USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
http://www.usagold.com/cpmforum/
elevator guyblackout!#1505110/01/99; 00:02:27

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

SteveHDec. gold up 1.7 to...#1505210/01/99; 00:09:38

$301.10.

This just in from GATA:

Good read!

9:15p EDT Thursday, September 30, 1999

Dear Friend of GATA and Gold:

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

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

Please post this as seems useful.

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

* * *

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

www.lemetropolecafe.com


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


September 28, 1999

Three cheers for Midas Murphy!

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

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

THE TWILIGHT OF THE DOLLAR

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

THE COMING DOLLAR BACKLASH

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

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

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

WHERE DOES GATA GO FROM HERE?

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

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

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

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

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

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

A FINAL WORD

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

-END-


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

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

SteveHpropoganda?#1505310/01/99; 00:24:06

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

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

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

Lower lease rates encourage more borrowers.

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

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

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

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

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

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

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

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

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

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

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

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

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

SteveHpropoganda?#1505410/01/99; 00:24:52

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

below's link. oops.

SteveHChapman#1505510/01/99; 00:48:28

http://www.gold-eagle.com/gold_digest_99/chapman100299.html

"...That money was used to provide liquidity for world stock and bond markets, particularly the U.S. markets. That source of liquidity is now dead. Next we expect the yen at 103 to be borrowed and sold, the carry-trade and the funds will be used to keep the stock market correction at 15%-20% and 30-year bond yields at 5 3/4% to 6%. That action and with the help of central banks the yen will be moved down to 118 again. We can assure you the Japanese were reamed at the G-7 meeting for acting unilaterally. Unless the yen goes lower, that game will end in a few months and two sources of world financial liquidity will be gone. The third, carry-trade in the Swiss franc is over. The currency should trade down to 1.55 and could go to 1.65, but that's it. Thus, if these three sources of liquidity dry up, the gold carry-trade finished and yen and franc carry-trade limited, then banks will be forced to create liquidity. They'll do this by monetizing debt. That is the Fed buying U.S. Treasury Paper, which is immediately inflationary. Otherwise they'll print money which will show up in inflation in 6-12 months. Gold went to $329 and corrected back to $309. It will consolidate between $300-$320, then by the end of January should be attacking $350 an ounce. The bad news is the stock market will trade between 9200 and 11,306 for 6 to 9 months, then head lower...."
WAC (Wide Awake Club)Leigh - Belgian Gold#1505610/01/99; 01:20:35

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

714SteveH re: Chapman#1505710/01/99; 04:07:08

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

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

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

Goldspoonelevator guy#1505810/01/99; 04:29:07

http://www.metalsman.com/masterprices.htm

Try this one.....
WAC (Wide Awake Club)Goldspoon#1505910/01/99; 04:33:31

Platinum up $26??
RossLDelivery on COMEX gold contracts#1506010/01/99; 04:39:07

http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999

Delivery on COMEX gold contracts is usually the last Friday of the month. Trading on the October contract ends on Oct 27 and delivery is due on Oct 29. Expect a squeeze in about 3 weeks. <grin>
GoldspoonLeigh....horse race...#1506110/01/99; 05:22:36

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

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

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

LeighGoldspoon#1506210/01/99; 05:29:50

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

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

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

GoldspoonWAC...................Woah...horse with no name....easy....#1506310/01/99; 05:31:11

Every time the gold bug gallery lets out a cheer... it spooks him....easy Goldspoon (talking to myself) you don't want to fall off again and hit your head or we'll never get where we're going....
LeighSilver MOON #1506410/01/99; 05:31:14

That was a typo.
RossLTiming the squeeze#1506510/01/99; 05:53:06

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

GoldspoonLeigh, my apologies for being sooooo confusing.#1506610/01/99; 05:54:49

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

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


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

Goldspoon"only straw" ....."only straw" !!!#1506710/01/99; 05:59:43

not staw
Black BladeHorse with no name#1506810/01/99; 06:00:13

Goldspoon, "Horse with no name" sounds like a good enough name, after all a band named America had a hit with the same title. BTW, s&p futures down 5 pts. I don't know what fair value is but looks like a the market open will be down if it holds. Gold is at $303 in London. Off to the races!
SteveHGold carry, Yen Carry, Concealed Carry...#1506910/01/99; 06:06:30

http://www.us.net/potomac/pencak.html

but first Dec gold up $6.50!

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

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

Christopher PENCAK, Plaintiff,

v.

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

No. 94-73073.

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

Dec. 16, 1994.

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

Judgment for defendant.

1. Federal Civil Procedure [key]2546

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

2. Counties [key]208

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

3. States [key]4.1(2)


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

4. Constitutional Law [key]225.1

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

5. Constitutional Law [key]83(6)

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

6. Constitution Law [key]83(6)

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

7. Constitutional Law [key]83(4.1)

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

8. Constitutional Law [key]277(1)

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

9. Constitutional Law [key]287.1

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



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

Christopher Pencak, Warren, MI, for plaintiff.

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


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

EDMUNDS; District Judge.

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

Background

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

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

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

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

II. Standards of review


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


B. Standard for summary,judgment

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

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

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

III. Analysis


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

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


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

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

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

C. Equal protection

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

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

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

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

D. Due Process

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

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

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

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

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

Manual, page 4.

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

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


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

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

Black BladeGoldspoon your horse sure is fast!#1507010/01/99; 06:07:11

"Rich man's gold" is charging hard down the backstretch at $28 (420), "Yellow gold" at $7.30 (305), and "Silver moon" (5.66) at 0.10. "Horse with no name" looks to be hung up at the gate? The race is on!
GoldspoonBlack Blade #1507110/01/99; 06:07:34

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

Black BladeSteve, CW laws#1507210/01/99; 06:15:46

Steve, very interesting. I am fortunate enough to live where there is relatively little problem in getting a CW permit. The only requirement is a short course dealing with the legal issues and some time on the range with the instructor. My take is where the laws are patently absurd, why bother with a CW permit? Better judged by 12, than carried by 6.
Black BladeGoldspoon#1507310/01/99; 06:18:36

I heard the s&p futures over the radio, but I think that they can be accessed on the CNBC site, or on their station. I would like to know a www link as well.
ss of nep(No Subject)#1507410/01/99; 06:33:15

http://www.cme.com/cgi-bin/gflash.cgi

S&P 500

and more

Cavan ManSteveH 15069#1507510/01/99; 06:46:07

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

BTW, Colt is exiting the consumer toy business.

Cavan ManBlack Blade#1507610/01/99; 06:48:46

www.mrci.com
apdchiefRich Man's Gold#1507710/01/99; 06:48:50

http://www.kitco.com/lease.rate.html

Lease Rates for platinum at 27%!!!!! What's going on?
Black Blades&p futures#1507810/01/99; 06:54:05

Thanks for the links all. s&p futures are sinking fast -6.90.
Black Blade(No Subject)#1507910/01/99; 06:55:34

Previous post "special" thanks to Cavan Man and ss of nep!
elevator guy@quote.com/livechartscom/#1508010/01/99; 06:57:16

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

mike55SteveH - Carry Trades#1508110/01/99; 07:07:30

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

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

BonedaddyWhy Granny, It's You!#1508210/01/99; 07:28:37

Welcome Granny! The talk here is quite excited at the moment, so new posters may not be afforded all the cordiality that is normal on this forum. (Shame on us) In regard to your investment question, you have very nearly arrived at the proper answer. You have come here, to the round table of gold. Your only decisions now are how much and what form to aquire. If you choose to purchase physical metal and take possession, your gold will be "close at hand in any emergency". Let's peer down the road several years. If the dollar has collapsed, I doubt you will be kicking yourself because you bought Maple Leafs instead of Angels. There are advantages to both. The pre-1933 gold was exempted from the last government gold confiscation. It is selling at a small premium now and there is currently no requirement for dealers to report it if you choose to sell it back through a dealer. If you trade it to your neighbor for a few buckets of wheat, any gold is probably not reportable. Of course gold is only a money question, the best investment one can make now, or at any other time, is time spent in prayer.
BonedaddyCavan, ...Man... a .380?#1508310/01/99; 07:31:53

Do you speak IPSC?
mike55Daily Quote#1508410/01/99; 07:41:22

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

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

onlychildQuestion for the folks "down under"#1508510/01/99; 08:04:50

Can any of our Austrailian posters enlighten me on the confiscation of weapons there? What is public sentiment? What ploy did the government use to justify such a radical action? What weapons were affected?
onlychildHey MK#1508610/01/99; 08:30:04

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

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

Buena FeSide Show#1508710/01/99; 08:37:43

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

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

USAGOLDToday's Gold Market Report: Day Five of the Big Breakout; The Cruellest Month (for equities markets) Begins#1508810/01/99; 09:02:39

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

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
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NORTH OF 49What's gonna happen to the little guys?#1508910/01/99; 09:36:36

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

No49

grannyBonedaddy#1509010/01/99; 10:03:53

Bonedaddy,

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

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

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

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

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

Be well all

grannyDelayed delivery of Gold Eagles#1509110/01/99; 10:09:40

Received a call this a.m. that delivery on a few 1 oz. Gold Eagles will be delayed for about 2 weeks. Reason given that mint is behind, or something like that. Is this usual at "ordinary" times or does this have anything to do with what is going on right now? (I'm not a "dealer" by any means; just ordering from one.)
TownCrierNew York Fed details Y2K liquidity measures#1509210/01/99; 10:20:04

http://biz.yahoo.com/rf/990930/ber.html

In a nutshell, the Fed will accept a broader array of collateral for longer periods when banks need to "borrow" cash as their customers' deposits are withdrawn or spent down in advance of Y2K.
Leighgranny#1509310/01/99; 10:25:30

Hi again, granny! You know, it would be inappropriate for any of us to give you advice on gold buying since we're not dealers. Luckily, Mr. Kosares IS a very experienced (and nice) one; I imagine he will be happy to help you. There's a phone number on the "Info Packet" page, or you can e-mail him. Good luck!
TownCrierJapan recovery is key for world economy -Summers#1509410/01/99; 10:30:04

http://biz.yahoo.com/rf/990930/bgh.html

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

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

TownCrierFed added $4.316 bln in wkend, $1.345 bln in 6-day RPs#1509510/01/99; 10:35:22

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

At what point will the Fed start accepting beanie babies and baseball trading cards as collateral to replenish the banking system's reserves?
OROLease Rates#1509610/01/99; 10:45:47

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

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

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

TownCrierRussia c.bank amends precious metals pricing system#1509710/01/99; 10:46:04

http://biz.yahoo.com/rf/991001/t4.html

Rouble? What's a rouble? Here's a look at Russia's real money and the cost of transactions.
MariusA strange call from my broker#1509810/01/99; 10:52:01

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

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

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

grannyGovt. Confiscation of Gold#1509910/01/99; 11:08:42

So, if I have my gold buried somewhere, let's presume in a place secured enough to hamper metal detection of it all... what measures can the govt. take against me, physical and legal to confiscate it?? How do they know that I have not "bartered" it all away?
Phos@Marius - gold#1510010/01/99; 11:09:07

The only thing that could tank gold on the weekend, I would think, would be an announcement of a large amount about to hit the market. It cannot be the Europeans. Could the US dishoard onto the market without Ccongressional approval? I don't think there is enough elsewhere to do the trick. Everyone else is buying. Or alternatively, they could announce that the market is closing until....... Don't know the answer to that one. I take it your broker did not divulge any sources?
PH in LAStrange Calls and Used-Car Salesmen#1510110/01/99; 11:26:43

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

Welcome Marius!

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

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

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

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

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

Cavan ManMarius#1510210/01/99; 11:32:33

Glad to have you here. Please, don't be a stranger. IMHO, I'd get another broker. I'd avoid the ups and downs of trading paper. You will sleep sounder and live longer if you buy the metal and lock it up. If you have been watching for awhile, you probably agree with me that the best analysis is right here. Our host is undoubtedly one of the most knowledgable gold analysts in the US and perhaps the world. I'd give him a call at 800-869-5115.
Peter AsherMarius#1510310/01/99; 11:52:24

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

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

Golden BoyRussia Leasing#1510410/01/99; 12:00:39

Could someone please direct me to a report stating that Russia is now leasing their gold. Russia has publically stated that they are now selling but I haven't seen any statements regarding them leasing. At the end of the daily report, michael comments on Russia leasing.
Mr GreshamOro 15096!#1510510/01/99; 12:17:48

ORO! You surpass yourself!

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

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

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

gidsekGold trading remains suspended #1510610/01/99; 12:24:32

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

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

gidsek

gidsekSorry, link#1510710/01/99; 12:25:16

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

gidsek
gidsekRussia leasing#1510810/01/99; 12:30:22

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

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

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

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

gidsek

AngelHi Guys and Gals#1510910/01/99; 12:45:59

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

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

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

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

MariusThanks for your comments#1511010/01/99; 12:49:04

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

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

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

PhosBill Murphy's bombshell#1511110/01/99; 12:49:42

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

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

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

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

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

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

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

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

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

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

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

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

TownCrierSirs gidsek and Golden Boy...the Russian link was provided at my 10:46:04 - Msg ID:15097#1511210/01/99; 12:52:29

http://biz.yahoo.com/rf/991001/t4.html

Here it is again.

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

PhosPlatinum Lease Rates#1511310/01/99; 13:00:35

Does anyone know why platinum lease rates have gone so high today? Does it have any relevance to other precious metals?
OROgidsek#1511410/01/99; 13:01:14

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

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

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

TownCrierSwiss Nat Bank says will be prudent on gold sales#1511510/01/99; 13:11:58

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

SNB Chairman Hans Meyer said on Friday, "It will be in our own interest to exercise the necessary diligence when converting part of our gold holdings into interest-bearing assets."

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

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

TownCrierStrong Sept NAPM stirs market's US rate hike worries#1511610/01/99; 13:18:28

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

We'll know next Tuesday what the Fed thinks. But for now, investors were spooked by the National Association of Purchasing Management's manufacturing index which jumped to 57.8 in September. This greatly exceeded analysts' forecasts for a slight rise over August, predicting 54.3 for September.
Mr GreshamWhy Paper Money?#1511710/01/99; 13:34:40

http://www.prorege.com/north/6348.html

Gary North answers a reader.
OROMarius#1511810/01/99; 13:37:09

Perhaps Murphy answered your question.

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

gidsekOro, that may not be the only one..#1511910/01/99; 13:38:08

If this has been posted already I apologize.

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

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

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

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

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

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

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

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

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

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

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

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

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

gidsek

gidsekTownCrier Russian Link#1512010/01/99; 13:40:53

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

gidsek

TownCrierSir gidsek, I wasn't after credit...#1512110/01/99; 14:16:56

was simply being "at your service."
GFDRE: BOMBSHELL!!#1512210/01/99; 14:29:18

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

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

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

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

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

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

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

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

So what happens when Tifany stops doing gold?

Cavan ManMr. Gresham 15117#1512310/01/99; 14:36:12

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

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

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

POPEYENo Subject#1512410/01/99; 15:08:53

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

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

.

GoldspoonPhos#1512510/01/99; 15:21:41

http://www.kitco.com/lease.rate.html

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

PH in LARe: Bombshell!!!!#1512610/01/99; 15:31:48

Point well made! GFD.

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

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

Where is FOA on this?

AELmarius, angel, other lurkers (?)#1512710/01/99; 15:32:06

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

SteveHGold trading halted in India?#1512810/01/99; 15:47:05

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

?
AELcavan man#1512910/01/99; 15:50:20

Cavan Man (10/01/99; 14:36:12MDT - Msg ID:15123): are you saying that it is (rather) easy to counterfeit U.S. currency? North may have some of his tech details wrong (uniqueness of "intaglio"), but his point was that authentic FRNs have a measure of "specialness" (is it the paper?) and cannot be duplicated at will. If this is incorrect, perhaps we should all get into the printing biz, while FRNs are still worth something... ;)
TownCrierAfter the Close: the GOLDEN VIEW from The Tower#1513010/01/99; 15:58:09

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

OROPh in LA - they already did that#1513110/01/99; 16:00:23

http://www.wallstreetuncut.com/wsuArchive.htm

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

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

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

Cavan ManAEL 15129#1513210/01/99; 16:07:24

Thanks you for asking. I enjoy your posts.

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

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

PH in LASteveH Re: (10/01/99; 15:47:05MDT - Msg ID:15128)#1513310/01/99; 16:36:18

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

SteveH:

Karachi is in Pakistan. (See Link)

phaedrusBombshell#1513410/01/99; 16:39:36

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

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

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

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

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

nickel62Hedge posture of Dayton Mining#1513510/01/99; 16:44:10

I have found many of the comments on the USA Gold Link to be very helpful and wonder if anyone has any idea of the hedge posture of Dayton Mining. Thanks
OROdayton#1513610/01/99; 17:19:48

The Company realized an average gold price of US$336 per ounce in 1998 compared with US$402 per ounce in 1997. Dayton's hedging program for 1999 consists of 84,000 ounces of puts at US$340 per ounce. These hedges are spread evenly over the year at 7,000 ounces per month.
RossLHedge posture of Dayton Mining#1513710/01/99; 17:22:13

http://www.dayton-mining.com/

I don't know for sure. See their web site. It has a vague statement about hedging. The share volume this afternoon was over a million. I don't know what that means except there are plenty of buyers and sellers for a gold stock that costs 9 cents a share.
GFDEyes Wide ??#1513810/01/99; 17:35:25

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

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

16-pennystreet price#1513910/01/99; 17:41:03

the cost of a 1oz kruggerand at the only coin shop in a town nearby is $335+tax unless you buy $1,000 worth then it is tax free
Chicken manphaedrus - Reflexivity#1514010/01/99; 17:54:39

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

Enjoyed your take on the markets....

RossLTownCrier After the Close#1514110/01/99; 18:15:45

http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999

TC sez:
[Can anyone confirm what the deadline is to provide delivery on a gold contract? Last day of month, maybe? That question was raised yesterday, and we've yet to confirm the answer.]


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


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


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


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

NewGoldAnother South African Top ANC MP attacked!#1514210/01/99; 19:23:27

http://www.iol.co.za/news/newsview.php3?click_id=79&art_id=qw938813941868M100&set_id=1

That make it 2 in 48 hours, looks like something BIG is going on in South Africa against the marxist ANC Gov ?
GoldflyOh, Oh, HOHOHOHOHO HEE HEE HEE HAHAHAHAAAAAAA.......#1514310/01/99; 19:29:47

Angel - ROFL!! ROFL!!

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

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

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




Could you???

CmaxMillhouse @Gold Eagle#1514410/01/99; 19:40:06

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

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

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

Gold PowerThe New Golden Bull#1514510/01/99; 19:41:41

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

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

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

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

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

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

Thank you.

SnowyGun Controll in Australia#1514610/01/99; 19:45:55

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

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

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

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

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

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

God bless,
Snowy.

PH in LARe: Bill Murphy's Bombshell#1514710/01/99; 19:52:08

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


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

FOAComment#1514810/01/99; 20:11:14

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

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

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

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

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

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

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

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

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

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

Thanks ALL FOA

onlychildSnowy#1514910/01/99; 20:40:33

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

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

PH in LAIs time running out? Or has it already run out?#1515010/01/99; 20:41:09

Thanks, FOA, for you fine comment today.

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

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

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

How much time do we really have?

Golden TruthTO F.O.A#1515110/01/99; 20:50:03

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

PH in LAAny reactions over here to this?#1515210/01/99; 21:03:18

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

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

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

Thank You,

Mike

RossLIs time running out? Or has it already run out?#1515310/01/99; 21:18:23

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

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

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

Cavan ManFOA 15148#1515410/01/99; 21:34:46

FOA,

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

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

MariusA comment to Phaedrus & PH#1515510/01/99; 21:45:29

15134 & 15152

Phaedrus

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

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

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

Cavan ManOther Cultures & FOA#1515610/01/99; 21:46:09

Here in the west, we would do well to consider the wisdom of the east and of cultures and peoples who have been engaged in commerce for over 5000 years. We complain about and comment upon contemporary media. However, egocentricity has created a historical bias in education towards the "Western Heritage" which has robbed us of valuable lessons learned centuries ago by peoples who walk this earth still.
BeowulfLTCM may be out of business, Fed's McDonough says#1515710/01/99; 21:51:19

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

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

FOAComment#1515810/01/99; 21:59:26

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

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

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

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

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

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

RossLMarius#1515910/01/99; 22:03:56

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

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

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

koanKaplan is Bearish#1516010/01/99; 22:24:27

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

PH in LARossL & Marius#1516110/01/99; 22:29:28

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

RossL:

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

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

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

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

Truly, this market is not "as before".

Peter AsherMarius Phadreus and PH#1516210/01/99; 23:06:29

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

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

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

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

Peter AsherUh Huh!#1516310/01/99; 23:10:15

http://news.excite.com/news/r/991001/22/financial-ltcm

LTCM may be out of business, Fed's
McDonough says

koanUSA GOLD or any coin shop#1516410/01/99; 23:14:33

You think gold is going through the roof before Monday, the above places can sell you all you want. The fundamentals look good for gold and all of the PM's, but it will take time. As I have said before speculation is hard to quantify. When any of the PM's rise or fall it has an effect on the other PM's. Remember ALL PM's rose this week and it was all a change in psychology and technicals of trading (i.e. short covering, etc) - nothing fundamental changed. If COMEX gets short of gold and gold rises India can sell gold and silver until the cows come home - whatever that means - if the price is high enough.
koandollar volume small#1516510/01/99; 23:29:29

Dollar volume on both the Vancouver and Alberta exchanges was small v - 8.8 mil and A - 6.7 mil.
elevator guy@ Marius, and others. Regarding gold call options.#1516610/01/99; 23:30:53

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

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

AllanCSeamless logic#1516710/01/99; 23:45:01

FOA

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

Physical is the only way to go.

dukiAnother Lurker Outed#1516810/02/99; 00:06:01

Hello, I've only been lurking here for a couple of months. It would seem that you good people have covered just about everything I might have to say on the subjects of gold, fiat currency, gun control, etc. I broke my financial back fighting against fiat currency in 87. Now that my back is better, I just accumulate physical, and equity gold and silver. once again just sayin HELLO.
canamamiDon Coxe's Conference Call - Lengthy and Interesting Gold Discussions#1516910/02/99; 00:15:42

http://www.jonesheward.com/commentary.cfm

This week's conference call is well worth the time for a follower of this Forum. Gold was the main topic of the call. Most relevant portions are minutes 0:00 - 15:45 and 29:30 to 33:30. A very wide-ranging discussion, and too lengthy to summarize.
THX-1138Mountie coins#1517010/02/99; 00:21:30

Since the street price of gold has gone up to around the price of $320 I was thinking about purchasing a couple Canadian Mountie coins. My reasoning is with the increasing supply issues of US Eagles, and Maple leafs, and Krugerands, I figure nobody has thought about purchasing the Mounties as the price remained $320/oz while spot gold was at $255. I will have to ask my coin dealer what coins are actually the cheapest, but if the current prices are within $2 of a Mountie, I am going for them this week. They are actually much prettier than a Maple Leaf. Does anyone have any thoughts about this?
Chris PowellBOOM! Gold shorts start to default#1517110/02/99; 00:36:08

http://www.egroups.com/group/gata/223.html?

Latest "Midas" commentary
by GATA Chairman Bill Murphy.
Spread the word.

SteveHCM -thanks and Note to a friend#1517210/02/99; 00:40:50

Leroy,

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

SteveH

PS. This is from GATA:


11:30p EDT Friday, October 1, 1999

Dear Friend of GATA and Gold:

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

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

* * *

A SQUEEZE TO PLEASE

By Steve Burrell
Sydney Morning Herald

Saturday, October 2, 1999

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

-END-


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dukiTHX 1138 MOUNTIES#1517310/02/99; 00:58:57

As I understand these coins are sold at 320 ( I saw 325 ) with a put option to sell them back at 310, good till 12/31/99. In the last POG spike I saw the price of mounties rise above their "normal" price right along with the rest of the coins. I don't know about the purity of the Mounties but assuming that they are equivalent to Maples, once the other coins rise, the Mounties at the same price would have a free asset ( 310 put ) attached.
TanglewildGold options#1517410/02/99; 04:37:52

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

The online trading firm i purchased them through now says:


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

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

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

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

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

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

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

LeighSteveH#1517510/02/99; 06:12:52

I think you mean Alex Haley. What an interesting letter! Leroy is a lucky person to have a friend like you.
Hipplebeckgold leasing#1517610/02/99; 06:53:33

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

elevator guyPsychology of the game#1517710/02/99; 06:54:47

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

OROA note to the Skeptic#1517810/02/99; 06:56:06

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

Gold short position.

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

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

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

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

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

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

nugget101Granny re: Confiscation by Gov#1517910/02/99; 07:18:38

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

nugget101Intaglio vs Offset and Gary North msg 15123#1518010/02/99; 07:39:02

Cut this guy some slack. He's not a printer nor would say he is an expert in that field. I would expect he means that the quality of the printing will be noticably poorer and therefore apparent to even the dimmest sheeple. I would expect that there wouldn't be enough paper stock available and they would have to use something entirely different. Maybe something like military script or food stamps. That alone would kill confidence. Forgery is easier and this money would most likely only be able to be used domestically.
BonedaddyGranny, what big teeth you have! :)#1518110/02/99; 07:44:23

Arsenal of weapons? Buried gold? As Yosemite Sam would say, "thats my kinda gal". Leigh is right, call CPM and talk to one of the dealers. (I'll put in a plug for George now. I have been ordering my stash from him since 1996.) They can advise on availability and advantages of the different type of PHYSICAL gold. Of course a lady of your caliber (pun intnded) would only buy the physical and take delivery. You don't have to be concerned about the long delivery times when ordering from CPM. They're honest. By the way I've got three "quarter horses with chrome" standing in the corral and another on order for March Delivery. Tobianos one and all.
RossLIs time running out? Or has it already run out?#1518210/2/99; 8:09:05

PH in LA

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

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

Hipplebeck

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

BonedaddyTo: Elevator, Cavan, Granny, Leigh, and all..#1518310/2/99; 8:28:04

About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.
BonedaddyTo: Elevator, Cavan, Granny, Leigh, and all..#1518410/2/99; 8:28:17

About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.
BonedaddyTo: Elevator, Cavan, Granny, Leigh, and all..#1518510/2/99; 8:28:37

About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.
elevator guyMy post of 10-1, id# 15166#1518610/2/99; 8:30:22

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

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

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

RossLHipplebeck#1518710/2/99; 8:40:20

It is my understanding that principle + interest on gold leases are to be paid back in gold.
nickel62Smaller gold mining companies that are currently uneconomic#1518810/2/99; 9:29:43

It seems to me that now might be the time to resurect some of the investment ideas of 1995 and 1996 when the small gold stocks were flying high and every investment banker was fighting over raising financing for every moose pasture that they could find in most of the western and eastern world. As the apparent commodity appreciation continues the dollar decline and the relative weakness in the stock and bond markets will unleash a healthy amount of investment capital looking for a home. To say nothing of an army of investment bankers willing to finance anything that moves. Many of the scams of that last market are gone and thank god. But there were some actual viable deposits that faded into obscurity when the economics changed so radically and can now be bought for a song. This forum is repleat with individuals who have experience in this area and now is the time to be sharing the information. Too often after the move has gone too far along all you hear are already invested owners talking their personal book,in a rather hopefull wish that it will somehow make their own stocks go higher. Many of these deposits where highly valued in the marketplace and some of them still have vialbel gold mining and gold production comapanies that trade on exchanges. These woill be the first to raise new capital and thereby the stock price when the investment banking cycle starts again in this sector.CARPE DEIM
granny(No Subject)#1518910/2/99; 10:35:21

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

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

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

Peter AsherUh,Steve#1519010/2/99; 10:39:55

That's Alex Haley, not Aldous Huxley. The latter was well known for a book called "The doors to perception" along with many novels, one of which was "Island."
Peter AsherTanglewild#1519110/2/99; 10:48:41

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

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

PH in LAAldous Huxley#1519210/2/99; 10:55:20

Peter Asher:

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

LeighPH in La#1519310/2/99; 11:02:53

George Orwell. Aldous Huxley (1894-1963) wrote "Brave New World." He was the grandson of the famous sociologist Thomas Henry Huxley and the brother of the noted biologist Sir Julian Huxley. (We have a World Book Encyclopedia next to the computer desk!)
LeighMK and Town Crier#1519410/2/99; 11:08:20

How was "Three Kings?" Is it worth going to see? Did you see a lot of gold?
Peter AsherPH#1519510/2/99; 11:15:17

It was the "Other one" , "Brave New World"
Leighgranny#1519610/2/99; 11:57:14

Granny, don't feel that you have to buy your coins locally, unless there's a merchant that you like and trust. There are lots of dealers on the Internet, or you can go to your nearest big city. Don't be afraid to have the coins shipped. I was at first (sending gold by U.S. MAIL? Are you crazy????), but it's actually very safe. There's a long paper trail the Postal employees have to follow, and if anyone is caught stealing they are fired. The prices are very competitive. I like to buy bullion coins, which are new, very pretty, and often 0.999 pure. They're also a better bet than purchasing coins you aren't familiar with, especially if you aren't quite sure of the dealer.
turbohawgTough Talk From The European Central Bank#1519710/2/99; 12:05:21

http://www.prudentbear.com/markcomm/markcomm.htm

The latest commentary from the Prudent Bear, David Tice ...

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

...

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

got toilet paper ??

turbohawgNational ID killed by House#1519810/2/99; 12:11:50

http://www.house.gov/paul/press/press99/pr100199.htm

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

Which means the totalitarians will now try Plan B.

grannyLeigh..local purchase#1519910/2/99; 12:16:27

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

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

LeighHooray!!#1520010/2/99; 12:19:42

Thank you, God, and thank you, Ron Paul! Mr. Paul is a diligent advocate for our freedom, and we owe him A LOT!!!
SteveH Peter and Leign#1520110/2/99; 12:24:18

It was late/early. Thanks.
Chicken manORO - Trading of the Future or Future of Trading...?#1520210/2/99; 12:45:38

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

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











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

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

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

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

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

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

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

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

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

Here is my suggestions for the Nymex/Comex:

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

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

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

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

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

Regards,

John J. Lothian

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

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

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

PH in LARe: Option settlement (The more things change...)#1520310/2/99; 12:50:07

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


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

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

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

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

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

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

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

Best regards, and thank you.....



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

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

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

Thank You

AngelGold by US Mail#1520410/2/99; 12:52:26

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

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

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

grannyJust a little story.#1520510/2/99; 12:54:57

Just a short sweet story.

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

Just prior to taking him to hospital, for scheduled surgery, he insisted that we empty the contents of his safety deposit box to find his one and only 1800's gold coin. The BAGS of coins were quite shocking to us as we remembered, from childhood, his occasionally bringing out his books of coin collection so carefully arranged and protected. He sold off most of his silver in the 70's and made a nice profit but continued to collect silver, unbeknownst to us, by throwing coins, any silver coin, in a bag, then bags, and then more bags (they are heavy). It took two of us to take the box out of its drawer after taking seve

TomcatORO: The half life of the dollar#1520610/2/99; 13:04:57

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

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

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

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

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

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

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

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

Peter AsherAngel#1520710/2/99; 13:36:12

Angel

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

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

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

This email address is being protected from spambots. You need JavaScript enabled to view it.

Cavan Mangranny#1520810/2/99; 14:00:24

Hello. I would not buy from local coin shops unless the size of your purchase warrants. I would purchase pre-'33/34 European bullion coins and newly minted 1 OZ. Austrian Philharmonics. I would not buy US Eagles or gold coins denominated by any other country with strong ties to the US dollar. The European bullion coins will have some numismatic value because of dates/condition. Since the troy weight is approximately a 1/4 OZ. or less, they can also be used as the "money" they once were if necessary. The Austrian coins have the highest monetary value (2000 Schillings) about $US180 last time I looked and they are closely tied to the Euro block. Both products will be a store of wealth. The Philharmonics could be considered an "investment" if your diversification strategy permits. MK can sell you all you need.
Cavan ManBonedaddy#1520910/2/99; 14:02:27

Your many contributions are, right on!
Cavan Man@ ORO#1521010/2/99; 14:07:13

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

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

Cavan ManReality Check#1521110/2/99; 14:25:24

RE: Gloom and Doomy Forecasts

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

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

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

CoBra(too)Humble retort to 2 days of great posts - #1521210/2/99; 14:29:13

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

Thank you CB2

GoldspoonNext weeks and next Months Headlines.....TODAY!!#1521310/2/99; 14:36:24

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

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

koanAldous Huxley - and gold#1521410/2/99; 14:42:29

I don't know how you wondered onto that subject, but the Huxley family is/was? one of the great intellectual families over the last 150 years. Sir Julian Huxley is famous for his great defense of Charles Darwin. I am very curious about Mondays action on the PM's. The stage seems to be set for a rise with inflation up and hedging down. But I am worried about Kaplan's bearish comments and statistics. The variable which could make the difference on the upsdide would be new buyer's which is almost impossible to predict and would counter act Kaplans stats. Over the longer term I am more bullish. Kaiser is real bullish. He thinks this is the $800 move. Sure hope he is right as I can then do my trading fome Bora, Bora. Peter, Aldous Huxley is famous for Brave New World - you and I and a few others are probably the only one's who ever read Door's of Perception ( I thought a very good treatise). lol
schippiTo ALL Gold Bears#1521510/2/99; 14:43:20

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

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

MariusIt's a fill! (Unless...)#1521610/2/99; 14:47:33

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

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

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

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

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

Peter AsherAngel#1521710/2/99; 14:51:35

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

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

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

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

**
Chorus

Peter AsherAngle, Goldfly#1521810/2/99; 14:56:44

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

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

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

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

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

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

LeighPeter#1521910/2/99; 14:58:06

Peter, that's brilliant!!
LafisrapIt's still a good time to buy, isn't it?#1522010/2/99; 15:01:01

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

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

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

Lafisrap

CoBra(too)@Cavan Man - Reality Check-#1522110/2/99; 15:05:44

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

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

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

Peter AsherCaven Man#1522210/2/99; 15:10:13

Thanks for the inspirational story.

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

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

koanSilver and gold#1522310/2/99; 15:11:25

I have always wondered to what extent silver may be manipulted by the users? If silver gets above $6.00 or if the comex stocks drop below 70,000,000 oz, I think anyone who may be manipulatiing it will lose control as it should directly go to $7.00. Gold is harder to figure because we don't realy know what the short positions are, or, once again, the potential demand. The world does seem to be buying big time - which was real evident when gold was around $250. Even the gold carry, foreward selling and shorts couldn't push it below that figure - too much demand at those prices. I think one of the reasons gold took off better than silver was more short covering on gold, but silver will catch up - $10 before $500. Last, silver now has the big guns in its corner, Bill Gates, Soros and Buffet - they now all have an interest in a rising silver price. The monastic trio.
koanMonastic Trio - inspired#1522410/2/99; 15:58:39

I think there was an old John Coltrane album with Miles Davis, and Theloneous Monk or a woman, called the Monastic Trio -always liked the sound of it - three inspired muscians. Schippi, I hope you are right because I havn't taken much off the table, I am pretty much long - let your long positions run. Kaplan is just so persuasive.
watchertoo much optimism/ Kaplan ???#1522510/2/99; 16:26:12

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

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

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


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

Peter AsherLeigh, Angel, Golfly#1522610/2/99; 16:28:50

Leigh -- Thank you!!

Angel, Goldfly.

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

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

Cavan Man@Peter Asher#1522710/2/99; 16:50:39

Peter, Thank you.

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

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

Cavan ManA Y2K Aside#1522810/2/99; 16:56:56

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

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

TanglewildPeter Asher#1522910/2/99; 17:14:59

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

AngelPeter Asher#1523010/2/99; 17:30:54

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

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

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

watcherpeter asher#1523110/2/99; 17:34:04

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

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

Peter AsherTanglewild#1523210/2/99; 17:35:39

It would be best to call it in when your equity exceeds the margin requirement. It's just a request to your broker to excercise you option. Your account is debited with the strike price and credited with the furture's value at the time of execution. The differential is your margin acct. value.
Cavan ManAngel 15230#1523310/2/99; 17:35:57

Angel,

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

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

goldnbonesgold hedging#1523410/2/99; 17:36:56

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

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

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

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

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

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

Cavan ManPeter Asher#1523510/2/99; 17:39:26

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

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

goldnbonesoops#1523610/2/99; 17:42:17

oops! Make that $0.98 on Sept 24
AngelCavan Man#1523710/2/99; 17:46:32

Shrewd? Yes I have been called that before. Guess it is in the genes. I am extremely proud of my heritage. Everyone tried to take a piece of the Armenians but they still kept coming back. There aren't too many of us left.
Cavan ManAngel#1523810/2/99; 18:13:32

Genes don't lie. Believe it! CM

Where is our kindred spirit FOA tonight?

Cavan Manwatcher 15225#1523910/2/99; 18:17:32

I'd can Kaplan. Wisdom and knowledge he has but, he trades his book same as the rest. I've thrown in my lot with Another/FOA/ORO et al. I have a real good feeling about those guys.
Cavan ManOOPS!#1524010/2/99; 18:22:25

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

canamamiTesting#1524110/2/99; 20:28:48

Testing.
Al FulchinoConfiscation#1524210/02/99; 21:11:51

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

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

CanuckPOG: An addendum to ORO this am.#1524310/02/99; 21:26:39

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

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

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

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

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

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

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

AELeagles vs philharmonics#1524410/02/99; 21:39:17

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

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

GoldflyMish-mash#1524510/02/99; 22:10:11

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

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

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

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

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

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

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

Regards all,

GF

SteveHDabchick#1524610/02/99; 22:11:51

www.kitco.com

good work Dabchick:

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

SteveHAEL#1524710/02/99; 22:15:06

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

Perhaps they will explain.

Peter AsherGoldfly#1524810/02/99; 22:30:34

Thankyou !

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

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

SteveHprotecting gold#1524910/02/99; 22:30:56

http://www.ccrkba.org/1999Emersoncase2amend.html

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

snippet:

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

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

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


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

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

snippet 2:

Structural Analysis

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

Third snippet:

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

Final snippet:

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

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

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

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

RossLExercising gold call options#1525010/02/99; 22:32:20

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

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

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

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

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

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

Feel free to critique this analysis or add to it.

Peter AsherRossL#1525110/02/99; 22:47:43

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

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

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

TanglewildOptions#1525210/02/99; 22:51:40

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

koanstock options can be safer than stock!#1525310/02/99; 23:19:25

As long as we are on this subject I will show you a cool trick regarding stock options: For a real example take Pan American Silver (10% just purchased by Bill Gates): All in Canadian: Stock is about $11. wts about 3.30-45 - 1 for1. with a strike price of 9 dollars (2 bucks in the money) - wts are good until feb 2001. Lets say you bought 1000 shares. It would cost you $11,000, but the wts would only cost you $3,450. If the stock goes up the wts should track the stock 1 for 1 with 3.5 leverage. But lets say the stock drops to $7. If you bought the stock you would now be $4,000 in the hole, BUT and this is a big but (pun intended) the wts would probably only drop to around 1.50 ot 1.75 because they would retain time value and leverage value. In essence a free lunch. Leverage on the upside and reduced loss on the downside. Pretty cool huh?
RossLExercising options#1525410/02/99; 23:51:39

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

RossLExercising gold call options (revised)#1525510/03/99; 00:06:08

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

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

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

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

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

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

Feel free to critique this analysis or add to it.

RossLExercising options#1525610/03/99; 00:12:05

P.S. The future you short MUST be the sane month as your call option!
elevator guyMore gold songs!#1525710/03/99; 00:42:15

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

"Sweet gold of mine"

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

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

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

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

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

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


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

Peter AsherRossL#1525810/03/99; 00:49:12

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

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

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

LeighGranny#1525910/3/99; 6:20:07

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

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

canamamiReply to SteveH _ #15429#1526010/3/99; 6:53:30

SteveH,

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

Cavan ManDavid Tice & FOA#1526110/3/99; 7:32:37

www.prudentbear.com

In Friday's commentary, Mr. Tice speaks of the growing independence of the ECB vis a vis their gold pronouncement and, the likelihood of an increase in interest rates there.
TomcatThe Y2k End Game and The Fallacy of The Last 10%.#1526210/3/99; 8:10:54

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

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

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

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

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

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

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

We are entering an era we will never forget.

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

AELthe last 10% #1526310/3/99; 9:14:36

I has been said, by those in programming, that 90% of large programming projects are 90% completed for about 90% of the time during which they exist.
AELoil, food, Y2K#1526410/3/99; 9:19:24

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

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

Date: Thu, 23 Sep 1999 11:34:09 -0400
From: Terry Cottam < This email address is being protected from spambots. You need JavaScript enabled to view it. >
Subject: Oil Disruptions May Crash Markets In January 2000

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

By Terry Cottam, Ottawa, Canada, 23 Sep 1999

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

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

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

........

mike55Tomcat & The Last 10%#1526510/3/99; 9:40:18

Tomcat,

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

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

ETTomcat, Turbo, AEL, options traders#1526610/3/99; 9:42:39

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

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

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

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

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

ET

LeighAEL#1526710/3/99; 10:02:54

Dear AEL: Would you mind either posting the whole article or printing a link for it? I'd like to read it. Thank you.
SteveHCanamami and emerson#1526810/3/99; 10:21:44

This is a July 1999 ruling and as such stands (for now). I would doubt an Appelate Court would rule against it or that the state would move it up the ladder as based on my reading, it was extremely well written with very sound logic. The state would take a chance of it holding precedence to a much wider range of cases or it possibly being picked up by the Supreme Court and I believe that they wouldn't risk that. My opinion.
AELlinux -- ET#1526910/3/99; 10:40:10

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

???

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

ETAEL#1527010/3/99; 11:19:51

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

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

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

ET

Ray PattenPossible Comex bankruptcy.#1527110/3/99; 11:30:48

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

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

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

Cavan ManTomcat, mike55, ET#1527210/3/99; 12:25:38

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

Sorry to all.....CM

ETRay#1527310/3/99; 12:37:41

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

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

- got liquidity?

ET

ETCavan Man#1527410/3/99; 12:46:32

Hey CM - offense? What offense?

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

ET

DD Tomcat -- Y2k/90% Complete#1527510/3/99; 14:01:02

Tomcat - Well said. Having consulted with a number of software/high-tech firms, projects generally are on time until 90% of the budgeted time has elapsed. Then, if the project isn't cancelled, it's rushed to "completion" in order to minimize the number of months the project will slip. All sorts of corner cutting is promoted, particularly in testing, and the product is put into production/shipped to the customer. Then, the phone starts ringing off the hook as users scream bloody murder that the stuff doesn't work. This causes huge amounts of fire fighting resources to be chaotically flung upon the mess. This is called in Y2k terms, "Fix on Failure". Good luck with this strategy in a globally interconnected system of systems that nobody understands or could ever hope to. I think there's two questions we should be asking ourselves -- in this order. Prepared for Y2k? Got gold, too? Best, DD
LeighForum Songwriters#1527610/3/99; 14:30:45

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

GOLDBUGS' GLOAT TO OUR STOCKHOLDING FRIENDS

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

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

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

Peter AsherLeigh and All #1527710/3/99; 14:53:41

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

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

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

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

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

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

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

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

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

Chorus ---

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

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

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

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

Chicken manRay - Beware of the rumor tumor...!#1527810/3/99; 15:15:14

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

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

Peter AsherChickenMan, Ray et al#1527910/3/99; 15:31:42

Chicken Man

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

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

AngelLeigh, Peter#1528010/3/99; 15:38:16

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

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

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

AREMTo ET (10/3/99; 9:42:39MDT - Msg ID:15266) and other friends of Liberty#1528110/3/99; 15:50:52

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

You said:

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

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


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

[Page: H2862]

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

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

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

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

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

AREM

Chicken manPeter Asher - Yep...!#1528210/3/99; 16:22:38

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

TomcatTurbo, Mike55, ET, DD, Peter A, Chicken man, AREM, MK#1528310/3/99; 16:37:21

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

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

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

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

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

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

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

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

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

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

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

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

schippiIt doesn't get much better then this!#1528410/3/99; 17:00:27

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

Gandalf the WhiteHey GOLDFLY !#1528510/3/99; 17:14:30

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

TomcatTed Butler on Silver#1528610/3/99; 17:28:49

http://www.gold-eagle.com/research/butlerndx.html

My positive position on silver has been, over time, highly influenced by Ted Butler, the author of the above linked article.

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

CanuckTomcat, Mike55, AEL, DD#1528710/3/99; 17:34:36

Y2K........ 10% left.

Glad you guys responded to my message last night.

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

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

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

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

turbohawgET#1528810/3/99; 17:37:32

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

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

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

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

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

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

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

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

AELCottam on Y2K#1528910/3/99; 17:44:38

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

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


Date: Thu, 23 Sep 1999 11:34:09 -0400
From: Terry Cottam < This email address is being protected from spambots. You need JavaScript enabled to view it. >
Subject: Oil Disruptions May Crash Markets In January 2000

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

By Terry Cottam, Ottawa, Canada, 23 Sep 1999

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

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

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

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

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

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

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

MARKETS COULD CRASH

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

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

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

LONG-TERM FOOD SHORTAGES LIKELY

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

THE "LUCY FACTOR"

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

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

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

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

AUTHORITIES FIGHT EFFORTS TO PREPARE

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

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

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

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

WHAT'S NEXT?

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

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

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

-------

Terry Cottam can be emailed at This email address is being protected from spambots. You need JavaScript enabled to view it. , or tel. (613) 236-6433 (your
feedback is much appreciated). He has researched the Year 2000 computer problem for 15
months, informing local residents with support from the Ontario Public Interest
Research Groups at Carleton University and the University of Ottawa (OPIRG-Carleton,
OPIRG-Ottawa). He co-founded the Y2K Centretown Preparedness Group in November 1998.
It went region-wide in February 1999, then dissolved in July 1999.

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

Endnotes:

1 International Energy Agency, "Update on the IEA's Y2K Activities," July 1999
http://www.iea.org/ieay2k/homepage.htm

2 International Energy Agency, "IEA Working Paper: The Year 2000 Problem and the Oil
Industry, Preliminary Findings," Mar 1999 http://www.iea.org/ieay2k/html/Prefind.htm

3 Gold-Eagle - The Internet's Premier Financial Magazine, Oil and Natural Gas: Are
They the Real Problems in Y2K? - Jun 21, 1999
http://www.gold-eagle.com/editorials_99/rc062199.html

4 Canadian Association of Petroleum Producers (CAPP), Canadian Gas Association (CGA),
Press Release: "Year 2000 Readiness; A Status Review of Canadian crude oil and natural
gas producers plus related natural gas transmission and distribution systems." May
1999 http://www.cga.ca/PressRelease/cgacapp.htm

5 John McCarthy, Business Leader, Operations, National Energy Board, (403) 299-2766,
This email address is being protected from spambots. You need JavaScript enabled to view it. . Emailed response, 21 Sep 1999

6 American Petroleum Institute, "Y2K Questions and Answers for Consumers," August 16
1999, http://www.api.org/ecit/y2k/faqs/consumer.html#available

7 American Petroleum Institute, "Imports Will Flow to the U.S. During Year 2000
Conversion," 06/28/1999 http://www.api.org/ecit/y2k/whitepapers/imports.html

8 Lou Marcoccio, Research Director, Gartner Group, cited in "Y2K could affect flow of
U.S. oil imports," Kate Snow, CNN, March 21, 1999.
http://www.cnn.com/TECH/computing/9903/21/bigpicture.y2k.hln/

9 American Petroleum Institute, "Y2K Questions and Answers for Consumers," August 16,
1999, http://www.api.org/ecit/y2k/faqs/consumer.html#ration

10 World Bank, "Global Commodity Markets, Summary," July 1999
http://www.worldbank.org/prospects/gcmonline/summary.pdf See also "Special Feature,
Anticipating Y2K," July 1999
http://www.worldbank.org/prospects/gcmonline/y2kfeature.pdf

11 American Petroleum Institute, "Imports Will Flow to the U.S. During Year 2000
Conversion," 06/28/1999 http://www.api.org/ecit/y2k/whitepapers/imports.html

12 U.S. General Accounting Office, "Year 2000 Computing Crisis: Readiness of the Oil
and Gas Industries," May 19, 1999, pp 3-4
http://www.gao.gov/monthly.list/may99/may9913.htm#4

13 E. L. Core, "IEA, USS, GAO, DJN, NYT: Fear-Mongering, Panic-Baiting Y2K Money
Grubbers?" June 2, 1999, http://www.wbn.com/y2ktimebomb/Media/lcore9922.htm

14 Mark Germine, M.D. (publishes e-journal Dynamical Psychiatry) "Y2K Crash: Why this?
Why Now?" On the website "Book of Eli" (an anonymous author),
http://www.bookofeli.com/photo.htm

15 Bernard Lietaer, "Beyond Greed and Scarcity," Interview by Sarah van Gelder,
Editor, Yes! A Journal of Positive Futures, Spring 1997
http://www.futurenet.org/2Money/Lietaer.html

16 Roberto Verzola, "Y2K: The Homestretch,"
http://www.inode.org/y2k-news-archive/msg00031.html

17 Dr. Edward Yardeni, Chief Economist & Managing Director, Deutsche Bank Securities,
one of eleven unanswered questions on Y2K and the Food Supply in his "Statement to the
U.S. Senate Committee On Agriculture, Nutrition, and Forestry, Hearing on the Year
2000 Problem and Agriculture," July 22, 1998
http://www.senate.gov/~agriculture/yardeni.htm

18 U.N. Food and Agriculture Organization (FAO), "The Millennium Bug threatens food
supply systems - developing countries are also vulnerable, FAO warns," 19 April 1999
http://www.fao.org/news/1999/990302-e.htm

19 Donella H. Meadows, adjunct professor, environmental studies, Dartmouth College,
Nova Scotia, "Y2K and the Average Bite of Food," 2 July 1998, The Global Citizen,
http://iisd1.iisd.ca/pcdf/meadows/y2k.htm

20 Jim Lord, "The Real Y2K Problem," April 12, 1999,
http://www.wbn.com/y2ktimebomb/Tip/Lord/lord9915.htm

21 Robert Sam Anson, "The Y2K Nightmare," January 1999, Vanity Fair,
http://www.bookofeli.com/Y2Kstockmarket.htm

22 "NGOs Mobilise Against WTO," BRIDGES Weekly Trade News Digest, Vol.3, Number 37, 20
Sep 1999, http://www.ictsd.org/html/newsdigest.htm or
http://www.flora.org/flora.mai-not/13875

23 Paloma O'Riley, "Individual Preparation for Y2K," 2 Feb 1999. Cassandra Project,
http://cassandraproject.org/indprep.html

24 Paloma O'Riley, "Individual Preparation for Y2K," XI. A. "Your Neighborhood"

25 Y2K Grassroots Community Preparedness Survey, 20 May 1999,
http://www.nhne.com/y2kgrassrootssurvey/index.html

26 Utne Reader Citizens Action Guide, http://www.utne.com/aY2K.tmpl

27a Christina Spencer, Editorial Pages Editor, Ottawa Citizen, review of Utne Reader
Y2K Citizens Action Guide, 1999/01/04
http://www.ottawacitizen.com/columnists/spencer/990104/jan4.html

27b James Poniewozik, Salon online magazine, "the world is ending -- LET'S GET TO KNOW
OUR NEIGHBORS!" 1999/01/05, http://www.salon.com/media/poni/1999/01/05poni2.html

28 "APOCALYPSE (maybe): What if someone called a calamity and nobody came?" Ottawa
Citizen, 1999.05.30, The Citizen's Weekly, C5
http://www.inode.org/y2k-news-archive/msg00021.html

29 Corporate Research Group Ltd., "PERCEPTIONS 2000 - #2, JULY 1999; Awareness of Year
2000 computer problem," survey of 407 adults in the Ottawa-Hull area, week of July
26th, 1999, http://www.inode.org/y2k-news-archive/msg00032.html

30 "Letter to [CBS] 60 Minutes from the Food Industry," posted on the Web by the U.S.
Department of Agriculture, June 1999 http://www.usda.gov/aphis/FSWG/60minutesltr.html

31 Cassandra Project, "Year 2000 Frequently Asked Questions (FAQ),"
http://cassandraproject.org/y2kfaq.html

mike55Cavan Man, Tomcat, Canuck#1529010/3/99; 17:54:53

Cavan Man -- What offense? Certainly none taken. I apologize if my post was construed by you to be directed at anyone on this site. My comment of "naysayers" was related to co-workers, a lot of the general populace, and unfortunately, even some of my family members. Since the fact is that "no one knows for sure" what may happen, being prepared with the basics, including gold, seems to make sense to me.

Tomcat -- Thanks. We're on the same page.

Canuck -- Choose the industry: oil, food, finance, medical, raw materials/finished goods....let's hope for the best. If it's non-eventful and there's certain goods I have in surplus, I'll use what I can and donate the rest to elderly neighbors, shelters, and soup kitchens that are always in need.

Gotta' go -- three sons in need of the computer for homework. Thanks all!

CanuckET 15266#1529110/3/99; 18:00:44

'In my opinion the greatest risk today is not the trade itself but the clearing of the trade. Remember, your profit is only someone elses loss if he has the money or can borrow it from someone else.'
--------------------------------------------------------

This is the tail end of ET's message, please review and contemplate the A/FOA messages of 12 months prior. Review the past 2 days posts in reference to 'option' problems.

IMHO, this is not the time to hedge, speculate, bet on 'futures', buy an 'option', liquidity is the key, you must have physical in hand, physical in hand dictates your position, you control the price. Be careful, be confident,
hold it in your hand, the price IS going up, do you want to be in a position of buying or selling?

LeighAEL#1529210/3/99; 18:02:57

Dear AEL: Thank you for posting your friend's report. I was wondering what he would say about why authorities are discouraging people from preparing. That's something I CANNOT understand. Unless there is some diabolical plan to make everyone subservient to the government for food and power, it would be in their best interest to make sure people are well-fed and comfortable.

The other day I went to the base housing office to ask about their Y2K preparedness. I wasn't confrontational; I was earnestly trying to find out what preparations they have made so I could fill in the gaps. The head of the office smilingly assured me that the power companies in the Northeast WOULD NOT FAIL because they run on older operating systems. Western systems, which are newer, might have trouble for a few days. Therefore, he said, they have made NO plans at all because nothing will happen. As we were saying goodbye, he told the clerk to make sure she got my name. WHY? Will my house be raided first by the military police? I lie awake at night in fear of having my house searched and supplies taken.

You know, if things like food confiscation and so on do happen, people are going to be horrified. Bill Clinton will make himself the most hated person in America, and he will risk assassination. I honestly can't imagine what is going through the minds of these policymakers.

Did anyone see the message last night on Gold Eagle about the man who was told by a bank teller that in two weeks they would stop giving out cash?

elevator guyAEL and ET#1529310/3/99; 18:14:24

Just to let you know, I use Explorer, on a T1 connection, and USA GOLD Forum just appears instantaneously.
So I don't think its the browser that is the biggest issue, although I'm sure there are subtle differences between some of the browsers on the market.

CanuckTo Tomcat#1529410/3/99; 18:15:57

Just wanted to mention that your messages in the last week to 10 days have been extremely informative.

A couple weeks ago I was not following you at all.

Thanks.

CanuckSydney just opened#1529510/3/99; 18:19:20

Spot:

$404/oz.

RossLSydney just opened#1529610/3/99; 18:23:33

$307.40 in US dollars
Chris PowellKarachi exchange suspension was caused by default#1529710/3/99; 18:28:43

http://www.egroups.com/group/gata/226.html?

Latest from GATA.
elevator guySpot $404?#1529810/3/99; 18:37:46

Canuck, can you tell me where you are getting this info? I've been using quote.com/livechartscom/, and they show something like $306 right now, and the exchange has the letter code "g". What exchange is that? I think the New York market letter code is "w". (That refers to the COMEX, right? And of course its closed right now)

And what is the letter code for Sydney?

Some help, please?

Cavan Manmike55, Canuck, ET#1529910/3/99; 18:40:07

Can you suggest a foodstuffs list or other essential items IYHO? Thanks.
Cavan ManAU#1530010/3/99; 18:42:15

Kitco shows $308.3. Market is just opening up.
LeighFort Knox#1530110/3/99; 18:42:20

Would someone mind straightening me out in reference to something in Chris Powell's story? I thought the gold in Fort Knox was never to be touched, at all. How can Goldman Sachs or any other firm even think of getting their paws on it? The gold belongs to the U.S. citizens; doesn't Congress have to give permission for it to be sold? Was that a joke in the story?
Al FulchinoSteve H#1530210/3/99; 18:54:44

Thanks for the post regarding confiscation. I am in total agreement with Justice Scalia. I had a thought earlier, that more than concerns me. I fear that I have lived during the generation that watched its freedom and country get lost in its comfort.
SteveHDec. Gold up 3.00#1530310/3/99; 19:01:53

at $308.30.

Thanks Al.

AELCavan Man -- list of supplies#1530410/3/99; 19:08:40

http://www.provide.net/~aelewis/gold/y2kstock.htm

try the above link
Cavan ManAL#1530510/3/99; 19:12:12

You're not alone (ranger). It breaks my heart more than I can tell.
Cavan ManAEL#1530610/3/99; 19:16:38

RE: Air Filtration

I am looking for the type of "gas masks" I have seen used in Israel. Anyone know where these can be bought? Thanks..CM

Clint HA bigger puzzle?#1530710/3/99; 19:29:59

In our euphoria of watching the gold market breakout, we may not have noticed the largest asset transfer in US history. This transfer is being foisted upon the American people by the Federal Reserve Bank.

What is the pattern for disposal of fiat currency during times of hyperinflation? Spend the currency as fast as possible on any asset at almost any price in order to get from paper to things of value.

The Fed has announced that they will accept any collateral in exchange for FRNs sent to the banks as "liquidity injections." Pine trees and ink in exchange for assets of value. If the subject bank thought it worthy collateral for a loan, it must have some value.

Most people have accepted the action of the Federal Reserve Bank as necessary to keep local banks liquid. It will keep the local bank liquid but at the expense of transferring the title to all local assets to the Federal Reserve.

Picture a local bank in Anywhere USA. It is run by Mr. Joe Banker and was run by his father before him. Local Bank has been the lender for our area for two generations. They hold mortgages on farms, ranches, homes, commercial property, tractors, earth moving equipment, cars, motorcycles etc. Any of this has value but is also the infrastructure for the local economy.

Who is the largest employer in your area? Has Joe Banker loaned them money? If he has, then there is a mortgage.

Local Bank run by Joe Banker has only 2% reserves but not to worry. The Fed will ship him all the pine trees and ink he needs to stay liquid. The Fed will accept any collateral the bank has for the paper exchange (FRNs.)

Joe Banker draws down 100% liquidity to return all deposits to his customers. Joe Banker surrenders all the collateral to the Fed because he is sure all his customers will be redeposit the withdrawn cash and he can redeem the collateral from the Fed. No one gets hurt or so we are led to believe. The money is not redeposited. Joe Banker has paid all his depositors and has retained his good name but Local Bank has no deposits and no collateral to bring in income. Local Bank is now out of business with "no one getting hurt." Joe Banker came thru for them.

What about all the local assets? They are now held as collateral by the Federal Reserve Bank. If the payments are made on time the assets remain in the local economy. If not, foreclosure.

Will 90% of the assets in the US revert to the Federal Reserve in the coming crises? Pine trees and ink (FRNs) was all it took to transfer the wealth of a nation to these bankers for one last fleecing.

What do they do with the assets? The real estate will be sold into the market after a new monetary system has been established. This will be a 10 - 20 year process.

How about equipment, factories, cars, boats, motorcycles, tractor, earth moving equipment, etc?
Much of this will be put on ships and sold in world markets for EUROs. What a way to change worthless FRNs into EUROs. Is this possible? If a Harley Davidson motorcycle will sell for $50 thousand US now in Europe, will it bring $20 thousand EUROs under fire sale conditions? All it cost the Fed was pine trees and ink.

Is the local steel mill needed in the US during a severe depression? No problem. Lay off the 700 employees, ship the equipment to (?) in exchange for EUROs and use it to manufacture steel that the US can purchase at a later date. There is a world market for all the inventory also.

Garment and shoe factories have already left the country. Anyone can list many products that our parents helped to manufacture that are now imported. Much of the equipment to make the imports is the same equipment our parents labored over to make the very same product and at the same time a living for their families.

How about the excavation and road building company near you? What would their dozers, scrapers, maintainers, etc. bring in EUROs if the used equipment was loaded onto a ship and exported? All it will cost the Fed is pine trees and ink. They will pay labor to load the ships in the same FRN currency, pine trees and ink.

Does the forgiving of poor nations debt have anything to do with this picture? Is it part of the fleecing of America? Yes, These "POOR" nations will now be free to purchase vital equipment (to our nation) exported from the US. They can then use our previous industries to export products to the US of A as our economy recovers. Since we have no equipment, factories or industrial facilities we are at their mercy. It will be a long, painful and expensive experience.

Will the Federal Reserve Bank care if their money making charter is revoked? If it is, they still walk away with most of the assets that were formerly our national wealth.

Summary:

- The Federal Reserve Bank exchanges FRNs for title to any and all assets as banks are forced to ask for printed notes to stay liquid.

- The Fed will then acquire clear title to most of the assets in the US as defaults occur. This includes real estate, factories, vehicles, boats, motorcycles and any thing else that is valuable enough to carry a mortgage.

- The Fed can then export factories, equipment, cars, boats, etc. to other countries in exchange for EUROs. This could also be in partnership with the Fed in overseas plants.

- It will be many years before the US can recover any manufacturing capability especially if the remaining industrial equipment is exported.

- All central banks, including the Federal Reserve Bank need the debt forgiveness for "poor" countries that is now talked about. This would allow a clean slate for establishment of exported industry and equipment in foreign countries. All this will be done in EUROs or any currency except FRNs. What a way for bankers to transfer from the $US to safer currencies.

It appears that in less than one hundred years, the Federal Reserve bankers have managed to fleece the American people of our entire national wealth. We are now a third rate country with the best military in the world. However this is only for a short time because we are broke.

If this happened to the US, will it be the same in all countries? Are all central bankers playing thi

Clint HA bigger puzzle?#1530810/3/99; 19:36:58

Sorry. This is the last part of the previous post that did not post.

If this happened to the US, will it be the same in all countries? Are all central bankers playing this game? Will they also demand collateral that will eventually give them tittle to most assets in foreign countries?

While all the attention is on the stock market and gold, the Fed is moving all the wealth of our nation out the back door.

I know this is fiction. I made it up. Could it be true? Is there any discussion? If not, I will drop the subject but I am afraid for the US of A.

I have gold. Will I be able to buy a shoe factory with it? All my shoes are foreign made at this time. What the US of A sells is information. I can't wear or eat information and I need a tractor to plow my farm.

Got gold?

AELauthorities#1530910/3/99; 19:38:51

"why authorities are discouraging people from preparing..."

Not discouraging really, Leigh, just profoundly unenthusiastic and dismissive about the whole thing. And to the extent that there is awareness, the orientation is to stress the "3 day storm" scenario so as to prevent panic -- which is a real risk, vis a vis the banking system, etc. 'Course, far as I'm concerned, the banking system *ought* to be brought down... by a dynamic and engaged citizenry, demanding an end to the fraud of fractional reserve banking, the federal reserve system, debt money, etc. But more likely would be the banking system brought down by paniced and disengaged individuals, all seeking to get their own dough out and to hell with the consequences to anyone else. Quite understandable, and I don't blame anyone, but it would be nice to think that we could figure an equitable and fair way out of such a mess, as a society. Impossible as long as there are no leaders of integrity and moral sensibility -- as there are not. (Geez, how did I get off onto that rant?)

Anyhoo, the authorities (naturally) want everyone to think that everything will be A-OK in order to avert panic, which would result in mass bank withdrawals, mutual fund redemptions, etc., etc., (mass movement out of paper and intangibles) which could/would in turn precipitate a stock market collapse, mass insolvencies, etc., etc., you fill in the blanks. The whole financial casino/"system" could possibly blow up before the rollover, which would make the actual computer-related problems much worse. This has always been my second-biggest fear, after national electrical grid shutdown of any significant duration (which now -- happily -- looks pretty unlikely).

SteveHAll#1531010/3/99; 19:48:32

Upper 60-minute bollinger for Dec. gold is $310. She is at $308.80 now. Should it hit $312 then I believe it will track up to (possibly) $320 tonight or tomorrow.
Cavan ManSteveH#1531110/3/99; 19:51:06

Steve,

What the heck is an upper 60 minute bollinger?

AELCavan Man: gas masks#1531210/3/99; 19:51:11

I picked up one of those Israeli masks at a gun show for about 12 bucks; extra filter cannisters for about 5 bucks. I've seen them in army surplus stores at higher prices. Not a bad idea to have some things like this around. I've also got some very fine-pore masks used by painters and asbestos workers. I hope to God(dess) that I'll never need stuff like that.
Cavan ManSPOG#1531310/3/99; 19:53:04

Now, $309.50.
LeighCavan Man, AEL, Clint H#1531410/3/99; 19:56:02

Cavan: I have seen these advertised at www.watertanks.com. Unfortunately, that site is down tonight. I have purchased 55-gallon water drums from this company, and they delivered them quickly.

AEL: Thank you. Can you believe all this is going to happen in less than three months? I started preparing in earnest last December, and it seems like no time at all. And the whole subject is still a mystery.

Clint H: Did you really write that? It sounds plausible to me. Another excellent reason to have gold!

CanuckElevator, Cavan, Mike, and boys#1531510/3/99; 19:56:26

Pulling your leg with the $404/oz. I'm sorry, the week-end is over, Sydney is open, no more kidding around.

Let's have a good week!! (Hopefully $404 at the end of the week)

Cavan ManTomcat 15286#1531610/3/99; 20:00:03

What do you advise regards holding silver? Thanks.
TomcatClint H#1531710/3/99; 20:01:04

Man, you can really communicate. Call it fiction if you will but that piece you just wrote really hits home.
Cavan ManLeigh#1531810/3/99; 20:02:52

Thanks. We live in an area that has a fault that when last moved, reversed the course of Big Muddy. With all the quake action, we're just waiting here.
SteveHCavan Man#1531910/3/99; 20:04:30

CM,

Where you getting your prices (real time)?

SteveH

LeighCavan Man, Goldspoon#1532010/3/99; 20:07:50

Dear Cavan Man: My father-in-law, who is 79, remembers his great-aunt telling about that earthquake (she lived through it). If I can get him to tell me the story again, I'll write it up for you.

Where is Goldspoon? He must be out riding his Horse with No Name. They're far in the lead this evening!

Cavan ManClintH#1532110/3/99; 20:11:43

After the city of Rome was sacked and surrendered for the last time about 432 AD, the western world entered the dark and then the middle ages culminating in the renaissance and next, the reformation.

What does it profit the world to devastate the US economy so as you describe? It doesn't. Perhaps I misunderstand. You use great deductive reasoning and good logic but methinks your theory is implausible.

TomcatLiegh, Canuck, Cavan Man#1532210/3/99; 20:12:00

Leigh: Peter Asher wanted to me to tell you that his lines are down and he couldn't continuew communicating.

Canuck: Thanks for the nice compliment. It is a great group we have here.

Cavan Man: I expect silver to take some heat as gold is sorted out. I then expect it to go above $8 (fairly soon). I holding for the long run. All physical. No paper.

The ScotCavan Man Gas Masks#1532310/3/99; 20:12:37

CM, I live in Texas and you can usually find them at the Gun Shows, I don't remember where you live but that would be my suggestion. Sincerely, The Scot
Cavan ManClintH#1532410/3/99; 20:14:30

Pardon. I meant to tie both paragraphs together with the statement, "Why send the US back to the Middle Ages"?
Cavan ManTomcat#1532510/3/99; 20:17:50

What do you buy?
Cavan ManSteveH#1532610/3/99; 20:19:21

http://www.kitco.com/gold.live.html

Steve,

I use the above. It now shows $309

Cavan Mannouveau riche#1532710/3/99; 20:26:34

"System" crashes and gold owners provide investment capital pool(s). Sound like a headline?

Why wouldn't big bro allow the physical holders to rise? After all, the important people will more than likely be taken care of anyway yes?

Gandalf the WhiteSteveH#1532810/3/99; 20:28:01

Quote.com shows Dec Gold (GC9Z) at 308.6 with a 30 min lag and FOREX.com shows SPOT the Dog at $307.20 at 7:26 PDT.
<;-)

mike55Cavan Man, AEL, Leigh#1532910/3/99; 20:34:13

http://www.usplastic.com

Cavan Man -- The link from AEL is the best overall checklist I have found in the last year. While some may consider it a little over the edge, depending on your perspective, it does hit all the areas and causes you to think of basics you may not have considered.

AEL -- Your 15309 post is what I've discussed before. The government is walking the fine line between adequate and timely disclosure versus "everything's fine". If the potential extent of problems were disclosed, people may just pay attention and cause "panic" that would bring the fractional reserve system and the equities markets to their knees. They've missed the boat on spreading the word over an extended period of time that would allow orderly transition of investments and supply preparedness.

Leigh -- I've dealt with United States Plastic Corp. in Ohio earlier this year and have been very satisfied with their products, prices, and delivery. Try the link I posted (hope it works or I'll have to get one of my kids to show me how to do it). :-)

LeighCavan Man#1533010/3/99; 20:35:51

FOA said last Sunday that gold owners would be sought after and encouraged to spend their gold to get the economy going again. Another said the same thing in his "Thoughts!" Remember, he said holding gold would be smiled upon and holding Euros would be frowned at.

Though FOA did imply we'd be taxed in a big way. I've been thinking about taxation lately, because I have heard the IRS is having Y2K problems. Does anyone think this will usher in a national sales tax instead of an income tax? It would make record-keeping a lot easier for the IRS.

Clint HCavan Man, Leigh, Tomcat #1533110/3/99; 21:00:00

Cavan Man, You wrote,
<<<What does it profit the world to devastate the US economy so as you
describe? It doesn't. Perhaps I misunderstand. You use great deductive
reasoning and good logic but methinks your theory is implausible.>>>
I don't know. It's just scares me that this could happen and no one is preparing for it. I hope I'm wrong and you are right.

Leigh
<<<Clint H: Did you really write that? It sounds plausible to me. Another
excellent reason to have gold.>>>
Thanks. It's just a thought. We need to kick it around. If I'm right how do we prepare or prevent some of it from happening?

Tomcat, you wrote
<<Call it fiction if you will but that
piece you just wrote really hits home.>>

Thanks for the comeback. It scares me. If I'm right the recovery time for America will be much longer than the "30s." We are not self-sufficient any more.

THX-1138Gold coins, and other thoughts#1533210/3/99; 21:09:48

Well I went and bought two more coins Saturday. The regular coin dealer wasn't there and won't be in until Tuesday. (Death in family or something...can't remember exactly). Because that person also is the stores coin buyer, (others just run the counter) they couldn't tell me much about Canadian Mounties or their prices. All they could quote was US Eagles ($330), Maple Leafs ($330), Krugerands ($326). I decided to purchase the Maple Leafs. The shop worker said they should be in by next Saturday.


Regarding sending US into Dark Ages:
If you were a foreign country hostile to the USA, what would you do to attack it?
The easiest way I thought of was to cause social unrest and internal strife.
The best way was to Crash the Stock Market and wipe out the "savings" of over 50% of the US population.
Hey, if one wacked out day trader in Atlanta went on a shooting spree from losing $500k, what would happen if more that 30 million lost their life savings? Think about it.
A foreign country wouldn't even have to set foot in the US and it would be hard to trace who caused the crash.

mike55Eagles vs. Phillies#1533310/3/99; 21:11:08

Since I can only get here on a catch-as-catch-can basis, I ask forgiveness if this has been adressed before. I seem to remember a question (discussion?) on US Eagles versus Austrian Philharmonics. The face value of 2000 Schillings at the current exchange rate is about $156 compared to an Eagle at $50. Perhaps face value is a moot point depending on currency fluctuations or devaluations that are difficult to predict. What are the pros/cons of the Eagle versus Philharmonic relative to taxation, reporting requirements on purchase/sale, etc? I'm clear on the pre-'33 coins, but am thinking I may want to shift my modern bullion mix one way or the other. Comments or suggestions, anyone? Thanks in advance.
goldnboneschinese silver#1533410/3/99; 21:11:50

http://www.reuters.com/news/

I hope that link works. It doesn't look very specific. This article talks about China partially deregulating its silver market, with gold to follow.
LeighClint H#1533510/3/99; 21:13:42

Dear Clint: I feel, from reading Christian prophecy books about the "last days," that I know the end of the story (i.e., the "beast" who controls all commerce, mandatory biochips, major food shortages, horrifying devastation all over the world). What I don't know is how far we are from those last days, and just how the story will play out until we get there.

What I REALLY believe is that there are powerful forces in the world which want to see humankind subservient to an elitist ruling class. I believe they've been plotting and working toward this for many years now and Y2K will be the catalyst that sparks it off. How we'll fare as gold owners, I don't know. I do think we're in the best position financially we can be in. But the rules could change on us.

ETTurbomeister, Al, Canuck, CM#1533610/3/99; 21:17:41

Hey guys - I wish I had more time, I'm off to Michigan early tomorrow so I'm getting ready tonight. Thanks for the kind words Turbo, I'll leave you with a passage this evening from F A Hayek, as it seems appropriate for Mr. Al. I'm making some good progress on this Linux deal but the main reason I'm doing it is so I have some other skills to fall back on come the new year. I'm trying to relearn some C++ I used to know and pick up Perl and Java. These PC's will still be around and maybe even relied on further in the future than now. It can't hurt.

Canuck - I'm sure the options traders at least see the other side of the story now. As they always tell you when you first start out, only trade with money you can afford to lose. They never tell you that you can think you won but still lose anyway! I agree, the first priority is hard assets in your pocket.

CM - I hope AEL's list helps you out. I don't have anything to add except that finishing up your preps while the dollar still buys a lot is crucial. We seem to be fighting two different deadlines here.

Here's the Hayek from 'The Road to Serfdom', 1944;

"If we are to build a better world, we must have the courage to make a new start - even if that means some reculer pour mieux sauter. It is not those who believe in inevitable tendencies who show this courage, not those who preach a 'New Order' which is no more than a projection of the tendencies of the last forty years, and who can think of nothing better than to imitate Hitler. It is, indeed, those who cry loudest for the New Order who are most completely under the sway of the ideas which have created this war and most of the evils from which we suffer. The young are right if they have little confidence in the ideas which rule most of their elders. But they are mistaken or misled when they believe that these are still the liberal ideas of the nineteenth century, which, in fact, the younger generation hardly knows. Though we neither can wish nor possess the power to go back to the reality of the nineteenth century, we have the opportunity to realize its ideals - and they were not mean. We have little right to feel in this respect superior to our grandfathers; and we should never forget that it is we, the twentieth century, and not they, who have made a mess of things. If they had not yet fully learned what was necessary to create the world they wanted, the experience we have since gained ought to have equipped us better for the task. If in the first attempt to create a world of free men we have failed, we must try again. The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century."

-- end Hayek.

It's a good read. I highly recommend it. Talk to you guys later this week.

ET

goldnboneschinese silver#1533710/3/99; 21:21:25

http://www.reuters.com/news/

nope, the link takes you to the Reuters headline page. However if you change the business news window from "top stories" to "commodities/energy" and hit the refresh button, the headline linking the article will become available.

I hope that works for anyone foolish enough to try to follow my directions.

ETOne more thing - I love a good rumor!#1533810/3/99; 21:43:10

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Vqz

IMF Declines Comment on Report Camdessus to Resign as Managing Director By Heidi
Przybyla

IMF Spokesman Declines Comment on Report Camdessus to Resign

Washington, Oct. 2 (Bloomberg) -- An International Monetary Fund spokesman declined
comment on reports that Michel Camdessus plans to resign as IMF managing director.
``I'm not commenting one way or the other because I don't know,'' said Graham Newman,
IMF chief press officer. Newman was responding to a report today in the Independent
newspaper in London that Camdessus will quit the IMF's top job by Christmas.

The Independent cited unnamed Washington sources as saying that Camdessus met with
senior officials last week to tell them of his intention to resign.

Talk that Camdessus might resign circulated in Washington this week, where IMF
officials were meeting. Camdessus gave the reports short shrift when asked about them
at a press conference Thursday. ``I hear that (an IMF spokesman) keeps repeating that I
enjoy my job,'' said Camdessus. ``I must confirm it.''

Francisco Baker, another IMF spokesman, said Camdessus has previously denied plans
to step down. ``He has already denied this several times,'' he said.

Baker suggested nothing has changed since Camdessus' comments Thursday. ``You think
he is going to say something Thursday and then change his mind?'' Baker said.

Camdessus, a former chairman of the European Economic Community and French
finance minister, has been in his current position since 1987.

A Bank of France spokesman said he had ``no comment on the (resignation) rumors,''
which to his knowledge ``have no basis.''

Gandalf the WhiteJump SPOT ! -- Jump!#1533910/3/99; 22:20:21

$308.40 now and getting ready for another jump !
<;-)

GFDRisks#1534010/3/99; 22:23:41

For what its worth, I would like to suggest that it is very unlikely that the den of thieves and rapists otherwise known as COMEX will ever be alowed to default. Too damaging to public confidence in the markets. Now the Fed may rightly want certain operators in COMEX to suffer a well deserved demise but will only do it in a fashion that is discrete and efficient.

The risk in this game is having too much paper and not enough physical.

onlychildClint H#1534110/3/99; 23:04:52

Great piece! I wish I had time to sit down and write an essay such as yours, but I don't. So can I borrow it? I think it may be closer to reality than we would care to know. By the way, there are two US shoe companies that I buy from: Mason Shoe and Danner. http://www.masonshoe.com/catalog.html http://www.danner.com
Chris PowellS. African mines plan fatal blow to gold leasing#1534210/3/99; 23:05:16

http://www.egroups.com/group/gata/228.html?

Big news from GATA.
Peter AsherY2K Preview #2#1534310/4/99; 0:02:14

Thanks, TomCat

Had another Y2K drill out here at the end of the world where the USA literally falls into the sea.

All four lines went dead, went next door, dead, Two miles down, dead. Next, drive 8 miles out of the forest into cell-phone reception territory, nada! North another 4 miles, phones are working, So we had half the exchange area down INCLUDING the land line that feeds the local cell tower. Always thought the cell phone was the backup system, guess not.

Called into Sprint on weekend repair, got someone hundreds of miles away, no record of trouble called in after two hours of service down. I was the first one who kept driving until they found a live line. Before I found it I was having weird thoughts like, somebody nuked Portland, maybe the gold shorts sabotaged the national phone system.

Sprint lady says "we'll put a work order in for service tomorrow." I said "WHAT? You've got half a county down!!" "Well sir, I just enter the data ---yada yada---"

Went home, went nuts, Where's gold? where's silver? What's happening on the Forum?

Drove 15 miles to the top of cascade head where I can pick up the next cell-phone zone and called TomCat and got quotes. Whew!! Phones came back on an hour ago.

Leigh, Goldfly, Angel! Maybe we can do a Y2K song to that old country-western that goes "I miss you already, and your not even gone"

AELmike55: y2k prep#1534410/4/99; 0:17:57

"The link from AEL is the best overall checklist I have found in the last year" ... thanks! there are several other very good ones, more detailed than mine. "While some may consider it a little over the edge" ... yes, well, at the time I composed it (about a year ago) I thought that a shutdown of the national (or large regional) power grid of many weeks or even months duration was possible, and in that case one almost cannot be over-prepared. I no longer think that this is a major possibility worth going far out of one's way to prepare for; though it is still possible.
Gandalf the WhiteJump SPOT ! -- Jump!#1534510/4/99; 0:22:57

Spot at 309.10 on Forex at 11:17 PDT
GC9Z sez 309 at 2:19 NY time
while the K Chart sez "oops another down spike error" corrected -- and then 307.75 at 2:20 NY time.
Jump SPOT Jump ! --- WHERE IS Spike ?
<;-)

Voyager(No Subject)#1534610/4/99; 0:39:32

Good Evening Peter. PDX is still here and in good working order (as we are now the CITY THAT WORKS instead of The City of Roses which we were for so long.) Dec. gold at 308.90 up 3.60.

Have been away from the round table from early August until last Sunday night. WOW what a time to return. Left PDX in early August on our boat for extended cruising in the San Juan Islands, Gulf Islands, and southeast Vancouver Island. Up there after awhile, it really does not matter what day it is. No TV watching, reading newspaper, or Internet. I was truly unplugged. Having Orcas swimming next to your boat is very exciting, but not nearly the elation from last Sunday night & Monday. I am glad to be back to the forum.

THX-1138 – The GPS rollover was a complete non-event for nearly all systems. I have the northeaster 951X integrated into the Robertson AP20 autopilot. A terrific combination. In an electronics store in Victoria BC talked to a very knowledgeable storeowner who advised me this was actually the second rollover. Scratch one millennium disaster.

Sir TownCrier – Have really enjoyed your reports From The Tower.

Lastly ,welcome to all the new contributors. Am amazed at the increase.

Gold now 309.

VoyagerCorrection#1534710/4/99; 0:48:25

NorthStar 951X GPS / Chart Plotter
Peter AsherClintH#1534810/4/99; 1:20:25

Well written piece. Sometimes taking something to the most extreme possibility makes it easier to comprehend and identify a smaller scale version of the event.

First of all, where would the administrative labor force to foreclose on everything come from. I once joked here, that the big career opportunity of Y2K would be "Repo-Man." Half the creditors would die of old age before they saw a dime from the auctions.

Secondly, such an event would see the "Dogs turning on their masters." Remember those "Suits" who drove out to repossess a farm in South Dakota or thereabouts, maybe 15-20 years ago. The Farmer just upped and shot them. --- Lots of Sheriffs will be needed too.

Some earlier comments on this: from 3/7/99; 20:24:33MDT - Msg ID:3074 (the Y2K contest)

>>>On the personal level, the major item at risk is homes. Most are heavily mortgaged. The most depressing part in Nick Guardio's current newsletter is his statement that most home mortgages have a clause requiring payment-in-full on demand which takes affect if the appraisal value falls below the outstanding loan balance. The specter of banker-landlords receiving their tribute from a nation of tenants is truly gruesome. However the last time there was a great depression, a far smaller amount of the population were home owners. (I believe the current figure is 66%.) Just as Florida and one other state currently allow unlimited home equity to survive bankruptcy, it's not unthinkable that in a financial meltdown there might be a moratorium on principle residence mortgages. Which is the larger voting block — the home owners of the land or the stockholders of the lending institutions? <<
And back on 1/13 and 1/14 I was having a three-way chat with AEL and Turbohawg-----

<<<Now let's have some fun and look at "a deflationary collapse will take out all debtors". Empirically correct!! But this is not the 1920s or 30s in the USA or Germany. The percentage of people owning their own home, cars and whatever, on credit, is exponentially larger than during those periods of financial disaster. Is the American public going to walk down to the nearest bridge with a sleeping bag, dropping the car keys off at the bank on the way? Even if the Govt. confiscates every gun and baseball bat in the land, it won't happen!

In a "collapse" scenario, only the providers of a debt moratorium on homes and cars will remain in office! Its the guys holding the paper that will be wiped out.<<<

UsulTankan#1534910/4/99; 1:33:11

http://biz.yahoo.com/apf/991003/japan_econ_1.html

In early reports, the Tankan was said to have "exceeded analysts' expectations."
In later reports, it was said to be "pretty much in line with our expectations"
http://biz.yahoo.com/rf/991004/bd.html
Does anyone smell a rat?

CoinGuynew to the forum...#1535010/4/99; 1:38:57

New kid on the block...been reading the forum for awhile thought I'd join the rank and file. I'm an ex-coin dealer out of Nebraska, and hold physical. Been pretty excited about the upturn in the market. I guess all I have to say, is "About Darn Time". Would like to thank MK for the great articles, he convinced me to stay in the market, I had to quit dealing, no money to be had.

Coin Guy

GoldsunTankan Rat Getting Dizzy#1535110/04/99; 03:30:24

Must be the spin.
New Tankan still negative, but not quite as negative,
so spin nurses rotate about "improvement".
Poor rat suffering alone, but soon to have company.
Goldsun

LeighRise and Shine!#1535210/04/99; 04:48:18

Gold's up $9.70 in overnight trading. What a lovely way to wake up on a Monday morning!
BonedaddyPeter Asher?#1535310/04/99; 04:50:13

I notice that you quoted information from Nick's Guarino's Wall Street Underground. This publication, although it seems a bit "hyped" at times, is fascinating to me. Many here would probably agree with Nicks assesment of the buying opportunity that exists in gold. The letter also states that oil prices will not remain strong over the long term. After reading many of your posts, I hold your thoughts in high esteem. I have grown wary (weary)of promises to deliver, and WSU always has a big one at the close. (I had the five thousand dollars once and thought about the offer, but then I found a guy to trade me gold for my paper.) Would you give an opinion as to the accuracy of this publication?
TomcatCoinGuy#1535410/04/99; 04:58:52

Welcome to the roundtable. If you have any data or opinion on what happens to the numismatic market during tough times I would like to hear what you have to say.

I used to collect coins. Not for not for profit or investment, although I did ok, but for the love of it. Unfortunately, I did not stay in the hobby long enough to build up a group of dealers that I could trust. I specialized in Silver Dollars from the late 1700s to the early 1800s. I knew that niche well, better than many dealers, and that led me to find that some could not be trusted. Actually more that just some. Too many coins were altered in the back room.

Since one of my ways to enjoy an endevour is develop the friendship and trust of those I deal with I, with some sadness, chose not to continue my love of the coin. These were pre-internet day and I have often thought of returning to this love but using the internet to develop better relationships; like on this forum.

BTW, most of the gold I hold is uncirculated pre-1900 pieces.

BonedaddyGood morning Leigh!#1535510/04/99; 04:59:09

Didn't I read that you were under the weather? Here at the Bone home, it's a sad day for all when Bonemomma is down. I hope today finds you feeling much better. Up $9.70 overnight, perhaps a toast with a GOLDEN glass of orange juice would be in order?
PH in LAFlawed thought processes over at Silicon Investor#1535610/04/99; 05:02:05

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=11435122

The gold perma-bear known as Hutch over at SI Gold Price Monitor posted comments there this morning (see link). Since I am not a registered poster there, I beg your indulgence for posting a response here. (Up early here on the west coast... couldn't sleep.)

"The central banks have also agreed not to increase their gold lending arrangements and derivative operations above current levels for the next five years... They never even suggested lowering those levels to 1998, 97, 96, 95 levels. Thus, this is a promise with no depth. If we assume that CB selling, leasing, and derivatives transaction have been at an all time high for the 1999 year, then a promise to go no higher becomes a deception. A falsehood, construction to lead the POG up based solely on ideas, and not based in fundamental or technical reasons. So the triumvir has only created a situation where the benefits of the derivatives and leasing becomes in their favor, and not the investors." HUTCH at SI Gold Price Monitor

Please, Mr. Hutch, let us ponder for a moment, your misinterpretation of the ECB's announcement.

By pledging not to increase their gold lending arrangements for the next five years above current levels, the Europeans are in effect freezing that level, allowing for no more leasing whatsoever. Lowering levels to 98, 97, 96, or 95 levels would imply cancelling leasing agreements already in place, which would be a default of sorts on already agreed-upon arrangements. However, even agreements already in place can only be sustained by rolling them over into new agreements. If this avenue is to be curtailed, the escape valve of leasing to supress the market price is effectly closed off. This is not a question of percentages. It is one of reality.

The market has made the proper interpretation of reality, as it always does. Are you smarter than the market? Those who would have us believe that eventually find themselves in trouble. It happened to Martin Armstrong... it can happen to you if you allow your investments to follow your flawed thought processes.

Beware!

SteveHSouth Africans unite...#1535710/04/99; 05:09:27

Dec. gold now...$315.00

this from kitco from GATA:

Date: Mon Oct 04 1999 01:21
Winston (Latest from GATA: SA producers to restrict gold supply.) ID#243420:
"Bill disclosed Friday that some shorts are
already defaulting. He has another big scoop
in the second weekend dispatch: South
African gold producers are about to unite to
restrict production and thereby apply the
fatal pressure to the already faltering gold-
leasing business. This will create a bit of
an OPEC for gold."
http://www.egroups.com/group/gata/228.html?

SteveHAsking $316...#1535810/04/99; 05:19:00

Dec gold. Now $315.50.
LeighBonedaddy#1535910/04/99; 05:37:03

Thanks for asking -- it's just a cold. I was sicker yesterday morning, but feel better today, thanks to heavy doses of aspirin and antihistamine. Are you on East Coast time too?
noviceBreakdown#1536010/04/99; 05:39:05

What is the meaning of "a moratorium on a mortgage"?

My brother and I discussed the issue of total market crash, if most people's mortgages became default, what would the banks do? Take the house and rent it out? Wipe out debts and give them the house (maybe if bank went under?) Very difficult subject I think, considering the mass of the problem. It would leave millions in the streets, I doubt they would let that happen.

Mr GreshamThe Squeeze!#1536110/04/99; 05:50:00

Squeeze is on!

Pretty dumb, shorting gold right before Y2k.

Spot 313.

All rise for the national anthem (South Africa's):

"Nkosi sikelel' iAfrika"

My song for the group (no translation necessary):

He-he-hahaha-hahaha-hahaha -- ahhhhhh -- WIPE OUT!

Hipplebeckgold leasing#1536210/04/99; 06:10:25

Good Morning
The world is attacking us aren't they? (USA)
Can't blame them, though
We're the imperialists.
Deep down, I believe they all would love to see the US take a dive. Those we did not defeat, we rescued, which can leave just as much of a feeling of resentment.

The ScotNovice # 15360#1536310/04/99; 06:21:05

Good morning. Your question on home repossetion is a good one and we do have a precedent as to what the government does in a case such of this. If you remember the great fall of the Savings and Loans just 15 years ago. The government forclosed on homes by the millions. Never "worked with" the home owner to help him through hard times. They foreclosed, put the owner and his family out in the street and then let the home sit empty for years before they even attempted to sell it. By then it had deterioted badly and they sold it for 50% of its earlier value.

The government is not very smart, has no compassion for it's own people but will forgive debt of other nations at the drop of a hat.

Sincerely, The Scot

noviceTHE SCOT#1536410/04/99; 06:32:12

Thanks for the reply,I would assume this is what would happen but, I would think there would be some other profitable answer to the problem than just letting the house deteriorate. But then again I agree they can be stupid.

Thanks again!

JCTexWorth repeating#1536510/04/99; 08:13:32

http://www.gold-eagle.com/editorials_99/madhok100499.html

"In the end I want to remind the readers that to defend a Long position taken at $400/oz, you need $400. While to defend a Short position at $400/oz, you need an oz of Gold."

Sunil Madhok
This email address is being protected from spambots. You need JavaScript enabled to view it.
United Arab Emirates

5 October 1999

USAGOLDToday's Gold Report......Shorts in Trouble#1536610/04/99; 08:26:34

MARKET REPORT (10/4/99): Day Six of the Big Breakout....Gold up another $9 as
we start the week as options traders scramble to cover naked call options. Call option
owners are being kept at abeyance by traders allowing only open "at market" fills -- thus
leaving the advantage to the traders scrambling for cover. But what advantage? The
market's getting away from them, and the sell bulge reflecting an extraordinarily high
volume keeps backing up. High volatility reigns. How long until that market is deemed to
be in crisis mode and trading halted? FWN reports a strong cash London market with lease
rates firming slightly. Long time gold trader Leonard Kaplan declares "It's a bull market!"
The London trade was followed by a strong open in New York with gold soaring to one
and a half year highs. "Rumours abound, even more than usual, about massive hedge fund
short positions,'' Macquarie Equities Metals Analyst Kamal Naqvi via Reuters. "There is
almost equally dramatic talk about the books held by major bullion banks and some gold
producers. Even if these rumours are only partly true, then gold prices will continue to be
volatile for weeks, if not months, to come,'' he added. Providing a real life example of
what happens when a gold market gets squeezed, a Karachi newspaper reported over the
weekend that gold trading has been suspended in the local bullion market after a major
market maker defaulted on forward delivery contracts. The newspaper reports that "In the
meantime, a massive heart attack led to the death of a senior bullion dealer who could not
sustain the shock after suffering heavy losses in forward dealing." The Karachi market is in
chaos with dealers and the public alike scrambling for a dwindling supply of gold.

That's it for now, fellow goldmeisters. Have a good day.

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
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mike55Re-Post from 10/3/99#1536710/04/99; 08:31:59

mike55 (10/3/99; 21:11:08MDT - Msg ID:15333)
Eagles vs. Phillies
Since I can only get here on a catch-as-catch-can basis, I ask forgiveness if this has been adressed before. I seem to remember a question (discussion?) on US Eagles versus Austrian Philharmonics. The face value of 2000 Schillings at the current exchange rate is about $156 compared to an Eagle at $50. Perhaps face value is a moot point depending on currency fluctuations or devaluations that are difficult to predict. What are the pros/cons of the Eagle versus Philharmonic relative to taxation, reporting
requirements on purchase/sale, etc? I'm clear on the pre-'33 coins, but am thinking I may want to shift my modern bullion mix one way or the other. Comments or suggestions, anyone? Thanks in advance.

elevator guyOptions prices relative to spot price?#1536810/04/99; 08:33:32

Hello all! And a good gold-up morning to you! Good Spot, good Spike! Nice doggies!

I have Dec calls, and Feb calls, and I noticed that this morning according to the NYMEX website, when spot was $314, my Dec 270 call options had a value of $4400 each, and Feb 270 was $4500 each.
Spot hasn't changed all that much, but when I checked back, the quoted options prices had dropped a couple of hundred dollars.
It doesn't seem reasonable that this drop is due to the spot price, since it hasn't changed all that much.
And it doesn't seem that this drop would be due to the decaying time value of the options, since they have a long way to go until expiration, and we are in a bull market.
Can anyone tell me why these quoted options prices actually went down???

CoBra(too)@Hipplebeck's -the world would like to see the US take a nose dive. #1536910/04/99; 08:47:21

Sir, being a European, I feel that would not be (political),
or otherwise correct. I, for one like the US and its people and what it stands/stood for very much and have lots of friends.
No, I think it's more the deterioration of the global hegemony of dollarization, with all its discussed excesses in the (financial/derivative) that is the cause of the present credit and asset bubble. Too many countries have been severely maimed by unscrupolous speculation and manipulation, which this system has, maybe unwittingly at first, afforded to few though major players within the same.

I think ECB's move to curb the carry trades was born from the necessity to return to sounder monetary discipline before the whole system blows up, leaving no one unscathed.

A potential meltdown of the US$ and financial markets would affect all and no one could wish for such an outcome, but we all would wish for a retreat of official interference, manipulation and potentially collusion of markets in the age of cronie casino capitalism.
Keep America great - go gold and enforce fair markets.
Best CB2

goldnbonesPlatinum rates#1537010/04/99; 09:07:30

One month lease rates for platinum at 40.4%??? Can anyone explain what is happening there and its effects?
The ScotUP & DOWN#1537110/04/99; 09:07:57

Europe did a nice job of pushing up the POG this morning. Any bets on how far the shorts will beat it back down this afternoon in New York? I'll guess $4.80. The Scot
Gandalf the WhiteKeep Jumping SPOT --- HIGHER !#1537210/04/99; 10:18:45

New high for Spot today at 316.30 at 9:15 Pacific time !!! -- XAU is going wild too. WHERE is Spike ? Limit is $75. on the COMEX -- any thoughts of when we could see a limit ?
<;-)

Gandalf the WhiteSpike just woke UP !!#1537310/04/99; 10:21:36

BLASTOFF ! ---- $317.80
<;-)

GoldflyGrrrrrrrr....GRRRRRRrrrrrrrr......GRRRRRRRRRRRR#1537410/04/99; 10:39:47

Spike! What's the matter fella?

Grrrrrrrr....

Spot! What's up boy?

(Knock knock knock)

GRRRRRRRRRrrrrrrrrRRRRRRRR

I wonder who that is? What's wrong with you guys?

Oh, it's Mr. Short.

RRRRRaaarrrrfffff. Grrrrrrrrrrrr. ROOWWWWWFFFF.

Goldfly, I'm warning you. You had better do something about those dooooooooogggggggsss!!!!

Spot! Spike! COME BACK YOU TWO! ....... Eh, well.... ok, .....never mind.

Have fun guys!


Spot 316.90

Netking@ Elevator Guy - Options#1537510/04/99; 11:29:16

Elevator Guy - Pure demand & supply, the shorts have been
covering for sure. Demand has been higher near the beginning
of the scessions of late & then drops away a little. Buyers
& sellers can quote what they want . . . pure market
economics.

apdchiefBid/Ask Spread#1537610/04/99; 11:46:32

Within the past few minutes, on a service I subscribe to, I noted that spread between bid and ask was greater than $5.
Never seen this big a spread before. Significance? Volatility indicator?

Cavan ManCoBra(too)#1537710/04/99; 11:52:18

I have been fortunate to travel internationally more so than the average person. The most profound observation I am left with after my travels is that humanity, fundamentally is pretty much the same everywhere. Too many labels and too much hubris make for bad emotions wherever one might be.

Any surprises in your elections?

Gandalf the WhiteSpread on Spot #1537810/04/99; 11:53:50

I too show a wide $5.25 difference between BID and ASK -- but notice that most all trades are on the sell side! -- This will change and the spread widen when Mr. Short gets tired of treading water and starts to sink.-- GETUM Spot!
<;-)

NetkingJune2000 Call's#1537910/04/99; 12:15:01

June 2000 Calls with strike of $400 ...now selling at $900.
Those that purchased these at $30 ... well done!

Gandalf the WhiteGETUM Spike !#1538010/04/99; 12:32:24

Spot the dog was resting for a while and now jumped to $317.90
<;-)

SteveHDec. and Feb. gold now up!#1538110/04/99; 14:38:34

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 318.5 319.5 318.5 319.5 +1.5 10/4/99 13:20 319.5 319.0
Gold(CMX) Feb 320.0 320.0 319.6 320.0b +1.5 10/4/99 13:17 320.0 319.4


Dow and Nasdaq were up, but I don't know why?

JourneymanWhy Dow & NASDAQ are up?#1538210/04/99; 15:00:24

@SteveH Dollar up, yen down, 30 yr. US bond up, G7 currency intervention to weaken yen. Regards, Journeyman
Clint HPeter Asher, onlychild, Leigh#1538310/04/99; 15:14:54

Peter Asher, You wrote,

<<<Sometimes taking something to the most extreme possibility makes it easier to comprehend and identify a smaller scale version of the event.>>>
You are a true diplomat. It was very extreme. I had read your previous comments. It was probably your thoughts that triggered my analysis. I read all your posts. they are very helpful. Thanks.

onlychild, you wrote,
<<Great piece! I wish I had time to sit down and write an essay such as
yours, but I don't. So can I borrow it?>>
You are kind to say so. Use it as you wish.

Leigh, you wrote,
<<<What I REALLY believe is that there are powerful forces in the world
which want to see humankind subservient to an elitist ruling class. I
believe they've been plotting and working toward this for many years now
and Y2K will be the catalyst that sparks it off.>>>
Good statement. We tend to forget that there people who would enslave us. Your two other points were good also. Thanks.

Peter AsherClintH -- Leigh#1538410/04/99; 15:31:05

Clint, thank you for the kind words. Your depection reminds me of this line from "Peter and the Wolf." >> "But what if a wolf DOES come out of the forest, what then?" said Grandfather.<<<

Leigh: Powerful forces in the world have wanted
to see humankind subservient to an elitist ruling class since somone invented the spear and the crown!

CanuckFOMC meeting tomorrow#1538510/04/99; 15:51:12

Any thoughts on the announcement tomorrow??

Rates up or unchanged? How will either affect the POG.

My feeling is A.G. is damned if he does, and damned if he doesn't. If he raises rates the markets will be hammered, if he does not the dollar continues slide. Not convinced how either will affect the POG.

Thoughts?

Cavan ManSir ORO#1538610/04/99; 15:56:58

Are there still bears in the woods? POG seeems to be steadily rising. What do you think? Is a pullback in the making? Many thanks.
phaedrusgold and greenspan#1538710/04/99; 15:57:40

Gold just traded at 322 on the overnight, up 4 bucks.

In regards to Greenspan, I think the market will go down whether he raises rates or not. They had their party today. He'll probably adopt a tightening bias and leave it at that... though he also knows that he's going to have to surprise this market if he wants to get any respect. I for one will have my guns ready to short the dow the split second the announcement is made if he raises.

OROCavan Man #1538810/04/99; 16:23:35

The markets are not spinning out of control so the rise in POG should be steady. Technicals are still on the strong side and disbelief is still common among economists. There is a strong chance things will hold as the price goes up and Greenspan monetizes eveything in sight. The buying power of the $ is the US' traditional choice for a default mechanism. The banking system is at risk if the $ value is maintained.
If the shorts fall apart at the $355 area, expect extrememe turmoil and the Holzman street price vs paper price to hit the ANOTHER/FOA targets before long. The $ and bonds should fall apart long before this so they are the things to watch.

CoBra(too)Gold Miners up 10% on average - do we need all else to tank?#1538910/04/99; 16:25:04

-Very rhetoric question for most of the forum - don't we still hope, against all reason, that this final battle in the fiat money system will be played out in a way not ending in global financial and economic armageddon?
We all, I do know, hope for the best outcome for all, but we do feel the major powers overplayed their hand and what may be worse are still at it exacerbating the ultimate outcome - that's the real scary thought.
@CM-Hello my friend, I've been the son of a diplomat - even if my posts don't ever suggest that-so I've been a traveller most of my live.
The outcome of our elections, though condemmned internationally, because of right wing overtaking conservatives as 2nd or 3rd runner ups to the social democrats, scaled down to 33%, worst ever, is as I see it a major change in our buerocratic concept of democracy - and even if I personally can't just now conceive the ultimate outcome, I would like to stress that the "right wing kid" Joerg Heider is not a Le Pen, but a popular demagogue, who got his votes from former and "fed up" labor. While I miss a real liberal faction, I do feel our conservative party should take a breather from coalition and rejuvenate - a la' Germany!
The mainstream press just presses on and looks at the loudest voices, claiming we've potentially elected a new Hitler-ridiculous (reminiscent of the Waldheim affair, not doing justice to us at all) people are just fed up with 50 y's of beaurocratic Austrian style of "social partnership" or better proportional representation. Give us a chance at real democracy and we'll take care of any excesses. Trust me, we've had more than learned our lesson some generations ago - now we're in the process of getting up to speed with democracy. Thank you, CM, for your concern - I'll continue as the picture becomes more clear.
As an afterthought - we're talking about a country, which has assimilated 2 million refugees since WWII - 25% of total population in 50 years and I'm kind'a proud of our success!
Best CB2 thank you - and think gold!

PH in LATwo interesting posts this afternoon at Kitco#1539010/04/99; 17:16:53

Date: Mon Oct 04 1999 18:12
JP (The rising POG is saying that a massive Dow decline is to take place between Oct 15-25.) ID#237237: Copyright © 1999 JP/Kitco Inc. All rights reserved

The financial panic is upon us. We will have US gold backed currency within the next 2 years. A massive depression will follow the Dow decline and will last for a minimum of 5 years. Forget about inflation for many years to come despite the rising CRB. Most of the rise in the CRB is attributable to the recent precious metals advance. A massive decline will start to take place in real estate prices and all commodities in general ( except for gold ) after the Dow debacle.. Next year, short as well as long term interest will collapse as the depression sets in. Gold (with temporary corrections) will continue to rise for at least 5 years.




Date: Mon Oct 04 1999 18:12
SEQUIN (Goldman 's) ID#25171:
Copyright © 1999 SEQUIN/Kitco Inc. All rights reserved
Goldman's Option trader got fired .

You guys can't even start to imagine how much blood there is.

Bullion banks are in panic mode : derivative positions too big to cover , no liquidity , fear about medium size mine defaults because of overhedging and margin calls .

Very bad words in board rooms these days.

Banks hesitate to be the one who pulls the trigger on mines since they could start a cascading default chain reaction.

UBS is dead.


Morgan is sh*tting razor blades but not dead yet .

Morgan stanley disappeared from radar screen.

They NEEEEED Gold to go down .

There is about 1 year production of buy order between 280/295. If these guys start to panic it might get interesting. But too much blood is not always the best you can hope for: Beware of CBs stepping in.

If there are small to medium mines defaulting , we could see contagion on the XAU. So I would prefer an orderly rise.

I know this is too much to ask for and I am a little bit excited. THKS

Gandalf the WhiteWOWSERS -- Look at the size of the BID side on the GC9Z !#1539110/04/99; 17:32:18

OVER 180 bids at 3:20 NY time and delayed half a hour ! -- This means that the Dec Gold price is not going to go down!!
Spot the Dog and Spike are trying to rest from the great day chasing Mr. Short, BUT looks as if there are a whole bunch of their BUDS now ready to help them. -- The golden bears have not yet started to break, but they are starting to sweat!!!
<;-)

CoBra(too)@ORO - Hello - great posts on the Kitco site#1539210/04/99; 17:34:10

Though I've never really been a trader - you're one doing you're homework - not only for trading purposes, but in the framework macro-economic, monetary, currency and maybe, most importantly - sentiment indicators. Please keep up your great work, wherever you choose to post on whatever is on your mind - Thank you - CB2
RossLWow#1539310/04/99; 17:37:51

I just saw a trade at 323 in the after-hours access market. Wouldn't it be nice if the 330 level was crossed before the open in New York on Tuesday morning??
Gandalf the WhiteSpotty is now JUMPING!#1539410/04/99; 17:40:41

321.10 in a big JUMP for Spotty, Spot's younger brother.
<;-)

Gandalf the WhiteDec Gold now at $323.50 on MRCI #1539510/04/99; 17:45:23

AND that is with a 15 minute LAG !
Get it while you can, IF you can.
My LOCAL dealer friend sez there is a $10 prem on 1 oz. Eagles over Maple Leaves now.
What is the Street price of that ugly KRand ?
<;-)

RossLGandalf#1539610/04/99; 17:52:54

KRands aren't ugly. As long as you don't look at the reverse ... <grin>
The ScotCoBra(too) #15389#1539710/04/99; 17:54:07

Your post ..."don't we still hope, against all reason, that this final battle in the fiat money system will be played out in a way not ending in global financial and economic armageddon?
We all, I do know, hope for the best outcome for all, but we do feel the major powers overplayed their hand and what may be worse are still at it exacerbating the ultimate outcome - that's the real scary thought."

CB2, I'm glad you made the statement above. All of us on this forum, in our hopes for Gold to go to the moon, know what this will actually mean for the world ecomomy.It will be a pretty ugly situation. Lets hope we can "Win" our gold battle without massive casualities. Good Post !
The Scot

Cavan ManCB2#1539810/04/99; 18:15:53

I believe it can be orderly. I refuse to believe in financial armageddon. The puppeteers know the right strings to pull and compromise they will. If the many different worst case scenarios detailed here are played out, then I say good show! Know why? Then it must be the Creator's Will and despite "the sorrows", that's a reason to rejoice
Cavan ManBuy Signal#1539910/04/99; 18:18:07

Pat Sajak (sp?) is doing his part.

Just overheard the show on the tube while washing dishes. Yes to all, I am a real renaissance man. One of the prizes offered was, "solid silver and gold bars". No kidding. CM

Cavan ManORO#1540010/04/99; 18:19:32

Thanks. Can you repost your Kitco's over yonder? (here)?
Cavan ManKRands#1540110/04/99; 18:20:11

Premiums are typically lower.
Cavan ManBeehive#1540210/04/99; 18:22:36

I was in a FED Bank this afternoon. All hands will be on deck for the "rollover". Also, there is no more window service. Too bad; here, it is such a beautiful (fiat) bank lobby. Could it be fear of the pitchforks?
Tubac's earssilver#1540310/04/99; 18:25:31

Greetings all! Can anyone fill me in on why silver has yet to blast off. I would have thought it would've been by now.
Thanx

DDCobra, The Scot#1540410/04/99; 18:27:19

Hi guys - It's true that it would be nice to see the back of this funny money system broken with few casualties. It's so nice to have our cake and eat it, too. But it's unlikely to happen that way, I believe. The current system is a win/lose system whereby the the rich get richer at the expense of the rest of the people. I believe there's a larger issue than who dies with the most toys. Is the current system exploiting the natural balance of things to the point of being unstainable? It appears that we may be blessed to break this old win at any cost paradigm, regardless of the cost. Am I willing to suffer the change now in order to provide a better world for my kids and grand kids? Yes. I am. Do I hope it won't be too bad? Yes, I do. Am I optimistic for a soft landing? No. I'm not. As human beings, passengers on space ship Earth, at some point, our integrity must become more important than power hungry egos and our pocket books. Sure, it's a pointedly idealistic belief that we might someday begin to work together. But, what the hell? We've got to believe in something. Right? Best, DD
RossLKrugerrands#1540510/04/99; 18:30:24

I checked this afternoon and KRands were $330 and US Eagles were $343. At there prices, you can buy 27 Krands cheaper than 26 Eagles.

When gold hits $10000 per ounce, you will wish you bought those ugly ol' non-politically-correct Krugerrands!

Peter AsherCaven Man, Exactly!#1540610/04/99; 18:35:44

>>>>The puppeteers know the right
strings to pull and compromise they will. <<<

Cavan ManALL#1540710/04/99; 18:43:56

"They" are going to have to deal with the new gold paradigm. They must! It will be a surer path to continued riches for the established power and money brokers to have serfdom chained to inflationary bias than to have us all eating grass. Think about it. The "rents" will be so much greater for them. World events are moving the western economies. Gold calls the tune. I believe we are witnessing history. Why not? The world makes histroy every day. If you discount the FOA/Another storyline, then you are guilty of selective perception. It can happen.
Peter AsherKoan#1540810/04/99; 18:44:21

Don't pay attention to the Kitco qoute on silver, Use The other guys!
The ScotDD Cavan Man#1540910/04/99; 18:48:26

DD, I know you are right, I was just hoping for the impossible.

Cavan Man, The Lord has us in the palm of His hand.

Sincerely, The Scot

apdchiefBid/Ask Spread#1541010/04/99; 18:49:21

I posted earlier regarding a $5.25 spread on bid/ask for spot. On the night session, the spread is now $7.80!!!! I ask again....significance?
CoinGuykitco POG overseas#1541110/04/99; 18:55:16

What's going on with Kitco, seems to have unreliable updates? Where else can I go for foreign spot. Heck, what is the spot. Here spot...

Coinguy

The ScotWhich coins?#1541210/04/99; 18:57:46

There has been much discussed the last few days about which coins to buy. I think Granny started it all. Let me put in my thoughts, if you please.
If worse comes to worse, and Gold is actually bartered on the streets, I believe the "fineness" will play a factor. The 24K coins are going to worth more than the
22k's. Right now we pay a premium for Eagles even though they only have 22k content. I think it is a waste to by anything but 24k. Anyone agree?

Gandalf the Whiteadpchief's question on Spread#1541310/04/99; 19:00:58

IMHO when the spread widens to this amount (+$7) tween the bid and ask -- there are few sellers on the market side. -- I believe that the market maker is required to make a market by stating an offer price and if the market moves too fast he may not be able to cover his own sales.
<;-)

Cavan ManThe Scot#1541410/04/99; 19:05:52

Agree. 24K = more AU.
RossLCoins, spread#1541510/04/99; 19:07:43

Which coins?

The Scot
Maple leafs are .9999 fine one ounce gold. 24K.
The KRrands and the Eagles are 1 ounce gold wilt 10% copper alloyed in for hardness and durability. 22K. They have the same number of atoms of Au as the maple leafs.

The spread

I Just looked at livecharts.com and bid is $325.4 while ask is $326.4 a few minutes ago I saw a bid of $325 for 104 contracts! Somebody is buying big time!

Gandalf the WhiteCoinGuy's Question#1541610/04/99; 19:08:05

www.forex.freeservers.com/main2.html

Spot the Dog is the fictious "present" price of Gold! There are many reporting boards and in many values other that US$! --- the best one that I have found is at the forex board which is setup for currancy exchange quotes.
BUT if you click GLD= and change the time to MIN and click "request" -- WALLA WALLA bing bang !!
<;-)

CoinGuyCoins#1541710/04/99; 19:08:12

Scot,

As far as coins go, I've always viewed my coins the same way I view my stock portfolio. I keep some in the investment grades(MS63 to MS65), I also have purchased a few rarities, and commons as well. I've also bought quite a few common silver and gold pieces(junk silver and gold) intended to use in a barter situation, if the need arises. As far as 22k or 24k, some people say the American eagles will be easily recognized as a "real" gold coin because it's American, I myself don't care. I don't think the price difference is worth the worry. Especially when you're in a rising market. Just be glad you bought in now. Go Spot Go...

elevator guy@Coin Guy#1541810/04/99; 19:08:56

http://www.quote.com/livechartscom/

Coin Guy, you can see the Sydney market, (I think), trading at <http://www.quote.com/livechartscom/>
If the window doesnt appear when you click on the link, try typing in the address manually.
When the screen comes up, it will show INDU, the Dow, at todays close. Click in the text field for the symbol name, and type in for example gcz9, to see the December contract.
You can vary the time scale of the chart also.

Cavan ManCounterattack#1541910/04/99; 19:11:34

Where is it? Anybody have a clue? What do the best mids here say?

Gold at $325 is still cheap IMHO.

Gandalf the Whiteapples and oranges !#1542010/04/99; 19:12:45

the spread tween the Dec Future bid and ask AND the spread tween the SPOT the Dog BID and ASK are far different !
<;-)

CoinGuy(No Subject)#1542110/04/99; 19:15:29

Thanks for all the help guys, was getting tired of KittyCo...
SteveHI hope you are all still awake!#1542210/04/99; 19:23:07

www.kitco.com

Dec now...$324.30!!!!

from Trader_Vic [I like these words]:

Date: Mon Oct 04 1999 20:55
trader_vic (NETPI...) ID#316402:
Copyright © 1999 trader_vic/Kitco Inc. All rights reserved
As far as this move is concerned, don't even worry about the oversold condition until gold reaches $525/oz....Until then, we will just be cleaning out the shorts...or shall I say the SHORTS will be cleaning out their own shorts!!! When you consider that the normal level of gold should have been $500/oz if it had not been used as a hedge instrument, it only makes sense that until we reach the INITIAL RELATIVE VALUE OF GOLD we are just in an equalization phase....Once this phase is completed in the next several months, we can then really trade gold as the asset it trully is...It could get really hairy in here as the gold shorts unwind loosing positions and all the others just default on their investments like PEI, there is a financial disaster out there waiting and it is bigger than Y2K..the only difference is that Y2K has more publicity...This disaster is one that those in the know won't tell and will take it to their grave...or their demise!!! Watch gold, it will clear $350/oz with no problems at all and when the ball really starts rolling and the fund managers start to jump in, it will be the most fabulous bull you have ever seen....much better than 1979 & 80....this one has 100 times the power behind it that the 70's did...just think of the inflation in $ that went into the stock market that will flow directly into gold over the next 6 months...and with gold you have the thinest market of any stock issued...that's because THERE IS NO MORE GOLD!!!!

SteveHBollinger (not deringer, a topic for another time):#1542310/04/99; 19:28:32

The monthly bollinger is at $335 and guess what is approaching it. If gold hits $350, then it is likely that it will track up the upper bollinger to around $380 or higher. The weekly u.b. was at $280. It is broken. The daily u.b. was at $260 and it is broken. Next goal is $335. Tonight?
OROReposts#1542410/04/99; 19:33:06

CB2 thanks -
Cavan Man thanks for reminding me.

Date: Mon Oct 04 1999 18:56
ORO (@Surfer Mine defaults) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
Long term the mine defaults will only hurt overhedged miners, causing their assets to come to market, where all the golden sharks will come to feast.
So far, not too many medium/larger companies are in trouble. Many may refinance long term hedges given half a chance, even if survival would be a touch and go situation. If SEQUIN has it right, and my data indicate that is an understatement, then there will be a general dump of all miners, then a quick reversal in the unhedged, or lightly hedged survivors. I try to buy only those mines that have no hedges, or mines with hedges covering a small portion of production and having multiple mines ( so that closure of a mine would not be a disaster ) .
Right now I am looking for "goat pasture" gold explorers, open to suggestions. Checked out MYNG, I see a 100% to 200% dilution at the POG $300-$350 range before they produce their first ounce. So at current prices, with intentions and capacity to produce 16000 to 35000 Oz per year at 150 to 250 margins, I'd say that comes to 5-10c present value per share in the current POG range, and if they are very lucky in financing, it might be worth up to 20c. Things get interesting if POG holds over $350. Right now they have weak claims for a large gravel deposit and have to fix their debt as well as financing a mine. The weak claims would prevent an agreement with a major, say PDG/NEM. Maybe a non-distressed medium size producer would take them on.

Date: Mon Oct 04 1999 18:49
SEQUIN (On the other hand , ) ID#25171:
Copyright © 1999 SEQUIN/Kitco Inc. All rights reserved
derivatives books are so screwed that to protect them bulion banks had to buy an aggregated 15 M oz ( this doesn't take into account mine or spec buybacks ) If Gold goes back down , they will have to sell back .
If it goes up again , they will have to buy again : sounds too bad to be true ? It is the principle of gamma minus which I explained here a year ago ( give or take a few months ! )
So why not cut the position ? The problem is that in normal time , it is easy to find liquidity in options to buy 1 to 2 M oz of a strike without moving the market too much . Now , with 100 000 oz you clean the offers and you have to go 2 % vol higher to find the next offer . Since most of the option market makers have open positions in the tens of million of oz , it is just impossible .
The conclusion is that we will have very violent moves up and down with a bias toward the upside since the 100 M oz gorilla is looming around at 290 .
Very sharp pullbacks are possible due to this derivatives positions and most risk managers are waiting for the first defaults in the next 2 months.
You can trust banks to try to cover it up but since I have the best of info , I will make sure that you know about it .
Look at GCZ9 now , and smile . ( up 4 to 322 as I write this piece )
THKS

Date: Mon Oct 04 1999 18:12
SEQUIN (Goldman 's) ID#25171:
Copyright © 1999 SEQUIN/Kitco Inc. All rights reserved
Option trader got fired .
You guys can't even start to imagine how much blood there is .
Bullion banks are in panic mode : derivative positions too big to cover , no liquidity , fear about medium size mine defaults because of overhedging and margin calls .
Very bad words in board rooms these days.
Banks hesitate to be the one who pulls the trigger on mines since they could start a cascading default chain reaction.
UBS is dead.
Goldman is dead.
Morgan is sh*tting razor blades but not dead yet .
Morgan stanley disappeared from radar screen.
They NEEEEED Gold to go down .
There is about 1 year production of buy order between 280 / 295
If these guys start to panic it might get interesting . But too much blood is not always the best you can hope for : Beware of CBs stepping in .
If there are small to medium mines defaulting , we could see contagion on the XAU.
So I would prefer an orderly rise .
I know this is too much to ask for and I am a little bit excited.
THKS




Date: Mon Oct 04 1999 19:33
Silverbaron (Did the Fed bail out Goldman Sux?) ID#290456:

This one especially for SEQUIN "Goldman is dead"...

Gold producers forced to rejig hedge books

http://196.36.119.130/miningwebgold.nsf/Current/422567D9004530DF4225680000724BF6?OpenDocument



Date: Mon Oct 04 1999 21:18
ORO (@EJ @Old Gold) ID#71231:
EJ - exctically one second too late. Austrians still have to come up with a less painful transition scheme.

Old Gold - If economists saw this, why didn't they suggest some way to get arround it? Perhaps the Emperors of Rome wanted not to hear of the future belittlement of their pricipality?


Date: Mon Oct 04 1999 19:40
OLD GOLD (How the US has Benefitted from the Global Crisis) ID#242325:
Copyright © 1999 OLD GOLD/Kitco Inc. All rights reserved
Excerps from a recent academic study on the globasl financial system. After reading this I wonder why the European CBs waited so long to pull the plug on the gold carry trade.



There is no such grassroots activity in the U.S. as yet. Partly, this may
reflect the fact that the U.S. economy has thus far benefited in various
ways from the global crisis. These include seignorage profits. Over
two-thirds of U.S. currency is held outside the United States. Some is drug money, but mainly it's the increasing use of the dollar as a store of value by middle-income households upset by the instability of their local currency. The difference between the face value of the bills and the minor cost of printing them, adds up to annual seignorage profits of about 0.5% of GDP.

Another boon to the U.S. economy has been the flight to U.S. bonds by
foreign investors, whose share of all private holdings of U.S. bonds rose
from 21% at the beginning of 1995 to 38% at the end of 1998. In addition,
developing countries, who in 1997 already held 55% of global official
reserves--mainly U.S. treasury notes--though transacting only 25% of world
trade, have been desperately trying to regain the confidence of the
financial markets by increasing their dollar reserves. This has meant
curtailing imports and emphasizing exports, which has severely depressed
world prices for their chief exports: primary goods and labor-intensive
manufactures. Thus the U.S. has been able to increase its foreign
liabilities to cover its rapidly growing trade deficit without having to
raise interest rates, as the rest of the world has to do, in order to get
foreigners to hold its currency and securities.

The dark side is that U.S. residents whose income and wealth derives from
owning financial assets or who are employed in skilled jobs in the
nontraded goods sector have garnered the lion's share of the benefits. In
contrast, workers in the exporting and import-competing industries have
lost high-paid jobs and have had to migrate to lower wage, service sector
jobs. Feeling their profits squeezed by unusually low prices, agriculture,
mining, steel, and other material producing industries with political clout
are joining with labor in demanding import protection. Washington's attempt
to ride both its high horses--free trade and free capital mobility--is
becoming politically precarious.


Date: Mon Oct 04 1999 19:34
EJ (ORO - yessir) ID#23066:
Except for that little problem in the 1970s, the scheme has worked pretty well. Problem is, all the MIT and Harvard educated technocrats running the monetary policies of the world's largest nations are all in agreement as to how the global economy ought to work. As a bonus, they can all swap stories about chugging scorpion bowls at the Hong Kong in Harvard Square. But there are a few fruitcakes at MIT and Harvard who are gaining some acclaim. They are bringing up the arguments of the Austrian school.

Just in time.
-EJ

Date: Mon Oct 04 1999 19:11
ORO (@EJ - Old words from the BIS) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
The thing they thought they could do, was to make the decision, on the part of the world as a whole, as to what is money.
They discovered, the hard and embarassing way, that the markets decide what is money, not CBs or governments. What success they may have in pushing the paper currencies over the PMs requires constant work in an environment of fluctuating debt loads and exchange rates. Their opinions are allways wrong so that eventually, somewhere, they end up introducing a large distortion in the markets/economy, ending with a bubble like today's stocks, accompanied by artificial depression, as in commodities and gold. Their control one day is the best indicator of their loosing it on the next day, when their control mechanism backfires.

Date: Mon Oct 04 1999 05:11
ORO (@Captain Kirk - How the worthless is valued) ID#71231:
Copyright © 1999 ORO All rights reserved
It is no secret that the best way to build demand for something is to make it someone's obligation. No better way to do that than through debt and taxes. Debt, in particular, is great because it has the stamp of commitment from the debtor, apparently given out of his own good will.
Thus the token has value because the debtors owe it. Say I found an enormous cave full of bats, and I had a banking lisence, if my bank were to loan you clumps of bat droppings at 1% interest rates and there was a farmer willing to take bat droppings for corn because it makes for a good fertilizer, then that would quickly become the cheapest fertilizer and everyone would borrow it. Then, as the first interest payments were coming due I raise interest rates to 20% and demand the return of my bat droppings or that you refinance the interest payments you owe. Very soon, bat droppings will have become very precious and many a farmer will kick himself for using dear bat dung for fertilizer. There would be great explorations for bat caves. Bat farms would eventually be built and the purchasing power of my bat dung hoard would rise as long as not to many went into receivership and interest rates kept ahead of bat dung production, lending and findings there would allways be more demand for bat dung than supply.
But what would happen if guano of an extinct albatros were to be offered at a 1% rate by the bank of some enterprising pacific island? Though their guano would be extremely cheap, their great enterprise, hard work, and fierce resistance to imports would cause them a great accumulation of my bat droppings. My borrowers would be at a loss to return any of the albatros guano borrowed. When the island demanded the return of its guano, it would cause a great devaluation of my bat droppings, because of the great ammount of guano debt owed, the stockpile of bat droppings everywhere and that would be suddenly seeking exchange for guano. There would be a great surge in prices quoted in bat dung. I would not raise interest rates out of fear of further depressing the economy of the world, and exacerbating the rate of bankruptcy already caused by guano debt. Since my bat dung currency is dependent upon demand for debt settlement and bankruptcy eliminates debt, future demand for bat dung would suffer

The US has trapped the world in $ debt in the late 70s and again in the early 90s. The mechanism is well known and simple. You lower interest rates and people borrow if there is something to buy with the currency you lend. When foreigners, particularly Emerging Market nations borrow, they pay a significant premium to US interest rates. Essentially the rates they pay are higher for the simple reason that they are not capable of printing $. Just as the credit card company is best served by your maintenance of a steady or growing balance as long as you are capable of making a certain minimal payment, so does the EM nation emerge from independence into debt and must maintain payments on it. This makes for the international demand for $ that the EMs must supply. Hence the demand for $ is maintained as well as its value.
The great EM debt buildup occurred in the 70s as oil, then newly made tradable exclusively in $ ( 1969 ) , made necessary the export of goods to the US in order to obtain those $. Special "development" loans from the Wrold Bank, the IMF, and commercial banks backed by US government guarantees were made available at interest rates lower than the US inflation rate. All in the interest of creating international demand for $.
Upon the beginning of Paul Volcker's taking of the reigns of the Fed, the interest rates were hiked skywards and many EM nations suffered steep currency devaluations and debt defaults that made their $ debt much more difficult to service. As a result, much of the world's supply of goods and services became cheaper for the US consumer and the US economy became the mock economy that it is today. $ supply became the more difficult, whereas goods were made plentiful for those supplying $.
Today, the Swiss Franc, Yen, Euro and gold, the latter in particular.

Is it not obvious that the value of money is made out of the debt burden of its debtor's? Is it not obvious that the currency game has been set up against the $ on all fronts, but particularly gold?

Great pieces explaining different aspect of this in clear stories are to be found in Dr. Paul Hein's articles.
A Primer On Money
http://www.golden-eagle.com/editorials_98/hein031798.html
The T.Heft Plantation
http://www.golden-eagle.com/gold_digest_98/hein110298.html

http://www.golden-eagle.com/gold_digest_99/hein070899.html
Money, Lies, and Adding-Machine Tape
http://www.golden-eagle.com/gold_digest_99/hein060199.html

Date: Mon Oct 04 1999 02:27
Captain_Kirk (africanminer@gold as money) ID#339203:
Copyright © 1999 Captain_Kirk/Kitco Inc. All rights reserved


Supposedly around 1975, the U.S. congress suspended the FDR 1933 executive type order which suspended ( anulled? ) all gold contracts. Supposedly, today, one can write a contract for payment in gold. However, any decrease in the gold price of the post-1933 dollar is viewed as a "profit" for post-1933 dollar tax purposes for the one exchanging gold for goods or for post-1933 dollars. That is, you might have to find some post-1933 dollars to pay out as Federal taxes if you realize a "gain" from the transaction. I guess the Federals want you to track each and every piece of gold, assign a post-1933 dollar "price" to it, and compare this original "price" with the final "price" when you exchange that particular piece of gold for something. If you exchange hard assets for the original piece of gold ( never use post-1933 dollars ) , then somehow, somebody has to determine the "fair market value" in post-1933 dollars for the original transaction. Ect., Ect. The whole scheme is quite confusing to me, and it is entirely unclear what they want you to do. I suppose the Federals don't won't you using gold for money, they want you to use their "primo" post-1933 dollars. Of course, I have yet to figure out just what one of these post-1933 dollars is for sure. I guess it is what they tell you it is. But they won't actually tell you what it is. It gets really confusing to me. I would prefer to stick with an ounce of this or a pound of that, which would make things a lot simpler, or so it seems to me.

Date: Mon Oct 04 1999 18:05
ORO (Technicals - SJ Kaplan) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
I tried to move out a big chunk of my position too ( hoping to unload 1/3-1/2 ) , just as Kaplan was, with an eye to immediately reenter on the pullback. I was too slow and have too many positions, by the time I had enough limit orders in for sale ( I do classic TA to determine targets and use oscilators to time - the swings were just too quick and I could not keep up with the analyssis ) , the pullback was well underway, managed to get out of DROOY at 2.5, and reentered at 2.0.
Got out of 1/3 of my CAU at 9/16 and tried to get a fill at 7/16 and 3/8, which didn't happen ( yet-and the chart shows it may not happen at all ) .

Gold - at POG over 315 we are hovering above the old resistance. Breaking above the 324 mark ( bid ) or 329 ( ask ) should push up to the 340/350 area rather quickly, leaving $355 as the next intermediate term target. Gold is enjoying a combination of attention and disbelief, which is rather bullish.

XAU - A break over 89 and especially 92, should easilly lead to 104-105, and the XAU should then continue to about 120 at the vicinity of $350.

If the market does not fall appart as it did in Karachi, the outlook for gold shares and futures is good. If not, the gold markets will seize up and your physical will be the only thing holding value in the markets.

Recent actions by the SA miners to limit production seems to indicate their belief that the markets are not going to fall apart. We shall watch carefully.

Nasdaq- does anyone else see significance in the shoulder line not being broken on the Nasdaq composite's daily chart head and shoulders ( 1 month ) ?
Note that the formation could be a flag ( 2 months ) , as part of a steep cup and saucer, C&S ( 3 months ) .
If the shoulder line at 2820 is broken upwards convincingly, then the flag and C&S would play in to give upside targets of 3100 and 3300, respectively.
If the Neck line support under 2700 is broken, then 2500 is a good target downside, followed by a 2000-2100 downside target for the double top formation of the last 6 months.
Oscilators indicate this up move in the Nasdaq is for real but should fizzle and bring back the negative trend as an oscilator lower high.

The bearish scenario is more in line with the S&P500 H&S so long as the SP500 ( cash ) remains below 1380. A reversal at 1310-1330 tomorrow is probably has the most negative implications.

If the VIX drops to 23 or less, I would consider this rally weak and expect a quick reversal downwards at or just after options expiration.

Chris PowellNY Post credits GATA for Euro CB action#1542510/04/99; 19:36:44

http://www.egroups.com/group/gata/230.html?

John Crudele's column
in Monday's NY Post.

http://www.egroups.com/group/gata/230.html?

Chris PowellNY Post credits GATA for Euro CB action#1542610/04/99; 19:38:04

http://www.egroups.com/group/gata/230.html?

John Crudele's Monday column.
BonedaddyLeigh#1542710/04/99; 19:38:25

No, I'm on Rocky Mountain Time. No traffic or streetlights here. Sometimes the antelope come in the yard and the dog barks. Then I rise with the east coast. Bloomberg is good TV at 04:00. Glad you're better.
SteveHSome reposts#1542810/04/99; 19:38:51

www.kitco.com

HI ALL, WHAT A DAY/NIGHT
(ANGEL) Oct 04, 20:27

Bigdog thought I would go with DROOY ,HARMONY, and DAY, meeting with broker tomorrow I know they've had quite a run up but I think this has just started. I couldn't get any options, they're still not taking any limit orders, its strange to watch the screen and see people being skided, Jesse James never did so well. CNBC actually did an interview with a woman from one of the big banks ( sorry I didn't catch the names I came in on the middle) she actually talked about the hedgers problems and admitted they weren't clear yet. She looked as if she swallowed a pickle the whole time. By the way has anyone heard any more on the problems at the comex ? I heard they had thousands of orders hanging out unable to be filled.


Le Metropole members,

At the moment, the price of gold is trying to take out
the critical $315 area. If it can close above $315 spot
look out. One month lease rates are over 5%. Bullion
dealers are fealing great stress.

"Left Flank" on a roll today. This is the time
to keep the pressure on the shorts. Pay back time!

This just in:

THE FIX WAS IN: BRITS ROLLED ON GOLD
By John Crudele

New York Post
October 4, 1999


THE price of gold soared last week after a number
of Central Banks said they won't unload extra gold
onto the open market for the next five years. The
precious metal jumped to $329 an ounce, up almost
30 percent.

We outsiders will probably never know what prompted
the statement by the 15 governments. But it is very
interesting that an outfit called the Gold Anti-Trust
Action Committee, headed by former pro footballer
Bill Murphy, recently hired lawyers in Britain and
enlisted the help of Parliamentary members to find
out if the price of the precious metal was being
purposely kept down.

Why England? Because the Bank of England announced
last May that it was going to sell tons of gold on
the open market. Whenever there's a big seller like
that it obviously keeps the price down - whether
it's gold or dog biscuits.

"It just raised the whole issue of what was going
on. It's real simple," said Murphy. "The powers
that be went to the English government and said
we can't let gold go above $290."

That, of course, isn't the way markets are supposed
to work. So Murphy's group - headquartered down in
Houston but reaching farther through an website -
pestered members of Parliament to bring up the
gold sale for debate, which occurred this past June.

Senator Phil Gramm, chairman of the U.S. Senate
Banking Committee, got a copy of the Parliament
debate in July. Was Murphy the one who started the
ball rolling that eventally caused the 15 banks to
announce that they were laying off gold? We'll never
know. But it's as good a guess as any right now.

It looks as if someone manipulated gold prices again
last week. Despite being at $329 an ounce in the early
part of last week, gold closed at just under $300 an
ounce on Thursday. The strike price on gold futures
contracts just happens to be $300 an ounce. The very
next day gold went back up to around $311 an ounce. End


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Le Patron
www.LeMetropoleCafe.com


Le Metropole members,

Yes, the "Left Flank" continues to gain ground.
Great coverage from savvy South African journalist,
Jonathon Rosenthal.

>From Business Day, Cape Times, October 1st, 1999.

INSIDE MINING - Jonathan Rosenthal

Martin Armstrong the bear is deep in the woods
Who is Martin Armstrong, what is Princeton Economics
International and what does it matter anyhow? These
are probably normal and healthy responses in the
colonies when we learn that another US hedge fund
manager is up on fraud charges.

So what if this one-time financial guru and darling
of the market took about $1 billion from Japanese
investors and now has about $46 million left in
the bank. So what if he gave his depositors false
accounts and now has three regulatory agencies
from two countries baying for his blood.

In the new economic order hedge funds going belly up
in the US are almost as common as cellphone thefts
down here.Except that quite a few prominent people in
the gold market are convinced that Armstrong was
really short on gold. Depending on who you ask he
was short anything from 300 tons to 800 tons. And
some believe that he sold short at about the $260
to $265 mark and has incurred further hair-raising
paper losses of $30 an ounce over the past few weeks.

And if Armstrong really was that short of gold, a
point Princeton Economics denied in a statement it
released last week, it could have profound
implications for the gold price. The court-appointed
managers now trying to salvage his fund could be
forced to cover the position through buying up 300
to 800 tons in an ever-tightening market.

Brett Kebble, the deputy chairman of JCI Gold, said
he believed Armstrong had run up a short position
of 800 tons."Martin Armstrong has been bearish about
gold and has been writing furiously about what a
terrible investment it is. He has been short on
gold for some time," Kebble said.

The Gold Anti-Trust Action Committee, a campaigning
organisation that argues the gold price has been
the victim of massive manipulation by powerful
financial interests, believed Armstrong had borrowed
or was short to the tune of 746 tons.

Others suggested that while Armstrong was likely to
have gone short, as he repeatedly wrote opinion
pieces and argued that the gold price was likely
to fall to $200 an ounce, they found it hard to
believe that his short position could be so large.

Garry Mead, the head of reasearch at the World Gold
Council, said he would be surprised to find that
Armstrong's fund had run up a position of that size.

Michael Coulson, head of mining research at Paribas in
London, said he would not be surprised to find
Armstrong short but suggested that a position of no
more than 300 tons was more realistic.

The US Commodities Futures Trading Commission, one of
three watchdog bodies that filed legal action against
Armstrong, refused to comment on his position.
The Securities Exchange Commission was more helpful
but had no idea what positions he might have taken
in the commodities market.

The haggle about the size of Armstrong's position
is not simply an esoteric search for truth, but could
play a large role in determining how far the rally
in the gold price could go.

Gold Fields Mineral Services (GFMS), the commodities
research group, estimates that the total size of
the net speculative short position in the market
is probably not much more than 400 or 500 tons.
That's not counting the several thousand tons of
gold that producers have sold forward. GFMS admits
that if the short position is significantly larger
than it believes it to be, then gold could rally to
$400 or even $500 an ounce.

If Armstrong is indeed short of gold, even by only
300 tons, then it implies that the GFMS figures
underestimate the short position hanging over the
market. This then opens the door to some pretty
wild assumptions as to the size of the total position.
Kebble believes it could be as large as 4,000 tons,
which implies a large number of funds are in a tight
spot right now.

If that is the case then there will simply not be
enough gold avilable on the physical market to
cover those positions. Huge hedge funds would be
unable to meet their margin calls as the price rises.

The ensuing crisis would make the collapse of Long
Term Capital Management look like a walk in the park.

<A HREF="http://www.lemetropolecafe.com/scripts/products.cfm">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

Date: Mon Oct 04 1999 19:11
ORO (@EJ - Old words from the BIS) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
The thing they thought they could do, was to make the decision, on the part of the world as a whole, as to what is money.
They discovered, the hard and embarassing way, that the markets decide what is money, not CBs or governments. What success they may have in pushing the paper currencies over the PMs requires constant work in an environment of fluctuating debt loads and exchange rates. Their opinions are allways wrong so that eventually, somewhere, they end up introducing a large distortion in the markets/economy, ending with a bubble like today's stocks, accompanied by artificial depression, as in commodities and gold. Their control one day is the best indicator of their loosing it on the next day, when their control mechanism backfires.

SteveHFact is there are lots of excellent posts about this evening...#1542910/04/99; 19:43:49

and I see ORO and a few of us others are sharing the wealth (info):

Date: Mon Oct 04 1999 19:01
NewPhys (Something Nasty this way comes!) ID#392177:
Copyright © 1999 NewPhys/Kitco Inc. All rights reserved
JP: I regretfully think you are right. This rapid a rise in the price of gold is unprecedented. The equity markets will continue along for some time, blissfully ignorant of the damage being done to the investment banking sector. Shockwaves will eventually pass through the rest of the world's economy, unless the CB's step in and sell gold. But -- what concessions would the US have to make for the European CB's to do this?
It will be interesting to see what happens to the US dollar, and US interest rates. Will we have a warning shot across the bow like we did in 1987, when the US dollar dropped more than 5% in a few days? I am beginning to suspect things could evolve very quickly. The 'information era' -- the 'awakening' of the net appears to have accelerated time. Or, at least the nonlinear events. I'll bet there are some Rothschilds who are watching with glee at the capitulation of the US -- goldwise, that is. Eventually the BIS will step in. For a price.

SteveHOriginal#1543010/04/99; 19:46:18

Rember the Bill Murphy rumor of the SA mines announcing they would limit production. Was that the announcement or was that the rumor? If it was the rumor then the SWHTF when the rumor comes out because the ECB announcement knocked gold up...what...$30? The limit on production announcement could have an even more exponential affect, eh?
SteveHtough subject#1543110/04/99; 19:51:50

www.gold-eagle.com

from YGM:

(YGM) Oct 04, 19:45

Remember there's still a dark side in the mix. If you don't think Bankers are worried study all the press releases at the B.I.S. site. I have for along time and it
comes down to this---- They are preparing for----
---Bank defaults
---Hedge fund collapses
---Credit and debt squeezes
---Bank cash runs etc etc
***If you read between the lines and all the double talk the future of PAPER after Y2K looks pretty grim. Want to venture a guess as to how much Gold the BIS and other Central Banks have accumulated over the years that they've let the many Gold borrowers and shorters run wild? Remember CBs' are where the richest and most powerful place their bets and we all know he who has the most Gold makes the rules. Want to guess how many defaults there will be soon on Gold deliveries and futures contracts. I don't but it will be mind boggling if
indeed there are 10-14000 tonnes sold short!!!!!
Anyway I now also own alot of paper but I'm only counting on my physical metal while the eggs lay unhatched. Paper is only good for firestarter til it's turned into Gold!!!--YGM.

nttp://www.bis.org/home.htm

SteveHMaverick, were not going verticle are we?#1543210/04/99; 19:55:41

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveHMaverick, were not going verticle are we?#1543310/04/99; 19:59:38

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveHMaverick, were not going verticle are we?#1543410/04/99; 19:59:55

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveHMaverick, were not going verticle are we?#1543510/04/99; 20:00:56

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveHMaverick, were not going verticle are we?#1543610/04/99; 20:01:48

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
Cavan ManSteveH#1543710/04/99; 20:07:52

What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.

Cavan ManSteveH#1543810/04/99; 20:08:11

What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.

megatronUSA#1543910/04/99; 20:08:49

People who want to see the US take a dive have strange thought patterns, I've always said. It's impossible to defend idiots like ClintonRubinGreenspan, but nothing is easier than defending the American Constitution, in it's original intent and form. Only an envious liberal would deny the genius that allowed the creation of the free markets we enjoy, although lately some havn't been all that "free'.
Here in Canada, US bashing is second only to hockey in terms of recreation. I find it pathetic and sad.

Cavan ManSteveH#1544010/04/99; 20:09:43

What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.

CmaxVoyager (10/4/99; 0:39:32MDT - Msg ID:15346)#1544110/04/99; 20:10:43

Don't confuse the GPS calendar rollover with a Y2K event, the two are very different. As an analogy, the GPS rollover is more like a preprogrammed rollover from 12-31-99 to 1-1-(19)00. It's "calendar" never leaves it's present "century", and just continues in a time loop. It also has nothing to do with a "two digit" year or a "four digit" year.
Your boat: are you downloading the web off SSB, or Comsat?

16-penny(No Subject)#1544210/04/99; 20:11:38

cant seem to download todays discustion
CmaxVoyager#1544310/04/99; 20:11:53

Don't confuse the GPS calendar rollover with a Y2K event, the two are very different. As an analogy, the GPS rollover is more like a preprogrammed rollover from 12-31-99 to 1-1-(19)00. It's "calendar" never leaves it's present "century", and just continues in a time loop. It also has nothing to do with a "two digit" year or a "four digit" year.
Your boat: are you downloading the web off SSB, or Comsat?

SteveHMaverick, were not going verticle are we?#1544410/04/99; 20:19:33

The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
oldgoldFed intervention?#1544510/04/99; 20:39:07

GATA warning about the POSSIBILITY of imminent intervention by the Fed to save the gold shorts.
oldgoldFed intervention?#1544610/04/99; 20:39:47

GATA warning about the POSSIBILITY of imminent intervention by the Fed to save the gold shorts.
GoldflyYO! Hey YO! Check it out#1544710/04/99; 21:10:46

Spot $330.30!!!!!
SteveHBollinger#1544810/04/99; 21:15:14

Two-standard deviations or so either side of the price that depending on the measurement has a propensity to watch the underlying security trade within the bands whereby they go from one to the other with a fair degree of regularity. However, when a stock or security or gold in this case approaches then breaks through a new level is usually attained after which the in band up and down cyclicals recommence in earnest. We are see a rally of rallies in gold right now and the approachment and break out of the bollingers is just another indicator that the rally is a hot one.
SteveHLast post till morning#1544910/04/99; 21:18:36

Me thinks the charts look ready for a breakout...me thinks. Mind the Gap.
OROBollinger Bands#1545010/04/99; 21:27:33

Invented by John Bollinger (www.equitytrader.com).
The bands above and below the average over a period, usually 20 days on a dayly chart.
Upper band = average + n Standard deviations
Lower band = average - n Standard deviations
n usually taken as 2
Easy to do on spread sheets.

Usage:
Breakouts:
Upper band break out after a steady market is a statistically significant event indicating that the new trend (in the direction of the breakout) is underway. As in "a gold market not as before"
Temporary spike tops and bottoms occur when the band is broken in the direction of the trend in a "blowoff" vertical fashion. The temporary top is usually arround the same distance away from the upper band as the upper band is away from the average.

Trending: A powerful bull trend appeats as prices moving along the upper band. A powerfull bear trend appears as prices moving along the botom band.

Reversal: Spike tops as above, round tops are seen as a reversal between the bands, above the average but below the upper band.

Volatility: The width of the bands relative to the price level is an indication of volatility (usually measured as the standard deviation). Also the narrowing of the bands (low volatility) is commonly a precursor to high volatility. Thus a very narrow BB is an indication of a large move ahead.
Narrow volatility and the spike are the strongest/most reliable indicators. Breakouts can be misleading, with no followthrough.

Black Bladeall#1545110/04/99; 21:36:11

http://www.thestreet.com/comment/taskmaster/789110.html

Tonight is lookin' good...POG spot at 329.5 and no down-side on Kitco charts.

Scot, RossL, and Coinguy, Yes Krugers are nice design, but the color is butt-ugly. Personally I buy mapleleafs. Even Eagles pale in comparison. Sorry, but I prefer the brilliance of 24K as opposed to the low-budget imitations, and I'm US citizen, so patriotism doesn't play with me.

Interesting article on the street.com about short positions in Au. The above link should get you there, if not, then search the site.

Megatron, as John Candy (who was canadian) said "Canada? isn't that the 51st state?"

16-penny(No Subject)#1545210/04/99; 21:36:25

alls well zianet has been touch and go in southern NM
GFDHot in Hongkong#1545310/04/99; 21:38:34

Well we seem to be going parabolic upon opening in the Hongkong market. Lessee here... 100 mil oz of 390 calls at say spot at 340, say, tomorrow morning... how many of those were naked did you say?? :o

If Al does not shoot this thing down first thing tomorrow start worrying about a more real crises brewing somewhere else, maybe related maybe not...

Black Bladeall#1545410/04/99; 21:40:47

Sorry, I guess you need a trial membership for the link that I posted. Anyway, Megatron...the J. Candy quote was from the movie "Canadian Bacon". Also the greatest put-down of Canada was about the beer, but I digress. Personally I like Moosehead.
Black BladeInfo on Shorts "dropped", more is exposed! (Pun intended)#1545510/04/99; 21:50:25

The overall content of the article on the link posted was that of several analysts are beginning to seriously believe the rumors of short positions, and one claims that LTCM really was short 300+ tons Au, irregargless of their (LTCM)denials. The consensus is that there is really at least an overall 4000 ton short position, and possibly greater.
Black BladeFor our English Goldbug friends#1545610/04/99; 21:53:49

"Shorts" in American could be similar to "knickers" in English.
GoldflyScot, Cavan Man, CB2, DD#1545710/04/99; 22:09:54

"When I received the Nobel Prize, the only big lump sum of money I have ever seen, I had to do something with it. The easiest way to drop this hot potato was to invest it, to buy shares. I knew that World War II was coming and I was afraid that if I had shares which rise in case of war, I would wish for war. So I asked my agent to buy shares which go down in the event of war. This he did. I lost my money and saved my soul."

Albert Szent-Gyorgyi

Peter AsherOLD GOLD !!!! re GATA#1545810/04/99; 22:10:15

ARE YOU GOING TO TELL US ABOUT THIS, OR ARE YOU TRYING TO KEEP US UP ALL NIGHT ? ? ?
Tubac's ears16Penny#1545910/04/99; 22:28:55

Are you from Ruidoso? My father is a builder there and gets his net access through zianet as well.
TO ALL: WHAT'S WITH SILVER?????!!!!!!!!!!!!

FarfelWhere Have All the KITCO Posters Gone?#1546010/04/99; 22:31:55

"Where have all the KITCO posters gone?
Long time passing
Where have all the KITCO posters gone?
Long time ago"

All the negative gold hypesters, from Disney to Jims to EB to LGB to Jeil to Selby...they don't seem to be posting much lately over at that forum.

Amazing what a vertical gold rush can do to those who bet against the phenomenon or refused to recognize the initial power of its manifestation.

Does it have legs?

Hmmmmm, well powerful forces are sure to intervene and oppose the rally. The big question is: when?

My own pet theory is this: I think that the general market (stocks and bonds) must be taken down or else various sectoral inflationary explosions will be enormous. You can only fudge the economic stats for so long, but at a certain point, reality slaps you in the face. So, I tend to believe that this little gold rush is sanctioned, if not encouraged, by Greenspan and gang. They need to raise interest rates to stem sectoral inflation and protect the Dollar, and gold's current upspike serves to validate an interest rate hike.

At the same time, Big Money needs a repository of safety and since gold is held by such a small percentage of the population, then gold should become that favored repository for the wealthy. Over time, maybe in another several months, the average investor will begin to dip his toes into the gold market. However, judging from my own empirical observations, the average investor still has little to no clue what is going on with precious metals today. The mainstream media has ensured that this gold verticality is occurring without any ballyhoo or great publicity.

Until the small investor gets tuned in, then it's all "wall of worry" stuff, and there will be many gold bears who will have their asses handed to them as they continuously try and pick a top on the developing gold mania.

As for myself, well, I continue to stay away from gold for the most part, waiting to see the BUY volumes escalate to a point indicating enough populist BUY pressure to overcome any interventionist efforts by the major central banks.

For those who worry about the disastrous effects to certain gold shorting bullion banks...and for those who figure Fed intervention is certain to preclude this problem, well, I am doubtful and cynical (as usual). Why? Because I think there are likely powerful, relatively healthy investment firms with great influence at the Fed and they would eagerly greet a debacle amongst various gold shorting bullion banks so that they can swoop in and pick up the pieces for pennies on the dollar -- No different than the game hedged gold miners played as they picked up the remains of collapsed unhedged gold producers over the past few years.

In conclusion, I believe that the average investor has been brainwashed to believe that gold has been one of history's most severely underperforming assets. So until gold can breach 800 an ounce (its Carter Era high point), then anti-gold propagandists can continue to note its inability to rise above its 20 year old price vs. stocks that are far ahead of their 20 year old prices. The anti-gold crowd can continue support the idea that gold is a "forever underperformer" vs. paper assets.

When gold breaks 800, then and only then, will I feel notably emboldened to get into gold in a big way. That should be the populist trigger where ALL anti-gold propaganda no longer holds water nor has any notable effect.
Gold finally PERFORMS above 800, and it should move to 2000 or higher (IF it can ever get there).

We have a long way to go before that happens.

Thanks

F*

nickel62Power of the up move is tremendous#1546110/04/99; 22:51:49

I have never seen anything like the relentless nature of this up move since mid august of 1982 when as a young portfolio manager with too much cash I watched an exploding stock market beginning lift off from the 770 on the DOW level where it had been range bound since 1968. It took me several months and a few kicks in the pants from older portfolio managers to realize that things had changed. I had been surviving by selling every rise and waiting for the market to come back down as it always had for the few years I had been in the business. This was different-this was a bull market. And as on of the old guys snarled at me "you don't trade stocks in a bull market you idiot you own them" I never did like that guy but it was very good advice. Well gentlemen we are in a bull market and one that is only days old. I pray I have the brains and guts to "own 'em" this time because I'm getting pretty old and there may not be many more chances to be in at the beginning of a full bull cycle.
Chris PowellAn appeal and a warning from GATA#1546210/04/99; 22:53:04

http://www.egroups.com/group/gata/232.html?

Includes latest intelligence
from GATA Chairman Bill "Midas" Murphy.

THX-1138Court confirms that Gold is money.#1546310/04/99; 23:04:08

Conseco Unit Loses Court Fight, Must Pay Iowa Rent in Gold


Washington, Oct. 4 ( Bloomberg ) -- A unit of Conseco Inc. failed
to
overturn a court order that increased its rent on a Des Moines, Iowa,
office
building by about 1,500 percent -- and required payment in gold coins.

Siding with a family of modern-day prospectors, the U.S. Supreme
Court
today rejected an appeal by Conseco Annuity Assurance Co. The decision
leaves intact a lower court order to pay $1.8 million in back rent, plus
about
$370,000 a year until 2016, on the Des Moines Building.

Today's action ends an unusual legal battle that saw the building
owners, descendants of businessman John Trostel, invoke a World War
I-era
lease provision letting them demand lease payments in gold. Conseco, an
insurer and
consumer lender based in Carmel, Indiana, argued unsuccessfully that the

provision long ago had ceased to have any legal significance.

Conseco predicted in court papers that the lower-court ruling will
``ignite a modern-day gold rush'' that could benefit landlords with
similar
leases.

When the 99-year lease was signed in 1917, gold clauses were common

contractual provisions that protected property owners against
fluctuations
in the value of the dollar. Congress and President Franklin D. Roosevelt
banned gold
clauses in 1933 as part of their efforts to devalue the dollar and
inflate
prices.

Revised Law

In 1977 Congress changed the law so that new leases could include
gold
clauses. Although that law by itself didn't affect the Des Moines
Building
gold clause, the Trostel family said the transfer of the contract to
Conseco
Annuity's corporate predecessor, American Life & Casualty Insurance Co.,

created a new lease and revived the gold provision.

The St. Louis-based 8th U.S. Circuit Court of Appeals agreed,
saying
Conseco had to pay its rent in gold. A federal trial judge then
concluded
that the company owed almost 6,000 troy ounces in back rent and almost
100
ounces per month until the lease expires. At current gold prices, the
annual
rent will be more than 15 times the $23,000 paid until 1993.

At the Supreme Court, Conseco argued unsuccessfully that the
appeals
court misconstrued the 1977 law. Today's decision marks the third time
the
nation's top tribunal has reviewed an appeal by Conseco on various
issues in the
case.

Trostel family lawyer Jim Doran said his clients probably won't
demand
that Conseco actually deliver gold coins. ``As a matter of negotiation,
we
would probably agree to a cash equivalent,'' he said.

Conseco, based in Carmel, Indiana, acquired American Life in 1996
and
moved the unit's headquarters out of Des Moines. Much of the building is
now
vacant.

The case is Conseco Annuity Assurance v. Trostel, 98-1796.

Oct/04/1999 10:15

( C ) Copyright 1999 Bloomberg L.P.



Any redistribution of Bloomberg content, including by framing or
similar means, is expressly prohibited without the prior written consent
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Bloomberg L.P. Any reference to the material must be properly
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News.

THX-1138previous post#1546410/04/99; 23:07:21

Got that off of Kitco.

By the way, how would someone go about inserting a gold clause into a house or car sale?
And if you actually had someoen pay you gold what would be the reporting requirements?
Do you report it using the coin face value (US Eagles $50) or spot price?

Chris PowellPanic buying in Australia#1546510/04/99; 23:09:30

http://www.egroups.com/group/gata/233.html?

The gold wildfire sweeps the world.
Simply Memegatron - re: USA Bashing#1546610/04/99; 23:20:02

It sounds, to me, like sibling rivalry. Little brother is tired of getting picked on by big brother, and worse, sometimes even having to wear his handme downs! So little brother takes small revenges whenever he can. Nothing serious. Big brother knows it's only a matter of time and potential before everything is equalized, so he taunts little brother while he still can. (Little Brother is not so little anymore!)
But if you take a look around the neighborhood, Little Brother and Big Brother are more like each other, and closer in basic ideals, than anyone else in the world. They grew up together. They may disagree on a lot of things; but when the chips are down, I believe these brothers (US and Canada) will prove to be each others' best friends.
(Except for Quebec?)

VoyagerCmax - Hello#1546710/04/99; 23:42:28

Yes, I understand that the GPS rollover and Y2K are not related. It was a facetious shot at the extreme Y2K doomsday crowd. Do not have the ability to connect to Internet via any method except by cell phone at sea. Very slow and expensive. Don't use.

Have been reading other posts. Many, many, banks, firms, people, have tremendous loss potential at the rising POG. What kind of counter attack can be expected? Seems that if POG keeps going up, little can be done to prevent a major toilet flushing. Not that they don't deserve it. Any thoughts?

elevator guyCOMEX den of thieves#1546810/04/99; 23:56:34

How come the COMEX traders can demand "X" amount of dollars, when I want to buy something, but now that I want to sell that same thing, they say "no limit orders"
Where is the fairness in that?
Boy is that a one-way rigged game!

But in other news, how do you think we should be setting ourselves up for the coming fall of the DOW, fall of the dollar, rise of the Euro? I guess there is a sea change going on in our economy, that will last through 2000, and hang around for years.
Obviously, the safest place to store value is gold. Especially now, and while the dollar slides.
But assuming the dollar doesn't absolutely dry up and blow away, which is reasonable to think that it wont, we can still make profits denominated in dollars. Good profits.
I guess we can short everything that we think will go down.
I'm kinda new to this investment stuff.
Any thoughts out there on this?

Peter AsherSpeak Softly, But Carry a Big Stick!#1546910/05/99; 00:42:26

I think AG is taking a cue from Teddy Roosevelt and doing just that to keep a lid on things.

To put the brakes on "Irrational exuberance" by raising interest rates would crash the economy. The solution is to apply the brakes by hinting, threatening or "Taking a bias towards" raising interest rates. This way, he keeps a lid on the Market without pulling the plug on liquidity.

The action by the Euro CB's joined by Japan could be a deliberate attempt to back Greenspan (And the Dollar) into a corner. The breakout in Gold makes it all the more disastrous if he were to raise rates.

OROGood article#1547010/05/99; 01:44:59

http://www.egroups.com/group/gata/231.html?

Highlights:
The rapid growth of these fractional reserve accounts
in recent years has had the effect of expanding the
supply of gold traded in spot markets much faster than
can be accounted for by new mine production and
mobilization of central bank reserves. Unlike non-
monetary commodities, the injection of new physical
supplies of gold into the market is subjected to a
multiplier effect, where each ounce of gold stored in
London creates several ounces worth of claims against
gold by successive deposits and loans. Undoubtedly this
leveraging of leased central bank gold via bullion
banking has been a major factor in depressing gold
prices.
The mere existence of market conditions such as we are
observing today may prompt the ordinary members of the
LBMA to lose confidence in the LBMA's market makers and
clearing members and demand redemption. If that
happens, the issuers of "paper gold" could be facing
ruin, and the unbacked "paper gold" itself will vanish.

CanuckTo Peter A. and all#1547110/05/99; 03:51:20

So if A.G. does not raise rates and only hints of that what impact does this have on the POG?

I see spot at 328 this am, perhaps there is enough momentum now that A.G. nor the good Lord can't stop it now.

Should be a tough day for 'shorts' today.

Thoughts?

GoldspoonLimit Up!#1547210/05/99; 04:05:44

Let me seee..... you limited up in Tokeo last night..Good Dog Spot! Now for London..... Jump, Boy Jump!!!
Goldspoon@Canuck#1547310/05/99; 04:19:38

My Op.. Greenspan is in a box... He must raise rates now or risk capital flight that supports the debt into Gold. Add the need to make it more costly to pull cash out for 2kay.
A good ole October correction (not crash) is really what the market needs at this point.
As my Mom would say when i was a kid and i got to antsy...Son, what you need is a good workin'. She then proceeded to fill my mouth with casteroil....sure took the fight out of me...Even "If" you didn't have this gold thing... somebody needs to throw some cold water on the market to get them to sober up before they fly to close to the sun and the wax melts.......
But i'm not Greenspan......

CanuckNervous?#1547410/05/99; 04:23:44

I just read last nights posts and links, is this ever getting messy.

I've got to think CB's are going to hold gold now, EU consortium, IMHO, is holding because ot their belief that gold will be the final reserve holding when the dust settles. Who and why would anyone dump gold now to bring down the price?

GoldspoonTime for Some Fun!! #1547510/05/99; 04:30:21

Let's start a guessing pool for Comex spot close as posted by USAGOLD.....Me first...$332.27.... Closest guess get's bragin rites.....Guesses must be posted before the Comex opens to count.....
OROReposts and the great MOZEL#1547610/05/99; 04:33:50

Date: Tue Oct 05 1999 06:32
ORO (@Mozel - Currency war) ID#71231:
Copyright © 1999 ORO All rights reserved
Mozel - Excellent thinking in Mozelland, how does one gain entry to Mozelland?
1. Saving the LBMA was something that the Europeans seemed to be willing to forgo ( see ANOTHER commentary ) . Considering that UK was in hock to the EU, has it been the joining of the UK with the EU action that allowed it to keep the LBMA? Was the EU also interested in the use of UKs large $ reserves?
2. The sudden disappearance of ANOTHER, FOA and most heavy thinkers save SteveH from USAGOLD through this turmoil seems to indicate that a job has been finished there. Alternatively, it could be that there is some great business and policy work to be finished - regarding the change of circumstances with the UK changing allegiance. If these are truly wired in, is this the reason?
3. Thinking through the issues that must have been dealt with in assembling the EU, it becomes obvious what it is that national currencies and their associated bank debt can do to distort economic relationships. In putting themselves in one salad bowl, the EU members were obviously made aware of the degree of US segniorage and the fact that goods are traded with the US in return for obligations that ammount to an assumption that Americans will decide to honor when Europeans or Japanese try to cash in - when in the past these were never honored. This obviously would be tolerated only as long as the US is offering something sufficiently valuable in return - i.e. defense.
A few things changed since the cold war ended, or even before. ( 1 ) The US, UK, Australia and Canada have lost the mission which allowed them to print their way into prosperity. ( 2 ) The world at large is so much more developed that the US is just too small in relation to be able to provide the currency of trade without heavy trade deficits that plunder the world, while impoverishing everyone. ( 3 ) The web of debt the US created in the 70s to enslave the emerging economies of the world had come to the point of deflationary collapse that made default impossible to escape. With their default would have come the end of subservience of Africa, South America and Asia, and of the international value of the $ and the reserves of the EU members. By the end of 98 Emerging market debt had fallen by more than 1/4, probably 1/3. The Emerging market debt trap fell appart, and EU and Japan could just plain wipe out this debt in order to eliminate $ demand and the source of the US' prosperity. Do you think this was it?
4. The elimination of the power of $ debt must have been the key to eliminating the $ tax on international trade. This must have been the reasoning for lowering the interest rates on the key currencies outside the EU ( including gold ) to near 0 soon after the Maastricht treaty. This put the US itself in a debt trap identical to the one it put the emerging markets in, no?
5. Relating to the political thinking of the EU - you put up the issue of gold as a tool of national and individual sovereignty. Is it the control of one's currency being the key? or is it the issue of Europe coming to the conclusion that national currencies are means of escaping economic consequences of trade imbalances? Particularly when through perpetuation of debt, the currency of the US allowed it preferrential pricing for commodities that Europe and Japan could not obtain gratis - in return for printing $. ANOTHER made a big deal of this issue.
( Much of the Purchasing Power Parity discrepancy between the US and the EU/Japan can be explained by this fact, and the fact that they are $ creditors, only a portion is actually related to the inefficiencies of their markets )
6. Have the "powers that be" relized that some control must be given up anyway, because of the internet? As the issue of the sovereignty of the individual transcending all borders and the yoke of national currencies was just a question of time?
Finally - what do you think of the oil for gold deals and the participation of the oil countries in the scheme?
I suspect that Russia's stopping the sales of gold after its spy at the LBMA was outed was no coincidence. Nor their doing energy deals with Europe in Euro. I think the ability to collapse the LBMA and thereby stop the supply of oil to the US and its banker allies was a crucial issue.

Thank you.

PS Thoughts of South African complicity with Europe. Might one say that the SAf had found out through us here and at USAGOLD, what a farce the economic miracle of the US really was, and most significantly - that the US was trading SAf gold for Arab oil and through this were obtaining all other commodities and Asia's manufactured goods? Could the understanding of this be behind the recent spate of political killings in SAf ( particularly the attempt on the Mines Minister?

Date: Tue Oct 05 1999 05:15
mozel (@Cap'n Kirk @Midas @What's It all About, Alphie ?) ID#153110:
Copyright © 1999 mozel/Kitco Inc. All rights reserved
@Capn' Kirk Unsolicited advice: Let the nearby ignorant and their mentors, like sleeping dogs, lie.

@Midas "Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?" Hm. Well, USG sponsored a couple of generations of "future leaders" to be "eddicated" in the renowned indoctrination camps of the Ivy League and copy cat "institutions of hirer learning". This dumbdown by degree program and bribes and UN postings and other inducements enabled USG to bring into bondage a great portion of South America and parts of Asia and Africa by means of debt obligations denominated in greenbacks. The amount of worldwide debt is a big change from past times. Human and Mother Nature have not changed.

Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?" What sudden about turn ? What is the unit of account in the EU ?

@Alphie As Ah have sayed befoah, gold is the sine qua non of Sovereignty. Central Banks are the instrumentalities of government. The EU Bankspeak on gold was proxy for the Sovereigns' speaking themselves.
Gold's apolitical empowerment of Sovereighty constitutes its national and individual utility. There is no political independence without monetary independence. What nations want today, people within nations will want tomorrow.
The United States fought its War of Independence mostly on bills of credit. In the aftermath "not worth a Continental" became a byword. The United States fought the Cold War of bills of credit. We are in the aftermath. The difference between then and now is that supposedly the United States has 8,000 tons of gold with which to re-establish its credit. The similarity between then and now is that the domestic holders of continental greenbacks are holding nothing but printed paper.

Date: Tue Oct 05 1999 02:13
Midas (Mozel) ID#165282:
Copyright © 1999 Midas/Kitco Inc. All rights reserved
"The culturlal memory of what is money has been erased."

This seems to be the case in North America, where, although there are firm believers here at Kitco, I don't believe there is anywhere near the culteral depth of confidence in gold as there is in most older cultures.

Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?

Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?

Very interested in your thoughts on these questions.

Date: Tue Oct 05 1999 01:55
mozel (@Thoughts From Mozelland) ID#153110:
Copyright © 1999 mozel/Kitco Inc. All rights reserved
The international exchange rate for gold is the LBMA rate. UK is pivot for gold. BOE "auctions" enough gold to cure LBMA or, in other words, to prevent LBMA failure in a gold rush. This also makes Uncle across the pond happy for the temporary relief provided. UK can now let gold run.
The Europeans announced sales of no more than X tons per year for the next five years. This gold is already in the market as leased gold. Over the next five years the existing European gold leases will be refused rollover. Very orderly.
Somebody forgot to tell the Paki's. Karachi was crushed.
Is Hong Kong in trouble ?
Are the African miners in trouble ? Or part of the great European gold ambuscade ? Who will be buying defaulting miners ?
The only entity which can save the Comex is the Federal Reserve. It has the authority, the paper, and the gold to do it.
But, even if Comex goes the way of Karachi, it matters not except to the US banking system.
What matters is that LBMA stays open. The UK have to keep LBMA open if they wish to be the gold center for Europe. Default in London will come from default of forward sold mine contracts, contracts sold by those small to medium US mines which the US banks are openly discussing foreclosing upon. How many of those contracts were sold in London and whether or not the Federal Reserve will order the banks not to foreclose on mines under water in the US and Canada will determine whether or not LBMA will stay open. The unhedged strong shall devour the weak.
The news smudgeout on the gold market is a demonstration of the power of the government over the broadcasters and of the mind control power of the broadcasters over the masses. Notice who is solicited for comment. The nature of their comments identify people in the know who have consented to participate in concealment. It may mean gold can be revalued without shaking the confidence of people. Because the cultural memory of what is money has been erased.
You say this much concealment is not possible. I tell you look into the secrets being kept by the lawyers, attorneys, and judges as a condition of their practice of law. Those who grant the permission to practice, control the practice, the speech, and even the thought of the practitioners. The same control exists over bankers and brokers and even broadcasters.
Whos will come step up to the gold line of truth or consequences first, the Japanese or the Americans ?

RossLTime for Some Fun!! #1547710/05/99; 04:37:11

Goldspoon, I'll say $335.50
Goldspoon@ORO#1547810/05/99; 04:59:59

What are the chances this was all kept seceret from the FED? i would think if the Russians knew it The USA would have been aware also?
The old money ties of the UK to the US is well known. Has the actions of the Fed also been a well scripted part in this play? If so what is the twist in the final act of this conspiracy of nations?
If the US is not a willing partner in this, LOOK for a counter measure.....After all it takes soooo long for this to unfold a defence surely was prepared..... any ideas as to what it might be??

leonardthe us dol.#1547910/05/99; 05:00:26

can a doller devaluation be close.
GoldspoonUSA Counter Measures..... my guess#1548010/05/99; 05:15:07

Secret stockpiling of Gold and Silver by the USA as prices were falling.... a planned return to a gold backed dollar....it's new value.... $50 to the ounce of Gold, the face value of Gold Eagles and one Dollar to the ounce of Silver, the face value of Silver Eagles......any other wild ideas??
GoldspoonSpot ...jumped to 334 moments ago from 324....#1548110/05/99; 05:20:44

Good Dog!
Goldfly, you've trained him well.....

THX-1138Guess on COMEX spot close#1548210/05/99; 05:35:05

$342
Mr GreshamOro/Mozel#1548310/05/99; 05:35:12

ORO --

You have richly rewarded my insomnia -- thanks!

How the mighty are fallen!

Martin Luther King, Jr.: "The arc of the moral universe bends long, but it bends toward justice." Let us see some justice in our lifetimes, I pray.

When the printer's done, off to bed with "Reposts and the Great Mozel". But I won't sleep. 30+ years of Economics, and it feels like this year -- no, this WEEK -- I'm just starting to get "this picture." (Ah, SIX beautiful pages to read...)

(Has Oliver Stone bought the movie rights yet? Will Donald Sutherland play ANOTHER? Gene Hackman FOA? Stay tuned...)

GoldspoonSpot Colse...#1548410/05/99; 05:39:19

Spot now at 336....who'll guess 350???
SteveHDec gold a whopping ...#1548510/05/99; 05:50:37

$338.0000000000!!!!!!!!!!!!!!!!!!! Up $20.00!!!!!!!!!!

(...some NY folks are going to have a fit)

AREMHELP#1548610/05/99; 06:10:49

http://www.kitco.com/gold.graph.html

The 24 hour spot gold chart of Kitco at the above link is stalled. Is there some other source of this information?
ss of nepChart#1548710/05/99; 06:17:53

http://www.quote.com/livechartscom/livechart?symbols=gc99z


GoldspoonAREM#1548810/05/99; 06:18:57

Try this it works for me... thanks Gandalf!!

Gandalf the White (10/04/99; 19:08:05MDT - Msg ID:15416)
CoinGuy's Question
www.forex.freeservers.com/main2.html
Spot the Dog is the fictious "present" price of Gold! There are many reporting boards and in many values other that US$! --- the best one that I have found is at the forex board which is setup for currancy exchange quotes.
BUT if you click GLD= and change the time to MIN and click "request" -- WALLA WALLA bing bang !!
<;-)

Black BladeFun and games at Kitco#1548910/05/99; 06:22:47

Hey all, check out platinum at Kitco! $3.00/ounce, down $403! It's a fire sale! What other strange goofs are going to occur at that site next? I know, it's the anti-platinum cabal! This is going to be one very weird day I'm afraid. Go gold!
leonard(No Subject)#1549010/05/99; 06:24:03

Click here: Listen To Don Coxe latest call, very interasting
RossLChange my guess#1549110/05/99; 06:25:20

I want to change my guess to $365.50
leonarddon cox's latest call#1549210/05/99; 06:28:38

http://webevents.broadcast.com/accutel/jonesheward/ very interasting
scpManipulation prior to Fed Announcement#1549310/05/99; 07:12:59

They must crush gold and support the dollar prior to announcing that rates remain unchanged. I think they will switch the bias towards tightening. We may get a pull-back here.
The ScotGold VS Platinum#1549410/05/99; 07:34:46

All, have any of you given thought to Gold passing Platinum and what that might mean. Seems a real possibility to me.
The Scot

CoinGuyfed rate...#1549510/05/99; 08:04:00

I'm going out on a limb here, the fed raises rates .25 to curb the market. Otherwise, it's another bout of irrational exuberance. I think AG tries to put a curb on market activity, without pricking the bubble. Spot jumps to 336.50, just my .02.

coinguy

USAGOLDToday's Gold Report: The Short & Sweet of Day Seven of the Big Breakout#1549610/05/99; 08:57:17

MARKET REPORT (10/5/99): Day Seven of the Big Breakout....Gold up $8.50 at
$325 after hitting $333 in Asian and European trading overnight, and $339 in an early
morning blitz in Manhattan ........... "TOCOM must be suffering some type of short
squeeze as COMEX has seen," commented one broker to FWN. "Their liquidity is pretty
thin too."We're seeing the reemergence of the Asian consumer as a buyer, and Korean
buying is way up now," the broker added.*...............Since the overnight short-covering
blitzkrieg, the price has settled a bit. In a late day conversation with LFGs Leonard Kaplan,
he mentioned to me that someone offered ten tons of gold late yesterday and it was swept
up by a single buyer "about 30 seconds after it was offered."..........The buyer was
believed to be covering a short position. I wouldn't think that the fate of those ten tons
marks an end to the driving needs in the gold market. And then there's the fate of the all
those unhedged calls we talked about yesterday adding uncertainly to an already volatile
situation.**.............. Robert Rubin returned to Wall Street yesterday to say: "Just as they
reap the benefits of their decisions, private creditors and investors must also bear the risk of
failure,'' Rubin told members of the Bond Market Association at a gala dinner. "Financial
markets have fluctuated between extremes and this should be a sobering warning,'' he
added.............While most of Wall Street is thinking "no interest rate increase
announcement" after today's FOMC meeting; they also have to know that the market is
taking interest rates higher whether the Fed wants to or not. The counter-party risks
associated with the run-up in gold has to have the Fed worried. They won't make a public
issue of raising rates now for that reason; they'll let the market take them up so the Federal
Reserve can escape shouldering the blame. The net result though will still be an equities
market correction................ "Option market traders," says Helen McCaffrey of N.M.
Rothschild & Son, "continue to stare in disbelief at volatilities which have spiked to
extraordinary levels over the past week.'' She went on to say that "people" are a "little bit
concerned" that we might see further short covering from producers a la Ashanti's 80%
hedge book unwinding last week.............Gold lease rates are coming down but the return
to the 4% level hasn't seemed to cool the gold market. We think lease rates might bottom
here the evidence of which would send a new shockwave through the bullion bank
community...............XAU closed yesterday at 88.81 up 5.90. Gold stocks are regaining
their shine. I've done well with my Gold Fields.................Of the 2000 tons to be sold
by European banks over the next five years it appears that 1300 of it will be Swiss. Bridge
News quotes Swiss National Bank spokesman Werner Abegg as saying: "The SNB will
sell the 1,300 tonnes as part of the common European central bank sales agreement," he
said. Presumably that "agreement" is the one referred to in the bombshell announcement of
September 26, 1999 -- now known as Gold Sunday..............Heard on the Internet: The
cry of the bulls -- "See you at $400!".............That's it for today, my fellow goldmeisters.
Happy Trails until we meet again. We'll leave up the Big Breakout links for awhile (See
below) for all the newcomers. Welcome aboard to all those trying to find out what in the
world is happening in the gold market! Please also see the offer for a free sample copy of
our newsletter News & Views below............MK

* Those of you who regularly visit this page know that we have predicted the return of the Asian buyer (a
singularly important ingredient to the long term gold mix) since the days of the Asian contagion last year.
All you have to do is look at the price of gold in any of those currencies to know the reason why. Asians
will buy gold to protect themselves against any future manifestations of the contagion. They have been
converted to goldmeister status for life. Will Americans follow suit? Let's hope that any lessons learned are
before, not after, the fact.

**Those of you enamored with Elliott analysis might take an interest in a thumbnail Elliott sketch we ran
in the office yesterday complete with some Fibonacci ratio application. I mentioned to George Cooper, our
resident techie, that he could now take his gold charts out again because with a relatively free market now in
place -- thanks to the European central bankers -- technical analysis in gold will regain its uses. It seems
that wave one has taken us from $255 to $329. Then we had the wave two correction down to $301 area
(.38 of upmove) which matched beautifully with the Golden section retracement predicted by Prechter in his
early book, now we are in a three wave -- the long wave both in duration and price escalation. It is not
surprising that many technical analysts are putting strong support at $301. One waves are erratic, often
unpredictable, fast and furious; two's the same. Threes are longer, more stable in character and that's what we
think we are now in. I'm sure those of you who follow the Elliott model will have your own version of
this, but that's the way we see it. Any of you who have done the Wave three math work that would lead you
to a top end prediction are encouraged to offer it either at the FORUM or by e-mail and we will take a look
at it.

That's it for now, fellow goldmeisters. Have a good day.

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

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

TownCrierLessons from Recent Global Financial Crises--Future financial system prone to crises#1549710/05/99; 09:13:58

http://www.kc.frb.org/spch&bio/finanreg.htm

Thomas M. Hoenig, President of Federal Reserve Bank of Kansas City, presented a speech to the Chicago Fed's conference on "Lessons from Recent Global Financial Crises"

Some highlights:

"Over the past two decades, we have seen an increased incidence of financial crises, both in industrialized countries and in emerging market economies. These crises have not only disrupted the financial systems in affected countries but also have had severe effects on economic activity. Appropriately, much of the focus of this conference is on understanding the causes of these crises and on developing appropriate public policy responses. ... I think it is clear that we cannot return to, and probably do not want to return to, the highly regulated and segmented financial systems of the past. We do want to give greater scope to the market to guide the evolution of the financial system. ...

Moreover, as we proceed, we need to recognize the new realities of the financial landscape. Financial institutions will continue to increase in size, traditional boundaries between intermediaries will continue to disappear, new and more complex financial products will be developed, and cross-border linkages will increase. ... In this environment, it is clear that a redesign of regulatory policies will center on two questions: how can we make greater use of market discipline, and how can we adapt regulation and supervisory procedures to the new realities? In the final analysis, the financial system of the future is likely to be more vibrant and efficient but, also, more prone to occasional crises.

Over the past two decades, a large number of countries have experienced a serious financial crisis that has weakened the banking system, reduced credit availability, and slowed economic growth. ... many of these crises have spilled over to other countries through currency and asset markets and through disruption of trade. ... In many instances, a crisis was preceded by a rapid expansion in credit availability that was in turn associated with a prior effort to liberalize the financial system.

We recognize that there is no going back to a framework of segmented financial markets and tight regulatory control over deposit rates, bank expansion, and banking activities. And, we acknowledge the need to give greater scope to market forces in guiding the evolution of the financial system.

The difficulty with all this, however, is that we now operate in an environment with larger and more complex financial institutions whose potential failure threatens the solvency of existing insurance funds and may pose risks to the payments system. Moreover, in today's freewheeling financial markets, herd mentality may apply market discipline abruptly and at inconvenient times, punishing institutions and individual consumers rather than controlling their risk taking. Thus, while we wish to enjoy the benefits of a market-driven financial system, we may not be comfortable with the consequences when markets are disrupted or when financial institutions seem likely to fail. Few supervisory authorities will want to be responsible for the type of economic disruption recently seen in Southeast Asia and even fewer will want to risk starting a global financial crisis.

Market discipline is clearly necessary if our financial system is to have the appropriate incentives, and disincentives, guiding its evolution and development.
We should also recognize, though, that our continued reliance on public safety nets and "too big to fail" policies will necessarily temper the use of market discipline. In fact, it will be difficult to escape these limitations, given the externalities that exist in banking. Public protection may also be needed because of the learning curve that market participants and regulators will face in our rapidly changing financial environment. Therefore, the critical question is not whether we should move toward greater market discipline, to which the answer is yes. Instead, we must ask ourselves how we can make market discipline more effective within the context of public safety nets. ...

As we reestablish this equilibrium [between market and regulatory discipline], the number of crises should diminish. However, since the new equilibrium will likely place more emphasis on allowing market forces to guide the development of the financial system, realistically, we are likely to experience somewhat more crises than the historical norm. This is simply the result of allowing markets to play a larger role in the financial system."
---
Do yo get the sense that times are changing? Whatever the endgame may be, gold will always get you comfortably through the transition.

JourneymanDebt Relief#1549810/05/99; 09:19:11

Clinton & Tony Blair both signed on to third world, espec. African "debt relief." What's the REAL reason behind this? Journeyman
TownCrierFed hopes Y2K won't get in way of monetary policy#1549910/05/99; 09:42:51

http://biz.yahoo.com/rf/991004/1h.html

The Fed says they don't anticipate Y2K to affect monetary policy in any way, though as we reported a few weeks ago, Fed Governor Edward Kelley said, "The Federal Reserve will remain prepared at all times, as it has in the past, to do whatever it deems to be necessary to have in place the best possible monetary policy."

The three-month London Interbank Offered Rate (LIBOR) was raised by 57 basis points last week (near 6.08 percent) in what was seen as a nod to Y2K anxiety. Due to Y2K anxiety, Richard Berner, chief economist at Morgan Stanley Dean Witter said, "People are willing to pay up for liquidity."

TownCrierRobert Rubin tells investors they must bear risks#1550010/05/99; 10:00:11

http://biz.yahoo.com/rf/991004/bcv.html

Often, there is great truths hidden in humor. In a lighter moment during a speech last night to the Bond Market Association, ex-SecTreas Robert Rubin said he has enjoyed taking some time off, and found a major benefit to private life, saying "While I would argue my points in Washington, in the private sector I could just go short." The audience laughed, but my friends, that is SOOO true. As a public official in that position you jawbone positives because its your job...the truthful signals you send when you know the reality is at odds with the administration's desires must be done subtly. Such as the infamous statement of Rubin and Summmers, "a strong dollar remains in the best interest of the United States." That's may be true enough, but you'll notice it contains no promise that the dollar can be kept that way.
Golden Calfgold passing PL#1550110/05/99; 10:02:46

Dear Mr. Scot......
It's not impossible, but it's highly unlikely.
Whenever they came close there was a sudden
beakout and platinum far outpaced gold.

Unless something basically has changed, I would
expect the same thing to occur in the near future.

It is an intersting market though.....no?

I'm expecting a correction in this fast runup.
then in November back to going to new highs....
Gold that is, and of course pl as well

AELGold, Thoughts from a retired Metals trader#1550210/05/99; 10:03:02

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001WUU

interesting tutorial and thread on the TB2000 site
TownCrierPredictions of the FOMC actions today#1550310/05/99; 10:14:22

http://biz.yahoo.com/rf/991005/xf.html

Analysts expect the Fed to hold steady on rates but to adopt a tightening bias. After today, Nov. 16 and Dec. 21 are the two remaining opportunities this year for the FOMC to adjust monetary policy at regularly scheduled meetings.
grannyGold Pool Safety (Question)#1550410/05/99; 10:25:47

Howdy all. Does Granny feel fortunate she "discovered" this stable of BRILLIANCE???? You bet!!! Thank you for being.

Hope you don't mind her making so much use of your wisdom. Just know that you are helping to protect her(and many other's) fanny(s). AND she is very appreciative!!!!!(Although she may be "master" in some areas she is very "novice" in this area. Know that she is passing on this extended kindness even more these days.)

QUESTION: Granny has a considerable amount (for Granny) of physical gold located in a "pool" with a large, well known, Financial Management Corporation. It is part of her Self-Employed Pension Profit Sharing Fund and she cannot touch it until after October 15th, 1999. She had few choices in terms of type of gold that would qualify for non-taxable funds; "pool" was fast, easy, and qualified. (Being in the highest tax bracket, a maximum allowed contribution to this fund keeps a significant amount of $'s out of Uncle Sam's hands and in Granny's pocket-book!! AND Granny is above the age where penalty is assessed for withdrawal of funds.)

Is Granny's "gold" safe for a few more days??? (This is a very reputable organization.) Any advice on how to take personal possession, as soon as she can?

Granny has been caught, as many others have, with a sudden need to be more educated than she is, and little time left to do so. BTW…. Last night's posts were so SURREALISTIC!!!! Granny was wondering if she had slipped over the edge or if it was the other way around.

Be kind to yourself and others.
Hogs and Kusses,
Granny

PH in LAAnother's Disappearance#1550510/05/99; 10:34:12

ORO:

Do I detect a tiny insecurity in your writings on the question of Another's "oil for gold" thesis? You brought it up again with Mozel today and have mentioned it several other times without total conviction.

I recall my own interpretation of the concept when Another offered it long ago. It seemed then more like reference to a general policy of cheap oil in a financial climate that included cheap gold rather than a signed document with definite numerical agreed price/quantity ratios written formally in stone, as it was taken by critics anxious to find flaws in the story to discredit it. It seemed at the time that Another was referring to the economic system as a whole rather than to a formal agreement. Of course, it could be that my own understanding of these concepts, built as they are on very general terms, sought naturally to frame the question (and answer) in these terms. I do recall an instance when FOA referred to the oil for gold idea as one that was never implemented; rather like a threat that had been overhanging the system for some time (even one not necessarily even communicated directly to the West... rather just a theoretical possibility not intended to be lost on the Western powers). Although I commented on it at the time, I did not see an adequate clarification from FOA. It seemed like almost a mental slip on his part.

Are you convinced about Another/FOA being here at USAGold on some sort of mission that seems to have been accomplished, as you implied in your post to Mozel? One of my very first impressions of Another was that his intention was to stimulate the purchase of physical gold. I soon ruled that out in my own mind because I could not see beyond a coin shop owner trying to sell a few more ounces. Even though Michael Kosares had jumped on his writings by publishing "In the Footsteps of Giants" there seemed to be no connection between Another and MK, especially when I compared their respective writing styles. (MK was always very explicit both in public and in private that he was not Another.)

Looking at this question through your writings I still suspect that Another's motive was indeed to stimulate demand for physical. He, as much as anyone, would understand that the stalemate of short sales driving the POG ever lower would be vulnerable at the point that actual physical gold became removed from the game by physical holders. (But it always jsut seemed like a few spooky postings on the internet could hardly hope to accomplish much in the broader scope of things.) In fact, wasn't his claim of huge short overhangs made even before Frank Veneroso's work became public? Another also seemed to understand the situation of the LBMA long before it was common knowledge. He knew about the huge volumes of trading there before the bombshell announcement acknowledging it was released. And I remember him musing long ago to the effect that, "It is a sad thing, this LBMA... It will cease to exist before the coming storm in this new gold market subsides".

In any case, there is little question in my mind that Another/FOA know too much for their participation in this forum to be without purpose. That they do so in order to stimulate their own interest and knowledge seems like a very weak explanation as they contribute far more than they could ever hope to receive back.

Comments and replies: This email address is being protected from spambots. You need JavaScript enabled to view it.

GFD? Any thoughts either public or private?

OROConviction with oil/gold#1550610/05/99; 10:46:01

Not MY insecurity.

I am looking at the making of a convincing argument for others.

The shadow of the oil for gold deals is found in the data. and is enough for me. The evidence you need to convince people about this is tantamount to a baseball bat to the head. People may accept the idea that the $ may one day in the future be considered worthless. That it has been so for 30 years and was completely skirted in the last 10 is something else.

PhosPH in LA#1550710/05/99; 11:19:39

I am sure you are right in saying FOA/Another have been here to stimulate gold buying. But I believe their motives are altruistic. They see a major decline in the US fiat money system on the horizon and have been warning people here to be ready for it. The best way is to return to the historic store of wealth, gold. Paper is paper, regardless of whose face is on it and the more you print the less valuable it becomes. The US has exported its debt for many years now to the benefit of its own citizens. 30 trillion US IOUs out there now, I think I read.

I hope FOA/Another have not left us but I suspect with events moving at a faster pace now they are probably very busy with little or no time to devote to the internet.

PH in LAIdentity Crisis#1550810/05/99; 11:21:27

ORO:

Are you and Mozel the same person? Or would that be a personal question?

PH in LAReply to Phos#1550910/05/99; 11:25:56

Phos:

With events moving at a faster pace now they are undoubtedly very busy with more time than ever spent on the internet (keeping a finger on the pulse, as it were).

I, too, hope they will return at their earliest opportunity.

Cavan ManPH in LA#1551010/05/99; 11:28:09

With so much tumult in the gold markets , I would surmise that at this particular juncture, FOA and Another et al are probably very involved with the responsibilities of their respective careers. I do not believe they are gone for good.

MK is Another? Ha. I have met him personally. While it is difficult to trust anyone these days, I would and do trust him. He is a very successful man with no good reason to ruin his name by perpetuating fraud here or anywhere for that matter. I don't know him well but this I can tell you; he is an honorable man.

Good thoughts from you sir. Could it be that these two gentlemen (FOA/Another) are motivated simply by good works and intentions? Hard to believe in this day and age!

The analysis corroborating by ORO is very compelling. We shall see.

If you owned vast amounts of precious resources in a mostly uninhabitable part of the world, would you trade for "promises" or, if you had a choice, would you monetize gold to a certain extent vis a vis the Euro and in the process.

That's the question to be asked.

LeighPH, Phos#1551110/05/99; 11:31:06

Dear PH and Phos: Remember what FOA said as he signed off on Friday night:

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

OROAnother FOA motivations#1551210/05/99; 11:33:03

Judging from the stares of incredulity I got when recounting this story and reviewing its implications with knowledgeable people who are involved in the financial markets, I would say they needed to have a place to send people to look at the picture in some detail without telling the whole story. They needed a place to find out how people would react.
The anger I found when Americans were plopped into ANOTHER's world of hard reality in mystic images as would be given by the old sage, was no short of amazing. "Nuke 'em" was not a rare response, it was the first response. Americans would rather kill en masse rather than live on the same plane with the rest of the world. Americans seemed to be more enamored of the illusion of the $ than of the actual lives of people in other lands.
After a while, the anger subsides and people start thinking differently, they suspect everything floated by the government. The thinking in terms of dollars remains, but the certainty is gone. They need a new way of thinking, because these ideas created a void and there was no acceptable replacement.

Cavan ManORO#1551310/05/99; 11:33:26

From one "average, boring, midwestern guy" to (perhaps) another........thanks for your presence here.
Cavan ManORO#1551410/05/99; 11:40:58

We live here in a very sick culture. This is not the same country I have read so much about in the history books.
OROPh in LA#1551510/05/99; 11:40:59

No, I am not Mozel.

Mozel continued working out his understanding of economic reality as presented by Mises and Hayek, and sought more and new evidence for the foibles of government in the monetary and political world. I abandoned this pursuit for nearly twenty years. I have come back to it over the last few years but have alot of reading to do to refresh my memory and stimulate further thinking.
Mozel is in this daily. It is an old occupation for him.

TownCrierThe new "golden dollar"...close, but no cigar (manganese brass, copper)#1551610/05/99; 11:48:47

US Mint's new dollar coin to contain manganese brass, copper
By Bridge News
Washington--Oct 5--The US Mint announced today that the alloy for itsnew dollar coin will be a 3-layer clad system of manganese brass and copper. A Mint spokesman could not immediately say when the Mint would be issuing a solicitation to procure manganese brass and copper for the new coin, which will replace the Susan B. Anthony coin in early 2000.

The core of the new dollar will contain copper and the outer layer will be manganese brass, the Mint spokesman said. At a press conference in New York, Mint director Philip Diehl said the new alloy has been designed to produce an attractive coin that is golden in color and that matches the electro-magnetic signature and physical specifications (size and weight) of the Susan B. Anthony coin. He said the new coin is expected to be accepted immediately by the thousands of vending and mass transit machines that currently accept the Susan B. Anthony coins.

The "golden dollar" is easily distinguished by sight and touch from both the quarter and the Susan B. Anthony coin. It is gold in color and bears a smooth edge, similar to the nickel, Diehl said. Both the quarter and the Susan B. Anthony coin have ribbed edges. The coin is also distinguishable by its extra-wide border. Diehl added that the one key indication of the future success of the new dollar coin is the growing demand for the Susan B. Anthony. The Mint is now shipping more than 5 million Susan B. Anthony coins every month and the current supply will be depleted before the new golden dollar becomes available in early 2000. To bridge this gap, Diehl said the 1999 Susan B. Anthony are being minted to ensure that consumers who currently use the dollar coins will be able to continue to do so before the golden dollar is launched, said Diehl.
---
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.

Does anyone perceived that the surging demand for the previously scorned "Susan B" might be fueled by Y2K?

OROCavan Man#1551710/05/99; 12:08:28

Yes, a boring midwestern X engineer. But it is an adopted identity, chosen rather than born into.
Golden TruthFED INTEREST RATES!#1551810/05/99; 12:14:26

The FED will not raise interest, COWARDS! Whats the matter afraid of "Crashing" the markets A.G?
Go GOLD go,now is the time to crush the U.S dollar.
GO EURO!!!GO.
They have adopted a bias of tighting which will leave a dark cloud over the markets. Ha Ha Ha Ha Ha !!!!!!!!!!

Peter AsherSell on news !!#1551910/05/99; 12:20:41

Down 100 pts. in three minutes, now rebounding. Imagine if they had raised the interest rate
TownCrierGold reserves: ECB's quarterly revaluation increases gold by €13.234 billion#1552010/05/99; 12:21:55

With the end of the third quarter, the European Central Bank remarked their gold reserves to market value, the value at which the gold will be booked until December 31st. The official valuation of ECB gold reserves increased from last quarter's mark of €114.988 billion to this quarter's value (for the same gold) at €128.222 billion.

It would seem that the central banks have finally found a stable fashion in which to do business. Whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that foreign currency can with much greater speed wipe out those yield-gains and much additional value besides.

Golden TruthMARKETS SWOON DOWN IN MINUTES!!!!!!#1552110/05/99; 12:23:30

BONDS fall, S&P futures down,and the DOW lost 100 points instantly as groans from the trading floor could be heard at the N.Y stock exchange.

Gee really breaks my GOLDENHEART. ;-)

PH in LAGold Certificates#1552210/05/99; 12:26:14

http://www.goldensextant.com/commentary.html#anchor71256

Granny:
Your question about "pool" gold is commented on at the above link.

DDORO - Mindsets#1552310/05/99; 12:37:53

ORO - So true about thinking in the US. But I think it goes even deeper. Our beliefs as a country/culture have become our prison. We don't see how we resist any new thought/belief that counters the status quo. America, the land of the free? Hardly. We the sheeple hold these lies to be self evident. However, the human mind, which creates our experience, is naturally resistant to change. We (our minds) don't change unless emotionally motivated to do so. Literally, the amount of change is directly related to the emotional content of the experience. That's why big life changes are always accompanied by significant emotional (life-changing) events. At the core of the changes we are about to experience is the changing of the mind-sets of a great many people about "how things are". With considerable "luck" we might even transform from "what's in it for me" thinking to something more sustainable for all. Changing is the most difficult thing humans must do. Many of us would rather die than change. This does not bode well for a smooth transition. It will probably be the hardest lesson of this century for the sheeple. Reality may come knocking in a big way. It will probably be a big shock (significant emotional event) when the sheeple's paper falls or the digits disappear into the cyber pit of Y2k. We, I believe, are in the end game of a western mind-set that is about to be turned up side down. Keep up the great work. Best, DD
OROKudlow#1552410/05/99; 12:43:12

Had just seen the Kudlow CNBC commentary.

Looks scared.

Points: (1) Fed should stop being wishy washy, and just say what it needs to say: "we'll keep on fighting for the $". (2) CNBC: mantra, "no inflation". (3) Kudlow Unsaid: CPI is a cooked stew, the tough meat has been softened. (4) Kudlow on Inflationary Reality-also see Pesek article on Volcker- oil prices, commodity indexes, gold, dollar index say $ is not what it used to be. (5) Kudlo time to choose a strong $ (Unsaid that it means weak banks) or a weak dollar and inflation. He preffers the strong $, and suggests the Fed tighten the money supply.
What Kudlow does not seem to understand is that there are no more doors open, all are clogged with $ debt.
1. The tightening of the money supply. The banks are in a liquidity squeeze due to the unwinding of Japanese and Euro deposits, and domestic Y2K withdrawals. The Fed prints money to bail them out. (a) The slightest tightening would destroy the banks and the resulting US recession would kill the $ anyway. It would also increase the number of EM defaults that kill off the future demand for $. (b) Continuing the current policy of "temporary" monetization of bonds and tassled loafers will kill the $. (c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d) Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $. (e) A moratorium on imports can prevent further $ deterioration, but that would cause horrible inflation as the US tries to replace imports.

Peter AsherDD#1552510/05/99; 12:56:25

>>>We the sheeple hold these lies to be self evident. <<<

I love it. Print up some bumper stickers!!

grannyPH in LA Msg ID:15522--Gold Cetificates#1552610/05/99; 12:56:55

Thanks Bunches.

Granny does have a segregated (identified) account and feels somewhat less stressed but won't feel really comfortable until that pretty stuff is right here weighing down the pockets of her apron. Granny doesn't mind, in these times, paying a litte extra for storage and insurance.
......"There are also gold certificate programs in which the gold is held in allocated, segregated or identified accounts, in which event title to the gold rests with the customer, the relationship created is a bailment, and the gold is neither carried on the bank's balance sheet nor available for leasing. These accounts offer the customer greater security but also typically incur higher storage and insurance charges and of course do not pay any interest...(snip).....Private depositors, on the other hand, worry principally about themselves. Should they begin to doubt the soundness of their bullion bankers, they could start an old-fashioned bank panic in the blink of an eye."

Now for those people who do not have segregated (or identified) accounts .... ideas on if they should demand delivery very soon??

More info welcome. Be well.

ORODD - mindsets#1552710/05/99; 12:58:08

The shock of some people I talked to before over the sudden rise in $ POG was something else, for the first time they were truly thinking through what I said. The fear on the phone was palpable. The questions that were asked show that they are now completely lost.
The ScotAnother is with us#1552810/05/99; 13:00:18

I suspect that "ANOTHER" has not abandoned us but is monitoring us closely. With many of his predictions coming true it's time for a little "rest & relaxation".
Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up.
Just kidding (Smile)
Sincerely, The Scot

TownCrierFed leaves rates unchanged, adopts tightening bias#1552910/05/99; 13:00:47

http://biz.yahoo.com/rf/991005/2p.html

Text of FOMC's statement from Reuters.
Buena Fetwo down, two to go!#1553010/05/99; 13:10:32

Gold= breakout (#1) accomplished
Bonds= breakdown!!!!!!(#2) underway
S&P 500= correction/crash (#3) soon to follow
$= meltdown (#4) any moment

I take no joy in the pain that the readjustments in the worlds financial scales is causing. But I do look forward to a short (1-3year period) of greater freedom!
Keep Well!

grannyThe Scot --Another is with us#1553110/05/99; 13:23:19

"...Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up...."
Granny can only dream that she will any time soon have the knowledge possessed by our 'ol Sages!!!! (Not that she isn't a quick study.)She loves walking with GIANTS but can only offer questions, at this time. Hopefully some of her questions will stimulate answers for those who are too meek to ask.

Gandalf the WhiteOK -- Spot -- Time to wakeup again !#1553210/05/99; 13:27:42

RUN and JUMP Spot !
<;-)

DDORO - Fear = Just Prior to the Significant Emotional Event??#1553310/05/99; 13:33:52

ORO - It's amazing, isn't it? We go merrily along filtering out anything that doesn't fit with present perceptions/beliefs and WHOOPS! Reality begins to catch up with mind-set. For anyone who has faced significant adversity or change, I think it's natural that fear is the first responce. We actually have to get to fear before we go into denial, a likely next step. However, as reality pounds on the old coconut, we move more toward acceptance and finally action. Acceptance and action take the fear away...at least most of it. We'll probably go through these steps as individuals and as a culture if things come as unglued as is currently indicated. Keep a close eye on Y2k. 00 may be the final bale of straw on an already flattened camel. Best, DD
GoldflyWell, Spot and Spike came in about an hour ago....#1553410/05/99; 13:37:20

They were out all night and boy- they look dog-tired.

Rrrrrrrrrr....

Oh, sorry Spike, no offence.

They seem, however, to be quite happy, and after devouring their bowls, have settled themselves for a nap by the computer to await the Town Criers report.

I too cannot wait to see this one....

GF

ORODD#1553510/05/99; 13:37:46

I would like to second Peter Asher

>>>We the sheeple hold these lies to be self evident. <<<

Wins the medal of honor for saying of the day, phrase of the week......

NeoGATA on South African Radio#1553610/05/99; 13:52:23

http://196.36.119.130/BusToday.nsf/Current/422567D900452FF842256801006240D7?OpenDocument

Looks like Bill Murphy and GATA are finally gaining the recognition they deserve. Appeared on South Africa's most popular financial news show, Moneyweb. Would recommend this site to anyone seeking REAL information on what is transpiring in SA's financial markets.
TownCrierU.S. congressional study slams IMF accounting#1553710/05/99; 14:37:32

http://biz.yahoo.com/rf/991005/1b.html

A congressionally commissioned report by the General Accounting Office was released this week. It accused the International Monetary Fund of understating its lending capacity through the deduction of $19 billion in liquid reserves to a reserve fund that hasn't been used in over 20 years. It also claimed the IMF may be unprepared for the millennium date change.

This report will surely add fuel to the fire as Congress debates in the coming weeks whether to impose its veto authority in regard to the IMF's intention to revalue a portion of its gold reserves in a scheme to provide debt relief to the world's poorest countries.

TownCrierProspects dim for return to record-low US bond yield#1553810/05/99; 14:53:36

http://biz.yahoo.com/rf/991005/44.html

It was exactly a year ago that U.S. Treasury 30-year bond's reached an all-time low yield of 4.69 percent.

Analysts said it had more to do with flight-to-safety capital flows following a global crisis--including the Russian debt default--than it had to do with economic fundamentals. One analyst said those rates were not sustainable from the very start, and were "artificially low."

Current U.S. 30-year bond rates are 6.168%. By contrast, a recent auction of Brazillian treasuries occurred with a yield of over 22%.

TownCrierHear ye! Hear ye! There is an update to the pages of USAGOLD!#1553910/05/99; 15:20:41

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

THIS WEEK IN GOLD has now been updated with the latest weekly gold market commentary, hot off the press by the World Gold Council. Their staff recounts the events of September 27 - October 1, the exciting and volatile week following the european announcement curbing future gold sales and leasing operations. In the WGC's words, "This agreement marks an unprecedented level of co-ordination among governments about gold reserves and changes the entire market background."

Also in this week's commentary:
"By this time a serious shortage of physical metal was emerging. Gold lease rates, which had been strengthening for the previous two months, suddenly rocketed with the one-month rate soaring above 10% on Wednesday, pushing the market into backwardation (spot prices higher than forward prices)."

Grab your torch to get there at the link above, though you won't need it when you arrive at this well-lit room.

We'll see you when you get back.

TownCrierTimeline of Official Sector gold sales vs gold price#1554010/05/99; 15:50:05

http://www.gold.org/Gra/Statistics/Osgchart.htm

This is a helpful chart for those who think they've missed their gold-buying opportunity. Although the chart shows only recent years, gold is still near 20 year lows, and in truth, the buying opportunity remains for as long as sellers may be found...but at what price? Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.
CanuckIdentities#1554110/05/99; 17:46:12

Often wondered about FOA and Another; even MK and Another.

How does Granny know of 'ol Sage? (15531)

And definitely, Farfel is Stranger!

CanuckET .... Employment numbers#1554210/05/99; 17:48:55

ET,

Remember the '13th of the month theory', to be released first Wednesday of the month, tomorrow.

Thoughts?

CanuckInflation numbers#1554310/05/99; 17:52:00

Does anyone have Sept. PPI and CPI release dates?

I anticipate week of 12th. Please confirm.

Goldspoon***Fun and Games..."Place your Guess!!"***** MUST PLAY!!!#1554410/05/99; 18:15:40

Want to have some fun? Guess what tomorrow's Comex closing price is.... as posted by Townie or USAGOLD... entries must be posted here before this site rolls over to tomorrow...the winner is the person who gets closest to the posted price (over or under is OK, Just be the closest)...
The winner gets the title of "USAGOLD ORICLE FOR A DAY" (braggin rights)..... Good Luck!! but you'll have to beat me..(i'm preety good ya know... handsome and modest too)...


RossL and i played the game this morning just before the Comex opened.... the winner was...well, i don't want to embareass Ross.....

grannyCanuck ..Identities#1554510/05/99; 18:24:57

Howdy All,
Must be a coincidence. Please don't make any more of it than it is ... there is enough excitement and mystery to worry about. Granny doesn't know the'ol Sage you are probably referring to. "Sage" is a common but not too often used word in Granny's vocabulary (rare the human who can qualify). Be well, granny
Back to assemblin storage shelves for you know what ... don't we all wish we could say we needed this much storage for Go*d!!?? ... come to think of it ... this T-paper and green coffee beans might be worth their weight in Go*d in a few months!!)

apdchief@Goldspoon#1554610/05/99; 18:26:43

OK...I'll Play. Tomorrow's the day...limit up...$399.00.
CanuckGoldspoon: Comex close#1554710/05/99; 18:27:58

$343.00
grannyGoldspoon: Comex close#1554810/05/99; 18:31:10

Me too ..... $357
RossLGoldspoon: Comex close on Wed.#1554910/05/99; 18:38:42

OK! I was hit by a spell of irrational exuberance this morning. Tomorrow close is $332.30
YGMFOA & Another and SteveH#1555010/05/99; 18:42:01

I've felt compelled for some time to make a comment or two on the thoughts of these two fine gentlemen and as I post here from time to time I felt it prudent to espouse from my regular chair at the Gold-Eagle forum, and have just done so. Tit for tat for site recomendations.

SteveH--I've also wanted to say I'm very flattered that you felt some of my personal thoughts there were worthy of re-posting here. It helps make the time taken to read & write
personal views more worthwhile. Thanks--YGM

onlychild***Comex close***#1555110/05/99; 18:46:17

I'm in: $336.50
Goldspoon**** i wonder...?...***#1555210/05/99; 18:48:40

Think someone here can out guess that bunch over at KittyCO?
i don't have postin' rights over there....never felt it was worth it....but if someone wants to copy my posts over, well..... it would make thins a bit more interesting wouldn't it???

Goldspoon@RossL...#1555310/05/99; 18:55:43

That's OK Ross..... anybody can make a mistake...bbbBBAAWWWWHHHA!! .....oops...i new i couldn't say that with a straight face..;>}
Cavan ManYGM#1555410/05/99; 19:00:16

Hello. I do not understand the meaning of your last post. Could you clarify please? Thanks.
TanglewildCanuck-PPI_CPI-#1555510/05/99; 19:13:26

I think you may have been asking about October's dates which are PPI on Friday the 15th and the CPI on Monday the 19th.
My guess for tomorrow...a little backing and filling before the next leg up...318.80 at the close.

The BelieverHere we go....?#1555610/05/99; 19:16:35

So...the "money" runs to gold.
We have waited for this a long time...
But will the long awaited move for gold mean
the end for the U.S. dollar?
It is with a cold lump in my belly that I see my faith
in gold being rewarded.
Another is proving to be quite astute...no?
The U.S.A. may be a "changed" place soon enough...

TanglewildCanuck#1555710/05/99; 19:17:58

Oh, just in case....sept's dates were the 10th and the 15th
YGMCavan Man#1555810/05/99; 19:26:41

I'm not sure what you don't understand? Possibly I lost you by mentioning that my comments were made at Gold-Eagle forum? Have you been there? If not I will post the link if you
wish.--YGM

PS: I like BOTH sites equally well and used to post here
quite often but it's hard to have two ongoing group relationships at once so I read here daily and post at Gold-Eagle. Hope this helps.-----YGM.

CmaxVoyager (10/04/99; 23:42:28MDT - Msg ID:15467#1555910/05/99; 19:28:45

Yes Voyager, it seems that we ARE presently witnessing the flushing of your mentioned toilet. Counter attacks? If 10 tons was snatched up on COMEX only 30 seconds after the offer, it would seem that any such tactic would only prove futile and a gross waste of wealth by any organization that attempted. And even then, it was probably only to cover the short.
Thoughts? The parameters of the world gold market have changed (Eurobank announcement).....different rules now....it's a brave new world and we're sailing into uncharted waters (at least in the modern sense). This coupled with Y2K, an immovable deadline breathing down our necks, and you have an event without precedent. I myself look forward to the economic cleansing to come (unfortunately I still have a very large economic interest in the status quo), just as an old forrest NEEDS a brushfire, only this time, I think that this will be the catalyst of worldwide tax reduction, hence worldwide goverment reduction, and ultimately greater liberties. Our internet has given us an unprecedented view and power as individuals, that did not exist but a decade ago. The game is different, just very few people have opened their minds wide enough to see it. All major paradigm changes in history, (of lesser calibur than mentioned above), have all resulted in immediate and violent change of hands of power and wealth. It is in each of our rational best interest to recognize this change, and act accordingly.

Silver TongueTomorrow's closing price#1556010/05/99; 19:44:30

Sorry to be a pessimist but I predict that tomorrow's closing Comex gold price will be $313.90.
TomcatORO#1556110/05/99; 19:52:12

In your post on Kudlow you stated:
"(c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d)
Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $."

Could you explain (c)? I just didn't get it.

Regarding (d), how does increasing interest rates flood the world with dollars? Does the loss in liquidity cause the redemtion of bonds and notes etc.? I thought tightening (raising rates) lessened liquidity and this meant less, not more, dollars.

Still reviewing your post re Mozel. Good stuff.

apdchiefGolden View#1556210/05/99; 19:59:53

PLEASE....not two nights in a row without TC's wisdom!!!!!
SteveHWar#1556310/05/99; 20:01:15

The technical prowess of this gold battle is astonishing. By rights that 4.5 drop should have clobbered this but it bounced back with vengeance. Sides!
Goldspoon*Goldspoon's guess.....*******#1556410/05/99; 20:01:39

Well said Cmax.....

Ross....my contrarrian indicator......(Ok, sorry Ross, love ya man) Platinum up big tomorrow....remember if platinum has a slow day gold ain't goin nowhere much....The big boys telegraph what they are thinkin with the price of platinum...(study this and read em like a book)....hence if Platinum is up big, gold is turned loose to break the 330 resistance level..(OK,..OK...im' gettin to it..sheesh..)
Comex Close, Gold tomorrow...$343.73.....

Cavan ManSPOG#1556510/05/99; 20:02:28

Now $328.
Cavan ManLeigh#1556610/05/99; 20:05:39

Hope you're feelin' better. Mother CM is down tonight. You know the old saying? "A house without a Mother is like a ship without a rudder; a house without a Father is no bother."
SteveHreport#1556710/05/99; 20:07:04

I visited my coin dealer friend. His thoughts (remember he went through the 79'-80' run in gold and silver) were that the public hasn't even become involved in this.

I asked him what would happen when it did.

He said there would be no gold available for a while.

He said there was a ways to go with this one yet, because the public weren't buyers yet, not like in the late 70's.

That's what he said.

SteveHTA#1556810/05/99; 20:15:01

YGM, you deserve the credit. Good piece.

Gold now up (dec that is) $1.00. She is turning. This is the day against night again.

TA shows upper bollinger on 60-minute chart at 334.50. That means if she hits $338 or higher she may track up. Last night it hit $337 or so and reversed (just like a good technical). There appears to be nothing technical about this trading yet, except to define some underlying forces of which we probably can't begin to grasp, not yet anyway.

Onwards.

CmaxAn old, but significant post#1556910/05/99; 20:23:05

Sometimes when one is entering uncharted waters (such as where we are now), it helps to review where you have been. For me, my whole perception of the economic world collapsed in the last days of January 1997, when the LBMA broke silence and made a press release disclosing their daily gold volumes. The following day it was published, I posted the following on Kitco, which was the beginning of a personal odessey and discovery as to the real nature of the world's money system. Now in hindsight, it may seem a little funny, but believe me, it wasn't at the time. We have all come a long way since this day.

Kitco January 31, 1997

HOW HOW WOW....., is this "enlightened" age of information, exist something SO large as loco London?? It has been hidden all this time not by government mandate...but by private enterprise. Selby gives a number of 241,000
tons per year moved through this market; that is 660 TONS PER DAY! And we have been blaming news releases on the Dutch for their little 300 ton sale (during the year) as a major contributing factor in the slump of gold? No way. The "discovery" of loco London, economically, is akin to the discovery of the New World by Columbus. 30 million ounces traded in ONE day (Jan 29)? These are not COMEX numbers....these are numbers of a GOLDEN ALTERNATE CURRENCY, here and NOW. I don't think the world has yet REALLY assimilated what this really means. Goldbugs have been putting the excuse of their plight on old "management" by Central Banks. With these numbers flowing in the previously occulted London Exchange, Central Bank's could not possibly manipulate. Gold then must be acting NOW as a commodity, supply and demand. And the price that we have now, is it's commodity price (rather than manipulated price). And as any commodity, it is subject to the market's perception. Popular economists refer to gold as a dead horse....these are not numbers of an inactive currency. WHEN the masses translate this loco London information, the perception of gold must change dramatically.

After all, this information was only released what....3 days ago? The Central Bank directors must be squirming when they see these numbers. With such incredibly high volume, and great fundamentals, do you REALLY think that this large of a market can allow gold to drop much further? I don't see how. However, we do have a paradox:
Since gold as an alternative currency DOES exist, why is it SO cheap? I remember Ann Rand saying somewhere
that in nature, paradoxes cannot exist......one must recheck their premises. Our PREMISES definitely need some
rechecking now; OR the general market needs to recheck their's. Gold, with this volume (and new information), is
behaving paranormally. Next question is:

What ever prompted the "perfectly" occulted London gold market to go public??

This is against the very nature of it's participants. And against the interests of the Central Bank's and governments.
This London market is no little news...what are their intentions with this release? First thing that comes to mind, is that if I wanted to undermine the very root of fiat currencies, this is exactly the information I would release.

LeighCavan Man#1557010/05/99; 20:25:07

Dear Cavan Man: Thank you for asking about me! I'm actually sicker, so I'm just quietly lurking and reading what you guys write. Hope Mrs. Cavan is feeling better soon.

Town Crier has been very quiet for a couple of days; I hope he's all right. He promised to fill us in on "Three Kings." TC, what was the movie like?

TomcatCmax, YGM, PH in LA#1557110/05/99; 20:25:52

My call for tomorrow is $325.

Cmax: If "the rougher times to come" elevated the awareness and action level of just one percent of the population who then spread the word on the internet then we would have a new and more honest world. During the depression statistics showed that people spent more time at the theater. If we have a depression perhaps more will have time for the internet! The internet can spread more truth and expose more lies faster than any medium in history.

YGM: Like your stuff. Could you post your Gold-Eagle posts over here when you feel it is appropriate?

PH in LA: You might be right about the motives of ANOTHER and FOA. However, rather than focus on who ANOTHER and FOA might be, should we not reflect on who we have become because of them?

Cavan ManSteveH #1557210/05/99; 20:28:41

I exchanged some FRN for Irish Punts today. My first thought was, my, this money really looks funny. Just thinking about it; there is no difference between the two really. Question; why is the Irish pound and the British Pound so "dear" in dollar value?

Here's a point--I've been looking at the US dollar for so very long, I actually think it should be worth more than an Irish Punt or, anything else for that matter. I remember the first time I went to Ireland. I wondered why I gave them 500 and got back 250. Anyway, my point is that a mountain will need to be moved to get people weaned even a little bit off the $ and into some hard assets beholden to none. This thought is from your last post. A friend of mine considers gold ownership a "hobby". Once John Q. Public begins to move in the direction of AU, "Katy bar the door".

onlychildExpert says don't buy stocks for six weeks#1557310/05/99; 20:30:23

http://moneycentral.msn.com/articles/invest/jubak/4749.asp?special=msnnip

This "expert" suggests building a cash position for the next six weeks. He tells us how shaky the market is and outlines the losers. OK so far, but he goes on to state that there is nothing on the rise right now. Has he been in a cave or what?
The BelieverYGM#1557410/05/99; 20:30:52

YGM...So what is this comment?
PH in LABeing all that we can be!#1557510/05/99; 20:36:53

Tomcat:
Just part of the process of assessing whether we have become all that we might think we have... You know, just tryin' to get closer and closer to reality. It's a process that never ends!

Cavan ManTomcat (PH)#1557610/05/99; 20:37:59

I believe Mr. PH espoused a belief in FOA/Another endeavoring to encourage PM ownership earlier today. Am I correct? I don't want to scroll back. If that is so, I ask; what is their motivation? Everyone posting and lurking here who would buy 1000 OZ. would affect the POG in a very small way. Why then? I have a hunch. These two gentlemen are the penultimate insiders. I am playing my hunch.
Cavan ManPH in LA 15575#1557710/05/99; 20:40:14

Yes, indeed!
CmaxTomcat#1557810/05/99; 20:41:20

Tomcat
With the few living brain cells that are still functioning, my basic math tells me that if physical gold to paper gold ratio is 100:1.....and if as you say only 1 percent of the population was elevated to the awareness to act, then the 1 percent of the perceptive population should then hold 100% of the physical gold, no? (smiley thing)

TownCrierAfter the Close: the GOLDEN VIEW from The Tower#1557910/05/99; 20:47:35

The most-watched financial news of the day was whether the Federal Reserve Board's FOMC meeting would result in either a change in lending rates, or an altered bias at the least. The decision was announced today at 2:15 EDT that they voted to leave rates as is (federal funds rate target at 5.25% and discount rate at 4.75%), but that they adopted a policy directive biased toward raising interest rates in the future. Stocks and bonds immediately turned sharply south, and gold, which had always been in positive territory, rebounded from a sag in its earlier highs during its brief remaining trading period.

As reported by TheStreet.com, Dennis Gartman, publisher of The Gartman Letter, suggested that the FOMC members might have gotten a preview the Labor Department's September employment report, (to be released Friday) and if strong it would explain the tightening bias. This seems credible in light of the Fed's press release regarding the FOMC decision in which they say "Nonetheless, the growth of demand has continued to outpace that of supply, as evidenced by a decreasing pool of available workers willing to take jobs." Gartman suggests that scrutiny must now shift to the September PPI and CPI (released mid-October) and to the October jobs report (released November 5) in advance of the FOMC's next meeting on November 16. In an interesting additional note, Gartman says, "But for Y2K, there's no question they would have moved to tighten. They are praying for some slowdown in the numbers that will allow them not to tighten before the end of the year."

At Wall Street's closing bell, the DOW and Nasdaq regained ground from the post-FOMC selloff to finish essentially even on the day, although NYSE decliners outnumbered advancers nearly 4-3, and 145 issues set new 52-week lows while only 54 reached new highs.

The 30-year Bond was the day's biggest basketcase, losing 1-6/32 in price (6.168%), plumbing the depths near its lowest price of the year.

In currencies, the dollar also weakened after the Federal Open Market Committee announcement, probably in reaction to the decline in bonds and stocks. Dollar/yen settled down from an earlier 5-day high of 107.14 to close at ¥106.52 per dollar. The euro/yen reached nearly a month high on the Fed decision as dealers covered shorts and corporate customers bought the euro/dollar. Also a factor is the expectation for a possible euro-rate tightening as the European Central Bank counterpart to the FOMC meets Thursday. The euro settled up at ¥114.41 per euro.

Bridge News gives another thorough report today with comments from traders and dealers on life in the futures pits, so we'll cut away to them shortly. But first, we'll quickly catch you up on spot gold price movement in NY from our last GOLDEN VIEW on Friday. (For those wondering, our absence was due to a long-overdue visit to the Castle (Centennial Precious Metals). We hitched the horses to the wagon and made the long trip from The Tower (which is frankly little more than our humble news outpost here in the endless wilderness of the internet). Believe this meek TownCrier when he says the Castle (CPM) is even more impressive in person than it is over the Net. Thanks go out to Michael for his hospitality while we were in Denver and within his Halls.) Spot prices were last quoted in NY today at $324, up $6.70 over Monday's close of $317.30--which was up $13.30 over Friday's $304 close (which in turn was up $6.30 from Thursday, etc).

NY Precious Metals Review: Dec gold up 2.5%; trims early rally
By Darcy Keith, Bridge News
New York--Oct 5--COMEX Dec gold futures settled up $8.0, or 2.52%, at
$326.0 per ounce, trimming more than half of its early morning gains that
brought Dec to a 2-year high of $339.00. Gold saw fierce gains today in
overnight ACCESS trading, but could not sustain the lofty levels for long
as profit-taking set in during regular COMEX trade.

While most of gold's retracement off its highs came amid the first
hour of trading, further selling pressure emerged following the US Fed's
announcement that it has left interest rates unchanged.
Although most analysts believed the Fed would keep rates unchanged,
there were still some thoughts that they might hike, and such a scenario
could have sent stock markets tumbling and investors fleeing to the safe
haven of gold.

[On the other hand, such nonchalance by the Fed in regard to inflation should send PROACTIVE investors toward gold--to seek its safety while the Fed demonstrates such trivial inflation-fighting stamina. If the Fed were more actively "doing something," these same investors might conceivably shun gold in deference to the Fed; however, that same action by the Fed would surely send both stocks and bonds lower, leaving gold as the only place to be by both proactive AND reactive investors at large. So, where gold temporarily had a huge day in early trading, it settled for simply a "big" day.]

While the Fed kept interest rates unchanged, it also announced that it
had adopted a tightening bias, which may have limited the downward
reaction in the gold market.
According to a number of sources, a large gold transaction took place
in ACCESS trading late Monday above the market price at that time, and
this helped to spur further buying interest in Asia and Europe overnight.
One dealer said some 10 tonnes of gold, or 3,500 contracts, was offered at
$321, when spot gold was hovering close to $315. A buyer--rumored to be in
desperate need of short-covering--was found, the sources said.
Others said the sudden move in gold prices overnight was related to
options plays, as well as many rumors making the rounds, including talk
that a major gold producer has started to embark on programs of hedge
restructuring or buy-backs.
The only confirmed development, however, was that Ashanti Goldfields
has been left with an obligation to pay margin calls to its gold-hedging
counterparties because of the recent huge rise in the gold price. Ashanti
said it has entered an arrangement with its hedging partners for
continuing support.

Some players said, however, it was a sudden rush of short-covering in
an otherwise illiquid market helping gold to post its overnight gains.
"TOCOM must be suffering some type of short squeeze as COMEX has
seen," commented one broker. "Their liquidity is pretty thin too."
"We're seeing the reemergence of the Asian consumer as a buyer, and
Korean buying is way up now," the broker added.
More of this short-covering and options activity in gold--both
overseas and in the US--is seen continuing.
"I still think there's a whole lot of shorts," said Leonard Kaplan,
chief bullion dealer with LFG Bullion Services. "Now that we're moving
higher and higher, it is delta hedging of the options that's driving the
marketplace."
Vanessa Motto, analyst with CPM Group, said the rally is primarily
being driven by short-covering, rather than a lot of fresh long positions
being put on. "A lot of people are waiting to see
how this all shakes out before taking fresh positions," she said.
Continuing to lend support, added Kaplan, are firm lease rates. This
morning, 1-month lease rates were seen around 4.60%, which is down
slightly from 5.00-5.50% Monday, but still far above lease rates of just 1
month ago.

[currently the gold lease rates are:
1-month 4.4220%
2-month 4.5000%
3-month 4.8800%
6-month 5.0660%
12-mnth 5.1210%....]

Doris Hildebrandt, gold dealer with Toronto Dominion Bank in Toronto,
said that spot gold jumped very quickly overnight from about $320 to $330.
"That's got to be because of a big option play. There's clearly some huge
option plays going on; people are getting killed," she said.
Hildebrandt suggested that gold quickly ran out of upward momentum
when New York trading opened this morning because there were feelings the
overnight rally was overdone. "Whatever was forcing it up overnight in
Asia and Europe, New York traders don't necessarily see that as a buying
opportunity," she said.
Hildebrandt also noted that $340 is a major resistance level for spot
gold, and it was not surprising that prices backed off those levels when
New York trading began. However, should gold be able to break above that
resistance level and stay there, gold could have much further to climb,
she said.

The break through $340 in 1993--thanks to positions taken by George
Soros and Sir James Goldsmith--led to a major bull market.
On the downside good support should come in a $320-325, Hildebrandt
said.

David Meger, senior metals analyst with Alaron Trading, also cited the
covering of large lease positions that had been accumulated over the last
few months as a key driving force behind gold's rally.
"This just reeks of further lease covering, which is effectively
putting more buying into the marketplace," said Meger. The big US banks
are believed to be behind much of the lease covering, he added.
Meger also added that gold has reached levels where the locals will
"step in front of some of these rallies."

[******Here comes the best paragraph of the whole affair, and had it not been said here, we'd have surely said it elsewhere. (In fact, we alluded to it in an earlier post when we said "Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.") One small official proclamation here or there and *POW*...it's a totally different market than your see-thru plastic rulers and graph paper said it was.********]

Most market players agree that it is not technicals driving the
market, but fundamentals, following last week's shock announcement that
several key European banks have agreed to limit gold sales and lending.
"The psychology has totally reversed here," said a broker. "Without
the central banks selling and lending into the market, we have a shortfall
of supplies, as they have been up until now making up the difference
between supply and demand."

In the news today, the Australian National Bank said it has no plans
to sell gold for the foreseeable future. Also, Canada said it sold
136,000 ounces of gold in September.

[Here, we think our lovely Bridge reporter meant to say Austrian (not Australian) National Bank. Another Bridge report gives details that ANB board member Peter Zoellner was commenting on the 15 European central banks reaching their now famous decision at the September IMF meeting, and further elaborating that the ANB currently holds 407 tonnes gold. Australia now holds only about 80 tonnes (they are not expected to sell either, by the way.)]
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
In other gold news from Bridge, The New York Mercantile Exchange indicated it is additional gold options strike prices for trading outside the parameters of those normally listed, effective Wednesday. Volatility or expectations of yet more to come must have surely played into that decision.

Now that Andy Smith's anti-gold rhetoric has faded somewhat, apparently the latest bear to go crashing through the china shop is Ted Arnold, analyst at Pru-Bache. According to his report, this current state of robust health in the gold market is merely a reprieve from an ultimately oversupplied market, and Arnold further argues that the central banks who were signatories on last week's gold sales moratorium will remain "very overweight gold" and will "eventually cheat" on the agreement. What would they have to gain by cheating except paper? With the future of the "strong dollar" in grave doubt, and a yen that would like to be jawboned into the grave along side, gold reserves seem the only way to go...especially when you consider how the Europeans are going about it. Watch this, as reported earlier today...

In their third such quarterly revaluation of gold reserves to market following the initial valuation of gold reserves at market values with the introduction of the euro based on December 31 values, this latest gold revaluation increased the ECB' reserves by €13.234 billion over the previous quarter. The official valuation of
European Central Bank gold reserves at which the gold will be booked until December 31st now stands at €128.222 billion, up from last quarter's mark of €114.988 billion (for the same gold.)
Take note, Mr. Arnold... whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that currency can easily erase those gains and much more besides. So, what's wrong with gold now, Mr. Arnold? Wake up and smell the paper burning, my friend.

Follow along with this one if you can...
You may recall from our last report (on Friday) that the day began with open interest in 612 October contracts, with 120 receiving delivery intentions that morning. Monday stats reveal that by end-of-day Friday, Open Interest (October) dropped by 152 to 460 contracts. New delivery intentions on Monday were received for 18 contracts (bringing the total for Oct. to 1,621), and Tuesday stats reveal that by end-of-Monday, open interest had changed by a net drop of 13, leaving 447 contracts in open interest.
+
This is where it gets interesting, because this morning's delivery intentions exceeded--by almost double--yesterday's remaining open interest in the October gold contract. Unless our read on this is mistaken, because the turnaround was immediate, this clearly appears to be new contracts entered into for the sole purpose of acquiring gold. Though we don't know whether there was a brief period of backwardation since yesterday's close, it almost looks as though this were an arbitrage opportunity during which spot prices were higher than future prices...otherwise, why wasn't this same delivery sought on the spot market to begin with? From First Notice Day for Delivery Intentions on September 30th, October contacts in open interest totaled only 2,114. In the ensuing four days, delivery intentions have been announced on 2,437 contracts so far for October. Either way you slice it, the final interpretation remains the same...the physical market is TIGHT.

There was no change in COMEX gold depositories both Monday and Tuesday. Inventory stands at 839,029 Registered ounces and 88,591 Eligible ounces for a total of 927,620 ounces housed within vaults at ScotiaMocatta and Republic National.

In the oil market, traders said they were concerned about the outcome of a meeting to be held in late November between oil ministers of Mexico, Venezuela and Saudi Arabia. Their concern is that these ministers could discuss whether to keep their output cut agreement past March, and when a market is going well, any news that could disrupt things is always of concern. Venezuela Energy Minister Ali Rodriguez said the discussion would be about output levels, oil demand and world inventories.

On the topic of inventories, the United Arab Emirates Oil Minister Obaid al-Nassiri said that despite this rise in oil prices, "figures indicate that [world oil] inventories are still high compared to ordinary levels," and that OPEC's decision in September to maintain the production cuts through March 31, 2000 "would lead to
the stability of the oil market." Nassiri was speaking at an oil conference in Abu Dhabi Monday.

In NYMEX crude futures trading today, prices hit a 1-month low ahead of weekly inventory data that were generally expected to show crude stockpiles as flat or up last week. November crude ended down 28c at
$23.48 before the subsequent API report confirmed that US crude stockpiles rose 1.004 million barrels last
week, which was actually more than double what most brokers had expected (flat to up only 400,000 barrels.) In overnight Access trading, contracts for November WTI had lost an additional 14c.

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

TomcatPH, Cavan Man#1558010/05/99; 20:52:03

PH: You said "Just part of the process of assessing whether we have become all that we might think we have..." Very well put. Now you have me wonderin! Thanks for all you posts. I follow all your stuff.

Cavan Man: I agree. They are certainly positioned with unique perspective.Hard to believe it is not on the inside. BTW, I think you asked yesterday or Sunday what I buy. For gold its almost all pre-1899 uncirculated fifth ounces pieces like angles and roosters. One pays a small premium over Eagles for these. Cheap insurance as far as I am concerned. For silver it is all bags of pre-65 dimes and halves which I am told is the most popular for of silver.

Goldspoon***Comex Close Tomorrow**#1558110/05/99; 20:56:52

Here's what i have so far...(oh yeah..no changing guesses)

apdcheif-$399
Canuck- $343
Granny- $357
RossL- $332.30
onlychild$336.50
Tanglewild$318.80 (like your handle)
Silvertongue$313.90
Goldspoon$343.73 (can't stand this guy..such a knowit all)
Tomcat $325 (keep it up you'll go places)
SteveH ??
Leigh ??
Others ??

TomcatTC, Cmax#1558210/05/99; 21:05:49

TC: Great upate.

Cmax: Yes, I agree. I was also alluding to the fact the if one percent of the population just woke up regarding how sheeplized they have become; how the press is bought off, how our Constitutions is no longer ours, etc. then perhaps, through the internet, there would be a ray of hope. Even now, as we speak, a transformation in freedom might be occuring. It might be a grass roots movement but it must be growing, even if small.

canamami****$321.23*****#1558310/05/99; 21:25:46

My guess on tomorrow's COMEX close. (It's so volatile, who knows, but it may be a day for retrenchment). I hope I'm wrong: I really want it to spike out of control.
OROTomcat#1558410/05/99; 21:28:11

The priority is to save banks from default/insolvency. The way this is done, the CB borrows or buys the banks' assets and in return deposits cash (electronic or paper) at the bank. If the asset is held to maturity, there will be more money in the system until that point is reached. It is therefore inflationary. If the asset is in default, the cash sent to the bank is permanently in the economy and it is highly inflationary.
That is why the Fed does "temporary" borrowings under reposession agreements rather than straight purchases. But the repos are more probably going to turn into outright purchases because the cash withdrawals will not come back (negative US savings rate and cash withdrawals for Y2K, most significant are Yen withdrawals).
When the Japanese withdraws funds from the US bank and converts them to Yen, those deposits are replaced by either Fed repos or by the bank selling loans on the free market, or simply not rolling over old loans that come due. Looking at the US banks, the loss of deposits from abroad will cause them to drop their own assets abroad, hence the severe tumble of the Eurodollar and rise in interest rates. When this happens, the $ obligations of foreigners are diminished, while the $ obligations of US entities remain the same. The $ dumped into the market by the Japanese withdrawal are sopped up by the US banks not rolling over old debt or selling/refinancing assets into Euro based or Yen based hands.
So the math makes every repo by the Fed a net injection of $ into the international economy now. While each unreplaced or sold foreign $ loan removes future $ demand from the world outside the US. The rest of it ends up in the US markets where the sale of assets causes rates to rise.
The Fed action weekens the dollar now, the bank response weakens the $ later or the bond market now.
The "tightening" by the Fed means that the $ will fall later instead of now. In the long run the result is the same.
The effect of raising interest rates in a debtor nation undergoing an exodus of foreign funds is inflationary and weakens the currency as the increased rates increase outgoing payments more than they do incoming payments. Therefore $ supply to the world increases. If enough $ are recycled back into the US system because of higher rates, then the $ may stay strong a while longer, but the future supply of $ would increase.
Last year, the $ income from the teeny debt owed to US creditors was smaller than the $ payments made by the US to foreigners. This acts as a trigger for a vicious circle-
1. if interest rates are low, there will be an unwinding of foreign owned debt, and $ will fall
2. if interest rates are high, US interest payments will grow, and the US economy will see both higher prices as a result of higher interest costs and on top of this the economy would slow. The slower economy makes investing in US operations unattractive and the incoming money seeking high returns is balanced by outgoing money rebuffed by low economic returns from the slow economy.
3. If Money supply is restricted (as Kudlow suggests), then the severely undercapitalized banking system collapses and investors panic, selling off everything quickly.
4. Prices of foreign supplied commodities rise as $ falls, and more $ are supplied.

The $ would fall until the $ needed for repayment of interest abroad or for importing US products and their proxy (still oil and gold - and most other commodities) are no longer less than the $ supplied by net US interest payments and imports into the US as well as outgoing investment money. At this point, the $ index (DX) value at which this balance is achieved is at the 40 to 60 range vs 98 today.

BillGoldspoon: Comex close tomorrow#1558510/05/99; 21:33:25

Hope I'm wrong .. $318.50
Then again, we can just get more.

TownCrierThree Kings#1558610/05/99; 21:34:55

Hello Leigh
If you happen to be one of the handful that burden themselves each evening to read the ramblings of the GOLDEN VIEW, you will without doubt discover the reason for the TownCrier's absence since Friday...the staff at The Tower wanted to meet the good master of the Castle in a real world setting, not one "confined" by cyberspace, so to speak. If you haven't already met Michael, you are really missing out. In person he is even more gracious than he seems through the many wonders of modern substitutes...those being phone, fax, or internet. We're safely back at our Tower outpost, better for the experience, and eager to return as time allows.

Turning to the subject matter of your other inquiry...
Three Kings. Consensus among The Tower is that of a first rate movie, but not for the overly sensitive. This is near-war, after all, with the expected complement of soldierly language and actions. HOWEVER...there is the gold, which plays a MAJOR role, and is treated with the respect it deserves. Without giving away the movie, those same who had respect for gold acheived more easily than the others the proper balance and respect for human life in the end.

The director did an artful job of mixing reality with the surreal without sacrificing credibility and the importance of things that are important. Flying bullets, for example. Nearly each and every bullet fired took you along for the ride, and you knew how each pull of the trigger changed life for either the sender or receiver, or both.

And then there's the gold. You will see expressions on faces that portray wonderment beyond the ability of paper to inspire. You will also learn the difference between common thievery, and noble endeavors.

I'm sure we'll be taking others to see it.

TownCrier's bottom line: this is a perfect movie to help usher in America's improved gold-awareness on the social scene while gold also makes its popular return on the financial scene.

Hill Billy MitchellTomarrow's close#1558710/05/99; 21:36:16

****$309.50

Tomarrow's COMEX close. Look out for the spike on Monday,
Oct. 11

CoinGuyGoldspoon...#1558810/05/99; 21:41:25

Put me down for $334.75. GO SPOT GO!!!
Chris PowellShort squeeze is only beginning#1558910/05/99; 21:41:51

http://www.egroups.com/group/gata/235.html?

GATA's Bill "Midas" Murphy
tells of the panic backstage.

Black BladeThose GD hedgers with no confidence in their own product!#1559010/05/99; 21:51:31

Oh....OK, I'll play...gold at $231 at close.

When I saw the oil price drop at first I thought that POG would respond to that, but the XAU dropped while POG rose. Well it appears that the drop in the XAU was attributed to hedged miners. My unhedged such as Harmony (HGMCY) did quite well, while Barrick (ABX) and other dropped. I would suspect that the hedge being priced in will cap the XAU to some degree, while unhegded (those that did not short gold) will continue to rise as long as Au rises. It appears that hedged miners do not have confidence in their own product, so why invest in those those companies? Although I do have shares in some, I wonder about how difficult it would be to unwind these positions. I see that Ashanti (ASL) has had margin calls on their short position in Au.....serves them right. Also Barrick's price has been constrained as well, and the rumor is that they have had similar problems. When mining companies short gold they do their shareholders a dis-service! It appears that Newmont (NEM) and Placer Dome (PDG) have had their prices held under due to the same concerns. OK, so I ranted and got that off my chest.

Gandalf the WhiteGoldspoon's contest !#1559110/05/99; 21:51:36

$321.0
<;-)

jaydeeveeTonight's closing POG#1559210/05/99; 21:52:13

http://www.usagold.com

Hi from Australia! Today, with a $6.70 rise in POG last night, and with SPOT currently down $1.50; my blue-chip, unhedged Australian gold shares (and most others) are currently down 8.25% and look like falling further. I would have thought with a tightening bias last night ( the worst possible decision for stocks and bonds worldwide!) that POG would have rallied more than it did. What a strange, unique experience these last few days have been. How great it's been to have been reading this forum for a few months, so as to have been part of this great move forward to truth! I'v been reading estimates in this forum of how high gold will go tonight. I'll be happy if the price holds! Today, here in OZ, the unreasonable bearishness with quality gold shares suggests a fall in POG tonight. Can someone out there tell me why they they are confident the price will hold.
Gandalf the WhiteWhat did you mean BB ?#1559310/05/99; 21:54:24

Did you mean $321 ?
IF so you beat me by a few seconds !
<;-)

Gandalf the WhiteJDV's question#1559410/05/99; 21:57:38

FAITH, JDV !
<;-)

Black BladeTomCat#1559510/05/99; 21:59:02

I collect Liberties ($20, $10, and $5) and a few Indians, some mexican pesos (the gold ones with the Mayan calender and pres. Morales(?)), and Morgan Silver dollars. My bullion is mostly mapleleafs in Au and Siver rounds. Much bullion is also what I have bought from miners which were distributed as company awards, thereby avoiding the premium. Damn, I love this gold business!
Tubac's earsSILVER!!!!!!!!!!!!!!!!!!!!!!!!!#1559610/05/99; 22:00:19

Pleeeeeeeze sweet Jeeeeezus, breathe some life into the pile of scrapmetal SH*T hidden under my bed!!!!!!
Why hast thou forsaken meeeeeeeee????!!!!!

Black BladeGoldspoon and POG change#1559710/05/99; 22:01:30

OK, so I'm dislexic....POG at $321 at close. So it was a little deja vu? No, just a few bottles of Negra Modelo!
Black BladeGandolf and Goldspoon and yet another POG change#1559810/05/99; 22:04:00

OK Gandy, I'll cut you some slack, I'll go $323.50. You got me.
jaydeeveeGandalf the White's Reply to JDV's Question....#1559910/05/99; 22:05:32

http://www.usagold.com

Many thanks Reverend!
Black Bladejaydeevee#1560010/05/99; 22:09:05

good day mate! I didn't know there were any unhedged Aussie producers left. Normandy among others seem to be excessively hedged. Maybe there are a few unhedged miners that got caught in the whirlpool today. BTW, which Aussie producers are unhedged if you don't mind?
sstinsTomorrow's gold close will be...#1560110/05/99; 22:10:06

$362.5 at close upon which time I will be wishing that I would have purchased just one more gold eagle.

Oh... so much potential. Thanks to all those short sellers for all the years of manipulating the market and providing us with this exceptional oportunity. Let's do it again in about 15 years

BTW still waiting for 1 silver eagle.
Also BTW my local coin dealer is now asking $10 for silver eagles. Two weeks ago it was $8. They are to hard to find, he says. No big deal as I took home some of the heavier stuff.

Time to give silver a lift???

Steve

jaydeeveeReply to Black Blade: Blue chip Aussie gold miners with 'small' hedge books.#1560210/05/99; 22:18:42

To my knowledge in Australia Accacia Resources & Newcrest mining are the pick of the stocks with small hedge books.
Both companies have traded profitably at the recent low gold prices. Accacia Resources has the lowest cost of production
of the major producers. I think it is the pick of the stocks.

MariusWed POG guess#1560310/05/99; 22:21:17

Oh, alright. I'll play too! $338 at COMEX close on Wed. All this interest rate stuff is (those of you with more delicate sensibilities had best cover your ears) a mere fart in a windstorm when compared to short covering and Asian buying. Also, I think the Dow bulls will delude themselves a while longer before (belately) fleeing. Short the dollar, short the Dow; ride that gold bull, AND HOW!
JourneymanBringing Up Baby#1560410/05/99; 22:24:29

Several posts have pointed out that today's Americans just don't get it about gold. Ah, yep. Convincing otherwise intelligent people that gold is better than paper, at least for some things, is, well, difficult. A friend of mine has a degree in bio-engineering and another in economics. He holds many accounts in Asian currencies. I warned him about three years ago he should watch his won accounts (Korea), Philippean pesos and the Malaysian ringitt. We got in a bit of an argument, whereupon I stupidly mentioned that gold protects people from the necessity of playing musical chairs to avoid losses with paper of all sorts. He ended up telling me that it was more likely that a large gold asteroid would land on earth and destroy the value of gold by ballooning the supply than that the dollar would drop because the Fed increased the money supply too much. I believe he kept all three foreign accounts -- and I'm sure he has dollar accounts now. Oh well. Another friend who prides himself on being a Mensa member (the high I.Q. club) took a similar attitude. He has an MBA from UCLA. I finally "got him" with two questions. 1. "What is the lowest price a $100 bill could theoretically reach?" (He admitted it COULD become worthless.) I then asked him, 2. "What is the lowest price an ounce of gold could reach?" After much stammering and delay, he said he didn't really know, but it obviously wasn't zero. (At least he's honest.) He doesn't talk to me much anymore. Oh well. Maybe it's just the economically "educated" who have this chronic a problem? Regards, Journeyman
flierdudeComex Close#1560510/05/99; 22:26:43

Goldspoon,

Right me down @ $316.00 Comex close. Hello all.

Black BladeJaydeevee#1560610/05/99; 22:27:16

Thanks, I guess since they don't trade in the US I didn't have a lot of background on those. I also pick a few Canadians such as Euro-nevada and franco-Nevada (sister companies) which have merged. Great since they are primarily Au royalty companies with no debt, and with a high grade underground mine (Ken Snyder Mine) at Midas, Nevada. I've kind of shyed away from Aussie miners, probably due to Normandy. Good luck to ya mate!
TomcatAll the shorts have to do is wait a while.#1560710/05/99; 22:34:27

http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Wf6

I picked this up on the Yourdon site.

BERN, Switzerland (AP) — Swiss lawmakers Tuesday approved legislation that will enable the country's central bank to begin sales of 1,300 tons of gold reserves starting next spring.

The 151-0 vote by parliament's lower house clears the way for the upper house to take up the bill in December. It will then go to the ruling coalition Cabinet around April.

The sell-off would represent half of the National Bank's 2,600-ton reserve. The other half will be kept to underpin the Swiss franc.

"It is in our interest that the gold sales begin as fast as possible,'' Finance Minister Kaspar Villiger told lawmakers.

The central banks of Switzerland and 14 other countries last month announced that they would limit their combined sales of bullion to 400 tons per year for a total of five years.

"From Switzerland's point of view, the pact is exceedingly advantageous,'' Villiger said, noting the rally in the gold price that followed the announcement.

Villiger repeated Switzerland's long-standing pledge that the gold will be sold in careful doses over a period of years.

In a referendum last April, Swiss voters approved a constitution which ended the traditional requirement for the Swiss franc to be backed by gold.

Bonedaddy(No Subject)#1560810/05/99; 22:36:14

Driving from Cheyenne to Denver you wouldn't know the world was round. You probably couldn't tell it by driving from Anchorage to Mexico City either. Fact is when motoring along the highway, the rear view pretty much resembles the view out the front windshield. How is it then that we know the world is round? Is it faith? No, probably not. I think it's just plain old education. Yeah, education, just steadily beating back the forests of ignorance that engulf the planet. Why, not so many years ago, old Nick Copernicus discovered that the world, was indeed, quite round. He didn't need a space shuttle to figure it out either. He came to the conclusion with a humble telescope. Of course he couldn't tell many people, he was smart enough to know they would get mad. Don't cast pearls before swine, you know. Later, after his death, when word got out of his "theory" the leaders dug up his bones and burned them... Heretic! (We'll show him!)
So the dollar, she looks mighty strong....been that way for over fifty years. Nothin' will ever be sounder than the dollar. Look at them fools buying that gold. Pass me some more of that dot com, if you please.

Simply MeGuessing Comex Gold Close#1560910/05/99; 22:41:02

Hi, Goldspoon. If you're still recording "guesses" this time of night...please put me down for $330.50.
HopeingIITC - A Question#1561010/05/99; 22:41:13

First of all, a thank you for all your effort on this forum.

Next, a question.

When "delivery intention" is given, can it be changed ?
To be more specific can one cancel the intention or
alter the date (if in fact a date is given in the original intention) ? Perhaps in your answer you could elaborate
on the details of issueing "delivery intention". I hope my
question is clear to you, if not, please ask for clarification.

Thanks in advance and thanks again for all you do.....

jaydeeveeMy guess @ tonight's price#1561110/05/99; 22:48:15

http://www.usagold.com

Looks as if this column is short on BEARS........so I'll come out of my cave and try $318-50. Hope those rabid dogs SPOT & SPIKE see me and beat the living s@##> out of me!
TomcatJourneyman, Black Blade, flierdude.#1561210/05/99; 22:49:31

Journeyman: It appears that a large portion of mankind gets to the point where their mind is filled with ideas which become fixed in place. Once set, it is very uncomfortable for people to change these somewhat hardened stale points of view. Oddly enough, your friend with many banks accounts probably still has the same losers because changing his ideas might be more difficult than losing money. This aspect of history repeats with every generation.

BB: Nice mix you have there. Too bad we aren't close. We could trade.

flierdude: Greetings. I follow your posts over at Kitco. In fact, I believe I have seen some of your posts at TB 2000. Nice that you drop in for a spell.

Black BladeChris Powell and GATA#1561310/05/99; 22:51:40

Hey, you guys are good! I had to deduce some of this stuff and you guys had some very interesting info. It looks like the hedgers are in deep. I keep a running profile on share prices for several Mining companies, and noticed something was amiss. Keep up the good work guys! Hopefully these companies will see the error of their ways.
Chris PowellText of Murphy interview on South African radio#1561410/05/99; 23:06:36

http://www.egroups.com/group/gata/235.html?

Tuesday's "Moneyweb" program
with GATA chairman.

Chris PowellCorrected link for Murphy interview#1561510/05/99; 23:07:57

http://www.egroups.com/group/gata/236.html?

Sorry 'bout that.
GoldflyRoss, Goldspoon.....#1561610/05/99; 23:15:00

You guys are very close-

Tomorrow's close $332.00

GF

TEXGoldspoon: COMEX Close#1561710/05/99; 23:17:13

I've been lurking out there since I first visited the CPM bunker in February. This is my first post and why not start out with a winning hand......place my bet at $332.25.

Also, just got my bank statement today. I had a nice letter asking me to please inform my banker with three days notice if I intend to remove more than $10,000 from my account(s)
anytime between Nov. 1 and December 31. Hmmmmmm......I'm taking it all out tomorrow.

Last but not least.......Three Kings, see it.

Peter AsherPrice Guess#1561810/05/99; 23:33:32

Now that the panic has subsided, the floor traders have changed to clean, dry cloths and careful accumulation will resume.

I'll call for a small rise to $30.80

Peter AsherBonedaddy#1561910/05/99; 23:43:49

Men first observed the world was round in the early days of tall sailing ships. In clear weather, when a ship could be seen many miles out to sea, only the upper rigging was visible. They soon figured out that the lower part of the ship was hidden by the curve of the Earth.

I once experienced a perfect example of this, when out on Long Island Sound on a clear day, 40 miles from NYC. I was in a 12' boat very close to the water and rising above the horizon, seemingly out of the water, were the upper halves of the Empire State, and Chrysler buildings along with the tops of a few others. (Circa 1952-3)

Jason Hommelguessing/predicting...#1562010/05/99; 23:47:57

How about another high one...

Gold at $348/oz. by comex close tomorrow.

elevator guyTomorrows' close!#1562110/06/99; 00:05:49

Hi, Goldspoon! I think tomorrow's close will be $337.

Anyone know how to play the LBMA market?

What happened to the COMEX in 1979-1980, when the price reached, was it, $800/oz? Did the COMEX suspend trading?
Was there massive defaults? Was there as big of a short position as there is now?

GoldsunCopernican Confusion#1562210/06/99; 00:16:45

Bonedaddy
Copernicus figured out the basic workings of the solar system - planets revolving around the sun and all that.
Far from being considered a heretic, he was an employee of the Catholic Church, and was encouraged in his astronomical research by the Church leaders.
Education, like money, is a dangerous tool, best kept out of the hands of governments. BTW, I am not a Catholic.
Goldsun

elevator guyVarious#1562310/06/99; 00:24:46

We all know now that the COMEX is a balloon with a couple of marbles in it, and will not be able to deliver gold if called upon by enough to do so.
But will it still settle its accounts in cash? How long can it do so? Is counter-party risk assumed by the brokerage houses, individuals, or what? I'm just wondering how long to stay at the paper party, before moving into physical, and gold and silver stocks.

Where's my buddy Tom Fumich? I didn't see him at Golden Sunday's victory toast.

YGMCavanMan, Tomcat & Believer#1562410/06/99; 00:58:16

Sorry it's late & I'm just back at the screen. What I said was that IMHO, FOA & Another have the apparent (to me & possibly others) knowledge & perception of world events unfolding w/ respect to money matters and Gold that it's comparable to that of the so called Gnomes of Zurich. I
feel that they have connections to knowledge that few are privy to and in an intentionally obtund way are trying to tell us all to expect a sudden and drastic change in many things financial. Both continually have tried to gently urge us not to rely too heavily on anything paper. Physical Gold is always at the edges of the messages. I apologize for reading my own deductions into what these fine and eloquent gentlemen have taken so long to tell us and sometimes repeat for many who are new to this forum. I
think the defaults will shock the world before this scenario
plays out! I DO NOT BELIEVE for a minute that their messages in any way are meant to stimulate Gold buying for any other reason than that of financial safety for those so inclined to listen to the message and read between the lines. I know this is alot more than I posted at Gold-Eagle today but I feel it needs to be said. All that remains uppermost in my mind is that the real power in the world lives behind the doors of the soundproof meeting rooms of the Central Banks of the world. Tell me where does all the non-publicly held Gold lie? 35% est in Bank Vaults and the rest to a few lucky souls. From every, shall we say extremly rich and connected (Banks and Bullion Circles) person that I've talked to and those (rumors) passed on to people I know there are stories of $2000.00 Gold and a $0.40 - .50 cent U.S.Dollar in the future. Who starts these if there is no fabric of truth. Sound stranger than fiction ? Well as far as I can see the truth usually is. These thoughts have guided my moves into having Gold in the ground so as to always have a edge on the system as I'm not among those with the wealth to stockpile Dory bars and wafers. So I guess I've had little faith in paper for alot longer than I 've been getting an education from here or GE and the Cafe.
Another even warned me once that I should be wary of Government when push came to shove and whose Gold lies under my mining claims. Gold, Default and Denial. I believe these will be the most used words in the near times ahead. Sorry for being long winded if any of you read all of this. Maybe I've read too much and studied too long to have a clear perspective but then who among us knows what lies dead ahead in this new millenium. I will stick to mostly physical and nobody will sway me from my course.
***and yes if I can make one iota of sense to you here I'll gladly post more often.G' Nite--YGM

Black BladeOh no! it's round?#1562510/06/99; 01:05:19

As I understand it, the ancient Greeks (circa the time of Plato, etc.) knew that the earth was round by using simple geometry and trigonometry.

Also, has anyone heard of the "Flat Earth Society"? I wonder what those skeptics are up to these days.

SteveHGATA#1562610/06/99; 01:59:35

11:35p EDT Tuesday, October 5, 1999

Dear Friend of GATA and Gold:

I'm sending you the whole of GATA Chairman Bill
Murphy's "Midas" commentary tonight at
www.lemetropolecafe.com in the hope of letting
everyone know that any momentary calm in the
gold market only masks the panic that continues
backstage. The short squeeze is just beginning.

Please post this as seems useful.

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

* * *

MIDAS COMMENTARY FOR
TUESDAY, OCTOBER 5, 1999

By Bill Murphy
www.lemetropolecafe.com

Spot Gold $324.40 up $8 Spot
Silver $5.55 down 3 cents

Technicals

"Vox populi, vox Dei" -- "The voice of the people is
the voice God."

The gold market continues its rocket ride. Today the
December futures contract traded as high as $339 early
this morning before selling off going into the Comex
open. The gold market is on fire.

When gold was trading in the $250s, Midas told you that
we had the shorts "right where we want them." Many of
you believed in what I had to say and loaded up on gold
call options. Congratulations. While some of you were
buying calls, futures, gold stocks, etc., the bullion
dealer camp was laughing at us. We knew then that we
had them, and we know know that we do.

Some of the bullion dealers, overhedged gold companies,
and gold-borrowing funds are in big trouble. Last night
I sent out commentary that included this statement:
"Our camp will be more gracious than the Hannibals have
been. We will show mercy on them and let them out of
the back end of our 'enveloping horn.' When the price
of gold hits $340, we will accept their surrender."

I never meant to suggest that I would be happy with
$340 gold. This morning I did a radio interview about
GATA with the well-known Alec Hogge of South African
radio. When asked where I thought the price of gold was
going, I told his listeners that, in my opinion, the
proper equilibrium price is a bit north of $600.

Anyway, never have I received such an onslaught of the
same sort of feedback. Such as:

"As the man at the BIS said ... Gold will take no
prisoners."

"What do you mean that you will accept their surrender
at $340? Peanuts to you."

"Why take prisoners? These jokers have shown no mercy
for the past 10 years! Most of my mining stocks are
still a fraction of what I paid, at least one is in
Chapter 11, and another one (Benguet B) has not traded
over 25 cents (yes, cents) for the past year. (The
story of how it stays listed on the Big Board is the
subject of another investigation.) Gold goes up 25
bucks and you want to be Mr. Nice Guy. Give us a
break!"

The Cafe and the Internet have spoken. In earlier Midas
commentary I suggested that what we would eventually
have is a "fight to the death" in the gold market. In
the Roman Coliseum days the gladiators battled until
one beat the other. The victorious gladiator would look
up to the adjudicator to see if he would get a "thumbs
up" or "thumbs down" on whether to finish off his
vanquished foe. The adjudicator would often listen to
the crowd for direction. It was called "Vox populi, vox
Dei."

You have been resounding. Thumbs down to Hannibal
Lecter and the Hannibal Cannibals.

That can happen in many ways. One of them I told you
about this summer. Do you remember when I mentioned
that one of the Cafe's most plugged-in sources told me
that plans were being set in place to squeeze the
December Comex gold contract? That plan is still intact
and gaining advocates. At the time I noted that squeeze
artists were buying the December gold contract and
selling April and June.

The open interest on Comex is 222,031 contracts, having
gone up 7,449 contracts more yesterday. The December
open interest rose 6,263 contracts and now stands at
136,022 contracts or 13.6 million ounces. There are
less than a million ounces of gold in the Comex
warehouses. Of course most of the specs do not want to
take delivery, but not all the gold in the warehouses
is available either, as much it just sits there for
margin purposes.

The August futures contract was almost squeezed
recently, but one bullion dealer let the shorts off the
hook for a $2 or $3 premium over the contract price.
You might recall that Goldman Sachs took delivery of
more than 90 percent of the August deliveries. Our camp
speculated at that time that they were trying to get
their hands on as much physical gold as possible
(either for themselves or for clients) in case of times
such as we have now.

If the August contract was almost squeezed in a dull,
glacier-like gold environment, what do you think they
will do to the December contract in this new blazing-
hot environment? As we head into the late fall, the
gold shorts are going to have to deal with the monster
call option position that is now only $65 above today's
close, restricted gold lending by the central banks and
building Y2K fears. The recipe for a gold short squeeze
will get better and better.

The gold shorts and the Hannibal Cannibal bullion
dealers have had it their way for years. It is payback
time. Big-time!

Don't be too stressed that silver has not taken off
like gold yet. Many of the hedge funds were long silver
and short gold. They are buying back their gold and
selling silver now. In a recent Midas you were informed
that sources had told us that Moore Capital could be
short as much as 25 million ounces of gold. Moore was
the big silver seller today. They must have tremendous
margin call pressure and need to sell to shore up their
balance sheet.

$9.78 silver coming.

Fundamentals

The big story of the day for most was Ashanti
Goldfields. They have been one of the leading
proponents of hedging and have massive forward sale
positions. The other day they announced that they had
restructured their hedges. The marketplace took that to
mean they covered their hedges. The Cafe's John
Brimelow was not fooled and told me so at the time. The
bullion dealer camp was spreading the word that had
Ashanti had covered and the gold market had taken the
company's buying well. But Brimelow doubted that they
had covered and was proved right today as it was
disclosed that Ashanti's hedge book still represents a
net hedge of 10 million ounces. That shocked industry
participants.

More from today's Platts: "The sharp rise in the gold
price since the Sept. 26 announcement of gold sale
restrictions by the 15 European central banks 'has
resulted in a substantial increase in the value of
Ashanti's unhedged reserves,' the company noted. The
rise in prices and increased volatility 'has led to
certain counterparties being entitled to margin calls,'
the company said. Ashanti 'has entered into a joint
arrangement with its major hedging partners for
continuing support,' it added."

The market told Ashanti today what it thought of this
announcement. Ashanti stock sank to something like 5
1/2 from 9 3/8 with the price of gold going up $8. What
gives?

Ashanti and its bullion dealers, that is what. Sources
told me today that Ashanti has big problems relating to
maturity mismatches, margin call pressures, and forward
sale buyback liquidity problems, and are suffering from
faulty hedging programs laid on them by certain
consultants and bullion dealers.

I was informed today that Ashanti had a $300 million
margin gap with its bullion dealers. I am told that
Goldman Sachs is Ashanti's main dealer. That means that
the bullion dealers front the first $300 million of
margin calls. Of course that is no picnic for the
bullion dealer. Stress surfaces in all quarters and
that stress feeds on itself throughout the bullion
dealer and gold producer camps.

Another source told me that Ashanti started to reel at
$280 gold, much less $325 gold. Ashanti is hedged as
much as 10 years out. There is not a big market for
getting out of forward-sale 10-year-out gold positions.

Ashanti has significant problems that are likely to
worsen.

With every Midas now I try to explain that gold is
exploding when almost no one thought it would because
the industry was working from disinformation supplied
by the bullion dealer camp -- many of them old Hannibal
Cannibals. Their allies too. For instance, note these
comments by Barrick Gold's Jamie Sokalsky in a Dow
Jones story:

"'Gold producers account for perhaps 3,000 tonnes of
short positions, about two-thirds of the market total,'
according to Jamie Sokalsky, chief financial officer of
Toronto's Barrick Gold, one of the world's largest
producers.

"Gold producers took short positions to hedge against
falling prices, essentially locking in sales prices
before gold is even mined. Now, with gold prices
soaring, those short positions are money-losers, and
the market is bracing for massive unwinding by
producers.

"'This is only the first round or two of short
covering,' one commodities analyst said."

Sokalsky is telling everyone that the total number of
gold loans is only 4,500 tonnes (two-thirds of 4,500 is
3,000). He is using Gold Field Mineral Service numbers.
GFMS is a Hannibal apologist. The Cafe uses Frank
Veneroso's numbers and they tell us that the gold loans
are probably a bit greater than 10,000 tonnes.

Who is right? Well, if GFMS was right and the loans
were only 4,500 tonnes, the gold market would not be
doing what it is doing today. Case closed. Yet Barrick,
one of the most heavily hedged gold companies in the
world, continues to spout the Hannibal line. Barrick is
becoming a sad case. Its stock was hit today too as the
Ashanti news has run up the red-flag warning signs of
the companies that have overhedged.

Wake up, Barrick! You have been in the penthouse in
public esteem. If you tarry too long, you might end up
in the outhouse.

There might have been a much bigger story today. More
from Sequin, who put this up at the Kitco gold site:

"The big big rumor today is about the Fed bailing out
Goldman on 10 million ounces. The market is all excited
about it: THEY are doing something. Since it is the
role of the FED (as painful as it might be for us) to
prevent a systemic collapse, there might be some basis
for the rumor.

"Still, I would be surprised, since the Fed hasn't been
seen in the lease market for ages.

"Yes, they get some other CBs to do the dirty stuff for
them. But they are limited by status. So it would be
interesting to know to what extent they are at liberty
to do that.

"Technically, leasing is not selling. However, at 10
million ounces a clip, we might not see them every
other day.

"Today is the day to speak about black holes.

"You know, if you happen to fly in their vicinity, you
get sucked in, but you won't care, since at this point
the whole spaceship will not even be the size of a
grain of sand.

"Well, there is a black hole in our universe and it is
called the 390 December call. It is traded on Comex and
yesterday the open position was a tad above 55,000.

"That's a nice 5.5 million ounces and change. When you
know that major market makers show $3 wide on 10,000
ounces, you can bet on some fun in case we go in the
low 360's.

"Let me explain. As we go close to the strike, the
shorts, who usually are option market makers, will have
to adjust their delta. (The delta is the sensitivity of
an option to spot moves.)

"Hence, the higher the spot goes, the more they will
have to buy. In such an illiquid market a few million
ounces will push it through the strike in seconds.

"Since the law of maximum pain applies these days in
gold, I would not be completely surprised to see a
seriously punishing run-up there and higher. This is of
course without taking the OTC derivatives into account.

"Only five weeks to go, but I know a few options
dealers who are not going to sleep that much."

Sequin is obviously a pro; he knows his stuff. It is
interesting how he is commenting on the December $390
calls too. If he and I are jumping up and down about
it, so are a lot of others. This is explosive!

But what may be more explosive is what Sequin says
about Goldman Sachs and the Fed. How many times have
you heard Midas pound away on this theme? It extends to
the core of the Bank of England sale, etc. And it is
supportive commentary of the "Bombshell" I delivered to
you last Friday in Midas commentary. The key point from
that Midas:

"Two days ago I received information that a futures
commission merchant (a Refco-type firm) was told by
another futures commission merchant that it was not
prepared to deliver gold on its gold forward or futures
contract obligations that were expected by a client of
the firm that was standing for delivery. In essence,
the shorts were declaring force majeure: 'We cannot
deliver.

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

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

Now two days later the word on The Street is that
Goldman was fed 10 million ounces by the Fed. Don't you
think that our "Bombshell" story should gain
credibility and get some legs?

Potpourri and the Gold Shares

The XAU retreated today to close at 84.61 down $4.20.
Gold was strong all day, so the XAU was perplexing to
many. But it isn't really perplexing. We have told you
about the hedge funds being short gold. We have even
told you about the hedge funds being long the big cap
gold stocks. The hedge fund gold shorts are covering
their gold shorts, so they are selling their gold
stocks. They have to get out.

In addition, the Ashanti issue has many money managers
reassessing their gold stock allocations.

>From Reuters: "Gold trading in Pakistan, one of the
largest importers, has largely come to a halt as rising
international prices have left several major players
unable to deliver their commitments, traders said on
Tuesday."

The gold premiums in Asia are holding up surprisingly
well on this mega move up for gold.

Cambior is a great little gold producer, but it's
shares fell 21 percent today, its biggest loss in 4
years on concerns that is too has overly hedged.

Funny, a couple of months ago the Hannibals strongly
suggested that the likes of Newmont sell a good deal of
forward production for fear of losing its credit
ratings. Now the price of gold rallies sharply and the
companies that have stuck their toe too much in the
hedging waters might lose their credit ratings anyway
because they hedged TOO MUCH, not too little. What an
industry!

Anglogold came out with a strong press release today
announcing that it "has no gold lease rate exposure at
all before early 2000 (and limited exposure
thereafter), and this has contributed substantially to
the stability of its hedged position." In other words,
Anglogold's bullion dealers have the "roll risk," not
Anglogold.

Tiger Watch: This hedge fund continues to stink up the
place. Its net assets have slumped from some $22
billion down to $8 billion. The fund lost another 6.7
percent for September and is now down 23 percent for
the year. I wonder how many illiquid positions Tiger
still has on its books and is stuck with.

More bullion dealer hedging problem news from Reuters:

"A bullion trading source said market talk that an
Australian bank was facing huge losses from recent
sharp gains in bullion prices triggered fresh buying as
the bank would be forced to cover its position soon.
Banking sources in bullion markets in Australia said
most Australian banks running gold books were short to
some degree.

"One source said the hedge book of Bankers Trust,
recently acquired by Australia's Macquarie Bank Ltd.
was in 'pretty dismal shape.'"

The gold investment game has changed overnight. I think
the coming play in the gold share sector will be the
small junior companies that have found gold resources
or reserves. They have gold in the ground and no or few
hedges if they are gold producers too. I am picking up
some of these babies.

One of my bigger gold stock positions is one such
company: Golden Star Resources on the AMEX. GSR is
trading right below 1. It once traded at 21. It is a
Frank Veneroso favorite and has six properties (most in
the Guyana Shield) that could become significant mines.
I found out today that two highly regarded hedge fund
managers are bidding for the stock.

The prices of many of the little-guy gold stocks are
nowhere near where they should be. That is because some
long-time shareholders of size are selling now. They
can get out easily for the first time in a long time.
These people do not believe that the gold move is for
real, so they are practically giving the stock away
practically. They will be very sorry. As the price of
gold moves up from these levels, these little golden
jewels should shine as investments.

Gold price dips can, and will, occur at any time. They
present buying opportunities.

-END-



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

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SteveHPreacher#1562710/06/99; 02:00:25

www.kitco.com

Date: Tue Oct 05 1999 23:59
Preacher (Perspective) ID#30281:
Copyright © 1999 Preacher/Kitco Inc. All rights reserved
I think we are in a new bull market for gold. Simple proposition.

Gold has broken through the May '99 peak of $291; the Oct '98 peak of $296; and the April '98 peak of $317. Today, it moved up to the Oct'97 peak of $338.50 and backed off.

Still, it has made a lot of progress in a very short time.

The XAU is not faring as well, but it is doing well. The XAU has broken through the May '99 peak, the Oct '98 peak, but has not quite cleared the April '98 peak at 92.??.

So at this point, the metal is outperforming the XAU on a relative basis.

For the record, the XAU peak in Oct '97 was 112.

A bear market is a series of lower lows and lower highs. A bull market is a series of higher lows and higher highs.

So the first thing we must see in a new bull market is a series of highs above previous highs. We are seeing this.

Next we need to see lows above previous lows. The first pullback took us to a low of $296 or so. Let's see if the current pullback stops short of that figure.

We have seen several high-energy predictions of gold at $375 in the near future. Technically, after today's high is breeched, the next technical high sits at $365, set in Feb '97.

Another short-covering rally could push up toward that mark.

Keep it in perspective.

One thing that alarms me is the "phantom" fundamental news we get -- news that is not varifiable. We are told that Goldman Sachs is massively short in the gold market. We saw news earlier from the same sources that Sachs was getting long in a big way in August.

So how do we know Sachs is massively short?

Now we hear rumors that the Fed just arranged to cover Sachs' shorts to the tune of 10 million ounces.

None of this is verifiable info, IMO. This is what I call phantom fundamentals. How do we know that certain rumor-mongers first led us to believe that Sachs was massively short, and now to cover their own tall tales, they come up with another tale that the Fed is bailing Sachs out.

It's like a great drama has unfolded and we don't know if any of it is true.

I keep my eye on the bouncing ball, the price action of gold and the XAU. Gold needs to hold above the previous pullback low. That would be a nice next step in the new bull market.

The Preacher

SteveHSend this to This email address is being protected from spambots. You need JavaScript enabled to view it. #1562810/06/99; 02:44:48

To whom it may concern:

I am an avid watcher of CNN's Moneyline. Oddly, I am also a gold stock investor. Forgive my observation but Moneyline seems to avoid a fair coverage of events in the Gold Market place and is focusing on mega deals in the stockmarket. Both the lack of coverage of gold and the over coverage of 'big deals' paints an inaccurate picture of the market as it is today.

A second observation is that you cover the major indices, to wit: the DOW and NASDAQ, but most technical market watchers have confirmed months ago that the markets are in a confirmed DOW bear market. The DOW and NASDAQ just haven't joined the rest of the market yet but represent on a select 130 stocks. It is clear to me anyway that most money has pulled from small and mid caps and gone into these indices for now. This isn't made clear on your show. Too much chear leading by analysts talking their book, so to speak.

Also, your coverage of events in the gold market has been, forgive my use of this word, lame. Your analysts and especially your advertisers for the most part have very good reasons for not wanting to mention the 'gold' word as it is and gold stocks are a contrary investment to their 'books.' It does not go unnoticed that this $80 runup has been only slightly covered by Moneyline. What is more, you clearly don't have the 'big picture' and, in my opinion, you are going to likely suffer credibility when the gold runs to $1,000 per ounce and you finally get on board with some of the excitement there. Because you don't have anaylysts who understand the market and who aren't short the gold market (in other words, you can't have Bullion Bank gold experts talk about the gold market because they will talk their book: gold shorting -- they have been involved in gold shorting and leasing of gold into the market for years). To get a truly accurate picture of the gold market you have to interview people like Frank Venerasso or Bill Murphy ( This email address is being protected from spambots. You need JavaScript enabled to view it. ) for a truer picture of the problems causing the gold market to explode. Once you have interviewed these guys then bring on the bullion banks for there story. Other possible interviewees? Gold mining presidents of non-hedged mining companies. If you pick a highly hedged company like Barrick or Placer Dome you will again get a biased opinion of gold because these folks are heavily short the market or hedged, as it were, and will talk down gold in order to possible save their skin right now.

Why concern yourselves with being the first major network financial news show with a special on gold? Because, by not doing it you will loose credibility. It is clear to me and I would guess others, that you only cover two of the three markets well: bonds and stocks. Any financial knowledgeable person knows there are three sides to investments: stocks, bonds, and gold. And when gold does go to $1,000 per ounce or higher and all of sudden you start to cover it, people will begin to question why it got so high before Moneyline started to explain things. They will realize that Moneyline follows the trends that are popular or that "folks want to hear" and not what is hot and important but not widely understood. But when gold does hit the $1000 mark and you waited to cover it then, people will say, "hey, why are they just now telling me about this?"

Here are some reasons that you may consider doing an expose on the gold shenanigans that may cause an explosion in gold prices:

Rumors of market manipulation and gold leasing by the federal reserve.
Rumors of bail outs by the Fed for 'in-trouble' bullion banks such as Goldman Sach's bullion division.
A whopping 14,000 ton gold short position overhanging the LBMA and COMDEX.
Significant open interest at the above with extremely low gold inventory to back it.
Rumors of physical gold not available in quantity anywhere in the world for shorts to cover their gold hedges or short positions.
GATA (Bill Murphy) and company saying that the gold market is totally manipulated.

So imagine if Moneyline ignores or doesn't cover any of these or only some of these topics and it turns out to be true (as I believe it to be). Credibility folks. Because one day we will all wake up and gold will have risen that far ($1,00 or higher) and you will be scratching your heads in wonderment. Now is the time to investigate the above allegations, rumors, and innuendos to see where the truth lies and the rumors end.

I would suggest your folks scour the www.usagold.com, the www.kitco.com, and the www.gold-eagle.com web sites for clues and possible stories to confirm (or deny). The gold market NOW warrants your attention, for failure to get in early on the affairs here will be a great diservice to your viewers in the end.


Steve


PS. Here is a somewhat shocking story by Bill Murphy of GATA and what he considers going on in the gold market. Note the rumors about the fed intervening in the gold market.

11:35p EDT Tuesday, October 5, 1999

Dear Friend of GATA and Gold:

I'm sending you the whole of GATA Chairman Bill
Murphy's "Midas" commentary tonight at
www.lemetropolecafe.com in the hope of letting
everyone know that any momentary calm in the
gold market only masks the panic that continues
backstage. The short squeeze is just beginning.

Please post this as seems useful.

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

* * *

MIDAS COMMENTARY FOR
TUESDAY, OCTOBER 5, 1999

By Bill Murphy
www.lemetropolecafe.com

Spot Gold $324.40 up $8 Spot
Silver $5.55 down 3 cents

Technicals

"Vox populi, vox Dei" -- "The voice of the people is
the voice God."

The gold market continues its rocket ride. Today the
December futures contract traded as high as $339 early
this morning before selling off going into the Comex
open. The gold market is on fire.

When gold was trading in the $250s, Midas told you that
we had the shorts "right where we want them." Many of
you believed in what I had to say and loaded up on gold
call options. Congratulations. While some of you were
buying calls, futures, gold stocks, etc., the bullion
dealer camp was laughing at us. We knew then that we
had them, and we know know that we do.

Some of the bullion dealers, overhedged gold companies,
and gold-borrowing funds are in big trouble. Last night
I sent out commentary that included this statement:
"Our camp will be more gracious than the Hannibals have
been. We will show mercy on them and let them out of
the back end of our 'enveloping horn.' When the price
of gold hits $340, we will accept their surrender."

I never meant to suggest that I would be happy with
$340 gold. This morning I did a radio interview about
GATA with the well-known Alec Hogge of South African
radio. When asked where I thought the price of gold was
going, I told his listeners that, in my opinion, the
proper equilibrium price is a bit north of $600.

Anyway, never have I received such an onslaught of the
same sort of feedback. Such as:

"As the man at the BIS said ... Gold will take no
prisoners."

"What do you mean that you will accept their surrender
at $340? Peanuts to you."

"Why take prisoners? These jokers have shown no mercy
for the past 10 years! Most of my mining stocks are
still a fraction of what I paid, at least one is in
Chapter 11, and another one (Benguet B) has not traded
over 25 cents (yes, cents) for the past year. (The
story of how it stays listed on the Big Board is the
subject of another investigation.) Gold goes up 25
bucks and you want to be Mr. Nice Guy. Give us a
break!"

The Cafe and the Internet have spoken. In earlier Midas
commentary I suggested that what we would eventually
have is a "fight to the death" in the gold market. In
the Roman Coliseum days the gladiators battled until
one beat the other. The victorious gladiator would look
up to the adjudicator to see if he would get a "thumbs
up" or "thumbs down" on whether to finish off his
vanquished foe. The adjudicator would often listen to
the crowd for direction. It was called "Vox populi, vox
Dei."

You have been resounding. Thumbs down to Hannibal
Lecter and the Hannibal Cannibals.

That can happen in many ways. One of them I told you
about this summer. Do you remember when I mentioned
that one of the Cafe's most plugged-in sources told me
that plans were being set in place to squeeze the
December Comex gold contract? That plan is still intact
and gaining advocates. At the time I noted that squeeze
artists were buying the December gold contract and
selling April and June.

The open interest on Comex is 222,031 contracts, having
gone up 7,449 contracts more yesterday. The December
open interest rose 6,263 contracts and now stands at
136,022 contracts or 13.6 million ounces. There are
less than a million ounces of gold in the Comex
warehouses. Of course most of the specs do not want to
take delivery, but not all the gold in the warehouses
is available either, as much it just sits there for
margin purposes.

The August futures contract was almost squeezed
recently, but one bullion dealer let the shorts off the
hook for a $2 or $3 premium over the contract price.
You might recall that Goldman Sachs took delivery of
more than 90 percent of the August deliveries. Our camp
speculated at that time that they were trying to get
their hands on as much physical gold as possible
(either for themselves or for clients) in case of times
such as we have now.

If the August contract was almost squeezed in a dull,
glacier-like gold environment, what do you think they
will do to the December contract in this new blazing-
hot environment? As we head into the late fall, the
gold shorts are going to have to deal with the monster
call option position that is now only $65 above today's
close, restricted gold lending by the central banks and
building Y2K fears. The recipe for a gold short squeeze
will get better and better.

The gold shorts and the Hannibal Cannibal bullion
dealers have had it their way for years. It is payback
time. Big-time!

Don't be too stressed that silver has not taken off
like gold yet. Many of the hedge funds were long silver
and short gold. They are buying back their gold and
selling silver now. In a recent Midas you were informed
that sources had told us that Moore Capital could be
short as much as 25 million ounces of gold. Moore was
the big silver seller today. They must have tremendous
margin call pressure and need to sell to shore up their
balance sheet.

$9.78 silver coming.

Fundamentals

The big story of the day for most was Ashanti
Goldfields. They have been one of the leading
proponents of hedging and have massive forward sale
positions. The other day they announced that they had
restructured their hedges. The marketplace took that to
mean they covered their hedges. The Cafe's John
Brimelow was not fooled and told me so at the time. The
bullion dealer camp was spreading the word that had
Ashanti had covered and the gold market had taken the
company's buying well. But Brimelow doubted that they
had covered and was proved right today as it was
disclosed that Ashanti's hedge book still represents a
net hedge of 10 million ounces. That shocked industry
participants.

More from today's Platts: "The sharp rise in the gold
price since the Sept. 26 announcement of gold sale
restrictions by the 15 European central banks 'has
resulted in a substantial increase in the value of
Ashanti's unhedged reserves,' the company noted. The
rise in prices and increased volatility 'has led to
certain counterparties being entitled to margin calls,'
the company said. Ashanti 'has entered into a joint
arrangement with its major hedging partners for
continuing support,' it added."

The market told Ashanti today what it thought of this
announcement. Ashanti stock sank to something like 5
1/2 from 9 3/8 with the price of gold going up $8. What
gives?

Ashanti and its bullion dealers, that is what. Sources
told me today that Ashanti has big problems relating to
maturity mismatches, margin call pressures, and forward
sale buyback liquidity problems, and are suffering from
faulty hedging programs laid on them by certain
consultants and bullion dealers.

I was informed today that Ashanti had a $300 million
margin gap with its bullion dealers. I am told that
Goldman Sachs is Ashanti's main dealer. That means that
the bullion dealers front the first $300 million of
margin calls. Of course that is no picnic for the
bullion dealer. Stress surfaces in all quarters and
that stress feeds on itself throughout the bullion
dealer and gold producer camps.

Another source told me that Ashanti started to reel at
$280 gold, much less $325 gold. Ashanti is hedged as
much as 10 years out. There is not a big market for
getting out of forward-sale 10-year-out gold positions.

Ashanti has significant problems that are likely to
worsen.

With every Midas now I try to explain that gold is
exploding when almost no one thought it would because
the industry was working from disinformation supplied
by the bullion dealer camp -- many of them old Hannibal
Cannibals. Their allies too. For instance, note these
comments by Barrick Gold's Jamie Sokalsky in a Dow
Jones story:

"'Gold producers account for perhaps 3,000 tonnes of
short positions, about two-thirds of the market total,'
according to Jamie Sokalsky, chief financial officer of
Toronto's Barrick Gold, one of the world's largest
producers.

"Gold producers took short positions to hedge against
falling prices, essentially locking in sales prices
before gold is even mined. Now, with gold prices
soaring, those short positions are money-losers, and
the market is bracing for massive unwinding by
producers.

"'This is only the first round or two of short
covering,' one commodities analyst said."

Sokalsky is telling everyone that the total number of
gold loans is only 4,500 tonnes (two-thirds of 4,500 is
3,000). He is using Gold Field Mineral Service numbers.
GFMS is a Hannibal apologist. The Cafe uses Frank
Veneroso's numbers and they tell us that the gold loans
are probably a bit greater than 10,000 tonnes.

Who is right? Well, if GFMS was right and the loans
were only 4,500 tonnes, the gold market would not be
doing what it is doing today. Case closed. Yet Barrick,
one of the most heavily hedged gold companies in the
world, continues to spout the Hannibal line. Barrick is
becoming a sad case. Its stock was hit today too as the
Ashanti news has run up the red-flag warning signs of
the companies that have overhedged.

Wake up, Barrick! You have been in the penthouse in
public esteem. If you tarry too long, you might end up
in the outhouse.

There might have been a much bigger story today. More
from Sequin, who put this up at the Kitco gold site:

"The big big rumor today is about the Fed bailing out
Goldman on 10 million ounces. The market is all excited
about it: THEY are doing something. Since it is the
role of the FED (as painful as it might be for us) to
prevent a systemic collapse, there might be some basis
for the rumor.

"Still, I would be surprised, since the Fed hasn't been
seen in the lease market for ages.

"Yes, they get some other CBs to do the dirty stuff for
them. But they are limited by status. So it would be
interesting to know to what extent they are at liberty
to do that.

"Technically, leasing is not selling. However, at 10
million ounces a clip, we might not see them every
other day.

"Today is the day to speak about black holes.

"You know, if you happen to fly in their vicinity, you
get sucked in, but you won't care, since at this point
the whole spaceship will not even be the size of a
grain of sand.

"Well, there is a black hole in our universe and it is
called the 390 December call. It is traded on Comex and
yesterday the open position was a tad above 55,000.

"That's a nice 5.5 million ounces and change. When you
know that major market makers show $3 wide on 10,000
ounces, you can bet on some fun in case we go in the
low 360's.

"Let me explain. As we go close to the strike, the
shorts, who usually are option market makers, will have
to adjust their delta. (The delta is the sensitivity of
an option to spot moves.)

"Hence, the higher the spot goes, the more they will
have to buy. In such an illiquid market a few million
ounces will push it through the strike in seconds.

"Since the law of maximum pain applies these days in
gold, I would not be completely surprised to see a
seriously punishing run-up there and higher. This is of
course without taking the OTC derivatives into account.

"Only five weeks to go, but I know a few options
dealers who are not going to sleep that much."

Sequin is obviously a pro; he knows his stuff. It is
interesting how he is commenting on the December $390
calls too. If he and I are jumping up and down about
it, so are a lot of others. This is explosive!

But what may be more explosive is what Sequin says
about Goldman Sachs and the Fed. How many times have
you heard Midas pound away on this theme? It extends to
the core of the Bank of England sale, etc. And it is
supportive commentary of the "Bombshell" I delivered to
you last Friday in Midas commentary. The key point from
that Midas:

"Two days ago I received information that a futures
commission merchant (a Refco-type firm) was told by
another futures commission merchant that it was not
prepared to deliver gold on its gold forward or futures
contract obligations that were expected by a client of
the firm that was standing for delivery. In essence,
the shorts were declaring force majeure: 'We cannot
deliver.

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

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

Now two days later the word on The Street is that
Goldman was fed 10 million ounces by the Fed. Don't you
think that our "Bombshell" story should gain
credibility and get some legs?

Potpourri and the Gold Shares

The XAU retreated today to close at 84.61 down $4.20.
Gold was strong all day, so the XAU was perplexing to
many. But it isn't really perplexing. We have told you
about the hedge funds being short gold. We have even
told you about the hedge funds being long the big cap
gold stocks. The hedge fund gold shorts are covering
their gold shorts, so they are selling their gold
stocks. They have to get out.

In addition, the Ashanti issue has many money managers
reassessing their gold stock allocations.

>From Reuters: "Gold trading in Pakistan, one of the
largest importers, has largely come to a halt as rising
international prices have left several major players
unable to deliver their commitments, traders said on
Tuesday."

The gold premiums in Asia are holding up surprisingly
well on this mega move up for gold.

Cambior is a great little gold producer, but it's
shares fell 21 percent today, its biggest loss in 4
years on concerns that is too has overly hedged.

Funny, a couple of months ago the Hannibals strongly
suggested that the likes of Newmont sell a good deal of
forward production for fear of losing its credit
ratings. Now the price of gold rallies sharply and the
companies that have stuck their toe too much in the
hedging waters might lose their credit ratings anyway
because they hedged TOO MUCH, not too little. What an
industry!

Anglogold came out with a strong press release today
announcing that it "has no gold lease rate exposure at
all before early 2000 (and limited exposure
thereafter), and this has contributed substantially to
the stability of its hedged position." In other words,
Anglogold's bullion dealers have the "roll risk," not
Anglogold.

Tiger Watch: This hedge fund continues to stink up the
place. Its net assets have slumped from some $22
billion down to $8 billion. The fund lost another 6.7
percent for September and is now down 23 percent for
the year. I wonder how many illiquid positions Tiger
still has on its books and is stuck with.

More bullion dealer hedging problem news from Reuters:

"A bullion trading source said market talk that an
Australian bank was facing huge losses from recent
sharp gains in bullion prices triggered fresh buying as
the bank would be forced to cover its position soon.
Banking sources in bullion ma

The ScotCOMEX $$$$#1562910/06/99; 03:48:27

Goldspoon, If it's not too late, put me down for $ 333.33
The Scot

CoBra(too)Can't agree more with your #15628 Sir SteveH.,#1563010/06/99; 04:10:12

only allow me to make one remark. You've named Barrick and Placer Dome as overhedged gold producers. I would think these two companies are very different kettle of fish. While ABX, correctly can be termed a hedge fund, though still having some great gold deposits (question will be who will own them at POG, say 500+), PDG is still a very viable gold miner, with a hedge position congruent to their business needs and structured to be a real "hedge". Since, my group has been in negotiations with the PDG management off and on for some years, I've had the opportunity to learn more of the company's philosophy and have been impressed with their able and savvy management team. The latest "crown jewel" in PDG's mine portfolio are the "Pipeline" deposits at Nevada's Crescent Valley (Battle Mountain Trend)the Cortez JV (60%PDG/40%RTZ), a 10Moz deposit and still counting.
Thank you and regards CB2

leonardCNBC#1563110/6/99; 5:27:56

stev i just read your post on cnn,if you wont to see biased reporting on gold you have to chick out CNBC,i belive they fear for ther jubs an just say wate ther told to say.
The BelieverYGM#1563210/6/99; 5:37:41

Thanks YGM,
I did get over to Gold-Eagle and read your post.
And yes,I'm hearing the rumors about $2000 gold
and cheap dollars too.

RossLYGM#1563310/6/99; 5:47:14

You're making sense to me!
Thanks for expressing your views.

RossLA note to TC#1563410/6/99; 5:54:56

First notice of delivery on a COMEX future is not binding. What matters is how many longs demand delivery and refuse to roll over their contract at the expiration. A squeeze happens when, in a sort of poker game, longs wait 'till the last hour to get the shorts desperate.
SteveHProtecting Gold#1563510/6/99; 5:57:33

http://sorrel.humboldt.edu/~jae1/emenLyngScrutiny.html

Gold getting hammered right now, Dec at $317. (did GS get more gold from the Fed?)

Summary: A Michigan Concealed Weapons Board refused to renew a CCW permit. The person sued on a number of counts, one being a 14th Amendment under equal protection of 14th Amendment. The Court ruled that the 2nd Amendment does not provide individual fundamental right to bear arms as to which strict scrutiny analysis would be applicable. The emerson case (see link below) concluded that the 2nd Amendment is an individual right thus countering the Michigan's court ruling regarding Strict Scrutiny not applying and that the state has an obvious "legitmate interest" in limiting access to weapons peculiarly suited for criminal purposes (People v McFadden). That should open the doors to a less discriminatory CCW boards, at least on a complaint to a court regarding any decision using Strict Scrutiny and equal protection.

Rational Basis or Strict Scrutiny

In the United States courts exercise the power of judicial review over the actions of other governmental bodies. They may determine whether an act by the President, Congress, a national, state, or local administrative official, a state legislature, a local governing board, or a lower court is valid. They do not judge whether an act is wise or foolish, but whether is is constitutional or unconstitutional, whether it is permitted or null and void. The U.S. Constitution prescribes the legitimate powers of the national government, reserves others to the states, and protects individuals from governmental invasion of their freedoms of religion, speech, press, and other rights.

Based upon the interpretation of Article VI, clause 2, by Chief Justice John Marshall in Marbury v. Madison, (1803), judges may invalidate a government's action if the power for it is not prescribed in the Constitution, or if it conflicts with a right of the people. Of course the power does not have to be expressly delegated to the national government; it may be implied from Article I, section 8, clause 18, the "elastic clause." See Chief Justice John Marshall again in the opinion of McCulloch v. Maryland, (1819)

In Lyng v. Northwest Cemetery Protective Association the question was whether the Forest Service had the power to build a road and execute its forest management plan, i.e., harvest timber, under the authority of Article IV, section 3, clause 2, or if such action conflicted with the rights of persons to the free exercise of their religion guaranteed by the second clause of the First Amendment.

The Court concluded that the road and timbering were internal government affairs that only incidentally affected the free exercise of religion. Therefore, the Court applied the so-called rational basis test of judicial review. That is, it upheld the government's action as a rational means of accomplishing a legitimate end. If, however, the Court had deemed there was a threat to a fundamental right, it likely would have increased its scrutiny of the government's action, requiring that the means be necessary to achieve a compelling state interest. In other words the Court in Lyng deferred to the government's use of National Forest property. It upheld the decision to build the road so long as it was a reasonable means to achieve a legitimate purpose. The road did not have to be necessary to achieve a compelling state interest. See footnote 4 in then-Associate Justice Harlan F. Stone's opinion of the Court in U.S. v. Carolene Products, 304 U.S. 144 (1938).

http:/nrawinningteam.com/cummings.html is the emerson case that recently ruled the 2nd Amendment is an individual right not a state right.

elevator guyFlat Earth Society! RE: Black Blade Msg id# 15625#1563610/6/99; 7:01:32

I know what the Flat Earth Society is doing now!

Thhey have moved into journalism, and are covering the precious metals markets!

8^)

The ScotGold War#1563710/6/99; 7:04:56

Kitco's gold graph this morning looks like a war zone.
What strange forces these are at work.
The Scot

Goldspoon***Comex Close****#1563810/6/99; 7:21:50

apdcheif-$399
Canuck- $343
Granny- $357
RossL- $332.30
onlychild$336.50
Tanglewild$318.80 (like your handle)
Silvertongue$313.90
Goldspoon$343.73 (can't stand this guy..such a knowit all)
Tomcat $325 (keep it up you'll go places)
Canamami $321.23
Bill $318.50
Hill Billy Mitchell $309.50
Coin Guy $334.75
Black Blade $xXx.xX $XXx.Xx $323.50
Gandalf The White <;-) $321
SStins $362.50
Marius $338
flierdude $316.00
Simply me $330.50
jaydeevee $318.50
Goldfly, Spike and Spot $332.00
TEX $332.25
Peter Asher +$30.25 from yesterdays close....????
Jason Hommel $$348.00

Belated Guesses
The Scot $333.33
elevator guy $337

Hope i did not miss anyone... and Good Luck!!

Sorry..i'll be to busy tomorrow ...maybe someone else would like to play bookie for a day??

elevator guyCOMEX in 1979-80?#1563910/6/99; 8:01:19

Has anyone been in the gold market long enough to know what happened to the COMEX exchange in 1979-80, when gold hit an all-time high?

Did the market close? Was there any gold available, and if not, were there still cash settlements on contracts?

Peter AsherGoldspoon#1564010/6/99; 8:52:06

Typo --$330.25
USAGOLDToday's Gold Market Report: A Well-Deserved Breather in Early Trading#1564110/6/99; 8:54:44

MARKET REPORT (10/6/99): Day Eight of the Big Breakout....Gold taking a
well-deserved breather after hitting two year highs at $339 yesterday......... Interesting
quote from a European trader reported on FWN: "We're just easing into the backfill created
by the rally (on Tuesday)...The shorts have mostly covered, there are just a few daily short
players left--nobody will hold short positions overnight with the market longs playing the
market in the manner that they are."..........................Correct me if I'm wrong, but if
that doesn't sound like we are in a free gold market, I don't know what does. The short
position is no longer sacrosanct? Quite an attitude adjustment......At any rate Frederic
Panizutti disagrees with that trader: "The market being still short, any up-move would likely
result in irrational panic buying."..................The Ashanti Goldfields story continues to
cause concern not just for that company itself but the potential ripple effect to other
"hedged" producers. Bridge News says: "Ashanti Goldfields Co. Ltd. said today that the
recent huge rise in the price of gold has left it with an obligation to pay margin calls to its
gold-hedging counterparties, but that it has enter r ed an arrangement with its hedging
partners for continuing support. On Friday, Ashanti said it had restructured 80% of its
hedges to remove its sensitivity to the rising price.".......As a warning to all those who
think a "gold stock is a gold stock" the warning is clear: the XAU retreated significantly as a
result of the Ashanti news and the portential for similar problems surfacing at other
producers........ (Editor's Note: At the time of the Friday announcement, Ashanti forgot to
tell us that they were on the phone to their brokers about some hefty margin calls. I guess
you can define a margin call as "restructuring" if you want to. )................ Alan
Greenspan and the Fed played tag with the interest rate devil at yesterday's meeting and
chose not to get burned with Y2K looming on the not too distant horizon. The stock and
bond markets appeared to be in a quandary over what will happen next. It matters not -- the
markets will determine interest rates. More specifically, Japanese bond traders will
determine U.S. interest rates in the near term............. Today the yen is down and U.S.
stocks and bonds are up...............The gold market has moved away from its long time
trading rhythm wherein the price was set in New York on the COMEX and the rest of the
world played catch-up overnight. Now the market is being driven higher nearly every night
overseas and New York paper players have been throwing water on the
surges.......................Jeff Rhodes, general manager for Standard Bank London's Dubai
office as quoted on this morning's Reuter's London report: "Having lived through the bull
markets of 1978/1980, 1986/1987 and 1993/1995, the first lesson is never to stand in the
way of a runaway bull.''.......................That's it for now, fellow goldmeisters. Have a
good day. MK

The October edition of News & Views will be ready early next week and we invite all
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TownCrierBOJ mulls controversial new operation#1564210/6/99; 9:00:52

http://biz.yahoo.com/rf/991006/ga.html

The yen has risen about 15% against the dollar since June. the Bank of Japan has come under pressure to adopt a more aggressive policy of easing to "prevent the yen from sapping offshore corporate profits while the recovery is fragile." (Notice here how the pressure and tendency is to weaken the purchasing power of currency to the detriment of an individual's savings in favor of corporate profits. Many southeast Asians have already discovered that gold won't betray them in this fashion.)

The BOJ is considering a new operation to accelerate its supply of funds through outright purchases of short-term government securities by the central bank from the market. Critics say would turn the BOJ into a money printing machine for the government and represent a monetisation of government debt.

Kazuo Mizuno, general manager of Economic Research Department at Kokusai Securities summed it up like this: "If the BOJ accepts to do more, that would strengthen the current vicious cycle of money flow from Japan via Europe to the U.S. financial markets and create massive U.S. external debt, and the BOJ would have to be involved in this cycle not only this year but next year and onwards. As a result, the BOJ would not only lose its independence from the government, but its monetary policy would have to go under control of the United States."

TownCrierFed adds $4.011 billion in banking reserves; 1st day broader collateral use#1564310/6/99; 9:20:15

http://biz.yahoo.com/rf/991006/jy.html

The Fed debuts its "tri-party" settlement operations developed ostensibly as a Y2K contingency plan. Between this operation (whereby the Fed essentially monetizes a broader array of debt-based collateral) and the Japanese proposal described moments ago, we'll all be hip deep in cash soon. Suggest you act accordingly and get some gold platform shoes...or maybe gold stilts.
TownCrierBOJ's Yamaguchi to attend Paris central bank talks#1564410/6/99; 9:26:32

http://biz.yahoo.com/rf/991005/bfy.html

On October 7-9, Bank of Japan Deputy Governor Yutaka Yamaguchi will attend a financial conference hosted by the French central bank. So soon after the gathering of the G7 and IMF, we wonder what's up.
Gandalf the WhiteSir Elevator Guy's Question #1564510/6/99; 9:31:09

Re: COMEX in the 79-80 era. IF you will allow me to setforth my recollection of the $800+. gold spike, -- (BUT remember that I am old and senile! )--- IT was not the same as now !! -- The gold market was greatly influenced by the silver market where the Hunt Bro's were attempting to corner the market and did until they COMEX changed the rules and the Hunts wished to try and sell some of the paper that they had collected. -- The gold market was pushed by "Joe SixPac" and everyone had a gold chain around either their neck (Male) or their waist or ankle (Female)!!
-- This 80's market was like the forthcoming end of this present market projected at about 2005 when ALL the public finally figures out that the best thing to have in your pocket is a GOLD coin rather than the paper with the dead Presidents (and others) pictures on it. --- CONCLUSION -- History will repeat again, but in a far more dramatic way.
<;-)

JonVolume of shorts#1564610/6/99; 9:35:42

Today's USAGold report quotes an analyst who said the shorts have mostly covered. If that is the case, why isn't POG substantially higher? Could it be that quantity of shorts was greatly overstated? Or perhaps, much of the short position is still open? Comments please. Thanks
nugget101Bill Murphy interview#1564710/6/99; 9:38:58

Bill Murphy (GATA) was on Jeff Rense's show of 10/05 (www.sightings.com).
Check it out if you can.

The ScotLive Gold or Dead Presidents......Your Choice#1564810/6/99; 9:44:17

How about the above for a bumpersticker, do you think
Joe Sixpack would understand????
The Scot

PH in LARecollections of 1980#1564910/6/99; 9:58:10

Gandalf:

Just at the moment when gold was at ±$800/oz, someone hired one of those skywriting airplanes on a hot summer Sunday to write: "Gold--Best Investment" in the skies over Los Angeles. At that moment I knew that someone was desperate to unload (distribute) a large amount of gold to the general public. Sure enough... very shortly thereafter the price had fallen dramatically, and Mr. and Mrs. Joe Sixpack had been fleeced again.

PH in LAJoke of the Day#1565010/6/99; 10:17:24

Subject: Wife 1.0, Tech Support Request

Last year I upgraded Girlfriend 1.0 to Wife 1.0 and noticed that the new program began unexpected child processing that took up a lot of space and valuable resources. No mention of this phenomenon was included in the product brochure. In addition, Wife 1.0 installs itself into all other programs and launches during system initialization where it monitors all other system activity. Applications such as Pokernight 10.3 and Beerbash 2.5 no longer run, crashing the system whenever selected.

I can not seem to purge Wife 1.0 from my system. I am thinking about going back to Girlfriend 1.0 but un-install does not work on this program. Can you help me?

Jonathan Powell


Dear Jonathan Powell-
This is a very common problem men complain about but is mostly due to a primary misconception. Many people upgrade from Girlfriend 1.0 to Wife 1.0 with the idea that Wife 1.0 is merely a "UTILITIES & ENTERTAINMENT" program.

Wife 1.0 is an OPERATING SYSTEM and designed by its creator to run everything. WARNING DO NOT TRY TO un-install, delete, or purge the program from the system once installed. Trying to un-install Wife 1.0 can be disastrous. Doing so may destroy your hard and/or floppy drive. Trying to un-install or remove Wife 1.0 will destroy valuable system resources. You can not go back to Girlfriend 1.0 because Wife 1.0 is not designed to do this.

Some have tried to install Girlfriend 2.0 or Wife 2.0 but end up with more problems than the original system. Look in your manual under ----Warnings-Alimony/Child Support.

Others have tried to run Girlfriend 1.0 in the background, while Wife 1.0 is running. Eventually Wife 1.0 detects Girlfriend 1.0 and a system conflict occurs, this can lead to a non- recoverable system crash. Some users have tried to download similar products such as Fling and 1NiteStand. Often their systems have become infected with a virus. I recommend you keep Wife 1.0 And just deal with the situation.

Having Wife 1.0 installed myself, I might also suggest you read the entire section regarding General Protection Faults (GPFs). You must assume all responsibility for faults and problems that might occur. The best course of action will be to push the apologize button then the reset button as soon as lock-up occurs. The system will run smooth as long as you take the blame for all GPFs. Wife 1.0 is a great program, but is very high maintenance.

Suggestions for improved operation of Wife 1.0
-Monthly use of utilities such as TLC and FTD
-Frequently use Communicator 5.0

-Tech Support

elevator guyWife 1.0#1565110/6/99; 10:31:49

Funny you should mention this program! I'm having trouble with the data from my system, as it is often unitelligible. Its hard to tell if there is a critical fault with the hardware, or if there is just lost file fragments jamming up the works.

Also- it appears impossible to run Disk Defragmenter, or scan disk.

Control-alt-delete has no effect. Guess I'll wait and see if the system re-stabilizes itself.

Thats too funny, PH!

elevator guy@Gandalf the White#1565210/6/99; 10:40:35

Thanks for your perspective! And do you remember if the COMEX stayed open? What I am getting at here, is an FOA/Another scenario of market shut down. Don't wanna be left holding paper. Just trying to time it right, and not get burned.
Gold DancerPH in LA#1565310/6/99; 11:07:28

What a great joke! I am in the process of upgrading girlfriend 1.0 to wife 1.0. I just became engaged this weekend to the woman I adore and this really made me laugh. I am sure she will also. Thanks.

Gold Dancer

USAGOLDCambior on Ropes?#1565410/6/99; 11:31:28

Gold was down significantly early and is now way up.

Here's why:

The Canadian producer Cambior appears to have sold forward and/or written calls on substantially more gold than they have produced for 1999 and will produce over the next three years, according to a Reuters release issued from Canadian Corporate News.

Cambior for 1999 has written calls on 921,000 ounces of gold at $287. Their 1999 production is estimated by president Louis P. Gignac at 630,000 ounces of gold. In addition they have sold forward another 159,000 ounces at $335 avg price.

In other words, they appear they may be over-extended especially if prices continue to rise.

For the year 2000 they have sold forwarded 642,000 ounces at $298 with another 299,000 ounces sold as calls at $323.

For 2001, 642,000 ounces forwarded at $292 with another 382,000 ounces sold as calls at $352.

Lastly for 2002 they have forwards of 597,000 ounces at $292 and 303,000 ounces of calls at $348.

So this appears to be an incredible gamble with stockholder's money. Most analysts in the gold business consider it imprudent to sell forward or write calls on more than you produce on an annual basis. As one of my associates, how could the lender's mentioned below let them get in this deep?? Incredible.

The report goes on to say that "the counterparties to these hedging operations consist of international banks and financial insitutions, principally lenders in the revolving credit facility. In the context of the rapid rise of the gold price, Cambior has been managing its hedge positions and will continue to monitor the situation. Cambior will pursue discussions with such financial institutions concerning the management of this situation."

I should think they would.

Cambior stock went from $4.74 early in the day to $3.04 now and dropping like a rock. Gold is now up $1.50.

The problem here is not just what happens to Cambior but that this could be going on all over the gold mining industry. This situation follows on the heels of the Ashanti situation which in itself is tenuous. Ashanti borrowed money from its market maker to meet a margin call. People don't understand the import of an event like that. That would be like you getting a margin call from your commodities broker. You say "Sorry, I don't have any money." He responds, "Don't worry about it, I'll lend you the money so neither one of us goes under on this deal, since I don't have enough on deposit." Ashanti does have huge gold reserves so this could translate to simply a liquidity crisis rather than an asset crisis. Ashanti stock is down 65% in two days.

So it goes.

Hard metal in your hand -- the only true safety.

I have to say on this Cambior thing that I could be misinterpreting events, but others must see it the same way given the action in both the gold market and Cambior stock.

We don't know if there's any gold loans associated with this but usually there is when forwards are in place.

jaydeeveeGold seems down $7 in a vertical drop#1565510/6/99; 11:50:06

http://www.usagold.com

Any clues anyone?
jaydeeveeKitco graphs gone haywire again?#1565610/6/99; 11:54:13

http://www.usagold.com

What is the gold price now?
CoBra(too)repost to Steve H.#1565710/6/99; 12:00:08

StH re PDG - even knowing that you're an advocate of pure physical, sound money - please let me follow up on my former post.
PDG - hedge position 4,5 moz = 1,5 y's of production vs 13,5 moz ABX 4-5 y's. Agreed too much at prrices over 350 -400, but actual cost of production favors PDG - if need be.
Conclusion - if gold miners survive it would be the juniors coming close to prefeasibility on major new deposits - as I can't see confiscatory taxation or anything else to that effect (without revolt(ing)s) on a global basis for the "right to min(t)e real money!
CB2

TownCrierCanada's Martin pleased, not surprised by gold price rise#1565810/6/99; 12:13:12

Mont-Tremblant, Quebec--Oct 6--Canadian Finance Minister Paul Martin
said today that he was not surprised by last week's announcement by
European central banks to cap their gold sales. Martin added that the
resulting spike in gold prices also came as no surprise, but said it will
have spin-off benefits for Canada's economy.

Asked if the central banks' statement had surprised him, Martin said
"not really. I think it was a welcome move by the European central banks."
"We're a major gold producer and obviously, anything that increases
the price of gold is going to be beneficial, especially to an awful lot of
communities in Northern Canada," he added.
Martin's comments come, ironically, just 1 day after Canada announced
it had further decreased its own gold reserves by 136,000 ounces in
September, bringing Canada's dwindling gold reserves to just 1.8 million
ounces.
By Paul Badertscher, Bridge News
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.

Gandalf the WhiteSir Elevator Man's other Question #1565910/6/99; 12:30:46

OH INDEED the COMEX did stay open and sold Gold like no end!!! That was the time that the floor Traders were in heaven. -- IF & WHEN the COMEX does come under presure, expect to see a number of rules changes BEFORE the demise of the trading efforts. -- AFTER all fails, THEN we shall see FOA's "freeze" !! Good luck to all you paper traders. Got PHYSICAL ?
<;-)

phaedrusDecember Comex Gold finishes Unchanged#1566010/6/99; 12:49:36

Settled at $326, unchanged. Not bad for starting out almost ten bucks down.

Us paper traders are doing just fine, by the way: gold options currently up in the neighborhood of 2000%.

AELphaedrus#1566110/6/99; 12:56:29

I'm happy with my little june 2000 330 gold call, too... bought for $100 (play money), worth upwards of $1500 now. But it is just play money, which I EXPECT to lose. The nuclear blast could occur at any moment. Meanwhile, have fun, but don't bank on it.
PH in LAAshanti#1566210/6/99; 13:07:57

On Kitco someone is reporting that CNBC has just reported that Ashanti has announced that it will default on its hedge position. Search of Reuters reveals that on Sept. 30th they had announced an 80% successfull unwinding of their overall hedge position. Go figure!

Thursday September 30, 6:34 am Eastern Time

FOCUS-Ashanti scampers to close its gold hedges

By Patrick Chalmers

LONDON, Sept 30 (Reuters) - Ghanaian producer Ashanti Goldfields Co Ltd said on Thursday it closed most of
its 11 million ounce hedge book this week as gold prices soared.

The move, planned for several weeks, unwound 80 percent of the miner's gold hedge book, equivalent to nine million
ounces.

``A very significant amount of this has been done in the last three days,'' Chief Financial Officer Mark Keatley told
Reuters by telephone from Ghana.

Gold has surged from the $250s per ounce in the last 10 days, boosted first by heavy bidding at Britain's 25-tonne reserve gold auction on September 21 and
then taking off from $270.00 after Sunday's pledge by European central banks to curb reserves sales, gold lending and derivatives activity.

Gold spot and forwards saw frenzied activity through into Wednesday, with spot prices spiking to two-year peaks in the high $320s while one-month lease rates
stretched to 10 percent.

``We were not buying at $327.00. We were not buying anywhere remotely near those prices. On Monday and Tuesday morning the price was in the $280s,''
Keatley said in reply to questions about when hedge positions were covered.

Wednesday's lease rate moves, which pushed the market into backwardation, meaning spot prices exceeded those for futures, were evidence of a bullion market
gasping for liquidity.

Forward hedged miners with floating lease rate contracts, as opposed to fixed rate ones, were particularly exposed to the higher rates, an issue Ashanti addressed
in its news release.

LEASE EXPOSURE

``The company had already, before the rally, eliminated any exposure to floating lease rates during the rest of 1999 and the first quarter of 2000,'' Ashanti said in
the statement.

Gold miners use a variety of hedging strategies to protect themselves from falling gold prices, including both buying and writing options and executing forward
sales.

The significance of choosing a floating lease rate versus a fixed one is that miners on the former can boost profits on forward sales if the difference between gold
lease rates and, normally higher, inter-bank money rates increases.

Such tactics had been a reasonable bet before last May, when Britain's announcement of a 415 tonne reserve sale sparked a 10 percent gold price fall and
increased lease rates.

With lease rates at the levels seen this week, floating rate hedges would be distinctly hazardous, with exposed mines or short funds facing rates five percentage
points above money rates.

``I am very concerned that we are going to see some casualties,'' Jessica Cross of Virtual Metals Research and Consulting said on Wednesday in reference to
those miners overly reliant on gold derivatives.

SUCCESS IN TANZANIA

Ashanti also announced a successful drilling campaign at its Geita project in Tanzania, which it said had boosted resources by 20 percent.

The company was revising the Geita mine plan to lift gold production to 500,000 ounces per year at a cash operating cost below $180 per ounce, it said in the
statement.

The Ghanaian miner repeated its mid-September report that overall production and costs for the second half of 1999 would be broadly in line with the mid-year
forecast of 800,000 ounces at a cash operating cost of $214 per ounce.

TownCrierPlaying Matchmaker#1566310/6/99; 13:26:23

Sir HopeingII (10/05/99; 22:41:13MDT - Msg ID:15610) asked a question yesterday summarized "When "delivery intention" is given, can it be changed?"

Sir RossL (10/6/99; 5:54:56MDT - Msg ID:15634) was good enough to provide an answer summarized "First notice of delivery on a COMEX future is not binding."

No one in The Tower is actively engaged in gold derivative trading, so specifics on COMEX "rules of engagement" are always gladly deferred to any among the Round Table that might know the details of any inquiry such as this.

Sir RossL, if you are in a position to do so, it might be helpful to Sir HopeingII (and probably many others--Tower included) if you could elaborate on the point at which these delivery intentions do become "binding" if not so upon First Notice. Are there stats available somewhere, as with "COMEX Delivery Intentions," that track the total of reneged delivery intentions? Our impression was that any action could essentially be undone, but at whatever cost was associated with taking a position in another contract with which to facilitate the undoing.

Thanks to both of you, and everyone else, for the continuing input.

phaedrus@AEL re 330 calls#1566410/6/99; 13:29:35

I've got a boatload of those calls too.

What do you mean, you "expect" to lose on your calls? Do you expect the dollar to become completely worthless, or the Comex to go out of business, or what? Their doors didn't close when gold went to $800 before, so why should they now?

Yellin' of troyname for goldspoon's palladium horse#1566510/6/99; 13:37:19

I suggest naming the nameless horse Gold Fusion (alluding to
palladium's moment of notoriety)--or does that sound too
skeptical and pessimistic?

TownCrierSir Tex and "Three Kings"#1566610/6/99; 13:39:56

In your post yesterday (10/05/99; 23:17:13MDT - Msg ID:15617) you concluded with the comment, "Last but not least.......Three Kings, see it."

Do you agree with The Tower's review of the movie yesterday in our post: TownCrier (10/05/99; 21:34:55MDT - Msg ID:15586)?

Do you (or anybody else that has already enjoyed Three Kings) have any comments on what impression this movie may make on the viewing public in regard to gold and freedom, etc.? Please don't reveal anything that might spoil the drama for those who have not yet seen it.

LeighYellin' of Troy#1566710/6/99; 13:41:20

Dear Yellin': I'm afraid Goldspoon's horse is a platinum one, not palladium. It's my fault; I thought he was palladium, and I said that a couple of time. So you were inadvertently given the wrong idea. I apologize.

Why are you called Yellin' of Troy. Do you yell a lot?

YGMHedge Book Figures --According to Tim Hoares' Roger Chaplin#1566810/6/99; 13:52:46

Wed Oct 6 /99 Total Hedge Book Positions-----------------------
Company - Approx % of 1999 prod - Equiv. Yrs Prod'n
Anglogold - 77 1.6
Newmont - 35 0.7
Goldfields - 20 0.3
Barrick - 100 3.1
Placer Dome- 45 3.0
Rio Tinto - 0 0
Homestake - 20 0.2
FCX - 0 0
Ashanti - 61 7.4
Normandy - 13 2.5

YGMHedge Book Figures --According to Tim Hoares' Roger Chaplin#1566910/6/99; 13:57:48

Wed Oct 6 /99 Total Hedge Book Positions-----------------------
Company - Approx % of 1999 prod - Equiv. Yrs Prod'n
Anglogold - 77 1.6
Newmont - 35 0.7
Goldfields - 20 0.3
Barrick -----------------------100-------------------------------- 3.1
Placer Dome-----------------------45-----------------------------------3.0
Rio Tinto ------------------------0-------------------------------------0
Homestake -----------------------20------------------------------------0.2
FCX ------------------------0--------------------------------------0
Ashanti ------------------------61------------------------------------7.4
Normandy ------------------------13-----------------------------------2.5

gidsekHedge Positions#1567010/6/99; 13:59:26

Franco Nevada 0% zip.. nada.. :)

gidsek

CoBra(too)Hi there YGM -#1567110/6/99; 14:01:43

Seems like Ashanti defaulted on a Goldman "Sucks" margin call for $400 million on hedge of 10 moz (10 y's production)
-it'll catch up to GS as well when NY Fed runs out of physical - good to see you back for the mayhem! best CB2

YGMOh well I tried---I'm sure you can figure out the first three!#1567210/6/99; 14:02:47

I'll learn how to use this thing someday -Sorry ---YGM
YGMCobra(too)#1567310/6/99; 14:08:12

Thanks--- Seems like every where you look we get different sets of numbers, right down to the so-called real time quotes. Does anybody really know? I suspect w/ the OTC markets they don't and all may be much worse than we suspect. Like I say the three most used words in the near term will be "Gold/Default & Denial" IMHO--YGM.
GoldflyFarfel- this one's for you!#1567410/6/99; 14:09:22

Angel, I hope you like it too. This should really need no introduction, except…. Respects to Tennessee Ernie Ford. The man who said:

"You have to remember, success is in the eye of the beholder."



16 Tons

Let me tell you the story why my name is mud
I worked a hustle in somebody's blood
Fleecing investors and doing wrong
With a line that's a-weak, I'm Martin Armstrong

(Refrain)
You short sixteen tons, what do you get?
Another day order and somebody's debt
BOE don't you call me 'cause I can't cover
I sold your gold down at the COMEX floor

If you see me comin', better run and hide
A lotta men didn't, and their assets are fried
Bars of iron, and vaults of steel
If the Feds don't a-get you, then GATA sure will

(Refrain)

I was bored one morning - I said "gold it don't shine"
Picked up a ledger and I added some lines
Shorted 16 tons of pure refined Gold
And the Vault Clerk said "well a-bless my soul"

(Refrain)

I had a racket but it's down the drain
Leasin' and shortin' is the name of my game
Ran a gold carry with a with the bonds a-buyin'
Can't a-make the margin with my credit line

You short sixteen tons, what do you get?
Another day order and somebody's debt
BOE don't you call me 'cause I can't cover
I sold your gold down at the COMEX floor

I SOOLLLD your GoOoOollllld down at the COMEX floor



Got requests? . This email address is being protected from spambots. You need JavaScript enabled to view it.

AELphaedrus#1567510/6/99; 14:21:34

I mean the sudden freezing/seizing-up of comex and other markets, accompanied (perhaps) by a prolonged and messy settlement period during which physical metal becomes entirely unavailable, and during which the dollar does indeed lose considerable value generally, but especially against physical metal. I may finally get my check for $3000, but it might only buy a half ounce (rather than 10 ounces) -- that is, if it can buy any at all!

Yes, comex did not shut down in 1980, but the probable (no way to verify for sure) underlying fundamentals make for a potentially explosive, unprecedented situation today, versus then. We shall see. I might be completely wrong. It is a hunch, based mostly on what I have read here (and elsewhere, a bit).

AELphaedrus#1567610/6/99; 14:22:07

I mean the sudden freezing/seizing-up of comex and other markets, accompanied (perhaps) by a prolonged and messy settlement period during which physical metal becomes entirely unavailable, and during which the dollar does indeed lose considerable value generally, but especially against physical metal. I may finally get my check for $3000, but it might only buy a half ounce (rather than 10 ounces) -- that is, if it can buy any at all!

Yes, comex did not shut down in 1980, but the probable (no way to verify for sure) underlying fundamentals make for a potentially explosive, unprecedented situation today, versus then. We shall see. I might be completely wrong. It is a hunch, based mostly on what I have read here (and elsewhere, a bit).

Meanwhile I am having fun with my call. May even buy another! Better than the lottery.

Cavan ManDear FOA#1567710/6/99; 14:33:27

I am told the good ship GOLD is preparing to make sail for a new port. While you were away on ship's leave, the captain and crew have been quite busy preparing for the voyage. Is it time now to set the rigging and hoist the mainsail? Will we be in open water soon? What say ye good Sir Knight?

Cead Mile Failte (back).....CM

Cavan Manpeter asher#1567810/6/99; 14:34:38

Peter-Hope I didn't sound too "green" in that last post.
LeighCavan Man#1567910/6/99; 14:39:20

Are you prone to seasickness, Cavan?
TownCrierTea leaves#1568010/6/99; 14:45:20

http://biz.yahoo.com/rf/991006/s9.html

Dollar holds ground vs yen, rises against euro
YGMGoldfly#1568110/6/99; 14:55:11

Your tune will see many wks of #1 on the charts. May even go Gold or Platinum. Excellently done & Hilarious. Thanks for sharing it------YGM.
CoBra(too)CM - I' pretty unmusical (for a Viennese -that is) but I''m at the age....#1568210/6/99; 15:09:50

of remembering the great sound of s.i.x.t.e.e.n t.o.n.s, in the late 60's. Good stuff-made my day and won't get the tune out of my head for some time - G(ee) S(h)ucks!
see ya later ...

JCSHedge Books#1568310/6/99; 15:22:33

Anyone know the hedge book positions of
DROOY (DURBAN DEEP)
HMGCY (HARMONY GOLD)
Or where I can find them if you don't know the numbers.
Thanks

CoBra(too)@StH - sorry for rubbing it in again...#1568410/6/99; 15:26:30

... or some poor soul may have acted on my post re ABX/PDG.
PDG - up 45cts ABX down 1.25 and all other majors down too.

Coincidence, I guess?? G'night CB2

TownCrierCanadian miner Cambior hurt by gold hedge concerns#1568510/6/99; 15:27:15

http://biz.yahoo.com/rf/991006/s6.html

"Every company with a hedge book is having some very intense conversations with counterparties." --John Ing, president of Maison Placements Canada Inc (a Canadian brokerage in Toronto)

In addition to Cambior Inc., the hedging woes of Ghana's Ashanti Goldfields Co Ltd. are discussed.

A mining company seems akin to the US Treasury...just because they "make" the money (being the source) doesn't mean they are worth all that they produce, nor does it ensure that they are a profitable enterprise at the end of the day.

SteveHCobra(too)#1568610/6/99; 15:28:16

Criticims absorbed. Thanks.

Did you see? Gold (dec.) is up $2.5 in overseas trading. Yahoooooooooo!

TomcatSomething is beginning to smell#1568710/6/99; 15:29:37

It is beginning to look like more mining companies might be in trouble (due to shorting, forward sales, and call writing) than was earlier estimated. If this turns out to be true, then someone is going to have to come in a rescue these bankrupt mines at firesale prices.

Now these mines didn't just jump into their hedged positions. They were urged to do so by their bankers to keep their good credit.

When the smoke clears, who is going to end up with the ownership of these mines and the gold? After these mines are rescued, will the POG then start to rise even higher still?

Perhaps I am a bit skeptical because I came from the streets. But for the benefit of those who grew up honestly, let me tell you how an old street hand would have set this up.

1. As a banker, with mining clients, I would get the mining management replaced with super ambitious greed filled CEOs.
2. I would then train them in how they could get rich with by selling short, writing calls, and selling forward. They would be convinced they had made it to heaven.
3. I would find greedy counter-parties to back the deals.
4. When the POG went up (Oh gosh, what a tragic surprise) I would be there to help the CEOs quit their jobs before they were tarred and feathered. The absent CEOs would then be the scapegoat.
4. I would then be there to save the stokholders from further losses by taking over the mines at a firesale prices. Yes, I would be their hero.

In street parlance, my freinds, this is called a sting. In the end you walk away with someones money and he thanks you for rescuing him.

YGMTomcat#1568810/06/99; 15:41:09

Sounds like a very feasible "Part" of the bigger picture. In fact I do believe Another has alluded to this similar type of scenario.---YGM.
Goldspoon****Comex Close Unofical Winner!!!*******#1568910/06/99; 15:46:58

By my figgers (ya i know it's speled "figures" but its pernounced figgers) Todays Market Maven.... "USAGOLD ORICAL of the Day" is that man on the prowel...loved by many...... known by few (thousands)...(OK,OK im' gettin there)...My ole buddy...TOMCAT!!! lets here it for Tomcat!!!! Meow, Meow, er i mean HORRAY!!!!

My guess for tomorrow... is the one i had for today... $343.73..my mama said... i was a day early and one card short of a full deck....i've always wondered zackly what that meant...

****Get your Guesses in for tomorrows.. Greatest Game on Earth!!**
What? Why?..cause i said so...

Goldfly er ahh.. not to be insultin' nor nuthin' like that...but uhh...you from Tennessee too??? GO VOLS!!

Platinum laid down on me...but did you see that move he made around noon today ...er... just before gold took off..what?? don't beleive me??? well look at the charts yourself its there.....
Where's Koan????
FOA, its not nice.. not to speak to ole Goldspoon once in a while.....you're there... Goldspoon's bones knows it...i pull the Comex Close price out of the air...but i can feel your presence with my bones....still love ya man.....

Skip@JCS (Msg ID:15683 re: Hedgebooks)#1569010/06/99; 15:49:19

http://www.harmony.co.za/news/press/a4oct99.htm

Check the link (www.harmony.co.za/news/press/a4oct99.htm) to read about HGMCY being totally unhedged. This bodes VERY well for Harmony's stockholders!!!

--Skip

TownCrierInteresting!#1569110/06/99; 15:49:56

http://tfc.com/syndication/TFC/GoldReport.html?G=GoldReport

While wandering around rooting out news this was found. It would seem our good host's words are widely distributed, even outside of USAGOLD-land. Cool. You learn something new every day!
CoBra(too)StH-no criticism intended - yahooo -to you too - and no Dot.Coms ...#1569210/06/99; 15:52:20

and thank you for your ongoing great input - invaluable- brother in arms pro gold and monetary truth (no truce to colluders) - BC2
Goldspoon**Kitco Posters***#1569310/06/99; 16:13:06

Hope ya'll didn't take offence to Goldspoons challenge yesterday....just havin' some funnnnn..... thats all...
RossLTC - futures delivery#1569410/06/99; 16:13:43

"First notice of delivery" doesn't really mean anything other than a friendly call from your broker to remind you that your contract is coming due soon.

I can force delivery on a futures contract by holding it until expiration. Lets say I went long in July on an Oct gold contract at 260. If I hold it through expiration, the next day afterwards my account will be debited $26000 and I will be given a warehouse receipt for the 100 ounces of gold. The short will be credited $26000 and must surrender the title to the gold he is required to have in one of the approved warehouses.

A short can get out of his obligation any time (while the market is still liquid) by going long to cancel out his obligation. (and vice versa) In the last few days or hours, most of the speculators will have exited their positions. Whoever is caught short may not be able to exit their position. He may only hope that one of the longs decides he doesn't want delivery and sells before the close. The price may go WAYYYY UP. Otherwise he will have to buy on the spot market if he doesn't have any gold.

http://charts.quotewatch.com/charts/futures/COMEX/GCV9-intraday.html

I just checked this page and found out that there are 316 Oct gold contracts open with 117 volume yesterday. This is not very liquid, but, at the moment, it looks like there is enough eligible gold in the warehouse to cover. The big squeeze could come in December. Thousands of shorts could be skinned and dried!

TomcatAcceptance Speech#1569510/06/99; 16:21:05

Ladies and Knights of the Roundtable. It is my honor this evening to accept from Sir Goldspoon the prize of being The Oracle of the Day.

As I understand it, an oracle is a person who is respected for his wise council and accurate predictions. With that in mind I would like to council every member to keep getting all the physical gold you.

My prediction is that the POG will continue to rise and fall in increasing volatility which will give the shorts opportunities to buy in the dips. This will be disheartening to many but the fearless members of the honorable table will make it through the storm. Indeed, you will come out way ahead after the POG resumes its climb to the stars.

In the tradition of all prize winners who have gone before me, I would like to thank a very important person in my life; my son Eric. "Thanks son, I love you. Dad".

flierdudeComex close October 7, 1999#1569610/06/99; 16:26:00

Goldspun Were on the next leg up so I'll say $338.00 Comex close.

Mike

Golden TruthGOLD UP $4.00#1569710/06/99; 16:44:27

Here we go again!! YAHOO!!!!!!!!!!!!!!!!!!!!!!!!!!!
JCSHedge books#1569810/06/99; 16:47:16

Skip,
Thanks for info.
Any idea on DROOY. Looked all over and can't find a thing.

Goldspoon***Tomcat's aceptance speach sets a new rule***#1569910/06/99; 16:48:51

All future winners of the ORICAL award must bestow upon us their flash of wisdom and intelegance by the fine example of Sir Tomcat.......

Just wondering.... ORICAL...ORIFACE...ORAL..."aceptance speach".....root word connection?? anybody?? OR?

TownCrierA blast from the recent past...CBSMarketwatch's "Wall St. Eavesdropper" from Sept. 22#1570010/06/99; 16:57:12

http://cbs.marketwatch.com/archive/19990922/news/current/eavesdropper.htx?source=blq/yhoo&dist=yhoo

Gold gets some respect

"Gold bugs rejoice! While the "mainstream" media points to the Bank of England's gold auction as the cause for Tuesday's sudden jump in gold prices, MarketMaven's Michael Kosares prefers to focus on the attendees. One heavy bidder was South African-based Gold Fields (GOLD: news, msgs), buying half of the 25 tons offered. Its chairman, Chris Thompson said he would have bought more if he could and that he plans to attend future BOE auctions, adding that it was time for gold producers to start "supporting their industry." Also in attendance was fellow South African producer AngloGold (AU: news, msgs).
"The action of two of the world's top mining companies serves as a warning shot across the bow of those who short the market," writes Kosares. The most positive news for gold investors is that while stock bourses around the world plummeted, gold rallied strongly. London gold popped up as much as $9.40 to at $264 before settling back to $262.60 at Tuesday's close. Gold's luster also shined brightly in New York and Asia."

This was also found while looking for news. MK, everyone in this Tower outpost is impressed that you are such a towering figure in the gold scene. (Replay a scene from Wayne's World..."We're not worthy!")

To anyone following along with the woes of the mining companies coming to terms with their upside-down hedge books, Gold Fields Ltd here is not to be confused with Ashanti Gamblingfields, er, we mean Ashanti Goldfields Ltd, which was hedged to the hilt and suddenly finding themselves to be the weak-side counterparty. While Ashanti's stock took a dip today, Gold Fields ended up. Hope this clears any confusion from their similar names.

TownCrierGold firms Ashanti,Lonmin meet to stave off crises#1570110/06/99; 17:19:11

http://biz.yahoo.com/rf/991006/ky.html

Ghana's Ashanti Goldfields Co Ltd and mining group Lonmin Plc were both in talks with their major banking counterparties to not to push them into default by asking for margin payments. The Reuters boys summed up the situation nicely by saying "As the dust settled from the [gold] rally, market participants in the banking and mining sectors were beginning to count the cost of having been resolutely bearish on gold's prospects."

Sir Tomcat a short while ago hit the nail on the head.

TownCrierGold seen up to $350 in days -PruBache's Arnold#1570210/06/99; 17:44:42

http://biz.yahoo.com/rf/991006/dv.html

Remember Ted Arnold from our GOLDEN VIEW comments yesterday? Reuters today reports more fully on Mr. Arnold's analysis that we mentioned. Mr. Arnold estimates that funds had been short 40 million ounces prior to the announcement by the European central banks, and therefore expects gold to reach $350 on technically driven fund buying in a matter of days.
Arnold says, "Covering this in has, we understand, gutted several very big funds. It also savaged a number of bullion banks...One well-known bullion bank is thought to have lost between $30 million and $50 million between its world-wide book and its option writing."

It is at this point that Arnold says "it is worth pointing out the problem of the grossly overweighted gold portfolios of the European central banks has not gone away. The moratorium is no more than a reprieve... we doubt if the ranks of the 15 will hold for a full five years."

It was yesterday's GOLDEN VIEW that called into question any modicum of substance behind that comment, especially in light of the accounting practice that now shows them to be regularly marking the value of these gold reserves to market. Mr. Arnold worries about their net ability to hold onto this gold for five years. They sure didn't arrive at this point in time with "grossly overweighted gold portfolios" by selling it throughout the many preceding years of history, now, did they? Gimme a break.

Canuckgidsek msg: 15670#1570310/06/99; 17:56:01

Went long on Franco-Nevada last week, are you sure about no hedging. Please confirm.

Thanks in advance.

Canuckgidsek#1570410/06/99; 17:59:25

That is to say, I was told that FN was not a forward seller but would like to positively confirm. I believe you and my other source but confirmation eases the nerves so to speak.

Thanks again.

CanuckYGM#1570510/06/99; 18:01:40

Where did you get the forward sales/hedging info?

Thanks

JourneymanSmall Change#1570610/06/99; 18:50:55

In MID 15702 our Crier said a BB may have lost "$30 to $50 millon." Given the situation, that doesn't seem like all that much. What is the net worth of the average BB anyway -- and how many of them are there? Regards, Journeyman
BonedaddyPeter and Goldsun, Ha!#1570710/06/99; 18:54:30

Hoist with my own petard! I can't help but enjoy the humor. I was going on about how people don't learn form history, and as you fellows pointed out so aptly, I obviously haven't. Oh well, I hope I serve as a good example of what happens when one doesn't remember his lessons.
RossLGreat cartoon#1570810/06/99; 19:12:56

http://www.grantspub.com/toon/index.html

Hey everybody! A great cartoon. Just click on the link.
JourneymanPrechter's DEFLATION: Does it contradict FOA/Another?#1570910/06/99; 19:20:24

Just received the following from a good friend. ASS-U-MEing Prechter's right, how does DEFLATION fit the FOA/Another model? Or does Prechter's model CONTRADICT FOA/Another? Today's Lesson From At the Crest of the Tidal Wave by Robert Prechter, Jr. Despite a nearly unanimous opinion to the contrary, government cannot impose inflation to solve the deflation threat. Deflation in a credit economy results from a collective state of mind. It is not a mechanical phenomena, as it is to a far greater degree in currency based economies. This is particularly true in today's economy in the US. While the Fed and the government might have had some power to control interest rates temporarily in the past, they have created so much debt that they no longer control the market. The power to determine interest rates is entirely in the hands of creditors in what is now a multi-trillion dollar debt market. Because their collective state of mind is susceptible to a loss of confidence in government paper, the Fed has no choice but to tailor its actions to please them. Soon, the government will have to plead for bondowner's confidence as well, and act to keep it. Although many inflationists continue to claim that "all the government has to do is fire up the printing press," it simply cannot be done without destroying the bond market. If the government and the Fed were to collude in an attempt to inflate the money supply, that very act would panic bond investors, who would sell. Any attempted inflation would more than be offset by the disappearance of purchasing power that is currently being held in the form of bonds, notes and bills. Whatever liquidity the government tries to add to the system will come at the cost of falling prices for debt instruments, resulting in a net destruction of presumed wealth. The government, then, cannot combat deflation, which will run its course regardless of actions taken or not taken. Regards, Journeyman
Silver TongueEating Crow#1571010/06/99; 19:21:36

Yesterday my prediction was that gold would settle about 214 per ounce at the New York close. I did all right on this until New York Comex opened, then I was blown without ceremony out of the water. This is once occasion though when I don't mind being wrong at all. I do feel bad that I didn't win the gold Clinton coin going to the winner.
Tubac's ears!!!!!!!!!!!!!!!SILVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!#1571110/06/99; 19:36:15

Just read on kitco that Gates and WB are cornering Silver! Does anyone have a clue to the legitimacy of this claim? I've got to dig some up, but its drying up here in N. CA.
Let's hope it really does go POSTAL soon.
!!!!!!!!!!!!!!!!!GO SILVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

TownCrierAfter the Close: the GOLDEN VIEW from The Tower#1571210/06/99; 19:54:53

We'll begin with two quotes that for various reasons we thought worth passing along to stimulate your thoughts. First up...
"There is no question that with the rise in the gold price that companies such as Cambior do face potential margin calls and the decision on unwinding and how expensive it may be...Every company with a hedge book is having some very intense conversations with counterparties." --John Ing, president of Maison Placements Canada Inc (a Canadian brokerage in Toronto)

And second, from the What-Pills-Has-He-Been-Taking? Dept...
"I was actually convinced the market bottomed yesterday, then the Fed hit. Now you can put it in stone. The bottom has been put in." --Gary Kaltbaum, chief technical analyst at GSG Securities (in Orlando)

Yes, he's talkin' about the stock market folks. Join with the many voices in The Tower as we ask aloud the question that is on everyone's lip..."WHAT bottom??" Must be some kind of new-fangled "phantom bottom" because the markets are still looking top heavy at a point many thousands above the level at which Fed Chairman Greenspans proclaimed "irrational exuberance" in December 1996.

On this day that saw the DOW climb with certain exuberance 187 points to close at 10,588 points, NYSE stocks reaching new 52-week lows still outnumbered new highs by 143 to 48. With the often unnerving month of October only now freshly underway, and with the Federal Reserve now accepting a broader array of banks' debt-based collateral with which to recharge dwindling banking reserves at the approach of Y2K coupled with foreign withdrawals, we'd say calls for a stock market bottom--particularly those carved in stone--are a tad bit premature.

The bellweather bond gained 3/32 in price, dropping the yield to 6.17%. After yesterday's sharp post-FOMC announcement of a bias toward tightening, today's gain might best be described as a dead cat bounce. Traders expect the bond to be in limbo until Friday's release of the Semptember's employment report and payroll data, except for one potential stumbling block. Tomorrow the European Central Bank is scheduled to meet to decide whether a rate rise is warranted. Hawkish sentiments have been heard as recently as last week by ECB President Wim Duisenberg and board member Otmar Issing about price inflation picking up within the EMU. The impact to U.S. bonds is that as European bond yields rise, investors have a tendency to pare down their holdings of U.S. bonds, while higher rates could also strengthen the euro against other currencies, including the dollar.

In further currency news, there was strong demand for the dollar today from a US investment banks and Japanese trust banks as US asset markets surged higher. The dollar touched 16-day highs against the yen, and broke a 7 day streak of losses against the euro which had attained a 2-month high against the dollar at $1.0776. Today closed with a dollar worth ¥107.55 and the euro worth $1.0690.

Moving on to gold, the spot price was last quoted in NY at $324, registering no net change over yesterday's quote...after enduring 24 hours of trading that took a long path to get there. It's nice when the technical traders can work out their market corrections and retracements within a 24-hr period, isn't it? On several days since this upward movement began we've seen several spikes (mostly up, some down) that resolved themselves within the course of the day, allowing the business at hand (higher prices) to continue without substantial delay.

A couple GOLDEN VIEWS ago when the price settled down near $300 from earlier highs, we suggested that while all might appear calm on the surface, you could be certain there was a fair degree of damage assessment taking place behind the scenes. The various Reuters reports today further bore that out. One quoted Ted Arnold (whom you might remember from our report yesterday) saying, "Covering this in has, we understand, gutted several very big funds. It also savaged a number of bullion banks...One well-known bullion bank is thought to have lost between $30 million and $50 million between its world-wide book and its option writing." There was also this bit which we offered mid-day with a link to the whole, sordid story......Ghana's Ashanti Goldfields Co Ltd and mining group Lonmin Plc were both in talks with their major banking counterparties to not to push them into default by asking for margin payments. The Reuters boys summed up the situation nicely by saying "As the dust settled from the [gold] rally, market participants in the banking and mining sectors were beginning to count the cost of having been resolutely bearish on gold's prospects."

In a 10:30 am EDT report by Bridge, their reporter offered this comment following gold's brief price-correction: "Dec had been down as much as $10.8 in NYMEX Access trading, but bargain hunters and fund buying cut those losses more than half." Good grief. Doesn't the phrase "bargain hunters and fund buying" sound like what we've heard for years without end in regard to the stock markets? We'll stay with Bridge News for their wrapup on the day's events and the thoughts of those busy futures traders...

NY Precious Metals Review: Gold bounces off lows, settles unch
By Tina Petersen and Mary Powers, Bridge News
Washington--Oct 6--COMEX Dec gold futures bounced off early lows,
settling unchanged at $326 per ounce in rangebound, volatile market
conditions. Dec had been down by as much as $10.80 in NYMEX Access
trading, but afternoon bargain hunters and fund buying reversed those
losses.

Dec gold saw an expected retracement throughout most of the day on
profit-taking and producer selling after fierce gains on Tuesday brought
Dec to a 2-year high of $339 per ounce. A trader said trade and bank selling
pushed the market down in the NYMEX Access session, but fund buying, as
well as a stronger dollar versus the yen, pushed the market back up.
"We're seeing very rangebound trade in volatile technical market
conditions," said the trader. "That stands to reason when we've had a rally
up to $339. We would expect to see substantial retracement and
profit-taking and when the profit-taking began, it snowballed down to the
$316 level, which is now the new support level."

Added another trader: "[Tuesday's] rally created a vacuum, so
inevitably the market would be sold off" in the morning, said a trader.
"The trade saw an opportunity to come in and run some stops and push the
market down," he said.
The near-term picture for gold remains uncertain. While some said they
thought the market should see further profit-taking in the near term,
others said strong fundamentals should keep the market moving up to about
$330.
"There is still a great deal of uncertainty in the gold market," said
a trader. "It is going to take days or weeks before the market settles
down.
Technically, it could go either way. There is a general nervousness in the
market."
Strong fundamentals are backing the rally," a bullish trader said.
"The trend higher has not been taken out." He said that the dips in gold
prices are well supported by the buyers.

However, he said "the big question out there" is how much leases are
covered and hedges lifted and restructured. "How much of short covering
already been done is the bottom line question," he said.
Leonard Kaplan, chief bullion dealer for LFG Bullion, said the gold
market is continuing to be volatile, with anticipated producer selling. He
said gold possibly is establishing a trading range, with support at $315
and resistance at $330. He said lease rates have declined slightly from
last week, with 1-month rates at 3.82%.

[at last check, these were were latest gold lease rates (annualized, of course)
1-month 4.1680%
2-month 4.2580%
3-month 5.1630%
6-month 4.8180%
12-mnth 4.6850%...back to the report...]

Traders said they are guarded to see if other gold producers will
begin embarking on programs of hedge restructuring or buy-backs.
Canada's Cambior Inc. today reported it has hedging positions for 2.7
million ounces of gold at an average price of US $318 per ounce until
2007. As of Sep 30, Cambior said it had sold call options for 1.9 million
ounces of gold at an average price of US $315 per ounce, with a floating
lease rate swap on 648,000 ounces.

In addition, Ashanti Goldfields said Tuesday it has been left with an
obligation to pay margin calls to its gold-hedging counterparties because
of the recent huge rise in the gold price. Ashanti said it has entered an
arrangement with its hedging partners for continuing support.
[That comment about agreements with hedging partners for continuing support sounds nice and friendly, doesn't it? As reported earlier by Reuters, the situation was described as a "crisis." Meanwhile, a host of other mining companies are coming forward with plenty of fast talking about what their hedged postion has or hasn't done to their viability. Companies performed worse than the metal as the Philadelphia Stock Exchange Gold & Silver Index slid 2.5% today.]
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
North of the border, those guys are unflappable...or else well-informed. Canadian Finance Minister Paul Martin said today he wasn't surprised by either of last week's announcement by European central banks to cap their gold sales or by the resulting spike in gold prices. What we all wouldn't give for a look through Mr. Martin's magic glasses into the future.

Today's statistics reveal that yesterday's trading ended with COMEX open interest on all gold contracts totalling 215,041, down 6990 for the day. The December contract alone accounted for 127,203 positions in open interst.

Open interest in the October contract fell Tuesday by 376, leaving 71. This morning total delivery notices for gold issues were 27, bringing the grand total so far for October to 2,464.

Our scout returning from his visit to the COMEX vaults said to simply add Wednesday to the list and rerun yesterday's report. While these tired fingers celebrate, here it is...again. "There was no change in COMEX gold depositories both Monday and Tuesday. Inventory stands at 839,029 Registered ounces and 88,591 Eligible ounces for a total of 927,620 ounces housed within vaults at ScotiaMocatta and Republic National."

Following yesterday's post-trading release of American Petroleum Institute data showing a rise in crude stockpiles (by1.004-million-barrel last week) which was double the market's expectations, this morning's report by the U.S. Department of Energy provided a conflicting view, reporting a 400,000-barrel drop. November crude settled down 18c at $23.27.

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

FOAComment#1571310/06/99; 20:19:41

Where gold is now going, no other investment can follow!

We have been on the gold trail for a number of days now and it's time to stop and talk. Everyone has read the USAGOLD HOF site and understands the tie in of gold and oil. Now lets look at how these factors are beginning to close in on our gold markets.

Earlier this year, when gold was just falling into the $280 range we discussed how then was the time to buy large blocks of bullion. Many large entities were taking delivery to avoid the approaching storm. It seemed that $280 had been the magic number. If gold fell below that value there was a risk that the number of paper creations, known as gold derivatives could explode in a final frenzy. Indeed, in the march to $250, the fractional nature of paper gold trading has created a massive glut of "paper gold commitments" that have no gold behind them. Prior to this $250 fall, the gold market was already bursting with derivatives. Enough so to destroy the credibility of any form of real "gold delivery". Today, those numbers are off the charts. Had the ECB and it's consortium of major Euro supporting Central Banks not stepped in to stop the madness, the gold market would have been crushed to the price floor. Long before that floor was reached, the valuations of paper gold would have begun a discount phase. Where their traded price reflected the inability of the bullion markets to supply even a tenth of the real gold that these contracts stood for. Yes, for big investors the time to take delivery was before the lions begun to fight over an ever smaller supply of gold. I thank Mr. PHinLA for posting Another's analogy about the coming "Gold Lions".

One way or another, the modern gold market of today is going to fail. Weather the trading price goes to $1,000 or falls to $10, the massive overhang of gold derivatives cannot be honoured. What physical gold that remains in private hands will be cut free by this failure and trade for a while in "street form". (see Mr. Holtzman in the HOF for a better understanding of this)

I have discussed before how the modern "fractional gold system" was used to multiply the outstanding ownership of gold while the actual physical gold stocks remained static. This allowed the price of gold to fall as this new paper covered the massive demand. Physical gold could then be
used to support fabrication and, more importantly flow in a direction that increased oil supplies. Mr. ORO has searched for a formal agreement or even numbers that account for this process. The numbers are evident as presented, yet the agreement was political in nature.

A few years ago, continued good oil flow required gold below $360. But, below that number, the asian Trader would emerge with tremendous accounts. It wasn't long after the fall below $360 that the LBMA had to make public the enormous buying of their paper commitments. Even as the
Main Central bank committed to keep gold above $280 to preserve value, it was obvious that the paper market would one day implode itself from "fractional gold" creation. The end of our markets was written the day we fell below $360. We embarked on a trail of no return.

Over the last few years the gold market developed with a two tier nature. Entities that had massive oil to supply a needing world would most certainly receive their gold in "allocated" form if they asked for it. Weather it be from private investor who exchanged their physical for holding
paper derivatives or from the vaults of Major CBs, this gold would come from somewhere, "come hell or high water". Truly, with the explosion of gold commitments outstanding today, we can now clearly see how this will unfold.

The modern financing tool we call the "gold carry trade" is now becoming the poison that will kill this market. The demands of gold lenders to return their "at risk" positions are creating an atmosphere where no amount of physical gold exists that can supply the outstanding paper claims. Great blocks of gold are now lent into the markets at 4% or greater, where once 1% was considered a good return. As each new group of lenders enter the market they are followed close behind by former lenders demanding their gold return. Fear begins to grip those who were once bullion owners as they now became paper pawns. Each new demand for "full allocation" creates yet further demands to borrow. The supply of new lenders grows smaller and smaller as the
possibility of default increases.

The ECB moved to block any further erosion of the Euroland position. Most certainly, all world gold contracts denominated in dollars would have gravitated towards Euro conversion to best advantage the EMCB gold stocks. Indeed, in a brilliant move they have blocked that escape and
doomed the dollar gold market to collapse from non delivery. The ECB can now effectively support it's gold commitments thru either bullion allocation or Euro settlement. By marking to the market their gold reserves they will contrast the advantage of a dollar gold market collapse no matter what form it takes. Weather discounting of paper gold from non delivery as derivatives are sold in mass (plunging dollar gold price) or a complete run for delivery (what we are seeing now) that leaves 95% of the market shut down and still holding paper demands ( paper gold priced in the many thousands. prior to lock up), the Euro will gain reserve backing.

Onward:

The mine defaults seen today are just the beginning. For every mine that fails it's stockholders during a $70 gold price increase, fifty will fail from a $2,000 run! Weather the bullion price reflects the "street price" or the "run for delivery paper price", the turmoil will devastate most contract strategies. Why is this happening? Modern people, be them investors, mine managers or "carry trade" operators alike have never seen a true gold market. Their perception of a gold run is where jewellery demand and 6% inflation gun the price to their historical "natural level", $500! Truly, in this world, $500 is where gold starts it's great move.

Our dollar/IMF currency operates on contract liquidity by creating paper IOU that are never called. Be they cash, bonds, CDs or stocks, they represent elevated wealth only because they are never liquidated into real things. If humanity ever decides to sell them (something they will do only if forced from fear), the value of real things quickly increases to a level much higher than the total value of such paper. It does this because, in a panic, things are held back, thereby lowering supply.

The recent (last 10+/- years) gold market has reflected it's transition into a similar paper "contract liquidity" system. This was done to enhance the credibility of the dollar in the eyes of it's trading partners. Today, the Euro system has offered a reason to test the credibility of this gold system. This "new gold market" is not as before and will run in dollar terms unlike anything anyone has ever seen. Gold is now in the process of becoming money and that pricing process will destroy most any contract ever written against gold.

In the future, no investment on earth will keep up with the real value of gold, nothing! It will run until the dollar system is destroyed and a new system takes it's place. The effects and beginning events are starting now. In the background the gold market is under stress, even as small traders make quick paper gains. When the stress breaks into full view, all traders will be "eaten alive" by the next biggest trader. And so on up the food chain. So, why trade. Already, gold bullion has done very well against shares and other metals. What ever small percentage gain one has made above this is for how much risk? I would like to see the owners of Ashanti Goldfields Co trade their paper
gains for bullion tomorrow? We have discussed this often and this is only the first good example. Yet gold has only just begun to move! No option, futures, silver, platinum or gold stock will match gold when it runs $100 a day for days on end (perhaps in a Euro marketplace).


Our road has just begun and I will walk it also. Hold a tight line as we proceed down this dangerous path. It will be a wonderful hike for everyone that can stay on the trail and understand the sights along the way.

On the road to $30,000...........thank you FOA

Nice joke PH! My wife almost killed me! (smile)

TEXTown Crier - Three Kings - Goldspoon's COMEX#1571410/06/99; 20:20:16



TC:
I guess the best way to describe Three Kings is "Kelly's Heros with a conscience". I have a friend that fought in Desert Storm and years ago described some of the "ground level" situations that are portrayed in the film.....things that many of us really don't know or understand to this day.
It is interesting to note that there were many opportunities for the main characters to focus on other items of physical value......in the end, GOLD (and a little moral backbone)was
the primary motivator. You are right about the difference between common thievery and noble endeavors. Interesting note about improved gold-awareness......I took my 15 year old son with me to see the film. Prior to seeing the film, he bearly (I know, pad pun)had a passing interest in my GOLD endeavors over the past few months. Now, each day on our drive to school, he pays more attention to our local "business for breakfast" radio show that gives the opening markets and gold reports. He has even started to look over my shoulder and study the evening charts. In a nutshell, yep I think it puts GOLD into a positive light and could (for a few weeks or a month) increase its overall awareness.

Goldspoon:
Second go-round is the same as the first......$332.25

Chris PowellWorldNetDaily.com interviews GATA's Murphy#1571510/06/99; 20:21:26

http://www.egroups.com/group/gata/238.html?

Manipulation message is getting across.
YGMF.O.A. #1571610/06/99; 21:04:18

Thank You, I think! In fact this last post of yours will take much reflection and consideration. Simply put you have me temporarily thunderstruck. Regards---YGM.
elevator guy@Goldfly- 16 tons song ! What a riot!!!#1571710/06/99; 22:03:51

Forgive if I'm posting in the middle of something good, cause I'm startin at the bottom of the page, and reading my way up to the newer posts, but-

That was a great song, Goldfly, based on 16 tons! Lyrics fit the music, and had good meaning. Very dramatic ending, too.

Can you write lyrics to Collective Souls' "Shine"?

SteveHTo a friend#1571810/06/99; 22:20:05

Leroy,

FOA posted tonight after being gone for most of the recent gold run up. In his words are comfort and angst. Comfort from the knowledge that gold's run is just beginning, but angst from knowing that, in his opinion, paper gold products will fail or be dishonored -- truly a scary thought. In the end, FOA is a Euro person. If you will, he talks his book, and that is physical gold and Euros. Why he chooses this path, I don't know. I am fairly certain that he knows what is going on behind gold's interior and what he sees isn't pretty for the dollar or anything else dollar derived. Ignore his comments many do, but I fear that in the end he will be more right than wrong. The energy in this inkling and infant gold bull is evident to all. The power to change gold from a derided old woman to a vibrant lass at a debutant ball changed in a week, in a day. What if gold hits $500? This month? That would open some eyes and have people asking lots of questions, no? If you recall, FOA means friend of Another, and is a handle of a poster at the below site. He can be considered along with a poster called Another, the deep throat insider source to the gold industry. We believe Another is Saudi or mid-Eastern and FOA an American in Europe. They both started posting over two years ago at www.kitco.com and then when disbelievers chased them off, they were invited onto the www.usagold.com site where they appear and disappear majically and with preannouncement. Does one credit them with wisdom and knowledge the rest of us don't have? Many do. Some scorn them. But at a minimum one must know of their writings or else miss out on the biggest story of the millenium: gold's rise back into favor and a once in a lifetime revaluation of gold that FOA says could be $30,000 per ounce.

If that got your attention then visit those two web site above for further information. You will see references to the gold for oil deals and not hear that anywhere else. It seems from FOA and Another that the deal started after 1971 when President Nixon defaulted the dollar off the gold standard and allowed the dollar to stand on its own. Without a competitive currency like the Euro, this allowed the dollar to be the reserve currency of choice until January 1, 1999. Now, FOA says, there is an alternative: the Euro. In 1976, the Jamaica Accords, an IMF meeting of many countries floated gold and would appear to be the start of some gold for some oil that managed to apparently keep the price of oil down in dollars as long as cheap gold could be had by the Middle East. Of late, however, hedge funds managed to knock the price of gold below $360 per ounce that had the end result of naked shorting the gold market to a possible 14,000 tons. That is one-half of all Central Bank gold in the world (reported at 32,000 tons). In short, this is the basis of FOA's theory, first put forth by the person named Another.

No one, who is telling anyway, knows the identity of FOA or Another. But their Internet personas are picking up steam on the Internet. They represent a return to a grass roots currency backed by gold and that marks a turn away from derivatives and hedging paper and dollars. In part this is a result of European and Eastern loss of confidence in printed dollars with zero gold backing. When the IMF couldn't get funded by Congress, their ultimate proposal to accept gold in payment for debt is the first time since 1971 that gold has been monetized without a conversion to another currency. If you have picked up the significane of gold as it gains steam in all countries but the US, you begin to understand the importance of the A/FOA message. Watch the gold train. A lot of behind the scene energy is being put to bear on it from all corners of the world. So much so, that many gold mines, hedge funds, and bullion banks may or are failing as we speak and no one is yet the wiser. Gold and its importance has returned with a vengeance and we got but a small taste of that last week when gold rose from a 20-year low $85 to a high of $339 (so far).

SteveH

Golden TruthTO F.O.A#1571910/06/99; 22:46:53

Hello F.O.A, i must say you are like a breath of fresh morning air!
It tickles my soul to hear your thoughts again, but the best part is that i don't have to ask "when" anymore. :-)))
Thanks for not forgetting about the little guy! and we'll see you at $30,000, you bet!!!!!!!!!!
Thanks as always. G.T

Chris PowellThe hedging horror unfold#1572010/06/99; 22:50:42

http://www.egroups.com/group/gata/239.html?

Latest "Midas" commentary
from GATA Chairman Bill Murphy.

OROSteveH - Your letter - a mechanism#1572110/06/99; 23:44:47

FOA has, once again, portrayed the basic concept of the future he sees from his position, which you assume is a Saudi point of view. For myself, I do not know and will not venture a guess. The form of expression is appropriate to a Saudi official.
The thing most of us miss most of the time, is that the simple fact that everybody's interests, save the governing class in the US, are stacked up towards this new format for floating currencies and reserves. It puts everybody on an equal footing and opens the possibility of a level playing field for both banking and trade. It also eliminates the segnorage of the US in printing the world's medium of trade and debt settlement and has a chance of revaluing the debt of the EMs into insignificance - freeing them from the trap the US bankers sprung on them. (see Mozel post) One more issue is that the gold accumulated in Europe, Asia, and Arabia through trade, and in the US through payments for services in war is given its original weight as the representation of a whole nations' past financial achievements. (again a good Mozel point)
The US elite is very much like the elite of Johnstown before the flood, enjoying the night in a cocktail party as the engineer tells them of the near certainty of the collapse of the dam if the storm outside continues, and even if it stops. As the custodians of the dam run for their lives, having seen water coming through the cracks, the elite continue talking of the new library they will have built, the wives talking of the benefits to the poor, the husbands organizing their conspiracy to rig the bidding. Notice that even the engineer, convinced of the impending disaster and its ramifications - including the high probability of his own death - still comes to the party. (This account is partly fictional - so take no offense)
The working mechanism of the new currency system ANOTHER foresees and is involved in implementing is very straightforward, though only somewhat less fictional than what we have today. It just happens to artificially favor gold.
The manner of strengthening a currency is the main difference from the current system. Each country, and the IMF as well, strengthens its currency by bidding for gold within its borders. As the price of gold increases locally, the backing of the currency has both increased in quantity and in price - and therefore in percentage of backing. Other countries respond according to their need for a stronger or weaker currency for domestic or international political or economic purposes. Through the importation of gold, there is something gained for a net exporter. Through the import of goods, one's currency is necessarilly weakened as it is eventually used to buy gold by the exporter, strengthening their currency relative to the importer. It restores the best aspects of the gold standard in trade and in the settlement of debt, but it will enslave the countries that do not have their own gold and are net debtors. Countries that are US creditors but have no gold will be left with whatever the gold value of the $ would be relative to the Euro, SF and other major currencies.
The gold price in this system has no cap. All have a vested interest in keeping the gold price high. In the meantime, the gold miners will be taxed at incredible rates and gold holders will be picked at as the capital gains taxes on their gold sales are raised over and over. Initially, there would be a strong push to have the gold holders spend the money unhindered, to jump start a shocked economy. After the initial spring time for the gold owners, there would be the atmosphere of growing taxation of gold profits (inducing people not to spend their gold).
Monetary policy would ammount to the throwing of unbacked paper into the market, which would cause the decline of the currency and a surge of exports. The exports will garner a large chunk of gold coming in, and would either displace the currency (if gold is not bought to increase its backing) or will be used by the governmnet to support the currency.
Contrast this with the current system, where one needs to devalue the $ in order to strengthen one's currency, by throwing $ into the market and buying one's own. Thus the $ gained in trade are lost in defense of a currency in what is a sure defeat if you are a debtor nation - the US Fed/banks can invent as many $ as are necessary to borrow your own currency from your banks and dump it on the market. As you raise your interest rates, your economy grinds to a halt and as you supply more of your currency to your creditors as a result of higher interest rates, you are either more in debt, or the funds fall into the market where they eventually lower the value of your currency. If this attack on your currency was accompanied by a rush of hot money out of your financial markets, your economy would be destroyed. Your $ denominated paper would be defaulted, and your debts remain hanging arround your neck like an albatros. These will force you to sell your products and real assets at a discount to their cost and real value, in order to settle $ debt.
The US has been trapped in this way too. It is by far the largest debtor the world has ever seen, in relative size to the world economy, or in relation to its own. The list of creditors is growing as each country resolves it $ debt. Japan made it in the 70s, Germany and France in the 60s, China in 97, Korea Thailand and the Phillipines (almost) in 98 and 99. Russia, Malaysia, and Ecuador are just saying "go #$^& yourself".

I will say this. This new international monetary system too will fail in one way or another, and produce unpredictable results. It is such a new concept that I can't say with certainty how it would work in reality. I have a vague thought that gold would displace the currencies in this system, since it would be the most reliable store of value, less subject to the whims of government.

Simply MeThank yoo, Sir FOA.#1572210/06/99; 23:59:12

Your words of encouragement are needed now more than ever.
Many of us are "in" gold to the hilt...according to our means. And the smaller the means, the more important that small store of value is. If I read you correctly, it may, next year or soon after, mean the difference of food on the table or not.
Got children?....Got Gold?

JourneymanGreenspan on TIMEing#1576510/07/99; 10:23:46


OROReposts - monetary thread#1576610/07/99; 10:41:22

Date: Thu Oct 07 1999 04:33
ORO (@Eldo @Cap Kirk) ID#71231:
Copyright © 1999 ORO All rights reserved
The fixed thing is a distortion, it is not the pure barter money system.

Captain Kirk - The printed paper/electro money relies for its value on legal tender laws. These are a form of enslavement through the force of a gun at your back if you refuse to get payed in it. The second element is unrelenting indebtedness through taxation or bank loans ( expanding money supply so that savings are impossible and the only way to buy something of value for most of us is to burden ourselves in debt ) . Also the value of slavery money is extracted from us through the collections departments of police and private repo-men. The enforcement of debt repayment is ultimately a govie function. Once indebted, one allways returns MORE than was given. The government has softened the support for the creditor through limited liability laws and bankruptcy proceedings that end in our being debt free. But the basic issue is still there - there would be no demand for paper money if we did not borrow it, have to pay taxes in it, or just plain forced to take it.
So, though undefined, the fiat has a value as both cash and debt settlement media. The cash value is derived from your enslavement, the debt settlement demand is something that the real effects of the existence of fiat forces on you.
Also, the govie supports the fractional reserve banking system by not forcing banks to disclose that they are insolvent by definition. i.e. they are banks because they tell you you have your money as they lend it to someone else who pays it to you in return for, say, your cake. Thus they have your money, and your cake was payed for with your own money. In reality, you still have your money in hand, but you have lost your cake in return for a promise.
I would prefer a fund structure, where you know you are buying and selling securities, and the money you deposit in an account is yours and the bank can't lend it.

Date: Thu Oct 07 1999 04:33
Captain_Kirk (Nicodemus@sheeple) ID#339203:
Copyright © 1999 Captain_Kirk/Kitco Inc. All rights reserved

You make a good point, and the present dollar scheme must have a semblance of order for it to work at all, and to a certain degree it is working. Of course when you build a 100 foot tall dam which will only hold 50 feet of water but not 100 feet, you can go along quite nicely with your 50 feet of dry season water. After a long dry spell, maybe even for years or generations, you get to believing your dam would hold the 100 feet just like the builders told you it would, but you have never tried the dam at 100 feet. Of course, when the 100 year flood hits, the lake fills to the 100 foot level and the dam busts. Everybody downstream is killed, and the original builders are gone. Who are you going to blame? Just yourself, for not checking out the dam before you decided to build in the flood plain below it. Now was it the water that killed you or the dam that killed you, that is the question? Likewise, will it be the financial chaos that bleeds you dry, or will it be the defective money system that bleeds you dry, that is also THE question?

Date: Thu Oct 07 1999 04:14
Captain_Kirk (ORO@grabbers) ID#339203:
Copyright © 1999 Captain_Kirk/Kitco Inc. All rights reserved


Sad but true, what you say, it does seem. The bankers' commodity is his dollars, and if no one takes his dollars, he still has a bunch of grabbed gold. One small group of people possessing large bunches of gold is no problem for the free market. The build themselves a bunch of castles, but they PAY OUT THE GOLD, putting it into circulation, which keeps the money function of gold operational. Or they sit on it, and commerce happens with the available gold. They can't dump the gold like they can today, because they would have to spend the gold which would not affect the money property. The gold prices of things would not change by very much, the market would adjust. Free market exchange value ( price ) is only established at the moment of exchange, therefore value is only established at the moment of exchange. The gold is not the wealth, money is not the wealth, labor is the wealth. Money is the mechanism for adding efficiency to the exchanges of goods and services. The banker's scheme is a simple mechanism which is used to direct the exchange of wealth according the desires of the banker's. But it is never a free market mechanism, which is the most efficient mechanism available, but most often it is a mechanism which misdirects exchanges so that the efficiency of the wealth producers is retarded. Using our present scheme is just plain retarded. No sane man could accept such a plan, if he undersood what was going on.

So it is not the fact that the bankers have a bunch of gold which is bad for the markets, it is the fact that they have the dollar scheme which is bad for the markets.

Date: Thu Oct 07 1999 04:11
auger (Eldorado) ID#264134:
Copyright © 1999 auger/Kitco Inc. All rights reserved
Your 3:27 & 3:29, We are definitely on the same side here. I agree that the main problem of the hard backed currency right now is volume and I think additionally ( incredibly ) acceptance.
The Bimetalic standard just made it easier for the common person to engage in some of the manipulation for his own benefit ( much fairer ) . Some time in the 1900 to 1910's there was a money panic, as I understand just not enough to go around. Those that had it ( very few ) basicly had a monopoly on the money and most people suffered economicly regardless of the skills or productive ability they possessed. This is the type of manipulation to which I was refering, and it can happen with a single metal backed currency. Of course the timing of the money panic seemed to set the stage for the introduction of the federal reserve act in 1913. Tah Daa WE will solve all your problems, trust US! Today, it looks like the cure was worse than the disease. The pendulum of history ( repetition ) swings back and forth through time. As for me, I looking for some honest money. Even if it can be manipulated, it has to be done through a marketplace rather than government back room, good ole boy, backscratchin, bribe takin, etc overseers. I suppose the greed is the same ( gov vs market ) but the market has to be honest about it.

Date: Thu Oct 07 1999 04:08
Eldorado (@the scene) ID#226299:
If you want to use paper currency, fine. Just imbed a grain of gold in it and call the paper 'One Gold Grain', or 'One Silver Grain'. Whatever. Keep the 'Bravo Sierra' away from it!
Date: Thu Oct 07 1999 03:58
Eldorado (@the scene) ID#226299:
Captain kirk -- The dollar is a 'contrivance'. A supposedly fixed one at that, in that time. Who needs it but the money changers? Screw it! Go gold; Go silver; And nevermind the supposed 'certificates'!

Date: Thu Oct 07 1999 03:54
Eldorado (@the scene) ID#226299:
Captain Kirk -- Let me add that you cannot get an exchange through medium ( gold/silver ) if that medium has for some reason gotten TOO expensive/valuable to use. It then is not a 'medium of exchange', but a 'rare painting'! That happens when a so-called 'fixed value' is put upon it. That has happened in this country in the past. that can easily be avoided.

Date: Thu Oct 07 1999 03:54
Stone-Gold (@Thin) ID#274315:
What I mean is, here we are fixing gold to a currency value, which
isn't fixed to anything. Like Captain_Kirk said, the cart is before the horse. Your foot might be fixed inside the ice-skate, but put that iceskate wrong and you ain't going the way you wanted to go.

Date: Thu Oct 07 1999 03:53
Captain_Kirk (Eldorado@revaluation revamped) ID#339203:
Copyright © 1999 Captain_Kirk/Kitco Inc. All rights reserved

Is the dollar the gold or is the dollar the number. Logical inconsistancy to call a number something, it is just a plain ol number. You can have natural numbers, and fractional numbers, and transcendental numbers, but their definitions are logically consistent within the realm of numbers. You can count some THINGs or you place some THINGs in an order, but you have to have a definition of the THINGs so that the action of counting is reproduceable by a third party. Going around counting angels that only you can see, does not allow for communication and commerce. The problem with the post-1933 dollar is that NOBODY can describe what it is. It can't be a type or class of numbers because, then it can only be defined within the logical mathematical system of numbers. If it is just a word, then to have 5 dollars you have to have the word "dollars" printed 5 times. No, dollars must be defined. And to say that dollars are "value"...., well you see where you end up with that, sorta "out to lunch", were talking psycho ward time here.

Date: Thu Oct 07 1999 03:41
Eldorado (@the scene) ID#226299:
Copyright © 1999 Eldorado/Kitco Inc. All rights reserved
Captain Kirk -- In a general barter scenario, is one of the items fixed ( except in your own mind of course ) ? Think in those terms. You should know that in a world where supplies in everything fluctuate on a daily basis, as well as wants and needs, that NOTHING remains static, and there really is no way to keep a medium of exchange somehow static according to all that. Don't even try! You'll only create congestions in one manner or another. We've seen that crap happen in this country! I think the ONE real thing you want to see in a common medium of exchange is that it is NOT necessarily important to hoard, as it is no more important or valuable than anything else on the market. Thus, except for perhaps savings in one form or another, why keep it?
Right now, many of us see a particular value in 'hoarding' or keeping metals because of all the pitfalls of paper and what it will undoubtedly be undergoing. It only makes sense. But in a 'real' world, we would treat it as we have done with paper; spend what we need to and save a slice for a rainy day and retirement.
Boats float, and so should everything else!

Date: Thu Oct 07 1999 03:37
ORO (@Captain Kirk - demize of the grabbers) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
Once the $ goes back to its spiralling decline, halted by the institution of a debt trap for the US, then the future chaos in the $ world will find the grabbers with empty hands as 99% taxes on miners start in SAf, SAm, and anywhere else.
Without the artificial $ strength, the US soon looses all its' strengths - first the liquidity of its banking, then credit from the world, then its economic prestige, then cheap oil to transport goods over its sprawl, then loose attractiveness to high tech immigrants both old and new, these will return home to build new silicon valleys compeeting with ours, then we loose credibility, then the high tech military edge and the ability to field a large army alltogether.
It just all blows away.....

Date: Thu Oct 07 1999 03:29
Captain_Kirk (Eldorado@revaluation, or devoid of value.) ID#339203:
Copyright © 1999 Captain_Kirk/Kitco Inc. All rights reserved
Fixed revaluation is one thing, floating revaluation is something else entirely. You see the fiction here? My dollars are somehow based on this here gold I have, because I have a fixed value of dollars for a fixed amount of gold. This is where the cart got put before the horse. First you had the note which was a note for a fixed weight of the gold, then you had the gold which was the gold for a fixed number on the note. It sorta works out in peoples minds because, well, something is FIXED, which somehow fixes value. But if nothing is fixed then either the special numbers and special papers are the money, or the gold is the money, but not both, cause we need something FIXED. Now, if the special numbers/paper is the money, then why do you need the gold, and more importantly, why do you DESERVE the gold? They ain't going to be able to answer that question. This is why ANOTHER don't make no sense to me. He is just some old man with dreams of having all the GOLD in the world. Hell, we all have dreams, but it ain't going to happen the way we dream, don't you see.
Date: Thu Oct 07 1999 03:29
Eldorado (@the scene) ID#226299:
ORO -- Not that they have no value, but they have no volume. That's a BIG key in a common currency!

Date: Thu Oct 07 1999 03:27
Eldorado (@the scene) ID#226299:
auger -- As you will notice, it was the price ratio fix between gold and silver that caused the problem. Thus, let the suckers float. End of problem...


Date: Thu Oct 07 1999 03:24
ORO (@Eldorado- El debto is there with full Louis Viton Luggage) ID#71231:
The debt is allready there. It is ready to drive repricing in all shiny metals. Industry will just have to learn to deal with it. The slightest surge in investment or Jewelry demand will send the prices moonwards. The plad, plat, rhodium, iridium have all the properties of gold save maleability for some, they are mostly more rare, and have industrial uses besides, and free markets to boot - with no govie stock overhang to mess things up with. They have allways traded at or above gold prices, which will serve as a floor even if gold skyrockets above them initially.
Whaddaya say

Date: Thu Oct 07 1999 03:13
Captain_Kirk (ORO) ID#339203:
Copyright © 1999 Captain_Kirk/Kitco Inc. All rights reserved

Quick scan of your Another monetary system post. Much food for thought. Will ponder more tomorrow.

I have read most all of Anothers stuff. I prefer my directed linear approach where fraud is fraud, and ownership of private property is respected. Gold is just a form of property. Today, the gold grabber bunch who wish to be Kings of the world, are pushing for ALL the gold, even the gold in the ground. Maybe even the word "Gold". Pretty clear open and shut scam, this gold grabbing scam. Today, gold is the money, and people have always wanted to get their hands on all the money. There is nothing new under the sun, just different shades of grey excuses for common thievery.

Date: Thu Oct 07 1999 03:12
Eldorado (@the scene) ID#226299:
Copyright © 1999 Eldorado/Kitco Inc. All rights reserved
ORO -- Platinum and paladium are about totally used in industry. I don't see them playing a role in monetary affairs anymore than 'barter'. Silver, on the other hand, is, or can be, plentiful enough to make for common currency to a large extent, even though it too is an industrial metal. The key is that their 'price' is not controlled; that their own value may fluctuate amongst everything else out there. Only then do you have a free market, and given that, actually anything can be used as a medium of exchange, but as you know, it is the most common and most familiar across the world that makes a 'medium of exchange'. Gold and silver have respectively and respectfully filled that bill. Perhaps someday, something else can/will come to the fore, but it MUST do so without 'debt' attached!

Date: Thu Oct 07 1999 03:01
ORO (@Eldo - the Scrip) ID#71231:
If govies do not give up the scrip, there will be a new "gold bubble".

Can you see any other way?
I think silver plat and plad will figure into this sceme in some odd way too. I think they are going to be future sources of chaos.
Date: Thu Oct 07 1999 03:00
Eldorado (@the scene) ID#226299:
THC -- Grains!

Captain Kirk -- They've 'revalued' it before, and I think they want it to rise to the point that not only makes it 'logistically' possible to do it again but absolutely mandatory that they do. Times have changed and we are now at the VERY beginning of that transition. It'll easily blow up on 'em if they aren't VERY careful! Got physical???

Date: Thu Oct 07 1999 02:52
Eldorado (@the scene) ID#226299:
ORO -- The control of money/currency is seemingly power. That is ONE thing they will NOT easily concede

Date: Thu Oct 07 1999 02:50
Captain_Kirk (libett@revalue USA gold) ID#339203:
Copyright © 1999 Captain_Kirk/Kitco Inc. All rights reserved

This revalue thing is a key thing, which must be studied. We need comment from mozel, ORO, and others on this very important possibility. There could be far-reaching legal law basis import to any USA treasury revaluation. How can IMF revalue and not USA/FED revalue and visa versa? Which gold is the USA treasury's, and which gold is the FEDs, published disinformation figures, are one thing, actual ownership another. My sense is that if USA treasury gold is revalued, the legal fiction USA corporation mother will crumble and fall. The cat will have jumped the bag, and there will be no turning back. Even the color of law form for post-1933 dollars will crumble, thereby exposing them for the actual fraud they are. Or is my information faulty?

Date: Thu Oct 07 1999 02:48
ORO (@Eldorado) ID#71231:
Yes indeed.
If govies were just willing to let go of the concept of currency and let it die off completely, we could have free markets.
Note that the ANOTHER scheme causes gold immobilization in the hands that have it as long as govies insist on having the power to print their multiple zero scrip ( a.k.a. slavery money ) .

Date: Thu Oct 07 1999 02:05
ORO (The ANOTHER monetary system) ID#71231:
Copyright © 1999 ORO/Kitco Inc. All rights reserved
The form of ANOTHER's expression is appropriate to a Saudi official. It is very consistent with someone with a very heavy interest in the relative value of gold being as high as possible. ANOTHER's currency system is being put in place as "revaluation" ( by the IMF ) of gold, and its' marking to market ( in the ECB ) proceed to increase its value as a reserve asset, even if not a penny of interest can be gained.
The thing most of us miss most of the time, is that the simple fact that everybody's interests, save the governing class in the US, are stacked up towards this new format for floating currencies and gold reserves. It puts everybody on an equal footing and opens the possibility of a level playing field for both banking and trade. It also eliminates the segnorage of the US in printing the world's medium of trade and debt settlement and has a chance of revaluing the debt of the EMs into insignificance - freeing them from the trap the US bankers sprung on them. ( see Mozel post ) One more issue is that the gold accumulated in Europe, Asia, and Arabia through trade, and in the US through payments for services in war is given its original weight as the representation of a whole nations' past financial achievements. ( again a good Mozel point )
The US elite is very much like the elite of Johnstown before the flood, enjoying the night in a cocktail party as the engineer tells them of the near certainty of the collapse of the dam if the storm outside continues, and even if it stops. As the custodians of the dam run for their lives, having seen water coming through the cracks, the elite continue talking of the new library they will have built, the wives talking of the benefits to the poor, the husbands organizing their conspiracy to rig the bidding. Notice that even the engineer, convinced of the impending disaster and its ramifications - including the high probability of his own death - still comes to the party. ( This account is partly fictional - so take no offense )
The working mechanism of the new currency system ANOTHER foresees and is involved in implementing is very straightforward, though only somewhat less fictional than what we have today. It just happens to artificially favor gold.
The manner of strengthening a currency is the main difference from the current system. Each country, and the IMF as well, strengthens its currency by bidding for gold within its borders. As the price of gold increases locally, the backing of the currency has both increased in quantity and in price - and therefore in percentage of backing. Other countries respond according to their need for a stronger or weaker currency for domestic or international political or economic purposes. Through the importation of gold, there is something gained for a net exporter. Through the import of goods, one's currency is necessarilly weakened as it is eventually used to buy gold by the exporter, strengthening their currency relative to the importer. It restores the best aspects of the gold standard in trade and in the settlement of debt, but it will enslave the countries that do not have their own gold and are net debtors. Countries that are US creditors but have no gold will be left with whatever the gold value of the $ would be relative to the Euro, SF and other major currencies.
The gold price in this system has no cap. All have a vested interest in keeping the gold price high. In the meantime, the gold miners will be taxed at incredible rates and gold holders will be picked at as the capital gains taxes on their gold sales are raised over and over. Initially, there would be a strong push to have the gold holders spend the money unhindered, to jump start a shocked economy. After the initial spring time for the gold owners, there would be the atmosphere of growing taxation of gold profits ( inducing people not to spend their gold ) .
Monetary policy would ammount to the throwing of unbacked paper into the market, which would cause the decline of the currency and a surge of exports. The exports will garner a large chunk of gold coming in, and would either displace the currency ( if gold is not bought to increase its backing ) or will be used by the governmnet to support the currency.
Contrast this with the current system, where one needs to devalue the $ in order to strengthen one's currency, by throwing $ into the market and buying one's own. Thus the $ gained in trade are lost in defense of a currency in what is a sure defeat if you are a debtor nation - the US Fed/banks can invent as many $ as are necessary to borrow your own currency from your banks and dump it on the market. As you raise your interest rates, your economy grinds to a halt and as you supply more of your currency to your creditors as a result of higher interest rates, you are either more in debt, or the funds fall into the market where they eventually lower the value of your currency. If this attack on your currency was accompanied by a rush of hot money out of your financial markets, your economy would be destroyed. Your $ denominated paper would be defaulted, and your debts rem

elevator guyThanks for your input, Journeyman!#1576710/07/99; 10:55:12

I'm just a little guy, who is just now climbing out of the financial ignorance of my upbringing.
I risked a little discretionary income, and now have a small wad with which to re-invest in things that will go up!
Without this forum, and a few others like it, I never would have been alerted to this opportunity.
Obviously, real gold is where its at. Looks like the dollar will never be the same.
Please forgive my feverish exuberance, as I try to time my exit from options with the greatest advantage.
We sold the Dec 270s, and the Feb 270s, because as the price of the option goes up, it becomes increasingly illiquid. Didn't want to be left with paper, with no buyers.
(Did I get that right?)
Our objectives now are-
Store earned value of wealth in a form that cannot be manipulated, or corrupted, ie; accumulate physical gold.
Gold stocks, silver stocks, go long.
Short the DOW, as the dollar burns.
Thank you everyone for sharing your thoughts.

OROInternets#1576810/07/99; 10:57:03

Internet index soaring you might think they were gold stocks...
Great rejoicing over Yahoo's managing to "surprise" the street in generating the few pennies of profits that will make for a next year PE of 250 - 300.
Great investments at the end of the 20th century.
Stock goes bonkers after going bonkers in expectation of going bonkers...

Belindagold#1576910/07/99; 11:35:43

http://www.usagold.com

does anybody know which Gold stocks are not hedged/ sold forward?
JCSReply to auger, re money panic in early 1900's#1577010/07/99; 11:42:01

auger, et al

This is an excerpt from an article sent to me and I am trusting in its reliability and historical significance:

"By the end of the 19th Century, American industrialists and bankers, through the Industrial Revolution, had
achieved great wealth. An excellent account of this is Matthew Josephson's 1934 book, entitled "The Robber
Barons: The Great American Capitalists 1861-1901" - (by Matthew Josephson, Harcourt, Brace and Co. New
York, 1934: available secondary market).

The industrialists were known as "Big Business" and the Wall Street bankers as the "Money Trust". The most
prominent of these was banker J.P. Morgan.

It was Morgan, working with the European banking dynasties, who created the "Financial Panic of 1907".
This was an effort to manipulate Congress to approve of a central bank.

In 1912, Woodrow Wilson became President. His chief advisor and administrator was Col. Edward Mandell
House, who was a proponent of world government, a representative of the European banking dynasties, and
had close ties with the Morgan interests.

In 1912, House wrote a book, wherein he laid out a plan to bring America into a world government. ("Philip
Dru: Administrator", by Col Edward Mandell House, 1912; available at General Birch Services, P.O. Box
8040, Appleton, WS 54913-8040). On page 222, he wrote:

"...our Constitution and our laws...are not only obsolete, but even grotesque."

His plan, and, to use his own words, "a conspiracy, " would seek to achieve:
1. The establishment of a central bank;
2. A progressive graduated income tax; and
3. Control of both political parties in the U.S.

What was House's goal? "Socialism as dreamed by Karl Marx". House, who called himself the "unseen
guardian angel" of the Federal Reserve Act, in concert with the Wall Street and European bankers, convinced
President Wilson of the central bank concept.

The Federal Reserve Act was passed on December 23, 1913 (by a vote of 298 to 60 in the House of
Representatives, and 43 to 25 in the Senate).

After the vote, Congressman Charles A. Lindberg, Sr. (father of the famous aviator) told Congress:

"This act establishes the most gigantic trust on earth...When the President signs this act, the invisible
government by the money power, proven to exist by the Money Trust Investigation, will be legalized...The new
law will create inflation whenever the trusts want inflation..."

You will never find them listed in phone directories under "government offices". It is a private corporation
owned by approximately 300 Class A Stockholders. These people own the Fed by owning the stock of the
largest member banks in the New York Federal Reserve Bank, which, for all practical purposes, is the Federal
Reserve.

The controlling interest is held by less than a dozen international bankers, whose names, until recently, was
one of the best-kept secrets of international finance:

1. Rothschild Banks of London & Berlin
2. Lehman Bros. Bank of N.Y.
3. Lazard Bros. Bank of Paris
4. Kuhn, Loeb Bank of N.Y.
5. Israel Moses Sief Banks of Italy
6. Chase Manhattan Bank of N.Y.
7. Warburg Bank of Hamburg & Amsterdam
8. Goldman, Sachs Bank of N.Y.

The most influential of the European interests is the Rothschild family in London. Each of the American
interests is, in various ways, connected to this family, including the Rockefellers, who are by far the most
powerful of the Fed's American stockholders (primarily through the Chase Manhattan Bank).

Thomas Jefferson issued this warning: "If the American people ever allow private banks to control the issue of
currency, first by inflation, then by deflation, the banks and the corporations that will grow up around them
will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."

******************
I sent this article to Bill Murphey and his reply was: "Thanks Claude, That is all part of it, for sure. Bill"

The fact is, the Fed is a private corporation, not affiliated with or controlled by, the United States
Government. The NY Fed is, effectively, the Federal Reserve Central Bank, and it can do whatever it pleases. It has never been audited and only with the help of people like Murphy is there any likelihood of the "real facts" being exposed.

JCSRe: financial panic article#1577110/07/99; 11:45:51

Sorry for the poor paste job.
Also, its "Murphy" not "Murphey"

watcherORO#1577210/07/99; 12:53:49

THANKS for all your work

Could the fed try to settle many gold contracts in off market transactions with the overseas dollars now being bought back and monetized. Also to stop a falling dow could they also not use these monetized dollars to prevent a steep collapse in the markets.I think greenspan was quoted as saying he believes that in stocks that the money goes to money heaven , never to be seen again. In options ,he believes it is a zero sum gain(which I don't completey buy)
With this in mind,When the markets (stock) retreat the money disappears accept those who have options or are short which is a zero sum gain,one winner and one loser.The tranfer of wealth goes to those on the positive side of the option trade . Those who also sold at the top of the downward moving market also benefit but that is just a Function of current pricing and subsequent liquidity at that snapshot in time in the market. If there was all sellers liquidity would be zero and no pricing possible in the extreme. So in this scenerio , the fed adds liquidity and the real place to be is in options as they maintain a semblance of liquidity and then therfore a floor on the market where the place to be again is on the other side of the option trend as the fed buying pushes up the market.
These overseas dollars being monetized then find their way into the bubble allowing the game to continue with the traders making most of the money .
This I thought would be a good way to supply monies to those parties at risk in the trading houses (banks)
without being obvious.
This still might bring inflation but might stop a total collapse in the markets and the dollar.
Does this make sense at all.

OROwatcher #1577310/07/99; 13:17:22

The Fed has been using the exchange stabilization fund for direct intervention and was using directed loans through the banking system to allow the trading desks to save themselves, not by hedging but by countering the trend that puts them at risk.
If you are a bank's trader and you sold puts on the OEX you know you do not need to hedge, all you need to do is have a credit line with near-direct feed from the fed. The moment your puts are largely underwater, instead of delta hedging (what one should be doing theoretically) which moves the market further against you, the bank buys futures in order to move the market. This is the PPT activity.
In gold, up till the ECB made its move, the gold market was treated the same way. If the shorts were under water, then more was borrowed and dumped into the market, or more futures were sold to squelch the rise and bring the POG within the company profit bands.
Now this does no work under tight liquidity as we see today.

The money one looses in the stock market is the size of your margin credit line and your feeling of wealth.

The monetization at the window is done without the money hitting the markets unless directed otherwise.

gidsekFN .. for JCS.. from Kitco#1577410/07/99; 13:17:44

Date: Thu Oct 07 1999 14:53
Mo in To (James (Mo in To@ I see ) ID#347205:
Hi all,
Just popped back to see what's happening. James, the correction was printed in the Globe this a.m. in a teeny tiny box on page two of biz section, correction stated that FN and Viceroy are NOT hedged. I think the damage was done....!
MoinTo
----------------
gidsek

gidsek OPPS Re message below, for Canuck#1577510/07/99; 13:19:22


Yellin' of troyleigh#1577610/07/99; 13:29:49

For an amateur, at least. More than I should, I suppose.
nummus aureusSirs SteveH & Oro #153110 & #15766#1577710/07/99; 13:36:51

Gentle Sirs;
I observe you both have reposted this day a treatise by a Lord Mozel of the House of Kitco, in the land of Papergeldt.
I have no intention to split hairs, or demean what ever the point the Gold Lord took 500 words to make in his address, but I find the fruit of his statement tainted, with his opening analogy and justification based on a plebeian and inaccurate agricultral financial portrayal. I realize we are closely allied with the Papergeldters in the current campain, but this old centurian cannot take on faith the council of an outlander remiss in facts.
Gentle Sirs, I bear no blade against any in this struggle. Who among us can claim his coin purse is to heavy? I only suggest that the words of the other lands stay in those lands, with perhaps, a simple link to show the way. I remain, kind Sirs;
nummus aureus

Yellin' of troyORO's monetary thread#1577810/07/99; 14:15:20

A dollar can be readily distinguished from a non-dollar, and
so can be valued separately. Its value is whatever the market says it is, based on its uses, supply, and demand,
just like any other item; no ultimate, foundational source
of value is needed. The dollar is useful, and so has value,
because it is money, currency: You can buy a cup of coffee
for .xx dollars at much lower transaction costs than a pur-
chase for gold or whiskey would entail. It's the de facto
standard. That dollars are valuable is no more unbelievable
than that a Microsoft product is more valuable than its technical merits might suggest. These things can be quite
conventional and weird; e.g., note the difference in price
between a 1.00 carat diamond and a .99 carat diamond. Use
for paying taxes and loans (legal tender laws) can help to
launch a currency and give it a floor, give people confidence in it, but that's hardly the whole source of the
value.

ss of nepRRSP#1577910/07/99; 14:16:19

RRSP =
Reserve Resources for the Socialist Parasite

foxfox#1578010/07/99; 14:21:58

the Ashanti goldmine is in trouble

and the vaultures and the eagles are waiting;
Ashanti sames a good deal and for anglo and for gold fields

foxfox#1578110/07/99; 14:26:19

http://news.24.com/English/Business/Companies/ENG_151120_705957_SEO.asp

sorry, forgot the link
gold night to everyone especially to my overworked brother in law Fred

Goldspoon**Comex Close Winner***#1578210/07/99; 14:33:56

Sorry..don't know having 'puter problems on my end....are you there...can you hear me?? no seriously... Congrats, i know it wasn't me....won't hear from me for a couple of days...Leigh, quit cheering that's not nice... i know you all are tired of Gold treading water ...i've become my own contrary indicator....so in the intrest of everyone my guess for tomorrow is...$292.63.....
Yellin of Troy...welcome, thanks for the horse input!
Gandalf...(thanks)....for what?...think a minute....

LeighGoldspoon#1578310/07/99; 14:48:51

We'll miss you, Goldspoon! You brighten up the Forum a lot! Are you travelling on Horse with No Name? He's faster than the Concorde!
PH in LAKind and gentle Centurian, Nummus Aureus:#1578410/07/99; 14:54:21

Could you please be more specific in your claim of "plebeian and inaccurate agricultral financial portrayal" in the writings of Lord Mozel, by more clearly explaining your meaning?

Also, your request that "the words of the other lands stay in those lands," needs more careful consideration. Those words are sorely needed here in this land. Unfortunately, for some unknown reason, some knights and lords choose not to bring their words directly to us. However, even as Another's Thoughts were always meant "for all", words "uttered in other lands" must eventually be considered here, if we are to unravel the mysteries facing us all. The service of Sirs SteveH & Oro in bringing those words to us is helpful to many. Access to the other land is, at times, difficult if not impossible and having those "other words" posted here greatly simplifies life in this land, leaving more time to ponder and understand the topics discussed in those other lands as well as in this land.

TownCrierU.S. buying on credit surged in August#1578510/07/99; 15:04:28

http://biz.yahoo.com/rf/991007/s6.html

This unsecured, revolving credit increased by $10.8 billion in August, the largest gain in 7 months. Wall Street economists had expected a $6.9-billion rise.
AELHathaway#1578610/07/99; 15:09:55

http://www.kitcomm.com/comments/gold/1999q4/1999_10/991007.163242.sauleeeee.htm

Date: Thu Oct 07 1999 16:32
saul (ABSOLUTELY MUST READING FOR VERYONE _ LATEST FROM JOHN
HAHAWAY - Tocqueville Asset Management) ID#93123:
Copyright © 1999 saul/Kitco Inc. All rights reserved

Simple Math & Common Sense:
A $66 Billion Problem
By John Hathaway

Don't be confused by self-serving outcries from various parties trapped in the gold short squeeze. I am amazed to hear reports that so-and-so has restructured their hedge book or that this or that group has covered its short position in gold. Such statements are misleading, if
not false. What is happening is that the self-made victims of the growing gold short squeeze are passing the hot potato back and forth among themselves in a desperate attempt to wriggle free. This activity amounts to little more than frenetic paper shuffling. The gold market is in the
throes of a spreading credit crisis. . . . .

(go to link for the rest of the story......)

(if you are in a desperate attempt to wriggle free,
go elsewhere....... :) )

TownCrierFed pre-announces 90-day tri-party system repos#1578710/07/99; 15:13:46

http://biz.yahoo.com/rf/991007/s2.html

This may be in addition to the Fed's normal operation expected for Friday. Today, the Fed added nearly $14 billion of reserves to the banking system through a dual operation of overnight and five-day fixed system repos. The five-days totaled $7.515 billion, and the overnights totaled $6.155 billion.
USAGOLDThe Monetary Triangle#1578810/07/99; 15:18:27

http://pacific.commerce.ubc.ca/xr/plot.html

FOA, Another and All....
FOA, I read your post with a great deal of interest. If you are the Delta dog barking toward the back of the pack, then our friends Spot and Spike must be the Alphas leading the way and I the straggling Omega trying to make sense of a wild two week run. On we go.......

From reading your most recent thinking as summarized in Msg#15713, I get the distinct impression that you believe that the Europeans have mandated their version of closing the gold window, thus making gold dear for any purpose, the settlement of gold carry trades being the most severely affected. Some have said that this event of September 26th by the European central banks ranks in the annals of monetary economics with Nixon's closing of the gold window in 1973 and letting yellow metal seek a free market price.

Following the Nixon decision, we had ten years of dollar devaluation. On the other hand, the European closing of the gold window could lead to ten years of euro appreciation against the dollar -- the exact opposite of the 1970s U.S. experience.

At the same time, if you superimpose a chart of gold in euros over a chart of gold in dollars, a startling observation can be made -- one that graphically shows how much the world of international money has changed. The movement of gold in both currencies is nearly exactly the same!

Having watched the Asian contagion unfold and run the graphs on several sick currencies, there was one relationship that always held true -- as the currency depreciated against in gold, so it depreciated against the dollar. This led me to believe that once the euro was established as an international reserve competitor to the dollar that when the euro went up against the dollar, it would be able to buy more gold. I waited to see if this would be the case and am somewhat surprised to see a new phenomena -- as the dollar has depreciated against the euro, both have depreciated against gold.

My question is for both, or either, of you:

How do you interpret this new phenomena -- this new and to my knowledge unique triangular relationship? Does it not give Europe the opportunity, to issue bonds to finance whatever Europe would like to finance including the military, public works projects etc without damaging the euro's credibility or injuring its market? And by this, do not the Europeans solve a sore problem -- getting their new currency into circulation (something you and I have discussed before). If so, this could be a clever political/economic move indeed and might answer the questions why Europe made the September 26th Gold Sunday announcement as they did when they didn't have to. In other words, at the beginning of 1999 EU launched the currency. Now EU is going to get it into circulation internationally in the form of bonds held in national treasuries. The next step will be make it stick. At that point, I would agree with you -- Europe could become a gold buyer unloading unwanted dollars perhaps through the unwinding of the gold carry trade.

Wouldn't it be a total irony, if the gold carry trade turned out to be little more than a detour that brought us the back way to the same place....gold being used in international settlements as the currency of last resort?

All.....the link above can be used to draw your own euro and dollar gold charts, etc. Have fun. And thank you to the Pacific

USAGOLDThe Monetary Triangle#1578910/07/99; 15:24:52

http://pacific.commerce.ubc.ca/xr/plot.html

I wanted to add to the bottom of my last post a note of thanks to Professor Werner Antweiler at University of British Columbia for his wonderful Pacific Exchange Rate Service. It has shortcut many hours of research that would have taken a great deal longer to conclude without its availability.
TownCrierFed operations--The Tower has been corroborated...first time in print!#1579010/07/99; 15:37:26

http://biz.yahoo.com/rf/991007/hy.html

"(Rising) currency in circulation is the main factor draining reserves from the banking system and that will be the main factor draining reserves through yearend, especially with Y2K." --Dana Saporta, economist at Stone & McCarthy Research Associates.

Saporta estimated that during the current bank reserve maintenance period the daily add need by the Fed is $15.3 billion. The highest we remember previously was near Labor Day at $11 billion per day. It's hitting the fan already, but the blades are turning slowly...

watcherORO response#1579110/07/99; 15:45:03

Thanks for your quick response and I follow what you said.
I have been trying to figure out what they might try to do next seeing that the previous action as you stated is no longer working. Is there a way that they could funnel the money from overseas (USD's) in a way that it would convince those from overseas that the market will not totally collapse because of this intervention. Maybe similar to Japanese holding up their markets. If they don't come up with something and all foreign money leaves that will be I believe the bell that will ring for the end of USD as we know it.

TownCrierTea leaves#1579210/07/99; 15:55:46

http://biz.yahoo.com/rf/991007/w0.html

HEADLINE: IMM currency futures end mixed in light trade
Some up, some down, and best guesses why are given.
(Isn't that how it always is? The absolute truth is simply not explainable in this format.)

SteveHnummus aureus#1579310/07/99; 15:59:25

Thanks for your thoughts and I agree a link SHOULD do but unfortunately, kitco, can be 10's or 100's of pages of posts in one day. To link and then make a reader find said significant posting is work that might force a miss of thought. Convenience in the face of links in the case of kitco save us all time. You may note that the link to Mozel referenced beaucoup other relevent posts and an invite to read them. Kind regards.
TownCrier£383 a pint? Pull the other one #1579410/07/99; 16:15:46

http://news.bbc.co.uk/hi/english/business/your_money/newsid_467000/467742.stm

One hundred years ago, a pint of beer cost one penny, and if prices continue to rise as they have, a pint will cost £383.57 by the end of the next century according to this BBC article. A survey showed the average price for a pint of ale to be £1.64 today.

This speaks more about the money than it does about the ale. You'd best get your solid and liquid gold now while the prices are still so favorable.

*Ching-ching*...gulp, gulp... AAaahhhhhhh!

PH in LAKitco Reposts#1579510/07/99; 16:34:10

SteveH:
By opening Kitco in Short Text mode the link that appears to open the whole post can be brought here intact and will continue to function. I, for one, do not object, however, to your cut & paste as it saves time, especially when Kitco access is restricted. Also, ORO's technique today of pulling together the whole thread so that numerous posts do not have to be searched for, was much appreciated for the same reason.

FOAcomment#1579610/07/99; 17:11:21

Orca (10/07/99; 09:59:09MDT - Msg ID:15763)
(No Subject)
The Economist .. Peter Drucker says it all

Hello Orca,
Just wanted to say thank you for that article. Every investor needs a base perspective when listening to all this modern input. All of us should hear things spoken in different ways as no one person can ever make the best point for our individual ears. FOA

FOAComment#1579710/07/99; 17:13:01

SteveH (10/06/99; 22:20:05MDT - Msg ID:15718)
To a friend Leroy,

SteveH,
Leroy is in for some show if he only follows this trail with us. With this crowd getting much larger it increases the chance we won't miss anything. Even if one does not invest, it's worth walking from a historical view point. "we watch this new gold market together, yes?",,,,,, Yes! Thanks for writing FOA

FOAComment#1579810/07/99; 17:15:32

ORO (10/06/99; 23:44:47MDT - Msg ID:15721)
SteveH - Your letter - a mechanism

Oro,
With that fine post! You have opened up the "essential concept" for viewing. This is indeed where we are going on an "official basis". It will be one great chess game to watch. Thanks FOA

Also:

Simply Me (10/06/99; 23:59:12MDT - Msg ID:15722)
Thank yoo, Sir FOA.
Your words of encouragement are needed now more than ever.
Many of us are "in" gold to the hilt...according to our means

Hello SM,
If you are "to the hilt" in gold bullion, "according to your means": Then you stand square in the middle of the preferred "real security" holding through out our history. Come what may, if the price rockets or plunges, all paper moneys have failed as society returns to gold. Believe it! FOA

FOAComment#1579910/07/99; 17:17:32

Cavan Man (10/07/99; 09:24:38MDT - Msg ID:15758)
FOA
Darn. I missed you. Cavan Man here. I am not interested in "timing" but, time frame or range of time would be helpful. Thanks.

Hello C Man,
For anyone that wishes to hedge their other wealth with a portion in gold bullion: We are on the road NOW! FOA


Also:

AEL (10/07/99; 15:09:55MDT - Msg ID:15786)
Hathaway

AEL, very good link, sir!

Canuckgidsek and ss of nep#1580010/07/99; 17:29:06

FN

gidsek,

Thanks for your message 15776, noticed today that FN did not take the hit that ABX and PDG did.

ss of nep,

Caught your message yesterday re: phone call to FN.
Thanks. P.S.: Have been to Carling Ave. often this week.
As I approached the wicket today the sweet young lady said,
" ... another onze sir...?"

SteveHIt works (the short list on kitco with a URL)#1580110/07/99; 18:50:16

http://www.kitcomm.com/comments/gold/1999q4/1999_10/991007.201544.sauleeeee.htm

***
Here is where Oro and I find the FOA track holds. For example, either Hathaway is a secret admirer of A/FOA or they have the same conclusions and or the same information. In essense, gold leasing resulted in the greatest distribution of wealth to the masses ever seen and made the folks who knew when to unwind early rich in the process. To those holder's on, well...that is another story still in the telling, eh?

snippet:

The Great Gold Fire Sale

It is axiomatic that the way to create a shortage of a particular asset is to under price it. The US government has proved this beyond doubt across a wide assortment of commodities. There are various ways to set prices such as ceilings or price supports. These methods have been applied to gold with stellar results. Gold¹s special characteristics, which include a large above ground inventory and monetary attributes, subject it to other forms of price fixing. As with paper currency, gold¹s value is affected by the cost of interest, or the lease rate.

The mis-pricing of gold credit has been a central cause for the late stages of the gold bear market. The development of deep forward markets has only occurred in the last decade. The gold pyramid that we have described is nothing more than a conduit for the divestment of central bank gold into the physical markets. Gold in the vault has been replaced by phantom "gold receivables." If the lease rate were comparable to market rates for paper currency, the gold derivative pyramid could not function. The carry trade would blow up and the arbitrage between paper currency and gold, which is the foundation for mine hedging, would not exist.

Pierre Lassonde, President of Franco and Euro Nevada, recently wrote in the Northern Miner: " The single greatest damage caused to the gold price has been indiscriminate leasing, by central banks, of their gold reserves at giveaway interest ratesS.These suicidal rates are a gift to the speculators, hedge fund managers and producers who hedge." Low lease rates of 1%/year, he observes, represent an inappropriate 75% discount to US T-bills.

If gold leased by central banks totaled 10,000 tons as of June 30, the interest differential exceeds $2 billion. Since the new age central bankers view their institutions ( incorrectly ) as profit centers, sub-market lease rates appear to be a glaring departure from their mission. The ill-conceived leasing trade has depressed the value of a major reserve asset, and it has also transferred an embarrassing level of wealth to non- citizens.

What is the correct interest rate for gold? No one can answer the question. Interest rates set by committee lead to distortions and miscalculations. While the interest rate on gold has not been set by a committee, it does reflect the collective negative attitudes of central bankers towards a reserve asset they inherited from the previous generation and a willingness to trust in paper assets, which they did not inherit. In reality, the rate is based on nearly unanimous acceptance by central bankers and mining executives of the bullion dealers¹ sales pitch, in short, a virtual committee.

Who is benefiting from the fire sale? Financial speculators and bullion bankers are high on the list. Even higher up, however, are the world- wide consumers and investors who form the physical markets into which central bank gold is disappearing. Thanks to the gold pyramid, they are able to acquire vast quantities of the precious metal at prices well below the cost of production: present, future, and probably past, if inflation adjusted. Recent dispatches on gold consumption show very positive trends. For example, India, the largest consumer, reported 80 tons of imports in June, on a pace to shatter last year¹s record. Other Asian economies show similar patterns. The US is minting golden eagles at an annual rate of 365 tons, a record pace. Jewelry consumption worldwide is showing strong positive trends. According to the World Gold Council, consumer demand rose 16% in the first half of 1999. Refineries, which melt down central bank gold bars, are as heavily backlogged as any time in history.

Consumer demand for gold is breaking all records. Thanks to the depressed gold price, consumption for jewelry and investment exceeds sustainable sources of supply, mine production and scrap by a wide margin. Without the giveaway engineered by the bullion banks, there would be a shortage and the gold price would be much higher. As with the US dollar, there are twin deficits. The first deficit is the short interest arising from the mismatch between gold derivatives and physical gold. This is a technical market condition, which will be resolved at some point by short covering. The second deficit arises from the growing appetite of world gold consumers, fed by artificially low prices. This chronic, fundamental market deficit will be closed only by much higher gold prices, over a period of years. At some point, frenzied short covering will crowd out consumer demand. Perhaps the grass roots owners of gold will oblige the shorts by melting down their holdings. Issuers of gold derivatives choose to ignore these facts in pursuit of ever greater profits in their risky business, girded in the belief that they have the staunchest of allies in the witless compliance of nouveau central bankers and death-wishing gold mining executives. Few of these players are receptive to a wake up call. Denial is still in high gear.

The recipe for a shortage has been carefully followed. A few finishing touches may be required before a market epiphany. There is no known reconciliation between paper and physical positions, and none will be attempted until after the squeeze. The weakness of credit analysis and supervisory oversight, as well as the many ambiguities in the linkage between paper gold and physical can flourish only if there is supreme confidence in gold¹s permanent downtrend. The trust and confidence essential to balance the gold derivatives pyramid depends on three critical errors: that mine reserves = physical gold; that gold receivables = gold on hand; and that financial markets will enjoy smooth sailing indefinitely. Trust is nothing more than a state of mind. When this levitation is finally exposed and its illusions shattered, it is ludicrous to think the imbalances can be corrected by a small rise in the price and within a comfortable time frame. Expect the resolution to be swift, furious, and uncomfortable for those caught short.

John Hathaway
August 20, 1999

***

SteveHButler#1580210/07/99; 19:02:01

www.kitco.com

Date: Thu Oct 07 1999 20:20
ted butler (APH) ID#317184:
Copyright © 1999 ted butler/Kitco Inc. All rights reserved
Two things. One, I wanted to post something the other day about you but lately, sometimes you just can't get in, and later, it's not the same. But, for the record, for those who might not know, APH is the best technical trader I've ever seen ( save oldman, it's a tie ) . I'm not a technical analyst, but I can tell you, you won't get rich betting against him. He is as good as it gets.

Having said that, I want kill two birds at once. I'd like to warn APH and everyone. This market ( gold and silver ) is really starting to scare me. I think we're on the verge of out of control. I think even the slightly hedged miners could face real problems. I think one day ( don't ask me which day ) we could come in 50-100 higher in gold and 5 in silver. I would hate to see anyone here get hurt. Yeah, we could go down first, then up - but so what? - down 20 in gold, then up 200? Down 50 cents in silver, then up $20? There is no ulterior motive. Take a clue from the miners - don't do what they did wrong - selling calls or open liability exposures. Don't be short. If you must bet the downside, buy puts. Let's be careful out there.

FOAReply#1580310/07/99; 19:12:16

USAGOLD (10/07/99; 15:18:27MDT - Msg ID:15788)
The Monetary Triangle

------------From reading your most recent thinking as summarized in Msg#15713, I get the distinct impression that you believe that the Europeans have mandated their version of closing the gold window, thus making gold dear for any purpose, the settlement of gold carry trades being the most
severely affected. Some have said that this event of September 26th by the European central banks ranks in the annals of monetary economics with Nixon's closing of the gold window in 1973 and letting yellow metal seek a free market price. Following the Nixon decision, we had ten years of dollar devaluation. On the other hand, the European closing of the gold window could lead to ten years of euro appreciation against the dollar -- the exact opposite of the 1970s U.S. experience.--

Hello USAGOLD,
To the above---- "Absolutely"!!
I don't know if the timeline will be that long (ten years). The dollar will most likely fully collapse into some form of controlled inflation with exchange controls and all. ORO (#15721) wrote a good outline using Another's, trying to conceive the form of a new currency structure without the current dollar system. Today, in the middle of all of this, the pressure is indeed on to increase the value of gold "in all currencies". Make no mistake, no one wants this, but the majority has accepted that this is the only way out from under the dollar.

You write:

----At the same time, if you superimpose a chart of gold in euros over a chart of gold in dollars, a startling observation can be made -- one that graphically shows how much the world of international money has changed. The movement of gold in both currencies is nearly exactly the
same! Having watched the Asian contagion unfold and run the graphs on several sick currencies, there was one relationship that always held true -- as the currency depreciated against in gold, so it depreciated against the dollar. This led me to believe that once the euro was established as an international reserve competitor to the dollar that when the euro went up against the dollar, it would be able to buy more gold. I waited to see if this would be the case and am somewhat surprised to see a new phenomena -- as the dollar has depreciated against the euro, both have depreciated against gold.

Michael,
Continuing from my above: It's going to be a two phase operation. For the Euro to continue gaining credibility against the dollar, it needs a rising gold price in both currencies to build the Euro perception. In this stage they don't want the dollar exchange rate to collapse, but rather draw trade flow settlement into the Euro. It's expected that a steady interest rate policy and the lack of aggressive intervention will place them in a better light. But, most importantly, a rising gold price will detract from the dollar on a world basis more so than it will the Euro on a Euroland basis. Using points we have covered many times, the ECB will have more than enough resources (read that dollars on hand) to keep a firm bid under gold. This act of bring in gold as Euro reserves (not currency backing) and cannot help but undercut the dollar's world position. Especially now that the world dollar gold market is "on the ropes" and about to drive the dollar gold price to the sky.
Their item about commiting gold supply to 2,000 tonnes was a farse. Yes, the supply is needed to controll the burn, but a gold rush will cause much greed to retain the bullion. The BOE may continue, but all of them will cut and run when the gold price starts to rise. I bet they still sell for show but hold a backdoor deal to retain the metal.

Your words,

----How do you interpret this new phenomena -- this new and to my knowledge unique triangular relationship? Does it not give Europe the opportunity, to issue bonds to finance whatever Europe would like to finance including the military, public works projects etc without damaging the euro's credibility or injuring its market? And by this, do not the Europeans solve a sore problem -- getting their new currency into circulation (something you and I have discussed before). If so, this could be a clever political/economic move indeed and might answer the questions why Europe made the September 26th Gold Sunday announcement as they did when they didn't have to. In other words, at the beginning of 1999 EU launched the currency. Now EU is going to get it into circulation internationally in the form of bonds held in national treasuries. The next step will be make it stick. At that point, I would agree with you -- Europe could become a gold buyer unloading unwanted dollars perhaps through the unwinding of the gold carry trade.
Wouldn't it be a total irony, if the gold carry trade turned out to be little more than a detour that brought us the back way to the same place....gold being used in international settlements as the currency of last resort?-----

Yes sir to all of it!
This will process over one to two years. Or does it work out into the new 5 year plan of the ECB? We shall see. The dollar crisis should be worked over by then. Perhaps our much needed time frame to work gold into the thousands?
Once the Euro begins to see a run for it's currency (next year or so?) the gold price in Euros will stop rising as fast as the dollar gold price. Simply stated, the dollar/Euro exchange rate will halt most of the depreciation of Euros against gold. This is the second phase that Another spoke of long before the Euro was even born. Here we see gold at perhaps several thousand Euros, yet in the many many thousands of dollars. This is why it was so important for them to hold ECB committed gold paper. Euroland could later lock a low oil price using high gold as partial settlement. It will be a spectacular boom for their economy.

Michael, it's world class history in the making, Yes? Thanks FOA

TownCrierAfter the Close: the GOLDEN VIEW from The Tower#1580410/07/99; 19:15:20

http://biz.yahoo.com/rf/991007/vv.html

Last month the Bank of England's Monetary Policy Committee surprised the markets by raising its base rate by 0.25% to 5.25%. Today, however, the MPC chose to leave the UK interest rates unchanged, a decision that was welcomed by business leaders and unions which claimed that another rate rise now would damage UK industry and lead to job losses. Isn't it apalling...the degree to which our level of existence is now determined by borrowed money and the ease with which more may be borrowed and repaid? The world has only one permanent money supply (gold), but with the current high level of outstanding gold loans, even this most stable of all money has been artificially inflated, creating an artificially low value. So when you look at gold as in the same boat as the pound, if the prospects of a 0.25% rate hike would cause such "trauma" to the borrowing masses, imagine what damamge has been done within the gold world with annualized rates rising from 1% to nearly 10%, and currently hovering near 4%. (see table below)

Gold lease rates (expressed as an annualized rate)
1-month 3.9160%
2-month 4.1120%
3-month 5.1760%
6-month 4.9360%
12-mnth 4.8188%

When this sorts itself out following "the mother of all bank runs for gold," the boys here in The Tower would like to see future lending operations limited to national currencies only. Gold must be left uninflated in order to function globally as the immutable standard against which all currencies may be fairly compared. "Paper gold" must become a thing of the past. Somebody please phone the BIS and get to work on this right away. The Tower thanks you, and our children's children's children will surely thank you, too.

On Wall Street, the DOW lost half a percent while the Nasdaq finished even. NYSE decliners outnumbered advancers 17 to 12, and new 52-week lows totaled 124 while only 44 reached new highs.

The 30-year Treasury Bond lost 4/32 in price, pushing the yield to 6.18%. Traders had a hard time explaining the morning volitility in pricing for the bond, but rumors circulated that data from tomorrow's employment report had somehow been leaked. Focus is certainly in that direction for tomorrow's official release of payroll and employment data. Traders were also somewhat disappointed that the BOE and ECB independent decisions to leave intrest rates "as is" didn't translate into stronger price action for the US bond given the "weakening aspect" of those decisions to their respective currencies. The ECB refinancing rate was held steady at 2.5%. Analysts weren't widely expecting rate hike by either entity today, although ECB President Wim Duisenberg said the bank's tightening bias was still present "in full force."

Staying with currencies, the dollar gained 0.24 yen to close at 107.55 yen. The euro gained .45 cents against the dollar, closing at $1.0734 (and 115.09 yen).

In the gold trading arena, today was another one of those types we described yesterday wherein a "price correction" was entirely accommodated within the day's trade. The London markets briefly took the price down to $314 before buyers promptly returned it to within $1.70 of yesterday's closing mark in NY. Spot gold was last quoted at $322.30.

Reuters reports that the world's gold industry is currently sifting through the wreckage brought to the balance sheets of bullion bears to assess the extent of the destruction from the recent and sudden price surge. (A $70 rise is child's play when you consider the global potential, and not just a COMEX-driven phenomenon...in fact, you've already seen the oversees markets take the lead in price run-ups. For example, here's something you'll never see on the COMEX trading floor: Taiwan's gold imports totaled 6.741 tonnes in September, compared with 4.063 tonnes in September one year ago--a 67% increase.) Reuters says much of this damage won't be revealed directly, but will emerge annecdotally in Q-3 financial statements, or as players simply drop from sight.
+
A chief dealer at a bullion bank said, "Months from now you are going to see people restructuring departments and getting out of the business. But you are not going to know anything until these things happen." Another bullion bank dealer said, "Everbody is talking about people getting hurt in this market. I think there have been people that have probably gotten hurt, like people who have credit exposure (to these gold customers). But nothing is crystalized yet so nobody really knows what the damage is going to be." A bank analyst chimed in, "All that stuff they keep fairly close to the vest for competitive reasons." You can read more at our featured link.
+
So while some of these hardship cases will disappear quietly into the night to lick their wounds and never be heard from again, others prefer to make their exit kicking and screaming all the way...
Bridge News--London--Oct 7--The recent euphoria in the gold market cannot mask the
underlying erosion of gold's role in official reserve portfolio management,
according to a presentation prepared for the Nikkei Gold Conference by Andy Smith,
analyst at Mitsui Bussan Commodities. The paper, titled "The Fall of the
Golden Wall", argues the philosophy behind holding gold, is doomed, like the
Berlin wall, to collapse "under the weight of its own contradictions."
+
Well, well certainly defer that call to you, Mr. Smith, as the undisputed master of contradictions. Wasn't your last quote something to the effect that gold was money, and it was the central banks' duty to step in and reliquify the market? And the day before that you were quoted as saying gold was a tiny market traded by locals, and was fundamentally no different than copper. You're only succeeding in drawing unnecessary attention to yourself, dear friend. My we suggest you try the "quietly fading" option?

Here's how Bridge News put the wraps on today's action among the gold bookies...

NY Precious Metals Review: Dec gold dn $1.70 amid choppy trade
By Mary Powers and Tina Petersen, Bridge News
Washington--Oct 7--COMEX Dec gold futures settled down $1.70 at
$324.30 per ounce amid quiet, range-bound trade. Traders said the market
is consolidating after gaining $26.50 since Oct 1 as players stood by to
see whether the short-covering rally would continue.
Traders said the markets are using these quiet days as an opportunity
to consolidate recent gains, but most remain bullish on the precious
metals markets.

Trade buying helped Dec gold to come off its lows in the morning, but
the funds were said to be largely absent from the market today.
The gold market remains volatile, trading in a broad range, with
support at $315 and resistance at $330. Leonard Kaplan, chief bullion
trader at LFG Bullion Services, said "the market keeps moving in that
range but it is my strong feeling we will be moving higher. Short-covering
has not been fully accomplished," he said.

If other producers such as Cambior Inc.--which Wednesday said it has
hedging positions for 2.7 million ounces of gold at an average price of
$318 per ounce through 2007--have oversold their production, "then there
is still a lot of short-covering to be done," said Kaplan.

In the near term, many said they are waiting to see if the recent
price moves in gold will work their way through the market. Traders said
that the fact that the market closed above $320 was relatively positive.
"The moves that we saw above $320 were made on fresh long buying as
opposed to short-covering, so that means there is more short-covering to
be done," a trader said.

One trader said he expected the market to open lower Friday morning
then to be pushed higher ahead of the weekend. "Friday tends to be a
sell-off day, but with the type of momentum we've had, some players might
take advantage and push prices up for the weekend." He said there is
strong buying in the mid teens.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN
---
In a FWN alert with no attendant story, "ECB's Duisenberg rules out EU gold-selling agency." We'll keep an eye open for any elaboration on that, as it would have some significance regarding whether the LBMA was expected to survive widespread balance-sheet carnage as described above, or not. Here's a tip for whomever is left standing to pick up the gold market pieces...you can sell it all you want. Just don't lend it. Ever again.

During yesterday's COMEX futures trading, 69 new October contracts were established, bringing the open interest at day's end to 140. Over 11,000 December contracts were settled, open interest there closing at 115,682. The total OI for all COMEX gold contracts stood at the end of Wednesday's trading at 204,535 contracts.
Today there were delivery intentions given on another 40 of the October contracts, the total so far for the month is now 2,504 contracts (nearly 8 tonnes.)

Within the COMEX gold depositories, today marked the first day this week that gold was moved in or out. It was in fact moved...out. 2,986 ounces of Registered gold was withdrawn from the ScotiaMoccata vault, marginally reducing total COMEX inventory to 924,634 ounces.

Having more than doubled in price over recent months, the Fifth Horseman has kicked off his shoes and is walking barefoot in the grass these days. November crude settled down 82c at $22.45 on the release of surveys showing that OPEC compliance with production-cut agreements had slipped in September. The going concern is that these higher oil prices are encouraging some oil producers to increase production. Here's what the survey reveals: September compliance for all of OPEC was 87.9% compared with 89% in August. Hardly anything to worry about. Looking closer at the numbers, OPEC's September oil output (excluding Iraq, of course, who is pumping all that they can in a bid to become the 51st state) was 23.50 million bpd, up 60,000 bpd over August output. That 60,000 barrel daily rise over August is one-quarter of one percent of daily OPEC (sans-Iraqi) production. You can't even measure that reliably, let alone justify an 82c drop in price per barrel on the news.

Meanwhile, Jordan's King Abdullah II, travelling now to the United States, has been accused of "passing notes in class" by the tattle-tale kid in the back row, as one report claims that Iraqi Deputy Prime Minister Tariq Aziz passed a message to the Jordanian prime minister (allegedly for delivery to the US administration) when Mr. Aziz arrived unexpectedly in Amman to give "a thorough account (of the situation in Iraq) to allow the Jordanian leadership to see things clearly if it [Jordan] wants to raise Iraq in its Arab and international talks." Jordan has often been seen as a promoter of peace for the region, and these meetings with Iraq are seen to be business as usual. At any rate, the denials on both sides are officially in: Jordan has not been given any specific message to deliver to Washington on Iraq's behalf. And now, if the King is caught chewing bubble-gum on the plane ride over, we sure hope he brought enough for everyone to share.

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

TownCrierTo anyone interested in the full text of Mr. Hathaway's commentary excerpted by Sir SteveH#1580510/07/99; 19:23:45

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

It has been available at USAGOLD's Gilded Opinion page since the end of August. Click the link and enjoy your reading. It does mesh well with all that has been laid out here at the Round Table and Hall of Fame.

Enjoy your reading experience, and hurry back with your thoughts.

flierdudeFOA and others. #1580610/07/99; 19:31:37

I am quite worried about my investments because of the FOA postings.

At this time I have 100% of my investment funds in one form or Another in Precious Metals. I am presently diversified as follows. 38% in physical silver, 32% in BMG , DROOY , and CALVF gold stocks, 20% (value at this time) in December 310 and 320 gold calls , and 9% (70 ozs.) in physical gold.

I would appreciate any opinions as where I should change my position. Do I have enough time to ride out the Dec Calls? Should I unload the stocks? If so by when? Should I take the proceeds and put it only in physical gold? I like silver only because of Buffett, Soro's and Gates position.

Thank You

TownCrierFed Says Y2K Could Affect Bank Reserves#1580710/07/99; 19:36:05

http://dailynews.yahoo.com/h/nm/19991006/bs/yk_fed_2.html

Fed Vice-Chairman Roger Ferguson said Wednesday the Fed was storing cash around the country "to allow banks to meet any sudden or unexpected spikes in the currency needs of their customers." He warned against complacency, adding, "No one can say with certainty that there won't be any problems or disruptions during the century changeover."

Thanks for the honesty, Mr. Ferguson. We love you for it.

TownCrierU.S. executives leery of Y2K bug - poll#1580810/07/99; 19:39:50

http://biz.yahoo.com/rf/991006/oa.html

A poll released Wednesday revealed that most executives responsible for corporate Y2K planning will stockpile cash and stay off airplanes at year's end.
BonedaddyFlierdude#1580910/07/99; 19:44:54

I too worry about such things from time to time. It is good to trust ones instincts. Find the investment mix that allows you to worry less, and sleep more. Which is the bigger problem, missing some price appreciation on a mining share or losing it all in one of the various paper crash scenarios? Gold, it's the money you get to keep. Keep enough in cash to pay several months bills. Godspeed, Bd
au49retrace#1581010/07/99; 20:04:12

just went short gold.
Al FulchinoFOA? What does this ounce in my hand buy if....?#1581110/07/99; 20:11:46

Forgive my intrusion, but just what does this $30,000.00/oz.of gold purchase? I see so many, almost stammer at what 10,000 and 20,000 and 30,000 dollar gold means to their portfolio. But does this ounce that buys a suit then buy 92 at 30k? My view is no, that gold has been undervalued. Simple? Yes , of course, but at the same time, I do not believe that I will be buying 92 suits with the ounce. FOA, how do see the purchasing power of that ounce? Thank you in advance should you have the time.
Golden CalfA drop in the markets is due#1581210/07/99; 21:08:12

It looks like me may be in for a bit of the down
side. Markets are poised for a drop, and may take
oils, PMs along for the ride.

Are you ready emotionally...it may be a shaker!

elevator guyHow does one go about "shorting" the dollar?#1581310/07/99; 21:08:35

Does any one know what investment vechicle, or financial product can be traded so as to "short" the dollar?

Thanks!

au49elavator guy#1581410/07/99; 21:32:32

buy another countries money and you are short the $usd. the euro is best bet-- maybe.
Golden TruthGOLD DOWN $6.05#1581510/07/99; 21:38:24

Looks like someone is starting to "shoot" back.
Thats o.k you're still not going to get my GOLD!!!
Also i can ride this downturn to hell and back and not even be out of breath.

How does it feel MR.SHORTIE to be losing money hand over fist? Get real used to it,you slime buckets have caused alot of grief around the World and now its your turn to die!!!!!!

P.S Good Luck you're going to need it! BAAAh HAAAAh HAAAAh! Baaaaah haaahaahaah you fools.

nugget0FLIERDUDE#1581610/07/99; 21:40:48

re your investments...

I think what FOA has been hinting at..paper is paper is paper is paper......
gidsekshorting the dollar#1581710/07/99; 21:48:29

You can simply sell dollars and buy another currency, easily done but I sense that you are after leverage. Comex has Futures contracts based on currencies and CBOE, Chicago Board Options Exchange offers currency options I think.

Taking a look around though and seeing the damage done to hedge funds (LCTM and others) and the gold shorts by holding the wrong derivatives at the wrong time it seems to me that there are much better ways to make money. My experience was limited to a few DOW and S&P put options and it wasn't a happy one. It's rude I'm sure to offer this advice but in your interest.. if you have to ask how to go about "shorting the dollar" that's a very strong clue that perhaps you shouldn't be playing that game. Derivatives haved creamed a couple of Nobel winners after all..

IMVHO

gidsek

Gandalf the WhiteOK Spot , -- time to wakeup !#1581810/07/99; 21:52:38

Jump Spot JUMP ! (317.10)
<;-)

16-pennypurchasing power#1581910/07/99; 21:57:07

an oz of gold will buy as many goods and services as you need or want. as opposed to currency say $50 for milk
Tomcatflierdude#1582010/07/99; 22:08:07

Regarding your portfolio:

What are your objectives? The fact that I am very very heavy on the physcial side should be of no help to you because I have my own personal objectives that holding physical satisfies for me. For example, I have a very long term wealth transfer program for my kids to be executed when I do my final act. For this, physical works. A friend is a Las Vegas entertainer/gamble/womanizer who would croak before adopting my plan.

We are a long way in our understanding of the PM scene. What conclusions have you drawn about gold and silver? Where to you stand on the scale that goes something like:

Weath Preserver
Investor
Speculator

Most important, where do you stand on the current short situation.

We know have tons of direct and circumstantial evidence to help us draw our own conclusions. I would bet that if you spend some time working it out, then you'd be suprised at how strong an opinion you hold about the future POG, POS, and paper gold and silver.

megatrongold worriers#1582110/07/99; 22:13:05

Worrying about this or that seems to me to be pointless unless your a fully involved day trader. Gold isn't the investment for day traders though. NEVER will be IMHO.
It's a position to be held in physical ownership and not lost sleep over or traded away like the idiots in our gov'ts. You and I and EVERYBODY knows inately that money is going to be worthless and it's the timing that's critical.
Like the smart man said, it's in the 'you'll find out dept'.

jinx44The "ED Spread"#1582210/07/99; 22:14:32

jinx44

I think the euro and dollar rise in gold (I will call it the "ED Spread") will widen as the velocity of circulation and concomitant increase in monetary aggregates in euros occurs through more widespread usage. Perhaps a way to speculate on this phenomenon would be to purchase an insurance annuity in euros using dollars now. Lock in the rate at 107, almost parity , but pay out in euros in 10 years might see the rate at $US20=1euro, or 18 to one.

The rise of the euro against gold will slow as the dollar rise in gold starts to roll hard. The euro may be a near gold substitute that could stabilize at perhaps 1oz.Au=500euros=3500$US. Just speculation.

OROFOA the new Monetary order#1582310/07/99; 22:31:54

As the commentary in the thread has shown there are problems in this conception. Which, in some years into its establishment, will cause a disaster no different from that of the $. Gold would then suffer severe discredit.
The main flaw in the system is the insistance of governments on issuing scrip bearing their dead personages of history and the continuation of the banking farce without converting the bank structure into an honest capital pooling mechanism. The latter will occur anyway, eventually.
The secondary flaw is the imposition on the markets of a preference to gold that is not of the market's own choosing. So far, my thinking indicates that this will cause the junior, but more rare, PMs to push gold out of the marketplace and replace it with these surrogates for which the governments do not bid. Again, a gold bubble would form since that is what this system is all about, then the markets will find retribution through the other metals.
Has there been any thinking in this regard?

jinx44Al--your 15811 on a new suit#1582410/07/99; 22:33:05

I like your question about what do you get for an ounce. I think if the $ price rise in gold is your 100:1, I would say that suits will go for 10:1. There will alway be suits, but only so much gold. I think an added zero after each $bill would just about do it. If gold goes to $US3000, the suit may actually go down in price. Who knows??
Black BladeSlow night#1582510/07/99; 23:06:59

Au down $4.80, someone better check on the chart guy at Kitco. He must be asleep or worse! Kitco shows a flashing light and is flat-lined. Poor guy might need an ambulance!

Flierdude, I wouldn't advise anyone on their investments, only that in the last couple of weeks since my return to the US, I have adjusted my portfolio to 35% PM's. This includes Stock (HGMCY, PDG, FN, SWC, etc.), and physical PM's. I think about what I could have gained in options but "chickened out" before the big move. I'm waiting to see if the "hedge-fund" miners are going to drag down any innocent bystanders along with them. Obviously "bean counters" have no business trying to lead the PM business. Most CEO's, CFO's, and directors in this business are inept. They come from other industries or are from industries outside of mining and they haven't got a clue about the unique dynamics in this industry. Some companies have begun to notice this "small detail". One case in point...The new CEO to be at PDG, Jay Taylor, this guy has quite a bit of background in this business. Finally a logical move by a Au producer! I would expect some good leadership at PDG, whereas I tend to avoid companies such as ABX, ASL, and even DROOY where they have no confidence in their product (ie. forward sales, hedging, etc.). This of course is my opinion only, but I am sure each of us could give you a different line of reasoning why each invests the way he/she does. I can only say do the research, see what your risk tolerance is, and invest accordingly. My personal rules are quite simple: (1)Safest - Physical PM, (2) Ivestment - Stock (for longterm), and (3) Spculative - paper trades such as options (all types and strategies). As the so-called experts say "will you be able to sleep at night?" So have fun.

ET, where you been guy? with Townies Y2K posts and links, I thought that you would be all over this forum like "flies on dog....". What new Y2K info do you have?

Chris PowellA feast from GATA#1582610/07/99; 23:21:06

Enjoy a feast from GATA.

John Hathaway of the Tocqueville Gold Fund
on the inevitable and deadly math of the
growing short squeeze in gold.

http://www.egroups.com/group/gata/240.html?


GATA Chairman Bill Murphy says the European
central banks are holding firm in support
of gold.

http://www.egroups.com/group/gata/241.html?


A good Reuters article on the shorts.

http://www.egroups.com/group/gata/242.html?


Disclosure of Goldman Sachs as the largest
creditor of the now-ruined Ashanti Gold.

http://www.egroups.com/group/gata/243.html?


Reg Howe on the Cambior catastrophe and
a very GATA-like way out of it.

http://www.egroups.com/group/gata/244.html?

OROYellin' of troy#1582710/07/99; 23:45:23

Wellcome to our discussion.

There is an issue to be thought through in the soiled paper we use for exchanging goods and services. History, as FOA and ANOTHER have shown, repeatedly shows that a concept can not replace the reality, only represent it. Your acceptance of $ in electronic or paper form as payment for your work is doubtless a function of your expectation to be able to purchase someone else's production or service. You see in a $ a representation of your work, but not its embodiment. The embodiment of your work would easilly be found in your refrigerator, your seat and the room you are in.
If I were to print up new thallers you would not be interested in them at all, you might take them because they are so much prettier that printed $ are. If these were reciepts for say a gallon of 92 octane gasoline, redeemable on demand at a local gas station, wouldn't you take them as payment for your goods and work? If you had full confidence in my ability to supply value (gasoline) you would take it any day.
As a bank would do, I could print up more gas thallers than I ever intend to cover by purchase of gasoline, knowing that people will trade them rather than redeem them all. Yet if people knew that that was what I was doing, they would readilly discount the thallers relative to gasoline at hand.
Taking this one step further, I could make the issue of further gas thallers solely on condition of their return with interest. At first, there would be a boom in thaller creation as people need not trade anything but their good name in return for them, and they would trade at some significant discount to gasoline since it would be obvious to all that I have printed more than there will ever be gasoline. Later, however, as loans come due, the thallers would have to be returned, and more thallers than were issued would need to be returned, particularly if I raised the interest rate upon each loan rollover. And one day I would just say that gasoline would not be an acceptable replacement for thallers. This would create the necessary demand to have them trade at a premium to gasoline after some time. Or at least so the thinking goes.
In reality, I would be faced with a bank run as people rush to pick up gasoline in return for my discounted notes as I start to rev up the lending. I would then be faced with the need to supply gasoline. Where would I get a sufficient supply if I had issued so many more notes than the gasoline on hand? Answer - I won't. I will call up my friendly government and tell them that the whole economic system will fail if they force me to put my gas where my printing is. The distraght government would then declare that the notes are no longer redeemable for gas, but they now have the full faith and credit of the government to back them, and the government now takes upon itself the control of further issuance of thallers by ORO and other gas bankers. And if you don't trust us, we have the blessing of the Academy of Motion Pictures, MGM, Bill Gates, Gregory Peck, The Beatles and even the local Rabbi and priest, and printed their representation on the note, see "in celebrities we trust". And just in case you don't, you will surely trust the gun at your back if you don't accept this at the going rate.
Through the coordination of all the bankers (now they can just be called bankers because their actions no longer have anything to do with gas), I and the government can assure demand and supply of thallers, and prevent their redemption in any particular item. A sufficient number of people is in debt, and at least a minimal demand would be there. If I am not too greedy in printing the thallers up, and only print them up as debt, then the demand will always be sufficient.
This has happened many times in history and in many places.
The thing to remember is that banking (the second oldest profession and just as repurtable as the first) is an unnecessary deciet that can be restructured to avoid these situations by not allowing anyone to issue more obligations than can be redeemed at the date of the note. "On demand" was where the lie was hidden, and should have included in it the disclamer "if we have it" in big letters.

So, in order to create value in any concept money, you need it to have gone through a step in which it was actually redeemable in something, when it was a representation. The maintenance of value is through artificial demand of debt or taxation. If these are missing, there would be no value whatsoever. If people did not take loans or just went bankrupt, there would be no further demand for a concept currency. See Ludwig Von Mises for the fine study and analysis of the history and reality of money.

As the process of elimination of $ denominated debt around the world continues, whether naturally, or through force of EU and Japanese policy, you will see how the $ erodes. This decade of fun in America is a direct result of a policy intended to put the US in a debt trap. We are all in it. Face it.

elevator guygidsek Msg ID #15817#1582810/08/99; 00:06:07

Thank you for your response! One of my family members had posed the question, imitating my foppish mannerisms.

We can all learn from our mistakes, and need not be enshrined in our ignorance. I'm thankful for a forum where all feel welcome to ask questions of the more experienced, without fear of belittlement.

This is truly a forest of gracious giants.

ETBB - y2k#1582910/08/99; 00:11:42

Hey BB - I just returned from a trip to Michigan. The hardwoods are looking great and it is getting very crisp at night. I've spent the last few hours catching up and watching the ball game. I did run across Mike Hyatt's piece at World Net Daily and it's worth the read. As far as I can tell, the y2k situation is a done deal - baked in the cake - so to speak. Not much point in spending a great deal of time reading the latest opinion as the opinion hasn't changed in months now. A bunch of systems aren't going to come close to making the deadline and that's about it. As to what effect this is all going to have on the overall economy is still open to question but I'm still of the opinion it will be devastating. Of course we may not notice it much if the ongoing deflation picks up speed. I find it interesting that this monetary change is occuring at precisely the same time as the countdown to the rollover. I don't think it is any coincidence. The fear of illiquid markets come the end of the year because of y2k is likely precipitating the current move into hard assets. I think the realization is setting in amongst the big players that the 'lender of last resort' does not in fact actually exist and it's going to be every man for himself in the 'new' monetary system. It seems to me that y2k is just the trigger that is setting into motion the situation that A/FOA/Aragorn/ORO/Mozel and others have laid out. My thanks to all of them for the time they've spent filling us in.

Y2k is and will be the ultimate confidence killer. There still seems to be time to prepare both financially and personally but as the events of the last couple of weeks have shown, the exits are closing rapidly. Hope this finds you prepared partner.

ET

TownCrierMining Cos. Burned by Price Surge#1583010/08/99; 00:38:37

http://www.washingtonpost.com/wp-srv/aponline/19991007/aponline170146_000.htm

A billion-dollar irony...

"I think clearly there will be a large number of companies whose hedge books are underwater."

Simply MeThe Peasant's View from the Edge of the Village#1583110/08/99; 02:26:05

FOA to SteveH..Msg ID #15797..."With this crowd getting much larger it increases the chance we won't miss anything."

Thank you, again, Sir FOA, for showing me a way to contribute to this fine forum. Admittedly, the language of high finance and economics is a foreign tongue to me. (Thank you all for helping me to learn.) So, ordinarily, I'm silent. However, I can report on trends I'm seeing from the street level on a daily basis. And what I see makes me sad.
Joe Six-Pack hasn't the slightest idea of what's going on with gold/currency/markets. They walk in the door of coin shops every day to sell their gold and silver with only the foggiest notion of what it's worth. The last they heard, gold was at twenty year lows and it's not an investment that performs, so get rid of it. I know of only TWO people in this past MONTH who've been converting every dollar they could get their hands on into physical PMs. And it's no use talking to them; their minds are made up, one way or the other, before they walk in the door.

And to my surprise, the coin and bullion dealers of a size that I think should know better, are spouting the same "drivvel" as the media gold bears! If I bring up gold shorts..they bring up central bank sales. If I bring up the Euro...they bring up the Fed and look at me as though
I'm delusional. They're not stupid people, which leads me to two possibilities. Either they're not hooked up with the internet and are being fed this garbage by larger bullion dealers who are looking to pull some of that cheap "street level" gold up the pipeline.
(Sorry, MK...present company excepted from this tirade.
You are FAR above the folks I'm referring to, in both moral and business stature.)
OR...they DO know better and are lying through their teeth in the hopes of hooking themselves into the aforementioned pipeline. The latter being the most likely case.

To put it another way: This peasant from the edge of the village is seeing "gold" wolves come out of the woods to scavenge fallen Gold Eagles (they're weakened and easy game) in the streets. Though the tingling chill of Fall has barely touched our pleasant valley; it must be bleak and barren winter in the deep woods these wolves haunt, for them to come so close to town. Keep watch from the castle towers!
And tell the other villagers to guard their flocks well. If you only hold a piece of paper that says you are owed a "Golden Eagle", better claim it before the wolves do. There are bigger, smarter wolves in the deepest woods...and the worse the winter gets, the smaller the prey they will settle for.

At the risk of mixing metaphors: to paraphrase wise old Ben Franklin, "A golden bird in the hand is worth TWO in the paper bush."

Believe in holding only physical Gold?...I sure do!
Thanks All,
Simply Me

OROEarthquake#1583210/08/99; 04:06:26

Taiwan suffered an earthquake recently. As a result of the earthquake, such large high tech companies as Intel, HP, AMD, Apple etc. have announced delays in shipments and diminished earnings in the near future due to the shutting down of their supply chain. At this point I found the last piece of the puzzle of the illusion of a new economy projected from the thin LCD screen overlaying the decrepit bulk of the old economy, now doing worse than ever.
The great productivity increase of the last years is discussed in the Economist of 24th July 1999, "Work in progress" and there, the new economy skeptic economics Nobel laureate Robert Solow, is quoted "you can see the computer age everywhere these days except in the productivity statistics."
Indeed the sentiment is repeated in the work of Robert Gordon at Northwestern University, who is quoted : "the productivity performance of the manufacturing sector of the United States economy since 1995 has been abysmal rather than admirable. Not only has productivity growth in non-durable manufacturing decelerated in 1995-99 compared to 1972-95, but productivity growth in durable manufacturing stripped of computers has decelerated even more."
As I have argued before, the rise in apparent productivity is predominantly a result of imports of manufactured components and finished products. These are finished, assembled, marketed and retailed at a markup significantly greater than their cost upon entering the country. Thus Chen/Woods theory rises to the fore with the technology sector as well.
The key is the massive transfer of the bulk of high tech component manufacturing off shore, to Korea, Malaysia, Singapore, Taiwan, and elsewhere. Open up your PC, and check the components. You will find very quickly that the components are not made in the US. Yet the markup on these components through their made to order assembly at Gateway, Compaq and Dell is tremendously larger than the ocmponents themselves. I had my current computer assembled in a garage of a local computer whiz, who took the components and assembled them for a flat fee. The difference in costs for me was 30% not including software. Including the fact that I could keep some components of my previous machine and all the files and software, lowered the price paid by 60%. The computer assembler does not have access to bulk pricing, but he will soon enough. In that case, his savings for me would have come to 75%.
Thus the computer industry's 17% productivity growth and its contribution of 39% of the US economy's growth is simply another manifestation of the Chen Woods paradigm. It is simply that imports raise GDP per capita more so than do exports or local manufacturing. It is part of the gearing of the US towards imports. It is no more a new economy than any of the other new economies of the past. It is "fabless" chip foundaries, furniture makers without woodworking equipment, energy companies without energy production capacity.
This is the economy of Rome of the Ceasars. It is the economy of plunder. Our New Rome is as healthy as that of old. As we mortgage 125% of our future and bid for internet companies at 2500% of the net present value of their future income (if it ever shows up), we loose the last of manufacturing capacity and replace it with computers telling us where the plunder is on its' route to our house.
The Barbarians of finance are massed outside New Rome's borders, ready to cut the supplies from the provinces as they cut through our remaining $ forces. Soon the "high value added" operations will find that they are the product of insane-nomics. They have no more value than the manufacturers of the components in Korea or the Phillipines. As Old Rome grew insane on lead laced water, we in New Rome have grown insane on a foreign debt laced stream of money.

Note: An important number.
Weighting our imports on a Purchasing Power Parity bassis from where they come, our "actual" annual trade deficit can be estimated as almost $700 Billion if not greater, rather than the $250 billion everyone is sweating about. This contributes a large chunk of our merchandise economy.

PH in LAAnother View: "Through the Lens of the Golden Sextant"#1583310/08/99; 04:26:46

http://www.goldensextant.com/commentary.html#anchor743240

"...if the Cambior and Ashanti examples are at all representative of current gold banking practices in general, the over-the-counter gold derivatives market is almost certainly in far more parlous (perilous?) condition than all but a very few imagined; and (4) by extension, all paper gold must now be deemed suspect...

...were I directing Cambior's affairs, I would have my lawyers hard at work. ...an international bullion bank dealing with a relatively small gold mining company owes it a fiduciary duty of full disclosure of all material facts relating to a proposed loan transaction and associated hedging. Does it (not) then follow that the bank, if it had any knowledge thereof, must disclose any facts relating to the manipulation of the gold market by itself or others? My lawyers would probably tell me that the arguments could be made, but that it would be hard to prove knowledge of manipulation. Smiling like the Cheshire cat, I would then suggest they talk to Bill Murphy at GATA. And... I would get ready to take off the gloves." REGINALD HOWE at the Gold Sextant. (Reginald Howe is a lawyer who has argued cases involving constitutional monetary issues in courtrooms including the US Supreme Court.)

FOA/Another have been so far out in front of the curve since their appearance in late 1996 that it is truly scary. So scary, in fact, that they have been properly villified and ridiculed for uttering the unthinkable. We have noted many examples in the past, but as events unfold, and "we watch this new gold market together" the coincidences between what they have postulated and what transpires keep accumulating. One of the latest trends towards fulfillment of their predictions can surely be seen above, at the Golden Sextant. Has FOA repeatedly stressed that the gold derivatives market is in "perilous condition"? And hasn't he said that lawyers for the bullion banks, the miners and investors will be fighting for years over whatever is left after "all paper gold (has been) deemed suspect"?

The signs are everywhere. These guys really do know what they are talking about!

PH in LAEarthquake#1583410/08/99; 04:41:43

ORO: Fantastic post!

Lynden LaRouche, who calls himself a trained professional economist has been making somewhat the same point for years. What you point to (with impressive documentation) as the sickness in American manufacturing he calls a turning away from the "American economic model built on innovation in the machine tool sector". Too bad he has been so drastically discredited that the very mention of his name brings forth epithets as "far-out thinking in the fringes of sanity..." etc.

Watch out! It can be dangerous out there, ahead of the curve.

SteveHDec. gold now $321.50#1583510/08/99; 05:00:57

www.kitco.com

Interesting. Only problem is that the premium may be high now, Nor'wester believes the premium will drop. IMO, the premium may drop but the price will rise, and as the expression goes, "better a year early than a day late."

My buddy the coin dealer keeps talking about a rise in premiums. He is selling silver eagles at $11.00, but Silver maple leafs cheaper, but he says Canadians are raising their premiums as well. Could it be that the premium is owing to silver shortages and not press shortages?

Date: Fri Oct 08 1999 01:22
Nor'wester (themine. . . .concerning Silver Eagles. . . .) ID#335196:
Copyright © 1999 Nor'wester/Kitco Inc. All rights reserved

When the U.S. Mint announced about a month ago that they were going to cutback production in October and stop production by mid-November, premiums JUMPED from $1.38 over spot to $2.85 and now as high as Spot + $3.25 ( dealer to dealer ) .....Your local dealer may have taken the attitude we did -- why sell his customers overpriced Silver products which are likely to be much cheaper in January?...As it is now, it would take a $3.00+ rise in silver prices for a buyer to "break even" on his costs....By mid-January, there should again be quite a bit of Silver Eagle products on the market again -- at logical price levels!

ss of nepGOLDGAL - - - MsgID# 15737#1583610/08/99; 05:34:48

I hope you don't mide my having copied your post
from Kitco to other day.
IMO, you know the most I have seen about FN.

SteveHDec gold now...#1583710/08/99; 06:46:17

http://www.kitcomm.com/comments/gold/1999q4/1999_10/991008.084606.gollumeee.htm

$320

Job report steady (see above).

TomcatThe silver street premium#1583810/08/99; 07:25:43

IMO, the rise in the silver premium is partially due to "street demand" rather than investor demand. It is the result of a less sophisticated buyer. Ask any "street coin dealer" about the difference between silver buyers and gold buyers.

I used to be a silver street buyer. It never once dawned on me to buy gold. Why?

Because I came from the streets, that's why?

Now, if that answer doesn't make sense to you it's because you weren't raised in the streets. When a street person looks at gold he doesn't see what you see. He sees something like a diamond. Something he can't have. It's not a conscious thing. It is something beyond his grasp; even if he has money.

Yes, even if he has the money! Many won't believe this but it is true. There are many people who have considerable wealth who live in run down neighborhoods and still live the street life. Why don't they move to a nicer location? It never enters their mind.

To a street person, gold and the suburbs are for those other folks who you'd rather not think about because to do so is going to cause you to feel a pain in your soul that you neither understand nor want to experience.

Being in business for yourself is not part of a workers paradigm. Making an honest living is not part of a thief's paradigm. And owning gold is not part of the street paradigm.

Despite the fact that I broke away from the street; despite the fact that I got more degrees than anyone needs; despite the fact that I became a business owner with plenty of money; despite the fact that I hob-nobbed with the very wealthy; despite all this, it took me years to break the street paradigm and own gold.

The silver street premium is rising because the silver street demand is rising. Something is changing on the streets. Any ideas as to what it migh be?

LeighTomcat#1583910/08/99; 07:37:35

Dear Tomcat: That's where Farfel's and Golden Truth's messages about EDUCATING people come in. It would never have occurred to me to buy gold either, before I began reading about Y2K. I kept hearing advice to "buy gold, buy gold," and I had no idea of what that meant or how to go about it. One day I had an opportunity to buy a basic book on gold buying, and within a couple of hours it not only seemed a possibility, but a necessity.

The message needs to get out! We need to be talking up gold to our friends, neighbors, co-workers (in a discreet way - don't want them showing up for loans later on!). Give gold and silver coins to people as gifts. I recently bought a bunch of silver Eagles for my kids' allowances (when they're older), thank-you gifts, and so on. Buy up a bunch of copies of MK's book on gold buying and send them to people.

We've been blessed on this Forum to have the counsel of Another and FOA to guide us through troublesome times ahead. We ought to repay the favor by passing the word along.

DiewarzuWarning: DROOY's hedge-lite program could spell T-R-O-U-B-L-E#1584010/08/99; 07:41:26

Comment from John Hathaway of Tocqueville Asset: "...even those companies that will soon be proudly proclaiming their "HEDGE-LITE" position stand to be shocked at the degree of risk they have undertaken. Officers and directors should understand the potential for shareholder suits from investors who bought shares as a play on higher gold prices..."

My comment: DROOY is 25%+ hedged (looks to me like they have nearly 1 million oz hedged at LOWER than market prices over the next year and a half!!!...sheesh) through both June 2000 AND June 2001. Will DROOY end up suffocating their profits as well and end up having their stock price TRASHED to a lesser degree than Ashanti? I don't mean to be overly pessimistic, but after having been personally burned on ASL in a big way just thought I might pass this info along so everyone can see the actual numbers (please repost as seems useful). Check out their official table of hedging under quarterly reports: " http://drd.co.za/". I have tried to recreate the
table for ease of reference as follows:

Through 06-30-99...based on approx 700,000 oz annual production:

Year Ending---Type of Contract---Oz of Gold---Price per Oz
----------------------------------------------------------
06-30-2000----Forward Sales------280,000------$299.30
--------------Forward Sales-------20,000------$290.00
---------Accreting frwd sales----200,000------$316.87
--------------Call Options--------79,200-----$303.10

06-30-2001----Forward Sales------244,000------$322.03
--------------Forward Sales-------11,000------$297.25
---------Accreting frwd sales----200,000------$316.87
--------------Call Options-------106,100------$319.50

06-30-2002----Forward Sales-------78,000------$335.21
--------------Forward Sales--------7,000------$304.65
---------Accreting frwd sales-----50,000------$316.87

06-30-2003----Forward Sales-------48,000------$410.00
and onwards---Forward Sales-------12,000------$316.20

FOAComment#1584110/08/99; 07:55:38

http://www.fiendbear.com/guestpg1.htm

PH,
Have waited for the day when I could lean back and read these events in the words of others. We are all riding a new "bullish investment trend line" called "understanding"! It's great to see so many at this forum (and others) cutting through the fog and seeing a new world of "gold bullion".
Not just the trader world of paper profits.

Look at this new item: "The Debacle in the Gold Market" and it's link above. Here are a few pieces of it:

-----History has shown us that this type of activity always ends in a disaster of sorts for theplayers and indeed for most market participants. ---------

---We have stated before that in some ways there were two markets, one running on the back of the other. ------

----What was being created here was the mother of all debacles, simply because the paper market was deemed to be real, when, in fact it was as illusory ----------------

---------All the players in this paper market are at risk, and in fact were at risk the moment the made their first foray into it. The extent and ramifications of that risk will become clear over the next several months but it carries far greater implications than most commentators are awareof. ----------

-----Currently most aspects of the gold market (one notable exception being ownership to physical metal purchased prior to this latest rise in price) including gold stocks are at best a pool of very muddied waters and will remain so until this artificial paper gold market ceases to exist and we are some time away from that event. --------------


PH, ORO, ALL:

This along with all the other "finds" here tell us we are well into a "changing of the tide".

FOA

TomcatLiegh#1584210/08/99; 08:04:10

Great idea. With Thanksgiving and Xmas coming up and Y2k right on their coat-tails, gold will make a very appropriate gift. Your point about education is also well taken. MK's book on gold woudl also be a good gift.
TownCrierSept. Unemployment Rate Unchanged at 4.2%, the Lowest in Nearly Three Decades#1584310/08/99; 08:10:12

http://biz.yahoo.com/apf/991008/economy_4.html

Average hourly earnings grew by 0.5 percent (to $13.37), exceeding the 0.2 percent increase for the previous month.
LeighTomcat#1584410/08/99; 08:10:59

Thanks, Tomcat. Most of us used to be sheeple, and we have a duty to help pull other sheeple out of the pit before it's too late!
TownCrierSteps BOJ Policy Board may debate on Wed#1584510/08/99; 08:20:11

http://biz.yahoo.com/rf/991008/by.html

The Japanese government is pressuring the Bank of Japan to print more money with the stated objective to keep long-term interest rates from rising. Is it just me, or does this defie logic? Shouldn't so much extra cash put more pressure on interest rates such as we see in various latin american countries?
FOAComments#1584610/08/99; 08:32:54

TownCrier (10/07/99; 19:15:20MDT - Msg ID:15804)
After the Close: the GOLDEN VIEW from The Tower
"ECB's Duisenberg rules out EU gold-selling agency."

Town,
You can bet they are well into creating a Euroland based gold market expressley denominated in Euros. The day will come that even MK will check the price of gold in Euros first before a sale is made. Believe it!


ALSO:

Leigh,
Good point about helping others learn. Most Americans have grown up with a Western viewpoint. They have little background of the true reasons for gold. Their knowledge comes from stock broker reasoning that sees the entire gold market as the 70s thru today. It will be a costly
mistake. You are right, MKs book would help many, if only they knew it was "out there". I thing the changing gold market (bullion way up as ALL gold paper falls behind) will make people curious. Even flierdude (10/07/99; 19:31:37MDT - Msg ID:15806) would benifit from a call to
MK.

Thanks FOA

FOAReply#1584710/08/99; 08:37:15

Al Fulchino (10/07/99; 20:11:46MDT - Msg ID:15811)
FOA? What does this ounce in my hand buy if....? Forgive my intrusion, but just what does this $30,000/oz. of gold purchase?-------

AL,
Intrusion is the reason this forum exists. (smile)
The old concepts of "one ounce buys a suit" was never honest. It just so happened that during that timeline of "relatively" free markets the value worked that way. Today, gold's value in no way comes even close to reflecting all the technological advancements that have impacted our buying power. Yes, in currency terms a suit is priced well, but our buying power was robbed from currency inflation. Here is where the years of money "overproduction" have taken their toll. Because of manufacturing advances the cost of goods
should have been far less than today. In reverse terms, if the true dollar inflation was evident, a suit would cost several thousand. This is how we can see gold in the many thousands even before dollar price inflation impacts it's price. We will live to see gold gain value in "very real terms" against every form of wealth. Gains that will become evident well in advance of the dollar price inflation that is to come. Holding physical gold today is a "real value" asset, far in excess of what the current trading
proclaims it to be. You have but to walk this trail a little further to witness "nature in full bloom".

Thanks FOA

FOAReply#1584810/08/99; 08:47:06

ORO (10/07/99; 22:31:54MDT - Msg ID:15823)
FOA the new Monetary order
Has there been any thinking in this regard?

ORO,
It's not as cut and dry as your post displays it. Yourself and Michael have just recently embarked us into the complicated world of "money management politics". I can take us very deep with this but fear we will all come up dry with "understanding". With so much happening now with the changing perceptions of the gold markets, I want to stay current in this area. Post your excellent works as you will, I read every thing sent to me. Yet, I hold back for now. Thank you so much for all you offer as your writings are the best wine before and after dinner. FOA

TownCrierGovernment Reports Two Y2K Failures #1584910/08/99; 08:51:06

http://www.washingtonpost.com/wp-srv/aponline/19991004/aponline192529_000.htm

Small but real glitches that reared their ugly head and were fixed after the malfuntion. Simple annecdotal evidence that Y2K is potentially more than unwarranted "hype."
FOA(No Subject)#1585010/08/99; 08:56:14

PH in LA (10/08/99; 04:41:43MDT - Msg ID:15834)
Earthquake

PH,
HA!! Very good, I love it:
"far-out thinking in the fringes of sanity..."

I'll be back a little later. FOA

USAGOLDToday's Gold Market Report: "Gold looks like winner...under a number of different scenarios," says financial guru#1585110/08/99; 09:02:01

MARKET REPORT (10/8/99): Day Ten of the Big Breakout....Gold rebounds nicely in
New York after a rough night overseas........Gold lease rates consolidate at 4% level, then
head back up..................FWN says in its pre-opening report that it expected gold to
trade down $4 to $4.5.....instead it surprisingly moves up $1.80 in the early going--
another example of the market's extreme volatitility and uncertainty. FWN also reports that
the consensus opinion among traders is that we are going to $330 soon..........September
payrolls unexpectedly come in down 8000 jobs (instead of the predicted 218,000
gain)...................Reuters Alden Bentley writes: "The world gold industry is anticipating
huge losses after the long-depressed metal's recent price jump but it will take time to sift
through the damaged balance sheets of bullion bears to see if the worst fears are borne
out."..............One dealer is quoted as saying: "Everybody is talking about people getting
hurt in this market. I think there have been people that have probably gotten hurt, like
people who have credit exposure (to these gold customers). But nothing is crystallized yet
so nobody really knows what the damage is going to be.''.......................Please see
"Gold mart awaits industry fallout from price surge" for a detailed account of what's going
on behind the scenes in the gold market -- a situation described in the article as a "melee".
...............This articles offers some good reasons why traders have been aggressively
buying the dips for the past three days.....................Republic New York Corp. is being
sued by a shareholders who charges "the U.S. bank failed to disclose its brokerage's
dealings" with Princeton Economics' Martin Armstrong who is accused of a massive
securities fraud. The suit also claims that Republic is misrepresenting the liability exposure
that might arise from the case......................."Gold looks like being a winner under a
number of different scenarios for the world economy, including the bursting of the financial
bubble in the United States, according to Dr Marc Faber, markets guru and author of the
Gloom, Boom and Doom report.".............. So starts an article this article that makes for
interesting reading at AFR headlined "Gold shines through global
gloom"....................... Says Dr. Faber: "If there is a bust, the Americans will do what
they have done when there has been a problem in the past and that is let the dollar depreciate
by printing money."........... That's it for now, fellow goldmeisters. Have a good
weekend. This could be an interesting Friday............MK

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

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

TownCrierWallets likely will be loaded -- just in case for Y2K#1585210/08/99; 09:09:05

http://orlandosentinel.com/news/100399_y2kcash03_19.htm

A financial planner/stockbroker in Orlando, Randall Deane said, "I've talked to some who say they'll accumulate large amounts of cash and consider serious liquidations. But I've never talked to someone who has actually done it. Of course, it's a natural tendency for people to procrastinate about making big decisions."

However, recent surveys reveal a quarter of the population planning to stash away significant cash reserves. It seems the risks are high under such an altered state of affairs among the collective consumer psyche that the dollar could easly go the way of the peso, with price inflation wiping out the purchasing power of this stashed cash. For each dollar held as cash, it would be prudent to put ten or twenty others into gold.

goldnbonesHegding and Ashanti#1585310/08/99; 09:24:55

Good morning everyone. This morning I recieved an email from my broker (Canaccord), which discussed a conference call that Ashanti had held yesterday. They go into some detail discussing the hedges etc, but I have found it a little difficult to follow. I guess my understanding of how hedges work is way to simple. I have posted the relevent part of the email below and ask for any simple explanations you can give.

MESSAGE
Ashanti held a conference call last night to try to clarify its
position regarding the hedge book and margin calls. The result seemed
to give some further information, but still leaves many questions
unanswered. The major points from the call are summarised below.

* The company reached a standstill agreement with its counter-parties
on the hedge book;

There are apparently 17 counterparties to Ashanti's hedge book. The
standstill agreement means that these counterparties will not push for
payment of margin calls while the standstill is in place. The total
level of margin calls as at October 6, with gold at US$325/oz., was
US$250 million. This is considerably higher than we had estimated
yesterday and shows the liquidity problem facing Ashanti.

Mark Keatley, Ashanti's CFO, would not give an exact period for the
standstill agreement, but when asked whether it was days, weeks or
months he replied that "it is not days or months". This seems to
suggest several weeks, possibly to around the end of November?

In answer to a question, Mr. Keatley also stated that so long as the
standstill agreement is in place, there is no problem with possibly
breaking any covenants relating to the revolving credit facility. It
was also pointed out that 75% of the hedge book counter-parties were
also involved in the revolving credit facilities, and these
counter-parties would not want to see anything done to reduce
Ashanti's operational viability.

* The 'replacement cost' of Ashanti's hedge book has risen to US$572
million;

On Tuesday, Ashanti stated that the replacement cost of the hedge book
was US$450M with gold at US$317.50/oz. Yesterday, the company stated
that the replacement cost was US$572 million with gold at US$325/oz.

This suggests that a considerable level of gearing to the gold price
remains, despite the restructuring over the past few days. The total
net hedge book covers 10 million ounces of gold. A move of US$7.50/oz.
on 10 million ounces would give US$75 million-but the replacement cost
moved by US$122 million, suggesting gearing of approximately 1.5 times.
However, in further questions, it seemed that if gold ran to US$350/oz.
the replacement cost would be around US$800 million, which implies no
gearing (US$25/oz. on 10 million ounces equals US$250 million, added
to US$572 million replacement cost today equals US$822 million).

* The replacement cost is not a cash loss;

Mark Keatley stressed that the replacement cost of the hedge book is
not a cash loss, as it has not been crystallised. With the average
price of the hedge contracts at US$375/oz., Ashanti's intention is to
deliver physical gold into these contracts as it is produced.

The problem is one of liquidity-but now that a standstill agreement is
in place Ashanti has a breathing space which will allow it to arrange
a more permanent solution. The company is now valuing the hedge book
on a daily (possibly even hourly?) basis, helped by a team of
analysts, supplied by the counter-parties, that have built a highly
detailed model of the complete hedge position.

Mr. Keatley admitted that in 'stress tests' that Ashanti had
previously conducted on its hedge book, it had looked at a 'worst case'
scenario of a rise of US$50/oz. in the gold price over a "longer time"
Mr. Keatley did not define the time frame, but we would not be
surprised if it had been a month). The company was taken completely
by surprise, and had no time to react, when gold rose US$75/oz. in
just four days.

* The balance sheet remains okay for normal business;

Mark Keatley stated, in answer to a question that there had not been
much change in the balance sheet since the end of June, that it is
okay for normal business. Gross debt now stood at just over US$500
million (long-term borrowings were US$489 million in June), while net
debt was around US$440 million, implying cash on hand of just under
US$60 million (cash was US$109 million in June). The swing of around
US$70 million is accounted for by spending on capital projects, such
as Geita. For normal business purposes, therefore, Ashanti's balance
sheet is fine-but it cannot stand margin calls of US$250 million or
more.

* The value of the operations hasi with the higher gold price;

Mark Keatley stated that Ashanti has modelled the value of future cash
flows from its operations. Using a discount rate of 6%, the value of
these cash flows with spot gold at US$255/oz. (the level a couple of
weeks ago) was US$1.3 billion; with spot gold at US$325/oz. the value
has risen to US$2.5 billion. This is consistent with the gearing
effect on Ashanti's margins, as its cash costs are around US$215/oz.
giving a margin of US$40/oz. at US$255/oz. gold and US$110/oz. at
US$325/oz gold. Allowing for the higher revenues received from the
gold that is hedged, the discounted value has approximately doubled.

* The company has been in discussions with Lonmin for several months;

The company apparently began discussions with Lonmin regarding a
possible merger as long ago as October 1998. The current crisis has
accelerated the talks. Ashanti also stated that the Ghanaian
government, which holds 20% of the company, would vote in favour of
such a merger.

Overall, the conference call gave some comfort (mainly from the news
of the standstill agreement), but reinforces the fact that Ashanti's
liquidity problems are significant and will get worse if the gold
price rises.

Nonetheless, as we pointed out on Tuesday, the overall value of the
company should be higher today than it was 2 weeks ago when the shares
were trading at US$6.00. The discussions with Lonmin are likely to
lead to a bid, and if this is seen as too low/opportunistic by the
likes of Barrick Gold, Anglogold, Gold Fields, Normandy, etc., there
could well be one or more competing bids. We therefore consider that
at the current level, around US$4.25, Ashanti Goldfields is
undervalued. However, with the immediate liquidity problems still
hanging over the company, we can only recommend a SPECULATIVE BUY.
END MESSAGE

ok, so you may or may not want to ignore the buy/sell advice at the end, the message does come from a broker afterall!!!!!

TownCrierY2K: Think Global, Stay Local#1585410/08/99; 09:37:20

http://www.intellectualcapital.com/issues/issue308/item6731.asp

Official warnings about what will surely happen in their neighborhoods but not in ours.
Yeah, right. Do yourself a favor...'cause no one else is standing in line to help you.

OROFOA - New Monetary System#1585510/08/99; 10:06:21

Though a question of detail, I think the concept is flawed at its root. The structure itself is still as dangerous as any paper structure. The mispricing of gold as a result of the arbitrary decision to use it as money backing for an inflated currency with heavy interest in strength, has way too much economic damage and dislocation built into it.
Is it better than the current system? Yes, that's easy. But it will have its' own quirky ways to make sure the distortion is obvious.

I understand you don't think we can get far discussing this at this stage, as things are so much in the air.

Thanks again. You allways open my eyes to something new.

Simply MeGold Premiums#1585610/08/99; 10:32:59

Tomcat and SteveH: The high premiums also reflect the high volatility of the market. In effect, the bullion dealers are hedging their prices against sudden rises in the POG. The store inventory is kept at a steady or (hopefully) growing dollar amount. As gold is sold, you pick up the phone and order more to replace it, locking in the "buy" price as close as possible to the "sell". Profits are very slim to begin with. If every time you pick up the phone to order, your dollars buy less and less inventory, your bullion business is going down the tubes.

Also, you may be porportionally right about the sentiments of "the man on the street" and gold ownership. And I'm sure, the meaner the streets, the less gold you would find there.
But you also might be surprised at the level of gold trade in lower-middle to middle class America. The farmers, the factory workers, the small business owner, and the retail salesperson....folks with a little income to put back, but not enough to play the stocks. Unfortunately, many of them are also not very knowledgeable about markets in general and have few other resources to fall back on...so when a financial set-back hits, they sell the gold first.

The gold coming out from under the mattresses these days is indicator that the economy is getting worse from the bottom up. No matter what the DOW says.

PH in LAOn The Street#1585710/08/99; 10:51:08

Al Fulchino:
I was thinking about your question (10/07/99; 20:11:46MDT - Msg ID:15811) "What will a $30,000-ounce buy if...?" before arising this morning, and even though I would never hope to add much to FOA's answer (FOA -10/08/99; 08:37:15MDT - Msg ID:15847), please let me try to put an idea or two out there. This is a very fundamental question for all who hold gold (and even more for those who don't) and well worth considering even now.

We have already seen a tremendous and long-awaited initial wake-up call to our journey "on the road". POG literally exploded out of the blocks in a paroxysm that has caught the gold world's professionals flat-footed. From mine executives to bullion bank board rooms, many are suffering from "sticker-shock" and "reality-shock", as they reel in disbelief. At the same time, what has the greatest professional of them all, the great, all-knowing helmsman, A Greenspan seen fit to do to control the situation? Why, just this week he shifted to a "tightening bias", while refusing as "too radical?" the widely expected take-back of his final 1/4% interest rate reduction (one of three) that he had applied back when the international financial system was on the verge of collapse in the wake of LTCM. The world's financial system verges on collapse and interest rates go up .75% on the street! How ponderous and resistent to change the street economy can be! Gold explodes $75 in a few days and AG shifts to a "tightening bias".

Getting back to suits:

In Shakespeare's time, a suit of gentlemen's clothes was a marvelous thing. "The clothes make the man" they used to say. And rightly so. That suit was a hand-made creation, a masterpiece crafted from fabrics imported from far places (at great expense) by a master craftsman who labored over a considerable time to bring his creation into being. It was nothing to be taken lightly... and it wasn't! Not just anyone could afford one! You had to "deserve" such a thing. An ounce of gold was just about right.

Today, it is no longer the "clothes that make the man". No! Especially here in California, and all across America... "We are what we drive" we are told by Madison Avenue. Yes, the car we drive is now considered an expression of who we are. The American dream... The symbol of our personal freedom. And a marvelous creation it is! "Crafted from materials imported from far places (at great expense)", it is the result of the efforts of not just one, but many craftsmen, from the design engineer, to the factory worker, many of whom can't even afford to live in America and so are conscripted in every far corner of the world; it is a masterpiece. $30,000 is not considered too much to pay for such a thing. Not just anyone can afford one. You have to "deserve" such a thing. No, the clothes no longer "make the man". "We are what we drive!" And an ounce of gold ought to be just about right.

Getting back to the ponderous street economy:

Those who foresee gold rising to $30,000/oz have warned that the US dollar will have to fall drastically in value. But the artificial nature of the dollar, built as it is, mostly on confidence, means that most of its value adjustment will have to take place on the street, where the confidence is held. Even as the populous has no hint of the explosion in gold that has already occurred (let alone that which comes), they will be "way behind the curve" with respect to their confidence in the dollar. Sure, goods imported from abroad will become immediately more expensive. Like, for example, oil. Oil has more than doubled lately yet there is virtually no sign of that on the street. Oh wait! That's right! I almost forgot! Gasoline went up over $.20/gallon for a while, there. On the street. (It's almost back to normal, now.) Maybe some of the things made abroad will be made here again. And maybe some corporate CEOs will have to forego their profit-sharing bonuses. Future generations will call this "a time of historical change".

And that's how much of this will play out. The dollar will adjust rapidly on the currency markets. Governments will drag their feet to keep the brakes on (currency controls, taxation, new laws... etc.) and things will change on the street. Slowly! Hopefully (from the governings' point of view) so slowly that hardly anyone even notices. "Too bad we doesn't haf enny of thet gold, Mabel," Billy Joe Sixpack will say over dinner. "Yeah! Fry mah hide!" Mabel will answer. "But mebbe we'll win th' lottery this hyar week. Shet mah mouth! How's yer dinner?" "Fine." Billy Joe will say.

And maybe Alan Greenspan will raise interest rates another 1/4%, too. Out here, on the street!

Hill Billy MitchellWe the street people#1585810/08/99; 10:58:20

Tomcat:

re: Something is changing on the streets. Any ideas as to what it might be?

We the "street people are not telling. You'll have to rub shoulders with us again to find out. (smile) only kidding

PH in LA"No-Name" Horse#1585910/08/99; 11:05:19

What's with the "Horse with no Name" today? Lease rates at 75% in the near month. Has anyone called his trainer this morning? Maybe he is about to escape. Was his stable door left open?
AELPH: LaRouche#1586010/08/99; 11:06:31

"Too bad he has been so drastically discredited that the very mention of his name brings forth epithets as "far-out thinking in the fringes of sanity..." etc."

I agreee, it IS too bad. LaRouche -- if you really get down and read his stuff -- is a major intellectual force to contend with. But LaRouche really has only himself to blame for that "fringe/kook" perception. He can write the most outstanding, scholarly and incisive article (on whatever)... and then completely trash his own credibility by making some clearly ridiculous point, and hammering on it; e.g. such as that Alan Greenspan is certifiably, clinically insane. (Yes, he actually said that!) It is embarassing that a man of his intellect and erudition would sabotage himself in this way. Ah, well. I still enjoy reading his stuff. It is a treasure-trove of clear thinking and historical understanding and provocative ideas... if you can ignore those occasional(kooky/psycho) outbursts. :)

Hill Billy Mitchellflierdude # 15806#1586110/08/99; 11:37:09

Your reasons for liking silver are worthy. IMO you are out of balance though. You should have less in silver and more in gold, physical that is.

What is your reason for having 55% of your holdings in paper. Seems a little risky. Why not move your gold stocks into physical and keep your calls.

You would greatly reduce the risk of paper destruction and put your gold into a better balance with your silver without having to reduce your physical holdings.

FarfelThe Complete Text of Randy Andy Smith's Comments about GOLD#1586210/08/99; 11:58:41

I am always amazed at how the mainstream media censors news items. Fortunately, I obtained a complete text of Mr. Smith's latest piece of propaganda and thought I would share it with USA Gold's visitors:

MITSUI ANALYST RANDY ANDY SMITH SAYS GOLD "WALL" WILL FALL DESPITE RECENT RALLY OR "I WILL HAVE TO SELL EVERYTHING I OWN AT A SWAP MEET, GODDAMMIT TO HELL!."
London--Oct 7--The recent euphoria in the gold market cannot mask the
underlying erosion of gold's role in official reserve portfolio management,
according to a presentation prepared for the Nikkei Gold Conference by Randy Andy
Smith, renowned anti-gold storyteller at Mitsui Bussan Commodities.

Mr. Smith, relying heavily upon anecdotal evidence provided by his senior advisor, Marty "Cook the Books" Armstrong, shocked his Japanese audience with the virulence of his anti-gold statements, not to mention the gross stupidity of his various maleducated pronouncements.

The paper, titled "The Fall of the Golden Wall or These Blasted Golden Showers are Raining on My Parade", argues the philosophy behind holding gold, is doomed, like Marty Armstrong's whiny plea of innocence, to collapse "under the weight of its own contradictions."

"Let me assure you there will be even more negative news concering gold in the future," Randy Andy declared, "And I expect to provide you timely reports since Marty will be allowed visitors at his prison facility between 1:00 and 3:00 P.M. once a week...and I intend to be there, taking notes!!" ( Story .13436 ) :-)

TomcatWhy hasn't the POG risen faster as of late?#1586310/08/99; 12:06:20

In USGOLD's report today he quoted someone saying: "Everybody is talking about people getting hurt in this market. I think there have been people that have probably gotten hurt, like people who have credit exposure (to these gold customers). But nothing is crystallized yet so nobody really knows what the damage is going to be."

...so nobody really knows what the damage is going to be."

My take is that the bullion banks, the mines, and the hedge funds know very well what the damage is. They live with these numbers by the minute. This is arithmetic; not advanced calculus. These folks don't want to let out the truth! They're stalling.

The damage could be very deep and spread very far amongst many mining firms, bullion banks, and hedge funds. If the truth were let out and understood by the investment community then we might see many stock prices fall and the POG rise rapidly.

If 5,000 tons of gold have been sold short or forward then we still have 5000 tons of facts to be laid at the alter of truth.

If one holds physical gold, then you have tons of facts, about to be revealed, on your side. Every day more and more bits of truth (pieces of the puzzle) will come out. Soon the puzzle/picture of losses will be clear to all and the POG will rise accordingly.

Then, it will take even more time for a particular truth to sink in; that there is just not enough gold to fill the needs of the shorts. The price will then continue to rise as more and more see that their isn't enough gold to go around.

If all investors saw this immediately then the POG would rise immediately. But, but the revelation of facts and truth is a much slower process because it takes time for people to believe an "unbelievable" story that they about about to hear.

If you remember, it took many of us a long time to put the picture together. And we had time and many great teachers! Many investors don't have all the help we have had so it will take them more time. But as sure as the sun rises they will see the truth and the truth will drive the POG toward the stars.

PH in LALaRouche#1586410/08/99; 12:07:55

AEL:
Agree completely, except that the "kooky outbursts" are even more kooky when seen out of context. I remember the "certifiably insane" passage and seen from the point LaRouche was making at the time, it was almost valid. PS. He doesn't like A.Gore at all, either. Is he "talking his book" and seeing him as a rival? You know he does consider himself a presidential candidate. Another case of being way too far out in front of the curve? For a while his economic vision seemed very close to Another's. Hasn't had much to say lately, though. Probably afraid in light of his presidential fantasies. Almost believable, too, his version of how and why he was framed. What a shame!

OROLaRouche#1586510/08/99; 12:08:03

The guy is simply a hot head and he lets his anger get ahead of him.
Until a couple of months ago I only saw him on a couple of TV shows where he had some controvercial things to say, but the words got lost in an outburst. So he just behaved like a crackpot. Today, after reading 2 or 3 articles on education and banking, I came to the conclusion that the guy is not a crank and I should look at more of his stuff. Besides, his information gathering team seems very effective.

DDORO/Earthquake#1586610/08/99; 12:10:47

ORO - I think this post may be one of your most powerful. It's oh so true. I'm going to turn more than a little philosophical for just a moment. Please bare with me. I started and owned a manufacturing company for over 20 years. We had over 200 employees, most of them highly skilled. We were a leader in our industry in technology, quality and customer satisfaction before these terms became popular. At one point in my career I was sort'a rich, at least on paper (sounds like a lot'a people I know today). I hired a president and semi-retired. He ran the company into the dirt with me asleep at the switch. We lost millions. I came back into day-to-day management to attempt to save a company with a significat negative net worth. It wasn't pretty. We held off the banks that wanted to forclose and rallied our customers, suppliers and people. We were back to profitability within 10 months. Knowledgable people called it a small maracle. Over 3 years, we paid back everything we owed with interest. That's the good news. The bad news? we weren't able to invest in upgrades to the plant in a capitol intensive business. However, through the dedication and energy of our people, we were still able to build complex products to higher quality standards than most of our competitors. With the restructuring of the Aerospace Industry (our customers) in the late 1980s, it became a battle of the balance sheets as programs were cut and work dwindled. I closed the doors in 1990, losing everything both personally and professionally. So, what's the purpose of this sad story? I believe we've missed the boat big time on productivity because we've looked almost exclusively at technology as its source. We've forgotton about PEOPLE! Work, for the most part, is more like a prison sentence for most people than an experience of growth, contribution and adventure. In our chase for the almighty dollar, quarterly earnings and stock price, we've lost an important piece of ourselves, our humanity. This loss has translated into difficult to measure reductions in energy, creativity, responsibility and caring in the people who do the real WORK. People ARE business and they ARE the businesses in which they work. Technology, without well trained, motivated people may actually reduce productivity. OK, now for the point of this ramble. The main reason we're in this Y2k tar baby is that "leaders" have focused on the same short term factors that caused them to discount people as important to productivity. A potential wake up call is coming on 00. Nearly every Y2k contingency plan has many manual (people) elements. Are these people trained for manual workarounds? Do they care? Will they do whatever it takes to keep things going? All this for organizations that have shown little regard for their personal well being? I doubt it. People's alienation in the workplace maybe a show stopper in holding the fort and putting the peices back together when our globally interconnected systems of systems fails in the next year. A friend called me last night to inquire as to if I would be on a forum to address a large group on Y2k. I said no. I've been on a number of these things and nothing comes of them (except I piss off the establishment with hard questions). He asked if I would advise the moderator what questions to ask the panel or any advice I would give? I said sure. There's only one question that has any relevance now. ARE YOU PREPARED?? The advice? GET PREPARED!! Just like the gold bears, time is very short in this end game, too. Keep up the great work all. Best, DD
Twice DiscipledDD#1586710/08/99; 12:21:38

Amen! I will cut and paste your post on my cubicle wall.
DDFOA - Just a thought#1586810/08/99; 12:30:39

FOA- I felt compelled to say something to you. There's something powerful in your posts. They seem to serve as reminders of the bigger picture. We, at least I, need that. It easy to get caught up in daily "noise". Thank you for all you do. Best, DD
YGMDD#1586910/08/99; 12:32:23

Yours was a powerful message from a view w/ experience. I sincerely hope the Gold upswing will bring back some of those lost riches. Regards to you & thanks for your warning.--YGM
ORODD#1587010/08/99; 12:34:24

Aug 1971
Laffer comes out of the oval office, having discussed with Nixon the closure of the gold window, and Nixon's mind was made up, is heard to say "The conection between effort and reward has been severed".

TownCrierheadline: Will Roaring 2000s jazz up Dow to 41,000?#1587110/08/99; 12:45:39

http://biz.yahoo.com/rf/991008/n3.html

This fantasy-land scenario is what is currently being priced into the market. Brokers have been sold the story that the baby boomers will be passing through their most productive years over the next decade and it is their economic influence that will drive up the DOW. The often overlooked downside to this same fantasy is that it would be followed by a bear market lasting over a decade.

If the dollar were devalued against all things by only 75% (to begin to adjust for the current trade deficit and overhang of dollars in foreign accounts), then the DOW would be priced at over 40,000 today. Or for that matter, they could tweak the formula a bit and make the DOW index whatever number they choose...be it 10 or 10 million. That doesn't exactly help you pay the rent, though, does it?

Real people will come back to their senses and see the value in real things when the purchasing power of the dollar begins to fall against real goods. Real money for real people to meet their real purchasing and savings needs...Got gold?

AELlarouche#1587210/08/99; 13:06:28

Right, ORO, he is NOT simply a crank; a very complex guy, nothing simple about him. Here are a few relevant URLs, for your reading pleasure:

LaRouche on Post-Collapse Reconstruction & Global Development
http://www.larouchepub.com/lar_oberwesel_2631.html

Lyndon LaRouche: Christian Humanist Intellectual, Philosopher, Economist
http://www.larouchepub.com

Against Oligarchy (Webster Tarpley, Christian Humanist; LaRouche compadre)
http://www.tarpley.net/

Readings from The American Almanac (Christian Humanism; LaRouche et al)
http://members.tripod.com/~american_almanac/

The Schiller Institute in Denmark
http://inet.uni-c.dk/~sch-inst/

Yellin' of troyORO -- money#1587310/08/99; 14:15:47

Ned Block once criticised Julian Jaynes for making an ele-
mentary use/mention error, confusing the concept of consci-
ousness with consciousness itself. Daniel Dennett replied
that some phenomena and institutions are so dependent upon a
concept that you can't have one without the other; e.g., you
can't have baseball without the concept of baseball. And
you can't have money without the concept of money. All full
fledged money *is* "concept money." True, there is a cont-
inuum from no-money (a pure barter economy) to full fledged
money, running through popular, widely acceptable items, and
you also need to develop the ideas of multi-party deals and
asynchronous deals. Money and the concept of it develop
gradually. But once they are here, the value of money comes
in large part from the concept; the value of particular mo-
ney comes largely from the fact that it *is* money. This is
just as true of gold as of dollars: Gold is as valuable as
it is because, while it is not at present actually currency,
it is intrinsically *good* money, suitable for use as money,
and hence retains a value as secondary money and a potential
for restoration to primary status.

A reliable receipt/note for something valuable, like gold or
gasoline, has a derived value, and since paper is much more
suitable as money than something heavy or explosive, it can
serve as money, in effect combining the intrinsic usefulness
of gasoline and paper. But once it is money, it gets addi-
tional value from that use; and in fact actual, physical gas
will acquire *derived* value from the fact that it is used
(indirectly, through its paper representation) as money. If
the system of receipts is managed fraudulently, if the sup-
ply of paper-gas is (even openly) inflated, knowledge of the
fact will affect the value and perhaps even destroy the use
of paper-gas as money, if there are decent substitutes at
hand. But this is merely the fact that prices change with
changes in knowledge, or that the discovery of fraud is a
*big* change in knowledge. The inflated, or even easily-
inflatable paper-gas money isn't such *good* money as was
thought, and certainly isn't as scarce as was thought, or as
it used to be, so it loses value. This is an argument a-
gainst fraud or inflation; it is not an argument against
"concept money."

The receipt system is a good way to introduce a new form of
money, as you say, and historically it has been much abused,
as you say, and becomes worthless, *eventually*. But only
eventually. When the receipts cease to be receipts and turn
into mere paper, they do not on that account become worth-
less, because by then their value is in part their value as
money rather than their derived, physical-commodity value.
When the dollar was severed from gold, people did not stop
using dollars, and dollars did not become worthless. I'm
not arguing in favor of inflation or excusing governments
that renege on their obligations or defraud people. But my
point was that in figuring out how much a dollar is worth,
or should be, one has to realize that the value of a dollar
lies in the fact that it is a dollar, the standard American
money, rather than in the fact that it used to be redeemable
for gold, or that it no longer is.

Yellin' of troyORO -- money#1587410/08/99; 14:17:55

Ned Block once criticised Julian Jaynes for making an ele-
mentary use/mention error, confusing the concept of consci-
ousness with consciousness itself. Daniel Dennett replied
that some phenomena and institutions are so dependent upon a
concept that you can't have one without the other; e.g., you
can't have baseball without the concept of baseball. And
you can't have money without the concept of money. All full
fledged money *is* "concept money." True, there is a cont-
inuum from no-money (a pure barter economy) to full fledged
money, running through popular, widely acceptable items, and
you also need to develop the ideas of multi-party deals and
asynchronous deals. Money and the concept of it develop
gradually. But once they are here, the value of money comes
in large part from the concept; the value of particular mo-
ney comes largely from the fact that it *is* money. This is
just as true of gold as of dollars: Gold is as valuable as
it is because, while it is not at present actually currency,
it is intrinsically *good* money, suitable for use as money,
and hence retains a value as secondary money and a potential
for restoration to primary status.

A reliable receipt/note for something valuable, like gold or
gasoline, has a derived value, and since paper is much more
suitable as money than something heavy or explosive, it can
serve as money, in effect combining the intrinsic usefulness
of gasoline and paper. But once it is money, it gets addi-
tional value from that use; and in fact actual, physical gas
will acquire *derived* value from the fact that it is used
(indirectly, through its paper representation) as money. If
the system of receipts is managed fraudulently, if the sup-
ply of paper-gas is (even openly) inflated, knowledge of the
fact will affect the value and perhaps even destroy the use
of paper-gas as money, if there are decent substitutes at
hand. But this is merely the fact that prices change with
changes in knowledge, or that the discovery of fraud is a
*big* change in knowledge. The inflated, or even easily-
inflatable paper-gas money isn't such *good* money as was
thought, and certainly isn't as scarce as was thought, or as
it used to be, so it loses value. This is an argument a-
gainst fraud or inflation; it is not an argument against
"concept money."

The receipt system is a good way to introduce a new form of
money, as you say, and historically it has been much abused,
as you say, and becomes worthless, *eventually*. But only
eventually. When the receipts

Yellin' of troyORO -- money#1587510/08/99; 14:17:57

Ned Block once criticised Julian Jaynes for making an ele-
mentary use/mention error, confusing the concept of consci-
ousness with consciousness itself. Daniel Dennett replied
that some phenomena and institutions are so dependent upon a
concept that you can't have one without the other; e.g., you
can't have baseball without the concept of baseball. And
you can't have money without the concept of money. All full
fledged money *is* "concept money." True, there is a cont-
inuum from no-money (a pure barter economy) to full fledged
money, running through popular, widely acceptable items, and
you also need to develop the ideas of multi-party deals and
asynchronous deals. Money and the concept of it develop
gradually. But once they are here, the value of money comes
in large part from the concept; the value of particular mo-
ney comes largely from the fact that it *is* money. This is
just as true of gold as of dollars: Gold is as valuable as
it is because, while it is not at present actually currency,
it is intrinsically *good* money, suitable for use as money,
and hence retains a value as secondary money and a potential
for restoration to primary status.

A reliable receipt/note for something valuable, like gold or
gasoline, has a derived value, and since paper is much more
suitable as money than something heavy or explosive, it can
serve as money, in effect combining the intrinsic usefulness
of gasoline and paper. But once it is money, it gets addi-
tional value from that use; and in fact actual, physical gas
will acquire *derived* value from the fact that it is used
(indirectly, through its paper representation) as money. If
the system of receipts is managed fraudulently, if the sup-
ply of paper-gas is (even openly) inflated, knowledge of the
fact will affect the value and perhaps even destroy the use
of paper-gas as money, if there are decent substitutes at
hand. But this is merely the fact that prices change with
changes in knowledge, or that the discovery of fraud is a
*big* change in knowledge. The inflated, or even easily-
inflatable paper-gas money isn't such *good* money as was
thought, and certainly isn't as scarce as was thought, or as
it used to be, so it loses value. This is an argument a-
gainst fraud or inflation; it is not an argument against
"concept money."

The receipt system is a good way to introduce a new form of
money, as you say, and historically it has been much abused,
as you say, and becomes worthless, *eventually*. But only
eventually. When the receipts

Yellin' of troyoops#1587610/08/99; 14:20:52

Sorry for the double post -- I went back to erase my pass-
word, for security, and hit the post button by accident.

DDORO/Laffer#1587710/08/99; 14:23:24

ORO - I think Laffer probably said it as well as any of us. Makes one wonder about the definations of "work" and "productivity". I'm particularly facinated by zero sum games. If I make a mint driving the price of gold down while the miners and LDCs losing their shirts, is that productive? The "good o'l boys" would say sure. It's a free market and if the miners can't compete, the market will weed them out. Tough luck. I'm not sure exactly how a miner and his family compete with GS big shots who never factor in the misery caused to others in their never ending quest for more. However, I think what goes around comes around, many times in ways that seem worlds apart and mostly invisible. Karma? I don't know, but something like that. Best, DD
JourneymanORO, Yellin' -- MONEY#1587810/08/99; 14:49:27

Lord John Maynard Keynes, archetect of "Keynsian Economics," explains just how badly he thinks paper (or megabyte) currency, whether marks, yen, dollars --- or even "thallers" can "safely" be abused: "It is evident that so long as the public use money at all, the Government can continue to raise resources by inflation. Moreover, the conveniences of using money in daily life are so great that the public is prepared, rather than forego them, to pay the inflationary tax, provided it is not raised to a prohibitive level . . . Recent experience everywhere seems to show that it is possible to inflate 100% every three months without entirely killing the use of money in retail transactions, but that a greater rate of inflation than this can only be indulged in at the peril of total collapse." He's WAY too conservative -- evidence in a later post. Regards, Journeyman
TownCrierY2K to be chronic but not acute - key expert#1587910/08/99; 15:12:06

http://biz.yahoo.com/rf/991008/s6.html

Bruce McConnell, director of the International Y2K Cooperation Center suggested "Y2K-caused effects on daily life will be complex and more chronic than acute." He further predicted, "a growing slowdown in commerce as capacity is reduced by a confluence of degraded infrastructure performance and shaky consumer confidence. Performance degradation, potentially exacerbated by non-Y2K factors, may cascade from one infrastructure to another."

When confidence is low, fiat money suffers because it is built on confidence and very little else. Gold is the only money on earth that will be immune, and will actually thrive in an atmoshere of shaken confidences. Get real. Get gold. Get going.

CoBra(too)After all those great posts of today ...#1588010/08/99; 15:22:40

Including some very wise "newbies", I'm at a loss to go into any other discussions, be it the Austrian School of economics - which never happened, because the guys have run off to Washington -at a time when they've conceived the old continent toast - and toast it was.

I would only like to stress - and stress is where the shorts are now - that PoG is in the eye of the hurricane. The real devastion is to be expected after the lull. As a BIS official stated some time ago, this coming gold (bull) market won't take any prisoners.
Amen CB2

foxfox#1588110/08/99; 15:27:35

http://news.24.com/English/Business/Companies/ENG_152129_709007_SEO.asp

Drooy and his hedging position
phaedruswords of wisdom#1588210/08/99; 15:34:22

"Stocks have reached a high and permanent plateau."

-Irving Fisher, noted Yale economist, 1929

Montana HikerAnd that's the truth#1588310/08/99; 15:45:03

http://www.usagold.com/cpmforum/tools/post.html

Hi guys, here's another first poster. Many times when my 6 kids were little, they would give me a subject and I would develop a story. The other day while hiking with my lovely wife this story appeared.
In the beginning God created the universe. In his creation he wanted many beautiful things,thus the Gold Bug was created. In time creatures followed by humans occupied the earth. The Gold Bug had a very special placed with the humans and was considered very beautiful with it's radiant glow. Humans greatly desired to possess this earth's treasure.
In time, humans decided to create their own Gold Bug but it turned out to be a Green Bug. But it also became very desirable to possess. The humans found that they could feed the Green Bug and it excrete beautiful green stools that were sweet smelling and very valuable to own. The more they feed the Bug the bigger it grew and also more abundant were the green stools. The stools allowed humans to buy anything they desired
Meantime, the Gold Bug was ignored and felt lonely. Gradual he became smaller and lost his glowing luster. However, there came a time when the Gold Bug started to regain the feeling that he was important and desirable and thus his luster was restored.
At the same time the Green Bug began to take on a slight brown color which was not noticed by his owners. Then one day a human noticed that the sweet smelling excetement had a foul smell to it not unlike the droppings of four legger animanls, however since the stool was valuable he didn't tell anyone. And that's how the bull sh-t got into the banks and monetary system. And that's the truth!

Gandalf the WhiteWelcome MT Hiker#1588410/08/99; 15:58:53

The Hobbits love stories !! This looks as if you may fit right in with the other story tellers.
Attention PeterA -- Monday will be another one on the markets! -- My crystal ball is painted BLUE!!
Come on in you Lurkers, the TableRound has lots of chairs.
AND finally, I hereby nominate the Goldfly song "16 Tons" for inclusion into his music room in the HoF! Seconds onlyone?
<;-)

Gandalf the WhiteDumb Ol'e Wiz#1588510/08/99; 16:00:34

That should end -- "Seconds ANYone ?"
<;-)

beestingOpening statement of Rep. Ron Paul on Russian money laundering.#1588610/08/99; 16:33:19

http://www.house.gov/paul/committeework/bankingtrans/99 9 22.htm

2nd for Gandalf's nomination of Goldfly's version of 16 tonnes!

On Sept.28th my PC developed a case of," euphoric Golden overload" and crashed, this is my first post since,hope it works.

Click above for full news release:
When Allan Meltzer,head of the (U S)Congressional Commission on the IMF, asked recently weather the use of IMF funds could be traced,Joint Economics Staffer Chris Frenze replied that someone,"would have to be rather an incompetent criminal to cunduct their affairs in such a way that it could not be traced." We cannot justify taxpayer money going to an organization(I.M.F.)with such a lack of accountability.

The end of the IMF???....Bank of New York is also mentioned in article.......Go Go Gold.....beesting

beestingTry this URL on previous message#1588710/08/99; 16:42:18

http:www.house.gov/paul/committeework/bankingtrans/99_9_22.htm

Good news release by Congressman Ron Paul of Texas...beesting
beestingSSHHEEEEEESHH!!#1588810/08/99; 16:48:06

http://www.house.gov/paul/committeework/bankingtrans/99_9_22.htm

SORRY!!
Al FulchinoFOA/jinx/and PH in LA#1588910/08/99; 16:52:53

Thanks to all for your comments and words to ponder. I see that I would be very happy to have a "STORE OF WEALTH". And that should be our primary goal. How many times have we seen elderly people in Russia who cannot pay their bills, or we remember when COLA's had to be instituted in the 70's to prevent inflation from eating up too much of the elderly's or the poor's benefits.

However, because of the way gold etc has been beaten down, I do believe that we also stand to gain new wealth beyond what the nornal "STORE OF WEALTH" would be. SO for the "ride" I do go. Warily! I also believe that a ROAD TO $30,000 is foaming with peril for those on the train and off the train, for those OFF the train may be throwing rocks up as we pass them by. I will just assume from all II have learned here, that any gold worth $30,000 will not buy me a $30k vehicle <current dollars> but it will still purchase a much better vehicle than what $325 <todays current dollars also> buys. MUCH BETTER!

Thanks to all for your comments.

TomcatCobra(too), TC, Journeyman, DD, AEL, PH, Simply Me, Diewarzu, FOA, ORO, Al,#1589010/08/99; 16:53:55

Yellin Cobra(too): Eye of the hurricane it is! For the shorter that is.

TC: If McConnell is right then we're headed for some really rough times.

Journeyman: You can see why some bankers just love ole John Maynard.

DD: Very touching communication. I hope you know that in the future all zero sum games will be outlawed. Thus, gold will have to go to the black market. ;).

Yellin' of troy: Bankers and criminals have proven that is possible to only have one, but not both, at the same time of conscience and consciousness. If they were conscious and aware of what they were doing they could not have a conscience. If the had a conscience the would have to eliminate the consciousness to block out what they were doing.

AEL and PH: I believe La Rouche is claiming that the CBs and the PTB are literally making a transfer of gold from the people to themselves. In the seventies he exposed the drug trade of governments. He was later proven correct. He People thought he was nuts and he was thrown in jail on, what I understand, were trumped up charges.

Simply Me: I agree with your insights about the middle class and gold. I think my comments about the street were a bit extreme and I did not want to give the impression that all folks from the street are like that.

PH in LA: Great analogy with a the suite and the modern day auto. BTW, are you a professional writer?

Al Fulchino: Thanks for getting that discussion going on what $30K will buy.

FOA: If the general public understood what you wrote about the purchasing power of gold we would be at $30,000 in no time at all.

Diewarzu: Thanks for posting the info on DROOY. Hedge-lite. Great euphimism. Too bad it will only cover up the truth for a little while.

ORO: That earthquake post was something else. There is a parallel with what you said about productivity and what Batra is saying in is recent book. Somehow this nation has convinced itself that its productivity has gone through the roof. It will be an unpleasant surprise for many when they find out its actually crashing through the floor. When you use the word plunder it really woke me up to the truth of our parasitic exploitation of good folks on this planet doing the real work and creating the real wealth on this planet.

mx6764DROOY only hedges 7% of 3 year production#1589110/08/99; 17:12:58

Excluding Australian gold production, DROOY hedges 25% gold production for 3 years. If taking into account of the purchases of Hargraves etc. and call options, DROOY hedges less than 10% of production. An expert in South African gold stock said in an interview that DROOY only hedges 7% of gold production.
RossLDurban Roodeport Deep (DROOY) hedge-lite#1589210/08/99; 17:20:35

We will see... The hedge-lite statement has the familiar ring of the Ashanti Goldfields statement just before the truth came out. However, DRD does have something like 80 million ounces reserves in the South African soil that will keep their stock attractive. My gut feeling is that they now are an even higher leverage play. They may under perform the un-hedged gold stocks until POG gets to $450 or $500 and then they may outperform the crowd. Anyone making investment decisions based on my gut instincts deserves what they get !
PH in LAReply#1589310/08/99; 17:23:40

Tomcat: No! Not exactly, but thanks for asking.
AELirving fisher and etc.#1589410/08/99; 17:34:20

phaedrus (10/08/99; 15:34:22MDT - Msg ID:15882)
words of wisdom
"Stocks have reached a high and permanent plateau."
-Irving Fisher, noted Yale economist, 1929

..... hahaha! Right! We'll all keep that in mind, Irving.
For an array of goodies like that one, see the new section on my Golden Bear page:

http://www.provide.net/~aelewis/gold/goldbear.htm#BlastsPast

Generally, you might want to check out my (newly-refreshed/updated) Golden Bear page -- as irreverent and sassy as ever... something to offend everyone:

http://www.provide.net/~aelewis/gold/goldbear.htm

K GoldenThe Federal Reserve#1589510/08/99; 17:42:28

Greetings and Help! I am under the impression that the following is incorrect, but anyone with knowledge who is willing to comment and post corrections on the details of the following post (by a former Federal reserve employee)
are appreciated, as I am new at this. (thank you!)

The Federal Reserve was chartered in 1913 by an act of the U.S. Congress in order to replace J.P. Morgan as the lender of last resort for the U.S. economy. It set up shop in 1914 and is "owned" by its member banks in the U.S. (not all U.S. banks are members) who are required to keep a minimum percentage of their reserves on account with the Fed. The reserves usually take the form of U.S. government bonds, but there are other assets like U.S. and foreign currency and gold which are acceptable as reserves as well.

The reserves are the primary means through which the Fed "makes" money. No the Fed does not print money. This is done through the Treasury department which works VERY closely with the Fed and causes it to be "quasi-governmental". For example, I had to have an FBI background check to work there, my fingerprints are on file as a result, etc.

The Fed makes money in two different ways and for two different purposes. The first way for it to make money is by using the reserves of its member banks without having to pay interest on the reserves. That's right, it's like an interest-free loan to the Fed by you, or me, or anybody who is a depositer at a bank which is charted through the Fed. The Fed can use the reserves as collateral to purchase or in exchange for government bonds or foreign currency. Whatever money the Fed makes while making these trades goes to cover their operating expenses (except for the check-clearing they do in NY which I think still pays for itself). Typically, there are several million dollars left over every year, and the remainder is paid to the Treasury and "reduces" the government debt.

What happens when the Fed buys and sells these assets? Well, this is the other way that the Fed "makes" money. Because our banking system is based on fractional reserves (and no this is not inherently evil), when the Fed buys government bonds on the open market, it injects cash into the banking system. This either allows the economy to grow at the same price levels or leads to inflation depending upon how much they buy and how much the banks loan out. Selling bonds has the opposite effect.

Why do we have government bonds? Because the federal government for years has run deficits which means they have to borrow money so that they can run the bureaucracy which oppresses the people, pays the military, and hands out the entitlements. Every 10 or so weeks the Treasury has an auction and the big banks and bond brokers line up to see which of their clients want to lend how much to Uncle Sam in exchange for those interest payments. It's actually pretty easy to do this directly through the Treasury now, although you have no influence on the interest rate you get.

Now, to your question. Where does the interest on the government debt go? Well, since the Fed owns some government bonds, they get some of the interest, but not much. Many foreign countries own government bonds, and they like to get paid. Many pension funds (perhaps yours) own the bonds and receive interest payments. And of course the banks still hold them, just like they hold your mortgage. You pay your mortgage, the taxpayers pay the interest and everyone is happy, right?

Well, the Fed is supposed to be able to set interest rates, but they cannot do this in a vacuum. They have to respond to market forces as we all do. Whatever they do to interest rates can have an effect on inflation. They're not quite as powerful as some would have you believe.

What do we get for all the money the Fed makes? Well, we are supposed to get a lender of last resort which will prevent another Great Depression from happening. Wait, didn't the Fed exist then too? Yes, and they unfortunately made matters worse because they didn't understand the economy very well. Personally, I think they made a HUGE mistake in bailing out LTCM. They have contributed more to the current stock bubble than most people realize. When the bubble bursts, it will be ugly, and some of the ugliness can be laid at Greenspan's feet. He learned the wrong lesson from 1987.

Trader_vicThe Second Shoe to drop is being hidden from the public!#1589610/08/99; 18:14:00

Isn't it strange that NO ONE has talked about the BANKS that are going to be effected by the fallout in defaults from the bullion dealers and defaulting mining companies....As I see it, we are going to start to see bailouts of major banks because of 1) their own hedge (derivative) book and 2) from those mining companies that are on margin call and could default to the toon of Billions of dollars!!! What do you think that that will do to THEIR balance sheets!!! I see the next disaster in the banking system to happen before the end of the year right in time for Y2K!...even though it won't come from a Y2K accident!!! If you watched the bank stocks today they traded as if nothing was wrong.......and the gold stocks got smashed, when in reality, it should, and will be, the other way around!!! IMHO, my suggestion to you is either get rid of your bank stocks that are involved in the mining sector or buy put options on the BKX (philadelphia Bank Index)to protect your position... When the story comes out, it has to create a panic in the banking sector....
PH in LATypo!! Reader Beware!#1589710/08/99; 18:17:30

Beestings quotation from Rep. Ron Paul's remarks should read: "would have to be rather an incompetent criminal to conduct their affairs in such a way that it could be traced."
Note: "that it could be traced" instead of "NOT be traced".

RossLThe Federal Reserve#1589810/08/99; 18:17:54

The fractional reserve system is inherently unstable. Instability in systems (in general) are a exponential result of positive feedback.
LeighFarfel#1589910/08/99; 18:25:55

Dear Farfel: Thanks for the balanced news report of Andy Smith's remarks. I'm very glad you post here now - I like reading your stuff! Do you plan to visit Mr. Armstrong in prison? He might enjoy getting some company!
LeighTrader-vic/FOA#1590010/08/99; 18:34:54

This morning I was going through some papers and found FOA's post #13085 of September 8th. In it he said, "Y2K will be something to behold, but it will be a side-show when the modern gold market breaks!" That sentence has always stuck in my mind, and I've always assumed he meant approximately what you said, about banks failing. FOA, is that indeed what you meant?
JourneymanKEYNES WAS AN INFLATION WIMP!#1590110/08/99; 18:42:26

I mentioned in an earlier post that I'd provide evidence that Keynes was conservative in his estimate of "only" 100% inflation every three months -- or perhaps Brazillian & Russian policy makers simply aren't familiar with the man. More examples later. "Inflation last year [1992] was 1,202% in Russia and 1,038% in Brazil." -CNN Factoid, 20 Aug. 1993 - The Russian government is re-valuing the ruble. They're going to knock two zeros off the paper ruble. Starting next year, for example, 50,000 Ruble bills will read 500 rubles. This is merely a psychological move, says an expert in Russian investing. -CNBC Inside Opinion, 25 Aug 1997, ~12:26:30 PM EST - Russians try to pull their savings out of the Russian banks. The ruble lost 5% of its value yesterday and 10% today. It has lost 41% of its value over the last week, and 83% of its value over the last year. -CNBC, 08-26-98, 9:08am EST Regards, Journeyman
JourneymanHelp!!#1590210/08/99; 18:47:05

Sorry, but I can't get any whitespace (empty lines) to separate my posts into paragraphs, etc. They all get run together, which is even confusing to me. For example, when I sent this, this line had two empty lines above & two below! Any suggestions?
YGMConversion To Euro Dollars.#1590310/08/99; 19:01:25

Would someone enlighten me as to whether or not one of the present 11 member Nations currencies would be better to hold for later (Jan?) conversion to the Euro? If so which one. Thanks--YGM.

**I'd just like to think I had a head start in the race coming
soon- IMHO.

GoldflyJourneyman#1590410/08/99; 19:04:37

What verion of your browser are you running?

Maybe you need to upgrade?

TownCrierAfter the Close: the GOLDEN VIEW from The Tower#1590510/08/99; 19:29:28

As they would say in Europe, "psychopaths" ruled the day on Wall Street, so we won't even go there...there's too much other news to be covered in its place anyway.

The People's Bank of China raised its price for selling gold today in accordance with the overseas price of gold. This is a recent (but ongoing now) operation under a pilot plan for the reform China's domestic gold market--with imports purchased through Hong Kong. This reform plan is surely unrelated to the recently opened BIS branch office in Hong Kong, wouldn't you agree?

Here are some interesting comments from a Merrill Lynch economist...excerpt taken from a Bridge report from Johannesburg today:
The Bank of England threw the trend and sent the gold price
plummeting when it announced it would sell its gold reserves to finance
debt relief for poorer countries.
It was put back on track when 15 European central banks, including
the Bank of England, announced a surprise five-year moratorium on all new
sales of gold held in official reserves. Gold rose to a high of US $338
per ounce.

[By the way, Greece announced today that they have no plans to change their policy on gold reserves--they were not a signatory to the moratorium because they were not invited to play along.]

"Is it a flash in the pan? No, not in the immediate future. As long
as commodities rise, gold will rise and we could see it up to $400 next
year," Jos Gerson, an economist with Merrill Lynch, told a seminar on the
economic outlook in Johannesburg today.
He said gold has always moved with, and sometimes led, commodities.
"Commodities are doing well because the world is waking up. Asia and
Europe are running again and the US is showing no sign of cooling. The
world is suddenly firing on all four pistons."

Gerson predicted, however, that the Dow Jones industrial average will
crack next year.
"This is the major problem we face next year. What we have is one of
the most classic bubbles of the century," he said, although he believes
there isn't the remotest chance of a 1930s type crisis.

[That's right, where deflation was the problem. Can you say INFLATION? I knew that you could.--TCrier]

Central banks have the ability to react to a crunch in ways that they
did not before.
He says it's difficult to predict the timing of a bubble bursting,
but believes it may happen before the middle of next year.
"When the Dow goes, all markets will correct," he says. "We must
expect a roller coaster ride, but ride the curve for the time being."
***
Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/
No further reproduction without written permission
---
Gold contracts were sold down today in some pre-holiday paper(profit)-taking action by those licking their chops over these recent and rapid gains...the December contract price losing $2.60. The spot market took notice, but lost only $2.30 to end with a $320.00 quote in NY.

The already high short-term gold lease rates rose today by over half a percent, demonstrating the continuing difficulty among bullion banks in striking a balance between those willing to lend gold and those engaged in desperation borrowing. Today's numbers:
1-month 4.4375% +0.5215
2-month 4.5313% +0.4193
3-month 5.1875% +0.0115
6-month 4.8938% -0.0422
12-mnth 4.5000% -0.3188

The Tower cautions everyone to the writing on the wall. Look at it this way...if a standard bank suddenly started offering you interest rates on cash savings accounts that were many multiples higher than the norm of only a few months ago, would you risk your cash for that investment return (not to mention the return of the principle, too), even as the exchange rate markets revealed your cash's value to be climbing on its own? That is to say, your net value increases without the risk of depositing it for lending to others. Such a high interest rate as an enticement should be seen as the warning sign that it is...that something is terribly amiss. An asset that will grow while in your own hand is worth much more than the promises of others to make it grow for you if you'd only be willing to let them try.

Russia apparantly agrees with this "bird in the hand" assessment of value, or else they are putting on a world-scale demonstration of Gresham's law. From Bridge we learn that the foreign exchange and gold reserves of the Central Bank of Russia as of Oct 1 totaled $11.212 billion. Looking closer at the breakdown of assets, the foreign exchange reserves ($6.634 billion) were dropped by $190 million, while the gold reserves were up $172 million ($4.579 billion). Spend the junk and hold the good stuff. It's that easy.

Once again, we'll let Bridge News walk us through the thoughts of traders.

NY Precious Metals Review: Dec gold down $2.6 on profit-taking
By Tina Petersen, Bridge News
Washington--Oct 8--COMEX Dec gold futures settled down $2.60 at
$321.70 per ounce on profit-taking amid choppy, range-bound trading.
Traders said the gold market also was pressured lower on a stronger stock
market and a firmer dollar versus the euro.
Traders and analysts said the precious metals markets are seeing
typical profit-taking ahead of the weekend. They said there is little new
news moving the markets. An analyst said the fact that the markets eased
off from their highs "gave everyone reason to take their profits before
the weekend."

Dec gold continues to range trade amid choppy conditions. Dec moved
lower at the opening to a low of $317.5 following overnight Chinese
selling, then moved up to a high of $326.5 in the mid-morning session on
fund buying. It then continued to drift lower throughout the afternoon
session on profit-taking.
Traders said the market saw good 2-way business.

"It continues to be stuck in a range of $315-330," said a trader.
"People are buying at the lower end and selling at the upper end. It seems
to have good support at the lows and resistance at the highs." He said
that "if Dec breaks higher, the shorts will cover and if it breaks lower,
the longs will sell off."
Traders said they continue to see support at the $315 level and
near-term resistance at $330.
Many said they viewed today's downward pressure as a consolidation
before the next move higher on continued short covering over the next
couple of weeks.

"There's still a lot of short covering left to be done," one trader said.
Traders and analysts said pressuring the market lower was the fact
that the unemployment rate remained unchanged. "It confirmed
that the Fed might have been right in leaving interest rates unchanged,"
said an analyst.
"It's good for the stock market and good for the dollar, but bad for
precious metals."
Dec silver continues to follow gold, but without the underlying
bullish fundamentals that gold has. Dec settled down 4.5 cents at $5.55
per ounce.

[there was this report also by Bridge:]

New York--Oct 8--The New York Mercantile Exchange said today it will
increase the margins on its gold futures contracts to $2,000 from $1,600 for
clearing members, members and hedgers; and to $2,700 from $2,160 for
speculators. The changes are effective as of the close of business Monday.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN
---
One month gold lease

The commitments of traders in COMEX gold futures was released today for postions as of Oct 5, 1999. (Changes given are from Sept 28)
Among the non-commercial traders with only long or short positions (no spreads), 20,646 new long postions were added for a total of 47,881. On the short side, only 2,881 short postions were closed, leaving 62,196 contracts held short among this same classification of traders.

Due to Monday's bank holiday (Columbus Day...can you believe anyone gets that off??) the COMEX delivery intentions notices were not available today.
The results of yesterday's trading gave us the following changes to open interest in these notable futures contracts.
Oct . . . . 110 . . dn . . 30 (as of yesterday, delivery intentions for Oct totaled 2,504 contracts)
Nov . . . . .12 . . dn . . 350
Dec . . 124,308 . . up . . 8626
ttl . . 217,896 . . up . . 13361

There was modest movement again today in the ScotiaMocatta vault, one of COMEX's two active gold depositories (Republic National Bank of New York being the other.) Nearly 1/8 tonne of gold was withdrawn from Scotia's guardianship...3,997 troy ounces, to be exact. Of that total, 2,187 ounces were taken from the Eligible stock (of which 86,404 oz remain), and 1,810 ounces were withdrawn from Registered stock (leaving 834,233 oz.)

As news made wider rounds today of the survey we reported yesterday showing that OPEC compliance with production cuts had slipped in September, yesterday's loss of 82c was extended today by another $1.55. The November crude contract closed at $20.90 by the time the dust cleared on a flurry of fund liquidations. Adding weakness to the price was comments by America's Chief Executive regarding the possibility of selling off some crude oil stored in the Strategic Petroleum Reserve to help keep oil prices from rising too much as the winter heating season arrives. (And to think that you thought only gold suffered these bouts of "official interference" in the marketplace!) One broker said of the prices, "Basically we got a little overdone and funds wanted to take some profits so right now we're at a nice medium compromise. But I think that in the long term, we will go back up."

Well, it all depends...on what the dollar will buy. Oil is oil. Gold is gold. A dollar is a concept wrapped in shifting confidence.

So, did the King chew bubble-gum on the plane yesterday, and was he "guilty" of passing love letters back and forth between the leaders of Iraq and the U.S? Well, we don't have any reports about the gum, but King Abdullah II of Jordan arrived in Washington and confirmed he had a message from Baghdad for Washington but refused to discuss the contents. Whatever the contents, the King assured that he would not be arguing Iraq's case in planned meetings with President and Secretary of State, that the message would have to speak for itself.
+
The message is reportedly from Saddam Hussein to Bill Clinton offering proposals to end sanctions against Baghdad, promising major political reform based on a multi-party system and respect for human rights, and providing help in advancing the Middle East peace process.
+
Those of us gathered in The Tower exchanged glances upon receiving this news, and drew the same conclusion...he saw the movie "Three Kings" and then recognized the error of his ways.
+
President Saddam has ruled Iraq for the latest 20 years in a 30 year reign of the Ba'ath Party. The London-based Al-Hayat newspaper reported that the Iraqi leadership was ready to begin political reforms, which would include adopting a new constitution based on a democratic multi-party system. Ever since the Gulf War Iraq has faced sanctions and two no-fly zones (one north and one south) which are reportedly intended to protect Iraq's Kurdish and Shi'ite Muslim populations. These groups attempted to rebel against the regime amidst the Gulf War and then suffered greatly at the hands of Baghdad. (If you see "Three Kings" you will have a better grasp on that affair.)
+
This latest offer by Baghdad to break the deadlock would seem to be a result of the UN sanctions taking their toll. Hah! What kind of "sanction" is an oil embargo that occurs under an oil-for-food program? The real sanction would be if they had to settle for our paper bills of credit in exchange for as much oil as they can pump. While the rest of OPEC is in agreement to limit production, Iraq says "Nuts to that!" It was no big surprise, then, earlier this week when the UN Security Council decided to increase the amount of oil Iraq can sell during the current 6-month phase of the deal. Still on track to become the 51st state. And if you find that hard to swallow, maybe a plastic CD case would help (a reference to the movie that will mean nothing until you see it.)

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

TownCrierK Golden...great name!#1590610/08/99; 19:41:02

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

A pair of eyes in The Tower gave your post a quick scan to the extent that time allowed at the moment (we'll give it a better read later,) and the first cut impression is that it is accurate. Believe It Or Not.

There are many new readers that may not have yet discovered the treasure trove of information available at The Gilded Opinion which can be accessed from the HomePage.

The link above is to one of the commentaries found within the Gilded Opinion wing of this Castle, and is recommended reading for anyone trying to gain a more complete understanding of the nature of modern money, where it comes from, and where it goes. A very enjoyable bit of reading if you have time for a light weekend project.

gidsekTrader Vic#1590710/08/99; 19:44:40

http://www.bog.frb.fed.us/releases/H41/Current/

glenn, on Kitco noticed the the Feds' holdings of gold certs has jumped markedly lately. Perhaps if certain banks are catching cold the Fed is relieving them of gold certs of dubious worth.

gidsek

JourneymanThanx Goldfly!#1590810/08/99; 19:51:08

I'm running an "off brand" browser called Arachne, coded by a Checzh fellow. It has it's faults, & I'm afraid you may have nailed the problem. I guess I should have asked if anyone else has to do anything special to get whitespace. No? Ah oh! Regards, Journeyman
JourneymanINFLATION FOR DUMMIES#1590910/08/99; 20:21:10

For any of you that don't know, the law of supply and demand applies to currency, and an increase in it's supply is what causes intentionally mis-named "inflation." "Currency depreciation" is a much more honest term. Anyway, in light of increasing supplies causing so-called "inflation," the following clip is particularly ironic. Clearly CNN doesn't understand what causes inflation. Jimmy Carter didn't know what caused inflation either. So don't completely rule out stupidity as a major cause of the world's intersting economic state. Brazil is exchanging its current currency for the "real" supposedly pegged one to the dollar. This is the biggest currency exchange in history and will take two weeks. Current Brazilian inflation is running at 50% per month. This will be the sixth new Brazilian currency in a decade, but nothing can seem to get the inflation under control. The shop keepers just seem to keep raising prices. Buyers are urged by the president to report any price increases to store inspectors in an effort to stop prices from increasing. -CNN HEADLINE NEWS, 07-04-94 12:40am EST Regards (and apologies for print density), Journeyman
Black BladeWhining little shorts!#1591010/08/99; 21:59:37

Interesting to read that the bankers, investment houses, etc. are now whining that people are being hurt because of the sudden rise in POG. Considering that many more in the mining industry and PM investors were hurt with the manipulated decline in POG, I feel no sympathy for them. "What goes around, comes around". I see families in this mining business every day who have suffered. I've seen those who put their faith in PM's. So let the sheeple and manipulators suffer now, because I don't really care what happens to them and their families. They brought this day of reckoning on themselves. The cap on POG is coming off, and the POG still has plenty of upside yet. Maybe I'm a little harsh, but "business is business" as the manipulators would say.
Black BladePH and Beesting#1591110/08/99; 22:06:10

I've followed Ron Paul for some time. It refreshing to acutally find an "honest" politician. Let's face it...most politicians are "crooked as a dog's hind leg" I find that it should be no coincidence then that he ran as the Libertarian presidential candidate a few years ago. Harry Browne who is another friend of Au, also ran as a Libertarian presidential candidate. Is there a Au relationship here? hmmm....
ETAREM#1591210/08/99; 22:24:44

Hey Arem - sorry about the tardy response. I was going to reply last weekend but ran out of time. Regarding Ron Paul and the Libertarian party; I used to follow the party activities quite closely but haven't done so much in the last several years. I think I've just gotten burned out on politics in general. It seems the libertarians will have to wait for the implosion before anyone pays any attention to them. It's remarkable to me that people are now running off to the Reform party as if their protectionist agenda hadn't been tried in the past. Wasn't that what went down during the last depression? People never learn, or maybe they only learn the hard way. At any rate, the libertarians have the right idea as far as I'm concerned but they'll never be a potent force until the money is taken out of government. As long as special interests have something to go after, they will. Maybe a return to sound money will dissolve much of the current focus on special interest politics as practiced around the world.

It is nice however to follow Ron Paul's quixotic journey through Washington's political sewer. He is definitely a one-of-a-kind. I wish I could vote for someone like him here in Kansas but we seem to be stuck with nothing but socialists disguised as Republicans. Voting here is a useless exercise. When some candidate actually stands up and claims a desire for sound money and free markets I might get excited again, but we seem to be going the other way at the moment. Thanks for your thoughts Arem.

ET

gidsekKitco Repost#1591310/08/99; 23:01:13

I posted this on another site but I'd like all of you to see it too, and the message at the top applies here as well.

nite all..

gidsek

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

Date: Sat Oct 09 1999 00:31
gidsek (From an Ashanti chat thread) ID#423377:
Copyright © 1999 gidsek/Kitco Inc. All rights reserved
Poor buggers didn't do their homework. It's very sad, and makes me appreciate you lot very much.

http://www.ragingbull.com/mboard/boards.cgi?board=ASL

------------------------------------------------------------------------
By: jackokomo
Reply To: None Monday, 28 Sep 1998 at 1:50 PM EDT
Post # of 36

Testing the water;

I just bought into Ashanti Goldfields today.

Why gold?---It's a no-brainer, really, when you think about Willie,
Wall street, Asia, etc.

Why Ashanti?---PE ratio is 16, book is $4.78, profit margin @10%,
float is only 9.80 million, shares out is 109 million.
AND the price is @8-1/2.

Asian's could be returning to their old habit ( pretty good )
of keeping gold at home. If I were living in ###an, I know for
sure that I wouldn't trust any bank!.

Come aboard, let's all have fun.

LOL---Jack

( Voluntary Disclosure: Position- long; ST Rating- strong buy; LT Rating- strong buy )
-------------------------------------------------------------------------By: reggiehammond
Reply To: None Tuesday, 5 Oct 1999 at 11:28 AM EDT
Post # of 36

Why is ASL going south today?
It has dropped 3 full points ( 33% ) since the open.

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy )
-----------------------------------------------------------------------
By: billou
Reply To: None Wednesday, 6 Oct 1999 at 3:12 PM EDT
Post # of 36

Trading halted!!!!I bought in 5 minutes before halt. I guess I just burned my money. Talk of bankrupt. Anyone know
the latest news?

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy
-------------------------------------------------------------------------
By: Realityman
Reply To: 24 by Handpicker Tuesday, 5 Oct 1999 at 2:16 PM EDT
Post # of 37

I read the news on Yahoo, and I can't make heads or tails out of it. What's it mean?!

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy
------------------------------------------------------------------------
By: workoutman
Reply To: None Tuesday, 5 Oct 1999 at 8:04 PM EDT
Post # of 36

Goldman Sachs biggest shortsellers of Gold in the world advising Ashanti! We're dirt!

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy
-----------------------------------------------------------------------

stay in school..

gidsek

JourneymanBLACK BLADE: Libertarians & Gold#1591410/09/99; 00:04:25

Is there a relationship between the Libertarian Party and gold? You better believe it. Highly regarded Austrian Economist Murray Rothbard ("For A New Liberty," etc.) was on the LP National Committee for years, and a strong Austrian hard money strain runs clear through the whole organization. Check out their platform! Regards, Journeyman
Peter AsherAll's Quiet on the Western Front#1591510/09/99; 01:02:10

Two weeks ago Sunday, just moments before the World entered the New Gold Paradigm, I received this message from Leigh. >>> Hey, Peter, have your guests gone home? Did you guys have fun? What did you talk about? Do they live far away? <<<<<

Well the First Assault Wave has taken the beachhead with only 20 points casualties after a firm entrenchment in the 315/320 strike zone. The battlefield is quiet for the moment.

In these past two weeks much has been said around the globe about the cause of the sudden outbreak of Gold. It is an absolute fact that the decision of the Central Banks was the Force Majeure. However, WHY the CB's did this is still occluded data. Here now is the truth.

When the CB agent in charge of monitoring all Gold communication on the Internet, discovered that the USA Gold Forum People were MEETING IN PERSON, the CB's realized that the jig was up! As Michael had cleverly ordained that all communication regarding this event was to be kept on private lines, the CB's were not aware that only a few of us were actually gathering. They presumed, due to the incredible morale and fortitude of this elite group, that a massive conference was underway here at "Hidden Falls Retreat" and expected a momentous onslaught of truth on Monday morning. Believing they had no choice, they made their peremptory announcement Sunday night. Nevertheless, we here on this site know the extent that our Golden Diogenes Lantern has brought light to the world and helped launch the Long Range Artillery CB assault that enabled gold to establish this solid foothold on enemy territory.

At this point, the enemy are fully occupied with setting up bullion hospitals to treat the wounded, they are burying their dead, imprisoning their incompetents and they are scrambling everywhere to find fiat medicinal supplies. But, even the Fed may have been reluctant to help them with this. Contrary to mainstream opinion, there is no cure for fiduciary gangrene. We shall soon see what amputations will have to be performed.
--- ----
Now that we are again gathering for a 'normal' weekend of communication, I can finally answer Leigh's questions.

Did we have fun? Well, if a stranger had dropped by, he would have assumed he was witnessing a gathering of friends who had known each other for at least half a lifetime. And why not? Not only would most of us get along famously in person, but it is also natural that our wives (and husbands) would share similar interest in truth, justice, health, children and all the other 'real' things in life.

What did we talk about? Oh, some of the time we talked about Forum subjects. Some of the time we talked about forum people! We talked about our work, our home towns, our homes and herbal medicine. I heard a lot of recipe talk in the kitchen and I would like to publicly thank Richard and Gandalf's wives for all the help in that area.

We hiked around the property, searched for scarce ripe blackberries, and when everyone left Sunday afternoon, we parted, I believe, as permanent friends.

And, no Leigh, not far. One five hours away, and one under two.

----

Does anyone know of any other Internet site that has built as much friendship, commonalty of thought and purpose, and comradery as this one?

Thanks again to Michael, for bringing this all about. ---- Peter A.