USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
http://www.usagold.com/cpmforum/
IronHeadLate Night Insomnia and Sir Tree's "Heads"#4917503/01/01; 00:03:49

http://www.federalreserve.gov/BoardDocs/Speeches/2000/

Sir Tree - You and I could be on the same wavelength (scary thought, eh?) as I've always found the lyrics you posted (#49154) to be a perfect psychotropic analysis of what the worlds power structure is derived from and for. Almost posted it myself a couple times - thanks for allowing me to protect my innocence, ha ha!

Regarding what the FedHeads have to say, and any late night insomniacs in need of a sure fire sleeping pill; the above site gives the text of what each of the Fed Res. Board members have given in any public speeches.

Beats having to listen to what the talking "Heads" profer as interprative dribble.

Randy (@ The Tower)Open dialogue with Sir tg and all regarding yesterday's tg post (22:52 msg#: 49171)#4917603/01/01; 01:27:54

You make reference to 1929 and the Fed's ability to lower interest rates, citing the lack of hyperinflation then as an anecdotal "proof" that our fate shall be the same. Well, my friend, please consider two items. Back then the Federal Reserve was still pedalling with training wheels on, and more significantly, the currency was not of fiat as it is today but was in a degree limited by its gold convertibility on the fixed gold standard of that day. Times do change, my friend, and the context for possibilities changes with them.

You also make mention of a liquidity-swallowing black hole of debt and derivatives, and mention "corporate overproduction" of goods with nowhere to go. I "see" your "black hole and production" and I "raise" you one overseas U.S. bond.....rumour has it that there might be "one or two" out there.<grin> Perhaps the international CBs hold "half of one", but I don't fret over that as they may very well choose to eat the loss with a stiff upper lip. Why? Because it is the good manners that might be expected by those attending tea parties with Fed Chairman Greenspan. More problematic is the "bond or two" held by speculative hedge funds that know ways and means of "hot money". You have there the recipe for plunging prices (which translates to soaring interest rates (=yield)) on the outlying Treasury notes in defiance of the Fed's low overnight target rate.

Factor in the "truth" that the Political Will with fiat currency is to avoid deflation at all costs (the battle cry is that the banking sector must be and will be saved even if the currency value is sacrificed to do it!), and you see the Fed stepping in to print currency as needed to serve as the buyer of last resort. (Other buyeres would drain precious reserves from the banking system....the very thing the Fed is fighting to prevent!) And as these bond-buying dollars are then presented to the forex desk for conversion to foreign currency to be brought homeward to foreign hands, we see a plunging external exchange value (causing import prices to soar) in addition to the failing bond market. The rest of the equation solves itself, along witht the implications on the fragile, overextended paper gold market. "We shall have the hyperinflation."

I say again (and not for the last time), if you haven't got metal, you haven't got a clue.

got gold?

WAC (Wide Awake Club)@Randy at the Tower - Hyperinflation for whom?#4917703/01/01; 02:11:19

One is made to understand that 70% of all physical $s are physically outside of the US. What would happen if these $s experienced great difficulties in returning to the US, who would have the hyperinflation? It would be fairly simple to discourage these $s from returning home, no?
TopazGalearis: Randy#4917803/01/01; 02:11:43

Topaz (02/28/01; 04:51:39MT - usagold.com msg#: 49112)

Hi Boys,
Thanks G for the input, however the specifics of Lease rate, LIBOR and GOFO and how they relate to each other (what moves what) is still confusing.
Randy, can you take a crack at it? ...or perhaps Rhody can be persuaded to post a "for Dummies" explanation? TIA.

Randy (@ The Tower)ANOTHER (THOUGHTS!)#4917903/01/01; 02:14:52

http://www.usagold.com/GoldTrail/archives/ANOTHER1.html

Dear reader,
In case you have yet to discover this new set of pages, this comprehensive archive of ALL of ANOTHER's (and FOA's) internet postings prior to the establishment of the USAGOLD forum archives (where you will find them post-September 22, 1998) was assembled as a fitting tribute by those "few of us" here in The Tower to this exceptional figure who single-handedly did more to revolutionize modern perception and understanding of the gold market than all others coming before or attempting to claim credit in his wake.

In reviewing again the comprehensive content of these postings, I can personally say in hindsight that there is no output during the years of commentary I have directed from The Tower, including these modern events, that was not already to be found in a germ of Thought shared long ago by ANOTHER. It might be said that there is nothing new under the Sun. I must contend, at the very least, that while that may be true of all things under the Sun, it is only ANOTHER that manages to shine as brightly.

In no way should you believe me on this. Have another look and judge for yourself.

I believe I only serve to clutter your time and this space when it is this link you should be reading instead. And as if on cue, I see with good timing that my cup of tea is now empty, so it is time to rest with thoughts of gold...a natural form of savings that shall immutably endure the longest, darkest and stormiest of nights to await my awakening to a new dawn. For what more could one ask of his silent wealth? Get you some.

tgRANDY#4918003/01/01; 02:29:06

Time will tell.

I have no pretentions that my thoughts on deflation are correct. They are my views and i air them here because i am not ultimately sure. I f i was certain of the truth, there would be no need for me to discuss it.
I am sure you air your thoughts here because you too are not absolutely certain.

Please consider
1) if it was only a matter of dropping interest rates and pumping liquidity, then Japan would have long been out of its deflationary depression.(also note that Japan had a high savings rate and still does)
2)Ultimately do you think it is the will of the Fed to make the US Dollar as valuable as the Mexican Peso.
3) if consumer confidence slips (not to mention the confidence of corporate America) who will do the spending and who will do the borrowing

Randy (@ The Tower)WAC and Topaz#4918103/01/01; 02:51:47

Sir WAC,
just idle thinking on my part, but if capital controls conspired to leave dollars stranded where they were not wanted, think what that would probably do to the external exchange rate versus the other currencies that were wanted as the forex markets tally the score for all to see. In effect, we did that in 1971 when we said that foreign held dollars could not be returned to their home in The States to claim the gold that was their due. The dollar did suffer untoward inflation, but not as bad as might have been because there was no where else to go....the jilted parties had to "suck it up and play ball" lest all of world commerce collapse with no system of settlement. That is no longer a strong fear with the euro now firmly grounded on an independent foundation.

Sir Topaz,
I have in the past been in and out of the financing arena, but now mostly out for long enough that I must turn a page or two before attempting an anwser worthy of your time. (Right now I am not immediately aware of the location of one of my prior post addressing the relatively simple math.) As my tea was particularly weak, I am fading fast and must rest ahead of at least two projects that await in the morning. I am certain Sirs Rhody, ORO, or a number of other generous souls would be happy to explain how the gold forward rate is an adjustment to the borrowing costs (interest rate) of the paper funds by means of subtracting the borrowing costs (gold lease rate) for the metal funds over that period of time. Taking LIBOR as our cost of currency over time, then the equation would be:

GOFO = LIBOR - GoldLease

That looks right to me at the moment, but who am I? There are sheep jumping fences as a distraction to my concentration. Just buy the metal, my friend, and leave this financing nonsense to the bullion banking boys. Their days are numbered, but mine stretch on to infinity. (got gold?)

Zzzzzz.....

TopazRandy#491823/1/2001; 4:25:30

As my mum was fond of saying,...."L'il man, you've had a busy day"!
Golden dreams good Sir.

Mr GreshamHere we go?#491833/1/2001; 7:24:12

http://www.quotewatch.com/charts/futures/NYCE/DXY0-intraday.html

Europeans bailing out? (rather than bailing US out)
Hill Billy MitchellTheStranger @ 49168 -- a minor point, yes#491843/1/2001; 7:55:41

Sir,

You were correct when you said that perhaps it is a minor point.

Or should I say it this way:

You were correct when you said, "Perhaps it is a minor point."

It depends on what the word 'that' or the omission of the word 'that' means.

After following your suggestion and re-examining your post (# 49077) and replaying the tape, I conclude that, the words that I said you said he said, were not your words, but rather were the words of Mr. Angel. By paraphrasing another's words do not make them your words. In your post # 49168 as you repeat what you say he said, you have changed what you said he said by inserting the word 'that' after "Again, he said" and before the word, the.

In my opinion the including or omitting the word 'that' and using such comments in parenthesis as (his emphasis) are at the very least as important as using quotation marks to clarify whether or not one is quoting another's words or offering ones own words.

What did I misconstrue about your message other than the fact that the words you posted were your own and not attributed to Mr. Angel.

I understood that the whole point of your post was that the price of gold would be an obvious beneficiary of inflating our monetary unit. If that was the point you were making, I quite agree. If not we do have a, "failure to communicate.".

I truly did mean my post # 49157 to be complimentary of your post # 49077. Obviously since the result of my post offended you, I have failed to communicate.

Let me put it this way and you can quote me on this! When TheStranger posts, I listen and your post stands on its own.

Very respectfully,


HBM

TheStrangerHBM#491853/1/2001; 8:09:24

I wasn't offended. I just don't want to mislead anybody.

Meanwhile, thanks for the compliment. Your sentiments are mutual.

RhodyLEASE RATES#491863/1/2001; 9:05:01

Gold lease rates are subsiding fast, but a slight
backwardation still exists. This all thanks apparently
to the BIS stepping in an providing the extra liquidity
that the BOE no longer has. I wonder if the BOE will
cancel its next auction?
Meanwhile silver has gone into backwardation out to 6 months
with a furth spike in one month rates.
All this tightness in lease markets has had the predictable
impact on spot prices: no change to declining (snicker)

LEASE RATE = LIBOR - LENDING RATE

The bullion bank gets the lease rate (the bank's profit
margin) while the central bank source of the gold gets
the lending rate, which is far more than the lease rate,
say 4% metal interest. Anyone who thinks a CB is stupid
enough to lend out gold at fractions of a percent is
truly ignorant. This gold market lives on ignorance.

JourneymanSeidman Says - - - - We'll have the hyper-inflation. @RANDY, ALL#491873/1/2001; 9:48:36

http://www.usagold.com/gildedopinion/bigfloat.html

Anchor TED DAVID: What did Allan Greenspan not say? SEIDMAN: He can create a self-fulfilling prophecy if he says something a little too negative. I think he's more worried than he let on. .... SEIDMAN: I think the FED is behind the curve. They need to lower interest rates more agressively. If the market drops further, we might find the dollar is in trouble. TED DAVID: Repatriation? SEIDMAN: Yes, repatriation. -CNBC Chief Commentator Bill Seidman, CNBC, March 1, 2001, ~11:28AM EST

Regards, j

P.S. If you haven't seen it yet, see article in link for explanation of "repatriation."

Mr GreshamAre we close?#491883/1/2001; 9:49:29

Well, with so many rivets popping out of the ol' US Titanic's hull, are we getting close to testing FOA's thesis:

Some market somewhere, some players must be hurting: NAZ, Nikkei, USD/Euro. Spreads, carry trades. Because the cost of doing so has been low and easy to do in totally unbacked paper markets, they're holding the POG down/level, until they can't anymore. Keep bailing till the dam breaks.

I think we're closer now to seeing if one of those implosions tests the brittleness of the POG containment structure...

SHIFTYWhen Faced With Increasing Market Volatility, Investors Should Turn To Gold#491893/1/2001; 10:42:59

http://biz.yahoo.com/iw/010228/0202023969.html

INTERNET WIRE -- Some of the nation's most affluent investors were encouraged today to consider including gold bullion in their portfolios as signs of increasing instability in the world's financial markets become more apparent. "The need to diversify portfolios confronts every prudent investor," said Richard Scott-Ram, Chief Economist of the World Gold Council, addressing a meeting of executives and individuals controlling the financial affairs of some of America's wealthiest families in Palm Springs today.
Mr. Scott-Ram said that there were growing signs of market instability at home and abroad and that many portfolio managers around the world were wrestling with the effects of stock market uncertainity. He said that the Japanese stock market had fallen to levels approaching the 1998 low and Japanese officials had expressed concern that the economy was moving back again into a recession. Meanwhile, in the U.S. consumer confidence had dropped sharply again in January in line with faultering stock markets.

"It seems that every advertisement produced by U.S. financial institutions today is urging investors to go for diversification. I concur and would only add that investors should strive for even greater diversification through the in conclusion of gold bullion." Gold, he said, is an excellent insurance asset - particularly at today's relatively low cost. It was, he said, competitive with traditional diversifiers such as put options and inflation-linked bonds (TIPS), Treasury bills and market - neutral strategies.

"Traditional diversifiers often don't work when you need them most - during market stress. In fact, gold brings several benefits to an institutional portfolio at times of market stress due to its negative collaboration with equity markets."

He reminded the audience that according to many analysts, the U.S. financial markets were entering a stress period. "It is at moments like this that gold shines as the preeminent portfolio diversifier - a defensive asset that tends to perform well when other asset classes do not," he said.

Mr. Scott-Ram said that the WGC intends to redouble its efforts to promote gold as an investment and as a portfolio diversifier. Over the past 3 years, the Council has been working in conjunction with some of the leading bullion banks and dealers to promote gold to U.S. institutional investors.

"During that time we know of 30 separate institutions that have between them purchased some 200 tonnes of gold. This represents an investment of some $2 billion, which may not sound like a great deal in the overall context of the U.S. market. Nevertheless, if the practice of allocating a small percentage of a portfolio into gold became more prevalent, it would represent a huge increase in demand for gold," said Mr. Scott-Ram.

"We are redoubling our efforts to demonstrate - using the most reliable and painstaking research we can find - that gold is an effective tool for controlling risk and protecting portfolios from major stock market declines," Mr. Scott-Ram said.

The World Gold Council is an international organization formed and funded by leading gold mining companies from around the world to monitor and analyze developments in the gold market and to encourage demand for gold

JourneymanHow hyper-inflation - - - quick and dirty. @Perplexed, ALL#491903/1/2001; 11:16:37

How hyper-inflation - - - quick and dirty. @Perplexed,
deflationists, ALL & Mr. Gresham

According to the standard Austrian (and monetarist) view, a
GENERAL price inflation (or for that matter, price deflation) is
strictly a monetary phenomenon. That is, these GENERAL increases
or decreases in prices don't happen unless the supply of money
(plus money substitutes) increases (inflation) or decreases
(deflation) in excess to the available supply of goods and
services.

There is an "inventory glut," implying an excess of "stuff" and
thus falling prices - - - in those industries with the glut only.
These price decreases COULD be a symptom of monetary deflation,
but even the doctored stats from the Bureau of Labor Statistics
doesn't show this, and in fact, show MONETARY inflation, that is,
rising prices OVERALL.

BUT when businesses shrink and produce less "stuff" during a
recession, then, clearly, there is less "stuff."

At the same time, we have the FED monetizing every piece of
"paper" they can get their paws on - - - except maybe the Daily
News (and you might even want to lock-up your back issues.)
Remember, they don't print but 8% of it anymore - - - they use
computers. And foreigners returning "big float."

Now you've got "more money chasing fewer "stuff." The question is
then, how much inflation?

And since you have a contracting economy at the same time you
have a ballooning money+money_substitute supply, how much
_stagflation_?

Regards,
Journeyman

P.S. Perplexed asked awhile ago:

"As stated in my post, there is or can be plenty of 'money'
available, it is just in the wrong place. I can understand the
banking process resulting in price increases of merchandise.
+
"What I can't understand is just how the newly created currency,
whether in paper or electronic form, manages to get into either
my bank account or billfold.
+
"Perhaps you, or other members of the forum can explain it to me,
During the deflation of the 30s, the government attempted to
re-inflate the economy with government make work programs, such
as the Public Works Administration, and Works Progress
Administration, both fell woefully short." -Perplexed (02/14/01;
23:35:10MT - usagold.com msg#: 48270

Anyone want to answer this one? Mr Gresham? I beleive you were
on-the-track a day or two ago (that late-nite post)?

Tree in the ForestAll, IronHead#491913/1/2001; 11:25:20

March silver stoppers now number 8075. That's more than 40 million oz for delivery by end of March. GCMS, a poster at GE, is saying that some of the registered warehouse stock in silver at COMEX is actually silver that was supposed to be delivered months ago and he is saying that now, COMEX warehouses will be empty by the end of March. I will check this out further and report back whatever I find. In the mean time, keep some Ag handy.

IronHead: The BOE auctions are positively psychedelic! The funny thing is that Reg Howe has failed to name COMEX and the BOE as defendants in his suit when both parties are so obviously knee deep in this manipulation. Also strange: last BOE auction is on March 14, GATA gets a decision on March 15. Coincidence? Hmmmm. And then maybe Ag runs at the end of March, Au at end of April? Hey the world is full of coincidences right? ;)

Mr GreshamJ'man: Quick 'n' dirty: (sounds like a law firm) back at ya#491923/1/2001; 12:17:13

What I was going after was getting a bird's eye view above the I/D either/or debate, and trying to set up the two stages that happen.

Let's call Inflating Money, and Inflating Prices, distinct things, correlated yes, but separate stages.

The overall level, which may be deflating from money destruction, weighed against by the Fed liquefying their chosen debt instruments du jour. And the Mises view of the newly created fiat going into chosen parties' accounts (the public is SO far from seeing this, it won't be written in textbooks for decades) to cover their retreat from equities and various hedge positions. Those coupon passes, etc.

Then, there is what the individual sees on the ground level, inflationwise. Categories can diverge widely. Wasn't the farm economy in depression all through the '20s? While the Fed was inflating money, all headed for Wall Street. What's the saying: Money supply seeks inflation.

It has both to do with pricing power of sellers, and investor/buyer choices.

Money creation is the necessary but not sufficient condition for some price increases. Especially when times look tough, people will narrow down their choices to put their now more precious dollars into, but they will still tend to flock in same direction.

Gold gets a boost by its reputation for stability over paper choices, and then, once the momentum (RSI) is in its favor, it will attract a greater share of the new money being created (or fleeing) to rescue other sectors. The "We shall have hyperinflation" choice means that money holders in danger of having their money destroyed (defaulted) will fling it at gold in their "Hail Mary" effort to stay solvent. They'll sell the debt instruments while Fed is still buying, and take those electronic balances over to GS for a bullion purchase at $1000 (today only!) while they may.

These competing organizations MUST be mapping out their survival scenarios relative to their competitors now, hoping to rule market share later by being the least impaired on D-Day and worthy of Fed liquidity bailout.

Those who get enough gold and its kin will avoid the downslide; the rest will default and destroy the asset of their creditors, creating more "poster child" stories driving money toward real assets.

One effort I grapple with is to see the interrelation of business (corporations) and individuals, in normal times and hard times. People have to eat, corporations don't; so there is a perpetual advantage there. But in hard times, people "starve" many of the corporations, who have gone too far out on a product limb, because most of their product is fluff.

Corporations that provide the necessities and hard stuff have pricing power, ESPECIALLY after a tech/consumer/service boom where most of the economy has become fluff. Employees of fluffmakers will have to scramble for survival basics, and fast.

Curves of expectation will go hyperbolic, in either direction. Money supply pumping will push on a string, and flee into safe assets, waiting for a bottom. Gold will compete with T-bills, and new deficit fears will tilt even that one our way.

Their wages will price-deflate; their purchases price-inflate. A consumer good's price will comprise a lower wage factor and a higher raw materials and energy factor. I tried to find those historic GDP component percentages, but Fed's site didn't have, nor St.Louis Fed. But I imagine it might be something like wages dropping from, say, 67% of a "boom" economy to 55% of a slump economy, and the 15% unemployed really hurting.

All the factors that have worked against us, and worn us down in disappointment, are likely to reverse together, and accelerate once started. There is not much in the way of usual economic balancing force that is left to challenge gold at that point.

The competing paper investments will be showing their impairments to a greater degree than ever expected, and those with the money to spend, who would supposedly be inhibited by news of "deflation" to purchase Treasuries over gold, will be spurred on by even greater news of defaults all around (and interest rate spiral upward -- which will send them to short maturities -- which will spiral deficit -- which will threaten the Treasury "guarantee". Vicious circles galore as fiat's chickens come home from all directions.)

oops gotta run, sorry couldn't edit

Horatio(No Subject)#491933/1/2001; 12:43:16

Euro

Why is the Euro headed up?Could it be the U.S. bankers think if you must abandon the Dollar its better to swap over to another sister currency .Its better for both currencys not to have gold as an alternative.Its sort of like a 2 party political system ,what does it matter who wins the election its all the same club members. It appears the Euro will be the place to be until the hedge funds short positions get unwound.I think the Euro may go to a premium while U.S. stock market sorts itself out.Remember ..when bankers are jumping out of windows consider following them,there must be money to be made down there!
JourneymanSpinning Holtzman @ALL#491943/1/2001; 13:58:07

http://www.rich.frb.org/eon/topic3/messages/43.html

I would like to slightly spin Sir Holtzman's posts as summarized by:

"currency is for spending; gold is for saving." -donnemuir (02/28/01; 19:44:48MT - usagold.com msg#: 49163)

But what do you do with "currency" in the time interval between when you receive it and when you spend it?

Wouldn't it be more efficient to have one product able to serve both functions --- then you wouldn't have to attempt such contortions as described below (from link above.):

"Essentially, since reserves do not pay interest and reserve
requirements are at approximately 10%, that's a significant
amount of a bank's liabilities that contribute nothing to the
bottom line. To avoid this position, many financial institutions
have taken to totalling deposits at the end of the day,
"sweeping" a portion of that amount into overnight money markets
where they generate a return and "sweeping" the funds back into
deposit accounts in the morning. The temporary absence of the
swept funds, reduces the financial institutions deposit stance
and, by extenstion, the required reserve to back them when
reporting to the Fed. This in turn understates or "depresses" M1." -http://www.rich.frb.org/eon/topic3/messages/43.html

And of course, larger businesses, rather than keep their liquid funds over-night, emulate the financial institutions. They MUST do this just to stay even because as everyone knows, fiat (not "paper" - - only ~8% is paper anymore) inexorably depreciates EVERY year (and thus every minute) by the rate of "inflation."

Is it practical for individual citizens and small businesses to do such things to protect their buying power?

Why, then, do we have this needless dichotomy between something to "spend" versus something to "save?"

Yes, of course you can protect yourself somewhat - - - buy here @USAGOLD and look into E-GOLD.COM. But most folks have been conned into keeping their buying power in the same fiat that businesses sweep into accounts for the best interest rates - - - AND with the amounts these conned folks keep in banks, they pay taxes on any "interest" despite they've been robbed of a considerable portion of interest AND principle by that inflation. In short, fiat is a scheme to rob the unwary.

Holtzman makes the arguments that macro-manipulators make. Unfortunately, we as individuals ARE stuck with the effects of these manipulations, for the time being at least.

But we, of all groups, need to keep things in perspective: We have fiat because the banker-government axis profits at our expense from it's use.

The answer is, of course, free market money which won't come from any government or central bank, but already has it's nose in the tent thru the internet in the form of E-GOLD. It's convertible - - - and you can keep independent track of how much is stored; grams issued equals grams stored (if you believe the independent auditor program.)

It's this sort of thing, multiplied by a large number of independent E-GOLD type "banks," that will allow circulation of gold as money relatively free of the threat of dilution scams such as the original Federal Reserve scam - - - and the current paper-gold soon-to-be debacle.

Regards,
Journeyman

Hill Billy MitchellThunder in broad daylight#491953/1/2001; 14:43:49

Or was it lightening?

Need a surefire uptick to cover a short position?

First lightening, then thunder!!!

Look out below!

HBM

Hill Billy MitchellThunder in broad daylight#491963/1/2001; 14:44:49

Or was it lightening?

Need a surefire uptick to cover a short position?

First lightening, then thunder!!!

Look out below!

HBM

Randy (@ The Tower)Journeyman (msg#: 49194)#491973/1/2001; 14:59:37

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

You said,
---------I would like to slightly spin Sir Holtzman's posts as summarized by:

"currency is for spending; gold is for saving." -donnemuir (02/28/01; 19:44:48MT - usagold.com msg#: 49163)

Wouldn't it be more efficient to have one product able to serve both functions.....Why, then, do we have this needless dichotomy between something to "spend" versus something to "save?"-----------

Before poor donnemuir or Holtzman get pinned with this sentiment which might not necessarily best reflect the "nutshell" of Sir Holtzman's views, let me put the "blame" where it belongs--with me, as my earlier comments may have overly influenced donnemuir's interpretation of Holtzman either rightly or wrongly.

In my early post to Holtzman, I said:
"Simply put, Currency is for borrowing and spending as needs require; and Gold is for saving." -Randy (@ The Tower) (02/28/01; 15:07:31MT - usagold.com msg#: 49149)

And to keep this short because I have another project in the works, in that same post I provided something that I believe bears your consideration as a possible answer to your question posed above about, in your words, --"this needless dichotomy between something to 'spend' versus something to 'save'."

I suggested this about the necessary dichotomy, "Given the nature of contracts, to attempt a mixture of these two [bullion assets and currency] within the structures of banking is to witness oil and vinegar. The separation is always inevitable...unless great agitation is to be endured from time to time."

A fuller elaboration on this "unholy" admixture can be found at the link above in the Aristotle posts beginning with (2/7/2000; 7:15:24MDT - Msg ID:24589) *Executive Summary--an Outline of Observations*. You will also find there your significant part in the discussion that followed, along with that of ORO, Trail Guide, and many others.

Randy (@ The Tower)"the EURO. OUR money" shall be ringing through the minds of europeans#491983/1/2001; 15:14:22

http://biz.yahoo.com/apf/010301/europe_euro_switch.html

HEADLINE: European Central Bank Unveils Unambiguous Euro Slogan

FRANKFURT, Germany (AP) -- ...The simple slogan is part of a 80 million-euro ($73 million) publicity blitz targeting a population of which three-quarters as recently as November didn't even know euro cash would begin circulating New Year's Day 2002.
+
...There will be seven new bills and eight new coins. And with the bill denominations ranging from 5 euros to 500 euros, they will be a new experience for people in some countries such as Italy, where everyday transactions are counted out in thousands.
+
...The national central banks that comprise the European Central Bank will also be running their own publicity campaigns as E-Day approaches, sometimes coming up with more innovative slogans -- such as ``Real value shows itself'' in Germany or Ireland's ``The change is in your pocket.''
------

ECB president Duisenberg expressed, "The campaign does not try to sell the euro. The explicit aim is to familiarize the public at large."

While only circulating in electronic form or as fixed ratios of the legacy national currencies, the day the euro becomes more "real" as a "physical" item is just around the corner...10 months away. Is the dollar starting to feel the pressure?

PerplexedJourneyman Iflation-Deflation#4919903/01/01; 15:57:41

I have asked the question before and no one has replied:



IN AN ECONOMY BASED AND DEDICATED TO THE CONCENTRATION OF
"WEALTH" THROUGH THE FAVORING OF "PROFESSIONALS " ala.. CURRENCY AND LAW MANIPULATORS:

HOW DO "THEY" GET THE MONEY INTO THE HANDS OF THE GREAT UNWASHED? (about ninty percent of the population)

While hiding inflation in plain sight in the form of national debt, our "experts on the economy" peddled the "no inflation" line. Ahhh, something for nothing, the three magic words always in vogue.

Even in good times, nation wide, garage and yard sales occur by the millions. These sales occur because a very large percentage of the American people own so many possessions, that many of them, (purchased on impulse in time of plenty) and although still in great condition and useful, are sold at "junk" prices when money is no longer so plentiful.

Much of this "junk" was purchased on credit at 18 to 22 percent interest, and was purchased because the price, shorn of inflation, screamed "bargain." Much of this "stuff" is yet to be paid for.

Because of governmental manipulation of inflation information, those of us actively involved in the production of goods and services have not demanded that OUR wages consistantly reflect the true cost of infltation.

We are thus staring Leviathan squarely in the eye with no means of feeding him, and no hope of controlling him.

So while there is plenty of currency or credits in existance, just as in the 30's it is in the wrong hands.

It is very unlikely that the current inflation of the money supply will translate as added income in direct proportion, or within the time frame necessary to keep pace with the escalating cost of living, let alone the debt service.

Unless a means is devised to get the purchasing power out of cyber space and off spread sheets, and into the hands of the working class people immediately, pandemonium will reign supreme.

Trickle down economics was a disaster in the 1920s and 30s and should have been seen for what it was, a recipe for more of the same.

The idea that if you over fill the hog trough and allow the chickens to consume that which the hogs manage to spill, works only when the hogs are few in number, very sloppy eaters, and the chicken population remains static. When the hogs get greedy and efficient, the hungry chickens first quit laying, and then peacefully die.
Not so with people. While they will quit working, the only peace to be enjoyed will be that eventually enjoyed by the survivors.

Taking Peter Ashers rocket example one step further, when sufficient pressure may be released and directed, the engine completes the job for which it was created, if however the vent is insufficient to release the mounting pressure, it is transformed from a rocket to a bomb, releasing uncontrolled energy in every direction.

>PETER ASHER "FEEDING LEVIATHAN"<

>A nation of tapped out debtors, asset rich and stressed to service debt would all benefit from Hyperinflation. However, Asher's third law of Ecodynamics states "Any activity that creates gain without production can empirically only benefit a minority.," Therefore in this current endemic situation, the ratio of buying power to available goods, necessary to inflate, cannot exist.

If the food-chain necessary to sustain this behemoth falters, then -- Contracted buying power, lot's of debt, no sales, need to raise cash, nation wide garage sale; =Deflation!

Waiter: "...and for you, sir?"

Uncle Sam: "We shall have the hyperinflation."

Waiter: "Sorry sir, we're out of the ingredients to make it."

Peter Asher<

Government make work programs The WPA, PWA, CCC camps in the 1930's was unable stimulate economic growth. It took WAGES spurred by a world war to kill the depression.

What do we do now, Just open the bank doors and turn on a giant fan or maybe drop trillions of dollars from a fleet of 747's?

STILL PERPLEXED

CoBra(too)Picking the scraps from the Trail - pigeons wail ... quail?#4920003/01/01; 16:10:23

... As FOA/TG rightly states gold mines are only paper, though I'm personally kind'a happy that I've invested in some of the paper, which I again can turn into physical gold ... and still buying the same amount or more of paper back.

Next to some juniors, where I may have a vested interest, I've bought NEM (14), HM (4.6) and DROOY (5/8)in Nov 00 . Sold NEM at 17 (could have done better, though I feel with a billion $ debt this ex-favorite is at risk). Sold 10K Drooy at 1.31 and bought back at 1,- today and bought some more HM and new PAAS at 3 1/8.

As there's still some $-confetti profit left I'd probably like to re-invest in AU and AG - physically - can you help me - with a bag of ag quarters nominally - just for fun- done?

Hoping for more time to cash in paper and the mines for reality - regards cb2

Randy (@ The Tower)Positive changes in India, the world's largest gold consumer#4920103/01/01; 16:49:46

http://www.economist.com/world/asia/displayStory.cfm?Story_ID=519143

The Economist Headline: India's Breaktrough Budget? -- The lip-service so long paid to economic reform by India's government now starts to sound more genuine

That article is for your background reading if you so desire. Here is the golden meat and bones of it from Bridge News:

INDIA BUDGET: Bullion trade sees gold imports rising on duty cut
Mumbai--Feb. 28--Gold imports are seen rising after India cut import duty on the yellow metal to 250 rupees per 10 grams from 400 rupees per 10 grams.
The duty reduction was announced on Wednesday by Finance Minister Yashwant Sinha in the federal budget for fiscal year 2001-02.

[Randy's note: You should appreciate that one of the euro member requirements is that there be no restriction to gold trade. We also see at this time China moving to liberalize its gold markets. And while I am not in any way hinting that China or India is headed toward the currency union, I do want you to appreciate that while India has lowered these restriction on open gold trade, they have NOT similarly lowered the import duty on silver -- which remains 500 rupees per kilogram.]

We move one step closer to the new performance standard for gold as a highly valued reserve asset.

got gold?

Randy (@ The Tower)The Standard says, "Congratulations! It's a Bear!"#4920203/01/01; 17:04:09

http://biz.yahoo.com/st/010301/22558.html

The article asks, "So did anyone actually see this coming?"

While it may be news to the rest of the world's investors, it is no news to us here at the Forum.

This is how the article begins:

-----When the stock market seems particularly subjective and psychology-driven, it's nice to have a few number-based definitions on hand. For instance, a "bear market" is commonly described as a 20 percent stock drop. Guess what? Not only has the Nasdaq dropped much more than that, but some calculate that the S&P 500 hit the 20 percent mark Wednesday. This did not go unnoticed amid news of the Nasdaq's new 26-month low and the latest round of Greenspan-bashing.
+
CNN's Moneyline News Hour show summed up the increased panic. "The Nasdaq has been in a bear market for months," said CNN correspondent Fred Katayama. "But a bear market in the S&P would affect far more people than just day-traders and high rollers." It's not just dot-commers' retirement accounts losing money - was it ever? - so maybe we'll soon see a merciful end to the smug tone that has been accompanying bad economic news.


I particularly liked this sentiment:
"Go bottom-fishing, or stay out of the water entirely? Do what you want, since you'll find some pundit to back your decision either way - and an equal number to sneer if you get it wrong."

Ha Ha! No matter what you've done, you've gone and done it! Be sure it is a decision you can live with.

Gold. Get you some.

turbohawgDeflation vs Stagflation/Hyperinflation#4920303/01/01; 17:12:38

Yo Journeyman, regarding: > According to the standard Austrian (and monetarist) view, a GENERAL price inflation (or for that matter, price deflation) is strictly a monetary phenomenon. That is, these GENERAL increases or decreases in prices don't happen unless the supply of money
(plus money substitutes) increases (inflation) or decreases (deflation) in excess to the available supply of goods and services. <

The strict Austrian definition defines inflation as an increase in the money supply and deflation as a decrease in the money supply … and that's it. Yes, price activity is partly a function of the money supply but it's unpredictable how it will manifest itself in various sectors.

One guesses that future non-Austrian economic historians are going to look back at this time in history and be forced to align their definitions with Austrian definitions in order to explain what is being missed by so many right now. It seems that there is a predominating mindset that the experience of the ‘70s defines inflation and the experience of the ’30s defines deflation. I would argue that that mindset is backwards. Deflation defined the ‘30s and inflation defined the ‘70s ... the ‘30s did not define deflation and the ‘70s did not define inflation. Because this deflation cycle is playing out a little differently than the ‘30s most people are failing to recognize it. It'll likely be much more clear in hindsight.

Randy ol’ chap , you might be surprised to know that this person, as a deflationist, agrees with you that bonds are gonna get killed and interest rates are gonna skyrocket, notwithstanding any short term flight to bonds due to stock market woes. They're gonna get killed because of deflation, for 2 reasons. One, there's a lot of’em out there. When the run to liquidity hits critical mass, there will be a forced liquidation of bonds along with all other assets and rates will be driven up as a consequence. Second, the US is not in nearly as sound of a financial condition as it was in the ‘30s or Japan was in the ‘90s. In short, this time the US is a poor credit risk; who's going to want to hold Treasuries ? The destruction of the bond market means the destruction of a vast amount of wealth, which will only intensify a deflationary spiral.

The inflation/deflation debate has been widespread across the net, having really started right here on the USAGOLD Forum if I'm not mistaken. I certainly never saw anything more than isolated discussion of it until after we started chewing ratherly intensely on it probably 3 years ago. The one point that seems to always be missing from the debate is why it's so important to get it right. It's my belief that if gold investors, while preparing for more inflation, get blindsided by a severe liquidity crisis that is characteristic of a deflation then they might well see their gold eventually blast off to astronomical prices … but in someone else's hands.

Betting that this Fed will successfully inflate its way through this deflation cycle is betting that this Fed is in the midst of proving itself to be an historical exception. Maybe that'll prove to be true. If so, all gold investors will be partying. If not, then we can expect to have to survive a monetary vacuum before any subsequent inflation/hyperinflation takes place. A market devaluation of the dollar during such a monetary vacuum, similar to what has happened to the currencies of countries hit by the Asian Contagion, may or may not prove to be the salvation of gold owners unprepared for a liquidity crisis.

Worst case is that there will first be sudden widespread destruction of wealth and savings which fuels a vicious liquidity crisis and results in a large scale liquidation of assets, including gold, followed closely behind by the devaluation of the dollar, thereby rendering whatever dollars that are left worth much less. This scenario would surely do the most damage to the most people. Given what's been happening in other countries the last few years, it doesn't seem to me that this possibility is too far out. Personally, my guess is that dollars will continue to be precious *domestically* , and that's because our monetary system is based on credit, and when credit caves in on itself, the money supply will be reduced to the cash supply, and there isn't much cash in existence, nor can there be in a short timeframe. (And I suggest that this is by design in order to ensure that Americans always value the dollar.) Therefore, in my opinion, a more important question than ‘got gold ?’ is ...

got liquidity ?

You got it Perplexed.

:)

Randy (@ The Tower)Please read these words and strive for understanding#4920403/01/01; 17:25:03

http://biz.yahoo.com/rf/010301/n01394864.html

Reuters HEADLINE: COMEX gold, silver meander lower...

NEW YORK, March 1 (Reuters) - New York COMEX gold opened slightly lower on Thursday on follow through selling from Wednesday, but COMEX floor brokers said the action in the futures pit was extremely light.
"There's really nothing to say, because there is nothing going on. One large fund came in offering some paper to take it down, but besides that the ring is really not doing anything," said one broker.
-------------
Did you catch that?! Again, "One large fund came in offering some paper to take it down..."

Call Centennial tomorrow to lock in your order while the oversupplied market for these paper substitutes remains to serve as the price-setting mechanism for the metal which is in fundamental undersupply. The gap is filled by leased gold which appears to satisfy two or more pockets at the same time. Are you prepared for a gold "bank run"? Thus, beware the self-serving bearish comments of the media's oft' quoted analysts who are themselves largely hip deep in the gold leasing business.

Know you know.

Randy (@ The Tower)Arrgh!#4920503/01/01; 17:26:01

NOW you know.
Randy (@ The Tower)The fading value of the dollar#4920603/01/01; 17:35:05

The Wall Street Journal is raising its newstand price by 33 percent from 75¢ to $1.00.

Does this charge reflect an improved product, or the subject line of this post?

Perhaps people should have been hoarding old WSJ's under their mattresses for a windfall gain of 33% on every one! Or not. I don't recollect the Washington Agreement laying the subtle groundwork for the important future role of WSJ's in global monetary reserves.

tgfrom the other sisde#4920703/01/01; 17:57:27

http://www.dailyreckoning.com/

Capacity Utilization" - a stodgy term economists use to indicate how efficiently factories and businesses are using their equipment - has dropped below 80%. "That's historically a sign of deflation," says The Fleet Street Letter's Lynn Carpenter. "The last time we saw this number was in 1991. The Fed cut its benchmark rate from 6% to under 4% over the next year, and still utilization fell... for another three years. Then it rose slowly. It didn't climb back above 80 until 1995."
Mr GreshamI/D#4920803/01/01; 19:52:42

I picture gold's profit scenario as a "U"-shaped chart, with hyperinflation on one end, deflationary default on the opposite, and stable paper assets in the middle. These are also three probabilities on a spectrum of outcomes.

The system is telling us: Don't worry, the middle will hold. But I (we) believe the probability of that is getting squeezed smaller and smaller. So the extremes become more likely, depend on Fed and gov action, and really kinda sorta melt together as Tweedle-dum, Tweedle-dee choices. (Maybe a circular loop, where the extremes meet -- they certainly have similar effect on people, and on gold's purchasing power.)

Another way to think of monetary inflation in a default risk environment would be as something of a ratio, of money supply to paper debt stability. IOW, if the market trusts (and is able to fund) the paper, then you have the stable middle between hyperinflation and deflationary default (either of which benefit AU), so gold stays quiet.

So if the Fed is liquefying, by buying out everyone's paper debt holdings, the next question would be: Where are those new dollar holders going with their bucks? More paper? -- or solid physical assets, waiting out the firestorm?

That answer will show whether we are having the hyperinflationary meltdown of asset values vs. the stable middle holding more firmly.

A key confusion when people go back and forth on this is the difference between the Fed's EFFORT, and the OUTCOME. Whether or not they succeed in actually increasing the money supply by weighing in against deflation, they will have deteriorated the quality of the underlying assets corresponding to it, and the market will not bet its own money on this forever.

The Fed may issue funny money to turn back monetary deflation, and it may create a muddle in the middle of M3 stats. The figure may look stable. (But picture the ratio mentioned above: M3/debtquality.) The key is the QUALITY of components in the Ms, which the market is judging to be impaired, and the Fed is betting somebody's "full faith and credit" that overall credit quality can make a comeback in time.

If the Fed did not make the inflationary effort, the money destruction would produce the deflationary default of bad debt scenario, in a parabolic curve cascading downward, one default triggering another. The Fed is attempting to stabilize that curve upward, help it find a bottom, (choose survivors) and then recover, before too many big structural components are taken out (and shot). That is the Fed's job, their founding mission, and they will gamble one big roll o' the dice on it.

Don't fade the Fed, except when it's trying to stop the unstoppable tide.

donnemuirRandy (@The Tower) 49197; Journeyman 49194#4920903/01/01; 20:45:08

Sir Randy please do not weep for "poor" donnemuir. I view most issues in a very clear and simple light...how you spend the currency determines how much gold you can save. I see many references to "profiting from gold"; my view is "gold is the profit" (real gold). The rest of it is a game that you must learn to play... and it is always someone else's game; they make the rules, change the rules and break the rules consistently (not constantly). Currency is the game piece. A token, no real value, but necessary to the game and it must be kept moving (that's why it's called currency). The object of the game is to make the right moves with it and accumulate a surplus. You score when the surplus is invested in real wealth....GOLD. The secret to winning this game is never commit to much of the currency to either the game or the gold at any one time.

donnemuir

donnemuirAdd to previous mesage#4921003/01/01; 20:48:41

.....and never sell the gold just to get back in the game.
Chris PowellA feeble attempt by the World Gold Council to promote gold#4921103/01/01; 21:12:10

http://groups.yahoo.com/group/gata/message/689

A feeble attempt by the World Gold Council to
promote gold, overlooking all the big issues
of the contemporary gold market.


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.

Chris PowellAn open letter faxed today to the CEO of the World Gold Council#4921203/01/01; 21:13:37

http://groups.yahoo.com/group/gata/message/690

GATA wants to know what the WGC really
knows about the manipulation of the gold
price.

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.

Peter AsherBurping Leviathan#4921303/01/01; 21:30:03

HYPERINFLATE THIS!

@ Perplexed, Turbohawg & tg

"Getting the money into the hands of the great unwashed," requires lots of water (liquidity) and soap (low interest). Our recent foray into the "Carwash" that I referred to last month, pencils out as follows:

Two vehicles, one domestic, one foreign; were traded in for new ones. Both were similar to the old ones in price range and type (more bells and whistles) but still averaging only about 5% more for a median 4 year period. The loans had an average of a year to go to payoff with a balance due of $10,000, and the trade-in values, after negotiating and figuring in overheating- testing positive for hydro-carbons in the engine for one and multiple job-site dings on the other, totaled $17,000. After paying off the current loans that left us with a net credit of $7000. By signing some papers, no money out of pocket, we drove away with $52,000 MSRP, purchased for $46,000. Therefore after deducting the $7,000 of credit we were issued new loans totaling $39,000.

Now, the $10,000 dollars that was "destroyed" had been yielding its investors an average of 10.4% but the new $39,000 that was "Printed" is only yielding it's suppliers %7.2. Furthermore, the old loans ran five years, and the new ones (Lease) run seven, the final four being at the lessors risk as we can walk away at lease end. Meanwhile, we have new upgraded vehicles, back on warranty with no threat of known and unknown multi thousand repair bills, new tires and two full tanks of gas. And along with all that savings of deferred maintenance and the comfort and luxury of the new vehicles, our net monthly payments are -----$60.00 LESS! The only ‘cost' is what will be due after the dates the old loans would have been paid off. At that point we will have the new debt, but also newer equity. So there you have a microcosm, The money supply went up $29,000 and the cost of servicing debt went down.--- It's the future commitment that went up!

This is how Leviathan gets fed morsel by morsel. The new, cheaper money created reimbursed Ford and Subaru for one unit produced. So far though, all this liquidity created has only resulted in giving the beast a good burp and he immediately asks for another helping.

The phenomena of msg#: 46783, 1/28/01,
>>> you see acres of manufactured homes, John Deeres, Caterpillers,--- Stuff! INVENTORY! Financed by debt and seeking consumers funds. We have a domestic and global PIPELINE filled with goods that can clamor for the dollars in the float. <<< was confirmed by last week's announcement that GM is shutting down 14 out of 26 production facilities til June or July because they "reached a crucial 100 day level of supply in the pipeline."(Perplexed: I was referring to NEW product, on its way to market)

The hard-core physical fact is that all that money washing around the inflationist's ankles is not enough quantity to pressure the demand side of the price equation. The great millennium tool-up is still holding up Leviathan's body weight and he is in need of more nutrients than he is receiving. These are not the ingredients for Hyperinflation Stew!

Possibly it is the high dollar that generates the import demand, driving foreign production to keep cranking out the stuff and sending it to us for the credits. Could it be that what is holding off the proclaimed "Run on the dollar" is that whatever state our economy is in, as regards it's ability to service it's fiat debt, we constantly stay more desirable then the Asians and Europeans and their travails.


We "Don't have to outrun the Bear", we just have to outrun all the others!

Mr GreshamMr Moto on Bubble Money Dynamics#4921403/01/01; 22:00:45

http://www.bearforum.com/cgi-bin/bbs.pl?read=117493

"But, from where, you might ask, are the additional funds sourced. One is, as has been mentioned, from the multiplier effect of fractional bank lending. There is also, in effect, no longer a statutory reserve restriction. In recent years the Fed has been adding more than $40 billion dollars in permanent funds per annum to the system. The equivalent to not less than $400 billion in available loan asset growth. The action by banks, too, of sweeping funds from a reservable to non-reservable deposit category has freed more than $400 billion dollars from 1995 to 1999 for additional investment.

"I'll just end here, and say that such sizable amounts chasing share assets is entirely sufficient to advance the price of those assets to levels considered once as abnormal. Share asset prices forced higher by lending and investment conducted within a fairly narrow time period will quite naturally, also, either ignite or contribute largely to the maniacal investment sentiment of both public and private investors.
"

Mr GreshamJapan Tankorama!#492153/2/2001; 0:20:27

http://finance.yahoo.com/q?s=^N225&d=1d

Yikes!
Mr GreshamShakeout#492163/2/2001; 0:51:19

http://www.atimes.com/editor/CB21Ba01.html

Which way will the tsunami go, and when will it hit?

"Even more worrying, the bad-loan situation of the financial system not only remains bad, but is getting worse as bankruptcies are expected to hit an all-time high this fiscal year ending March, with no relief in sight in fiscal 2001. Problem loans held by 136 Japanese banks at the end of September 2000 totaled 64 trillion yen (US$553 billion), 12 percent of all outstanding loans and 0.8 percent higher than in March 2000.

"And worse still, banks are less able to cope with bad loans now that stock prices have dropped back to the 13,000 level on the Nikkei index. The Bank of Japan (BOJ) estimates that the combined paper losses on shares held by 15 major Japanese banks will total 3.5 trillion yen at book closing in March, assuming a Nikkei average of 13,000. The figure would balloon to close to 5 trillion yen, if the index fell to 12,500. Under international accounting standards, all 15 major banks would then be in the red and show considerable depletion of capital by fiscal year end. "

IronHeadTree in the Forest RE: GATA Gurus - your #49191 #492173/2/2001; 0:51:36

Sir Tree - You've climbed to a "knot" of significance, which I feel GATA should be emphasizing and soliciting direct response from effected parties, which would bring the rotting wood to the compost heap. That "knot" being the Comex complicity in the gold manipulation, with the hoards of little sapplings that have been maligned by the false hope of a fair and equitable market.

Admittedly I too was at one time of the opinion that the paper markets were an equivalent representation of the material, which they purported to represent. This was before my BAT (Before *Anothers* Teachings) time, and his sidekick FOA's lessons. [If only I had the volumes in the library in the other room available a bit earlier!] As Harvey says, " what we earn and what we learn in life, is usually too late."

So, if GATA were to solicit those whom have played the Comex paper game and feel conspired against, could not this be another branch of the attack? Don't anti trust cases seek corroboration by affected plaintiffs?

I think Mr. Powell is in the other room, and perhaps we can get him to comment on this. Speaking of; he sends a really nice personal letter if you send him even a pittance for renumerative efforts in "the cause." Which reminds me, time for my monthly installment.

By the way, regarding your coincidence - my runes show 4-04 as being very significant, on many fronts. (But don't tell anyone, lest they think Harvey to be the fool he is)

Your bid on Sir Farfel's contest was great, even beat my nothing hands down.

Salutations
IronHead

HoratioHyper-inflation#492183/2/2001; 0:59:17

History has shown that hyper-inflation brings down governments.France ,Germany etc.The U.S. opted for deflation in the 30's for that reason.We did not over throw the government. The depression was not an accident,it was intentional.They didn't want a Hitler or a Napolean to come to power here.A strong man,a fascist,a dictator.Inflation means wheel barrows full of money to buy a pair of shoes 'savings destroyed,elderly people destitute.Credit will be non-existant,nobody will lend money,not for mortgages,car loans ,nothing.The whole credit system will be destroyed.NO...I believe they will do as they did before,opt for deflation.I know I am in minority here,but logic tells me otherwise.Politicians will do what keeps them in power,and so will the Fed Reserve.Inflate yes until the last minute ,but when push comes to shove they will reverse course and collapse the inflation,possibly issue new currency,like a 1 for 10 reverse split and back it with about 15 % gold.We have the gold to do it.Thats our ace in the hole!Gold will still go up just as it did in the 30's. Credit can be restored in deflation and thats exactly what brought the end of the depression,not the war ,that was a side issue because of Germanys decision to choose inflation.Thats what brought Hitler to power.When push comes to shove it will be DEFLATION.
HoratioWhat Surplus?#492193/2/2001; 1:23:04

Mr Greenspan knows what should be done with the surplus,they used to call it "retire"the surplus.Just BURN it thats all,no Im not mad ,if you think about it, that will stop inflation .You won't have to buy back bonds and disrupt the credit system,you won't have to worry about buying private assets with public money .You won't have to worry about increasing the size of Government with government spending.You won't spend it creating future obligations for taxpayers .You won't have to worry about FAIRNESS ,you will be burning rich peoples taxes,the poor can't complain,they didn't pay it..The Dollars left in circulation will buy more,poor people will benefit from the increased purchasing power,inflation will be dead.Just BURN it Mr Bush.
Up in Smoke ,take a lesson from Cheech and Chong.Just Burn it.

Cor TauriHoratio flation and the surplus#492203/2/2001; 1:51:23

http://www.publicdebt.treas.gov/opd/opdpenny.htm

Sir your ideas at first made sense to me. But then I realized we are not self sufficent. We have to trade with other nations for stuff like oil, and well just about everything. Even my cigatettes are made in Greece! Say we deflate. Just about everyone and everything in the US defaults, including the banks. I guess the Fed could buy the bad loans but then we are not talking about deflation anymore. So everyone is bankrupt. And other nations are still going to send us stuff? I know you said we would back the currency with %15 gold. And do a reverse split on the dollar. So that would make the POG what about 26.50? And other countries could trade their dollars for gold, maybe in a place like London? And .. And I bet the French would start trading lots of dollars for the gold... and Nixon, er ah.. wait...
We import more than we export, even if we do as you suggest, eventually we would run out of all that gold that is supposed to be there.
Also they can't inflate up till the last moment then pull all the dollars back. The Fed is pumping out dollars, they can stop at some point, but it still wouldn't be deflation. You can change the number of zeros on a $10 bill, but it dosn't change the amount of currency that has already been created. Well I guess it will be worth ten times what it is worth now, but what is that? Too much dollars have been created for just our country, enough have been created for the whole world to use as a reserve or more likely a media of trade settlement. If we restrict the number of dollars such that it no longer serves it's function pricing oil and other stuff for the rest of the world, then the world will use something else. It is as if deflating the dollar supply would be the very thing that is most likely to cause local price inflation in the remaining dollar area.
Of course I can't see how inflating the dollar supply is any better, but that is what the fed is doing, so they must think it's a better solution.
Sir, I do not know, but they are pumping money into the system at an alarming rate according to posters here, and while I have checked to see if the posters numbers are accurate, I am not smart enough to know for sure that the rate is indeed alarming.
In time, it will be clear what is happing now, but I don't know beyond what I can understand, which isn't much.
If it matters to you, they say gold does well in a deflation, in fact a poster elsewhere named Aurator, I think did some sort of study and found it does best in deflations.
Not that I truly understood it.

As for the surplus, I don't think there is a surplus. The link above seems to indicate we owe more now than we did before, by my accounting standards that would indicate that there isn't a surplus.

Also the poor are destroyed by deflation. The rich are harmed more by inflation. Deep down, I fear we will have neither. I fear our dollar will go the way of the Czar's rouble. But I'm a pessimist.

Mr GreshamJim Rogers on Japan#492213/2/2001; 2:00:51

http://www.millenniumadventure.com/content/stories/pitiful.html

good read
Randy (@ The Tower)Confirmation of the authenticity of the WGC cautionary letter#492223/2/2001; 4:23:16

http://www.usagold.com/gildedopinion/BakerSigns.html

One of our favorite Colorado School of Mines grads, Leanne M. Baker of SalomonSmithBarney, offers us our latest additional commentary for The Gilded Opinion. In her Industry Note published on Wednesday of this week, she sees 'Gold Showing Signs of Life', saying in her commentary, "recent developments in the lending market support our long-held contention that the equilibrium gold price is well above $300 per ounce. We continue to believe that the longer gold prices stay mired near 20-year lows, the more explosive the eventual upturn may be."

She also offers authentication of the cautionary letter sent by the World Gold Council that rightfully got much attention among gold market followers in recent days:

"...The fact that least rates continued to climb even as short positions are being reduced suggests that the supply of gold being lent to the market is, in fact, tightening.
Is there evidence that central banks are reducing the supply of gold available for lending in the market? The short answer is, yes. Excerpts from a letter that the World Gold Council sent last week to its producer members have been circulating on a number of Internet sites. We confirmed that the letter was written, and that the excerpts are quoted accurately. It appears that the Bank of England (an outright seller of gold through its semi-monthly gold auctions) has not been lending gold in recent days, a move that the WGC characterized as "unprecedented, as its short-term lending is considered a vital tool in the smooth running of the London market."
+
In the wake of the late-1999 unruly gold market, when both lease rates and gold prices spiked, some client central banks apparently injected necessary liquidity by lending gold for longer periods than normal -- a year or more, rather than three-month or six-month periods. As the gold loans have matured this year, in an environment of depressed gold prices and sub-1% lease rates, some of these central banks chose not to renew the loans, thus drying up liquidity."

Click the link to see her briefing, along with a nice chart of near-term historical supply and demand figures for the kingly metal.

TaurusDepression / Perplexed#492233/2/2001; 4:28:34

http://www.pronetisp.net/~rbrown

How can you have a depression with fiat money? Here's one attempt at an answer. Quotes from the above link...

DEBT MONEY From Chapter 3:

But what about the money supply under the fractional reserve scenario? Consider: A man has $100 in his pocket. It is his to spend. As long as he spends it, and the person who receives it proceeds to re-spend it, et cetera, there is $100 in circulation. But if someone along the way deposits the money with a banker, and the banker keeps only 25% in reserve and loans the balance... Now we have a different situation.

The man who deposits the money with a banker still has $100 in liquid assets to spend as he wishes –- or so he believes –- be it in his pocket, hidden in his mattress, or in a bank account. But now, of the original $100 placed on deposit, the banker proceeds to loan $75 to a second man.
Now the second man has $75 in his pocket to spend as he chooses. And we have $175 in circulation –- the first man still has $100 to spend and the second man has $75 to spend.
If the second man –- living in this checkbook world -– deposits the $75 with his banker, and his banker loans 75% of it (just as the first banker did) we now have $100 + $75 + $56.25 in circulation –- $231.75 in total.

If this continues, we ultimately end up with $400 in circulation. The $400 results from a $100 primary deposit and a reserve being held in each bank of one-fourth or 25% of the money deposited. A lesser reserve of 20% in each bank would result in $500 circulating for each $100 primary deposit. A 10% reserve would convert the original $100 to $1000 of spendable money in circulation. Just like magic.

And when the money supply goes up, we already know what happens to prices. We call it inflation. Note that the government didn't have to print more currency. The money supply increased entirely by merit of fractional reserve banking.

Money is created when a bank makes a loan. Each bank, alone, lends just a fraction of the money depositors place with it for safekeeping. But a group of banks, passing the same money hand-over-hand through a chain of loans and checking account deposits, multiplies the money supply several times over.

It becomes a vast whirlpool of circular reasoning. The ultimate brake on this whirlpool is the reserve requirement imposed by the Federal Reserve System... It is the reserve requirement which specifies the fraction of bank deposits which may be loaned.

Through fractional reserve banking, the creation of money is pyramided by means of loans from the seed of a single bank deposit. The destruction of money –- a collapse of the money supply -– is reverse-pyramided from the withdrawal of a deposit or the default of a loan.

Although money is created when a bank makes a loan, it takes two parties to consummate that loan: the willingness of an individual to go in debt and the willingness of a banker to extend credit. The borrower must be credit worthy in the banker's eyes. Until the loan is actually made, the new "money" is only latent or potential. The linchpin of the money supply is thus the judgment of local, individual bankers on when and when not to extend credit.

When banks make loans, money is created. Then what is money? It is nothing more than the commitment of an individual to create future wealth (by building the house or growing the crop) sufficient to pay off current debt (plus interest, of course). Money is not a piece of paper or a lump of gold; it is someone's promise; it is as fleeting and intangible as "goodwill" in accounting.

In the earlier discussion, goldsmiths practiced the art of fractional reserve banking. But in that era, the reserves kept on hand to satisfy day-to-day needs were "hard" reserves – bullion, coin, and cash money. Today, the reserves kept on hand are themselves debts, not hard reserves.

[The textbook] Money and Banking puts it this way:

"Our stock of money is made up of debts. Government currency and coin, Federal Reserve notes, national bank notes, and checking deposits are all promises to pay on demand. Our monetary stock varies directly with the volume of outstanding debt. The largest part of our money supply is created by banks who issue their own promises to pay on demand in return for the promises to pay given the banks by governmental bodies, corporations, and individuals...

"The banker is really a dealer in debt and is a convenient intermediary through which citizens offset their claims and debts to others. The clearing of credits and debts against each other provides settlement of claims without the use of hand-to-hand money. Thus society is saved the cost of acquiring huge sums of standard money, the labor and cost of acquiring the metals, and the wear and tear incidental to their use...

"It is important to recognize that credit and debt are the same thing looked at from different points of view. If Jones lends Smith $1000, Jones has a $1000 credit due in say 6 months. At the same time Smith has a debt of $1000 due in 6 months. Since credit and debt are the same thing viewed by different persons, it is illogical to say debt is bad and credit is good..."

Some 150 years ago, Daniel Webster wrote: "Credit has done more -– a thousand times more -– to enrich nations than all the mines in the world. It has excited labor, stimulated manufactures, pushed commerce on every sea, and brought every nation, every kingdom, and every small tribe among the races of men to be known to all the rest."

Obviously, Mr. Webster thought highly of credit. But, to the banker and the accountant familiar with double entry bookkeeping, credit and debt are the same thing looked at from different points of view; your accounts payable is someone else's accounts receivable.

When a bank makes a loan, money is created. We call this "extending credit". Simultaneously, we are creating debt. The only backing for the money being created is the debt commitment of the individual taking out the loan.

DEPRESSION From Chapter 7:

Inflation is an increase in the money supply. It is characterized by higher prices. When the current money supply is diluted with new money, each dollar is worth less than formerly. When money is worth less, goods are worth more (in money terms) and prices go up.

Depression (or "deflation") is the opposite. When the money supply shrinks there are less dollars in circulation than formerly. Money is more scarce; more valuable. More valuable money means that prices go down. Depressions are characterized by lowered business activity, higher unemployment, and lower prices.

It would appear on the surface that with printing press money, not backed by gold or silver, deflation is all but impossible. The government can prevent that from happening by just revving up the presses. Right?

Wrong, because our money supply consists of more than just printed currency. Over 70% of our money supply is in the form of checking account balances. It is "debt-based" money, created when a bank makes a loan. The Fed can create an easy-money policy but it cannot force people to go in debt. Therein lies the rub. The Fed's power to increase the money supply is limited by the willingness of individuals to go in debt. As Paul Samuelson puts it in Economics, "This is summarized by the aphorism ‘the central bank can pull on a string (to curb booms), but it can't push on a string (to reverse deep slumps).’"

A depression, by definition, is a shrinkage or contraction of the money supply. But the roots of depression, ironically, are found in inflation. The sequence is this. First, the money supply is inflated. Then, when the inflation is recognized, investors demand higher interest rates to keep ahead of it.

The inflation rate, piled on top of the premium already being charged for other kinds of risk, raises interest rates to levels that guarantee loans will never be repaid. They cannot be repaid, due to the nature of compound interest [subject of a different chapter]. They will be defaulted. Inflation is the straw that breaks the camel's back...

...Ah, the magic of it all. The magic of compound interest. The magic of leverage. The magic of fractional reserve banking. "Neither a borrower nor a lender be," the proverb admonishes. Old fuddy-duddies. What do they know?

We hear on TV about the Fed raising interest rates in a pre-emptive strike to head off inflation. This is a half-truth at best, sung by a chorus of professionally coached basso legato voices, uttering with certitude whatever appears on the TelePrompTer. Tout au contraire. Higher rates do not cure inflation; they result from inflation.

After the money supply has been enlarged, the Fed raises interest rates to discourage borrowing and prevent further inflation. Because it is the Fed who first raises rates, it appears that the Fed controls rates. The Fed controls inflation, but it does not control interest rates thereafter.

When inflation occurs, investors demand higher rates to stay ahead of it. (Borrowers are willing to pay higher rates because they foresee that a loan can be repaid with cheaper, inflated dollars.)

As inflation heats up, each new interest rate level consists of (1) the ordinary incentive demanded by investors to part with their money for a time and put it at risk, plus (2) the inflation rate, plus (3) an extra couple of points tacked on by the Fed to discourage borrowing (and give the impression, real or feigned, that the Fed has entered an inflation-fighting mode).

Each time inflation increases, interest rates increase. Investors control that. Investors buy government bonds. They buy the bonds only at discounts steep enough to produce the rate of return they demand, inflation fears included. Or they don't buy. The Fed doesn't control that. The Fed controls only step #3 –- the last little bit tacked on for public relations purposes.

Inflation causes higher interest rates. Higher interest rates cause borrowers to default on their debts. Default causes the money supply to contract. A contraction in the money supply is called a depression. Inflation causes depression.

The inflation game goes on until somebody can't pay. Then the pyramided, interlocking structure of debt comes crashing down and the money supply collapses. Printing press money (fiat money) does not prevent depression; fractional reserve banking actually contributes to it.

Because the cycle takes longer than a generation to play out, the pattern tends to be forgotten. As a result, the depression at hand is always a fresh surprise and mystery to the generation experiencing it.

Once begun, a depression perpetuates itself. First, borrowers who are deemed good credit risks by the banks and who would be welcome to borrow money at any time are themselves not in the mood to take on new debt. For one thing, the future looks troubled. For another, the loan will have to be repaid in ever more valuable dollars. Result: loan application not made.

Second, the borrowers who get something less than red carpet treatment from banks, those who need to borrow money because of financial difficulties, are deemed poor credit risks by the banks. Result: loan application not approved.

Third, many banks fail in depressions. Those which remain are not much trusted by the few folks fortunate enough to have a little money... So deposits dry up. Without deposits there is no money to lend.

For all these reasons, lending stops. Without lending there is no expansion of the money supply. The depression -– the contracted money supply –- continues.

How does it end? In the case of the Great Depression of the 1930's it ended with World War II. We are given the impression that wartime deficit spending by the government somehow or other lifted the country by its bootstraps out of depression and into prosperity. It's unfortunate that it took a war to do so, but that's how it happened. Or so we are told.

Actually, the Great Depression did end with World War II, but it did not end due to deficit wartime spending any more than it ended with pre-war deficit spending. It ended due to the monumental influx of European money. Europeans sent money to this country for two reasons. One was to buy war material. The other was investment money seeking safe haven in the midst of war. By 1948 the U.S. government held 75% of all the gold in the free world. We did not lift ourselves out of depression. Rather, the Europeans sent us all their money.

If nature takes its course, a generation or two of inflation will lead to default and depression as described above. There are other, unique scenarios, however, which could leapfrog the natural course of events and throw us directly into depression.

How about this one. The Pacific rim is subject to earthquakes. Chile, California, Alaska, the Philippines, and Japan are all part of the Pacific rim.

Tokyo real estate is the world's most expensive. It is reported that a few blocks of downtown Tokyo have a higher dollar value than the state of California. One big earthquake could bankrupt all the major American insurance companies, obligating them to dump holdings –- stock, bonds, real estate –- at whatever price they can get. Golly, Mr. Perot, talk about a giant sucking sound...

AND WHAT CAN WE EXPECT NEXT? From Chapter 13:

If nature takes its course, it appears that the logical sequence we face is (1) increasing inflation, followed at some point by (2) wage and price controls, followed at some point by (3) deflationary depression. Of course, a major debt default (by a third world country unable to pay its bills, for example) could leapfrog the normal course of events and plunge us directly into depression. In fact, the next thing on the horizon could be inflation or depression or both –- and in either order. In simple fact, no-one knows what's coming next. No-one.

And if a war starts, all bets are off. War is as likely as any other scenario because it allows politicians to rally support in the face of failed policies, consolidate power, impose controls, and shift blame. War –- rallying ’round the flag –- is a great blessing to a faltering leader...

I believe that a "prudent man" should structure his portfolio such that it is shielded in every way possible from potential calamities –- double digit inflation, war, 1930's-style depression, an incipient police state, wage and price controls, or foreign exchange controls. No? Look me in the eye and tell me that none of these things will happen (again) in my lifetime. Sorry, friend, but as the punch line of a dirty joke has it, "Be ye not a wee bit old to be believin’ in leprechauns?"

justamereBearJourneyman#492243/2/2001; 6:02:04

I would like to discuss a private matter that I think might be of interest to you. If you are so inclined please e mail me at
This email address is being protected from spambots. You need JavaScript enabled to view it.

j'Bear

BelgianJapanitis !#492253/2/2001; 6:25:59

Japan, the second-largest-world-economy (!!) is at a 15 (fifteen) year LOW ! This fact is the purest evidence of the "rotting in the state of Denmark" . The total world-volume of paper currencies is not backed by total volume of products and services. This golden(sorry-paper) era, is specialised in the creation of hot air out of nothing. Wealth-Illusion, created with lesser and lesser working-effort. Speculative euphoria. Welfare at your service.

The inflation/deflation, discussion, has already 15 years of age. Economy is the result of mass-perception. Impossible to predict the final outcome. Panic and greed extremes are constantly engineered and contained. Patiently awaiting THE Fatal and Destructive shock-wave. I'm not claiming a Nobel price for this statement :-)

We don't choose for deflationnary Debt-Paper-Money-Destruction. Debt write-offs, Defaults, Stock Market crashes and bankrupcies, are the results of mass-perception-moves (changes), with their specific momentum-structure. Japan isn't able to engineer a positive outcome. The US-bastion, must (inevitably) follow, in the global march, for radical change. Credit-creation and resulting UNPRODUCTIVE (useless) Debt is cause (intrinsic) for the uncontrollable and growing systemic crisis. The social-political model of wealth-redistribution (welfare) is cancered. Statistics are of little help to provide the evidence. Serene observation of people's attitudes, says it all. Drastic, corrective, action,(fiscal-monetary) is already to late.
Unproductive debt MUST be destroyed, before healthy money can be used for a new period of "natural" growth. (linear growth versus exponential growth). If ALL want Everything NOW...growth is condemned (forced) to go exponential. This proces, developped during the last 30 years.

The flight to quality will be initiated when the poison, passes, the brain-barrier (denial >>> acceptance). A dollar-index, below the 100 level, is IMO, the pain-barrier. Continuation of the 1985 dollar-decline. Momentum build-up, below this 100-level, will decide if the masses will be guided to inflation or deflation. Interest rates - direction (up/down) will signal, wich way we will go. Cash and Gold will rule without any doubt! With or without Deflation or Inflation choice. Winter and summer season are the opposite extremes of spring and autum.
Each proces of growth, starts in spring. Early blossoms, freeze and will never produce any fruits. Winter is knocking at the front door, already. Call the japanese for confirmation.


With my poor spaghetti-english...just repeating what many others are trying to say with more, sophisticated-economic-language. It is the degree of conviction that is the most important for survival or protection. The masses are still, decisive in the denial status. They don't want to fly, to picture the ongoing "fundamental" detoriation.

WGC is receiving 2$/ounce from the profitable miners. A total of 57 million $, means that only 28 millions ounces of gold are mined at a profit, yearly. This is only 850 tons out of 2.400 tons of newly mined gold ? Significant ?

Stocks, Lies, and Ticker TapeWorried about bonds#492263/2/2001; 8:28:42

Before the markets turned down I was worried enough to change my IRAs and 401Ks from stocks to US treasuries and "secure" corporate and municipal bonds. Over this last year I have benefitted from this since the stock funds have had real trouble. There have been a few posts on the forum that have gotten me concerned about being in bonds now.

Could someone please explain in a very simplistic way, why there is a concern about these bonds? I have never cherry picked investments or insurance (with the exception of gold). That which is out of my control I have always stayed away from since I have a healthy respect for other peoples greed. Because of the tax laws I am in bonds now, and previously in stocks. Is there any other option that is out there? Unless I find an ideal retirement property at an ideal price, I fear a crash in real estate prices is inevitable. Any suggestions as to how to position oneself?

USAGOLDToday's Gold Commentary & Review#492273/2/2001; 9:20:59

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

Mutual Funds Experience Record Exodus

3/1/01 www. usagold.com. . . . . Gold sold off sharply this morning on reports of heavy fund selling with some of the banks coat tailing the maneuver and others taking the opportunity to fill short positions. Things were nip and tuck in Asia until the price gave way in London and then at the New York open. Yesterday reports circulated that a single "fund" was responsible for driving gold lower. The paper selling, as has been the case in the past, is being met by physical buying around the world. In the face of rising inflation numbers, a worldwide energy crisis, an irresolute dollar and plummeting stocks, one wonders what might motivate this "fund" shorting the market. The DJIA was down over 100 at the open, and the euro up for the second straight day.

As gold retraced its recent gains late this week, reports circulated in the mainstream media about a mass exodus of the investing public from the stock market. . . . . . . . .

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

Registration required to access the full Commentary & Review. Please go to the link above.

Chris PowellGATA advancing in South Africa#492283/2/2001; 9:27:11

http://groups.yahoo.com/group/gata/message/691

President Mbeki's office calls, and
a leading black businessman signs on.

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.

Chris PowellReply to IronHead#492293/2/2001; 9:37:23

Yes, an attack on the gold cabal by people who
have traded futures and options on the Comex
is very much in GATA's thoughts. Our current
lawsuit may be extended to become a class action
that would include Comex traders. The time is not
quite right, but maybe soon -- I hope.

TheStrangerStocks, Lies, Etc.#492303/2/2001; 9:48:35

Bonds have two kinds of risk. First there is credit risk. That is the risk that the bond issuer's ability to repay will diminish over time, perhaps to zero. This would reduce the value of the bond accordingly. Credit risk is not usually a factor when buying treasuries, but it is always a consideration when choosing municipals or corporates.

The other kind of risk facing bonds is interest rate risk. If you buy bonds at currently prevailing rates of return, and then the economy experiences a general rise in interest rates, your older, lower-yielding bonds will no longer be as attractive to new investors. You will have to mark them down in price to sell them.

Interest rates are always a function of prevailing inflation expectations. U.S. wholesale inflation for the past twelve months (Feb.1,2000 to Feb.1,2001) was 4.8%. Currently, investors in 30-tear treasuries are content with just a 5.35% rate of return. No doubt this is because they believe the current recession (if that is what we are in) will drive inflation, and thereby interest rates, down. But what if they are wrong? What if inflation rises from here? Soon, the rate of inflation would exceed the rate of return on their bonds, making their investment a poor one indeed. Under such a circumstance, the bonds would most assuredly decline in price.

As it stands now, the AFTER TAX, AFTER INFLATION return on 30-year treasuries is already negative for many investors (depends on tax bracket). So, there is no justification for buying them unless one believes inflation rates are about to decline. This raises doubts about the advisability of owning most other bonds as well, since most bonds are subject to the same valuation influences.

Bonds are poison when inflation rises. For this reason, they are often considered the investing antithesis of gold.

Sierra MadreBonds...#492313/2/2001; 9:59:38

Franz Pick, a great advocate of gold money years ago, produced the following dictum:

"BONDS ARE CERTIFICATES OF GUARANTEED CONFISCATION"

Stuff for casino players, not serious investors.

Sierra

Old YellerCredibility;gold's got it ,does anybody else?#492323/2/2001; 10:21:06

http://www.newaus.com.au/econ197colin.html

The world monetary system relies on the credibility of it's various players to function in a semi-orderly way.Where is the epicenter of said credibility?Why it rests with Mr. Greenspan,of course.

Perusing the latest comments from the Maestro,I was left wondering(as all of do,in befuddled amazement),just how this man manages to keep this image as an all-knowing steward,more or less without question since the 1987 market debacle.

We are all quite aware of his history of re-liquifying markets as problems occur,thereby rescuing all those "suffering"from poor investment decisions.Leaving aside the implications of such moves on future ramifications,he maintains his credibility as the Maestro,rescuing the monetary system from chaos and ruin.

So,how can the image of credibility be maintained now in light of his latest offerings.Firstly,he admonishes government to maintain fiscal responsibility.His actions with the credit bubble developed during his tenure stand out in stark contrast.Secondly,he is back to pondering that in the absense of policy changes,the government may have to acquire private assets as a result of the growing surplus,"in a few short years".This appears to be deception of the highest order,as the issue of financing the surplus has been laid bare here at the forum and elsewbere by so many.

As Randy so succinctly put it yesterday;Arrgh!Credibility;who's got it,got gold?

PS,the commentary is there,just scroll down the page to find it.Contains a positive mention of GATA,too.

Orville GoldenbacherAG hypnotizes wall street into rally?#492333/2/2001; 10:51:43

http://www.timesofindia.com/today/01mbom5.htm

BEWARE!!!
"You just could be the next victim of the tricksters waiting to fleece you. With their cheating modus operandi getting more innovative, a lot of people are falling prey."

Mr GreshamJapan and US Bonds#492343/2/2001; 11:10:14

Haven't read below yet to see what else posted, but I'll just get this in:

Mr Moto says:

"Japan was a net seller in December, with holdings falling $4.2 billion to $335.8 billion.

"That's the latest. Which would be very near to 25% of the public debt that's held by foreign and international investors, and about 6% of the whole. "

Is this why the talk about Treasury "buybacks" and future premiums on T-bonds? (I mean, as in, "Let's REALLY talk this one UP, gang") To keep Japan in the big dollar-asset holding pen? "Thanks for the yen, friend. Sorry about that $80 sushi roll..."

Artie FarkleALL#492353/2/2001; 13:06:10

Just a reminder:
It's not too late to send out letters in support of GATA.

All one has to do is say "I vote and I support Gata."

If you send a letter to each of the following addresses, you will accomplish a few things. You will take up their valuable staff time opening counting and sorting mail.
You will also get their attention and let them know that we are paying attention to what they do. : )

Each letter is like an informal ballot so, cast your votes

Treasury Secretary Paul O'Neill
U.S. Treasury Department
1500 Pennsylvania Ave. NW
Washington, D.C. 20220

Charles A. James
Anti-Trust Division
U.S. Department of Justice
950 Pennsylvania Ave.
Washington, D.C. 20530

Mr GreshamDerivatives give extra nudge to falling Nikkei#492363/2/2001; 13:37:06

http://biz.yahoo.com/rf/010302/t122863_2.html

"Nobuaki Kurisu, chief fund manager at Sumisei Global Investment Trust Management, also cited derivatives-related selling as a factor in the stock market's plunge, and added that such selling should keep market volatility high for the time being, making institutional investors hesitant to buy.

"Analysts said speculators have been selling Nikkei futures contracts in the past weeks, trying to nudge the Nikkei average to pre-determined levels that will in turn trigger hedge-related selling. Many of the trigger points were believed to be set at or below 12,600.

"THE RUSH TO HEDGE

"Equity linked derivative bonds, which usually mature in six months to one year, offer higher interest rates than ordinary bonds if the Nikkei stays above a pre-determined level.

"But once the Nikkei drops below that level, the return at the bond's maturity will be lower than the initial investment. This causes brokers to hedge by lightening existing long positions or selling in the market.

"``Arrangers of these products have to sell either Nikkei futures or a basket of Nikkei 225 component stocks to hedge, and there are more trigger points if the average dips to 12,000 and further to 11,500,'' said Hirokazu Kabeya, analyst at Daiwa Institute of Research.

"He said up to 100 billion yen ($852.2 million) worth of these bonds have been launched at each of three different pre-set Nikkei levels -- between 13,000 and 12,500, between 12,500 and 12,000 and between 12,000 and 11,500."

Mr G: We wouldn't have any of those around here now, would we?

"She's vibratin' too much, Captain. I dunna think I can hold her t'gither much longer..."

HenriMr. Gresham#492373/2/2001; 14:36:59

Yaaahhh! She caan't take anymore Captain!
HenriPeter Asher's Feeding Leviathan...Behind Closed Doors the panic begins#492383/2/2001; 15:26:28

A long time ago in a place not so far away...

PTB#1-"...Well and we've got this blasted debt that we decided to sell to the foreigners. We keep owing them more and more money every year. People are sending our dollars overseas and we have to pay them off to keep them from coming back. If we let the dollars back in we have inflation. If inflation takes hold everything will come to a grinding halt. What we need is a way to pay off the debt without causing domestic inflation."

PTB#2 "...OK lets try this. We get the banks to stop paying decent interest on insured savings. That will free up some money/liquidity to seek higher returns elsewhere. Our friends on wall street say that they think the time is ripe for a real market run-up. Lets say we let the market appear to be returning better than the banks used to then feed the frenzy with the printing press. All the new money will flow right into the bubble and not cause inflation in the traditional sense. Then when it gets really huge we tip off the wall street guys to present the case that the market looks a bit unstable. Then everyone will bail and rack up incredible tax revenues to be collected. With the surplus in revenue we can buy back our debt. End result, we fool the foreigners about our prosperity then prime the pump to get what looks like legitimate revenue. We buy back our debt with inflated dollars and the economy booms and NO inflation!"

PTB#1 "...Why that's brilliant! do you really think we can pull it off?"


Later...much later...

PTB#1A "...Yeah but didn't the idiots realize that once hooked on high returns and being told to hold for the long term, that the people would not sell until they were well in the red! There's no surplus in that!

PTB#2A "...And to make things worsre those same foreigners jumped into our bubble and drove it way higher than was ever intended. Now they are pulling out and causing volatility that is difficult to contain. All the while the domestic public is waiting for the rebound. To make that happen we are going to have to print 1000 X more money than we did to get this thing started. Then the public leveraged themselves to the hilt to get more speculative advantage. Now they are tapped out and in danger of not meeting their payments due."

PTB#1A "Cripes!"

Randy (@ The Tower)Last chance ... gold from Switzerland and Denmark#492393/2/2001; 15:37:22

http://www.usagold.com/onlinestore/special.html

The final grains of sand are running through the hourglass on this offer of Swiss 20 franc confederatios and Danish 10 and 20 kroner gold coins. Act now because, like time, this offer won't wait.
CoBra(too)... The Ides of March...#492403/2/2001; 16:42:57

I'm off to ski ... the promised champagne powder slopes of the Austrian Alps ... and leave any and all unfinished business until the 'Ides of March'... when we'll have some clarity as to the cabalistic variety of gold derivativity - probably.
Best to all of you - cb2

JourneymanHey there PPT! Is your slip showing? @ALL#492413/2/2001; 17:41:57

A very strange thing to report. Advanced Micro, a company that
warned about lower profits right here on our air earlier today is
now up 11%. This is not a misprint. -Tom Costello, CNBC,
Thursday, March 01, 2001, 3:20PM EST.

CNBC Anchor: "It WAS a rather odd turn around wasn't it? And just
exactly at 2:30?" ~"Yes it was - - and it centered around
Advanced Micro Devices." -Liz McKay, Bear Stearns, CNBC, March 1,
2001, 4:18PM EST

Regards,
Journeyman

Tree in the ForestIronHead#492423/2/2001; 18:30:49

Many thanks for your kudos friend. Hope Farfel is still with us. Every internet board needs a good rascal! So...you've got runes! Wow. I'll have to get me some of those. When I get 'em, I'll check 'em and get back to you. <grin>
Hill Billy MitchellStocks, Lies, and Ticker Tape @ # 49226 - worried about bonds#492433/2/2001; 18:39:26

TheStranger (3/2/2001; 9:48:35MT - usagold.com msg#: 49230)

Sir,

You would be hard pressed to find anything better in the way of guidance on bond investment concerns than what TheStranger offered per his post # 49230. Since you mentioned that the assets in question were of the IRA—401K sort, one might at first think that TheStranger's point about AFTER TAX effects might not apply. The fact is that they do apply, as the postponement of tax via these deferred vehicles only exacerbate the problem. Almost everybody I know who finally got to the point of cashing out on these types of investments ended up paying more taxes at the point of liquidation than they would have paid had they paid the taxes as they went. An excellent statement appeared on this forum a few days ago by TownCrier @ # 49085 in which he says it best, "Generally, what is a "capital gains tax" but little other than a "currency devaluation tax" (‘inflation’ ‘tax’). This after tax, after inflation thing that TheStranger so aptly spelled out affects even the tax deferred assets which you are concerned with, and the longer the deferral the more pronounced the negative net draw-down in your investments.

If you were to roll these investments out of Treasuries where would you go at this point in time? With all the talk of the possibilities of things moving either direction (inflation or deflation) and even worse the possibility of stagflation, with the uncertainty of it all, it might be prudent to choose a haven where the assets would benefit no matter which direction the US dollar goes. (This works best at the moment because POG is at or near production costs and downside risk is negligible.) I know that Michael and Co. can handle an IRA roll-over into Gold should you choose to "cherry pick" on even these assets.

Of course you cannot avoid the capital gains tax caused by inflation but at least you do avoid the devaluation caused by the possibility of inflation, the very problem that is most dangerous with Treasuries and or any other types of bonds.

I know what Stranger said was short in content but it is the sort of item which I believe belongs in the HOF so that it can be easily and often reviewed by those who like to take the efficient route to truth and understanding. I hereby nominate Post # 49230 to the HOF. Any seconds?

Very respectfully,

HBM

Randy (@ The Tower)Sir Mitchell...#492443/2/2001; 19:15:10

An exceptional demonstration of discernment on your part in making this nomination for Sir Stranger's bond expo. As I do the work of "four men" here in The Tower, does my SECOND provide automatic qualification? Perhaps....

got power?

PS. To those seeking Farfel, I have it on highest authority that his ability to post remains as unfettered as yours or mine. Any absence is by choice or chance, but not by circumstance.

SHIFTYGoldfields/Anglo Gold/ It's a Wonderful Life/ NOT#492453/2/2001; 19:22:54

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256A02006A52A1?OpenDocument

I read the article in Miningweb by Tim Woods (see link). I cant help but remember a
scene in the movie " It's a Wonderful Life " In the scene I am thinking of
Potter tries to hire ( buy ) George Bailey and offers him a cigar, a Big
salary and the nicest home in town and even trips abroad. George Bailey asks to
think about it and talk it over with the wife. Potter say's "Sure ! , Take
all the time you need my boy! " . And then George Bailey remembers who he is
dealing with. He lets Potter have it ! Im sure you know the scene I am
referring to. I find the similarity uncanny.

$hifty

$hifty

VanRipSecond to Stranger's post#492463/2/2001; 20:35:09

Though I post infrequently, I hope my second to Sir Stranger's inflation post will be counted.

For reasons I cannot explain, his posts on inflation (and especially this one) always remind me of some interesting times I had in New York City. I often ate with a friend at Katz's, a famous deli on Houston Street. My friend would always order the same sandwich and while it was being prepared would yell at the counterman "AND MAKE SURE WITH MEAT ITS LOADED." That's the way I see Stranger's posts - always lean, no fat, and with meat they're loaded.

ETStranger#492473/2/2001; 20:42:04

Hey Stranger - let me also offer my kudos to the list. I have a question for you. Let's say we rule out stocks of any kind as an investment at this point. Also, let's rule out most bonds. Assuming the safest bond is issued by the entity that can essentially print money to cover, which debt instrument would you hold to the exclusion of others at this time and why?

The reason I ask, it seems to me the only way to place your funds today if you don't want all your money in physical gold would be high grade debt or cash. As a second question I would also like your opinion on the viability of money market funds in a liquidity squeeze. I noticed a couple of houses are moving cash into savings accounts out of money markets.

It appears all debt is coming under tremendous stress. In my industry receivables have jumped an additional 2-3 weeks. Businesses will have to borrow more at this point or face default. We're seeing credit lines being extended for what appears to be a case of "let's give this show another 90 days". I'd be safe in saying that cash flows are getting squeezed real hard.

Have you heard anything from old Cavan Man?

HOOSIER GOLDBUGFARFEL AUCTON BID!!!!#492483/2/2001; 20:44:10

My dear FARFEL:
I bid my now defunct downline in the multi-marketing FAMILY OF EAGLES, which I had hoped to use not only for exchanging fiat for REAL money, but to educate the proletariet on the inherent risks in fiat money, the REAL role the Federal Reserve is playing in destroying lives, countries, sovereignty, etc. I began in earnest in 1996, at least that is the year I solicited most of the participants below me, back when REAL money was around the $350-$400 mark. But the my efforts quickly regressed, first slowly, then more rapidly as the price of gold went down. Try convincing people that it is inherently to their well being to pay $1980 for 2.7 ounces of 1/10 ounce gold American Gold Eagles, when the spot price of gold is declining. To further the process, I quaranteed that if they (Participants) were unconvinced of their need for possession of the REAL money, I would buy their $70.00@ Gold Eagles back within a year! Needless to say, the cabal kept shorting the paper, and forced me to come up with $40,000 to buy back the participants' gold. So now I am going to put up my DOWNLINE for the hopes of winning your auction!
Do I begin my acceptance speech this way????????????
It is with great honor, Mr FARFEL that I accept the winning trophy because I truly deserve it and ...............
Sincerely,
HOOSIER GOLDBUG
P.S. You could give me my due respect in grading my bid against the other participants of your auction. HOW DO I MEASURE UP??????
THANKS in advance, Mr. FARFEL.

ShermagET, Money Market funds#492493/2/2001; 21:41:07

I think it was Tice or Noland that warned of a coming disaster in the money market funds. His case was that these funds are largely involved in purchasing the securitized recievables from credit card debtors. The creditworthyness of such will be dubuois at best in a liquidity squeeze. If I am correct, the money markets also finance the leases on everything that moves, and much that doesn't. How well will the leases on all those SUVs be honored in the coming credit debacle?

Shermag

SHIFTYHOOSIER GOLDBUG #492503/2/2001; 21:51:13

FARFEL AUCTON BID!!!!

HOOSIER GOLDBUG
I think you missed Farfels Auction. Wednesday was the last day.

$hifty

Mr GreshamET -- Treasuries#492513/2/2001; 21:51:51

http://www.savingsbonds.gov/com/comi1100.htm

Well, the official financial advisor's answer for the safest Treasury would be either 90-day T-bills bought through Treasury Direct (your own account with them, not through a broker.) Now paying around 5%.

Or Savings Bonds -- I-bonds -- which are now at 6.49% (which is 3.4% plus the calculated interest rate of a recent six-month period.) Rate is re-adjusted every six months.

You are price-protected with both of these, as you will not lose market value in an interest rate rise, and your rates will in effect move up with the market for the Treasury Direct, and with inflation (yes, the CPI sham) for Savings Bonds.

Also SBs have option of deferred taxability on interest and altogether tax-free interest if used for certain educational expenses. (Read, read, read the fine print as to ownership, purchaser, etc etc.)

Yes, I feel the same as you about lending more money to the same pickpockets who herd us all toward April 15 each year, and then counting on the skills of the IRS in being YOUR debt-collector. But, hey, Savings Bonds are the gifts that other people give your kids, so you might as well be sure they're in the right vehicle.

ZZZZZZZZZZZZZZ-----
I occasionally have fun trying the mental exercise of figuring how to arbitrage the Savings Bond rate vs (shorting?) another Treasury security (5-year? 90-day?), but I'm usually asleep before I get very far. Beats counting sheep...

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

I sense a disturbance in The Force. Do you think Trail Guide has something for us tomorrow after this turbulent week?

Mr GreshamCorrection#492523/2/2001; 21:56:15

Sorry, that's "3.4% plus the calculated INFLATION (not interest) rate." 3.4 is the interest, and stays fixed for the 30-year life of the bond, and they say they're adding on 3.04% for the inflation rate. 'Twill be interesting to see how high that goes, or doesn't.
Mr GreshamDoug Noland -- Credit Bubble Bulletin#492533/2/2001; 21:58:35

http://216.46.231.211/credit.htm

on Ron Paul
ShermagA thought about some impetus for the current stock market slide#492543/2/2001; 22:11:08

I am wondering how much the current stock market fall, particularly in the big techs, is driven by the need the beneficiaries of ESOPs to raise cash to cover a tax liability. As the deadline of April 15 looms near, these poor souls must be near the point of capitilation, no longer waiting for a rebound to deliver them from their woes. At some point, commencing several weeks ago I speculate, they decided to cut and run. This may also help to explain why Mr. Magoo's rate cut had only a momentary support for the market.

Shermag

Hill Billy MitchellHOOSIER GOLDBUG @ # 49248#492553/2/2001; 22:12:49

My, Sir Hoosier,

You really came out of the closet with that one.

O'Steen reminds me of Clinton in the way he used religion to get gain. I have often wondered if any FOA casualties like myself were posting or lurking on this forum.

I have way over 100 now defunct tracking centers. Shucks, I cannot believe that there is another like me out there. My loss upon honoring my personal guarantees to others amounted to $26,880. My promise was to make sure that they had double the number of ounces they purchased if they did not double their money by January 1, 2000. I ended up buying 96 ounces @ $280 and forking it over to these people who trusted me. They still trust me. My wife thinks I am nuts but she still keeps her stash for the big one. Sometimes we laugh, sometimes we cry, but mostly "we stand and wait."(Milton)

Very respectfully,

HBM

Hill Billy MitchellShermag @ # 49254#492563/2/2001; 22:24:33

Sir,

That was quite perceptive. You may be on to something there.

Respectfully,

HBM

Hill Billy Mitchell@ CavanMan#492573/2/2001; 22:27:06

Good Sir,

Are you still among the living.

HBM

ETShermag, Mr. G#492583/2/2001; 22:28:23

Hey gents - thanks for the input. I've got this profit sharing plan that has rather dubious choices and I can't exit with the dough. Aside from various foreign and domestic stock schemes I have the choice of money market, "Bond Fund of America", and Franklin Real Estate Securities. Fortunately I'm not counting on this "money" but I'd like to maximize the return if such a thing is ultimately possible. Unfortunately, 90-day t-bills isn't a fund of choice. <g>

I'm sure many readers here have a similar "plan" and would appreciate any input regarding ideas on how to get hurt the least regarding these funds. Is there any "value" in any of the above choices?

HOOSIER GOLDBUGFARFEL AUCTION!!!!!!!#492593/2/2001; 22:32:40

MY BAD!!!!
TheStrangerAre You Guys Nuts?#492603/2/2001; 22:40:09

HBM, Randy, Van Rip and ET - You'd think by age 52 I could take compliments in stride. But, honest to goodness, I blushed when I read your praise. Thanks for making my day!

ET - If I had to buy bonds for my IRA right now, I would buy short term treasuries maturing in a year or less. Outside my IRA, I would probably buy a short term insured municipal bond (they are tax free). But I believe that inflation is on the rise, and I don't want to lock in the current low interest rates any longer than necessary.

If, on the other hand, I thought we were headed into a debt trap (ala Japan), I would put all of my IRA money into long-dated zero coupon treasuries. As interest rates cascaded to Japan-like lows, my bonds would ratchet higher in price.

Now, about money market funds: Just this week, one prominent fund family had to supliment their money market fund with their own corporate cash in order to keep it from breaking the sacred dollar per share price. I don't recall who it was, but it was a well known name. Someday, perhaps soon, some big money market fund finally WILL break below a dollar a share, and when it does, it will scare the heck out of everybody.

If you are concerned about the safety of your money fund, consider using one that only invests in government paper. Most fund families offer such an animal, and, though you will get a slightly lower yield, you may sleep a LITTLE better at night.

I do hear from Cavan Man fairly regularly. Thanks for asking. Like me, he may sometimes be simply trying to avoid overposting. Who knows? Perhaps he is lurking even as I write this.

Thanks again to everybody for the kind words.

ShermagHBM, Your kind words#492613/2/2001; 22:44:23

Thanks for the nod.

If that notion has any merit, the effect will diminish into the deadline. Perhaps the time of a near term bottom?

Of course, the issue that I refer to would be only one of many varied influences on the market. Many cross currents are at play. From my simple perspective, I can only be confident of the long term trend toward parity with historic norms. All else to me remains a mystery, revealing itself one episode at a time.

Shermag

ETStranger#492623/2/2001; 23:07:39

Hey Stranger - thanks for your thoughts. You'll certainly not be accused of over-posting. <g>

Do you have any thoughts on European debt, primarily Swiss debt?

Old YellerNewmont and NASDAQ;birds of a feather or?#4926303/03/01; 02:15:45

http://www.bigcharts.com/intchart/frames/frames.asp?symb=nasdaq&time=8&freq=1

I don't profess to be a technical analyst,most of the time a chart is a secondary consideration.That being said,I found this chart to be quite interesting.This month brings the anniversary of the nasty NASDAQ bear,hence the one year time frame.I chose Newmont because they are unhedged,familiar to most investors;gold oriented or not.

It is the interplay between the two that stands out,they track each other in an almost identical fashion at times,at other times in almost a perfect negative correlation.The present time looks most intriguing,it appears that if NASDAQ breaks through the very important support levels it now sits at,the speculative money flows look ready to jump into another arena.

Could it be Newmont or as a proxy,gold?

Old YellerC'mon, rookie#4926403/03/01; 02:24:21

Whoops,posted link seems to have lost the NEM line.Just click on "compare to"and add NEM to symbol box.
BelgianGOLD or BONDS ???#492653/3/2001; 5:34:58

I'm unpleasantly surprised that this above question, arises on this forum. Physical Gold-Accumulators, should know better. IM-strong-O, there is no place anymore for any kind of DEBT-PAPER ! If you desire interest rate income, stash your cash on an ordinarry account, immediately available.

After 20 years of POG descend and the present possibility of further accumulation of physical gold at decreasing prices...we have the bulk of arguments for future profit and wealth-protection. What will be the POG 5 or 10 years from now ? Still hanging around the 250$ or lower ? Nonsense !! Yearly Goldproduction will decline rapidly and the WA is our quasi guarantee that CBs will not unload the 32.000 tons. Reread the 12.000 tons underground gold, projections and the dominance of South Africa (50%) as a 100 year old gold-producer.

The incredibable Debt-Berg, can only survive and be rolled over, as long as some kind of growth is engineered. If growth stalls after the past MEGA_EXPANSION, we are left with only two choices : extreme deflation, or extreme inflation. Both are destructive and strongly polarising on interest rates and currency-balances. There is not such thing as a soft landing possible. The DEBT-TRAP is a French guillotine. Sooner or later, but most probably, within your 5 to 10 years of Bond lifetime. A POG of 600$ is not at all unrealistic, within this 5/10 yrs. This is a plus 100%.
With NO RISK at all. Give me one single argument why any Bond can compete with physical gold at an accumulated average of 300$ !!!! (realistic assesment)
POG at 260$ or below is not a pricezone where the classical and boring 5%-10% goldpart in portfolio-advise is applicable. We know better.

BTW, the same goes for silver : 4,5$ >>> 9$ Impossible ???

Accumulating debt is an extremely dangerous luxuary, you can afford to play for an extended period of time. That re-distribution and phantom welfare-time is running out, slowly but surely.

My conviction, may seem arrogant. Please do counter the basic argument. I'll remain all ear. And consider this as NIA at all !

The total amount of unproductive and mostly speculative paper money, wich keeps on surching, desparetely for return, is in absurd proportion to productive-money-volume, serving for growth in products and services. All debt is supported by illusionarry Government back-up.

Allocating your precious paper-surplusses in LT-Bonds is believing that we will surely be able to manage another transitionnal period of debt roll-over, without any shock.
Why isn't the second world-economy, Japan, not able to realise this transition after full 10 years ? What's wrong with the Japanese ? After full deflation (zero% interest rates), they will be forced to hire the Inflation-monster again. Sam, play it again !

We have no basis anymore to start a new expantionnal growth-phase. Debt and Speculation is NOT the right foundation to build on. Previous fantasy-wealth was already builded on too much air. Air = unproductive and speculative paper money. Europ is in no better shape than the US. Taxes and exhorbitant welfare are inflationary in itself. We don't talk about money-creation or expansion. We just live as Gods in France, milking the paper cow. The high degree of private savings is also in pure or derivative paper-form.
Just hanging here unproductively and projecting the amount of produced paper surplus against the volume of products and services, created and needed.

The next 5 to 10 years carry a high statistical relevance of explosive, brutal change. GOLD...the ultimate selfdefense. Accumulate as much as you can...NOW !

714re: gold or bonds#492663/3/2001; 8:07:01

Belgian, although I respect your ideological purity regarding gold (it is my favorite investment vehicle, too), the fact is that over the last few years, in fact, over the last TWENTY years, one would've received a far better return on bonds than on gold bullion. Not all of us who post here are ideologues such as yourself, but some of us are more practical investors looking to diversify our portfolios who buy bullion as a hedge. Frankly, the return on gold is non-existant unless it appreciates in value, which has NOT been occurring over the last few years. Besides my sentiments regarding gold, the primary reason I purchase it is that, like many others here, I think it will fare well when international currencies undergo another realignment such as we saw in the 60' and 70's. In essence, gold is my insurance and little more. As for your request for one single argument why bonds can compete with bullion, the answer is simple: look at the track record.

Peace.

ShermagOn Capital Gains Taxes at the Casino#492673/3/2001; 8:22:48

Consider this fictional scenario:

Feeling confident because of past poker successes with a table of locals, I decide to jump in with both feet. I take all of my savings of $100,000, and flush with cash and bravado, I seek someone to engage in a high stakes poker game. I eventually link up with someone who calls himself Journeyman, and we play until I am penniless. After paying the house a fee of $1000 for the fine hosting that enabled our little match, Journeyman goes home with a capital gain of $99,000, and I sulk my way home with a $100,000 capital loss.

Now, replace poker with a little give and take game of stock trading, and Journeyman's gain is now subject to capital gains tax. If we are in Canada, he would face a taxable income gain of 2/3 of his winnings. If he is at a marginal rate of 48% (this is not very unusual up here) he would face a tax liability of $31,680. What would I face taxwise? I would have a capital loss that I can carry forward to offset some future taxable capital gain. For the time being, I have no taxable income change. In effect, my $100,000 is split, $67,320 to Journeyman, $31680 to the gubmint, and $1000 to the house. We have produced nothing of added value in all of this activity.

In the large picture, the stock market as it is now played by the masses is largely a means of transferring ownership of money from one individual to another. We are just moving the jello from one plate to another. Somehow in the process the gubmint is allowed to siphon off a large portion of the stake.

Now consider that these governments are in a much larger tax receipts position because of this activity. This means that Joe Sixpack has less cash kicking around to spend. This, combined with the energy whammy, and the self imposed added debt burden might go a long way to explaining the slowing economy.

As a final point, I ask how any politician can view this tax receipt windfall as anything but transitory?

Shermag

TheStrangerET#492683/3/2001; 8:34:15

Buying bonds denominated in a foreign currency is like buying any other bonds except that you are also making a bet on that currency. Nobody has a consistent record of successfully predicting currency fluctuations. The same can be said for moves in interest rates. Consequently, buying foreign bonds, except as a hedge, strikes me as sheer guesswork, not something I would want to try.

I hope that helps. Thanks for asking.

714Question for all:#492693/3/2001; 9:18:05

http://www.sharelynx.net/Charts/wwgp.gif

The above is a chart of gold production from the 1830's until 1998 or 1999. I'm not sure of the source of Sharefin's chart here, but it seems congruent with figures I've seen from WGC and others to the effect that as much as 40% of the world's above ground supply of gold has been mined since 1980. My question is this:

If this were a chart of the money supply of any given currency, what would you say as to the state of such a currency?

Tia.

R PowellShermag#492703/3/2001; 9:22:39

Poker and Capital losses

Sorry to hear of your loses to Journeyman. You lost, partly because he noticed your right eyebrow raised slightly whenever you held good cards.
The IRS forms limit capital loses to $3000 for a married couple per year but as you mentioned, the loses can be carried forward by completing a "workshop" in the instruction booklet. This should be keep with your records for next year's return. Unfortunately, I just finished this lose procedure. Maybe next year I'll be able to subtract my carried over lose against gains. That would be nice.
Rich

JourneymanNo context, nothing new, just something may need to be said -- again! @ALL#492713/3/2001; 9:36:12

There are two over-lapping and rarely heard reasons why CBs want to keep gold:

1. Reduce the available supply to discourage us from re-instituting a free-market money, which would almost certainly evolve to include gold as the central asset.

2. To hold their current ~32,000 tons as a potential "spoiler" implicitly threatening anyone who holds gold with a dilution of the supply. In other words as ORO suggested awhile back, they should hold gold to implicitly remind gold users ~"You've got to be a bit careful when you dance with someone-else's girl."

But compare that dilution potential with the dilution potential of fiat, which is now about 8% paper and 92% megabyte, and under the control of "Easy Al's" band of merry manipulators.

Regards,
Journeyman

Belgian714#492723/3/2001; 9:36:43

With much respect for your opinion and wise sense for equilibrum...you and I are getting to the heart of the matter...the Gold matter. Once ('94), I was holder of a Triple AAA bond (Credit foncier de france 8 1/2%) with state-guarantee. The state of France, suddenly withdrawned it's backing ! Can you imagine, what happened. No, no, I am not a doom and gloomer. Just providing an argument.

Thanks to free speech at www, we have gathered an immense load of arguments and perspectives on the gold matter.
This, from as much as possible, different angles. It seems to be almost complete and just waiting for confirmation in the nearby future. And still, there seems to reign so much fear and incertainty about that tangible yellow store of value with a respectfull age of 5.000 years.

The past 21 years are totally irrelevant in the perspective of the building up of paper wealth. Stockmarket hyperboles...Debt explosion...global imbalances etc..
Important is today's paper valuation of Gold at 265$. This paper money price is crucial. Give this price of 265$ and perhaps (much) lower, a place in the center of your total knowledge about Gold. You don't have to take any (profitable) cathastrophy into consideration. Than, goldholders, are only left with one imponderabile : will the Central Banks unload (rightout sale) their full 32.000 tons of Gold !? My answer to this vital remaining question is of course : NO THEY WILL NOT !

Gold's biggest friend is "TIME". Don't accumulate gold with paper you need to provide you with the necesseties of live.
Gold is storage of wealth (surplusses) you are prepared to pass onto the next generation. History is infested with brutal paper accidents. The only accident that can happen with gold is theft.

This vieuw is probably unpleasant for gold-owners at 800+$.
25 years is per definition a generation...and, it will be their children who are going to see the revaluation of the costly accumulated gold-reserve. That's part of the "crucial" I mentionned. POG at a give-away of 265$.

There is no alternative for Gold at present. Time has come to face the excesses of the past 30 years. I am convinced, you know, what many on this forum are trying to communicate, without the urge to indoctrinate one way or the other. A paper-profit makes you feel good, but Gold gives you warm, tender and secure feeling. Especially if you were lucky to accumulate at such a low price and culminating period.

An insignificant minority of Gold advocates are spending efforts on gold-activism. Goldproducers are still neglecting
to promote their honest product with the same enthousiasm.
Ergo...they give us the strong perception, that they do not believe in their unique product. This is one out of several other facts that are confusing, people's attitude versus Gold (investment standpoint). Above and underground gold-providers (holders) are trapped into the ongoing paper fantasy. We will never run out of paper, but this generation will definitely run out of abunded gold. The mirror of 21 years price-evolution is good evidence. It takes a hell of a lot of courage to talk about Gold today, let alone of buying it. 120.000 tons at 600$/ounce = 2 trillion US$ against an unpayable debt of 7 trillion US$. A one-currency world is not for tomorrow. The Debt-Shock is growing fat and awaiting it's finale stroke.
Dear Sir, 714 : nothing personal,please. Just my humble opinion.

When are Gold-movers forced to act positively on the undervalued POG : shock-possibilities ?
- war with economic implications ?
- SUDDEN Acceptance of stockmarket and dollar overvaluation ? Resulting in Panic.
- Defaults and Bankruptcies, that aren't manageble anymore ?
- Economic protectionism and periodical deglobilisation ?
- Japanitis ? (remember bank-run '95 !)
- London Gold Pool-like event ?
- Hyperinflation choice wit POG and POO explosion ?
- Interest rate shock ? (remember '94 !)
etc...etc...

Personally, feeling very, very, uncomfortable with AAA Bonds
left in my pocket. The only reason why they are still there is that I am hungry 3 times a day and cold in winter.

elevator guy@714 (3/3/2001; 9:18:05MT - usagold.com msg#: 49269)#492733/3/2001; 9:37:43

Well, at first glance, it would appear as if that currency had been printed with reckless abandon, until it is worthless.

But you would also have to plot it against a chart showing an increase in population, which necessitates more currency for trade purposes.

And if there is a demand for more currency that follows the rise in population, then the chart would show an almost vertical line, 'cause thats the way population is going.

When I was a kid in the 60's, there were 3 billion on earth, (and a few in space), and now its about twice that.
If you plotted human population, it shows a curve that gets increasingly steep. I think its called a sinosidal curve.

So maybe there isn't too much money out there at all. By what standard does one determine this? Oro, if you respond, please include color pictures so I can follow along.

JourneymanA real-life example @Shermag 49267, ALL#492743/3/2001; 9:56:59

The "computer gang" was an '80s Vegas phenom. We bet college
basketball and college football based on the brilliant and
diligent computer work of a friend of mine - - BEFORE it was
cool. When we first went into operation, we had a 17% edge.
That is, for every $100 dollars we managed to get into action, we
got $117 back.

Alas, because of a careless Dr. "The computer gang" got busted by
a bumbling FBI who mistakenly thought they were busting an inter-
state bookie ring. Luckily, I had left the group about a year
earlier over, well, essentially a woman.

All the legal pundits in Vegas, once they heard the details,
suggested the case would be laughed out of court. Which it was
eventually. Agent Nobel (his real name), his future on the line
since the multi-state bust cost U.S. taxpayers a reported $1
million or so, kept agitating to have the case tried despite the
laughter.

In the interim, my computer wiz friend turned state's evidence
and joined the ranks of the tax-blackmailed. He set-up to go
back into business as a corporation, and contracted with some of
the old "gang" members to buy his information for about what his
share of the take would have been before.

But there was a rub: Anyone working with him now would be subject
to tax scrutiny. Dr. Careless looked into the proposition,
retained my services, but after the first week did some basic
math and discovered that he'd make more putting his investment in
a CD. The enterprise broke up because a mere 17% edge couldn't
turn a profit with the tax-man as silent partner. This is a very
clear example of "the power to tax" as "the power to destroy."

And how, as Sir Shermag suggests, taxation SEVERELY damps and
shrinks the private economy.

And as far as politicians more logically viewing the tax receipts
glut as transitory, Sir Shermag, you may be making the same
mistake I still do now and again. You may be assuming politicians
are likely to think and behave rationally.

Regards,
Journeyman

turbohawgTheStranger, ET, ORO#492753/3/2001; 10:30:01

TheStranger: Excellent commentary on bonds. If any more seconds are needed for your HOF nomination on the referenced post, count this post as just that.

ET: Some time back, well over a year ago I think, ORO posted a short list of recommendations which seemed to go relatively unnoticed that any person preparing for a liquidity crisis would find most useful. Perhaps ORO or someone else can re-post it or identify where it's at.

hAug

JourneymanPopulation explosion fizzles? @elevator guy, ALL#492763/3/2001; 10:51:30

http://www.millenniumadventure.com/content/stories/pitiful.html

Hi elevator dude!

"Japan's first great trouble is its severe demographic problem.
Its population is the second or third oldest in the world, and to
judge by its low birthrate, in a hundred years its 125-million
people will be reduced by half. Europe, which has a similar
problem, at least allows immigration, which Japan doesn't." -Ex
CNBC commentator and "Investment Biker" Jim Rogers (above link
originally provided by Mr Gresham yesterday)

Russia has similar population projections. The U.S. may be on
the verge of the same sort of problem, and Alan Greenspan and the
FED have been pimping congress for looser immigration policy (so
foreigners can move in and help pay the FED "our" bills.) In
fact, even in Africa, India and China, population growth is
leveling off or falling.

The notion that the population is still zooming up in a
sinusoidal curve has undergone a reversal nearly as quickly as
OMB & CBO projections of U.S. deficit became projections of a
surplus - - - only in the opposite direciton and with a lot more
veracity.

Modern birth control is a main reason.

The notion that the population explosion is alive and it's powder
is dry is largely because it's useful for those using the
environmental movement to manipulate public opinion for fun and
profit.

Regards,
Journeyman

Sierra MadreThe old way of regarding life...#492773/3/2001; 11:08:33

"Not he who knows how to acquire
But to enjoy, is blest;
Nor does our happiness consist
In motion, but in rest.

"The gods pass man in bliss, because
They toil not for more height,
But can enjoy, and in their own
Eternal rest delight.

Then Princes, do not toil nor care:
Enjoy what you possess;
For whilst you do, you equalize
The gods in happiness."

The old traditional philosophy held that the highest activity of man was...contemplation. Strange sounding to our modern ears!

"We contemplate together, no?"

Sierra

Cavan ManHello HBM,ET, Stranger et al#492783/3/2001; 11:11:49

Having made a "Trumanesque" remark about calling Another "out" so to speak, I've been reluctant to sully this venue again with similar emotion although I still mean what I said.

Where have I been? Why, I've been living in dualityville; watching the world go by in a maddening rush whilst holding onto my core convictions regarding gold at this critical juncture in global monetary history.

I had thought of entering a bid at Farfel's reverse auction and in fact, if I had done so, the bid would have been ZERO: nada , nothing, nil. Reason: I see no value in spending time to read the musings of anyone who cannot be trusted to make the right decision.

I stand in awe of many of the fine posts here and do not want to take up valuable space with my own musings.

Otherwise, I have been waiting on Trail Guide to explain the machinations of the BIS. Now, that is a campfire story I am willing to listen to.

Kind regards to all....CM

BelgianCentral Banks and Gold#4927903/03/01; 11:22:51

Why do CBs have 77,7% dollar-bonds and only +/- 15% Gold as reserve ? The US with his $ is only 50% of world's GNP.
In fact...why do CBs have to have reserves ? What is the value of your house meaning, with x-times more debt ?
States don't have to protect themselves against their own stupidity. They just expand their amount of money with a push of the index-finger. The state is not offering Medieval protection with the Lord's castle. The state always taxes himself out of each monetary trouble.
It is the individual who has to protect himself against voracious states. That's why CBs never announce a goldbuy.
That's why they announce GOLDSALES after 20 years of fantasy-protection. Bonds are nothing more than a risky and temporarely parking place for paper.

Do gold-haters realise the impact-extend of a possible CB goldbuy announcement ? Suffice it to urge the WGC to update the world, constantly, on any move, on the 32.000 tons of CB-gold ! The best marketing basis ever. If CBs really had the intention of selling all their gold...they would have arranged a much higher price-environment for their sales.
We are still in doubt if another London Gold Pool is behind the smoke screen. Can we possibly figure out how the dollar-reserves have been growing or not, for the last 30 years ?
If we compare their gold-value from 42$('71)>>>260$('01) and US$ Bonds+ interest rate accumulation over the past 30 years : what would be the result today in growth ?
We could make the same comparaison for ourselves with gold and real estate. Unfortunately, I don't have correct data to do this excersise.

In a true democracy, we would be able to ask these questions to our respective CBs. But CBs are politiciced and per definition unreliable. A good (?) example is the 700 billion yearly, interest rate obligation on the Belgian state debt. To put this figure into perspective, you must know that total yearly expenses on eduction is 80 billion. !!!! Official figures.!
What does talk about zero debt mean in this perspective !?
In the past economic euphoria, we were not able to repay any fraction of the past debt to give some relief on interest repayement. On the contrary...surpluses are used to redistribute again into this welfare state. Thanks !
This same story is true for Japan. State debt is 120% of GNP. There is a very remarquable blip in the state debt/GNP charts for the US/Belgium(possibly others) on the date of 1971 when gold broke free. Debt/GNP dived from 120% to under 30% !!?? Gold and debt, related ??
I have no clue on this. I'll have my weekend bubble bath.

Parsifalmachinations of the BIS#4928003/03/01; 12:23:14

Cavan Man: Otherwise, I have been waiting on Trail Guide to explain the machinations of the BIS. Now, that is a campfire story I am willing to listen to.

Yes, yes. Me too. Perhaps FOA can offer some information that would help resolve the apparent discrepancies between the description of the BIS's role in holding down the POG given by GATA and Reg Howe vs the description of the BIS's role in creating a new gold market given by Another.

Besides the fact that the POG is still slowly, steadily, painfully, dropping, this unresolved issue regarding the BIS is this forum's current elephant in the living room.

Parsifal

Tree in the ForestBelgian#4928103/03/01; 12:45:24

Excellent posts on bonds sir. I would like to know more about that 1971 blip. I bought a City of Chicago muni bond once. It was called (in part) days after delivery. Instant loss. Broker probably knew. So what does this mean? Don't trust the City of Chicago? Muni bonds? Governmant bonds? Brokers? All of the above? One thing I learned. Read all of the fine print before investing. That's the good thing about gold. Not much fine print!
JourneymanBack at you - - - as soon as I get my e-mail straightened out @justamereBear#4928203/03/01; 12:46:08

Saw your intriguing invitation. Will respond as per included address in a day or two - - - as soon as my e-mail gets fixed.

Regards, j.

Mr GreshamBIS#4928303/03/01; 13:15:40

Sneaking a peek in between birthday parties -- looks like lots of juicy reading for later...

Whose essay (at GE?) suggested BIS had been cut loose by ECB's successful creation? Does BIS own/hold gold, or just handle dealings between the banks? Does BIS make its own policy (and with US taking its two seats since -- when? 1990? 95? Wasn't it Mr Fisher sent to work there on his first Fed assignment?)

Perhaps ECB assigns BIS the "dirty work" (good cop/bad cop) to keep its hands clean, while dollar was being propped up. This latest leasing spike a warning flare for "all swimmers to get out of the pool"?

If anyone would know which way things are likely to fall (dollar losing reserve status or not), it would be BIS. They'd want to be sure of being on the winning side at the end. Double agent? Improves bargaining power by appearing to occupy the middle. US thought Euro didn't have a chance at successful launch (FOA), so BIS would say "Of course not; we're with you." Until they're not.

Organizational survival imperative.

Now how's that for guesswork from someone who doesn't know Fact One about BIS?

Cavan ManParsifal: BIS and Sir Trail Guide's Commentary#4928403/03/01; 13:31:43

Indeed! This paradox needs illumination from the campfire. However, perhaps the lack of comment is related to Howe lawsuit in some way??

Mr. Gresham: You have fine thoughts. (...back to painting)

Mr GreshamCavan Man#4928503/03/01; 13:40:36

Well, FOA referred a few days back to GATA aiming at BIS, I suppose, and when they duck, it might hit some of the real "bad guys." Probably no naming of names at this stage, since his advice is to just stand back and watch.
Chris PowellThe BIS owns a lot of gold in its own name#4928603/03/01; 14:00:03

That's a central point of Reg Howe's
lawsuit: that the BIS undervalued its
gold holdings and thereby cheated its
private shareholders in buying them
out. I don't have the figures right
here, but my recollection is that the
BIS held several hundred tons of gold.

RossLSir 714 - msg#: 49269#4928703/03/01; 14:57:12

http://www.sharelynx.net/Charts/wwgp.gif

This chart is not comparable to a chart of the money supply of any given currency. It appears to be a chart that shows the gold mined in any given year, not a chart of a cumulative amount of mined metal. Nor does it display any relation to the above-ground stores of gold-money.

It is a useful graphic if anyone here needed proof that AU is certainly not a barbaric relic. If it were, why has so much of it been mined these last few decades???

HoratioWealth Effect#4928803/03/01; 15:15:41

Are the British putting thier gold out there on consignment and calling it a sale?.I once owned a companys stock that did that, the owners were put in jail for fraud.Calling something a sale and recording income as a sale that really is temporary lease income is a fraud.This kind of activity would weaken the pound and give a false impression while it helps British exports.That would be typically British ,trying to have thier cake and eat it too.Am I getting too cynical?
MO VER MEGBLACK BLADE#4928903/03/01; 15:50:17

I have learned much from your research - thanks. Now I want to share with you an idea.

I bought 3 - $35.00 crude oil calls, one every 6 months beginning Dec., 01. Three of these (cost of $1900.00) should cover the next Middle East war (very soon a reality).

Thanks again for sharing your wisdom.

justamereBearJourneyman#4929003/03/01; 17:31:49

Thanx. Just finished the long one finger job of typing my expected response, and will fire it off as soon as I hear.
j'Bear

RossLPoll: GATA#4929103/03/01; 17:35:38

OK, it's a slow day at the gold forum... So somebody tell me... how is the acronym pronounced? Is it "gayta" or "gatta" ???
ShermagA Question for all re Past Japanese Hyperinflation#4929203/03/01; 17:45:43

Does anyone know if Japan has had an episode with hyperinflation in the recent past, say the last 100 years? How about prior to that?

The reason I ask is that nations with a memory of the destruction of hyperinflation are less likely to retravel this route. This is why the bundesbank is the central bank with the best record of protecting its currency over the last 60 some years. If Japan has had similar experiences, that would favor a deflationary response to their current problems.

Thanks in advance.

Shermag

714Shermag re: Japanese inflation#4929303/03/01; 18:15:24

http://www.ex.ac.uk/~RDavies/arian/war.html

Yes, after the Franco-Prussian War in 1870-71, which finally united Germany, the Germans subsequently went on a strict gold standard, and other countries in Europe followed suit, abandoning bi-metalism under which silver was part of the monetary standard. At about the same time, large silver strikes in Nevada and Mexico combined with this abandonment of silver as money by many countries left other nations that continued to use a bi-metal standard, including Japan, with inflation. And though I find no documentation as of yet, Japan likely suffered inflation for a few years after WWII, not due to monetary policy but an outright shortage of goods.

Interestingly enough, the price of silver took a real hit in the latter part of the 1800's, partly from an increase in mining production, and partly from the abandonment of silver as a monetary standard. It was a hit from which it never really recovered. And it is not, in my opinion, dissimilar from what we see in the gold market in the last twenty years.

714More on Japanese inflation...#4929403/03/01; 18:21:16

http://www.labyrinth.net.au/~gjackson/econ56b.html

...apparently it was running about 25% during the oil shock of the 70's.
Chris PowellPronunciation of "GATA"#4929503/03/01; 18:23:12

For the public, it's GAH-ta. For those
who contribute financially, they can
say it any way they want!

714Good piece on Japanese economic policy after WWII here...#4929603/03/01; 18:28:31

http://www.slonet.org/~ied/frthuz.html


tedwGold Leasing#4929703/03/01; 19:22:31

http://www.usagold.com

How is the lease rate for Gold determined?

Anybody that can shed some light on this will be a light shedder.

axBELGIUM ON THE RIGHT TRACK#4929803/03/01; 19:33:59

Belgium is on the right track. Quotes from one Belgium's
latest posts:

"..why do CBs have to have reserves ?

States don't have to protect themselves against their own stupidity.
They just expand their amount of money with a push of the index-finger.

...That's why CBs never announce a goldbuy.
That's why they announce GOLDSALES...

Do gold-haters realise the impact-extend of a possible CB goldbuy
announcement ? Suffice it to urge the WGC to update the world,
constantly, on any move, on the 32.000 tons of CB-gold ! The best
marketing basis ever. If CBs really had the intention of selling all
their gold...they would have arranged a much higher price-environment
for their sales. " Quoted from Belgian Post


The price of gold is on the low side now - the best time to buy. For the U.S. Treasury to buy . With augmented gold reserves in the treasury the money supply could be expanded many more times than the percent gold reserve increase, with less of an impact on the value of the USD. Likewise, interest rates, tax cuts could all be accomodated and the dollar's value maintained or enhanced.

AX

SHIFTYFarfel#4929903/03/01; 20:05:26

Goldsell Auction

Did Goldsell make you an offer you cant refuse?

$hifty

HOOSIER GOLDBUGRECOUP OF DAMAGES????????#4930003/03/01; 20:13:58

Last night I posted the following:

HOOSIER GOLDBUG (3/2/2001; 20:44:10MT - usagold.com msg#: 49248)
FARFEL AUCTON BID!!!!
My dear FARFEL:
I bid my now defunct downline in the multi-marketing FAMILY OF EAGLES, which I had hoped to use not only for exchanging fiat for REAL money, but to educate the proletariet on the inherent risks in fiat money, the REAL role the Federal Reserve is playing in destroying lives, countries, sovereignty, etc. I began in earnest in 1996, at least that is the year I solicited most of the participants below me, back when REAL money was around the $350-$400 mark. But the my efforts quickly regressed, first slowly, then more rapidly as the price of gold went down. Try convincing people that it is inherently to their well being to pay $1980 for 2.7 ounces of 1/10 ounce gold American Gold Eagles, when the spot price of gold is declining. To further the process, I quaranteed that if they (Participants) were unconvinced of their need for possession of the REAL money, I would buy their $70.00@ Gold Eagles back within a year! Needless to say, the cabal kept shorting the paper, and forced me to come up with $40,000 to buy back the participants' gold. So now I am going to put up my DOWNLINE for the hopes of winning your auction!
Do I begin my acceptance speech this way????????????
It is with great honor, Mr FARFEL that I accept the winning trophy because I truly deserve it and ...............
Sincerely,
HOOSIER GOLDBUG
P.S. You could give me my due respect in grading my bid against the other participants of your auction. HOW DO I MEASURE UP??????
THANKS in advance, Mr. FARFEL.

If GATA/Reginald Howe wins their/his lawsuit, will I be able to recoup/recover any damages for my losses, mental anguish, phyiscal pain (wife beatings, etc.), spiritual doubts?
Any comments,Mr Powell, Mr. Hilly Billy Mitchell, anybody!

turkey hunterQuestion#4930103/03/01; 20:46:08

It has been said by "Another" that the oil producing states have corned the gold market. But it is said that the CB's control 80% of all the gold reserves. Does this mean that the CB's control 80% of the gold that the oil producing states don't have or I should say 80% of what is left to be gotten? I just want to make sure I understand. Thanks
SHIFTYHOOSIER GOLDBUG #4930203/03/01; 21:01:31

Class Action

I read something about a possible class action lawsuit for COMEX traders someplace but I cant find it.

$hifty

Peter AsherFarfel factoids @ Shifty @ all#4930303/03/01; 21:03:30

1) Farfel posts that he has received E-mail content from Godsell and been threatened with dire consequences if he goes public with it.

2) Farfel states he is going public with it (And profanely disses them to boot)

3) Randy says Farfels code is alive and well!

4) No word from (The late??) Farfel!

Farfel, if you can read this, perhaps you would like to qoute Mark Twain!

SHIFTYPeter Asher#4930403/03/01; 21:23:05

The Farfel File

Do you think that FARFEL is swimming with the fishes?
Concrete Nikes?
Curtain Rods ?

$hifty

axPublic Opinion on Central Bank Gold Reserve Levels#4930503/03/01; 22:16:46

http://www.gold.org/Gra/Pr/Grpc/Survey.htm

In 1998 and 1999 the World Gold Council surveyed people
in five countries relative to their attitude on central
bank gold reserves. The study was published July 13, 1999.
Countries studied were the U.S./U.K./France/Italy & Germany.

One statement the WGC report made in summary was:

"People in all five of the countries we surveyed care deeply about the role of gold as a monetary asset. In all five countries, overwhelming majorities say that a strong currency is important to a healthy economy,
and their countries’ gold reserves are important to the strength of
their currencies. Huge majorities want their governments either to
maintain or increase the level of gold in their countries’ reserves. "


If the U.S. TREASURY were to INCREASE its GOLD RESERVES at this time when prices are relatively low, it would be in a
position to increase money supply and restore economic
growth at a much faster rate, and simultaneously drop
interest rates, tax rates WITHOUT weakening the U.S. Dollar.

Randy (@ The Tower)You've been waiting for this...#4930603/03/01; 22:24:19

http://www.usagold.com/onlinestore/special.html

They WILL go fast.
Randy (@ The Tower)The online German coin offer....#4930703/03/01; 22:32:48

It looks like the service provider we contract with for providing our secure server for all encrypted online orders is temporarily down for servicing or whatnot. So if you try to access the order form and get an error message instead, just try again a little later, ok? You'll be glad you did!
SHIFTYCSFB's Crisp: Gold Price, ECB Sales and Supply Issues #4930803/04/01; 00:10:22

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Mining%20News&tp=ad_mine&T=au_storypage99.ht&s=AOp8g2hGWQ1NGQidz&ao=10096932

Listen at link above
Running time 3:09.

Sydney, March 2, 2001 (Bloomberg) -- Kevin Crisp, a director for precious metals at Credit Suisse First Boston, talks with Bloomberg's Brendan Trembath about the recent decline in the gold price, the impact of European Central Bank gold sales on market volatility, supply issues and the long-term price outlook.

01:20 Gold price, market volatility, long-term trading outlook
01:49 Reasons for price fluctuations; ECB gold sales and supply

justamereBearShifty 49299#4930903/04/01; 01:40:17

Re Farfel
LOL Either that or Goldsell sent a hit man.
j'Bear

BelgianState Debt - Bonds and Gold#4931003/04/01; 02:57:54

ING-Bank is looking at the evolution of state-debt/%GNP of the last 30 years. The conclusion is very simple and as expected. Most stockmarkets-highs, suggest that the economic expansion has been tremendous...but did not result in a decrease of state-debt, with the exceptions of Ireland and Denmark. A consensus of state-debt at 60% of GNP, seems to be the target. The US? made it but Japan/Italy/Belgium/Greece/ still above 100%. And this under such a long period of favarable conditions !

The study is projecting this debt evolution into a 10 to 50 years future. Ridiculous of course to suppose that the world economy will expand and grow at the same momentum of the past 30 years explosion. They want us to dream about zero debt ! And economic perpetum mobile ! They even are seriously worried about having to live without debt ! Broeeeehaha ! This is outright idiocy of course.


Blip-1971 : evolution of US state-debt/%GNP since 1790 :
The chart shows how this debt slowly rises to 25% in 1922 and starts getting momentum, with hyperbolic allures, and topping at above 100% in 1940 (start of WWII). Dramatic decline afterwards and reaching a low of 20% in 1971, where an instant (!) rise is bringing the debt over 50% and going higher.

States are looking for the optimum debt-growth versus GNP-growth. They are constantly wrong in their projections. Welfare, socialism, breath and games for all. Thanks !

Today, we have such a tremendous amount of private paper-money, invested in thousands (millions) of funds of all kinds that this is behaving as an avalanche builing.
These masses of paper must be contained (freezed) at any price and nothing may occur to make the fatal slide happen.
PPTs worldwide. The CONFIDENCE-SHOCK-WAVE is there to stay and growing. This and nothing else is the clue. Nothing is or can or has the will to change this evolution.

Each time, I bring the question of Debt and Debt-growth on the table...(any table of course)...the final answer is uniform : there is NO problem with debt, as long as we can avoid any shock. Never to be precicised as Confidence shock ! cfr, ridiculisation of POO as an economic given.

Time and time again, the debt question is causing a caustic silence and the next subject is hastely, started. Yes, I know ...nothing new ! But I keep on communicating and reminding this debt-cancer to anyone who wants to lend me his official ear. But my story is hopelessly Dé-MO-Dé (out of fashion)

Officials claim that they will eradicate DEBT with economic GROWTH !? But this GROWTH can only be materialised, with...YES !... MORE DEBT...MU_U_U_CH MORE De-e-e-e-btttttt !! Nice, very nice viscious circle. That's why GOLD is the ultimate chain breaker. This message must be fostered worldwide by all goldphiles. Use your WWW for homework ! And let's have a close look how Japan will get out of its 120% debt status ? Zero rates ?...Yen-Devaluation ?...Bankruptcies and write-offs ?...Delays on repayments on Bonds and interest rates ?...Artificial stockmarket support ad infinitum ? Faites vos jeux, messieurs.

A worldwide decline in Growth is "THE" sword of Damocles. Ask Greenie, why he is lowering his interest rates frantically. Ououuhhgff...you all know it, of course.
I am only putting GOLD into the right perspective at this very right moment...that's all.

714turkey hunter re: gold reserves#4931103/04/01; 03:34:48

http://www.gold.org/Gra/Gra1.htm#Gold reserve statistics

Central banks currently hold approximately 25% of the world's above ground supply. Statistics on CB gold reserves is available at the above link. And the world's above ground supply of gold is generally estimated 120,000 tons, though some claim this estimate is low.

Personally, I wouldn't put much stock in what "Another" has to say. I've done a lot of background research on his postings at Kitco and there's little to verify some of his claims, particularly the so-called oil-for-gold trade. His heart's in the right place, but his head's not on straight.

714Belgian, thanks for your comments on bonds...#4931203/04/01; 04:09:09

http://www.trumanlibrary.org/oralhist/bernsten.htm

...what exactly did happen to your Triple AAA bonds? Your comments on debt are right on. Economic growth has to continue or it's crunch time. As for your question why CBs hold so many US$'s, that is very complicated. Some of it is financing one's export market, which explains Japan's blind (and VERY important) support for the US$. But there's a bit of history in there too. From 1939 to 1941, the US took extraordinary measures to protect foreign assets held by allied countries and to keep them from falling into nazi hands. Much of this is documented by a lawyer named Bernard Bernstein who worked for US Treasury in the 30' and 40's. Very interesting. I first ran across this guy in researching gold-clause contracts and how those were handled under the US's Gold Reserve Act of 1934 here in the States. Actually there's quite a bit of history on gold, both in the US and Europe in the above document. It is for good, and long-standing, reasons the US is considered a "safe haven".

On a more personal note, what part of Europe are you in? I get the impression your reside in France, despite your handle. I was in France a couple of years ago and it was striking to me how much was named after Roosevelt, even a restaurant in Fontainebleu called the "FDR".

LeighPeter Asher, Shifty#4931303/04/01; 04:46:12

You're right; Farfel has gone missing! He still has access not only to USAGOLD but also to LeMetropoleCafe, which I imagine would be thrilled to publish his correspondence. Farfel, come forth! Let the world see these incriminating documents! Don't let anyone think you've been cowed by the threats of the evil forces!
PandagoldWith you at weekends#4931403/04/01; 05:24:24

First let me say thanks to those who offered a few kind words at my parting post. I will compromise with those who wished me to stay by confining my post to the odd weekend. Too busy making money ( though still small potatoes) during the week.

I had detected things were livening up so felt I needed to focus my energy in the area where money is generated. I hope you are all doing a little better, accepting that this is very early days.

I have been in, and considered, many kinds of businesses, in my life, but this one 'the Gold business', to me, is the most rewarding. It is one where I can truly put all my education and talents to work.

Why am I in the Gold business? Because they, 'TPTB' , are in the gold business - and have been for thousands of years. What's good enough for them, is good enough for me.

If you are Christian, though the little babe was Jewish - His first present - the FIRST Christmas present, was GOLD!. If it was good enough for Him......yes, you've got the message.

I contend that today, it has NEVER been easier for the common man to make money.

When I sit at my computer and see the wealth of information at my disposal, the ease at which I can flash an order - thousands of miles across the ocean, to buy or sell (Gold coins, or mining shares) and have it executed within seconds, bowls me over. You are 'in business' for the price of a good computer.

You can give yourself a university education without getting off your backside - diverse information, the thoughts of the wise, are literally at your finger tips.

As 'Satch' used to sing - "What a Wonderful World". My only fear is that when they have got us all hooked, they will start charging us for all this information. Meanwhile, I make hay while the sun shines.

When I started attending auctions many years ago, someone told me then - don't bid for something on which you are hoping to sell for a profit if you can't live with it (because you might have to, at least for a while). I have used this rule in anything I have been tempted to deal in. What is nicer to have to live with than a beautiful gold coin - and what is easier to sell if you have to.

I needed some quick cash a few years ago. I went to Binks in London with a few gold coins - American, and Canadian, plus a gold bracelet, I had bought (without VAT) in New York. I was handed a fistful of crisp pound notes in the length of time it took the dealer to take out his spy glass and give the items the once over, then count the money.

The price of gold fell just over a week later. That made me feel even better. The point is, it is so easy. Could you do that with your house or car? There is a Jeweller's near where I live. Even while gold has been dropping like a lead brick, he has had a board on the sidewalk which says on both sides - 'We buy Gold and Silver".

When we lose money in the market, if we are honest, it is because we got our timing wrong. It doesn't really matter where gold is going ( I know that sounds smug, and a little off beat) you can make money.

Gold has ALWAYS been manipulated, well, long enough to stand as always. Manipulation is not synonimus with 'down'. You can manipulate something up. When gold spiked at over $800 dollars in the early 1980's most of that was a giant short squeeze, especially right at the end.

One of the causes of falls zig-zagging down is that besides the bottom fishers, you have those elite professional shorts who squeeze the multitude of minnow shorts, because they are'clogging the drain' (stopping it going down), and stopping the big professional shorts from making money. Yes, there are shorts, and shorts - the big shorts eat the little shorts.

The same applies in reverse. I am making money now, but I am not getting excited because we are at a point where the tide (for gold) is very treacherous. The trend is still down but it is getting ready for the turn.

While I use a metaphor that is tied to nature, there is a big difference to that which it is being applied to. The real tide is pure nature, and regulated by God, and does not lend itself to manipulation by man.

The answer is to take small profits - be satisfied with small mercies until a definite trend shows itself, backed by a good tail wind.

It is only important to know it (gold) is manipulated by people, who descend form people who have been in the gold busines for centuries, and control most of it. In this way, you are not labouring under false illusions. To worry about who is doing it is a waste of time. and is fruitless.

I know many of you will be tempted to put up arguments here, and I can accept that because I know how difficult this business ( of who, and how , it is controlled) is to understand.

Someone once told me that the easiest way to go someplace is, find some guy who is going someplace, then grab his coat tails. So, I watch where these jokers are going, then hang on. They love a crisis, they create them. Why? because that is when the sheep panic.

Crisis means opportunity - usully opportunity to pick up things cheap. How often do we hear those adages of the big traders - 'Buy when no one else wants it, then sell when everyone does.' 'Buy when blood is running in the streets'.

Yes, we hear them, read them, say yes thats the way, then promptly forget it. Why? Because it takes guts to do it.

Every time gold moves down it goes into stronger hands. Most them are BIG players,
bullion isn't for the small timers, they did not amass their fortunes by being foolish.

No one can expect to buy right at the bottom, but there is 'insurance' you can take to cover most of any fall. And you don't have to be in the futures market.

You can make MORE in the gold market right now than you can get in any other form of normal investment. I believe Co-bra explained how he has made some. I too, in one week made more on my money ( not a lot) but more than I would have got in a year in any bank or time deposit or whatever. And, I had fun doing it.

The short term zigs and zags, or media rhetoric doesn't bother me. I KNOW where these jokers are going, and thats all that matters.

It's no use getting uptight about - London is doing this, and New York is doing that, or Switzerland is .......... Forget it. These people are INTERNATIONAL. To them, the world has always been a global village. They work as a team, and pass the ball to keep you guessing. They don't want you to see it as a team. Sometimes they throw in a bit of angry exchange rhetoric to make it look good.

They can collapse ANY currency at the drop of a hat. The dollar will be propped as long as it suits them. They know the dollar needs some rest and recuperation, so they are moving to establish the Euro. The Euro WILL take up the slack - trust me.

Gold WILL NOT make any serious move up until the Euro is steady on its feet no matter what GATA says or does - trust me. I have said this many times, and I will keep on saying it whether it bores you or not. I believe, sooner or later YOU WILL see it. The Euro will be where they want it before this year is out, and then the hold on gold will be relaxed (the word is 'relaxed', not released).

I am sorry if, to some of you, I sound a bit strong, but I don'e believe you can pussy-foot around with this stuff. Making money is serious business. And when you enter the financial markets, forget this crap about 'investing' you are at war, and there is an enemy out there who is out to kill you - and drink your blood.

The financial markets do NOT make money, they just shift it from one set of itchy fingers to another. Usually, it is from yours to theirs, if you're not VERY careful. Hence the fact that I do not flower my words, or smother them with pleasantries.

To sum up, I honestly believe that the time has never been better. Gold is here to stay. Goldsmiths go back into history, and will be around in the next millennium if the world dominated by humans survives. As I said earlier, I am sticking with GOLD because TPTB believe in gold, and have a huge investment in it. It is the source of their power. If they lost it they would be like Superman without cryptonite.

Have fun. Don't die without a smile on your face. People will be for ever wondering what you just found out.

The Invisible HandIs gold price control ending?#4931503/04/01; 07:16:09

http://www.gold-eagle.com/editorials_01/hickel030201.html

SteveH argues that

1. by now gold has been sold short to an estimated 10,000 to 17,000 tons (no body knows for sure). This represents four to six years of production. In other words, physical gold is the Achilles Heel of the new economy.

2. we can all rest assured that it will be several years to a decade (maybe) to recover from the excesses in the paper markets since 1982 (and mostly since 1994).

And concludes that if the inevitable rise in gold can be put off, it will be, but it is becoming increasingly harder to curtail, and, thanks to the Internet, it is being done in broad daylight.

My apologies if this has been posted before.

714Question for all#4931603/04/01; 07:29:13

Does it strike any of you as rather odd that Euro members such as France and Germany will maintain their own central banks and gold holdings in spite of their "monetary union"?
714Nice Euro site...#4931703/04/01; 07:45:38

http://www.econ.yale.edu/~corsetti/euro/Euroit.htm


Shermag714, Thanks for the info on Japanese inflation#4931803/04/01; 08:13:29

It helps me put the picture together.

Also, regarding your question on Germany and France keeping their CBs and gold, I suspect that it would not have been politically palatable with the voters, especially the Germans, to go more deeply into integration at this first step. I believe that deeper integration and dissolving of the seperate CBs is in the future of European monetary affairs.

silvercollectorTidbits#4931903/04/01; 08:25:59

From Ax (49298):

"Do gold-haters realise the impact-extend of a possible CB goldbuy announcement ? Suffice it to urge the WGC to update the world, constantly, on any move, on the 32.000 tons of CB-gold ! The best marketing basis ever. If CBs really had the intention of selling all their gold...they would have arranged a much higher price-environment for their sales. " Quoted from Belgian Post

Agreed. I have seen statistics on CB held ground over the years. I seem to recall approximately some 50%-60% of above ground gold was held post WWII. This amount has dwindled to some 25%-30%. Perhaps WGC (are they really acting in gold's best interests; does the term 'WORLD GOLD COUNCIL' imply that they want gold up or down, or are they neutral, or do they even care?) as well as:

a) updating movement of CB-held gold

b) update the world to total quantity of CB-held gold in terms of total quantity (ie: 32,000 tonnes) and percentage of above-ground stock. (ie:25%)

When the WGC has shown the world that CB dishoarding has ceased (ie leveled at 25%/32,000 tonnes) the gambit will be up.

Failure of this may lead one to believe that:

a) WGC is not interested or cares and consequently one would have to question their motives or,

b) WGC is unable to obtain the 'secretative' numbers from CB's and thus one must examine the role of CB holdings of gold as a reserve.

For example, the US apparently holds some 8,000+/- tonnes of gold in reserve. Surely the reserve aids in the role of maintaining the dollar. However, the tonnage has not been confirmed (as we are lead to believe) in 30-some years. This begs the question as to why the USG wants this 'secret'. What is the advantage to the US in having it's gold reserve non-audited?

Further to the above (and in comparision) does France/Germany/EU report gold holdings regularly? From Randy's posts it is clear that this occurs but are holdings audited unlike the US.

Thanks.

SC

silvercollectorTidbits#4932003/04/01; 09:03:09

From 714 (49311):

"Personally, I wouldn't put much stock in what "Another" has to say. I've done a lot of background research on his postings at Kitco and there's little to verify some of his claims, particularly the so-called oil-for-gold trade.


Mr. 714,

Please elaborate on your research.

I have been reading 'ANOTHER'S' postings and find them most interesting. The believability factor is a question. I spent alot of time researching oil pre/post Y2K. The EIA accredited the sharp rise in POO pre-Y2K to hoarding and stockpiling in fear of Y2K. However, as you know, oil has not fallen back post-Y2K and it begs the question of the sudden rise in POO. It can be debated that the rise is attributable to supply/demand shortfalls to a large degree but oil still remains high in a falling economic enviroment.
Speculation is that oil will never return to $20 or less and that high oil is here to stay.

My research also found that 'swing share' is shifting to the Middle East and secondly oil reserves are falling with a cresting of consumption exceeding discovery in the very near term (2005+/-). With the 'half-life' of oil approaching
and critical resources upon us in some 30-40 years, oil appears to be an extremely dangerous situation moving forward.

If this information is remotely accurate a relationship may exist between oil and gold. The question that I ask myself (probably too often) is what is to replace oil, as a reserve, in the eyes of the oil producers and in particular the Middle East. Do they want tractor-trailer loads of non-redeemable debt instruments? I must believe that something more tangible is wanted; gold seems an obvious answer. As economies falter and currencies loose value, driven by high oil and lost confidence what is to replace this?

We are aware that CB's are selling gold and the favorite question is who is buying. Above ground stocks remain the same, yes? Perhaps, oil producers will accept 'money' for oil for an indeterminate period of time but for how long. Perhaps FOA's statement regarding the 2 year old spike in oil is indicative of a re-evaluation of the USD. If the USD is for example overvalued by a factor of 2, then the POO at 30 reflects the real price of oil at $15 times 2? What do we look forward to, higher and higher oil because of increasingly overevaluation of the USD? Or perhaps the supplement of cheap oil and gold? (ie: $19 + XXX)

There is something Another knows that we don't, I personally look for hidden clues and I believe I have spotted a couple.

What's your take?

SC

Galearis@ silvercollector#4932103/04/01; 09:21:00

WGC

A very short comment about the WGC and related stuff:

Who subsidizes this group and its activities (therefore its position on gold prices.)? Answer: miners and fabricators.

What percentage of the above are interested in HIGHER gold prices?

Answer: unhedged miners.

Inescapable conclusion: the WGC is in the other camp my friend. This should be the end of the discussion. (smile)
It must be tough on Bill Murphy to work with this absurd situation. He has to promote miner shares, but would know (as do they) that his activities would be dangerous to them in the short term, while fundamentally many would agree with him. Don't you just love conflicts of interest?

Best case scenario for the paper miner market investor: liquidity crisis sparks a gold bull - big default, G.S (or somebody) makes a grab for physical on COMEX (whatever, some left field event). Miners soar initially. Margin call miner bankruptcies follow. Paper defaults on physical. Runs on bullion banks to take delivery for paper (gold certificates). Bullion bank defaults. COMEX defaults. TOCOM in gold. COMEX collapses.
Limbo period/depression/stagflation/financial crisis/collapsing USD.

New physical market in Europe (London?)Euro ascendency.

I may have left out something with the brevity. However, if you hold gold or silver miner stocks, one should try to dump them at the first spike in the miners fortunes before the margin call calamities hit the general awareness level of investors. There is a narrow window here and one should NOT be tempted to ride any paper bull in miners. Be prepared to take some loses in exchange for a margin of safety.

If plausable jump back into pms or some other asset in a worstening hyperinflationary environment.

Hibernation time.

Best regards,

G

SALMONWelcome back Panda #4932203/04/01; 09:21:23

The weekend for me is quality time, when I can share in the excellent ideas of people from around the world. You provide just that, splendid European flavor looking at a wide range of topics (all related to gold - honest money). In the relentless search for truth one should never put his/her own ego in front. That only serves to blind our vision. It is only human nature to share our own experiences with others and you do that very well, so I thank you for this.
slingshotPandagold#4932303/04/01; 09:30:42

Welcome Back Pandagold.
Slingshot.

Hill Billy Mitchell714 @ # 49316#4932403/04/01; 09:53:46

Sir,

I have assumed from early on that the individual central banks within the European Union would be for show only. It appears to be patterned after the Federal Reserve System, 12 regional reserve banks. Contrary to what is perceived, there is only one central bank in the US where "absolute" power resides. The power is exercised by those who control the Central Bank in New York, which is the true seat of the power. Those who control the board of governors are without a doubt meeting behind closed doors and their directives only appear to be originating from Greenspan and the Board of Governors. Greenspan and the Board of Governors do their bidding.

I firmly believe that the evolving European Central Banking system is based upon the nearly perfect model in the US, which turns out to be a grand and successful experiment. The central banking system developing in Europe will not fail in its ultimate goal. It is based upon a proven method of taking over power by stealth.

When the Central Bank of the European Community is securely in place the Europeans, the common people, will not know that their individual, "national", CB's are only for show. It will appear that the individual CB's are part of the grand decision making entity, when they are only for display to the window shoppers.

If ever there were a stealth operation in the works it would be the European Union. Its purpose and its ultimate structure will not be revealed. The "Central Bank" of the European central banks will be the seat of world rule. There will be a "Greenspan and Co." up front, but the real ruling authority will be hidden from view for a time until there is no probability for any opposition.

It has only been just a very few years that the press and the politburo have been allowed to even refer to the Federal Reserve System as the Central Bank of the United States. From the very birth of the Federal Reserve it was vehemently asserted that the Federal Reserve System was not a Central Banking system. Now that there is no probability for any opposition and it is openly referred to as the Central Bank of the United States.

My thoughts only. No reason to give them serious consideration.

Very respectfully,

HBM

Hill Billy Mitchell@ Cavan Man#4932503/04/01; 10:05:57

Sir

I plan to go to Denny's (I 270 and Rock Road) for a cup of coffee later on this evening. I will post the time when I can work it out with my wife. Should you have the time, just an hour or so for introductories (sp) I would be glad to buy you a cup.

Will post in a little while to give you a time and a way to recognize me when you arrive.

If this is not a convenient day we can work it out another day, as I am in the area for a day or two during the first week of each month.

Very respectfully,

HBM

USAGOLDLawrence Kudlow Interview: Substance Abuse, the Controversial, Analyst and the Gold Dealer Who Became a Priest#4932603/04/01; 10:15:10

http://www.freerepublic.com/forum/a3aa1e6e306c7.htm

I ran into this researching this month's News & Views. This is a good story for a Sunday morning. Since it involves a gold dealer, I remain on subject. (smile)

P.S. My purpose here is not to go off into a discussion of faith. Just provide a link to those with an interest. Mr.Kudlow receives much criticism for his gold views here and elsewhere, and I have to say that sometimes I have problems with him even though he keeps gold in the public venue (if not always with an acceptable spin). I thought the interview might shed some light on a complicated, sometimes brilliant, always controversial opinion-maker.

714silvercollector re: Another#4932703/04/01; 10:19:38

http://home.att.net/~strat.gt/secret_history

I bought into the "Another" phenomenom when he was all the rage at Kitco back in '97 and '98. And yes, he's an intriguing guy. BUT! Last year, in a fit of disillusion with my gold investments, I returned to his old Kitco posts and began to research what he was saying so as to verify what might be happening in the gold market. And as a result, I found the above info on the oil-for-gold trade, as he called it, and uploaded it to a website. And the facts appear to be quite different than he was portraying. Gold was only used to pay oil royalties to the ruling Arab sheiks and NEVER was oil sold for gold on the open market. Sure, there's a minor link between oil and gold -- royalties! That's it. Gold has little else to do with oil. Let me ask you: If there was a link between the price of oil and the price of gold, why hasn't gold risen? I've posted the above link several times since last September and the typical response I get is that that's history, or could I write a summary. It seems goldbugs are as lazy as the rest of humanity and few seem to choose to do their homework on background issues, settling instead for a few paragraphs of platitudes. It may well be history, but more than that, it is relationship.

Don't get me wrong. I do think Another's heart was in the right place, but I don't think investors, as a general rule, are going to be attracted to investing in gold because of some fringe theories or manipulation mantras. Yes, I think gold's been manipulated (what isn't these days!), but that is a minor issue in the face of other issues affecting the industry. Particularly troubling is the fact over 80% of annual gold production goes into the jewelry industry, which is indicative of a disinterest on the part of the investing community. Throw in a huge jump in production in the last twenty years, along the trend towards demonitization, and you have a bear market.

Fwiw, my religion is based on knowledge, not faith. I have NO faith in gold. I only possess the knowledge, as Alan Greenspan so aptly put it two years ago, that gold remains the payment of last resort.

p.s.--And I probably differ from most posters here in that I think the WGC is doing a bang-up job. You ever been to there website and read through their docs?

714Thanks, HBM...#4932803/04/01; 10:26:50

http://europa.eu.int/euro/html/calendrier5.html?lang=5

...I needed that perspective. I'll keep it in mind as the euro unfolds before us this next year. In fact, by this time next year, the euro will be circulating!
714silvercollector...#4932903/04/01; 10:36:30

...one more thing real quick. I don't think the oil-producing states are just sitting on their debt instruments. They have used the proceeds to invest around the world. Two years ago, some friends were involved in negotiating a $50 million deal for a short-line railroad in Indiana. I asked where the money was coming from for the deal and was told it would be financed by insurance company money and Arab oil money. Fwiw.

p.s.--Any research on the ME oil business will turn up the fact Arabs, like the rest of us, will accept FRNs anytime if the price is right.

Clint HInterest rate cuts, who does it hurt?#4933003/04/01; 10:58:23

If you own a company that owes 12 billion dollars will a 1% interest rate cut help?
If you own a company that is making a profit will a cut add to the bottom line?

Who will it hurt? How about;
1. Grandmother when she renews her CD's.
2. Companies who invest their spare short term cash in the money markets. Some just overnight.
3. Insurance companies that depend on earning interest on premiums to make a profit. Why have many insurance companies in Japan gone under?
4. Your local bank that invests in the local economy. Also owned by local investors.

The list goes on.

Anyone care to list some major benefits?

SHIFTYCorrection#4933103/04/01; 11:12:17

SHIFTY (03/03/01; 21:23:05MT - usagold.com msg#: 49304)
It should read : Do you think that FARFEL is SLEEPING with the fishes?
not swimming with the fishes.

LOL, It was getting late.

$hifty

Pandagold714 Arab oil producers Gold and Oil#4933203/04/01; 11:21:05

There is definitely a relationship between oil and gold, and I covered it at some length in a past post.

In it I stated that the Arabs sell oil for gold. Some of the readers, although if they had really read my posting properly, would have understood that I was not saying that they actually took physical gold at the time of sale, challenged my statement - one saying that they sold it for 'money'.

To the Arab oil producers - gold is the only 'real' money they trust. They have a simple yardstick - one ounce of gold equals about 20-25 barrels of oil.

If they think the dollar is overvalued (as it is at present) they raise their oil price in dollars - in other words they want more dollars so that they are getting what THEY feel an ounce of gold should be worth.

They accommdate their trading partners up to a point with their economic problems so may hold off for a while if asked, but eventually they get it back on track.

So to answer your question - that is why oil is going up BECAUSE GOLD ISN'T and the dollar is inflated.

This is a simple explanation, but nothing in the financial world is ever simple. It's enough for me to my sums on, and act upon.

I work it that they (OPEC) see gold at about $600 with the US dollar true value at this point of time. I don't think they are far out - in fact, I think they are spot on.

Peter AsherClint H msg#: 49330)#4933303/04/01; 11:49:19

The MAJOR benefit from lower interest rates is that producers keep more of their earnings and the suppliers of passive capital receive less.

Probably 999.99% of the stock market is the reimbursement of previously invested direct capitalization. Modern society has evolved into holding a viewpoint of entitlement to getting wealthy via the labor of others by "Putting their money to work." While it is certainly ethical and desirable to make a profit on forgoing spending power earned, a free-market reduction of that profit is a net benefit to the society as a whole. If you really put your money IN the bank for safe keeping, maybe they would charge you for the service.

.All the much bemoaned credit excess of the Fiat money system are rooted in the quest for wealth transfer without production in kind.

As I said a year ago, much to FOA's delight; (And this also holds true to some extent for bonds and savings) "Those who buy stocks in the aftermarket, have abrogated their responsibility as investors, and they do so at their peril."

Cavan ManHBM#4933403/04/01; 11:57:19

Regrets due to a dinner engagement but let us keep trying--perhaps early next month. Thanks....CM
714Thanks, Pandagold...#4933503/04/01; 12:00:15

...I don't know if I buy your theory or what evidence you have of it, but I've been unable to find any evidence whatsoever of an oil-for-gold trade outside of the royalties paid by oil companies to the sheiks. Interestingly enough, there was no currency issued in the Arabian oil countries until about the 1940's, and it was gold coins from various countries, particularly British sovereigns, that served that function. In fact, in the '40's the US minted silver riyals in a loan arrangement so the Saudis would have their own currency. You are probably correct that the Arabs don't trust any money as much as gold, but they obviously have accepted all kinds of paper money through the years, probably spending it as fast as it comes in on various tangible investments. Their ethic regarding money, and particularly interest, is far different than the West's. But I doubt there's enough gold in the world to carry the oil trade (that's been kicked around here too) and there were obvious problems during WWII, when the LBMA was shut down, in paying the royalties in gold. The House of Saud was more than happy to accept US$, at least for a time, until 1947, when the royalty payments were renegotiated. I would be grateful if you had any more background info to ad to this oil-for-gold trade. Do you know of any specific oil deals that were done for gold, other than these royalties? I tried to get FOA to address this issue, but he dismissively said there were many versions of the 1947 negotiations, then offered no details. None. Obviously, I think the background of these issues is very important in helping to make informed decisions.

Thanks. BBML.

Hill Billy MitchellClint H @ # 49330#4933603/04/01; 12:14:46

Interest rate cuts, who does it hurt?

Sir,

Good question. I will offer another angle which in no way diminishes the need for answers to your question.

Your post prompts me to ask, what rate cuts?

When the Fed lowers the discount rate the member banks have the privilege of borrowing at the forbidden window at a lower cost. This sort of rate cut is rather insignificant in the general scheme unless a bank is in great immediate need for funds which it cannot obtain elsewhere, in which case the member bank will have its leash shortened considerably.

The talk of interest rate cuts by the Fed are not that at all. What they are talking about is fiat injections which will result in an increase in available cash for overnight lending which will thus result in lower Fed Funds rates.

The whole idea is increased liquidity, not reduced interest rates, which are only a result of increased fiat supply. What we hear all over is the great fanfare that rates need to go down. It sounds so good to the sheeple. While increased liquidity will in the short run, reduce interest rates (generally short-term interest rates only), this increased liquidity will, in the long run, increase interest rates because the bond buyers will need more return on their investments in order to cover the cost of the devaluation of the money which they have loaned out.


Who will benefit from increased liquidity?

Answer: Those to whom the short-term money flows, who lend it short.

Who will be harmed by the increased liquidity?

Answer: Those from whom the money flows, who lend it long.
Very respectfully,

HBM

PS: For whom is the bell tolling? It is tolling for all disproportionate fiat holders. Not only in the long-run are we all dead, but in the long-run we will all be broke, that is of course, if a disproportionate share of our assets are denominated in fiat.

lamprey_65Gold Weekly#4933703/04/01; 12:24:14

Unfortunately, I have bad data on my POG charts, so no link.

Two weeks ago we had a breakdown below support -- this was reversed the following week as the price recovered within the wedge pattern. Last week we had a breakout above the wedge which did not confirm (failed breakout) by the end of the week. So, the torture continues.

I'm still looking for a confirmed breakout before April...gold shares are remaining strong with each fall in POG and lease rates remain on an uptrend (watch those lease rates). Also, Indian buying should start to kick in strongly by next month.

Hill Billy MitchellCavan Man @ # 49334#4933803/04/01; 12:27:03

Sir,

Perhaps, next month. I will give you more advanced notice and some options of when. It would be nice to have our wives along, but necessary.

I look forward.

Very respectfully,

HBM

lamprey_65Also...#4933903/04/01; 12:27:27

I'm showing breakout price has fallen to $265 while support is at $258.25 --- prices are approximations only.

Compression continues.

Hill Billy MitchellCorrection of last post#4934003/04/01; 12:28:48

Meant to say, "Not necessary".
slingshotGold, Sell or Buy?#4934103/04/01; 12:33:29

I am researching the phenomenon of the Gold Bugs, Buy or Sell position. Due to the limitations of financial backing, research has been of Spartan gathering capabilities for information.
Just a few points of interest. Again for a second time, some are selling Gold and others are buying. When spot of Gold was $267.00 A person sold six Gold Eagles to PM dealer and by the end of the day dealer had resold all the Eagles.
Did the man sell at what he thought was a good price, or just to pay bills? The other thing of interest is besides myself, there was someone else buying, A 2 to 1 or better ratio to buy. Also, this dealer sells at a lower price than the others and may account for him being short of 1 Oz Gold Eagles. Like my other post his display was mostly 1/4 and 1/10th in small quantities. The 1 oz seems to be the big mover. I just have to be positive about this. It seems that
2001 coins are in quanity and pre 2001 date are available only when they are sold to PM dealers.
A snap shot in the life of a Gold Bug.
Very Interesting!
Slingshot

JourneymanGolden gamblers XIV @Pandagold #49314#4934203/04/01; 13:02:52

Sir Panda,

Nice to see you back!

I would like to reinforce some of the points you made in your
post #49314.

Especailly neophytes here may get the idea that they can simply
enter the gold market, catch the trend and make money speculating
on gold. This idea is not much different from the day-trader
mentality, and I'm pretty sure we know a few and what ultimately
happened to most of them.

Many posters have gotten that day-trader mentality in various
forms, and just lately a few have alluded - - - no, in fact
spelled out - - - the very disappointing results. One poster
promised his Family Of Eagles down-line gold was going up in
short order. Because he was an honorable man - - - and had at
least one characteristic of a professional gambler, was somewhat
prepared to live with the actuality of what he only saw as a
possibility, that is, that he could lose. Several others have
posted similar stories here recently.

It's not that gold was a bad investment - - - especially if as
you suggest, you're prepared to keep it for awhile - - - it's the
timing, which is just as difficult with gold as it is with
stocks, etc. If your profit depends on accurate timing, then
unless you're a real pro, you're almost certainly playing with a
negative edge. And stats show even many pros don't do all that
well.

Let me present a simple story, an extension of one I posted
yesterday, to illustrate. This is "that insider's story" - -
like the one we'll probably never get on the gold game - -
because I _was_ an "insider" and I'm willing to talk about it.
While not on anywhere near the scale of the gold situation, this
story serves to demonstrate several principles which may be
useful to gold players.

When we were doing the "Computer Gang" - - - betting college
football and basketball (see yesterday's post #49274 for a more
detailed description) - - - many of us became individually known
as "wise-guys." Understdandably not only regulers waiting in
line with us to make a bet, but the big-time line-makers like Lem
Banker, etc. wanted to know what we were going to bet.

Sometimes a "little guy" in line would ask for a pick. If I was
sure he wasn't aware we were "wise-guys," sometimes I'd give him
a really good one. Usually anyone even a little bit "in the
know" got disinformation. They didn't do the work, why should
they profit? And more to the point, if they got one of our
picks, they'd immediately tell their friends and partners and the
line would move before we got down. That's just the way things
work in the big city.

Toward the end of my involvement with "The Gang," anytime we made
bets, observers from other groups put our line together and by
the time we got to the next Vegas book, there were other pros
already in line betting our numbers and by the time we got to the
bettng window, the line had changed. We became ringers.

At this point, we began to use our reputation to move the line
the way _we_ wanted it to go. We "ringers" would bet the "wrong"
side of the game for fairly large stakes and wait a few minutes
for the line to move (we could move the "Vegas Line" which in
turn moved the lines all over the country), and then the rest of
"The Gang" would "get down" with much more money at a much more
advantageous number on the "right" side of the game.

One real sleeper in all this is the situation the "little guy"
finds himself in. Is the pick I gave him any good? How much
should he bet on it? Let's say I make a mistake and unknown to
me, he's a pro. He still doesn't know how strongly that pick is
weighted and so what our PERCEIVED percent edge is. This makes
sizing his bets very iffy. And of course, there's no way he can
know whether I gave him disinformation.

But even if I gave him good "intel" and he makes the bet, he can
lose - - - because so can we! We don't really know what the
outcome of a particular game will be, even with the most advanced
CDC (Control Data Corp.) computers of the period working for us.
All even we have is just an "educated guess." He has only a
slightly better chance of winning with our single pick than if he
got a pick on the same game from Dumb or Dumber.

So "one bet only" no matter what the source of the information,
is mostly a gamble. It's the long-run that counts. You have to
bet over and over, keep your money in action and often,
particularly during the inevitable downward fluctuations, ask
youself if your PERCEIVED edge actually exists. Or if something
has changed it.

And this means also your over-all business equation must include
your costs of doing business. In sports betting one of our main
expenses was the cost of placing each bet. This was usually 10%
of the bet up-front, and is called "the vig." When you win, you
get your 10% back, when you lose, you lose the bet plus the 10%
vig, thus, if you're playing an even game overall (win half the
time, lose half), in the long run you lose 5% of your total
action to the bookie. To break even then, you have to have a 5%
edge - - - but who wants to just break even?

What's the cost of betting the stock markets? The gold markets?
That depends on all sorts of things. How much commission do you
pay your bookie, ah, that is, your broker? Do you cut a
government in on your win? (They aren't usually interested in
taking any part of your loss.) Are you beating "inflation" as
well? Etc. Given this business equation, what PERCIEVED edge
must you maintain over the long run to make playing the game
worth-while? Do you have records from which you can calculate
the edge you've been playing with up till now?

If you haven't made these calculations or even thought of them,
you're not behaving professionally, and if you play "long enough"
odds are you will lose. I'd bet on it.

I should say that the analogy between sports-betting with playing
gold and the stock-markets breaks down somewhat at the point of
settlement. The sports betting ticket is worth either twice the
bet (plus the vig - - which you get back on winning tickets) or
nothing. This is more akin to options and other derivatives
which have an expiration and are "in the money" or worthless at
that time. Even fiat "money" has that zero potential - - -
remember the Ecuadorian Sucre. Holding physical gold simply
doesn't have the zero-value downside, and usually, only a small
portion of the perceived downside of any other bet.

I would respectfully suggest that:

1. The "manipulators," just as "The Computer Gang," don't have
the iron control you seem to imply. Just as Greenspan, etc., they
must count on economic projections, which as we know
(particularly those of us who watched Greenspan's testimony to
the Senate Banking Committee) are skewed and are massively
subject to Yogi's Law and Mises Maxim, namely that the future's
hidden. Thus it seems to me that you may over-estimate the degree
to which TPTB can exert control. For example:

Secretary of the Treasury Lloyd Bentsen and Laura
D'Andrea Tyson of the Council of Economic Advisors both
refinanced their houses with VARIABLE rate mortgages
when FIXED rate mortages were at their lowest rate. If
they'd known what interest rates were going to do, they
could have saved themselves a lot of money by getting
fixed rate mortgages instead! "Does this make you feel
any better about sending your tax dollars to
Washington?" -David Brinkley's tag line, ABC This Week with
David Brinkley, 4 Dec 1994 ~11:59:00 AM EST

2. TPTB, to the extent they DO exert control, would indeed be, as
you suggest, long-time pros. They know folks want to grab their
coat-tails and they know how to use this to their advantage.

3. If you're playing particularly a game with a time limit
(options, etc.) and haven't kept track of your previous bets - -
- and haven't made a whole bunch of previous bets - - - and don't
have a numerical "perceived edge" calculated, you are most likely
fooling yourself about having a real edge.

4. Even if you have a real edge, if you haven't taken the "vig"
(commission you pay your broker), taxes, and inflation into
account, you may well be playing a losing game.

In short, recreational gambling is easy, professional gambling is
much harder. If you endulge in recreational gambling often, the
math says you will probably lose. Which kind of gambling are you
doing?

Finally, you can't escape gambling. A bank account is a gamble.
So is holding physical gold. The question is, what are the
PERCEIVED potential upside and downside? AND what is the melt-
down down-side potential of your particular bets?

Regards and good luck,
Journeyman

auspecPandagold #49314#4934303/04/01; 13:19:29

Excellent post and advice Sir Pandagold! I especially like the following: "It is only important to know it {gold} is manipulated by people, who descend from people who have been in the gold business for centuries, and control most of it". END
Would you be kind enough to e-mail me at This email address is being protected from spambots. You need JavaScript enabled to view it. , as would like to ask a question unrelated to this forum? Thank you.
auspec

Orville Goldenbachertiming is the key#4934403/04/01; 13:30:03

I'd just like to know what people's opinions are on timing.

On a scale of 1-10, what do you think about the PRESENT time to buy gold?

Is there enough turmoil in the world to make the present time a "10"?

Remember, to have good timing you must be a little early before the POG explodes and it is too late.

Not to pin anybody down, i'd just like to know what people think. I always think the present is at least a "9.5" so far, i've been a "little" early. I'm always ready to buy a little more au and those 20 Mark coins are looking pretty tempting at the moment.

Panda, good to see you back!

OG

Pandagold714 Arabs, OIl & Gold#4934503/04/01; 13:46:22

Forgive me if I haven't grasped fully what you are saying, but I will answer what I believe it to be.

The value of gold is what they trust. Gold is the measure of value they get for their oil. Because the supply of gold is limited, and the amount above ground, and below, more or less, is known if only by estimate, it is the only thing which has some stability. Governments can't just print more of at their will.

So, when they are guaging what to ask for their oil, and it is currently priced in US dollars, they have to see that the number of dollars they get equates to what they estimate
to be the true value of gold ( ie, not what price Rothschilds care to put on it in London.

As I have said, these things are not so simple. The two sides have to work together - to a point. The Arabs will go along with holding their price to help overcome some temporary economic problem the west may have. But, eventually they ajust their price to 'make up their books'.

To summarise - the true price of gold is their measure, the yardstick. It does not mean they have to have the gold. (20-25 barrels = one ounce gold)

Hope this explains it without getting in too deep. I read this many years ago from one or two sources, and I have watched how this works ever since.

If they keep pumping more dollars into the economy and holding the POG down - up will go the price of oil - you can bank on it.

This is the problem when you try to juggle things without dishing up the right medicine - you create another problem elsewhere.

This is also why they have to get the Euro standing on its two feet, so they can let the dollar slide and the gold price rise - or face high oil prices.

Sorry, no time to edit hope its readable

PandagoldJourneyman#4934603/04/01; 13:52:21

Wow that's a long one (as the Duchesse said to the Bishop)
Give me time to digest it.(she probably said that too)

By the way, was it you that asked me for a reference to the Christmass Truce on the Western Front (1914) some weeks ago? I did get one but could not remember who asked me for one.

beestingTHE BIG BLUFF!!!#4934703/04/01; 13:52:30

http://www.usagold.com/halloffame.html#anchor863944

For many years now we all have been reading over and over again how Gold is obsolete as a form of money and how the Central Banks of the world really want to sell their 32,000 tonnes of Gold which would in turn depress the price of Gold to way below production costs.

Lets take a step back and think about this scenario on an international level, because I think it's a big bluff that only the gullible fall for.

First, we have the thoughts of Another/Trail Guide/FOA/Sir Aristotle(Part 5 at top of page) and a Mr. Jim Sinclair(Wall St dubbed him Mr.Gold, after 40 years as an insider in the Gold business, he had an article at the mining webb recently which I cannot retrieve right now.)
They ALL agree Oil interests play a major roll in POG!

Mr. Holtzman recently pointed out that the U.S. with 8140 + tonnes of Gold(***UP 10 TONNES SINCE LAST YEAR!) could totally depress the POG by dumping the Gold all at once on the market, he may be right, but has anyone ever thought about this?
The Saud family of Saudi Ariabia in a very short time could very easily "BUY" at current POG "spot"(using paper money) all the Central Bank Gold in the world if they so desired, if you don't believe me do the "$" math on their oil export revenue.

Now lets expose the IMF & Central Bank Bluff!

Ask your self this, how are the worlds Central Banks "CONTROLLING" the "VALUES" of the worlds paper currencies?
Answer:
By knowing the approximate amount of "Paper" money issued worldwide, and thereby taking the real supply and demand equation away from what's being used as a medium of exchange, from the users of the "money", the people.(And using a "paper" set of valuations to their own advantage.)
The manipulation of a Gold price can only be accomplished by the manipulation of "PAPER" Gold!

If the Central Bank Gold was sold to the public,,,,in 8 to 12 years or LESS(when the CB Gold was all sold) the smart ones would use Gold as a medium of exchange worldwide in commerce to totally circumvent the false paper money valuation system, for many many reasons, here is an excellent current example.

If your business had recently sold any product to someone in the country of Turkey, would you rather be paid,right now, in Turkish Lira or Gold? If you've been watching the current destruction of the value of the Lira I'm sure your answer would be Gold.

So, the bottom line is:
Current Central Banking worldwide as we know it, would collapse if the people of the world(especially the USA)would exersize their Constitutional rights and use Gold as a medium of exchange among themselves, the way the framers of the U.S. Constitution intended!
Some are already exploring this "NEW" Gold medium of exchange system thru the internet!!! If anyone wants me to elaborate, without using names, with USAGOLDS permission,I will. Thanks for Reading.....beesting.

Tree in the ForestSomething is coming: from longwaves site#4934803/04/01; 13:59:52

A Mass-Correlation, Hyper-Volatility, Illiquidity Event is brewing

by Bob Bronson
02 March 2001 07:29 UTC

Seemingly unrelated capital market events are starting to escalate:

gold is moving up,
Turkish lira drops one-third,
hedge fund failure rumors building,
Japanese equity derivative problems surfacing,

slingshotTiming Opinion. Msg. 49344#4934903/04/01; 14:03:31

Orville Goldenbacher

"10" My reason being. I jumped in at $325.00 and I am going to run with it even if it drops. Forget about the world and all that statistical information. At $ 325.00 it was a good buy. Why don't others see it? Their up to their butts in debt. Live from payday to payday. Anyway, if you read this forum you learn plenty. Can't learn anything from a dummy. Gold is Cheap! May get Cheaper!
Steady as she goes, Mr. O.G.
Slingshot

P.S. Wait till Joe Sixpack wakes up. Just about the time the price of Gold starts moving upward at a good steady pace. OH! BOY!

PandagoldTotal value of all gold#4935003/04/01; 14:12:05

The total value of gold above ground, give and take 50cents either way (joke), is approximately 1 trillion dollars at the current set POG.

Just $1 trillion. Yes its a lot of money but compared to paper money in the system, which is increasing daily - it is nothing.

Once again TOTAL VALUE OF ALL GOLD!

Stocks, Lies, and Ticker TapeHBM, The Stranger, Sierra Madre, Belgian, and 714......Thank You!#4935103/04/01; 14:19:09

For your response to my post asking about bonds. I appreciate your making the effort. Time for me to consider which harbor to weather out the coming storm.
SHIFTYauspec #4935203/04/01; 14:19:15

Its nice to see you today.

$hifty

Stocks, Lies, and Ticker TapeHBM, Cavan Man.........Are you#4935303/04/01; 14:22:59

Cardinals fans?
SHIFTYPandagold #4935403/04/01; 14:26:34

Total value of all gold

Total paper money in the system (?) divide by total above ground gold = ????? POG

Any thoughts ?

$hifty

JourneymanChristmas, the Duchess & the Bishop??? My my!! @Pandagold#4935503/04/01; 14:27:19

Hi Panda,

Yea, it was a bit long. Did the Duchess mind?

Your memory is batting 1000. It was indeed I who asked for a reference on the 1914? truce where the soldiers of both sides celebrated together and as a result, were chastised by the "brass."

If you have that reference, I would appreciate it greatly.

Regards,
Journeyman

BelgianCentral Banks, the above ground Gold supplier.#4935603/04/01; 14:27:33

http://www.bis.org/index.htm

@ 714 : Bond Credit Foncier de France 8,5% '94-'04 - Euro
As soon AS the French government announced its withdrawel of state guarantee, the bond dived from 108% to 85%. Panic sales because AAA, changed in A1 and fear of delaying the yearly interest rate (8,5% yield) and repayment of the Bond itself. France has it's share on scandalitis. The state always shows up to back-up with taxpayers money on every scandal. The most recent one is former President Mitterand's son involvement in oil and arms business in Africa. etc..etc...

The above BIS-url is a nice starter to communicate your personal concern, about gold-reserves to a lot of Central Banks.

From 1980 to 2001. I remember the 1980 period as was it yesterday.Skyrocketing interest rates (14%) and Gold-Flamboyance (850$). Both events against an ever declining stockmarket, where VALUE (shares) were up for sale at mania-low prices. This thrilling event was exactly the diametral opposite as what we are experiencing today !!!!!
An unbelievable 21 year expansion of production and services (DowNas) against all time low interest rates (3,5%)
and our beloved yellow, 21 year slide to the mania-low of 252$/ounce. In 1980, I wondered each day at what new low, I was going to be able to buy some Value-shares. Did it with shaking hands and sold them much to fast with easy profit.
Isn't this something very important to consider seriously and toroughly. In French : plus que ca change, plus que ca reste la meme chose (the more things change, the more they stay the same).

Gold lost progressively its place in almost all portfolios over this extended period of 21 years. And as in 1980, for shares, POG is knocking at a solid rock-zone bottom. A natural layer of rocks, where the drilling gets very difficult, altough not impossible. The 1980 share panic and fear, made us recalculate a 100 times again the rock-bottom value of the dramatic undervalued shares (P/E<6+div.>6%)
Today we are asking ourselves, who will be able to get gold out of mother earth at a lower price into the nearby future?

Isn't this a nice story to contemplate before bedtime ?

Tree in the ForestBAAC Supercycles and Their War Implications#4935703/04/01; 14:30:22

http://csf.colorado.edu/forums/longwaves/2001/gif00024.gif

Very interesting Kondratiev cycle chart from Bob Bronson of Bronson Capital Markets Research. Have a look at this.
auspecShifty#4935803/04/01; 14:46:49

Thanks Shifty, the sabbatical is nearly over.
PandagoldJourneyman -Christmas 1914 Wetern Front#4935903/04/01; 15:58:05

Remember, this truce was unofficial

A truce took place in many areas of the Front from the Belgian front down
along the British Front Line. Lyn Macdonald deals with it her works _1914_
and _1915_ AJP Taylor deals with it in _The Illustrated History of World
War I_. I think Barbara Tuchman deals with it also in Guns of August. I
will check some other books I have at home and let you know.

Also check
/www.pbs.org/greatwar/episodes/stalemate.html#christmas

The Christmas Truce


Peter Simkins, Imperial War Museum
Germans would be heard singing "Still Nacht, Heilig Nacht." And the British would respond with a British Christmas carol. In some places food was lobbed over into the opposing trenches. I think on one or two instances, the Germans erected Christmas trees and there was a kind of mutual curiosity and certainly instances of soldiers applauding each other's singing. And in one or two places, on Christmas Day itself, the first curious, slightly headstrong people, perhaps, from both sides poked their heads above the trenches and being made aware that somebody on the other side wasn't going to shoot it off, then clambered cautiously out.

Paul Fussell, University of Pennsylvania
The Christmas Truce was the last twitch of the 19th Century. By that, I mean it was the last public moment in which it was assumed that people were nice. It's the last gesture that human beings are getting better the longer the human race goes on.

PandagoldIn case anyone is wondering#4936003/04/01; 16:11:24

The last post (no pun intended) to Journeyman was in reference to a posting of some weeks ago. If my memory serves me right, the point being made was how we are used and manipulated by the media.

Up until the first world war there was no history of hate between Germany and England. We are both from the same stock, and if we were involved in any battles it was both on the same side.

Then suddenly, almost overnight we were taught to hate.

But, as that first Christmas of 1914 showed, even though war had been declared, the hate was not there in the common man.

Who will we be told to hate the next time?

It shows how media, and it was not as advanced then as today
is used to manipulate our thinking and our actions.

Control a people's thinking, and you control the people

Tree in the ForestPandagold#4936103/04/01; 16:43:22

Hi Pandagold. Welcome back. It appears to be your opinion that gold will not make a significant move up until next year. While I do not dismiss the possibility that they could hold things off that long (I was amazed that they held things off this long), this is becoming progressively harder. The recent gold move was due to a liquidity problem on the Comex. They are running out of metal. Of course the Comex could be bailed out just as LTCM was. However, based on FOA, the ECB is content to let the system collapse on its own. If that is their position, it means they are certainly not going to assist Comex though there is some rumor of BIS assistance and of course the BOE is also assisting. They stopped leasing gold long enough to goose up the price so Comex could cover.

Theoretically, the US could give its gold to Comex indefinitely. They could use their 8000 tons to hold this off for a very long time. But consider that holding together Comex is not all they must do. They must do all of the following:

1)Maintain US stock market indexes indefinitely
2)Hold GATA off indefinitely
3)Hold major fiat currencies up including the dollar and the yen
4)Hold off imminent hedge fund failures
5)Hold off Japanese equity derivative problems surfacing,
6)Hold up the price of silver (and they don't have silver reserves like they have gold. US silver is gone.)
7)Hold off Japanese bank failures which have been held off for more than a decade already and are promising to multiply rapidly if the Nikkei falls below 12,000 which it is in danger of doing now.
8)Hold off war

And this is just a partial list. Now, how much longer do you honestly believe they can hold this mess together?

aunuggetsSlingshot......#4936203/04/01; 16:47:44

Something you mentioned earlier hit close to home.... i.e. $325.00 buy in.

Although much of my current holdings were obtained in the $260-$280 range (thank God for cost averaging), just suppose.......

....We "unsophisticated Gold Bugs" buying AU at $325.00 may seem a laugh to some, but what of those running up the credit cards in a similar amount, paying them off at "minimum monthly payments" of some 20% or higer APR, and most likely not even remembering exactly WHAT it was they purchased in the first place ?

Think I'll take the $325.00 gold "loss"....... any day !

Hill Billy MitchellSLATT @ # 49353#4936303/04/01; 16:56:25

Sir,

Once spent my summers behind home plate. That was before Auggie died. Not the same anymore. I am a Mcguire fan and, I suppose a fair weather fan. That's about it. I am also a Louisville (Denny Crum)fan. Does that count.

Respectfully,

HBM

PandagoldTree in Forest#4936403/04/01; 17:06:45

No I think we should see some movement before this year is out. But there should be a more significant move next year, and beyond.

One of the problems, and there are many at the moment, is if
the Middle East erupts. Another one is the 'dirty tricks brigade' causing trouble with China.

America will need something to deflect attention from home and pull the country together if (when) the recession deepens.

So I keep one eye cocked in that direction. Something is going to snap somehwere, but just where in the chain, I am not sure.

We are living in interesting times. I take it one day at a time. I am not a day trader as such, but will trade in the day if the situation calls for it, and I always keep enough cash in reserve to cover my ass (hopefully), or seize opportunities.

What I am looking for is a little volatility, even if it only treds water for a while. At least then we know its alive.

Like a good sailor from a seafaring nation I respect the sea and the elements.

Richard, OregonGandalf#4936503/04/01; 17:20:26

Gandalf - lost your emaill address. Email me. Richard
slingshotaunuggets Msg.49362#4936603/04/01; 17:46:24

Cost averaging.

Yes, thats right! Cost averaging. One more addition to the equation. Never sell below your get in price to insure profit. Those who brought at $800.00 could do this with a sell price say at $550.00 to cut losses. My opinion of course. Funny, with me if gold goes up I win. If gold goes down, I win again. I think I have a good plan. I do some research. Read this forum. (Thanks you'all) Follow the plan.
I really feel like I'm on the ground floor of some special project.
Have Fun! Steady as she goes, aunuggets, Steady as she goes!
Slingshot

HOOSIER GOLDBUGFARFEL STATUS?????#4936703/04/01; 18:03:35

Did anybody hear anything about maybe FARFEL'S new bodyguard lighting up FARFEL'S wing of his house and not his wife's????
Old YellerBad moon rising#4936803/04/01; 18:15:31

http://www.contraryinvestor.com/mo.htm

Wow,I've been checking daily for the next update from this site,excellent research and hard hitting bubble commentary.

Check out the thoughts on Japan and the implications for the rest of us at the end of the piece.Ole Greenie appears to have some serious flexing coming up.

Cavan ManHello auspec#4936903/04/01; 19:45:23

Good tidings unto you Sir.
Cavan ManHBM#4937003/04/01; 19:48:02

August Jr.

There was a man's man. Agree totally with you. I remember when he fired Vern Rapp in the 70's; there was a press conference from the dugout live. Time has passed me by.
Call me a "throwback"....CM

silvercollectorResponse#4937103/04/01; 20:47:24

Mr. 714,

Thanks for your message. In part,

"Gold was only used to pay oil royalties to the ruling Arab sheiks and NEVER was oil sold for gold on the open market."

So if we cut hairs on the definiton of 'royalities' can we imply that the oil was sold plus gold? Why were royalites paid in gold; why not USD or any other currency?


"Sure, there's a minor link between oil and gold -- royalties! That's it. Gold has little else to do with oil."

Again playing both sides of the fence, is it possible that Another's discussion of $19 + XXX is merely a number, not exactly that figure. The 'royality' may be a mere 1% or 2%, this cannot be minor given the huge sales in currency terms of oil to gold. The 'tiny' royality would add up to huge amounts of gold.


"Let me ask you: If there was a link between the price of oil and the price of gold, why hasn't gold risen?"

Oil and gold are not in their usual 20/1 ratio anymore, it does not exist. Another mentioned that.Because of the 'deal' Another suggests; keep gold low for us(them) to accumulate and free flowing oil will continue. Stop the gold flow and we (them) will price gold in terms of oil. The recent (nearly 2 years) rise in POO reflects the overvalued USD. To realize the same bang-for-the-buck oil is twice the price because the dollar is '2' times inflated.

"I've posted the above link ...."

The link didn't work.

Finally,

I am new to Another's thoughts. I have been completely stumped by the gold 'wars' and decided to look at it bottom-up for a change. We know that gold is being sold to keep it low (managed price). I think most, if not all of us, can agree to that. We are not completely sure how, when or where. We do not know who is buying. It may not be ultra-important to know HOW the 'sales' or WHEN they occur. It might not even matter WHO is buying. I think it is important to know WHY they are buying. We know or can assume to know WHY they are selling, WHY is WHO buying?

Another, IMHO, is completely correct on one major issue. WHEN the WHO stops selling the game is over. I think this issue is difficult to debate.

Thoughts?

SC

silvercollectorResponse#4937203/04/01; 21:03:14

Mr. Galearis,

Your earlier post echos my thoughts, not closely, but exactly.

My holdings are near equally split between physical and shares. Yes, the shares will be the first to go. No greed factor here, catch a ride and bail out of all paper.

Yes, hibernation will be key, extremely low profile.

SC

silvercollector(No Subject)#4937303/04/01; 21:10:28

Mr. Beesting,

"The Big Bluff" (49347)

Great post.

Hill Billy MitchellRecession (Al Calls it Retrenchment)#4937403/04/01; 22:30:54

Easy money is not here yet. We will know when easy money is here. Easy money will be here when the Fed Funds rate exceeds the 30-year bond rate by at least 300 basis points. We are 300 basis points away from there.

All the talk of not knowing whether we are in recession or not is baloney.

We are in a down turn that is going to continue to turn down for a good long while.

I suggested that the tight money policy would finally put us into a recession. No amount of smoke and mirrors is going to change what we are in for.

I have been through three recessions. 1973-1974, 1978-1981, and 1991-1992. I use these dates because those were the time periods when I experienced the full effects of recession in the income-producing period of my life and I have a vivid memory of it. I was defenseless because I was up to my ears in debt.

This just happens to be the first one that will not hurt me. Why because I have no debt.

The interest rate spreads tell the story. Al has not been able to stem the tide because it is controlled by the moon, not the sun.

Some of you out there will remember that I told you that we were going to be in recession about this time. I also said that it would not be mild. I will say it again. It will not be mild and it will not be short-lived.

When money is pumped into the pipeline and it does not flow into consumption the money does not liven up the economy. Ask George H. Bush. He lost a presidential election because no one would borrow the re-liquification. I tell you we are in for it.

Hunker down. This is no time to get aggressive in business and it is no time to go further into debt, unless of course one plans to default anyway.

HBM

SHIFTYPeriodic Ponzi Update PPU#4937503/04/01; 22:38:30

http://home.columbus.rr.com/rossl/gold.htm

Nasdaq 2,117.63 + Dow 10,466.31 = 12,583.94 divide by 2 = 6,291.97 Ponzi

Down 60.23 from last week.

ANOTHER ALL TIME PONZI LOW !!

Thank you Sir RossL for the link.

$hifty

Stocks, Lies, and Ticker TapeHBM, Cavan Man#4937603/04/01; 22:45:14

HBM,

I'm a Big Mac fan also and listen to as many of the games as I can. If you were an umpire, whats with the strike zone these days? Can't they read the rule book?

Cavan Man,

Vern Rapp......do you think he'd get rid of McGwire if he refused to shave his beard? The game isn't the same with respect to the managers. Whitey throwing that punk Templeton into the dugout after flipping off the home crowd. Sadly, those days are long gone.

Oh, and in deference to the forum:

Rick Ankiel's control = the cabal's future control of POG

Chris PowellAngloGold warned against pursuing Gold Fields#4937703/04/01; 22:47:47

http://groups.yahoo.com/group/gata/message/692

AngloGold warned formally against bid for
Gold Fields while the cabal is being exposed.


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.

Chris PowellGATA plans Africa gold conference in Durban in May#4937803/04/01; 22:49:11

http://groups.yahoo.com/group/gata/message/693

Dispatch from GATA Chairman Bill Murphy.

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.

714@silvercollector @Belgian @Pandagold#4937903/04/01; 23:21:48

http://www.eia.doe.gov/oiaf/ieo96/oil.html

Silvercollector, sorry that you're not able to link to the website I posted. I'm guessing your running AOL, or perhaps Compuserve, as some other friends on those ISP's have had trouble accessing my homepages (it might be the tilde in the URL). Looks like I might have to set the redirect service up again. Basically, the site consists of a webpage and a "pdf" file, the pdf file consisting of various memorandum from a US government archive regarding financial, and political, arrangements between Aramco and the House of Saud (Saudi king). Although it may be a bit dry for some, the memos are rather revealing of the arrangements at that time. This is what I know on the numbers, and contract arrangements in the 1940's: gold was going for about a $1.10 a barrel on the world oil market at that time (vs. the current $25-30 a barrel range). This oil was explored for and drilled in Saudi Arabia, and then brought to market, by an American conglomeration, Aramco (since nationalized by the Saudis). This was done under an agreement that Aramco would pay the royalty in gold sovereigns (see Mr. Kosares "Buy Gold" page) and the oil was Aramco's. The original royalty payment, negotiated in the 1930's, was 4 gold shillings a barrel, or about 22 cents a barrel. That works out to 153 barrels per ounce of gold, for royalties. This arrangement was renegotiated in 1947, under circumstances and terms too involved to go into much detail here, but it's safe to say royalties composed about 20% of the price of a barrel of oil. On top of that, during WWII, royalty payments were made in dollars, because Aramco could not obtain gold in London as that market was closed and, being an American company, they could not obtain gold bullion in the US due to the Gold Reserve Act, which severely limited the gold trade (Aramco even needed a waver from the US to buy it in London!). So from almost the beginning of the relationship between Aramco and the House of Saud, the King was willing to take US$ for royalty payments pegged to gold. Having said that, in fairness to FOA and Another who have asked us to think not like Westerners, it's easy to see the Arab point of view that they received gold for oil. But that's not the entire picture from the Western point of view, is it? Oil in the ground requires a bit of industry and a lot of work. And the oil markets were not in Arabia. They were in Western Europe, the US, and Japan, by and large. And there, oil has never sold for gold as far as I can tell. It was always US$, British pounds, or more recently in the case of Iran, yen. Now, having said all that, from the above link, we know that current oil consumption is about 70 million barrels a day. Let's see...the math...70 million times times $25 a barrel is $1.75 BILLION a day in oil. Or about $638 billion a year. Now, using the estimate of 120000 tons of above ground gold supply, and being a bit liberal with the figures ($300 an ounce), there's about $1.2 TRILLION in gold around the world. If gold was being used to pay for oil, it would be gone in TWO YEARS! If 20% of the price of oil was being used to pay for royalties in gold, the world's gold supply is gone, into oil coffers, in 10 years. And on top of these numbers, we know from the gold industry that 85% of gold production is going into jewelry. Considering gold production was maybe 3000 tons last year, times 15%, after jewelry, we've got 450 tons of gold left to pay for oil royalties, if we don't count industrial and other demand. By the way, the Saudis were not the only ME oil producer to have such an arrangement. Similar deals were cut in Kuwait, Iraq, and Iran for royalty payments in gold by British conglomerates. Honestly, it seems to me that the oil market long ago outgrew the availability of gold to pay for much of it at all. Perhaps FOA could enlighten us as to just where all this gold is coming from to pay for oil, and maybe shed some light on this rather oblique arrangement he contends is going on. (Wow, I was going to try to be brief.)

Belgian, thanks again putting up the numbers on bonds and gold. All the more reason, as you say, to buy gold.

Pandagold, see above.

Salaam (peace).

Topaz714 - Oil for Gold.#4938003/05/01; 00:03:34

Just a few observations 714,
Up till '71, US$ was likened to Gold (fixed exchange rate) so the direct O/G purchase wouldn't have been an issue. His Majesty STILL insisted on sovereigns though.
A/FOA contended that only a SMALL portion of oil was traded for Gold post '71 (full blown Fiat Dollar) as a trial balloon, and have suggested the bulk of O/G trades are now done with O & G still in the ground.
The gist apparently is to keep the trade wheels "ON" and have something to show for it at the end of the day (Gold) as opposed to debt.

Turnaroundtit for tat#4938103/05/01; 00:30:05

Hi Journeyman,

Someday I will get around to finding and reading "Hierarchy in the Forest" as per your recommendation.
Thanks for the gambling viewpoint, it's so...clear.
You may find "The Selfish Gene" by Richard Dawkins interesting- there is much about altruism, game theory, evolution, etc. It's written in an easy style but still pretty dense, I've read maybe a third of it so far.

Excerpt:

Chapter 12, Nice Guys Finish First

"The mathematician's simple distinction between the one-off Prisoner's Dilemma game and the Iterated Prisoner's Dilemma game is too simple. Each player can be expected to behave as if he possessed a continuously updated estimate of how long the game is likely to go on. The longer his estimate, the more he will play according to the mathematician's expectations for the true iterated game: in other words, the nicer, more forgiving, less envious he will be. The shorter his estimate of the future of the game, the more he will be inclined to play according to the mathematician's expectations for the one-off game: the nastier, and less forgiving will he be.
Axelrod draws a moving illustration of the importance of the shadow of the future from a remarkable phenomenon that grew up during the First World War, the so-called live-and-let-live system. His source is the research of the historian and sociologist Tony Ashworth. It is quite well known that at Christmas British and German troops briefly fraternized and drank together in no-man's-land. Less well known, but in my opinion more interesting, is the fact that unofficial and unspoken nonaggression pacts, a 'live-and-let-live' system, flourished all up and down the front lines for at least two years starting in 1914....
"The theory of games and the Prisoner's Dilemma had not been invented in those days but, with hindsight, we can see pretty clearly what was going on, and Axelrod provides a fascinating analysis. In the entrenched warfare of those times, the shadow of the future for each platoon was long. That is to say, each dug-in group of British soldiers could expect to be facing the same dug-n group of Germans for many months...The shadow of the future was quite long enough, and indeterminate enough, to foster the development of a Tit for Tat type of cooperation."

References:
Axelrod, R., (1984) *The Evolution of Cooperation*, New York: Basic Books

Axelrod, R. and Hamilton, W. D., (1981) "The Evolution of Cooperation", *Science*, V211, pp1390-6

--The Selfish Gene", 1989 edition

Hope this is useful, have a nice, iterated game. :-)

elevator guy@Journeyman#4938203/05/01; 00:31:53

Thanks, I enjoyed the Millenium Adventure in Japan link.
Randy (@ The Tower)Sir 714, I've read your comments with interest#4938303/05/01; 00:32:13

My own perception is that ANOTHER was describing events and potential eventualities of the modern decade or so, whereas your comments concentrate on the early and mid portions of the past century. As such, I don't believe your commentary does anything to discredit the "Thoughts" put forth by ANOTHER.

Further, if we examine your era focus, one is left wondering how it is that you can make such a comment as you have made in your recent post. You say, "oil has never sold for gold as far as I can tell".

Is your chapter closed against your study of the 1944 agreements of Bretton Woods, agreements which persisted in a form directly contrary to your above-stated knowledge for three decades? As the "bitter end" approached and sorely tested the originally-designed structure of the Agreements, did not the London Gold pool give adequate testimony to oil (or for that matter, anything and everything else which was also seen to be internationally priced in the convertible dollars of that era) selling for gold? As you will see, the dollar and bonds were effectively units of account in those days, representing gold as currency (money) and as gold loans.

I hope this helps somewhat in the event you choose to ponder these matters further.

Randy (@ The Tower)Well, well, well...Sir Topaz#4938403/05/01; 00:37:53

You certainly pulled the trigger more quickly than I could on that fixed gold-dollar issue, and far more efficiently, too. It seems I continue to type two words were one would do. Now I must rest and gather my few wits for a big day of projects ahead.
Topazand furthermore...714#4938503/05/01; 00:39:03

Let yourself imagine you're the big Kahoona. (with the entire world trading your Fiat money)
You know full well the fatal flaw is - a continuing growth pattern HAS to be maintained for the system to function.
You realise growth these last 20 yrs have been directly linked to a reasonable and regular Oil supply and whatsmore, you know those suppliers want to retain wealth in the future in something that isn't hamstrung with other peoples "INPUT" ie: Gold.
What do YOU do?
FWIW, here's what I'd do:-
Well firstly I'd poopoo gold and run it's price into the trash-can (thus divesting all but the most resilient goldhearts of their bullion)
Then, out of no-where, one fine eve, I'd let the price explode to a point where only the ultra-rich could afford it.
My cohorts in the Central banks would then declare Au is "MONEY" and impose total control over all things Au.

Pretty well what A/FoA have predicted....Yup?

JourneymanThanks @Turnaround (03/05/01; 00:30:05MT - usagold.com msg#: 49381)#4938603/05/01; 00:54:22

Just the kind of info I can really use.

Regards & Thanx,
Journeyman

TopazRandy, 714.#4938703/05/01; 01:17:24

Randy,
...evenin' Squire, I've found your link to Another's postings and spent a good part of the w-end reading.
What strikes me is the (predicted) tanking of the Markets in concert with a "ever so slightly" too high POO.
For my small mind - the writing's on the wall.
714,
Go back and read the content of Another's message, not from an Investment point of view, but from the position of someone "desperate" to retain profit's from trade NOW - well into the distant future.
The chips WILL fall into place.

Clint HPeter Asher msg#: 49333) Hill Billy Mitchell msg#: 49336#4938803/05/01; 01:50:06

Many thanks for the response. Many things to learn.........
Randy (@ The Tower)Again, put this on your horizon if it is not already there...#4938903/05/01; 02:05:01

http://english.peopledaily.com.cn/200103/05/eng20010305_64115.html

Just when things here in The Tower were settling down, I received a knock on my door with word that a gentleman was here to see me about some bit of important news to pass along. With a wary glance toward the clock, I put aside my bit of evening reading and lifted myself from the large rocking chair in which it is my custom to sit beside the lighted hearth within this particular chamber. In turning into the hallway I saw that I was to be met halfway by this messenger, whom I immediately sized up as an old friend. I wondered aloud at the urgency of any message that would inspire him (at this hour, no less) to climb the many steps to see me rather than await my decent for a proper meeting in the more aptly furnished anteroom of The Tower.

In summary of the message I offer you this link to an article...
(Excerpts)
-----China plans to establish a National Gold Exchange (NGE) this year, another step towards reforming its gold trading market.

Today's China Daily reported that a nine-member panel has been formed in the central government to lead and plan details for the establishment of the exchange. A preparatory committee will be formed soon, it said.

Shanghai is the most likely location for the exchange, though the central People's Bank of China (PBOC) would not confirm this early last month.

For years, gold trading has been strictly controlled by the central government. PBOC monopolizes the purchase and allocation of gold. China's gold prices are separated from the international market and rarely fluctuate.

The upcoming NGE, which would mainly target gold producers and wholesalers, would introduced market prices to China's gold trade.

The central bank would gradually withdraw from its monopoly position.

A retail market for gold would then be established, the newspaper's source said.--------

Also according to the article, in a speech before congress the mayor of Shanghai ranked this move as a top priority in the current Five-Year Plan; meanwhile a manager for the World World Gold Council Shanghai Office said the establishment of the National Gold Exchange "will help Shanghai become established as an international financial center."

I yawned as politely as I could, and asked him for how long he had been afield and away from all contact with anyone here at The Tower or at the Forum Round Table. After reassuring him that this was in fact information of global importance, I further explained that as a topic, it was anything but news (leastwise "urgent") to us here in The Tower, having discussed it off and on for many months now. But I thanked him just the same for providing this additional clear "evidence" of China's impressive progress in support of our commentary.

After exchanging a few other items of information with a relaxing drink by the comfort of the fire, he was eager to be gone as suddenly as he arrived, fading into the night on the sound of galloping hooves. With him went a gold coin I provided for his trouble, knowing full well that this wealth would in time grow to fearsome proportions, though his pony would know it not by the unchanging weight.

SteveH714#4939003/05/01; 02:34:13

So, based on your calculations, how many times do the ounces of gold in the 485 tons (13 plus million ounces?) go into the annual supply of oil in barrels and what is the significance of that number, which I calculate roughly at 1850 or so? And, how constant has that number been over time? And, what if anything does it signify? And, what could or should we expect as the supply of oil is depleted in 34 years by way of a graph? In other words, what would a chart look like, not showing a constant state of production of annual bbls of oil but the same amount of gold valued at the remaining qty. of oil, assuming total depletion in 34 years at current rates of consumption? I would think that it would be exponential such that the entire 485 tons of gold would eventually only buy the last remaining bbl of oil. Therefore, we should expect to see that more and more gold is being required to pay for less and less oil. Is this supported by the facts or even a trend seen in the current set of data that we have available today?
PandagoldRandy (China and gold)#493913/5/2001; 3:43:00

Actually, I am only really posting at weekends, but as I was checking on yesterdays late night posts that I may ned to reply to, I saw your post re the above. Well anything about China and gold alerts a mental sensor to me.

I believe what China is planning (and achieving) is going to have a dramatic effect in many ways. There are also 'outside' dangers from sources that deem this a threat to them, so must keep alert.

Opening the gold market was planned for last year, and should already be operating, but was delayed until this year. Shanghai, a city I love, and know well, it will certainly be.

It is VERY old news now.

714re: oil-for-gold trade#493923/5/2001; 6:37:05

Topaz, I fail to follow your logic as to why a fixed exchange rate would negate any point I made last night. There was a fixed exchange rate in place from the time of the original deal between Aramco and King Saud up until the 1970's, and since then, a floating US$. So what? You say His Majesty still insisted on gold sovereigns. But we know that from 1939 until after WWII, King Saud recieved NO sovereigns. He received no gold. He took US$, pegged to gold, for royalties, also pegged to gold. The record is clear on that. We also know, that upon renegotiating royalty payments in 1947, King Saud accepted, among other things, the construction of a railroad in payment of the royalties. Now, I will grant you that perhaps his successor, King Faisal, did indeed insist on a stricter gold arrangement, but what evidence do we have of that? Conjecture? Suggestion? You say, a small portion of oil was traded for gold, post '71. Where? And who consumated the deal? Was it before, or after, Aramco was nationalized in 1976? You know, Another was very good at making suggestions. Doesn't it strike you as odd that is all we seemed to get from him? He and FOA are certainly talented at stimulating goldbugs' imaginations.

Randy, thanks for your input, but how can we really separate what was going on in the 40's from what is occurring now? History is wonderful for shedding light on patterns of behavior and relationships. And history clearly shows that the House of Saud has been more than willing to accept alternatives to gold, though such royalties were still pegged to gold, as payment through the years. They even accepted a railroad! But again, and I will keep returning to this point because it is so important in this conversation, there is no history of gold being used in the oil markets of Europe, America and Asia to purchase oil from companies such as Aramco and Anglo-American. There is no evidence of it whatsoever, unless you accept suggestion as such. And how is it Bretton Woods affected any arrangements between Aramco and the House of Saud?

SteveH, those are very rough calculations. My point in making them is that the gold market in much, much thinner than the oil market, and as such, if gold were paying for oil, we would be seeing much more volatility and movement in the price of gold than in oil. In fact in reviewing those figures, I now have serious doubts that there is enough gold production to pay for Saudi oil royalties, if they were in fact still insisting on gold as payment. It would be very, very difficult, given the size of the gold market, to hide such huge gold transactions if it indeed were paying for oil on any kind of scale.

Perhaps I'm belaboring this critique of Another's oil-for-gold trade at this point, but let me say that gold is a wonderfully tangible investment. And we need many more who feel the same so investment demand for gold rebounds (it's awfully low). I do not think we are well served to hawk it like some kind of snake oil, making unsubstantiated claims and suggestions that it is a panacea for all that ails us.

Salaam.

Pandagold714#493933/5/2001; 7:19:23

Just quickly. I am not quite sure what I was supposed to see
in that post you asked me to note. I did observe that I believe the part referring to the four gold shillings and price of oil, the maths did not quite work out, for the 1930's, though I did it in my head (not the best of places)

Was your over all point agreeeing, more or less with what I had said, or diagreeing?

Remember what I stressed, there does NOT have to be enough gold to pay for oil. The price is what matters when converted to value.

Once they have got the value, they use their funds for building infrastructure and whatever rewarding financial instruments, or property purchases are in vogue at the time.

714Pandagold...#493943/5/2001; 8:19:31

...where do you get this figure of an ounce of gold for 25-30 barrels of oil? And do you have any documentation? The figure of four shillings a barrel comes from Aramco memorandum and applies not to the price of oil, but rather the royalty paid by Aramco, per barrel of oil, to King Saud, for the right to drill, pump and export oil under the terms of their original agreement, dating to the 1930's. Do you have any documentation, or any other evidence, that oil ever sold for gold in the open markets? And perhaps more importantly, are you at all familiar with the details of the working arrangements, and relationships, between the various parties in the ME oil business?

Tia.

Pandagold714#493953/5/2001; 8:33:26

What concerns me is why you keep stressing this oil 'sold for gold'. I keep explaining that that is not what I am talking about. I keep saying that the POG= 20 to 25 barrels is only the yardstick for pricing their oil.

Where are we going wrong. Am I not making my point clear, I have tried several ways. Then someone says there would not be enough gold. But it does not depend on how much gold. The Arab Oil producers don't need the gold - they have plenty. But as the arrangements at the present are that oil will be priced in dollars, they want to be sure they get enough dollars to give them the VALUE.

Gold is their YARDSTICK. Before we go further - where am I going wrong in that you keep referring to selling oil for gold? Am I misunderstanding you, or you me. I am sure there is a simple solution

714Forgive me, Pandagold...#493963/5/2001; 8:53:14

...but obviously we don't see eye-to-eye on this issue.

I am NOT saying oil sold for gold. I am contending just the opposite. OIL NEVER SOLD FOR GOLD! Capiche? There is no link between oil and gold outside of some dated royalty deal, and history clearly shows gold was not used to pay these royalties at times, as some here have indicated. If you've got some documentation, great, let's have it. What I am saying is that Another's & FOA's well-intended musings on the oil-for-gold trade (their term!) is FICTION. Yes, it is that simple.

Thanks again.

ge714 & Pandagold#493973/5/2001; 9:12:27

It seems as if the works of ANOTHER/FOA and Reginald HOWE complement each other. According to Howe, physical and paper short positions amounted to 10,000 tonnes and 6,000 tonnes respectively at the end of 1999 (http://www.goldensextant.com/commentary12.html#anchor341719). He based his study on published BIS data. The question is, "who holds all the (16,000 tonnes) of paper claims?"

Having walked through the Gold Trail, I can now speculate: Oil holds most of the paper gold claims.

Apparently, gold is cornered. Unbelievable!

The following is a quotation from ANOTHER.

BEGIN QUOTE

...
Understand that oil is still traded for a certain number of US$ but after the deal is done a certain amount of gold is also purchased with the future flow of oil as collateral"...

In the beginning the CBs didn't sell their own gold. They ( thru third party ) found someone else who had bullion. That "party" sold to a broker who sold forward for a mine or speculator or government). In the end the 3rd party had the backing from the broker that he
had backing from the CB to supply physical if needed to put out a fire. The CB held a very private note from the broker as insurance and was paid a small fee. This process mobilized free standing bullion outside the government stockpiles...

This whole game was not lost on some very large buyers WHO WANTED GOLD BUT DIDN'T WANT IT'S MOVEMENT TO BE SEEN!...

Well a funny thing happened right after the Gulf war ended. What looked like big money before turned out to be little money as some HK people, I'll call them "Big Trader" for short, moved in and started buying all the notes and physical the market offered. The rub was that they only bought low, and lower and cheaper. They never ran the price and they never ran out of money. Seeing this, some people ( middle east ) started to exchange their existing paper gold for the
real stuff...

Gold is cornered. Plain and simple. No complicated theories, no options problems. The commodity value of gold was forced so low in paper currency terms that all of the new mined gold, going out some 10 years is spoken for. Between the third world buying physical gold and the jewelry industry ( same people buying ) there is none left for the oil states!

END QUOTE

Pandagold714 Arab oil producers Gold and Oil#493983/5/2001; 9:23:48

Gee714, we've just got to get this one straight, or I will go nuts.
I appreicaite you are not yourself saying that oil is sold for gold - or that you doubt it through lack of evidence.

I am NOT saying it either. I am just saying that they use the POG as a yardstick for pricing their gold. the POG as THEY see it, not Rothschild's London fix. As both commodities are priced in dollars, and gold is the 'real' money not paper dollars, the Arabs make sure they get their true value, whatever the market makers dictate. IE., inflated dollars, suppressed gold price = higher oil price.

If this doesn't work, then we'll call it day. It's just a misunderstanding I'm sure

PandagoldGold last week#493993/5/2001; 9:30:11

www.financenews.com au (via 'fallstreet')

Brief gold rally wrong-foots investors



By ROBIN BROMBY
05mar01

AS a rally it was short-lived -- but just long enough to show gold's potential to catch some big players on the wrong foot.

Gold rose to $US268.25 last week, its highest level for seven weeks.

Those holding any of the many massive short positions would have been given a fright.

While the metal was back at $US262.85 by Friday night, the brief rally had shown the yawning gap between available physical gold and that sold forward by traders and speculators.

After all, these people know that short positions -- gold sold on paper in the belief that the physical gold can be bought at a cheaper price to fill the contract in the future -- amount to something between five and eight years' physical production.

Annual world gold production is about 2550 tonnes, but short positions total several times that, with some estimates as high as 17,000 tonnes.

The tight state of gold supply was thrown into relief last week when leasing rates soared as high as 4.75 per cent for one month, against a rate of less than 0.5 per cent for most of 2000.

Even as late as the end of January, the monthly gold lease rate was just 0.8 per cent. By last Friday, it was back down to 1.7 per cent.

The rally is being written off by some as just one large short position being covered.

But even if that were so, the price and leasing rate jumps do illustrate the potential for serious dislocation if there were to be a sustained rally.

Mercurial Hong Kong investor Marc Faber, known as Dr Doom, believes that 2001 could mark a decisive turn in the fate of gold.

"If a gold market rally took place -- for whatever reason -- massive short covering could drive the gold price far higher than anyone currently thinks possible," he wrote last week.

Faber's forecast is based on his belief that there is a good chance the US will find itself in an "unpleasant deflationary recession this year, in the course of which corporate profits will collapse and bankruptcies soar".

He is telling clients gold is the best hedge against the coming bear market, and advising positions in Newmont Mining, Placer Dome and AngloGold, among others.

Gold tends to be a refuge in times of crisis when faith in paper money is diminished. During the Great Depression, for example, the metal rose 69 per cent from $US20.67 to $US35 an ounce.

Even the more restrained analysts at Salomon Smith Barney were this week adding gold to their positive sector. Speculators piled into gold last week on rumours that some central banks were refusing to lease gold and that there would be a squeeze as buyers would need to pay more to buy the metal.

Australian Gold Council chief executive Greg Barns said part of the problem was that rumours were driving the market.

The market will be in a state of uncertainty until March 14, when Bank of England governor Eddie George will outline the bank's future gold sales policy.

Overall, Mr Barns said last week's shallow rally had lifted the barrier to $US270 an ounce. Should it break that barrier, gold could well rally as high as $US280.

The World Gold Council's George Milling-Stanley told The Australian the key factor last week was that the cost of borrowing short-term gold exceeded that for longer term transactions.

This demonstrated a shortage of gold liquidity.

"Some lending has entered the market over the past couple of days, probably to take advantage of the higher lease rates, but the cost of financing short positions remains higher than usual and could still trigger some short covering," he said.

However, one US writer reports that the WGC recently sent out a letter to its sponsor members about problems in the physical gold market.

Jay Taylor, who edits a gold newsletter, said the council's letter complained that the Bank of England had for several days not lent any gold.

This, added the WGC, was unprecedented as the bank's short-term lending was vital to the London market.

Mr Milling-Stanley said neither the British nor the Swiss central bank had indicated a reduction in lending.

But he added: "There was certainly less gold being made available to the market from central bank lenders."

USAGOLDWhy the Lull in the Gold War Might Be Termporary#494003/5/2001; 9:38:54

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

3/5/01 www. usagold.com. . . . . Gold was up marginally in the early going after a quiet night overseas. Paper selling by one or two funds was met on Friday and this morning by counter-balancing physical demand. Gold demand is being driven worldwide by wilting financial markets, a growing energy crisis, and concern that the Bush administration has backed off the strong dollar policy. This week we have Q4 Productivity and Factory Orders on Tuesday and the Employment Report on Friday -- a relatively light week but possibly just enough to keep an edge on equity markets. The Australian Financial Review published an article (See Review section for link, right) overnight that puts an interesting spin on the recent gold rally. "As a rally," says Robin Bromby, "it was short-lived -- but just long enough to show gold's potential to catch some big players on the wrong foot. . . . . . . . . . . .

Continued at
COMMENTARY & REVIEW

Clients and Subscribers Only. Registration required. Go to link above.

USAGOLDWhy the Lull in the Gold War Might Be Termporary#494013/5/2001; 9:39:49

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

3/5/01 www. usagold.com. . . . . Gold was up marginally in the early going after a quiet night overseas. Paper selling by one or two funds was met on Friday and this morning by counter-balancing physical demand. Gold demand is being driven worldwide by wilting financial markets, a growing energy crisis, and concern that the Bush administration has backed off the strong dollar policy. This week we have Q4 Productivity and Factory Orders on Tuesday and the Employment Report on Friday -- a relatively light week but possibly just enough to keep an edge on equity markets. The Australian Financial Review published an article (See Review section for link, right) overnight that puts an interesting spin on the recent gold rally. "As a rally," says Robin Bromby, "it was short-lived -- but just long enough to show gold's potential to catch some big players on the wrong foot. . . . . . . . . . . .

Continued at
COMMENTARY & REVIEW

Clients and Subscribers Only. Registration required. Go to link above.

Tree in the Forest714#494023/5/2001; 9:45:16

A very interesting exposition on gold for oil. If I might ask a question. You valued gold at $300/oz, but suppose the Arabs are valuing it at $3000 /oz knowing that it will soon be at that price. Then less gold would be needed to satisfy their requirements. How would that effect your conclusions? Thanks.
USAGOLDWilhelm II German 20 Mark Now Available#494033/5/2001; 9:47:12

http://www.usagold.com/onlinestore/special.html

We have never been able to keep the German 20 Mark gold coin in stock for long. We have a group of buyers who wait until these rock solid pieces of history become available and then take them off the market almost as quickly as they appear. This is the popular Wilhelm II mintage from 1890-1913 that helped so many German families through the Nightmare German Inflation which occurred a decade after the coin's last year of issue, hence the nostalgic attachment. The Wilhelm II 20 Mark has special meaning with the descendants of those who suffered through that monetary debacle ending with the rise of Adolph Hitler. This item is also generally popular with those with an interest in financial history. Hopefully at 1000 pieces, we have enough to get us past the first week of the offering. Orders, as always, will be filled on a first-come, first-served basis. The premium is still low for the item; it will go up and down with the gold price; and the liquidity is strong.

.2304 net fine ounces. .900 fine Brilliant Uncirculated. No minimum. 1000 offered.

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

Randy @ theTower provides some interesting and instructive background for the Wilhelm 20 Mark gold coin which can be read at the link above. We urge to reserve your share of this hoard at your earliest convenience. We do not expect it to last.

USAGOLDSpeculation on the BIS "Yawning Gap" Role: Additional Snippet from this Morning's Commentary#4940403/05/01; 10:04:22

http://member.usagold.com/commentaryreview.html

We now surmise that some entity stepped into the "yawning gap" to supply metal to borrowers last week but, at the moment we don't know who. Some speculate it was the Swiss based Bank for International Settlements (BIS) and let's assume for the purposes of discussion that it is. I have no reason to second guess the reports that filtered out late last week of its involvement. Founded just after World War I to clear German reparation payments, the traditional role for BIS evolved to play central bank for the world's central bankers -- making a loan here, clearing a payment there, essentially providing short term liquidity for those having
short term problems.

As such, one could say with some degree of confidence, that if it was the BIS that stepped into the "gap," it could just as quickly step out drying up liquidity as easily as it added it. If the BIS is indeed involved in the gold market, one would have to assume the reason would be to offer an assist to the increasingly beleaguered Bank of England. I am assuming last week's reports by the World Gold Council on the BOE's lack of gold liquidity are true. (See Review section.)Now some are saying that BOE's "liquidity problem" could cause it to cancel further gold sales -- a development which would be not only prove to be an embarrassment; it would hint at problems in the gold market much deeper that any of the shorting institutions would like to admit. For BOE, such are the problems when one has the London Bullion Marketing Association in its backyard and a large number of those members owe large amounts of gold to other financial entities -- most notably the world's central banks. For the bullion banks short the gold market, the BOE's retreat could be cause for many a sleepless night with thoughts of a bailout dancing through one's head.

Interestingly, the reports were calling for gold to open down a dollar this morning and it opened marginally higher instead. Something tugs in the back of the mind about all this that tells us we may be feeling the effects of a short term band-aid on the leaking gold liquidity. So we are going to reserve judgment, and, in fact forward the notion that perhaps this sudden cooling in the gold market may be temporary. That something tugging at the back of the mind, by the way, has to do with the relatively low gold reserves of the BIS, its penchant for hanging on to them, and the short term nature of its involvement in markets. More deeply, it has to do with a hunter's sixth sense that the quarry might be injured. We will see how injured as this
progresses.

As gold owners with our metal bought, paid for and sitting
comfortably nearby, we can afford to watch all this unfold
patiently and with the appropriate amount of interest. After
all, we aren't the ones who owe the world something on the
order of 5000 to 17000 tons of gold depending upon whose
estimates you want to believe. They are.
---------------

Note: I should emphasize that the BIS involvement is only surmised at this time and to my knowledge unverified.

If you are new to USAGOLD and would like to read these (almost) daily reports, we welcome you. Please see registration link in previous post. Those registered already can gain access thru link above.

OROHBM – money supply determining interest rates#4940503/05/01; 10:24:02

In the current financial world, the dollar interest rates from various sources are the primary element, the money supply being a result. In the gold system and free financial markets, there is a true liquidity constraint in that the acceptable money is limited in supply at any time. Modern currency (dollar) systems respond to liquidity constraints by the monetary authority deciding to inject new "cash" by buying all paper offered it up to a certain interest rate. Since the quantity of money is the loose end of the equation, the dependent variable, interest rates play the role of the determining factor in the financial markets.

The supply and demand relationship for money is different from that balance for debt. One borrows when rates are low enough for the purpose at hand. One does not borrow first and determine the rate later. The money balance is not a determining factor for interest rates, since the lending side is inexhaustible in quantity, and the recipient of the newly created funds (the vendor of items bought on credit) can not make that money disappear, he can decide only whether to keep the money or dump it into someone else's hands. Ownership of money changes but funds remain within the financial system till someone uses them to pay down debt.

Supply and demand for money are determined by both interest rates and outstanding volumes of debt obligations (and therefore debt assets as well). Interest rates are not determined by amounts of money, but for the presence, absence, or degree of default premiums embedded in interest rates, which tend to rise when money is more restrained, and drop when fresh credit flows strongly.

The demand for money to pay debt has an indirect effect on interest rates through the currency depreciation rate. Such that the price inflation premium embedded in interest rates is smaller when debtors are forced to sell their product at a lower price than would otherwise be the case in order to increase revenues such that debt may be paid off, and assets not be lost to seizure by creditors. The price drops are limited, however, (1) to the value of the assets used as security, otherwise the assets will be given up to the creditor and liquidated on the markets or shut down, (2) prices must be such that continuing production at these relatively lower prices does not entail further growth in debt (no production at substantial loss).

To summarize:
Credit money systems have no natural liquidity constraint, only the decisions of the monetary authority.
Therefore, the fundamental value is that of interest rates. That is a driver rather than a driven factor.

Gold standard systems are liquidity constrained and thus interest rates interact with money supply and long term credit. The reason for this is plainly that the money supply is limited to the resources available in the economy, which has adjusted prices, contracts, and interest rates to the existing gold stock. Thus higher productivity would show up as higher supplies of both goods and services, and a roughly commensurate rise in gold supplies (which are affected by more efficient production, processing, and distribution systems, the same ones that make the rest of the economy improve).

BelgianWHAT IF......#4940603/05/01; 10:50:31

Anglogold merges with Gold Fields >>>> Erases, immediately 50% Hedge position >>> POG spikes strongly, with the help of 14 th (GATA/Howe) + 15 th (BOE-aution) of march, super news >>> Goldpaper squeezed >>> Ashanti-avalanches >>> POG, through 350$ barrier ??? Impossible ?

714 : oil/gold : you have a point ! BTW, what happened with the gold-stash of the Sultan of Brunei ?
IMO, we are completely in the dark with actual oil/gold relation, if any . Other than Arab oil-producers, never stocked a percentage of their revenues in gold. And goldproducing countries are either stocking the produced gold. Gold will always be treated with outmost discretion.
The captains of the desert found other ways to seed their dollar-revenues. Prince Whaleed and friends !

Perhaps, more interesting would be the charting of the following correlation : World's GNP (now=40 trillion) and above ground gold-capitalisation (POG x tons) since 1971.
To put the actual goldcapitalisation into perspective and searching for future price-projection. Is physical (!)goldtrade in a constant relationship with the expanding worldtrade ?
Again...this is information I am expecting from the WGC !
2$ an ounce to update any fund on how much physical gold they should carry as an optimum in their portfolio. Urging an open and public accountability from central banks and their goldreserve. Argumenting with that good old confidence-factor towards paper-currency. Am I suggesting another goldstandard, again....no, no, nohhhhh...wouldn't dare.

714One last one for now...#4940703/05/01; 10:58:18

...thanks ge for your input. Having seen that old post from Another, those very thoughts have crossed my minds regarding the paper claims. I don't doubt that gold is flowing to the ME oil producers to some extent. But the link with oil is indirect at best. You know, I work and get paid in FRNs, some of which I use to buy gold. I suppose one could construe, and suggest, a work-for-gold trade going on, but nonetheless, there is no direct link between my working for a living and gold.

Tree in the Forest, I certainly wouldn't rule that possibility out, although I'm not sure anyone truly knows where these markets are going. And why settle for gold at $3000 and ounce when you can get it for $300 an ounce? I wouldn't underestimate the shrewdness of ME businessmen. They know, for instance, that it's dollars and euros and yen that buy their imports and investments, and I'm sure they look at gold as insurance as many of us do. Much more fundamental to the gold market is the supply-and-demand picture, which is somewhat analogous to the silver industry of the 1870's when it was simultaneously being demonitized in Europe while oversupplied by a boom in production. Of course, there are somewhat different, and more bullish, circumstances at work today, particularly regarding derivatives, that are difficult to figure into the equation.

Panda, relax, no reason to go nuts. I GET EXCITED, TOO, SOMETIMES! (I hope your smiling.) I learned a long time ago there is a certain futility that goes with looking for a change in others, a futility that touched me this morning. I really don't think we see eye-to-eye on this matter, but I'm more than willing to accept that and listen to what you bring here.

I really must go...thank you...

OROHoltzman - a critique#4940803/05/01; 11:05:57

Holtzman, these comments are meant for you and are applicable to positions presented by FOA, Randy, and Aristotle along similar lines, and echoed by many others (donnemuir being the latest). All that is wrong in modern "hard money" and "conservative" political thinking is present in abundance in your comments this last Wednesday.

Journeyman, thanks for stating the reality of the matter of artificial separation of functions of wealth money and trade money.

I will start with the basic notion that government has any purpose but for the protection of individual rights in which it may provide a net gain to a society. There is no such purpose that can be served. Bread and circuses did little for their supposed beneficiaries in Rome, and ultimately destroyed the whole of the Empire. The Roman welfare state was not popular outside of Rome's near destitute riffraff, and the aid to these people was meant to buy the loyalty of this portion of the public away from the electoral republican institutions and the courts. The majority had never supported this, but were not capable of moving against the Emperor without the Roman street mob. This is repeated throughout the world in modern times for the same reasons but in a slightly lesser form, where the state's (Caesar's) beneficiaries are slightly less concentrated. Much propaganda is necessary to maintain the situation, since it is obvious that the beneficiaries may never be a majority of the people, as the state destroys at the very least one additional unit for each unit of benefit provided. Thus the un-benefited part of society must lose at least two loafs of bread for each provided to the state's beneficiaries, the one taken away, and the one destroyed.

The possibility of majority support for this kind of proposition is near nil, but for temporary popularity of this kind of scheme with deluded masses and power hungry eunuchs of the court. For this purpose, governments have sought to control education and curb the freedoms of the press. They have sought to control opinion by buying the allegiance of the intellectuals who might otherwise voice an opinion contrary to the range of opinions not threatening to the state. Research in the social sciences is dominated by government money and it has no purpose but to squelch criticism of the state, and promote state power. The move by government from censure of opposition to subsidy of allies was not a move away from censorship and propaganda, but a move towards a more effective form of them. The imperative remains the same; to justify the absolutely impossible notion that government can provide a general beneficial value over the free markets.

The wealth of Caesar was in his power to squeeze property (agricultural land) and income (grain and livestock) out of the landowners. This came about as a result of the ease of exercising the violent threat, and the lack of alternative jurisdictions for land based wealth to seek.

Heavy industry brought the income extractable by government to new heights, as the physical capital was easy to destroy completely and the added productivity of industrial capital relative to agriculture and small industry was so great. Furthermore, alternate locations for capital were not available once capital was in place, thus the creation of new facilities in alternate locations required the building of a complete duplicate of the rest of the related infrastructure of upstream and downstream industry. It took 70% income taxes and capital gains taxes to make the construction of a duplicate heavy industry network an attractive proposition for the investor. At first it was out of the US and Britain into Europe and Japan, then taxes drove out European investment into South America and the Pacific Rim, where government was sufficiently easy to bribe so that the bribes and the risks to private property were lesser in cost than the certain taxation at home. Once this industrial infrastructure was rebuilt in multiple duplicates, it became much more difficult to prevent marginal investment from going to these places. As a result, Western policies of tax, regulation, and government ownership of industry were turned back towards free market principles, not mainly because of the popularity of such a move but because the alternative was obvious economic stagnation. The economic stagnation would have been undeniable with the contrary example of newly industrialized nations highly visible to the people.

I will say this in short: The welfare state is not desired by the people, is not provided for the people, and creates social instability rather than the other way round. Government creates new poverty with each penny it gives the "poor". Rome was lost because of bread and circuses, these kept tyrants in power and the people in bondage.

The reason for Europe's union is completely unrelated to colonization, which is well outside its diminished military and social capacity. Europe is not (at least not yet) in a position to colonize Antarctica, not to speak of a place having people in it.

The European Union is many things to many people, with differing expectations and motives that are often at odds driving the form and substance of it. First, however, it is a union of governments and politicians. As is always the case in cartels of this kind, the motive is to prevent competition among the members, and close the market to external players.

It is an attempt to keep the governments of Europe alive and their bureaucracies in power as labor and business cartels meet competitive pressures that would cause both to turn their backs against the governments that can no longer improve their lots at the expense of everyone else – not only because the bureaucracy wants all the benefits for itself, but because "everyone else" can leave; in person, in their labor, with their wealth, with their consumption. Governments of Europe hoped that these forces lose power as a result of competition within Europe, leaving the government institutions in power longer. It was also hoped that the enhanced efficiencies resulting from the union would grow the EU economies without governments having to forgo some of their income. The EU is a union of European governments against their citizens.

The businesses community and conservatives that supported monetary union and dismantling of remaining intra-European trade restrictions were more motivated by the possibility of putting governments and protected labor in competition with their counterparts among the EU member countries.

The structure of the EU still leaves open both possibilities: of governments losing power and their share of income because of jurisdictional competition, or of governments forming a cartel of coordinated tax and regulatory conditions to prevent this competition.

The second issue, that of currency, has two main purposes: displace the dollar from internal monetary use within the EU, and continue isolating Europeans from the rest of the world. The latter is intended to herd Europeans, their incomes, and their capital within the circle of the fifteen wolves that are their governments. The French government is openly talking of electronic systems to track in detail exactly what each person earns and where and how he spends it. Obviously with the intention of capturing a greater portion of income. The first is to deny the US the "free ride" at the expense of Europeans that is the effect of holding dollar reserves for internal EU trade.

The EU restriction of trade over the past 30 years has prevented Europe from benefiting from the extension of industrial culture that has occurred through the development of an industrial middle class in many emerging nations during this period. This stands in the way of Europe enjoying fully the benefit of division of labor around the globe.

The progression of events you see for the hypothetical "auri" is wrong because having a gold exchanged currency would introduce a different set of considerations than is now facing the markets. First, it is not at all applicable to set the auri as an equivalent to any given currency basket on an exchange basis because contracted interest rates were derived from a fiat monetary system with fiat inflation rates dictating interest rates. Second, the artificial auri rate of exchange pegged in this way (pegged to the dollar at parity) would make it necessary for it to be pegged on a much lesser ratio than 1:1 (no leverage), something on the ratio of 1:50 would be more realistic (2% reserve). Furthermore, the appearance of the Euro – or the auri – would bring about the transition of intra European borrowing from dollars to the new currency, thus creating an immediate drain on the gold backing the auri, while still having the dollar rise against the new currency so long as the transition is ongoing (because that forms a dollar deficit in the Eurodollar markets, since fresh Eurodollars are no longer created). Shortly after the borrowing in auri began, the gold flow out of reserves would cause the ECB to raise interest rates till the gold flow stopped, and then let go slowly, and repeat. The process would have been very long and the strengthening of the dollar would never have been so steep, and may not have occurred at all. Second issue, and likely the one of more substantial import for a CB is that of market reaction upon rumor of such a plan. The immediate response for a fully covered fixed gold exchange standard would be a blow up in gold prices as the market raises gold prices to the point of EMU gold reserves fully backing not only all outstanding legacy currency, but all potential monetization; i.e. to cover up to 40% of outstanding Euro area debt.

Greenspan's interest rise never changed the relationship with Euro interest rates, keeping the spread about constant. The defense of the dollar was not done by the pull of interest rates alone (a short term and self defeating strategy since it creates more dollar assets in the depositor's hands) but by raising the cost of debt service on the short term portion of emerging market debt, and restricting the growth rate of dollar exports by keeping liquidity within the US scarce.


The first thing to note it that the Euro is a currency, and that the alternative to the Euro currency is not a gold backed "auri". The alternative is having a market money, one chosen by the people through their interaction. It may be a composite money, it may be a competing system where various combinations of any denomination bond indexes, stock indexes, metals, etc. are the money. The gold standard is not a full substitute for a free market. Though less artificial, it is still somewhat a creature of government. A transitional system could have been planned, but none such has been proposed, because no government or banker would ever want such a system that being because it denies them the benefit of government intervention against the people.

The reason for the Euro not being a gold money is that what was desired was a currency. An inflatable currency based on debt, coupled with the possibility of having a cash gold element when necessary, so that rather than provide Euro for liquidity by buying market debt, euro would be used to purchase gold to provide liquidity. Thus assuring balanced books at the ECB and member CBs without having to hyperinflate the Euro, and without having to export Euro for goods (carrying a negative trade balance due to monetary effects) but for gold (carrying a Euro for gold trade balance). The EMU is not about solid honest money so much as it is about the political needs of EU governments and politicians to have a non-German non-French money – one that is not a political football between the two governments. Thus the need to have gold in the system results from the need for a non-partisan money within Europe. The dollar experience has made the rest of the world wary of a new Western debt money for trade designed in all its institutions to benefit only its issuer. The Gold scheme is the alternative that allows Euro to be a potentially politically neutral currency.

The one to one setting of gold to a currency unit within the existing contractual infrastructure of European currencies is obviously what one would NOT start with if a gold standard or free market standard were the ultimate goal. There is no way that the contractual obligations undertaken within a fiat world could be replaced overnight with gold denominated contracts. One would start by putting a legal tender status on gold and a number of alternatives (silver, plat, plad, etc.) at the going exchange rates. Once steady exchange rates develop and the markets have worked through the contractual legacy and established a new contractual infrastructure, then the currency denominated contracts can be converted into a basket of monetary metals and then let loose to develop monetary preferences including financial media.

The current ECB structure has nothing to do with assuring European's welfare and everything to do with assuring the welfare of the Eurocrats, the national bureaucracies, the financial and industrial cartels, and the politicians that coordinate them in the guise of pursuing the "people's business" (which is only a minor consideration). Had the ECB and the process of EMU been something like what I suggest, they would have a credible path towards a "hard money" or free market regime.

Money can be used as a weapon if the other side is vulnerable; if one is using another country's currency for trade, and perhaps the same could be said for a gold standard system where there is a set peg of a leveraged artificial currency and gold. For this reason the markets within a nation must be free to respond to the shenanigans of foreign governments. One of the political reasons one should not yearn for the old gold standard is exactly the vulnerability that creates to other government's manipulation of gold supplies using their massive holdings. A free market standard could adjust to this easily enough. Furthermore, what the US can do with its gold is substantially irrelevant because it holds a small portion of the liquid gold in the markets, and gold is much less susceptible to supply dumps than you imply. Gold, when traded in quantity, is absorbed rapidly, at any amount sold, and with relatively minor moves in purchasing power.

Your pointing out to the 1920s and 1930s as having anything to do with a gold standard implies an erroneous view of the monetary system that collapsed. It was not a gold standard system, but a leveraged gold standard, where the degree of leverage was controlled and purposely expanded by government regulation and directly by government itself. Governments manipulated the credit system into expanding to such an extent that gold constituted under 5% of the money supply. Obviously that was not a gold standard.

As to the tying of one nation's well being with another's, it is inherent to trade that this would happen. There is no gain from isolation. Living standards are hurt horribly where this misguided concept of "self sufficiency" is pursued. The 30s are the perfect demonstration of this. The depression years are not at all a demonstration of any problem inherent to the gold standard, but were the inevitable result of (1) tariff rises, (2) income tax expansion, (3) increased government spending on "make work" programs, (4) increased government regulation on all levels local to Federal that made government a partner in business decisions and provided a massive business friction equal in its economic effect to pouring molasses on a hummingbird. (5) Monetarily, the banking system was made to expand credit, which was then purposely imploded in the interest of keeping the Federal reserve system (and thus the US government) from insolvency. The 30s in the US, and the pre WWI developments in Europe were nothing more than a naked power grab by governments over the economy. Once in power, they proceeded to make economic decision making into a political game, destroying the economies end making paupers of the people they claimed to aid.

Back to gold;

The absorption capacity of the markets for gold is such that all the gold in the CB vaults can be released and would be absorbed in a short while. Even paper gold is accepted in large amounts, a proven 30,000 tonnes of bank gold obligations exist (without measuring obligations wholly internal to the banking system, nor the portion that is unallocated gold accounts), of which 3000 tonnes per year were issued in the period 1995-1999. The total gold production and paper gold printing of today is more than triple and near quadruple that of the early 80s. The sale of gold by government is regarded by the markets as a sign of currency weakness. The London Gold Pool and successor gold price control projects have absorbed three times more gold than the US has remaining, and had barely managed to keep gold in a price range.

There is no security issue at hand in a free market gold currency, and no reason to believe that gold would be released by one government in order to attack another. The only reason one finds governments releasing gold from their stores is to defend their own currency, or to pay off an ally. No government would disarm itself of its ultimate purchasing power in order to attempt a destabilization of another. It is like hurling one's cut off head at the enemy, one can do it only once, and is likely to suffer more from doing so than the target.

You repeat over and over that governments need to use their fiat currencies in order to keep "Joe Average" fed and clothed. There is no function unique to fiat currencies that assists in keeping Mr. Average fed and clothed. Any such function is much better filled by gold and the other precious metals. The mere existence of the fiat currency takes substantial portions of Joe's dinner, and takes away his best clothes. There is no value whatsoever which fiat provides the "average" person. The only beneficiaries are the thin layer of high government bureaucrats for which all Joes slave, and the politician elected by Averages to the post of slave driver.

Joe Average's current behavior regarding debt accumulation is a function of his need to protect himself from the depreciation he expects of his future monetary income. The self-indulgence we refer to often, is that resulting from the habit of trying to outwit the monetary authorities and their coterie of hangers-on. Joe does not need or want fiat money, he seeks protection from it.


Finally, the separation of the wealth and trade functions of money into currency for trade and debt, and gold for savings is not desired, required, or of general benefit to the country that adopt it. The bulk of gold's purchasing power is derived from its use in trade. Gold obtains its premium when used in trade it is a premium over its wealth value. When gold is displaced from use in trade by law (the law that establishes fiat money), by fractional reserve banking producing fiduciary gold substitutes, or by dilution of the gold content in coin, its purchasing power is low, and it is hoarded as wealth. When gold is used in trade, it obtains such a premium as to eliminate the bulk of its wealth function, thus it is not hoarded when used in trade, but dishoarded.

It is dishoarded because of the premium it obtains in trade, where it finds its best use. FOA shows the significance of gold's use as a trade money – not a wealth money. (I believe his usage of the words is a reverse of my use, but the concepts we present are identical, gold serves best in trade, not as a hoard). Governments and bankers have forever attempted to gain for themselves the premium gold obtains in trade over the value it obtains as wealth – the same kind of wealth as a precious painting or bottle of oil.

Holtzman, Aristotle and others have fallen into the intellectual trap of impossible coincidence. Namely that gold can obtain its full value - its trade premium - without being used directly or indirectly in trade and therefore in denominating contracts and debt. Yes, a portion of the gold premium may be absorbed in credit expansion and the use of fiduciary substitutes instead of gold bullion, but this portion is minor and steady in relation to the gold stock, thus having a minor effect on its value (once the fiduciary portion is created, and so long as government does not encourage further credit expansion).

In short:
Gold can not soar to its ultimate value when it is not used in trade. Gold displaces currency once currency is destroyed and no currency is available as a credible replacement for previously accepted moneys. Gold, in the form of the dollar, displaced the Pound Sterling after WWI, and continued after the first US default in 1933 (an internal default in the main, since the dollar exchange rate abroad was not significant till the UK went off gold altogether). Gold made its way back to its full value in the late 1970s. Only when political agreements were made for the central banks of the rest of the world to absorb excess dollars, did the gold price stabilize and move back down. Now that the agreement is over, the excess dollars may not find a permanent home but must slosh around in the markets. There is no excess yet on the international dollar market, but for a short period at the end of last year (see prior posts on global dollar supply and demand statistics), when emerging market debt no longer provides a sink for dollar exports (as these debts are falling at a 7% rate), the dollar will decline in purchasing power abroad.

Understanding of Gresham's law is at the core of misunderstanding of gold's relationship to currency. Bad money displaces good money use in trade ONLY when markets expect gold to be available at a certain price: a par exchange rate. Otherwise, good money displaces the bad and is actively used in trade.

Gold is on the trade routes and obtains a great premium when used for trade settlement and denomination of contracts, and none is hoarded. Gold is absent from trade and is hoarded when displaced from use in trade by a "bad money", be it fractional reserve bank notes, low gold content coin, or imposed "legal tender" fiat money. All of the bad money alternatives collapse at some point, this point of collapse is that of a break market confidence in the availability of gold at the official or historic exchange rate (or range of exchange rates) considered the par value.

E-Gold has already demonstrated that settlement costs are lower for gold accounts than for fiat money credit accounts, because of the lack of a need for estimating creditworthiness, the absence of the credit allocation process within trade settlement, and the absence of default within a fully backed gold settlement system.

714Belgian, real quick...#4940903/05/01; 11:12:41

...I wasn't aware of the Sultan's vast fortune in gold. I think you have a very good point about being in the dark, though even in the dark, one can develop the sense to find one's way. Fwiw, the Saudis were not the only ones to be paid royalties in gold. Iraq, Kuwait, and Iran all had gold royalty arrangements with Aramco's British counterparts.

I must go...

SteveH714#4941003/05/01; 11:16:05

Thanks for responding. Regarding oil and gold relationship. If we could ask HBM or RossL to repost those charts that show this relationship over time, I believe we could agree that their must be some sort of relationship to get the charts to perform the way they do. Just an observation.
Wild HareDear Panda#4941103/05/01; 11:16:20

I respectfully request that you properly use the "Optional Link" field in the forum so that we may actually "get there from here". Enter the link only, without the parenthetic commentary, or else it's a dead end.
PandagoldWild Hare#4941203/05/01; 11:34:56

Sorry about that. It has been mentioned before. It is just me, sometimes I don't know what the actual web address is when I have got it from a roundabout way. Sometimes when I have give say 'fallstreet's' web address, the particular item has been removed.
Pandagold714 and all interested in Arabs Gold and Oil#4941303/05/01; 11:42:33

First let me say 714 I am very much smiling. I don't think that we disagree, it is just that we are not reading each other's point correctly.

Anyway, if any of you want a wealth of information on the subject go to www.google.com and type in the search 'Arabs Oil and Gold price'. You will have enough stuff to keep you happy for hours. It is VERY well covered.

SHIFTYComex Mkts To Open 2 Hrs Late#4941403/05/01; 11:43:28

http://www.thebulliondesk.com/DJNews/4428469.htm

*DJ Nymex Energy Mkts To Open 1 Hr Late At 10.45 AM EST Tue


(MORE) Dow Jones Newswires 05-03-01

1725GMT

*DJ Comex Mkts To Open 2 Hrs Late, From 10.10 AM EST Tue

(MORE) Dow Jones Newswires 05-03-01

1728GMT~200103051725
-----------------------------------------------------------
This is all I can find on this.
$hifty

SHIFTYHere we go#4941503/05/01; 11:57:18

snow day

1726 GMT (Dow Jones) Nymex will delay the opening of all Exchange metal markets by two hours Tue due to anticipated transportation delays arising from snowstorm. (BWH)

1632 GMT (Dow Jones) Nymex to close early Mon at 1 PM EST (1800 GMT) as a snowstorm pummels New York, spokeswoman said. Also expected to close Tue as heavy snow, freezing temps seen continuing. (MSX)

SHIFTYRandy @ theTower #4941603/05/01; 12:00:58

Can you drop an e-mail to Sir Farfel to see if he is still among the living?

$hifty

OROPandagold, 714, Tree in the Forest - oil and gold#4941703/05/01; 12:31:44

Oil does not need to settle purely in gold, only the portion "saved" by the powerful few needs to be. Thus the bulk of funds and barter assets used to settle oil payments do not need to be gold.

As for the WWII methods of converting the excess portion of dollars and pounds sterling into gold, I suggest you look to the Jiddah gold market of the time, where gold traded at double the official US dollar rate. Obviously, someone was massively converting dollars to gold.

What the gold savings rate is for the Saudi Royals and their hangers on, or for their neighbors, is not answerable with certainty. But rest assured that it would be somewhere around the 8% minimum, or above. Also, you should not be surprised to find gold traded at different prices to different sellers and buyers, as was the case many times in the past, be it at Jiddah or in London after the gold pool closed.

The involvement of central banks in the bullion banking business is similar to their involvement elsewhere in the financial markets. Their role is only as "insurance"; to provide liquidity to the markets as lenders of last resort, and to dictate the interest rate (lease rate) from below. They lower the percieved risk in lending out gold and lend it out when tapped in order to maintain market confidence in the paper gold outstanding. As prices are derived at the margin, so is the gold interest rate. Only when gold liquidity is lacking at the lease rate dictated by the central banks, are they tapped to lend out bullion. Even then, they are only required to provide just enough to keep prices and gold interest rates from rising above the point threatening the solvency of "important" market players that are short.

The role of the central bank is to induce gold credit, not to provide it. The central banks do so by undercutting market rates; promising (rather than actually delivering) gold at a particular interest rate, quantity, or price. CB promises (and gold miner's gold obligations) are used by the bullion banking system as a reserve, and are leveraged by the routine 2.5 to 4 times, at the least. The paper they print up is used to replace the physical gold holdings of some, who then provide that gold to the markets. When you buy a gold call or futures contract and put the rest of your dollars in a treasury note, you have substituted paper for physical gold. Thus your demand for cash gold is eliminated from the bullion market, and moved to the paper arena where it is provided by the simple printing of a contract. The banker or hedge fund selling you the contract needs only to hedge as dictated by the delta calculated from models. Therefore, your purchase of paper gold removed the whole of your demand from the gold market, and replaced it with a contingent demand derived from the need to hedge. The hedges themselves, are mostly derived from the obligations of other banks and the promises of CBs and gold producers. The only portion that must be provided in bullion is that which only physical supply can settle; demand for jewelry, bar, coin, and industrial gold. Since investment demand is answered mostly by paper obligations, all that is necessary is to prevent the markets from moving into physical. The only reason the markets would move into physical would be that there is fear of the gold contracts not being filled. Propaganda is sufficient to prevent loss of confidence most of the time. The rest of the time, minor amounts of physical gold (relative to outstanding paper) must be provided to the markets so that defaults do not occur when a gold delivery obligation is due but the indebted party has insufficient gold. At this point, only the shortfall need be covered, and there is also the possibility of buying out the creditor with an alternative that is sufficiently attractive.

Thus the system may remain stable so long as gold can be displaced from current holdings, on the one hand, and demand for physical displaced with paper supply on the other. The danger is that of escalating growth of gold obligations, and the loss of confidence in solvency of those printing them. The cures are (1) restructuring of gold delivery obligation schedules to fit within available fresh supply, (2) the sale of gold by holders who value the stability of the system more than their gold (i.e. central banks) and are willing to lose some or all of what quantities they lend, (3) exchanging certain delivery obligations with contingent ones (replace futures with calls), in the hope that they expire unexercized.

We have seen all three strategies followed, confidence in the availability of gold to fill obligations is still high, and general default is still considered unlikely anytime soon. The gold deficit, at an official 1000 tonnes per annum, and my estimate of over 2000 tonnes, is being filled with only minor fluctuations in price by displacement of private gold holdings with paper backed by central bank lending promises (1/4) and by CB sales (1/4), the balance being backed by producer forward selling of their gold production many years into the future. New paper gold demand has dried up as discussions such as our own on this forum have brought many to buy physical rather than paper. However, many of the prior paper buyers had not the cash on hand to buy the whole amount at the market price, thus the amount of paper gold that can be bought posting 10% margin is not equal to the amount of physical gold that can be purchased at 100% cash payment. The few who have the whole cash balance on hand, can do so, the many who don't will buy 1/10 to 1/5 in physical relative to what they would otherwise have bought in paper. Thus for each 10 ounces diverted from paper, one would expect 3-4 ounces to be bought in physical (using the 20 80 rule).

This will continue so long as the international markets are short of dollars. When the moment arrives where these markets receive more dollars than needed to cover debt obligations, the portion of global buyers having dollars on hand will grow, as will the demand for physical gold over the demand for paper.

Mr GreshamORO (03/05/01; 11:05:57MT - usagold.com msg#: 49408)#4941803/05/01; 12:42:41

So THAT'S what you were working on all weekend!

And I let my reading go, thinking I would catch up on Monday. Procrastination punished.

I propose a new pronunciation for the word "thOROugh" and its relative, "thOROughness", in your honor.

Stocks, Lies, and Ticker TapeHill Billy Mitchell,.....I also second The Stranger's post #49230 for the HOF#4941903/05/01; 12:49:06

His post was short and concise. I was able to understand it to the point of taking action. I appreciate that very much. Thanks again Stranger.
Mr GreshamOro#4942003/05/01; 12:54:30

We have cheated ourselves of an "ORO PAGE" long enough. Randy? I know it's a big (BIG) job, but this level of scholarship freely given to us ought not to be lost in the daily rollover into Archives.
OROAll, Mr. Gresham - apologia#4942103/05/01; 13:00:33

I just read my posts and must ask forgiveness for the low quality of the work - particularly on the post to Holtzman.

I will only excuse myself with the explanation that I was on vacation and had little time to write, as well as this time being restricted to short periods in the wee hours of the night.

Hopefully, the ideas come through despite the horrid writing quality and disorganization.

714I couldn't resist stopping in for a peek...#4942203/05/01; 13:13:03

http://home.att.net/~strat.gt/secret_history

...Oro, you are correct that the exchange rate for gold in Jeddah was $70 both during and after WWII, more than double the official rate. And I was well aware gold traded at wildly varying rates on different exchanges during this time, particularly in Asia.

But nobody was massively converting dollars to gold in Jeddah during this time. Why? There were NO dollars in Arabia at that time. The House of Saud was running massive deficits, even borrowing money from Aramco to stay afloat, their only source of income being the royalties. Saudi finances were quite a mess at that time and the King was heavily in debt. And there were no "petrodollars" yet, because the scale of the oil business was yet rather small, generating only a few million dollars in royalties every year. Not only that, Aramco was, at that time, 100% owned by Standard Oil of Texas and Standard Oil of California, thus generating no corporate revenue for the Saudis. In fact, the Saudis did not even begin taxing Aramco until '49 or '50! So the fact the exchange rate in Jeddah was twice what it was in NY and London was irrelevant. THERE WERE NO US$'s THERE FOR GOLD! Again, all this is documented in the 70 pages of documents to be found at the above website. It's a much easier read if you print it out, as I had to sacrifice some quality to keep the file a manageable size.

For those of you unable to access the site (AOL users), drop me a line at This email address is being protected from spambots. You need JavaScript enabled to view it. and I will forward you the document. It's a .pdf file about 1.7 mb's so it's a bit of a load on a phone modem.

Mr GreshamOro#4942303/05/01; 13:35:00

"Hopefully, the ideas come through"...

We understand: it's a book-in-progress. Like I said before, Oh, to be your editor.

Economics writing is an attempt to linearize (?) flow diagrams that should be two- or three-dimensional. One can pick out a small two- or three-variable relationship for description in words, but no paragraph can hold the entire model up for observation.

As a result, one is always wondering what hooks to outside concepts are being short-changed or ignored in any paragraph of economics writing. You, Oro, succeed in referencing more of those hooks to the larger model in many of your paragraphs, while maintaining readability, than I would expect to see.

This allows me to engage my thought processes for longer runs before hitting bumps of not-understanding, or questions of my own (content to be put off till second or third readings). Even where I disagree with or would challenge your model, I am satisfied to read on, for you are gettting your ideas out clearly. At least, as clearly as one mind can suppose to know the clarity of another.

Randy (@ The Tower)Fed continues to add temporary and permanent reserves at impressive pace#4942403/05/01; 13:37:01

http://biz.yahoo.com/rf/010305/nat017636.html

From the activity, one might think we were once again on the uncertain side of the Millennium Date Change.

Although the size of the Fed's outright purchase of Treasury securities to add permanent reserves has not yet been disclosed by the newswires, this article summarizes the details of the two morning additions of temporary reserves to the banking system. With the fed funds market trading just 1/16th percent over the FOMC target, the Fed added $2.0 billion via 28-day repos, and another $4.0 billion through overnight RPs.

Here you can see an endless supply of new paper currency available on an as needed basis to reliquify the commercial banking sector to "save" the system against any threat of a deflationary collapse and the attendant cascade of bankruptcies. (Yes, the banking system will be saved at the expense of the currecy unit's "strength".)

But as should be clear from ORO's fine summary in his recent post (msg#: 49417), this commercial banking structure stands in stark contrast to the bullion banking sector in one important regard. While it is true that the funds used in both systems expand as "ledger entries" through such normal banking activities as borrowing/lending, the important distinction is that the bullion banking system does not have unlimited access to a "lender of last resort" at such times when the lending cycle may turn deflationary. (Central Banks can only extend their physical gold so far, and happily, the Washington Agreement shows the resolve to function in that capacity is waning.) In the arrival of that dark hour for bullion banking, you will either have the benefits of physical gold in your ownership, or you will have paper gold promises which are very similar to the failing paper dollar from which you had sought safety (a paper investment situation we describe as "out of the frying pan and into the fire").

Again, if you have gold in an unallocated account that is made available to its custodians for leasing (for a quid pro quo of either cheaper storage costs or for nominal interest returns), then you really don't have gold either. Rather, you have just a ledger entry (paper gold) and, I might add, too much confidence and exposure in an overextended system. You have been warned.

JourneymanFor lack of a yardstick, the argument was lost . . . @Pandagold & 714, #4942503/05/01; 14:04:43

I was going to refrain from posting this week, but . . .

The basic problem with the world economy - - and many other
processes - - is failure to use the universal yard-stick to
measure things. It isn't that the yardstick isn't available,
it's just that TPTB have gotten us all in bad habits. Habits
nearly guaranteed to keep us all confused for the forseeable
future if we continue them.

In the past, gold proved itself the natural universal yardstick.
Yet rather than thinking and saying 262 dollars are worth one
gold ounce today, we say one gold ounce is worth 262 dollars
today. As if the dollar were the yardstick.

This is like trying to measure how much the shore is moving up
and down from the bucking deck of a ship on a stormy sea.

You look across the heaving deck and see the euro moving
relatively downwards, riding a neighboring wave. If you look way
down over the rail into the trough, you see the Turkish lira
foundering. (You've heard a rumor that divers were looking for
the Ecuadorian Sucre somewhere in this area.)

Similarly you see that oil tanker. While seemingly vibrating up
and down on the waves just like the other "ships," you wonder how
it has stayed so much in sync with the apparent up-and-down
motion of the golden shore. You see the name "M.E. OIL" out of
Dubai. You call the Arabic captain and he explains: "Our goal is
to keep in sync with the shore as much as possible."

You get the idea.

Once folks begin to price things in gold-weight units, as they
can do on-line through things like e-gold.com, we'll switch from
ptolemaic economics to auro-centric economics and things will be
much easier to understand and predict.

Regards,
Journeyman

P.S. The Ptolemaic system was an early very complicated model
used to explain the observed "retrograde" apparent motion of the
planets. It was replaced by the helio-centric (sun-centered)
model, which stopped assuming the earth (rather than the sun) was
the center of the universe. This made the solar system much
easier to understand.

ORO714 - an economists answer#4942603/05/01; 14:26:05

Re: Dollars and gold in the Saud household of WWII.

Well, yes and no... Depends on what "is" is...Who "they" are...

The hangers on to the house of Saud were sucking both Saud and Aramco in the way of the vampire. They were the converters of dollars to gold. Their income came from exclusive license and monopoly contracts with suppliers to Saud, Arabia, and Aramco, which gave them up to 80% margins on key supplies and services. The well documented financial sclerosis of the Saudi Royals and their government is not an indication of the Saudi "establishment" (and other oil royalty establishments around the globe) being in dire straits. A portion of the oil company revenue, about 1/4 to 1/3 was spent locally and much of that was the profit margin of the local "establishment" that kept the royals in power and profited from that power.

These people's gold buying with dollars was the cause for gold prices being so much higher in Jiddah and various markets than official values.

BelgianDear Sit ORO#4942703/05/01; 14:29:37

Please, allow me to say that I don't understand what you are trying to communicate. It must be surely me and for this reason, I hope, I am not offending you in one way or another. I can't even explain "what" I don't understand. Is there a possibility of simplifying your precious insights ? Apologise my impertinence. Thanks
axGold Reserves/ GNP Ratio#4942803/05/01; 15:38:14

Just as the amount of physical gold an individual investor should own should be proportional to that investor's total net worth, each country should have gold reserves in proportion to their Gross National Product.

The U.S. with its huge GNP had a much larger ratio of gold reserves/GNP in 1960 than it has now. U.S. Central Bank Gold reserves should be raised proportionally to the increase in GNP since 1960.

Belgian mentions the relationship of above ground gold/ world gnp(see post Belgian (03/05/01; 10:50:31MT - usagold.com msg#: 49406) Also see AX post
ax (2/24/2001; 17:57:46MT - usagold.com msg#: 48889)
INCREASE U.S. GOLD RESERVES

AX

714Thanks, Oro...#4942903/05/01; 15:49:42

...but that seems to contradict much of what I have if I understand you correctly. The lack of liquidity in the Jeddah gold market is well-documented in a number of works. Try "Oil, God and Gold" by Anthony Cave Brown.

Interestingly enough, at the end of the war, the US government stepped in to help the Saudis out of their liquidity mess by making a large silver loan, then minting the silver into riyals, so there would be a circulating currency for that country.

According to my sources, the King's biggest expense far and away was his household which consisted of 120+ wives, another 100+ concubines, and all their children. His household expenses alone were $5 million a year (and this is in the 1940's). And then there was the expense of maintaining lessor sheiks, no doubt.

But I don't recall in my research Aramco taking issue with contractors and suppliers, with the exception of labor. I had the impression they were a pretty tightly run outfit that imported most of what they needed, refraining from much dealings with the Saudis, save for labor. Where do you get your figures? For instance, the 1/4 to 1/3 was spent locally (of course, that's almost a standard breakdown for labor in many businesses). Can you be more specific? And what are your sources?

Tia.

Orville Goldenbachersomebody said....#4943003/05/01; 15:55:24

There is $1,000,000,000,000 (one trillion) worth of gold (already mined) in the world.

which is roughly 3,846,153,846 ounces ($1,000,000,000,000 divided by $260 spot pog).

There are currently 6,000,000,000 people calling planet earth home.

this means that there is only .641 ounces of gold for each man, woman, and child alive. (3,846,153,846 divided by 6,000,000,000)

does this figure sound right?

Orville Goldenbachersomebody said....#4943103/05/01; 15:55:32

There is $1,000,000,000,000 (one trillion) worth of gold (already mined) in the world.

which is roughly 3,846,153,846 ounces ($1,000,000,000,000 divided by $260 spot pog).

There are currently 6,000,000,000 people calling planet earth home.

this means that there is only .641 ounces of gold for each man, woman, and child alive. (3,846,153,846 divided by 6,000,000,000)

does this figure sound right?

Tree in the ForestUSAGOLD#4943203/05/01; 15:56:53

March 14 should be very interesting. I have been opining that this BOE auction will be the last. If they announce this on the 14th, it is unquestionably capitulation. If on the other hand they play the old bankers game, (thanks for this info sir ORO) they will maintain the charade right up to default. They would announce a third series of auctions with the next one late in May and cancel the auction just beforehand. With Comex open interest for April still at 80,000 contracts there is still the possibility of default on April contracts.
Buena Fe(No Subject)#4943303/05/01; 16:14:47

test
Old YellerAll animals are equal,but some are more equal than others. #494343/5/2001; 17:20:02

ORO'so good to see you back,especially after the events of the last two weeks.

I feel we all have,in varying degrees,grown to accept and try to work around the background machinations in the gold market.Seeing your statement:"Only when gold liquidity is lacking at the lease rate dictated by the central banks,are they tapped to lend gold bullion.Even then,they are only required to provide just enough to keep prices and gold interest rates from rising above the point threatening the solvency of "important" market players that are short.",put in such a concise and revealing fashion,however,triggers the outrage of the ethical and deceitful imbalance of this situation.

I live for the day when central banks will be accountable to all people;both in their country of domocile and to the world at large.Thanks to people such as yourself,hopefully that day may arrive sooner than they expect.

silvercollectorHere's to Another/FOA#494353/5/2001; 18:19:23

http://www.polyconomics.com/searchbase/les9.html

"The circular flow of dollars between the U.S. and Europe formally ended on August 15, 1971, when Nixon broke the US promise made at Bretton Woods in 1944, to keep the dollar at $35 per ounce. Because the rest of the world was tied to the dollar, when we broke the link, that linkage was severed for all currencies. The dollar gold price quickly advanced, first to about $70 at the end of 1971, then up to $200 at the end of 1972, then drifting back to $140 for the first part of ‘73. The Arab oil companies had been selling us oil at $2 a barrel, and in 1973 they realized they were being cheated at that price, which would mean it would take four times as much oil to buy an ounce of gold with the dollars they were receiving. So they announced they would quadruple the oil price."

-End snip-

Well, well, well; "Cheated at that price"

So now with overvalued dollars they must 'feel cheated again'. Raise the POO and "keep the price of gold down if you want to see oil flowing at reasonable prices"

Now where have I heard that!!!

ORO714 - indeed - on labor - on thin markets - and trade in privilege#494363/5/2001; 18:22:26

I read Brown's book and used his info and of a couple of his references from which quotes are available on the net. I ran searches on authors of some of his reference to find info, and had enough to use.

The thinness of the Jiddah market, even by the standards of that day, is not an indication of the conversion volumes, because those would have been outside that market precisely because it was thin. The point is the price. A 100% pricing discrepancy is alot of room for arbitrage on something as dense in value as gold, even in war times. If the price held for so long, then it was so because that was the market clearing price that had dollars and sterling exchange for gold.

As for the dollars leaking out of the oil company budgets, Brown provides some idea of the labor and local expenses, but no square figures. The congratulatory book celebrating Shell's centennial in 1997 written by Stephen Howarth, "A Century in Oil", also provides some insight as to local spending.

As to the value of the Saudi court, including its various hangers on, to the US and Aramco's then undisputed owners, it should be obvious that the undertakings of the US and Aramco to liquify the Saudi barter economy with coinage, and otherwise develop the country as a whole, were not done out of charity, but as part of the continuously escalating costs of doing business with this group - which ended up being the capital of Aramco in the 80's, when it was "sold" to the Saudi government.

Meaning that the US investor's interest was always threatened, and in WWII, when no forces could be spared for "taking care" of these threats, the US interests simply paid up what was necessary to make the oil flow. If it was a railway, a silver coinage system, military assistance, or anything else, it was just a cost of doing business. The US government's idea of the business was (and remains) the continued flow of oil, and that of the oil companies was the continued control of supplies to sell. The cost of maintaining oil flow were met, or the multiple costs of occupation would be considered the alternative, not least of which is the enmity of the actual customers of Arab oil in Europe and Asia.

The supply cost estimate was taken from an old (1954?) petroleum handbook from the local State university library, and Brown's book. Brown shows the relationships within the court, and how they were used by the hangers on to obtain trade concessions that were, in turn, used to extract much money out of Aramco beginning in the 40s, and accelerating as time went on.

On a general note:

The particular arrangements for payments of royalty should be seen as part of a whole picture, one in which dollars flow in and out of Arabia and its Gulf neighbors, and gold accumulates both at home and in vaults abroad. The payoff does not usually come into the the recipient's country in whole, but just in part; often a minor part. There is no reason to expect to see these payoffs, be they royalties or bribes, in the official economic numbers, nor to see them spur local economic development. Often, the economic development takes place outside the courtier's land, where he and his employees spend their money and hold their assets and investments.

It is not as simple as paying official royalties to the state. The state was nearly non-existent when the arrangements started, and is still largely controlled by a narrow segment of Saudi people, who are paid off in the traditional manner of the place ("bakshish") in order to make state decisions favoring one interested party or another. The state is most nakedly the private domain of the elite in Arabia. The courtiers are not at court just to bend down their necks in recognition of the king's glory. The kingdom was Saud's private property, and the concession his to give. Unlike a private individual, he also had the power of the state to force law and policy in favor of his private interests. Courtiers were charged to keep the King in power and in return got positions of power that could be sold. Without this kind of trade in state power, not the Saudi royal house nor any other ruling individual or oligarchy could rule.

silvercollectorThe last sentence is the topper!!#494373/5/2001; 18:38:28

Same link

"The dollar gold price quickly advanced, first to about $70 at the end of 1971, then up to $200 at the end of 1972, then drifting back to $140 for the first part of ‘73. The Arab oil companies had been selling us oil at $2 a barrel, and in 1973 they realized they were being cheated at that price, which would mean it would take four times as much oil to buy an ounce of gold with the dollars they were receiving. So they announced they would quadruple the oil price. When the Federal Reserve kept pumping dollars into the banking system to accommodate the rise in the oil price, gold went from $140 to $280, and the Arabs doubled the price again"

-End-

So the FEDs are pumping dollars again 'cheating' the Arabs again; can we expect further increases in POO?

Ticked at $2, (cheated in buying gold) so they quadrupled to $8, then (cheated in diluted dollars) so they doubled to $16.

So today TPTB are keeping one side of the equation (low gold) but failing on the diluted currency which buys their oil.

So here we are with a miserable, overvalued buck selling/leasing the physical away.

HAVE A GOLDEN DAY.

silvercollector(No Subject)#494383/5/2001; 18:54:28

http://numismaticgoldcoins.com/wormartod.html

"There are MANY around the world that know of the historical oil/gold price relationship. Especially the Arabs. They may have kowtowed to the Clinton Administration in recent years and refrained from buying gold. As the price of oil takes off and with the dollar so fundamentally overvalued, it will be hard for them to refrain from buying gold. They will have the money to do so and the incentive. A sharply rising gold price in early November could be the Achilles Heel of the Democrats"
nickel62Hello I need some help from the members...#494393/5/2001; 19:26:09

I have a long time friend who would like to buy 150 ounces of gold in his IRA to replace his devalued tech stocks. He nor I can remember if that is legal. I think I remember that American Eagles were allowed to be an investment in IRAs. Can anyone help me and our gracious host who will be receiving the order?
Randy (@ The Tower)Nickel62, as stated in the right-hand column of the home page, "Precious Metals IRAs Available"#494403/5/2001; 19:39:57

And at the lower portion of the right-hand column of MK's Commentary & Review page, he has this to say...

"Please call Centennial and ask for George Cooper if you would like to move IRA funds into gold. Rollovers available. Good program. With gold at 22 year lows, here's a good way to preserve stock market profits, or diversify if you are taking a hit in your retirement plan."

So, in simple answer to your question, Yes...this is legal. Thankfully, Americans have many freedoms (and it is up to each person to keep them well exercised). Thanks for considering Centennial for your portfolio's metal needs!

OROBelgian - questions#494413/5/2001; 20:03:43

I noticed your post, and I am sure you are not alone in finding my writing rather more opaque than enlightening.

If you don't mind, I suggest you write up a few questions of principle on the issues I write about and I will try to answer them as clearly as I can.

This should serve both of us well.

Old YellerWho owns the title?#494423/5/2001; 20:24:52

I'm sure this question is redundant,but I'm in need of a refresher.In the event of a hedged mining company's bankruptcy,does the property title revert to the bullion bank?Is this clear-cut,especially in a country like Australia,which appears to be so massively over exposed?Or is it a legal black hole that would force central bank physical gold liquidation in order to stave off a total gold derivative meltdown?
Chris PowellWhite House aide replies to GATA#494433/5/2001; 20:38:50

http://groups.yahoo.com/group/gata/message/694

... and a big gun in South Africa enlists
in the GATA cause there.


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.

Chris PowellToronto mining conference to hear from GATA#494443/5/2001; 20:39:33

http://groups.yahoo.com/group/gata/message/695

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.

AELfrom the far side#494453/5/2001; 20:57:01

http://groups.yahoo.com/group/gang8/message/3291

From: "Henry C.K. Liu" <hliu@m...>
Date: Mon Mar 5, 2001 11:20pm
Subject: Value of US$

US Government debt: $5,726,774,439,028.95
US Gov. gold holdings: 261,000,000 ounces

POG required to pay back gov't deb in gold = $21,941

Market Price Friday March 2 2001: $262.70

Interesting........

Henry C.K. Liu

R PowellLeMetropoleCafe#494463/5/2001; 21:12:13

http://www.lemetropolecafe.com/guest.cfm

A good fellow who calls himself uponroof at the other castle (G-E) alerted those listening of a free two week guest membership at the Metropole Cafe. I followed the link and got in after filling out a few forms and recieving an access number from the Cafe by e-mail. I'm now allowed in and can wonder about without an escort to listen but not speak. Speaking is still a privilege reserved for members only. I believe it may have been Twain who said, "Never give advice, a wise man doesn't need it and a fool won't heed it". I'm always interested in the thoughts of the man who listens but rarely speaks. I have never presented myself in the presence of others where expressing one's thoughts were forbidden or, to be precise, one has to pay to have the right to speak. It's a little strange.
The guest pass is free and there are indeed many hours worth of interesting reading there so I've inclosed the link. Just remember, it's like being in church during the sermon- NO TALKING ALLOWED!
Rich

R PowellSecond link try#494473/5/2001; 21:14:50

http://www.lemetropolecafe.com/guests.cfm

Maybe this is it?
714Oro...some questions...some answers...#494483/5/2001; 21:32:03

First the questions, which follow some of your statements:

"The particular arrangements for payments of royalty should be seen as part of a whole picture, one in which dollars flow in and out of Arabia and its Gulf neighbors, and gold accumulates both at home and in vaults abroad."

What money was flowing into Saudi Arabia besides royalties? Yes, we have local payrolls (at third-world pay rates, no doubt), and some Saudi suppliers, but what else? I thought I painted the broader picture in my #49422.
-----------------------------------------------------------
"A 100% pricing discrepancy is alot of room for arbitrage on something as dense in value as gold, even in war times."

Where would King Saud, head of a remote and primitive desert kingdom, or his court/government conduct such an arbitrage? Or for that matter, the hangers-on or whoever else you imagine would conduct this arbitrage? You seem to be assuming modern market mechanisms were in place at that time in Saudi Arabia. They weren't! Not only that, there was no gold trading in NY or London during this period. Remember LBMA was closed during the war and there was no gold trade at that time under US law. For instance, we know Aramco went to the LBMA went to LBMA to buy gold, under special dispensation from the US government, to buy sovereigns for these payments before the war.
-----------------------------------------------------------
Who were these hangers-on? I've never seen Brown refer to "hangers-on", or any other such references that use such a term. Could you be more precise?
-----------------------------------------------------------
"The thinness of the Jiddah market, even by the standards of that day, is not an indication of the conversion volumes, because those would have been outside that market precisely because it was thin. The point is the price."

Really? A thin market is not indicative of conversion volumes? Since when? I think it's safe to say that the dollar price of gold reflected the expectation of inflation (typical during wars) and that country's increased supply of US$ (tiny by today's standards) relative to gold. What Saudi moneychanger would particularly want this strange new currency, from a country that for all they knew, would lose the war? A thin market indeed, very thin. In every way.
-----------------------------------------------------------
"The US government's idea of the business was (and remains) the continued flow of oil, and that of the oil companies was the continued control of supplies to sell."

Well, if you read a bit more closely, you might realize the US government was very much at odds with Aramco on a number of issues. In fact, it was the US Navy which desired this oil more than any other government entity, for obvious reasons. In contrast, the State Department let Aramco know in no uncertain terms they were opposed to the building of the Dhahran-Riyadh railroad.
-----------------------------------------------------------
"The state is most nakedly the private domain of the elite in Arabia."

Has anything changed? Fwiw, you never did address the debt problems King Saud himself faced. They should be obvious in any read of Brown's book, where he commented on them extensively.
-----------------------------------------------------------
"I ran searches on authors of some of his reference to find info, and had enough to use."

That is too bad. I NEVER feel I have enough to use.
-----------------------------------------------------------
I fear I've burnt up too much of Mr. Kosares' bandwidth on this issue over the last few days. I'll leave you with the last word for now. I'll be back in a few days or weeks, maybe months.

Salaam (peace).

R PowellWA and BIS's rumored gold imput#494493/5/2001; 21:41:07

From ORO (49417) and mentioned again by Old Yeller,
"Only when gold liquidity is lacking at the lease rate dictated by the central banks, are they tapped to lend out bullion."
Speculation has mentioned the BIS as the sourse of this just in time sourse of liquidity. Whether by sales or by leasing, is this increase enough to break the limits set by the Washington Agreement? Was the BIS one of the fifteen signature members of the agreement? If so, should we now assume the agreement has been broken or are we going to hear of revised figures or changed timetables such that the BIS's gold imput is somehow not a violation of the Sept. 1999 accord??
TIA for any thoughts. It's nice to be able to ask questions. Good way to learn!
Rich

ORO714 - comments on your 49448#494503/6/2001; 1:23:33

Thanks 714 for your comments and questions. I very much appreciate your work and this discussion. The Arab oil countries and the house of Saud are not the core of my work, but have a significant bearing on it. Therefore, I stop looking when I have enough information that bears on my work. I can't emphasize enough the importance of the kind of detailed work that you point to and do yourself, but will warn of a couple of routine problems.
First is that of believing official positions, data, laws, etc. in a world as informal as that of Saud and even of today's Arabia. Think of it instead as a Mafia organization with the Saudi government being just one of its "fronts". Granted, that is where you will find official documentation. But this paperwork is nothing but an artificial record to cover up the reality of action and motive, not a source from which it may be revealed as written.
Second, the basic motives and principles of economics don't somehow disappear when they come into conflict with official law, institutions, and bookkeeping. They remain in action and over time will subvert completely any alternate intent. The stated purpose of an official government action is most commonly unrelated, or opposed to the actual motives of the people who arranged it. Often, this is also true of official organizations such as corporations.


Oro: "The particular arrangements for payments of royalty should be seen as part of a whole picture, one in which dollars flow in and out of Arabia and its Gulf neighbors, and gold accumulates both at home and in vaults abroad."

714: What money was flowing into Saudi Arabia besides royalties? Yes, we have local payrolls (at third-world pay rates, no doubt), and some Saudi suppliers, but what else? I thought I painted the broader picture in my #49422.
-----------------------------------------------------------
For example, in chapter 5, Brown notes the advance Saud requested from FDR of $6 mil per annum (4 mil oil barrel's worth per year, or $120 mil of today's dollars), and of Aramco's fear of Saudi expropriation of the concession in favor of British interests. State department mistrust of big oil and primitive despots brought them to push the job of Saud's support onto the Brits, who gave $40 mil ($800 mil in current dollars) over the period 1943-4. Aramco's situation (pg 107) was described by Brown as "'subjected to a squeeze play between the Saudi Government and Britain’ in which both were pressing the company to the limit."
Though Brown never specifies what it was that was "squeezed" out of Aramco, we can be sure that it included cash dollars gold and goods. As Brown writes in page 109 that Ibn Saud had in Dec 1942, while pleading for money to run his administration claiming that he is nearly broke, displayed "conspicuous wealth" to the US delegates who came to meet him. Included in the display, according to CJ McIntosh of the US delegation, was a 5000 American car caravan including Saud's brand new personal custom Packard with external handrails for guards to hold while hanging on to the car. The crown prince alone took 500 cars to move his household, and each princess had her own little fleet of curtained black limousines and hundreds of attendants. Obviously there was no shortage of cash (or goods) flow coming in.

On pg 115 Brown says Col. Eddy, the US representative complained to a congressional delegation of the English representative Laurence Grafftey Smith supplying American trucks, Jeeps, gold, food and other lend lease materiel in order to take the Aramco concessions.

By 1943, the State department resistance was overcome and funds flowed from the US government to Saud's variously labeled pockets, and from there to his various suppliers, friends, etc. The Brewster commission report (see Brown pg 170) indicated $100 mil of support to Saud by the end of WWII. With the British support, we have $140 mil, that on top of the royalties.

By 1950, 546,703 barrels of oil per day were produced in Saudi, and production was substantial by the end of WWII, approaching 300 thousand. That was quite a neat bundle of revenues to lose, wasn't it? $200 mil per year? As Aramco had to constantly protect itself from expropriation and odd maneuvers such as the Onassis attempt at gaining shipping rights, it was repeatedly raided by the Royals and their court for bakshish.

Second point is that the funds did not come "into Saudi Arabia", but into the hands of the Royals and their court who did not bring this money into the country. More likely, whatever funds did arrive in dollars were quickly removed from the government and the court to the separate treasuries of Saud and each of his princes and courtiers.
----------------------------------------------------------

ORO:"A 100% pricing discrepancy is alot of room for arbitrage on something as dense in value as gold, even in war times."

714:Where would King Saud, head of a remote and primitive desert kingdom, or his court/government conduct such an arbitrage? Or for that matter, the hangers-on or whoever else you imagine would conduct this arbitrage? You seem to be assuming modern market mechanisms were in place at that time in Saudi Arabia. They weren't! Not only that, there was no gold trading in NY or London during this period. Remember LBMA was closed during the war and there was no gold trade at that time under US law. For instance, we know Aramco went to the LBMA went to LBMA to buy gold, under special dispensation from the US government, to buy sovereigns for these payments before the war.
-----------------------------------------------------------

Gold continued trading in Hong Kong, in Cairo and Alexandria, in Casablanca, in Switzerland, Lisbon, Madrid, and even in London proper. That no official trading occurred is no indication at all as to whether such trade had taken place. The arbitrage I speak of is bringing gold to the holders of dollars anywhere in the world from where gold could be had at the official price, notably from the DeGaulle government in exile's funds in Canada, from the Dutch gold in the US and Canada, and from the central banks of neutral countries that could exchange dollars for gold. The gold could then be delivered to Saud and company with no more trouble than encountered in bringing him 5000 cars.

Arbitrage is older than the COMEX or the MERC or the LBMA, or the Chicago and Kansas grain futures markets. It is a fancy term for the common practice of using price discrepancies between two markets for profit.

As for the primitive Saud, he had Philby on his side among Western educated people to keep him informed of his options and of his interests (all, of course, for goodly fees).

The LBMA was not yet in existence.



714:Who were these hangers-on? I've never seen Brown refer to "hangers-on", or any other such references that use such a term. Could you be more precise?
-----------------------------------------------------------
Philby, for one, the various Emir's like bin Jiluwi, the eastern governor who is described in Brown's (pg 162) quote from Aramco's Marinovic describing a 1955 incident where Jiluwi announced that he was coming to pick up $200K for a loan, which was returned in Saudi silver Riyals two months later. Jiluwi was one of Saud's old war buddies and had the last word in the Eastern Province, capable of summary prosecution, judgment, and execution.

Examples abound throughout the book, so I will stop here.



ORO: "The thinness of the Jiddah market, even by the standards of that day, is not an indication of the conversion volumes, because those would have been outside that market precisely because it was thin. The point is the price."

714: Really? A thin market is not indicative of conversion volumes? Since when? I think it's safe to say that the dollar price of gold reflected the expectation of inflation (typical during wars) and that country's increased supply of US$ (tiny by today's standards) relative to gold. What Saudi moneychanger would particularly want this strange new currency, from a country that for all they knew, would lose the war? A thin market indeed, very thin. In every way.
-----------------------------------------------------------
Again, the conversion would definitely not have happened on the Jidda market, where Hajis were changing money because the market was thin, because the conversion would become common knowledge instantly, and because as good a price, or better, could be had elsewhere. The price is the only indicator of conversion, because the Shuk responded to any opportunity it could to arbitrage in this meeting place of Islam to any other market from Casablanca to Bombay.



ORO: "The US government's idea of the business was (and remains) the continued flow of oil, and that of the oil companies was the continued control of supplies to sell."

714: Well, if you read a bit more closely, you might realize the US government was very much at odds with Aramco on a number of issues. In fact, it was the US Navy which desired this oil more than any other government entity, for obvious reasons. In contrast, the State Department let Aramco know in no uncertain terms they were opposed to the building of the Dhahran-Riyadh railroad.
-----------------------------------------------------------
One thing to remember is that Hull, the war time Secretary of State, had requested and succeeded in having Jordan, and then Smith, the English representatives, removed by the English Foreign Office after complaints came in from Col. Eddy and congressmen visiting there, about the Englishmen's attempts at booting Aramco off its concession.

FDR and the rest of the administration was told of the significance of the oil findings in Saudi by his Secretary of the Navy and others in his administration, who were lobbied hard by Aramco parent companies. The group that used FDR as their persona (outside of the socialist idiots of the department of State) was sufficiently convinced of the importance of Aramco's concessions to have FDR draw a map of the Gulf for English Ambassador Lord Halifax splitting Iranian oil for the Brits, Iraqi and Kuwaiti oil an even split for the US and the Brits, and Saudi for the US (meeting of 2/8/44 – pg 111 in Brown). Then Secretary of War Harold Ickes’ expert on oil matters Lee DeGolyer was sent on behalf of the US government and came back with an astounding report of the region's potential, with his estimate of potential reserves reaching to 300 billion barrels, a third in Saudi Arabia, and stating that this would be very substantial for world politics from that point on. Aramco's concession interests were recognized even before that as identical to those of the US.



ORO: "The state is most nakedly the private domain of the elite in Arabia."

714:Has anything changed? Fwiw, you never did address the debt problems King Saud himself faced. They should be obvious in any read of Brown's book, where he commented on them extensively.
-----------------------------------------------------------
Again, Saud may have been a near bankrupt in his official kitty just as Saudi was officially "in the hole" for over $100 bil in 1998, while prince AlWalid had a $400 bil portfolio to manage. But that is just the point I am making here. The Saud royalty and their coterie were not identical to the government or the country, they engulfed the government as a subsidiary. The fact of the subsidiary being near bankruptcy did not diminish the rich parent organization.


714: I fear I've burnt up too much of Mr. Kosares' bandwidth on this issue over the last few days. I'll leave you with the last word for now. I'll be back in a few days or weeks, maybe months.

I suggest that MK and the rest of the forum would benefit from your insights on the oil matter.

SHIFTYLease Rates moving up#494513/6/2001; 2:56:26

http://www.kitco.com/market/LFrate.html

Lease Rates

(Expressed as an annual percentage rate)

Gold
March 06 2001
Silver
March 06 2001
Platinum
March 06 2001
Palladium
March 06 2001

Bid
Change
Bid
Change
Bid
Change
Bid
Change

1-month
2.8375%
+0.5500
1.4375%
+0.5000
8.5375%
0.0000
3.5375%
0.0000

2-month
2.4750%
+0.5000
1.1750%
+0.4500
9.2750%
0.0000
3.2750%
0.0000

3-month
2.1488%
+0.3500
1.1487%
+0.4000
10.1487%
0.0000
4.1487%
0.0000

6-month
1.8000%
+0.1500
1.2000%
+0.4000
10.0000%
0.0000
5.0000%
0.0000

1-year
1.7225%
+0.0500
1.3225%
+0.1000
9.9225%
0.0000
5.9225%
0.0000

BelgianSir ORO and oil/gold(dollar) brainstorming#494523/6/2001; 3:15:23

Is the oil/gold/Arab history of 30 years ago (before 1971), still relevant for today's extrapolations ? IMO, it is not. Things have changed dramatically. Kings and Princes have also been lured into stockmarket speculation as well. All that's left is the natural strong - physical gold - affinity of oil people.We are overackting this given in today's actuality.
We are trying to look into Gold's future and are ready to use historical events + today's evidence, for pragmatic projections. Oro, your detailed knowledge of what happened is not helping me in projecting, possible, gold-involvement and/or "strategy" by the Arab oil-producers.

Who can pinpoint the exact reason, why POO went from 10$ to 35$, without any POG move ? Vital importance ! Since we still have not the slightiest evidence of world-gold-buyers (accumulators)...we do have to remain sceptical towards old stories, wished to be repeated. If any identidy on this world, should have (secret) plans to accumulate a large amount of cheap physical gold...the biggiest paper-giant would not be able to suppress POG for such a long period of time. For how many years can you fool powerfull gold-investors ? With the offer/demand-balance, sitting as tight as it is for the last 5 years...where is the intuitive, gut-feeling, accumulation-reflex of the jewellery industry ?

In what sense is the oil/gold -past helping us, today, for jumping to conclusions. The POG high of 414$ ('96) and its decline to 252$ is the EMU-period. Also a US$ rise period (rebound from a dizzy decline) and POO decline. Now, AU/OIL/$ correlation before 1971 - after - and now : is there a fundamental difference or not ? And are the Arab oilproducers, proactive in this correlation or is gold simply, nothing more than a side-effect for them, closely related with their passionate affinity for gold as everything except a pure monetary and personal-power item ?

I would be glad to share the finding of answers on my own questions through search for contact with the Arabs. But for the time being I am on a Central Bank crusade.

My general question remains : QUO VADIS GOLD ?
And the answer must be found by the ones who are willing to accumulate or hold onto the physical ! How much investment gold-bars are stocked in Arab vaults ? Thanks for answering ORO.

And finally, a little teaser,...is there an analogy between the stockmarket en gold ?? Stockmarket-INDEXES , are keeping up relatively well against the reality of people selling shares, cleary evidenced by the decline Advance/Decline-indicator....and...a very low POG, with no evidence (?) of goldaccumulation ? Is it the ultimate preparation for "the auri" ?

TopazShifty: 714#494533/6/2001; 3:23:55

Shifty,
Here we go again, Link showing wacko numbers (same as last week, during the spike)
714,
Can I echo Sir ORO's thought's re: your continued input here.
With a combination of both pragmatism and faith we will no doubt be able to roll back a lot more stones.
You Sir have demonstrated an ability to help roll back some of the heavier ones.

TopazBelgian#494543/6/2001; 3:55:51

If I may butt in?
I consider the "all-pervasive" nature of POO is now being manifested in the continued tanking of global markets. IMO the price hike to "a little above affordable" is directly related to the INABILITY of POG to reflect current Fiat indiscressions.
What they're basically saying is, "let Gold better reflect the status-quo or learn to live (or die) with unaffordable OIL"
If gold traded freely, Oil would return to $12 o/nite.

Just guessing though!!

tgthe receipe for deflation#494553/6/2001; 4:29:38

http://www.dailyreckoning.com/

The FT goes on to point out (as Dr. Richebacher has already) that not all downturns are alike. Typically, the post-war pattern has been for "overheating" to produce higher inflation rates, which the central bank then stifles with higher interest rates, which produce the downturn. But this time, there was little inflation. Why? Because it is a "supply side" recession...more like the recession in Japan of the last 11 years...or the one that followed the '29 crash in America. It is marked by too much capacity, which helps keep prices down.

*** For the first time in more than 50 years," says the FT, "the U.S. is experiencing a downturn against a background of suppressed inflation. And just as the Fed's role in producing this period of weakness was relatively limited... so it may also be not much more than a bit player in determining how quickly it ends."

*** All the discussion, debate and whining about whether the Fed is going to raise or lower interest rates - upon which the entire nation turns its attention as if it were the Second Coming...and Alan Greenspan the Messiah - is probably nothing more than a sideshow. Higher rates didn't cause the collapse of the Nasdaq. Lower rates won't bring it back.

TopazLease rates#494563/6/2001; 4:36:45

http://www.lbma.org.uk/2001gofo.htm

Straight from the horses mouth.
BelgianTopaz#494573/6/2001; 7:03:52

Aren't we all complicating things un-necesarrely ? Do have oil producers the intention of saying something with POG ?
I don't think so. POG is momentarely in the ban of the Central Banks. And if one wants to give any signal at all...they will do this with the US$ - only- and the rest will follow. POO past (from 1990) and recent has IMO more to do with the unwinding aftermaths of Desert storm. The bills are paid. The liberator has been rewarded and the oil-producers want to get on with their live. Saddam and Irak's reserves are the joker in this card play.

Arab gold-stashers also see, that official gold stored for generartions, is no longer officially fostered as before.
The UK/Suisse - signal is a very strong one. One would think (hope) that they are profitting from EMU/Gold reshuffle, to accumulate silently. They probably haven't got the chance to accumulate enough dollar-surplusses to do the gold-trick. What do we know about the war-repayements and secret agreements to the US? Acquiring consideral amounts of physical gold is done at very low prices in tempo non suspecto and with enormous dollar-surplusses, lying idle. All the other rest (moves) is for speculative purposes. At this forum we must surely be part of a small cognant goldbuyers. The movers aren't moving IMO. This does not implicate that they are acting wisely.

If POG dives under total production cost of 250$, another move à la WA, might signal that the goldreserves may be taken seriously. But the IMF 3.200 tons are still booked at 38$/ounce (number 3-holder). What difference does a periodical 50$ an ounce make for them ? Goldavenue.com, claims that the goldproducers were responsable for preventing another 10% sale of IMF gold. Again, who were the buyers, if any. Why has the goldproduction declined as to absorb the official sales ? Let us remain realistic and pragmatic, without unproductive fantasy. Let us encourage private gold-accumulation with solid arguments. Almost everything is in place to have a high degree of succes into the nearby but unknown future. We don't ask 2$/ounce for that. smile faithfully !

714Thanks, all...#494583/6/2001; 7:08:11

...for the feedback. I do think we're splitting hairs on this oil issue at this point, and perhaps Belgian is right: How relevant is all this to the current market? My work in this area was simply to examine, and possibly verify, this oil-for-gold trade as it was being portrayed on gold forums.
More importantly, we need to "ground" ourselves a bit and get back to the basics of gold investing. Gold is perceived as such a "fringe" investment by almost everybody I know, one that is highly speculative, which of course, is not necessarily the case. I often wonder if gold forums aren't doing the gold industry a bit of a disservice by disseminating so many wild theories and conjectures. But of course, it is not my place to be a censor, nor would I care to be one.

I would urge anyone lurking here, who may be deciding whether or not to get their feet wet in the gold market, to go ahead and step in. There's an old adage, "Buy low, sell high." This is certainly a time to buy gold bullion "low". I got into gold investing in 1998, when the price was slightly higher, and cannot claim to have made much money on this end so far, but I've lost much more on some other investments. One in particular, a blue chip consumer company comes to mind, one that dropped 30% IN A DAY last year on an earnings report (they are blue chip!). And I certainly would have fared far, far worse in tech stocks (fortunately I have nary a dime on such stocks).

So go ahead, come on in, give Mr. Kosares a call, the water's fine....

Cavan Man714#494593/6/2001; 7:31:56

Appreciate your comments and opinion very much. Best...CM
JourneymanThat "barbarous relic" and other victims @Pandagold, ALL#494603/6/2001; 8:03:20

Pandagold (03/04/01; msg#: 49360): "Up until the first world war
there was no history of hate between Germany and England. We are
both from the same stock, and if we were involved in any battles
it was both on the same side. Then suddenly, almost overnight we
were taught to hate. But, as that first Christmas of 1914 showed,
even though war had been declared, the hate was not there in the
common man. Who will we be told to hate the next time? It shows
how media ... is used to manipulate our thinking and our actions.
Control a people's thinking, and you control the people."

J-MAN: Indeed. "They" are so confident, they even have a key
part of the process nailed and named - - and sometimes they even
fess-up to the whole thing:

"Well Jim, it is very important in a democracy that you have the
support of the people. One of the reasons why George Bush [Sr.]
had to demonize Saddam Hussein was to get the support of the
people, and Bill Clinton has done the same thing, Vice President
Gore has done the same thing with respect to Milosevic." -Raymond
Tanter, Fmr. Natl. Security Council Staffer, WATCH IT!, MSNBC, 2
Apr. 1999, ~11:56:45 AM EST

"Demonization" is clearly a part of all "their" modern war-
mongering - - - and "they" use it elsewhere too:

_Gerry Spence_: "It was called the demonization of the defandant.
... Look what they did at Waco. They turned everybody against
those people at Waco. They said that they were sex fiends, and
that they were child molesters, and by the time it was all over,
the next morning after that fire there was a poll, and I think it
was by USA TODAY, that showed that 87% of America was in favor of
what the FBI did. Now here's what they did, they burned ...
twenty-two, twenty-five little kids, little babies on a, as if
they were on a spit, they burned those little children to death.
And the American public said "That's all right," and you know
why? Because [they] had been demonized, those people had been
demonized. ... they do this by pre-trial publicity. They did this
to Randy Weaver." -CNN Burden Of Proof, Oct 14, 1996, 12:45
PM{TC00G 08:05}

They did it to gold too - - - that "barbarous relic," remember?

Regards,
Journeyman

GalearisLease rates, gold and silver are in#494613/6/2001; 8:28:57

serious

backwardation.

Now.

G.

PandagoldJourneyman: The Mind Manipulators#494623/6/2001; 8:53:52

Naopleon was not only a great statesman, and militaty leader, but he had a good understanding of what is 'power', and had a prophetic vision of the future.

Two statements attributed to him that I remember from my schooldays ( a long tome ago) where I was blessed with one of the best history and geography teachers one could wish for are:-

" I would rather face a thousand bayonets than a writer's pen"

After he had conquered most of Europe, and he was on a high, someone said to him - "Now, what about China?"

He replied: "Let the tiger sleep, for when she wakes, all the world will hear her roar"

What has all this to to do with the present, and to gold?

More than you think, as you will see as events unfold.

It was the Russian weather that really defeated him, for had he taken Russia, there would have been no Waterloo.

Someone else made the same mistake more recently.

PandagoldJourneyman: One I owe you#494633/6/2001; 9:20:51

I owe you this. Didn't want you to think I was ducking. Hope I addressed your post correctly - well most of it. I apologise now, itf I didn't. Have to rush as must keep my eye on the market. When things happen, it will be sudden and without much, if any, warning.

Well, it took me a long time to wade through that #49342. Some of it re-your college betting pool was a little beyond me — the principle I understood. In fact I illustrated a similar principle when I talked about how an acquaintance of mine showed me, by personal experience, how easy the markets can be manipulated.

I understand all that you say, and, on the surface, that your comments are generally accepted.

It is not my aim, or desire, to tell others how to operate a strategy in the markets.

In many things in life, it depends upon mindset. As a qualified psychologist, I know how difficult it is to get people to be in control of their minds and channel their mind energies in a positive way. The vast majority of people are defeated in things they wish to do by FEAR, and are, as a consequence, skewed towards the negative.

This creates more fear...and so it goes on.

Another influence is that most have an inability to free their minds from the constraints put there from birth by 'well-meaning' parents, and some teachers who should never have been allowed to practise their profession.

We are NEVER taught to think big enough, and many do not possess the 'devious' minds that permit them to imagine that there can exist people who have such minds and who have been able to build up, over centuries, a network by which they have been able to create a power base that far exceed any government, past or present.

Those who control media, do so for much more than money, in fact sometimes they will run things at loss (financial). They know your weaknesses, and how you (general, not personal) are so easily influenced.

If you are wondering why I am dwelling on this, it is because I am addressing one of your sentences, a very important one to assure you — it is impossible, repeat IMPOSSIBLE, to over estimate those who are shaping and moving this world in a direction they choose. This will be the hardest thing I would have to get across to you, or anyone, not just hard, I can almost say impossible, if I apply the 'law of averages'.

TPTB, I can tell from the many postings, mean many things to many people. I do not intend to get into further explanations, it is not really important. Only when one accepts that such an entity (power structure) exists do things begin to make sense, and therefore free you from mental confusion, and wasted time and effort trying to figure things out, that appear irrational otherwise.

If you read my post carefully, you will see that I do not say it (trading) is easy, especially right now, before the tide has changed. I told you I am not getting over excited, but then one should NEVER, even when things are going very good. This leads to over confidence and error.

I honestly believe that those who can free their minds — open them fully, remove all indoctrination from false beliefs, take a good look at the history of man — ignoring the details (it is focusing on details which clog the brain, and deflect energy), and see things with a broad view, will see the truth. The truth really is out there.

You could make a movie illustrating everything I am trying to say, build it round a good plot and people would say 'Hey wasn't that something' But they still would not believe it could really exist. Like they see a warning on a cigarette packet but say 'well it may, or may not be, but if it did happen it would be to someone else, I'm different'. We are well and truly conditioned to think in a certain way.

Once again — who or what doesn't really matter. I do not need to know the geological properties of Icebergs, or how and why they are formed. All I need to know is that they exist and that they can sink the unsinkable. This is far from a perfect analogy but it should get the message across.

And, I am not from Missouri so no need to meet one to accept they exist. And no good sailor would ever believe, no matter how many times he had successfully sailed round the globe that he had conquered the sea.

I use a mixture of methods in my trading. I do rely a lot on charts, volume, trend lines, etc., and the direction of the wind. I also look at what the media by concessus of opinion is trying to get me to believe. On the top of this, from my belief in my assessment and understanding where TPTB are heading, and noting any problems that could send things a little off course for a while, I make my trading decisions.

Am I right 100% every time? No? One does not have to be. Market trading is not like sports betting it is not all over after one match. That is what I love about it.

Someone once said "Fear is a little dark room where negatives are developed" To me fear is a luxury that I reserve for those special occasions where all else has failed - As I mature those special occasions grow less and less — haven't had one for a long time.

When I have studied all my trading and reviewed all my errors, they have always been because my timing was wrong, or that I ignored the signs of the changing tied. Oh, I saw them, but ignored them. As for timing well, one gets better with practice and study, and remember — even a stopped clock is correct twice a day. In other words — you get a second chance (and usually a third and a forth.....

We attract what we dwell upon, therefore, be positive. Look for the opportunity and seize the day. It has NEVER been better for we mere mortals than with today's technology.

.

PandagoldOo-oops!#494643/6/2001; 9:26:29

'Changing tide'
VanRipNo 2 at Treasury#494653/6/2001; 9:31:36

http://www2.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B71737A6C%2D02D1%2D4B95%2DBA46%2DE561A1EA9F0A%7D

http://www2.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B71737A6C%2D02D1%2D4B95%2DBA46%2DE561A1EA9F0A%7D

Sorry if this was posted earlier. Was on the wire this mornng.

>>WASHINGTON (CBS.MW) - President Bush on Monday tapped Kenneth Dam to be second in command at the Treasury Department, a post that will renew the close public and private sector ties the law professor already shares with Secretary Paul O'Neill.

As Deputy Secretary of the Treasury, Dam will play a key role in the international financial policy of the United States. He has been a critic of the International Monetary Fund, favoring scaling back the fund's activities and limiting the size of its loans, and has also been critical of past financial bailouts of countries.

Dam's nomination completes the roster of top officials at Treasury, including Friday's widely expected nomination of Stanford professor John Taylor to serve as Undersecretary for International Affairs. Taylor once advocated abolishing the IMF.

White House economic adviser Lawrence Lindsey has also been critical of IMF bailouts, and the Bush team is expected to be much more hesitant to approve large-scale international rescue packages than was the Clinton administration.

Dam served as assistant director of the Office of Management and Budget in Washington from 1971 to 1973, during O'Neill's 10-year service for the agency.

Their past extends to aluminum giant Alcoa Inc. (AA: news, msgs, alerts) , where Dam has been a director since 1987 and where O'Neill served as chairman from 1979 until he accepted Bush's nomination to head Treasury.

Dam has been a professor of American and international law at the University of Chicago Law School since 1992. Previously he was a vice president at IBM (IBM: news, msgs, alerts) from 1985 to 1992. Other public sector experience includes a stint as former Secretary of State George Shultz's deputy secretary of state between 1982 and 1985.

The nomination requires Senate approval.
Rachel Koning is a reporter for CBS.MarketWatch.com.<<

Old YellerC"mon everybody,let's challenge the limits#494663/6/2001; 10:05:13

Has anybody else noticed the Wall St. shills have brought out the "wall of worry",again.

You know,maybe I'm unduly pessimistic,but it strikes me as more of a "wall of reality"and no safety ropes are being provided.Furthermore,there appears to be a lot of jagged rocks at the base.

OROBelgian - answers(?) - installment 1 - the sound of one hand clapping#494673/6/2001; 10:21:39

Belgian,

In the interest of clarity I will touch on things you mentioned one by one.

First, you say
"… we still have not the slightest evidence of world-gold-buyers (accumulators)".
We do have the strongest piece of information on the presence of gold buyers, and that is the presence of gold sellers, advertised loudly in the media, and documented in the data collected by BIS and the OCC, as well as on the books of gold producers. Had there been no buyers there would have been no sellers. In order to have a clap one needs two hands. Someone bought the nearly 6000 tonnes of EMU member's leased gold, someone bought some 2/3 of Barrick's proven reserves while they were still in the ground, similarly for Anglogold's 1/2 of reserves. Years of production have been sold forward. Is that not evidence enough of buyers, and on a large scale? Also, there were people buying the 30,000 tonnes of net paper positions reported by BIS. The fact of people buying is obvious when you consider that there were people selling – not only what they have in inventory, but also what they expect to produce in the future, and what they hope to be able to supply later.

It is nonsensical to talk of selling without buying. It is proof positive of a propaganda effort that media focus is on the selling part, while buying is not mentioned. The buyers obviously prefer to have prices low because they can buy more gold that way. If many sellers have sold other people's gold, which is what gold leasing is all about, they share an interest with the buyers in seeing a low gold price for as long as further gold is made available at that price. The buyers would start their own propaganda effort for a high gold price only once no further substantial gold supply is expected to be forthcoming at these low gold prices, and there is no gain from the continued support of leveraged gold sellers (who borrowed gold in order to sell it).

Understanding this general principle of the relationship between interests is key.

We also have WGC data that is known to be an understatement of gold inflows through customs. When adjusted for measurement error due to poor sampling and due to the circumvention of customs by many of the gold buyers, the WGC data reveal a cumulative gold demand and production deficit that has accumulated to at least 17000 tonnes this decade alone. Due to the law of mass preservation, we know that the quantities supplied to answer this demand came from someone's inventory. We know 1/3 came from the CBs as leased gold. We know that there is a gold banking system containing allocated and unallocated accounts, of which no record is publicly available, and no reporting is required by any of the regulatory institutions. We can't know who exactly has done the selling, but we know that the gold must have come from some hoard (inventory), and that this is the only possible remaining source. The fact of a lack of publicly available documentation is not in any way opposing this notion. Perhaps the opposite; this fact of known existence and unknown scale and limited information on flows is enough for us to conclude that there is a community of interest within the gold markets (regulators, bankers, producers, buyers) to keep the statistics hidden, otherwise they would have published their full data on accounts outstanding (and reserves) rather than just net transactions on LBMA and outstanding derivatives. Market participants will prefer transparency because it is favorable to all parties, unless there is mutual interest in hiding this information from the public. Such mutual interest can only come from a condition in which bankers are overleveraged, having lent out too much of their client's gold, the major buyers still have outstanding delivery obligations owed by the bankers that can not be filled if gold depositors withdraw their gold, producers have oversold their future production and stand to become insolvent (see Ashanti and Cambior) if gold prices rise, and regulators have not filled their mission of regulating the industry and wish only that the system survive till they retire.

JourneymanArabian gold arbitrage @ORO, 714#494683/6/2001; 10:31:50

If a 100% profit arbitrage was available in 40s Saudi, I can almost guarantee you SOMEBODY was playing it. One way new counters make money in the gambling business is called "smurfing." (The term has also been applied to some sort of drug-related thing.)

Typically what happens is that an American casino will offer a slightly better exchange rate than normal on, say, Canadian currency - - - if it's played at the table. The enterprising "smurf" finds a source of Canadian currency, and shuttles his funds through the Canadian-->American-->Canadian loop as often as possible.
The difference in rates can be quite low, in the range of even 1% and still yield enough to make quite a tidy profit.
These offers invariably attract enough smart players to cost the casinos money and cause them to end the offers.

So you can imagine what kind of attention a 100% profit would attract.

Incidentally, pro gamblers fan out across the world and no such opportunity goes unrecognized for long. A friend of mine discovered a similar opportunity in Latvia last year for example.

Is this relative to Saudi in the fortys? I think so. We humans are an opportunistic bunch, and professional gamblers that play casino games are only a sub-set of the gamblers that have been with us since our hunter-gatherer days. We have all those "carry trades" don't we?

SOMEONE knew about the opportunity - - - and he/she told friends. SOME took advantage, guaranteed. What volume? Don't ask me!

Regards,
Journeyman

Old YellerNever mind no clothes,the emperor appears unsure of his own existence#494693/6/2001; 10:38:04

http://www.mises.org/fullstory.asp?control=620&titlenum=&FS=Greenspan

This is a rather revealing insight into the Maestro's thought processes.Rather long,probably somewhat off topic,but I'm sure this is going to be influential in our future trajectory.

Man,Mr.G is one unusual duck!

Mr GreshamGalearis#494703/6/2001; 10:45:39

http://www.kitco.com/market/LFrate.html

This is the best I could do in 10 minutes, under your continuing inspiration.

Lily leased a lotta gold
From sharks and alligators
But never saw their opening jaws
Because the Backward ate her.

Tree in the ForestEncouragement to all goldbugs#494713/6/2001; 10:53:01

To those who grow impatient or weary while waiting for gold to be released from its prison, a few words from one of our greatest presidents, dour Cal:

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

Calvin Coolidge

HenriNPR spot#494723/6/2001; 10:54:17

This morning NPR had a good spot on the Turkish currency exchange market and its gold exchange market around the corner. The broadcast proclaimed the Turkish hard currency market "the freeset market in the entire world"
Sierra MadreOld Yeller...thanks for the link to Salerno and his article on Mr. G#4947303/06/01; 11:37:27

It is evident from the excellent article by Salerno on Mr. Greenspan, that Greenspan is suffering from what is truly a profound mental illness: Social Metaphysics.

Social Metaphysics is an illness or "disability" which was examined and defined by Ayn Rand. She coined the term herself. It is curious that Greenspan, who was a member of Ayn Ran's "Inner Circle", a very exclusive coterie, has succumbed to the mental illness defined by Ayn Rand herself.

Social Metaphysics is the mental stance or attitude of people who consider that what is prioritary in the world, in Existence, is not Reality, That Which Is, but the mental attitudes of significant people with regard to that Reality.

That is why Greenspan is so concerned with "perceptions".

For him, it is not the facts - the reckless increase in the Money Supply, for instance - that are important, but rather what people (of course, the important people, the movers and shakers) are thinking or imagining.

This disregard for reality and focus on perceptions of others as the ultimate and important reality, is actually a mental illness. So we can truly say that Mr. Greenspan is a madman. Notice how Greenspan, according to the article, has recourse not to reality dealt with through strict logic (e.g. Austrian theory) but rather through hunches, feelings which he cannot fully explain. A typical "witch doctor" as described in the Randian philosophy.

It is a sad comment on the state of the world's philosophy, or lack of philosophy, that Greenspan has mesmerized the whole world. The world has lost its way and is now run by a madman, a "witch doctor"; the fact that Greenspan is the most important financial man in the world, is terrifying.

All the more important, to accumulate gold. This episode in the history of the world is going forward into utter chaos.

Sierra

HoltzmanSic Biscuitatus Disintegrat#4947403/06/01; 11:49:22

Holtzman here,

--------------
Where have all the fiats gone?
--------------

Excellent critique, ORO. Your impressions of EU intent are very similar to mine.

Your vision of a 'reserve auri' is, as I see it, a third alternative distinct from the real euro and from my physical-gold-in-hand fiction. All I was attempting with my quickly invented mythical auri was a demonstration that a government which adopted such a thing would simply be surrendering one of its most potent weapons. As a result, of course, it could be relied upon never even to contemplate such a move. But I am intrigued by your 'reserve auri' as a third alternative that might have been yet wasn't.

There is one place I would beg to differ, however. You state that 'The mere existence of the fiat currency takes substantial portions of Joe's dinner, and takes away his best clothes.' Perhaps it depends upon which Joe we're speaking of. For clarity's sake, let's use names other than Joe.

Paul, the man with his hand out towards the government, receives crisp new fiat currency and immediately spends it to purchase Paul's dinner, Paul's cat's dinner, Paul's pint of the best, and Paul's new wardrobe, all before prices have a chance to rise.

Peter, the upstanding but unobservant middle class citizen, carries on working for two whilst the fiat currency in his retirement accounts is steadily diluted by inflation. Fiat provides government with the ability to 'sneak' taxes past Peter in order to keep Paul well fed and less motivated to run amok in the streets. In a gold standard system, the government would have to overtly tax Peter in order to pay Paul... it's always easier to be a pickpocket than a highwayman.

Mary, the observant me-first-society-second middle class citizen, realised some time ago that inflation causes to-day's debts to be paid off with tomorrow's cheaper currency, so she lives in a negative net-worth world until her personal debt spiral implodes into bankruptcy.

Jackie, the observant and savvy investor, never goes into debt for things which have no resale value, and he allocates his wealth across many classes of asset: some in his own domestic fiat currency in term accounts, some in domestic stocks, some in foreign stocks, some in gold, some in good furniture (Jackie will never waste money on particleboard), some in real estate, perhaps some in artworks, etc.

The point is that whilst Peter, Paul & Mary puff with indignation yet drag on through life under the pirate ship of their own government, Jackie's broadly allocated wealth continues to grow in the despite of any one government.

--------------
Bread and Circuses
--------------

I agree with the majority of your historical points, although of course I would read the tea leaves a tad differently. For example, you stated that 'Bread and circuses did little for their supposed beneficiaries in Rome, and ultimately destroyed the whole of the Empire.' In contrast, I would say that 'Bread and circuses kept Rome's huddled masses just content enough that nearly twenty generations of aristocrats could maintain a quality of life almost the equal of to-day's technological elite.'

You are correct in characterising my last post as 'All that is wrong' with the world as it is. However, it IS the world as it is, and it is the world as it almost certainly shall continue to be. Of all the different visionary groups to attempt building a different world, the most successful were the Bolsheviks, but even their utopia eventually caved in on itself. One cannot bottle up human nature indefinitely. It will, sooner or later, burst through any restraint devised.

The only thing which works is what has been proven time and again to work: keep the masses just sufficiently content and just sufficiently afraid of the ruling class. As Machiavelli pointed out, given a choice between being loved or being feared, it is more effective to be feared. Though he did allow that being both was best, if possible.

To-day, contentment is managed in the EU and NAFTA with a combination of government handouts, a sense of participation by way of voting for representatives, and the opportunity (for those with the will to pursue it) of raising oneself out of the masses and into the aristocracy. Contrast Nelson Mandela with Colin Powell. Both self-made men arrived in positions of power in nations where that was phenomenally unlikely, yet the U.S. system allowed it (indeed encouraged it) and so did not invite revolution as did South Africa.

However, fear is managed in the EU and NAFTA by the threat that special police units will come knocking if you break laws. And be assured they'll see you if you break the law, what with all the surveillance equipment around nowadays.

The details vary from era to era, but the pattern remains the same. A little over half a century ago, fear was focused around the threat that Stalin would get you (both within the USSR and in the West). For many centuries before that, it was the threat that god's representative the Pope would get you. In Rome, it was the threat that the Emperor would get you. In Egypt, it was the threat that the living god Pharaoh would get you.

Interesting thought: Egypt's Queen Cleopatra is nearer in time to us than she is to her predecessors who built the pyramids. One of the rare occasions when Julius Caesar felt humble was during his first visit to the Giza plateau. Those manmade mountains, already four times older than Rome, silently assured him that nothing he would ever accomplish would be as long-lasting. Eighteen hundred years later, they gave the same assurance to Napoleon.

For over twenty five centuries, Egypt had gone through dozens of dynasties punctuated by numerous chaotic periods wherein there was no Pharaoh. But time and again, the same form of government rose from its predecessor's ashes... until increasingly strong outside forces found Egypt. The ancient Hittites were barely superior to the Egyptians upon first contact, and were soon enough evicted. The Alexandrian Greeks supplanted the old ruling class but quickly went native and became Pharaohs themselves. But then came Rome.

After Rome got hold of her, Egypt became ruled from a distance. By the time the Eastern Empire abandoned Egypt, she didn't remember how to restore her own Empire and so fell victim to the Arabs who've had her ever since. Many of the non-Arab Egyptians were driven out of their homeland and migrated north through Constantinople into Eastern Europe... hence the word Gypsy.

In contrast, Rome as an Empire lasted only about four centuries and, thanks mainly to bread and circuses, it was not torn down by a revolt of its own native population. It was, however, weakened by bread and circuses, and both its popular resolve and its military readiness were eaten away. But even yet, had there simply been an ocean north of the Alps rather than the forests of Germania, we'd still be speaking Latin to-day. It was Rome's indefensible northern border which ultimately doomed it, not its style of government.

This ties in nicely with your points about landowners, ORO. A man should never place all of his wealth in his land (or in any other single asset class, for that matter). Americans have a stronger sense of land possession than do Britons or Europeans owing to their 'bang stop or I'll shoot' negotiating style. I expect there are still sections of the Pacific Northwest where it would be unwise for federal officials to barge in unarmed. Still, as demonstrated all too often, the government does have the resources necessary to come onto anyone's land and separate him from it no matter who he is.

Since few of us to-day are nomads, we need to acquire a place to sleep most nights, but we should also own enough portable wealth to allow us to run for our lives should such a dark day ever present itself. I recall reading somewhere years ago about an American who travelled across the U.S. wearing his wealth as gold coins sewn into his vest. As needed, he'd simply find a spot of privacy and cut out the required coin. Sadly, this wonderful lifestyle has since been made obsolete by metal detectors and strip searches.

As someone once said, the only certainties in life are death and taxes. However, as someone else later pointed out, the insertion of the Inland Revenue into one's business is made substantially more bearable by a generous application of emolument. Ahem.

Oh, and speaking of propaganda, ORO, it's quite illuminating to consider how symbols are employed and reemployed over the centuries...

--------------
Bundles of twigs
--------------

Americans are rightfully proud of their slogan, 'United we stand, divided we fall.' The phrase is often illustrated by first demonstrating how easily a single twig may be broken, then demonstrating how a tightly tied bundle of twigs is nearly impossible to break. This concept, of course, pre-dates the revolt of the Colonies by several millennia. The original American expressers of that phrase proudly adopted what they knew was a Roman symbol.

Repeated again and again in ancient Roman political and military art were images of pole-axes whose shafts were bound round with twigs. These objects were carried in processions and were either laid or mounted in places of honour in order to proclaim the power of SPQR (Senatus Populusque Romanum, Senate and People of Rome).

Those of you who collect U.S. silver coins should have a glance at the reverses of your Mercury dimes. You'll find the same symbol there, proudly declaring America's manifest destiny as the new Republic, the new SPQR.

Of course, Americans weren't the only ones who've ever thought of themselves as the natural heirs of Rome. To this day in the UK, royal maces are carried in procession and are laid in places of honour in Parliament in much the same manner as a twig-bound pole-axe was placed before the Roman Senate two thousand years ago.

But what of the Italians themselves since then? How in the world does the child live up to the reputation of a father such as ancient Rome? Not since the Renaissance have Italians been world leaders, and even at that pinnacle they were but a faint glimmer of Rome's original splendour. Time and again, Italian leaders have attempted to rekindle that ancient greatness, most recently Mussolini. As part of that attempt, he sought out every emotion-stirring image he could find from the glory that had once been Rome. Italy in his time was not so dissimilar to America of the 1770s: it was a patchwork quilt, most of whose inhabitants didn't think of their peninsula as a single nation. In the image of those weak twigs uniting into an unbreakable bundle, Mussolini found the rallying symbol he needed. He even adopted the original name for it.

North of the Alps, Mussolini's vision inspired another leader to unite the patchwork quilt of German-speaking peoples. Again, the bundle of twigs symbol was used, and its old name adopted, and both symbol and name were tarnished by the use. As, by the way, was the other Nazi-appropriated symbol, the swastika. Indians (of both sorts) and Chinese who visit Europe are invariably astonished to find that their millennia-old symbol for good luck has other meanings which may even attract violence. For precisely the same reason that swastikas are no longer tolerated in view, the bundles of twigs also fell from grace. Even America dropped them from her dimes. It did seem somehow inappropriate to put such a recently misused symbol behind the face of FDR. Still, it's often startling how truly close two things are which on face value seem so diametrically opposed.

So what's this name I keep talking about? Well you see, in America, those bundles of twigs are most often associated with the English phrase 'United we stand, divided we fall' and the Latin phrase 'E Pluribus Unum' (out of many, one).

But the Romans themselves used a single Latin word for those bundles of twigs: fasces (FASS-kes)... hence Mussolini's word fascist. As anyone who attended the movie Gladiator or saw the much earlier television programme I,Claudius can affirm, Rome was the original fascist state.

There truly is very little new under the sun, though the details do tend to get quite twisted from age to age, often entirely out of their original implications. For example, if one could run back in time, abduct a Roman-on-the-street from the time of Julius Caesar, bring him forward in time and show him around Westminster Abbey, the poor fellow would be absolutely mystified by the cross' place of honour in the building. What to many modern people is a symbol of supreme self-sacrifice on behalf of others was, to that 2000-year-old Roman, nothing more than a terrifying symbol of his nation's fascist iron will.

To put yourselves in that Roman's position, imagine jumping ahead to the year 4000 AD and being shown a vast room filled with headsman's axes and electric chairs, only to be told that this is a place of worship and that these tokens which seem nightmarish to you are in fact regarded by them as symbols of devotion. As Aldous Huxley put it, Ford's in his flivver, all's right with the world.


Yours,
I.V. Holtzman

TopazBelgian#4947503/06/01; 11:59:03

Good point on the War repairations Sir, though the cause/effect of that little skirmish are as deeply hidden as our (presumed) gold scam.
On the UK/Suisse "sales" it's comforting to note both Countries have recently been found "fit" to now join EMU and we wait with bated breath to see whether UK will suspend the Auctions. (Swiss have deferred via ballot... for the moment!)
Does it not strike you as odd that 125T per Month are being "re-allocated" through BIS without market movement (swiss) but whenever the UK auctions happen, the POG goes bananas?
Sir, if a pragmatic approach alone was all that was required to unscramble the gold egg, it would have been done years ago - alas, the bulk of research into this "most opaque" of markets, must remain conjecture.

JourneymanIn search of "deflation" clarity -- and other topics @ALL#4947603/06/01; 12:29:49

The following excerpts from tg msg: 49455 (notice the
capitalization emphasis which I added) - - -

tg's post: "But this time, there was LITTLE INFLATION. Why?
Because it is a "supply side" recession...more like the recession
in Japan of the last 11 years...or the one that followed the '29
crash in America. It is marked by too much capacity, which HELPS
KEEP PRICES DOWN. . . . For the first time in more than 50
years," says the FT, "the U.S. is experiencing a downturn against
a background of SUPPRESSED INFLATION. [Caps emphasis added -j.]

- - - illustrate a common confusion in discussions about
"deflation." Notice neither of the included statements claim
"MONETARY deflation," that is, a decrease in money supply. Quite
the contrary - - - they say LITTLE INFLATION and SUPPRESSED
INFLATION, which is not even "no inflation," let alone "monetary
deflation."

Thus it's clear that people using the word "deflation" in this
way have (understandably I guess) confused economic contraction
with monetary deflation. This is understandable because while the
U.S. was supposedly on the gold standard at the beginning of the
"Great Depression," the situation was indeed blamed on the
concurrent contraction in the money supply caused by the
discovery (in the form of bank-runs) that the Federal Reserve had
fraudulently issued "Redeemable In Gold On Demand" certificates
well in excess of the gold they had available to redeem them.

Especially for those individuals and businesses which had been
conned into borrowing this easy money, the literal monetary
deflation that resulted (because enough gold couldn't be
"printed" to cover, even with the government-FED heist of the
peoples' gold), this created an impossible situation - - -
including a huge number of bankruptcies.

We here at USAGOLD don't need to continue this confusion between
monetary deflation and economic recession in our posts. Do we?
There is no longer any constraint what-so-ever on money creation.
Or perhaps I should say that while as ORO so eloquently pointed
out recently, the only path to money creation that matters today
is the leverage from fractional reserve banking, the FED's
ability to monetize existing debt (convert it to credit ("money")
book entries) is limited only by the FED's "conscience."

Regards,
Journeyman

P.S. And another chronic and related bugaboo of mine: I just
can't resist reminding you that "dis-inflation" is still
inflation.

P.P.S. We may not have hyper-inflation (I suspect we will
though), but we definitely WON'T have MONETARY deflation, that
is, general prices won't fall, at least not for long!

What inflation does is to coax resources people and societies
would normally have stored-up for emergencies and retirement into
speculative ventures on new things. It encourages to some
degree, in other words, eating your seed corn.

Galearis@ Mr Gresham (your 49470)#4947703/06/01; 12:42:47

Displaced prose and praise (smile)

I thank you kind sir for your praise. But I am also mystified that I could inspire such a poem from so little incentive.

Perhaps it is a variation of the 1000 monkeys bringing forth a play worthy of Shakespear, but try as I may, I cannot see the poetry of mine words as compared to yours. (smile)(hence my monkeylike allusion)(big smile)

I just slapped this lease rate message on this morning on my way to my word processor. I have an orchid article to complete - but my post was definitely not a warming up exercise.

Notwithstanding, the lease rate plays do forcast some wild and toothy creatures coming out of the cages. Methinks (that Shakespear theme again) we should post some look-outs to watch for casualties. Most of us would know this as a default watch.

We are getting closer, faster

Now.

(J.P. Donleavy) (smile)

Best...

G.

Old YellerHey,gold shorts,is the handyman going to fix your problem again?#4947803/06/01; 12:45:33

Watching the current backroom gyrations makes me think of a paragraph in Elwood's Gold Export Analysis;

"My grandfather once told me"Use the right tool for the job"Applying that here,we'd expect them to use physical flows only when nothing else will do.In'96 and '97 it took physical delivery of hundreds of tonsto get the price down from $400 to $300.Of course,we can assume the heavy hitters,to a man,know the difference between the paper and the physical so there's no way to "fill the gap"with them using paper.See the article on Golden Sextant by Reg Howe for a world class analysis of the derivatives"

Reminds one of the frequent question Butch and Sundance kept asking each other through the movie."Who are these guys?"

Sierra MadreThanks Holtzman for your interesting review of History#4947903/06/01; 12:51:26

Just an aside on your commment on Egyptian emigration to Europe.

I have not heard of this emigration before, but it might well have happened.

Just by the way, Alexander Del Mar in one of his books, perhaps "History of the Precious Metals" (facinating!) says that the reason the Moslems were able to overrun North Africa so easily, is to be found in the fact that they promised liberation to all slaves held by the Christian masters. This because Islam forbids any Moslem to enslave any other Moslem - but enslaving Christians was acceptable.
This of course provided a great incentive to turn Moslem, for the large number of slaves in North Africa.

Perhaps a large number of Egyptians did emigrate North into Europe. But...they weren't the people known to us as "Gypsies".

The Gypsies themselves believe their origin was Egypt, and their songs mention Egypt frequently.

The fact is, they are mistaken about their origin. They are actually the descendants of a low-caste tribe that left India centuries ago. Their language has been examined and proved to be evolved from Sanskrit roots, with accretions of words, from places through which they moved over the course of centuries.

Gypsies are a most interesting subject of study. There are the colorful works of George Borrow, "The Romany Rye", "Lavengro", and "With the Bible in Spain" - which describes in hilarious terms, Borrow's fruitless efforts to Christianize the Gypsies of Spain, early 1800's.

This group has managed to avoid integration; they do not marry outside of the Gypsy tribe, and their notorious customs are indeed a refreshing contrast to today's ever more dull Disneyfied world. They do not have a written literature.

By the way, they love gold, today, as they did five hundred years ago. They keep it in their possession, and will splurge all their stash on a single grand celebration of some family event such as a marriage.

They call themselves the "Rom", or "the Men", and regard all wealth of those who are not Gypsies, as for the taking.

Sierra

Old YellerWhoops,I forgot the link.#4948003/06/01; 13:01:30

http://www.geocities.com/goldtango/analysis1.htm

Just in case anybody out there is unfamiliar with Elwood's fantastic work.
Randy (@ The Tower)Fed buys Treasuries outright for second straight day#4948103/06/01; 13:04:16

http://biz.yahoo.com/rf/010306/nat017642.html

The Fed has once again injected permanent reserves to the banking system, this time with a purchase of $469 milliion in U.S. Treasury securites for the System Account in New York.

In earlier open market operations today, the System Account manager added $2.0 billion in temporary reserves via overnight repos....with the fed funds market trading over the FOMC target by 1/16th percent.

This activity has long since passed any point of parading as an exact science...a child could do it, adding billions in round round numbers with an eye toward saving the banking system from consequences of its past excesses. The value of the dollar shall suffer as a result. And given the quantities of overseas dollar-denominated holdings, in this action our monetary authorities are effectively saying, "We shall have the hyperinflation."

OROHoltzman - stressing a point#4948203/06/01; 13:16:34

Holtzman,

The Roman Aristocracy lived in terror of their own Emperor and had themselves devoured by his need to increase the scope of bread and circuses endlessly. Emperors had to deal with the fact that they had created an increasing class of dependents close to home which must be fed and entertained lest they riot. Once far away lands were being abandoned, the provincial aristocracy was targeted. Progressively less of the aristocracy could survive, and practically the whole of them were killed and their property confiscated. Each generation of the aristocracy was smaller than the one preceding it. Even the Soviet elite, the "nomenclatura", could not take the terror against themselves that was necessary in order for them to retain their privilege. If you pay close attention to the names, you will see that the aristocracy of Rome had changed; that the 20 generations were not of the same families, and that fewer families belonged to it as generations progressed.

Your discussion of Paul, Peter, Mary, and Jackie ignores the fact that by taking from the one and giving to the other, the government is creating a negative sum game. As taxes and legislation/regulation driven income shifts grow, the marginal income from marginal effort is reduced, as is that from investment. The result is that in order to provide Paul with his food, grog, and clothes, the government not only eliminates those from the rest of the bunch, but also employs Elisabeth social worker to determine Paul's needs (Paul obviously needs Elisabeth to have an assistant so that she can get supervisor's pay), but also employs Nick to find out how much Peter, Mary, and Jackie earn, and how to take it. Most significant, however, it reduces the future gain from additional work and investment that Peter, Mary and Jackie will not do because they will see no gain from the marginal extra effort. The present value of that lost productivity, and that of Elisabeth and Nick who are doing unproductive work, is greater than all the benefits Paul, Elisabeth, and Nick and their successors will ever see. Thus the government's benefit to Paul of a square meal, a decent pair of shoes and a visit to the pub costs as much as a 15 course French dinner, Gucci shoes, and a bottle of Rothschild's best. Paul loses an opportunity for the job that Peter, Mary, and Jackie could have created had their income not been taxed or inflated away, and Paul loses the opportunity to buy the products of Elisabeth and Nick would have produced had they been working in the marketplace. The loss to the whole bunch over their lifetimes is equal to the portion of their life lost by dying an early death at age 32.
The ratio of lost productivity and direct benefit cost to benefit provided by government is at least 2, and most probably 4.

Randy (@ The Tower)Thanks to Sean Corrigan for sharing this with us...#4948303/06/01; 13:18:49

http://biz.yahoo.com/rf/010306/nat017642.html For those who have not yet seen his commentary, "The Other Bubble", it is now available for viewing at The Guilded Opinion.

Personally, I am most delighted with it for recalling the 1997 June warnings offered by Japan's PM Hashimoto to this effect:
-----
'Our American friends were paying little attention to maintaining the value of the U.S. dollar as an international key currency, and we were tempted to sell off (bond holdings). In terms of funds, it is true that we have not really made the right choice, shall I say, or advantageous choice. By selling Treasury bonds, we might increase our gold holdings. That is an option we had. Among countries around the world, there are many who hold their foreign currency reserves in the form of U.S. Treasury bonds. As long as they continue to maintain the U.S. government bonds -- even when the U.S. dollar is weakening relatively -- it is because these countries are holding onto these government bonds that the U.S. economy is being maintained. Many people, in fact, don't realize this.'
+
`I hope the U.S. will engage in efforts and cooperation to maintain exchange stability so that we will not succumb to this temptation to sell off government bonds and switch our foreign reserves to gold.'
-----
If you can grasp the wider implications in this, then you are light-years ahead of the game.

Click the link to see the context in which Mr. Corrigan chooses to bring forth this quote.

Randy (@ The Tower)The Other Bubble#4948403/06/01; 13:19:59

http://www.usagold.com/gildedopinion/CorriganBubble.html

Clearly, this link will serve you better!
JourneymanHow I learned to hate people and love government @Holtzman#4948503/06/01; 13:38:23

http://www.webleyweb.com/tle/libe53-19990815-04.html

Sir Holtzman,

Excuse me for butting in and shooting from the hip; I guess I'm
on a hair trigger today for some reason.

Your paragraph - - -

"Peter, the upstanding but unobservant middle class citizen,
carries on working for two whilst the fiat currency in his
retirement accounts is steadily diluted by inflation. Fiat
provides government with the ability to 'sneak' taxes past Peter
in order to keep Paul well fed and less motivated to run amok in
the streets. In a gold standard system, the government would have
to overtly tax Peter in order to pay Paul... it's always easier
to be a pickpocket than a highwayman."

- - - ASS-u-MEs that government is somehow the "best" way, if not
perhaps the only way, we humans handle problems. This assumption
is not only patently incorrect (which I can document more than
abundantly) but the truth is just the opposite. The fact that
grown and otherwise intelligent adults believe the fairytale that
governments help the poor more than they hurt them is a monument
to disinformation, the power of brainwashing, and the modern
press.

Further more, humans, at least the ones I know, don't "run amok
in the streets" in times of disaster, we help each other. It's in
our genes, and any notion to the contrary is slander. Hobbes'
"war of all against all" is complete and utter malarky. Period.
Before government butted itself in, families took care of their
own and private charities took care of the rest just fine.

A quote from one of Pandagold's recent posts is apropos:

"The Christmas Truce was the last twitch of the 19th Century. By
that, I mean it was the last public moment in which it was
assumed that people were nice. It's the last gesture that human
beings are getting better the longer the human race goes on." -
Paul Fussell, University of Pennsylvania

Our model of human nature has been skewed beyond recognition by
government, pro-government propaganda and media's "dramatic
imperative." (See link for a passable presentation of this.)

In fact, governments create poverty. What's more, the more
govenments try to "redistribute wealth," supposedly to "the
poor," the more disparity of wealth they create. (If you don't
believe this, ask me.)

I can safely say that ALL of the excuses presented by the "macro-
econ" manipulation apologists, especially when put into practice
in the real world, not only fail to accomplish their PR-hyped
goals, they often accomplish just the opposite. There are very
good, logical, economic reasons this is so. Ask me.

Thus there's a high probability that, to the extent some Pauls
are ticked off and in danger of running amok, this is closely
related to some government machination, boondoggle or sell-out.
A great example (though by no means the only one): The "Great
Depression" --resulting in a lot of ticked-off Pauls-- was caused
by the illegal activities of the Federal Reserve (illegally
issuing unbacked paper promises to deliver gold it didn't have,)
itself the result of illegal laws passed by the U.S. government
in chartering it. Thus in actual operation, governments are
often a great source of disorder and chaos rather than the "font
of order" they claim and we assume.

Therefore, for order, morality, and the good of mankind
(including the "poor",) down with all government fiat currencies.
Period.

Regards,
Journeyman

P.S. Someone could of course argue that, because the dollar finds
itself as the "reserve currency of the world," dollar users have
benefited at the expense of the people in the rest of the world.
So-far. Anyone care to have that discussion?

P.P.S. I agree with your characterization of government as either
a pickpocket or a highwayman. Both actually.

BelgianORO#4948603/06/01; 14:16:19

Allow me to answer first the easy bits of your reply. Wich is, by the way, exactly, what I wanted to hear !

Media : no need to spend much effort on manipulating them. They just follow, events, the "lemming" way. With POG in a declining mode for 21 years...no probs.

WGC : cumulative demand/production deficit of 17.000 tons for the last 10 years : it is per definition totally impossible to gather a global correctly matching gold account! Russia, China etc...
I even don't consider their or anyone else's figures as to make any conclusions out of it.

Now the most interesting part : Screeming Sellers and Silent Buyers ! A /SHARING THE SAME MUTUAL INTEREST !
B / HIDING INFORMATION FROM THE PUBLIC !
Here we have to come up with plausable scenarios and actors. That's exactly the part where a lot of VERY DISTURBING "confusion" is installed. Not the least by ourselves. A collorfull series of bits and pieces from possible scenarios have incompleteness as main characteristic. The stories have no beginning or end.
We are collecting remains of a sunken ship, dispersed along the coastal line.

Actors with mutual interest : I only see two of them and all the others must be "intermediares" (go-between)(profit-pirates) :
1/ Goldproducers + 2/ goldholders . Not all producers and not all holders can be involved in the same mutual interest play. Before searching for the actors idendities, we must come up with the "motive" for the natural confluence of that mutual interest. Again a new series of possible motives has already been produced.

I humbly admit, not being capable of producing a complete story with high probability. As long as POG doesn't fly to the moon, it will remain an intellectual challenge.

Getting late and after zzzzzzzzmmm, hope we can come one step further into this gold-thriller. Thanks ORO...very stimulating. Feels good.

Pandagold(No Subject)#4948703/06/01; 14:18:34

For those who still doubt what this is all about

From an article in the' London Times' December 1997 by Janet Bush (no relation) headed "How the West cages Asian Tigers in IMF trap".

She quotes Mickey, Cantor former US Commerce Secretary, made to the Confederation of British Industry, that month:-

" He told his audience: "....the troubles of the tiger economies should be seized as a golden opportunity for the West to reasert its commercial interests. When countries seek help from the IMF", he said, ". America and Europe should use the IMF as a battering ram to gain advantage" ( economic gunboats up the river)

A battering ram? These are the words of a man who held a senior position of government. Many of these people were just moving up from one bowl of rice to two bowls of rice per day.

And you think this mentality would stop at manipulating gold to gain advantage?

OROJourneyman - Japanese deflation vs. the US condition#4948803/06/01; 14:28:50

Thanks for your latest 'flation post. A joy to read, as usual.

I want to add that Japan could suffer deflation (however mild) because it is a creditor nation, and has assets abroad to lose. It is only at last year's end that Japan's trade balance moved into negative territory (it still has a strong trade surplus with the US). It should be obvious that the enormous historical excess production not going abroad any longer, the local supply is being consumed locally. Thus Japanese yen expansion (see their huge growth in M1 as a result of monetization by BOJ), grew to match the existing production levels, to the point of eliminating net exports. Thus prices did not have to move up. The export driven economic policy of Japan that created (among other things) the enormous productive capacity there and denied Japanese the ability to buy their own product, was reversed some time ago, and Japanese are now consuming the whole of their production.

The second item of note, is that internal Japanese financial assets and some real estate kept for financial purposes (i.e. for resale or collateral for loans) had deflated substantially, thus eliminating some $5 trillion of purchasing power from Japanese hands (mostly in money substitutes in stocks and bonds) - only partially replaced with foreign assets, a sea of liquidity eliminating most of the default premium on bonds, and an expanded monetary base. As a result, one can only imagine a deflationary scenario in Japan. They still have many foreign assets to liquidate before they turn to a negative cash flow. Thus they may purchase imports to continue supplying local imports without exporting any Yen, but instead exporting some of their dollar income and assets.

In the US, a debtor nation, there is a different situation, most debt is of the household sector, and a minor portion is owned abroad. Commercial and government debt are 20% and 44% owned by foreigners, and some 20% of equity. Americans have seen purchasing power - in the form of money substitutes of bonds and stocks - grow mightily, and have seen a growth in home values in proportion to their debt, but much slower than their accessible financial assets (held mostly in inaccessible pension funds). Thus a Japanese price deflation is not as likely, with fewer net assets to lose than Japanese had, and with a substantial net trade deficit (5% of nominal GDP, 20% of volume GDP by my estimate). Thus a local loss of purchasing power through asset value loss would be gained back in income as prices rise in response to the closure of the trade deficit (commensurate with the loss of investment flows from abroad which must coincide with a fall in asset values, since someone must sell them in order for their values to fall, and so many of them are held by foreign creditors). The replacement of imports with local production would raise local prices and incomes relative to assets and debts outstanding, thus no price drag would be generally available as a result of Japanese style export trimming, but a price push would result instead. Not a price push according to the 5% nominal net trade deficit, but according to the volume net trade deficit of something like 20%.

Exporting nation dollar debts are shrinking (down 7%) relative to nominal dollar trade (up 25%) by a third. They are becoming far easier to pay off and thus the inducement to sell product for dollars rather than consume it locally is falling. As these dollar debt payments are made, the creditors in Europe and Japan (Korea, Malaysia, and China too) are going to have less dollars to use for purchasing dollar assets, but they will have more dollar income from the growth of their portfolios from prior trade deficits.

Thus while Japan has purchasing power abroad, the US faces purchasing power from abroad buying in the US at the same time Americans are also competing for the same production as import supplies dwindle and must be replaced with local manufacture. Thus prices are destined to rise both from lack of import supply and an increase in export demand. Where deflation would continue further is in the creditor nations where asset values will fall while the import flow into the US is diverted in part towards them.

The US is in a negative investment position, income flow negative, and trade flow negative.

Japan was strongly positive in investment position, income flow positive, and trade flow positive.

Should anyone consider for a second that out price patterns should follow Japan's?

Mr GreshamI/D: Effects of debt on#4948903/06/01; 15:00:27

http://www.bearforum.com/cgi-bin/bbs.pl?read=119257

Here is a good discussion among Da Bears, which I hope you will not find excessively long, if I post the best parts from each contributor:

M. Uncle Walter
"Which of these is wrong?
"Am considering renaming meself Pooh, Bear of Little Brain. The following pair of statements have been bothering me for at least two years now.

1. The debt level in dollars is awesome. Therefore people will become wary of the dollar, leading to devaluation, hence inflation in the U.S.

2. The debt level in dollars is awesome. Therefore we'll see a huge default rate, wherein "dollars" (whatever they are) will vanish into thin air, increasing the value of remaining dollars, hence deflation in the U.S.

Perceptive bears please explain which of the above statements is WRONG! (You may prefer to explain that both are wrong. I hope that few bears claim that neither is wrong. )


Ripley
"Does inflation preclude default?
I don't think that it does, despite the expectation that one will pay off their debts in depreciated dollars in an inflationary period. If a debtor is unable to pay off their debts, or at least pay them off at a rapid enough rate to satisfy their creditors, the inflation or deflation rate is irrelevant. The debtor will default and/or file bankruptcy.

A related question concerns the macroeconomic effects of such defaults on a large scale. I would argue that as individual debtors default, the quality of securitized debt will decline, and so the purchasers of such debt will demand a risk premium. I'm trying to consider the effect of exchange rates here. Suppose that US debt is lower quality than European debt. Would the risk premium lead to a weakening of the dollar against the Euro? I am inclined to think so, though I may be wrong. There has to be a purchasing power parity argument that I can use to compare these "baskets of debt", but I haven't thought it through.

It comes down to the scale of defaults and the type of debts defaulted upon, and we won't know that until it happens. Consider Xerox's problems as a sort of "canary in the coal mine" on the corporate level and 125% mortgages to be the same sort of "early warning" for individuals.

I'm sorry that I haven't been more helpful.


J.Buck
"1. The debt level in dollars is awesome. Therefore people will become wary of the dollar, leading to devaluation, hence inflation in the U.S.

2. The debt level in dollars is awesome. Therefore we'll see a huge default rate, wherein "dollars" (whatever they are) will vanish into thin air, increasing the value of remaining dollars, hence deflation in the U.S.

Which one is "wrong"?
Eventually both could come to pass -- even one leading to the other.

However:
Right now I see #1 being the outcome we are looking at, with "things" the way they are.

Doug Noland (prudent bear), for example, leads the crowd looking for deflation. It seems to be the view most hold.

However, we cannot ignore key "elements of control" in place...like the Fed (Greenspan in particular).

The debt issue is just too horrendous for Greenspan to let market forces "take care of it". He has, and will continue to, look to inflate his way out of trouble by providing liquidity at any and all cost in order to short cut a debt crisis coming to a head.

All one needs to do is look at one example....LTCM and see which way his instincts go. Market forces are not what he sides with when the chips are really down...his rhetoric, notwithstanding.

Debt, if it can be "refinanced", can be rolled over (in the broadest sense of the word) repeatedly (and indefinitely) as long as the world economies remain -- relative to each other -- basically the same as we have now.

If Europe (for example) were to take over as the world economic leader, then deflation would be the likely outcome, here.

I sincerely believe that the Fed sees NO choice but to prop up the banking system -- and credit market in general...period. While AG is at the helm, I have NO doubt he will/would risk a revisit to the stagflation of the 70s in order to (hopefuly) avoid repeating the 30s (or Japan). If Volcker was at the helm, I think it might be different...though I cannot feel sure.

With AG, I am pretty positive. If you look at his 14 years as the Fed Chairman, his "successes" (and kudos) have come when he cut...and his "failures" when he raised.

His fed funds "ammo" can only run to zero -- but -- he can run the presses forever, like he did leading up to Y2K.

Faced with a disaster, he will inflate before he would take the pain to set the system right.

Someday, the pain will be unavoidable. But as long as the US is -- relative to the rest of the world -- the engine for the world economy, he (or a successor of a similar mind) can probably keep the balls in the air.

Anyway, that's my 2 cents worth (in 1970 dollars <>)

JB

nemax-90 {from Germany}
"Wouldn't it be reasonable to assume, that defaulting debtors lead to a significant decrease of "negative dollars" which will lead to a tremendous devaluation of equity and real estate assets (their natural counterparts) to keep the balance on the ledger?. I think, a deflation of the bubble, leading to more purchasing power with respect to stocks and real estate must not be mixed with an appreciation vs. foreign currencies i.e a rising dollar.

Will the foreigners, that so far delivered goods in exchange for paper ("investment opportunities"), demand more dollars for their merchandise in the future? I don't think so! What should they do with all those dollars? Naturally, if the US goes into R-mode, the demand for foreign goods will decline (which will have serious ramifications in those countries heavily depending on the US as a buyer). I'm afraid, that the dollar could - theoretically - lose its value altogether outside America. Of course this development will come to a halt as soon as the trade imbalances are corrected. In a slowing economy this may be achieved relatively soon, after all, the imbalance, however huge it may appear right now, represents only a small fraction of the overall GDP.

My prognosis:

There will be serious deflation in the USA, particularly in real estate and in stock prices.
There will be inflation in the price of imported goods
The dollar will drop vs. foreign currencies UNTIL a new equlibrium is found. I believe, it will lose to the tune of 25% to 40% vs major foreign currencies before it bottoms.
Once the demand has fallen because of the economic slowdown, the exporters (oil?) will be forced to lower prices which in turn will have consequences on their home turf.

regards, nemax-90

PS: Of cause, I'm not an economist - so consider the above just my personal, subjective musings about this issue.

Vilnis {in Latvia}
"Both statements are in part correct.

I forget who said this but: It is the hallmark of true genius to be able to consider two apparently inconsistent ideas and use them both to advantage.

The two ideas:

1. The debt level in dollars is awesome. Therefore people will become wary of the dollar, leading to devaluation, hence inflation in the U.S.

2. The debt level in dollars is awesome. Therefore we'll see a huge default rate, wherein "dollars" (whatever they are) will vanish into thin air, increasing the value of remaining dollars, hence deflation in the U.S.

The view from Riga:

The confusion, IMHO, comes from the fact that we still tend to think that the dollar is real, as in gold backed or restricted in some other way as to supply: i.e., restricted by the free market as for instance by the bond vigilantes or restricted by the moral character and good sense of America's political leaders. In such circumstances there would be lower prices in certain sectors as for instance in shares and real estate most prominently.

If, on the other hand, there is no restriction on the creation of dollars then the dollar would, as all paper currencies historically have, revert to its intrinsic value: the value of paper. There are many historic examples of this, most recently the USSR/Russia. In every case, it has been a political decision.

So, IMHO, it comes down to predicting what the political leaders of the USA will chose. This is not to say that they will chose one or the other. They can choose a combination or some middle ground. I do not, however, believe it is an economic issue. I think it is purely a political issue and one that will be based on the good sense and moral character of the American people. AG and Slick Willy reflect a significant part of the society that produced them. Every society has the leadership it has earned.

The answer is to be found by looking in the mirror.

My opinion? I am short the USA$, long the precious metals and short companies I expect to go out of business. I do not claim any special merit for my position and I am not the first person who has followed this plan. It appears to me that shorting companies that are merely overpriced could, if the USA$ really falls out of bed, be a financial disaster. If you are short USA shares, you are long the USA$. That may be part of the reason that the Prudent Bear Fund has done so poorly relative to the drop in NASDAQ or the Internet shares or________. To answer your question again: I think there is merit to both positions and investment decisions need to take that into consideration.

Short/m/2/0 (but hold real money)
Vilnis

slingshotJourneyman Msg.49485#4949003/06/01; 15:20:00

Visited the webleyweb site to read article. Then scrolled down to Holtzman Msg. 49474. Everything from human nature, fiat money and the history of Rome. Very informative, but very dispersed. May I add some JUNGLE RULES and try to bring it all together. They do apply to Gold if you think about it.
The bad guy wants what you have.
You will always be attacked when conditions are least advantages to you and most advantages to your attacker.
If it can go wrong, it will.
Proper preparation prevents poor performance.
GO LIGHTLY.
Your most powerful weapon sits on your shoulders.
You reap what you sow.
Look for trouble and you'll always find more than you can handle.
There is always someone sharper, tougher, meaner, nastier, Hungrier, and more prepared than you.

To Note; On human nature. If you ever been confronted by a street gang. It can get very violent in a heartbeat.

Slingshot

Mr GreshamAddendum#4949103/06/01; 15:46:42

So much, so much here today. You outdo yourselves once more.

The inflation/deflation question from below moves forward in my mind to a question of a great wealth transfer (as these things always are). Think of the U.S corporate jungle, with its prey and predators awaiting a time of famine.

"Moral hazard" turns into market opportunity for these players. Some organizations will maintain enough of a balance sheet and cash flow to be chosen for survival and growth by swallowing the market share of the losers.

When AG inflates money supply, buys commercial paper of certain corporations, bails out certain mutual funds, he will be writing the structural framework of the recovery years. Those will be the equities to buy with conserved capital at turnaround time. The rest will sell for scrap value.

(How best to conserve capital to the other side of stagflationary debt default scenario is our topic here.)

So, the big banks, big PC box- and chip-makers, big retailers, don't need to have pristine 1955-style balance sheets. They've already leveraged "moral hazard" into their financial tightrope-walking. Somewhat like the S&L workout, they just need to be TBTBATF (that's "be allowed to fail").

(If they misjudge the OVERALL level of default, beyond what Fed & FDIC & GSE's etc. can handle, well that's another "brave new world" for them to operate in, kind of like Russia in the '90s with industry at least in possession of its productive capacity, if not the traditional means of financing. Right now, they would probably only be strategizing vs their immediate competitors in same or similar industries.)

They would see it as just needing to outrun the others in their industry, rather than outrun the bear.

andrew the kiwiMIDDLE EAST LURCHES TOWARDS WAR WITHIN 3 MONTHS#4949203/06/01; 15:51:14

NEWS BRIEF: "Threat of War", Israel National News, Arutz Sheva Commentary March 3, 2001, http://www.israelnationalnews.com/news.php3?id=702

"Military historian Dr. Aryeh Yitzchaki was asked today how he reads the reported Egyptian decision to call up its reserves for "exercises." His response: 'All the classic warning signs are there, and it is clear that we are poised for war, possibly within two months. I don't want to scare anyone, but as opposed to IDF Military Intelligence, my opinion for the last two years has been that war will erupt in the spring of 2001, and it will involve not only the Palestinian Authority and Hizbollah, but also Egypt, Syria, and Iraq. The Egyptian Army does not need reserves - it's an army built on its standing force, and therefore Israel's denials of the Egyptian call-up are not relevant. The Egyptian Army is poised for war; it has created new regiments, has been training intensively, and has acquired the most up-to-date American equipment..."

As we reported in NEWS1056, the U.S. House of Representatives' Task Force On Terrorism And Unconventional Warfare, entitled, 'Approaching the New Cycle of Arab-Israeli Fighting', submitted to Congress on December 10, 1996, spoke of this upcoming war. The report said: "... Syria, Iran, Iraq, Pakistan, and Egypt are planning and building for a final, devastating war of annihilation against Israel. This includes acquiring nuclear, biological and chemical weapons (NBC) in a mix with conventional weapons, e.g., tanks, aircraft, and soldiers, all in massive, overwhelming numbers." [P. 43]

This line-up is now formed against Israel, with the lone exception of Pakistan. Syria, Iraq, and Egypt are now on full military alert, and hardly a week goes by lately within some Israeli or American official expressing concern over the preparations Iran is making to acquire nuclear weapons. Further, Iran has been supplying Hizbollah guerillas and terrorists with weaponry that will allow them to attack Israel from Lebanon in a conventional manner.

Notice the information here that Egypt is "forming new regiments". In addition to other war signs, forming new units, or reorganizing units and communications is usually considered a definite sign of war. Units and their communications needed to fight a hot war are very different than those needed in peace time.

Further, military "exercises" are very often the prelude to attack, because units can come up close to the enemy's border without causing a reaction from their enemy because they are just engaged in "exercises". This tactic is one of the oldest in the books, and is not fooling Israel, I am sure, given the general high state of military readiness and tension throughout the entire region. The only people who will be fooled by these "exercises" will be the gullible Western public.

Egypt is actually the latest Muslim nation to fully mobilize her forces. Syria mobilized her forces last December 12, 2000. This action immediately caused Israel to mobilize her forces fully. Syria has also encouraged the Hizbollah fighters in Lebanon to attack Israeli towns and villages on the northern border. Thus, Israel is threatened by Egypt on the Southeast and by Syria on the North and Northwest.

While I have not detected any military action on the part of the Jordanians, we do know that they have refused to renew their diplomatic post with Israel. Their "peace" with Israel is mighty cold these days.

The Palestinian Authority is also reorganizing their paramilitary forces -- the PLO -- to prepare for war against Israel from within. In this story reported above, we read: "PA Communications Chief Imad Falouji told a PLO rally in southern Lebanon on Friday ... that the PLO is now reorganizing to escalate the violence against Israel: 'We are going back to the '60s, '70s, and '80s. The Fatah Hawks, the Kassam Brigades, the Red Eagle, and all the military action groups are returning to work'." [Ibid.]

In the U.S. House of Representatives report quoted above, we see that the PLO has been assigned the task of attacking Israel from within, causing as much infrastructure damage as possible, preventing Israeli troops from moving freely to the borders, and forcing regular military units to turn back from facing their external borders to fight the PLO within. This action would weaken Israel's ability to fight against Syria, Iraq, and Egypt whose forces will be attacking from across the border.


NEWS BRIEF: "Iraqis out-smarted U.S.-U.K. Smart Bombs", by Ian Bruce, The London Herald, http://www.theherald.co.uk/news/archive/28-2-19101-0-24-33.html, February 28, 2001.

"IRAQ managed to decoy 20 of the 25 special standoff weapons dropped in the joint US-UK raids near Baghdad two weeks ago by fooling their guidance systems into exploding hundreds of yards short of their targets. NATO intelligence sources say only one of the five radar sites and command centres attacked was destroyed, two others sustained damage, and two were unscathed and remain operational. It is believed that the Iraqis used a combination of jamming and false signals to confuse the new Raytheon joint standoff weapons' global positioning system. The 40-mile range smart bombs depend on a last-second satellite fix to guarantee a direct hit."

"The US carried out a dress rehearsal to test the weapons a few days before the actual raids on Iraq. The 66 bombs launched by US navy aircraft achieved 100% success. In [real] action, they chalked up an 80% failure rate ... With global positioning, the weapons should be spot on target. But if you can emit a powerful enough signal to alter the satellite information being received by the bomb on its final approach, accuracy goes out of the window. Against hardened military sites, you need a direct hit to be sure of a kill. An aim point error of just a couple of hundred yards spells the difference between total destruction and a light peppering with shrapnel and minimum blast damage."

Apparently, the Serbian Communists who fought against U.S. forces have been sharing data with Saddam Hussein. Serbian forces were able to learn much of our technology during this air war against them, and developed certain strategies that countered much of our technological advantage. This article concludes with just such a strategy:

"The latest Iraqi trick of targeting allied aircraft with long-range radars and then launching missiles at them from unrelated positions was pioneered by the Serbs during UN intervention in Bosnia and Nato's aerial assault during the Kosovo conflict. They [Serbs] downed one British Harrier, an American F16 and a Nighthawk F117, the first stealth aircraft ever shot down in combat. US sources say privately that it is 'only a matter of time' before the technique brings results for Saddam Hussein."

As I stated in NEWS1474, Hussein's military commanders tested US and Israeli defenses and intelligence capabilities on February 22, when he took his theater missiles right up to the last stage of firing before he shut them down. Now, Iraqi military commanders know exactly what we can and cannot detect, how much time it takes us to react, and from which direction our counterattack will come. All of this is a prelude to war; and now, we discover that Iraq has learned to defeat our smart bombs and to inflict some casualties among the American and Israeli attacking aircraft.

But, the worst revelation is yet to come -- Iraq is reportedly nuclear-capable right now!

NEWS BRIEF: "Was This Saddam's Bomb?", Prophezine Newsbites, 26 February 2001, originally in www.sunday-times.co.uk/news/pages/sti/2001/02/25/stirevnws01015.html

"Intelligence agencies, including Israel's Mossad, insist that Saddam has never had the technology or the fuel to fulfil his ambition of creating a nuclear arsenal. Yet Leone, and other defectors who have corroborated his story, insist that Saddam not only has nuclear weapons but has tested them."

If this story is true, then Saddam Hussein has the capability right now to annihilate Israel, if he can only deliver the warheads he is reported to possess. Thus, the story of the Iraqi theater missiles recently parked near the Syrian border take on greater significance. Remember the charade we all were forced to endure as United Nations "inspectors" were tromping all over Iraq to discover any evidence that Hussein was building nuclear, chemical, and biological weapons, so we could destroy them? Remember how Hussein regularly defied the inspectors, with the U.N. meekly submitting to his belligerence? I believed then that this whole inspection nonsense was a public charade, and now this story confirms it.

Iraq has reportedly been mightily assisted in this effort by the Russians, and were able to buy the fissionable material from the International Black Market. Even as his people starved to death, Hussein was able to spend oil money like a drunken sailor to buy what he needed, for bribing officials from Brazil to South Africa when he needed, and to hide his weapons program from a United Nations inspection team that always gave him more slack than they ever should have given.

Remember that Hussein in the highest-ranking Freemason in the Arab world which means that he is fully cooperating with the Illuminati in its plan to produce Antichrist. Thus, Hussein's Masonry plus his leadership in the plan to produce Antichrist is also the reason President George Bush [Senior] pulled American forces off the attack on Baghdad, just when they were within 72 hours of overthrowing his regime. Now, you can see the full picture emerging, can you not?

As this story unfolds, we learn that Hussein likely has three warheads of three different technologies, each one more advanced than the previous one. This would give him a total of nine (9) nuclear warheads. "He [Iraqi scientist] said it worked on the principle of the Hiroshima gun-type bomb, in which high explosives drive pieces of highly enriched uranium together at high velocity. This triggers a nuclear explosion. Leone's design was unusual. The uranium was contained in a series of finely engineered tubes, like the control rods of a nuclear reactor. It was not the type of design one might find from a search of textbooks or the internet." Hussein has three of these Hiroshima gun-type atomic bombs.

Later in this interview, the Iraqi scientist claimed that Hussein now had three implosion nuclear warheads and three thermonuclear weapons. As I read the article, I attempted to keep a skeptical mindset, but was eventually won over by the journalist's interviews with Western experts on the many different technical aspects of the scientist's story. These Western experts examined the Iraqi diagrams and found them credible, other experts examined the claims that the material was bought on the Black Market, and found them credible, and American experts in satellite capabilities were able to confirm this scientist's claim that the Iraqi's had carried out a test explosion before the Gulf War. Finally, this journalist interviewed other Iraqi scientists who had defected, and was able to verify that this scientist was who he said he was, and that he was in the position of scientific leadership on the project to be able to know what he claimed to know.

Thus, this story claiming that Iraq now has nine nuclear warheads seemed exceedingly credible to me. But, American, British, and Israeli intelligences have been telling the world for a very long time that Iraq does not have nuclear capability now, and is probably two to three years away from developing such capability. Now that we know they have been publicly lying to us all this time, the question is whether they were also lying to key leaders within their respective governments.

However, the ultimate verification of the truthfulness of this story seems to lie in the reaction of Prime Minister Elect Ariel Sharon. This recent short story seems to indicate the truthfulness of the claims of this Iraqi scientist.

NEWS BRIEF: "Sharon: A Plan To Strike Iraq", British Sunday Times, February 26, 2001.

"The British 'Sunday Times' daily reported in its Sunday's issue, reporting Israeli military sources that the Israeli prime minister elect Ariel Sharon gave his instructions to the Israeli army chief of staff Shaoul Mofaz to prepare for directing an early strike to the missile- launching area in the west of Iraq.The Israeli radio quoted these sources as saying to the British paper that Sharon is planning to deploy neutron ( tactical) bombs to target this Iraqi area and destroy it, as intelligence information reported that Iraq is about to attack Israel by mass-annihilation weapons."

I find it hard to believe that Israeli Intelligence did not know that Hussein already has nuclear weapons, or that they did not share this information with Israel's highest leaders. However, Prime Minister Elect Sharon might have been attempting to assure his Jewish citizens that he was on top of the situation, and would act to preemptively take the nuclear warheads out. The one key piece of information this news story does give us is confirmation that these nuclear weapons are placed on top of the theater missiles Hussein has placed at the Syrian border, well within range of Israeli targets.

This story also confirms that Israel does possess the Neutron Bomb, and fully intends to use it during this upcoming war. We can also see the importance of Hussein testing the Israeli intelligence capability, the reaction time of the Israeli military, and the way in which American and Israeli bombers will attack his missiles. Hussein has spent over $10 billion and 20 years of work in developing these nuclear warheads. Hussein now does not want Israel to destroy the missiles on which these warheads will be launched before he can fire them. He fully intends to fire these missiles before Israel or America can destroy them.

THIS WOULD BE THE CATALYST TO END THE CURRENT FINANCIAL STRUCTURE. WHAT ABOUT THE IMPLICATIONS FOR GOLD, SILVER, OIL,.....

tg(No Subject)#4949303/06/01; 16:07:16

I am hoping some of the great minds out there may help.

My hypothesis is that during any periods of substantial inflation, the savings rate of US citizens was generally well into the positive ( and probably the same for Weimar Germany). Anyone have any figures

With negative savings rates, there is not enough liquidity about to force up prices, let alone room for the over indebted to take up more borrowings, no matter how attractive the rates. The psychological feeling of wealth is now fast disappearing in the U.S and people are no longer as confident about taking on debt.

Simplistic, I know. But valid none the less.

PS Greenspan is not the messiah, he is just a very naughty boy

PandagoldHyped tension in the ME#4949403/06/01; 16:35:26

All you are likely to get is a quick fire knock-out strike against Iraq.(which would probably be done by the US and the UK) All this is Israeli propaganda to serve as an excuse.

The other Arab nations, like Egypt, will need their armies on alert not to attack Israel but to put down insurrection among their population who are likely to attempt an overthrow of their 'puppet' regimes when Saddam and many Iraqi people are 'murdered'. Which is one of the main reason that it wasn't done at the end of the Gulf war, or up until now.

Israel has the most devastating arsenal of weapons of mass destruction in the world next to the US, and the Arabs know it.

If Israel is ever destroyed it would be from within, and for that the whole Arab world would have to hold out an olive branch and leave them completely at peace, and withdraw all their labour - an unlikely event.

If there was any real substance to all this, gold would have moved up. It didn't do much in the Gulf war because even then there was 'no contest' and America, and TPTB, knew it.

tgpandagold#4949503/06/01; 17:07:46

Say it, as it is.

I like that in you

Chris PowellOperation Goldcrest begins in Belgium#4949603/06/01; 17:51:09

http://groups.yahoo.com/group/gata/message/696

Start your own operation, wherever you are!

http://groups.yahoo.com/group/gata/message/696

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.

Chris PowellA South African appeals to U.S. treasury secretary#4949703/06/01; 17:52:39

http://groups.yahoo.com/group/gata/message/698

Now if only the South African government
can raise these issues diplomatically
with the United States.


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.

714tg re: savings rates#4949803/06/01; 17:54:17

According to Gary Shilling in his recent book "Deflation", savings rates RISE in deflation, and drop in inflation. If your holding a currency that's falling in value, why save it? Spend it on something tangible, like property or gold, that holds its value. Interestingly, with Japan's deflation over the last ten years, their savings rates have risen. Fwiw.
JourneymanIt's true, people DO get struck by lightening @slingshot msg#: 49490#4949903/06/01; 19:26:05

All those things you suggest about the "jungle" are good advice.
But you rarely need them. I've carried what most people would
consider extremely large amounts of cash around the world on my
person for over twenty-five years and have never been robbed.
Neither have any of my associates. Most cops retire without ever
firing a single shot in the line of duty.

How many times have you confronted a street gang? When was the
last time?

Danger of violence is a matter of frequency, and the idea we are all in
imminent danger is the monument to government-related violence - - -
AND the media's "dramatic imperative."

AND a large proportion of dangerous street gangs persist because
they are protecting their drug turf. In fact, a large percentage
of the "crime" that actually exists, perhaps more than 60%, does
so because a certain very arbitrary group of drugs have been
turned into so-called "controlled substances."

Relax. Even so, you probably won't be robbed.

When we carry money, we worry more about being robbed by
"organized crime with a flag." A few of my associates have been
robbed by these highwaymen.

Regards,
Journeyman

JourneymanLightening struck; addendum#4950003/06/01; 19:33:34

Much of the danger from other humans stems from "clique selfishness," that is, each group attempting to take care of their own at any expense.

This is a development of modern populations that are too large for face-to-face knowledge with each other - - - usually in combination with a lack of understanding of the advantage of trade because "division of labor" makes such trade a win-win situation.

Regards,
Journeyman

SHIFTYRandy (@ The Tower)#4950103/06/01; 19:56:44

Randy did you drop Farfel a note?

$hifty

CanuckTo other novices#4950203/06/01; 20:19:43

From ORO earlier;

"Market participants will prefer transparency because it is favorable to all parties, unless there is mutual interest in hiding this information from the public. Such mutual interest can only come from a condition in which bankers are overleveraged, having lent out too much of their client's gold, the major buyers still have outstanding delivery obligations owed by the bankers that can not be filled if gold depositors withdraw their gold, producers have oversold their future production and stand to become insolvent (see Ashanti and Cambior) if gold prices rise, and regulators have not filled their mission of regulating the industry and wish only that the system survive till they retire."
--------------------------------
This is a very, very good statement, please read and understand.

There is not transparency and openness in gold transactions because of the probable overextention of the sellors thus they must be quiet(and probably crooked). Buyers are quiet because they accumulate; if they boast of buying, it will inflate the price of gold. Earnest buyers love the sell, sell scorn of the media.

It seems (from the Another/Foa archives) that China and oil are purchasing gold. It seems Japan and Russia are possible buyers, maybe more than they let on. See the movement of gold from fiat currency to hard currency . This movement is the line that Another speaks of from South Africa through ME to Asia.

The picture becomes clearer, yes.

CanuckTo other novices#4950303/06/01; 20:27:42

Further,

It seems (from earlier today) that the Bank of Japan has warned the US (in 1997) that 'dumping' of US debt will occur if the bullying of the USD were to continue.

However with some 60% of reserves in USD one cannot boast of the 'dumping' of US debt without taking a beating at home. However, QUIET accumulation of gold (international currency of last resort; claims of debt, zero) while reducing foreign held debt may be 'in the cards'.

QUIET buying, QUIET buying, and when the hammer falls it will truely be earth-shattering.

Canuck(No Subject)#4950403/06/01; 20:31:28

So in conclusion WHO is buying, anyone looking to get out of the USD tightly strung noose around their neck.

So how does ME, China, Russia, south-east Asia and Japan look for starters?

Thoughts?

Canuck.

Tree in the ForestPandagold: War#4950503/06/01; 20:47:07

I do not agree with you Pandagold. There may be plenty of hype but this will not be a small skirmish. It will be bigger than desert storm. I have info from other sources pointing to a larger war, possibly bio-chemical and thermonuclear. And terrorism in the US also possibly bio-chemical and thermonuclear. We might be looking at WWIII but probably not an Armegeddon like scenario. Defense stocks have been moving up for over a year now because smart money knows what's coming. Also see my previous post with a link to K wave analysis.
slingshotJourneyman msg.49499#4950603/06/01; 20:51:34

I agree the danger of violence is a matter of frequency. The illusion created by the media is hyped and gives creditability and approval to the actions of the goverment to inflict violent and illegal acts upon the people. Can you say Waco or Taxes. Goverment, just one more reason to buy gold. The gang incident, Once. Drove into the wrong part of town I was unfamilar with. While back, Just a good scare. More alert of my surroundings.
Good night all!
Slingshot

SHIFTYKremlin stalls platinum, rhodium quotas#4950703/06/01; 22:26:04

http://www.bday.co.za/bday/content/direct/1,3523,806030-6094-0,00.html

The delay is due to technical and legal reasons rather than rivalry between bidders for the quotas, sources claim
MOSCOW Russian action to finalise export quotas for platinum and rhodium has been stalled at the legal department of the Kremlin, Moscow sources say.

The new source of the delay, sources claim, is technical and legal, rather than continuing rivalry between bidders for the quota among Russian platinum producers, banks, and the state stockpile agency Gokhran.

Larisa Brycheva, the powerful head of the presidential legal department, declined to respond to questions. Brycheva provides legal clearance of all presidential documents before signing; her judgments can involve important policy issues, and shift the balance of influence in the Kremlin between contending interest groups, such as the platinum producers, the Central Bank and Vneshtorgbank, and state stocking and selling agencies like Gokhran and Almazjuvelirexport.

Nikolai Kozin, vice-president of Koryakgeoldobycha (KGD), the leading alluvial platinum producer, said he believes all the necessary approvals were given to the quota authorisation documents by the last week of February. KGD has been seeking its own export allocation to relieve the pressure it felt last year from Gokhran to deliver its platinum at a deep discount to the spot market price.

The mining company can produce between 130000oz and 200000oz of platinum a year, depending on the delivery, price, and financing terms it can negotiate. Last year, rather than sell to Gokhran, the company decided to stock metal itself, and wait for this year's quota decision.

Kozin said he is certain "it is not Gokhran that postpones the signing of the quota documents. Probably the delay is due to the purely technical reasons." He said he does not know when the quotas will be approved, or this year's shipments begin.

International market speculation that the quota signing for platinum is imminent halted the rise of spot-market prices for platinum last week the price peak was just under $615/oz , with resistance reported by traders at $625.

It fell to just below $577, with support reported at $560.

According to Yevgeny Ivanov, chairman of Rosbank, the quota documents may be signed "any day now". Rosbank is part of the Interros group, which controls Norilsk Nickel, Russia's largest producer of platinum group metals.

The group has lost influence and fallen afoul of several branches of the Putin administration in recent months.

Norilsk Nickel is delivering palladium to contract customers without delays, on the authorisation of a 10-year quota. Norilsk Nickel has asked the Kremlin this year for a five-year quota for platinum and rhodium, but Ivanov says he does not know if this will be granted.

He said the delay is "due to the lack of final decision of the state bodies on the volumes of quotas for state sales of platinum group metals".

He could not say whether it is Gokhran or the Central Bank that is the stumbling block. Last year, the Central Bank was not allowed to export any platinum, and it lost control of the bulk of its palladium stock to the Finance Ministry and Gokhran's chief, Valery Rudakov.

A substantial volume of this palladium is reportedly sitting in German bank vaults, where it was deposited by Rudakov as collateral for loans. Industry sources expect to see another tranche of up to 1-million oz of palladium released from this source to Switzerland by the end of March. The Russians and their German bankers performed a similar manoeuvre at this time for the past two years. The Central Bank has said it wants to resume buying of domestic platinum, in conjunction with the state-owned Vneshtorgbank. Vneshtorgbank received export authorisation last year for 161000 oz of platinum, and it applied for a larger quota this year.

Regarding Russian shipments of rhodium this year, Ivanov said he is confident that rhodium will be placed on a 5year quota, eliminating firstquarter delays in 2002. According to Johnson Matthey's interim review of the trade, last year Russian rhodium shipments jumped to 280000oz, a record for the decade.

Ross Norman, of The BullionDesk.com in London, said he expects this year's sales to be much closer to his estimate of annual production at 115000 oz. Other analysts have put the annual output figure for Russian rhodium at between a low of 70000 oz and a high of 118000 oz. "We believe Russian stocks (of rhodium) will be in a similar state to their platinum ones not big, six to nine months' production at best. So rhodium prices may, like its sister metals, remain pretty steady."

Russian production and stockpile figures are state secrets, and there are wide divergencies between the published estimates.

SHIFTYYGM#4950803/06/01; 23:32:32

Hey Ken you still with us?

Shifty

working-kirk(No Subject)#495093/7/2001; 0:49:45

Journeyman, you're talking nonsense.

First your chances of being robbed by a street gang is a lot more than being stuck by lightning.

You asked when was the last time you were confronted by a street gang?

Today. Actually I confronted them. They were confronting somebody else. They were asking some lady for spare change and it was just setting them up to robbed them. I told them quietly to leave those ladies alone. They did but then I fought with them before. You see, I grew up with gangs and violence and worse. I am not the toughtest nor the meanest
but,... I am a black male who grew up in the worse ghetto of Boston and I've managed to pass my 40 birthday without ending up in jail or dead. To my knowledge, I am the only one who beat the odds against me.

So I not only know how to fight but I am very very lucky.
Would you say you would be as lucky facing the same situation. There are others. You could have been a child growing up in an war-zone, or the poverty of the third world

I think you're making a feww basic mistakes. First you assume the risk of assault by is gang is low and so it probably won't happen to you. Second I get the impression you'll be able to fight them off.

Slingshot listed these rules

> The bad guy wants what you have.
> You will always be attacked when conditions are least
> advantages to you and most advantages to your attacker.
> If it can go wrong, it will.
> Proper preparation prevents poor performance.
> GO LIGHTLY.
> Your most powerful weapon sits on your shoulders.
> You reap what you sow.
> Look for trouble and you'll always find more than
> you can handle.
> There is always someone sharper, tougher, meaner,
> nastier, Hungrier, and more prepared than you.

> To Note; On human nature. If you ever been confronted
> by a street gang. It can get very violent in a heartbeat.

Those are wise rules

I would add my own personal observations

1.) No matter what much violence or chaos you have encountered in your life, you will always be very surprised when the next episode pops up. Accept that you will be surprised. That way, you will be quicker to act. Most people freeze because they are surprised. It's part of the flight or fight instinct. You freeze and your attacker have the advantage. So When I am surprised I start to fight immediately. That surprises your attacker because most people do freeze. When they are surprised, you then have the opportunity to run away safely or continue fighting. (By the way, if you haven't been in these situations if best to fork over the money. Like Slingshot says: It can get ugly REAL Fast.

2. Using your head and thinking is good. Instinct is better! When you think, you try to go through several options. Instinct immediately picks one and it is the one that will get you through alive with the least amount of harm. Note: I didn't say unharmed. Sometime the situatiion you're in is so bad, there is no way to get through it unharmed.

The best book I read about using your instinct in any danergous situation is by Gavin Becker and it is called:
The Gift of Fear.

In today's situation, my instinct told me several things.

1.) If I got invovled the gang would be surprised and wonder
what my relationship was with these two women

2.) Even through they were going to rob them the situation was: The robbery would have to take place fast and they would be pressed for time.

3.) By my stepping up, I let the women and other know this was a potential robbery. These people like overwhelming odds. Even if noone else got involved the number of people who knew there was a robbery going on and so the odds would appear more even

There have been other times when I've seen somebody being robbed and my instinct told me to grab the victim's hand and start running. I can never say what will happen but I do trust my instinct

Since this is a gold forum I should reference gold in some way. At this point. Few people recognize gold. But if things get chaotic, you will need the same wits to keep your gold and you would have to in order to keep your life when being robbed by a gang. SInce I can't fortell the future, I plan to use the instincts I developed in street fights when paper money becomes worthless.





Journeyman (03/06/01; 19:26:05MT - usagold.com msg#: 49499)
> It's true, people DO get struck by lightening @slingshot msg#: 49490

> All those things you suggest about the "jungle"
> are good advice. But you rarely need them. I've
> carried what most people would consider extremely
> large amounts of cash around the world on my person
> for over twenty-five years and have never been robbed.
> Neither have any of my associates. Most cops retire
> without ever firing a single shot in the line of duty.

> How many times have you confronted a street gang?
> When was> the last time?

> Danger of violence is a matter of frequency, and the idea > we are all in imminent danger is the monument to
> government-related violence - - -
> AND the media's "dramatic imperative."

> AND a large proportion of dangerous street gangs persist
> because they are protecting their drug turf. In fact, a
> large percentage of the "crime" that actually exists,
> perhaps more than 60%, does so because a certain very
> arbitrary group of drugs have been turned into so-called
> "controlled substances."

> Relax. Even so, you probably won't be robbed.

> When we carry money, we worry more about being robbed by
> "organized crime with a flag." A few of my associates
> have been robbed by these highwaymen.

Regards,
Journeyman

BelgianGold-story with a "motive" leading to mutual interests....(short version)#495103/7/2001; 0:57:35

Febr.'96 POG fails to break trough 414$ after an abnormal 2 years topping pattern. POG, was on its way up and something stopped it, in a very particular way. What ?
EMU was on the rails. Different European countries, where each one had a complete different Gold-History. A very strong divergence in their Gold-reserves, far as many different reasons. This divergence had to uniformised. Some Gold-Backing was decided for the Euro (ECU). The Gold vaults were opened and the reshuffling started. The previous Gold-reserves had to be aligned and homogenisased.
European nations had TOO MUCH GOLD ! An unkown amount of above-ground gold, became suddenly available FOR SALE !
The ideal MOTIVE for gold-actors to spin on a win-win strategy. Here we enter the oligopoly arena...

To be continiued...duty calls.

PandagoldTree in the Forest#495113/7/2001; 2:54:22

Tree in the Forest
I agree that things can always get out of hand. It could have done during the Gulf conflict — not from Iraq, but from the Arab and anti-US world.

But we are always in danger as long as the affluent West continues to rip off the third world (what a terrible euphemism), or a certain power hungry small ME nation wants to dominate the region, and deny people their human rights to live with hope and dignity in their homeland.

When you push people too far and they have nowhere else to go they will seek remedies, or revenge in ways unimaginable.

Think about it. You don't need nukes or rockets to fire them. All you need is a deadly virus which could be contained in a small phial in the pocket.

There need be no declaration of war, no warning. We in the UK are witnessing how a deadly virus can quickly spread among cattle, and yet this disease is well known to the world, and has been for a long time.

There could be people living among us now already equipped and only waiting for a signal. These people have nothing to lose, we have made it that way, and they would be prepared to die for their cause. This is the real danger -even if we won the 'fighting' war.

If I see gold rising significantly before towards the end of the year, and until the Euro is around level pegging with the dollar, and holding, then I will get a little worried ( as much as I have a financial interest in an improved POG).

What will be, will be. Fear not, as Sophocles said "To he who is in fear, everything rustles"

PandagoldChina and gold - latest#495123/7/2001; 5:04:46

http://www.futuresource.com/cgi-bin/art?010307/004430

FWN: 004430 CT
Precious Metals Update: China Aims to Set Up First Gold...

Mar. 7-MAR--


(BridgeNews) March 7, 0651 GMT/1551 JT
.................................................................
TOP STORIES:

Hong Kong Press: China aims to set up first gold exchange in June
Hong Kong, March 7 (BridgeNews) - China is aiming to set up its first
gold exchange in Shanghai in June, which will end the half-century
monopoly on gold trading held by the People's Bank of China (PBOC), the
central bank, the Chinese-language Beijing-funded daily Wen Wei Po's Hong
Kong edition reported Wednesday, quoting Dai Xianglong, the director of
the PBOC, as saying.
( Story .11181 )

Hecla sees 2001 silver output steady with 2000; higher prices
New York, March 6 (BridgeNews) - Hecla Mining Co. expects silver
production from its major mines in 2001 to be similar to last year's
levels, company officials said Tuesday. While opportunity to make money in
the gold market is very limited in today's environment, silver
fundamentals continue to look favorable and prices should perform better
over the next few months, they said.
( Story .18877 )

Gokhran sees Russia's 2001 gold output up on year at 147 tns
Moscow, March 6 (BridgeNews) - Russian gold output is likely to total
147 tonnes this year, a senior official at Gokhran, the State Depository
for Precious Metals, said Tuesday. According to the Union of Gold
Producers, Russia produced 142.5 tonnes of gold in 2000, up 13.2% on the
year. Gokhran also said it bought 25 tonnes of gold last year and had
already signed contracts for purchasing 18 tonnes of gold and 40 tonnes of
silver this year.
( Story .17637 )

.................................................................
OF INTEREST:

Taiwan Feb gold imports at 10.830 tonnes vs. 5.262 tonnes in Feb 00
Taipei, March 7 (BridgeNews) - Taiwan's gold imports totaled 10.830
tonnes in February 2001, compared with 5.262 tonnes in February 2000, a
statement released by the Ministry of Finance Wednesday said.
( Story .6016 )

Hong Kong Press: Tycoon Li to buy stake in gold refiner
Hong Kong, March 7 (BridgeNews) - Hong Kong tycoon Li Ka-shing's
Cheung Kong (Holdings) and Hutchison Whampoa were to increase stake in
gold refiner TemFat Hing Fung and its two subsidiaries, RNA Holdings and
Can Do Holdings, the Hong Kong Economic Journal reported Wednesday. The
newspaper quoted market sources as saying that the consideration would be
approximately H.K. $180 million.
( Story .23604 )

Japan's FX, gold reserves total $363.690 billion in February
Tokyo, March 7 (BridgeNews) - Japan's foreign currency and gold
reserves in February totaled $363.690 billion, down $529 million from a
month earlier, the Finance Ministry said Wednesday. A key reason for the
fall in foreign reserves was the decline in the value of non-U.S. dollar
assets, a ministry official said.
( Story .697 )

TopazA Yen for Gold.#495133/7/2001; 5:06:09

http://www.kitco.com/market/LFrate.html

Rates moving up again (4.2%ish)
Hist precedent (recent) 29 Sept 1999 = 9.93% (for 1 day only) 4's either side - Libor is the constant = 5% ish, Gofo CAN go negative.
POG on an upswing.

PandagoldChina/gold#495143/7/2001; 5:12:11

I forgot to add - so now we have a date - June. Not much time to make your decisions and get stocked up on those Pandas, or whatever takes your fancy. The Chinese population is over 1.000,000,000, and rising. And what is more impotant, the country and its people are getting richer which is a precursor to gold investment.

Have you also noted the gold purchases in Taiwan?

PandagoldBelow#495153/7/2001; 5:13:57

As you will have guessed the word is 'important' not impotent
WAC (Wide Awake Club)Ashanti cuts losses, reduces debt #495163/7/2001; 5:43:32

http://www.ftmarketwatch.com/news/story.asp?guid={E8F64758-4D0D-459C-BBA4-57AD48EA1FF7}&source=yahoo1

LONDON (FTMW)-- Ashanti Goldfields [UK:ASN] [US:ASL] has overcome heavy losses from hedging against a gold price rise in 1999 to announce a reduction in both losses and debt last year.
The Ghana-based gold mining company's hedge book of derivatives, which brought the company close to bankruptcy at the end of 1999, has since turned positive as the price of gold has dropped. See story on FT.com.



The company's shares are listed on the London Stock Exchange but were not trading on Wednesday morning (see FTMW chart). The stock rose 0.78 percent to $2.58 on the New York Stock Exchange on Tuesday.

Ashanti reported a narrowing in its 2000 pretax losses after exceptionals to $130.8 million, from a $183.6 million loss the year before. Year turnover was flat at $582.2 million, compared with £582.1 million in 1999. Meanwhile, the company said annual gold production rose by 11 percent to a record 1.74 million ounces in 2000.

Chief executive and group managing director Sam Jonah said: "The group exceeded its mid-year revised production and cost targets for the full year in an environment which remained difficult for the industry as a whole."

He said that it had been a challenge to reduce debt at the prevailing gold price, but the sale of 50% of the profitable Geita mine to AnloGold for $205 million, had helped cut the company's gross debt level from a peak of $693.3 million to $365.7 million.

Looking ahead, Jonah said Ashanti still faced a "formidable task" in reducing its debt. And he admitted the company was anticipating a shortfall in planned production targets for the first quarter of 2001 due to temporary production difficulties.

PandagoldI would go along with most of what Ackerman says#495173/7/2001; 6:28:46

www.gold-eagle/gold_digest_01/ackerman.030801.html

Felt this to be of interest
Of Babes, Bear Traps and Bullion

Sometimes we should cast aside our charts and listen closely to what Wall Street is saying. Then leap to do the opposite. Yesterday, for instance, there came such a potential telltale from The Street, Circe-like, in the form of a stunning blonde who held forth briefly on CNBC. She was seated behind a desk, so there was no judging how well she stacks up against the reigning callipygian of moviedom, Jennifer Lopez.

But above the waist she was very nearly the equal of Charlize Theron, or the young Tuesday Weld. Or perhaps Mod Squad's Peggy Lipton. Pressed into a public relations role by a retail institution whose name I did not think to write down, this vision of heaven made as improbable a Wall Street bear as any we could have imagined.

Yet, the Dark Side was the ostensible substance of her message, which took a deeply skeptical view of Amazon's unwonted, 2 5/8-point leap earlier in the day. Putting aside our suspicion that her employer has probably been touting Amazon's virtues throughout the last 50 points of its decline, we couldn't help but remark the fact of their pointed reluctance to view the company's shares as the perfect candidate for a meteoric rally.

Traditionally, is it not the role of the retail analyst to vent his suspicions of a dead-cat bounce when a stock that has fallen from $112 to $10 in a little more than a year summons the gumption to rise from the dead?

True, Amazon's surge may prove to be nothing more than the bear blip so many seem to suspect. But when it is greeted with such blunt incredulity by Wall Street's best and brightest, it behooves us to take note, in contrarian fashion, of other possibilities.

Such as: Maybe this rally is the real thing. Moreover, perhaps it presages a broader upturn in stocks that have been beaten down nearly as hard as Amazon. We should not be overly eager to infer this is so, but neither should we reject it out of hand, as our Wall Street centerfold evidently has.

To state the case more succinctly, we should be prepared to give the bull the benefit of the doubt, at least for the next 4-6 weeks, if the broad averages gain upside momentum in each of the four sessions that remain this week. Accordingly, my minimum target for the S&P 500 futures would be 1320.00, mid-way through an ugly downside gap on the daily chart that was made in mid-February.

If the March contract can close above 1320.00 by Friday -- with the stealth of a big cat lengthening its stride as it closes on its prey -- a fine trap will have been sprung on shorts, and they will be panicking from the opening bell next week to get 'em back. We shall see. (Late note: A repeat of the aforementioned CNBC segment reveals that Wall Street cuddlebun is one Sara d'Eathe, representing Thomas Weisel Partners.)

Meanwhile, it is not too early to consider what we shall do once this bear rally has runs its course and stocks resume their descent into the abyss. Gold bugs in particular should already be forming some useful ideas, given the promising surge of bullion futures from mid-February's lows.

Gold's further resuscitation will depend, of course, on the condition of the dollar, which after a decade-long bull market is finally starting to show signs of fatigue. Expect it to linger, then to gain momentum later this year.

I have long argued that the dollar's strength in recent years has been driven, not by global trade in goods and services, as in generations past, but by demand arising from leveraged financial transactions.

This is self-evident, given the fact that a world GDP approaching $30 trillion has given rise to a dollar-denominated derivatives market exceeding $100 trillion.

The ratio has a close analog in the U.S. stock market, which in recent years has traded a daily dollar volume of more than three times the daily GDP -- a fact of which Alan Newman of H.D. Brous has made much in his highly regarded newsletter, Crosscurrents.

From this relationship we might infer that the dollar's eventual fall from grace will be similar in demeanor to the stock market's. Which is to say, it will occur in rolling fashion, with steady losses first against the euro, D-Mark and British pound, then against a basket of relatively weaker currencies, most significantly the yen.

As this process unfolds, gold should remain buoyant at the very least. But in another 6-12 months or so, when the dollar and the still-strong blue chip stocks begin to plummet in unison, gold will take off from what by then will be a base near $300.

Given the huge amount of forward hedging by bullion producers, we should expect spot to reach $420 without even drawing a breath. Thereafter, it will quickly make up for the disappointments of the last two decades.

By Rick Ackerman
Special to The Sunday San Francisco Chronicle

March 8, 2001

Author/analyst Ackerman contributes a regular column to the San Fransciso Chronicle. He also forecasts stock, index and commodity futures prices for market professionals in his daily newsletter, Black Box Forecasts: www.blackboxforecasts.com

WAC (Wide Awake Club)BOE behind rally? What Rally?#495183/7/2001; 6:57:11

Have a look at site MONEYWEB.CO.Uk
There is an article in resource section asking
IS Bank Of England behing Gold Price Rally?

ETEuropean Despotism#495193/7/2001; 6:58:57

http://www.telegraph.co.uk/et?ac=001851641145319&rtmo=3SSxHwYM&atmo=99999999&pg=/et/01/3/7/weuc07.html

From the article;

"THE European Court of Justice ruled yesterday that the
European Union can lawfully suppress political criticism of its
institutions and of leading figures, sweeping aside English
Common Law and 50 years of European precedents on civil
liberties.

"The EU's top court found that the European Commission was
entitled to sack Bernard Connolly, a British economist
dismissed in 1995 for writing a critique of European monetary
integration entitled The Rotten Heart of Europe.

"The ruling stated that the commission could restrict dissent in
order to "protect the rights of others" and punish individuals
who "damaged the institution's image and reputation". The
case has wider implications for free speech that could extend
to EU citizens who do not work for the Brussels bureaucracy."

ETLew Rockwell#495203/7/2001; 6:59:08

http://www.lewrockwell.com/rockwell/americanopinion.html

From the article;

"We live in times that are both despotic and revolutionary. We know what despotism
means. Never before has any people lived under a government this well-funded, this
technologically sophisticated, this well-armed, which daily undertakes activities that
would have been inconceivable to governments of ages past. The great tax and
political revolts in history occurred under regimes that mostly look like paradises of
liberty by comparison.

"We shell out 40 percent and more of our income to fund a government to oppress us
with its regulations and routine invasions of our private life, to erect and run schools to
which we are loathe to send our children, to engage in far-flung wars that create
nothing but wreckage and death, to gouge us with their mail and utility services, to
seize or guns, to fund welfare schemes and entitlements that drain life from economic
affairs.

"An even greater loss consists in what we do not see. How many innovations have been
lost due to regulations? How many businesses have left their plans unfulfilled due to
discrimination lawsuits and taxes? How many good minds have been lost to the
public-school system? These are the sunk costs of statism, and they are incalculable."

KnallgoldNew Gold Market#495213/7/2001; 7:00:24

As you know,GrailTide made a guess recently:Jo'burg,Dubai,major European financial centers and Shanghai will create the EBES (EuroBullionExchangeSystem).In China it was unclear then which city will participate-now it is announced ,Shanghai.What if this was the only guess he had to make?The rest of it ready for the go?
TheStrangerOne-month Gold Lease Rates Back Above 4%, Backwardation Continues#495223/7/2001; 7:59:40

http://www.kitco.com/market/LFrate.html

See for yourself.
Cavan ManET#495233/7/2001; 8:02:16

"Let freedom ring."
Mr GreshamWorking-kirk#495243/7/2001; 8:08:58

I don't know how to say this without sounding clumsy, perhaps, but: It is an honor to be in your company, Sir.
USAGOLDToday's Commentary: Confirmation of Tight Gold Supply?? We Think "Yes"#495253/7/2001; 8:14:00

http://www.usagold.com/onlinestore/special.html

3/7/01 www. usagold.com. . . . . On Monday, this Commentary & Review suggested that if the Bank for International Settlements was indeed in the gold lending market as some suggested (though we had our doubts) then their presence was likely to be temporary. Again yesterday, we re-worked the theme to say: "Lease rates remain at the historically high end of the range this morning indicating a continuation of tight supply situation. The stubbornly high lease rate might be an indicator that the lull in the gold wars, which followed late February's big run-up, might be temporary." Well, this morning lease rates nearly doubled with the one month going from 2.47% to 4.46%. The price of gold rallied with the lease rate. This is confirmation of an important trend, my fellow goldmeisters, and a strong indicator that our analysis from the beginning that a gold shortage was underway appears to be correct. We do not know how far this will go -- whether or not this is the big one -- but if you have been thinking about adding to your holdings or beginning your gold diversification, now would be a good time to step up that interest with at least a partial fulfillment of your needs.

P.S. I will leave yesterday's report posted for your review and I've re-posted the BIS centered article below it. For our newcomers, we extend our welcome and invite you to read WHY GOLD WHY NOW down the page.

P.P.S. It is a happy coincidence that we were able to reserve a fairly nice sized hoard of the German 20 mark gold coins a few days ago. This would be a good addition for those of you who have a strong position in the pre-1933 already. It would also amount to a good start for first-timers as at least part of their order. For consultation, please contact either George Cooper or myself. Those interested in placing orders of less than 10 ounces are requested to contact Marie Ballard at our Small Order Desk. (Same number, just ask for Small Orders) We expect today to be another busy one. Please be patient if you are placed on hold since the retrenchment of lease rates will be a buy signal for a large number of gold buyers. Michael Kosares
800-869-5115

You can also order on-line by going to the link above.

USAGOLDClarification: How to Get to "WHY GOLD, WHY NOW"#495263/7/2001; 8:22:01

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

Newcomers: There may be some confusion about my P.S. below. To read "WHY GOLD, WHY NOW" and an in depth treatment why we thought "The Lull in the Gold Wars* Might Be Temporary" you have to go to the Daily Market Report page and then the Commentary & Review page which can be accessed there.

Entry requires registration, which can be secured on a trial basis by going to the link above.

Thank you and sorry for the confusion.

*(of the past few days)

RhodyLease Rates#495273/7/2001; 8:56:09

Both gold and silver lease rates are surging this morning.
Gold's one month rate is up 1.57% This is huge, in
that it reduces the forward rate to just over 1%, and that
is no wwhere near the yield necessary to compensate for
inflation in a gold carry scenario. So this leased gold
is not for investment purposes, but for control. As fast
as it is leased, it is either dumped on the spot market,
or used for delta hedging derivatives (wow, is that dangerous!) If this carries on to the end of the
week, we may be on our way. This is getting very expensive
as a means of controlling the spot gold market.
Meanwhile, one year rates are up only .45%, so the backwardation has increased significantly as well. Mines
are hedging (Barrick, Anglogold?) at 20 year lows here
but it must be to protect their hedge exposures. The
mines are not a goldbug's friends.
Silver is beginning to mimic gold, only not as extreme.
This implies that silver is not in crisis illiquidity
yet, but it too will blow. The mere fact that silver
is acting like gold here is proof that the powers of fiat
fear this metal as a commodity money nearly as much as they fear gold as a commodity money.
Is there any greater proof of a manipulated market
than this lease rate pattern. Lease rates are screaming
dire metal shortage, yet the spot price drops. The
financial system must be really unstable!

geConfused about lease rates#495283/7/2001; 9:07:54

Do LBMA & Kitco report different rates, or am I missing something?

LBMA link http://www.lbma.org.uk/2001gofo.htm
Kitco link http://www.kitco.com/market/LFrate.html

Mr Greshamge: LBMA lease rate#495293/7/2001; 9:21:16

http://www.lbma.org.uk/2001gofo.htm

Looks like the gold lease rate must be the right-hand column: LIBOR minus GOFO. Maybe slightly different from Kitco because of different markets/time of day it is set? Still shows backwardation. (Just LOVE that word. Don't get the opportunity to learn new vocabulary very often these days.)
Mr GreshamLease rate questions#495303/7/2001; 10:00:23

Has FOA ever referred specifically to the implications of a lease rate spike, or is that just part of paper gold market breakdown?

Have CBs ever even tried to offer an excuse for their low lease rates?

I mean, any non-Treasury (US or Euro) enterprise must be considered to have a default risk of at least .5% (once every 200 years). Also, gold does not track inflation, either, these past 20 years, so that component of chargeable interest is lost. And, a base 3% non-inflationary rate of any lending of any savings seems expectable.

The rate spike now seems to put it into a normal market mode (of course, threatening the carry) and shouldn't we see this both as an ongoing market rate zone, and as a precursor to a real market POG?

(And how can we borrow some Yen -- at .15% -- to indulge our POGster appetites? Someone, somewhere's doing it, I'll bet.)

Mr GreshamLease rate history#495313/7/2001; 10:08:35

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

Since 1988, no rate spikes above 4% until late 1995 (before big POG drop of 96-97), then the 9% WA spike. Now 4% again, twice. Big hmmmmm....
Tree in the ForestBOE auction#495323/7/2001; 10:53:28

BOE announced today that 25 tonnes of Au will be auctioned March 14. Their site also says that they have announced their 2001-2002 auctions but there is currently no info for this on their site. Therefore they are continuing the sham right up to default (see my last post). There is definitely a liquidity problem now in the PM markets but like true blue bankers they won't give in to the last. Is this entertainment or what!? (LOL)
SHIFTYGold mining shares#495333/7/2001; 11:09:14

http://www.amex.com/quote.dll?page=quick&mode=stock&symbol=GOLD&symbol=HGMCY&symbol=GLG&symbol=ABX&symbol=PDG&symbol=NEM&symbol=HM&symbol=AU&symbol=&symbol=

Take a look .
Hope the link works.

$hifty

HoltzmanWhat's in a name?#495343/7/2001; 11:34:10

Holtzman here,

--------------
Gypsy switch
--------------

To Sierra Madre, who pointed out in (03/06/01; 12:51:26MT - usagold.com msg#: 49479) that the present-day 'Gypsies' are not from Egypt.

True, true. Like so many other traditions, things meander over the millennia. So far as I understand it, the first people to be referred to as 'Gypsies' were the refugee Egyptians, most of them Coptic Christians, who fled towards Constantinople from what was becoming a lost frontier in Egypt proper.

Over the centuries since then, the term 'Gypsy' came to embrace any people who wandered nomadic through an otherwise settled countryside. Is there any Egyptian ancestry in even one of the present-day Rom? Not much I daresay, but there's probably a tiny bit of ancient Egyptian ancestry in everyone whose lineage traces to south-eastern Europe. And there's not much more ancient Egyptian ancestry among the people who presently call themselves Egyptian. Anwar Sadat was far more closely related to Muhammad than to Pharaoh.

I always hesitate before typing these sorts of things, but (fool that I am) I usually carry on recklessly and type them out anyway... what is true of present-day Egyptians is also true of present-day Israelis. That is, only a very few people who to-day call themselves Jews ever had any ancestors who really lived in Palestine in earlier times. Menachem Begin was far more closely related to Pope John Paul II than to any resident of Jerusalem during the reign of the Caesars.

These statements are in no way meant to disparage the faiths or the men, but rather to help clarify why most other residents of the Middle East do not regard present-day Israelis as their brothers under Abraham. Quite the contrary: they see modern Israelis as invading Europeans. The absence of the New Testament from this most recent Crusade is rather beside the point insofar as the displaced Muslims are concerned. Indeed, the present-day Israelis are far more literally Templars than were the original users of that name.

In the end, though, it is deeds rather than bloodlines which distinguish men. Polish Begin and Arabian Sadat as individual men made peace between two nations whose present-day populations are no more original than is the Anglo-Saxon population of England or nearly the entire population of the U.S. If we trace back far enough, we are all Gypsies and/or Crusaders.

--------------
Four hundred years is a long time
--------------

To Journeyman and ORO, I agree with both of you that bureaucratic government is a blight on humanity. I also agree that every government, regardless of how noble its beginnings, ultimately becomes bureaucratic and inefficient to the point of seizing up. However, the only thing worse than government is the total absence of government, which is why, even in such anarchic places as the American West of the 1800s, sheriffs and marshals and the cavalry were repeatedly called for. And why no-one with any sense wants to live in Moscow to-day.

But whether we live with too little government or too much, whether the armed man at the door is wearing a bandana or a badge, it is nonetheless up to each of us as individuals to figure out how to make the best of our lot in life.

The same set of jungle rules proposed by slingshot in his excellent (03/06/01; 15:20:00MT - usagold.com msg#: 49490) apply just as surely to men of means. That which does not make you stronger only gets you killed.

As to aristocratic family names failing to survive in Roman records for 20 generations, how many aristocratic families in existence in 1601 are still powerful and still go by their same names to-day? House Windsor now rules where House Tudor once ruled, though by coincidence the individual monarchs on both dates were christened Elizabeth.

And although it hasn't been quite four hundred years yet, does anyone recognise the name of Elias Haskett Derby? Even the somehow feared name of Rothschild is a mere two centuries old. If its descendents ten generations hence are still wealthy and still called Rothschild, they will be one of the phenomenally few families to manage such a feat.

Let's pull the timeframe in a bit to just one hundred thirty years. Though we find the occasional still-wealthy family such as the Rockefellers, most late-1800s captains of industry have left no trace apart from the occasional corporate name. And why is that? A combination of government jealousy and the simple truth that those who inherit wealth are rarely so successful at preserving it as were their benefactors at assembling it.

Even to-day, Bill Gates has already said that he'll be disbursing his ridiculously vast fortune upon his death. Come 2401, I daresay he might have descendents still going by the name of Gates, but if any of them are in any manner worthy of note it will be because of their own actions, not his.

The point I was attempting to make was very simply that the Roman system of bread and circuses was not in any way the result of true charity coming from the ruling class. Rather, it was the result of the ruling class doing what ruling classes have always done: whatever was necessary to preserve their hold on power at that moment and as far into the future as was practicable.

The Roman rabble was in no material way different from the street gangs of to-day. Caligula was in no way more dangerous than was Henry VIII. Roman aristocrats were no more likely to be killed by their monarch than were Tudor-era nobles likely to be killed by theirs. For that matter, there were many different Roman imperial family names just as there were many different English ones in the past four centuries: Tudor, Stuart and so on up to Windsor and soon enough Spencer.

The names change, yet the system continues.

Yours,
I.V. Holtzman

Mr GreshamJim Sinclair on gold derivatives#495353/7/2001; 11:53:39

http://www.mips1.net/422567CB004DBB8F/UNID/4225685F0043D1B24225696E004342D2?OpenDocument

He blames miners not CBs, but sees big deriv blowup. What do you think?
OROET - thanks for EU story on Conolly#495363/7/2001; 12:07:17

http://www.spectator.co.uk/article.php3?table=old§ion=current&issue=2000-11-18&id=251

More can be found in this article in the standard, including a short critique of the misleadingly titled "Charter of Fundamental Rights" to be approved this year at the Nice meeting. The same treaty will give the court that ruled that the European Commission can punish and retaliate against those who criticize it, the status of final arbiter for Europe, above any national court and the Human Rights court in Strassbourg.

The EU project is plainly the pure evil it all know it to be. It is the union of the German and French political elite against the whole of the world. But foremost, it is a union of the French and German Elites against their own people.

Here's a quote from the URL above:
"You have only to read Article 52 (latest version) of the Charter to see where this is heading. It states that the European Union may limit all rights and freedoms enumerated in the Charter ‘subject to the principle of proportionality’, where ‘necessary’ in order to ‘meet objectives of general interest recognised by the Union’. When I asked the top figures of the drafting convention at a press conference what was to stop this ‘raison d’état’ clause being misused for authoritarian purposes, there were audible hisses from a number of EU journalists in the room, and the justice commissioner, Antonio Vitorino, let out one of those patronising little laughs that the EU elite has so perfected. Nobody really answered the question."

As this makes clear, the EU bureaucratic and political powers are on a collision course with the rights of humanity, particularly the freedoms of the European people.

IF YOU ARE IN EUROPE FIGHT THIS NOW. You will not have a chance for a non-violent fight afterwards. Europe is again falling under a black curtain. We in America should do our best to keep any of our political representatives from falling under this blanket of darkness, and keep them from approving any treaty or legislation that would promote cooperation with the despotic bureaucracy of Europe.

The European Supreme Court of Justice have just declared their EU institutions are to be the new king and church, and have made their criticism into the crimes of Lése Majeste and Blasphemy.

The European Supreme Court of Justice is an evil abomination, part of the greater evil of unprecedented proportions imposed on an unwilling European populace, it stands in direct opposition to its title and the principles of freedom and justice humanity cherishes. The smell of sulfur pervades their presence.

Protect yourself. Be at Nice, and demonstrate. Organize demonstrations in front of all possible decision makers on the matter so that further union, particularly on jusicial matters, may never proceed forward. The European Union institutions are not your friends, they are your enemies - so are your politicians and bureaucrats who support it.

See also related to Conolly:
http://www.bahnhof.se/~englund/emucon.html

Buy his book.
http://shop.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=3L6ZL8KWKA&mscssid=K49U0446NT4D8H9MS3Q5NE98F5G8E1NA&isbn=0571175201

In the UK
http://www.amazon.co.uk/exec/obidos/ASIN/057117521X/r/202-7715629-4691823

Old YellerRon Paul'standard bearer for the 21st century?#495373/7/2001; 12:08:28

http://www.wnd.com/news/article.asp?ARTICLE_ID=21970

This looks interesting.Thanks to shebesavvy at the prudentbear forum for the link.
OROHotzman - origins#495383/7/2001; 12:23:52

Genetic testing has shown that Egyptians are more genetically related to the mummies in the tombs than to Arabs in today's Arabia.

Similarly, such tests have shown Jews to be related to each other and to Semitic populations in the ME. Point being that Jews of Eastern Europe are related to the dark skinned Sephardic Jews of the Mediterranean, and to the Ethiopian Jews.

WAC (Wide Awake Club)@ORO, Holtzman - Origins#495393/7/2001; 12:49:45

Have you read 'The Thirteenth Tribe' by Arthur Koestler?
HoratioHoltzman:Whats in a name?#495403/7/2001; 12:49:46

Sir you treatment of all Romans being the same is not accurate.I am a direct decendant of Horatio also known as the Horatian family or Oratii.They do have a Italian spelling now that is slightly different.They were a considerable influence in establishing the FIRST Republic to address grievences from the early Kings of Rome(640BC).Horatio being responsible for saving Rome from the Albans ,a battle which if had lost would have resulted in Rome being called something else.Another battle of note was Horatio at the bridge,where he single handedly defended Rome from the Etruscians.Rome in the Early days was a Noble cause,it was hundreds of years later that the people lost thier Rebublic and thier Noble heros to Politicians.Its a lesson we face today with the loss of our Rebublic to a (Democracy),also know as mob rule.
OROHoltzman - remnants of power#495413/7/2001; 12:51:23

Though you are right about the absence of longevity in family power, there is something to be said for the progeny remaining in existence rather than the Roman way by which the whole of a family was killed and their property seized.

It should stand as a warning to all seeking power that the more power is allowed them, the more can be used against them. The people who end up in power after a power grab are rarely those that had done the deed of creating the power and those that had initially grabbed it. The original supporters of juntas around the globe were often the first to be "disappeared".

USAGOLDMr. Gresham. . . .#4954203/07/01; 13:06:28

Thank you for the interesting link to Mr. Sinclair's thinking. I would like to expand the endorsement of the link you provide to say that there is an interesting exchange there between Sinclair and perennial gold bear, Andy Smith. Scroll to below the initial essay by Mr. Sinclair.
Stocks, Lies, and Ticker TapeHoltzman, Sierra Madre, Journeyman, ORO, Slingshot, working-kirk#4954303/07/01; 13:13:28

Really enjoyed reading your posts the last couple of days! We want more!
OROMore from Connolly on the EU#4954403/07/01; 13:21:52

http://www.eurocritic.demon.co.uk/bg-rsrc9.htm

Connolly excerpts the core of the purpose of the EU: to preserve the despicable tradition of tyrrany where none in Continental Europe have ever enjoyed freedom but for those few periods of light in the Netherlands and Switzerland.

From the URL:

"Tony Blair, in his equally notorious speech in Warsaw just last month: "Europe is no longer just about peace" — as if it had ever been anything to do with peace — "It is about the projection of collective power." "Europe", he said, echoing Jacques Delors, "must become a superpower."

Now an earlier declaration, one made 40 years ago in secret by Harold Macmillan to General de Gaulle: "European civilization is what at all cost we must preserve. It has survived for 3,000 years, but it is menaced from all quarters, by Africans, Asians and Communists … and the North Americans, Australians and New Zealanders. More than ever there is a need for real political unity in Europe."

More recently again, in 1996, Phillippe Maystadt, then the Belgian Finance Minister and now president of the European Investment Bank, said that: "The purpose of the single currency is to prevent the encroachment of Anglo-Saxon values in Europe." "

and later:

"...throughout 3000 years of European civilisation that Macmillan wished to protect against the English-speaking world and the British Commonwealth, those values have been ones of absolutist power and tyranny. Nothing has changed."

OROLast paragraph from Connolly's Bruges speach#4954503/07/01; 13:30:26

http://www.eurocritic.demon.co.uk/bg-rsrc9.htm

Tony Blair has said it, "Europe" is about the projection of collective power: the power of unaccountable elites over ordinary people, of the Establishment over — in the words of a Europhile Foreign Office official — "the sort of scum who read The Sun". It is about the power of the Blairs, the Booths, the Irvings, the Falconers, the Mandelsons. The Jenkinses, the Ashdowns, the Heseltines, the Howes, the Clarkes and the Hurds. It is about ripping our country away from the liberal, democratic, Anglo-Saxon world. It is about subjecting it to the 3000-year-old European values of tyranny and oppression.

We must have nothing to do with it.

JourneymanYahoo! What's this mean? @ALL#4954603/07/01; 13:32:07

NASDAQ (rather than Yahoo! itself) unilaterally halted trading on
Yahoo! stock this morning until 5:00PM tonight. NASDAQ may do
this without consulting the company who's stock is involved, but
this is relatively rare. NASDAQ may halt trading on a stock in
the interest of stock holders and the trading public, but
normally 30 minutes is the longest suspension of trading mandated
in the rules. Usually such halts indicate a major change in
company management or a major restructuring. -Composite info from
CNBC, March 7, 2001

Would a Yahoo! bankruptcy shake-up the markets?

Regards,
Journeyman

Cavan ManORO#4954703/07/01; 14:02:20

So, where does one find the best place for housekeeping? One thing about Europe; I do believe the schools in many countries are better and more importantly SAFER than here. Pols, central bankers and the otherwise powerful and elite are of the same stripe generally (everywhere) yes?

What about Montana?

OROCavan Man - EU school questions#4954803/07/01; 14:14:34

Public schools there are better in teaching some basics than those in the US today, but that is not to mean that they are of an overall higher value to the student. They are not. Most particularly because they teach pro-government propaganda as part of civics, and vary between ignoring and distorting the notions of rights and civil life. They are represive of creativity in the latter grades, and do not encourage critical thinking any more than US schools do.

The main point is that the schools of the EU nations are the only choice one can make, because private schools are much less accessible to most people. That is predominantly because of the high tax rates in Europe - when VAT, tariffs, and income taxes are taken together, the EU tax rates are some 60% of the income of a middle class earner. While they are 40-50% in the US. Regulatory costs also restrict your spending's effectiveness by restricting choices and extending the effort involved in obtaining merchandise.

ausomeJapan currency move #4954903/07/01; 14:27:44

Yesterday I was travelling home from work listening to ABC news (Australian) and the ABC's Tokyo reporter said that Prime Minister Mori was about to announce new policy to stimulate the ailing Japanese stockmarket. There were rumours in the day that Mori had actually resigned and the market spiked about 0.75% only to later collapse yet again. Things are getting desperate after a 10 year recession (depression). Fiscal stimulation of many trillions of Yen for the last few years since the beginning of Asian contagion have not improved the parlous Japanese economy. Interest rates are at 0.15% in Japan and they are talking about cutting them further!
The ABC reporter Peter Martin mentioned that an argument to devalue the Yen was gaining credence in Japan. The idea is to make the Yen 1/100th of the value it is today! Prices would have two zeros knocked off the end so that 1000Y would now be 10 Yen. It would be called the new Yen. I not sure whether the reporter meant that 1 Yen would equal 1 US$ or not. It would seem that Mori's statement whatever the move will be announced Friday. His political days are numbered anyway. It is apparent that the Asian flu has not gone away and that the second biggest economy in the world will not collapse without bringing down its friend the US.
The Australian dullar is now 50.9 cents to the US dollar only 0.17cents above its all time low in November last year. We had another .25% rate cut yesterday and the currency got hammered again. This comes on the back of a 0.6 % decline in December quarter GDP. The 'r' word is getting increasingly more airplay even though a low currency earns heaps in foreign currency from exports. Gold is Australia's seecond largest export earner. At $512 an ounce we are smiling.
----
Question for FOA.

Would you give this Japanese move to devalue any currency?(joke)

R PowellGood work!#4955003/07/01; 14:32:25

Working-kirk, pandagold, Topaz, Stranger, USAGOLD, Rhody, Mr. Gresham, Shifty, Journeyman and all. If you keep up posting like today, I'll be forced to spend even more time reading and thinking. Used more than my daily quota of brain cells today, I'll have to eat some bananas to upgrade the power output.
Thanks
Rich

Chris PowellBank of England reduces gold auction#4955103/07/01; 14:35:27

I don't have anything more on this but
apparently the Bank of England has
announced that it will reduce its next
gold auction by 5 tonnes.

Tree in the ForestChris Powell#4955203/07/01; 14:41:05

I had heard this at GE but the BOE website announcment dated today says March 14 will be for 25 tonnes. Correct me if I am wrong but I believe this is the same amount as usual no? What I am trying to find out is info on their announcement for the third series of auctions. Todays announcement says that the third series announcment is also dated today but I could not find it on their website.
Chris PowellBank of England modifies gold auction program#4955303/07/01; 14:50:04

http://groups.yahoo.com/group/gata/message/700

Full Reuters story.

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 ManUtopia existeth not @ORO#4955403/07/01; 14:51:07

Why always the choice between lessers of comparable evils.

So, are you taking the position that the mush they teach in schools here is preferable to Europe? Many a US college campus could be considered a hotbed of socialism could they not?

Tree in the ForestChris Powell#4955503/07/01; 14:52:46

Well their announcement does say "about" 25 tonnes so is 20 tonnes "about" 25 tonnes? Doesn't seeing them squirm as the noose draws tighter provide true entertainment? <grin>
Tree in the ForestChris Powell - BOE auctions#4955603/07/01; 15:03:50

Thanks for the link Chris. An excerpt:

"I can't see why they have persisted with this method when every other seller has consistently used the traditional route through the market," said Martin Potts, analyst at Williams de Broe.

"It gives people the incentive to go short and therefore depress the price. How does that therefore generate value over and above what would otherwise be achievable?"

The reason why they do what they do is becoming more and more obvious to everyone. As I quoted previously, no discernible difference between what they are doing and the London Gold Pool of the late 70's.

R PowellYes. Only 120 tonnes#4955703/07/01; 15:41:36

http://www.hm-treasury.gov.uk/press/2001/p30_01.html

Message from the neighbors.
Randy (@ The Tower)Two announcements in one post#4955803/07/01; 15:42:44

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

The link above will take you to the gold's market's "week in review" commentary by the World Gold Council where they track the price and lease rate movements seen in last week's bullion banking activity.
- - - -
On another note, it should come as no surprise that the Federal Reserve's System Account Manager participated in open market operations this morning even though the fed funds market was trading at the target rate. Through use of overnight repurchase agreements the Fed added $4.925 billion in temporary reserves to the banking system. What does come as a small surprise was that the Fed refrained from making an outright purchase of Treasuries...something that we have seen developing into a regular routine, relatively speaking.

PandagoldGold Trivia courtesy of Harmony Gold#4955903/07/01; 15:50:14

This Gold trivia was takem from Harmony's new website which is quite something for such a normally staid industry'
Lots of 'western' music and you can enjoy a shoot out in the saloon


Some of these you know, but some may add to your understanding of the object of our interest.

Africa's gold deposits were formed some 3,4 billion years ago.

An estimated 10 billion tons of gold is suspended in the seas of the world.

Each mine's gold has its own DNA, so the exact origins of, say, a piece of jewellery made from 'virgin gold' (or gold unblended with gold from another source) could be ascertained.

The deepest mine in the world is Western Deep Levels gold mine on the Far West Rand, now approaching a depth of 4 kilometres. (approx. 13000 feet). Mining does not as yet take place at that depth.

The total volume of rock cut away each year in South Africa's gold mines would make a railway tunnel 3500 kilometres (approx. 2200 miles) long reaching between London and Leningrad.

For every ton of rock mined, nearly 15 tons of ventilation air is pumped underground.

The volume of water pumped daily from the mines would fill 3 million domestic bath tubs to the brim.

Cooling plants on South African gold mines have a capacity equal to nearly 3.5 million domestic refrigerators.

Virgin rock temperatures higher than 52?C (126?F) have been recorded in South African gold mines.

The South African gold mining industry consumes enough electricity - over 23 million megawatt hours - to power a city with 3 million inhabitants.

It is estimated that the portion of mineworkers' earnings remitted to Lesotho account for some 60 per cent of that country's Gross Domestic Product.

Gold can be beaten wafer thin - technically that's 0.00001mm thick. One ounce of gold can be beaten into 16 square metres/yards of gold leaf.

One ounce can be drawn into eight kilometres (five miles) of gold wire.

Gold is used in the electronics industry to make more than 10 billion tiny electrical contacts every year.

The world's dentists use over 60 tons of gold every year.
Gold has medicinal and healing properties - it can be used in treating rheumatoid arthritis, chronic ulcers and tuberculosis.

Nearly 40 tons of gold were used in the construction of space shuttle "Columbia" in preparation for its maiden flight in April 1981.

Gold can be eaten - it is indeed eaten in many Asian cultures.

Gold is found in minute proportions in the human body, whether you have eaten it or not.

The largest South African gold nugget weighed 7.8 kilograms (approx. 17 lbs.) and was found at the town of Pilgrim's Rest (near the Kruger National Park) between 1875 and 1881.

The largest nugget ever discovered weighed 70.92 kilograms (approx. 160 lbs.) and was found in Victoria, Australia.

All the gold ever mined in the world would fit into a store room measuring 17 metres long, 17 metres high and 17 metres wide (approx. 5000 cubic metres/yards). More steel is poured in an hour than gold has been poured since the beginning of time.

The American Federal Reserve on Wall Street, New York, is the biggest repository of gold in the world; some 13000 tons of gold are kept behind 90 ton steel doors in vaults blasted out of solid granite.

Of the estimated 127000 tons of refined gold in the world - bullion, jewellery, coin - no less than 42000 tons (or 33 %) has been mined in South Africa since 1886.

Gold has been used as a currency for over 5000 years.

The oldest gold jewellery ever was crafted in Africa (3200BC). · India has by far the biggest annual offtake of gold: 508 tons in 1996, enough to make about 175 million plain, 18 carat wedding rings.

Hill Billy MitchellOld Yeller @ # 49537#4956003/07/01; 16:03:16

Sir OY.

Your subject:

"Ron Paul'standard bearer for the 21st century?"

Excerpt from your link:

"Williamson is not confident that current members of Congress will attempt to change the system -- save one.
"The citizens' best bet is Rep. Ron Paul, who understands this issue top to bottom and always crosses swords with Mr. Greenspan in his annual testimonies," she says. "He is a brilliant gentleman and a great defender, and really, American citizens would not be able to own gold today were it not for Ron Paul."

I too greatly admire Congressman Paul. Sad thing is I would't give a 1 10th ounce Eagle for his life. He reminds me too much of McFadden. We all know what happened to him.

Sad, Sad post, I know.

But truth?

HBM

PandagoldUK Elections#4956103/07/01; 16:03:37

Looks like it is all systems go for the UK elections around May 3rd.
After today's budget - lots of give-aways across the board looks like Tony will be home and dry. No close run thing like in the US.
There are now likely to be interest rate cuts which should lower the £ against the Euro in the near future.

If the UK (and I am sure it has) has been working in collusion with the US on holding gold down, they are hardly going to hit Tony where it will hurt by allowing gold to move up much until after the election. It would be very embarrassing for Gordon Brown ( who's hoping to become Prime Minister) and Tony. (Just a thought to keep in mind)

Peter AsherVirus alert serious enough to post#4956203/07/01; 17:22:53

From:
"Robin Asher"

This virus alert is high risk. It comes directly from McAfee.com, from my
subscription to the Clinic. Not a hoax.

Best,

Robin
>
> ----- Original Message -----
> From: McAfee.com Dispatch < This email address is being protected from spambots. You need JavaScript enabled to view it. >
> Sent: Tuesday, March 06, 2001 8:40 PM
> Subject: VIRUS ALERT - W32/Naked@MM

> Dear McAfee.com Dispatch Subscriber:
>
> Since its discovery early on March 6, 2001, McAfee.com has
> seen a large and growing number of computers infected with
> W32/Naked@MM. This is a HIGH RISK virus that is spreading
> rapidly via the Windows email program Outlook. The infected
> email can come from addresses that you recognize. Attached
> is a file named NakedWife.exe, which poses as a Flash movie.
> The email message can appear as follows:
>
> Subject: Fw: Naked Wife
> Body:
> My wife never look like that! ;-)
>
> Best regards,
> (sender's name)
>
> Attachment: NakedWife.exe
>
> When run, it copies itself to a TEMP directory and displays
> a window entitled "Flash" which reads "JibJab loading". It
> then attempts to delete all .BMP, .COM, .DLL, .EXE, .INI,
> and .LOG files in the WINDOWS and WINDOWSSYSTEM directories
> and emails itself to all recipients in the Windows Address
> Book using Microsoft Outlook.
>
> If you are not a subscriber to the McAfee.com Clinic please
> click here to get anti-virus protection.
> -> http://clinic.mcafee.com/clinic/ibuy/campaign.asp?cid=2164

>
> Find out more about this virus. Click here to go to the
> W32/Naked@MM Help Center.

http://clinic.mcafee.com/clinic/ibuy/campaign.asp?cid=2164
>
This Virus Alert has been issued by the
> McAfee Anti-Virus Emergency Response Team (AVERT).
>
> McAfee.com Support: To contact us about this dispatch, click here.
> -> http://www.mcafee.com/support/cust_serv/default.asp
>
> Subscribe: If you received this message from a friend and
> would like to subscribe to McAfee.com Dispatch, click here.
> -> http://dispatch.mcafee.com/sub.asp?s=22
>
> Trademarks 2001 McAfee.com Corporation / All Rights Reserved.

ETORO, Cavan Man, All#4956303/07/01; 18:04:55

http://www.lewrockwell.com/rothbard/ir/Ch44.html

I was hoping to stir some interest in a possible solution for the Europeans with the Rockwell speech. If any url needs to be immediately distributed throughout EU Europe, it is Lew Rockwell's. Although he focuses on the US situation, the same applies for the Europeans and on a more immediate note.

http://www.lewrockwell.com/rockwell/americanopinion.html

It's my perception that the fiat currency regime is coming under great stress and could fail giving the EU bureaucracy an opportunity to enshrine themselves for decades should their currency succeed at this point in this form. A new fiat currency only perpetuates the despotism. A return to sound money is of utmost importance to the world today if liberty is to prevail. Despite calls here and elsewhere for a more "reasonable" solution, retaining liberty and rejecting despotism requires courage and commitment, not compromise. Whatever liberty that may remain in Europe today is about to be lost for decades if not longer should the EU bureaucracy succeed in stifling all dissent.

We are approaching another crossroad that will have worldwide implications. I agree with ORO and Murray Rothbard, it is time to be heard if liberty is to remain something other than a term of antiquity.

slingshotET msg 49563#4956403/07/01; 19:27:04

Gold is LIBERTY

America has been fighting to maintain Liberty not only for ourselves but others for some time. Never has our liberty been under such an attack as it has in the past ten years.Gold physical or a gold standard is the only way to save this country. Now you'al I'm going to get Hot about this, Please hang with me. If everyone in this USA brought One stinkin once we could send a message to put substance back into our money. Noooooooo. Why? We are Dumb! To control a country you must first control the institutions of education. Wow! Forty years of liberal social-democratic, touchy feely crap we have been teaching our kids. We are not Americans! We are Hypenated Americans. Second, control the Media. Do I need to express myself here. Third. Control the money supply. We are so far in debt its unreal. Not to mention taxes. Finally remove all guns from the public. Don't want anyone shooting back now even if they take you property unjustly. So Joe Sixpack will not believe till they take his Liberty away. I can hear him now, "You can't do that, This is America'.

So, ET, There are just about as many people who will stand up as there are Gold bugs. Europe will have to grapel with her own trouble which is the same plight as ours.

How can some one not buy GOLD at this price with what is unfolding before our very eyes.


We are a nation of Sheeple and dumb as you know what.

Slingshot

Cavan ManBOE and Sir EG#4956503/07/01; 20:24:14

The announcement today couldn't be more bullish. Flying in the face of everything that is known about market: supply/demand fundamentals, derivatives, global monetary travails, inflation etc., etc., (did I forget to mention common sense?); the BOE keeps a stiff upper lip and continues to send her gold off to foreign shores to fight her battles where once she sent her navies and her merchant marine--so typically English. These are desperate times for gold shorts and enemies of sound money. Anyone who has been closely following the gold market these last two years should be buying with both hands. History is repeating itself once more.
SHIFTYDon Coxe / Listen#4956603/07/01; 20:52:23

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

Don Coxe starts off about gold.

I think he must be a short!

$hifty

Cavan ManShifty#4956703/07/01; 21:00:39

I know Mr. Coxe is much smarter and much wealthier than I am. However, after listening to him for just a few minutes, I am absolutely convinced (from his opening remarks) that he is wrong.
SHIFTYCavan Man #4956803/07/01; 21:05:57

I would say you are correct!

That's why I think he is a short!

He cant be that dumb.

$hifty

megatronRhody/et al#4956903/07/01; 21:27:47

Very curious to me that a G7 country like Canada who is apparently in a SURPLUS!!! situation would sell 20,000 ounces of gold in FEB. @ $280.US. The measly amount generated wouldn't cover lunch in Ottawa. This is obviously an attempt to reliquify SOMEBODY or repair a potential derivatives blowout. How much more obvious does this need to get? $8 mil. CDN +/- is NOTHING to the human pig socialists that inhabit that filth-hole. It is related to the Bank of Canada's derivative exposure in gold and securities like Nortel. As for the Aug 3, 1993 'event' in the gold market, I can only chuckle as my mind goes back to that fateful day 1 MONTH LATER that the socialist Liberal party was elected into goverment of what was then a technically bankrupt country. Very curious.......
HoratioJapan interest rates#4957003/07/01; 22:04:57

The Japanese could solve the gold problem simply by raiseing interest rates.This would remove the yen carry trade and atract investment capital to thier stock market and currency.They have been getting advice from Goldman Sachs to do the opposite supposidly to aid thier exports which has failed.Of course Sachs will say look how bad it could have been!Or they could buy gold instead of U.S.paper investments which are looking more and more risky. Wake up Japan!
The Brits would do well to change governments ,Mr.Blair seems to be on a policy of "To big to fail"sell the gold and watch the Pound sink ,when it gets uncontrollable then ask for U.S. help cause there to big to fail.
The Germans should do likewise,things were much better with Reagan,Thatcher,and Kohl. Imho.

SHIFTY'IT,' a Hydrogen Scooter #4957103/07/01; 22:28:19

http://dailynews.yahoo.com/h/ap/20010306/bs/mystery_invention_1.html

Tuesday March 6 10:53 PM ET
Report: 'IT,' a Hydrogen Scooter


MANCHESTER, N.H. (AP) - Inventor Dean Kamen's mystery invention, dubbed ``IT'' or ``Ginger,'' is a two-wheeled, hydrogen-powered scooter that is emission-free and for which he is building a New Hampshire factory, Inside magazine reports.

The print publication of Inside.com says it used corporate surveillance experts to uncover the details on the invention.

'``Ginger represents the first generation of a new mode of transportation that will compete with and possibly replace automobiles. The ramifications of a 'hydrogen economy' would be profound on everything from the environment to the energy business to global politics,'' the magazine said.

Kamen created a company called ACROS to build ``motorized, self-propelled, wheeled personal mobility aides, namely wheelchairs, scooters, carts and chariots,'' the magazine said.

The Manchester inventor has refused to discuss the project, saying he will not reveal what IT is until next year.

But IT has created waves already. Some of the biggest wheels of industry, like Steve Jobs (news - web sites) of Apple and Jeff Bezos of Amazon.com, who reportedly have seen the machine, have offered financial support and say the invention will change transportation.

Such devices presumably would draw on the development of the I-bot, a mechanical wheelchair that can drive through sand and climb stairs, created by Kamen and his medical-research firm, DEKA Research and Development.

The I-bot was part of the reason Kamen was among recipients of the 2000 National Medal of Technology.

Last week at an appearance before the New Hampshire Society of Professional Engineers, Kamen would only say he was amazed at the amount of attention IT has received.

Kamen is a prolific and successful inventor who has come up with innovative wheelchairs and an insulin pump.

justamereBearWorkingKirk 49509#4957203/07/01; 22:45:53

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

I have been thinking a good deal about your post. I can see a very definite need for such skills in the world I see unfolding, and unfortunately am ignorant enough that I may not even be able to ask an intelligent question.

Nevertheless, I would like to try, and invite you to e mail me at the above address since this is obviously an off topic subject. Perhaps some of my preparations may be of interest to you as a quid pro quo

Thanks
j'Bear

SteveHProtecting Gold#4957303/07/01; 23:52:23

http://www.webleyweb.com/lneil/index.html

Why Did it Have to be ... Guns?
by L. Neil Smith
This email address is being protected from spambots. You need JavaScript enabled to view it.

Over the past 30 years, I've been paid to write almost two million words, every one of which, sooner or later, came back to the issue of guns and gun-ownership. Naturally, I've thought about the issue a lot, and it has always determined the way I vote.

People accuse me of being a single-issue writer, a single- issue thinker, and a single- issue voter, but it isn't true. What I've chosen, in a world where there's never enough time and energy, is to focus on the one political issue which most clearly and unmistakably demonstrates what any politician -- or political philosophy -- is made of, right down to the creamy liquid center.

Make no mistake: all politicians -- even those ostensibly on the side of guns and gun ownership -- hate the issue and anyone, like me, who insists on bringing it up. They hate it because it's an X-ray machine. It's a Vulcan mind-meld. It's the ultimate test to which any politician -- or political philosophy -- can be put.

If a politician isn't perfectly comfortable with the idea of his average constituent, any man, woman, or responsible child, walking into a hardware store and paying cash -- for any rifle, shotgun, handgun, machinegun, anything -- without producing ID or signing one scrap of paper, he isn't your friend no matter what he tells you.

If he isn't genuinely enthusiastic about his average constituent stuffing that weapon into a purse or pocket or tucking it under a coat and walking home without asking anybody's permission, he's a four-flusher, no matter what he claims.

What his attitude -- toward your ownership and use of weapons -- conveys is his real attitude about you. And if he doesn't trust you, then why in the name of John Moses Browning should you trust him?

If he doesn't want you to have the means of defending your life, do you want him in a position to control it?

If he makes excuses about obeying a law he's sworn to uphold and defend -- the highest law of the land, the Bill of Rights -- do you want to entrust him with anything?

If he ignores you, sneers at you, complains about you, or defames you, if he calls you names only he thinks are evil -- like "Constitutionalist" -- when you insist that he account for himself, hasn't he betrayed his oath, isn't he unfit to hold office, and doesn't he really belong in jail?

Sure, these are all leading questions. They're the questions that led me to the issue of guns and gun ownership as the clearest and most unmistakable demonstration of what any given politician -- or political philosophy -- is really made of.

He may lecture you about the dangerous weirdos out there who shouldn't have a gun -- but what does that have to do with you? Why in the name of John Moses Browning should you be made to suffer for the misdeeds of others? Didn't you lay aside the infantile notion of group punishment when you left public school -- or the military? Isn't it an essentially European notion, anyway -- Prussian, maybe -- and certainly not what America was supposed to be all about?

And if there are dangerous weirdos out there, does it make sense to deprive you of the means of protecting yourself from them? Forget about those other people, those dangerous weirdos, this is about you, and it has been, all along.

Try it yourself: if a politician won't trust you, why should you trust him? If he's a man -- and you're not -- what does his lack of trust tell you about his real attitude toward women? If "he" happens to be a woman, what makes her so perverse that she's eager to render her fellow women helpless on the mean and seedy streets her policies helped create? Should you believe her when she says she wants to help you by imposing some infantile group health care program on you at the point of the kind of gun she doesn't want you to have?

On the other hand -- or the other party -- should you believe anything politicians say who claim they stand for freedom, but drag their feet and make excuses about repealing limits on your right to own and carry weapons? What does this tell you about their real motives for ignoring voters and ramming through one infantile group trade agreement after another with other countries?

Makes voting simpler, doesn't it? You don't have to study every issue -- health care, international trade -- all you have to do is use this X-ray machine, this Vulcan mind-meld, to get beyond their empty words and find out how politicians really feel. About you. And that, of course, is why they hate it.

And that's why I'm accused of being a single-issue writer, thinker, and voter.

But it isn't true, is it?

SHIFTYTrail Guide #495743/8/2001; 0:48:56

Trail Guide : I sure would enjoy a hike on the gold trail. Do you feel up to it?

$hifty

Old YellerLate night comedy#495753/8/2001; 2:41:17

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3IDRVH1KC&live=true&useoverridetemplate=ZZZUGORQ00C&tagid=ZZZ1XPDX70C&subheading=uk

Excerpt from the link:"It is understood the gold market said that 25 tons was too much for the market to absorb in a single day."
Mr Gresham"Yen Little Changed After Miyazawa Says Finances Near Collapse"#495763/8/2001; 2:44:52

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOqdFjhX5WWVuIExp

"...Japanese Finance Minister Kiichi Miyazawa said the financial system in the world's second biggest economy is ``close to collapse.''
Randy (@ The Tower)Sir SHIFTY#495773/8/2001; 2:59:47

I don't want you to think that I have ignored your suggestion to "rattle Farfel's cage", so to speak....it's just that I view the privacy of our posters as being of utmost importance, and therefore do not make a habit of sending them unsolicited e-mails on non-business-related items unless they have previously established a friendly rapport with me of their own initiative, in which case The Tower door swings easily both ways.
Randy (@ The Tower)Observations and Ideologies -- directed toward ORO (and Journeyman, too)#495783/8/2001; 3:01:59

ORO, as you seem to participate as the perfect living sponge, absorbing everything and filtering only that which serves you, I am comfortable offering you once again words of constructive criticism. Much of this was penned Monday evening in the comfort of a coffee shop as a response inspired by your early Monday critique offered to Sir Holtzman. Unfortunately, my resources were spread thin over the past two days and I was unable to get this typed for the forum until now. Meanwhile, subsequent posts by Holtzman covered many of the sentiments I had addressed on paper, and I nearly held back with this as it would be an exercise in redundancy. However, my presentation varies in degrees from Holtzman's, and further, seeing Sir Journeyman weigh in in opposition, it seemed best to proceed with this posting for balance. (It has been ever so slightly altered from its original form in light of the post-Monday commentary.)

To state this as directly as possible, as a long-time reader of your commentary I continue to see in your words such a prevailing and apparently ideological rejection of "all things governmental" that I submit to you stands in the way of your achieving the most effective analysis or economic forecast. [Journeyman goes so far as to say in (3/06/01 msg#49485):

--BEGIN--"The fact that grown and otherwise intelligent adults believe
the fairytale that governments help the poor more than they hurt them is
a monument to disinformation, the power of brainwashing, and the modern press."

[To which I must interject, for the sake of this discussion, it is patently wrong to place the foundation of government's necessity upon the fiction that it exists to help the poor. Whether or not it attempts to do so is another issue entirely.]

"...in actual operation, governments are often a great source of disorder
and chaos rather than the "fonts of order" they claim and we assume.
Therefore, for order, morality, and the good of mankind
(including the "poor",) down with all government fiat currencies.
Period." --END--

This leap to make recommendations about fiat currencies is a non sequitur that I hope to address in due course.]

To be sure, ORO, your analysis stands strong in the theoretical world which you frequently construct with your ideologically tainted views of government. But, the economic utility of your work is diminished by the degree of departure of your ideology from our living reality.

Whether you "like it or not" the governments we have today are part of the landscape. You will not move a mountain by shouting at it or making arguments against it; (but thankfully, it is up to each man alone to decide how he chooses to spend his own precious allotment of time and energy.)

So, what of this governmental mountain? Taking the large view, it can be said that under threat of "mob rule" governments operate today and tomorrow under terms acceptable to their constituents and their neighbors, and similarly, we see citizens operating today and tomorrow under terms acceptable to their system of government and their neighbors. Significant imbalances on either side tend to bring about a compromise in the acceptable terms of operation to restore the dynamic state of harmony.

It could be argued that as the realm of mankind's interactions become more intricate and complex, governments exist -- if for no other reason -- to institutionalize/formalize the "custom" of the natural social order of the day. This is seen as man's own attempt to guarantee that the collective well-being of the present time extends into the foreseeable future. (A simple judicial system comes to mind as the start point, distinctly *not* as a "babysitter" to help "the poor" however they might be defined.)

Surprisingly, it was none other than Journeyman himself who offers credibility to the reason for this inevitable/necessary preservationary role for government in his post (3/06/01 msg#49500):

--- "Much of the danger from other humans stems from
"clique selfishness," that is, each group attempting to take
care of their own at any expense. This is a development of
modern populations that are too large for face-to-face
knowledge with each other - - - usually in combination with
a lack of understanding of the advantage of trade because
"division of labor" makes such trade a win-win situation."---

My comments portray an oversimplification, surely, because they have not thus far fully acknowledged the potential difference we might have seen from an unfettered free-will progression of social interaction ("custom") as it might otherwise have evolved outside of the insidious coercionary influence of government's less-flexible and less-timely institutionalization of **yesterday's** customs. This, along with government's incremental legislation of self-serving appropriations and arrangements.

But more importantly, I think -- to an extent far greater than your current ideological framework allows you to accept -- that the whole of the banking structure stands quite apart from this concession of a "privileged" position enjoyed in degree by government alone as an institution participating in the give-and-take of a dynamic society.

You may not be aware or share this perception, but as an individual (particularly an economist), it is in your best interest to at least know something of the thoughts from behind the eyes of the population you study. In consequence, my next post to you will address what I see to be a principle flaw in your Monday commentary (3/05/01 msg#49408 directed to Holtzman) regarding the motivations of people and the subsequent value of currency and gold used in trade and savings.

If it counts for anything as you read this and what follows, please know that for a time in the past I once shared your lines of reason, but found that these such flowers of thought seldom bore fruit over the course of the season, always to whither on the vine. I have since changed my views as perhaps you will do one day, also. We simply cannot continue to discount the human element in our forecasts -- as you are seemingly inclined to do in favor of briefly glimpsing unattainable perfection, or shall I say, you embrace unreasonable human expectations given all we have seen.

Randy (@ The Tower)Why currency and savings are best viewed and used as vinegar and oil#495793/8/2001; 3:08:02

[My advance apologies for the length. Scroll by if you already view gold and currency as necessarily two separate and useful tools for two separate economic functions.]

To reiterate from the previous, many persons having strong dissatisfactions with government make a fundamental error in extending or projecting this same anti-government sentiment upon the unrelated realm of currency and banking. Feel free to "hate" none, one, or both, but recognize that you must not level charges at one based on the sins of the other. No matter what wide range of passions a person might harbor toward government, they must analyze the issues of banking and currency with an untainted eye....and only then might they justly hurl stones if any such airborne deliveries are found to be warranted.

This commentary stems from the need for a response to ORO's Monday rejection of an explanation (one of many possible) offered by Holtzman regarding why the euro was not crafted to be a fixed gold-standard type currency. In fairness, ORO, you make some sound counterpoints, my favorite of which was: ---"No government would disarm itself of its ultimate purchasing power in order to attempt a destabilization of another. It is like hurling one's cut off head at the enemy, one can do it only once, and is likely to suffer more from doing so than the target."---

But in pitting "Joe Average" against "The Evil Government" as you so often do, you set yourself up for what I feel is a fundamental flaw in your thinking. You say:
--- "The mere existence of the fiat currency takes substantial portions of Joe's dinner, and takes away his best clothes."---

[An interjection: are you sure you are not confusing "fiat currency" with direct taxes upon Joe in that previous sentence? But let's continue...]

--- "There is no value whatsoever which fiat provides the "average" person. The only beneficiaries are the thin layer of high government bureaucrats for which all Joes slave, and the politician elected by Averages to the post of slave driver.
+
Joe Average's current behavior regarding debt accumulation is a function of his need to protect himself from the depreciation he expects of his future monetary income. The self-indulgence we refer to often, is that resulting from the habit of trying to outwit the monetary authorities and their coterie of hangers-on. Joe does not need or want fiat money, he seeks protection from it."---

ORO, you have misidentified precisely what it is that Joe is seeking protection from, and the seeds of my objection to this passage quoted above are found within your own excellent thoughts offered earlier in that same post. Regarding the nature of the euro currency itself, you provided:

--- "The reason for the Euro not being a gold money is that what was desired was a currency. An inflatable currency based on debt, coupled with the possibility of having a cash gold element when necessary, so that rather than provide Euro for liquidity by buying market debt, euro would be used to purchase gold to provide liquidity. Thus assuring balanced books at the ECB and member CBs without having to hyperinflate the Euro.......
+
The EMU is not about solid honest money so much as it is about the political needs of EU governments and politicians to have a non-German non-French money -- one that is not a political football between the two governments. Thus the need to have gold in the system results from the need for a non-partisan money within Europe. The dollar experience has made the rest of the world wary of a new Western debt money for trade designed in all its institutions to benefit only its issuer. The Gold scheme is the alternative that allows Euro to be a potentially politically neutral currency."---

Who truly has any strong objection to that as a starting point? But now, lets get back to the meat of the matter and reflect on your key comment, "Joe does not need or want fiat money, he seeks protection from it." Again, it is important that we understand from what it is precisely that we, the "Joes of the world", are truly seeking protection. Yes, it is the currency, but not because it is fiat. Let's use your own words against you from this same post to Holtzman.

--- "Your [Holtzman's] pointing out to the 1920s and 1930s as having anything to do with a gold standard implies an erroneous view of the monetary system that collapsed. It was not a gold standard system, but a leveraged gold standard, where the degree of leverage was controlled and purposely expanded by government regulation and directly by government itself. Governments manipulated the credit system into expanding to such an extent that gold constituted under 5% of the money supply. Obviously that was not a gold standard."---

It absolutely was a gold standard! And Centennial can sell you the authentic $20 gold coinage to prove it. <big smile ha! Ha!> And that was the exactly the problem with the currency! And to be sure, this is the same expansionary (supply) problem to be expected with any currency used in banking. You lay blame on the government for the problem, but in truth, the issue of such problematic collapses is only an issue of scale versus timing as guaranteed by human nature. The problem is one banking, and to be sure, the expansion/contraction problem is independent of the currency and the role of good or bad governments. And just as Journeyman might be heard to say, "If you don't believe me, just ask me!"

So, getting right to it, let's address your flawed issue by beating this dead horse some more. You say, "Joe does not need or want fiat money, he seeks protection from it." But please consider this odd notion of mine: in truth, Joe needs fiat currency so that he can attain MEANINGFUL protection FROM it.

History has taught this lesson, and for the first time on a grand scale "someone" has taken notice and acted accordingly. ORO, I know you have been exposed to this full line of thought before and have recently offered your resisting thoughts, but I must nevertheless reiterate this counterpoint now for those newly arrived or following along slowly so that each man is armed to be his own judge and act accordingly. (In the end, what a happy circumstance it is that despite our differing views, you and I both recommend gold acquisition as the conclusion of our thoughts.)

In the course of normal commercial banking activity any fundamental asset which is selected (naturally or "artificially") and put into use as the circulating unit of currency experiences an unavoidable inflation (expansion) of its apparently available supply. As you should know, this holds true with or without the presence of a central bank, though is arguably apt to be more pronounced sooner in the timeline if a central bank is providing a moral hazard as lender of last resort.

Notably, with a central bank comes a mixed blessing -- that banking dislocations are much fewer, yet they are more colossal when they do inevitably occur. (Though we must consider modern bullion banking...there is no single global lender of last resort, and yet look at the expansion that was eventually attained in this modern day thanks to good business communication/cooperation by the parties involved. And yet, the eventual collapse will be colossal because the system is running on a global scale.)

When you propose the workability (and the mild inflations) of "free banking", you ignore both history and human nature, and have thus placed any of your subsequent economic thought upon a fictional foundation.

It is during the time that the banking system is functioning normally and with high confidence that the currency expansion runs at its greatest while at the same time undermining the purchasing value of all long-term savings denominated (as would seem natural to "Joe") in the fundamental asset defining the currency system.

Even if originally built upon such solid fundamental assets of gold for use as hard-money currency, the banking system soon evolves into a predominant system of elaborate accounting with an attendant waning of the perceived importance of the physicality of the fundamental currency unit. Thus, the phenomenon you describe of Joe seeking protection from fiat currencies actually has a parallel in those seeking general protection from ANY currency used in banking, including hard-money banking. (Witness the experience of modern bullion banking and the diminishing effect of its paper ledger supply upon the value of physical savings acquired in the fundamental denominating asset of that banking system, gold.)

ANY thing can serve as the basis for the accounting units we use as our currency. (Just look what we are using now...credit! Mere contracts of promises, promises to repay units of other people's contracted promises!) But, only gold is suited best for use as instantly liquid non-bank savings. Gold works uniquely well in this savings regard because it is "monetary" by its nature, independent of any mandate.

And thus, if the currency unit itself is to be gold, by your insistence upon a wide continuation of bullion banking rather than some other form of currency banking, you have effectively cut off Joe's most natural choice of savings alternatives outside the commercial banking system. The savings asset of choice must be something other than the currency asset to remain safely immune from the naturally occurring ledger-induced inflations and deflations experienced by the fundamental currency asset which is itself further represented systemwide by the banking paper that is lent and circulated as its equivalent.

As we see, when it comes to currency and its supporting banking system, the function is more important than the form. So, to modify your original premise, Joe needs the existence of fiat (paper) currency as a means to set gold free...because he has a greater need for this unique yellow asset for the preservation of his wealth. He must, in ANY circumstance, seek meaningful savings protected from banking's effect on any manner of currency, be that dollars, silver (HA!), or euros. These are two distinct "jobs" (currency and savings) that require two distinct asset "tools". And given the relative importance of each "job", it is more important that Savings be the one that utilizes the best of the monetary assets, gold. And as Currency ultimately devolves to an elaborate system of paper accounting via banking, it might as well drag nothing physical down with it.

The temporary problem with the system today, as FOA has said recently, is that our current system is only halfway complete. We have expansionary fiat currency AND we have expansionary gold banking operating side by side. We don't need both. With gold wrapped up in the banking intrigue, it cannot yet provide the expected performance as a savings asset keeping score of our wealth. (Not yet, that is, if you are looking at it as a savings asset versus the dollar currency. To the folks in Turkey, it is doing just fine versus the lira currency!) Because we and the euro framers recognize that human nature will dictate the terms in the end, we are aggressively acquiring cheap physical gold today for the coming collapse of bullion banking and the resulting upward revaluation of gold in its role as a wealth saving asset.

Knallgold@ORO-Connolly and the freedom of Europe#495803/8/2001; 4:04:52

But why the hell think insiders the euro will win the battle?The EU has a major political problem,and this will take the euro down with it.I refuse to add an IMHO here.If you put the euros strenght solely on the weakness of the $ then it is as weak as you can think.

I have followed the Maastricht creation,every trick was used to be included in the "fine" club.Impudent and blatant budget manipulations,the US couln't have done it better.And I can't follow the propaganda that Europe has less debt.Italy and Belgium are bankrupt.Germany has trillions of debt.Even the 7 million Swiss have 200billion official debt.,but posts now for the first time black numbers.

And having 10 percent unemployment in good times doesen't speak for a strong economy.Switzerland was up to 5% during the hard recession but is now back to 2. %,thanks to a hard currency we had a lot of painfull restructuring to do.

And now the EU threats Ireland with punishement because of an overheating economy-but who makes the monetarian policy in Europe???

Freedom.It is slowly eroding.The media situation is Goebbels like and I don't use that term loosely.The EU Comission calles me "rechtsextrem"- Nazi and antisemitic because I voted for the conservative libertarian SVP,and Switzerland isn't even in the EU!Schroeder the Kaiser doesen't see Switzerland as a sovereign country anymore (his remarks in the money laundering cause,it doesent matter if you are a member,you have to do the "good",because Europe is a "Wertegemeinschaft".And of course the socialists define what is good,like Hitler did)

Freedom is nowhere on the agenda here,officially!Solidarity,Faireness,Equality.Gone the legalism state (sp?).The moral state is back!

Remember the Austria case?Don't go skiing at the Jews ähh the Austrians?Since then,everybody knows the real face of this so called European Unification.Recreation of the Roman Empire,at all cost.Remember Schröder going to Lybia to thank Gadhafi for helping(=paying)in the kidnapping case in Malaysia?EU giving money to Palästinia?The role of Israel?Turkey is also on the joining list of the EU.You see the old borders of ancient Rome again!

I don't lose a word on the ridiculous EU bureaucracy.Just that,the norm of condoms.

And the EU is running around and saying we are the better model!Of course they don't/can't allow the competition of the systems.It is embarrassing their incompetence and arrogance.

The euro is a misconstruct,has ever been,whatever the "experts" tell us.It is doomed to fail,everbody (the peolple) knows it,they are just not allowed to say it officially.Denmark did,Switzerland did.All know the Brits think the same.If you followed the Englanders and the Swiss in the past you did well,in freedom I mean!This time?

As soon as the dollar is repaired,investors will flee from the euro.I wouldn't be surprised that after an euro failure the europeans will start to knock their heads again.I don't hope this is exactly the plan of the NWO.

I am very glad the Swiss got the curve finally,their own way is.This cause is dead for the next ten years here,whatever the media and politicians say.Our governement don't likes their people now,but hey,we are the boss by constitution and can kick some butt at will.

If the EU/euro is the only alternative for the Dollar collapse,then I prefer the nuclear economic event(FOA)!
You can't buy me with a little ultrahighpriced yet demonitized (!) "freely" traded commodity'sorry store of wealth -Gold!

Europe has to solve its problem NOW,get rid of socialism and socialists ASAPst and turn to freedom ULTIMATIVELY.or it will end in a desaster.People might be lulled and brainwashed,but they have a strong selfconfidence,love their individuality above everything,and are no more like slaves.Paternalismus and "Grossreich" philosophy will fail.No room for arguments here.

Freedom.Europe,get it!NOW!
Gold.All,get you more.

Strong words,I know,but you know how I think.

Thanks for reading.

Randy (@ The Tower)Finding value#495813/8/2001; 4:16:24

ORO, you have said, in your post to Holtzman (03/05/01 msg#49408):

--- "the separation of the wealth and trade functions of money into currency for trade and debt, and gold for savings is not desired, required, or of general benefit to the country that adopt it. The bulk of gold's purchasing power is derived from its use in trade. Gold obtains its premium when used in trade it is a premium over its wealth value. When gold is displaced from use in trade by law (the law that establishes fiat money), by fractional reserve banking producing fiduciary gold substitutes, or by dilution of the gold content in coin, its purchasing power is low, and it is hoarded as wealth. When gold is used in trade, it obtains such a premium as to eliminate the bulk of its wealth function, thus it is not hoarded when used in trade, but dishoarded.
+
It is dishoarded because of the premium it obtains in trade, where it finds its best use. FOA shows the significance of gold's use as a trade money – not a wealth money. (I believe his usage of the words is a reverse of my use, but the concepts we present are identical, gold serves best in trade, not as a hoard). Governments and bankers have forever attempted to gain for themselves the premium gold obtains in trade over the value it obtains as wealth – the same kind of wealth as a precious painting or bottle of oil.
+
Holtzman, Aristotle and others have fallen into the intellectual trap of impossible coincidence. Namely that gold can obtain its full value - its trade premium - without being used directly or indirectly in trade and therefore in denominating contracts and debt. Yes, a portion of the gold premium may be absorbed in credit expansion and the use of fiduciary substitutes instead of gold bullion, but this portion is minor and steady in relation to the gold stock, thus having a minor effect on its value (once the fiduciary portion is created, and so long as government does not encourage further credit expansion)."---

It was this final sentence of yours that I was essentially addressing with my earlier counterpoint comment, "Though, we must consider modern bullion banking...there is no single global lender of last resort, and yet look at the expansion that was eventually attained in this modern day thanks to good business communication/cooperation by the parties involved. And yet, the eventual collapse will be colossal because the system is running on a global scale. When you propose the workability (and the mild inflations) of "free banking", you ignore both history and human nature, and have thus placed any of your subsequent economic thought upon a fictional foundation."

While you are seen to object in these words to a separate asset for savings and for currency, you now that I come down in favor of the right tool for the right job as stated beyond overkill in my previous post. And additionally, it is important that I let you know that I once shared your specific opinion about the highest value for gold being achieved through its trade use, but I no longer hold that view. By wiping out the dilution (an inevitable effect accompanying its use in trade as a currency introduced through banking), it is with the separation from currency in a near parallel "monetary" usage as a universal highly-liquid savings asset that provides a window into the true and higher valuation for gold.

It is this unique value of gold for use as a savings asset -- as a global yet non-national "monetary system" for savings -- that has yet to be properly priced by the market in modern times. In the price of gold in today's market we only see the dilution effect of bullion banking, without much of your added premium effect for its direct trade usage, and further suffering without having any clearly perceived usage role among the eyes of the majority of the western world.

I think if you return to reread FOA's commentary on the Gold Trail regarding the historic role of gold and its use-value in trade (as compared with the bottle of oil), you will see that he was leading to a conclusion for today's world that does not match the one you have attributed to this example. Today's world is not as it once was, and asset usage changes accordingly. In today's world, gold has more importance as a wealth (savings) money than as a trade money.

Practically speaking as a man with free will, I would never choose to spend from my gold savings if I also had a payment alternative using an equivalent value-quantity of paper currency which was likely recently acquired from ongoing productivity/earnings. Because ANY currency inflates in conjunction with human nature, banking, and government, when given the choice between either pile of instantaneously equivalent values in gold and currency, we choose to hold the gold for its advantage found "tomorrow". In this realistic scenario in a post-bullion banking collapse you should see gold's wealth (savings) value exceeding the trade value as represented by the equivalent currency holdings that were spent "today" instead of the gold.

Randy (@ The Tower)Back to business...Bank of Japan Governor Hayami says strong currency in Japan's interests#495823/8/2001; 4:53:32

http://biz.yahoo.com/rf/010308/tau024435.html

TOKYO, March 8 (Reuters) - Bank of Japan (BOJ) Governor Masaru Hayami said on Thursday a strong currency was in Japan's interests and it was desirable for foreign exchange moves to reflect economic fundamentals.---

The latter portion of this in particular sounds like an echo of words spoken not long ago by U.S. Treasury Secretary Paul O'Neill regarding the U.S. dollar prior to the recent G-7 meeting. Given the fundamentals of the massive U.S. trade deficit, do you think the foreign exchange markets will much longer "reflect" favorably upon a strong dollar?

RockgrabberDO we call this fortunate?#495833/8/2001; 5:09:39

Fiat Money has been a great invention. Without it I would never have been able to accumalate gold so easily. Imagine if we were on a gold standard, how little gold you would have? Sure it would be worth more, but I am not sure how long this under par value will hold. POINT... I dont think ever in history has gold been soo easy to obtain. For how easy it is to obtain dollars, and how cheap is gold?
TopazRandy#495843/8/2001; 5:26:16

Whew! I'm glad you got that off your chest Sir.
How do we determine the value of our hoarded Gold if it's not used in trade, other than by decree? (back to the future - Bretton Woods)
Thanks for ALL your efforts here.....Herculian!

TopazLease rates are "GO"#495853/8/2001; 5:37:08

Monthly Au 5.15%
GOFO about to be re-named Gold offered "backward" Yar!

justamereBearOro Randy#495863/8/2001; 5:50:53

I would like to comment that any means of exchange is hoarded, used in trade, or whatever, only if it is accepted by all the parties, and percieved as, a store of value. If gold is not seen as a store of value, what purpose is it fulfilling other than an industrial metal? Personally, I see a good deal of the decline in the POG as attributable to the very efficient propaganda machine that debunks its use as a store of value with the public, thus reducing its price toward that of the industrial metal component of its market price, and destroying its monetary value component.

For gold bugs, thank god old workable ideas and traditions die hard, and gold is likely to see its day in the sun again.

Respectfully
j'Bear

tedwDeflation#495873/8/2001; 6:44:43

http://www.usagold.com

Jude Wanniski on deflation and Gold in todays world net daily at www.worldnetdaily.com
RossLGold leases#495883/8/2001; 8:52:36

http://www.gold-eagle.com/editorials_01/bugos030801.html

Ed Bugos with some theories on gold leasing.
Galearis@Randy (@ The Tower, your#: 49578)#495893/8/2001; 9:00:44

As a "liberal" who feels that democratic government functions as a fine line balancing act of representations of multi-dimensional supports from its backers (and detractors)I salute your views and subscribe to them fully.

I too have been an admirer of OROs magnificent insights to macroeconomics and fiscal matters and can only find some minor disenchantment when there is an ideological shift that diminishes the message, from my point of view, with the effort to place some small squareish pegs in some roundish holes. These holes involve social conscience of governments to their electorate.

At the same time we all owe ORO a great deal for his insights and the aclaim he has received is VERY well earned.

Having said that: not everything socialistic is wrong (misquided?). Our family was a handicapped one for many years with a child who would not have survived in a non-socialized medicare welfare state. Therefore, in spite of the ideological pressure of many who would cry "unearned" and "unworthy" I would submit to you that the "misguided government" of the day payed many thousands of dollars per month to keep my child alive - and that is a lot of currency spent to buy two votes. It would seem to underline the fact that even a bureaucracy can have a heart.

That the child died anyway would seem to underline that this too was a waste (?)

But it should surely destroy the myth that governments are heartless and self-serving of the few over that of the majority. Governments may have hearts even if they are of an institutionalized nature. And one works harder to repay this kind of debt too -even if the currency one pays back takes a different form.

This is a point that is often not seen, or shall we call it a point that has suffered some discount.

Best regards,

G.

Mr GreshamOther Markets: Indicators? New questions?#495903/8/2001; 9:10:12

Just a quick wake-up thought this morning -- not sure if I know where to research these but:

If Euro is going to displace Dollar as reserve currency, or at least make serious gains against it this year (whose prediction was $1.28 -- GS? not sure) shouldn't we see some signs of this in futures or options markets?

And, if gold paper markets are headed for breakdown, does that apply to options markets (Q for FOA?)(CBOT?) and shouldn't that possibility or a spike show up in some of those? COMEX is not the only market that would need to be "managed" in this case, is it?

FredBearMr Gresham (3/8/2001; 2:44:52MT - usagold.com msg#: 49576)#495913/8/2001; 9:17:53

Kinda of makes you wonder, does it not. The Japanese Finance Minister says the sky is falling and the currency traders say "Tea anyone?"

Picture Al Greenspan saying "the US Federal government finances are close to collapsing."

Think that would have an effect somewhere?

The US has to try so hard to keep up the illusion of prosperity and growth while the Japanese can't give the store away.

GalearisHUGE#4959203/08/01; 09:56:12

lease rate hikes...

continue!

Pulling
out
all
the
stops
to
cap

G.

geFiat Money for trade & debt - Gold for saving?#4959303/08/01; 10:03:39

I think the above proposition implicitly implies that the business cycle shall be abolished.

Let me try to illustrate it with some examples:

- The year is 1980 and I buy gold say at $650/oz. Shall I profit from it?
- The year is 1982. Should I buy gold or should I enter the stockmarket?

All right, you could say, these are the paradigms of the past, and in the coming new era such fluctuations shall not happen. Then why does the business cycle exist? Let me offer my position by quoting von Mises:

BEGIN QUOTE

The monetary explanation of the trade cycle is not entirely new. The English "Currency School" has already tried to explain the boom by the extension of credit resulting from the issue of bank notes without metallic backing. Nevertheless, this school did not see that bank accounts which could be drawn upon at any time by means of checks, that is to say, current accounts, play exactly the same role in the extension of credit as bank notes. Consequently the expansion of credit can result not only from the excessive issue of bank notes but also from the opening of excessive current accounts. It is because it misunderstood this truth that the Currency School believed that it would suffice, in order to prevent the recurrence of economic crises, to enact legislation restricting the issue of bank notes without metallic backing, while leaving the expansion of credit by means of current accounts unregulated. Peel's Bank Act of 1844, and similar laws in other countries, did not accomplish their intended effect. From this it was wrongly concluded that the English School's attempt to explain the trade cycle in monetary terms had been refuted by the facts.

The Currency School's second defect is that its analysis of the credit expansion mechanism and the resulting crisis was restricted to the case where credit is expanded in only one country while the banking policy of all the others remains conservative. The reaction which is produced in this case results from foreign trade effects. The internal rise in prices encourages imports and paralyses exports. Metallic money drains away to foreign countries. As a result the banks face increased demands for repayment of the instruments they have put into circulation (such as unbacked notes and current accounts), until such time as they find they have to restrict credit. Ultimately the outflow of specie checks the rise in prices. The Currency School analyzed only this particular case; it did not consider credit expansion on an international scale by all the capitalist countries simultaneously.

END QUOTE

If one agrees with the above-sketched analysis of the trade cycle then the following policies can be suggested:

1 Install Gold standard &
2 Abolish Fractional Reserve Banking.

What happens when there is "credit expansion on an international scale by all the capitalist countries simultaneously" still remains to be studied?!

Abolish Fractional Reserve Banking:
------------------------------------------------
As far as I know, there used to be two kinds of banks: Deposit banks & investment banks. The deposit banks would not pay any interest on the money deposited and in fact charge some fee for storage - however the money could be withdrawn at any time. The investment banks did pay interest - but the depositor could not withdraw his funds until the end of the term. Modern banking, by combining both the deposit and investment modes has in fact evolved into an unstable structure.

The deposit banks were possible because in a gold standard, prices fall as the economy expands and production increases. To illustrate the idea with a crude example assume that the monetary gold stock is 10 ounces and the GDP consists of 2 computers, then the price of each computer would be 5 oz. Now as the production increases and the GDP becomes 10 computers the price of each computer would be 1 oz. In such an environment, deposit banks become feasible.

-----------

At this point, I would like to make a speculation:

Assume that the plan is succesful. Gold soars to $30,000++ and Euro becomes the reserve currency. At that time, shall it be safe to buy gold with the savings?

I doubt it.

In fact it might be the equivalent of buying gold at the 1980 peak. This time however, it looks as if the gold shall become overvalued and stay overvalued. Using the 1980 example, it would reach $650 and stay there indefinitely. Why? To mask the inflation in Euro.

Let me illustrate this with a calculation. Assume that European Central Bank plans to inflate the money at rate of 5% p.a. Further, assume that gold becomes overvalued by a factor of 60%., then it would take 9.6 years for gold to become fairly valued ( 1.05 to the power of 9.6 = 1.6 ). Equate the overvaluation factor to 6 and the time extends to 36.7 years!

As I switch into my conspirational mode <smile> I can see a multi-faceted strategy emerging:
- Make the gold overvalued as reserve currency is switched from USD to Euro.
- Make public believe that saving in gold is the thing to do under all circumstances.
- Slowly sell the overvalued gold to unsuspecting public and increase the monetary stock.

Mr GreshamGalearis#4959403/08/01; 10:35:08

You are certainly qualified to speak on the elements of "heart".

My last microeconomics textbook was prefaced with a discourse on "efficiency" vs. "equity", with the first being the common view of what economics is about, and the second what most human beings probably want out of economic processes. How to maximize each in balancing them is what much economics debate deals with.

My quickest thought (as a coughing child clamors for my better attentions) is that the economy exists within society, and society can draw rules to circumscribe it, just as individuals choose how to allocate their time and energies to economic and non-economic pursuits. However, society cannot totally outvote "human nature" and self-interest, and so it is worth understanding and using the dynamics of markets within a social context. And I can't think of many societies that have done a very good job of this.

(You might say that technology has thrown more wild cards than usual at us in the past century, both as a driving force for humanity to "get it right" and as the spoiler to keep us from doing so...)

However, it is often within the interests of market players to convince society that IT exists within the boundaries of markets and should bow entirely to those dynamics. It is even worth funding a propaganda campaign to push publlic opinion toward the worship of markets. (Think Heritage, Cato, AEI, Olin, Coors, etc here.)

The issue of government that Oro does not address much is the "trust-busting" value of government as society's institutional response to "big business" when finance and/or technology have permitted combinations that may overwhelm even market balances.

Oro -- pardon me, friend -- would probably reply that government has not fulfilled this function (whether or not a valid one) for some time, if ever, and is even vulnerable to (or likely to be) capture by big business (bribery, campaign financing), and so it would be better left out of the process entirely.

Oro is a corrective voice of realism for me. Depressing at times (that EU stuff yesterday, sheesh! Things I'd never heard, or thought of) but better to be heard than keep blinders on, says I to meself.

Without public self-education and a resulting consensus as to the desired balances between society and markets, I am afraid the "liberal vision" does not represent a very strong alternative to Oro's well thought out positions at this time. Someone who is as good as Oro at what he does deserves to be answered with equivalent depth, but my thoughts at this point come off sounding squishily to myself like "If people would only..." -- yecch!

(Yes, if there is not a "consent of the governed", then government is oppressively coercive, and we do not hear that consent at this time. There is dissent, ignorant acquiescence, but very little "informed consent.")

(And if "actually-existing liberalism" is that which we inherited from FDR, then maybe there's a burden of past history and assumptions that needs to be cleared away for that thinking to take place...)

(And what about when each ideological side thinks that government has been in the control of the other side all this time?)

(But wouldn't you like to lock Oro in an interrogation room with Ralph Nader for an hour and watch/listen through the glass? - {smile})

And -- hey! -- how about those Leapin' Lease Rates!?!

ETRandy#4959503/08/01; 10:41:02

Hey Randy - if I might interject a few comments to help in your understanding. You wrote in part;

"To be sure, ORO, your analysis stands strong in the theoretical world which you frequently construct with your
ideologically tainted views of government. But, the economic utility of your work is diminished by the degree of
departure of your ideology from our living reality.

"Whether you "like it or not" the governments we have today are part of the landscape. You will not move a mountain by
shouting at it or making arguments against it; (but thankfully, it is up to each man alone to decide how he chooses to
spend his own precious allotment of time and energy.)"

Might I suggest Randy, that governments are today what they are precisely because of attitudes like yours. I will submit to you that you will move mountains by making arguments against them, reason is all we have to work with.

"So, what of this governmental mountain? Taking the large view, it can be said that under threat of "mob rule"
governments operate today and tomorrow under terms acceptable to their constituents and their neighbors, and similarly,
we see citizens operating today and tomorrow under terms acceptable to their system of government and their neighbors."

Nonsense. Governments operate today by force. Please take the time to read Frederic Bastiat's "The Law". Things havent't changed since this was penned in 1850. Government today can only be described as mob rule.

"Significant imbalances on either side tend to bring about a compromise in the acceptable terms of operation to restore the
dynamic state of harmony."

Nonsense. There is no compromise with force.

"It could be argued that as the realm of mankind's interactions become more intricate and complex, governments exist -- if
for no other reason -- to institutionalize/formalize the "custom" of the natural social order of the day. This is seen as
man's own attempt to guarantee that the collective well-being of the present time extends into the foreseeable future. (A
simple judicial system comes to mind as the start point, distinctly *not* as a "babysitter" to help "the poor" however
they might be defined.)"

Governments exist to institutionalize plunder. The collective well-being is not served by one citizen plundering another in the name of social order.

"My comments portray an oversimplification, surely, because they have not thus far fully acknowledged the potential
difference we might have seen from an unfettered free-will progression of social interaction ("custom") as it might
otherwise have evolved outside of the insidious coercionary influence of government's less-flexible and less-timely
institutionalization of **yesterday's** customs. This, along with government's incremental legislation of self-serving
appropriations and arrangements.

"But more importantly, I think -- to an extent far greater than your current ideological framework allows you to accept --
that the whole of the banking structure stands quite apart from this concession of a "privileged" position enjoyed in
degree by government alone as an institution participating in the give-and-take of a dynamic society."

Nonsense. Please consider what the "legal tender" concept implies. It replaces a known standard of value with a standard subject to manipulation by those with a vested interest in obtaining what they have not earned via institutionalized plunder.

ETRandy#4959603/08/01; 10:49:54

Hey Randy - you wrote;

"To reiterate from the previous, many persons having strong dissatisfactions with government make a fundamental error in
extending or projecting this same anti-government sentiment upon the unrelated realm of currency and banking. Feel free
to "hate" none, one, or both, but recognize that you must not level charges at one based on the sins of the other. No
matter what wide range of passions a person might harbor toward government, they must analyze the issues of banking
and currency with an untainted eye....and only then might they justly hurl stones if any such airborne deliveries are found
to be warranted."

Your premise is flawed. Currencies today obtain their value via law. Governments make law. Banks exist today via charter. Governments charter banks. Governments passed laws requiring charters. Please reconsider your premise given these facts.

ETKnallgold#4959703/08/01; 10:59:46

Hey Knallgold - you wrote in part;

"Europe has to solve its problem NOW,get rid of socialism and socialists ASAPst and turn to freedom
ULTIMATIVELY.or it will end in a desaster.People might be lulled and brainwashed,but they have a strong
selfconfidence,love their individuality above everything,and are no more like slaves.Paternalismus and "Grossreich"
philosophy will fail.No room for arguments here.

"Freedom.Europe,get it!NOW!
Gold.All,get you more.

"Strong words,I know,but you know how I think."

Kudos my Swiss friend! Congratulations on your country's utter rejection of the EU and its currency. Perhaps it is easier to see from Europe what reliance on government does to the citizens liberties.

Strong words indeed, but words that need to be said.

beestingCreation of Wealth-Dilution of Wealth-Destruction of Wealth!#4959803/08/01; 11:02:03

Condensed Version!

The following is from notes taken from Dr. Rex Frank's talks in the early 1970's:

1. All wealth is created by production,period!

1A. Productive people trading amongst themselves only need an accepted medium of exchange to function well.History tells us Gold has served this purpose the best.(Comment: Was this the early U.S.A.?)

2. The current worldwide banking system and paper money substitutes for real products "DILUTE" the value of the real wealth that has been created.
2A. The paper money in circulation today has been diluted so much noone knows what it's real value represents.

3. All Governments destroy the creation of wealth by taking from the producers of wealth and providing sustenance to non-producers and Government workers! Governments produce "NOTHING" of intrinsic value and run themselves like a new company with only one thought in mind, "EXPANSION, EXPANSION, EXPANSION!" This in turn thru out history is self destructing. All Governments draw (take) good people from the productive trades to help in the expansion mode, therefore causing less productivity and more Government!

Conclusion:
Group 1.(Production) can and has operated efficiently without the help of groups 2.(Banking) OR 3.!(Governments) Groups 1.(Production) and 2.(Banking) may?? be able to coexist together. Group 3.(Government) cannot exist without lots of help from group 1.!(Production)

IMHO the original intent of the U.S. Constitution was to start a new society self-governed exclusivly by the productive members of group 1., using Gold(honest money) as money so noone has an unfair advantage over anyone else.

P.S. In most society's family members take care of the young,the old, and those unable to produce and it usually only takes about one worker to support 6 or more family members, hence close knit families.
Thanks for Reading....beesting.

Randy (@ The Tower)Quick comments#4959903/08/01; 11:09:43

Topaz:
--- "How do we determine the value of our hoarded Gold if it's not used in trade...?"---

To clarify my position, perhaps I should have said that gold wouldn't likely be used in CONTRACTED trade. (That is, it wouldn't likely denominate trade contracts like currencies do.) Gold's value from day to day would in fact be determined in terms of each national currency by the amount of a currency that is offered "in trade" for it as amounts of gold in many hands moves in and out of its position as savings.

justamereBear:
--- "I see a good deal of the decline in the POG as attributable to the very efficient propaganda machine that debunks its use as a store of value with the public, thus reducing its price toward that of the industrial metal component of its market price, and destroying its monetary value component.
For gold bugs, thank god old workable ideas and traditions die hard, and gold is likely to see its day in the sun again."---

It is indeed this propaganda you've mentioned (put forth out of self-interest by the lessors (those who lease) of gold) along with the *temporary* international CB support for the dollar-based system (necessary to limp from 1971 to the next system) that has muddled the clear view of the gold in the eyes of the western public. This is what I was alluding to in final part of this comment offered earlier:
"It is this unique value of gold for use as a savings asset -- as a global yet non-national "monetary system" for savings -- that has yet to be properly priced by the market in modern times. In the price of gold in today's market we only see the dilution effect of bullion banking, without much of your added premium effect for its direct trade usage, and further suffering without having any clearly perceived usage role among the eyes of the majority of the western world."

To be sure, gold cannot be kept down and out from playing its proper economic role, and western man will soon relearn what the eastern man and emerging markets have known throughout these modern times about the most efficient operating system....that gold is more reliable for use as savings than currency is.

To extend this thought to clarify the sentiment of my morning presentation, it is very easy for any man to act at any time, including now, to simply bring gold into his life as a means of savings. It is not possible, however, for any man to act as easily to drive out the entrenched system of banking and paper currencies as used in daily finance and commerce across the earth. It just ain't gonna happen, dudes!

So, we all find the best way to work with the hand we're dealt, and in doing so, the system naturally evolves to the next stage. We will see bullion banking collapse on a global scale just as we saw it collapse long ago on local scales. When it does, the vast dilution of paper gold shall vanish, leaving physical gold to inherit the wealth-value that has been spread so thin this many modern years. Certainly there is nothing objectionable about gold in this role as liquid property? Real estate is non-portable, nearly indivisible, and highly taxed from year to year. Untaxed, portable gold makes for a better, natural savings asset outside of the banking system.

Galearis:
While I try to avoid pigeon-holing myself with categorical terms, seeing your application of the words "liberal" and "socialistic" in my direction sent a brief shudder up my spine. Despite my awkward morning effort to describe the existing landscape as I see it from a NEUTRAL political position, if I were forced to apply terms to myself they would be to some degree "republican" and larger degree "libertarian". But for the purpose of serving myself, my family, and this forum as best I can, I am better yet described as "a drop of water within a river"....flowing efficiently through whatever landscape is found before me, and in doing so, akin with erosion and deposition my action plays a small part in reshaping the landscape found by those who come after me.

Without prejudice for the terrain I simply flow downhill and perhaps move a grain of sand in doing so, all the while my only goal is to reach the tranquil sea; not to try to move the mountain. Because you see, as I move forward, the mountain...it moves/fades easily into the distance! And just as easily over much time, the mountain ceases to exist even for all who follow after, because each of us today carried without effort one small grain of sand on our "downhill run" as we each efficiently pursued our individual life's desired course.

Randy (@ The Tower)Sir ET, thank you very much for the comments.#4960003/08/01; 11:18:06

I am content to leave it to you to reconsider as you will. There is room on this earth for many thoughts. Some people even have room to save using Turkish lira, and they have my blessing. Freedom is a good thing!

got free will?

ETRandy#4960103/08/01; 11:18:34

Hey Randy - you wrote in part;

"Practically speaking as a man with free will, I would never choose to spend from my gold savings if I also had a payment
alternative using an equivalent value-quantity of paper currency which was likely recently acquired from ongoing
productivity/earnings."

If they are equivalent Randy, it would make no difference.

"Because ANY currency inflates in conjunction with human nature, banking, and government, when
given the choice between either pile of instantaneously equivalent values in gold and currency, we choose to hold the gold
for its advantage found "tomorrow".

A quick check of history finds times when currencies did not inflate as the means to do so did not exist. Your tying together of human nature, banking and government should tell you something about how we reached the problems we see today. Free banking would eliminate the government side of the equation leaving us just to deal with the human nature and banking. I fail to understand why banking "needs" this help from government if it is simply not to sanction plunder.

"In this realistic scenario in a post-bullion banking collapse you should see gold's
wealth (savings) value exceeding the trade value as represented by the equivalent currency holdings that were spent
"today" instead of the gold."

Randy, your so-called realistic viewpoint assumes the need for government supervision of our lives as we apparently are incapable of conducting transactions among ourselves without their guidance. Can you not see that government is there in the transaction, to skim off its portion of plunder for those that vote for themselves what they cannot obtain through their own efforts? Condemning ORO's viewpoint that the less government the better only confirms your blessing of plunder by the majority. Indeed this may be "realistic", but I, for one, will continue to fight those that wish to steal from me in the name of the greater social good.

KnallgoldET#4960203/08/01; 11:18:42

Thanks,appreciated!I still hope that a new Gold driven fiscal discipline will put an end to the socialist "dream".
JourneymanSir Randy capitulating?? @ALL#4960303/08/01; 11:19:34

Sir Randy,

You just knew something like the following had to come I'll bet.
You're a brave man!!

Let me see if I can condense your argument:

"Because the antiquated bullion banking establishment in cahoots
with out-dated central banks have engineered -- or more likely
stumbled into -- a serious bullion banking paper-gold bubble of
astounding proportions (which we all know will come to a bad
end), and temporarily deluded folks into accepting diluted paper
gold, we should abdicate in favor of electronic mega-byte money,
consigning gold 'for savings and jewelery use only.' This
bubble, developing over perhaps ten years and estimated at
somewhere in the neighborhood of 12,000 tons, has diluted the
known world gold supply by an horrendous 10% or so. Thus
megabyte currency is preferable because, unlike gold, megabyte
can only be diluted '100% every three months without entirely
killing the use of money in retail transactions,' according to
Keynes."

Do I have that right? I sure hope not!!

The consequences of this line of thinking are right in front of
us: Turkey, Ecuador, Brazil, Russia, South Korea, Indonesia. . .
. U.S.A.? We _will_ most likely have the hyper-inflation, you
know. How much can you get hurt by diluted gold? How much by
depreciating fiat?

None of the values that caused gold to EVOLVE into the preferred
transactional medium has changed over the last several hundred or
so years. Nor have the underlying manipulations of the fiat-
money mongers.

You're right, humans (and particularly governments and banksters)
will attempt to inflate anything, and I do mean ANYTHING. With
assignats (late 1700s French money), [*1] it was real estate!!
Yep, "assignats" began life as land titles, that is,
"derivatives" of that most limited of assets, land. None the
less, despite their down-to-earth "underlying," assignats were,
of course, inflated into oblivion.

Since this propensity to inflate - - - that is, kite your IOUs -
- - is apparently universal (and especially virulent amongst
governments and bankers), why make it easier for them by side-
lining the referee? So, they've put a few _fake_ referees on the
field. Will it make things better to ditch the _real_ referee??

It's clear that no promise to deliver _anything_ is safe from
dilution and kiteing. So, as long as promises to deliver gold
are accepted in trade as if they were actual gold, gold prices
can be manipulated, just not to as great a degree as fiat value
can be manipulated. And fiat always has that ultimate value
potential which gold simply can't touch: Zero. Why would you
want to risk any part of your buying power for even a few seconds
by trusting it to the one that's riskier?

It's true. Despite the rip-off nature of governments, and their
other ungentlemanly habits and that they are, on net highly
detrimental to the great majority of the populations they feed on
- - - not just the poor - - - we and probably our progeny will be
stuck with them in some form for quite awhile. However, the EU
declaring criticism of its institutions and leaders off limits
should give you a clue to the ominous ultimate destination of ALL
such organizations. That, however, is for a later post. But
none of this is a good excuse for giving up the fight for free-
market transactional gold. In fact, just the opposite.

As far as a preference to keep your gold rather than trading it,
there are two sides to a trade. While you might not want to give
up your gold, the guy you're trading with might not want to give
up his widget in return for your depreciating fiat. You might
have to offer gold. Especially true if your trading partner
lives in foreign climes where your fiat isn't traded "on the
street."

Will EVERYONE hoard their gold? How much do you want that
widget? They say everyone has their price. What's yours to part
with some of your gold? This is where trade starts, bickering
begins, and "price discovery" results. The composite of
"everyone's" price for gold is where it will trade in a context
of transactional gold and free-market banking.

But given the current situation - - - gold very likely to
appreciate appreciably (a situation that virtually never develops
with modern mega-byte fiat money) - - - I'd be reluctant to part
with my gold right now too!

Gold, simply by existing as a scarce substance, threatens poorly
managed fiats (and so-far, they all are poorly managed) and it
threatens them at all times and places. That's why "they" must
do as much as possible, now and for their forseeable future, to
discredit gold's use as BOTH a savings medium AND a transactional
medium. If gold's good for one, it's good for both. If bad for
either, it's bad for both. Neither goldbugs nor TPTB can concede
the field for one use without losing the entire war.

Gold is NOT schizophrenic. To the extent gold is spoiled as a
trade vehicle, it is also spoiled as a savings or wealth vehicle
as well. If gold doesn't circulate as money, then it must be
converted into fiat before it can be used. If the price at which
this conversion is done is manipulated and this manipulation
spoils gold as a transactional medium, it also simultaneously
spoils gold as a "wealth-preserving" medium.

And from the opposite viewpoint, we will not stop "them" from
manipulating the price of gold by declaring it "for wealth
preservation only." Folks are using gold as a savings vehicle
NOW - - - in India, Korea, Thailand, etc. Even some USAGOLD
customers perhaps? This hasn't stopped the BB-CB paper-gold
inflation -- or it's negative effects on physical gold holders
has it?

Despite the BOE auctions, don't you think rational folks would be
more likely to sell something when they can get more for it than
when they can get less? Thus the "for savings only" situation
makes it easier for "them" to keep their hoards of cheaper gold.

If you COULD consign gold to savings only, why would you? The
potential transactional use for gold, even if gold is mercilessly
diluted with paper-gold, dwarfs the savings use. When gold
becomes the preferred transactional medium, "they" would have to
inflate the paper-gold supply far more than it is inflated now to
cause a reduction in "price" to the "cost of production" - - -
which is where the pseudo-price is now.

You may say, "But just wait, though!"

That IS what we've been saying, isn't it? And that's exactly the
point: The true supply of physical gold simply CAN'T be
inflated. Eventually reality reasserts itself. To the extent
that reality includes transactional use for gold, the results
will be much more than merely spectacular. Patience Sir Randy!!

The practicallity arguments:

Many posters, most notably ORO, have thoroughly dealt with the
base-level mostly imaginary practical problems with transactional
free-market gold banking (like there isn't enough gold, etc.
There IS enough.) in previous posts at a time far far away. In
short, there really aren't any.

What we have in the world today is a massive ignore-ance of the
difference between promises to deliver something vs. the actual
thing that's to be delivered. Particularly for dollar users,
there is still a great deal of confidence in I.O.U.s of all
types. This confidence has set the stage for massive defaults in
delivery of all sorts of things. (Many of these potential
defaults are embodied in "derivatives" I.O.U.s, especially of
financial instruments, many of which luckily have an expiration
date, but that's another story.)

I.O.U.s (derivatives of all sorts) are regularly and normally
discounted on the prediction of their worth upon redemption.
Fiat currencies are really no different, though they operate as
general I.O.U.s. and are thus also subject to such discounting.
The result of this discounting in the case of fiat money is
called "inflation." Many of the defaults and resultant
discounting is already evident in palladium, oil, natural gas,
etc. Physical gold, not operating as an I.O.U., isn't subject to
this discounting, though the promises to deliver gold (since they
ARE I.O.U.s,) are.

Most folks, as proven by our ancestors through their "bank runs,"
are able to understand and deal with this relatively simple
situation once it's made clear. After all, it's not really that
hard to understand; it's sort of like driving away from the take-
out window with the order slip but no food.

The lack of this simple understanding will become more clear to
more folks as time and events progress, and this will greatly
help pave the way to transactional gold, and, as apparently
anticipated by the gathering of bankers at Jackson Hole a couple
of years back, the end of central banks and banking as we know
them.

We know however, we won't get this transactional gold from the
banker-government axis. They'd have to give up too much power -
- and the ability to rob the unwary. But we will get it in the
form of e-gold, etc., which is growing by leaps and bounds. One
site keeps nearly real-time stats on the volume of transactions
it processes. You can check out the increasing volumes of trade
for yourself at e-gold.com.

Regards,
Journeyman

NOTES:

*1. For those who don't know, "assignats" were the French
money inflated out of existence in 1790's France with dire
consequences to the entire society.

P.S. Sir Randy, I said "down with all GOVERNMENT fiats." If on
the otherhand Uncle Joe - - - or GE Capital etc. want's to float
their own I.O.U.s that's O.K. by me. I won't be taxed to support
them and if they go under, only I and the other folks who chose
to use them will be hurt, not the whole neighborhood, state and
nation.

SHIFTYRandy (@ The Tower) #4960403/08/01; 11:22:56

Farfel

I see your point .

$hifty

Old YellerFire in the hole#4960503/08/01; 11:30:40

http://news.bbc.co.uk/hi/english/business/newsid_1209000/1209118.stm

Pretty strong words from the Japanese finance minister.

It's kind of ironic they show you a picture of intense heat and smoke.

ETRandy#4960603/08/01; 12:02:15

Hey Randy - you wrote;

"I am content to leave it to you to reconsider as you will. There is room on this earth for many thoughts. Some people
even have room to save using Turkish lira, and they have my blessing. Freedom is a good thing!"

My point exactly! Is Turkish lira free of government intervention but more to the point, is it redeemable in gold or some other standard measure?

The Turks are unfortunately the victims of their own greed. They condoned a legalized "taking" for the greater good. Now they are confronted with the fact that those empowered to take actually took too much. Same thing here, same thing in Europe, same thing everywhere.

Where the "free-gold" argument fails is in the assumption that those that manipulate the money today will find it in their collective hearts to stop such manipulation. Given their track record, why would I rely on such an assumption? Why not rely on gold's value as money? Doing so relieves me of the burden of keeping track of these same people that have consistently robbed me since my birth. It just seems much easier to this old simpleton.

Randy (@ The Tower)Final comment before lunch#4960703/08/01; 12:05:09

Responding to --- "Randy, your so-called realistic viewpoint assumes the need for government supervision of our lives as we apparently are incapable of conducting transactions among ourselves without their guidance."---

ET, please consider this: With each and every additional home mortgage, We the People expand our currency supply. All governments aside, how do we then escape from ourselves?

The issues I put forth are economic ones based on the realities of banking. For the sake of this discussion about the efficient economic usage of gold and currency, so long as the direct taxation policy on each monetary instrument is accounted for, first things first and government is but an afterthought...a battle beyond my scope here.

I merely read the existing landscape and "calls 'em as I sees 'em". We can surely agree that an anthropologist does not become a caveman just because he examines and describes them. Neither does a sportscaster become a quarterback because he calls the game, or a weatherman take on qualities of a storm because he waves his arms in front of a map for the cameras....

JourneymanJourneyman goes out on a very thin limb. @Randy, ALL#4960803/08/01; 12:12:20

Awhile back, I said my crystal ball was broken but someday I would predict a return to a gold standard. I said that on that day the message would be headed "Journeyman goes out on a very thin limb."

In fact, I think the following is the curx of the matter, and proof things are about to pop. It is indeed the perception "they" need to get people to adopt that gold as a transactional medium is dead. Apparently "they've" been remarkably successful. I think Sir Randy is evidence of that:

"To extend this thought to clarify the sentiment of my morning presentation, it is very easy for any man
to act at any time, including now, to simply bring gold into his life as a means of savings. It is not
possible, however, for any man to act as easily to drive out the entrenched system of banking and
paper currencies as used in daily finance and commerce across the earth. It just ain't gonna happen,
dudes!"

Well, I am hereby predicting that it IS gonna happen. And that limb isn't nearly as thin as it was.

Gold has all the advantages over fiat it ever had. And then some. Watch the growth of e-gold.

Regards,
Journeyman

Peter Asher@ ET, Mr G. and Knallgold#4960903/08/01; 12:13:13

Fine, fine responses today to the insinuations that the government is here to help us.

And while you guys have been waxing so elequent this morning it seems that the ol' goverment's grip on Gold has slipped and Spot only needs 16 more minutes to make it through the Comex gauntlet and show a strong four point day!

PandagoldSome people appreciate gold#4961003/08/01; 13:05:18

www.ZAWYA.com/Story.cfm?id=emi-2fdsf_gold&imgactive=O

http://www.zawya.com/Story.cfm?id=emi-2fdsf_gold&imgactive=0

Thursday, March 08, 2001

Visitors at a jewellery shop in Gold Souq. ©Gulf News
A crowd of straw hats bobbing along...long queues outside the cash dispensing machine...and all that glitters is valuable as far as the eye can see. This is just one impression that greets the visitor at the Dubai Gold Souq.

The first week of the Dubai Shopping Festival has seen gold sales catapult. Businessmen trading in the noble metal are quite happy with the increased number of buyers gracing their shop floors. They attribute the rise to a number of factors including the long stretch of Eid Al Adha holidays, higher oil and low gold prices.

C.P. Renjith, general manager of marketing at Alukkas Jewellery, said that their seven outlets had recorded a 30 per cent increase in sales from the previous year for the same period. He said: "The Dubai Shopping Festival 2001 started off this year with a weekend, which was followed closely by Eid.

"This has been very good for business, especially when we compare it to the sales in the first week of the festival last year, including the Eid holidays. We have recorded a 30 to 35 per cent increase and expect this trend to continue until Friday.

"We have received a lot of shoppers from the UAE and Gulf Cooperation Council countries. The increased sales are due to the holidays, also the gold price is lower than last year. It is below Dh30 per gram.

"There also appears to be greater liquidity in the market due to the international rise in oil prices and stronger economies so people have more disposable income at hand."

He predicts the market will lull after the weekend until March 15, especially as schools have exams. So families and particularly people from the sub-continent, who buy a lot of gold, will not venture out for shopping until the exams are over.

Renjith said: "Then the market will pick up again. Around this period we will also see a lot more tourists, especially from European countries." But this rise seems to be restricted to the 22 carat gold market. The 18 and lower carat jewellery still haven't caught on.

Glennen D'Souza, Sales Coordinator at Shattaf Jewellers, said: "The 22 carat market is doing well, but the buyers for 18 carat is lower. "We expect the demand to increase as more Western visitors come in, especially from Europe. They tend to buy more 18 carat jewellery. The market should pick up more after Saturday."

Virendra Soni, Director of National Jewellery, agrees to this market analysis. He said: "During the Eid Al Adha holidays we mostly had Asian and GCC Nationals coming in to shop. Now more Western tourists will come in.

"This year we have experienced a good increase in sales for the first quarter of this month, I would personally bill it around 25 per cent."

While the businessmen count their dirhams and look forward to more tourists coming into the emirate, the visitors who are already in the country seem to be having an interesting time.

Fred Lerner from Ontario, Canada, transiting via Dubai while on a cruise to South Africa, said that he was enjoying his short stay. "I'm overwhelmed by it, especially all the gold in the Dubai Souk," he said. His wife, Margaret, said that bargaining was proving to be quite an obstacle for her at the souq. "I'm not used to it at all," she said.

Louise and Geoffrey Bates from London are visiting Dubai after 12 years and are witnessing the shopping festival for the first time. Geoffrey said: "It's incredible how the city has changed. The infrastructure, highrise buildings, festivals and everything else, the development is just amazing.

"Even the Gold Souq, the structure is the same but everything else has undergone a sea change. It's great being back."

@ Gulf News 2001

beestingSir, Randy # 49599---Gold used in everyday trade.#4961103/08/01; 13:22:13

From Randy's message:

<<It is not possible, however, for any man to act as easily to drive out the entrenched system of banking and paper currencies as used in daily finance and
commerce across the earth. It just ain't gonna happen,dudes!>>

A True Story:
Last week my wife returned from overseas. While there she spent all of her travelers checks, and left credit cards at home on purpose. Knowing my wife very well I had convinced her before she left to bring about 5 ounces of 24 carat Gold as a back up just in case she needed more cash, which she did. 3 weeks later she telephoned me collect to beg for some more cash(only $250). I sent $250 Western Union,,,,added wire cost $40.00, collect call $32.00.......Total $322.00 I urged her to sell some Gold.

When she came home she reluctantly told me this:
She had already checked out the local banks offer of $245.00 for one ounce of Gold before she called me.Spot was around $260.00 at the time. She would "RATHER" spend over $300.00(wired paper money) than get only $245.00 for the Gold. She had also "Sold" one ounce of Gold to her cousin for $275.00 before she called me.
The cousin a real jewelry person had "Never Seen" or touched 24 caret Gold before and was very happy to pay only $275 for an ounce.

Moral of Story.....Gold, Don't Leave Home Without It!.....beesting.

WW Oracle@Pandagold#4961203/08/01; 14:00:54

http://www.usagold.com/cpmforum/www.ZAWYA.com/Story.cfm?id=emi-2fdsf_gold&imgactive=O

"What do you think gold is, something you just drape round your neck, or wear on your hand?"

Thank you for posting the link to the story, Panda. And I sincerely thank you for returning to the Forum.

R PowellAnother three for three day!#4961303/08/01; 14:25:35

Gold lease rates are up again. POG did indeed run the gauntlet and escaped from N.Y. with a $3.70 gain. And the mining stocks are soaring with the CNBC gold index up 3.23 which is about 6%. I'm not sure exactly which stocks CNBC considers as gold mining companies. CNBC was even showing charts of Newmont Mining today. It's not too often you'll see them. Does POG continue up overnight to break out tomorrow? April comex gold options expire tomorrow so those who have sold call options will work hard to keep spot in the doghouse. Maybe a few stray cats are needed to get spot fired up. Hope so!
Rich

Tree in the ForestMegatron, Rhody#4961403/08/01; 14:27:18

Sir Megatron, you wrote:

"Very curious to me that a G7 country like Canada who is apparently in a SURPLUS!!! situation would sell 20,000 ounces of gold in FEB. @ $280.US. The measly amount generated wouldn't cover lunch in Ottawa. This is obviously an attempt to reliquify SOMEBODY..."

Could this "somebody" be Comex? Gold spiked about 2 or 3 days before Feb gold last delivery date. Comex had to deliver over 1/2 million oz. of the real stuff. They had only 91,000 oz. eligible. Could they and/or an issuer have come up short? Based on the numbers, it looked as though they shook loose an additional 290,000 oz. from their registered stock and another 1/4 million oz. must have come from elsewhere. The spike was induced perhaps to shake loose more gold and it may be that Canada was tapped for 20k oz. Comex numbers stand as follows:

Silver:

March OI=496 with 8832 stoppers
May OI=50,034

Registered stocks: 69,795,289
Eligible stocks: 28,177,459
Total: 97,972,748

Gold:

April OI=81,026

Registered stocks: 1,498,929
Eligible stocks: 133,944
Total: 1,632,873

There has been a rumor that Comex will not be able to cover March silver contracts. With almost 45,000,000 oz. calling for delivery it might be true but this is hard to verify. If you guys hear anything, please let us know. Thanks.

Cavan ManR Powell#4961503/08/01; 14:46:57

It's up another buck and two bits now.
R PowellMr. Gresham's 49590#4961603/08/01; 14:51:40

Mr. Gresham, "And if gold paper markets are headed for breakdown, does that apply to options markets....and shouldn't that possibility of a spike show up in some of those."
If I'm interpreting your question correctly, I may be able to speak intelligently. Almost all commodities' options are settled in cash (fiat). This is true of grains, softs like sugar and coffee, fibers like lumber and cotton as well as metals of all kinds. Only a very small percent of options are exercised into futures positions. Even the vast majority of futures positions are offset for cash settlement rather than delivery. Any failure to deliver, if it ever should occur, will have very little influence on options as cash settlement is what 98+% of options players are after. Don't misunderstand, please, I'm not saying a lack of the real thing is insignificant, I'm simply stating that options are settled for cash.
Also, options have both intrinsic value and time value. If an option is "in-the-money" then it has intrinsic value. As it is a right to buy or sell for a specific length of time, then the more time involved, the greater the value. The right to buy 100 ounces of gold at $260/ounce at any time for a year is obviously more valuable than the same right for one month. Intrinsic value plus time value eguals option value. But when the underlying commodity has price volatility (rather than barely changing in price for a long time) then the price of options reacts accordingly, that is they become more expensive as the seller is taking more risk in granting the option. Right after the W.A. gold calls skyrocketed in price about 500%. That is the same out of the money option with say one months time that was selling for say $200 jumped to about $1000. Those in the money saw a gain in their "time value" Hope some of this answers what you were asking.
Rich

Stocks, Lies, and Ticker TapeET,....msg. #49606#4961703/08/01; 15:05:05

Your last paragraph clears all the smoke from the room. Your reasoning is to the point, historically accurate, and rooted in common sense. Our world needs more such "simpletons".
714Randy (@ The Tower)...#4961803/08/01; 15:08:44

...are all those mortgages really inflationary? Second mortgages typically are being used to roll over already existing debts, so that really isn't an increase in money supply, just a debt service. And new, first mortgages are almost always for bigger, more expensive homes, and constitute an increase, again, in debt. How does this add to the money supply? I always had the impression, and experience, that debt destroys money. Tia.
JourneymanNASDAQ censors investors. @ALL#4961903/08/01; 15:14:38

Well that isn't quite the way NASDAQ's J. Patrick Campbell put
it, but that's the essence of what they did. It turns out that
NASDAQ suspended trading of Yahoo! after seven minutes yesterday
based on "unsubstantiated rumors from an analyst." While there
was substantial news from Yahoo! later, NASDAQ was not in
possession of it when they made the decision to halt trading. To
get this information, the CNBC reporter was forced to
persistently repeat certain questions, culminating with, "Will
you halt trading of a stock in the future based on
unsubstantiated rumors?" After much backing and filling and
obfuscation, the answer was, "Yes. Whenever WE DECIDE it is in
the "purvew of the public good or the investor's best interest."
-CNBC, March 8, 2001, 4:55PM EST

As I suggested, censorship. Suppose we'll see similar actions by
COMEX soon?

Regards,
Journeyman

Intel warns of a 25% revenue drop in the first quarter, down an
additional 10% from the recent previous warning of a 15% drop in
the first quarter. Intel also announced it will cut 5,000 jobs
over the next 9 months through attrition. -CNBC, March 8, 2001,
4:55PM EST

R PowellCavan Man#4962003/08/01; 15:16:54

"It's up another buck and two bits right now".
I'm smiling! That's in about an hour's time so can we figure $30.00 per day as the current upside velocity? How does that compute for POG for April Fool's Day?
I'm most encouraged by the lease rates. Maybe Rhody is lurking and will comment. I know he watches thoses rates most carefully and he seems to gain more insight from them than I do. I do know that high rates mean short supply and that high rates will shut off the gold carry as a source of cheap capital and as the source of the gold supply surplus that has hammered POG for so long. This also puts some real pressure on the shorts who leased (and sold) gold last year and now have to renew the lease or return the gold. How would most variable mortgage rate holders react to a 500% interest rate increase! Also, that gold was sold to raise $ for investment. The investment opportunities and monetary returns from the same are not so great looking now as compared to when a great amount of that leased gold was sold. How many "shorts" are looking to repay and get out?
This might be great fun shortly.
Rich

PandagoldThe tide is about to turn#4962103/08/01; 15:49:45

I said 'about'. The tide does not go straight out. In fact when it's going out, for a while it can look as though it is still coming in.

You have to look closely. And, when you have local knowledge of the tides, because it is regulated by nature, and not man, you know it is going out.

The financial tides are not regulated by nature, so you have to have more care,and be more perceptive. But they do ebb and flow.

There will still be effort by the manipulators to lead you on, and confuse you. There will be lots of conflicting rhetoric and false signals that hold you back and keep you hesitating.

No one, except an elite few (the manipulators)can hope to buy at the bottom. So, if you buy now, you may see the market move a little against you, but don't despair. That has to be.

When the market does make its big move, I guarantee, it will catch most people napping and if you are out, you will rue the day. What is coming is a chance in a lifetime.

Remember, many things are coming together. One BIG event that is not being trumpeted by the media is that a date has now been set for the opening of the gold market in China - JUNE. Gold is purchased by nations moving into wealth. China gets wealthier by the day.

It was China that saved Asia from complete collapse when Soros did the dirty by not revaluing her currency. No the media did not trumpet that either. But the Asian people know it. It is China that will revitalise Asia, and Asia loves gold - pure gold.

Many Chinese entrepreneurs are investing in many gold projects, and businesses. The Chinese are shrewd businessmen
don't underestimate them.

I say again, when the gold market makes its big move it will catch most people napping'

Tree in the ForestJourneyman#4962203/08/01; 15:51:31

Anything is possible with these guys. After all, they make the rules and change them when it suits them. Another thought had also occurred to me. It might not take a direct Comex default to break the Comex. There are OTC commodity contracts also which are invisible compared to the listed contracts. A default in a private contract could cause serious problems also. For example, if Kodak had some OTC contracts for silver and the counterparty defaulted for whatever reason, all hell would break loose in the silver markets. Kodak is a very big silver user and they might suddenly be forced into the open market. It's fun to think about!
BeowulfPrices rise?#4962303/08/01; 16:06:33

I don't know what you think but to me it looks like they may be trying to push the price up at least to the level of the last auction. That way they don't look bad selling another 25T at a rediculously low price.

Anyway, that's just my opinion. Let me make another prediction on the next BOE auction. I predict all the gold that is up for auction will be sold and none will be left to sit in the vault and wait for the next auction. Anyone want to bet this won't happen?

-Beowulf

BeowulfNot everyone thinks gold is a barbarous relic#4962403/08/01; 16:46:34

http://www.zawya.com/Story.cfm?id=emi-2fdsf_gold&imgactive=0

Eid holiday helps send gold sales soaring

Thursday, March 08, 2001

A crowd of straw hats bobbing along...long queues outside the cash dispensing machine...and all that glitters is valuable as far as the eye can see. This is just one impression that greets the visitor at the Dubai Gold Souq.

The first week of the Dubai Shopping Festival has seen gold sales catapult. Businessmen trading in the noble metal are quite happy with the increased number of buyers gracing their shop floors. They attribute the rise to a number of factors including the long stretch of Eid Al Adha holidays, higher oil and low gold prices.

C.P. Renjith, general manager of marketing at Alukkas Jewellery, said that their seven outlets had recorded a 30 per cent increase in sales from the previous year for the same period. He said: "The Dubai Shopping Festival 2001 started off this year with a weekend, which was followed closely by Eid.

"This has been very good for business, especially when we compare it to the sales in the first week of the festival last year, including the Eid holidays. We have recorded a 30 to 35 per cent increase and expect this trend to continue until Friday.

"We have received a lot of shoppers from the UAE and Gulf Cooperation Council countries. The increased sales are due to the holidays, also the gold price is lower than last year. It is below Dh30 per gram.

"There also appears to be greater liquidity in the market due to the international rise in oil prices and stronger economies so people have more
disposable income at hand."

He predicts the market will lull after the weekend until March 15, especially as schools have exams. So families and particularly people from the sub-continent, who buy a lot of gold, will not venture out for shopping until the exams are over.

Renjith said: "Then the market will pick up again. Around this period we will also see a lot more tourists, especially from European countries." But this rise seems to be restricted to the 22 carat gold market. The 18 and lower carat jewellery still haven't caught on.

Glennen D'Souza, Sales Coordinator at Shattaf Jewellers, said: "The 22 carat market is doing well, but the buyers for 18 carat is lower. "We expect the demand to increase as more Western visitors come in, especially from Europe. They tend to buy more 18 carat jewellery. The market should pick up
more after Saturday."

Virendra Soni, Director of National Jewellery, agrees to this market analysis. He said: "During the Eid Al Adha holidays we mostly had Asian and GCC Nationals coming in to shop. Now more Western tourists will come in.

"This year we have experienced a good increase in sales for the first quarter of this month, I would personally bill it around 25 per cent."

While the businessmen count their dirhams and look forward to more tourists coming into the emirate, the visitors who are already in the country seem
to be having an interesting time.

Fred Lerner from Ontario, Canada, transiting via Dubai while on a cruise to South Africa, said that he was enjoying his short stay. "I'm overwhelmed by it, especially all the gold in the Dubai Souk," he said. His wife, Margaret, said that bargaining was proving to be quite an obstacle for her at the souq. "I'm not used to it at all," she said.

Louise and Geoffrey Bates from London are visiting Dubai after 12 years and are witnessing the shopping festival for the first time. Geoffrey said: "It's incredible how the city has changed. The infrastructure, highrise buildings, festivals and everything else, the development is just amazing.

"Even the Gold Souq, the structure is the same but everything else has undergone a sea change. It's great being back."

@ Gulf News 2001

R PowellBOE Auction#4962503/08/01; 16:49:48

The last auction was oversubscribed by 4.8 times meaning there were bids for 120 tonnes and the bids were filled starting at the highest bidder and then down until the alloted 25 tonnes were gone. Randy has explained, if I understood right, that all bidders who were lucky enough to get gold paid the lowest accepted price. Please correct me if this is not correct as I still think it's an insane way to sell anything.
I'm thinking now that the amount of gold bid for in the next coming auction will shed a lot of light on the much talked about current shortage of physical gold. Lease rates seem to indicate a serious shortage. Rumors indicate the same but rumors are not a reliable source of information. The next auction will confirm whether there is a shortage and how bad it is. The next auction will be oversubscribed by ?? times.
If the auction's origin was to promote the impression of central banks selling at low prices then a large oversubscription number triggering POG upward might be poetic justice. Next week is it?
Rich

Cavan ManHello Pandagold!#4962603/08/01; 16:54:05

You make a profound point; China did save Asia because she did NOT devalue the Yuan. Right on the mark! China will lead Asia the next 100 years or better. Catch a rising star.
BeowulfOops sorry Pandagold#4962703/08/01; 17:32:20

I hadn't read far enough to see that you had already posted that story. I guess I shouldn't be trying to read posts on five sites at the same time again.
TheStrangerR Powell#4962803/08/01; 18:01:11

Your understanding of the BOE auction process is correct. This type of auction is called a "dutch auction" because it is precisely how the flower markets in Holland wholesale tulips. They have happily done it this way since the 17th Century. When you think about it, it is a very reasonable way to conduct a PUBLIC auction, though I agree it is missapplied in case of the BOE.
TheStrangerMake that "in THE case of the BOE"#4962903/08/01; 18:02:56

Thanks.
lamprey_65Good Evening!#4963003/08/01; 18:24:23

The following is a repost from next door -

Lamprey (Important, Bullish Day)

Hello, Everyone. Just got in and checked the golds...very bullish. We managed the following today:

1. Broke above the falling wedge in POG (breakout above resistance ) on the day before option expiration. Need to see at least one week of confirmation, but as of today looks very good.
2. Gold stocks smoked today. NEM - very bullish. This is my "tell". HM broke above $6 on volume...this is important as the $6 level was the target set by Morgan Stanley in late November analyst recommendation which first tipped me off that the worm was beginning to turn.
3. XAU broke above the 55 resistance. PD was up big today, so this needs more work for me.

All in all -- I THINK we are on our way to a new bull market in gold. I would like to see at least one week of confirmation, but things look good. The time of year is right (March...just as in the '93 move), the technicals are right, and, of course, the fundamentals are right - both in gold supply and demand and in excess money creation.

It looks to be time to start reaping the fruits of our labors.

I'll save the congradulations until after we confirm - nevertheless...

Enjoy It!

Tree in the ForestR Powell, Lamprey_65#4963103/08/01; 18:55:56

Hi guys. Unfortunately Don Lindley is saying that this is a setup and gold will drop back shortly. Another failed breakout from the falling wedge. So what is that 2 failed BOs in a little over a week? Until they're ready to let this puppy run they'll keep it on a tight leash. BOE auction is next Wednesday the 14th and has helped put a damper on things in the past. I am now hearing more rumors of silver shortages. Another month or two, I think, so we'll just have to be patient. Looks like everything is being arranged to come together at once. Strong hands never gamble. They always bet on a sure thing. Japan looking bad. War looming. PM shortages. Wasn't it Hannibal Smith (played by George Peppard) who use to say, "I love it when a plan comes together."
Sierra MadreWith apologies to Omar...#4963203/08/01; 19:01:28

"I often wonder what Kosares buys,
One half so precious as the goods he sells."

Sierra

USAGOLDSierra, your answer. . . . .#4963303/08/01; 19:14:56

With apologies to Omar...

"I often wonder what Kosares buys,
One half so precious as the goods he sells."

Sierra

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

Gold.
Until every ounce from those
who don't want it
Finds refuge with those who do,
And a sliver of each
sticks to the fingers of he
who passed it.

Loved it, Sierra.
Glad you asked. Regards to Omar, and no apology. (Smile)

P.S. Happened to be here when you posted.

MK

R PowellWork we must, pay we earn#4963403/08/01; 19:54:59

Michael, it seems fair that you are compensated for your services as are the rest of us in the working class. I pour and finish concrete (flatwork, mostly floors) and often refer to concrete as "gray gold".
I've heard that bartenders in the gold rush days were often hired on the basis of how big their first finger and thumb were because miners would open their pouch of dust and pay by the "pinch" for their booze.
To all: If you must labor, I wish that you endeavor at something you enjoy doing. I also wish gold would decide that tomorrow is the day! (options expiring) Tomorrow after expiration and if POG falls tomorrow, all who hold physical can point at me and say Na-na, nabo-bo.
Don't worry, I have more.
Rich

Cavan ManTree in the Forest#4963503/08/01; 20:04:29

I believe the WA is beginning to show its teeth. Soon now...
R PowellMr. Tree#4963603/08/01; 20:07:34

Thanks for the technical analysis report. T.A. is not my strong suit but i've read that the third try at resistance or support is more likely than the first two with the fourth as almost a sure thing. It seems the technical guys can rationalize almost any move with all the contingencies in their forecasts. Also the dimensions of the charts can be changed to show almost any shape or configuration desired. However, many swear by it and have the records to back it up. The post from G-E that Lamprey_65 posted for us is from a technical trader whose been calling his shots and he's been right on target recently. Great record and making money! If I could trade like that, Michael would have more dust on his fingers.
Rich

HoratioReverse splits#4963703/08/01; 20:10:53

Japan is planning a reverse split in the currency 1 for 100
,the problem with reverse splits is when there are no earnings the PRICE falls back to where it was.Japanese could lose a large % of the currency value = bankruptsy of the currency.Instead of letting some banks go under for making irrsponsible loans they choose to let the currency go under instead!Politicians figure they won't figure out what what happined.MASSIVE devaluation.Buy GOLD JAPAN before it goes down !!!Don't trust politicians.
I have never seen a reverse split work to the benefit of stockholders or in this case savers.Your going to get screwed ,act fast.

silvercollectorMr. Miner46#4963803/08/01; 20:11:14

If you wonder this way please send oil/gold theories.

TIA.

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

Fingerprint42Treasure of the Sierra Madres#4963903/08/01; 20:13:23

http://www.321gold.com/minera.html Here's an interesting proposal for a ground floor chance to get into a gold mine before it gets pumped up. Everything said seems to make sense to me. There are a lot of good properties going begging and equipment is cheap. I've always thought miners would do far better if they would actually get to the mining rather than spending millions on drilling.

I'd love hear any comments anyone has to make about the deal. I'm inclined to go for it.

Cavan ManPOG Relativity#4964003/08/01; 20:20:06

Aussie$ price:520 something
US$ price: 268 something

1. What is a dollar, Aussie or otherwise?
2. Gold sold in Australia is better/worse than US gold?
3. Gold is gold right?
4. US Dollar is better than gold? (or good as????)
Spock says: "Captain, this is not logical".

R PowellThe Stranger#4964103/08/01; 20:20:39

Thanks for confirming my understanding of the auction. I know you are a buyer and seller of equities. Do you deal with mining stocks and if so, does this recent run up in the XAU and HUI indexes look like the real thing or are games being played with those silly mining stock dreamers again?? Thanks for any insights. Also do the stocks lead the POG or the other way or is there no corollation?
Thanks
Rich

HoratioChina vs Japan#4964203/08/01; 20:25:46

China is replacing Japan as U.S tradeing partner very rapidly,just look at the trade deficit with China,its now bigger than trade deficit with Japan.Its clear what Japans problem is ,the U.S. is buying elsewhere.Japan must do massive devaluation to compete,all they got to sell is labor or value added,they have no raw material to sell.Japanese people must buy GOLD immediately before they lose thier external assets.
Gandalf the WhiteFingerprint42 (03/08/01; 20:13:23MT - usagold.com msg#: 49639)#4964303/08/01; 20:26:00

Please tell us that you are not a paid shill !
<;-)

megatronknallgold#4964403/08/01; 20:33:42

You have a friend :) 100% true. The people of europe are no more or less intelligent or succeptible to the lure of the 'unearned'. The only difference will be a temporary harbour(euro) until it's eventual collapse. Please relate more technical info about the swiss franc if possible.
ORORandy - One of a few#4964503/08/01; 20:36:47

The development of free banking (gold and silver) to government controlled and regulated gold standard to fiat money was not inevitable, was no more natural than Hitler's rise to power, and served humanity no better than he did. It was plainly the result of people allowing bandits to ascend to power once their intellectual advisors were bought up by the bandit's backers and had betrayed them. One thing many of these potential backers and intellectuals now know, which they did not know then, is that they will not retain control of the system they will set up. They realized that they are more likely to be its victims than they are to be its beneficiaries. Today, they are more likely to oppose government power than to support it, despite the clear advantages they obtain over competitors through their networks of influence peddlers in political and bureaucratic circles. Many now understand that the same kind of advantage is sought and obtained by suppliers and customers, so that they end up with a future much reduced in scale, and not much better in security or stability.

It should be pointed out that the Fed was not vetoed by Wilson though part of his platform in the election was the promise to do exactly that, as was his promise to keep America out of a war in Europe. Americans, when they had to opportunity to vote against fiat money, were quick to do just that.


Furthermore, though people, when gathered in emotional crowds, do have the inclination to go off on wild rampages and flights of fancy. They are always happy to see that these were ignored by their representatives in government. Given an opportunity to entertain the arguments to dis-empowering government, most eventually fall in line, either because experiencing the results on their own skin, or by thought and conviction.

The interest of Joe Average is recognized by himself as being against government power and its beneficiaries. Most all have had to deal with official's practice of patronage. It may be the water inspector, maybe a highway patrol man. Most often, the meeting goes with no special incident because Joe Average is unwilling to "get in trouble" by challenging the official. He recognizes the power of the official over him and resents it from the greatest depths of his soul. He resents the power of someone else to tell him what to do without paying for the damned privilege.


It is easy to demonstrate the fallacy of the state to one who listens simply to the argument. It is difficult to convey this to someone who has read dozens or hundreds of texts that claim how good the state is, or those that claim the Mzrxist "historic inevitability" of it, etc.. But this is it: simply another case of bandits who not being better armed than you were had paid off your leader to open the gate when you were asleep, took your stuff, and sold you into servitude.

ORORandy - One about banking expansion#4964603/08/01; 20:39:43

The fact that bankers have managed to obtain government favor is not an argument for the perpetuation of that privilege. It is an argument for the explicit elimination of the government's power to provide privileged charter and license. As Journeyman pointed out, government made the need for charter mandatory for engaging in banking. As a result of this limit on the number of banking establishments, it had made it possible for them to join forces to create an effective cartel. Since, all things being equal, the profitability of a bank is maximized at high leverage to reserves, the cartel had motive to cooperate on maximizing the leverage.

Mises demonstrated that competing banks must hold a larger reserve and thus lesser leverage than a monopoly of a single bank, or a system where a lender of last resort or regulator has the effect of coordinating the entire banking system to behave as a single bank. In the condition of competing banks the determinant of a bank's solvency is not only the bank's passable performance, in that its net capital (assets less liabilities) is above 0, but its relative performance to the other banks. Under competitive conditions, the bank that is leveraged most to its reserves is the bank that goes under. Why? Because by its leverage, it creates first a large amount of liabilities against its reserves, which would be withdrawn by competing banks upon expenditure of a loan by the bank's borrowing customer. For example:

Take a market with three banks of equal assets A, and liabilities, L for each, with A=1.1 L (10% capital adequacy ratio), but differing reserves:
Bank A has 50% reserves to liabilities (0.50 L)
Bank B has 30% reserves (0.30 L)
Bank C has 10% (0.10 L)
A borrower comes to bank C and borrows 0.06 L (adding only 6% to liabilities and 5.4% to assets of bank C). The borrower spends his borrowed funds to purchase goods and services in equal proportion with depositors in each bank. Each bank gets 0.02 L and settles the claims on behalf of customers at the end of the day. Each of the other banks puts the 0.02 claims to bank C and takes in the reserves – A now has 1.02 L in liabilities, 1.12 L in assets, and 0.52 L in reserves; B has 1.02 L in liabilities, 1.12 in assets and 0.32 L in reserves. C, however, has 1.12 L in assets, 1.02 L in liabilities, and 0.06 L in reserves, having transferred 0.02 L in settlement of claims to each of the other banks. While Banks A and B have increased their reserve ratios, bank C has reduced it from the already meager 10% to just under 6%. The 0.06 L in assets gained as the loan to the borrower was offset by a loss of 0.04 L in reserves.

Bank C may find itself insolvent (distressed) if it repeats this only 2 more times, whereupon its rivals would buy up Bank C's assets and take on its liabilities at the substantial discounts one would expect of a distressed sale. Depositors to bank C would see a portion of their deposits gone, and the more conservative banks would pick up bank C's old assets and depositing customers.

Obviously, it is harsh for banks to compete on the matter of reserve adequacy (financial strength of the bank), and given a chance, they would cooperate to raise every one's profitability by having a fixed reserve ratio for all banks, at the lowest level practicable. But a new bank can enter the fray, composed of say 10% of the existing depositor's claims (having been dissatisfied by the cartel bank's service and risk have rallied around a financier proposing a new bank formed with their capital), having made no loans and having 100% reserves, will now proceed to take on depository clients from the existing banks that have leveraged to 10% reserves claiming that the new institution is more sound than the cartel members. Having taken 10% of depositor claims from the existing banks that had only 10% reserves, the leaving customers would drain completely the cartel's reserves, taking all of their deposits out. The new bank depositors had formed can push the cartel banks into insolvency by gaining just one more significant customer from each of them.

Had there been the legally imposed need for a charter, the financier and his potential depositors would have had to apply for one. The regulator receiving the application, and his staff, having no motivation to do the work of investigating the financier, and having had prior contact with the existing cartel members, would most probably have sided with whatever side, existing banks or the existing depositors trying to open their own bank, that offered him the best paying future job. Without this element, regulators would naturally side with the people with whom they had done business with before, the existing banks. The new bank would get the dragging heels treatment, and would be forced to lobby legislators or the regulators themselves to obtain approval. The cartel banks, however, would be most motivated to prevent their clients from having their way, since that would mean the end of their cartel, and the loss of their positions of power, derived from the privileges of charter.



To make things clear, it is the restriction on the number of banks that is inherent in government requirement for having charters and licenses that makes possible an effective cartel, and allows the cartel to expand credit to the point of hitting the people's cash preference ratio (how much money they want to have in cash, as opposed to deposit), or hitting the point of maximum leverage where credit expansion had caused such malinvestment that cash flows of debtors can no longer provide for debt service. In this case, a massive deflationary economic disaster follows the banks reaching that point. If there is a lender of last resort, the banks can continue expansion to the point of committing all the resources available to the lender of last resort. In a fiat system, the lender of last resort can interject at this point to enter any injection of funds into the system.

Thus we have two major elements having importance:
1. In a competitive system, banks restrict themselves from over-expansion, due to the competitive edge available to the more conservative bank – the one with the least leverage still able to offer a competitive return.
2. The least bit of government intervention, by regulation (dictating minimum reserve ratios, capital ratios, accounting standards), licensing or charter, etc. immediately lowers the competitive pressures the natural dynamics of banking impose. Just the imposition of the time delay in giving a new bank its charter is enough to lower the incentive for bankers to compete on financial strength.

History has shown that the American bank system managed to lower its average reserves to 21% reserves (in 1913) only after having national charters and regulations limited competition and eliminated the motive to conserve reserves. Prior to that time, American banks had never managed to go below 25%, and had experienced a culling at that level – where 2-7% of banks would fall by the way side during a 2-3 year "recession", and expansion did not resume till reserves grew back to 40% on average. Only when the Fed was formed did banks really manage to obtain enough rope to collectively hang themselves and the rest of the economy. The Fed provided a source of non-market lending, undercutting natural market interest rates, to bring the reserve ratio down to some 3% (2.6% or 3.7% depending on what is considered a bank liability).

It was neither the depositors nor the majority of banks that could benefit from that system. It was only a small number of banks at commercial clearing centers such as NY that could enjoy the benefits of the Fed's lending at artificial low rates. Indeed, the Fed was staffed by their employees, who were obliged more by their loyalty to their former banks than to depositors and the bulk of banking. Thus reserve requirements were lowered progressively by the Fed in order to allow the banks further expansion of lending, and thus profit.

What I am trying to convey to Randy and his readers in this is that the free banking system runs without substantial expansion, and conducts a single (once over) dilution of gold with fiduciary substitutes over a period of some hundred years, whereupon it stabilizes and changes according to the actual needs of people for physical and paper money. Furthermore, during the expansion, the thing that free banking displaces in small part is freshly mined gold. The interest and principal repayment demand for the leveraged portion of bank gold accounts stands as a near perfect replacement for the extra fiduciary gold supply provided by fresh lending. As a result, there is nary an effect of this expansion on the purchasing power of gold over time.

There is nothing unnatural in people restricting the powers of government. People tend to do this when it is within their power and its significance has found a place in their consciousness. Once the power of government to restrict banks and then issue charters and other privileges freeing them from the restriction is eliminated, it stands to reason that having no power to regulate or make decisions for others, government officials would not be able to sell privilege or otherwise prevent the natural dynamic of banking. There is nothing unnatural or unrealistic about this. And it is a position from which my ideological leanings are derived, not the ideology that derives the position.

Randy, this free banking structure has all the advantages of trade in electronic currency, but not the disadvantages of moral hazard and boom-bust that are inherent to government involvement in banking, nor the devastating effects of hyperinflation.

ORORandy - One on the analysis driving the ideology#4964703/08/01; 20:46:27

Contrary to your reading of my view of government as ideologically driven, I suggest you listen to the arguments I am putting against its involvements in making decisions for other people and in allowing various groups to make decisions for others. The reason for my ideological view is the analysis. It is not the other way round.

Most basic to the analysis I presented many times is that of motivations and decision making processes. The economic difference between cooperative trade done out of voluntary choice and transactions done under threat or actuality of violence is in the results of each set of transactions in the realm of the availability of goods and services through the effects of motivations. That which differentiates between the effects of cooperation and coercion in economic affairs is the inherent decline of welfare as a result of coercion, and its obvious growth out of cooperative trade. Coercion eliminates motivations for productive endeavor, and cooperation increases it.

This provides two views of government as the supreme coercive power within any geography, which is its only functional definition. Should government be concerned only with the prevention (through punishment after the fact) of coercion among people, or should it actively coerce people in order to achieve some goals, increase a welfare outcome, serve some principle other than the minimization of the occurrences of the initiation of violence (including its own)?

Since people run governments, the effect of having coercive force in hand will be the determinant of motivations of those within government. They will use their power to their own benefit through either direct use, or the sale of uses of this power to those outside government (time honored "bakshish").
Statutory Law, functions within government simply as the rules necessary to prevent it from fighting within itself thus destroying the bulk of its members, and functions in relation to the governed as the rules for treatment of them by a government that produces the best outcome for government's members that they can conceive of and agree upon. This is also limited by the extent of the effectiveness of available technology of coercive force, through control of information and opinion, and the degree of resistance of the governed, as well as their technological capacities in fighting back, circumventing government information and opinion control, and their efficiency in hiding income and assets from government. In democratic systems, resistance comes earlier than it does in non-democratic ones, but is reduced in intensity by the ability to partially resist government along the way, and at times reduce its powers. In non-democratic systems, government power expands till either enough of the economy has been destroyed so as to make the marginal benefit to the participants in government too small to retain their loyalty, in which case the governing organization simply collapses; or the expansion of power is halted by the emergence of a technology that extends the power of individuals to resist government.

The other set of law, Common Law, is a natural development of people's need for arbitration in honest dispute, and obtain reparation in the event of having been harmed by violence of another. In a marginal way, it provides punishment for crime, so far as the participants of the process are willing to act on the decisions made in the course of its practice to eliminate the criminal from their midst.

It is the distinguishing mark of continental Europe that it has destroyed the common law once thriving there, vs. the English system which had incorporated its principles into statute, or the American system, that has attempted to constrain statute within the limits of common law.

The history of politics is that of the effectiveness of coercion and the limits to it. The original kings (governments) are the raiders of small villages who came to a deal with the people they had previously run roughshod over around harvest time, to protect them from other bandits and in return have the villagers pay a tribute to "their" bandits, a tax. Often, the common law practices were enforced by this same group of bandits (by then called nobility) because this common law practice required the use of violence by the local community (once convinced of such a need by the arguments of the court in its decision), which violent practice posed a threat to the banditry/nobility.

The nature of people practicing coercion dictates that it is done for benefit of the active practitioners.

If you have noticed, I do not use the common "noble knights" round table allegory because of the awareness of what a knight was historically, and the fact that nobility is historically a derogatory term for anyone who values freedom and justice. The use of this allegory for this bulletin board still grates harshly on my sensibilities even after these years of posting here.

ORORandy, Glearis - three points and making an example#4964803/08/01; 20:48:21

To return to basics of government, a few points, one with an apropos example.
1. Government decision, outside of the application of common law (protection of life, liberty, and property of individuals and their mutual organizations), is a substitution of few decisions for many, and removal of the consequence from the decision maker. Because it is such, it removes the motivation of individuals and their associations to learn how to obtain the maximum benefit out of their decisions (usually by paying for the advice of a specialist in that area, or learning the principles of the field themselves) in the field in which government had made decisions. What is left is only the question of whether one follow government dictates or not. Government decision making is by nature destructive of learning. The consequences of decisions may reach the government functionary making them in a round about way through electoral and public expressions, but would only have a substantial effect on them in extreme cases, or when a sufficient accumulation of such decisions has prompted people to revolt against them or ignore them.
2. Government, as a structure of people (i.e. concerned with their own welfare by their nature), but having coercive powers, will "corrupt" the holders of positions of power because of the benefits to them of selling their decisions, on the one hand, and of coercing others to benefit them and their group directly on the other. It has to be that way by the nature of the beast.
3. People at large do not benefit from government, not even the supposed beneficiaries, such as Glearis thinks his child to be. Government (as an organization of people) uses such cases as Public Relations fodder to claim a moral character to their actions and thus lower resistance among people at large to their being taxed. What is not said, is that in order to provide a child such as Glearis’ with this benefit, it has done and caused the following:
a. It took the resources (funds) from someone else, thus lowering their purchasing power and their ability to take care of their own children.
b. Therefore, it had reduced purchasing power that could have been used to buy the services of Glearis and his well wishers, and has reduced their income in this way.
c. They have occupied people in the function of determining and extracting the tax, and have occupied people in determining whether to help Glearis’ child and how. All of these people did not help Glearis’ child at all.
d. Since the government functionaries produced nothing in their venture to have someone provide Glearis’ child with assistance, Glearis and all of us have lost these people's productive output, thus we have had to pay more for the same goods and services. The value of these people to Glearis was negative.
e. The same process of collecting and distributing funds to pay the providers of care to Glearis’ child, the government has taken income away from the care givers and from Glearis in order for government to bee seen as serving other deserving people such as Glearis. This has raised the cost of the service Glearis’ child received and decreased further the income of Glearis and his charitable well wishers.
f. By government "taking care" of the problem, the motive for Glearis and his charitable friends and strangers to help has been eliminated, as was much of the pool of resources available to them with which to do so.
g. By making the decisions as to what treatments and research to fund regarding the problem facing Glearis’ child, government has eliminated the motive for Glearis and people facing similar problems to make judgments as to where to allocate resources. Furthermore, the experts that government had used in order to make these decisions have become too expensive for Glearis to afford, and have been occupied in explaining to government officials the hows and whys of their area of expertise.
h. The government decision makers, having no direct interest in the actual practical outcome to Glearis’ child and those to follow, will have little motive to make the most effective decisions as to where to allocate funds for research, and to evaluate treatments other than those currently practiced (this constitutes effort).

Glearis, your child and others to follow will have suffered a lower level of service, less effective treatment, and have lesser prospects for cure or prevention because of the involvement of government in the business of "care". Furthermore, Government had eliminated resources from Glearis and everybody else, that could have been used in these efforts, and has raised the costs of Glearis living. Government has made the child's problem into a threat to everybody's well being, instead of a cause for strangers to join together in charity.

To repeat what I have stated before, every 1 unit of benefit derived from government costs 4-5 units (the 1 provided and the 4 destroyed by the process) to the whole of the people. Could Glearis and his well wishers afforded this care for the child if government were not providing for it and similar services? If one understands the reality of it, one sees that had Glearis’ child been provided for by Glearis and well wishers, and the same done for all government services, then Glearis income would most probably have been up 2.5 fold in purchasing power, as would have been that of his well wishers.

R PowellMegatron#4964903/08/01; 20:54:57

I believe there is an article in this month's issue of "Technical Analysis of Stocks and Commodities" on the Swiss franc that you're interested in. I haven't seen it yet myself and no longer get the magazine so I'll have to find one. I'm curious as to the author's identity and credentials as he's a well known goldbug and technical trader whose been "hot" lately. He's let us know that he's been calling them right but he's also callin'em before they happen which is the name of the game.
Rich

Fingerprint42Gandalf the White, Not a paid shill but I wish I was#4965003/08/01; 20:56:15

http://www.321gold.com/minera.html

Gandalf:

My wife and I own about 20 different small golds. From Drooy to RIC to GLDR and more. I have a piece of a claim in Alaska and have spent the last two summers working the claim. You have to pay too much for everything, are lucky to work 100 days a year and have to beat off the mossies with a stick. It grates me that most of the small gold stocks sit on good ground, drill like madmen but the only time you can every make money is those rare occasions gold goes up or someone buys them out. Why not take the same money and dump it into mining equipment and people and start mining?

Look up US Gold USGL I don't mean to pick on them but they are not untypical. They management sits in an office collecting fat paychecks while someone else drills and drills and drills. If by chance gold ever goes up, maybe we can make our money back. Why don't gold miners actually mine some gold? I looked over the proposal from Tim Watt and it makes sense. There is lots of good ground available. It's quite possible to make money with $260 gold if you will actually mine rather than pray. You can get an operation to the paying stage for $500,000 if you will actually mine rather than drill.

All of his numbers work. You can mine for $10-$20 a ton and can mill for $25. If he can be producing 200 tons of .6 ounce ore a day in 120 days, he and all the rest of the owners of the place are going to make money. Lots of money. If gold actually goes up, they make more.

If you see a flaw to the deal, let me know. And I wish I was paid but I'm not.

megatronORO/Tree in tha forest#4965103/08/01; 21:00:24

Speaking of socialist losers, I'd be curious to see a daily/monthly chart of Canadian gold sales back to 80 or so.
My poor grandmother worked for 60 years so these morons could unload the wealth of the nation for a short term backroom bailout of the 'Commyex'.

ORO, I'm hearin ya, brother!

megatronRpowell#4965203/08/01; 21:08:50

I agree with most people here that tech analysis is mostly crap, BUT! BUT! There are some amazing trendlines that can be particularily amusing to watch. The most solid is the S+P 500 which goes back to 82. This trendline has NOT been broken and every time it has been approached it has bounced off like 'magic' It presently sits at 1226. I believe if this trendline is broken it will be the first evidence of the collapse of the US$

Thanks for the info. Will buy tommorow. Check out PFN on the CDNX. Incredible drill results on thier Palladium claims. Do your DD. :)

JourneymanGreenspan's take on government & banking @Randy, ORO, ALL#4965303/08/01; 22:00:27

Don't have time to look up the exact quote, but Greenspan testified to congress a year or so ago that if it weren't for the FSLIC and other such government depositor insurance schemes, there would be no good reason for government to be involved in banking regulation at all.

Regards,
Journeyman

turkey hunterThe Gold Vault of the Federal Reserve in NY#4965403/08/01; 22:30:42

http://woodrow.mpls.frb.fed.us/pubs/region/reg9112b.html

Interesting article describing the Gold Vault at New York. The article was written in 1991.
Randy (@ The Tower)The Piper says pay me now, or pay me later, but you've GOT to pay the money...#4965503/08/01; 22:47:29

http://www.usagold.com/gildedopinion/privateer.html

And, my, what a BIG piper to pay!

For those of you who have yet to meet this long time friend of gold and private enterprise, our lasted addition to The Gilded Opinion is the perfect introduction to the Captain of The Privateer himself, William (Bill) Buckler.

In his well-crafted Global Report commentary entitled, "Trapped Between Debt and Taxes", Bill explains how Amercians have become caught in an economic trap with (on a per capita average) at least 33.8% percent of their income swallowed by a bloated government, while another 34.1% of incomes must go to service their private debts. Click the link above to see Bill's full commentary wherein he elaborates on these following excerpts....

"The American political Establishment has always had in front of themselves a fundamental choice. They could have made laws that kept taxes low and allowed real monetary savings to be accumulated and then funnelled into real, productive, private investments. Or they could have kept taxes high to expand the size of the State, and then "compensated" for the tax burden by making borrowing very easy indeed. The U.S. political Establishment chose the second course. Artificially low interest rates inescapably lead to increased borrowing. But borrowing is the other side of debt, so debts have climbed higher.
+
...the American public was offered the easiest borrowing requirements possible - the Fed Funds rate fell from 8.25% in 1990 to 3.0% in 1992.

jiGovernment, banking and fiat money @ Journeyman, Randy, ORO, All#4965603/08/01; 22:50:03

.If you write to the Secretary of the Treasury and ask where money comes from you will get an answer similar to this: " The actual creation of money always involves the extension of credit by private commercial banks."

If you write back and ask where the money comes from to pay the interest, you will receive an answer like this: " It comes from the same place other money comes from."

Under fractional reserve banking, banks lend money that did not exist until they loaned it. Banks create money by monetizing debt-the debts of government, business, and the people. Banks create money out of less than nothing because a debt is a sum of money due. It is not possible to pay a debt with a debt, but this is what the world is using as money!

The absurdity of the situation is that if there were no debts, there would be no money, since all paper currency and checkbook money is loaned into circulation. In order to pay the interest, there must be another loan because the banking system only creates the principle and not the interest. In fact, the interest can never be paid because it is not possible to return to the bank more Federal Reserve Note's than were created-making it inevitable that the FED acquire title to all wealth in the nation.

Paper money that redeems nothing only appears to have value because it can be exchanged for things of value. When a piece of paper representing debt is exchanged for wealth, someone has been robbed. Fiat money expropriates wealth from one person, then another, until the last person who gets it will be stuck with it. What the first user gets for nothing the last user will get nothing for.

The sole function of paper money that is not one hundred percent redeemable in gold or silver coin is to get things without paying for them. Those who issue and control bank credit as money get everything for nothing. Bank credit is a devise for confiscating wealth, where numbers of nothing are exchanged for things of substance and value. This theft occurs unnoticed because we accept pieces of paper with numbers on them in place of real money, not knowing the difference between the two.

When using wealth as a medium of exchange, government must receive wealth from its citizens to pay for goods and services. When using credit, government is independent of taxes and does not have to pay for anything, which the illusion of taxes conceals from the people.

Though nothing is financed by taxes, consumption, the people's capacity to use up goods and services is reduced. Subtracting credits from bank accounts reduces consumption and eliminates previously created inflation. Taxes regulate inflation.

The FED pumps money into the system and the IRS sucks it out. The tax system reduces public allotment of credit in order to destroy some of the bank created credit so that the bankers, and their government, can continue to create more credit, and with this credit get unlimited goods and services for nothing.

SHIFTYji#4965703/08/01; 23:26:12

http://203.79.82.35/nzbanking/mmm2.html

MODERN MONEY MECHANICS
A Workbook on Bank Reserves and Deposit Expansion
Federal Reserve Bank of Chicago

Hello ji. Have you seen this publication from the Federal Reserve Bank of Chicago ?
Enjoy

$hifty

PerplexedSELF GOVERNMENT#4965803/08/01; 23:31:51

The human race can learn a lot from the hive and the honey bee!

The occupation of every bee is determined by the need of the colony at the time.

The hive tolerates no loafer.

The droans have one purpose, to mate with the queen, once this occurs only a token number are tolerated just in case the queen dies.

The queen does not rule the collective, but contrarily, because she loses her wings after her maiden flight, is captive, and is never left alone, she is constantly touched by several members of the grooming squad.

Each bee can defend the hive only one time, and yet is ready and willing to give her all at anytime.

The bank (honey store)needs no guards nor banker as it is not guarded against danger from within, but is guarded to the death against theft from without.

Every bee except the queen can leave the collective at any time they choose and never return. (because they are not welcome in any other hive, the individual defector rate understandably is very low,

When the hive becomes over crowed in which case the hatch another queen which leads a swarm.

Of course, in the hundreds of thousands of years of their existance, they have managed to accomplish nothing but survival.

There must be a message there somewhere.

Still Perplexed

Mr GreshamTrail headed upward!#4965903/08/01; 23:44:24

http://www.kitco.com/charts/livegold.html

Looks like it might be getting steeper, probably too steep for many people. Good thing we've been taking these practice hikes to get in shape...
Sierra MadreHoratio...about Japan's (rumored?) decision to knock two zeros off Yen#4966003/09/01; 00:01:58

Horatio, the move to knock two zeros off the Yen would have absolutely no economic effect.

A similar move was made by Mexico in 1992(?)when the government decided to knock THREE zeros off the peso. So when we were at about $3000 pesos to $1 U.S., we went overnight to $3 ("new")pesos to $1 U.S. It made the peso look better, that's all. (We are now down to about $9.70 "new" pesos to $1 U.S., actually $9,700 old pesos to the Dollar.)

All prices simply dropped three zeros, everything went smoothly.

Dropping two zeros off the Yen would make calculations simpler, as moving the "new" Yen closer to the Dollar in value. Believe me, this affects nothing.

As an amusing aside, about the same time, the issuer of our paper money, the Bank of Mexico, decided to stop printing
"Will pay to the bearer on demand" on its paper money. This legend was printed long after any practical use for it, as a custom; so now our paper money just says "Bank of Mexico".

Now that I am posting, I'll take the opportunity to mention, what I have perhaps already mentioned, that the new "golden" Dollar, actually brass or whatever -
the "Sacawagea" - is prelude:

Eventually, you won't find Dollar bills. I'll bet that the Fed will suspend printing of the Dollar Bill - too expensive to print such massive amount of notes. Easier and cheaper to mint a garbage coin that will last longer.

But that's just the beginning of a process. Later on, at the rate M1, M2 and M3 are growing (see chart at www.goldensextant.com) you will find $5 Dollar coins, then $10 Dollar coins, $20, $50, etc etc.

Making the Dollar coin bright and shiny was a ploy to get the populace to accept it.

Sierra

Mr GreshamOro#496613/9/2001; 0:18:55

Some fine and stimulating late night reads from you, as I needed a wakeup before getting back to fending off IRS from my clients' wallets -- that is my job satisfaction, what little may be found in an insane paper chase.

Thanks to you, I cannot now think of government in general without picturing those castles in Europe and the robbers who "set up housekeeping" where they found controllable subjects.

As we here choose to occasionally cast ourselves in the sentimental role of a respectful, helpful, and gentle band of knights on our own Grail Quest, it is good to think of the other side of that Myth of Chivalry.

At least today, we can choose to embody whichever set of values our Conscience dictates, and to respond to the voice of Conscience when it speaks through another. Thank you.

PandagoldTurkey Hunter and all interested#4966203/09/01; 04:49:22

THE GOLD VAULT of the FR in NY


Watched a bit of an old movie yesterday,"Son of Paleface" Bob Hope; as I have a small TV at the side of my computer.

Yup, you've all seen it. Remember how, 'Son of Paleface', Bob, keeps the vultures at bay by leading them to believe his 'ole daddy' had left him lots of gold in that (empty) chest.

When he had seen it was empty he had put some loose change in it and broke up an old pocket watch so that the chest rattled.

How do we know how much gold is in the treasury vaults or Fort Knox? Who says it is there? Who checks it, (not just the top layer). If there is much there, who does it really belong to? How do you know? Does any really need to be there, just so long as people believe it is.

"It is not what is, but what people believe, that matters." (PG)

While you are thinking, I will offer the following quotes:

"I wonder if we would continue the noble lie that would itself carry conviction to our whole community" Plato, The Republik

" The circulation of confidence is better than the circulation of money"
J Madison (1751-1826)

And this little bit of trivia: The gold reserve of the US Treasury was saved in 1895 when Morgan and the Rothschilds loaned $65million worth of gold to the US Governement
(peanuts today, but this was 1895). As I said, I wonder who owns it today - whatever is there.

CanuckQuestion#4966303/09/01; 04:54:25

Can someone please explain this to me......TIA.

From g-e:

MIDAS Updates
(uponroof) Mar 08, 21:54

One thing for sure. The Treasury knows that GATA will be all over them until gold trades freely again. From Howe Discovery Team member, Michael Bolser:

Ms. Shirley Moore
US Treasury Department

Ms. Moore:

I have noticed that the Treasury Department has changed the designation of some inventoried gold at the US Mint in West Point, N.Y. from "Gold Bullion Reserve" to "Custodial Gold" as linked below:

The August 2000 Status Report on US Treasury Owned Gold showing designation of "Gold Bullion Reserve" at West Point , N.Y. http://207.87.26.43/gold/00-08.html

The September Status Report of the US Treasury Owned Gold showing a change in designation from "gold bullion reserve" to "custodial gold" at the U.S. Mint West Point, N.Y. http://207.87.26.43/gold/00-09.html

Could you please explain what this formal change in designation means with respect to the ownership status of the gold in question at West Point? Why has the ownership of 57, 067,331 Troy ounces of gold (Jan 31, 2001) undergone what clearly appears to be a change in ownership from the US to some other entity with the US now as "custodian"? If the apparent change is a real change who authorized it? And could you also formally define the following terms; Gold Bullion Reserve, PEF Gold and Gold Bullion.

Sincerely,

Michael Bolser

jiShifty, thanks for the link - check this one out#4966403/09/01; 05:07:14

http://www.nite.org/docs/ruml.htm

This article was first published in the January, 1946 issue of a periodical named 'American Affairs'.


TAXES FOR REVENUE ARE OBSOLETE
-by Beardsley Ruml, Chairman of the Federal Reserve Bank of New York.
Mr. Ruml read this paper before the American Bar Association during the last year of the war [World War II]. It attracted then less attention than it deserved and is even more timely now, with the tax structure undergoing change for peacetime. His thesis is that given (1) control of a central banking system and (2) an inconvertible currency, a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue. All taxation, therefore, should be regarded from the point of view of social and economic consequences. The paragraph that embodies this idea will be found italicized in the text. Mr. Ruml does not say precisely how in that case the government would pay its own bills. One may assume that it would either shave its expenses out of the proceeds of taxes levied for social and economic ends or print the money it needs. The point may be academic. The latter end of his paper is devoted to an argument against taxing corporation profits. --- Editor.

UsulJust the facts, please!#4966503/09/01; 05:34:11

Terms and designations are important to bureaucrats. These things are their bread-and-butter. It would be unusual if an official document was not drawn up without nit-picking attention to the formulation of terms and designations.

If you saw the movie "Dragnet" with Dan Aykroyd as Joe Friday (nephew of the original Detective Sgt. Joe Friday, and like his uncle, a blue-suited, by-the-rules cop) you may remember the significance of the "change in designation" of the virgin Connie Swail (played by Alexandra Paul) in the last scene. ;)

So... just what have they done to the people's gold?

turkey hunter@Pandagold#4966603/09/01; 06:28:52

Howdy. I never did quite see why a nation would want to keep their gold in another nation. Seems like to me they could use it against you if one didn't dance to their tune. The only way to get it back would be to use force. A small nation would be out of luck and gold.
HenriPerplexed Msg 49658#4966703/09/01; 06:39:19

Thanks for the hive allegory. I think there is a message there as well. Survival...get you some. :-)
PandagoldTurkey hunter#4966803/09/01; 07:24:30

All of my questions in that last post were rhetorical. My advice for what it is worth is - don't try to puzzle these things out. In mining parlance, there is no pay dirt in the answers.

It's ALL, and I mean ALL, a 'grande illusion'. I learned the lesson taught by Canute, which I have referred to many times - don't try and change that which you cannot. That is not defeatism, it is realism.

You could have spent the last two weeks worrying about the manipulation or gloom scenario, and you would have missed out on making money in the market.

Accept, and go with the flow. Respect the elements, get a feel for the tides, keep a look out for icebergs and know where YOU are going. Just remember "When a man does not know which harbour he is making for, no wind is the right wind" (Seneca)

Good sailing

WW OracleSee gold hop, see gold jump!#4966903/09/01; 07:35:06

Spreads increasing! Now $0.70, normally $0.50.
PandagoldA re post#4967003/09/01; 07:42:25

Yes, I posted this yesterday, but from one or two posts since, and because it looks like another one of those days,
I feel it is relavent to say it again. I know many do not have the time to look too far back; If it annoys anyone, I really do apologise (truly)

The tide is about to turn

I said 'about'. The tide does not go straight out. In fact when it's going out, for a while it can look as though it is still coming in.

You have to look closely. And, when you have local knowledge of the tides, because it is regulated by nature, and not man, you know it is going out.

The financial tides are not regulated by nature, so you have to have more care,and be more perceptive. But they do ebb and flow.

There will still be effort by the manipulators to lead you on, and confuse you. There will be lots of conflicting rhetoric and false signals that hold you back and keep you hesitating.

No one, except an elite few (the manipulators)can hope to buy at the bottom. So, if you buy now, you may see the market move a little against you, but don't despair. That has to be.

When the market does make its big move, I guarantee, it will catch most people napping and if you are out, you will rue the day. What is coming is a chance in a lifetime.

Remember, many things are coming together. One BIG event that is not being trumpeted by the media is that a date has now been set for the opening of the gold market in China - JUNE. Gold is purchased by nations moving into wealth. China gets wealthier by the day.

It was China that saved Asia from complete collapse when Soros did the dirty by not revaluing her currency. No the media did not trumpet that either. But the Asian people know it. It is China that will revitalise Asia, and Asia loves gold - pure gold.

Many Chinese entrepreneurs are investing in many gold projects, and businesses. The Chinese are shrewd businessmen
don't underestimate them.

I say again, when the gold market does make its big move it will catch most people napping'. These little flurries help to deceive the unwary, and create a rhythm like the swaying head of a snake before it strikes.

PandagoldA correction#4967103/09/01; 07:48:35

As most will realise, my reference to China and its currency should have said:- 'devalue' not revalue. as the latter is more associated with increase rather than mere change.
SHIFTYji#4967203/09/01; 08:17:38

Thanks for the link ji. I sent it to myself to read later.
Things are looking interesting again today!

Go GOLD
Go GATA

$hifty

Carl HCanuck#4967303/09/01; 08:47:53

Your post 49663 is very interesting!

I am no expert, but the designation change from "Gold Bullion Reserve" to "Custodial Gold" sure sounds like a change of ownership to me.

I thought that sales or leases of US gold reserves required an act of Congress. Does anyone know for certain?

In case anyone is interested, the 57MOz is about 1783 tons.

elevator guyWhat will happen next?#4967403/09/01; 08:54:04

I think they will allow gold to rise a little bit, to suck in long papaer players, because they must keep this game going.

After exchanging cash for paper, they will pull the rug again, and the POG will tumble.

This will not change unil the FED loses control of its beloved FRN to competition from the Euro.

But then, there is a always the possibility that TPTB will use the worlds greatest military technology to start or provoke a war, which then can be used to perpetuate the status quo. They would probably rather do this, then relinquish control of the worlds number one reserve cuurency.

Watch for it.

Knallgoldlease rates#4967503/09/01; 08:55:03

http://www.lbma.org.uk/2001gofo.htm

1 M 3 M 6 M 12 M

6.2775% 4.2300% 3.1300% 2.6913%

Stocks, Lies, and Ticker TapeCarl H#4967603/09/01; 09:00:30

If it really is a change in US gold reserves, perhaps they're not worried about being able to easily replace it, at a fiat price of their choice ($42/oz)? CONFISCATION.
Chris PowellStatus report on GATA/Howe lawsuit#4967703/09/01; 09:19:40

http://groups.yahoo.com/group/gata/message/705

Here's what's happening in the case in
U.S. District Court in Boston.

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.

Mr GreshamAll#4967803/09/01; 09:29:35

http://www.kitco.com/market/LFrate.html

Thanks Knallgold, I was looking at that too, and the NY rate seems to have dropped -- Kitco's error or what?

Is the gold there? The manipulation scheme seems to have gone on at a desperate pace these past 5 years, with (officially-backed?) shorts risking their solvency to effect it, as if it was very much needed to keep people from looking "behind the store window."

That manipulation would also be explained by having a profitable fiat currency on the brink, and your gold is your Plan B to stay in the post-fiat world trading race.

What a masterstroke to pull off a total facade of the Dollar these past decades, if there was no (or very little) gold in the vaults.

(Kind of explains the need to keep the mega-military around post-USSR? Us? No, we wouldn't....)

If OPG (other people's gold) was kept in US under some "agreement they couldn't refuse" all this time...

That joke about the Golden Rule all these years...

Cavan ManKnallgold/Gresham#4967903/09/01; 09:53:35

How to read those columns? Thanks.
Cavan ManGresham#4968003/09/01; 09:55:10

Which is correct; LBMA or Kitco charts?
Cavan ManPOG#4968103/09/01; 09:58:09

Have a feeling this rally has good legs. The movement is slow yet steadily up; as if the noose was being slowly drawn.
Cavan ManGold is primordial, organic.#4968203/09/01; 10:01:58

Feels good. Fence sitters: Just do it.
Mr GreshamLBMA seems correct, wouldn't you think?#4968303/09/01; 10:08:13

http://www.fiendbear.com/deatheq.htm

But the NY figure comes out after LBMA's, right? so maybe someone dug in their basement for some pyrite?

In LBMA's, it's the LIBOR MINUS GOFO column.

Link is to an excerpting of the legendary "Death of Equities" article from Business Week, 1979. Amazing to see the crystallization of thought at a turning point. (Seems like the Dark Ages from here -- did they really speak the same English language back then, in 1979?)

nickel62Just in case you wondered if manipulation of the currency markets thru suppressing gold was worth it?#4968403/09/01; 10:11:40

Weill Pushes Fearsome Five Aside
Commentary. Graef Crystal is a columnist for Bloomberg News. The opinions expressed are his own.


By Graef Crystal

Las Vegas, March 9 (Bloomberg) -- Ten days ago, I lambasted five chief executives of large, publicly traded Wall Street firms for earning a total of $154 million in 2000.

Little did I know that three days later, I would discover that Citigroup Inc.'s Sanford Weill earned more than $215 million by my calculation. That's 40 percent more than all the members of the ``Fearsome Five'' pay list combined.

Or that Robert Rubin, Weill's consigliere, earned $54.5 million -- a figure 47 percent higher than the $37 million going to Morgan Stanley Dean Witter & Co.'s Philip Purcell, who topped the earlier list.

It's not that Weill, in particular, doesn't deserve a lot of money. His performance has been nothing short of spectacular. For the 10 years ended last December, the share-price appreciation of Citigroup and the predecessor companies that he ran exceeded all but 4 percent of the members of the Standard & Poor's 500 Index.

Moreover, in analyzing nine time windows of total return I discovered that his companies' shares always beat the S&P 500 by more than two times. The windows stretched from two to 10 years and ended last Dec. 31. During the two-year period, Citigroup exceeded the index by 9.2 times.

Above $1 Billion

At the same time, Weill has given munificent amounts to charity. You almost can't turn a corner in Manhattan without encountering his name on a concert hall or a medical center or some other worthwhile building.

That's exemplary, but it would have been a bit more accurate to name all those monuments after both Weill and the shareholders of Citigroup and its predecessors. After all, it was the holders that involuntarily gave him money to hand over to charity.

Besides, is anyone worth what Weill's boards have paid him? During the past 10 years, he has earned more than $1 billion in salary, bonus, free-share awards, stock-option gains and other compensation. The average: $100.6 million per year.

In 2000 alone, he drew a salary of $1 million, received a bonus of $18.5 million, was awarded free shares valued at $8.7 million, and made $196.2 million by exercising options.

All that adds up to $224.4 million, or a bit more than the $215 million figure cited earlier. The latter number strips out gains from exercising options and inserts the estimated present value of option grants made last year.

Matter of Timing

Weill received 19 grants during 2000. According to Citigroup, the grants had a total present value of $99.2 million at the time they were made. The company came up with that figure by using, in my opinion, totally lowball valuation assumptions.

Citigroup apparently assumed that Weill will exercise his options after just 23 percent of the term had passed, on average. That estimate is based on reverse engineering of the Black-Scholes pricing model, which the New York-based company used to calculate the options' value.

The company says in its proxy statement that the estimate is based on Weill's history of option exercises. While that no doubt is true, one reason he exercises so early is that his companies' share-price appreciation has been so far above normal. Let that appreciation become more normal, or even sub-normal, and Weill will start waiting for much longer before exercising.

In my own valuation, I assumed he would exercise last year's 19 option grants after an average of 70 percent of their term has elapsed. That raised their present value to $186.8 million, and put Weill's total pay for 2000 at $215.4 million.

Rubin's Riches

Another reason Weill tends to exercise early is that his company gives him a new option grant every time he exercises an earlier grant.

During 2000, Weill bought 20.1 million shares by exercising options. And yet after all that, he ended the year with options on 12.1 million additional shares, up from 10.5 million when the year started. Friends, we haven't seen numbers like that since the miracle of the loaves and fishes.

Rubin, Citigroup's executive committee chairman, is another recipient of the company's generosity. His pay package was buoyed by a $10.3 million bonus, $5 million of free shares and an option which I estimated had a present value of $38 million.

For not being a CEO, he is doing pretty well. Last year, the former co-chairman of Goldman, Sachs & Co., earned 2.4 times as much as Henry Paulson, who now runs the firm and Goldman Sachs Group Inc., its parent. Less work, more pay. No one ever said Rubin was other than brilliant.

Tipping the Scale

As for Weill, he can't have that many years left to dip into Citigroup's treasury. After all, he turns 68 a week from now, on March 16.

Considering how much of the company's money has come his way over the years, that's good news for shareholders. For executives everywhere, though, it's bad news.

When Weill's pay package is removed from databases compiled by compensation consultants, the average CEO's pay in America may decrease by something like $1 million a year.

With this in mind, CEOs around the country will trade in their bespoke Savile Row suits for sackcloth and ashes on his retirement day. The ``Fearsome Five'' may be among the first to make this clothing change.


©2001 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks

RossLLease rates#4968503/09/01; 10:58:43

http://www.kitco.com/market/LFrate.html

It looks like the Kitco chart has been corrected.
One month: 6.8570 %

goldfan@Galearis, Rhody -Lease rates?#4968603/09/01; 11:07:56

Recent posts and links have indicated that

gold lease rate = libor - gofo.

Since as I understand it, libor is the interbank rate and is set with no reference at all to gold ( at least on the surface) then the bank lending rate for gold, gofo, is the only one of these three rates that is directly proportional to the bankers perceived risk in lending out their gold. If it increases, because the risk has increased, this means the lease rate decreases. ie. lease rates are inversely proportional to perceived risk. How can this be? What am I missing here?

Sure would appreciate your comments

Goldfan

Mr GreshamNY Minute#4968703/09/01; 11:14:34

http://www.kitco.com/charts/livegold.html

That's why they call it that. "Sell you out in a..." PPT is finding/will find out. Now working for someone else? One big market, think of NY as. Us little kids, playing on the swings at a Maf backyard party?

Doesn't that NY fault line run somewhere near the Fed basement? Wouldn't THAT be a treasure hunt for our kids to go on someday?

Galearis@ Randy@, ORO, Mr. Gresham#4968803/09/01; 11:15:41

liberals

Hello ORO, Randy@ and Mr. Gresham
Yesterday was a very interesting, no stimulating day for me on USAGOLD, and I thank all the people of the forum for their comments.

ORO:

It is not common for someone to place such personal and intimate personal history on a forum, and (now) to a great extent I regret that I did. I am, of course referencing the personal history of my son's medical problems and the social welfare responses to it: it showed particularly bad foresight in that it would prompt some discussion. And did. This is a period in my life that was horrendously painful, but illuminating about how various communities, government and family, society in general if you will, deals with the unusual. It was an illumination for me that it revealed a commonality of sorts in peoples responses to these types of situations and is nevertheless a useful one for discussion. I do not enjoy dwelling on this topic, but feel that I should make a few points in all this.

The first is that government as an institution is made up of individuals that form a community. In many ways it is structured like a business in its interrelationships with various departments. This is simplistic yes, and likely to appear laughably naive for many on the forum who have already made up their minds in this area, but "ideologically" as verifiable as any other view. In that institutions cannot really have "heart" as an individual can, they are too machine-like to realize anything but an approximation to this, they are still entities composed of individuals that DO have feelings of empathy, compassion, as well as the motivations of less laudable forms. Many of these individuals have sincere motivations to help based only on laudable intent. I have been there and worked with these people, and there is no cynicism. These individuals in government set up their fiefdoms and I feel most have even conspired to achieve their aims because they believe they are doing public good AND for political reasons. They "play" the game, yes? A cynical government may have ministers that would have to be convinced of the POLITICAL advantage of adapting these policies, but the impetus should not EVER be said to spring ONLY from political benefit to the regime. At least in Canada. I have never seen much evidence (until recently here in Ontario) to the contrary. To accept that this is NOT true would be the same as assuming that teachers go into teaching because it pays better, and that the government only supports public education so that it can brain-wash the underclasses. (We do not teach civics classes [yet] in Ontario). (In Ontario at least, most high school teachers who would be sophisticated enough to teach this subject, would NEVER be used as a propaganda tool. Anyone on the forum who has an Ontario perspective would know why I can safely say this.) But I am getting in front of my topic (if not beside my topic) a little here and will go back and tell you what people are really like in my world view as learned from my socialistic support during my family's time of need.

We never announced our son's problem to the world. This would have created an unhealthy social environment – the relationships with his peers would have been abnormal. Our family was not structured as were others, and I had to be the care-giver. For years (especially the last really bad ones) were complicated vis-à-vis the community responses to our "odd" situation. As a result of this lack of understanding, not only was our peace of mind non-existent due to the medical problems, the social area in the community was deteriorating as well. For example I used to get harassing/threatening phone calls from elements (young fascist types) that were not pleasant either. (So I trust readers will not assume I have my head in the sand in understanding the scope of human misbehaviors.) This all changed when our son finally died and the truth came out – then the community rallied behind us – when it really did not matter. The point here is that we as a family did not trumpet out demise to the world and neither did the government. There was no political hay made on our situation; we would have been outraged. The government institution also realized that this would have been the case for a percentage of the population in our situation and respected it. This I put down to a "bureaucratic care-giver" impulse that was also institutionalized.

Furthermore, the government NEVER went on a publicity campaign trumpeting their contributions of support for X disease in order to garner a sympathy vote. One percent of the population that was involved in X disease would not have been worth the effort. The selfish faction (right wing) of the electorate would not have been won over. Outside of justifying in a general way funds going to our government sponsored medicare system, there was little up side for our government. In Canada, these government support systems are QUIETLY put into place with Little or NO fanfare beyond a list. NO commercials.

Of course things have changed in Ontario and our new right wing government (with I might add more than a few Libertarian ideals revealed in their policies) have "restructured" much of this out. I have watched changes made now, that would have killed our son, had they been in place then. The government's stance now on this: "tough, but you drew an unlucky hand". Of course they too, are correct. Just their policy reactions to it significanly differ.

And now for a surprising statement and for this purpose I will repost OROs points in order, and comment again at the end. He said:
****************
3. People at large do not benefit from government, not even the supposed beneficiaries, such as Glearis thinks his child to be. Government (as an organization of people) uses such cases as Public Relations fodder to claim a moral character to their actions and thus lower resistance among people at large to their being taxed. What is not said, is that in order to provide a child such as Glearis’ with this benefit, it has done and caused the following:
a. It took the resources (funds) from someone else, thus lowering their purchasing power and their ability to take care of their own children.
b. Therefore, it had reduced purchasing power that could have been used to buy the services of Glearis and his well wishers, and has reduced their income in this way.
c. They have occupied people in the function of determining and extracting the tax, and have occupied people in determining whether to help Glearis’ child and how. All of these people did not help Glearis’ child at all.
d. Since the government functionaries produced nothing in their venture to have someone provide Glearis’ child with assistance, Glearis and all of us have lost these people's productive output, thus we have had to pay more for the same goods and services. The value of these people to Glearis was negative.
e. The same process of collecting and distributing funds to pay the providers of care to Glearis’ child, the government has taken income away from the care givers and from Glearis in order for government to bee seen as serving other deserving people such as Glearis. This has raised the cost of the service Glearis’ child received and decreased further the income of Glearis and his charitable well wishers.
f. By government "taking care" of the problem, the motive for Glearis and his charitable friends and strangers to help has been eliminated, as was much of the pool of resources available to them with which to do so.
g. By making the decisions as to what treatments and research to fund regarding the problem facing Glearis’ child, government has eliminated the motive for Glearis and people facing similar problems to make judgments as to where to allocate resources. Furthermore, the experts that government had used in order to make these decisions have become too expensive for Glearis to afford, and have been occupied in explaining to government officials the hows and whys of their area of expertise.
h. The government decision makers, having no direct interest in the actual practical outcome to Glearis’ child and those to follow, will have little motive to make the most effective decisions as to where to allocate funds for research, and to evaluate treatments other than those currently practiced (this constitutes effort).

Glearis, your child and others to follow will have suffered a lower level of service, less effective treatment, and have lesser prospects for cure or prevention because of the involvement of government in the business of "care". Furthermore, Government had eliminated resources from Glearis and everybody else, that could have been used in these efforts, and has raised the costs of Glearis living. Government has made the child's problem into a threat to everybody's well being, instead of a cause for strangers to join together in charity.

To repeat what I have stated before, every 1 unit of benefit derived from government costs 4-5 units (the 1 provided and the 4 destroyed by the process) to the whole of the people. Could Glearis and his well wishers afforded this care for the child if government were not providing for it and similar services? If one understands the reality of it, one sees that had Glearis’ child been provided for by Glearis and well wishers, and the same done for all government services, then Glearis income would most probably have been up 2.5 fold in purchasing power, as would have been that of his well wishers.
****************************
If one thinks about these points very carefully, one can see the cold, clear logic of these words. Really, ORO, you talk about essentially a watering down of resources that could be spent better in other areas – in more efficient areas by the private sector. I agree in many – well, some ways. That IS the surprise, yes? But the watering down and efficiency is a given when one spreads the benefits to all, including those that cannot afford to pay. So I don't see the benefits to my child as particularly illusionary – in those pre-credit card days of our family – and society until recently in Ontario has shown little of the "why should I pay anything to keep someone elses kid alive" attitude. But this too is changing. Here in Canada, we have a creeping two-tiered system coming in – as a response to rising costs to support public medicare (non-profit, by the way). Government size is declining – along with the social safety net, which is wasteful anyway – as you say. The corporate sector is increasingly wanting its share of our wasteful system so they can deliver more for (much) more instead of less for less. If one looks at it another way, there is a conflict of interest implied. So the corporate sector IS corrupting our government too. Right again.

That is the bottom line for me, and as far as your argument goes (and I assume you are very acquainted with the Canadian model), you are probably superficially correct – as long as you can pick and choose the criteria for the judgement. If one turns the blind eye to the SOCIAL costs, for example – that inevitably turns up again on someone elses books (if not someone elses hospital bill). There are many ways to waste productivity. From the environmental cost book (which is not looked at at all in almost everyone's model) a tube of tooth paste really costs $5000. In a hundred years, not many will be brushing teeth that often – so the waste factor does not matter. (What IS the market value of losing 3,000 species a year through extinctions?) So these COSTS are not really costs, just loses that turn up OFF the books. So one can safely say that much of the WHOLE world is completely off the map in peoples minds at this forum simply because the point of view is focused (facing away) – and perhaps not broad enough to even see how much of the rest fits together to make the whole. That is ideology working (or lack thereof) too. Is this a fair statement?

If the corporate agenda is applied to basic research, as an example – and let us remove ourselves for the moment from the medical realm of things – the profit only motive is fully applied to criteria. (Our Canadian) governments do not shovel funds into research just to pay off corporate favours – there is research done in areas that may have little foreseeable profit for corporations down the road. Corporations would have little interest in supporting philosophy courses, for example, in universities – or the mating habits of shrimp. So government involvement in funding SOME areas are vital from the perspective of human knowledge and education which for (in some cases) only results in abstract returns (no pun). (Again the Ontario Government is withdrawing support from these "useless" course areas of education.) This too is a waste on the books, yes? We would and are losing much of this as the universities (in Canada too) are embracing the corporate model for doing business. Another example, our esteemed Provincial government has just deleted geology courses from the high school curriculum. So our once superior, world-class public system has been degraded a bit more – for political reasons. The systemic education trend evolving is toward reseach only for the corporate agenda. This is tyranny of knowledge and in some ways is the worst of all tyrannies. It keeps the point of views focused in only certain directions. Generalization: left wing governments without the corporate agenda do more pure science research. In Canada the corporations do not take the same active role in research as they do in the US. There is less research, but there is much less questionable research too.

I don't hate governments or feel they are morally wrong. Morality is based on actions not ideas. People can be morally wrong – and unfortunately some or a lot turn up in governments. Weakening governments just turns them loose on the rest of us in more an urestrained way. Corrupt governments do the same thing. At least those good people in government can perhaps work against those bad ones. (That is another role of regulation - why would one assume that all are self-serving?) However,it does not matter if regulations or institutions are corrupted in the long run; this just creates imbalances (in democracies) that create instability and chaos down the road which in turn addresses the problem anyway - much like a manipulated gold market asserts its fundamentals eventually. The process may take a lifetime or two, that is all. Given this it would be VERY inadvisable to do away with government in order to "clean things up". One only has to keep trying for honest government. Governnent like democracy is both process and institution and it is always a dynamic process. We are stuck with world that needs governments – (often ) self-serving (often) corrupt, but occasionally fair, and always necessary. Even the really bad ones. (The latter is why Saddam is still there.)

However, my bottom line in this by now meandering discussion is perhaps a little skewed by self-interest. A private medicare system would have destroyed my family and killed my son very early on – simply because as a newly poor family starting out with nothing, our son would not have got ANY treatment. That too is a saving to the system yes? (Our new Ontario government knows all about this particular saving.) Our family survived as a unit, however, and I can now function in a way most (?) would consider within the norm. I also have no doubt that a family in similar situation in many parts of the US, and MOST of the rest of the world would not have. THAT is the point for me (and for many unafflicted families in this country too). Remember too that the electorate had free will in supporting public medicare. They thought it worth the sacrifice to their productivity. They expressed their humanity in this way – they were not coerced by politicians- they voted for it in a free election. As a result you imply it to be watered down, inefficient, perhaps, but at least it is available to all. (Still.)

For every gain there is a loss; for every loss there is a gain.

I may be considered a heretic, or someone who "just don't get it" by many here who have invested (if I can use that word) so much into a (to me)narrow focused world view, but I too have been around. I have just spent a lot of time in parts unfamiliar to this forum. I am honest and can admit to my failings in many of the topics covered here. But I do understand your views and your dollarized funding model that is the basis for it, but I also feel that it is too narrow in some respects, and values attributed to some of the pieces in it are discounted.

Nevertheless, I admire much of what you say and know that your contributions to this forum are vastly more significant than mine. So, who am I to say?

My apologies to Mr. Gresham and Randy@ for seemingly ignoring the postings to me yesterday (and the bandwidth waste). Perhaps much of what I have said can be taken for a response to you – your words are certainly circling around in my mind in all this. But this a Canadian perspective and one held by many (but heard by few on this forum), and I do not harbour any particular hopes that it will be respected –or even completely understood based on my outpourings above. But I did respond and for me it was an unpleasant topic to exercise. And of course my words don't really matter in the big picture either or even suffice most of the time to deliver communication. Life has taught that much at least.

It's a complicated world - especially with the tug and pull of so many people with so many different goals. In the end, both of us, ORO and I, are probably more or less right. Where would politics be without this grist for the mill on which to work.

That's the lovely bit about politics: every side is right and every side is wrong. It's just how one weights the things of measure.

Regards,

G.

P.S. That's Galearis with the 'a'. A species of temperate terrestrial orchid, Galearis spectabilis.

Randy (@ The Tower)When growing supply causes your currency's value to shrink, you want your wealth stored in another form of savings#4968903/09/01; 11:56:46

This thought just occured to me. Maybe the reason the Federal Reserve has been so active lately in adding reserves through its open market operations is that outgoing System Account Manager Peter Fisher has been busy conducting active on-the-job training for his replacement as head of the Open MArket Desk! <Ha! HA!>

As many of you will recall, Mr.Fisher has been singled out as President Bush's choice for nomination to fill the role of Undersecretary of the Treasury Department for Domestic Finance.

Yesterday the Fed added another $2.005 billion to the nation's banking reserves through 28-day repurchase agreements, followed by a polishing operation adding another $5.25 billion via overnight repos.

Today, even though the federal funds market was trading 1/16th percent below the FOMC target price, the Fed to part in yet another add operation, providing $3.745 billion to banking reserves through over-the-weekend repurchase agreements.

What does this continue to tell us? That pursuit of the interest rate target policy established by the Federal Open Market Committe is not the driving force here, but rather, it is the unstated goal to provide ample liquidity to the banking system. You haven't seen "nothing" yet!

"We shall have the hyperinflation."

got gold?

schippiGold Lease Rate Chart Error#4969003/09/01; 11:59:47

http://www.kitco.com/market/LFrate.html

This Gold Lease Rate Chart is incorrect.

The correct KITCO Lease Chart is at :
http://www.kitco.com/lease.chart.html

Galearis@RossL#4969103/09/01; 12:02:45

Lease rate fiascos for those who deserve no better...

This rally may have the legs to blow. I'm not putting a currency bet down on it (let alone a gold one), but the timing is not to the advantage of the market zappers. We are a wee bit too close to the next BOE auction, and although we have seen them knock down a rally like this in a few days, POG is (as near as one can tell) playing very close to the $270/$271 point, which is, as you know, a significant one. I pass on too, for our fondest hopes, an email message from Rhody to me this morning who also feels that "this might be it."

The fundamentals are right for it certainly.

We can

but

hope.

G.

Randy (@ The Tower)THIS is today's significant news: HEADLINE-- U.S. Eases Pressure on OPEC Over Oil Price#4969203/09/01; 12:12:28

http://biz.yahoo.com/rf/010309/n08182747.html

Splendid! (Gold follows, people! Get you some!!)

Excerpt:
MEXICO CITY, March 8 (Reuters) - U.S. Energy Secretary Spencer Abraham said on Thursday the United States would let markets dictate oil prices, signaling a move away from previous U.S. efforts to influence policy in the OPEC producer cartel.
"I believe the market should drive these things, and that's the American position," said Abraham, who was in Mexico City for a conference of energy ministers from the Americas.
+
Abraham's comments signal an abrupt departure from the high-profile efforts of his predecessor, Bill Richardson to persuade OPEC producers to relax world supply in the interests of consuming nations' economic growth.

"Our position is not to pick a price...our position is to encourage markets to be allowed to work," Abraham said.


If you have been following these unfolding macroeconomic events at the forum over time, you know that the runner is rounding third and heading for home....

White HillsGold Trail Silence#4969303/09/01; 12:21:48

The silence from the Gold Trail makes me wonder if perhaps things are ready to POP!! Without a doubt FOA has an insiders perspective and ANOTHER is surely in the know. I feel what is taking place was planned long ago and is proceeding along a predictable path. Never mind that the trail isn"t always straight if you keep in mind the objective, the replacement of the USA$ by the Euro as the reserve currency of the world and the return of GOLD as the wealth of nations, then you are better able to see through to the end of the Trail. I look forward to our next hike on the Gold Trail, it should a great one. White Hills
RossLTechnical indicators#4969403/09/01; 12:35:10

I just checked on the discussion over at the DROOY forum and I see that Don L. is expecting the rally to be squashed. It does appear that last weeks spike in lease rates was followed by the gold hitting the market and the futures prices being sold down. I also respect Don L. for his efforts in quantifying just how the large players move the futures and options markets. It seems to me that he is expecting the big movers to continue on this way indefinitely.
However, and I haven't looked at his spreadsheet, but he doesn't make any remarks about counter-party risk in his calculation. This seems to be the standard operating procedure of futures traders. There is no expectation that a big trading house or the COMEX itself will default, and the traders all expect to get good fills despite what happened right after the Washington Agreement was announced. How quickly we forget about Ashanti and TOCOM.

nickel62Can somebody help me out? I thought gold always gave back it's advances before the end of the New York trading?#4969503/09/01; 12:55:37

Did something go wrong or something? I don't think I have ever seen it actually go up with out a full blown panic going on. Or am I missing something in the current situation?
Old YellerDefinition of negative correlation.#4969603/09/01; 12:56:23

http://investdb.theglobeandmail.com/invest/investSQL/gx.show_chart?pl_comp_id=0&pl_errmsg=&pl_primary_listing=comp-i&iaction=Chart&pl_period=6D&pl_chart_type=+&pl_additional_listing=nem-n&pl_sh_movement=50&pl_long_movement=0

Look out,we're out of the golden trenches.Anybody seen the hammerman.

It's a beautiful day here;I think I'll go outside and trim the hedges!

HoratioWheres the gold Rush?#4969703/09/01; 12:58:41

The public has cried Wolf so many times ,now when gold rises no one believes its for real,they have all become sceptical .You hear comments like "its not real"."its just temporary" and on and on.It takes courage to get rich.It takes equal amounts of knowledge,capital and courage.Whats seems to be lacking is the courage,the public are just a bunch of wimps whineing and whining.Nobody is going to ring a bell to tell the public when to get in.It takes COURAGE.
Cavan ManCOMEX Credibility#4969803/09/01; 13:10:40

Recent conversations with COMEX trader (Shearson house):

"I heard recently that COMEX had to deliver about a half million ounces but only had roughly 90,000 in their inventory. Isn't that a big problem"?

Trader: "No. Very few people expect to take delivery".

"But, what if they did attempt to take delivery?"

Trader: "It's not (delivery) going to happen."

This was an actual conversation held as recently as last week.

Mr GreshamRandy#4969903/09/01; 13:19:49

"Peter Fisher has been busy conducting active on-the-job training for his replacement as head of the Open MArket Desk! "

Just bringing the sub up to the surface, eh? "No, NO! Not the RED one! That's the money supply button!"

Randy (@ The Tower)Any gold held in unallocated accounts which are open to leasing...kiss it goodbye#4970003/09/01; 13:23:13

It might look like real gold ownership on paper when you get your quarterly statements, but brother, you're likely never going to see a spec of it as metal.

In such accounts you essentially have made an unsecured loan of your own metal to a second-party business engaged in banking operations designed to lend it (to third-parties) in the hopes that it comes back with interest.

Do you know your history? Banks that lend gold are prone to bankruptcy when their borrowers cannot make the expected repayments of the metal in order to recompense the original depositors. If you are not among the early to withdraw your metal funds from the small stock available, then you lose everything when the business folds....subject perhaps to some lengthly workout settlement in the courts.

Currently, the borrowing interest rate for gold metal has climbed above the borrowing rate for paper/digital dollar funds. Centennial informs me that a top gold trader confirmed that at one point during the past day the overnight rate for borrowing gold spiked to 16% (annualized), with market rumors swirling about the nature of the circumstances and of the particular entity being desperately pinched to meet its demand requirements for gold.

ANYone can have a ledger entry. Have you got gold? (Track down your wealth and ask for delivery or transfer to an allocated or otherwise unleased account.)

Mr GreshamGalearis (03/09/01; 11:15:41MT - usagold.com msg#: 49688)#4970103/09/01; 13:56:22

You entrusted us with your painful personal experience, in order to provide beneficial discussion to all, and we responded with coldness or neutrality. This is a shameful omission, and I apologize. The forum comes up short sometimes; it is spotty on personal response; it is welcoming of input and threatening of rejection all at once. We cannot many times pay our best attention to those deserving of it here.

Please do not regret, and do not hold back; I believe I speak for many here, and probably the usual multiple of lurkers as well.

Your reply to Oro excelled. There is a "Best Argument" to be made by each "side". I love it when I see them side by side. Then I ask myself which one admits of a synthesis, for I want the best points of each side to be learned by the other, and perhaps incorporated.

In the absence of synthesis, people tend to go around throughout history slaughtering one another, and I'm not sure that's very effective toward proving any point at all.

Frustration will make people accept many sub-optimal proposals. (BTW, I have recently used FOA's long-term views on the Trail to model the practice of patience in some frustrating areas in my own life.)

But I have never had to deal with a loss such as yours, and as a parent I know it would change my life in its entirety. The few others I know who've had that loss, I listen to very carefully.

Randy (@ The Tower)Gold calendar#4970203/09/01; 14:00:20

http://www.usagold.com/onlinestore/special.html

Next week marks the final 25 tonne gold auction by the Bank of England, as they then move forward having unexpectedly scaled back this pre-announced program to only 20 tonnes each for the final year.

March 30th marks the date at which the European Central Bank shall conduct its quarterly remarking of the Eurosystem gold assets to the prevailing market value of the day. "Gee, Wally, do you think the U.S. or IMF will ever do this too?"
"Gosh, I dunno, Beave. I kinda think the IMF has already started. Lotsa other folks have."
"Hey, that's really neat, Wally!"

And from Bridge News, we see that June marks the launch date for China's first gold exchange.

---Hong Kong, March 8 (BridgeNews) - No timetable has yet been set for the Establishment of a new company to operate China's first gold exchange, which the People's Bank of China (PBOC), the central bank, is aiming to launch in Shanghai in June, sources at Chinese firms that are likely to take a stake in the new company said Thursday. A PBOC-lead group is still studying details of the operations of the new gold exchange, they said.---

And today marks the day that you kick yourself for not buying gold last week. There's still time to lock in your order before the weekend...gold is still a bargain in the vicinity of 22 year lows. Give the fine folks at Centennial a call and put them to work for you. (Or, check out our limited online offer at the link above.) Remember, it is your purchase from Centennial that makes this website possible.

USAGOLDRandy, All. . .#4970303/09/01; 14:21:47

MEXICO CITY, March 8 (Reuters) - U.S. Energy Secretary Spencer Abraham said
on Thursday the United States would let markets dictate oil prices,
signaling a move away from previous U.S. efforts to influence policy in the
OPEC producer cartel. "I believe the market should drive these things, and
that's the American position," said Abraham
-----------------------------

Comment: I think that it is beginning to dawn on a great number of people that there are some meaningful differences between the Bush and Clinton administrations in terms of their world views and their attitudes toward markets. The Bush world view will translate to economic policy, the gold markets and ALL markets. For the most part, it is "non-interventionist" and it would be good for investors to get a clear idea in their minds what that might mean. It will take a while but once the import of this "new dynamic" sinks in with the public, we are going to see major changes in the way markets are traded -- not to mention the fact that those who watch markets closely are already well-aware of what I'm talking about. The public for the most part hasn't caught on, but the financial professionals (and those who spend time here) know it. The "feel" is different and this past week has gone a long ways toward making that evident up and down the front line in the financial markets. The position stated by Mr. Abraham on oil is part and parcel of a world view. Thanks for getting that important piece of news posted for all to consider. While some will register their deep concern about such a policy, others will recognize a free market as the best solution to the oil problem.

Aside: It was mentioned to us today by someone in the know who follows technical analysis that the gold price is now at a place where some of the hedge funds will get a clear signal to cover, and in fact, go long. That could take things to the next level.

Galearis@ Mr. Gresham#4970403/09/01; 15:17:31

Thank you for your words.

Compassion can never be ordered or stollen from those who have it to give.

Best regards,

G.

beestingComments from an Amateur on Goldmining Shares.#4970503/09/01; 15:17:36

Stranger, Nickel62, or anyone else please comment on todays Gold share action.

In an upday($5.00 POG) all the major Goldmining companies except unhedged Gold Fields Ltd.(GOLD) took a quick and sudden nosedive in share price in the last 15 minutes of trading on the U.S. Exchanges, extra heavy volume was evident "before" the big nosedive.
Barrick(ABX) was down all day but still nosedived in the last 15 minutes of trading.
AU
HM
NEM
PDG
ABX
and others!

Two guesses come to mind:
1. GATA's work may be bearing some fruit as the Gold mining "headging" business may be coming apart at the seams, major investigations into hedging activities could cause all hedgers share prices to drop simultaneously.

2. The Plunge Protection Team intervened on major Gold mining shares in a big way in the last 15 minutes of trading so the trading public wouldn't see what happened to POG today. The sudden drop at precisely the same time shows a coordinated effort and a move much to big for Goldmining Mutual funds to cause.

3. Other Reasons, Anybody?????

How come Gold Fields didn't get "Slammed?"

Thanks for Reading....beesting.

TopazMr Gresham, Randy, Cavan man.#4970603/09/01; 15:30:58

Mr G re Galearis,
Was all set to express those same thought's - you did it far more eloquently than I could, Bravo!
Randy,
That Cleaver clan - no flies on them when it comes to getting ahead of the curve - good one, heh-heh!
Cavan man,
I've heard tell that Comex delivery is pretty ordinary. Firstly the 100oz bars are a bit "iffy" ie NOT good for SPOT delivery - and second it can be quite costly. (hearsay, not practical experience though)
...also, if memory serves, you were expressing an interest in the Aussie/Gold price recently...well!
We have here the key in disclosing whether Gold is still at the heart of the global financial structure or (as we are continually led to believe) just a mere sideshow.
The Aussie bleeder (down) and US$pog (up) have combined to provide an A$ price spike to A$536/Oz o/nite.
This is deep in the red zone for Aussie hedged miners who have sold forward in $A.
What we are looking for is "relief" via a rebound in A$ (totally against current financial thinking) or a predicted dive further in A$ (even higher A$pog and margin call's on miners)
When a hedge is put on, FIRB approval is sought for same. It wouldn't surprise me if the FIRB has some form of tacit agreement with the counterparties something along these lines:- Yes, we'll sell you 10 odd years production from mine X...BUT! If you blokes lose control of the situation - (if gold goes above a pre-determined A$ price and jeapordises our miners ability to operate) - then we'll Nationalise.
The treasury have alluded to this frequently.

Most interesting times indeed...we watch together.

SHIFTYbeesting / All#4970703/09/01; 15:36:47

http://www.amex.com/quote.dll?page=quick&mode=stock&symbol=GOLD&symbol=HGMCY&symbol=GLG&symbol=ABX&symbol=PDG&symbol=NEM&symbol=HM&symbol=AU&symbol=&symbol=

beesting You took the words right out of my mouth. I had to go out and I left just after gold closed to the upside . Gee that sounds nice " Gold closed to the up side" I could get used to hearing that . But what happened to mining shares?

$hifty

Randy (@ The Tower)Hall of Fame page Four is shaping up nicely with the latest two additions!#4970803/09/01; 15:56:26

http://www.usagold.com/hall/hallfame4.html Use your weekend reading time wisely....get caught up on EVERYTHING to be found (page one through four) in this special collection of particularly clear expressions of thought.
PandagoldBeesting and others wondering about today with the mines#4970903/09/01; 16:11:03

Here's one reason - It could have been a last minute snatch of all those who had placed stops.

Here's another: The POG rise was just a short squeeze, and that could have been the case with the mines.

And the one I favour is that those in the know, know that the upside on gold is limited at the present for reasons I have stressed many times, but no one wants to believe (so be it).

I am practising what I preach and making money, not much, but it all adds up. I can wait for the big time, and I am fairly confident when that will be.

No I don't feel smug, and I am not over confident, these are dangerous times - always is when the tide is on the turn

HoratioDevaluation for Sierra Madre#4971003/09/01; 16:14:03

Sierra Madre ,you prove my point,do you think its accidential the peso went from 3000 to the Dollar to 9700 to the Dollar?Don't you see theres a connection?Its not an academic exercise it has real consequences they are masked by the Academics theory bullshit.It has the same effect as a counterfeiter that bleaches the old print off a bill and replaces it with one 100 times higher. Sooner or later the people that produce real goods and services realize whats happening and start demanding more for thier labor.
In addition the Sacagawea coin is FOOLS gold.

HoratioTo Sierra Madre : Notes & Tokens#4971103/09/01; 17:10:04

Sir :When Mexico removed "Pay to the bearer on demand"
from thier currency they copied just the same trick the U.S. did.I find it neither amuseing or odd as you seem to.


The role of misrepresentation and nondisclosure, a.k.a. fraud: In order to achieve more
certainty in personal relationships, people enter into agreements, i.e., contracts, which are
governed by an area of law called "contract law." The concept is that the courts will uphold
legal contracts not fraudulently entered into by consenting adults. This is commonly referred to
as the "Rule of Law." A vital subset of contract law deals with promises to pay. In their most
elemental form, contracts to pay are called "promissory notes."

For a promissory note to be legally valid, it must have these four elements:

1. A "maker," i.e., a person or entity that will make payment;
2. A payee, i.e., a person or entity that will receive payment;
3. An amount to be paid; and,
4. A date certain when payment is due.
If any of these four elements is missing, then the promissory note is deemed to be defective
under the law and cannot be enforced.[1]

When the Federal Reserve legislation was passed in 1913, the Federal Reserve was
empowered to issue Federal Reserve Notes that were, in fact, promissory notes.[2] The
maker was the Federal Reserve. The payee was the "Bearer." The amount of the note was the
face amount. And the due date was "On Demand."
In 1963, Federal Reserve notes, as shown in Figure 2 below, began omitting the due date and
the payee. Yet, these pieces of paper continue to be called "Federal Reserve Notes."

The omission of a payee and a due date while continuing to call these pieces of paper "notes" is
a material misrepresentation and constitutes fraud.

Fraud: (1) DECEIT, TRICKERY: a: intentional perversion of truth in order to induce
another to part with something of value or to surrender a legal right; b: an act of
deceiving or misrepresenting. (2) TRICK a: one who is not what he pretends to be;
CHEAT b: one that is not what it seems or is represented to be. [Webster's Ninth New
Collegiate Dictionary, P490]



The new Federal Reserve "Notes" are not valid notes. Just as if one takes a sign that says
"dog" and hangs it on a cat, the cat does not become a dog. Similarly, if one identifies a piece
of paper as a "note" which lacks the legal requirements for being a note, it does not become a
note. So, if "Federal Reserve Notes" are not notes, what are they?

In truth, they are just pieces of paper with ink on them. They are paper tickets or, better, they
are tokens. One might argue, "What does it matter? People accept these tokens as payment
for their goods and services and exchange them for the things they need: food, shelter, clothing,
etc. What is the difference whether these pieces of paper are called ‘notes’ or ‘tokens?’" The
answer is: who in their right mind would knowingly save tokens for their retirement or accept
the promise of tokens for their pensions? Not many, in my view. In this way, ordinary people
are being deceived about the nature of their money. This deception is especially relevant for
foreigners who save our fiat money.

Perhaps more important are other misrepresentations having to do with the basic banking
relationship, which is at the root of why the world is swimming in fraudulent fiat money. In the
last century, when money was gold (or silver), banks misrepresented the basic banking
relationship to their customers in two ways. First, they told people that they could get "their"
gold back "on demand." This was a false statement. What they should have said was that
customers could get their gold back on demand provided not too many of them sought to do
so at the same time. Further, banks failed to disclose to depositors that the banks might lose
the gold or have it tied up in "investments" that could not be liquidated in a timely manner
without risk of great loss. In other words, the "on demand" assurance was really conditional,
and this was misrepresented. In addition, banks never disclosed either the nature of the risks
they took or the amounts of leverage they employed.

Second, banks used inadequate terminology to describe the transaction when people put gold
in a bank. Banks called it a "deposit," which misled people into thinking that the gold remained
"theirs." It did not remain theirs. The Courts had held for almost 200 years that gold deposited
into a bank became the bank's gold to do with as the bank wished. Banks could lend that gold
to someone else—generally they lent bank notes which bore the legend "payable to the bearer
on demand in gold"—they could gamble with the gold, purchase stocks or real estate, or
whatever.

In fact, when one "deposited" gold in a bank, or when banks created money by extending a
loan,[3] the gold—or the newly created loan—went onto the bank's balance sheet as a
liability. The customer, rather than remaining the "owner" of "his" gold became an unsecured
creditor of the bank. Historically, ordinary people did not understand this. Were it not for these
two misrepresentations and the undisclosed risks, people would have been much more wary
of banks, and there would have been much greater oversight of bank activities by those who
entrusted them with "their" gold.

The harmful effects of these misrepresentations and the absence of risk disclosure resulted in
people not knowing enough to exert market discipline on banks. As a result, banks were able
to engage in more leverage and more risky behavior than they would have been able to had
there been full disclosure and no misrepresentations. As Mr. Patrick Parkinson recently
testified before the Congress:
Some of these comments are not my own I borrowed them.
As you can see when a government removes "Pay to the Bearer on Demand"from its currency its no longer a promise to pay anything.You can no longer make any claims on Gold held in Federal Reserve banks.They have replaced your "Promise to pay with a TOKEN"
When Mexico removed "Pay to the bearer on demand",they replaced a legal "note" with nothing.Any foreigner holding "Bank of Mexico" paper has a claim on nothing.
The same goes for foreigners holding U.S. paper that used to be "Payable to the Bearer on Demand".
They have no LEGAL claims on anything now.
I do not find that as amusing as you do ,I call it fraud.

slingshotHoratio, Old Yeller#4971203/09/01; 17:16:28

Today in the business section of my paper "When will Nasdaq bounce back?". Also, "Retail sales results disappointing in February". Looking at the dow jones from Dec.to March, looks like gold trading sideways. Even CNBC took a shot at gold with their Flashback 5000, which said, Gold down 6.5%.
Guess thats when the duck was at 5000.
Joe Sixpack calling Horatio! Joe Sixpack calling Horatio!
Is it time to buy gold? I agree with you. Old Yeller, we may be standing in the golden trenches after a long hunker down period. Waiting to go over the top. Say Gold at $300.00? Myself, I feel the squeeze of the price of gold vs. availability of physical. But having Fun. How about that Japanese finance minister? Song by The Lovin Spoonful.
What a day for a Daydream. Sing everybody!
Slingshot

Horatio(No Subject)#4971303/09/01; 17:23:51

Some of my comments in message #49711 were borrowed from Lawrence Parks.
R PowellBeesting/mining stocks#4971403/09/01; 17:28:41

The downturn today might have been profit taking. Overall, they are still very much on the upside recently but the temptation to take some winnings off the table at week's end was probably overwhelming for those who have held these companies for so long. I think a few of the G-E guys first bought DROOY in London coffee houses some centuries ago. Whether these stocks rebound next week is the next question.
Other than a very small number (as compared to investors in total) of goldbugs, nobody seems to have noticed that lease rates, mining stocks and POG are signaling something. I read both the IBD and the WSJ today- cover to cover- looking for any word of gold, mining stocks etc. Only on the commodities page of the Journal did I find a mention of gold: "In sympathy with palladium, gold rose 1.4%, or $3.70, to 266.10 an ounce..." To their credit, they did mention that "soaring costs to borrow metal helped drive up its price yesterday", but overall they've no clue.
No one has noticed anything yet. Mining stocks up? Hey, let's take some profit and see if anyone knows what's happening?
Rich

R PowellNo Respect yet/ maybe soon/ then what?#4971503/09/01; 17:58:38

Even though I saw nothing in the IBD and only a sentence or two on the commodities page in the Journal, perhaps Barron's noticed the gold market/lease rates/mining stocks activity of this past week. We'll see tomorrow.
I know it's hard to comprehend but, most people don't even know that the government's one dollar "golden" coin isn't real! Honestly now, how many of us knew that the price of cocoa increased by one third this year? There are many who won't notice if POG goes to $400 next week. The funds may start covering if POG continues up but we're nowhere near attracting the herd, momentum, stock tip taker, follow the excitement "investor" yet. When/if they arrive, then perhaps we'll see that limit up day I've been dreaming about for so long. Gosh, if it starts to happen, many will have to think about the unthinkable. At what fiat $ price do you think of selling some of the stash in return for paying All the bills in full. Just some of the treasure, of course, but when? Never, if you're debt free and not in need but if not? My physical supply is very small and I'll shed no tears selling paper positions but it may be wise to think now before the urgency/emotions of the moment arrives. If you've no fiat need, then don't worry- be happy.
Rich

R Powell(No Subject)#4971603/09/01; 18:15:59

Before Randy beats me to it, let me say that I'd never sell gold to just obtain dollars. But I'd sell some if I had some to become debt free. When POG goes skyward it will probably be because the dollar's value is going the other way so I'd trade my dollars for freedom from debt first and if I had to sell my gold for dollars, you can bet I'd spend the dollars ASAP for whatever it is that compeled me to part with my gold. There. Randy, am I forgiven now?
Rich

slingshotR Powell msg 49716#4971703/09/01; 18:34:58

Don't worry, Be happy. Ah, be happy now.
Slingshot

Seeker of the GrailQuestions#4971803/09/01; 19:01:48

Hello one and all,

I've just started lurking again, at the court of Merlin, since "someone" in the markets, seems to be giving a "rats derriere" about the POG.

But, my readings, at the court news, confuse this page a bit. If I may ask, and someone would answer, I thought fiat, money and currency were synonymous. If not please explain.

Also, if I may, could anyone tell me the amounts for annual global mined gold, salvaged (reclaimed gold), industrial usage, and the amount that is used in the manufacture of jewelry annually.

Thanks in advance,

Interesting reads these past few days.

Mr Gresham, How are your trees. I thought of you in the post of survival, you will do well I'm sure, I would be concerned if they were rooted in a concrete jungle, but this cannot be since they are so large. With such large trees , this implies land, shelter, and water. These are the real treasures, for they bring heat, creatures both furry and with scales, and the ability to grow veges, for you and yours. Once the glacier does it's annual migration further north it will be great to see my "shangri-la" again.

Has anyone heard from Sir Al Fuchino as of late?
Hope he and the General are fine.

And, I assume Lady Leigh's injury is better.

May your cups overflow

SOTG

Mr GreshamDoug Noland -- Credit Bubble Bulletin#4971903/09/01; 19:42:53

http://216.46.231.211/credit.htm

He's in Australia now...

Seeker o.t. Grail --

Thanks for checking in. On my Quest, I passed through Stonehenge, and Cornwall, and Glastonbury, but you know, I was not content until I could pull the car over in a small woodland in Wales, and sleep the night amongst the faerie folk who must still have sheltered there.

So I must have been more of a tree person than I knew, even then. It's a Druid thang, mon.

As for money/fiat/currency, very simple really. Same formula that connects them all: Start with strong paper; Just add faith...(of the human sort), keep away from fear, and don't let the Evil Wizards grow it on trees...

Old YellerBeesting#49705#4972003/09/01; 20:23:28

Hello,beesting,

I was somewhat surprised as well by the late sell-off in the gold shares.In days of old when we had normal correlation between the gold price and the shares,after a strong week,there would almost always be a dip on Fridays.
As a matter of fact, the morning's action looked familiar,but as the gold price firmed so impressively,the shares started to react as well.

The sell-off affected both hedgers and non-hedgers,also they were prominent mainstream gold names that most investors are familiar with.Gee,if I didn't know better,(smirk),it looked like someone was trying to "paint the tape".Of course,after a strong run on a otherwise bleak week,any profit on anything may look tempting.However,that still doesn't explain the aberation in Goldfields as well as several other lesser known non-hedger names,does it?

As an aside,I've posted a couple of graphs comparing Newmont to the NASDAQ composite.I am not in any way advocating purchase of Newmont,I just find the divergence between the two rather intriguing.I do,however,have great admiration for the management of non-hedging gold companies that have resisted what appears to be intense pressure to join such industry "leaders" such as Barrick and Anglogold.

Seeker of the GrailPoints or View#4972103/09/01; 21:04:33

Thanks, Mr G.

So they are the same except for whom the matriarchs are.

I'm still hoping to get a response to the other questions, so I can make a post about the bees in my bonnet that I wish to vacate, and find a new landlord. Hopefully if anything my next post will create discussion or thought provoking questions. As I have stated before, all I have to offer at this forum of the round table is questions (sorry ORO ) I never mean to offend but Knights and Nobles, ideologically, were supposed to have values, morals and integrity, reality be what it may..

Also Mr. G, please think about this....."value"
There could come a time in our lives, that if someone offered you a fruit bar, or a gold bar you would probably take the bar of fruit. Now ...under those circumstances what has real value.
It really depends upon your relativistic point in time.

To ORO, I personally agree that I do not care for governments, idealistically because inherently,
they take away freedoms bu their inherent right to make rules and laws that affect your individual freedoms. But, wathch out for what you wish it may come true..... thus leaving "mob law" or the law of the jungle. If, that be a concrete jungle, Mr G. and his progeny survive and those up to their armpits in concrete don't.

On the other hand, Galearis, a temperate terrestrial orchid ....so fitting.
Instead of being offended and affronted, temperately, you explained your painful position. But I also live in Ontario. Yes there are goods and bads, rights and wrongs to be seen everywhere. Personally I think things had to change, we were in Ernheart's car heading for the wall at 200 MPH. Thankfully somebody remembered there was a brake pedal and we only hit at 100 MPH. Still painful though I agree. But not quite as painful as ORO's ultimate survival of the fittest, inevitable law of the jungle. I fear that Federally they are heading for the wall at "warp 10" and no one knows what a brake is. In the US they may be a "slip stream speed".

I agree with ORO to the point that we are not free people, we are the controlled, and how we feel about that depends on how benevolent we perceive the one who holds the leash. If we take the cost of all facets of government (taxpayer's input) vs. governments effective output, how does the efficiency formula work out? E= (Output-losses)/input x 100 ??.....do we need government?????......do we want the law of the jungle????

Interesting reading indeed.

May Your Cups Overflow.....(with value)

SOTG

SHIFTYInteresting article worthy of note:#4972203/09/01; 21:31:22

http://pub5.ezboard.com/fyourdontimebomb2000.showMessage?topicID=25794.topic

I saw this on another site and followed it to several sites. I was enjoying it so much I stopped reading it to share it with everyone here.

$hifty

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

I now paste shamelessly from Silican Investor Board, because this is the EXAMPLE of what was described in the PPT thread. >>>>>>

To:Casaubon who wrote (2258)
From: Rich Gottlieb Wednesday, Mar 7, 2001 10:40 PM
View Replies (5) | Respond to of 2373

To All:
Interesting article worthy of note:

Here are excerpts from tonight's Goran Yordanoff www.TradingMarkets.com [hotlink in case someone wants to search]

At the close yesterday, Lewis Borsellino's Teachtrade posted that Goldman Sachs and Merrill Lynch were big S&P futures buyers at the close. I scratched my head and wondered why they would be buying when the Dow and S&P indexes put in such terrible trading sessions and had formed very bearish candlestick formations on their charts. This morning's events answered my question.
In a blatantly obvious and manipulative move by Goldman Sachs to produce a positive market environment for the two IPOs it is bringing to market this week, Ms. Abby Cohen (The Ghost of Bubblemania Past), GS's chief market analyst and cheerleader extraordinaire was paraded shamelessly on CNBC once again this morning. Ms. Cohen felt compelled to help us realize that unless we increased our exposure to equities, we were going to miss the boat. I hope all of you read my column from yesterday to recognize what is taking place here.

It seemed like Goldman and pals had to pull out the big guns premarket this morning because yesterday's close made this market look like McGyver and a case of duct tape couldn't hold it together.

I found an interesting post on a message board thread by a Mark L. that summarized Ms. Cohen's track record for the past year:

- On April 6th, she recommended her SUPER SEVEN stocks for the long-term: CSCO, DELL, EMC, FDC, ORCL, PMCS, TER. As of yesterday's close, that portfolio is down 46.2%. Long-term is right, because that portfolio needs to go up almost 100% to get back to where she recommended them.

- October 3rd, she recommended BEAS, CSCO, EMC, JNPR, NTAP and ORCL. That portfolio is down 60.2%. Oye vey.

- November 27th, she recommended CSCO (she hadn't had enough), DOX, EMC (she still hadn't had enough), GLW, ITWO, SLR, SUNW, and VRTS. As of yesterday's close, that portfolio is down 39.63%.

Now, Ms. Cohen is trying to convince us to buy once again as she is increasing her exposure to equities from 65% to 70%. Hmm... how does the old saying go?... "Fool me once shame on you, fool me twice shame on me," I believe.

Very interesting record indeed, wouldn't you agree? Amazing that she still gets television air time with such a dismal record. Fascinating still, is the fact that Goldman Sachs and Merrill Lynch could so blatantly front-run Abby's premarket call this morning which caused an enormous gap up in all indexes. When a layperson tries to front-run, they end up in handcuffs and the judicial system makes 'an example' out of them. However, it is perfectly fine for the brokerage houses to do the exact same thing whenever they have the opportunity to. Isn't it fascinating that the federal government wants to control virtually every aspect of how we act, work, love, and spend our time in private, yet the Wayne Angells and Abby Cohens of the world can commit these acts of fraud without lifting a regulative eyebrow?

In fact, various brokerage houses came out today with lists of stocks we should "BUY NOW." They are telling us we should be buying equities right now because the economic environment will only get better with the Federal Reserve in a rate easing mode and a potential tax cut later this year. Let's just say I feel a little differently.

Let there be no doubt here, the Titanic is going down but the band is playing as loud as it possibly can.

All week long we have heard portfolio managers and stock gurus tell us how "value is back in vogue" and how you had to buy "old economy" stocks here. However, they failed to specify which sectors they considered to be values. Let's see, can't be the healthcare sector because that is trading at historically high multiples... can't be the retail patch because those are trading at ridiculously high multiples as well. In fact, you cannot find such a sector because such a sector doesn't exist. As I stated yesterday, the Dow index and the various momentum sectors which have been created within the Dow are now experiencing the same parabolic stock moves and stretched valuations we witnessed in the technology sector when the Nasdaq made its blow-off move to 5100. This time, however, noone is warning us of the danger that potentially lies ahead. Rather, we are being told that the consumer will continue to spend and drive this economy out of this listless period. Is that so?

What probably excaped the headlines late in the day as pure euphoria spread throughout the NYSE was the fact that January consumer credit surged $16.1 billion. A $5.3 billion rise was expected. If you don't think this is one of the most serious problems in our economy today, please think again. This figure not only shows an absurd level of complacency throughout society but is quite disturbing in the face of negative personal savings figures and down equity markets. As the savings rate continues to reach new record lows, the conspicuous consumer continues to spend with or without cash. Further, the consumer credit year-on-year growth rate has been continually increasing since May, 1998.

The consumer is tapped out. The analysts and brokerage houses who are trying to sell the argument of the American consumer being a soldier who will fight this economy back to the days of tremendous growth we experienced in 1999 and early 2000 are missing one simple fact: The American consumer cannot fight much longer because they are nearly out of bullets.

It is my opinion that the market is being manipulated here to drive the popular indexes higher in an event to suck in as much sideline cash as possible. There is no telling how long this will last but the only thing I do know is you must fade this move. The current environment does not support daytrading or scalping as moves both up and down are very abrupt and generate little follow through. Rather, being a positional trader at this juncture is the only way I see you can successfully participate in the upcoming move. Accumulating positional short positions is not easy work, nor is it easy on the psyche. The fact that you will undoubtedly endure pain before pleasure is something you must understand and accept before you initiate your first order. Unless you have the intestinal fortitude and psychological strength to endure the silliness that is often generated prior to a major leg down, I suggest you do not attempt this strategy and take a seat on the sidelines. Today was one such day for me as many of my short positions went disgustingly against me. Although I felt like reaching for an airsickness bag all day, I continued scaling in and building my positions in the bloated pigs of the Dow Jones Industrial Average....

Cavan ManAU Lease Rates#4972303/09/01; 21:34:52

Kitco site just updated. 1 Mo. @ roughly 6 7/8%. That's up from late afternoon I believe.

Shifty: You need large #@$$% to trade stocks in this type of environment IMHO.

SHIFTYCavan Man#4972403/09/01; 22:06:08

I only hold the un-hedged gold stocks.

Just may sell some soon to buy more metal.

$hifty

HoratioTurkey#4972503/09/01; 22:18:48

Turkey ,lira goes into free-fall 1,000,000 to the Dollar
If the people had converted to gold prior ,they would hold thier own.Japan next? A Race to the bottom ?

Sierra MadreHoratio...about my amusement#4972603/09/01; 22:20:02

"Horatio at the Bridge"

"Lars Porsena of Clusium
By the Nine Gods he swore
That the brave house of Tarquin
Should suffer wrong no more..."

Noble member of the House of Oratii, you misunderstand my amusement.

I laugh at human folly, at the Devil himself, who does not understand laughter, which confounds him...

I smile at deceit, stupidity, wickedness, cruelty, avarice..
Fools and villains, I laugh at you!

I smile at the destruction of our once proud Christian Western Civilization, from which Christ has been banished by those fools and villains, who have thought they could do without God.

I smile with amusement, because if our ship is foundering, and we are about to be swallowed up in the waves, I shall not give the forces of evil the satisfaction of seeing me bowed and cowering, and I hope to face my end, whenever it may come, sooner or later, smiling.

Sierra Madre

megatronJunior#4972703/09/01; 23:02:33

Anyone here interested in doing some DD check out Geomaque GEO.TSE A very well managed company with two excellent gold/silver mines operating and a very new palladium prospect in Ontario.
skiJanuary Consumer Credit#497283/10/2001; 0:29:06

The Headline: JANUARY CONSUMER CREDIT SURGED 16.1 BILLION DOLLARS. A 5.3 BULLION RISE WAS EXPECTED.

The last time I checked, Christmas and big holiday spending takes place in December; not January.

So what were these consumers spending their money on in January? My guess is: Natural gas and electricity bills!!! It would be interesting to see how many utility bills were paid with credit cards versus a normal month.

Mr GreshamJohn Law & the Mississippi Bubble: A "Distant Mirror"?#497293/10/2001; 1:14:28

http://robby.caltech.edu/~mason/Delusions/epd_mississippi.html

called "a good read" by another poster...I dunno, it looks like fun for a quiet weekend hour, but I'll see in the morning after a rest...

"Some in clandestine companies combine;
Erect new stocks to trade beyond the line;
With air and empty names beguile the town,
And raise new credits first, then cry 'em down;
Divide the empty nothing into shares,
And set the crowd together by the ears." --Defoe.

Sounds like someone turning paper into their personal reserve of gold...

Mr GreshamMackay: Contents#497303/10/2001; 1:19:24

http://robby.caltech.edu/~mason/Delusions/

OK, this was from his "Extraordinary Popular Delusions" work of 1852. Was just starting to recognize the writing style...
Old YellerSleep well,gold shorts#497313/10/2001; 2:35:42

Soothing words from the experts in New York;

"strong dollar remains a cap on market"

"against all odds,in light of how much short covering commodity funds have already done"

"acknowledging gold's bearish long-term fundamentals"

Artie FarkleSeeker of the Grail#497323/10/2001; 2:47:22

It seems to me that currency and fiat are not necessarily the same.
To me, fiat means print at will. Currency, if exchangeable for a specified amount of gold, silver, or some other commodity is not fiat.

Now I suppose that if the backing was perfect, There would be an exact one to one match. If a bill of currency was destroyed, the one to one match would be out of balance thus, one would have to have faith that the currency was regulated to hold the balance to as close to one to one as possible.

That said, one thing is for sure, gold or silver cannot be fiat in this world as we know it. : )

Cavan ManSierra Madre 49726#497333/10/2001; 6:47:24

Face East my friend.
Orville GoldenbacherPrime rat ready to abandon sinking ship.....#4973403/10/01; 07:46:18

http://ap.tbo.com/ap/breaking/MGAKTA8F5KC.html

Japan's Prime Minister Expresses Readiness to Resign
Canuck@ beesting @ all#4973503/10/01; 08:00:07

Many posts re: the whack of gold stocks 3:00-4:00pm yesterday afternoon.

At first glance it looks like a hedger/non-hedger affair but I don't think so. Went thru daily activity of a couple dozen stocks from 3:30- 4:00 and although it appears the hedgers took the hit mid-cap hedgers (ie:K.TO) actually held or went up.

It appears that the 'hit' was either:

a) the PPT taking a shot at the XAU.
b) traders locking in a profit weary of the week-end's
activities, possibly lease rates dropping due to release of metal.

Also,I am having difficulty seeing b) because many mid-caps actually went up at the close (AGE.TO, FN, G.TO). If the worry was a change of fundamentals why was it limited to the majors?

The hedge/non-hedge argument is too early to consider, IMHO.
The rise of POG from the mid-260's to low-270's will not impact any major hedgers. My knowledge is ABX will not see any difficulties until around 360-380 and PDG at around $400.

FN was a most interesting story; up a buck and AGE/AEM had a good day. As an aside the non-hedger PAA was flat to slightly up.

The scenario that I am looking for (and this is a major reach) is that the $360-$400 window is in sight thus the bailing out of the 'major hedgers'.

As Galearis so astutely mentioned the other day, "....don't hold the paper too long......" Maybe the paper clowns see the end?

I remain holding mid-cap non-hedgers and I remain holding the 'non-hedged', 'non-paper' metal. To my knowledge there are no liens/forwarding/call/put/options on the physical buried in the 'backyard'. (smile)

Have a nice week-end.

Canuck

adminAnnouncement/Opportunity/German 20 Mark Gold Coins#4973603/10/01; 11:12:07

http://www.usagold.com/onlinestore/special.html

We have secured the price on a large number of German 20 Mark gold coins and can hold the price now posted at our on-line store page for the weekend. We had considered taking the offer down with so much volatility in the market, but decided instead to secure prices and keep the offer up. Luckily we were able to secure prices this morning.

If you believe the gold price will be going higher Monday, here's an opportuniyy to lock in the price now by purchasing the German 20 Mark gold coins. This offer expires 7am MST Monday morning (3/12/01). Normally, there is a $5,000 maximum online order per customer per 24-hour business period or weekend -- roughly 60 German 20 marks. We are upping that maximum to $10,000 for this weekend only. If you have to use separate credit cards enter your orders for each card separately. There is a limit to the number of orders we can accept. We will be monitoring the on-line store and make an announcement here when we've reached our limit. Orders will be filled in the order received with a maximum of 500 coins offered for the weekend. So it is in your best interest to order early.

Background for the coin is provided at the above link which also leads you to our on-line order page. It's all secure and easy to use.

Of course, we don't have a clue what's going to happen Monday, but we offer the following updates from various sources to aid in your decision making process:

----------

"New York, March 9 (BridgeNews) - COMEX Apr gold settled up $5.4, or 2%, at $271.5 an ounce, ending near its intraday high of $271.7--its strongest level in two-and-a-half months. The move was linked to another spike in lease rates, pushing Apr past $270 resistance, which triggered call options at that level to be exercised. Friday was Apr options expiry, and there was open interest of 6,563 at the $270 strike price at the end of Thursday's session."

----------

"New York, March 9 (Dow Jones) - Comex Apr gold up $4.20 at $270.30/oz on buying by "trade houses others that can't afford to run shorts because unable to borrow it overnight" with short-term lease rates much higher, says bank trader. Notes profit-taking near highs by those who bought cheaper. Views $271/oz as breakout level. . . . Spot gold breaks $270/oz resistance with move toward $272, then $277 now likely, said Deutsche Bank analysts. US speculator short covering is to be expected prompted by high lease rates, they said. At $270.95/oz."

----------

UBS/Warburg, the Swiss bank, reports strong gold buying by same bank in both New York and Asian markets Thurs/Fri. Gold in badwardation. Market very volatile. Says UBS, "There is very little supply of options in the market at the moment and with the gold forwards at similar levels to the spike in 1999, the options market is very nervous that we may see gold spike much higher. . . . the usual sources of gold lending have lent all they can.Although there are undoubtedly other sources of liquidity out there to be tapped, this will take time to be mobilised – a number of days (weeks?) rather than hours. With liquidity now considerably impaired in the forwards and options market, gold looks now set to trade higher still."

----------

Using our on-line ordering facility, you can lock in your price now, if you so wish.

Thank you.

canamamiDon Coxe's March 2, 2001 conference call#4973703/10/01; 11:49:28

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

I post this link because the first 10:30 concerns gold, as does the entire period from 31:00 onwards in response to a question from Harry Bingham. I wonder if there would have been a difference if the call were dated March 9, 2001, given the continued rally in the POG and the lease rate increase.
canamamiQuestion re possible inconsistency#4973803/10/01; 11:55:55

If the POG is meaningless and "paper will burn", why all the excitement with the rise in the POG and the lease rates? I recognize there are different species of goldbug on the Forum, so some would be excited by the POG going up, and others not care. However, as individuals, I believe we all should strive to be consistent and coherent in our beliefs. One should not get excited by the rising POG if one previously opined that the COMEX price is irrelevant. Just my rant for the day.
Mr GreshamWarren's Words#497393/10/2001; 12:52:48

http://www.bearforum.com/cgi-bin/bbs.pl?read=121168

from Berkshire report: (follow thread to link to entire report)

"What actually occurs in these cases is wealth transfer, often on a massive scale. By shamelessly merchandising birdless bushes, promoters have in recent years moved billions of dollars from the pockets of the public to their own purses (and to those of their friends and associates). The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them. Too often, an IPO, not profits, was the primary goal of a company's promoters. At bottom, the "business model" for these companies has been the old-fashioned chain letter, for which many fee-hungry investment bankers acted as eager postmen. "

TopazLease rates - an observation.#497403/10/2001; 14:26:15

http://www.lbma.org.uk/2001gofo.htm

If you find conjecture abhorrent, scroll on by.
The link goes to LBMA lease rates page where we find this current "hike" is built on solid foundations and is more a gradual rise than a spike.
From (app) 1 Feb, the close-in rates have been grinding slowly upward and MK's "feeling" that the Clinton/Bush changeover has marked a fundamental change in the market is given much credibility by this.
If one compares the WA spike of 29-Sept 1999, we find 2 completely different "patterns" in place. (scroll down, click "home", go to "stats" click on 1999 in lease (gofo) box)
Gold carry trade is dead at these rates and I'm thinking that without metal to generate paper, those parties so inclined will be unable to provide the "basic ingredient" to move the market lower.
So IMO the achilles heel is now (1) those holding existing paper who "smell a rat" and try to convert to physical..and (2) Aussie hedged miners who, as of Friday, are on the rack for margin calls.
Pamp (the website) indicate a spike in rates is usually a precursor for a CB sale or somesuch so next week is shaping up as a "defining moment" in GOLD......Bring it ON!!

Tree in the ForestBeesting, Randy#497413/10/2001; 15:57:38

Beesting, I find it very interesting that Au shares all dipped except GOLD. Maybe insiders know something. Didn't Trail Guide once tell us his share holdings (under duress I'm sure<grin>) and wasn't GOLD one of them? I did a search of the Gold Trail to see if I could find this info but couldn't find anything. Randy, do you remember where this info is or what TG said? Thanks.
Tree in the ForestMr. Gresham#497423/10/2001; 16:00:24

Did you really spend a nite in the car in a Welsh wood? Cool!
CanuckJapan's ailing financial system#497433/10/2001; 16:09:00

http://washingtonpost.com/wp-dyn/articles/A44049-2001Mar8.html

Approximately a third to halfway through the article the question of choosing the hard or soft landing was ignored and 'no landing' was choosen.

If Japan now picks hard landing (to get the pain over and done with) how would this affect the US and US$?

Thanks.

Canuck@ canamami#497443/10/2001; 16:22:24

Thanks for posting Don Coxe's conference call site. I always listen to his calls and for some reason my old 'favorite' did not work. I have marked the new.

Mr. Coxe's commentary on March 2 was most interesting. I follow his rationale re the increased liquidity in recent years due to 'speed of monetary transfer' but I have to question one of his points. Even if a currency flow is quickly available(liquid) say from USD to another the resultant US price of gold will rise, yes? He did 'skate' around the issue of simultaneous major currency issues whereby gold may (will) still be the alternative of choice.

I sense the simultaneous problems with Japan, England, U.S. and possibly Europe (in general) may be something Mr. Coxe would not want to discuss in the near future!!

Did you catch the slamming of the 'DUCK' in his article in todays National Post?

Regards,

Canuck

LeighTree in the Forest#497453/10/2001; 16:25:34

TITF, I remember that! But I don't remember the date. It was late summer or early autumn 1999, right after a BOE auction. Goldfields had successfully bid on some of the BOE gold and made a public announcement about it, saying that they felt the gold was underpriced. FOA was so impressed by Chris Thompson and his brave action that he bought some GOLD stock and then, in front of some of his friends, burned the stock certificate (indicating he would never sell it).

Sorry I can't point you to a date, but that was the occasion. FOA did mention about it once or twice again after that.

LeighTree in the Forest#497463/10/2001; 16:31:05

When FOA burned the stock certificate, he wasn't trying to give an "all paper will burn" demonstration, though it may sort of seem that way!!!
Galearis@ topaz, a lease rate conjecture....#497473/10/2001; 16:36:28

NO choice but to lease....

As Trail Guide alluded to, the carry trade is dead - and had its swan song with the Washington Aggreement. That was the end for this money tree for many. The rest (including the BOE auctions) are bail-outs and stall tactics to give time for some of those shorts to return the borrowed gold - and you can bet this priviledge is only extended to a favoured few.

To me, the spike in lease rates recently is the sign of another major relationship change that will affect the physical market equally as trumatically as the W.A. The ECB group now knows(?) that they have likely received (back) all the gold they are likely going to get. The POG, for whatever it means anymore, has been for some time now BELOW (inflation, inflation, don't forget inflation!)the level it was just prior to the W.A. I think the paper market HAS collapsed. How could it express a POG well below the bottom and even represent ANY aspect of normality. The other factor in the game is COMEX itself. It CANNOT cover the calls. We ARE there! The problem is seeing how long there, will be here, yes? (smile)

Bottom line: they have run out of liquidity in this market.
The paper market needs SOME liquidity to substantiate itself as real.

I expect another shift as dynamic as the old W.A. very soon. One can only speculate what form that might take.

Nobody is leasing gold now to make money. They are leasing and rolling over just to stay alive.

But I might be missing something. It has been known to happen....

Regards,

G.

megatronQuestion#497483/10/2001; 16:47:49

Can anyone answer the question of why there are so many foriegn holders of US debt who continue to hold it without a proper audit of the US gold holdings? What kind of idiot would hold that much 'paper' without a proper accounting?
Do they supply the figures to the govt officials but not the public?

megatronImportant Numbers#497493/10/2001; 16:53:27

Keep in mind these numbers this week:

S+P 500- 1226. Very strong resistance at this level. If it breaks down below this for any extended period there could be some fireworks to the downside.

And of course later on, Gold-$334. Look out for fireworks above!

SteveHSummers quoted as saying current period more like#497503/10/2001; 17:20:07

http://www.economist.com/finance/displayStory.cfm?Story_ID=526387

pre-1945 recession.

goldman sachs economists;not analysts mentioned too.

Cavan Mancanamami 49738#497513/10/2001; 17:23:04

Some us want to get out from under the gold equities we own; that's why. Will be visiting your fair city this summer. Thank you for the information some months back. CM
Tree in the ForestLeigh, Galearis#497523/10/2001; 19:56:42

Leigh: Lady Leigh you have the memory of a teenager! You must be 18. Am I a flatterer or what?<grin>

Galearis: Well you certainly are correct about the gold carry trade. There is no profit at these lease rates. What were they last, approaching 7%? So the message to the players is that this game is over. And you are right about things just hanging on. It's a house of cards and just a matter of time. Now all we have to do blow!

BonedaddyMegatron...#497533/10/2001; 20:20:39

.... often I have wondered the same thing. What kind of idiot, you ask? The world is filled to overflowing with idiots of all kinds. I think the reason so many of them are willing to hold our worthless paper is that the only other choice they see is some "lesser nation's" worthless paper.
Was it any more foolish for a fellow in Asia to buy US paper than it was for a fellow in NY to buy Yahoo at $200 per share?
What would happen to the world economy if alot of people, all of a sudden, realized that the good ol' US of A was going to try and print it's way out of the Social Security debacle? Let that thought stop you cold for a moment! In just a few years time, that is exactly what will have to be done. No wonder the politicos like to drag out a lot of confusing charts and statistics when discussing SS. Yes, I believe there are as many kinds of idiots as there are fiat currencies. Let us be thankful that there are enough of them to keep the price of gold affordable for a little while longer.
I suppose they will soon say, " ALL YOUR DEBT ARE BELONG TO US!!"

Carl HStocks, Lies, and Ticker Tape #497543/10/2001; 20:48:49

In reply to your post yesterday regarding confiscation, I regard physical confiscation as unlikely. It was not all that successful last time around. I have seen a statistic that they only got about 10% of the gold that way. I think that this time around it will simply be taxing the profits upon sale as ordinary income. This should get them at least 20% of the take instead of 10%. I recall reading that the tax status of gold and silver bullion has been changed to ordinary income. Does anyone know if this is true?
Gold Trail UpdateThe Gold Trail Discussion has been Updated#497553/10/2001; 20:58:12

http://www.usagold.com/goldTrail/default.html">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
Chris PowellSunday New York Times takes note of stirring in gold#497563/10/2001; 20:59:08

http://groups.yahoo.com/group/gata/message/709

Sounds like they'd really prefer
not to believe it....


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.

SteveHThis is good#497573/10/2001; 21:06:02

www.kitco.com

repost:

Date: Sat Mar 10 2001 22:28
kapex (This was good!) ID#130128:
Copyright © 2000 kapex/Kitco Inc. All rights reserved

Date: Sat Mar 10 2001 11:38
dhahabu ( All it takes is one hedge fund ) ID#279447:
Copyright © 2000 dhahabu/Kitco Inc. All rights reserved


Despite what Uptick says about how liquid the gold market is, it is still a pretty small slice of the world market pie.
With all that has been bandied about on Kitco regarding collusion, cartels, cabals, governmental stifling of
markets, and with GATA in the background, the single most significant ( for me ) issue weighing in favor of
governmental implication in the gold markets has been the silence.

GATA and Frank Veneroso make a pretty good case for the short market. Is it collusion? Perhaps, perhaps not,
the argument is still bouncing around on center court. Since it is impossible to prove one way or the other right
now, we can only watch the silence.

Circumstantial evidence as well as real evidence of shorts in the commitment of traders reports indicate that the
short position is very real. Why these shorts exist and haven't been run is the silence I listen to. Everyone talks
about hedge funds as big fish that love to gobble up little fish and even other big fish if the opportunity presents
itself. What exactly has kept a big hedge fund from making a run on the gold market? In the Clinton years nothing
was what it seemed. Productivity gains, inflation numbers, dollar strength, market strength, it all was a little too
pat, government reports always seemed to reflect what the market wanted to hear. The links between Goldman
Sachs and Rubin, the circumstantial evidence that always seemed to show up the same names.

Was an order issued by the Clinton presidency, "Leave gold alone or the US government will …?"

In any case things have changed, we now have a new president and a new perspective. Has the order been lifted?
If it has, we would expect to see a hedge fund start taking possession of physical gold. Not that paper stuff that
there seems to be an abundance of. Lease rates would go up. The gold price would climb. You know, free
market stuff. Supply and demand stuff. It is too early to tell, but if that Veneroso 15,000 ton short position is
getting ready to be run, the fireworks are going to be pretty spectacular.

One writer this week indicated that the BOE gold sales are in fact a mechanism to hold the British Pound from
advancing against the Euro for trade reasons. Central Banks have been purported to be selling gold as a reserve
because it has no place in modern banking. Now we suddenly hear that the BOE doesn't want so much gold
because it may make the pound worth more against the European currency. So what is the REAL reason London
is selling gold? Is the story going to change? If that 15,000 ton short position gets run then gold as a reserve will
suddenly be in high demand by the Central Banks who just a few short months ago didn't think they needed it.

Interesting days indeed.

Stocks, Lies, and Ticker TapeCarl H#497583/10/2001; 21:16:30

I hope you are right about confiscation. There are so many forms of gymnastic endeavors attempted by the gold biz regarding this. Pre '33, numismatic, "jewelry", etc. It is a weight around the neck of anyone who holds physical. I bet sales of physical would increase exponentially if there was no such concern. I am bullish on gold because I respect the lessons of history. Unfortunately those lessons also recount past confiscations. Too bad "freedom from gold confiscation" isn't the third certainty to go along with "death" and "taxes"!
ETBonedaddy#497593/10/2001; 21:30:26

Hey Bonedaddy - nice to hear your thoughts!

"Was it any more foolish for a fellow in Asia to buy US paper than it was for a fellow in NY to buy Yahoo at $200 per
share?"

Har! No difference at all partner! True believers.

Stocks, Lies, and Ticker TapeBonedaddy#497603/10/2001; 21:42:49

I have wondered about that also. The eventual foreign flight from the fiat $ concerns me. Not in an economic way as is frequently levied on this forum with rates of every conceivable description, but in a geopolitical sense. It does not make much sense to be a belligerent to the country whose currency you hold as much of your "reserves". What is gained if you go to war and defeat that country? Talk about a loss leader! However in the absence of such an economic umbilical cord, the potential gain is obvious. To conquer today may not mean an initial military victory, but an economic triumph that softens the industrial capacity and will of the populace to counter their country's shrinking influence around the world. Vital industries can be lost due to "economics" and reliance upon foreign sources is the disease of the third world.

My paranoia gene tells me to keep looking over my shoulder if too many umbilical cords are cut, and then are attached to another "common currency". Interesting days lie ahead.

Mr GreshamTree in the Forest#497613/10/2001; 22:11:09

Aye, that I did... chasing ancestors or wizards or such. 1975 -- my mother was reading Mary Stewart's Crystal Cave, as I stopped by on my way to the airport. I asked to borrow it, but she was too much into the story to give it up. When I finally read it after my two weeks travel, I found I had coincidentally tracked much of Merlin's story in my wandering in Wales and the West Country.
gidsekCanuck @ stock behaviour#497623/10/2001; 22:12:48

Have a look at SWC Friday afternoon performance if you haven't already.

gidsek

gidsekerr Canuck ...#497633/10/2001; 22:14:25

SWC is a PGM producer, not gold which was my point ... sorry.

gidsek

Sierra MadreI wish Journeyman would happen to read this...#497643/10/2001; 22:41:48

Sir Journeyman, I have read with interest your postings, from I have learned that your background is in professional gambling. That you were successful in this career, is proof of your high intelligence.

All my life, I have been interested in monetary matters and especially gold.

Back in the 60's, I convinced my father that gold had to explode. He took his savings out of B of A and transferred them to a Swiss account, which I helped him open.

He got in at something like $36 oz., and was wise enough to cash out at $600+, and then put the money into bonds yielding some 15%. He was a shrewd man with money, shrewder than I. Anyway, at the time I had no spare cash for investing.

Another "once in a lifetime opportunity", as I used to call it, is at hand. At the time, late 60's, it was clear as day to me that that was a situation where loss was virtually impossible; and so it appears again to me, today. Thank you, bullion banks, CBs, forward sellers, bad-mouthers of gold, for allowing me to accumulate all these years! Heartfelt thanks!

Where does gambling come in?

I have the "edge" that you mention, Journeyman; indeed, we all have that "edge"; the "edge" in buying gold consists in this: we DON'T know an enourmous amount of things - but we know ONE thing, and that is our "edge" - that ALL paper money eventually depreciates, and gathers speed in its depreciation. Only gold remains.

It's been a long, long, time, but our day is coming. Perhaps soon, perhaps not. But, it shall come. As sure as day follows night.

Sierra

SHIFTYTrail Guide#497653/11/2001; 0:57:31

I enjoyed the walk.

Thanks

$hifty

John DoeFriday's close#497663/11/2001; 1:55:31

Someone should really look into that extremely odd price behaviour in assorted gold shares late last Friday. Sector-wide, large declines on very little volume and no news -- it doesn't add up. I'm sure glad the SEC is right on top of these things. :O)

It looks like either rigging for better entry points next week (greed) or tape painting to marginalize gold share performance YTD (fear). If it was true selling, there would have been heavy volume to match the price moves. As it was, the average volume patterns during the day were many times larger than during the selloff. We don't often get to see THAT many footprints all over our backyard.

PandagoldJohn Doe Volume on Friday#497673/11/2001; 2:49:41

You state declines on very little volume. I was surprised at the 'high' volume on some of the large 'declines'.
Newmont over 5million
Drooy 1.5 million
Homestake over 4 million
Glamis over 600,000
Harmony over 700,000

They were all at the highest for the month.

Perhaps you typed an error?

PandagoldNext week#497683/11/2001; 2:59:20

If the mining sector continues to advance significantly next week, without any additional positive news development then, because of those high volumes, I would say that the final hour was hit by short sellers (who will be being squeezed , or there were many who had put stops in place to lock in some of their gains, and these were being 'snatched'.

This is the big weakness of trying to protect by 'stops'.

nickel62Panda GOld were you listing all day volume or the closing hour volume?#497693/11/2001; 3:28:38

I would like to understand your post better. Did you say that the volume on these stocks was not that light for the last hour as John Drooy claimed? Or that there was not a significant difference between the relative volume from during the day till the last hour for these particular stocks?
PandagoldNicke162 #497703/11/2001; 4:35:47

Those are all day volumes I quoted. I do not see that
John Doe mentions the last hour. The heavy volume came both
at the beginning and the end on most from what I can see.

What is significant is that Friday was the heaviest volume of the month, and yet most gold shares finished down. All though the final hour was heavy, it is not as though most of it was in that time frame. But the shares never seemed to recover from the opening flurry.

We have to consider that the GATA hearing is next week I think (is it 14th?)and the Bank of England auction.

Only TPTB who control the large brokerages, and financial houses know the upto the minute state of shorts and margin activity, and these are key considerations. They also know the weighting - whether it is institutional or the little guys.

Without this information you are always in the dark to a great extent.

Canuck@ gidsek#497713/11/2001; 5:29:22

SWC dropped a dollar (+/- 3%) in the last few minutes; adds a twist now doesn't it. Sorry, although I have heard of SWC many times I do not know of its status re: hedging & size.

So how does this play into the mix?

Notice Panda's lastest:

"If the mining sector continues to advance significantly next week, without any additional positive news development then, because of those high volumes, I would say that the final hour was hit by short sellers (who will be being squeezed , or there were many who had put stops in place to lock in some of their gains, and these were being 'snatched"

Canuck@ gidsek#497723/11/2001; 5:40:28

You may be onto something brother!!

Just checked PDL.TO against SWC; PDL did not take the 3:30 to 4:00 bath.

Further, went to silver for a look-see, SIL took the same 3:30-4:00 bath whereas (as posted yesterday) PAA did not.

Let's review:

3:30-4:00 Bath...................No Bath

Gold

ABX,NEM,AU,PDG...................FN,AGE,G.TO

Silver

SIL..............................PAA

PGM

SWC..............................PDL

Hmmm!!!

Back to the hedged/unhedged theories?????

Canuck?#497733/11/2001; 5:47:16

This is getting complicated. Think Canuck think;
advance past novice status.

Why did Gold, silver and PGM majors take the IDENTICAL beating on Friday (3:30-4:00) and many in the same industries did not?

What is the common denominator?

nickel62Some technical insight into the sell off at the close of the gold equities on friday!#497743/11/2001; 6:28:07

As reported in my Midas Gold Alert on Friday, massive buy stops were building on the Comex floor at $272.50, right above the active April contract high for the day. While gold never gave back more than an inch during the trading session, the highs were not seriously challenged late in the day. Volume was very heavy as an increasingly panicky Gold Cartel brought out the Guns of Navarone one more time to prevent a rout and a close above key technical resistance at $272, basis the April contract. Volume was very heavy the last half hour at 17,000 contracts. That means the GUNS were really blazing. The Gold Cabal was not only shooting a lot of bullets at the gold buyers, they were sweating them.

It is not unusual for commodity bulls, that are gunning for bear stops, not to try and push through on the close. Why? Because they can launch an assault in thinner market overseas conditions and move gold sharply higher when there is less resistance. Then, instead of stops being touched off at $272.50, they are stopped off at say $277. More bang for the buck.

One can never say that will happen tonight or Monday morning, but I have seen it go that way many times.

Just as the desperate attempt of The Gold Cartel was evident in their effort to stomp out the gold stampede late in the Comex session, so was somebody's decision to kill the XAU shares in the last hour of the day. With gold making its biggest move in a long, long time and the stock market cratering, the XAU dived late to 55.01, down 1.77. VERY ODD indeed.

Here is one explanation:

Subj: A conflict of interest story in gold - Scotia Capital and Scotia Mocatta
Date: 3/10/01 12:43:01 PM Central Standard Time
From: This email address is being protected from spambots. You need JavaScript enabled to view it. (Dennis Shumaker)
Sender: This email address is being protected from spambots. You need JavaScript enabled to view it.
To: This email address is being protected from spambots. You need JavaScript enabled to view it.

THIS IS A CONFLICT OF INTEREST STORY FOLKS and it concerns GOLD!

Scotia Capital downgrades pretty much the entire gold sector during a time of very high gold lease rates! Why a conflict of interest? ScotiaMocatta, their brethren is into leasing, selling forward, and other derivatives. They also work closely with central banks! So while Scotia Mocatta is having a hard time with high lease rates, their partners in crime Scotia Capital downgrades a myriad of gold shares (some to the rarely used SELL category)!

BTW/ you did notice which stock they downgraded to a SELL? Homestake - HM, HM is the one that lead this charge in November from its bottom of nearly 3 9/16 !! It's the best performer. So they downgrade HM the best performer to a sell and they downgrade Barrick's, one of he world's BIGGEST gold hedgers from a Strong buy to a buy. BTW/ Barricks, ABX was one of the worst performers in the last couple of gold share waves.

Here are the links to the brief snippets of DOWNGRADES that happened yesterday during the POG peak and exactly when the 1 and 2 month lease rates exploded higher during the day!! The one month was cut in half in Friday morning, but by the time the day wore on it exploded. That's when Scotia Capital issued these myriad of GOLD downgrades.

nickel62The previous message should be in quotes#497753/11/2001; 6:29:35

The words are from the Midas Le Metropole Cafe wed site and should be in quotes.
BelgianUS - JAPAN trade wars.#497763/11/2001; 6:40:08

The US/JAPAN Trade Agreement in 1995 (Gold-decline-start !)
arranged that both countries would strive on a Weaker Yen and a Stronger Dollar ! This was at the height of the Yen-Carry-Trade. This Trade/Currency - war has been far from finalised. Perhaps a new chapter is on the brink of being written. And the japanese know very well that Gold exists (Hashimoto '97). They certainly know the extent of leverage that "touching" the gold-carry-trade, could give them.
Was it "GOLD", that was the "political" one, on the metals ?

Hill Billy MitchellDow close on Friday (10665 or 6324)#497773/11/2001; 6:44:34

I just performed some fairly unsophisticated calculations. My father has only a 7th grade education, yet he could perform the most marvelous calculations before his age caught up with him. In high school I would solve problems with differential equations that I just could not solve with a little math and some mental effort. My father could get the right answer in less time than me. He was usually off by maybe a half percent at most with his quick mental problem solving process. I wish I could ask him about my calculations as follows:

Dow is up by 92% in last five years (up form 5547 to 10665)

By pulling out (Wal-Mart, Hewlett-Packard, Microsoft, Intel, SBC, and Home Depot) and replacing them with (Union Carbide, Goodyear, Woolworth, Westinghouse, Texaco, and Sears) The Dow would be up about 14% (up from 5547 to 6324).

This would adjust for the changes in the DOW components that have been changed by the manipulators in the last five years. I could not get prices on Woolworth and Westinghouse for obvious reasons; therefore I gave them the benefit of the doubt and assumed that they went up by the same amount as the highest of the six components that were replaced (Texaco 75.12%).

Someone out there prove this wrong. It would be interesting to know the correct answer, or at least as close to the correct answer as reasonable, considering the death of Woolworth and the swallowing up of Westinghouse by a British Company.

I'll bet that I am only off on the conservative side. The estimated figure of 6324 for the old DOW components today is probably on the high side.

Respectfully,

HBM

PandagoldCanuck (Stillwater)#497783/11/2001; 6:46:30

I mentioned Stillwater (SWC) some time ago. This is the only real platinum/paladium mine in NA. My comment at the time was I thought it strange that this company was way off its highs for the year yet the two metals price was soaring to dizzy heights.

I would have been most surprised if any main gold producer was so languishing with gold at a comparible high

It has quite a bit of debt, I believe and probably did some hedging, not enough to kill it but enough to have stopped it enjoying the full benefits in its profits column.

RhodyLEASE RATES AND POG:POS RATIOS#497793/11/2001; 7:07:51

My brother and I were playing around with a few figures the
other day and FWIW, this is what we came up with:

POG and POS fluctuate with spot metal sales, leased metal
sales and paper metal sales. Of these three, the leased
and paper sales are far more significant in driving the
price, because without these two fictional types of
supply the spot market is in a screaming deficit of supply.
Is there a way to remove these paper drags on the market
(and here I include lease contracted gold as paper
derived)?

I made the assumption (a big one) that gold/silver leasing
has been the major manipulation device for pushing gold
down. At the very least, it double counts available
stocks by selling the real metal and replacing the metal
in a central bank vault with a lease contract that
is considered as "good as gold" and is thus counted as part of the total gold reserves. In this
way the CB is eating its cake and yet still has it.

So how do we remove this double counting phenomena from
the spot price to see a true valuation?

I used the following formula:

True price = POG X lease rate multiple.

POG is the comex spot price.
The lease rate multiple (LRM) is the average lease rate
charged over the one month to one year term converted
into a multiple by division into 100%. So the present
average gold lease rate is 4.66%, divided into 100% and
we get a multiple of 21.4 for gold.

so plugging this into the formula above we get:

true price = 271.6 X 21.4
(gold) = $5812 per oz

If you do the same thing for silver, one obtains a
average silver lease rate of 2%, producing a LRM of 50.

true price = 4.50 X 50
(silver) = $225

Is this realistic? If one divides the true price of silver
into the true price of gold to obtain the gold:silver
ratio, one obtains 25:1 which is a bit high for the traditional 17:1 ratio. So either gold is too expensive
right now, or silver is too cheap. I think it's the
latter. Silver has lagged gold, both in terms of lease
rates and spot. It has fallen more than gold even though
the supply/demand fundamentals are far tighter, and the
lease overhang far higher.
On the other hand, spot prices tend to lag surges in the
lease rates by several days. (For example, gold reacted
little last week to huge increases in lease rates)
Right now, gold lease rates are half way to the heights
achieved during the WA spike. This implies that spot
gold on comex should rise to just under $300 next week,
and that lease rates should rise to about the 7% level
That would push the true price of gold DOWN to
($300 X 14.3) $4229 producing a gold:silver ratio
of 19. That is close to the historical ratio of silver
to gold. As silver also rises, this should refine the ratio
even closer to the historical mean.
Of course all of the above may be wishful thinking but
any attempt to remove the effects of leasing to give
one some idea of true value after the manipulation ends
may be of some use. The calculations do generate
true prices in the range of historical price ratios of
the two metals, and the LRMs produced may actually
reflect true paper inflations over the past 30 years
or so.

ChristianBarrick Anglogold#497803/11/2001; 9:03:14

Bush Family are agents of the British Monarchy. George Herbert Sr., and his sons use Barrick and Anglogold as propriety operation of the CIA using untraceable gold as funding for or overthrow of governments. The cheaper the commodity price is the more profit can be made turning it into trade settlement gold at BIS. Present commodity price of $270 is half of trade settlement price of $540. Credit creation gold between central banks is priced at 10 times commodity price. Greenspan, Bush, Queen of England, Clinton, Corizone, Reich CONTROL the largest Hedge Funds in USA. Who is going to bail out the monstrous hedge funds gold short position WHICH threaten the viability of NYSE + NASDAQ. ESF is backstopping a gold short position of 17,000 tons. USA tax payers will have to make that good to get out of this mess. I wonder how much the so called present surplus can cover that 17,000 tons. We are in trouble big time and instead of solving it we are digging in with an ever increasing gold short position. Politicians need to take the SAT test. Watch the smart money leave the stock market the next 4 months.
adminAnnouncement/Opportunity/German 20 Mark Gold Coins#497813/11/2001; 10:05:24

http://www.usagold.com/onlinestore/special.html

Note: We would like to thank those who have already placed orders for the gold 20 Marks. Your order -- small, medium or large -- makes these pages possible. (Not to speak of what it does for your personal financial well-being.) As you can't help but notice, there are no screaming banners, no obnoxious, constantly flashing messages, no long irritating down loads.

Instead we offer:

--- good discussion (here)
--- gold news you can use (at the Daily Market Report page) --- the solid-well considered thinking of our irrepressible Trail Guide (thanks for the latest FOA)
--- the clever humor with a golden hue found at the Rocket School of Economics
--- our informative (almost) daily look at the gold market found at the Commentary and Review page.
--- and more..........

What do we ask in return?

Simply that you consider becoming a client of the firm. Thousands of you have already done that and we would like to have a thousand more. We, in turn, as the "good steward" will plow back some of the fruit of that labor to these pages making them an even more interesting place to spend some of your free time. And go even further in helping to discern what is really happening in the "real politic/economic" that orbits this very important yellow metal. . .

Once again thanks for doing business with USAGOLD/Centennial Precious Metals.

--- the Management

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

We have secured the price on a large number of German 20 Mark gold coins and can hold the price now posted at our on-line store page for the weekend. We had considered taking the offer down with so much volatility in the market, but decided instead to secure prices and keep the offer up. Luckily we were able to secure prices this morning.

If you believe the gold price will be going higher Monday, here's an opportuniyy to lock in the price now by purchasing the German 20 Mark gold coins. This offer expires 7am MST Monday morning (3/12/01). Normally, there is a $5,000 maximum online order per customer per 24-hour business period or weekend -- roughly 60 German 20 marks. We are upping that maximum to $10,000 for this weekend only. If you have to use separate credit cards enter your orders for each card separately. There is a limit to the number of orders we can accept. We will be monitoring the on-line store and make an announcement here when we've reached our limit. Orders will be filled in the order received with a maximum of 500 coins offered for the weekend. So it is in your best interest to order early.
Background for the coin is provided at the above link which also leads you to our on-line order page. It's all secure and easy to use.

Of course, we don't have a clue what's going to happen Monday, but we offer the following updates from various sources to aid in your decision making process:
----------
"New York, March 9 (BridgeNews) - COMEX Apr gold settled up $5.4, or 2%, at $271.5 an ounce, ending near its intraday high of $271.7--its strongest level in two-and-a-half months. The move was linked to another spike in lease rates, pushing Apr past $270 resistance, which triggered call options at that level to be exercised. Friday was Apr options expiry, and there was open interest of 6,563 at the $270 strike price at the end of Thursday's session."
----------
"New York, March 9 (Dow Jones) - Comex Apr gold up $4.20 at $270.30/oz on buying by "trade houses others that can't afford to run shorts because unable to borrow it overnight" with short-term lease rates much higher, says bank trader. Notes profit-taking near highs by those who bought cheaper. Views $271/oz as breakout level. . . . Spot gold breaks $270/oz resistance with move toward $272, then $277 now likely, said Deutsche Bank analysts. US speculator short covering is to be expected prompted by high lease rates, they said. At $270.95/oz."
----------
UBS/Warburg, the Swiss bank, reports strong gold buying by same bank in both New York and Asian markets Thurs/Fri. Gold in backwardation. Market very volatile. Says UBS, "There is very little supply of options in the market at the moment and with the gold forwards at similar levels to the spike in 1999, the options market is very nervous that we may see gold spike much higher. . . . the usual sources of gold lending have lent all they can.Although there are undoubtedly other sources of liquidity out there to be tapped, this will take time to be mobilised – a number of days (weeks?) rather than hours. With liquidity now considerably impaired in the forwards and options market, gold looks now set to trade higher still."
----------
Using our on-line ordering facility, you can lock in your price now, if you so wish.
Thank you.

Galearis@ Rhody's lease rate musings#497823/11/2001; 10:05:36

Trail Guide is strongly welcomed to comment!

First: I am grateful you posted this, dear brother!

Notwithstanding, that we paid some coin to carry on the long distance discussions and that I too believe that this conceptualization of the gold market has some nuggets (smile) of credibility, I would dearly love some comments from other posters to this forum and especially Trail Guide on the validity of this.

It surely is a refreshing (smile) way of looking at the market. Accuracy/validity would be the plus.

Also the poster (apologies for my poor memory of names and handles) who dug up that most useful tid-bit on West Point reserves being "redesignated", congratulations! Even when the larger things are stirring beneath the cloudy waters, there are sometimes ripples that are noticed. The mint, as you know is charged with the responsibility of "moving bullion".

The why and to whom is the questions. Are they expecting coin sales to grow? Or.......?

Best regards,

G.

Orville GoldenbacherThaiGold-1984(2001)#497833/11/2001; 10:21:41

Surveillance Society.?.

Here is an article i found while surfing the net, it's by ThaiGold. Hope he doesn't mind if i post it here, it's a good read.


"Surveillance Society.?.
Posted by: ThaiGold (207.170.236.35)
Date: March 10, 2001 at 23:20


Back around 1948, author George Orwell published a prophetic book entitled
simply: "1984" ... Needless to say, it was way ahead of it's time. Sorta like
science fiction. Or at least it was received by the public and critics as
"never going to happen". Yup. Later, it was (I think) made into a movie, or
at least shown as a made-for-TV movie. That's where I must have seen it, as
I seldom read books. Or anything else. I'm either too busy, or too poor to
afford such luxuries.

Anyway, I was sitting here the other night reading a free book on the internet,
that caught my attention. Very rare, as my attention span is quite limited. In
there, "1984" was mentioned in passing. And it got me to thinking how much of
Orwell's "science fiction" has already come to pass. We just don't realize it.

There's an old cliche, about frogs, that I'm sure everyone knows. If a frog,
or in this case, "us" had been placed into a pot of warm water in 1948, and
the temperature raised a single degree each year, it's quite possible we have
been boiled by now. Or at least look as red as your average lobster. How
easily we, as a society, or even as individuals succumb to that which is often
perpetrated upon us ...er.... slowly. Change is only relative to "yesterday".
"Tomorrow" seems only to be the same as "today". Yesterday becomes tomorrow.
Did today even exist. We must have missed it. Oh well, it doesn't matter. Same
is, as same was, as same will be. Right.?.

In Orwell's "1984" book, he envisioned a mostly faceless numbed-down/dumbed-down
"society" of hapless dronelike people living their lives in a sorta spaced out
status of tranquilized nothingness. Unwilling or unable to see how low they have
sunk and how "brainwashed" they'd all become. Brainwashed by "Big Brother".

He was Orwell's envisionment of the Government. An all-seeing and all-controling
entity that reached into everyone's home and business with pervasive ever on
Video Camera's constantly monitoring everyone. Everywhere. And to compliment the
"See You" environment that everyone was subjected to, there was the other half:

"See Me" ... ie: Big Brother's incessant TV screen in everyone's face at home
and workplaces, broadcasting the contorted "truths and news" as the Government
wished the citizenry to accept it. And they did, as gospel. For they had nothing
else to see nor hear. The real Gospel had long-since been banned or burned. And
the schools were taught by similarly burnt-out/dumbed-down dimwits conditioned
by Big Brother to churn out nothing but clones of their teachers diminishment.

It was a sad book/movie and most everyone who read/saw it quickly dissmissed it
as "I would never let that happen to me. I am too smart. Too wise. Too free".

So here we are now, in the next millenium, way after Orwell's "1984":

Our Cable TV's relentlessly spewing forth gutter programming; R & X rated
sitcoms; ditto and worse soap operas; and clones of Opra. Virtually all "news"
programs are from the same fake scripts, provided by the Government or by
those underhanded manipulators skilled at spin and damage control. The Truth(s)
is(are) very difficult to ferret out. Newspapers no longer print them either.

Schools certainly don't "educate" real knowledge anymore. For if they did, we
would see High School graduates that could at least, read and write. But they
cannot. And nobody seems to care. Sports and Billiards. Bread and Circus's.

Prior to Orwell's 1964 era, drugs were pretty taboo. Everywhere. Unthinkable.
People were wise enough to avoid such pitfalls and addictions. Nowadays, drugs
seem to be the norm. An ever increasing percentage of our youth engages in one
form of hard drugs or another. Alcohol(ism) is rampant among them too, perhaps
as an "escape" -or- an "entry" into/onto the drug merrygoround. Encouraged by
Movie Culture; TV Culture; Peer Pressure; MTV; and Rock-n-Rap "Music". They are
the new generations. And they have been richly taught/groomed by the previous
generation of equally retarded misfits. Junkies growing up to teach. As junkies.

Welfareism has become Big Brother's Big Business. Encourage it in every way
imaginable. The caseworker/socialworker industry. Subsidize those voters.!.
Give these misfits, something/someone to "practice" their otherwise worthless
"skills" upon: The homeless. And give the homeless lotsa money with which to
perpetuate their drug addictions. For that's now officially an "illness" and
worthy of Big Brtther's benevolent monetary handouts. What a Circus.!.

Dumbed-down/Numbed-down. You see it everywhere. Our once great and free markets
and institutions have become whatever Big Brother wishes them to be. Tools. To
further the agenda of manipulation and control. Of everyone. Everywhere. 1984.?.
Hey.!. We're well beyond that.

Waitaminute !! you say. .. Where is the "other half": Big Brother's all-invasive
Video Camera or whatever it was on everybody's wall and desk, watching our every
move ?? Allowing Big Brother to see and know our every thought and every action.
It didn't happen. No way. We are too smart. Too wise. Too free. To ever have or
allow Big Brother to place such a device in our home. In our office. No way.!.

And the Government realized that. The people are indeed, too smart, or skeptical
to ever allow such placement. So Big Brother found another way. A better way. A
way far more subtle, and far more reaching. Invasive. Dependable. Trusted. And
what's even more incredible, the Governemnet found a way to make the people
actually WANT this monster in their midst. The people would even PAY to have
this Trojan Horse, welcomed within their lives. In their living rooms. In their
bedrooms. Upon their desks. In their kitchens. Everywhere, to be convenient. So
necessary that we cannot live without it. Or at least, prefer not-to. Love it.!.

And in their offices as well. Talk about "Productivity Enhancements". Wow. But
whose productivity.?. Why, Big Brother's productivity, if the truth be known.
For this new information gathering device of Big Brother's is the biggest leap
forward in people monitoring that has ever come down the pike. And what's more
it can even supplement if not exceed the trash deliverance of Cable TV when it
comes to delivering another drug of choice. Corrupting kids and adults and
addicting them mercilously to its grip: Pornography. Now it can be obtained by
the youngest. At home. At school. In the Library. Even at Work. For free.

We have become a modern Society Under Surveillance. Unwittingly. Unknowingly.
By a devious device never imagined by Orwell. He would have laughed and called
it far too incredible or silly to be worthy of science fiction. Nor of his book.
Even Orwell would assure you: "I'm not be so stupid as to allow such intrusion."

Well, you probably have guessed by now, what has brought mostly all of what
Orwell predicted as "1984" to become a final reality. Or worse. We just don't
realize it yet. Another degree or two, and our immersion as hapless frogs will
be complete. History. Yesterday. Today. Tomorrow. Does it matter.?.

What.!. You haven't guessed what it is yet.?. Here's a clue: Originally it was
one of our greatest military secrets. Used for secure and cryptic communications
within the militray. Then expanded to government agencies. Then allowed to be
accessed by selected research institutions and Universities. Then expanded to
a worldwide network. Then, around 1994: Given to the people. By Big Brother.
For the people's "enlightenment" and pleasure. And education. And brainwashing.
And snooping. By Big Brother.

Today, we call it the "Internet"... Welcomed into our lives. Everywhere. Free.?.
Or do we pay dearly for access: $15/month. Or more. Or worse. Think about it.

Cordially -- ThaiGold"


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

lamprey_65Pandagold#497843/11/2001; 10:57:39

http://biz.yahoo.com/p/p/pal.html

"I mentioned Stillwater (SWC) some time ago. This is the only real platinum/paladium mine in NA."

Not true, I'm afraid. North American Palladium, Ltd. - listed on the AMEX last October (Ticker PAL). Large open-pit mine in Canada with newly upgraded palladium resources...see link above for details.

lamprey_65Gold Weekly#497853/11/2001; 10:58:38

Breakout...confirmed this week? Stay tuned.
Old YellerChippin' at Greenie's pedestal#497863/11/2001; 12:13:53

http://www.wnd.com/news/article.asp?ARTICLE_ID=21997

Speaking of 1984,look at this little peek at the background and current antics of our great protectors,the FED.

Change begins at the margins,boys.Don't look back'something may be gaining on you.

auspec@ Christian#497873/11/2001; 12:21:44

Thank you for your insight! That is the exact question of the year. Is GW going to be the dragon slayer or is he part of the dragon? Appearances are "everything" and I'm betting he will find a way to APPEAR to be slaying the dragon. That means a higher US$ POG, but still capped wherever it can feasibly be accomplished. Where is that point?
You left out the major land grab and control of various natural resources angle in your recent message. These are part and parcel of a preditorily engineered gold/resource liquidation "sale". Let's see who gets control of what entity, South Africa for example. This works BOTH ways, incredibly! The POG takes off and the hedgers are vulnerable to the banks. The POG continues down and the cash poor companies cannot survive. Who picks up all these pieces? Always grateful for your posts, Christian.

Would like to throw in an extraneous comment regarding silver. The POS is kept in synch with the POG. WHY? Is it because the manipulators are afraid the people will THINK of silver as "money" again, or because the manipulators KNOW what silver actually is and always has been? Watch what they do and take the cue from their actions. Obviously silver is NOT just another commodity!

Hello to C.M., B.F., $hifty, Henri, The FAMOUS CB2, and ALL!

lamprey_65Contrary Investor - March#497883/11/2001; 12:45:58

http://www.contraryinvestor.com/mo.htm

Enjoy
megatrongold/palladium junior#497893/11/2001; 12:58:43

Yes SWC did have some technical difficulties homing in on the vein. (When you have to tunnel 18km through a mountain to get to a vein 30 feet wide problems could occur!) Even so they did lots of forward selling and capped thier short to medium term profits, but farther out it gets very juicy if/when the russians ever default. If anyone is interested in covering both gold and palladium bases with the obvious amount of risk attached look at Geomaque in the TSE. They released results from the latest drilling on the Marathon property in Ontario and have an excellent potential 1 million+ ounce open-pit not to mention 2 operating gold mines in mexico and honduras. Excellent and experienced managers and geologists. DD
John Doepandagold - friday volumes#497903/11/2001; 13:58:42

Not all charts among the gold sector stocks that were driven down tell the same story. Some look OK, but others don't. Pull up HM or SWC on a 10 day price/volume chart, e.g., bigcharts.com. The fast and wide price movement in the last half hour Friday just doesn't correlate with the previous weeks' volume history for these shares. Maybe these stocks were reactively "placed" lower, without the expected volume, because one of the major hedgers were being dumped in a defensive move.

Of course, if I were going to try and reprice the sector down, I'd wait until late Friday when all the longs have had their fills and there's little else but new sell stops sitting out there (even though the majority of the market had already been dumped MUCH earlier in the day, while gold shares had been rising or at least steady). It still appears to me a manipulation to make sure gold shares wouldn't show high relative strength on Friday.

FWIW.

lamprey_65John Doe#497913/11/2001; 14:08:21

Many of the major golds have been under accumulation since late November/early December. I believe there were several probable reasons for price drops -

1. End-of-week profit taking, inevitable in a fast moving market.
2. Running of stops (accumulators wanting more shares on the cheap).
3. Yes, masking the strength in gold shares, but not just to keep others out --- but to allow for cheaper purchases by the big players.

JP Morgan is saying $340 gold this year. Looks to me like "THEY" have decided it's going to happen, might as well profit from it.

All Aboard!

Pandagold(No Subject)#497923/11/2001; 14:43:10

lamprey: I suppose I should have qualified myself more. Even SWC is a small cap in the business compared with South Africa and Russia. I should have used the word 'significant'
producer. PAL is considerably smaller than SWC - I guess about half its size.

I am not much into the silver metals, I am primarily a gold man - though that could change. But if I did I would tend to look at South Africa. In fact Harmony, a company which I follow very strongly is looking into this area.

I had taken my facts as it being the only signifcant producer from Yahoo some time ago when I first took notice of the rise in the platinum group metals

Business Summary
Stillwater Mining Company mines, processes, and refines palladium, platinum and associated metals (platinum group metals or PGMs) from a geological formation in southern Montana known as the J-M Reef.

<<<The J-M Reef is the only known significant source of platinum group metals outside South Africa and Russia>>>

lamprey_65This is not an insignificant producer....#497933/11/2001; 14:53:10

http://www.napalladium.com/mineopset.html

"Following an extensive exploration program completed in 1999, and a detailed feasibility study completed in May 2000, the company embarked on a $208 million expansion program which will expand ore production to 15,000 tonnes per day, and triple annual palladium production to 250,000 ounces, or 5% of the world's annual supply."

Oh, no position - although I am watching it.

geEuro Changeover & Physical Gold Market#497943/11/2001; 15:02:27

"On January 1, 1999, the euro became the single currency for EU member states. Their national currencies are, in effect, subdivisions of the euro. National notes and coins will stay in use only until March 2002, when they will be withdrawn permanently and replaced by the euro".

I begin to wonder whether EU shall force the physical gold market before the Euro changeover is completed?

Pandagoldlamprey PAL/SWC#497953/11/2001; 15:24:38

Well, I will keep my eye on it, as I have done with SWC. Though, as I have said, I am a gold man. One thing I did notice was that they had similar chart patterns. I got a comparison (overlay).

As I mentioned that it surprised me that with the price of the metal reaching for the moon and beyond the price was way off its highs for the year.

megatronPandagold#497963/11/2001; 16:00:53

You may be interested to know that the Canadian gov't has substantial securities holdings and use them to 'our' countries 'advantage' when them deem it critical/required.
This could include 'shorting' indexes or selling gold itself. Just a thought.

R PowellA little recognition and possible outcome#497973/11/2001; 16:17:28

Maria Bartaromo ended her Sunday afternoon Market Watch program by listing a few analysts' stock picks for the coming week. One was Newmont Mining. Maria said, "John Murphy chose Newmont Mining looking at gold prices surging."
Also the IBD's whole commodities report concerned precious metals, mostly gold. The commodity coverage in the IBD and WSJ is always pitifully small and often not very informative but at least they acknowledged that POG is stirring. The IBD dated Monday is on the news stand on Sat. It's fun to buy Mon.'s paper dated March 12 on Sat, March 10. Didn't buy the Barron's as it's too costly for what miserly attention they give to commodities.
I believe the lease rates will tell the story this coming week. If they remain strong, I can't see how in the world spot and the futures will be restrained. Those that sold call options will have to cover (hedge) lose potential by buying the future position. If you've sold someone the right to but at say $280/ounce then you've got to buy the future's (same month as option) at 280 to cover the potential loses when POG goes above 280. The option sellers know this and already have orders placed to cover the potential damage from call options sold.
This options sold/futures bought to cover is just one tiny example of an extremely intricate paper game but, in this case, will trigger buy orders in a rising market. This paper market will not "burn" as it is settled in currency. Positions vastly in excess of underlying supplies is the common situation in most all markets traded as commodities. What is unique to gold is that many years' production has been sold in a shorter time period. This is another situation altogether. These short sellers are the ones who are caught as they can not cover with any money hedging system. They may have been hedging so that they can "profit" enough in the coming POG upsurge to get enough currency to buy the physical needed for repayment. If so, no matter how high POG becomes, they will have the money to buy the physical if it does exist for sale somewhere. IMHO there will be sellers at say $500/ounce, and more sellers at $1000/oz and more at $2000/oz, etc. The squeeze may be unbelievable and some may not survive but I don't see any massive defaults as some predict. But as someone (Zelotes?) just suggested, this could be the one to make us rich enough so that "not enough" money never bothers us again in this lifetime. That would be nice.
As always, this is just one poor man's opinion.
Rich

auspecOrville Goldenbacher-- Surveillance Society#497983/11/2001; 16:20:37

Thanks, O.G for the ThaiGold post on Big Brother operations. 1984 was a long time ago and few people realize the extent of Govt intrusion within our lives. I have yet to finish a book by Grant R. jeffrey called "Surveillance Society", appropriately. I will just list a few items of interest from the book's chapter called "Project Echelon, A Global Surveillance System":

"Echelon is the most ambitious intelligence effort in history and was launched bu the U.S. National Security Agency {NSA} following WOrld War 11. Their goal was to create a truly global spy system, code-named Echelon, a top-secret Anglo-American project, which would be able to capture and analyze every phone call, fax, Internet, radio, and telex message throughout the world. It was originally established and now maintained by five western nations: the United States, United Kingdom, Canada, Australia, and New Zealand." {my note-- what do all these nations have in common? Yes, indeed!}

"Now they use their technology cooperatively, spying on the communications of citizens of other member countries in order to escape the legal prohibition against spying on the private communications of their own citizens. They each intercept and gather electronic signals from almost every telephone call, fax, and email message throughout the world every day." END

These intercepts are picked up by sophisticated super computers and analyzed for "key" words and content. There is a voice recognition component so that an individual voice can be identified and tracked. A phone caller can be identified and tracked to his EXACT location within a few seconds. An intricate satellite system is used as part of Echelon.

We are so far past 1984, more like 2084. This message is likely being flagged simply because of the word Echelon, if nothing else [Hi guys!}. Our computer chats, web sites visited, etc., it's all there for the intrusion. Little is hidden. Just thought I would make your day.
Best to ALL

Max RabbitzObservations from a new Poster#497993/11/2001; 16:32:02

Hello, I'm a first time poster, having followed this site for a little more than a year. I've had something of a change in values, from mining stocks to the physical and now look forward to lower gold prices even though I'd like to see free markets prevail for the unhedged mines and others. So, MK, do your part and keep the doors to the castle vault wide open....flood the market!!! For all those thinking about buying at the last minute, I had a hard time placing an order for German Marks last Friday morning....I got a busy signal for over an hour.

I feel Trail Guide, MK, and others are right in that there is not a horde of "Black Gold" out there and look forward to the next installment of TG's "Gold in Antiquity" series. As a result of my owning older gold coins, I've developed an interest in coins from antiquity and found an interesting web site about Roman & Greek coins. It's an extensive site and mostly deals with silver and bronze type coins, as the gold are rare. Most interesting is the page on what these coins were worth back and how they were used.

http://www.geocities.com/Athens/Acropolis/6193/worth.html

The precious metals content in these coins was debased over time as the empire declined. Metal alloys used more base metals, or silver was only used on the surface. The amount of inflation seems related to the decline in the empire. A 7g gold Aureus now goes for $500 at least.

Black Blade. His energy posts have been some of the best, and I follow several E&P boards. He gives the big picture. People are in denial.

ORO. Sometimes he has gone way over my head (I'm an entomologist not economist) but often seems spot on. With regard to the latest discussion on government power I tend to side with him. I especially the Bernard Connolly speech he posted a few days ago, even though those on this side of the pond haven't always agreed with the British definition of liberty. As our founding fathers realized, Government is necessary but needs to be restrained to prevent tyranny. Democratic governments are no exception. There is always a price to be paid when we ask the government to help and there are always unscrupulous men to take advantage of this. Europe does worry me. They have a long history of centralized power and limited individual rights, from both Church and State. These forces are strong and getting stronger here too. I just finished a chilling book titled "Feeling Your Pain: The Explosion and Abuse of Government Power in the Clinton-Gore Years" by James Bovard. The last 40 pages are references.

http://www.amazon.com/exec/obidos/search-handle-form/104-8131302-4584757

I get the feeling that there was no controlling legal authority for anything they wanted to do. The power is there to grab for anyone with enough ambition. I suspect we are in the bread and circuses phase of the empire. Buy gold.

Mr GreshamGeorge Ure on "How do you hide Depression II?"#498003/11/2001; 16:40:32

http://www.urbansurvival.com/week.htm

"What you come up with, if you're a skeptic like me, is a picture of a Fed that has bet the farm that by clever manipulation of money in circulation and interest rates, they will be able to hide a Depression right in front of everyone's noses - and we can have a Depression in plain sight without anyone being the wiser."

"But, back to the original question" Inflationary, or Deflationary in this Depression?

"Inflationary is the answer because it is the only way out. If the government is really clever (and they are) and is really lucky (which they have been so far) they will be able to use two control surfaces, interest rates and money in circulation, to inflate things fast enough so that the Depression won't be obvious. "

"What is going on now (I believe) at the Fed is this: They're thinking that if they can just play liquidity right, and interest right, they should be able to come through the aftermath of the biggest blow off market in history, with a simple period of stagflation. The liquidity in the system will pump up the prices (not values mind you, but prices) of stocks. Meantime, the interest rates being low enough should spur consumption just enough to keep things from falling over the edge."

Ray PattenMax Rabbitz...VAT on Gold?#498013/11/2001; 16:53:11

Max Rabbitz, can you tell us when the 7% Value Added Tax on Gold is supposed to expire. When it does, it could help our new Gold bull a lot.
beestingWeird Gold Shareprice Movement Last Half Hour Friday.#498023/11/2001; 17:04:54

Thanks to everyone who responded to my original post Friday afternoon, on the above topic.
IMHO Sir Nickel62's # 49774 this morning seems like the most plausible answer, from his post:

<<THIS IS A CONFLICT OF INTEREST STORY FOLKS and it concerns GOLD!

Scotia Capital downgrades pretty much the entire gold sector during a time of very high
gold lease rates! Why a conflict of interest? ScotiaMocatta, their brethren is into leasing,
selling forward, and other derivatives. They also work closely with central banks! So
while Scotia Mocatta is having a hard time with high lease rates, their partners in crime
Scotia Capital downgrades a myriad of gold shares (some to the rarely used SELL
category)!

BTW/ you did notice which stock they downgraded to a SELL? Homestake - HM, HM is
the one that lead this charge in November from its bottom of nearly 3 9/16 !! It's the best
performer. So they downgrade HM the best performer to a sell and they downgrade
Barrick's, one of he world's BIGGEST gold hedgers from a Strong buy to a buy. BTW/
Barricks, ABX was one of the worst performers in the last couple of gold share waves.>>End of Repost.

Now, here is something else I have thought about for a long time,concerning shares:
All of those major Gold producers that lost value in the last 15 minutes of trading Friday have "Millions" of shares issued. I think when these shares are issued they are not all dumped on the market at the same time, especially in a depressed market(Gold) as it would depress prices even further.(laws of supply & demand) I think whoever underwrites(Brokerage Firms) these issues keeps a huge inventory of unsold shares in their accounts and tries to sell them off as the supply & demand of market forces allows. When there is a day such as Friday(POG up $5.00) these underwriters "feed" the buyers previously unsold shares, as fast as the buyers will buy them. I think at the end of the day Friday those shares being sold were from brokerage house accounts just enough sold to overwhelm the buyers.

Bottom Line:
Somebody doesn't want mainstream to know what's going on in the Gold sector yet. We Watch Together....beesting.

Mr GreshamMplsBear on the wealth transfer ahead#498033/11/2001; 17:06:16

http://www.bearforum.com/cgi-bin/bbs.pl?read=121316

This guy is, I believe, a "young" Salvadoran (in Minneapolis) on BearForum who says he's doing very well shorting the Nasdaq stocks and putting his profits into gold and gold stocks. I really like the thoughtful personality that shows through his writing...

"I think that an inflationary policy carries some large unique risks as inflation is very hard to manage and it could easily spin out of control causing panic and possible social chaos or collapse. I think the only thing that can be done at this point is to attempt to keep the calm amongst the population and try to extend the debt reduction process over a long period of time in order to avoid panics. I see the government taking the first steps in that direction with the bankruptcy modifications they are trying to pass. When the majority of the country is in such a precarious debt situation as it is now, allowing debt to be forgiven outright carries an enormous systemic risk, as the institutions that have issued this debt could simply collapse with the weight of the defaults. ...

"If the institutions collapse, there would be massive chaos as the people owning the debt would attempt to withdraw funds from the institutions just like what happened in the early 30s. By securing the debt with the new bankruptcy laws they are attempting to give assurance to those who own the debt that their money will still be there, in order to avoid panic and a run on the banks. ...

"I guess the most viable option might be to extend the debt reduction process to maybe a decade or two in order to give the debtors enought time to work their debt off and ameliorate the immediate pain. This would cause a long painful stagnation similar to what Japan has. Of course that solution would have to be accompanied by policy to somehow force or motivate the debtors to reduce the debt instead of carrying it or increasing it by just continuing with their spending habit. ..."

Mr G: Hanging on to your wealth across a huge upheaval -- and we now realize after some two years of chatting here that few of us knew what protectable wealth actually WAS two years ago. How can one protect what he doesn't recognize, or if he doesn't know from what direction the threat comes?

Cavan ManPOG#498043/11/2001; 17:08:34

We're up .30 and lease rates are steady.

Went to the le Ballet today and saw "Coppelia". I don't know about this "surveillance society" business but, we all should weep for those (Coppelia) days. Good evening....CM

Cavan Manhttp://www.bloomberg.com#498053/11/2001; 17:15:23

Look at the headline regarding Japanese growth. .8 vs .6???; must be a slow news night. Gee, that's pretty good eh? CHINA LEADS ASIA NEXT 100 YEARS.
Mr GreshamOff to the Races#498063/11/2001; 17:32:21

http://www.kitco.com/charts/livegold.html

Starting right in Sydney...

(Actually, anytime I don't see that familiar plunge downward in EVERY 24-hour period, my eyes pop wide open in amazement! Don't yours...?)

adminRay Patten, All: The VAT and Ordering Gold from USAGOLD if You Live in Europe, Canada or Australia #498073/11/2001; 17:37:16

In our due diligence for exporting gold from the U.S. to customers in Europe, Canada and Australia. We have thus far found the following:

1. In Canada: There is no Goods and Services Tax (GST) on contemporary pure gold coins .995 or better. (Maple Leaf, Australian Nugget and Austrian Philharmonic) There is a GST on lesser purity items. Still trying to learn more from our customs contacts there.

2. In Australia: there is a 10% VAT on gold of any kind or description without exception. Still trying to learn more from our customs contacts there.

3. In Europe: There is no VAT tax on contemporary gold coins of .900 purity or better, or on older gold coins (dated 1800 or later) that trade at less than 80% over melt value. The effective date for lifting the VAT is January, 2000.

USAGOLD/Centennial Precious Metals customers in these countries have the option of taking delivery of their gold or keeping it in storage at a highly reputable safe-storage facility associated with us for nearly 20 years. We are happy to discuss options and strategies with current and prospective clientele in any of these countries in which we are now prepared to offer our services.

On most gold items there are no customs and duties restrictions in any of these countries. Ordering gold from USAGOLD/Centennial Precious Metals is as easy as buying it in your own country and you might is some cases find our pricing a bit better.

Our Canadian toll free number = 800-294-9462

Our European toll free number = 00-800-2760-2760
(assuming Sprint has taken care of some minor problems we had last week. If you are having problems reaching us please call us at 303-393-0322 collect, or we will discount your purchase to cover the phone call if you dial direct).

We are working on an Australian toll free number, and we hope it won't be much longer and we'll be ready to go there.

We are proud to offer these services to our international clientele. It's been a long pull to get it up and running. As far as we can determine, we are the first U.S. based retail gold firm to go international thus being able to work with our fellow gold advocates and owners in Europe, Canada and Australia. We hope to expand these services elsewhere during the course of the year.

We would like to thank all who have participated in building this site over the years along with all the people who have ordered gold from us. It is you who have made this possible. As suggested earlier today, we have dedicated ourselves to making this site even more successful in the years to come and pledge to plow back some of the profits in order to build it to our mutual advantage for the future. There is little doubt that we all realize how much we have learned here -- we have only just begun. . . . . .

--- the Management

PandagoldRay Patten#498083/11/2001; 17:41:58

There is no vat on gold bullion now, the UK has fallen in line with the rest of Europe
HenriHi auspec#498093/11/2001; 17:41:58

Good to see you here again.
HenriHi auspec#498103/11/2001; 17:42:28

Good to see you here again.
Tree in the ForestHow smart is the cabal?#498113/11/2001; 17:49:42

From GE:

(Deadeye)
Mar 11, 17:52
(Wisebeard & Ross) " Are Cabal smart or stupid?"
They certainly are rich and powerful and presumed
smart but has their greed exceeded their smart?
Remember LTC Hedge Fund was made up of the smartest
people in the world and they went bust when their
derrivatives got out of control. Could the cabal
have gone from smart to stupid?

Me: Wouldn't it be ironic if the cabal, in attempting to dumb down our educational system, wound up giving their own children an inferior education? While private schools will always be better than public, the teachers in those schools and the poeple who write their textbooks aren't any better than the rest of us "riff raff". Teaching quality has declined markedly in recent years and while the best private schools are undoubtedly better, we could be witnessing a new generation of dumbed down cabal. That should give us some satisfaction!

R PowellMax Rabbitz#498123/11/2001; 17:52:54

Hello and welcome,
You stated, "I've had something of a change in values, from mining stocks to the physical and now look forward to lower gold prices even though I'd like to see free markets prevail for the unhedged miners and others."
Are I correct in thinking that you see lower POG as a result of the markets NOT being free? If so, then we'll continue to watch the battle between manipulation and free markets. I believe it's going to be intense. It may also be that Michael is right in thinking that the new administration won't continue past policies regarding this market control. No one person or group is smart enough or allknowing enough to ever be allowed that power. Maybe in heaven (but not here) and that remains to be seen.
If there is another reason for your outlook of a lower POG, please elaborate. There will be profit taking along the way if/when POG rises but I don't think it's up high enough for that yet.
Glad to see the Aussies aren't selling into Friday's gains, at least not yet.
Rich

Ray PattenCavan Man...#4981303/11/01; 18:00:09

Please tell us where you can get gold lease rates this early in the evening. Thanks in advance.
R PowellSo far so good#4981403/11/01; 18:03:32

We're two hours into trading in Sydney and POG is still up just a little. I'll feel better in an hour when POG arrives safely in Hong Kong away from the forward selling Australian miners.
Rich

Cavan ManRay Patten#4981503/11/01; 18:12:51

I get it at the kitco site but I believe you can access better info at lbma.org although I do not know how to read the columns. There are three and I know not which is AU.
Cavan Manray patten#4981603/11/01; 18:15:44

http://www.kitco.com/market/LFrate.html

Here you go.
Cavan ManTrail Guide#4981703/11/01; 18:20:13

Can you explain why lease rates are in backwardization at relatively high rates?
Ray Pattengold lease rates...#4981803/11/01; 18:42:35

I believe that the Kitco and LBMA rates are from Friday.
Orville GoldenbacherGold lease rate maker's#4981903/11/01; 18:50:13

http://finance.yahoo.com/m2?u

I think they are either still sleeping, or pretending to be
asleep.

how 'bout the nikkei, -2.7%

megatronred ink alert!#4982003/11/01; 19:09:21

Look at the last link. Boy those Asian tigers are starting to look like toothless old farm cats.
R PowellPOG#4982103/11/01; 19:23:44

Up $1.30
Chris PowellBucky's 22 1/2-year metals cycle forecasts "perfect storm" in gold#4982203/11/01; 19:24:37

http://groups.yahoo.com/group/gata/message/711

Latest GATA dispatch.

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.

Tree in the ForestR Powell, Mr. Gresham#4982303/11/01; 19:36:29

Thank you for your excellent posts tonite. Very informative and stimulating. I have also read Trail Guides latest, and his post ties in nicely, Rich, with your assertion that there will be sellers all the way up, physical sellers anyway. JP Morgan is echoing TG's assertion that Comex paper prices will remain well controlled below $360. I had the impression that this move up in physical would be sudden and explosive. TG gave me the impression that there would be a meeting and poof, POG at $3000. No chance to get in for those not already invested in gold. Now he seems to be indicating that this scenario has been modified. If physical gold separates slowly from Comex prices there will indeed be physical available all the way up, ie no lock limit up. Of course, I guess it depends on what TG means by "slowly". I never got the impression that he is 'hyper' so hopefully he is talking about many months! <grin>

If this new information from TG is correct, then I am forced to change my previous thoughts of how things would go down. I previously posited that silver would 'pop' first and then gold. Strong hands would ride silver up and then switch to gold. Now I have to modify this idea slightly. You have to look at how I see this. Three of the smartest, saviest, wealthiest insiders on this planet have invested heavily in silver. One in physical silver and the other two in silver mines. From my point of view, this makes absolutely no sense if gold is going to be where the action is. From my viewpoint, they must have some angle. Now take a look at this. This is the control that "TPTB" has over these markets:

1) Control over paper gold price through Comex.
2) Control over physical gold price thru CB sales/leases.
3) Control over paper silver price through Comex.

That's it. Notice what is missing. They have no control over the physical silver price. CBs don't hold enough silver anymore to control its price. The famous US billion oz. silver reserve is gone. And the silver shortage is supposedly worse than gold. TPTB has the control to move Comex gold prices to $340 or so and then "manage" physical prices slowly higher up and away. But with silver, they can hold the paper price, but there's not a thing they can do to "manage" the physical price. While physical gold moves "slowly" up, physical silver can explode. Lock limit up (figuratively speaking of course, not on the exchanges). With this scenario, they can both start moving around the same time but silver will move faster. Now, we have seen extremes in the gold to silver price ratio. We all know it's out of whack. Currently at 60:1. What's to prevent it from going to the other extreme? If gold moves "slowly" while physical silver explodes, could we eventually see physical silver hit $100 while physical gold moves slowly past $600? Based on what TG is saying, this might happen. That's 6:1. In a slow moving gold market where physical continues to trade, the chance for a silver to gold swap at a very beneficial ratio becomes possible. Now, under this scenario, it still makes sense for the three wealthiest, saviest insiders on the planet to invest in silver. It also means that my previous assertion that this upcoming BOE sale on Wednesday would be the last, is wrong. The third series of auctions would go forward as part of the program to manage the physical part of the gold market. Any thoughts on my latest theory? I have to keep changing it but it's fun to theorize!

Cavan ManPOG#4982403/11/01; 19:48:01

now up $1.90 at bulliondesk.com.
Cavan Man"A tisket a tasket..."#4982503/11/01; 19:50:47

whither Euro in a basket?
JMBChris Powell#4982603/11/01; 19:53:00

Thank you for the outstanding contribution by Mr.Derek K. Van Artsdalen...and to think he's another Texan. They're coming out of the woodwork!
Sierra MadreTwo meanings of "LIQUIDITY" as used in the Press...#4982703/11/01; 19:54:58

FWIW...after many years, I think I have figured out that "liquidity" is a word used with two different meanings, and this leads to confusion for the reader.

Some writers will use "liquidity" to mean availability of money; a "need for additional liquidity" means that more money should be printed up or be available at banks, or put into circulation. The Fed is usually called on to relieve this need. When the Fed "adds liquidity" it is really producing more fiat money, increasing the money supply. That is one meaning of "liquidity".

Then there is the other meaning of this term "liquidity". It is used for instance, in connection with a stock, as in "stock X has great liquidity"; or again, "liquidity is drying up in the corporate bond market". Here the meaning does not refer to the amount of money in circulation, or to a possible "lack of money" to carry out transactions. It refers to whether a large number of BUYERS exists for a stock at any given moment, in a given price range; or to whether there is, or is not, a large number of buyers of bonds in a given price range.

One has to interpret financial writers, to discover what they are actually refering to when they mention "liquidity", because of these two different meanings with which the term is used.

So, there can be an enormous increase in the amount of money in circulation, and yet, if there are no buyers or very few buyers of stocks, or of bonds, then we will hear of "lack of liquidity". The money can be there in huge quantities, but if there are no buyers at a given price, then there is "no liquidity" for stocks, or bonds, or real estate, or what have you.

On a final note, "liquidity" - that is buyers - can come back into the market again at a given price or price level, if the VALUE of money has fallen through inflation of the money supply, thus making the PRICES acceptable to the buyers - voila! - "liquidity" is restored. Yes, because the Dollar is worth less!

Is that what the Fed is desperately trying to do, make the Dollar worth less - inflating - to keep prices jacked up? I suspect it is.

Games that Central Banks play.

Thanks for reading.

Sierra

R PowellPOG and Nikkei#4982803/11/01; 20:04:50

POG is up $2.80
Nikkei is down over 300 points

R PowellTree in the Forest#4982903/11/01; 20:22:31

We know that the Buffet, Soros and Gates all have investments in silver but I would not assume that they don't hold gold positions just because we haven't heard of them. It was only a lawsuit against Philbro, the commodity trading office of soloman Smith Barney (I think) that brought Buffets' silver buying to the light of day and then only after he had accumulated 89 million ounces!
I fully agree that silver has all the fundamental makings of a huge move up. Supply/demand situation is even tighter than that of gold and the potential profits for a poorly financed trader like myself are even greater than those in gold. When it really hits the fan, I believe many will remember that both metals are money and there is a limited (perhaps unknown but limited) amount available. As many are fond of saying, gold and silver can not be printed into existence.
Now to get POG safely through London and hope George W has called of the hammer gold team or better yet, watch them give it their best shot and fail!
I'm certainly getting a great time out of this.
Rich

megatrongold/silver ratio#4983003/11/01; 20:22:44

There are some titanic forces aligned behind silver for all to see. If the three titans of American business can line up behind a commodity in broad daylight and still said commodity goes DOWN! can there be any other logical explanation than there are GREATER titanic forces aligned against them on the other side?
It is the ONLY explanation!

Do you think there are 200 million Indian women watching CNBC going short silver when they hear Gates bought into PAA?

If the three top bookies in the world ALL bet on the same team to win the superbowl there can be only 2 conclusions;

1-they all realize that it is a superior team and would be stupid to bet against it
2-they colluded to convince the 'ignorrati' and would subsequently go 'short' This a completely untenable scenario with regards to the big three in silver. Thier investments are too diverse and expensive(mines)

They have the most expensive 'insider' information money can buy.

There are HUGE PLAYERS lined up against silver which is going to make the blast that much larger. I can't wait.

SHIFTYPeriodic Ponzi Update PPU#4983103/11/01; 20:22:48

http://home.columbus.rr.com/rossl/gold.htm

Nasdaq 2,052.78 + Dow 10,644.62 = 12,697.40 divide by 2 = 6348.70 Ponzi

Up 56.73 from last week.

Thank you RossL for the link!

$hifty

Stocks, Lies, and Ticker TapeTree In The Forest#4983203/11/01; 20:23:00

It is intriguing, the interest in silver taken by some big hitters. There is so much silver out there now, for such a long time at such a cheap price- I can't see it achieving a 6:1 with gold. At $100/oz Ag, all silver mines would be back in production. What has prevented me from jumping any deeper into silver is the declining industrial use (i.e.photography). I don't see much of a need for silver as money either. Anyone who has ever had to lug a full bag of Ag anywhere, is a convert to gold!
SteveHShe sure is moving around...#4983303/11/01; 20:24:50

Gold in the last few minutes has been a moving target. Now at $2.60., was $2.30, then $2.80, now...$2.60....

Shall our hopes be false again or are things about to reverse course in a most significant way. WE have been burned so much by these antics, that it is now just entertainment.

On with the show!

Artie Farkle(No Subject)#4983403/11/01; 20:29:38

274.40 : )
Cavan Man(No Subject)#4983503/11/01; 20:33:22

POG

Let's keep POG in proper perspective. Things must be tough when we are cheering for +$2.8. However, I am very encouraged by the consistent and steady strength of POG. Usually, Aussie mines sell onite and then Comex finishes the work. Lately, that hasn't been the case. No amount of TA can substitute for a lack of liquidity. There are absolutely NO markets of any sort that are in any way normal or conventional as defined by historical norm or standard. History is not a good guide now. Good luck...CM
Cavan ManUSAGOLD#4983603/11/01; 20:37:25

MK, Do current events remind you in any way of the London Gold Pool days? How 'bout a lesson d'histoire?

How was that BF bio please? Receently read a bio of GC Marshall and looking for something else good. Best...CM

Orville Goldenbachernikkei#4983703/11/01; 20:50:13

http://finance.yahoo.com/m2?u

wonder why nikkei hasn't updated since 9:01, -3%? i checked cnn and bloomberg, they have not been updated since 9:01 either.
SteveHHit the refresh button on your browser#4983803/11/01; 20:53:09

that might help:

Japan Nikkei 225 ^N225 10:31PM 12222.18 -417.62 -3.31%

LeighTree in the Forest#4983903/11/01; 20:55:29

Does anyone remember reading something many months ago on one of the forums about a long-planned cabal plot regarding gold - something to the effect that they were going to let gold run for a while, then outlaw it?

How about the passage in the Bible about how in the last days people would be casting their gold into the streets as worthless, and their silver would be taken from them? (confiscated, maybe?)

Gold is money, and it's a threat to dictatorial governments. (Yes, gold is used industrially also, but not nearly to the same extent as silver.) Silver, though, is critical to many industries and is superb at killing germs (perhaps even germs that have become immune to antibiotics). It has an entire "life" apart from any monetary use.

What I'm wondering is whether the Silver Trio knows something we don't. Gold use can be outlawed with the stroke of a dictator's pen, but silver is an absolute necessity.

Orville GoldenbacherSteveH, nikkei#4984003/11/01; 20:56:35

Thanks, looks like they fixed it.
turkey hunter@ Leigh Bible passages #4984103/11/01; 21:17:08

Hello. I think the reason they toss their gold and silver in the street is because they can't buy their way out with their money. The King of kings and the Lord of lords the One and only True Judge can't be bought off like human judges. Read the context of those passages. It is their time to be punished and no amount of money will change their fate.
megatrondumb analogy/silver#4984203/11/01; 21:32:02

Scenario:

Football Game. Superbowl. One team is the 72 Dolphins. The other team is made up of unknowns, which are 'keyed' out to the viewing audience but can be seen by the Dolphin players. Lets assume there is no fix.

In play after play you see the dolphins execute brilliantly,
only to be stopped short of the goal line on every march downfield, by the invisible 'team'

When the invisible 'team' is on offence they score at will, making the Dolphins coverage, the greatest ever, look semi-pro.

You come to the startling realization that there is either a 'greater' team than the best ever, or the dolphins are throwing the game.

Who could put together an 'unknown' team that could best the best EASILY???? Would they not have been scouted? Who is the coach because that kind of effort/skill level cannot be uncoached.

To assemble a 'team' that can consistently beat the greatest ever is no small feat my friends, no small feat.

Somebody got to the Dolphins or there is one hell of a coach and farm team operating somewhere outside of the regular 'football' world.

Chris PowellSharp spikes down haven't stuck#4984303/11/01; 21:54:55

The nightly chart over at Kitco shows
two very sharp and deep spikes down
in the POG tonight that haven't stuck,
as if something is trying to put the
genie back in the bottle but he keeps
getting out. No doubt they'll have a
friendlier environment in London and
New York in a few hours. Still, I
think the chart says they're in trouble.

Gandalf the WhiteKITCO is famous for ERRORS !#4984403/11/01; 22:06:51

Chris Powell (03/11/01; 21:54:55MT - usagold.com msg#: 49843) Sharp spikes down haven't stuck
====
That may be because there were not such down SPIKES !!!
AND there was not any, as shown in my Crystal Ball !
<;-)

Topazadmin, R Patten re: VAT - MrG#498453/11/2001; 22:37:28

admin, Ray.
Those VAT quotes you gave, I think you confused Canada and Australia.
The GST here (OZ) is applied to NON 24K Au @ 10% but by claiming input credits, this can be effectively reduced to 10% of the buy/sell spread. If you require more info on the GST in OZ, I'll gladly forward the 10 container loads of printed info - if you'll pay the freight. <wink>
Mr Gresham,
That spike every day is quite curious, no?
I think it's a forum reader in Hong-Kong slowly but surely swapping his Paper for Physical. Thats it! It's WOLAVKA.
If the Gold market wasn't so damn serious it'd be great fun......nah!...it IS great fun!

TopazSteveH (03/11/01; 20:24:50MT - usagold.com msg#: 49833)#498463/11/2001; 23:05:20

G'day Steve,
Exactly!
Curious TG is now entertaining thoughts of an "upmove" to $360ish.
Now Barrick is reportedly just "above water" at $360 while a lot of the Aussies are in deep doo-doo as of NOW!
The Barrick/Bush connection has NOT gone un-noticed!

working-kirk"You Can't Eat Gold!"#498473/12/2001; 0:10:13

You keep saying:

"You can't eat gold!" Implying it will be totally useless if there is a total collapse. Well, I want to answer that for you and other who might have some doubt about the usefulness of gold.

First by saying "You can't eat gold" you make it sound like that it the end of the argument. But let's consider using the argument in a different way.

"You can eat shelter!"
"You can't eat health care"
"You can't eat the things for protection and self defense like guns or how to fight"
"You can't eat art."

And I am sure if you think about it there are other you you need but you "can't eat."

Yet, while using your argument if times get "interesting!" You can use gold to buy those things and other you will need. And people while hoarding food will find the other thing hard to hoard.

Take shelter. If the market crash, there will be a lot of people who have extra real estate they don't need but will need to raise money. I don't own a house. And since I was born born there is a chance I will never get to own a house like many of my generation, unlike their parents. But If I offer what little gold I have to someone who has two houses I do stand an outside chance of becoming a homeowner. Since the market has crashed there will be a lot of sellers and not a lot of buyers. In normal times it hard enough to sell something. And if a house has been on the market long enough a seller will consider all offers no matter how low or outrageous. I can't say what the price of gold may be. Probably very high but I suspect the gold cartel has more than one trick up its sleeve to keep the price down. I offer all I have in gold. I may have to search but I do think eventually someone will accept. They will accept for these reasons:

1.) He may be able to use the gold to buy some of the other need I explain later.
2.) He sells at a loss (face value of the gold) but sometimes people sell at a loss to help someone who is worthy and to get them out of a jam. I knew a friend who
was able to buy a house far under market value. A 100,000 house for $25,000.
The owner was going through a very messy divorce and wanted to just dump any
possible asset so the wife didn't get it. He sold the house to the tenant renting it, a young person like me working hard but not making much and like me not likely ever to afford a house. But the owner said better him than the wife. In other words he was worthy and the owner was willing to help him become a home owner.
3.) He sells because he receives no other others. There have been people so frustrated they say "For two cents, I'll sell this dump and have done so!"

I am sure you can think of other case where I find someone willing to sell me a home for my gold. So let's talk about health care.

If we are in a situation, where people won't sell food for gold, that means we are facing a massive famine. And if there is famine, there is sickness. You will want to see a doctor. And so will everybody else.

What makes you different? If there is a famine, everyone will have no food. If there is hyperinflation, money is worthless. What if you offered the doctor gold. The doctor will consider it. He know he can trade health care for food but there may be other things he/she wants Since gold is true money, it makes it easy for the doctor to accept. And since gold can be easily hidden, he get to keep the money (gold)

But you argue, most people don't recognize gold. How will he determine its value?
First, learning about gold is not the hardest thing to do. You as a seller can teach him the value.

Second, I think more people will recognize gold, and know the value and be more willing to accept it whether we have hyperinflation or depression. The factor in getting people to recognize them will be the new Saccawa gold coin. You and I know
that bronze coin as well as being ugly is worthless. But the general public doesn't know. At at first glance the color between the two is close enough so a person who is curious will recognize true gold. Of course you could argue the government printed up those tokens as a way of getting the public to reject gold. My counter-arguement is Whenever the government tried to do one thing it usually has the opposite effect. I think of the Saccawa coin as a training tool for the public. Just as a gold prospector must first learn of iron pyrite or fool's gold so he know real gold, I think the public will learn about real gold from this foolish coin.

Next, I am probably the first person to argue "A gun is totally useless because you can't eat it. And you shouldn't learn how to fight for the same reason. Well, you don't want to eat a gun. It the OTHER PERSON you want to die of lead poisoning!"

A gun is a mean of self defense and you have a moral right to defend yourself however the means. Just because people misuse guns doesn't mean you should forsake a means of self defense. Now in a crisis situation you are now going to sell your guns for gold. And this brings to mind one of the best movies I ever since and it is revenant since it talks about gold. The movie I am talking about is "The Treasure Of Sierra Madre" with Humphrey Bogart as a down and oil hobo and Walkter Houston as a grizzled old prospector.

The scene is where the Bogie and Friends(?) get surrounded by a bunch of bandits. The bandits say: "You don't want those rusty guns, Why don't you give us those piece of junk! Throw them down. We give you a shiny watch for your guns

Bogie answer "You keep you watch! We'll keep ours guns!" And then he shoots a hole in the watch

The movie and scene also contains the classic line "Badges! No don't have no badgesz! We don't need no stinkin' badgezs!"

While the movie is GREAT! I also recommend reading the book. One thing the book covers that the movie doesn't is the relationship between oil and gold. (Otherwise, why was Bogie on that oil rig?)

The movie and book leads to my last thing you can't eat, and that is art. What is the purpose of art? According to Ayn Rand, It is to refresh the soul. Now I plan on making my own art, but to those who socked away enough gold, you may want to consider using your gold to buy art in the trying times to come. I promise you'll get it at bargain basement prices like you are getting your gold now.

Last, there is one other thing that you can't eat but I think is absolutely necessary.

"You can't eat freedom." One of the things that lead me to gold is a lot of Liberian writers like Robert Ringer and Harry Browne in talking about the need for freedom, talk about gold and how the two are linked. I can't only give you a personal example.

As you know, the country has stopped saving. The banks in all honesty are not encouraging saving. I have always been a saver. But I can only save in small amounts. Usually my saving account has been under a $100.00 Well, I am a small saver but at least I am a saver. I noticed one day my (former) bank starting charging me all sorts of service fees where they did not before. Usually $3.00 or so. Now that may not be much to you, but having been broke too many times, it is a lot for me. I figured any bank that needs to take what little money I have is a bank in trouble! So I closed my little bank account and starting saving in gold. A few months later I hear all sort of rumors on the internet that this bank is having serious trouble with its derivatives. I am glad I got out of that bank. But what the gold does it give me freedom in this way.

I am working at a job I hate. So I quit! Decided to practice my trumpet. Now most musicians starve. I wasn't starving For every month I could cash in some gold I saved to pay my bills. I wasn't happy I sold my gold at the all time low but at least I wasn't being robbed by the bank nor had I suffered at bad as those who brought as the top of the NASDAQ bubble. But having the freedom to pursue a dream was worth the price I price in gold. Now that I spend it all, I gotten another job and will try to save some more and hopefully get the chance. But even if the gold price takes off without me it was worth it weight and more in gold. Freedom always is.


So to those who tell you, you can't eat gold, tell them the other things you can't eat.

NetkingStocks, Lies, and Ticker Tape - Silver#498483/12/2001; 0:14:34

Stocks, Lies, and Ticker Tape; One of the basic factors though is the time delay between in converting the 'below ground' supply into the 'above ground' supply. Do some study on this and...eureka!
working-kirkYou can't eat gold#498493/12/2001; 0:15:13

By the way, if any of you have access to other gold forums like kitco, or gold eagle, can you post the following:
"You Can't Eat gold!" there for me since I don't have access and I think like goldbugs would like to read it.

Netkingworking-kirk . . .#498503/12/2001; 0:20:07

working-kirk - "...but Gold can eat you!" (There's some food for thought if you'll pardon the pun)
Mr GreshamTopaz, Tree#498513/12/2001; 1:09:59

"It IS fun!" -- I decided I had to be either making money or having fun here, so I guess the good and frolicsome company of fellow POGsters has kept me satisfied these two years. But I do admit to entertaining fantasies of having BOTH, and in the near future. (Hey -- if I or she'd won the Lotto in '84, I might be in Oz now with a Kiwi lass, who very wisely has not waited for my return...)

Tree -- "managing" the markets -- I just imagine they've kept the players from defecting with the promise of a starting fun loud enough for them all to hear (and continued access to other insider bennies). And their belief in fast market plays (a la currency trades) makes them think physical is reachable, until they actually try...

Mr GreshamOro, working-kirk#498523/12/2001; 1:22:02

Oro -- Thinking about you. I did not mean to make cyberspace a more precarious environment for communication than it already is.

working-kirk--

You wrote my thoughts exactly on that idiotic "You can't eat gold..." saying. But -- let 'em say it. More for us for awhile longer, and they'll have to learn it the hard way anyway.

I have a friend in Dorchester who got his house from HUD for $25,000 by walking a couple miles through a blizzard that shut down Boston and he was the only one who showed up and the only bidder. That one's an edge I'm happy to leave entirely to you someday, so good luck if you give it a try!

TopazMr G, kirk.#498533/12/2001; 2:26:08

Hey Mr G,
...and you'd have been most welcome here! (that would have made about 5 Goldbugs in the place)
Those NZ lasses eh!
If ida had me druthers..ah! t'is in Kiwi ida been,
drop-dead georgeous she was - and Daddy owned a Marina.
If it hada beena PUB! there-da been no holdin me....nah!
Hi Kirk,
As long as we're not talking about "chowin down" on a 400 ouncer - there's a goodly bit of evidence of Gold consumption (the eating kind) on the Net. Put ORMUS or Annunaki (sp) in the search engine.
It's a long walk from 24K Gold to 24K Horn-blower mate.
(unsolicited advise from a 10 yr, 2 karat Harp man) <smile>

Mr GreshamHellzapoppin'#498543/12/2001; 2:33:12

http://www.bearforum.com/cgi-bin/bbs.pl?read=121577

Morgan Stanley has a 9 am announcement. Japan is tanking, and MS may be involved in derivatives blowup.

Indonesian rupiah is sinking -- again.

SteveHPerspective on stress#498553/12/2001; 4:53:15

ORO,

Any thoughts as to the amount of stress from this point downward for the Nasdaq and the Nikkei? I can't help but think that from this point forward we are going to start seeing exponential financial stress and fractal events of a market breaking nature start to occur, such as possible gold shortages, extra large repos at the Fed., possibly bullion banks or Hedge funds or both announcing large losses or failures (Morgan S. due to announce something at 9:00am or so the rumor flies.) and much more. What do you think?

Steve

SteveHPerspective on stress (cont.)#498563/12/2001; 5:13:22

http://www.lowrisk.com/nasdaq-1929.htm

Well, isn't that link interesting? 252 days and Nasdaq holds the record for intensity, defined as quickest drop in quickest time, but to equal 1929, she must continue until 90% of the value is gone. In the case of 1929 it was 20 plus years later before the DOW reached its high of 29'.
CanuckLast humour before the start of hectic week#498573/12/2001; 5:52:35

http://www.fallstreet.com

From Warren Buffet, commenting on entering into the 'new economy':

""We have embraced the 21st century by entering such cutting-edge industries as brick,
carpet, insulation and paint. Try to control your excitement."

PandagoldBut you CAN eat gold, #498583/12/2001; 6:11:36

It is eaten for its medicinal properties. The human body actually contains some gold (minute) even among those that don't eat it
Max RabbitzR Powell and looking forward to lower POG#498593/12/2001; 7:02:15

http://www.geocities.com/Athens/Acropolis/6193/worth.html

I need to clarify. Six months ago I was focused on mining stocks and felt badly when the POG declined. Now when the POG declines I see that I can buy it cheaper!!! I would rather the price stay low so that I can accumlate more. I have no idea what the POG will be tomorrow, but know it is manipulated and that this can not last. I still own mining stock, but believe the manipulators want to drive the weakest close to bankruptcy, take over and force more hedgeing to drive POG down further, and continue this cycle until they own all the miners. Then they will allow free gold. However, they are likely to lose control first and create horrific economic problems for us all. These are the same greedy "geniuses" who thought up LTCM.

I've reposted, this time properly I hope, the link to the Ancient Roman Coin site by Doug Smith. He does not sell coins, do appraisals, or advertise. He just maintains this site for the love of these old coins. Looking forward to Trail Guide's next installment.

Stocks, Lies, and Ticker TapeNetking,.......of silver dreams#4986003/12/01; 07:04:18

I have given that thought as well. What concerns me about the above ground supply of silver is all the items it has been used for, industrial, coinage, even silver service. The silver service that was special to grandma 20 years ago that she couldn't part with at $50/oz then....today after languishing around for years at less than $7...then is "worth" $100/oz....many who have since inherited grandmas silver service would readily sell it to try to bail out there over spending, over speculating stock habit. I again refer you to the dearth of full bags of 90% silver out there. There is no shortage of 90%.

Even if the ratio does reach 6 to 1 (which I can't see happening- even with massive manipulation) above ground sources are far more plentiful than you think. As the price rises more above ground silver will find its way back into the stream. Also, Ag is a gangue mineral in many operations. At such low prices and concentrations it may not be economically feasible to refine these tailings, but those tailings piles exist above ground, near and dear to the mine owners heart- waiting for its day.

If it does happen with silver, it will be in the form of an extreme spike that will plummet nearly as fast. Even that wonderful event would have its downside to anyone who has to move their full bags - anywhere! (I know I would send my bag a packing at that price! All the better to help me buy another piece of the sun!)

Cavan ManAsia Pulp and Paper#4986103/12/01; 07:46:28

Default: $12 Billion. Not good.
SHIFTYCNBC / GOLD#4986203/12/01; 08:14:35

The CNBC spin heads said they would talk about gold this hour.

$hifty

Leighturkey hunter#4986303/12/01; 08:31:19

After reading your post, I went back to my Bible to re-read the passage I quoted, and WHAT DID I FIND! It is GOLD that will be removed during the last days, not silver! Here's the quote:

Ezekiel 7:19
They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the Lord; they shall not satisfy their souls, neither fill their bowels (you can't eat gold): because it is the stumblingblock of their iniquity.

At this humiliating point I don't want to venture to comment!

turkey hunterWest Point Gold#4986403/12/01; 08:41:15

http://www.fms.treas.gov/gold/index.html

I just got off the phone with US Headquarters Mint concerning the West Point Gold. Last summer the gold there was listed as 54,067,331,379. Now in January 2001 the same
amount is there except it is "Custodial Gold". I thought that gold might have changed hands, this is why I called. The explanation given me was that it is held as an asset now and not for coinage. The US still owns it. They must be getting a lot of calls on it.

I also asked what PEF means. They said, Public Enterprise Fund. Here is the phone number for HQ Mint if anyone wants to call. (202)354-7222

JourneymanQuantitative Red#4986503/12/01; 08:51:37

http://quote.yahoo.com/m2?u

Of the 44 world-wide stock exchanges covered by the "Yahoo! Finance - Major World Indices"
page (link in header), only three -- or about seven percent -- show positive. And
barely positive at that. As follows:

SYMBOL TIME LAST TRADE CHANGE
China Shanghai Composite ^SSEC 2:00AM 2012.552 +0.892 +0.04%
New Zealand NZSE 40 ^NZ40 Mar 11 2075.51 +2.46 +0.12%
Pakistan Karachi 100 ^KSE 6:32AM 1421.22 +1.50 +0.11%

Slovakia isn't open.

Regards, j.

Cavan ManDROOY web site#4986603/12/01; 09:06:31

Can't get in there. What's up?
Cavan ManLeigh#4986703/12/01; 09:08:54

Only the prayers of your heart (which are known) have everlasting value. All else, even gold and silver are worthless and will not buy you a ticket to eternal bliss.
TheStrangerA Little Good Publicity#4986803/12/01; 09:17:19

Gold seen in powerful rally
Analysts point to leasing rates, short-sellers
By Thom Calandra, FT MarketWatch.com
Last Update: 3:32 AM ET Mar 12, 2001


LONDON (FTMW) - This is make or break time for gold after a two-decade
decline for the precious metal.

"There are tremendous short positions in the market so it won't take much to
spark a massive rally," said Larry Edelson, a former European gold trader and
managing editor of Safe Money Report in Florida. An ounce of gold Monday in
Asia was selling for $273 and ounce, up $1.50. The metal has rallied this
month after descending to $255, with lending rates for the metal as high as 7
percent.

Lawrence Eagles, a commodities analyst at GNI Ltd. in London, said the
soaring lease rates, which are set in essence by central banks and other
large holders of the metal that lend gold to dealers, indicate a "tightness
in the market."

"To my mind there are lending institutions carrying on business as normal and
there is a large amount of short positions in the bullion market and they are
all looking to cover their positions, Eagles said. "And there isn't the
supply around."

Gold prices are getting a lift from institutions and producers that use
derivatives to forward-sell the metal. Such forward-selling by mining
companies such as North America's Barrick Gold (ABX) and South Africa's
Anglogold (AU) locked in higher prices during a miserable, multi-year stretch
of falling gold prices.

But as the price of the metal climbs, gold mining companies that hedge their
production in this way - as well as speculators who short-sell the metal in
hopes it will decline - must locate the physical metal for instant delivery.

Edelson and others cite resistance for the metal's price, whose major trading
markets are London and New York, at $283 an ounce, $291 an ounce and $305.
"Blasting through $301 would confirm that gold has bottomed and the 21-year
bear market is over," said Edelson, who says as an arbitrageur with
International Commodity Services in the early 1980s he traded as much as $175
million of bullion daily.

The Bank of England also may have assisted in gold's recent rally. The bank
is one of several European central banks that sell gold regularly. Last week,
it reduced its gold sales for the coming fiscal year by about 20 percent. The
final 25-ton gold sale in the bank's current series is set for Wednesday.

Eagles said the bank's reduction was a "minor factor." The Bank of England
has sold 250 tons since of the metal since fiscal year 1999. "Realistically,
the Europeans have an arrangement to sell 400 tons of gold a year for the
next five years," Eagles said.

The pact among European central banks is known as the September 1999
Agreement and was set to make the bank sales more visible to the gold market,
which has languished even with jewelry and industrial demand for the metal
rising in recent years. The Bank of Switzerland alone has a total of 1,300
tons of gold that it intends to sell, Eagles said.

Still, as author Peter Bernstein explains in his new book "The Power of
Gold," central banks for centuries have sold gold when the price was low and
hoarded the metal when the price was high.

FRONT PAGE NEWS
Pondering recovery in 2nd half of 2001
Several economists, including Jude Wanniski at Polyconomics Inc. in the
United States, blame the Federal Reserve for the languishing gold price.
Wanniski in a recent report said general price deflation across the American
economy - and the Federal Reserve's tight reins on the levels of money that
member banks release into that economy - are depressing gold prices.

Economics lesson

"The deflation can only be fixed by having the government indicate it wishes
to end it and also decide to re-balance the interests of dollar debtors and
dollar creditors by adding liquidity until the gold price signals an
appropriate level," Wanniski wrote.

Aside from the economics lesson, analysts say gold mining shares may be
poised for a powerful rise if gold's price moves higher. For each 1 percent
gain in the price of gold, gold mining shares generally move between 3
percent and 5 percent higher.



Edelson points out that unhedged companies such as North America's Homestake
Mining (HM) have seen their shares lead a recent rally. Homestake does not
forward-sell any of its gold production and so would have more to gain than
hedged producers.

"Remember, it won't take much buying to send gold shares through the roof,"
he said. "The entire gold mining sector is about $30 billion market cap. So
if just one tenth of 1 percent of the money coming out of equities scoop up
some mining shares, the sky is the limit for mining shares, and gold bullion."

Indeed, many analysts expect the continued deflation of Nasdaq to boost gold
shares. The Philadelphia Gold and Silver Index of North American mining
shares already has risen steadily during Nasdaq's decline this winter to the
2,000 level. The mining index (XAU) , known as the XAU, has gained 19 percent
in the past month.

"Homestake, Agnico Eagle, Placer Dome (PDG) have clearly turned the corner on
the charts," said Edelson. "They have much higher to go."

Thom Calandra is Editor-in-Chief of CBS MarketWatch and FTMarketWatch

KnallgoldSector Watch: Gold's Alone in the Winner's Circle#4986903/12/01; 09:22:17

http://www.thestreet.com/_yahoo/markets/marketfeatures/1339832.html

"...One of the very few sectors on the upside was the defensive of all defensives -- gold. Typically, when investors are bailing on everything, they flee to safety. And they typically then like the cool, hard feel of gold. The Philadelphia Stock Exchange Gold & Silver Index was rising 1.7%. ..."

Gold is cool !

TheStrangerNewmont Interview Coming Up On CNBC during the next 30 Minutes#4987003/12/01; 09:32:07

Ronald Cambre, Chairman of Newmont, will be interviewed shortly.
OROGlearis - social costs and benefits#4987103/12/01; 09:41:56

Rothbard, in typical fashion, suggested that since individuals and voluntary organizations do a much better job in taking care of that chunk of the environment they own, it stands to reason that all "public" (read government) land be returned to the public, by the sale of all non-essential government property. Also, the sale of the open seas to the international public (obviously while preserving rights of way) would prove beneficial to fisheries and preservation of unique species. The main point being that there is a defined and particular owner with very specific values who can sue for damages done to his property, be it wildlife, fishing yields, etc., and can put a price on his ideological and other preferences by buying up land and waters that are environmentally valuable.

Instead of pitting Greenpeace against the industrial West, Greenpeace could have spent its time and effort on fund raising, education, and research in order to pick up Amazon rainforest, dolphin and seal rich coastal areas (where they can also raise funds by operating eco-tours).

With this approach, Greenpeace would have gained much support from industry and the more practically minded individuals who now see the enviro-political movement as a threat to their livelihood and even their life. (High functionaries in the Eco-movements, including Greenpeace, actually said outright that humans are a parasite on the Earth and should be "controlled", I guess that would be done with a human targeted "pesticide"??)

Private owners have a much higher degree of personal interest in their property than government officials can ever have. Most notably because of the prospects of leaving it for their progeny, down many generations in the future. Furthermore, where in government ideology must be tempered through the process of compromise with a very broad array of interests, it can remain pure within a private organization. Thus a forest with spotted owls would not be clear cut under one administration, and then put under a complete cutting ban under the next. A compromise with industry would also be practical, with the actual dangers in industrial exploitation of the particular parcel being the consideration, not a general Republican nonchalance, nor a Gore-ian far left "land with no people" prohibition against uses by industry and tourism.

In democratic systems, the time horizon of the politician is the next election on the short end, and his political career in his elected office on the long end. To a few, this means a full lifetime from the thirties to their late sixties. Rarely does this extend further, and the future is much less important than the current election and the issue of the day. For bureaucrats, time horizons are a matter of time between functional promotions, and the opportunity to go through the revolving door to industry, which leaves some 5-7 years of interest in the effect of decisions. This is much less than the considerations of the private individual.

As for other social benefits, in terms of income disparities, there is nothing more obvious than the generally much more charitable attitude of people who need not fight their government for keeping their income and property. People would also have to take responsibility for their charitable inclinations themselves rather than assume that the presence of a government program to address the issue means that it is taken care of.

Before social security, there were mutual assurance organizations in which about a third of Americans participated. Savings (before the Fed and government inflated money into unreliability) and insurance policies were the tools of the individuals not in mutual assurance organizations. These were all destroyed by social security, which reduced both incentives to save and the incomes from which savings could be obtained. Income taxation on insurance companies and on income from savings made people less willing to save, by reducing the return on savings, and provided incentives for people to become officially poor, so that they would not have to pay income taxes, estate taxes, etc. but instead could collect social security and medical benefits.

There is no particular reason that the same people who as politicians and bureaucrats were helpful and sympathetic towards your child's condition would be any less so had they been outside government. Quite contrary to this, one would expect them to have a deeper and more practical concern, and a much greater volume of resources at their disposal. Furthermore, they would no longer have to think in the mind bending legalese, nor be bound by red tape which perpetuates the outmoded, and prevents adoption of the new.

In short, I would doubt that the "social costs" you refer to would actually be such. Social costs are what government creates. Remember that a cost is to somebody. When the cost is to government, it means that society as a whole is bound by the decisions of a miniscule minority that passed the law and regulations now in effect some 20-30 years back, and are paid for by current people. Obviously, the costs to society are multiplied by the distance of time from decision to application, and from the guaranteed obsolescence of actual program operation this causes. How many had spent years advocating and lobbying for one or another deserving cause? Instead they could have spent this time in actual assistance, in creating and collecting resources. But government has the lions share of resources, and the deepest pockets. Thus effective care of an issue is expected (mistakenly) to come out of government, rather than from tax impoverished individuals.

C Northcote Parkinson, made a set of observations as to the nature of organizations; most notably that they drift towards decay. Organizational atrophy can be avoided in the private sector by switching from one charity, mutual organization, or company to another. As the Civil War demonstrated amply, such a choice is not available to people seeking to leave the jurisdiction of a government. The political switches in legislative and executive control are limited in effect by the persistence of the bulk of government in the form of the career eunuchs of the bureaucracy. These perpetuate the process of atrophy to levels of sheer carelessness, demoralization, and incompetence unimaginable to those who have not participated and done business with them (I have done both in two countries and can state with certainty that it has nothing to do with the particular society from which the people come, but only from the nature of the job).

So… no, there are no social costs to the free market. To the contrary, most social costs you are likely to be thinking of are the direct result of impoverishment by government extraction of resources from the public, or the results of government action in creating disincentives and roadblocks to solving and preventing social problems.

Tree in the ForestSLATT, Working-kirk#4987203/12/01; 09:43:20

Sir SLATT... hello. I have a question for you. If I had come to you around the time when platinum and palladium were selling for a hundred and something dollars (around half the price of gold) and had told you that they would shortly rally to the same price as gold and then higher than gold and then over one thousand dollars an oz. making gold look like garbage and gold holders look like fools who missed the boat, would you have believed me? Markets have a way of surprising people both on the downs