USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
TopazHI-HAT euro.#3582309/01/00; 00:01:49

Good evening HH:
On Deutche-welle (german/english radio) today the 25 bp increase in rates were reasoned as being directly related to OIL price increases.
There didn't seem any great consern (still) re: US$/EURO.
At least they're honest and recognise the inflationary impact of the Oil price increase - albeit oil HAS gone up much more in E than in $.
When you think about it, to expect to take a "snapshot" of eleven different economies, all in different cycles of econ activity, then "cast in stone" a common currency is a pretty big ask, NO?
Then accept that these 11 fractal (they basically hate each others guts) countries are to waltz off arm-in-arm and live happily ever after--------NAAAA!
It's STILL got all the hallmarks of a "Dollar wreak havoc on thyself" scenario and when, and only when that happens-- THEN euro will declare for GOLD, accompanied by China etc. MVHO

AristotleHi Topaz--I'm only passing through so this will be quick#358249/1/2000; 3:19:59

I think you are too hard on yourself when you say "MVHO" regarding the items you've forecasted--because you are essentially already correct, though most people don't see it that way. Yet.

While not widely recognized as such, Europe already has "declared for Gold" when they included Gold assets within the ECB reserves that would be regularly marked to market. The implications of this as the prominent international practice is huge. Where it was necessary, member nations, and even Greece on the threshold, were all required to drop national policy impediments to free trade of Gold.

"...accompanied by China" you say? Bingo. Already in the works. Restructuring markets for the free trade of Gold, that is.

Why the focus on free market Gold, a person might ask? Because a fixed Gold exchange standard is not practical for the reason you articulated skepticism regarding the political and social acceptance of the euro as a unified currency for even "just a tiny block" of countries. You said--"When you think about it, to expect to take a "snapshot" of eleven different economies, all in different cycles of econ activity, then "cast in stone" a common currency is a pretty big ask, NO?
Then accept that these 11 fractal (they basically hate each others guts) countries are to waltz off arm-in-arm and live happily ever after--------NAAAA!"

If you envision resistance among a trading block of 11 countries "shackling" themselves to a single yet holistically flexible currency, is their any practical hope that the entire world would do it for a single inflexible currency in the form of Gold? That's an even bigger ask, and probably rates an even bigger "NAAAAA!" It's better to let Gold fulfill the role in the world that it is uniquely suited to serve--as THE monetary reserve asset held eagerly by nations, banks, corporations, and individuals.

This drive toward freemarket Gold is good thing, and should eventually be seen by monetary thinkers as a natural turn of events--the culmination of past experience and developments to simply "allow" a monetary system to exist which can function in harmony with man's "predictably capricious" character.

On a related note, regarding your earlier seeking of Aragorn--who's well and will surely appreciate your inquiry--it was this same inescapeable human element that most troubled his thoughts regarding what he came to agree was clearly the best-suited system (FreeGold) to accommodate mankind's nature. He held no worries for the longevity of FreeGold once it had itself been well-established, but maintained concern for a waning commitment of followthrough at such a time when the U.S. feels the pinch as the international FreeGold standard gets raised higher up the flagpole. Clearly seeing this as the greatest modern promise for all of mankind coming within reach, Aragorn's concern was that as the necessary and ultimate victory for FreeGold draws ever nearer, "our hands may prove too small to hold it."

Because the U.S. would likely turn bad-tempered upon the loss of its priviliged status in international trade, the "hoisting of the standard" would best be brought about through the comparatively slower but natural evolutionary forces of the multitudes in the international marketplace than through any official "lightning in the night" declaration by any single and easily identifiable "target for anger" in the eyes of the U.S. However, it must be said that any way you slice it, the discomfort felt in the U.S. is from laying in a bed of our own making.

Fortunately, we have at least the potential to attain a good productive capacity, and could soon enough thereafter be participating well with the world on a level playing field of mutually beneficial economic exchange. Furthermore, Aragorn had not long ago suggested that ANOTHER and his message should be treated with the full respect owed to a potential Nobel candidate or laureate; and upon being asked "Economics or Peace?" his answer was "Both at once." That's pretty high praise, my friends, directed toward an anonymous someone who puts messages into bottles to be set adrift upon our cyber sea. And I'm definately inclined to agree. FreeGold strikes the perfect balance--hanging like the description of my "monetary pendulum" with an idealistic yet pragmatic perfection at dead center.

Gold as a fairly valued reserve asset. Get you some. ---Aristotle

Black BladeOil and Gas to rise Much More#358259/1/2000; 3:59:18

The following are just a few government proposals to put the screws to the petroleum industry. Prices will continue to rise, and the blame will go to OPEC, or the "Big, Bad Oil" Companies, but will not land at the feet of those most at blame - the gubbermint! - Black Blade

ANWR monument

This fall President Bill Clinton could designate the Arctic National Wildlife Refuge coastal plain as a national monument. Rep. Don Young (R-Alas.) has asked Clinton to confirm or deny those rumors. Young is chairman of the House Resources Committee, which has jurisdiction over federal lands. Clinton reportedly is considering using his powers under the 1906 Antiquities Act to declare a monument on ANWR's coastal plain, preventing any future development. The coastal plain east of Prudhoe Bay field is believed to contain large oil reserves but cannot be leased unless authorized by Congress. Young said the Alaska National Interest Lands Conservation Act mandates that only Congress can designate monuments, wilderness areas, and refuges on federal lands in Alaska.

Black Blade: This is probably the last possible undiscovered giant oil field in NA. Alaskans want it, but outsiders figure they know best for Alaska. I guess Billy-Bob Clinton dreamt this up while relaxing by the "cement pond". Why shucks, he shoulda called up ole Jed Clampett, Jethro, Granny and Ellie-May and discussed it at one of the White House hoe-downs. Why hell, he could get cousin Hillary, er the wife Hillary, and buy oil futures first. Those cattle futures worked out well.

Diesel sulfur

By December, the Environmental Protection Agency plans to issue a final rule to cut the sulfur content in diesel fuel 97% from the current 500 ppm to 15 ppm. It said diesel must be significantly cleaner-burning to ensure that truck and bus pollution control technology is effective. The American Petroleum Institute warned EPA that the rule will cause shortages. It said, "The refining industry is unable to produce sufficient 15 ppm sulfur diesel, nor can our distribution system supply it across the country."

Black Blade: More refining at stressed refiners, cutting back on available supplies of distillates, and increasing the cost of diesel. Looks like another contribution to inflation and deliveries of goods and services will cost more.

Wilderness roads

In the fall the U.S. Forest Service will be reviewing public comments regarding its proposed a ban on road construction in nearly a quarter of the 192-million-acre National Forest system. The proposal covers more than 54 million acres of inventoried roadless areas. It would allow forest managers to propose additional protection for the inventoried areas and other smaller roadless areas through local forest planning processes. The Independent Petroleum Association of America said, "The nation needs more access, not less, to areas of this country where oil and gas may be found." House and Senate committees have held hearings critical of the proposal.

Black Blade: Wonder why we aren't self-reliant for are oil needs? Of course after Bruce Babbit's, Al Gore's, and Billy-Bobs "slash and burn" policy of the western lands due to misguided ideas of environmentalism and conservationism, petroleum and mining companies may be allowed onto the resulting "moonscape".

Black BladeHigh Winter Energy Costs! (and Fun Winter Activities). #358269/1/2000; 4:32:36


High gas, oil prices may make winter a bit costly

Charleston Daily Mail

CHICAGO - Whether they use natural gas or oil to heat their homes, consumers can expect higher energy costs this winter, with natural gas and heating oil prices near historic highs. "This year the squirrel isn't burying any nuts and we're going into the winter on fumes," said Phil Flynn, an energy analyst for Alaron Trading Corp. in Chicago. "Unless something dramatic happens, we're looking at a very expensive winter." Energy markets were jolted this week by a combination of developments that sent prices shooting higher - an unexpected drop in U.S. crude oil stockpiles coupled with a pipeline explosion in New Mexico and a hurricane that raised fears of another blow to already- low natural gas supplies. Soon the aftershocks will be felt by consumers, whose utilities already were warning them to brace for big bills ahead. Suzanne deGraff, a natural gas customer from Rochester, N.Y., said she's been told her monthly bill from Rochester Gas and Electric Co. will jump about $26 to $130. "I'm not happy," she said, "but, again, they're the only ones in town. What am I going to do?"

Whether a customer's utility provides natural gas or heating oil, there appears to be no way around prices
heading higher than last winter - one of the costliest home heating seasons ever. Home heating oil prices surged this week to their highest since the Gulf War in the wake of industry surveys showing inventories of U.S. crude oil, its source, dropping to 24-year lows. Heating oil remains more than 50 percent more expensive than a year ago. The increase is blamed partly on a cutback in production by the Organization of the Petroleum Exporting Countries.

Natural gas has rocketed upward for different reasons.

U.S. supplies of natural gas have been declining since the mid- 1990s amid a drop in production by energy
firms that didn't find it worth their while when prices were low. Prices have more than doubled in the last year and a half and reached an all-time high of $4.85 per 1,000 cubic feet this week on the New York Merc, where futures prices are a precursor for wholesale and retail trends. Making matters worse, production hasn't been revved back up, rising just 1 percent this year. And demand is up sharply in a booming economy that has industrial use surging and more Americans plugging into computers. The nation depends increasingly on natural gas to generate electricity as utilities gradually switch from coal and nuclear-powered plants. The situation has worsened this summer, with heavy usage for air conditioners preventing the industry from stockpiling for the winter as it usually does. Natural gas inventories are near six-year lows. That leaves gas prices highly susceptible to supply disruptions - such as last Saturday's pipeline explosion in New Mexico that killed 11 people and shut down a primary gas main supplying California. Hurricane Debby's brief advance toward key production facilities in the Caribbean and the Gulf of Mexico raised fears of similar trouble and propelled prices higher before they fell back. Experts say consumers could skate by this winter only if last year's warmest winter on record is followed by one at least as warm.

Black Blade: Got my wood-burning stove, several cords of juniper, and a whole mountain range of trees. Looks like a few people might be shivering in the dark though. I guess some could keep warm by thinking warm fuzzy thoughts of how they are contributing to the environment with self-sacrifice, and how there is no inflation because the new economy doesn't require petroleum. I'll think of them while I sit by a cozy fire, smoke a stogie, and read a good book with a glass of brandy in hand. Then again, maybe I'll just get naked and roll around in my gold bullion :-)

HI - HATCruxt Of The Matter#358279/1/2000; 4:32:36


That philosophical ditty, that begins with, " and the race does not go to the swift" is false.

Tes it does go to the swift. To those who have concluded what means are best deployed to safeguard purchasing power over spans of time greater than 1 qwarter.

Make no mistake, the tempo of musical chairs spiraling around a black hole of debt, in our virtual world, has reached overwhelm speed.

I see many, many running harder and harder, but slipping behind as purchasing power relentlessly evaporates, almost in an invisable process.

The implications of more and more of the masses being unable
to afford a standard of living that Masison Avenue portrays as "normal", will continue to escalate social angst and

HI - HATCruxt Of The Matter#358289/1/2000; 4:33:05


That philosophical ditty, that begins with, " and the race does not go to the swift" is false.

Tes it does go to the swift. To those who have concluded what means are best deployed to safeguard purchasing power over spans of time greater than 1 qwarter.

Make no mistake, the tempo of musical chairs spiraling around a black hole of debt, in our virtual world, has reached overwhelm speed.

I see many, many running harder and harder, but slipping behind as purchasing power relentlessly evaporates, almost in an invisable process.

The implications of more and more of the masses being unable
to afford a standard of living that Masison Avenue portrays as "normal", will continue to escalate social angst and

KnallgoldFAZ articles#358299/1/2000; 4:45:01


August 30, 2000
Is the gold price manipulated by large banks and the American government?..."

Given GATA's assumption that the FAZ articles were inspired by the Bundesbank,with the above title they would show they want a free Gold.In the other article,the words "free market" are used in the context of the Gold market:

"..In the free market, which in the case of gold is being
"made" ..."

Another interesting sentence:

"..they have to take a good look at the solvency of their
own clients as well their counterparties, when trading with derivatives.." (sounds like a warning!)

And there is no talk of Central Banks manipulations-a sign that the present Gold market is not backed anymore by them?

My speculation:Europe wants a free Gold market (June rumour!)-a fact, and the FAZ articles were the warning shot.

(BTW,Switzerland will end with selling of the first tranche end of Sept..Details of the second tranche are still open I think)

LeighAristotle#358309/1/2000; 5:31:48

I really love your message from early this morning about Free Gold. It set me to wondering, though. When you consider that most European nations are essentially socialist, and that the U.S. is getting more that way every day, I wonder how long it would take the government to decide that gold could better be used for "the common good" rather than personal wealth.
714re: Palladium#358319/1/2000; 5:36:06

Here's the results of palladium auctions on one ounce pieces
over at our popular auction website:

Bermuda Commemorative$698.01 (did not meet reserve)
Soviet Ballerina 790.00 (bidding ends today)
Engelhard ingot 708.00 (did not meet reserve)
Panda 725.00

So the average price on our off-market palladium is $730.25, just shy of NYMEX's frozen $740 spot price. Also note that once the Ballarina is gone, there are no more bullion pieces up for auction.

According to one of my sources in the business, the Defense Logistics Agency is auctioning some of its palladium stockpile, providing a small amount to the market. Apparently, most manufacturers are awaiting a resumption of shipments from Russia. This source also states that there is no dealing directly with Russian miners as all palladium is sold through a state agency.


As you can see, off-market palladium is going for no more than NYMEX's frozen spot price. Draw your own conclusions.....

CanuckAttempt to rouse Stranger and Oro#358329/1/2000; 5:52:46

Uncle Oro,

Can we PLEASE have one more horse racing story Uncle Oro?


The NEW ECONOMY is keeping inflation in check; it's the best thing since sliced bread!!

Black BladeRE: Palladium#358339/1/2000; 5:55:19

The "Defense Logistics Agency" has auctioned 100,000 ounces, and the remaining 800,000 ounces are to be auctioned also. There was only 900,000 ounces in the strategic reserve to begin with, and it is all for sale. As far as an auction for a couple of one ounce bullion Pd coins is concerned, I seriously doubt that the major industrial consumers are going to waste their time bidding on ebay. Most manufacturers are working off their Pd stockpiles (sponge-form), and taking contractual deliveries from western sources. Others have switched back to the Pt-Rh combination that they used previous to the innovation of Pd catalyst technology. Besides, there isn't any Pd in sufficient quantity to be sold and the market is effectively dead. Even the COT in Pd futures no longer exists. The prices are more likely posted as a formality than anything else. Speculators have likely left for "greener pastures".

-Black Bladeb

714Black Blade re: Palladium#358349/1/2000; 5:57:08

Any idea what DLA is getting for their reserves?


Black Blade"Morning Wakeup Call!" Wall Street set to Charge Ahead!#358359/1/2000; 6:30:57

Source: BridgeNews


Asia Precious Metals Review: Gold extends rise on short-covering
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Sept. 1--Spot gold extended overnight gains to Asia on Friday due to short-covering amid a lack of selling interest, dealers said. Spot gold is expected to break the nearby resistance of U.S. $280 later Friday or early next week, but it would be hard to test the next resistance of $285, as selling from central banks and producers could emerge, they said. The Asian trading concentrated on gold, while trading of other precious metals remained sluggish.

Black Blade: Cool!


Technical Update: Gold and silver mining stocks firming

New York--Aug. 31--With gold being a drag on the Bridge/Commodity Research Bureau price index's rally, there are signs emerging in the stock market that suggest that the end of its bear market may be near. The XAU gold and silver
stocks index has been stable for the past month and showed some encouraging technicals as silver rallied. Stocks can perk up before their related commodities so it may be time to give both a closer look. (Story .20415)

Black Blade: Cool Again! The question is whether we go into the long weekend on a higher note, or do the shorts hammer the PMs.

Meanwhile, S&P Futures are up +7.00, Fair Value +24.18, indicating a very strong to extremely strong NY open at these levels. Oil is off $0.12 at $32.02/bbl, and NG is off its all-time high at $4.765 Mbtu. Au is off 90 cents at $276.00, Ag is unchanged at $4.94, Pt up +$5.00 at $590.00 ($590.00 London AM), and Pt up +$5.00 at $718.00 ($724.00 London).

Black BladeRE: 714 Palladium#358369/1/2000; 6:39:55

No numbers have been given, nor has the buyer been identified for the first 100,000 ounces. I don't know if there is a schedule in place or if only certain buyers are allowed. It could go direct to the market via the COMEX or between the auto-manufacturers. However, once sold, the situation of depleted Pd supplies remains. The western suppliers of course produce greater amounts of Pt, and therefore it is likely that Pt and Rh will be under greater pressure going forward, though not as efficent as Pd. We will have to await auction results provided the DLA folks are willing to make them known.
Black BladeMarket News - Jobs report#358379/1/2000; 7:52:00

Stocks Rising and Gold under a bit of Pressure

Rally in store for shares
By Julie Rannazzisi,
Last Update: 9:07 AM ET Sep 1, 2000

NEW YORK (CBS.MW) - A friendly August jobs report will give buyers reason to cheer at the open Friday as it reinforces their view that the Fed can stay sidelined, perhaps for the remainder of the year. September S&P 500 futures tacked on 12.60 points, or 0.9 percent, and were trading roughly 12.50 points above fair value, according to figures provided by HL Camp & Co. Nasdaq futures, meanwhile, climbed 83.00 points, or 2.0 percent, extending earlier gains. Non-farm payrolls fell by 105,000, catching Wall Street off guard with the large drop. But market watchers need to sift through the August numbers more carefully, as they were skewed by the Verizon strike and government layoffs of temporary census workers. Excluding the impact of the strike and the government layoffs, 102,000 non-farm jobs were created. Within the report, the unemployment rate rose to 4.1 percent compared to the 4 percent rate in the previous month. Average hourly earnings rose by 0.3 percent, less compared to expectations. The Federal Reserve's main concern throughout the tightening cycle has been the taut labor market, which it fears will eventually fuel wage inflation. Thus far, however, productivity growth has continued to outstrip wage inflation. View Economic Preview, economic calendar and forecasts and historical economic data. Investors will keep their eye on the retail sector following Thursday's fallout on the heels of some earnings warnings and less-than-stellar same store sale results Separately, Trim Tabs said all equity funds saw inflows of $5.6 billion during the week ended Aug. 30 - the same amount witnessed in the previous week. Equity funds investing chiefly in U.S. stocks had inflows of $5.4 billion compared with inflows of $5.6 billion in the previous week. In the bond market, Treasurys gained ground, erasing earlier losses, as the tame employment report brought out the bulls. On Thursday, the long end enjoyed a stellar rally. The 10-year Treasury note added 9/32 to yield ($TNX: news, msgs) 5.69 percent and the 30-year bond added 3/32 to yield ($TYX: news, msgs) 5.66 percent. The market will also get a look at the August National Association of Purchasing Management index Friday, which is expected to come in at 51.8 percent, according to a survey of economists conducted by CBS On Thursday, the Chicago Purchasing Managers index slid to 46.5 percent in August from the previous month's reading of 52 percent. A reading below 50 percent indicates a contracting manufacturing sector. Over in the currency market, dollar/yen (C_JPY: news, msgs) lost 0.2 percent to 106.49 while euro/dollar (C_EUR: news, msgs) slipped 0.7 percent to 0.8884.

SteveHHow 'bout that Euro#358389/1/2000; 8:28:53

dollar down(-1.19); Euro up (1.20)
TopazAristotle#358399/1/2000; 8:49:20

Hello Ari,
Great news about AIII- if I recall he did indicate his absence (from the forum) in his last post but it has been rather a long time.
The esteem you hold Aragorn in is very impressive and if minds such as yours (and his) are about rectifying the imbalences inherent in the current system then I can rest easily.
So too your mutual admiration for the thoughts of Another. (shared here)
One can only hope time finds HIM also able to return to this fold.
One question if I may Ari,
What is your take on ORO's position that a Freegold system is doomed to failure given Greshams Law, in which he cited the Roman experience as an historical example?
When time permits svp good Sir.

USAGOLDGold Holding on to Yesterday's Gains#358409/1/2000; 8:51:08


(9/1/00) . . . Gold was down
slightly on light Asian selling and lack of
short covering follow-through in Asia and Europe
overnight. There is little in the way of fresh
gold news this morning though we note with
interest some traders predicting a resumption of
the short covering that along with strong Asian
physical demand pushed gold up $4 yesterday.
Today's COMEX session will be cut short ramping
up to the long Labor Day weekend.

Oil is ignoring the prospect of increased
Saudi production with one London trader
remarking that "traders do not generally believe
that a half million barrel per day [increase]
will be sufficient." Also, Goldman Sachs
commented that crude inventories relative to
demand were at their lowest level since the
1970s. The net result is crude trading steady
near the $33 mark in the early going.

Soft jobs data was working the Dow higher
this morning but the report was jello-like in
its consistency. One observes that much of the
employment losses were the result of one-time
events -- census workers being sent home and the
Verizon strike. One wonders if the optimism
about the Fed and interest rates will hold among
the more realistic on Wall Street.

The dollar is taking a hit against the major
currencies with the euro and yen leading the
way. The move is questionable though when one
takes into account the European Central Bank's
anemic one-quarter point interest rate increase.
The next few days will tell whether or not there
has been a change in sentiment, or if something
else might be going on -- like co-ordinated
intervention to ameliorate the ECB's weak swing.

We'll see if all of this accrues to gold's
benefit as the day moves along.

Have a nice weekend, fellow goldmeisters, we'll
see you back here on Monday.

If you would like to receive an introductory information packet on gold ownership through USAGOLD/Centennial Precious Metals, please click on the link above.

Black BladeAngloGold and Mintek Look for More Industrial Uses for Gold#358419/1/2000; 9:08:21

Source: Gold news, p. 8 (The Gold Institute)

AngloGold LTD., the world's largest gold producer, and Mintek, South Africa's national metallurgical research organization, have launched a joint venture to pursue the research and development of gold's industrial uses.

Named Project AuTEK, the purpose of the 50/50 joint venture will be to exploit gold's unique properties for industrial applications and focus on the uses of gold as a catalysts in chemical processes. The company hopes to discover and promote additional uses of gold as a catalysts in air purification, automotive applications and in the chemical industry.

Speaking at the announcement of the project, Dave Hodgson, AngloGold's Executive Officer responsible for technology, said: "The changing emphasis of society towards a cleaner and more user friendly environment has created more opportunities for gold which will be the subject of the collaborative venture's research."

Next year, AngloGold also plans to conduct a conference in South Africa of international researchers and potential commercial users of gold and related applications.

Mike Cortie, Manager of the project's research division at Mintek, said: "The commercial application of the catalytic properties of gold has yet to be proven and tested." He added: "Our immediate next step is to compare the potential gold catalysts to the existing ones and establish their commercial viability. There is technological proof that gold has potential application in certain types of fuel cells that provide environmentally friendly power and in heavy industry chemical synthesis. We have started our research by targeting the use of gold in catalysts designed to remove pollutants such as carbon monoxide from air."

Project officials expect that early applications will help clean air in office buildings, airplanes and other confined areas with heavy concentrations of people.

Black Blade: I see a moral dilemma developing here for radical environmentalists who hate mining. And it's cheaper and more abundant than PGMs!

schippiEmail reply to; 9:44:00

Select Gold ( FSAGX ) is a good proxy for the Gold stocks.
The Gold overhead resistance chart at:

Shows that a multi year Downtrend in Gold has been concluded,
and that an Uptrend channel is now in place. Further it appears that
we are now at the bottom of this Uptrend channel, poised for a
move to the Upside.

Best Regards

Al FulchinoFor your thoughts#358439/1/2000; 9:47:30

The following is a good read that many who visit here will enjoy pondering. It is from a
monthly newsletter printed by Pastor Mike Rattin of the Faith Baptist Church in
Hollis.NH He includes a Biblical passage and a short story by an unknown author.
Whether the story is true or not, I do not know, but if there are any refiners of silver
among us, your input would be useful. I will just let it stand by itself and offer it up for
your comsumption. Enjoy and thanks for reading.

Refiner's Fire
"He will sit as a refiner and purifier of silver; he will purify the Levites and refine them
like gold and silver. Then the Lord will have men who will bring offerings in
righteousness, " Malachi 3:3 (NIV)

Some time ago, a few ladies met in a certain city to read yje scriptures, and make them
the subject of conversation. While reading the third chapter of Malachi they came upon a
remarkable expression in the third verse. "And He will sit as a refiner and purifier of

One ladies opinion was that it was intended to convey the view of the sanctifying
influence of the grace of God. Then she proposed to visit a silversmith and report to them
what he said on the subject. She went accordingly and without telling the object of her
errand, begged to know the process of refining silver, which he fully described to her.
"But Sir" she said" do you sit while the work of refining is going on?"
"Oh, yes Madam," replied the silversmith. "I must sit with my eye steadily fixed on the
furnace for if the time necessary for refining be exceeded in the slightest degree, the
silver will be injured."
The lady at once saw the beauty, and comfort too, of the expression, "He will sit as a
refiner and purifier of silver.:

God sees the need to put his children into the furnace of trials; His eye is steadily intent
on the work of purifying, and His wisdom and love are both engaged in the best manner
for them. Their trials do not come at random; "the very hairs of your head are
As the lady was leaving the shop, the silversmith called her back and said he still had
more to mention, that he knows the process od purifying is complete when he can see his
own image reflected in the silver. -Author unknown

Al FulchinoIdeas and People: Are they seperate?#358449/1/2000; 10:15:19

A while back someone here, possibly ET <correct my memory if I am wrong >
mentioned that he believed in good and bad ideas, not necessarily good and bad people.
And this concept caught my eye, when I saw it. I was a bit puzzled that this concept could
be held when we witness in our daily news, the stories of genocide, rapes, child abuse
good and bad economic policies etc. Surely, I thought this person is another intellect who
only lives in the realm of his head.<smile> A genuinely fine person he may very well be.
He probably does all kinds of fine things for family friends and country, but can he really
believe that there are no good or bad people? So for a week or so now I have pondered
his statement and wondered if perhaps my idea of things was incorrect. I have in fact
come to see that this person is partially right, and that I am partially right. Giving my
friend here the first shot, I say that he is correct that whether it be an economic idea, or a
murderous idea, the idea itself is indeed good or bad. But my departure is this, people
themselves will always posses free choice and and more importantly will. A will for this
good idea or bad idea. It is very important to recognize that a human being is the
conveyor of the good or bad idea. If for instance a flower contains a gene that makes its
petals red, is that flower not red? Then by the same token if a man harbors a bad idea, is
he not know by that same idea? Be it good or bad? And whether he just wishes it or
carries it out?

It is very important to not isolate an idea from a person who carries it out, whether it be
Bill Clinton, Alan Greenspan, Ronald Reagan or Adolph Hitler. To say that the idea held
to in the heart and mind can be separated from the person is incorrect. And is indeed
nothing more than an intellectual gymnastic.

Buena Ferumours of war?#358459/1/2000; 10:52:15

Arutz Sheva News Service
Friday, Sept. 1, 2000 / Rosh Chodesh Elul, 5760

Jerusalem government sources are having trouble understanding why exactly United States forces in Germany have suddenly gone on anti-Scud alert. Prime Minister Barak said that Israel is keeping an eye on the
situation in Iraq, and that as far as is known, there is no need to send Patriot missiles to Israel. The Washington Post reported today, in the name of Pentagon sources, that Iraq is liable to attack a nation "friendly with the U.S." one month from now. Other sources in the American capital
feel that the entire issue is an election-campaign gimmick, as the Republicans have accused the ruling Democrats of being "soft" on Iraq.

LeighAl Fulchino#358469/1/2000; 11:32:46

Al, thank you for your beautiful messages! I agree with you that we're given free will to make choices, and our choices define our characters. Thankfully, regardless of the bad choices we've made in the past (and who hasn't made TONS of them?), we can always start afresh.
CanuckCRB high#358479/1/2000; 12:00:22

Bridge/CRB Current Quotes
Other Futures Markets

Bridge/CRB Index

Page snapshot Fri 01 Sep 2000 14:01 ET
Description Last Change Percent Change
Bridge CRB Index 228.46 +1.05 +0.46 %
Bridge CRB Futures Price Index 226.25 +0.65 +0.29 %

228.46 and rising.

ETAl#358489/1/2000; 12:07:16

Hey Al - thanks for the thoughtful response. Please do not consider me an intellectual, idealist or any such type. I'm simply a guy that was shown the path of free markets nearly 35 years ago. It has given me much time to study the many authors that have written of economics and politics. Interestingly enough, the first book which started me down this road was Ayn Rand's "Fountainhead". I next read "Atlas Shrugged" and "We The Living". I see one of our newest members here is reading about John Galt. Also please do not equate my belief in free markets to the recent statist protection programs like NAFTA and GATT. Although they trumpet themselves to be in the interest of free trade, they are merely protection schemes for the status quo.

When I said I was much more concerned about bad ideas than bad people it is in regards to economic organization. Sure there are bad people out there but a bad idea can have a much greater impact on society than a few bad people. Now put together bad people with bad ideas and you end up with world wars.

Above is a chapter from Mises' "Human Action", which I hope you will get a chance to read. He explains the importance of ideas in our society. Below are a couple of paragraphs from this chapter which focus on our discussion at hand. Thanks again for the reply and I hope you come to understand that we are not as far apart as it may seem.

"In the field of society's economic organization there are the liberals advocating private ownership of the means of production,
the socialists advocating public ownership of the means of production, and the interventionists advocating a third system which,
they contend, is as far from socialism as it is from capitalism. In the clash of these parties there is again much talk about basic
philosophical issues. People speak of true liberty, equality, social justice, the rights of the individual, community, solidarity, and
humanitarianism. But each party is intent upon proving by ratiocination and by referring to historical experience that only the
system it recommends will make the citizens prosperous and satisfied. They tell the people that realization of their program will
raise the standard of living to a higher level than realization of any other party's program. They insist upon the expediency of their
plans and upon their utility. It is obvious that they do not differ from one another with regard to ends but only as to means. They
all pretend to aim at the highest material welfare for the majority of citizens.

"The nationalists stress the point that there is an irreconcilable conflict between the interests of various nations, but that, on the
other hand, the rightly understood interests of all the citizens within the nation are harmonious. A nation can prosper only at the
expense of other nations; the individual citizen can fare well only if his nation flourishes. The liberals have a different opinion. They
believe that the interests of various nations harmonize no less than those of the various groups, classes, and strata of individuals
within a nation. They believe that peaceful international cooperation is a more appropriate means than conflict for the attainment
of the end which they and the nationalists are both aiming at: their own nation's welfare. They do not, as the nationalists charge,
advocate peace and free trade in order to betray their own nation's interests to those of foreigners. On the contrary, they
consider peace and free trade the best means to make their own nation wealthy. What separates the free traders from the
nationalists are not ends, but the means recommended for attainment of the ends common to both."

CanuckGold Bonds?#358499/1/2000; 12:15:06

From another gold site,

" I just recieved my quarterly report this morning from Franco Nevada. I note that they have no debt, shareholder equity is 1.4 billion, and they have 713 million in cash.
What if they were to sell gold bonds and purchase gold with the cash recieved. One billion worth of gold bonds would purchase 100 tonnes of physical. If they market this successfully they could remove a lot of physical from the market. They would be doing the complete opposite of Barrick Gold, supporting the price of gold instead of trashing it.
Anyways I phoned FN inv. rel. and posed this investment plan to them and asked what they thought aboutit. Their reply was that they hadn't thought about it but that it was a interesting idea."

Any thoughts on this?


CanuckSimple arithmetic#3585009/01/00; 12:25:22

Credit to PM Trader (Gold-Eagle).

Anyone feeling concerned about numbers, shorts or CB sales should read this; mathematics in it's simplest form, astute
"Demand does NOT have to increase in order for the gold price to spike. So what if the CB's are selling 2 to 2 1/2 tonnes of gold per trading day. The deficit is (4000-1500)/250=6 tonnes per trading day. Where is the other 3 1/2 to 4 tonnes coming from. I'll tell you where it HAS come from ... Uruguay, Kuwait, Chili, ...

One might argue that this DEFICIT will be met by increased leasing. I say no. I say the CB's are very concerned about their 10,000 tonne exposure right now. Why? The Washington Agreement was instated because the gold price was getting so low as to further choke off production. This cannot be allowed if they are to have any hope of getting their gold back.

The DEFICIT is not linear at the rate of 6 tonnes per day. In fact, we are entering an annual period where demand is heightened. Thus, one could reasonably argue that the DEFICIT averaged 5 3/4 tonnes per day for the first three quarters of the year, and that the remainder of the year the DEFICIT may average 6 3/4 tonnes. These people have been struggling all year to deal with the DEFICIT implied by a weaker demand period. How are they going to deal w/ an increased DEFICIT as a result of a heightened demand period.

Why do you think the WGC did a study to see what the people thought about the relationship of CB gold "reserves" and strength of currency. The supposition was that they really did not care. The result said the EXACT OPPOSITE. These shorts are trying everything they can to postpone the inevitable. Gold will rise as a result of their inability to feed the BEAST. Investment demand will increase as a result of increased price (not the reverse).

The dollar need not fall, the euro need not rise, the A$ need not rise, the J$ need not rise, the DOW and NAZDAQ need not fall, inflation need not come, deflation need not come, a new Asian crisis is not needed, posters on this board need not be negative or positive, the price of beans in Zimbabwe currency need not stablilize; Gold is set to rise because they can no longer feed the BEAST.

The only way that one could reasonably argue against the prior conclusion is to admit a priori that gold is currently at free and fair market value. This I think we all can agree is ludicrous.

PM "

MarkeTalkCoBra (too)#3585109/01/00; 12:43:29

Do you think today's sharp rise in the Euro against the Dollar is a result of ECB intervention or is it just market perception that interest rates are rising in Europe and staying flat until the U.S. presidential election?
Cavan ManAnother (no pun) "Farfel Classic"#3585209/01/00; 13:40:00 13.44 G-E
Cavan Mancurrency wars "coming out" ?#3585309/01/00; 13:42:12

G-E 13.36 Taken from an AP wire story.
chromeyFree Gold = Free Mexican Dinner for FOA/Trail Guide#3585409/01/00; 13:52:35

I have been a looong time reader and fan. Based on yours and others insight, I am confident about upcoming moves in gold. I appreciate so much the opportunity of 'once in a lifetime' that is present 'in our lifetime.' I would like to say thanks by treating you to a Mexican dinner in or near Aiken, SC. Your thoughts on 'free gold' have inspired me to provide what I can at this time 'Free Mexican Food'! Ask for Kevin at 803-641-2941 or email This email address is being protected from spambots. You need JavaScript enabled to view it. .

Thanks for the HAPPY TRAILS!

BobboRally continues...#3585509/01/00; 14:30:28

Gold rally continues. So the POG corrected $1.20 today, no biggie and with a three day holiday weekend and early market close you can chalk it up to Labor Day. XAU on the other hand was again a stellar performer and showing continued bullish divergence. It corrected 50% of yesterday's upmove and closed like it wants to move higher, closing: 52.84 +0.50 (+0.96%). And that in light of a Friday close with a 3 day weekend and 1.2 POG drop. Very impressive. Gbugs enjoy the weekend in peace. By Tuesday's open it is possible that one of our international hot spots will begin to flare up and GOLD "iz lukin' gud."
Keep the gbug faith.
XAU charts are currently a mixed affair and not flashing a clear go ahead short-term, but that condition can last awhile. However, the long term techs/charts are acting super and looking even better than I had expected. This puppy appears to have legs, at least thus far. I would expect either some early weakness on Tuesday or another explosive up move. If weakness presents itself, it should be temporary and another opportunity to buy low.
That expected opening gap, which I mentioned Wedsnesday before the close, for Thursday's open materialized. You gotta love it when a plan comes together. However, the question is whether or not it is a break-away gap. Odds favor that it is....and that means higher prices ahead. We will know more next week.
Again, everyone enjoy the holiday weekend. GO GOLD...GO XAU!

JourneymanQuestion of the day @ALL#3585609/01/00; 14:36:52

Does it ever seem perverse to you that when the unemployment rate goes up, i.e. people who want to work lose jobs, that that's considered "good for the economy" and the stock-market goes up?

QUESTION OF THE DAY: Why wouldn't this perverse aberration happen if we were on a TRUE (convertible) gold standard?


P.S. This one is a bit of a sleeper -- there's a bit more to it than meets the eye.

LeighJourneyman#3585709/01/00; 16:03:59

I think you stumped the entire Forum with your question! Nobody has posted for hours! Why don't you give us a hint?
CoBra(too)@ Marke Talk - Thanks for Qu.#3585809/01/00; 16:12:04

As you know Marke T., I've been a bit of a sceptic on the euro lately -, mostly due to political intervention and expressed my thoughts towards my feelings. As I still feel the 1/4% rate hike is too little and too late, something else of much greater consequence may have happened recently.
Let me explain. I'm sure you've heard about the preeminent German newspaper articles in the FAZ (Frankfurter
Allgemeine Zeitung)about manipulated gold and other markets, which some of my international friends feel that the "Bundesbank" has stealthily launched and meant to shoot a volley across the bows of some BB's. In particular the Deutsche Bank (incl. BT) and maybe even the US-Treasury - stating that the euro zone is now totally "fed" up (pun intended)with the $ playing games with the rest of the world.
I'm not sure if gamely Mr. Summers will be up to playing the game in the same league as R. -gamey Rubin would have coped. Some-things are definitely changing - and as I'm aware I only indirectly answered your question - and while we're talking the perception of the future is changing more rapidly than ever - conclusion: sell some more of your inflated paper for real value. Best cb2

PS: MK - Thank you for kind offer - I'm proud being a first!

CoBra(too)Hello Leigh -#3585909/01/00; 16:28:08

Haven't talked for a while. Hope all's well with you and family - guess you too smell the changing tide, though didn't feel called to answer your quest.

To say it with Bill Murphy, we'll win the day - soon -
Thanks for being here - we all love you - take care and have a great long weekend (forget labour - for once) - enjoy - your's fondly -cb2

LeighCoBra(too)#3586009/01/00; 17:24:04

Thank you for your extremely sweet message!! I've been here almost every day just lurking mostly. I've noticed your posts on LeMetropole Chat. Yes, I too am sensing the winds of change, and I've loaded up my little boat.

Had the opportunity to speak with MK the other day on a non-Forum related matter. He's so nice! He's the host of our nonstop party, and what a generous and genteel one he is.

ROR on Kitco is agitating for a D.C. Kitcofest. I wrote and suggested to him that he put out a call for a tri-site gold fest. Would anyone here be interested?

Topaz'limpics---bring 'em on!#3586109/01/00; 18:49:45

A glorious early Spring morning here in the Land of Oz. From my vantage point atop Casa del Topaz, the Olympic City away to the East is abuzz with pre-games preparations- streets being re-marked, lawns mowed and pavements swept. "Welcome World" signage of all descriptions being nailed, dragged, hung and posted in every vantage point that MAY happen to secure a nanosecond of fame via the world-wide media coverage. "The Games of the new Millenium"- proudly bought to you by--- {here insert any one of the miriad, mostly Americo-centric multinational conglomerate juggernauts that have "attached" themselves like grotesque blood-sucking paracites to this once noble but alas now pitiful Organization}.
As the coming weeks unfold, the good people of Sydney will be pushed, shoved, re-directed and abused-all in the name of the "Olympic Spirit" and as Sydneysiders, will take all these knocks in their stride and graciously come back for more.
Yes, these Olympics are guaranteed to provide a "bitter-sweet" experience. Athletes, Spectators, and the hundreds involved in the organization of same will roll with the punches and bend to the point of breaking to hopefully come out the other end still smiling.
From this involved Sydneysider may I extend a warm welcome to all Gold-bugs - either physically or virtually - to the Games of the XXVII Olympiad……………..(This space for rent)……….<smile>

RossLNot the € this time#3586209/01/00; 19:18:17

Last 2 weeks the big move is the ¥ / £
JourneymanA hint @Leigh, ALL#3586309/01/00; 19:21:57

Hmm, a hint - - - hmm. Well, it has to do with anticipating -- and betting on -- something that can happen with fiat money that can't be anticipated with gold - - - because it couldn't be easily controlled with a gold standard.


714Black Blade re: Palladium#3586409/01/00; 19:46:00

I understand the DLA's auction process is rather one-sided. One must be approved to bid, one bids vis-vis the London fix, and the highest bidder does not necessarily get the product. Apparently the government decides whether or not to sell after they see all the bids. And if you win, you have to pick up at some military base in New Jersey. This info comes to me second-hand and I have no way of really verifying it, though it sounds credible knowing what I do about government.

I never meant to infer that industrial consumers of palladium would bid for palladium on ebay. I simply posted the info to make a point about off-market prices following the frozen NYMEX price. Currently, I'm doing historical research into gold and have yet to find any evidence of a black market in AU following the Gold Reserve Act in 1934. There was a secondary industrial market, but the pricing structure there did not seem to vary from the official price of $35.

BonedaddyJourneyman, what an excellet question!#3586509/01/00; 21:27:58

I have always considered this phenomenon strange also. But I have never delved any deeper into an explanation than to make the assumption that it occured because increasing unemployment has been used as the rationale for the Fed to lower interest rates. But, your question has stopped me in my mental tracks. By asking why this would not happen if we were on a GOLD backed system, you lead me down a very interesting path. So, here we go....
If the money supply were not manipulated to try and achieve various political outcomes, (and I think we must
find that the manipulations are political, because social engineering is political by definition), then the cycles of lending and subsequent confiscation through default would be greatly minimized. A GOLD backed currency limits credit creation. The Fed wouldn't have a loan-sharking operation that confiscates wealth. On a GOLD backed standard the working man would not be coerced into borrowing what he surely cannot repay, to obtain what he certainly cannot afford,and trying and achieve a standard of living completely beyond his means. If it were not for rampant credit creation, and the willingness of the masses to gorge themselves on it, everything any normal person would want or need would be so much more affordable. In 1913 We The People appointed a ruling class that has since enslaved us by our own greed. It's a classic case of giving us enough rope to entangle ourselves and then reeling us in. It reminds me of one of the temptations that Christ was faced with when Satan took him up on a high place and showed him the riches of the world. This may not be the answer you had in mind, but I eagerly await your thoughts on the subject. Thank you for startling me into thought.

Black BladeRE: 714 and Palladium and Au black market#3586609/01/00; 22:27:18

It wouldn't surprise me if that is how the DLA auctioned it's metals. The government has a history of preferential treatment to various industries and certain companies within different sectors. As far as gold is concerned, my grandfather had held onto quite a bit of gold coin even after FDR stole much from other US citizens. I am happy to say that I happened to "inherit" several various Liberties and St. Gaudens, and a few Indians. I remember him saying that "If the gubbermint didn't like it, too bad." and that "there's always Mexico and canada." During the depression they got by since they had a farm/ranch and took odd jobs, but the gold was for "just in case." I imagine that if it became necessary, the gold would have been good as barter with just about anyone. It seems that a lot of people didn't pay any attention to the gubbermint back then. There was at least a limited "black market" for "raw" gold among those who were able mine it and use it as barter, but since FRNs were accepted as an exchange medium it is reasonable that a flourishing wide-ranging black market didn't develop. Interesting is that just most people ignored taxes as well. Times sure have changed. Now it is hard to ignore the gubbermint as they have proven that they are perfectly willing to murder people at the drop of a hat. Also, if one really wants physical Pd, then there are 10 oz. Engelhard bars that can be purchased. Maybe MK and the USAGOLD have access to that market.
JMBJOURNEYMAN#3586709/01/00; 23:17:20

Regarding your Question Of The Day: Could it have something to do with the fact that a nation's gold supply can not be increased as fast as it's fiat supply?
Zenideano subject#358689/2/2000; 4:01:48

First in Aussie by law one needed a permit to protest , then it was you cannot own a gun ( Fear a Government that fears your gun) and now re: the Olympics , in the local newspaper a story reads " I find it difficult to believe that the Government is trying to introduce legislation that would enable the Australian Defence Force to not only arrest civilians without informing them of the reason but to shoot to kill civilians in public protests.
Self Explanatory huh . Off the subject abit, but whose going for Gold in this game ?. I bite my tongue !

KnallgoldICE#358699/2/2000; 4:03:29

This new intercontinentalexchange,is it another shot against Gold and physical holders?Founders are the usual suspects in the Gold manipulation game.What do you think?
Black BladeDiscovering the Origin of Gold Coins#3587009/02/00; 05:29:20

Source: Gold News (Gold Institute) July/August 2000

Early Inscriptions Were Guarantees

Scientists at the British Museum in London have come up with a novel explanation for inscriptions on the world's earliest known coins, which were minted in Lydia, Turkey, more than 2,600 years ago. They argue that the stamp on the small coins was like a modern day refiner's ‘good delivery’ mark, a guarantee of their gold or silver content.

Until about 620 B.C.E., non-barter commercial transactions were made using weighed quantities of scrap gold or silver. However, in the rivers ofd Asia Minor (now Turkey) large amounts of electrum, a very pale yellow natural alloy of gold with 20-50 percent silver, were found, but the gold/silver content varied.

The British Museum researchers, led by metallurgist Paul Craddock, believe that the invention of ‘coins’ with clear stamps on them overcame this problem. Craftsmen simply added extra silver to achieve a consistent balance of 55 percent gold and 45 percent silver. Then they put the guaranteeing stamp, or ‘chop’, on each small ingot - creating the first coins of a clearly defined value.

A gold refinery was also set up in Sardis, the capital of Lydia, where goldsmiths worked at improving coin quality. They mixed natural electrum dust and salt in a clay pot, then heated the mixture to around 750 degrees Centigrade (1,590 Fahrenheit). Iron minerals from the clay pot reacted with the salt to produce ferric chloride and chlorine gases, which reacted with the silver in the electrum to form gaseous silver chloride. In five days, all the silver could be extracted from five kilos (161 oz.) leaving pure gold.

Craddock told "The Independent" newspaper in London, "It's taken ten years to disentangle the complex story of the origins of coinage. Using modern scanning electron microscopes and X-ray spectrometry equipment, we have been able for the first time to appreciate fully the genius of the metal workers of the ancient world."

Black BladeNorilsk Nickel Finds New Job for Old Subs or "We All Live in a Yellow Submarine"#3587109/02/00; 06:11:25

By Christopher Pala
Photo by Bellona Foundation

Some people say a project to convert nuclear-powered submarines into cargo carriers is crazy, others believe it is feasible. In any case, the navy is behind it. And the isolated mining and smelter conglomerate Norilsk Nickel in the north of Siberia hopes what must be the boldest swords-to-plough-shares project in history will allow it to ship thousands of tons of nickel under the ice off the Arctic coast in all weathers. The submarines in question are "boomers," stealthy behemoths carrying long-range ballistic missiles. The boomer is arguably the most lethal weapon ever built, and the biggest of them all - Norilsk Nickel's object of desire - is the one called Akula, or shark, and NATO calls Typhoon.

Designed with unique ice-breaking capabilities, it carries 20 SS-N-20 missiles, each with 10 warheads, for a total of 200 independently targeted nuclear bombs seven times more powerful than the one that hit Hiroshima. It's no wonder that it inspired the best-selling book "The Hunt for Red October." Three Akulas are more or less operational and the other three were headed for destruction under a U.S.-funded, $250-million program to help the impoverished navy pay for the costly dismantling. The Akula caught the eye of the management of Norilsk Nickel, the world's biggest producer of nickel, an essential ingredient of steel. Built in the 1930s with prison labor at the cost of thousands of lives, the sprawling Norilsk "kombinat" is one of the nation's most profitable enterprises, with 1999 sales of $2.944 billion and profits of $1.278 billion. Its 103,000 employees produce 22 percent of the world's nickel, along with 60 percent of its palladium and 40 percent of its platinum, plus copper and cobalt.

But getting these valuable metals - nickel topped $10,000 a ton last year - to their markets is no easy task. The ore is loaded onto ships in Dudinka, a bleak port on the vast Yenisei River, for the 560 kilometers north to the Kara Sea, where they turn west for the 1,760-kilometer voyage to Murmansk, the nation's main ice-free Arctic port. River and sea are covered with thick ice for nine months of the year, so the cargo ships must follow one of the nation's nuclear-powered icebreakers for most of the trip.

There are now six icebreakers in operation; all are owned by the state but operated by Murmansk Sea Line, a subsidiary of the nation's No.1 oil firm LUKoil. The fleet is overextended and under-maintained and one icebreaker is due to be retired in a few years, said Norilsk Nickel spokesman Anatoly Komrakov. Norilsk Nickel managers worry that at that time, LUKoil may give preference to oil over metal in its allocation of icebreaker time, especially since LUKoil is developing its Arctic fields and rapidly expanding its fleet of tankers. And building a new nuclear icebreaker would cost at least $150 million. So last year, Komrakov said, the company commissioned St. Petersburg's Rubin Design Bureau, designer of the Akula, to study the feasibility of turning Akulas, minus missile-and torpedo-launchers, into cargo ships.

In the meantime, Norilsk Nickel general director Alexander Khloponin headed for the Sevmash shipyard in Severodvinsk, near Arkhangelsk, where the Akulas were built in the 1980s and where the first one was being dismantled. He had no trouble convincing the navy brass to delay the cutting up of the next one scheduled for the blowtorch while the study was underway: They love his plan, just as they hate losing the gem of their strategic submarine fleet. Admiral Vladimir Kuroyedov, commander of the navy, recently told a television interviewer that the project "is the best way to use surplus submarines." The designers delivered their verdict in February: For $80 million, an Akula can be made to carry 12,000 tons of cargo safely and reliably. First, it would plow through the surface ice while descending the shallow Yenisei River. Then it would slide below the ice and, at a speed of 25 knots, three times faster than an icebreaker-led convoy, head for Murmansk, where its load would be transhipped to surface vessels. The entire operation would take place in or near Russian waters. With three all-weather Akulas plying the Dudinka-Murmansk route, Norilsk Nickel wouldn't need to depend on LUKoil's icebreakers any more. Norilsk Nickel chairman Yury Kotlyar has been downright enthusiastic.

"I think this project is absolutely realistic," he told a wire service last February. "I am certain we will have our first sea trials next year." Meanwhile, a second study is being done to evaluate more precisely the cost of modifying the company's docks and of operating the subs. Norilsk Nickel's Komrakov said results are due in January. He said his company favors creating a joint venture with the navy. The submarine crews will work as civilians - and presumably be paid more than the paltry $50 a month they now receive. But others are not so sure the project is viable. "It's a crazy idea - it's far too dangerous," said researcher Thomas Nilsen of Norway's Bellona Foundation, which monitors environmental threats posed by the Northern Fleet. "Navigating the Kara Sea is very tricky because it's so shallow." U.S. submarine expert and author Norman Polmar differs. "It's a great idea: these are marvelous ships that include tremendous feats of engineering," he said. "I know the designers at Rubin [Design Bureau] well, and if they say that it can be done, I believe them." "But I doubt it would be economical," he added, "because these things are horribly expensive to run."

"It's economically unrealistic," agreed analyst Mikhail Seleznyov of Moscow's United Financial Group. "They should use their healthy cash flow to build icebreakers." Still, suggests defense analyst Robert Norris of the Natural Resources Defense Council in Washington, D.C., "We should support commercial conversion." Ambassador Thomas Graham, former head of the Arms Control Agency who lives in Washington, said U.S.-Russian treaties involve only the destruction of launchers. "The owning nation can dispose of the ship as it wishes," so U.S. agreement would not be required.

Black Blade: Oh yeah, I like the "more or less operational" part in light of the stellar record of Soviet Sub safety and recent events. Doesn't sound feasible as all modern subs are prohibitively expensive. The cost is even greater as recovery costs from sunken subs just adds to the costs. Of course they have to have product to deliver which as far as PGMs is concerned is in doubt.

Black BladeAnalysts: Collapse in oil supply growth imminent #3587209/02/00; 06:47:32

Source: Oil and Gas Journal

Soaring oil prices may have come too late to avert both a collapse in oil supply growth from countries outside
the Organization of Petroleum Exporting Countries and a new rig market famine next year, according to Petrodata
Research, the forecasting arm of industry data analysts OneOffshore Inc. Though oil companies have been flush with cash for the last year, this new money is being spent not on drilling wells but rather on "defending their balance
sheets, buying back shares, and competing with high growth technology stocks," said Petrodata analyst Maarten van Mourik. The current state of the market and "underlying pressures" are signaling a repeat of the 1995-98 cycle, in Van Mourik's opinion, which ended in the oil price crash and pan-industry recession. As well as its negative influence on oil supply, the spending drop over the last 2 years is also hitting the deepwater rig markets, states Van Mourik. He believes new oil company plans for fast-tracking new frontier field developments will likely be "too optimistic" in the light of an imminent rig market squeeze. "Poor day rates have made contractors wary of committing to further building of new rigs," he said. "As a result, we predict that the available fleet will be insufficient again shortly to cope with increasing demand and develop the potential of all those deepwater fields."

Black Blade: The low number of rigs is only a part of this equation. The lack refining capacity makes it a moot point! No new refineries have been built in the US since the 1970's mostly due to EPA and other various gubbermint regulations. A very severe energy crunch is just over the horizon.


The Australian government has agreed to exclude LNG from the nation's overall greenhouse gas reduction measures. It also has postponed plans to create a domestic greenhouse gas emissions-trading regime until similar trading schemes are introduced elsewhere. The decision has been welcomed by the Australian petroleum industry.

Black Blade: This treaty is as good as dead. When the energy crunch is in full force, shivering masses in their unlit caves (homes) will demand suspension of regulations and treaties in favor of the daily conveniences that they have become accustomed to. Of course, it will be costly, and in spite of what the drones say in the financial media, it will show up in inflation.

MO VER MEGBlack Blade#3587309/02/00; 07:47:06

Two energy companies that may be worth a look: Dynatec (DY,T) and Keywest Energy (KWE,T).


ShermagJourneyman's Question of the Day#3587409/02/00; 07:48:56

Yesterday Journeyman posed the following to the forum:

"Does it ever seem perverse to you that when the unemployment rate goes up, i.e. people who want to work lose jobs, that that's considered "good for the economy" and the stock-market goes up?"

"QUESTION OF THE DAY: Why wouldn't this perverse aberration happen if we were on a TRUE (convertible) gold standard?"

To which I offer this response:

First, the standard storyline on why this aberration happens. The market participants (probably correctly) percieve that there will be no central bank response to increase interest rates, ensuring that the credit expansion and the consequent stock market bubble can continue unabated.

Now, in the environment of a TRUE gold standard, an increase in unemployment signifies a genuine slowing of the economy, with the attendant reduction in economic activity and business profitability. With the discipline imposed by a TRUE gold standard, the credit cycle must follow through to an adjustment downward to flush out the untennable economic activities undertaken in the preceeding expansion. Any portion of the banking industry that ignores this reality will likely see convertibility in action, in the withdrawal of deposits as it increasingly is percieved as a risk of failure.

Black BladeSomething a Little Different Department#3587509/02/00; 08:00:25

Source: Gold News, p. 6, (gold Institute) July/August 2000

Of Cabbages and King Midas
Plants Extract Gold from Soil

Extracting gold from vegetables, phytomining, has been known about for years, but a New Zealand scientists says he can get gold from cabbages in an economically viable manner.

Gold found in topsoil can often make its way into plants through roots. The plants are then processed and tiny amounts of gold can be obtained.

Now, Chris Anderson of Massey University, who has been working on the project for years, says that growing cabbages over rock debris, known as tailings, from old mines, can be done commercially. He estimates that extracting more than a kilogram (2.2 pounds) of plants by using a chemical that he stumbled upon in the laboratory during his experiments. The chemical is placed on the tailings and makes the gold soluble for around 10 days. The dried plants are burned and the gold remains.

Researchers from the Institute of Natural Resources previously tested Anderson's earlier plant mining techniques in which he used ammonium thicynanate to help make gold more soluble. At that time, the process was not economically viable because of the cost of the chemicals. The new process, Anderson says, uses smaller amounts of chemicals and fewer chemicals and could be worthwhile even at current gold prices.

During the past few years, scientists have used plants to absorb many substances from the earth including heavy metal pollutants such as mercury. University of Georgia scientists found that a genetically engineered Yellow Poplar not only absorbed mercury but seemed to thrive on it. The trees converted the mercury to a less toxic form sending it out through their leaves to the atmosphere.

Black Blade: Maybe the kids are right. Don't eat your vegetables – mine them. There used to be a company called Biomine that used vegetation clippings and for analysis and exploration for mining.

Black BladeRE: Shermag and MO VER MEG#3587609/02/00; 08:04:45

Shermag: Another interesting point is this: Why is slowing down the economy and therefore the rate of growth and compressing profit margins considered good for the economy? Certainly is difficult to understand this "New Economy"

MO VER MEG: Thanks, I'll look into them.

Black BladeCarbon-Chloride Method Holds Promise to Eliminate Cyanide in Gold Extraction#3587709/02/00; 08:20:09

Source: Gold News p.5 (Gold Institute) July/August 2000

Researchers at Monash University in Australia say they have found a way to eliminate the use of cyanide in gold leaching processes by overcoming problems associated with using chloride solutions, an alternative method.

Cyanide leaching is the most popular method overall in the gold extraction process but it is controversial because of cyanide's perceived potential for harming the environment,

Until now, miners who wanted to use the activated carbon and chloride solution process to convert gold ions to gold metal had to destroy the carbon to recover the gold. This destruction of carbon is expensive. Monash scientists say they have found two forms of activated carbon that do not destroy the gold chloride ion and can be stripped without destroying the carbon.

John Cashion of the Department of Physics says that the work continues on the discovery and that a pilot plant in Kalgoorlie will open in several months. It will be managed by Perth-based Rand Mining NL.

Black Blade: What we in the industry have commonly called the "Bleach Leach" process. An interesting possibility, as there are many so-called "environmentalists" who oppose the use of cyanide. Cyanide gold extraction is now banned in Montana, yet this process could be used in its place. The wacko "environmentalists" would have to dream up another line of opposition to mining.

Black BladeUS markets closed on Monday, but still could be interesting.#3587809/02/00; 09:05:10

Currently NY Crude is at $33.40/bbl up +$0.26, and NG is at $4.835 Mbtu near all-time highs up +0.053. Could get very interesting this coming week. I'm outta here for a while. Going to go fish, swill beer, and plant cabbages ;-)
CanuckNov. 1997 news#3587909/02/00; 09:25:43

Here's an old article from 1997. Gold had dropped to a 12 year low; $307.

Interesting comments on Swiss sales (from 1997), CB sales and the supply shortfall being made up from same.

Do we have the stamina? Another 3 year wait?

Time will tell.

Cavan ManJourneyman 35856#3588009/02/00; 09:27:19

or, Strange Means of Measuring Value


About eight years ago when I began studying financial markets and became a mainstream investor, I too could not understand why when a company announced a layoff of 15K, the stock took off like a rocket. To me, that just didn't make sense. But then, I was new to the game and not wise in the ways of Wall Street.

At first blush, it seems illogical; not rational for a stock to rise precipitously on the backs of labor in this example. Perhaps that is the point? The pure fiat system is not logical nor rational because it cannot sustain itself indefinitely hence, it is fundamentally an unstable means of maintaining monetary order within a society.

That's probably not the answer you are looking for but I am out of time (to really think) once again. Fine question!

PS: I do not think we will ever return to a pure gold standard. This concept of "freegold" is much more logical.

CanuckFort Knox gold#3588109/02/00; 09:32:52

Here's an article from 1975!!! Fort Knox gold gone?

Has this BS been going on for 25 years?

Canuck1975 Fort Knox gold scandel; more!!#3588209/02/00; 09:41:04

"The Government was taking gold out by twilight in trucks,
and I accused them of it and proved it on them because I had
people who were posted who are friends of mine. They were
telling me in the Treasury that they were not taking the gold
out, but I had friends who told me the hour and the minute when
they'll come out for another load. Oh yes, they've taken a lot
of gold out of there they won't admit. It's terrible."


Subscribed and sworn to before me this 7th day of April 1975."

CanuckMore!!#3588309/02/00; 09:56:00

" illegally obtained by the Exchange Stabalization Fund..."

Oh my!! From 1975!!

CanuckMissing gold, IMF, ESF and oil.#3588409/02/00; 10:08:38

"On September 5, 1975, a reporter posed the following question to Dr.
Abdul-Rahman Al-Atteqi, Minister of Finance of Kuwait, at the National
Press Club, quote: "None of the oil-producing states spoke during the
World Bank and IMF meetings. Why not?"

Dr. Al-Atteqi answered, quote:

"Addressing people seems to be of no meaning. If the United Nations or
World Bank meetings had a time to listen exactly as good listeners
should, everyone would speak, but most of the speeches just go into
the air. Nobody hears it--whispering, most of the delegates out of the
room--and then it is a text in a book. If it happens, sometimes
somebody reads it. This is why. And secondly, it is known who runs the
policy of the Monetary System of the world, and we cannot for the time
being compete with them. We are in their hands. So this is a fact. We
have to live with it unless we break through--and we are looking for
that time."

From 1975, is it the time??

CanuckFrom Sept. 1980#3588509/02/00; 10:14:34

The Ro ckefeller interests, now under the control of John J. McCloy
and associates, arranged earlier this year for eight billion dollars
($8,000,000,000)--that's eight thousand million dollars--in gold to be
paid to the leader of Iraq, Saddam Hussein. A very special private
underground warehouse in Zurich was used in this transfer of gold.
This gold was an outright bribe. It was to persuade Iraq to attack
Iran. Eight billion dollars, my friends, is a lot of money, but it was
a cheap price for the Rockefeller oil cartel, and for two reasons:

First, the gold which was used to bribe Iraq to start the war was
part of the gold which was stolen from you and me! The bulk of the
gold taken from America's stockpiles was flown to Europe on
multinational corporate jets. So, my friends, that $8-billion in gold
did not cost the oil companies anything except some jet fuel, but it
cost you and me part of our monetary gold, and it has been used to
start a war for which you and I will pay even more.

CanuckFort Knox gold audit#3588609/02/00; 10:52:43

1997/1998 gold audits at Fort Knox are inconclusive!!

Is the gold there or not?

Also, manipulation theories during the April '00 crash.

CoBra(too)"The Turning Dollar Tide" by Hans Shicht#3588709/02/00; 11:56:02

Is another classic, I'm sure everyone has read over at G-E. It is a must read for all Goldhearts - best cb2
Mr GreshamDoug Noland -- Credit Bubble Bulletin#3588809/02/00; 14:26:59

Every week, I think he can't possibly top what he's written before -- very often (this one especially) he does.

It's just an amazing keep-on-going bubble, and it's brought out writers to match it (including here at the Forum). I'm just lucky to have found a ringside seat to watch it from, next to some smart and vocal critics.

Now, protecting and maybe enhancing my savings and purchasing power ("making money") from all this knowledge -- that's another matter. Being too far ahead of the crowd doesn't seem to work. So far. Maybe something to be learned from the Wall Street crowd? N-a-a-a-a-h!

Maybe my choice has been just to sleep better at night. I'm turning out to be a lousy timer on so many things. But, everytime I see the initials "PMG" (Precious Metals Group?), I think "Peace of Mind Guaranteed".

Oh well, humanity may repeal 5000 years of historic valuation. Has it within its collective power of choice. But it's a bad, bad bet to make.

LeighA Saturday Night Hike?#3588909/02/00; 16:35:56

Who's game for a Saturday night hike? I'll bring the flashlights, Cavan Man, you bring the marshmallows, someone else, how about some chocolate bars and graham crackers? All we need is Trail Guide! TG, we'll all be waiting under the big USAGOLD sign - you can't miss us!
JMBA SATURDAY NIGHT PUZZLER...Complete the following sentence. #3589009/02/00; 19:06:08

A gradual monthly decline of the United States' current account deficit.....

Note: Additional points will be awarded for striking fear into any unwary neophytes who may be lurking.

JMBThe Puzzler....part 2.#3589109/02/00; 19:25:36

Feel free to add as many sentences as necessary. Let it flow, IT'S SATURDAY NIGHT!
ShermagBlack Blade Re: New economy conundrum (msg# 35867)#3589209/02/00; 19:33:01

"Another interesting point is this: Why is slowing down the economy and therefore the rate of growth and compressing profit margins considered good for the economy? Certainly is difficult to understand this "New Economy"".

The thinking of the "new economy" adherents is simply amazing, isn't it. This should go down as one of the great false paradoxes of the mania. As to the logic that produces this belief, as best I can discern, it realy is as simple as: a slowing economy means no imminent interest rate hikes (or possibly eventual easing), and therefore a perpetuation of the expansion.

Throw in generous dollops of liquidity and like Pavlovian dogs, the greater fools rush in.

LeighHike in the Dark#3589309/02/00; 19:36:07

I was just reading over my latest post when a deeper truth jumped out at me. We HAVE been hiking in the dark all along! If it weren't for Trail Guide, Another, Aristotle and a few others "in the know" to shine their lights and guide us, we'd all be stumbling around and in danger of falling off a cliff! What a debt of gratitude we owe our wise friends!

Trail Guide, we're still waiting under the sign, but it's getting dark and cold. Won't you at least show up for the campfire and s'mores?

Shermag(No Subject)#3589409/02/00; 19:54:04

JMB's Saturday Night Puzzler

A gradual monthly decline of the United States' current account deficit..... although seemingly more benign than an abrupt drop, can hardly be considered a successful outcome. At the current rate of bleeding approaching $400B annually, a gradual decline could possibly result in a further accumulated deficit increase approaching one trillion dollars. This would be above an beyond the enormous accumulated deficit to date. This would be a further trillion dollars of foreign claims against the assets, present or future, of U.S. citizens. Hardly something to take comfort in.
nummus aureusJMB's quiz...#3589509/02/00; 20:25:38

"A gradual monthly decline of United State's current account deficit...." Is Impossible.

Until Trail Guide arrives, I've brought a radio to play 'Golden Oldies'.

schippiGold Indicator Chart#3589609/02/00; 20:26:04

The Gold Indicator chart at:

Displays, The XAU, Gold(Cmx), CRB, FSAGX and
the US-Dollar Index, on a percentage basis, so that
different time periods may be compared. The data
currently shows, the CRB accelerating Up, the US$
Index, dropping and an inverted head and shoulders
formation in the XAU. This all points to a move Up
for Gold.

JourneymanGood Answers @JMB msg#: 35867, Bonedaddy msg#: 35865 Thought Provoking Answer @Cavan Man msg#: 35880 &FIVE GOLD STARS @Shermag msg#: 35874#3589709/02/00; 21:09:35

Good going guys! ALL good answers!

Thanks Shermag -- I won't have to answer now. From my viewpoint, you nailed it.

High Regards,

ShermagJourneyman#3589809/02/00; 21:20:51

Thanks. High praise indeed from someone who has earned my respect.
Mr GreshamAlan Newman's Cross Currents#3589909/02/00; 21:34:59

Sharing his latest, for those who've been appreciating his charts this year...
MariusTo add to Shermag's answer to Journeyman's question#3590009/02/00; 21:47:34

Good Evening, All!

Hope everyone is enjoying the long weekend. It has been (gulp!) over 2 decades since I took college level economics, but something stirred in my memory reading Shermag's explanation of why higher unemployment is viewed as positive by the market.

Rightly or wrongly, low unemployment leads to (in the minds of neo-Keynesians, anyhow) a tight labor market, higher wage demands, and thus: inflationary expectations. "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally dishonest attempt to obscure what is being inflated. As the Austrian economists argue convincingly, rising prices are a symptom of inflation, not the malaise itself. Follow the money (supply)!!

I remember that the economists were in the process of inventing another fake form of inflation while I was in college: oil shock inflation! While there's no argument that higher oil prices can have negative consequences for dependent consumers, THERE IS NO INFLATION WITHOUT AN INCREASE IN THE MONEY SUPPLY!

Peter AsherEuro politicing in Denmark#3590109/02/00; 22:24:42

Rasmussen must reassure Danes the euro will not mean surrender to the central bank.

Chocolate euros seduce

-- The "yes" team is touring
Denmark with chocolate euro coins, covered in gold
foil, while the "no" team has retaliated with its own
bag of chocolate kroner in silver foil. Both taste the
same; the question is whether the Danes will find the
euro more difficult to swallow. -----

Black Blade; 22:34:13

Interesting site.
Black BladeOOPS. link to......#3590309/02/00; 22:34:47

Interesting site.
JourneymanAnother two "Questions of the Day" @Black Blade, ALL#3590409/02/00; 22:49:58

Black Blade suggests:

"Black Blade: This treaty is as good as dead. When the energy crunch is in full force, shivering masses
in their unlit caves (homes) will demand suspension of regulations and treaties in favor of the daily
conveniences that they have become accustomed to. Of course, it will be costly, and **in spite of what
the drones say in the financial media, it will show up in inflation.**"

QUESTION 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?


P.S. I think these are easier than the last one?

JMBJourneyman's Questions#3590509/02/00; 23:26:46

Q 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?....hmmm, the extra money spent on energy would take away from expenditures on hot dogs and what have you, no?
Q 2: What would happen?....ah, that's easy...we'd all live longer :)
My puzzler has me stumped....I'm thinking we just might see a gradual decline in our current account deficit in the not too distant future. Since we need a continous increase in credit to keep the bubble expanding, maybe this hypothetical current account decrease would set off a liquidity crisis which would undermine the foreign bullish sentiment toward our "mighty" dollar (gag me).
I feel very comfortable with my "hot dog" conclusion, but as to this "declining current account" fairytale, well....I don't know. Am I all wet? (Be gentle, it's late) Thanks.

Black BladeJourneyman's question#3590609/02/00; 23:48:48

This question is not as easy as it appears on the surface. We are about to tread in untried waters. The old rules of inflation may have to be put aside, as this developing energy crunch is so fundamentally based on supply and demand without any hope of relief without the deployment of other alternative energy sources. So here is my attempt at a convoluted answer.

A true gold standard requires fiscal discipline. This is something that the Keynesians seem to have conveniently forgotten. One cannot print gold just as one cannot tax the populace into prosperity. As inflationary forces make an impact, gold rises in value as well, I think that Marius alludes to this with a reference to rising money supply. However, without the constraints of a gold standard, money (such as it is) can be printed at will. This is on the minds of all petroleum and energy producers. This is not to say that there would be no inflation under a gold standard, yet the intrinsic value of gold should at least theoretically rise in tandem with other commodities including petroleum. Gold should also hold value in a deflationary environment as well. During the inflation of the 1970’ and early 1980's gold had outperformed most other investment vehicles. During the depression of 1929 through the 1930's, gold held its value (under the gold standard), and even outperformed in that environment. Since gold was illegal for the peons to own, the next best proxy, Homestake Mining stock not only held up in the deflationary environment, but also rose over 519 percent from October 1929 to December 1935 (a compound rate of 35% per annum). The thing that is most important to remember here is that the problem with rising petroleum costs is that we truly are running out of oil. There are no more real super-giants (Very large oil fields) to be found. The easy pickings are found. There are a few smaller fields to be sure, but these will be more costly to find, explore, define and produce from. This situation is different from the typical inflation that we have come to expect. This is more a fundamental case of supply and demand. The only additional production capacity is in Saudi, and even then there is no more refining capacity. Add to this rising demand from emerging world economies, increased energy needs in the developed world (new economy), restriction of petroleum production, restrictions on politically incorrect energy sources (nuclear, coal, wind, and solar), and the energy needs from those countries who have depleted their own resources. It seems apparent that inflation is inevitable, though I would think that a gold standard could minimize or even mitigate the rising costs much better than current fiscal policy of "money supply". In other words, there just isn't a lot of intrinsic value in printed paper and national debt instruments. This is about as good as I can determine after several servings of my favorite adult beverages.

Strad MasterFinal reminder#359079/3/2000; 0:40:30

Since we are in the midst of a slow holiday weekend evening I thought I'd take this moment to post a final (off topic) reminder about my concert tomorrow night at 6 PM (Pacific Time). I hope many of you will be able to catch my performance over the net at the above link. Don't forget to account for your local time zone. Those of you in the LA area can listen on KMZT (FM 105.1). I hope this concert will serve to warm the cockles of the hearts of all the lords and ladies of this esteemed round table. I'll be thinking of you all. Gotta get to bed now. Night all...
Chris PowellEuropean banks ready for showdown over gold?#359089/3/2000; 0:53:07

Latest from Reg Howe, analyzing the
recent stories about GATA and gold
in the Frankfurter Allgemine.

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

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

The Invisible HandConfiscation in Europe#359099/3/2000; 2:04:32

start quote -
Date: Sun, 03 Sep 2000 06:50:51 -0000
Subject: [GATA] European banks may be ready for showdown over gold
The danger, of course, is that soaring gold prices could trigger
sharp and mutually reinforcing sell offs in stocks, bonds and the
U.S. dollar.
- end quote

Has anybody some (Austrian perhaps, smile) thoughts about gold confiscation in Europe? Yes, I know it would be "Europeans" would trigger the POG rise, but this would result in a dramatic fall of (European) stocks and bonds, and then the politicians will assume they have to do something to save I-don't-know-what and could well follow the example across the Atlantic?

Peter AsherPart of the problem#359109/3/2000; 3:35:14

Frightening article: what he doesn't say is how the companies described, suvive financially.

When Work Leaves the Workplace

John L. Perry
September 2, 2000

Excerpt >>> They see a swelling gaggle of younger applicants for
employment who show up, dressed more
appropriately for vacation than work, demonstrating
no visible curiosity about the company or what it is
trying to achieve, concerned only about benefits,
hours, vacation days, "personal" days, how often to
expect raises, when promotions are handed out and
whether the company will pay to further their

They are not interested in work; what they want is a

KnallgoldFAZ#359119/3/2000; 4:05:37

Awhile back I wrote in this Forum of the FAZ "showing the middlefinger" to the establishment-bureaucrats when they announced that they will use from now on the old spelling again (in the german speaking countries there was a widely discussed "Rechtschreibereform","new spelling reform",the people were against it but it was then introduced without asking us).
The leading conservative/liberal(in the european Hayek sense!) is again shooting against the current politically left establishment with the Goldmanipulation articles.Something must have changed!

@Leigh: Socialist and Gold, your concern recently about "collectivation of Gold": maybe the revival of Gold will kick socialists out of office?A political revolution?A rebirth of conservative ideals,family'spending only what you have etc.?

Knallgoldmy last post,missing words#359129/3/2000; 4:08:25

the leading conservative/liberal...NEWSPAPER OF GERMANY
SHIFTYPeter Asher #359139/3/2000; 4:47:43

Any word from The Stranger?
Maybe he is still reading ORO's long post!
he he he
Back to bed.

The Invisible Hand$50 a barrel.- ECB interest rates X 2 in 1/2 y - upcoming recession#359149/3/2000; 5:35:23

London Sunday Times
September 3 2000

Prices are set to rise again this winter. By David Smith and David Parsley

Oil skid ahead

JUST 18 months ago the oil sector was bemoaning a low oil price and the doomsayers were predicting that the crude price, then below $10 a barrel, might hit a new all-time low of $6 a barrel.

Oil majors such as Royal Dutch/Shell, BP Amoco and Texaco were demanding cuts in petroleum revenue tax (PRT), the government's main North Sea tax, so they could make a profit on the oil they were producing. The situation, we were led to believe, was dire.

Today the oil price has bounced decisively back above $30 a barrel, despite the efforts of Saudi Arabia and some of the other members of (the Organisation of Petroleum Exporting Countries (Opec), to steer it lower.

The fear, indeed, is that prices could head even higher over the winter months. Oil stocks are low, just as the big consuming countries move into winter. Earlier in the summer petrol shortages in America helped to push crude prices sharply higher as the refiners scrambled for supplies. Now, say analysts, the same thing could happen again because of a supply squeeze in the heating- oil market. And if Europe and America look to be heading into a severe winter, the upward spike for oil prices could be sharp, with some predicting $40 or even $50 a barrel.

"We know that there is plenty of oil in tankers, steaming towards the main markets, and we know that $3 or $4 of the present price reflects pure speculation," says one industry executive. "The question is whether the oil gets there in time to head off further speculative rises in the price."

Part of the problem has been created by the dynamics of the market itself. For the oil majors that hold most of the stocks, the sharp rise in crude prices has made it expensive and unprofitable to do so. They have had an incentive to operate on low stock levels until spot and futures prices for crude move back into line.

Opec, meanwhile, seems no better at controlling the market at a time of sharply rising prices than it was when oil was tumbling in value. Last week Saudi Arabia called for a "suitable" increase in output to be agreed when the cartel meets on September 10. It has pledged a 500,000 barrel a day rise in output to try to calm the market.

Not all Opec members are, however, sympathetic, fearing that increasing production would play into the hands of the West by pushing prices sharply lower. Iraq's recent output has been low.

Whatever the prospects, the economic effects of higher oil prices are already apparent. The European Central Bank, which on Thursday raised the cost of borrowing, has presided over a near-doubling of interest rates in little more than six months, because the combination of dearer oil and a weak euro has pushed inflation above its target ceiling of 2%. Higher rates have also pushed up British inflation, which had threatened to drop below the Bank of England's target "floor" of 1.5%.

Some believe that the economic impact of the latest spike in oil prices, which is now taking on an air of permanence, has further to run.

More than a quarter of a century ago, oil derailed the global economy when Opec quadrupled crude prices. Some economists believe that history could repeat itself.

Andrew Oswald, a Warwick University economics professor, notes that every previous episode of sharply higher oil prices has been followed by recession - in the 1970s, early 1980s and early 1990s. Recent signs of an economic slowdown in America, he believes, could be the signal that a similar oil impact is starting to show through now.

The most visible effect, meanwhile, is at the petrol pumps. Last week Laurent Fabius, the French finance minister, announced cuts in the cost of domestic heating oil and in motoring taxes to offset rising oil prices. The pressure on Gordon Brown to follow suit by cutting petrol duties will intensify in the run-up to his pre-budget report in November.

JourneymanSmuggling@714#359159/3/2000; 5:43:52

Sir 714,

You're looking in the wrong place for historical data on gold
"smuggling" circa 1933. It's only necessary to know that the
"official" gold price was $32 in 1933 and that it increased
(currently at ~$275) to know that the equivalent of smuggling
gold happened. At the point the establishment admitted there was
an "official" price (the official $40/oz. recently abandoned in
the wierd accounting "revaluation" scam by IMF is one of the corroborating
fossils of that time) and a "market price" and they weren't the
same, the establishment admitted as much, and that they had
completely lost control of it.

Of course, this was an atypical kind of smuggling: Usually
smuggling happens when governments are trying to keep prices of
protected goods high, not low, and they want to keep foreign
competing goods OUT, not domestic goods IN. Attempting to keep
national treasures IN a country when those outside want to buy
them is a similar "reverse smuggling" situation. Thus, you'd
have to look for smuggling of gold OUT of USA.

And since the Federal Reserve/USA Corp. scamsters at that time
had just stolen most of our ancestors' gold, there wasn't much in
the hands of the American _people _for them to smuggle out.
_Foreigners_, however saw the possibilities - - - and took
delivery of that "national treasure" (just stolen from our
ancestors) in ever increasing amounts, and "smuggled OUT" to them
by the Fed Reserve/USA Corp. scamsters. Until Nixon closed the
gold window to foreigners in 1971 - - - and the official vs.
"black [free] market" prices separated, never to meet again.


Cavan ManLeigh#359169/3/2000; 6:52:44

Technical problems prevented me from bringing the marshmallows yesterday eve. I've kept the bag though for our next fireside chat. Have a wonderful day.
SteveHFact or fiction?#359179/3/2000; 6:56:23

This is too unbelieveable...

-- repost

Date: Sun Sep 03 2000 06:45
FoolsGold (Goldman Sachs...Going Under?..Ass Up ?...hope so) ID#334200:
Copyright © 2000 FoolsGold/Kitco Inc. All rights reserved
Home Page Sherman H. Skolnick Email: ...1187 more words.

714@The Invisible Hand @Journeyman#359189/3/2000; 7:20:50

Invisible Hand, the odds to me seem low that gold confiscation would occur in Europe, particularly France, one of the largest holders of gold. From the aforementioned link:

"In the course of the discussion, Morgenthau brought up the problem of France's ability to pay for the planes and other war supplies that France was buying. That led to a discussion of France establishing a foreign exchange control because the French people don't readily accommodate themselves to the Government coming along and controlling their financial affairs."

This is a quote from an interview with Bernard Bernstein, an attorney with the US Treasury Department from 1933-1942, and gives us some indication of the common folks' attitude there towards government. Perhaps it has changed in recent times, but there is no history of gold confiscation in Europe, outside of war, when it was forcefully taken by invading forces, as when Hitler confiscated the gold in the Czech National Bank.


Journeyman, I am puzzled by your attitude.

First you say, "You're looking in the wrong place for historical data on gold "smuggling" circa 1933." I did not know you were aware of where I may be researching for information on the history of gold.

Second, you say, " It's only necessary to know..."
Sir, I am a simple man, a seeker of truth. It is NEVER only necessary to know..."
It is necessary to understand, with an open mind. Always.

Otherwise, thank you for your input. You have given me a line to work on. Currently I am researching legal cases involving miners who sued the government for the right to set their own prices for their product. I will endeavor to extend that effort to uncover any cases that involved the smuggling of gold out of the US.

714 values truth more than gold....

714Correction...#359199/3/2000; 7:44:51 previous post should have read "...but I can find no history of gold confiscation in Europe, outside of war..."

Thank you.

JourneymanForward to the Past @Cavan Man msg#: 35880, ALL#359209/3/2000; 7:48:18

"PS: I do not think we will ever return to a pure gold standard.
This concept of "freegold" is much more logical." -Cavan Man
(09/02/00; 09:27:19MT - msg#: 35880

You could be right. But Keynes didn't really think we'd ever get
OFF the classical Gold Standard, which had evolved over 20
centuries or so! The question is _should_ we return to a
classical gold standard?

Now a little conceptual legerdemain: When was the "classical
gold standard?" Was it during A. the Federal Reserve/USA Corp.
money cartel beginning about 1913? Or was it B. during the "free
banking" era which predated that bankster inspired and controlled
cartel? During the "free banking" era, there was no official US
Government fiat currency; each bank issued it's own competing
redeemable & convertible gold-backed (mostly) certificates.

The answer is B. And the "free banking" era is remarkably
similar to what Trail Guide suggests as "Free Gold." With one
glaring exception: There was no banking cartel to retain monopoly
paper-money issuing power, and as a result, history shows that
inter-bank competition kept the banks in line _very_ well, and I
might add, predictibly kept them in line much better than did the
Federal Reserve.

Of course, in fairness I must admit that the _real_ goal of the
Federal Reserve Act wasn't to keep the banks in line, at least
not from the custormer's viewpoint. It was quite the opposite --
to allow them to counterfeit "redeemable in gold on demand" paper
certificates without the rather immediate "run-on-the-bank"
consequences caused by customer scrutiny on unsafe banking
practices during the preceeding "free banking" period. The
"Roaring Twenties" and the "Great Depression" were the rather
immediate result. Followed recently by the Mexican meltdown, the
Asian Contagion, and the imminent dollar debacle when
"foreigners" finally decide to send BIG-float back home to us.

So, if you accept my analysis, SHOULD we return to the free-
banking "Classical Gold Standard?"

If not, why not?


P.S. If you don't think so, consider the implications of a BOE
target FLOOR for inflation as per the following:

"Higher rates have also pushed up British inflation, which had
threatened to drop below the Bank of England's target '_floor_'
of 1.5%." -London Sunday Times, September 3, 2000, BUSINESS, Oil
Skid Ahead
Times/frontpage.html?999 [&Thanx to The Invisible Hand (9/3/2000;
5:35:23MT - msg#: 35914)]

P.P.S. To the extent people understand they are targeted to be
robbed of a MINIMUM of 1.5% of their fiat holdings per year, I
suggest they will opt, with internet access available to all, for
some version of "freegold" free-banking --- such as available
from --- and without the PLANNED robbery of a minimum
of 1.5% of their holdings inherent in government vapor paper.

Trail GuideOnward!#359219/3/2000; 8:03:23

Hello Everyone,

Sorry I couldn't make it for our hike yesterday! I was waiting for some input before taking up the walking stick and heading out onto the path. Because this is a big American weekend, most readers will have more time than usual,,,,, and some major things are happening,,, a longer walk is warranted (smile).

Will be posting later and joining the main forum.

Trail Guise

CanuckOvervalued stock markets#359229/3/2000; 8:24:35

I have reading and researching for almost 2 years now and have come across this article which, in my opinion explains in great detail and with exacting clarity how and why stock markets are overvalued.

This is a phenominal read, I highly recommend.

Black BladeHistory About to be Repeated!#359239/3/2000; 8:34:10

Source: Reuters

Are Fast-Rising Oil Prices Economy-Killers?
Last updated: 02 Sep 2000 18:05 GMT (Reuters)

By Pierre Belec
NEW YORK (Reuters) - Is it fair to call soaring oil prices economy-killers? Some experts say yes, yet Wall Street has been relaxed about the explosion in oil prices and the prospect that energy may be a expensive item for a long time. Indeed, this year's surge in crude oil prices to a 10-year high has changed the inflation script. Gasoline prices at the pump reached record levels this summer and heating oil and natural gas prices are forecast to go through the roof this winter. With the stock market chugging along nicely, investors seem to be hoping that the economy will be miraculously lucky in avoiding the nasties from oil's spike. Something else has changed. The interest-rate environment is no longer as favorable, now that the Federal Reserve has pushed up the cost of borrowing by 1.75 percentage points to a nine-year high. The central bank's goal is to zap consumer spending, which has powered the economy's expansion to a record 10th year. The concern is that such long-running growth could spark a cycle of inflation. Faced with this new economic landscape, the Nervous Nellies say higher interest rates and oil prices are a bad mix that may slam the economy. "We remain concerned that rising energy prices will spill over into non-energy prices, raising core consumer price inflation and the need for higher interest rates," says Gail Dudack, chief investment strategist for UBS Warburg.

"Certainly, higher interest rates, higher energy costs and slower job growth suggest that the economy cannot keep up its previous pace," says Allen Sinai, chief global economist for Primark Decision Economics Inc. "The 175-basis-point increase of short-term interest rates (by the Fed) and $75 billion to $100 billion equivalent tax hike from higher energy prices must slow the economy. But how much so is not clear," he said. Others cited the psychological negative that soaring energy prices will have on the consumer and producer price indexes through year-end. With the PPI and CPI trending higher, the bigger the odds of more interest-rate increases as inflation-fighting Alan Greenspan, the Fed chairman, turns up the noise about the damage that escalating oil prices will have on the economy.

"You'd never know there was a crisis on Wall Street," says Stephen Leeb, editor of Personal Finance, a financial newsletter. "Like the rest of America, the investment community thinks the high price of energy is just temporary. Prices are not going to come down. In fact, they are going to continue to soar." Oil prices have more than tripled since February 1999, climbing from an unusually depressed $10 to more than $30 a barrel. Heating oil prices galloped to a 10-year high this week and now stand at twice the level of the winter of 1999, at more than $1 a gallon. There's more bad news for heating oil customers. Abnormally low supplies will keep upward pressure on prices. U.S. heating oil stocks are down 39 percent from a year ago and in the Northeast, the world's largest heating oil market, reserves have plunged to 20 million barrels from 45 million in 1999, according to the American Petroleum Institute. In another twist of 'Our gain is your pain' theme, U.S. producers of heating oil are shipping heating oil to Europe because prices are higher on the Continent. Natural gas producers, meanwhile, are asking state regulators for double-digit price increases with natgas already costing more than twice as much as a year ago. The summer wasn't a walk in the park for the automobile-dependent Americans. Gasoline prices climbed to a record high of more than $2 a gallon in some areas of the country. After a two-month slide, gasoline prices are again climbing because of skyrocketing oil prices.

"Most economists have too short of a memory -- or they don't have one because they did not live through it -- but the last period of hyper-inflation in 1974 was started by rising energy prices, which crept into all other goods and services," says Ned Riley, chief investment strategist for State Street Global Advisors in Boston. "Back then, most people excused away the inflation pressure because it was energy-related and clearly OPEC was going to break down and crumble and we would not have an inflation problem," he said. "Inflation peaked around 1980 and it showed that it was not a short-lived thing, but rather a quite significant period of protracted rising prices and wages catching up with the cost of buying goods," Riley said. Rising energy prices also caused or aggravated recessions in the 1980s and 1990s. For the last half-decade, cheap oil may have boosted global economic growth by keeping inflation low. But the great times came to an end in the spring of 1998, when the Organization of Petroleum Exporting Countries, known for its lack of discipline, finally got its act together and started cutting back on supplies. The concern now is that the global economy may be seeing the start of a fundamental change in the oil market. If so, energy costs may stay high for a long time, or until OPEC infighting starts again, or a global recession causes the world to gag on excess oil production. Meanwhile, U.S. inflation gauges have been mysteriously tame this summer, despite record gasoline prices. But the impact of fast-rising oil prices may take up to 1-1/2 years to fully snake through the economy. Sinai said Greenspan does not have as much elbow room as in 1999, when inflation was missing from the radar screen. Last year, the core rate of inflation, which excludes the wildly fluctuating food and energy prices, edged up just 1.5 percent -- under the Fed's tolerance of 2.0 percent. This year, the core rate has risen to 2.5 percent. "Any ratcheting-up from here would put the Federal Reserve in a very difficult position in terms of maintaining price level stability, which is the Fed's stated goal," Sinai said. The explosion in energy prices may be more damaging to the economies of other industrialized countries because they pay for oil in U.S. dollars, which is a currency that is strong against the weak euro. Yet some experts say energy prices are not as much of a factor in this 'New Economy' because technology has transformed how business is done. In other words, technology has rendered historical inflation extinct. Others disagree. In 1990, when Iraq invaded Kuwait, oil doubled to more than $40 a barrel and U.S. inflation shot up to more than 6 percent from 4.6 percent in 1989. Ten years later, can the "Great Technology Revolution" have so radically changed the way the economy works that it will be immune to leaping oil prices? That seems to be the hope on Wall Street.

Black Blade: Really lays it on the line. Stephen Leeb made his mark in the oil run-up in the 1970's. He is bullish on petroleum, energy, and PMs. History does repeat itself, no matter what the "New Paradigm" people say. How many times have we heard throughout history that it's different this time? In the late 1800's it was the telegraph and railroads, the early 1900's it was the automobile and utilities, in the 1920's it was radio, in the 1960's it was "tronics" and synergies, in the 1960's to early 1970's it was the "Nifty Fifty", and now it's tech and dot.coms. But history does repeat itself! Every postwar recession was preceded by an increase in oil prices!

No one took the 1973 Arab Oil Embargo seriously until it was too late. Just like Aesop's fable of the " Ant and Grasshopper", those who recognized oportunity did well and prepared for the consequences. The drones who continued on in blissfull ignorance were caught unawares.

- "Those who do not remember are condemned to repeat it" - George Santayana

Black BladeGeologists anticipate an oil crisis soon#359249/3/2000; 8:41:54

Source: Science News

By R. Monastersky

Cheap oil has helped fuel the economic boom of the 1990s. But petroleum prices will jump drastically in the near future, as the world starts to feel the pinch of tightening hydrocarbon supplies, according to several forecasts.

Some see the shock coming in only a few years, while others put it off for more than 2 decades. Nonetheless, these pessimistic predictions agree that oil production will soon peak and then start sliding downward, even as demand for oil continues to climb.

"For over 150 years, mankind has been used to an ever-growing supply of cheap and abundant energy," says Colin J. Campbell, a former exploration geologist now doing studies for Petroconsultants in Geneva. His analysis calls for production to peak in less than a decade. "The implications of this on industry, world politics, and economics seems to me to be enormous," he said this week at the annual meeting of the Geological Society of America in Toronto.

Campbell and his colleague at Petroconsultants Jean H. Laherrère reached their conclusion by estimating the remaining underground reserves of so-called conventional petroleum -- oil that is relatively easy to extract. Such oil accounts for 95 percent of the 800 billion barrels of oil that the world has burned thus far, says Campbell.

Going country by country, Campbell and Laherrère started with published tallies of oil deposits and made adjustments in cases where industry data indicates that nations had inflated their figures. Extrapolating from these numbers and past oil-discovery rates, they estimate that roughly 1 trillion barrels of oil remain in known and undiscovered fields.

Production will peak, they hypothesize, when the quantity of oil already burned equals the amount yet to be extracted. They expect that point to come within a decade but project oil prices to jump even sooner. The economic impact will occur when nations in the Organization of Petroleum Exporting Countries gain control of the market after production begins to drop outside the Middle East.

When worldwide production starts falling, nations could tap into nonconventional sources of oil, such as heavy oil, tar, and hydrocarbons locked in shales. But these will cost more to extract and process, say the researchers.

Numbers only slightly more optimistic appeared in a March report by the International Energy Agency in Paris, which estimates there are 1.5 trillion barrels of conventional oil in reserves. The agency predicted that production would peak before 2015, so by 2020, demand will exceed supply by 17 million barrels a day.

At this week's meeting, John D. Edwards of the University of Colorado at Boulder estimated that 2 trillion barrels of oil exist in known and undiscovered fields. Though he pushes the production peak back to 2020, his result "should urge us now to consider replacement energies."

Some energy analysts, however, dispute such worrisome forecasts. Thomas S. Ahlbrandt of the U.S. Geological Survey in Denver, who leads an ongoing federal effort to estimate global reserves, finds hope in new technologies that allow companies to pursue oil in the deep sea and other areas previously unexamined. "Since 1990, the area available for exploration has doubled in the world."

Advances are also helping companies after they locate oil. Three-dimensional seismic imaging has improved the mapping of fields, and whereas engineers once bored only vertically through Earth's crust, they now can steer their drilling, even horizontally.

In its 1998 International Energy Outlook, the U.S. Energy Information Administration concluded that "technologies continue to evolve that significantly enhance both exploration and production capabilities." It does not forecast production to peak during the time frame of its analysis, which runs to 2020.

Economist Morris Adelman of the Massachusetts Institute of Technology challenges the practice of estimating oil reserves. "Nobody knows how much hydrocarbon exists or what percentage of that will be recoverable," he says.

Judging from the histories of other geologic commodities, Adelman sees reasons to expect an increasing petroleum supply. "The tendency to deplete [a resource] is counteracted by increases in knowledge," he says.

From Science News, Vol. 154, No. 18, October 31, 1998, p. 278.

Black Blade: That time has come! Time to hedge is upon us.

JourneymanWhich attitude? @714 #359259/3/2000; 8:42:18

714: "Journeyman, I am puzzled by your attitude. First you say,
'You're looking in the wrong place for historical data on gold
"smuggling" circa 1933.' I did not know you were aware of where I
may be researching for information on the history of gold."

J-man: Ya got me there fair and square, podner. Since smuggling
is generally perceived as bringing goods INTO a jurisdiction
against gubbmint edicts, I ASS-U-ME-d you were looking in that
historical direction, rather than at gold smuggled OUT of US.

714: "Second, you say, 'It's only necessary to know...' Sir, I am
a simple man, a seeker of truth. It is NEVER 'only necessary to
know...' It is necessary to understand, with an open mind.

J-man: In general, I agree with you -- I always prefer to
understand as many minute details as I am able and have time for
- - - and believe it or not, I also try to keep an open mind --
because perhaps in that stance, my understanding will evolve.

But in communication and chess, often we have to settle for
heuristics -- short-cuts or substitutes to understanding --
because we lack time or band-width for more. I was merely
observing that persistent price differentials for "the same" item
can only persist, especially in the "modern" world only as a
result of gubbmint intereference in trade. There was indeed a
price differential in gold that persisted, and human nature being
what it is, you can be relatively sure _someone_ was exploiting

Perhaps you wish to quibble with my description of the resultant
exchange activity as "smuggling" since it was done by the same
constituted authorities who call it "murder" if you do it but
"national security" if they do. But because such a quibble is
consistent with the common perceptions which excuse governments
for all crimes, I'll accept that quibble as understandable.

714: "Currently I am researching legal cases involving miners who
sued the government for the right to set their own prices for
their product. I will endeavor to extend that effort to uncover
any cases that involved the smuggling of gold out of the US."

J-man: It's clear you're a heavy dude. Look forward to learning
from you!

"714 values truth more than gold...."

Damn good! Me too. I suspect we're allies.


JavaManGood morning All...#359269/3/2000; 8:58:13

Hello Journeyman, you said..."Of course, in fairness I must admit that the real goal of the Federal Reserve Act wasn't to keep the banks in line, at least not from the customer's viewpoint. It was quite the opposite -- to allow them to counterfeit "redeemable in gold on demand" paper certificates without the rather immediate "run-on-the-bank" consequences caused by customer scrutiny on unsafe banking practices during the preceding "free banking" period."

And let's not forget what is perhaps the most significant feature of the Act, "the Bailout", which transfers the cost of failures when they do occur, because of bank runs, bad bank loans, etc. to the American tax payer!

Bonedaddy, your msg#: 35865...what an excellent question. I say, What an excellent answer! If one is to come away with only a single thought, it is surely this: "In 1913 We The People appointed a ruling class that has since enslaved us by our own greed." Can you say..."Hotel California"?

Al Fulchino, as I go along the journey, all too often kicking and screaming, your msg#: 35843 re: the Refiners Fire, causes me to stop and take pause. Thank you, sir.

Black BladeNatural Gas: The Five Stages to Market Panic by Ilan Goldman#359279/3/2000; 9:01:14

Natural Gas is Going to be the Real Big Problem!

Oil Crisis News from Around the World source: The Coming Global Energy Crisis
•• Aug. 10, 2000 •• SolarQuest® iNet News Service •• (This report by Charles T. Maxwell, Senior Energy Analyst ( This email address is being protected from spambots. You need JavaScript enabled to view it. ) was posted by Ilan Goldman.)
The low natural gas reinjection numbers we have seen so far this spring in the US tell their own tale. We are not on our way to putting three trillion cubic feet of gas, or anything like it, into storage for use next winter. From a low of one trillion cubic feet (and nearly 50 % of that is facility and line "fill", i.e., is not usable), we would be fortunate now to bring stored supplies up to 2.3 Tcf by early next November, the start of the gas consuming season. Given the presumed retreat of the La Ni--a weather pattern, the strong US economy, and the substantial number of new natural-gas-fueled base-load generating plants using combined-cycle technology coming on stream over the next six months, I have had to revise my estimate for peak gas storage down a bit from the 2.5 Tcf number I was using two months ago.
In practical terms, unless the coming winter approaches the highly-unusual, +13% warmer-than usual season we have just passed through, US gas storage numbers are accumulating in a potentially disastrous pattern of insufficient gas to take this country through the full span of cold weather to April of 2001. There is the possibility that we will be forced to allocate gas supplies to private homes, government departments and public institutions, to defense installations and to schools, universities, hospitals, and so on. To the degree that is necessary, gas will have to be allocated away from manufacturing industry.
Hit hardest, in such a period, would be sectors of the economy that use a high proportion of natural gas in their fuel mix such as cement plants, glass works, heat-treating and metal-shaping plants, heavy chemicals, steel, copper and aluminum makers, and so on. Subsequently, problems of insufficient production of component parts and intermediate materials could quickly spread to car and aircraft manufacturers, commercial construction and machine assembly industries. In short, the use of natural gas is so widespread in our manufacturing system that shortages of it for, say, a two month period from late January of 2001 to late March would wreak havoc on many areas of our economy.
It would surely slow national GDP growth, and heavily penalize the profits of many industrial firms. However, all this is theoretical. It really couldn't turn out this way, could it? Yes, it could. And, unless the trends I see in place now of close to 3% incremental natural gas consumption in the US vs. flat or slightly down natural gas production are reversed for some reason I cannot now perceive, the "disaster scenario" outlined above must be considered the most likely one.
Perhaps the most intriguing part of the emerging outlook for a shortfall in gas supplies is not the fact that the crisis has arrived (after all it has been predicted for years, and, up to now, nothing serious has occurred), but rather the point that we are advancing deeper and deeper into this energy problem and no one, other than a few Wall Street analysts, are making any warning noises about it. The media is quiet.
It is either non-believing or unimpressed by the dimensions of what is visible. Government, at all levels, is complacent. There are no public outcries even from executive figures in gas consuming industries that are heavily dependent on the fuel. We are becalmed in a sea of silence on this issue as we pass into summer. The weather is fair, and the "livin’ is easy". And, when winter comes? It's just another season, following summer. Nothing to worry about.
However, a few important people in the system quite plainly see the outlines of what is to come. Their traders are bidding up the price of natural gas dramatically (now 100% higher than the last year's $2.10 per mm btu price at this season) in order to secure supplies for storage now - supplies that may not be available next February when many industries could be facing downtime. These gas buyers are doing their homework. And, it is their lead that investors should be following.
Still, I am ahead of the story in my surprise that the media has not yet picked up on the coming crisis. For over the years (and I have a good many of them), it has been my experience that there is a repetitive cycle to how these "threats" to the system are understood and acted on by different parts of our society.
In the case of the emerging shortage of natural gas, to take the example before us, the first group to identify it was the industry specialists (apart from many natural gas production company managers who had spotted it years in advance), in particular a small group of Wall Street analysts who were doing their weekly storage sums and saw that behind the façade of last winter's warmth was a highly worrisome picture of an industry failing to convert its greater effort to find supplies (some 650 rigs drilling for gas this year vs. some 380 drilling for gas last year at the same time) into rising output figures. Across the board, analysts in the oil and gas industry are now convinced there is a substantial problem ahead.
This is Stage One, and it is nearly completed.
Stage Two is the tricky one. Analysts must convince their portfolio people that the problem is real, and direct them to what areas of the market to buy and what to avoid to maximize investment returns. But, portfolio managers are resistant to these arguments (they have heard them before) . So, only a few comprehend and accept the fundamental story, then take action. But, those brave souls start building upward momentum into the limited group of gas producing stocks that can be bought in size by the institutions (APC-53, BR-45, UCL-38, APA-60, DVN-60, and EOG-32, in order of descending capitalization) . Then, that section of institutional portfolio managers which cannot yet grasp the play itself but which is attuned to moving into stock groups with rising upward momentum in the market (for whatever reason), can be expected to swing onto the story. In this case, the natural gas producing group has recently come up on everyone's charts as being in the lift-off stage.
Finally, the remaining portfolio managers, still not convinced, are forced to act in order to maintain their performance rankings, and they belatedly enter the game.
We are better than halfway through Stage Two now, as I make it out. The fundamental players are "in", and the momentum players are starting to react. But, as to a general capitulation of portfolio managers to the natural gas shortage concept, that will be reserved for quarter-ending rallies in June and September yet to come, if I am reading the tea leaves correctly.
As I have previously noted, the media have not yet focused on this problem. That will be Stage Three.
There is a substantial story to tell here. Outages in industrial plants across (mainly) the Midwest and Northeast, with tens of thousands of workers staying home, is a major development. When TV reporters, newspapers and magazines eventually pick up the trend, perhaps several months will have passed and the situation may well be seen as more grave. Having professionally worked through the period of Energy Crisis I and II, it would not surprise me if the media termed the new "threat" as Energy Crisis III.
However, I don't think that this natural gas problem will have the public impact of the first two crises. Lack of gasoline (read mobility) and long waiting lines to obtain it may be more effective in influencing the American psyche than 100 industrial plants being shut down. However, Energy Crisis III is a convenient name, and at least it has the advantage of catching people's attention. Stage Three is a big step in the development of a crisis mentality in the market for gas-related stocks. But, we are not yet into this stage.
On the basis of widespread (future) media attention, Stage Four would involve governmental reaction to this, on all levels. By late summer and early autumn, we will be into the late days of the Clinton Administration's time in office. It certainly could be a political problem to admit that something this important had been allowed to develop, unbeknown to all, into a significant threat to the system.
On the other hand, the issue cannot be easily swept under the carpet because its effects are too close to breaking through into public consciousness. Moreover, the Gore-Bush pre-election debates should be in full swing by then, and Bush would be well guided to raise points, such as this, in which he has had some practical experience and for which no anticipatory consideration has been made in the non-existent national energy plan that President Clinton never formulated (nor did any other previous US president). As I see it, the Government will be forced to confirm the size and scope of the gas problem, and will further alarm industry by referring to the possibility of gas allocation on a national, state or local level.
Stage Four could well occur in September and October of this year. Its outcome would logically lead to Stage Five, the final rush to panic and overexposure. This would be the result of heightened media attention, followed by effective governmental confirmation that the problem was real and might not be easily fixed except through significant sacrifices on the part of the public. Stage Five would represent a general recognition that we could be entering a difficult period of fuel shortages and that the effects might be more serious than mere "inconvenience". It should be noted that under any allocation formula, those organizations and industries that could switch from natural gas to propane, butane, heating oil or residual fuel oil would be asked to do so. And, subsequently, these products might themselves run short under the impact of unexpectedly high demand. They might also advance dramatically in price.
Stage Five would also imply a highly visible case for investing in companies that might be best positioned to assist in solving the natural gas shortage. The final run of small investors’ funds into the natural gas producers might represent a "tsunami" of money seeking entry to a play already suffering from limited capitalization, thus forcing gas producer share prices into the "blue yonder".
Stage Five, perhaps occurring in mid-to-late autumn, would, of course, be immediately followed by the actual onset of cold weather. By then, investors would also have full knowledge of the country's three-quarter-filled gas storage position. Early outages might start to occur, for coincidental reasons, in late January of 2001. However, the main weight of the shortfall would be expected to fall when different major storage points in various consuming regions of the country ran out of supplies in February and March of next year. That is when companies, facing closedowns for lack of fuel, should be most pressured to bid for gas to avoid the termination of output and temporary disbandment of their labor forces. So, we have assumed a peak to natural gas prices in February of 2001, probably in the $6.00 - 7.00 per mm btu range following a prolonged period of cold weather.
This could be the high point of fear, when many businesses could be driven to uneconomic decisions just to survive.This would logically be the exit point for experienced investors. With all five stages of the play completed, and the axe of cold weather fallen, this would be the time to collect your chips and leave the game. Conditions will likely not be so desperate or so uncertain again for some time, experience teaches us. Of course, the natural gas problem itself will not suddenly go away. It will take many seasons to find an answer to it. But, we will solve the problem, as we always do. And, as we move through the crisis and consider our options, all kinds of answers will present themselves. Meanwhile, the stock prices of natural gas producers would be expected to start down as early desperation gave way to later resolution.
What will be the eventual answers to the natural gas shortfall? Think about a higher range of prices, application of additional technology, new generations of sophisticated drilling rigs, more LNG receiving terminals, and what can come south from Alaska.

Black BladeOil Price and Depletion - Very Interesting analysis!#359289/3/2000; 9:07:04

Oil Price and Depletion by iNet News Manager
Oil Crisis News from Around the World source: The Coming Global Energy Crisis
•• June 6, 2000 •• SolarQuest® iNet News Service •• Movements in the price of oil may be delivering a message beyond the simple balance of supply and demand. [by C.J.Campbell]
Starting from a low of about $10 in February 1999, price rose consistently in a well defined band to a High of $34 around March 10th 2000. This rise may in fact have represented the unseen iron hand of depletion rather than any particular OPEC action. The High triggered a certain panic in Washington and general outrage in the USA, even with calls for military intervention. The Secretary of Energy then toured the world trying to persuade the producers to produce more. His efforts were met with sympathy, of which the market got wind and started marking down the price in anticipation of the critical OPEC meeting on March 27th. Five days before this, the US Geological Survey made (or was persuaded to make) a Press Release of an unfinished report that not only exaggerated the size of the undiscovered and the scope for reserve growth but increased radically the potential of the three countries of North America. Observers may be forgiven for concluding that this was politically motivated to undermine OPEC confidence.
OPEC did make a conciliatory gesture, declaring a policy to hold price in the $22-$28 band. Significantly, Iran declined to sign. The reason may have been - not so much that it disagreed with the OPEC position - but that it did not want to admit that it could not physically meet its quota, which would have diminished its political stance in the region.
Oil price fell to about $25.50 by the March 27th meeting, but then strengthened briefly because the OPEC offer was not seen as being generous enough. Oil price then plunged again, reflecting the arrival of a large number of tankers, which had been dispatched previously to give weight to OPEC's gesture. Some of these tankers drew their cargoes from floating storage in the Gulf rather than increased production.
Oil price bottomed at about $21.50 around April 10th, when the impact of these deliveries passed, and began to firm hesitantly until the end of April. It then became evident that supply was not going to be enough to both meet demand and replenish depleted stocks. Price then soared to $28, and began to breach the OPEC ceiling, at which point it also entered again the long term band that has been developing over the past 12 months.
So far as the movements over the next few months are concerned, we may speculate as follows.
Price will dither around $28 to see if OPEC will or can increase production to hold its declared range of $22-28. Within a matter of weeks it may become doubtful if it can. Price will then pass through the emotional $30 barrier. That will trigger another political spasm in Washington, and new calls for military intervention will be voiced. There will be pressure on Norway, Mexico and Venezuela to increase production to counter what is wrongly perceived in certain quarters as the Muslims holding the West to ransom. There will be a lot of rhetoric of a very damaging type. It will soon however become evident that these three countries cannot physically increase their production rapidly.
We should also not forget the position of Russia and the Caspian. Russia is now facing serious food shortages, which force it to increase imports. This is a heavy burden on its foreign exchange, almost all of which comes from the export of oil. By the autumn, the harvest will be in reducing the pressure to export oil, which is in increasing demand internally as the domestic economy improves. Falling Russian exports will be further pressure for higher world oil price.
It seems that the Kashagan East well in the northern Caspian has made a discovery of about 10 billion barrel (another Prudhoe Bay) in an immensely expensive operation. It is however a solitary huge structure and does not herald further major discoveries capable of having a world impact. The potential of the Caspian has been generally exaggerated in a pitiful example of wishful thinking as the West dreams of countering Middle East control. Confirmation of this discovery may however cause a temporary emotional fall in oil price. It may also trigger further tensions about the ownership of the Caspian. Russia and Iran have claimed that it is a lake not a sea and that it is owned jointly by the contiguous countries. Kazakhstan and Azerbaijan naturally claim that their offshore extensions belong to them. Russia or other neighbouring countries they have a lever to impose their will as the pipelines have to pass through their territories. The US will likely want to get embroiled in this affair with the carrot of financial help and the stick of military intervention, possibly related to the Chechnyan civil war, but it may end in another failed policy.
Gradually the market will perceive that there is neither an OPEC ceiling nor a roof above it. Prices will soar into the $40s. That in turn will trigger a stockmarket crash and another Asian recession. By year end, all of this may have curbed demand sufficiently to allow oil prices to fall back to the mid $30s. In any event, the days of cheap oil are well and truly over.
The US situation seems to be particularly serious because this oil crisis will coincide with serious gas shortages. Gas depletes very differently from oil due to its higher molecular mobility and recovery factor. Instead of following a bell curve, production is capped by the limits of the pipeline and the market. In an unregulated market, such a plateau runs its course with few signals that it is about to end, it being often cheaper to produce the last cubic foot than the first. The plateau ends not in a slope but in a cliff. The United States may now be looking over the edge of this cliff.
For all of these reasons, the new President will face some kind of economic discontinuity.
We are not running out of oil, merely reaching the peak of production. Peak is not the end of the world. But the perception that the fuel that has driven the economic prosperity of the last 50 years is getting expensive and in short supply will have a radical impact on business decisions and investment strategies.
It takes no feat of intellect to see these patterns and pressures. But it is a picture that no one wishes to see, which explains the scale of denial and obfuscation. In this context, we may note that the President of the American Association of Petroleum Geologists (which is colluding with the USGS) launched an editorial against a study of depletion in the May issue of the AAPG Explorer. He sought to discredit it, but in fact confirmed it when he stressed that the production of non-conventional oil and gas could be stepped up in North America. This is expensive stuff, and no one produces it if there are abundant supplies of cheap conventional oil. In other words, the hoped-for growth of non-conventional oil and gas implies the peak of conventional hydrocarbons and a radical increase in price. But why does the AAPG not discuss the obvious implication instead of pretending that there is a seamless transition? Incidentally, the new USGS study claims that new discovery will amount to 724 Gb between the years 1995 and 2025. It means that it is already short almost 100 Gb, and cannot possibly catch up with its totally implausible target.
We can expect this denial and obfuscation to continue, but while it misleads many, it also offers great investment opportunities to those who are not deceived and have the courage to plan for the inevitable.

Black BladeNothing Wrong with a Bit of Insurance and Preparation. - Irregardless of How it all Plays Out!#359299/3/2000; 9:12:50

In a nutshell - Now would be an excellent time to prepare for the coming energy crunch. Prepare as some did with the percieved threat of Y2K, get stocks of necessities, Gold and Silver, good defensive stock positions, and hold on for the wild ride. If you prepared for Y2K, then you're already a step up on everyone else. Nothing wrong with preparation. Remember Aesop's fable - "The Ant and The Grasshopper"

Going fishin' - later, Black Blade.

Knallgold@Trail Guide (or is it now guise??)#359309/3/2000; 9:26:42

What is your take on the intercontinentalexchange?This seems not the new physical market we are hoping for (no smile).
But it seems they were in a hurry as their webpage has a lot of bugs built in.

HI - HATBlack Blade___Town Crier__________Sovereign Individuals#359319/3/2000; 10:05:34

Civil Defense Stance Is Exercise In Common Sense

The running of each household, as if it were a soveriegn little country, is by far, in addition to the holding of precious metals, the cement that is needed to enhance and safeguard your lives, fortunes, and future.

Everyones level of dependance on the "system", going just right, needs to be looked at very carefully.

This is the time to get a grip on procrastination, and lay in supplies and fine tune operating proceedures to ensure
that you will continue to wake up and smell the coffee.

SHIFTYGold Markets#3593209/03/00; 11:05:36

Is the rest of the world trading gold tonight and tomorrow?


Mr GreshamStrad Master #35907 -- Your Concert#3593309/03/00; 11:50:21

You posted just after midnite -- are you scheduled for Sunday (link above -- "Sundays at Six: Pacific Trio"), or Monday?

Trail Guide to post later today -- oooh boy -- only (almost) thing that can keep me inside on a sunny afternoon.

Strad MasterMr. Gresham#3593409/03/00; 11:59:37

Yes, that's right. "Sunday's at 6" is the name of the show. The Pacific Trio is the name of my Trio. The concert is today -Sunday the 3rd - at 6 PM. Hope you can listen in. It's good luck that I looked in on USA Gold this morning to see your message. Thanks for providing the opportunity to make things crystal clear. See y'all later...
Strad MasterMr. Gresham#3593509/03/00; 12:10:38

Itr was still Saturday for me when I posted. Sorry about the confusion.
ShermagJourneyman's two Questions of the Day#3593609/03/00; 13:16:53

Journeyman posed these two excellent questions yesterday:

QUESTION 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

My response:

1. Inflation, properly defined as an increase in the money supply, is held in check by the convertibility to gold. Energy price rises do not create more gold, and since the currency in question is tied closely to the available gold on deposit, the money supply is more or less held stable.

Inflation, otherwise defined as a general rise in prices, would not occur, as there would be a corresponding price decline of other goods. Sort of like saying the same amount of money now chasing some goods (energy) more than others.

2. An energy price rise , first of all, would reflect some change in the market condition, such as a depletion of more easily exploitable reserves and a shift to more costly energy sources, some technological development that increases demand (the jet engine spawning a huge air travel industry for example), or possibly some shift in consumer preferences (the proliferation of air conditioning comes to mind).
This rise in prices would cause an adjustment in the economy on numerous fronts some of which are:
a) As mentioned above, there would be a shift away from consumption of other goods.
b) There would also be a decline in the currently established consumption patterns of energy. People would drive less for example.
c) There would be capital invested toward more efficient energy utilization (building insulation standards increased).
d) A shift in capital would occur toward exploration for more energy, and more complete utilization of existing reserves.
e) There would be a shift to less costly energy sources.

In short life would go on, and the economy would absorb the reality of more costly energy in the least wasteful manner.

BTW, I thought JMB had a great response, especially to the second question (lol).

ShermagBlack Blade, Kyoto Treaty as good as dead#3593709/03/00; 13:42:20

I have believed since its inception that Kyoto never would be implemented as agreed. Too costly both economically and politically. What concerns me greatly is the opportunity it provides for our governments to do that which they do worst. Among the possibilities:
- Create new expensive and permanant bureaucracies, enlarge the existing ones.
- Impose a new or increased tax in the name of providing the correct incentives.
- Impose more regulations on all.
- Increase its redistributionist activity.
- Increase its direct activity in the market.

No good will come of it.

Gold Trail UpdateThe Gold Trail Discussion has been Updated#3593809/03/00; 16:27:21">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
JavaMan(No Subject)#3593909/03/00; 17:58:55

Some time ago, I posted about a visit I made to the Olin/Flinchbaugh facility in York, PA where they manufacture the "Tank Killer" armament that was used successfully in Desert Storm against Iraq. It's a high-speed round of depleted uranium that goes through tank armor like a hot knife through butter.

The link above takes you to info about a "minor detail" I wasn't aware of until now. Thanks to GoldbBrick at Kitco for the heads up.

CoBra(too)@TIH - from the "Austrian" #3594009/03/00; 18:16:52

Well, Sir, we've all probably read everything there is to read about and into the latest FAZ articles, including the really great comments by Reg Howe and others on the main gold fora.
I personally have been expecting a second tranche, leg or whatever on the WA and posted here and on the cafe chat some weeks back about my notions. Well, it did happen, since the feeling is it was BuBa (Bundesbank) sending this volley, aimed at FED and TSY, aagainst further gold- and as a consequence $-manipulation. Though BuBa wouldn't go it alone anymore - meaning they would have covered their back at least by other leading euro cb's and ECB (id est WA).
To my knowledge, Europe never officially confiscated gold, nor madethe acquisition of at least old and/or bullion coins illegal - though in some countries you couldn't buy bullion bars, or say Krugers for different reasons as economic boycotts -vs f.i. SA, or in era's of foreign exchange regulations, like post WWII, or tax or tariff considerations - otherwise the acquisition of gold and gold coinage by the public was mostly eendorsed and wellcomed by european states throughout history, since it was and still is a profitable business to the usually still gov. owned (not anymore everywhere, though)mints and the tax man.
As the typical last century European has lost all his currency savings at least twice, gold was always a part of the overall asset equation for the more affluent and may still be, though maybe "restricted" to the older generation now, as our stock markets are not too far behind the US X-changes.
In the aftermath of the Soth East Asian and Russian crisis there was a noticeable pick up in bullion sales throughout Europe, never followed by Y2K or any other concerns. So the complacency over here is matching the US, with the exception of ever lessening acceptance of the euro.
Being a contrarian (or hoping to endure) I should pick up some more euro currency (smile), though I'd rather pick up some more gold - even if it's still at $-inflated "contract"
value. The difference may prove to be negligible - x-change some more of your respective currency for reality - best cb2

CoBra(too)... and I forgot to add somewhere in last post -#3594109/03/00; 18:24:48

Nor was the posession of gold illegal - at least to my knowledge - even under the Hitler regime I'm not aware of such a measure - for the "general" public, if there such left.

CanuckHussein has cancer and is dying#3594209/03/00; 18:29:22

Saddam Hussein has lymph cancer, trouble breathing, memory loss, poor eyesight and lack of concentration. Sources say he's been like this for a long time.
Mr GreshamFOA -- The Trail#3594309/03/00; 18:33:11

FOA -- I'm no expert on the original Mr G, since I picked my name in the Y2k bank run context last year, and I've had to learn a lot since then.

But, I think what he said HAS held true, and you had it reversed: "Where government decrees it to be used as a legal tender, the bad money drives good out of circulation."

In this case, people are stashing their gold, a la Martin Armstrong (maybe not right in their hall closets, however) and spending, first, their credit e-money, second their e-bank deposits of their paychecks, and third, the paper green stuff that might survive the first two categories.

Of course most of them have no gold, but, instinctively, they're loading up on credit purchases (houses, cars, etc.), spending each others' IRA's out of those money market funds, and generally waiting for the whole house of cards to come down (gotta go - guests -- put in appearance so I can next catch Strad Master on Internet radio in 25 minutes, too -- OK?)

JMBI like a good mystery...don't you?#3594409/03/00; 18:37:06

It's either a mystery or I'm getting older faster than I realize.
I hit the Gold Trail link as instructed...sure enough there was Trail Guide's latest post...but I'm feeling a little pang of hunger, so it's off to the local eatery for a bite...I return with a full belly (thank God...if Sen. Lieberman can do it, so can I) and much to my consternation the Trail Guide's post has been stolen. I'll tell you whom I suspect...KITCO, yep, JavaMan used Gold Brick's kitco post so they've retaliated...the nerve of those guys!
It's either that, or my judgement is being affected by a real bad gas attack (Steak Cesar Salad with Onions and Garlic Bread).
Now it could be that I'm hitting the wrong buttons...I need some help, please. Where do I go to see the Trail Guide's latest post and how do I get there?TIA

R Powellderegulation of Chinese gold market#3594509/03/00; 18:38:13

Hope I got this link right.
Article is called, Golden Comeback Launched
Happy holiday to all!
PS I found this while looking for news of the Chinese cotton crop which I've been discussing at

JavaMan(No Subject)#3594609/03/00; 18:44:44

CoBra(too), your " x-change some more of your respective currency for reality"... is a great one liner!

JMB, the link works for me so I think the good folks at Kitco are in the clear. If you go to the Trail page, hold down your Shift key, and Refresh your browser, all should be ok, no?

JMBJavaMan#3594709/03/00; 18:53:35

Thank you so much, Sir.
To Kitco: Sorry guys, my bad.

canamamiFurther Inquiry re the Stranger#3594809/03/00; 18:57:50

Has anyone heard from the Stranger, in reply to private e-mails. I have sent him a couple of messages lately, but no reply. Let us hope and pray he is alright. His e-mail address still appears to be functioning, so that is a positive sign.
The Invisible HandGold Confiscation in Europe#3594909/03/00; 19:01:51

CoBra Too and 714,
Thank you for your reassuring words.
I'll definitely sleep better now.

Trail GuideReply#3595009/03/00; 19:18:29

Mr Gresham,

Ha! Ha! I never thought it would be picked up the way you saw it. Yes, I meant to imply that "it was driving bad money into circulation"! You are right, I put it in a context that could be easily seen as reversed. Hope everyone can understand it?

When I say Gresham law is not working; I wanted to point out how the dollar price is not reflecting this "good money" (gold) accumulation as it drives our fiat dollars into circulation. It's doing this because what we as Western Style investors assume to be gold is really paper.

Oh well, it's my poor use of thought direction.

I think the waiting is finally over. Everyone is accepting that crude is going higher and not from any fundamental reasons. This surge in perceived value of oil has become so blatant that it's obviously not just from demand. This will play out as a fall in all currencies relative to oil, but once it breaks $35 to $45 (or sooner) the dollar will begin to roll over. That's because producers are prepared to
bid the excess profits for both gold and Euros! By the time crude gets that high the US trade deficit will be truly explosive,,,,, and no one is willing to guess the impact.
Further, without a corresponding plunge in perceived gold values, using paper gold as the measure, the dollar will be going into it's first real free fall. I think Europe will allow a swift default cascade in gold banking, but only because they now have major buying support shaping up and it's being voiced from dollar reserve holders. That support will be aimed squarely at spot physical. A prospect that was not legitimate with cheaper oil.
We shall see!

thanks for your comments on my post, I'll try to word things a little more clearly.

Trail Guide

SHIFTYcanamami #3595109/03/00; 19:35:16

canamami: did you check his web site? I don't have the address but I remember he posted it one time with photo's and family stuff. There may be something there .
Trail GuideComment#3595209/03/00; 19:38:31

Cavan Man (08/29/00; 18:36:09MT - msg#: 35715)
Trail Guide/FOA...RE: ix What do you make of the OM bid for LSE as reported in the FT today?

Hello Cavan Man,

I think OM Gruppen would be a better platform for Euro Land trading. They are way ahead of the rest. It makes no difference who takes the lead politically, in developing future market infrastructure. What counts is the whole Euro thrust at the moment. Who buys or merges with LSE is not all that important, OM will be a European player whether alone or with another. So will London, they just have a hard time digesting that fact right now.

I bet shares will be quoted in Euros. What say you?

Trail Guide

Al FulchinoTrail Guide#3595309/03/00; 19:38:42

I many have missed a response to the post below, I have searched a couple of times, but to no avail.. However....any comment would be appreciated.

Al Fulchino (08/21/00; 19:16:50MT - msg#: 35277)
Trail Guide
Could you flesh out in further detail the last two sentences of the paragraph from your most recent posting. And one other point, if the long and shorts *already* scramble to settle, why isn't there more price volatility. Thank you.

"A fraud? To say that the shorts have sold a metal contract that they cannot deliver against,,,,,, holds no more meaning than the fact that the longs cannot pay for metal they have contracted to take! As proof, watch as both sides always scramble to close out the majority of contracts for cash before they must settle. Betting on the price movements of something is not buying real wealth and running from a contract should prove it in the open to changing "Western Thinkers". Waiting for the shorts to be had, in order for your paper investments to gain value may be a long wait indeed. If this continues further, and now with the blessing of Europe, it's the paper longs that may be had as the
shorts are let off the hook as the market is destroyed!"

BonedaddyBlack Blade#3595409/03/00; 19:46:52

Keep it comming man! I am building my own archive of your posts on the energy situation. Your post are important to me for (at least) two reasons. First, I'm trying to warn my friends and family that inflation will soon ravage America again. And second, I loathe revisionist history. By printing your well sourced posts I am documenting the causes
for later generations. Let's face it, if Bush wins the election, the economy is still going to hell in a hand basket. The Clinton News Network (CNN) will be sure to hang everthing on the evil oil men, Bush and Cheney. It won't be long before the text books pick it up.
To others here at USA GOLD: Consider printing and filing some of the other excellent posts that appear here.
What if something were to happen to the on line archives?
Many of the statements made by BB, Another, FOA, Stranger, Aristotle, et al, will make much more sense after the pages have yellowed with age. Jessica Fletcher won't solve this mystery in a half hour program. And the carnage may last for generations. This is truly the information age, if we live in ignorance, it's only because we refuse to see. You shall know the truth, and the truth shall set you free.

SHIFTYKitco Chart#3595509/03/00; 19:56:39

Gold up $1.20 tonight!
OverHerdHello To All#3595609/03/00; 20:13:44

Strad - BRAVO, BRAVO -Unfortunately I missed the beginning due to the need for an over 4k update. What I did get to hear sounded wonderful, thank you for this Sunday night treat.
MK - I hope Marie and her husband are feeling better and a speedy recovery is in the future.
Trail Guide - Did I miss any of your posts I noticed that 1-5 and 31-33 are not represented, I have a hard enough time understanding what is happening without missing puzzle pieces. I imagine as long as I continue to call Mr. Kosares on a periodic basis I will be safe.

JourneymanThe truth shall set you free @Bonedaddy#3595709/03/00; 20:18:35

"Know the truth and it will set you free. But first it will make you damn mad." -M. Scott Peck, M.D.

Regards, J.

Chris PowellAnother blast from Frankfurt at market manipulators#3595809/03/00; 20:27:45

European central bank officials are waking
up to market manipulations in the United
States, and GATA is the alarm clock.

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

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

Cavan ManTrail Guide 35952#3595909/03/00; 20:30:12

You know I agree. How's your #1 Iron?
Buena Feblack gold#3596009/03/00; 20:39:23

Saudi prince to meet Clinton for oil price talks

Abdullah bin Abdulaziz, Saudi Arabia's crown prince, was due to meet with US President Bill Clinton later in the week to discuss effective methods of lowering the international price of crude oil, according to local media. Prince Abdullah, who effectively runs the kingdom, arrived in the US to begin a one-month tour. The two leaders were also expected to discuss the Middle East peace process and Iraq. Mr Clinton earlier called on oil producers, including Saudi Arabia, to maximise their output capacity in a bid to calm escalating prices to somewhere between $20 and $25.


Trail GuideReply#3596109/03/00; 20:39:50

Al Fulchino (09/03/00; 19:38:42MT - msg#: 35953)
Trail Guide
I many have missed a response to the post below, I have searched a couple of times, but to no avail.. However....any comment would be appreciated.Al Fulchino (08/21/00; 19:16:50MT - msg#: 35277)
Hello Al,

I often write or refer to the Comex and their future contracts. But in reality, I'm just as much pointing out the whole system. With that in mind:

Every month or so a very large collection of open interest builds up in a leading futures month. From almost as long as I can remember, the vast majority of these contracts are worked off thru either cash trading or cash settlement. This is what I refer to as "running from a contract" because
they don't want physical delivery. There is nothing wrong with some of this because a portion of these traders use the system as a hedge. But, Comex trading is nothing compared to the whole world of gold paper and all the physical traded doesn't require this much hedging. Obviously, by a wide margin most of these transactions do not involve the transfer of bullion. As I said before, by trading and settling in cash, this huge paper pool has created not only an illusion of physical demand but a much larger illusion of physical supply. It is never tested for price validity by settling in physical and does understate the true price of bullion. Therein is the system for controlling the perceived value of gold. In this format, supply can equal and overcome any demand built on currency inflation because the supply is a function of the same fiat liquidity.

But this is yesterday's news. That period is ending with this end run from oil! We should prepare for the destruction of our dollar gold markets now.

Further, I fully well expect the entire bullion banking sector to be frozen by official decree and settled in an understated cash price. Even as the physical trades onward and upward. This will devastate many mines, investors and hedgers but save the banks. We shall see!

Trail Guide

Trail Guide(No Subject)#3596209/03/00; 20:49:46

Cavan Man (09/03/00; 20:30:12MT - msg#: 35959)

Cavan Man, I do try to use a #2 iron but it's rough on my ego! (smile)

Buena FeTrail Guide (09/03/00; 20:39:50MT - msg#: 35961)#3596309/03/00; 21:09:33

Further, I fully well expect the entire bullion banking sector to be frozen by official decree and settled in an understated cash price. Even as the physical trades onward and upward. This will devastate many mines, investors and hedgers but save the banks. We shall see!



Buena Fe(No Subject)#3596409/03/00; 21:24:39

Trail Guide, do you percieve that the fuss over Jerusalem and its holy sites (et al) has any bearing or influence on the present currency/banking/power conflict before us? Men have fought over ideologies probably just as often as wealth, and the conflict over Jerusalem is truly much older than the present currency one.

Also, big shindig going on at the U.N. this week, 185 leaders form around the world comin to visit and all. I hear that Bono (of U2 music fame) is presenting a petition signed by some 21million people, supporting further debt relief for the poor.........go Bono GO! I'll vote for you.

Buena FeEvolution?#3596509/03/00; 21:46:49{AFE5369A-1A96-11D4-B984-009027BA226C}&doc={D8097BF3-6F80-11D4-B993-009027BA226C}

Life for Britons Beyond the Euro May Soon Be Coming to an End

By Christian Schubert and Bettina Schulz

Will Britons now finally be forced to join the euro? This debate has been re-ignited by outside sources. Japanese carmaker Toyota just announced its intention to renegotiate current contracts and stipulate in all new contracts that its British suppliers must invoice solely in euros. Otherwise it might consider closing its production sites in Britain.

The exchange rate has made Toyota's British production location no longer competitive. ...............

Trail GuideComment#3596609/03/00; 21:48:34

Hello Buena Fe,

I'm sure you will keep your soul, my friend. I think mine is still safe,,,, I think? (smile)!

But, truly,,,, our gold bankers were only following behind a political wave that's changing things. No different than the hard money crowd that has tried to follow behind a gold move. One group was on the correct side and the other was on the wrong side. Nothing more.

How many local and international traders you know that would not have shorted gold for all they were worth if they knew how the game was being played? Even with a pro hard money stance, I bet they would have borrowed all the gold a CB would lend,,,,, and sell it down with the best of them. Further, how many big bankers do you think are personally very long physical,,,, even as they voice their evil projections of gold being worthless?

It's no different on the mining front. Most (but not all) investors went long shares or pumped money into the business for the leverage it could produce,,,,,, not the wealth preserving qualities so many of them proclaimed of bullion. The same as if someone tells everyone that will listen how their life will not be the same without a new ford,,,,, then he goes without a vehicle himself to allow the purchase of ford stock for himself?????? The examples of these traits are all over if we look for them. Not just in the possession of bankers!

Every so often a change comes along that makes old fashioned ideals and concepts look like something only a genius could understand. Yet, it's just recognizing where we are on the trail and doing what has to work instead of what will work the most.

Physical gold, as simple and stupid that holding may be,,,,, will outwork all the brains on our planet. Like keeping cash in a shoe box,,,, under the bed during the great 1930 bank failures,,,,, the leverage in gold today is a thousand times greater.

I ramble on.
Trail Guide

Simply Me@ Trail Guide, RE: Is Euros for Oil a done deal?#3596709/03/00; 21:54:04

Hello! Lovely day for a hike! Thanks for pointing out the unfamiliar flora and fauna along the way!
I have a question. Maybe I'm just dense, but the Euro and the Dollar cannot be equal world reserve currencies unless they can both be traded for oil, right? So, when was the Euros for Oil trade deal announced, or did I miss it?
Thanks for your time and your patience,
simply me

Trail GuideComment#3596809/03/00; 22:07:57

Buena Fe (09/03/00; 21:24:39MT - msg#: 35964)
(No Subject)
Trail Guide, do you percieve that the fuss over Jerusalem and its holy sites (et al) ??

Buena Fe,

Oh, It's all part of our travels through life. Jerusalem has and will always be a problem. I think it will be many generations before that area is finally worked out.

On your note about Britons and the Euro? Ha! Ha! Life is good! I'm getting closer to winning my dollar bet from Michael K.!

Trail Guide

Buena Fetin boxes and new beginnings#3596909/03/00; 22:11:38

Ramble on my (our) friend TG, these discussions are as satisfying as a fine, dry wine during a feast of tender lamb, garlic mashed potatos, sauteed snowpeas/onions and peppers! (apologies to any vegetarians among us)

My mother holds a family hierloom (?) that I'm sure many here would enjoy to look at and ponder its story.....a small tin box......hand painted......that held her parents (my grandparents) mobile-wealth (gold jelewry etc.) as they fled Russia 1919.......everything else was lost....but what was in that box bridged all chasms and enabled a new beginning!

lawTrail Guide: Questions concerning your recent posts!#3597009/03/00; 22:12:07

First of all, a very WELCOME appears you had a most fruitful and enjoyable sojourn.

I too, have had a very busy summer and have not had the available time to continue my previous and consummate lurking and occasional posting...but I'm trying to catch up with the thoughtful and intelligent commentary of the many wonderful posters who frequent here.

My Questions:(08/20/00 msg#30)
You stated, "If this continues further, and now with the blessing of Europe, it's the paper longs that may be had as the shorts are let off the hook as the market is destroyed!"

After having read Howe's excellent commentary and also Murphy's, is it your implication that Deustch Bank is absorbing the derivatives in order to prevent Euro "bleeding" or is there another context to this statement?

Also: (09/03/00 msg#34) Concerning the "two ways (or a combination of both):"..."one or two government and /or private entities to pull the cord"...or..."The price of oil rises until price inflation can no longer be contained."

In the first way: Who would have the INTESTINAL FORTITUDE! IN THE "OPEN"! To "pull the cord"???

In the second way: Will the oil producers be able to withstand the political pressure that will undoubtedly be placed on them?

Strad Master: I was very disappointed in missing your problem---not enough network bandwith???

Black Blade: Very fine commentary!!!

ORO: Where are you??? Miss yours!!!

Rgds to ALL

Trail Guide(No Subject)#3597109/03/00; 22:13:19

Simply Me (09/03/00; 21:54:04MT - msg#: 35967)

Hello Simply Me,
It just could be that it's being discussed with Mr. Clinton this week.

I have to go now.

Trail Guide

Trail Guide(No Subject)#3597209/03/00; 22:16:48

law (09/03/00; 22:12:07MT - msg#: 35970)

I'll discuss tomorrow.

Black BladeThanks all. Great Day for Closing Out Summer!#3597309/03/00; 23:11:16

HI-HAT (#35931): Your absolutely right! This petroleum crisis is coming. There's no doubt about it. This is not a man made crisis, but rather a simple case of available supply, the ability to process it, and the limited ability to produce it. The result is not only some inflationary event, but also rather an event that has the potential to seriously impact our lives, as we know it. I'm fortunate enough to live where I can live off the bounty of what nature provides. But most in this country don't have that luxury. The best that one can do for him/herself and family is to be prepared for any and all contingencies. Certainly it is wise to have supplies of the necessities no matter what, whether it is because of a family health crisis, employment crisis (layoff), national/international economic disaster, energy crisis, etc. If one were to be in an earthquake prone area for example, it would only be prudent to prepare for a serious disruption to one's daily life. What we are facing is more real and quantifiable than the perceived Y2K crisis. Either way you slice it, there is nothing wrong with the peace of mind than should there be any crisis situation arise, then it is possible to provide for one's self and family. I'm not what you would call religious by any measure (probably due to my extensive background in the earth sciences perhaps;-)), though I know that there are some religious folk here, they may be able to compare the necessity of preparation for such events to Jacob in Egypt and the 7 years of plenty vs. following 7 years of famine. Gold and Silver are a means to transfer wealth over the great divide, for portfolio insurance, and as the currency of last resort. Remember the persecuted in WWII and in Kosovo who had gold as opposed to those who didn't.

Shermag (#35937): DITTO! Once the government creates an agency, it becomes institutionalized. You just can't get rid of it. When it is no longer necessary, you need the pin it down and drive a stake through its heart. And even then it probably won't die. Look at the Bureau of Alcohol and Tobacco (BATF) in the US. It used to be the Department of Prohibition. Once alcohol prohibition was repealed, they became an agency in search of a mission (much as today). They are now nothing more than a bunch of incompetent "keystone cops". These crooks in the Federal Mafia only know to extort the proceeds of the productivity of the citizenry at the risk of creating a financial disaster. Power is more addictive than any drug (including tobacco, alcohol and heroin). They get involved where they are not wanted or needed. And they work to please the majority by stomping all over the rights of the minority for votes and to keep a grip on power.

Bonedaddy (#35954): I think that you and I are in somewhat similar career tracks. I have been involved in the oil and gas business in the past and keep my contacts there. However, I am now in the mineral and metals exploration and mining business. I think that it is clear to many that the developing situation in petroleum is more a fundamental case of supply and demand. The refining capacity is the major limiting factor. No matter how much oil is pumped, there is no more real refining capacity. With capacity at 95%+, any little disturbance at any refinery or necessary shutdown for maintenance will be felt. The only possible source of increased production is from Saudi where they have maybe 5% extra capacity. NG, however, will be the big story and is really being overlooked. The 3 year backlog for NG powered turbines, the EPA constraints on coal and oil powered power generation plants (along with their allotted EPA mandated "carbon credits"), and the political opposition to nuclear, wind, and solar power generation means that NG as the only viable source for "clean" energy will come under severe pressure as the production capacity and infrastructure simply does not exist. The only other sources of petroleum are from heavy oils, asphalt tar sands, biomass fuels, and oil shales. These are all much more costly for the production of petroleum. Prices for everything as a result are bound to be passed along to the consumer, resulting in inflation. It will be next to impossible to bury this (very real) inflation in so-called "hedonic statistics" and other manipulative bogus and increasingly meaningless CPI and PPI numbers.

Canamami: You're right. I hope all is well with Stranger. Perhaps he is on holiday. Perhaps when MK and the guard at the castle sent him an issue of "News and Views" they might want to put in a note to ask if he is well. I will be in his part of the country soon for a couple of days. Hope he's OK.

Buena Fe (#35969): Yikes! " …dry wine during a feast of tender lamb, garlic mashed potatoes, sautéed snowpeas/onions and peppers!" Talk about bringing out the Basque in me1 should add a little mint jelly and garlic bread to that! ;-)

All: Been a great day! Caught a 9 pound rainbow!!! Though it looks as if the pine nut crop will not be so good this year. Oh yeah, I let that monster go. I didn't want to, but I was only interested in stocking the freezer with pan-size. Besides, dove season is about to begin, and I love deep fried dove breasts.

BelieverUS confiscation during the 1930's#3597409/03/00; 23:17:42

Does anyone know what the official positions of other countries around the world was towards gold confiscation in the 1930's? Mexico? Canada? European countries? others?
Was the US the only country that did this?

SHIFTYPPU Periodic Ponzi Update#3597509/03/00; 23:33:13

Nasdaq 4,234.33 + Dow 11,238.78 = 15,473.11 divide by 2 = 7,736 PONZI

UP 118.90 from last week
The bubble grows!
Got Gold?

SHIFTYKitco chart#3597609/04/00; 00:45:48

gold still going up!
UP $1.50 so far tonight!

Black BladeHere We Go Again: The oil surplus won't last as long as we might wish.#3597709/04/00; 02:51:50

Source: Barron's

by James Srodes, Barrons, Oct 19, 1998

Most news analysts got it wrong when they credited low oil prices for the recent proposed $48 billion takeover of Amoco by British Petroleum. What's really driving this mega-merger is an impending global oil shortage that will have profound economic and social implications. Seen in this light, the BP-Amoco merger makes short and long-term sense, and the light also shines on other oil companies.

For European companies like BP, marriages of convenience with American merger partners will offer shelters for profits from the uncertainties of the European monetary union. Also, there will be cost savings from cutting staff and consolidating offices. And U.S. oil companies like Amoco bring retail service-station networks and refineries into the world's largest market for petroleum products. But most of all, the new hybrid giants will have the muscle to survive critical challenges that loom in the not-too-distant future.

Behind the BP pursuit of an American base is a recent series of alerts from many respected petroleum engineers, acknowledged by oil-industry executives and government energy planners: We rapidly approach the point where the global output of new discoveries of oil will begin to contract sharply even as the world demand for energy products becomes still more acute.

Put most simply, a consensus has formed in recent months that within a few years new supplies of conventional oil energy will be outstripped by spiking world demand. Very soon after that the real volume of oil output will begin to shrink abruptly -- even as demand growth coasts a bit higher.

We've seen this before, but the 21st century's supply disruptions and soaring prices will dwarf the OPEC crunches of 1973 and 1979.

The best industry estimates reckon that the world began this year with 1,020 billion barrels of oil in "proved" reserves. At the current production rate of 23.6 billion barrels a year, these supplies would last only another 43 years -- if there were no growth in demand.

As for growth in supply, the industry has spent the past 20 years exploiting a new age of discovery technology. Now many oil geologists say that 90% of the globe's oil fields have already been tapped and many are already exhausted.

Bigger Problem

There are several things wrong with the current consensus. Many of the OPEC nations have been inflating their estimates of proved oil reserves. More obviously, consumption of oil products has already jumped by 50% in Asia and by a third in Latin America, since 1990. By the estimated peak production year of 2010, world demand will have risen by more than 60% to as much as 40 billion barrels a year. Finally, there is the geological bad news that once a mature oil field reaches the midpoint in its productive life it becomes harder to pump out each remaining barrel. Examples of mature fields include much of the Middle East, the North Slope and the North Sea.

Two remarkable things about this latest crisis outcry are how recent it is and how authoritative are the alarmists. It was only last November that two top oil geologists presented papers on the impending oil depletion to a conference of the International Energy Agency of the United Nations in Paris. Colin J. Campbell, an Oxford-trained geologist, and his French counterpart, Jean H. Laherrere, have been senior geologists for firms such as Total, Texaco and Amoco for more than 40 years. Currently they work at the industry think tank Petroconsultants in Geneva.

The two geologists were so convincing that the IEA dropped a generation-old view that held oil discoveries to be merely a function of price -- that is, the higher the price the more oil will be found. Last March, at the Moscow summit of the Group of Eight major industrial nations, the IEA presented its own paper to the national leaders accepting the Campbell-Laherrere view that sometime between 2010 and 2020 the crisis will be upon us full blast. The Campbell-Laherrere analysis also cut the reserve of oil currently known to be in the ground to about 850 billion barrels.

Since then, others have joined in the public debate. Recently, Franco Bernabe, chief executive of the Italian oil company ENI SpA, has given a series of interviews in which he moved the doomsday clock forward to between 2000 and 2005. He forecast that today's world price for a barrel of oil would soon begin to rise from its $15 base and quickly pass the $30 mark. He forecast that both the British and Norwegian sides of the North Sea will begin to see production declines within three years. The United States passed its peak (even with Alaska) long ago. Left open for argument is the amount of new oil left to be discovered in the Third World.

So much global economic progress depends on the exploitation of oil. Energy from all hydrocarbon sources accounts for 80% of what makes our world go and oil accounts for 38% of all energy used. And it's oil that truly powers economic activity because it produces so much raw lift for activities, since it is so movable and can be used in so many ways.

Most "alternative" energy sources require more energy to get them running than they ever produce. For instance, it takes 71% more energy to produce a gallon of ethanol from grain than the energy contained in a gallon of ethanol will generate in use. A barrel of oil routinely offers 10 or more times the raw power for our activities than it takes to get it, conferring an enormous profit not only on the companies that supply oil but on the entire economy.

Some alternative sources are just the figurative drop in the bucket. Wind generators require technological investments that outweigh the power they can generate, even if every windy hillside is sown with them. Solar cells pay off only in remote locations. Other substitutes are possible and may provide almost as much economic profit. But construction of nuclear reactors or projects to wrench oil from shale deposits have mostly been cancelled during the last 20 years of oil surplus and low prices. And coal, which is abundant and profitable, has environmental costs. The recent uproar when strip miners blasted the top of a scenic West Virginia mountain showed just how much of our environmental consciousness will have to be reassessed during the next energy crisis.

Advancing the Market

This is where market forces come in and why the BP-Amoco merger fits the rough logic of the days ahead. Soon enough the giant oil combines of the next decade will find themselves doing battle with the likes of Vice President Gore and British Prime Minister Tony Blair. The bigger the major oil producers become, the longer they can hold out against the temptations of politicians to redistribute what oil remains. The 'Seventies offer a convincing example of the impulse to tax "windfall profits" and spend the proceeds on vegetarian-style alternative energy sources.

Then very quickly the fight will be over the dwindling petro-reserves themselves. Those nations rich with oil and strong in resolve will get their energy fix. By that standard America can thrive quite nicely; so, too, can countries as diverse as Britain, Mexico and South Africa. Other European Union members will fare according to their ability to command and pay for energy (in dollars and not in euros, thank you).

Much of the social safety net that defines the industrial West will be up for debate again at considerable political pain. Nuclear power, with all the fears it raises, will be back on the policy agenda again.

There will be obvious nations at risk too. Some are already visible on the horizon. Russia, which has lost control of the petro-energy subsidies that made collectivism possible, is imploding before us. Japan, which must import each barrel it uses of economic growth, is adrift. Even some nations that have oil -- Indonesia and Nigeria, for example -- must show they can control it, lest it be poured down the drain of civil strife.

Other productive and oil-rich regions face challenges. The Middle East with its easy pickings grows increasingly unstable with each passing day. Some new fields, such as the Caspian Sea area, are hostage to rival bands of terrorists whichever way their pipelines head.

Finally there are the have-nots, those poor nations strangled by a poverty that can be alleviated only by massive use of more and cheaper energy. Think of China, India or Pakistan unable to obtain the means of prosperity and the picture grows dark indeed. The struggle for national prosperity fueled by energy will not automatically go to the rich and already powerful. The nuclear wild card makes players of all nations.

Left to market forces, the energy producers of the world will find and exploit a range of energy resources at the prices that reflect the needs of the world. But the vision of the last half century -- that anyone can have everything -- is no longer likely.

JAMES SRODES is a Washington writer specializing in international business.

Black Blade: Both Colin J. Campbell, an Oxford-trained geologist, and his French counterpart, Jean H. Laherrere, have quite a bit of research on this subject. Laherrere has put forth some rather complicated mathematical models that I have tried in the past. I could post some of that research, however, it is more detailed and complicated than what should be posted on this forum. I don't know what it is, but the French seem to put out a lot of Geo-statisticians. I have worked with several and most really are on top of their game. Campbell has presented several professional papers as well as a book on this subject as well. Though this Barron's article is almost 2 years old, it is somewhat accurate. The political speculation is a bit hard to digest, but then you hust never know. Stranger things have happened.

Turnaroundswapping for pre-1933 coins#3597809/04/00; 03:19:34

An acquaintance of mine has recently concluded a small trade
with Centennial Precious Metals, swapping some of his bullion coins
for pre-1933 coins. Apparently, CPM does this type of transaction
as a matter of course. The coins he received back are exceptionally
nice (I'm not a numismatist, so can't call the grade), some of the
later-date Sovereigns looked nearly uncirculated.

What also made this particularly outstanding was the amount of personal
attention and customer service my friend received (he's a worrier and
something of a pain), even to the point of personal calls from the
proprietor. He tells me that each and everything that CPM said they
would do, they did.

For the record, I do not have any connection with CPM, just an interested
and admiring bystander.

TurnaroundGuidance from the electronic beyond#3597909/04/00; 03:27:27

And a most hearty welcome back to our Trail Guide, and thank you
for being.

Wish ORO were here, wish I could 'grasp' it all.

The Invisible HandToday's FAZ#3598009/04/00; 05:37:36

Had anybody today's Frankfurter Allgemeine in his hands?
If so, anything on Gold/GATA?

Black Blade"Morning Wakeup Call!" (such as it is)#3598109/04/00; 05:52:15

Source: BridgeNews

Asia Precious Metals Review: Gold firms on Australian buying
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Sept. 4--Buying from Australia supported spot gold in Asia on Monday despite selling from Japan and profit-taking from other Asian Sources, dealers said. Gold is expected to move in a narrow range of U.S. $276.50-$278.50 per ounce later Monday amid the long-weekend in the United States, they said. Spot platinum rose following the strength of the price of the Tokyo Commodity Exchange platinum futures.

Weaker Australian-dollar denominated gold prices triggered buying from Australian sources in the spot market, dealers said. But, profit taking from physical traders later shaved gains and capped the price of gold below $278 during the Asian trading, they said. Dealers see gold meeting strong resistance at $280. The price of silver and palladium hardly moved Monday in Asia, while spot platinum was supported by strong TOCOM platinum prices, dealers said, adding trading of spot platinum remained sluggish. In Japan, end-users remained reluctant to buy platinum in the spot market due to relatively high prices, Japanese traders said. Japanese physical platinum buyers said they had not heard of news about the arrival of Russian 2000 delivery of PGM (platinum group metals) under long-term contract. The delivery is expected to start in September. On the TOCOM, short-covering and fresh buying pushed up platinum futures prices sharply in the afternoon hitting its limit-ups as a slow response to Friday's NYMEX platinum futures rises, TOCOM dealers said. As TOCOM gasoline and kerosene futures hit limit-downs early in the morning, TOCOM inter-day traders retreated from trading of the two futures and joined the platinum futures rally, dealers noted. TOCOM gold fell on profit taking in thin trade, TOCOM dealers said.

Black Blade: Ho Hum. But Pt spiked up sharply, while Pd paper trades continue to languish since the TOCOM and NYMEX manipulation schemes were recently publicly revealed.

IPE Oil: Oct Brent called to open 10-15 cents higher By Jim Washer, BridgeNews London--Sept. 4--IPE October Brent crude futures were called to open up 10-15 cents Monday morning at the start of what is expected to be a quiet day on the London market, brokers said. September gas oil futures had started the day stronger, up $2.00 at $312.00 per tonne in electronic trading. -Overall sentiment for the energy complex remains firm, but the little profit-taking seen late Friday on IPE Brent could encourage a rebound in early trade Monday, one IPE broker said. Trading was expected to be quiet, with the NYMEX closed for the U.S. Labor Day holiday and some players likely to be absent from the London market attending industry events. --Both NYMEX and IPE crude futures had posted modest gains Friday as the market awaited word of whether or not OPEC will raise production at its Sept. 10 meeting in Vienna. The market was also influenced by flattening out of positions ahead of the U.S. Labor Day long weekend. With the NYMEX closing early, the IPE will also shut early at 1700 BST. --The statement issued last week by Saudi Arabia reiterating the kingdom's commitment to a rise in production to cool spiraling oil prices is of "considerable significance" despite its lack of positive impact on oil prices when it was released on Aug. 30, the Middle East Economic Survey said Monday.

-Farmers and truck drivers in France have begun blockading petrol depots and oil refineries in protest against the price of diesel fuel, British Broadcasting Corp. radio reported Monday. The organizers, led by French road haulage federation FNTR, said they would deploy some 2,000 lorries at more than 70 installations around the country.

Black Blade: US Markets are closed for Labor Day. With the continued strength in North Sea Brent oil, there could be significant follow-through on NY Crude tomorrow. A new Goldman Sachs prediction of $40.00+/bbl has been released. The stage for a severe recession is being set.

Meanwhile, Au is up +$0.90 at $276.80, Ag down -$0.02 at $4.93, Pt up now only +$8.00 at $601.00 ($612.00 London AM), and Pd down -$8.00 at $710.00 ($718.00 London AM). The Saudis are trying to talk oil down by hinting at production increases, but there is not much room for increased capacity either in production or refining capacity. Looks as if petroleum is going to come under a lot of pressure with accompanying price spikes. Anyway, I will be off for a few days in the Great White North conferencing with some clients. I will check in periodically and see if are long-lost friends appear ;-)

Zenidea(No Subject)#3598209/04/00; 05:58:10

Sometimes its cheaper to put 10 cents under a fridge to level it than to go out and buy a wedge. I was once asked
in Basic Engineering the question " How strong is a piece of chain " and most said " what a daft question". Some said in essence that depends what carat it is or re: Breaking strain ='s Safety factor X's Safe working load or WWL etc, or I would ask the authorised authority etc etc . . Oops the pass answer ( A piece of chain is only as strong as its weakest link) But re: Oil and energy etc & 10/1 ratio's re: Pt and Pd and Technology dependant country elements and $. What safety factor i.e.( A proportion of the breaking strain ) will it take to expose the truth in the United States newspapers. the Answer US... :)

LeSinSheikh Yamani & OPEC #3598309/04/00; 06:12:13

FOA - Black Blade & ALL - ?

Is Sheikh Yamani serious as quoted below or does he represent a smoke screen and a convenient diversion from the real action of new currency settlement arrangements for Oil? I respectfully question his statements, as I hold him in high regard. "S"

Monday September 4 4:21 AM ET
Yamani Says OPEC Accelerating End of the Oil Era

By Richard Mably

LONDON (Reuters) - Saudi Arabia's Sheikh Ahmed Zaki Yamani is in little doubt -- petroleum prices now spiralling out of control will prove a last hoorah for OPEC oil power.

For the former Saudi oil minister, the return to $30 a barrel crude has only hastened the day when the Organization of the Petroleum Exporting Countries will be left staring at untouched fuel reserves, marking the end of the oil era.

``OPEC has a very short memory. It will pay a heavy price for not acting in 1999 to control oil prices. Now it is too late,'' he said in an interview with Reuters.

``The Stone Age came to an end not for a lack of stones and the oil age will end, but not for a lack of oil.''

As Saudi oil minister from 1962 to 1986, Yamani, now 70, was the embodiment of Arab oil power.

The architect of a dramatic upheaval in the world's economic order during the 1970s' oil price explosions, his name became synonymous with OPEC.

The cartel this weekend marks the 40th anniversary of its birth in Baghdad on September 10, 1960. Petroleum ministers meet on Sunday to decide output policy for this winter.

Yamani says it is too late now for OPEC to refill petroleum product tanks in the West where inventories of heating oil are running short for the northern hemisphere's cold months.

``I think prices might go a bit higher this winter but further ahead in 2001 prices will start to come down and longer term it is horrible for OPEC,'' he said.

Technology To Squeeze Opec

Within 20 years, he predicts, technology will have cut deep into demand for transport fuels.

Crude will slump even more heavily than the single-digit prices seen during the last glut, in 1998.

This year's oil price scare will feed rival non-OPEC production, suppress demand and, most damagingly for OPEC, breed new fuel technologies.

He sees hybrid engines for automobiles and hydrogen fuel-cells drastically cutting the consumption of gasoline while big new finds lift crude flows from non-OPEC nations.

``Technology is a real enemy for OPEC. Technology will reduce consumption and increase production from areas outside OPEC.''

``The real victims will be countries like Saudi Arabia with huge reserves which they can do nothing with -- the oil will stay in the ground for ever.''

OPEC, said Yamani, had failed to learn the lessons of the series of gluts and shortages which have marked its turbulent history.

Its leading negotiator during the oil price rises of OPEC's heyday, Yamani says his warnings against pushing crude too high went unheeded.

``I will never forget. It was 1979. I was in Caracas and I said that at this price -- it was $28 a barrel at the time -- OPEC production will drop, OPEC countries will fight each other. I said production has to be raised to lower prices. They said I was crazy.''

While Saudi Arabia, sitting on 100 years of reserves, now favors prices no higher than $25 a barrel, fellow OPEC members remain keen to squeeze their customers for as much short-term revenue as possible.

``There are some members in OPEC who always tried to resist extra production -- like Venezuela, Iran, Libya. In OPEC, from day one that has not changed,'' said Yamani.

Leading Role In Producer Sovereignty

Yamani remains proud of his role in wresting power over petroleum revenues from the oil majors, the assertion of OPEC's central objective -- sovereignty by the exporting countries over their resources.

He cites the Tehran Agreement of February 1971, when the oil companies abandoned their long-standing 50-50 share of revenues to cede the Gulf producers a majority return of 55 percent.

``That was a big step forward for OPEC,'' he said.

And then on October 16, 1973 just days after the start of the Arab-Israeli war, Yamani and five other Gulf OPEC petroleum ministers took charge for the first time of the price of oil.

Unilaterally they lifted posted crude prices, previously set by the oil companies, by 70 percent to over $5 a barrel.

``Prices were now fixed by producers. Now we were masters of our own resources,'' remembers Yamani.

The following day Saudi King Faisal sanctioned the Arab oil embargo to punish the West for its support of Israel.

Within months oil prices had trebled and the industrialized world was tipped into the sort of recession which some economists fear could be repeated again if oil prices do not ease soon.

Carlos The Jackal

Yamani, born in Mecca in 1930, remains a devout Muslim despite daunting personal experience.

He was present in 1975 when an assassin shot his mentor, Saudi King Faisal.

Later that year he was among ministers taken hostage and held to ransom at OPEC headquarters in Vienna by the guerrilla Ilich Ramirez Sanchez, alias Carlos 'the Jackal'.

Taken on flights to Algiers, Tripoli and then back to Algiers Yamani was told that he and the Iranian oil minister irrevocably had been sentenced to death.

``Carlos told me I would die. I was sure I would die. I wrote my will. I was prepared.''

Famed for his softly-spoken negotiating skills, Yamani also was a favorite with the press.

``Often they knew more about OPEC affairs then the ministers they were questioning,'' he said.

LeSinCapital Flows to EURO - Herd mentality Begins "SAFE BET"#3598409/04/00; 06:37:00

September 2000 4, 2000 VOL. XX, NO. 36

—Matt Benz & Julie E. Satow

At least two U.S. bond managers are implementing allocation shifts into euro-denominated assets on the view that the beleaguered currency—which was trading below $0.90 last week, down from $1.05 a year ago—is poised to roar back. Officials at Brandywine Asset Management and Waddell & Reed cite Europe's strong growth, and the prospect that the resultant higher interest rates will reverse the currency's stubborn downward spiral, as compelling reasons for dollar-based investors to ramp up their euro-denominated bond exposure.

Brandywine has extended its position in euro-dominated bonds by $330 million and is planning to move another 7% of its $1.1 billion in global fixed income assets to euro-denominated sovereigns and corporates, on the view that the euro is going to strengthen against the greenback.

Since last fall Stephen Smith, high yield portfolio manager, has foreseen the U.S. economy slowing—even as Europe's picks up speed—because of the ballooning U.S. deficit, interest rate hikes and the price rises in oil and low-end goods such as cigarettes. Dollar weakness "could cause capital to flock to Europe," said Smith. Prior to last year, the global bond portfolio was almost entirely hedged into dollars, but the hedges largely have been eliminated. Though the majority of his foray in the European market has been in sovereigns, Smith is cautiously dipping his toe into corporates as well; his first such purchase was $30 million worth of a recent euro-denominated deal from Clear Channel Communications. Brandywine, which is looking for more seven- to 10-year euro telecom paper, especially if spreads go 150 basis points off the 10-year Treasury, is especially keeping its eye on the upcoming deals from British Telecom and Telefonica. It has cut back to zero U.K. issues, and decreased exposure to Swedish, New Zealand and U.S. paper.


Waddell & Reed recently used cash to purchase $15 million in euro-denominated bonds, on the view that the euro will strengthen as investor attention shifts from the U.S. to brighter economic growth prospects in Europe. Jim Cusser, portfolio manager for some $500 million in fixed-income, says he bought three- and four-year paper from Dutch financial behemoth ING Groep and two American companies, GMAC and IBM, which issued global bonds denominated in euros. "There's no bond bet going on here—and I don't think there's a credit bet—so much as there is a currency bet," he says. Cusser foresees the euro strengthening over the next 6-12 months on rising local demand for European goods, business-friendly tax reform in Germany and a possible end to the European Central Bank's rate hikes. Meanwhile, the U.S. is beginning to see the effects of the Federal Reserve's tightening cycle in indicators such as home purchases, he says. The Overland Park, Kan.-based fund is allocated 50% to corporates, 30% to mortgage-backed securities, 10% to asset-backed securities, 9% to Treasuries and 1% to cash. At 6.19 years, duration is long its benchmark, the 4.81-year Lehman Brothers Aggregate Bond index

CoBra(too)@LeSin#3598509/04/00; 07:41:36

Hello there,
According to your latest post it seems some others are starting to hop onto the contrarian bandwaggon - bombed out assets may be best candidates for a turnaround! Though not a great "pile" tet.
How about digging deeper in Goldman's bomb crater and get some real value for your $'s - cb2

auspecGOLD ECONOMICS- ABBREVIATED VERSION#3598609/04/00; 08:53:16

CURRENT EVENTS- We may as well have some fun while patiently awaiting more fireworks!
GATA's GDBC says POG is manip. by US & UK via OTC derivatives backed by ESF wo OK of AG & FED. SOS came from LTCM fiasco & stress to CBs, BBs, IMF, & AU lingers. WA is a jolt to mkts., but GS, JPM, etc. douse the flames. 12 of PGMs run anyway as TS hits TF re Pd. on TOCOM & NYMEX, CFTC is MIA re COMEX. OPEC amps the POO in order to buy more yell. met. yet no inflation. The pols get involved as govt. honesty is AWOL. The FIG is no fraud, but the CPI is. They contam the XAU yet the obscure HUI remains pure. The DOW, S&P, NAZ, & US$ soar as planned, while the ECBs & Euro languish. LBMA, under H2O w 2 many IOUs, gets dissed by BIS. BuBa vs. Bubba debuts, UBS, DB, & SNB scramble for physical. POG plummets & the PUDCs w HIVAIDS are SOL. The GBs are PIAs to USG, claim FAZ articles are WA 2, await >POG ASAP.
Recs for Au HOF IMHO- Midas, Chris, Frank, Reg, Ted B., & TGFOA.
Recs for Au HOS- FDR, RMN, wjc, BoE, GS, & GFMS.

Hope this clears up any confusion!


P.S. Ag also.

Gandalf the Whiteauspec's Shorthand #3598709/04/00; 09:22:29


CoBra(too)Hi Auspec - #3598809/04/00; 09:31:36

Thanks again for posting your msg. over at this site - I've just had to respond again - as GTW said FUNTASTIC! Cheers -cb2
CoBra(too)Re: Abbr. Version - Gold Economics by auspec#3598909/04/00; 10:18:47

This brilliant short essay is not only state of the art, but a compressed, though extensive observation of today's financial markets - leading the underlying economy - or vice versa? - deserves a place in HOF - with some annotations for the less initiated (smile) - so I'd love to "initiate" the first nomination - in the hope to find seconders - cb2
oldgoldYamani#3599009/04/00; 10:35:32

has been talking like this for years. Nothing new here.

Although a Saudi by birth, his primary allegiance now is too oil consumers, not producers. His predictions of the end of the oil age are nothing but propoganda designed to encourage oil producers to push down the price.

BTW, when discussing oil prices people should realize that even at today's $32 oil, many European nations probably receive more in tax revenue from gasoline sales than the oil producers do for the crude used to make that gasoline. When these nations complain about the inflationary impact of "high' oil prices, the stench of hypocrisy becomes almost too strong to bear.

Cavan Manauspec 35986#3599109/04/00; 10:38:56

This post has my second for HOF nomination.

I'd just like to add that GLOBL FIN/MON ORDR est FUBAR!

USAGOLDVarious. . . .#3599209/04/00; 11:18:22

Turnaround. . . .Thanks for the kind words.

We just today introduced here at USAGOLD our European Delivery Program -- a service by which we will be offering gold coins to Euro-based private investors. We believe that USAGOLD/Centennial Precious Metals is the first U.S. based gold firm to overcome the nuances of offering gold in Europe. It took a long time to put the system together, but it is now solidly in place. By co-incidence, it was no more than thirty minutes after putting the final piece in the puzzle that we had our first European gold order. An auger of things to come? That order came from a goodly knight who has occupied his esteemed seat at this table almost from the beginning. Though we come from many backgrounds and countries, we all have one thing in common -- an understanding of the importance of gold, not just for our personal portfolios but in the larger sense as a symbol of our standing as individuals apart from government. We will be bulk-shipping information packets to Brussels next week for futher dissemination to interested gold buyers in Europe, so please go to the "Request Info" link, if you have an interest.

With the ECB making noise about raising interest rates to combat inflation in Euroland, it echoes through the financial sector that rising oil is having its effect. The fact that Europeans must first convert euros to dollars to buy oil exacerbates the currency problem in Europe and sets up situation exploitable by the speculators. I admire Mr. Trichet's comments about speculators trashing the euro undeservedly. Sounds very much, though, like the comments made by leaders in the Tiger countries a few years age when the hedge funds trashed their currencies and economies in the process.

Until central bankers in concert move to throttle the profliferation of derivatives, and the EU in particular moves to cut the dollar out of the middle, they will find their policies, like the positions of gold owners, undermined by traders who can place a position bet at pennies on the dollar. In the case of currency trashing, the implications are wide and deep as we found out in Asia -- and Europe though it has teeth remains vulnerable. In the case of gold, most gold owners can afford to wait out the attacks of the derivative slingers. For Europe, as a nation, it is a different story. Because derivatives' players can take a currency in whatever direction they see fit -- like dogs on the trail of a fox -- they can do extraordinary damage to individual portfolios within the targeted zone -- including, as saw in Asia, tearing the quarry to pieces.

Investors in Europe will find protection, as they have for centuries, in the comfortable confines of gold ownership, and we hope to help with that process.

LeSin. . .Thanks for putting up Sheik Yamani's comments. However, I do not buy his argument. Though fuel cells, and hydrogen based systems are in our future, it will be a long time until oil is driven from the economy -- I would guess at leasat a decade, maybe longer. Just the problem of conversion is a technical problem with a long lead time. Add to that the vested interests of the oil industry working to protect its turf and you have the makings of a long drawn out process. The changes Sheik Yamani envisions are likely to happen but the driving force will not be the price of oil; it will be environmental concerns, and as I've said, I don't see it happening overnight. I do not know what's driving his thinking these days, but it has a surreal quality that I find difficult to bet hard money on. Remember there was much talk of alternative energy after the last oil siege in the 1970s and early 1980s. Little or nothing happened to the point where we come full circle. The San Francisco Examiner today tells us that the Sierra Club will begin a campaign against the SUV -- as a gas guzzling, global warming, air polluting symbol of American excess.

Cavan (St. Louis) Man. . . . I will take the Broncos in the big game later, but I need at least six. Rams are no fluke! Elway picked them late season last year to go all the way, and they did. Bronco's rebuilding. New faces everywhere, though Terrell is ready to play. What's the weather like there today?

USAGOLDHere's the link for details on the European Delivery Program#3599309/04/00; 11:30:26

Please e-mail your questions and comments. . . . .
Cavan ManUSAGOLD#3599409/04/00; 11:39:08

Over here in humidityville the weather is balmy. Actually we've a respite from the 100 in absolute temps combined with high humidity this past week. Our brethren across I70 were not so lucky.

Will you take the wager for (4 points to Broncos)with the prize being a Canadian Silver Dollar?

USAGOLDCavan(St.Louis)Man. . .#3599509/04/00; 11:44:53

How about five points and lunch the next time we get together? Don't have any Canadian silver dollars (I don't think). Is Warner healthy?
SteveHAm I wrong?#3599609/04/00; 11:52:22

BobboResponse to Black Blade#3599709/04/00; 11:53:37

Good day Black Blade and everyone. I will attempt to briefly address your posted request
for a "religious perspective." I do not wish to upset any poster by my response, but I will
present a biblical perspective to your inquiry. IF you will be offended by religious stuff: PLEASE SCROLL PAST THIS POST!
Black Blade (09/03/00; 23:11:16MT - msg#: 35973)
I'm not what you would call religious by any measure (probably due to my extensive
background in the earth sciences perhaps;-)), though I know that there are some religious
folk here, they may be able to compare the necessity of preparation for such events to
Jacob in Egypt and the 7 years of plenty vs. following 7 years of famine. Gold and Silver
are a means to transfer wealth over the great divide, for portfolio insurance, and as the
currency of last resort. Remember the persecuted in WWII and in Kosovo who had gold
as opposed to those who didn't.
You are astute to make the comparison between current global economic conditions with
the events of Joseph (the son of Jacob; Joseph become prime minister of Egypt about
3900 years ago) and Pharaoh. Joseph was able, through God's interpretation of Pharaohs
dream, to give an interpretation to Pharaoh's request for an interpretation of a troubling
dream he had. Pharaoh's court mystics, astrologers, mediums, etc., where unable to
interpret, but The Most High God gave Pharaoh an answer through Joseph. To make the
long story short, Joseph told Pharaoh that the interpretation was that there were to come 7
very prosperous (fat) years followed by 7 very economically horrible (lean) years. As a
result, Pharaoh appointed Joseph to a powerful position with all necessary official
authority given to him for the purpose of preparing for the 7 lean years. The 7 lean years
in the days of Joseph were caused by natural conditions during which crops failed and
famine ruled the day in that area of the world. Joseph had saved Egypt, his family
(Jacob's household) and others from famine and untold suffering. Today, we are
eventually going to face another lean period caused by economic abuses, bubbles and
manipulations. The wise have been preparing and will intensify preparations, especially
as we come closer to the end of our prosperous years, even as Joseph prepared back in
ancient Egypt. Gold is an essential element in that preparation.
Other related Biblical teachings:
Proverbs 27:23 Be diligent to know the state of your flocks, And attend to your herds;
----Which tells us to be diligent in business (and investments) and continually attend to
their status.
1 Timothy 5:8 But if anyone does not provide for his own, and especially for those of his
household, he has denied the faith and is worse than an unbeliever.
----We must provide for our family: both in fat years and lean years. Thus we must make
preparations for lean years during the fat years (as did Joseph). AKA: Buy low, Sell high!
1 Peter 1:7 that the genuineness of your faith, being much more precious than gold that
perishes, though it is tested by fire, may be found to praise, honor, and glory at the
revelation of Jesus Christ,
----Our faith is in God and not in the gold we possess. The gold (and other wise
investments) is a preparation for lean year turmoil and not an end in itself. At least not for
the believer.
I hope that this has cast some religious perspective on your post.

Cavan ManUSAGOLD#3599809/04/00; 12:19:47

You drive a hard bargain! I would be happy to make the wager; done.

I am hearing that Warner's arm is bothering him. We'll see tonight. Thanks....CM

Cavan Manpeterasher#3599909/04/00; 12:21:41


I had the pleasure of seeing a tape of Mr. Browne (is it Harold) speak at the Libertarian convention the other day. I am very impressed with him and will probably vote his way.

USAGOLDCavan Man#3600009/04/00; 12:33:05

It's a bet.
Gandalf the WhiteSecond "Second" for CoBra (too)'s Nomination of #35986#3600109/04/00; 13:42:16

auspec (09/04/00; 08:53:16MT - msg#: 35986)
The Hobbits are happy to provide the 2nd Second !
ANYone for the Required 3rd Second ?

Clint HOil#3600209/04/00; 13:42:19

Something to add to the oil thoughts.

Presentation to a House of Commons All-Party Committee
on July 7th 1999

C.J. Campbell

SteveHPoint of order for nomination#3600309/04/00; 13:46:30

The HOF nomination in question is also located on kitco authored by Sharefin. Either they are one and the same or one has borrowed the others work. HOF verification is in order. What says the author?
auspecPOINT of ORDER#3600409/04/00; 14:14:02

To Steve H- The author of this article is me, AUSPEC. The article was posted on this forum as well as LeMetropole Cafe. Unaware of Kitco posting and doubt there are 2 tangled minds that simultaneously thought up this piece. Am honored to possibly be nominated to HOF by my CHOSEN peers, thank you.

714re: FOA#3600509/04/00; 14:15:46

I read with interest FOA's latest and
noted his comments on the "paper market"
in AU.

"If the gold market was to shift to say, 5 day hard
delivery, how could one trade their contracts for gold?
Yes, you guessed it, paper would trade all right,,,,,
at a huge discount."

And why would paper trade at a huge discount? If the
last few years are any indication, a non-performing
contract could simply be rolled over by way of a commonly
used clause in gold leases. We didn't see paper trade
at a huge discount during last fall's spike up. What
we saw was an increase in leasing, probably due in
large part to rollovers. And as long as the world's
reserve currency, the vaunted US$, remains stable, what
better way to inject liquidity into the paper trade?

And this, "...what counter party on the other side of
your contract could deliver?" This is exactly what's
occurred in palladium, but what happens? The price is
frozen, volume vanishes, and the market adjusts to
palladiums absence. Would not the market adjust to
gold's absence, and instead, trade on dollars and yen
and euros? Is this not the history of money?

And here's one that just doesn't jibe, "More and more
investors pay a larger escalating premium to get physical
"now"." All this year, I've been finding incredible deals
on French, Swiss, and English bullion coins, among others,
that are available for only 5% above spot. Very fine grade
coins minted in the 1800's, some of them. I've NEVER seen
such deals as I have this year. And everything I see in
the AU market indicates investors have been selling
off their bullion more than they've been buying.

Paper gold reflects the "real thing". The real thing is
being unceremoniously dumped into the marketplace by CBs,
who rightly or wrongly, no longer value it as they once did.
The key to gold is not oil. The key to gold is the world's
reserve currency, the US$, and the opportunities it presents
for usurious profits, such profits that are mimicked by the
paper market in gold. Someday, who knows when, the US$ will be devalued. And then gold will soar...

"What will make this "modern gold market evaporate"?"



beestingSir Journeyman's Questions.#3600609/04/00; 15:27:25

Was out of town (Highland Games) for the weekend and didn't get a chance to respond to these questions by Journeyman:

<<QUESTION 1: Why wouldn't increased energy prices show up as "inflation" if we were on a
true (convertible) gold standard?

QUESTION 2: What WOULD happen?>>

My simple answer for 1.:
We have to look back at the "Barter" system to answer this, and use a little math.Using "barter", prices should reflect "TRUE" supply and demand.Here's what I come up with pricing crude oil in Gold:
If we divide $275 per ounce Gold by $30 per barrel oil we come up with 9.167 barrels of crude oil for an ounce of Gold.
Lets make the math easier:
If Gold is about $311 per ounce and crude oil is about $31.10 per barrel we would get about 10 barrels of crude oil for an ounce of Gold.
Now lets price "things" in Gold! Most of the world uses the easier metric system, so instead of using infinitesimal small fractions of an ounce of Gold, lets switch amounts of Gold to grams.
One ounce of Gold = 31.103 grams.(We could use "grains"( 1 ounce Gold = 480 grains{Troy Wt.} , but nobody I know uses this measurement either)
So using the above, 10 barrels of crude oil now costs 31.103 grams of Gold, one barrel of oil(55 gallons?) would cost about 3.1103 grams of Gold(or $31.10).One gallon of crude oil would cost .0565509 of a gram of Gold(or .57 cents).

Lets break it down further:
If one barrel of oil equals 55 gallons(?? U.S. measurement)how much Gold will it take to buy refined gasoline at the pump?
I'm going to use a 3 to 1 ratio because in the U.S. about 1/4 of the cost, at the pump, is taxes. 3 times .0565509 = .1696527 of a gram of Gold.(or about $1.70 per gallon)

The ratio of Gold for stuff wouldn't(hasn't in the 5000 year history of using Gold for money)change dramatically until either the "stuff" or Gold becomes over abundent or scarse.

Question 2. What would happen?
Well IMHO, as the supply of oil worldwide decreases over a long period of time( Thank You Black Blade)the cost(oil for Gold)of the oil would increase "UNTIL" an equilibrium is reached, making hydrogen powered engines more economical than gas and diesel.( I think the process has already been developed to run vehicles directly on altered hydrogen gas derived from water) Than as the "cost" of production of hydrogen fuel from water decreases(big rush to be first) the "price"(Gold)would stabilize the entire worlds economies along with unlimited, clean burning, hydrogen fuel.(Also if We the People can retake control of Government expenditures.....IN GOLD!!!)

From John Lennon's "Imagine":
"You may call me a dreamer, but I'm not the only one, I hope someday you'll join us,and the world can be one.(At Peace)
Thanks for Reading.....beesting.

LeighBobbo#3600709/04/00; 15:37:41

Genesis 47:15-26

Thanks for the information about Joseph. You left out one really interesting fact about the story. When the Egyptians' money failed (was all spent)later in the famine, the Egyptians sold their cattle to the government. The government fed them. The following year the Egyptians sold their land to the government and offered themselves as servants. A deal was worked out for the government to own the land and the people to work it. Egyptian citizens would receive four-fifths of their harvest and the government would claim one-fifth. The people, for temporary safety, gave up claim to their own land forever.
tedwReal Money#3600809/04/00; 16:09:56

Real money is not Federal Reservem Notes. And real money is not Gold either!!!

As anyone in any prison in these United States knows real money is cigarettes!!!

Now, when I quit smoking in 1978 cigarettes were .50 Cents a pack. They are now $2.60 a pack and thats if you buy them discount in cartons.

Therefore anyone can obviously see that the oveerall rate of inflation since 1978 is 500%+.

Cigarettes,real money, get you some.

AristotleA follow-up question for 714#3600909/04/00; 16:13:22

Your words--

The key to gold is the world's reserve currency, the US$ [...] Someday, who knows when, the US$ will be devalued. And then gold will soar...

"What will make this "modern gold market evaporate"?"


Please pardon my interjection during your dialog with FOA, but I find this all to be far too fascinating a subject matter to sit idly by on the sidelines.

Could I possibly encourage you to share your thoughts regarding the following?

Please consider what it is that underlies this fiduciary media we call the dollar, and then accordingly, how is it that the fiduciary dollars will be "devalued" against this same underlying element--whatever it is?

This question must be addressed before moving on to the next, or this exercise is meaningless.

OK, having given thought to that matter, does it not now strike you as more conceivable that it will not be dollars but rather the "devaluation" of fiduciary Gold contracts in all shapes and forms against the underlying Gold asset that will bring about "a new reality" in the Gold market?

The dollar need not fail as a prerequisite for Gold to leap to a new valuation (in terms of goods and currencies, dollar included) coming as a result of the paper Gold falling into discredit; but just the same, under such an event the dollar itself would have lost its last supporting leg in the international arena, and would subsequently plunge even further against the rising physical Gold valuation.

Gold. Get you some. ---Aristotle

Cavan ManAristotle 36009#3601009/04/00; 16:20:14

Aristotle, I am not in disagreement with you but I wish to make a point. For the current price discovery mechanism for POG to fail, someone(s) must step forward and take delivery; there must be massive buying. I mean "massive"! Am I right?
JourneymanMore journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL#3601109/04/00; 16:35:53

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho

AristotlePrice discovery failure#3601209/04/00; 16:41:08

Hi Cavan Man.

I think it may be even easier than the manner you suggest.

Try to imagine the impact on price discovery, and consequential credibility of those prices, if the would-be buyers of these paper positions simply walked away.

Gold. Get you some. ---Aristotle

SharefinSteveH #3601309/04/00; 16:45:54

Let me say that your guess is way off.
I read the post here and enjoyed it immensely.
Couldn't resist posting it back at Kitco.

JourneymanMore journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL#3601409/04/00; 16:50:45

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho þ Ð ý.ˆ ý‘ð þ!` ý>ø ý.ˆ

AristotleHello Sharefin#3601509/04/00; 16:52:54

Although miles of cyberspace may lie between us, it looks like we are close enough to shake hands. The pleasure is mine.

Gold. Get you some. ---Aristotle

JourneymanMore journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL#3601609/04/00; 17:25:53

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho

BobboLeigh on the Story of Joseph...#3601709/04/00; 17:40:07

Leigh, I have wanted to thank you for the warm welcome you had extended to me when I first began posting at USA. It was not overlooked and is greatly appreciated. Thank you.
In regards to your: (09/04/00; 15:37:41MT) post, you are absolutely correct. However, it sounds so much like 19.99% credit card debt that I hesitate to make that obvious connection, although one could. The government of Egypt, under Pharaoh's rule and Joseph's guidance, did in fact grab up virtually everything for a song and a seed (the excess food stored during the 7 fat years). Of course, all belongs to the Lord, but it seems that again He will permit all to be grasped by the beast (i.e., the NWO thingy this time around). The ungodly world system will be permitted to prevail and the time will come shortly when the people will exchange their remaining freedoms and rights for a few crumbs to feed upon and restoration of civil chaos. But first things must begin to unravel. Perhaps as the USD hits the skids, the Chinese flex their military muscles, the MidEast erupts and the Euro regains stature and takes gold higher as it rallies, perhaps, just perhaps the scenario will begin to burst full bloom on the world scene. It seems that Solomon was correct when he said "There is nothing new under the sun."
GOT GOLD?....Go Gold!!!...

Cavan ManAristotle 36012#3601809/04/00; 17:48:27

Why would they walk away? If the discovery market is populated by sellers and buyers who, for the most part, have no intention of taking possession, why wouldn't they be content with "business as usual". Further, if gold market traders are content with the paper game to settle their "bets", won't it take a large BELIEVER(s) in the metal to create a marketplace more to their liking? If not, why not?


An enquiring mind

JourneymanMore journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL#3601909/04/00; 18:17:27

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho

Hill Billy Mitchell@ Leigh # 36007 and Bobbo Re: Genesis 47#3602009/04/00; 18:23:02

Leigh, you said,

"...Egyptians sold their land to the government and offered themselves as servants. A deal was worked out for the government to own the land and the people to work it. Egyptian citizens would receive four-fifths of their harvest and the government would claim one-fifth. The people, for temporary safety, gave up claim to their own land forever."

HBM comments:

A few months back while I was reading the account of Joseph and the Egyptian famine I made a mental note about it as follows:

'This was the first historical account of agricultural sharecropping. As you, Leigh, have noted the sharecroppers kept 80% of the produce.'

My grandfather was a sharecroper and I have always been interested as to how the arrangement works. My understanding is that, though sharecropping no longer goes on where I live it is not unlike a farmer renting land and paying the landowner in a couple of ways. One common way is to pay the owner with 1/3 of the crop. The other is cash rent up front. Cash rent up front would run less than an expected 1/3 of the crop because the entire risk goes to the renter in a "cash rent up front" agreement.

I know this seems a trivial subject but I did want to point out that compared to our situation today, it seems that the sharecroppers in Egypt were not quite so oppressed percentage-wise, paying only 20% as opposed to 33%.

Also the gold which an astute one places in hand today may very well put him in a position to acquire land from those who thumb their noses at "gold bugs", and to become the landlord of the future. No doubt there is going to be an enormous transfer of wealth when the coming liquidation of debt comes to pass.


PS: From your insight we have a good example of the fact that if you have no property you are a slave, ie. you have no other way to earn food and shelter than to hire out your physical mind and body. 'if one does not have enough of the physical stuff he may run out of it during the liquidation and end up as a slave with no other choice but that of selling himself into slavery just to eat.

JourneymanMore journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL#3602109/04/00; 18:44:11

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally disho ûZà ü ¨ Accept-Encoding: gzip
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JourneymanMore journeymen -- or perhaps masters @Marius, JMB, Shermag, Black Blade, ALL#3602209/04/00; 19:02:12

Sheesh!!! Sorry -- had some kind of glitch. I didn't know anything got thru cause I couldn't read the forum after I tried to post!! Some sort of problem with leading spaces on successive lines again, I think. Anyway, here's the message I've been cluttering up the forum with for most of the day:

As a result of one of Black Blade's excellent posts, I posted the
following two "Questions of the Day:"

QUESTION 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Several fellow posters responded, all good answers. In looking
back over things, I discovered that Marius had answered QUESTION
1 particularly well (from my viewpoint) in responding to the
previous "Question of the Day" some hour and three minutes before
I even asked it! Pretty durned impressive! Particularly, he

"Wage Inflation", like "demand pull" inflation or "cost
push" inflation seems to be a fundamentally dishonest
attempt to obscure what is being inflated. *As the
Austrian economists argue convincingly, rising prices
are a symptom of inflation, not the malaise itself.
Follow the money (supply)!! *... I remember that the
economists were in the process of inventing another
fake form of inflation while I was in college: oil
21:47:34MT - msg#: 35900

JMB also nailed it:

Q 1: Why wouldn't increased energy prices show up as
"inflation" if we were on a true (convertible) gold
standard?....hmmm, the extra money spent on energy
would take away from expenditures on hot dogs and what
have you, no? -JMB (09/02/00; 23:26:46MT -
msg#: 35905

As did Shermag:

Inflation, otherwise defined as a general rise in
prices, would not occur, as there would be a
corresponding price decline of other goods. Sort of
like saying the same amount of money now chasing some
goods (energy) more than others. -Shermag (09/03/00;
13:16:53MT - msg#: 35936

Shermag nailed QUESTION 2 as well.

Interesting response from Black Blade!

Sorry if I missed anyone.

I would simply say that without an increase in the money (gold)
supply -- and no counterfeiting of REDEEMABLE IN GOLD ON DEMAND
paper gold certificates without gold to back them allowed -- a
_general_ price inflation simply can't happen. In this
situation, any increase in energy prices simply MUST come out of
other parts of "the economy" (yea, like hotdogs for example) as
reduced sales or lower prices. Of course, increased productivity
could soften the blow in some sectors.

Now before someone out there claims, "It is in just such a
situation as this that we need 'flexible' fiat," keep in mind
that ultimately what "money" is allocating is human hours. It
could be current hours, saved-up hours, or promised (debt) hours.

Even in a robotized industry, it is ultimately the human hours of
the maintenence workers, programmers -- and past hours of
investors and founders in the case of capital equipment. But
there are only so many _current_ human hours available. And no
derivatives can increase the supply of these. Thus _something
else_ has to give.

Valuing human hours is highly complex, depending as they do on
buyers in dynamic markets, etc., etc., etc. --- and that's why we
use "money." None the less, it is hours allocated, and you can't
have something for nothing. Therefore, even if you increase the
money supply to accomodate increased oil prices, unless you
believe in Santa Claus, _someone_ eats it.

If you're solidly in the _classical_ gold free-banking system (or
other relatively stable) money supply situation, the lower-price,
fewer-sales chips fall where "the market" determines. That is,
what people decide they can no longer afford is what the
"invisible hand" plucks from the economic vine.

If the bankers increase the "flexible fiat" money supply on the
other hand, those who get to "spend" the money first (i.e. the
bankers and their government cronies and borrowers) get to spend
"uninflated" currency while everyone else's "stored hour" value,
stored in that currency, deteriorates as the supply is diluted by
that first spending.



CanuckDiscussions of paper and futures#3602309/04/00; 19:27:50

Glad to see the 'futures' and the 'paper game' is STILL in great debate.

Let's work this out backwards.

What do I want to see? Gold at $5,000 CDN/oz. (I just picked a number). At current CDN/US currency levels, that's about $3,000 US/oz.

Now we know that gold is gold and bread is bread and gold can buy cheeseburgers and a fine suit. Gold is relative so I do not believe it's inherent value to rise. If gold's value were to rise enough to buy 2 suits that would be a very,very good thing. However I believe it to be more probable that the currency would drop. It is the money that is inflated.

Oil is fetching a high price because of high demand, gold is near a low because of low demand, it really is that simple. CB's are selling and leasing and if you read the first line of the W.A. it states that the 15 member European consortium is limiting sales to 400 tonnes/yr. They are selling gold. New mine production ADDS to this supply consequently supply meets and/or exceeds demand. The CONFIDENCE that supply will meet and/or exceed demand allows the 'paper' boys to short the snot out of gold.

When and if this reverses the paper crowd WILL 'walk away'.
When there is a foreseeable supply/demand deficit anyone caught short will pay dearly because at 5,000 tonnes short as per GFMS or 10,000 tonnes short as per R.Howe or 14,000 tonnes short as per GATA the price of gold will skyrocket.
This I believe to be the essence of this 'paper market' blow-up.

But, the paper blow-up WILL be a ramification or an aftermath of the cause. If you have ever mined, dynamite needs a blasting cap to ignite. You can throw a sack of dynamite down an ore pass and watch it bounce all the way down without an explosion.

Continuing the 'backwardization' of this story, what will be the blasting cap of gold to set off the dynamite. It may be the reversal or at least the perception of, in the supply and demand statistics. It may be the fall of the dollar, $600 'equilibrium' price of gold will definitely set off the dynamite paper markets. An oil catastrophy this winter could set off some fireworks. The stock market may play into our hands as well; there have been numerous earnings warnings, another April crash could do it. Tensions in several regions of the world sparking war may be the fuse. In short, a trigger causing the 'cap' to explode will in turn light the dynamite.

My bet is a falling US dollar. The insatiable US consumer borrowing and buying binge will soon fall. The CONFIDENCE in the US dollar is hinged on the fact that they will buy and buy until every dollar is spent. US imports foster foreign economies and when this slows or stops the CONFIDENCE will fade. Dollars are handed out (money supply) so buy, buy, buy. If you hand kids money to go into the candy store do they come back with change? Never!! So when foreigners perceive the dilution of the buck or a slowdown in imports or a slowdown of economic activity the confidence in America will be questioned. Dollars will be sent home further diluting (too much paper) the currency and we know a lower dollar will cause higher gold. The turmoil conceived from this will cause the nervous nellies in the paper world to cover. The explosion in the paper market (first caused by the 'dollar blasting cap') will send gold to the moon. The resultant higher demand and possible CB withdrawal will further escalate the POG.

Result: The price of gold = $11,100US/oz. (+,- 99%)
When: Jan.15, 2001. (+,- many moons)

Note: This is a dream that occured to me last night so actual occurences as above would be co-incidental.

Al FulchinoLeigh, ET and Trail Guide#3602409/04/00; 19:41:19

Thanks for your responses directed towards me this past weekend. It was very kind of you all.
CanuckAnd the Euro/Dollar war#3602509/04/00; 19:49:01

And there's the euro/dollar 'fuse'

From another site,

"Thank you ... my gut feel is that one morning we will wake to see gold limit up in London, as a result of a news release from the European Central banks. Coming in to NY, there will be panic in the "Street(s)".

In keeping w/ my prior analogy, one might say the European CB's have a wire cutters and events are forcing them to use it.

The shorts will be crushed."


For Fair Use

Financial Post - Canada, Aug 22, 2000, 457 words

GREENWICH, Conn. - John Meriwether has apologized for the collapse two years ago of his hedge fund, Long-Term Capital Management, which sent financial markets around the world into a panic, the Wall Street Journal and the Financial Times reported.

"Our whole approach was fundamentally flawed," Meriwether told the Journal. "I feel enormous remorse."

Mr. Meriwether's fund lost US$4 billion after a debt default by Russia in 1998 prompted investors to shun corporate and mortgage-backed bonds and buy less risky, more-easily traded government securities. Fourteen securities firms and banks organized a US$3.6 billion bailout in September of that year to avert the turmoil a forced sale of LTCM's investments would have caused.

Mr. Meriwether, 52, said LTCM's investing strategy -- bets that relationships between the prices of similar securities would return to historical norms -- was sound. What the firm failed to anticipate was investor behavior during a financial panic.

"It worked well in normal times but in the crisis . . . we were left with much more risk than we expected and we didn't have the capital to support those risks," Meriwether's chief deputy, Eric Rosenfeld, told the Financial Times.

LTCM's investments included bets on Danish mortgage bonds, takeover stocks and junk bonds. Mr. Meriwether's losses were magnified because the wagers were made using borrowed money -- as much as US$50 for each US$1 of the firm's cash.

"We believed that diversity meant safety," Mr. Meriwether told the Journal. "Although high leverage doesn't necessarily mean too much risk, we did have too much leverage," he said. "The possibility of losing that much money was not part of our mind-set."

The General Accounting Office, the investigative arm of the U.S. Congress, said in a November report that the Federal Reserve system, the Securities and Exchange Commission and other U.S. financial regulators didn't adequately coordinate to identify risks that led to LTCM's problems. It said the firm's failure to follow "sound risk management practices" may have been due to "overreliance on the reputations of LTCM's principals."

"His shortcoming was that he was his own boss, unlike most other traders who are held accountable for their actions," said Joseph Pregiato, co-head of institutional fixed-income sales at Josephthal & Co." It was fortunate for him that he didn't have a boss to answer to, but unfortunate for the investors."

Mr. Meriwether formed LTCM in 1993 after losing his job as vice chairman of Salomon Brothers. He was joined by some of his top proteges from the firm as well as by Nobel Prize award winners Robert Merton and Myron Scholes. They initially raised a US$2-billion fund and, in some years, generated returns of more than 40%.

The executives lost US$1.9-billion when the fund collapsed. Mr. Meriwether lost more than 90% of his net worth of more than US$150- million, the Journal said, citing people close to the matter.

LTCM has paid back all the money it owed the firms. It made private apologies to investors, including UBS AG, which lost almost US$690 million through its work with Mr. Meriwether's firm, the FT said.

Mr. Meriwether now has a new fund -- JWM Partners. The firm had about US$400 million of assets, as of July, and returned 7% in the first half of the year, people familiar with the performance said.

All Material Subject to Copyright

Gold Trail UpdateThe Gold Trail Discussion has been Updated#3602709/04/00; 20:23:42">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
Trail GuideReply#3602809/04/00; 20:28:59

Hello Law,

Your post:

------law (09/03/00; 22:12:07MT - msg#: 35970)
Trail Guide: Questions concerning your recent posts! First of all, a very WELCOME appears you had a most fruitful and enjoyable sojourn.
I too, have had a very busy summer and have not had the available time to continue my previous and consummate lurking and occasional posting...but I'm trying to catch up with the thoughtful and intelligent commentary of the many wonderful posters who frequent here.

My Questions:(08/20/00 msg#30)
You stated, "If this continues further, and now with the blessing of Europe, it's the paper longs that may be had as the shorts are let off the hook as the market is destroyed!"

After having read Howe's excellent commentary and also Murphy's, is it your implication thatDeustch Bank is absorbing the derivatives in order to prevent Euro "bleeding" or is there another context to this statement?

Mr. Law, I fully well believe all the following:

That the Euro and EuroLand's thrust is to have gold compliment that currency in a future context. Buried deep in the trading habits of our ECBs largest bank members are many gold derivatives that were expressly created for Euro cash settlement,,,,,if,,,, and only if the ECB/BIS make good on a
FreeGold based value for gold.

We must understand that the Euro is not bleeding, it is marking time as the markets evolve from political will. My friend, Euro value is a very movable item. Just as oil was worth only $10 heading to $6,,,, and now has been politically placed at $30 heading to $50+,,,,,,,, so too will the Euro be "politically placed".

Further: I think the portion of Deustch's position that is not correlated to FreeGold has no general liability beyond a failing paper gold market. If this world wide arena is inflated into oblivion and politically settled at say $50??,,,,, who is going to hurt? Yes, the very players that were trying to leverage against the odds that Paper gold would keep the dollar going and oil priced in dollars only.
Truly, if our modern paper gold price only went to $400 or $500 that move would maintain the integrity of all the gold industry, save the paper markets at the expense of many big banks,,,,, and save the dollar for another day.

That is not going to happen! We are on the road to super high priced physical gold at the expense of the dollar,,,,, at the expense of the entire way our modern gold market is valued,,,,, and at the expense of the dollar banking system that maintains that market. In the process we will find out that """your wealth, it not what your dollar say it is"""!

Your post:

--Also: (09/03/00 msg#34) Concerning the "two ways (or a combination of both):"..."one or two government and /or private entities to pull the cord"...or..."The price of oil rises until price inflation can no longer be contained."

In the first way: Who would have the INTESTINAL FORTITUDE! IN THE "OPEN"! To
"pull the cord"???-------

Well Sir Law, anyone that begins to perceive that holding official dollar reserves makes no sense in a two currency world. Especially where the dollar maker,,,,USA,,,, is forever running a trade deficit. Indeed, why hold dollars when so many more are always coming your way? Most
especially today (amd this is the major kicker),,,, if oil is going to punch the dollar deficit through the roof at $40,,,,, how can we soak up the flood that's coming with $50 oil?

Truly, rising oil will bring the bid for physical gold and Euros and it will be a worldwide based demand. It will "initially" have nothing to do with perceived (by officials outside)US price inflation and everything to do with our ongoing US dollar inflation. Watch oil,,, it builds INTESTINAL FORTITUDE!

Your post:

---In the second way: Will the oil producers be able to withstand the political pressure that will undoubtedly be placed on them?------

My good man,,,, the pressure is on the US to maintain world dollar oil settlement! The existence of the Euro is the Master Play on this chess board! Please dig through my last posts.

Trail Guide

Trail GuideEuroGold#3602909/04/00; 21:33:39

Great Job, USAGOLD!
I'm sure CPM is the first.

You know, a "great horse" is always running for the finish line while the "near great" stay in the pack. Just trying to catch the ones in front of them!

And indeed, just like riding gold, smart people will stay with a winner.

USAGOLD (09/04/00; 11:30:26MT - msg#: 35993)
Here's the link for details on the European Delivery Program
Please e-mail your questions and comments. . . . .

Your friend
Trail Guide

And, I add, great timing! (smile)

PH in LAStradmaster's Concert & Welcome to Trail Guide#3603009/04/00; 22:13:26

Since I noticed that StradMaster offered a link to a live stream of his concert yesterday, I would like to report on the real thing from the perspective of one (myself) who was in the audience: The concert was a great success on every level... from the golden tones of his Stradivarius to the warm reception accorded the performances. Our collegue should be congratulated and future performances anticipated with pleasure.

Trail Guide:

May I add my voice to the chorus that has welcomed your return. It seemed like a very long summer without your posts.

From the tone and content of your most recent writings, it feels like the boredom may soon be a thing of the past? One minor question: Is the term "Freegold" one that you and/or Another have coined (pun noted) to denominate the new system, or is it one that is already being used by future participants in the new system and others who have occasion to speak/write of such things?

Welcome back!

JMBJOURNEYMAN#3603109/04/00; 23:06:56

Your "Questions" were not only enjoyable they were most worthwhile. Thank you, keep them coming.
[Ultimately, "money" allocates human hours.] That concept is worth the price of admission and I sincerely hope that I have rephrased it properly. If not, do not hesitate to "nail" me. <smile>

SHIFTYBill Murphy / GATA#3603209/04/00; 23:22:10

Something strange going on tonight . I just received this e-mail from Bill Murphy. Then again who can be sure ? I did received the first one also.
Hang in there Bill.



Le Metropole Members,

Good Lord. I worked a good bit of Labor Day Weekend and am now conronted with this email that was supposed to be from me but I did not let it out or said anything of the kind.

This does SUCK - and that is a "quote." I spent much of my Labor Day Holiday weekend speaking with Frank Veneroso. He has not published any material in months because he has learned that GATA's accusuations and suppositions are basically correct. He will not talk about the gold market any more because he has learned a great deal that confirms almost all of what GATA has to say and he fears if he stays too close to us that he will be killed.

This sounds like Looney Toones. But, what after what just happened tonite, I am fearful for my life too and have to get what I know out there. Who cares about being a dead martyr?

I want to enjoy my life, don't you?<p>

This is getting too close for comfort. How do YOU like to be a part of this? Rooting for a TV character is one thing, living it is another. That, I can assure you!<p>

SOME HOW and SOME WAY some internet freak and part of the "gold cabal" put out the following in some kind of internt technique. It was not me. This is horrible, behond words that I can express in this venue.<p?

Ske a Tail Feather out there. Buy gold shares- physical
gold - wake up - stop being embarrased to talk to friends
about gold investments.<p>

The Phantom email said:<p>

Tis the time to:......... Say it Loud, GATA is RIGHT and I am Proud, but who cares about GATA, I will make a fortune by investing in gold now and in gold shares.<p>

This is Bill Murphy agreeing and talking. Hound me forever if the "Say it Loud" crowd is wrong. The proof is in the pudding. HOUND ME.<p>

The deal is so much different as this pathetic American investment scene unfolds. Then, it will be what should gold stock should we go to - as in Bob Bishop of noted gold stock

<A HREF="">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron

Black BladeStrange happenings tonight.#3603309/05/00; 00:02:57

I see that Crude is up tonight +$0.43 to $33.81/bbl, pushing toward $40.00/bbl. Heating oil is also higher on supply concerns. Also Pt is now over $11.00 to $604.00, possibly headed to another limit-up session in Tokyo. Just dropped in for a quick peek while on the road. Spending the night and tomorrow in Spokane, WA., then to Vancouver, CA., and finish up in Salt Lake City, UT. Looks like maybe this week could be interesting in the markets. We shall see. A friend of mine that works for a small independent oil and gas producer in Alberta tells me that after the last couple of years of depression and concern in his corporate office, the mood is very upbeat and that the consensus is that business is going to be much better going forward. BTW, had a meal at a restaurant called "Chapter 11", I hope that was just a fluke ;-)
Strad MasterThanks PH (!) and a question for Trail Guide...#3603409/05/00; 00:47:54

Thanks so much, PH, for the public acknowlegement!! Much appreciated. Hope others here got to hear the concert, as well. I'm certainly very curious if the internet link worked or not.

Trail Guide, you write: "Truly, rising oil will bring the bid for physical gold and Euros and it will be a worldwide based demand. It will "initially" have nothing to do with perceived (by officials outside)US price inflation and everything to do with our ongoing US dollar inflation." It certainly seems like your astute predictions are starting to come to pass. Do you have any thoughts on the societal impact of the monumental changes you describe? I know that's probably not your field of interest, but still you must have some inkling of what the world might look like a few bends down the trail. Any comment would be most appreciated.

PS: It is wonderful to have you back and to be reading you once again. Makes me feel like I have an inside / ringside seat, watching as one of the most important events in modern history unfolds. Thanks so much for your ongoing commentary.

SHIFTYAsia/Pacific#3603509/05/00; 00:51:55

Lots of red ink in Asia/Pacific markets tonight!

Simply MeRE:Strad Master's Concert RE: Thankyou, Trail Guide.#3603609/05/00; 03:02:28

Hello, Strad Master. I tried to listen to your performance on my Real Player. Was able to link up to the radio station, but no sound came through. Can't explain the problem. Sorry,I was unable to listen. Took violin lessons in 4th grade on an inherited old Kopf. I was awful. I was really looking forward to hearing a master making a Stradivarius sing!

Hello, Trail Guide. Thanks for the heads up! I'll be scanning the news for clues this week. I don't imagine the American press will be giving anything away in the headlines.

Thoroughly enjoying the news and discussions here.
simply me

AristotleMotivations#3603709/05/00; 04:57:52

Cavan Man, you make an excellent point. In offering the view that if this market were populated by participants operating with full awareness that the market positions had no obligation for physical settlement--even if for no other reason than the participants' own agreements to enter and exit their positions with cash settlement (like betting on the Super Bowl)--you suggest that the participants would be inclined to carry onward with "business as usual," caring not a whit for the underlying disassociation of metal realities as compared with the pricing "realities" that they "define" (or "discover") themselves through their own paper trading arena.

(OK, let me stand back and try to absorb what I've just written. It's horribly constructed, but the best I could do in one breath.)

Perhaps the key here is for us to take a very close look at what "business as usual" is, exactly. In consideration of this, you suggested ----"if gold market traders are content with the paper game to settle their "bets", won't it take a large BELIEVER(s) in the metal to create a marketplace more to their liking? If not, why not?"----

Part of our assessment of "business as usual" would require that we understand the motivations that drive each the buying side and the selling side to place their bets in the first place--assuming, per your request, that they they harbor no notions that metallic settlement will be sought or attempted, irregardless of its impossibility.

Obviously, the typical to large player who seeks Gold does it directly and for immediate delivery through the likes of our host here at USAGOLD, whereas the really big players capable of moving markets would likely make less direct arrangements. In neither typical case is the acquisition of Gold pursued through the futures market. Now if we pause here for a minute, doesn't it strike us as odd that the some of the futures players are seemingly placing leveraged bets to profit based on whether this metallic demand driving prices higher or lower--and yet it is their placement of bets (and the subsequent trading thereof) that currently dictates this price level under speculation? With futures operating under such an unattached-to-physical-settlement / business-as-usual sentiment, we can maybe agree on two things--
1.) that the trading action of these futures is driven by the traders' own expectations of futures price movement and has nothing to do with the quantity of physical Gold movement occuring concurrently and as a result in the "real world," and
2.) because traders are seeking leveraged profits with their margin money based on the price movements of these futures contracts, the actual price LEVEL is irrelevant to them--except that at lower prices, the same small price swing translates into a higher percentage payout versus the number of contract positions that could be held against any fixed quantity of margin money with which to participate in the speculation.

Due to its universal acceptibility and stability, Gold functions as nearly the ultimate end in the pursuit of wealth, whereas dollars are only the transitionary means as a "necessary evil" toward gaining these ends--and "big/smart/old money" knows this. They are not likely to pass up gaining Gold at these prices in favor of paying up the margin on a host of contracts. We could say that these physical buyers have already "walked away" from the futures markets.

So who's left as the participants in the paper market providing this currently accepted method of price discovery, and what are their motivations? In light of the big picture, the participating longs are relatively and collectively a "babe in the woods" against those willing and motivated to participate as shorts in this environment. Beyond the selection of industrial or institutional longs that likely have legitimate interest in short term price hedgeing, the balance of the longs would be an assortment of uninitiated Goldbugs not particulary well-versed in monetary history who are unwisely throwing themselves on the mercy of a market meant to serve a purpose other than to provide for their enrichment through rising Gold prices. On the contrary, these paper-Gold markets were instrumental in propping up the valuation of the dollar at the expense of Gold when convertibility failed finally in 1971. Just consider this--the dollar convertibility didn't fail because big players were clamoring for ways to turn their dollar holdings into yet more dollars; they were pressuring to absorb any available Gold as preferable to holding dollars due to the ongoing U.S. trade deficit and swelling Eurodollar accounts. Some of the biggest players are still holding the bag, and it would be only the naive and uninitiated who might believe Gold has fallen out of favor while the dollar has somehow been miraculously cured of its ills in spite of the last 30 years of swelling trade deficits.

As the remaining naive long participants come up to speed, they too will see themselves to have been duly distracted and chasing goals that never could fulfill the goals of building wealth, leading them in turn to walk away from attempting to buy Gold's price (derivative), and to focus on buying Gold's weath (metal).

As for a "large BELIEVER" that you mention, any among a number of central banks that have been stuck with large dollar holdings (and very little hope of converting them for anything of value) will fit your description. While the illusion of the value of their dollar holdings will surely be lost in any attempt to dishoard their dollar accounts, their goal must necessarily now focus on allowing an appreciation of their current Gold assets to compensate them for their lost value that the dollar policy has handed them over the decades.

Gold. Get you some. ---Aristotle

wolavkaGold set#3603809/05/00; 05:21:33

Dec gold , breakout points
282 284 289

Commodities set to move higher, gold will respond.

LeighSaudis To Use Euro Currency#3603909/05/00; 05:39:51

I'm surprised no one has remarked on Caper's article from last night:

Caper (Makin Da Switch) ID#277242:
Riyadh set to switch to euro
Riyadh (Reuters) - Saudi Arabia has issued a circular to all chambers of commerce in the kingdom directing them to stop using various European currencies and to switch instead to using the single European currency, the euro.

The Commerce Ministry said in the circular obtained by Reuters yesterday that the Saudi Arabian Monetary Agency, or central bank, would start using the euro ($0.891) from September 13 in all its foreign currency accounts instead of the individual currencies of the 11 countries in the euro zone.

"We hope that you will notify all chambers of commerce and industry stop using the currencies indicated in all payment orders...and to use the European currency, the euro, instead," the circular said.

The Saudi Arabian riyal is pegged to the dollar. The euro was launched at the start of 1999, but euro coins and notes will not enter into circulation until 2002.
They can't exactly demand euros for oil until they actually are up and using euros! Also, isn't September 13 supposed to be an eventual day Mid-East-wise? Could this switch to euros be part of that?

LeSinEuro Use @ Leigh#3604009/05/00; 06:19:13

Thank you for the reminder. The announcement of the use of a single European Currency 'Euro' instead of the 11 individual currencies was known. However as you so stated - IT IS UPON US. Imagine, soon every Country in the World will be making similar announcements as did the Saudia Arabians. They have a need to lead because of Oil Settlements and to get their houses & Gold Stores in order quickly.

FOA/TG & Another, I trust, can comment so much better than I on this matter? Please Sirs? I am certain that we will here more from them about this subject soon and at an ever increasing frequencies. "S"

Note: The wild Conversion Rate Swings this morning EURO v US$ v Yen. Swings making Precious Metals look increasingly STABLE, yes.

nickel62THE REAL REASON THE END OF THE GOLD MANIPULATION IS COMING!!!!!!!#3604109/05/00; 06:25:30

The political flexibility of Rubin/Goldman Sachs et all to manipulate the US dollar higher by pounding the base it is measured in down(gold spot price)is going to get harder to maintain as the awareness of the political heat growing on the damage being done to US manufacturers and the labor that works in manufacturing focuses attention on the manipulation of the US dollar and gold. See story below for simple understanding of why they are manipulating gold.It is that most of the supporters of the Democrats benefitted from a strong dollar policy. Wall Street bubble beneficiaries and Hollywood moguls and Dot com/High technology manufacturers whose ability to raise billions through stock option and share issusance scemes overcame the negatives of higher US prices, especially since their costs were largely from manufacturing in China and Taiwan. THe largely republican US based manufacturers were sacreficed in the name of the Clinton/Rubin good times floated on a sea of paper money and a tightly manipulated gold price that gave "value" to the US dollar by comparison.
Top Financial News
Tue, 05 Sep 2000, 7:57am EDT
U.S. Economy: Some Companies Pay For Strong Dollar, Economy
By Tammy Williamson

Washington, Sept. 5 (Bloomberg) -- The euro's 12 percent drop against the dollar since January 3 has beaten up on shoemaker Reebok International Ltd. along with other U.S. companies selling auto parts, chemicals and just about everything else in Europe.

The decline in the European currency, which traded at a record low of 88.37 cents last week compared with $1.03 on January 11, means a pair of training shoes selling for 87 euros in Germany this year was worth anywhere from $77 to $90. The cost in exchanging euros for dollars eroded Reebok's sales by more than $10 million in the quarter that ended June 30 compared with a year earlier.

Reebok's example underscores a paradox of the record economic expansion that has kept the dollar rising and made U.S. investments attractive to overseas investors. Even as the dollar's strength has helped keep inflation in check by holding down the cost of imports, dozens of companies across a range of industries are paying a price through diminished earnings.

``Despite the economy slowing a bit this year, it's still healthy and vibrant and we still have a strong U.S. dollar,'' said Jake Dollarhide, vice president and portfolio manager of Fredric Russell Investment Management Co. in Tulsa, Oklahoma. ``U.S. companies whose sales are dependent upon European countries -- their profits will continue to be reduced or hurt by the weak euro.''

Goodyear Tire & Rubber Co. received less for tires than it would have without the slump; Whirlpool Corp., less on its appliances; and Hercules Inc., less on its paper-making chemicals. Reebok's rival, Nike Inc., also had to sell more cheaply. In all, 206 companies in the Standard & Poor's 500 index did business in Europe last year, according to S&P CompuStat, a database.

Reebok and Nike

Reebok, based in Canton, Massachusetts, reported July 25 that its worldwide sales of the Reebok brand in this year's second quarter were $559.6 million, down 1.8 percent from $570.1 million in the second quarter ended June 30, 1999. The company said sales would have grown by $1.6 million without currency fluctuations.

Nike reported that its European revenue would have grown 23 percent in the quarter ended May 31 without the change in the euro. Instead, revenue grew 8 percent.

U.S. athletic shoe companies are competing for a rising European market and against Germany's Adidas-Salomon AG.

The strong dollar may be spelling deeper trouble for U.S. companies. Since the end of June 1995, the dollar has gained as much as 24 percent against the currencies of its trading partners and most recently was 21 percent higher.

Manufacturing Weak

``The U.S. is losing market share because the dollar's high,'' said Robert Mellman, an economist with J.P. Morgan Securities in New York, in an interview. ``You can see that in the auto industry, where imports are rising. You also see it with producers of steel and commodity chemicals.''

The growing strength of the dollar has aggravated the decline of U.S. traditional manufacturing at the same time U.S. production of chips, communications equipment and computers has expanded, Mellman said in a recent analysis. The last Federal Reserve report on industrial production showed that excluding the manufacture of computers, semiconductors and communications equipment, output rose 0.1 percent in July, compared with 0.4 percent overall.

``Whether high-tech manufacturing can remain immune to the effects of an elevated dollar is an obvious and important issue,'' Mellman said in his report.

Consumer Spending

U.S. spending on consumer goods has grown between three times and four times as fast as production since the mid-1990s, the study says. Overseas companies are filling the gap. While part of this reflects the underlying trend of moving mills and factories to lower-cost sources overseas, the appreciation of the dollar has played a role -- especially in the rising import share of foreign- made autos and parts, Mellman said.

Volkswagen AG, Europe's largest automaker, is among the overseas companies gaining a larger share of the U.S. market. The company reported Friday that U.S. sales of VW-brand autos rose 5.8 percent in August, compared with a year earlier, on record sales of Jettas and Passats. Sales by the Audi luxury unit gained 10.7 percent. Audi is having its best-ever year in the U.S., with sales up almost 33 percent in the first eight months of 2000.

A reason for the attractiveness of the dollar is the record U.S. expansion combined with the Fed's target lending rate for overnight loans between banks of 6.5 percent -- the highest central bank benchmark rate among the Group of Seven large industrial nations. European central bankers last week raised the main refinancing rate a quarter point to 4.5 percent to keep inflation in check.

The Outlook

The euro gained against the dollar on Friday because reports showed U.S. unemployment rose and U.S. manufacturing declined in August -- both signs of cooling. Traders nonetheless expect the euro's rise to be short-lived because investors are still more confident about economic growth in the U.S. than in the 11-country euro region.

``European investors will be attracted to the U.S. companies, possibly leading to more funds flow from Europe to the U.S.,'' said Shigeru Hashimoto, foreign exchange manager at Sanwa Bank Ltd. In Tokyo.

While currency problems aren't new, the decline in the euro - - introduced in January 1999 and originally trading at $1.17 per euro -- caught many companies off guard. ``Most investment houses had expected the euro to strengthen last year and this year,'' said Marc Chandler, chief currency strategist at Mellon Bank in New York.

Hedging Didn't Work

That's a reason fewer companies benefited from such hedging activities as buying Eurodollar futures or entering into custom- made derivatives contracts.

Global companies do get benefits from financing business or purchasing goods and services in local currencies. McDonald's Corp. buys most of its cheese slices for European burgers from Golden Vale Plc, based in Ireland, which uses the euro as its currency. McDonald's also reported in July that a stronger Japanese yen ``partly offset'' the damage from the weaker euro, Australian dollar and British pound.

The difficulties for U.S. companies could ease, analysts say. The growth differential between the U.S. and its trading partners should disappear in 2002, according to analysis in August by Chase Securities Inc. If cooler economic growth in the U.S. keeps interest rates from rising, foreign currencies could strengthen.

``At that point, U.S. minivans, SUV's, and trucks become more attractive abroad,'' said Chandler.

©2000 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.

Cavan ManRams 41/Broncos 36#3604209/05/00; 06:44:47

MK-The Broncos will definitely be a contender this year and I thought Griese looked teriffic!

However, since a tie is like, "kissing your sister", as we used to say in the neighborhood, I look forward to our next meeting and cup of coffee. Kind regards....CM

Black Blade"Morning Wakeup Call - On the Road"#3604309/05/00; 06:49:10

Sources: Financial Times and theminingweb

Gold miners still hedging bets
By Gillian O'Connor
Published: September 5 2000 02:41GMT | Last Updated: September 5 2000 06:19GMT

The rapid growth in the gold derivatives market, in which miners Ashanti and Cambior ran up heavy paper losses last year, has peaked and derivative contracts, used by mining companies to protect and improve revenues, are becoming less complex. But miners are likely to continue hedging, despite the wave of anti-hedging sentiment that followed last year's price spike. These are some of the conclusions of a study by Jessica Cross of consultants Virtual Metals, published on Monday by the World Gold Council, a marketing organisation founded and funded by some of the largest gold mining companies. One factor that distinguishes gold from other commodities is that there is a large stock of metal above ground - much of it in central bank vaults - with no natural buyers. This surplus has become the basis for a large and sophisticated derivatives trade. The gold derivatives market, which has doubled in size twice in the past decade and reached a peak of 5,500 tonnes late last year, has thrived because central banks are willing to lend metal cheaply to earn at least some interest on this part of their reserves. If they could not do this, more might be tempted to sell, given that central bankers are increasingly questioning gold's role in reserves. The fact that gold loan rates are normally well below other interest rates has encouraged miners to hedge (sell future production through forwards and options) because they can receive more than by selling on the spot market.

Hedging has become a way to supplement miners' profits, not merely protect them. This accelerated selling has helped depress spot prices, while low gold interest rates have encouraged hedge funds and others to borrow gold cheaply and invest in higher yielding assets. In the first half of last year, as the gold price was tumbling, some gold enthusiasts spoke of an international conspiracy to depress prices. But as Ms Cross states: "No evidence was found of any collusive behaviour on the part of market participants to manipulate the price."

Most derivatives trading (60 per cent) was by the miners themselves. With a few notorious exceptions, hedging has been so beneficial to miners' profits that it has allowed them to defer the full consequences of falling prices. Ms Cross suggests this has "more than likely delayed mine closures, probably delayed mergers and the restructuring of the industry and . . . encouraged expansion of the reserve base". After last year's price spike, which followed the Washington agreement in September by European central banks to limit gold sales and loans, sentiment turned against hedging - particularly some of the high risk- high return "exotic" products, blamed for aggravating problems at Ashanti and Cambior. In February, several producers foreswore new hedging, which produced another price spike. Ms Cross says the switch towards "plain vanilla" products looks set to remain, but will pose problems for both miners and bullion bankers.

Miners cannot afford to give up hedging, but their profits subsidy will shrink. Meanwhile, those with low credit ratings may find premiums loaded against them - assuming the banks are unable to impose margin limits more generally. Gold Derivatives, by Jessica Cross. Available from the World Gold Council, +44 (0)207-766-2709.

Black Blade: If a Au company must sell forward to exist, then they have no reason to be in the business. I only bet on unhedged, profitable, largely debt-free and growing Au companies like Harmony (HGMCY), Franco-Nevada (FN), and Goldfields (GOLD). The most profitable Au companies are all unhedged with perhaps the exception of AngloGold (AU). I think that these companies that forward sell (short) their product have no confidence in their product. If they have no confidence in their product, why should anyone else? They should take a very close look as to why they are in business and reread the fine-print in those derivative contracts. Yeah, forward sales were a stellar success for Ashanti and Cambior! If you got Au companies that are hedged, then tread on at your own peril. I'm only going with the unhedged companies above and physical. If investors bailed out of the forward sold companies, then they would hopefully get the message that investors want a profit, not just tread water without gains from a future rising POG.

Gold producer hedging is set to contract

Gold producer hedging could well contract in the next few years, according to a study on the gold derivatives market for the World Gold Council. The trend change, which is the first in fifteen years, indicates that exploration and the mining of new gold projects could slow down markedly unless the spot price of gold rises substantially. But since there are still huge above ground central bank and private inventories of gold, the contraction in hedging will not be sufficient to boost the gold price, according to the study. Both jewellery and investment demand must grow to achieve this aim. Jessica Jacks head of precious metals consultants, Virtual Gold and an authority on gold derivatives, conducted the study on behalf of the council. She calculates that the amount of gold in the lending and swaps market i.e. total liquidity in the gold derivatives markets, at the end of December 1999 was 5 230 tons and 90% of the supply came from central banks. The gold derivatives market has doubled every five years, but growth is likely to decline in coming years, mainly because mines will cut back on hedging, contends Jacks. At the end of last year, the nominal hedge book of the mines totalled 4,038 tonnes or 158% of total 1999 output. This compares with 3 908 tons in June 1999 and 3,048 tons in December 1998. But net hedging, as a result of reducing and reinstating hedge positions within a contract period, was a much smaller 3,021 tonnes at the end of 1999. North America represented one third of the hedge book, followed by Australia nearly 30% and South Africa almost 25%.

Jacks concludes that speculative bear sales or purchases in the derivatives market could accentuate volatility and upward or downward movements, but do little to alter trends. She estimates that the net short positions of banks, hedge funds and other speculators fell to 394 tons or 7.5% of the total derivatives position at the end of December last year. In June last year, net bear positions were a much higher 647 tons or 13% of the total. That contributed to higher volatility and the sharp short covering third quarter rally, but the greater proportion came from mines covering hedge positions. Certainly, that small percentage is insufficient to drive down gold for long periods and cannot be the cause for the miserable performance of gold in the past decade. Her research findings suggest that a "number of fundamental factors are likely to precipitate a change in the international gold hedge book". First, the average realized price on hedged gold of marginal producers in North America and Australia are not covering costs of production. Thus producers will be discouraged from borrowing gold from central banks and using the proceeds to finance projects. Second, the sudden surge in prices in September and early this year are also discouraging producers to sell production forward i.e. hedge via exotic derivative instruments. This limits the mines from selling forward to finance future projects. Margin calls are a major disincentive. Third, the introduction of the new FAS133 (US Financial Accounting Standards Board Statement 133) accounting system is another deterrent against off balance sheet hedge transactions.

Jacks says that the huge above ground inventories and dearth of investment demand has created a tendency where the gold derivatives market favors the short (bear) side of the market. Had investment demand been higher, derivatives participants would have traded on the "long" i.e. bull side of the market. In short, the tail isn't wagging the dog.

By: Neil Behrmann

Black Blade: A slightly different take on the same study. As the hedgers drop like flies as the cost of production remains high and the companies high-grade their deposits, the profitable unhedged companies can pick over their carcasses for the best assets and the bullion banks are left holding the bag for the forward sold hedges (remember Dakota Mining?). One can also wonder that if Au drops, then why wouldn't some companies buy physical cheap and unwind some of the hedge-book for a quick and easy profit (much like AU and GOLD did last year at one of the BOE auctions)? Meanwhile, I'm still long the best companies and physical Au, Ag, Pt, and some numismatics.

Meanwhile, before I head out, NY Crude Oil is up +$0.62 at $34.00/bbl on its way to $40.00/bbl and beyond! Distillates are also looking strong! Au is off $1.40, Ag off 2 cents, Pd (why do I bother? It's a dead market) is down -$8.00, and Pt is up +$2.00 and continues to bounce around $600.00. Markets look about neutral at the start. I'm on the road, and will try to keep up with all the excellent posts for the next few days.

Leigh (#36039): I saw that last night. I wasn't sure if this is the prelude to a switch from the dollar to Euro for oil that has been alluded to by FOA and Another. Could get interesting, yes? Maybe FOA/TG or even Another could tackle this in more detail if they get an inside look.

ChristopherSaudi to Euros!#3604409/05/00; 07:03:06

Even those of us who are situated at the back of this classroom can not help but notice that this seems to be of great importance, an ominous death knell of the mighty Dollar. Is the end so soon upon us?
Trail Guide, which way do we go?


SharefinThe Financial Gold Storm#3604509/05/00; 07:13:48

Gold derivatives market growth to decline

In derivatives you're either long or short.
Yet Jessica states "The derivative market in gold by end-1999 was represented by a total of some 5 230 tons of metal," Cross told industry experts gathered for a presentation of her research.

Of this, 387 tons were implied short positions, compared with 393 tons out of a lesser total 4 904 tons at end-June last year."

What about the other 4,500 tons?

"One factor that distinguishes gold from other commodities is that there is a large stock of metal above ground - much of it in central bank vaults - with no natural buyers. This surplus has become the basis for a large and sophisticated derivatives trade."
How many times over-subscribed were the London auctions?
Continually time after time.
With even miners stepping up to buy cheap gold.

How come if there's no "Natural Buyers" that we're seeing one after another country selling off their reserves?
Never a mention of the buyer but always the sellers are loudly announced.
For every seller there's a buyer and obviously they're happy to take it up at these prices.
How many tons this year sold by this method?
If the buyer's weren't there the price would plummet or no sale would take place.

"The gold derivatives market, which has doubled in size twice in the past decade and reached a peak of 5,500 tonnes late last year,"
Perusing the Derivatives report from the OCC
First quarter 2000 -- 184 KB PDF
Taking one ton of gold to be worth approx $10,000,000, we can see that it's presumed that the total derivative markets on gold are in the vicinity of $55,200,000,000 or 55 billion.

Yet from the OCC derivatives sheet they total up the derivatives on gold as being the following from page 16:
96Q1 - 63.3 billion
96Q2 - 59.3 billion
96Q3 - 69 billion
96Q4 - 61.8 billion
97Q1 - 62.6 billion
97Q2 - 56.6 billion
97Q3 - 66.1 billion
97Q4 - 68.8 billion
98Q1 - 70.5 billion
98Q2 - 75.6 billion
98Q3 - 79.7 billion
98Q4 - 73.6 billion
99Q1 - 72.8 billion
99Q2 - 67.4 billion
99Q3 - 91.3 billion
99Q4 - 92.5 billion
00Q1 - 99.5 billion

So from following through these numbers we can see that it's only in the last year that the amount of derivatives have expanded considerably, with the latest numbers showing no slowdown.

With the greatest increases showing in under 1 year contracts and then 1 to 5 year contracts.

Using our rate of $10,000,000 per ton these figures would account for almost 10,000 tons.

Please note:
*Note: Figures above exclude foreign exchange contracts with an original maturity of 14 days or less, futures contracts, written options,
basis swaps, and any other contracts not subject to risk-based capital requirements.
*Note: Currently, the Call Report does not include maturity breakouts for credit derivatives. Credit derivatives have been excluded here.

Now if we have a look at the three biggest banks holding gold derivatives we see that: page 26
MORGAN GUARANTY holds approx $36,300,000,000 (1/5 of it's entire asset base)
CHASE MANHATTAN BANK holds approx $31,500,000,000 (1/10 of it's entire asset base)
CITIBANK holds approx $11,800,000,000 (1/33 of it's entire asset base)

For a total of $79,700,000,000 in gold derivatives.
With a total for all US banks at $95,542,000,000

Which adds up close to my earlier guess.
Almost double what is being claimed
And this is only in the US.

We then peruse Reginald Howe's excellent money trail and see on this page - about 3/4 way down

Deutsche Bank holding $51,200,000,000 or 4934 tonnes
Dresdner Bank holding $15,300,000,000 or 1472 tonnes
UBS OTC holding $74,100,000,000 or 7151 tonnes
Credit Suisse holding $18,000,000,000 or 1736 tonnes

The total of the above US & European banks comes out to a massive 28,243 tonnes.

Almost five fold what is being claimed and all the data shows that these numbers are on the increase (up to 1Q 2000)

What about the English gold haters???

The fact that gold loan rates are normally well below other interest rates has encouraged miners to hedge ( sell future production through forwards and options ) because they can receive more than by selling on the spot market.

We can see in the below lease rates that leading up to the POG breakout lease rates where rising considerably.
Presumably the rising rates were a product of traders reviewing their positions and readjusting their positions.

Now we see a benign lease rate which seems to indicate that few are doing little with their positions and there's little interest in leasing more gold.
(If they can't entice people to lease their gold then they've got to drop their rates to become more attractive.)

In the first half of last year, as the gold price was tumbling, some gold enthusiasts spoke of an international conspiracy to depress prices. But as Ms Cross states: "No evidence was found of any collusive behavior on the part of market participants to manipulate the price."
The above statement is as much bunk as the above assertions.
It's well know amongst the industry that many of GATA's suppositions are in fact correct.
One only need to watch the POG on opening and to observe the traders doing the bidding.
Also observing the massive build-up in derivatives one can sense that an awful lot of money and effort has been put into holding the price of gold down.

Most derivatives trading ( 60 per cent ) was by the miners themselves.
The above numbers released by the banks seem to make the above statement ludicrous.
Does she infer that miners are carrying 30,000 plus tonnes of derivatives???

With a few notorious exceptions, hedging has been so beneficial to miners' profits that it has allowed them to defer the full consequences of falling prices.
It appears that there has been a definitive attempt to force the price of gold lower.
I would hazard a guess that miners have been forced into hedging because of the price falling.
Had not the price been pushed downwards then there would have been little need for hedging so extensively.
So the miners have been forced into hedging just to stay alive.

Ms Cross suggests this has "more than likely delayed mine closures, probably delayed mergers and the restructuring of the industry and . . . encouraged expansion of the reserve base".
I would suggest that goldmines forced to run on low gold prices have been forced into closing mines earlier, high grading and agreeing to unscrupulous deals being forced upon them by the banks.
With little surplus cash to run on there's been little exploration in compression to the earlier years around 1994 - 1996 when the gold price was rising and every miner was drilling and buying up as many prospective tenements as they could.
We can well see in the last few years how many miners have been forced out of gold mining and to seek more lucrative returns by turning to internet services.
Many miners have been beaten back to such levels that they cannot raise the necessary capital to explore and develop potential mines.
Back in 1996 there were dozens of small to medium size mines opening for production.
Now in 2000 only the big cashed up companies can afford such luxuries.

Now we're looking at a mining base where many of the smaller companies have folded or moved on.
Resources have been picked over by high-grading so that some companies will be faced trying to extract profits from poorer grade ore with rising costs.
Having to contend with rising inflation and over priced fuel.
Many companies have been discounted (due to abysmal performance) to such an extent that their reserves & cash assets are worth far more than their scripts.
Takeovers are now on the increase as the few monster capitalized companies are moving around and picking up what's left of many fine companies for cents in the dollar.

The industry has basically been wrecked - global production is currently falling
And all that will be left of many small functional companies will be taken up by the remaining behemoths.

I intrigues me how the World Gold Council can release such bunk with incorrect facts contained if not for the purpose of covering up what is happening within these markets.

I feel that they should be taken to task for this and the real truth should be released.
Many small third world countries have suffered and will continue to suffer due to the negligent actions of the industry in looking after itself.

And in the long run the few companies that will weather this financial gold storm well will be the biggest US Gold companies.
Swallowing up all and every cheapened asset that has been forced in price down to the bedrock.

It almost appears like an American conspiracy!!!!!

wolavkabuy back in dec gold#3604609/05/00; 08:08:22

CoBra(too)Re - Sharefin's tace on Jessica Cross - re gold derivatives#3604709/05/00; 08:28:50

Sir Sharefin,
I can't agree more with your latest post and thank you for posting it here as well, I guess. The numbers add up to stunning levels of shorts, if you take Reg's count on BB gold derivatives into account. So, even if it's only leased - meaning still carried on the books of CB's- the nature of these derivative instruments means that somebody in the chain - CB(leased)-BB-Hedge Fund or other sold physical into market, leveraged the proceeds to higher yielding financial "assets"- a word, which may become obsolete in the future- and the BB's still hold the obligation to deliver the physical back to CB's.
Physical gold, a hard asset not multiplying at the whim of anybody's "creative" credit creation schemes - and according to the above - has "virtually", or is it in hard reality owed to CB's, which can never hope to retrieve it. ... So far for AG's counterparty risk statement, that CB's stand ready to fill any void, or kill any rally in gold ... and since you're from the land of Oz you'll understand the last lines of a WWII song from emanating from your great country:
" As we stand a'loof
They can't sh.t at on the roof
The only place clean
In our latrine!"

As I've been following your posts for a couple of years as of lately I didn't find time to scroll Kitco for the bones. Though I've been perusing your website quite often - what great work of putting it together - Thank you and best to you -cb2

@ MK - Always a pace ahead of the pack - great to have direct (delivery!)access over on the old continent to some of your outstanding offers! Tku and all the success, which is due to you - cb2

714Aristotle. you asked...#3604809/05/00; 08:51:01

"Please consider what it is that underlies this fiduciary media we call the dollar, and then accordingly, how is it that the fiduciary dollars will be "devalued" against this same underlying element--whatever it is?"

Psychology underlies the creation, and destruction, of all
money, yes? In some parts of the world, in a different age, men found seashells desirable as a medium of exchange. Here in America, some natives took beads and trickets to be money. And when the United States was in the process of being founded, the "continental" was created by the government as a medium of exchange, but failed when people no longer believed in it and what it promised, leading to America's first financial crisis. The continental is, indeed, an interesting study. The crisis led to the creation of a stable US currency. Money is a game of confidence.

And so it is with gold and the US$. Gold has a very long history as money. Thousands of years. And this is its strength. The US dollar, once based on gold, began to be separated from it by the Gold Reserve Act and the subsequent administrative regulations. The GRA was part of a larger movement around the world to weaken the gold standard and eventually do away with it. Why? The gold standard limited the creation of money (there's only so much gold, yes) and inhibited the growth of credit. Note that the European powers went off the gold standard temporarily when WWI began, because it limited their ability to wage war by limiting their credit.

So the GRA took gold out of circulation in America, thus ending its role as a currency, but gold still retained its monetary qualities by virtue of its being held in the CBs as a reserve asset. And the US$ evolved, through a series of agreements (and its isolation from the ravages of WWII), into what we have today...the world's reserve currency. And CBs came to realize the by holding US$'s, they could utilize interest-bearing instruments to earn an income on that reserve asset that was not possible for their gold reserves until the rise of derivatives in the last 20 years. But by then it was too late for gold. The US$ carried far more weight in the world's monetary reserves, and more importantly, in world trade, than gold ever could.

The upshot of all this is that ALL money, including gold, is a commodity. That is, it is something useful (see dictionary). And in a credit economy as we live in now, the US$ and paper is far more useful than gold. But like any commodity, it value fluctuates on supply and demand, as we saw in the early 70's with the US$'s devaluation, which was highlighted by oil prices. But it was not caused by oil prices, or the oil-for-gold trade (which is very small). It was caused by a LOSS OF FAITH in its value. Nothing more, nothing less. The dilemna of CBs who want out now is that they are married to the dollar, by virtue of their holdings, and it would be a very expensive divorce.

As for fiduciary gold contracts, they are NOT gold contracts. They are dollar contracts. The gold business today is like this: take one part gold, ten (or twenty, or fifty) parts dollars, throw them into a big pot, like Comex, stir well, at a constant valuation, and, voila, you have the paper gold trade. All that it takes to keep this trade going is a relatively constant valuation between gold and the US$, and some physical to cover the interest on these contracts. It can go indefinitely, as these contracts can generally be rolled over. Let the valuation between the dollar and gold change, and the short-covering will be massive, lending itself to a rapid rise in POG, a hint of which we saw last September. And with the world's CBs continuing to sell off the gold reserves and a real lack of interest in gold on investors part, I cannot see POG rising before the US$ is devalued.

Why do I think the US$ will be devalued at some point? Look at the US trade deficit. One can only promise the moon for so long before there is a loss of faith, a loss of confidence. And that is the downside to a credit economy.

A friend of gold is a friend of mine....

CoBra(too)My typo's are getting out of hand - "my take" ... sorry#3604909/05/00; 08:55:49

... So is the $-Index - up again to almost new records - +0,95 and the euro - close to all time low 88,35 - only the POO is slowly gaining ground, while POG is pounded, or is it "'ounced" in these days of "virtual" supply?

USAGOLDEuro Crisis Looming?#3605009/05/00; 09:02:48


(9/5/00) . . .Gold weakened
overnight as the euro plummeted and oil soared.
Though such incongruities might befuddle the
reader at first glance, one should keep in mind
that Europe must buy the dollar first, then oil
-- a situation which translates to the citizens
of the EU depressing their own currency in
order to buy crude. Forex speculators
understand all too well the direct line
relationship between oil prices and euro value,
play the hand dealt them, and exacerbate the
euro tumble on nearly a daily basis. The
Europeans do not find this comforting, and the
way things are going we wouldn't be surprised
to see the EU slip into a crisis mode if things
don't improve. To be sure, over the long Labor
Day weekend in the United States, the French
central bank, in the person of governor
Jean-Claude Trichet, blasted "speculators",
according to a weekend Reuters report, and
accusing them of "flagrant underestimation" of
the euro's value. This euro weakness, along
with weakness in the yen and Swiss franc
against the dollar, is being blamed by analysts
for gold's weakness this morning.

The European and Asian gold markets were quiet
this morning though under the circumstances one
can only wonder why. It will be a light report
week with Productivity on Wednesday being the
most important. We also have Consumer Credit on

That's it for today. We'll see you here

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anti-gold financial press mentality? If
you want a fresh view of the gold market go to
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And stay tuned here for our Daily Commentary.

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gold investors.

goldfandollars for oil#3605109/05/00; 09:02:58

Question: As the US$ Price of oil rises, other countries have to increase their prices for goods sold to the US to get more $ to pay for oil, n'est ce pas? What is the logical outcome of this recursive cycle, as the POL inflates, everything inflates??

Thanks for any comments


wolavkawatch grains fill gap#3605209/05/00; 09:11:25

stuff a dollar in your mouth, tastes good.
Al FulchinoFor you Black Blade#3605309/05/00; 09:35:52

hope it pastes well:


PARIS, Sept. 5 — Petrol shortages crippled service stations around France on Tuesday as truck owners protesting against rising fuel prices tightened their grip on supplies and urgent high-level negotiations failed to find a compromise.

CAR DRIVERS queued bumper-to-bumper at stations selling petrol — some under strict quotas imposed by local authorities — or cruised around town searching for more supplies.
Late-night talks between Transport Minister Jean-Claude Gayssot and the truck owners broke up without agreement, with the protesters demanding cuts in fuel taxes of about 20 percent. Gayssot was only ready to offer about half that amount.
"We didn't reach agreement because the gap separating us on the indispensable cut in fuel tax is still too wide," Rene Petit, head of the Federation of Road Hauliers (FNTR), told reporters when the talks broke up after midnight.
Interviewed on France Inter radio on Tuesday morning, Gayssot said, "I hope things will unblocked soon."

The truckers’ protest, which has been joined by farmers, ambulance drivers and other workers groaning under rising fuel prices, started on Monday on the heels of a fishermen's blockade of ports which stranded thousands of British tourists last week.

That movement ended when the government agreed to compensate fishermen for a 75 percent rise in the cost of untaxed fuel.
The protesters, who simply have to park their trucks outside the entrances to refineries and fuel depots to cut off supplies, have blocked almost all wholesale fuel sources in France, oil industry associations and truckers groups said.
Many filling stations have run dry, especially in cities in the east and south-east such as Lyon, Marseille and Grenoble.
By Monday evening, thousands of vehicles had joined the protest that affected 80 facilities throughout France, she said.
In the area surrounding the southern port city of Marseille, 30 to 40 percent of gas stations had run dry, the regional police headquarters said. In eastern France, many drivers headed to neighboring countries to buy gasoline.

The prefect (government representative) in Lyon ordered 12 petrol stations to turn back motorists and supply only doctors, hospitals, emergency services and firefighters.
Prime Minister Lionel Jospin promised at the weekend to study ways of easing the impact of soaring fuel costs on truckers who pay diesel fuel between 4.50 francs ($0.61) and five francs a liter.

• MSNBC Cable coverage
Watch MSNBC Cable for coverage of this and other stories

Among the crippled installations were major refineries in Feyzin near Lyon, Donges near Nantes in the west, Reichstett near Strasbourg, Fos near Marseille and Gonfreville and Grand Couronne in Normandy.
The protesters were also blocking river oil terminals in Strasbourg and Lyon, and stopping trucks delivering fuel to the airports of Mulhouse-Basel and the Riviera capital Nice.

The Associated Press and Reuters contributed to this report.

wolavkacan't hold it down forever#3605409/05/00; 09:38:22

No way they can hold gold back, it's gonna go, wake up call.

Time has come to hold someone responsible.

wolavkaTexas burns up#3605509/05/00; 10:21:29

Move to Maui. House of sun and Gold.
oldgoldSharefin#3605609/05/00; 10:21:32

The World Gold Council has got to be the most incompetent and ineffective trade group of all time. They are like sheep being led to the slaughter.
beestingSharefin # 36045.#3605709/05/00; 10:24:12

Great Post Mate!
So Glad to see you here!!!

SHIFTYEight die in Australia ghost plane crash#3605809/05/00; 10:40:45

BRISBANE (Reuters) - Eight people were killed on Tuesday when a light plane crashed in Australia's remote northeast after flying 3,000 km (1,900 miles) across the continent on apparent autopilot.

The plane set out with seven miners on a short flight from Perth to the gold mining town of Leonora, both in Western Australia, but authorities believe the plane depressurized, leaving the pilot and miners unconscious.

Two aircraft tracked the Beechcraft King Air 200 twin-engine turboprop from near Alice Springs in central Australia before it crashed at about 2:10 a.m. (1510 GMT) on a property near Bourketown, in far northern Queensland state, authorities said.

The plane did not respond to radio contact and traveled northeast across the vast outback, flying virtually in a straight line across three states before running out of fuel and crashing.

Sons of Gwalia Ltd, one of Australia's largest gold producers, said seven of its employees who worked at Leonora were on the charter flight.

``It has been confirmed that there were no survivors,'' company chairman Peter Lalor said in a statement.

Initial local media reports said the Beechcraft was in the air for five to seven hours.

``It would appear as though the airplane was on autopilot, certainly on heading hold and it would have maintained a constant heading until the aircraft ran out of fuel, at least on one engine anyway,'' said Barry Sargeant from the Australian Transport Safety Bureau.

``It's consistent with some sort of a problem with the cabin pressurization system or oxygen system, (but) that's yet to be determined of course,'' he told Australian Broadcasting Corp (ABC) radio.

A Queensland police spokesman said fog had prevented investigators from getting near the remote crash site during the morning.

``A helicopter was going to be used to ferry people into the crash site but due to the weather... it appears we may not be able to use that now,'' police spokesman Brian Swift told ABC.

Pilot Steve Patrick of the Royal Flying Doctor Service, who tracked the wayward Beechcraft over the outback for more than an hour until it crashed, said it was flying at 25,000 feet with no life evident on board.

``The plane was slowly descending the whole way and then it descended into the ground,'' he told the ABC. ``There was an explosion on impact, then there was a fire straight after.''

Australian officials likened the tragedy to the jet crash which killed golf champion Payne Stewart in the United States in October last year.

Stewart and five others died after their Lear 35 twin-engine jet flew for hours across the U.S. with no one at the controls, finally crashing in South Dakota after running out of fuel.

SHIFTYGOLD FIELDS #3605909/05/00; 10:57:35



wolavkarun up before close#3606009/05/00; 11:00:55

holding dec run up before close.
beesting(No Subject)#3606109/05/00; 11:02:09

Top Financial News
Tue, 05 Sep 2000, 12:35pm EDT
National Grid to Acquire Niagara Mohawk for $8.9 Bln
By Catarina Aleix London, Sept. 5 (Bloomberg) -- National Grid Group Plc, owner of the power-transmission network in England and Wales, agreed to buy Niagara Mohawk Holdings Inc. for $8.9 billion in cash, stock and assumed debt,continuing an expansion into the U.S. that it began almost two years ago.
National Grid bought New England Electric of Westborough, Massachusetts, in March for $4.7 billion in cash and assumed debt, and Eastern Utilities Associates of Boston for $1.03 billion in cash and assumed debt in April.

National Grid owns and operates the overhead lines and underground cables that transmit electricity across England and Wales. It was formed in 1990 as part of the U.K. government's plans to sell the electricity industry to the public.

Niagara Mohawk is selling its power plants to concentrate on the business of delivering electricity over its 24,000-square-mile power network, the largest in New York state.

National Grid is being advised by N.M. Rothschild & Sons and Donaldson, Lufkin & Jenrette is advising Niagara Mohawk.

MarkeTalkWashington Politics to Meet Saudi Oil #3606209/05/00; 11:19:52

Reuters newswire just carried a story that President Clinton will meet with Saudi Crown Prince Abdullah tomorrow evening in New York for a discussion about increasing oil production. This meeting comes just four days before OPEC meets in Vienna to discuss increasing oil production. It is interesting that Crown Prince is the Saudi spokesman while King Fahd is in failing health. Once King Fahd dies, then the Crown Prince is the heir apparent. For anyone who has followed politics in the Saudi kingdom, all of the other princes were educated in the West--either at Harvard, Stanford or Oxford/Cambridge. And hence they are sympathetic to the concerns and demands of the West. Crown Prince Abdullah is the only prince who sports "Bedouin"-type thinking and who is openly hostile to the West. He is, in essence, an Arab nationalist who wants higher oil prices indefinitely.

We shall see if Slick Willie's charisma can charm this gruff character. Maybe a veiled threat of letting Bad Boy Saddam loose on the region might convince him. How would you like to be a fly on the wall at this meeting??

Knallgold@Marke Talk#3606309/05/00; 11:23:34

Uhh,didn't TG say "tomorrow,it (euro pricing) will be presented to Clinton"?
OverHerdChances to bring the gold debate mainstream and discuss it with a genius.#3606409/05/00; 11:23:56

Chances to bring the gold debate mainstream and discuss it with a genius.

People of the forum I've been reading posts here for a few years now and hold all poster opinions in high regard. I believe that it is time to take the debate to Main Street and start educating the people on the principles of sound money and explain how their economy has been highjacked. This may be one way of doing that.

In the September 3, 2000 issue of Parade Magazine, the "Ask Marilyn" section. Marilyn Vos Savant is asked the following question "What do you think of the idea of electronic money and of living in a cashless society?"… Her reply in part is "Conceptually, it doesn't seem much different from using paper money instead of gold coins." Conceptually could be the key word here because we do not live in a conceptual world. If that were the case conceptually the paper gold market would always be synchronized with the physical gold market.

Would anybody like to debate MS. Vos Savant on this matter? It's out of my league. She can be reached at:

Ask Marilyn, Parade, 711 third Ave., New York, N.Y. 10017


By E-mail at This email address is being protected from spambots. You need JavaScript enabled to view it.
(Please include name, city and state)

PS. Strad Master, that was an excellent performance the other night and I posted so about 15 minutes after it finished, I would love to hear more of your music if it is possible.


KnallgoldHere is TG post#3606509/05/00; 11:28:35

Trail Guide (09/03/00; 22:13:19MT - msg#: 35971)
(No Subject)
Simply Me (09/03/00; 21:54:04MT - msg#: 35967)

Hello Simply Me,
It just could be that it's being discussed with Mr. Clinton this week.

I have to go now.

Trail Guide

MarkeTalkKnallgold#3606609/05/00; 11:37:57

Sorry, I can't answer your question about TG with a definite yes or no. But from what is happening with the euro sliding against the Dollar and on top of that rising crude oil prices (in Dollars), Europeans cannot be very happy with the current state of affairs. I smell intervention of some type. My confidential sources tell me that a showdown between America and Europe over the gold price will occur very soon. And it will correct what should have been done last September/October when gold spiked $80/ounce. Another sharp rise in gold would surely help the euro at this juncture.
oldgoldFed secrets revealed#3606709/05/00; 11:45:02

Over the past two decades, America's private pension system has massively
shifted investment risk to workers as employers embraced 401(k) plans and
other defined contribution pension programs that let the whims of the
market - or the acumen of plan participants - determine an individual's
retirement benefit. Like the rest of the federal government, however, the
Federal Reserve continues to provide its employees the security of a
guaranteed benefit after retirement.

Unlike the rest of the federal government, the central bank's defined
benefit pension plan has realized bountiful returns on its stock-rich
portfolio during the long bull market of the 1980s and 1990s. Because the
self-financing Fed sets pay grades that far exceed the federal norm - and
because employees' pension benefit can equal as much as 80 percent of
average salary during peak earning years - these heady portfolio returns
have helped fund some of the public sector's more comfortable retirements.

So why are scores of the Board of Governors' longest-tenured employees
the Fed over the management of their pension plan? And why, at an
institution famed for its sternly hierarchical folkways and internal
resolve, does this group of dissident plaintiffs include some of the
bank's most senior managers?

...for the rest of FMC's new report, go to:

Speaking at the Federal Reserve's annual Jackson Hole conference on August
25, Chairman Alan Greenspan noted "considerable unease" among some
"about the way markets distribute wealth." Nevertheless, Greenspan and
colleagues have been served very well by these distributional mechanisms.
According to the attached Financial Markets Center analysis of recently
released financial disclosure statements, the five members of the Fed's
Board of Governors saw their aggregate net worth jump by 17 to 20 percent
during the course of 1999.

...for the rest of an analysis of the governors new financial disclosures,
go to:
...for the only online access to key portions of Fed officials' actual
financial disclosure statements, go to:

Peter AsherOverHerd (09/05/00; 11:23:56MT - msg#: 36064)#3606809/05/00; 11:47:27

Read carefully >>> "Conceptually, it doesn't seem much
different from using paper money instead of gold coins." <<<<

She is not saying that conceptually, paper money is synchronized with gold coins.She is saying that electronic money is no different than paper money when used *instead* of gold coins.

We agree with that! She does not, however, enlighten her readers as to the significance of that "Instead"

oldgoldLease Rates#3606909/05/00; 11:52:28

If the Europeans really want to hike gold prices they can easily do so by cutting the supply of cheap bullion to the lease market. One year lease rates now are down to 1.3% -- about as low as they have ever been. A big gold rally is out of the question unless lease rates move up considerably.

Never forget the old adage -- "watch what they do, not what they say." To date there is no solid evidence the Europeans really want higher gold prices. They are lending their gold to the bullion banks for next to nothing.

OverHerdPeter Asher (09/05/00; 11:47:27MT - msg#: 36068)#3607009/05/00; 12:02:39

Hi Peter,
Thanks for clarifying that thought, I guess I read it differently.


TownCrierWGC PRESS RELEASE: Gold derivatives growth unsustainable?#3607109/05/00; 13:47:53

LONDON: Monday, 4 September 2000 - The rapid growth of the gold derivatives market in recent years is likely to slow in future. Limitations on gold lending by central banks and a slow-down in producer hedging will both contribute to a reduction in derivative market activities. This is one of several important conclusions arising from a detailed study of the gold market commissioned by the World Gold Council and published today.

Lack of transparency and the different behavioural characteristics of the gold market to other commodity markets have hindered understanding of the market and the way it operates, and led in 1999 to the Council sponsoring a major research project into gold derivatives to obtain a better assessment of the market's size, scope, operation and effect.

Among the main findings of the study are:

--At end-1999, total gold liquidity (the amount of gold lent or on swaps) was 5,230 tonnes, slightly down from a peak of 5,500 tonnes in the immediate aftermath of the Washington Agreement at end-September 1999. Of this, 4,710 tonnes - some 90% - was supplied from central banks and other official institutions. Official sector gold liquidity more than doubled between 1990 (900 tonnes) and 1995 (2,100 tonnes) and doubled again between 1995 and 1999.

--Central banks not covered by, or associated with, the Washington Agreement on Gold (WAG) have lent, overall, a far higher proportion of their gold reserves than central banks covered by the WAG. Prior to the Agreement the gold market assumed that potentially substantial quantities of gold could if required come onto the lending market from Washington Agreement signatories. However for the duration of the Washington Agreement (until September 2004), those central banks covered by WAG, and others informally associated with it, have agreed not to increase the amount of gold they lend to the market. There are therefore limited quantities of official sector gold - probably a maximum of 1,000 tonnes in practice - available to fuel growth in the lending market until 2004. This contrasts with estimated growth of 2,600 tonnes between 1995 and 1999.

--On average, the official sector lends 14% of its declared gold holdings. However the proportion varies substantially from country to country. If the USA, Japan, IMF and major European countries that do not lend are excluded the proportion rises to 25%.

--The bullion-banking industry has been subject to extensive restructuring in recent years. This has had a substantial effect on available credit. Banks' trading limits have declined in recent years and are currently collectively likely to total some 2.5-3.5m oz (75 to 110 tonnes) of combined short-term net exposure.

--The mining industry is thus the greatest user of lent gold. Short speculative positions exist but appear to be of lesser size. The growth of derivatives has played its part in price discovery but cannot be isolated as the dominant factor.

--Mining companies themselves are also facing several hedging-related challenges and a number of factors suggest that the peak of hedging is over. The Washington Agreement precipitated a review of hedging practices by both miners and bullion banks and there is a move away from the use of the more complex derivative products. The decline in exploration activity will affect future production and hence limit the scope and demand for hedging. Finally the introduction of the FAS133 accounting standard will also affect the choice of product.

--No evidence was found of any collusive behaviour on the part of market participants to manipulate the price.

[The full 196 page report is accessible from the link given above]

oldgoldKey European Politicial Welcomes Plunging Euro#3607209/05/00; 14:18:53

A reality check. If they want the Euro to go down, they can hardly be in favor of higher gold prices.

Euro Falls to Record vs Yen on Remarks From Germany's
By Mark Tannenbaum

New York, Sept. 5 (Bloomberg) -- The euro fell to a new low against the yen as German Chancellor Gerhard
Schroeder said he welcomed the currency's decline, sparking concern the views of euro-zone politicians
may be at odds with the European Central Bank.

The 11-nation currency touched a record against the yen for the second day in three, after Thursday's
drop on concern an interest-rate boost by the ECB will crimp economic growth. Analysts say Schroeder's
remarks yesterday contrast with those of European Central Bank officials, who have been trying to bolster
the currency and say it is undervalued.

``People think when there's conflict between politicians and a central bank it doesn't do a currency any
good,'' as it calls into question the bank's ability to conduct monetary policy independently, said Marc
Chandler, chief currency strategist at Mellon Financial Corp. Investors ``are still looking for new lows in the
euro'' in coming days, he said.

Europe's common currency dropped to 94.070 yen, from 94.935 yesterday, and earlier sank to a record
low of 93.765. The previous low, reached Thursday, was 94 yen. The euro fell to 88.85 U.S. cents, from
89.74 yesterday, after falling as low as 88.50 cents earlier. That's not far above its record low of 88.37, set

Two straight days of declines for the euro have more than erased the gains the currency staged Friday,
after a report showed the U.S. jobless rate unexpectedly rose in August. The statistics boosted
expectations the U.S. economy is slowing more quickly than previously expected, which could start to
raise the relative appeal of euro-zone assets.

`Reason to be Happy'

Still, some economists said it's too early to say the U.S. is cooling off enough to lead investors to shift
more aggressively toward Europe.

The dollar is benefiting as investors think the U.S. is in a ``best of all possible worlds'' scenario, in which the
Fed stops raising rates while still allowing the economy to grow robustly, said Ram Bhagavatula, chief
economist at Royal Bank of Scotland Financial Markets.

Other analysts said concern persists that euro-zone growth will be choked off by the ECB's move
Thursday to raise its benchmark rate by a quarter-point, to 4.5 percent, to stem inflation from surging oil
prices and the euro's decline.

Still, the Schroeder comments helped sour the mood on the currency at the start of the week.

``The current euro-dollar rate is more of a reason to be happy than concerned,'' Schroeder said in a
speech yesterday at a conference on doing business in Eastern Germany.

`Statement of Fact'

His remarks came the same day as Bank of France Governor Jean- Claude Trichet, who's on the ECB's
17-member governing council, said ``the euro is clearly very undervalued by most market participants.'' He
spoke on radio station RTL.

While the Schroeder comments contributed to euro declines, ``we view this as a statement of fact rather
than any policy dispute with the ECB,'' Bob Sinche, Citibank's chief currency strategist, wrote in a
comment today. He added that he expects the bout of euro strength seen last week to re-emerge in
coming weeks.

The yen was little changed against the dollar, at 105.86 per dollar, from 105.81 yesterday. It earlier fell as
low as 106.55, on speculation Moody's Investors Service will downgrade Japan's credit rating soon,
analysts said.

Such speculation has continued to surface among traders and investors as Moody's has been reviewing
Japan's ``Aa1'' credit rating for a downgrade since Feb. 17. It cut Japan's top-notch ``AAA'' standing in
November 1998, saying the government was spending too much. A decision may come as early as this
month, traders said. A Moody's spokesman declined to comment.

UsulSaudi Arabia- You won't recognise it any more...#3607309/05/00; 14:28:02

What oil has become. Published - 23rd September 99

"Saudi Arabia's oil boom days are over, Crown Prince Abdullah said earlier this year. And everything in the country is changing because of it..."

UsulLargest Qoran will require 12 kilograms of gold powder#3607409/05/00; 14:38:40

Hmmm... wonder how they're getting on... finish in 2005?
CoBra(too)Re: oldgold - Schroeder wellcomes low euro!#3607509/05/00; 15:17:22

Hello - oldgold - please don't take me too seriously tonight- though the last "Schroder" who's made some sense was "Peanuts" - and I am a fan - of nuts - and as I'm trying to get to grips with this new currency in the making - it is, isn't it - in the making?
Or is it in the un-making - thanks to petty socialist squabbles, hegemony and political influence in a more than ever fragile community - held together by economic needs and necessities by all, dependent on the whims of few more powerful - or better more equal? - Let's wait for Denmark's euro referendum later this month! - - and even if the Saudi's are regaling their banks to do business in the euro solely, within the EU - it only tells me they've had it with the $!
I'm not the renegade you'll suspect from above - no - more like a burnt moth getting too close to the candle - though I'm a fan of open fire places too - cb2

JourneymanFree-trade I: The Bad @ALL#3607609/05/00; 15:23:08

Hi folks!

I realize this little thing I've written on free trade is a day
late, ah, actually three weeks or so late - - - - but I don't
think you'll find it a dollar short! I could be wrong. If so,
object! This "post" is three weeks late mostly because it's
taken me that long to put it together. So, what I'm gonna do to
spare your eyesight is to post one section every day or so for
awhile. Comments and particularly criticisms or objections are
most welcome.

By the way, our hero (and heroine, gold, plays a central role - - -
but doesn't make an entrance till later.

OK. Heeere we go!

Free trade is a hot-button issue. Everywhere. And it always has
been. Buchanan billed himself as "next to Ronald Reagan, the
strongest free-trader in the White House," -- but he changed his
mind. So what gives? Is free-trade in free markets really so
controversial? If so, why? Who _really_ benefits from free
trade -- and who is hurt by it?

Consider the following:

"(h) *The countryside was cut out of trade in the
Middle Ages*.

'Up to and during the course of the fifteenth century
the towns were the sole centers of commerce and
industry to such an extent that none of it was allowed
to escape into the open country' (Pirenne, _Economic
and Social History_, p.169). 'The struggle against
rural trading and against rural handicrafts lasted at
least seven or eight hundred years' (Heckscher,
_Mercantilism_, 1935, Vol. I, p. 129). '*The severity
of these measures increased with the growth of
'democratic government*' . . . . 'All through the
fourteenth century regular armed expeditions were sent
out against all the villages in the neighborhood and
looms or fulling-vats [in which cloth was dyed] were
broken or carried away.' (Pirenne, _op.cit_., p. 211)."
-Karl Polanyi, _The Great Transformation_. (Boston:
Beacon Press 1957), p. 277

Seven or eight centuries of "struggle against rural trading," not
to mention a century of loom-stealing and vat-smashing does seem
to indicate free-trading was rather a hot-button issue even in
medeival times, don't you think?

Inherent in the idea that whole villages opposed free trading
amongst the rural folks is that for some reason _the
establishment_ particularly doesn't like free trading. And
contrary to the common perception of some free-trade advocates,
businessmen are in the lead of the establishment which doesn't
like free trade in free markets.

My first clue to [Ayn] Rand's greatest mistake,
though I failed to understand it at the time, came as a
friend of mine (Larry) and I gave a talk to the Las
Vegas Junior Chamber of Commerce (the "JCs"). We
presented two libertarian issues; heroin
decriminalization to demonstrate civil liberties and
free trade in free markets to demonstrate economic
freedom. Since JCs are business folks, we figured we'd
get static on decriminalization, but if we addressed
the free-trade issues last, we would leave them with a
positive impression.
Sure enough, immediately after the
decriminalization presentation one JC stood up, and in
a very agitated manner let us know that we were crazy
to propose such a thing. Before we could answer,
another JC said, "Sit down Bob. They're right." There
was a murmur of assent from the rest of the thirty or
so in the audience. Larry and I looked at each other
amazed. We figured we were over the hump.
After our _free market_ presentation, however,
there was dead silence. We felt a chill. Someone
murmured something like "You can't have _that_ sort of
thing going on." This audience of business people,
which had accepted decriminalization, figuratively
turned it's collective back on us. We had violated
some hallowed but unstated rule. It was as if actually
mentioning free markets, acknowledging they even
existed, was unacceptably foul manners. What was going
on here? -L. Reichard White, "Ayn Rand's Greatest
Mistake, Why Almost Everyone Hates Free-Trade, and
Where Totalitarianism Comes From"

Thus whole villages, tradesmen, and workers of all kinds --
including business persons -- dislike (to put it mildly) the
competiton they have to deal with when free-trade is possible.
Here's why:

The consumers do not care about the investments made
with regard to past market conditions and do not bother
about the vested interests of entrepreneurs,
capitalists, land-owners, and workers, who may be hurt
by changes in the structure of prices. Such sentiments
play no role in the formation of prices (It is
precisely the fact that the market does not respect
vested interests that makes the people concerned ask
for government interference.) -Ludwig von Mises, Human
Action A Treatise on Economics, Third Revised Edition
(Chicago, Illinois: Contemporary Books, Inc. 1966),
pg. 337 [available also from]

Notice I didn't include _governments_ in with those groups who
don't like free trade. Mises above provides the key as to why
governments may even "like" free-trade when he observed, "the
people concerned ask for government interference." Free trade
gives governments a big opportunity to make money - - - by
interfering with it on behalf of "the people (vested interests)

What's clear is that large numbers of people have historically
perceived problems with free trade. Since we're having this
discussion here at USAGOLD, it's clear this perception of
problems with free trade persists to this day.

Comming next: Free-trade II: The Good _So who DOES like free


CoBra(too)RE: TC - latest post - required 196 pages ... #3607709/05/00; 16:50:06

... of reading Dr. Jessica Cross of "Virtual Metals Research" on gold derivatives -

TC- as I'm aware you're not the cynic I'm becoming (though I still hope you didn't have to cope with all the
196 pages of total misinformation), I have to admit I'm becoming a bit irritated by the funders of this kind of (mis-) information. It does remind me of the tombstone, stating - " here rests the rest of the gold industry"-RIP -
(Rip off In Pieces) - your friend - alas sorry - cb2

TownCrierThanks for sharing the assorted news today, Sir oldgold#3607809/05/00; 17:11:05

I offer both a question (two, actually), and a comment.

In one post you said:
"Key European Politicial Welcomes Plunging Euro
A reality check. If they want the Euro to go down, they can hardly be in favor of higher gold prices."

In what regard to you see higher gold prices acting at cross-purposes with either a weaker euro or with euroland's best interest? It comes to my mind that the purchasing strength of a currency is not built upon the value of the issuing bank's reserves, but rather upon the monetary policy and use of that currency. Only when offered for currency redemption or employed through foreign exchange operations (which the ECB has a distinct policy preference to avoid doing) would total reserve valuations affect the external strngth of the currency.

To see this another way, we note that the ECB also has, unavoidably, dollars held in reserves; yet we do not hear anyone suggesting that the rising value of the dollar would also cause the euro to be strengthened in parallel.

In another post, you said:
"Never forget the old adage -- "watch what they do, not what they say." To date there is no solid evidence the Europeans really want higher gold prices. They are lending their gold to the bullion banks for next to nothing."

If we are to watch what they do, then what is to be drawn from the Washington Agreement that has been done? And having brought it up, given the general purpose behind interest rates, what do you feel to be the proper rate for the gold leasing that remains underway?

Here's a comment from our Central Banking Insider that elaborates a bit on your posted piece on the Federal Reserve. Your article stated:
"Speaking at the Federal Reserve's annual Jackson Hole conference on August 25, Chairman Alan Greenspan noted "considerable unease" among some citizens "about the way markets distribute wealth." Nevertheless, Greenspan and his colleagues have been served very well by these distributional mechanisms. According to the attached Financial Markets Center analysis of recently released financial disclosure statements, the five members of the Fed's Board of Governors saw their aggregate net worth jump by 17 to 20 percent during the course of 1999."

I thought it might be of interest to pass this additional info along regarding the nature of the Fed Chairman's investment position from our August report:
According to a financial disclosure report, the value of Alan Greenspan's investments in 1999 totalled between $3.4m and $7m, up from $2.5m to $6.4m in 1998. To avoid conflict of interest, Greenspan holds neither equities nor longer-term bonds, both of which can be affected by interest rate decision which he makes as chairman of the Fed. His largest assets are four Treasury bills valued at between $500,000 and $1m.

Greenspan, 74, who earned $136,700 last year, is comparatively one of the less well-paid central bankers. Last year, the Economist magazine reported that Bank of Italy governor Antonio Fazio was the highest paid central banker in the world, with a reported salary of $600,000.

TownCrierSir CoBra(too), I have thus far spared myself the 196-page commitment of time...#3607909/05/00; 17:27:59

...more due to shortage constraints than personal choice. I would like to give it the once-over in order to fairly access the quality of Dr. Cross' findings and conclusions, but alas, until that chance arrives, I had to settle for providing the link to the rest of the fine minds here along with some selected excerpts from the executive summary.

Regarding this issue of time...the link above hints at one of the latest projects that we've been busy with here in The Tower on behalf of the good folks at Centennial. Now that MK has cleared the administrative, logistical, and paperwork hurdles for providing direct gold delivery within the European Union, it's time to...

"Wake the kids and phone the neighbors!"

CoBra(too)TC - Be assured if the Fanfare doesn't work ...#3608009/05/00; 17:37:51

... We'll be prepared to sound the Alphorn - even waking the
deaf - Though still cross with Jessica's dross - cb2

SteveHI third the nomination for HOF of#3608109/05/00; 18:36:18

the post of acronyms by AUSPEC.

That makes it official, eh?

SHIFTYJourneyman #3608209/05/00; 19:04:45

When do we get part two?


JourneymanWell, how about tomorrow about the same time? @Shifty#3608309/05/00; 19:30:24

Is good??

Regards, J.

SHIFTYJourneyman #3608409/05/00; 19:33:48

I look foward to reading more.


SHIFTYFrench petrol rationed as blockades bite#3608509/05/00; 19:37:18

By Patrick Bishop in Paris

From a link at DRUDGE


ETJourneyman, Shifty, Al#3608609/05/00; 19:44:53

Hey fellows - hope this finds all of you well. I'd like to contribute this article to the discussion of free trade. This article questions the results of the 'free trade' model expoused by the IMF/US. Unfortunately, the author doesn't seem to recognize that the one thing that needs to be free for all other things to be free is the medium of exchange, or money. He hints at the cause of the problem with this last paragraph. It is easy to understand why so much confusion surrounds the issue when the idea of 'free trade' is couched in terms of so-called 'Western Thought'. I think you guys will find the article interesting.

"Simply asserting something does not make it true. The US
Central Intelligence Agency may claim that the reforms in
New Zealand have boosted growth and moved incomes
towards the levels of the big Western European economies, but
the statistics it provides in its 1999 Factbook show the
opposite. Malaysia's economy recorded double-digit growth
during the first half of this year, despite its pointed refusal to
adopt textbook IMF proposals. Even today, the country is not
given any credit for the policies enacted to reverse the tide of
deflation which afflicted the whole region during 1998. The
varied experiences of the countries cited above suggest that a
headlong determination to subjugate everything blindly to a
preconceived model risks promoting a backlash that
ultimately can engender something as mutually destructive
as trade protectionism. However appropriate and successful
the neo-liberal model has been in the United States
historically, Western policy makers must recognise that the
attempt to impose a one-size-fits-all model all around the
globe exacerbates conflicts between the world's economic
powers, and engenders suspicion and dread in countries as
diverse as France to Korea. It triggers attempts to break away
from institutions that are perceived to be excessively in the
clutch of the "Washington consensus", such as the IMF, with
organisations that are thought to be more amenable to
pre-existing social and cultural mores. This is one factor
which continues to underlie the drive by the Asian nations
(now including China) to form an Asian Monetary Fund. And
at a time when the United States is showing a dangerously
high degree of dependence of foreign inflows to sustain its
growth and, indeed, its very economic system's success, does it
make sense to burn bridges with the rest of the world through
a one-sided advocacy of a single self-regulating global market

USAGOLDComment: "Key European Politicial Welcomes Plunging Euro"#3608709/05/00; 19:46:32

The Bloomberg article does not point out anything we didn't already know. It emphasizes, though, a view we've expressed before on these pages:

Those who believe that the central banks are involved in some kind of a conspiracy to control European and American society through the banking system must come to grips with the inclination of these same central banks to accomodate the political sector -- left or right. In America, Greenspan accomodates the Clinton administration with easy money; and, the ECB accomodates the essentially leftist governments of Europe by keeping the euro cheaper than the dollar. Hence the favorable comments from the Shroeder government on the weak euro, and the Gore campaign basking in an economy fueled by policies of a Republican central banker named Alan Greenspan.

Nothing in modern economic life happens in a vacuum -- not even monetary policy despite the claims of those who would like to see our central banks as separate from politics.

An even more critic al decision has to do with how the central banks and the political sector will deal with hedge funds and bank trading departments who through the use of cheap derivatives virtually have the ability to print money on a par with the central bankers -- an interesting quandary for the central banks, but a threat to their ability to institute an effective monetary policy.

P.S. One must not lose sight of the one thing that determines the views of a bureaucrat whether in the financial or political branches -- Job Security. That is both a blessing and a curse, and I'll leave it to you to decide which from your individual point of view.

schippiSelect Gold Wavelet & POG charts#3608809/05/00; 20:00:01

POG Chart with 5 day forecast

FSAGX Wavelet Chart:

Both Charts are pointing Up

Al FulchinoET#3608909/05/00; 20:25:49

ET (09/05/00; 19:44:53MT - msg#: 36086)
Journeyman, Shifty, Al

Interesting segment, while I am in agreement that the IMF is no role model for anyone, I disagree that all "Western Thought" regarding free trade is misguided. I get worried when the "West" and its ideas are unilaterally trashed <I am not saying that you espouse this idea, but others do>. I would still rather be sitting on our side of the fence, all in all.

Best to you!

Al FulchinoET#3609009/05/00; 20:25:59

ET (09/05/00; 19:44:53MT - msg#: 36086)
Journeyman, Shifty, Al

Interesting segment, while I am in agreement that the IMF is no role model for anyone, I disagree that all "Western Thought" regarding free trade is misguided. I get worried when the "West" and its ideas are unilaterally trashed <I am not saying that you espouse this idea, but others do>. I would still rather be sitting on our side of the fence, all in all.

Best to you!

Chris PowellGATA challenges gold council consultant to debate#3609109/05/00; 20:47:39

Her report on gold loans doesn't match

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

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

oldgoldTown Crier#3609209/05/00; 21:23:42

Re: The Washington Agreement. The Europeans only agreed not to increase gold lease volume which had reached a very high level. If they really wanted a higher gold trading range they could have reduced lease volume.

in fact one could argue that the Europenas are more responsible for gold's problem's than the Fed and the Treasury. The Europeans are the ones selling gold for greenbacks -- not the US. And the Europeans are the biggest providers of gold to the lease market -- not the US.

As I said before the Europeans could set the gold market on fire in the twinkling of an eye if they really wanted to. The sad fact is that they don't. At least not at this time.

LeSin"Political Will" - Manifests into ACTION / INACTION (depends on what side)#3609309/05/00; 22:02:40

Malaysia Rejects IMP - Currency Maker / Breaker - Robbers

This guy has my admiration for his stance and protection of his country's currency. The world and many countries within it have been duped into allowing their respective currencies (fiat-Money) to be traded and manipulated by the IMF dominated US$/Gov. and their agent-robbers "S"


IMF should ban currency trading: Dr Mahathir
KUALA LUMPUR, Malaysia ( AP ) - Prime Minister Datuk Seri Dr Mahathir Mohamad has said the ban on trading of Malaysia's currency will only be lifted if the International Monetary Fund halts currency trade, the national news agency reported Monday.

Dr Mahathir told a gathering of Malaysians in Chicago on Sunday that currency was not a commodity and hence should not be traded.

"It is not like coffee, tea, sugar, rubber or tin," Bernama news agency quoted him as saying. Dr Mahathir is in Chicago on a three-day visit.

"And why we should lift the ban on the trading of the Ringgit? We will lift the ban when they stop people from trading the currency," he said.

Dr Mahathir has railed against currency trading since the 1997 Asian financial crisis. He blames the turmoil on currency traders, accusing them of weakening Asian currencies to make quick profits.

When the crisis unfolded, Dr Mahathir spurned IMF advice that he should float the Ringgit and accept IMF funds to help combat currency weakness. Instead, he implemented a series of capital controls - which have since mostly been rolled back - to halt capital flight and protect the Ringgit, which was pegged at 3.8 to one US dollar.

The IMF has urged Malaysia to move away from a fixed exchange rate. But Dr Mahathir and his finance minister, Tun Daim Zainuddin, have said repeatedly there was no compelling cause for Malaysia to alter or remove the peg, which has fueled the country's export growth.

Malaysia's real gross domestic product, led by exports, recorded a 5.5 per cent growth in 1999 and has maintained its momentum so far this year. Analysts expect the economy to grow by more than 7 per cent this year, before slowing down a bit in 2001.

LeSinRegects "IMF"#3609409/05/00; 22:05:59

Apologies for error - IMP? should be IMF
TopazLeigh et al: Chris Powell#3609509/05/00; 22:15:15

<The Commerce Ministry said in the circular obtained by Reuters yesterday that the Saudi Arabian Monetary Agency, or central bank, would start using the euro ($0.891) from September 13 in all its foreign currency accounts instead of the individual currencies of the 11 countries in the euro zone.> end quote.
That says to me they're JUST ratifying the use of the Euro instead of the 11 Eurozone currencies.
Disturbing news via E-mail last night (LeMetropole). Don't allow BM to become this Centuries Arch-Duke Ferdinand.

schippiGold starts to perk Up#3609609/05/00; 23:22:24

Charts and commentary form
Simply MeIs it all pegged to the value of the dollar?#360979/6/2000; 3:31:44

According to the Bloomberg site, the dollar stands now at 113.02. This seems to me amazingly high. Can someone with a longer history of watching the dollar value tell me if this is an historic high?

No wonder the Euro looks small in comparison to this US Dollar giant. Reminds me of a lizard that puffs itself up when faced with a rival or potential predator! And the US dollar faces 3 threats...the Euro, gold, and oil. Alan must be huffing and puffing like crazy!

I've felt like the U.S. has been standing on a precipice since last August....and the longer we stand here the deeper the chasm gets.
Time to reinforce my golden parachute!
simply me

Knallgold@MarkeTalk#360989/6/2000; 3:55:33

Thank you.I agree'something has to change now.The oil thing is a little bit out of hand in Europe now.Though France made now some concession I heard to cut taxes on Diesel.(?)
And the euro is challenging new lows.There is alot of media coverage of the oilprice.I would say the information they provide is on the mark.Someone provided them with good stuff.

714Simply Me re: US$#360999/6/2000; 4:03:29

Not even close to historic highs. In fact, US$ looks pretty bullish:

Topaz...from a Sharefin link@Kitco#361009/6/2000; 4:38:23

By Franklin Sanders

Almost 30 years ago, just a few weeks before I got married, on a drugstore bookstand I found a strange book: Capitalism, the Unknown Ideal. It was a collection of essays about a philosophy of freedom. Two dealt with the American monetary system. The author explained that nothing -- no gold or silver -- backed our currency. He argued that sooner or later, this fiat money system would lead to disaster, and that only a money backed by real value -- gold -- could last.

That author was Alan Greenspan.

wolavkapressure point#361019/6/2000; 5:08:20

pushing dec gold down but suppport @ 278.

Appears sideways to down for several days unless intervention in currency mkt.

expect surprise news item to gap this mkt. 282 magic #.

RugenBarium Carbonate and Barium Sulfate#361029/6/2000; 5:15:33

Does anyone have Info? On Barium Carbonate and Barium Sulfate mining.
Annual production tonnage for the last 10 Years.

Topaz714#361039/6/2000; 5:22:01

G'day 714:
Re the $,
What do you reckon gave it it's legs in 84-5?

Hill Billy MitchellOfficial release#361049/6/2000; 5:48:00

Official: Federal Reserve Statistical Release

Release Date: September 5, 2000

Rates for Monday thru Friday, August 28, 29, 30,31and September 1

Federal funds 6.57, 6.51, 6.51, 6.65, 6.52

Treasury constant maturities:
3-month 6.32, 6.31, 6.32, 6.31, 6.27
10-year 5.78, 5.81, 5.81, 5.73, 5.68
20-year 6.01, 6.04, 6.03, 5.96, 5.95
30-year 5.72, 5.75, 5.74, 5.67, 5.67

Spread - FF vs long bond:

(0.85%), (0.76%), (0.77%), (0.98%), (0.85%)

Spread - 10 yr vs 30 yr:

(0.06%), (0.06%), (0.07%), (0.06%), (0.01%)

Spread - 3 mo. vs 10 yr


Black Blade"Morninhg Wakeup Call!" From the "Yellow-Brick Road"#361059/6/2000; 6:51:08

Sources: BridgeNews. - Look at Petroleum!

Asia Precious Metals Review: Australian dollar moves gold
By Mari Iwata and Polly Yam, BridgeNews
Tokyo--Sept. 6--The movement of the Australian dollar against the U.S. dollar dominated the price movement of spot gold in Asia on Wednesday, dealers said. Bearish sentiment on spot gold increased in the market with the gold price being expected to test its nearby support of U.S. $274 later Wednesday in the U.S. market, they said. Spot platinum and palladium remained steady.

Black Blade: Sometimes you just can't win.

Asia Metals Focus: Japanese' fondness on platinum jewelry remains

Tokyo--Sept. 6--Japanese fondness for platinum jewelry has not lessened despite prices of the metal being strong over the past few months, Mototsugu Naito, the Japan-based representative of the platinum marketing group Platinum Guild International (PGI) said Wednesday. Platinum demand in Japan is expected to rise in the second half of the year following the local economic recovery, he said. (Story .2016)

Black Blade: Pt is a fashion statement as it were for the Japanese and Chinese, and to a lesser degree the western cultures. Look for PGMs to continue to be strong.

South African platinum marketing group to set up office in India

Tokyo--Sep. 5--Platinum Guild International (PGI), a marketing group for platinum jewelry founded by South African platinum producers, will set up a new office in India next week, a spokeswoman at South African major platinum producer Anglo American Platinum Corporation Ltd. (AMPLATS) told BridgeNews Tuesday. AMPLATS is one of the founding members of PGI.

Black Blade: Looks as if the Gold producers should keep an eye on this as a template to market Au.

Meanwhile, Oil Gushes higher +$0.29 at $34.12/bbl marching on toward $40.00 and beyond. NG is at an all-time high pushing up to $5.005 Mbtu up +$0.055. Au is down -$0.50 at 274.80. Ag off a penny, Pt up +5.00 at $606.00 and likely to stay higher for some time, and Pd up 4 bucks on the paper markets at $724.00. Flying out shortly to Vancouver,CA. hope to keep up with events as they unfold here at the castle. Cheers.

BobboReady to Rumble#361069/6/2000; 7:07:39

This tidbit of good gbug news is from Erik Gebhard:
"Take note that from approximately 9/6 to 10/8 gold has risen the last 13 of 15 years for an average profit to bulls of $757, about a $7 to $8 move per contract. Keep in mind that the $757 figure is just an average, with the worst performance being -$3,560 in 1988 and the best being $6,870 in 1999."

wolavkaTaiwan/China#361079/6/2000; 7:24:28

Gold trader in taiwan now, will report on return.
Mr GreshamDollar Chart#361089/6/2000; 7:36:21

There is a good long-term dollar chart at the current Contrary Investor page... (and much more good reading)
ETDiane Alden#361099/6/2000; 7:58:12 From the article;

Professors Thomas Naylor of Duke University
and Donald Livingston of Emory University in
Atlanta have stated: "A booming economy and
a roaring stock market can cover up a host
of social, economic, and political sins. But
once the bubble bursts and everyone
discovers that the emperor truly wears no
clothes, whether in the Oval Office or
elsewhere, local independence movements may
seem a lot less radical than they do today."

oldgoldThe Euro#361109/6/2000; 8:43:23


Apparently some players expect a rally before long.

BobboAccording to Mr. GreenScam:#361119/6/2000; 9:00:53

"I keep diligently looking and looking for indications of inflation:
Bridge CRB Index 230.25 +0.51 +0.22 %
Crude Oil 34.26 +0.43 +1.27 %
Platinum 607.5 +6.2 +1.03 %
Palladium 734 +11.35 +1.57 %
Gold 278.4 -1.3 -0.46 %
But gold is down and the BLS numbers say there is NO INFLATION. So even though we can't define money anymore, we are free to keep pumping the debt bubble."
Clear case of the blind leading the blind, eh?

USAGOLDToday's Report: Late September OPEC Get-Together Holds Key#361129/6/2000; 9:15:46


(9/6/00) . . .Gold was
fighting a bout of anemia on the New York
open even as the euro plummeted to the
nether depths of hell and oil continued to
climb in world energy markets. Asia
continues to take advantage of the low gold
price with physical purchasing according to
a Dow Jones report this morning, but the
European markets were relatively quiet.

The euro was plumbing record lows
against both the dollar and yen in the early
going -- a situation likely to encourage
traditional physical gold buying in the
European Union. "Until intervention actually
takes place, the market will test the
European Central Bank's pain threshold,"
Neil MacKinnon , senior currency strategist
at Merrill Lynch in London, told Reuters.
"The pressure on the ECB and Ecofin
(European finance ministers) to consider
intervention is certainly growing,
although there's no indication that the ECB
is about to do it imminently."

In the past, the ECB, given the weak
currency policies of the respective national
governments, has been slow to intervene in
support of the euro. We shall see what
develops over the remainder of the week. As
I said yesterday, their most pressing
concerns would be more tactical in nature
and centered around whether or not the ECB
retains the ability to effectively take on
the big speculators and hedge funds.

As for the yellow metal itself,there
was little in the way of news. We did
miss this Dow Jones report from last week
and thought we would get it into today's
report: "Robert Champion de Crespigny,
chairman of Australia's largest gold
producer, Normandy Mining Ltd, said he sees
the gold price back up to $850-$900 a troy
ounce -- levels not seen since the late
1970's." Overall, the gold market seems to
be most interested for the moment in the
euro/dollar relationship and reacting to its
own set of internal circumstances -- low
lease rates, short-covering sidelined (with
all eyes on euro/dollar), and physical
purchases coming in on the dips.

With Saudi Arabia's Crown Price
Abdullah due in New York this week for a
little heart to heart with the President,
one wonders precisely what it is the Clinton
administration is up to with respect to the
oil situation beyond considerable wheel
spinning. The trip to Nigeria turned out to
be much ado about nothing. One wonders if
the meeting with Saudi Arabia's future king
will turn up another dry well, or giving the
spigot another full turn. Let's face it,
these prices didn't get to this level by
accident no matter what's being said.

Late in September we will witness
something that has not happened since
1975 -- a meeting of the OPEC heads of state
(not the finance or oil ministers but the
heads of state) in Caracas, Venezuela.
Caracas is the home of one Hugo Chavez,
president of the South American oil
producing state upon which the United States
has become so dependent for a good chunk of
its oil imports. Chavez, it is now coming
out, is an admirer of Fidel Castro and an
oil price hawk that thinks that the
industrial economies have pretty much had a
lucrative ride for the past decade born,
raised and nurtured by cheap oil. I would
say that the Crown Prince and Mr. Clinton
might have that meeting later in the month.

That's it for the today. We'll see you back
here tomorrow.

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wolavka11 o'clock cst floor change#361139/6/2000; 10:06:00

If we move up watch 11 .
BoxmanOT--Serpent Head and the Witch#361149/6/2000; 10:34:47

Sorry, this has nothing to do with gold, but I loved this picture. Don't bother reading the article, unless you find Hillary as revolting as I do.

Thought it might give a chuckle to a few.

BoxmanSorry about the incomplete link#361159/6/2000; 10:41:59

Sorry about that. Click on "The witch of November
Cavan ManBoxman#361169/6/2000; 10:51:42

Who's out selling boxes today?
TEXBoxman#361179/6/2000; 10:52:25

Yeah, it doesn't have anything to do with gold but what a great photo!
SHIFTYBox Man#361189/6/2000; 11:07:13

The photo is a hoot! Wish it was larger.


BoxmanCavan Man, and a question on Buffett#361199/6/2000; 11:23:26

Cavan Man, I'm on vacation this week. I had planned to do a lot of honey do's, but I find that I'm glued to this computer. I think that I have an addiction, particularly to this forum.

As an aside, last week, Fleckenstein wrote that there were rumors that Warren Buffett was selling some of his silver. Has anyone heard anymore on this?

BoxmanWhy hasn't Gold moved?#361209/6/2000; 11:47:21

(9/6/00) . . .Gold was fighting a bout of anemia on the New York open even as the euro plummeted to the nether depths of hell and oil continued to climb in world energy markets. Asia continues to take advantage of the low gold price with physical purchasing according to a Dow Jones report this morning, but the European markets were relatively quiet.

With the Asian's buying, and, if I am not mistaken, the Indian wedding season, with brides to be buying heavily for their dowries,and oil on a moon shot, why hasn't gold budged? If manipulation is the reason, it must be getting more difficult with each passing day.

I know that it is good time to be acquiring the precious metals, but I have already done that, and I'm about ready to pop.

schippiMore Gold being sold??#361219/6/2000; 11:52:27

Updated Wed Sep 6 12:34 ET

BRIDGE UPDATE--PRECIOUS METALS: Canada sells 60,000 oz of gold

Sep 06--1630 GMT/1230 ET

Cavan ManBoxman 36120#361229/6/2000; 12:05:24

Why isn't gold moving?

POG is defying every historical precedent where, fundamentals should dictate AT LEAST A MODEST RISE. I think at least some of us would be content to see a little progress in the upside direction. I think $300 would be teriffic.

Either the world has forgotten gold or, many of the allegations regarding market interference for vested reasons are spot on.

For myself, I haven't a clue. I'm just a humble box salesman who believes in many reasons to own metal.

What a wierd world; this world of gold.

wolavkagold isn't moving because#361239/6/2000; 12:26:22

Big money is positioning itself and it will gap with short covering.

Today was constructive for gold.

SHIFTYBRIDGE UPDATE--PRECIOUS METALS: Canada sells 60,000 oz of gold #361249/6/2000; 12:32:59

The link above is to the story Schippi brought to our attention.
Thanks Schippi!


SHIFTYBRIDGE UPDATE--PRECIOUS METALS: Canada sells 60,000 oz of gold #361259/6/2000; 12:45:16

I should have read more than the first sentence before listing the link. Who knew it was a one line lead. I cant find story .4821


lamprey_65Wanted: Candian Poster!#361269/6/2000; 12:47:28

First, how may ounces of gold make a ton...isn't it around 32,150? So, Canada only has less than 40 tons of gold in its reserves?!

A major gold producer and the country is holding less than 100 tons in the vault...very sad.

Canadians -- Unite! It's an embarrassment and it's not going to be good news when the the dollar begins to c*** out and all the Canadians have to float their "loonies" are chits of U.S. paper!

Hey, some of us Americans KNOW how pathetic we've become, but at least we're holding several thousand tons of the shiny stuff (well, it's on the books anyway...that's about all I can be sure of).


TheStrangerThis Just In#361279/6/2000; 13:28:12

I am just back from vacation and will post something as soon as I catch up. I am truly sorry for any trouble I may have caused by not warning anybody. Back soon. Thanks.
SHIFTYThe Stranger#361289/6/2000; 13:32:05

Glad to see your back!


LeighStranger#361299/6/2000; 13:51:21

VERY glad and relieved to hear from you again, Stranger!!
Simply MeThanks to 714 and Mr. Gresham#361309/6/2000; 14:00:09

Thanks for the dollar chart links. I have been looking for just such charts in my little bit of spare time.

Now I'm trying to understand how the current levels are, as 714 says, "bullish" for the dollar. In the charts I see that the dollar hit it's highs of 116-117 in '85-'86, just before the '87 market crash. Wasn't that when life-support became necessary for the dollar until the Euro came on line?

With the dollar currently at 114, and rising a point or nearly two at a time lately. Could we not be at 116 again very soon? I'm not, by any stretch of the imagination, a technical analyst....but, considering the intervention that has kept the dollar on it's feet the last fifteen years, could 1985 to the next 116 high point be considered a double top? And considering the oil, gold, inflation situation, wouldn't that double-top be followed by a very steep deflation?

watching, waiting, wondering,
simpy me

BobboRally continues...#361319/6/2000; 14:29:02

I hope you have a big grin on your face as do I. This puppy has legs, at least so far. At this point the fantastic XAU rally in the last hour of trading today is super bullish. The bullish divergence is at a point that the POG must turn now and start to run up. Perhaps a POG gap at tomorrow's open. That'll bring a double big grin to my face...)) The stox often lead the metal and we have been seeing the stox outperform for over a week now.
We are heading into XAU resistance around the 54.80 area. If we can take that out tomorrow (only .58 over today's 54.22 close) it will be another feather in the hat of the gbug bulls. Depending on POG action, I wouldn't be surprised to see some back and filling after (or even before) we break through that 54.80-55.00 area since au stox are overbought. That condition can remain against all odds and it is during such conditions that mucho gains can be had. Furthermore, stox like PDG and NEM have taken out resistance and are ready to run. PDG to 10.12 and NEM to 20+. Maybe tomorrow, but only with POG help. Will revisit at those levels.
The action in XAU has been classic and with international events heating up, oil heading to the moon and inflation roaring, things are still lookin' gud fer ole yeller. Enjoy the ride. Don't be shaken out on pullbacks, but trade for a scalp if you must. GOT GOLD?....GO GOLD.....GO XAU

Cavan ManStranger#361329/6/2000; 14:46:47

Glad to see you as well. I was concerned you might have taken all the bearish action in NEM too seriously :>). Welcome back!
JourneymanFree-trade II: The Good @ALL#361339/6/2000; 14:56:46

PREVIOUS INSTALLMENT: Journeyman (09/05/00; msg#: 36076)

_So who DOES like free trade?_

If whole villages, including "tradesmen, and workers of all kinds
-- including business persons" dislike free trade enough to
engage in centuries of vat-smashing and loom-stealing, who _does_
like free trade?

WE do. Just about all "consumers" usually like free trade
whether they know it or not. That's because it counters the
selfish "vested interests of entrepreneurs, capitalists,
land-owners, and workers" of all kinds who, instead of selling
their products and services into competitive markets at low
prices want to sell into markets where they enjoy a monopoly (or
at least restricted competition) and can therefore charge high

Therefore most of us are, whether we've thought about it or not,
schizophrenic about free trade. In our capacity as "consumers,"
we want to buy from free markets where competition automatically
keeps prices low, but we want to trade the goods and services
which pay our rent into markets protected from competition so
_we_ can charge top-dollar.

Clearly then, most of us schizophreniclly harbor two
diametrically opposed interests when it comes to trade. It's our
buyer half vs. our seller half. [**1*] Which of these interests
is, in the wider context of "society," the "common interest?"

_"In the common interest"_

Who's the fool in a trade? Is the grocer who sells you a loaf of
bread foolish to let such a valuable commodity go at such a low
price, or are _you_ (the "buyer") a fool for paying for something
the grocer clearly want's to sell?

In a free market the answer is usually, "Neither is the fool."
In fact people trade because they _both_ gain time and/or energy
and/or money in a good trade. And this gain isn't just
psychological or a matter of the whims or desires of the moment.
In fact, in most cases, both parties would have to be fools _NOT_
to trade.

For example, let's suppose you can trade wheat to a shoemaker for
a pair of shoes. You can, alternatively, make your own pair of
shoes with let's say, 40 hours of work, including aquisition of
the raw materials -- leather, rubber, etc.. Let's say the
shoemaker will trade you the pair of shoes for 20 bushels of
wheat. It takes you about 20 hours total to produce that 20
bushels. Are you better off spending 40 hours making the shoes
for yourself or 20 hours producing the wheat and trading it for
the shoes?

I did a very sloppy non-market, non-price-discovery equivalence
guess here as to the trade relationship between 20 bushels of
wheat and a pair of shoes. You may be thinking, "That Journeyman
made this shoe-wheat price up out of his imagination and thought
I wouldn't catch on." You're thinking, "It could be that I could
produce those shoes in less than 20 hours. I'm not going to let
Journeyman get away with that!" Well, I think you'll decide to
let me get away with it afterall - - -

It's obvious that someone who specializes in making shoes will
have all sorts of tricks to save herself time and energy. She
will have learned her mother's tricks as well as her
grandmother's in addition to, over a period of time, discovering
her own time/money/energy saving tricks. She probably even has
some special machines (capital goods) to make her shoe-making
faster, easier and better. Perhaps you have to punch holes in
the leather and then thread the shoe-thread through the holes
whereas she has a special industrial strength sewing machine that
does both automatically in a single operation. Etc.

The same observation applies to you as a wheat producer. Sure,
the shoemaker could raise her own 20 bushels of wheat --- but it
would take her more than the 20 hours it took you because she
doesn't know _your_ tricks of the trade any more than you knew
hers. She doesn't have your capital equipment either, any more
than you have her industrial strength sewing machine. Thus she
saves time too and therefore benefits from trading with you.

This advantage to trading is based on the knowledge accumulation
efficiencies of "specialization" which inevitably leads to
"division of labor" and is called in economic's classes, "The Law
of Comparative Advantage." Because of "comparative advantage,"
good trades are highly common instances of those fabled "win-win"
propositions we hear about so often. We engage in them nearly
any time we buy (or sell) anything.

That is, other peoples' skill and expertise saves _us_
time/energy/money _IF_ we trade with them - - - and vice-versa.
That's why free-trade in free markets is _usually_ "in the common
interest," and tariffs and trade restrictions are, in general,
_against_ "the common interest."


1. While you may not sell anything directly to the public,
unless you work for government, the folks paying your salary or
commission do. While you may not think of this often, your
salary is much safer if your employer has a monopoly.

Comming next: Free-trade III: The Ugly -- _Free markets don't


CoBra(too)Hi Stranger - you've shocked the forum...#361349/6/2000; 15:07:30

Fremder - mein Freund - hoping you've enjoyed a lenghty and as I'm sure deserved vacation, you've been badly missed. In an environment of CPI/PPI "core" rate unchanged, in spite of POO and other commodities rallying, including CRB topping 229 - and the $ Index reaching new highs for the (beginning-IMO)cycle - we've missed your input - Glad you're back -
Other developments - FAZ - citing GATA's research on manipulation of $/AU - believed to be BuBa's (his masters) voice - WA # 2? ...

BeowulfMermaid coin special?#361359/6/2000; 15:09:47

How did the special go on the "mermaid" 10 and 20 Kroner coins go? I noticed you no longer have the special ordering page up. Did you sell out? I can't wait till mine show up.


TownCrierDanish gold coins#361369/6/2000; 15:52:40

Sir Beowulf,

The coins are indeed still available for both on-line and direct ordering from Centennial Precious Metals, Inc. The link, given above, can continue to be found under the "Special On-line Offers" category listed on the Home Page.

Now that we have our new and exciting European delivery program up and running, we decided that it would be better to replace the Kroner advertisement with the Euro Info page instead of keeping them BOTH up (in order to reduce the amount of clutter and gratuitous self-promotion that we already make you endure.<wink>

When I talked to MK about the coins' remaining availability, he said that the 10 Kroners were almost sold out. I put in my own order for some of the 20's, and when they arrived immediately proclaimed them to be the most beautiful manhole covers that I had ever seen...they're HUGE. Slightly bigger than the 20 mark coin which itself is somewhat larger than the lovely and ubiquitous British Sovereign. They definately made a nice addition to The Tower's treasury.

TownCrierLooking for signs of real gold demand? Look here...#361379/6/2000; 16:22:55

Bridge News reported today that the amount of gold imported throught the Istanbul Gold Exchange for this past August was 25.4 tonnes, two-thirds greater than the 15.7 tonnes imported in the same month last year. Year-to-date gold imports (Jan-Aug) have now reached 151.6 tonnes, already exceeding the entire gold imports from 1999 which totaled 107.3 tonnes.
auspecHOF Nomination#361389/6/2000; 16:24:45

To CoBra[too], Cavan Man, Gandalf the White, & Steve H- Thanks for the nomination and seconds for Abbr. Version-Gold Economics. Let's just say I'm as pleased as though we were seeing $600 Gold. On 2nd thought let's just say am VERY PLEASED! Thanks gentle people, I do enjoy this forum. If you will let me know who is on the HOF selection committee can start working on my bribing strategy [smile].All the best,

CoBra(too)$-Index soaring, so is POO and CRB#361399/6/2000; 16:29:46

... euro hitting new lows - probably the first new currency in history starting without a gold/silver convertability? Or probably I'm just too old fashioned.
Sorry, friends TG, Ari and others, including MK - I'm becoming more of a sceptic in the viability of the euro, though mostly because of political, or socialistic nuisance in the EU - than fundamentals.
The Denmark referendum this month will be crucial towards the future of the euro - and as all polls promise - it will be against the "common" currency.
Reluctantly, or better expressed in "FED" up - I feel that the $-faction is playing the end game much better than any of its would be (currency) contenders-with the Yen/Yuan a'waiting its chance on the sidelines- maneuvering the hybrid* euro into the box.
As I had some hope for a reasonable srength in the euro I'm arriving at Dante's Inferno: " Voi centrate ogni speranza la chate" - doomed?
NO, only sojourned!!! As too big to sink - this is too big not to work in the end - so it's time to show some meaningful countermeasures, I think - cb2 - High Noon - soon!!

wolavkaTonite tells alot#361409/6/2000; 17:00:41

Globex so far is holding over 278, dec.

range over, 281 before new york opens, a plus.

282 magic# next resistance 284 then 289.

looking for 306 soon.

714Look again, Simply Me...#361419/6/2000; 17:14:01

...the US$ topped out at over 160 in early '85. And now we have a nice saucer pattern to boot. Look out above!

Topaz, I don't know why it was as strong as it was in 84-85. Reaganomics, perhaps? It reminds me of late 70's, early 80's AU chart. Another once predicted (Kitco prognostications) that US$ would spike up before his currency war. Fwiw.

TownCrierSirs auspec and CoBra(too)#361429/6/2000; 17:27:05

HOF post is near the top of my current to-do list, to be posted alongside the latest ORO entry at the top of a fresh new page. My, how that wing has grown...

Great post...msg#: 36139
you're closer to the action so your euro sentiment means more than any of ours ever could. Your comment was perfect..."this is too big not to work in the end - so it's time to show some meaningful countermeasures, I think."

Whenever that time comes, the unique treatment of the gold position of reserves within the euro system bodes very well for our yellow metal's future. Politically, socially, and economically, the issue is so vital and sensitive regarding the aftermath that the application of countermeasures must surely await the right time (or near enough). I'm sure we can all await the weeks or months as needed to see our personal stakes and comprehensions validated, but I can certainly also see where the majority gathered around have become quite overanxious to tell their skeptical friends, "I told you so," regarding the promising results for gold, particulary as priced in dollars. In Turkey, they gold proponents are already telling their friends, "I told you so!"

In the meantime, keep your chin up...structurally the euro seems to have the higher ground (over the dollar)...but gold reigns supreme. Often imitated, but never duplicated.

On your comment:
"... euro hitting new lows - probably the first new currency in history starting without a gold/silver convertability? Or probably I'm just too old fashioned."

I still remain skeptical that a paper currency could succeed that was not originally born into usage as gold currency. In this regard the euro is OK because it is just another step along that evolution that began of many roots in golden soil (old marks, francs, lira, etc) coming together into a single unified (but still distinctly paperish) trunk. I don't know if that puts you any more at ease, but there it is.

nickel62Simply Me the reason the US Dollar was strong in the early 80s#361439/6/2000; 17:49:08

The US dollar strength in the early eighties was do to Reaganomics as you postulated. It was a period of very high interest rates in the US and a tightening money supply due to Paul Volker beginning to try and restore credibility to the US dollar in November 1979,Money supply was tightening, Fiscal spending exploded to rebuild the defense force and taxes were cut dramatically with the Reagan tax cut. The economy in the US was in a deep recession in 81-82 and the rest of the worlds economies were weak. We still had very high rates on the US dollar,tight money under Volker and Huge Government spending and Consumer spending unleased by the massive tax cuts goosed growth tremendously. All this meant money flowed from all around the world and the US dollar sky rocketed to amazing highs. The Plaza Accord in February(?)1985 was a meeting designed to figure out how to move the dollar down with the cooperation of our trading partners. It worked big time and the world began a long recovery as the strength of the US dollar in the early eighties became the engine that allowed the world to pull itself back from recession. The trading partners of the US were able to stimulate their economies as our manufactures became very expensive and there manufacturing concerns were able to earn very valuable high priced US dollars by selling into the United States markets and the massive tax cuts and huge defense spending provided the money to buy the goods from around the world that the high dollar value made affordable. The Plaza Accord was two and a half years before the market crash in October of 1987. Its relation to that crash if there was one is too complex for my mind.
RockgrabberOpec as a watch dog#361449/6/2000; 18:12:27

I am a western thinking mind to a certain degree, and I have strong thoughts that my mind has been messed with. That is exactly why I buy everybit of this whole concept of deception being brought about on the people right now. After all we are being fleeced and obviously hardley any either know or care. Is it there fault? I wont go there, cause I dont know.
Is it not the conspiritors themselves that own, controll, and print the press we read? It is. Then contrary opinion should be easy to see why on this subject you should want to use it. That is probably not just in relation to Gold Manipulation either, but in all aspects of life I am betting. Anyhow...
Oil prices seem to be the first things that rise after Drugs that reflect the inflation that is to come from money expansion. But Oil is of course easier to see. Its the hidden tax that allows the goverment to steal ones fiat money (thought to be wealth) that the goverment has made them work for and the more they can get them to barrow the more they will have to work, the more the goverment can tax, the more money the can expand the system with and use as inflation to steal away ones basically vital energy. But the great thing is is that here in America our govermant has been in the lead of this, and our dollar is funnilly super strong, and even though it is fiat, we can purchase the real stuff for the fake stuff at a bargain.. This has worked out all to well. THE BOOK JUST KEEPS ON UNFOLDING PERFECTLY ACCORDINGLY. Next Pages please.. AHAHA Actually its not funny, I dont think, when I think about it
Anyways we create our own enemies just to distract our own people. I am not falling for it. Never has a moment in history been so easy to see the saying BUY LOW. Go ahead Goverment spread the lies, take over this earth, behind deception. But there is a law they dont look like they know yet and it would read... Anything clothed in deception is destined to fail. It just takes time...
I just felt I wanted to say a little something. After having read such great contrary thinking here I really just wanted to say thanks to all who dont wish to decieve, but wish to kill it. Please kill the deception!!

OPEC stand firm

After saying that I will be so bold if I may (may not pay off, but I can pray) I will already thank OPEC for being such a good watchdog at such a great time. Thank you OPEC.

Rockgrabber(No Subject)#361459/6/2000; 18:21:22

I am sorry I left out a main thought of mine. Especially for us here in America, or anybody buying anything with US dollars. Anser me this would you rather see gold at 280 or 600? I can buy twice as much here at this level because even when its 1000 I will still trade in every fiat dollar I ever make that I dont have to use to pay a legal tender payment on anyhow. Keep the Gold flowing so freely to me.
Cavan ManBest advice from USAGOLD Today#3614609/06/00; 19:27:03

In a lengthy conversation with our fine host he said, "Buy wine by the case." I hope that is something we all can agree upon. Cheers MK.
Cavan ManCrude#3614709/06/00; 19:29:56

Showing $34.95
AristotleGood thoughts, Rockgrabber. I largely agree with you.#3614809/06/00; 19:35:54

It's all about "keepin' it real," isn't it? I especially liked your comment-- "Anything clothed in deception is destined to fail. It just takes time..." The same thing can be said for policies and operations built on unstable principles or theories. But I'll tell you this: any timeframe of false reality built on deception or bad policy that happens to also offer me such cheap opportunities to acquire a mountain of Gold for the eventual reality check certainly makes it easier on me to bide my time and endure the lengthy process of inevitable correction. And as dollar-earning Americans, we should not only be thankful for the present opportunity, but we should also not delude ourselves into believing that the world "owes" us this kind of favor. It can't last forever, and the euro-introduction is the writing on the wall. In terms of real income, Gold is nowhere in the world so easily obtained as it is right here, right now.

Gold. Get you some. ---Aristotle

jinx44What's in it for the EU???#3614909/06/00; 20:30:20

I wonder if the EU has an ulterior motive with letting the euro fall as it has. I know it is fallacious to assume that a government works as anything but a kakistocracy, however, lets say they could force a move into the euro by letting it fall and then, perhaps, trapping a group of targeted shorts, force some kind of settlement? Is there a gold angle here too? Do they want to break a Soros-type trading entity and focus attention on the euro? How could a low euro get the attention of the ME oil producers? Are they buying gold with cheap euros as an incentive to "go euro"? Any Europeans here have an opinion??
AristotleHere's one for you, Cavan Man.#3615009/06/00; 20:34:12

My longish thoughts seem to be making very little headway in leaving a lasting impression in answering the oft' repeated question, "Why isn't the price of Gold rising?" They are either ineffective or incorrect, and therefore the question is asked again and again in search of a valid answer. In the event that my proffered explanations are ignored because the general impression is that they are NOT the correct, I encourage anyone and everyone to please promptly set me straight on the path to a keener understanding.

I'm inclined to think I'm not being met with objections because my position is fundamentally sound, but that I'm failing to provide a suitable and lasting answer to this question because my delivery needs to be reduced to a standard media soundbite. So here it is, in response to the question and consternation that you've articulated on behalf of the free world for hopefully the last time--to be promptly followed by a Gold rush as a million cartoon lightbulbs illuminate over heads. Everyone wants to know--

"Why isn't gold moving? POG is defying every historical precedent where, fundamentals should dictate AT LEAST A MODEST RISE."

IN A NUTSHELL (my own cranium?):
Physical Gold is flying under the radar.
It has been the issue and trading of paper Gold that has called the tune.
It is this paper Gold that is being "priced" by the markets.
The POG that you see falling is actually a representation of the falling price of paper Gold.
So then, why is the market price of paper Gold in decline?
It is falling for the same reason that we have seen ALL national currencies lose value over time--through a combination of 1) inflation of the paper supply, and 2) through dwindling confidence in the paper.

To be sure, it is not confidence in physical Gold that is slipping, but is rather a failing of confidence in the inflated supply of paper Gold that is at this time calling the tune and being reflectively priced into Gold by the structure of the marketplace.

Just as it always has before, complete failure of the paper equivalency awaits. The paper portion dies, and only the physical Gold remains to deliver your wealth to the other side.

In a nutshell's nutshell: The price of Gold is falling because we are witnessing the end days of the timeline/lifespan of a "currency system" known as Paper Gold. I expect considerable volatility until the "bitter end." (If you can in fact call something "bitter" that ushers in the dawn of a new Golden day.)

Gold. Get you some. ---Aristotle

R PowellDollar and Gold together?#3615109/06/00; 20:35:26

Mr. 714 reminds (36141) us that Another predicted the dollar's rise during currency wars. Did he not also speculate that both the dollar and POG could rise together. I always had trouble with that until recently when I began thinking of the dollar, not as stronger, but as stronger on the currency exchange table. If rising oil prices effect the global economy, might the dollar not gain against other currencies even while the whole world economy blows up and POG skyrockets? Is this what Another was refering to?
Rockgrabbermoer insight to a bright furture#3615209/06/00; 20:46:47

Rockgrabbermoer insight to a bright furture#3615309/06/00; 20:46:49

Rockgrabbermoer insight to a bright furture#3615409/06/00; 20:49:19

Rockgrabbermoer insight to a bright furture#3615509/06/00; 20:51:21

Rockgrabbermoer insight to a bright furture#3615609/06/00; 20:51:23

Rockgrabbermoer insight to a bright furture#3615709/06/00; 20:51:24

Rockgrabbermoer insight to a bright furture#3615809/06/00; 20:51:25

Rockgrabbermoer insight to a bright furture#3615909/06/00; 20:55:07


GoldflyYessssssssss...... Rockgrabber......#3616009/06/00; 20:55:43

You are living proof!

Pay your exorcist.... or get repossesed!
Rockgrabbermoer insight to a bright furture#3616109/06/00; 20:58:03


megatrontopaz/lamprey#3616209/06/00; 21:05:41

Great book, but Ayn Rand always did have a soft spot for lying scumbags like Greenspan. Why a precision-grade thinker like her would allow a two-faced stalinist-esque
puppet like him to destroy her beautiful writing is beyond me.
If you arn't familiar with your 'commie' friends to the north, I'll let you in on a secret. We are BROKE!!! Why does a country that claims to have a budget surplus of billions sell 60,000 measly ounces? To support the banks that literally own this country. Full stop.

CanuckOh My!!#3616309/06/00; 21:08:29

CRB closing in on 230; crude +35 big ones; heating oil hits a buck.

Bridge/CRB Current Quotes
Other Futures Markets

Bridge/CRB Index

Page snapshot Wed 06 Sep 2000 23:07 ET
Description Last Change Percent Change
Bridge CRB Index 229.65 -0.09 -0.04 %
Bridge CRB Futures Price Index 227.5 -0.25 -0.11 %

Description Last Change Percent Change
Crude Oil 35.06 +0.16 +0.46 %
Heating Oil 1 +0.0034 +0.34 %
Unleaded Gasoline 0.997 -0.001 -0.1 %
Natural Gas 5.021 -0.05 -0.99

TheStranger(No Subject)#3616409/06/00; 21:27:20

Off With Her Head!

As far as the U.S. Government is concerned, there is no inflation (and there won't be any either until after the election). Apparently oblivious that oil prices have already tripled in the past 18 months (they are still hitting new highs just about every week) a compliant treasury market blithely goes along for the ride.

Boy, what a rude awakening those chirpy bond traders have got coming.

Supposedly, the Fed has engineered a soft landing. Yet, with unemployment still near 4%, and the trade deficit regularly exceeding $30 billion/mo., now comes word that America's savings rate has just hit a new all time low, -.2%. Is this the stuff of soft landings? Just last week, it was reported that new-home sales exploded 14.7% in July, the biggest single month increase in 7 years.

Yes, I know: Inflation is not just an economic phenomenon. It is also a psychological one. Nonetheless, sooner or later (sooner, I should think), all the wishful thinking and the statistical manipulation must give way to reality.

Prediction: In the days ahead, gold will rise as more and more people begin to reject the spurious claims of those who have said inflation was dead. Labor Secretary, and chief Clinton propagandist, Alexis Herman will be dragged off to the guillotine. At the very end, she will be heard screaming to an angry public, "Who are you going to believe, dammit, me or your own lying eyes?"


Having just taken a long motorcycle journey, I have been mostly incommunicado, of late. I had a marvelous time, yet I am delighted to be back at hearth, home and Forum. I am sorry to have missed so much of the wisdom that regularly graces these pages. I am sure there will be gaps in my knowledge for awhile as a result. Still, I note the POG has hardly moved a whit in my absence. The POO, of course, is another story. How long can the one continue to rise without pushing up the other? Not long, if you ask me.

Meanwhile, thanks to M.K., canamami, Peter Asher, Shifty, Leigh, Cobra, Cavan Man and anyone else who may have noticed my absence. Once and for all, I have proven to myself that friends are very important in this life and also that, given a choice, two wheels are almost always better than four.


Canuck@ Lamprey_65#3616509/06/00; 21:28:34

I think your statement may answer your question.

"A major gold producer and the country is holding less than 100 tons in the vault".

I've often wondered why we (Canada) have so little reserve but maybe we can 'drum' it up in a hurry.

Second, a commodity rich country ie: lumber, base metals, energy, etc. has high revenues during times of inflated prices. Thus the rise in the TSE300; best gaining index on the planet if I may be allowed to boast for a moment.

Third, everybodies currency is higher than ours (ha,ha) so exports are cheap. Maybe this thought bears on the Euro debate?


ShermagLamprey, Canada's dwindling gold reserves#3616609/06/00; 21:36:19

You said:
"Canada only has less than 40 tons of gold in its reserves?!

A major gold producer and the country is holding less than 100 tons in the vault...very sad."

Yes, very sad indeed for a Canadian like myself. You are correct on the amount remaining of our paltry reserves. It is the stated policy of our CB that the U.S. doller will be the primary reserve held. Unfortunately, the disposition of our gold reserves is only one example of how we Canadians (actually, I refuse to accept any of the blame) have squandered an enormous opportunity, given the heritage of a stable and effective rule of law, and abundant natural resources.

I have simply resolved myself to protect my future by the acquisition of some of those discarded reserves.

Gold. Got me some. Shermag

schippiPOG and Sunspot activity#3616709/06/00; 21:42:26

For those of you who do not believe Sunspot
activity is inversely correlated with the POG;
I dare you to click on the above URL
( Smile )

714Aristotle...#3616809/06/00; 22:29:01

...why is POG stagnating, you ask?

As our fellow poster, oldgold, pointed out yesterday, lease rates continue to be very low. Combine that with ongoing dishoarding central banks that could go on for years. In fact, it seems as if the Washington Agreement is a bit disingenious, yes? And with the pathetic lack of interest in gold by investors, these factors combine to mire gold below $300 US.

Reality is not very pretty, yes?

JMBBILL MURPHY#3616909/06/00; 22:36:18

Mr. Murphy is now referring to the XAU as the "Gold and Copper Index". I'm sure glad to see that he has not lost his sense of humor. How can we ever thank this fine gentleman for his efforts on our part?
Luv ya Bill!

JMBI should say...#3617009/06/00; 22:47:42

...on our behalf.
How can we help? Maybe we should discuss this.

megatronbill murphy renumeration#3617109/06/00; 23:01:44

I think they should carve his head into the side of Mount Rushmore. Knowing Clinton, he'll more likely get his head 'caved' in.
AristotleActually, 714, rather than asking I tried to explain how and why POG is stagnating.#3617209/06/00; 23:41:58

In my mind there is no mystery whatsoever as to the reason Gold is low in price. What have you to say about the reason I gave?

You brought up other points entirely, which may certainly play a (lesser) factor, so let's discuss some of your points suggesting the reasons why you believe it to be stagnating--

714--"As our fellow poster, oldgold, pointed out yesterday, lease rates continue to be very low."

OK, those lease rates certainly factor into the mathematical equation that derives spot prices from futures prices, but they don't explain why futures prices are low. It wouldn't hurt to evaluate which aspects are ultimate causes, and which aspects are merely effects. We sure don't want to take our lead from the downstream processes. And on this issue of Gold lease rates, people might want to consider whether these rates are to this day determined by the marketplace (such as we basically see in the 30-year bond market), or are they more of a contrivance such as we see with the Fed's Discount Rate or Fed Funds Target rate.

714--"Combine that with ongoing dishoarding central banks that could go on for years."

??? It seems to me that new mining contributes much more to the annual supply than does CB sales. And of the small volume of CB "sales" that does occur, how much of this goes beyond a CB-to-CB transfer? How much (or should I say little?) actually is dishorded from the global CB reserve/monetary system to enter the private market? Not enough to worry about.

714--"In fact, it seems as if the Washington Agreement is a bit disingenious, yes?"

Respectfully, I say no. How can the argument be countered that suggests that the 15 CBs didn't HAVE TO make this agreement at all? They not only provided heretofore unprecedented transparency to their intentions regarding Gold reallocations, they also unequivocally stated that Gold would remain an important monetary asset, lest there be any doubt. On what point do you feel the 15 CBs have acted counter to their agreement?

714--"And with the pathetic lack of interest in gold by investors, these factors combine to mire gold below $300 US."

???? The quarterly Gold Demand Trends reports have consistently shown for the past couple years since the Asian Contagion wipeout that real Gold demand is at all-time record levels, and is greatly in excess of annual production. The shortfall is obviously made up through the wonders of bullion banking, through the extremely limited outright dishording of official reserves, industrial reycycling, and through the flow of private Gold holdings from the weak hands into the strong. In my mind, there is nothing pathetic about record demand.

Gold. Get you some. The Sun is setting on the paper Gold system. ---Aristotle

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TopazSchippi#3617409/07/00; 02:58:53

My prediction for Sunspot activity (4 mth forecast)
Activity will remain intense for several more days culminating in an epochal energy release mid-late Sept.
A strange and wonderful calm will then manifest itself throughout Oct-Dec and activity will all but cease.
Sunspot Activity NIL-ZILCH. (POG will, of course, react contrarily)
Good efforts on the charts Schippi.

TopazSupporting the "habit"#3617509/07/00; 03:41:06

Thing's are sure hotting up in the (they-v-them)-v-us equation. Yesterday saw the Euro plumbing new depth's v-us$ and still no defense, while the Aussie bleeder was "rewarded" with a static day courtesy of Central Bank intervention in the currency market.
The Euro is certainly proving to be "not as before" and as MK noted, they are NOT going to be intimidated by the activities of Hedge Fund/Speculator galoot's.
Hang in there EURO- Drug dependence is not a long-term solution as Malasia's Mahartir (sp) has shown convincingly.
The IMF "dealers" and crony Hedge fund "pushers" day's are numbered.

Simply Me@714 and nickel62...Also Oil/Inflation/Europe article#3617609/07/00; 03:57:24

714 - msg#: 36141)
...the US$ topped out at over 160 in early '85. And now we have a nice saucer pattern to boot.
Look out above!

My reply: I see it now. Thanks for the correction. I blame an old-fashioned 14" monitor that cuts off the edges of some pages now that everything is written for 15" or bigger. It
couldn't have had anything to do with my ineptitude with numbers....naaaah.

nickel62: Thanks for the quick revue of economics over the last few decades. I lived through the 70's & 80's, of course...but remember only the personal struggle to pay the bills, woefully ignorant of the market forces that were affecting my life. What a difference the internet makes, eh? I wonder if our children's children will ever live in such isolation again. I hope not. I actually believed the Whip Inflation Now propaganda in the 70's and, in the 80's, thought that trickle-down economics would really trickle
down to me.

Thanks to all on this forum, where knowledge is limited only by an individual's capacity to learn....which should keep me quietly in the back of the classroom for a long time!

PS...the link above is to BBC article from 9/5. It talks about the pain Europe is feeling from high oil prices and inflation. I found it while looking for hints of Crown Prince Abdullah's discussions with our notorious head of state.
High petrol prices have pushed up inflation
across Europe, and triggered widespread protests by French truckers, who are
blockading 60 oil refineries and depots across
the country.

A week ago French fisherman had blocked
ports to protest the cost of diesel fuel and
forced the government to promise them
financial help.

However, despite its call to bring down prices,
the EU commission says it will examine the
French fuel subsidy to see whether it is
breaching European competition rules.

Opec treads carefully

Opec officials, meanwhile, seem to stand fast
on current production levels.
Oil producing countries reportedly fear that
any further increase in production levels could
backfire on the cartel and drive down prices
well below the target level of $25 a barrel.

My thought: Who will flinch first?
simply me

wolavkaOvernite#3617709/07/00; 04:16:28

Holding gold down for fridays options expiration, today in new york, bounce, but should get good movement into Monday.

floor is in, mining stocks showing volumne. Middle east and east will crush U.S.

wolavkaDec gold#3617809/07/00; 05:00:53

Something about the # 277.40,

Baseline. 20 + year game is over.

Hold no allegiance to any place, only GOLD.

wolavkastops #3617909/07/00; 05:29:14

hitting down to 276- 275.80

274.80 target buy orders

ETStranger#3618009/07/00; 06:25:27

Hey Stranger - I thought you might enjoy this article from the Financial Times. It's Jim Grant's take on why the Euro is in the tank and the bond market ignores oil price increases. From the article:

"To a lay investor, the debate over the validity of hedonic adjustments may seem as irrelevant as
it is obscure. However, the consequences of the real-life application of these adjustments are
significant and far reaching. Citing the alleged outsized gains in productivity growth, the US
Federal Reserve has pursued a less restrictive monetary policy than it might otherwise have
done. Crediting published US productivity data, currency traders have bought the dollar and
sold the euro. Believing in a uniquely productive "new economy", bondholders have entered no
meaningful protest against $30-per-barrel oil prices."

"Mr Greenspan is therefore only partially forthcoming when he urges backward Europe to take a
page from the best-selling US book on the new economy. He should specify the relevant
chapter - Wealth through Accounting."

ETWhat's in a name?#3618109/07/00; 06:33:32

"One New York stockbroker, seeking to recover
from losses in the market, loaned him $50,000
after a night carousing with Dom Perignon
champagne at the NV Tsunami."


goldhunterReality check...Get You Some!#3618209/07/00; 07:09:33

In yesterday's posts we have a well known poster offering his opinion almost as fact as to why gold is down so far in the price cycle...It's because of the "paper" gold market he writes...futures are the root of all evil...don't you know?

We will see futures and physical turn higher sometime together, and when the tide turns, futures and coins will reward all who hold them (longs)...

Futures and physical oil, platinum, and palladium have already moved nicely higher (together) and gold's time is coming.

We all choose what, where and how we invest our funds...It will be very interesting to read what Mr. Aristotle has to offer as an excuse when gold...both kinds, are trading 600...

Reality...get you some.

wolavkaworked off stops#3618309/07/00; 07:09:45

dec now 277.60, we shall see.
wolavkaold timers/ newbies#3618409/07/00; 07:30:13

position squaring. trend reversal 8-11, reaction/buyin's 8 21-24


watch close today.

wolavkaprior post#3618509/07/00; 07:31:41

not for investment advice.
WAC (Wide Awake Club)Boom in the City (London) - Good Read#3618609/07/00; 07:33:10

This is another excellent article by Anthony Hilton.

Boom in the City

by Anthony Hilton.

It's a bit of a shock coming back from holiday. Just a few
weeks ago the Labour Government was squabbling and the Prime Minister had lost his sureness of touch, businessmen were moaning about the high pound, stock markets and house buyers were preoccupied with the threat of interest rate rises to come.

Even the much vaunted computer and dotcom stocks
were seen to have feet of clay, while the macho types who run the world's mobile phone companies seemed determined
to bankrupt their industry by paying billions of pounds
which they could not afford and would have to borrow for
the next generation of mobile phone licences.

What a difference a month makes. Today, if newspaper
headlines are to be believed, investors have rediscovered
their appetite for dotcom shares. The Nationwide and the
Halifax separately report that house prices are coming
gently off the boil which makes it less likely that interest
rates will go up when the Bank of England's Monetary
Policy Committee delivers its verdict tomorrow. The
mobile auctions of Britain and Germany are over and
those still to come are small in comparison. A little
weakening of the pound has helped manufacturing perk up
and the services sector is still expanding rapidly.

All that has encouraged the stock market to soar to a
year's peak, most of the gain coming in the past few days.
There has been a discernible change of mood.

The daft thing is that a quick peer below the surface
suggests very little has changed. Economic growth in this
country is cruising along now at the same rate it was in
early summer, Eurozone growth continues to pick up,
though the euro still suffers against the dollar because
American growth continues to astonish. It tempts one to
think that the profound economic shift which has
galvanised the markets is little more than the fact that a
month ago people thought the glass was half empty; today
they see it as half full.

It is a bit more subtle than that, though. It is a basic
economic law that if interest rates are rising, stock markets tend to fall, because places other than the market become more attractive homes for money.

Rates have been going up now for more than a year, but
following the latest round which saw increases in America,
Japan, Euroland and Britain, markets now believe that we
are nearing the end of the cycle of rising rates. That has
taken a lid off the stock markets. They have therefore
begun to bubble, albeit a bit of caution surfaced in London
yesterday, in front of the MPC meeting.

What is harder to explain is why the market gets excited
about the interest rate good news while resolutely ignoring
the blackest of black clouds on the horizon. The oil price
hit a 10-year high in London on Tuesday when the
September price hit $36 and the more representative
October price topped $33. Eighteen months ago it was
close to eight. The big question no one wants to face up to
is whether the new economy can stand an old-fashioned
oil shock.

By any measure, a quadrupling of oil prices in 18 months
constitutes a shock. True, the price of oil in real terms is
well below what it rose to in the 1970s, when it plunged
the world into recession and sparked off the inflationary
spiral which took 20 years to run its course. But it is the
relative movement, as well as the total which matters.

We are less profligate with oil than we were 25 years ago,
making a given amount go perhaps 25 per cent further, but
it is still a key input - not only in determining the prices of the basic materials of everyday life from plastics to pesticides, but because it is the core cost in transport.

So if oil goes up, so do all the other energy costs.
Everything in the world needs energy - which means
business and consumers have less money to spend on
other things and the world economy turns down.

The effects are possible to ignore, however, because it
takes them about 18 months to work through the system,
which means perversely that the buoyant economic
conditions we see all around us could well be the result of
the rock-bottom oil price 18 months ago when prices
were below $10. That, in real terms, was one-fifth of the
price in the early 1980s, and indeed half the price it was
way back in the 1950s, so when you want a reason for the
current boom you really need to look no further.

Forget Bill Gates and all the computer hype, the real
reason we are all doing so well is that the world is, or
rather was, awash with cheap energy. As a result profits
soared, business ex panded and everyone want ed to
become an entrepreneur. Far from being a boom caused
by dotcoms and everything that goes with them, the boom
is based on nothing more complicated than a very cheap
energy for most of the 1990s. It was a nice oil price
shock. Now we are about to get the nasty one.

This is certainly the line pushed by some of Britain's best
economists, Professor Andrew Oswald of Warwick University for one, and one does not have to buy into the whole thesis to be given cause for concern. Even if computers and telecommunications have revolutionised the world in a way which is a cut above other inventions and discoveries, like electricity and automobiles, the modern economy runs on movement, and that requires oil, and nowhere is that more true than in the United States, whose boom has been the locomotive for the rest of the world.

The counter argument runs on the line that this time it will
be different. And perhaps it will. In a world where computers do indeed allow huge reductions in cost, it may
be that the world's companies are more resilient. This
shock may be more muted and adjustment might be easier
because it has arrived over 18 months rather than vernight, as happened in 1973 and 1980. We are certainly better placed to afford it.

We are much richer, and it needs to rise to $90 to be the
same now in real terms as in 1973. And yet the threat is
there, and it does not actually take much these days to
knock an economy on the head. If a few bankers and
financiers take fright, the transmission mechanism of the
world's stock markets give a clear signal to everyone else
to panic.

The best hope, though, is that good sense will prevail at
Opec and they will turn the taps on and increase the
supply before the price rise bites too deep. But that is a
difficult call for a divided cartel to make, particularly as
they do not want to overdo it and send oil all the way
back down to $10 again. There is certainly no shortage of
pressure and advice. Even Sheik Yamani, the voice of
Opec in the 1970s, has warned his erstwhile colleagues
not to overdo it, because they will eventually force the
world to adopt other technologies.

The Stone Age did not end, he said, because the cavemen
ran out of stone. To extend the metaphor, there is no risk
that the oil age is about to end, nor that we will run out of oil. But there must, at the very least, be a threat which the world's stock markets and political leaders would do well to recognise, that the world economy could run out of steam.

wolavkadec cattle#361879/7/2000; 8:21:10

I like them, no steaks left in texas. Burnt up.
White HillsGreenspan Letter #361889/7/2000; 8:36:52

In a letter August 25 to Chairman of the House Banking Committee"s capital markets subcommittee, Greenspan urges Congress to review lower-cost financing and other government subsidies enjoyed by giant mortgage companies Fannie Mae and Freddie Mac. One very interesting statement by Greenspan might lead one to believe there is more to it than meets the eye "Subsidies accorded to GSEs (government-sponsored enterprises) are, of necessity at the expense of other federal or private sector initiatives and hence are ultimately financed by households, either through taxes or through the reduced accumulation of wealth," Greespan said. Do you think he is losing control and is worrying about the Treasury creating money through these type of companies? White Hills
USAGOLDWisp of Inflationary Smoke Seen Drifting above This Best of All Possible Worlds#361899/7/2000; 8:53:55


(9/7/00) . . .Gold continued to drift lower despite oil's "major league" pop up yesterday -- up over $1 at nearly $35 per barrel -- and a technically predictable recovery in the euro and yen. Whether or not those recoveries represent anything other than a welcome respite from the shelling remains to be seen. Oil, on the other hand, looks very much like it's for real, along with other redoubtable signs of inflation just about everywhere you look, including within most of the economies of the world running above subsistence levels.

This "New" Reality for the "New" Economy amazes some, befuddles others and sends still other scurrying about to find an explanation. Seems there's always some of the "old" in the "new" no matter how much we try to make ourselves believe that our history is substantially more enlightened than that of our predecessors -- that, this time, we have conquered the worst aspects of the economic cycle and ourselves. In the end, this never proves to be the case though it always sounds good and sells well until we are forced to look back at it after the inevitable turn in history's march -- turn for the worse, that is. Meanwhile government departments responsible for reporting on such developments devise ever new and more clever ways of keeping the general public from finding out this economy's dirty little secret:

Take for example this report published by the Boston Globe just this morning as a case in point. Please note the differences in the economic milieu as described here and that revealed by the government's numbers:

The unemployment rate ticked up a bit in August. Consumers aren't spending as freely as they once did. The economy as a whole seems to be slowing down.So how do you explain the fact that big chunks of the economy appear to be bursting at the seams, with demand outrunning supply and prices climbing at a scary rate?

Consider a few examples:

The price of oil hit almost $35 a barrel yesterday on fears that oil-producing nations will not pump enough oil this winter. The current price represents a 10-year high. A year ago oil sold for $18 a barrel; in January 1999 the price was $11.

Natural gas prices are twice as high as they were a year and a half ago. Parts of the country have experienced sharp spikes in the price of electricity as utilities scramble to come up with enough power. In California some customers have seen their bills triple. Locally, the electric utilities are asking for rate hikes of up to 12 percent this fall.

The price of air travel has climbed 9.5 percent over the past year. Planes are full, the skies are congested, and the number of late flights is at a record high.

In Boston, the cost of renting an apartment has increased 9 percent in the past year and for two-bedroom apartments, more than 80 percent over the past five years. According to one account, there were only 150 apartments available for rent this September citywide, about one-third the usual number. In the regular housing market the story is much the same: lots of demand, little supply, and rising prices.

''Pressing against the limits is the story of this economy,'' said Fred Breimyer, chief economist at State Street Corp.

One cannot ignore the total absence of the word "inflation" in the article -- but nevertheless the reality reported in the article is a far cry from the one revealed in government inflation numbers. All the while, gold remains comfortably in check and Wall Street analysts can continue fantasizing that inflation is not a problem. "For consummate proof," they will say for the upteenth time, "all one need do is look at the anemic performance of the number one inflation indicator -- yellow metal." Like the unflagging optimist who fixes his attention on the only tree left standing after a wildfire and notes: "See. I told you there wasn't any fire," these analysts see what they want to see, or better put what best serves the bottom line. One wonders through all of this how much longer the worldwide investment community will continue to digest such pablum without getting a bit of indigestion, or at least feel the nagging twinge of doubt that all's still well in this best of all possible worlds.

That's it for today, my fellow goldmeisters. More tomorrow.


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Rockgrabber(No Subject)#361909/7/2000; 9:32:38

If the dollar looses much of its value, and oil becomes cheaper for other areas, Does the dollar even stand a chance at loosing its strength when everone has to use dollars to buy oil? And as the price is going up they need more dollars. What if the dollar lost much of its value, I suppose that in its self would make for oil even go up. But the price of oil seems hard pressed to keep its self going if the dollar keeps its stength or keeps strengthinging. But if the dollar lost value oil must really rip. What type of event at present might one see that can knock the strenght of the dollar? I mean shoot even if they want gold first they need dollars... All of that must help artificially strenghten the dollar even more. And it must really stim the demand for asnything that must be bought with dollars when they are so strong. So to see Gold so low against a strong dollar is not real surprising as Americans are provided with the low gold price when the dollar is strong. What a perfect bunch of scapegoats, Americans would be the last people on earth to depart with there hard earned dollars for GOLD. And I dont think it is because they are so bright. Anyhow Oil would really fly if the dollar lost value I think wouldint it? Or are there tons of other variables? Anyways Gold sure would, I see that anyways. I just wonder what it takes for the dollar to shed all of its extra pounds, as that seems to be one overwieght currency.
wolavkahang on bugs#361919/7/2000; 9:51:17

soon, it's gonna go. 278 + close in dec very positive
foxBrussels stock exhange#361929/7/2000; 10:51:45


De-listing of B-Gold Options; Changes in Index Rules <br><br>

The Executive Committee of Brussels Exchanges (BXS) has decided to gradually de-list the options on the B-Gold index, mainly due to the fact that the index-rules only allow South African gold-mines listed on BXS to be part of the index and also due to the consolidation movements in this sector. <br><br>

On the other hand, considering the open interest in the options, the Executive Committee has decided that the last expiry date will be the 16th March 2001, being the longest available expiry today. Furthermore, no options with expiry dates after March 2001 will be created. <br><br>

Nevertheless, and in order to allow investors to manage their portfolios, options will be created with intermediate expiry dates, following the general rules of BXS-Derivatives.

In case one or more stocks of the index would no longer be listed on Brussels Exchanges, following any action such as a merger or take-over, the new entity –if listed- will replace the outgoing company included in the index, in order to ensure continuity, even if this entity would not be a South African company.

At a later stage, the composition (and possibly the name) of the index will take into account the evolution of the sector through its internationalization.

For more details contact Mr. Vincent Van Dessel on +322 509 13 44.

foxBrussels#361939/7/2000; 10:53:56

anywone comment on this ?

Gold Trail UpdateThe Gold Trail Discussion has been Updated#361949/7/2000; 10:54:03">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
foxBrussels#361959/7/2000; 10:54:16

anywone comment on this ?

foxBrussels#361969/7/2000; 10:54:52

anywone comment on this ?

Peter AsherTangential subject#361979/7/2000; 11:14:47

-- by Malcolm Forbes

A lady in a faded gingham dress and her husband, dressed in a homespun
threadbare suit, stepped off the train in Boston and walked timidly without
an appointment into the Harvard University president's outer office.The
secretary could tell in a moment that such backwoods, country hicks had no
business at Harvard and probably didn't even deserve to be inCambridge.
She frowned."We want to see the President," the man said softly.
"He'll be busy all day," the secretary snapped.
"We'll wait," the lady replied.
For hours, the secretary ignored them, hoping that the couple would
finally become discouraged and go away. They didn't, and the secretary grew
frustrated and finally decided to disturb the president, even though it was
a chore she always regretted. "Maybe if they just see you for a few
minutes," she said, in exasperation.
Someone of his importance obviously didn't have the time to spend
with them, but he detested gingham dresses and homespun suits cluttering
up his outer office. The president, stern-faced with dignity,
strutted toward the couple.
The lady told him, "We had a son who attended Harvard for one year.
He loved Harvard. He was happy here. But about a year ago, he was
accidentall killed. My husband and I would like to erect a memorial to him,
somewhere on campus."
The President wasn't touched; he was shocked. "Madam," he said
gruffly. "We can't put up a statue for every person who attended
Harvard and died.If we did, this place would look like a cemetery."
"Oh, no," the lady explained quickly. "We don't want to erect a
statue. We thought we would like to give a building to Harvard."
The president rolled his eyes. He glanced at the gingham dress and
homespun suit, then exclaimed, "A building! Do you have any earthly
idea how much a building costs? We have over seven and a half
million dollars in the physical plant at Harvard."
For a moment the lady was silent. The president was pleased. He could
get rid of them now. The lady turned to her husband and said quietly, "Is
that all it costs to start a university? Why don't we just start our own?"
Her husband nodded. The president's face wilted in confusion and bewilderment.
Mr. and Mrs. Leland Stanford walked away, traveling to Palo Alto,
California, where they established the University that bears their
name, a memorial to a son whom Harvard no longer cared about.

You can easily judge the character of others by how they treat those
who can do nothing for them or to them.

wolavkaJoke#361989/7/2000; 11:22:19

Okay, so I have to wait till tomorrow till oct. options expire before you blow the pog up.

Get on with it.

SHIFTYPeter Asher #361999/7/2000; 11:27:39

Peter: That was a good story. Your a regular Paul Harvey!

Off to cut grass.

Rockgrabber(No Subject)#362009/7/2000; 12:18:12

I know one thing last year I lost 22,000 in Gold Option trading. Not bad at all compared to many. But it is still 100 percent of what I used. Sure I had times were I was up plenty, but of course I did not get out. But all of my coins and silver bars are still with me (only down a few percent on that stuff, instead of 100). But I still wish so bad to to trade those dang options its killing me..... With oil so strong, and the world having to buy oil(and Gold) in dollars, Does that in itself make the dollar strong? Does this artificially strengthen the dollar more then it should be?
oldgoldUSA GOLD#362019/7/2000; 12:21:06

There is strong evidence that gold prices no longer have much to do with inflation, but everything to do with the US dollar and the ability of the bullion banks to maintain their huge short positions.

The best indicator of future inflation generally is thought to be the Columbia Business School Leading Inflation Index. This turned up sharply im mid 1999 and has been trending strongly higher until very recently. But gold did nothing while this leading inflation indicator was soaring. But now that this indicator shows signs of topping out gold and gold stocks are acting as though they will go up before long.

The key is the dollar. Gold did nothing as inflationary pressures were picking up because the dollar was moving up at the same time. Gold will move big time when the dollar gets hit regardless of inflation. And if the dolalr stays strong, the upside for gold is quite limited even if inflation reaches double digits

RockgrabberOldGold#3620209/07/00; 12:48:56

That is what I wonder. If the dollar stays strong or even gets stronger Who will beable to afford Gold? The only ones from my perspective that could buy would still be the ones not looking far enough ahead to even want it at a cheap price. Why is the world so cursed so as to have to buy oil with dollars. Is it not feasable for countries to have to pay with Gold. A currency not atatched to a country. But then what is the Gold price priced to? Anything must be more fair then making them pay for our good furtune. Seems like a joke to me. The world has to buy there oil with our dollars. Who made them do this? Where does the IMF/World Bank stand on this? Buy the way dont they have there own currency devolped? What is it going to take to get them to release that junk to the world?
CoBra(too)FAZ, again carrying an article on GATA #3620309/07/00; 15:10:22

... Though this time they " The gold market is not manipulated" and prove it with Jessica Cross's numbers on her last WGC assignment, which was discussed here and was dissected by Sharefin on the Metropole cafe. They also rely on GFMS trash.
The gold producers funding WGC should start thinking about what kind of vermin their funding and why?
Anyway, I can assure you Bill Murphy is happy about developments, since they're now out in the open - even if they're hiding under a German language paper flag, they must be aware that the group has some able interpreters and open to debate, as they've swallowed the bait.
This may be warming up soon. Best cb2

JourneymanFree-trade III: The Ugly @ALL#3620409/07/00; 15:31:00

PREVIOUS INSTALLMENTS: Journeyman (09/05/00; msg#: 36076)
.. . . . . . . . . . . Journeyman (9/6/2000; msg#: 36133)

So far we've discovered in previous installments that the
establishment in general doesn't like free trade in free markets
-- _at all_ -- and that the "only one" who _does_ like free-trade
is our schizophrenic "consumer" half. The establishment doesn't
like free trade because competition for our consumer's money
causes the intense competition and pricing pressures inherent in
free markets.

We've also learned that because of the knowledge we each gain in
doing our jobs -- and the machines (capital equipment) we develop
as a result -- we are each more efficient at what we do than are
"non-professionals" attempting the same thing. The logical
offshoot is that _in general_ it's better for us each to do what
we do best and trade for most other things. Economists call this
"comparative advantage," and it's why we have to be crazy _NOT_
to trade. Also because of this, interfering with trade is
generally _not_ "in the common interest." (However, don't
dispair, Al, Shifty, etc. - - - there _are_ at least three
logical arguments _against_ free trade under certain

I'm sure you probably couldn't sleep last night just wondering
what would happen in this next installment. Well, HERE it is!!

_Free markets don't exist_

A free market is a theoretical geographical area in which people
can trade anything they own for anything others own and are
willing to trade --- and at what ever "price" they agree to
without any coercion --- and no interference by ANY unwanted
third parties in any way what-so-ever. No rules, regulations,
orders, or controls. No taxes. No protections for either
"buyers" (those with "money" to trade) or sellers (those traders
who want to trade FOR "money") unless they agree to such between
(or among) themselves. _Certainly_ no protection for the "vested
interests of entrepreneurs, capitalists, land-owners, and
workers" or any other non-participating (establishment) traders
simply because they don't like the competiton!

As I think you can see, we don't have any free markets in
the united States, except perhaps in the case of private
transactions that ignore all the rules, regulations, orders and
controls - - - and if the people involved don't pay any "Taxes,
Duties, Imposts and Excises" to unwanted third parties. In a
major perversion of fact and practice, such unhampered free-
market transactions are regularly labeled as occuring in a "black
market" -- because, remember, the _establishment_ (including
_our_ seller half) doesn't like the effects on _our_ prices of
free-market competition.

As things evolve in "real life," collecting taxes quickly becomes
the main focus of market-place interference -- which is
completely understandable. Which institution not only initiates
but primarily benefits from the collection of tax money? That's
why in government-speak, "black market" quickly evolves to mean,
"We didn't get our taxes." I would suggest that "black market"
would be a much more appropriate term for any market invaded by
largely unwanted third-party government vat-smashers and loom-
stealers in the interest of restricting competition --- but
primarily to collect taxes.

Clearly even here in the freest country in the world, we rarely
have free trade in free markets. THEREFORE, ANY ARGUMENTS THAT

_Apparent winners (sellers) and definite losers (buyers)_

Since even "here in the freest country in the world, we rarely
have free trade in free markets," and despite the fact that free-
trade is "in the common interest," it would seem that the anti-
free-trade forces are firmly in control. In essence, this is
exactly true. Since within each of us lurks both a seller _and_
a buyer, why is it our _seller_ seems to be thoroughly trouncing
our buyer?

My personal favorite illustration of how this is done and why
this is so is the operation of the various "Dairy Control
Commissions," governmental entities which exist in many states
purportedly to "control" or "police" the dairy industry.

First, if you believe we're free, you might wonder why such
_governmental_ bodies as "Milk Control Commissions" exist in the
first place. Once you learn how they operate, you'll wonder no
more. You see, despite the rhetoric and illusory claimed health
protection functions [*1*], the real reason dairy commissions
exist is to set the _floor_ price for milk. That is, these
commissions set the _lowest_ price dairy farmers can legally
charge for the milk they sell us.

Let me attempt to make this perfectly clear: Milk control
commissions make it illegal for dairy farmers to sell you milk at
low prices. Any farmer undercutting the official floor price
gets busted by the cops. On the other hand, these commissions
say _nothing_ about how high the prices dairymen charge you can
be. They could charge you a million dollars a gallon for all the
commissions care. Guess who serves as "milk commissioners."

I didn't figure you needed a multiple choice. The answer is of
course, "dairy farmers." The reason is economic: A few extra
cents a gallon isn't enough for individual consumers to be able
to afford the legal or political effort to do away with such
"milk control" entities. On the other hand a nickel a gallon in
extra profits times, say, 10,000 gallons of milk a day amounts to
$15,000 per 30-day month for a dairy farmer, ample motivation to
fight to maintain the advantages their seller-half gets from
these proto-fascist "milk control" organizations.

Consumers usually buy only in small increments here and there,
while suppliers on the other hand, as in the case of the dairy
farmers, sell in much bigger "lots" with much higher stakes to
them -- that nickel a gallon adds up -- which makes it worth-
while for them to "purchase" various forms of "competition
protection" from the government. As quipped by businessman
Johnny Chung in 1997 during the Clinton fundraising scandal
hearings, "I see the White House is like a subway -- you have to
put in coins to open the gates." This is the type of thing Ralph
Nader and others see so clearly when he speaks of "the corporate
state." [*2*]

Even here in the freest country in the world there are huge
numbers of other examples of ploys by businesses using government
to protect our seller-half from the free market competition
otherwise caused by our buyer half. *Thus there's traditionally
always been at least a clandestine alliance of government with
business in the interest of surpressing free trade*. [*3*] In the
battle between sellers (suppliers) and buyers (consumers), then,
this alliance is the main reason why sellers are clearly winning.

In addition to this economic advantage of suppliers over
consumers, there's another psychological factor that favors our
sellers over our buyers and helps explain the trouncing: What
good are free markets if you can't buy from them because
competition has eliminated your job?


1. As it turns out, such commissions allow feces, etc. in your
milk, as long as that milk is pasturized. Clean dairying, a much
more acceptible solution to most consumers, is harrassed and
essentially outlawed. You can see for yourself by looking into
the continual harrassment of businesses engaged in such clean
dairying. One of the most widely publicized is harrassment of
Alta-Deana Dairy by California "authorities." Milk Control
Commissions also foster "homogenization" done in a way that
causes homogenized milk to cause atherosclerotic plaques in our

2. This doesn't mean I support or would vote for Nader --
remember, if I weren't a devout non-voter, I'd vote for
libertarian Harry Browne.

3. Eisenhower, Marx, and even seminal free-trader Adam Smith
perceived this. Apparently Ike only saw part of the problem
since in his farwell address he only warned us about the
"military-industrial complex" part of the problem.

COMING NEXT: Free-trade IV: The Good, the Bad AND the Ugly --
_Lost jobs_


Al FulchinoJourneyman#3620509/07/00; 15:54:10

I wasn't despairing. <smile>
Al FulchinoPeter Asher#3620609/07/00; 15:59:58

Peter, Thanks for the nice story.
CoBra(too)A (very) brief summary of FAZ - article #3620709/07/00; 16:11:33

The FAZ headline, under the section Financial Markets and Investing
Thursday, Sept. 7. 2000, No. 208/Page 33

"The Conspiracy Theory on the goldmarket is misguided and wrong"

World Gold Council and GFMS: The arguments are not valid/Critique on GATA's Misinformation (Part 3.)

London, 6. Sept. The Conspiracy theory on the gold market disseminated by Gold Anti Trust Action Committee (GATA)is being rejected by WGC and GFMS. A market analysis by gold expert Jessica Cross for the WGC, could not find any indications toward a conspiracy of market participants or other sinister machinations. Der WGC is a pooling agreement of gold producing companies (rest of chapter missing).
The article goes on stating GATA's short history and goals citing Bill Murphy and Chris Powell.
Then repeating their (WGC & GFMS) allegations that GATA is wrong and citing all their numbers on gold derivatives...
" If someone thinks to have evidence for a conspiracy of the goldmarket, then he should take legal action" say's Jessica Cross citing GATA's allegations.
Since it's a pretty longish article I'll just give you the gist from here on, since Bill will have a complete translation asap.
WGC/GFMS talks about GATA being unable to retain a serious anti trust law firm, alleges GATA as an investment group being long gold at the wrong time, citing Gold Derivative Banking Crisis and misenterpretation and inconsequential assertations.
All in all it is the same jumble of the usual mainstream media, we're all used to for too long. Praising the new economy without any inflation pressures and the belief, that
gold will not dramatically rise anytime soon, since the CB's are selling low yielding gold assets and the demand for gold as an investment (for inflation)is passe'.
Interestingly, they won't even debate their stance openly. Do WGC/GFMS have a hidden cause to refuse debating their numbers? Regards cb2

Al FulchinoFree trade? Sure! It is children's play#3620809/07/00; 16:23:19

I here much about free trade. And most of it is wonderful and even idealistic. BUT! Let us pretend for a moment. So all of us need to put on our USAGOLD Viirtual Reality Glasses for a moment. Let us make the rule that anything that is your ideal about what free trade is, will be law and carried out by all. No taxes? DONE! No silly bureaucratic intereferences? DONE! etc. etc. etc. Now! Put mankind in the mix. Here is the trouble. You are going to have to keep the virtual reality glasses ON, if you want your ideal to hold water. Because once we take off our glasses, we get children who take other children's toys and older children who won't let you play in their country. <This all goes back to all that Buchanan stuff of a few weeks back, of course>
Free trade is relative. Can it be perfect? Yes. But it is a long time coming. And if you really believe in it, then you have to want a strong willed country and leaders who will champion free trade, but not be afraid to say to the other child, "Fine, you don't share your toys <markets>, we won't share either. We would rather get along with you, but we will not be taken advantage of. That is that."

JourneymanNot for the faint of heart or guilt ridden @ALL#3620909/07/00; 17:46:47

"Flushing out the Loo." Is it time to clean up the Great American Mess? This guy thinks so, and gives some tips how -- and some motivation to get started.

Regards, J.

Al FulchinoJourneyman#3621009/07/00; 17:56:38

re me #36298
I posted that note while I was at work and the timing may have been seen as a challenge to your Free trade series. It wasn't. I enjoyed what you wrote. It was just bad timing on my part.

Gandalf the WhiteNow speakith the PRES ! hahahahahaha#3621109/07/00; 18:36:41

Associated Press reported the President Clinton fears the high cost of oil could lead to a recession in the roaring U.S. economy or elsewhere in the world.
"I told him I was very concerned that the price of oil is too high, not just for America but for the world," Clinton said after meeting with Saudi Arabia's Crown Prince Abdullah at the U.N. Millennium Summit.
FOA/TG -- Could this person be showing a WESTERN viewpoint?

BonedaddyThe Gendarmes are comming!#3621209/07/00; 18:51:35

Link to the article from the Drudge report

news | World | Europe
France may send in troops to end protest

By John Lichfield in Caen

8 September 2000
The French government hinted yesterday that it was prepared to use troops and police to free the country's oil supplies from a crippling four-day barricade by trucks, tractors, taxis and ambulances.

Although tough state action of this kind is rare in France, it would not be unprecedented. Special army tanks for obstacle clearing were used to lift a siege of oil refineries by hauliers in 1992. The veiled warning by French ministers came as truck-owners', taxi-drivers' and farmers' protests against high oil prices brought tempers to boiling point and large parts of France to a near standstill. The European Commission demanded assurances from the French government within 24 hours that it was doing everything possible to maintain free trade and movement within Europe.

British motorists briefly barricaded one carriageway of the A16 motorway near Calais yesterday in retaliation for a partial blockade of the Channel Tunnel freight terminal. Although the car entrance to the tunnel shuttle, and another freight entrance, were kept open by French police, the British drivers grew tired of delays imposed by the farmers' barricade.

They briefly parked their vehicles across the other carriageway of the motorway, blocking traffic heading in the other direction. Although there was no direct threat of intervention by the French government to end the four-day refinery blockade, the justice, interior and defence ministers all made strong statements yesterday warning that France could no longer be "held to ransom". The Defence Minister, Alain Richard, said the blockade could pose a threat not just to the economy but to the "security" of the French nation. That comment was widely interpreted as a justification for intervention by the army and gendarmerie, both of which come under Mr Richard's control.
Four-fifths of the petrol stations in France were estimated by oil companies last night to be out of fuel or likely to have exhausted supplies today.

news | World | Europe Up How 'Operation escargot' slowly
drove a country to a standstill

© 2000 Independent
Digital (UK) Ltd.

Subscribe to the print

JourneymanFree-trade posts @Al Fulchino, ALL#3621309/07/00; 18:53:52

If we all manage to hold out till I finish posting this monstrosity I seem to have birthed over the last three weeks, I will attempt to comment on the counter-posts, etc. Unless I run out of steam. I'm archiving each one!

Thanx for your patience -- and regards,

BonedaddyIt's official, Clinton says the price of oil threatens economy #3621409/07/00; 19:06:07

Those bad old Saudis. Don't they know that their greed could put an end to the "greatest peace time expansion in history"? Don't they know that America the Beautiful has the God given right to print as much money as we see fit?
So what, if it is the world reserve currency and everybody else gets screwed? Al Gore gave them the internet, for God's sake! What a bunch of ingrates. I would have liked to have been a mouse in the corner when Bill gave that prince what's his name a piece of America's mind.

"Ya gotta' be a team player now prince. Now ol' Ronnie Brown, he wussn't a team player."

RossLUnilateral free trade#3621509/07/00; 19:33:13

I am in favor of unilateral free trade. If another sovereign entity erects barriers to the free movement of goods, then the best solution to that situation is that the largest free trade nation will just ignore them. Let them erect their little "berlin walls"... it will do us no good to erect a "berlin wall" of our own in retaliation, will it?
Topazgoldhunter (09/07/00; 07:09:33MT - msg#: 36182)#3621609/07/00; 19:56:46

Hi Goldhunter,
Can you please explain the mechanics of US$600 POG ie: How do we get there?
Are we to expect a slow, gradual increase - or a more explosive scenario?
Do you anticipate the "fallout" along the way to include 1. The hedged Miners 2. The Bullion Banks 3. The US$ or perhaps 4. the "System" in-toto?
The perception would be $600 pog = US inflation @ 25+% Yes? (just a guess)
FWIW my impression is "YES" half the world would dearly like to see a controlled burn to $600 pog - but alas, it's not "your" half <smile>

TownCrierThere is more here than meets the eye...the present monetary system is on shakey ground#3621709/07/00; 20:02:25

I hope everyone had a chance to read Sir WAC's 7:33 post this morning of Anthony Hilton's perspective-building article on the latest economic boom and the oil factor. I would like to point out two elements that Hilton reported. First: "The oil price hit a 10-year high in London on Tuesday when the September price hit $36 and the more representative October price topped $33. Eighteen months ago it was close to eight. The big question no one wants to face up to is whether the new economy can stand an old-fashioned oil shock. By any measure, a quadrupling of oil prices in 18 months constitutes a shock...[and yet] the price of oil in real terms is well below what it rose to in the 1970s, when it plunged the world into recession and sparked off the inflationary spiral which took 20 years to run its course." However, Hilton reassures, "This shock may be more muted and adjustment might be easier because it has arrived over 18 months rather than overnight, as happened in 1973 and 1980. We are certainly better placed to afford it."

The price of oil has certainly risen, but in real (and historical) terms, just how expensive is it? Mr. Hilton reported the following information:

"the price of oil in real terms is well below what it rose to in the 1970s...We are less profligate with oil than we were 25 years ago, making a given amount go perhaps 25 per cent further...
18 months ago when [oil] prices were below $ real terms, was one-fifth of the price in the early 1980s, and indeed half the price it was way back in the needs to rise to $90 to be the same now in real terms as in 1973. And yet the threat is there, and it does not actually take much these days to knock an economy on the head. If a few bankers and financiers take fright, the transmission mechanism of the world's stock markets give a clear signal to everyone else to panic."

The above data reveals that oil remains actually quite cheap, and yet the concern abounds...apparently because our present monetary system is that much weaker and incapable of
handling the strain.

For evidence it is appropriate to turn to the article I've linked above, with the headline: "Fearing recession, Clinton urges OPEC to boost output"

The Associated Press reported today that with prices spiking to a 10-year high, President Bill Clinton met with Saudi Arabia's Crown Prince Abdullah on the sidelines of the U.N. Millennium Summit. He later told reporters of his meeting, "I told him that I was very concerned that the price of oil was too high, not just for America but for the world; that if it's a cause of recession in any part of the world, that would hurt the oil producing countries," adding also, "I certainly hoped that when OPEC met [Sunday in Vienna] there would be an increase in production because that was the policy they adopted."

The Energy Department said so far "those increases have not been apparent" to the market, and subsequently predicted that heating oil will be 30% higher than last winter, natural gas 27% higher.

With oil prices currently only one-third of the equivalent 1973 price, it seems to me that President Clinton does not have a leg to stand on when he tries to make his claim that "the price of oil was too high, not just for America but for the world." It seems to me that if he were truly worried about the price of oil to the rest of the world, he would encourage OPEC to set their prices lower in terms of any other currency that they might value more highly. Ha! You'll never see him make that pitch. To the U.S. administration, any high price remains the best we can hope for as long as it is denominated in dollars. It is our national advantage that would be lost under alternative currency pricing, though the rest of the world would likely come out ahead.

With rising energy prices that are still well-shy of the 1973 equivalent ($90), are you inclined to entrust your financial well-being upon the future purchasing power of the dollar and health of the markets?

SHIFTYJourneyman#3621809/07/00; 20:06:09

I have been enjoying your posts.
I think it is best we save comments until you have delivered your work. I just did a bit of cutting and pasting and sent myself the three posts so far. I will re-read them before I ask questions or make comments. I read so much stuff every day I know I will need to refresh my memory before making comments.
How many more segments do you have?


John DoeUnconstrained fiat is but a symptom...#3621909/07/00; 20:11:49

A society forms as its common truths become self-evident and decays as its shared lies finally lose their allure.
Al FulchinoImportant Read/Not about gold but another reason to own it#3622009/07/00; 20:34:01

Federal agencies share taxpayer info from Web sites
Scripps Howard News Service
September 07, 2000

WASHINGTON - At least four federal agencies are sharing taxpayer data they are gathering from Internet visitors to government Web sites with trade organizations, retailers or other outside parties, congressional investigators say.

In a survey of online-privacy protections at government-run Web sites, the General Accounting Office found that 23 of 70 agencies surveyed have disclosed personal information gathered from Web sites to third parties, mostly other government agencies. But at least four agencies were found sharing information with private entities.

The GAO is a congressional unit that audits federal programs.

Some privacy advocates said the findings show the need to update a 1974 Privacy Act, which forbids government agencies from sharing with outsiders information they collect from taxpayers, but was drafted before computers were widely used.

"It's time to strengthen this important law for the Internet age,'' said Ari Schwartz, policy analyst with the Center for Democracy and Technology.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, said the report clearly shows the White House isn't effectively enforcing Privacy Act provisions on executive branch agencies. "It's a surprisingly good law,'' Rotenberg said. "I think the big issue here is oversight and enforcement of the Privacy Act."

The GAO investigation was launched a year ago on a request by Sen. Joseph Lieberman, D-Conn., to find out how government agencies are handling privacy issues on their Web sites. Lieberman has spearheaded efforts on the Senate Governmental Affairs Committee to oversee government use of the Internet to provide information to taxpayers.

GAO investigators said many of the privacy problems with government Web sites they uncovered could be addressed by the White House Office of Management and Budget issuing more specific guidelines on what information government agencies can release.

Office of Management and Budget guidelines forbid dissemination of "substantial" personal information, but they don't tell agencies what that means, or "whether such information as Social Security numbers and credit card numbers qualify as substantial personal information," the GAO said.

In its survey of 70 government agencies, congressional investigators classified "substantial" personal information as being a person's name, e-mail address, postal address, telephone number, Social Security number or credit card numbers. The investigation found 23 agencies shared information with other government agencies, and four said they share information with private-sector entities.

The agencies were not named. The outside parties included trade organizations, bilateral development banks, product manufacturers, distributors and retailers.

Sally Katzen, deputy director of the Office of Management and Budget, said the GAO report didn't reflect considerable progress the Clinton administration has made in persuading government agencies to pay attention to privacy issues.

Web sites run by the White House itself have been embroiled in privacy concerns. In June, Scripps Howard News Service reported that Internet sites run by the White House drug czar's office were secretly putting "cookie" programs in the computers of visitors to track what they were doing on the site.

Office of Management and Budget Director Jacob Lew ordered drug czar Barry McCaffrey to turn off the cookie machine, and issued a governmentwide directive stating that cookies programs can only be used in rare cases, and only if their use is approved by the agency's director.

The GAO survey found seven agencies used cookies, which are small software programs inserted in a visitor's computer. Cookies programs are used by advertising firms to track Internet users' activities, and can be combined with other data to compile profiles of individual Internet users.

On the Net: GAO is at htpp://


(Lance Gay is a reporter for Scripps Howard News Service.)

1090 Vermont Ave. N.W. Suite 1000 Washington, D.C. USA 20005
GENERAL LINE: 1.202.408.1484 FAX: 1.202.408.5950

© 2000 Scripps Howard News Service.

All Rights Reserved.

JourneymanHow many more? @Shifty#3622109/07/00; 20:58:21

Depending on how I put them together, it looks like five or six more sections.

But if asked, I could stop at any time!!


SHIFTYJourneyman#3622209/07/00; 21:09:26

No problem here.

oldgoldTown Crier#3622309/07/00; 21:21:12

You will NEVER hear Clinton say that the dollar is too high. or stock prices. For these the higher the better. But heaven forbid that oil producers (or gold producers for that matter) should get decent price for their product.

One difference between now and the 1970s oil shock is that the dollar was weak then, but is very strong now. So the impact on the rest of the world was mitigated to a certain extent in the 1970s, but is being exacerbated today by the surging buck.

The dollar looks to be in its final blowoff run now. No telling how high it might go in this run, but the aftermath is certain to be a BIG DROP. And possibly a new international monetary system giving gold a bigger role.

MariusJourneyman, RockGrabber#3622409/07/00; 21:33:13


What are you, nuts? Of course we don't want you to "stop at any time"!


You're not alone in questioning your own santiy re: trading gold options! I remain long in options, even knowing what I know about how rigged this market is. Why? Because sooner or later the shorts will blow up, the price will go up, and the position will pay off in (yes, I know it's a dirty word) dollars! I've financed my "gold jones" by being long crude oil at this amazing time. My last trade tripled my money in two weeks. How else could I put premium in my Maxima's tank, and be sanguine about being long Dec. '00 gold?


Chris PowellWorld Gold Council gives up on gold#3622509/07/00; 21:52:36

Third story about GATA in two weeks
in the Frankfurter Allgemeine.

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

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

Simply MeClinton shows his true colors.#3622609/07/00; 22:03:49

From The Salt Lake Tribune...9/7/2000

In speaking at the UN Millennium Summit....
Clinton strongly backed Annan's controversial
call for the international community to intervene to
protect civilians from ethnically based terror and
other gross human-rights abuses -- overriding
national sovereignty if necessary.

BEWARE: What a man will do for you, he will also do to you.
simply me

TownCrierSir oldgold...#3622709/07/00; 22:20:58

You're sure right about there being an adminstrative tendency to cheer higher dollars and higher stocks, but oil and gold is to be kept underfoot. Sure makes it tough on those particular industries.

A thought about your comment,

"One difference between now and the 1970s oil shock is that the dollar was weak then, but is very strong now. So the impact on the rest of the world was mitigated to a certain extent in the 1970s, but is being exacerbated today by the surging buck."

What about the pricing and exchange rate math? Sure the dollar is strong relative to other currencies, but if the dollar were weaker today, wouldn't the price of oil currently be much higher as a result. In the end, after multiplying by exchange rates, wouldn't a higher price in weaker dollars translate into the same foreign prices as gotten from a lower price in stronger dollars? But certainly, where these exchange rates are concerned, the dollar gets a boost regardless of its current strength or oil price as foreign currencies must bid for dollars at the forex desk in order to make their international settlements. Wouldn't it be that insidious effect which is tending to throw rates out of balance and acts as a supporting cause of foreign weakness?

I guess I'm asking you, is oil priced for total value or simply for a currency number? If a certain target value is sought, the price in any given currency will rise or fall based on its individual strength/value, and after the appropriate exchange rates are applied, would there be any mitigating factor for others based on dollar strength or weakness? After the math is done, foreign oil buyers would be parting with the target value, regardless.

Peter AsherJourneyman & Caven Man & All#3622809/07/00; 23:01:29

Journeyman: Your dichotomy of the consumer/producer conflict in the perception of individuals is a superb tool to evaluate the paradox in what people want and don't want from Government. Also it reminded me, and dovetails with my "Other Guy" syndrome from Peter Asher (08/07/99; Msg ID:10582) @

>>> What becomes lost is the reality that, regardless of how much money one or all has, the goods and services obtainable are ultimately only created by production. This is the state of a society when, to obtain money, it becomes immersed in the activity of trading rather than producing. In trade, the wealth must come from someone else. For every trader's profit there must eventually be another trader's loss. Even if the man in Atlanta knew this, he was a member of a society that believes that it's the other girl who gets pregnant, the other guy who causes it, the other driver who can't hold his liquor, and the other criminal who gets caught. Naturally, it's the other guy who loses in the Market. But of course that's also what the other guy thinks. If millions are made in day trading, then millions must be lost in it. <<<

What we have arrived at is a society of individuals who would prefer an unethical Government where the opportunity exists to exploit the others. People will take the chance that they will be one of the winners of the Lion's share rather than be guaranteed an ethical fair share of a division of labor economy. It's the "Other Guys" that will be the losers.

This, I fear, is why there is so little response to The Libertarian Cause, whether Harry Browne or Ron Paul. Leaders, in the end are created by followers and we are a minority in this "Collective Anarchy" called Democracy.

Having read this you should not be surprised by the following paragraph today from the above link ---

>>>Still, Republican morale is drooping. I have heard from more than one Republican politician that the problem may not be Bush's at all, but the American people's. Could it be, they ask, that
voters--while enjoying prosperity--really want more government instead of less? No Republican could fight that mind-set of the electorate. <<<

elevator guyA big obvious hole in the argument!#3622909/07/00; 23:03:12

A thought occurred to me, as I was reading GATA's latest.


From the Frankfurter Allgemeine
Thursday, September 7, 2000

The Theory of a Conspiracy in the Gold Market
is Misleading and Wrong


There are many good reasons that give sufficient
explanation of the low gold price, with the strong
dollar being first. The greater the value of the
dollar, the lower the price of gold. In addition,
financial markets are in a period of extremely low
inflation and strong climbing share prices. So there is
no need for investors to invest in gold to fight
inflation, as in former times.


"Extremely low inflation", and "No need for investors to invest in gold to fight inflation" the author writes. HA-HA!

The 10 year high in crude oil, now about $35/barrel, is almost triple what it was only about a year ago or so. And by all acounts, its going higher and higher. Since oil drives the economies of the industrialized world, it is only a matter of time before the "numbers" can no longer be tweaked, to show low inflation. Oil will have its say, and nothing in our industrial infrastructure will change the status quo of an oil based economy until oil reaches over $50/barrel. Maybe even higher. Peak production is upon us. Has peak demand been reached yet? No way! China is gearing up, and all over the world, ever increasing demand far outstrips new discoveries. This is an end game, and before its over the dollar will get clobbered. (The "IN" crowd will be short the dollar at this time) Whoever thinks low inflation is reality, needs to spend more time at the Forum. Whoever thinks low inflation and the "New Economy" are here to stay, well, that person is a dumb sheep who has swallowed a line of b.s., specifically prepared for the masses. And those who dispense this drivel upon the masses know full well the fallacy of their spin, but they don't care, for to them, the media is just a tool, used to deceive the sheeple, and they don't care about truth, its just a dirty word, all they care about is lining their pockets with the stolen sweat of the workers of the world. Keep that dollar game afloat! That's where their heads are at. And if "they" have to pay out on obligations, "they" will allow (through the massaging effects of changing interest rates) some inflation, so that the returned value on debts is paid back with little tiny dollars. What a scam! They must disparage gold to maintain this ability to skim the cream off the top of the productivity of those subjects who are forced to worship at the altar of the Federal Reserve Note.

Gold is an affront to all that is deceitful.

Simply MeAn Interview with Crown Prince Abdullah#3623009/07/00; 23:15:57

As mentioned earlier by someone in this forum. The man chosen to be the next ruler of Saudi Arabia is by birth, heritage and education, more Bedouin than any of his brothers. This interview, meant for readers of the Islamic faith, I believe, represents the leader's thoughts and motivations more accurately than anything I have read in the US/Euro press.

<snip> He said in 1970s when the Kingdom was badly in need
of money it gave preference to the greater interest of the Ummah by initiating to stop oil export in response to a decision taken by some countries in favor of Israel. "By doing so we have proved that our national stands are loftier than the glitter of gold," he added.

My comment: For some reason, I remember that oil embargo differently. it just Western thinking, or did that crisis result in a lot of "glitter" being added to ME coffers.

Prince Abdullah, however, expected a new phase in the Middle East peace process with the arrival of Barak and hoped to make united efforts to establish peace and stability in the region. He said he will discuss with Syrian President Hafiz Assad all major Arab and Islamic issues. Asked whether there was any plan to visit the liberated Palestinian territories, he answered in the negative: "We don't make any
hasty steps without any objective. The Palestinian people and President Yasser Arafat know how much we are concerned with their issue..."
However, he expressed his optimism that one day he will pray at Al-Aqsa Mosque in Jerusalem when it is liberated and brought under the sovereignty of Arabs.

My comment: Old Arab Proverb - The enemy of my enemy is my friend.

<snip> Referring to his long official journeys, he said: "I will not hesitate to go anywhere in the world if it serves the interests of my country and of the Arab and Islamic Ummah."

My comment/question: If your prime concern is your countries welfare and your country's riches are in oil and gold, wouldn't you seek the demise of the U.S. dollar that demands such cheap prices for your most precious commodities?

Old American Proverb: Gold...get you some before the fecal matter hits the oscillating cooling device.
simply me

MarkeTalkAd hominem attacks against GATA in FAZ article#3623109/07/00; 23:32:26

I just finished reading the original article in German which appeared in today's Frankfurter Allgemeine Zeitung, courtesy of LeMetropole Cafe. Besides the specious arguments as to why there is no concerted effort to suppress the gold market, what struck me at first glance was the boxing ring stereotype used: in one corner are Gold Field Mineral Services and the World Gold Council; in the other corner is GATA. After introducing the credentials of GFMS and WGC along with their resident "expert", one Jessica Cross, a somewhat disparaging treatment is then given Bill Murphy and Chris Powell. Bill Murphy is described as "an American commentator on financial matters who had put together respective reports about the gold market." Chris Powell is described as "a newspaper publisher from Connecticut." Together they constitute GATA whose "goal is to raise money and hire lawyers to pursue legal action."

The article then proceeds to dispatch each and every credible argument advanced by GATA. Finally, the author of the article states that GATA has knowingly interpreted the statistics in a false manner. Instead, a strong U.S. Dollar is given as the reason for a low gold price as well as the desire of many central banks to get rid of "their large, rather unprofitable gold reserves." The article ends by saying that, in the long term, no one expects a dramatic recovery in the gold price.

So in conclusion: It appears that the editors at Frankfurter Allgemeine Zeitung in Germany are acting in lock-step with the wishes of Washington and London. It seems rather strange and out of character that this article would appear after the Washington Agreement of last September pitted Europe against Anglo/American interests. QUERY: Would today's announcement of a proposed merger between Deutsche Bank and J.P. Morgan have anything to do with this perceived change in position???

MarkeTalkSimply Me#3623209/07/00; 23:40:04

In your post you mentioned that someone had brought up the fact that Crown Prince Abdullah was a Bedoiun in his thinking. I believe that you were referring to my post entitled "Washington Politics to Meet Saudi Oil" dated Sept. 5th, message #36062. I want to thank you for obtaining a link to an Arab source so that all readers can see for themselves.
Strad MasterStratfor's take on the Euro#3623309/07/00; 23:48:48

Here is today's Stratfor Intelligence report which talks about the recent plunge in the Euro and what they see unfolding. I'd be interested in any commentary, especially from Trail Guide since it appears to contradict some of what he's written.

On Sept. 7, the euro hit a record low, falling to about 87 cents to
the U.S. dollar. As the European Central Bank simultaneously battles
inflation by raising interest rates, there are signs that the continent's
economy will slow significantly over the next several months. After years
of driving toward economic unity, governments will seek divergent
strategies in reaction to these events. In the next few years, Europe will
be increasingly divided over everything from the role of the euro to the
now fading hope of standardizing the continent's complex tax regime.


After years of driving toward a single economic bloc, bound by a
single currency, Europe in stark contrast to the United States is
battling severe economic headwinds. On Aug. 31, the European Central Bank
boosted interest rates from 4.25 to 4.50 the sixth increase in 10 months in
an attempt to reduce inflation beneath the 2 percent ceiling dictated
by the 1992 Maastricht Treaty on monetary union.

Contrary to expectations, this move has not bolstered the euro; instead the
currency struck an all-time low of 0.8691 to the dollar on Sept. 6. This
followed a week of losses as a booming American economy sucked away investment
dollars. The trend will continue until the EU adopts needed structural
reform, particularly in its labor laws.

But Europe's current troubles indicate a long-term trend: The drive to
unite the continent's economies is stalling. And the euro, once expected
to bind small economies like Portugal's to large ones like Germany's, is
producing unintended side effects. There is inflation on the edges of Europe,
as in Sweden and Portugal. At the same time, growth is slowing in the heart
of the continent. The European Union's member governments are fretting separately
over how to deal with monetary union, not about how to unify further.

Europe's central bank in Frankfurt admits that the immediate problems facing the
EU high oil prices and a weak euro cannot be solved with interest rate hikes.
High oil prices now over $34 per barrel of Brent crude oil can only be
alleviated by some unforeseen event abroad or a long-term drop in consumption.

A weak euro can only be strengthened by deep structural reforms, like changing
corporate tax laws or breaking down the continent's labor laws. But these are
beyond the power of the central bank. By raising rates the ECB is at least
attempting to bring inflation under control. The ECB attributes more than half of
the 2.4 percent inflation in areas where the euro is now used to factors
distinctly unrelated to high energy prices.

But rate hikes slow growth and a number of statistics indicate that Europe's
growth is indeed slowing significantly. The combined economies of the continent
were expected to grow 3.4 percent this year, the highest in a decade. However,
several negative indicators are creeping upward.

Consider Germany. At the top of the list is the rising cost of oil, up 77.2 percent
in Germany from the year before, according to the German Statistics Office.
Furthermore, oil must be paid for in dollars. The euro's 25 percent drop against
the dollar since January only compounds high oil prices. Germany did post an
impressive 4.7 annualized percent growth rate for the quarter ending in June,
but with energy costs, borrowing costs and expansion costs rising quickly,
it is unclear how long this will last. Business and consumer confidence
both dropped in July and August.

Industrial production is tapering off, too. In June, industrial production fell
0.4 percent in areas where the euro is in use; France and Germany Europe's
economic engines led the way. This is hardly the mark of an economy in the
middle of a boom. New rate hikes, which the ECB says are already in the works,
will only slow these economies further. To make matters worse, European
investment is crossing the Atlantic in search of better returns. This forces
business to borrow in order to finance expansion a proposition the central bank
just made more expensive.

The effect is divisive: Germany, France, Italy and the Low Countries will
experience anemic growth while the states on the edge of Europe are churning
ahead on what is comparatively cheap capital. Finland, Spain and Sweden are
all on track to top 5 percent growth this year while Ireland could
top 10 percent. All face rising inflation. Interest rates that are too high for
core are too low for periphery. The ECB's Aug. 31 rate hike will be no more than
a passing blip on these states' radar, while inflation threatens to spiral out of
control. Ireland already has an inflation rate that is triple the ECB's 2 percent

SHIFTYThe Shooting Show Newsletter #3623409/07/00; 23:50:43


I just received this tonight. I'm sorry to be off topic, but I felt that this would be of interest to my fellow Americans.


Divvy: 426



What follows on the next page of this Special FAX Alert is the
text of a letter from the Department of Justice to an NRA member. The
letter is also posted on

The letter confirms what we reported in a previous FAX Alert (No.
24, June 16) -- that the Clinton-Gore-Reno Justice Department stands by
its contention that law-abiding individual Americans have NO Right to Keep
and Bear Arms!

This letter should serve as a stark reminder to all gun owners why
this year's elections are so critical to the future of the Second

On Friday, you will receive a "Grassroots Election Action FAX
Alert" that will outline the steps you must take in the coming weeks and
months to ensure we can replace elected officials and government-appointed
bureaucrats who view the Second Amendment with such hostility.

We hope you will share this letter with your family, friends, and
fellow firearm owners and use it to ensure that all of our supporters are
fully engaged in this year's elections.

U. S. Department of Justice

Office of the Solicitor General

Solicitor GeneralWashington, D.C. 20530
August 22, 2000

Dear Mr. (Name Deleted):

Thank you for your letter dated August 11, 2000, in which you
question certain statements you understand to have been made by an
attorney for the United States during oral argument before the Fifth
Circuit in United States v. Emerson. Your letter states that the attorney
indicated that the United States believes "that it could 'take guns away
from the public,' and 'restrict ownership of rifles, pistols and shotguns
from all people.'" You ask whether the response of the attorney for the
United States accurately reflects the position of the Department of
Justice and whether it is indeed the government's position "that the
Second Amendment of the Constitution does not extend to the people as an
individual right."

I was not present at the oral argument you reference, and I have
been informed that the court of appeals will not make the transcript or
tape of the argument available to the public (or to the Department of
Justice). I am informed, however, that counsel for the United States in
United States v. Emerson, Assistant United States Attorney William Mateja,
did indeed take the position that the Second Amendment does not extend an
individual right to keep and bear arms.

That position is consistent with the view of the Amendment taken
both by the federal appellate courts and successive Administrations. More
specifically, the Supreme Court and eight United States Courts of Appeals
have considered the scope of the Second Amendment and have uniformly
rejected arguments that it extends firearms rights to individuals
independent of the collective need to ensure a well-regulated militia. See
United States v. Miller, 307 U.S. 174 (1939) (the "obvious purpose" of the
Second Amendment was to effectuate Congress's power to "call forth the
Militia to execute the Laws of the Union," not to provide an individual
right to bear arms contrary to federal law"); Cases v. United States, 131
F.2d 916, 921 (1st Cir. 1942) ("The right to keep and bear arms is not a
right conferred upon the people by the federal constitution."); Eckert v.
City of Philadelphia, 477 F.2d 610 (3rd Cir. 1973) ("It must be remembered
that the right to keep and bear arms is not a right given by the United
States Constitution."); United States v. Johnson, 497 F.2d 548, 550 (4th
Cir. 1974); United States v. Warin, 530 F.2d 103, 106-07 (6th Cir. 1976)
("We conclude that the defendant has no private right to keep and bear
arms under the Second Amendment."); Stevens v. United States, 440 F.2d
144, 149 (6th Cir. 1971) ("There can be no serious claim to any express
constitutional right of an individual to possess a firearm."); Ouilici v.
Village of Morton Grove, 695 F.2d 261, 270 (7th Cir. 1982) ("The right to
keep and bear handguns is not guaranteed by the second amendment.");
United States v. Hale, 978 F.2d 1016, 1019 (8th Cir. 1992) ("The rule
emerging from Miller is that, absent a showing that the possession of a
certain weapon has some relationship to the preservation or efficiency of
regulated militia, the Second Amendment does not guarantee the right to
possess the weapon."); United States v. Tomlin, 454 F.2d 176 (9th Cir.
1972); United States v. Swinton, 521 F.2d 1255, 1259 (10th Cir. 1975)
("There is no absolute constitutional right of an individual to possess a

Thus, rather than holding that the Second Amendment protects
individual firearms rights, these courts have uniformly held that it
precludes only federal attempts to disarm, abolish, or disable the ability
to call up the organized state militia. Similarly, almost three decades
ago, the Department of Justice's Office of Legal Counsel explained:

The language of the Second Amendment, when it was first presented to the
Congress, makes it quite clear that it was the right of the States to
maintain a militia that was being preserved, not the rights of an
individual to own a gun.[and] [there is no indication that Congress
altered its purpose to protect state militias, not individual gun
ownership [upon consideration of the Amendment] . . . . Courts.have viewed
the Second Amendment as limited to the militia and have held that it does
not create a personal right to own or use a gun . . . . In light of the
constitutional history, it must be considered as settled that there is no
personal constitutional right, under the Second Amendment, to own or to
use a gun.

Letter from Mary C. Lawton, Deputy Assistant Attorney General, Office of
Legal Counsel, to George Bush, Chairman, Republican National Committee
(July 19, 1973) (citing, inter alia, Presser v. Illinois, 116 U.S. 252
(1886), and United States v. Miller, 307 U.S. 174 (1939)). See also, e.g.,
Federal Firearms Act, Hearings before the Subcommittee to Investigate
Juvenile Delinquency of the Committee on the Judiciary, United States
Senate 41 (1965) (Statement of Attorney General Katzenbach) ("With respect
to the second amendment, the Supreme Court of the United States long ago
made it clear that the amendment did not guarantee to any individuals the
right to bear arms.").

I hope this answers your question. Thank you again for writing.

Yours sincerely,

Seth P. Waxman

tedwFAZ Article and price of oil#362359/8/2000; 0:10:59

I, too , read the FAZ article at good point that was made was GATA's failure to take legal action. If there is sufficient PROOF of Gold Market manipulation then GATA should take action. If there isnt,then GATA should frankly state that there is not enough proof to litigate. The process of litigation itself could uncover additional evidence via discovery.What are they waiting for?

Price of Oil. I for one do not think the current high price of oil is coincidental with the hubbub over Jersualem. A high price of oil puts the Arabs in a strong barganing position to have the United States pressure Isreal. I predict no relief in sight until the Arabs get what they want. Call it blackmail if you want.

The storm clouds are on the horizon.

SHIFTY(No Subject)#362369/8/2000; 0:11:09

Amendment II

A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.


I wonder what part of "SHALL NOT BE INFRINGED" they don't understand?


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JourneymanRTKABA @SHIFTY (09/07/00; 23:50:43MT - msg#: 36234)#362399/8/2000; 1:36:04

REMEMBER: As people should know, the Bill of Rights doesn't grant us any
rights we don't already have, it only verifies some of the ones we
already have separately and independently of both the grab-it AND the
Constitution. The Second Amendment was added particularly to prevent
what those low-life scum liars are now trying to do. It's purpose
certainly was NOT to grant us our pre-existing rights. See the Ninth
Amendment for a hint.

Further, as has often been ruled, the U.S. Grab-it was constituted as
having ENUMERATED powers, meaning it can do only what it is EXPRESSLY
given specific powers to do in writing in the U.S. Constitution or
amendments to said document. Let's suppose --- for the sake of argument
ONLY --- that the Second Amendment, as the traitorous scum claim,
doesn't grant us citizens the right to "keep and bear arms." OK,
so-what. It certainly doesn't authorize THEM to take our weapons
either. Even their most accomplished Clintonesque prevaricators
wouldn't try to argue that. So just where in the Constitution does it
enumerate their power to regulate, steal, or otherwise scum-up or mess
with our weapons? Please show me the SPECIFIC LANGUAGE that expressly
bestows this power on those poor excuses for pond-scum rejects.

Regards, J.

SteveH2nd#362409/8/2000; 3:46:27


US v Miller was about two bootleggers from none other than Arkansas. Two revenuers arrested them and charged one with possession of a sawed-off shot gun shorter than the legal limit (by about an inch). The charge stemmed from a dry still and lots of work having gone into trying to get a them on a wet still.

Anyway, the lower courts exonerated our two bootleggers in the hills and off they went back to do their thing. In the meantime, the US Attorney at the time decided to appeal to the Supreme Court. Since these two fellows were no where to be found, their Attorney didn't bother to file a brief countering the US Attorney's brief in the case.

That is why the Supreme Court states "lacking" any evidence that a sawed off shotgun contributes to the preservation of the militia.... In other words, they didn't have sufficient legal information to make a decision regarding the suitability of the weapon for militar puruposes.

Now, both sides of the Gun Control argument use this case to support their views. The eight cases the US Attorney points out in his letter from yesterday's post are but a few of the cases that can be cited. US v Emerson is a significant case and will soon tell if an appeals court supports the individual right nature of the 2nd Amendment. My point is that just as these eight cases point out the collective right nature, there are equally if not more that show it to be an individual right. More, most state constitutions support a strong individual right to keep and bear arms. Also, US v Verduig-Urquidez, another Supreme Court case supports the individual rights nature of the 2nd Amendment.

As I see it, the C-G government chooses to find support for its own views of guns and disregards the historical and opposite fundamental rights nature of the 2nd. A significant case is US v Cruikshank that states the RKBA is so fundamental that it doesn't need the Constitution for its existence and that the 2nd merely protects the RKBA against Congressional Infringment. Sadly, Congress doesn't take a more proactive approach by preventing others from infringing.

wolavkaoff topic but proof gata is correct#362419/8/2000; 4:00:09

Corruption in U.S.A.

1987 N. Dankert applied and was awarded in 1990 Patent # 4922225 .

This patent enhanced the present CHMSL (center high mounted stop lite found on all U.S. vehicles. The present system which was patented by Dankert in 1965 was not allowed by Dept of transportation until 1985 after Dankerts' patent expired.

45,000 people are killed on U.S. Highways each year.

NHTSA (National Highway traffic Safety Admin. has seen this new enhancement and refuses to allow it. It is a crash avoidance safety feature. Before the fact, not after the fact like seat belts, air bags and abs brakes.

Off record in Washinton D.C. Dankert was told, his invention was ."greatest thing since seat belts".

So, you think the firestone tire deal is a ,"big deal"

If you think the Govternment cares about you or your loved ones, think again.

Check out the patent # 4922225 and decide for yourself.

Get gold, only because Governments are corrupt above and beyond the Corporates.

auspecGOLDONOMICS 101#362429/8/2000; 5:25:10

In the category of "pushing one's luck" this is a follow up piece regarding gold economics, you may soon come to regret encouraging me regarding posting. Even though this article is clearly an insider's guide to investing you should consult w your own advisors, as anyone remotely aware of my investing track record will know that this doesn't qualify as investment advice.


1. Diversification-it's very important not to load one basket with all the broken eggs. Need to spread out your funds among gold stocks, gold mutual funds, gold bullion, gold options, gold futures, and rare gold coins. OK to consider silver,diamonds,base metals,and oil, but if you put money any where else besides rent, mortgage, or Victoria Secrets' dainties you are OVERDIVERSIFIED and will only get confused.
2. Regular Monthly Investing - Key to success financially, but can be a stress to the marriage. Spouse gets comatose after enough months and lets you do what ever you want with the money. Just smile and persist. Offer to work until you are 80 years old only as a last resort.
3. Averaging Down - This only works until the investment is entirely worthless. Definitely provides momentary gratification each step of the way lower. Keep your monthly financial statements away from prying eyes.
4. Financial Advisors - DO NOT COMPROMISE ON THIS STEP. Can be done for FREE in the convenience of your own computer. Do not trust a company that does not have the word GOLD in their name. GOLDS'R US, WeBGold,Golden Sparrow, LeMetroGoldenMayer Cafe, Golden Finger, GoldMessKitCo., Gold Away, GoldSex-Tent, and Goulden Mustard are all prime reputable sites.One IMPORTANT exception to this rule- best to avoid Goldman SacKs Gold as they can be as little tricky in their final paperwork. They are, however, backed by Fort Knox and the Anglo-American Governments so you still may eventually get some form of settlement.
5. Futures/Options - This is where you lose your entire investment and possibly much more by a predetermined date. Helps for tax planning with these specific deadlines. If you like to collect things-better stick with gold mining stocks as they have been heavily collected for several years.
6. Monetary Stimulus - This is where you give your spouse some of the left over money that is not going to gold. This works every time but again only momentary gratification is achieved. Buying more coins lasts much longer.
7. Paying Taxes - That's one clear cut
advantage of being in this specialized market - every year the government will allow you to take $3,000 of these losses as a deduction. This frees you up to put more money back into this market. Live a very clean lifestyle and you may have enough longevity to use up a good portion of your total losses.
8. Monetary Strain - Happens when your 112 pound spouse goes to the Post Office to pick up a 45 pound bag of silver coins for you. Tell her (him) you're saving for a 70th wedding anniversary gift.
9. Currency Exchanges - What can I say about this one? Unless you are privy to the workings of the ESF you're better off not having ANY currencies and just staying with gold. You will have to avoid parking meters, gum ball machines, and laundromats but it's worth it with what you save in tips.
10. Professional Money Managers - These guys will invest your money until it is all gone even faster than you can do it yourself.
Not even momentary gratification with this avenue. It is almost worth it though to be able to brag to your friends about your "gunslinger" investment guru.
11. Foreign Investing - This can make or break your portfolio. I recommend gold coins from Britain, Canada, Switzerland, Australia and South Africa. Your mining stocks should be exploring in countries that your grade school geography teacher never heard of. if you see any signs promoting Ralph Nader for President you might want to avoid this continent entirely.
12. Hedge Funds - These offer excellent diversification out of the gold arena and we are especially partial to a fund named American Buttocks. With this former growth stock turned hedge fund you can dabble in the gold market without actually owning any gold. Impress your friends, connect with global insiders, be a player in the global financial control scene.
13. Timing - This makes it a "refiner's dozen". You can forget all the other rules and just use this one. When the form of gold into which you are currently diversifying gets to the lowest point - BUY -IT! When it gets real high - SELL some of it! This is so simple I can't figure out why no one thought of it until now.

This should get you started on your path to financial dependence. Make sure you have enough quarters of social security to qualify for benefits and try not to use your real name on sites like this one. Be extra nice to all your older sick relatives. Teach your children (have as many as possible) good work ethics and keep them away from this essay AT ALL COSTS.


P.S. This article makes light of what has been an extreme 4 year bear market in gold related entities. Remember - the coming bull will likely be just as extreme!

goldhunterMr. Topaz...from yesterday#362439/8/2000; 6:00:17

Good morning sir...Is it possible tat we may get to $650 by some of the following?

Government statistics finally tell us the true story...CPI is "adjusted" to accurately represent increases in housing, energy, transportation (sticker SHOCK!)and maybe even food (grains and meats) move up some in the next year...(Mr. Wolavka is right...Texas and neighbors are dry)

The hedgers become BUYERS...These chastized professionals are doing their jobs (risk management) for their boss (shareholders) and lately, have been right being short...If we start an uptrend in gold, these hedge mgrs. can buy back their short positions to allow their companies to more fully participate in a price run up...(Moving through $340 may be of some help)

Speculators jumping in on "the bandwagon"...Some have already posted that sometimes demand is ok near bottoms, but watch the folks pile in after the move up starts...I offer these as potential evidence:
1987 was a rough year for stocks, in Oct. "everybody" thought the market was finished when the Dow crashed to 2100...
1999 was a rough time for oil..."everybody" was on TV saying oil was going down to $5 or $6 dollars...
Guess what "(some)bodies are saying about gold? ($220 to $250)
Sometimes, "everybody" is wrong...

I feel that the oil market offers some "clues" to the precious markets, in that moving to $650 or so in gold could easily be done, as was the move in crude to $33 per barrel..."Everybody" doesn't know what happened...It happened SO FAST...

Chaos and world decline and crash does NOT need to happen in my opinion....There is SO MUCH money out there (cash and debt) that if only a portion of it comes into gold AGAIN, and the perception changes from: week $250 TO: week $400, that our bull market will be underway.

Incidently, some feel that Paper shares, gold futures, and gold futures are doomed as we go up...
My EVIDENCE is to look at OIL as a clue again...Oil stocks have moved up, all holding $20 oil calls are happy, and all holding oil futures from $20 are happy too...
I do not see the paper markets diverging from the underlying "cash" gold or silver. Oil tripled, and the NYMEX still opens...When gold triples, I fully expect COMEX and Placer Dome and Barrick stocks to open too...

LeSinThe Near Death & Resurrection of the Gold Mining Industry#362449/8/2000; 6:20:02

The Near Death & Resurrection of the Gold Mining Industry by
Lawrence Parks dated July 17, 2000 is most interesting as are his references and footnotes. Many here may have seen it before, I did not until today. Cheers "S"

USAGOLDQuiet Friday; Quiet Rangebound Week#362459/8/2000; 8:44:47


(9/8/00) . . .Gold
ticked down in the early going with the
euro and crude also headed in a southerly
direction. Dow Jones quotes Bernard
Penner of Rudolf Wolf as saying "There
doesn't seem to be a reason for a
reversal in the dollar's fortunes, so
there won't be anything to help poor old
gold loft its head up," Selling has
slowed down, however, according to Penner
with many players "wondering how far you
can push this thing into the ground
before it comes up and bites you." Penner
sees support for December gold at $274 an
ounce and resistance at $280. All in all
its a quiet Friday and an end to a week
that continued to see paper selling
capping the upside and physical buying
supporting the downside.

That's it for today, my fellow
goldmeisters. Have a nice weekend.

Had it with the tired, one-sided
anti-gold financial press mentality?
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market go to the link above for an
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PLEASE REMEMBER: It is your purchase of gold
from Centennial Precious Metals that nourishes
these pages.

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your questions answered.

JourneymanChaos and world decline @goldhunter msg#: 36243, ALL#362469/8/2000; 8:46:17

"Chaos and world decline and crash does NOT need to happen in my opinion....There is SO MUCH money out there (cash and debt) that
if only a portion of it comes into gold AGAIN, and the perception
changes from: week $250 TO: week $400,
that our bull market will be underway." -goldhunter msg#: 36243

EXACTLY right. But chaos and world decline are inherent in the scenario. From the Austrian perspective, what people decide to do with especially their "monetary" assets is ultimately what determines what goes up and what doesn't. In this sense, every investment fad is at base psychological --- as will be the gold bull. The thing is, as you point out, there's "SO MUCH money out there (cash and debt)" BIG-float, etc., that when the perception of the gold bull finally dawns (as the other side of the "inflation bear") people will look for places to quickly unload their depreciating paper-megabyte assets.

At that point, the accelerating inflation that will be there for everyone to see (most of the people I talk to already see it) is what will strongly influence people in deciding what to do with their more and more rapidly depreciating fiat-denominated assets. As gold begins to rise, it's barometric function with regards to inflation will reassert itself and get rapidly increasing attention which the establishment will try to divert by reversing itself claiming that gold isn't really an inflation indicator anymore.

This will all be to no avail as the mother of all katastropehaussen (crack-up booms) gets under way in earnest. That is, people will dump as much of the rapidly depreciating dollars as possible, buying anything they can. In Indonesia, this included BMWs and houses, for example. By supply and demand, the prices of all these things will rise more and more rapidly. Once people start dumping dollars, like a ram-jet engine, the faster it goes, the faster it goes faster.

The problem is determining just when that will happen. Being psychological in nature --- and the establishment fighting the perception --- makes it VERY difficult (O.K. impossible) to time the move. However, remember gold has never lost favor with the majority of earth's inhabitants. It's just here in the Western "civilized" world where that's been successfully engineered.

How quickly the world can find some work-around to replace the function of the dollar in international trade will determine just how much "Chaos and world decline" there will be.


JourneymanHey ORO, where are ya pal? @ORO#362479/8/2000; 8:57:01

Hope you're keep'n an eye on me to catch my mistakes!

Are you O.K.?

High regards,

WAC (Wide Awake Club)Euro group to say euro undervalued -Austria finmin#362489/8/2000; 9:10:37

VERSAILLES, France, Sept 8 (Reuters) - Austrian finance minister Karl-Heinz Grasser said on Friday euro zone finance ministers meeting here would issue a statement saying the euro should be higher on foreign exchange markets.
Asked by reporters as he arrived for the talks, what the statement would say he replied "The euro must be higher."

The meeting of finance ministers from 11 euro zone countries plus Greece is due to start at 1500 GMT and concludes with a news conference at 1730 GMT.

wolavkaMore buying opportunity#362499/8/2000; 9:13:56

nothing but stop killing.

Would expect close over 277.40 magic #.

Week end outlook looks good.

Don't get discouraged.

CoBra(too)Financial Markets in EU and US seen taking off to scuba diving#362509/8/2000; 9:29:54

in the Red Sea, as US$ climbs the wall of wrong worries.

The pathetic performance of sibling euro adversely mirrors not only its peer, but more so the pathetic dribble of more and more politicians, feeling called to comment - and therefor worsening the already grave situation. It would be time to get the euro-act together, though I have to stress again structural, legalstic and logistic (=political) inbalances in the system may not bode well for its future - What say's you FOA/TG?
Commodities, and course gold down vs strenght of US Fiat. Another battle lost the "moloch". - best cb2

Cavan ManWAC#362519/8/2000; 9:30:30

Statement from CM: "Where's the beef?"
Cavan ManCB2#362529/8/2000; 9:33:45

CB2, I think the German Chancellor's comments the last couple of days were taunts. After all, excepting oil, the weaker Euro is not really importing wholesale inflation but rather, exporting more stuff from the "Old Continent". Yes?
Cavan ManEU Bureaucrats#362539/8/2000; 9:51:38

Remind me of some of the people I work with: KNUCKLEHEADSRUS
CoBra(too)Hello CM - re Schroeder's remarks ...#362549/8/2000; 10:33:52

You know, eventually you'll have to decide on how to di- or is it in-vest your paper $'s into something with a future in the real world, since you've delivered real goods, adding to the trade un-balance. It's becoming like the tightrope trip from the Brandenburger Tor to the tip of the Eiffel tower - and you've still got to avoid all the Brussels sprouts, Canneloni and paellas on your journey - man (no pun intended). Best cb2
lamprey_65Looking for a POG rally soon#362559/8/2000; 10:53:00

Looks to me like the diverting price action between POG and XAU/HUI/GOX is announcing an impending POG rally as early as Monday.

Exactly when and how far is anyone's guess.


SHIFTYGoldfields Ltd.#362569/8/2000; 10:56:38


Johannesburg and Toronto, August 25, 2000: Gold Fields Limited [JSE "GFI", Nasdaq "GOLD"] and Repadre Capital Corporation [TSE "RPD"] are pleased to announce that Gold Fields Ghana Limited ("GFG") has completed the acquisition of the northern portion of the Teberebie concession and assets, adjacent to GFG's Tarkwa operation, from Ashanti Goldfields Limited ("Ashanti").

The total consideration paid to Ashanti at closing was a net of US$4.4 million. The assets acquired include heap leach pads and associated crushing, agglomeration and stacking facilities, as well as approximately one million ounces of gold resources.

The crushing system acquired will process over 300 000 tonnes of ore per month and, when combined with the existing Tarkwa circuit, is expected to increase total production to more than 11 million tonnes per annum. This will enable the operation to increase gold production in the near term to well over 400 000 ounces per year. In addition, with the increased throughput, contract mining costs are expected to decline.

Integration of the Teberebie heap leach processing circuit into the Tarkwa operation will begin immediately and mining output is expected to build up to approximately one million tons of ore per month by the end of 2000.

The pre-feasibility study on the Phase III expansion of the Tarkwa operation is well advanced. This study contemplates the expansion of the metallurgical complex through the construction of a screening and desliming operation as well as a mill to process deeper and less porous ore. It has the potential to further increase production at Tarkwa to close to 550 000 ounces of gold per year.

Gold Fields Ghana Limited is owned 71.1% by Gold Fields Limited and 18.9% by Repadre Capital Corporation.

wolavkaSqueeze#362579/8/2000; 10:59:22

Lamprey, you are correct, rally starting before close today or sunday nite thru wednesday next week.

options out for oct., would like close of 277.40 + in dec.

beesting..........And Beeeeetlebaum! (Value of Gold)#362589/8/2000; 11:14:35

Anybody reading this remember the old (early 1950's) pop song called "Beetlebaum"? Well these current currency valuations sure remind me of it.

Don't know how to chart valuations but lets take a look at some recent currency valuations, with with oil and Gold entered into the "race".

Leading the pack is oil at about $35 per barrel,and gaining.

Second but losing ground is Dollar/Yen.

Euro coming out of the bunch at $.8654.

British Pound losing ground at $1.42.

The rest of the currencies also losing ground as their closly tied to Dollar/Yen.

Aaaanndddd Beeetlebaum!(Gold $2.70).

Anyone who remembers this song will remember who wins the race.

Agreeing with Trail Guide/FOA it looks like a worldwide inflationary blowoff has started.
Oil supplies are not keeping up with demand.
Oil is priced in U.S. Dollars.
Dollars are gaining in value( don't know why? Currency manipulation?) and all the other currencies are losing value in relation to the oil priced dollar,which means, "OIL" products are currently costing more in every industrialized nation on earth.
What does this lead to? Higher (fiat-paper)prices on all wages and products worldwide.You figure it out from here.....
Those in the Know are Buying Gold!!!.....beesting.

beestingiX Bourse Merger is Dead#362599/8/2000; 11:25:58

Late breaking news.....beesting.
Gandalf the WhiteThanks Beesting !#362609/8/2000; 11:45:48

Keep them coming !
You are doing well.

wolavkaLooks like don l. figured it out#362619/8/2000; 12:10:52

smart money moving into gold.
TheStrangerInflation Update#362629/8/2000; 12:13:31

Catching up on my reading, I note that:

UAL pilots have apparently won a 42% (or thereabouts) pay raise over three years. Most of that will come up front. Do you think pilots at other airlines are paying attention?

Premiums for employer sponsored healthcare plans have risen 8% nationwide over the past 12 months. Most employers are eating the increase because times are good. Experts say this may change if the exconomy slows.

Tuition at Salt Lake Community College was raised 10% this fall. Meanwhile, Tuesday, 650 professors at Eastern Michigan University walked out after rejecting a 15% three-year pay increase.

Dow Chemical warned this morning that margins are being squeezed by higher oil prices. Here we go again. Misguided managers all over the economy are still buying into the no inflation baloney. All they have to do to solve this problem is to pass increases on to the customer. But many are afraid to do so because they think higher oil costs are anomalous. Remember when the shipping industry almost begrudgingly raised prices last winter? Unable to recognize reality, they chose to call the increases a "surcharge", as though they were only acting temporarily. Well, they were acting temporarily alright. One wonders what they will call the next round of increases.

wolavkaExpect a news item this week end#3626309/08/00; 13:05:28

Something big!!!!!!!!

techs show major moves up in:
swiss franc

Cavan ManCB2 36254#3626409/08/00; 13:24:14

Even a baby step in the right direction would be encouraging would it not? Often, incrementalism is the right course. However, one must get off the dime first.

Good evening in Europe CB2.

Cavan Manthe Stranger#3626509/08/00; 13:27:07

"Sturgis" is it? Good to be missed ?
beestingLink to some legal action concerning oil futures contracts.#3626609/08/00; 14:03:42

To anyone who believes manipulation can't happen in the "futures markets", please read this.....beesting.
BobboRally continues to continue......:)#3626709/08/00; 14:14:58

Order of the day is to buy dips as I posted last week the afternoon before the rally in XAU began. Things are looking good except for the overbought condition in the au stox. That can continue against odds and with the POG looking to start it's upside next week we should clear 54.80-55.00 resistance area. Well PDG rallied to 10 1/8 as I posted the other day and it closed today at 10 1/4. NEM didn't quite make it to 20 yet, but it did print 19 3/4 today and closed at 19 9/16. Overall a good week. Big grins all around.
Need the weekend to revisit all situations and will be here for next weeks trading. Everyone have a great weekend and keep that gbug faith. Monday could be the POG blast-off we have been waiting for.

JourneymanFree-trade IV: The Good, the Bad AND the Ugly @ALL#3626809/08/00; 15:23:37

PREVIOUS INSTALLMENTS: Journeyman (09/05/00; msg#: 36076)
---------------------- Journeyman (09/06/00; msg#: 36133)
---------------------- Journeyman (09/07/00; msg#: 36204)

So far we've discovered in previous installments that
establishment "vested interests," don't like free trade in free
markets because of the pricing, etc. pressures the competiton
causes - - - and that only our schizophrenic "consumer-half"
likes free-trade.

We've also learned that the logic of "comparative advantage"
suggests it's better for us each to do what we do best and trade
for most other things and in fact, we'd almost have to be crazy
_NOT_ to trade - - - and because of this, that interfering with
trade is generally _not_ "in the common interest."

Further we've learned that free markets don't exist - - - because
they are suppressed and always have been, largely by an alliance
between "vested interests of entrepreneurs, capitalists,
land-owners, and workers" in cahoots with governments, and that
since these supressions are administered by governments, they end
up doing very little protecting but a lot of taxing.

Hope you slept better last night - - - but here's the next

_Lost jobs_

In 1990 right after the Berlin Wall came down and the Soviet
empire tumbled, about 24% of the Polish population were farmers.
At about that same time in the United States, less than one
percent of Americans were farming. But, if you look back in
history, a similar proportion of Americans (about 25%) were
engaged in farming around 1900. Since about 1900 in the United
States, then, we have "lost" about 96% of the jobs in farming.
Is this good or bad?

Remember that little ole shoemaker, improving her skills to be
more efficient? Well guess what -- that's normal. So is
inventing machines like her industrial strength sewing machine --
"capital equipment" remember -- that further increases
efficiency. And clearly you out there raising all those bushels
of wheat were busy increasing _your_ efficiency -- often called
"productivity" -- too. It's a never ending process.

And, as Greenspan suggests of productivity, "ultimately the
standard of living of human beings is determined by the output
per worker." -Alan Greenspan to US House, July 22, 1998

The net result of increases in productivity are that you can
produce the same amount of product using fewer man-hours - - -
_or_ more product with the _same number_ of man-hours. What's
happened in U.S. farming is that productivity has increased so
much since 1900 that a combination of the above alternatives
happened. That is, much more food is now produced but it
requires fewer man hours to produce it.

We can choose to look at this as a positive - - - fewer men and
women toiling in the fields doing exhausting dusk-to-dawn
physical labor. I suppose we could also choose to view it as a
negative -- more idle hands to do the devil's work. Is it good
that in 1990, fully a quarter of the Polish people still had to
work full-time just to feed themselves and the other three-
quarters of their population? Is it bad that only about one in a
hundred Americans has to work to feed us all (plus producing huge
surplusses to trade overseas to other people)?

Of course, if you told a 1900s American -- or a 1990 Pole -- that
the population of farmers within their respective societies was
going to dwindle to approximately one-twenty-fourth its previous
size, they would be incensed and frightened. What would all
those people who are about to "lose their jobs" do for a living?
Clearly even though we "lost" the farming jobs previously held by
24% of Americans, 24% of us _aren't_ unemployed. Why not?

It's clear that as societies evolve and efficiencies in older
industries increase dramatically, the number of man-hours
necessary in the older industries decrease and people are freed-
up to do other things. These gains in efficiency result in more
"stuff" produced per man hour. Many of the "other things" people
find to do can't even be imagined because they're completely new
things. Because of changing circumstances, the _locations_ in
which things are done _also_ change. Most farming in America
used to be done on small family farms --- or in the backyard.

If you could travel back in time to 1900 America, how would you
explain to the denizens what their future countrymen would be
doing? How could you explain that all those people who "lost
farm jobs" are designing and building computers, writing computer
programs, working in the entertainment field, etc. Would things
be better if they were all still picking fruit?

How could I explain to you what people 100 years from now will be
doing? We can't know.

Individuals who used to work on a farm _changed_ jobs. "Losing
jobs" then, is really just the first step in _changing_ jobs.
True, for most people, changing jobs isn't a very pleasant pass-
time, but it's rarely life-threatening.

Just as farming moved out of our early American backyards - - -
it became cheaper in human hours to let the mechanized mega-farms
produce our food mostly in the mid-west - - - just so (because of
comparative advantages), some production has likewise moved _way_
out of our backyard to Mexico, Asia, etc. In a gold-standard
world, there would be few problems if production moved out of our
backyard to Mexico, etc. under _any_ circumstances -- Americans
would just have to change jobs. If you've noticed, there's no
shortage of them.

If trade with your next-door neighbor, Joe Nerdy -- who
straightens out your computer at a single bound, thus saving you
days of fruitless frustration -- is good, and buying those
excellent hydroponic tomatoes grown by "The Horticultural Dudes"
from neighboring San Jose is good, what's wrong with buying that
car, largerly produced in Detroit, Michigan, which saves you the
time of manufacturing one for yourself?

Why then is it a bad thing to trade with some Canadians for the
canola oil you don't have time (or knowledge) to make for
yourself -- or the gold they've mined? Or to trade with some
Mexicans for the fringed blankets you can't find the time to
weave yourself? Or the Japanese for those great electronic
gadgets? Or the Chinese for some of that spiffy bamboo

From the other direction, if it's a good idea to restrict trade
with China, Japan, Mexico, Canada, etc., why not with Nevada,
Ohio and Florida? Or even San Jose?

_Logical anti-free-trade arguments_

Confoundingly, however, there _are_ three logical "common
interest" arguments in favor of attempting to hamper trade under
certain situations:

1. _The Sociological arguments,_ which amount at their best to,
"In order to keep my friends and neighbors employed and thus the
neighborhood safe from scrounging poor and homeless folks, we
should protect their jobs from at least some 'foreign'
competiton, --- and implicitly, "I'm willing to subsidize their
jobs and products (even though they are relatively inefficient)
by paying higher prices than I otherwise would if I could buy un-
taxed, unrestricted 'foreign' goods."

2. _The Dependency argument,_ which amounts to, "If we buy
widgets, etc. from 'foreigners,' we'll lose the knowledge,
expertise and facilities to produce our own widgets and will thus
become dependent on 'foreigners' if we continue to decide we need
or want widgets. Further, we could be black-mailed by these
'foreigners' if they decide to withhold widgets from us." [*1]
To one degree or another, the dependency argument applies to
_anything_ we no longer "grow" in our own back yard, which
includes those tomatoes I get from "The Horticultural Dudes," the
ground-beef I get from my favorite neighborhood store -- and the
e-forum you are reading this on.

An inherent problem with both these arguments is, "Where does
'foreign' begin? Does it begin at the borders to the
neighborhood? The city limit? The state border? Or is it at
the national border?" The standard answer, as long as we humans
insist on grouping ourselves in such distorted and unrealistic
ways, tends to be the national border. Why not the neighborhood
instead? (Hint: This is a very good take-off point for further

The U.S. founders, knowing well the propensity of governments to
protect their vested "domestic" businesses from "foreign"
competition with "foreign" states -- like competition of, say,
Virginia businesses with Maryland businesses, etc. -- and to take
their piece of the action in the form of "taxes," included the
interstate commerce clause in the constitution to prevent this
"not in the common interest" practice among the various states.
Not unexpectedly, the commerce clause has been distorted beyond
all recognition by the government cliques. See Journeyman
(5/21/2000; 15:17:29MT - msg#: 30965) "Maybe the OLD
Genghis has been around too long," and Journeyman (06/18/00;
12:52:41MT - msg#: 32567) "Down with Mr. Hyde!!" for
more perspective.

3. _The (fiat) currency argument_ is currently logical only
because of what will prove to be an historically brief
abbrogation of gold as a more-or-less universal standard measure
of value and the temporary abandonment of gold as the primary
world-wide medium of exchange. The fact that the substitutes for
gold (fiat currrencies) are each separate and different and each
is used primarily inside a particular nation's borders
exacerbates the two situations above -- and adds it's own
dimensions as well.

This third "fiat currency" argument wouldn't be logical at all if
we had a classical free-banking-enforced gold standard.
Unfortunately, though, this _isn't_ currently a free-banking
gold-standard world.


1. USA Corp. has discussed using what they call "the food
weapon," that is cutting off food shipments to the men, women,
and children in countries in dis-favor with the D.C. political

COMING NEXT: Free-Trade V: A Fist Full Of Dollars -- _Free-trade
and the money problem_


Topazgoldhunter (9/8/2000; 6:00:17MT - msg#: 36243)#3626909/08/00; 15:58:45

Good Morning (here) Goldhunter:
After posting my comments yesterday it occurred to me that the "your" in the last sentence sounded a bit harsh - shoulda said "our" <smile>:
OK lets see, - < Government statistics finally tell us the true story...> Dream on GH! "eventually" they may condescend to provide a "less unrealistic" picture, but "true" I think not. Even "that" would be better than current estimates hey?
< The hedgers become BUYERS...> Yup - could happen, getting to $320-$340 will be nigh on impossible "without" a WA style left field event though - Staying there, as we saw recently will be damn hard too.
< Speculators jumping in on "the bandwagon"...> see above.

GH, as a "commodity", Au (and Ag) may well react to the current inflationary climate as you have outlined - and the picture painted by "western" interests - dis-investment by CB's etc - would support that pos'n, but far too many instances can be cited where Au/Ag remain the antithesis of the Fiat money Empire and will not "CANNOT" be permitted to react as mere commodities.
So too, but to a lesser extent PGM'S,& OIL, where other "interests" are controlling their price destiny in a "behind-the-scenes shootout" to effect a transition from the US$ as it has reached it's saturation point Globally. Supply and Demand - "ba-humbug"
But-as we are all on the same team, I wish you well in the coming "bull" and are gladdened by your "contrary-contrary" viewpoint. (You plainly know more than I when it comes to "things as they ARE")

AristotleMr. Goldhunter, perhaps you would be kind enough to share additional thoughts--#3627009/08/00; 17:44:14

I had offered a post two days ago to explain why "the price of Gold" was not rising, and it sparked quite a little tantrum on your part. You said--
"we have a well known poster offering his opinion almost as fact as to why gold is down so far in the price cycle...It's because of the "paper" gold market he writes...futures are the root of all evil...don't you know? BUNK, HOGWASH, CRAP...We will see futures and physical turn higher sometime together, and when the tide turns, futures and coins will reward all who hold them (longs)."

In my post, I made the explicit plea, "In the event that my proffered explanations are ignored because the general impression is that they are NOT correct, I encourage anyone and everyone to please promptly set me straight on the path to a keener understanding.

Peter AsherAri !#3627109/08/00; 17:58:15

That was an elegant and perfectly comprised statment on your part. Every word of it. Excellent!
CanuckMight as well get the ball rolling#3627209/08/00; 18:09:12

From our friend Farfel

"Well, it looks like the big storm in the gold market this past week concerns the attacks by the World Gold Council (WGC) AND GFMS against poor little GATA.

One of the major contentions by WGC is something to the effect that, if GATA's analyses (compiled primarily by the most perceptive Frank Veneroso, advisor to various Central Banks, and the extremely brilliant Reg Howe, provider of expert gold derivatives analyses) contained any degree of Truth, then certainly by now a major law firm would have filed formal litigation on behalf of GATA against those bullion banks and gold mining firms that have been engaged in all variety of market rigging, collusive, price-fixing schemes in the gold market.

Upon first glance, that seems like a valid valid criticism and I have urged GATA in the past to file formal litigation.

However upon further analysis, I now feel that GATA is correct in its approach and should simply step up the attacks full throttle, and only REACT to litigation rather than initiate it.

Because the bottom line reality is this: if GATA's assertions, disseminated to major politicians, media outlets, and gold industry honchos throughout the world were as invalid and outrageous as WGC and GFMS claim, then the real question is this:




That is the real million dollar question demanding an answer, NOT the fact that a weakly funded GATA organization has not mounted a super-expensive legal action against some of the major lions of the Establishment. As it stands, GATA could not afford to go up against these guys with the mere approx. $200,000 of funds raised. The monies would barely cover legal expenses, let alone any upfront legal fees. Moreover, why should any major law firm work on contingency for GATA, especially if the targets are some of the most powerful investment institutions in the world? In fact, it would be near impossible to find a potent law firm that does not have any conflict of interest issues with any of these Establishment titans.

And let me take my point it one step further....back in 1997, the Toronto Globe and Mail published my lengthy Letter to the Editor detailing a litany of crimes perpetrated by MR. PETER MUNK of Barrick Gold, in which I accused him of being a major instigator of problems in the gold industry. Essentially, I mocked the notion that he had one scintilla of empathy for the gold bear's victims, from its devastated employees to its harmed investors.

Now that letter did result in Barrick's investor relations rep contacting me at my Bel Air home telephone (how she got my unlisted number, I do not know), then issuing an indignant rebuttal along with a variety of implicit verbal threats. A very heated exchange, and I did not back off nor apologize for any one of my comments.

Yet, if I were so off-base and so delusional in my analysis, why did Barrick fail to follow up and slam me formally for libel?

Answer: Because everything I have published about Barrick and Peter Munk is true, they know, I know it, and the entire world knows it (excluding Barrick's pathetic, deceived shareholders and ALL gold shorts)

Analogously, everything that GATA has published concerning the gold carry trade, the gold shorting mining companies, the collusional bullion banks, etc....these are ALL true because if they were not true, by now, GATA would be up to its ears in litigation. Yet not a formal shot has been fired. It is beyond strange, this total absence of response from these major corporations and entities.

YOu would think that by now, they would no longer remain impassive in the face of mass disseminations of materials containing sharp accusations against them, the accusatory material finding its way to senior Senators, Congressmen, and Editors of major Metropolitan media outlets. I know, because I put much of the material in front of them.

It can only mean one thing: GATA is printing absolute Truths about this patently corrupted gold market and its targets know it. Moreover, this corrupted gold market does NOT want the light of transparency shining down upon it, not now, not ever. It needs to operate in the shadows because otherwise, exposures of what is going on would blow the lid off the price of gold and hammer the US Dollar. There can be no other conceivable interpretations, and until I read one day of formal litigation aimed against GATA, then I have absolutely no reason to doubt the veracity of GATA's many accusations."



Well, well, well. Farfel's logic is sound as usual, good point old man. Now, from a 'lurker' of old are you a GATA supporter, a WGC supporter or just stirring the 'crap' to get a fight started. I see your point, if indeed it is your intention to get something started. I am leaning towards your intuition, somebody take a shot and let's get this started. Now, I may be completely in the upper left bleachers and I apologize sincerely if I guess you wrong.

The National Post had a great article today; who the hell is Jessica Cross? What we need is a 'new' gold expect!! So now we debate the issue if the paper players are 4,750 tonnes short or 9,000. The author of the story (I hope to post later) makes the point that gold investment is quite possibly low risk at this time.

So let the good times roll, everybody launch class action suits, debate the 5,000/9,000 issue, expose the truth, stir the 'crap' and make us rich.

Get some gold and make my day!

SHIFTYLe Metropole Cafe #3627309/08/00; 18:22:30

Le Metropole Members,

A Cafe member from the Southwest US sent me a copy
of a letter that he sent to John Mielke, CFTC Enforcement
Director, and the essence of a follow up telephone
conversation he had with Mielke. It has been served
at The Hemingway Table.

I found it to be somewhat astonishing, and to some
degree, a bit alarming. It falls right into line
with the commentary of Another and Friend of Another
at the USA Gold Site.

Are they preparing for what is likely to come?

"I expressed my concerns to Mr. Mielke regarding
the coming short squeeze in the gold and silver
markets. I asked him specifically about the
consequences if a short were unable to deliver
as required by the contract. In a nutshell,
he indicated......."

<A HREF="">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron

CanuckDoes anyone know what this means?#3627409/08/00; 18:24:41

"ATTN: ESF Operatives,

"You are slacking off on the job! The NASDAQ hit its lowest point (below 4000) since mid-August and fell below its 200 day moving average. The S&P closed below the psychological level of 1500 and is just above a support level."

Operative 1156"

I'm not referring to the middle paragraph.


wolavkatuesdays crop report#3627509/08/00; 18:40:03

wheat production will be at record lows. rock and roll wheat.
Leighauspec#3627609/08/00; 18:53:42

Your "Goldonomics 101" was the cutest thing I've read in ages! It should be required reading for every fledgling goldbug!
TopazCanuck - operatives#3627709/08/00; 19:08:19

G'day Canuck:
If we disregard the middle paragraph, it clearly implies there are "more than" 1156 Operatives under the control of the ESF, No?...furthermore bloke1156 is clearly a Supervisor.
In my field, (NOT financial manipulation) a "supervisor" would generally direct a group of 9 (odd) subservients.
One can safely assume therefore the ESF manpower base = upwards of 5000. <smile>
And they STILL can't get the job done - suggest all unemployed Americans search job databases for ESF posn's.
OH - that's right, there aren't any unemployed Americans left, are there?

PH in LAOil settlement in euros?#3627809/08/00; 19:10:17

"...the news on Bloomberg early in the morning (was) that Saudi Arabia said it is going to use the euro in oil transactions." Bill Fleckenstein 9/8/00

Anybody know anything more about this? According to longtime comments by FOA, such a move will be a major catalyst for the cascading decline of the dollar as dollars are no longer needed for oil settlement.

FOA: Is this a development that can occur gradually, over an extended timeframe? Or is this one single news item the beginning of the end?

Farfel: Good point!

lamprey_65Houston, we have a problem!#3627909/08/00; 19:46:02

(Well, someone has a problem - and it ain't me!)

Just did a little research on my charting about a total disconnect --

Exhibit A

The Commodity Research Beaureau (CRB) Index closed today at 229.78 - gold closed today at 273.05. (not sure of the contract months, but close enough for these examples).

Now, as many of you know, gold is part of the CRB Index.

So, where was gold the last time the CRB was ascending and closed near today's levels? (...before the downturn in commodity prices in 1996 and the later piling on of shorts in the paper gold market).

Answer: On December 13, 1994, the CRB closed at 229.64 and gold closed at 379.05.

Let's not forget that being part of the CRB Index, if gold were at 379.05 today, then the CRB would actually be higher!

So, this first example states the historic relationship between gold and the CRB should place the current gold price at a minimum of $380 an ounce.

Exhibit B

The Gold/Oil Relationship

I've read that the historic price ratio is 17:1.

OK, with oil at $34 a barrel this week, that means a gold price of $578 an ounce.

It would take a ratio of just over 11:1 to get us to our CRB indicated price of $380 an ounce. Today's ratio is only about 8:1.

Exhibit C


Frank Veneroso estimates the equilibrium price (without the paper pressure) of gold at over $600 an ounce.

Exhibit D

As Michael shows in his August News & Views, the Dow/Gold ratio is severely out of whack. As of today, it rests near 41. Now, there are several ways to bring this back into balance...either gold has to go to extreme levels (thousands of dollars) or the Dow must at least meet gold somewhere lower than its present price, whether or not gold rises. Now, I would rate the odds of the Dow falling all the way down to the historic ratio average without the gold price rising significantly in the process as very, very low. If the Dow corrects to bring the ratio back in line (as Michael's charts show it probably will in the near future) then I would GUESS that the MINIMUM price of gold would be no less than $400 an ounce...I would expect much more. I base this minimum only on the latest general resistance area for POG at the $400-$420 area from 1994-1996.

So, we have the minimum, best estimates for gold based on historic and supply/demand norms.

Gold/CRB - $380 (Even if the CRB does not rise further)
Gold/Oil - $578
Supply/Demand Models - $600+
Dow/Gold - A ratio under 10.

This is why I LOVE gold at these levels. Personally, my physical holdings are portfolio insurance to be passed down to my future heirs...

I will not begin to even think about pruning my mining stock holdings until we see $400 an ounce again. Thanks to Michael's charts, I'm also looking for a Dow/Gold ratio of under 10 before beginning this process.


GoldflyPH......#3628009/08/00; 19:47:36

Link! ....... Link!

But anyway, this may be a misconstruing of what the Saudi's have announced...... Instead of using Lira and Marks and Pesos (or whatever...) the are going to denominate in Euros.

It would, of course, be a step they'd have to take to start selling for Euros instead of Dollars, but it may be a leap we're making here.


Cavan ManPH in LA#3628109/08/00; 19:48:03

Looked for the story and couldn't find it. If in fact it was written, I would expect an update on the gold trail shortly.
Cavan Manlamprey_65#3628209/08/00; 19:52:45

Thank you for that analysis. My finger is on the sell button around $400 also when we get there and if the current trading markets are functioning. There is something magic though about $360 and the problems for shorts that level portends. Maybe keep an eye out around that mark.
Cavan ManPH in LA#3628309/08/00; 19:55:16

A couple of days ago there was a story about SA central government (authority) advising various jurisdictions to abandon the use of all European currencies save the Euro. Could the reference be to this story? If so, maybe not a big deal??
USAGOLDPH in LA. . .#3628409/08/00; 20:02:21

Heard a rumor yesterday in the gold market that the Gulf was going to start accepting the euro for oil payment. Didn't pass it on because I wasn't sure about it even though the rumor came from a credible source -- Mr. Insider as we used to refer to him. Would like to see the Bloomberg story if someone has a link. Supposedly there will be an announcement September 13. Mr. Insider characterized his source "as very credible, very knowledgeable."

The rest of the story is that Europe made an appeal on the basis of their currency and attempts at nation state being sabotaged by having to buy the dollar then oil. The story is the Saudi's bought it because of the amount of oil directly imported from the Gulf to Europe.

Having been burned so many times on this type of story -- which of course would be of the absolute highest impact on the gold market -- I tend to hold to the wait and see attitude.

As most of you know, FOA hinted something was brewing about a week ago, but it was largely overlooked here.

lamprey_65Cavan Man#3628509/08/00; 20:02:39

I see $360 as a short term resistance level only. $400 as longer term resistance. It is my belief, however, that $400 will be breached by a significant amount in this gold bull. It may take several years to fully peak. I would love to sell when all today's non-believers are lining up once again for precious metals, just as the smart money sold early this year as they lined up for internet stocks (remember the Time Man of the Year for 2000? -- none other than Jeff Bezos of I will, however, use the Dow/Gold ratio as a guide for locking in profits and I don't see any reasonable way that ratio can get below 10 without gold above $400 an ounce. If you haven't seen MK's chart on this ratio, I highly recommend you review it.

Also, this spring is wound extremely tight...I expect some breathtaking POG moves once the bull starts to charge!

lamprey_65Further...#3628609/08/00; 20:08:21

It is very, very important not to get shaken out during the coming ride up. Just as the techs and internets had some tremendous shakout pull-backs over the last few years, gold will too. For me, this is a longer term (probably at least 18 months, minimum) play for mining shares. Once again...the Dow/Gold ratio will be my final guide.

Physical I will not's my safety blanket.

LeSinPicture of Markets When Physical "RULES" @ PGMs - telling Golds Future#3628709/08/00; 20:56:14

Friday September 8, 11:10 am Eastern Time
Platinum fails to hold gains after revisiting highs
By Sara Marani

LONDON, Sept 8 (Reuters) - Platinum flirted with highs on Friday in London as good industrial demand combined with supply shortages helped push the price towards recent 12-year peaks, but it failed to hold the levels during the European session.

Platinum, gaining popularity in jewellery but also used in catalysts and electronics, climbed to fix at $612 an ounce in the morning -- the 12-year high set last month -- but by the afternoon it had fallen back to fix at $609.50.

``In all the platinum group metals (PGMs) there's a good amount of industrial demand so the market is well suppported. It's also pushing higher on supply issues as the Russians have clearly been holding their metal back,'' said Ross Norman of

Russia, which accounts for 65 percent of world palladium supply and 20 percent of platinum, has held up exports each year since 1997, citing bureaucratic bottlenecks.

Its platinum group metal export agent, Almazjuvelirexport (Almaz), said it would resume exports of palladium later in September but has given no indication on platinum.

There is talk Almaz is holding out for yet higher prices while choking off spot sales to increase its bargaining power.

``As long as demand continues strong and the metal is in short supply, the price will stay firm,'' said a trader.

Spot platinum was at $606.80/$612.80 in late trade, just up from Thursday's New York close at $604.50/$612.50.


Platinum jewellery demand, especially in China, was seen as a major contributor to robust overall demand. Estimates of demand in China were of a year-to-date increase of 30 percent from last year's record of 950,000 ounces.

Another contributing factor was less supply from the world's biggest platinum producer Amplats , whose refined platinum output was 871,900 ounces in the first six months of this year, down from 928,200 ounces in the same period the previous year.

But the company did say it was on course to lift annual platinum output to an annual 3.5 million ounces by 2006.

``There are also a lot of orders coming from car makers switching from palladium to platinum for new models,'' said Norman.

Palladium is widely used in catalytic converters, but more and more companies are turning to platinum instead.

``They are partial substitutes. You need about two parts palladium and one platinum to get the same catalytic effect. When palladium used to be so much cheaper that made sense, but now it doesn't,'' Norman explained.

Spot palladium was last at $760.00/$770.00 from $760.30/$780.30.

Market participants have been waiting for deliveries of palladium from Russia since producer Norilsk Nickel ordered Almaz in July to sign deals with Japanese buyers.

``But Norilsk has already been selling the drips that have been entering the market, so even when this stuff does start to arrive it probably won't amount to much,'' said the trader.

But as with platinum, it was demand that was supporting palladium's price.

``It's in electronics that palladium really does well. White goods, toys, mobile phones -- they all have small palladium chips,'' said Norman.

Now only panic buying could push prices back up to highs, market players said.

``If the Russians fail to deliver that might urge a few car companies to come in and replenish stocks,'' said one.

goldhunterAristotle...discussions#3628809/08/00; 21:05:44

The good folks here are probably retired for awhile in your opinions vs I'll not try to "wear out a welcome" except for these brief notes...

I have tried to share...not convince you, not my job...
My opinions have been stated clearly, and with evidence
There is no challenge between us...doesn't need to be
There are people who come here for questions and answers about the price of gold, and where/when it's moving...

We are team-mates Aristotle. We all want more profit/value in our precious (metal) portfolios, and these portfolios contain coins, futures, options, and what folks write...what they have "in stock". They want information...

That's about it for a Friday...

714test#362899/9/2000; 4:14:48

714Aristotle, Goldhunter, FOA, et al.#362909/9/2000; 4:15:30

Mr. Aristotle, my apologies for not responding to your post sooner, but work takes me away sometimes. Aristotle, the vast majority of this vaunted "demand" for physical goes for jewelry, which might be considered an investment in India, but in the West is a luxury rather than an investment. Let gold's price rise, and the jewelry demand for gold will sink, as Western investors make their way back to gold.

Mr. Goldhunter, you do understand the "Western" mind. In the West, physical and paper will never be separate markets. As go futures, so goes physical. What bullion dealer will offer a premium over Comex spot? Has Mr. Kosares ever offered a premium over spot? What will happen will be that "paper" contracts will trade at a DISCOUNT to spot, as we saw during last September's gold spike when Comex customers had orders unfilled or ignored (all the more reason to buy bullion, imo).

Mr. FOA seems to finally understand a bit of the history of gold: "Just as in 71, when official dollar contracts for gold were frozen at $42?? while physical eventually soared overseas,,,,,,,". Yes, he affirms what 714 has been saying, that gold will trade much higher in some places than others, as it has in the past. We will see much higher prices in places like Jidda than in NY when the Comex/LBMA spot price is frozen after making new highs.

As for this oil-for-gold business, this is a tiny portion of the oil trade, the vast majority of which trades in "currencies" and always will. And it has ALWAYS been married to the dollar. Study your history and look at what happened in 1947 when Ibn Saud renegotiated his deal with Aramco. Oil never traded for gold straight up. It has always been so many thousands of US dollars worth of gold for so many thousands of US dollars worth of oil.

In fact, before gold ever trades straight up for oil (so many ounces for so many barrels), the West will be paying for oil with the blood of its sons. May we never see that day.


I'll be gone for a few days. Salaam.

wolavkaCheck this out#362919/9/2000; 4:59:55

Sharefins' post @ kitco sept 9 : 01:41

crb index / euro dollar.

Now if that's not inflation; why would any ecb sell gold????????????????????????

Canuck@ Topaz, All re:36277, 36274#362929/9/2000; 5:01:41

Yes Topaz, and it blows me away the 'inside' scoop in the ESF.

Clearly this person is aware of financial 'management' within this group.

And not to downplay the Duck breaking 200 M.D.A. and support of 4,000.

Next week should be interesting.

wolavkaGold beads#362939/9/2000; 5:15:38

Journal of science, northwestern U. reports genetic testing may take hours not days using new technique with gold beads and a modified photo developing solution to highlight the presence and density of dna in test specimen.

Stick that in your air-bag, more gold consumption.

CanuckImportant September dates#362949/9/2000; 5:18:45

Sept.10 (tomorrow)

OPEC meeting; 4Q supply commitments, rumour mill says supply to increase 500,000 - 700,000 bbl/day. Could have huge impact on oil/gas pricing for winter. Less than 500,000
bbls/day will murder S.M.'s

Sept. 13 (Wednesday)

Please excuse my ignorance on this one; haven't followed this closely enough. Middle eastern decision/announcement re: Jeruselum (sp). Free state? Can someone please clarify this date/situation for me. Thanks.

Sept. 13 (Wednesday)

New rumour mill re: oil for Euro's. Our old time friend PH in LA researching. Good man PH!!

Sept. 19 (Next Tuesday; week and a half)

BOE gold auction. I personally am looking for bid ratio/coverage, may indicate demand and/or short covering information. Has anyone documented the auctions? I believe this is auction #7 (maybe 8). Does anyone have 'successful'
bidding prices and bid/cover ratio's? A sudden jump of ratio
would be very interesting, last couple of auctions have been less than 3; above 3 might indicate 'short' covering. Maybe producers ie: GOLD, AU, PDG may get involved again?

Have a nice week-end.


goldhunter714's discussion...#362959/9/2000; 6:38:21

I enjoyed your post Sir 714...particularly this:
"oil never traded for gold straight up"

I can imagine that OPEC is enjoying $28 to $32 per barrel, and that at 25 plus million barrels per day, they are flush with cash as you suggest...

I can also imagine that some of this stash of cash is being spent for gold (daily or weekly?)after all, we hear about alot of central bank sales, and little of who is buying...

Respectfully, Mr. Trail Guide/FOA, can this be part of the Bull puzzle, in that the World is "paying" for the gold, as it gets DELIVERED to the OPEC boys...

Sir 714, this may in fact be oil being traded for gold...straight up.

My opinion would be that the Saudi's having to build a new vault to fill would be a "nice problem to have"

RagadorDollarEuro#362969/9/2000; 6:41:03

Here is an idea. I'm just an amateur at this and the idea might be naive, but here goes...

There is a tendency (in the North American stock markets a least) to shift toward fewer and fewer prestige stocks as uncertainty enters into the market. This has happened before as in the Nifty-Fifty and is seen today as well. The general senario is this continues till these prestige stocks fall, associated with the market collapse.

Can this idea be compared to what is happening in the currency markets? In other words, a drift toward the $US as the "Nifty fifty" of currencies? We see currencies being trashed one after another. It is no small deal that the Euro is being trashed by it seems investor interests. It is the $US that always seems to come out on top in any currency uncertainty.

I am fully aware that there is no exact correspondance between stocks and currencies. That is not the point. The point is the psychology of investors.

If one can make the comparaison, one could ask where will the money go if the $US starts to falter. To other currencies that have lately been subject to such gyrations? Perhaps not. That leaves only precious metals, it seems to me.

RagadorDollarEuro again#362979/9/2000; 6:48:55

I forgot to mention the point...

In the stock market, the concentration of money into fewer and fewer prestige stocks is not an indication of confidence in those stocks, but rather of the decreasing confidence in the market, with the idea that the prestige stocks will be the last to go.

If one could make the comparaison, it would mean that the fact that the $US always comes up on top of other currencies does not indicate confidence in the $US, but rather an indication of a lack of confidence in the system, that there is a problem and the $US will be the last to go.

Bascom ToadvineTrail Guide#362989/9/2000; 7:11:07

If we do not include the somewhat recalcitrant US dollar in the perspective (it IS tenaceous, no?) and focus in on paper gold and physical gold alone, we can see that Gresham's Law is very much in effect. The bad vehicle (paper gold) representing degraded exchange value seems to be driving the good vehicle (physical gold) representing real value out of circulation.
Bascom ToadvineRagador#362999/9/2000; 7:20:19

Have you considered that it is advantageous to those investors in the Eurozone that the euro is undervalued in US$ terms? If you were an investor in the eurozone with significant US$ denominated assets, and you knew the dollar was toast, wouldn't you favor the idea of a "strong" dollar while you converted all your dollar assets into euro's?

Have you considered that the "nifty fifty" are indexed and speculators are feeding on them via leveraged futures and options?

714Goldhunter...#363009/9/2000; 7:57:23

...that is my point. The Saudis are paid for their oil in dollars, not gold.

Even when they were paid in gold sovereigns in the 30's and 40's (before the trade got too big for gold alone), the oil-for-gold trade was indexed to the US$, as evidenced by what happened to the deal in 1947, when POG was twice as high in Jidda as in NY.

That the Saudis may be buying gold with their dollars would not surprise anyone, nor their leasing it also (yes, they lease gold...after all, they desire a ROR like any other investor). One is often left with the impression from reading FOA and Another that somehow a certain amount of gold trades for, or will trade for, a certain amount of oil, without the US$ in the mix. The reality is that in the oil-for-gold trade, even back in the 30's, was always pegged in one way or another to the US$, and always will be. I would not call that "straight up", but perhaps this is an issue of semantics.

You see my point? I will have more on "oil-for-gold" in the coming weeks.


...must go. Salaam.

BonedaddyJourneyman: Dependency and Independence#363019/9/2000; 8:08:10

Hello Journeyman, I have been enjoying your thought provoking posts immensely. You wrote:

" 2. _The Dependency argument,_ which amounts to, "If we buy
widgets, etc. from 'foreigners,' we'll lose the knowledge, expertise and facilities to produce our own widgets and will thus become dependent on 'foreigners' if we continue to decide we need or want widgets. Further, we could be black-mailed by these 'foreigners' if they decide to withhold widgets from us." [*1]
To one degree or another, the dependency argument applies to_anything_ we no longer "grow" in our own back yard, which includes those tomatoes I get from "The Horticultural Dudes," the ground-beef I get from my favorite neighborhood store -- and the e-forum you are reading this on.
An inherent problem with both these arguments is, "Where does 'foreign' begin? Does it begin at the borders to the neighborhood? The city limit? The state border? Or is it at the national border?" The standard answer, as long as we humans insist on grouping ourselves in such distorted and unrealistic ways, tends to be the national border. Why not the neighborhood instead? (Hint: This is a very good take-off point for further discussion!!) "
I agree, so time for take we go...
I definition of the word "independence" is of course derived from "dependence". The dictionary has quite a few definitions of independence, I won't bore anyone with them, but they may be worth a glance just to help provide a frame of reference. The dependency argument you point out is faulted in another way also. "if we buy widgets, ect. from foreigners..." My dear friend, If "WE" do anything at all we are not acting independently, but are acting in concert with one another. Human beings as a general observation are frightened of standing alone in any endeavor. The man who is truly independent, with out being anti-social, walks the narrow path indeed. The majority of people are more comfortable in "being a majority". In a hundred thousand mice, will all the mice rise to the aid of that one mouse in need? Of course not. But there was one who faced every peril. He confronted the horror of the cross alone, not on behalf of ALL who would follow Him, but instead he faced it for EACH ONE who would follow. Now, who will forsake the crowd and follow him, alone? Looking forward to the cross, Abraham stood alone as he offered Issac. We are born alone and we die alone. Along the path between the two, we delude ourselves, sometimes by filling stadiums, or forming national boundaries, or belonging to religious denominations, that we are somehow not alone. We labor under this huge deception. Try as we might, we can never belong to each other, never to the crowd, because we were created to belong to HIM. As individuals. Stand alone units. Each one of us wonderfully and fearfully created, completely unique, by our adoring creator! Faith is the instrument that provides the courage to stand alone. How we despise His love when we seek to immerse ourselves in the crowd. How we seek to seperate ourselves from him. I have been charged to LOVE my neighbor, not to imitate him.
Yes, the U.S. Constitution was penned by men who believed as I do. But, years of revisionist history have succeeded in clouding the facts. Each citizen is responsible first, to provide for his own well being, then to promote the general welfare. (First remove the log from your own eye...)
Getting back to living together, if I do not know how to farm, or fight, I had best be willing to trade my labor to someone who does, and is willing do so on my behalf. The best way to store my labor is still GOLD. Other commodities will do, but GOLD is recognized by more individuals as the currency of independence.
Thank you, my friend, for prompting me to think.

WAC (Wide Awake Club)Palestinians discuss statehood delay#363029/9/2000; 9:05:16

Palestinian leader Yasser Arafat has opened a meeting of his Central Council in Gaza to discuss whether to issue a unilateral declaration of Palestinian statehood in six days' time.
Officials have repeatedly given 13 September as the date for proclaiming a state, but correspondents say a postponement is likely.

There has been intense international pressure on Mr Arafat to delay the declaration.

Unilaterally declaring statehood would in effect spell a cancellation of the peace process and supporters and opponents alike have warned of a descent into violence.

Israel has threatened to annex territory in the West Bank and Gaza in response to any declaration of Palestinian statehood.

Israel has threatened to annex territory in the West Bank and Gaza in response to any declaration of Palestinian statehood.

A permanent settlement between Israel and the Palestinians has remained out of reach, mainly over the question of Jerusalem.

Mr Arafat, with significant Arab and Islamic world backing, is refusing to cede sovereignty over the east of the city, which was occupied by Israel in 1967.


WAC (Wide Awake Club)French fuel blockade starts to crumble#363039/9/2000; 9:07:33

Moves to lift the crippling fuel blockades in France are growing after a second truck owners' federation told its members to end the protest against diesel prices.

Following a similar statement from farmers' leaders overnight, the leaders of all the main lorry and farmers organisations in France now say the blockades should be lifted.

But if is unclear if the rank and file membership will follow their call to end the six-day protest, which has left 80% of petrol stations in France without fuel.

Blockades around fuel depots and refineries have been dismantled in some areas.

In the Rhone region, petrol supplies are beginning to filter back to the service stations. But elsewhere, such as in Brittany and Toulouse, the blockades are still in place.

Ambulance drivers said early on Saturday that they would continue their blockades after their talks with government officials broke down.

Serious fuel shortages have also developed at airports, and 39 flights, some of them international, were cancelled out of Nice and Lyon on Friday.

Change of mind

Unostra, which represents small haulage firms, made its decision after earlier refusing to follow the FNTR federation which called on Friday for an end to the protest.

Unostra President Daniel Chevallier "has given the order to lift the barricades", a spokesman for Unostra told Reuters.

Earlier, leaders of the two main agriculture unions said they obtained important concessions from the government during overnight talks, including a significant cut in fuel taxes.

WAC (Wide Awake Club)Opec crisis meeting looms#363049/9/2000; 9:09:32

The eleven members of the Opec oil cartel begin meeting in Vienna on Sunday to try and tackle the oil price issue.
Protests and concern have mounted around the world as the oil price has more than tripled in the last 20 months to well over $30 a barrel - pushing up the price of petrol and heating oil and threatening the global economic recovery.

Opec members, under pressure from the US and others, are expected to announce an increase in production of around 700,000 to 800,000 barrels per day, or 3% of their output of 25.4m barrels.

"There's no comfort factor anywhere," said John Toalster, an independent energy consultant in London.

"It's a severe situation, no doubt about it."

Oil prices eased slightly on Friday as traders took profits ahead of the Opec meeting.

The price of a barrel of benchmark Brent crude fell to just under $33, after touching a high of $34.55 on Thursday.

Saudis the key

The action by Saudi Arabia, Opec's largest producer, is the key to the situation.

US President Clinton met with Saudi Arabian leaders earlier in the week and urged them to boost production to prevent a world recession.

Opec says it wants oil prices of around $25 a barrel, with a target band of between $22 and $28.

"Opec is going to do its part to lower the crude price to within the target band," Saudi oil minister Ali al-Naimi, said as he arrived for the meeting.

Opec secretary general Rilwanu Lukman has already suggested that the group's members will agree in Vienna to increase their production of crude.

"If we're satisfied the market needs more crude oil, we will put more in if we are in a position to," he told the BBC.

Protests mounting

Meanwhile, worldwide protests over high petrol prices were gathering force.

In France and Spain, truckers and farmers have been blockading roads and oil refineries for the past week, demanding that the government cut fuel taxes.

In the UK, Welsh farmers tried to block access to an oil refinery on Merseyside, and the protests are spreading rapidly as the price of petrol looks set to top £4 ($6) a gallon.

In the United States, fears and complaints have been growing about gas prices in the Midwest and the availability of heating oil on the East Coast.

And UN Secretary General Kofi Annan said he hoped Opec "would be especially sensitive to the impact of their decisions on the world economy and particularly on the poorest countries," which could face inflationary pressures and balance of payments difficulties as the price of oil rises.

The blame game

Meanwhile, producers and oil users have also been trying to shift the blame for higher oil prices on each other.

Opec claimed that it is tax increases on petrol that are mainly responsible for motorists' complaints, and that Western countries had to act more responsibly to control economic growth.

Meanwhile, oil analysts say that Opec underestimated the effects of its price cuts last year, and was too slow to respond to the tightening of supply.

Differences among Opec members have also contributed to the stalemate, with some poorer Opec countries eager to receive the extra revenue.

ChrusosThe 'Riskless Portfolio' And The Collapse Of Long Term Capital Management #363059/9/2000; 9:12:40§ion_id=2761

The BBC produced a program about Myron Scholes and LTCM it was screened in SA the other evening - fascinating reading about the formula that eliminated risk (!) out of the markets and its breakthrough linking with continous capturing of position from a rocket trajectory formula.

A full script is at this site. Here is an excerpt:-

"MYRON SCHOLES: August 1998 after the Russian default, you know all the relations that tended to exist in a recent past seemed to disappear.

MERTON MILLER: Models that they were using not just Bachelier's models but all kinds of models, were based on normal behaviour in the markets and when the behaviour got wild no models were able to put up with it.

ROGER LOWENSTEIN: Although their models told them that they shouldn't expect to lose more than 50 million or so on any given day they began to lose 100 million and more day after day after day till finally there was one day 4 days after Russia defaulted when they dropped half a billion dollars, 500 million in a single day.

NARRATOR: In Greenwich LTCM faced bankruptcy, but if the company went down it would also take with it the total value of the positions it held across the globe. These were now staggering. For LTCM's models had led them to bet a total of a trillion dollars. The equivalent of a year's turnover of the American government was about to be wiped out. The world's top financial regulators met in crisis.

ROGER LOWENSTEIN: Suddenly they seemed to be staring at this nightmare where one firm linked up to every major firm on Wall Street was going to be seized up and markets might just stop working. That was the great fear.

NARRATOR: In order to prevent a global, economic collapse the American Central Bank, the Federal Reserve, had no choice but to organise a bail-out of LTCM. The terms were..."

At the iii site you will also see an old GE friend Daan Joubert under the section the chartist.

Best wishes to all the friends at USAGOLD

USAGOLDAt the end of the first week of an important month for the world economy, the ECB's Wim Duisenberg delivers an important policy statement in Calgary 9/8/00#363069/9/2000; 9:24:18


The international role of the euro

Speech by Dr. Willem F. Duisenberg,
President of the European Central Bank,
on the occasion of the 2000 Spruce Meadows Round Table,
Calgary, 8 September 2000

Let me first thank the organisers of this conference for having invited me to share
some thoughts with you on the international role of the euro. The euro was
successfully launched 20 months ago as the single currency of 11 Member States
of the European Union (EU) - known as the 'euro area'. On 1January 1999
these Member States transferred their monetary sovereignty to a new
supranational institution, the European Central Bank (ECB). Since then, the
Eurosystem - composed of the ECB and the national central banks (NCBs) of the
11 countries that have adopted the euro - has been in charge of the euro area
single monetary policy and related functions, such as foreign reserve
management and operations and payment systems oversight.

The euro has brought about fundamental changes to the economic and financial
environment in the euro area and beyond. By lowering transaction costs and
enhancing price transparency, the single currency represents a major contribution
to fostering competition and efficiency in goods and financial markets across the
euro area. As such, the introduction of the euro represents a quantum leap
towards completing a fully integrated Single Market in the EU and lays a solid
basis for the improvement in the living standards of European citizens. Besides
these welfare-enhancing effects on the "domestic" economy of the euro area, the
new setting also has far-reaching consequences for the world economy and the
international community.

Let me shed some light on the international ramifications of Monetary Union by
highlighting three interrelated aspects. First, the use of the euro as an
international currency in the global financial system; second, the growing role
played by the Eurosystem in international policy co-operation; and, third,
relevant aspects of the exchange rate of the euro. Before dealing with these
points in turn, I should like to recall some key economic features of the euro

Key economic features of the euro area

Let me begin by putting the euro area into an international perspective. The euro
area represents a large and relatively closed economy. Given its population of
almost 300 million people and its significant weight in the global economy, the
euro area is broadly comparable with the United States. As regards its size and
structure, the most striking fact is that the euro area economy has a share of
world output of around 16%. This is more than three times that of its largest
national component (namely Germany, which accounts for 4.7%), significantly
higher than that of Japan (which accounts for about 8%), while being lower than
that of the United States (which stands at 21%).

Being a large economy, the degree of trade openness of the euro area is much
smaller than that of its constituent countries, even though it is still higher than in
the United States and Japan. Measured by the average of exports and imports as
a share of euro area output, the degree of openness is 16% in the euro area. By
contrast, prior to Monetary Union, the average export ratio of all Member States
including intra-euro area trade stood at around 35% in 1997, ranging from 20 to
60%. At the same time, the euro area remains more open than the United States
and Japan, with ratios of 12% and 11% respectively. Another factor highlighting
the role of the euro area in world trade is its share in world exports. With almost
20%, the euro area is the world's largest exporter, compared with 15% and 9%
in the United States and Japan respectively.

As regards the structure of the euro area economy, the patterns of production are
broadly similar to those of the United States and Japan. While primary
production is rather negligible (around 2% of total output), the bulk lies with the
euro area's services sector, accounting for almost 70% of total production,
which is roughly equal to that of the United States (72%) and higher than that of
Japan (60%). The industrial sector accounts for around 30%, which is higher
than in the United States but somewhat lower than in Japan.

Finally, if you look at the structure of financial markets on both sides of the
Atlantic, you may note the difference between the "bank-based" system of
finance on the European continent and the "market-based" system in the United
States. Although there seems to be a trend away from banks towards non-bank
financing in the euro area, reinforced by the introduction of the euro, banks still
play a dominant role in providing financial services in the euro area. Domestic
credit as a share of domestic output accounts for 130% in the euro area,
compared with 80% in the United States. Correspondingly, stock and debt
markets are much smaller in the euro area than in the United States. While the
shares of euro area debt securities and stock market capitalisation relative to GDP
remain clearly below 100% (91% and 63% respectively), the figures for the
United States are in both cases well above 150% (155% and 172% respectively).
This brings me to the use of the euro as an international currency in the global
financial system.

The role of the euro as an international currency

Given the weight of the euro area in the world economy and the legacy of the
former national currencies, which have been replaced by the euro, it is no
surprise that the euro is the second most widely used currency behind the US
dollar. A number of observers have argued that one of the main motivations
behind Economic and Monetary Union (EMU) was the development of the euro
as a major international currency. This perception, however, is incorrect for a
number of reasons.

First, the "euro project" is to be seen as a further logical step in the European
integration process, which started more than half a century ago, immediately
after the Second World War. Its objectives were not - and are still not - purely
economic, as European integration aims not only at the creation of a prosperous
but also a stable and peaceful Europe. For a large part, trade, economic and
financial integration aimed at the removal of all barriers to free competition has
been the engine of this process. In this context, the euro is to be seen as a major
contribution to the completion of the Single Market in Europe. The primary
objective of the ECB is to maintain price stability in the euro area.

Second, the international use of the euro is, first and foremost, the outcome of a
market-driven process, not to be steered by central banks or by political bodies.
The ECB has adopted a neutral stance on the internationalisation of the euro. The
ECB intends neither to foster nor to hinder the use of the euro. In the past, major
countries have, at times, tended to promote the international use of their
currency, primarily with a view to potential benefits for their national financial
sectors. There have also been cases in which major countries have resisted the
internationalisation of their currency, owing to the uncertainties that this process
may imply for the conduct of monetary policy. However, by maintaining price
stability, the ECB almost automatically fosters the attractiveness of the euro as an
international currency.

Third, the international use of a currency is a complex phenomenon that does not
lend itself to ad hoc promotion measures. A currency can be used not only for
different functions, but also by different groups of economic agents. In this
context, the use of the euro by private agents as an investment and financing
currency, as well as a payment and vehicle currency, plays a prominent role.
Although the euro is also used by the public sector as a nominal peg and reserve
currency, the behaviour of the private sector dominates the internationalisation of
the euro. The amount of financial assets managed by the private sector is many
times larger than official reserve holdings. In addition, private agents usually
adjust their asset management strategies more rapidly than most public sector
institutions. But what are the factors behind the internationalisation of a

In principle, two basic factors might eventually determine the international role of
the euro - size and risk. With regard to the size factor, a broad, deep and liquid
euro area capital market may lead to a greater use of the euro through lower
transaction costs. This may, in turn, facilitate the development of the euro as a
vehicle currency for trade and commodity pricing. Already at this early stage, the
introduction of the euro has brought about fundamental structural changes in
euro area capital markets. Progress in the harmonisation of certain market
standards, practices and conventions across the euro area is reflected in a capital
market that is characterised by increased market liquidity, broader maturity
spectrum and wider range of financial products. In addition, following the
introduction of the euro, the euro area corporate bond market has grown
significantly. The activity of private issuers has become more important than that
of sovereign issuers, traditionally dominating the euro area bond markets.
Positive network externalities and economies of scale have provided incentives
for firms to issue their own securities instead of borrowing from banks.
However, this trend away from banks towards markets - the so-called
disintermediation process - will take time. The development of a broader
spectrum of euro-denominated financial instruments will be a gradual process.

In addition to the size factor, the international use of a currency is determined by
risk factors, since investors may use the euro to hedge their risks through
diversification across international currencies. If international investors and
issuers consider the euro to be a stable currency, they will hold euro assets to
minimise risk in their internationally diversified portfolios. In this context, I
should make clear that maintaining price stability not only makes a contribution
to improving economic prospects and raising living standards in the euro area,
but it is also a major precondition for a currency to play an international role.
Only if investors outside the euro area are confident that their purchasing power
will be preserved over time, will they engage in euro-denominated financial
activities. Therefore the commitment of the ECB to pursue price stability in the
medium term remains a key factor behind market confidence in the euro as a
stable currency. Besides price stability, the current and expected growth
performance of the euro area economy is an additional factor behind the
attractiveness of the euro. Sustained non-inflationary growth in the euro area
economy would have beneficial effects on market expectations and foster the
international use of the euro.

As regards the private use of the euro, recent trends show that it has mainly been
used as a financing currency. With regard to international debt securities, the
euro is more widely used than the former national currencies of the euro area
countries. The issuance of euro-denominated assets by residents outside the euro
area accounted in 1999 for almost 30% of total issues denominated in a currency
different from that of the borrowers' respective geographical residences. By
comparison, the combined share of all former national currencies of the euro area
countries and the ECU amounted to only 18% of total gross international
issuance in 1998. The growing use of the euro was mainly mirrored in a decline
in the share of US dollar-denominated issues from 58% to 48% between 1998
and 1999. These trends are even more striking if one focuses on the bonds and
notes segment of the market. Accounting for 33% of all announced international
bonds and notes issues in 1999, compared with 37% for the US dollar, the euro
nearly matched the dollar in that year. In the second half of 1999
euro-denominated bond issues even exceeded those in the US dollar.

As far as the euro's share in overall official reserves is concerned, the euro also
represents the second most widely used currency behind the US dollar.
According to the latest available data, at the end of 1999 the euro accounted for
around 13% of the official foreign currency holdings of the world. Apart from
some technical corrections on account of the conversion of the Eurosystem's
reserves into euro, which led to a slight decline in the euro's share in overall
reserves, there is no evidence of any reallocation of foreign reserves at this stage.
It should also be noted that more than 50 countries in the world are currently
using the euro as a nominal anchor.

International co-operation

Let me now turn to the institutional side. The introduction of the euro has
brought about a major change to the institutional framework in which
international co-operation takes place. In view of the rapid process of
globalisation and episodes of crises in a number of systemically important
emerging market economies, international co-operation should play a role in
strengthening the international financial architecture. In this respect, the new
institutional setting in Europe is to be taken into account.

By reducing the number of key players, the introduction of the euro will simplify
the international policy co-operation process between the major economies. In
particular, it should make this process more efficient by facilitating the reciprocal
exchange of information and views, as well as the formulation of common
understandings on economic and financial issues at the global level. Each of the
main partners - the United States, the euro area and Japan - is in a position to
speak for a comparatively large economic area. A more balanced relationship
between the major players might help to induce each of them to take on
responsibility for contributing to a stable global environment.

In many ways, the ECB - which as a rule represents the Eurosystem externally -
is already involved in the work of international institutions and fora in the area of
competencies of the Eurosystem. Formal and informal agreements have already
been reached with the International Monetary Fund (IMF), the Organisation for
Economic Co-operation and Development (OECD), the Bank for International
Settlements (BIS), the Financial Stability Forum (FSF), and the several
groupings of ministers and central bank governors (G7, G10 and G20).

The involvement of the ECB was relatively straightforward for groupings created
after the introduction of the euro, such as the FSF or G20. In the case of
pre-existing international fora and organisations, however, the arrangements to
be made were more complicated. The introduction of the euro heightened the
need for international financial institutions - such as the IMF and the OECD,
whose internal procedures are organised on the basis of the "one country, one
currency" principle - to accommodate in their bilateral and multilateral
surveillance exercises the existence of regional entities. In December 1998, for
example, the IMF granted observer status to the ECB. Since February 1999 the
ECB observer at the IMF has been involved in all relevant work of the Fund on
issues falling within the competence of the ECB and of mutual interest to both

The fact that the ECB's overriding objective is the maintenance of price stability
has three main implications for its participation in international policy

First, a reciprocal exchange of information and views is a substantial component
of the Eurosystem's co-operation with the international organisations and fora.
Regular consultation on external economic developments enhances the ability of
the ECB to analyse the outlook for price developments in the euro area, which in
turn provides useful input into the effective implementation of its monetary
policy. By taking into account possible spillover effects from third countries'
policy actions, consultation contributes to reducing the likelihood of
misinterpreting the impact of foreign developments on domestic variables. Given
its voluntary nature, consultation does not compel the ECB to adopt a monetary
policy inconsistent with its objective of price stability.

Second, a reciprocal exchange of information and views is supplemented by
international surveillance. In this case, a third and independent party, such as the
IMF or OECD, regularly monitors and assesses the economic policies of its
members. The ECB participates in the surveillance process for policies falling
within its competence (e.g. monetary policy, payment systems oversight). This
means that, whenever monetary policy is under surveillance, the ECB is solely
responsible for its interaction with the IMF and OECD. Standards and codes
recently adopted by the IMF and other relevant international institutions are a
way of defining best policy practices and enhancing transparency in the field of
monetary and financial policy. In this respect, the ECB's involvement in regular
surveillance further strengthens its accountability through being transparent.

Third, in the area of macroeconomic policies, consultation and surveillance are
the only forms of international co-operation that are relevant to the Eurosystem.
Any form of ex ante policy co-ordination of monetary with other macroeconomic
policies would neither be advisable for the Eurosystem nor be compatible with
the ECB's mandate and independence. Apart from the well-known recognition
and decision lags in policy-making, attempts to co-ordinate ex ante would not
only blur the specific responsibilities of individual policy-makers, but also
reduce their accountability. In determining its monetary policy stance, the ECB
should and does take into account all relevant information. It cannot let its policy
solely be determined by the current and future course of other policies. This
could easily compromise the maintenance of price stability.

The ECB's active participation in the ongoing process aimed at strengthening the
international financial architecture is to be seen against this background. The
Eurosystem supports such a process for two reasons: first, since the achievement
of its primary objective of safeguarding price stability in the euro area would be
facilitated by a sounder and more resilient international financial system; and,
second, because the Eurosystem is expected to contribute to the smooth conduct
of policies relating to the stability of the financial system.

Putting one's own house in order must be at the basis of the stability of the
"global village". In this context, I should like, if you would allow me, to draw
attention to the fact that the introduction of the euro also contributes to
international financial and economic stability in a more subtle way. The process
towards EMU is not only concerned with irrevocably merging 11 national
currencies. It also means building up a sound institutional framework based on
monetary stability and fiscal sustainability. The EMU process provides evidence
of how effective properly organised policy and institutional co-operation can be
in fostering economic stability in each individual country. In addition, EMU
shows that regional policy co-operation may go well beyond trade matters.

One should not be surprised by the number of countries that regard EMU as a
relevant example of regional co-operation. In Europe, EMU represents a
powerful magnet for many central and eastern European countries. For these
countries, accession to the EU will mark the completion of the transition from the
former centrally planned economies to fully-fledged market economies. The
prospect of EU membership is an incentive for transition efforts of accession
countries and the ultimate adoption of the euro is already taken into account in
their monetary and exchange rate policy strategies. However, the countries
concerned will not adopt the euro by the date of their entry into the EU and the
timing for this step might be quite different from country to country. The path
towards full euro area participation implies progress towards nominal and real
convergence. Ultimately, these countries are required to observe the same
convergence criteria with regard to public finance, long-term interest rates,
exchange rate stability and inflation as the current euro area countries. In the legal
area, accession countries will be required to provide their central banks with the
same degree of independence as today in the euro area. In the technical areaé

USAGOLDThe rest of Duisenberg's speech#363079/9/2000; 9:32:03

Note: You've no doubt picked up on the fact that I consider this speech important. I didn't realize it would be this long on the Forum. Now that I've gone this far, I might as well give you the rest. Next time we'll just make one of these a Gilded Opinion piece. My apologies.

should not be surprised by the number of countries that regard EMU as a
relevant example of regional co-operation. In Europe, EMU represents a
powerful magnet for many central and eastern European countries. For these
countries, accession to the EU will mark the completion of the transition from the
former centrally planned economies to fully-fledged market economies. The
prospect of EU membership is an incentive for transition efforts of accession
countries and the ultimate adoption of the euro is already taken into account in
their monetary and exchange rate policy strategies. However, the countries
concerned will not adopt the euro by the date of their entry into the EU and the
timing for this step might be quite different from country to country. The path
towards full euro area participation implies progress towards nominal and real
convergence. Ultimately, these countries are required to observe the same
convergence criteria with regard to public finance, long-term interest rates,
exchange rate stability and inflation as the current euro area countries. In the legal
area, accession countries will be required to provide their central banks with the
same degree of independence as today in the euro area. In the technical area,
preparations will require long lead times, and the ECB has already established a
dialogue with them, to assist when requested.

Outside the euro area, an ongoing debate on deepening regional integration
beyond trade liberalisation is taking place among Mercosur countries. The
relative economic conditions of these countries appeared even more differentiated
than those of European countries when the integration process started more than
fifty years ago. However, this seems to reinforce their conviction that regional
co-operation is necessary to achieve stable and non-inflationary growth and to
overcome latent economic conflicts with their trading partners. As in the case of
the regional process of integration in Europe, it may well be that the final
objective of the Mercosur regional agreement goes beyond that of trade

The international community should support regional co-operation efforts among
countries that have strong trade relationships and are willing to achieve progress
in economic convergence. These efforts have significant positive externalities
and could contribute to greater effectiveness of multilateral and bilateral

The exchange rate of the euro

To complete the picture of the international role of the euro, let me finally refer to
the exchange rate of the euro vis-à-vis other major currencies, namely the US
dollar and the Japanese yen. I should like to take the opportunity to reaffirm that
the ECB does not pursue any exchange rate target in its stability-oriented
monetary policy strategy. Our objective is to maintain stable prices in the euro
area and not a specific level of the euro's exchange rate. According to our
strategy, the exchange rate of the euro is the outcome of current and expected
economic policies pursued in the euro area, and economic developments in both
the euro area and abroad.


To summarise, the new institutional monetary setting in Europe has
consequential implications for international capital markets and international
policy co-operation. The pace at which the role of the euro as an international
currency will develop is hard to predict. But what can be said is that the global
acceptance of the euro in the international financial markets depends first and
foremost on market confidence in the stability of the euro. In this context, the
ECB's monetary policy committed to the pursuit of price stability provides an
important contribution. In the same vein, by participating in international policy
co-operation, the ECB contributes to reducing the risks of negative externalities
and to fostering the adoption of best policy practices at the international level.
This is an important contribution of Europe to a more stable international
financial system.

* * *

European Central Bank
Press Division
Kaiserstrasse 29, D-60311 Frankfurt am Main
Tel.: +49 69 1344 7455, Fax: +49 69 1344 7404
Reproduction is permitted provided that the source is acknowledged

Cavan ManUSAGOLD#363089/9/2000; 10:15:38

Duisenberg's speech

A lot was said that wasn't said. Sounds a lot like FOA.
Peter AsherDuisenberg's speech#363099/9/2000; 10:37:03

I think it's just fine to post significant major pieces on the main site, it is much easier when one need only scroll up and down to follow the ongoing discussion.

The most pertinent sentence in this speech is:

>>>>Only if investors outside the euro area are confident that their purchasing power will be preserved over time, will they engage in euro-denominated financial activities.<<<

This is, of course the crux of all fiat currencies and why it was thought, before the launch date, that "Gold Backing" would create a powerful product. True Gold backing preserves purchasing power.

Back in December ‘99, I pointed out that mixing an internationally strong Mark and Swiss Franc with the unsought after Lire and Peso would empirically result in a currency that was less desirable then when the Mark and Franc stood alone. Now there is the future event of ---

>>> In Europe, EMU represents a powerful magnet for many central and eastern European countries. For these countries, accession to the EU will mark the completion of the transition from the former centrally planned economies to fully-fledged market economies. The prospect of EU membership is an incentive for transition efforts of accession countries and the ultimate adoption of the euro is already taken into account in countries and the ultimate adoption of the euro is already taken into account in their monetary and exchange rate policy strategies.<<<

Behind the curtain of currency trading, what ultimately pulls the strings is the productive capability of the labor and resources of the nation (s) represented by that currency. The purchasing power of the individual nations to acquire the product of the EU at large will be weighed against their ability to deliver in kind and the currency ultimately adjusted to compensate. Politics, specifically regarding labor: the education, skills and work ethic of that labor force and the ownership or foreign dependency of natural resources, all effect the "Purchasing power being preserved over time".

I believe that the prospect of "Giving a piece of the action" to these "many central and eastern European countries" by their "accession to the EU" will hold back the Euro as the expanding European union goes through it's growing pains. Some of these former Iron Curtain countries are the "Rust Belt" of greater Europe. Romania, I believe, is the most industrial polluted nation in the world.

Eventually, when it all comes together, it will be an economic giant; but for now, the economy of the USA is the more ‘Predictable' entity.

Cavan ManPeter Asher#363109/9/2000; 11:18:01

Peter, what does the current "economy" of the US as it is discussed by contrarians at this site portend do you think?

My take on the speech: "The Euro is a horse of a different color. We aim for this horse to run a long, long race. Right now, we see trouble ahead. We're gonna be stable and sustainable at all costs and we're here if and when needed in the event of instability. Also, we're looking out for #1 over here and for those who join us."

USAGOLDCavan Man. . .#363119/9/2000; 11:49:16

You are absolutely right. There is much written between the lines. Europe is reeling under the oil shock and it appears that Duisenberg is saying that the euro is now ready beyond premliminary theoretical considerations for taking its place in international commerce -- if the political sector and private interests are up to the task. He is basically saying that the ECB is ready to play its role as long term defender of the currency. The inflation rate in Europe has been exacerbated by their having to purchase the dollar and then oil. A deadly secondary effect has been the undermining of their own currency just to buy oil. He also assures international holders of the currency that though the value can be undermined in the short run by speculators and the like, it won't be undermined by the ECB itself -- an important assurance. The "peg" reference is also important -- possibly a subtle invitation to the Gulf to consider including the euro in its peg. All of this ties together in a carefully crafted sales pitch for the euro. Very interesting and in my view very important. We will see if anything substantial comes of it.

Just as an exercise though, let's consider some of the things that might happen if the Gulf actually did take the euro in payment and the dollar became the currency under attack.

*******U.S. equity markets would likely plummet as stocks have become little more than another currency play. When the currency goes, they go.

*******U.S. oil prices (in dollars) would likely skyrocket, and along with it the inflation rate, as confidence in the dollar worldwide dwindles

*******A mass of dollars would be looking worldwide for a place to land that would further exacerbate the inflation problem domestically

*******Gold would likely skyrocket as uncertainty would become the byword for all the world's investors as we go through a period of financial dislocation

And that's just for starters. I'm sure others here could add to this list that comes quickly off the top of the head. . .

I guess the real question is whether or not the Gulf will actually take the euro in payment. The conditions seem right and perhaps even essential to that end. And the Duisenberg speech seems to be signalling something. It would be hard to imagine European political and financial leaders just standing around waiting for the U.S. or the Gulf to do something about their energy problem, but I've been surprised by their lack of action in the past. It appears that Mr. Duisenberg has just "goosed" them -- we'll see if anything substantial comes of it.

Gold would seem a prudent move for investors on both sides of the Atlantic given the situation. Uncertainty will be the watchword going into Fall and through the rest of the year.

Peter AsherCavenman & Michael#363129/9/2000; 12:02:42

>>> We will see if anything substantial comes
of it.<<<

Yes, Michael, these are words, not deeds.

Cavenman: Re the USA Economic juggernaut, I go with Mark Twain's famous line: Announcements of my death have been grossly exaggerated."

Be back after dark or if the rain arrives. P.

JMBChrusos' msg #36305#363139/9/2000; 12:10:20

The 'Riskless Portfolio' And The Collapse of Long Term Capital Management
Sir, I have but one word for you...WOW
Make that two words...THANKS

Cavan ManPeter Asher#363149/9/2000; 12:19:26

A tip of the cap to you Sir Peter of Asher.......
USAGOLDPeter, Re: We will see if anything substantial comes of it.#363159/9/2000; 12:34:59

Act and Europe moves on. Fail to act and Europe could quickly become the largest market for gold in the world.
Cavan ManUSAGOLD#363169/9/2000; 13:44:55

I'm surprised there is not more action at the forum today. Must be the tee times were too good to pass up. This speech by Duisenberg is another step for the Euro. Taken in combination with the oil settlement rumors--whew!

POG will rise $10 on Monday.

Was listening to a recent effort of the Nashville Chamber Orchestra yesterday; a rendition of "Ashokan Farewell" (theme from Burn's "Civil War"). This tune, for me, evokes many strong emotions of patriotism and for deep love of this country however much we've erred (IMHO). God Bless the USA.

JourneymanFree-Trade V, Part 1: A Fist Full Of Dollars @ALL#363179/9/2000; 15:08:05

PREVIOUS INSTALLMENTS: Journeyman (09/05/00; msg#: 36076)
---------------------- Journeyman (09/06/00; msg#: 36133)
---------------------- Journeyman (09/07/00; msg#: 36204)
---------------------- Journeyman (09/08/00; msg#: 36268)

So far we've discovered in previous installments that almost no-
one likes free-trade except our schizophrenic "consumer-half".
We've also learned that the logic of "comparative advantage"
suggests we'd almost have to be crazy _NOT_ to trade - - - and
that interfering with trade is generally _not_ "in the common

Further we've learned that free markets don't exist because they
are supressed largely by a traditional alliance between "vested
interests of entrepreneurs, capitalists, land-owners, and
workers" in cahoots with governments, and that since these
supressions are administered by governments, they end up doing
very little protecting but a lot of taxing.

Additonally we found out that jobs aren't really lost, but
instead, as a result of increasing efficiencies (including better
"capital equipment"), people are just freed-up from older types
of employment and find new jobs. These gains in efficiency
result in more "stuff" produced per man hour, which is commonly
called "productivity." Increasing productivity is important, as
Alan Greenspan suggests, because "ultimately the standard of
living of human beings is determined by the output per worker."

We also saw that there are at least three logical problems with
free trade, which we labeled for convenience, "sociological"
problems, "dependency" problems, and "(fiat) currency" problems.

I'm sure by now you've probably begun taking sleeping pills just
so you can dull your insatiable curiosity, as to what's going to
happen in the next installment of this saga. Well, here's just
what you've been waiting for!!

_Free-trade and the money problem_

The essence of the free-trade money problem is that history
proves the trade value of any "fiat" (i.e. paper/megabyte)
dollar, yen, pound, etc. note, no matter what numbers and symbols
are printed on it, can and usually does go to effectively zero at
some unpredictable point, usually quite rapidly. This is what
FOA/TrailGuide means when he talks about the dollar being near
the end of it's "timeline." Additionally history proves that the
value of these fiat certificates always, _always_, *always*,
_*always,*_ *ALWAYS* *_ALWAYS*_ depreciates, that is loses buying
power year after year after year. _*EVERY*_ year. These days,
the result of this depreciation -- over-all higher prices -- is
called "inflation."

There is a common cause for both these defects in paper/megabyte
money: governments, usually these days in cahoots with so-called
"central banks," endlessly increase the fiat supply. The Law of
Supply and Demand says this increased supply will cause the
fiat's value to drop --- and it does. _*EVERY*_ year. Yearly
inflation is the incontrovertible evidence of this excessive
money creation.

When "they" increase the money supply _too much_, eventually the
value drops as everyone tries to unload the currency at once and
you get sudden hyper-inflation, what Austrian economists call the
"katastrophenhausse" or "crack-up boom." Theoretically
governments and/or central banks could control themselves and
stop issuing excess currency. But they never have.

It's the fact that these paper/megabyte notes can go to
essentially zero value that distinguishes modern "fiat" money
from "hard" money, that is, from gold and silver. Because of
gold's history and since its value is directly proportional to
its mass (weight), people inherently believe gold won't lose much
of its value -- after all, even if gold's "price" drops a little,
its _weight_ doesn't change does it?

On the other hand, modern paper-backed currency notes count
instead on symbols and government "fiats" or "proclamations"
whether you like it or not, sucker) to convince people of the
paper certificates' worth and to accept them in trade. It is the
"fiat" or "proclamation" part of the package that causes those in
the know to refer to all modern currencies as "fiat currencies,"
"fiat" for short.

"Well, I think you have to define what you mean by a
free market. If you have a fiat currency, which is what
everyone has in the world --- ..." -Alan Greenspan

"That's not a free market." -Congressman Ron Paul

"That is not a free market." -Federal Reserve Chairman
Alan Greenspan, Semi-annual Humphrey-Hawkins Testimony to US
House, July 22, 1998

A five dollar gold piece weighs only about a forth as much as a
$20 dollar gold piece. A five-dollar bill on the other hand
weighs exactly the same as a twenty-dollar bill, or for that
matter, a one-dollar bill or a one-hundred dollar bill. Only the
different symbols and numbers printed on paper money convince
people they have different values -- or any value at all.

Once people lose faith in those symbols and numbers, fiat has no
weight to back it up and, government proclamation or not, people
become increasingly reluctant to accept it. An ounce of gold is
an ounce of gold, with or without symbols, with or without a
government fiat. It's a psychological thing -- but a very
powerful and important one indeed.

With gold, "the buck stops here." People have always accepted
gold as payment in full and always accepted it in trade. In
practice gold has _never_ acted like an IOU that might not be
good anymore. Fiat eventually always has. And additionally, if
history is any guide at all, because of "inflation" you can be
absolutely certain those fiat certificates -- unlike the gold --
you've been stashing under the mattress will buy less at year's
end than they do today. Fiat virtually NEVER goes up in terms of
what it can buy -- except in rare cases when productivity in
isolated products temporarily out-runs money-supply inflation.

You can see why accepting fiat IOUs for your savings in lieu of
gold, like accepting a promise to deliver food later instead of
taking delivery and storing it yourself, can be risky. The real
essence of the situation is that as long as all the links in the
supply chain from producer to your dinner table are sound,
everything's OK. But what if the IOUs go bad?

There is indeed a potential problem with free trade directly
related to the above considerations - - - especially if you're
using what amounts to fiat IOUs which are very widely accepted in
trade outside the country of orgin. Like the dollar is.
Remember, these megabyte IOUs have no floor value. Unlike gold,
they can drop to zero value in a crack-up boom. And once
attuned, _everyone_ can see that zero-value potential, especially
once a crack-up boom actually starts.

If "foreigners" were holding hard money -- gold or silver
remember -- they wouldn't be likely to believe it's value could
go to zero and so suddenly try to unload it, thus causing the
fabled "crack-up boom." But if they're holding paper/megabyte
fiat money and realizing its value is based only on the symbols
printed on it and thus _could_ drop to zero, they easily might
decide to unload it.

Thus free trade -- using gold -- poses no threat to your domestic
money system. A so-called "trade imbalance" or "current account
deficit" won't lead to the sudden loss of value in your gold
denominated savings and buying power. And a "current account
deficit" is much more easily understood as "gold shipped

On the other hand, if you've been sending those megabyte-paper-
fiat symbolic IOUs overseas in return for imported goods (instead
of sending gold), the "foreigners" holding these IOUs could very
logically decide to suddenly repatriate them. This would cause a
sudden drastic depreciation in the trade value of the actual
paper currency (or accounts of any kind denominated in that
currency) that you hold. The value of these accounts _could_ go
to virtually zero remember, creating major havoc in your life and
your country -- and in the case of the "dollar," in the whole

Large numbers of people recognizing that there is an over-supply
of fiat money and recognizing that the currency is over-valued
and a crack-up boom _could_ start is often enough to start one.
This is the condition, like a supersaturated solution, when a
single event, a single crystal, dropped into the mix can start
the sudden percipitation of the fiat to the bottom of the beaker.
This is the current situation with the "dollar."

If you want to understand the implications of this huge overseas
build-up of paper/megabyte dollars (and it is huge) as a result
of record "trade imbalances" check out "BIG-FLOAT: The American
Damocles," by L. Reichard White, available at:

Or alternatively click on the (same) link in the header to this

There's another fiat money related trade problem we already know
about: If you've gotten addicted to trading with either your
shoemaker, or your friendly mechanized mid-west mega-farm, and
haven't been making shoes or growing food yourself - - - and
anything disrupts trade, especially all of a sudden, you've got
the dependency problem. And if your neighbors depend on trade
for their income, you've all got "sociological" problems!

Usually this doesn't happen, but there is one thing that can very
severely disrupt both shoe trading and wheat trading, not to
mention every other kind of trading all at once and all-of-a-
sudden. Yep, katastrophenhausse! This is particularly true if
the trade is cross-border trade with folks using different
national brands of money. If everyone were using gold-backed
currency, of course, crack-up booms simply wouldn't ever happen.
And any remaining trade disruptions that DID happen would not be
related directly to the value of the money. Nor would they be

COMING NEXT: Free-Trade V, Part 2: A Few Dollars More - _Micro-
economic trade effects of California's secession_


TownCrierThis is the big stick being carried by the soft-spoken euro#363189/9/2000; 16:38:09

From The Tower's vantage point, these comments by ECB president Willem F. Duisenberg are wherein lie the strength to set the euro currency apart from all others before it.

"The primary objective of the ECB is to maintain price stability in the euro area.

"Second, the international use of the euro is, first and foremost, the outcome of a market-driven process, not to be steered by central banks or by political bodies. The ECB has adopted a neutral stance on the internationalisation of the euro. The ECB intends neither to foster nor to hinder the use of the euro. In the past, major countries have, at times, tended to promote the international use of their currency, primarily with a view to potential benefits for their national financial sectors. There have also been cases in which major countries have resisted the internationalisation of their currency, owing to the uncertainties that this process may imply for the conduct of monetary policy. However, by maintaining price stability, the ECB almost automatically fosters the attractiveness of the euro as an international currency.

"...Although the euro is also used by the public sector as a nominal peg and reserve currency, the behaviour of the private sector dominates the internationalisation of the euro [and ALL currencies--T.C.]. The amount of financial assets managed by the private sector is many times larger than official reserve holdings. In addition, private agents usually adjust their asset management strategies more rapidly than most public sector institutions." [Given the vastness of dollar holdings, the dollar must take note of this regarding possibility of negative movements of its own--T.C.]

[Here's a nod to one of FOA's core messages--T.C.] "...a broad, deep and liquid euro area capital market may lead to a greater use of the euro through lower transaction costs. This may, in turn, facilitate the development of the euro as a vehicle currency for trade and commodity pricing."

CoBra(too)Wim Duisenberg's Speech in Calgary - and commentary by Usagold, PA and CM -#363199/9/2000; 16:39:30

- The home of the "blue eyed Sheik's" is interesting in itself (smile), though skeptic that I am, I feel after all valid and well put arguments aare to little avail. It still show's the extent of Wim D's. frustration, as he talks about the ECB's mandate of independence (amongst other wishful claims), as political motives of euro zone members gain momentum in view of the rapidly dwindling "public" acceptance (of the euro), due to the "neutral" stance to a market drive(-l)n process - not steered by CB's or political bodies(?).

- A vehicle currency for trade and commodity pricing ... IMHO- the most important message, though degenerated by the
following sentence that the euro's size will foster risk hedges in the private use of investors (after more than 25% decline since inception it may foster, or rather some contrarians using this currency as carry trade currency, like gold or formerly the yen) through diversification - ha - here's a thought - though let's sell it down some more - hey, it's only paper with a token gold money - 15% - of what?
In any case it's price stability before the long term stability of the currency Wim D. claims as his goals - as stated in his last two paragraphs - "exchange rate and conclusions."
My conclusion is - and probably we should wait for the outcome of Denmarks euro-referendum - that the EU political
aspects of today hurt the euro much more than its intrinsic, economic and buying power valuation - and that means only vis a vis the US$.
Personally I feel Europe tried to put together more than a loosely knitted economic club since soon after WWII, though the differences in all other aspects - simply said a common constitution in the sense of the french revolution, liberte', egalite' and fraternite' are what the founders of the US may have had in mind (without some of the applied atrocities) - alas as badly missed today, here and in the US of A.
As we europeans never even achieved supra-nationality, as nationalism seeps back into the system - the ECB needs political help, not meddling. So does the euro, otherwise forget the EU as a political entity, with a common currency based on DM's and/or Pesos -take your pick - I'd go for money - go gold - cb2

PS: Chrusos- Thanks for the trillion $ bet (or gamble) by LTCM - time some-one reminded us of the mathematical efficiency of Nobel Price winning scholars of leveraged gaming, where it's impossible to lose in "normal" markets.

PPS: Rigged? Manipulated? Never, anybody can do it. Providing you control the right kind of printing press!

CoBra(too)TC - on Wim D. - #363209/9/2000; 16:51:24

"Worked" on my take, take your work into sincere consideration. Remain the skeptic - ...
Rumour from OPEC meeting - starting tomorrow - "let's throw 'em another bone" - while we'll enjoy the opera - though don't kill the pianist - give him a beer - not a barrel - take two - cb2

Peter AsherCoBra(too) (9/9/2000; 16:39:30MT - msg#: 36319)#363219/9/2000; 17:07:49

Looks like your Northen brethren are jumping into the "Kicking and screaming" act also and taking a further cue from the history of the French Revolution. In the last paragraph of the below article, we see the Environment Ministry saying: "Let Them Eat Cake"
BERLIN, Sept 9 (Reuters) - German truck drivers and farmers
brought traffic to standstill in the northern town of Hildesheim
on Saturday in a protest against rising fuel prices.

Police said some 100 trucks had blocked streets in the town for
about three hours following a protest on Friday evening in the
northern town of Uelzen where 40 trucks, five tractors and five
buses had massed to mark a visit by Transport Minister
Reinhard Klimmt.

Protesters in Hildesheim had fastened placards to their trucks
with slogans such as: "Nowhere are drivers so squeezed as in
Germany" and "Oil prices are ruining us."

Klimmt, who on Friday said the government would not reduce
controversial "ecology taxes" on fuel and noted petrol was still
considerably cheaper in Germany than elsewhere in Europe,
later addressed some 100 demonstrators in Uelzen.

Opposition parties and motorists organizations have been
turning up the pressure on the Berlin government to ease energy
taxes since mass action by French protesters this week won
concessions from Paris. -----

---- Chancellor Gerhard Schroeder's centre-left government, which
rules in coalition with the Greens, plans to increase petrol taxes
by six pfennigs (2.6 U.S. cents) per litre each year through 2002
to fund reductions in state pensions contributions.

The conservative opposition warned that Germans would copy
their French neighbors and take to the streets if the government
did not cut fuel taxes.

"The government must at least forego the next step of the
ecology tax to counteract the weakness of the euro," said Dirk
Fischer, transport spokesman for the Christian Democrats.

The Environment Ministry said it understood consumers' anger,
but said the best thing drivers could do was save petrol by
driving more slowly or switching off their engines when
stopped at traffic lights or held up in traffic jams.


In addition to the factors I posted this morning there is the Welfare aspect on the continent that far surpasses the exploitation foisted upon the producers in the USA economy. Another reason for investors to be concerned with the long term purchasing power of the Euro.

"Strength in numbers" may have been the premise of creating a common currency but what I see as the operational phrase is "The whole is equal to the sum of it's parts."

Mor later, P.

LeighAn Artificial Fuel Shortage?#363229/9/2000; 17:54:00

Does anyone remember that speech by some UN lady in which she said, "We will control people by food and fuel. We make no apologies." Looks like the fuel part could be starting.

I have the quote in a book downstairs in the basement, but my foot's broken and I can't get it.

CoBra(too)P.A. - Or a chain is as strong as its weakest link -#363239/9/2000; 18:30:49

Well, here we go again - as we on this forum may perceive financial assets are way ahead of themselves - to the detriment of tangible (excluded is Silly-Con! RE et al) a/o hard assets - and we know a correction in this regard is overdue - and while this correction is already underway, we are mesmerized by artificial $-strenght - and so am I -
and don't accept reality. US vs EU - or better $ - supremacy vs all other fiat paper!
Picking only one aspect out of a multitude may be the fact that low oil or energy prices of late benefitted the relative, though rapid growth of (virtual) post industrial service economies, not levying up to 80% taxation on the most effective pollutant`in history, as Europe was and is ... financing their oversocialistic burden.
The US of A.,while on the old continent the sting of a tripling in the crude price is felt marginally-because of the huge tax buffer-, is having severe effects. In the US,
the land virtual credit to foreign labor, the high rise $
overshadows the inherent instability of an upside-down paper pyramid. - taake caare -cb2

JourneymanNo amateurs here @Ragador (9/9/2000; 6:48:55MT - msg#: 36297)#363249/9/2000; 18:52:52

"Here is an idea. I'm just an amateur at this and the idea might be naive, but here goes...
"If one could make the comparaison, it would mean that the fact that the $US always comes up on
top of other currencies does not indicate confidence in the $US, but rather an indication of a lack of
confidence in the system, that there is a problem and the $US will be the last to go." -Ragador (9/9/2000; 6:48:55MT - msg#: 36297 & 36298)
DollarEuro again

Sounds like a useful perspective to me! The only amateures are the bozos running this show -- and I don't mean USAGOLD.


tedwWhy has no one filed a lawsuit againstGATA?#363259/9/2000; 19:16:28

I read David Cohens article about GATA, and I dont find it a good defense for GATA's failure to file suit.

$200000 is plenty of money to get a lawsuit going. Lawsuits take many years and there will be plenty of time for fund raising later on if more money were needed.

If GATA really has evidence of illegal actions, they ought to take action. It hurts their credibility not to do so.

What are you waiting for Bill?

TownCrierDoes anyone buy into this?#363269/9/2000; 19:38:35

From the concluding paragraph of the Frankfurter Allgemeine article; Thursday, September 7, 2000

"It seems that to support the conspiracy theory of GATA,
statistical data are intentionally misinterpreted.
There are many good reasons that give sufficient
explanation of the low gold price, with the strong
dollar being first. The greater the value of the
dollar, the lower the price of gold."

If we recall the heights of valuation attained by gold during 1979-1980 when the international support of the dollar system was nearly collapsing (but was subsequently forestalled through sheer political will), are we to believe that the dollar has increased in strength such that gold prices could be reduced to only a third of those levels? If the dollar has gained such strength, then why have we seen the prices of everything else rise during these following 20 years?

JMB"What are you waiting for Bill?" by tedw on 9 Sept 00#363279/9/2000; 20:00:22

I hereby proclaim that tedw has been awarded the not so coveted "Asinine Question of the Month" award.
Way to go tedw! When you have a minute, could you expain the structure of the Exchange Stabilization Fund to all of your fans? If Mr. Murphy is to sue the culprits, he needs to have a firm understanding of just what he's up against.
I'm going to be glued to this screen awaiting your response.

CoBra(too)Re- tedw - #363289/9/2000; 20:08:36

Hello tedw.,
200 grand won't even cover the intial retainer for a law firm taking on FTC - though GATA is expecting your contribution - to try ... to re-establish fair and equal

Can't Sue ... cb2

Chris PowellWorld Gold Council double-Crosses its own industry#363299/9/2000; 20:10:05

Reg Howe analyzes Jessica Cross' report
on the gold loans for the World Gold
Council and finds it worse than mistaken
-- dishonest.

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

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

TownCrierSir JMB,#363309/9/2000; 20:17:31

Not very long ago, you were concerned with even the smallest hint of rudeness occurring on the forum (claiming Aristotle had been rude to Goldhunter in an event that my own scrutiny could only fail to detect), but not only have you fallen silent on championing that cause during subsequent flare-ups, we now see you lighting your own matches. What's up with that?
RSLeigh........ very sorry to hear of your injury.#3633109/09/00; 20:48:27

Wishing you a rapid complete recovery.

" ... gold is good" Another (Thoughts!)

Galearis@ 714 Oil for gold?#3633209/09/00; 21:07:16

There has been quite a lot of discussion about the Arab preferences for the form of payment for their oil exports. Has anyone actually dragged out their calculator to work out what this would actually mean for gold demand/supply? The Jamaican Accord notwithstanding (and we don't really know the details of the agreement, but suspect that it was linked to the US $ default in the early '70s and a necessary new $/gold/oil relationship). I am constantly reminded while reading these discussions of that fine David Lean movie, Laurence of Arabia, wherein Anthony Quinn playing the role of that bedouin bandit raided the "cash" box and in a rage began throwing the fiat into the air shouting, " Where is the gold!"

Let us assume that 25% of the 27,000,000 barrels of oil consumed by the world each day is paid to the Arabs (I know, OPEC is not composed of just Arab countries, but let us assume 25% for argument sake). The total world's fuel bill to OPEC would amount to $17,100,000,000 each day. There simply is not nearly enough gold for the oil market, yes? Perhaps they accept paper gold?

auspectedw & GATA#3633309/09/00; 21:26:28

YO Ted,
Slow down man, all is not quite as simple as it appears. First of all GATA is a tax exempt entity and a law suit from them is not a straight forward matter. The legal wheels ARE turning, but it will take some time. The parties that have been wronged are the ones that will have to sue and they will have to go after the mining companies & possibly a bullion bank or so that defrauded individuals. You are welcome to initiate a suit yourself and we will all be happy to reimburse you when you win. The Midas man is giving his all and we owe him our gratitude and support in any way possible. He is not holding anything back!


ETJourneyman#3633409/09/00; 21:39:36

Hey Journeyman - thanks for the series. Keep em comin! Here is a story illustrating several of your your points.

Wal-Mart told to raise prices

German officials also call end to below-cost sales of Aldi, Lidl

The Associated Press
Berlin - Wal-Mart's "Always Low Prices" were too low for strict German regulators, who ordered
the U.S. giant and two German rivals Friday to call off their price war on groceries because it could drive
mom-and-pop shops out of business.
The German Cartel Office found that Wal-Mart and the Aldi and Lidl
discount supermarket chains were selling staples such as milk,
butter, flour and cooking oil below cost on a regular basis. That
practice is illegal in the highly regulated world of German retailing.
If allowed to continue, office president Ulf Boege said, such a policy
could push smaller stores out of business, clearing the way for the
big guys to raise prices in the future.
"The material benefit (of below-cost pricing) to consumers is marginal and temporary, but the restriction
of competition by placing unfair obstacles before medium-sized retailers is clear and lasting," he said.
Not everyone shopping at Berlin's freshly remodeled Wal-Mart superstore was happy to have the
government looking out for their long-term interests, though.
"Life in Germany is expensive enough as it is," said Franz Roth, a 52-year-old locksmith buying the
weekly groceries with his wife, Gabi. "When the likes of Wal-Mart come along and force the others to
pull down their prices, that's a good thing."
Smaller shops have it tough, they conceded, but they blamed the tax man for forcing them to pinch
"It's the government's own fault," Gabi Roth said. "They take so much from us in things like gas tax that
everyone has to look out for themselves."
Wal-Mart, which has been working to establish a foothold in Europe's largest market, said in a
statement from its German headquarters that it would "orient" its pricing to comply with the law.
"However, we still remain committed to lowering the cost of living in Germany by offering our customers
the best quality products at the lowest possible prices," it said.
Aldi and Lidl had no immediate comment.
At a news conference in Bonn, Boege said he had given notice to the three companies Thursday and had
threatened them with fines of up to $445,000 for noncompliance.
He said he was not interested in setting up "protective fences" for small stores.
"To me it's more about seeing that independent companies are not pushed out through the unjust pricing
strategy of big companies with superior market strength," he said.
The German Retail Trade Assn. greeted the decision as a "hopeful signal for the end of the ruinous
cutthroat competition."
Wal-Mart, the world's largest retailer, has shaken up German retailing since it acquired its first small
chain of stores in December 1997. It has invested heavily in remodeling the stores to make them more
"consumer-friendly," hiring more personnel to improve in-store service and upgrading inventory tracking
Wal-Mart, which has more than 2,500 stores and supercenters in the United States, has built a network
of 95 stores in Germany and has 240 outlets in Britain following last year's takeover of supermarket
chain ASDA Group.

Rockgrabber(No Subject)#3633509/09/00; 21:43:05

Galearis there is enough Gold to be traded for oil no matter what it goes to in realtion to dollars, if the price of gold was worth way more dollars. All it is is Gold is just mispriced. Its just funny the dollar has been able to buy this much gold for these few dollars. I wonder if it is over? NOT YET PLEASE... I need more time to get more gold at this price.
Chris PowellA lawsuit by GATA#3633609/09/00; 21:50:25

To reply to Ted's question about why GATA
has not yet filed a lawsuit against the
manipulation of the price of gold....

Money is probably the biggest part of it.

While we have raised about $200,000, most
of that has been spent on our law firm's
retainer, advertising, publicity, research,
and travel expenses over the last 20 months.
GATA's officers receive no salary or
director's fees. We do everything for free.
But the rest of the world doesn't work that

I make no apology for this; it is what had
to be done and it is what has brought us to
where we are now: The only organization in
the world fighting every day for the gold
cause and bringing that cause to the
forefront. Without GATA, the world would
know much less about the gold market than
it knows now.

We increasingly believe that the U.S.
government is behind the manipulation,
and that complicates the legal options.

In any case, whether we're suing the U.S.
government or an investment house, we're
going to need a good deal more than what
we've raised. I think that maybe a million
dollars would be necessary to get started.
I also think that the industry itself could
raise that money and a little more for
political lobbying and, with that much
money, probably put an end to the scheme
against gold in a few months. But
increasingly I think that the industry
doesn't WANT to challenge the powers against
it; I think the bigger gold mining companies
are either in on the scheme, short more
gold than they're letting on, or just too
damned scared of the government and
financial powers aligned against them.

I hope that all people who have advice for
GATA also have contributions for us or at
least some advice for the mining industry
and the companies in which they are
invested. We've done a lot but we need
help; we're doing what should be the job
of others, and we're doing it for free.

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

Canuck(No Subject)#3633709/09/00; 21:52:19

Just read the latest article from Gata.

I was a little sceptical last week regarding the new NEWS from an unknown named Jessica Cross. If Ms. Cross is /was an expert in the gold industry before 'yesterday' why have we not heard from her before?

Now , Mr. Howe, Bill, Chris, Frank and a host of knowledgeables have kept us up to date for a couple of years now. Where would one place there bets?

Now, I'd like to hear from Ms. Hauroka (sp?, sorry; chairperson/WGC) to verify/elaborate Ms. Cross's findings?
A little over a year ago Ms. Hauroka was appointed chairperson of the WGC and gold advocates were hopeing/anticipating good things from the World Gold Council but it did not materialize. Perhaps Ms. Hauroka (I again apologize for the spelling) should clarify the gold 'short' position or resign.

The gold 'short' position, as I stated within the last week, can be any number depending on whom one asks. Allegations of bias now run rampant. The recent gold 'wing-ding' in Paris brought out figures of a 'universally' accepted number of 4,750 tonnes short. The pro-gold world had, up until that point, been talking of 14,000 tonnes short.

Now, it is very evident that one of two things exist.
a) Some of the gold 'analysts' don't have a clue what they are talking about or
b) Some of the gold 'analysts' are crooked and have been 'bought'.
The statistical variance of 4,750 tonnes short and 14,000 is nearly 300%.

Now, I am John Doe with a couple hundred dollars invested in gold and I can see that all of you clowns are beyond belief. Your stories swing 180 degrees nearly day to day.
Get your act together, it is almost amusing, no wonder no one invests in gold.

When I was 19 years old I sweated my butt in Red Lake Ontario mining gold for a couple years watching fellow buddies toil and bleed. I saw a boulder the size of a tractor-trailer fall on a man, he was carried out in a pail so don't tell me that gold is worth $275 an ounce.

I respect the fact that mining is a business and profits dictate viability and future endeavors but for the sake of intestinal fortitude go under the earth several miles and ask a South African miner why there isn't enough 'margin' to solidify thousands of tonnes of granite above his head with rockbolts. Walk a mile in his shoes and then change your undergarments.

Now, I don't really understand gold 'shorts' and Central Bank sales and leasing but I do understand a simple fact. Guys like Reg Howe and Bill Murphy aren't chasing this gold issue because they are bored. There is an issue. Are The World Gold Council and Gold Field Mineral Services providing accurate information? Who are funding these organizations? I am not accusing, I am asking questions.
Why is these a 300% discrepancy in the numbers?

Who is right, who is wrong and who is a damn crook?

World tensions are escalating, monetary policy is becoming more clouded and the BIAS is becoming more evident each day.

I urge responsible citizens, politicians, corporations, and lawmakers to end this facade, this orgy of blatant and obvious 'fiat' management and bring this world to order.

Your children are going to die and you will be blamed, tried and convicted in a court far beyond your wildest imaginations.

CMGold for Oil#3633809/09/00; 21:54:58

Greetings to all the wise and insightful posters, from a long-time lurker.

I would like to add my two cents worth to the "Gold for Oil" discussion. In order to invest in gold, don't you need to have a "surplus" of income over expenditures? I believe that most of the OPEC members need all their income for current expenditures (defense costs, government expenses, welfare programs, payments on existing debts, and so on).

If they don't have any surplus funds to invest, then they aren't going to be buying much gold are they?

Just a thought.

JMBTownCrier and rudeness#3633909/09/00; 22:02:56

TedW's question (attitude) irked me. I'm easily irked on Saturday night. Please see AUSPEC's msg # 36333, focus closely on the last two sentences.
Bill Murphy deserves our admiration and respect, not some cheap shot from afar, Sir.
P.S. So where's the answer to my question. Perhaps you would like to fill in for TedW, no?

GoldflyHey Cannuk, this is from last year......#3634009/09/00; 22:12:19

USAGOLD (9/29/99; 15:23:28MDT - Msg ID:14902)
Question of the Day....
"This is really one of the most unhappy times for the market I have ever seen," Jessica Cross of Virtual Metals Research
and Consulting told Reuters.

Virtual Metals? What have we here? And what an odd comment. Care to elaborate, Ms. Cross?


I remember reading the article the quote was taken from and thinking along the same lines as MK...... But I cannot remember where I read it.

Virtual Metals! What a gas.


Peter AsherEuro Controversy#3634109/09/00; 22:25:55 t/00/9/10/nmag10.html

And while your at it Maggie, ask him about the Gold.

>>>> BARONESS THATCHER accused Tony Blair of seeking
to "abolish Britain" in a speech in which she also said that
Michael Heseltine was a "non-Labour fellow traveller" for
supporting a single European currency.

She said: "The Prime Minister and his Government know
that on this they must win. For unless they abolish sterling
they will never attain their wider goal of abolishing Britain
as a distinct, self-confident, independent nation. The Prime
Minister can claim until he is blue in the face that the
decision all depends on economic criteria for convergence
but this is nothing more than a cynical and ever more
transparent ploy."

Al FulchinoRe TedW's post#363429/9/2000; 23:13:40

Boy some feathers got ruffled. But why? Oversensitivity, I would suggest. And if it isn't, then just let GATA answer the man and let the chips fall for all to see and read. Lets face it, how many times can one cry wolf, before people want to see one. I personally think GATA is a fair group and more than well intentioned. But surely Ted's question is a good one and airing out just why GATA hasn't sued, is good for all its supporters to know.
Black BladeA short Darwin award nominee to lighten the mood.#363439/9/2000; 23:14:36

Just back from my road-trip.

Police said a lawyer demonstrating the safety of windows in a downtown Toronto skyscraper crashed through a pane with his shoulder and plunged 24 floors to his death. A police spokesman said Garry Hoy, 39, fell into the courtyard of the Toronto Dominion Bank Tower early Friday evening as he was explaining the strength of the building's windows to visiting law students. Hoy previously had conducted demonstrations of window strength according to police reports. Peter Lauwers, managing partner of the firm Holden Day Wilson, told the Toronto Sun newspaper that Hoy was "one of the best and brightest" members of the 200-man association.

- I think this guy should win, not only because he removed some incredibly stupid genes from the pool, but he also eliminated a lawyer in the process... :] (best and brightest? whatever does that say about the rest of them?)

Al FulchinoLeigh, some light reading while you stay off your legs/wriiten by my wife#363449/9/2000; 23:16:33

Ode to General George P. Goose

At 3:00 a.m. I awoke to one startled squawk, and then silence. I heard Lassie get up with his stiff joints causing him to struggle to get to his feet. He didn't bark, I listened and I could hear him go down the sidewalk, but he came back and didn't make a commotion. In the past I had heard that kind of squawk and awoke to find everything fine. But this morning I awoke to the loud call of the Canadian Geese. Cousins to General George P. Goose, from a foreign country. In the past they would visit, but he remained segregated from them since they were not of his nationality. I watched as they did a fly by in V formation, dipping their wings in memory of the fine General. They already knew, what I would soon discover. A thief in the night had slipped in and abducted and murdered the "Lil General". That squawk I had heard was the final word from a war scarred hero! Neither rain, sleet, snow, nor dark of night, would keep the "Lil General" from his patrols! For years he had faithfully done his job, guarding "his" vehicles! No matter where he had to travel to get to them, you could always count on him to be faithfully marching around on watch. No one got past him, without him sounding his alarm! What a fine alarm he had, it could be heard for nearly a mile! And should you try to take one of "his vehicles" he would valiantly give chase, as fast as his little legs would go, till he just couldn't run anymore! After all the injuries his arthritis had slowed him down a bit, and his sight was mostly gone since the accident this summer where he got sideswiped by someone taking his truck! The "Lil General" did indeed have 9 lives, for he lived through 9 horrific accidents that would have done any normal Gander in. But not the General, he withstood being run over 8 times, survived an attempted abduction by a fox, stumbled around blind for weeks after his last accident. Where because he couldn't see he would wander off and end up 2 or 3 houses away… trying to follow the sound of his trucks so he could still do his job! Somehow some of his sight miraculously returned, if only partially, and there he was back on the job again. He had to keep turning his head as he could only see out of one eye. No matter how many times the man of the house would run around behind him swearing at the mess he was leaving all over his driveway, sidewalks, garage and porch! No sir, nothing kept him from doing his job. It has been rumored that the accident that caused the General to lose his sight might have been from one of those familiar tirades from the man of the house. But no one was ever able to prove it.

Labor Day, was the last Holiday the General celebrated. He came up on the porch with us to watch the fireworks that the neighbors put on. Al said he came up because he was afraid, but I think it was because he is so short he was not able to see the fireworks over the bushes. We have a picture of that and will keep that as our last memory of the "Lil General". Bruno won't have anyone to chase anymore, Lassie won't have anyone to guard. No one is blaming Lassie for not protecting the General last night, after all Lassie doesn't see or hear as good as he used to. Plus with his arthritis his reaction time is delayed. And Bruno, well, Bruno slept right through it, Bruno sleeps through everything!
No the old place won't be the same after 11 years of waking up to loud honking every morning, 11 years of making sure he was fed and watered and warm. Several years of trying to dodge Goose shit while maneuvering to the garage or the front door. Then there are the good memories, of the General attacking Marie's book bag when she was going to school, of watching Marie run when she was younger because she was afraid of him. Then seeing her mature and realize that she could indeed get away from him, and conquer her fear. The memories of watching a lovesick goose follow Jeffrey wherever he went, honking in unison with him as he beeped the horn on his truck. As the boys grew up it became hard for the General to discern between Jeff and David so he would run with great excitement whenever he would see either one of them, hoping to spend some time with them. And at the very least hoping they would leave their car or truck parked long enough for him to guard it for them. He never charged them a dime for all the hours he logged marching around those vehicles. In memory of the "Lil General" we will have a plaque made to put over his stall with his name:

General George P. Goose
(Little General)

Nine stars for his nine battles, done in red, for that was his favorite color. When the plaque is done we will hold a memorial service for him. Eleven years of fond memories and some not so fond. The Little General was special and deserves to be recognized. He will be missed.

Labor Day Fireworks, the Little General was trying to keep David from being scared!

Al's note: There will really not be any ceremony. <smile>

Al FulchinoLeigh#363459/9/2000; 23:18:01

Leigh I couldn't post the pic so the end about the fireworks is out of place.
Peter AsherAlright, Black Blade, since you opened up the subject.#363469/9/2000; 23:38:17

A very successful lawyer parked his brand-new Lexus in
front of his office, ready to show it off to his
colleagues. As he got out, a truck passed too close and
completely tore off the door on the driver's side.
A poice officer ran over and the lawyer started
screaming hysterically. His Lexus, which he had just picked
up the day before, was now completely ruined and would
never be the same, no matter what the body shop did to it.

When the lawyer finally wound down from his ranting and
raving, the officer shook his head in disgust and disbelief.
"I can't believe how materialistic you lawyers are," he
said. "You are so focused on your possessions that you
don't notice anything else."

"How can you say such a thing?" asked the lawyer.

The cop replied, "Don't you know that your left arm is
missing from the elbow down? It must have been torn off
when the truck hit you."

"My God!" screamed the lawyer. "Where's my Rolex?"

The Invisible HandSaturdays ...#363479/9/2000; 23:52:43

... used to be prolific FOA-days during the weeks when he's teaching us.
This week seems to be different.
Is it then really true that something big is brewing for the upcoming days? An announcement today in Vienna, the capital of one of the 11 euro-countries?

The Invisible HandSaturdays ...#363489/9/2000; 23:55:22

... used to be prolific FOA-days during the weeks when he's teaching us.
This week seems to be different.
Is it then really true that something big is brewing for the upcoming days? An announcement today in Vienna, the capital of one of the 11 euro-countries?

The Invisible HandSaturdays ...#363499/9/2000; 23:55:46

... used to be prolific FOA-days during the weeks when he's teaching us.
This week seems to be different.
Is it then really true that something big is brewing for the upcoming days? An announcement today in Vienna, the capital of one of the 11 euro-countries?

The Invisible HandSaturdays ...#363509/9/2000; 23:57:04

... used to be prolific FOA-days during the weeks when he's teaching us.
This week seems to be different.
Is it then really true that something big is brewing for the upcoming days? An announcement today in Vienna, the capital of one of the 11 euro-countries?

Black BladeOK Peter, that's good!#363519/9/2000; 23:58:26

A few surgeons were discussing the merits of working on different people. One said the best patient is an electrician; all of their organs are color-coded. "No." said the next. "Librarians insides are catalouged and indexed!" "You're both wrong!" said the next doctor. " Lawyers are the best. They are gutless, heartless, spineless and their heads and asses are interchangeable."

Sorry, but I've been working with a couple of those Canadian snakes for the last couple of days and it starts to rub off on ya ;-)

The Invisible Hand(No Subject)#363529/10/2000; 0:02:58

My apologies

for the quadruple posting
tedwGATA#363539/10/2000; 0:05:00

Re Chris Powells post:

I didnt say that GATA was a bad group. I didnt say that it was in it for the money.

Chris, if money is the problem, isnt it just as good a
plan to sue and then have fund raising?Especailly since GATA has a law firm on retainer. Certainly the initial pleadings are not the major expense.

During the American revolution there were many who said we couldnt fight the British because they were too strong and we were too weak. Patrick Henry answered them quite well by saying that God would raise up friends, and that the battle is not only to the strong.

Perhaps if GATA had the faith to act, God would raise up friends?

Now, if this post makes me a bad guy, I guess im a bad guy.

Peter AsherOK Black blade one more time #363549/10/2000; 0:21:51

(I'll take a cue from that JMB fellow and say I get compulsive joke telling syndrome on Saturday night.)

These are actually from a post back in November

Lawyer has a plumber in to fix pipes, plumber charges him $120/hr. Lawyer howls "I only make $90 and I'm a lawyer", Plumber says "That's all I made when I was a lawyer!

There was a small town in frontier days that legal services. To entice an attorney to set up a practice they advertised a free home and office. After 6 months the lawyer says "Even with the free homestead there is not enough business in this town for me even purchase food lamp oil and firewood I have to return back east." The locals have a long town meeting discussing the dilemma and finally come to a solution. They run another ad and hire a second lawyer!

The Invisible HandThe Coming Global Oil Crisis Homepage#363559/10/2000; 0:22:18

The Coming Global Oil Crisis Homepage The Coming Global Oil Crisis Homepage Haven't seen this posted.
Peter AsherTypo's#363569/10/2000; 0:27:28

Add the word needed, a comma and a period and it's readable---

There was a small town in frontier days that needed legal services. To entice an attorney to set up a practice they advertised a free home and office. After 6 months the lawyer says "Even with the
free homestead there is not enough business in this town for me even purchase food, lamp oil and
firewood. I have to return back east." The locals have a long town meeting discussing the
dilemma and finally come to a solution. They run another ad and hire a second lawyer!,

Black BladeOil and Inflation#363579/10/2000; 0:29:45

Decent short and concise article on oil and NG. OPEC can pump more oil all they wish, at least up to the 5% exces capacity that is in Saudi's oil fields. Then the question is: Where are they going to store it? What refinery is going to load up on oil if there is a risk that the price will drop? With the lack of refinery capacity, what does it matter if more oil is produced when the same amount of end-product reaches the market? Anyway, the article found at the "other" site is worth a read.
Peter AsherThe Invisible Hand (9/10/2000; 0:22:18MT - msg#: 36355)#363589/10/2000; 0:31:40

Good find! Arcives by topic are greatly welcome.
Black BladeAlright, looks like we started something here.#363599/10/2000; 0:33:38

Q: What's the difference between a dead lawyer lying in the road, and a dead skunk lying in the road?

A: There are skid marks in front of the skunk.

Q: Why won't a shark attack a lawyer?

A: Professional courtesy.

Peter AsherBlack Blade (9/10/2000; 0:29:45MT - msg#: 36357)#363609/10/2000; 0:36:36

It shoul matter because, like Gold, Oil prices are influenced by the paper futures market. the fact that refinary supplies can rely on the supply line not running dry will hold the price down somewhat.

gasoline and Heating Oil will be effected the most by tapped out storage and reining facilities. But again, to some degree molified by the added certainty of future supply.

IMO, of course.

Peter AsherTypos again#363619/10/2000; 0:39:21

It should matter because, like Gold, Oil prices are influenced by the paper futures market. the fact
that refinery supplies can rely on the supply line not running dry will hold the price down

Gasoline and Heating Oil will be effected the most by tapped out storage and refining facilities.
But again, to some degree mollified by the added certainty of future supply.

Peter AsherBlack Blade#363629/10/2000; 0:44:30

Now that we're back on subject, I'm turning in. Even though it's "Casual Saturday Night", I'm working a daylight schedule. See you tommorow.
The Invisible Handmore oil links#363639/10/2000; 0:54:33

If you click on the first page of today's London Sunday Times on the second article in the oil column 'Opec will open taps to curb oil price' you will fi'd all these links - Organisation of the Petroleum Exporting Countries website includes speculation on the cause of oil market volatility - Website devoted to 'The Coming Oil Crisis'. Includes an interview with Saudi Arabia's Sheikh Ahmed Zaki Yamani who argues that OPEC is accelerating the end of the oil era - International Energy Agency. Features highlights from the oil market report in PDF format (dated August 9, 2000) - OECD report on Energy in the 21st century: The return of geopolitics? - Petrol pricing - key quesions and answers

Black BladePeter, I hope to take on the subject in greater detail in the future, but.......#363649/10/2000; 1:07:13

Normally I would agree. However, oil unlike gold can only be stored in a limited number of locations. Refineries don't want the liability of an asset that could decline in value, so they will not likely store excess oil in their tank farms. Not to mention paying the inventory taxes on stored oil. At some point, the "excess oil" has to back up somewhere. I suspect that that somewhere is on Saudi (and other OPEC) shores. The resulting stagnant and even declining API inventory numbers will likely push prices higher again. Another aside, there has not been a new refinery built in the US since the 1970's because of EPA regulations and political opposition. The "on-stream" petroleum supplies will simply get tighter as demand continues to grow. I hope to tackle the M. K. Hubbert curve peak and the continuing demand curves at some point in the future, but like you, it has been a long day (week) and I must get a few hours sleep.
Rockgrabber(No Subject)#363659/10/2000; 1:52:32

There seems to be no doubt, that there is a fine line, as to how high to make oil prices,(For Opec) before they make them so high, that they really curb demand for there product. So much so, so high of a price, that they actually accelerate, to much so, the demand for alternate fuel supplies becomes to much sought after. (I cant even figure what I was saying there myself) I guess in otherwords you dont want to push prices so high that you push yourself out of business. How high of a price is that at current? Dont even try to anser that cause right now we dont know.(Unless you know please anser)..(( hahhahaha, actually mayber you do though)). But man, I sure hope we are going to find out. And OPEC better not wait to long before the world knows how important its oil is. Actually its not OPEC that made the demand so high, its its buyers. Its the payers for the oil that make the price high, not the producers. If the payers dont like the price dont buy it, if the producers dont like the price they are getting dont sell it. That is simple I suppose... Thats supply and demand. Oil is worth more then they get, only if the dollars they get cant buy this much gold. Does that make sense? But as long as they can trade this few dolllars for this much gold... Why heck, keep this ball rolling. You hear me OPEC?? That is it I am going to go E-Mail them. They cant stop now they have to easy of a way to get them GOLD. Does this sound funny? I hope it does.
Rockgrabber(No Subject)#363669/10/2000; 1:54:50

Its an early Saturday night for me.. I hate these nights. Why are the markets not open I feel like trading.
TopazMore Grist for the Mill - courtesy SlangKing @ Kitco#363679/10/2000; 4:07:53

This summer, while motorists in America howled in protest at the cost of petrol, the Saudis were protesting that they could not find buyers for their cargoes. Shortage? they said. What shortage?

What was not said was that the Saudi oil was flowing the other way. The Saudis sell a heavier and dirtier crude that is ill-suited for refineries producing petrol for US motor cars. It is true that Saudi Arabia is the biggest producer of crude oil, speaking for more than 10 per cent of world demand. But contrary to popular belief, its natural market is not Europe and the US but the Far East, where the heavier crude is used in power stations and factories.

As Leo Drollas, of the Centre for Global Energy Studies, puts it: "There is no global shortage of oil. There is a shortage of the right kind of oil product in the right place."

Canuck@ Goldfly, All#363689/10/2000; 5:26:40


Thanks for the message, very interesting!!

Went back the day and the day before; could not find what M.K. was referring to. Any way that you could dig up the article?

This 'link' takes you to an intro. to Virtual Metals, click on 'more' to access Virtual Metals.



Canuck@ Goldfly, All#363699/10/2000; 5:40:15

Direct to 'Virtual Gold'. Membership for one year is 1,440 pounds.

Was looking for 'Jessica Cross' articles; she has a couple new posts on their 'Good Delivery Bar & Cafe' forum; although no access to opinion. Cannot access Jessica Cross by name (using their search engine) after 1998??

'What's New' appears interesting; again no access.

Maybe you or someone else can dig up some more info.

WAC (Wide Awake Club)Ecuador switches to US dollar#363709/10/2000; 5:43:13

Ecuador is saying goodbye to its currency, the sucre, which is being replaced by the United States dollar.
Long queues have been forming outside banks as people exchange their sucres before Saturday night when the dollar will become the sole currency.

President Noboa: Policies have brought semblance of stability

The currency change was introduced to try to control Ecuador's economic crisis - the International Monetary Fund (IMF) has warned that inflation this year could reach 100%.

Since the dollar began to be introduced in April, some confidence has returned to the country's financial institutions and the government says this shows that its strategy is working.

Central bank president Jose Luis Ycaza said on Friday the change would usher in an era of "stability, confidence and economic recovery".

Central bank president Jose Luis Ycaza said on Friday the change would usher in an era of "stability, confidence and economic recovery".

Most notes in circulation are already dollar bills and the government is importing new coins which have the same weight and value as US cents but an Ecuadorian design.

But some people still regard dollarisation as an affront to national sovereignty.

A wave of protests over the move contributed to the overthrow of President Jamil Mahuad's government last January.

False remedy

A short-lived civilian military junta was taken over by senior military officers who quickly installed vice president Gustavo Noboa, a 63-year old law professor, as president.

Mr Noboa, Ecuador's fifth president in three years, vowed to maintain his predecessor's policies.

Correspondents say he has succeeded in bringing a semblance of stability to the nation.

Advocates of the changeover to dollars say it can put developing economies on a fast track toward stability and economic growth. Some US economists believe other Latin American countries should follow Ecuador's example.

On Thursday, the IMF praised the changeover, saying: "Dollarisation ... has proceeded rapidly (and) has calmed the financial markets."

Detractors, however, say that it is a false remedy that attacks the symptoms, but not the root of economic problems.

The new currency is just one of many sectors where reforms have been ushered in.

Under a $2bn, three-year agreement with the IMF, Ecuador drastically cut petrol subsidies earlier this year.

The IMF said however that the government in Quito needs to impose a tight fiscal policy "for the foreseeable future," to reduce the public sector deficit, which stood at 7% of gross domestic product in 1999.

The Invisible HandFAZ - Schroeder - FOA --- wild speculation by the Invisible Hand on Schroeder's currency gaffe#363719/10/2000; 5:48:10

On this slow Sunday evening (for me) allow me to speculate that Schroeder made his gaffe in order to take full advantage of the two first FAZ articles for the first stage of the A/FOA scenario (oil for euro) to unfold today in Vienna.

This is again from (the business section's "Euro Watch" article) of today's London Sunday Times)

Currency gaffe by careless Schröder

CARELESS words can be costly, particularly when they come from Germany's leader. Remarks by Chancellor Gerhard Schröder, who said the weak euro "should be more a reason for satisfaction than concern", helped plunge the currency to a new low of 86 cents. Analysts said his remarks underlined growing tension between some European politicians and the European Central Bank, which has raised interest rates steadily - the latest being the August 31 rise from 4.25% to 4.5% - to head off the inflationary effects of the euro's fall.

Tony Norfield, head of foreign-exchange research at ABN-Amro, said Schröder's comments were inexplicable. "Doesn't he realise further euro weakness will mean higher interest rates?" he said. "Is he advocating a weak currency to offset the impact of the recent rate hike? The ramshackle credibility of the euro is left even worse off."

WAC (Wide Awake Club)@Leigh - Artificial Fuel Shortages#363729/10/2000; 6:04:59

This would be an opportune time to introduce €/barrel as opposed to $/barrel. Why should the europeans continue to chase $s in order to secure their oil. I think you have a good point.
Black BladeOther Reasons Higher Petroleum Prices are on the Horizon#363739/10/2000; 6:34:15

Omnibus energy bill

Also in September, the Senate is unlikely to pass an omnibus energy bill drafted by Senate Republicans. The goal of the legislation is to decrease US dependence on oil imports from 56% now to 50% by the year 2010. The bill would allow leasing on the coastal plain of the Arctic National Wildlife Refuge in northeast Alaska and let states assume the regulation of federal oil and gas leases. The bill permits producers a tax credit of up to $3/bbl or 50 cents/Mcf to prevent low prices from causing marginal wells to be shut in. And it would let producers expense their geological and geophysical costs for wells, and expense delay rental payments when they defer drilling. Senate Majority Leader Trent Lott (R-Miss.) said he would bring the bill to the Senate floor in September.

Black Blade: Delays the inevitable.

ANWR monument

This fall President Bill Clinton could designate the Arctic National Wildlife Refuge coastal plain as a national monument. Rep. Don Young (R-Alas.) has asked Clinton to confirm or deny those rumors. Young is chairman of the House Resources Committee, which has jurisdiction over federal lands. Clinton reportedly is considering using his powers under the 1906 Antiquities Act to declare a monument on ANWR's coastal plain, preventing any future development. The coastal plain east of Prudhoe Bay field is believed to contain large oil reserves but cannot be leased unless authorized by Congress. Young said the Alaska National Interest Lands Conservation Act mandates that only Congress can designate monuments, wilderness areas, and refuges on
federal lands in Alaska.

Black Blade: Billy Clinton denied to Utah officials and congressmen that the barren desert "Escalante Staircase Monument" was to be created until the day he did it. He won't even be as considerate to Alaskan officials or congressmen either. Who needs states rights anyway - right? That pesky 10th amendment won't get in the way of legacies or dictatorial decrees.

Heating oil reserve

By October, the US Energy Department will establish a temporary 2 million bbl northeastern US home heating oil reserve. President Bill Clinton ordered the action, and also asked Congress to create a permanent heating oil stockpile and set terms for its use. DOE has accepted bids for the tankage and supply of the 2 million bbl reserve. Winning bidders will be paid in crude oil from the Strategic Petroleum Reserve site at West Hackberry, La. Meanwhile, Energy Sec. Bill Richardson has assured New England heating oil distributors the reserve will only be used for emergency purposes and not price manipulation.

Black Blade: Too little, Too late.

Hydraulic fracturing

This fall, the US Environmental Protection Agency will be drafting a study on the environmental risks of using
hydraulic fracturing to produce methane gas from coal beds. The 11th Circuit Court of Appeals has ruled that EPA must regulate coal bed fracturing in Alabama as part of the Safe Drinking Water Drinking Act's underground injection provisions. EPA said it has received complaints from environmental groups that coalbed methane wells have contaminated drinking water supplies elsewhere. Although the EPA study will focus on coalbed fracturing, it also will accept comments about fracturing associated with other types of gas production.

Black Blade: Another delay and the NG situation becomes more critical hour by hour. The risks are practically non-existent, but what the hell. Why not.

Wilderness roads

In the fall the U.S. Forest Service will be reviewing public comments regarding its proposed a ban on road construction in nearly a quarter of the 192-million-acre National Forest system. The proposal covers more than 54 million acres of inventoried roadless areas. It would allow forest managers to propose additional protection for the inventoried areas and other smaller roadless areas through local forest planning processes. The Independent Petroleum Association of America said, "The nation needs more access, not less, to areas of this country where oil and gas may be found." House and Senate committees have held hearings critical of the

Black Blade: This ban will eventually be overturned as millions of US Americans are forced to pay higher gasoline prices, are shivering in the dark in coming winters, and demand the "Government do Something".

Smog/soot appeal

This fall the US Supreme Court is due to hear arguments in a case challenging the Environmental Protection Agency's 1997 smog/soot rule. The court has broadened the case to consider whether the agency should have considered the economic costs of the regulation. The court previously had agreed to consider whether EPA exceeded its legal authority in drafting the regulation to reduce ozone and particulates emissions. The rule affects refineries as well as other oil industry operations. In a case brought by the American Trucking Association and supported by oil groups, the District of Columbia Court of Appeals ruled last year that EPA had failed to show that public health protection considerations justified the tougher rules.

Black Blade: Precedent setting maybe?

Diesel sulfur

By December, the Environmental Protection Agency plans to issue a final rule to cut the sulfur content in diesel fuel 97% from the current 500 ppm to 15 ppm. It said diesel must be significantly cleaner-burning to ensure that truck and bus pollution control technology is effective. The American Petroleum Institute warned EPA that the rule will cause shortages. It said, "The refining industry is unable to produce sufficient 15 ppm sulfur diesel, nor can our distribution system supply it across the country."

Black Blade: Truckers already are protesting higher diesel prices. Where are the Teamsters and AFL-CIO on this? No where to be seen as they are kissing up to the beautiful people in Hollywood and Washington.

FTC investigation

Late this year, the US Federal Trade Commission expects to conclude its investigation into last June's Midwest gas price increases. In an interim report to Congress, FTC said possible causes of the spikes included higher crude oil prices, the introduction of Environmental Protection Agency rules for summer-blend reformulated gasoline, and pipeline delivery problems. It said, "Although it is likely that each of these supply factors contributed to the dramatic recent price spikes in the Midwest, no single factor appears from staff's preliminary investigation to be likely to provide a full explanation, and staff does not yet have sufficient information to assess the impact of these factors in combination." FTC said it is also looking for possible illegal "collusion or tacit coordination."

Black Blade: Yep, the Big Bad Oil Companies did it. I'm sure that some politically correct excuse will come about, or that maybe this will quietly be swept under the rug. The higher petroleum prices earlier this year were just a "warning shot".

France to make oil industry pay for high fuel prices

Paris has found a way to make France's oil industry, in effect, pay for the high fuel prices that are wreaking havoc in the country. Suffering from strikes by truckers and farmers hit by high diesel oil prices, not to mention general consumer discontent, the government is asking the oil industry to contribute to the 2001 national budget in order to make up for a 30% tax cut it has decided to grant on domestic fuel oil. The government's offer of a tax cut, plus other measures, has been rejected by truckers and farmers as insufficient, however. Taxes on oil products in France range from 68% of fuel prices for diesel to around 75% for premium gasoline. The striking laborers have blockaded some 50 fuel depots and refineries in the country in protest over high diesel prices and high taxes on oil products. If the strikes continue, they could have serious consequences on fuel supplies in many areas of France. The 3.5 billion francs that France's oil industry must contribute to the 2001 budget to make up for the 30% fuel oil tax cut was described by Finance, Economy, and Industry Minister Laurent Fabius as "an exceptional contribution." Industry is wary of such terms, however, as the last windfall profits tax levied on it -- also described as "exceptional" -- lasted from 1982 to 1999. Industry is bitter about the new contribution, which is being levied in a particularly roundabout and technical way. Both the oil field depletion allowance and the price increase allowance on accounting profits linked to variations in stock prices are affected -- the former to be fully scrapped and the latter to be diminished by 20%.

Black Blade: More brilliant ideas brought to the people from the government.

Meanwhile, OPEC says OK to 500,000 to 750,000 bbl increase per day. Ho Hum. Oh well, only about 200,000 bbl capacity left, and demand is still rising.bbbb

UsulJessica Cross#363749/10/2000; 6:47:11

'98 06/28:
"JESSICA Cross, a highly respected voice in the global gold market, chaired the last session of the Financial Times 21st World Gold Conference..."

"A South African, Cross runs her own consultancies, Crosswords Research and Consulting and the Internet-based Virtual Gold commentary and database..."

"Despite Cross's exhortations, none of the central bankers among the delegates rebutted the accusations..."

UsulJessica Cross#363759/10/2000; 6:49:11

A Watershed in Central Banks' Role in the Gold Market?
by Timothy Green

"...After the FT's Barcelona Conference, I asked Dr. Jessica Cross, Director of Crosswords Research and Consulting, who chaired the second day, if she detected a new, more encouraging mood about central bank participation. "I believe the hump of central bank sales is over," she said. "And if central banks could now move off center stage and operate on the management of their gold more like fund managers, then the hedge managers of the U.S. funds themselves could `read' the market much better. And then, beyond the millennium, a much healthier, more stable gold market will emerge." "

UsulJessica Cross#363769/10/2000; 6:51:57

The Indian Express, Friday, June 26, 1998

"...Cross, director of Crosswords Research and Consulting and a self-acknowledged gold bear..."

auspecMultiple Prices of Gold#363779/10/2000; 7:47:02

I am somewhat intrigued in regards to the price at which a mining co. can sell their product via futures|hedging. It is my understanding that a hedge POG can be considerably higher than the spot POG, say even $100 or more per oz. Is this correct?
The question follows- why exactly would a bullion bank pay $375 for an entity that he could get on Comex for $275? I understand the time & risk factors involved as well as the purposes of a legitimate hedge, but this premium is well in excess of these variables. Clearly there is not access to sufficient gold on Comex for all purposes. The BBs are in essence saying [like Wimpy] "I'll pay you $375 Tuesday for an ounce of gold today".
Should we not follow the POG via hedging as closrly as we follow the spot market? Which method does larger volumn?
A couple comments,& then hope to be directed by the "pros" w deeper answers and/or directions to previous commentary. The BBs want funds in order to utilize their lucrative "carry" trade as well as make the potential profits they have been assured of by their influential friends/politicos. So they are willing to pay up to have this access. They would rather make an agreement with Buttocks Gold than bid in a "free" market & drive up the price. This process only works when everyone, CBs, BBs, Politicos, $ mining cos. all gain something from this deal. Control is at issue & a lower POG on COMEX, which is on everyone's radar screen, certainly helps the Dollar, confidence, etc.
The mining cos. are getting sweetheart deals that can look great at the time, but they risk their souls in the process and sell out their shareholders. In essence thew are now "owned" by these masters who may desperately need them in the future & will not hesitate to call in some chips.
The oil for gold premise could help explain the higher POG w hedging as these recipients of gold are quite content, apparently, to buy gold at a premium. What have I missed or Misenterpreted? Why else would a future's sale be executed at such a high premium? Should we be keeping a close eye on the EXORBITANT PREMIUM in the "hedged" POG as a legitimate indicator of gold's true value?

auspecMultiple Prices of Gold#363789/10/2000; 7:50:07

I am somewhat intrigued in regards to the price at which a mining co. can sell their product via futures|hedging. It is my understanding that a hedge POG can be considerably higher than the spot POG, say even $100 or more per oz. Is this correct?
The question follows- why exactly would a bullion bank pay $375 for an entity that he could get on Comex for $275? I understand the time & risk factors involved as well as the purposes of a legitimate hedge, but this premium is well in excess of these variables. Clearly there is not access to sufficient gold on Comex for all purposes. The BBs are in essence saying [like Wimpy] "I'll pay you $375 Tuesday for an ounce of gold today".
Should we not follow the POG via hedging as closely as we follow the spot market? Which method does larger volumn?
A couple comments,& then hope to be directed by the "pros" w deeper answers and/or directions to previous commentary. The BBs want funds in order to utilize their lucrative "carry" trade as well as make the potential profits they have been assured of by their influential friends/politicos. So they are willing to pay up to have this access. They would rather make an agreement with Buttocks Gold than bid in a "free" market & drive up the price. This process only works when everyone, CBs, BBs, Politicos, $ mining cos. all gain something from this deal. Control is at issue & a lower POG on COMEX, which is on everyone's radar screen, certainly helps the Dollar, confidence, etc.
The mining cos. are getting sweetheart deals that can look great at the time, but they risk their souls in the process and sell out their shareholders. In essence they are now "owned" by these masters who may desperately need them in the future & will not hesitate to call in some chips.
The oil for gold premise could help explain the higher POG w hedging as these recipients of gold are quite content, apparently, to buy gold at a premium. What have I missed or misenterpreted? Why else would a future's sale be executed at such a high premium? Should we be keeping a close eye on the EXORBITANT PREMIUM in the "hedged" POG as a legitimate indicator of gold's true value?
Thanks in advance.


BoxmanLawyers#363799/10/2000; 9:45:28

Why do lawyers wear neckties?

To keep their foreskins from coming up through their collars.

Chris PowellTed is not a bad guy#363809/10/2000; 10:11:42

Ted, I'm sorry if my last post seemed to suggest that you're a bad guy or that you had said GATA is doing
what it does for the money.

Your question was a good one and has been asked by others
and deserves a complete answer.

Any lawsuit brought before there is money to sustain
it will be knocked out of court during procedural
wrangling and will discredit the cause. Just getting
past procedural issues so that the merits of our case
might be addressed probably would cost hundreds of
thousands of dollars. The other side, with all the
money in the world, will throw up as much obstruction
as possible. We have to be prepared for it.

God certainly has raised up many friends for GATA. I am always amazed by this and by their caliber. We just haven't raised enough money yet to get into court without taking a risk that could destroy us. We're still working on it.

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

JourneymanMore on where high fuel costs REALLY come from @Black Blade, ALL#363819/10/2000; 10:21:39

... in countries belonging to the Organization for Economic Cooperation and Development, taxes represent an average of 60 percent of the price consumers pay for gasoline, while the cost of crude oil accounts for just 12 percent of the total retail price. -Ali Rodriguez, Venezurla's oil minister, Dateline OSLO, Norway, (AP), Tuesday, September 5, 2000.

That is, for OECD countries (US, Canada, Europe, Turkey, Greece, Scandinavia and a few others), 60% of the price of fuel is a rip-off that goes to governments compared to the 12% that goes for crude oil. That is, governments costs folks FIVE TIMES as much as OPEC does for fuel.

Regards, J.

CoBra(too)OPEC - #363829/10/2000; 10:48:20

will raise output 800.000 bpd - higher than the expected 700.000, though lower than the minimum 1 million bpd.
Doesn't bode well for lower POO -as some might have hoped - meanwhile it seems French gov. made some heavy concessions to transport, fisheries and farming.
Looks like some things are falling into place re: WGC funded mostly by the hedgers, no wonder some important reserves as PDG holds seem to come into play. Get your reserves cheaply now hedgers and make sure you'll live up to
your contracts to the BB's.
regards - cb2

TownCrierThanks Sir Usul...these two comments go hand-in-hand with each other#363839/10/2000; 10:59:13

1) "...[Jessica] Cross, director of Crosswords Research and Consulting and a self-acknowledged gold bear..."

2) She said, "...if central banks could now move off center stage and operate on the management of their gold more like fund managers, then the hedge managers of the U.S. funds themselves could 'read' the market much better. And then, beyond the millennium, a much healthier, more stable gold market will emerge."

The institutional "gold bears" almost always press for and support the continuation of bullion banking and its attendant gold leasing operations...a necessary paradox. Gold is obviously a vital element in bullion banking, yet gold must be bearishly downplayed in public to preserve this same bullion banking sector. Think about it, folks.

Golden Hooktest#363849/10/2000; 11:38:12

test haha
TownCrierSir auspec's question...#363859/10/2000; 11:38:26

Q: "I am somewhat intrigued in regards to the price at which a mining co. can sell their product via futures|hedging. It is my understanding that a hedge POG can be considerably higher than the spot POG, say even $100 or more per oz. Is this correct? The question follows- why exactly would a bullion bank pay $375 for an entity that he could get on Comex for $275?"

A: The hedge position for $375 represents an buy/sell obligation between two parties that was established through a contract at a previous time (several years ago) when the current price of gold was in fact near $375. (But today, anyone establishing hedges for the future would essentially be locking themselves into an obligation to buy/sell based on today's price level of $275.) As this time passed and the price was driven lower, the seller looked smart, while the buyer looked dumb, no? More on that in my concluding remark.

Either way, if the price moves significantly during the interim, there is always a risk that the adversely affected counterparty will not be able to meet his contracted obligation.

You also asked, "What have I missed or misenterpreted? Why else would a future's sale be executed at such a high premium? Should we be keeping a close eye on the EXORBITANT PREMIUM in the "hedged" POG as a legitimate indicator of gold's true value?"

From my original answer, you now know how it arrived that older hedge contracts may provide for higher prices than are currently being quoted through COMEX, but we can also take a stab at revealing the mindset of the counterparty that is "stuck" with the buy side even as the price continues to fall. ANOTHER put this into good perspective long ago when he offered this comment: "Think now, if you are a person of "great worth" is it not better to acquire gold over years, at better prices?" And the conclusion follows quite naturally: "If you are one of "small worth", can you not follow in the footsteps of giants? I tell you, it is an easy path to follow!"

canamamiGATA's current approach OK#363869/10/2000; 11:39:54

I agree that this is not the time for GATA to launch a lawsuit - they simply don't possess adequate resources at present for what such an approach would entail. Moreover, as I posted ages ago, I suspect there isn't a legally viable civil suit (on whose behalf, what measure of damages, standing issues, etc.), though an administrative law action against a governmental entity would be a viable option, provided the evidence were there. (Two caveats: (1) apparently a private party was permitted to initiate an anti-trust suit against Microsoft, but I don't know the details and I believe that was the first time it was ever done, and (2) there are some old "slander to trade"-type torts that are seldom used here in Canada, but GATA would also face standing problems in that connection).

In short, GATA should just keep trucking along, generating buzz, digging up and safely storing info, using freedom of information requests, approaching politicians, etc., as an interim strategy and perhaps as an alternative to a lawsuit.

USAGOLDGoldfly, Canuck, OldGold, Cavan Man, All. . .#363879/10/2000; 11:43:08

Note: Below is page two of the November, 1999 News & Views. Comments noted came after the Washington Agreement was announced and gold had sprinted to the $330 level in a matter of a few days. Some of you might remember this. The Andy Smith quote was even more telling than Jessica Cross. My Question of the Day had to do with an individual who heads up a gold firm in distress about the gold price going up $40 in a single day. I did not recall feeling "unhappy" at the time. Please excuse any typos or text errors you might find. This is off my home computer and the version prior to our eagle eyed editor, George Cooper, having a look at it.

Usul: Thanks for the links which redeem some of Dr. Cross' sagging popularity. We continue to adhere to the market solution for gold as the only real and lasting solution. It will come in time. Patience, my friends. I would disagree with Dr. Cross in one important sense: With what is going on both in Europe and around the world (go to today's London Telegraph to see what I mean), we may not have to wait 18 months to feel their effect in the gold market. Something could happen suddenly in the gold market. We seem to be at a confluence of events that deserves close monitoring.

Peter: You gotta love the Iron Lady. Talk about Profiles in Courage. Too bad we don't have anyone even close to her calibre in this country. At least not at the moment. Quite an opening salvo in the upcoming Battle for the Pound. Blair, Brown and Co. might go down on this. How old is Mrs. Thatcher? Could she become prime minister again? Not sure how the British system works in that regard. I see it as a good thing that Britain is going to have this discussion. It will be interesting to watch and see what the British people decide.

Old Gold, Cavan Man: Read the Shicht article today. I see where he's going and I agree that a breakdown in the dollar would kick off a gold bull market -- as he describes it. But I see that as one scenario, not the only scenario. Dollar depreciation against the yen or the euro is not a prerequisite for a gold rally. You could have the dollar and gold go up simultaneously if the politicians in Europe and Japan continue with their cheap currency policies, and in the process stimulate gold buying among private investors. Note, that oil did not need a dollar breakdown to rise. Gold might indeed rise against goods, as currencies continue to depreciate against goods led by oil. The Shroeder discussion this morning is telling in that regard along with reports of the split between the ECB and various governments. He is now backing off his statements that there's nothing wrong with a weak euro, but one wonders if the statements reveals what the man really believes. He is after all a staunch leftist as are the leaders of most European countries -- and this is what the ECB is dealing with.


From the November, 1999 News & Views:

The Bears Howl in Pain

"This is now a disorderly market. Gold is still a reserve asset. If you had conditions like this in the bond or foreign exchange markets, it would not be allowed to continue....Over the last three days gold has been trading like a commodity, not like money. Volatility has shot up; the cost of options has shot up; the cost of borrowing has shot up. The situation is untenable."
---- Andy Smith, noted London gold bear frequently quoted by the mainstream financial press, upon watching the gold price soar by $40 on the London market in a single session

"We are going to see some casualties....This is really one of the most unhappy times for the market I have ever seen."
--- Jessica Cross, noted London gold bear frequently quoted by the mainstream financial press upon realizing the extent of damage following the Washington declaration

"Covering this (short position) 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 worldwide book and its option writing."
--- Ted Arnold, noted London gold bear frequently
quoted by the mainstream financial press upon watching the gold price advance toward the $350 level

"This week's sharp price move in gold triggered a scramble among hedge funds and other financial players to reverse their bearish positions, gold-market specialists say. On Tuesday, as gold prices at mid afternoon spiked higher to $326 from $304 within minutes, rumors swirled about "massive buying" by a New York dealer on behalf of a client who apparently was unwinding a $4 billion bearish bet on gold. Talk among traders is that many significant players were caught short in the gold rally, including hedge fund Tiger, commodities-trading adviser John W. Henry, owner of the Florida Marlins baseball team, and J.P. Morgan. A Tiger spokesman said the firm never discusses its positions. But someone familiar with the firm's investments said Tiger had no short position in gold. Mr. Henry and J.P. Morgan declined to comment."
--Wall Street Journal, Heard on the Street, 10/3/99

"Gold will take no prisoners."
--Bank for International Settlements offical earlier this year.

Golden HookSirs: FOA and ANOTHER>#363889/10/2000; 11:59:42

When William F. Duiesenberg declared war on curriences, particular the Dollar, Is not this the start of a new world
war on all currencies for all the world to hear?

I believe this announcement was more important than the Washington Agreement. I believe now all is left is for ME to make their announcement. Thank you.

I will now go back to lurking and watching, and await your reply, and watch my hard assets serve me for awhile. Its been a long time in the making.


Golden HookSirs: ANOTHER AND FOA:#363899/10/2000; 12:10:39

In my previous message 36388 I sounded like my great joy had come to pass. I am not really looking forward to such an event since choas may change our prayers. only making a comment. Being rich in gold is one thing. Being able to spend your wealth in peace and unhampered is another thing.

Thank you, I enjoy your trail blazing.


Bascom ToadvineHi All#363909/10/2000; 12:10:50

It's me "Henri". Just thought I'd let you know. I found myself suddenly transported to Rochester, NY with only my portable and sans "Henri"'s password! Sorry Michael but I had to cop a new handle with my Yahoo e-mail address.

Leigh, hope your foot heels quickly.

Greetings to all my friends at the Round Table. You will know I have returned home when "Henri" re-appears.

Thanks for your kind indulgence

UsulA "Cross" of Gold???#363919/10/2000; 12:28:49

Shakespeare, The Merchant of Venice, 1597, Act II, Scene VII:

PRINCE OF MOROCCO. O hell! what have we here?
A carrion Death, within whose empty eye
There is a written scroll! I'll read the writing.
'All that glisters is not gold,
Often have you heard that told;
Many a man his life hath sold
But my outside to behold.
Gilded tombs do worms infold.
Had you been as wise as bold,
Young in limbs, in judgment old,
Your answer had not been inscroll'd.
Fare you well, your suit is cold.'

July 8th or 9th (sources disagree), 1896: William Jennings Bryan delivers a speech speech denouncing supporters of the gold standard at the Democratic National Convention in Chicago:

"You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind on a cross of gold."

lamprey_65Reginald Howe vs. Jessica Cross...who's right?#363929/10/2000; 12:53:04

I've posted the link for Reginald Howe's rebuttal to Jessica Cross's WGC report.

Folk's, either Howe is right or Cross is right - I don't see any middle ground here, although I must admit that I am no expert on deritives and am groping to find the truth in this matter.

This derivitives debate seems to me to be a key part of our understanding concerning current gold price activity and pricing...guess I just need to find the time to study the issue -- it's just TOO IMPORTANT to rely completely on the analysis of others.

One thing I will say...the idea that a strong dollar can explain away the low POG is ridiculous. Go look at the strength of the dollar during the 80's and the concurrent high (compared to today's) gold price.


JourneymanRe: Dependency & Independence @Bonedaddy (9/9/2000; 8:08:10MT - msg#: 36301)#363939/10/2000; 13:21:37

Thanks for your contribution to the Free Trade thingy -- and a good one too!!

You might find the short letter to the editor, entitled "Missing Tool" and pointed to by the above link, relevant, interesting, and perhaps even useful in relation to your observations.


JourneymanThanx for the ammo @ET (09/09/00; 21:39:36MT - msg#: 36334)#363949/10/2000; 13:27:09

Hey ET,

Thanks for the article! It's amazing to me how clear it is what's going on with things once you get the underlying picture.

Thanx again for the article; it's archived and I'll probably excerpt it for later use!!


CamelExcess Oil Capasity#363959/10/2000; 14:30:37

This ought to settle the question of excess oil capasity once and for all.

Bloomberg Energy
Sun, 10 Sep 2000, 4:22pm EDT

Vienna, Sept. 10 (Bloomberg) -- As the Organization of Petroleum Exporting Countries readies its third output increase in just six months, members had to negotiate the tricky issue of which nations will produce the additional oil.

OPEC's 11 countries can pump another 3 million barrels daily, said Ali al-Naimi, oil minister for Saudi Arabia, on top of August output estimated at 28.8 million barrels. About two-thirds of the idle capacity lies under Saudi control, and most of the rest sits in the United Arab Emirates and Kuwait, meaning other nations will lose money as prices drop.

``You have an 11-member group where three members have some spare capacity and eight members don't,'' said Tim Evans, senior energy analyst at IFR Pegasus in New York. ``The argument isn't over whether there's enough capacity. It's over market share.''

The countries in OPEC are the only ones to restrain output -- in their bid to lift prices from the $10 seen in December 1998 -- though have spent the past year increasing quotas as prices tripled. The market's sag in 1998 hurt investment and limited growth in capacity.

Almost all OPEC oil ministers agree that crude prices now around $33 a barrel are too high. The group at a meeting in Vienna today agreed to increase output quotas by 800,000 barrels a day, or 3.1 percent of the current ceiling.

Other members, including OPEC's second-largest producer, Iran, and the third-largest, Venezuela, had indicated a will to cap an increase at 500,000 barrels a day.


Iran, Nigeria and Indonesia last month produced less than their official OPEC targets at a time when prices were rising toward a 10-year high, reflecting an inability to pump more oil. Venezuela is at or near its estimated peak of 3.05 million barrels daily after a lack of investment during the last two years cut its potential by more than 10 percent, analysts said.

Indonesia admitted it would struggle to keep up.

``We still have a couple of weeks'' before the new oil is ordered, said Purnomo Yusgiantoro, Indonesia's minister of mines and energy. ``We'll try'' to make the target.

OPEC allocated an equal percentage of the additional barrels to its members, though analysts speculate Saudi Arabia will plug any gaps. That way, OPEC nations without spare capacity now could increase as new wells come on stream.

``Everyone is talking about production increases by OPEC countries, but which states have the capacity to lift production?'' asked Kuwaiti Oil Minister Sheikh Saud Nasser al- Sabah, the official KUNA news agency reported. ``It's well known that a handful of OPEC states have the capacity to produce more than their current levels of output.''

A Bloomberg update of OPEC capacity found sustainable output of some 32 million barrels daily, down about 100,000 from the spring. That leaves about 3.3 million barrels a day unused, almost all in the Middle East. Sixty percent lies in Saudi Arabia, with another 520,000 barrels daily in Kuwait and the United Arab Emirates.

OPEC has about 11 percent of its capacity available to meet rising demand or compensate for any disruption to supply, down from more than 14 percent early this year, according to analysts. The oil industry considers about 12 percent enough of a ``comfort zone,'' and significant new oil supplies are mostly two or three years away, they said.

More Oil

``We have to keep an eye on the fact that there's been limited investment by the OPEC nations,'' said Roger Plank, chief financial officer at Apache Corp., a Houston-based oil and natural- gas exploration company. ``So we are getting to a point where we really have to get some more oil out of OPEC or prices could be disrupted.''

Al-Naimi said additional capacity may be a matter of months away, not years, saying his nation had the plants, terminals, pipelines, storage and other related equipment to pump 14 million barrels a day. Additional oil could flow from new wells drilled on known fields.

``That could be achieved rather quickly,'' al-Naimi said.

Most OPEC nations are rushing to build capacity. Iraq is pumping about 3 million barrels daily and plans to raise output by 400,000 barrels a day by the end of the year, said Oil Minister Amer Mohammed Rasheed.

Kuwait's target is years away. The country this month may select a group of foreign oil companies to expand five fields in the north as part of a plan to boost capacity by about 40 percent to 3 million barrels a day by 2005.

Western Help

Iran, too, is seeking outside help from Total Fina Elf SA of France, Eni SpA of Italy and others to lift its output ceiling by about 15 percent to 4.5 million barrels a day by 2005. The oil minister today said it could pump more than 4 million barrels a day, though private analysts put the total closer to 3.85 million.

Algeria has targeted a 1.5 million-barrel daily limit by 2005, up more than 50 percent from now. Libya wants to reach 2 million barrels, a third more than today, though that too is years away.

Venezuela, which analysts estimate has seen daily capacity in the last two years decline from around 3.5 million to a little more than 3 million, has created plan to increase that total to 5.8 million barrels by 2009.

Non-OPEC nations are also investing for the future. Norway, the world's second-largest oil exporter, expects to produce 3.2 million barrels a day this year, its maximum, and plans to reach as much as 3.6 million in the next few years, the oil ministry has said.

In Mexico, by 2005 state oil company Petroleos Mexicanos will have spent about $10.5 billion over eight years to boost its output capacity by more than 1 million barrels to between 3.5 million and 4 million barrels a day.


© Copyright 2000, Bloomberg L.P. All Rights Reserved.

Chris PowellGATA chairman rebuts gold council analyst#363969/10/2000; 14:51:25

Jessica Cross and the World Gold
Council don't know what they are
talking about.

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

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

TownCrierHEADLINE: Bull market shows some weariness after 10-year run#363979/10/2000; 15:58:40

"The problem isn't fundamentals...investors, after five years of paying ever higher valuations for those wonderful fundamentals, don't want to pay any more."

Jeremy Siegel, finance professor at the University of Pennsylvania's Wharton School says, "A run as great as we had was an extraordinarily unusual and unique event. To expect it to continue would be out of the realms of all probability."

And a final sobering thought from the article:

"Leuthold Group, a research firm, calculated that over the past century, once a bull market peaks and a bear market begins, it typically took eight years for investors to make back their losses and see post-peak average returns rise to 10 percent again."

TownCrierHEADLINE: Brown shares belief euro is undervalued#363989/10/2000; 16:47:20

Following a meeting of European Union finance ministers, Gordon Brown said, "The euro does not reflect the fundamentals of the economy and I agree with the statement from last night (Friday)."

ECB president Wim Duisenberg commented when the ero reached new lows last week that the weakness was threatening price stability -- something the reporter suggested was "a red alert to financial markets that the currency's woes were begging a policy response from the bank" while pointing out that the ECB would not likely intervene through forex markets without the cooperation of the U.S. and Japan.

It leads us to ponder here in The Tower...
The failing dollar system received international support in past decades to avoid a complete global economic catastrophe both when the gold-exchange standard was stretched thin and also after it ultimately snapped. If the euro-based system was mindfully constructed to offer an international fresh start, at what point will the U.S. be compelled to play ball and return the old favor in the interest of long-term global stability?

ETDoug Noland#363999/10/2000; 18:15:26

From the article;

"Interestingly, we see that JP Morgan increased its credit
derivative position by $70 billion during the quarter to $245
billion (160% annualized growth rate). This is consistent
with a surge in credit insurance. The proliferation of credit
derivatives and credit insurance corresponds directly with
Wall Street's increasing use of "funding corps" and other
sophisticated financing instruments and vehicles. Such
strategies are, by the way, increasingly necessary as the
marketplace begins to recognize festering systemic credit
problems. Credit derivatives and insurance, however, will not
prove the answer after years of reckless lending and the
consequential financial and economic imbalances and
distortions. Indeed, derivatives are not the solution but the

"Meanwhile, financial and economic distortions are becoming
more conspicuous and alarming by the day. This week, near
chaos erupted in global energy markets as recognition grows
that the world is in the midst of not only higher oil prices, but
also a full-fledged energy crisis. The economic disruption and
political risk associated with this week's protests in France are
but a first warning shot. This week also witnessed a significant
escalation in global financial tumult, with dislocated trading
in the euro and other key currencies now impacting both the
European corporate bond and equity markets globally. Some
European companies were said to have delayed bond issues as
corporate spreads widened and liquidity waned. This is
particularly troublesome for telecommunications companies
in Europe and across the globe. Europe's telecom companies
have plans to issue between $30 and $40 billion of debt before
year-end, with tens of billions more from American and
global issuers. We don't see the market cooperating."

SHIFTYPPU Periodic Ponzi Update #364009/10/2000; 19:12:13

Nasdaq 3,978.41 + Dow 11,220.65 = 15,199.06 divide by 2 = 7,599.53 Ponzi

Down 137.02 New York Ponzi Points.

$hifty :)

SHIFTYJourneyman#364019/10/2000; 19:37:40

Did I miss your next segment or am I early?


Cavan ManLove These Box Seats or The Euro; "Ugly Duckling"#364029/10/2000; 19:37:53

Have a sense of literature?

Admittedly, since its inception, the decline of the Euro has been spectacular. However, the old Euro is now officially declared DOA while the making of history in the context of the "new Euro" awaits the consideration of international markets.

Since the birth of the euro, many different types of people,investors, non-investors, economists, goldbugs, politicians, central bankers etc., have formed a gauntlet of international criticism, rightly so and often on the mark, through which the Euro has been and is passing. During this time period, the value of the Euro in forex markets has declined precipitously. Why has the ECB stood on the sidelines all this time and not intervened in the forex markets to support the Euro? Good question.

The ECB's obvious disdain for, "business as usual" when it comes to the means and method of supporting this relatively new, fiat currency should be a clarion call to those who can think clearly. Their (ECB's) lack of intervention is the clearest signal that, Bretton Woods is becoming increasingly dysfunctional and, that a new international monetary order is in the offing. The Duisenberg speech reinforces this notion. Further, the Euro strategy intends to be non-confrontational as regards the $USD. The Euro has been designed to safeguard not only the monetary welfare of EU members. Of additional importnce and significance, the Euro has the capacity to serve as a safety net for global finance if needs be without directly challenging the dollar and creating political enmity. Economic prosperity and peace; YES INDEED!

To me, the Europeans take a much longer view of things; much like their Asian counterparts. It seems only here in America that, "immediate gratification" is not only expected but, encouraged as a sound, individual and collective strategy. This special aspect of the American spirit has helped this country become the great nation that it is and will undoubtedly continue to be. In Europe and many other parts of the world, strategies are more calculated, more practical and more pragmatic; they are allowed more time to play themselves out into the various stages of tactical implementation.

I believe the main thrust of the FOA/Another monologue is behind the Euro, another fiat currency and NOT gold. However, gold and the POG will be a beneficiary of the events surrounding the use of the Euro in global finance. Do you recall the comment by Robert Mundell when asked about the POG? He said, in his opinion, the POG would be $600 in ten years. He did not say anything about the interim period. Perhaps the rise of POG will be spectacualr only to settle at what today is presumed to be the projected "clearing price"?

When the Euro is allowed to settle oil in Europe, look out below (USD) and look out above (POG) This event will likely be quite sudden. There is no gold standard in our immediate future, only the continued use of fiat paper--by necessity. However, the rise in POG is directly ahead.

May God Bless the USA.

Leigh$600 POG#364039/10/2000; 19:53:09

Hi, Cavan Man! I believe Mr. Mundell said gold would be $6,000 in ten years, and the news reports edited his words.

Thanks to all for the kind get-well wishes. Being on crutches is very hard when you have kids to chase all day! I try to use my "wheelchair" (computer chair) as much as possible. Al Fulchino, thank you for the sweet story.


***Anyone seen this yet? Looks like US pays for oil with military aid again.

Reuters reported: "Saudi Arabia has requested $2.7 billion in U.S. arms and support to help modernise its National Guard and for
ongoing maintenance of F-15 fighter jets bought from the United States, the Pentagon said on Friday. One of the three packages
requested by the Gulf kingdom would include $416 million in light-armoured vehicles, anti-armour missiles and advanced
communications equipment built by General Motors Corp. and Raytheon Corp., the Pentagon said. A second deal valued at $690 million
would involve contractor maintenance and training, spare and repair parts and modification facilities for the large Saudi fleet of F-15 jets
built by Boeing Co., the Pentagon said."

JourneymanYou're not late @Shifty#364059/10/2000; 21:09:02

Took a breather -- doing a re-write of a couple sections. Should post the next installment tomorrow or Tuesday.

Thanks for asking!

Regards, j.

SHIFTYJourneyman#364069/10/2000; 21:15:46



megatronsilver/adam hamilton#364079/10/2000; 21:37:03

If anybody is still on here, check out Hamilton's take on silver prices on gold-eagle. Every time I read it I go nuts!! This is gonna be SO juicy watchin those scumbags Greenspan and Clinton get it right in the yap! I can't wait to hear the whining and lying from their ugly facist faces.
I CANT WAIT!!!! I'm jumping up and down with excitement!

SHIFTYmegatron #364089/10/2000; 21:49:47

I dont see it. Can you post a link?


Peter AsherCavan Man msg#: 36402#364099/10/2000; 22:12:17

"When there's a will, there's a way."

You say >>> Why has the ECB stood on the sidelines all this time and not intervened in the Forex markets to support the Euro? Good question.<<<<

First of all, I have come to believe that the Euro, the Dollar, The Stock Market and gold are exactly where these fellows want them to be. There may be a factor of free market out there for the BIG players, but it's them versus the various governments. The money puts the politicians in place but then it's Et Tu Allen or Wim or Bill or Tony. Brings to mind the scene in the movie "Nixon" Where Hopkins and Hagmen Play President vs. Billionaire Face-off.

I think it's simply that a lower Euro is what it takes for the EU to sell the quantities of goods they need to support themselves in international trade. Selling at a discount if you will in order to create the desired flows. This is a normal business activity on a multi-national scale. A larger quantify of export at a lower price may be what it takes to keep their industry at full capacity. Higher export prices may in their view lower their export amount to a degree that they are then worse off with some activities making more (International) money but other activities being unemployed.

This theory fits with Chancellor Gerhard Schröder, saying just now that the weak euro "should be more a reason for satisfaction than concern."

megatronshifty#364109/10/2000; 22:40:08

sorry. i think he goes under the name zelotes? it's from today, anyway.
Black BladeMyth of Spare Capacity#364119/10/2000; 22:40:48

C.J.Campbell, Petroplan Inc.
from the Oil and Gas Journal, March 20, 2000


The fundamental driver of the 20th Century's economic prosperity has been an abundant supply of cheap oil. At first, it came largely from the United States as it opened up its great territories with dynamic capitalism and technological prowess. But its discovery peaked around 1930, and inevitably led to a corresponding peak in production some forty years later. The focus of supply shifted to the Middle East, as its vast resources were tapped by the international companies. They however soon lost their control in a series of expropriations as the host governments sought a greater share of the proceeds. In 1973, some Middle East governments used their control of oil as a weapon in their conflict with Israel, giving rise to the First Oil Shock that rocked the world.

The international companies had however largely anticipated these pressures, and before the shock had successfully diversified their supply from new productive provinces in Alaska, the North Sea, Africa and elsewhere. These deposits were more difficult and costly to exploit, but production was rapidly stepped up when control of the traditional sources was lost. In part that was made possible by great technological advances in everything from seismic surveys to drilling. Geochemistry and better geological understanding made it possible to identify the productive trends, once the essential data had been gathered.

The industry found and produced the expensive and difficult oil from the new provinces at the maximum rate possible, leaving the control of the abundant, cheap and easy oil in the hands of the Middle East OPEC countries. The latter were accordingly forced into a swing role, making up the difference between world demand and what the other countries could produce. It should surprise no one that such an arrangement led to price volatility.

But these new provinces faced the same depletion pattern as had already been demonstrated in the United States. The larger fields, which are found and exploited first, gave a natural discovery peak. Advances in technology and operating efficiency also reduced the time-lag from discovery to the corresponding production peaks. Whereas it took the United States forty years, the North Sea, which is now at peak, did it in only twenty-six.

As discovery in accessible areas dwindled to about one-quarter of consumption, the industry, which fully appreciated this obvious link between discovery and production, turned its attention to the last remaining frontier, namely the deepwater. It is also subject to depletion with an even shorter time-lag between the peaks of discovery and production. Although much of the ocean is deep, only a few areas have the essential geology, giving a potential of not more than about 85 Gb (billion barrels) - enough to supply the world for less than four years. It is no panacea.

A combination of circumstances led to a dramatic fall in the price of oil in 1998. They included unseasonably warm weather; an Asian recession that reduced the demand for swing Middle East production; the collapse of the ruble, encouraging exports; and further turns in the UN-Iraq imbroglio. The market itself, which now included hedge funds and derivative merchants, had no alternative but to over-react because of its transparent short-term nature. The major companies, plainly seeing that exploration could not underpin their future, took the opportunity of the price crisis to merge, successfully concealing their real predicament from the stockmarket. Budgets were slashed, and a climate of uncertainty led to an improvident draw on stocks. Everyone hung on the pronouncements of OPEC, imagining that it held the key.

Norway and Mexico offered to cut production to help support price. The OPEC countries themselves did everything possible to foster the notion that they could flood the world with cheap oil at the flick of a switch. It was a strategy aimed to inhibit investments in gas, non-conventional oil, renewable energy or energy saving that they feared might undermine the market for their oil, on which they utterly depend.

But it was a short-lived crisis, and before long the underlying resource and depletion pressures manifested themselves. Now, prices have rebounded with a staggering 300% increase in twelve months. Many of the famous oil analysts, who were predicting that oil prices would stay low forever, are changing their chameleon skins, as they watch prices soar through $30/b and break the chartists' barriers. With baited breath, they hang on the next word from OPEC. The US Secretary of Energy travels the world speaking of diversity of supply as he talks in vain to countries with little to offer in the face of depletion. Norway's role as the world's second largest exporter is critical, but it transpires that not a single well was closed by government edict. It is easy for the Norwegians to support price as they watch their old giant fields fall off plateau despite every heroic effort. Mexico has now confessed to the previous exaggeration of its reserves, which in 1999 fell, following an external audit, from 49 Gb to a more realistic 28 Gb,. Meanwhile it is forced to undertake a mammoth nitrogen injection scheme to try to pump up the ageing Cantarell Field. It does not sound as if the Mexicans have much option but to watch their production fall.

The Middle East fields too are getting old, and in some cases, very old. Development drilling has continued unabated despite the fall in production. Venezuela's new production comes largely from infill drilling in old heavy oil fields, which is dependent on the amount of effort and investment. It does not sound as if it has many shut-in wells either. Its oilmen now speak of reduced capacity.

Logic suggests a future something like this:

OPEC makes some conciliatory noises about raising quotas in response to US pressure, wishing to maintain the illusion that its members can meet demand at will.
Norway and Mexico continue to support OPEC within the framework of such conciliatory words, making a virtue of necessity.
The market takes the hint and marks down the price of oil in an action that feeds on itself as the new flavour of the month permeates the ranks of speculators, hedge funds and derivative specialists searching for a quick buck. Refiners hold back from filling their tanks. Prices collapse to the low $20's, even perhaps plummeting briefly into the 'teens. People relax in the belief that the wolf has headed back into the forests. The famous flat-earth economists again cheer that market forces reign supreme.
But then a few weeks later, people begin to notice that fewer tankers are arriving. Norway says that storms have had an impact; Venezuela speaks of floods; Mexico claims restructuring; Saddam says he needs a spare part ; King Fahd leads a delegation of puzzled Senators into the desert to show that all the wells are fully open.
The penny finally drops that there is no instant spare capacity in the sense of shut-in wells. The men at their screens start marking up prices.
A new upward momentum drives prices through the $40 barrier. When Air Force One makes a new panic tour to Norway, Mexico and the Middle East, it meets ashen faced oilmen saying that they have been working night and day to meet their quotas, but were unable to do so.
The world, including OPEC, gradually appreciates that it faces a losing battle in trying to offset the depletion of the large, old, low-cost fields.
Of course, the Middle East can raise its production, since its depletion rate is so low, but it will be a long haul to bring in the ever smaller fields, which are all that remain, and exploit small extensions and secondary reservoirs in known fields. It is not a matter of simply opening a valve.

Middle East share of the world's supply of conventional oil was 38% in 1973 at the time of the First Oil Shock, but had fallen to 18% by 1985 as the new provinces flooded the world with flush production from giant fields. It is now about 30%. Unlike in the 1970s, this time it is set to continue to rise as, there are no new major provinces in sight. Share will likely reach 35% by 2002 and 50% by 2009. By then, the Middle East too will be close to its depletion midpoint, and unable to sustain production much longer irrespective of investment or desire.

It will be a hot summer. Strident politicians will accuse the oil companies or the Muslims of gouging the consumer, their minds having been further concentrated by a related collapse of an already grossly overheated stockmarket. No doubt, there will be calls to send in the Marines. But it is an election year, and the Presidential candidates will relish the agony of the dying days of the old administration. Democratic politicians cannot in practice plan for the future, but they can certainly win votes by reacting to crises. So, the hope is that the new President will look reality in the face and tell the people what he saw. If he does so, he will explain that we are not about to run out of oil, but that conventional oil will peak around 2005 and all oil, five years later. Once the people realise that they are not being gouged by anyone, they will face up to their predicament with courage and fortitude. They will be surprised at the number of solutions, some improving the quality of life, but finding oil that is not there to be found will not be one of them.

Black Blade: Though the saudis have made the commitment to raise production to 800,000 bbl. It should be remembered that they said that they would raise production to 700,000 bbl when the price of Brent North Sea reached $28.00 bbl for 20 consecutive trading days. They haven't yet, so what is really new with this latest news except that they added 100,000 bbl to the previous commitment? Spare capacity is dubious at best. I hope to delve into this in greater detail when time permits. I have a lot of data to filter through, however, in short, many of the claims dealing with spare capacity are political in nature and were inflated to gain concessions in previous years quotas. There is also the debate of producible oil vs. in situ oil (conventional vs. unconventional debate). meanwhile, as full production capacity is approached, demand continues to rise and will surpass the ability to produce oil at what are considered "cheap prices". Simply put - The energy crunch is coming like it or not, and inflation is inevitable irregardless.

SHIFTYmegatron #364129/10/2000; 23:04:24

I will try that.

Good evening Black Blade. :)


Simply MeWaiting for September 13th.#364139/10/2000; 23:06:28

Hmmm...First it was US military assistance to Jordan in exchange for a large hunk of "lending" gold. Now it's US military assistance for oil. Are the ME powers getting tired of trading for dollars?

Also, are we re-inforcing our allies on the Middle-Eastern war chessboard in preparation for coming conflict?...or simply "showing the instruments of torture" (first step to obtaining a confession during the Spanish Inquisition)to the Palestinians in hopes of softening their position on Jerusalem.

It's always a puzzle to me, that some Arab countries can be strategically on the US side and religiously on the Palestinian side of the Jerusalem debate. Could the longer term strategy be to end alliance with the US once dependence on the US dollar is gone? Or is our military protection to become the new "hold", once the dollar is done? And Jerusalem is the key, isn't it?

Many questions. I'm awaiting September 13th for another clue.
Could be quite interesting!
This dollar/euro/gold/oil love quadrangle is better than any soap-opera.
simply me

simply me

Black BladeMy Take on Today's OPEC Announcement #364149/10/2000; 23:16:22

A short-term drop, then bounce back to higher energy prices.

C. J. Campbell of Petroconsultants is but one of many industry geologists and oil specialists who have made several important observations and have engaged in several detailed studies of the looming oil crisis. Some of the following only highlight some of these concerns.

Some interesting facts that should be considered when discussing the quantity of oil go far beyond what are considered resources (economic and uneconomic petroleum), and reserves (economic petroleum). But first, The reality is that discovery peaked in the 1960s, despite all the technology, a worldwide search and a deliberate effort to find the largest remaining fields. The world now finds one barrel of conventional oil for every four it consumes, and there is no evidence that the downward trend can be reversed. Few would dispute that oil has to be found before it can be produced, or that peak discovery has to be followed by peak production. The authors ignore the critical evidence of discovery trends, which in turn point to a global peak of production in the next few years. About half the yet-to-produce (reserves plus yet-to-find) lies in just five Middle East countries whose share of world supply is inexorably rising, as the International Energy Agency confirms.

The market, with its derivatives component, does indeed set price on the marginal barrel based on sentiment and very short-term pressures, making no charge for depletion. A free oil market has always over-reacted and has a minimal impact on overall supply because most oil comes from the large old low-cost fields. It is not a good way to deal with a depleting resource as important as oil. Some measure of external control has always been required, whether exercised by Rockefeller, the Texas Railroad Commission, the major companies or OPEC.

Many people seem to think that that oil supply is controlled by politics not geology. Oil and politics are indeed never far apart, and politics can affect the rate of extraction to a degree. In Britain, Mrs. Thatcher created an environment of hyper-activity during which most of the country's oil was found. But if they brought her back, there is nothing even she could do to arrest the pending consequential steep decline in production imposed by Nature and the immutable physics of the reservoir.

Many even claim that America has ample supplies in the Western Hemisphere and Atlantic Basin to meet its future needs. It is not specific as to where this oil is, and fails to point out some important limitations. Mexico this year reduced its reserves from the previously exaggerated number of 44 Gb to 28 Gb following an external audit. Of Venezuela's 73 Gb reported reserves only about 29 are conventional oil: the rest being Heavy and Extra-Heavy oil, which is expensive and, above all, slow to produce. Some promising deepwater finds have indeed been made off Brasil and in the Gulf of Mexico, together offering promise of some 30-40 Gb, but the economics of deepwater operations demand high flow rates and rapid depletion. Nor can America rely on North Sea supply because production is at it's peak. Norway is currently the world's second largest exporter but its oil production is set to decline at about 6% a year as its old giant fields come off their designed production plateau, despite heroic technological efforts. Besides, the other inhabitants of the Western Hemisphere have their demands on oil too. Most countries in Latin America are already net importers.

The late M. K. Hubbert, developed a mathematical model of depletion rates for regional oil production. He was right on the mark with the 1969-oil production peak in the US. The production peak for world oil is projected at between 2002 and 2010. The model has had very good success for individual fields as well. The "Giants" have all been found. A few large fields and several small fields are left to be found, and would likely fall in the "unconventional oil" category. The cost of retrieving oil from these "unconventional" sources is much greater than the "cheap oil" from the "Giants". One should also consider the quality of the oil involved. The Light Sweet Crude carries a premium since it is most easily converted into gasoline and other distillates. The oil produced from the ME is a combination of grades, but lean heavily toward the Heavy and Sour Crudes that require much more effort (and therefore cost) to convert into gasoline and other distillates. I have also previously discussed the "razor-thin" margins that refiners get for their product, the risk of volatile pricing, and inventory taxes. OPEC will likely have to do a "Texas-Two-Step" in triple time to convince refiners to purchase and store this "excess oil" under this scenario. More likely is that any excess oil will be stored by the ME countries themselves, sold to countries that have different regulatory and tax structures, or what has happened in the recent past, and that is talk up extra production, but simply don't deliver.

Black BladeGood Evening All! Almost caught up on last weeks posts.#364159/10/2000; 23:28:55

SHIFTY: Good evening to ya. What's the word on baby Ray? I think I'll check out Zelotes editorial on Ag. I was gone a few days with clients and some snakes (lawyers), but then, they're our snakes ;-)

Stranger: Welcome back, the round table certainly noticed your absence. It seems only a short time ago when you caused quite a stir, and now we all await your posts. Am I to understand that you were in Sturgis? If so, you're more a wild man than I thought.

Simply Me: I have not heard anything new on the Euro for oil deal lately. I'm just not sure if that was just some Saudi official making buzzing noises like an annoying Gnat. We certainly get enough falsehoods and rumors out of that country for some reason. However, Euros for Oil would seem plausible.

TopazShifty - All re: Hamilton#364169/10/2000; 23:34:54

Yup - Ag-------Get you some!
TopazSimply Me re: Palestine#364179/10/2000; 23:40:54

Hi S-M,
Arafat has decided to forego the decision on Jerusalem for 2 Mth's.

SHIFTYBlack Blade/ Topaz#364189/10/2000; 23:51:09

Black Blade: Baby Ray is doing great.

Topaz: Thanks

Im off to bed.

Good night all.


TownCrierHear ye! Hear ye! An update to the Gilded Opinion on OPEC#364199/10/2000; 23:55:23

From the pen of Fed Watcher Adrian Van Eck, we are pleased to bring you some of his recent commentary on implications surrounding the first meeting of the OPEC heads of state since 1975, organized by the new president of OPEC co-founder, Venezuela. A sample follows:

"...we believe events have already started in motion that will drive the price of crude oil in America up to $40 a barrel. It could happen sooner rather than later. And unlike 1990, when a big oil price-spike was caused by a military invasion of Kuwait that America was able to reverse out, this time the price gains will happen for reasons that we will not be able to do anything about, in the short run. And they will likely stick.

"$40 Oil Is Not An Unrealistic Fantasy. It Happened Before -- 20 Years Ago!

"...Today Oil is coming off a tripling once more, this time from $10 to $30. And in a moment we will discuss with you the evidence. . . now spread across the public record but ignored by an America in Denial. . . that OPEC has the power to more than double the price again."

Simply Me@Topaz @Leigh#364209/11/2000; 0:17:27

Hi Topaz,
Thanks for the news. That takes one stick of dynamite out of the bomb. I really thought Arafat would put off the confrontation. He's become much less confrontational since he turned from active terrorist leader to nation-in-exile leader.
I'm also looking for news on a euro for oil deal on September 13th. Will appreciate anything you hear/read on that front also!
simply me

Hi Leigh,
Best wishes for a speedy recovery. Broke my left hand when my two youngest children were still in diapers. In a cast up to my elbow and told not to get it wet. With one and
two year old boys in a tub together?...No way. When they took the cast off there were dried Spaghetti O's and
mashed potatoes (the kids' favorite foods)stuck in places I couldn't reach!
Good luck. I think the improvised wheelchair idea is great! Crutches?..impossible. I'll bet you'll have some good stories to tell before it's all over. Doctors just have no idea what they're asking when they put restrictions on anyone who must care for young children!
simply me

Hard assets...Easy accessATTENTION EUROPE: We would like to introduce YOU to the services of Centennial Precious Metals, Inc.#364219/11/2000; 0:18:52

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Simply Me@Black Blade#364229/11/2000; 0:23:57

Greetings and good fishing to you! Appreciate your keeping an ear open for new on the euros for oil front. It may be a premature rumor...but it makes too much sense to me to be a false rumor.
simply me

The Invisible HandReality Check: no formal announcement of OPEC decision#364239/11/2000; 1:31:25

This is from the BBC. The link on the entry of the webpage ( also says that there is no timetable. Wait till Wednesday?

Monday, 11 September, 2000, 04:37 GMT 05:37 UK

Oil down after Opec boost

Opec ministers continue discussions on Monday

Oil markets have reacted positively to the reported decision by ministers from oil producing countries to increase production by 3%.

In Japan, the price of light crude fell by almost one dollar a barrel in early trading.

Ministers from Organisation of Petroleum Exporting Countries (Opec) are continuing their talks in Vienna on Monday.

There has been no formal announcement on the decision to raise daily production to 800,000 barrels a day.

During the past week, the price of oil hit a 10-year high of $34 per barrel.

Analysts say it is unlikely that prices will drop to the psychologically important $30 a barrel threshold, because of the coming winter in many oil consuming countries.

The BBC economics correspondent says that with oil stocks at their lowest level for 20 years, the increase in production will in the medium term only restrain the upward movement in prices.

Qatar's Oil Minister Abdullah bin Hamad Al Attiyah said Opec "did all that we could, but we cannot solve the whole problem". He added that Western governments had to address the issue of high fuel taxes.

Opec says it wants oil prices of around $25 a barrel, with a target band of between $22 and $28.

European reaction

Ministers from oil consuming countries have given a cautious reaction to reports of the increase in oil production.

In France, where the crisis led to a six-day blockade of fuel refineries, Finance Minister Laurent Fabius, said the decision was a "step in the right direction."

But German Transport Minister, Reinhard Klimmt, said: "This is still not enough. Opec must produce more."

In the US, White House chief of staff John Podesta said: "We're short on oil... I think this is a substantial increase, led by Saudi Arabia... but we're going to have to take a hard look and see whether it's enough."

The organisation's third production boost this year is towards the lower end of expectations. Saudi Arabia, for example, had pressed to raise production levels by a million barrels a day.

High oil prices increase inflation and restrict growth in America and Europe, who both import the majority of their oil supplies.

TownCrierChange coming on Chinese winds...#364249/11/2000; 2:00:16

From the linked article, China's Finance Minister Xiang Huaicheng said after the central bank launched liberalisation of interest rates on bank deposits and loans last week as the beginning stages of broader reforms, China "will continue to accept our responsibility to contribute towards the Asian economic recovery," and that the stability of the yuan had been helpful in that regard. According to the article, he told his counterparts at this weekend's Asia-Pacific Economic Co-operation finance ministers' meeting that "China was now focusing on its social safety nets as a precursor to the reform of its lumbering state-owned enterprises."

And from Bridge News...

China Press: Gold to be traded in the domestic market in two years

Shanghai--Sept. 11--China plans to allow gold to be freely traded in the domestic market in two years, according to a report in the Shanghai-based Wen Hui Daily, quoting Wang Dexue, the director of the Gold Bureau under the State
Economic and Trade Commission. But China won't completely open the market to international trade until the yuan--the Chinese currency--is fully convertible, the paper reported Wang as saying.

LeSinStraight Talking Please and EURO'S Strength#364259/11/2000; 6:02:37

To the Economists, Accountants, and Leaders of discussion on this fine forum. I am a lay person as stated many times before. My request of the Masters, Experts, Trail Guides, Friends of Others and Giants please dispence with the "Metaphores", "Allegories" and "Parallel" Thought Explanations when explaining Gold, Precious Metals and Currency Wars. I for one would welcome simple, plain, and straight talking forms of discussion.

It is a fact that a stadium full of economists could not agree on the state of macro economics let alone the remedies for it.

Ladies & Gentlemen I would be most grateful for comments regarding the Euro's Strength as I see it, albeit over simplified. I adopt a marketing perspective to Euro, while many economists (lay & professional) here adopt complex theory a certain laws from text-books.

The Euro at present is not being hammered - it is being "Discounted". It is gaining "Market-Share" a discounted Euro is providing a cheap entry into the Euro settlement system and a "Reasonable" "Alternate-Way-Out" of the US$ hegemony.

Apologies for spelling erros, my excuse Enlish is my second language. "S"

Black Blade"Morning Wakeup Call!" Even OPEC Couldn't put Humpty Dumpty Together Again!#364269/11/2000; 6:07:30

Sources: BridgeNews and AP


Asia Precious Metals Review: Physical demand supports spot gold
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Sept. 11--Physical demand supported spot gold in Asia on Monday in sluggish trading, dealers said. After the price of gold tumbled in the U.S. market Friday, bearish sentiment increased in the Asian market with many players expecting the price to move within a narrow arrange of U.S. $270-274.50 per ounce in the near term, they noted.

Black Blade: This is really an old story that is recycled over and over in Japan. Yawn.

China Press: Gold to be traded in the domestic market in two years

Shanghai--Sept. 11--China plans to allow gold to be freely traded in the domestic market in two years, according to a report in the Shanghai-based Wen Hui Daily, quoting Wang Dexue, the director of the Gold Bureau under the State Economic and Trade Commission. But China won't completely open the market to
international trade until the yuan--the Chinese currency--is fully convertible, the paper reported Wang as saying. (Story .10689)

Black Blade: Potentially over a billion customers for Au. Then an ad campaign "Over 1 billion sold" just like McDonald's.


St. Louis Post-Dispatch

Americans fret about the cost of heating their homes. French truckers blockade roads to protest high gasoline prices. Asians debate how to fight inflation stoked by costlier oil. Consumers worldwide are angry about high energy prices and fearful of worse to come. Still, ministers from the 11-member Organization of the Petroleum Exporting Countries aren't expected to provide much comfort at a meeting Sunday to consider whether to produce more. Analysts predict OPEC will agree to raise its official output by no more than 800,000 barrels a day - just 3 percent of each member's production quota. They say such an increase would do little, if anything, to rein in oil prices, which have more than tripled in the past 20 months and have continued rising this week to new post-Gulf War highs. "There's no comfort factor anywhere," said John Toalster, an independent energy consultant in London. "It's a severe situation, no doubt about it." Since OPEC slashed output in March 1999, oil prices have surged to levels that threaten to derail the locomotive of global economic growth - the United States - and snuff out fragile recoveries in Asia and Latin America.

Crude prices that languished at less than $11 a barrel in December 1998 bounced above $34 a barrel this week on commodity exchanges in New York and London. As a result, developing countries are finding that higher bills for imported oil are eating into resources for social programs and investment. Citizens of wealthier nations are feeling the pinch, too, in the form of pricier visits to the gasoline station and soaring prices for heating oil. OPEC Secretary General Rilwanu Lukman suggested Thursday that the group's members will agree in Vienna, Austria, to increase their production of crude. "If we're satisfied the market needs more crude oil, we will put more in if we are in a position to - and we probably will," he told the British Broadcasting Corp. OPEC, which pumps a third of the world's oil, has an official daily output of 25.4 million barrels excluding Iraq, which exports its crude under a special U.N.-monitored program. But the cartel's members are now producing 674,000 barrels a day above their quotas, said Leo Drollas, chief economist at the Center for Global Energy Studies in London. Drollas said an increase of 500,000 barrels a day was "in the cards" in Vienna, but he warned it would only serve to legitimize the bulk of OPEC's current overproduction and would do nothing to cool prices. Markets need from 800,000 to 1 million additional barrels each day for prices to ease below $30 a barrel, he said.

An increase of this size could only come from Saudi Arabia, the No. 1 producer in OPEC and the world. Except for perhaps Kuwait and the United Arab Emirates, no other OPEC member has the spare capacity. Saudi Crown Prince Abdullah told President Bill Clinton in New York on Wednesday that his country was
committed to pushing prices down to about $25 a barrel. He said OPEC would raise output by about 700,000 barrels a day, according to a source familiar with the talks. Saudi Arabia and its OPEC partners recognize that high prices can backfire on them in the long run. If prices stay high, importers will seek out cheaper substitutes for oil, and non-OPEC producers will find it profitable again to pump from high-cost wells. Given the brittle balance of supply and demand, a glut of oil could send prices crashing. That seems a distant possibility for now. In France this week, irate truckers blockaded fuel depots. Officials from 21 Pacific Rim countries met Thursday in Brunei to discuss ways of coping with the rise in oil prices. OPEC has tried to deflect criticism for prices by pointing out that many rich countries charge heavy taxes on gasoline.

Black Blade: I need not say anything here. This says it all. Suffice it to say that nothing is changed, prices will likely continue higher, and the oil fields are draining out that much quicker. Recession is on the horizon as the energy crunch arrives.

Meanwhile, Oil is only off -$0.18 to $33.45/bbl and poised to attack $40.00/bbl. NG is off slightly at $4.85 Mbtu and likely to pass $5.00 Mbtu and passed $8.00 Mbtu come this winter. Heating Oil is up +0.31 at 99.80 cents and going much, much higher as supplies are extremely thin going into the Fall. Au is up +$0.40, Ag off 2 cents, Pt down -$6.00 on profit taking from a good rise last week, and Pd paper trade is off -$10.00. On Thursday the PPI number and on Friday the CPI number will be tweaked to match the political goals of the current regime in Washington, D.C. and petroleum prices will likely be discounted. The S&P futures (-3.00) are pointing to a lower open on Wall Street after a near disaster on the Asian indices overnight. We approach interesting times.

wolavkaNice week to be a goldbug#364279/11/2000; 6:22:30

Looks good!!!!!!!!
Black BladePetroleum Higher on OPEC Oil Production Increase.#364289/11/2000; 6:36:10

Petroleum moving higher. Oil up +$0.12 at $33.75/bbl, and Heating oil over a buck at $1.002. Now to see how Petroleum performs in NY. Also, refineries are working "Flat Out!" at near full capacity. A shutdown here, and explosion there, throw in a little necessary maintenance, and the noose draws tighter. Inflation and ultimately recession is in the cards. We are watching history unfold. The end of cheap oil and "Hydro-Carbon Man?"
Black BladeNick Goodwin's recommended gold portfolio (September)#364299/11/2000; 6:47:55

Interesting analysis of gold-oil relationship, and bias toward unhedged miners. Though I believe that petroleum is headed much higher, it is close to the mark as gold tends to lag oil. This is a result of inflationary pressures from oil that show up later in the cycle and gold bounces as a result. We live in "Interesting Times".
Black BladePetroleum higher, unfortunately PMs lower#364309/11/2000; 7:55:27

Petroleum still moving higher:

Natural Gas 4.955 +0.075 +1.54 %
Heating Oil 1.003 +0.0081 +0.81 %
Crude Oil 33.98 +0.35 +1.04 %

USAGOLDEuro Continues Plummet, Gold Off Slightly#364319/11/2000; 8:36:44


(9/11/00) . . .Gold was down in early New York trade with the plummeting euro the chief feature of this morning markets -- down over one cent. Physical purchasing dominated Asian trade and the European market was described as quiet and thin. Financial World News (FWN) reports one analyst's view that "gold's performance in the face of the strength of the currency is relatively encouraging, with some more bullish elements of the market looking at oil prices--not just as the precursor to potential inflation (or economic malaise given developments in France and the U.K.), but also with a view to considerably enhanced Middle Eastern gold offtake."

We would add to that the potential for European "offtake" under the circumstances. One could safely say that the recent developments there are not the sort of thing that would produce a great deal of confidence -- currency plummeting, byways blocked by angry truckers, oil and gasoline prices skyrocketing with winter coming on, and so on. Wim Duisenberg's reaffirmation of a hands-off, non-intervention policy with respect to the euro in a speech over the weekend was probably the chief driving force the single currency's drive for low ground. I'm sure he had hoped for the opposite reaction. One keeps waiting for some signs of a grand and dramatic policy to emerge -- perhaps a futile hope (if you happen to be a European saver). So far, the dramatic gesture has remained under wraps.

Back in the USA, we have a full menu of government reports which if reported objectively should put some color in the inflation picture. Wednesday's full moon will be accompanied with the Current Account report and on Thursday we have Retail Sales and Producer Prices, followed by Consumer Prices on Friday. It's a sad commentary that as part of setting the stage for a menu of government reports that one must offer a caveat that they might be less than accurate, or better put, less than honest. Perhaps we need a labeling law for government reports.

That's it for today, my fellow goldmeisters. Have a good day and see you here tomorrow.


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USAGOLDAll. . . .#364329/11/2000; 8:52:21

A couple weeks ago I mentioned receiving permission from Adrian van Eck to re-publish his revealing behind the scenes look at the upcoming OPEC parley in Caracas. The link above takes you to that important analysis in our Gilded Opinion section. I hope the Forum gains from his insights. This will be the first time since 1975 that leaders of the OPEC nations will be meeting -- that's "leaders" not oil or finance ministers. Van Eck tells the story of Venezuela's Hugo Chavez -- his ties to Fidel Castro and his hawkish views on oil and oil pricing. Chavez has already played a key role in OPEC politics and appears to be positioning himself for an even greater role. One cannot take political militancy out of the OPEC equation both in the Gulf -- where Palestine remains a key issue -- and in the third world where IMF/World Bank policies have wreaked considerable havoc and a growing anti-American sentiment. Though on the one hand, the producers feel a need to appease the G-7 nations and up production, they must also answer to their own people -- a quandary van Eck touches upon with great skill.
USAGOLDI should have added. . .#364339/11/2000; 9:04:20

that van Eck is a goldmeister of the first order. . .A snippet from a recent e-mail update:

"The recent slumber of the Gold sector has caused some analysts
and investors to finally throw in the towel on Gold. However, the vast
majority of sector investors have decided to stay with the metal. For many
of them, Gold is like a religion. The metal's role as a store of value over
the course of thousands of years is more important to them - than the lack of
positive action in the new world of PAPER MONEY. When Gold was removed as a
monetary policeman thirty years ago, many people were afraid that governments
would begin to print money as fast as the presses would allow. That has
certainly been the case - with the U.S. government among the biggest
offenders. As a result, the value of the U.S. dollar has collapsed in the
past twenty to thirty years."

MK Comment: Van Eck is predicting a strong gold rally.

beestingHomestake Mining to close Flagship Gold Mine in Lead South Dakota.#364349/11/2000; 9:49:35

In a press release, Homestake (NYSE:HM - news) Chief Executive Jack Thompson said that
despite trying to restructure and achieve efficiencies in the mining operations of the 124-year-old
mine in 1998, the fall in the gold price since then prevented the plan from working.

wolavkawe need#364359/11/2000; 11:01:31

to take out the magic # in dec gold, no inside day, close it higher , and get on with it!!!!!!!!!!!!
714LeSin re: euro#3643609/11/00; 11:34:29

The Euro's strength lies in its possibility as an alternative to the US$ in international trade. But this will take a truly unified Europe such as we've never seen before.

The Euro's weakness is that it affects smaller countries like Ireland and Portugal in much different ways the their larger cousins, like France and Germany. In other words, what may be good for Germany is not necessarily good for Ireland. And it is a currency dominated by France & Germany. Schroeder's comments in particular belie a certain animosity towards the euro on the part of the German powers-that-be.

You are French, yes? Perhaps, Swiss? To better understand the euro's dilemna, simply visit any of the graveyards to the north and east of Paris. There you will find British buried in their own sections, some Germans buried in theirs, some Americans in their own cemeteries, and of course, a multitude of French war dead under their own memorials. Even in death, the Europeans remain divided. Such is history...and such is the Euro.



wolavkaOpen Interest in dec#3643709/11/00; 11:43:32

You know, that they know, it time.
wolavkapenetration#3643809/11/00; 12:09:54

punch it thru and away we go. 277.40
wolavkaRunning out of sellers#3643909/11/00; 12:31:37

Inside day, okay now gap this puppy and let's have a merry christmas.
Cassius@Wolavka You've aroused my curiosity!!#3644009/11/00; 12:40:35

As a consistent lurker, I always look for your little optimistic messages, though they are often very cryptic. My curiosity has gotten the best of me on your msg#36467. Firstly, shouldn't it read, "You know, that they know, it is time."? Just who is "they" in this case? And, if it shouldn't read this way, just what do you mean. Please, a little more transparency, please. Sorry, I just have to know. Thanks, Cassius
wolavkacassius#3644109/11/00; 13:13:11

The markets are run thru complex math formulas.

Certain people in power control how mkts respond to world events.

If the market makers, fund mgrs. or power brokers knew that the little guy could position himself without risk and it was done by them in mass than they'd disrupt the game, change the rules, raise margin etc.

The more things change the more they stay the same.

Gold is not going away, changing weak hands .

Tom(No Subject)#3644209/11/00; 13:16:12

Gold Market Short Squeeze

Gold Market Short Squeeze May Not Be a Problem For Growing Dictatorship

By Jay Taylor,
J. Taylor's Gold & Technology Stocks

Posted Monday, September 11, 2000 at 07:54 AM EST


At the heart of American freedom has been free markets. Without free markets, it is impossible to have freedom. Our Founding Fathers understood that if government began to get involved with market decisions, the United States would be like every other tyrant dominated land. It would in effect be a dictatorship.

Over the years, and especially since the establishment of the Federal Reserve, we have been subject to increasing amounts of market intervention by government and our own central bank, namely the Federal Reserve Bank. Democrats, being socialists at heart, have been much more comfortable with taking freedom away from individuals for the "collective good" of the country. Republicans should stand in opposition to that trend, but not many of them have. As a result, America is moving inexorably toward dictatorship.


This past week we were treated to another example of America's move toward dictatorship by John Mielke, of the Commodity Futures Trading Commission (CFT) who works in that departments Department of Economic Analysis in Washington. In a phone conversation with a lemetropolecafe member, Mr. Mielke indicated that if a gold short trader were unable to repay his obligation in gold, that did necessarily have to be compensated with the physical metal, and that other compensation could and would probably be arranged. Wow!

So there you have it. If Mr. Mielke is correct and if we are correct in our belief that the powers that be have been rigging the gold market, crony capitalist friends of President Clinton and Al Gore like Goldman Sachs, Morgan Stanley and Deutsche Bank need not worry. For the sake of their friends, they will simply rule the contractual obligation of these bullion banks to deliver gold null and void and require those to whom the gold is owed to accept paper rather than gold. And with regard to paper, that is no problem because the Fed can always print more of it!

The views of Mr. Miekle should be a warning to gold bugs who expect that when the short sellers get caught with their pants down, they will achieve happiness when the price of gold explodes to thousands of dollars per ounce. That would be true if you or I failed to deliver gold. But if Goldman Sachs or Chase Manhattan fails to deliver gold, do you think for one moment President Gore and Alan Greenspan would not come to their rescue by permitting them to break their contractual obligation? They will simply DICTATE to us that we must accept the failure of these big firms to honor their obligation "for the good of our country." In my humble opinion, this sort of attitude toward markets is directly related to our declining state of morality and demonstrates our acceptance of that the rich and powerful are in fact above the law, just as it was proven that President Clinton is in fact above the law.

PH in LAWhat 800,000 barrel increase???#3644309/11/00; 13:18:53

There has been lots of mention in the media of an OPEC production increase of 800,000 barrels per day. Just heard an analyst on TV say that the increase announced officially today is actually 200,000 bbls on top of the 600,000 barrel increase already implemented last time. So the 800K figure is only a total increase!!

How's that for deceptive reporting?

If the last increase of 600,000 bbls. didn't bring down prices, what do they think another mere 200,000 bbls are going to do?

Cassius@Wolavka#3644409/11/00; 13:24:23

Gotcha! Thanks, Cassius
TownCrierWake up call! Non-Central Banks ousted from the BIS...private US institutions given the boot#3644509/11/00; 13:26:29

***The BIS announces the proposed withdrawal of all privately held shares in exchange for CHF 16,000 per share

The Board of Directors of the Bank for International Settlements (BIS), an international organisation headquartered in Basel, Switzerland, proposes to restrict, in future, the right to hold shares of the BIS exclusively to central banks (which already hold 100% of the voting rights and 86.27% of the property rights in those shares). This measure is intended to enable the BIS to pursue better its objectives of promoting international monetary and financial cooperation.

To this end, the Board has decided to call an Extraordinary General Meeting (EGM) to be held on 8 January 2001 with a view to amending the Statutes of the BIS so as to exclude private shareholders against payment of compensation of CHF 16,000 per share.

The authorities of the stock exchanges in Zurich and Paris, on which BIS shares are traded, have been duly informed of this proposal, and have been asked to suspend all trading in BIS shares during the day of Monday 11 September 2000. Trading will be resumed the next day.

Rationale for the transaction

The BIS is an international organisation whose fundamental purpose is to promote cooperation among central banks and thus to contribute to global financial stability. The Board of Directors considers that the transaction to be proposed to the EGM is necessary to enable the BIS better to pursue these objectives. Indeed, unlike a commercial bank, the prime objective of the BIS is to employ its resources in support of its public interest functions. This is also reflected in the fact that private shareholders have no right to vote or to participate in the shareholders' meetings. Indeed, all voting rights are held by the central banks of the countries in which the shares were originally subscribed. For these reasons, the existence of a small number of private shareholders, whose interest is essentially financial, is no longer seen to be in line with the international role and the future development of the organisation.

This reform continues the process commenced in 1969/70, when the Statutes of the BIS were amended notably by the creation of a third tranche of its authorised share capital, which could only be subscribed by central banks. Private shareholders currently hold only 13.73% of BIS shares, and there is very little liquidity in either of the two markets on which those shares are traded. This situation is due to several special factors pertaining to BIS shares: the number of shares traded on the markets is very small, shares of the different issues are not fungible, and particular formalities are necessary because the shares are only partly paid up. Furthermore, their transfer is subject to the approval of the BIS and also to that of the central bank of the country in respect of which the shares were issued. These structural impediments, which cannot easily be corrected given the statutory mission of the BIS, render it increasingly difficult to create orderly market conditions for BIS shares.

Information concerning the shares to be withdrawn

The issued share capital of the BIS consists of 529,165 shares, of which 456,517 (86.27%) are currently held by central banks, which moreover hold all voting rights.

The 72,648 (or 13.73%) privately held shares of the BIS (ie shares which are not held by central banks) originate from three non-fungible issues traded on two stock exchanges, as follows:

*33,078 shares of the American issue, traded in Zurich (on the Nebensegment/marché annexe);

*16,415 shares of the Belgian issue, also traded in Zurich; and

*23,155 shares of the French issue, traded in Paris (marché au comptant - valeurs étrangères).

The nominal value of each BIS share is 2,500 gold francs, of which one quarter (625 gold francs) is paid up and the balance can be called up at any time at the discretion of the Board of Directors.

[TownCrier's interjection of other relevant BIS material into this press release:
When the BIS's initial capital was issued, the subscribing institutions were given the option of taking up the whole of their respective national issues of shares or of arranging for those shares to be subscribed by the public. As a result, part of the Belgian and French issues and the whole of the US issue are not held by the institutions to which they were originally allocated. In all, some 86% of the BIS's issued share capital is registered in the names of central banks, the remaining 14% being held by private shareholders. While all shares carry equal rights with respect to the annual dividend, all rights of voting and representation are reserved for the central bank of the country in which the relevant national issue of shares was initially subscribed. Private shareholders have no right to attend or vote at General Meetings of the BIS.

The authorised share capital is 1,500 million gold francs, divided into 600,000 shares of equal nominal value (2,500 gold francs per share) of which 529,165 shares are currently issued. They are paid up to the extent of 25% of their nominal value (625 gold francs per share). The amount of the paid-up capital appearing in the balance sheet at 31 March 2000 thus stands at 331 million gold francs.

The gold franc of the BIS has a gold weight of just over 0.29 grams of fine gold, which is identical with the gold parity of the Swiss franc from the foundation of the BIS in 1930 until September 1936, when the Swiss franc's gold parity was suspended. The BIS employs the gold franc solely as a unit of account for balance sheet purposes. ---end of T.C. interjection---]

Practical aspects of the transaction

Subject to approval of the Board's proposal by the EGM on 8 January 2001, the operation will be carried out as follows:

*As from 8 January 2001, only central banks will be able to hold shares in the BIS.

*The BIS will cancel the registration of all private shareholders in the books of the Bank without other formality on 8 January 2001; these shareholders will receive the amount of compensation referred to above upon surrender of their share certificates.

*The BIS will take all steps necessary to end the listing of BIS shares on the Zurich (SWX Swiss Exchange) and Paris stock exchanges (ParisBourse SA) with effect from 8 January 2001. Until 5 January 2001, BIS shares will continue to be traded on these two stock exchanges in the same way as hitherto.

*Shares withdrawn from private shareholders will not be cancelled, but will instead be redistributed among central bank shareholders of the BIS, in the manner determined by the EGM.

Hey FOA...any idea if these affected U.S. shares may then go to direct ownership by Fed (as a quasi public/private entity), or will they go to the Treasury or some other fully public institution?

Peter AsherPH#3644609/11/00; 13:28:07

I think it's 200,000 over the 600,000 that was PROMISED to be implemented should the price rise and hold for so many days. Sounds not like deceptive reporting but rather, defective reporter thinking!
TownCrierPress release: 11 September 2000#3644709/11/00; 13:28:54

Applies to previous BIS post.

(you heard it here first)

KnallgoldPH in LA,oil#3644809/11/00; 13:30:07

Oil has finally decided for euro ,needs now a disinformation/smoke and mirrors campaign for the transition?
Peter Asher714, LeSin, Tom#3644909/11/00; 13:33:13

Le Sin & 714

I'd appreciate your comments on yesterdays theory of the "Low" Euro @ Peter Asher (9/10/2000; 22:12:17MT - msg#: 36409)

Tom: The "Dictatorship" is the Cabal of the Big Money and their Political Cohorts.

Peter AsherTown Crier#3645009/11/00; 13:37:37

Doesn't his Share buy-in break up that Cabal a Tad??
CoBra(too)$-Index at hitting highest ground since 1985 (roughly 165 - low at 78)#3645109/11/00; 13:39:49

- at 115 and scratch - how high can you get? better ask a junkie!
- again, since 1985 was the turning point for the US of being a global creditor nation to today's largest global debtor nation. While, the government's budget surplus is shaping up as a fata morgana of a swimming pool in the middle of the Mojave Desert, it seems as the drop of water the quenched are willing to exchange a drop of the wet sustenance for survival. A kingdom for a drop of water is the recipe' for receiving the desert's sand into your eye.
- The $, has of course not been a drop, nor a trickle, no - it has been an unprecedented downpour in the deserts of devastation by the same, accentuating the sweet but short blooming season, now regarded as the only save grazing and suave meadows of the capital (n-) herds - ever more dependant and caught up by the Voodoo rainmakers of Wall and Main, who'se mad intent to prolong the growing season of the "lush" color of the greenback and offspring Dow, Naz and Lady Tsy, and sweet li'l Deri, sacking them all with the irresistible smile of trillionaires ... of "futures" erosion. As miles and miles of sand - don't guarantee the beach, though the ditch.
Now sand, according to CRB's new cycle highs is becoming more expensive, even if accomodated by rising $'s, at least, temporarily as the paper may trade higer still vs sand - and of course the beach will retreat further and further - until someone comes in and claims the real view of the water - beyond the dunes.
Erosion - a phenomenon only gold escapes - cb2

PS: euro and oil - heading in diametrical oppossite directions - may be leading the way to pricing in real vs relative values!?

CoBra(too)@ Leigh - #3645209/11/00; 14:02:31

Hello Leigh,
missed your mishap - please recover faster than the euro
a/o gold - yours cb2

SteveHPerspective#3645309/11/00; 14:27:04

Another and FOA can be credited with focusing our attention to the following:


Now, in the meantime, what has happened that to break with status quo in all four areas?

Gold -- multi-year lows and manipulated and auctions and concessions on defense
Oil -- multi-year highs and concession on defense.
Euro -- All-time low and who knows what concessions.
Dollar -- Multi-year highs and record trade deficit and low gold prices in dollars.

Boy, did they know some action was about to embroil or what?

BeowulfPrediction on upcoming Bank of England Auction#3645409/11/00; 15:31:30

Since my last two predictions didn't go all that well I thought I'd give it another try.


How's that for a prediction. Now it's time to sit back an see how well I do this time. :)

-It's so cheap they're practically giving it away. Get it while the gettin's good.

Buena FeOil prices surge again despite OPEC's move to raise output.#3645509/11/00; 15:33:52

The following are excerpts form two artilce.....seems like Saudi's still playing all sides.

OEC blamed speculation and high fuel taxes in Europe for much of the firmness in prices. In an official statement, OPEC expressed its "dismay" that European governments seemed unwilling to reduce their fuel taxes to help ease the problem.
Saudi Arabia, OPEC's largest producer and exporter, led the push for an increase in output.
"This is our best assessment of what the market needs now," Saudi Arabian oil minister Ali Naimi said. "It will improve and moderate the price, and if it doesn't we have a mechanism to trigger some more."
In Washington, the U.S. government gave Saudi Arabia credit for the OPEC move but said it is too early to know what effect it will have on inventories and prices.
"Whether such an increase will stabilize the market remains to be seen," Energy Secretary Bill Richardson said. "Nonetheless, this expected production increase will bring needed additional oil into world markets."

2nd Article..........
It is ``our intention to bring the oil price down to close to $25 a barrel,'' Ali al-Naimi, Saudi Arabia's oil minister, told reporters in a separate press conference. ``More oil is coming and it will be 800,000 barrels of new oil,'' he said.

Saudi Arabia, OPEC's biggest producer, said the oil exporters will increase output by 800,000 barrels a day over August production, contrary to earlier statements, which indicated the increase would be over the organization's quota level.

OROI'm Back#3645609/11/00; 16:24:23

some notes on recent events

Had to assist in family illness and had little time to track the board, much less offer comment.

I am glad to see FOA posting as himself again. These long partings make the clarity of FOA's message and its unique perspective stand out all the more.

Welcome back.


Jessica Cross' "Report" is simply an echo of her MAIN client's interests. Surely the noted gold bear would not reverse a decade of advice for the benefit of parties like the WGC that do not have the means to subscribe to her "honest" opinion on a regular basis. Particularly, she would not endanger the survival and reputation of her clients. The WGC, being a subordinate of some clients, is obviously a target for harm - as Ms. Fakuda, its leader, had contradicted the DOGMA of the Bullion banking industry, and thus threatens the credibility of their message just as Galileo threatened the Church of his time.

Her "report" ignores the gold banking business in favor of examining the gold derivatives business. Gold accounts, about which no quantitative public information is available at all, are ignored by GATA and Howe, as well as Ms. Cross.

Reg Howe has shown the key flaw in her dealing with derivatives accounting in the gold market; that she assumes INCORRECTLY that the notional values reported by the US and Swiss authorities and the BIS are cumulative in nature; that both original positions and the trades that unwind them are counted in the notional values. They are not.
The notional exposures are outstanding amounts – not reflections of accumulated trips in and out of positions. These are the UNBALANCED portions of positions. Those in which the dollar side of a trade is matched by gold on ther.
The accounting is specifically structured to minimize double counting, and to highlight mismatches in timing and denomination in addition to mismatches of counterparties. Particularly, the intention is to show the exposure of banks (both long and short) to non-bank entities.
During the period up to Aug-Sep 99 the correlation of price movement to outstanding positions reported as notional values indicated that 25% of positions were long. Of late, it seems that the correlation has shifted since Q2 99 to a 50% long exposure for NEW contracts (consistent with shutdown of activities by some bullion trading firms). The old contracts have been extended (see OCC report) and the composition has changed from futures (delivery contracts) to options (price contracts based on delivery of a futures contract) on the European side.

I have said some months ago, that the European banks had unloaded their gold delivery obligations in favor of options with definite expiration dates but no clear delivery obligation of the metal, but of a futures contract for the subsequent month. The awareness of European banks of the looming assault on the dollar (through a traditional debt trap) and the role of gold in it must have led them to net the gold exposure both to price and delivery. While price can be hedged by the purchase of options, delivery obligations can only be unwound by having another bank take it on in the manner in which Q2 99 showed the Banker's Trust (owned by Deutsche Bank from that point) bullion business end up in the hands of Morgan Guarantee.
Given the lack of breakdown data of non-European positions, particularly of US banks, the bank's delivery vs. price commitments will remain a speculative estimate. However, there is a basic difference in the delivery commitments of the non-EMU banks, judging by Deutche Bank and UBS disclosures. While the EMU banks moved to be committed to deliver dollars and Euro to reflect price changes, the non-EMU banks have taken over the commitments to deliver metal. Most probably, this was a result of an attempt by the key US-Anglo banks to eliminate forced gold buying to cover metal delivery commitments (shorts) by banks in general well before the WA spike in POG and later. This was done in order to prevent a price spike, and perhaps in order to keep financial resources within the banking system, which has become extremely capital intensive due to the transition to same day settlement. Duesenberg (sp?) of the ECB was somewhat distressed at banks clearing the whole of their net assets (capital) daily, speaking of the enhanced stability of longer settlement times and netting (where only the differences in interbank flows are settled, rather than the whole stream).
Going back to Cross’ "report", she has attempted to lead the gold hounds to bark at the tree of price exposure, and argued that theoretical price exposure (where delta hedging works and angels dance on the heads of pins) indicates that there is no fox in the tree, while the bank foxes were teetering on the wee limbs of the metal delivery commitment tree. Note that theoretical circumstances allow delta hedging of a 100 oz original short position in options, by a 30 oz long position (using 1 or 2 year volatilities in the Black-Scholes option pricing model), thus allowing theoretical coverage of the full 100 oz short price exposure with these 30 oz of long gold accounts, bullion, or futures contracts.
Furthermore, the whole of the gold hound pack has followed the trail left by the crafty foxes away from the den, where gold accounts sit with no significant reserves behind them, waiting for anyone to attack, like vulnerable pups.

The greatest misconception promoted by the bullion bankers is that their fiduciary commitments are equal to actual gold in a vault, or at the very least that they are equivalent to gold in the ground. In doing so, they have diverted gold buyers from ownership and possession of bullion, to holders of paper obligations. Gresham's law holds that the bad paper gold would displace bullion out of trade within the system in which it is issued into the periphery and into hoards until no more bullion is available within the system's markets. At that point, further paper gold issues would be discounted against bullion in the periphery and by hoarders (a.k.a. savers) and would dilute the overall value of outstanding paper gold.

While the small innocent gold buyer or seller (all gold miners are small sellers, and are often "innocent") may not be aware of the fact of general insolvency in the gold banking business, they will recognize the low price as a discount and increase purchases without hoarding, and sell gold in premium markets (miners selling futures), the bankers will be aware of their condition. As a result, the bankers would discourage ownership of physical gold and attempt to further influence customers holding gold bars in their vaults to switch from holding gold in the vault (which requires a periodic storage fee) to a paper gold account, or financial instruments. They would offer guaranteed currency returns much greater than available in the markets to anyone willing to sell in size. The banks would also weigh upon the central bankers to make good on their obligations to be lenders of last resort to the gold debt markets. History has shown the central bankers to be reluctant lenders of gold during liquidity crunches. While offering great streams of their currency, they are not willing to part with enough gold bullion to solve the problem once it is recognized (e.g. the WA). The banks would then continue to support low gold prices by selling paper obligations so long as one more ounce is expected to come to market, and they would attempt to limit the small buyers of physical gold by attacking their currency, their credit ratings, the pricing of their exports, and anything else they can do to displace demand and enlarge supply.

Large (100 tonne lots of physical gold) knowledgeable gold buyers that have been willing to spread their demand over 3-10 years by the purchase of gold delivery obligations backed by gold mine delivery contracts, central bank guarantees and bank holdings of customer's bullion as reserves, would disappear from the market for paper gold once they knew that the total available and imaginable reserves have been exceeded. The gold for oil trades presented by FOA would fall into this category, where the obverse of the gold contract is oil delivery, rather than dollars. Under current conditions, it is obvious that paper gold is discounted now to nearly 1/4 in terms of oil, compared to early1999. This implies a current price of $1000 per oz for the oil based gold accumulator of a thousand tonnes per year or more. This would induce bankers to trade intermediate-high numismatic value coins for gold bullion in 400 oz bars, for which they can obtain the high price of $1000 for large lots, rather than $270-$280. This would account for the glut of intermediate-high premium numismatic gold coins, which the European bankers, and others have held since the end of WWI.
The premium price for large lots would be an inducer of banks to increase efforts at consolidating small supplies in order to deliver on their major obligations, and to displace enough gold from current physical depositors to avoid price rises. As currency inflation around the globe promotes the purchase of gold, the demand that must be met at any given dollar price grows while production costs rise with currency inflation and can be met only by the increase of promised currency denominated returns to potential gold sellers. These promised returns would increase the currency inflation, thus accelerating the approach of the breaking point in the market, that point where no further gold is willingly displaced from its holders at any possible currency denominated return.

The result, in terms of currencies of gold producing nations has been that increased gold supply is induced by offering dollar indebted gold producing countries a low currency that increases their dollar supply through increased exports, allowing them an escape from their debt, South Africa, for example, reduced its dollar debt by half. New dollar creditors are rewarded with record low gold prices: in Yen, in Won, in Taiwan dollars, in Saudi Riyals, in Singapore dollars. The EU, though a net creditor to the US, it has enjoyed two decades of growing volumes of imports without a comparable rise in export volumes. That despite maneuvering to maintain positive dollar trade balances. Having negative volume trade deficits, the EU is not rewarded with the record low gold prices that net exporters (by volume) have gained.
The EU, however, is preparing a debt trap on the dollar through the displacement of the dollar from its market share in denominating new international debt. This success has produced a glut of Euro on the markets, and exacerbated the dollar shortage. By my crude estimate, outstanding Euro debt has exceeded dollar debt, thus creating a potential opportunity for a squeeze on the dollar when interest rates in the Eurozone approach US levels, which US direct borrowing in the EU (see recent news of the GSE issuance in Europe) is accelerating. The EU would then have a high dollar income from the current accumulation of US assets, and due to the growth in EU trade balances with the weakening of the Euro. The Euro demand for debt payment at that future point, will meet with a great dollar supply from US assets owned by EU investors. At the point at which the dollar moves down strongly against the Euro, the Arab oil interests will have their excuse for the elimination of the dollar as exclusive currency of the trade in oil. A drop in dollar oil prices would cause the dollars accumulated for the purpose of funding future oil purchases to be released into the markets. The continued rise in the dollar exacerbates the threat of future fund flows imbalances from accumulating dollar sources, declining dollar demand and increasing Euro demand due to greater outstanding Euro debt levels and higher interest rates.

We should remember that dual price markets in gold have existed for prolonged periods, and continue to exist in places such as China and India, along with dual price markets in Europe, where the value added tax (VAT) introduces the price differential between export prices and local consumption prices. Currency control systems end up doing the same in currency markets and banking controls do this in interest markets; e.g. China has uniform bank interest rates on deposits and loans that are imposed by decree. In the meantime, the gray market allows private lenders to obtain a substantially higher interest rate from private and small corporate borrowers, to which the official banking sector can not afford to lend at the government imposed rates.

Note on Exchange Stabilization Fund (ESF) suspected gold market activities:
Using Howe's interpretation of the ESF data, I have calculated a net short exposure of 1100 tonnes of gold in options, possibly reflecting a net 2000-3000 tonne short position that is delta hedged.


For all who were surprised by the oil price rise, it should be noted that black blade has posted extensively on the oil and heating oil shortage developing towards this winter and on the current and long term inability of OPEC to increase production substantially.

The current OPEC production above quota was the major component of the announced increase in the quota, thus implying extra supply of only 200k bbl/day. Supply from declining US inventories is nearing an additional 100k and similar behavior abroad probably echoes a broad expectation of lower prices early next year, contributing another 100 to 200k. Any hickup in supply can spike prices.

It will be interesting to see whether the end of winter fuel accumulation early next year will cause oil prices to drop substantially. If they do, it will be even more interesting to see whether dollar reserves will be dumped by oil importers before the short Euro/long dollar position in the world markets is reversed.

ETMore free trade#3645709/11/00; 16:26:09,1690,Business|28701,00.html

Europe warns OPEC to honour cheaper oil pledge

Prices must return to a level that preserves worldwide
growth, according to an EU statement.

September 10, 2000, 06:49 AM
France (Reuters) - Europe on Saturday urged OPEC to honour promises to curb the price of oil and called for swift action to protect
world growth ahead of a crucial meeting of oil producing nations.

"The current level of oil prices is a major source of concern. Oil prices need to return to a level that preserves worldwide growth," said a
joint statement from the European Union's 15 finance ministers (Ecofin).

Ministers from the Organisation of Petroleum Exporting Countries meet on Sunday in Vienna and are also under pressure from the
United States to reduce oil prices, currently well above $30 a barrel - triple their level of a year ago.

"We expect OPEC to keep its promise that if the oil price is higher than $28 a barrel for a long period they will increase production,"
Dutch Finance Minister Gerrit Zalm told reporters.

But the communique also exposed an internal row over French appeasement of truck drivers protesting diesel prices, with British
Chancellor Gordon Brown vowing not to make policy "on the blockade" and the Dutch also venting naked frustration.

"What we have written in the declaration means that France cannot continue to cut taxes," said Zalm, referring to tax breaks Paris has
announced for truckers who have blockaded refineries and bled petrol stations dry.

"Not everyone is happy about the decision in France. If you talk all the time about coordination in Europe you should inform the others
about such matters." The Ecofin statement said each minister "stated his government's position of no change in its policy on oil taxation
-- for economic and environmental reasons". Coalition governments in Germany, Belgium and France include ecologist parties.

Germany, Spain and Italy argued tax cuts to offset higher energy costs would simply siphon revenue out of the public purse and into the
hands of oil sheikhs.

"Anyone who wants to cut taxes on energy as an answer to higher oil prices has already lost," German Finance Minister Hans Eichel told
reporters. "You would be opening your national budget to OPEC and the oil industry."

ETFuel shortages#3645809/11/00; 16:33:34

From the article;

Motorists around Britain are facing increasing shortages of petrol as
protests against soaring fuel prices gather pace.

Six out of the country's nine oil refineries and four distribution
depots are now subject to blockades by picketing lorry drivers and

Panic buying by consumers has
exacerbated the problem and
hundreds of petrol stations, if they
have not already run dry, have
now resorted to rationing supplies.

The UK government, which takes
almost 80% of the price of petrol
in taxation and duty, has insisted
"there is no quick fix", blaming
high petrol costs on increased oil prices.

wolavkawatch tonites trading globex#3645909/11/00; 16:49:49

dec 279 now breakout, they can't hold it down much longer.

swiss franc to explode to upside, somethings up.

CoBra(too)Austria, the EU and euro ...#3646009/11/00; 16:57:00

Just lost long message in cyberspace - will repeat some time - too late for tonight - ORO, good to see you back.
EU and euro will have another test on Sept. 28 by Denmark's referendum. Until then begnign neglect for the euro - as has happened to the US$ before the 90's, when it had to defend its role as "only reserve" currency - outright war on any potential contender - and don't take any prisoners!
... and Austria will stay the same gentle country it was before the sanctions. Though the EU may experience some changes in perception ... by other members as well ... a socialist blunder undermining the Union and the euro ...
US$-> ;>)
good night - cb2

wolavkaTwo to tango#3646109/11/00; 17:01:05

China and switzerland:
watch these countries big time.

BoxmanMore on TownCrier's BIS post # 36445#3646209/11/00; 17:08:34

Does it appear as if the BIS is positioniting itself for world leadership?
BoxmanLet's try that link again.#3646309/11/00; 17:15:47

My apologies.
LeSin(No Subject)#3646409/11/00; 17:26:59

714 @ Europe Divided & "Political Will"

Thank you for your comments all of what you say is true. The same can be said about the Middle East Countries and factions waring between brothers and sisters. Also civil wars in USA, UK and European Countries.

I focus upon the "New" game in currency and gold, "Not as before" as Another has stated. What unites people, nations more than a "common" enemy that has enslaved them? Love? Respect? Fear of economic survival and an excellent opportunity of removal of a hegemony is the fuel of "political will of Europe and Asian partners to back this new Fiat Currency. Because it provides a "clean start" The Kicker or The Carrot payoff, is to allow "Free Gold" unhindered and not manipulated by the paper derrivative market.

United Europe is a fact, for how long into the future is any ones guess. Europe will unite long enough or for however long it takes to establish a strong alternate currency. That is simply enought to topple the US$ dominance. Asia will support. "S"

LeSinORO - Welcome Home#3646509/11/00; 17:36:21

Thank you for your clarity supported by facts.

There are so many brillent posters on this site, I am reluctant to speak. It is because of the quality of respectful persons in attendance that I fear not in sharing my thoughts and ideas of limited understanding.

Thanks to ALL. "S"

beestingWelcome Back Sir ORO, Great Post # 36456.#3646609/11/00; 17:38:57

I have been watching the FOREX charts today and the picture is clear that the rise in value of the U.S. Dollar is directly related to all the other countries first changing local currencies into U.S. Dollars, and then using the Dollars to buy oil. Therefore as more and more oil is consumed, (fiat)foreign reserves are depleted causing loss of purchasing power in local currencies, and at the same time strengthening the U.S. Dollar.
Even the SDR has lost value in relation to the Dollar. See above URL.
It would seem the price of Gold is also RISE-ING in every currency that's being affected, except the U.S.Dollar.
Those holders of dollars,in the know, are buying Gold....beesting.

Mr GreshamOro! Oro! Oro!#3646709/11/00; 17:57:56

As usual, a quick check of the forum before racing off to pick up kid from school and wife from work reveals a tantalizing bit of after-dinner reading ahead! Welcome home to our generous friend!
JavaMan(No Subject)#3646809/11/00; 18:19:01

Hi TC, in your msg#: 3639, you said "..., at what point will the U.S. be compelled to play ball and return the old favor in the interest of long-term global stability?"

Just some idle speculation but lately I wonder if the US has any intentions to "play ball". By the looks of the demonstrations taking place in Europe this last week over oil prices, it seems that if the POO stays high or goes higher, Europe, with their heavey petro taxes, and perhaps much of the rest of the world would be decimated economically compared to the US. Not unlike the oft repeated tale of the two men in the woods who encounter the bear.

Lady Leigh, Sorry to hear about your foot. I broke an ankle years ago in a freak accident and remember all to well what a hassle it is hobbling around with a cast up to my knee. Get well soon. Oh, yeah...that quote you gave us sounded like something Hillary would say, no? Just not in public.

Oro, Good to see you back sir...hope all is well on the family scene. You said, "The EU, however, is preparing a debt trap on the dollar through the displacement of the dollar from its market share in denominating new international debt...
At the point at which the dollar moves down strongly against the Euro, the Arab oil interests will have their excuse for the elimination of the dollar as exclusive currency of the trade in oil."

As per my speculation above with TC, could the US be using (encouraging even) a high POO as a counter play against such a move by Europe and to head off the Arabs?

Cavan ManHello ORO#3646909/11/00; 18:33:32

Best to you and yours.
JavaMan(No Subject)#3647009/11/00; 19:00:42

Sorry TC, that was msg # 36398
JMBRegarding a very interesting rumor. #3647109/11/00; 19:25:30

Rep Leach, the House Banking Committee Chairman, has accused the Clinton Administration of "secretly" giving some banks approval to buy stocks of commercial companies.

And now the rumor.

The GS gang is buying gold shares. They like the leverage. Gentleman, if this is true, the price of gold is going higher in a hurry.

HI - HATLemming Leadership#3647209/11/00; 19:25:45

Zen in the markets equates to the simple observations, Is
the price going up or down?

Oil - up, CRB - up, Dollar - up. Here in is what is going to get the Global inflation roiling. Many items benchmark price set too pricing in dollars. Price pressures in World reaching critical mass.

The Europeon release today about oil prices and its effect
on World growth is very curious and could turn dangerous
in the future, if there really is a developing oil shortage.
Oil going up is interfering with their pumping taxes on it.

And note, at this time, in the fiasco, not any Leadership suggestions for at least thinking of conservation.

Oh no, this is at the point where it is bad form to introduce anything into the equation, that will disturb
the Virtual dream.

Mr GreshamDamn!#3647309/11/00; 19:42:03


I've gotta stop reading Oro, while drinking Black Butte Porter, while listening to a Tori Amos concert CD. I'm having a peak experience while reading about derivatives!

Sample: "Note that theoretical circumstances allow delta hedging of a 100 oz original short position in options, by a 30 oz long position (using 1 or 2 year volatilities in the Black-Scholes option pricing model), thus allowing theoretical coverage of the full 100 oz short price exposure with these 30 oz of long gold accounts, bullion, or futures contracts."

Damn! That just does it for me! My head feels like a pool table with a master's breakshot caroming around inside it.

(I feel like the grateful townspeople at the end of a Lone Ranger episode: "Who WAS that Masked Man?" Who IS this guy?

Oro -- to follow where your mind goes in one economic day -- there lies either madness, or great wisdom. Salut, brother.)

714LeSin, Peter Asher re: Euro#3647409/11/00; 20:05:04

The Euro is young and still in the process of creation. The old currencies, such as the franc and the mark, have yet to be dismantled. This is neither an easy or simple transition for Europe, and countries like Switzerland and Britain remain "in the cold".

Peter, I've noted your comments and do not take issue with them. Perhaps the weakness of the Euro is a concession to the exporting countries of Europe, but it has brought inflation to places like Ireland. Not a particularly desireable trait in a currency.

Remember, strong currencies make for great powers. History has demonstrated this time and again. First, in the British Pound, and now the US Dollar.

Keep an eye on the Euro's timetable. If these events begin to be put off, the Euro is in deep trouble (see link). The Euro's most difficult days lie ahead.


Remember, it is so important to think for yourselves and to draw your own conclusions. Always seek to verify what others tell you....


714Oro...#3647509/11/00; 20:34:13 said, "We should remember that dual price markets in gold have existed for prolonged periods, and continue to exist in places such as China and India, along with dual price markets in Europe, where the value added tax (VAT) introduces the price differential between export prices and local consumption prices."

I own a business here in America and many of my purchases under the umbrella of that business are exempt from sales tax, which is a local VAT, whereas I pay that tax as an individual. Is that really a "dual price market"?

The price is the same. The tax is different, yes?

andrew the kiwivia le metropole today#3647609/11/00; 21:08:57

September 11, 2000 - Spot Gold $272 unchanged - Spot Silver $4.85 down four cents


The more oil goes up, the more the gold cabal sits on gold. The open interest on Friday went up 7,054 contracts to 135,367 contracts and the volume was over 30,000 contracts - on a small down day in the gold price. That would suggest that the manipulation crowd has had to step up their selling to keep the price of gold from rising, as commodity prices continue their ascent higher.

Can this orchestration of a low gold price be any more obvious?

Today, the CRB roared ahead to new multi-year highs once again and finished at 230.91, up 1.13, while crude oil rose $1.51 per barrel to $35.14. Heating Oil was one better as it rose 5.49 cents a gallon to 104.98 cents. What will the price of heating oil soar to when cold weather appears.

Nickel, zinc, copper, palladium and platinum have made nice to monster moves to the upside. Gold? It keeps going nowhere - to down.

The technicals really are meaningless, but out of habit, here are a few notes. The Commitment of Traders Report released on Friday showed a reduction in the spec short position of about 8400 lots, but the funds are still short about 19,000 contracts which is a bullish plus for gold. In addition, the bullish consensus dropped to a new low at 16%. That is also bullish as that is the second lowest bullish consensus I have ever seen.

Bigger picture: gold appears to be in the process of completing a massive 2-year head and shoulders bottoming formation. This is as good a set up for a sharp move higher in the price of gold as one can have.

Silver just diddles, while its base is even more massive than that of gold. All the manipulation crowd did was buy silver and pop it up 25 cents to squeeze out 25,000 spec shorts. That accomplished, the "cabal" is back to pounding silver again. No different than what they have been doing in gold for years now.


The Café's oil information from your fellow members continues to be a "10." Very few oil analysts out there have nailed this move up as we have - and forecasted the reasons for it to do so.

Here is the latest oil bulletin from one of those sources:

"September 11 , 2000. Based on a detailed evaluation comparing crude oil tanker capacity to current world demand, it appears that the proposed OPEC increase of 800,000 barrels per day production will have no impact on rising prices other than the temporary effect caused by the reflex reaction of uninformed speculators in the futures market. Data shows a shortage of tanker capacity to move the amount of crude oil already available on the market. In short, no one, including OPEC, can physically move more crude oil into the international export market right now.

"A number of factors are coming together to cause an impending price spike that can only be tempered by a severe reduction in consumer demand, primarily in the US."

This source goes on to say:

"Economic recession due to high crude oil prices could be as near as January. New annual budgets for non-petroleum companies will be reconfigured to cover high petroleum costs. New budgets will spawn higher product prices, and result in less expansion and less spending on nonessential items. First items to be cut from budgets will include computer equipment, Internet sites, furniture and construction projects."

Here is another tidbit for you from a different source:

"Just to let you know that I have been in contact with Dr. X and we both believe that sometime soon (September/October) Saddam will cut supplies.

"If he does, oil could go higher than the predicted $50 per barrel, maybe to $60. Imagine the political havoc....." End.

The reason for the special oil focus is obvious. It is heating up inflation all over the world. That inflation is going to put great pressure on the gold cabal and eventually could be the factor that does them in. It is only a matter of time before the gold price follows that of oil, platinum and palladium.


Homestake Mining announced today that it is going to wind down its operations and close its high-cost, flagship Homestake gold mine in Lead, South Dakota, and expects to take a related one-time charge of $43 million in the third quarter.

Another sad day for the gold industry as this mine is 124 years old. The gold pool has done it again by deliberately causing another gold casualty. In 1998, Homestake restructured their mine plan and developed new efficiencies in the hope that the mine could survive long into the future. However, according to CEO Jack Thompson, "the fall in the gold price prevented the plan from working."

Jack Thompson's fine efforts to cut costs all went down the drain. The gold producers would be much better off spending their time, money and efforts in getting the price of gold up than worrying so much about cost cutting that is not doing them all that much good. All they have to do is expose the manipulation of the gold price and that manipulation will end; the price of gold will then fly. A good start would be to focus on Reg Howe's latest essay. He has shown that the gold derivative build up is more market explosive than the gold industry seems, or wants, to understand. Jessica Cross says, in essence that if Reg Howe were correct, the situation would be "alarming." Well, Reg is right and the situation IS ALARMING!

That is why the GATA delegation trekked to Washington to present our "Gold Derivative Banking Crisis" document to the Speaker of the House, Denny Hastert.

Go for it, gold producers.

Gold production is declining everywhere. Brazil's Compania Vale do Rio Doce announced today that they will not meet their gold production targets for this year.

This is a stunner for you. In the 1980's Brazil produced more than 3,527,000 oz/year, while in 2002, total gold production is only expected to be half that.

The Russians, known for their trading prowess, continue to build their gold reserves. Their central bank gold reserves grew by $95 million in August.

The Euro is a real winner. Getting closer and closer to the time when they are going to have to use their gold card to bolster this sagging currency. The Euro is not a sovereign currency. By upping its gold backing percentage, it will give the currency more credibility. At the same time, they should start calling in their gold loans. "Katy. bar the door" when that happens. Gold takes off and the Euro reverses.

It is very hard to comprehend why so few people are willing to accept the fact the gold is suffering from price fixing. As GATA's attorneys at Berger & Montague told us many months ago, "it goes on all the time."

The Securities and Exchange Commission and the Justice Department charged four U.S. options exchanges today with anti-competitive behavior -- in particular, "with refraining from listing options already listed on another exchange. Collectively, they agreed to pay $77 million for new surveillance and enforcement.

Who are the culprits doing the gold price fixing according to GATA? - certain bullion banks we say. We also strongly suggest that the Exchange Stabilization Fund (which takes its marching orders only from the President of the US and the Treasury Secretary) also has a hand in that price fixing. Therefore, it is with great delight that I present you this AP release:

Accusations From Banking Committee

By MARCY GORDON, AP Business Writer
WASHINGTON (AP) - The House Banking Committee chairman is accusing the Clinton administration of ''secretly'' giving some banks approval to buy stocks of commercial companies.

Rep. Jim Leach, R-Iowa, says Treasury Department officials are trying to give banks powers they did not get under major legislation enacted last November allowing them to expand into other financial businesses.

Leach made his objections public Friday in a letter to Comptroller of the Currency John D. Hawke, Jr., whose Treasury division oversees nationally chartered banks. End.

So many get hung up on semantics. When GATA ever mentions the word conspiracy, eyes start to roll in the heads of the uninformed. Of course, if politicians or the mainstream crowd uses that word, that is a different story.

Note this Bloomberg release:

Ford, Bridgestone Withheld Information, Tauzin Says

"Washington: The head of a congressional committee investigating the Bridgestone Corp. tire recall said a Ford Motor Co. memo suggests the companies conspired to withhold information from U.S. safety regulators. Representative Billy Tauzin, citing a March 1999 document, said Bridgestone feared that Ford's move to replace tires in Saudi Arabia would mean they would have to tell U.S. regulators. Federal officials are now investigating at least 88 U.S. deaths that may be linked to the tires, which were recalled last month. ''It's the first clear evidence of an intentional effort to deceive federal agencies chiefly responsible for safety on the highway,'' Tauzin told Bloomberg Television." End.


Placer Dome has calmed down a bit since Thursday when this story was the talk of the gold brokerages:

Placer Dome shares trade heavily on takeover rumours

TORONTO, Sept 7 (Reuters) - An ongoing merger wave in the global mining sector lit a fire under the shares of Canadian miner Placer Dome Inc. (PDG.TO) on Thursday as analysts tagged it as the next takeover target in the shrinking industry.

"The company has been, for a while, the subject of merger of takeover speculation and the intensity of the speculation comes in waves. It has just perked up in the past two days," said one Toronto-based analyst……

"It's a company that makes strategic sense for a couple of potential acquisitors and you could probably say everybody above them in the food chain in terms of market cap would be happy to own the company at the right price." End.

A change of pace gold analysis for you:

My name is Al Micik and I've enjoyed/appreciated the information you have shared with me for many months now. I thought a couple of my thoughts may be of interest to you, your staff and supporters. My thoughts reflect the technical action of the gold market relative to the derivative situation today. Feel free to use this or disregard it as you wish - it's simply my way of saying thank you for your efforts.

This January, 2001, will mark the 21st year of gold's bear market. That's interesting because 21 years is a math number that may lead to the most significant upside move since the golden days of early 1980. Given that bullish sentiment is below 20% for both gold/silver currently, we now find that an 80% bullish level has not occurred since early 1996. Bullish technicals and derivative fundamentals will merge soon, but probably not later than a few months either side of January, 2001.

The fundamentals described in your E-Mails now correspond to an explosive potential when we step back and look at this market as though it were XYZ Stock. Imagine a stock with a short interest that would take 5-10 years of average daily volume to cover all shorts...wouldn't that be an interesting long play? Add to the equation that everyone knows it's a loser. Sentiment is below 20% bulls and has not approached 80% in almost 4 years...still interested? Still crazy after all these years?

Now, the potential disruption for each short position will, when it occurs, be inescapable. What is interesting about this fundamental and technical mix is that the fundamentals could cause the move and the economics of the message might be "short squeeze." The media could rationally argue that this type of upside move was driven by speculators and was not reflective of the economy's fundamentals...and they would be partially right. A great alibi.

But, the move higher will likely happen whether you are bullish or bearish on the "yellow metal." What longs are left given the psychology of this market? They probably are strong now and will look for a solid profit before they sell.

The last note would be to allow for one more low or psychological low into October based on my proprietary work. Once this final phase occurs the merging of the derivative situation and the technicals appears complete and a multi-year bull market should commence.

Best Wishes, Al Micik

The Gold Anti-Trust Action Committee extends a big thanks to German Café member Reinhard Deutsche, who translated a Frankfurter Algemeine Zeitung article from German into English and GATA's letter to FAZ from English into German (see Matisse Table). It was a lot of work and very much needed by us.

I thought you might like to know a little more about Reinhard ( This email address is being protected from spambots. You need JavaScript enabled to view it. ) so I am sharing part of a couple of emails he sent me with you. They are very interesting and revealing:

"Here is another little story, that might interest you. I have written a book about the war against gold and silver, with the title "Die Geldfalle" which means "The Money Trap". At the following URL: you may find more information about the book.

"My publisher has sent the manuscript to the chief economists of 4 large banks here in Germany for review. Of course they all wrote, that the theories in the book are wrong. However Prof. Norbert Walter, chief economist of Deutsche Bank explicitly asked my publisher, not to publish the book (which he did). I take this as a compliment. Isn't it about the same as if the Pope is putting your book on the index? I am selling the book now direct over the internet by guerrilla marketing and it works. Maybe we should do an English translation of it.

"And there is another real story about Deutsche Bank, which was discussed in the gold forum at Wallstreet

"There was a man with the pseudonym "xnickel" (I know him). He had an account with 200 kg Silver at Deutsche Bank Zürich. One day he was informed, that Deutsche Bank had sold the silver and sent him the money. As the reason Deutsche Bank Zürich said they are planning to raise the fees for silver deposits by ten and as silver is a bad investment, this would be to expensive for him to hold. He never gave a sell order. He sent the money back and told Deutsche, that he wants the silver, but they said this is impossible, he has to take the money. He went to a lawyer and later Deutsche Bank in Frankfurt settled the dispute by handing him out its silver (at quite a fee plus Mehrwertsteuer). Isn´t that a clever way to separate uninformed people from their silver? It is almost impossible to buy silver in Germany. The spread is more than 30% and banks do not offer silver accounts." End.

Then, this one today about his conversation with FAZ about GATA's letter that was faxed to the paper:

"I just talked to the Papermaker of today and have also faxed him the English and German version. Papermanager of today is Mr. Beck, with Mr. Stelzner assistant. They both know about GATA.

"The first two (positive) articles in the FAZ were written by Mr. Arndt Hildbrand (hi). He is a freelance writer, with commodities his main subject.

"The last article, with WGC and GFMS, came from Mrs. Bettina Schulz (bes) from London. She got an education in banking, before she became a journalist at the FAZ, and guess where? Right, at Deutsche Bank."

All the Best

My favorites for 2000 so far:

Best title of an email: by Chris Powell
World Gold Council gives up on gold

Best nickname: by Reg Howe
Jessica Double-Cross

Worst allocation of resources: by Anglogold
On their giving 9 million $ to the World Gold Council this year


lamprey_65Gold at a minimum of $1000 per ounce in this bull cycle...#3647709/11/00; 21:10:02

OK, so it's not $30K per ounce -- but I'm only basing this on technical indicators which EVERYONE can see. Let me explain.

There are currently three major up-trendlines for the Dow Jones Industrial Average:

1. What I call the "SuperBull" move since early 1995. This trendline was broken on the downside earlier this year and we've never been able to re-establish above.
2. The "secular bull" move from late '82, early '83. This trendline currently provides the major support below 10,000 - currently this support is around 7600. We could test this support and still be in a bull market since the early 80's.
3. Now the bad news folks. In a major recession in which we pay for our profligate money creation, 7600 will not hold, and it's a long way down from there.
THE most important trendline for the DOW began way back in 1934 as the index began it's slow recovery from the '29-'30 crash. This line has never been broken, but has been tested several '42-'43, very close in '75 and '80, and the last time in 1982.
A retest of this trendline is near....a DOW 2000.

Now, thanks again to MK's Dow/Gold ratio chart...we can expect a ratio of a maximum of 2 when this chart forms the next trough (which it has already begun to move toward) -- which gives us $1000 dollars per ounce gold.

You say 2000 Dow won't happen? Maybe you're right. Maybe it bottoms at 5000 - that means a minimum $2500 an ounce. Make my day!


andrew the kiwi(No Subject)#3647809/11/00; 21:14:35

MariusMr. Gresham's "Damn!"#3647909/11/00; 21:55:30

Mr. Gresham,

One man's porter is another man's single malt. One man's Tori Amos is another man's Diana Krall. Whatever one's taste in adult beverages & music, combine them with a late night dose of Oro on derivatives, and you will slip your brain's timing chain! Born to be wild!


TheStrangerThe Other Nine#3648009/11/00; 22:23:44

There are now only about 2.5 million barrels per day in excess worldwide oil production capacity. Almost all of that is in the hands of the Saudis. A little belongs to the UAE. The other 9 OPEC producers are presently running flat out. None of those nine can raise production overnight. Therefore, none of them can benefit from any near-term agreements to pump more oil. Such agreements can only cost them valuable revenues by depressing prices.

The rulers of these countries are not idiots. They remember well the days of $10 oil when they were forced to sell their most valuable resource for such a small fraction of what Evian gets for water. They are also fully aware of the exorbitant taxes which are levied by opportunistic western governments upon their energy hungry citizens.

I bring this up because we are now being treated to the site of numerous OPEC oil ministers assuring the world of a willingness to pump whatever amount is necessary to bring prices back down. I think this is grandstanding. I don't believe existing production capacity is sufficient to support such claims. Such talk is far more likely, in my view, intended to play to the angry crowds of europeans who have been demonstrating in the streets. By fueling the ire of those crowds against their own governments, the OPEC membership hopes to achieve lower prices at the expense of the energy taxers rather than the energy exporters. And judging from today's acquiescent remarks by the French, there are signs already that this ploy can work.


Amazingly, CNBC seems to have no trouble finding one "expert" after another willing to declare the current price environment just a temporary blip. Furthermore, almost no one on CNBC's air seems to expect any overall inflation to accrue from any of this. At such times, it is wise to ask oneself how many of these sages saw any of this coming in the first place. There are none that I can recall.

Yet this whole experience owes to the most basic of economic principles. When governments allow excessive "money" creation, overall demand for goods and services will inevitably exceed overall supply. In such an environment, some things, and eventually MOST things, must go up in price.


On another subject, nothing captures my funnybone quite like all this talk that if prices don't start coming down soon, the Fed may have to ease. The "theory" is that higher prices act like a tax on the consumer and threaten the economy. Good Lord. Who comes up with this stuff?

Mr GreshamMarius#3648109/11/00; 22:25:35

My Tori? -- I wish... But I'll listen for Diana.

I keep putting that timing chain back on to read Oro for comprehension. Sometime I'll think of an intelligent-sounding question to come back with to show I'm really reading it all... Till then, this jabber...

Black BladeMarius, Gresham, and ORO#3648209/11/00; 22:42:12

Marius and Gresham: OK, I'll settle for some Negra Modelo and a splash of ORO. However, I'm still a Jeanie (I dream of..) and a Mary Ann (Gilligan's Island) kind of guy ;-)

ORO: Welcome back, sorry about the reason for your absence. Your article was a good read, and still digesting it.

Black BladeMarius and Gresham, Ah, make that......#3648309/11/00; 22:46:55

OK, maybe I should amend that to a six-pack of "Moose Drool" and Denise Richards with a 24K "Aussie Dragon" hanging around her neck ;-)
Peter Asher(No Subject)#3648409/11/00; 22:48:32


Re >>>>The "theory" is that higher prices act like a tax on
the consumer and threaten the economy.<<<<

That's one of those half truths. If "consumers" are spending saved money, dollar fixed income or have earnings/profits that are out of the "Wage Price Spiral" loop: then that statement is valid.

However, with most of today's consumption being on *Credit* Then by golly everyone who can jack up their prices or force a wage increase will pay back their loans with cheaper dollars, wind up with more spending money, and we'll have a bigger BOOM!

This couldn't be, now, could it?

GoldflyPeter, Black Blade, All#3648509/11/00; 23:00:33

I'm up way past bedtime, but I'm exploring some "Alternative Energy Sources". I think you'll like this.......

Eat your french fries and drive them too!

Prediction: Crude down $10 tomorrow.

ORO714 - Tax and price#3648609/11/00; 23:04:09


I enjoy your discussions with FOA and appreciate both your thinking and the responses it induces FOA to post.


Tax is part of a final cost to the consumer, and thus constitutes a mechanism for providing some an advantage in cost as well as providing some revenue to the government. VAT and sales taxes are but one mechanism by which different prices are made available to different consumers. "Official" exchange rates and prices are another mechanism, as are subsidies and legal demand or supply constraints applied to some areas and not to others, and regulatory impositions of costs. Aside from these government dictated creators of price differentials, there are natural causes related to costs of marketing, transportation, high real-estate costs, etc..

The price differential that we can point to in gold is that supplying a few large orders can only be done with new mine production and that requires fresh investment, for which the supplier will have to pay. A buyer that asks for 100% of the annual supply in the market will be known, and asked to pay for the thousands of people that will be scraping the low grade marginal ores that must be used for that supply, and for the exploration, equipment/capital costs, etc.. In the case of gold there is a large existing stock that can be tapped at the right price - the price expected to cover the cost of mining the gold that will replace the sold quantity.

The gold seller in quantity will know how long it would take the mines to come up with the gold and at what costs. He will also know that upon putting in a bid to purchase that gold on the public markets, the price would skyrocket and the price action would be exacerbated by the participation of momentum players and broad public buying. If the gold is ever supplied, it will be at the time and at the price that clears not only the large buyer's demand, but also the additional demand that results from the buyer's bid.

Black BladePump Away, but Then What?#3648709/11/00; 23:14:53

Source: BridgeNews

NYMEX Oil Review: Crude reaches 10-yr high despite OPEC hike By Robert Gibbons, BridgeNews New York--Sept. 11--NYMEX Oct crude oil futures ended sharply higher Monday, reaching a new 10-year near-month high despite OPEC's crude oil output hike. The view that OPEC's hike adds few new barrels and news Mexico would not be able to immediately up its production combined to spark the rally. Oct crude settled up at $1.51, or 4.22%, at $35.14 per barrel. Oct heating oil settled up 549 points at $1.0498 per gallon. Oct gasoline settled up 230 points at 97.35. The perception, one that has been advancing among brokers for some time, is that the oil futures markets are now focusing on the demand for products and the inability of refiners to meet demand. This is a shift from a focus on crude supply and OPEC production constraint. "It doesn't make any difference how much crude production is boosted, said a broker. "There are problems that are beyond OPEC's control." Several brokers voiced the opinion that a build in distillate supplies reflected in Tuesday's American Petroleum Institute data will be more important than a build in crude inventories.

Black Blade: BINGO! This nails it! As I have said all along……It doesn't matter how much production is increased, it's a matter of processing it!

Black BladeRE: Goldfly#3648809/11/00; 23:27:24

I have a friend who uses a bit much oil in his hair, do you think that....., Nah! It was just a thought ;-) I had heard of this guy and his mode of transportation. A novel approach, yet not very practical for widespread use. A good way to dispose of used cooking oil though. Biomass fuels are just one of the alternatives looked at by some researchers. Also, today the stock prices of Ballard Power Sys. (BLDP), Fuel Cell Energy (FCEL), Plug Power (PLUG), and Capstone Turbine (CRST)are up sharply today. These Fuel Cell companies could become the next High Tech stock craze with their own absurd valuations. At least they aren't Dot.Coms surviving on a "Wing and a Prayer."
Peter AsherLeSin#3648909/11/00; 23:40:08

Thanks for the response.

Re >>>. Perhaps the weakness of the Euro is a concession to the exporting countries of Europe, but it has brought inflation to places like Ireland. Not a particularly desirable trait in a currency.

Remember, strong currencies make for great powers. History has demonstrated this time and
again. First, in the British Pound, and now the US Dollar. <<<<

First of all "great powers" don't necessarily have a well fed clothed and sheltered population. For example the USSR folks spending the 2nd half of the century standing on line for bread and milk while they "Ruled" half the world. Maybe in this newer paradigm of interdependent global trade a great power is one who can sell all it produces and buy what it needs from outside. The Eu economy does not have the debt trap hanging over it's head that the USA does. Over the long run, the way the EU is playing it may make them the greater power.

Next, From ORO's post today Is the following:

>>>>>The EU, though a net creditor to the US, it has enjoyed two decades of growing volumes
of imports without a comparable rise in export volumes. That despite maneuvering to maintain
positive dollar trade balances.<<<<<

The leaders of the Euro countries must balance the factors of keeping their workers employed and producing, having the credits to purchase the resources and products needed from outside the EU, and, food and shelter for their freeloaders. If a low Euro is what it takes to keep their people affluent as regards domestic purchases, than that's their best option. It's "The Money Changers" that are left whining on the Temple steps and complaining about Schroeder's statement.

That fellow running the show in Malaysia is a Hero for telling the IMF to "Stuff it." He's got a peg on the currency and they said "let it float and we'll "Fund" you. That's as in, loan, interest and maybe foreclosure, they weren't offering a gift. The surprise should not be that the Ringgit is pegged, the surprise should be that all the other guys are letting profiteers play with their money and selling their souls to the IMF to finance that game.

The one major economic calamity that I seldom see mentioned on this Forum is when the World let private entities trade currencies for profit. Every purchasing credit gained this way comes out of some producers pocket.

Oh yes, I'm not up on the Irish inflation problem and am curious as to why, or if, it is of some concern to the EU.

I'll go check out that link now, thanks.

Black BladeRest of OPEC Production and Refinery problem article#3649009/11/00; 23:45:55

Source: BridgeNews

The perception, one that has been advancing among brokers for some time, is that the oil futures markets are now focusing on the demand for products and the inability of refiners to meet demand. This is a shift from a focus on crude supply and OPEC production constraint. "It doesn't make any difference how much crude production is boosted, said a broker. "There are problems that are beyond OPEC's control." Several brokers voiced the opinion that a build in distillate supplies reflected in Tuesday's American Petroleum Institute data will be more important than a build in crude inventories. Crude settling above the $35 was after reaching a new 10-year, near-month contract high of $35.85 per barrel. The 5-cent rise in the heating oil contract was demonstrative of its position as the dynamo behind the current strong oil futures complex, brokers said. Refinery usage in the U.S. is near 100% and demand from the strong worldwide economy continues to outpace refiners ability to produce, in the view of brokers. "Every week we fail to build heating oil inventories is another week for the market to worry that we aren't going to have enough supplies when it gets cold," said a broker. "This is definitely a demand induced market," said another broker. He agreed with the view that even if substantial supplies of crude oil arrived at the New York Harbor tomorrow, the market might still be driven higher on the surging demand for refined products that refiners are seemingly unable to meet. The Saudi's, estimated to have 2-2.5 million barrels of spare production capacity, are the only OPEC producer with significant untapped capacity left to add to the market, according to most industry observers. OUTLOOK Tuesday's focus will be on clarifications from OPEC, especially Saudi Arabia, on whether the OPEC production hike will really mean new barrels make it into the market. In addition, Tuesday afternoon's API inventory data release will be anticipated. That sets up the possibility of another choppy pre-API Tuesday session, with traders wanting to avoid taking to positions too far in either direction ahead of the data release. IN
Simply Me@The Stranger...It's even worse than that!#3649109/11/00; 23:59:40

You said in post #36480: "There are now only about 2.5 million barrels per day in excess worldwide oil production capacity. Almost all of that is in the hands of the Saudis."

Hi Stranger,
If what Black Blade commented on a few days ago is true (and I believe it is) the Saudi Arabia produces a heavier crude, unsuited to the gasoline refinery process. It's primary market is Asian factories and power plants.
POOF...all the oil production increases disappear into the hot air used to produce them!

Interesting times are a comin'. Plenty of folks will be glad for that woodburing stove they installed for Y2k preparation.

Thanks for all your good work here!
simply me

Simply MeThat should be...#3649209/12/00; 00:02:54

POOF...all the oil production increases disappear into the hot air used to promise them!

There...that sounds better. Sorry for the goof.
simply me

Black BladeOh Boy, Here's a Cheerful Site.#364939/12/2000; 0:29:11

Looks like I die on April 15 th 2010. At least I might be able to cheat the Taxman :-)
Hard assets...Easy accessCentennial Precious Metals, Inc.#364949/12/2000; 1:11:44

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TownCrierHEADLINE: Uncertain US inflation outlook among risks to markets -- IMF#364959/12/2000; 1:47:57

Reporting on conditions and events that could unsettle world markets, the International Monetary Fund cited the potential increase in U.S. inflation (meaning rising prices as used here, where rising consumer demand is not offset by productivity) "and the consequent spike in interest rates" as among major risks.

The IMF said last year's currency market tensions have intensified, and that "the growing external deficit implies that the dollar might weaken against other major currencies in the medium term."

Perhaps most ominous of all, the IMF reported that international investors, with their ample funds from the U.S. trade deficit, now prefer stocks to government bonds, with foreign investment in U.S. corporations exceeding that of U.S. Treasury bonds by 25% last year.

Knallgold@wolavka#364969/12/2000; 2:11:30

Particularly Zürich,yes?
Black BladeFor Those Who Think That The World is Awash in Oil#364979/12/2000; 2:14:32

I may have posted this before, however, in light of the recent OPEC production increases and the reaction of the world markets, it is worth reviewing. - Black Blade

Do the World Oil Producers Really Have the Capacity for long-term Increased Production?
by Dick Wiese, President Texas Western Reserves

In the early 1970's oil prices were pushed up because OPEC could control 36% of the World's needs. A fresh flow of oil from Alaska and North Sea production caused prices to drop. The next crunch was of long duration caused by International political agreements to keep production in line with growing consumption. Experts at different times have predicted that crude oil could be plentiful for 40 - 60 years. This assumes the world's proved reserves estimate is correct and that world consumption would not increase. Some now believe we are only a few years away from peak world production. When this is reached, the world's production capacity will, for the first time, begin a slow decline. World consumption is growing at record levels, along with the beginning decline of global production capacity, which can only mean future higher world prices.

Most often companies or countries exaggerate the estimates of the reserves they control or own. Export quotas are often set by a percentage of total reserves claimed. Few major discoveries or other breakthroughs justify the unprecedented growth of estimated oil reserves. It could be reasonable to assume that world consumption is three times the amount of new discoveries which peaked in the 1960's. There was only so much oil placed in this earth, and many believe world exploration has discovered about 90% of this total. Some countries cannot think of increased production in the face of their own supply depletion. Norway, the world's second largest producer, has not closed a single well by government order. They support production curbs and higher prices as their old giant fields' production fall, despite every effort to stabilize. Mexico's internal audit in 1999 fell from 49 billion barrels to 28 billion barrels. It now appears this country's production will soon begin to decline. Venezuela's officials now speak quietly of reduced production capacity. China's hope of being an oil exporter has faded. China's deficit between production and consumption by 2005 is expected to be 2 million barrels per day. Prudhoe Bay, along with other area sin Alaska, has excellent oil reserves. Reserves mean nothing when emotional drilling restrictions keep the Alaska Pipeline only 1/2 full.

Americans have strong desires and habits that make it a good market for world crude oil. About 58% of oil consumed in the U.S. is imported. This number of rigs actively exploring for oil and natural gas this week rose by 22 to 893. The total a year ago was 563, far below the record of 4,530 on December 28, 1981.

Could it be that OPEC and other oil producing countries can seek their peak production coming and see no need to speed up the timetable by opening the valves for that very important commodity, crude oil. U.S. Energy policies, or the lack of them, fill the Editorial pages on a timely basis. Even the New York Times took the Federal Government to task over energy policies in an Editorial. "Unless Washington stops focusing on the prices at the gas pump and starts looking at the prices and dependency just over the horizon, the United States will be in deep trouble again." This appeared on December 29, 1986. It is clear the U.S. has no Energy Policy. Everyone is in the Energy Business, either as a consumer or a producer. It depends on which side of the pump or end of the pipeline your ownership is located. Does all of this information present an Energy crises or an Energy opportunity for American investors? It is out there wells need to be reentered, deepened, or drilled. Capital from the private sector is needed. America is one of only a few countries that allows individuals to own part or all of Oil and Natural Gas wells. I suggest partnerships between strong, good domestic independent oil and gas companies, and the American Investor will be profitable and will be part of the Energy Solution.

Black BladeGold & Silver Trading Volumes Decline#364989/12/2000; 2:32:25

When last month's report of a sharp decline in PM market trading activity was released, I wasn't all that surprised. Jeff at CPM Group thinks he has it figured out. personnally, I think that more and more investors and traders are wising up to the manipulative scams in the bullion market and with recent defaults and margin setting schemes on the TOCOM and NYMEX for Pd, many simply are getting cold feet. That as well as what Jeff describes below are contributing factors. Now many have migrated to the petroleum pits while waiting for honesty to reassert itself in the bullion market - Black Blade

by Jeffrey Christian, editor CPM Group's Precious Metals Investor

In recent months, the gold and silver markets have seen a marked decline in the level of trading activity. In the London bullion market, trading volumes in both markets essentially peaked in late 1997. Gold market activity experienced a brief surge in the second half of last year, as the gold price rallied sharply at that time, but for the most part daily turnover has been falling for much of the past three years for both gold and silver.

Since October 1996, the London Bullion Market Association (LBMA) has been publishing monthly statistics on the average daily turnover in the London bullion market, as well as the value of the metal transferred and the number of transfers. The average daily turnover in the London gold market reached a new low in July 2000, falling 27% to 20.5 million ounces from the previous month. On a year-over-year basis, daily turnover was 41% lower. For the silver bullion market, average daily volumes in July were off 4% from the previous month, totaling just 93.3 million ounces. Compared to the year earlier period, silver turnover was less than half the 191.3 million ounces cleared on average per day in July 1999. (It should be noted that the lower trading volumes are not limited to the London markets. In the first seven months of 2000, trading volume in gold futures on Comex volume in gold futures on Comex was 22% lower than in the similar 1999 period, while trading volume in Comex silver futures was off around 21% during this time frame. The London market is much larger, however, with the amount of gold cleared in 1999 between London banks 4.4 times the combined level of trading volume in the New York and Tokyo futures and options exchanges. For silver, the London market was 1.9 times the combined size of the other major trading centers.) One reason for this was the sharp rally in prices last September and October 1999, when gold prices rose from $255 to $399 in a matter of days, and silver prices surged from $5.11 to $5.95 during this time. Many traders who had been short these markets were faced with massive margin calls, liquidity crunches, and forced liquidations, causing major losses at many bullion trading operations. Prior to this time, many traders used a leverage factor of 5 to 10 on their gold and silver books, which meant proportionately higher trading volumes. This leverage factor has been recently lowered in light of the losses of the past 12 months, thereby reducing the total amount of gold turnover. In fact, many proprietary traders have or are pulling out of the market entirely, and several major banks have effectively closed or cut back their bullion desks. This should not be seen as a negative for the gold market, though. Insofar as it was largely these market participants who had been responsible for much of the bearish commentary surrounding the gold market, and the proprietary short-selling that pushed prices to 25-year lows, the exit of many of these entities actually is positive for gold prices. Finally, it should be noted that the trend of decreased market activity has been somewhat self-feeding. The lower trading volumes and volatilities have contributed to range-bound trading patterns and reduced profit potential. In turn, the level of speculative interest has fallen, contributing to the more pronounced drop in trading volume seen recently.

Black BladeOil Still Rising#364999/12/2000; 3:53:47

Brent North Sea is up +$0.68 at $34.30/bbl, and NY Light Sweet Crude is up +$0.59 at $35.73/bbl so far in over night trades. $40.00+/bbl on the horizon. But PMs are comatose.
wolavkaknallgold#365009/12/2000; 4:14:50

yes my friend!!!
TopazSteveH - Oro#365019/12/2000; 4:26:50

Yes Steve, we do owe A/FOA a debt of gratitude - There seems to be a few posters both here and "over there" dismissing the AU/Oil relationship lately.
One doesn't have to use too many brain cells to correlate the current up-move in Oil to:- (1) The WA or (2) The drawback in forward selling of Au "in-the-ground" due to the low POG Hey? (unlike trying to get your head around ORO <smile>)
Welcome back ORO!! ---- good to see you in print again. Family ALWAYS comes 1st.

SteveHRepost#365029/12/2000; 5:06:10

this is a repost:

Date: Tue Sep 12 2000 06:53
rhody (The gold market is doomed.) ID#410367:
Copyright © 2000 rhody/Kitco Inc. All rights reserved
Why? The spot price is a fixed arithmetic function of the
one month futures. The one month futures must decline because
of the way commodity markets are set up. The one month futures
price is an opinion of market direction based on the number of
options to sell compared to the number of options to buy.
There will always be a surplus of sell options since short
sellers never have to actually borrow the metal to carry out
their threat to sell, while people on the long side of the
transaction at least have to come up with money. These "threats
to sell" vs "threats to buy" are the means to set the spot
price. Some people call these contracts paper gold.
Paper gold contracts can be created ad nauseum, with the
advantage always on the short side of the market.
So the spot price will always decline, even in the face
of deficits of supply because this is the way the pricing
mechanism has been set up. The spot price is a manipulated
paper illusion, and always declines as a reflection of the
surplus of paper gold rather than a surplus in the real world.
The problem is, bullion dealers, and mines must sell physical
as if this spot price is reality, and will until they are
driven into bankruptcy. My question to you trader types out
there is why on earth do you buy mining shares, which actually
are triple leveraged to magnify these manipulated losses on
the spot "price".
This nonsense will go on until every gold and silver mine
on earth is driven out of business, and even then, the market
will show no increase in spot ( although margins on futures
contracts with be sky high, allowing commodity markets to
pocket the money that should have been going to mines and
physical sellers, just like the present situation in palladium. )
In this way, the powers that be defeat inflation by hiding it
in the murky confines of commodity margin accounts.
Any paper long ( shares or options ) will lose his shirt in
this market, while paper shorts will be let off the hook with
a paper settlement when this market finally dies. Good riddance.
The above thread also means that big forward sellers like Barrick
are correct in their strategy of selling as much now before
the paper price declines further. The Barricks of this world
will hold out the longest, but in the fullness of time, they
too will die

The Invisible HandFOA come back, they're crazy!#365039/12/2000; 5:31:19 AP International
AP-NY-09-12-00 0551EDT

Fuel Protests Spread Disruption
Associated Press Writer

LONDON (AP) -- Protesters and union leaders called
Tuesday for European governments to slash fuel taxes,
vowing to continue demonstrations that have snarled traffic,
blockaded refineries and led panicked motorists to stock up
on gasoline.

As traffic jams spread in Britain, Prime Minister Tony Blair
cancelled a planned trip to the north to hold emergency
meetings with key ministers on the fuel crisis. Queen
Elizabeth and her senior advisers gave the government the
go-ahead to employ emergency measures, but officials had
not specified what those steps might be.

Truckers, taxi drivers, farmers, tour operators and others
who claim that high oil prices are hurting their businesses
continued protesting in Britain, Belgium, the Netherlands and France.

''More and more people are joining us all the time,'' said
Nigel Kime, spokesman for British Hauliers United, a
transport union. ''We plan to affect major roads and are
making sure all the areas where the fuel is are targeted.''

Across Britain, thousands of gas stations were closed
Tuesday, and tanker fleets remained at a standstill. Some
hospital patients faced delayed surgeries as ambulances were
put on an emergency-only schedule. Police early Tuesday
cleared the route to one oil terminal in Norfolk, but they had not moved against protesters elsewhere.

Similar traffic jams and protests were reported in Belgium
and the Netherlands.

Both the British and German governments said they would
not follow the example of France, which agreed to demands
to subsidize fuel prices.

''We cannot and we will not alter government policy on
petrol through blockades and pickets,'' Blair said.

Only one in 10 British gasoline stations had any fuel left, and many of those that remained open had only diesel, according to automobile clubs and oil companies. Texaco spokesmen said that 350 of its stations, mostly in Wales and southwest England, were out or nearly out of fuel. A spokesman for Shell said 520 of its filling stations were in similar straits.

Secretary of State for Industry Stephen Byers said the
government ''will take whatever steps are needed to ensure
that priority users such as the health services, schools and
public transport are supplied with fuel.''

A decision by the Organization of Petroleum Exporting
Countries to raise its production quota by 800,000 barrels a
day had no immediate impact on the protests, although it did
send October contracts of North Sea Brent crude down 45
cents to $32.33 a barrel on the International Petroleum
Exchange in London.

''The sensible way, the only right way to deal with this
problem, is to put pressure on OPEC,'' Blair said.

The German government also resisted the pressure.

''I see no reason at the moment why we should compensate
for this through taxation,'' German Transport Minister
Reinhard Klimmt told ARD television.

Despite the French government's concessions, protests
continued there. In Belgium, protesters blocked the country's largest oil refinery and main arteries in the capital. Several hundred truck drivers continued to jam main roads leading to downtown Brussels.

Some 20 trucks also cut access to the country's largest oil
refinery south of Brussels, near the city of Charleroi.

In the first Dutch protest Monday, several dozen truck drivers blocked a major freeway in the Netherlands. If the protests drag on, ''measures will have to be taken,'' said Dutch police spokesman Willem van Hooijdonk.

Clint HMexico to Abandon OPEC Deal? #365049/12/2000; 5:38:11

Mexico to Abandon OPEC Deal?


Mexico's Zedillo government appears to be concerned that oil prices have climbed too high, threatening Mexico's commercial and political interests in the United States. With the U.S. elections only two months away, Mexico may increase its oil exports as much as possible in order
to score political points with Democrats and Republicans in Washington, D.C. - where soaring domestic gasoline prices are a hot political issue. The Zedillo government may also be seeking to shore up the peso against potential speculative attacks in the early weeks of the incoming Fox Administration.

C.H. Can Mexico produce this much more?

tedwOil and gold#365059/12/2000; 6:08:33

The last time I filled up at the pump gas was $1.87.Unleaded was $2.00.

Energy costs effect my business. Im going to have to raise my prices to compensate at some time. Im sure there is another UPS or airborne increase on the horizon. Postal rates should be going up too then.

Can the paper gold market resist these kind of obvious inflationary pressures?

Just what will it take for this Gold market to shake lose?

Its enough to make a person to doubt themself.

wolavkahang on#365069/12/2000; 6:30:31

Black Blade"Morning Wakeup Call!"#365079/12/2000; 6:42:37

Sources: BridgeNews and CnnFN


Asia Precious Metals Review: Spot gold eases in thin trading
By Mari Iwata and Polly Yam, BridgeNews

Tokyo--Sept. 12--Spot gold eased in Asia on Tuesday due to currency-related selling from Australia, dealers said. The selling was not aggressive but it was enough to push down the price amid thin trading conditions, they noted. Market sentiment on gold remained bearish with dealers expecting the price to move within a narrow band of U.S. $271.50-273.50 later Tuesday. Spot gold opened in Asia at around $273 per ounce and stayed at that level for much of the morning with thin trading interest from dealers. But, the gold price fell to about $272.30 per ounce early in the afternoon as a result of selling from Australia, dealers said, adding the selling was triggered by the weakness of Australian dollar against the U.S. dollar. They said the price of gold could continue to be capped by the strong U.S. dollar against other major currencies in the near term. Chinese communities in Asia were virtually absent from the precious metals market on Tuesday due to the Chinese Mid-Autumn Festival, dealers said. Owing to the local holiday for the festival, all markets were closed Tuesday in Taiwan and will be closed on Wednesday in Hong Kong. Trading of spot silver, platinum and palladium was extremely quiet, according to dealers. As many players in the Tokyo Commodity Exchange (TOCOM) joined the trading rally of TOCOM gasoline and kerosene futures following prices rises of the futures and recent global protests against high crude oil prices, trading of TOCOM precious metals futures remained quiet for much of Tuesday, TOCOM dealers said. TOCOM platinum and palladium futures fell on profit-taking following overnight NYMEX price falls, while TOCOM gold futures were mixed, the dealers noted. TOCOM dealers expect trading of gold futures to remain sluggish until the completion of the planned auction by the Bank of England on September 19. "It's normal that speculators are reluctant to take positions before the auction," a TOCOM analyst said. He sees gold prices rising after the auction given its stable price movements over the past few days. Spot precious metals prices are in U.S. dollars per troy ounce.

Black Blade: Sluggish until the BOE auction. Maybe the horrific rain storms and weather related havoc throughout the Western Pacific Rim has something to with as well. Hmmmm….. Meanwhile, gold is up against most currencies except the dollar and yen. In that light, gold isn't so bad as a bit of insurance. Hey, it could be worse, I could be holding Euros, Brit Sliders (pounds), Aussie Pesos and Canadian Loonies, or any assortment of colored worldwide toilet paper with pictures of dead and inbred (monarchs) people printed on them.


Russia's Vneshtorgbank says exported 5 tns platinum in 2000

Moscow--Sept. 12--Russia's Vneshtorgbank, which is 99.91% owned by the Central Bank of Russia (CBR), has so far this year exported 5 tonnes of platinum, President of the bank Yury Ponomaryov said Tuesday. He said the bank planned to boost exports in 2001 but gave no figures. All the platinum exported by Vneshtorgbank is supplied within the annual quota held by the CBR. (Story .13984)

Black Blade: 5 tons? Whoopty doo! And they're proud of that?


S Africa's mining output slips 1.8% qtr/qtr in 3 mths to July

Johannesburg--Sept. 12--South African mining production fell a seasonally adjusted 1.8% in the three months ended July 2000 compared to the previous three months, due to a 5.4% decrease in the production of gold during the review period, according to Statistics SA (Stats SA). (Story .13922)

Black Blade: Less Au production. Homestake is closing their flagship mine in Lead, South Dakota. A loss of 1.4 million ounces!


Oil prices carry on rising London crude futures up despite OPEC accord; high prices expected to persist
September 12, 2000: 7:44 a.m. ET

LONDON (CNNfn) - Crude oil prices climbed in London Tuesday morning as analysts predicted that last weekend's agreement by oil cartel OPEC to raise output by 800,000 barrels a day would not be enough to burst the fuel price bubble. Brent crude for October delivery was up 24 cents at $33.86 per barrel, slightly below its highs earlier in the day, but still within sight of the 10-year peak of $34.55, reached Thursday.

On the New York Mercantile Exchange late Monday, U.S. October light sweet crude rose $1.51 to $35.14 after climbing as high as $35.85 earlier in the day. "People don't believe that 800,000 barrels is really going to do the trick," Charlie Sharp, an oil analyst for Canaccord Capital Europe Ltd., told "It's not just as easy as turning on some taps," he said. 'Three-month wait' for extra output. Sharp said that with transportation and refinery run times, it could be another three months before any extra oil reaches the global market. Pumps in some towns across Europe were running dry and other gas stations were closed as businesses affected by high oil prices continued to protest by blockading refineries, oil distribution facilities and roads in France, Belgium and Britain. Panic buying by motorists anxious to buy before the gasoline runs out exacerbated the problem and led to long lines at gas stations. Sharp said he doesn't expect Brent crude to fall below $30 in the near term, especially with U.S. crude oil and heating oil inventories relatively low ahead of an expected seasonal upturn in demand as winter approaches. He added that a return to what he calls "sensible" prices of around $25 could be seen over the next 12-18 months.

Black Blade: Fuel price bubble? What's happening in Euroland looks a lot like the days of the Arab oil embargo in 1973. Recession is now around the corner. More oil aint gonna do it! Besides, the Saudi oil is heavy sour crude and more difficult to process. Get yourselves a set of both even and odd license plates so your prepared for rationing ;-)

Meanwhile, S&P Futures are +2.14, Fair Value +5.14, looks like the sheep are oblivious to the slaughterhouse on the right and the wolves on the left as the market should open higher. Au is up 40 cents, Ag up 3 cents, Pt down a buck, and Pd (for what its worth) is up $5.00. Get your PMs cheap while you can! Brent North Sea is off 2 cents at $33.60/bbl, NY Light sweet Crude is up +$0.26 at $35.36/bbl running headlong into $40.00/bbl. Expect a lot of meaningless news of discoveries, etc. in an effort to cap the price - Baloney! And NG at $5.05 Mbtu and going much much higher!

ETSean Corrigan#365089/12/2000; 6:59:42

From the article;

"The next time Greenspan panders to the Beltway and gives us some
technobabble about the New Economy and draws attention to whichever
statistical fiction currently shows the least deterioration in price
patterns, remember Arthur Burns was the man who invented "core"

"As Steven Roach of Morgan Stanley Dean Witter has recently reminded
us, Burns went on to take oil, food, mobile homes, used cars, purchased
housing, jewellery, and children's toys out of the basket before he had
finished. Miller's subsequent, brief, interregnum bears even less
scrutiny. CPI ended up at 12.2% in 1974 and hit 14.6% in 1980 before
Volcker finally bottled the genie back up by throwing the credit engine
grindingly into reverse, stripping the gearwheels of malinvestment from
Vera Cruz to Vermont, and from Paris to Peoria, in the worst recession
since the war.

"Ask yourself whether you think Greenspan and Duisenberg most closely
resembles Burns or Volcker? Then ask yourself how well off we would be
if we had neither of these monetary Magi with which to contend, but had
honest money instead."

Black BladeFun In the UK!#365099/12/2000; 7:26:10

Brit Slider is testing $1.40. Captain Tony is facing mutiny on the SS Britannia and going down with the ship. And the fuel shortage is looking UGLY! Labour is outta there come next election!
wolavkagold bye to low gold prices#365109/12/2000; 7:37:39

nice knowin ya.
Black BladeBridgeNews stories in the works! Think They're Worried?#365119/12/2000; 7:43:03

Source: BridgeNews

--Clinton urges energy conservation steps to curb US oil use
08:31:06 --Clinton: US "can get through" winter heating oil supply demands
08:30:18 --Clinton watching oil prices "very closely"; reviewing options
08:29:38 --Clinton ties high oil prices to strong EU, US, Asia economies
08:28:44 --Clinton says depleted US oil inventories must be replaced
08:27:51 --Clinton sees US heating oil reserve filled by end of October

Black BladeAu up +$2.50!#365129/12/2000; 7:53:47

Gold is getting a little Frisky this morning!
wolavkagold is cheap#365139/12/2000; 7:56:42

@ 360.00
schippi@Black Blade#365149/12/2000; 8:31:58

..... colored worldwide toilet paper with pictures of dead and inbred (monarchs) people printed on them.

BEST definition of fiat currencies that I have encountered.
Ps. Thank You for your many and outstanding posts.

Black BladeIndian Demand Rising and Lifting Gold!#365159/12/2000; 8:34:34

Indian Gold-Buying by jewellery makers spurs demand

MADRAS, India, Sept 12 (Reuters) - Active buying by Indian jewellery manufacturers ahead of the festival season is spurring demand for gold, traders said on Tuesday. ``The physical market has picked up with manufacturers supplying to retailers buying more raw material in anticipation of the festival demand and I expect this to sustain at least until Friday,'' said Daman Prakash, a leading bullion trader. Gold demand in India, the world's largest consumer, usually peaks during the festival and wedding season that begins in September. ``And though there will again be a bit of a dullness from Monday until the end of this month because of local cultural reasons, I expect the period from October 1, with festivals and the marriage season following, to be quite buoyant until January,'' Prakash said. Domestic gold demand has been depressed in recent months because of high international prices and the weakness of the Indian rupee against the U.S. dollar. ``The rupee is a little stronger now and, with gold prices being lower, have ensured good buy levels, up about 20 to 30 percent from last month, and we are optimistic this trend will continue for three to four months,'' said a dealer at an importing bank. The Indian rupee, which had lost 5.6 percent at its low from its January levels, has partly recovered against the dollar in the last two weeks, strengthening to around 45.59 per dollar, in Tuesday afternoon trade. Traders said domestic bullion prices had also softened in expectation of next week's Bank of England auction. The British central bank is set to offer about 25 tonnes in its third in a series of six gold auctions, for 2000/2001, on September 19. ``The prices are down now as everybody knows there's an auction next week but I expect a bit of upward movement from next week as speculators, who would have had daggers hanging over their head until the auction, begin to get active,'' Prakash said. ``And everyone also knows India's physical buying is set to peak in the coming months,'' he added. Spot gold opened lower at $272.50/$272.80 a troy ounce in Europe from $273.10/$273.40 at Monday's New York close. In Bombay, one gold bar of 116.64 grams was selling for 52,500 rupees, unchanged from Monday's close. India officially imported 573.8 tonnes of gold in calendar 1999, down from 613.7 tonnes in 1998, according to the industry-funded World Gold Council.

TheStrangerSimply Me#365169/12/2000; 8:46:54

Actually, Saudi crude IS suitable for refining into gasoline. It just requires more processing due to its higher sulpher content. For this reason, it is uneconomic for shipment to the U.S. It can be and is, however, used for gasoline elsewhere. For that reason, its availability still impacts world prices just like that of any other crude.

Thanks for your contributions, too!

Black BladeIt's Because the Demented Bumbling Child-King Says So!#365179/12/2000; 8:51:28

Billy-Bob (an admitted liar) stands out by the "cement pond" and declares that the oil picture is just peachy and the petroleum prices start to tank. What's wrong with this picture?

I see how it pans out tonight. "I owe, I owe, so off to work I go"

wolavkaslugs @ comex#365189/12/2000; 8:53:05

We know where 279 is , punch it over 282 and then I'll try 284
CamelHeavy Crude#365199/12/2000; 9:03:38

For what it's worth,the senior oil analyst for one of the big commodity trading houses said on CNBC yesterday that Saudi heavy crude is suitable for refining into US heating oil.
USAGOLDOil Crisis Worries Drives Gold Higher#365209/12/2000; 9:12:09

Note: For an information packet on gold ownerhsip through USAGOLD/Centenntial Precious Metals, please go to the link above. If you like the type of commentary you see below, you will gain much from our monthly newsletter, which features this month an examination of the oil crisis as it relates to gold. MK

To USAGOLD/CPM Clientele: The September issue is at the mailing house and will in the hands of US Postal Service today or tomorrow.


(9/12/00) . . .Gold was up strong in the early going. There is little doubt that this move is related to the developing oil problem which could translate to more pervasive economic problems around the world going into the fall and winter.

The following list of headline links at the Drudge Report this morning tells better than I can what's going in oil-dry Europe and what Americans might have to look forward to if the situation if things do not improve. . . and quickly:












Meanwhile back at the ECB intervention might be in the works. The rise this morning too large and counter the trend to be simple market action -- at least in our view. Wim Duisenberg was quoted this morning as saying inflation will stay above 2% in Europe due to the weak euro and the high price of oil. AP reported the prospect of intervention with a quote from European Commission head, Romano Prodi that the euro was "disappointingly low" and that intervention by the United States was in its own best interest. `There remains doubt in the world whether the Europeans really want to see this project through, and this doubt must be banished,'' Hans-Juergen Koebnick, head of the state central bank for Rhineland-Palatinate and Saarland, told Associated Press.

With all eyes on Europe, highly respected international political analyst Andrew Rothovius warns "something very big is happening in Asia." He lays out the case for a new Asian crisis in his latest USA/Global Letter which will develop much in the same way the 1997 crisis began. According to Rothovius, a new Asian Contagion could begin in Thailand the first country to collapse in the prior go around. Thailand's non-performing loans amount to 40% of overall loans and a whopping 54% of Gross Domestic Product. The baht, says Rothovius, "is now 42 to the dollar down from 36 early in the year -- and a fresh devaluation of it is likely if the trend continues."

Rothovius goes on to say that Asian leaders are looking to develop their own currency to escape the dollar and defend itself from speculative attack. That currency would be backed by a basket of currencies and do away with dollar pegs.

Says Rothovius:

"There is a precedent for such a currency basket in the currency swap network installed by the United States and the countries of Western Europe in the early 1960s. . .[F]ixed rates survived until 1971 when President Nixon, faced with mounting inflation, suspended U.S. payments in gold, which had been held at an artificially-low $35 per ounce, and allowed gold to seek its natural level in a suddenly free and open market. (Gold quickly doubled then, by the way. And there are quite a number of professionals who believe gold would double again if given the opportunity. Instead the IMF forbids any member-nation to officially back its money with gold, thus sterilizing gold reserves.) Short sellers, including three huge international banks, have seized on this this to sell gold short. Now that China is leading the way by allowing private dealing in gold, the yellow metal might find its way into favor as some kind of an official Asian Monetary backing."

Rothovius was among the very few who saw the first Asian crisis coming. Worry descends upon Asia a second time. The new oil crisis cannot be helping matters. These problems, I need not remind you, are likely to work their way back to Wall Street and the big international banks who remain on the hook for a huge portfolio of Asian loans.

In what has to be one of the most telling events in the long term, slow motion self-destruct of the gold mining industry, the venerable Homestake Mining Co. announced it will be closing down its famed gold mine in Lead, South Dakota within the next sixteen months. The Homestake Mine was synonymous with gold mining and has been in continuous operation for nearly 125 years. John Brimelow, the mining analyst at Donald & Co pretty much spoke for the industry when he said, "The main thing is it's psychological, this is one of one of those mines that theoretically can go on forever ... and it's been strangled by abnormally low gold prices. It's a sad day for the gold market." List another victim of the insatiable gold carry trade and its lust for cheap metal. This has additional repercussions in that many South Dakota mine workers will be losing their jobs.

That's it for today, my fellow goldmeisters. Have a good day and see you here tomorrow.

Subscription Info Andrew Rothovius USA/Global Letter -- 1-800-219-1333


Had it with the tired, one-sided anti-gold financial press mentality? If you want a fresh view of the gold market go to the link above for an information packet on gold ownership whic