold in Hong Kong, Taiwan, Thailand and Singapore.

No timetable was set for the gold price reforms.

On the supply side, China planned to produce 175 tonnes of gold this year, up from 172.8 tonnes in 1998.

An analyst at a major base metal company which produces gold as a by-product, said China's drive to increase gold output had slowed in recent years because gold was no longer a significant part in China's foreign reserves and liberalising gold distribution was to be expected.

``The obsession with gold has changed,'' he said. ``Now other central banks are clearing gold from their reserves, it's time for China to relax the control.''

China's gold reserves totalled about 400 tonnes or less than three percent of its $147 billion forex reserves.

($1 equals 8.28 yuan)

ss of nepNWO = New World Order#72796/7/99; 6:31:37

I agree ( 95% + ) with Christine.

The plot goes back at least 250 years.

And depending on the way you look at it, it may go back all the way to the civilization at Sumer.

Don't spend too much time on current events, there is not a great likelyhood that you can do anything about them.

The final Acts of the Play may be about to be performed.

Ask, if you do not already know, what controls the FED,
what controls that which controls the FED.

Follow the family trees and look at all the interfamily arrangements, and you to may discover what is controlling current world wide events.

QUESTION: If someone believes that the value of Au will increase Then why would they sell it ????????

This has puzzeled me for some time.

TomcatGandalf The White: Y2k#72806/7/99; 6:55:11

Your post yesterday on Y2k illustrates a very important point that I tried to emphasized in my Y2k post. Here are a few key lines from your (actually Silverbear's original post) post:

"Like us, many other large corporations are now discovering or soon will discover that much if not all or their corporate data is saved on records which contain an "effective date" and a "termination date" which is what tells the computers processing their data, when a given record is "effective".....

....In otherwords, most Y2K testing as it's been done to date has not even identified this problem!"

Yes, this is the point. Y2k is a new problem for engineers and programmers and they won't understand the important problems until the start testing their work. The public has be duped into believing the the y2k solution merely invloves a change of date in the code. That is an oversimplification. It would be more accurate to say that Y2k is a word that refers to a class of hundreds of different date problems, many of which are still to be discovered. Unfortunately, many of those undiscovered problems won't be found until Jan/Feb and Mar of 2000!

TomcatBeesting: The worlds reality regarding gold.#72816/7/99; 7:09:00

Your post about the Jewler being unaware of what is happening with gold is "spot on" (pun intended). We forget how powerful the media really is. It sometimes feels that the world has a mind of its own and that the media's job is to hypnotically implant messages that soon become the worlds reality.

Hopefully, the internet will free us from our bondage of the media. After getting the truth, get you more gold!

FOAReply#72826/7/99; 7:45:04

beesting (6/6/99; 23:51:29MDT - Msg ID:7269)
Follow up to msg#7260 to FOA.

In the U.S. there is currently demand for certain skilled occupations;Doctors,nurses top athletes. These occupations can very easily legally work in the U.S.(with proper immigration papers) demanding and receiving higher wages than they may get in their respective home countries.Hence, a higher standard of living for themselves and their families.
Now, my point is,wages may not vary from country to country(as they do now)with the use of a single currency(Euro),in the long term,when workers are payed in Euro's only.FOA do you agree with this?

Let me put this thought in perspective for our North American friends. Example: A Canadian,or Mexican loses considerable purchasing power when exchanging their
Peso's or Dollars for U.S.currency when traveling to the U.S. In my humble opinion if North America and other Latin American Countries ever went to the all U.S. dollar system (similar to what the Euro Countries are doing) after a long time would an equilibrium be established?

I see your point, and it is a good one. Yes, wages will tend to converge and compensate equally for each form of production and skill. However, this will only work if the money creation is under one "many government" roof, such as the Euro zone. Many point out that this is a weakness of this new currency and will pull the union apart. I disagree and state that it will become it's strength.

Prior to EMU, each country changed it's exchange intervention policy to the benefit of local workers, usually providing a loss to it's currency. At least that was the overriding game plain. Now, the currency will retain the favorable attribute of "management" with the control of "diverse government needs" and lose the baggage of "maintaining mismatched skill compensation". Yes,
some citizens will be shocked to learn that their "better pay" was the result of currency intervention, not their special standing in life. It will promote a bitter struggle over time. But, it will result in far lower inflation rates in the member countries where citizens had no strong currency.

In contrast, this dynamic is far different from your example of Mexico converting to dollar use. They will have no "usable opinion" in the money policy of the US and yet still retain a lower living standard. As an example, Kansas as an independent country? All labor and resources would be
exploited from that state for the benefit of the rest of the US.

Also, note that the dollar is well past the point of management. It's timeline has come to an end as it's debt has rendered it into a "collection only" currency. For it to regain any balanced reserve use, worldwide, it's base would have to be contracted many times over. A loss to US citizens that will never be allowed. Again, this is the very attribute that so drives the quest for Euro success. In
time I would expect many other countries to join the EMU and convert to exclusive Euro use.

The gold of Arabia has made this path, for them, a very level one, indeed. The coming free market in gold will, not only judge all currencies and nations for the entry status, but create a fair way to value their contribution to world trade. We shall see.

Please continue your consideration. FOA

Voyager (6/7/99; 0:40:11MDT - Msg ID:7270)
Sir, Excellent post!

SteveH (6/7/99; 1:25:42MDT - Msg ID:7271)
FOA, I am still trying to figure out your story of the rising sun???

Steve, perhaps best applied to NWO discussion?

"Regarding the rise in the price of gold, if it goes from 267 to $1,000 in three days, and then moves higher still, these excess taxes you mention make sense, but I have yet to see our government move that quickly."
Steve, on this issue, they will move no slower than with the speed of one who finds a gold coin upon a sidewalk!


USAGOLDToday's Gold Report: BIS Says Gold Will Not Fall Much Further#72836/7/99; 8:42:11

MARKET REPORT(6/7/99): Gold traded higher this morning after being unable to make
up its mind on a direction in overseas trade. The London Reuters gold wire this morning
reports some some selling in Japan and Australia and its usual chorus of nay-saying from
the London trading crowd. The yen is unusually strong today against the dollar but the
European currencies continue to erode against the dollar with the Kosovo peace talks'
breakdown having a debilitating effect. The British pound is in virtual free fall and has been
since the May 7, 1999 Bank of England (BOE) gold auction announcement. With the BOE
sales coming up in early August most traders believe that the price will be rangebound to
lower in advance of the sale and they may be correct. At the same time, there could be some
surprises. The history of official, planned and announced sales (going back to the U.S.
sales in the 1970s) shows that buyers tend to forestall their purchasing until the sales
actually take place. Already gold analysts are predicting that the first auction will be
over-subscribed. If the London sales turn out to be a closed doors affair wherein London
insiders are mainlined the gold and it never sees the light of day, then a sharp rally could
ensue off these lows. A turnaround could occur prior the sale if investors and market
players foresee a strong, ready market for the BOE metal (which I think is going to be the

Along these lines, Bridge News reports General Manager of the Bank for International
Settlements (BIS) Andrew Crockett saying today "that despite sales of gold reserves by
central banks, gold would continue to play a major role in the reserves of central banks.
Crockett said that since most central bankers seemed not to want to sell much more of their
gold soon, he did not expect the price of gold to fall much further. In rather surprising
show of candor, the BIS warned of an overall deflationary bias in the world economy
despite "overheating" in the United States. "In fact, a generalized resurgence of inflation
seems less likely than further disinflation or even deflation,'' the BIS said in its analysis of
the state of the world economy in a Reuters report out of Basle, Switzerland.

All in all, it could shape up to be an interesting week.

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

TownCrierNigerian ethnic clashes 'out of control' #72846/7/99; 8:53:32

Ethnic violence in the oil-rich Niger delta is reportedly raging out of control, with hundreds of people fleeing the fighting.

Stresses oil, and tests the Kosovo-precedent.

USAGOLDHere's a wild card for you...#72856/7/99; 9:10:53

China considering devaluing currency in response to euro weakness!

Hadn't considered the competitive devaluation ramifications of a weak euro.

TownCrierTroubled euro hits fresh low #72866/7/99; 9:13:21

Italy exacerbated the trend of depreciation, and the euro will remain weak if doubts continue over the ability of Germany, Italy and France to maintain budget deficits.
TownCrierBank of England urged to cut rates #72876/7/99; 9:18:03

A union leader warns Bank of England experts that thousands of jobs will be lost unless interest rates are cut this week.

No problem. Just give them all new jobs printing money. See the fundamental flaw?

TownCrierUSAGOLD Market Report#72886/7/99; 9:27:21

MK mentioned UK gold sales in August. Most of us know he meant to say the first sales were scheduled for early July. This note is for those who didn't...

"the first UK auction on July 6"

TownCrierRemember our past coverage of Kazakhstan's currency devaluation? --HEADLINE: Handing In Gold As Poverty Deepens#72896/7/99; 9:32:36

Such good souls there..."the government would draw the line if they discovered that people were being forced to take part."
TownCrierRelated story, better than the first--- Kazaks Hand Jewelry to Government#72906/7/99; 9:36:00

About 1,000 Kazaks have handed over their gold jewelry to the government in a campaign to help the economy.

What? No greenbacks?

mike55Footsteps and Y2K#72916/7/99; 11:05:24

I read IN THE FOOTSTEPS OF GIANTS this weekend, and will say as others here have said, that this book is a "must read" which provides one with an understanding of the interrelationship between gold and oil. I read this book as I do all books (and discussion forums) -- with an open mind to absorb what is presented and to make my own judgement on the merits of the subject-matter as presented. Based on what I garnered from the book, I now have a clearer understanding of the "hows and whys" of the actions of the CBs, BIS, various governments' and banks' taking turns on announcing gold "sales", and a plausible explanation of why the cost of oil in the U.S. remains out of sync with most countries in the rest of the world. I found it so interesting that I read it in one brief sitting, and will go back and re-read it again. MK and ANOTHER -- Thank You!!

On Y2K, Tomcat's #7266 yesterday was excellent. Great job! As Tomcat states in point #1, the issue is intrasystem communication (and intersystem, too) . I can't tell you how many people I've talked to in automotive, aviation, tooling, etc. that say their systems are Y2K-compliant (whatever that means, as each one has their own interpretation), but completely miss the point of how interconnected all aspects of commerce, finance, and manufacturing are today and how things can slow down in a hurry when there are system-to-system communication problems. Simple example: If the average vehicle contains approximately 3,000 unique components, how many can be built if the supplier of, let's say radiators, has a systems communication problem with the vehicle assembly plant or an internal processing problem and can't furnish radiators for some period of time? How many vehicles can be sold if even appearance items like a molding or other piece of trim is missing? Remember, JIT inventories are lean and tight -- in general, no more stocking of much more than a day or two of inventory or raw materials at the supplier and the OEM. Stockpile ahead of time? How do you predict which of the thousands of parts or hundreds of thousands of suppliers will have a problem and protect for it? All the risk assessments in the world can't predict that which has not been experienced before. The "peeling of the onion" will indeed be a revelation. I believe that the unravelling of these types of Y2K issues in many fields will be a key contributor to economic slow-down world-wide.

Protect your wealth -- trade paper for metal and hang on!

TownCrierY2K report from the heart of euroland#72926/7/99; 12:57:20

Ready or Not? Some Shrug Off Problem, Others Fear Worst

TownCrier''I've seen some people pale physically when the information hits.'' #72936/7/99; 13:01:54

Ready for anything: Some N.E. towns are gearing up for Y2K, disaster
(a fairly good article)

Tomcatmike55: Y2k and suppliers#72946/7/99; 13:30:42

Mike you have made some very good points about the supply chain and Just In Time inventories. I have found that very few people have any idea how many suppliers are needed to get a fairly simple manufacturing job done and how delays in parts can mess up the entire system. GM might need a fairly simple circuit board but the manufacturer of that board might depend on 50 or 100 suppliers. Each of those suppliers depend on several suppliers.

Just short delays at each supply level can create much longer delays at the final manufacturing plant. People don't realize the delays can grow. Supplier #1 can have a week delay which forces supplier #2 to retool and work on another product resulting in a three week delay. This delay forces supplier #3 to retool and work on another product a have a five week delay. Supplier #4, finding out the will be a five week delay, lays off some workers and shuts down part of a shop for a six weeks and then loses a week or two getting it started again. This is a non-linear chain reaction!

For my business I had to study Y2k for a year and advise my clients. In that year I found very few companies that were dealing with the supplier problem. They were spending millions on y2k and spending only $20K on surveys of thier suppliers which would only get a 50% response! Buyers would shrug their shoulder and say, "Oh well, it will all work out in the long run". They are right. A very "long run"!

One last thought. In high tech manufacturing, like in chip manufacturing, it sometimes takes months and even a year to change suppliers. And those chips a critical to millions of products. Millions.

I won't have a year to wait around but I'll have gold. Get thee some more!

TownCrierBridge NY Precious Metals Review: Aug gold flat after 5-day high#72956/7/99; 14:02:21

By Melanie Lovatt, Bridge News
New York--Jun 7--COMEX Aug gold futures settled unchanged at $267.20 per
ounce after edging to a 5-day high of $269. Traders said that gold got a boost
overnight as the dollar weakened against the yen and was aided higher in the
Europe session by supportive comments from the Bank for International
Settlements. However, after that, activity stalled and COMEX trade was extremely
quiet and dull, traders said.

General Manager of the Bank for International Settlements (BIS) Andrew
Crockett said today that despite sales of gold reserves by central banks, gold
would continue to play a major role in the reserves of central banks.
He said that since most central bankers seemed not to want to sell much more
of their gold soon, he did not expect the price of gold to fall much further.

On Friday IMF Managing Director Michel Camdessus said that any sales of
International Monetary Fund gold reserves will be conducted in a manner that
will limit negative effects on gold markets. Camdessus added that he is hopeful
a decision will be made on the sale of a portion of the fund's gold reserves to
finance debt relief before the IMF's annual meetings this fall.

Overnight in Asia, spot gold had rebounded over $265 resistance on the
dollar's slip against the yen. Gold's move down to $400 per ounce in Australian
dollar terms also prompted some buying, noted Tony Caen, senior precious metals
dealer at Credit Lyonnais Rouse.
Traders said that gold players remain nervous of a short-covering rally
given the overwhelming number of shorts that remain in the market. COMEX
commitments showed Friday that while short positions in the previous week fell
4,731 contracts, they were still at a high 88,396 contracts, compared to only
9,625 long positions.

However, with last week's drop to a fresh 20-year low still fresh in
everyone's minds, traders said that gold nevertheless remains vulnerable to a
further slide as negative sentiment continues. Traders noted that today's stock
market climb may have been responsible for sapping some of gold's earlier gains,
while in the meantime, it received little direction later in the day from the
dollar and the bond market.

Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission

TownCrierInvestors see Dow drop but remain bullish longterm#72966/7/99; 14:07:04

More than three-fourths of investors polled said it was at least ``moderately likely'' that the Dow will drop below 10,000 points in the next six months.
TownCrierU.S. Treasuries dip in lethargic session#72976/7/99; 15:10:00

Traders waiting for May CPI release and A. Greenspan's speech next week.

While the dollar needs outside data and speeches, gold itself is as good as twenty orators on its own behalf.

TownCrierCurrency tea leaves#72986/7/99; 15:16:18

IMM currencies end mixed, yen near sharp peak, euro pressured by stall in Kosovo negotiations. (Which currency is principly funding this war, anyway?)
TownCrierBig Session, Little Session: Rally Comes on Miserable Volume#72996/7/99; 15:22:20

New York Stock Exchange trading saw its second-lowest level of the year.
TownCrierBehind the Scenes: FOREIGN RELATIONS OF THE UNITED STATES 1964-1968#73006/7/99; 15:57:17

Gold related excerpt (four memos) that you may find revealing about the mechanics of important decisions during troubled times. Apologies for length...but you should read this, particularly the last one.
187. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 9, 1968, 4:45 p.m.

[/1/Source: Johnson Library, National Security File, Subject File, 1968 Balance of Payments Programs, Memos and Miscellaneous [1 of 2], Box 4. Secret. A handwritten notation next to the dateline on the source text reads: "Rec'd 4:46 p."]

The Gold Issue

Walter Heller gave me a rundown on last night's meeting of the Dillon Committee. (Sec. Fowler's Advisory Committee, consisting of: Dillon, Roosa, Heller, Kermit Gordon, David Rockefeller, Edward Bernstein, Frazer Wilde, Andre Mayer, and Bator.) They met informally in New York to go over the options on gold and the balance of payments and will report to Sec. Fowler.

Their conclusions were:

1. The tax bill is a must. They agree on a strong public statement which they will release next week after going over it with Fowler.

2. They are unanimously opposed to an increase in the price of gold as a way of dealing with the present crisis.

3. Most would prefer to keep the present gold pool arrangement going but they do not believe it will be possible to negotiate with the Europeans the arrangements necessary (specifically, the gold certificate proposal) to turn the market around and restore calm.

4. They, therefore, believe we will have to close the gold pool operation and let the market price go. They believe it is essential we do this in cooperation with our gold pool partners and preferably at their request.

5. They were somewhat fuzzy on particular plans for getting non-gold pool members to cooperate and suggest we perhaps can use the IMF for this purpose. They believe we will have to act within 30 days and must have a clear idea of where we want to go and how we plan to get there.

Comment: As you can see, these views are not very different from our own. After the meeting of the Central Bankers in Basel this week end, we will have a better idea of what the Europeans are willing to do, what the prospects are of keeping the gold market open and quiet, and what would be the most orderly way of bringing about change. Deming returns tonight, and Bill Martin on Monday.

Fowler is working to get the gold cover bill on the floor of the Senate on Tuesday. Passage of the bill should help quiet things down./4/

[/4/In his Economic Report to Congress on February 1, President Johnson proposed legislation to remove entirely the gold cover requirement as 25 percent backing for outstanding Federal Reserve currency notes. See Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968-69, Book I, pp. 136-137. The House of Representatives narrowly passed this legislation on February 21, and the Senate also approved in a close vote on March 14. President Johnson signed the legislation into law on March 18. (P.L. 90-269; 82 Stat. 50)]


188. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 12, 1968, 6:25 p.m.

[/1/Source: Johnson Library, National Security File, Subject File, Balance of Payments, Vol. V [2 of 2], Box 3. Secret; Sensitive. A typed note at the top of the source text reads: "7:00 p.m. meeting with Bill Martin." No record of this meeting has been found.]

Mr. President:

Here, as we understand it, is what Bill Martin found out and will report to you.

1. With respect to a change in the price of gold, the British and Dutch are inclined to flirt with this option. The Germans are wobbly. The Italians, Belgians and Swiss are strongly against.

2. He achieved agreement on the statement/2/ and the willingness to back the gold pool with $500 million, with another $500 million contingent. (At the rate the market in London is going, this will only last a matter of days.)

[/2/Reference may be to the communiqué issued by the Bank for International Settlements in Basel on March 10, in which the central banks contributing to the London gold pool reaffirmed "their determination to continue their support to the pool, based on the fixed price of $35 per ounce of gold." For text, see The New York Times, March 11, 1968, p. 60.]

3. The Europeans realize that we all may face soon some quite unpleasant choices; but they are not clear about what these choices are and what will be required of them if we are to hold the system together. They are prepared to close down the London gold market and let the free market price of gold float. What they have not thought through are the terms of the intimate collaboration which will be required to make that kind of system work--especially how to deal with the consequences of a two-price gold system.

4. In the light of this situation, Treasury, State, Federal Reserve, Council of Economic Advisers, and White House staff people have been driving all day, at Ed Fried's insistence, to get in shape an operational scenario of the kind that is attached. The essential object of the scenario would be to get certain minimum essential commitments from the other members of the gold pool before the closing of the gold pool was announced. On this basis we could proceed in reasonable order to a monetary conference.

5. We do not yet know Joe Fowler's or Bill Martin's personal views of this particular scenario. But we will be presenting it to them either late this evening or tomorrow morning.

6. It emerged from the Basel meeting that the U.S. tax bill and the austerity of the British budget of March 19 are absolutely critical factors. Joe Fowler and Bill Martin have been working Mills over hard on this point. They are also talking to the Republican Policy Committee this afternoon.

My own feeling is that the moment of truth is close upon us; and we shall have to convert some such scenario into action within the next few days.


189. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 14, 1968.

[/1/Source: Johnson Library, White House Central Files, Confidential File, FI 9, Monetary Systems. Secret; Sensitive.]


Your senior advisers are agreed:

(1) We can't go on as is, hoping that something will turn up.

(2) We need a meeting of the gold pool countries this weekend in Washington.

(3) We want to negotiate the following package:

--Interim rules on gold.

--Measures to keep order in the financial markets.

--Acceleration of the SDR's.

(4) With the right kind of interim package, we could maintain our gold commitment to official holders.

(5) If we can't get this package, we would have to suspend gold convertibility for official dollar holders, at least temporarily, and call for an immediate emergency conference.

(6) This probably would mean a period of chaos in world financial markets, but it may be the only way to push the others into a sensible long-run arrangement which avoids a rise in the official price of gold. We are unanimously agreed that a rise in the price of gold is the worst outcome.

The decision you must make now is whether the London gold market should be closed at once./2/

[/2/President Johnson agreed to the temporary closing of the London gold market on March 14. A statement by Secretary Fowler and Chairman Martin on the closing, March 14, affirmed the U.S. Government's commitment to continue to buy and sell gold in official transactions at $35 per ounce and indicated that they had "invited the central bank governors to consult with us on coordinated measures to ensure orderly conditions in the exchange markets and to support the present pattern of exchange rates based on the fixed price of $35 per ounce of gold."]
(a) Arguments for closing:

--Avoid losing perhaps $1 billion in gold tomorrow (we lost $372 million today).

--Such a gold loss would further shake the confidence of central banks and trigger their coming to us for gold.

--Makes it easier to arrange an emergency meeting of the gold pool countries this weekend.

--Evidence of U.S. decisiveness.

(b) Arguments against closing:

--Involves U.S. taking the lead in throwing in the towel.

--Closing the market will strengthen the hand of those who believe the official price of gold will be increased.

--May reduce the U.S. bargaining position with the Europeans.

--Gives us another fling at the Gold Certificate proposal.


190. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 14, 1968, 5:20 p.m.

[/1/Source: Johnson Library, National Security File, Subject File, Balance of Payments, Vol, V. [2 of 2], Box 3. Secret; Sensitive. A handwritten notation next to the dateline on the source text reads: "Rec'd 5:50 p."]

Mr. President:

To give you a feeling for what lies ahead, I enclose two working documents:

--a scenario for negotiation with the Central Bankers of the Gold Pool and

--a draft communiqué indicating what we would like to be able to announce on Sunday night.

On page 3 of the first document (para. 6) there is an outline of what might be in a Presidential statement on the occasion of the communiqué.

After we met with you, Joe talked to several of us about the attitude of the Hill with which he has been dealing, and the attitude among the Central Bankers.

He describes the attitude on the Hill as one of almost anarchistic willingness to pull down the temple around their ears on the grounds that our budgetary expenditures are out of control. He feels that the Europeans have the same kind of feeling and cannot understand that our Executive Branch and Congress are incapable of generating a tax-expenditure policy that would keep us in reasonable order.

He is almost in despair about being able to negotiate a package without some sign that a tax increase is at least over the horizon; and he is in despair about getting a tax increase unless there is some kind of commitment to expenditure limitation.

I know enough to know that I have no competence in figuring out how this nagging political problem can be solved. It obviously goes to the heart of our nation's capacity to carry its external commitments; maintain the world trade and monetary system; and avoid a serious domestic breakdown in our economy.

But I did want to report to you this further conversation.


Golden Truth"THE GAMBERS RUMOR" FOR JULY!!!!!!!!!!!!!#73016/7/99; 17:35:28

Please check out the poet over at kitco "GAMBLER" Mon Jun07 1999 I.D#441250. Sounds credible?? Remember "ANOTHER" started posting ther first.
Golden TruthITS GAMBLER NOT GAMBER OOPPS!#73026/7/99; 17:39:02

In my message poet should read "POST sorry keystroke error:)
The ScotBritish Gold sale?#73036/7/99; 17:43:53

To All,
A thought has been tugging at me for a while. I would very much appreciate any input you might have. If BOE origanally decided to sell off some Gold in hopes of devaluating their money, so that they might join in on the Eurro at a more favorable rate and If this announcement has lowered the price of Gold and is devaluating the Pound. And, since the people seem to be very much against the sale. Might they change their mind at the last minute and cancel the sale?
Help me, am I the only one who feels that this might have been planned all along??? The Scot

mike55Tomcat#73046/7/99; 18:29:44

Thanks for your affirmation of my previous post. Having spent the first 15 years of my career in a manufacturing position that required an understanding of the business from concept through production and responsibility for the results, I've learned a thing or two along the way. One of the things I've learned is that most everything in life is a process. Teaching, selling, buying, manufacturing, providing services all entail a process. Understand the process and you can improve it and change it as required. Planning and being flexible to change are very important as you know.

Now I wish to learn more of this gold process in the world's markets. That is why I appreciate the thoughts and input of all who frequent this site. It is clear that in the world of gold, the process of transactions, trade, and the relationship of gold to oil/banking/currency/commerce/debt/etc. are undergoing massive change (although I'm learning that some aspects have been going on for a long time). I will continue to study and learn the basics from those at this forum who have much more experience and insight than I, and then continue to learn and understand where we have come to today. The "rules" may change, but the objectives and desire to preserve wealth remain the same.

I have no intent of attempting to turn discussion on this forum to millennium events, even though I believe there's the probability of significant impact to many of our livelihoods. What I find of interest is that many intelligent people I speak with are quick to make this subject a very devisive issue. It seems that it is usually those who have much at risk in the market, in their indebtedness, in their particular line of work that are the first to argue the point and write-off any chance of a rational discussion. Most will not even acknowledge information that points to the possibility of problems. It is probably human nature of fear of the unknown.

Attempting to make some plans for the unknown is what brought me here in the first place. But I have since gained a new perspective of the world through the thoughts of those who post here. For that I am forever grateful. I wish I had more time to post and develop discussions here, but the demands of work and the time invested with family take precedence. Computer time for me should free-up as summer vacation approaches for my sons. As it stands right now, I'm getting booted from the computer as my wife and three boys need it for their work and studies.

Thanks to all for the continuing education!

beestingPart#1-Why other countries are not backing their currencies with Gold-Part#2 Sic the IRS on the bums.#73056/7/99; 18:51:57

The part about taxation hit me at the wrong time,just got back from IRS local office and was informed we owe another $300 on 1996 return,grrrrr!!

FOA msg.7282, Thank you for your insight and response to my message from yesterday.If I may I would like to expand on your statement:
Also,note that the dollar is well past the point of management. It's timeline has come to an end as its debt has rendered it into a "collection only"currency.

Part#1--I don't think the U.S. taxpayers(most of them)are aware that the worldwide banking system is being supported by them. Lets go over this again.
Governments,especially the Japanese,buy and hold interest bearing U.S. Government debt to back their respective currencies and give them(the currencies) worldwide value instead of Gold. Why,because a 5.5% interest rate of return in U.S. dollars may equal 10% or more rate of return in their own currencies when foreign exchange rates are factored in.Therefore, the U.S. taxpayer is paying interest to whoever holds the debt instrument(T-bills,Bonds,etc.) This is really IMHO,where most of the tax money goes. Here is the number for debt of 5.6 trillion dollars at 5%, interest only: $280,000,000,000 annually.
Now,who knows what these U.S. dollars are used for once they reach foreign lands?(worldwide anything?) Please think about this.

Part#2--Sic the IRS on the bums.
Sic-means bite
Bums is an American expression used to voice displeasure with a group;In this case Goldman Sachs, and other brokerage houses,and hedge funds.
These entities deal in Trillions of dollars annually and avoid U.S.Taxation by use-ing the tax laws to their advantage.They as a group,could very easily pay all the U.S. taxes due,and pay off the national debt in a very short time ,if the tax laws were changed.
Example:1-Companies that receive passive income only(income from investments)don't pay U.S. taxes,only company employees when drawing a salary from the company.
2-Most large investment firms conduct their international business offshore(Cayman Islands and many others)and are only subject to local taxing authorities.
The reason the tax laws work to their advantage,IMHO, many in the U.S. Government,Senators,Congressmen/woman have investments that they also want to protect from taxation, so they have the power to pass laws to protect their own investments.
While in Japan many years ago,I discovered a different taxation system that worked well for them:
Companies and corporations pay all the taxes,from their profits.It's enough money to run the country smoothly.
Does anyone reading this think that would be a better system for the U.S.A.?
Permission is granted to copy or forward this post to any entity.........beesting

TomcatMike55#73066/7/99; 19:29:24

Do indeed get back to this forum when you get the chance. Your background in manufacturing could be of great help in some of the discussions.

As for learning about the ins and out of gold in a way that will not take up computer time, I have a suggestion. Go to the archives of this forum. Print out a few days of posts and write down questions as you read. As you do this many questions will be answered. You can also use the hardcopy for future reference.

FOABIS?#73076/7/99; 20:00:03

Gandalf the White (6/6/99; 21:51:59MDT - Msg ID:7265)
Question to FOA
-----------Where in your opinion will Aragorn III's "Thunder in the night" occur ? --- Now we watch the Spot gold start out the week "Downunder" and move to HK before reaching London and ending in the US. -- Do you await the BoE, bailout of the Brittish BB's before the blastoff in the price of Au ? -- OR will the cause be from another tightning of the OPEC taps before the Y2K effect sets in ? -- Let us hear your pronostications on the timing of this event. Thanks for everything you have pointed the Goldhearts toward, and we shall all meet you sometime at the future world gold trading site in the East.<;-)-------------------

Hello Gandalf the White,
If we listen closely, I think Mr. Aragorn III's "Thunder in the night" may have just begun with a quiet statement. As USAGOLD and TownCrier pointed out today, the BIS is talking.

"General Manager of the Bank for International Settlements (BIS) Andrew Crockett said today that despite sales of gold reserves by central banks, gold would continue to play a major role in the reserves of central banks.
He said that since most central bankers seemed not to want to sell much more of their gold soon, he did not expect the price of gold to fall much further."

I suspect this statement is the beginning of a "threat of action". The WGC knows that (GW, read my last few posts) only two Euro CBs sold gold for "reserve alignment" prior to EMU. No public accounting was ever made as to the placement of that gold. It is no longer on the books, but did it remains in Euro friendly hands? Now consider all of the writing that analyst and officials have offered over these last few years, that Europe was unloading gold! Yet, after untold physical sales and paper shorts by dollar / IMF factions, the BIS states "gold would CONTINUE to play a MAJOR ROLE in the RESERVES of central banks"! I ask you, what Central Banks could they be referring to? Does the ESMB (Euro System Member Banks) come to mind?

Does this statement, "He said that since most central bankers seemed not to want to sell much more of their gold soon, he did not expect the price of gold to fall much further." really mean, if the dollar / IMF wants gold lower in price, they will have to sell gold (not paper)??? And, if they don't / can't sell any more real gold, the paper price will fall no further?

Further, as I have stated before, the current paper short position only has "credibility" if gold falls further in price. Otherwise, the paper is worthless as no gold can be delivered against it. Also, with the G-8 meeting about "derivatives" about to open the shorts books for viewing, this gold era is about to close! Watch Comex OI these next few weeks!

GW, the timetable will be as long as it takes for the next chess player to make their move. Not long, I think! FOA

Cavan Manss of nep#73086/7/99; 20:31:56

Good kind sir:

I ask you straight away; what controls the FED? What controls that which controls the FED? 250 years you say? Please enlighten this FORUM. You are in good company. Here, civility rules and we all value your opinions.

Cavan Man(No Subject)#73096/7/99; 20:35:37

Dumb Question

If the Euro backers desire an alternative to the Dollar as reserve currency of choice, why not announce to all the world that the Euro is backed by GOLD? Thanks.
megatrongold price#73106/7/99; 20:53:39

As an avid gold stock investor I eagerly read these opinions and hope for the best, but I fear anyone hoping to cash in on "the big one" may be very disappointed in the near 1-2 yr term. I believe we wil witness the most mendacious acts of fiscal stupidity and piracy within the next few years as the wheels come unglued. Remember;no carburetor has ever had as much nitro poured into it as this one so we're in uncharted waters. My hunch is that the economy is analagous to the expansion of a star. As it grows it eats through more layers of the underlying elements. Externally you see little diference, but underneath each element is being converted quicker than the last, ultimately until iron. When this occurs no amount of energy can be released to sustain the mass and instantaneous collapse is certain. Gold was created in just such an event, while paper is worth no more than the crap you fill your blue box with. Idiots like Greenspan, Gore,L Ron Hubbard and many others think they can "out-think" physics, but ultimately we will hit "iron" and gold will be a very nice substance to own. I havn't seen anyone filling their blue box with gold yet. Lots of paper though.
Ray PattenLease Rates#73116/7/99; 21:02:04

I think the daily precious metals lease rates are back on Kitco after a long absence...I hope for good.
Gandalf the WhiteThank you FOA for #7307#73126/7/99; 22:00:39

The Hobbits and I shall watch the chessboard closely !! -- Do not worry, they never miss one of your posts. -- Now they awaken before dawn and look to the East to see if a "new day" is to arrive. -- They are ready, no matter what happens, as each now carries 480 grains of Au at all times.

SteveHStay in bed, Aug. gold ....#73136/8/99; 4:52:23


from WMM on kitco:

Date: Mon Jun 07 1999 20:29
WMM (Deflation) ID#48217:
Copyright © 1999 WMM/Kitco Inc. All rights reserved
I posted this on the BGO board in yahoo. Thoughts here would be appreciated......

Sorry but I'm not buying the deflation arguement until convinced otherwise. Here are some of my thoughts yours' are appreciated.

1. The CPI number is garbage. Its for tourists. The fact that sizes are smaller, I'm replacing items twice as fast than 10-20 years ago because the quality sucks, and last but not least the CPI is politically managed. It tend to be overweighted on "import type" items. You will also note how "food and energy" is always downplayed unless it benefits a low CPI number.

2. I think the USA has been in a monetary disinflation/deflation mode since somtime in 1996 ( best guess )
Those countries that tied their currencies to ours ( Asia & South America ) got hosed badly. To add further insult to injury, the IMF went in and destroyed what was left of their economy. It doesn't take a genius ( or a Greenspan ) to manage an economy into low inflation when your currency is strong and the rest of the world is in the tank.

3. The world appears to be reflating and the USA is joining in expanding M3 by double digits over the last 1 year plus. Since we are reflating in parallel the USD remains strong on a relative basis. BE WARNED All those dollars sloshing around will come home to roost I believe sooner than latter.

4. The Fed's bias towards tightening is a facade. Around the same time they make that announcment they engage in a large series of coupon passes dumping more liquidity into the market.

5. With all this wonderful productivity in the "new economy" in conjunction with a strong USD and exporting nations in the dumps, one would think that the CPI should be negative. That is the consequence of real deflation. I prices should have been declinging say, 2% and instead the rise 2%, the the real inflation number is 4%. Again assuming you buy the CPI.

6. Political reality. Given a choice between a deflationary recession/depression and stagnant ecomony with inflation, the government will pick stagflation. It is less painful on the masses and they can hide from the real problem by blaming someone else. ( Like the Arabs in the 70's for the "oil crises" which was really a dollar crises )

7. Every government in thoughout history of fiat currency has always and everywhere inflated. Inflation benefits the debtor not the creditor. The largest debtor in the world is the U.S. Government. There be mild bouts of deflation along the way when it is politically expedient, but inflation is always the end game.


SteveHAug. gold...#73146/8/99; 5:01:53

in the red $265.30...

Another kitco:

Date: Mon Jun 07 1999 17:46
JP (Commercial loans at US banks rose $2.7B last week to $948.7B) ID#237237:
With the banks fully loaned out, a rise in interest rates will cause illiquidity problems which will end up in massive defaults. Banks capital
is at minimum these days. Any bank runs will cause problems which may not be solved by the US government. Dollar shortages are worsening and the third world countries have just about given up on any future payments of principle debt. The IMF is loaning money to Russia so they could pay interest on previous loans coming due this year. What a farce.

SteveHHate to keep reposting but there were some good posts yesterday!#73156/8/99; 5:18:09


Date: Mon Jun 07 1999 10:03
Gambler (Josef) ID#441250:
Copyright © 1999 Gambler/Kitco Inc. All rights reserved
I mention this date for several reasons. I believe that people who work hard for their money deserve to keep what is theirs and to someday retire in comfort. Governments are notorious for squandering and stealing the hard earned money of their citizens. Gold is the time tested commodity that best serves as money providing discipline for government leaders and preserving the purchasing power of its owners. I started accumulating gold stocks and other pms in August of 1998. Prior to this date, I was bearish on gold. The insiders, and there are many to a greater or lesser degree, knew that gold would continue in a bear market because of the gold carry trade, CB leasing, hedge fund/banking exposure, currency bailouts, Asian/Russian/S. American debacle, political agendas, etcetera. Recently, this atmosphere has been reaching a climax. I have been posting about the significance of the US Treasury yield and made some very specific posts about information I am privy to concerning the gold carry trade, hedge fund/bullion bank problems, hedge fund/currency predicament, etc. I can not mention any names but as you are reading this, an incredible war is going on amongst some very powerful and influential financial and government leaders. The particular gov leaders are viewed as complete asses by their financial peers. Some very bad blood has been developing over the past year between various foreign financial leaders ( China & Japan play a key role ) , some US and British bankers, German, French and US government political, etc. I have accesss to some of this information as stated in prior posts. Because I have been privy to information from a few in the loop, I have done very well over the years. Because I am tired of seeing governments steal their citizenry blind, I would like to see alot of investors benefit from this fantastic bull market in gold that is shortly upon us. I am very excited and have bet one of the farms on this upcoming explosive move. We are in the beginnings of a seachange in public perception of gold's place in the world. This change will be so significant that many will make millions in just a few years. Many insiders are now accumulating pm stocks because of what they know is currently in progress. Never was their a better time to be a contrarian. July 5th - July 9th will be a very revealing week. The masss will understand the new paradigm concerning paper currencies, gold and other commodities. The following Monday, July 12th will be very significant for gold and pms. I was very specific in a few posts made several months ago and of course was not taken seriously. I gave the exact date this time because it will be a very significant day for gold and its perception. Gold will finally take off because of the spreading awareness of the risk to world financial systems. Envision firefighters trying to put out fires as paper burns. ( Stocks, bonds, currencies, etc. ) Of course you can't take my word on this as you don't know me, but I will take some satisfaction in pointing out a very significant day for all to see. And I believe most will miss the launch sad to say. Probably the same ones who rode gold down into this abyss where we find ourselves now. My portfolio since mid Agust of 1998 is still up 22% after the continued basing in gold. So, although gold has continued to languish, its been an excellent time to accumulate pm stocks.

Good luck Josef and continue to accumulate gold stocks

SteveHBIS#73166/8/99; 5:30:03

Press Releases

Press release Press enquiries: +41 61 / 280 81 88
Ref. No.: 25/1999E
7 June 1999

Annual General Meeting: Address by the President of the Bank for International Settlements
The following are excerpts from the speech delivered by Urban Bäckström, Chairman of the Board of Directors and President of the Bank for International Settlements, to the Annual General Meeting held in Basel today, 7 June 1999.

At this point I should like to take a look at the global economy and consider some of the policy issues we face. There is now a much greater spirit of optimism about world economic prospects than was the case only a few months ago when we were all anxiously waiting to see what the fallout from the Brazilian crisis might be. It was not thought implausible that Brazilian inflation would get out of control, that Latin America would experience a renewed flight of capital and that the devaluation of the real would spark another round of devaluations, perhaps even extending back to Asia. With the memory of the repercussions of the Russian crisis and the near failure of Long-Term Capital Management all too fresh, the possible impact of such events on overextended global financial markets was another source of great concern.

In the event, none of these fears have materialised. The Brazilian situation itself appears to have stabilised, with the impact so far on other Latin American countries contained. Both the IMF and the OECD are now forecasting global growth of about 2¼% in 1999 and further acceleration into the new millennium. The United States is expected to see an orderly slowdown, Europe to pick up speed, South-East Asia and Latin America to recover convincingly, and output in Japan to cease to fall. Asset markets already seem to be counting on such an outcome. Equity markets have risen worldwide, rebounding to record levels in the United States and Europe. Capital inflows into Asia, including Japan, have supported sharp increases in share prices, and a number of Latin American sovereign borrowers have been able to tap international bond markets within months of the Brazilian devaluation. Credit and liquidity spreads in many markets have also fallen sharply, albeit not back to the excessively low levels seen this time last year.

However, these favourable developments should not lead us to conclude that the danger has passed. Indeed, the principal risk at this point is that the sense of urgency in the need both to manage current problems and to prevent the emergence of new ones will be lost. This would be irresponsible since there remain some evident threats to international financial and economic stability and, perhaps even more importantly, there may well be vulnerabilities that are not so evident. Recall that the scale of the Mexican crisis in 1994 was foreseen by very few. In South-East Asia the onset, duration and scope of the recession were all missed by the forecasting community. At this meeting last year, no one had anticipated the extent of the turmoil in financial markets that would be generated by the Russian devaluation and moratorium. The way in which rising credit spreads led to losses by highly leveraged investors, liquidity shortages and the virtual drying-up of some markets was generally not anticipated. Let us be honest with ourselves: the track record shows that there are many things that we do not understand and cannot predict. It would be highly imprudent simply to assume that all will be well.

If many unexpected problems have surfaced over the last few years, many expected problems have failed to materialise. Whether this means the fears were not justified in the first place, or rather that problems have continued to build under the surface, remains to be seen. Perhaps the greatest of the unrealised fears has been that the US economy would slow down sharply before spending elsewhere had recovered sufficiently to support the global economy. This has not come about, in large part because of the continued strength of consumer spending in the United States. But the coincidence of declining private saving rates and a widening current account deficit is a matter of continuing concern. If investors became less willing to hold the rapidly expanding external debt of the United States, a falling dollar might increase nascent inflationary pressures in the United States, even triggering a hard landing. Fortunately, this has not happened, though the sharp rise in the yen in the third quarter of last year and last month's CPI statistics provide illustrations of how quickly the unexpected can arise. Another fear, again related to current trade imbalances, has been that of rising protectionism. While such pressures have been kept under control to date given continued growth in most of the industrial world, the challenge of maintaining an open trading system would surely increase were unemployment to begin rising again.

Another concern has been that equity markets, particularly in the United States but also elsewhere in the industrial world, might fall back rapidly and in a disorderly manner. With personal saving rates now near zero in many of the countries with highly valued stock markets, a marked decline could well herald lower spending and growth. For some years now, many analysts have questioned whether the expected growth of profit rates implicit in equity prices has not been unrealistically high. At the same time, others have asserted that technological progress and corporate restructuring provide the foundation for a new economic environment that will support significantly higher profit growth in future. The evidence to date on the validity of this assertion is scanty. In the meantime, it is prudent not to ignore an abundance of evidence that markets are prone to overshoot on both the upside and the downside.

The expected acceleration in the growth of global demand reflects the recent easing of monetary policy in most industrial countries and many emerging market economies. This easing, including that following the autumn crisis in financial markets, has been made possible by continuing disinflationary trends arising in part from high levels of excess industrial capacity. Moreover, the loans made earlier on to finance this expansion of capacity, in Asia in particular, still weigh on the health of the international financial system and have provided a further rationale for monetary easing in many countries. The recent experience of Japan reminds us, however, that the efficacy of monetary policy may be limited by the zero nominal interest rate constraint, particularly if prices are already falling and this is expected to continue. Concerns that an associated decline in the exchange rate might serve to export deflation to others may be a further impediment to policy activism.

Nor are these the only constraints on the use of accommodative monetary policy. What also seems to have been reasonably well established by the events of recent years is that such policies can themselves contribute to turbulence in financial markets. Easy and low-cost financing over an extended period may drive up the price of financial assets, even at times when the rates of return on the underlying real assets are declining. This is what happened in Japan in the late 1980s and in South-East Asia subsequently, and may help explain the sharp rebound in equity prices in the last few quarters. Periods of monetary accommodation may also lead to a more cavalier attitude to risk-taking on the part of lenders. Such tendencies are accentuated by competitive pressures to maintain or increase rates of return on capital. However, the build-up of excessive leverage sets the stage for the type of market turbulence seen in the wake of the Russian moratorium when investor sentiment suddenly reverses.

If there are limitations to the use of monetary policy in some circumstances, then other policies might have to be relied upon more heavily. Policies of microeconomic reform remain the top priority to spur non-inflationary growth. Given that the overhang of excess capacity will hold back investment in many sectors for years, it also becomes more important to deregulate and open profit opportunities in other sectors. If such opportunities could be augmented by more favourable labour market policies, which might themselves eventually build confidence by creating jobs, the potential for a significant strengthening of medium-term economic prospects would surely be enhanced. These microeconomic reforms could, in countries where medium-term fiscal consolidation is sufficiently advanced, also be supported by the countercyclical use of fiscal policy.

Given the costs and the difficulties faced in managing the successive crises experienced over the last few years, it is not surprising that considerable attention has been paid to how future crises might be avoided. One obvious insight is that affected emerging market economies must reform their domestic financial systems. Simultaneous restructuring of the corporate and banking systems, and a clear recognition and allocation of losses, is required if profitability is to be restored and sustained. Further progress in establishing a sound legal infrastructure covering both bankruptcy procedures and effective corporate governance would also seem very high on the list of priorities.

To say that the key to avoiding future crises in emerging markets must be found in domestic reforms is not to deny the international dimension of the problem. Excessive capital inflows and outflows did exacerbate domestic problems and steps should be taken to deal with the possible recurrence of such events. To begin with, the dangers inherent in adjustable peg exchange rate systems need to be clearly recognised. There should also be less hesitancy in using market-based prudential instruments to prevent the build-up of excessive external indebtedness. And finally, countries that receive capital inflows should also prepare for the day when the movement might reverse. Countries that are vulnerable in this regard should consider carefully the adequacy of their foreign exchange reserves, particularly when measured against their short-term external debt. Since large numbers of countries cannot build up their reserves by increasing their trade surpluses simultaneously, this would seem to argue for greater use of contingent lending facilities provided by the private sector. Given such arrangements, recourse to the new IMF Contingent Credit Lines would then add public sector to private sector affirmation that the domestic policies being followed by the borrowing country are sensible and sustainable.

If domestic self-help is the best response, even to problems with an international dimension, part of the solution may still be found in measures to change the way in which international financial markets sometimes operate. While financial liberalisation and international financial integration bring unquestioned benefits, they can also be subject to episodes of excessive risk-taking. In recent years, there does seem to have been imprudent lending, and not just to emerging market economies but also to borrowers within the industrial world. In part this has been spurred by competitive forces. These seem unlikely to diminish as financial restructuring accelerates. However, the potential of public safety nets to distort incentives and breed complacency can also be discerned and these structures should be re-evaluated. It is important that all investors are held accountable for their decisions. The international community should also ensure that all investors and lenders play their part in the resolution of any future financial crisis and, to this end, should implement, inter alia, changes to international bond covenants that would facilitate debt restructuring should this become necessary.

The events of last year have also made clear that greater efforts are needed to strengthen the functioning of markets lest market processes themselves add to volatility during periods of stress. The expanded role of markets in channelling funds from surplus to deficit sectors and for managing a variety of risks is one factor making this imperative. Information asymmetries lie at the heart of market failure, and the market's way of resolving them can give rise to unpredictable outcomes. Ensuring that markets have adequate information about national economies, the strength of financial systems, aggregate positions in markets and the financial standing of counterparties is important. Equally, if not more, important is to ensure that market participants' approach to risk management reflects the full balance of costs and rewards implied in their decisions. Finally, it is also necessary to consider the micro-prudential policies that apply to individual firms in a wider setting, including the potential for unintended aggregation effects. Internal risk assessment procedures must recognise the interrelationships that exist between categories of risk before, not when, markets are under strain.

The fact that markets are becoming increasingly global means that efforts to promote financial stability must also become increasingly international. One underlying theme of the many meetings held last year at the BIS and elsewhere has been the need to involve directly the emerging market countries likely to be affected by the decisions taken to promote monetary and financial stability. This reflects a very practical consideration. Implementation will be an even bigger challenge than setting international standards in the first place, and a sense of shared ownership will materially improve the chances of such implementation. Allied with other incentives for change, including surveillance by peers, the IMF and the World Bank, progress can be made if we keep insisting that progress must be made.

Let me finish by noting my personal satisfaction that the BIS, and the various groups and committees which meet here, continued last year to make substantive contributions to the pursuit of both monetary and financial stability. These efforts will be taken further, with the assistance of additional input from the newly established Financial Stability Institute and the even newer Financial Stability Forum. Recent episodes of financial crisis and macroeconomic disturbance underline how much work still needs to be done. Yet there is considerable comfort in knowing that the global community is addressing these issues in a serious and systematic way.

JuliaVoyager#73176/8/99; 6:59:48

Many wise words.. Thank you for sharing them with me.

Voyager, I have contemplated the life and teachings of Gautama Siddhartha, the Budda, while studying ancient India in the history lessons my husband and I teach our son in homeschool. Our study of ancient India introduced us to Atlantis and Manu, and the Indian trinity of Brahma (Creator,) Vishnu (Protector,) and Shiva (Purifier,) as well as Rama and Krishna, avatars of Vishnu. Passages from the sacred texts: Vedas and Upanishads, and the epics: Mahabharata, Bhagavad Gita and Ramayana, gave us a poetic experience of the life of ancient India. We go on to Persia, Mesopotamia, Egypt and Greece before leaving ancient history this year.

I have always had great respect for all religions of the world and this history course is bringing to my little part of the world an avenue to learn about them. I have a sense of peace leading our son into this study whereas some Christians would not want their children exposed to them. And I respect my fellow believers’ beliefs about that , though I find that I have the same hesitations to discuss this historical journey with just anyone to the same degree that I hesitate to discuss my journey with gold.

We study many creation and flood stories through this history course, not just the Hebrew writings we Christians more commonly study. And as we read them carefully we came to realize that alot of each story's elements are similiar to the others. One has to come to the conclusion that something BIG happened to and in the ancient earth and those times were told in many different ways through the eyes of human beings experiencing the same events. As was necessary, ancient history, or legends as we call them today, including Hebrew history, was recorded in the only way they had then, by passing them down verbally, generation to generation. What some Christians tend to do is compartmentalize God and Creation and "the" flood for themselves ignoring the vast amount of insight that other religions have into God's true nature, the ancient birth of mankind into the world and the subsequent events that changed the world around them (our y2k???).

Jesus of Nazareth taught his desciples that the greatest commandment is to love God with all your heart and mind and soul, and to love your neighbor as yourself. The common thread between all religions, IMHO, is that it all starts with our personal willingness to look within ourselves first and become willing to be emptied of prejudices and opinions and worldly influences in order to become enlightened. Jesus put it this way, "in order to be born again".

We're not so far apart in our beliefs are we? But we don't need to believe the same religiously in order to walk side-by-side on this journey with gold. It makes for very interesting conversation when the POG is down, don't you think??!!! And like I said, I am hungry for more knowledge about other religions and the pieces of the big puzzle they hold in this world.

Peace and Gold to you. Julia

SteveHTherapy anyone?#73186/8/99; 7:56:57

Sent my partner the 6820 post when he asked how gold was going. Haven't been sending him anything because of responses like this. Anybody else getting this?

Steve you are an extreme case. I wish you could see yourself. You have no
balance. Everyone knows their will be corrections in the market. The
difference between you and I is that after the STS loss I told myself I
would buy only stocks would good sound business models. You tried to reason
your losses instead of learning from them. You became entrenched in your
view to prove yourself right and the more you became wrong the more you
tried to prove yourself right. You have been wrong so many times but you
never try to learn from it. I wish you had the same passion in computers.
Please do not take this the wrong way Steve you are a good guy but your
compulsive behavior could be clouding your judgment.

--end--! Tough words from your friend, though I'm sure he means well.#73196/8/99; 8:09:33

"You have been wrong so many times but you never try to learn from it."

Try this variation of his thought on for size:

Paper currency systems have gone south (been wrong) so many times. Have you ever tried to learn from it? ---Aristotle

TownCrierMost IMM currency futures higher in early trade, euro sharply higher after overnight low#73206/8/99; 8:23:05

euro performance should be measured against the early 1998 Ecu level of $1.08 rather than the January starting rate above $1.17
TownCrierChina Issues New commodities Rules#73216/8/99; 8:26:19

Change can be a good thing...
TownCrierUK: Drive to beat Y2K panic #73226/8/99; 8:38:57

"There's no such thing as guarantees in real life."
TownCrierBlair and Schröder unveil Euro vision #73236/8/99; 8:51:07

The report suggests that public expenditure as a proportion of GDP in most European countries "has more or less reached the limits of acceptability".

Sound money requires sound fiscal policy.

USAGOLDToday's Gold Report: British Lose $700 Million So Far on Gold Sale; The Case of the Missing ECB Gold#73246/8/99; 8:52:39

MARKET REPORT(6/8/99): Gold got hammered again this morning in New York
following an equally disastrous session overseas. The Reuters London wire reports
"aggressive selling" in Tokyo and Sidney that carried over to London with gold testing
support at $263. With the Bank of England sales coming up, there continues to be a virtual
absence of buyers in the options and futures' markets. Once again, we raise the question
why any official seller of gold would announce the sale before the fact and drive the market
substantially lower. The Bank of England has thus far lost just under $700 million to the
market and we are still nearly a month away from the actual sale. Please note the virtual
silence from the Blair government and Bank of England on this issue despite the growing
opposition among the British people. As we have said here repeatedly, there is substantially
more to this sale than meets the eye. If we continue to hear reports of strong physical
purchases, the obvious question will arise: Are certain counterparties in the gold market
filling shorts of physical metal with this gift wrapped opportunity courtesy of BOE?

Bridge News files this less than clear explanation to the reduction in gold assets at the
European Central Bank:

"Total gold assets registered by the European Central Bank system were down 16 million
euros at 105.307 billion euros in the week ending Jun 4, the ECB said today in its weekly
financial statement. The decrease was caused by the unwinding of a technical transaction
between two central banks that had taken place at the end of 1998 in connection with the
subsequent transfer of foreign reserve assets to the ECB, it said. In addition, foreign
currency assets were unchanged on the week at 234.2 billion euros on Jun 4, the ECB

How do you lose 16 million euros on an internal transaction -- particularly when the metal
is going up in the currency denominating the transaction? Did some gold leak out? The ECB
has made much hay about transparency and unambiguous transactions. Assuming that
Bridge News is not being deliberately opaque and ambiguous, we would have to say the
ECB is the guilty party in this regard. What happened to the gold? Meanwhile the euro itself
staged something of a recovery this morning on a comment by Bundesbank president
designate Ernst Weltke that "$1.08 was an appropriate reference rate for the euro."

The latest News & Views is at the printer and will be ready for mailing in about a week.
This month we ramble through the many issues surrounding the gold market and give the
reader a good, solid overview of what's happened in this topsy turvy market of the last
month or so. If you are looking for some short and sweet analysis as to what is going in the
gold market today from a multitude of sources, you'll like this upcoming issue. It is a quick
and interesting read. Please go to our ORDER FORM or call Marie at 1-800-869-5115 for
a Free Copy of News & Views -- our widely read monthly newsletter -- and introductory
packet on gold ownership.

TownCrierIraq may hinder OPEC efforts if it ups oil exports#73256/8/99; 9:10:41

Last month, the U.N. Security Council indicated it would allow Iraqi unlimited oil exports, somewhat undercutting OPEC's widespread efforts at cut-back's and conservation.

Watch the tables turn as the old "oil-for-food" assistance program to Iraq becomes a "dollars-for-oil" assistance program to the West. Will Iraq become America's 51st state? (Don't take TownCrier TOO seriously...)

TomcatSteve H#73266/8/99; 9:20:35

Steve, I hope I am not overstepping my bounds, but since you posted the response from your "partner", and entitled it Therapy anyone?, I will take the liberty to comment.

Part of my work over the past 25 years has been identifying and eliminating negative people from businesses. Negative people mess projects up and lose money for all involved. These negative folks have intentions are always "good" and "honest". Right? But somehow, the those around them make mistakes of judgement. If that quote is representative of how your partner communicates to your or others then I can tell you that he is not only negative. He is openly destructive! Can you imagine growing up with a father like that?

I can assure you that it is a regualr practice in corporate mangagement to identify and eliminate negative/destructive people. This is an unadvertised activity but it nevertheless occurs. Any corporate leader who is not weeding these people out is doomed to failure. The fact that this practice is not talked about doesn't mean it doesn't exist.

I known several people who are very very sharp but they don't seem to get anywhere. Many of them have the characteristic to put up with these negative/destructive types.

Some people hit others with sticks. Some use their fists. Others, in the name of help, use words. Sticks and fists damage one's body. Negative/destructive words penetrate the heart and destroy one's confidence.

Cavan ManTo Julia#73276/8/99; 9:26:27

What an excellent post to Voyager! I just can't get away from this Forum; shouldn't have stopped this morning. There is much to be learned from the East; so much about near and far Eastern cultures that is not taught in the West. You are wise to teach your children all good things that the world has to offer. Indeed, beginning in Sumer, we see common threads tying the ancient Sumerians to the Hebrews beginning with Abraham in the Old Testament. I know you understand the difference between "Revealed Truth" and philosophy(ies). I enjoy reading your posts!

PS: In your study of world religions, I suggest you get to know the Orthodox Church. Good luck on your journey.

Cavan ManSteveH#73286/8/99; 9:30:06

Sir Tomcat is exactly right on. I know a lot of people just like your friend. I try to avoid them. Your posts reflect much intellect, understanding and knowledge. I really look forward to seeing "SteveH" at this Forum. Best regards...
USAGOLDCorrection#73296/8/99; 9:37:42

Please substitute this sentence in today's report:

"With the Bank of England sales coming up, there continues to be a virtual absence of aggressive buying in the options and futures' markets."

JCTexSteveH#73306/8/99; 9:48:53

Lately, I have been in and out of town an awful lot [problems with an 89 year old mother]. Have relyed on usagold to get me back up to speed whenever I return. You, and several others deserve a very real "thank you" from me. As far as I am concerned, your "partner" seems to be in love with the wrong guy.
By the way, you were a very busy boy this morning....thanks.

TownCrierRichmond Fed's Owens says wages rising sharply#73316/8/99; 10:14:00

"Now, undeniably, whether we look at manufacturing sector, whether we look at retail or the services sector in our district, we're seeing prices moving up."
XavierBIS accounting: why $208?#73326/8/99; 10:25:07

Hello all kind sirs and ladies. Looking on the BIS web-site:
"The BIS employs the gold franc solely as a unit of account for balance sheet purposes, assets and liabilities in US dollars being converted into gold francs at the fixed rate of US$ 208 per ounce of fine gold ( approximately equivalent to 1 gold franc = US$ 1.94 ) and all other items in currencies being converted into gold francs on the basis of market rates against the US dollar."
I find it curious that a seemingly arbitary number of US $208 was chosen. Is it arbitary? I hope so! Any of you have an inkling as to why?

By the way, Steve and FOA: I have been going through your posts to make a A3 sized flow chart of the gold carry trade ( CB's to BB's to Mining Co's, arrows of intrigue linking up Gavyn Davies to Goldman Sachs and Blair/BOE, Greenspan to BIS etc - all very exciting stuff which I thank you both profusely. )

TownCrierGold knocked to fresh 20-year lows in Europe#73336/8/99; 10:25:10

Regarding Britain's first gold auction on July 6, a minerals strategist said, "I wouldn't rate it higher than say a 50 percent probability that someone might put in a crazy bid. It's a small amount of gold being offered."

A "small amount of gold" that has somehow managed to stand the market on its head...
Prediction: auction will be oversubscribed at prices well above spot. This is metal, not paper that we're dealing with here. Many will walk away empty handed.

SteveHcomments#73346/8/99; 10:52:14

JCTex. Mark is a good friend. He is just concerned. He is more positive than I.

Xavier. It would be good to take a look at said flow chart. Can you post somehow; what program to view?

ThriverMore ideas from people who live in large cities#73356/8/99; 10:54:14

Hello all,

Here's a link about a group who wants to
"call for a moratorium on gold exploration and an end to cyanide heap leaching - the practice of dumping cyanide on piles of low-grade ore to extract gold"

file this under "people who want to live their life, and yours..."

XavierSteve,#73366/8/99; 11:00:09

Its on A3 paper now, but I'll draw it on Excel and load it up on a web page, before the weekend, for your scrutiny and comments!
Aggieoptions#73376/8/99; 12:01:15

I'm one week new to this site. very interesting!! wondering with all the short-sited people in the country, wouldn't this be ideal time to by cheap call options on metals? I think by late summer y2k panic will set in and metals will take off regardless of what the big boys want.
Aragorn IIII hope to post more in coming days, as time should allow. A quick response to Aggie...#73386/8/99; 12:17:15

"...wouldn't this be ideal time to buy cheap call options on metals?"
Although the feeling would change from battle to battle, when the war was over it was seen that truly, there was never an ideal time to be whistling "Dixie". Aggie, I hope you see my point.

got gold?

beestingTowncrier msg.7333 BOE Gold sale.#73396/8/99; 12:38:26

The way the price of Gold fell today their may not be any bidders at the BOE Gold sale next month.
So,I'll start the bidding:
I bid;$9999.00 U.S. a peice for 2-400 ounce bars plus 2 slightly salty tasting large boxes of tea reportedly washed ashore near Boston harbor,dates unreadable.

Since the announcement of the BOE Gold sale, the BOE has lost about $1200 per 400 ounce bar.Real astute business people!! Something real funny is going on,or is the BOE dealing in HOT(American expression for stolen) GOLD!!......beesting

beestingAragornIII#73406/8/99; 12:43:11

Good to see you back!!! Missed your input to the Forum......beesting
AristotleHighlights from yesterday--TownCrier's FOREIGN RELATIONS memos to President Johnson#73416/8/99; 13:26:10

"2. They are unanimously opposed to an increase in the price of gold as a way of dealing with the present crisis."

WOW! Officials NEVER use the word "crisis" unless things are dire.

"After the meeting of the Central Bankers in Basel this week end, we will have a better idea of what the Europeans are willing to do, what the prospects are of keeping the gold market open and quiet, and what would be the most orderly way of bringing about change."

In case you didn't know, Nixon's ultimate decision in 1971 to end the dollar's international convertibility to Gold was done WITHOUT the direct consultation or involvement of foreign trading partners. It was essentially "lightning in the night" (to borrow my good friend's popular term...Aragorn, I owe you a pint of Newcastle when circumstances permit!)

"3. The Europeans realize that we all may face soon some quite unpleasant choices; but they are not clear about what these choices are and what will be required of them if we are to hold the system together. They are prepared to close down the London gold market and let the free market price of gold float. What they have not thought through are the terms of the intimate collaboration which will be required to make that kind of system work--especially how to deal with the consequences of a two-price gold system."

Read that one twice, folks!

"Your senior advisers are agreed:
(1) We can't go on as is, hoping that something will turn up.
(3) We want to negotiate the following package:
--Interim rules on gold.
--Measures to keep order in the financial markets."
(5) If we can't get this package, we would have to suspend gold convertibility for official dollar holders, at least temporarily, and call for an immediate emergency conference."

Temporarily. A permanent disconnect with gold was not envisioned as possible, nor even is it now.

"(6) This probably would mean a period of chaos in world financial markets, but it may be the only way to push the others into a sensible long-run arrangement which avoids a rise in the official price of gold. We are unanimously agreed that a rise in the price of gold is the worst outcome."

Does time change perceptions?

"The decision you must make now is whether the London gold market should be closed at once.(President Johnson agreed to the temporary closing of the London gold market on March 14.)"

More lightning in the night!

"(a) Arguments for closing [the London Gold pool]:
--Avoid losing perhaps $1 billion in gold tomorrow (we lost $372 million today).
--Such a gold loss would further shake the confidence of central banks and trigger their coming to us for gold."

"(b) Arguments against closing:
--Involves U.S. taking the lead in throwing in the towel."

An admission that our money had gone bad due to mismanagement and poor fiscal fallout from a costly war in Viet Nam--as evidenced by the final comments in the memos:

"After we met with you, Joe talked to several of us about the attitude of the Hill with which he has been dealing, and the attitude among the Central Bankers.

He describes the attitude on the Hill as one of almost anarchistic willingness to pull down the temple around their ears on the grounds that our budgetary expenditures are out of control. He feels that the Europeans have the same kind of feeling and cannot understand that our Executive Branch and Congress are incapable of generating a tax-expenditure policy that would keep us in reasonable order.

He is almost in despair about being able to negotiate a package without some sign that a tax increase is at least over the horizon; and he is in despair about getting a tax increase unless there is some kind of commitment to expenditure limitation.

I know enough to know that I have no competence in figuring out how this nagging political problem can be solved. It obviously goes to the heart of our nation's capacity to carry its external commitments; maintain the world trade and monetary system; and avoid a serious domestic breakdown in our economy."

America wrote international checks that it couldn't afford to cash. The piper has yet to be paid, and the scenario that has been thoroughly addressed by FOA can be viewed as a direct consequence of much of the fallout from this time period and onward.

Gold has never left the monetary scene, although many people are now not old enough to remember Gold as money. I think some people suffer from the Santa Claus syndrome
regarding gold being money. They romantically WANT to believe it is true, but deep down they fear it is a myth with which they might be deluding themselves. For those people, these memos are hard evidence that "Yes, Virginia, there really IS a Santa Claus!"

Wouldn't you concur? It is difficult to see such official discussions and entertain any further doubt about Gold. Gold is money. And while national citizens may be fooled during an extended interim "suspension of Gold as money," the international pipers will be paid in the end. Use your knowledge and time wisely.

Gold. Get you some. ---Aristotle

TownCrierNY Precious Metals Review: Aug gold dives $3.4 after 20-yr low#73426/8/99; 13:34:49

By Melanie Lovatt, Bridge News
New York--Jun 8--COMEX Aug gold futures settled down $3.40 or 1.3% at
$263.80 per ounce after plunging to a contract low of $262.80, which is
also a fresh 20-year low on continuation charts. Key to its fall was spot
gold's earlier move below $265 support, made against a backdrop of overall
bearish market sentiment ahead of the UK Treasury's Jly 6 gold auction.

Traders said that gold extended its early morning weakness throughout
the day, and became the target of dealer sales toward the 1430 ET close.
"I think it is feeding on its own malaise and potential buyers will not
come in until there is a sign the market has stabilized. While it is in a
tailspin there is no sign of this," said James Steel, analyst at Refco.
Bill O'Neill, analyst at Merrill Lynch, said that gold is showing an
"erosive technical chart" with lower highs and lower lows.
Leonard Kaplan, chief bullion dealer at LFG Bullion Services
described today's activity as "more of the same."

"As the market deteriorates, 20-year old charts mean nothing and
what's truly important are round numbers," he said. "The only people who
are buying it now are those who like standing in front of trains," he
said, referring to the overwhelming shorts, severe downtrend and fast
approaching UK Treasury sales.

"What you're seeing here is a very nervous market pressing lower --
there's an unwillingness to go long because of the obvious trend,"
commented David Meger, senior metals analyst at Alaron Trading, noting
that the UK's forthcoming sale is "looming like a dark cloud over the

He said that there is "a lot of ambiguousness over technical support
levels -- what we're finding is psychological support. He noted that gold
prices are moving into "uncharted territory."
However, he subscribes to the growing theory in the market that gold
may see a strong rebound after the UK Treasury's Jly 6 sale. "In the 70s
we saw the lowest price before IMF sales and then the price rallied," he
noted. [Sure did! It rallied to more than $800 (in 1980 dollars) from a lower starting point--TC]

Meanwhile, total gold assets registered by the European Central Bank
system were reported down 16 million euros at 105.307 billion euros in the
week ending Jun 4, the ECB said today in its weekly financial statement.
The decrease was caused by the unwinding of a technical transaction
between 2 central banks that had taken place at the end of 1998 in
connection with the subsequent transfer of foreign reserve assets to the
ECB, it said.

While some market observers had viewed this news as bearish, both
O'Neill and Steel commented that it was in fact neutral. Steel said that
the transaction was made from one central bank to another, which nets out
flat, while O'Neill noted that the amount in question is not even very

However, more bearish was a statement from the Australian Treasury
Department. Treasury officials said that while prices for coal, iron ore,
zinc, copper, lead, nickel and aluminum would likely start to "trend up"
in the current fiscal year 1999-00 (Jly-Jun) the price of gold is expected
to remain weak.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

USAGOLDAristotle & Townie....#73436/8/99; 13:57:54

I wanted to voice my agreement with Aristotle that those memos from the Johnson years are of singular importance to all of us and thank Townie for digging that up -- history viewed from behind the curtain.

It shows to what lengths governments will go to manage the gold price. It also shows that you can have protracted time periods -- going for years -- where the price is successfully managed at least in outward appearance. There has been much discussion of late among analysts about the Anglo-American connection with respect to anti-gold policies and its opposition to the continental European view. It must be remembered that only a few years after that string of memos, the Nixon administration did "throw in the towel" and the free price of gold skyrocketed and it all happened because of the relentles physical demand for the metal both by private parties and governments. I will say again what I have said so many times before here and elsewhere: There is much commonality with respect to gold policy between this era and the days of the London Gold Pool in the 1960s and early 1970s. The players are same (except now Japan is a player.) The policies (on both sides) are the same. The initial results are the same. The methods, however, are different. It would be reckless to assume that this replay would end any differently than the original in the 1970s. Already we see oil rising which is essentially a statement on the part of the oil producers that they want value, not just paper, for their resource. We see Europe continuing to hold to gold. We see inflation rates beginning to ratchet up in the United States and a burgeoning money supply. How long until we see the dollar in retreat? The next step will likely be devaluation of the dollar -- not formally as what occurred in the 1970s, but informally in the marketplace. i.e.

Here comes the Towel!

And I believe the dollar depreciation will be against the euro and gold. The Japanese, it appears, will do everything in their power to keep the yen cheap against both the dollar and euro and China appears ready to follow.

USAGOLDPeter...#73446/8/99; 13:59:54

You can see from my last post which way I'm leaning on the Y2K capital flight issue. I am not on solid ground yet though.

Can any of our Y2K experts here help me with how Europe stacks up against the United States in remediation progress particularly in the banking/finance sector?

canamamiSpot Gold#73456/8/99; 15:12:56

Kindly excuse this stupid question, but isn't the spot gold market the market for physical gold - i.e., one needs physical gold now or immediate rights to physical gold, so one buys it on the spot market, as opposed to buying or selling a contract for the right to future delivery at a given price. If the spot gold market does reflect the price for physical gold (which is lower than the COMEX gold contract), does this undermine the theory that price of paper gold does not reflect the true market value of physical gold, because paper gold is manipulated downward? Kindly excuse me if I have made a crude error here.
TownCrierU.S. Treasuries fall, 30-year yield rises to 6 pct#73466/8/99; 15:24:19

Comment on today's low volume bond market: "It was just an absolutely boring day. It was pretty painful. It was a tough day to make a living."

Meanwhile, another strategist said "The market is just terrified that for the first time in nine years you have an inflation problem."

mike55Wall Street or PPT Future Draft Choices?#73476/8/99; 16:45:30

Read the comments of a couple of Wharton School MBA students in the first few paragraphs of the linked article.....frightening. I can't believe these two guys represent the norm. God help us if they do.
Gandalf the WhiteUSAGOLD's posting #7343#73486/8/99; 17:05:00

OK MK, the Hobbits are all ready to sit on the floor and learn your thoughts on the depreciation of the US$. Please explain your thinking of why the US$ will not be officially changed, and if not, how it will deflate. We all know that the Euro is backed directly in part with Gold reserves and therefore has far more value than just pure paper. -- But, please explain how Japan and China will distance themselves from the US$, as their exports will mostly receive US$. Now that the long Bond has hit 6.0% interest rate, will that not cause further increase in foreign holders of these bonds to make conversions to other international instruments like gold and the Euro. Is this how the US$ will be deflated ? --- More education please.

Aragorn IIIHappy Hour... A lesson for Gold hearts#73496/8/99; 17:23:50

Thank you for the kind offer -- a pint of Newcastle would be enjoyed as would the company. In that consideration, I offer a simple tale for all...

From experience, do we make an exit of the pub, or find anger to replace past satisfaction when a Happy Hour is unexpectedly announced? Do we cite poor judgement for the enjoyment of the early ale, and refuse more-- as was originally planned-- because the unforeseen opportunity now allows three-for-one?

Of course, we do not. The smiles widen, and the day continues. Good Sir, I respectfully decline your offer. While in my company, I can assure you your dollars are not spendable. I shall be pleased to do the buying until last call is made.

A strange pub, this one. Operating hours are not posted, and no clocks are there on the wall. No worries, as we get what we came for, and take what we get... Newcastles at the going rate.

A visit to a small shop while on travels two weeks past provided me with a symbolic token of misplaced livelihood. As I left the shop, in my palm there now rested one ounce Krugerrand, dated 1980. I assure you that it is no different today, at the price I paid, than it was when originally purchased in earnest by someone for $800 at that time. It was sold in capitulation (moments before my arrival), no doubt, for cash to chase whichever the latest stock to be trading at its peak. Events will reveal this person to have made but one purchasing error, as gold bought for $800 and twenty years early will be revered by generations as the very demonstration of intelligence and wealth-management acumen. And yet, Happy Hour is now called, three-for-one. Whatever is one to do?

got gold?

CoBra(too)Veneroso articles on..#73506/8/99; 17:30:25

US Bond market-levergage & could there be an Orange County Crisis of Massive proportions @ the lemetropole cafe, also same author BoE Goold Sale...A Blow to market sentiment at GE!
SteveH your BIS post of Backstrom, while being an excellently balanced speech on the state global economic and financial affairs had some unusual,IMHO, clear warnings as to overheating US economy, accumulation of too much debt to finance US consumer and business and lastly rapidly escalating trade deficit.
Also I feel there have been dire warnings towards the hedge and counterparty community between the lines, which were illuminating. " It is important that all investors held accountable for their decisions ... and pay their part of the resolution of any future financial crises".
Do I read this as the first open, official rejection to the practises of FRB and PPT coming to the rescue of of the "too big to sink" counterparty, derivative gamblers?
@Aristotle: thank you for your history on the Ldn. gold pool. I guess I became a gold bug in the early 70's, when SA
Mines paid dividends, where you could recover your principal in a few years by yields only- anyway I'm happy to be here still learning. Pronounced CB gold sales usually mark the end of the PoG decline, as you and MK state has been a reliable contrarian indicator in the past, though this time the net sales to the market have been marginal over years or are you counting the leases, which effectively may turn out become outright sales? The psychological (intended!) impact
seems to have wreaked most havoc and still is. Anyway, the paragraph on the two tiered market already evidenced up to the end of Bretton Woods and the closing of the gold window by Nixon in 1971 bears a timely analogy to the present dilemma.
Regards CoBra(too)

LeighA Lurker Steps Up To The Table#73516/8/99; 18:13:03

Hi, everyone! I've been a lurker here for about a month and consider all of you my friends. I, too, am struggling to understand the mysterious ways of the gold market. I, too, have been purchasing gold, silver, and platinum as fast as I can get rid of those pesky mutual funds.

Julia, an article you might find interesting can be found at It's called "It Couldn't Happen Here" (in the Y3K section) and describes a hypothetical (but possible) rapid deflationary scenario. There are other good articles at that site.

I have a couple of questions I've been dying to ask and hope that someone can help me.

(1)If Clinton and his thugs should confiscate gold, wouldn't gold owners be able to sell it on the world market (and probably at better prices)? That's assuming that the Bilderberger gang doesn't outlaw gold worldwide. But then, how could they possibly do that?

(2) How does one go about purchasing Euros? I understand that they're sold electronically. If for privacy reasons I don't want to be on the Euro list, could I buy physical marks, francs, etc. and trade them in for physical Euros later on?

Steve H and Town Crier, thank you so much for your faithfulness in scouring the financial and political news and bringing to our attention items that could impact the gold scene. Steve, thank you especially for copying "Gambler's" post from Kitco. I've been noticing an increased sense of urgency here lately, and it is helpful to have some dates.

Leigh (a lurker no more)

Aragorn IIIcanamami, the spot price of gold is further evidence of Santa Claus for the doubting-Virginias#73526/8/99; 18:24:00

(With that, I hope Aristo does not mind my exploitation of his earlier suggestion.)

It would be difficult for any person to conclude that the spot gold price is determined by on the spot physical demand, though in theory that is at it should be.

The physical market is so overwhelmed, so dwarfed by the paper markets, that the unmanaged crumbs of metal that fall through the cracks must leave the dogs looking to the table above for insight into value. Finding only paper in abundance, no insight is found, and they are given away at such a paper price. (I am ever grateful for those such as Michael here that tirelessly sweep the floor for our convenient opportunity.)

You will see that as LBMA trades 1,000 tonnes of gold on paper in the course of daily business, there is no hope for the small voice of a bullion coin to call the tune. As such, Santa does walk among us these days.

You do not see a run on banks these days (let us ignore Y2K for the present discussion!), because there can be no visceral fear that the money has been over lent. The very nature of modern money allows for its creation through the lending mechanism, and by existing as account entries, the numbers can not physically "run out". Such is the wonders of modern banking, and the shortcoming at the same time--the currency stands upon the weakest of legs.

Enter the gold loan. These same banks that create money for a conventional loan find that the same process works well for a gold loan. These mechanics are topics of past and future posts, so I will omit them for sake of brevity here. The problem however, is that limited gold has been loaned/promised time and again to many entities. As time reveals these loans not to liquidate as they should, the formerly content holders of gold on paper now each rush to be among the few made whole by physical delivery of the scarce product...sweepings from the floor being all that is readily available. An old fashioned run on the bank, you might say! This paper functions as "modern money" for the giants among us. Gold at $260 they tell me? Let there be no doubt, Virginia, there IS a Santa Claus!

got gifts?

ANOTHERUSAGOLD (6/8/99; 13:57:54MDT - Msg ID:7343)#73536/8/99; 18:27:21

Mr. Kosares,
I again, thank you for presenting this forum. It does give the fair view for eyes "not so clear" in nature of world. Your thoughts, are smooth for all that touch. A needed display and welcome relief from common banter. Writing here does attract other persons of the "honest feelings" and "deep views". They do carry with them the "reality of life", a quality lost to many of this day. A
quality so needed for future defense of ones family wealth.

My words are slow for a time, as events move forward. Truth spoken once be priceless, spoken many times and value is lost. Time will prove all things, not the repetitive voice, yes? Later, my speech will discuss "what has just occurred" and meaning of such. These future events will demand much text and and thinking, wait we do.
I not mean to slow my good friend, FOA, for he does offer a great deal for the reading. I does tire even my eyes, at times! It is the fair say, I speak, for some require many words, others few.

Sir, I write soon again, on the changing tide. The new flood tide of gold! Another

Aragorn IIIANOTHER, your chair has been empty these too many days, now.#73546/8/99; 18:39:23

It is good to receive your companionship once more. Greetings! We are well met, it would seem, on the dawn of a new era through the rebirth of ancient truths. Gold yesterday remains gold tomorrow while all else changes.

Please return as your time and thoughts allow.

SteveHSent this to a friend moments ago...#73556/8/99; 18:45:43

Time must be nearing for gold's meteoric rise. Another just posted.
His message is clear with a hint of
desperate measure. An omen I feel. He seems to say, I will say this
once and once only (so you better listen friends -- that is my take).
Be ready.

mike55Santa Claus and Common Banter#73566/8/99; 18:53:59

Just as I was finishing creating this link and to thank Aragorn for his words, I witness the return of ANOTHER! Please, ANOTHER and Aragorn, do not consider me so presumptuous to feel that I am contributing to these discussions. I am but a humble student doing research, merely providing an article on the futures pablum that is being fed to the general public. An excerpt from said article:

"People are sidelined now that we know these sales are coming," said Meger. It would make no sense to enter the market now when the price of gold is expected to be lower and cheaper later, he added.

BeowulfGold overseas trading#73576/8/99; 19:18:04

Kitco is showing gold up $3.60 overseas. Wow what a change from today.; 19:41:14

Le Metropole members,

Charles Peabody has served commentary at the
Hemingway Table entitled, "Large Bank Exposure
to Interest Rate Swaps". It is a short piece so
I inserted some other recent Peabody commentary
at the end of his commentary.

"CMB and JPM are the two largest players in the
interest rate swap market"
"the groups most hurt by the move up in rates"
"fuel for the asset bubble is coming from"

For the last 6 months Charles Peabody has told Cafe
members to expect the following:
1. unintended consequences as a result of Alan Greenspan's
interest rate cuts
2. bond yields would have a 6% handle ( almost no one else
thought the would ever happen this year )
3. the bank stocks would correct 40% to 60% from
their highs
4. There are LTCM type problems that would surface
in late spring

Well, the long bond touched 6% today so we congratulate
Charles. If what we heard about the hedge funds was
on target today, it is very likely his other predictions
will become reality too, maybe soon.

One more comment about Charles. He still strongly believes
this will the year for gold bulls and he also believes the
next commodity index to surge will be the CRB as powerful
grain markets appear to be right around the corner.

Stay tuned. will be the happening
Cafe to hang out in this summer.

<A HREF="">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron

Le Metropole members,

Charles Peabody has served commentary at the
Hemingway Table entitled, "Large Bank Exposure
to Interest Rate Swaps". It is a short piece so
I inserted some other recent Peabody commentary
at the end of his commentary.

"CMB and JPM are the two largest players in the
interest rate swap market"
"the groups most hurt by the move up in rates"
"fuel for the asset bubble is coming from"

For the last 6 months Charles Peabody has told Cafe
members to expect the following:
1. unintended consequences as a result of Alan Greenspan's
interest rate cuts
2. bond yields would have a 6% handle ( almost no one else
thought the would ever happen this year )
3. the bank stocks would correct 40% to 60% from
their highs
4. There are LTCM type problems that would surface
in late spring

Well, the long bond touched 6% today so we congratulate
Charles. If what we heard about the hedge funds was
on target today, it is very likely his other predictions
will become reality too, maybe soon.

One more comment about Charles. He still strongly believes
this will the year for gold bulls and he also believes the
next commodity index to surge will be the CRB as powerful
grain markets appear to be right around the corner.

Stay tuned. will be the happening
Cafe to hang out in this summer.

<A HREF="">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron

August gold $264.40.

FOAComment#73596/8/99; 19:56:57

Mike55 and ALL,
Hope you understood that Another was complimenting everyone here for their fine posts. I think the banter remark was directed at other mediums. It seems I am the one that's overwriting at times??

Aragorn III,
Santa Claus gold prices for anyone that can get it delivered! You bet!

USAGOLDAnother...#73606/8/99; 19:57:41

Welcome back, my good friend. It has been too long and much has happened. I and many others at this FORUM look forward to your THOUGHTS on this most interesting of situations in the gold market. Thank you for your good wishes and timely return. The pleasure is mine............
BeowulfSpot is jumping at his leash#73616/8/99; 20:04:18

Check out the graph. Spots jumping up and down like he's trying to break his leash. Go Spot Go.

Wait...what am I saying. I get paid Friday. Stay down Spot, PLEEEEEEEEEEEEASE. Those that have abused you will soon get their just deserts. Just stay down till Friday.

mike55FOA#73626/8/99; 20:06:56

Yes, I understand. Thank you. You overwriting!? Never, IMHO. Now I listen and learn.....
SteveHcross post#73636/8/99; 20:22:05

As it is relevent here:

Date: Tue Jun 08 1999 16:55
ORO (Jims - What is the official party line?) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
All I know are the statistics support some market views and do not support others. As a former R&D Engineer, I can only say that I will tend to believe what is supported by statistical evidence.

e.g. The USAGOlD Forum postings from ANOTHER - up till a few days ago I did not believe at all that it was authentic, or that if it is that the scheme would work as planned. What brings me to remove some doubt from this scenario is that the main event in May - from which point many current trends started ( dollar, gold, oil, interest rates, stocks ) was the BOE announcement of their gold reserve sale. If these 415 tonnes of gold are the main event of importance in the currency and financial markets of an economy with a $10 trillion GNP ( currency moving almost 4% in one month ) , then there is some truth to the story of the currency chess game of the US and the EC. All the preconditions of a US centered financial crisis are there ( have been there since 1997 ) , with the recent money supply growth rate slow down in spite of continued Fed coupon passes being the sign of the fuze having been lit.

Rubin's resignation is the marker of the cracked axle on the wagon just making it over the hilltop. The first to jump off the wagon would be the driver.

Greenspan's comments late last month on the EC CB gold games ( sell to induce others to sell so that they can quietly pick up the cheap gold ) were a giveaway of his expectation that his lifelong dream of a gold standard is now a concrete possibility. The ejection of the soft money dissident from the Fed is another sign of the times changeing.

So.. there may be something more than a grain of truth in the convoluted story of ANOTHER/FOA. I give it now a believability factor of 40-45% - up from 10-15% before the events of the last five weeks.


Cavan ManStatistics......#73646/8/99; 20:35:59

"......there are lies, damned lies and, statistics."
Aragorn IIICanamami, I note that my reply (Msg ID:7352) to your question was incomplete,#73656/8/99; 21:12:00

my concluding remarks not delivered. More rest is needed, perhaps!

This paper gold used as a modern money alternative has a remarkable "split personality". As a contract, it delivers the value of gold over the span of years while at the same time bringing down the apparent value of real gold--this because it brings many years of future gold production into virtual existence in the market today. The "old fashioned run on the bank" will essentially be a "run on the world" for available gold metal. All eyes will at such a time return to the physical market to show the on-the-spot value. The Bank of England gold auction next month offers more than mere unmanaged crumbs of bullion, and helps to bring the physical market back to bear on spot value. Two items only I should be happy to see reported within the hour following the bid deadline: number of qualifying gold recipients, and lowest qualifying price for delivery to all. A crash-course education in the art of being human seems to be drawing nigh. I feel students of history shall be the best prepared for the final exam!

FOA--Yes. We agree on delivery! I highly recommend the "Newcastle" while the "bar" remains open!

TownCrierHear ye! Hear ye!#73666/8/99; 21:21:37

THIS WEEK IN GOLD has now been updated! Appearing at USAGOLD by permission of the World gold Council, click on the link above to be swept back through a week in time, viewing the world gold markets through the eyes of WGC staff from offices throughout the world.

(Hi ANOTHER! Glad to see you visiting!)

jinx44What more can I do ????#73676/8/99; 21:50:19

I wrote this to a poster on another forum. I am weary of the game we are forced to play. I have worked hard to do the right thing and I have been screwed for it. this is not the country I was born in. I believe in gold and guns. I am tired of being the patsy for the govt. I don't care what happens anymore. My children will not see the end of the rainbow as I have.

The gold and money angle isn't the most sexy aspect of y2k. I'd much rather talk about guns and revolution. However, saving ones' wealth has got to be a feature of y2k planning. I am a corporate banker by trade. My family has been in the business since 1857. I hate banking. It is a game for criminals. I realize this after my whole life in it. Gold will defeat the fractional reserve system. I think that people should be in control of their own lives. The govt in the US is corrupt and will suck us dry. The only hope we have is defunding the monster by refusing to pay the illegal taxes they demand. I have always voted and written my congress asshole. It has made NO DIFFERENCE WHAT_SO EVER. I am following my convictions in this matter. I hope you do too. I no longer care what they do to me. My children are grown and funded. The govt must take what they want at gun point as I am beyond caring for their rules anymore. I have nothing more to lose. God bless us all.

TownCrierMore tidbits from FOREIGN RELATIONS OF THE UNITED STATES 1964-1968#73686/8/99; 22:18:06

8. Letter From President Johnson to Secretary of State Rusk
Washington, May 14, 1964.

Dear Mr. Secretary:
On July 18, 1963, President Kennedy, in a Special Message to Congress on Balance of Payments, outlined a comprehensive program to eliminate the deficit in our balance of payments, and stated that this nation will maintain the dollar as good as gold, freely interchangeable with gold at $35 an ounce. I have reaffirmed the July 18 Message as the policy of this Administration.

While we can take justified pleasure in our progress, the deficit is still with us and much remains to be done before the job is finished. It remains imperative that we continue to push all parts of our program to achieve equilibrium in our international accounts. Only in this way can we assure that confidence in the dollar will be maintained and that the United States will continue to meet its national objectives, both at home and abroad.

I count on you to continue your efforts.
Lyndon B. Johnson
191. Editorial Note
In their March 14, 1968, public statement, Secretaries Fowler and Martin invited the Central Bank Governors to consult on the gold problem (see footnote 2, Document 190). This initiative led to a meeting in Washington on March 16 and 17 of the Central Bank Governors of the seven nations active in the gold pool. The Managing Director of the International Monetary Fund and the General Manager of the Bank for International Settlements also attended these sessions.

On March 17 the Governors issued a communiqué supporting the U.S. Government's policy of continuing to buy and sell gold at $35 per ounce. The communiqué also noted the U.K. Government's determination "to do all that is necessary" to end its balance-of-payments deficit

The Governors believe that henceforth officially held gold should be used only to effect transfers among monetary authorities and, therefore, they decided no longer to supply gold to the London gold market or any other gold market. Moreover, as the existing stock of monetary gold is sufficient in view of the prospective establishment of the facility for Special Drawing Rights, they no longer feel it necessary to buy gold from the market. Finally, they agreed that henceforth they will not sell gold to monetary authorities to replace gold sold in private markets.

The Governors' decision in effect led to two gold markets, one for official transactions only with the price fixed at $35 per ounce, and the second for private transactions with the price freely determined by supply and demand.

194. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, April 2, 1968.
Stockholm Monetary Conference
1. Stockholm completed another phase in the IMF Special Drawing Rights plan. It brings us closer to creation of "paper gold".
The central issue was whether France would be able either to stall the proposal or change its basic character. Either outcome would have caused an international monetary crisis and a major drive to raise the official price of gold. Faced with this choice, the other European countries joined with us to settle the remaining questions and put the plan in shape for the ratification process.

2. There were few differences between the U.S. and France's European partners. The main reason for compromises was to help Germany, Italy, Belgium and the Netherlands take the political heat at home of dividing with the French on this fundamental issue. They had to be able to show that they were not knuckling under to the U.S. but were acting to protect world prosperity on an issue where France was unreasonable. This required a demonstration that they and the U.S. would go the last mile to meet French demands without prejudicing the plan or the quality of the SDR as a reserve asset.

4. The willingness of the Four to stand up against the French is a major political development. It demonstrates again that there are limits on how far de Gaulle can push them.

5. The French claimed that the system could not work because our economy had gotten out of hand and we were dumping unwanted dollars on the world. In joining with us, the Four showed they had confidence that we would bring our financial house in order and, specifically, that we would pass the tax bill. The tax bill has now become as much of a world issue as the controversy over the price of gold.

6. We are playing the Stockholm meeting not as a victory of the U.S. over France, but as a victory for the world monetary system and for reason in world financial affairs.

199. Memorandum From Secretary of the Treasury Fowler to President Johnson
Washington, June 6, 1968.

Mild devaluation of the franc should not cause so much substantive economic shock that it would threaten the international monetary system. But the monetary system is in such fragile condition that even a mild devaluation could bring about massive fund movements--into Germany and perhaps Italy, where revaluation might take place, or into Switzerland for safety. Almost certainly, it would have an adverse effect on sterling, which is still very weak. The U.K. reserves are short and are mortgaged to the hilt. Much pressure on sterling could force the U.K. to float. Should that happen, there would be repercussions on the dollar and, perhaps, general monetary chaos--with everyone trying to get out of currencies and into gold.

Whether the monetary system, in its present form, could survive this series of steps is problematical. The U.S. might well have to cut the gold convertibility link to the dollar and float itself. And that would destroy the present system and probably badly cripple world trade.
Sounds to me like gold has been too vital to be lightly cast aside, even on the eve of a new millennium!

JuliaWelcome back ANOTHER !#73696/8/99; 23:09:40

It's great to have you join us again. You are missed when you're not here but your THOUGHTS! remain with us. It is a wonderful gift you have given us, a light in the darkness as we witness the signs you speak of. It is such a comfort to know you are well. I am like a dry sponge soaking up your wonderful THOUGHTS! whenever you are here.

Your place will always be here for you. Please come back when you can.
Julia (aka Yellowbird)

VoyagerJulia#73706/8/99; 23:20:54

Thank you for your most thoughtful and gracious response.

I hope to carry on this discussion later. Our company is going through a new computer conversion, all-new software and hardware, so my energy is nearly totally focused in that direction. Who ever invented the year 2000? It is a very expensive.

I am very pleased to see the effort you and your husband are devoting to your son. Our children are also our first priority, as I believe the other parents of this forum are equally devoted to their children. Both of my children now have a foundation of gold to begin their economic life. Perhaps the children of this forum will be the ones to bring the world to a more enlightened existence.

P.S. Have seen IMHO referenced here many times. What does it mean?

Oregon Geezerjinx44 message #7676#73716/9/99; 3:56:52

I read your message three times. I could have very well written it myself as I am in complete agreement. I love my country but I hate my government. This monster is completely out of control and it is going to get worse.
Last evening I watched a documentary on the Discovery Channel titled "Big Brother." It detailed the incredible snooping going on in England, Canada and the U.S. The data banks are being filled to overflowing with even the smallest aspects of our lives --- what we do, what we say, where we go. All of it goes in and is available to a whole host of gumment snoops. Key words in electronic transmissions trigger recordings, DNA samples are being stored without your knowledge, health records are being shared and, of course, the ever-present video cameras are all over the place. In London, for instance, it is easy to track your car anywhere you drive.
Think of the power a modern day Stalin or Hitler could have. This is the power the secret agencies of the U.S. gumment now have.
One of the final stages is to do away with cash and gold and replace them with electronic "money." Every purchase would be recorded. Your preferences, habits and "cash flow" are all up for study. From information comes control. If you are overweight by gumment standards and recorded on your universal I.D./electronic money card, that 1/2 gallon of ice cream in your grocery cart could be withheld "for your own good."
I am certain that my gold purchase of a few months ago is recorded and filed in some data base.
Like you, I no longer care and do my best to survive as free as possible.

SteveHAugust gold now...#73726/9/99; 4:58:51

JuliaVoyager#73736/9/99; 6:11:36

IMHO - In My Humble Opinion

It is my pleasure to "talk" with you. Looking forward to more discussion when time allows. I too am busy, focusing on school after a two week break and preparing for next year.

But I'll be building on my child's future as we watch what happens with gold.

Until later,

USAGOLDToday's Gold Market Report: Trees Don't Grow to Heaven and Roots Don't Go to Hell#73746/9/99; 8:34:53

MARKET REPORT(6/9/99): Gold continued its southerly trek this morning shedding
another 90¢ from the price in thin trade both overseas and in the early New York market.
Reuters reports minor short covering at the $262 level. Bridge News reports "heavy bargain
hunting" as the metal broke below the key 1000 yen per gram mark in Tokyo. Also gold got
a boost from incoming Bundesbank president Ernst Welteke who said that Germany had no
interest in gold sales and would hold on to its reserves "to see whether we need the gold
reserves for other purposes."

Gold has dropped nearly $30 since the Bank of England announced its decision to sell over
half its reserves causing a loss of $700 million in the value of British gold reserves -- a self
inflicted wound that has many wondering just exactly what the British had in mind when
they decided to announce the sale publicly and cause this wild run down in the gold price. It
is now beginning to surface that there is a split between the British treasury which favored
the sale and the central bank which opposed it. Terry Smeeton, as reported here previous,
who used to head up BOE's foreign exchange and gold desk, has come out publicly
questioning not just the strategy employed but the wisdom of the sale itself: "This is not a
policy I would have advocated when I was at the bank," he says. "It is clearly a Treasury
decision in which the Bank has had to acquiesce."

Frank Veneroso's Gold Watch newsletter, read widely by gold insiders, reports an
interesting twist to the even which first appeared in the respected Gartman letter. I though it
would be interesting to pass it along for your reference:

"There is a rumor sweeping through the markets concerning Mr. Gavyn Davies, one of
Goldman Sachs European economists[Ed. Note: at this point, for the sake of transparency,
we must note that Goldman Sachs is a long standing and revered client of The Gartman
Letter in New York, London, Hong Kong, and Tokyo, on the international equities, metals
and foreign exchange desks; thus reporting a rumor concerning Goldman is a bit more
difficult than would be the norm, in all honesty. None the less, the rumor is being given
such wide dissemination that we've no choice but to report it here] and a close friend and
economic advisor of Prime Minister Tony Blair and Chancellor of the Exchequer, Gordon
Brown. The rumor suggests that it was Mr. Davies who urged Mr. Blair and Mr. Brown to
prevail upon the Bank of England to reduce its gold reserves. The rumor further posits that
Goldman Sachs is short 1000 tonnes of gold for future delivery. We are, of course, not
privy to Goldman's gold trading position.The rumor, true or not, is becoming more and
more widely debated by gold market participants."

In addition to this interesting tidbit is a rumor from one of our sources that LTCM (Long
Term Capital Management) the hedge which required a high profile bailout last year could
be short as much as 1000 tons, not the 300 to 400 previously reported. Whether or not
these two large short positions are at the heart of the BOE sale or not remains to be seen.
Perhaps we will never know the truth on this matter, but it remains one of the strangest, if
not the strangest episode I have witnessed since involving myself in the gold trade some 26
years ago. The fact of the matter remains: These gold short positions cannot be filled by any
other means than to find the physical metal and repay the creditor. Gold loans must be
repaid in gold. As Standard Charter London pointed out in its report this morning: "trees
don't grow to heaven and roots don't go to hell" and so a watch out for some short

In the latest News & Views, we ramble through the many issues surrounding the gold
market and give the reader a good, solid overview of what's happened in this topsy turvy
market of the last month or so. If you are looking for some short and sweet analysis as to
what is going in the gold market today from a multitude of sources, you'll like this
upcoming issue. It is a quick and interesting read. Please go to our ORDER FORM or call
Marie at 1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly
newsletter -- and introductory packet on gold ownership.

TownCrierUK voters turn against euro #73756/9/99; 8:59:28

Rough waters in England, smooth(er) sailing in Germany.
TownCrierGold at fresh 20-year low, outlook bleak#73766/9/99; 9:34:53

``Gold is not regarded in technical terms these days. It is causing a problem for technical traders; there is nothing for them to hang on to,'' a dealer said.

Good! It's time for them to step gently outta the way...

SteveHAugust gold hammered at ...#73776/9/99; 9:39:10


Dow -53.
LT Bond yield 6.03%

Nasdaq 22.25

CoBra(too)PoG in uncharted waters?#73786/9/99; 10:00:12

PoG uncharted or not - it's always darkest before dawn. It is painful for the longs, but how painful it is for the shorts I don't even want to imagine. We'll soon see some of the shorts panicking and trying to cover before the pack (cover on what/ - paper?) The physical is gone and sold - period.
This kind of open and gross manipulation of markets is just as strong as the weakest link in the chain - IT IS BOUND TO SNAP- (sorry for shouting).
I am convinced, this end game (battle)is coming closer with the day to be the last stand of the spin-meisters of paper markets. Yes, I'm getting mad, but never in terms to surrender to the jugglers of paper only in terms of getting more assured not to give in.
Never - go gold!!!

SteveHDesperation (squared)#73796/9/99; 10:11:48



Gold in new territory and for what, the greatest paper chase in history whose ultimate outcome is physical gold delinked from a fallen paper market in which all paper holders will likely have wall paper that doesn't even match what they have already. A sad testimony to our regulators and our markets.

But what a great buying opportunity, eh?

GoldflyJinx44, SteveH#73806/9/99; 10:59:42

For anyone else that be needing some therapy.....

Go ahead tell her your troubles!


GoldflyUhmmmm...#73816/9/99; 11:02:28


....might be needing.....

beestingShort history of Gold price-1979#73826/9/99; 11:02:37

Above chart gives monthly and daily Gold prices for 1979.Thank the fine people at Kitco for it.
The last time we were at this level for the spot price of Gold was between:
May-18 to May 21 1979-Gold price-$256.40 to $262.00.

However,think positive 1979 was a rising BULL market for Gold,here is the low price for 1979:
Jan.15,1979-Gold price-$216.85.
Here is the high price for 1979:
Dec.28,1979-Gold price-$512.00.

A difference of $295.15 per ounce for the year 1979.There was not nearly as much investment money around in 1979,as there is in 1999, trillions.When the GOLD BULL starts charging this next time don't you want to be a part of it?
P.S.I am in no way involved with Gold investments as an occupation..........beesting

CoBra(too)Desperation? @ Steve H#73836/9/99; 11:21:15

Steve, Sir, I can only reply with an old Chinese quote:
"War doesn't determine who's right, war determines who's left!"
That's my desperation...

SteveHOpen contracts at near-term volume high#73846/9/99; 11:48:27

Today hourly contract rate on Comex is over 325 or more. Last hour was 577 and two hours ago it was over 600! August gold strikes into 250's but still holding 260+.

Normal hourly average volume is below 175 or less.

HopeingIII'm becoming very confused#73856/9/99; 12:05:03

If there really is a war on Gold, ie, US$/IMF vs ECB/BIS,
how is it that it seems only ONE side is firing missiles
while the other is in constant retreat ? My very real concern
is that WE all may very well be deluding ourselves and the
simple truth of the matter MAY be that Gold is in very
serious trouble for a long time to come. I do firmly believe
that of course in the "LONG TERM" Gold will win but many
that frequent this form, myself included, may not be around
in the long term. Furthermore, depending on time frames of
course, many of us may in fact leave our offspring with
LESS rather than MORE. Forgive me if this post seems
overly negative but I am simply trying to look at things
realistically. Each and Everyone's situation is different.
Personally I don't have another thirty or forty years to
wait this out.

Any and All comments will be greatly appreciated.

Good Luck All.....

SteveHJust an opinion Hopeing II#73866/9/99; 12:10:10

IMO, we are seeing a classic shakeout of all longs. Only the strong hands will remain, the price will spike lower then once stops are cleared, boom, off she goes. Physiscal will probably get sucked up at record levels at these prices. I suspect some of these folks buying at these levels will want delivery and if it happens en masse then game is over. Shorts are out of control with no gold to back it up. This is an end-game desperation move, IMO.
The ScotWHAT IF?#73876/9/99; 12:26:42

BOE never intended to sell it's Gold, their real intention was to buy Gold???? Food for thought..The Scot
SteveHSpot just below magic mark...#73886/9/99; 12:38:31

Latest precious metal quotes from 6/9/99 20:37
Precious Metal Last Change Change %
Gold US$/Oz 259.35 -2.90 -1.12
Palladium US$/Oz 352.00 3.60 1.02
Platinum US$/Oz 366.50 2.90 0.79
Silver US$/Oz 5.05 0.09 1.78

Scot: what physical? Where? none out there in qty.

sunnypGold Vs Platinum#73896/9/99; 12:54:29

Hello all,
I'm new here and was wondering if Platinum Eagles is a golden investment for the future? :)
...since Gold is very reasonable and likely to Explode upwards, wont Platinum follow?

Gandalf the WhiteSteveH's watching of the COMEX#73906/9/99; 13:04:20

Thanks Steve for watching the MKT's for us busy folks! -- Looks as if GC9Q mananged to end at about 261.0, or about $2 above the low for the day. HUGE volumns! Let us watch the OI and see if it increases like FOA advised.

SunnyP --- May I first welcome you to the FORUM and advise that you go into the well lighted Archives and read a bit. You will find that Gold is "money" and Pt is "only a commodity". Better to do as Aragorn III and Aristotle advise and get the REAL stuff.

CoBra(too)@ AG & PPT #73916/9/99; 13:22:38

Take note: A man who drives like hell -
is bound to get there - IMVHO - Do not deviate (sorry deriviate)... go straight ... to 6,5% on the long bond and leave the rest (assured) to the market. It will do a great job to straighten out the imbalances you've caused - did you really need to rebuild the bubble last year? Why didn't you heed your own advice - you'd have been the hero of the millenium - now? Who knows - I for one don't even want to find out.
The best reputation only lasts as long as noone finds it non(-ir)reputable-... while the team is abandonding ship at excelerating rates.
Talking about renegades ... the sense of urgency is palatable!
Yes, St.H. I'm getting mad at the paper shorts, their counter parties, spin meisters of the CB's, the PPT's and all overt and covert market manipulators.
Desperate? -YES! - As it becomes public knowledge that these big boys will protect the hyper leveraged gamblers - in order to save the system (too big to sink - heard that before Titanic).
Systemic risks won't be allowed as long as US$(and some of the rest of the world) is not de-leveraged and credit expansions will go on until the last Dollar (balloon) will be pricked, as easy as the last virgin in the US.
Pop goes the weasel ... go gold ... make u some!

CoBra(too)(No Subject)#73926/9/99; 15:14:45

Whatever I (have to) say, seems to stop all other conversation - so be it - sorry for having intruded!
Good luck!

canamamiHard Evidence of a Physical Shortage?#73936/9/99; 15:37:59

What hard evidence is there of a current supply shortage of physical gold? Has anyone on the Forum demanded delivery of the physical gold represented by a gold contract, and not received the physical gold? If this were happening, would there not be a plethora of lawsuits concerning dishonoured gold futures contracts? If the spot market did not actually result in the delivery of the physical gold for which the parties contracted, how and why would it still be in operation?
Gandalf the WhiteCoBra (too)#73946/9/99; 15:38:17

Why do you not just let it all hang out! --- Tell us your true feelings. <;-) --- I do not think that the last few postings have stopped anyone from posting, I think that they are awaiting the last of the NEAP tides arrival to then see ANOTHER's forthcoming FLOOD tide begin. (It may well be seen in the volume on the COMEX today as pointed out by SteveH. Let us watch the OI and see. --- The Flood tide shall surely be something that we all may tell our grandchildren about.

TownCrierNY Precious Metals Review: Aug gold dn $2.7; hits new 20-yr low [sorry for delay...had computer problems all day!]#73956/9/99; 16:15:03

By Melanie Lovatt, Bridge News
New York--Jun 9--COMEX Aug gold futures settled down $2.70 at $261.1
per ounce, managing to trim some of its losses after a slump to a fresh
20-year low of $259.20 on continuous charts late in the session. Gold fell
on selling from New York dealers, although as the 1430 ET close neared,
some of them turned buyers, bringing the price up.

Traders said that gold continues to slide on a deteriorating chart
picture accompanied by an overall bearish market outlook ahead of the UK
Treasury's first gold auction Jly 6.
Its fate was effectively sealed as spot made an early morning break
below the $260 per ounce level. COMEX Aug's brief push under $260 in the
afternoon was also seen as a bearish signal, said one trader. More
negative news filtered into the market just before the close, as Merrill
Lynch analyst Bill O'Neill cut his downside gold target by $10 to $240 per
Gold received little support as the dollar extended Tuesday's weakness
against the yen and positive noises this morning from Germany's Bundesbank
did little to stop it spiraling lower.

Bundesbank President-designate Ernst Welteke had today cautiously
argued against gold sales by the German Bundesbank. He said the effect of
gold sales on some of the countries that should benefit from it was
unclear. He also said that gold reserves could be used for other purposes,
but didn't specify their nature.

Meanwhile, on the currency side, one trader commented that if the
dollar had not fallen against the yen both Tuesday and today "gold could
be down by another $5."
Nevertheless, the selling eventually ran out of steam and Aug was able
to edge up from its low as one of the NY dealers switched course and
turned buyer, said traders. "The dealers were selling and there were just
no buyers," said one trader.

"It's a continuation of the same trend--we saw some supportive levels
basis $262 spot but we took this out in Europe--the spot market was then
more focussed on $260," said David Meger, senior metals analyst at Alaron
He said that while some large dealers were selling, the price was
falling "more on a lack of buying" than heavy selling. "The market lacks
any type of a buyer right now," he said. Players suggest that any buyers
will be extremely tentative ahead of the Jly 6 Uk gold auction.
"It looks like $260 might be somewhat supportive for the time being
-- people are uneasy below the $260 level," he said.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

TownCrierRussia Eurobonds seen up on Soviet debt nonpayment#73966/9/99; 16:18:25

Russian Eurobond prices could rise further in the near-term now that the country has sharply reduced its debt burden by deciding not to make Soviet-era bond payments.

Nice to see that a history of defaulting is a positive thing these days. What a world!

TownCrierRubin warns U.S. steel import bill provocative#73976/9/99; 16:22:29

This doesn't look good... talk of a trade war developing.

If the premise of trade is to exchange equivalent values, what is the problem. Ohhhhhh, that's right...attempts at job protection, and protecting a southbound currency.

TechnicianEnd of $ bull?#73986/9/99; 16:50:24

Down loaded last three days of commodity action after "enjoying" myself in Florida. Interesting markets. Still no buy in gold until we see a purging reversal. My guess it will be sooner than later. But, comment tonight is the sell indicators on the dollar that I have observed. First time in a long time. If true, gold bear market is doomed.
SteveHCoBra(too)#73996/9/99; 17:17:04

Keep 'em comin' We all feel the pain, believe me. Somtin ain't right in Texas or in gold market manipulation to the n-th degree. System is under lots of stress otherwise it wouldn't be actin this way, 'tis a fact, imo.
SteveHcanamani#74006/9/99; 17:18:51

I agree. Must be physical deliveries aren't being made much on COMEX. They do post eligibles frequently. Same with coin market. I had asked another about this. Why aren't we seeing evidence of shortages in physical if there really is a shortage. FOA?
SteveHOI Comex#74016/9/99; 17:39:08

Steve Kaplan--

THOUGHT OF THE DAY: Total COMEX gold open interest was 203,955 as of Tuesday's close. A reading at this level when commercials are heavily net long has always led to a major short-term rally. As confirming evidence, total COMEX gold options volume on Tuesday registered 16,857 puts vs. 12,433 calls. The usual ratio is 3 calls for each put; in addition, the options volume total is about four times normal, as is typical of a market at a major short-term extreme. Meanwhile, the Journal of Commerce index closed Tuesday at a seven-month high; this is one of the most reliable leading indicators for the price of gold. The final, best reason to be bullish on gold: William O'Neill, director of futures trading for Merrill Lynch, lowered his gold price target on Wednesday afternoon to $240.

SteveHTime for a contest as to when gold will cross $300 again...#74026/9/99; 18:22:09

SteveHBest post yet#74036/9/99; 18:32:34

kitco by ORO (gold?):

(also check out 16:18 on kitco)

Date: Wed Jun 09 1999 19:59
ORO (BOE gold sales - the bank multiplier effect - the end of it is near) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
If paper gold is the equivalent of credit being oferred by a bank at an 11 multiplier, than the promise of 415 tonnes of gold are the equivalent of over 4500 tonnes of paper gold through this multiplier effect.

The question arrises from this "stand in their shoes" game:

1. I am an insider LBMA BB and I know I have dibs ( non-competitive bids ) on the BOE physical and I want to sell this gold before the bank does.
I go to another BB ( BB2 ) and lend them a gold certificate which I write.
Knowing that I am insider on the BOE sale I will not be asked to prove that I have the gold or gold equialent ( oil ) in the ground through an agreement with a mine
2. I now have a gold loan to BB2 in my hand and can now sell this obligation on the market. Second BB has a certificate that can be lent to BB3, whose obligation BB2 will sell on the market.
3. Before and during the BOE sales I buy back a BB obligation to make sure I am covered and don't have to bid high ( that originally came from my "printing" a gold certificate ) .
4. When most of the borrowers in the game are covered there remains only one and a bit more obligations to buy.

This way the gold is "pre-sold" ten or more times over. Since the process takes time, we see a steady decline in gold. The end result is the same.

I believe this can be done to some extent with any commodity and with any currency and is one of the reasons the $ in which they all trade is so strong though the banking system and the hedge funds have been creating money at an unprecedented rate throughout this period. The net growth of the commodity and especially the gold debt is small relative to the ammount initially sold - or promissed for sale. Since the rollover process takes little time going forward and the despiriting effects on the market are sufficient to remove buying interest from the public investor, the covering process can be extended for a long time.

Thus, despite active buying of gold by China, Japan ( cones to 15 and 5 million oz on each dip day ) , SE Asian individuals, commercial buying and Western ( US ) buying of gold, there is a sufficient supply as long as the institutional buyers are happy with paper gold.

Applying this to miner hedgeing: Using a three year production hedge with a 10 multiplier we get an initial "short power" of 75,000 tonnes ( which the banks owe each other - NOT THEIR NET OBLIGATIONS ) . Since the net short position over time will grow only in relation to the interest payed on the gold loans ( average of 2% ) . Then the annual growth of net short positions on 3 year's production is 1500 tonnes ( 150 tonnes without the multiplier ) . Since this has been going on for at least five years, the net short position should be 7500 tonnes over the mine production hedge and the total should, therefore, be on the order of 15,000 tonnes or more.
If the timeframe is extended, the ammount grows.
If the multiplier is smaller the excess over the 7500 tonne net producer hedge would be smaller.
If the lease rate is lower ( I chose this number by the eye ) this will also reduce this excess.

A few interesting behaviors of the mining community make this situation particularly profitable to the BBs and particularly dangerous as well:

1. As the market price drops, a mine will stop mining and processing the low quality gold ore that accounts for most of the resource and will mine the higher grade ore that is much smaller portion of the ore body and will produce more gold in order to keep the operation going - at this point the "cash costs" drop.
2. The net result of this process is depletion of the best portion of the ore body and early closure of the mine.
3. Once the number of mine closures reduces gold output beyond the increases in production from mining higher grade ore the physical mine supply is reduced. This seems to have been the case, as net production has started falling steeply ( 7% drop this quarter ) .
4. This stage is the "end of the game" as the forward sales are no longer possible because growth in future production can no longer cover the existing obligations or the interest they bear.
5. Once th price of gold rises the producers produce less of it because they transition to lower grade ores and produce less gold as the price continues upwards, until new mining capacity is opened.

One of the reasons the BOE had to conduct the sale was that contracts coming due could not be filled with expected future physical mine production and would cause bankruptcies in the BB community and undermine the UK banking system as the net exposure of the LBMA members is so large.

By the time the BOE sales are over, there will be an even greater net short position in gold and the BOE gold sales will not cover it.

This is particularly significant because of the heavy individual, Japanese and Chinese CB buying which is one way and will not come back to the market.

canamamiReply to SteveH -Post# 7400- and Musings on Forms of a Gold Rally#74046/9/99; 18:35:59


I had a somewhat similar experience in a coin shop to the one you described some time ago, when I recently made my first modest, physical purchases. The owner suggested that, if I were an investor (i.e., he meant a speculator), he could procure a bulk order of gold or silver coins, with a reduced premium, thereby enhancing the chance for a profit. Given that my employment contract expires in less than two months, not a good idea for me at this time, but obviously he did not feel he was facing a supply shortage. Now perhaps he was referring primarily to silver, but my sense is that he was indicating he could procure both species of specie.

Next topic: We could be in the midst of a gold rally, but that rally is manifested by dishoarding by reluctant large holders of gold - for example, the BOE. Instead of a rise in the POG, we may be witnessing the elimination of an impediment to future gains later in the rally, or in the next gold rally. I know I speak nonsense to those who believe gold is the only true long-term money (I believe gold is money, just not the sole true money), but gold's current value as reflected vis-a-vis other currencies also matters to me. Hence, I wanted to share my theory, which I must admit is pure speculation.

A good night and pleasant dreams to all.

USAGOLDCobra...#74056/9/99; 20:02:14

All of us who are regular posters have had the sinking feeling that what we just posted was a conversation stopper. I know I have and having talked with many posters personally I know that others have had the same sinking feeling on occasion. I think you have to realize that, particularly at this site, you have a large number of professional people who come and go at the site when they have the time or inclination and are not always present to add their two cents in a conversation. Give your posts time to garner a response and brew in the minds of your fellow knights and ladies. Be assured that there are many who read your words even if a response is not illicited immediately. I have seen posts go for days without a response (including those by yours truly) and then somebody comes upon a relevant addition or response. I have learned not to take it personally.

I would like to suggest that these posts are like coining money -- make that golden money, of course. Once they are hammered by the minter and posted, they are there forever for all to see until such time that Y2K renders us inert or electricity is dismissed from the face of the earth. In other words, let it flow, Cobra, and don't think you aren't being heard. Your words are coin of the USAGOLD realm. Make yourself heard even though at times your efforts seemingly do not bear fruit -- it comes with the territory.

USAGOLDMy fellow knights and dear ladies...#74066/9/99; 20:39:48

I am taking a long weekend and I am in need of chivalrous service. Since I do not know whether or not I will have internet access, I am asking each of you to assume the responsibility of the Daily Market Report. Please enter your edition during the course of the day on Thursday, Friday, and Saturday and the winner will be the recipient of a glittering one-tenth ounce Philharmonic. The two runners-up will receive a Silver Eagle. Please mark your entering post as *******Today's Gold Report (surrounded by stars) ********* The spot prices must be indicated except on Saturday of course. I have left a note at the Daily Market Report for readers to go to the FORUM for today's report. This awesome responsibility is yours. Good luck. We shall see if we have any budding Rush Limbaugh's out there.

You must enter a report at least two of the three days to qualify. They can be posted at any time of day but each post for that day must be entered before midnight finds the mountains.

(At the same time if I do have access I will post a report either here or at the Daily Market Report and the contest will proceed as outlined here.)

May the best Gold Report win the gold!

SteveHAugust gold ...#74076/9/99; 20:42:02

$259.70. This sucks!

But what a great buying opportunity, eh?

I like this one too (something to cheer us up):

"Date: Wed Jun 09 1999 22:05
kapex (I sincerly hope that all here recognize the opportunity that ) ID#275194:
Copyright © 1999 kapex/Kitco Inc. All rights reserved
is unfolding right in front of our eyes! The fact that some are BOLDLY stating how very wrong we are/have been/will be if we stay invested in Gold after it has already declined is the stuff of bottoms!
I'm so glad to see Gold take out the 20 year lows as it has shown sentiment for what it truly is.......out of the market COMPLETLY!!
A small group at kitco is all that is left. And now we have new and old posters telling us how very wrong we are. THANKYOU! The fact that every analyst on Gold out there is negative and no one can point to support lines on the charts is .......well music to my ears! Can you imagine how low these #'s will be ( as if there not already screaming BUY! ) tomorrow let alone how low they are NOW!

Being a contrarian is not the sanest way to invest and it WILL get you there early more often than not, but if you can just realize for a momment that, if EVERYONE is on one side of something, then the logical thing is to take the opposing side. Sentiment Extremes of this magnitude do not come but a few times in a lifetime. Gold and Stocks both.
But oh yes, you guys and you know who you are, really think that NOW is the time to bail out of PM's and the shares, and what invest in the stock market? I don't think so.
Also some of those same people are talking about this from a trading standpoint and that really doesn't apply to most here. To those that are trading futures and options on futures I would agree that stops and such are warrented, hell I wolddn't play the long side of these markets with futures right now either. But that does not matter when you are accumulating solid mining companies and PM's at these prices! Especially when no one else wants them. It takes a strong will to go aganist the crowd. But when you see across the board pessimism as is being exhibited on the PM's, it won't be long. IT NEVER IS!!! Repeat after me guys........IT WILL NOT BE LONG! ...."

Gandalf the WhiteAddenda to SteveH's #7401#74086/9/99; 21:23:32

Mo from Kaplan --- The important item of OI increase!!! -- Note the 7,500 + increase in OI. That is the largest + or - recorded in a long time!!! Looks as if the Commercials are yelling to the shorters -- "oh no! don't throw any mo gold into the briar patch. Oh NOOOOOOO !!!!"
PS: NOW looking for the "Thunder in the night" during a nearby day.

Gandalf the Whitesorry -- got carried away and forgot to attach Kaplan !#74096/9/99; 21:25:25

Wednesday's COMEX gold estimated volume was a heavy 65,000 lots. The rollover out of the June contract is now almost complete, with June open interest down to 1,163 (as of Tuesday's close). Total COMEX gold open interest on Tuesday surged 7,537 to 203,955 contracts, demonstrating strong commercial accumulation on a day when gold fell $3.40, which is bullish. An open interest this high when commercials are heavily net long has always signaled a major short-term rally.

Cavan ManTWA#74106/9/99; 21:27:00

This is an airline company that has not made a profit in eleven years. The theory is that the debt carried is too big to fail. Could the same be said of the US? Despite our fundamental economic problems which have been well documented here, are we too big for the rest of the world to let US fail? I invite comment from all of the learned scholars who regularly post this FORUM. Thanks!
AristotleHi Gandalf#74116/9/99; 22:30:38

We've sure got our share of lightning and thunder in the night right here. It's so bad I must begin unplugging my favorite appliances, computer included!

Just wanted to say a quick word of thanks to the world for these gold prices. It is always nice to see the coversion of my salary yield a raise (more metal!) over the previous month, even when the ol' employer hasn't paid a dime more. Gotta love this program!!

Gold. Make you some. ---Aristotle

Yo, Paymaster! Raises for ALL my men!

The StrangerTo My Friends at the USAGOLD Forum#74126/9/99; 23:02:50

If you were around in the '70s, you know that higher rates, per se, were not what slew the beast. After just about everything else had been tried, it was TIGHT MONEY that finally did the job. Eventually, tight money will happen here, too...but not yet. The Volcker/Reagan recession of 1982 was a doozy, but it was necessary to stem inflation that had been expanding for a decade. The current inflation is brand new. Few on Wall Street have even acknowledged it yet.

If you are discouraged, remember this: the road to worldwide economic recovery has largely been built upon dollar liquidity. And just as that dollar liquidity is refreshing markets around the globe, so is it fostering $20 billion monthly trade deficits for America. Now that Kosovo is winding down, watch how the dollar behaves in the foreign exchange markets. The problem is, most other countries are reinflating also. So where does one hide?

Eva Peron discovered when she tried to create wealth on a printing press that inflation is the inevitable result. She was an extreme example, yes. But the principle here is the same. For a time, those in power may succeed in conning the shirtless ones, but they never can defy simple arithmetic.
Meanwhile, if anyone watching gold prices hour by hour is agonizing over every downtick, I would respectfully advise finding a better use for one's time. Right now we are in an emotional panic that has absolutely nothing to do with anything except fear. How long it will take is anybody's guess, but it is not the end of the world.

Golden TruthWE SHALL NEVER SURRENDER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!#74136/10/99; 1:00:25

Hello Gentlemen, I've been watching the movie " THE BLUE MAX" In what i consider somewhat of a classic. To the point in one of the flying scenes " HEIR COBRA" machineguns jam and he only able to get off 40 rounds the odds are now 4 to 1 he does get away,but in a WAR you can't always win every Fight. That does not mean we will lose this War. The Paper shorters only know half of the story where as we know have been educated by the very best here at this forum. When the shorts do catch on it will be to late. Think tatics gentlemen, we know more and we will fight this thing to the Death!! Now gentlemen is a time for courage,fortitude and Bravery this is what a true Knight of this round table must now be. Think for a moment about all that has been revealed to us if you think this battle is something IMAGINE what the real battle front must be like at this point in time and space? Remember united we stand divided we fall. It is time my fellow Knights to put on our full armour and wage a mighty Battle against the forces of Darkness and slay the Dragons! This is where we must stand together for there are many more people out there that are truly suffering due to the lows being set in the GOLD market. We must fight on and be a becon in the night and their tower of strength for those that are to weak or have lost their FAITH. NOW ONWARD CHRISTIAN SOLDIERS!! Lets give HELL!! P.S All shorters must perish!! We will not take Prisoners, and may the glory be to GOD!!!!!!!!!!!!! Golden Truth.
SteveHAugust Paper Gold on the cusp...#74146/10/99; 6:00:59

$259.90 and that is the truth.

Good post golden truth.

T. RemitalChart says"""#74156/10/99; 6:11:12

With all the negative talk in the chat rooms these days,
perhaps it is time to look what the chart is saying..
You may have heard of the term "slanting wedge"-We have what
I believe to be a classic DOWN SLANTING WEDGE formation in
gold. ......this is followed by a rapid rise../.. Many will
be left in the dust when it happens----

UsulJapan GDP surprise? Or not?#74166/10/99; 6:12:47

Japan's gross domestic product rose a breathtaking 1.9%
in the first three months of the year, dwarfing analysts'
expectations of a 0.2% gain. On an annual basis, GDP was
up a massive 7.9%...

I wonder... Could it have anything to do with this? -

"Japanese government to hand-out $175 vouchers to
'stimulate economy'
Japan has begun its first hand-out of
shopping coupons, part of a government effort to
stimulate the ailing economy. Parliament at the same time
approved a budget which will pump a further $700bn into
the economy. "

Week of February 12, 1999

distributing government-sponsored shopping coupons.
To stimulate the economy, vouchers worth 20,000 yen -
$175 - are being given to children below 15 and bedridden
or low-income people over 65, some 35 million Japanese in

The coupons were approved in November 1998, so
people had a bit of time to make spending plans and
perhaps production was increased in anticipation?

GoldflyHowdy Stranger!#74176/10/99; 6:13:01

Hey, it's good to see you back! But, doggone it, you swiped part of what I was working on for my Market Report, now I got to cook up something else!

Anyway, keep banging the drum on infaltion and don't be a stranger, Stranger!


UsulIf Japan recovers-#74186/10/99; 6:18:10

Investors will want to invest in Japan rather than overseas
The yen could appreciate- rumours of BOJ intervention last night to stop this happening.
On the other side of the coin, the dollar would fall, investment funds flow out of the US, bond yields would increase, stock markets fall, Japanese rates rise, end of
yen carry trade, more pressure on US rates to increase, import prices rise, more inflationary pressures, all in all in gold's favour!

JuliaCharts#74196/10/99; 6:29:14

If anybody is interested in charts.

JuliaCharts#74206/10/99; 6:33:06

I should add to my previous post: Be sure to look at BOTH charts. They are different projected directions the market could go.
ETStranger#74216/10/99; 6:34:37

Hey Stranger - good to see you haven't forgotten your password.

You wrote;

'If you were around in the '70s, you know that higher rates, per se, were not what slew the beast.
After just about everything else had been tried, it was TIGHT MONEY that finally did the job.
Eventually, tight money will happen here, too...but not yet. The Volcker/Reagan recession of 1982
was a doozy, but it was necessary to stem inflation that had been expanding for a decade. The
current inflation is brand new. Few on Wall Street have even acknowledged it yet.'

I'm not sure it is brand new, but maybe just a continuation of the old, eh? I don't see how any slowdown in attempted money creation can be allowed to happen. If tight money returns as you say, it's likely cause would be market driven rather than politically driven as in the 80's. Don't you think Volcker's fed action was an attempt to salvage the dollar economy and still not move back to a gold standard? Do you think this is still possible today? Didn't someone mention awhile back that the Euro's creation was directly caused by a lack of alternatives to a dollar based economy?

You wrote;

'If you are discouraged, remember this: the road to worldwide economic recovery has largely been
built upon dollar liquidity. And just as that dollar liquidity is refreshing markets around the globe, so is
it fostering $20 billion monthly trade deficits for America. Now that Kosovo is winding down, watch
how the dollar behaves in the foreign exchange markets. The problem is, most other countries are
reinflating also. So where does one hide?'

Yes - it would seem this is the plan once again, at least as far as the dollar based countries are concerned. I believe there is some merit to the idea that what happened in the 80's is not what we will see this time around. Since the Euro's introduction, the world now has an alternative to a completely dollar based world economy. I'm not so sure this reflation is going to be as successful as it was two decades ago. The debt bubble created now seems immensely larger than that faced in either the Johnson or Carter years. I still believe there is a finite limit to this bubble and all it will take to deflate it is some kind of economic shock.

You wrote;

'Eva Peron discovered when she tried to create wealth on a printing press that inflation is the
inevitable result. She was an extreme example, yes. But the principle here is the same. For a time,
those in power may succeed in conning the shirtless ones, but they never can defy simple arithmetic.
Meanwhile, if anyone watching gold prices hour by hour is agonizing over every downtick, I would
respectfully advise finding a better use for one's time. Right now we are in an emotional panic that
has absolutely nothing to do with anything except fear. How long it will take is anybody's guess, but
it is not the end of the world.'

Yeah - agreed, but it might be the end of the world as some know it. The dollar based economies are likely to never see this world again if the reflation you describe is unsuccessful. I would still contend that the real economy has been deflating for decades but has been masked by this monetary inflation. I don't see how the bankers/governments really have any choice but to continue their attempts at reflation but I'm not so sure they will meet with the same kind of success they've had the last thirty years.

No panic here. Isn't this a buying opportunity?

Good to see you back.


JuliaLeigh#74226/10/99; 6:34:49

Thank you so much for the link you posted. A great deal of good information. Julia
JuliaGandalf the White#74236/10/99; 6:42:32

Sorry to be so late in saying this.
I just wanted to tell you that your post was great. It gave me a real picture of life in Thailand after the devaluation of their money. I really appreciate the time you took to respond. I can plan better when I have examples like yours. Thank you.

By the way - what is a farang?


AELbits and pieces#74246/10/99; 7:43:13

Julia (6/6/99; 14:00:34MDT - Msg ID:7244): "Do you think that if one is
prepared for y2k, one is then prepared for the mother of all $ devaluations?"

I think so. That is one of the neat things about "Y2K" preparations --
they are not must Y2K preparations, they are ANYTHING preparations. If
you are thoroughly prepared for Y2K, then you are thoroughly prepared
for just about any untoward event or disaster imaginable (or at least
any such event that CAN be prepared for). And that includes economic
disasters, if you have properly switched out of paper and into
tangibles. Metals are of course the most concentrated tangible, but do
not neglect the other stuff -- food, clothes, etc. Example: I just
bought 4 pairs (for me, a 4/5-year supply) of very high-quality sneakers
at K-Mart for $20/pair. These cheapies are made in China, and China is
toast, Y2K-wise; not to mention the coming dollar crisis. I do not
expect that we will be able to buy high-quality sneakers for $20/pair a
year or two from now. Maybe $60/pair. Maybe $100/pair. In the shorter
term, sneakers might do quite a bit better than gold. There are many
other examples. The point is: stock up on any/everything that you need
and use regularly. Buy 5 years supply. You'll use it up, no matter what,
and prices cannot possibly get much lower than they are today.

We watch this new pork 'n beans market together, yes? :)

(just kidding, Another/FOA! love your posts...)


ET (6/6/99; 13:23:54MDT - Msg ID:7243): "I saw you asked Tomcat about
the current situation concerning y2k and I hope you don't mind me
throwing in my 2 cents. The situation in a word could be described as
desperate. Very few entities could be described as ready to carry on
business as usual. I'm starting to believe my own pessimistic conclusion
concerning the economic ramifications of y2k has indeed been way too
optimistic. This is shaping up as a total economic collapse of historic
proportions. I've failed to find any evidence to the contrary. Virtually
every industry in the world is far, far behind in remediation efforts
and this does not bode well for any currency except gold. I think it is
time for all to put aside any further concerns and concentrate on
getting through the next few years in a much smaller economic environment."

... PRECISELY! Thanks. I am increasingly convinced that the main Y2K
fallout will be economic, and that it may take many months to fully
ripen (i.e. for things to unravel). Within the Y2K prep community there
is a tendency to overstress acute-disaster types of preps (propane
stoves, first aid kits, etc, etc.) -- which are certainly OK, and part
of the picture. But the acute phase is unlikely to last for more than a
few weeks or months (and will likely be episodic and spotty,
geographically). The economic fallout will take a few months/quarters to
build up a head of steam, and could be devastating. We shall see.
Meanwhile, prep for a depression. REDUCE EXPENSES. I am thinking of
getting rid of my car; I am fed up with paying whopping insurance, plus
repairs, etc. (plus I am fed up with this whole insane pave-the-world
autoerotic culture of ours). Might get a small motorcycle, at 1/3 the
maintenance cost. I just rented out a room upstairs, effectively
cutting my rent in half. Point: do NOW the things that you might be
DRIVEN to do in a depression. As I think Davidson and Rees-Mogg (not
sure of that source) said in the how-to-prepare section of one of their
books: take in a recent immigrant as a tenant; then watch them and COPY
them (i.e. how they manage to scrape by on $450/mo and send the rest
back to fambly in the old country). Learn from the experts.


Leigh (6/8/99; 18:13:03MDT - Msg ID:7351): "A Lurker Steps Up To The
Table.... If Clinton and his thugs should confiscate gold, wouldn't gold
owners be able to sell it on the world market (and probably at better
prices)? That's assuming that the Bilderberger gang doesn't outlaw gold
worldwide. But then, how could they possibly do that?"

Great question, Leigh! (and welcome to the club, here!) No one offered
an answer to your question. I have wondered about this same matter,
myself. They cannot confiscate/outlaw gold EVERYwhere, can they? Seems
that that would require more draconian international coordination than
is really possible. So, for those of us who might like to trade some of
our gold for other things when it hits $2000/oz (or whatever), I guess this
means smuggling physical out of the country...


Golden Truth (6/10/99; 1:00:25MDT - Msg ID:7413):
"WE SHALL NEVER SURRENDER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"

Thanks for the exhortation. We all need bucking-up from time to time...
even the non-christians among us... :)

AELMichael's request#74256/10/99; 8:01:44

USAGOLD (6/8/99; 13:59:54MDT - Msg ID:7344): "Can any of our Y2K experts
here help me with how Europe stacks up against the United States in
remediation progress particularly in the banking/finance sector?"

Michael, here are some URLs that might be of use (these are NOT
well-screened, and not as (Europe-specific) as I would like; just some leads for you):

... also, here's a clipping (no URL) that might interest you:


The Year 2000 Bug Is a Menace, No Doubt About It

Jan 27, 1999 - International Herald Tribune

By: James P. Bond, coordinator of year 2000
operational initiatives at the World Bank

It is a startling fact that by next Jan. 1 most developing countries will
not have fixed their year 2000 computer problems. These threaten them,
along with neighbors and trading partners, with damaging consequences.

A World Bank survey of 139 developing countries found that only 35 percent
have a national plan to make systems Y2K-compliant. Last month, officials
from 120 countries gathered at the United Nations to discuss the problem
and agreed that their governments would assign it the "highest priority."

Having a national plan is only the first step. Carrying out such plans is
costly. Wealthy countries and large companies have the funds and skilled
people to immunize computers and operating software from the millennium
bug. Many developing countries do not.

Or they see the threat as vague and distant. Yet many developing countries
have regional sharing arrangements under which, for example, they rely on a
neighbor's electrical supply which uses computer microchips and software
that may not be Y2K-compliant.

Middle Eastern countries depend on computer-managed desalinization plants
for water. Oil drilling rigs around the world use embedded chip systems,
some of them buried on the ocean floor. Food and fuel distribution
networks, health care, education and road, air and maritime links could be
severely affected.

Emerging markets already weakened by capital flight could see their
recovery delayed as investors steer clear of companies which are not
Y2K-compliant. A worldwide interbank working group is conducting
assessments of Y2K progress in six key sectors, with a view to guidance in
making investment decisions. Many mutual funds are already avoiding
companies that do not have millennium bug action under way.

It is in emerging markets that the capacity to fix the bug is weakest. One
private-sector study found that companies in the worst affected East Asian
crisis countries have cut computer spending by more than 20 percent.

At the same time, these and other developing countries risk being further
undermined by a brain drain as high salaries and relaxed visa restrictions
in wealthier countries siphon off qualified computer experts just when
their skills are most needed at home.

The lack of interest in this issue is surprising. The millennium bug,
living mysteriously and unseen within the microchips and software of the
world's computer systems, could trigger a global catastrophe. The problem
is technical. Most of us are reluctant to acknowledge how much we depend on
technology, so political leaders have only recently been persuaded to take

Even if we can succeed in overcoming this resistance to accepting the
problem as serious, the challenge still looms large. It is already too late
for most developing countries to carry out enough Y2K preparations to avoid

Instead they should urgently devise contingency plans, identifying critical
sectors and systems water, power, food, health care, telecommunications,
transport, finance and trading and checking the bugs in them, while
preparing backup plans should these systems fail on Jan. 1.

Estimates of what it will cost to fix the millennium bug worldwide vary
greatly, but we can get some idea by analyzing what major players have
earmarked for the task. Chase Manhattan Corp. is spending $363 million, and
DuPont Co. $400 million, while the U.S. Education Department's projected
Y2K costs are $45.5 million

The World Bank, the OECD and a handful of donor countries such as Britain,
the United States, Canada and Italy, together with other multilateral
development banks and international private-sector organizations, have
undertaken an effort to raise Y2K awareness and mobilize technical
assistance and funds to help developing countries.

These efforts are extremely modest, given the enormity of the task and the
global impact of a failure to act. It is now obvious that next Jan. 1 will
unleash a chain of problems that will touch everyone on the planet, with
the most damaging effects hitting the least prepared, namely, governments
and businesses providing services to the world's poor.

Efforts by the World Bank, the United Nations and others can support some
Y2K fixing, but their most important effect should be a wake-up call to
national and local governments, companies and international organizations
to get involved in preemptive action now.

Developing countries must devise contingency plans for those vital systems
that are not yet Y2K-immune.

The writer, coordinator of year 2000 operational initiatives at the World
Bank, contributed this comment to the International Herald Tribune.

GoldflyJulia - "farang"#74266/10/99; 8:29:07

My bet is "Forienger"


Gandalf the WhiteJulia's question and Goldfly's answer --- and the return of The Stranger !#74276/10/99; 9:05:09

Yes, Julia, Goldfly is correct, "farang" is Thai for "foreigner", but not all non-Thai. -- Like, Japanese or Koreans, and many others are not referred to as farang. -- Quite easy to pick out the farang in Thailand, because of physical stature and method of dress, shall we say farang standout like sore thumbs.

Great to hear you again Stranger! -- Welcome back. -- Missed you.

Peter Asher***** Today's Gold Report *****#74286/10/99; 9:17:28

After hitting a new twenty year low of $257.00 in Asia, spot gold slowly and steadily rose in Europe. Rumors of New central bank sales by the none Eu countries of Greece, Sweden and Denmark, fueled the fires of the current selling panic that has seen gold fall more than 30 points since the Bank of England announced its pending gold auction. Greece, the 'prime suspect' in the latest episode of so far unrealized Central Bank sales, categorically denied any plans to liquidate any of their 106 tons.

As of 11:00 AM EDT. The Dow is down another 73.45 points and the S & P 500 is off 14.29 . This is the third down day for Wall Street after last weeks rally failed to approach the record highs set last month. Will this Bull Market end, "Not with a bang, but with a whimper"?

Spot gold has risen further in N.Y., now trading at $259.50, While those who have bought gold for trading profits continue to sell the precious yellow, those who buy gold to keep it are being given a historic opportunity to accumulate more of the worlds oldest form of investment. At this time, most technical analysis indicates a classic selling climax that could turn into a raging recovery at any moment. According to one London dealer``Market participants remain nervous and a substantial short-covering rally could notS be that hard to trigger,''

Stay in touch with this Forum throughout the day for further reports from other posters.QCa

Gandalf the WhiteHelp --- where is SteveH ? Went back to sleep after that early post ?#74296/10/99; 9:19:48

We need an update on the MKTS ! -- OK --
S&P down over 11 which means the the DOW should be down over a hundred points, but the PPT is still in there and it is only down a little more than 40 ! The long BOND is "tanking" and rates are setting up the FED to make an upward correction to rates and that will be the pin in the balloon to start the rapid deflating (POP) of the stock market. --- Gold is holding its own at this subterrian level and the COMEX "open interest" (OI) is taking off into the ionosphere. --- Can you all see the storm clouds gathering ? --- are those cumulus clouds ? --- can the Thunder be far behind ? --- Things are getting exciting. -- GET READY to rock and roll !!

Gandalf the WhiteGreat Mkt Report, Peter !#74306/10/99; 9:25:14

You really ment to advise that the Denmark, which has not yet joined the EU, was not going to sell any Au.
So much to remember!

Gandalf the WhiteDumb Wizard !#74316/10/99; 9:27:37

Sorry Peter, the "none" was a "non-" was it not?
Can not read straigh this morning.

Peter Asher(No Subject)#74326/10/99; 9:33:13

We recived this by E- mail

I am sending this post to everybody on my list because there is a real effort to keep the general public from seeing it. I don't know who is behind the removal but it has been posted at atleast tenother sites and has disappeared from everyone of them.
The place where it originated was the Naval War College and that site has been shut down one week after it published this report. If you are not concerned about what it says, just delete it from your message base.


TechnicianIs this the bottom?#74336/10/99; 9:37:35

Went long gold this morning. Good possibility we are seeing a reversal or least intermediate bottom. At least low risk.
Good luck fellow goldbugs.

Peter AsherGandalf#74346/10/99; 9:41:17

Your right, Non-, not none. Spellcheck doesn't catch that kind of typo, I'll have to start using the grammer fixing program. Ive avoided it because its a very arrogant and bossy electronic robot that thinks it's right all the time
Gandalf the White********(unique) MARKET REPORT************#74356/10/99; 10:15:10

*********MARKET REPORT**************
Before Noon NY Time --- June 10, 1999
As seen thru the eyes of any of the 5 Million
On-line Day Traders !! (This is one that
you have never seen before !!)
GREAT day at the NYSE !! Action is hot and
heavy and the top ten action stocks of the day are:
BDT up 33 % -- +1/2 at 1 13/16 on vol of 575K
NERX up 29% +5/8 at 2 5/16 on vol of 714K
ZOOM up 25% +3/4 at 5 9/32 on vol of 114K
ACEI up 22% +5/16 at 1 11/16 on vol of 415K
IGLC up 20 % +15/32 at 2 5/8 on vol of 450K
MLOG up 19% +11/32 at 2 5/32 on vol of 117K
WFR up 18% +1 1/2 at 12 1/2 on vol of 280K
MESG up 16% +2 3/16 at 13 9/16 on vol 880K
PLXT up 15% +2 3/4 at 22 1/8 on vol 253K
ARMHY up 15% + 4 1/8 at 32 1/2 on vol 470K

This is because the day traders are not watching
the BLOOD releasing from the other portions of
the market. Such things as:
DOW down 0.93% or - 99 points at 10,594
S&P down 1.17% or -15.5 at 1303.
NAS down 1.17% or -30 at 2489
R2K down 0.7 % or - 3.0 at 442
30 /yr bond interest rate at 6.6%
Now for the Goldhearts ---
XAU.X up 3 % at 61.60 having made a positive
reversal on the charts. ----- AND
GC9Q (Aug, Au) at 261.4 after having visited below
259 for a while.
MORE, Later IF you all can stand it !

Goldfly*******Today's Gold Report*******#74366/10/99; 11:06:34

Victory in Kosovo who's next?

Gold: 261.2 UP 0.10
Silv: 5.11 Up 0.09
Euro: 1.047 Up 0.10

After exploring new 20-year low territory overnight, gold has moved up this morning, August Gold is currently up 10 cents.

At a recent conference in Philadelphia, Alan Greenspan left a number of the crème de la crème of international banking with the idea that the U.S. may soon be raising interest rates for the first time in two years. The intent would be to keep inflation under control by making it harder to borrow Dollars. Many analysts would say such a move resembles closing the barn door after the horses have already bolted.

It was also reported that a number of the meetings participants voiced concerns about the softness the Euro has been experiencing. The Euro as been in an almost continual slide since it launched at the beginning of this year. The 'benign neglect' of the ECB has left currency watchers wondering just what the intent of the Europeans is toward their shiny new fiat.

On another note: The war on Yugoslavia appears to have reached an end. The Yugoslavian government has capitulated and troop withdrawal has begun. This begs the question however: Where will NATO go next? Rumor has it (a rumor has to start somewhere, right?), that riding the wave of victory in the Balkans, U.S. warplanes will begin bombing the cities and infrastructure of mainland China early Monday. The declared objective will be to dislodge the Chinese from Tibet, a country forcibly assimilated into the Chinese hegemony in the 1950's, and undergoing continual bouts of "ethnic cleansing." An unnamed military source is quoted as saying: "The embassy was just a warning shot, now we're gonna stick it to 'em good."

That's it for today fellow Goldkeisters. If there is any further developments, you're on your own. I've got work to do. Of course, I expect that this is not the last Market Report of the day. Tomorrow my report will be by a Guest Commentator, because you all are my connection to the Gold markets, and if I just repeat what you tell me- it's not much of a report, is it?


GoldflyCorrection....#74376/10/99; 11:11:14

The Euro UP should read 0.010
BCAEL and Leigh re:...#74386/10/99; 11:18:45

AEL (6/10/99; 7:43:13MDT - Msg ID:7424) "bits and pieces"
Leigh (6/8/99; 18:13:03MDT - Msg ID:7351) "A Lurker Steps Up To The Table....

I asked FOA and Michael similar questions back in May:... 1) about the possibility of confiscation or excessive taxation if/when gold goes to $10,000, and 2) how to liquidate some gold after the price of gold skyrockets, and the social situation has gotten chaotic. You can my original question here: BC (5/9/99; 10:53:27MDT - Msg ID:5807).

1) FOA felt the government will have to encourage the use of gold ownership to maintain stability in the country. See: FOA (5/9/99; 19:11:04MDT - Msg ID:5826)

2) Michael offered some thoughts for how things might unfold in the U.S. based on the crises that have occurred in some of the Asian countries. See: USAGOLD (5/9/99; 12:05:08MDT - Msg ID:5809)

Basically he feels that direct gold barter will be difficult, because most people don't know real gold when they see it. Instead, he suggests that entrepreneurs would probably set up exchange centers for gold redemptions.

Hope this helps.


TownCrier*******Today's Gold Market Report: *********#74396/10/99; 11:58:18

MARKET REPORT(6/10/99): Gold drifted down to test the $257 level in overnight trading, but received some "good
support" at around the $258 level when world gold trading found its turn in London. Support was found from some of the larger banks, although a trader noted that it remains a "sale" for one particularly large New York dealer at prices much above this point. Gold perma-bear Bill O'Neill, strategist with Merrill Lynch has predicted a low of $240 over the next three month period. Regarding today's action, one trader said. "It's definitely been good size changing hands. Maybe a large producer decided to dump it and lock in whatever they can."

On that note, we found this comment to be quite revealing. I suggest you read it twice: "I am long for the first time in a long time today. The price has got to stop somewhere and for the first time it looked like maybe the sellers were the wrong type and the buyers were the right ones,'' said one London dealer.

Central Banks of Greece, Denmark, and Sweden (three countries that remain outside the euro union) have denied recent and persistent rumors of gold sales. Panayiotis Pliatsikas, director of the foreign exchange department of the Bank of Greece added, "As you know, our foreign exchange reserves stand around $21 billion and there is no reason for us to sell gold." THAT, my fellow goldmeisters, is as close as it gets in officialdom to saying outright, "If we did find ourselves with a need to support our currency, we have $21 billion of other nations' money. That is A LOT of paper, and therefore, our gold holdings are quite secure-- they would be the last to go. Again, while the paper remains, there is no reason for us to sell gold." Amen, brother.

Russia, too, despite its weakened ruble has managed to hold tightly to its gold. Bridge reports from Moscow announced today that the foreign exchange/gold reserves of the Central Bank of Russia as of Jun 4 were at US $12 billion, unchanged from May 28. In other world news, Tokyo reports that the downturn in gold, coupled with a stronger yen has driven this week's gold prices below 1,100 yen per gram, a key psychological level, though it has not yet triggered massive bargain hunting by Japanese private investors as had been earlier expected by traders. Many investors are waiting for a further fall in retail gold prices in Japan before rushing to buy retail gold bars, they said.

On the financial scene, U.S. Treasury Secretary Robert Rubin said during Thursday's news briefing ahead of a weekend meeting of Group of Seven finance ministers in Germany that there are risks "in both direrctions" to the U.S. economy, and an ever-present need to watch inflation. We must ask ourselves, if the risks are in both directions, do we find ourselves upon a veritible "Razor's Edge", and what one element might be found to provide a measure of safety against falling off? Rubin also warned that the U.S. trade deficit could not be sustained indefinately, although the administration's preference for a strong dollar remained unchanged.

Y2K draws ever nearer, and Reuters reports that the White House joined Wall Street's top regulator on Thursday when
the President's "Council on Year 2000 Conversion" and the Securities and Exchange Commission (SEC) said they had developed a "Y2K survival kit." The kit is to help brokerage firms, markets, regulators and news media provide information to the public about Wall Street's Y2K readiness. Chairman of the White House's Y2K council John Koskinen said, "By joining together, we hope to reach the greatest number of Americans and answer any questions that they may have about how the date change could affect their financial accounts and transactions." I'm sure you join me in feeling glad that the White House has proved itself in recent years to be a trustworthy voice in an uncertain world. A-hem. (wink, wink)

As I go to "fetch this over to the server" (as MK always says), the spot price has drifted up during early New York trading, peaking above $260. At the moment, the world remains plagued with Y2K, currency devaluations, a heady stock equities market, rising oil, and a falling 30-year bond. Gold is currently priced at the enticing level of $259.40, while the DOW is down 140, the Nasdaq is down 43, and they can't give the long bond away even with interest rates now above 6.05%. Gold market analysts have commented that they hold doubts as to the market's ability to deliver physical gold under current demand. Time will tell the tale. That's it for today, fellow Goldmeisters. Enjoy the day!

In the latest News & Views, MK reportedly rambles through the many issues surrounding the gold
market and gives the reader a good, solid overview of what's happened in this topsy turvy
market of the last month or so. If you are looking for some short and sweet analysis as to
what is going in the gold market today from a multitude of sources, you'll like this
upcoming issue. It is promised to be a quick and interesting read. Please go to our ORDER FORM
(click on the "Info Packet" link near the top of this page) or call
Marie at 1-800-869-5115 for a Free Copy of News & Views -- the widely read monthly
newsletter -- and introductory packet on gold ownership.

Golden TruthTOWN CRIER BLOWS ME AWAY!#74406/10/99; 12:49:54

Excellent "Gold Market Report" i say absolutely marvelous as i got out of bed this morning i was saddened to think, that M.K would not be writing his market report. I truly enjoy your gold reports M.K just in case yon didn't know that! Yet Town Crier you provided me with a substitute so close to the genuine article that all i can say is "THANKYOU"
HopeingIITownCrier#74416/10/99; 13:13:30

Excellent Market Report

If possible, I don't know what your source was, could you
post a URL for the following.

"Gold market analysts have commented that they hold doubts as to the market's ability to deliver physical gold under current demand. Time will tell the tale."


TownCrierArgentine official sees no problem on debt finance#74426/10/99; 13:41:08

Undersecretary of Finance Miguel Kiguel said the country had issued $1.8 billion of a planned $2.9 billion in domestic debt, and also issued around $6.5 billion of $8.7 billion in international debt markets. The balance of the $17.5 billion requirement for 1999 will come from international loans and other sources.

"No problem." Right! Not as long as you can borrow from Rumpelstiltskin to pay the Piper...

TownCrierU.S. May import prices rise, export prices flat#74436/10/99; 13:54:10

The Labor Department said U.S. import prices rose 0.7 percent last month after a revised 1.0 percent increase in April that was previously reported as up 0.8 percent. May marked a third straight month of rising import prices, led by a continuing increase in petroleum costs.
Thanks for the support, Golden Truth. Toss in a "Goldmeister" here and a "Goldmeister" there and anyone can sound like MK. You give me too much credit! Thank you, Sir!

HopeingII, there is no URL to give for that comment. The information was obtained through personal conversation and e-mail contacts with people in The Biz. (and to think most people always thought "The Biz" referred to Hollywood... Nope. Gold is bigger)

TownCrierNY Precious Metals Review: Aug gold dn $1#74446/10/99; 13:55:50

By Melanie Lovatt, Bridge News
New York--Jun 10--After a jumpy
session, Aug gold settled down $1 at $260.10 per ounce. It had first
extended Wednesday's fall, moving to a fresh 20-year low of $258.50 in the
overnight session. It then managed to recoup its losses towards the middle
of the session, and then finally gave up its gains again right at the end.

"All the other precious metals continue to outperform gold -- gold is
anticipating a round of official sales from the UK then in future from the
IMF and Swiss," said Bill O'Neill, analyst at Merrill Lynch.
Aug gold had initially managed to rebound from this morning's 20-year
low, receiving strength from silver, a dip in stock and bond prices, and
continued weakness in the dollar against the yen.

One trader noted that gold had received some "good support" at around
the $258 level from some of the larger banks, although noted that as it
climbs much above this point, it remains a "sale" for one particularly
large New York dealer.
"There was very good selling of $260 puts and some option related
covering --this was the catalyst for today's bounce," said Caen. Also
helping gold was a denial from the Greek central bank that it had been one
of the market's recent featured gold sellers. The bank made the denial
after speculative reports Wednesday that Greece had made sales.

Some players are suggesting that gold has plunged in recent weeks not
only because of bearish sentiment ahead of the UK Treasury's first gold
auction Jly 6 but also because some central banks have been selling to
"get in" ahead of this date.
"Whether it's a central bank or large producer selling remains to be
seen," said one trader. "It's definitely been good size changing hands.
Maybe a large producer decided to dump it and lock in whatever they can,"
he added.
While some players fear a short-covering rally, given the dominance of
short positions, others nevertheless remain adamant that gold remains weak
and any rallies will be used as selling opportunities.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

HopeingIITownCrier#74456/10/99; 14:05:43

Thanks for the response
LeighWhat Did Josef Mean?#74466/10/99; 14:16:56

Thanks, BC, for your excellent answer to my confiscation question. I feel much more informed now. I am still in hope that someone will tell me how to buy Euros. Looks like they might be on the rise!

What do you guys think Josef the Gambler meant by a big day July 14? What's going to light the fire? Is everyone planning to be in place to watch?

Many thanks, from Leigh.

Gandalf the White******Closing Market Comments *********#74476/10/99; 14:19:11

Well the PPT is still alive and well, as they managed to push the S&P futures up at the end of the session to achieve a DOW recovery at the close of the trading day.
Most appropiately for the day traders, (and this is the whole truth also! ) -- ZOOM was the largest percentage winner today, up 35% -- +1 5/8 to 6 1/4 on 1.16 million shares. The Hobbits are now checking the stocks to see if there is a symbol of DUMP or DROP !!! -- That's it for the day, folks. (let's hope for better results tomorrow.)

TownCrierThe most important speech you will probably read all day#74486/10/99; 14:56:15

Remarks by Chairman Alan Greenspan...(this is not a link, just a blue heading)

Commencement address
Harvard University, Cambridge, Massachusetts
June 10, 1999

President Rudenstine, President Wilson, Harvard alumni, fellow recipients of degrees, your parents and friends: It is a distinct pleasure to join you in celebrating this milestone in American higher education, the 348th Harvard commencement.

We are here to honor the achievements and the promise of the members of the graduating class of 1999. To them, let me say: You are being bequeathed the tools for achieving a material existence that neither my generation nor any that preceded it could have even remotely imagined as we began our life's work. What you must shape for yourselves are those values that will enable you to thrive in a world that is becoming increasingly competitive and frenetic.

To the parents and friends of the graduating class, let me say: I had planned to offer you some useful investment advice but, in the end, was dissuaded. My staff informed me that those of you who in recent years have been paying Harvard tuition or have contributed to the endowment fund, must by now have little left to invest.

But clearly you have already made the best investment there is: education.

The creative abilities of this graduating class and their contemporaries will determine the future state of our cultural, legal, and economic institutions. The ideas these graduates create, and employ, will influence the degree of American prosperity in the twenty-first century.

The quintessential manifestations of America's industrial might earlier this century--large steel mills, auto assembly plants, petrochemical complexes, and skyscrapers--have been replaced by a gross domestic product that has been downsized as ideas have replaced physical bulk and effort as creators of value. Today, economic value is best symbolized by exceedingly complex, miniaturized integrated circuits and the ideas--the software--that utilize them. Most of what we currently perceive as value and wealth is intellectual and impalpable.

The American economy, clearly more than most, is in the grip of what the eminent Harvard professor, Joseph Schumpeter, many years ago called "creative destruction," the continuous process by which emerging technologies push out the old. Standards of living rise when incomes created by the productive facilities employing older, increasingly obsolescent, technologies are marshaled to finance the newly produced capital assets that embody cutting-edge technologies.

This is the process by which wealth is created, incremental step by incremental step. It presupposes a continuous churning of an economy as the new displaces the old. Although this process of productive obsolescence has ancient roots, it appears to have taken on a quickened pace in recent years and changed its character. The remarkable, and partly fortuitous, coming together of the technologies that make up what we label IT--information technologies--has begun to alter, fundamentally, the manner in which we do business and create economic value, often in ways that were not readily foreseeable even a decade ago.

Before the advent of what has become a veritable avalanche of information technology innovation, most twentieth-century business decisionmaking had been hampered by dated and incomplete information about customer preferences in markets and flows of materials through a company's production systems. Relevant information was hours, days, or even weeks old. Accordingly, business managers had to double up on materials and people to protect against the inevitable misjudgments that were part and parcel of production planning. Ample inventory levels were needed to ensure output schedules, and backup teams of people and machines were required to maintain quality control and respond to unanticipated developments.

Of course, large remnants of imprecision still persist, but the remarkable surge in the availability of real-time information in recent years has sharply reduced the degree of uncertainty confronting business management. This has enabled businesses to remove large swaths of now unnecessary inventory, and dispense with much programmed worker and capital redundancies. As a consequence, growth in output per work hour has accelerated, elevating the standards of living of the average American worker.

Intermediate production and distribution processes, so essential when information and quality control were poor, are being bypassed and eventually eliminated. The proliferation of Internet web sites is promising to alter significantly the way large parts of our distribution system are managed. Moreover, technological innovations have spread far beyond the factory floor and retail and wholesale distribution channels. Biotech, for example, is revolutionizing medicine and agriculture, with far reaching consequences for the quality of life not only in the United States but around the world.

The explosion in the variety of products of many different designs and qualities has opened up the potential for the satisfaction of consumer needs not evident even a decade or two ago. The accompanying expansion of incomes and wealth has been truly impressive, though regrettably the gains have not been as widely spread across households as I would like.

How is this remarkable economic machine to be maintained, and how can we better ensure that its benefits reach the greatest number of people?

Certainly, we must foster an environment in which continued advances in technology are encouraged and welcomed. If the graduates of 1999 are going to be able to build on the accomplishments of their forebears, many of them must push forward to expand our knowledge in science and engineering, and our universities must ready themselves to meet the technical needs of our students yet to come.

But scientific proficiency will not be enough. Skill alone may not be sufficient to move the frontier of technology far enough to meet the many challenges that our nation and educational system will confront in the decades ahead. And technological advances alone will not buttress the democratic institutions, supported by a rule of law, which are so essential to our dynamic and vigorous American economy. Each is merely a tool, which, without the enrichment of human wisdom, is of modest value.

A crucial challenge of education is to transform skills and intelligence into wisdom--into a process of thinking capable of forming truly new insights.

An agile young mind has the facility to solve a complex set of equations. But that mind must be broadened if it is to make effective use of that solution to meet human needs. There is little doubt of the relationship between our ability to think creatively and our productiveness as individual members of society.

The roots and nature of how the human mind innovates, however, have always been subject to controversy. Yet, even without indisputable evidence, there has been a remarkable and pervasive assumption that the ability to think abstractly is fostered through exposure to philosophy, literature, music, art, and languages. A liberal education was presumed in years past to produce a greater understanding of all aspects of living--an essential ingredient for broadening one's world view. I believe it still does.

Viewing a great painting or listening to a profoundly moving piano concerto produces a sense of intellectual joy that is satisfying in and of itself. But, arguably, it also enhances and reinforces the conceptual processes so essential to innovation.

Specifically, the broadening of one's world view that is acquired through a liberal education almost surely contributes to an understanding of the interrelationships of different fields of endeavor. Important new knowledge is very often the result of such interdisciplinary observation. The broader the context that an inquiring mind brings to a problem, the greater will be the potential for creative insights that, in the end, contribute to a more productive economy.

But learning and knowledge--and even wisdom--are not enough. National well-being, including material prosperity, rests to a substantial extent on the personal qualities of the people who inhabit a nation.

At the risk of sounding a bit uncool, I say to the graduating class of 1999 that your success in life, and the success of our country, is going to depend on the integrity and other qualities of character that you and your contemporaries will continue to develop and demonstrate over the years ahead. A generation from now, as you watch your children graduate, you will want to be able to say that whatever success you achieved was the result of honest and productive work, and that you dealt with people the way you would want them to deal with you.

Civilization, our civilization, rests on that premise. It presupposes the productive interaction of people engaged in the division of labor, driven--I cannot resist the jargon--by economic comparative advantage. This implies mutual exchange to mutual advantage among free people. Coercive societies and coercive relationships among people rarely enhance the state of what we call civilization.

I presume that I could offer all kinds of advice to today's graduates from my half-century in private business and government. I could urge you all to work hard, save, and prosper. And I do. But transcending all else is being principled in how you go about doing those things.

It is decidedly not true that "nice guys finish last," as that highly original American baseball philosopher, Leo Durocher, was once alleged to have said.

I do not deny that many appear to have succeeded in a material way by cutting corners and manipulating associates, both in their professional and in their personal lives. But material success is possible in this world and far more satisfying when it comes without exploiting others. The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.

I cannot speak for others whose psyches I may not be able to comprehend, but, in my working life, I have found no greater satisfaction than achieving success through honest dealings and strict adherence to the view that for you to gain, those you deal with should gain as well. Human relations--be they personal or professional--should not be zero sum games.

And beyond the personal sense of satisfaction, having a reputation for fair dealing is a profoundly practical virtue. We call it "good will" in business and add it to our balance sheets.

Trust is at the root of any economic system based on mutually beneficial exchange. In virtually all transactions, we rely on the word of those with whom we do business. Were this not the case, exchange of goods and services could not take place on any reasonable scale. Our commercial codes and contract law presume that only a tiny fraction of contracts, at most, need be adjudicated. If a significant number of businesspeople violated the trust upon which our interactions are based, our court system and our economy would be swamped into immobility.

It is not by chance that in nineteenth century America, many bankers could effectively issue uncollateralized currency because they were able to develop a reputation that their word was their bond. For these institutions to succeed and prosper, people had to trust their promise of redemption in specie. Now, as then, a contractor with a reputation for shoddy work will not prosper long.

In today's world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward. Manufactured goods often can be evaluated before the completion of a transaction. Service providers, on the other hand, usually can offer only their reputations.

The extraordinarily complex machine that we call the economy of the United States is, in the end, made up of human beings struggling to improve their lives. The individual values of those Americans will continue to influence the structure of the institutions that support market transactions, as they have throughout our history. Without mutual trust, and market participants abiding by a rule of law, no economy can prosper.

Our system works fundamentally on individual fair dealing. We need only look around today's world to realize how rare and valuable this is.

While we have achieved much in this regard, more remains to be done. Considerable progress, for example, has been evident in recent decades in the reduction of racial and other forms of discrimination. But this job is still far from completion.

A free market capitalist system cannot operate fully effectively unless all participants in the economy are given opportunities to achieve their best. If we succeed in opening up opportunities to everyone, our national affluence will almost surely become more widespread. Of even greater import is that all Americans believe that they are part of a system they perceive as fair and worthy of support.

Our forefathers bestowed upon us a system of government, and a culture of enterprise, that has propelled the United States to the greatest prosperity the world has ever experienced.

Today's graduates from Harvard and other schools are being passed the standard to carry forward our traditions. I know you will improve upon this inheritance in ways that we have yet to imagine.

I offer you all my congratulations and wish you success in your chosen careers. You honor me by listening to the musings of an old, idealistic, central banker.

AELThanks, BC#74496/10/99; 16:06:11

I checked those posts.

Michael writes: "If the breakdown proceeds to crisis proportion and there is no reliable mail system, telephone, banking system, you will be forced to exchange gold in your local area with a local vendor. DO NOT EXCHANGE ANY MORE GOLD THAN YOUR DAILY OR WEEKLY NEEDS REQUIRE."

No, indeed. And that is another reason to stockpile
EVERYTHING to last for many months, or even years. Set yourself up so you need not go out shopping!

BTW: I have read in several places that when currencies
are devalued, typically the (metal) coinage does *not* get devalued; i.e. it becomes effectively super-valued; hence
the advice to stockpile clad coinage. Any truth to this? Ideas? Thoughts?

TownCrierCurrency tea leaves#74506/10/99; 16:07:02

Most IMM currency futures end higher
BCAEL (6/10/99; 16:06:11MDT - Msg ID:7449)#74516/10/99; 18:07:30

AEL: "...No, indeed. And that is another reason to stockpile EVERYTHING to last for many months, or even years. Set yourself up so you need not go out shopping!"

I agree. The bottom line is that no one really knows what options will be available to us. I would guess that making typical Y2K preparations would be the best bet strategy for now, even if Y2K wasn't coming. Have some stuff to barter, have some gold, have some local currency, and put away some general supplies for yourself and family to get through the rough spots.

AEL: "...BTW: I have read in several places that when currencies are devalued, typically the (metal) coinage does *not* get devalued; i.e. it becomes effectively super-valued; hence the advice to stockpile clad coinage. Any truth to this? Ideas? Thoughts?"

I assume that gold coinage will appreciate significantly. Certainly, that's what everyone here has been talking about for so long. However, since you say simply "metal coinage," are you referring to the typical U.S. nickels, dimes and quarters becoming super-valued? If so, I've never thought about that or ever heard from anyone that that's the case.

Obviously, the silver coinage will hold it's PM value. The other coinage, the stuff we carry around as pocket change, that to me seems to be almost worthless, even now.... meaning: there's not much you can buy today for less than a buck that's any good. <g>

If you have any references about this "super-valuation" idea that you can pass along, please do. I'd like to read up on it.

Thanks. BC

Gandalf the WhiteAEL # 7449#74526/10/99; 18:08:09

comments on "clad coinage" --- IMHO, worth just the same as if coins were made of paper ! The reason that coins became valuable in the past was that they were made of 90% silver, and were replaced with the near worthless clad coins. Twil be the same value as "Apple II" computers today, -- "Boat anchors" as they are refferred to in the local slang.

mike55Alan Greenspan's Commencement Address#74536/10/99; 20:19:12

TownCrier - Thanks for posting AG's speech. Personal opinions of AG and his policies aside, and notwithstanding whether he "walks the talk", I felt this was a great address as it encompassed so many areas. I was ready to stand up and sing "God Bless America" half way through the speech! Seriously, the concept of integrity he espouses for individuals and societies needs to be continually driven home in our schools, just as we do in our personal lives with family and friends. I'll throw in my two cents [in brackets] on some of his points:

"Of course, large remnants of imprecision still persist, but the remarkable surge in the availability of real-time information in recent years has sharply reduced the degree of uncertainty confronting business management. This has enabled businesses to remove large swaths of now unnecessary inventory, and dispense with much programmed worker and capital redundancies."
[The double-edged sword of lean production systems -- improved productivity versus employment levels. I won't get into tight systems and JIT inventory and the effect possible Y2K disruptions may have on economies.]

"A generation from now, as you watch your children graduate, you will want to be able to say that whatever success you achieved was the result of honest and productive work, and that you dealt with people the way you would want them to deal with you."
[AG's version of the Golden Rule without saying the 'G' word?]

"This implies mutual exchange to mutual advantage among free people. Coercive societies and coercive relationships among people rarely enhance the state of what we call civilization."
[Beyond the comment on civilizations, a slightly veiled reference to free-trade without protectionism?]

"It is not by chance that in nineteenth century America, many bankers could effectively issue uncollateralized currency because they were able to develop a reputation that their word was their bond. For these institutions to succeed and prosper, people had to trust their promise of redemption in specie."
[Ah yes, that trust in fiat currency.]

"The individual values of those Americans will continue to influence the structure of the institutions that support market transactions, as they have throughout our history. Without mutual trust, and market participants abiding by a rule of law, no economy can prosper."
[Does this mean the PPT is a good thing?]

"I know you will improve upon this inheritance in ways that we have yet to imagine."
[I know how I'm improving the inheritance for my family and future paper for metal whenever I am able!]

Richard, OregonGolden Truth (6/10/99; 1:00:25MDT - Msg ID:7413)#74546/10/99; 20:48:17

GT - thanks for you inspiring words of truth this morning. I needed to hear those words.
Richard, OregonGandalf the White, Please!#74556/10/99; 21:11:39

Gandalf - We've not spoken directly for some time. I think you may be the one to help me out with this thought. I'm trying to put together for myself a list of, for lack of a better term at this time, "common sense " statements, thoughts, etc., regarding investing ones hard earned money (again, for lack of a better term at this time).

The only one I have so far is buy low, sell high (not very creative I know). But what I'm looking through are ideas like 1)If gold today were say $300 would I be buying or selling? 2)What if it closed at $350 today, again, would I be buying or selling? If I would be buying at those prices, because I really believe it will go much higher, 3)What would I be inclined to do if today's close was say $265? Should I be counting my blessings or pacing the floor? Should I have a grin from ear to ear, or should my chin be on the floor?

There's got to be some common sense statements to further this train of thought. Am I making any sense? I just can't seem to get off dead center with this, yet it's bugged me all day. Do I make any sense? Thoughts? Help me build on this, please!

The StrangerResponse to ET, Goldfly and Gandalf#74566/10/99; 21:17:11

ET- Hello, my Oklahoma friend, and thank you for your greeting! You asked if I think Volcker's Fed action was an attempt to salvage the dollar economy and still not
move back to a gold standard? Do I think this is still possible today, and didn't someone mention awhile back that the Euro's creation was directly caused by a lack of alternatives to a dollar based economy?

When Volcker was named to the Fed chairmanship, the dollar had been made unsound by years of excess money growth. Knowing full well that reversing that growth would throw MILLIONS of Americans out of work, he couragously charged ahead and did it anyway. Yes, the result has been eighteen years of a relatively sound dollar achieved without the backing of gold. So, IT CAN BE DONE.

But circumstances today do not compare well with the Volcker period, in my opinion. They are much more similar to the Arthur Burns Fed of the early '70s. Then, as now, the money supply was allowed to grow rapidly. I am not here to argue whether the recipe was well-advised, either then or now. But I do suggest that we have been baking the same cake.

As to your final question, ET, yes, I recall that creating an alternative reserve currency was part of the rationale behind the Euro. However, while the Euro may be temporarily oversold, so inchoate a currency can hardly be considered the equal of the U.S. Dollar. Furthermore, let us not forget that Euroland is comprised of some of the world's most unabashed welfare states, while America sports the free-est economy on the planet. (For background on the sorry history of European union, check out my post on the subject dated 4-26-99. You may also be interested in my post #5056, dated 4-23-99).

Goldfly- what a warm and generous welcome you have given me. I must confess, I had not expected to be back so soon. Having thought we had seen the bottom of the market, I felt it would be a long time before I would have anything else to contribute. Circumstances proved otherwise. Anyway, thanks for your warm regards. You are a true friend.

Gandalf- Thank you, as well, amigo. I hope the Hobbits are ready for the turnaround. What am I saying? I KNOW they are!

All- Do not underestimate the importance of the Japanese GDP numbers. Japan was the last remaining geographic pocket of deflation in the world. Now, even that is gone. Some of you may recall that I, myself, have a large bet on Japan. Stocks there should now come alive like desert flowers after a spring rain. Reinflation, it seems, is "busting out all over".

SteveHAugust gold now...#74576/10/99; 21:27:20

Gandalf the WhiteRichard of OR (Re: Msg ID:7455)#74586/10/99; 23:07:13

Thou saith:
"Gandalf - We've not spoken directly for some time. I think you may be the one to help me out with this thought. I'm trying to put together for myself a list of, for lack of a better term at this time, "common sense " statements, thoughts, etc., regarding investing ones hard earned money (again, for lack of a better term at this time).
*****Thank you Richard! The Hobbits are saying that my hat size is increasing. Common cents, I have many, and I shall try to answer your needs. BUT, if I may, please if you would pay extra attention to the postings of the likes of: The Stranger, Aristotle, MK and Aragorn III for the deeper thoughts on most of your subject matters. PeterA is also my "PNW guru" of note. -- OK, OK --- here are my thoughts.
"The only one I have so far is buy low, sell high."
*****That has been overdone and is a salesman's ploy.
My thought is: "Buy only if you can afford to, and something that you can use to make your life more secure and rewarding. Somethings you may never sell. IF there is opportunity for a profit, determine if you have a better item to purchase that will provide better security or potential for greater profit. These decisions are where you win some and lose some, but learn at each occurance.
"But what I'm looking through are ideas like:
1)If gold today were say $300 would I be buying or selling? 2)What if it closed at $350 today, again, would I be buying
or selling? If I would be buying at those prices, because I really believe it will go much higher, 3)What would I be inclined to do if today's close was say $265? Should I be counting my blessings or pacing the floor? Should I have a
grin from ear to ear, or should my chin be on the floor?
********Any price of $300. per oz. OR less is like free gold in my mind. If you were to be the one having to produce the gold from the ground, what would it cost you to do so? I know many that have spent fortunes trying to produce gold from the land, rivers and sea, and not received much in return. I also know of some that were indeed lucky to find the "mother lode" and did have much gold at a relatively cheap expenditure. But, most of those just tried to parlay it into more and ended up with nothing. One can not giveup on gold at any price below $300. That is what the "Shorters" want to happen. That is why the "talking heads" continue to poopoo gold as a antique of bygone eras. Look at who is buying physical gold now. We can confirm that citizens of the USofA and Canada are buying gold, from the announcements of the expanding mint's sales and shortages in coin blanks for production. We have also heard of large increases of public consumption of gold in places like India. You too should have a portion of your "savings" or investments in physical gold. Please do not "bet the farm" as I have been known to say, but some of your funds should be planned to be set aside in physical gold, and retained until it is needed, whenever that may be. One does not now know when that need may be, BUT when it arrises, you will then be prepared. I can tell you of true stories told to me by a number of SE Asians that saved their lives and those of their family with the use of gold. You may not need it in that way, here in the USofA, but it is possible that you could someday find yourself in a great need, that only the stash of gold coins will satisfy.
Finally you ask: "Do I make any sense? Thoughts? Help me build on this, please!"
*****Yes, you indeed do make sense !! AND you have done more than the majority of sheeple, you have thought about this and ask questions to better understand it. BTW, have you ever heard a "negative type saying" that used an ending with the word "gold" ? Think about that! look at any rainbows lately? Well I hope that this long sequel to all the other great posters at this site answers some of your doubts. Think about this and then if you have some of those dead Presidents pictures on green paper laying about, use some to get the REAL stuff, physical Au.

Peter AsherGandalf ??#74596/10/99; 23:21:05

Thank you for what I'm sure is a compliment, but what does PNW stand for ?
Gandalf the WhitePNW#74606/10/99; 23:30:29

OOPS -- Peter, your eastern heritage is showing. The Pacific Northwest is known as this great green corner of the lower 48. One knows that the Northwest US is what those of MN and surrounds call home. And, when I lived in Northern Virginia and worked in DC, I had to be sure not to say that I was from Washington, as no one thinks of the PNW being the Washington that I ment. -- Sorry, to have used the colloquial slang.

Peter AsherRichard#74616/10/99; 23:44:51

I have come to see gold as something to have and to hold as the foundation for the surviving of calamity, not as a via for earning a profit. Per post #1853 of 1/17, <<When money is in a passbook or a CD, it is a bit loose. It's a bit tempting when you see that ad for that beach lot, mountain cabin or BMW. But gold —Gold says, "Leave me alone. I will be here when the need is the greatest.">>

There are IMO, some ideal long term investment opportunities in our immediate area in timberland and vacation rental,(or survival) property. But first, build that foundation with gold coins.

Peter AsherSchool shootings#74626/11/99; 1:27:35

This subject has been disscused here, so I am forwarding this article from Insight Magazine. Excerpt follows --

. . . A great deal has been written about all of these cases. There have, however, been no indications that all of these children watched the same TV programs or listened to the same music. Nor has it been established that they all used illegal drugs, suffered from alcohol abuse or had common difficulties with their families or peers. They did not share identical home lives, dress alike or participate in similar extracurricular activities. But all of the above were labeled as suffering from a mental illness and were being treated with psychotropic drugs that for years have been known to cause serious adverse effects when given to children.

SteveHI wrote this to a friend ...#74636/11/99; 3:07:35


The article I attached below explains gold is the unofficial reserve,
if you will, of most major Central Banks. As such, it may appear to
the 'average Joe or Jane' as JUST a commodity but alas, it is not.
Gold is currently ending an 18 year bear market. The potential upside
for it is phenomenal ($600 +). Many hedge funds have shorted it beyond
belief (perhaps because of the long bear) and are now unable to
payback gold loans with gold, leaving default, payback in Euros or
dollars as the only possible means. What we are in the midst of
witnessing currently is the unwinding of these large gold-short
positions but the players are finding that impossible to do without
systemic risks to their organizations.

Some have said that gold rises
in the east and sets in the west. By looking at the price of $259.50
spot currently you can see it is setting. The East, including major
oil producers and Europe, don't care for dollar dominance and want
gold back to its 'official' reserve status. As that didn't seem a
likely outcome, I believe, they backed the Euro with 15% gold backing
and brought the Euro on line to ultimately compete with the dollar.

This competition is what is dominating the world currency markets
currently and what appears to be behind the meteoric rise in the 30-yr
or long bond yield to above 6.07% today, which is putting downward
pressure on US stock markets. So we have these facts:

Gold is still more than a commodity, rather a crucial stich in
financial fabric.

Euro is competing with dollar for Reserve currency status.

Dollar is at all time high.

Gold at an all time low.

Paper gold is more shorted than ever before in history on Commodity
markets worldwide.

Physical gold is at highest demand in history.

US Stock market is at an all time high.

Triad of 'flight to safety' or safe havens are stocks, bonds, gold.
Currently money is in non-gold stocks and bonds, not gold.

Smart money and Eastern countries have been vigorously accumulating
physical gold.

Warren Buffet, some say is the worlds most astute investor, recently
bought 120 million ounces of silver (and some think gold too, quantity

When you add up all these interesting areas, I personally can only
conclude that it is wise to look at gold and gold related investments
as a once in a life-time opportunity. Since we both grew up in the
70's we can remember gold's meteoric rise to over $800 in January of
1980. The same market forces at play then are amplified even more now
simply because their are significantly more dollars chasing a rare and
in-short-supply gold, which is suspected to be short sold to the tune
of 14,000 tons currently. What this spells out to me is gold has the
potential to rise to over $600 per ounce, if not more. If it does what
it did from 1971 through 1980, then gold could go higher still, maybe

The word on the 'gold' street is that it is at or near bottom. That is
what makes it such a unique opportunity. Some long-time gold pundits
believe that when gold rises it will be meteoric. They say that if you
aren't attached to the meteor that it will be almost impossible to
catch. It rise will be fifty to hundreds of dollars per day. If I
hadn't seen it rised myself in 1980 over 25 times, I would find my own
words hard to digest, but I saw it, I was there. So were you. I
believe it is about to happen again.


Rumors again state that gold could rise anytime now. The pressures on
it are mounting daily. Since its popularity is at 17% currently
(another record low), virtually nobody is positioned in it. Only the
smart money is in it. So when it goes it will blind-side everyone such
that they will say, "Geez, I wish I had got me some of that. Why the
heck wasn't I paying attention?"

Finally, the reason gold is about to snap into focus is simply, flight
to safety. With a stock market with only one place to go, down;
foreign markets rebuildiing and demanding more resources and
commodities; the Euro vying for reserve currency status; and inflation
and bond yields on the rise; and ultimately the current 10-14,000 ton
short paper position on gold with absolutely no physical gold
available except that which is central bank vaults to pay back these
gold-short positions, gold will rise quickly. Only those positioned
ahead of time will catch the shooting star. Now that you are made
aware, are you ready? Remember gold rises in the East and dawn is
near. The sky is brightening as this is written.

Gold's Role in the Monetary System

The WGC recently urged IMF leaders to lift their ban on member
countries' 'pegging' their currencies to gold.

In a speech to participants at a two-day meeting in New York,
organised by the Re-inventing Bretton Woods Committee, and attended by
senior officials of the IMF, the World Bank, the European Central Bank
and other national central banks, the Council said that efforts by the
IMF to demonetize gold had largely failed and gold was still the
second most valuable component in official sector reserves - behind
only the dollar - accounting for 16% of the total.

Excerpts from the Council's presentation follow:

"The result of the demonetisation attempt was to institutionalise
the hegemony of the U.S. dollar. The advent of the euro upsets this
stability. In this new environment, some would say that gold should be
put back on the agenda of those seeking to produce the blueprints for
the new financial architecture. Our contention, however, is that gold
has never been away - you have only to look at its continued role as a
major central bank reserve asset to accept that."

"Why should a Fund member not be allowed to link its currency in
some way to gold if it so wants? Currently Article IV 2(b) forbids
this. The move 25 years ago to "abolish" gold was designed to enthrone
the SDR instead. The SDR has not, however, succeeded in establishing
itself as a genuine international reserve asset. In such circumstances
there should surely be no reason why gold is precluded from competing
on all fours with other reserve assets. For the Fund to outlaw it in
the Articles is an outmoded restriction."

"One lesson from history was that international monetary
arrangements can and do change and the coming of the euro provides an
obvious opportunity to reconsider the whole system."

"For the last half-century the dollar has been the hegemonic
currency. Why? To start with - let us not forget -because of its
explicit gold link. Subsequently, because there was no possible
competitor and the U.S. was, after all, the strongest economy - and
possessed the most liquid capital markets - in the world."

"With a single hegemonic currency there were not many choices to
make. Now, there are two potentially equal reserve currencies - the
dollar and the euro. Although the combined capital market of the EU-11
is not yet as large as that of the U.S., it is still dramatically
larger than any of the previously individual European markets. Any
central bank looking to diversify its reserves now has a real

"But one thing seems fairly clear. Now that countries have a
genuine choice between two global currencies, there are likely to be
significant moves in and out of them as sentiment ebbs and flows."

"Can the world live with competing currencies or will one
eventually become supreme? Or might gold, as a recognised store of
long-term value, stage a comeback on the international monetary scene?
It is probably worth noting here that all previous reserve currencies
(including, at the outset, the SDR) had some kind of link with gold."

"The problem with hegemonic currencies (be it the dollar or the
deutschemark) is that they are run purely for the benefit of their own
domestic economies, not for the benefit of any other country which
chooses to peg to them."

"Gold is the only external asset which is no one else's
liability. Now that we have the euro, some countries may decide to
take the relatively simple decision to define their basket as some
weighted combination of that currency and the dollar in order to hedge
their bets. An even more effective hedge, however, can be constructed
by incorporating some gold. Studies suggest that the volatility of a
central bank's reserve asset portfolio is reduced, and the risk/return
balance enhanced, by holding anything up to 20% in gold."

"Most central banks do not see it as their business to take
risks. By incorporating gold into both a currency basket used for
exchange rate management purposes and a reserve asset portfolio,
volatility is reduced and the risk/reward picture improved."

"Which brings us back to the IMF and - as we would contend - its
no-longer-justified prohibitions on various potentially useful roles
for gold. The IMF's own gold holdings - 103 million ounces, make it
the world's third largest single holder. In 1995, the Executive Board
held a long and thoughtful discussion on the subject and came to some
important conclusions. These included the view that gold provided a
fundamental strength to the IMF's balance sheet, and the Board felt
that the Fund should continue to hold a relatively large amount of
gold among its assets, not only for prudential reasons but also to
meet unforeseen contingencies."

"Nothing has happened in the outside world in the last 4 years to
invalidate these judgements. Indeed, given the systemic uncertainties
caused by the arrival of the euro, there are surely all the more
reasons for the official sector to preserve its gold holdings and
actively consider ways in which its real value can be utilised in this
brave new monetary world."

25 February 1999
Copyright © 1999 World Gold Council. All Rights Reserved
Contact: Dick Ware, Centre for Public Policy Studies
World Gold Council, London.
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Reprinted by permission of World Gold Council. Further reproduction
requires permission by World Gold Council.
Addendum from USAGOLD:
USAGOLD (2/24/99; 09:19:09MDT - Msg ID:2700)
Today's Gold Market Report: Backwardation, Gold Eagles Availability
Dries Up, Inside the World Gold Council Appointment of Haruko Fukuda
MARKET UPDATE (2/24/99):

The World Gold Council today appointed Haruko Fukuda chief executive
officer. Fukuda, a graduate of Cambridge University in Britain, takes
the reins at a time when the Council is attempting to recover from
budget cuts associated with reduced support from the mining industry.
There is a split in the mining industry between firms which make
substantial profits hedging and forwarding their metal and those that
take a more traditional approach to their mining activities. Many in
the gold industry feel that the advanced hedging and forwarding
strategies have worked to keep the metal's price in check -- a long
term negative for the industry.

In the press release announcing Fukuda's appointment, Don Morley, the
Council's chairman, stated that, "We have recently refocused the
organization's priorities. We believe those changes, and in particular
the new leadership that will be provided by Miss Fukuda, will generate
the basis for increased support from the world's gold producers."

What are these "refocused priorities?" A reliable source close to the
situation tells USAGOLD that the World Gold Council has changed its
emphasis and budget away from jewelry issues to economic priorities
revolving central bank holdings and investor issues.

"We want gold," says this source, "to be understood as a currency not
as a commodity and this is the direction that the Council is taken.
Fukuda's appointment reflects that change. Shrewd investors both
institutional and individual have begun to look at gold as a portfolio
holding and a currency hedge in view of what's going on in the world
economically -- the Brazils, the Indonesias, the Russias -- and are
diversifying accordingly. Diversification becomes the key and that
balance requires alternative assets like gold."

"In addition," he went on, "the council will take an aggressive
approach in educating the central banks about the holding of gold as a
reserve asset. The younger central bankers have taken a view like any
commercial or merchant banker by simply seeking the best return. This
has led to the mobilization of reserves that may not be in the best
interest of that country in the long run. We are asking: 'What
happened to the central bank mandate to protect the value of the
currency and the assets of the country?' With Fukuda's grasp of
international finance, we hope to educate central bankers about the
future role of gold in central bank portfolios."

And how will this "generate the basis for increased support from the
world's gold producers?"

"There has been a renewed enthusiasm, " says our source, "for the
traditional view of gold within some of the top mining companies. This
view is being translated to World Gold Council philosophy and
operations as you can tell from some of my previous statements. The
growing opinion is that we should rally around gold as an industry. We
feel that the appointment of Ms. Fukuda is a step in that direction."

SteveHAugust gold now...#74646/11/99; 3:13:41


Looking at the daily gold chart, I see a one-half leg V. Now if we have 30-days of rising gold prices that would complete the V wouldn't it. Here's hoping (gulp puff...hack...hack...don't smoke...sorry)

TomcatPeter Asher: Who will inherit our gold?#74656/11/99; 5:37:53

Peter, your post on the school violence was very appropriate. For many of us, a reason to hold gold is to have something to pass to our children. Unfortunately, many of our children are being undermined through school induced drugs like Ritalin and Prozac. I looked into 9 massacers and every one of the gunman had been connected to a psychiatrist or psychologist who had them on drug/medications. The source of those drugs is the psychiatrist/psychologist community which on the surface looks sane but their final product is what you see coming out of the schools today. I know that that is an unpopular thing to say about the psychiatrist/psychologist community but they are the source of the school drugging.

Even if your child is not on Prozac or Ritalin, the chances are your childs friends are on one of those drugs. How is a drugged child going to grow up strong enough to follow our footsteps associated with liberty, soveriegnty, entrepreneurship and gold? Do we want our children to be passive drugged sheep?

I home school my son, who by the way, earns his own money and whose savings is in gold!

Home school. Get you some!

Cavan ManTo SteveH#74666/11/99; 7:33:57

Please accept my personal thanks for all of your hard work at this FORUM. I am learning much from you and others.
mike55Tomcat & Peter Asher#74676/11/99; 7:46:28

Thank you both for your excellent postings. I know who will inherit my gold, and they are certainly deserving of it.

I know children who have been helped by Ritalin when the dosage is controlled and properly administered. Unfortunately, many of the prescriptions written for drugs such as Ritalin and Prozac for children are a sad commentary on our medical field, parenting, and our society in general. It is indicative of the attitude of instant gratification and the search for a quick-fix that is so pervasive in our society that leads doctors and parents alike to support this epidemic. Remember, this is occuring with parental permission.

Many children who are starved for attention will tend to "act out" to gain it -- they are children -- that's what they do. Many parents, too busy chasing the material world or whining about not having enough time for "me", direct their children to the electronic companions of video games and television. Is it any wonder why childrens' attention spans are eroded without time taken for reading, conversation, and thought?

While we don't home school our three sons, their primary moral education is received at home and reinforced at parochial school. The results are most promising as we have a 17, 15, and 12 year old who are among the most intelligent, polite, honest, and decent kids you will meet (note: parental license taken here). The boys have also been given a start in their wealth building with gold, and they continue to add to it with a portion of their modest allowances.

Take heart, be positive -- the future is bright! There are many, many young people out there who are being raised properly and have the ability to be the peer and opinion leaders of the future.

Cavan ManTomcat,Mike55,Peter Asher#74686/11/99; 8:15:05

I want to chime in on the subject before returning to the topic of GOLD for the day. We have three young daughters all under the age of 6 so we are new at the parenting game and have much to learn. I think the keys are attention and love. Being a parent is a very difficult task. Many people do not accept the challenge completely and comprehensively. Our middle daughter definitely has that "middle child syndrome" thing. We can see it clearly. For her, we go the extra and might I add, difficult mile. The journey with her will be many miles but it will be worth it; she is a gift from Above and the most beautiful child in the world. We know a couple who have an eight year old on Ritalin. Poor thing, she always looks spaced out. She is quite bright and her younger sister is extremely bright with lots of energy. I fear she will be next in line for the drug. The problem from our limited viewpoint is one of not enough attention. The mother just recently left her position (kids 8 & 4) and the father is an attorney who has lots of hobbies. The kids are loved much but I think have not had and do not get enough attention. I do not believe in the drug. Patience with love, attention and discipline are what's required. Having patience is very difficult. I know. I am one of the most impatient persons I have ever met.
ss of nepIndoctrination#74696/11/99; 8:50:40

In Ontario Canada, the public school system has already been destroyed.

The following is one point of view of what is going on with the American school system.

Very distressing.

Peter AsherTom, Mike, Cavan.#74706/11/99; 8:51:17

It is gratifying to receive such a profound and immediate response. I actually hesitated to post the article because earlier comments of mine regarding the subject didn't get much comment. The public is finally starting to realize the absurdity of this devastation and hopefully it will become a full blown issue and be removed from our environment (while we still have one).

It is interesting how things of great destructive nature to our society become the accepted norm. --- As in the current worship of Fiat money.

Golden Truth******* Quickie GOLD MARKET REPORT*******#74716/11/99; 9:05:43

GOLD is up, Euro is up, Europe is up,Oil is up,and Bonds are what more do you need to know. Golden Truth.
Peter Asher**** Today's Market Report ****#74726/11/99; 9:17:00

Gold rallied steadily in Asia overnight and continued upward to $261.00 in early London trading on rumors That the Bank of England would put a reserve price on the upcoming auction. The gains faded though, after a memorandum on the Banks web site Friday morning made no mention of any such condition. However, after opening in NY at $258.85, gold climbed again to $259.70 as of 8:00 AM EDT, up $1.40 from yesterdays NY close.

Wall street is fluctuating moderately on the upside, as investors search desperately through more of the token statistics for continued justification to remain in this socially accepted form of investment. Heaven forbid one would have to admit they got out of the market and it went higher!

Gold, meanwhile seems to have found its bottom, as traders and investors alike, recognize a blatantly oversold condition. It is this writers suspicion that the Bank of England and company will conjure up some surprise propaganda to get the price of gold back upstairs before the July 6thauction. At the moment, their advance announcement has reduced the market value of their gold by one million dollars per ton!

That's it for this morning, keep in touch with the Forum for later reports on trading day.

ETStranger#74736/11/99; 11:03:14

Hey Stranger - thanks for the reply. Just a short note here as I'm off to my 30-year high school reunion until Sunday. I can't believe 30 years! How times have changed since I was a high schooler.

You wrote;

'When Volcker was named to the Fed chairmanship, the dollar had been made unsound by years of
excess money growth. Knowing full well that reversing that growth would throw MILLIONS of
Americans out of work, he couragously charged ahead and did it anyway. Yes, the result has been
eighteen years of a relatively sound dollar achieved without the backing of gold. So, IT CAN BE

'But circumstances today do not compare well with the Volcker period, in my opinion. They are
much more similar to the Arthur Burns Fed of the early '70s. Then, as now, the money supply was
allowed to grow rapidly. I am not here to argue whether the recipe was well-advised, either then or
now. But I do suggest that we have been baking the same cake.'

Yeah, agreed. Yes, the only difference is probably the overall scope of the money creation. The US has certainly popularized the notion of excess money creation worldwide.

'As to your final question, ET, yes, I recall that creating an alternative reserve currency was part of
the rationale behind the Euro. However, while the Euro may be temporarily oversold, so inchoate a
currency can hardly be considered the equal of the U.S. Dollar. Furthermore, let us not forget that
Euroland is comprised of some of the world's most unabashed welfare states, while America sports
the free-est economy on the planet.'

Maybe, maybe not. Certainly more so than Europe, as you note. I would probably argue the most free populace in the world today is the Russians. The so-called underground (free-market) economy in Russia probably represents 75% of the overall economy. Virtually no tax collection for protection by the government. This taxation has been replaced by so-called mafia (private) protection. I've corresponded with a couple of young Russians the last couple of years and their viewpoint of the situation is 180 degrees from the regular media as to the situation there. They see nothing but good times ahead for themselves and the 'new' generation coming up. They note that the 'pensioners' and others relying on the state for their incomes are the only losers. The young have adopted a real free market approach to things and have for all intents and purposes abandoned the state and it's institutions.

My point I guess is that all is relative. We probably perceive ourselves as being the most free (as you note), but in real terms this is probably somewhat misplaced. Our viewpoint is colored by what we hear everyday in the media and little is known to most about how the situation might really be elsewhere. However, in the end, I do agree with your assessment of Europe. I'll bet you if you asked Europeans how they assess their situation, you would get some argument. Most don't perceive themselves as Socialists even though from our perspective they most certainly have gone further down that road than the US.

I do have a couple of other insights from my Russian friends that I'll share with you Sunday. Good to see you back.


TechnicianImminent gold move?#74746/11/99; 11:09:57

As I write, crude is nearing contract highs steady buying all day. Dollar is coming apart and has put in long term top. Gold seems to be waiting. And I do not think too long. Strong close today could be the smiley face I promised last week.
turbohawgPeter#74756/11/99; 11:37:20

>It is interesting how things of great destructive nature to our society become the accepted norm. --- As in the current worship of Fiat money. <

I agree 100% and would suggest that those mutant norms are directly and indirectly the ultimate result of that fiat money foundation ... the acceptance of the easy way out ... getting something for nothing ... not earning one's own way ... avoiding personal responsibility.

It's my belief that once the fiat money standard crumbles, the ensuing hardship most will be forced to endure will change the norms ... over time, of course ... and not before a period of chaos and possibly violence.

It was a pleasure reading the comments of Jinx44 and Oregon Geezer the other day ... I'm with them. Their thoughts are similar to others I know and represent to me a sentiment indicator of where we're going when the lid finally blows.

Stranger, good to see you're still out there ...

Goldfly*******Today's Gold Report*******#74766/11/99; 11:39:19

Gold: 262.0 UP 1.90
Silv: 5.11 Up 0.01
Euro: 1.054 Up 0.006

Greetings fellow Goldkeisters, the yellow metal is doing quite well today considering the bashing it's had to endure these past weeks. There's been a bit of volatility these past few days, perhaps this represents the beginning of gold's break to the upside?

As promised yesterday I have a special guest with me. An aficionado of gold for years, he also has some remarkable insight to the inner workings of reserve banking. Elvis do you have a few words for our august assemblage?

(Goldfly ducks and turns, puts on some dark glasses and turns up his collar…..)

Sure man. Hey folks, let me tell you, I KNOW somethin' about gold. I know my mama looovved that gold Cadillac I got her. You know, when I was boy, and my daddy gave up runnin' moonshine; he became one of those- what you call- "Central Bankers." He'd come home late at night dragging a big sack of money. Then he'd go sit in the back room and count that money. He'd sing little song while he was counting. It's where I got the idea for 'Love Me Tender'. It goes something like this…….

Legal tender, paper free
Central banker's shill
Convince the public it's money,
and with it pay the bills

Legal tender, I.O.U.
Keynesian dreams fulfilled
For from nothing, I make you,
Inflating at my will

Legal tender, Ponzi scheme
Deposits will not stay
We'll keep just a few percent,
the rest we'll lend away

Legal tender, Parchment-Goo
Keynesian dreams fulfilled
For from nothing, I make you,
Inflating at my will

Legal tender, Reserve Note
Presses on the roll
With you we will buy the vote
and steal the nation's soul

Legal tender, I.O.U.
Keynesian dreams fulfilled
For from nothing, I make you,
Inflating at my will

For from nothing, I make you,
And inflate the World


beestingNew Russia- Land of the free#74776/11/99; 12:25:33

First,welcome back Sir Stranger,a huge thank you for your veiws.

I'd like to respond to ET's Msg,7473 in part:
Virtually no tax collection for protection by the Government. This taxation has been replaced by so called Mafia(private)protection.

Good Post Sir ET:
Seems like every society is divided into 2 groups,one that wants a higher authority to take care of all responsibilities in life,and the other group which wants no help whatsoever in being a responsible person or family.IMHO many in the second group get drawn into the first group by majority rule.
If you can take time to look up the meaning of the word "sovereignty",this is what ownership of wealth in the form of Gold can provide no matter what countries flag you were born under or live under.
Please look around!! All countries that I know of are presently encouraging private ownership of physical Gold.This may be the first time in recorded history that this event is happening.
Now think about this in relation to Sir ET's post,the people and families in Russia seem to be saying,we'll form our own Governing body.
Does anyone think 1776 in the U.S.A. was similar?
If you reading this lived in Russia right now don't you think physical ownership of Gold would inhance your chances of a better life for you and your loved ones in the future?
GOLD get you some........beesting

TownCrier*******Today's Gold Market Report: Gold enters weekend on a positive note*********#74786/11/99; 14:51:07

MARKET REPORT(6/11/99): Overnight markets saw gold up $3.00 through asian and early european trading that toyed with the $261 level before selling in the London market brought it back from whence it came. Throughout the remainder of the day, buyers held firm at $259, and New York at day's end reveals the buyers took control with a price that now stands at $260.50 as we go to fetch this over to the server.

Gold's early price rebound was attributed by metal dealers to short covering sparked by rumors that the Bank of England might put a reserve price on its July gold auction. In an Information Memorandum released today by the Bank of England on behalf of HM Treasury for the Government Gold Auction Programme, no such reserve price was mentioned, though the Bank of England does reserve the right at its discretion not to allot all of the gold offered, and further, to determine whether a bid price is deemed to be "acceptable". The memorandum futher indicated that within 45 minutes of the 11:30 am close of bidding on the auction dates, the BOE will announce the total amount of gold bid for, the lowest accepted price, the scaling factor to be applied to bids made at that price and the amount of gold allotted. This is a level of transparency that will be welcomed by many goldmeisters in consideration of the rather exclusive list of eligible participants in this auction, which is primarily limited to central banks or others with BOE gold accounts, and market makers and ordinary members of the LBMA.

Speaking of the LBMA, the London Bullion Market Association today announced average daily cleared turnover for gold in May rose to 32.6 million ounces, a one-third increase over April's volume. That's a whopping 1,000 tonnes traded each day, folks! For those that still insist on measurement of gold in dollar terms, the value of gold turnover in May rose to US $9 billion from $7.1 billion in April, with the added volume more than offsetting the lower average price of gold.

The latest $10.00 fall in the price of gold has generated persistent talk of central bank sales, despite a spate of official denials.
"I think there have been some official sales over the last 10 days, quite a lump of them I think, probably a couple of million ounces," said one bullion dealer in London.
Speculation also points the finger at hedge selling by Australian gold producers. However, today some of the major central banks in the Asia-Pacific region responded with denial that they may be behind the weaker prices, and regional dealers think that the hedge selling of Australian producers is continuing at a smaller scale than widely believed.
And as we alluded here in yesterday's report, a senior official of the Central Bank of Russia has now said today that the CBR does not plan to sell large amounts of gold out of its gold reserves to pay the country's foreign debts due this year. This is very much in keeping with the philosophy held by the Bank of Greece, which remains a target of rumors of CB gold selling. In a repeat of the denials reported here yesterday also, a senior bank official said today, "The Bank categorically denies such rumors. The Central Bank of Greece has no intention of selling gold because the foreign exchange reserves are already at US $21 billion and there is no reason for us to sell gold."

Back on the British front, Chancellor of the Exchequer Gordon Brown said he was confident Germany would agree to IMF gold sales in advance of the IMF's autumn meeting. It had been reported earlier that German finance ministry sources indicated it was unlikely there would be an agreement on IMF gold sales until that autumn meeting in Washington. On top of Britain's upcoming gold auctions, one can only wonder why the UK has been such an aggressive marketeer of negative sentiment through fostering a perception that the world shall be flooded with gold from official sources. It surely is not an attempt to generate the best price in their auction. In fact, the media seems to have found a popular target for mockery, with many reports quick to point out the price of gold has fallen $30 to $259.5 per troy ounce (from around $289.0) before the announcement to sell 125 tonnes of gold in the 1999/2000 financial year, and similar amounts in following years until the present 715-tonne stockpile is cut to 300 tonnes. We can only assume that price is no object, perhaps because developments unknown to the common market will result in a completely oversubscribed auction, and that these same unknown develpments require the false(?) hope of IMF gold sales to keep the wolves from the door. As always, time will tell.

In the meanwhile, the low prices will cast a pall over the proceedings next week of the annual Financial Times World Gold Conference which starts in London on Monday. Attendees include a gathering of gold miners, central bankers, analysts. You've got to ask yourself, why would central bankers attend if the popular notion held by Wall Street were true...that gold is JUST a commodity?

All in all, gold was the shining star of the markets today with its $2 gain as oil climbed over $18 again. The DOW is down 130, the Nasdaq down 36, and the 30-year bond remains unattractive to investors, despite a further plunge in price that has driven its yield to 6.135% in a bond market summarized by one trader, "It's a bloodbath again today." Market sentiment was said to be poor because of a rumored Fed meeting about a bailout for a troubled hedge fund. (Could such a situation within the LBMA be driving the Bank of England's actions as characterized earlier??) The Federal Reserve declined to comment as rumors swept through New York financial markets. "As a matter of policy, we don't respond to rumors,'' said a Fed spokesman about a possible meeting to deal with a hedge fund.
Hold on tight, folks..LTCM began with rumors, too. This could be a long weekend for those caught on the wrong side of the market.

Let's hope MK is enjoying his vacation in the mountains. I shall be sure to express my respect for his daily efforts to compile a market report...trying it twice was more than enough for me, so don't expect one tomorrow! That's it for today, fellow Goldmeisters. Enjoy the weekend!

In the latest News & Views, MK reportedly rambles through the many issues surrounding the gold
market and gives the reader a good, solid overview of what's happened in this topsy turvy
market of the last month or so. If you are looking for some short and sweet analysis as to
what is going in the gold market today from a multitude of sources, you'll like this
upcoming issue. It is promised to be a quick and interesting read. Please go to the ORDER FORM
(click on the "Info Packet" link near the top of this page) or call
Marie at 1-800-869-5115 for a Free Copy of News & Views -- the widely read monthly
newsletter -- and introductory packet on gold ownership.

TownCrierNY Precious Metals Review: Aug gold up $2.2 on dealer buying#74796/11/99; 15:29:26

By Tina Petersen, Bridge News
Washington--Jun 11--COMEX Aug gold settled up $2.2 at $262.3 per ounce
on dealer buying ahead of the weekend, attempting to reverse its recent
downward trend after losing more than $7 since Tuesday. Nevertheless, most
traders and analysts said they still expect more downward pressure prior
to the UK Treasury's Jly 6 gold auction. Sep palladium settled down $6.1
at $344.8 per ounce after hitting a 1.5-week low of $341 on dealer
liquidation and profit-taking.

Rumors flourished today that Tiger Fund was liquidating some of its
long positions in palladium and covering short positions in gold, leading
to a fall in palladium prices and a rise in gold prices. There was talk
these moves were being made because of large redemptions by the fund.
However, Tiger today said it could pay out these redemptions fourfold and
noted that the rumor that the NY Federal Reserve had called an emergency
meeting on the matter was absurd. There was also talk that Tiger was a seller
of palladium on the London fix.

Aug gold ran out of selling after hitting fresh 20-year lows this week
and is showing decent support by dealers, said traders. One trader said
most of the uptick was technically-motivated dealer short-covering ahead
of the weekend.

Gold lease rates are at about 2%, said an analyst, noting that there's
some borrowing of gold for forward, "which is a bearish indicator."
Despite this latest uptick, most said they continue to hold bearish
sentiment on gold: "Everyone is really abandoning gold right now," said a
trader. "The funds are sitting tight on their short positions and
commission houses are switching to internet stocks."

But another trader said he was not too sure that gold was headed
"I think gold needs to spend time consolidating before it figures out
which way to go," he said.

Today's gold option's expiry passed without much activity, traders
said. The focus of the gold options expiry was $260 puts, which
effectively kept the market in a $2 range either side of this level.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

TownCrierU.S. Treasuries routed, Fed rumors spark sell-off#74806/11/99; 15:45:46

An ugly end to an ugly week for an ugly dollar bond.
TownCrierTiger fund dismisses rumor of excessive redemption#74816/11/99; 15:51:07

You can almost see the fear in their eyes and the blood in the water. Markets move on fear and greed, and little can be done to stem the tide.
TownCrierCurrency tea leaves -- IMM currencies end higher, sterling up sharply#74826/11/99; 15:55:12

Currency traders use their straight-edges and nose for the news to support their gambling habits on the foreign exchange markets...another typical day of tea leaves.
TownCrierWEEK AHEAD- U.S. data, Greenspan and BoJ call tune#74836/11/99; 15:57:53

A good summary of events to be factored into your market decisions...
TownCrierANALYSIS--Fed cannot let growth experiment fail#74846/11/99; 16:05:45

New York Fed President William McDonough last month said it took courage for the Fed to ``dare defy economic models'' and embark on a growth experiment while central banks usually focus on fighting inflation -- not boosting growth or employment.
Gandalf the White*********CLOSING Market Report*********************#74856/11/99; 17:46:33

After a long hard day at the mine, Gandy has returned with another pocket savings for four more Hobbits, and turned to his favorite "Golden Guru" for an update. Please read the following facts of the day as presented by Kaplan, THEN read the observations of the Hobbits overviews of the day traders' adventures. Have a great weekend and let us do this again next week. Til then, as Ari sez: "Make you some!"
Gold Mining Outlook by Steven Jon Kaplan
Updated @ 4:50 p.m. EDT, Friday, June 11, 1999.

"THOUGHT OF THE DAY: It is likely that the COMEX gold net long commercial position as of Thursday's (June 10, 1999) close was at an all-time high, and was approximately one hundred thousand contracts. Assuming that no external economic event triggers short covering, a major gold producer could easily cause the speculator shorts to massively panic by proclaiming that they are buying back a
substantial portion of their forward hedge position." Total COMEX gold open interest was 209,594 as of Thursday's close. There are virtually no speculators who are long gold, while commercials are very heavily net long. Technical indicators are showing downside exhaustion. Commodities are strong and gold shares are resilient. Traders' commitments for all major currencies show commercials heavily short the U.S. dollar. The ingredients of a rapid short-covering rally in the yellow metal are all there. Gold is likely to hit $290 per ounce within a few weeks." Friday's COMEX gold estimated volume was a light 20,000 lots. Total COMEX gold open interest on Thursday rose 2,455 to 209,594 contracts, demonstrating moderate commercial accumulation on a day when gold fell $1.00, which is bullish. An open interest this high when commercials are heavily net long has always signaled a major short-term rally. COMEX gold warehouse stocks fell 50,250 to 870,689 ounces."

One of the most important factors affecting the market is the traders' commitments as reported every second Friday by the COMEX. These commitments tell you what the commercials, or industry insiders, are doing vs. the non-commercial
outsiders, also known as speculators. If the insiders, such as producers, jewelers, fabricators, and industrial users, are buying, while the speculators are selling short, this is BULLISH. If insiders are selling as fast as they can,
while speculators are buying left and right, this is BEARISH. Readers interested in the official traders' commitments for all commodities and financial instruments
should go to for many years of data."

"On Friday, June 11, 1999, the XAU opened slightly higher at 61.70, slumped to an early afternoon bottom of 61.32,
then rallied to close at its intraday peak of 62.77, up 1.93%."
Thanks Kaplan!
Spot the Dog ended the week at US$260.50 with an upward tilt to Friday's session. Aug Gold (GC9Q) settled the week at US$262.30 but the volume that had surged during the precious three day, settled back to normal levels.
The most important action of Friday was the performance of the long bond --- IT WAS HORRIBLE !! The bond closed at 6.135%, the worst levels of the day. The DOW started with a gain but started to slip at about noon and finished the day off over 130 points, at 10,490. -- The S&P tracked the DOW but ended off only a little over 9 points at 1,293+. The R2K (Russell 2,000) closed on the bottom of the day, off over 4 points,(1%; while the NAS closed near the low, and lost the most percentage wise at - 1.47% on the day.
The Hobbits "best loser" on the day was MPN off 44% on the day. Yesterdays, best gainer on the NYSE, ZOOM, was off one percent today on 400+K shares. PHCM was the "best winner" today, up 150% or 24 points to close at 40 on the day with turnover of 8 1/4 million shares.
Closing comment --- this time period will be remembered by Goldhearts as one of those items such as: Did you see the live shots of the Astronauts walk on the Moon? Where were you when the report of President Kennedy being shot in Dallas was announced ? Remember when the Hunt Bro's tried to monopolize the Silver market ? AND remember Goldfly's first song ? -- "I've got Au BABE"

GoldflyOh Gandalf!#74866/11/99; 19:47:48

turbohawgAyn Rand, woman of the century ??#74876/11/99; 19:50:58

from the Oregonian ... you folks up in the, uh, PNW may have already seen this article.
Peter AsherGod speed 'Bones', Full Ahead, warp factor ten!#74886/11/99; 20:37:50

OS ANGELES (Reuters) - Actor DeForest Kelley, beloved by millions for his portrayal of the crusty deep-space doctor "Leonard 'Bones' McCoy" on the original Star Trek TV series, died Friday at age 79.

Born DeForest Jackson Kelley in Atlanta, Ga., on Jan. 20, 1920, his career dream was to become a doctor like the uncle who delivered him.But his family did not have the funds to send him to medical school and Kelley drifted into singing and theater. A Paramount scout spotted him in a Navy training film and signed him to a contract at the studio as a bit player.

He represented humanity and it fitted him well," Nimoy said. "He was a decent, loving, caring partner and will be deeply missed."

Cavan Manturbohawg#74896/11/99; 21:03:58

I have the 40th edition of Atlas Shrugged; I loved it although I skipped the epistle (end of book) by John Galt. Her scholarship is original and for the most part, inspiring in AS. I began The Fountainhead but put it down because, she is too predictable. Her fatal flaw? She was an atheist; IMHO, that disqualifies her for the honor. It would have been an honor to debate that point with her. I believe I would have trounced her.
Cavan Man"Woman of the Century"#74906/11/99; 21:08:21

Since the declaration by Hilary (is that "ll") that she is a "Yankee" fan, I would have figured she could give AR a run for the money (in popular culture i.e.)
Richard, OregonGandalf, Peter A, Others Interested#74916/11/99; 21:40:06

Gandalf - Peter A - Great thoughts. I think we're on the right track. I see this becoming a list of key statements (with lines of further enlightenment as required) that I can refer to on occasion and maybe more importantly, refer others to (my own children come to mind). Words of wisdom, proverbs, etc., something you can really hang your hat on, so to speak. (Do not misunderstand my query, my foundation is and will continue to be, well grounded in the yellow metal. I have gained MUCH respect for gold and, I must admit, it has been accomplished through this forum and the wisdom, understanding, and knowledge of the humble knights and ladies at the table of round.)

I'm behind in my reading. I've only read through #7461, Peter's post last night. I'm extremely busy, no let up in site, this is my Christmas season. The weather in Oregon has FINALLY turned warm, so I'm scoopin' AND getting ready to transfer a business to a new owner. Seven days a week now for the last month or so. I'm tired.

I plan to draft key statements from our thoughts, add those words necessary to clarify or build on the thought(s) contained in the statement, and then present the list to the forum for further discussion/clarification. It will take me awhile so be patient and 'keepem' comin'. More later. Anyone else have thoughts regarding my questions in "Richard, Oregon (6/10/99; 21:11:39MDT - Msg ID:7455)" {PS - Gandalf, I'd like to pose a question or two to you and Peter, offline. I have Peter's email address and maybe he has yours. If so, would it be ok for Peter to pass yours on to me? Or Peter, it is ok for you to pass mine on to Gandalf. If he doesn't, email CPM with a message to me. Again, it will take me awhile to get back to you guys.} God Bless!

Peter AsherTurbo#74926/11/99; 22:10:14

Thanks for the URL on Ayn Rand, we don't 'do' the paper every day and missed that article.

From my 'biography' post #2502 of 2/17 PM, >To me the basic premise of "Atlas Shrugged" was summed up by Francisco's statement "An honest man is one who knows that he cannot consume more than he produces". This was the original trigger to my interest in economics, and is the foundation for all of my own theories.<

Unfortunately she got hooked into creating the 'Objectivist' movement with her psychiatrist idol, Nathaniel Brandon. I remember getting in livid arguments with followers of that distortion of her concepts, back about 1962 in (Where else) the original Greenwich Village.

I read that the TV special got into this, but we don't 'do' TV at all. Did anyone catch that show??

Peter AsherGandalf #74936/11/99; 22:37:43

Just sent you Richard's E-Mail address
Peter AsherCavan Man#74946/11/99; 22:48:04

I concur about Ayn Rand's flaw, it has created much resistance to the basic truth of her philosophy,
and therefore denied economic understanding to many people. (I once had a passionate relationship of great potential, crash and burn over this one defect in Ayn Rand's philosophy)

I too would like the opportunity to debate with her over that blind spot, as the say, "knowing what I know now."

BeowulfInteresting Month#74956/11/99; 23:18:45

Great market posts today everyone, thanks for all the information. I find it interesting that everytime gold starts to go up, whether it is at 20 year lows or in the 290's we get rumors of Central Bank selling. Well those rumors today were smashed back in their faces today with rumors of hedge fund(s) trying to cover. Serves them right.

Anyway, while I was at the dealer today picking up another 5 Maple Leafs we got to talking. The most interesting thing that he mentioned was a gold/silver dealer friend trading in England was told not to mention to anyone who he was selling to. He was threatend that he would never be allowed to ever borrow Precious Metals again if he did. Something smells stinks around here and I don't like the smell of it.

Monday I called my broker to switch my Janus Balanced Fund (1/2 bonds, 1/2 stock) Roth IRA to a Gold Fund. She didn't sound to happy about that but I told her to do it anyway. The switch was done when gold and gold funds were at their lowest Wednesday, I couldn't have gotten luckier. I noticed today that the Janus Fund was down $0.17 and the Gold fund was up $0.07, guess I got in at the right time.

BeowulfOh I forgot to mention#74966/11/99; 23:25:16

Anybody remember that rumor that the price of Gold would be allowed to rise the second week in June? What week are we in now? What is gold doing?

Is the Bank of England now trying to get the price to rise before the sale?

UsulNightmare#74976/12/99; 3:17:46

The sorcerer has departed for a while on private business...
Meanwhile, the apprentice found the sorcerer's book of
magic, and not deigning to write his own report, commanded
the broomstick to write the market report... Uh-oh, the
broomstick won't stop! The apprentice can't find the stop
spell! Even chopping the broomstick up doesn't work, as its
pieces transform into little broomsticks, each writing their
own market reports! Oh No! Market report overload!

[Heh heh, but your efforts are appreciated nonetheless, keep
it up!]

Oregon Geezerturbohawg message #7487#74986/12/99; 3:28:15

As a long time resident of the Portland Gulag in the Peoples' Republic of Oregon I am well aware of newspaper monopoly called The Oregonian, aka Pravda West. After years of shelling out bucks for my subscription I finally had it and canceled last November. Boy, do I feel better!
The Cascade Policy Institute is a lone conservative think tank in this nest of liberal vipers. The Institute is thorn in the backside of our liberal politicians and The Oregonian. God bless 'em.

SteveHthe rush for the gold...#74996/12/99; 4:05:26


Having just arrived back from a visit to the Australian website listed above, I made note of his comments below:

"As you can see, the technical formation on the $US Gold charts remains unchanged. No bottom formation here. To consider the potential for a turnaround, please take a good look at our Gold Commentary page.

But even if this does turn out to be the "bottom", and that is still unproven, there is ALWAYS lots of time to get aboard. We have no technical signals yet. As soon as we get some, assuming we do, you will see them here."

Yet I remind myself of other equally adroit statements about gold's explosive capabilities in view of its historical short position and ever increasing open interest numbers now standing at over 209,000. So, with all due respect to Mr. Buckler, a better strategy would be to dollar cost average any gold positions as I believe when the rush is on, the cookie jar mouth will only allow one hand in at a time. The only way to get in faster will be to break the cookie jar, expose its content, and the gasp will be heard, "oh, its empty!"

Of course lots of folks will be asking, "Well, why were they selling tickets, if they didn't have any cookies to begin with?"

"Ahh, but we did have cookies, but we never thought the rush would be so great. We sold them all, but the money was soooo good that we just kept on selling tickets. Our suppliers told us they had more coming. They were cooking them as quickly as they could."

"Didn't you think that you shouldn't have sold tickets, if you didn't have the cookies?"

"Well, our suppliers told us they had devoted the next ten years production to filling our needs, so we thought we could just sell the tickets but never believed once that our customers would actually all come at once to get their cookies."

"I guess you've been had just as we have been had."

"Yeah, reckon so."

Time to dollar cost average. Do you smell the fresh aroma of cookies baking in the oven?

XavierDear Steve,#75006/12/99; 5:37:13

When I tried to draw a complicated flow chart of the "gold carry trade", I realised "the basics" still confuse me. Heres a simple version as I understand it...would you be able to spend a minute to correct my fundamentals? I know that I am wrong somewhere. Also, I can not figure where trading on the COMEX fits in. Pardon for revealing my ignorance but I got to understand before I can continue.
Is Step 1 called "the Gold Carry Trade"?
When the Miner accepts $ for its future production, this is called "selling forward", right? It gets cash-in-hand. Is "Hedging" is a different game again?
Is the reason for the "gold deficit" Mining companies not paying back physical gold that they themselves dug out, but instead buying "above ground" paper gold to pay back the Bullion Banks?
Thanks for your posts, Steve.

TomcatAn Argement by JP for Illiquidity/Deflation and a Rise in the POG#75016/12/99; 6:01:11

Arguments for a coming liquidity/inflation have been presented by many. Fewer argements for illiquidity/deflation have been presented.

The Stranger recently pointed out the one of the contributing factors that lead to the rise in the price of gold in the past was illiquidity. There is evidence that we are moving into an illiquid phase now. Below are some quotes from JP at Kitco who feels that such illiquidity will lead to deflation/depression with a resultant flight to gold. First are some JP quotes from the past few weeks and then his comments from this week as bonds rates rose and stocks declined.

JP: "...As deflation accelerates and businesses file for bankruptcy,investor money will be seeking safety which
will be found in gold. This coupled with the US government
purchases of gold on the open market ( within 2 years ) to make the dollar convertible again, will propell gold prices to much higher levels. As I have said before, we are headed into a massive depression and there is nothing any one can do about it. Deflation will run to exhaustion which is years away.

JP.... As deflation accelerates and businesses file for bankruptcy,investor money will be seeking safety which
will be found in gold. This coupled with the US government
purchases of gold on the open market ( within 2 years ) to make the dollar convertible again, will propell gold prices to much higher levels. As I have said before, we are headed into a massive depression and there is nothing any one can do about it. Deflation will run to exhaustion which is years away.

JP.... Historically, gold always took off after the public realized that a depression is ahead. Right now people
are very optimistic and fully invested in stocks. As equities decline and losses are realized by the majority of investors, a search will begin for investments that will buck the deflationary trend and rise during the coming debacle. Since markets always anticipate events ahead by 6-12 months, I believe that gold should start rising very soon. Again, no one has perfect timing, but investing in high quality mining shares will be rewarding as
we move ahead.

Date: Mon Jun 07 1999 17:46 JP: Commercial loans at US banks rose $2.7B last week to $948.7. With the banks fully loaned out, a rise in interest rates will cause illiquidity problems which will end up in massive defaults. Banks capital is at minimum these days. Any bank runs will cause problems which may not be solved by the US government. Dollar shortages are worsening and the third world countries have just about given up on any future payments of principle debt. The IMF is loaning money to Russia so they could pay interest on previous loans coming due this year. What
a farce.

Date: Mon Jun 07 1999 19:09 JP: The Fed has no control over interest rates. Interest rates are set by the market based on supply and demand. When demand is strong, rates will rise and and when demand is slow ,rates will fall. The Fed just follows short term interest rates and will adjust it's own
rates to market rates. Right now, loans demand is very strong because there are dollar shortages. As deflation intensifies and dollar shortages worsens, demand will become even stronger as people and corporations borrow money just to stay alive and in business. Many will default and only few and the most liquid will survive.

Date: Mon Jun 07 1999 19:22 JP: The long bond is approaching 6% yield. Real rate of return on the long bond is skyrocketing to an annual rate of almost 4% (long bond return minus the inflation rate ) assuming an inflation rate of 2% and it will continue to rise. I think the long bond
may exceed 8% yield within the next 4 months as deflation intensifies. At 8% yield the economy will be in big trouble and the equity market will decline.

Date: Tue Jun 08 1999 14:29 JP: Gold price will take off JUST before the financial hits. Until then, it will linger and and may even decline a bit further. When the Dow declines 10-15% from recent high's, gold will be purchased as a replacement for financial assets in massive quantities by everyone with capital to lose. The move to safety in gold will astound you all as credit collapses and many will find
themself homeless overnight.

Date: Tue Jun 08 1999 14:44
JP: The long bond is approaching 6% yield. Once the long bond yield rises above 6%, the decline in stocks will accelerate and money will move into T bills and money markets instruments. As yields continues to rise and approach 8%, the financial panic will hit.

Date: Tue Jun 08 1999 15:30
JP: Why interest rates will not decline until the financial panic hits. In previous market declines, interest rates declined as the market declined. Today, rising interest rates reflect illiquidity problems in the banking system. With the rest of the world either in recession or about to enter recession, the competition for available dollars for debt payments is intensifying. Countries, corporations and individuals need dollars to satisfy growing debt service burden. It's a paradox that in
deflation and slowing economies rates are rising instead of declining. Long rates will continue to rise until the financial panic hits.

Date: Wed Jun 09 1999 19:39
JP: Defaults will intensify as deflation worsens. The time has come for a complete debt clean out. Sounds futuristic? Not so, deflation has a tendency to clean house. A major stock market crash will be the catalyst that accelerates the process and we will start all over again. The long bond is the key. We are in a cyclic bond bear market which will end only after the coming crash. When will the crash take place? No one knows, but an 8% yield will do it.

Date: Wed Jun 09 1999 20:01
JP:Senior gold stocks are cheap. The senior gold shares are washed out and in my opinion represent value at these prices. Gold shares short positions are at record high's and will have to cover as these shares climb. Vane sentiment reading is only 16% bullish on gold, 84% bearish. Gold pessimism is so thick you can cut through it with a knife. Again, the shares may decline further, but they are dirt cheap.

Date: Wed Jun 09 1999 20:10
JP: Gold funds are being decimated. Heavy redemptions at gold funds is forcing wholesale liquidation of mining shares. I'm just wondering who is left to sell. The average person does not own any shares, professional traders on margin have already been forced to sell their shares, who else is left?

Date: Wed Jun 09 1999 20:17
JP: Looking at my charts. All these indices on a closing basis, Dow below 10330 SPX below 1290 and Transport below 3450 will confirm the IMPLOSION in the US economy.

Date: Thu Jun 10 1999 17:43
JP: The long bond closes at 6.06% yield in after hours trading. The beat goes on. Long term rates are rising and will continue to rise until we have a financial panic. I figure that 8% on the long bond will do it. The stock market is begining to protect itself by declining.

Date: Fri Jun 11 1999 14:47
JP:Folks---Please don't get too excited. This is only the tip of the iceberg. The main action is ahead of us.

Date: Fri Jun 11 1999 14:55
Rack: JP, do you believe that physical gold will tank with the market from here? I think the world may have just walked off a cliff.

Date: Fri Jun 11 1999 15:05
JP:Rack---No,I don't think that physical gold will sink with the general market. I think that gold will hold steady and take off slowly as the market sinks.

Date: Fri Jun 11 1999 16:01
JP The long bond yield is at 6.16% in after hours trading. Wall street is begining to bleed. You all, have a nice weekend.

canamamiTo: The Stranger#75026/12/99; 6:50:48

Welcome Back!
canamamiTo: Aragorn III - Thank you for replies 7352 and 7365#75036/12/99; 7:15:05

If your hypothesis is correct (that the BOE sale will break the paper market's distortion of the price of real gold), it is joyously ironic that the enemies of gold in the British Labour Party will have shot themselves in their collective feet by their antics.
The StrangerItems#75046/12/99; 9:42:51

From this week's "Barrons":

"Just a slight amount of growth in Japan could have significant implications for
the global economy and markets. One is that more Japanese capital could be
needed at home. Another is that international investors may opt to shift capital
away from the U.S. to Japan. This dynamic would undermine the dollar and
boost U.S. borrowing costs.

Dennis Hynes of R.W. Pressprich & Co. points out that the big story in the
global economy has shifted firmly from deflation to reflation, a change that will
increase demand -- and competition -- for capital on a worldwide basis.
Investors will be skulking around for equity markets in countries where
growth is weak and shunning those in mature stages of economic expansion
and corporate structuring.

Asia is one of the first places investors may look and Japan's improving
prospects will make the region a more attractive destination for capital. Of
course, there may be efforts at the government level to make sure that
process is an orderly one. For example, as the yen strengthens because of
improving growth prospects, Japanese and U.S. authorities may not want the
dollar to go much beyond 113.50 yen. It ended last week at 117.85 yen
versus 122.13 a week earlier.

The reason, Hynes points out, is that exchange rates approaching that level
may prompt investors who have borrowed cheap funds in yen and reinvested
them in higher-yielding U.S. Treasuries -- and higher-returning stocks -- to
close out positions. This so-called "yen-carry trade" caused havoc last year
when the yen surged against the dollar, destabilizing Wall Street and bond
markets around the globe. Certainly, economic policy makers want to avoid a
massive, simultaneous unwinding of these positions."

Stranger's note: The world hasn't seen pent up demand like that which exists in Japan today. Citizens there have TONS of savings that will flood the stores just as soon as prices begin rising again!
By the way, did anybody notice that the explosive rally in the XAU last September coincided nearly precisely with the yen rally? Well, it just happened again this week!


Forgive me if this came up during my absence, but did anyone here mention the PROBABILITY that BoE will change its plans to some significant degree if gold doesn't recover in time? I suspect the rumblings about this yesterday contributed to the strength in gold as well as the strength in the Pound.


Tomcat- in your latest post, paragraph two, line one, I'll bet you mean "liquidity", not "illiquidity".

As suggested in the "Barrons" article above, the deflation/reflation debate is coming to a close. As recently as two or three months ago, there was NO serious attention given to inflation in the financial press. Now it is everywhere.

You do raise a question, however, Tomcat, about what might happen as the Fed reins in the very liquidity that got us here. Allow me to remind everyone of the following:
A.THESE THINGS TAKE TIME. Remember, dollar liquidity brought about strong American imports. Strong imports helped turn around struggling trading partners. They also expanded the American trade deficit, flooding the world with dollars. That flood of exported dollars will now drive the greenback DOWN against other currencies (despite the fact that we already have the highest interest rates in the developed world). The weak dollar will mean higher import prices are coming - in May alone import prices shot up .7% (this number did not show up in the highly suspect PPI, by the way).

In addition to the effects outlined in the "Barrons" article, stronger trading partners also make for improving U.S. exports. Rising exports at a time of full employment in the U.S. will create PRICING POWER! Boy, now that is something nobody was expecting. At the CEOs conference in Williamsburg, Virginia, just a few weeks ago, one corporate executive after another got up to declare that there was no inflation in sight. AHEM!

And so it goes, round and round. The point is: inflation does not turn on and off like a spigot. Soon, the Fed will take back the rate cuts of last fall. Do not be alarmed. Higher rates alone will do nothing to stop inflation now, just as they did nothing to stop it in the '70s.


Thanks To turbo, my formidable sparring partner. Perhaps someday we shall swill a brewski together. Thanks also to the noble canamami, who's knowledge of the world always amazes. Like me, he knows how difficult it is to leave this forum alone for awhile.

Sorry about the length.

canamami(No Subject)#75056/12/99; 9:52:35

A Recent (June 7) Article on the Euro

The Stranger,

Thank you for your kind comments.


Please see below quite a good article on the Euro. I'm trying to track down a further June 2 article by the same author, concerning the Euro, which is also quite good:

Who's in charge of the euro?

Peter Cook

Monday, June 7, 1999

Cologne, Germany -- It was a frustrating end to a European summit. Having spent two days last week doing things that manifestly showed leadership, including presiding over a successful Kosovo peace mission, Europe's heads of government could not duck the issue of the euro.

Like the U.S. dollar in its weak years in the 1970s or Canada's dollar when it was mercilessly strong a decade ago, the euro's five months of faltering existence have turned it into a test of political leadership. Acclaimed as strong at birth, the currency has become so weak that many in the markets predict one euro will soon equal one U.S. dollar, compared with $1.17 (U.S.) in early January.

Needless to say, the depressed euro was not what Europe's leaders wanted to talk about in Cologne. Any other topic -- from acclaiming Javier Solana as Europe's new security chief to banning tainted Belgian pork -- seemed preferable. When finally cornered into making a statement, the 11 euro users (all except Britain, Sweden, Denmark and Greece) talked of their resolve to secure market confidence in the currency by pursuing consistent policies. Then, they decided that this was too daring -- perhaps it would be misinterpreted as their losing faith in the euro -- and withdrew the statement after it had been widely circulated. Incoming European Commission President Romano Prodi added to the confusion by saying that what was important was not a low euro but higher economic growth.

All told, it was not a performance calculated to impress financial markets where the euro is seen as a currency "of many voices."

Nominally, a powerful European Central Bank should speak for the euro. But its president, Wim Duisenberg, has wavered between accepting the currency's fall as a fact of life or, rather, of higher U.S. interest rates, and protesting that it has gone too far. Meanwhile, in the wings, the Bundesbank's Hans Tietmeyer has taken a tougher line -- something that was to be expected since he personally promised Germans that the euro would be as strong as the German mark.

On the political front, several leaders join Mr. Prodi in thinking that a weak euro helps exports and is good for economic growth. In Europe as in Canada, old arguments in favour of devaluation as a path to economic success die hard. However, more worrying than this particular hangover is the penchant Europe's politicians have for fixing and fudging fiscal policy. When, two weeks ago, finance ministers agreed to allow Italy to loosen its budget targets because of low growth, they did enormous psychological damage. One minute, the central bank was running things. The next, politics were in obvious command. Moreover, having varied the terms for Italy, financial markets are left asking which country will be next through the stable door? Could it be mighty Germany whose economy is in almost as bad a shape as Italy's?

The case can be made that the euro should be weak now and will be strong later. There has been a shift in relative growth prospects favouring the United States over Europe. Then, there is the lure of U.S. interest rates that are bound to rise sooner than European rates.

Hidden from view for now is the greater potential of the euro, in terms of its acceptance as a reserve currency, in terms of savings and investment growth and the expansion of European capital markets; also hidden for now is the inherently weak position of a U.S. economy in which private savings have disappeared while foreign borrowing soars. That will change. By next year, the euro-U.S. dollar relationship could be very different.

But that is not the point. Having bragged about the euro's challenge to the U.S. dollar, the politicians have a problem. They are not able to produce what they said and, inevitably, that is seen as a failure of leadership. Add to it the reluctance of governments in Germany, France and Italy, to free up job and product markets, take on privileged constituencies such as the public service and organized labour and alter their old statist habits, and you have a rerun of the same financial market attitude -- one of almost permanent disapproval -- that blighted the U.S. dollar in the 1970s. "Euro's frailty reflects weak economic leadership," said one leading German newspaper last week, quoting a banker-broker view of what ails the euro.

One can debate the chances of this changing. In Cologne, the Germans tabled yet another employment pact, a document full of fine words and promises of co-operation between "social partners" that happens, unfortunately, to coincide with a worsening outlook for jobs. Such pacts offer the pretense that European governments are doing something when the reverse is true. There is, however, more pressure being put on the politicians because the euro is seen as a political currency and their baby. On the euro, the one signal financial markets would respond to would be an economic package in Germany or France that cuts social benefit costs, makes labour markets more flexible and lowers taxes. For now, that is not on the agenda and the need for it was ignored in Cologne. But the fallout from a weak euro may be bringing it closer.

Peter Cook can be reached by E-mail at This email address is being protected from spambots. You need JavaScript enabled to view it.

Peter AsherToday's Market Report#75066/12/99; 10:58:27

Why are we not surprised?? — by this morning's Item on Excite news

FRANKFURT, Germany (Reuters) - Finance ministers from the
Group of Seven major powers agreed Saturday to a more generous
package of debt relief for the world's poorest countries.

"It will be faster, it will be deeper and it will involve more
countries," U.S. Treasury Secretary Robert Rubin said of the plan.
He was speaking to reporters after a one-day meeting to prepare for
next weekend's summit of the G7 plus Russia in Cologne.

G7 officials said the number of countries eligible for debt relief
under the new scheme would rise to 36 from 29 and that as much as
$80 billion in loans could be written down substantially or forgiven

Ministers said they had agreed the debt relief -- equivalent to about
$27 billion if it were to be made as a one-off payment -- would be
financed in part by selling some of the International Monetary Fund's
103 million ounce stockpile of gold reserves.

As this morning sees another rendition of the oversung refrain proclaiming the selling IMF gold, Germany has thrown its deep (pockets) voice into the chorus, attempting to create harmony in this tune as "Finance Minister Hans Eichel confirmed Saturday that Bonn had
dropped its long-standing opposition to selling part of the IMF's gold reserves."

Nevertheless this may be the week we look back on and say "That's where it all began". Bond yield climbed definitively, Wall street continued its development of a possible long term top, Oil regained most of its recent high ground and the Euro appears to have declared a genuine bottom. All of this becomes a backdrop that highlights the recent actions of gold. Striking a series of twenty year lows, gold nevertheless finished strongly on what has in the last year or so, become finicky friday.

Behind all technical action is either a set of fundamentals, OR a rigged market. Rather than try and predict the forthcoming action on technical analysis, it may be more accurate to imagine what actions would follow if what we suspect is true. While it is certainly plausible that the BOE is a volunteer patsy providing the gold needed to bail out privileged shorts, the quantity doesn't seem sufficient to fit that scenario. It could also be that the announcement was carefully planned to drive down the price of gold through negative momentum. Now massive amounts of short covering could overwhelm the negative sentiment to the extent that its completion sees the price of gold back up to where the Bank realizes more than the value it had at announcement time.

This high discount twenty year low is even more incomprehensible when adjusted for inflation. No amount of manipulation can override the fire sale aspect of these prices for very long. The action of this weeks trading has the technical earmarks of a long term bottom. However, gold has looked this way before at higher levels and the forces dedicated to trashing the yellow metal have not given up.
The beauty of the IMF gold sale proposal as a propaganda tool, is that The U.S. congress can scotch it by virtue of having a large enough percentage of the gold vote, to prevent the tally needed to authorize the sale. Then the proponents don't have to renege and get caught out as manipulators. Today's attempt to dampen the budding snippets of information surfacing in golds favor, may not have much effect. The last time the song was sung, the market panned it.

Once the tide turns and the current 'Golden opportunity' gets pounced on, derogatory comments will be as a butterfly's wings upon the wind. While the great Bull Market may end with a whimper, the birth of the new universe of gold will begin with a big bang.

Peter Asher*****Today's Market Report"#75076/12/99; 11:01:22

Tile correction
canamamiExcellent Article (June 2) on Euro#75086/12/99; 11:27:32

For now on, I'll have to keep the subject and the link lines straight, lest I link to nowhere. Here is the Globe and Mail article:

Why smart money is on the euro
Wednesday, June 2, 1999

THE GLOBE AND MAIL - Canada's National Newspaper

Peter Cook

Brussels -- When Europe's top leaders open their biannual summit in Cologne tomorrow, they will be worrying most about two things that, back when they last met in Vienna in December, no one foresaw. First, a war inside Europe that claims fresh victims every day. Second, a European currency, the euro, that started life in January at $1.17 (U.S.) and is now, widely and humiliatingly, predicted to crash through the one-dollar barrier.

Of the two, Kosovo obviously matters far more. Since the 15 European Union leaders who are present encompass hawks, doves and neutrals, they will content themselves with making pro forma statements on the war, to the effect that NATO's terms must be accepted in Belgrade. But they will discuss a European strike force that could act independently of NATO and the Americans in future crises; the naming of a "high representative" to speak for Europe on foreign policy; and proposals to bring the Balkans into Europe's democratic and economic mainstream when the war finishes.

All are new, urgent items on the agenda. But, as a response to what is happening, all look regrettably long term.

The euro, however, is short-term. When it was launched, Brussels invented a cartoon character called Captain Euro to sell it but not save it, since there was no idea then that it might need saving. Instead of a caped crusader, the euro's "saviours" in the months since have been "suits" from the central bank or from national finance ministries, and a dismal, unconvincing job they have done.

There have been bitter policy disputes, budget deficit fudges, and declarations that the euro's value does not matter and, then, three days later, that it does. All in all, Europe's politicians and bankers have done for the euro what they once accused Jimmy Carter of doing to the U.S. dollar.

In the next few days, more collateral damage may be done. The euro could sink lower still. If it does, then it will be a reflection not only of the policy differences that inevitably dog a currency in which 11 governments have a share but also of poorer prospects in Europe. Late last year, no one was saying that the two economies that would suffer most as a result of troubles in Asia, Russia and Brazil would be Germany and Italy; instead, the United States was seen as the premier victim. That is not how it has turned out. The U.S. economy will grow by 3.6 per cent this year; some peripheral euro-using economies will do better, such as Ireland with a growth rate of 9 per cent; but German growth is put at 1.5 per cent and Italian at just 1 per cent, largely because both depend so much on exports. Because of their weakness, the euro cannot compete against the U.S. dollar, at least for now.

The question that truly smart investors should be asking, however, is whether this is cyclical and reversible -- and the answer, almost certainly, is yes.

Economists at Deutsche Bank say the euro zone economies will rebound in the second half of the year. They point to record levels of consumer confidence and say retail spending gains are working their way through the economy, lifting industrial output and construction activity. Bond markets will anticipate the turnaround, meaning interest rate differentials will narrow against U.S. rates. Economists at Goldman Sachs also talk about the euro zone showing "the green shoots of recovery." Monetary conditions, they say, are easier than at any time since 1985.

A second point to make is that, while its weakness may embarrass politicians who predicted instant success, the euro has not fallen far. It has simply given up the gains that the German mark made ahead of January's launch date. In relation to the U.S. dollar, the euro sits where the mark sat one year ago. Moreover, a casual glance at the size of the U.S. current account deficit or at the $200-billion in central bank reserves that could start moving into the euro suggests that, given time, it will emerge as the stronger currency.

Finally, some note has to be taken of a booming corporate bond market in euros. At first, this was thought to be a gimmick. Big corporations considered it glamorous to be the first to borrow in euros and instantly catapulted the euro ahead of the U.S. dollar in January. But since then the euro market has found itself with a clear raison d'être as companies use it to finance mergers and investments, and even to create a low-grade junk bond market (something Europe has lacked). Olivetti of Italy has just begun marketing eight billion euros in floating-rate bonds, money that it needs to buy Telecom Italia in the largest industrial takeover ever seen in Europe.

Predictions about the euro should be whispered ever so quietly so that the politicians cannot eavesdrop. One such prediction is that European corporations are about the embark on a euro-financed merger wave every bit as big as the U.S. wave of the early 1980s.

Peter Cook can be reached by E-mail at This email address is being protected from spambots. You need JavaScript enabled to view it.

Golden TruthPeter Asher is in the Money(GOLD)!! #75096/12/99; 11:42:35

Peter your last post was simply BRILLANT,what you wrote rings so true. I just wish my mind was as coherent as yours. I believe that is exactly what will transpire out of this propaganda, A "NO SALE" again!
Peter Ashercanamami#75106/12/99; 12:01:45

Regarding the Euro, In the subject of Chemistry, one first studies Qualitative Analysis to learn the components of compounds and how they react with others. After that, one studies Quantitative Analysis to learn to measure exactly how much molecular weight ant count gets shifted in a chemical reaction.

The Quality of the Euro is its representation of the economic system of a diversified group of national components, the compound being far stronger than the elements it's made up of. However, quantitatively, the total economic machine behind the Euro is not as powerful as the dollar. Combining cooper and zinc will give you brass, but carbon and iron create steel. The former is attractive and corrosion resistant, but will not suffice to produce an "I" beam to support a bridge or building.

Credit excesses in our economy can be seen as the equivalent of overloading or to great a span being utilized, but when properly engineered, carbon steel is still the strongest. I continue to believe that the ability to service debt is senior to the degree of indebtedness, and that it holds true for nations as well as for corporations and individuals.

Peter AsherGolden Truth#75116/12/99; 12:04:21

You do me great honor. I am left momentarily incoherent.
canamamiDon Coxe Conference Call#75126/12/99; 12:45:11

Don Coxe is one of the gurus I follow. He argues in this conference call that Japan is rebounding, that Europe will hold its own vis-a-vis the U.S. for the rest of the year, and points to the high risk posed by the NASDAQ valuations. All point to pressure on the $US. At minutes approximately 27:30 to 32:00 of the call, he specifically addresses gold and the XAU, arguing that the market is "clearly rigged", and that gold is more undervalued than any other asset class.
Peter Ashercanamami#75136/12/99; 12:58:21

I called up that URL and gave them my reguested E-mail address, but all I'm getting is a soun and music site. What am I missing ??
Peter AsherDow 7800#75146/12/99; 13:06:56

Here's a calm cool and collected rundown on a highly plausible event path for the next few months.--- That is if the Bull Market lottery ticket holders don't succumb to a stampede of absolute panic
canamamiReply to Peter Asher#75156/12/99; 13:07:24


Thank you for your replies to my posts.

First, click on the linkage. Then click on "Don's Latest Call" (I believe it says) on the page to which the linkage takes you. Then, you hear the conference call. You may have to download Real Player to hear it. I don't know if the other multi-media formats can "play" the call (I already had RealPlayer when I first came across the site, so I use Real Player).

Hope this helps.

UsulHedge fund stress#75166/12/99; 14:13:58

One should watch for market "surprises" that strike at
the fundamental weakness of the hedge funds that use
arbitrage and derivatives, in other words, if the market
moves in a direction opposite to that which is expected,
the hedge funds stand to lose a King's ransom. We have
seen how this works with LTCM, which made bets on European
currencies and the Japanese interest rate in 1998.
This past week, we have seen one such surprise in the report
that Japan had a surprise leap in GDP during the first 3
months of the year. This led to market gyrations in the
yen/dollar rate and rises in the Nikkei. Perhaps some of
the yen/dollar gyrations pointed to hedge fund activity?
The euro exchange rate is another important factor. After
an initial rise, the euro has been heading relentlessly
downwards toward dollar parity. It would not be strange to
expect some hedge funds to place a bet on this continuing...
but recently, the trend has been reversed. European
politicians have commented that it is not the weak euro,
but the strong dollar, that is setting the euro exchange
rate. If the dollar itself should weaken, perhaps as a
linkage with the bond market, and/or through repatriation of
Japanese yen carry trade investments which must sell dollars
to pay the Japanese in yen, then the euro will about-turn
and this could well stress certain hedge funds. We will
not know which ones due to their secretive nature, and they
will deny problems until the last. Only when their reserves
are exhausted and they are forced to declare their problems,
or they turn to the Fed with begging bowls, as did LTCM, will their predicament become clear for all to see. This
will require careful watching. And while false rumours may
point to some, such as Tiger, as the stricken, the real victim may be crumpling in another corner.

Richard, OregonSteve H - Letter To Friend#75176/12/99; 14:23:04

SteveH (6/11/99; 3:07:35MDT - Msg ID:7463)I wrote this to a friend ...XXXX - Thanks for this post. I found it easy to read and follow and will save it for my own 'Common Sense' list I'm building regarding "Why gold?". There is much to be gleaned from your words. Thank you for sharing.
CoBra(too)G7 agree on easing debt on HIPC's#75186/12/99; 15:34:37

G7 finance ministers agree (Saturday)on a plan to ease the debt of the world's poorest countries, including the sale of 300 tons of IMF gold.
What a farce!
After the BoE gold sale farce, this won't impress anybody and does smack as total surrender to the market forces, which are gaining momentum by the day. The hey-days of the gold carry trade(rs) seem counted.
In view of the overall debt of about 200 billion US$, about 41 HIPC's owe, mostly due to the stringent "relief" loans of IMF, which has brought them to this state of disaster, as well as the collusion to subdue the price of gold, which has cost the majority of same poor countries (being mostly resource and gold producers)much more in export value per month, than the monthly interest "relief".
The 2,6 billion dollar relief (-only interest on the revenue will be available for debt relief!)in these terms it is a farce and the question is permitted - to who's benefit is this farce played out.
It does seem the system (of free floating and re-printable paper IOU's in a world of free global trade)is desperately trying to prolong this "brave experiment" of global (paper-)dollarization and keeping up the pretense of eternal growth, without any kind of inflation. (pls read GE poster KeyserSoze in his brilliant comment).
The markets begin to tell us otherwise and even European economists are starting to voice their concerns towards the US being the worlds largest debtor and becoming totally dependent on capital imports. An Austrian paper "Die Presse" carried a headline in the economic section today, by an economist Streissler: "The next major crisis will start in the US" - meaning the equivalent of SEAsia, LAmerica ...

I'll have to vote for a new EU Parliament tomorrow - as usual I will vote for the lesser evil - what a shame that global politics got us back to a stage long thought overcome.

BTW, MK, SteveH and Gandalf - Thank you all for your kind encouragement lately. Believe me, I've been so frustated with the open manipulation of markets (see Hans Schicht today)the feeling of destitution took over, though I realize ther's a group of knights assembled here, relentlessly fighting for the truth an against the evil machinations of the colluders. Thank you again for reeinforcing my beliefs! Have a great weekend

turbohawgcash withdrawals increasing ??#75196/12/99; 17:09:21

One wonders how much, if any, of this climate of rising interest rates is due to liquidation of Treasuries in order to raise cash ... and just as importantly, if that cash is being withdrawn from the system.

If cash is being withdrawn from the system, what evidence would we have to tip us off ?? Wouldn't M1, M2, and M3 all be falling ??

Peter, in that article you referenced over at Yahoo was this point: >And, over the last four weeks, the money supply growth has actually decreased for the first time in three years.<

Meandering over to the Fed's website that lists the latest money supply figures ...


... one finds that non-seasonally adjusted (ie. non-manipulated ... actually, that's probably not true either) M1, M2, and M3 are all down as of the end of May ... can't help but wonder with interest rates shooting up if the downward trend of all three money measures is accelerating ... the end of June numbers ought to be quite interesting. This is happening in spite of a recent barrage of Fed coupon passes.

There may be plenty of plausible explanations for the three money supply numbers to suddenly be dropping and interest rates rising other than people pulling cash out of their banks. But that's what comes to mind, and if this is actually occurring with increasing momentum, inspired by fears of Y2K or a stock mkt collapse or any other reason as discussed here for some time, look out. Large cash withdrawals will undermine the 'stability' of the fractional reserve banking system, increase illiquidity in all of the markets, and be highly deflationary. Plus, we may have the goons from the fed govt stepping in before we know it to tell us how much of what is ours we can have ... as noted the other day by my recent bank experience and those of MK's customers the banks already seem to be getting stickier fingers.

SteveHXavier and GATA#75206/12/99; 17:56:25


Saw your work. Something appears to missing from the chart. I think two charts actually exist: one with physical as per Rhody's comment to you at Kitco, the other with a gold certificate. I think the gold certificate one is more confusing as it seems then that it is a backing issue whereby a BB has other physical that lets them deliver the smaller redemptions but they leverage off of the potential backing of CB gold. This may be the case as to what is happening with the BOE of sale. Paper was sold to BB by BOE, BB had major physical redemption but fell short the gold, now BOE needs to make good. That would change your diagram too. Also both diagrams would need a collateral back to CB from BB and maybe even from BB to dealer (not retail). If gold or paper borrowed is sold short at LBMA or Comex then only needs gold when a contract takes delivery; otherwise paper would suffice.

This is from GATA:

Dear Friend of GATA and Gold:

Here's an especially important "Midas" commentary by
GATA Chairman Bill Murphy at
Please post this wherever it may be of interest.

Secretary, Gold Anti-Trust Action Committee Inc.

* * *

A Financial Scandal Unfolding Slowly Before Your Eyes

By Bill Murphy

June 11, 1999. Spot Gold $260.40, up $2.10
Spot Silver $5.10, up 2 cents

This is not meant to be the comprehensive analysis of
all that we intend to put together to illustrate to you
that we believe a financial scandal of epic proportions
will be revealed in time. This is summertime and I had
no intention of writing this Midas, but in light of the
events of yesterday, I thought I should recap some of
our previous commentary and alert you as to what talk
is making the rounds and what it means to you as a
precious metals investor.

It is my opinion that what is going on in the U.S.
markets RIGHT NOW is the crux of the gold problem. The
current turbulence is the raison d'etre behind the
manipulation of the gold price. In the Midas on
Thursday I alluded to the fact that it was becoming
clearer by the week, day, hour. Yesterday it really was
by the hour.

Yesterday began with a benign producer price index
accompanied by retail sales that were a bit stronger
than the consensus predictions. In addition the
previous month's retail sales were revised upward. The
bond market fiddled up and down on the news and then
swan-dived, finishing the day down a point. Yields
soared to 6.15 percent. An unthinkable number at the
beginning of the year (except to the Cafe's Charles
Peabody and one other mainstream analyst.)

Even as the bonds swooned, the CNBC commentators
remarked all day how boring everything was and the bond
action was just ho-hum, and the general commentary was
it was only a matter of time before they would recover
and thus the stock market would come roaring back.

Then rumors started to swirl that the Fed was having,
or would over the weekend, an emergency meeting
concerning a hedge fund bailout. Stocks then headed
straight south until the end of the day when "Mr. White
Hand" showed up for the umpteenth time to lift the Dow
50 points late in the going.

Well, as all of you know we have been alerting you to
hedge fund problems all week. No sense going into more
of that. But what is of significance is that GATA has
told the press and Congress that financial problems of
the Long-Term Capital Management type are lurking
beneath the surface that were never resolved after that
crisis. We told them that it was a time bomb and that
we felt it was only a matter of time before they could
be contained no longer. We told them that the gold
price was being manipulated lower in order to: 1)
protect certain financial entities that were short
"leased gold" as part of a "gold-carry trade"; 2) to
allow various financial institutions to continue to use
gold as a cheap source of financing; 3) to prevent
"force majeur," as the borrowed gold loans have risen
to such a degree that they could not be covered without
a major debacle if the gold price were to rise sharply;
4) to discredit gold so much that its sinking price
would draw attention away from the serious financial
problems gurgling out of sight from public view and

The Fed denied to comment the press on the rumors
yesterday, which is standard for them, but that they
had no comment was all over the wire services. We have
no further comment either on the hedge fund bailout
story except to alert you once again that something is
very wrong out there. You might recall that we just
told you about the big banking meeting in Philadelphia
in which all the participants were urged to reveal none
of the substance of the meeting. Fed Chairman Alan
Greenspan was rushed from that meeting, surrounded by a
phalanx of Secret Service agents. A clue that the
financial problems are serious is that the bond yields
have been soaring while the movement in the
Philadelphia Utility Index seems to be oblivious to the
bond market retreat -- an obvious divergence. The
recent bond debacle and that divergence are telling you
that the bonds are not tanking just on inflation fears;
there are liquidity problems out there.

On Thursday we alerted Cafe members that where there is
so much smoke there is probably fire. Charles Peabody
told you five months ago that there would be unintended
consequences from the Greenspan-led LTCM bailout and
series of interest rate cuts. He told you that the
unparalleled shift in the yield curve (short rates
staying down and long rates moving up) would not be
good for the banks. The bank stocks have already been
hit sharply and, if Charles is right, are just starting
their descent. He told you many months ago that the
financial problems were shifted, not fixed, by the LTCM
bailout, and that these problems would most likely
surface in late spring.

Midas has told you that the manipulation of the gold
market started in earnest right after the LTCM bailout.
That is clear. That is when the bullion dealers started
roaming South Africa and other mining locations,
offering unheard-of credit terms and begging the
producers to sell forward. That is when they got
together to stop gold rallies at $306 or so, $296, and
then $290. Out of bullets at $290, our officialdom
called on the English Poodle (Treasury) to make its
pathetically obvious announcement about its dumping 415
tonnes of gold. Clearly this was done to demoralize the
entire industry, and it worked as gold dropped $30.

Throughout this period we have identified Goldman Sachs
as goon squad leader, hit man against the gold market.
And to capsulize: we know that former New York Fed
Governor, Ed Corrigan is a top exec at Goldman; their
international economist Gavyn Davies is tied to British
Prime Minister Tony Blair; sources say Goldman Sachs
has a 1,000-tonne gold short position on their books;
and one could say that Treasury Secretary Robert Rubin
has some pretty close ties to Goldman as he used to be
their CEO. Then of course you have Jon Corzine, former
Goldman Sachs top dog, all buddy-buddy with John
Meriwether, LTCM chairman.

Do we really want to pick on Goldman Sachs? No! It is
just that everywhere we turn, there they are. Needless
to say, they have been noticeably on the sell side
almost every day since the BOE announcement. Yesterday
(with Fed emergency meeting rumors all over The
Street), they were finally buyers.

The point of going all over this again is that it would
appear we are here, or at least going into the period
when all that we have been talking about in the Cafe is
going to begin to surface. The bond yields surging to
6.15 percent is most likely the tipoff that what we
have been saying is correct. Liquidity is likely to
become a big issue. For example:

We have been alerted by Charles Peabody that about five
weeks ago many of the hedge funds put on the yen carry
trade. They borrowed money in yen and then bought
Treasury bonds thinking yields were going back down. A
successful trade such as that could help them with any
redemption or cash-flow problems. It backfired and they
have been exiting this trade the past few days. That we
know for sure.

Meanwhile back at the ranch, Britain's finance
minister, Gordon Brown, was all over the tape yesterday
talking about the righteousness of his gold decision
and saying he was confident of an agreement about IMF
gold sales by autumn. What timing! Just as bond yields
are surging and there was to be news about hedge fund
problems. This is more than redundant and sad; it shows
desperation. Gold has dropped $30 and he has to come
out with this headline, "U.K.'s Brown Sees Wide Support
for IMF Gold Sales."

Then there is this little tidbit which may have
everything to do with everything, or just be a
coincidental anecdote. We received information
yesterday morning that the president of one the largest
hedged gold producers was in New York telling hedge
funds that were short that "the game had changed." I
will leave that one alone for the time being. But I
submit to you that the jig is up for the colluders. We
are on to them and it is most likely that events will
begin to unfold in time that will expose their
nefarious activities and their role in this big

The scandal is that there has been a great manipulation
of the gold market that involves certain segments of
the present U.S. administration, foreign
administrations, and various bullion dealers. The
resulting suppression of the gold market has been put
into place to mask failed fiscal policies and to buy
time for greedy financial institutions that want riches
but are unwilling to face the consequences when their
trading strategies go bad. It is about hubris that
would make Zeus blush.

All the while an entire industry is being devastated,
as many gold-producing countries that are poor or need
the gold revenue are being squeezed. An entire segment
of investing shareholders is suffering terribly all
because they were not informed the game was going to be
rigged against them.

Unbelievably, while all this goes on, the financial
press is completely asleep, or, worse, just plain cowed
by the money powers. They say that bonds are tanking
because of inflation expectations and that gold is
tanking because of a LACK of inflation expectations. I
could go on and on here, but you know my spiel.

Instead, to enhance to what I am referring to, I
present an article this past Monday by John Crudele of
the New York Post, "Feds pass Fraud Buck to
Brokerages." While it is on a different subject, it
captures the essence of what one faces when one
presents information that takes on big money. The
mainstream press (wire services included) loves to talk
about the First Amendment and dissent, but present them
with a solid story that goes against big money or the
power structure in Washington and they retreat into a
shell. My naivete is gone forever. My disappointment in
the U.S. press grows and grows. No wonder financial
bombshells erupt out of nowhere.

John Crudele's N.Y. Post story:

"One defendant in a recent securities fraud case said he
tried to cooperate with prosecutors by giving up
damning information about two big Wall Street
investment firms. The U.S. Attorney's office in New
York said no thanks.

"A second defendant said he too was willing to give
damaging leads to prosecutors about one of those same
firms. He was also told that the feds weren't

"Then there is the case of a third man who recently
came to my attention -- a guy named Edward Manfredonia
who's been carrying on a five-year correspondence with
federal prosecutors in hopes he'll get someone
interested in corruption on Wall Street.

"`In the beginning, they were very interested. They
wired me. They were going to tap my phone. And then it
died,' said Manfredonia, who was a trader on the floor
of the American Stock Exchange before he turned into a
whistle-blowing, letter-writing reformer. Some members
of the Amex "bragged that it wouldn't be investigated.
It went too high" -- involved important people -- said
Manfredonia, whose accusations have been partly aired
already in a series of Business Week stories.

"The three men -- all of whom I spoke with last week --
have a simple question: Is someone protecting the Wall
Street big shots while the government goes after the
minnows? That isn't to say going after any wrongdoing
is bad. Anyone who ignores securities laws -- whether
they're home-based Internet traders or big firms --
should be punished. But most of the enforcement lately
has been against small fries, no big firms.

"For instance, a former partner of Spear, Leeds &
Kellogg last week was fined $100,000 for illegal
trading on the Amex. Pasquale Schettino, that former
partner, was barred for life by the National
Association of Securities Dealers for trading without
his company's or the exchange's approval. That case
came two months after a Spears trader was suspended and
another was barred from the industry over violations at
the New York Stock Exchange.

"Spear Leeds wasn't cited for any wrongdoing in either

"The NASD, the Amex and the NYSE wouldn't comment about
it The NASD also declined to comment to the Journal on
why Spear Leeds wasn't named or to confirm or deny any
ongoing investigation.

"The U.S. attorney's office in Manhattan says it
evaluates cases on an individual basis and that no deal
exists for the securities industry to handle its own
problems. There are explanations for refusing to accept
information. The U.S. attorney's office in lower
Manhattan, famous for going after every Wall Street
violator back in the '80s when now-Mayor Rudy Giuliani
was in charge, may simply think the information being
offered wouldn't be useful. Or wrong.

"Or, in not accepting information about big, powerful
securities firms, the regulator/prosecutor
establishment may understand that there are other ways
for these matters to be handled -- like the Schettino
matter was, through disciplinary channels. But if this
trader breached securities laws, why wasn't he
prosecuted the way someone would be if he was tipped
off about an upcoming takeover?

"While authorities say Schettino didn't make any money,
the whistle-blowers -- one of whom was intimately
involved in that case -- say there are plenty of
examples of illegal profiteering by securities
professionals. One of the snitches says he volunteered
to give authorities information on illegal activities
of two major firms. `They don't care,' he said.

"Says another source: `We spoke about (one company).
They didn't say anything. They didn't care. We didn't
get an answer back.'

"The most prominent case in recent months has been the
one against people connected with Oakford Corp., which
wasn't a member of the NYSE but which did trade through
brokers on the floor of that exchange. In that case,
charges were filed through criminal channels and not
administrative ones. And people are going to jail.

"Plus, published reports say that another 64 brokers on
the NYSE floor are under investigation, some as
offshoots of the Oakford probe. But the betting is
they will be handled through securities industry
channels. And if wrongdoing is found, my three sources
above believe something akin to the Schettino
punishment will be invoked.

"In fact, the ambiguity of the rules may convince
criminal authorities that it would be best to let the
brokerage industry regulate itself. That would be
especially handy for everyone if large and powerful
Wall Street firms suddenly find themselves in the
target area."

Yes, the stench grows. Which brings me back to when we
were berated publicly by Long-Term Capital Management's
P.R. firm in a Dow Jones newswire story about GATA that
was vanilla-ized by editors to such a degree that it
was of interest to no one. In that story, LTCM decried
the claim that they "traded" gold. (We never said they
did; we said they borrowed gold.) Their senior counsel
called our attorney making similar denials and said he
would send a letter making his denials official.

Well, we have waited long enough. The letter from the
LTCM lawyer NEVER came. And yesterday, in a potential
breakthrough, a source of ours confirmed to us that he
knows a former trader at LTCM who confirmed to him that
the firm was up to its eyeballs in the gold-carry
trade. We will protect our source, and the trader, just
as any other journalist would. A bit like "Deep Throat"
was protected.

It is now time to go out and enjoy the weekend, but
from a gold family standpoint, this is all good news. A
big, big move in the gold market is not far off. That
is what the bonds, silver, oil market (headed toward
$19 per barrel and more again), and XAU are telling us.
When this financial scandal is exposed, the world will
finally realize why gold has performed so badly. They
will learn that it was not gold that performed so
badly; it was the manipulators that have given us such
a lousy performance. And they will get the hook for
such scandalous behavior.

Before they do, the price of gold will soar as they try
and cover their shorts. There will be a breaking of the
ranks, like rats leaving a sinking ship. It happened
during the financial crisis of late last summer. There
will be no honor in this den of thieves either. It will
start as some will run for the hills as they learn the
jig is up; that will be followed by panic gold buying.

Yes, our day is coming, and as I said in my speech to
the Northeast Mining Investment Conference, we are
going to be the ones with the happy grins on our faces.


turbohawgcatching up#75216/12/99; 18:33:24

Peter, I share your view that servicing all of the debt in the economy will be it's Achilles heel ... referencing my last post, anything that interrupts the flow of digits between financial institutions will prove highly disruptive to the money supply and, hence, the economy ... large cash withdrawals would do it ... there simply isn't anywhere near enough cash in existence to service all of the debt without that flow of digits, that flow of credit.

Tomcat, that was an interesting re-post of a deflation scenario ... more from a micro standpoint. As Stranger alluded to, he and I and a few others wrestled over the inflation/deflation issue on more than one occasion here, but more from a macro standpoint. I'm sure those that have been here since the start got tired of it.

As seen through the eyes of a deflationist, the economy is chugging along on top of a financial bubble. It's when that bubble pops that deflation will take off ... that's when a rolling credit collapse will set in. The Fed is starkly afraid of this happening, as evidenced by last fall's Greenspanic. The whole New Era argument rests implicitly on the belief that credit can be expanded forever.

Stranger, I'll have to take you up on the brewski(es) offer one day ... my buy.

SteveHHow do we know this isn't what is going on?#75226/12/99; 19:11:15

Date: Sat Jun 12 1999 18:00
Dabchick (NewPhys.......Opinion as to why gold is going down?) ID#258195:
Copyright © 1999 Dabchick/Kitco Inc. All rights reserved
You posed that question in your 11:20 today. In my opinion, certain governments would like to see a lot of their gold holdings dispersed to the general public. Pursuading the general public to buy gold, and keep buying it on an on-going basis, would require a steadily rising price into which their Central Banks could sell with confidence. Obviously, the lower the starting price for this process, the more successful such sales are likely to be. And if people see the price rising steadily, that will bring in progressively more and more individual buyers.

The steadily falling price of bullion from $400 in the mid-90's to $260 now ( and on to $150 if those Bullion Dealers that Sam-a met in London a couple of weeks ago are correct ) could be setting up the necessary pre-conditions for such a selling programme. Of course, once it started rolling, and everyone felt a need to own a little, there might be no top limit to where the price could go.

If the BoE sale gets the ball rolling next month, they might not seem to be as stupid as some here seem to think. And does anyone know why the UK Govt has decided to reduce to zero the Tax ( currently 17.5% ) on retail gold purchases with effect from next January 1st?



New topic:

Fact? BOE and IMF gold sales are attempts to free up gold to pay back outstanding gold loans?

Xavier -- saw your new chart. Still say we have two charts. Also, check out FOA's post on European gold leasing. He specifically states that EU leasing is different than IMF leasing. Your chart seems to be IMF leasing. FOA seems to indicate that European gold leasing was a way to spread ownership of gold. Seems IMF gold leasing was a cash cow for equity investments? Good work.

Cleary, multiple forces at work. Two factions at least: Euro/BIS; US$/IMF; One-world electronic currency not gold backed?

FOA, I take it ANOTHERS comments from the other night was a signal to not post so often. You are always welcome, don't be a stranger. Speaking of which, did I miss ANOTHER's next post?

SteveHPatterns emerge...#75236/12/99; 19:25:43

FOA says...

"Also, as gold begins to rise against the dollar, the local gold reserves are seen as assets of increasing value, backing the local currency. Under these conditions, with a stable currency, citizens will purchase more gold as it is seen as a positive asset. Not unlike a rising stock, everyone wants an increasing investment...."

Dabchich says...

"...In my opinion, certain governments would like to see a lot of their gold holdings dispersed to the general public. Pursuading the general public to buy gold, and keep buying it on an on-going basis, would require a steadily rising price into which their Central Banks could sell with confidence. Obviously, the lower the starting price for this process, the more successful such sales are likely to be. And if people see the price rising steadily, that will bring in progressively more and more individual buyers...."

The cards begin to stack....

SteveHXavier#75246/12/99; 19:32:30

This is the FOA post that tells me we have two flow charts, gold certificate and physical gold:

from FOA:

"...The process: An oil country (or others) goes to London and purchases one
tonn of gold from a Bullion Bank. The BB borrowed this gold from the CB
(leased). The one tonn gold certificate is transferred to the new owner.
The gold stays in the CB vault and the owner goes home. The CB leased
this gold to the BB and expects it to be returned plus interest. The BB
financed the Actual Purchase of this gold mortgaging assets of the
buyer. The BB, who created the loan, then uses the cash arranged in this
venture to contract with a mining company (or anyone wanting a
gold/cross financing deal) to purchase production gold, using this cash
to pay for it. In the eyes of the mining company, the BB just sold gold
on the open market, for cash, and will purchase future production at the
contracted price. The mine does not know where the gold came from, only
that it was sold and a fixed cash price is waiting. Of course, most of
this made more sense when gold was higher. There were thousands of these
deals, structured in every possible fashion. Look to the volume on LBMA
and you see where the future reserve currency is traded today!"

SteveHXavier#75256/12/99; 19:38:42

Here is a further FOA statement that shows there is definetly two types of leases. What is more, it would seem that you need to factor the Euro as a payback method in your chart for the gold certificate diagram, as an option to gold. In either case, this does a lot to give credence to the Euro as a reserve currency. What really strikes me here is that these few paragraphs seem to spell out exactly what is unfolding before our very eyes (and away from our eyes too):

FOA again:

"Now when we look at this picture, who is at risk here? The Euro CB Group
still holds the physical gold and will buy it back from the new owners,
if asked, using printed Euros. The new gold owner has just replaced his
dollar reserves with either bargain priced gold, or Euros at an exchange
rate never to be seen again! Some of this was done to buy the pricing of
oil in Euros. The BB owe the CBs 14,000 tons of gold that they must
collect inthe future from producers or currency speculators. And they
must collect it by paying what will be a, then, ridiculous price of
$300/$400US, while the world market price will be, well, a little

Cavan ManTo SteveH#75266/12/99; 20:37:29

I do not understand what you are saying sir. Are you inplying that the dollar for example would become (again) gold backed by such a strategy? I guess I am missing it completely. You seem to be making at least a couple of completely different points at the same time.
Peter AsherTurbohawg#75276/12/99; 20:38:00

I just came back in from turning rocky top soil into seedable earth, so bear with me if my huffing and puffing spills over into the content. --- Last first, your #7521. By servicing debt, I mean the productive capability to do that. All those dollars out there are a call on the productive capability of the US of A. Dollar debt is the right to future production which must be delivered over and above the flows necessary to balance the present time exchange. If our massive greed and luxury driven economic machine keeps roaring along at full bore, it will have the quantity of production to service debt while still maintaining a standard of living (full employment, able, satisfied workers) that keeps things well lubricated and humming along.

As to cash and the money supply. Isn't cash in circulation part of the figures. (M-1 = demand deposits and cash in circulation, right?) People either have their actual (Fiat) money) in the bank, or in their possession. If they deposit it, it goes in the vault and they have a receipt (pass book, checking deposit etc.) with which to take it out again. When they do, the bank shows less on its ledger. That by the way is the big misunderstood aspect of the Y2K, two billion print out. It will only convert deposits to FRN's, not increase the money supply.

Finally, about Treasuries, wouldn't 'liquidation (sales) just transfer cash from the buyer to the seller? It seems that you would need to have actual redemption by the government to reduce the money supply.

I hope I'm being clear enough here with an instant post.

Cavan ManSteveH#75286/12/99; 20:39:34

Since GOLD is real money, why would CBs want to see the possession of it transferred via sales to their constituents? I don't get it please.
BeowulfAnyone see this happening?#75296/12/99; 20:57:07

Could it be that the central banks are setting up the world currency systems for a collapse, at which point people will be running to banks to withdrawl what isn't there. In order to make people happy they credit the peoples accounts with digital dollars and create a digital system, what they've wanted all along. To me this seems like something that could happen, what with the overwhelming use of credit cards and debit cards most people will be content with that. Anyone else believe this could happen? Comments please.
SteveHCavan Man#75306/12/99; 21:49:29

It is confusing. I am pointing out patterns between Dabchick and FOA; also helping Xavier develop a gold-leasing flow chart; and stating that there are at least two, perhaps three, factions at work which is what muddies the water. Therein lies the confusion: the two, maybe more factions at work here. Each with their own agendas -- Euro/Bis is gold and Euro flavored; US$/IMF is dollar-based; some third faction keeps popping up too that seems to favor digital currency (is it a subset or one and same with US$/IMF? Don't know).

Regarding Dabchick and FOA, I see a parallel finding that both have arrived at seemingly in separate discourse, to wit: gold ownership spreads to common folk through gold or the Euro. I believe that is the Euro/Bis faction.

The negative press against gold, the IMF gold and BOE Gold sales, that is the US$/IMF camp.

Then you have the Martin Armstrong digital world currency camp that occasionally surfaces. Whether that is aligned with one or both or none of the above is yet to be determined.

Regarding Xavier, he or she has developed a flow chart of gold leasing that hopefully will help illuminate the flow of gold and money. The problem is that there appears to be two or more types of leases: gold stays at CB's and gold leaves CB's. I believe, per FOA, that the gold stays at CB's is the Euro/Bis flavored lease. Gold leaving the CB's is the US$/IMF style lease.

When gold leaves the CB it must be returned as gold. The US$/IMF leasees seem to be in quandry in that they can't repay the loans with gold, so they must default (not an option), repay in gold (thus IMF gold and BOE gold sales?), or repay in US$'s (not preferred but may have already been done in LTCM's case), or repay in Euro's (would tend to strengthen position of Euro in international circles and would likely be avoided if possible by US$/IMF CB's but preferred by Euro/Bis CBs). The dilema is that insufficient information exists or is not readily available to ascertain this information thus the confusion. All conjecture it is based on known and guestimated information.

What seems to be confirmed by world events is that US$/IMF faction is really negative on gold, which seems to lower its value. Most of us believe this is because they can't tolerate any significant rise in the POG (price of gold). It may also be to buy time while they try to free up sufficient gold reserves through IMF and BOE sales. Who knows for sure? Not I.

The pieces of the puzzle seem to be fitting together in the A/FOA model. One must try to factor in sources of information so as to determine the filters applied to said information. In other words, if FOA says something, he appears to be in the Euro/BIS camp. If Soros says something, he appears in the US$/IMF camp, etc.

I remain neutral here. I just want to know what the heck is going as I believe all of us do. Sure is fascinating, eh?

USAGOLDTest#75566/14/99; 1:43:54

USAGOLDBrooms, IMF sales and such....#75576/14/99; 2:12:11

Well, now that I am up, I thought I would try posting something to see if the site is really back in operation.

"Tietmeyer said in an interview on German radio that the German central bank, which has long opposed such a move, was not dogmatically against the idea (IMF gold sales), but would have to be convinced of the economic sense of such a move to give its approval."

I haven't had a chance to chase this story all the way to its beginnings but it appears to me that the Germans are less than lukewarm about the idea of IMF gold sales and Gordon Brown and the boys over in foggy Londontown still have the problem of getting this thing through the U.S. Congress. Tsk. Tsk. Details. Details. Reuters it would seem has taken this story and run with it despite a small obstacle or two. One wonders if this isn't an acute case of one talking his book -- in this case the British gold/financial industry in deep, deep trouble. If there is a big hedge fund about to bite the dust maybe it carries the Queen's seal on its incorporation papers?? Just speculating, of course, but there is quite a bit of debris floating about the financial world these days. I can think of no other logical reason for the ceaseless grovelling and pathetic anti-gold witchery practiced by the British Exchequer.

Ah...It's good to be back.

A wonderful board in my absence, fellow knights and ladies, with many good Daily Market Reports.

Usul, you are a clever fellow, my friend. Perhaps you have an allegory for us with respect to the goings - on at the Exchequer's office. And maybe the good people of UK could put one of those brooms to better use? Like a bit of housecleaning at Threadneedle Street? Better yet....#10 Downing?

SteveHGold forum withdrawal#75586/14/99; 5:19:21

Tried to get in all day yesterday. Missed the forum. August gold is now...$260.60.

Seems like the IMF decided to sell gold and Bloomberg? decided to do a full-court press about it, although it appears that they have some of their facts incorrect. Seems like a good time to write Congress about not supporting said sale.

SteveHWorth repost#75596/14/99; 5:30:51


Date: Mon Jun 14 1999 06:15
rhody (LEASE RATES are still low, and that tells me the CABAL is still) ID#411440:
Copyright © 1999 rhody/Kitco Inc. All rights reserved
in firm control. Right now, the spread between one month and one year
rates in gold is .65% It should be closer to 1.0%. This suggests to
me that gold is being subjected to considerable selling pressure, but
not as much as one week after the BOE auction announcement when the
spread shrank to .35% as speculative shorts piled on and pushed up
near term rates, while mines had not begun to hedge seriously. Right
now mines are hedging and shorts are still borrowing to short, so
the spread is larger, but still displays a very negative pattern for
Take silver as a contrast. The spread there is 2.5 to 3.0%, and
that is a more "normal" pattern. When these markets are about to
blow, I think you will see much of the initial spot price rise disappear
into a lease rate surge, not a huge rise in POG/POS. Oh, the POG rise
will happen. We should see $5 and $10 spikes, yet on a percentage
basis, I think we will see doubling and tripling of lease rates. very
quickly. Meanwhile it will take months for gold to double. FWIW/IMHO
The lease rate pattern signifies all is well with the CABAL and its
control of pms. No bull yet.

TownCrierShift in sentiment from U.S to euro begins...#75606/14/99; 5:32:14

Significant rise in percent of fund managers now bearish on U.S. equities, while majority see the euro as the most favoured currency over the next twelve months.
FOAThe two months of opportunity to buy gold is ending!#75616/14/99; 5:40:12

""""" If approved this week at a summit meeting of the Group of Seven industrial nations in Cologne, the proposal would""" See link above.

At this same meeting, new rules of disclosure, for international hedge funds, will again be considered. The gold sale will, like the BOE sale, also be used to balance a very chosen few of the "out of balance books"! All of this is done prior to a major shift in gold valuations, brought on by Euro / BIS actions. The US will openly go along with this change. Please see my posts stating that these last few weeks were the last opportunity to find gold at affordable (and deliverable)prices! The "era" of "this new gold market" that Another was scoffed at for discussing years ago, is over!

SteveH, the long fuse on the dynamite has been lit. Everyone is grabbing their gold and running like hell! Why, because, this time no one is remaining to attempt to put out the burning string. As Another last said, the tide is now changing. I will stand, quietly at a safe distance for a
while. FOA

TownCrierUK: A high pound and shrinking exports are still slowing the economy#75626/14/99; 5:50:48

The pound has been thought to be too strong, and therefore sterling has been the main preoccupation of the Monetary Policy Committee of the Bank of England, prompting several rate cuts.

Could gold sales be an attempt to kill TWO birds with one stone? In addition to fostering a weaker pound, the need/desire to bring real gold into the market seems self-evident.

"Given that the euro area accounts for half of British trade, euro-enthusiasts will suggest an obvious solution to exporters’ worries." A THIRD bird?

TownCrierThe price of gold#75636/14/99; 6:05:22

This three week old article from (free registration is required) is repeated here for the accompanying graph of the price of gold since 1970. Get comfortable with the idea of a "sudden" vertical spike in has happened before in the real world.
Junior@ FOA - New Gold Game#75646/14/99; 6:11:02

FOA - Similar "Thoughts" from Kitco tonight - Thanks to "goArmy"
Date: Mon Jun 14 1999 01:15
goArmy (@THC May be this is the reason for Jun Rumors) ID#43487:
Copyright © 1999 goArmy/Kitco Inc. All rights reserved
THE Group of Eight leading powers will agree on the introduction of laws regulating hedge funds at a summit meeting in Cologne, Germany, on June 18. The G8 agreement is expected to be forged after the US, which was previously opposed to such a move, changed its stance towards regulating hedge funds activities, the Yomiuri Shimbun says, quoting international financial sources. Hedge funds, which have a wide investment portfolio spanning government securities, financial futures and options, are largely blamed for financial crises in Asia, Russia and South America by pulling out large sums of short-term capital. Because the funds are small private investment partnerships for the rich, they do not need to disclose as much information as other financial institutions. As a first step towards regulation, the G8 plans to improve relevant legislation in each country to force hedge funds to disclose information on their finances. The hedge funds regulations will be included in a report after a meeting of G8 finance ministers in Frankfurt on June 12 and will be in a declaration issued after the summit meeting on June 20. The G8 comprises Britain, Canada, France, Germany, Italy, Japan, Russia and the US.
According to Michael Kosares ( whose Gold Report shares the web site with our own market comments ) , the BOE announcement may be aimed at helping speculators out of trouble ahead of new accounting standards that will go into effect this summer by the Financial Accounting Standards Board ( FASB ) . These standards will impose exposure of derivatives holdings, making speculators more accountable. A sustained rise in gold prices would rapidly unwind the value of the many bearish gold trades further reducing their ability to cover their shorts, forcing the disclosure of many undesirable positions.

JuniorBIS & S/Africa Gold Sales #75656/14/99; 6:27:54


Monday June 14, 7:32 am Eastern Time
S.Africa calls for regulated official gold sales
LONDON, June 14 (Reuters) - South Africa's Reserve (central) Bank on Monday suggested future official sales of gold be conducted in a regulated manner through the Bank for International Settlements (BIS) to ensure market transparency and stability.

James Cross, deputy governor of the Reserve Bank told delegates at the Financial Times World Gold conference that official sector sales should be done in a transparent way.

He said 16 of the top 20 official sector holders of gold were voting members of the BIS -- accounting for around 90 percent of total world official sector holdings.

``We feel that the Bank for International Settlements could play a large role,'' Cross said.

He suggested that official sector sales of gold be conducted through auctions by the BIS according to a set auction calendar.

"Would it not be practical as in the case of government debt, which is marketed in an open and transparent fashion... that the voting members of the BIS commit to selling gold via an annual auction calendar which would be executed by the BIS.

``Would this not take away a lot of the uncertainty in the market. This is not a call to try and fix the price, the issue is that it will bring more transparency,'' Cross said.

Cross said this could ensure that the market would know where the next official sector sales would be coming from, which could add to stability in the bullion market.

``We feel it will go a long way to taking out a lot of the secrecy, the rumour-mongering and it would help a lot to create a stable market,'' Cross said.

SteveHGold just jumped $1.00#75666/14/99; 6:28:39


Did you see it?

TownCrierThird World debt cut by £44bn#75676/14/99; 6:31:16

Finance ministers of the G8 countries, meeting in Frankfurt, gave their backing to a proposal from Gordon Brown to write off debt of the so-called heavily indebted poor countries.

Modern currency is only as good as the commitment to repay a loan. What does this debt-writeoff portend for the value of the paper in your wallet? Got gold?

JuniorBIS & S/Africa Link#75686/14/99; 6:33:07

Yes, but I'm not excited until Gold breaks $325. Some how I don't think that will take long. Or will that be 325.EURO Dollars?
JuniorS/Africa Calls forTransparency in International Gold Trading!!#75696/14/99; 6:40:18

That will be a first if and when it happens.
Cheers and good night from the wonderful land of OZ DownUnder.JR

Peter AsherJuicy, Medium Rare Food For Thought#75706/14/99; 8:32:11

This paragraph in Peter Cook's article posted by canamami saturday, raises an intriguing question. [ the phrase in brackets]

>Hidden from view for now is the greater potential of the euro, in terms of its acceptance as a
reserve currency, in terms of [savings and investment growth and the expansion of European
capital markets;] also hidden for now is the inherently weak position of a U.S. economy in which
private savings have disappeared while foreign borrowing soars. That will change. By next
year, the euro-U.S. dollar relationship could be very different.<

Intrinsic to that expansion would be growth in the money supply. As the Euro is required to be backed by gold @ 15%, then more gold would be required in reserve. Who buys that gold and more significantly where does this PHYSICAL gold come from in a desperately short market.??? And at what price?

Finally, if a much higher price is paid for the required gold, how does that effect the valuation of the Euro and its relationship with the dollar?

Gandalf the WhiteStrange Monday Morning at the NYSE !#75716/14/99; 8:38:59

WOWERS --- The PPT is really worried this morning ! -- Note that the ($Prem) S&P Futures opened at the 20. level and is not lower than 13. so far this morning. -- The last few days the $Prem never got higher than 5. !!!!! -- However, things are not looking to good as the S&P is near unchanged and the DOW only up about twenty. --- The sharks are starting to smell blood on the Street.

XavierGold "Flow" chart v.3#75726/14/99; 8:45:15

I'm overwhelmed with gratitude for the detail of your responses.
The Gold Flow Chart V.3 is not so much "flowing" anymore as "convoluting"..hope you have a big screen! Tell me if its slow to view etc.
From knowing little of the gold trade to being flooded with information and theories, I get the impression that the info/bits & pieces from everywhere indeed seem to form an emerging non-contradictory whole. I'm still too far removed from the game to really know 'what the heck is happenning'. But it is fascinating, for sure!

I am trying to "divide" a v.3 Flow chart into $US/IMF vs $Euro/BIS 'factions'. Difficult. For example, the BIS Board of Directors includes members who one would think belong to the opposing camp, such as Alan Greenspan and the representative of the dollar-holding CBs of England, Canada... and many more in the long list of 45 CBs who attend BIS meetings.
Or perhaps America does not belong to this "inner circle" within the BIS. It seems that the American CB ( thats the "Fed", right? ) sold off its shares in the BIS to the public, or did not excercise the right to purchase them, and Greenspan/FED is merely a representative of, but not owner of, those shares.( ).
From what I can infer from the chart I have drawn up:
Just as there may be 2 types of gold leasing from the two factions ( ie 1. physical 2. gold certificates ) there surely must be two different types of Burrowers and Purchases. It would be handy to know if, for example, the LTCM burrowed and sold 300 mt of physical, while Scotia Mocatta burrowed and sold x mt of certificates. Maybe we could find out which BBs deal in physical/certificates by inquiring by phone about their transferal of ownership methods!

I am still working on understanding and incorporating your suggestions and FOA's posts. I wonder if A/FOA could enlighten us further concerning this ECB gold leasing via gold certificates, or factions within the BIS, if they exist.

( BTW, Xavier is a Man's name! )


Everyone: comments concerning Gold Chart V.3 welcome. Who are the other large "hedgers", like Barricks or Other rumoured-to-be-shorting BB's that I have not mentioned?

USAGOLDToday's Gold Report: Bundesbank Stubborn about Gold Sales, Gordon Brown Inexplicably Continues Anti-Gold Assault#75736/14/99; 9:10:24

MARKET REPORT(6/14/99): On a day when the dollar is taking most currencies out to
the back shed, gold seems to be holding its own in the early going. Some professional gold
market watchers, like Gold Fields Mineral Services' Phillip Klapwijk, were expecting a bad
day for the yellow metal today after the announcement over the weekend that G-7 had come
together on the gold sales issue. However, upon closer examination of what was said,
particularly by the German central bank, it is still unclear whether or not the sales will occur
and, if they do, whether they will be conducted in a manner and amount sufficient to do
further damage to the price.

As a matter of fact Bundesbank president, Hans Tietmeyer, appeared to be downright
stubborn about the British Exchequer latest anti-gold gamut saying that the German central
bank was not "dogmatically against the idea, but would have to be convinced of the
economic sense of such a move to give its approval." The statement appeared to be a far cry
from the ringing endorsement of gold sales sought by Gordon Brown, chancellor of the
British Exchequer and the reigning black knight of the nearly ceaseless anti-gold barrage.
So its back to the drawing boards, it seems, for Gordon Brown in this latest round of
anti-gold activity. There is also the small obstacle of getting IMF gold sales through the
U.S. Congress, so though the press was quick to put gold in its coffin, it seems the patient
is not quite dead. Though we would not be the ones to minimize the effects of the all out,
no-holds-barred anti-gold assault led by Gordon Brown and the British government. Once
again, we can only ask "Why?"

As it is gold appears to be muddling along this morning despite the above. Reuters reports
Macquarie Equities as saying that "around one quarter of Western world gold mines, or
about a fifth of Western world mine supply, were operating with total cash costs higher
than current price levels. Based on data compiled by industry consultants Brook Hunt and
looking at average mine costs for the period 1999 to 2010, Macquarie said the weighted
average total cash cost was $223.60 an ounce. Some 270 gold mines accounting for 1,806
tonnes of production had weighted average costs ranging from $215 -- which was where
U.S. producers were located -- up to $244 for South Africa's mines, which were the most

Since South Africa remains the world's single largest gold producer supplying about
one-fourth the total from mining that $244 figure appears ominous indeed especially to
those who have made substantial gold loans to those very same companies. What happens
when the hedge runs out? Do we just shut South Africa down?

Rumors surfaced at week's end about another hedge fund in trouble - this time the gigantic
Tiger Management. Tiger was quick to deny problems though there was a spate of rumors
that the Fed was meeting over how to bail out still another hedge fund pushed against the
ropes. In the early press reports, word was that Tiger was "appealing to the Fed for help"
late last week belying the Top Gun image they, like Long Term Capital Management, so
assiduously cultivated among well-heeled investors. Those well heeled investors, by the
way, seem to be bailing out in droves from hedge funds like Tiger Management -- which
reportedly had to come up with $3 billion in redemptions. Tiger vehemently denied the $3
billion in redemptions out of its $13 billion in overall capital -- all of which shows that even
the mighty must perform in order to keep the cash flowing. Tiger's portfolio according to a
Reuters report dated 6/11/99 is down 8% year to date -- not the sort of trend investors like
to see from these highly leveraged funds. A little innocent smoke can lead to a major capital
conflagration down the road.

That's it for today, fellow goldmeisters.

In the latest News & Views, we ramble through the many issues surrounding the gold
market and give the reader a good, solid overview of what's happened in this topsy turvy
market of the last month or so. If you are looking for some short and sweet analysis as to
what is going in the gold market today from a multitude of sources, you'll like this
upcoming issue. It is a quick and interesting read. Please go to our ORDER FORM or call
Marie at 1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly
newsletter -- and introductory packet on gold ownership.

Aragorn IIIYou must admit you have been warned...#75746/14/99; 9:16:51

A review of things said not long ago. With time comes fresh prespectives for many.

"...despite taut labor markets, inflation also fell to its lowest rate in many decades by some broad measures, although a portion of this decline owed to decreases in oil, commodity, and other import prices that are unlikely to be repeated."

"Equity prices are high enough to raise questions about whether shares are overvalued. The debt of the household and business sectors has mounted, as has the external debt of the country as a whole, reflecting the deepening current account deficit. We remain vulnerable to rapidly changing conditions overseas, which, as we saw last summer, can be transmitted to U.S. markets quickly and traumatically."

"Foreign savers have provided an additional source of funds for vigorous domestic investment. The counterpart of our high and rising current account deficit has been ever-faster increases in the net indebtedness of U.S. residents to foreigners. The rapid widening of the current account deficit has some disquieting aspects, especially when viewed in a longer-term context. Foreigners presumably will not want to raise indefinitely the share of their portfolios in claims on the United States. Should the sustainability of the buildup of our foreign indebtedness come into question, the exchange value of the dollar may well decline, imparting pressures on prices in the United States."

[Ask yourself as you read this following section if there is a fundamental difference compared to the debt write-off suggested by TownCrier's article of the G8.]
"The Russian government's decision in mid-August to suspend payments on its domestic debt and devalue the ruble took markets by surprise. Investor flight exacerbated the collapse of prices in Russian financial markets and led to a sharp depreciation of the ruble. The earlier decline in output gathered momentum, and by late in the year inflation had moved up to a triple-digit annual rate. Russia's stabilization program with the IMF has been on hold since the financial crisis hit, and the economic outlook there remains troubling.
The Russian financial crisis immediately spilled over to some other countries, hitting Latin America especially hard. Countering downward pressure on the exchange values of the affected currencies, interest rates moved sharply higher, especially in Brazil. ... With budget reform legislation encountering various setbacks, market confidence waned further and capital outflows from Brazil continued, drawing down foreign currency reserves. Ultimately, the decision was taken to allow the real to float, and it subsequently depreciated sharply. Brazilian authorities must walk a very narrow, difficult path of restoring confidence and keeping inflation contained with monetary policy while dealing with serious fiscal imbalances. ...the slow onset of the crisis has enabled many parties with Brazilian exposures to hedge those positions or allow them to run off."

[Acknowledgement of a better way.]
"Monetary policy certainly has played a role in constraining the rise in the general level of prices and damping inflation expectations over the 1980s and 1990s. But our current discretionary monetary policy has difficulty anchoring the price level over time in the same way that the gold standard did in the last century."

"...technological developments have progressively broken down barriers to cross-border trade. The enhanced competition in tradable goods has enabled excess capacity previously bottled up in one country to augment worldwide supply and exert restraint on prices in all countries' markets..."

[Concluding on a positive note.]
"Americans can justifiably feel proud of their recent economic achievements. Competitive markets, with open trade both domestically and internationally, have kept our production efficient and on the expanding frontier of technological innovation."

[From Testimony of Chairman Alan Greenspan--The Federal Reserve's semiannual report on monetary policy, February 23, 1999]

PH in LAInconsistencies in the mainstream propaganda.#75756/14/99; 9:29:12

Thank you, FOA, for the link to the story in the International Herald Tribune. It points up very well the problem we amateurs have while researching in the mainstream press and also underlines the important role played by critical thinkers like yourself.

I refer to the obvious inconsistencies woven into the mainstream story. They are so flagrant it makes even the most superficial observer blanch.

At the beginning of the article it is stated: "If approved this week at a summit meeting of the Group of Seven industrial nations in Cologne, the proposal would for the first time finance some of the debt relief by selling about one-tenth of the gold stockpiles of the International Monetary Fund." (The need for US Congressional approval is conveniently overlooked.)

Next, it is stated that: "the sale seems certain to further depress world gold prices, which have slid to their lowest level in two decades on government plans to unload the precious metal on world markets. Gold for immediate delivery, which closed Friday in London trading at $260.65 an ounce, was quoted Wednesday at $259.25 an ounce - its lowest level since May 1979."

This seems to be the whole and sole point of the article, since the rest of the numbers in the article leave the reader breathless with inconsistency. To wit: The total debtload is placed at "$220 billion, a sum so staggering that social critics and aid agencies say debt-service obligations trap these poverty and preventable disease." (Debt relief prevents disease; a new scientific conceptual breakthrough?) Since a relatively simple calculation shows that the proceeds from the sale of 10 million ozs. of gold would pay off scarcely 1.25% of the debt even at current prices (even though the article states that prices are expected to fall further with the announcement of future sales) another conflicting number seems to be necessary. So it is supplied:

"The Cologne program foresees as much as $70 billion in debt forgiveness" blithely states the article, without specifying from whence such a sum is to be derived...leaving the impression that the sale of 10 million ozs of gold will do the trick. $2.6 billion from the sale and a resulting $70 billion in relief...barely 3.7% of the relief coming from the sale of the gold. Talk about ballpark figures!

Yes, FOA! Your absence would be felt acutely (while you "stand, quietly at a safe distance for a while") even as we wait patiently for truth to manifest itself. The few facts sprinkled about in the mainstream press' propaganda soon confuse without enlightening analysis.

USAGOLDMath Majors/Engineering Students:#75766/14/99; 9:39:58

I invite you to consider the ramifications of a reduction in the gold supply of roughly one-fifth current mine production -- about 2500 tons. Then consider that the South African costs run $244 ($16 from the current price) -- that another 600 tons out of the equation give or take a few tons. Even when you add back in the British sale of 415 tons which will occur over five years (I think was the time frame); the Swiss sales of 1300 tons over a ten year period (if they occur); and the IMF sales of 300 tons (if they occur, no time period as yet). Please consider one very important fact: Once a nation sells its gold, it has no more to sell. Seems rather juvenile to state something like that but bedrock fundamental in its importance. In other words, once the British sell that metal can no longer be held over the market's head. Meanwhile mines fill up with water, third world (host) countries experience revolutionary breakdown, miners move on to better rewards, equipment rusts, environmental hazard multiplies, processing plants lock up from lack of use, etc.

All of this doesn't even quantify the problem from the hedge funds -- the other big market for gold loans and potentially an even riskier proposition for lenders. (As in...How many gold mines does Tiger Management own anyway?)

When you consider all this, do you think that those who lend the gold might be a little concerned about getting it back? I expect gold lending to run into a wall at this level and I think the problem is that the central banks lending gold see that problems ahead and like any lender their concern for getting their gold back overwhelms the nifty 1% they are getting for lending it. Watch lease rates. I think they are about to spike.

ss of nepCOLEMAN - Committee of 300#75776/14/99; 9:47:54

Does anyone know a phone number for World In Review
published by Coleman ?

The 1-800- number does not work from where I live.

Long distance information in Nevada ( 775 ) does not seem to be able to assist.

ss of nep (6/4/99; 9:15:52MDT - Msg ID:7141)
COLEMAN - Committee of 300
Coleman publishes a newsletter. WIR
WIR has a web page

Coleman has written a report on Gold & Silver.
ss of nep (5/27/99; 5:59:06MDT - Msg ID:6780)
Say What
Does the plot thicken, or is it just more of the same ?????

An interesting story here, about 250 pages, I have only
scanned a bit of it so far .

I think that I have read Atlas Shrugged about 5 times ......
BUT ....

Those of you that have a liking for Ayn Rand just may
change your point of view.
Do a search for Atlas Shrugged in the 2-nd of the above
two links.

Gold is cheaper now then 2 weeks ago, get more,
find a hiding place then
run away.

AELBeowolf -- currency collapse?#75786/14/99; 9:56:39

Beowulf (6/12/99; 20:57:07MDT - Msg ID:7529): "Anyone see this
happening? Could it be that the central banks are setting up the
world currency systems for a collapse, at which point people will be
running to banks to withdrawl what isn't there. In order to make
people happy they credit the peoples accounts with digital dollars
and create a digital system, what they've wanted all along. To me
this seems like something that could happen, what with the
overwhelming use of credit cards and debit cards most people will be
content with that. Anyone else believe this could happen?"

This is almost precisely the thesis in Mark Ludwig's book "The
Millenium Bug -- Gateway to the Cashless Society", which I am now
reading. Idea is that the Y2K threat to fractional reserve banking
will be used by the feds to recall all currency and go 100% digital.
Hmmmm. "Cash is king"... or maybe pauper? This might actually be
pulled off. However, there is the huge wildcard of precisely how bad
objective Y2K software and embedded-chip problems turn out to be
(probably pretty bad, but then who really knows?). The book has many
interesting passages; wish I had a scanner and OCR -- I would post a
few pages here (along with urging everyone to buy a copy, natch!).

Here's one passage from the "Personal Preparedness" chapter near the
end: "Cash will be important for at least a short period surrounding
the bank runs. However, anywhere from two weeks to two months after
the declaration of a banking holiday, you may be requested to turn
cash in or watch it become worthless. If you're opting out of the
cashless society, you'll have to be out of cash before that happens.
There will probably be a door open to redeem cash overseas after the
domestic recall date, but getting it out of the country will be very
difficult... although demonitization of Federal Reserve Notes may not
happen right away, if you see things headed toward the cashless
society, understand that it would be unsafe to assume they won't be
demonitized. As the deadline for demonitization draws near, they will
lose value as people will start to view them as problematic. You
don't want to get caught holding the bag then. On the other hand, if
we don't head toward the cashless society, you will want to hold on
to your paper money until the millenium bug actually hits. If the
money system really does go down [i.e. if Y2K-related banking
problems really are bad], they will be the preferred medium of
exchange for at least a while [yes, so I've thought, too]. Truly, the
period between when the bank runs start and the millenium bug hits
will be interesting and dangerous."

To me, all of this uncertainty simply re-confirms my main operating
preparation principle for the upcoming whatever-this-whole-debacle-
is-going-to-be,precisely: convert symbols to real stuff! Food,
metals, sneakers, etc., and even some FRNs. The only exceptions to my
"real stuff" rule might be late model and gas-guzzling autos, and
urban real estate, which are likely to depreciate. I do not think
that it is possible to go far wrong with this strategy.

-- Alan

PS: very interesting discussion thread on Y2K and banking:

mike55AEL#75796/14/99; 10:43:09

Alan -- I read your post with interest as the theme of the book you are reading discusses a concept that I have been mentally debating for quite some time, namely e-currency. I am not a proponent of e-currency for numerous reasons. And whether this change could occur within two weeks, two months, or two years of the Y2K rollover is somewhat irrelevant. I personally believe that if there are financial Y2K-related problems, people will be hesitant at first to accept such a currency change since they were already "once bitten" by computers (programs). However, if e-currency was forced by our and other governments around the globe, and the choice is between trading in your FRNs or a sharp stick in the eye, most will quickly acquiesce to the e-currency. Especially if the spin is that "it's the only way to get us out of this mess and get the economy rolling again". I hope it never comes to this, but it certainly seems possible over time (several years?).

So what would back the new e-currency -- debt, electrons, and/or a portion in gold? What if e-currency were backed as the Euro is proposed to be?

Whither gold?

P.S. I will continue to trade paper for metal as funds permit, in spite of the ongoing point/counterpoint running through my mind.

TownCrierDepressed gold price "hurting poor countries" #75806/14/99; 10:50:40

Despite the headline, the media once again hammers the UK public with anti-gold rhetoric. The eventual backlash will not be pretty.
TownCrierJapan acts to stem rise of yen #75816/14/99; 11:00:58

Japan's central bank bought up dollars to slow a rise in the Japanese currency because a stronger yen is a threat to the exporters that power Japan's economy by making their goods more expensive overseas.

Wouldn't a wealth-savvy Japanese resident conclude that gold savings is therefore more attractive than any attempts at yen savings?

TownCrierGreenspan Cautious on Productivity#75826/14/99; 11:05:47

Greenspan said in testimony today to the congressional Joint Economic Committee "...experience advises caution." He will testify Thursday on monetary policy.
Cavan ManMike55#75836/14/99; 11:47:12

My friend, if it is any consolation, I am doing the same thing. I am retaining enough FRNS to be flexible. I do not have nor can I make the time to do a thorough "point/counter point". I came in late in the fourth quarter. There are still large pieces of the economy that are "cash businesses" ; Coin OP laundaries and parking lots to name a couple. Perhaps these are bad examples but when I go to the ballgame tonight and park my car and then sit in the stands and buy popcorn and peanuts, how do I pay with digital currency? My point is it would take a lengthy transition to get everyone on board and all systems up and running. E currency or dollar; what's the difference if not backed by substance (gold)? Gold is real money. Now, if you are alluding to marshall law and confication, that is another can of worms to be debated here.
Leigh(No Subject)#75846/14/99; 11:49:09

Re FOA's post #7561 this morning, I think I can understand why the US would "openly go along with a major shift in gold valuations." For every $1 rise in the POG, the value of its gold holdings (approx. 260 million oz.) increases by $260 million. If the price were to go to $1,000 or higher, the U.S. would be passively increasing the value of its hard assets. Am I on the right path here, or did FOA mean something else?

I would be SO grateful if someone would kindly tell me exactly how to go about buying Euros, and whether buying physical European currency now means that I can trade it in anonymously for physical Euros later. Thank you!

mike55Cavan Man#75856/14/99; 12:19:08

Yes, it is consolation to hear from others. I'll keep the point/counterpoint right where it's been -- mental volley only. On the "cash only businesses", I agree with you completely. That's why I mentioned several years to affect a changeover. In fact, many economies and peoples around the world are not nearly as "e-currency compliant or adaptable" as the U.S. Also, I forgot to mention that I don't believe that Y2K (problems or not) would be the reason for a conversion. It could be *used* as a reason, it could *be* the reason, but the possibility of e-currency has been around for a long time. Martial law or confiscation? I'll plan and attempt to protect for what I can, but some things are beyond our control. No need for debate here. And like you, of course I agree gold is real money, otherwise I wouldn't continue to trade paper for it!! Thanks for your comments.
AristotleLeigh, in answer to your request#75866/14/99; 12:48:01

"I would be SO grateful if someone would kindly tell me exactly how to go about buying Euros, and whether buying physical European currency now means that I can trade it in anonymously for physical Euros later."

Any large bank worth its salt can meet your foreign exchange needs. It is a very simple exchange to pay US Dollars at the current exchange rate (plus the bank's commission) for a wide variety of national banknotes.

Because physical euro tender will not be introduced until January 1, 2002, you would want to obtain one of the euro-member national banknotes if you were to insist on a physical "euro" during this interim. Upon euro tender introduction, there will be a time period not to exceed six months (latest deadline is July 1st, 2002) in which legacy currencies must be redeemed prior to losing their tender status.

What a hassle! Are you planning on a trip to europe, and therefore are wanting to secure a supply of spendible euro cash? It would be easier yet to open a bank account in which you would hold your euro numbers as a ledger entry, ready to spend (or swap for physical cash) at whatever point you need them.

If not for vacation, is this something you are considering as a flight of safety from a downturn of the dollar? You might discover to your dismay, while sitting on a large euro account, that when the dollar adjusts and Gold turns, Gold will appreciate vs the euro, too. And you'll surely wrinkle your nose at good planning but poor execution. "I shoulda got the Gold," you'll be thinking.

Enjoy your travels(?) ---Aristotle

TownCrierCommodities-Aluminium, nickel shoot up, gold rebounds#75876/14/99; 12:56:39

Real things demand higher prices
TownCrierNY Precious Metals Review ---(It's good to have you back, MK!)#75886/14/99; 13:29:21

By Melanie Lovatt, Bridge News
New York--Jun 14--
Palladium was pressured by the dollar's climb against the yen and
continued jitters over rumored selling last week by giant hedge fund Tiger
Management, even though sources close to Tiger have denied that the
company has offloaded any of its palladium positions. Weak palladium
prices and a stronger dollar also helped push platinum lower, while gold
and silver settled little-changed amid dull trade.

In palladium "there are two sides saying two different things," said
one trader, noting that some brokers are still suggesting that Tiger was a
seller of palladium last week, while others remain doubtful.
One market observer said that Tiger may have done some palladium
lending last week, and possibly closed out some gold shorts, although this
could have been "just part of their normal dealings."

One hedge fund manager, who did not want to be named but was close to
the Tiger management team, said Friday that Tiger was not unwinding any
positions in the Treasury, palladium or gold markets.
However, traders noted that the rumors themselves were enough to make
palladium jumpy, given that Tiger is still perceived to be one of the
major longs.
Talk circulated Friday that Tiger was closing out some positions
because of large redemptions by the fund. However, Tiger said Friday it
could pay out these redemptions fourfold.
While some players suggested that dollar's strength against the yen
was another main culprit behind overnight sales, Asia dealers said that
the Tiger rumors had given some speculators an excuse to take profits on
Tokyo Commodity Exchange.

Gold and silver were subdued, as a result of the absence of many
market players attending the Financial Times gold conference in London
Aug gold settled down 30c at $262 per ounce, while Jly silver settled
down 1c at $5.105 per ounce.

"It seems like $260 continues to be a magnet for the market -- there
is decent 2-way trade at this level," said David Meger, senior metals
analyst at Alaron Trading. He said that there was "enough talk" of a
short-covering gold rally ahead of the UK Treasury's first gold auction
set for Jly 6, that it might become a reality. "That's why we're not
seeing aggressive selling below $260, not of the nature we saw below $265
and $270," he explained. "We can't follow through because the market is
already so short--we need consolidation before move lower and $260 is
support for the time being," added one trader.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

Gandalf the WhiteThe world from another view --- #75896/14/99; 15:22:34

Now everyone, you think that we have it bad. -- Just look at this and be thankful. AND this was the GOOD news, other deleted as it would make you cry!!! Some light side also.

June 13, 1999
THE WEEK in Thailand
Popular PM
A new Assumption University survey showed 70% approve of Prime Minister Chuan Leekpai's performance, while 26% said they were dissatisfied. But 51% or more gave a thumbs-down to the performances of the finance, commerce, education and university affairs ministers. The survey included 2,804 people, and Mr Chuan's popularity was surprisingly higher up-country than in Bangkok.

March to power
Former and would-be future Prime Minister Chavalit Yongchaiyudh said he plans a month-long, 100,000-mile long "march around Thailand" to campaign for a second shot. Gen Chavalit was forced from office by street protests in 1997 after the military refused his request to censor the media and declare martial law. He said he might not be able to complete the trip because the government might collapse any
day now.

Thai media tops
Singapore-Expatriate businessmen in Asia believe Thailand, the Philippines and Japan have the freest press. They put China, Vietnam and Malaysia at the bottom, with the most-controlled media. Overall, said the Political and Economic Risk Consultancy, "Governments in asia seem to be taking a more liberal attitude toward press freedom these days."

The naked city
Developers starved for both cash and credit have abandoned 364 unfinished buildings in Bangkok. Some have become magnets for crime, and all are deteriorating to the point they will need major renovations simply to complete them. The skeletons of dead construction projects reflect overbuilding by developers, a key cause of the recession.

The longest race
Deputy Prime Minister Supachai Panitchpakdi said no one should hold their breath waiting for break in the WTO leadership deadlock. "Everything is still the same," said Dr Supachai as he returned from his Latin American trip with Prime Minister Chuan. Mike Moore of New Zealand and the Thai candidate "still can't accept one other." The concern at World Trade Organisation headquarters in Geneva was that the Thai and the Kiwi will still be at each other's throats in November, when crucial global trade talks are to begin.

Deadly combat
Chiang Rai-Border Patrol Police shot dead seven tribesmen from the Wa State [ NOTE THAT IT IS NOT WA(shington)State ]Army drug-trafficking group. Police recovered one million amphetamine pills after the Mae Chan district gun battle. It began when a 30-strong BPP patrol under Pol Maj-Gen Thawal Bunsoong came across about 20 armed men in the jungle. They opened fire when told to stop for a search and a fierce gunfight ensued for about 30 minutes.

Workers' bomb
Police blamed growing labour tensions for a bomb explosion near the office of the governor of the state-run Electricity Generating Authority of Thailand in Nonthaburi. The command-detonated bomb blew up just after governor Veeravat Chalayont had left work. Police believe the small device, planted near a tree, was intended to serve as a warning rather than kill.

Madder cows
Thailand joined most of Asia and the world in a sweeping ban on Belgian farm imports. The biggest food scare since mad cows raised fears that food was contaminated by the cancer-causing chemical dioxin. Belgian chocolates, dairy products and meat were banned by the Food and Drug Administration. Goods already on store shelves were to be removed. Singapore has issued a blanket ban on imports of all European meat, eggs and dairy products.

Foreign exodus
The Labour Ministry announced there will be no more labour permit extensions for foreign workers. That means that 90,911 labourers, mostly agricultural workers, will be on their way home, starting in August. About 80 percent are Burmese, and most of the rest are Cambodian. The workers were given a year of grace last year-after their Thai employers said they could not survive without them. They perform unpopular jobs for low wages. There are also an estimated 600,000 unregistered labourers in the country.

New bank sale
The Bank of Ayudhya, known as Bay by investors, announced a strategic tie-up with Taiwan's South East Asian Investment Holdings Corporation. Company sources aid SAI planned to take a 10 percent stake in Bay, Thailand's fifth largest bank. Krit Ratanarak, bank chairman, said teh Taiwanese will bring in other investors as well. The bank is to restructure debt with a number of the recalcitrant corporate clients.

Bonus payment
Bangkok Bank [ #1 Thai Bank ] announced it will pay employees a half-year bonus of one month's salary on June 30. The biggest bank also paid bonuses last year, on schedule, but called them "special welfare aid" payouts and sparked fear that normal annual bonuses were ending. Third-largest Thai Farmers Bank told its employees there won't be any bonuses this year again because, like most businesses, it is still losing money.

Shin does NY
Telecoms giant Shin Corp, once known as Shinawatra, said it will be the first Thai company to list on a US stock market. The actual market wasn't identified. It has hired JP Morgan as its successor depositor of American Depositary Receipts-which are commonly issued by a US bank in exchange for shares of a foreign corporation. Chairman Boonklee Plangsiri said the company will "markedly increase our visibility and liquidity for US investors," and will start by increasing permitted foreign ownership from 35 to 49% -$120 million at the company's current share value.

Alfa comeback
Alfa Romeo spokesmen said the company is returning to Thailand and to Asia. The decision has yet to be made where to build the cars-Thailand or Malaysia. Fiat starts making cars again in Thailand next year, so it may bring in the Alfas as well. Asian Alfa Romeo will be the 156 mid-sized family car which is popular in Italy-but with an automatic gearbox, which Italians hate.

Incentive plan
A new economic stimulus package will include tax incentives for foreign investors, Deputy Finance Minister Pisit Leatham said. The new package will encourage foreign investors to locate production in Thailand. It may also include a securitisation scheme to provide assistance to the moribund property sector.

Record budget
The cabinet approved a budget of 860 billion baht for fiscal year 2000. It will be Sawatdiparp Kantatham, director of the Budget Bureau, said the budget will run a deficit of 110 billion baht-around 2% of gross domestic product. By comparison the budget this year is 800 billion baht, with a planned deficit of 4% of GDP.

Greatest debts
The World Bank ranked Thailand as the world's ninth largest debtor, immediately after Argentina, Russia and India. But the Banks annual global development report said the country has the highest percentage of short-term debt: 38% of the total.

© Copyright The Post Publishing Public Co., Ltd. 1999
Last Modified: Sun, Jun 13, 1999


TownCrierFOCUS-Oil holds strong gains as stockpiles ease#75906/14/99; 15:23:00

Global petroleum inventory surplus fell in April for the first time in two and a half years.
TownCrierInternet Sector Gets Slammed but Dow Closes Solidly Higher#75916/14/99; 15:51:13

Easy come, easy internet stocks take a beating
TechnicianPoll Results#75926/14/99; 16:24:26

Thanks for those who visited my web site and took part in poll. Results for strongest markets this year:
77% gold
13% CRB
10% oil
0% DOW
0% $
No surprise, I like gold to. But from my perspective CRB has just about everthing technical going for it. In my opnion, the $64 question has been answered. Inflation or deflation? For the time being count on higher cost of living. Meanwhile I will be content counting my bullion.

SteveHAugust gold now...#75936/14/99; 19:15:37


This in from kitco. Anybody know what he means by mt?

Date: Mon Jun 14 1999 19:26
africanminer (Canada bought 200 mt AU) ID#219348:
From a very credible source…..Purchase was out of Asia @$252.50 per oz. ( private transaction ) don't expect any web site news article on this one.

XAVIAR, I am having a rough time with the chart because I don't have a printer (here anyway) and find the logic difficult. I can't follow the money. When I can print it on one page and go over it I will let you know more. In the meantime it would be nice if others through there two cents in on it. Thanks for the work.

Gandalf the WhiteSteveH#75946/14/99; 19:20:16

Think metric tonnes.

SteveHSorry if this site was already posted#75956/14/99; 19:24:19

Good read, especially the Joanie part.
Gandalf the WhiteBTW, SteveH#75966/14/99; 19:25:06

You might also be interested in a bridge named "Galloping Gertie". -- I have a wonderful picture of it where it crosses the Narrows at Tacoma. Do not believe all you see, esp. on that other location!

SteveHGot to love great posts like this...#75976/14/99; 20:04:36

Date: Mon Jun 14 1999 16:39
ORO (Allen(USA) - I agree completely - however,) ID#71231:
I think the CBs are not sufficiently dumb to let the gold go into private pockets of "friends" alone. If so, they would not have had the gold price go this low for extended periods. This allows everyone to buy low. Meaning that they do this in order to get gold bullion to either a large buyer ( oil states ) or to allow the "little people" of the world to accumulate the metal ( to assure the existance of small pockets of capital in the event of a credit system meltdown ) - or both.
If the shorts were actually covering in a big way then the paper POG would rise, not fall.
Remember that "given sufficient rope, the financial industry ( banks, funds and investment houses ) , have allways managed to hang themselves". The actions of the IMF and BOE may have been intended as a way to save the paper shorts but have probably caused the reverse reaction since this constitutes "providing more rope".
This is the usual Western CB reaction. This is what they did for LTCM and their associated bankers and the rumored one trillion dollar notional value or their derivative book. They provided more credit by lowering interest rates and supplying sufficient liquidity to allow the players to buy the components of LTCM's long positions. The new owners must have been very happy with the results they obtained, since they bought so much new commercial and international debt.
Thus the industry shifted one of the many "crazy aunts" from one attic to another by marrying her to a new husband. Unfortunately the new husband was too weak to withstand his libido and they created a progeny of "troubled children".

AristotlePondering the future of e-currency#75986/14/99; 20:20:36

AEL, Cavan Man, and Mike55--your discussion today left me thinking about e-currency as I had lunch today, and I thought I'd try to reproduce my musings.

I would use my e-currency to buy an e-car with which I would road-trip (verb...please forgive me, all you English majors out there) to Denver to save the postman a little wear and tear on my next Gold acquisition. "What's an e-car?" you ask. Good point. I had better get me a REAL car instead.

Denver is a long way from here. I'll surely have to stop several times to purchase some e-fuel for my real car using my e-currency. "E-fuel?" you ask again. OK, consider this...imagine that I don't actually have to come into contact with the fuel--I simply drive into a service bay and hand a highly trained fuel attendant your e-currency card. After he plugs a hose into my real car for a brief time, I see my fuel gage register F (for full) and catch a sleight whiff of gasoline in the air. I am soon on my way. Had I not been so observant, could I maintain the fantasy that I received e-fuel in exchange for my e-currency? Perhaps. But my dumb ol' real car knows the difference. If it doesn't get real fuel, it won't cooperate on this hypothetical visit to Denver. The important thing we must note, and without any room for question, the fuel is REAL. I'm sure we would soon discover the similar truth about e-food when dinner-time arrived.

The question that must be asked is "What is e-currency?" Is it nothing more than e-NUMBERS? Cool. Check this out: 999,999,999,999,999! We are all on Easy Street because I am generous and willing to share! Oh, wait... it's not that simple, you say? Damn. It seems that there must be some real currency in there somewhere...

OK then, I've got an open mind. Tell me what it is. What is the currency? And while you're at it, tell me what a dollar is? What is a yen? What is a peso? What is a ruble? THEY ARE ONLY NUMBERS! Ledger entries, to be closer to the mark. Grab yourself some nines, my friends! But still, surely there is no amount of pretending that will allow us to accept that e-currency is simply e-numbers, but there you have it. Our legal tender today is nothing more than numbers, and a good portion of it exists only as electronic transfers already. Oh, sure, as in the fuel station example, if we are very observant with a keen sense of smell when we visited a currency station (bank), we might catch a faint whiff of contracts in the air. Only in that regard is our modern currency currently real. My, how easy it would be to replace this cumbersome "currency" accounting system (that requires a helluva lotta trust) with something simple and elegant as Gold weight for currency, with ownership tracked and transferred electronically (or with pencil and paper--or even physically--if you insist.)

It is the natural next step from here. If you peel the economic onion, you eventually reach the inner layers that reveal why our current system has worked to this point. The onion has a golden core. As Aragorn was kind enough to explain to me last month, the concept of true money was never lost on a few important entities. The acceptance of dollars for some key world transactions (with their ultimate behind-the-scenes redemption for Gold at whatever the prevailing market price) was all that was needed to "float the boat" to use his expression.

I'll write more on that as time allows. Or maybe I can appeal to Aragorn to tell it in his own words. It helped me to better grasp what FOA has described over time.

Real Gold. Get you some. --- e-Aristotle

SteveHGATA#75996/14/99; 20:45:37

Some bad with the good:

[GATA] GATA cited in Gartman Letter, Gold Newsletter
Mon, 14 Jun 1999 21:53:54 EDT
This email address is being protected from spambots. You need JavaScript enabled to view it.
This email address is being protected from spambots. You need JavaScript enabled to view it.

9:45p Monday, June 14, 1999

Dear Friend of GATA and Gold:

There's good news and bad news for GATA, but even the
bad news is good.

The bad news, such as it is, is that GATA was
disparaged loudly in a recent issue of the Gartman
Letter, a major commodities market publication. Here's
what the Garman Letter had to say:

"The Gold Anti-Trust Action Committee (GATA), a
gathering of disgruntled gold bulls, is in the news
once more, charging yet again that the gold market's
lending operations dominated by the central banks and
hedge funds have reached a point of considerable
'systemic risk.'

"GATA notes that the total amount of gold lent is
between 8,000-10,000 tonnes, thus creating a 'squeeze'
that must eventually send gold higher, creating
problems for the central banks and for their attendant
governments. This is rather like the national corn or
wheat growers becoming concerned that the amount of
corn of wheat futures trading exceeds the national
production of grains and thus is manipulative.

"It is very much the norm to have more grain futures
trading and more gain futures derivatives operative
than the amount of grain produced, several times over.
This is the nature of the derivative hedging

"GATA's arguments are the arguments of gold-market
bulls unwilling to accept that their positions are
under water, driven there by legitimate market forces.

"Nonetheless, as gold prices rebound in the next
several days, look for GATA to claim credit for the
rise, and look for others to give GATA credit also. In
reality, there may be something minor in GATA's
arguments concerning the gold lending trade that has
some kernel of truth to it, and we'd not be surprised
to learn of some hedge fund somewhere running into
trouble as gold rallies and their carry trades become
burdensome. However, given the seriousness of the gold
market collapse in recent weeks, it shall take a rally
of monstrous proportions to create the environment, and
at this point we are very hard-pressed to see how or
where it might evolve."

While there is criticism of GATA in the Gartman Letter,
note that it also acknowledges that GATA well may be on
to something. And of course in the War Against Gold,
GATA doesn't ask much more than that gold's enemies
spell our name right. Our friends will know us, and
thus all publicity is good for us.

The fully good news comes from Gold Newsletter, now
edited by Brien Lundin, who succeeded the great Jim
Blanchard upon Blanchard's death two months ago. Lundin
attended the Northeast Investment in Mining Conference
in New York a couple of weeks ago and heard GATA
Chairman Bill Murphy's speech there. Gold Newsletter's
cover story for the June 1999 issue, in the mail today,
reports that evidence of manipulation of the gold
market is building and that skeptics are becoming
believers, thanks largely to the Bank of England's plan
to sell gold and the strange timing and rationale
offered for it. Gold Newsletter's story concludes this

"Those of you who subscribe to the conspiracy theories
now gaining wider support, or those who just like to
stir things up a bit, should support the Gold Anti-
Trust Action Committee (GATA), launched by Bill Murphy.
I've known Bill for some time, and I can tell you that
he's one of the more ardent and knowledgeable gold
supporters you'll ever come across.

"As evidence of this, he launched GATA to use anti-
trust laws to sue the banks and broker-dealers that he
and many others feel have been manipulating the gold
price. GATA has so far collected over $50,000 from
interested investors and gold-mining firms, and has
retained the respected Berger & Montague law firm to
investigate the issue. I don't know whether GATA will
ever be able to prove anything in court, but their
efforts are gaining broader publicity and will at least
subject the gold shorts to greater and greater

"I urge you to contact GATA for more information. Write
or email John D. Meyer, Treasurer, GATA, Box 888, Great
Barrington, Mass. 01230 (email: This email address is being protected from spambots. You need JavaScript enabled to view it. ). You
should also visit GATA's website at"

GATA is deeply grateful to Gold Newsletter and Brien
Lundin for these comments -- and even to the Gartman
Letter as well, if not quite as warmly!

Once again I ask you to post this wherever it might be

As always, thanks for your interest and support.

Secretary, Gold Anti-Trust Action Committee Inc.
( This email address is being protected from spambots. You need JavaScript enabled to view it. )


SteveHfor Xavier on leasing#76006/14/99; 20:51:30

Sorry for the reposts. I thought three times about reposting this as one could simply just pop on over to kitco to read this but when you see all the posts right on top of each other it takes on an extra significance, eh?

Date: Mon Jun 14 1999 17:51 Ed Fishbaine (gold leases) ID#190195: to the extent that there is any transfer of physical gold out of the CB vaults it is probably not going to the hot shot gold carry boys. It is being bought, and to some extent ( ? ) transferred to major players like Saudi Arabia and possibly China and others interested in protecting themselves from a vulnerable US dollar. Strictly IMHO.

Date: Mon Jun 14 1999 17:44 Ed Fishbaine (CB leases) ID#190195: Allen

I agree that the CBs might be interested in dispersing gold in whatever form to certain countries or groups. Has it occurred to you that they may be setting up a very unusual and long term sting operation to trap the lessees. When the gold price runs up they will have some very major players by the you know what. There will be desperate efforts to survive and the CBs, or whoever represents them ( ? ) will dictate terms. As long as they maintain physical possession of the gold, which I believe they do they can do this. Actually this is the gold vs paper war no?

Date: Mon Jun 14 1999 17:44 Allen(USA) (Ed, ORO and the crew) ID#246224: Well, it looks like there is a flow of physical outbound from the CB's via leases according to other participants here. In terms of who gets the gold? Well we can pretty much rule out the little guy ( never happens in this world! ) . So that leaves the big guys ( few ) and other factions ( oil, etc ) . All I can figure is that we are in a con job of immerse proportions. And when it stings, it will hurt big time. Ouch! ( for me NOT! since I have physical and will enjoy the ride upward from here ) .

8- )

Date: Mon Jun 14 1999 17:15 NewPhys (Gold - thinking another unthinkable) ID#392177: Copyright © 1999 NewPhys/Kitco Inc. All rights reserved All: Europe still has alot of gold bullion, though the CB's probably have loaned alot more than they say they have sold. So -- if the European economy collapses, would they 'sell' more gold? I think we still need to consider the possibility that gold might still go down if the European economy tanks. We don't need to worry about massive US gold sales if the US economy tanks, do we? A European crash doesn't seem likely at the moment, and I suspect the new European elections will discourage gold sales. Comments from the Euro-experts? Having said that, I think the more likely scenario is what appears to be unfolding -- that some really big hedge funds are short gold -- and in deep trouble. Inflation seems to be returning to the US, even if wage inflation is not a problem. Any significant rise in short term US treasury rates will greatly increase interest payments, and enhance the annual deficit. And -- a Kosovo fiasco would be bullish for gold. Our troops are sitting ducks, holding the low ground. North Korea is heating up too. George Tenet stated last tuesday that the situation there is very unstable and unpredictable.

It seems that the June 14 prediction for gold to bottom comes from a G7 meeting on that date to discuss the need for more disclosure in hedge fund operations. Apparently the US is now in favor of public disclosure of hedge fund derivatives trades. This puts more pressure on the gold derivatives speculators.

Of course, if AG wants to keep his gold derivatives trades private, they will still be private.

Date: Mon Jun 14 1999 16:52 uptick (GOLD LEASING) ID#277249: As a participant and market maker in gold for the last 20+ years, i wish to assure you that the gold indeed leaves the vaults on a virtually every case but not all......

Date: Mon Jun 14 1999 16:45 sam (@ Ed Fishbaine - Yes, the physical _does_ leave the vaults.) ID#29068:

We had a ferocious debate on this subject a couple of months ago. Get your hands on a copy of the GMFS gold book and look at the graph of lease rates vs. NY Fed holdings -- the rates go up and the gold goes out.

cheers - sam_a.

Date: Mon Jun 14 1999 16:43 SteveIS (@Sam & @Chas) ID#286353: Copyright © 1999 SteveIS/Kitco Inc. All rights reserved Sam thanks for info. I agree it looks like another, possibly a big, rise in open interest tommorow. There an old saying that the best cure for a low price is a low price. The price of gold is low enough that there are plenty of willing buyers. These buyers are strong hands not trend following specs.

The manipulation of the gold market is getting more and more blatant. They arrive with big sells at predetermined price levels. They are generating more and more gold slam articles for the media. The G7 announcement was amazing. It included hard money Germany and France as well as Japan whose allegiances aren't entirely clear.

Whats even more astonishing is the CABALs unwillingness to let gold generate even 2 up days in a row. Maybe this is a sign that Rubin is not actively leading the shorts anymore. Clearly the pressure for a rise in the POG is getting extreme. The building open interest is a sign that they are very close to losing control of this baby.

Already they have weakened their best tool. Anouncement of government sales have been very useful in driving down the price of gold. But the announcement over the weekend had almost no effect. It took some massive sales into a rising market to keep the lid on todays POG.

Given the apparent fear of any kind of any rise in the POG the next rally could really be something special.


Date: Mon Jun 14 1999 16:39 ORO (Allen(USA) - I agree completely - however,) ID#71231: - I think the CBs are not sufficiently dumb to let the gold go into private pockets of "friends" alone. If so, they would not have had the gold price go this low for extended periods. This allows everyone to buy low. Meaning that they do this in order to get gold bullion to either a large buyer ( oil states ) or to allow the "little people" of the world to accumulate the metal ( to assure the existance of small pockets of capital in the event of a credit system meltdown ) - or both. If the shorts were actually covering in a big way then the paper POG would rise, not fall. Remember that "given sufficient rope, the financial industry ( banks, funds and investment houses ) , have allways managed to hang themselves". The actions of the IMF and BOE may have been intended as a way to save the paper shorts but have probably caused the reverse reaction since this constitutes "providing more rope". This is the usual Western CB reaction. This is what they did for LTCM and their associated bankers and the rumored one trillion dollar notional value or their derivative book. They provided more credit by lowering interest rates and supplying sufficient liquidity to allow the players to buy the components of LTCM's long positions. The new owners must have been very happy with the results they obtained, since they bought so much new commercial and international debt. Thus the industry shifted one of the many "crazy aunts" from one attic to another by marrying her to a new husband. Unfortunately the new husband was too weak to withstand his libido and they created a progeny of "troubled children".

Date: Mon Jun 14 1999 16:27 Ed Fishbaine (gold carry) ID#190195: Copyright © 1999 Ed Fishbaine/Kitco Inc. All rights reserved Allen

Do you believe that the CBs are letting physical gold out of their possession? IMO this is impossible. The gold carry trade is purely a paper operation. The lessee gets a certificate of ownership from the CB against his signature. He sells this certificate to the buyer who then owns gold on deposit at the CB. The lessee uses the dollars paid buy the buyer to invest in say a 30 year treasury and pockets 6% out of which he pays interest to the CB of say 2%. That is the game.

Now what is the status? The CB holds the physical gold but does not own it. The buyer owns the gold on deposit at the CB and the lessee owes the CB the gold borrowed.

The fun begins when the lessee cannot pay back the gold loan. Your theory of playing bankrupting games and running off with the stolen profits is interesting but may not work for two reasons: some big players would be exposed as crooks and secondly not owning the physical gold would disrupt their plans via multiple lawsuits etc.

I am interested in other ideas about how it would playout with major defaults developing.

Date: Mon Jun 14 1999 15:22 Allen(USA) (Are they selling physical gold or paper? To Whom and why???) ID#246224: Copyright © 1999 Allen(USA)/Kitco Inc. All rights reserved Physical paper or electronic blips? What are they REALLY selling? There is no transparency in this market. Who can describe the mechanics of this market? So I ask WHAT are they selling.

But they sure are desperate to keep this puppy down aren't they?

Q: Who gains by selling into a descending trend?

A: Shorts and long term longs whose cost is below current market but they are concerned about keeping profits.

At this level the longs would have had to come by their investment back in the mid 1970's or earlier! These aren't longs selling.

How short can they go before there is no realistic profit in the downside?

Let's posit that most of the short selling is on paper and that the physical gold market is not able to return gold to the shorts. Let's say the shorts now know this problem, they recognize the upside potential and recognize that they are, sooner or later, bancrupt. If that was you what would you do? I think I would sell as much paper as I could while getting as much of my operation divested into other parts of the organization which are not legally liable for the bancrupcy of the gold trading arm.

There was a practice in the 1920's and 30's of rigging a series of shell organizations in such a way as to minimize the risk and maximize the control of the parent organization. Profits flowed out to the ultimate parent organization but liabilities would be isolated to the local organization. The names would imply that this was one large company, but the actual structure would be such that any gangrenous limb could be severed without hurting the rest of the organization.

So the point, I think, at this time is to buy time to reposition and be ready when TSHTF in the gold market in a big way. As long as the market is willing to trade paper promise of gold then Houses will continue to 'borrow' gold and short it down as far as they can go.

Shift perspective here. They sell it to whom??? They sell the physical metal to themselves at an ever deceasing price ( another organization completely outside of the original org ) . When the price explodes they default, severe the dead limb and still have the physical metal in control of their other organization. Who is left holding the bag??? The lenders. In effect they have transfered gold from the CB's into their pockets via various means. They have used their reputations to gain confidence and confidence to gain gold. When the con is recognized the players will be LOOOOooong gone down the road.

jinx44new euro production...#76016/14/99; 20:57:50

I usually follow the logic around here, but I am a bit stuck on the assumption that the ECB member banks will be forgiving xxx tonnes of gold loans to the bullion banks and the hedge funds and taking settlement in the next best medium---euros. If it really takes gold to create new euros, how can the CB's and other lenders liquidate the debt with euros?? There aren't enough euros at the current level to be bought with $US by the funds to pay back the CB's they owe gold to. From whence cometh the new money, unless by strictly fiat methods?? Someone help me here...THX.
mike55e-Aristotle?#76026/14/99; 21:29:42

e-Aristotle, please tell me it ain't so -- you've gone the e-way? I thought you would have bought an e-lectric car and that e-fuel fill-up would have been e-lectricity. Hey, skip EVs and go straight to fuel cells. I think to road-trip is a verb, while roadtrips are nouns (ala Animal House) -- forgive me, but I'm a simple guy and find sophomoric humor entertaining at times (well, a lot of the times, much to the consternation of my wife).

On a serious note though, I fully agree with your points. As I posted earlier, I'm not a proponent of e-currency, and understand that it's no different than current FRNs and would be of no intrinsic value without some form of backing like gold. It (gold) is the next natural step as you say, but *will* it be the next step in these unnatural economic times? Perhaps in several years? I assume part of the onion's golden core are the dollars + gold = oil transactions. I also understand that "gold and oil don't flow in the same direction" as written by ANOTHER. There must be other international transactions that accomplish similar results. I want to learn more about what is currently keeping the boat afloat, and about the behind-the-scenes redemptions you mentioned. I have read the forum for quite a while, gone through the archives, and read FOOTSTEPS a couple of times.

If you or Aragorn would be so kind to write more on the subject, I would be most grateful. Thank you.

As always, I continue to trade paper for metal as I am able. I want to believe -- tell me more.

not-e-mike signing off. Good night all!

Peter AsherGulliver, Where Are You?#76036/14/99; 21:46:28

Would somone please suggest to the North and South Koreans, that they break their eggs in the middle.

Is this what's meant as "Gunboat diplomacy."

Aristotlee-sorry, Real-Mike55#76046/14/99; 22:25:29

I didn't intend to cause anyone any e-distress. My "e-Aristotle" was intended to reinforce the nonsense of such things as e-food. The focus of our attention must ALWAYS be on the real thing found behind the "e". 'Cause, Brother, it ain't money if it ain't gold. At best, it might be a proxy for money, such as our convertible dollars. So, for as long as you or I think we need money, we are well served to continue converting our proxies for the real thing.

I will make a promise to deliver that explanation very soon, unless the Big Guy (A.III) beats me to it. The very important bottom line to realize when the tale has been told is this... Even when gold was priced much higher than it has been these past few years, some very worldly and influential people (let's call them Giants!) were not only paying cash for as much Gold as they could get, but they were also BORROWING cash to obtain as much Gold as the market would offer.! A grand tale. So let everyone take heart who may have bought a substantial amount of Gold only to watch in dismay as the price fell for an ever better deal of a lifetime. In a sense (and I know this will sound preposterous), the Gold market has been "rigged" insofar as only sellers have made their presence known at the open market. To quote Aragorn again, the "serious buyers have always paid in full yesterday for delivery of Gold tomorrow." Essentially, it had to be this way. The marketplace won't be aware of the real action until precious little new mine production reaches the streets. While the market hasn't exactly been cornered, all of the cheap Gold has been spoken for, and the prospects for its delivery has come into doubt. I believe that England has been loudly proclaiming its "official storyline" on Gold via its own auction, and pressure on the IMF as a means to appease these aforementioned patient Gold shoppers. Apparently, in their greed, the hedge funds have mucked up the works, and good deals have been seriously jeopardized by bad ones, and the last Great Gold Scramble of the Millennium is drawing nigh. I've got mine (real!), and am making more.

Real money. Make you some. ---Aristotle

beestingComparing grains to Gold.#76056/15/99; 1:32:52

I'd like to comment on The Garman Letter portion of SteveH's msg.#7599 post from GATA(And by the way,many thank you's SteveH for all of your posts):

"It is very much the norm to have more grain futures trading and more gain(grain) futures deritives operative than the amount of grain produced, several times over. This is the nature of the derivative hedging operations."

Comments:Obviously written by a commodities specialist who knows the commodities markets.
But lets compare the commodity grain,to what the writer thinks is a commodity--GOLD.
First,the paper grain markets have historically survived" off years" in the physical grain market by exercising the "Roll Over".
Second, farmers in many parts of the world are "subsidized" by Governments'so they won't quit farming.Assuring a constant worldwide supply of grain,fall is harvest time in the northern latitudes'spring is harvest time in southern latitudes.
Now Gold; The paper "Roll Over"seems to be destroying the Gold mining industry by making Gold mining unprofitable,at present world spot Gold prices. Forcing closures in higher cost mining operations, therefore causing less physical Gold to be produced as time goes on.
I submit from, The World Gold Council:(1997 figures if I'm not mistaken)(1998 should be released shortly)
World Gold production about; 2550 Tonnes.
World Gold consumption about; 3600 Tonnes.
Where did the the 1000 Tonne shortfall come from? Most say from scrap Gold and storage, very little from Central Banks(they sell to each other)
Many here say the next figures to be released will show a much larger shortfall, world demand is larger than world production.
Therefore we are in the middle of a War on Gold! One side wants to value Gold as a commodity only,and treat it as a commodity.They are the financial tycoons of our era controlling huge amounts of paper money worldwide,with much influence. The other side(The Goldhearts) realize Gold is the very foundation for any and all monetary value.They have history on their side, and a few astute bankers.
If side #1 wins this war, the Central Banks will sell there Gold on the open market causing 12 to 14 years of depressed Gold prices till demand catches up with supply.
If on the other hand side #2 wins this war,prices may start to rise at any time, and go to unprecedented levels.I've got my bets on side #2,logic seems to say side #2 is winning the war! We watch this next chapter together........beesting

SteveHNY Times Ariticle on gold...l#76066/15/99; 3:25:52

Thanks to Farfel for pointing this out.
SteveHAristotle#76076/15/99; 3:28:05

Aren't farms closing at record rates too? Which points out the problem with speculators controlling the price of commodities with paper games and driving a commodity below the price of production and hurting or destroying the producer.

August gold at $261.30.

TomcatCould unmined gold or oil be used to help cover shorted gold positions?#76086/15/99; 7:25:46

There is not enough gold to cover the short positions. Therefore, gold will eventually rise. This is the foundation of many arguments on this forum.

This argument assumes that there is little else that will act as substitute for gold; hence the argument in in favor of the euro.

The the acceptance of the euro might require not only the decline in the value of the US$, it might require the collapse of the entire US$/IMF system!

But the US$/IMF system is not going to go down without a fight. Furthermore, it is not totally clear that the euro will be an acceptable substitute. Yes, the euro is backed with 15% gold, but will that allow the holder of a euro to turn the euro into gold? Not if the gold is unavailable. The euro is still paper. It is not a physical valuable like gold or oil or silver.

What if the investors and banks, who loaned out their gold, wanted something physical. Certainly, if they can't get gold, they will consider other physical valuables.

I am sure that some investors would accept ownership in gold mines if that ownership included a delivery some physical gold to them over time as it was produced. It beats worthless paper.

ANOTHER and FOA have emphasized that oil is comparable to gold in value. Why wouldn't some investors and CBs, who lent out their gold, accept barrels of oil in return for their loans? Granted, there would be many problems with this approach. But, when faced with holding worthless paper or accepting something physical (with storage problems), the investors and CBs might take their oil and run!

If I had lent out gold, and saw absence of gold on the horizon, I sure would be thinking of acceptable physical substitutes. A physical substitute might not be ideal but when the run on fiat money starts, physical substitutes for gold might start looking very attractive.

Perhaps negotiations for acceptable gold substitutes have already started behind the scenes?

Is there any reason why gold substitutes are not discussed very much? Or am I really missing an important point?

Peter AsherTomcat#76096/15/99; 7:59:55

Good morning. Oil or another tangible might substitute for gold as a trading vehicle, passing on value from borrowed gold to oil to Euros for example. But, gold was what the bank had in the vault and gold is what they will wish to have returned.--- Vault, value, storage, Gold!

First consider all the data that has appeared here on the Forum regarding gold as the true and optimum via for holding unspent wealth. Then to cement the vision, imagine taking a bright and shiny Gold Eagle off your shelf and replacing it with fourteen big barrels of smelly crude oil.

Peter AsherTomcat#76106/15/99; 8:14:21

I should add, that if there was an "absence of gold on the horizon, ergo gold would be commanding a very high price, I would want my gold all the more.

If the demand for the gold would force default and the bankruptcy of the obligated party, The lender might settle for cash. (As rumored to be the case in the LTCM bailout)
If cash is not of any value, then the problem is much bigger then the relative aspects of holding gold, oil or other tangibles.

TomcatPeter Asher: Substitutes for Gold#76116/15/99; 8:24:51

Sir Peter, I am glad you responded. Your words helped me clairify my original thoughts.

My concern is that as the market bubble starts to deflate (or even burst) and when the run from paper and the flight to quality starts, you will see some start to panic. In a "fear driven" flight to quality there won't be time to dwell on the idealistic qualities of gold. There will be a desire to save one's financial tail! And at that point compromises of all sorts will be made in order to save their shorts (pun intented)! Smaller losses have driven some to suicide!

So, I'll reword my question:

In a "fear driven" flight to quality, what will act as a substitute for gold for those trying to cover their short positions?

TomcatPeter Asher#76126/15/99; 8:39:56

I did not see your latest post, #7610. My reply was to your first post, #7609.

In #7610 you said: "If the demand for the gold would force default and the bankruptcy of the obligated party, The lender might settle for cash. (As rumored to be the case in the LTCM bailout)."

Peter, I think it is going to be just that simple. Many gold lenders are going to have to take cash and purchase whatever tangibles they can get. They are investors and they blew it and they will have to take their losses.

To the degree that these gold lenders accept fiat money, it will lessen the demand for gold and this will lessen the upward pressure on the POG.

It is very possible that many shorters went short knowing full well they might not be able to cover. The greed for inexpensive money could drive many to take the gamble.

USAGOLDToday's Gold Market Report: Interesting News from the London FT Conference; China a Buyer??#76136/15/99; 8:45:50

MARKET REPORT(6/15/99): Gold was steady today as the British pound continued its
rapid descent -- down over a full cent in early trading. We pointed out at the time Bank of
England announced its gold sale that this might be a signal that the British currency was
about to plummet. It has. And speculators are beginning to pile on.

In the next issue of NEWS & VIEWS, we show a graph of the pound sterling and what has
happened to it since the gold sale announcement. It is not a pretty picture especially if you
happen to be a British citizen with your savings in that currency. Inflation is sure to follow,
if other devaluations are an indicator, and those who purchased gold in that country will be
happy they did. Has Britain become the first G7 victim of the Asian contagion? (I consider
the Japanese model of economic dysfunction its own particular malaise outside the
contagion description of high inflation, high unemployment, currency depreciation, stock
market collapse, bond market melt-down, bankruptcies, skyrocketing gold prices, et al.)
Time will tell. These gold sales are not without their prime cause. We simply wait to
discover what the prime cause might be before passing further judgement.

Overall the market was generally described as calm in both Asia and Europe overnight.
Reuters reports interestingly that though the IMF and Britain might be sellers of gold other
central banks might be buyers including China. `When some central banks in Western
countries and international financial institutions begin selling or intend to sell gold on the
international market, China's central bank, lured by the current low gold prices, may
consider buying some from the market to increase the share of gold in its international
reserves,'' Ouyang Wei, editor of China Money published by China's Xinhua News
Agency, said. Also gleaned from this morning's Reuters London, we find that George
Milling Stanley of the World Gold Council agrees with our assessment of the possible sale
of IMF gold expressed here yesterday. "No matter what was said at the G-7 meeting over
the weekend, the IMF sale is anything but a 'done deal,'' said Stanley.

In other gold news this morning the Financial Times World Gold Conference is underway
and already some interesting statements have emerged -- all as reported by Bridge News
this morning. To wit:

"Barrick's forward sales are not a reflection of the company's negative price outlook and
are inst ead struc tured purely to deliver dependable results to shareholders." ----- Jamie
Sokalsky, Chief Financial Officer, Barrick

"The London Bullion Market Association (LBMA) has set up a new rule book to include
changes made in response to new UK financial regulation by the Financial Services
Authority (FSA)." ------- Peter Fava, Chairman of the LBMA

The spot gold price is likely to become much more volatile, with a trading range as wide as
$100-150 per ounce over the period of a few months possible within the next 5 years,
according to Kevin Crisp, vice president and precious metals strategist at JP Morgan. ...
Crisp stressed that the price fluctuations would be both up and down.

That's it for today, fellow goldmeisters.

In the latest News & Views, we ramble through the many issues surrounding the gold
market and give the reader a good, solid overview of what's happened in this topsy turvy
market of the last month or so. If you are looking for some short and sweet analysis as to
what is going in the gold market today from a multitude of sources, you'll like this
upcoming issue. It is a quick and interesting read. Please go to our ORDER FORM or call
Marie at 1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly
newsletter -- and introductory packet on gold ownership.

TownCriera.m. currency notes#76146/15/99; 9:17:00

Most IMM currencies weaker, yen up early, Koreans duking it out.
TownCrierBanks Face Telemarket Dilemma#76156/15/99; 9:35:43

Banks lick their chops at the prospects of selling customer information to telemarketers for big bucks. Parties concerned with privacy fight back.
TownCrierGold edges higher in Europe, touches $260.00#76166/15/99; 10:04:58

Gold market news...essentially an echo of a portion of MK's morning report.
TownCrierINTERVIEW-Anglogold sees gold fall overdone#76176/15/99; 10:22:02

A good interview with Kelvin Williams, the executive marketing director of the world's largest gold producer, Anglogold Ltd.
"The market has been given an unique opportunity in the Bank of England publically announcing gold sales in advance... to speculate against that action. ...In a sense, the BoE sale in itself would be easily absorbed in this physical market. In the way they have announced it, they have introduced a distortion to the paper market and the result is that this huge speculative short against the gold price is a distortion and the market consequently is in a negative over-reaction."

Lots the link.

TownCrierFrom the "You've got to be kidding me" Department...#76186/15/99; 10:37:07

Company Press Release:

VANCOUVER, British Columbia--(BUSINESS WIRE)--June 14, 1999-- Borneo Gold Corporation (VSE:BNO - news; "The Company") is pleased to announce that it has retained the services of Canaccord Capital Corporation for a contemplated Change of Business.

Subject to an ongoing due diligence review, Canaccord will undertake to provide on the Company's behalf a Pre-Assessment Stage Application and a Member Sponsorship Letter recommending Borneo Gold Corporation for a change of its listing to a non-resource company on the Vancouver Stock Exchange.

As reported previously, Borneo is evaluating opportunities in the Internet field which have the potential to maximize shareholder value. A number of businesses have been identified which meet the Company's criteria and are undergoing further due diligence.
Now TownCrier has seen everything! Are they going to mine e-gold?

TownCrierTreasury's Geithner sees G7 debt-relief deal#76196/15/99; 10:48:55

Geithner said outright forgiveness of all debt was not a U.S. objective since that might discourage prudent borrowing in future.

Sounds like they have been visiting our forum, and have formed the tiniest germ of a clue.

mike55Who is this guy and why is he saying these things?#76206/15/99; 10:58:10

Since I'm a novice, I don't know who's who. This article is quite long and without a link, so I just copied and pasted the date and time stamp from that other site.

Date: Tue Jun 15 1999 09:51 General
(latest from Larry Edelson of SAFE MONEY REPORT:) ID#365216:
Copyright © 1999 General/Kitco Inc. All rights reserved
"Gold market will crash to as low as $180 - a climactic end to the 20-year decline."

Peter AsherTomcat#76216/15/99; 11:10:55

In a "fear driven" flight to quality, what will act as a substitute for gold for those trying to cover
their short positions?

Maybe the first look should be at the classic quote which I believe came out of the Hearst/What's his name?-Stock battle. "He who sells what isn't hiss'n; must buy it back or go to prison"!

When one has 'assets' to protect one can buy timberland, farmland, the means of production of essential goods at book value or less, and collectibles. However, a short has a 'debt' to repay in kind.

If the 'creditor' of the short sale doesn't accept a negotiated settlement in lieu of the gold, than it's a default. The creditor has whatever collateral he hopefully required. And the short probably files for bankruptcy. That's the main point that I think has been stressed in our discussions here. The shorts don't have the financial capability (net worth) to pay back the gold at the price it will rise to: Period.

The position of the creditors is only as sound as the Law and the assets of the game allow for it. Even "Too big to fail" is only workable if the paper 'assets' in the system prevail. That's the essence of the basically predatory activity of "making' money on nonproductive endeavors. Those earnings are the "gleanings". If there is not enough 'crop' of real production to glean from, the activity can't survive.

TownCrierBank 'cavalier' in defence of reserves sale#76226/15/99; 11:14:15

"The Bank of England has thrown a cat among the pigeons as far as sentiment is concerned. Imagine it was foreign exchange. If the Bank was selling Japanese yen it would not tell everyone six weeks in advance."

To visit this site (London Daily Telegraph) requires free registration. There are some links to other good articles from within this one. Give it a try.

GoldflyMike55#76236/15/99; 11:16:00

I'll tell you what, Mike. If Gold does go down to $200 or so, that's when I'll trade in my collection of Mounties.....

I'll get a 50% increase in that portion of my holdings! Cool!


SteveHPlayers position and more...#76246/15/99; 11:16:45

I noted that the LBMA will be changing their reporting methods that will result in more volatile price swings. Sounds like pawn to white-bishop three to me.

This in from miq forum today and yesterday:

Thanks for posting info Steve. Please feel free to post any comments.

Bellow is a good explanation.

<< Do you believe that the CBs are letting physical gold out of their possession? IMO this is impossible. The gold carry trade is purely a paper operation. The lessee gets a certificate of ownership from the CB against his signature. He sells this certificate to the buyer who then owns gold on deposit at the CB. The lessee uses the dollars paid buy the buyer to invest in say a 30 year treasury and pockets 6% out of which he pays interest to the CB of say 2%. That is the game. Now what is the status? The CB holds the physical gold but does not own it. The buyer owns the gold on deposit at the CB and the lessee owes the CB the gold borrowed. >>

I still think CB must protect themselves from above happening. Why? For simple reason that if you can lease something at 1.5% for extended period of time there must be strings attached. If this leased gold was under high degree of non-delivery, lease rates would be 10 times of that. How about simple condition attached to the lease that stipulates gold MUST stay in the CB vault until middleman fulfils his obligation. So far all commotion is happening in the middleman (fat cats ) camp not on CBs part. Perhaps CBs gold is safe. That scenario will definitely make CBs the winners. Back in 95 I was approached by wheelers and dealers based in Moscow who have heard about this type of loans based on physical gold (on safe deposit) in exchange of certificate that was later used in roll over programs. It never worked for them due to Russian bank insisting gold stays in Russia and no foreign bank would issue certificate unless gold was safe in their possession. In case of mining companies they generally have access to bank loans once they have positive feasibility study done by independent consultants. Depending on size of project such study may cost in to tens of millions. Lending bank often takes part equity (shares) and part debt position.

< From: +Richard Harmon Tuesday, Jun 15 1999 8:32AM ET Reply # of 35386

< paper with a promise?>> either can happen, most often(from what I understand) it is hauled out. <> 1% interest per year, <> some are unsecured, I understand, while most often 10% of value in $. << Does the metal have to be "returned" at the lend price equivalent, or simply returned by weight of metal borrowed?>> We have been left to understand many contracts of late have been setteled in $ only or future delivery contracts, not actual metal. >>

If contracts lately have been settled in $ not physical metal then such lease arrangement became straight sale. In other words physical metal was brought to the market but never taken out of it to return back to CB by bullion dealer. The winner is who ever got physical gold.

DDJoker in the Deck#76256/15/99; 12:06:24

Greetings all. This is my first post. I couldn't contain myself any longer. I've read with great interest the posts on this forum for months. Good stuff. Very insightful. But I think there's a joker in the deck that should be considered in evaluating all senarios. That joker is Y2k. I've done so much research on Y2k over the last two years that I'm tired of thinking about it. I'm a systems expert and a consultant on change management and business productivity. I only consider data, not opinions in looking for direction on Y2k issues. My research indicates that Y2k is going to be a significant problem, especially in the global economy. The bubble economy in the US is at risk from any number of unexpected shocks. At these lofty levels of over indulgence, even a small shock could cause things to begin to unravel. Y2k is no small thing. It's a major shock that is going to play out in the next year or so. The Big Boys (paper & e-money crowd) control and manipulate things in this world for their own benefit. We all know this. However, I don't believe anyone in the fiat money corner has the power to control the potential outcomes of Y2k. For the first time in a long time, we have an impending event that cannot be manipulated away. Contrary to popular belief, in general, the bigger an organization, the more vulnerable it is to Y2k. Once people realize the potential effects of Y2k to themselves personally, the fear factor for most is going to go to unprecidented levels. I've already seen the power of this type of fear in the early adaptors of Y2k (about 1-2% of the population currently). Believe me, when people "get" that their world may be turned upside down, they get scared. That's also when they begin to take action. Action? Yes. Like selling stocks, taking cash out of the bank, reducing spending and buying prepardness items. Opps! Not so good for the bubble. My question is: Assuming Y2k does manifest as a global hornet's nest, what do you think will happen to gold, oil, banking and etc.? I've enjoyed the posts of Another and FOA greatly. I wonder what might they might think of potiential senarios where Saudi Arabia, and other oil producing states can't get their oil to market due to Y2k problems. Or, what if the oil flows but the world, including th US, is in a global depression due to Y2k? What happens to gold, both paper and real? Anyway, I hope that this post will be cause for thought. I look forward to your comments. Best, DD
mike55Welcome DD!#76266/15/99; 12:37:36

Some of my posts over the last few weeks address similar aspects and questions related to Y2k -- the potential for slow (and in some cases fast) unraveling of problems, the "peeling of the onion" of system interrelationships, distribition of goods, the effect on economic slowdown, etc. Interesting is the broadbased effect that opinion leaders have on the early adaptors; more so the lack of effect on the rejectors!
Buena FeHear their cries Lord!#76276/15/99; 12:48:19

Look here, you rich men, now is the time to cry and groan with anguished grief because of all the terrible troubles ahead of you. Your wealth is even now rotting away, and your fine clothes are becoming mere moth-eaten rags. The value of your (what you consider to be?) gold (US$) and silver (US T-Bonds) is dropping fast, yet it will stand as evidence against you, and eat your flesh like fire. That is what you have stored up for yourselves, to receive on that coming day of judgment. For listen! Hear the cries of the field workers whom you have cheated of their pay. Their cries have reached the ears of the Lord of Hosts. You have spent your years here on earth having fun, satisfying your every whim, and now your fat hearts are ready for the slaughter. You have condemned and killed good men who had no power to defend themselves against you.

Now as for you, dear brothers who are waiting for the Lord's return, be patient, like a farmer who waits until the autumn for his precious (gold?) harvest to ripen. Yes, be patient. And take courage, for the coming of the Lord is near!

Quoted from "The Living Bible" James chapter 5, verses 1-8.
Everything in parantheses is my interpretation.

PS I am not a religious person, but I believe that God's Word, God's Wisdom and His work of Salvation are "MORE PRECIOUS THAN GOLD AND SILVER" as He has proclaimed throughout His Word. Therefore if (as certain bankers would have us believe through their onslaught in the press etc. etc.) Gold is not precious (just another commodity) than anything that you measure it against cannot be more precious ie. "The Word of God". This reverse logic has encouraged me greatly these last few days. God gave us Gold as standard of measure by which everything including His own Wisdom can be measured by. No matter what the propoganda says "Gold is Precious"!!!, the rest is an illusion.

TownCrierU.S. reserve assets up $1.065 bln in June 11 week#76286/15/99; 13:06:13

We sure talk a lot about other countries' reserves. Here is a look at ours.

Gold? What is THAT doing in there?? Heh, heh, heh... :)

Peter AsherIs This a Harbinger of the BOE Auction?#76296/15/99; 13:19:53

As Lincoln said -- "You can fool (with paper trading) some of the people all the time and all of the people some of the time, but you can't fool all of the people all of the time."

Today's Oil rights auction shows that some folks know the real value of the finite resources of Planet Earth, and are willing do put up high stakes against that value being fully paid for in the near future.

FOCUS-Oil giants rally to landmark Brazil auction — By Tom Ashby

RIO DE JANEIRO, (Reuters) -
International oil companies rallied to
Brazil's first-ever oil exploration auction on
Tuesday, putting up a surprisingly high $93 million for the right to explore in just four areas on the first morning of a two-day bidding round.

The size of the initial bids confounded critics --------
------ Agip's shock $75 million bid, by far the biggest of the morning, beat off two competitors in Britain's BG on $11 million bid and a consortium of U.S. independents Kerr McGee and Amerada Hess , with an offer of $5 million.

Leighmike55#76306/15/99; 13:34:58

Sorry, Larry Edelson, but I'm going to stay with the advice of Another, FOA, and Josef (who are predicting an imminent rise in the POG) and keep my gold! Don't want to be empty-handed on the day the price soars!
TownCrierFOCUS-Gold industry gloomy with price at record lows#76316/15/99; 13:48:51

Summary of the day's events at the 22nd annual Financial Times World Gold conference.

You've really got to admire Kelvin's passion, but I think he needs to recognize that "money" is nearer to the mark in his concluding comment. Further, a re-education campaign for the public would be more effective and perceived better than the gimmickry of standard Madison Avenue-type advertising and marketing. Get on it, boys...

SteveHAnother post from...#76326/15/99; 13:58:57

above link. Just excellent.

(milos) Jun 15, 13:48

Lets get a couple of thing straight about the Gold situation;
If I am wrong, please provide qualified argument.

1 – The Gold trading range is presently managed, it is trading within the 259-261 range, it takes no rocket scientist to see from Kitco charts 3-5 point daily swings are actively suppressed. One should understand that this chart is derived from future paper value not SPOT.

2 – In actual fact, the POG we get from these charts is by NO MEANS representative of the current market value of Gold since for the most part it is now being delivered from forward contracts by producers in the 300-340 range. In reality the charted present value is completely bogus and a market ploy. The future values we see are continuously being rolled forward artificially.

3 – I can only analyze the events from Nov 98 because that's when I took an active interest in Gold and conclude the following; There is no liquidity in Gold, in other words the CBs are not releasing reserves into the marketplace. This is evident by all the news hype whenever small quantities enter (or are announced to enter) the market. There is a shortfall that must be made up to satisfy the spot market and control the perceived market value and demand.

4 – Don't be fooled that Bankers will supply Gold from reserves in exchange for paper, they are in the debt obligation business, Gold is the only REAL ASSET they have (other than real estate). Don't think for a minute that they are about to divest themselves of Gold, in fact they are very much concerned about not being able to obtain more from future production.

5 – BOE Gold, it is my understanding this inventory is kept at the FRB in NY. Based upon the conditions of sale, the quality may be scrap unrefined gold not suited as fine gold. It may very well go for well below market value as a consequence. No doubt they will make hay of the poor price they fetch.

6 – IMF Gold, again this inventory is being trickled into the marketplace, we've already analyzed the bogus nature of this announcement along with the unqualified reasons for its disposition.

7 – The propagated notion of depressed pricing for the next 5 years is obviously a message to discourage investors from participating in the market so they can gracefully unwind hedge funds over the interval (8000-10000 tons).

8 – Swiss Gold, this is a non-issue, if the Swiss detached the currency from Gold it was done to protect the Gold not the currency. Not an ounce of Swiss Gold will hit the street.

Lies and BS galore. Just buy and hold, market dynamics will fix everything in time. Producers will stop the flow of spice due to production threshold costs and the situation will become progressively aggravated with shortage. It's a rotten political/brokerage scandal that encompasses our present world order. As a consequence this malignant disease will simply erode trust and confidence of the entire free enterprise system and all the players thereof.
Squelch the noise that comes from the likes of Chris at JPM. We've heard his BS before.

Get Gold and Quality Mines!

Usul(No Subject)#76336/15/99; 14:23:10

Experts. What do they know, eh?
mike55Leigh#76346/15/99; 14:29:59

I'm 100% with you. Better to be a few years early than one day late. On the other hand, I just received a mailing promoting the purchase of U.S. Savings Bonds -- highlights of the mailing include: "Diversify; don't put all your eggs in one basket"...."Do not compare apples to oranges; Savings Bonds are a guaranteed investment"...."Cash on demand; get your hands on your money whenever you want it"....and the clincher: "And remember, Savings Bonds are safe and secure. They are backed by the full faith and credit of the United States".

It's almost too much to believe -- Edelson and the Treasury trying to persuade me all in one day. I'm gonna run right out, sell all my gold, and put my full faith and former wealth into bonds. NOT!!!!

Keep tradin' that paper for metal.

JonLeigh's msg#7630#76356/15/99; 14:33:28

Have been away for several weeks. Can you or someone else direct me to comments on imminent rise in POG by Another,FOA, and Josef? Many thanks.
TownCrierNY Precious Metals Review [it's not much, but that's all there is!]#76366/15/99; 14:33:56

By Melanie Lovatt, Bridge News
New York--Jun 15--

Gold continued to consolidate in its current range and stuck close to
the $260 level after an inside session. It has been somewhat pressured in
recent sessions by the dollar's rebound against the yen after last week's
heavy dips, said traders.

Overall, gold has been quiet both today and Monday as a result of the
absence of many players who have been attending the Financial Times Gold
conference in London.

--Aug (GCQ9) at $261.0, dn $1; RANGE: $262.3-260.6

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
No further reproduction without written permission from FWN

mike55Jon#76376/15/99; 14:49:08

FOA's 6/14/99 #7561 is probably one that Leigh referred to.
Leigh(No Subject)#76386/15/99; 14:53:29

Jon, Steve H copied a message last week from Kitco from "Josef the Gambler" (#7315). Another sent a message that night (#7353). FOA posted an urgent message yesterday morning (#7561). Although they were all somewhat cryptic, they indicated that time is running out to buy cheap gold. Something is going on.

"...The triumphing of the wicked is SHORT, and the joy of the hypocrite but for a moment....The eye also which saw him shall see him no more; neither shall his place any more behold him." (because he's in jail, maybe!) Job 20:5, 9

Aristotle, thanks for the information about Euros. That was exactly what I wanted to know. No, I'm not taking a trip (though my Navy husband will be in that region for the second half of this year). I was looking for a safe haven for our mutual stock money. We can't put it in a house yet because we're scheduled to move in January (fun!!). I am afraid to keep it in the bank; what if they close? How about...U.S. SAVINGS BONDS!!!

Cavan ManBuena Fe#76396/15/99; 15:05:21

Hello. I refer you to the Revised Standard Version of the Good Book. The translations contained therein are much closer to the original Hebrew and Greek than the aforementioned. You're right about those bankers!
TownCrierA Must Read: Leading Y2K guru signs off until 2000#76406/15/99; 15:32:03

Referring to what he calls recent "spin control" by government and corporations to reassure Americans that the country will weather Y2K with only minor disruptions, Yourdon warns in his farewell that "noncompliant (computer) code doesn't listen to the rhetoric of politicians - it either works or it doesn't work."
TownCrierSecurity task force urges care when preparing for Y2K bug#76416/15/99; 15:40:22

Because utilities, banks and others might get sloppy in the rush to fix their computer systems, there are legitimate fears of vulnerabilities of systems to computer hackers.

"We are in the information age, so we depend very heavily on information systems in this country," said Sgt. Waring. "Are there some gaps in some of those security systems? It's fair to say there are some."

Can you sleep well at night knowing that your life's wealth is comprised primarily of information? Look's like gold has a big job ahead! Rock-a-bye baby...

TownCrierY2K Test Approaches - 200 Days And Counting #76426/15/99; 15:44:58

In January a major computer breakdown at social security offices in Marseilles, France, paralyzed payments. In a few days frustrated benefit claimants smashed up three post offices before riot police stepped in.

Shades of things to come?

TownCrierMixed Concerns About Bank Compliance#76436/15/99; 15:49:19

Y2K potpourri...a little bit of everything, sorta.
JonResponses from Leigh and mike55#76446/15/99; 15:56:43

Thank you very much for your prompt responses.
Anyone know what transpired at the Bilderberger meeting in Sintra a week or so ago?

TownCrierMONEY BRIEFING: Not everyone's playing the stock market game#76456/15/99; 15:57:23

First section is a good Reality Check. Go on...Take a quick look.
canamamiFrustration with the POG and Goldbug Theorists#76466/15/99; 17:16:52

Karl Popper once juxtaposed the theories of Einstein and Freud. In setting forth the theory of relativity, Einstein predicted that a certain celestial body would be at a certain place at a certain time. The older Newtonian physics could not account for this body's movement. At the appointed time and place, the body appeared, supporting the veracity of Einstein's theory. Popper compared this favourably to Freud and his followers, who would just amend the theory when facts did not support it, providing ex post facto rationalizations for the failure of the predictions when they did not come true, or the failure of the facts to support the theory. In this way, Freud's group was like a religious sect which has to explain away the failure of the predicted end of the world to transpire.

Now, back to the internet world of those who follow gold. Hutch, who is an anti-goldbug on SI, predicted last year that the POG would hit $260.00 sometime this summer. It did. On the other hand, the goldbug theorists have not been proven right. They are now rationalizing away the failure of the predictions - e.g., the game plan changed, the COMEX numbers are inaccurate, etc. I accept some of these rationalizations, as I'm still here. But quite frankly, my patience and willingness to listen is wearing thin. The advocates of gold need something similar to Einstein's prediction if they are to have any credibility: A reasonably precise prediction, within a reasonably ascertainable timeframe, which proves to be true. It was not bad faith which caused some to latch onto FOA/Another's statement that the BIS would not allow the POG to fall below $280, but the need for a benchmark to assess the veracity of a theory.

I don't wish to be the skunk at the party, but this is how my brain is working right now. The time for proof is now upon us. If gold is true money and the theories are true, it and they must "walk the walk" soon, regardless of the alleged actions of the alleged manipulators.

canamamiClarification of post#7646#76476/15/99; 18:35:11

I wish to clarify that I was not referring to the theories of FOA/Another in particular in post#7646 (and I have learned much from FOA/Another), but I merely wished to state that if gold has a future, some sign of this future must be revealed soon, or it will become prudent to start according weight to the arguments of gold's opponents. The continuing red downward arrows next to the POG, day after day, and the opportunity costs those arrows represent, cannot be ignored indefinitely.
JadeThe nasty little kicker in the BofE Gold sale.#76486/15/99; 18:37:21

Posted on the BoE site is the June 11 document that states the terms and conditions of the proposed sale.
The kicker quoted word for word "under this agreement, VAT can arise if physical control of Gold passes from a member of LBMA to a non-Member". Now I don't know the present VAT [value added tax on Gold], but if it is 10%, this Gold could very well cost you $300 an ounce if you're a non-member of the LBMA. A rather nice way to keep the actual possession of this Gold to LMBA members only. Further on it reads "The Finance Bill currently before Parliament contains provisions which, if enacted, will amend the VAT rules applicable to supplies of investment Gold. These amendments will not affect the VAT position before January 1, 2000." Now I read that as making it clear that you "will" pay this VAT if your not LBMA hell or high water.

Peter Ashercanamami#76496/15/99; 18:42:10

If you haven't already read my #7629 earlier today, take a look and then focus on the quote below from Steve's Gold Eagle forward, #7632..

>>2 – In actual fact, the POG we get from these charts is by NO MEANS representative of the
current market value of Gold since for the most part it is now being delivered from forward
contracts by producers in the 300-340 range. In reality the charted present value is completely
bogus and a market ploy. The future values we see are continuously being rolled forward

This is a very astute summation of the paradox of the large short position of Gold and the nevertheless declining price. The empirical quantity/value relationship will make itself known when mines run out of profitable contacts to deliver to.

The Strangercanamami#76506/15/99; 18:53:31

Having determined, last year, that a deflationary world was too frightening for central bankers to countenance, I anticipated that money growth was about to explode. The result would be economic recovery...but at a price. The price, of course, was to be inflation. I could have bought oil stocks, papers, base metals, etc., but, thinking I knew where the leverage was best, I put it all on gold.

I flatter myself that not many foresaw reinflation so early. Many don't see it yet. Yet, last month we had a CPI number so illuminating, I thought the debate resolved. Perhaps, after tomorrow, it will be.

Last Friday, the renowned economist Laurence Kudlow made the following observation, which I paraphrase from memory. "There is no inflation problem. If there were, gold would be rising, not falling. Ergo, one should not buy gold." Does this mean only if we buy gold will there be inflation, therefore let's not buy gold?

Had I merely distributed my funds among different inflation beneficiaries, read that "cyclicals", I would be riding high right now. As sometimes happens with so-called "top down" investing, I got the diagnosis right but I wrote the wrong prescription.

Or did I? Isn't it often thus with value investing? Anybody can tell you what is cheap. The trick is in knowing when the change is about to happen.

As for me, you couldn't make me short gold in a market where inflation, after long dormancy, is about to reincarnate. Not at these prices, anyway. But a gold bear has to believe that is exactly what people will be doing in the months to come.

I prefer to believe that we had a very good base built under gold before the BoE announcement. When that base was broken, weak hands just panicked. That's all. As none of this alters my view of what is coming, I do not expect to follow them.

canamamiReply to The Stranger and Peter Asher#76516/15/99; 19:24:05

You win!

I had a temporary moment of weakness. I'm back on side. The goldbugs will eventually win, I just wish it were sooner than later.

The Strangercanamami#76526/15/99; 20:00:14

Is it bad form to ask you to say something about who you are? I always enjoy reading your remarks and find myself wondering, 'Who IS this guy?'
Cavan ManJade's VAT#76536/15/99; 20:08:12

I believe it is 17.5%.
Cavan ManCanamami#76546/15/99; 20:09:58

So many good minds weighing in at this FORUM including our gracious host can't be wrong indefinitely.
Cavan ManSir Stranger#76556/15/99; 20:14:41

You're right about inflation. I am paying close attention every time I take out my wallet. First reflation; next, higher rates; then economy tanks and the credit bubble bursts; deflation follows? We're in for some stormy weather indeed.
USAGOLDcanamami...Time is the x factor...#76566/15/99; 20:28:39

I remember reading in the newspaper about a year ago about a proof of one of Einstein's hypotheses that had just surfaced some sixty or more years after the great one had first theorized it.

We are dealing with socialists here who spend the entirety of their lives trying to push inevitability into next year. And they have the power to do it.....up to a point. In the case of gold, the advent of the derivative has served to greatly extend the market cycle.

As was the case in the development of the bomb, we did not know the extent of the explosion until critical mass was first achieved at Alamagordo. Then we knew. The situation is the same with modern markets, modern economics.

I recently wrote an article for one of the magazines where I compared the derivatives market to Einsteinian physics. With Newton we dealt with the simple stuff: What goes up most come down; for each action there is an equal and opposite reaction, etc. And for years we talked about markets in those terms. With the advent of derivatives, we are talking again about critical mass. The nucleus will only accept a certain number of electrons and then it bursts and you have a nuclear explosion. All is devastated -- in a single, one time event.

We have achieved that in terms of physics. We have not achieved that yet in terms of economics (markets) at least not in the West, though, as was the case at Alamagordo, we have a pretty good idea of what will happen. All seems innocent enough until the explosion occurs.


Thanks canamami. Hope this starts the wheels turning as your post started mine.

canamamiReply to the Stranger - Post# 7652#76576/15/99; 20:31:45

The Stranger,

Sure, I can relate a bit about myself. But first, I must say that I've always found your posts to be among the clearest and most "common sense, reality based" I've read on the Net, so I'm a little surprised you enjoy my posts, given that I'm a novice investor while you have worked in the financial field; your knowledge of these matters would far exceed mine. As for me, my undergraduate educational background was in Political Science (also, some general Arts like Intro Economics, History, Sociology) and I also studied French, which is useful for an English-Canadian. My professional training was in Law. I've spent most of my career in the public sector, though I did practice in the private sector early in my career. Much of my experience has been in international human rights law, though I am now what Americans would call an administrative law judge, in an unrelated field. Hence, I sometimes make crude errors when discussing the practicalities of investing, as I am learning by trial and error (with an emphasis on the error). This is why I get frustrated with the gold market, as I have been "banking" on a rally for quite some time, but the situation just keeps on deteriorating and deteriorating. Lately, I have decided that owning physical gold may be a good idea for Canadians, given that Quebec separatism could lead to the end of Canadian currency (and Canada), while the $US (the obvious hedge) would also be damaged by the breakup of Canada. Quite frankly, I believe gold ownership is not as good a bet for Americans, as I do not see the $US being disestablished - severely devalued yes, but not disestablished. Perhaps it would be useful for Forum members to share a bit about their backgrounds on occasion, to see where the different perspectives "come from", so to speak.

canamamiReply to USAGOLD - post#7656#76586/15/99; 20:45:33


The comparison of the older market cycle to Newton's physics, and the modern derivative-influenced market to Einstein's physics, is brilliant, and greatly illuminates the situation. Imagine the spike in the POG when the force holding it down artifically is removed, or overawed.

PH in LAVAT tax on gold in Euro-land#76596/15/99; 20:46:51

Re: VAT tax

I remember posting about the VAT in EC countries last fall. At that time new laws came into effect (I saw the reports in the Spanish press) abolishing the 16% VAT (IVA-Impuesto sobre el Valor A--adido) in order to equalize conditions for investment in gold in all EC countries. It was seen as a positive for gold at the time.

Don't know anything about the VAT in England, though. As for raising the POG for non-LBMA members, it seems like it was mentioned that the BOE auction was to be a semi-private affair restricted to LBMA members only.

USAGOLDCanamami....Here's the article. I found it believe it or not.#76606/15/99; 20:49:49

Here's the original article from my home computer before the editor's cleaned it up and made me look like a writer. The ideas are here though. I think I have another version of this somewhere. If I find it I will post it. The graphs from Bob Prechter really make the point (unfortunately I can't post them) -- strong long term uptrends followed by a swan dive off the cliff straight down -- the essense of a mania resolved.

Derivative Delusions and the Madness of Crowds
by Michael J. Kosares

Anybody for a little cliff diving? Nearby (extreme right) see the charts recently held before CNBC-TV cameras by well-known market cycles theorist, Robert Prechter. The charts depict three historically pertinent manias including the current U.S. stock market madness. Also take a look at the graph that depicts one of the chief culprits fueling this delusion -- the derivatives explosion.
Now consider critical mass -- a phenomena defined as the amount of matter large enough to produce an explosive reaction. Bombard an atom with other particles and soon or later the atom cannot contain itself. The mass at that critical point in time, as Einstein predicted in his famous formulation, transforms to energy. This is the physics behind The Bomb. It can be applied to the markets as well. The derivative madness played out recently at Barings and Sumitomo suggests in microcosm what can occur to the markets as a whole when derivative critical mass is reached. These institutions fed derivative positions like an addiction, not because they wanted to, but because they had to or face certain market retribution. There came a time when the position could no longer be fed. Critical mass was achieved and their trading positions exploded in one-time, hyper-critical market events that nearly destroyed the institutions.
Is this what awaits financial institutions on a mass scale as a result of this derivative madness? Some analysts, like Prechter, believe it does. Just as a nuclear explosion in New Mexico mimics the same event only of greater magnitude in the stars, Barings and Sumitomo foreshadow explosions of greater magnitude for the markets as a whole. The lesson to be learned is the one shown in Prechter's charts. When critical mass is reached, the crash occurs quickly without warning.
Please take this short article for what it is -- a warning. History does have a nasty habit of repeating itself, both for good and bad. I have little doubt that there were those in Holland at the height of the Tulipmania who were saying that this was the end of the market cycle; that tulips would go up forever; that tulips represented a new historical paradigm. There were also those who snorted their contempt at such nonsense.
In the case of paper assets, the derivative effect has been to drive them ever higher even though the fundamentals cannot logically support the trend -- every bit the mania in Holland's tulips or the South Sea Bubble. In the case of gold, the derivative effect has been to drive it lower, even though fundamentals cannot support the trend -- a state of affairs we have commented on more than once in this publication. Common sense dictates that the former is about ready for a trip South and the latter a trip North. The trouble with all this, needless to say, is the timing. We do not know when critical mass will be achieved but if these charts contain a a fundamental lesson I would have to say it comes down to this: It is better to be a day early than a moment late. Once the diver went over the cliff, the fall was fast, furious and fatal. We continue to advise prudent diversification with gold as the antidote to the current stock market mania. Critical mass could be achieved at any time.

USAGOLDWelcome.#76616/15/99; 21:09:42

I would like to welcome The Stranger back and say hello to all the new names I see on the board tonight. Welcome all. Thank you for your contributions. Special thanks to those who found their courage and posted for the first time and now you see how easy it is after all.
TomcatWhat is it about gold that we believe?#76626/15/99; 22:10:59

Canamami brought up some very interesting points. In particular, is there any evidence that this forum's gold paradigm is correct?

This got me to thinking about our golden paradigm. What is it about gold that we believe? Can it be clearly stated? I hope I am not being presumptuous but I would like to take a crack at stating what our belief is. Hopefully this could be expanded and refined by others more knowledgeable than myself. Here goes:

We hold that gold, through it's historical precedence, is a true medium of exchange as well as a medium for the accumulation and transfer of wealth. We further believe that in times of severe economic stress, the true exchange value of gold will come forth and will show and increase in value when express in fiat money terms. We hold that attacks to devalue gold will eventually fail and that, as holders of gold, we will, in the long run, preserve both our wealth and our ability to exchange gold for items and services of value.

The Strangercananami and Michael#76636/15/99; 22:12:01

cananami- Perhaps you recall a movie, years ago, starring Robert Redford and called "Three Days of the Condor". In it, Redford played a "reader", someone who spies on foreign enemies simply by reading everything that is printed in the pertinent countries and then synthesizing it into useful intelligence. Somehow, I figured that was you: single, fortyish and smart as hell.

Anyway, you have a much better grasp of the gold market than I do of administrative law, whatever that is. Perhaps, that is unfortunate. In a perverse way, I suspect most of us owe the extent of our knowledge about gold to how "well" we have done with it. Indeed, were it performing the magic we had expected, would we even need a forum?

Michael- While you were out, I sort of returned. After last month's CPI release, I thought the long wait was over for gold. Now, it seems, I may need to be here a while longer yet, sharing insights with these gentle knights.

Meanwhile, I think your atomic fission analogy is well-drawn and entirely apropos. Still, I couldn't help chuckling at how it reminded me of the nuclear winter currently gripping my portfolio.

Oh well, how clearly I remember the BUSINESSWEEK "Death of Equities" cover story, summer 1982. The Dow was at 800 (level with 1966, for crying out loud!). I was 5 years into being a stockbroker at Merrill Lynch, wondering what was to become of me. Then, today, the NY TIMES ran a piece on the death of gold. If only they would have put it on the cover.

And so it goes.

MOZHello Forum#76646/15/99; 22:21:56

G'day from Australia and greetings to all forum participants.I have been following Bill Murphy's GATA since the beginning of this year and then Steve's post on Le Metropole Cafe made me aware of this forum.So far I feel like I have about 6 pieces in a 48 piece jigsaw.The facts I believe to be true are:the hedge funds are short massive amounts of gold,the gold price is being manipulated downwards(although I do not yet understand the precise relationship of the participants in this manipulation),and the US Fed and UK Tresury see gold as a threat and are at war with it.It is only recently ,upon reading Steve's post that I became aware of FOA/Another's posts and the concept of a currency war.I would like to thank them for taking the time to post on this forum and any questioning of their theories is just an attempt by me to gain a deeper understanding of the issues.In the Australian 11/03/99, Mr de Crespigny,exective chairman of Normandy Mining (Australia's largest gold mining company) predicted the failure of the recently established euro.He said no currency like it had succeeded before and that" when it fails it will be marvelous for gold".Has the forum considered this possibility?I know the US dollar has massive debt levels backing it,but still the vast majority of countries around the world prefer to conduct trade using US dollars.The euro on the other hand has yet to prove itself.It seems to me from this part of the world it has a long way to go to be considered a rival to the dollar.My question to the forum is,what would trigger this turn around in fortunes?If Wall Street crashed ,would that really prompt countries in the Asia-Pacific region and the Americas to swap to euros?Further,what would happen if Alan Greenspan manages to successfully bring the inflated values of the American stockmarket downwards without a 1929 type crash occuring?Finally if a stockmarket crash did occur between now and November 1999,when would gold bullion be at its lowest price?I have many more questions on related topics which I will save for the future,in the mean time if any forum participants can give me their views on these questions ,it would be much appreciated.Thanks Moz.
Gandalf the WhiteWelcome MOZ#76656/15/99; 22:33:35

Thanks for jumping into the discussion at the Tableround. If you would have time to read in the Archives, I think you would find lines of discussion of the Gold War having two sides that use position and power of words to assist their side in the WAR. The two sides are called the US$/IMF countries vs. the Euro/BIS positions. The March 11, '99 article by the head of Normandy Mining is just what would be expected from the script written in Hollywood. Please continue to advise us all of the thinkings from "downunder".
Thanks for joining us.

MOZGandalf the White#76666/15/99; 22:45:30

Thanks Gandalf,yes,I can see that,but what happens if the euro collapses and the US dollar survives,its still good for gold.Why do you believe the US dollar will collapse and not the euro?
Gandalf the WhiteMOZ's question#76676/15/99; 23:17:24

ok, here is my thoughts on the Euro. First, it is partially backed with gold valued (quarterly) at Spot as a portion of "Reserves". The Euro is not held by many non-Euro countries at this point in time, while the world is flooded with the US$ as the major reserve currency for most nations. The economy of the US has been fed by foreign investment in the paper notes and bonds and is presently in hypermode toward a potential collapse. Derivatives on the US bonds are causing hedge fund problems, while the Euro does not have this problem. This is why I feel that the Euro will challenge the US$ for Reserve status and be more valuable that the Dollar. Others can explain this far better than I, but it was I that opened my big mouth. I only hope that I have presented a straight story. Comments please!

koansilver#76686/15/99; 23:31:05

Comex silver stocks are on the verge of falling to new historical lows, 75 million oz, (just as Kaplan goes on holiday). And a post here, yesterday, I think, said what is left in Comex needs more refining. Could we be on the verge of seeing a breakout in silver on the upside with gold following? If anyone knows where to get the Comex stats it would sure be appreciated. I am on the verge of buying more long silver positions and wish I could see those warehouse figures.
MOZDollar V Euro#76696/15/99; 23:38:56

It just seem to me ,that the euro is a weak currency,its not really accepted,unlike the US dollar, outside of Europe.If someone wants to purchase 10 container loads of cane furniture from Indonesia and import them into Australia,or Hong Kong,the deal is transacted in US dollars,not Australian dollars.Same goes for Australian mineral exports to the rest of the world.I would have thought that the euro,would be the weaker of the two currencies,because it is based on all those European countries that have never done anything except fight amoungst themselves comming together.Look at Kosova.I'm not saying I'm right I would just like a satisfactory explaination,to help peice this jigsaw puzzle together.
MOZThanks Gandalf#76706/15/99; 23:52:26

Yes,I saw on Bill Murphy's site the debt levels of the large US banks and the amount of derivatives in the system,but has anyone seen the figures for the Europeans,I have'nt as yet,how do we know they are not as bad?Thanks for your responses Gandalf.
Aragorn IIIAristotle, I would be honored to "hear" this tale told in your fine "voice"#76716/16/99; 1:05:02

I have read with pleasure your Memorial day post in regard to our meetings and am confident that you would prove to be the better author in the telling. You have a fine memory, indeed!--you recall "serious buyers have always paid in full yesterday for delivery of Gold tomorrow" out of necessity. And even as the train must sometimes travel the indirect route (where there are rails to be found) to somehow and eventually "get there from here", the lonely pedestrian might SO EASILY travel the direct path that he questions the purpose (or even the necessity!) of these simple steps, and at the destination he even struggles to conceive the proper regard for such an easy journey. I say, just let him talk with the engineer when the train does complete its long course to arrive in a similar position on the adjacent tracks! My friend, you and I buy gold today because we CAN. I leave it to you to explain for the benefit of our fellow footmen how and why the engineer has departed northbound so that one day the train may reappear two tracks over from out of the south to be riding on golden rails. Further, I challenge you to provide this without use of such terms as gold loans or short sales, which likely mean something different to each reader. The course has largely been presented already at this Round Table, yet as you suggest, the questions inspired by gold's "happy hour prices" demonstrate the need to recapitulate in the manner which you are capable. I understand you to be quite busy these few days... so as time allows, good Sir!

got gold?

MOZEuro V Dollar#76726/16/99; 4:55:21

Thanks forum,I'm calling it a day ,its late in Australia.If anyone can shine some light on the questions I asked,I will check back in the morning.I know that when these current events becomes history,we will look back and see everything as clear as day and think why could'nt we see the picture we know now so clearly.
mike55Aristotle#76736/16/99; 6:14:57

Aristotle -- I see that Aragorn has responded to your post #7598 of 6/14/99 with the utmost confidence in your expertise in explaining why the engineer does what he does. The footmen wait in eager anticipation of the tale, as your time will allow.

All aboard!!!

SteveHCanamami#76746/16/99; 6:24:31

August gold now...$260.40.

I wish we could add credence to our thoughts vis-a-vis prediction. BUT, we are in a chess game with two major players and lots of roudy spectators who sometime move a piece during a sneeze or disturbance in the crowd and no one is looking at the board. Under these circumstances, each players awaits the other. Nothing more to do but wait, watch, and try to influence a few moves...haaaa...chew!

Because one can't predict the when doesn't mean the predictor or the predicted is wrong -- it merely points out the inability to control the other player and their affect on the game more than a few moves out. Here is the simplest logic as I see it of the end game:

Gold will die or gold will live. Gold will likely survive because at least 2.5002 billion people believe in gold's value as a currency influencer. Thus as a gutsy prediction, gold will remain a player.

The StrangerMoz#76756/16/99; 8:26:09

Greetings. For reasons you have well explained, I doubt the Euro will ever ascend to a reserve or international trade status similar to that of the dollar. That will be just fine with me, as I consider the introduction of any possible dollar coequivalents as a greater threat to gold than to the dollar anyway.

As to a turnabout in the near term Dollar/Euro exchange rate: from my experience, there is no quicker way to humble oneself than to start predicting currency relationships. And what if they simply all go into different rates of decline anyway? What matter will exchange rates be then to a goldbug?

I would say, however, that notions of a dollar cataclysm, at this juncture, are unfounded. The U.S. economy is robust, and, while many sectors of the stock market are vastly overpriced, many others are not. Furthermore, there is nothing about current monetary policy or bond rates that would imply a collapse is imminent.

All- I suppose, with all my haranguing about inflation, I must comment on this morning's CPI. I won't make excuses. None of today's numbers support my views. However, the bond market, OPEC, recent rapid money creation, recent comments from Greenspan about productivity, recent rising import prices, etc., must amount to something. Monthly figures being notoriously erratic, I will choose patience for now. A far worse outcome, by the way, would have been for the numbers to be highly inflationary and for gold to fail to respond. That is exactly what happened last month. At least, this way, we get an opportunity to see how well gold holds its recent lows in the face of news which is negative. That may tell us more about the real health of this market anyway.

The ScotNEEDED TUTORING#76766/16/99; 9:14:16

Gentlemen and Ladies,
Being a newcomer to this forum and to the "Gold Game" I have very much enjoyed the postings of those on this forum. I have tried in vain to understand all that is offered by this group. I have some very basic questions that I would appreciate your thoughts on. 1. As I understand it, the opinion of this group, for the BOE sell off, is to lower the value of the Pound to a more competative rate for Euro trading? 2. If the cost of mining Gold is about $220.00 - $ 240.00 worldwide, could we safely say that the base value of Gold would not, (under normal circumstances) fall below that cost. Please respond with your thoughts. Thankyou, The Scot

USAGOLDToday's Gold Report: More Gauzy Rhetoric from Foggy Londontown#76776/16/99; 9:36:04

MARKET REPORT(6/16/99): Gold was down slightly in the early going with financial
markets featuring the euro taking another broadside and currencies across the board
dropping against the dollar. The pound continued its descent into currency irrelevance
shedding another nearly half cent against the dollar in this morning trade. Sterling has been
nearly a free fall since the Bank of England announced in early may that United Kingdom
would sell half of its gold reserve. The euro suffered similar indignities against the dollar
today descending to a new low. The markets were reacting to a seemingly benign consumer
price number ("unchanged" says the Labor Department) -- an outcome we expected here
after the big spike (.8%) last month.

Gold was quiet overseas last night. According to a Reuters London this morning "British
Treasury Minister Patricia Hewitt told parliament the 10 percent fall in price since May 7 in
reaction to the Treasury's plan to sell 415 tonnes of its gold reserves was 'somewhat
overdone.''' In one of the strangest contributions of twisted logic I have ever seen in the
public discourse on any political or economic subject, Hewitt went on to say that gold was a
valuable part of countries' reserve assets but the government had to minimize the risk to the
taxpayer of market fluctuations. "At the moment we are twice as exposed to movements in
the gold price as to movements in the value of the dollar,'' she said. "This is a simple
portfolio decision.''

An astonishing statement given the fact that it was her government's decision to sell gold
and depress the market, and no other factor, which elevated the risk of gold ownership to
British citizens. One wonders if she was able to keep a straight face when uttering those
words. We continue to hold that there is more to this than meets the eye and this kind of
hazy testimony only adds to the suspicions held by most gold advocates. For all the talk of
transparency by the British government, Hewitt's testimony before Parliament has all the
earmarkings of a cover-up. So what is really going on in foggy Londontown and within the
Blair government? Parliament, I should think, would want to know.

That's it for today, fellow goldmeisters.

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