USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
Black BladeGuatemala Considers Dollarization#5287205/01/01; 00:21:17

Guatemala's Highest Court Delays the Adoption of the U.S. Dollar As the National Currency


GUATEMALA CITY (AP) -- Banks are closing early to stockpile greenbacks. Ads champion the value of new bank accounts in dollars. And some stores have two sets of price tags ready to go. Guatemala was gearing up to become the fourth Latin American country to adopt the U.S. dollar on Tuesday, when a law was scheduled to go into force allowing residents to demand their paychecks in greenbacks, open bank accounts in dollars and settle bills using any foreign currency.

Black Blade: Here we go again.

Black BladeCanadians should consider dollarization - TD Bank#528735/1/01; 00:24:32


TORONTO, April 24 (Reuters) - Canadians should seriously consider using the U.S. dollar as their currency in about 10 years, but in the meantime Canada should adopt policies to support the weak Canadian dollar, Toronto Dominion Bank economists said in a report released on Tuesday.

Black Blade: Monkey see - monkey do!

Black BladeCheney Pushes for Energy Development #528745/1/01; 00:31:23


TORONTO (AP) - Vice President Dick Cheney (news - web sites) warned on Monday that the whole nation could face California-style blackouts as he outlined a national energy strategy relying heavily on oil, natural gas, coal and nuclear power development - but not conservation. ``The aim here is efficiency, not austerity,'' Cheney told editors and publishers at The Associated Press annual meeting. The nation cannot ``simply conserve or ration our way out of the situation we're in."

Black Blade: This from Cheney's Energy Task Force. It's not a matter of "if" but "when." Just imagine the toll on the economy as the grid reaches capacity and ultimately collapses.

Black BladeFERC order opens debate on Calif. fees for power sales#528755/1/01; 00:36:39


WASHINGTON, April 30 (Reuters) - As part of last week's order to revamp the troubled California wholesale power market, the U.S. Federal Energy Regulatory Commission (FERC) proposed a fee on power sales in the state as a way to repay generators owed billions of dollars by financially strapped utilities.

Black Blade: Looks like rates are going up yet again. I mentioned in the past that as Kommissar Davis kept tinkering with the ute market it was only a matter of time before fees or taxes would be forcefully imposed. Check Mate!

Old YellerMurphy's latest musings#528765/1/01; 00:38:37

It would appear as if the ugly step-sisters are having a bit of a divergent outlook on the wisdom of hedging.There is also an extended version of the Kelvin Williams quote Randy refered to yesterday.
Old Yeller(No Subject)#528775/1/01; 00:40:12

Thanks to kapex at the kitco forum for the link.
Black BladeAmericans Feel the Pinch of Rising Energy Costs#528785/1/01; 00:42:44

Poll Shows Widespread Concerns About Impact of California Energy


COLUMBUS, Ohio, April 30 /PRNewswire/ -- More and more Americans are feeling the pain of increased energy costs, and many are worried that the California energy crisis will have a direct effect on them. Those are the findings of a national poll released today by Americans for Balanced Energy Choices (ABEC), a national non-profit, non-partisan organization that promotes an ongoing dialogue with community leaders in support of a balanced national energy policy. According to the survey (conducted April 4 - 11, 2001), 87 percent of those responding said that they have experienced an increase in household energy expenditures over the past year. The majority (59%) said that they had seen personal household energy expenditures increase a ``great deal.''

Black Blade: However, they can take comfort in that higher energy rates are not in the CPI core rate of inflation and that inflation is benign. Just wait until summer. Reality is finally overcoming mindless chatter. Gold should soon do very well in this environment.

Black BladeMexican miner Grupo Mexico's Q1 hit by copper prices#528795/1/01; 00:48:30

MEXICO CITY, April 30 (Reuters) - High energy costs and weaker copper prices are expected to cut into first-quarter profits at Mexican copper giant Grupo Mexico , offsetting gains from restructuring at subsidiaries. The question, however, is how much these factors will affect the bottom line at the world's third-largest copper producer.

Black Blade: As per this weekends discussion on high energy costs and the effect on Gold and Copper production. Just another example. Expect mine closures and lower output constricting supply.

LafisrapSilver, anecdotal info#528805/1/01; 01:14:45

Excerpt from the link:
From a Café member:

As a matter of interest, I deal with a currency and precious metals dealer in Vancouver who I trust highly. Last week I went in to see him to buy some more silver bars. He had only 1 on hand, he said that it is almost impossible to buy 100oz bars at spot, if I want to spend .40-.50cents more than spot per ounce, he could find more. I called today and he said that after 10 calls, he was only able to source 2 more bars at this time.

Me: MK, Randy, can you tell us if this info supported by the activities at CPM? What might be the premium on 100oz bars of gold purchased through CPM? Interesting thought: if there is no premium levied on physical gold/silver obtained through COMEX, it may stand to reason that the available physical gold/silver that might be obtained through COMEX will soon all be gone.

Another excerpt from same link:
Also he advised me that the Royal Canadian Mint has NO silver. They have suspended production of Silver Maple Leafs until they buy more silver. No projected date for that!

Draw your own conclusions from that info.

Black BladeDJ Old Chinese Ship,600MT Silver Found Off S Korea's W Coast#528815/1/01; 01:15:10


Citing Chinese and Japanese historical data, Jon said the 2,134-ton ship, leased by the Ching dynasty from Britain, was sunk by Japanese aerial bombing in 1894, with 936 Ching soldiers and 600 metric tons of silver ingots on board.

Black Blade: The 1894 Japanese Air Force? Hmmm…

Old YellerLook Alan,you've flooded the basement#528825/1/01; 02:02:07

Quote from Mr. Corrigan:

"If the miners are accurately foreshadowing the metal this means big things for the Yellow Dog and-since we have looked at it in USD terms-possibly for the Greenback.

All I can say to that is;Woof Woof!

Netking@Black Blade - Yet another silver find. . . yawn . . .zzzz #528835/1/01; 02:30:39

My reaction to that is "Yeah right!"...This is probably just more fiction about silver like all the tons of the stuff coming here from China at the moment(Yeah right again!)
On this note obviously, silver is coming from sources we can't indentify, from leasing. Whether it is from The Central Banks of the Phillipenes, or Red China, is immaterial. This so called "source" is highly uneconomic and unsustainable. But take a look for substantiation on the China flows sources, and you won't see squat. These China stories are made up by GFMS, and I challenge them to verify their statements. It's always, they know privately, but can't back it up publicly. It's pure "manure", just like their inventory figures. To think the Silver Association publishes GFMS's work as fact, is a disgrace. If they can't back up what they claim to be is true, just assume what they're saying is garbage, and we'll all be safe.

Old YellerMr. Moto's report from the M3 swamp#528845/1/01; 02:41:02

Snippet from the link:

"Any significant rise in the addition of system credit has,for several years,tested very well against the rise in prices of US equity share indices,ie,the activity is either concurrent or very near to that.The relationship is,in fact,undebniable.And what better way to hoodwink American consumers into a secure sentiment,delving deeper into debt,than by arranging support for the big time object of their affection--the stock market."

"I,personally,am never attracted tp participate in share investment under these types of conditions.Should yopu desire to do so'so should you also be aware.The ride is fast and the trail crooked."

I like the looks of our trail a whole lot better.

Black BladeSKIP THE GOV'T NUMBERS - IT'S A RECESSION#528855/1/01; 05:24:54


If all the statistical trickery was taken out of the way the government calculations inflation, GDP would have gone negative 1 percent - or maybe even 2 percent. As readers of this column know, the government is expert at reducing the amount of inflation in its figures.

Black Blade: As I have said for some time now. Good article by John Crudele of NY Post. He covers a lot of nice tidy info though he misses another voodoo statistic called "seasonality." A bit of truth is leaking into the mainstream media. We've been in a recession for at least the last couple of quarters. If the numbers were based on honest data then a lot of poor unsuspecting sheep wouldn't get sheared. This recession could intensify and last for years. Probably not much time left to pile into a "Gold" lifeboat.

JMBSo you think you have problems...#528865/1/01; 06:14:40


She's having a real bad hair day.
uponroofDROOY.....and the art of 'advertising'#528875/1/01; 06:45:06

Greetings people,

Just thought I'd stop in and offer my 2 bits on the DRD 'spike' last night. This has happened before, and coincidentally, after a previous negative/confusing quarterly report.

A skeptic might conclude that DRD has a purchasing dept. 'operator' who is instructed to buy shares well above market whenever public sentiment wanes, or bad/confusing news hits the waves. This only adds to the DRD 'mystique' which captivates far and wide. Further conjecture, down this sacrilegious path of DRD skeptisism, would include a few posters, with more than the typical vested interest in DRD, talking up the 'action', always on cue.

Sorry to sound so suspicious, merely offering another perspective. No offense to those who worship at the DRD shrine. As a shareholder, hope I'm wrong and DRD opens way up, but I doubt it.

Meanwhile, little KRY is jumping out of it's channel the last few days.

Eastman Kodak, who consumes 1/3? of the dispoasable silver market has an analyst meeting to detail digital strategy... (brace yourselves silver lovers).
It's Mayday in Europe and the liberals are protesting American capitalism, trashing McDonald's and Nike stores......if they only knew what is going on in the dollar/gold market.
Have a great day!

Galearis@Lafisrap on silver#528885/1/01; 09:12:10

The situation described in the James Joyce email would not be an unusual one in terms of price one pays for bullion. I am referring to the $.50 per ounce premium on 100 oz bars. Small coin dealers (etc.) DO regularly charge this for the 50 oz and 100 oz bars. Also for the crude 10ers. The "pretty" bars are premium added. In the east the average price situation for JM 999 fine wafers seems to be approximately $9.50CAN at $8.50CAN/ oz spot - up to $15CAN. Note, however, that price for small liquid wafers has been unchanged for over a year. One still pays $9.50CAN for $6.00CAN silver.

There is much variety in prices too. Novelty rounds that are outdated can be had in 100 oz lots at $7.34/oz (as of last weekend).

Nor is it particularly significant if one Vancouver dealer is running short. Many of these people have to rely on people walking in off the street with bullion they've had under their mattress (etc.); the small dealer does not buy, as a rule, from ScotiaMoccatta or other big bullion banks.


Carl HPositive Gold Articles#528895/1/01; 09:45:03

I was just thinking about all the bad press that gold gets these days. I was wondering if there is anyway that the participants in this forum could generate positive articles about gold? For example, I wonder if our host here has sufficient standing to generate press releases that might actually be read?

Anyone have any thoughts?

Carl HLack of Responses from Congressmen#528905/1/01; 09:48:35

I thought I would also post a comment here that I wrote to my senators, representative, as well as representative Paul of TX regarding James Turk's article. That was a week and a half ago. So far the only response I have received was from an auto responder.
JourneymanWhy Central Planning ALWAYS Fails (and Congressmen don't respond to your letters) @Carl H, ALL#528915/1/01; 10:40:14

Hi Carl H!

There's a good economic reason your Congressmen don't respond to your letters, as you titled your msg#: 52890
"Lack of Responses from Congressmen."

Strangely, it has to do with why central planning always fails.



See link!


Old YellerDollar/yen#528925/1/01; 11:09:43

Pretty impressive rally over the last two days.The old USDX appears to be caught in the crossfire.
Peter Asher@ Black Blade & Ironman#528935/1/01; 11:31:57

All along the river, from Portland, Ore., to
British Columbia, utility companies, aluminum
makers and farmers have joined to help save
California — but at a staggering price.
Charging whatever California's dysfunctional
power market will bear, people in this narrow
stretch of the Northwest have created a kind
of Kuwait along the Columbia.

Peter AsherLink#528945/1/01; 11:38:26

That should help (:-)
Peter AsherCheney Promotes Increasing Supply as Energy Policy#528955/1/01; 11:47:55

But he said he would oppose any measure based on the premise that Americans now "live too well" or that people should "do more with less."
"The aim here is efficiency, not austerity," he said. "Conservation may be a sign of
personal virtue, but it is not a sufficient basis for a sound, comprehensive energy

FredBearCarl H (5/1/01; 09:48:35MT - msg#: 52890)#528965/1/01; 11:49:02

I think you'll have better luck if you write a letter. Congressmen do not respond to email generally.

This was my experience anyway.

Buena FeMAYDAY...MAYDAY....MAYDAY#528975/1/01; 12:06:48

Mayday......Mayday......come to my help Lord! The rich have defrauded the laborer of his pay! What the rich call wealth (US$) is just wood fibre......not real wealth-gold! Burn what they consider to be wealth.....and raise up your standard - a testiment to your promises to hear our cries (international day of Labor May 1st).........Mayday....Mayday

James 5:1-8

Netkinguponroof#528985/1/01; 12:44:10

What should we be braced for Sir? ...E.K. is passed it's "Use By" date much to Fuji's pleasure.
Read Mogan's link (per above)& weep...or better still contact our friends at Centennial Precious Metals with a purchase order!

Old YellerToday's comical understatement#528995/1/01; 12:44:56

Anglogold's Bobby Godsell's thoughts on his company's hedge book position;

"We've been fairly modest and conservative hedgers"

Sure Bobby,you and Munkey have been models of restraint in the dynamics of the gold market.

Randy (@ The Tower)Your reading assignment for today... "Understanding Gold" by Paul van Eeden#529005/1/01; 12:46:25

From the Gilded Opinion...

Understanding the gold price, why it is where it is, why it declined by 40% from February 1996 to August 1999, why the gold industry got slaughtered and why the hedge funds made out like bandits, requires us to look at several aspects of gold and the gold market. ...a proper analysis of the gold market, and an understanding of foreign exchange markets with the role played by derivatives, sheds light on the real factors that determine the gold price.

(click link to learn more)

Randy (@ The Tower)Did this one get by you the first time... "The Federal Reserve's Worst Nightmare" by James Turk#529015/1/01; 12:57:28

From the Gilded Opinion...
...the Fed has a another nightmare that is much worse than a stock market crash. I think there is a bigger problem that makes the Fed's governors wake up at night in a cold sweat. Remember that Alan Greenspan has already experienced one stock market crash. He was first appointed in August 1987. He already has hands-on experience in responding to a market melt-down, so another is probably deemed to be manageable.

I sincerely believe that he and his colleagues are not as concerned by a crash in stocks as they are by a crash in the Dollar.

I think this proposition will soon be put to a test, ...that the stock market will head higher in nominal Dollar terms, but not in purchasing power terms.
(click link to learn more)

Randy (@ The Tower)Have you earned your Gold Wings yet?#529025/1/01; 13:06:46

Read this page. Then you, too, can soar peacefully above the media's prevalent anti-gold propaganda.
Randy (@ The Tower)Even where they want it most, Mother Nature still won't "print gold"#529035/1/01; 13:32:06

As reported today by Bridge News, India's Ministry of Mines announced that national gold production for the month of March totaled less than a paltry 0.2 tonnes. (0.176 to be precise)

India's gold production during the past full year totaled less than 2 tonnes (again, 1.85 to be precise).

Lafisrap"Understanding Gold" by Paul van Eeden#529045/1/01; 13:38:20

Although the article contains much information, if you conduct your business in U.S. dollars this may be all you need/want to know:

The gold price is however dependent on the US dollar exchange rate and the US dollar exchange rate is determined by the amount of net foreign investment relative to the trade deficit.
[. . . ] when worldwide conditions change, and the perceived risk outside the United States diminishes, a considerable amount of foreign capital will leave the US. This will cause the dollar to decline and the dollar denominated price of
gold to rise.

LafisrapCOMEX gold and silver warehouse stocks-May 1#529055/1/01; 14:31:25

Slightly less than 4 percent of COMEX gold stocks were removed today. Total COMEX gold stcks now stand at 826,090 ounces.
R PowellTwo fer day#529065/1/01; 15:34:36

POG up a little right now- 5:30 pm here in Massachusetts. I just got finished working but it looks from the Kitco chart that POG at close was up. The mining stocks had a great day with the XAU up around 3%.
Lease rates were down. Of the three, I think the lease rates are the strongest indicator since higher rates should shut down the gold carry and apply pressure on the lenders to seek a return of the borrowed gold as opposed to a lease extention. Maybe we'll see them higher tomorrow.

auspecSilver Market tightness#5290705/01/01; 17:54:34

Hey Silver Guys

I have been 'following' VG Silver Peace Dollars over approximately the last 5 months with the following prices:

11-2000 $6.99 per
01-2001 $7.21 per
02-2001 $7.50 per
02-2001 $7.70 per {later in month}
04-2001 $8.25 per

Have yet to see a most recent price, but this 5 month period has shown approximately an %18 increase in these silver dollars. POS {paper} has declined during this time period so this speaks even MORE clearly. Several different sources have commented on the greater difficulty in finding supply of physical silver.
Get it while you can and wait them out!

slingshotPeace Dollars#5290805/01/01; 18:44:12

AUSPEC Msg.# 52907

According to Magazine COIN PRICES JULY 2001. Prices to be displayed till JULY 3, 2001. Peace Dollars are $8.00 in the Good Grade for common dates. In the Very Good Grade they are still $8.25 per coin. Now take a look at the MORGAN SILVER DOLLAR and COIN PRICES only list VERY GOOD GRADE and that starts at $11.00 per coin. Add at least $2.00 per coin at the dealer. It appears bullion is moving more than coins.

I have a good feeling about this and the price increases in the silver coin market is going to help GOLD. THEY have not made the connection between the shortage in silver coin/bullion to the cheap price of Gold which is what they will turn to when supplys of silver are exhausted. IMHO.

Turn Silver into Gold. Have to be Fast! Cause its not going to LAST! LOW PRICES THAT IS!


Hill Billy Mitchellauspec @ # 52907#5290905/01/01; 18:44:24

Re: Silver Market tightness

Sir auspec

I embarked upon accumulating PQ BU 1921 Morgans approximately 8 months ago. My goal (1,000 of these coins).

When I bought the first 200 coins I paid $9.50 each. I made a note for myself, "Will never see this price again."

A couple of months later, to my great surprise, I was able to purchase another 200 coins @ $9.25 each.

Two months later I picked up another 200 coins at $9.25 each.

Two months later I was notified that they were availible again @ $9.75 each. I sat on the notice for one day, then called to place an order for another 200 coins. Sorry they say but sold all coins the first day. Called back a week later and finally picked up another 100 coins @ $9.75 each.

Just three weeks ago I initiated contact and bid for 300 more coins. For the first time I was told that I could have 200 coins @ 9.75 each, but that delivery would be delayed(usually delivery was next day shipped.) They would not commit to the full 300 coin order. I now have 900 coins and am still looking hard for the last hundred for under $10.00. At this time it seems the price is around $11.50 - $12.00 each if you can find them.

The upward pressure in price is there, though not as dramatic as you have seen with the VG peace dollars but one thing is certain--supply is drying up.

Very respectfully,


slingshotCorrection last post#5291005/01/01; 18:53:39

Add $2.00 more to the price at the dealer.

Getting excited.

auspecSilver Coins#5291105/01/01; 20:09:14

slingshot & HBM #s52908 52909

In regards to the VG Morgan Silver Dollars, over the last 5 months they have been available at the same price as the VG Peace dollars to a .20c or so premium over the Peace. Have seen them range $7.50, $7.76, $8.25. This is such a tiny market that all of these will soon be gone at anywhere near these prices. We watch the supply dry up together, yes? My dealer said basically "we" {his company} in essence drives this market it is so small. These are unusually low prices for these coins {historically}. Seldom find them under $12 from what I am told.
Per my post 52907 and both of your posts, during the time period that these various coins have gone up the POS has gone DOWN approx 13% {$5 to $4.35 last 5 mos. approx.}. I was hoping to pick them up even cheaper, but not to be.
It is hard to pay too much premium for these coins if one is looking for simply ounces of Ag, but also hard to go wrong at these prices.
HBM--- Do you remember a post # that discussed some fencing directions? Much appreciated.
There are numerous theories as to switching from various categories of coins, bullion, stocks, but this bear has been so prolonged it has been the last thing on my mind. The rare coin market {ultra rarities} has been holding its own to mild appreciation these last few years. It is undoubtably tighter finding quality coins! The word ACCUMULATION springs to mind.
Thanks for your input, Gentlemen!

Tree in the ForestBob Leppo - long June gold on Comex#5291205/01/01; 20:22:18

Hi Bob. I saw your post a while ago and it has taken me a week to catch up. You mentioned that you were long June gold, I assume on the Comex. I cannot give you investment advice Bob, but I sure hope you know what you are doing. If you have studied this site, you should know that most of us advocate physical gold and some gold mining shares. The Comex is a pretty dangerous place to be right now. There are now 3 separate confirmations of a significant move down in gold price on Comex. A downward spike is a very possible end for this craziness in the gold market. Indications of this appeared first in a TA analysis made over on longwaves. The prediction there was a drop to $180. The second prediction came from JP Morgan who predicted a POG of $210 by June. And now, we have a third confirmation from Don_L over on GE who says that his option cube is indicating a drop is imminent. Of course you must do your own due diligence and make your own decisions. Just thought you might be interested in this info. Good luck whatever you decide.
RAPI know the price of fish is going up, but this is insane!#5291305/01/01; 20:30:40

"The judge wrote that while it is clear that the farmers face severe economic hardship, the threat to the
survival of the fish is greater."

Black BladeRAP#5291405/01/01; 21:21:49

Yep! That's just what we need in the west. More Carp ;-)
justamereBear@ All#5291505/01/01; 21:46:47

Just got off the phone with a trader friend who said that just coming over the Bloomberg wire was a report on a Lindsay speach that indicated that American individuals had spent 700 Billion more last year than they took in in after tax income.

Lets see, the tax cuts are for 100 billion. If we stop spending, in order to cut back a bit and just spend what we earn, never mind cut down on the debt a bit, the economy tanks, and employment falls, Etc Etc.

Whether the report is accurate or not, where are the exits?


Peter AsherjustamereBear msg#: 52915)#5291605/01/01; 22:03:26

I quick calc that @ $6000 per family!

Now, if 50% of the nations familys put $12,000 via 401-K et-al, into the spending hands of stock sellers, then the equation balances.

All AG & Co. need hope for is a simple encore, and the sham/scam continues. It's a simple game, as long as the input is kept running. (:-)

schippi Select Gold Wavelet in Lift Off#5291705/01/01; 22:45:21

POG, Wavelet and other Gold Indexes are ALL very STRONG.
justamereBearA bit long But here it is#5291805/01/01; 23:08:25

Not available

Look at that whitewash go on!!!!!!

Top Financial News

05/01 22:08
Low U.S. Savings Is Biggest Challenge to Economy, Lindsey Says
By John Cranford, Al Yoon and Heather Bandur

New York, May 1 (Bloomberg) -- Declining savings by Americans is the biggest problem facing the U.S. economy and will take the rest of this decade to reverse, said Lawrence Lindsey, chief economic adviser to President George W. Bush.

``Last year, the private sector spent $700 billion more than it earned after taxes,'' equal to 7 percent of gross domestic product, Lindsey said in a speech to the annual convention of the Society of American Business Writers and Editors in New York.

With the private savings rate falling to a minus 1 percent in the first quarter, the lowest since the Great Depression, Americans are ``going to have to save more,'' he said. That can't happen suddenly, or the drop in spending might ``precipitate a recession,'' Lindsey said. ``The process is a decade-long challenge for us.''

Lindsey said he wasn't particularly concerned about falling stock prices or slowing growth, and argued that the administration's tax-cut proposal is needed to ensure the economy keeps expanding. Although growth has slowed, ``the overall health of the economy is excellent,'' he said.

The Nasdaq Composite Index has fallen about 20 percent since Bush took office Jan. 20 and the Dow Jones Industrial Average was down as much as 11 percent before rebounding in April to show a 3 percent gain as of today.

`Monitoring the Situation'

``Obviously, we are monitoring the situation,'' he said. ``It wasn't a complete surprise'' that stocks have declined, given widespread reports of weak earnings, he said.

``I don't know if markets will go up or down from here,'' Lindsey said. ``America is the best place in the planet to invest. As long as that's the case, prospects for America are very, very good.''

To ensure that remains true, he said, the Bush administration will support the Federal Reserve's ``efforts to have maximum non- inflationary growth'' and promote free trade and free capital flows.

The administration has been pushing for tax breaks to help the economy rebound after growth slowed to a 1 percent annual rate in the last quarter of 2000 -- the weakest in 5 1/2 years -- and to boost manufacturing, which has been in a slump since August. The economy grew at a 2 percent rate in the first three months of 2001.

Lindsey said in the current economic environment, ``it's important to keep consumer spending up.'' That's why the administration wants part of its proposed tax cut effective immediately.

Tax-Cut Agreement

Earlier today, Bush and congressional Republicans reached agreement on an 11-year, $1.35 trillion tax cut, Senate Majority Leader Trent Lott said. The plan includes $100 billion in tax cuts to boost the economy this year, as well as $1.25 trillion in long- term tax benefits, he said. Lindsey declined to comment on the agreement, saying he didn't know enough about its specifics.

U.S. savings by individuals was a negative $74.3 billion in the first quarter, the Commerce Department reported last month, compared with negative $51.6 billion in the fourth quarter.

That put the savings rate, which weighs current income from wages, salaries, businesses and government payments against spending, at minus 1 percent for the first quarter. The savings rate improved to minus 0.8 percent in March from a minus 1 percent in February, the Commerce Department reported this week. Savings doesn't account for borrowed money, income from investments, or withdrawals from prior savings.

Money to cover the excess in spending by consumers and business over their savings has come from two sources: government surpluses, which amounted to about 3 percent of GDP, and borrowing from foreign investors, who provided another 4 percent of GDP, Lindsey said.

Current Account Deficit

That 4 percent shortfall represents money the U.S. has to borrow overseas to pay for all the goods and services Americans import and to finance investment, commonly referred to as the current account deficit.

Last year, it widened to a record $435 billion, about 4.4 percent of the almost $10 trillion U.S. GDP. That's up from about 3.6 percent of GDP in 1999 and 2.5 percent a year earlier.

``We're in uncharted territory. We don't know how this will work out,'' he said. ``It's unlikely we can borrow 4 percent indefinitely from the rest of the world.''

Responding to a question, Lindsey said it wasn't necessary for the economy to risk recession or for the dollar to fall or interest rates to rise to solve the savings shortfall.

``People from all over the world are sending their money here because we have gotten it right,'' he said. ``The one thing we don't want to do is signal to others that we don't want their money.''

HoratioCanada#5291905/01/01; 23:10:27

Canada should U.S.Dollar-ize if they want to go the way of Argentina.Then the IMF could lend them some money and place rules on them that will guarantee collapse of the countrys exports and throw them into the hands of the money lenders.
The Shylocks Who will promptly take thier gold and silver mines as collateral by way of a mining tax.
Theres nothing new here'same ol money lenders.

Horatiomoney lenders#5292005/01/01; 23:13:45

Maybe the 2nd comming will bring a savior that will drive the money-lenders from the temple and the U.S.all at once
justamereBear@ All & Peter Asher#5292105/01/01; 23:27:27

First blush, I would say that the current account defict is where all the money that AG & Co have been manufacturing of late is going. Inflation is disturbingly benign. That money is all being shipped overseas, at a time when the dollar is under attack from various points, such as the euro. What happens when it wants to come home?

Linsay had better hope that the world can continue to find things to spend money on in, or reasons to send money to, the US.

The man is a "genious" at the positive spin.


Black BladeNewmont gets temporary relief from rising power costs#529225/2/01; 00:26:13


DENVER, May 1 (Reuters) - Newmont Mining Corp. (NYSE:NEM), North America's biggest gold producer, said on Tuesday it has been granted temporary relief from rising power costs in the U.S. Southwest that has handcuffed many companies. Newmont, which has three mining operations in Nevada and is the state's biggest power user, said the state legislature recently froze the company's electricity rates at 6.6 cents a kilowatt hour for the rest of the year, easing fears that rates could climb as high as 7.5 cents per kilowatt hour by the end of the year.

Black Blade: More Mining and energy costs news. A minor reprieve perhaps. It does illustrate how much power is involved when one would think that some of Nevada's mega-casinos consume a large amount of energy. Newmont has the world's 2 largest autoclaves to process refractory ore and that alone consumes huge amounts of energy. Eventually they will have to pay higher prices for their energy. They have also recently announced plans to close several exploration offices as well. Looks like more gold production to be withheld from the market.

Black BladeDems Oppose Calif. Energy Plan #529235/2/01; 00:36:10


WASHINGTON (AP) - House Democrats called a GOP energy plan aimed at helping California ``an assault on the nation's environmental laws'' Tuesday and said it does little to ease the state's impending summer power shortages and soaring electricity prices. Also of concern to environmentalists is a provision that - upon the request of a governor - would allow hydroelectric power producers in an electricity emergency to run dams at maximum output, overriding federal rules and court decisions for protection of fish such as several Northwest salmon protected by the Endangered Species Act.

Black Blade: The California Grasshopper looks to be endangered. Blackouts this summer is a foregone conclusion at this point. A consequence of not taking prudent precautions. "…and they danced, sang, and played all summer…"

Black BladeEnergy officials fear a powerless May#529245/2/01; 00:45:52

Declining energy supplies, plant closures and rising temperatures could make for a dark month


SACRAMENTO -- California's journey through a difficult summer of blackouts begins with the start of May, a month state officials concede is a dangerous and unpredictable prelude to what lies ahead. And they have reason to fear. The state's electricity supplies are waning, thanks to a slew of plants going down for maintenance or repairs at the same time temperatures are rising and peak power demand is expected to jump by 32 percent.

Black Blade: Also factor in Diablo Canyon Nuclear Plant shut down for 35 days for maintenance, and low snowpack in the Sierra's among several other potential problems and political miss-steps. The Kalifornia economy to hit the skids.

Black BladeAngloGold raises prospect of lowering hedge further#529255/2/01; 01:16:43


Godsell said one of the reasons why producers hedge gold in relatively high volumes is that the central banks have 32 000 tonnes of gold in their vaults which they are keen to manage. "In hedging, in lending the gold which makes hedging possible, they (the central banks) earn a modest return. "If everybody stopped hedging, would the central banks simply sit on the gold with no return whatsoever, or would they be more inclined to sell. I'm inclined to the latter line of reasoning," he said.

Black Blade: Bobby, Bobby, Bobby. Come on now. These clowns generally sell to each other not in the open market and only then out of necessity. Even the BOE auction sells only to a select club by invitation only. Generally CB sales are nothing more than paper swapping (like a sloppy drooling open-mouthed kiss). Few actual physical sales ever take place. The whole point of keeping gold reserves is for diversification of monetary reserves and for insurance. The World's largest reserves in the US, IMF, etc. are not sold for good reason. AG states that gold is the currency of last resort. In other words - gold is the ultimate currency.

Black BladeNAPM: Industrial Outlook Worst in Decades#529265/2/01; 01:46:28


ORLANDO, Fla. (Reuters) - U.S. manufacturing executives are more pessimistic about the 12-month outlook for their sector than in nearly four decades, the National Association of Purchasing Management (NAPM) said Tuesday.

Black Blade: Recession around the corner. Come on Cheetah (AG) - throw us a 100 basis point banana! I prefer a different kind of yellow.

NetkingSilver - geographical disparity of price #529275/2/01; 03:55:33

Silver crew, a discussion I heard thrown around: How much of a disparity of price do think there will be between different world zones after "silver is loosed from the strong man" and we see levels like the 1980 high surpassed?. Are we going to see the UK, USA, France, Australia & Mexico etc(as an example)all selling at similar USD prices or will we see a number of different sub-markets forming with national price structures in place based on compound investment/industrial demand. Obviously with possible confiscation "in the national interest" as potential issue(in one or two countries) and price fixing/regulation you could gain another disparity in price again yes?
SALMONOpen question#529285/2/01; 06:00:58

Since I first started following the gold market back in 1995, I read various publications quoting that 32000 tons was owned by Central Banks. Six years later the Bank of England sold half of its holdings and other countries like Switzerland, Greece, Mongolia, Brazil, Venezuela, Uruguay, Austria, The Netherlands, Jordan, UAE, Zimbabwe, Malaysia, Kazakhstan sold part of their holdings. Some countries like Canada and Australia sit with totally empty vaults.

Yet, today we are still quoted that 32000 tons are in the possession of the Central Banks and some even state 33000 tons. Most of the gold sold (80%) according to World Gold Cancel was sold to jewelry producers.

Am I missing something?

elevator guy@Black Blade, re: post (5/2/01; 01:16:43MT - msg#: 52925)#529295/2/01; 06:07:12

Hello Sir Blackblade,
Me thinks thou needeth to step away from thy computer, and gettest thou a breath of fresh air, and perhaps to bask in the sunshine for a spell.
It appears that this CB thing has so absorbed your thoughts, that the issues are mixing with your baser emotions!


Generally CB sales are nothing more than paper swapping (like a sloppy drooling open-mouthed kiss).


(The above is intended as good-natured ribbing. Its always hard to do this without body language, intonation, etc)

Black BladeWhere there's gold there's fire#529305/2/01; 06:24:39's+StockWatch&siteid=mktw


LONDON (FTMW) - Some professional investors are questioning the traditional belief that gold - and gold mining shares - can only rise as the U.S. dollar declines or as inflation accelerates.

Black Blade: Good Thom Calandra Gold article this morning. I suggest that everyone take a look and ponder this one.

elevator guy - I hear ya! I hope to nail a turkey this weekend. Got only one this year and one more to go.

MO VER MEGBlack Blade#529315/2/01; 06:58:44

I try to read a large variety of daily energy/gold articles. I usually read the best first - that is why I begin with your postings. Thanks, I am listening.


Black BladeMO VER MEG#529325/2/01; 07:19:48

Thanks, I try to accomodate. The Energy Crisis and gold will likely prove to be closely entwined. It could all break loose in the next few months (maybe sooner). Now I think that I will follow elevatorguy's advice and get some sunlight to mitigate my vitamin D deficiency ;-)
Peter AsherHa ha ha, he he he he, help me stop laughing!#529335/2/01; 10:35:17

"I was taught at N.Y.U. that market prices are reached in efficient markets, and they weren't polluted by market manipulation."

From business school graduate who "raised a few hundred thousand dollars from family and friends and nearly tripled his money the next year by buying many of the bull market's hot new technology stocks." then "went from driving a Porsche Boxster to being unemployed virtually overnight."

Link above for : " Complaints Challenge Fairness of Late 1990's Boom in I.P.O.'s""

beestingEarly Use of Gold Coins in California.#529345/2/01; 11:14:56

Someone recently posted that the state of California would rank as the 6th(?) wealthiest nation on earth if it was an independent nation. Below may be one of the reasons.""A FREE MARKET IN GOLD""!

From Congressman Ron Paul's "Money Book", start quotes:

Perhaps in the future we need to consider a free market money, allowing consumers to decide about their money the way they decide about everything else. Hans Sennholz and Friedrich von Hayek argue for this system. And it existed at one time in our country.
In California, during the 1840s and 1850s, many privately minted Gold coins circulated. The practice was outlawed in 1864,'but as late as 1914", points out Anthony Sutton," the U.S. Treasury was still trying to halt the circulation of private Gold peices in San Francisco. "Why were such coins still circulating? Because the private mints maintained higher standards than the government mint. Often, points out Dr. Sutton, they were one percent heavier than government issues,"to protect the user from metal loss by abrasion while the coin was in circulation."Private mints held to a higher standard because they were protected by their reputation. They could not force consumers to take sub-standard money by force of law, as government can.
The north financed the Civil War with hundreds of millions of dollars of Greenback notes, and as a result prices more than doubled from 1861 to 1865.
During the Greenback inflation, people in California continued to use Gold as money."In California, as in other states," points out Frank Taussig,"paper was legal tender...", that is,people could be forced to accept it. Although there was no antipathy towards the Federal government, people believed strongly in Gold."Every debtor had the legal right to pay off his debts in depreciated paper. But if he did so, he was a marked man(the creditor was likely to post him publicly in the newspapers)and he was virtually boycotted. Throughout the period,paper was not used in California." End of Quote.

For 50 years after private Gold coins were outlawed the people of California still continued to use them, that must be why Roosevelt made his confiscation laws so harsh 19 years later. Thanks for Reading....beesting.

Randy (@ The Tower)Fed buys Treasuries, adds permanent and temporary reserves#529355/2/01; 12:28:06

The Federal Reserve today added $470 million in permanent reserves to the banking system through the outright purchase of Treasury coupons (dated Nov. 2021 to Feb 2029).

Also today the Fed added $4.25 billion in temporary banking reserves via overnight Rp's.

IronHeadMeet The New Boss - Same As The Old Boss?#529365/2/01; 13:16:11

For anyone hoping Dubby Jr. will cast a spell of enlightenment on the gold manipulation; take the following test. Pretend you've been on a remote beach for the past 6 months sipping maitais, and are not aware of the election outcome.

Please note; IronHead has NO political ofaliation with any party of a demo-lican nature, whatsoever.

12 question test to differentiate whom won the recent presidential election; note - after first 100 days in orifice.

1) If elected president, which one would boost Slick's Americorps program by $282 million?

2) Which one would continue Slick's lawsuit against tobacco companies? note: John Ashcroft has indicated that the justice dept. is willing to spend as much as Reno's dept did in pursuing this matter. source - Wahington Times April 27, 2001

3) Which one would increase federal elementary and secondary education spending by 72%?

4) Which one would maintain the so called "Gore Tax", a $2.3 billion levy (tax) on telephone bills, used to wire schools to the internet?

5) Which one would request a 3.6% pay hike for all federalist workers? IronHead - have to keep those federalists on top of inflation, no? Oh, there is no inflation....Hmmm.

6) Which one would impose the decree by Slick's admin. to implement the medical "privacy" rules, which give the grabbit your medical records?

7) Which one increased spending for Public Broadcasting Corp. by $10 billion?

8) Which one would bar development on privately owned wetlands, in continuation of Slick's "wetland" agenda?

9) Which one vowed a renewed commitment to America's gun laws? footnote: Attorney General Ashcroft said " no question" we need "renewed commitment" to enforce the nations myriad gun laws, and has requested $158 million additional funding for that purpose. source Washington Times, April 27, 2001.

10) Which one would spend an additional $46 billion on a federal program to give low cost prescription drugs to seniors? IronHead - heck, let em grow their own.

11) Which one would deffer privatization of Social Security to a special commission for study? note: same one who made privatization of Social Secrutiy a cornerstone of his campaign.

12) *IronHead's favorite* Which one would propose a $400 million dollar increase for the grabbit's tax collection arm, to increase the payroll by 4000 people?

So, if I've guessed Algore for any of the above questions, wrongo. I might even think Dubby is one of "us", and he is ready to support a free gold market, free of uncle grabbit's intervention in a free market society. Wowsers, am I stupid, or am I stupid? Think I'll be heading back to my island to finish the maitai.


R PowellOne and one half fer day#529375/2/01; 15:28:09

Quiet day. POG up slightly, XAU down just a little and short term lease rates down/ longer term rates up, again just slightly. Better luck tomorrow?

Tree in the ForestNetking, Salmon, Peter Asher#529385/2/01; 16:08:28

Netking: There have been times when different PM markets had different prices. I am thinking specifically of the Dubai gold market in the 30's-40's(?) when gold was priced higher than London. However these days, communication and transportation is much better. Market price differences cannot significantly exceed transportation costs for very long without the difference being arbitraged. The only exception to that would be a war or some kind of force majeure where import/export/transportation is restricted. War is a distinct possibility. So the answer to your question is a definite maybe.<grin> Does that help?

Salmon: You asked:
"Since I first started following the gold market back in 1995, I read various publications quoting that 32000 tons was owned by Central Banks...Yet, today we are still quoted that 32000 tons are in the possession of the Central Banks and some even state 33000 tons. Most of the gold sold (80%) according to World Gold Cancel was sold to jewelry producers.
Am I missing something?"
Sorry for being flip (I'm a's my job) but you are definitely missing something. You are missing the innumerable discussions over the last several years on this board during which we have pretty much beaten this subject to death. But I don't expect you to review several years of discussion! I think we have concluded (with Trail Guide's considerable help) that the bulk of the CB sales have just been CBs passing gold back and forth between themselves. Makes it look like nobody wants gold but since they still have all of their gold, that must be false! So they drive down POG without losing anything. Isn't that nice of them?

Peter Asher: You said:
"From business school graduate who "raised a few hundred thousand dollars from family and friends and nearly tripled his money the next year by buying many of the bull market's hot new technology stocks." then "went from driving a Porsche Boxster to being unemployed virtually overnight."

Me: It's funny but sad too. Like the guy whose stock options went to $8 million and now are down around $1 million. Don't these guys ever take profits? Haven't they ever heard of stops? If the bozo had taken a 1 million profit and then put some stops in (even generously low!) he'd still have over half his money. Like youth is wasted on the young, money is wasted on the rich (albeit temporarily rich).

auspecTree in the Forest/Salmon#529395/2/01; 17:31:34

CB Gold

Hello Sir Tree {sounds new-age, doesn't it}. I have only been around 1 year and have yet to see Salmon's question answered satisfactorily as far as depletion of CB gold. Per your response:

"I think we have concluded (with Trail Guide's considerable help) that the bulk of the CB sales have just been CBs passing gold back and forth between themselves."

I still don't get it as to where all the vast jewelry supply comes from if that is indeed the case. It is not paper gold adorning all those lovely limbs and appendages and it has to originate from somewhere. Maybe it's someone else's "short gold", but the gold lovers now have 100% posession and someone else has a potential problem. Certainly the CBs play the gold reshuffling game, but we must remember that CBs count lent/leased gold as though it were still in their posession! So what is their TRUE gold position? They say 32,000, but reality issomething else entirely. Some of the items we so generously lend out never find their way back, right? I'm still waiting for a chainsaw, but no longer include it in my list of tools {ha}.
So, the question becomes; If the CBs still have all their gold on the whole, where has all the industrial, monetary and jewelry gold supply come from? Until convinced otherwise I believe the CBs have compromised somewhere near 15,000 tons of the yellow dog. They may get it back as gold in the ground with their predatory practices of M&As, but these leased ounces/tons are now in the hands of others! The only other answer that makes sense is that there are large amounts of unaccounted for gold AVAILABLE as supply to markets. Who really knows about this POSSIBILITY? So:
1. The CBs are short.
2. Gold demand has been and remains extraordinary. Of course when investment demand really kicks in....
Thank you, Sirs! I am totally open and ready to be convinced otherwise if the info is put forth.

Randy (@ The Tower)Pesos STRONGER than dollars???? It could happen.#5294005/02/01; 19:08:49

With the Argentine Congress set to debate the bill to make the euro an equal partner with the dollar in the 10-year-old currency peg, the peso could actually outperform the dollar if the country can keep its fiscal house in order.

While open to debate and alteration, as orignally conceived, the bill introduced by Economy Minister Domingo Cavallo intends to replace the old currency peg requirements of one U.S. dollar held in reserve for each peso in circulation. The new peg calls for a replacement of half of the dollars in reserves with euros, designed to be implemented when the euro attains exchange parity with the dollar.

And to those sitting on the sidelines pondering the future value of the dollar on the world scene, those involved in the debate seem to take as a foregone conclusion that the dollar will fall relative to the euro to bring about the precipitating condition of parity. Further, the old proposals for "dollarization" of the Argentine economy are now being seen as a path equivalent toward peso devalution because, in the words of the article, "the euro is likely to outstrip the dollar in strength eventually."

You surely strive earnestly for your income. You may be content to hold it in the form of paper which can fail suddenly under the management of others; OR, you might rather prefer to hold the timeless wealth of kings and thereby be a "man of gold" with a fistful of integrity. Resolve now to give Centennial a call and claim the wealth you've already earned.

justamereBearTree in the forest 52938#5294105/02/01; 19:38:27

You say that in todays world it is near impossible for a two tier gold price to exist.

Try Russia over the last 10 years. The world price was running either side of US$10 (up to 12) per gram. That is what the government was getting for its official holdings as it tried to control the economy. At the time when the government changed its modus operandi, they were getting about $12/gram, internationally. When they announced the change, the "secretary of the treasury" equivilant said, "we are going to sell internally, we can get US$20 per gram on our own black market." (not to mention that they can ultimately grab it back)

So in their system they had the Ruble, a de facto US dollar exchange, and a gold exchange. Strongest arguement I know for owning precious metals. The supposedly rock solid USD was being beaten, hands down, 2 to 1 almost, by gold, in a time of trauma and uncertainty. The local fiat currency had gone to zero, effectively. Extrapolate what might happen if the USD goes to zero?


Tree in the ForestAuspec, Trail Guide#5294205/02/01; 19:54:02

Auspec: "Some of the items we so generously lend out never find their way back, right? I'm still waiting for a chainsaw, but no longer include it in my list of tools {ha}."

LOL! I guess I have some stuff to write off too! As to whether or not CBs still have their gold I would bet they still have most of it, though I certainly can't prove that. Even the US with their "custodial gold" which now supposedly belongs to someone else, still has it in their possession! Admittedly, we haven't had an audit of our gold in several decades but hey, we trust them right? <grin> We do still have mines and scrap recovery supplying physical gold. And the CBs have probably been forced to lease out some gold to continue supporting the dollar. I guess the real question is how much gold has been leased by CBs? If it's almost half as you say (15,000 tonnes) then these bankers are in deep doo doo. If the you know what hits the fan, I wouldn't want to be a central banker who had to face the music because a lot of gold is missing. What would really be interesting is if the ECB really doesn't have the gold they claim to have backing the Euro. Can you imagine if it was all paper promises? Paper backing paper! Hey Trail Guide, do these guys have any physical gold left or has it all been leased? When was the last time the ECB vaults were audited? Thanks for your help.

ElwoodOn a slow news day we make our own#5294305/02/01; 20:06:10

LOS ANGELES (AD) – California lawmakers today hailed a new bipartisan plan for dealing with the state's onerous energy shortages and soaring electricity prices. The plan, introduced yesterday in the state house, calls for replacing nearly all of the natural gas and other fossil fuel power generating facilities with "human effort." Exact details of the plan have yet to be made public, but information gained by this reporter through leaks, bribes, blackmail and outright intimidation has allowed news organizations to fill in many of the gaps.

The plan calls for the strict regulation and regulatory oversight of all health clubs, workout facilities, gyms and even public and private school physical education classes. All Californians, many of whom work out regularly at their local health facilities or just have a jog in the park will now be required to "register" all such activity and perform it in state designated areas such that the heretofore wasted effort of their strenuous activity can be channeled into the production of electricity for the state. The bill requires that all exercise equipment be redesigned or retrofitted with power-generating devices and plugged into the state's power grid by 5:00pm Friday afternoon in time for the "weekend warrior" sessions.

In unveiling their plan lawmakers will also reveal many of the state-certified devices which will be used for carrying out this new policy. From information gained from these insiders this news organization has learned that the devices are fairly new and ingenuous in nature. "They've thought of everything," one member of the energy commision admitted under condition he remained anonymous, but his wife, Mrs. Jones, readily agreed. "They've got little doodads that you have to clip to your roller skates and will power a whole light bulb on a downhill," she was overheard giggling. "…and you should see what they've done to those tennis balls."

Many celebrities have signed on to the effort. Jesse Jackson has re-invogorated his followers by promising to bring back "Black Power." The Screen Actors Guild have created their own "Star Power" organization and are milking it to the hilt. Environmentalists and animal rights activists, all eager to get on with the business of fighting cruelty to the environment, have join in. One member was overheard stating, "You should see what we have for all those dolphins we've saved. Just one pod of those suckers can power a whole house for a month."

Further developments to follow…..

Tree in the ForestJ' Bear#5294405/02/01; 20:21:22

You misquote me sir J Bear! What I said and still say, is that arbitrageurs will arbitrage a price difference if there is a profit to be made. There are conditions that can stop them like a totalitarian government with import/export restrictions etc. I think that applies in Russia where markets are still controlled. I am sure Michael wouldn't mind getting twice the price for his gold coins if it could be done. If he could sell into Russia (or Europe for that matter) at a significantly higher price, we would soon find he had little gold left for sale here. Having said that, shipping and import duties can be a factor in determining a final sale price. Modest differences can exist but big differences won't exist for long under normal circumstances. Energy in California is an interesting example. I bet power generators in adjacent states would love to sell energy to the grasshoppers at two or three times the local price, if they have it available and if they could be assured of getting paid. Transmission costs must be factored in. When they sell their energy in CA, local prices rise. Less energy available locally, more in CA. Prices tend to equalize. Of course now, they have to factor in the cost of default in CA. Also we have market restrictions imposed by a government, forced selling by another government, in short, a mess. But under normal conditions, costs gravitate to equalization.
CanuckSilver#5294505/02/01; 20:25:30

Looks like silver was a wee bit busy in N.Y. today.
auspecHey Silver Sops!#5294605/02/01; 20:57:35

From Robert Flett @ GE:
"Out of curiosity, I called a number of local bullion dealers for quotes. In addition to price variations of up to 30% from one dealer to another for silver coins ......, all stated that they were having great difficulty getting silver bars. One dealer stated that they had stopped taking orders for 100 oz. bars as they had such a long waiting list. Is this a result of refiners holding back supply because of the current low prices, or is there a supply/demand problem building faster than we anticipated?"

"Was astounded to learn of the overwhelming influence of derivatives in gold trading...50 times the size of the physical gold market, and that a similar ratio exists in silver trading. Derivatives also play an even greater role in currency trading and could suddenly cause the dollar to head south, while gold and silver head in the opposite direction." END

Comments: Nice derivative trading, no?
I priced VG Morgan and Vg Peace dollars today. The Peace were $8.20 and the Morgans were up to $8.91. Each contains approx. .77 oz. of silver so this becomes a fairly hefty premium over spot. May as well give a plug for the house while here------ Great prices and service on silver bags! Thanks,
Get it, it's happening.

Peter Asher@ Ellwood re harnessing human kinetics.#5294705/02/01; 21:07:28

One major source which was overlooked could be harnessed by installing inverse walking beam generators under --------
grostigHelp buying EURO calls.#5294805/02/01; 21:16:12


I've got physical gold, but want to play with some paper.

I want to buy a call for the EURO, believing it will rally sharply in the future. Current price is about 0.90 and I expect it to go above .95 and then to $1.20.

I have $3000 - $5000 to speculate. I am considering at the money or out of the money calls (to get more contracts and leverage? I believe??). The volatility skew is a concern over .95 or so? I am thinking of June Sept or Dec 01 expirations, but don't know how to look at the vega to determine which is better. If I loose this money I will put more in, expecting that it will happen eventually.

I will trade tomorrow at 0.92 Sept01 unless I get other advice. Any help is truely appreciated.

Solomon WeaverRussian Gold#5294905/02/01; 22:22:53

justamereBear (05/02/01; 19:38:27MT - msg#: 52941)
Tree in the forest 52938

I engaged my Russian wife last night in a conversation about gold jewelry...and she was absolutely of the opinion that Russian gold was "much more expensive, and much more beautiful" (i.e. an nice jewelry piece had in the good days when all had jobs already cost two months salary)...

Beauty is in the eye of the beholder...and since my wife is beautiful did I have the heart to try to explain to here that at spot all gold should be the same???

Poor old Solomon

Black BladeSome Analysts See Stagflation Again Rearing Its Ugly Head#5295005/02/01; 22:30:14


The year-over-year inflation rate peaked at 12.2% in 1974, fell back for two years, then resurged to 13.3% by 1979. The first peak came during one of the nation's nastiest postwar recessions, and the second came during a time of barely sputtering growth. These twin bouts of stagflation are popularly associated with the big oil price increases that hit the United States in 1973 and 1979.

Black Blade: This article is a couple of days old, doesn't go into details and misses a few important points, but interesting nonetheless.

justamereBearSolomon Weaver#5295105/02/01; 23:26:40



justamereBearTree in the forest#5295205/02/01; 23:51:06

My appologies. That was what I read as the underlying message. It is true that in a totally free market, where arbitrage is easy, little price diffrence will exist, one market to another.

Are you suggesting that any market, for anything, in any part of the world is totally free, what between outright manipulation, government laws, regulations, and things like "professional societies" and marketing boards?

I recently read, I believe it was in "The Alpha strategy" published in the early 80's, that a study by the Colorado State University found that there were some 41,000 state and federal regulations effecting the common hamburger, everything from grazing the beef cattle, to assembly of the burger at your local fast food outlet. I can believe it.

I was not trying to disparage your message, rather more I agreed with much of it, but my cynical view of life as "she is lived" wanted to add another dimension.

Sorry, again

justamereBearTree in the forest#5295305/02/01; 23:55:08

And BTW, I agree with your arguments in 52944


justamereBearGrostig--Calls#529545/3/01; 00:39:50

Have you considered that not only do you have to be right in the direction, but also within the timeframe of the calls?

I have poured a lot of money down the rathole of calls. Still do. In hindsight, it looks pretty foolish. I probably would have been better off to buy the underlying.

As I said, I still do buy calls, for my own reasons. I see nothing inherently wrong buying calls, if it is done for the right reasons.

Have you considered buying bonds, denominated in Euros. At least that way you are paid interest while you are waiting, and time does not work against you in a flat market, which is certainly the case with calls. You will probably give up some leverage tho.


Black BladeOil Retreats; US Stocks Record Big Build #529555/3/01; 01:03:58


LONDON (Reuters) - Oil prices beat a retreat on Wednesday as an increase in fuel stocks in the United States doused concerns about a gasoline supply shortage this summer. Dealers said U.S. industry and government data indicated that a rush of imports had lifted crude inventories while increased refinery operations had boosted petrol stocks.

Black Blade: The problem of course isn't the supply of crude oil, but the ability to refine enough reformulated summer grades of gasoline. Refinery utilization rates are at 95.8% - nearly maxed out. Gasoline inventories are still below last years levels. The test comes as summer driving season gets under way. The real test for the energy crisis is NG. NG storage levels are up 19% from record lows though still far below last years levels. The increase in attributed to warmer weather. If consumers experience hot summer weather NG/utility prices will rise with the temperature as air conditioners are cranked up. Meanwhile, currently NG production is falling behind last years pace as decline rates in producing fields are accelerating. Then the problem could get critical come next winter if NG storage levels fall or aren't built up over the summer months. Most US homes are heated with NG and nearly 25% electricity is NG-fired. Virtually all new power plants are NG-fired. In spite of what some "professional" analysts and government bureaucrats at the BLS may say, higher energy costs do hit the consumer in the pocketbook and is in reality a major contributor to inflation. We are in a recession and it looks to get much worse. Many survivors will be found safe in golden lifeboats.

working-kirkGood Interview about the FED. possible reason why fed panicked#529565/3/01; 01:08:08

This is a very good interview Anne Williamson of worldnet daily. It doesn't really tell us nothing we haven't talked on this forum, except one. She mentions in passing one of the lastest bailout was a 10,000,000,000 (10 billion) of International Money Fund loan to Turkey because of the Lira
meltdown. Also be sure to listen to the commentary. Jim
mention he was watching bubblevision and he noticed that all analysts downgraded oil and energy. He said their companies was shorting the energy stocks and pushing techs.
(Black Blade This seem the perfect time for your insight, comments analysis.)

working-kirkU.S. and China planes collide (again)Please comfirm#529575/3/01; 01:13:31

I saw this as as a late night special edition put out by out
local newspaper, and I am hoping either the editors made a
mistake or I was looking at a month and a half old copy.

It said The U.S. and china had another plane collide.

I was thinking we got through the last one by sheer luck and
the U.S. should be damn grateful we got the aircrew safe and sould and forget trying to get the airplane back. It would
have be a worthwhile price.

Black BladeRising US unemployment to trigger recession-ECRI#529585/3/01; 01:18:55


NEW YORK, May 2 (Reuters) - U.S. joblessness will rise in the months ahead, and will lead to an outright economic recession this year, the Economic Cycle Research Institute (ECRI), a New York private research firm, said on Wednesday. ECRI's leading employment index (LEI) ``remains strongly negative'' at a 19-year low, following a path seen before when growth recessions, or periods of below-trend economic expansion, develop into full-blown recessions.

Black Blade: April US unemployment numbers come out on Friday.

Peter Asher@Black Blade msg#: 52950)#529595/3/01; 01:24:17

Some Analysts See Stagflation Again Rearing Its Ugly Head

That article has some interesting contradictions. First there is >>> However, a pair of economists from the University of Michigan, Robert Barsky and Lutz Kilian, contend that the main reason wasn't the oil shocks but monetary shocks caused by misguided "go-and-stop" credit policies of the Federal Reserve. <<<<

Then the (one) money manager says >>> Instead of puzzling over the mysteries of productivity and worrying about whether the falling stock market would dampen consumer spending, Friedberg and other critics say, the Fed should be paying attention to its primary job: restraining inflation. "They should begin to talk about discipline and maybe think about raising rates rather than cutting them," Friedberg said.

The economists are right! Following are comments from ORO and I in two posts earlier this year and something from GE last night that realy nails it IMO

Peter Asher (2/20/2001; 11:25:46MT msg#: 48607)
Re ORO >>>> the Fed will not be able to raise interest rates as prices begin rising,
because prices will continue rising to reflect the additional cost of borrowing needed to build the capital, up to the point where the Fed raises rates so high as to kill investment completely, <<<<

Isn't that exactly what the Fed did twenty years ago thereby creating "The Perfect Stagflation"? They won't this time IMO, because the unbelievable debt bubble would burst.

Peter Asher (04/02/01; 15:45:03MT msg#: 51282)
******The New Fifth Horseman******
Stagflation occurs when a confluence of high capital and production costs create an environment in which only the most solvent entities are left standing and able to command the higher price of survival

@(JOE) May 01, 09:25 "Stagflation's ugly head"
(Diogenes) May 02, 03:07
(This is also posted as an addendum to my earlier below.)

The stagflation of the 70's was fueled by both energy costs AND high interest, of which I suspect the interest costs were the greater.

This ’paradoxical’ phenomena evolved from an economy that had evolved to the size and complexity that enabled the business entities with strong marketing power to pass along cost increases to the consumer.Simultaneously, the weaker succumbed and middle managers were on hi-way corners running hotdog stands. The companies and workers that survived were the payers of the higher prices. Those that failed, were the statistics of the recession. Simple as that!

This time around we have:

1) current energy costs are NOT higher, adjusted for inflation. They ARE higher in the workings of th bubble-boom that the exceedingly low cost helped build.

2) Very low interest rates that absolutely cannot be raised without explosively bankrupting the total system.

I suspect the Fed and its cohorts realized that they failed back then at "Punishing" inflation out of existence. The rising interest rates served to knock out the very competition that must exist to curtail price increases. If a business gets pushed into the red and has no profit to operate with, along with the unserviceable cost or absence of any new credit then it's toast! The event was the most idiotic act of central bank planning in history.

This barley sustainable foolishness is now dependent on
keeping everyone in the earnings loop and able to service dept as cheaply as can be brought about. It is the receivers of interest income, who must be sacrificed to the lions of mathematical reality, if this thing has even a prayer of survival.

Black BladeWorking-kirk#529605/3/01; 01:40:44

The downgrade of the oil sector is solely based on the 8 million barrel up tick in crude oil inventories. This month on the 15th OPEC meets to reset export quotas again. They could very well adjust production again as they are very wary of low oil prices that hurt them during the 1990's. Crude oil inventories are still below last years levels though and any reduced production could result in another oil sector run up. As I have said the real problem isn't so much the availability of oil but the means to refine it. Refinery utilization is nearly maxed out and any refinery shutdown (accident or maintenance) could push fuel prices higher. Ultimately we must accept that "cheap oil" is will be a thing of the past as the "Super Giant" oil fields are in various states of decline and more costly smaller fields and non-conventional will have to come on line to make up for the eventual shortfall. For that to happen higher prices will be needed to provide incentive to produce more oil. We have a NG shortage and that could get worse if there is less oil production due to the fact that both oil and NG occur together in many areas. A drop in oil production will result in a drop in NG production. There are plans for at least 275 new NG-fired power plants between now and 2006. If there is not enough NG to supply these new power plants they will only still as monuments to poor planning and a lack of an energy policy. Every postwar recession has been preceded by an energy crisis. We have an energy crisis now but it is more an inability to create enough electrical power rather than gasoline rationing. But then again, wasn't it these financial experts in 1998 that said we were looking at $5.00/bbl oil forever? Hmmm… Cheers!

- Black Blade

Peter Asher@ Black Blade msg#: 52958)#529615/3/01; 01:41:39

Rising US unemployment to trigger recession-ECRI

I don't think so! Note >>> what caught our eye is the service sector didn't crank out jobs,'' Achuthan said.<<<

This is not the sector with the 125% mortgages, 401-Ks and large credit card balances. The quantitative change to the servicing and maintaining of the double-bubble of credit and stocks will not be significant from that.

It would take ALLOT of upscale unemployment to trigger a cross-cascading default that would implode the system.

Black BladePeter Asher#529625/3/01; 02:13:55

Yes, I noticed that in the article and I admit I was a bit confused. There appears to be a split in opinion among various camps of economists. Remember former Head Fed Paul Volker and the Fed gave the economy a bit of "shock Treatment" when we found ourselves in that mess last time around and though it was painful it seems to have worked. AG and the Fed seem to be taking a bit of a different tack with rate cuts, etc. Now we have a massive build up of money creation to add fuel to the fire. AG's quick-fix rate cuts only look to temporarily delay the inevitable. I don't think that we can avoid a major recession. What I have mentioned though is that every postwar recession has been preceded by an energy crisis albeit they have been oil related and each one sent shock waves through the economy. This time the energy crisis is related to insufficient power generation that effects the whole economy from business to the individual. Maybe it is a matter of energy crises that lead to economic shock waves and the Fed aggravating the problem with incompetence? Maybe ORO could jump in on this one again. I haven't seen him here much lately.

The unemployment article caught my eye as it supposedly related their historical data to the timing of recessions in the recent past. It was something that I didn't think about before. The correlation deserved some recognition though I am not sure whether it carries much weight as this is not my area of expertise. I notice that Forbes has an ongoing "body count" at their site as they seem to think that the rising unemployment figures could relate to something being seriously amiss. I threw that article in hoping that maybe someone might address this issue. Cheers!

- Black Blade

NetkingJustamerebear / Tree in The Forrest / Working Kirk / Auspec#529635/3/01; 02:37:05

Tree in the Forrest/Just A Mere Bear - Re: Arbitrage on the markets: Some interesting points made by both of you Sir's. There has certainly been intervention in the past, direct & indirect causing disparity not always rectified through arbitrage. Confiscation has featured in the PM markets in the past, why not again especially Ag,yes?

Auspec - Keep those bullish Ag reports a commin Brother! I believe that there is a window of opportunity NOW in Silver, but it will not last for very long. The word has got out & is gathering pace among those on the outside of the "PM community". Look for investment demand to rapidly outstrip industrial.

Working Kirk - Oh dear oh dear Sir! No they got the report wrong or you saw an oldy. The last reported near miss(until son of Bush plays 'Star Trek'that is)was three Aussie naval ships being challenged & prevented passage by the PRC close to Taiwan. The Aussies being who they are probably replied something like:"You Shielas get Out of way!"...and went on through!<grin>

Cage RattlerWinstar Communications & Greenspan's Panic#529645/3/01; 02:39:09

There is one specifically remarkable element in the April 18 interest rate action by Federal Reserve chairman Alan Greenspan. Senior financial analysts point to the eerie coincidence of the Chapter 11 bankruptcy declaration by the New York-Virginia telecommunications company, Winstar Communications, on April 18, and the Fed rate cut the same day.

What has come to light is the little-publicized practice of key telecom suppliers, such as Lucent Technologies and Cisco Systems, of giving huge credit lines to companies, such as Winstar, in order to prevent collapse of their orders for telecom equipment in the present meltdown of the "New Economy."

On April 16, two days before its bankruptcy declaration, Winstar had defaulted on $75 million in interest payment on its $6.3 billion debts. Out of the total debt, Winstar had an estimated $1 billion supply credit line from Lucent Technologies, which itself is in such precarious financial condition, that it had to issue several denials of looming bankruptcy during the past weeks. While giving huge credit lines to their customers, the telecom suppliers themselves have huge debts to their banking creditors - a cross-credit chain-reaction situation with a systemic meltdown potential. Thus, according to informed acounts, the Winstar bankruptcy was a key factor in Greenspan's panicked rate cut at 10:54 in the morning of April 18.

Despite the Fed rate cut, another large "New Economy" company, PSINet Inc., which announced staggering 4th Quarter losses of $3.2 billion, and a $5 billion loss for the year, is rumored to be close to a Chapter 11 bankruptcy filing. PSINet has $3.6 billion in debts. Winstar and PSINet are but the tip of a very big iceberg of insolvent "New Economy" companies, which can trigger chain-reaction mega-crisis of the financial system in the United States and beyond.

Source: Vol. 15, No. 17 , EIR STRATEGIC ALERT April 26, 2001

Black BladePeru to investigate missing gold amid Fujimori probe#529655/3/01; 03:05:02


Peru is to launch a probe into allegations that gold bars have disappeared from the central bank. The probe is part of an investigation into accusations that ousted ex-President Alberto Fujimori stole $1bn before fleeing for Japan.

Black Blade: Sure is a lot of excitement over a barbarous relic ;-)

Trail GuideComment#529665/3/01; 04:48:34

Hello again!

Had some interesting conversations with a few friends recently. I'll try to convey those talks into a trail walk this weekend. Another sent me a letter and has offered a new reply post to the forum. I intend to convey that letter and his letter also. As a change, we are going to post his Thoughts on the Gold Trails page.

Now that my computer is finally back up to speed, will begin replies and comments to some of the great posts offered here a few days ago. Will return tomorrow!


Black BladeExecutives still on edge#529675/3/01; 05:49:48


NEW YORK — With the first-quarter earnings season winding down, there's growing talk on Wall Street that stocks have bottomed and the worst of the "profit recession" is over. But corporate executives aren't as confident. Investors should brace for more ugly earnings. The reason: 244 U.S. firms have already issued profit warnings for the second quarter, putting it on pace to top the record 907 negative pre-announcements issued last quarter, says Chuck Hill at Thomson Financial/First Call. Profit warnings are running at twice the rate they did in the first quarter. "That is an ominous sign," he says. "Despite what the pundits say, there's still a lot of bad news to come."

Black Blade: Maybe it's time for analysts to lower their earnings estimates again so they can meet or exceed estimates and get another sucker rally going.

Black BladeStocks View: Slowdown or Ugly Recession?#529685/3/01; 06:11:17


NEW YORK (Reuters) - The U.S. economy is changing and Wall Street is telling those bruised investors that there may be something more serious ahead than just a run-of-the-mill slowdown. After being pumped up for five years, stocks have crumbled over the past 12 months. Despite several recovery attempts, a lot of investors still sense that the economic environment is rapidly deteriorating and the nation could be slammed by a recession. ``Avoiding a recession at this stage in the U.S. would be unprecedented, given the reading we now have,'' says Lakshman Achuthan, managing director of the Economic Cycle Research Institute.

Black Blade: More interesting global recession talk and predictions from ECRI. During times of economic uncertainty gold usually did well. Looks like time to allocate a bit more into gold. BTW, market futures look dismal this morning.

auspecgrostic & Euro Calls#5296905/03/01; 07:01:15

Hope this is helpful, grostig: You simply need a futures {commodity} account that would allow you to own a Euro contract or, as you are looking for, calls on a future contract. This can be done easily with your $3-5K. The calls on futures will not be available via another type of account. I like your idea but have no idea of the fair pricing of any of these calls.
Best to you.

elevator guyI see how this game is played!#5297005/03/01; 08:41:25

If I was playing paper right now, this would be the time to go short. Right after a little paper rally, see?

In a day or so, the paper price of gold will go back down due the unseen hand, and the game starts again. But I am not riding that pendulum right now, and have no heart to short gold, paper or otherwise.

What do you bet it goes back down to $261 in a couple of days? Someone is raking in those call premiums!

auspecGATA South African Conference#5297105/03/01; 08:53:41

If gold holds true to recent form it will get pasted around the time of GATA's S.A. Conference this weekend. In an in-your-face show of force the Power Elite have not missed an opportunity to put down previous rebellions. Shows how seriously they take these challenges. They are playing an all or none game that is likely to leave them with..........NONE.
Get Em GATA!

ausomeshort term high today?#5297205/03/01; 08:56:07

I am playing the game of the shorts today. If you cant beat em join em. I agree with your analsis elevatorguy.
AbsoluteXWorking-Kirk Good Interview about the FED. possible reason why fed panicked#5297305/03/01; 09:01:55

I couldn't find the interview with Anne Williams of WorldNetdaily in the link you have given..( )
Do you have the exact link for that interview...

Galearis@ the USAGOLD silver camp#5297405/03/01; 09:28:55

The first link is somewhat off topic but begs a question (or two) in my mind as to the rationale behind Bush's "StarWars 2" coming to your neighbourhood (war) theatre near you.

In my mind the current administration is not on a healthy financial stance to ever initiate such a prohibitively expensive ABM system. This particular aberration was the spending nail that sealed the coffin of the old Soviet Union and will, for the same fundamental reasons, never see implementation at this fragile time (for the US) either. It would, however, as aluded to in the article, be a devisive factor for Europe and could not help the EURO cause. Methinks this is a ploy of the Bush administration to deflect attention (classic) to growing domestic economic problems ahead. This is all nonsense IMO and simply a political ploy.

The rest of the post is extremely interesting. Recommend those interested in silver on this forum to follow the links and ponder well what is revealed....


Date: Wed May 02 2001 10:59
GoldBrick (Dollar just went negative.) ID#432102:

Date: Wed May 02 2001 10:59
sharefin (Cumulative world gold production) ID#284255:
Copyright © 2000 sharefin/Kitco Inc. All rights reserved
This chart shows the cumulative world gold production since
The sum total is here comes in at just under 120,000 tons
So approx 15,000 tons would have been produced prior to this
Most all of this gold still is in existence today.
135,000 tons = 4.34 billion ounces

Now when compared to the silver stocks available we see a
different situation.
Unfortunately I can't find totals for world silver production
going back as far in time to
compare to & chart.
But with the TOTAL US STOCKS topping out at approx 5.9 billion
ounces ( in 1942
We can see that silver stocks used to outweigh gold stocks by
a decent amount.

Now it appears that silver stocks would run at 25% or less of
gold stocks.
4 billions ounces of gold to 1 billion ounces of silver -
presumably less.
With CBs holding ( reputably ) 35,000 tons of gold ( 1.1
billions ounces ) in stockpile
This dwarfs the currently known US silver stockpiles of approx
112 million ounces (
10% )

The table has turned dramatically and the position keeps on
Gold's deficit can readily be covered by CB's topping it up.
Silver's deficit is rapidly removing all and every stockpile
never to be seen again.

There is a vast difference between silver and gold.
Silver has a high industrial demand which in many cases
removes the metal from
circulation forever.

Methinks silver - Tears of the Moon - will one day do a

GalearisOops, hit the enter key in error. The other important chart on silver....#5297505/03/01; 09:33:07

When compared to the gold supply chart, this one on silver is eloquant, indeed. Ted Butler et al are wholly correct in their belief system.


Tree in the Forestj'Bear#5297605/03/01; 10:08:12

No apology needed sir as no offense is taken. I love a good joust! I wonder how the price of hamburgers in Moscow compares to here in the US? Anyone care to arbitrage the price difference in McDonald's hamburgers? Perhaps a "golden" (arch) opportunity! As to free markets, Goldenrod at GE expresses it best:

Free Enterprise? (<Goldenrod@webtv>)
May 03, 11:05
Free Enterprise and Free Markets. The Twin Myths Roll on into the Twenty-first Century.

Ask the average American Joe or Joan what he thinks of OPEC and the most probable answer you will get is: "Not very much!"
Then ask him why?, and he or she, will tell you it is a cartel which, with the connivance of Big Oil, manipulates the price of crude, so that he, (let's be chauvinistic and let he stand for both male and female!), Joe Blow, is gouged at the pumps and if the free market place was allowed to take its course, he would be a lot better off in the pocket!
Now, Joe wouldn't put it quite that way, but, link the bits between the swear words and the above would be a rough translation!
Well Joe. Wake up and smell the coffee! Between you and me, there is no such thing as free enterprise or free markets. The price of practically everything is either manipulated up or is manipulated down.
Look at what a supposed free market has done to everything that the North American farmer produces! The cost of each item that goes into the production of any crop, except the sweat off of the farmer's brow has relentlessly advanced over the years, whilst the world price for the item has, except for very transient periods of damage wrought by Mother Nature, steadily dropped.
How does the American farmer survive these adverse conditions and by the skin of his teeth, stay in business? Well, perhaps the 28 BILLION handed out and reluctantly accepted by independent farmers, last year alone, might give you a clue! Some free enterprise system, some free market system!
We all know about gold and silver and how the free market allows those two metals to trade freely on the open market.
Oil not very long ago was trading at $10 a barrel, and the pundits could see it trading at $5 a barrel, as they said "into the foreseeable future", and, what was worse, said so with equanimity! Two to three years of $5-$10 dollars a barrel oil would have seen the US oil and gas industry down the tubes, a toilet deposit! If such a low price, by some aberration of the paper markets, could have been kept in place for that long. So much for free enterprise!
It was an OPEC cartel that saved the bacon for the U.S., and averted what would have been one of the most calamitous implosions in the energy field since man discovered fire!
It is not that free enterprise and free trade do not represent the best way to go in this modern world. It is that we have not had, for a long time, such entities, in a workable, non-manipulated modality to find out!

USAGOLDToday's Market Report#5297705/03/01; 10:30:33

News & Views complete and on way to printer. With that major project out of the way, I'm back in the saddle again. Extended Daily Market Report today, available to all at the Daily Market Report page (linked above). Includes long term gold graph.

"Something's afoot in the gold market. . . ." Ian McAvity

Deja vu all over again?

Old YellerScary stuff from Fredbear#5297805/03/01; 11:00:41

There's lots happening out there'so much conflicting info to absorb.Now,get a load of this.

The banking/central bank fraternity scares me,they have created this situation;this end game looks plausible to me.

Buy gold'sell FRNs,don't let them win.

TannehillWhat if?#5297905/03/01; 11:05:17

I had a strange thought at work yesterday, "we would truly know that gold was dead, if the BOE held and auction and there were no takers." Since we don't know whom the buyers are, what if the buyers just stayed home? I suspect they didn't like getting paper chits at the last auction anyway...

I can just see the headlines


*****Goldugs scramble to unload their gold at $200/ounce to buy Tech stocks*****

Hang in there, I suspect the volatility will be enoromus, a major push to the downside that will scare the pants right off of us.

that's all from Tannehill

Old YellerThe latest from the ECB#5298005/03/01; 11:29:04

The euro,after breaking through .90 after Uncle Al's cut'seems to be treading water just below that level.My feeling is the market does not take their rate cutting inflexibility seriously.Especially when the French finance minister appeared to side with the US and the IMF on that issue.

Stability and purchasing power of the currency continue to be the overriding goal here.Press on regardless,boys,tune out the whiners.

Thanks to nomercy at Kitco for the link.

Randy (@ The Tower)You've been waiting for this one! An offer that's sure to go fast.#5298105/03/01; 12:48:22 We've supplied you with gold for your kingdom, now you may select your queen!

Better still, there's no need to stop at just one. Get you some!

NetkingTree In the Forest - Mac'Dollar#5298205/03/01; 13:00:01

Tree in the Forest(52976)
You write: "I wonder how the price of hamburgers in Moscow compares to here in the US? Anyone care to arbitrage the price difference in McDonald's hamburgers? Perhaps a "golden" (arch) opportunity!"

Reply - I take it Sir Forest you saw the recent GE post someone had taken from the Economist magazine re: The value of the Big Mac in USD in different parts of the world. Quite a serious economic study that comes out each year. George S. apparantly reads it, saw it and hesitated before embarking on a Euro/USD play as he got a contrary signal, he went ahead anyway the story goes...and "took a bath" on his currency postion, oh dear how sad never mind.
The latest reports conclusion?...apparantly the AUD & NZD(the most undervalued)needing to make up the report suggested about 40% against the USD... Ouch!<McGrin>

barnacle bill$2500 gold#5298305/03/01; 13:05:10

To All:

Last week on this site or Gold-Eagle was a message about an article in Forbes. The article had something to do with gold at $2500.00 wasn't that far-fetched after all.

Does anyone know the publication date?

Barnacle Bill

R PowellTannehill or anyone in the know#5298405/03/01; 13:38:07

Tannehill mentioned (52979) that the last BOE auction was settled with paper. I heard rumors of the same but never any solid confirmation. Is this indeed true?
Galearis, your earlier post refering to Sharelynx's link to silver stocks drawdowns is good information, thanks. Sector also mentioned it at G-E with due credit given to you.
Old Yeller, thanks for the heads-up and link to Fredbear's post at Prudentbear. Either Fredbear gets around or there are many Fredbears. I see him in many places.
Peter Asher/ Black Blade, the bursting of the debt bubble will be mightier than the dot coms, no? Not yet, though, I'm still getting credit card offers in the snail mail almost daily.

TheStrangerR Powell#5298505/03/01; 13:50:49

Below is an email exchange I had with the Bank of England after the last sale. The "Stranger" pseudonym was not used in the original correspondence.

Please verify that the gold auctioned by the bank this week is being transferred in physical form and not just in the form of receipts. I am concerned that, due to leasing, the bank is unable to come up with bars that are free and clear for delivery.
Thanks for your attention to this request.


Dear Mr Stranger:

Individuals who have bought gold through the Bank's gold auctions can decide on their own settlement arrangements, the Bank is content for them to do either, physically transfer the gold elsewhere or via a book entry transfer. These arrangements were set out in our Information Memorandum at the following address

The credit risk in gold deposits is managed in exactly the same way as credit risk in other products (eg dollar deposits or interest rate swaps). For more information on this visit the management of credit risk section in the foreword to the EEA accounts available on Her Majesty's Treasury website at

You may be interested to know that the National Audit Office concluded that the UK had achieved value-for-money in the gold sales programme.

Yours sincerely

Malcolm Shemmonds

R Powelltwo fer day#5298605/03/01; 14:26:54

POG was up and the all-important lease rates were also higher but the XAU was down about three and one half percent.
POG is starting to display a nice, gradual uptrending motion. Perhaps this will get noticed by the chartist, money managers. They'll see something like that and think, "the trend is my friend" and jump on board with long futures positions. Maybe?

R PowellThe Stranger#5298705/03/01; 14:30:18

BOE settlement

LafisrapCOMEX gold and silver warehouse stocks-May 3#5298805/03/01; 14:51:37

13,567 ounces of gold were added to COMEX gold stocks today (~+1.6 percent). See link for details.

Charts of COMEX gold and silver stocks at:

Tombarnical bill - Forbes Gold $2500!!!#5298905/03/01; 15:09:18

Forbes Magazine Capital Markets
July 24, 2000
Even as Alan Greenspan frets about inflation, most investors have given up on hard assets. Leigh Goehring keeps the faith.
Gold At $2,500?
By Susan Kitchens
Leigh Goehring manages over $400 million worth of metals, energy, and paper stocks for Prudential Investments in Newark, New Jersey, and manages them well. Over the past five years, his Prudential Natural Resources fund has returned an annualized 10.9% --modest compared with the S&P 500's 24.2%, but impressive considering the depressed state of most hard-asset prices during that time. Last year Goehring outpaced the S&P by 24 percentage points. So far this year he's ahead by 15 points.

What excites Goehring these days? That most unfashionable of metals: gold. "I am a raging bull when it comes to gold," he declares. "In times of inflation, people always end up just gravitating to it."

But hasn't the information revolution led to vast productivity increases that have, in turn, consigned inflation to yesterday's fears?

Goehring doesn't see it that way. Despite the fact that he is dealing in what he calls "an out-of-fashion industry," he thinks raw materials still make the world go around, and that the fall of the Soviet Union left the world awash in cheap commodities.

Now, however, Russia is beginning to develop again. It will consume much of the commodities it has dumped on the world market--and this at a time when demand from Japan and other commodities-hungry Asian countries is on the rise again.

Goehring: "The period where the U.S. economy could expand without fear of inflation is quickly coming to an end." He recommends that every investor hold as much as 20% of his or her overall portfolio in commodity-related stocks.
In making the case for gold, Goehring points to the relationship between the price of an ounce of gold and the level of the Dow Jones Industrial average. Over most of this century, the Dow traded at eight times the price of gold. As recently as 1980, when gold spurted to $800 an ounce, the Dow and gold were at parity.
But today the Dow/gold multiple is 44, an all-time high. "This ratio has stretched too far," Goehring insists. "At some point it has to snap back and even out."

In theory, Goehring says, the price of gold could go as high as $2,500 an ounce. "If all of the dollars in circulation (currently $560 billion) were backed with gold, the implied price would be about $2,500." Goehring concedes that central bank-selling of gold makes $2,500 an ounce unrealistic anytime soon. But equally unlikely, in his view, is a Dow/gold ratio that remains seriously askew. "In the next ten years, something will cause gold to rebound sharply. We can't be sure exactly what, but something will happen."

The best way to play gold, Goehring says, is with shares of mining companies. His favorites are Newmont Mining, in the U.S., and South Africa's Harmony Gold Mining. He likes Newmont for its promising new Yanacocha mine in Peru. Harmony, he notes, has been successful at buying marginal mines, cutting costs and increasing the productivity of its work force.

Goehring is high on aluminum, too. In 1989 the former Soviet Union satisfied a mere 1% of the Western world's aluminum consumption. With the FSU's collapse, that ratio jumped to 11%, and prices collapsed from $3,260 per metric ton in 1988 to just over $1,000 per metric ton by 1993.

Today aluminum fetches $1,580 a metric ton. Goehring predicts it will shoot to $4,400 a metric ton in the next five years, as Russia's internal demand grows. "Once Japan starts to grow again, there's going to be another big, one-time increase in demand, just as the supply starts to shrink."

Goehring's pick for aluminum companies? Texas-based Kaiser Aluminum Corp. Platinum? Palladium? Goehring likes them. The automobile industry, which needs both platinum and palladium for catalytic converters, has been consuming 9.5 million ounces a year. Platinum's price is already at an 11-year high of around $580, and Goehring expects the price to continue to go up. With Russian inventories shrinking, Goehring predicts a global shortage of the metal. "Palladium has some of the best supply-and-demand fundamentals out there. The price is going to skyrocket." Stillwater Mining, based in Columbus, Montana, is Goehring's top choice for exposure to platinum and palladium.

The price of oil, already up 246% in the past year, is headed higher, Goehring forecasts, as demand from China, India and other big emerging markets climb, and proven reserve estimates have been grossly overstated. Approximately 40% of Goehring's fund is invested in oil-related companies, with most of that in oil service companies. He especially likes Aberdeen-based Stolt Offshore, a contractor to the offshore oil and gas industry, and Bouygues Offshore, a subsidiary of France's Bouygues Group that's listed on the New York Stock Exchange.
Say this for Leigh Goehring, he practices what he preaches. "My money is where my mouth is: 100% of my personal portfolio is in commodity-related investments," he says, pulling out a recent bill for the storage of his personal gold and silver bullion holdings.

Randy (@ The Tower)Fed adds $10.75 billion in temporary reserves to banking system today#5299005/03/01; 15:22:54

Of this, $2 billion were via 28-day Rp's, $5.25 were via six-day Rp's, and $3.5 were added via overnight repurchase agreements.

Further, the Fed indicated it would also add permanent reserves through the purchase of inflation protected U.S. Treasuries for Friday delivery. The size of the operation was not indicated.

barnacle billGold at $2500#5299105/03/01; 15:38:53

To: Tom msg.#52989

Thank you so much for posting the article.
You saved me a good deal of time.

R Powell"Futures" magazine article#5299205/03/01; 15:58:30

Somewhere in the recent past week or so, somewhere in the Kitco-Gold-eagle-Usagold tri-forum area, I read that the May issue of "Futures" would have an article concerning gold. I believe Uptick reported this and knew of it as he is the author of what I now see on page 26, "Precious metals: Bulls still playing the waiting game".
Haven't read all of it yet but did notice the line, "perhaps no other market has advocates who are as emotionally involved as does gold." Do you suppose Uptick is familar with Farfel?
The magazine lists as it's site but I don't know if the article will be there or just subscription advertisement. I get the publication for free- a present from my broker. First Moutaingold and now Uptick. We live among celebrities!

slingshotTurning the Corner#5299305/03/01; 16:41:32

Auspec#52946 Tannehill# 52979 Solomon Weaver # 52949

Auspec, read same editorial. Wonderful information.
Tannehill. Goldbugs scramble to unload gold at $200/ounce to buy TECH STOCKS? Scare the pants right off us?
I am more of a pesimist than an optomist ruling on the side of caution. Well how about this Headline!

Gold Drops to $ 100.00 Per Ounce, Bullion Dealers Beginning To Find It Hard To Meet Demand!

That headline sounds a little out of balance. There are two ways to take this statement. One that it is completly BOGUS.
Two, should it happen Gold at $100.00 will be a flash in the pan. It can only rise. The demand and supply will rule the day.
So, my topic heading "Turning the Corner" is somewhat of the prelude to the above headline.
Over the past 8 months I have had conversations about Gold. You would have thought I had a bad case of Smallpox.
Now, To my Delight, more people are talking about Gold and Silver. When they ask me questions about PM's I just refer them to USAGOLD and especially the Forum.
As to why they have been asking questions? Gasoline is up. Groceries are up. Looking to preserve wealth.
You see I thought these people were HARD CORE JOE SIXPACKS! That really shocked me. But $100.00 an ounce as compared to Tannehill's $200.00 per ounce. Pure speculation now. If all these BOOMERS are somewhat straped for cash with the debt they have run up. Wouldn't they jump at the chance to fit it their budget a few ounces of gold at that price? Producing the demand and the rise in price of gold.
To me it is a win/win situation considering what the price of gold is now. Even if gold went to $100.00/ounce the bounce I believe would be awesome. So, fellow Goldbugs KEEP your SKIVIES ON. (OLD NAVY SAYING)
SOLOMON WEAVER , A True Knight and a Gentlemen.


Randy (@ The Tower)No chance for Argentine "dollarization" now. Overwhelming support shown form euro plan.#5299405/03/01; 17:24:38

BUENOS AIRES, Argentina, May 3 (Reuters) - Argentina's Economy Minister Domingo Cavallo lauded on Thursday the "overwhelming" support from Congress's lower house to add the euro alongside the dollar in the peso's 10-year-old currency peg system.--------

Following a vote with 138 in favor versus 16 against (with 13 abstentions), Cavallo told reporters, "It (the euro plan) is a key piece of the economic program to bring stability to Argentina."

The dollar has now lost another incremental leg of past support.

Tree in the ForestSilver & Kodak#5299505/03/01; 17:50:35

I had an interesting conversation today with someone who knows a lot about Kodak's silver sources. Definitely an insider. VERY inside. Well actually it wasn't too interesting because he wouldn't tell me much. These are company secrets. But I did learn one thing. I thought (and perhaps most of us thought) that a large silver user like Kodak would get all of their silver directly from the mines. Not so. They have a diversified set of sources including mines, smelters and bullion dealers. He didn't use the word bullion banks, but I think he was referring to the bullion banks as they are after all bullion dealers. I asked about Comex. He wouldn't say too much there but he did allude to the fact that the physical dealers they used also played "COMEX paper". He described them as "reliable bullion dealers". Hmmm. Wasn't Handy & Harmon a "reliable bullion dealer"?
USAGOLDT.Remital. . . .Tribute to a friend#529965/3/01; 18:45:09

I wanted to make note of this comment by GATA's Bill Murphy:

"What was not was that The Gold Cartel could not take
gold below unchanged on the sell-off. Somebody was there
to take them on. Those somebodys have been there for
weeks. Quietly, some big boys are making a move on gold.
One little positive clue after another is showing up
that appears to be telling us something is "up."

I don't know how many of you remember T.Remital who posted here in the early days. Mr. Remital until his retirement was one of the top working experts on gold in the world at the top levels of both the U.S. government and in the private sector on Wall Street -- a brilliant man, a patient mentor, and a friend. Most of us didn't know who he really was because of his simple humility and humanity when posting here. He just liked being one of the group. He told me to watch gold stocks (the XAU) carefully at turning points in the gold market because the deep-pocket insiders will move that market before the gold price itself moved, and they might be moving it on knowledge the rest of us probably don't have. That's why the Murphy statement is intriguing. He said that strong movement in the XAU was the result of big money betting on a higher gold price. Unfortunately, T's health is not what it should be. The last time I talked to him (several months ago) he told me that gold was staging for its biggest move since the 1970s -- that the dollar-SDR-fiat money crowd could no longer hold the line. I miss our conversations, my friend, and miss your regular input.

Keep in mind that all of this is one man's opinion. Those who bet on it do so at their own risk. None of us know what's going to happen. Let's just say that more than one old-timer in the gold wars is taking the lay of the land with a half-smile on his face. The conversations at the FOMC published by James Turk, Reg Howe, et al -- only verify what we've known for a long time -- far from the barbarous relic of past monetary regimes, as some have described it, gold plays a critical role in every serious money-man's repertoire. You can take that one to the bank -- not the bullion bank of course (smile).

Black BladeU.S. Energy Sec'y warning rockets U.S. gasoline, oil#529975/3/01; 18:52:30

NEW YORK, May 3 (Reuters) - U.S. gasoline prices sprinted on Thursday after U.S.Energy Secretary Spencer Abraham warned summer gasoline prices could top last summer's record prices.

Black Blade: Along with higher unemployment, declining earnings and consumer confidence, nervous investors should begin to look for safe havens such as gold as the energy crisis worsens and the economic situation deteriorates. A sign of change is that tonight Sen. Diane FineSwine (D-CA) is now talking of increased energy production - soon she will be eating caribou and wearing baby seal fur.

slingshotTree In Forest Msg #52995#529985/3/01; 18:55:35

Hello Tree in Forest,
I have read many of your post and I'm always interested in your point of veiw. So I have a question for you to ask your insider. Will KODAK be able to acquier enough silver for their film production or will the flight to poors mans gold overcome industrial requirements. Subsequent will brokers sell industrial or to small time investor first?
Which way will the Silver flow?

Black BladeCalifornia says needs U.S. help on power crisis#529995/3/01; 19:04:06


WASHINGTON, May 3 (Reuters) - A California energy official on Thursday said federal intervention is needed to cap the sky-high price of wholesale electricity in his state, even as consumers conserve more power and more plants come on line to cope with peak summer demand starting this month. The plea from Richard Sklar, a senior energy advisor to California Gov. Gray Davis, came on the same day the Bush administration announced new energy conservation measures for federal offices on the West Coast.

Black Blade: The Grasshoppers come on their knees with hat in hand as the energy crisis becomes a burden. Even so it is expected that there will be about 35 days of rolling blackouts in Kalifornia. The state legislature is expected to pass a "Windfall Profits Tax" and to order the out of state power generators to reimburse the Grasshoppers for "price gouiging." Yeah, that will give incentive to the out of state power providers to continue selling power to the state. "…and they played, sang, and danced all summer…"

Tree in the Forestslingshot#530005/3/01; 19:13:59

I think silver (or anything for that matter) will flow to whoever offers the highest price and/or to big users first. Kodak is a member of the Silver Users Association which Ted Butler has discussed at length. They are located in Washington DC the better to lobby and strongarm the government into favorable policies for their members. Interestingly though, they were helpful in lobbying Congress to have precious metal tax rates reduced to match other capital gains rates. So they aren't all bad. My "contact" at Kodak is not a friend, merely a contact. I will talk with this person again when the market reaches a crucial juncture. That may not be long now.
USAGOLDBlack Blade and All . . . .California Dreamin'#530015/3/01; 19:15:54

I want to first of all thank you for the extraordinary contribution here. I have talked to a number of USAGOLDers who always ask "Who is this Black Blade?" Want you to know that your efforts are greatly appreciated.

One of the advantages of having a job like mine is that I get to talk to people from all over the country (the world really), and get to feel the pulse on the essentially human level.

I would like to open the door to our California posters and lurkers and to boot up, drift casually to the "Post a Message" prompt and give to us straight and simple what's happening out there from the "man on the street" (or "stuck in the skyscraper"). I have heard some incredible stories and I assure you, the rest of the country is not getting the whole story. Here's where the internet plays an essential role: Let us know what's going on "on the Coast," because what's going on there could very well be in all our futures.

I know this might be a little off topic. . .but it all comes back to gold -- systemic risk from everyday people unable to cope with extraordinary energy costs, like the small print shop with the $4000 per month utility bill, or the wealthy homeowner with the $12,000 light and gas bill. (Thanks VdT).

There's more where that came from. . . . .

Let the people know. . . . . .

Black BladeNatural Gas Price Higher In California, Lower Elsewhere#530025/3/01; 19:16:29


In Southern California, where demand for gas from the troubled electric generation sector continues to keep spot prices well above other market areas, the average monthly spot price for May rose 19.7% to $14.97/MMBtu from $12.51 in April. Spot prices there are 394% higher than in May 2000 when the average was $3.03. ``Except in California, spot-gas prices declined this month largely because there has been so far very little heat-related gas demand from power generators. That, in turn, has given gas utilities
a chance to inject healthy volumes of gas into storage for next winter, which takes a lot of pressure off the market,'' said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC's Gas Market Report. ``For California, prices rose mostly on speculation that there simply will not be enough gas at some point in the months ahead to meet the needs of both the power generators and companies buying for storage.''

Black Blade: It should be noted that Kalifornia's problems also include an extremely high tariff on NG piped in on unregulated pipelines and NG. There is also the political and economic risks associated with selling NG and power to Kalifornia. Therefore costs are higher in the state. Small businesses in the state are now in severe distress and Silicon Valley is worried as more companies consider relocation outside of the state. This situation will continue to pressure the state's economy and will surely spread as political solutions are enforced rather than the free-market. Looks like "gold" lifeboats will come in handy.

Tree in the ForestKodak silver#530035/3/01; 19:26:17

I should add one more thing. He was unwilling to be specific regarding the frequency of physical silver deliveries to their facility. Kodak has stated publicly that they have "purchased" enough silver for 2001. However, the question remains whether they have all of this silver on site or just promises of delivery. My bet; they don't keep more than a quarters worth of physical silver on site and probably not even that much. So what they have is "paper" promises. Keep in mind these guys use a lot of silver. They must have some kind of storage facility on site but...well at this point I am speculating! LOL! I never do that! <grin> Even if they have a 6 month supply they'll need more physical come end of June. We shall see.
USAGOLDRandy. . . .Argentina#530045/3/01; 19:40:36

It is the dollar, not Madonna, singing the refrain. More and more, I think we will see countries hedging their reserves with both currencies. If nothing else, it's good common sense. We should not lose sight of the fact that it was less than a year ago that Argentina was talking about "dollarization." What has changed?? Goldization would be even better -- the third leg on the monetary stool. Sometimes we forget what the bottom line is on the euro. Consider for a moment if the Argentine Break spread (for instance) to Japan. Now when you start thinking like this, gold is even a better option because it truly is the currency without a country (and attendant monetary policies).

Also, couldn't help but notice that someone posted (Beesting, I think vis a vis Rep. Ron Paul), that von Hayek had posited a free gold concept long ago wherein gold would compete along side other currencies at the free choice of the saver. (Isn't that what the ECB is subtly suggesting?) I remind you that I mentioned a while back that in my opinion Hayek was the real heavyweight. . . .followed by Rothbard . . . ..The Austrians rated by MK, FWIW. Vindication . . . . thanks Beesting. I wish I could remember the gold advocate at a public forum years ago who shocked his audience when he said that he didn't think there was a reason for a gold standard in practical terms as long as savers could own gold. I know it shocked me (as a young proponent of the gold standard), but I never forgot it.

FOA, maybe you'd like to get in on this???

slingshotTotal Information Sharing. #530055/3/01; 20:19:37

USAGOLD MSG # 53001 Black Blade MSG.53002

Well its seems the tables are about to turn. We have poked a little fun at those Kalifornia prune and raison pickers.
I am sure at this link no one hold any malice against anyone. I call on ROCKGRABBER to come forth. I believe your words were sincere. Timing is critical.
To Black Blade; As we all at this forum have used the generic term Grasshopper as a derogotory comment as to the general populace of California. Myself included. Should at this time we refrain from the use of this term in order to
further our quest in the investmement in gold and our preservation in wealth. Still reserve the right to poke fun.

Yes, USAGOLD, Close ranks. (Military ORDER)


Chris PowellProspects strengthen for GATA African Gold conference#530065/3/01; 20:22:21

We hope to unleash African on the
Exchange Stabilization Fund.

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:

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WW Oracle@USAGOLD: "Goldization" for Argentina?#530075/3/01; 20:23:22

But they just sold their last driblets of gold -- to US! Thank you, MK.
USAGOLDWWOracle. . . . .Argentina #530085/3/01; 20:45:40

They did sell all their gold, didn't they. Oh well. . .Sort of reminds me of BOE's letter to the Stranger, where we are told the Old Lady of Threadneedle St. "received value" for her gold. Yes, she did. "How much" and "what kind of" value are left open to question.


"Honey, why did you sell our house for $5?"

"I don't know why you're so upset, dear. After all, I did get value for it."

Onward, fellow goldmeisters. . . . . . ..

slingshotT.Remital Msg 52996#530095/3/01; 21:00:55

Irish Toast

To Remital,

May you be in heaven a half hour before the devil knowns you've gone.

auspecWhy Shares Move First#530105/3/01; 21:04:12

We frequently hear that gold shares move prior to a upward movement in gold, yet it is essential to nail down the reason for that initial stock movement regardless of how obvious it is, once reflected upon.
Two statements from different sources today tell the story:

1. USAGOLD #52996- "He {T. Remital} told me to watch gold stocks {the XAU] carefully at turning points in the gold market because the deep-pocket insiders will move the market before the gold price itself moved, and they might be moving it on knowledge the rest of us probably don't have." Thank you MK.

2. From Bill Murphy today- "I maintain my stance that we are days, weeks and, at worst, months away from some major fireworks for the price of gold."

"From a very savvy Café member who is very well connected in the gold industry:

"He also said he was told by a senior Goldman Sachs UK executive that something has changed in the gold market recently - more demand and less supply. Bullion bankers are buying gold shares." END

Comment-- Bullion bankers are buying gold shares! That's fairly inside wouldn't you say? So the early people into most any play are "smart money" &/or "inside information players". Fact of life. There have been questions and comments on this Forum as to WHO actually has been moving the TSE these last # of months, here's a good answer.
See, if you had the proper mentality to be an elitist and had no soul, you too could make the easy bucks w/o going to all this trouble to understand market dynamics. Thanks for considering,

auspecTree in the Forrest#530115/3/01; 21:16:28

Canuck Repost #48914 & 48916 {2-25-01}

Sir Tree,
I believe all of our answers as to CB selling lie within this post of Canuck's. It should probably be laminated and put permanently on the computer! Thank you Canuck, Red Baron and ANOTHER!

Canuck (2/25/2001; 11:05:09MT - msg#: 48914)
From the Red Baron
As a novice to gold discussions I highly recommend the 10 part essay from the Red Baron, LMBA: The expose located at Gold-Eagle, Digest. {}

To all 'newbies' and novices (as I) the author in a detailed discussion examines 'paper' gold, the link to oil and IMHO introduces ANOTHER.

ANOTHER's theory of gold for oil (oil and gold never move in the same direction) is an amazing concept.

From episode #9:

First, if the article is correct that the Saudis and other Arab nations have been receiving gold bullion as payment (as well as military hardware) for oil and for favours rendered in keeping the price of gold from rising (in spite of projection production peaks as early as 1999) then where can we look for evidence of gold showing up in the official statistics for the Middle East. Does the World Gold Council statistics provide such evidence that shows an increasing or constant flow of gold into the Middle-East coffers since 1987? Evidence might resolve on of the most nagging questions: where is the gold being sold by CBs going? Perhaps we have found the missing piece of the puzzle.

Second, if true, the US would have a particular interest in coordinating the funnelling of gold bullion into the Middle East in order to constrain the price of oil from rising to $40/barrel as it should be given the demand/supply situation in crude oil and maximization of Middle Eastern utilization capacities. The US wants to maintain the illusion that oil is not becoming increasingly scarce in order to avoid price inflation at home thus exploding the market bubble.....they want to avoid a 1973-74 crisis at all cost. Stability in oil prices may have come through past transactions of US treasuries to the Middle East in exchange for "price stability favours" but the Arabs increasingly have requested the real store of value: bullion. Thus the Americans may be actually orchestrating the gold sales of other CBs in the interests of "global oil price stability" objectives convincing the Australians and lesser players to sell their gold for the short term objective of containing a price rise in oil that the Saudis are under increasing pressure at home (Islamic pressures) to let go (as the Sheik suggests) .. Note that "officially" the major gold holders, the US, Switzerland, Germany and France (and most certainly England) have hung on to their CB supplies while other lesser players have been "convinced" to sell under the ruse that "gold no longer plays the hedge or security roll it once did."

Third, the LBMA is most certainly a critical player brokering the exchange of gold for oil trading (the Red Baron's plethora of LBMA exposes points to this reality). Recent revelations of daily volumes of 30 million ounces of gold trading daily at the LBMA in London (twice South Africa's annual gold production) may point to the increasing pressure on appeasing the Saudis (and other Arab nations) with gold to keep oil prices in check. The Rothschilds and other merchant banking players with an interest in gold (probably the Morgan Stanley group as well) are also involved in these daily deals. Indeed, a line is most certainly drawn between Washington/New York, London, South Africa and the Middle East (not necessarily in that order).

Fourth, based on superb analysis by Deutsche Morgan Grenfell on the relative purchasing power of the US dollar in terms of gold is worth analyzing in the context of the gold to oil price ratio. If the purchasing power of the U.S. dollar in terms of gold bullion has declined to a ratio of less than 0.100 in 1997 compared to gold's purchasing power of 2.000 then this suggests that the US dollar is grossly overvalued in terms of scarce resource (gold), that gold is grossly undervalued as may be oil.
Fifth, the ultimate irony is that the laws of demand and supply on scarce commodities like oil and gold have been "nakedized" or "nullified" by an illusion that has elevated an infinitely plentiful fiat currency ( the US dollar ) to mythical proportions. It is in this kind of world in which we transact in the so-called "market."

And from exerpts of ANOTHER, episodes 6-9:

To avoid a spiking oil price the Central Banks first freed up the publics gold thru the issuance of various types of "paper future gold". As that selling dried up they did the only thing they could, become primary suppliers! And here we are today. In the early 1990s oil went to $30++ for reasons we all know. What isn't known is that it's price didn't drop that much. You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! Yes, gold has gone up and oil has stayed the same in most eyes. Now all govts. don't get gold for oil, just a few. That's all it takes. For now! When everyone that has exchanged gold for paper finds out it's real price, in oil terms they will try to get it back
Gold is cornered. Plain and simple. No complicated theories, no options problems. The commodity value of gold was forced so low in paper currency terms that all of the new mined gold, going out some 10 years is spoken for. Between the third world buying physical gold and the jewelry industry ( same people buying ) there is none left for the oil states! They do value oil in terms of gold, but not IN the paper currency price of gold! How much is gold worth in terms of oil value? Just stop supplying gold to them in ultra cheep US$ terms and you will find out by watching the currency price of oil! In any event, LBMA has traded so much paper/oil/gold that any rise in the currency price of gold will implode them. The CBs must become the full primary suppliers of gold or the system as we know it is done.
One last note: No form of paper wealth will survive the financial crush once the CBs stop selling! NOTHING!
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. From that time, early 1997 LBMA was running full speed just to stay in one spot! In other words paper volume had to increase to the physical volume on a worldwide scale, and that was going to be one hell of a jump. It could not be hidden from the news any longer. This was not far from the time that "Big Trader" said that "if gold drops below $370 the world would see trading volume like never before seen". The rest is history. Now the CBs will have to sell 1/3 to 1/2 of their gold just to cover what's out there
There is only one oil state that counts! ONLY one! They have made it very clear how important gold is to them. If they had started buying outright, gold would have gone to $5,000+ in days. And only a very few million ozs. would have been purchased! The message has been for some years, "we will accumulate thru the back door, using paper deals if you keep the price at or below the cost of production". Do this and oil will remain THE driving force of the world economy! FAIL THIS AND WE WILL PRICE GOLD IN DOLLARS AT THE TRUE VALUE OF OIL TO THE WORLD!

Amazing stuff. A long, long read but Red Baron lays this out well with ANOTHER"S grand finale. A prerequisite to this reading is the understanding of oil, it's reserves and 'swing share'.


P.S.: To the 'older' astute posters; who is 'Big Trader'? END

Comment- WOW {again}.

Peter AsherUSAGOLD (5/3/01; 19:15:54MT - msg#: 53001)#530125/3/01; 21:29:19

Michael,did you miss this one?

Interview with a Grasshopper --Peter Asher (04/29/01; 15:06:33MT - msg#: 52822)

Last weekend we were in Berkeley and the following is from a nephew who wishes to be quoted by his CB handle "Little Snoopy." Describing himself as "A formal Berkley Liberal in my twenties, now a Hayward Conservative in my forties" he had this to say.

"Deregulation: When Pete Wilson in the legislature in '95 deregulated the power industry, I thought it was a disaster because the power industry has to be a regulated service for the greater good of the state and all the people in it. The people being not only the customers, but also the businesses and the industries that require power for their production and services.

Similar to the deregulation of the airline industry, you have a few large corporations buying out the smaller mom and pop businesses. Therefore you have cyclical swings in the marketplace between outrageous prices and services for free, interruptions in service, and spotty market conditions that are unpredictable.

Breakup: When the legislature and the governor deregulated PG&E, PG&E set up two separate companies, with the larger corporation as the parent entity, and the smaller as the utility that provides the service to the state. In doing so, they shifted its wealth to the parent corporation and allowed the parent corporation to go out of state and buy power-generating utilities all over the country.

By shifting 80% of the wealth to the parent corp., the utility was left with the responsibility of power transmission and the maintenance of the power facilities after being gutted and left as an empty shell.

Two weeks ago, Grey Davis struck a deal with Southern California Edison to buy the utility lines as collateral, by paying or assuming Southern California Edison's debt to the power providers. In doing so, the state legislature and the governor have now assumed responsibility for power transmission lines in Southern California that are 20 to 30 years old and need high maintenance. These will need to be replaced within the next 10 years or so. Southern California Edison made out like a bandit. The legislature will have pay the utility company for the maintenance crews for the utility lines that the state now owns!

A third world example of what happens in power outages: In parts of Yugoslavia and Latin America, the factories, the banks and production facilities routinely shut down for hours at a time on a daily basis, during blackouts or brownouts.

This summer in California, we're going to face unpredictable, spotty blackouts and brownouts, sometimes lasting for hours if not days. They will happen when people least expect it, in unpredictable places. Parts of Silicon Valley will be blacked out, traffic lights will be out, freeways will come to a stop, and banks will close. We'll have to have people out there like during the New York Blackout with flashlights at every intersection.

The reason PGE does not want to tell you where the blackouts will occur is to prevent looters and other criminal elements who might say we've got a free ride in this area because the power will be out for the next six hours. If you have these kind of crises and no one knows where they will happen, the results will be totally unpredictable.

I work in a production facility where most of the machines are run by computer. When we are in a production mode, the computers are operating the machines. Most of the time, if the power goes off, we can hit the emergency stop button, we can stop the machine in the middle of the process and nothing happens. * When you are in a critical cycle, that is when the machine has to complete a full cycle before it completes, it may crash in a power outage, and you will not only lose the software, but perhaps also have an accident and break the tool and wipe out the part..* The production part you are working on could be a very simple component, or it could be a very expensive piece of hardware, (Ex, $3000 piece of titanium) in which case the moment the tool is ruined you have also lost thousands of dollars worth of work.

The same thing applies to people working on computers in the high tech industry, such as software, data processing or critical programs. When the power goes out, they lose everything. This is the real collateral damage the power outages will create, and no one will be able to predict it. There was a symposium this week on possible business repercussions to the Silicon Valley area in the event of major power outages. Some of the estimates for production losses run as high as forty billion dollars this summer. Our gas prices have gone from $1.75 to $1.95 in the last six weeks. A gas station attendant said it might go as high as $3/gallon. If that happens, the industries won't be able to afford it. The costs all eventually get rolled into what the consumer pays. That's us. And the poor people hurt the most, because they can least afford it.

This summer, July to October, we're going to be looking at major social disruptions in California."

Black BladeSlingshot#5301305/03/01; 22:05:09

The term "Grasshopper"(taken from Aesop's fable the "Grasshopper and the Ant") refers simply to all who do not take responsibility for preparation but would rather rely on others to provide for them. This does not mean that all Californians are Grasshoppers. Grasshoppers exist all over the World. Those here on the forum I would hope are "Ants" where they take responsibility for their own preparation. The problem with Grasshoppers is that they know that there are potential fundamental problems such as that Bull markets eventually come to an end, that there's an energy crisis, that the economy is not looking so good, etc., yet they do nothing to defend themselves and they believe that someone else will take care of things. The have to learn that the only people that they can rely on are themselves not others. The California Grasshoppers haven't built the proper power generating facilities and infrastructure that they need and yet they believe that it is the responsibility of other regions to serve as energy farms for their benefit. Grasshoppers expect the economy to boom forever, and should the economy go into a recession for example, they believe that it is the responsibility of others, "government, etc. to come to their rescue while they whine about how the rest of the world is so unfair to them. When they should prepare by having sufficient food, clothing, energy, investment portfolio insurance such as gold, etc. they only whine instead of taking action. We are about to enter into a "Brave New World" and the Grasshoppers will have to be dragged into it screaming and kicking or else suffer as a result. Those who make the transition and those who have prepared will be the survivors. Recent news stories and analyses suggest that we are in or slumping into a recession. History as a teacher demonstrates that those who have gold during times of uncertainty survive relatively unscathed. Who has gold? Grasshoppers or Ants? Cheers!

- Black Blade

NetkingSilver amount for next mint. #5301405/03/01; 22:23:32

Can anybody confirm for me the actual amount of silver that will be purchased* by the US Mint on market towards the end of this year(?)for the next silver mint.

(*it has been publicly confirmed mint supplies have been used up with needed inventory to be purchased on market)

Black BladeUSAGOLD #53001 - All#5301505/03/01; 22:44:39

Thank you. I am glad that the energy crisis and gold updates are reaching out. I guess that I could reveal some of my background though my position could be compromised if I get too revealing. I have worked in academia and private industry as a physical scientist for over 20 years. I have 2 advanced degrees and I have done research at one Northwest University, worked in exploration activities for both mining and energy concerns around the globe. I recently closed my office in Nevada and I am now concentrating my efforts to start up operations in the area of Natural Gas exploration in the Western US. I continue to keep contacts with colleagues who keep me apprised of current research in the sciences, and the economics and condition of both the mining and energy industries. And yes, I'm a repentant former California Grasshopper who reformed in the 1970's. I am now proud to be an Ant.

I believe that the current energy situation in California will continue to spread beyond the borders to the rest of the continent of NA. My Californian friends (both Grasshoppers and Ants) are a good study as I learn much of how they think about the current energy situation. Amazing as it seems, some believe that the crisis is contrived by the big bad energy Robber Barons, while others tell me that the energy situation is much worse than reported. Some even tell me that they believe that come summer, there will be daily rolling blackouts. And yet another friend who is a hydro-geologist for the state says that the low Sierra snowpack will seriously impact hydro-power generation this year. Similar situations exist throughout the Western region. US mining companies are experiencing high energy costs and many friends and acquaintances tell me that there could be several mine closures as long-term energy contracts begin to expire. Recently Newmont reported that the state of Nevada has guaranteed a reprieve from higher energy costs. We shall see. I too await to hear from our friend Rock Grabber, and what about PH in LA?

- Black Blade

slingshot(No Subject)#5301605/03/01; 22:50:50

Well Black Blade.
Thank you for your reply. the Grasshopper and the Ant is a very good story. Still I concur with USAGOLD that all information can be vital at this time.

There have been a few post that have not reach the forum.
Operator malfunction I persume.

For Rockgrabber, What's happening on the west coast?


working-kirkInterview about the Fed#5301705/03/01; 23:06:35

Some said they couldn't find the link

click on the link about and it will take you to financal sense web page. If you click on complete show or "Ask the Expert" for Wednesday and it should bring up real player

Randy (@ The Tower)This has been on our radar screens for a long time.#5301805/03/01; 23:44:33

Just one of many giant steps being taken these days. But meanwhile, the world's investors slumber blissfully unaware...

------From link above, courtesy of WGC-----

"The governor of the People's Bank of China, Dai Xianglong, has confirmed that China will launch its first gold exchange in Shanghai in the second half of 2001. The planned system of gold distribution will be abolished, with producers being allowed to enter the market directly. At the same time, the system by which retailers, wholesalers and processors have to apply for licences for gold transactions will also be scrapped. He also said that China would gradually relax restrictions on gold imports along with the country's foreign exchange reforms, but gave no firm timescale for this."

slingshotBlack Blade#5301905/03/01; 23:48:46

A scientist for Twenty Years with Two Advanced Degrees.
Looks like we are in the same boat. Looking to preserve our wealth. Well Black Blade turnaround is fair play. I have been well schooled in thermodynamics as to the expansion or contraction of certain metal within a heat range and its properties to be exploited to the outermost envelope to extract the most effeciency. Can you guess what I do?

I perfer to be the Jester.

$300.00 Titaniun $ 96.000.000 my part.

slingshotRandy#530205/4/01; 00:42:35

Are we the only ones awake?

Black BladeJobs Situation Signals Tough Times Loom#530215/4/01; 00:45:16


WASHINGTON (Reuters) - More Americans are lining up for first-time unemployment benefits and job cut announcements rose further as the world's richest economy stumbles, signaling tough times could be ahead for several months. ``I think that we are going to see more bad news on the economic front than good news probably over most of the summer,'' said David Resler, chief economist with Nomura Securities International in New York. ``I don't see what it is that is quickly turning things around.''

Black Blade: US unemployment figures come out this morning.

Slingshot - I'm not very good at riddles, so I give. What's the answer? You almost sound like a metallurgist that I know. He was always quick with riddles. ;-)

Black BladeFrustrations Turn To Despair In Shadow Of Energy Crisis#530225/4/01; 00:58:34


Sixty-five percent of small business owners in San Diego are worried that electricity rate hikes could force them to close their doors this summer, according to a survey conducted by the San Diego Business Improvement District Council.

Jimmy Sims, owner of Moveable Eats on Garnet Avenue, closed his restaurant's doors a week ago and is only taking catering jobs. After a year in operation, the business was growing fast but not fast enough to keep up with an energy bill that went from $800 to $2,200 per month.

Black Blade: And we are told that inflation is benign. Food and energy is not calculated in the PPI and CPI core rates, and the dubious voodoo statistical trickery of "seasonality" filters just add to the cruel joke. Then there is also "hedonic" pricing. Mr. Sims could probably substitute hot dogs for the filet mignon.

Peter Asher@ Slingshot re-riddle#530235/4/01; 01:13:03

Are you reasearching super-conductor materials?
Randy (@ The Tower)For those who missed the related article cited yesterday by MK quoting Mssrs. Hathaway and Edelson#530245/4/01; 01:29:10,3523,842168-6094-0,00.html

"Since the Latin American crises of the early 1980s, the Federal Reserve's response to market difficulties has been to bale out anyone who has made a bad investment. Now the Fed's bale-out strategy has gone too far. No longer are the losers from bad investments confined to lenders to foreign countries, bankrupt hedge funds or bad banks. It is the US public, which has been suckered into pouring its life savings into a dangerously overvalued stock market."

"...a strong dollar does not mean lower gold prices. If the dollar continues to remain strong or get even stronger, it's a darn good sign there are big problems elsewhere in the world, problems that could easily light a fire under gold."
"As for inflation, while I do believe it is coming on a worldwide basis as central banks try to reflate out of the trillions that have been lost in stocks, it too is not needed to get gold going."
You've sure got that right, Larry. It could very well happen in an order such that the physical gold liquidity dries up in the derivative-bloated bullion banking sector prior to the dollar collapsing under its own derivative-bloat as a reserve currency.

IF (a very big "if") the bullion banking sector can play the shell game of their lives in the absence of a lender of last resort, then they may possibly engineer a smooth transition whereby the price of gold rises for a BRIEF while against a dollar with vitality remaining. However, the one condition aggravates the other like the movement of pebbles in a rockslide. When the illusion is broken it'll all come down swiftly in a heap in the final momments of reckoning, trees included.

(Reply to Slingshot: I'd have to be 'alive' qualify as 'awake', wouldn't I? Feel free to call attention to those Queen Victoria gold Sovereigns while I catch some Z's, will ya? Just post the link and tell the group what a fine addition they'd make to the caches of King Sovereigns they must surely already have. Thanks!)

Randy (@ The Tower)Gads, that wasn't very clear at all.#530255/4/01; 01:40:11

You'd probably only know what I was implying if you could read my mind.

What I meant was that if the bullion banks were supremely blessed in their ability to satisfy their host of depositors with deft reallocations of a small supply of physical, then the brief price rise I mentioned was to be taken as a brief ORDERLY rise. Orderly for a brief time, that is, prior to the inevitable precipitation of the dollar's collapse and the moonshot for physical gold as the derivative instruments (paper) are abandoned as no means to an end (other than a hard lesson in counterparty default).

slingshotfRUSTRATED#530265/4/01; 01:55:08

Black BladeGold Hedging Debate Still Furious#530275/4/01; 02:26:39


While hedging infused much-needed capital into the industry, it exaggerated an existing oversupply problem by adding ounces borrowed from central banks to newly mined supplies. You can't defeat a basic principle of economics " if you have more of something, you pay less for it. Making matters worse, an ancillary "paper" market in gold derivatives blossomed. Derivatives were intended to mitigate risk, but the lack of transparency in the market combined with an unspoken commitment by central banks to rescue firms that fall on their speculative swords " like Long Term Capital Management " has had the opposite effect.

Black Blade: The debate continues. I avoid the producers that sell forward and only have positions in a couple of unhedged (or very lightly hedged) miners. It is not necessary to sell forward production to be profitable. BTW, Barrick's losses were -$1.93 per share this time around and they claim to be successful hedgers. Hmmm... Physical gold in hand is arguably better for portfolio insurance and a good diversifier.

slingshot(No Subject)#530285/4/01; 02:33:56


Something wrong
Black BladeNewmont Mining CEO says gold demand strong#530295/4/01; 02:34:00


ENGLEWOOD, Colo., May 3 (Reuters) - Gold prices may be at 20-year lows, but Newmont Mining Corp. (NYSE:NEM) Chief Executive Officer Wayne Murdy, speaking to shareholders on Thursday, said he still sees reasons for optimism. ``Demand remains strong, production is falling and central bank selling and lending is expected to moderate in the future,'' Murdy told the company's annual meeting.

Black Blade: Time to load up.

slingshot(No Subject)#530305/4/01; 02:50:50

Black Blade And Peter Asher.My apoligies I have been havinga bad time getting to post on this forum. Well Black Blade, I had a Beautiful explanation before it got lost. NOW IN SHORT TERM I BUILD JET ENGINES FOR THE MOST SOPHISTICATED AIRCRAFT IN THE WORLD. $3000.00 is a drop in the pan. How about $ 96000.00 per unit. Rest assure you getyour moneies worth
in the savings. I wish I was in the super conductor field Thank you Peter for your vote of cofidence.

Black BladeU.S. coal shortage could spur summer brownouts#530315/4/01; 03:10:57


NEW YORK, May 3 (Reuters) - Adding stress to an already frazzled power market, a nationwide coal shortage could spawn electricity brownouts in northeastern states and in the West this summer, experts said on Thursday. While coal provides the country with 51 percent of its power, years of industry underinvestment and record prices for competing fuels natural gas and fuel oil this year have pushed utilities' coal stocks to their lowest levels since 1974.

Black Blade: We are now in the midst of an energy crisis that threatens the US economy with shortages of hydro-electric and natural gas fired power plants. Now we must contend with a coal shortage. The coal industry has to contend with numerous environmental restrictions even though we have an abundance of coal deposits. This article focuses on transportation and infrastructure.

Slingshot - that certainly explains the $3000 titanium and $96000 per unit. If titanium wasn't mentioned I would have guessed something associated with temperature control. Cool! I wouldn't have guessed it. Take care. - BB

NetkingSilver - The Herald - Tribune reports on Silver #530325/4/01; 03:47:29

Herald Tribune reports on silver.

New use for silver discovered by the Herald-Tribune when Interviewing Mr Morgan of

This is one of the few main stream press articles to appear in quite some time...Don't miss it Feature Article on Silver in Newspaper.

The HT interviewed David Morgan of along with many others, including Ted Butler, Franklin Sanders and the Silver Institute. Articles on silver do not appear in the main stream press very often, so do not miss it.. It will be available on Sunday 6 May 2001.

The following link should take you there on Sunday, enjoy!
regards Netking

slingshotBlack Blade.#530335/4/01; 04:12:41

Black Blade, Tonight has been one of those nights for me.

Let me explain about statetic metal. a block of metal is just a block till the purpose for which that metal is inteneded for is manufactured/cut/ molded for a specific purpose. The composition of that metal may have negative or positive to the application in which it will be applied.
Only the aplication of that material or part will prove to be acceptable upon installation into the parent component.

Thank you Black Blade and Peter Asher.
My post were lost but I wanted to give you both to think about.

TannehillMint's Silver purchase -- Netking @#53014#530345/4/01; 05:23:34

You wrote: "Can anybody confirm for me the actual amount of silver that will be purchased* by the US Mint on market towards the end of this year(?)for the next silver mint."

Here is a link to the number of bullion coins minted by the US Mint since 1986.

So, silver bullion is typically 5 to 6 million ounces a year, add in silver proof sets, commenrative silver coins, etc. you may be talking about 7 million ounces a year, just a drop in the bucket. The Mint will not be a major buying force in the market. Although they will have to buy silver when ever orders come in for more coins, they don't have to buy it all at one time. The Mint sells as many coins as are ordered by their favored dealers, which then sells them to the public. If they get the 2 million ounces back from Handy & Harmon and scrape the bottom of the barrel, they may still have 1 year of silver left.

Where will the Mint get new silver you ask? Saw this over on Raging Bull Bulletin Board.

Good news for some US silver company??????

US Code: Title 31, Sec. 5132. Administrative

(D) The Secretary shall obtain silver for coins minted under this paragraph by purchase from stockpiles established under the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98 et seq.). At such time as the silver stockpile is depleted, the Secretary shall obtain silver for such coins by purchase of silver mined from natural deposits in the United States or in a territory or possession of the United States not more than 1 year following the month in which the ore from which it is derived was mined. The Secretary shall pay not more than the average world price for such silver. The Secretary may issue such regulations as may be necessary to carry out this subparagraph."

Hope this answers your question

That's all from Tannehill

HenriVictorias...Good Morning all#530355/4/01; 05:37:50

Cabo Wabo woozy
clink, clink, clink, clink

FredBearNorthEast Republicans Set To Block Drilling In Alaska#530365/4/01; 05:53:38

Five Northeast Republicans in the Senate said they would oppose drilling in the refuge, making legislation vulnerable to a Democratic filibuster.

``There is a serious question of whether there are the votes,'' said Senate Appropriations Committee Chairman Ted Stevens, an Alaska Republican who's been pushing the issue for years. ``We need to wait until the appropriate time. It could take years, it could be this year.''

The Bush administration, bowing to the congressional opposition, now touts other possible sites such as the Gulf of Mexico.

(Olympia, Senator from Maine) Snowe said she thinks that ``sends the wrong message.'' ``Conservation is a vital approach and one not to be ignored,'' she said. `I think that they'll have to come to terms with reality.''

FB: Reality?

Alaskans overwhelmingly favor drilling in the refuge, said Mark Myers, director of the state of Alaska's oil and gas division. This is in no small part because Alaska would receive 50 percent to 90 percent of the royalties.

FB: It's too bad state's rights no longer exist. Americans just do not get the message.

slingshot(No Subject)#530375/4/01; 06:18:38

Topaz Helpppppppppppppppppppppppppppppppppppppppppppp

Topaz, I Made a terrible mess. Somehing happen to my post in the weee hours and HE double- hockey sticks if I Can Figure it out. My post to Black Blade and Auspec Never appeared.
I am concerned because in the heat of the moment I can spark
dialog that needs to come to the light. They are a sounding board which brings things to light. To Randy and MK I feel
things are happening and I just can not get it out fast enough. Please be patient with court JESTER.


Black BladeRough day on Wall Street!#530385/4/01; 06:38:11

Big surprise in the unemployment numbers! Unemployment at 4.5% (highest since Oct. 1998), wages up 0.4% (wage inflation). Lost jobs in all sectors except energy. Markets are in freefall. Larry Kudlow is off in a corner crying ;-) Today could be very "interesting." Now they are talking a large rate cut from the Fed. The talking heads on CNBC look shocked!
Black BladeThe Raw Data!#530395/4/01; 06:44:33

8:30am 05/04/01 APRIL PAYROLLS -223,000 VS +21,000 FORECAST

8:30am 05/04/01 APRIL JOBLESS RATE 4.5% VS. EXPECTED 4.4%

8:30am 05/04/01 APRIL PAYROLLS DOWN 223,000 VS. EXPECTED 21,000 GAIN

8:30am 05/04/01 APRIL JOBLESS RATE RISES TO 4.5%, MOST IN 2 1/2 YEARS





Gold could get a boost as they run for cover.

slingshot(No Subject)#530405/4/01; 06:47:48

Request permission to laugh.
Black BladeApril cruelest month in 10 years 223,000 lost jobs, unemployment rate rises to 4.5%#530415/4/01; 06:54:48


WASHINGTON (CBS.MW) - The bottom fell out of the labor market in April. The economy lost 223,000 jobs in April while the unemployment rate soared to 4.5 percent, a 2 1/2-year high, the Labor Department said Friday. The job loss was the biggest in more than 10 years. The report blindsided economists, who expected a small gain of 21,000 jobs in April.

Black Blade: Larry Kudlow is now talking "Recession." 180 degree about face.

slingshot(No Subject)#530425/4/01; 06:57:12

Did you
know after 26 weeks they are not on the unemployment scale? Wonder how
that figures Slingshot

Black BladeUSD Down Hard#530435/4/01; 07:12:03

The USD is down hard. There are now calls for AG to hand out an emergency rate cut. These talking heads have gone into panic mode. Going to be "interesting times."
slingshot(No Subject)#530445/4/01; 07:12:05

Three times to a posting error and I still do not know my mistake.
slingshot(No Subject)#530455/4/01; 07:12:05

Three times to a posting error and I still do not know my mistake.
FredBearKudlow Kuotes#530465/4/01; 07:37:48

"Fed needs action in the gold market"

"1st qtr GDP was a phony rise"

"May will be worse"

agbullSilver hits the mainstream Press#5304705/04/01; 08:50:28

The Herald-Tribune will run a feature article on silver this Sunday May 6th. Use the link to read..
Tree in the Forestauspec#5304805/04/01; 10:15:33

Thank you for that very important refresher course sir auspec! I recall reading those passages when first I came to lurk in these hallowed halls. But I was a kid then! It's been sooooo long! I stand corrected...again! So let's see if we can now summarize:
1) First, they sheared the sheeple for gold by driving the price down and propagandizing them with the "worthless relic" routine.
2) Then they raped the miners by forcing them to sell at or below production cost.
3) Then when that wasn't enough, they strong armed smaller nations for gold.
4) Then the "Old Lady of Threadneedle St." began publicly auctioning off gold. They probably did get value. It was probably stolen gold so $265/oz was a good deal.
5) Finally, as this is still not enough, they have begun "selling" their own gold but I put selling in parentheses because it's just paper promises in exchange for physical and like the "custodial gold" at West Point, it will never actually be paid.
And all of this to support a bankrupt nation in receivership.
Does that about sum it up?
Truly, La Cosa Nostra has nothing on the good old US of A!
But let's step back a bit and look at a broader perspective. August 15, 1971. Nixon closes the gold window. The US is given 30 years to pay up. "Somebody" decides, hey no way we can or will pay this. Let's just live it up for thirty years and let the you know what hit the fan. 103 days and counting!

PH in LAWHO THEY ARE. (A program note)#5304905/04/01; 11:18:59


"WOW!" Indeed!

In your (msg#: 53011) it appears that it was Canuck? asking on 2/25/01, "who is 'Big Trader?'.

As garbled as it has all become, with Another's penchant for mysterious and thought-provoking comments, I would answer that the poster "Big Trader" was almost certainly the same poster we later came to know as ANOTHER. Those with enough patience to wade around in the Kitco search engine on a day that it is working would be able to find the original posts from 1997. They began with cryptic postings from "Big Trader" which were soon supplanted by posts from "Another Writer". Soon again after that the poster dropped the "Writer" from his handle and from then on posted simply as "ANOTHER". The content and style of all the posts strongly suggest that they all came from the same individual, although he never (that I know of) admitted openly to that conclusion. There was later some confusion and commentary posted about how ANOTHER's writing style seemed to vary from one day to the next. ANOTHER himself alluded to the fact that his words were sometimes edited by "one from the West" who tried to bring a more colloquial tone and style to his message. Soon after that FOA appeared and either admitted (or was assumed) to have been he who had sometimes proofread and/or edited ANOTHER's posts. FOA now seems to write mostly for himself based loosely on the THOUGHTS of ANOTHER and supposedly on a still on-going personal association with ANOTHER. With all the different currents swirling around the threads that all these individuals have woven, one must at least wonder at times if they are not all the same person. My own feeling has always been that such a ruse would be exceedingly hard to pull off as well as this has been done. My hat would be off to anyone who could manage it so masterfully. At the same time, I cannot rid myself of the nagging suspision that there is some purpose behind their efforts beyond a mere desire for a dissemination of information. I mean, why else would he/they maintain such an effort over such a long period of time? And with such unvarying persistance?

We'll probably never know!

Mr GreshamHenri#5305005/04/01; 11:54:37

Henri, I hear ya!

(I been thinkin'
I'll be clinkin'!)

(Henri, besides your recent "fishing stories" via FOA, were you ever on a long canoe trip along the Canadian border in your youth?)

Randy (@ The Tower)"A disturbingly sour attitude" among corporate executives: that's what is driving Fed monetary policy these days???#5305105/04/01; 13:22:22

According to this article,
"Fed policymakers decided quick action was needed to change that mind-set before it could undermine a gradual pickup in economic growth expected later in the year......officials decided they could not wait until their next regularly scheduled meeting on May 15."
No matter how highly we've developed our intricate economy, at the root it largely rests upon the building blocks of confidence in the monetary unit.

So, we see a frightening element revealed along this line of thinking. What we have seen here is that when failing confidence in the economy itself is threatening to collapse the upper levels of structure, the monetary authorities will naturally attempt to bolster that upper level of economic confidence.

The big problem, however, is that they bolster this confidence in the economy at the ultimate expense of the deeper-level confidence in the monetary unit.

Now consider this. Unlike the global monetary structure that was in place only 30 months, there is now a viable alternative (free market gold reserves and euros) and the world therefore no longer needs to cling to the dollar through good times and bad. Suddenly, in this new monetary era, there are now dire consequences to be faced against such compromising use of the dollar as we are seeing by the U.S. monetary authorities.

Prepare yourself for the coming flood of small dollars with a lifeboat of physical gold.

Randy (@ The Tower)Centennial maintains regular access to many forms of gold coins and bullion, but....#5305205/04/01; 13:35:20

...these rare beauties are just passing through -- sorta like a traveling museum exhibit.

Claim yours while the limited supplies last. (only 150 each)

[They are moving briskly, and I've already got mine!]

Netking@Tannehill#5305305/04/01; 13:59:38

Mr Tannehill (53034)
Many thanks for your info.

Randy (@ The Tower)*correction*#5305405/04/01; 14:02:16

Normally I ignore these inadvertent blunders unless it significantly changes the meaning.

In msg# 53051 I posted, "Unlike the global monetary structure that was in place only 30 months,..."(etc)

However, this is what was intended:

"Unlike the global monetary structure that was in place only 30 months PRIOR,..." (etc)

Randy (@ The Tower)Looking for the perfect graduation gift?#5305505/04/01; 14:45:56

Look no further! Coins, pendants, moneyclips, tie tacks, and other gold coin accessories. Give Marie a call at the small order desk.
BelgianAuspec and the Red Baron.#5305605/04/01; 15:54:16

Arab oilers (not spoilers), secretely fostering, their Gold-mistress. Us (detectives), desperately searching for evidence of their unfaithfullness towards their oil-spouses.
Exciting isn't it ?

Can a ME oil-giant, convert, oil-dollars into physical gold ? Is there enough gold available to do this freely and totally unnoticed ? Have the Rothshilds as oil/gold traders, taken the necessary arrangements, to prevent gold from, trading freely ?

Official Goldholders(OGH) and a majority of (Big) private Goldinvestors (PGI), surely have many reasons, to agree with such a masterplan for future Re-Valuation of Gold. Of course, both for different reasons. OGH, keep the dollar-calf from changing into a golden calf and PGI, get plenty of time for additionnal accumulation at, you know what kind of prices. But, what interest do the goldproducers (GP) have in this masterplan ? What have they to gain, now or in the future with the Red Baron scenario ? They (GP) don't care about POO or Currency Depreciation ! Are you convinced they are too dum to see such a creative oil/gold - valuation play ? Are the GP, ignoring this for the altruistic benefit of maximum employment ? Why aren't GPs, providing the oilers with off record gold for POG's sake ?
And in this way helping OPEC to manage the POO for faster world dominance. A low POO for an extended period of time is preventing, non OPECers from investing in exploration and become completely dependant on OPEC.
SA-GP have converted gold for oil during the sanctions period.

Are the Goldproducers the ones who have to carry the full burden of the two other gold identities (OGH+PGI) ?
What do they get as a reward for being so flexible and cooperative ? Future dominance (the big five) through de-fragmentation ?
(defaulting small miners)

Anglogold (N° uno) latest statement, that CBs must be allowed to play the derivative game or otherwise risking to be confronted with outright massive goldsales...was instructive. Black Blade was so courageous to react on that statement (amusing). As if a POG at an 25 year LOW is the result of a constant derivative-appetite of central bankers with only 1/3 of aboveground gold and unknown proportion against remaining underground gold. The 3 goldplayers (OGH-PGI-GP), are not in synchronisation ? Goldproducers have much more future underground gold to defend. Or is the AU-statement giving evidence of the contrary ?
And emphasising Randy's : freely convertible but not freely tradable aspect of Gold ?

When having a close look at the POO-chart (30 years)...the least we can say is that it is a very un-natural pattern.
I would like to compare it with the pricing chart of a coke bottle or cigaret or men's haircut over the past 30 years.
These goods and services were surely freely tradable and not periodically capped for God know what purposes.
These charts will perfectly reflect the permanent Depreciating currencies, worldwide. POO and POG (include dollar-index) have both that dramatic un-natural aspect. Is that suggesting their relationship ?
Have politics already a long record of "creative" action on POO and POG ? And why are these lastest 6 years so different for both of them ? I can't find a constant inter-relation between these 2 world-rulers (gold/oil) for the full period of 30 years. Is this an indication that FAO is correct in his vision that we are on the eve of decisive Change (for gold and oil)?

And why would Anglogold stubbornly continue to promote gold as a commodity only ? Are private goldholders encouraged to optimise their goldholdings with derivative hulabaloo ?
Are we supposed to do the same thing with our homes or other tangible storages of wealth and certainty ?
Why is AU, "suddenly" so eager to talk about hedging (through miningweb) and suggesting to reduce their hedging ? Is the recent figure of 10.000 tonnes - SHORT, starting to sink through and installing some unrest ?

Isn't it remarqable that the 3 Big Goldplayers (OGH-PGH-GP) aren't saying anything that makes sense about gold...and that modest and humble individuals must come up with all kinds of gold-considerations ? Is that pathetic permanent global currency depreciation such a taboo for the main 2 gold philes (GP + PGH) ? And is "not enough gold" the reason why it is not freely tradable ?

Sir Auspec, you know my questions are only rhetoric. You just keep on provoqing more and more "toughts", wich I welcome enthousiastically. Thanks !

R PowellPour on some more credit#5305705/04/01; 15:54:41

POG and the XAU both ended the day down slightly. Rates were mixed with the short term up, longer term down so we end the week with a miserly half point.
Interesting that the XAU went up at the open as fast as the Dow and Duck were going down. It certainly looked ominous early this morning with the Duck futures index locked limit down after the ugly employment numbers became public. Perhaps the Fed. can creat enough money to reinflate the bubble and keep debt service under control. Think so?? I'm still getting credit card offers and checks daily. At your limit? No problem, just cash the check for an automatic expansion of credit. No end in sight. Why do I bother to work??

Solomon WeaverInvestor sentiment and interest.....when it returns to AU and AG????#5305805/04/01; 16:12:21

Just an aside, I do find it interesting, and also incredibly annoying, that the precious metals have been so becalmed for so long. Today, many internet stocks were up 10 to 20% in the U.S. To look at the volatility of such equities and compare it to the precious metals is disconcerting for the long-term professionals in the marketplace. A $10 rally in gold, that takes 2 to 3 weeks is considered big time, while such moves occupy just hours in some sectors of the equities market. It is no wonder that, currently, with momentum investing the primary driving force of the markets that the metals are becalmed with very little investor interest.

Poor old Solomon

Solomon WeaverInterview with Ted Butler#5305905/04/01; 16:16:54

Ted's index seems to be gathering dust.....but here is a link of a recent interview.

If you listen to James Cook in almost seems like he is playing devil's advocate.

Poor old Solomon

Solomon Weaver(No Subject)#5306005/04/01; 16:46:34

Here I am again, back on the forum talking about the poor man's gold.....

Trail Guide....really love those walks on the is like the mountain....silver is like a little lake in a shallow of the mountain....relflecting gold like a mirror.

I can think of a few numbers that show how little silver is...but to the Knights and Ladies who have a few coins in their purse....???

Worldwide production of Silver per year in the 1990s is approximately 500 million ounces. By $5 per ounce a mere $2.5 billion....and most of that was the cost of getting the silver out of the ground (almost no profits).....and since most silver is not primary, it appears on the books of a lot of mines as simply lowering the cash costs of mining lead, zinc and copper.

Wolrdwide production of Oil per DAY of 70 million barrels and $35 comes out pretty darn close to $2.5 billion also.

Both are commodities. Both are fairly "cheap", considering the value added they create when they "are used". Silver has been cheap these decades because there was a very large underground reserve in the USA (10 billion ounces)which could come into the market with little effort. Oil has been cheap these decades because there was a very large underground reserve in Saudi Arabia which could come into the market with little effort.

What would happen if the money that moves through the oil market in one day would move through the silver market in one year??? I don't mean the paper markets...

Poor old Solomon

Randy (@ The Tower)Fundamentals rule in the end#5306105/04/01; 16:55:52

Today we received the most abysmal jobs report for March with the largest monthly loss of jobs in a decade, and as a result, the short-term Treasuries climb in value while the Dow climbs 150 and the Nasdaq rises 45.

Common sense would say that this is a warning sign that the economy has truly lost its shine, so why are people plowing money into stocks? It would seem at first blush that the investors have forgotten the important lesson of the recent market mania (and subsequent Nasdaq selloff) that investments, particularly share ownership in corporations, must fundamentally be justified by the underlying business model and the corporation's performance within the larger economy. With jobs being lost and the economy slowing down, does this bode well for the future demand for and earnings on the corporations' products?

Truly, all eyes are on the Fed, and the expected easing of monetary policy (lower interest rates) that might reasonably follow this bad news. If today's stock market performance is to be justified somehow on a fundamental basis rather than a resumption of the past mania (which it just might be), then we must call it a flight out of the dollar, albeit in an ill-advised direction that largely depends on the future purchasing power of the dollar and employment for its demand-side fundamentals among American consumers.

With the down now again at nearly 11,000, just look at the link above to convince yourself if these levels are justified in our now slowing economy coupled with the eroding monetary fundamentals that have been documented here.

The rise in short-term Treasury prices (prices move inversely to rates) seems to be the only fundamentally-justified action seen here, because these short-dated notes are most sensitive as a parallel to the FOMC-established target rates.

auspecPH in LA#5306205/04/01; 17:20:57

A program note/ msg # 53049

Thanks, PH, very interesting thoughts in regards to who "Big Trader" and the various "players" might be. A little intrique, no? From your message per ANOTHER:
"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." END
Comment: Note the specific use of the words 'them' and 'people' in regards to "Big Trader". So ANOTHER could be a part of "Big Trader" but others {pleural} are also involved, right? I like to think these guys are connected with the EU and dissemination of its various merits as it unfolds, but have not personally followed their discourse from the beginning. You're right, we'll probably never know their identities, but we will surely know their prognosticating abilities!
Yes, we all have some degree of motive for posting here, whether it be simple sharing of knowledge or whatever. I like to think we do what we do because we are who we are. Or are we who we are because we've done what we've done? Anyway we are all grateful for this esteemed place and the opportunity to LEARN as well as share.
Any other ideas on who these "Big Trader" are?

Black BladeNew Yorkers fear summer power struggle #5306305/04/01; 17:34:47,7792,485398,00.html

The heat is rising in the city, and some say New York is next for power blackouts


It's summer in the city of New York. After months of miserable weather, temperatures have been in the 80s all week and the latest reports suggests that this summer could be a scorcher. Energy analysts believe that America's largest city is the most likely to follow the example of California into a power crisis this summer. On paper at least, New York's antiquated, deregulated supply is going to find it tough to meet the increased demand of a rising population and high temperatures.

Black Blade: Severe power outages could cause a lot of havoc on Wall Street as the records of many US corporations are stored electronically in NY. Trading sessions could be disrupted as well. California-style energy crisis is just now cropping up on the East coast. Meanwhile the situation looks to go critical in the Western states, especially if temperatures soar this summer. The Midwest could also experience some difficulty.

Black Blade50 reasons gasoline isn't cheaper #5306405/04/01; 17:43:49

As big driving season dawns, refiners must make as many blends of as there are states. This Balkanization of the gasoline market - there are literally 50 different blends used in the country - is a major reason prices might approach $2.00 per gallon in some areas this summer. In fact, now that the summer driving season is near, boosting demand in an era of tight supplies, the nation's refiners face daunting challenges - and criticism from all sides. They find themselves blamed for shortages, and for air pollution.

Black Blade: And it won't get better either as more regulations and standards are about to be implemented and more are about to be put on the books. This ties up several grades of fuel for some areas as the refiners will find themselves playing catch-up. Many refiners can't handle many variations of these proposed reformulated fuels. Look for higher fuel prices down the road.Also look for the cost of transporting goods to squeeze profit margins and passed along to the consumer in the form of higher prices.

Black BladeEnergy Could Be U.S. Economic Rebound Spoiler-Fed#5306505/04/01; 17:48:30


RICHMOND, Va. (Reuters) - A sharp increase in energy prices could be the party pooper for a turnaround in the U.S. economy, two Federal Reserve officials said on Friday. In separate appearances, Richmond Fed President Alfred Broaddus and Chicago Fed President Michael Moskow cited increasing costs for gasoline, natural gas and electricity as potential spoilers for the U.S. economy as it tries to climb out of the doldrums.

Black Blade: More sleepers awaken. We can count on it. Hey - Just trot out Abby Jo for a good ol' pump and dump.

Black BladeGephardt calls Calif. power crisis national issue#5306605/04/01; 17:58:33


``People all over the West are being hit by higher prices. What hits in the West will hit in the Midwest, will hit in the Northeast. This is America's problem, not just California's problem,'' Gephardt told a crowd of 750 activists. Earlier Friday, U.S. Energy Secretary Spencer Abraham said California should not expect much more than federal energy conservation programs to help the state survive a chronic electricity shortage which has triggered sky-high prices. Abraham said the state must buckle down and build more power plants and should not expect help in the form of federal caps on spiraling wholesale power prices.

Black Blade: Even the Dems have made a 180 degree turn around on the energy crisis issue. Obviously Gephardt is testing the waters for a run at the presidency next time around. Bush will likely take the heat for a crisis that was years in the making. However, Gephardt has it right, this energy crisis will spread because many of the miss-steps in California were repeated elsewhere. This summer could be a crucial test.

Black BladeBush and the California 'Energy Crisis': Too Little, Too Late #5306705/04/01; 18:15:43


With Dick Cheney leaking out details of the Bush Administration's misguided energy policy this week, Californians -- the people at the center of what the Administration calls the ``energy crisis'' -- can't
help but wonder: where's the leadership? ``George W. Bush said 'drop dead' to Californians long ago as payback for voting for Al Gore in the last election,'' said Democratic National Committee (DNC) Chairman Terry McAuliffe. ``Now he realizes that allowing his Big Oil buddies to do whatever they want to our environment won't win him any more votes there, either. So what does Bush do? He ignores
California, and hopes nobody notices.''

Black Blade: Geeezzz, here it is. The blame falling on Bush for 12 years of inactivity and lack of preparation on California's part. Of course why should Bush care about California, he won't ever get their vote. Clinton did the same to the Western states as he stripped land away from the people as punishment. Case in point - Escalante Staircase NP, among others. Escalante Staircase is a forbidding desert with the World's largest known deposit of low-sulfur coal. And Clinton? Remember in Utah he came in third behind Bush and Perot in 1992, and again behind Dole and Perot in 1996. It's called "What goes around, comes around."

Black BladeCalifornia's Power Shortage Could Threaten New Homebuilding Projects#5306805/04/01; 18:22:00


LOS ANGELES--(BUSINESS WIRE)--May 4, 2001--A growing shortage of electric power and soaring energy costs could force California builders to postpone or kill some new housing projects -- a problem that would further aggravate the state's severe housing shortage.

Black Blade: Can you say "Higher Rents." This will hit the lower and middle classes the hardest in the pocketbook and with them goes the economy.

Black BladeOil refineries want protection from blackouts#5306905/04/01; 18:31:56


California lawmakers are acting to keep the electricity crisis from fueling a gasoline crisis as well. A move is gaining momentum in the Legislature to protect oil refineries from rolling power blackouts that could disrupt production and send gasoline supplies plummeting and prices soaring. Gasoline prices seasonally edge upward in the summer, the prime season for motorists. But oil companies say California risks far more severe price spikes if power outages cripple refineries and key pipelines.

Black Blade: A vicious cycle! Refinery utilization rates are at either 95.8% according to the API, or 98.8% according to the EIA. Either way, refining capacity is nearly maxed out. Any disruption during this critical period of refining reformulated fuels will cause fuel prices to sky-rocket.

Black BladePlatinum Rises to Two-Week High as Users Switch From Palladium#5307005/04/01; 18:41:03


London, May 4 (Bloomberg) -- Platinum rose to a two-week high while palladium changed little, in a further sign that carmakers are switching back to platinum as a raw material for pollution control devices.

Black Blade: Also most speculators in Palladium were washed out when the TOCOM and NYMEX defaulted (actually changed the rules of the game - same thing really). It is a matter of "fool me once shame on you, fool me twice shame on me." This see-saw action could see Platinum go higher as Palladium drops. It should also be noted that auto sales are falling fast as the economy goes into the dumpster. Both PGM metals could tumble for a while.

Black BladeDummy's Guide To Hedging The Gold Market#5307105/04/01; 18:49:38


At risk of oversimplification, hedging is essentially a lien on gold yet to be mined. Typically, a producer borrows gold for immediate sale, using the cash to fund its activities or to arbitrage interest rates. Also, the funds raised are off balance sheet, which makes firms appear more valuable than they might otherwise be.

Black Blade: This much like those who take a loan against there home for 125% value (essentially a forward sale). There's risk associated of course. One could lose their home if the economy turns against them. It is really no different with the forward sales of gold. The mine could be lost and acquired by the counter-party. Game over and check mate!

ETBelgian#5307205/04/01; 18:55:33

Hey Belgian - thanks for your thoughts. I always enjoy your posts. You write in part;

"And is "not enough gold" the reason why it is not freely tradable?"

Not enough gold "at this price". Plenty of gold to go around at some price. "That" is the reason gold is not freely traded, at least as far as we can tell. I have this idea that gold is actually freely traded amongst some entities, we're just not privy to the "price". I do think, however, that we're getting closer everyday to that particular price discovery.

Black BladeWorld Gold Council Report - Hedging is Beneficial#5307305/04/01; 18:56:55


JOHANNESBURG – The role played by the derivatives market in influencing the price of gold has been exaggerated, according to a report issued by the World Gold Council in association with the London School of Business. Another finding of the report, titled "Gold Derivatives: The Market Impact", is that the use of derivatives is in decline, a condition which should reverse any affects these financial instruments had on the gold market. The author of the report, Professor Anthony Neuberger, says gold derivatives – known commonly as hedging – have been beneficial to gold producers, fabricators and central banks.

Black Blade: Yeah, right.

Hill Billy MitchellLady Leigh#5307405/04/01; 19:10:38

Will try to post A. W. Pink as per your request on Sunday.

Very respectfully,


auspecBelgian #53056 Tree #53048#5307505/04/01; 19:44:09


Sir Belgian! That was quite a list of questions, even I was impressed. Here's your answers: Yes X 14, No X 11, maybe X 5, no idea X 22. Just kidding. The only people who can answer ALL those questions don't or won't {completely} post here, but isn't it fascinating that some individuals surely know the answers totally. Maybe if we persist long enough THEY will have pity upon us and just TELL ALL? In the mean time, since my posting priveleges are currently intact, I will continue this thread of thought/questions. When you advance far enough on this Forum, ala Aristotle or Oro, they 'boing' you out of here to a higher level, leaving few to answer everyone else's questions. It's a bit like Ground Hog Day where we are all subject to the same endless/unanswerable questions until asomeone finally gets it right. You and BB are a couple of 'nettectives' about ready to graduate, I believe.
Anyway, with that drivel out of the way, we can now get down to some serious discussion, no? Per your post: "Can a ME oil-giant, convert, oil-dollars into physical gold? Is there enough gold available to do this freely and totally unnoticed? Have the Rothschilds as oil/gold traders, taken the necessary arrangements, to prevent gold from trading freely?" END. Imho: No, they cannot convert oil to gold across the board, no way. Doesn't work mathematically. But they can get sufficient gold to satisfy themselves that the deal is at least somewhat fair. Throw in some 'favors', political or military, above or under the table, and the relationship continues to work. The 'Anglo' {English} aligned countries get a flow of cheap oil to undergird their economies, and the ME gets lasting value in return for their diminishing resource. "Have the Rothschilds....?"
Answer, an emphatic yes. The LBMA tells the story clearly.
As far as the GP {gold producers} are concerned; they have to be divided into different camps. Let's stick Anglo{English}gold together with Barrick just for the fun of it, no? As ANOTHER stated "Indeed, a line is most certainly drawn between Washington/NY, London, South Africa and the Middle East...." So we see the ME as having oil and the others as having gold or gold access. The London and US connection is obvious now as we have all seen it play out over the recent years. Does it center/originate in London? What will happen if Britain goes EU? Do the same folks run much of US and London's 'sphere'? What is the South African connection? History shows the undeniable links of London and South Africa, right? Who owns the Federal Reserve, the BoE, S.A. Fed? Who owns Barrick, Anglo{English}gold? My, it starts to smack of a bit of 'inbreeding', no?
So, other than the connected/owned gold producers the rest of them are mere sheep, blindly following their shepherds. If they get big enough, like maybe Franco Nevada, they will be invited to join in the games, or otherwise prepare for battle. The top % of any field or country gets invitations to join the elite. Ask Ted Turner for example. If you can get big enough you can play.
The smaller gold companies are trying to survive at this point. They are in no position to make any type of statement as to gold being money, as they know the consequences. They are simply trying to find enough product, regardless of what people call it; commodity or money. If they find enough of it they can paper-cash in.
Tree in the Forest--- You would think there would be a huge outrage over CB loss of gold, right? I'm not so sure it actually would happen because the masses have been so successfully dumbed down. With the potential sale of IMF gold it took a very unlikely coalition of Congressmen to defeat this idea. It was quite the setup, and the IMF is likely pulling an end around anyway. By the way, who runs the IMF? More rhetorical questions. The US public knows practically NOTHING about gold as they have been thoroughly 'fiatized'. They would read about it and focus for a couple hours or days and move on to the next event/distraction. It would take another unlikely coalition to make it an important issue. We are very late in these games!
The oil and gold trade comes to an end when the CBs are no longer willing to sacrifice remaining gold. The WA countries are basically there already/almost. It is the particular country's gold as it actually doesn't belong to the CBs, but that doesn't seem to concern them. Let's play 'follow the money': The public/CB gold gets sold down or rearranged. Some of it leaves public coffers and ends up in private hands like the BBs. The mining company scavange hunt allows favored and elitist owned companies to pick the bones of their less favored brethren. You lose some gold in someone else's hand and gain some gold {in the ground} in your own hand. In the meantime your milk cow {various Anglo economies- US Canada Aus NZ UK} continue to provide various opportunities for common theft through other means.
Per Tree # 53048:
1. They shear the common people of their gold dreams.
2. Then they go after the smaller miners.
3. Then the smaller nations.
4. Then various national treasuries are compromised.
"And all of this to support a bankrupt nation in receivership." Exactamundo Sir Tree! If you can make the US Constitution an archaic document in the process, so much the better. Think GLOBAL, as do our leaders!
here's an unanswered question. When London/Britain finally decides to go Euro will that be the coup de grace???? They are now currently aligned against the EU in their gold maneuvering, but for how long?? clearly the US cannot stand alone w/o British sphere of influence. As FOA said {roughly}- at some point they cannot afford to continue to support a decaying structure.
Per ANOTHER: "Now the CBs will have to sell 1/3 to 1/2 of their gold just to cover what's out there." Are we there yet? I think we're pretty close. Cheap gas and wonderful economies in the developed world were great, no? Good thing we knew the game underfoot and took advantage of the yellow bargain presented, no? What else will be left?

lamprey_65Gold Weekly#5307605/04/01; 19:54:51

Gold closed up over $2.00 on COMEX this week. I don't expect much next week...should probably even get a pullback as COMEX expiration occurs on Friday and BOE auction is on the 15th(?).

I do believe, however, that the week after next could be explosive as the auction will be out of the way and Greenspan will probably lower rates once again on the 15th. The dollar may fall off that cliff very soon.

ETPH#5307705/04/01; 20:05:43

Hey PH - always good to read your stuff! You write in part;

"At the same time, I cannot rid myself of the
nagging suspicion that there is some purpose behind their efforts beyond a mere desire for a dissemination of
information. I mean, why else would he/they maintain such an effort over such a long period of time? And with
such unvarying persistance?"

Well PH, if I were to guess, I would say they support the view that the euro should be the next fiat scheme. Simple as that. They're advocating the continuation of fiat as we know it, just a different version.

Netking@Solomon Weaver#5307805/04/01; 20:39:55

Good to see you back..."Silver Bull" & have a read of the Morgan link above if you haven't already.
Chris PowellA preview of the GATA African Gold Summit#5307905/04/01; 21:07:29

New GATA dispatch by Adam Hamilton.
The Durban conference is next week.

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.

JMBPH in LA#5308005/04/01; 22:59:48

The "purpose of their efforts" is to promote the sale of gold bullion. A great idea, don't you think?
TannehillBullion dealer begs off?#5308105/04/01; 23:36:39

Sorry if this has already been posted, but more stories like this one and gold may get some where.


NY gold pops to 7-week high on early fund buying

5/3/2001 10:06:00 AM
NEW YORK, May 3 (Reuters) - Speculators bid COMEX gold up to a seven-week high early Thursday, stretching the top of its recent range and offering the first whiff of excitement in a week muffled by overseas holidays.

After opening near flat, June gold <0#GC:> at 0925 EDT was up $1.50 at $267.30 an ounce, trading from $265.50 to $267.60, the highest price since March 14.

That broke targeted resistance at $266.00/50 and nudged the contract above the $267.50 high from April 27.

"We're seeing fund buying," said a bullion dealer, who then begged off.

Opps, didn't mean to let the cat out of the bag.

That's all from Tannehill

Black BladeFed's Legwork Led To Quick Rate Cut#530825/5/01; 03:10:12


When the Federal Reserve policymakers surprise financial markets with an unexpected change in interest rates, investors and analysts often wonder, "What do they know that we don't? Usually, the answer is nothing.

But when the Fed caught the markets off guard on April 18 with a half-point reduction in short-term interest rates, Fed Chairman Alan Greenspan and other central bank officials did have some vital, privately gathered information that convinced them an immediate rate cut was needed.

Black Blade: Why did the Fed cut rates, two of them being intrameeting rate cuts? AG and the Fed obviously know that the economic outlook is worse than it appears to the US public. This article provides quite an analysis - worth reading.

Black BladeEmployment Situation Summary#530835/5/01; 03:25:17

The entire BLS report.
Black BladeSaudis, UAE Healthy Gold Appetite#530845/5/01; 03:50:32


Moaz Barakat, WGC Middle East regional director, says the WGC forecasts gold demand in the Gulf region to remain strong for the remainder of 2001. He says regional consumer confidence, boosted last year on the back of higher world oil prices, will continue to grow.

Black Blade: Gold for oil?

RockgrabberPlease allow me to ask #530855/5/01; 04:22:55

I have been asked this a number of times now, and I dont know the anser. What sort of reporting requirements does gold have? When you leave this country for good, and you have gold, how do you get it out without reporting it? Is that posssible? Could you just FEDX a bit at a time out of the country? I would love that info if you have it, thanks.
CanuckBelgian, auspec#530865/5/01; 05:27:32

Excellent ramblings gentlemen.

Hamilton discusses commodities in the link above. Many of the graphs portray bizarre patterns. The one that stuck with me was "..commodities prices lowest in 80 years..".

Awesome read.

On a complete sidenote, I was wondering if anyone has heard more of the Swiss sales. Recall a month or two ago the Swiss had 'fired' the BIS in their gold sales.

What has become of that?

Please also check out the GATA message (a few posts below). It is really amazing the amount of dirt discovered in the last year or so involving the anti-gold group.

Time to load up?

CanuckGreenspan in a pickle#530875/5/01; 06:12:43

Well, well, well.

Just gone through all the posts and messages from Friday, can't wait until the 15th to see what distortions of reality come out of the FED.

If Mr. Greenspan lowers another half, the dollar will be pounded, go gold!!

If he doesn't the stock markets fade into oblivion and with the noticeable trend of the PM's it should made a great day, go gold!!

Interesting that the European CB holds steady, sitting on its hands laughing hysterically inside.

Fitting that the BOE bi-monthly 'gold-giveaway' co-incides this lovely day.

Also fitting that the GATA boys get a few days head start before this carnage.

At long last we see the end of FED games, the game of being "caught between a rock and a hard place"


Have a golden week-end!!


RossLPonzi Index#530885/5/01; 06:12:51

Shifty has been AWOL lately, but the chart is updated.
HenriMr. Gresham msg# 53050#530895/5/01; 06:46:44

A toast to your intent to clink sir! No, I visited Expo '67 in my youth and spent some time on the Ridieu (sp?) Lake chain, but no canoeing.
HenriAuspec and PH...Who is Big Trader?#530905/5/01; 06:50:20

When I would read about Big Trader, for some reason my mind gravitated toward thinking it was the boys from LTCM. Especially when I read the ...what looked like big money turned out to be small money...part. Hmm your posts have redirected my thoughts which are still dazed and confused and seeking the light of knowledge
ShermagFurther to Elwood's insightfull missive on Arabs, Gold, and Oil#530915/5/01; 07:44:10

Elwood posted a great piece with:
"Elwood (4/26/01; 01:20:05MT - msg#: 52598)
Of Austrians and Arabs"
to which I would like to add some conjecture.

Elwood states "When Arab well runs dry or oil's timeline be ended by technology, on that day Arab wake and wish for higher gold price, because then he becomes seller."

It is on this point I posit that the Arab has a further objective in accumulating gold than for golds sake alone.

The Arab ruler seeks to avoid, or at least minimize, the destabilizing impact that depletion will bring his kingdom.

There have been efforts to install an industrial base outside of the oil industry, purchased with oil, but this effort is fighting the headwind of Triffin's Dilemma in which "industry is destroyed at the source of money creation". Oil is the money in this circumstance.

When the oil stops flowing they will seek a bridge to an economy based on something other than oil, perhaps banking. Gold is that bridge.


JMBMany thanks to Dr.V for this Saville INFLATION UPDATE#5309205/05/01; 08:36:12

This covers alot of ground. A very good article, imo.
BelgianRound Table#5309305/05/01; 10:14:05

ET : what indication(s) do you have, to suppose that unknowns are exchanging or converting physical gold at much higher prices than the present paper-price ? Hedgers have been selling the bulk of their underground at around 320$+
A total hedged volume of 10.000 tonnes for the next 5 years (miningweb). If there is so much gold around...why are they trading, inside, at much higher prices ? IMO, it is a misconception that we as modest individuals are not allowed to trade freely. Gold and silver is plenty available(physical) here at spot prices. But for a Big Gold-Accumulator, there is not enough "physical" gold at present prices. The biggies must manoeuver with paper stuff to obtain a small amount of physical in hand at this ultra low price levels. Please, elaborate your vieuws on the matter.

Elwood and Auspec : The "Big Trader" ? One thing for sure : it is not me ! :-)
My guess is Saudi Arabia. The 1990 Gulf war and repayment for the US assistance, are a plausible reason why the Saudis and the US, arranged a deal, with the involvement of Gold. A win/win deal : A declining POG, suitable for accumulation against a low POO as repayment for war debt.
The US gets the wanted low gold profile to favor their dollar + a low POO to quick start the economy. The Saudis sitting on the cheapest oil in the world and still making a profit at 10$/barril. They are part of the deal for a stable (increasing) dollar for their oil and in the back of their mind, they know that with this cheap oil, they enforce their dominance, with the prevention of other oil-explorations. The end-date of that deal, might explain why POO soared from 10$ to 34$. And the Saudis had no reason to stop the advantage of cheap gold and stable dollar. The have not only abundant oil but also all the time in the world. That's why I suspect that the Saudis are The Big Trader. This scenario might also explain why the correlation between Gold and oil has been interrupted, temporarely.(compare charts).

This supposed after war deal is probably the reason why everybody has lots of interests to remain silent about gold and oil. War debts and restitutions have always been something that had to remain very discrete.
And as usual we can't impossibly find evidence of Saudi gold accumulation in official statistics. And no official goldtrader is going to reveal, never ever, the identity of its Saudi client(s). Hello, is there an insider in the room ?

The Gulf war is of course only part of the gold drama (opportunity). The accompagned low POO was a gift for every other nation on the globe. Why should they shout about a low POG ? Why should they want to end the POG creative price setting if they all get a strong dollar in exchange to expand their ponzi game with the 1,75 trillion reserves(BIS) (80% in US$)? And the Saddam-Sanctions will certainly also have their place in this scenario. And not only for prevention to re-arm Irak. Arm sales are also a big business. France and Germany were the two main arms providers and are not selling their gold ? Can you find a role for the UK in this story ?

If the well informed Anglogold/Barrick, had both, knowledge of such a secret oil/gold-war deal (US-Saudi)...can you blame them for hedging like hell ?????? Oeffff, I've said it. Looking forward to your stimulating comments.

EconoclastGold is Not Dead!#5309405/05/01; 10:44:51

If gold were dead, and central banks were truly dumping it to get it out of their vaults before its value went to zero in their "brave new world", the dollar price would not be what it is.
A huge campaign and world wide conspiracy would have been activated to PUMP the price these last few years-not depress it-so that the CB's could obtain the MOST value-for-money as they dumped their soon to be worthless reserves.

PH in LAWHO THEY ARE. (Program note addendum)#5309505/05/01; 11:14:25

Hi, Auspec,
Yes, no question but that at the time, the activities of some big Hong Kong interests were the focus of ANOTHER's (aka. Big Trader's) comments. Those "big traders" seem to have faded from ANOTHER's radar screens a long time ago. They were probably a bigger factor then than they are now. ANOTHER's use of the Big Trader handle seems like a way of grabbing attention and focusing it on those Hong Kong interests. He certainly didn't stay very long with them. At that time, the explosion of the paper market was probably just getting underway. The Hong Kong people could not be such a big factor in the present climate, even though they may have been important in launching it.

Forgive me if I don't quite share your view that the FOA/ANOTHER/Big Trader person/persons are an advocacy group for the Euro-fiat crowd. FOA has been very explicit in that he does not advocate any form of money per se. Rather, he sees clearly what they are and is willing to go with what is, to his advantage. He is philosophically a pragmatist... and is careful not to let other philosophical emotions guide his thinking. His commitment to fiat falls far short of advocacy in my book. He recognizes its strengths and weaknesses and strives to use them to best advantage. That's all.

And the same goes for his orientation towards gold. The only consistent message that I have ever gleaned from contemplating ANOTHER"s THOUGHTS is that physical gold will one day soon be a tremendous bonanza for those who have it. I'm sorry, but I just don't see any value judgement/philosophical advocacy there at all. FOA/ANOTHER do not think simplistically that "everything about gold is good". Nor can the purpose of their efforts be described as "to promote the sale of gold bullion" as our JMB suggests. What 'purpose' would there be in that? The world is way too big for the views of one to move all the rest of humanity. Perhaps Cheeshead thinks so. But FOA/ANOTHER is way smarter than that! And sure, Michael K. does probably benefit from FOA's presence here, but I see that as merely FOA's way of thanking MK and in a small way of paying for the forum. After all, FOA and ANOTHER were out there long before USAgold even thought of having a forum. In those days, everyone was reading Kitco, even Michael K.

The idea that gold is some kind of moral issue is well enough left to the narrow-minded religious types who need yardsticks supplied by others to anchor themselves in the cosmos. FOA has tried on several occasions to explain that he merely tries to see what is, to be better able to position himself in man's financial cosmos. He does not "believe" in Euros, fiats, gold or any other system. A true thinker, he tries to understand reality and then act accordingly. Forgive me, but I just don't see him trying to impose a belief system of his own on an indifferent cosmos.

That's just the way I see it.

Please don't take offence, FOA by these poor musings about your motives/identities/etc. Much as you might like to deny it, your message would be several magnitudes clearer if we knew who you were and why you make the effort you do here. At the same time, there is no question in my mind but that you have your own very good reasons. And I am not offended in the least by that... And I do look in on this forum every day just in the hope that you might post something. Thanks for all you do!

Chris PowellMiners must realize their product is money, not jewelery....#5309605/05/01; 11:18:25

And that, as money, their product is the deadly
competitor of the money issued by governments, and
thus it will be undermined and attacked by

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 GreshamPH in LA: WHO#5309705/05/01; 12:10:26

Well-spoken; you have captured my sense of their contribution, and motives, very well.

One way to put it perhaps is: "Sometimes, even the little guy catches a break."

With a currency war on the outbreak, most Americans are like a village of people living on the slopes of a volcano. They have lived and farmed here for generations, safely, and have no thoughts of ever moving.

Then, one day, a couple of seismologists move into the village and start talking to the people about the strange, far-off rumblings they have been hearing...

Peter Asher@ Randy; This is tour specialty to comment on#5309805/05/01; 12:26:08

@ Pru-Bear --definitionofbear 5/4/01 22:25

M3 did contract its growth rate for the week ending April 23 and the contraction was significant compared to the massive, massive expansion for the few weeks pre-April 16. It will be interesting to see confirmation from next week's numbers. I guess that massive M3 expansion was a giant equity-buy-in just before April 16. And now we are seeing a cash out?

But, the slow down was only back to the rate of March 12.
I wonder if next week will be even slower. Let me check if something interesting happened in the indices around March 12. ...

auspecBelgian#5309905/05/01; 12:35:30

Mo Ramblings

Thanks, Canuck, for the 'upgrade' from babbling to rambling.
You got it pretty much correct.
Belgian-- Regarding Big Trader: Your Arabian connection is certainly plausable and all of these motives and activities fit the House of Saud to a tee. "War payments and restitutions" would have to be discrete and something to consider for sure. A secret oil/gold-war deal, eh? Whatever AngloBarrick knew was certainly sufficient to profit and participate in the POG downside. Clearly they had the inside scoop whatever it actually is. Don't forget that 'London' was a major participant in Gulf War. The workout of physical is largely via LBMA so UK is ALWAYS front and center in this story.
We can't overlook "Big Trader" as described by ANOTHER as "HK people". Of course Saud interests can work through HK and likely do, but the Chinese piece of the puzzle must also find its place {regardless}. The HK gold market is enormous, and the affinity for gold in that region is second to none {or few}. Anyone doubt the flow of gold from west to east?
CAUTION: If you don't believe in gold black markets or drugs and gold interchanges please skip this paragraph! The HK gold mafket is every bit as murky as LBMA, and completely unopen to international visibility. China has historically produced enormous amounts of illicit drugs as have many neighboring countries {Thailand and Afghanistan to name a couple}, and this drug trade continues to date. A very real scenario could see gold flowing to HK in exchange for drugs, as repeated reports tell of the growers wanting to be paid in gold. This is likely NOT what ANOTHER was referring to as "some HK people", but it is valid nevertheless.
With the Asian affinity for gold and the magnitude of the HK gold market I don't think we really need to look further for who "Big Trader" was. PH doesn't seem to think it has remained relevant to ANOTHER's continuing saga. UK/US/Saud/SA are the centerpieces and "Big Trader" is likely perigheral to that, imho.
It does go to show that if the US wants to showcase ALL their gold as suggested by FOA, there will be folks foaming at the mouth to get their hands on it! That much has not changed. Realize that FOA continues to talk of international Dollar reserves going to nada as we progress{?} through his scenario. Bet a lot of countries would swap their nada for some yellow, given half a chance! They can't buty through CPM as we can because MK will only sell to real Gentlemen{persons}. Otherwise HE would also be cleaned out. Sometimes it pays to be small.
YES, I blame AngloBarrick for "hedging like hell" just like anyone else that profits from insider trading at the expense of supposedly free markets. We could have sold with them if only we'd known! I know your contempt for their actions also.

ETBelgian#5310005/05/01; 13:41:50

Hey Belgian - thanks for the reply. You write in part;

"ET : what indication(s) do you have, to suppose that unknowns are exchanging or converting physical gold at much
higher prices than the present paper-price ? Hedgers have been selling the bulk of their underground at around
A total hedged volume of 10.000 tonnes for the next 5 years (miningweb). If there is so much gold around...why
are they trading, inside, at much higher prices?"

Let me first say I believe little has changed over the course of man's history regarding their choice of money. Gold is the best money and in today's context the money of last resort when the fiat schemes come apart for lack of confidence. As ANOTHER has pointed out repeatedly, at least some oil producers understand gold's "value". I don't think it is much of a stretch to believe that those that have held gold as savings also understand the value of gold. These would include not just the oil producers, but also the oil consumers via their governments. It is in this realm where gold is traded freely as evidenced by the huge volume of trading in London that came to light a few years ago. I would say an amount of oil is being traded today for an amount of gold, paper prices notwithstanding.

It would appear some oil consumers have not had enough "savings" to pay for some time and have resorted to "printing gold". This is where we find ourselves today with economies based on relatively cheap energy but not having the savings to buy it. It would appear that the world isn't suffering so much from an energy shortage as a savings shortage. I would venture the world has misallocated its savings and now find themselves in the untenable position of having built an economy which cannot produce a profit. No profits will eventually lead to a collapse of the current fiat scheme resulting in either a return to sound money or some new version of fiat.

"IMO, it is a misconception that we as modest individuals are not
allowed to trade freely. Gold and silver is plenty available (physical) here at spot prices. But for a Big
Gold-Accumulator, there is not enough "physical" gold at present prices. The biggies must manoeuver with paper
stuff to obtain a small amount of physical in hand at this ultra low price levels. Please, elaborate your views on
the matter."

Well, if gold were trading freely relative to fiat, the Big Gold Accumulator would simply place his order and receive his gold. The reason it isn't possible is because there is not enough gold available at these fiat prices. The fiat scheme has at its heart the manipulation of gold "prices" so as to make the fiat itself appear valuable to those using it. By definition, the euro will have to achieve the same manipulation or it too will fail for the same reason the dollar is failing.

NetkingPublic Debt#5310105/05/01; 13:56:15

The current public debt. . . $5,636,663,639,692.83
JMBPH in LA#5310205/05/01; 15:08:02

You said, "After all, FOA and ANOTHER were out there long before USAGold even thought of having a forum. In those days, everyone was reading Kitco, even Michael K."

The history of this great forum and how it has evolved is certainly fascinating to me. Thank you for the historical insight. Would you happen to know if MK was posting at Kitco before the USAGold forum started?

ETPH#5310305/05/01; 15:15:10

Hey PH - thanks for the reply. You write in part;

Forgive me if I don't quite share your view that the FOA/ANOTHER/Big Trader person/persons are an advocacy
group for the Euro-fiat crowd. FOA has been very explicit in that he does not advocate any form of money per se."

We must be reading entirely different authors, PH. He most certainly has been advocating the euro scheme as the way to go with gold held as a "wealth reserve".

"Rather, he sees clearly what they are and is willing to go with what is, to his advantage. He is philosophically a
pragmatist... and is careful not to let other philosophical emotions guide his thinking. His commitment to fiat falls
far short of advocacy in my book. He recognizes its strengths and weaknesses and strives to use them to best
advantage. That's all."

Perhaps. It was certainly the impression I had for quite awhile. Recently, however, Randy and FOA have given us some clues as to the motivation behind these posts. If you don't mind, let me share with you what I've gleaned lately.

Like you, it has always struck me as unusual that someone would post this stuff month after month, year after year, with nothing more in mind than some altruistic purpose. I find that very hard to believe but I don't discount it entirely.

Randy asked me the other day what I thought about the "suffering" that has been caused by the US currency hegemony. Why do you think he would ask this? My guess is that he believes great suffering has come to pass and I certainly agree with him. However, he then goes on to say we should adopt another version of the same thing, apparently so the suffering can be spread around a bit. Why not the more obvious choice, a gold standard, this being a gold board and all that. The only ones that would "suffer" from a gold standard would be the status quo, our friendly banks/governments. Yet this is soundly rejected by both Randy and FOA as "unrealistic".

Looking at this from another point of view, if you had in mind trying to get your hands on the power to mint money, you would first need to take it away from the ones that have it today, am I right? What would be your strategy if you intended to destroy the dollar as the world's reserve currency and at the same time not suffer a total economic collapse leaving you without the confidence in fiat currencies on which to build your version? My guess is you would try to convince people that your version is somehow tied to gold, as that is the money of last resort. You couldn't actually redeem in gold as that would be a gold standard and you wouldn't be able to mint money so the next best choice is to make it seem that your version of fiat is "backed" by gold. You could say your fiat is backed by "reserves of gold" and would be "fairly" marked to market on a timely basis. You could further attempt by repetition to convince people that this is "free market gold". Sounds like a good plan to me although I believe it suffers from the same lack of economic understanding that produced the current situation with the dollar and its many versions, but you sure can't blame the Europeans for trying!

Another point that has always bothered me is the rejection of silver as money. Why? It's not as valuable as gold, but over the years has been regarded as sound money in many times and places. I would guess that the argument against silver is the same argument against gold, it's sound money and that is "unrealistic".

I could go on PH, but in summing up what I've read over the years, these people are advocating the euro scheme and rejecting the gold and silver standard. That puts them squarely on the side of big government and a continuation of the status quo. They would seem to advocate hoarding physical gold because it removes gold from the marketplace making it tougher for the paper gold scheme to continue. If the paper gold scheme can be broken and the economic landscape remain unchanged, they would be in a most enviable position. I believe the paper gold scheme will be broken but I don't believe the economic landscape will remain anything like it is today. There will be few ways to escape the great credit bust. Having some real savings will cushion the process, but the process of returning to sound money will take place, all collectivist planning notwithstanding.

lamprey_65Belgian#5310405/05/01; 17:47:18

You wrote:

"If the well informed Anglogold/Barrick, had both, knowledge of such a secret oil/gold-war deal (US-Saudi)...can you blame them for hedging like hell ??????"

Yes, I've been convinced for some time that this is the case. Let's not forget that Bush senior took a role as advisor to Barrick after leaving office and AngloGold is THE most connected gold miner in the world (Rothschilds/De Beers).

Human beings tend to simplify causes...I believe the falling/low POG since early 1996 has several causes, only one of which is forward selling by mines. Throw in real deflation (1997-1998) and dishoarding directly after the Asian crisis; a skittish Bill Clinton doing ANYTHING in an election year (1996) to make sure he did not suffer the same fate as the Democratic Congress of 1994 -- low POG means the dollar has greater "value" and the U.S. stock market rises as it sucks in foreign money = a "feel good economy"; Central Banks looking to make returns - albeit paltry - on gold assets; and the growing fascination with derivitive instruments in's amazing that gold did not break below $200 and ounce.

The fact remains that gold bottomed in the summer of 1999 and has now shown a possible double bottom. We've been going sideways ever since -- backing and filling looks now to be nearly complete.

This is now a sector play and the "smart money" is starting to show up as a true bottom has had time to form.

From MK's April missive: "Knowing as much as I do about the way central banks all over the world are printing money like confetti, again to help people pay for the rising price of oil, I now expect the biggest and longest gold boom in a century." Adrian van Eck/ Money-Forecast Letter

Question: Is this the same "VAN ECK" as VAN ECK ASSOCIATES CORP.? Check the link above for institutional ownership for stocks HGMCY, GOLD, HM, AU, GG, etc. Also notice the general trend of institutional accumulation of gold mining shares over the past few quarters.

lamprey_65P.S.#5310505/05/01; 18:01:29

Anyone who does not see the real possibility that Rubin (as former head of Goldmans Sachs, Treasury Secretary and head of the ESF) helped orchestrate the carry trade in gold for Clinton's reelection efforts - utilizing his Goldman Sachs know, the same Goldman Sachs that was a big Bill Clinton supporter - is just a little naive.
BeowulfPossibility of WPPSS nuke plant to start up again?#5310605/05/01; 18:43:09

Black Blade, you talked a while back about Washington and the WPPSS plant fiasco. Well, they are now looking into restarting construction. The beauty of the plan is the facility is already built so nobody can complain about having a new plant built in their back yard, IT'S ALREADY THERE.


Nuke plant feasibility is studied
ENERGY: Operators of state's
only nuclear power plant look at
finishing sister reactor
Source: The News Tribune
Publication date: 2001-05-05

The organizers of the Northwest's nuclear fiasco of 20 years ago are on a fast track to learn whether it's technically and financially feasible to resume construction of an abandoned nuclear power plant in Eastern Washington.

An ad hoc committee of Energy Northwest's executive board is moving toward completing by mid-August more than $1 million worth of technical studies and independent reviews of WNP-1, a two-thirds complete plant on the Hanford Nuclear Reservation.

There's a lot of people out there looking at No. 1," Vic Parrish, Energy Northwest's chief executive, told members of the committee meeting Friday at a SeaTac hotel.

Energy Northwest is the new name of the Washington Public Power Supply System, which in the 1970s and '80s tried to build five nuclear power plants at Hanford and Satsop, in Grays Harbor County.

Only one ever was finished, and WPPSS, a consortium of public utilities, collapsed in a $2.25 billion bond default, the largest ever at that time.

Since an energy crisis hit California and the Northwest just about a year ago, however, Energy Northwest's one nuclear plant, the Columbia Generating Station at Hanford, has saved the region's electric ratepayers more than $1 billion, given the cost of buying a comparable amount of power on wholesale markets.

There are no available estimates of the cost and time needed to complete WNP-1. Even if the feasibility studies show finishing the plant is possible, there are still barriers.

It's unclear whether any of Energy Northwest's member utilities, including Tacoma Power, have any interest in financing completion.

And even if there were, state voters in 1981, at the height of the WPPSS fiasco, passed an initiative requiring a public vote on any major public utility power project like the 1,200-megawatt WNP-1.

"There's going to have to be significant public mandate" before Energy Northwest itself tries to organize a completion project, Parrish said.

But there also exists the possibility of selling the plant to a private company or investor, or taking on one or more partners for the project, Parrish said.

The catch to that plan is that most independent operators who have visited the Hanford site probably would want the existing, operating plant also, and it's not for sale.

Board members and Energy Northwest executives were undecided about when or how to approach the public.

"At some point the public will want input," said board member Margaret Allen. "And not on a foregone conclusion."

Two separate reviews by organizations independent of Energy Northwest are planned to help overcome the skepticism that still revolves around anything Energy Northwest proposes.

"Remember, this is a board with a chairman who has never met a nuclear plant he felt made sense," said Rudy Bertschi, an economist and head of the ad hoc committee.

WNP-1 was designed as a boiling-water reactor plant whose 1,250- megawatt output could power a city the size of Seattle. Its original design was simply an outsized version of a small plant first engineered to power the Navy's nuclear submarines.

Major construction work began late in 1975. In the spring of 1982, the Bonneville Power Administration asked that construction be halted.

For the next 12 years WPPSS spent about $5 million a year preserving the plant until the utility consortium abandoned it completely in 1994.

Its federal construction permit has been regularly renewed, however.

But plant components such as valves will soon be sold and Energy Northwest may use the plant's generator to upgrade the plant that's currently operating.

Doing so would sound the economic death knell for WNP-1. ---

* Staff Writer Al Gibbs covers regional energy issues. Reach him at 253-597-8650 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

Publication date: 2001-05-05
© 2001, YellowBrix, Inc.

Cavan ManET#5310705/05/01; 18:49:43

Since the US government and officialdom are aware of the plans of the ECB/BIS et al courtesy of this forum, maybe your wish (and perhaps mine) will come true. After all, at this stage in the game as it is known by all, why not default on the dollar abroad (we did that already in 1971), institute a new legal tender here and let gold circulate freely in the US (freegold)? They'll probably have to do that to compete with the Euro (freegold) and continue to attract all kinds of capital; human and otherwise. I'm certain Treasury has something in the hopper eh? All it takes is an Executive Order, a rocky period for transition and then, we're back in business. Nobody is going to tank the US economy. That's foolish.

Confiscate gold and hello New Zealand.

R PowellLamprey_65 (53104)#5310805/05/01; 18:52:23

Makes sense to me. With that kind of information, it's a wonder they bothered to mine any metal. Maybe they felt some mining would present a good front and keep up the image for the shareholders while the main business became that of a hedge fund.
Thanks for the link to insider trading. Very interesting.

lamprey_65ET#5310905/05/01; 18:52:50

I agree with much you have to say, and I've also found TG's comments on silver (among other things) perplexing, to say the least. High inflation, yet a rare commodity which historically tracks gold selling at 50 cents while gold runs to $10,000+ per ounce? Maybe I'm just a "Doubting Thomas" here, but I'd have to see that one.

Personally, I believe the DOW/Gold ratio is a much better guide with 3,000-4,000 on the Dow likely -- the DOW's ultimate support line since the 1930's -- once this 18 year bull market in stocks ends (once 7500 or so on the DOW is breached). This means gold PRICED IN DOLLARS at between $1,000-$4,000 an ounce, with $1,500 an ounce being as good a guess as any I can come up with.

I don't share your optimism concerning a return to a true gold or silver backed currency, however much I yearn for its return. We'd need nothing less than a philosopher king to slay the banking interests of this world to make such a radical change. If you haven't noticed, real informed and effective political leadership is not exactly growing on trees these days. The politicians and the bankers have learned how fiat currency can enchance their power in the short term (and the short term is all that matters - let someone else worry about the long term, as long as "I get mine").

Cavan ManPH in LA#5311005/05/01; 18:54:30

PH: I'm rather fond of my yardstick but perhaps that is because my mind is wide open at all times. The yardsticks you reference have been handed out for over 5000 years because 99.9% of humanity can't get THERE without one. I am happy for you that you don't seem to need one. Just think of all the time and FRN you are saving. Best.....CM
Cavan Manand ET....#5311105/05/01; 18:56:12

They are not going to give up the presses--not going to happen.
BeowulfEveryone has an opinion on Bush's energy plans#5311205/05/01; 19:03:38

Solar Tax Credits
Source: The Press Democrat - Santa Rosa
Publication date: 2001-05-04
Arrival time: 2001-05-05

EDITOR: The most interesting facet of the
administration's developing power policy is what we
are hearing nothing about. While we are being told
that we need to suffer through blackouts, pay
skyrocketing rates and once again begin building
nuclear plants, we hear nothing about resurrecting
solar tax credits for homeowners.

President Jimmy Carter started what was a very
successful policy, but it was disemboweled by
Ronald Reagan. Had this tax credit been in place
for the past 15 years, our current situation would be
much different. Why there is no discussion of this
is beyond me.

Given that the NIMBY syndrome is so strong a
human trait, large amounts of water are required by
nuclear plants to produce electricity (will water
become the next great crisis?), a lot of time is
needed in order to construct a plant and that there
is a complete inability to dispose of deadly wastes
that will still be very deadly 18,000 years from now,
how nonsensical is the "plan" being foisted on the
public by Cheney/Bush?


Upper Lake

Publication date: 2001-05-04
© 2001, YellowBrix, Inc.

I brought this point up about solar credits to a co-worker
bashing Bush on his policy. My only reply to him, since he
was an avid Clinton supporter, was that Clinton had 8 years
to reintroduce the credits and didn't. What was Clinton
doing about energy while in office? Oh, that's right NOTHING.


lamprey_65Fiat#5311305/05/01; 19:11:06

One last post for the night...

How much Justice is there in a system which pays the hard working man (or woman) in a currency which is being created out of thin air, at the whim of banks and politicians? How should the "common man" feel about his wages and savings in such a system?

And one last thought which I won't expand upon here but which should be worth some thought to many on this forum...

Is fiat Anti-Christ(ian)? Did not Christ warn employers of the injustice of withholding payment to workers?...Is not cheating workers of fair compensation (compensation with true value) even worse as it is deceptive?

Babylon, indeed.

Back tomorrow.

R PowellLease rates#5311405/05/01; 19:11:35

There were only three days in June and one in December when the one month rate exceeded 1% and even then it was barely over 1%.
Change the 2000 to 1999 in the link to view the 1999 rates. They exceeded 2% on July 7th and stayed between 2-4% until Sept 3rd when they broke through the 4% level leading up to the September 26 Washington Agreement anouncement. Be careful reading as the gofo rate turns negative at times.
I'm posting this as it's Saturday night and I think these rates along with precious metals stock accumulation are indications that something may be stirring among those who have a clearer view of this gold market. Perhaps GATA's African Gold Summit will get enough press coverage to "trigger" a price move. IMHO when it comes, it will be aided by investment money poured in by people who have little to no clue as to what is really happening. How many understood what the techies and dot coms did? Momentum investment does not require knowledge or understanding. Go GATA! Go press corp!

BeowulfGood article on Wind Energy as an alternative#5311505/05/01; 19:17:17

Title: Is Wind Power a Good Thing?

Hey, I'll take two turbines and you can place them in my back yard. All I ask is that I get to pick a color other than white. Make one silver and the other gold. :)

R PowellLease rates for year 2000#5311605/05/01; 19:19:38

2nd try, sorry!
R PowellLease rates#5311705/05/01; 19:28:55

Click on the lease rate link at top of forum page, scroll to the bottom, click on home page, then click on statistics, then on derived rates for the desired year. Round about route but it works which is more than can be said for my links.

The Invisible HandWho said again that Germany had no more gold left?#5311805/05/01; 20:41:20

From David Smith's Economic Outlook in the Business Section of tomorrow's London Sunday Times

France muscles Germany aside

There could be worse to come. While France is expected to sail serenely on for the next couple of years, the danger signals are being sounded for Germany. Gabriel Stein, an economist at Lombard Street Research, warns that the country, suffering from an overhang in stocks and weak money-supply growth, could sink into recession this year.

The anxiety goes deeper. Germans, unlike many of Europe's citizens, are not used to a weak currency, and their support for the euro, in the latest Eurobarometer survey, is running at only 47%, compared with 62% in France and 79% in Italy. Many Germans will find next year's switch to euro notes and coins hard to bear.

Germany got a dreadful deal out of the euro. The D-mark was fixed against the franc and other European currencies at a rate that reflected its pre-unification glories but was, economists say, overvalued by 10%-20%. Monetary union thus gifted France a permanent competitive advantage against Germany, which is unlikely to have come as a surprise to Paris.

Trail Guidea little late#5311905/05/01; 20:46:10

USAGOLD (5/3/01; 19:40:36MT - msg#: 53004)
Randy. . . .Argentina

-----FOA, maybe you'd like to get in on this??? ------

Hello Michael and everyone!

Oh yes, I not only would get in on this but think I am "in it" up to the old arm pits already (smile). This world of ours is changing fast these days.

Actually, I only just now had time to copy several days worth of the Forum for reading. I'm late to my own invitation here, I know,,,,,,,, but as they say,,,, better late than never! I took the time to finish several things so as to clear up my writing schedule. Have a lot to say and reply to,,,, and this coming week will be very, very free. Oh yes,,,, one other thing,,,,, ET,,,, did you (or anyone here) ever drink in the "monkey bar" in central Oahu (Hawaii)? I know it's long gone now,,,, but there was something up on the roof of that place that you may be interested in. Much more interesting than that huge jungle cage of monkeys behind the bartender. (big grin)

OK everyone,,,,, I'll be back here as soon as I unpack and take care of some things,,,, then it's time for some real give and take.


Chris PowellPress release for GATA African Gold Summit#5312005/05/01; 21:45:07

Mining companies, government officials,
the press, and the king of the Zulus will
be 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.

Black BladeGas Prices Continue To Surge#5312105/06/01; 02:10:14


CLEVELAND, Posted 4:49 p.m. EDT May 4, 2001 -- What goes up must come down, but gas prices seem to defy gravity and just keep on going up. NewsChannel5's Adam Shapiro reports that drivers are getting stuck with the bill, and in some cases, so are the clerks who sell you gas.

Black Blade: Gas stations are now going to "pre-pay" for gas as there's a surge in "fill and flee." The high price of gasoline has sparked a surge in drivers who fill their tanks and then speed off without paying. A sign of the times. liquid gold?

BelgianLamprey, ET, Auspec#5312205/06/01; 02:54:14

Lamprey : Yes, Van Eck is a Gold(mine)Holder-trader-Fund.
If memory serves me well, they have a very large holding in Gold Fields.
Insider trading : South African goldmines have always had,very large cross-participations. They are trading each other shares very activily. On the minuscule Brussels stock exchange, we have a long tradition of SA goldminers. And now you are going to be super surprised to hear me saying that Brussels SE is very indicative on the price-setting for the SA-mines. Much more important than the Johannesburg SE. The intra-day goldmine live is copied in NY later in the day, with a multiple volume of course. That's how we can spot if the insiders are moving and how they are moving.
That's how we can have an idea if the public (multi-individuals) are following or not. But it still remains an art and not a science. Presently, the insiders are fully guiding and the public isn't following at all. (FWIW)

ET : I still have a lot of difficulties to "understand" the mechanism of : * I would say an amount of oil is being traded today for an amount of gold, paper prices notwithstanding* . Knowing that Saudi is a BIS-member...
How is all this working ? Can you educate me on this subject, please ?

Auspec : The Golden Triangle...funny association with the drug nirwana, isn't it ? Afghanistan :4.600 tonnes of opium per year (77% world production). And the street value is 5.000 $ per 31,1 gram (ounce). Aloha !
But I must add that my (troubled) intuition tells me that drugs-money isn't finding refuge in gold anymore. The bulk is washed into the (un)real economy. Real estate and business.

Some reflexions on the actual (strong) activism around "Blood Diamonts" : A broad based group of would-be idealists are strongly campaigning to ban all trade in diamonts coming from war-zones, like Angola, Sierra Leone etc. The fact that Anglo American (Oppenheimer) wanted to take De Beers from listing (taking it private) and that the merger with LVMH has been cancelled, means, that there is some strong pressure. A few weeks ago, 152 representatives held a congress on the Blood Diamonts in Brussels.
They want to give all diamonts a "SOCIAL" aspect and image !-? This is very, very strange indeed !
Why the hell are they picking exactly diamonts as the cause for so much evil ? Why is De Beers so eager to cooperate with setting up a sophisticated system for diamont earmarking and tracing (war-diamonts) ?
It seems to me that there is more in this, than just a trend following on the Nike-shoes or Cacao-slavery - boycots? Can a similar movement develop around Gold ? Gold-socialization ? Comments anyone ?

Black BladeANWR Petroleum and Environmentalist Racism#5312305/06/01; 03:17:47

There has been a lot of opposition to oil drilling in the Artic National Wildlife Refuge (ANWR) by some environmentalists groups such as Club Sierra, some Alaskan Indians, and political opponents of George Bush. One argument is that drilling would destroy the beauty, value and critical habitats for caribou, polar bear, wolves and birds. Another argument is that production of oil from ANWR would yield only a 6 month supply of oil for the lower 48 states. These are the same arguments that were brought up in opposition to Prudhoe Bay oil drilling, production and the Alaskan oil pipeline. Prudhoe Bay has been in production for over 33 years and has provided as much as 10% of the US oil production. The argument is a feeble attempt to mislead the average US citizen. The facts are we really don't know how much oil exists on the North Slope.

There has been only one exploratory well drilled in ANWR in the 1960's by Chevron. Another lie put forth by the "Green" community is that local people will be hurt. In fact the Inupiat who live in villages stretching along Alaska's North Slope from Barrow eastward to Canada's border, support President George W. Bush's plan to open up the ANWR to drilling to reduce dependence on foreign oil. The refuge's residents say they need the money they could raise from lease sales for education funding and feel confident of overseeing low-impact drilling by the industry in an area their ancestors have roamed for 3000 years. The 33 years of activity at Prudhoe Bay shows the oil activity and wildlife are adapting. In a position paper drafted by leaders of the ANWR residents, they say the most dangerous and insulting view held by outsiders is the notion that our homeland is empty or should be made so.

The Inupiat find the environmentalists claims to be absurd and view them as naïve. The Inupiat are outraged by an anti-ANWR drilling campaign that tries to play to the American self-image of independence by portraying the area as the last wild, unpopulated and pristine frontier in America. There have been outsiders in the area in the recent past. In the 1950's the US military built radar installations in the North Slope (including ANWR) called the Defense Early Warning (DEW Line) radar installation during the Cold War to track Soviet long-range bombers. Over about 50 years the military made quite a mess and incurred the wrath of the indigenous peoples. On the other hand, the Oil and gas industry is held in the highest regard by the Inupiat. Many have benefited with a high standard of living, educational opportunities, and community infrastructure and they owe much of that to revenues and royalties from North Slope oil development. One could conclude that the environmentalist and political activist community are racist and do not wish to see the indigenous peoples aspire to a better life.

A good read on this situation can be found in the Apr 27-May 3 issue of "Upstream" by Dann Rogers who reports that the "Greens are in the Mood for a Fight". He clearly illustrates much of the antagonism between the environmentalist community and the Inupiat. The Prudhoe Bay area has had no ill effect on the populations of wildlife in the North Slope. During winter, caribou can be found resting underneath the Alaskan Pipeline enjoying the warmth as radiant heat passes through the pipeline. In fact wildlife populations have thrived and grown over the last several years. If Prudhoe Bay is an example of the all around benefits that can be expected from petroleum exploration and production in the North Slope, then similar benefits can be expected from exploration and production in ANWR.

- Black Blade

Black BladeSigns point to $3 gasoline#5312405/06/01; 03:34:33


PLATTS OILGRAM NEWS reported that some oil companies have started stocking up on the numeral 3 to use in signs at their gas stations. Specifically, they are buying a "3 point," or the larger font used to denote three dollars, followed by a decimal, says Platts.

Black Blade: $3.00/gallon gas in the cards? Higher fuel costs will also fuel inflation - got a gold lifeboat?

Black BladeThe Credit Bubble Bulletin#5312505/06/01; 03:40:14

Check out these ominous charts. It looks very ugly. Especially note the savings graph.
Black BladeGreenspan Hopes U.S. Spends Its Way Out#5312605/06/01; 03:57:38


NEW YORK (Reuters) - If Federal Reserve Chairman Alan Greenspan is counting on the consumer to bail out the ailing American economy, his chances of success would appear slim to none. The betting in some quarters is the Fed may not be able to keep the Great American Spending Machine fired up forever because the jobs market is scaring a lot of people. The risk is that job insecurity could prompt consumers to pull back on spending, which would knock out the last peg that has so far held up the economy.

Black Blade: I agree. In spite of the near miraculous turnaround in the stock market on Friday - amazing what a well placed spin can accomplish. We are in a Recession and it would be obvious if the BLS data were not manipulated with various dubious statistical filters. Many "professional" investors were caught flat-footed on Friday when the unemployment data came out. Then the spin that the Fed would cut rates again and that all would be well. Another surprise in unemployment numbers or declining consumer confidence numbers could scuttle the Fed's best laid plans. Many may soon run for the cover and protection that gold can provide.

Black BladeGold hedging report flies in face of conventional wisdom#5312705/06/01; 04:32:02


The World Gold Council (WGC) can't be particularly pleased with the findings of the report it commissioned from the London Business School (LBS) on the impact of derivatives on the gold market. For the study flies in the face of perceived wisdom and shows that hedging had only a marginal impact on the dollar gold price – "a few per cent," in the words of Professor Anthony Neuberger, who led the LBS team.

Black Blade: The Hedging debate rages on. Yet another article on gold hedging. Miningweb seems to be Hell Bent on stating a case for gold hedging.

Hill Billy MitchellQuestion for Another#5312805/06/01; 05:36:07

Your purpose is to enlighten, no? When you refer to "Big Trader", to whom do you refer?

Very respectfully,


Hill Billy MitchellA. W. Pink – especially for Lady Leigh#5312905/06/01; 06:05:32

A. W. Pink – especially for Lady Leigh

A few words before the post that follows:

Mr. Pink, now deceased, was a remarkable Bible teacher whose teachings and writings have stood the test of time. What I am about to post was published in 1923. One can gain insight from A. W. Pink without agreeing with every single point that he makes. He might have a strong statement about the Papacy without having any animosity whatsoever against individuals who are of Catholic persuasion. No offence is intended and none should be taken. I would venture that at least half of the forum participants and lurkers and CPM customers have some interest in the emotional, moral and spiritual motives concerning the GOLD and SILVER question . It is for this reason that I post A. W. Pink.

Very respectfully,


Hill Billy MitchellA.W. Pink and the Antichrist#5313005/06/01; 06:07:43

The following is taken from the Book: "The Antichrist", by Arthur W. Pink. The book was originally published in 1923 by "Bible Truth Depot and was republished in 1988 by Kregel Publications. The excerpt is from pages 148 and 149 of the Kregel publication:

Excerpt begins -------------------------------------------------------------------

We shall notice here but two passages in this prophet. First, in 21:25-27—"And thou, profane wicked Prince of Israel, whose day is come, when iniquity shall have an end, Thus saith the Lord God; Remove the diadem, and take of the crown; this shall not be the same; exalt him that is low, and abase him that is high. I will overturn, overturn, overturn it; and it shall be no more, until He come whose right it is; and I will give it Him".

So far as we are aware, all pre-millennial students regard this passage as a description of the Antichrist. It pictures him as Satan's parody of the Son of Man seated upon "the throne of His glory". It sets him forth as the priest-king. Just as in the Millennium the Lord Jesus will "be a Priest upon His throne" (Zechariah 6:13), so will the Antichrist combine in his person the headships of both the civil and religious realms. He will be what the popes have long aspired to be—head of the World-State, and head of the World-Church.

"And thou, O deadly wounded Wicked One, the Prince of Israel, whose day is come, in the time of the iniquity of the end; thus saith the Lord: remove the mitre, and take off the crown" (R. V.). This is clearly Israel's last king, ere the King of kings and Lord of lords returns to the earth. He is here termed "the Prince of Israel" as the true Christ is denominated "Messiah the Prince" In Daniel 9:25. The description "O deadly wounded Wicked One" looks forward to Revelation 13:12, where we read, "The first Beast whose deadly wound was healed"! "Remove the Mitre and take off the crown," point to his assumption of both priestly and kingly honors. The Hebrew word for "mitre" here is in every other passage used of the head-dress of Israel's high priest! Finally, the statement that his "day is come…in the time of the iniquity of the end" establishes beyond doubt, the identity of this person.

In the opening verses of Ezekiel 28 we have a striking view of the Man of Sin under the title of "the Prince of Tyre", just as what is said of "the King of Tyre" in the second half of the chapter is an esoteric allusion to Satan. First we are told his "heart is lifted up" (v. 2), which is precisely what is said to his father, the Devil, in v. 17. Second, he makes the boast "I am God" and "I sit in the seat of God" (v. 2), which is parallel with 2 Thessalonians 2:4. Third, it is here said of him, "Behold, thou art wiser than Daniel; there is no secret that they can hide from thee" (v. 3), which intimates he will be endowed with superhuman wisdom by that one of whom the same chapter declares, "Thou sealest up the sum, full of wisdom" (v. 12). Fourth, it is said of him, "By thy wisdom and by thine understanding thou hast gotten thee riches, and hast gotten GOLD and SILVER into thy treasures" (v. 4).

Excerpt ends --------------------------------------------------------------------------

Very respectfully submitted,


Hill Billy MitchellThoughts on the Antichrist, and The day of the Lord#5313105/06/01; 06:10:00

Lady Leigh, the first time I read this, "By thy wisdom…thou hast gotten GOLD and SILVER into thy treasures", a light came on for me. The Bible passage was written a few thousand years ago. A. W. Pink wrote his commentary back in 1923. All pointed to a one world government with a one world ruler who would accomplish total control of the world economy and implement his identifying mark to control the economic decisions of every person on earth. Even those who give no credence to our Bible generally would agree that we are rapidly approaching Global Union, cashless economic activity, and total control of the world's inhabitants via computer driven monitoring of all movement on the earth. As a result of the direction earthlings are heading, many now consider as inevitable what once seemed to be far-fetched. What seemed impossible now seems probable in the not too distant future. No ID #, no healthcare. No ID #, no driving privileges, no working privileges, no property ownership privileges, no pursuit of happiness allowed.

The conspiracy that so many speculate about does exist. The conspiracy is not of human origin. The conspiracy is supernatural (hence it moves forward across generational boundaries). It is a satanic conspiracy, a conspiracy to rule the world and to require all to worship, not Almighty God, but Satan, himself. This total government cannot take the reigns of power without economic control. Control of the world money supply is imperative. There will be ONE WORLD GOVERNMENT, and a single ONE WORLD DICTATOR, who will eventually require all to worship him. He will be wise enough to know that economic wealth resides in GOLD and SILVER. Transactions may be of the electronic sort, but the muscle behind the transactions will be his substantial control of the world's supply of physical GOLD and SILVER. I would hesitate to give SILVER any degree of importance save for the simple fact that God says that it will. It is impossible for God to lie therefore up until he renders GOLD and SILVER to be unable to deliver, you can bank on it (pun intended), GOLD and SILVER will deliver.

The Introduction of the Euro is striking enough, but the 20% backing requirement in gold ominous. There is a man, a Beast, behind the scenes, who will step forward at the opportune moment and assume control of the European Union, a Beast, not unlike Hitler, though is mouth will be smoother than oil at the very first and if it were possible he would deceive even the very elect. Of course the Almighty gives assurance that that will not be possible. Now this Beast will have in his economic arsenal the most powerful two weapons ever known to the world, GOLD and SILVER. He will have gotten "into his treasures GOLD and SILVER". Tree in the Forest @ # 52942 offers this hypothetical – "What would really be interesting is if the ECB really doesn't have the gold they claim to have backing the Euro." The answer to this hypothetical - the ECB really does have the gold to back the Euro, and the "Man of Sin", is waiting in the wings for his grand moment to step forward. We have the word of God on this very point.

We have from Biblical prophesy the simple guarantee that neither gold nor silver will lose their luster, that neither will become a relic of the past and that real wealth and financial power resides in GOLD and SILVER until the "Great and Notable DAY OF THE LORD", "THE DAY OF THE LORD’S WRATH", the time when the Lord will consume the Beast with the Spirit of His mouth.

What we have here is an assurance that up until "THAT DAY" GOLD and SILVER will have delivering power, wealth storing power, economic power and that it would be unwise to fall for the trap which the controlled media is laying, that "Gold has become a commodity only", that "it is neither money, nor a store of wealth".

We take the position that the day that "they who are the children of wrath" will cast their GOLD and SILVER into the streets and that those who "are not the children of wrath" will have been translated from this earth is the very day that scripture refers to as "THE DAY OF THE LORD’S WRATH. It is those who are left behind who will not be able to deliver themselves with GOLD and SILVER. This translation of God's saints will no doubt occur just prior to the commencement of the "DAY OF THE LORD’S WRATH" and for this reason we can be assured that it is more than acceptable for those who claim Christ as God and Savior to accumulate GOLD and SILVER up until the very end of the age. This answers the speculation by Horatio @ # 52920 as to what will occur at the second coming of the Savior.

Buena Fe @ # 52897 offered an imprecatory prayer in this regard "MAYDAY...MAYDAY...MAYDAY...come to my help Lord! The rich have defrauded the laborer of his pay! What the rich call WEALTH (US$) is just wood fiber...not REAL WEALTH-GOLD! Burn what they consider to be WEALTH...and raise up your standard - a testament to your promises to hear our cries…" Then Buena Fe in perfect context quotes James 5:1-8 "Go to now, you rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted and your garments are motheaten. Your GOLD and SILVER is cankered; and the rust of them shall be a witness against you, and shall eat your flesh, as it was fire. Ye have heaped treasure together for THE LAST DAYS. Behold the hired labourers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord saboath. Ye have lived in pleasure on the earth, and have been wonton. Ye have nourished your hearts, as in THE DAY OF SLAUGHTER. Ye have condemned and killed the just; and he doth not resist you. Be patient therefore, brethren, unto THE COMING OF THE LORD. Behold, the husbandman waiteth for the precious fruit of the earth, and hath long patience for it, until he receive the early and the latter rain.

This of course leads us back to previously discussed passages, Ezekiel 7:19 and Zephaniah 1:18. The first passage reads, "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: because it is a stumblingblock of their iniquity. The second passage reads, "Neither their SILVER nor their GOLD will be able to deliver them in the DAY OF THE LORD’S WRATH; but the whole land shall be devoured by the fire of His jealously: for he shall make even a speedy riddance of all them that dwell in the land."

Come quickly, Lord Jesus. We gladly leave our modest accumulations behind.


The Invisible HandThe message is getting out!#5313205/06/01; 06:27:03

The May edition of WorldNet magazine, WND's monthly print publication, deals with some red-hot issues dealt with in May's WorldNet, two of which are:
- Why the U.S. abandoned the gold standard;
- Is the gold market being manipulated today?

lamprey_65Black Blade#5313305/06/01; 07:23:20

It seems to me that Mining Web is biased toward big, hedged mines.

Some research on their ownership/financial backing might be in order.

LeighHill Billy Mitchell#5313405/06/01; 08:37:57

Hill Billy, thank you for your inspiring message this morning! I've been interested in this subject since childhood, and I guess that's why I gravitate toward gold. You eloquently (as always) summed up a great deal of astonishing information into a few easy-to-read paragraphs.

One question keeps bothering me, and I keep asking it here because it never gets answered to my satisfaction. If gold and silver are to be the stores of wealth in this future transfer of power, why is it that more people (who you'd think would be in the know) aren't accumulating it? There are lots of people involved in this New World Order business, many of whom are quite rich, and if all of them bought gold, the COMEX would empty out in an hour!

Hill Billy, I know you're an admirer of Mr. Ashcroft, and you might be interested in reading about a dinner he'll be at next week. These PHC events are really fun - you meet the most amazing people there. Wish you and Mrs. HBM lived closer by so you could attend as our guests.

USAGOLDET et al. . . .On Currency Competition#5313505/06/01; 09:48:35

Quote from ET:

Randy asked me the other day what I thought about the "suffering" that has been caused by the US currency hegemony. Why do you think he would ask this? My guess is that he believes great suffering has come to pass and I certainly agree with him. However, he then goes on to say we should adopt another version of the same thing, apparently so the suffering can be spread around a bit.


I have spent more than a small amount of time analyzing and interpreting the Another/FOA message, and I think you have reduced their message to a very narrow interpretation that falls short of of the mark. The statement above is indicative. As a result, I thought I should comment on the subject because I think you've missed a great deal of their message. I hope to add to your thinking as well as to others who may have fallen into the same misreading of their analysis. The danger in this sort of thing as always is that I may not be saying things with which FOA and Another agree, but I think my recapitulation accurate and if I'm missing something, I hope the other participants will fill in the gaps. I will not comment beyond this on this subject, because, as always, I am sensitive to playing too large a role here at this esteemed table. Those who are bored with this sort of thing, I beg your indulgence. Those who revel in it, I think you will find much to chew on. . . .per below.

Onward. . . . .

You and Randy are correct in pointing to dollar hegemony as a source of much suffering in the world -- intended or not. In fact President Bush has expressed the same reservations, more or less in a backhanded way, in his criticisms of the IMF during the campaign. So none of us are alone on those concerns. I think however that you need to expand your understanding of what Another/FOA are trying to convey, because it is not a simple advocacy of the euro over the dollar -- but a much deeper and important advocacy of competition in currencies, much as we have competition in other realms within the economy. This lack of competition is the problem with dollar hegemony and makes it possible for New York based multi-nationals and international banks to make bad (non-repayable) loans in the third world and then turn around and impose stringent conditions through the IMF that strap the local economy and eventually send the people into the streets -- ala Indonesia a year ago -- agitating for "economic" justice. (And of course that's just one example of the excesses of a monolithic reserve currency) Years ago, such injustices would have been fertile ground for Communist agitators, but now with the fall of the Soviet Union perhaps the multi-national crowd has been unjustifiably emboldened. In the long run, competition for this market from Europe, with an agenda of its own, would be good for the dollar and the international economy as well as the U.S. and Europe, and therein lies the real thrust of the FOA/Another analysis.

Let me take this a bit deeper:

I do not believe that Another/FOA are advocating a fiat euro which would "replace" in toto the dollar. Instead they advocate the euro, dollar and gold should "compete" for the hearts and minds of ordinary people (in terms of the currency they employ to store wealth), important financiers (as a hedging methodology), and, yes, central banks and nation states (as a reserve asset). In the case of nation states, the competition would inherently create circumstances leading to each doing what is necessary to make their "reserve" better than the other "reserves."

Under such a regime, the importance of gold ownership, for nation states, as well as individuals, would not be diminished because any nation state is capable of dalliance along the road to currency inflation making it necessary for the other participants to "hedge" their holdings. It is in fact a novel concept built closer to the von Hayek foundation of competing currencies -- including gold -- than possibly your own reliance on a gold standard as the ultimate and only magic dart that will find the target's center.

In fact there is a danger there that you might have overlooked. Take for instance the widely disseminated Kemp/Polyconomics New Bretton Woods proposal of a gold standard being bandied about in the conservative press. That proposal pegs the price of gold at $300. A major problem quickly surfaces: Whatever's left of the U.S. gold supply would disappear completely within six months of posting the $300 price -- the work of Continental Europe begun in the 1960s/1970s will have been fully rendered. The danger of course is the gold standard you would like to see is not remotely connected to the gold standard others, more politically inclined would like to see, so you always end up with this warmed-over version of a gold standard that gets right back where we started.

As a matter of fact, I see the FOA/Another currency concept as closer to the tenets of libertarianism (and Jefferson) than a gold standard because of the exchange restrictions which inevitably follow. In other words, we would very well be right back in 1971 with the United States once again facing the prospect of shipping its gold reserve to Japan and Europe in defense of the over-produced dollar. (Unless of course, the price were set at something like $3000 to $5000 per ounce -- then you might have some equilibrium.) Idealistically the gold advocate would most certainly would like to see a gold exchange standard -- but at what price and what would be the economic consequences if it were to be set where it should be? Polyconomics offers up this arbitrary $300 price because it wouldn't break the current international system, but when it comes to real political/economic policy ideals and practical reality often clash. It's always nice to hear someone like Jack Kemp speak glowingly of gold, but before we roll over and cast adoring glances at the politician perhaps we should better understand what the politician is actually stumping for, and in the Kemp/Polyconomics case it is more currency hegemony under the guise of a free international gold standard, a hegemony paid for by the American people in the form of its gold reserve.

Currency hegemony is precisely the opposite of competition -- it is, in fact, the imposition of a currency, even gold (at a stated currency price, of course), on the population. As such the euro is important in that it challenges that hegemony, and does so with the key concept of utilizing gold as a "currency without a country" to act as a reserve for interventions if required -- a breakthrough. Re-read Mundell on this. You and I and the rest of this forum could be talking about the need for a gold standard now, tomorrow, the day after that and for all the days remaining in both our lives, and I do not believe we will be any closer to its imposition then than we are now -- thanks to the wayward and half-baked thinking on the part of some of the very gold "advocates" who are supposed to understand economic history well enough to anticipate some of the consequences. In other words, the gold standard probably isn't going to happen. In the meanwhile, practically speaking, the best option is for all of us, including the various nation states to own gold as a talisman against our own worst instincts.

If Randy is concerned about hegemony and its effect on various populations, I don't think it's because he would like to replace that same hegemonic error with another. I think he agrees with FOA/Another that competition paves the road to a better international monetary system. I do believe, as FOA/Another do, that with the euro we are talking about the currency of the future here, and I believe that the dollar will eventually be modeled after the euro. Not only that, I believe we are talking about, not just the currency of the future, but the international monetary system of the future -- for what its worth. Sometimes the world heads off in a direction even if we don't want it to.

Once again I'll reiterate what PH hinted at in his post: For most investors the world over, the ownership of gold is a pragmatic undertaking, and what FOA/Another are advocating is a practical, hands-on solution for the average investor -- personal gold ownership. I think Randy agrees with this position, as do I. I can envision private gold ownership as a necessity even under a gold standard -- because there is little doubt in my mind that if the government were to undertake a gold standard even under the best intentions, with Lewellyn Rockwell serving as Chairman of the Fed, it eventually would botch the whole scheme -- politics being what it is. (By the way, I can't imagine a currency regime at this late date that would allow only the circulation of specie. Therefore, you will always have various derivatives in circulation along with the government largesse, currency printing, tinkering with the gold price which threatens the value of the paper. Gresham rules.)

In the end, he who owns the gold, makes the rules. And it is the personal ownership of it that will carry the day on a practical level while governments will do, well ...... governments will do what governments do.

P.S. Watched "Trillion Dollar Bet" on Nova last night -- the story behind LTCM. Fascinating. Peter Fischer is interviewed and blames the LTCM mess on "hubris" -- the enchantment with the perfect mathematical model, that left out one thing -- the absolute unpredictability of human nature. The New York Fed structured the rescue of LTCM and let Sholes, Merton, Merriwether and company off the hook with a bailout. Merriwether has started another fund similar to LTCM -- believe it or not. All of which proves if you are big enough, and the judgment error large enough, the paper money crowd will always ride to the rescue if it can, shower you with money and blessings, drop the load on the public and then turn the other way when you offer to go back and do the very same thing all over again. May we all be showered with financial rewards for our mistakes. I will order the program from PBS and watch it again. I recommend it to all.

Also reading Deaver's look behind the scenes during the Reagan years. A quick, easy read that tells what President Reagan was really like. The man shunned polling and went completely with his innate political instincts (and he was nearly always right), refused to speak under a spotlight so he could see the faces of the people he was addressing and never took his suit or sport coat off in the Oval Office in deference to the institution of the presidency (even in the depths of the Washington summer doldrums) -- a far cry from what the last president managed to accomplish in that same office.

Humble PieFOA return to the forum#5313605/06/01; 10:27:25

Now that you have your bag unpacked and got some rest . when are you going to unload on us ,waiting on pins and needles !
SHIFTYGood to be home#5313705/06/01; 10:45:54

It looks like I may never get caught up on the last two weeks.


JMBAhhhhhh...#5313805/06/01; 11:05:00

BLACK BLADE has me convinced that there's going to be a real problem in the aluminum can industry...there ain't gunna be now you have to drink beer out of a bottle?

So who makes glass bottles? Maybe plastic would be cheaper? Can you imagine "The King of Beers" or "The Champaign of Bottled Beer" being dispensed in plastic? Nah

Welcome home SHIFTY, looking forward to your next song. I sure hope those Californians didn't corrupt you.

Mr GreshamMichael#5313905/06/01; 11:12:15

"too large a role here at this esteemed table"

On the contrary, you pop up consistently with "gravitas", a deep analysis revealing deep thinking. As a host most worthy of the name, you enhance your business by willing to make it "more than business" and taking risks by speaking out. You earn more and more respect with each month passing, I believe.

I'm now relishing taking your printed out posting, out into the sunshine, to enjoy reading at breakfast. Life is good, indeed!

SHIFTYJMB#5314005/06/01; 11:29:13

I spent most of the time in Arizona looking for old Dodge Power Wagons. Only spent three days looking for gold. Had no luck metal detecting. Needed a drywasher. I will not go back to the desert without one.


geBack of the Envelepe Calculations#5314105/06/01; 11:39:29

Having decided to return to the classical gold standard, we want to estimate the equilibrium price. Since we shall avoid the tricky gold-exchange standard where one (USD) or two (USD & Pound) paper IOU's have a key position, equate the world GDP ( USD30 trillions) to CB gold stock (1 billion ounces). Presto! The equilibrium gold price is $30,000! What a tangled web is this?
auspecBelgian/Gold TA#5314205/06/01; 11:41:32

Clif Droke in regards to what he sees as a "time wedge":
"This strongly confirms our analysis of the past several months that the Spring of 2001 would witness a historic bottom in the 21-year bear market for gold."

CD apparently sees something in the gold an Durban Deep charts that is quite encouraging. Does this make sense to you, Belgian, from a TA view? "Time Wedge"??

Come quickly, gold bull market! And Amen to HBM!

JMBSHIFTY#5314305/06/01; 11:54:26

All right, I'll bite.

What is a "drywasher"?

tedwAnti-Christ#5314405/06/01; 12:00:23

I wouldnt bring up the subject but someone else already has.
Before his death, the late Father Malachi Martin did an interview with Art Bell and gave his description of the anti-Christ, also prophecying that most of us would see the anti-Christ in our lifetimes. The fact that Malachi was an official exorcist with the Church lends credibility to his statement.

I realize that this is not really the forum for this but am only responding to HBM post. If anyone wants more information on this subject e-mail me at This email address is being protected from spambots. You need JavaScript enabled to view it. .

This may be related to some of the subjects discussed here as Europe is drifitng toward the establishment of a European Super State (with its own currency;the Euro). Who will be the head of this European Super State?

Black BladeLamprey_65 post #53133 - About Miningweb#5314505/06/01; 12:03:53

You're right of course. "Follow the money." The following is a statement from moneyweb in the section "About miningweb."

Snippit: launched in January 2000, represents the first foray into international internet publishing for Moneyweb, the flagship website of Moneyweb Holdings. Moneyweb is an internet-focused publisher listed on the Johannesburg Stock Exchange [JSE:MNY]. The biggest minority stake in Moneyweb is held by Taita Holdings, a technology-focused investment company which plays an active role in the development of companies in which it invests. Taita is a joint venture between its chief executive, formerly SA's leading IT sector investment analyst Dr Duarte da Silva; and the JSE-listed duo of Black-owned African Harvest and financial services group Peregrine Holdings.

Yet they do claim to be unbiased and independent in their statement. Hmmm… There does not seem to be much of a dissenting opinion offered when controversial issues are presented. There does seem to be a big push on articles that try to put a good light on the practice of forward sales of gold. That probably should not be surprising as they are a SA investment publication and since overly forward sold AngloGold is the 800 lb. Gorilla in the SA mining industry it should not be surprising that they don't want to "rock the boat." Perhaps it is much the same reason why analysts for investment firms won't ever issue a "sell" recommendation for miserable companies - they hope to retain business or acquire future business dealings. At least that's my take on it.

- Black Blade

BelgianLeigh and " THE QUESTION "#5314605/06/01; 12:08:31

Yes, why aren't there any other physical gold-accumulators, who know what FOA/ANOTHER are supposing/speculating/ ????
If the gold for oil game is "THAT" enormous...what is witholding Big Buyers from accelerating the proces ?
Dear FOA/ANOTHER...that is my one and only question . Thanks

Mr Greshamge#5314705/06/01; 12:09:26

(Michael, that was a keeper!)

I think you need a 3-dimensional envelope to do that figuring on. I've always been suspicious of those "flat" extrapolations of either current money supply or GDP vs the number of gold ounces available.

The fact is (stuff from this week's Doug Noland to follow, hopefully) that you neither want to monetise the entire GDP, nor does all other currency disappear even if gold returns to prominence as the counterweight to excessive paper printing. (But what gold doesn't take over from currency, it may get as a wealth holding, so the calculations can vary wildly, so the simple calc may work in the end <-- (my "hey-wadduIknow?" disclaimer))

It's more a multi-variable question of what "market share" among moneys will gold return to? Yes, it may hit the $30,000 mark, but that will likely be after an inflationary printing of many more buckaroos than we even have now.

In current item-for-item purchasing power terms, if we saw a panic spike to (today's equivalent) $30k, that would IMO be time to lighten up. As a wealth holding, though, the first default amongst the $2 trillion in uninsured money market funds could start $2000 moseying on over toward each of those 1 billion ounces pretty quickly. So several factors may simultaneously contribute a stream of dollars toward hard assets.

Also, I've never completely understood FOA's description of the Europeans' willingness to let their dollar holdings be largely written off, but I'm appreciating better now their reasons for doing everything in the transition VERY GRADUALLY. (And not "crashing the system")

SHIFTYJMB#5314805/06/01; 12:10:48

A drywasher is a devise that processes dry dirt. It classifies out the larger rocks and lets the fine dry dirt flow down over riffles. Puffs of air from below the riffles blow off the lighter material and concentrates the heavy stuff .
Black sand and gold stay in and the worthless dirt is blown away. You then pan your concentrates (heavy stuff) and collect your gold.

Black BladeRE: JMB #53138#5314905/06/01; 12:11:49

Personally I prefer "Beer - The Breakfast of Champions."

Seriously though, the aluminum industry in the NW is on hold for the next 2 years as Kaiser and others have sold their energy contracts at a profit and now are taking up production in Trinidad(?) maybe Aruba(?) where NG is plentiful. Cheers!

- Black Blade

Mr GreshamUp On The Roof -- (?)#5315005/06/01; 12:40:00

Bonsai! (?)
ETMK#5315105/06/01; 12:53:41

Hey MK - thanks for a most thorough explanation. I frankly wish you would spend more time here than less. Your insights are most needed.

MK, I've followed this saga since the days at Kitco. I'm certainly in agreement that competition is needed in currencies as well as anything else. I believe I understand what these guys have been saying and up to a point I agree with all they have said. My problem with the entire scheme is that it is not competitive. If I understand all of you correctly, the currencies would be somewhat competitive with each other but it appears to me that gold is coming in a poor third. Since there does not appear to be any particular method to properly value gold, I question the value of hoarding it as wealth within this agreed upon scheme. That is the part of this idea I have attempted to address. I'm sure you and all the others advocating (I'm unsure if this is the correct term), this idea believe it the best that can be accomplished at this time. I don't necessarily agree with that as I do believe the marketplace will force upon society a sounder standard, if not a sound standard. I guess that is just a matter of opinion and we can leave it at that. Hopefully, we'll all live long enough to find out!

Once again, thanks for jumping in. Don't be a Stranger on your own forum! I'm off to Chicago for a week and taking my clubs. Best regards!

UsulBig buyer#5315205/06/01; 13:04:26

Why doesn't Big Buyer rush into gold? I believe that such entities are inevitably diversified into a number of different investment vehicles- most of which would suffer if a rush into gold were to develop and grow- you would see hedged mines and gold shorts going to the wall; there would be dislocations in currency exchange rates that would precipitate a number of LTCMs; in the ensuing financial crisis there would be defaults in the banking system that could potentially cascade following the precedent of Herstatt. In the meantime, Big Buyer takes a bath in their conventional investments. Therefore, no Big Buyer, through self-interest, will rush into gold until forced to by overwhelming circumstances. Well, that's my humble opinion anyway.
ETBelgian#5315305/06/01; 13:05:59

Hey Belgian - thanks for the reply. I don't have an answer to your question. ANOTHER first came on the scene at about the time this trading in London was exposed. If I understand his explanation correctly, he is claiming that a certain amount of gold is flowing in one direction while oil is flowing in the other. As to the exact methodology, I haven't spent any time attempting to learn if it is publicly known. My comments were more along the lines of gold is freely traded in some circumstances by entities that know it is the real money.
ETlamprey, Cavan Man#5315405/06/01; 13:17:40

Hey guys - thanks for the comments. I seem to be the only guy left that believes sound money will return. Everybody seems to be under the impression that government-imposed fiat currency systems are the best that can be expected in today's world. I think that when the credit bust starts to accelerate, some sort of standard will emerge. This has happened in every society where the fiat money has gone bad. I surely don't think this case will be any different, however, it is uncertain at this time what might emerge. I'm betting gold and silver pulls it out in the bottom of the ninth. <g>
USAGOLDET. . . Thanks (!) and a Question for all??#5315505/06/01; 13:22:09

Thanks for the kind words. Let me put it this, ET: I would not want to be a wealthy citizen of either the United States or the European Union without a significant gold holding under present circumstances. Does that adequately express, my level of faith in the respective governments of the political state's in question? I do not profess what is developing as heaven on earth, like the socialists would have you believe, but simply as what is developing. If that reflects a fatalistic view of modern society then so be it. Politics is the art of the possible. Finance is the art of the probable.

Fairways and greens, my friend. The sun came out today but the course is wet and unplayable. I did some gardening early. Thinking about The Legend of Bagger Vance while I did it. Trying to see "the field."

All: Since this is Sunday, and we've had a couple religious posts, here's a question for you: Who was it that characterized socialism as "the promise of the serpent?"

Mr GreshamUsul#5315605/06/01; 13:29:25

So Big Buyer is too big to maneuver his wealth without making too big a splash in the very small gold pond? Again, one of our benefits of being small.

But they must be able to "make inquiries" amongst the various markets worldwide -- Dubai? Shanghai? etc. We would hear nothing about it, of course.

The belief in the Greensput, and the ability of THEIR organization to come through a crisis owning a bigger market share, probably helps keep them fully invested in their ongoing "businesses".

Also, their belief in the continuity of markets, and the ability to jump on a trending gold price after psychology reverses. The ridicule of "gold bugs", and a host of other half-examined impediments to such a shift...

But that was the question I asked Another, about the stratification of the gold market, and "is there no middle?" , for the 10-millionaire who wants a million in physical.

Is there a special branch officer at the Treasury who will finally take the determined would-be "bullionaire" on a personal tour of the Fed NY basement, and show him "his" shelf full of bars?

It's just so hard for me to imagine these "captains of industry" taking NO for an answer, after making the determination to own gold in quantity. Are they really so few -- or so aware of the need to keep quiet in their quest?

That's what it comes down to: CBs, us little loudmouth wisecrackers, and big guys keeping vew-wy vew-wy quiet.

megatronBig Buyer#5315705/06/01; 13:57:47

The thought of riding the public transit system to your court case every day in front of the media after you've been bankrupted would not make me eager to step up to the plate. I'm of course taking about the Hunt Bros.Micheal Milken,etc. Every 'club' has it's rules/conventions and the Hunt's had to be smacked down in public to get the point across. When you are dealing with a world domineering force are you going to jar them into killing you? They can drop an atomic bomb on someone and still sleep, why would they not have an open threat against insiders who would attempt large gold purchases? Remember the 'accidental' bombing of the Chinese embassy? Obviously from my point of view, Buffet was no threat to anybody, and they merely worked around his little shenanigans. I sure if you live in Sicily
there are no street signs saying "Don't Move in on the Mafias turf, Thank You."

beestingWars and Gold!#5315805/06/01; 14:02:09

Saw the video "Born on the 4th of July" last night ,which is a true story of a disillusioned Viet Nam war hero returning home to face life in a wheel chair. Which in turn prompted some more reading from Congressman Ron Paul's book,"Money Book."
Begin quotes from book:

Page 14:
Although it did not become apparent for decades, the Federal Reserve Act made possible the massive inflation necessary to finance our tragic entrance into WWI. The 1921 depression was one result of this depression.
More Federal Reserve inflation during the 1920s, combined with economic interventionism by both Republic and Democratic administrations, caused and perpetuated the Great Depression of the 1930s.
By that 1913 law, a 40% Gold cover for Federal reserve notes and 35% for federal Reserve deposits were required. The fact that it was not 100%(Gold Backed) showed that the central bankers "planned" more inflation.
If a country inflates under a Gold standard, Gold flows out of the Treasury,hamstringing(limiting spending) the government. Since a Gold standard enables the ""average person"" to restrain the government's attempt to inflate, control the economy,run up deficits, and FIGHT SENSELESS WARS, the central planners had to eliminate this fundamental American freedom to own Gold. This was accomplished with the Gold Reserve Act of 1934, which outlawed private ownership of Gold, prohibited the use of "Gold clause" contracts, and abolished the Gold coin standard. The law created the Gold bullion standard,destined to last only 10 years.
Since 1933 the dollar has lost more than 93% of its value in terms of Gold.
The politicians readily accepted the inflationist arguments of the intellectuals, since it was in the interest of the power-hungry politicians to ""destroy"" the system that gave the people, ""not the politicians"",POWER OVER THE MONETARY SYSTEM. As a result, control was handed over to the bankers and bureaucrats, as well as the politicians themselves.....etc. etc.
"There is no subtler nor surer means of overturning the existing basis of society than to debouch the currency,"Keynes had written in 1919. "The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not ONE MAN IN A MILLION is able to diagnose."

And this from page 32:
"People fight the Gold standard", said Ludwig von Misis,"because they want to substitute national autarky for free trade,WAR for PEACE, totalitarian government omnipotence for liberty."

""It is no coincidence that the 19th Century,(1800s) a time of Gold coin standard for the most part, was an ERA of PEACE. Nor is it coincidence that the 20th Contury combines wars with ""paper money"".

And this from page 30:
Government's only legitimate reason for existence is to protect innocent life and property from aggression, foreign or domestic. When it deliberately destroys the money, government is acting perversely, by harming innocent life and property. Short of intentional war, inflation is the most immoral act political leaders can commit. The legalized counterfeiting which is inflation must be ended--now! etc. etc.
In 1974 we reversed the unconstitutional 1934 law that barred private ownership of Gold. In 1977, Gold clause contracts were legalized. In 1979, a bill to repeal the Treasury's power to seize privately held Gold was passed....etc. etc. End of Ron Paul Quotes.( Capital letters and italics added for emphasis only).

Now we begin to understand one of the real reasons governments want and perpetuate "paper money"! TO FINANCE WAR MACHINES!!!!! During the Viet Nam Era I asked myself this question:
Which would I rather have; A life of prosperity for myself and some of the friends I grew up with or be a little poorer and see the friends,"lost forever in Nam", home and trying to lead a normal life? Please ask yourself how would you answer this question?
Thanks for Reading....beesting.

Randy (@ The Tower)Excellent commentary, MK!#5315905/06/01; 15:15:55

I enjoyed your walk through these monetary philosophies of our modern time, particularly those as forecast by ANOTHER and FOA. For as surely as I continually say these things, the point never seems to make it clearly through my type-written jumble of words. To the forum I have become as the constant static heard between the broadcast frequency channels of an AM radio. (But perhaps it is the only consequence to be expected for having "spread myself thin" as only some few in and outside The Tower know.)

But you, my friend, are a gifted writer indeed! I hope the many forum visitors all find time to stop by today for this degree of enlightenment you have provided in the clearest of transmissions. I, for one, shall keep my radio tuned in and turned on!

RockgrabberI love ya GUYS!#5316005/06/01; 15:21:14

Mr. Hill Billy Mitchell, I love honesty in posts. Your heart feels it, post it! Thanks, close to my thoughts, and heart. The people who have been striving to obtain gold cannot be saved through any amount of monetary wealth. It can only buy you seconds of a lifetime. People do live with the now, and not later in life to, I can see.

Mr Black Blade beer is the breakfast of champions. I will not argue with that a bit. Today, just today I cracked a beer when I got up. I did research, and then I have been in the garden ever sinse. I live in So Cal. ((Dont worry about us a bit folks)), we all have our heads in the dirt. We party up untill our death. Its the way of the day. Mr. Black Blade you have been right all along, we sang , we played, we danced all summer long!!

About gardening, I see many of us have this hobby. It is a personel favorite of mine. I LOVE TO GARDEN. What great time to think. Especially when I use plants that the goverment does not want me using. Thanks for not having your heads in the dirt. I have a freind who claims ignorance is bliss....... I beg to differ. Not many who think ignorance is bliss around these parts!! May all of our gardens thrive!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

RockgrabberUSA GOLD#5316105/06/01; 15:28:08

I want to express my thanks with everything I have. I bought a book a few years back. You wrote it, and I wish to thank you for relevant information. Most relevant. That book was a nice intro, but this website is priceless for info, or darn near. I just want to say thanks.

Who did say socialism was the promise of the serpent???? I cant wait to see who had such precise information. I love people who care about what is happening around them. Thanks for letting me know what is going on around me.

auspecZelotes: The GATA African Gold Summit#5316205/06/01; 15:44:56

I always look forward to Adam Hamilton's next read, good guy to have on our side. This is a great read if you missed it. Snippet:
"The actual gold mining companies themselves can probably move the gold info-war to its endgame in a single trading day. All they have to do is jointly and publicly announce either a moratorium on all new hedging and forward sales and close out their existing hedges, which demonstrably depress the gold price, or else announce a pact to jointly limit production until the gold price climbs north of some arbitrary target, say US$500 per ounce. If the African gold producers that supply over a quarter of the annual supply of mined gold decide to force the hands of the anti-gold forces, the game is over and gold will be liberated. When all the voluminous evidence for official covert gold suppression is presented to these companies in Durban, they will likely be furious and may decide to act in a unified and public way that will rock the gold market to its foundations." END

Comment: Yes, the African gold suppliers contribute approx. a fourth of world gold supply and what they do CAN make a huge difference. What will AngloGold do as far as going along with any new hedging changes? Probably hedge more to compensate. What % of South African gold is produced by Anglo? Probably 1/2 of the total amount, but still the remaining companies can make a worthy stance. It is not just mining companies that will soon see the fraudulance hoisted upon them, but also mining union representatives, political leaders, and other significant players in S.A.. Will Anglo be able to take the heat? The S.A. producers have seen fit to help fund this conference, fortunately, and dirty deeds will soon find more daylight. GATA is heading into the belly of the beast. The gold endgame clock will be advanced significantly SOON.
Thank you GATA!

TannehillNetking @ U.S. Mint buys silver#5316305/06/01; 15:53:36

Mr. Netking finally found the article about the transfer of the last remaining portion of the stockpile to the Mint, the link given above.

U.S. National Defense Silver Stockpile Eliminated

(Washington, D.C. – November 27, 2000) The U.S. Defense National Stockpile Center (DNSC) committed to deliver its remaining stockpile of silver, nearly 15 million ounces, to the United States Mint for its coinage programs. The final balance of silver will be shipped to the U.S. Mint over the next few weeks, effectively depleting the silver stockpile.

So, 15 million ounces would be 2-3 years supply. This amount now is in agreement with numbers reported by the U.S.G.S.

That's all from Tannehill

Hill Billy MitchellLeigh @ # 53134 and 53146 - THE QUESTION#5316405/06/01; 16:07:45

Lady Leigh and Sir Belgian

At the risk of being accused of one who thinks he knows it all, I do think I know the answer. It has to do with the idea of "Walking in the Footsteps of Giants". We are walking in their footsteps (footprints); however, we are not walking in their shoes. We are not giants and could never walk in their shoes. Who are they? They are "Big Trader" and kin. They are the very wealthy and the very powerful. They own and control central bank reserves. They do not need physical possession of gold and silver, as we know it. Since they own and control the depositories of incredible amounts of 400-ounce bullion bars, a simple piece of paper represents true physical holdings to them. They have the keys to the vault and not only can take out their 400-ounce bars at will, but also have the power to refuse to release those bars which are owned by the Lilliputians (those who also hold a piece of paper but have no key to the vault). The giants use central banks and their vaults to control substantial amounts of the worlds gold supply and do not need a high fiat price unless and until the fiat which they also control gets exposed as to its real worth (hence the gold truly is their insurance policy). Then and only then will they allow the price of gold to rise to its true level in terms of fiat.

Now we who accumulate our small amounts, mostly in bullion coin form, are not the Lilliputians. We are generally "Little Bittie Working Libertarians", who simply position ourselves to benefit from the inevitable destruction of fiat, namely, the USD, because we see that the GIANTS hold physical 400-ounce bars for the same reason.

There may come a time before the total destruction of the USD when the pricing structure of bullion coins will separate from the paper price, which only truly represents the fiat price of 400-ounce bars. (The paper price is a derivative of the 400-ounce bars, which are stored in bullion banks and central banks, but not a derivative of bullion coins) Somehow the coin bullion buying "little bitties" have been duped into believing that the paper price of gold is also a derivative of bullion coins. This inadvertently works to the advantage of the "little bitties" in two ways. First it keeps the price down when we are accumulating. Secondly it drives the price of coin bullion up into nose bleed stratosphere because not only will the paper price continue to be perceived as deriving from supply and demand of bullion coins but when the 400-ounce price ignites due to fiat destruction the bullion coins can be melted into the 400-ounce variety if the "little bittie" buyers all become sellers. Either way we "little bitties" win. Our only enemy is impatience. One more note: - The Arabs are not "BIG TRADER" types, nor are they "little bitties". They are Lilliputians among a very significant class of pseudo rich who dwell in the earth.

Ok, I admit, that I am in over my head in this area.

Sheepishly submitted,


PS: How do those who have the keys to the vaults get by with this paper price manipulation? I refer you to Holtzman @ # 45018 which can be found in the Hall of Fame. "…Central banks ARE mines… How can a 'first-time' gold mine such as Harmony possibly compete? It survives only while a sufficient number of central banks choose not to mine the cost-free gold out of their vaults."

Hill Billy MitchellLeigh - PHC#5316505/06/01; 16:19:51

I was not aware of Patrick Henry College. I wouldn't mind sponsering a kid for summer camp some time. If you know of the need let me know. You could handle the transfer of the fiat for the fees for me. Also I would like a rain check for myself and Mrs. HMB. Will let you know someday when we are going to be in the area. You would enjoy my wife more than me. She does real things that count. She home educated all of our three daughters with very little help from me. For all of her power she is a rather meek person. She laughs and cries instantly and makes one feel that one has been in the company of an angel.

Some day we will meet. Until then I am

Sincerely yours,


auspecMy How Times Change#5316605/06/01; 16:21:32

This is reposted {again} from Canuck #48914 and has been the matrix for MUCH discussion. Snippet {posted in 1997}:
"Second, if true, the US would have a particular interest in coordinating the funnelling of gold bullion into the Middle East in order to constrain the price of oil from rising to $40/barrel as it should be given the demand/supply situation in crude oil and maximization of Middle Eastern utilization capacities. The US wants to maintain the illusion that oil is not becoming increasingly scarce in order to avoid price inflation at home thus exploding the market bubble.....they want to avoid a 1973-74 crisis at all cost. Stability in oil prices may have come through past transactions of US treasuries to the Middle East in exchange for "price stability favours" but the Arabs increasingly have requested the real store of value: bullion. Thus the Americans may be actually orchestrating the gold sales of other CBs in the interests of "global oil price stability" objectives convincing the Australians and lesser players to sell their gold for the short term objective of containing a price rise in oil that the Saudis are under increasing pressure at home (Islamic pressures) to let go (as the Sheik suggests) .. Note that "officially" the major gold holders, the US, Switzerland, Germany and France (and most certainly England) have hung on to their CB supplies while other lesser players have been "convinced" to sell under the ruse that "gold no longer plays the hedge or security roll it once did." END

Comment: In regards to: "Note that 'officially' the major gold holders, the US, Switzerland, Germany and France {and most certainly England} have hung on to their CB supplies.."
RIGHT! Shows how much the world can turn 'on its axis' in but 4 years. Other than France ALL have serious questions {or absolute answers} in regards to a compromised CB gold position. Where will 4 more years find these excuses for financial management? "Most certainly England"??????? HA. They will be first 'into the abyss'!

Hill Billy MitchellCavan Man#5316705/06/01; 16:52:34


I am half way through "The Education of Henry Adams", as per your recommendation. Having read to this point I have come to two conclusions. Number one, the book is very philosophical in a most unusual way. Number two, you and I have much in common, for I do not know anyone personally, myself excepted, who would read the book through. The book has much to offer but requires much effort on the part of the reader.

Your friend,


ElwoodUSAGOLD (05/06/01; 13:22:09MT - msg#: 53155)#5316805/06/01; 16:52:44

All: Since this is Sunday, and we've had a couple religious posts, here's a question for you: Who was it that characterized socialism as "the promise of the serpent?"

Pope Pius XI
Divini Redemptoris
March 19, 1937

"With eyes lifted on high, our Faith sees the new heavens and the new earth described by Our first Predecessor, St. Peter. While the promises of the false prophets of this earth melt away in blood and tears, the great apocalyptic prophecy of the Redeemer shines forth in heavenly splendor: "Behold, I make all things new." "

auspecFOA & ALL... A Simple Question?#5316905/06/01; 16:53:00

Why the LBMA volume?

Welcome back, FOA.

Black BladeGreenspan to Take Part in BIS Meeting#5317005/06/01; 16:58:01

BASEL, Switzerland (Reuters) - U.S. Federal Reserve Board Chairman Alan Greenspan and European Central Bank President Wim Duisenberg will both take part in a meeting of central bankers on Monday at the Bank for International Settlements in Switzerland.

Black Blade: Cheetah and Dim Wim as a "Tag-Team?" Talk about serpents. Wonder what they will be discussing? ;-)

Cavan ManSir Hill Billy#5317105/06/01; 16:59:37

You give me much too much credit.
Black BladeGenerators, Davis meet Wednesday#5317205/06/01; 17:04:29


When the shareholders of Duke Energy Corp. (NYSE:DKE) gathered for the company's annual meeting, Chief Executive Richard Priory likened California's business climate to that of a Third World country: "It's no different than if it was Ecuador or Peru and we had investment decisions to make in those countries."

Black Blade: Nice way to put it. The "Golden State" - Hmmm...

Cavan Mantedw#5317305/06/01; 17:07:08

I am somewhat familiar with the late Fr. Martin thru his interview with Bell and some of his writing. He also predicted the second coming a couple of years ago--timing off so far as we know. Also has writtien that the RC Church is the only way over to the other side---complete balderdash. However, his credentials as an exorcist are second to none.
Black BladeAre lights going out in California?#5317405/06/01; 17:32:21

Geoff Metcalf interviews state Sen. Tom McClintock on power crisis


I had a group of analysts from the Association of California Water Agencies come through the other day and they say it could be as many as 84 days. It's a dire situation and it is something that the governor cannot spin his way out of. It is a very simple problem: We have far more demand for electricity than we have a supply of electricity.

Black Blade: I too have heard the same assessment myself. We are in recession and an energy crisis in California of this magnitude will drive a stake through the economy. The energy crisis is spreading as the same fundamental problems in regard to energy is present throughout much of the US. People were afraid of Y2K, and yet something potentially worse looms over the horizon. Grab a "gold lifeboat."

tedwCavan Man#5317505/06/01; 18:20:49

Re: Father Malachi Martin

You are mistaken if you believe that Malachi thought the Roman Catholic Church was the only way to the other side.It is not of course. Malachi made it clear in those interviews that he thoght that good people of other faiths could find salvation.

Personally, Im not Catholic so I have no vested interested in the propositon, but Malachi is no longer around to defend himself.

Repentance, and loving God and your neighbor is what is required: not belonging to any particular Church.

JMBTEDW#5317605/06/01; 18:32:58

Your opinion is shared by many people. But as you know, it is not the teaching of the Bible.
tedw$3#5317705/06/01; 18:34:21

Al Fuchino, if your out there what do you think of the possibility of $3 gas this summer.?

I noticed today as I drove by a few stations that the 3 in the gas price is the same size for the dollar as the cents'so I dont know how credible the report of stations buying big 3's is. What say you Al?

Anybody else notice whether the 3's are the same size in the dollar position as the cents positon in their area?

tedw$3#5317805/06/01; 18:34:21

Al Fuchino, if your out there what do you think of the possibility of $3 gas this summer.?

I noticed today as I drove by a few stations that the 3 in the gas price is the same size for the dollar as the cents'so I dont know how credible the report of stations buying big 3's is. What say you Al?

Anybody else notice whether the 3's are the same size in the dollar position as the cents positon in their area?

tedwJMB#5317905/06/01; 18:38:39

This is not an appropriate forum for religious discussion JMB, but repentance and loving God and your neighbor is certainly the teaching of the bible.

It is the Holy Spirit that causes and brings us to repentance whether we realize that or not. Pesonally, I think its entirely possible for a person to be a Christian and not realize he is.

JMBTEDW#5318005/06/01; 18:57:57

Please excuse the inappropriateness of my discussion on this forum.

Now you say, "It is the Holy Spirit that causes and brings us to repentance whether we realize that or not." Maybe change the ending to "...whether we want to or not."

The second paragraph is beautiful but why not end it with, "'s entirely possible for a person to become a Christian having not wanted to." (It sure happened to Paul.)

Cavan Mantedw#5318105/06/01; 19:45:25

Sir, you are wrong. I don't make things up. I read a longish essay Father Martin wrote that was published on the www by a RC Church somewhere in Arizona. Perhaps the essay was a fraud. BTW, being a former RC, I can tell you that is what was taught by the Church; all non-RC's won't pass muster. No more on this subject from me.
JourneymanYou are NOT alone!! @ET#5318205/06/01; 19:55:50

Hi ET!

I'm on a "foreign" computer & can't easily come to yur aid -- It'll be another week & a half!

But I'm still with you. Hard money will rise again!!


CanuckGold for oil#5318305/06/01; 20:10:54

I will offer a little tidbit on the ME oil for gold theory.

I have read and re-read FOA and Another's suppositions many times and have come up with this.

I went back to the POO and noticed the rapid acceleration in early 1999. A 'EIA' page suggested that the rising POO was due to Y2K scares, hoarding and stockpiling. This theory begins to fall apart after Jan. 2000 because the POO hung in over $30 for most of 2000. Even in the latter stages of 2000 and into 2001 the POO hovers near $30.

So what happened in early 1999?

Well I think Greeny began the 'pump' and oil producers not happy with getting X cents on the dollar began the process of hiking their oil. Why would they part with their oil for a 'smaller' dollar. As FOA has said repeatedly, the POO is not a supply/demand issue but a currency valuation issue.

The oil producers, I believe, hold the dollar for ransom. They can ask for $20 or $30 inflated dollars (as we have now) or $19 + X gold. A barrel of oil is a barrel of oil.
They bellow, " me whatever you long as its worth one barrel of oil."

We have learned recently of gold reserves changing status to 'custodial', who is to say that the $19 + X gold has put further gold into the 'custodial' stockpile, the custody of course, in the hands of the ME. Maybe more gold than we know is now non-reserve?

The trade deficit as we know has bit into the gold stockpile, maybe Christian has a point on 'payment POG'.

'Your money for nothing and your chicks for free' is hogwash.


Gold Trail UpdateThe Gold Trail Discussion has been Updated#5318405/06/01; 20:30:53">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
BelgianAuspec....TA and crystal balls#5318505/06/01; 21:13:45

Droke C. is undoubtly, an experienced chartist. But I've learned to relativate the usefulness of TA and Fundamentals.
Both aren't reliable (profitable) in abnormally extended periods of rise and decline. Drooy is worth a study on its own. IMO, it is literally a "Time"-bomb, with the emphasis on Time. And for the time being, Drooy and Gold (in general), are in a very positive position from TA (and fundamental) standpoint (FWIW). Altough I could write a book about all(fascinating) aspects involved in Drooy, I'm not a Drooymateur. Briefly two arguments : Time might be extremely handicapping for its future and who are we to know the finesses of its hedgebook.
Sir, please do remember that we still are in an extremely, speculative-oriented, period and environment. I've seen a similar time-wedge for TVX (and alikes). POG is also in a downward edge and a break above 275$ is supposed to give way for 300$+...etc...etc.
But all this beautifull optimistic stuff can be blown away in a matter of no time. The more knowledge we gather, the more cautious we judge and act. That's why physical gold gives me so much peace of mind.
And young wolves must act as young wolves and have their eys on fast moving preys. With my 50 summers and winters, I prefer the serene and intrinsic beauty of the yellow shiny.
You surely do understand what I'm trying to communicate.
Succes !

SHIFTYPeriodic Ponzi Update PPU#5318605/06/01; 21:18:21

Nasdaq 2,191.53 + Dow 10,951.24 = 13,142.77 divide by 2 = 6,571.38 Ponzi

Looks like they were busy while I was away.

RossL : Thank you kind Sir for the link.


Al FulchinoTed W / All#5318705/06/01; 21:42:16

you: Al Fuchino, if your out there what do you think of the possibility of $3 gas this summer.?

me: Hey Ted, how are ya? A while back I wrote here, if I remember correctly, that we would see something like a 25-50 cent increase over last years prices. Not so far fetched, is it? We are sitting on top of those prices of last year right now.

you: I noticed today as I drove by a few stations that the 3 in the gas price is the same size for the dollar as the cents'so I dont know how credible the report of stations buying big 3's is. What say you Al?

me: In all likelihood, the 3's that you see *are* the same size and there are a couple of reasons why this would be so.

a. The larger "1" that is in the dollar position often yellows over time and a station owner would reasonably choose to keep his sign fresh looking. So he just grabs a "1" from his decimal numbers. Hope I made that clear, if not just ask and I will try again.

b. Since the price insert package usually have fewer of these numbers that go in the dollar position than all the numbers from 0 thru 9 that go in the decimal side, whoever is doing the price change may just be grabbing whatever surfaces first from his shelf or pile.

So these would be two reasons. And they are the most likely.
And by the way, I do not own any $3 inserts hahaha. But I know where to order them. BTW, my lowest priced station is 1.649 for regular.

Now, as to the point of $3 dollar gasoline. It can definietly occur, especially in areas where reformulated product is in very tight supply. I have pointed out here in the past, that the current supply problem is largely from this EPA mandated formula. This gasoline is scheduled to be in storage tanks for resale at different upcoming dates and times, yet the price surge comes before hand, due to the fact that the tanks must be purged of the old first. So the new gas comes in ahead of schedule, so that no old formula remains in the tanks.
Of course this is only part of the picture. It is summer. OPEC did get their act together. And yes refineries have their own issues. In addition, as inflation watchers well know, the intrinsic value of the paper that we trade for this fuel is not what it used to be.

Also, as the Lundberg letter pointed out recently, higher prices are the oil industry's and the customer's saving grace. Suprised to see me post this? Don't be. Higher prices, eventually bring in more product or its replacement.

I have a deja vu attitude about all of this. We will all get used to whatever price it settles out at. I remember gas at 32.9 when my Dad would pull into the neighborhood station. And others here likely remember even better. But it means nothing to my kids. Their memories will be of 99 cent gasoline hahaha. And remember gasoline is really a miraculous product.

Thanks for beckoning me here for a few moments. It is always enjoyable.

Mr GreshamStephen Roach#5318805/06/01; 22:19:14

Don't miss this hearfelt statement from an econ pro.

And now, off to the Trail...

GoldflyMichael's Question#5318905/06/01; 23:01:23

How about this?

"If My requests are not granted, Russia will spread its errors throughout the world, raising up wars and persecutions against the Church. The good will be martryed, the Holy Father will suffer much and various nations will be annihilated."

----The Virgin Mary to the Children at Fatima in July 1917, three months prior to the Bolshevik revolution.

GoldflyOr this?#5319005/06/01; 23:03:17

One of my all-time favorites

Socialism will work in only two places-
Heaven: Where the don't need it, and
Hell: Where they already have it.

-Winston Churchill

gidsekMK @ USAGOLD#5319105/06/01; 23:17:58

Terrific post earlier, one comment if I may.
"In fact there is a danger there that you might have overlooked. Take for instance the widely disseminated Kemp/Polyconomics New Bretton Woods proposal of a gold standard being bandied about in the conservative press. That proposal pegs the price of gold at $300. A major problem quickly surfaces: Whatever's left of the U.S. gold supply would disappear completely within six months of posting the $300 price -- "
Wanniskis' scenario doesn't include a "peg" to gold in the sense that the USG will sell the stuff for $300 (if by the U.S. gold supply you mean the 8000 tonnes that the treasury supposedly has). The idea is to manipulate the money supply, dollar "liquidity" if you will such that the market will price gold at $300 an ounce.

That being said it seems like a down-right silly idea to me.

First, I haven't been able to figure out the reason for that $300 dollar an ounce figure other than than that Jude feels for whatever reasons that there aren't enough bucks in the economy and that there should be somewhat more than there are now. Jude has refered to Greenspan as a "deflationist".

Second, if/when international investment patterns and capital flows change or reverse and the US was committed to keeping the market price of gold at $300/oz I shudder to think what price US bonds would fetch if that is all there is on offer to "sop up" all those extra dollars. Perhaps thats what you meant? That gold sales would be forced upon the US in order to adhere to a $300/oz policy? That could well be true but I know it is not a part of Wanniskis' or Kemps' thinking.

Thirdly W & K seem unaware that the price they favour fixing is that of a type of paper and not that of gold at all. I wonder how well the US economy would function with monetary policy devoted to managing the price of a small subset of derivatives.

I read and enjoyed Wanniskis' treatise on supply side economics but this gold price idea of his is from another planet.


Black BladeLayoffs Renew Recession Fears#5319205/07/01; 00:15:09


The unemployment rate rose to 4.5 percent from 2.3 percent in March, with 6.4 million Americans now out of work and looking for jobs. Most forecasters expect the jobless rate to rise to 5 percent by the end of the year. "…over the past 50 years, there had never been back-to-back months of declining payroll employment without a recession following."

Black Blade: If next set of unemployment numbers are as bad or worse than those released on Friday, it could crater the markets as consumer confidence continues to wane. I suspect that that will occur.

Black BladeOf Golden Lifeboats - WSJ Article#5319305/07/01; 00:23:49


"I've sold more gold coins to stockbrokers over the past nine months than I have over the past 15 years," says Mr. Ritchie, head of Monetary Portfolio Consultants in Scottsdale, Ariz. Although no one is keeping hard statistics, anecdotal and other evidence suggests that some shell-shocked investors may be putting less money into the stock market and more money into so-called hard assets.

One appealing feature of hard assets is that they have intrinsic value and will always be worth something. But the primary lure is that hard assets are negatively correlated with the equities and fixed-income markets. Thus, when stocks and bonds fall, the values of hard assets typically rise.

A study from Ibbotson Associates of Chicago found that in 1973 and 1979, two years impacted by oil-price shocks, commodity-related hard assets outperformed the stock market, returning 32% in 1973 and 70% in 1979.

Black Blade: As many of us have speculated. Manning the Golden lifeboats. And we are in the shadow of an energy crisis as well. From the mainstream press no less. Check Mate!

justamereBearBlack Blade#5319405/07/01; 00:40:17

Hear!! Hear!! to both the last posts


BelgianHBM/AUSPEC/USUL/GRESHAM/#5319505/07/01; 02:39:06

HBM: I do accept the vision (yours also) of the "very powerful" and "very wealthy" . But there is something fatalistic in that notion of an all overwhelming force.
I rather agree with Sir, Gresham that there definitely are "captains" who can rock the goldboat. The simple maths, already done here, are enough reason, to hold on to "the question". (intellectual honesty)
Usul, suggests some fear, to take any action against the very powerful (somewhat mythical). As I said before...there are still pirates around. This logic is constantly disturbing me in accepting that all are ruled all the time.
The first space-tourist already happened. What does it take more to sop up 1.000 tonnes of gold in one go ? A wolf in sheepskin ?

Auspec : Zelotes-#53162
In contrast wih most of us here, I do consider the goldproducers as the third force in gold with their underground reserves. It is a very brave initiative from GATA to work on their mobilisation, despite their fragmentation (big + small miners-globally). The GATA-pressure might force them to change the unfolding speed of what I strongly suspect as a hidden agenda, collusive or not. The more they order so called neutral intellectuals to do studies (LBS) and publicise them...the more I suspect they have to hide an essential link in the total goldpicture. The entire goldproducer community is dominated by the Big five. In spite of the fragmentation-handicap, they do not behave in a normal way. I can only speculate on their deeper motives. Frustrating, isn't it.
In all communiques they are issuing...I read more between their lines than what they actually try to make us believe.
Maybe some paranoia is taking hold of me (smile).
Goldproducers have the capacity to create gold-euphoria at the right moment. They don't have to accept persé the gloom and doom. They have thousands of underground tonnes to defend and valuate. One day all this small and big fishes will swim into the same direction even if it has to be against the current. They will be involved in the revaluation of gold.
Naive ?

NetkingAnother golden thought. #5319605/07/01; 03:53:30

"Living in a garage doesn't make you a car any more than going to a Church makes you a Christian...even rats can go to Church." It's what we do with what we believe that counts - my dimes worth friends.
TopazEurope-wide Governance.#5319705/07/01; 07:09:12

Theres a lot of talk from Europe lately relating to a shift in EU operation from "union" to "government" - with all the attendant noise (mostly) anti - and pro.
The doomsayers of course have a mountain of data (factual and anecdotal) to dismiss such a notion out-of-hand however the concept simply won't go away.
On face value it seems a ludicrous proposal - Who'd hand over their Economic, Monetary, Souvereign and Fiscal rights to Brussels no matter how well planned the "union" appeared? - Well!!.....It may not be all that bad an idea after all, and certainly good for Gold.
Our psudo-democrasie's (Yes, the one's where much ado is made about freedom, voting, rights - yudda) all apparently suffer from the same illusion - we conceptually control, via the Ballot-box, our own destiny "EXCEPT" that which is the very lifeblood of our nirvana......."The Money".
A democratic system cannot operate when "Government" has direct control of Monetary policy, or so it seems...and the EU, in persuing a Gov't role, would be also considering a reduction in it's Monetary management capacity.
Well, not exactly it's "management" role but I think it fair to assume they would relinquish the ultimate denominator role to "others".....
.....and what "Other" asset class provides this "outstanding" ultimate denominator spec? Why Gold of course!

aunuggetsLease Rates In Negative Territory ???#5319805/07/01; 07:36:02

Noticed lease rates at (minus) -1.9000 percent this morning on Kitco quotes. Guess the BBs are now going to start paying "US" to take their "worthless stuff" !! (big grin)
Randy (@ The Tower)Over One Hundred Years *this* particular form (there's no telling what may have preceded)#5319905/07/01; 09:42:35

These coins have been the embodiment of wealth since before you were born. The gold contained therein has had a steady lineage of ownership since the day it was laboriously wrested from the firm grip of Mother Earth. It was fully owned yesterday, and even as we speak it is owned today; and will be tomorrow. Will history count you among the unbroken line of living souls who held sole and undisputable ownership (meaning, possession) of this "wealth of kings"? There is only one way to make it so.... engage.
Broken TeeGasoline Watch#5320005/07/01; 09:45:04

Cost of Gas at a neigborhood 7-11 in Denver, Colorado this morning $1.75.9. Up 6 cents from last week.
Broken TeeGasoline Watch - Clarification#5320105/07/01; 09:52:56

grade of gas in question, Regular Unleaded
geMr Gresham msg#: 53147#5320205/07/01; 10:05:08

In search of that 3-dimensional envelope, I wander into the jungle of ideas:

I guess there is a difference between the classical gold standard (pre World War I) and the gold exchange standard of Bretton Woods and interwar period (between WWI & WWII). DeGaulle's major monetary adviser, the classical gold-standard economist Jacques Rueff was very insistent on this difference. In the gold-exchange standard, one paper currency is as good as gold. I vote for the classical one.

Trade cycle can occur even with 100% gold backing says Mises:…. "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." …. Enjoying myself, I vote for the abolition of the fractional reserve banking. The difference between M1, M2 and M3 whither away.

Well, if we all agree on these points, Money/GDP ratio climbs to at least 0.5 to 0.7.

GalearisOn silver: an email to Rhody#5320305/07/01; 10:18:43

I thought I would share an email with the group. As gold and silver bugs, we can all, from time to time, sadden under the weight of doubt. So this becomes a "spin" and a rationale for what we are and why we do it. I hope it finds some connection with the group - and cheers up those of us (me to) who from time to time question the reality of the times and our responses to it. The article I refer to is in the link above - which is recommended.
I don't share your temporary gloom about the future of hard (pm) asset money, my dear brother. I don't believe anything has changed significantly at all. It is still "it's the dollar, stupid" and the stock market mania - derivative driven both; the dollar derived from nothing and representing nothing and stocks and derivatives over-valued in dollars that are themselves "overvalued".

I know your moods can overwelm. "They" may even, as you say, be able to keep the POS papered down in price (or frozen) for a time even when there are NO above ground stocks left. But that that simply underlines/confirms the reality that the present COMEX market is not real. It would BE the confirmation of the death of COMEX. At worst it would be concurrent with the death of western (or all) stock markets and just another symptom of the fatal malaise.

The only change I see in most of the writings of pundit bears are now focusing increasingly on this alone. They ignore the SMs because they really don't have to be discussed - simply because they are not performing rationally. They focus on their illogic and are a source of hard (?) information and a lot of entertainment value of the follies of human behavior. This is what the article below ends up saying. It's not the Titanic image that works in this scenario, it's the plane taking off and reaching into the fatal stall.

Meanwhile PHYSICAL gold, bullion and coin, demand continues to roar and we are seeing the shortages talked about - as lately as yesterday by an out-of-the-loop collectibles dealer who cannot find new stock. I have little doubt that Kodac and other users have a fatal disease - they, as clients of the Silver Users' Institute, are part of the problem and will also have to pay the price. When the great ship stalls and crashes and ALL (?) paper burns, those who bought the bullion will have something, those that didn't won't.

It all boils down to perception: ask yourself why sterling is so pricey still - and even more so. Is it because these items are more serviceable than stainless steel - or is it because the buyers and sellers of used sterling are still dealing in it as a fabricated asset money? Why, in turn, would people pay outlandish prices for 10K gold that is only .416 pure? The answer is public perception. The public, even our head-in-the-sands western public, still consider this material as money cast into forms.

All is driven by perception - incorrect or not - from the belief for those in the SMs that the FED will continue to inflate in a "healthy" fashion to keep the bull alive, the "value" of the USD, to the pms that ARE ALL considered hard money items. Sterling and silver, 10K, 14K, 18K and bullion coins will be money - they still are to the public. Remember always when you walk in the antique shows that this is what drives the curious prices for sterling AND gold, that both the dealers and those that buy look on this material as money assets. Why WOULD people purchase and pay outlandishly for these impoverished gold amalgams if MOST of this is NOT the perception. The same can be said for the less impoverished amalgams involving silver.

The vast majority of us will be vastly the poorer in life style after the dust settles. Worst case scenario: if we have a "barter rich" economy, we will still be the richer amidst an ocean of poverty stricken moral majority people that never thought all this was very interesting, bank account proponents, dot comers and other speculators in paper. And that is what hedging is all about, yes? I will have the junk silver, the gold rings and sterling scrap to haul around with my weigh scales to the local farmers markets (and new-focus flea markets) and I will be trading for my daily bread. I will know that then, as now, the public will STILL consider this material the superior asset. I will not (probably) even then be much cursing Al Greenspan, who fought the good fight and did what he thought could stave off the inevitable crash of the long wave cycle - but I will not be as happy as I am right now by a long shot. I will also not be a finger pointer and one of the mob out for the blood of the goat; I will be too busy trying to survive.

Old YellerFinancial Times performs debunking operation#5320405/07/01; 10:28:50

It would seem that a rather broad and conclusive verdict has been delivered about this little issue by the Financial Times.

Boy,that's a relief.Too bad they didn't ask Reg Howe about his take on the situation;but then they'd have to write a real,objective piece.

Thanks to cjk at Kitco for the link.

megatronGalearis#5320505/07/01; 12:32:43

Was informed by my silver dealer here in the NorthWest that no more stock of 2001 MapleLeafs are available until Aug. Said they could sell me 400-2000's. That's all they had. They are a very large dealer.
USAGOLDTest. . .#5320605/07/01; 15:57:41

Getting reports of problems. . . .

Just testing.

Randy (@ The Tower)Internet access has now been restored after a general service outage this afternoon#5320705/07/01; 18:21:04

So much to talk about, yet so little time!

Are you fully prepared for the coming transition?

got gold?

RAPUASGOLD down due kalifornia blackout??#5320805/07/01; 18:42:36

Kalifornia in stage three alert again.
Galearis@ megatron re silver....#5320905/07/01; 18:58:42

silver maples


Nice to have USAGOLD up again, yes?

I have no doubt about a growing shortage of silver in North America. It is already worse in Europe where most of their bullion is not in the form that we would find useful. At the same time there will be regional disparities of plenty and scarcity on this side of the water. There is still plenty in the east - Maples, that is - if one doesn't mind the premium added for them (for which reason I do not advocate them). For that matter there is still plenty of wafers (JMs) and bars of small to large sizes (which I do advocate). All this, of course, of anecdotal value only - and in no way indicates the true shortage situation.

Anecdotal too is Mexico allegedly reaching out into the spot market for their minting needs. Canada and the US are both silver producers and apparently their stocks are not what they should be.

Best we watch for the closing of refineries. Then we will ALL know the shortage is well and truly HERE. All refineries are by now a Handy and Harmon waiting to happen.

I am continually mystified that all these news items implying, no, YELLING SHORTAGE are so constantly/perpetually missed by the investing public. Perhaps everyone is too distracted by their losses of "real money" on the stock markets to notice the other money available to them.

Trust me, they will notice when this too is all gone (smile)

Best regards,


auspecChump Change {Not}#5321005/07/01; 19:50:41

From Robert Chapman @ GE for those wondering where some of the bigger players are putting money:

"It was a stunning revelation when at the FT Gold Conference, the World Gold Council's Robert Weinberg said, 35 high net worth investors have invested some $800 million in the purchase of approximately 90 tons of gold in the last year."

Comment: Kathud, Kathud, Henri!

Tree in the ForestGalearis, auspec#5321105/07/01; 20:16:16

Galearis: When you are feeling low and bemoaning the current metals market, think on this: West Point gold is now custodial gold. They are desparate. This can only lead to default. It means that the end time is soon.

auspec: I had a reply to you last Friday and lost it! I shall rewrite it.

Tree in the ForestCOMEX#5321205/07/01; 20:18:54

The Comex is strangely quiet. Silver slowly trickling out. Gold comatose with stock of around 800,000 oz.
Black BladeRolling Blackouts Possible - Actually Just Started#5321305/07/01; 20:58:37


The possibility of rolling blackouts grew stronger mid-morning Monday. By noon, the state stood under a Stage 2 power alert.

Black Blade: Rolling blackouts statewide started about 3 hours ago. ".. and they danced, sang, and played all summer long….in the dark." Recent rumors were that there would be about 90 days of rolling blackouts in California this ummer. Looks like they got an early start. BTW, heard that 3com may go chapter 11. So far just a rumor.

Black BladePower Scramble#5321405/07/01; 21:04:53


NEW YORK - Rolling blackouts and a bankrupt utility in California have touched off much soul-searching throughout the country about how best to run the country's electrical grid and how best to keep electricity prices manageable for consumers and businesses, while allowing utilities to compete in the open market.

Black Blade: Article has several links to other Forbes articles on the energy crisis. Y2K? Ha! This energy crisis may yet be all that Y2K was supposed to be.

Mr Greshamoutage#5321505/07/01; 21:40:50

Days like today, I get that little panic in the pit of my stomach: how will we communicate if the Net goes down? (Does MK have a message number with a recording?)
Horatio(No Subject)#5321605/07/01; 22:00:11

Anglo to split
Bonanza Silver up 100 %

Black BladeCalif. Assembly Approves Power Bond Sale#5321705/07/01; 22:04:26


SACRAMENTO, Calif. (Reuters) - The California Assembly approved a plan Monday to sell $13.4 billion in bonds to pay for electricity during the state's power crisis, marking what would be the biggest municipal bond issue in U.S. history.

Black Blade: Californian taxe rates are going up. Someone has to service this new debt. Thanks are due to Der Kommissar Davis. While the SS Kalifornia slips beneath the waves, there is time for some to jump into Golden lifeboats amid the inevitable carnage.

HoratioMcVeigh#5321805/07/01; 22:52:43

Janet Reno & Bill Klinton and yes Hillary Created Tim Mc Veigh.I heard rumblings that Hillary was directing Reno behind the scenes.Todays letters by Mc Veigh written to his friend ,Popov was very revealing about the intellagence and sincereity of Mc Veigh and the way his mind works.If the tradgedy of WACO and Ruby Ridge were properly dealt with,those with the mind set of McVeigh could have been avoided and the Gumment knew it.
They have hundreds of psycology and "Profile "people working for them ,thay had to know someone out there was going to retaliate.Yet they chose to hang tough and find ATF and FBI innocent and gave them Bonus to boot.
And again last week it was revealed the FBI kept an innocent man in jail for 30 years.Americas government is doing what all governments do ,protect themselves from the people.A major dose of humility by the government is going to be needed if U.S. is going to survive the up coming Dollar crash and civil disorder.Bush needs to follow the POPE's footsteps and apologise to the Nation for past misdeeds. Just as the POPE makes peace with the Jews and Moslems and Orthodox Christian Church .Government needs to make peace with the People.

megatronCali Bonds#5321905/07/01; 23:15:01

I wonder how many idiots in California will buy these bonds, to tax themselves in the future?
Tannehillnet surfing on Silver Chopsticks#532205/8/01; 00:29:19

Just a little something to think about on a slow Monday evening. Didn't have to work today, tried some net surfing to research my question on Silver chopsticks. Thought I would share the results with the forum. I suspect some intesest in silver chopsticks more likely in Korea, where metal chopsticks are more traditional.

"In ancient China, chopsticks were always made of silver in the royal family. The emperor was very important to the whole country. To prevent the emperor from being poisoned, servants would test the food with silver chopsticks which change color upon contact with certain types of poisons."
link: STUDENT'S NAME: Yung-Ming Ou

"The wealthy, however, often had chopsticks made from jade, gold, bronze, brass, agate, coral, ivory, and silver. In fact, during dynastic times it was thought that silver chopsticks would turn black if they came into contact with poisoned food. It is now known that silver had no reaction to arsenic or cyanide, but if rotten eggs, onions, or garlic were used, the hydrogen sulfide they released might cause the chopsticks to change color." link:

"Chopsticks are viewed by some as an art form. In 1987, a New York jewelry designer entered a pair of sterling silver chopsticks with an elegant Grecian Ionic Column design in an international design competition. She won the grand prize, and the chopsticks are now on display in the Cooper-Hewitt Nation Museum of Design. Collectors appreciate the folklore and history embodied in the pieces they acquire and see them as family heirlooms rather than mere utensils." link:

"Silver utensils have long been indicative of good taste and wealth. It is also believed that silver, if encountered with poison, would discolor. These chopsticks therefore protected those dining with them. Silver chopsticks were especially fashionable in the 1920s and 1930s mainly for their elegance." link:

And finally think about this---
"Many poems, riddles, and songs mention chopsticks. They are often used as props by acrobats and dances. And today more than a billion Chinese people eat with them." link:

That's all from Tannehill

NetkingGalearis - Silver#532215/8/01; 00:40:38

Some regional/national disparity in the POS for sure, something for the arb's to take advantage of yes, eg I picked up some more bars over the last week at the converted USD rate of $3.97/ that will NOT last!

HoratioKlinton#5322205/08/01; 00:48:39

Klinton goes to China.Who is paying for the trip?
Years ago the KGB paid for Klintons trip to Moscow when he was a student.Why is he going?Whats in it for the Chinese ?Is he thier man in the U.S.?Do they own him?

SteveHrepost#5322305/08/01; 02:06:09

The GATA African Gold Summit
by Adam Hamilton, CPA, MCSE

While the gold price appears to be calm and placid on the surface, powerful forces war behind the scenes in a life or death struggle to shape the gold market of the new millennium. The world gold markets are embroiled in a raging gold information war. The stakes are stupendously high, as the state of the gold market and the price of gold do not exist in a vacuum. Virtually every other important capital market in the world, from the mammoth currency foreign exchange markets to the critical international bond markets, is affected directly or indirectly by the price of gold.

Unlike past economic/financial wars, the current war on gold has not degenerated into actual physical conflict. At the dawn of the Information Age, this latest gold war is not being fought with Kalishnakovs and M-16s, but with fantastic new communication technologies centering around the wondrous Internet. It is, in many aspects, a perfect example of a true information war.

The currently raging gold info-war is a fight for free markets and for the hearts and minds of investors worldwide.

As in most epic conflicts, the combatants of this gold info-war are divided into two camps. The slogan of the first group of soldiers could be expressed in three words, "Gold IS dead!" The battle cry for the second group of warriors could be summarized as "Gold IS being suppressed and a price explosion is imminent."

The "Gold IS dead!" partisans can also be described as anti-gold forces. They believe that timeless financial lessons learned in the past do not apply anymore to our fantastically complex global economy. They believe that gold is a "barbaric relic", with no place in computerized and globally integrated financial markets. The anti-gold forces generally think that humanity has finally "tamed the business cycle" and a paper-based, derivatives controlled global financial system can continue to expand at rapid rates forever.

This camp believes governments and large private entities can control fiat currencies, markets, and wealth-creation indefinitely. The traditional role of gold as the monetary base and ultimate asset is thought to no longer be necessary by the anti-gold forces because systemic risk has been mitigated through the light-speed, 24/7 global financial infrastructure humankind has collectively created. Through the proliferation of derivatives, the anti-gold forces believe risk can be bought and sold until the markets as a whole never experience a boom bust cycle. With the seductive prospect of no future economic/financial earthquakes, the anti-gold forces believe there is no need for the ultimate rock of financial security, fire-tested through millennia of human history_ gold.

Standing in the other corner are the allies of gold.

The pro-gold forces are small in numbers but ferocious in resolve. They believe that financial history DOES matter, and that gold will always have the same critical role as the cornerstone of the financial world that it has maintained virtually uninterrupted for six thousand years. The pro-gold forces are generally students of economics, history, finance, and money. They have vicariously witnessed past financial manias and past attempts to cast gold out of the financial system through the eyes of people who lived through these past historical episodes. The pro-gold partisans recognize that markets move in cycles and trends always change. They also realize that the human heart, the ultimate source of greed and fear that drives booms and busts, also changes not through history.

Many of the pro-gold forces, after years of study, believe the world gold market is currently actively being suppressed by a few governments and elite private banks for selfish reasons. The governments are trying to cover up past policy failures and protect their 100% paper, backed by nothing but faith and trust, fiat currencies and overvalued equity markets. The private banks enthusiastically jumped into the gold manipulation game because borrowing gold at sub 1% lease rates and selling it provided a virtually endless supply of very cheap capital that could be invested in other markets at an enormous profit.

The pro-gold forces believe that after endless research and investigation over the last six or so years the case for a manipulated gold market is virtually unassailable. They note that the laws of economics are ironclad and irrevocable, and can only be cast asunder and bent for a relatively short period of time, as history has taught us over and over.

As the gold info-war rages on, there have been victories and defeats for both sides. Generally, however, the anti-gold forces seem to have the upper hand as gold continues to hover near 20+ year lows. The pro-gold armies, although they control miniscule amounts of capital compared to the governments and banks believed to be suppressing gold, make up for their disparity of resources with world-class research, a mastery of cutting-edge Information Age technologies like the Internet, unquenchable zeal, and undying tenacity.

Like any good local guerilla army fighting a much larger and better-equipped aggressor, the forces for free gold markets carefully choose their engagements.

The next major battle initiated by the pro-gold forces, and potential turning point in the gold info-war, occurs May 10, 2001 in Durban, South Africa. The Gold Anti-Trust Action Committee ( GATA _ ) is hosting an African Gold Summit where crucial evidence will be presented to important African governments, gold-mining companies, mining labor interests, and the media about what has transpired in the global gold market in recent years.

With the global physical gold market centered in London and the global paper gold derivatives market revolving around London and New York City, Durban may seem an unlikely battlefield for a potentially decisive confrontation in the gold info-war. It is actually a perfect location, however, as South Africa has critical strategic importance in the global gold trade. South Africa alone supplies around a quarter of the total mined global gold supply each year, with other African nations contributing more gold. At its peak production in 1970, South Africa supplied almost four-fifths of the annual mined gold supply. Gold mining is an extremely important strategic industry to the entire country and region, and the low gold price has exacted a devastating toll on the Africans.

The love of gold in South Africa runs deep, it is a crucial macro supplier of gold, and it has born the brunt of the bitter fruit of the anti-gold campaign. There is probably no better place in the world to hold a pro-gold, pro-free market conference that exposes damning evidence of what has really transpired in the global gold markets since the mid 1990s.

The line-up of warriors GATA is presenting is simply extraordinary, a veritable "Who's Who" of the gold world. Among the presenters include Bill Murphy, Frank Veneroso, Reg Howe, and James Turk. These are the all-stars and movers and shakers in the fight to liberate the world gold markets! It will be an incredible summit.

Bill Murphy is a founder and the Chairman of GATA. He has fought long and hard to illuminate gold market dynamics and to unshackle the gold market to trade free of government molestation. He has traveled to the US Congress to present the dangers of unprecedented growth in gold derivatives. He has spoken with gold producers, gold investors, and gold consumers all over the world. He is also the proprietor of the excellent award-winning contrarian website LeMetropole Cafe ( ) .

With his high profile "four-star general" position in the pro-gold forces, Mr. Murphy has extensive global contacts and one of the best gold intelligence gathering networks on the planet. He is one of the most "plugged-in" individuals in the world gold market.

Murphy has been commenting lately to his clients on the unnatural tightness in the physical gold market. He points out that sky-high gold lease rates in recent months indicate that physical gold available for lease is becoming harder and harder to come by. He has also been carefully monitoring the deteriorating situation in the gold derivates market centered around the NY COMEX. Physical gold inventories to settle futures contracts that demand delivery have plummeted from around 2.0m ounces at the beginning of the year to around 0.8m in early May. Although one wouldn't know it from the perpetually anti-gold propaganda spewed out by the conventional financial media, it appears there are serious structural problems in the global gold trade percolating menacingly right below the surface.

Murphy will no doubt present much more information in Durban about the current state of the world gold markets. It will be a real eye-opener for conference attendees who rely on the mainstream media which is hopelessly disseminating disinformation on gold. As Murphy also probably has many private sources that provide highly valuable gold market intelligence on specific gold market happenings, there is also the possibility that he has an ace or two up his sleeve to throw down for the African governments and gold producers.

Frank Veneroso is also presenting in Durban. Mr. Veneroso has been studying the global financial markets for decades and his reputation for gold market analysis is unparalleled. He has consulted for governments and mega-financial entities around the world, and his services are always in demand. He has also presented data to the US Congress on the danger inherent in explosive and massive gold derivatives growth. He runs a renowned global consultancy, Veneroso Associates. Veneroso has been studying gold supply and demand dynamics for decades.

As the GATA Gold Summit is by invitation only for elite African gold players, we are fortunate that Mr. Veneroso was kind enough to post a preview of his presentation on the Web. It is located at and is highly recommended reading. Veneroso's findings in this preview are simply amazing and could alone rock the gold world to its very core.

As everyone from a professor of economics to a child setting up a corner lemonade stand knows, prices in free markets are determined by supply and demand. If supply EXCEEDS demand, prices fall to increase demand and lower supply until a market clearing equilibrium point is reached, where supply exactly meets demand. If demand EXCEEDS supply, however, just the opposite happens in free markets. Prices rise to retard demand and entice additional production online until supply equals demand at a new market clearing equilibrium price. These simple thoughts are literally THE foundation for free markets and economics. Although the immutable laws of supply and demand have been briefly bent historically, no force has ever been able to repeal these laws on a macro scale for a prolonged period of time.

Veneroso begins his web presentation preview by outlining consensus estimates of global gold supply and demand, which point to global annual gold demand exceeding global annual mined gold supply by 1500 tonnes, or 60%, each year. He moves on to present his own firm's conservative estimates, which put the annual deficit at much more dangerous levels, over 2200 tonnes, around 90%. The vast majority of the annual gold shortfall is made up by sales and loans of gold from Western central banks. If those sales are interrupted for any reason, or if the gold market finds out the banks are running out of gold to dump, the gold price would roar heavenwards immediately as artificial marginal supply from central banks shrivels up.

Veneroso also examines the total gold loan ( gold short ) position, which he and his people believe is 100% to 200% greater than the 5,000 tonne conventional consensus estimate. He goes on to outline reasons why the official data on gold provided by certain London-based organizations is likely to be incorrect. At the GATA African Gold Summit he will outline these reasons in detail as well as present the sources and basis of the stunning Veneroso Associates analysis of the global gold market.

At the end of his preview slides, Veneroso notes that there are approximately only six years of central bank gold stocks remaining. This number is amazing as the anti-gold forces have continually led the markets to believe that there are decades and decades of gold reserves left that central banks will sell into the market.

Overall, the impression Veneroso's preview leaves is that the Veneroso Associates' carefully researched and documented analysis on the economic realities of the gold market is going to be explosive. The African attendees will realize that the anti-gold campaign has been weighed in the balances of free markets and found wanting. If the gold short position is indeed this large and the central banks are burning through their gold hordes this fast, the potential implications of Veneroso's research are staggering. A man who needs no introduction in the gold world, Reg Howe, will also present in Durban on May 10. Mr. Howe, of course, is the gentleman who launched the incredible legal action against the Bank for International Settlements, Alan Greenspan, and other elite anti-gold players on December 7, 2000. Mr. Howe is the proprietor of Golden Sextant, an internationally renowned website located at which discusses money, politics, economics, and gold. He is a brilliant attorney who has been studying and analyzing the gold market for decades. Since he filed his complaint, he has probably been more responsible for keeping the anti-gold forces awake at night dripping in cold sweat and fear than any other individual on the planet.

The Howe v. BIS et al case is tremendously important. We wrote an earlier essay explaining it entitled "Let Slip the Dogs of War". Basically, the complaint contends the defendants in their operations in the gold market have knowingly violated pillars of US law including the United States Constitution, the Sherman Anti-Trust Act, and the Securities Exchange Act of 1934. Howe also contends that some defendants committed common-law fraud. Howe's original case, as well as his response to the expected Motions to Dismiss by the defendants, is available for free quick and easy download in Adobe PDF format at . Both documents are extraordinary and absolutely essential reading for understanding the current gold info-war.

In his recently filed response, Howe carefully laid out his arguments and the legal foundations on which his claims rest. One of the most spectacular parts of the document, however, is the revelation of Howe's discovery in official United States Federal Reserve meeting minutes that the secretive slush fund of the US Treasury, the Exchange Stabilization Fund, is apparently actively intervening in the gold market.

The Exchange Stabilization Fund, created in 1934 and funded with the filthy proceeds of Socialist President Franklin Roosevelt's robbery of private gold from the American populace, is not accountable to the United States Congress. The US Secretary of the Treasury has direct control over the ESF and he reports exclusively to the President of the United States. The ESF has been used for stealthy and covert interventions in various world markets, usually currencies FOREX, for many decades.

In early 1995, major American money-center banks were facing large losses on loans they made to Mexico. The Clinton administration made the decision it wanted to bail the elite banks out, effectively back-stopping their silly bets. Clinton's market manipulating crew ran up against a brick wall when they tried to talk the US Congress into using taxpayer money to bail out the fat cat bankers who had made risky loans in Mexico, however. Congress rightfully refused, realizing that the only way capitalism can work is if traders, both big and small, fully bear all the risk of their positions themselves. Without risk, there is no capitalism. Back-stopping the trades of big US banks only encourages them to act more aggressively in the future and introduces a MONUMENTAL moral hazard problem.

With Congress saying "NO WAY!", Clinton's cronies explored their options to make an end-run around the will of the US people as expressed by our elected representatives in Congress. They came up with the idea of using the ESF to bail out their banker friends since it was not accountable to Congress and operated outside of normal oversight authority.

In the Federal Reserve meeting minutes from January 31, 1995, there is a discussion exploring the legality of this option. Federal Reserve Board Governor Lawrence Lindsey is uncomfortable with circumventing Congressional will with the ESF. In order to allay his fears, the Fed's General Counsel J. Virgil Mattingly replied and told him about the broad authority of the ESF statute. As an example of this authority, Mattingly mentioned the ESF "gold swaps", and apparently everyone in the room understood the example as no one asked questions.

This is an inflammatory revelation because the US Treasury has officially DENIED, to everyone from US Senators to American citizens to the US federal court system, that the ESF has been involved in gold or gold derivatives since 1978. Every communication from the US Treasury on the subject explicitly and forcefully states the ESF is NOT involved in the gold market. Many in the pro-gold community, however, believe the ESF has been used to actively sell gold into the market to stamp out fledgling gold rallies in the last six years. The disclosure of gold involvement by the ESF in a 1995 Federal Reserve meeting is very important and has tremendous implications.

Reg Howe will likely discuss the new evidence of US government involvement in gold price suppression as well as legal issues surrounding his landmark complaint against the gold shorts in his presentation in Durban. It is sure to be full of startling and disturbing revelations for the African gold community.

James Turk will also be presenting at the GATA African Gold Summit. Mr. Turk is a world-renowned financial market expert and has also consulted for governments and private clients around the world. He publishes the famous Freemarket Gold & Money Report ( ) , a prestigious international financial newsletter, for his clients. Turk has lived and worked around the world and has studied the gold markets in far corners of the globe firsthand. He is also a member of Howe's Discovery Committee to review documentation obtained from the Howe v. BIS et al defendants in the discovery stage of the case.

Turk has recently written some amazing must-read essays on gold detailing his original research and also spring-boarding off other analysts' findings to arrive at startling new conclusions. He wrote "The Smoking Gun" on December 11, an outstanding analysis detailing US ESF involvement in the gold market by analyzing discrepancies in official US Treasury and US Federal Reserve reports on US gold holdings. Just recently, in late April, Turk published another essay that has far-reaching and enormous implications.

In "Behind Closed Doors", Turk further analyzes the revelation that Reg Howe discovered in the Federal Reserve official meeting minutes on ESF involvement in the gold market. Turk analyzes that development, explains what the development means, but also integrates some other analytical work to arrive at a stunning conclusion.

Michael Bolser, another outstanding gold market analyst on Reg Howe's Discovery Committee with Turk, had been looking through official US Treasury records on United States gold inventory levels. Bolser noticed that in September 2000 one of the primary US physical gold reserve storage points, the US Mint in West Point, New York, had mysteriously switched the status of 1700 tonnes of gold ( over 20% of the entire US gold reserves ) from "Gold Bullion Reserve" to "Custodial Gold Bullion". Now, as everyone knows, to be a "custodian" over something means that you do not own it, but are maintaining it for its true owner. Even more ominous, there was no change in the "Gold Bullion Reserve" status at all the other US mints. Something odd was obviously up. Bolser wrote the US Treasury to seek clarification on the cryptic status change of 1700 tonnes of gold, but received no reply.

Turk, in "Behind Closed Doors", builds on Bolser's research and adds his own explorations of Federal Reserve records to come to the incredible conclusion that the ESF has covertly encumbered over 20% of the American citizens' public gold bullion. This is far beyond scandalous as any changes in US gold reserves require US Congressional approval, which has definitely not been granted.

Turk drilled down even further and makes the case that a gold swap of 1700 tonnes may have been executed with the German central bank, the Bundesbank. This would enable the US ESF to stealthily dump physical gold into the crucial European physical gold market directly from Germany without transporting the gold physically from the US, which would cause all sorts of alarm bells to ring in political, economic, geopolitical, and financial circles. Turk makes the case that the Bundesbank now owns 1700 tonnes of formerly US gold on US soil and that the Bundesbank's gold vaults themselves are at least half empty and may even be completely gutted. The potential fallout from this allegation, if proven true, will be mind-boggling in both America and Germany.

Like Murphy, Turk has an extensive network of professional gold contacts around the world and his presentation at Durban is sure to be amazing.

We have not even mentioned all the speakers at the GATA African Gold Summit in this brief synopsis! It will be an extraordinary event in modern gold history.

This critical battle in the gold info-war that will be fought on the African front in Durban on May 10, 2001 could prove to be a decisive turning point in the war. African governments and African gold producers will learn firsthand what the pro-gold forces have uncovered and exactly how the anti-gold forces have destroyed the gold-mining industry and the economies of the African nations that depend on their abundant blessings of natural resource wealth. Formerly highly secretive events of the gold world will be laid naked for the Africans to see what has transpired.

Unlike the average private contrarian gold investor, these African countries, mining companies, and labor interests, along with the media, ARE in a position where they can make an immediate, tangible difference and turn the tides in the raging gold info-war.

The African governments present at the conference can immediately begin ending the great anti-gold game by publicly and forcefully questioning the US and British governments about their trading activities in the gold market. Tough questions need to be asked. The US Congress, for instance, has been very supportive of the post-apartheid

SteveHQuestion#5322405/08/01; 02:09:19

What do chartists or technicians call the last inch of gold chart above, you know, where it forms a bowl? This chart formation looks encouraging, no??
NetkingSteveH#5322505/08/01; 04:08:07

SteveH (53224)
It looks positive for sure Steve, I am more impressed though by the double bottom....from which we are now gaining altitude. Normally from DB's you can expect a move of 200% of the previous range of reference, I'm sure that wouldn't disturb too many in these here woods!

Randy (@ The Tower)Cry me a river, will ya?#5322605/08/01; 06:17:00

During this current comment period, the Bond Market Association has now officially voiced its displeasure with the new capital accords proposed by the Basel Committee on Banking Supervision.

While the proposed new formulas call for banks to set aside greater amounts of capital for loans that are riskier, the Association stomps its feet with the objection that such prudence might lead to reductions in liquidity in the debt market.

Carl HClinton still involved in manipulation?#5322705/08/01; 07:42:26

I have noted over the past few weeks that Clinton has made a trip to South Africa and now is making one to China.

Keep in mind that South Africa produces about 25% of the world's annual gold production. If the South African government were to take a stand against the Cabal, they could probably break the Cabal.

Also keep in mind that China as been dishoarding large amounts of silver. A process that the silver shorts hope continues.

Either he and the Bush administration are in Kahoots, or he wants to keep the game going long enough to have the whole mess be blamed on Bush. That would open the door for President Hillary in 2004. (A scary thought for sure!) I wonder what he had to promise the South Africans and the Chinese in 2004 to get their cooperation?

Randy (@ The Tower)These recent comments by ECB chief economist Otmar Issing may be enlightening to you#5322805/08/01; 08:15:01

He begins, "The appropriate conduct of monetary policy in an imperfectly known world is by definition a standing challenge for any central bank at any time. It is always difficult to draw a correct picture of the world from sometimes ambiguous and contradicting raw data. And it is hard to devise an appropriate response to new developments that is both free of prejudice, open to new developments, and at the same time coherently and systematically designed not to compromise the fundamental principles that need to guide the central bank's policy in the medium run."

Hey FOA, in his latter remark we see parallels with your exceptionally crafted bonsai analogy at the Gold Trail.

Specifically relevant to those of us pondering the fate of the dollar, Mr. Issing offers a subtle warning to us while speaking of some of the positives of the euro region. He says, "In contrast to other economic areas, there are also no fundamental imbalances that have been built up over recent years and that may require a correction."

As we continue to say, gold offers a FIRM platform of wealth during "a correction". Get you some.

Buena FeSpinmiester's smokescreen getting thinner and less effective!#5322905/08/01; 08:20:18

What do you (AG)do when - your prodigy "productivity gains" gets whacked......and employments costs rocket away.....and long bonds lack bids.......and hightech darlings have headaches (Dell)......and the Dow feels overbought along with the $......etc. etc.?

You create smoke and dust to upgrade on Cisco etc. etc.

Well.......the smoke is getting thinner and thinner......and is blowing away quicker and quicker....soon all will see and understand that "THE KING HAS NO CLOTHES ON!" Oh how embarrassing........bye bye Dow $ etc etc......hello gold.

Randy (@ The Tower)Poor man's gold#5323005/08/01; 08:40:30

The following conversation may or may not have been overheard between two people in line withing the hallway outside the bustling office of Centennial Precious Metals...

Poor Man: "I have been putting all of my money in silver. I can't afford to buy gold."

Wise Man: "I find that to be an interesting thing you say, for I am myself a poor man. Yet, unlike you, I find that I cannot afford to buy silver because I cannot afford NOT to buy gold!"

(Just then, Michael Kosares appears at the doorway.)

MK: "Come on in, gentlemen, I'm sure we can help you both."

Randy (@ The Tower)The pony express just now dropped off the ECB balance sheet, still hot off the press#5323105/08/01; 09:01:23

A quick review of the Eurosystem's weekly consolidated financial statement for the week ended May 4th reveals that the vast stake in gold assets remains unchanged, valued on the books at 118.464 billion euros.

In contrast, the net position in foreign currency assets has continued its general decline this week, evacuating another 600 million to leave a book value of 265.8 billion euros.

USAGOLDToday's Commentary in Full: Standard & Poor's Says "Accumulate"#5323205/08/01; 09:39:40

Note: Thought I'd post today's report in full as it seems particularly relevant. Enjoy. Those new to USAGOLD should go to the Request Info link at top of page for the information packet reference below.

Also: The British coins are moving quickly. If you have an interest, we advise quick action due to the limited supply. I might add that in the many years we have offered pre-1933 coins we have never before been able to offer these items in a group like this. The BU Veiled Victorians are particularly desirable in that I can't remember before having 150 of them to sell in this state of preservation. Most of you know how quickly these offerings can move off the shelf. I don't expect the BU's to last much longer. We now have about 75 left -- if that. 800-869-5115, if you would like to order by phone. If not, the link above will take to our easy-to-use on-line store.

"Knowing as much as I do about the way central banks all over the
world are printing money like confetti, again to help people pay for
the rising price of oil, I now expect the biggest and longest gold
boom in a century." Adrian van Eck/ Money Forecast Letter

5/8/01 ( . . . Gold drifted
lower in early New York trade after a quiet night
overseas. Comex floor traders report that gold is showing
some signs of life despite the upcoming Bank of England
auction on May 16. "We have nothing but dealer buying
here,'' a COMEX floor broker told Reuters. "With some
fund sell stops at the open adding to the negative feeling,
and I guess with the euro being weaker, we're seeing a
little bit of spec selling,'' he said. ``But it looks like some
physical buying holding the market from falling.''
Reuters goes on to point out that the physical market will
be well-supported through the Indian wedding season
and that "One-month lease rates were steady above 2
percent, with fears of more U.S. interest rate reductions
keeping the forward sales premium narrow, an anathema
to bears. 'With the contangos and interest rates as low as
they are, it takes away a lot of incentive for producer
hedging and even for speculative shorting,' said a bullion
dealer. 'So I guess the bias for the longer term is
probably to the upside, if it stays like this.'''

Those of you who like your buy signals wrapped in a
nice neat package might take note of a recent assessment
of the gold situation by Standard & Poor's. The rating
agency has upgraded gold stocks (and by proxy the hard
metal itself) from "hold" to "accumulate." It cites rising
lease rates combined with lower short term (dollar)
interest rate as decreasing hedging profitability and
cutting the likelihood of gold breaking the August, 1999
low. S&P goes on to say that the fundamentals are
positive on reduced mine output, lacklustre financial
market returns and a continued supply/demand deficit.
Gold is selling at close to $100 below replacement costs
and that will force mine closings.

We would add to this bullish thumbnail sketch the
observations by Standard Bank of London that over the
next five to six years gold production could decline by as
much as 35%. That coupled with the tightened supplies
for both leasing and selling gold on the part of the
world's largest central banks pretty puts a lid on any
increase in the supply. Simultaneously, the World Gold
Council projects demand increases over the same period
of 25% or more.

As we have said repeatedly here, do not wait for these
circumstances to become headline news in your morning
newspapers before you buy. The time to accumulate gold
is while things are quiet. Call us for more information
and some direction as to how might effectively hedge
your investment portfolio.

800-869-5115 (US) ***1-800-294-9462 (Can) ****
0011-800-2761-2761 (Aus) **** 00-800-2760-2760

As for Marie Ballard on gold orders of 10 ounces or less.

On gold orders over 10 ounces ask for George Cooper or
Michael Kosares.

For a starter information packet which includes our
monthly newsletter generally considered one of the best,
if not the best, in the industry, please click here. Yes! We
send out packets to international prospective clientele.

Gold Trail UpdateThe Gold Trail Discussion has been Updated#5323305/08/01; 09:59:55">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
JMBA little pop in the XAU/HUI at the moment.#5323405/08/01; 10:08:52

Any MDG fans out there with a thought regarding the recent correction?
Mr Gresham"Gold is Dead"#5323505/08/01; 10:13:08

Spotting that phrase in the Adam Hamilton re-post; now all we need to see is the Time Magazine cover announcing it. (Not very likely, but we can hope, can't we?)

(Reminiscent of the similarly-spelled "G-d is Dead" Time cover in, what was it -- 1968? which marked the resurgence of US religious enthusiasm, and paralleling the "Death of Equities" Business Week cover in 1979(?) which preceded the SM turnaround.)

TheStrangerAn Important Signpost on Reinflation Road?#5323605/08/01; 11:11:31

Opponents of the reinflation thesis have maintained that rising wages were not a threat to prices as long as they were offset by "new economy" productivity gains. Perhaps this morning's report, indicating the first decline in U.S. productivity in 6 years (-.1%), will finally silence that argument. Manager's, who have eagerly taken credit for productivity improvements, will now discover just how many of those gains were due to the labor-stretching influences of an overheated economy. Now, as employees run out of things to do, progress in this area will be much harder to come by.

Meanwhile, wages are rising at a 5% clip. Add this to dramatically higher energy prices, and you wonder how much longer Wall Street can go on denying the obvious. One thing is for sure: There is a sudden sea-change approaching in how people perceive the threat of inflation, and, when that change occurs, the consequences to investors ought to be thunderous.

Buena FeTrail Guide & Freedom#5323705/08/01; 11:22:00

Hear Hear.... Mr. Speaker......Our esteemed colleague has plainly dissertained (?) (along with the help of his associates) the most basic/fundamental economic rights of all men under God (thats all of us by the way)......freedom to choose your savings/wealth/trade instruments! Now...Mr. Speaker will you please inform Mr.AG that his resistance is useless........and lets not have that pity-party either.......just get on with the inevitable....."FREEGOLD!"

I'm a little PMS'd today (Pre-Momentum-Syndrome), if you haven't noticed.

NetkingCarl H - Ag#5323805/08/01; 12:58:22

Carl H (53227)
You write;"...Also keep in mind that China as been dishoarding large amounts of silver. A process that the silver shorts hope continues..."

Carl, can you give us some proof of this, or any numbers to back this up. If it was happening where is it going & how are they getting it there if it was?
regards Netking

Old YellerWords of wisdom from the Munkey#5323905/08/01; 13:26:53

Wow,talk about spin.This guy appears to have mastered the Clintonian hyperbolic decepto-speak.
NetkingEP3 - Part XVIII#5324005/08/01; 13:29:10

China Won't Let US Plane Leave Island

"Chinese officials said Tuesday they won't permit the United States to remove its surveillance plane from an airbase on Hainan Island, noting that Beijing had told Washington that several times in the past."

- Mmmm, Eureka! now I know maybe too much Silver in the back for take off huh? <smile>

Randy (@ The Tower)Shaking with laughter#5324105/08/01; 13:43:21

HEADLINE: Munk comes to defense of Barrick's gold hedging

TORONTO, May 8 (Reuters) - Barrick Gold Corp.'s (Toronto:ABX.TO - news) chairman came to the defense of his company's controversial hedging program on Tuesday arguing it helps, not hurts, the price of gold. "Hedging, the way Barrick does it, not only does no harm to a gold price over any period of time, but it actually assists in the evolution of a healthy gold price," he told shareholders at the company's annual meeting.
Munk argues that in a period of depressed gold prices, unhedged companies are still forced to release gold into the market to make money, continually knocking down the price of gold.
"The fact that you never have to offer gold on the down tick, but only can move on the uptick, is a significant assistance to gold price evolution. Our hedging programs and the way we do it in fact assist the gold price evolution."

He was later heard to say, "The forest, dammit, I can't see the forest! Would somebody please get these trees outta the way, they're blocking my view!"

Keep selling that paper into the upticks, partner, 'cause my friends and I here in The Tower will keep taking the metal provided cheaply until, by default, this creature of your "gold price evolution" loses its legs.

ChrusosWorld Gold Council Derivatives Study#5324205/08/01; 14:54:38

Boy have just finished reading the above by 3 eminent professors with a steering committee of more who are all experienced in the derivatives commodities market.

A very clear and well-expressed overview using the best academic gift for making difficult things simple.

Its more scary than anything I have read as they predicate everything on business between gentlemen in an absolutely secure and comfortable market managed by the world central banks and the largest commercial global banks. Everybody wins in well thought out derivative strategies that manage the endless liquidity of the gold market. What could be safer than that??

The whole edifice is based on gold loans with duration of 3 months. There is very little reference to physical except the foolish benighted heathen who wear it around their necks as they, poor fellows, do not have access to stable currencies that will go on forever.

This exposed the systemic risk to me better than anything I have read and also demystified in simple terms a lot that I had not fully understood - delta hedging etc. Confession - I used to dabble in few options now I believe FOA's description of total faliure of the paper market is the only outcome at even the slightest strain

Let's go and join the financial engineers, er I mean gold miners, for a relaxed drink at the club


AELNetking#5324305/08/01; 15:32:45

Netking (5/8/01; 00:40:38MT - msg#: 53221)"Some regional/national disparity in the POS for sure, something for the arb's to take advantage of yes, eg I picked up some
more bars over the last week at the converted USD rate of $3.97/ that will NOT last!"

...........whew! where do you live?

EconoclastSo much knowledge and effort to digest!#5324405/08/01; 15:38:46

Trail Guide--
Like an eager student I await your comments.
Thanks for the link. It is a great and exciting read so far. The chart that shows the real price of gold in 1900 dollars is very interesting to me (I'm on pg 17 or so). Sends my mind in all kinds of directions.

Carl HNetking: Re: Chinese Dishoarding of Silver#5324505/08/01; 15:50:16

See the GFMS Silver Survey 2000. They have a discussion of it. I have seen numbers in the 50-60MOz/year range somewhere, I think it was in the Silver Survey.
JMBclick on: Pictures of a Stock Market Mania#5324605/08/01; 18:54:12

This is a very good article, imo.
Canuck@ Randy#5324705/08/01; 19:05:02

From yours earlier:

"A quick review of the Eurosystem's weekly consolidated financial statement for the week ended May 4th reveals that the vast stake in gold assets remains unchanged, valued on the books at 118.464 billion euros.

In contrast, the net position in foreign currency assets has continued its general decline this week, evacuating another 600 million to leave a book value of 265.8 billion euros."

Two quick questions if you have time.

Have the gold assets remained unchanged because they value the gold as same and/or quantity of gold has not changed?

Is the gold reserve now 31% of reserve? (118/118+265) I thought gold reserve was 15%?


Randy (@ The Tower)This past Gilded Opinion piece by John Hathaway is relevant to recent discussion#5324805/08/01; 19:11:15


"The gold derivatives pyramid is a vigorous free market creature. It cannot be put down with a simple declaration that the paper is no longer redeemable in gold, as governments did with currency. It is a short selling scheme that has become a trap from which few short sellers will escape. Paper claims in the form of derivatives far exceed the underlying physical metal on which they are based. The trust, which balances this new pyramid, is based on false assumptions and lack of information. Paper gold claims have proliferated at a pace rivaling any government printing press. A surfeit of paper gold has driven down the price of the physical on which it is based....Expect the resolution to be swift, furious, and uncomfortable for those caught short."

(click link for more)

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Randy (@ The Tower)Canuck and the ECB#5325005/08/01; 20:07:49

I've noticed that this issue has been the source of considerable confusion in the past. I think the simple explanation is that people are not making the necessary distinction between the European Central Bank (ECB) and the EuroSYSTEM (the financial consolidation of the 12 euro-member national central banks along with the ECB).

When nations commit to joining the currency union, they contribute share capital to the ECB in proportion to the relative size of the national economies within the currency union. This also determines the voting weight of the members in the Governing Council of the ECB. The 15% that is commonly referred to relates directly to this share capital which nations subscribe to the ECB. Simply put, 15% of the original capital provided must be in the form of gold.

In other words, the capital of the ECB individually amounts to 767 tonnes. This is from the original 747 tonnes provided by the original 11 members (representing 15% of the approximately 50 billion euro reserve capital pledged to the ECB) plus the 20 tonnes provided this past January by Greece (representing 15% of the total share capital required of that nation).

Barring any portfolio adjustments by the ECB, there is no certainty that the gold proportion of its reserve assets will stay at 15%. Without any change to the weight of gold sitting in the vault, the proportions may change from the orignal values based on quarterly mark-to-market revaluations of the gold and the foreign paper held. For example, if the paper falls in value, the gold proportion would rise above 15% without any addition to the quantity of metal held. Beginning last summer, the ECB announced that it would no longer retain as reserves the interest earnings on its proportion of foreign paper assets.

And on that note, as we see from the weekly consolidated reports, the Eurosystem as a whole has actually been dishording its principle holdings of foreign paper assets at a rate of nearly 500 million euros per week. By contrast, under the terms of the Washington Agreement, these same Eurosystem nations are "dishoarding" gold at a meager average rate of 15 million euros per week over the 5 year term. (Specifically, 390 tonnes from the Dutch and Austrians).

The 30% figure is simply the proportion we find when we look at the current CONSOLIDATED reserves of the 12-nation member Eurosystem. As the numbers above would lead you to believe, the proportion of reserves in the form of gold is growing.

Hopefully, that largely answers your question, "Have the gold assets remained unchanged because they value the gold as same and/or quantity of gold has not changed?"

But to cover all the bases, we know that there remains under the WA terms latitude for the signatories to continue a degree of pre-existing leasing operations. And as such, the consolidated financial statement reflects "Gold and Gold Receivables". So it is fair to say that the the quantity of clear title gold may indeed vary from week to week within the Eurosystem, though without being reflected as a change in value to the asset. And while lawful, I find the practice somewhat distasteful because a paper claim simply should not be held at a value on par with the quantity of metal for which it is a claim. There should be some degree of discounting due to the counterparty risk. But there you have it.

Galearis@ Tree in the Forest#5325105/08/01; 20:19:06

silver scarcity

Well, I had to go to Toronto today and am once more reminded of how wonderful it is not to live there (smile).
The 401, which is a deadly place at the best of times is unspeakable when raining. Whewwww.

Believe me, driving to Toronto and in it gets me down more than the spot market. (smile)

Wonderful news! One can still get sterling spoons in collectible shops for $5CAN. I bought 4 teaspoons out side of the city today.(Big Chershire cat grin).

But seriously, there is a great shortage of AFFORDABLE scrap and junk silver now. However, the availability of collectible sterling ware is fine - it just keeps rising in price - even though I have NEVER found a collectibles dealer in ware who follows the spot market. This is inflation driven IMO. However, according to dealers there is not very much coming out of private homes to these outlets (again the average person does not follow the spot market)which in turn implies that the public is either holding or they do not have much. Whatever the reason those collectibles dealers who want to buy are not seeing it offered.

That says SHORTAGE.
And it will likely stay that way until metal value goes through a fifteen fold increase to take it beyond retail buy cost. This will eventually bring out the sterling scrap, but that will take time.

This summer when I am cruising through Cobalt I'll drop into the Agnico refinery located there. Perhaps I can get some statement from them as to their supplies. And this brings to mind a statement from a local I met there last summer who said that their main supply now (then) was reprocessing exposed film. But that could have been due to a contractual thingy.


Tree in the ForestRandy#5325205/08/01; 20:36:01

Thank you for that excellent Hathaway link. Quite prescient actually, in view of the fact that he wrote it in August 1999 before the WA. Here's what he had to say about Ashanti:

"The recent market value of Ashanti's hedge book was $290mm,
using conservative assumptions. What is interesting is that this major corporate asset would be worth nothing if gold traded at $325. At $350, the company would begin to face margin calls. These numbers assume the company takes no action in a rising market.
Management would of course defend the hedge book by buying calls with a higher strike price, close out profitable positions, and other assorted maneuvers. The company is quick to point out that their hedge book would not withstand a spike in the gold price very well. The value of the book could not be realized in a compressed time frame. If the gold price did rally sharply, it is assumed it would settle back after the spike to allow the company to realize
the hedge book profits. In theory, a run in the gold price could take place, but management sees nothing imminent. The Ashanti hedge book is a bet that the gold market will remain quiescent and trouble free. They are merely "renting" their gold in the ground to enhance realizations. Ashantis sanguine view is not unusual. Few in the industry are prepared for a spike in the gold price, especially one which does not retrace. We expect this to happen, not only because it would inconvenience so many, but because markets that are far out of balance change in a volcanic, not an evolutionary, manner."

Tree in the ForestGalearis#5325305/08/01; 20:50:19

It's great to be able to combine investing in PMs with a hobby. I think working-kirk said he collects PM instruments. I always wanted a silver flute. They do have the best sound.
I was in Toronto many years ago and stayed at Inn on the Park. There's a great five star restaurant there. Maybe someday I will get back. I enjoyed my stay in Toronto! Silver's getting tight no doubt; it's day of reckoning is coming.

Gold Trail UpdateThe Gold Trail Discussion has been Updated#5325405/08/01; 20:54:49">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
megatronSilver notes#5325505/08/01; 21:11:27

Talked to a guy at Engelhard today. Asked to purchase 10oz. bars and got a big hrmmph and a laugh. Was told in no uncertain terms there was none of those being made anymore and could only supply me with 100.oz units. Did not in any way sound like there was lots just laying around. Will call JohnsonMathey tommorow and post reply.
Black BladeGas Prices Jump to New High #5325605/08/01; 21:30:56


CHICAGO (AP) - Summer vacations are just around the corner, and once again soaring gasoline prices are driving some motorists around the bend. U.S. pump prices have hit record highs, topping the $2-a-gallon mark again in Chicago and California and spurring talk of a possible $3 a gallon sometime after the peak driving season begins on Memorial Day.

Black Blade: Supplies may not completely dry up as consumers will be forced to conserve as they continue to lose their jobs and are unable to afford the gas to drive their autos. It won't matter as businesses will be closed due to rolling blackouts and it becomes increasingly difficult to avoid the rolling riots as they risk repeating the gauntlet that was experienced by Reginald Denny the trucker who was beaten into a vegetable on national television by a herd of wild animals in South Central LA. Besides there won't be anywhere to go. Y2K? No, Y2001 in California today. Today there was yet another set of rolling blackouts in California. More expected tomorrow.

Black BladeCalif. Hit by Blackouts Again#5325705/08/01; 21:38:25


LOS ANGELES (Reuters) - California suffered its second consecutive day of statewide blackouts on Tuesday as consumers turned up their power-hungry air conditioners amid scorching temperatures, ignoring pleas for conservation, while officials warned of more of the same on Wednesday.

Black Blade: Yep. You just got to know that these shock-waves will ripple through the fabric of the US economy. It grows more intense each passing day. The cracks are showing as with the current wave of California energy crisis blackouts. Time to surf the shock-waves aboard a golden lifeboat while the Grasshoppers continue to ignore the obvious. "…and they danced, sang, and played all summer…"

Black BladeTask Force To Propose Legislation #5325805/08/01; 21:49:46


WASHINGTON (AP) - President Bush (news - web sites)'s energy task force plans to propose legislation allowing the seizure of private property to accelerate the construction of electrical power lines, three administration officials said Tuesday. The recommendation is contained in the final draft of a broad energy blueprint to be unveiled by President Bush next week, the officials said. The ``eminent domain'' authority allows the government to appropriate private property for public use; the property owners are usually compensated.

Black Blade: George Dubya is proving to be quite the Eunuch isn't he. He has back-peddled on the Clinton executive orders of the "last days," by letting them take effect. He is proving to be something of a Scumbag. But then all politicians are scumbags by the very nature of the type of person who seeks to rule over the lives of others. Now a Stalinist twist of seizing private property. Smooth move! The last time this nation sold its soul for a little security was in the Great Depression when FDR took away a lot of freedom for a few crumbs from his table. It also resulted in the loss of the right to own gold as well. Now an energy crisis of epic proportions threatens that security once again. The more things change - the more they stay the same. Hmmm...

Black BladeCheney Blunt with Blame for Energy Crisis#532595/8/01; 21:56:59


Vice President Dick Cheney (news) is placing the blame for California's energy crisis squarely on the shoulders of Californians. Calling it a simple case of neglect, Cheney says, "What's happened in California, I would argue, is they've taken the route of saying, 'well we can conserve our way out of the problem. All we have to do is conserve. we don't have to produce any more power.' So they haven't built any more electric plants in the last ten years in California and today they've got rolling blackouts, because they don't have enough electricity. They've got rising prices. They've got a whole complex of problems that are caused by relying only on conservation and not doing anything about the supply side of the equation."

Black Blade: "…and they danced, played and .." Ah heck, you get the point. This energy crisis is going critical and it will take out the economy as we know. Gold is a form of portfolio insurance that has been tested throughout all known history, even the Thracians had gold and some of the worlds finest jewelry centuries before the Egyptians. A bit o’ the metal should be stored by all.

Black BladeGas Bills Are Rising Again#532605/8/01; 22:09:46


Natural gas companies say that the price of your gas bills will be going up.

Black Blade: Prices will remain higher from now on as there is a natural gas supply crunch. There are not enough drill rigs, pipelines, and storage. Virtually all new power generation in NG-fired. From now on forward, NG will have to be stored in summer as use has increased logarithmically. NG storage is still far below last years levels and though this summer could be a squeaker, we must face the fact that this winter could be deadly. BTW, a Grasshopper friend of mine called earlier today. He said, "it's not easy being green when you can't charge your electric car." Yeah, he lives in California no less. We are most definitely living in "interesting times."

Black BladeEnergy costs feed the inflation monster#532615/8/01; 22:20:48

Consumers feel immediate pinch of higher oil and gas prices as effects begin to be seen in other sectors of economy


If you've paid a heating bill, filled up your car with gas, bought a steak for your backyard barbeque or stocked up on cigarettes recently, you might feel you've just been fleeced. Join the crowd. While many economists keep telling us inflation is dead, the sharp runup in the price of energy last year is beginning to work through the economy, nudging up prices on everything from air travel to hotel roomes. At the same time, seasonal factors have conspired to push up the price of many consumer staples such as meat and vegetables.

Black Blade: As stated here many times. Only Cheetah and the other jungle animals just don't get it. "Bungle in the Jungle."

Black BladeSOME TIPS ON WHAT TO BUY FOR THE RECESSION by John Crudele#532625/8/01; 22:29:28


There is the possibility that all these rate cuts will panic the inflation-wary bond market - already worried about rising energy costs - and cause borrowing costs to climb. That's already happening. But that anomaly shouldn't continue forever. If the economy remains weak, bond prices should rally. And if all these rate cuts do panic the bond market, gold's the place to be.

Black Blade: Crudele nails it. Portfolio insurance.

Black BladeBlackouts, Power Prices Cost California Productivity (Update1)#532635/8/01; 22:38:39


Summer electricity prices in the U.S. will be 5 percent higher than last year, the government said. A study last month from the Bay Area Economic Forum, a government- and business- backed research group, said the costs ripple through the economy.

Black Blade: Sorry but I just had to post a link to this article. Blackouts are just an inconvenience? Better think again.

Golden Truth TO BLACKBLADE!#532645/8/01; 23:02:52

You know the more I read your stuff the more addicted I become. Your Grasshopers eating all that energy stuff just SLAYS me, what a riot,,, I love your stuff, and it's real world and real time to boot!

[You are] definitely not a "one horse two cow outfit"!

Thanks for all [your] unselfish time, you put in here, it is not in VAIN!!! It is much appreciated, by thousands of other readers here at the Golden forum.

Thanks again Black Blade, you are awesome!!!!!!!!

Golden Truth.....

Black BladeGolden Truth#532655/8/01; 23:39:43

Why thank you very much. I just try to bring the "Big Picture" into a littler better focus. I am posting a bit earlier than usual as I must contend with an increased workload supplying NG to hungry plagues of locusts (Grasshoppers). We are fast approaching the end game as the energy crisis is the key to the economy and try as they might at the BLS with phoney baloney statistical filters, there is real inflation. Every postwar recession has been preceded by an energy crisis. This one is shaping up as one that dwarfs all those of the past. It encompasses all energy for one reason or another, and not just oil and gasoline as in time past. Portfolio insurance (gold) is more critical than ever, and the big players are quietly accumulating. They aren't doing this because they just like the color and feel. To them the color of money is green, So ask yourself, why are they doing this? When you (and everyone else) know - then - Check Mate! Game over. Golden Dreams!

Black Blade

Old YellerAnother one bites the dust#532665/9/01; 00:15:33

So the productivity miracle is looking a little rough around the edges,is it?

It's going to be interesting to see how they spin this one.Will it be a short term aberation or perhaps something new'specially designed for this little dilemma.

How long are foreign creditors going to buy into this?

Black BladeMunk comes to defense of Barrick's gold hedging (Defending the Undefendable)#532675/9/01; 00:32:35


TORONTO, May 8 (Reuters) - Barrick Gold Corp.'s (Toronto:ABX.TO) chairman came to the defense of his company's controversial hedging program on Tuesday arguing it helps, not hurts, the price of gold. "Hedging the way Barrick does it, not only does no harm to a gold price over any period of time, but it actually assists in the evolution of a healthy gold price,'' he told shareholders at the company's annual meeting.

Black Blade: Somehow when I read this statement from the Chunky Munky I think of that sone from Pink Floyd's Dark Side of the Moon, now what was it called? - Oh yeah, "Brain Damage." Who does he think he's kidding? I'm sure that Barrick shareholders are thrilled at the great return on equity for holding Barrick shares. Oh to be a fly on the wall during one of Barrick's Board meetings.

Board Meeting at Barrick Headquarters:

Munky: Well we did not do so well this quarter. What do we do? Randall, what do you suggest?

Oliphant (rhymes with elephant): How about increasing management bonuses?

Munky: Splendid idea! The shareholders won't care, they hold our shares don't they? What a bunch of losers.

Oilphant (rhymes with elephant): Yeah, maybe they're brain dead. OK then, that's all for this quarters board meeting, Oh yeah, hey Peter, I found this old rock song we can play at the annual shareholders meeting, it's called Brain Damage.

Munky: Cool, maybe I'll also give a really lame speech about how selling forward many years of gold production is good for the gold price. After all, they buy Barrick Gold's shares, right?

Netking@AEL#532685/9/01; 01:08:56

I bought them in a Western country outside of the USA, from a large local dealer who focuses on Silverware & PM's.
Cheers Netking

Netking@Carl H - GFMS "Propoganda"#532695/9/01; 01:18:41

Carl H(53245) - Regarding GFMS Silver Figures
For sure silver is coming from sources we can't
indentify, but from leasing. Whether it is from The Central Banks of the Phillipenes, or China(although unlikely) is immaterial. This is a source that is highly uneconomic and unsustainable. But take a look for substantiation on the China flows, and you won't see squat. These China stories are made up by GFMS, and I challenge them to verify their statements. It's always, they know privately, but can't
back it up publicly. It's pure rubbish, just like their inventory figures.
To think the Silver Association publishes GFMS's work as fact,is a disgrace. If they can't back up what they claim to be is true, just assume what they're saying is garbage, and you'll be safe. Cheers Netking

Randy (@ The Tower)Packing FOA into a powerful little nutshell for those of little patience...#532705/9/01; 02:40:20

From the latest trek on the Gold Trail...
FOA (05/08/01; 20:54:48MT - msg#71)
One of the major problems faced by past hard money planers was that any time real wealth, gold, is denominated as credit money, it always placed the relationship between the rule of law and the rule of gold at odds. If our laws defined gold as official money, and lent it, then by association the law had to define a portion of gold that did not exist in circulation.

To deal in the future,,,,, to borrow,,,,, to capitalize would require the use of a fiat function. Gold could / would be a final trade; I'll give you ten cars (or gold) for your house,,, deal done. If I want more time to pay, I and we must engage a fiat loan.

Installing a trading medium outside lawful money that acts as a wealth savings and a final trade will not destroy the bankers, governments or paper credit inflation. But, it will allow society a way to judge political efficiency. A nation's productivity will then have two scales to measure with, one it must live with (final payment) and another it cannot live without (future payment).

Trail Guide, my friend, I do believe the message will get through to some people if only they allow themselves the time to ruminate carefully on your comments above. One never knows what combination of words will prove most salient to various people, and thus we offer many variations on the theme to be conveyed. That said, I think you've struck upon the shortest combination offering the strongest impact.

While we have a great many proponents calling for something called "hard money", it should be getting ever clearer in their perceptions that even the "hardest" of monies quickly become quite ethereal upon the moment of being borrowed. Hence my well-worn refrain, "(fiat) currency is for borrowing and spending, while gold is for saving". And as you aptly point out, should the person choose to offer "payment in full" rather than "payment on the installment plan", then just as is the case today, that person can choose to liquidate an adequate portion of their true savings rather than choosing to finance the purchase with future earnings.

And as the many participants in the cycling economy play their inflationary tunes with elastic fiat currencies, the dwindling failures of the currencies won't drag down the value of real wealth items such as gold held in savings. This is a refreshing departure from the path often seen and suffered with "hard money" gold currency throughout history. It is only when gold becomes detached from the currency after the inevitably debilitating credit expansions that it reclaims a level of its wholely-owned wealth value.

And lest we forget, as of 1971 gold has shed its credit attachments to to dollar, but yet suffers in obscured value from inflated credit attachments to a realm of gold derivatives. But as you know so well, this too shall pass. We purchase gold today in preparation for that event -- a final derivative default that leaves the derivatives utterly worthless without even a "currency function" such as the defaulted gold-dollar was at least able to cling to.

YukonFOIA Request..."and the cradle will rock!"#532715/9/01; 03:11:18

Good Morning to all!

Thought we could all do our part in support of GATA and Mr. Turks' findings in discovering the rationale and details of the new classification of gold at the U.S. Mint's West Point facility in New York. With events moving forward in the GATA/Howe lawsuit, it certainly would help the POG if it were known that a swap with the Bundesbank from U.S. reserves has taken place without Congressional consent (ESF?).

Further, if the U.S. stockpile allocated in Germany has already been sold or lent into the market, then indeed some brows may krinkle in Washington (but I doubt it...maybe when there dental gold will pay off their mortgage). As most who are following gold know by now, the Treasury Dept.s reclassification of gold at West Point is certainly suspicious to say the least. If it is an "innocent reclassification", then so be it. But I think we all owe it to ourselves to hold our government accountable and reveal the facts.

I suggest we all duplicate the efforts to bring our Secretary of the Treasury to a point of full disclosure. Certainly, a letter similar to the link above would go a long way toward stating that We the People are not going away, and we demand a simple explanation to a simple question. Perhaps we really can play an active role in the fate of our ever evolving gold market (that is aside from accumulation at huge discounts).

As President Thomas Jefferson is quoted as saying, "The price of Liberty is eternal vigillance." I could not agree more. Let us bring what we can to this battle in the war against gold. For as we all know, it is truly a war on personal, economic and financial freedom.

May our hearts shine bright as the golden sun, yet shield us from its burn;
May our minds be as scales of Justice with which to judge and further learn;
We hope for peace in all our lives yet beckon to the call; For courage we hold on to our (s)words as we repell the next wave of assault.

To quills, fellow Knights...let us make a stand now on paper, before we are forced to defend our physical with physical!


P.S.: Re: FDR's E/O Consfiscating gold in 1933, can anyone show me where in our Constitution Congress has the power to give authority to the President to enact an Executive Order that has jurisdiction over the people of the fifty states?

Also: Can anyone tell me where in our Constitution it is stated that Congress can re-delegate a power to a private group that we have delegated to them?

More later. Thanks to all for many great lessons.

CanuckI see said the blind man#532725/9/01; 04:42:57

I had a heck of a time falling off to sleep last night envisioning the world in another decade.

With the 'boomers' turning the corner into retirement and into old age how are we going to pay for them. Retirement and health costs will be enormus.

As the population increases, if in fact it does, and with fewer energy resources how are we going to 'divi up' less for more?

I can see the governments desparate ploy now. With huge debts the cost to 'carry' an ageing population into retirement will be the final spike in the bankruptcy coffin. If the government can manipulate the stock markets rise to fulfil two goals, that is to lower debt and secure self-sustaining funds for the 'old folks', perhaps they can wiggle out of this bankruptcy mess.

We know (and maybe they know) that prosperity cannot be bought so what is the end result? A failing of the system, a debt so massive that cascading cross-defaults will swallow everything. I cannot see it any other way.

So what does this mean? It means that I, as an individual, must prepare for the inevitable. I cannot save 'money' for the end-game; paper will have no value, I must save tangible, hard, physical assets that possess value. These items must have strength in good times and bad, honor in ancient and future time and represent wealth for which I can carry with me.

When people begin to understand that governments will fail to protect them from harm and wealth evaporation, one by one they will seek self-protection as described above. They will leave the govenment 'nest' and move out on their own.

This will happen slowly, as each realizes the self perpetrating fiat bubble will not solve future problems, the enactment we are witnessing is a 'band-aid' that will fall off and we left on our own.

I have begun, and only begun to wean myself from fiat destruction and only require the patience to self-administer my 'plan' for wealth preservation. I am beginning to understand that this may take years, I am beginning to live with this. In the interim I will accumulate hard assets so when, not if, governments self-destruct I will not be reliant on them in any way, shape or form.


CanuckBB#532735/9/01; 04:49:27

Your 53265 hits the nail on the head.

Excellent summation.

ausomePOG spike#532745/9/01; 06:32:17

Can't sem to get the kitco site up, seems to be down. GE has POG up $2. Any thoughts as to what the GATA camp are thinking as they prepare? Is this the beginning of the end game. Go GATA go gold.
ausome(No Subject)#532755/9/01; 06:39:02

POG up $4 at GE. Still cant reach Kitco.
WAC (Wide Awake Club)(No Subject)#532765/9/01; 06:48:13

Here is an article from Business section of Evening Standard.

Boost for Fed in gold fight

by Lauren Chambliss in Washington

AMERICAN investment banks and government officials are hoping for a speedy end to a trial that accuses them of manipulating the gold market, following a report from the London Business School. The report has refuted the idea
that US officials and Wall Street bankers have conspired to keep down the price of gold.

As the gold price slumped in the past several years, conspiracy theories have risen in inverse proportion. The most popular is that US and European governments have manipulated the market to keep the price down for the
benefit of the wealthier gold-holding nations, at the expense of the poorer gold-producing nations.

Late last year, a group of gold investors backed by the Gold Anti-Trust Action Committee filed suit in the District Court in Boston against Federal Reserve and Treasury officials and five top investment banks, including
Goldman Sachs, Citigroup, JP Morgan and Chase Manhattan.

The suit alleges US government, the Bank for International Settlements and big investment banks 'co-ordi-nated the sale and leasing of gold and the sale of gold derivatives' to keep the price low as part of a long-term strategy to stem institutional losses, prop up the dollar and minimise
inflation in the US and Europe.

Associate Professor Anthony Neuberger of the London Business School, however, reviewed gold market data over the past decade and found no unusual activity that would point to market manipulation.

The report debunking the conspiracy theory coincides with a high-profile gathering of gold industry leaders in Durban, South Africa, this week at which members of the Texas-based Gold Anti-Trust Action Committee say they will reveal new evidence to support their allegation the Federal Reserve
and US Treasury have intervened in the gold market.

GATA chairman Bill Murphy has been quoted as saying he thinks the gold market manipulation will 'turn out to be one of the biggest financial scandals in US history'.

Its suit charges that several major investment houses have appeared as heavy sellers of gold on the New York Commodities Exchange whenever necessary to kill any significant rally.

Whether the case goes to trial will depend on a judge agreeing there is enough initial evidence to warrant a trial. A motion to dismiss the suit has been filed by Lawrence Summers, Alan Greenspan and other current and
former government officials named as defendants. Summers was Treasury Secretary when the suit was filed late last year. The Department of Justice's memorandum asking the court to dismiss the case reasserts the US Treasury's claim it has not traded in gold or gold derivatives since 1978.

'The GATA people are out of their minds and the London Business School
report shows it,' said a spokesperson for a major US investment bank, who
asked not to be named. 'A conspiracy between the German Bundesbank, the
BIS, the Treasury, the Fed, and Five big Wall Street banks? Come on. We
hope for a speedy dismissal.'

© Associated Newspapers Ltd., 09 May 2001
Terms and Conditions
This Is London

Chris PowellLondon Evening Standard reports putdown of GATA#532775/9/01; 06:58:49

The other side is starting to have to
take note of us.

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Chris PowellKitco confirms gold price up $3.80 at 9:09a ET#532785/9/01; 07:08:31

I'd like to think that it's the Durban

Gold Trail UpdateThe Gold Trail Discussion has been Updated#532795/9/01; 07:20:23">The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
Mr GreshamCanuck#532805/9/01; 08:34:21

Randy said: "One never knows what combination of words will prove most salient to various people, and thus we offer many variations on the theme to be conveyed. "

Your "combination of words" today was an eloquent statement of our whole reason for being here...

Lease rates flat at 2%, XAU up, POGster spiking...Are we heading for a three-fer day?

(Oops, getting a Cole Porter moment: "...POGster's spiking, and the lease rates are high...")

Carl HNetking: GFMS Silver Survey#532815/9/01; 09:00:18

We would all like to have verifiable data on gold and silver. If you can point to better data, I'm sure everyone would be very grateful. Given how opaque these markets are, I doubt that better data exists in the public domain.

Yes, unfortunately the Silver Survey is forced to resort to private sources for some of their claims. I would say that this is common practice for industry organizations that deal with sensitive information. I accept this and evaluate their claims accordingly.

Now, let's examine the claims about China dishoarding Silver by asking a number of questions:

First, do they have anything to back their claim at all? On p40 they state "Of the officially recorded imports into Hong Kong in 1999 over 70% came from China". I would take this to mean that they at least have a lower bound on the silver exports from the public record.

Second, is it possible for the Chinese to have enough silver to export? Prior to 1935, China was on a silver standard. This could give them a significant supply of confiscated coin as a possible source. Additionally, they do have significant silver mining capacity. I would say from this that it is quite reasonable to assume that the Chinese have enough to dishoard the amounts indcated on p31 of the Silver Survey.

Third, can we postulate any good reason why China would dishoard silver? Simple, to gain entry into the WTO and get permanent MFN status. These seem like good motivations to me.

Finally, I'll make a bit of a leap and guess that Clinton's current vist to China have something to do with Silver...(Probably trading Taiwan for 100MOz of silver ;-)

Buena FeU.S. Economy: Treasury Wants a New Measure of Trade #532825/9/01; 09:11:12


``If Japanese owners of dollar assets needed to repatriate those investments, then a drop in the dollar might set off other people to do the same,'' said Robert Solow, a Nobel Prize-winning economist at the Massachusetts Institute of Technology.

Solow and a colleague, Franco Modigliani, wrote an article in the New York Times in April suggesting that the current-account deficit may be ``the greatest potential danger'' facing the U.S. economy in coming years.

Value Added

The article prompted a telephone call from O'Neill, keeper of the Bush administration's strong dollar policy, who wanted to know whether Solow thought he was overlooking dangers of the trade deficit. A strong dollar makes U.S. exports less competitive, and imports cheaper.

``We thought the issue hadn't been getting enough policy attention,'' Solow said in an interview.

The U.S. could try to lower the value of the dollar, making U.S. products cheaper and imports more expensive. Or it could erect additional barriers to trade and investment.

So far, O'Neill and other Bush administration officials aren't changing dollar policy, and continue to press for greater liberalization of trade laws. The debate over the current account ``comes out of a thought process and a set of conventions about how we think about our economy and the world economy that I think are wrong,'' O'Neill said.

Buena FeNOTE#532835/9/01; 09:12:44

AELnetking#532845/9/01; 09:14:11

Netking #53268
Yes, I assumed as much. Actually I meant literally
"where do you live". I am to the west of Detroit.
Would be nice sometime to chat in the flesh with
fellow silverbug, if there is more than 2 of us in
the same timezone. ;-)

Buena FeMy Policy vs US Policy ( I can vote without leaving a hanging chad!)#532855/9/01; 09:16:22

Forget the US Admin's dollar policy.........I have my own $ policy.........convert it to da shinny ASAP.
Mr GreshamFOA#532865/9/01; 09:17:47

I haven't been much of a gold standard thinker, so the relation of gold and legal tender laws doesn't go very far back into my very recent learnings about "money". (Two years ago I couldn't have told you how the Fed and banks make fractional reserve fiat.)

(Despite my handle, which drawing upon my namesake would tell me that, even under a "gold as legal tender" regime, fiat might drive gold back into hiding. Maybe FOA is telling us that, overall concerning human nature over the millennia, gold is ALWAYS somewhat (and very realistically) "in hiding", and that any effort to create systems of "public trustworthiness" concerning gold are, well, worth only the paper they're printed on?)

FOA: "...forbid the enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade..." How likely is such legislation, or is it in the cards already? Yes, it seems that in our debtor-sympathetic world (behind which many BIG institutions are hiding even now), it would be easier to put through a law letting them off the hook, rather than protecting creditors. So wealth-holders would be doubly leery of lending their gold. But it is just hard right now to imagine ANY laws being put through concerning gold (keeping it off the radar entirely), let alone International laws?

Now, what would be the effect of this on gold's value as a wealth holding? If I know that other gold-holders are less likely to lend theirs, would it initially hold up gold's exchange value for "other things"? I guess so. The borrowers will not be able to sell my gold in the marketplace in order to engage in fiat enterprises; it will be up to me only, to sell it for "final payments." Right?

But borrowing gold would create gold demand at re-payment time, but then re-payments are often rolled over, and meanwhile the Debtor's "good credit standing" is being substituted for the gold as a "wealth holding" in the Creditor's portfolio. ("Inflation") And eventually those "credit standings" deteriorate over time for the masses. Hmmmmm....

Second question: (or is it more of a post- mortem?) "Investors and the industry in total, brought into paper based gold and yet they fully well knew 90% of it had only cash equity as the collateral on the other side."

We as individuals would tend to see our precious savings at risk in such a system, more quickly than a large gold/paper trading institution making its money off a short-term horizon, percentage commission and fees profit picture, running against other institutions doing the same game (and who can resist playing?), with a government/Fed rescue guarantee backing them. Maybe the risk/reward picture works out for them that way?

Was it the institutions, manned by employees not risking their own money, Economics 101-educated (perhaps younger) functionaries just going to work each day collecting paychecks, with no real incentives to probe for the weakness in paper markets, and stand back from them? Believing that they can always reverse a position in an ever-liquid market? (Since Black-Scholes always assumes a liquid market and not a "crowded trade".)

I guess I'm looking for your take on WHO made these mistakes, and why. Because it is hard from our individual perspectives here to imagine that the investment business is run in such an UN-businesslike manner. Aren't these people supposed to be collectively a little bit wiser, more experienced, and more responsible than we, uh, amateurs? Instead, of the extreme opposite, a bunch of wild cowboys and riverboat gamblers. Is it something about the nature of "institutional momentum"?

Or is it, again, a risk/reward calculation that works in these times? "Keep the gold yourself, flush the bank..."

EconoclastWealth outside the credit realm/Viewing the forest from the trail#532875/9/01; 09:24:41

A refreshing hike! I have been shown the shortcomings in my thoughts in a way that demands me to think. I clearly see that gold as wealth must be kept completely outside the credit realm for it to function properly.

"But, it will allow society a way to judge political efficiency"

The thought that is left lingering in my mind is "what would be the motivation for the architects to allow and even encourage the above?" I am searching my "internal hard drive" for some data that may lead to an answer. The EU seems to be a socialistic leaning concern that would not be amused with competition when it is fully grown. Would freegold be a bone thrown to other factions in the world to achieve their alliance? I am fairly certain that an answer would not involve the "best interests of the people".

I am coming to appreciate the true difficulty in seeing the forest through the trees when my own life experience is so short and my thoughts are shaped by experiencing such a small portion of the timeline of our money system.
I have so many more questions, but I will search within for some answers. I will throw out one real quickly though:

Right now, I can buy two bottles of fine first growth futures for about one ounce of gold. Will this ratio still be the same when we have reached our destination?

Thank you.

agbullInvestment help for tech investors#532885/9/01; 09:36:59

Got a kick out of the way this guy wrote the article..
JMBCNBC and GOLD #532895/9/01; 10:01:04

From the floor of the venerable New York Stock exchange we are assurred by Bob Pissanti that "gold isn't going anywhere." From the CNBC spin room we hear Ted David's disclaimer that CNBC is not involved in a conspiracy against gold. So far so good. I can handle that. Hey, confirming anecdotal evidence that gold is certainly not over bought. I like it.

But then comes Joe "How Does My Hair Look" Kernan. This guy, this M.I.T. asshole really frosts me. (Sorry, but he doesn't deserve to be called an "anus".)

It's true that many of us have purchased gold at higher levels. In '97 I started buying at $350 or so. The lower it dropped, the more I bought. Thanks to the generous members of this forum, I not only have a fairly good understanding of economics and what will certainly take place with the purchasing power of the U. S. Dollar in the not too distant future but I also have a descent "stash". I feel very confident that I'm on the right side of the gold market and so should you.

The "Hair Hat" on CNBC with a degree from M.I.T. is one dumb, arrogant, inconsiderate prick. He really thinks it's funny that people have lost money in the gold market. What a sad little man.

Please excuse the cussing....I was pissed!

USAGOLDToday's Report: Centaur Collapse Behind Gold Move?#532905/9/01; 10:01:14

5/9/01 ( . .
. Gold surged in early New York
trade pushed higher by a
combination of fund buying and
consistent support from physical
buyers on dips. There is also some
speculation in the gold market
this morning that the quick move
to the upside might be the result
of Australia's Centaur Mining
Company's collapse. . . . . . .

To read the complete story,
please join us at our private
page. A quick, one-time
registration is required. Please go to link above

Old YellerEast Asia's official gold holdings#532915/9/01; 10:01:46

To me,this is one of the bigger riddles of the FX/gold reserve debate.Given the devastating currency collapses experienced in the region in 1997 and 1998,how can they leave themselves so vulnerable to a US dollar collapse?

Is maintaining trade with the US so important that they will risk trading tangible finished goods for dollar commitments of a somewhat questionable nature?Where is the protection for their citizens efforts over this period?

Shake up the pot,boys,$800 billion is a awful lot to put on one rather tired lookin' horse.

Thanks to LionsBreath at kitco for the link.

Gandalf the WhiteMessage from Felix the Cat #532925/9/01; 10:14:19

Forum puts HK in spotlight
china daily
Tuesday May 08, 2001

HONG KONG: Hong Kong is all set for the opening of a global economic forum to be attended by President Jiang Zemin, Thai Prime Minister Thaksin Shinawatra and former US leader Bill Clinton. (<;-) Now we know what he is doing!)

Among those expected to speak at this year's Fortune Global Forum are Vice-Premier Qian Qichen, Minister of the State Development and Planning Commission Zeng Peiyan, Foreign Trade and Economic Co-operation Minister Shi Guangsheng, Minister of Information Industry Wu Jichuan and People's Bank of China Governor Dai Xianglong.

Other forum speakers include Shinawatra and chief executives of Microsoft Corp, Yahoo and Dell Computer group.

Hong Kong SAR Executive Council convener Leung Chun-ying hailed the forum as the perfect opportunity for the city to showcase its strengths and latest developments on a global stage.

"Hosting such a large-scale, star-studded international conference is a very good opportunity for Hong Kong to let international political and business leaders know about the latest developments in Hong Kong nearly four years after the handover," he said.

"I believe this Hong Kong edition of the Forum will be a big success as foreign guests can personally experience Hong Kong's vitality, see its strengths and witness what has been happening," he added.

Up to 3,000 police officers will be deployed around the Hong Kong Convention and Exhibition Centre for the two-day forum to insure security, organizers said.

The forum will kick off at 5:45 pm today in the new wing of the massive convention centre.

SOURCE:china daily-----
Copyright 2001 TOM.COM LIMITED. All rights reserved

schippi Golden Breakout#532935/9/01; 10:31:42

Select Gold Hourly Chart up to Noon.
OROFOA - NO LAW#532945/9/01; 11:40:43

FOA, I have been working on a broad monetary article intended for posting here, hoping to touch on many points you have addressed and many you have not. The discussion of the past few days, has prompted me to break silence now rather than when the article is complete.

My take on Europe and the Euro are that they are desperate attempts to save European governments from competition among each other and the rest of the world, and of their trying to maintain the political hegemony of the small bureaucratic and political elite within Europe. The purpose of the Euro is to trap capital and trade within a political block controlled by this elite. It has nothing to do with any of the following: political subservience to the US, the cost of using the dollar for international trade, the dollar's wobbly past or future, trade efficiencies, free trade or liberty of any sort. It has only to do with political power attempting a last ditch effort of governments of Europe against the forces of globalization and economic and technological progress. And the last stand for Europe's sclerotic government assisted industry, inflexible trade unions, and abominable and costly bureaucracy of Brussels and of the various capitals of Europe. It is a last stand of socialism and the EU power politics elite.

Your last Trail posting is a perfect demonstration of these intentions. The legal provisions you talk of will not destroy or prevent a future gold banking system that might compete with the fiat insanity. It will destroy the countries that sign on to it, which are likely not to include the US and most of Asia unless taken over politically by EU influences (which are not that strong there). The attachment of collateral to gold is innate in the action of trading gold. Without that, there is no trade in gold possible at all. All trade involves the creation of a debt, at least temporarily. The debt may be secured by the items traded, but transactions must involve a debt. Transactions also must involve a contract. Ownership of anything is title, either assumed through possession, or documented. A system that does not allow collateral backing a contract denominated in gold is a system that does not allow gold to trade, and endangers title to gold not in possession. Doubtless, the purpose of such law would be to allow governments to confiscate gold held in custody (not in possession) if the attempts to prevent monetary use of gold fail.

It is another attempt by EU governments to block the exits from a future Europe they imagine they can control. If implemented successfully, it will be Europe that will be destroyed by the absence of an efficient credit system keyed to effective gold denomination of debt. It would mean that the only interest rate available would be the innately incorrect one set by monetary authorities. It is completely impossible for central planners to know what the appropriate interest rate for any money they control could be. The concept of a "better managed" fiat currency is impossible. A fiat currency can not eliminate the presence of a non-economic motivation for its own existence. No depth and thoroughness of study of economics can ever reveal to the would be monetary manager what the markets would do without him and without his currency. His existence alone is enough to eliminate the possibility of efficient trade. Why would anyone trust a monetary system without par to any particular good?

Trade is done good for good for mutual benefit of the traders involved. Money is just the means to transact trade over time and space. 90-95% of trade is transacted over time, with the final good B traded for good A being realized even centuries in the future. Gold has forever been the most efficient medium of such transactions. The value of gold comes primarily from its use as the monetary intermediary for these transactions over time, the longer the time, the greater the need for gold to be the monetary medium. The legal provisions you imply can only have the intention (but not likely the effect) of preventing the use of gold in trade, attempting to eliminate the use of gold for bearing interest. EVERYTHING bears an interest rate. Interest is more fundamental to economics than trade. The interest on money derives from the interest of goods over goods, not the other way round. Interest is embedded in all contracts and in all transactions over time, it is the innate result of there being a future. It is the discount of future goods to present goods. NO MORE and NO LESS. Gold bears an interest by its very nature as a good desired by humans. Its use in trade requires it to bear an explicit contracted interest.

By prohibiting gold from bearing interest you are thinking that people would not suffer from the dilutive effect of gold credit on gold values. The thought is wrong because it does not consider that gold credit is extended and owned only at a market rate – unless governments try to change that rate through central bank intervention or through taxation and regulation. When gold interest rates are set by the markets, they allow market participants to charge an interest rate that they expect will compensate them for possible dilutive effects of credit extension. Therefore, undue credit expansion that actually causes dilutive effects on gold values CAN NOT HAPPEN over any length of time. Gold credit in a free market is a cyclical affair that includes expansion as well as contraction and is caused by the appearance of investment opportunities (their pursuit, and subsequent disappearance), shortages, abundances, and the general need of the markets for a stable monetary unit in the face of unavoidable error in prediction of the future by market participants.

It is governments, and they alone, that can and do manipulate interest rates and credit quantities for purposes at odds with the interest of the bulk of market participants and who cause expanded credit without allowing people to hedge against the dilutive effect. They do this through the imposition of government bodies to regulate and intermediate in the monetary system. They do this in order to gain control of the process of allocating accumulated purchasing power for the expressed purpose of favoring government, and for government officials to sell favors in the market place, where government can now decide to whom purchasing power would flow.

The extent to which governments make use of these tools of power is also the extent they damage the economies of their people. Central planners, whether well intentioned or not (and there is not the slightest reason to suppose that EU central planners, among them the ECB, have any honorable and beneficial intentions other than for themselves), are incapable of producing optimal decisions. They must always reduce billions of decisions into one central one. Inherent to this is that they will be wrong decisions no matter what they are, and far beyond just being wrong, they must be destructive of the interests of most people, and result in reduced or negative real long term growth of the economies they control. In time, the more planned an economy is, the worse its performance.

The future you suggest is worse for the gold holder and the fiat trader both, than the present.

Therefore, your suggested "protocol" can not be but an intellectual musing of derelict monetary boobs such as occupy the higher reaches of central banking and politics, and at church altars and mosque towers. Such laws were last successfully implemented by the complete confiscation of gold. This is FDR all over again. And it is Napoleon all over again. I am again astounded by the blindness you exhibit regarding the nature of money and banking, and can only assume you are fostering the opinion that stands in the obvious middle ground between Islamic tenet and the desires of government bureaucracy. Even Islamic oil royalty will see that the laws envisioned would eliminate the bulk of the trade value of gold they have accumulated (if the law were to succeed in international implementation, which it will not). They would also see that it is just another form of obvious "punishment" for the over-leveraged gold banking system in the political sphere of Europe by canceling their liabilities and enforcing their claims. We have been there before, and we have seen the results. They are destructive of all participants.

I sincerely wish to warn you, FOA and Another, that the relative powers of governments to do what you suggest are gone. Government's desire to "have the pie" has matured to having a claim against part of it. Governments (politicians and bureaucrats) have learned that a declining share of a growing pie is better than complete possession of a disappearing pie. The old industrial "economies of scale" and the huge physical nature of investments of the past are being replaced everywhere with economies of association, of knowledge, design, and innovation. These are devoid of borders and can be moved quickly if not at will outside the reach of governments that wish to grab these new assets of the modern economy. The ability of governments to "farm" the economy started to decline in the late 1960s, it has been declining further and more rapidly with the decline in the steepness of the close by computer power cost curve and the rise of the far end of the computing power curve, which has turned from a gradual function to a near stepwise function. Advantages of size derive from the ability to organize more rapidly than competitors, enemies, and tax avoiders; which depends on the advantageous and quicker access and understanding of greater information volumes. This advantage is maintained by the relative cost of having an order of magnitude higher computing and communications power. That relative cost has been rising by a factor of 4 with every new microprocessor cycle, with the next step up over the current generation investment plans (cost $13 billion per each unit) – tentatively planned for 2008-2010 by leading chip makers – being so costly as to require some 5% of US GDP for each production unit. This cost is completely outside the reach of any one government, and must be shared with the broad free markets internationally, therefore eliminating the last major advantage of organizational size and with it the future of corporatism and the corporate state hierarchies that grew with it. Large corporations are attempting still to enhance and extend the longevity of their franchises, by merging and by adopting a more horizontal peer to peer network like structure that could allow the benefits of further specialization of their staff. But even in the most successful of these, the access to a shared broad pool of highly differentiated globally available expertise - available to all market participants, is badly lacking because of the desire for a proprietary rather than shared expertise that provides competitive advantage. The quick and temporary self-assembly of specialist groups on a per project basis that is possible in a free-wheeling global networked economy, is not at all possible for a company trying to maintain a unique franchise, and well outside the possibility of government control or assistance.

The only means governments will have in order to extort resources from this global talent pool is through maintenance of a monetary and banking system that is both attractive enough in performance to keep these people using it for savings investment and transactions, and available for governments to obtain a share of the income and assets of these people by having the banking and transactions records available. Too high a tax rate, through inflation or through direct taxation would eliminate the use of this system in favor of a parallel unofficial and networked system that would be closed to government awareness as well as government access.

If contractual gold is made impossible, as you suggest is the intention of the Nabobs of central banking and politics, then it will be silver, or platinum, or palladium, or rhodium, or a hidden gold title unit that would fill the shoes of contract gold and overtake some or all of gold's role as a store of wealth, a money for time transactions of trade.

Finally, liquid tradable wealth is a monetary role. Disconnection of gold from official monetary roles can only destroy the fiat moneys and the economies on which they are imposed. Leaving gold without the realm of contracts and debts eliminates its utility as savings and the medium of transactions, because it will eliminate the possibility of enjoying the conduct of all of these in a single unit with only one financial component and one interest rate, putting us in the world of fiat currencies and (a quite impossible) "cash only" gold, leaves no mechanism for fixing the broad range of economic transactions to set quantities of gold (done through financial and trade contracts). Therefore, people will maneuver out of gold and to all alternative metals that provide contract enforcement. This would NOT put gold at $30,000 ($3,000 in current dollar purchasing power) but would put silver at $300 the PGMs at $6,000, Rhodium at $20,000 and gold at $100 (current "real" dollars). Gold may spike high on the way, but as awareness of the approach of your "legal protocol" permeates through the markets, they will move away from gold and towards alternative metals or absorb gold into forms in which it can be contracted.

In order to achieve the desired high and stable gold value there are two choices: an official monetary system that is all gold, or no official money at all. To avoid government temptations to meddle, your international law should disallow governments to have currencies at all, and should disallow government maintenance or guarantee of bank liabilities. The system you suggest will destroy itself, the gold owners of today, and the prospects for Arabians and their progeny. That they would promote this is on par with Palestinian support of Iraq, the loser's choice.

Trail GuideComment#532955/9/01; 12:07:17

ORO, everyone,

I was going to comment more before moving on with some of Another's recent political thoughts. But it looks like I have said enough to warm the fires (grin)!

OK,,, ORO let's talk some on this forum. (smile)

Be back later

OROBuena Fe - O'Neil is right#532965/9/01; 12:53:15

It should be no surprise that nations and states do not trade at all. People trade as individuals and as organizations, such as are corporations.

The involvement of governments in trade is largely dependent on successful capture by its partner banks of the transactional and savings volumes of the population at large. Small governments of small geographies have not managed to do so successfully and have found the least bit of inflation to cause a mass transition from contract and transaction in their currency to alternate contract denominations, be they a price index, dollars, gold, or what have you. As a result of these denominations, contracts and transactions slip outside government's tax nets and increase the deficits that these governments must finance through inflation. Once started, it is difficult to stop, and rarely does the political system remain unchanged after the monetary system hyperinflates.

The wrong portion of the proposition of the trade deficit hawks is that the US government - and thus the nation - owes the dollars to the collectors of trade surpluses. Where that had been the case through the cold war and the period just after, the current credit system is transitioning to private dollar debt of individuals and corporations and a trend towards massive shedding of liabilities of governments including "entitlement" programs, bank liability insurance, and most prominent of which is the attempt of governments to extricate themselves out of debt; particularly of external debt.

Further error is compounded upon the initial one by the supposition that the US economy is responsible for providing all of the dollars purchasing power. The dollar enjoys a substantial premium in its value arising from its historical and current use for trade settlement and denomination of contracts in the world at large. The fact that foreigners owe so many dollars, somewhat more than they are likely to collect for payment, is one of the main reasons the dollar is used today for trade and has been used for trade through the 80s and 90s. It is the performance of the dollar debtors that creates the dollar's value. These debtors include many outside the US who are paying rather higher interest rates for the dollar debts they owe than we do.

The outstanding amounts of dollars owed by debtors outside the US become a heavier burden as they attempt to pay down their debts, since during a period of net foreign dollar debt declines the independent supply of the foreign dollar market to itself falls dramatically, thus forcing the foreign dollar debtor to come to the US for his dollar revenue, from which he will extract the dollar cash flow that will pay down his debt. Because of this, Americans will be provided with lower prices for imports, and foreign dollar debtors will find their credit ratings down and their interest rates up.

The dollar trade deficit would grow so long as foreign dollar interest rates rise and import prices into the US from countries where the dollar debtors are concentrated continue to fall. The US trade deficit is more the result of a pull from abroad than a push from the US. It is a result of dollar lending to Asian entrepreneurs of 1.2 trillion dollars (bank lending alone) by 1998, 1 tillion since 1984 (including the interest accrued and not yet paid, the sum is about 1.5 trillion at the 98 peak.

The purchasing power of the dollar is largely a result of the fact that the foreign dollar debt bears an interest rate double and triple that paid by US dollar debtors. Thus a cumulative $3 trillion net US debt pays its holders less than the $1 trillion debt of emerging markets. This leaves a dollar deficit that is filled by the trade deficit.

Contrary to common theory, trade does not balance with capital flows. The dollar support mechanism is rather obvious on page 2 of the URL above (IMF trade data). The one sided portion of the global trade balance is the result of paydowns of accrued interest and principal balances by dollar debtors selling product to dollar holders (most notably the US, but also Europe and lately Japan).

On an individual basis, Americans and US corporations are indebted, but Americans are mostly indebted to themselves (many own enough financial assets to cover their debts completely or a couple of times over). They simply arbitrage tax rates through housing debt. US corporations also made large investments in inventory management and supply chain management and have reduced substantially the time it takes to get from an idea to the first sale of product, a great advantage.

If Europe continues to expand and deepen regulation (as it has of late) while the US simplifies and thins regulation, the advantage would play in the favor of US industries despite higher dollar exchange rates.

Chris PowellGATA sweeps South Africa on eve of Durban conference#532975/9/01; 13:13:41

A nationwide radio interview, and AngloGold
decides to attend.

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Hill Billy MitchellJMB @ # 53289#5329805/09/01; 13:54:36


I too listened to the exchange on CNBC this morning.

Although I do not nor have ever agreed with Joe K. concerning PM's I do enjoy him and "the brain", and "Harvard Boy".

Let me say this about Joe. He is not a hypocrite like most of the "heads" on CNBC. He has not vacillated on issues and has never wavered on his position concerning Gold. He looks at metals from a different perspective than do we. He looks at it from the recent past performance of metals. He only talks about what has happened to those who invested in gold and silver since circa 1981. He has a very strong case. He is preaching to a choir in a different church than the church that we attend. I have told several idiots that they should sell their silver and take their losses because they were holding it for only one reason, to break even if silver ever again reached the price at which they bought. These people bought high and that sort of mentality reveals itself on the other end, as they never sell low. The converse is also true, as there are those who buy low but would never consider selling high. (Not referring to those who hold a portion of PM's, myself included, as an insurance policy against fiat destruction.)

Now do not get the wrong impression. I do not consider Joe K. to be overly endowed with either wisdom or understanding in this area. Quite to the contrary, rather I consider him to be an honest fool. He thinks that because he is right about what has happened to those who tried to make a short-term profit in PM's that he has covered the whole subject and that there is nothing further, no other reason to have possession of PM's than that of the short-term profit motive.

His arrogance in that his position covers all circumstances and motives does a disservice only to the idiots who take what he has to offer as the absolute gospel. He does not hurt us in any way. He helps us in that he aids our cause during accumulation. Joe K. has a special calling. His calling is to be negative. He never has anything in the way of advice or criticism that does not have a negative (I told you so) slant to it. He never gives any advice as to what would be a wise move going forward. He will always talk about what happened in the recent past, i.e. gold vs. Treasuries.

What I like about "the brain", Joe K. and "Harvard Boy" is the clear disdain they have for the rest of the CNBC prostitutes. The almost hate themselves because of their association with these prostitutes because although they do not consider themselves to be prostitutes, they cannot get away from the fact that they work for the same pimps.

As for your swearing, I would classify your post as PG rather than PG-13 and certainly not the kind that would require any janitorial work. The only bad part is it does encourage those inclined to push to the point of testing the rules of the forum. What you have done is certainly not as close to the edge as my forays into the religious realm (smile). When we skirt around the fringes like this what we find is, not how rigid MK is, but rather, how gracious he is. If we put constraints upon ourselves he will not usually get too out of sorts. Problem is, when he does get out of sorts we will have, I fear, no warning, as he does not play games. The way I try to constrain myself is by trying to limit my posts that have a religious slant to Sundays.

Very respectfully,


Chris PowellNew questions for Fed chairman and treasury secretary#5329905/09/01; 13:54:47

Will you ask your congressmen to get

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Randy (@ The Tower)Blowing up the balloon: Federal Reserve adds funds to banking system reserves#5330005/09/01; 14:03:44

The Fed added $707 million in permanent reserves through the outright purchase of Treasury securities for the System account.

Further, the Fed also added $3 billion in temporary reserves via overnight repurchase agreements.

The market in federal funds was trading below the FOMC target, and yet they pump up the volume. Take heed. Diversify into gold because this transition shall be bigger than your paper accounts can absorb.

R PowellTwo fer day#5330105/09/01; 14:12:18

We missed a hat trick as the lease rates were down just a hair. However, POG was up more than a hair, +4.9 on the June contract and the XAU was also up many hairs, 3.68 points according to CNBC's 4:00 report.
Both gold and mining stocks did receive notice on the people's stock market television channel, at least during the hour I've been watching. A Greg Welden of Welden Money Moniter stated that he believes this a breakout move that may continue toward $300/ounce. Mining stocks, according to G-E reports, have been trading in very unusually heavy volume. Interesting, the only negative outlook at the neighboring castle, is from Don_L who sees this as a blow off top with POG looking to retreat soon. I hope he's wrong!
With the XAU and lease rates as confirmation, IMHO this just might be the end of a long, long gold/silver bear.
Wouldn't that be fun!!

ausomePOG sliding in Asia#5330205/09/01; 14:12:22

POG down 40 cents minutes after opening. Don't get too excited about the NY rise.
Old YellerThe showdown continues...#5330305/09/01; 14:26:45

We at the forum all know this is the unspoken issue of the ECB stance.I wonder if this issue will become more prominent after May 15.
OROMr Gresham - Who's mistake#533045/9/01; 15:01:02

My opinion, not supported by anecdotal or statistical evidence directly available from the horse's mouth, is that the ECB member central banks had been egged on by particular EU banks, English and US banks to lend gold at an artificially low set of interest rates that are competitive with dollar rates when viewed from the historical book values of gold on CB books, which was anywhere from $35 to SDR 35 ($42-48), thus at $340 gold, a 1% rate looked like 7%-10% (at $48, and $35 respectively), and at $260 it was 5.4% to 7.5%. The moment ECB member banks moved to mark-to-market regimes, the book value changed. They had to do just that because the Maastricht treaty prerequisites on government deficits and debt were not met without that marginal assistance from booking the profits from marking gold from the historical official price to the actual market price.

The error was clear to those in the private sector (and probably in US officialdom too), and they proceeded to use this as (1) a cheap source of funds, (2) a gold price suppression pool like the infamous old London Gold Pool, (3) a lender of last resort credit facility providing last ditch (and moving progressively closer first ditch), (4) forcing a below market interest rate on gold that caused the classic gold credit expansion boom and with it the classic inflation of gold and the rise of prices denominated in gold. This artificially low gold value (purchasing power) induced people to hoard gold and collect gold denominated contracts and indirect gold ownership, and cash them in (bad money driving out the good when they trade at par). That has forced the banking system and the ECB members to provide upwards of 1000 tonnes a year from reserves in order to keep the supply of physical gold to the markets and avoid (a) illiquidity of the paper markets because of illiquidity of the physical market, (b) breaking of par between the paper gold liabilities in the market and gold, (c) the requisite "bank run" that occurs under threat of a break of par.

The classic credit expansion boom in gold banking will result in a classic credit contraction of the system, complete with empty vaults, multiple lawsuits, and bankrupt financial and industrial institutions, as well as scandal in government and some central bankers giving politicos tours of the empty vaults, or showing them piles of someone else's bullion.

Was it a mistake? By some, surely. FOA claims that it was at least in part intentional, which it very well may be.

CoBra(too)The usual curbs on excess of 2 $ Limit Moves on POG ... #533055/9/01; 15:37:08

... seem at least to be waived today and survived the day. Is it the Joe Gutnik's 18 ton shorts in his Centaur hedge book, the Durban GATA Conference or just the fact that the TPTB are losing control of an uncontrolable (unprintable! gee!) demand of physical metal (Au-metal!), which is not in abundance for paper (fiat)- disregarding the annual shortfall- anyway ...
And I personally don't care, when a 4-5 $ spike in POG triples the volume in mining stocks and sends them 10 to 20% north in a day - reminding me of the notion of a a DJII north of 100.000 in order to stay even.

Anyway, this little move in POG heralds the "leverage" to be expected of a big move - as long as your Au-assets are either above ground or unencumbered (- here's a question mark as to availability ... after default of the system as such, or other, though equal distressing 'curbs' in production of reality-?) ... and so what? FOA would say, or better vis a vis what value - true!

Got me? Got you! ... Got gold?

OROTree in the Forest - 53252 - worth alot till you try selling it#533065/9/01; 15:51:02

Ashanti's hedge book is part of a crowded trade, just like tech and internet stocks were in early 2000. As they indicate, their book could not be liquidated or fully counter-hedged in the event of a discontinuous and illiquid market. It is characteristic of a crowded trade that realizing the profits accrued to date is impossible for all large players.

It is the reason for large astute players easing in and out of the markets gradually, or if they missed the opportunity to exit, adding to a "bad" position they can not exit if they can thus affect the market in their favor. Furthermore, the astute willingly shed some of the profits to hedge against a step wise change in the market against them.

ausome Chase M were the big losers from Centaur's demise#533075/9/01; 15:57:09

Chase were Centaur's biggest creditor because of their forward selling regime. Chase has lost about 120 million on Centaur's hedge book. They apparently allowed them to continue trading when they knew Centaur was insolvent. In the end Centaur was selling forward well below the cost of production.
Carl HBush appointee to Treasury#533085/9/01; 16:03:52

Sounds like another one from inside the Cabal. Thoughts anyone?
Hill Billy MitchellCanuck @ 53272 - Envisioning the world in another decade#533095/9/01; 16:05:10

Sir Canuck

What fine pouring out of the soul! Your post was, IMO, of the best type: - Thought provoking and penetrating. May I impose by using a few of your thoughts for launching pads?


Canuck – "…envisioning the world in another decade…boomers into retirement…retirement and health care costs will be enormous…fewer energy resources…aging population…the end…a debt so massive that cascading cross-defaults will swallow everything…

Comments – Envisioning indeed! The hardest thing for economic theorists (I consider myself to be one) is to be able to superimpose microeconomic experience over and into macroeconomic projections. Let me explain. The highly technical economists involved in macroeconomics give us their conclusions that they derive from data that is not readily accessible to me. If I could access the data I would not be able to properly read it or put it into some sort of meaningful format. I leave that to the macroeconomists. I do not ignore their data nor their conclusions but I have a built-in distrust simply because I cannot verify the integrity of their data.

My way works for me. I observe real life happenings on the microeconomic level and superimpose my observations over and into the macroeconomic level. As example, in 1974 my father turned 55 and was given an offer he couldn't refuse: -- retire now and get full pension benefits – the company will also pay you an amount equal to what you would receive in social security if you were 62 and when you turn 62 social security will take over. In addition your health and life insurance (the best) will continue until you are 65, at which time Medicare will take over; however the company will continue to pay the supplemental premiums to cover that which Medicare does not pay. Sixteen years later, my father and mother are 71 and look to live quite a good while longer (not without the exorbitant medical expenditures that they have been guaranteed). Next year my brother will be 55 years of age and has similar options to that of my father. The big difference is that my brother along with myself (also 55 in the year 2002, we are not twins) are baby boomers. Let us call our parents the first wave and the generation of baby boomers the 2nd wave. One important item, which I'll bet you a fiat to a donut, is that the macroeconomic demographers have not considered the fact that many of these baby boomers in unison with many of their parents will not be paying in FICA and Medicare for as much as ten years prior to "normal retirement" age. Additionally, my guess is that, they will cease to be contributing to the GNP as much as 10 years earlier than the demographers calculate. What am I saying? These jobs are not being replaced. They are being eliminated by either technology or exportation. They are replaced with hamburger frying jobs at McDonald's etc., and the number of grandchildren available to fry these hamburgers for their parents and grandparents is becoming disproportionately smaller as the process unfolds.

My point is this. Even if Greenspan and Co. can somehow magically hold things together for a few years, the so-called surpluses in the so-called trust funds is going to disappear much more quickly than the demographers are telling us. When these trust fund surpluses reverse the Federal Deficits will accelerate and Harry Figgie will be vindicated. The FOMC will have to double its staff, Treasury bond rates will go through the clouds and hyperinflation will have arrived, further changes in government bookkeeping to the contrary.

Not to mislead, I would say that I expect a collapse of the USD long before this scenario unfolds. Alan Greenspan will probably be long gone. He will either be dead or will have become a cosmopolitan like Charles Volker and Panda. I fully expect for gold to be vindicated within the next year or two (three at the most); but if I am wrong and the USD does hold up until 2005 the baby boomers will have followed through in like manner as their parents and will have destroyed the dollar by ceasing to produce to soon while accelerating and continuing consumption too quickly and too long. There is no hope for the USD. The Euro has only to wait in the wings. We, the boomers, will destroy our own economy and currency without any help from the Europeans and they know it. ORO, Please do not try to tell me that the USD, as the world knows it, has a chance of survival.


Canuck – "…the inevitable…paper will have no value…tangible, hard, physical assets…in good times and bad…represent wealth

Comments – Sir Canuck, in so few words you have perfectly described the end result of the above "baby boomer" scenario and what one must do to prepare for this inevitability.


Canuck – "…This will happen slowly…

Comments – Sir, you are correct, for it has been happening slowly since at least 1911, but the end is very near and when "thunder is heard in the night", the "slow happening", will blast off the launching pad. When one is asleep and is awakened by the thunder he has already missed the first warning from the lightening. The "perfect storm" is soon to follow. If the Storm shelter has not been built prior to the appearance of the lightening, it will be too late to try to build, but Joe Kernen would not know of this possibility.


Canuck –"…I have begun…to wean myself from fiat…this may take years…accumulate

Comments – Yes, it may take years. This is the very excuse that some use for not accumulating, that it may take years. You are among the few fools to whom Joe Kernen has been referring. Anything you do prior to the arrival of the storm will be better than buying treasury bills as per Joe Kernen's recommendation.


Canuck –"…If governments self-destruct I will not be reliant on them in any way, shape or form.

Comments – If governments do not self-destruct, hopefully, you and I will not be reliant on them in any way, shape or form, save for defense from invading armies. Oh how I hate subsidies. I may have to give up fast food, na!

In summation gold will be vindicated long before 2012, the so-called year of the baby boomer.

Very respectfully,


OROHBM - dollar as we know it#533105/9/01; 16:41:46

Most definitely, the dollar will not survive as we know it. There will indeed be an inflationary collapse as the trade settlement system is saved but our monetary savings lose most of their value just like an internet stock once the shorts have covered and the stock options grants vest (the last of demand disappears just as large fresh supply comes to market - the classic crowded trade).

HBM, the dynamic for the "strong" dollar is reversing, however, there is still quite a hole in the dollar supply to the market, which is quickly being filled. The fill time remaining is no more than 2 years, and likely only one. We should start seeing the moves as the markets start discounting the "event" - when they realize it is coming.

The Fed should give one more % and start pulling rates up upon the first losses in the dollar (a.k.a. "too late").

My main beef with the Euro fiat + limited gold trade is that it is presented as being a superior international trading structure when nothing but political support stands behind it, and the whole of known monetary economics stands against it. At least the dollar is leveraged to gold - recognizing an anchor, what is the Euro system going to do without any anchor at all? Use the hobbled "cash only" gold exchange rate to Euro as a motivator by "shaming" the Euro as its exchange rate drops? Did it ever shame Nixon and Carter to see the dollar go up to over $100 and then to $800+? Why would anyone think the ECB and the EU would be any less flagrant in disregard of the public savings (such as they are - mostly as a result of the prior inflation)?

Randy (@ The Tower)First Fisher, now Roseboro?#533115/9/01; 16:49:22

Almost looks as if they are battening down the hatches at the Treasury, using some salty ol' dogs with some serious sea legs under them.
HoratioAnglo#533125/9/01; 17:02:35

Anglo splits on a big up day,did they know something we didn.t know.Management don't split stocks if they think thier going down or if the stock is in a weak position.
You always split into strength.

Mr GreshamExcitement#533135/9/01; 17:23:35

A lot of excitement among da Bears today!

Oro -- great to see you here today. I'll have to read yours over several times; my brain fuzzes out as soon as I read those SDR and old $42 book prices -- and starts trying to convert everything to current terms. Looks like you've named just about everything, though...

We really are an excitable bunch, eh? The sense of anticipation is carried in more places than here, of course. Based upon the idea: "They've had to expend so much manipulation power to grind POG down lower, but as the base firms, a smaller and smaller spike will start a short squeeze." The anticipation is that we may learn sooner rather than later how that "small spike" theory plays out in reality.

Y'know, the day it all pops will be so ordinary in every other way. Everyone else will walk around in their normal activities. There will just be the odd few of us walking around as in a parallel world, not unlike the cat with some canary feathers stuck on its whiskers, but no one around us will know, care, or understand what's percolating through our tired old brains.

The reason is that we've been living in a parallel dimension these past years, "keeping the real world books" for everyone else, and waiting for the games distorting them to revert back toward sustainable economic reality. Not that we welcome the pain, but it's the unreality and lack of principle that has already booked a lot of hurt for those around us.

The news will be bad; so my advice is, just be sure you're not seen as the first bearer of that bad news to many who are close to you. You may be associated with it forever, in their minds. In a way, this Internet anonymity is both the provoker of further discovery than we ever thought possible, and our protector from blathering it all over our family, friends, and neighbors. (My advice to myself:)Let it out here, and maintain a judicious reserve amongst those who will learn it soon enough by firsthand experience.

Trail GuideComment#533145/9/01; 18:04:25

Hello ALL,

ORO made some interesting comments and I want to take issue with a few of them. I'll start with his first post. (also, a big welcome back to you sir!)

In your post ORO (5/9/01; 11:40:43MT - msg#: 53294) FOA - NO LAW,,,,,,,,,,,

you write:

--------My take on Europe and the Euro are that they are desperate attempts to save European governments from competition among each other and the rest of the world, and of their trying to maintain the political hegemony of the small bureaucratic and political elite within Europe.------

No ORO, that view does not hold water. Europe, along with imput from many other non dollar nation states, has been working on currency union from the most early days of the "European Economic Unit (EEU). That one thrust alone dates back into the early 70s and even before that they have tried to match their economies by presenting united exchange rate mechanisms.

If their current objective is the object of a desperate attempt, you will have a hard time defining desperate over such a long period. My take and that of quite a few Europeans is that their union has been well planned yet very complicated to establish. Indeed, most any political analysis would describe their drive as remarkable given the enormous roadblocks the US / IMF / dollar faction has
thrown at them. Truly, if "political hegemony of their elite" was all they were after, they would have scrapped all dollar support at the Jamaica Accords conference. They could have easily matched the economic deterioration that action would have caused, against the cost of no longer supporting
the dollar. These countries inflated their own internal currency systems in order to maintain a world dollar standard. This alone flies in the face of hegemony on their part, both then and now.

You write:

--------The purpose of the Euro is to trap capital and trade within a political block controlled by this elite ----------- It has only to do with political power attempting a last ditch effort of governments of Europe against the forces of globalization and economic and technological progress.--------It has nothing to do with any of the following: political subservience to the US, the
cost of using the dollar for international trade, the dollar's wobbly past or future, trade efficiencies, free trade or liberty of any sort.---------

That's a pretty broad statement. Sounds like the history of the world from beginning to end. (smile) Yet, I can find nothing in European culture, ideals, nationalism or society in general that I do not find here in the US. Usually the motivation is functioning under a different name, though the effect is the same. Americans have in the past thrust their protocols upon the Old World culture. In this light, some of us think this shouldn't effects a Euro policy response. Hello? Good perception comes with understanding and loose observations are useless when seen using tunnel vision.


------We Americans trap world capital through dollar hegemony and call it "Americans for free trade" ------- We shutter at the thought of Euros in our pocket, as a second currency, and would impose any amount of foreign exchange controls to limit such. But we are very open to globalization at any time. ---- Trade efficiencies are great as long as they favor our lifestyle above other nations.
----- Further, our liberty is a good thing, but the liberty of others is unimportant if it interferes with our national interest. --------

Still, if the Europeans are trying to attain our same position in international affairs, it's seen as their elite power block holding on? No, that doesn't clean the laundry either.

Perhaps the difference of perception is seen on our last Trail Walk; --- As such the euro is important in that it challenges our (dollar) hegemony-----. This alone, ORO, is enough for us to structure for the outcome. Whether one can see the political motivations correctly or not, their Euro
will re-balance the world of currencies and have an outsized effect on the US.

You write,,,,,,,,,,

--------The legal provisions you talk of will not destroy or prevent a future gold banking system that might compete with the fiat insanity. It will destroy the countries that sign on to it, which are likely not to include the US and most of Asia unless taken over politically by EU influences (which
are not that strong there). -------------

First of all, you should stay within the context of my discussion with Econoclast. We were presenting positions, not launching ICBMs. The position I presented is valid in limited circumstances that would include a fallen dollar. This has been discussed by others "overthere", among other criteria. You speak of fiat insanity? I point out to you and ET and Journeyman that hundreds of millions of us have been living with such a currency for some time. Insanity is a bit
cheap of a description when the world has endured wars and multitude human infliction for thousands of years. If this whole transition fails, we will still live out our lives with fiat, like it or not.

When you state the following:

-------The attachment of collateral to gold is innate in the action of trading gold. Without that, there is no trade in gold possible at all. All trade involves the creation of a debt, at least temporarily. The debt may be secured by the items traded, but transactions must involve a debt. Transactions also must involve a contract. Ownership of anything is title, either assumed through possession, or
documented. A system that does not allow collateral backing a contract denominated in gold is a system that does not allow gold to trade, and endangers title to gold not in possession. Doubtless, the purpose of such law would be to allow governments to confiscate gold held in custody (not in
possession) if the attempts to prevent monetary use of gold fail.-----------

You are right, it is innate to this current fraud of a dollar gold market. I know you are thinking in terms of the current dollar gold market function because the rest of this thrust sounds like it is right out of our current bullion bankers notes. Both past and present and is completely based upon a continuation of the same. We have no intention of traveling that road again.

Further you write:

------It is another attempt by EU governments to block the exits from a future Europe they imagine they can control. If implemented successfully, it will be Europe that will be destroyed by the absence of an efficient credit system keyed to effective gold denomination of debt. --------

The world has traveled this road before and failed to control it's controllers. Gold as official money is dead at the starting blocks, my friend. Send your best salesman around the world to sell that position for a living. Most certainally he will die of old age or lack of commissions before anyone will deal with him. If gold debt is what you strive for, then carry your torch and do your best. Just
don't ask the common man to suffer wealth loss again while we try to do it one more time.

Further by your hand:

---It would mean that the only interest rate available would be the innately incorrect one set by monetary authorities.------

Where is this at odds with a functioning fiat Euro that's controlled by the ECB? I will tell you, it is set with one/half an eye on the Euro price of FreeGold. Far different than the current world rate being played off a failing currencies economy and set by a paper gold market.

All of the rest of your argument is an endorsement for gold debt in our constant fiat world. It has failed before and will fail again if allowed to be mingled into a political arena. The world's first gold coin was never money and yet was a perfect trade for another good. No debt was involved then at the time of trade and should not be now. The hard money school that has lead us down the gold / money path never stopped to consider that banking and gold do not and cannot coexist without corruption. We have learned from them. We know now what not to do!

Explain your position in point by point fashion and it will not amount to a "sellable conclusion". That's because the Old World culture chooses not to close a gold window again. We will, indeed, see how this all plays out as "time will prove all things". I will own physical gold and scoff at your bankers pleas for "one more try".

As always, thank you very much for your impute and opinion. (smile)

R PowellMr. Gresham (53313)#533155/9/01; 18:44:49

Concerning excitement

Agree, entirely. I often print out info for the wife and kids and attempt to get them to read. I've had some success, but limited.
You wrote, "Let it out here, and maintain a judicious reserve amongst those who will learn it soon enough by firsthand experience." I sometimes drop hints in conversation but very, very few notice anything. Outright conversation usually hits a brick wall. My old dad used to say, "Don't give advice. Wise men don't need it and fools will not heed it." Dad used to say that but I believe the author was Ben Franklin.
May I comment on your quote? Everyone will experience firsthand what is coming but, I'll quess, damn few will understand it until the media explain it to them. Lord only knows what that explanation will be?? Mostly blame, I'll bet, on someone, somewhere, for something??
Go Gold, Go Silver, Go Lease Rates, Go XAU, Go GATA!!

LeighR Powell, Mr Gresham#533165/9/01; 19:20:38

I think people can't imagine what is coming because we here in the States don't have REALLY BAD things happen to us very often! For most of our lives, everything has gone along smoothly, and we think it always will. Plus, think back on predictions that never came true...Y2K, the earthquake near the Mississippi River (circa 1990), hurricanes that turned out to be short rain showers, and so on. People feel dumb when they prepare for the worst and then get fooled. So they've hardened their hearts to doomsayers (like us).

I wonder how people who have really suffered all kinds of calamities would react to our doomsaying. Would they be more likely to believe it? You know, many people who went through the Depression always seemed to fear that more bad times were right around the corner. Who else here remembers their grandma saving string and aluminum foil?

There seem to be people in this world who can learn only through experience. We bears just have more vivid imaginations!

USAGOLDHi Leigh, your observation:#533175/9/01; 19:31:33

"There seem to be people in this world who can learn only through experience."

Good ole' Ben Franklin came up in conversation tonight. He echoes your excellent thought with this:

"Experience keeps a dear school yet a fool will learn in no other."

Isn't that what this Forum is all about? I have learned over many years of counselling people from all walks of life that the cost of preparation does not have to be the better part of one's assets, nor does it have to be the commitment of a lifetime, but the peace of mind which attends such preparation puts a smile on the face, confidence in the step and a quiet, settled disposition.

Thanks for being here, Leigh. My best to you and your family.

Black BladeNatural Gas Prices Surge, Fueling Crisis#533185/9/01; 20:54:59


Most power plants are fueled by natural gas, which was once cheap and abundant. High natural gas prices worry the Federal Energy Regulatory Commission, which fears that the big markups could doom its plan to rein in California's electricity costs this summer since generators will still be able to pass on fuel costs.

Black Blade: Virtually all new power is NG-fired. So what is happening across the US including dark hot California? They are building NG-fired power plants. I guess - "If they build it, NG will come." No one ever accused the people and the politicians they elect of being rocket scientists. The ripples of the collapsing California economy will emanate outward to swallow up the US economy with a series of rolling shockwaves. A little gold insurance is in order.

GalearisOn silver, the newest Ted Butler article.....#533195/9/01; 21:06:48

....speaks for itself


To me, the rigging of the silver market for the past 50 years (particularly the past 15 years) is both bad news and good news. The good news is that such an epic distortion of the basic supply and demand of a major world commodity has created the opportunity of a lifetime. As you are aware, I've gone on record as predicting silver could hit $50 or $100 per ounce over the medium term. But I've done that only because an analyst is expected to spit out a number to summarize his research. In reality, on a long-term basis, those price projections do not reflect just how bullish I am. Rather than throw out an even higher number, and risk undermining my research as being unrealistic, let me talk about the long term in a manner other than price. Let's review the historical circumstance that dates back 5000 years.

With silver the world has had a vital, desired, and universally recognized commodity, whose total cumulative production was in the tens of billions of ounces. Suddenly, about 100 years ago, this commodity became vital to all sorts of indispensable industrial applications. We started to consume and use up silver. Published statistics indicate we have consumed over 90% of the total that the world has produced. The world has chewed up 5000 years of accumulated inventory in the past 50 years. Please understand and envision that 50 centuries' worth of accumulated production is gone forever. This is the most bullish factor that any world commodity ever experienced.

In 1942 the US government had almost six billion ounces of silver in its inventory. That silver is used up. The US mint must buy silver this year. Those billions of ounces went to industrial users and into coinage. Subsequently, much of the coinage has been melted down for industrial use. The fact that such big hoards of silver have disappeared means we are fast approaching a time when no more silver is available to industry at today's low prices. If the silver is no longer there to get because the strong demand has used it all up, the price must rise to ration the supply and alter the voracious demand. The more you analyze silver, the tighter the supply situation looks. It's bullish beyond our ability to grasp the total picture of this booming demand and thinning supply. On top of all this vanishing silver sits the biggest short sale of any commodity ever in relationship to its supply. Silver is literally a time bomb waiting to go off.


I am a believer and it WILL happen.......if there is an economy left to drive demand. If not, then all the gold and all the silver, and all the increasingly valueless currencies will be but a memory of wealth.


megatronGalearis#533205/9/01; 22:06:44

But it's not a monetary metal! :}
Black BladeBird Lovers Squawk at Wind-Energy Scheme #5332105/09/01; 22:18:53


AMSTERDAM, Netherlands (Reuters) - Dutch bird lovers want the government to axe plans to build 200 wind turbines along a northern dam which they say will endanger the lives of thousands of coastal and migratory birds.

Black Blade: Introduction offer for the "Bird-O-Matic!" It slices, it dices, and it blends birds with one twirl of the blades! Wind power for the discerning Dutchman in the country that brought the World the comfort of wooden shoes and the miracle of Tulip Bulb investing. Yes, even in the US there's opposition to wind power because of the danger to the birds. It seems that birds, and notably birds of prey such as the California Condor have this knack for sailing into the blades of these wind blenders in such a way as the put any self-respecting frog to shame - in reference to the old frog in a blender joke. PETA (People for the Ethical Treatment of Animals - not People Eating Tasty Animals) has been a long time opponent. Wind power, like many of these birds, "fall short" of solving the energy crisis.

Chris PowellDow Jones story about GATA's Durban conference#5332205/09/01; 22:26:19

It's building....

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Chris PowellCBS MarketWatch story cites Durban conference#5332305/09/01; 22:27:33

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Black BladeCalifornia Blackout Season Begins #5332405/09/01; 22:32:44


SACRAMENTO, Calif. (AP) - California's newest season - blackout season - is here, and it arrived earlier than expected. State officials had anticipated a crunch in June, when air conditioners are cranked up for summer weather. But already, California has been hit with back-to-back blackouts on Monday and Tuesday, and the operators of the state's power grid barely scraped together enough energy to avoid blackouts Wednesday.

Black Blade: It's official, now it is a "Season" as if it is typical business as usual. Ya just gotta love the "spin" these days. Good is Bad, Bad is Good. Huh? Air Conditioners are expected to account for as much as 20% of energy use this summer. California just got a little taste the last couple of days. Rates are going up, more blackouts are coming, and there's no more energy to spare. The California economy is about to be rocked with much higher costs and lost productivity. So turn out the …er, Oh well the party's over.

Black BladeBlackouts could cost Calif. almost $22 bln - study#5332505/09/01; 22:42:59


SACRAMENTO, Calif., May 9 (Reuters) - California's long, dark summer of blackouts could cost its economy almost $22 billion in lost productivity and chop as many as 135,000 jobs in the state, an industry association study released Wednesday shows. ``The longer this continues, the greater our risk of a job-killing recession gripping California.''

Black Blade: It is a foregone conclusion. Some should consider a gold lifeboat, while others should consider a gold Ark! This whole energy crisis and the link to gold is not unprecedented.

RockgrabberMy Trail Guide#5332605/09/01; 22:59:40

(Hand Raised) Sir, I have been out gardening, and thinking about your thoughts, thanks. Thanks for putting such a complicated study into such easy clear thoughts. (going back in my spot on the trail)
Black BladeIt's bad, and it'll get worse #5332705/09/01; 23:06:42

TROUBLE AHEAD: Extra power for summer will fall well short of Gov. Davis' promise


California will get only one-third of the new power that Gov. Gray Davis promised to deliver by July 1, virtually ensuring a brutal summer of blackouts for the energy-strapped state. In fact, experts said, there are so many obstacles that the governor's plan was unrealistic to begin with.

Black Blade: What?! A politician that did not keep a promise! Shame. Does anybody really find this so difficult to believe? This article lays out a gloomy forecast. I'm not as optimistic.

justamereBearBlack Blade 53321 Holland#533285/10/01; 00:53:11

Black Blade
Have you been there and seen that project? 50 years to pump out that Zee. These guys don't think small. A most amazing project. 3 or 4 years ago I spent a very happy week puttering around that project. They are making astounding progress. Well worth the trip, IMHO. But then, I love all of Holland, except Amsterdam.I wonder if the old windmills sliced and diced birds too?


CanuckBombshell?#533295/10/01; 04:39:51

From the recent GATA messages:

"There's going to be some very painful facts
disclosed," said Murphy. "It's going to be bigger than


As I, are you getting the impression that a bombshell is going to be announced today?

Thanks to HBM and Mr. Gresham.


ausomePOG positive again#533305/10/01; 05:28:37

Up 5cents after being down all day in Asia. Go GATA Go Gold.
Cavan ManDear Sir FOA#5333105/10/01; 06:04:50

Truly, Sophia; ef-hah-ree-stow.
KnallgoldStrange theory by Derb#5333205/10/01; 06:44:56

What do you mean?
The Invisible Hand; 07:14:38

ECB surprises with rate cut

Euro zone central bank shocks markets with rate cut to counter slowdown
May 10, 2001: 8:43 a.m. ET
LONDON (CNN) - The European Central Bank shocked the markets with a quarter-point interest rate cut on Thursday to counter a slowing in euro zone growth.The ECB lowered the interest rate to 4.5 percent, its first move in two years, from 4.75 percent. Only three economists out of 50 polled by Reuters expected a rate cut.

The Invisible HandOops URL - ECB surprises with rate cut#5333405/10/01; 07:18:50

Easier reference
The Invisible HandEurozone rate cut surprise#533355/10/01; 07:29:00

The news gave an immediate boost to the European single currency, the euro, against the dollar, and triggered a surge in share prices in Frankfurt and Paris.

The Invisible Hand: I thought that when the reward of an asset diminished, its price decreased also. Or do I have to understand that the rate cut will give a boost to the European economy and thus (how?) strengthen the euro. Is economics no science? Or can anything derive from anything?

Buena Ferate cut ...........ecb folds to presure#533365/10/01; 07:34:09

I guess the ECB didn't want to start a war yet.
The Invisible HandRationality restored#533375/10/01; 07:44:36

euro (futures) not up, but down
88.14 -0.28 5/10/2001 @ 6:29 Pacific Time

Hill Billy MitchellBuena Fe @ # 53336#533385/10/01; 07:54:31

The yield curve in Euroland has been negative (inverted) and the results are taking effect over there. Reality is setting in just as it has for Greenspan over here. No doubt there has been some arm twisting; however I am convinced that the ECB move is to soften the landing over there. This is a long and slowly moving process between the USD and the Euro, that is, until some unknown event triggers open economic warfare. Survival of the fittest is what is and has been going on for quite a long while. (6,000 years)

Very respectfully,


Hill Billy MitchellThe Invisible Hand @ # 53335 - Rate cut surprise#533395/10/01; 08:04:12

What surprised me was that the rate cut did not occur before now. They have similar problems as do we, though not so pronounced as the Euro is not in maturity nor is it a currency of reserve status, yet.

I truly believe that they have been so worried about inflation that they were willing to force economic cooling and now the fear is more towards pronounced recession which in the end will always weigh concern about inflation. A mirror image of the US experience only just a lag behind, much like our national economy and politics, which lag behind the goings on in California.

Convergence is upon us in short order.

Very respectfully,


Chris PowellMurphy address to GATA Africa Gold Summit in Durban#533405/10/01; 08:31:07

Here's the complete text.

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Camel Injection rates/interest rates#533415/10/01; 08:37:49

Hey Black Blade. How about giving us some updates on gas injection rates.

Remember that the Fed is expected to lower U.S. interest rates next week. If that occurs then Euro rates will still be higher than U.S. rates which will still follow the game plan of directing capitol to the Euro.

Trail Guide- I hope you won't let Oro's tirades deprive us of ANOTHERS thoughts.While he raise's an interesting topic, as we used to say in the 60's he tends to go on a "head trip", that is a labyrinth of words that have little connection to reality. You will only wear your self out trying to respond

justamereBearCamel#533425/10/01; 10:19:43

When all is said and done, and history is finally written, I am sure that we are all going to be wrong to a greater or lesser extent. In the case of Oro and Trail Guide, I would dearly love to have the time available to enter the debate, because the subject is interesting and important, and I have some disagreements with both, in this case, slightly moreso trail guide than Oro.

You say that Oro raises an interesting point. I submit that it takes a certain amount of intelligence to raise an interesting point. One may like or dislike yours or mine or Oros way of presenting an arguement. However, I would hardly characterize Oros work as a tirade.


OROJustamerebear and Camel - fawn on your detractors and denounce your supporters#533435/10/01; 10:27:05

Let me commend Camel for noticing that there was a tirade, and berate Mr Bear for denying it.

Justamerebear, perhaps you could spend a moment on points I made that are due for criticism, I would appreciate that.


Galearis@ megatron, your #53320#533445/10/01; 10:46:08

Monetary silver...

"But it's not a monetary metal".

Yes, T.B. never came out anywhere in this article and specifically said that it IS, but he did say that historically that it WAS...through 5,000 years of use. And, as you know, the commodity uses of the pm have far outstripped its usefulness as a money metal, but a 5000 year history of multiple uses drives still the perception that it IS a monetary metal. The thrust of this particular piece delt with basic commodity supply deficits and the repercussions down the road. It is still involved in coinage - which reinforces the concept - and is, like gold, used in jewellry and DOES on the metal market mirror gold in its ups and downs. It also shares a public perception that is similar to that of golds.

Perhaps it is the last point that is so easy to make. If one looks in on the Kitco graphs for both metals for the past couple of days, it can be seen very clearly. If the speculators were buying silver based on its commodity factor, then it would not reveal this connection - and would follow copper, for example, more closely. That it does not do this would seem to indicate that speculators are speculating on silver based on the same value perceptions that they hold for gold. That TOO will drive the market - and seems to be doing just that right now. Consider, please, by asking yourself a question: is the spike due to Kodak suddenly becoming worried about film production and buying on the spot market? Do you think these buyers are aware of Ted Butler? Do you think they are aware of the dangerous dynamics of a derivative driven metals market? These people are speculating on a paper market that they consider real, for the same reason as they speculate on a paper gold market. Ignore for the moment the physical component and focus on their goal to buy paper for a paper profit; that they do this is still driven on the perception of a percieved value for these trades based on the allure of precious metal. They are obviously unaware of the supply deficits in the metal or it would already be "SILVER TO DA MOON".

It really IS as simple as that.

Public perception drives markets. That the DOW does NOT mirror a present economic crisis is (and continues to be) a wonder to us all. Human beings are extraordinary in their capacity for denial and following their habit based routines instead of using a more clinical approach that culminates in doing some research. It would seem to be a mob psychology factor that is operant here: like a mob, the public I.Q. is some function of an inverse relationship to the numbers of individuals composing the masses. That is why the majority applaud interest rate cuts because of the band-aid, short term profits that it gives them. In short most would seem to be quite disconnected from reality and operate in a world that would seem to be much simpler than the reality. This too drives perception - often to the detriment of us all. The contrarian philosophy can be applied to almost every facet of human behavior, from politics and economics to child rearing. Even Karl Marx recognized it.... and it is fundamentally the reason that he held that free enterprise will ultimately destroy itself by undermining the support structures that maintain it. We will all be exposed fully to this for the next fifteen years, and you can also be assured that the truth will not set anyone free. Truth, as many of the moralists on this forum know, is usually the first thing to go.

Silver, get ya some (smile)

I'm off to Toronto again. But at least it isn't raining. Have a nice day on the forum.

Best regards,


PH in LAJust a mere interjection into the tirade.#533455/10/01; 10:49:57


I'd like to add an echo to Camel's post (msg#: 53341).

The thing about ORO's writings (which makes one wonder if he is not somehow related to Kitco's Mozel) is that he already has his agenda. Much as his learned and often informative comments try to camoflage it, he is rarely looking for objective truth or principle. Rather, he is trying to prove the viablility of his thesis, much as we all love him (smile, smile). You put your finger right on his weakest link when you say, "Gold as official money is dead at the starting blocks." Unfortunately, this is ORO's one agenda. So, of course, he is perfectly willing to loosen his ICBMs to defend it.

For my part, your proposed solution just resonates right. In the present fiat system, there is really no refuge. The lords and masters have every tool at the ready to debase the product of my labors (ie savings) and the only defense against them is risk. "Invest in ________s!" they say. Fill in the blank with stocks, bonds, real estate, IRAs, (whatever) for all of which they have their fingers on the controlling strings. This is patently unfair. Once earned, the individual needs somewhere to put his savings where he can have control over them... somewhere beyond the managers' inflationary reach. In our system of voluntary slavery, they hold our noses to the grindstone and make us all work out our lifetimes. "Welcome to the machine," said Pink Floyd. OK, let's not take issue with that. Nor with the unfairness of one man's work being 'worth' more than another's (depending on whose son he is, or who he knows, or who likes him, etc). I won't even propose that topic. But once earned, why do they still need control over my savings? Has their greed no bounds?

Your proposed system at least holds out the possibility of an asset designed to hold its value in the face of their inflation. Seems logical to me. Seems like a system we could live with. The only system that we'll ever get, will be one that we can all live with. Maybe not anyone's perfect sytem. Not ORO's utopian gold standard. But at least one that most can tolerate. Who among us can really tolerate a system that sucks the value out of our savings through their insidious inflation if their is no refuge? No defense?

What is not quite clear to this observer is this:

Is the system you see one born of your own vision in the manner of ORO's gold standard? Is it some form of wishful thinking, however noble and/or logical and well-meaning?

Or is it, as a sytem, already mostly implemented? Do the European 'managers' already have the blueprint drawn up and set in place? You have mentioned ANOTHER's current reading of political postures/events on the part of the BIS. Please do not assume that we are not ready for this information based on the reaction from ORO. Some of his information has always been eye-opening and fascinating, but his weakness is his own political agenda. For those of us without a pre-conceived agenda, are you one of us? Are your thoughts the product of investigation? Of the truth seeker? Are ANOTHER's?

Or even more staggering: Is ANOTHER actually one of the 'managers', one of the architects of the new system assigned the task of propaganda? Are you his publicist? This would explain why ORO's ICBMs seem to have such a personal effect. If so, why not declare your advocacy? And tell us, while you're at it, when the new system is destined to become fully operable. Our hopes have been dashed so often.

Is this August, exactly 30 years after Nixon's surprise closure of the gold window, a significant date? If so, can you tell us exactly why? You once thought that a gold crisis would make the Y2K event largely irrelevant. You thought the Washington Agreement's spike would bring on the definitive default. Now it's 2001, and not yet. Now you say that GATA and Reg Howe's battle will be proven irrelevant... that the default is scheduled for before they could work their battle through the courts. How long could that take? A few years? Is there something out there, that you know about, that makes you say this? Or are you just betting on the numbers? On probability?

geBrave New Fiat#533465/10/01; 10:59:49

Trail Guide says "The leading economic countries (EuroZone in the future) would have but to establish a protocol that forbid the enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade. In this context, no banker would lend you gold to buy a house if, in a default, he could not claim your house in a court of law."

Therefore, gold may not be used to trade goods and services.

Thus ordered the Holy Roman Emperor.

Cavan ManPH in LA#533475/10/01; 11:34:39

"That's because the Old World culture chooses not to close a gold window again".

Trail Guide

I believe some of your questions can be answered by the considering the above statement.

It's my opinion that people beyond N. American shores have long, long memories and strategies that take decades to fully implement.

Randy (@ The Tower)ECB explains its across-the-board quarter point reduction in rates (4.5% on the main rate)#533485/10/01; 11:46:30

ECB president Willem Duisenberg told a press conference today that after the Governing Council "conducted its regular examination of monetary and economic developments and analysed their implications for the maintenance of price stability in the euro area" decided a rate cut was in order, citing, "somewhat lower inflationary pressure over the medium term."

Those who have been keeping their thoughts and eyes on our discussions of the implications the euro has for the dollar's legacy as international reserve currency had better take a good look at this portion of his remarks:

"In order to explain today's monetary policy decisions in some more detail, let me share with you our assessment of the information provided under the two pillars of the ECB's monetary policy strategy.

"As regards the first pillar, also taking into account the latest available information, monetary developments no longer pose a risk to price stability. M3 growth has been on a gradual downward trend since spring 2000, reflecting the increase in the key ECB interest rates which occurred in the period from November 1999. The three-month average of the annual growth rates of M3 was 4.8% in the period from January to March 2001, which is close to the reference value of 41/2%."

[Randy's note: OK, now pay attention to this following "significant" and "non-negligible" item, knowing as you do that such international euro use would effectively represent a displacement of dollar use.]

Duisenberg continues, "In the past few months, some slowdown in credit aggregates has also been visible. In addition, as already stated on several occasions, there have been indications that the monetary growth figures are distorted upwards by non-euro area residents' purchases of negotiable paper included in M3. This has now been confirmed by clear evidence, and the magnitudes involved are significant. As regards holdings of money market fund units/shares by non-euro area residents, on which we now have solid statistical data, the distortion has become more sizeable over recent months and currently amounts to around half a percentage point. In addition, there have been non-negligible upward distortions to the annual growth of M3 as a result of non-euro area residents' holdings of other marketable paper included in M3, for which precise statistical information is currently being developed.

"The ECB will keep the public informed about ongoing developments in these categories of M3. As these factors can be broadly identified, the information content under the first pillar is ensured. Taking into account these upward distortions, as well as all information from the first pillar, it can now be concluded that there is no longer a risk to price stability over the medium term emanating from the first pillar."

Buena FeTrail Guide 53314#5334905/10/01; 12:06:23

A reasoned/tempered response......Cheers.
Randy (@ The Tower)Fed pumps up the volume, again#5335005/10/01; 12:08:56

For the second straight day the Fed has added nearly 700 million dollars ($696) as permanent reserves to the banking system through the outright purchase of Treasury securities for the System account.

And while yesterday the Fed also added $3.0 billion via overnight repos, there was a similar operation today totaling $3.5 billion. Fed funds were trading below the FOMC target rate of 4.5 percent.

Mr GreshamFOA, Oro#5335105/10/01; 12:13:16

Getting a sore neck from watching you two play that marvelous ping-pong as you do. Not time to read today's volleys yet, but my thought was about ECB's independence from the Brussels bureaucracy that Oro is so vehement about/against. Is it? Is ECB trying to manage a currency apart from the other government functions the others handle, so that that currency can compete (and outrun the dollar?). I would imagine that was part of the 20-year period of readying for the Euro, and creating a "currency without a country."

My limited learnings about fiat management would suggest something like a Friedmanite standard of a fixed growth rate, such as 2% annual, to limit quantity and impose "scarcity" on the fiat. That would be the first responsibility, IMO, of a fiat central banker who wanted to do his job right, resisting other pressures. Next would be a bit of "taking away the punchbowl."

AG is obviously writing the textbook on how not to do either; it'll be interesting to read your takes on today's ECB action. ECB is still not too worried about outrunning the bear, I guess, is it?

Randy (@ The Tower)Comments by ECB chief economist Otmar Issing#5335205/10/01; 12:28:00

I posted this two days ago. Read it.

<whispered note to ORO: You owe it to yourself to read and broaden your perspective on the thoughts of those that you have recently referred to as "derelict monetary boobs such as occupy the higher reaches of central banking and politics, and at church altars and mosque towers.">

Sincerely yours,

A Free-thinking Derelict Monetary Lackey

Humble PieLetter from ANOTHER#5335305/10/01; 12:34:16

FOA, Let's have it , I'm more than ready for it.
Trail Guide(No Subject)#5335405/10/01; 12:55:28


I have not gone anywhere and will be posting more as soon as I can. Don't take our (ORO's & mine) comments to each other as burning down the stage. My goodness, we can take morning
water balloon shots at each other across the backyard fence and still share ice tea in the evening.


silvercollectorGalearis#5335505/10/01; 13:51:31

Dear Sir,

If you have a moment will you email me please.

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

beestingComments by Otmar Issing.#5335605/10/01; 14:34:29

Sir Randy, I think this statement from your link by Mr. Issing says it all!!

<<And the entirely new area-wide perspective that we needed over a group of sovereign states was simply unprecedented in history>>UNSNIP.

Lets think about whats been said here:
Without firing a shot countries are giving up their economic sovereignty. So, lets take an imaginary trip into the future and see how it would affect Americans.
Say sometime in the future the value of the dollar became so low, Congress the Senate and the President decided to join the European Union and the "money" Americans were manadated to use was Euros.

Wouldn't that make every American sub-servient to the whims of foreign bankers?????? Wouldn't we be giving up our economic sovereignty?

From Congressman Ron Pauls book:
"What is the one huge advantage paper money has over a Gold coin monetary system? Answer, history has shown us paper money is much more efficient at financing the purchase of "war" materials and has a direct correlation on who can bomb others." End of excerpt from book.

Many, many Americans who don't even believe in war, have been forced thru taxation to contribute to acts of war. Notice how the United Nations has not entered military conflicts in many years....WHY?? Answer, because military conflicts cost big money. Congressman Paul contends if Gold was used as a medium of exchange, governments ability to finance wars would be sharply curtailed.

This is one Goldheart who truly believes "WORLD PEACE" is even more important than Gold.

So, lets put the debate(Gold vs Paper) into a different context lets say a Gold standard helps to prevent wars and a paper standard promotes wars and war like activities. Now, which would be your choice?
Thanks for Reading....beesting.

Mr GreshamRandy#5335705/10/01; 15:05:40

That Otmar really is something, isn't he? If we were collecting "Famous Central Banker" trading cards, I'd wonder if I should buy his now, and put them away alongside my Paul Volcker All-Star Years collection. Actually, I wonder if our Fed should scout him for possible free-agent status in the coming years when his Euro contract runs out? Whaddya think? He sure can write econ well, huh?

Sounds to me like what he's saying is "We had to be vew-wy, vew-wy careful" starting the Euro. In other words, act like bankers (are supposed to act.)

When they saw how ingrained a habit of a currency name could be -- the "dollar" today is not anything in substance the same as a "dollar" of a century ago, but U.S. residents sentimentally treat it as the same via a lifetime's daily habituation of earning and spending -- they saw the utter risk they were taking in trying to supplant "Francs", "Marks" and other names in Europe, let alone replace "Dollars" in world usage. Currency tribalism a danger. Never, never fight a war on two fronts (now which country was it learned that one in most painful fashion?) Vew-wy vew-wy careful. Tiptoe.

And, you can read between his lines, the Keynesian era legerdemain by economists taught the public to consider "inflation" to mean only price increases, rather than currency overproduction. That set up the politicized expectation that an ECB must act in certain ways if prices went up faster or slower than expected, throwing off the currency maintenance function.

The above sets in motion the wise compromise and strategy to seek a deal with oil, and offer it a seat at the table and a piece of a future pie, in exchange for helping Euro maintain some of that price stability. (I still don't understand how that trade settlement designation helps so much.)

The competitive advantage of US enterprises has been described most sharply for us by Oro -- wonderful original work I have not encountered elsewhere -- and it seems Issing addresses some of that. Whether they move correctly to improve Europe remains to be seen, so it seems to me that FOA and Oro can differ on their expectations of success there, but only time will tell.

Meanwhile, my impression is that FOA gives much greater weight to the independence of Euro management as a currency from the overall European economic management, AND more importantly, to its freshness as a competitor to the dollar that is sufficient to jog gold out of gridlock.

FOA still sounds to me like more of a gold partisan than a Euro partisan. For our purposes here, it seems like the question is WHETHER, and HOW, the Euro will affect gold, rather than its long-term success as a fiat currency.

"When elephants battle, grass may get trampled, but they may also uncover some gold hidden in the bushes."

Tree in the ForestYukon#5335805/10/01; 15:19:27

You asked:
Re: FDR's E/O Consfiscating gold in 1933, can anyone show me where in our Constitution Congress has the power to give authority to the President to enact an Executive Order that has jurisdiction over the people of the fifty states?
Also: Can anyone tell me where in our Constitution it is stated that Congress can re-delegate a power to a private group that we have delegated to them?

Me: Perhaps you missed my post on the Commercial Credit System. The Constitution has been bypassed by clever lawyers and corrupt politicians. We now have a private monetary system enforced under law by our courts. See the dissertation I posted on April 22 13:42 #52341. It describes the legal underpinnings of the Fed and the IRS. It was written in 1984, author uncertain. In spite of all of the opposition to a central bank over the years, it is still with us.

Buena FeMarkets ultimately dictate rates#5335905/10/01; 15:35:42

Anyone notice that US 30yr T-Bonds got whacked today? I'd guess that those foreign CB reserve assets are starting to grow legs and crawl back up onto US shores........evolution or is it revolution!

Com'n boys manufacture those bids........can't let the market fall (fail).

R PowellOne and one half fer day#5336005/10/01; 15:48:57

I checked for the comex close price of gold and found it listed as unchanged. Under section 38, paragraph 5 of the Rules we find, "An indicator which has neither advanced nor declined during the day's trading shall be awared one half point for that time period (day)."
Thus POG gets one half, lease rates were down slightly and the XAU continued on it's upward journey. So the day's tally shows one point for the XAU and one half point for the POG. That makes a one and one half fer day.
Hopefully, cousin Chris will be posting good GATA news shortly and we'll get some press coverage. I read today's WSJ from cover to cover and found a total of one sentence on the Centaur mining company's demise and yesterday's rise in POG. One sentence on the commodities page.

Tree in the ForestORO#5336105/10/01; 15:49:53

Re: Ashanti's crowded trade
I understand. This is the problem faced by all the gold shorts, no? Once they're in a fast market, their crowded trades will only exacerbate the situation.

Re: Gold leasing at $35 to SDR 35
The continuation of the official price of gold by the government at $42-$48 is a confirmation of the second default in 1971 and (perhaps) the Jamaica Accords. IMHO it is also an indication that the current 30 year workout period may be rapidly approaching an end. It is almost as if they are acknowledging that we are currently in a "twilight zone" in which gold is priced against a failing currency. The banks know this all too well. Davidson and Rees-Mogg have alluded to the broadening schism between banks and government and we see this fully in the schizophrenic split in gold pricing methods. Debt payments made by the US internationally at $525/oz are in Federal Reserve Notes, a separate currency not connected to the offical US dollar. It is a currency printed by the US mint, but sold at 4 cents per note to a private banking cartel operating under a franchise from the US government. Thus 2 different prices in two different currencies. And the $50 dollar face value on the Gold Eagle is, mayhaps, a glimpse of the future.

Randy (@ The Tower)"Economic Sovereignty"#5336205/10/01; 15:58:39

A glorious-sounding term, to be sure.

But let's think about this "relinquishment" for a minute, beesting.

On the classic gold coin standard such as certain people say (or think) they want, there is no such degree of "sovereignty" is there? Well, sure, each nation could dictate the size and shape and design of the gold coins of the realm, but God forbid they ever tamper with the gold content once it has been decided. The "rules of the game" on such a gold standard are fixed, or heaven help them! Am I right? Not much degree of monetary sovereignty, is there?

Certain people (you know who they are) would likely be quick to build on this and point out how such freedoms of "monetary sovereignty" are merely tools of the derelict political and banking elite to "stick it to" the common man.

It therefore puzzles me when such strong proponents of a classic gold standard (with no sovereignty) will often cite this same relinquishment of national monetary sovereignty as an undesirable thing, a flaw within the eurosystem.

Oh, wait, now I get it. <grin> This is merely a transfer of many "sovereignties" over to Single Sovereign, thus marking the first big step toward a NEW world order. (Which is apparently repugnant because we all concede that TODAY'S "order" is worth keeping for all time, right? <sigh>)

You said, "Congressman Paul contends if Gold was used as a medium of exchange, governments ability to finance wars would be sharply curtailed."

Since you've brought the topics of war finance into focus, how many of our known revolutionary, civil, and world wars were prevented by the brackdrop of a gold or bimetallic standard? (Caution, it is a trick question.)

Congressman Paul notwithstanding, would you concede that where there's a political will, there's a way, under a monetary standard of any stripe? As individuals, you and I would be powerless to stop them in the name of gold, Mother, or Apple Pie.

A government might in fact succeed nicely at funding a war effort with paper so long as the paper retained the future-use confidence in the minds of the munitions suppliers. But just as surely, the effort might soon be reduced to futility as the government overindulges and finds itself trying to trade paper having only burn value for the war munitions it seeks. A freely floating price for gold unattached to the paper currency would much more quickly transmit the level of monetary imprudence than would occur if the inevitable dislocations of bank runs were first needed to broadcast the degree of printing excesses under a gold standard.

And while our government has had somewhat free-reign with fiat-paper indiscretions while gold's value has been hidden in a mountain of bullion-banking-style gold derivatives, you yourself have said, "Notice how the United Nations has not entered military conflicts in many years....WHY?? Answer, because military conflicts cost big money."

Are we to therefore conclude from your words that paper money is the more effective brake on wars of size? And yet in your concluding remark, you have indicated otherwise. Help me out here, beesting.

Mr Gresham(No Subject)#5336305/10/01; 16:03:05

Knallgold: That Derb post was a keeper; lots to figure out -- can anyone else explain it?

Invisible Hand: "I thought that when the reward of an asset diminished, its price decreased also." The traders must be infected with "Amerimania"? They will play until they run out of play money. At mania extremes, does the "invisible hand" come largely in the form of an empty wallet? (Later:) "Rationality restored" -- when I was young, I knew everything, too. Hmmmm -- I wonder what the attitudes toward wealth, savings, retirement among the Euro-Boomers, as opposed to US counterparts? Do they possess a "sandwich" mentality, with two generations of "socialism" overlaid upon centuries of wealth consciousness, soon to be flipped upon entering a new, and final, stage of life?

Galearis: Well-spoken. "Human beings are extraordinary in their capacity for denial ...That is why the majority applaud interest rate cuts." Which is to say that savings in interest-bearing promises to pay will be a bad proposition for years to come, especially now that a should-be-saving generation (Boomers) is mired in debt along with its younger cohorts, and will beg for release. Some will gain it, and then find that the inheritances that might have comfortably sustained them have been decimated on arrival by these same forces.

PH in LA: You've got a great way with questions. Columbo always gets 'em on the last turnaround one, "oh,... just one more question..." It will be fascinating to someday learn just what niche those two actually have in all this -- there is enough of the aficionado showing in FOA to suggest only loose attachment to an official structure, but I'm sure he'll come back with something about "The Patient Art of Growing a Tree." Or a Gold Advocate. You gotta admit it, man: The Zen thing works, makes us think, answers don't.

He works hard, makes few mistakes, earns credibility the old-fashioned way. I'll repeat: this [Forum with its All-Star team] is that post-grad degree I never stuck around for, and further, it's watching the Great Game for our time, and we're in on it as participating observers. That's about as good as it gets.

beesting: It heartens me to see "PEACE" mentioned once in awhile, and not merely as a casualty of "things as they be". Thanks!

Tree in the ForestSilver not a monetary metal#5336405/10/01; 16:04:37

The "silver is not a monetary metal" mantra is very much akin to the "gold is a barbarous relic" bullsh*t. IMHO they are both propaganda. I say again, if it is so, then why the heavy manipulation? Why not let it trade like aluminum? And why is our illustrious ex-president still making trips to China and South Africa as if he was still in power and attempting to control the price of silver and gold? Maybe he is still in power. Or represents those who are.
Randy (@ The Tower)Federal Reserve Governor Laurence Meyer to a banking conference in Chicago:#5336505/10/01; 16:12:58

"There seems to be a widespread feeling, which I share, that additional, or at least improved, efforts toward limiting moral hazard, enhancing market discipline, and lowering taxpayer liabilities should and can be made." On the topic of banks being seen as too-big-to-fail, Mr. Meyer wanted regulators to ensure as a safegurard against imprudent institutional conduct "that stockholders can lose all, that existing management can be replaced, that uninsured creditors can suffer losses, and that the institution can be wound down and possibly sold, in whole or in part, in an orderly way."

Reuters reports further that "Meyer's comments echoed those of Fed Chairman Alan Greenspan, who addressed the conference earlier on Thursday. Greenspan said reforming the financial safety net of deposit insurance and regulation should remain on policy-makers' agendas."

But nevermind me. These are just more comments from, as ORO puts it, "derelict monetary boobs such as occupy the higher reaches of central banking and politics."

Tree in the ForestCamel, PH in LA#5336605/10/01; 16:50:31

I ride to the defense of sir ORO. Not that he needs me to defend him. But I must say that sir ORO's "agenda" is, in fact, the Libertarian agenda, one which is near and dear to the hearts of many who post and lurk here. If the schism between governments and banks that Davidson and Rees-Mogg have postulated continues to widen, we may see a loss in the perceived value of both organizations.

Central bankers are not gods, nor are they pond scum. They are somewheres in between as are we all. I think they must cringe every time a bozo bureaucrat from Brussels open his mouth. This is no insult to Europeans; we have the same here in the US only we call them beltway bozo bureaucrats. The bankers would probably be happy just to be allowed to do their job without political interference.

Both government and banks are trying hard to prove their worth to us. As time passes and the internet and other technologies explode, the value of these two organizations diminishes. They are the blacksmiths of the modern era, slowly becoming an anachronism. The average sheeple doesn't see or understand this but it is true nevertheless.

If I store my wealth as gold, in the allocated vaults of an electronic gold bank and make my purchase with a plastic card and I earn my "interest" through an electronic broker via stocks, bonds etc., what do I need debt based reserve banks and their income taxes for? The banks know this and eagerly seek to become electronic brokers as their original business slowly fails.

And if the Fed and the Commercial Credit System derived from the Fed fail so that government can no longer bypass the constitution and hand out patronage, what do I need government for? So they can use fiat money to fund more wars in an effort to show us that we need them?

These changes happen so slowly that we are hard pressed to see them. Only the perspective of history will illuminate the momentous events and tortured travails of our time.

Randy (@ The Tower)More on monetary measurements (another mini-course in monetary policy for those who want it)#533675/10/01; 17:26:29

The broadest measure of the U.S. money supply, M3, does not include certain dollars that have flown outside the U.S system of banks located at home and abroad. When you hear people refering to eurodollars, it is these U.S. dollars abroad to which that term refers.

Hmmmmmm... I wonder if the ECB will refer to their owncounterpart currencies that are abroad as euroeuros. Or maybe dollareuros. Naaaaah...that's just stupid. Perhaps they will call them asiaeuros or amerieuros?

Well, whatever they decide to call them, the ECB is now able to MEASURE them (they couldn't before). And just as is done with our own Fed's exclusion of eurodollars from the M3 measurement, the ECB is able to identify the growing quantity of "foreign-euros" and thereby gain an adjusted, corresponding view of the M3 money supply within the currency union. I wanted to ensure you understood that so that the following comments make sense, and you can thereby draw your own conclusions regarding the implications to the dollar and its use-displacement as I alluded to in the earlier ECB rate cut press conference.

This follow-up is from the question and answer session as reporters posed questions to ECB president Duisenberg. Keep in mind from earlier, the ECB has within one pillar of montary policy strategy a reference value growth rate for M3 of 4.5%. Sorry this is so long, but once you **understand** rather than memorize a process, the working knowledge is yours forever. (That is, until the rules of the game are changed.)
Mr. President. If the money inflow from foreigners was large enough to distort M3 figures upward by 0.5 percentage point as you said, should that not have pushed the euro exchange rate a lot higher? Or, put the other way round, has the euro been more or less stable recently at its present rate of 88-89 cents because of the inflow of money from outside?

Now, there must be a misunderstanding here. I talked about the distortions which occurred, and which we have already known for months that they were there, but we were not certain of their amount or of their dynamic development, let me call it that. It concerns the holdings of mutual funds, issued by euro area MFIs, by non-euro area residents. In the past we were not able to distinguish them from resident holdings of the euro area. We now are. So, it is a refinement of our statistical apparatus. It has taken us a fairly long time. But we are now - and it is only a matter of a few days I am talking about - able to identify them. You will find a full description of the technical details I am talking about in next week's Monthly Bulletin, in which a special box will be devoted to this topic, which I hope will remove your misunderstanding. From now on we will publish the amount of this distortion every month.

...However, there is one significant thing, which is included in my Introductory Statement. We also had the impression when we finally got the results a few days ago - and to be quite honest this was also new for me - that the magnitude of this first distortion I mentioned, which on average is about 0.5 percentage point, has been, and is gradually, INCREASING over time. [emphasis added]

Why is it a distortion?

Because it gives it a distorted image of what the M3 figures really are. It is not a distortion in the sense that it was wrong. But we are now in a position to identify elements which should not belong in the definition of M3, which so far we were not able to identify, even though the quality of our statistics is very high indeed. Now we are able to identify them. And also because, as I said, it is not only the absolute magnitude, but also the change in size of this phenomenon - if I may call it that instead of a distortion - that has monetary policy implications. The dynamics of M3 corrected seem to be less that we thought earlier.

Question (translation): there any scientific way of explaining why two or four weeks ago, despite the fact that nothing much has changed since then, you seemed to assess things differently. I mean, four weeks ago we had the same situation as today, the same two weeks ago and the same today. Why did you change your assessment?


...Under the first pillar, we have this new phenomenon of correcting the, may I call it again, dynamics of the M3 developments. That is new. This makes us believes that, although before we thought we were approaching the reference value, now we know that, in fact, we have already been under the reference value of 41/2% for quite some time and increasingly so. So that, for example, is in itself new.

... if you take into account your new correction of M3, does it mean that actual M3 is only slightly over 4%?

If you take the precise correction: for the last figure we have, for example, the March figure for M3 - although that is only a one-month figure - as published was 5.0%. The correction for March can be put at 0.6. So that means that effectively we would be at 4.4. On average for the last three months, e.g. the figure for the period from January to March was 4.8 and the figure for the correction was 0.5. So that would take us to an average figure as related to the reference value of 4.3.

Bottom line: shed your own dollars for the safety of gold before the rest of the world rushes en masse to shed its holding of eurodollars. Such a flood will build upon itself and drastically impact the favorable exit exchange rate you can get still today.

JMBSECTOR @ G-E has mentioned our TREE in the FOREST #533685/10/01; 18:19:45

A very interesting post @ 18:06
Randy (@ The Tower)Tree in the Forest, what are your thoughts?#533695/10/01; 18:26:42

You state a course of action:
"If I store my wealth as gold, in the allocated vaults of an electronic gold bank and make my purchase with a plastic card and I earn my "interest" through an electronic broker via stocks, bonds etc., what do I need debt based reserve banks and their income taxes for?"

First, banks don't charge income taxes. I believe your beef is more properly directed at the bloated size of government on that account. Governments are truly too fat, as are taxes taken in exchange for the low quality of services being rendered.

Second, if you store your wealth as gold, within the framework of a standard banking system you have given me and all others the power to destroy the purchasing power of your savings. We could do this by borrowing similar gold to yours as a form of "checkbook gold" and spending it. The system inflates and then evolves upon the political will resulting from the inevitable dislocations that develop over time as economies cycle with the collective mood of it participants.

To be sure, let me say this. Right now we have a commericial fiat currency banking system, and we also have a bullion banking system. They each inflate and thus destroy a degree of the purchasing power of the accounting unit they employ. While there is no upward limit to which paper can be inflated, there is a practical limit to which banks can inflate the contract gold supply before runs commence on the banks by their depositors. Do you currently have a leased gold account earning interest (or deferring your storage fees)? If so, you will surely learn this lesson at a dire price in lost physical gold.

Because bullion banking has succeeded in destroying the current apparent value of all gold under its mountain of near-gold derivative contracts and accounts, now is a very prudent time to take your gold off the table, or to buy other people's gold deposits put out on lease as your civic duty to teach them a hard lesson.

I say, when the bullion banking system falls AGAIN (and it will) and the true value of gold is revealed in a moonshot, why should we tolerate the bullion banking system to be rebuilt so as to repeat the cycle of destruction? In the past, ORO has proposed a laundry list of new rules and regulations that he feels would keep the system stable. Methinks he is more concerned about preserving bullion banking as an ongoing venture than he is about securing personal property rights. Perhaps he is merely preserving a vested interest in this field of study. What say you, ORO? Must you press down upon the brow of mankind your crown of bullion banking thorns? Must you crucify our tangible savings upon your cross-referenced gold banking ledgers? (With apologies to WJB)

Tree, wouldn't you welcome the simple revocation/alteration of current facilitating legislation that allows our gold value to be jeopardized by banking corporations as we have seen throughout modern history? In my view, gold does NOT need the repayment obligations of loan contracts to give it value as claimed by the vocal gold standard shills for the bullion banking system. A wholly-owned savings asset as a safe haven from the fiat currency banking system shall be an adequate usage to give gold a very high and stable value. My view, and time will tell, but I am prepared today. Are you prepared for either outcome?

auspecWHEN?#533705/10/01; 18:42:54


When was the last summer you remember that had a strong gold rally? When was the last time your gold/resource stocks started multiplying in price before your eyes? When was the last time it was consistently difficult to get through to your resource broker on the phone? When did your stockpile/hoard last appreciate 10 to 20% per month? When did you last experience "greed" instead of "fear"? When did your spouse last say; "Wow, great job HONEY". When did your friends last ask for your personal investing advice? When did you last use the black ink much more than the red ink? When did you last have a 5X? 10X? 25X? When did you last SELL HIGH? When was the last time you had a capital gains "problem"? When did you last celebrate a MAJOR investment profit? When did you last feel like you couldn't miss? When did you last................???

Be ready, dammit!

auspecCorrected Link#533715/10/01; 18:44:39!

USAGOLDAuspec. . . .#533725/10/01; 19:13:12

Gotta love ya, good buddy.

Keep trying this link, but I can't understand it -- it doesn't work for some reason:!

I hereby nominate this url for CLHE-HoF (Hall of Fame) and looking for enobled seconds from this esteemed table. It is fitting. It begs to be done.

Gandalf, are you out there? Goldfly? Spot? Where is Spot anyway? By the way, Gandalf, loved the photo you sent me (of Spot). Perhaps, you can make it available to all???

Onward, fellow 'meisters.

RockgrabberWe are learning the hard way#533735/10/01; 19:20:26

My faith rests for now on words such as these.
Mr Jerimiah said what he new so well. He knew this, and did not even have near such insight as us. Here the words are..

"I well know, O Jehovah, that to earthling man his ways do not belong. It does not belong to man who is walking to direct his own step."

Tree in the ForestRandy-Comex gold#533745/10/01; 19:33:37

Hi Randy. You ask so many questions and here I am a man of few words!<grin> I shall try to answer your post but it will have to keep til tomorrow. Tonight we must address some interesting Comex action today. June gold has an enormous open interest of 73,278 contracts and furthermore it's up today about 6000 contracts. This is a time when traders are thinking about holding, selling or rolling over June contracts, not adding new postions! FND is May 31, 3 weeks away. People holding into June are frequently considering taking delivery. According to sector over at GE, someone is desperately trying to prop up Comex with additional gold and the word is getting out that there's a gold shortage. Uncle Henry is sitting in the tub and getting very nervous Randy! He's wondering if his gold is safe! It's 10 o'clock. Do you know where your gold is?
Hill Billy MitchellKnallgold @ # 53332 per Derb link#533755/10/01; 19:40:33

Most efficient cost of production per ounce of gold $250 per ounce since 1992 as per Derb link.

Can someone tell us what the most efficient cost of production of silver per ounce is today.




VanRipBill Fleckenstein's Column#533765/10/01; 19:54:54

For those interested in Bill Fleckenstein's observations regarding gold, here's today's take:

<God Save The Yellow Mastiff For those seeking alternative currency, it's been tough to find one. That's why we always seem to come back to gold. On that subject, next Tuesday is the BOE (Bank of England) gold sale. It's going to be very interesting to see how gold behaves behind that. Looking at the gold paper market at the Comex, it's clear that all the shorts have run out. Now some of the "black box types" are long the metal. In the past, whenever we have gotten to this juncture, gold has failed miserably. We've now got a little bit of froth in the market. If gold can do well after next week's BOE auction, that may indicate that things have in fact changed. Stay tuned.>

Peter AsherSecond to your motion, Michael!#533775/10/01; 20:02:38

Maybe it you should file it for a new Forum domain name $:-)
megatronGalearis/Tree /'Monetary metal'#533785/10/01; 20:25:00

Sorry for the sarcastic post. I am in deep with silver, baby! Got those palladium profits locked down from last year(paper, by the way!) and have burned an image of the 5 year chart in my retina's, to be superimposed over silver chart!
(10X over that period!) It's gonna be nuts!

ElwoodRandy (@ The Tower) (5/10/01; 18:26:42MT - msg#: 53369)#533795/10/01; 21:03:40

"I say, when the bullion banking system falls AGAIN (and it will) and the true value of gold is revealed in a moonshot, why should we tolerate the bullion banking system to be rebuilt so as to repeat the cycle of destruction? In the past, ORO has proposed a laundry list of new rules and regulations that he feels would keep the system stable. "

Oh? Randy, could you reference a post where this occurred? I normally read this board every day, and I seemed to have missed that one.

I love chucking water balloons just as much as the next guy, but this ain't that.

Oro, your reasoning is sound, but as long as there are "large" traders willing to accept the fiat in trade for their real goods then there will be an exchange value for the fiat. Surely you realize that these large traders understand the fiat just as you do, right?

"There would be an inevitable tendency for the less marketable of the series of goods used as media of exchange to be one by one rejected until at last only a single commodity remained, which was universally employed as a medium of exchange; in a word, money."
From Ludwig von Mises, Theory of Money and Credit, pp.32-33.

"Just as in nature there is a great variety of skills and resources, so there is a variety in the marketability of goods. Some goods are more widely demanded than others, some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability. It is clear that in every society, the most marketable goods will be gradually selected as the media for exchange. As they are more and more selected as media, the demand for them increases because of this use, and so they become even more marketable. The result is a reinforcing spiral: more marketability causes wider use as a medium which causes more marketability, etc. Eventually, one or two commodities are used as general media-in almost all exchanges-and
these are called money."
Murray N. Rothbard, What Has Government Done to Our Money?

Oro, taking into account man's willingness and ability to use paper substitutes, what is the more marketable item today: gold or oil?

Do you see that the world is under *two* bubbles, not just the one created by the inflation of the fiat dollar? There's another *huge* bubble. It's the one upon which the entire production structure of the world has been inflated. Cheap oil is what underpins it. (pun intended)

Could it be that it's not the governments that are foisting these fiats upon the world, but the world's suppliers of oil who are insisting on the fiat in order to keep gold affordable? Can we think of it as "printing" oil?

Thanks for your thoughts,

Black BladeNatural Gas and Oil Inventory Data#533805/10/01; 21:43:42

Camel earlier today asked for some injection data, this is the best I can do on short notice - Week ended April 27

Crude oil prices have fallen back a bit as expected during the usual Spring build up of oil stocks. US crude inventories rose 8.3 million and 6.3 million barrels during the week ended April 27, vs. the previous week, depending on whose numbers one follows. The American Petroleum Institute and the Energy Department never agree on the data. Either way, oil inventories are up about 7% over last years levels. The problem isn't so much oil but how to process enough of it. Refineries are running flat out and many are due for Spring maintenance.

June Natural Gas fell as well due to a rise in inventories bigger than expected. This also tends to occur in the Spring, yet this large increase in NG inventories was unexpected. The American Gas Association (AGA) said that NG inventories as of the week ended April 27, rose by 102 billion cubic feet to a total of 850 billion cubic feet. The AGA expected an average 85 billion to 90 billion cubic feet of natural gas to be added to inventories. In fact this helped to crush NG prices this week as a year ago NG inventories rose only 32 billion cubic feet. US stocks are still 30 percent below the five year average during the same period.

Exploration and production of NG proceeds at a frantic pace. If supplies can be sufficiently built up before the big draw-down this Summer, then the question is whether there will be enough for the huge draw-down for the Winter heating period. Remember that 70% of US homes are heated by NG - not heating oil. Simmons and Co. Intl. Had done research where insufficient NG will result in numerous deaths (in the thousands) during a Winter cold spell. This obviously would impact the elderly and very young the hardest. The Summer draw-down will occur as the nation fires up the air conditioning where an additional 20% of electricity is consumed. It still looks like an ugly prospect with eventual higher NG and utility rates hitting companies earnings and consumers pocketbooks. The days of the phoney baloney market rallies are numbered. It would be prudent to build up those golden lifeboats for smooth sailing.

- Black Blade

Black BladeFewer Americans are saving for retirement amid falling market - Fewer are confident they'll have the funds they need#533815/10/01; 21:59:57



May 10 — The drubbing in the stock market in the past year, as well as growing concerns about the future cost of medical and long-term care, are taking their toll on workers and their preparations for retirement. A SURVEY to be released Thursday by the Employee Benefit Research Institute and others finds that fewer Americans are saving for retirement, fewer are confident that they will have sufficient funds to live comfortably in retirement, and fewer have tried to calculate how much money they need to save for later life.

Black Blade: With fewer funds flowing into those retirement funds, a little more air is escaping from the bubble. Wonder how many have portfolio insurance for what they already have invested? Consider that Social Insecurity won't be there for most of today's working Americans. Already there are proposals to extend the retirement age a few years. It is the old carrot and stick game. As many approach the carrot - put it just a little further out of reach. Good scam though!

Black BladeGold Market Report#533825/10/01; 22:11:11

Gold market report.
Black BladeSilver Market Report#533835/10/01; 22:12:35

Silver market report
Black BladePGM Market Report#533845/10/01; 22:14:01

PGM market report
Just waking up@ Randy & FOA#533855/10/01; 22:19:43

Dear Randy and FOA,

I have been reading your arguements against a classical gold standard and for a dual system of fiat and "Freegold" Your main argurment is that because of credit expansion in a gold standard, the purchasing power of physical gold gets diluted and deprives us of a safe place to store wealth. Yet, it seems to me, that this will happen in your system also. Will not futures, options, forward sales and leasing develop under your envisioned system? Can you outlaw all these? What will be the cost? Will not some other form of paper derivatives based on gold develop?

You say we are stuck with fiat for the rest of our lives, I agree (it would just about take divine intervention to change that!). But it would be almost as hard to put an end to paper gold. It would take an historic, unified, concerted effort of all the worldwide powers-that-be to put an end to paper gold. I believe we will be living with paper gold the rest of our lives also. Why would the-powers-that-be want to give us a refuge from their fiat through which they can rob us?

You say the paper gold market will fail. What then? Just as with the silver debacle of 1980, there will be bankruptcies, defaults and lawsuits, but the system will go on. There may be a few rule changes to calm everybody down, and then it will be back to "business as usual".

In response to your question about American wars and fiat: the Revolutionary War was financed with fiat. Hence the saying, "not worth a continental" and the clause in our constitution "forbiding the states to make anything but gold and silver, legal tender in payment of debt" Both the North and South financed the Civil War with fiat. America was the only combatant in WW1 to manage to retain their gold standard. One of the first things Hitler did when he came to power was institute the death penalty for gold possesion. A couple years later FDR confiscated our gold. Within a decade the whole world was at war.

Fiat doesn't cause wars, human nature does, but fiat facilitates them.

Kind regards,


Black BladeCooler weather gives Calif. a break from blackouts#5338605/10/01; 22:31:42


SAN FRANCISCO, May 10 (Reuters) - Cooler weather lifted some of the load from California's straining power grid on Thursday, sharply reducing the likelihood of rolling blackouts, state energy officials said. Though blackouts look unlikely over the next few days, the ISO warns May remains a tough month, with many power plants shut for maintenance needed to put them in top shape for the hot summer months ahead.

Black Blade: Now that Summer is about to start, that little bit of confidence and very short repreive will soon evaporate with the return of normal higher summertime temperatures. Actually, I have eaten roasted Grasshoppers in SE Asia. OK, they were actually crickets, but the same thing really. When one is a guest, it is preferable not to offend the host - so "yummy these crickets are good." We are about to see some roasting in California soon and though I don't intend to eat Californian Grasshoppers, it too will be quite an "interesting" experience.

These power failures will take a toll on the World's sixth largest economy and the shockwaves will ripple throughout the US economy (and beyond). A little gold could go a long way.

Gandalf the WhiteRight behind you and Peter of the House of Asher, MK !#5338705/10/01; 22:31:55!

USAGOLD (5/10/01; 19:13:12MT - msg#: 53372)
Auspec. . . . Gotta love ya, good buddy.
I hereby nominate this url for CLHE-HoF (Hall of Fame) and looking for enobled seconds from this esteemed table. It is fitting. It begs to be done.
I too second this for the CLHE-HoF !
PS MK --- Calling to SPOT right now.

ORORandy - my regs#5338805/10/01; 22:38:17

Thanks Elwood for pointing it out.

My rules are:
1. contract with a bank be enforced.
2. bank discloses what it does till the bank official is satisfied that the depositor knows what portion of his gold will be kept on reserve.

These are common law rules that predate all existing governments with the possible exception of Switzerland. (The Brits changed their system).

The one with the legalisms and twisted law are you, FOA, and all who support the ECB + hobbled gold concept. It is they who need to impose restrictions on what people want to do with their gold. The protocols FOA imagines are simple will turn out to be devilishly complex because a debt is simply a type of future delivery contract where the deliverable is a monetary unit. Putting an order for gold coin at USAGOLD obliges this establishment to ship gold coin within a certain time of receiving my tradable - most likely to be a dollar denominated instrument of some sort.

A comment on oil as money sits in one of my old posts to FOA. It is a commodity with a falling marginal utility, great bulk, and not at all fit to be a money. The only form in which it can be used as money is as oil notes, redeemable in oil within some time of demand and issued by oil companies, bankers, speculators, etc. and probably organized in mutual fund form to aggregate what is a variety of different oil grades. Even then, having oil as a money leaves you with only those extremely large units for delivery. Oil reserves in the ground would be traded in this form, but what do you do when oil obtains a monetary premium - a value above its value as the input for distilation? Why, you have reconstituted coal oil and shale oil coming up in the wings with $40-50 production costs, and tar sands profitable already, and it would replace oil in actual use because oil is too precious in the ground where it can be used as money. In order to bring oil back into its relative pricing with competing products (for use as the distilate precursor) you would need bankers and oil companies to expand the oil note supply to the point where the monetary premium was diluted enough so that someone could use it for the purpose that gave it value in the first place. The dilution would bring about the familliar condition of there being waaaay more notes than there is known oil. As oil depletes from use, the leveraged oil note issuers would scramble to find more oil, and would eventually succumb to bankruptcy as there would be none that could be extracted at a cost lower than extraction from competing products. Oil notes would then become worthless.

Buena FeThe Spin#5338905/10/01; 22:51:13

05/10 23:29
Euro Poised to End Worst Week in a Month After ECB Cuts Rates
By Miki Anzai and Mari Murayama

Tokyo, May 11 (Bloomberg) -- The euro was poised to finish its biggest weekly loss in a month, as traders said an interest- rate cut by the European Central Bank yesterday was so unexpected that it hurt the bank's credibility as an inflation fighter..............


Black BladeMarket watch: Energy futures prices rise with gasoline market concerns #5339005/10/01; 22:51:20


HOUSTON, May 10 -- Energy future prices rallied Wednesday on international markets as traders reacted to a smaller-than-expected build in US gasoline stocks and reports of refinery problems in the Western Hemisphere. Wednesday's market reacted to that, along with reports of problems at Sunoco's Point Breeze refinery in Philadelphia, and speculations that floods and power outage would disrupt production at two Venezuelan refineries.

Black Blade: The supply chain is somewhat in a precarious position where almost any miss-step could push energy prices higher. A new refinery problem could pressure prices because refinery utilization rates are maxed out and reformulated grades must be ready to be in place prior to the Summer months (especially in California and the Mid-West where prices are expected to be very high regardless). Transportation of goods will be passed on to the consumer and in turn fuel inflation.

beestingPaper Money Finances War!#5339105/10/01; 23:40:01

Hi Sir Randy # 53362, thanks for responding to my post. I'll try to give a little more
input to some of the points you have raised:

Randy quoting beesting:
<< you yourself have said, "Notice how the United Nations has not entered
military conflicts in many years....WHY?? Answer, because military conflicts
cost big money.">>

beesting expansion of original thought:
It's my understanding that Japan and Germany after WWII had new
Constitutions drawn up forbidding military action on foreign soil.( Wouldn't
it be nice if other nations made amendments to their Constitutions forbidding
military action on foreign soil?) Most of the other members of the United
Nations are also members in good standing with the IMF/World Bank who
have many of them owing excessive amounts of foreign(paper) debt, IMHO
in order to not accumulate any more debt most of these nations will only
enter conflicts on their own soil.

<<Are we to therefore conclude from your words that paper money is the
more effective brake on wars of size?>>
Quite the contrary Sir Randy, here are some of Ron Pauls words,I agree with
his writings, begin quote:
"Although it did not become apparent for decades, the Federal Reserve
Act(1913) made possible the massive inflation necessary to finance our tragic
entrance into WWI....etc etc. And(I had to read this twice) If a country
inflates((Prints excessive paper money using Gold as collateral)) under a
GOLD standard, Gold flows out of the treasury , hamstringing the
government."*** Since a Gold standard enables the average person to
restrain the government's attempts to inflate, control the economy,run up
deficits, and fight senseless wars, the central planners had to eliminate this
fundamental American freedom to own Gold....etc.etc End of Ron Paul
quote.(talking about the Gold reserve act of 1934 which has since been

***Lets see if we can elaborate on Congressman Pauls words a little bit.
I take this statement to mean, if every American is using Gold in everyday
transactions, the Department of the Treasury would be forced to issue "paper
money,backed by nothing, as they did in the Civil war(Greenbacks) and wars
are supposed to be approved by congress and the senate.....And We the
People.(((My very favorite bumper sticker from the Viet Nam
days.....""What Would Happen if Governments Declared War, and Nobody
Showed Up""?))) Here is what Congressman Paul said about the greenback,

During the greenback paper money inflation of the Civil War, prices rose
183% while wages went up only 54%. During WWI inflation, prices rose
135% and wages increased only 88%.***When greenback-denominated
prices rose during the Civil War, GOLD PRICES(Gold still circulating,
especially in California) DIDN'T GO UP, so it was obvious to everyone
what the cause of inflation was(PAPER MONEY!)...And this,,,, To finance
our Revolutionary War, the Continental Congress issued paper money in
great quantities. Over a period of about 4 and 1/2 years , the Continental
currency fell from a value of --One paper dollar per one Gold Dollar, to
about 1000 to one." End quote.

beesting again:
Lets see if we can tie together another event concerning Gold and Wars,,,Oh
yes, wasn't the U.S. 1971 Gold default right in the middle of the Viet Nam
War? Coincidence, I think not. Even with paper dollars circulating
worldwide in ever increasing amounts, the proud U.S. Treasury defaulted on Gold.
(International settlements were still made in Gold) Congressman Paul says, if
the U.S. people were still using Gold in every day trade as mandated in the
Constitution, the Viet Nam War may never have been financed by the U.S.
taxpayer.... The United States(Read Taxpayer) has Never Been out of Debt
Since the Civil War!!!

Randy again:
<<And yet in your concluding remark, you have indicated otherwise.
Help me out here, beesting.>>

beesting concluding remark from previous post today:
<<So, lets put the debate(Gold vs Paper) into a different context lets say a
Gold standard helps to prevent wars and a paper standard promotes wars and
war like activities. Now, which would be your choice?>>

beesting final comment:
It seems obvious to me from the above examples, a paper money monetary
system has been used in the past to finance all modern wars, sometimes using
Gold as collateral to print paper money.However I think Congressman Paul
makes a very good case when he states Americans on a Gold coin standard
would balk at financing Wars on foreign soil, because Gold would come out
of taxpayers pockets instead of paper. If you think people try to find tax
loopholes now, using paper money, imagine what it would be like if we did
use Gold coins for money and the majority of taxpayers understood what is
talked about on this forum. By the way, those early U.S. Wars were fought at
a time when there was no individual income tax, even the WWII individual
taxes were very low.
Thanks for to bed....beesting.

Black BladeRecession Rolls, but does not Envelop, U.S. #5339205/11/01; 00:05:11


The U.S. economy avoided recession through the first quarter due to its industrial and regional diversity. Recession is certainly evident, but it is rolling across different industries and regions rather than hitting them all at once.

Black Blade: Rolling recession. Interesting article with nice US map. The "Big Picture" is that ultimately we are all headed in the same direction.

Black BladeConfidence Dilemma - API or EIA? #533935/11/01; 00:25:47

The problem with the API and EIA petroleum inventory data. These data are more recent than that I posted a couple of hours ago. But this data also demonstrates the difficulty of interpretation as here is an industry research group American Petroleum Institute (API), and a government research group within the Department of Energy, the Energy Information Administration (EIA).

The API inventory numbers show a downward movement in crude oil stocks during the week ending May 4. The EIA however reported an increase. According to the API, crude oil inventories decreased 0.3 million barrels. The EIA reported an increase of 0.6 million barrels. Estimates of distillate stocks decreased this week according to the API but increased according to the EIA. The API reported a decrease of 1.0 million barrels, while the EIA reported an increase of 0.3 million barrels. Inventories of motor gasoline increased by 1.1 million barrels according to the API, while the EIA reported an increase of 1.2 million barrels in inventory. Reformulated gasoline stocks increased by 1.2 million barrels according to the EIA. The gasoline data are closely watched for the main summer driving season. Refinery utilization decreased by 0.5 percentage points to 98.3% according to the EIA, indicating that refiners continue to operate at full capacity.

Refineries running at full capacity, where any disruption including the probability of breakdowns and outages will severely crimp supply. The low gasoline inventories are still about 3.5% below their level one year ago, any refinery outage will obviously result in regional price spikes. Refiners can not substitute one blend of gasoline due to varying regional EPA requirements. This is especially true of California and the Midwest. It's not easy being green, but it sure is a whole lot more expensive.

- Black Blade

ORORandy - economic sovereignty#533945/11/01; 00:44:59

The point of the matter is not that one country has less sovereignty with gold, but that ALL countries share the same lack of economic sovereignty. This makes for governments large and small having to serve the market's preferences. Actions of the people all around the globe who have something to sell something to buy dictate interest rates, prices, etc. - because people trade, not governments and not countries.

Free Gold Money puts the individual on a par with his government. Government must pay the market interest rate just like you do.

Fiat - particularly the fiat reserve system created in Bretton Woods, and who's legacy we live with - creates a differential between different size countries. The largest economic unit will have the greatest volumes of bilateral trade, thus in order to avoid many currency conversions, many industries and banks among the trade partners will maintain balances in the large country's currency, while the large country needs only little of its multiple trade partner's currencies on hand, because everyone has the large country's currency. Furthermore, the traders with people of the large country will want to denominate output supply and input provision contracts in the same currency. Thus all countries end up trading predominantly in the currency of the largest economy even for the bulk of trade among themselves. It is the liquidity preference effect.

The large country will manage its currency for its domestic purposes, and thus interest rates and money supply growth rates set in the large country dictate what happens in the smaller countries, as rates fall to the floor because of a slow down in the large country, the small ones may skyrocket into hyperactivity. As the large country tightens credit in order to avoid emerging price inflation from escalating, the small countries undergo a fall off a cliff recession. That is what economic sovereignty is about.

In the international gold standard there was no such condition, each economy's effects were proportional to their economies as a whole, not only the internationaly tradeable portion that can earn foreign exchange.

The picture is not that one sided, however, as international trade has grown in size 10 fold in Asia over 20 years to over $1 trillion each way ($2 tril together) and with the rest of the world's trade having grown to a total approaching the size of US GDP, the pull of the aggregate of the smaller countries had grown larger, and their deflationary conditions clear big chunks of the monetary base out of the US through our trade deficit, they are also pulling lower short term interest rates (Eurodollar rates). Now we have a roughly equal pull of the US economy and the rest of the world. Thus the Fed's interest rate games will have less of an effect abroad than before.

A sharing of the reserve function with Europe breaks with the liquidity preference rule, thus one of them must remain on the sidelines. But both the US and Europe are too small to provide the world with a stable reserve system based on internal targeting of monetary policy.

SHIFTYYeah right this should do it.#533955/11/01; 02:05:02

INTERNATIONAL ECONOMY: Gold to play on warm image as the 'new cool'
Financial Times; May 11, 2001

The World Gold Council yesterday set out to give gold's lacklustre image a makeover by launching a Dollars 55m (Pounds 38m) marketing campaign that will play on the metal's "warmth".

A new logo called a gold mark will include a circular motif intended to symbolise the sun, and advertisements for the metal will end with the slogan "glow with gold".

Branding experts hope to reverse gold's down-market drift by convincing the fashion-conscious that the cold, detached minimalism of recent years is out and that warm, sensuous richness is back in.

Advertisements will build on the idea that "warm" is the "new cool", contrasting the cold, stark, heroin-chic images of recent years with what the gold council claims is today's desire for a more positive and meaningful lifestyle.

Haruko Fukuda, the gold council's chief executive, said people's values today had more to do with the joy and happiness derived from human experiences than with owning material things, "so we are appealing to the emotional and spiritual val ues associated with gold".

The council, which represents gold producers, is launching the campaign in the hope of increasing demand for the metal and lifting the price from the trough into which it has sunk.

From a peak of Dollars 835 a troy ounce in 1980, the price has been well under Dollars 300 an ounce for more than a year.

Central banks have contributed to the decline by off-loading some of their holdings on to the market. But the price has also been hit by a changes in fashion.

In the trend-setting west, cool, understated platinum has become the metal of choice, while gold is often portrayed as ostentatious and vulgar.

Ms Fukuda said about 80 per cent of the world's gold went into jewellery, so this would be the focus of the marketing effort. Council members have agreed to fund the Dollars 55m campaign by doubling their membership fees.

The council has hired Wolff Olins as its brand consultant, Bartle Bogle Hegarty as its advertising agency and Edelman Public Relations Worldwide as its PR consultant.

Some advertisements will start running in the US, the UK and Italy next month, but the campaign will intensify in the third and fourth quarters of this year.

NetkingClinton media "red out"#533965/11/01; 02:46:40

Excerpt: "...Strains" in the US-China relationship have prompted the Chinese leadership to throw a news blackout over Clinton's visit with no coverage of Clinton's arrival in the country in the Chinese media.

Few people on Shanghai's streets knew the former US president had touched down on the mainland.

Clinton's talks with President Jiang Zemin in Hong Kong Wednesday were also played down in the Chinese media, which carried no pictures of the event and only a few lines saying the meeting had taken place..."
The "stress" really began with the revelation that the Chinese had breached security at the Los Alamos nuclear weapons plant and the fact that the Chinese had funneled money into the democratic presidnetial campaign in 1996 and it hasn't stopped since. To date China has nearly 300 missiles capable of threatening Taiwan, I say sell 'em the Aegis class destroyers.

NetkingGreenspan in . . . .Charge!#5339705/11/01; 03:42:55

Beyond a shadow of a doubt, that the Fed will cut interest rates on, or before, the FOMC meeting on May 15. Perhaps more importantly, the jobs report hardened the belief that this economy will soon turn around because the historical parallels are now backing the bull. As an example, on the front page of Bloomberg on Friday an article read "Stocks in U.S. Gain as Jobs Report Fails to Dent Profit Optimism." Within the article read:

"During the last recession, the economy bottomed in the fourth quarter of 1990, when U.S. gross domestic product fell by 3.2 percent. Unemployment didn't peak until June 1992, when the jobless rate touched 7.8 percent.
In the 18 months from the bottom of the recession through the peak of unemployment, the S&P 500 posted an annualized return of 19 percent."

It is these types of historical accounts that fuel the popular adages such as 'don't fight the Fed', 'buy the dips', and 'hold for the long term'. In sum, the belief that the 'worst is over' was present last Monday, and remained the overriding theme until Friday. As for the Bloomberg perspective, the comparisons to today are chosen carefully.

Saxulum^Black Blade msg# 53393 Confidence Dilemma - API or EIA?#5339805/11/01; 04:03:30

Black Blade msg# 53393
Confidence Dilemma - API or EIA?

In the Netherlands gasoline prices at the pump have just reached an all time high.
One of the reasons according to Royal Dutch Shell, was massive GASOLINE buying from the US.
So it seems US is using the EU refinery capacity as well, driving our already heavy taxed prices through the roof. Great help to keep Euro inflation (and thus interest) high... .?!?

Cheers and Thanks for all yr great input

Hill Billy MitchellSHIFTY @ # 53395#5339905/11/01; 05:26:28

Sir Shifty,

Thanks for the excerpt (warning)

A new logo called a gold mark will include a circular motif intended to symbolise the sun, and advertisements for the metal will end with the slogan "glow with gold"..."so we are appealing to the emotional and spiritual values associated with gold", says WGC chief executive.

So their idea of spiritual values has to do with is sun worship. If the coin bears the slogan, "In God We Trust", we can be sure that the trusted god to which they alude is Isis.

Hate is love, war is peace, wrong is right, gold is a barbarous relic, silver is plentiful, polytheism is monotheism.

I just couldn't remain silent on this one. No apology for this outburst.


Hill Billy MitchellORO @ # 53394#5340005/11/01; 06:13:04


It is good to see a little bit of "umph" in your posts. I am not interested in "who", is right or wrong, but I am certainly interest in the opinions and positions of those who put some conviction into their efforts. As for you and TC and FOA, I agree with all three of you some of the time, some of you some of the time, but I would be a fool to agree with any of you all the time. These "upper level disturbances", have been healthy for this forum. Let us all take off the gloves, show some conviction, be willing to make a mistake and admit it later. Let us learn.

May I comment on a portion of your post?


Begin quote

"Fiat - particularly the fiat reserve system created in Bretton Woods, and who's legacy we live with - creates a differential between different size countries. The largest economic unit will have the greatest volumes of bilateral trade, thus in order to avoid many currency conversions, many industries and banks among the trade partners will maintain balances in the large country's currency, while the large country needs only little of its multiple trade partner's currencies on hand, because everyone has the large country's currency. Furthermore, the traders with people of the large country will want to denominate output supply and input provision contracts in the same currency. Thus all countries end up trading predominantly in the currency of the largest economy even for the bulk of trade among themselves. It is the liquidity preference effect."

End of quote

It seems to me that the time will come and is very near when "Mr. Gresham's" law will be enforced. A law that cannot be enforced is not a law. If God made the law it will be enforced. If God did not make the law then our wonderful friend on the forum will have to change his handle.

I know you are busy with your special project and that you are plowing new acreage for us (hard work), but could you please comment upon this, the prospect of the final rejection of the USD due to its bad money nature. I feel that repatriation is just months away and two to three years on the outside. What is called "Big Float" will float no more, as the world knows it.

One other question, please. I have a strong conviction that shared reserve status will not work and smooth transition from the USD to the Euro is not in the cards. Could you please comment on this, maybe not just now but at some point in the future when your gloves are off.

Very respectfully,


Cavan ManECB Rate Cut#5340105/11/01; 06:37:47

I believe their miserly and token .25 had more to do with the situation in Britain (.25 also) where Mr. Blair has called for an early election and is intending upon a full court press to engage the Euro.

Also, I'd guess there will be another FED cut next week. I think Mr. Greenspan's message was "we're not done yet and we need your support". Even as he walks the Trail with us and understands the endgame, he points out to his companions (along the Trail) the necessity of gradual transition so as to keep the US from experiencing too much pain. A wounded US economy will soon recover but there is no intention to inflict mortal damage. That's their game.

Cavan ManTrail Guide#5340205/11/01; 06:39:06

Sir: "Alan" walks the trail with US, yes?
LeighMr. Greenspan on the Gold Trail#5340305/11/01; 06:43:19

Gee, Cavan Man, I must have MISSED seeing Mr. Greenspan walking the Gold Trail with us! Silly me! Here, let me ask Reg Howe if he's spotted Mr. Greenspan on the Gold Trail. He MUST be in disguise.
Mr GreshamBill Murphy text#5340405/11/01; 07:56:29

now, off to read it...
OROGresham - Randy - countertrends#5340505/11/01; 08:16:02

The EU contains counter purposes and counter trends, more so than other organizations, because of the complex mix of traditions and competing political forces. The ECB is a technocratic organization which includes some relatively good economists that seem to be Monetarists and Fisherian classics (what little I know of both schools seems to indicate this). The EU governments are much less responsive to their people than the state houses in the US. The plus side of that is in not pursuing wrong headed policies in the momentary heat of public opinion. The negative side is that the governments of Europe are more attune to their own wishes and fashions than to the people.

The ECB stands in a counter trend to the far left Brussels bureacracy and the member governments. The member governments are acting through the EU system to eliminate competition among themselves while the ECB and EMU is pressing them into the practicalities of competition through lower taxes and more lax regulation, particularly of employment rules and government controlled companies. So far there is no clarity as to who is gaining the upper hand.

Issing does dis the Keynesian approach of attempting a fine tuning of the economy through monetary and fiscal policy, recognizing that even if it were possible it would have never been implemented correctly because of the uncertain nature of the future which the policy makers are to consider. He warns against "political cartels" yet that was the political driving force for forming the EU. Will he ever see his jurisdictional competition actually come about? I think so, but only after cartelization attempts fail because of the time factors: governments must react more quickly to the competitive pressures, more quickly than cartel negotiations can proceed.

My jury is out on which direction we will see prevail.

Issing talks of the mid term purchasing power stability of the Euro as the target of ECB policy. Nice target, but will they be able to do so without economic convulsions? There is no reason to believe its particular targets for CPI and monetary growth are achievable with a consistent "mid term" economic growth. Overall debt to cash flow levels in the EU are far lower than they are in the US, but on the other hand, much US household debt is not intended as borrowing so much as it is a hedge against the dollar.

Some of you may remember my references to "Triffin's dilemma" where the use of a national fiat currency for the reserve functions causes its issuer to fall into perpetual trade deficits. His observation holds for Europe and the Euro as it most obviously did for the US and the dollar in Triffin's time (he wrote of the experience of the 50s). This same observation was repeated often, and loudly, by Rueff and de Gaulle, who talked of it as "deficits without tears". If Europe is to see its currency used as a reserve, displacing some of the dollar's function, then it must experience the same effect of growing trade deficits or let the Euro fall to the level at which the trade deficit disappears. In order for the Euro to grow in international circulation outside its home, expatriate euro must be created (borrowed into existence) abroad and used to buy EU goods, which would raise internal EU prices. If the new borrowing goes to finance purchases from elsewhere, then the Euro would decline in exchange value and could only recover if reabsorbed through subsequent exports out of the EU. During the necessary preliminary period while Euro reserves grow, the Euro would suffer in exchange value as foreign debtors print up fresh Euro which still have no substantial external foreign debt market to absorb supply.

The only way to advance Euro ownership abroad without facing Triffin's dilemma is to have a neutral cash component, an asset -- like gold - which the ECB can buy from its holders around the world in return for printing Euros. Euros would then be an international currency without a geographic and political home. But here is the rub; why would anyone hold Euros rather than the gold itself, and use the gold for trade (including debt and contract denomination)? FOA has put out the answer Eurocratia and Islamic anti-usurers came up with (clear evidence of the presence of monetary boobs in their midst, Randy) which is to try and make debt and contract denominated in gold impossible by government fiat. Meaning that they have the gall to call a system of restrictions on people's judgments "freegold". How is that for dialectics? The concept is sheer intellectual fraud.

EconoclastBeesting--"...and the majority of taxpayers understood #5340605/11/01; 08:36:00

what is talked about on this forum..."

When I read the above quote, I was hit with a pain of sadness, because a century ago, a large percentage of Americans DID have a much more intimate knowledge of gold and how their monetary system worked. The FED fiat, and gaining its acceptance, was the grand experiment (and a huge success) in the dumbing down of the population.
I sincerely hope for all our descendants sake, that the bull era in government is coming to an end as ORO says.
A major rant about my government is trying to escape my fingers. I'll hit the submit button instead.

Mr GreshamOro, HBM#5340705/11/01; 08:48:45

Thanks -- you make it worth showing up for "work" in the morning.

Oro -- So your take admits of tension between EU and ECB goals and powers...only TWT.

"Overall debt to cash flow levels in the EU are far lower than they are in the US, but on the other hand, much US household debt is not intended as borrowing so much as it is a hedge against the dollar."

Good insight; Americans don't even know they're doing it, do they? Debtors and creditors jockeying for advantage, even in their post-NAZ-bubble "sleep". Euro debt will go through the same growth cycle, until it uses up its advantage. I don't think FOA is advertising any everlasting principles here, just relative present advantages (even allowing for some of the weaknesses you point out?).

Re: Triffin (always a good mental warm-up to bring that one back into discussion). It occurs to me that dollar support from Europe (and Asia) might reflect internal power holders in the export industries holding sway over their CBs policies, to support their own earnings over the standard of living of their countrymen. Mercantilism forever, no? Their focused political power outweighs the dispersed influence of the masses. So when does that dam break, if ever? Your take?

HBM -- it seems that Gresham's Law, to the small extent I understand it, HAS been working these past 78 years. Dollar is out there circulating, gold in hiding, due to official governmental decree or action. In freer markets, they would find more proper levels of exchange, and would then circulate more interchangeably. I'm sure Oro could add more dimension to this half-formed thought of mine.

BTW, my handle was formed when I was imagining Y2k bank runs, and wondering if the over-printed $100 bills would trade at a discount once people had drained their accounts, while relatively sparse $1 bills would fetch a premium. Had a long way to go then as a gold newbie...

GoldflyLeigh...#5340805/11/01; 08:50:06


I think that's him over there, disguised as a bear...

or is it a dog?

Seeker of the GrailBOE Auction?#5340905/11/01; 09:03:28

Dear Sirs,

Would anyone be able to tell me when the date of the next BOE auction please and thanks.

May your chalice overflow,


OROGresham, HBM - Gresham's law#5341005/11/01; 09:21:44

For the umpteenth time, here it is in a nut shell:

1. Good money drives out the bad.
Good money is found circulating in daily trade. Denominating contract and debt.
Only small amounts are hoarded.

2. When trading at par, bad money drives out the good till par is broken.
Bad money circulates in daily trade and no good money is seen changing hands in the market place.
Bad money denominates most debt and contract. (My own addition: but for the portion of future income that is to be saved and not re-invested or spent, which is contracted into good money)
Most of the good money is hoarded.

The imposition of par between good money and bad is the work of government. Many a king has put out a chit that says in big letters and pictures "this is gold". When these were discounted to their value as kindling, kings had found tireless entrepreneurs to attempt marketing this sort of money and had given charter to them for that purpose, in return for the crown getting a share of the profit.

Aristotle, in his many posts had relied on the second part of Gresham's law without understanding the first part, and without considering the precondition for "bad money drives out the good" is that they trade at par. Furthermore, neither he nor anyone else here has played with the possibility of multiple good moneys circulating in different places and at different layers of monetary and economic activity, with no par imposed by king nor judge, but by the fact of their being good moneys in the eye of the markets - the people.

CoBra(too)Seeker - BOE AU Auction #5341105/11/01; 09:41:24

Tuesday May 15 - new series reduced from 25t to 20 tons.

Cheers cb2

PH in LAFiat legal tender vs abolishment of futures markets by fiat#5341205/11/01; 09:52:22

"This note is legal tender for all debts public and private"

So sayeth every FRN used in commerce. This is a topic that has been elucidated here at great length... even and especially by ORO himself. Yet he allows himself to become enraged by "the presence of monetary boobs in their midst, which try and make debt and contract denominated in gold impossible by government fiat."

Now, one supposes that any legal system that specifies that gold interest can be settled with any "note (which) is legal tender for all debts public and private" that no contract could be enforced in gold. Does this mean the abolishment of gold as a monetary instrument? Are all gold transactions thereby abolished? All except the futures market, complete with its attendant dishonest over-subscription to control the POG in the face of obvious overprinting of notes. A contradiction which does not seem to enrage ORO at all.

Why accept the abolution of all honest transactions involving gold (the purchase of a house by the tendering of gold, for example) and at the same time lob ICBMs at any "monetary boob" that suggests abolishing the futures trade of paper promises?

ORO, even to this observer's amaturish understanding, in spite of your obviously highly committed and ambitious studies, you have bootstrapped yourself into an extremely illogical position here.

Hill Billy MitchellMr Gresham @ # 53407#5341305/11/01; 10:12:34


The following was in quotes in your post:

"Overall debt to cash flow levels in the EU are far lower than they are in the US, but on the other hand, much US household debt is not intended as borrowing so much as it is a hedge against the dollar." End of quote.

Were you saying this or are you quoting ORO or someone else? I take exception to the statement no matter who has said it. American households have been borrowing money hand over fist since the 1993 approximate. It has been debt of little purpose other than consumption. Our nation of household borrowers has been borrowing for current consumption, period. They have generally bought the "lie" that inflation is relatively tame. They have been borrowing simply because they want consume that which they have not produced. That has been their motive, period.

The tide is changing of course and some will and have begun to borrow to hedge against inflation. They are feeling it in the "non-core" purchases that they make. These purchases are "big-time". They represent a goodly portion of their disposable income and they are feeling the pinch. I have my own definition of disposable income but should probably call it "spendable cash".

Let us define it now: Spendable cash = Income after taxes and debt service (including principle and interest). Because of the long-term growth in household debt (grew tremendously 1985 - 1989, I think. Then it took off again in 1993 approximate and may just now beginning to subside, though it is too early to tell.

I see strong indications that many are putting up the last of the equity in their personal residences, not to borrow more money but to roll it over into a smaller debt service situation (lower interest and longer term) in order to increase their "spendable cash" over time. This is the last straw for them and when this inflation reality begins to squeeze the little room they have found by mortgaging their homes, i.e. this new "spendable cash" begins to be used up by the climb in monthly "non-core" expenditures. The final state will be borrowing to hedge against inflation the way I did when I was a child. (Circa 1974 thru 1981)

From personal experience I know that when one gets in at this late stage in the liquidation cycle, they will lose all that they have and they will find themselves bankrupt. When this happened to me I spent the next seven years liquidating my debt and living like a pauper. Never again for me.

I fear that we have a different animal today. I doubt that many will live like paupers just to pay what they owe. They will file bankruptcy instead.

Now back to this, "borrowing as a hedge against the dollar". What is the psychology here? It is buying real estate, and other hard assets through debt on the bet that the debt will be paid off with cheaper dollars in the not too distant future. If personal income rises and the debt is fixed, then again we have more "spendable income" assuming taxes do not increase to eat it up.

You do not hear much about borrowing to hedge against inflation like we did in the mid to late '70's. This may be coming in the near future but it is not here yet. When that happens those who get in the game and have no savings and no job guarantees will hit the soup line in short order. We are nearing the end.

It is ludicrous to say that the household debt which has accumulated in the last 7-8 years can be characterized in this way: -..."much US household debt is not intended as borrowing so much as it is a hedge against the dollar."

Very respectfully,


Hill Billy MitchellORO @ # 53410#5341405/11/01; 10:47:21

Sir I believe you missed my point completely.

I was referring to the USD's that are not in circulation. The USD's, which are held in reserve by central banks, will cease to be good for reserve and will be spent. The money will be spent on every imaginable hard asset located in the United States. It will be gotten rid of at the rate at which Germans got rid of the paper Marks. Why will "Big Float" cease to float? Why will the USD be repatriated? The answer is very simple. Before times eternal, the Almighty designed a law to prevent this fiat fraud. He put teeth in the law. The law is called Gresham's Law, simply because it was brought to our attention by John Gresham. The law has its own teeth. The law is defied at peril. The law is immutable because it was established by the One who created the Sun, the object of many worshippers in this world. The One who established the law is the second immutable entity in this discussion.

You seem to put forth that the USD's circulating in our nation are not the same USD's that lie in central bank reserves. If they are different dollars not subject to future spending please explain. Should the US strike new money it will affect the USD's held in reserve by the nations of the world. This is a guarantee. It will mean war with bullets and ICBM'S if the banks are forced to simply write of their USD reserves.

Give me a break. I acknowledge your genius. You could at least acknowledge my common sense.



Mr GreshamRobert Mundell on "Uses and Abuses of Gresham's Law in the History of Money"#5341505/11/01; 11:12:42

This looks like a fun read -- I remember pulling it up and almost getting to it two years ago.

After seeing this, maybe I oughta change my name to Theognis (Greek elegiac poet who first expressed G's Law), but I'd want to find out who "his beloved Cyrnus" is first. Also, Aristophanes was in on the story, too, but we already have -- still, I hope -- an "Ari" amongst us.

Mundell: "The correct expression of Gresham's Law is: "cheap money drives out dear, if they exchange for the same price." That proposition is neither trivial nor obvious."

Actually, the more I scan Mundell's paper, the more dangerously pulled in I get. I think this might be the "Read of the Day." He touches on so much about the transition from gold to paper, and has a section titled "The Breaking Point."

Now I'm going to be a good Friday-catch-up worker, and close all my browser windows, and get out of here.

Buena Feboom boom#5341605/11/01; 11:15:17

C'mon everyone...........LOOK AT THE T-BONDS........they're gettin smoked! They generally lead these crisises. Greespan can only lower rates as long as he has "favorable perception" in his pocket.........looks to me like he's loosin it........dow crash by May 31st?........any takers. me out here.......we're gettin to serious for everyones wellbeing!

OROGresham - of Triffin and merchantilism#5341705/11/01; 11:19:11

The practitioners of mercantilism are more often gilds and unions, as they had supplanted merchants, industrialists, and financiers to great extent in the practice of protecting exports, local manufacture, and "jobs" at everyone else's expense. Merchants, industrialists, and financiers, having already enjoyed protected status can not find further growth in it, and had been pressing for a freeing up of the markets so that they can seek new markets to sell into and buy from - where new advantage may come. Protectionism is only beneficial if it is practiced exclusively for your favor. When over about 1/4 of an economy is "protected", the benefits of protection are lost, since "everyone" has it.

Think of protectionism as a new business idea with a company providing "protectionism" services (through appropriate bribery of officials, infomercials, and PR, etc.). Since economic growth comes from specialization and capital investment, and protectionism is the prevention of specialization by restriction of trade among specialists, it has to be a negative sum game. It confers on its beneficiaries less than the cost to the rest of the people. The first to buy a Protectionism Inc. service package raise prices till they have higher profits, which they must spend or reinvest. Their employees, also seeing that there is no competition to their product, go on strike for a greater slice of the pie, which they get because there are no alternative places for the "protected" industry to get their products. Thus the profits disappear a few years into the future. Consumers see the higher cost of the "protected" goods and some stop using them, while others pay the higher price. The higher prices for the "protected" goods cause expenditures on other items to drop. The still competing industries see their product prices drop, fire workers in order to cut costs, stop investment because of the low returns, and thus complain of "dumping" and "anti competitive" foreign "subsidies, tariffs and regulations". The advantages of subscribing to Protectionism Inc. services become clear and sales are brisk initially as "unprotected" workers help Protectionism Inc.'s PR business for free. But the next group of companies to sign on find that their product prices could not be raised in the proportion that the first one's did, and find that some of their suppliers have done the same, thus raising their costs as well. The first adopter's profits continue to decline as more suppliers jump on the protectionism bandwagon, and their workers demand more pay, and less work time, forcing the "protected" company into lower profits. The return from Protectionism Inc. services falls, the economy goes into recession as prices rise, investment halts, and finally no returns are available at all (this is the first leg of the great depression), and Protectionism Inc. finds revenues falling rapidly, and their own profits gone, they proceed then to go out of business.

At this point, the politically derived advantage most easily recognizable to a corporation now is to be allowed to have imports from plants it builds overseas in order to force its workers to compete. Soon after, other businesses start importing their own products and compete with the formerly protected businesses, relative prices drop, sales grow according to merit, and investment revives together with economic growth. (see Europe during the convergence period when tariffs fell and internal cross border trade in Europe grew 3 fold in the 70s, and another 3 fold in the 80s and 90s -- at least till 97).

In growing economies, where there is no existing business in the first place, protectionism serves to assure higher profits to the investors that are to found the industries - and thus attract investment. These join other companies (both local and foreign) coming in to the emerging market in other industries. People are found to be saving prodigiously because of the high return protected industries offer, and the high prices for their products (essentially they are pushed out of the market for products and into the world of investment). Since other economies try to do the same thing, the international market place becomes crowded with over-investment, and those that enjoy it are the countries where tariffs are low (US).

Profits from export businesses decline as more of the potential labor force in the emerging economy participates, and labor costs rise. Also, the competition in the unprotected markets becomes fierce, and prices fall, and with it profitability. At this point, the emerging markets have matured and further profit for local industry can only come from local consumption growth. However, getting consumption to grow substantially requires prices relative to labor income to drop, which would only happen if the economy dismantles protectionism and allows its weaker companies to go under and their employees to find work in retailing and local distribution. Opposition to this would be fierce by unions and corporations enjoying exclusive charter for their products, but eventually governments will see that the only way to get out of the crissis and strife is to let down protectionist barriers so that competition will drop local prices relative to labor and thus improve everyone's lot (and calm down the stress, not to speak of getting reelected). If they don't do this, like Japan decided, then a short period of high accumulation of foreign assets is followed by a long period of stagnation, as corporations aim to preserve foreign market share by building production outside their home markets (where labor is expensive), after which the local powers may finally come to their senses. We are approaching this today.

The Triffin deficit issue grows with the extent of "protected" growth in emerging markets exports, which had attracted foreign investment in the form of loans denominated in reserve currency, by artificially raising return on investment in the emerging market countries. As with any other cases of artificially motivated investment, the result is over-investment, as high returns of the past turn into negative returns later on. Pressed by the need to repay foreign currency debt, the already low return companies exert a pull on reserve currency supply from its issuer, and their governments support them by assisting in lowering local wages relative to export product prices through currency devaluation. Since the peak in outstanding international loans to Asian emerging markets in 1996-7 at $1.4 trillion, they have come down to $0.6 trillion by the end of 2000, and probably will hit bottom soon at about $0.4-$0.5 trillion about equal to their projected reserves by end 2001. At this point, the dollar should be ready to devalue there, unless oil prices rise while they remain denominated in dollars, which would raise demand for dollar reserves. If oil can be paid for in Euro (or Yen) the Triffin deficit will shift to these countries where industries will hollow out, trade deficits burgeon exponentially, and reserves will be wiped out in under one decade while import price inflation in the US wipes out what little trust the dollar retains at home (much less than people say they have and why empty nester boomers have 3 empty bedrooms and a Rec room stuffed with unused exercise equipment).

OROHBM - not Big Float#5341805/11/01; 11:34:14

Sorry not to have touched on this yet, I did not speak of the process of the return of Big Float. I believe you are right, and have said so before. I will eventually get to discussing this in more detail.

I will only note for the moment that the process has started; each EU bank of size has purchased a US bank, Deutche Tel. (part owned by the German gov) just bought a US company, French Company Lyonaise des Aux bought US entertainment, as Bertelsman has been doing for years on end, Daimler bought our lemon producer Chrystler, and much urban US real estate is developed with French and German money. They are buying income producing investment assets, however, and not so much "stuff", indicating that they are not negative on the US economy and the prospects of converting US derived dollar income into Euro.

Seeker of the GrailCoBra(too)#5341905/11/01; 11:41:25

CoBra(too).....I thank you.


Old YellerTrouble in bond land#5342005/11/01; 12:12:50

Interesting comments on the state of the credit markets and the implications of the ECB flip-flop.
SteveHChalk one up for the Gipper! (protecting gold)#5342105/11/01; 12:37:58

You have a right to a firearm

So long as there are idiots out there who are trying to convince people to disarm themselves so they can be maimed or killed by violent criminals, I will fulfill my journalistic duty to remind folks that they don't necessarily have to become a statistic if they don't want to.

You have a constitutional right to own a firearm -- handgun, shotgun, rifle -- if you so choose. And, like all our other rights -- free speech, freedom of religion, the right to avoid self-incrimination -- your right to own a gun cannot be "infringed," taken away, banned, limited, or ignored.

You may not agree with or like Buddhism, Wicca or Islam, but in America you don't have the right to forbid people from observing or practicing those religions.

You may not agree with or like what WorldNetDaily or Rush Limbaugh or Bill Clinton or the New York Times has to say, but you don't have the right to order them to shut down or shut up.

Consequently, you can belong to all the "million mom" or "handgun control" groups you want, but you don't have the right to forbid, limit, or ban persons from buying and owning firearms. It's as much a constitutional right as any other.

Maybe too few people realize this because too few schools provide kids with proper constitutional instruction. I know of and have heard of teachers who badmouth and ridicule the Second Amendment just because they personally don't like guns. Ironically, however, they use their First Amendment right of free speech to trash the Second.

Or maybe it's because too few media pinheads have a clue about the proper constitutional rights and responsibilities of citizens and government alike. I know of lots of journalists who would rather be invited to parties held by anti-liberty minded politicians than remind their readers of their right to own a firearm.

Or maybe it's because too many communities ban or severely restrict access to guns while too many judges and lawmakers let these communities get by with it. I know of lots of local big fish who are of the mind that they should be dictators of their own little domain and should have the right to restrict gun rights (and others) at their leisure or whim.

But whatever the reason, the one irrefutable fact of the matter is this: Americans do now and have always had the right to "keep and bear arms," because our Constitution says we can -- and there isn't a damned thing gun opponents can do about it.

Or rather, there shouldn't be anything they can do about it. Far too many federal, state and local politicians and judges are just as anti-gun, all-controlling and hypocritical about the Constitution and the rights it guarantees we the people.

Oddly, they will let kids view pornography on the Internet but are against letting a 100-pound woman carry a gun in her purse so she can defend herself against a 220-pound male rapist.

My guess is if more lawmakers and judges were attacked, beaten or raped, they'd suddenly "see the wisdom" of the Second Amendment. I'm not advocating that, mind you, but unless you've been in that kind of situation, it's very easy to deny others the right to defend themselves -- especially if you're personally surrounded with a boatload of armed personal bodyguards or cops.

People should understand that while some anti-gun advocates really believe what they are doing is right, their efforts to make sure you're unarmed are inherently more dangerous to you than guns themselves.

Criminals love helpless, hapless victims. Always have, always will; the more helpless, the better.

Consequently, the more gun control laws anti-gunners convince lawmakers to pass and judges to uphold, the more violence and deaths our society will suffer because lawbreaking maniacs don't care much about laws -- against guns or anything else -- in the first place.

The cardinal rule of safety that you should follow is this: You should never let someone who is not responsible for you determine what's best for your personal safety.

Also, even if you don't like guns you shouldn't be willing to accept limitations or bans on them because sooner or later, somebody will get around to limiting or banning other constitutional rights you do "approve" of.

If anti-gun proponents want to disarm themselves, tell everyone they see that they're disarmed and post a sign in their front yard that says, "Don't worry -- I don't have a gun," that's their business. And their right.

But if any group or politician seeks to infringe upon, limit or ban the "right to keep and bear arms," remind them they have no "right" to do so. You can use your First Amendment right of government redress to do the reminding, as well as your constitutional right to vote.

Jon E. Dougherty is a staff reporter and columnist for WorldNetDaily, and author of the special report, "Election 2000: How the Military Vote Was Suppressed."

turbohawgU.S. to Abandon Crackdown on Tax Havens #5342205/11/01; 13:07:17

This Harry Browne voter is discovering that he may have underestimated W.

The Bush administration plans to curtail an international effort to crack down on tax havens, reversing an initiative backed by the Clinton administration in part because of concerns the effort would lead to higher domestic taxes.

The reversal of U.S. policy is another disappointment for European allies distraught over the new administration's rejection of the Kyoto treaty on global warming and its doubts about the Anti-Ballistic Missile Treaty.

Barbara Angus, a Treasury Department international tax official, told representatives of the 30-nation Organization for Economic Cooperation and Development that the United States was no longer interested in cooperating on key elements of the OECD's "Harmful Tax Competition" initiative, officials said. Though the American officials say the United States will participate in a more limited effort, U.S. officials acknowledged privately that their move essentially guts the effort.

"The United States does not support efforts to dictate to any country what its own tax rates or tax system should be, and will not participate in any initiative to harmonize world tax systems," Treasury Secretary Paul H. O'Neill said in a statement.


OROPH in LA - golden tenders and chickens#5342305/11/01; 13:51:30

The thing that I enthusiastically speak of abolishing is the FRN - legal tender for me would be the commonly accepted monetary instruments of the time - whatever is used for money in the marketplace, be it mortadella sausage or MSFT stock would be legal tender. In a gold standard world gold specie (coin) is the legal tender that a court may dictate for payment if the contracted items of trade are no longer agreed upon by the parties that came to court, or are not practicably available. Government then must accept gold specie in payment of taxes, and it may choose to accept other items in payment of taxes at whatever exchange rate it finds attractive.

There would be no note on which is written "This note is legal tender for all debts public and private". It is the central bank and the currency that I wish to abolish. Both exist by fiat alone.

The paper gold substitutes are fine so far as they are accepted by people willingly rather than by government command or by government sponsorship/subsidy of the issuers.

The inflation of paper gold you see today is a result of central banks providing gold as lenders of last resort at an artificially low rate of interest. In the mere existence of the government sponsored central bank you have the cause of paper gold inflation and the dilution of gold values.

Had central banks not stood at the market's edge with a promise of lending gold to anyone who gets stuck owing it at a rate of less than 1%, gold borrowers would not have leased it and not have sold it into the market, and paper gold holders would have checked carefully whether their counterparts could actually deliver. Furthermore, they could have set interest rates according to their own estimate of risks to delivery rather than at the rates in which gold is available from central banks.

But nature provides a cure for this disease of central banking - "moral hazard", it punishes the central banks by having them choose between honoring promises to lend and sell gold, or seeing the bullion banks and speculators go under engulfed in flames of scandal. Given that central banks are not happy to admit to the error till it is too late to fix it, they will sell gold into the market, and continue to lease gold to bad credits. The gold will then reach the market and no longer be available to the central banks in the future. Once gold is out of their hands, the central banks would not be able to subsidize gold lending and back paper gold. At that time, the markets would be free to adopt gold for monetary purposes - if they like, and the markets historically have liked gold as money - without fear of central banks dumping their metal, lending it, or otherwise disturbing trade in gold.

OROturbohawg - good news#5342405/11/01; 14:15:51

The OECD anti tax haven idea, a joint US Dems and Eurocrat attempt at forming an international tax cartel to eliminate "tax competition" - i.e. to end the possibility of people moving business out of high tax no service countries to low tax high service countries - is part of the global trend of established old Western governments trying to hold on to their revenue and limit their liabilities (entitlements to their own people and to their bond holders) in the face of competition from other governments offering high service, low taxes and a growing wealth of industrial, technical, and cultural advantages.

The split between government and banking has broadened and deepened to include industrialists and even a modicum of public support, and outright denounciations by central bankers of government spending, regulation, and taxation (which lower a bank's profits when governments are denied the benefits of inflation).

This may be why so many EU businesses are investing in the US rather than within the EU.

Trail GuideOf ORO's World#5342505/11/01; 14:32:34

Hello again. I'll try to address several posters with this.
More comments on our current discussion, proceeding from my #53314.

ORO (5/9/01; 12:53:15MT - msg#: 53296)
--------If Europe continues to expand and deepen regulation (as it has of late) while the US simplifies and thins regulation, the advantage would play in the favor of US industries despite higher dollar exchange rates.-------

Of ORO's world:
All of his conclusions above the closing (that statement is printed above) are based on the ongoing dollar reserve system as we have known it over several decades (even further back). Included during that time are all the excesses and faults dumped on the fiat money world by our nation making the best of it's dollar dominance. Also, included in that period were all the defensive plays
taken by other nation states. To be sure, those plays were also filled with excesses and faults, but what else do we expect from political societies.

The ongoing over taxation, deficit spending, fiat inflation, deficit trade balances and mismanagement of private economies has always been with us. Yes, under different names and different degrees, that's true, but no recent period in money history, gold or not, was without an ongoing effort to cheat the system. It was always in a process of decay, no matter what the books tell you. To think otherwise is to disclaim humans as they are.

How often have we heard that some special "hard school of thought" has all this terrible process documented and neatly explains where it all went wrong? Then, goes on to show us how to set it all up again so as to start over on the right foot.

So, trying to present the society as a whole, as "the awful, all controlling big government" on one side and the "good private economy on the other side" argues the lesser side of the larger issue;
-----hard money policy cannot work for long in a credit based system----!

It makes absolutely no difference if we are even on a 100% gold use money system, if we as a society engage in credit
commerce, we will break links with gold.


I borrow 100oz of money gold from ten people so as to spend that gold doing commerce business. The hard money theory has us thinking that if I fail and cannot pay back the gold, this little portion of the money supply contracts. Thereby the gold system is perfect, as it slows the economic excess.
This is a minor example of gold banking. On a tiny scale. It works, as long as we don't act out our motions in a political way.

Conversely, if gold was not part of a banking,,,,, credit,,,,, lending system,,,, rather it is just a tradable, non-lendable non- official money asset,,,,, then those ten people would have given me their gold and became part owners in my (ours now) enterprise.
When it fails, our gold money is gone and no credit contract is lost in the process. Society at large will not come to our collective defense, no matter the scale of the loss. You see, we lost our assets, not society's official money!

The difference:

When gold is lent,,,,, when it's part of the banking system,,,,, when it becomes the object of a credit contract,,,,,, this whole hard money system falls into political RISK! No matter how perfect the "schools" have show this to work, in real life, political risk degrades our perfect credit money. This is the gray area that's not ironed out because we cannot iron out society's emotions. Let's see:

In the above, the ten people I borrowed gold from would be holding my IOUs for that 100 ounces. Be they private citizens, banks or corporations they have effectively lost their gold money. The very money of the nation state!

Rather than see their losses made final, and cause harm, they partition the government to intervene by recognizing those money (gold) loans as good on the books. Further, the government is asked to lend some of it's gold (collected through taxes) to me to extend my business life. I continue to function in a small way as I pay on those gold (money) loans. Further, those loans (held by ten lenders) become marketable as they become seasoned. Then, at a discount to their face value, they can be sold or kept as collateral assets. Over time, this is the political risk that seeps into any hard money system. Over time, even a gold credit system is expanded,,,,,, inflated,,,,,, until outright fiat
must come into play.

It never starts out as "big corrupt government and their awful bankers" controlling the "good honest people",,,,,, rather,,,,, it's when a large enough segment of the "good honest people" are threatened with losing enough (gold) money that it could take down the economy,,,,,, they demand (elect into office) that their government and therefore bankers, expand the (gold) credit enough so as to slow
the fall.


Now, if this remained on such a tiny scale as the above ten, nothing politically would change. But, modern economic structure is never on such a little scale. This is why I say "we are them"! Many are indignant that they be placed in such company and proclaim they would never be part of such
fraud. Well, that is the very nature that splits the society into the same half's ORO sees today.

His closing statement comes at the tail end of a drama that was played out over decades. His small slice of context completely excludes how the USA dollar,,,, gold,,,,, reserve system was parlayed into a cost advantage that will not exist once the dollar falls. We will be the ones,,,,,,, much more so than Europe,,,,,, who ""expand and deepen regulation"" as our "advantage falls away"!

PH, I want to comment on your posts and will do so next. Be back as able. (smile)


Mr GreshamDoug Noland -- Credit Bubble Bulletin#5342605/11/01; 14:38:05

"The Power of Money" -- read this one before today's comes up (yes, you can always read it as archived there). A lot about our question "What is money". Spend some time mentally walking through the tides that are likely to sweep over us...
R PowellO fer day#5342805/11/01; 14:48:34

Don't shoot the messanger but

I have to report that we were shutout today.
POG down, XAU down and lease rtaes also down. Almost all markets rise and fall or fall and rise whether advancing or declining. I don't think one bad day reverses the overall direction of the precious metals sector. A downtrend is also not unexpected as today was the last trading day for June gold and silver options. There is news from GATA and I'll post the link shortly. Enjoy the weekend!

Randy (@ The Tower)Keep diggin' that grave, partner...#5342905/11/01; 14:48:42

--- "In the mere existence of the government sponsored central bank you have the cause of paper gold inflation and the dilution of gold values.

Had central banks not stood at the market's edge with a promise of lending gold to anyone who gets stuck owing it at a rate of less than 1%, gold borrowers would not have leased it and not have sold it into the market, and paper gold holders would have checked carefully whether their counterparts could actually deliver."----

You wanna hang your hat on that, ORO???

And just as surely, J.P. Morgan sat idly by on this thumbs when there was no Federal Reserve to provide crisis-era liquidity. Not.

And just as surely, we have recently seen this latter admirable trait in individual investors checking carefully whether their purchases where sound investments and could actually deliver value. Not.

Methinks your optimism runs too high, my friend, or your pessimism runs too deep. But keep shovelling....we'll surely uncover something. Maybe gold!!

BeowulfGold funds shining above the rest!#5343005/11/01; 14:52:12

Gold funds shining above the rest
By Craig Tolliver,
Last Update: 3:45 PM ET May 11, 2001


NEW YORK (CBS.MW) -- Like a phoenix rising from the ashes, gold funds have flown to the top of this year's performance charts, returning 15 percent so far in 2001, Lipper Inc. said Friday.


-Beowulf: Anyway I posted this because of the following sentence that caught my attention.

The supply pinch anticipated in recent days reflects how troubled Australian miner Centaur (CTRL: news, msgs, alerts) may be forced to cover a short position on 1.6 million ounces, Cho said.

This could substantially tighten supply and boost demand over the short term'she said.

-Beowulf: So now Centaur is short 1.6 million ounces? Can anyone verify this info?

R PowellGATA#5343105/11/01; 14:52:42

I don't know if this has been reported yet or not. It prints out at five pages so check the ink supply in the printer! Hope I got the link right.

Peter AsherTrail Guide (05/11/01; 14:32:34MT - msg#: 53425)#5343205/11/01; 15:15:00

Re your A,) I borrow 100oz of money gold from ten people so as to spend that gold doing commerce business. The hard money theory has us
thinking that if I fail and cannot pay back the gold, this little portion of the money supply contracts. Thereby the gold system is
perfect, as it slows the economic excess.
This is a minor example of gold banking. On a tiny scale. It works, as long as we don't act out our motions in a political way.

& B) Conversely, if gold was not part of a banking,,,,, credit,,,,, lending system,,,, rather it is just a tradable, non-lendable non- official
money asset,,,,, then those ten people would have given me their gold and became part owners in my (ours now) enterprise.
When it fails, our gold money is gone and no credit contract is lost in the process. Society at large will not come to our collective
defense, no matter the scale of the loss. You see, we lost our assets, not society's official money!

Seems that A)_ is lending money and B) is either issuing a bond or stock.

megatronYES YES YES!!!! Save the Tax Havens!!!!#5343305/11/01; 15:15:42

I knew it! There was a normal person in government somewhere
and his name is Paul O'Neal. He undid what those ruthless human garbage under the KlintlerFurh subjected the world to.
I hope their mothers hate them.

Chris Powell"Huge success" for GATA African Gold Summit#5343405/11/01; 15:46:51

A report from GATA Chairman Bill
Murphy in Durban, South Africa.

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
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CamelGas injection rates.#5343505/11/01; 16:32:12

Thanks for the info Black Blade. Your oil and gas commentary is about the best on the web. I've been hearing rumblings about a respectable size build in the stocks of natuaral gas, which if true would probably change the equation for the doomsday scenario for this winter that a lot of people(including myself) have been predicting. I don't really know enough about the subject to judge how much is sufficiant, except that I have heard the numbers are approching the average for the last few years. True or not?

Speaking of experiance, I was wondering if VP Cheney had any experiance in the oil and gas industry when he took over at Haliburton. Have allways been curious about that.Course that initial presentation on energy he made was shamefully incompetant given all that we have learned from Campbell et al over the last few years. I agree an all out drilling effort is necessary, but if Cambells numbers are right there is an urgent need to develop fuel efficiant cars. Bush at least has tried to set things back on the right track, but I personally heard Bush redicule Gores proposal to develop the hybrid vehicle. Heard it with my own ears. Not only did he redicule it it was painfully obvious at the time he didn't even know what one was. Shameful!

I often wonder if all you Reagan lovers aren't actually in love with that Noonan woman, or who ever it was that wrote his speaches. My favorite line of his was from one of his State of the Union messages where he quoted Lao Tsu, "Ruling a Great Country is Like Cooking a Small Fish", meaning, don't over do it. Course Reagan had no more heard Lao Tsu than Bush had heard of the hybrid vehicle, it was Noonan who wrote the speech.

About the only one of the old Holy Books that I still read is the I Ching. I allready know the Bible ,or at least have the general idea, and I don't see much point in reading it over and over again. The I Ching on the other hand allways seems to offer something new.ANOTHER in one of his messages once used an image that is similar to one from the I Ching and I was curious if he had ever studied it. Course so many of those images are Universal in that they draw much from the world of nature and the older agrarian societies that they surely would appear in many cultures.

Centennial Precious Metals, Inc. / USAGOLDHard assets... easy access.#5343605/11/01; 16:42:39

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Randy (@ The Tower)Steep learning curve on that!#5343705/11/01; 16:50:24


The Federal Reserve added $3.5 billion in temporary reserves to the banking system today through 6-day repurchase agreements. Fed funds were trading below the target rate.

Randy (@ The Tower)Interesting phrasing on this Bridge News report from China#5343805/11/01; 16:56:56

Hong Kong, May 11 (BridgeNews) - The People's Bank of China, the central bank, will issue a new set of gold and silver commemorative coins on May 15, the official Xinhua News Agency said Friday. The set will include three gold coins and two silver coins, that will be the legal currency in China, the report said. The central bank has a monopoly on gold in China.
A good time to throw in the reminder that the bigger steps toward gold market liberalization are just days away.

I'll leave you with that thought. Duty calls...

Black BladeSaxulum and Camel#5343905/11/01; 19:17:18


Your post reminds me of when we last had two major oil shocks in 1973 Arab Oil Embargo, and the Oil Shock of 1979. Tankers in the Atlantic would sometimes turn around in mid shipment and go to either Amsterdam or the US depending on which refiner would pay the higher price for the crude oil. I imagine that the Europeans will not be too happy if we in the US cause the price of petroleum to rise by drawing off supplies to the US. It is bad enough that they are gouged by their governments on petrol taxes. Definitely cause to hedge ones bets with a bit-o-gold insurance.


Even though NG stocks have risen I would still expect there to be a shortage of NG. First of all, stocks usually begin to rise in the Spring months as it is not too cold or too hot (sorta like Goldilocks and the 3 bears ;-) ). Come this summer there will be as much as 20% more electricity consumed for air conditioning alone. Virtually all new power generating plants and planned power plants are NG-fired. There are at least 275 new plants to be built by the year 2006. It was only a couple of years ago that summer NG production was injected into storage. This is a problem as the "New Economy" requires a lot of energy for computers, server farmer, telephony, internet manufacturing and service industries, etc. So instead of storing NG during the Spring and Summer, more and more is being consumed. You may have noticed that even as though storage has increased some, it is still 30% below the 5 year average levels. This Summer, we could see a lot more consumption and a lot less storage. We may get a slight jump in storage in the Fall, but come Winter we just might get bit.

Now Dick Cheney. He had no experience in petroleum prior to his stint at Halliburton. His position as CEO just might have been a political payoff for favors given when he served under Daddy Bush as Secretary of Defense. However, he is correct about the critical energy situation that we face in the US. Bubba Clinton and Al Bore certainly dropped the ball on energy with misguided wacky environmentalism that could well cost us much more in energy costs (both financially and environmentally) than was necessary. We have fallen behind the production curve and they also locked up public lands from further petroleum exploration and production. Of course when people become uncomfortable (especially Americans), they demand that something - anything be done - they believe that abundant cheap energy is a guaranteed right. Now we have our backs to the wall as far as energy is concerned. The Market Miracle of the 1990's Bull Market was fueled in no uncertain terms by the abundant supply of cheap energy. That expansion of course required that even more energy be made available for even more growth. That is where I think (and hope) that Dick Cheney as the CEO of Halliburton may have learned that a vigorous petroleum exploration and production program must be initiated in order to either continue to fuel future growth, or prepare for what I believe to be the inevitable economic collapse as the costs of energy are likely to never see the low prices of the 1990's ever again (barring the discovery of cold fusion perhaps). Reason number one why I buy gold, silver and undervalued energy shares.

Hybrid vehicles. Might be OK for those in urban settings, however, I would need the power train to get into rough terrain and to make quick repairs in desolate areas. However, it would be difficult to encourage over 200 million Americans to pony up several thousand dollars apiece to purchase a new vehicle, just as unlikely is to encourage everyone to junk their appliances and computers and to pony up even more to buy green energy saving devices. This is especially true of former "New Economy" and "" investors. At this point it is a tough sell as many hope to just remain employed. Hybrid vehicles will take several years to cycle through and replace the vehicles currently on the road.

Peggy Noonan? She was one of Ronny's speech writers. Now she writes editorials for the Wall Street Journal. BTW, did you know that Ben Stein of Comedy Central TV was one of Richard Nixon's speech writers? Now he has a TV show where you can supposedly win his money. Hmmm...

I don't read religious texts very much. Just not my thing. However, I am currently reading The Seven Military Classics of Ancient China translated by Ralph Sawyer and Mei-Chun Sawyer. I am reading the first book - T'ai Kung's Six Secret Teachings. It is purportedly T'ai Kung's political advice and tactical instructions to Kings Wen and Wu of the Chou Dynasty in the eleventh century BC. I am also reading Miguel De Cervantes Don Quijote de la Mancha (vol. 1) in the original Classical Castellano. It has a better feel for the almost dry humor than in the English version. My friends say that I'm a sick man. I just have the philosophy that if one does not at least learn one thing new each day, then that day has been wasted. That is why I come here and let Trail Guide, ORO, and even the Stranger twist my brain now and then ;-)


- Black Blade

R PowellBeowulf#5344005/11/01; 20:07:37

Centaur's 1.61 million ounce hedge book

I believe if 12 troy ounces make a pound, then 1.6 million ounces is about 66.5 tons.

Thursday, May 10 3:46 PM SGT

Gold Market Keeps Eye On Australia's Centaur Mining Hedge
SYDNEY (Dow Jones)--Immediate short covering by Australian gold miner Centaur Mining & Exploration Ltd. (A.CTR) to close its hedge books could give gold prices a short boost but wouldn't sustain a rally, dealers told Dow Jones Newswires Thursday.
Although news of the beleaguered miner's position sent gold prices up by around US$5 a troy ounce in New York trade Wednesday, the rise petered out in Asian trade Thursday as the market sat back and took a closer look.

The market now believes Centaur's short position isn't substantial enough to trigger a sharp ascent and that it would also depend on how soon it chose to close its positions.

"Who in their right mind would buy 1 million ounces at once?" asked a Sydney-based dealer.

According to Centaur's report for the quarter ended December 31, 2000, the company has hedged a total of 1.61 million ounces of gold at an average price of A$423 a troy ounce from 2000-01 to 2008-09.

"That's not an insignificant amount and could tighten the position in the market," said John Macdonald, a mining analyst with CIBC World Markets.

But it would depend on the market conditions when the company closes its books, which in turn depends on who would be responsible for that, he said.

Receivers, for instance, could be less amenable to any exposure, while counterparty hedges would want to liquidate at better prices, he said.

U.S. bondholders appointed PricewaterhouseCooper receivers in March in a bid to recover a US$225 million debt from Centaur. Centaur itself appointed administrators the day before, which in Australia gives an insolvent or near-insolvent company breathing space to deal with its financial difficulties.

Centaur's creditors are set to meet Monday in Perth, and could put the company into liquidation.

Despite initial excitement during early Sydney trade Thursday that gold could test US$272/oz should Centaur liquidate, some other participants said Wednesday's rally was mainly due to technical factors.

"There was mainly buying from funds between London and New York, and not related to Centaur, which triggered stops at US$267-US$268/oz," said another Sydney-based dealer.

A third Sydney-based dealer concurred, adding the talk on Centaur could have been spread by those trying to tempt funds to cover.

Joseph Gutnick, Centaur's chairman and managing director, couldn't be reached for a comment. Neither could administrators or receivers.

At 0742 GMT Thursday, spot gold was quoted at US$269.40/oz, down from US$269.90/oz in New York late Wednesday.


Tree in the ForestRandy#5344105/11/01; 20:34:41

In reading over your last post to me, I find only one major thing which you said that I disagree with. This may surprise you but it is where you said that banks do not charge income tax. While they do not charge this directly, I believe that the income tax was very much inspired by the banking system in particular the inauguration of the Federal Reserve. It is no accident that the income tax followed close on the heels of the Fed. The Fed is a private, primarily European banking cartel and the owners of the Fed (and all banks) make money by giving loans. It is the interest on these loans that generate their income.

I knew several individuals, doctors and architects, who subsequently went into the banking business. I could never figure out why they would seemingly abandon their "calling" to run a bank. It is only in the last several years that I have learned the explanation for their actions; banks print money! The largest conglomerates in the world have banks at their center and this is no accident. Banks print money!

You have to see this through a greedy banker's eyes; pretend for a moment that I am a greedy banker. I love money! And I always want more. Once I understand how banks make money through loans, it becomes obvious that in order for me to make even more money, I must make more loans. But a problem arises: when I print money to make the loans, it causes inflation. How to solve this? Well I could make fewer loans, but then my income drops so that's unacceptable. I know. How about this: I'll make more and more loans and become very rich and to solve the inflation problem, I'll use my influence (and my money) in the American congress to pass a tax that will force people to give back some of their money. Now I can make as many loans as I like and just mop up the excess liquidity through taxation. And my "friends" in congress can get re-elected by using the same system to spread the patronage around. The excess liquidity is taxed back preventing inflation. So my friends and I are now very happy. We're awash in money!

As you can see bankers and the congress support this income tax because it works very much to their benefit allowing them to pursue their goals, and still hold the system together. This income tax was inspired by and supported by the Rockefellers, members of the Fed through Chase. They worked hard to insure that they had sufficent means to avoid the resultant taxation through trusts, foundations and other tax loopholes. Ignore what you read in the press and Forbes about the wealthiest people in the world. The wealthiest people in the world keep a very low profile and will never be listed in the Forbes 400 or whatever. They are fabulously wealthy, probably trillionaires. Their tax burden is undoubtedly miniscule compared to their wealth. Good people have trouble seeing how some can be so greedy and selfish. But these people exist. And the rest of us pay an unjust and "non-constitutional" income tax to help them get richer. If you have not already done so, please review the legal underpinnings of the Fed and IRS in my post of April 22 #52341. Good night Randy and thank you to all who read my posts.

CanuckDid I just see a little yellow window?#5344205/11/01; 21:09:41

Canuck #5344305/11/01; 21:11:13

CanuckCanuck#5344405/11/01; 21:12:40


CanuckTest#5344505/11/01; 21:14:16


Last 4 posts (including this one) were tests.
BonedaddyGround Zero in the NG arena.#5344605/11/01; 21:42:29

Black Blade, it is good to see that you are still posting your erudite energy commentary. I have been too busy
throwing dirt in the air to visit the table much in the last few months. I'd like to offer a few tidbits on where it looks like natural gas is going for the 2001-2002 heating season.
The conventional wisdom is that enough new production is comming on line and enough new pipe is being laid to meet the higher demand. The price projections I am hearing from some very astute marketing types place NG in the mid $3-$4 dollar range for the next twelve months.
However, the progress that gets reported to management is often beyond "best case scenario". What I see happening in the Powder River Basin is that most of the work is actually a couple of months behind schedule. The single biggest hold up is the lack of water discharge permits for CBM wells in the Campbell-Johnson County areas. There are alot of folks with a dog in that fight, so I won't go into it right now, but producers are going to have a tough time meeting projected production numbers. The other hold up is construction. A big inch line from Natural Bridge to the Cheyenne hub was supposed to begin construction in May and complete in November. This line is the key to the door out of the basin. Until it is completed, there is now where for new production to go. The offical word is that all is well and right on schedule for November line pack. But, so far nobody is clearing ROW and May is half over. The tough thing about large diameter gas pipe is that it is so slow to weld. It takes two welders to make each butt weld and the pipe must stay heated between each pass or the welds can crack. From what I've seen, five months to build 130 miles of 30 inch is pretty optimistic. If every thing goes well, a good contractor can do it. If you get a good old Wyoming winter, beginning in October like last year, there is a risk of welds cooling down too fast and cracking. Repairs can really add up. X-ray also takes a lot longer on big pipe because it is so darn thick. The last major hurdle before start-up is hydrotesting. 30 inch probably holds about 20 gallons of water per linear foot. 100,000 gallons of water per mile more or less. You my friend, have no doubt worked with water in Wyoming/Montana winters.
So, officially every thing is fine and that information is what the marketers use to determine both gas price and basis for transportation rates.
It's kinda like John Wayne said in Rio Bravo, "If anything goes wrong... your fault,.... my fault,.... nobody's fault,.... I'm gonna blow a hole in you I can read a newspaper through."

geTrail Guide #5344705/11/01; 22:17:14

Trail Guide writes:

Begin Quote

I borrow 100oz of money gold from ten people so as to spend that gold doing commerce business. The hard money theory has us thinking that if I fail and cannot pay back the gold, this little portion of the money supply contracts. Thereby the gold system is perfect, as it slows the economic excess.
This is a minor example of gold banking. On a tiny scale. It works, as long as we don't act out our motions in a political way.

Conversely, if gold was not part of a banking,,,,, credit,,,,, lending system,,,, rather it is just a tradable, non-lendable non-official money asset,,,,, then those ten people would have given me their gold and became part owners in my (ours now) enterprise.

End Quote

The second case would be acceptable if I, as a lender (or owner, if you like) could make claims against the remaining assets of the failed business, as a lender/owner. However that gate is closed since, that would be "enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade", and forbidden by international law. Wouldn't gold be useless under such a law?

There is another danger namely; a vast business potential is created for mafia: Gold loans made under special contracts, fees paid to mafia for every contract signed and and private gold contract enforcement agencies flourish.

Black BladeBonedaddy#5344805/11/01; 22:19:26

I hear ya! I have been rather busy as well. I closed up my office in Nevada gold country as the mining business has effectively destroyed their own business (forward sales, high-grading, inept management, etc.). Actually I have begun marketing my services for NG in the Powder River Basin (Gillette, Sheridan, and Casper). It looks very positive here. I know that one could not find a drill rig very easy. I have a client who is struggling to find enough rigs and drillers before their leases expire. That is one major bottleneck for NG production. I also have talked to some drillers in the Metals exploration side and they have expressed an interest in getting into the CBM game as well. I talked to one driller/owner who bought his rig 3 years ago. Last year he was 3 times as much by another driller. This year he was offered about 9 times as much. There is very strong demand - but no rigs. I think that NG prices will remain high from here on. There are many NG-fired power plants coming on line over the next few years and that alone should pressure prices further. I guess that we both have interests in the same area of work and investments. Natural resources should do very well for the next several years. The gold price fixing is likely to come unglued as these economic pressures from high energy costs are factored in (squeezed profit margins, inflationary - stagflationary pressures, etc.). Base metals look to do well as infrastructure will need to be upgraded and new infrastructure will need to be added. Times are about to get "interesting." Cheers!

- Black Blade

Black BladeBonedaddy - again#5344905/11/01; 22:28:58

BTW, you mention that X-ray testing is not such a viable method for testing. How about Dye penetrant or Magnetic Particle (Magnaflux) testing on pipe? It is cheaper and yet can be a quick means of checking welds. On the subject of pipelines, Questar (STR) purchased the ARCO oil pipeline that goes from New Mexico to S. California, and they are converting it to a NG pipeline. I think that the California politics is somewhat screwy and that they will get burned as there is a strange tariff imposed by California on "undesirable" NG, even though they desperately need NG. Go figure.

- Black Blade

NetkingRandy @ The Tower #5345005/11/01; 22:51:28

Randy(53438) - Do you have any more details on this PRC coin issue, sizes & content, prices in local currency, number minted & issued etc?
Black BladeUS Energy Secretary Blames OPEC for High Gasoline Prices#5345105/11/01; 22:51:59


Energy Secretary Spencer Abraham said OPEC was at fault for high fuel prices, conflicting with comments made earlier in the week by Vice President Dick Cheney that a shortage of U.S. refining capacity, not the cartel, has caused gasoline prices to soar.

Black Blade: I'm afraid that Spencer is wrong and Dick is right on this one. The problem isn't so much the supply of oil, OPEC production cuts, or implied threats by certain OPEC members. The problem is the ability to refine and distribute the EPA mandated reformulated fuels that vary in grade and content without any uniform standard from one region to another. Bureaucracy in action and incompetence at the EPA. This does not mean that OPEC is completely out of the picture. They could very well cut production in order to maintain a desirable price for their crude. Who can blame them if they do? The real focus on the energy crisis should be on electricity as that is where the US is most vulnerable. Gasoline standards could be relaxed with the stroke of a pen, electricity is a bit more problematic.

Black BladeGold funds shining above the rest#5345205/11/01; 23:08:30


NEW YORK (CBS.MW) -- Like a phoenix rising from the ashes, gold funds have flown to the top of this year's performance charts, returning 15 percent so far in 2001, Lipper Inc. said Friday.

Black Blade: Gold equities prices usually lead the price of gold itself. This could be positive news.

Black BladeGot gold? Asia banks haven't got much#5345305/11/01; 23:19:12


Asia central banks have scant gold holdings compared to their total reserve, a World Gold Council meeting in Honolulu has been told. "They're surprisingly low when compared to those of the United States, Europe and the Middle East," says World Gold Council regulatory affairs specialist Dick Ware. He says Asian central banks typically hold 1 to 5 percent of reserves in gold compared to 34 percent in Germany, 41percent in France, 45 percent in Italy and 56 percent in the United States.

Black Blade: If sentiment should change, and Asian central banks decide that gold reserves are preferable to US Treasuries, then the POG would probably rocket higher. The former Japanese finance minister made that suggestion a couple of years ago. Hmmm...

working-kirkinterest rates cuts#5345405/11/01; 23:32:42

As you might have noticed, a lot of people are hoping for a
rate cut next week. One of the claims is a rate cut is anti-inflationary. Can someone explain to a simple working
man how a rate cut is anti-inflationary?

ORORandy - JP Morgan was not a CB#5345505/11/01; 23:37:00

What you seem to ignore here is that JP Morgan used his own funds and his own client's money for the purpose of making a profit and avoiding further loss of business if his trade counter parties were to fail and their assets and those of their clients locked up in bankruptcy courts.

Central banks and governments use Other People's Money, without their consent and for both the purpose of imaginary assistance to the financial markets and for the purpose of gaining stature and widening their authority and patronage.

The Abominable Communist Eccles who's name is carved into the Fed building stands as proof final and incontrovertible of the origins and purposes of that institution. These do not include any of the oft stated items of faith regarding its character and function. It was not what it seems today, and its present fiduciaries, however benign, still must contend with the power granted the institution in its charter and the simple fact that such power should never have been bestowed on one organization in any country seeking to enjoy the rich fruit of free trade.

The central bank is entrusted and authorized to do the impossible: make the one single decision that replaces billions of decisions by the whole of a country's people, and to isolate these decisions from those made in other countries. That alone is sufficient to negate any claim of beneficial association between central banks and the financial marketplace.

JourneymanRegulation & currency controls @Trail Guide (ORO), Randy, Tree, ge, Peter Asher, Mr Gresham, ALL#5345605/11/01; 23:58:19

Must be short!

Hi TG!

Regards more U.S. regulation to compensate for falling dollar: (much more skipped for lack of time)

Because currency controls, in the age of instant electronic transfer & sophisticated fund managers, no longer work (proved originally by Spain about a decade ago and more lately Mahathir of Malaysia, Indonesia, etc.) U.S. will not dare attempt regulations, nor will they work if they are attempted.

ALSO Randy & TG regards corruption of money: 1. It's first and foremost a matter of degree. Central banks turn a scratch into a severed artery as far as dilution of the money supply through fractional reserve lending. Thus while there would be some corruption & dilution in a transactional gold economy, it would simply not be physically possible for it to be as rampant as in a pure megabyte situation where the money supply could simply be doubled or for that matter multiplied by 100 instantaneously. 2. Just because corruption might occur is no reason to quit the field in favor of the greater of two evils, namely pure fiat; Your house may eventually rot and fall to ruin but that's not a good reason to live in a cave!!


FredBearworking-kirk (05/11/01; 23:32:42MT - msg#: 53454)#5345705/12/01; 00:15:49

interest rate cuts anti-inflationary?

When I discuss inflation with people the first thing I try to expain is if they were to look up the word inflation in the dictionary they would find something like

"an increase in the supply of money RESULTING in higher prices" (emphasis mine).

Then I try to explain that money as we know it today, currency, dollars, federal reserve notes, whatever you want to call it, is a commodity like wheat, corn and soybeans.

We trade the commodity money for other goods and services. We could trade wheat, cattle or gold, but today we trade pieces of paper with pictures of dead guys.

Now, what happens when we produce too much wheat? We have to lower it's PRICE in order to sell it.

The interest rates the Fed controls are the PRICE of the commodity known as money. They are lowering the price making it easier to create more and thereby lowering the VALUE of the commodity. Therefore, by lowering the value, the commodity will trade for a less quantity of other commodities. In other words, it will lose purchasing power.

So as the fed (and the banking system) continues to lower the value of the commodity known as money, the money will trade for less of other commodities, goods and services.

This is inflationary, not anti-inflationary.

My other scenario, to explain the way money is created, is to tell everyone sitting at the table that we are starting our own little community. Before we can do business with ourselves we need a medium of exchange. I take the role of the central bank and loan everyone $100 at 5% per year.

After the first year everyone owes me $105. This is an eye opener as the formerly ignorant now see how money is created, via debt, and that the total debt can never be repaid, except to trade labor for the debt, which some people fear will lead to serfdom.

Some people at the table will be able to repay me in full. Others will have to borrow more. Wait until you see their faces when the revelation hits.

Hope this helps.


FOA, you are missing the point of my disaffection entirely. In my preferred rendition of a monetary system, there is no particular official money, just a legal recognition of a commonly accepted money (and no limitation on it being only one or many, if the markets leave one surviving money – probably gold – fine, if not then two or more are fine). Bankers have no charters, and their liabilities stand on their own. This is not a gold standard unless it turns into one.

Lenders and equity investors do not have the expectations you presented. Only bank depositors do, even then only those who think of a bank as a depository and clearing house rather than an investment fund like a money market. For savers interested in a gold vault and clearing service the markets have long known to provide a service with minimal or nearly no risk. For everyone else, who is investor and saver, it is a traditional bank he seeks. No bond holder would ever imagine the promises in hand to be money or a good substitute for it. They are investments, NOT savings. They are a fruit tree owned for the future fruit it is to bear, not dried fruit that will last generations.

You may have come across a Barron's article within the last year where the early days of finance were presented. Upon establishment of state houses and within their first year, they passed bank charters, and the Bank of the United States – a central bank - was opened with a monopoly charter as soon as there was a congress to grant it. Bankers paid good money to politicians in order to obtain these charters nationally and within each state. The charters to a one gave the chartered bank's accounts and notes some degree of "legal tender" status raised towards that of gold and silver. The central bank charter forced all other banks to book the CB's notes without discount as if they were actual coin. Bank credit of the modern sort was a creature of government from day one. It is not that people first had banking and then government came in to bail out the depositors by forcing everyone to accept bank paper instead of gold. It is the other way round, bankers were incredibly cautious when they were not granted any privilege, the few happy go lucky Wild West banks were not at all characteristic of the situation when the central bank was closed down (both the first and second banks of the US did not have their charters renewed).

Your view is of a world in which people start out with groundless expectations to make foolish decisions after which they cry to government to bail them out. That has never been the case. It has always been government that made promises that it could not keep knowing that the people have no alternate government to turn to if the promises are not kept, and it is this same government that gave privileges and subsidy to banks so that they could make promises they could not keep with impunity because all banks were governed by the same rules, leaving customers no choices and little opportunity (and therefore incentive) to practice judgment. The rules were not made to fit the customer's preferences within the confines of the reality, they were set into law in order to frustrate him.

It is central banks that started with political privilege, that made the situation you speak of happen. Is it structured into human society that political representatives be crooks? Is the balance of power between the people and their government fixed in nature so that government can always pull the wool over their people's eyes? Are the people always going to be overwhelmed by government? Will people not learn from their own experience and from history? Has the availability of instantaneous information and thoughts not changed anything?

To take from your example:

In the 100 oz loan, everyone recognized that you took a risk – exchanging specie for paper in the hope of gaining a profit – the interest, say 10%. You yourself would not treat the promissory note as if it were specie. You know that the paper is as good as its signatory and you have no problems with the signatory that can not be compensated for with the interest rate you chose to offer – otherwise you would not have made the loan.

In joining a partnership with the same business and putting in the same 100 oz. You have put the same money at risk in the same business and you hold an equity stake, a fixed portion of its future cash flow – you own an unspecified amount instead of a specified one. Obviously you would do so only if you expected that portion of the future cash flow to provide a return greater than 10% you could obtain from a loan to the same business.

I am sure you are aware of the difference between a loan and equity – in a loan you are participating in the FIRST cash flow of the business. Before the owners pocket anything you will get yours, and if the business goes under, you will have assets for security. In the case of equity, you get whatever portion of the cash flow remains after creditors and expenses are paid. If the business goes under, you have nothing.

If you go and deposit the money in a bank when there is no regulation and no CB, you study the bank's reputation with your bank credit analyst service (SP, Dun and B, Moodys, etc.), perhaps look at the books, you will get a lower interest rate, but your risk is smaller, the bank has over 40% reserves, and it lends the deposit out at 10% to the same business, giving you 4% for a short term account, and 8% if you are willing to take the whole loan term of the business for a bank CD. The bank does not take untoward risks because its credit rating would fall and depositors will either yank money out, or just not come, and it would risk having its paper rejected by other banks. You have an idea of the risk, and the bank does not expect any saviors to bail it out. It knows roughly how much it can get for each of its loans from other banks and investors, and it carefully matches maturations of its liabilities to those of its assets so that no one can push it to liquidate if it does not want to.

Your risk is different but its source is the same, as is the source of the profit from all methods of investment (none of them are savings). Your expectations of reward are adjusted with risk.

Now we come to the chartered bank and the central bank to which government has granted the privilege of having its notes considered as good as gold for other banks, and who's role is to act as a lender of last resort.

Let us now tell the story of moral hazard and credit expansion as they are induced by this CB contraption devised by government:

You want give them the same 100 oz. but you can get only 2% from them, you think this is bad, and does not cover your risk, so you seek out the old acquaintance above to lend him the funds for his business at 10%, but lo and behold, the bank had made him an offer of 8% because the central bank offers an emergency credit facility at 2%, and beside the central bank has all the gold you can imagine and the bank can pay its depositors with central bank notes and send them to the central bank to redeem them in gold. Why? Because the law that created the central bank made it impossible for the bank or for anyone else to refuse payment in CB notes. So where are you now? You can now either top the bank offer with a lower rate, go to the bank and obtain the 2% with assurances of the liquidity of the bank due to its own great name and the fact that the central bank is there to warrantee the bank, or buy an equity stake at 6% current return.
You are still suspicious, so you
1. keep 20 oz. in coin,
2. spend 20 oz. (because prices had gone up since the CB was chartered, you had your eye on this great statue for a while and you heard the sculptor is dying, and you can't get a decent return anyway),
3. lend 20 oz to the business at 7%,
4. buy a 20% equity stake with a current return of 6% because that is what the proprietor is willing to part with because rising prices and brisk business have come his way and he expects the best, and has funding for 80% at 8% and the extra portion he will only part with at a higher price.
5. and deposit 20 oz. at the bank.

The sculptor spends his money, the sum you lent the business goes to the bank, as goes the sum you invested as equity, all awaiting the opportunity to be spent. The bank then lends your 20 oz deposit, and the 40 oz deposit from the business back to the business, which needs these 60 oz. The bank owns the loan, 60 oz at 8%, owes you 20 oz. at 2%, and owes the business 40 oz at 2% till it is spent.

Time goes by and the business finds a competitor who funded his business at 5% from the same bank, which having found no takers left at 8% has started lowering interest rates. The CB is still lending at 2% on its short term facility. The 5% guy had seen the profits on the business and decided to do the same, he spends the loan on facilities and materials, which cause the older business to pay more for those same resources and cause it to pay more rent now that the other business is competing for space. The old business’ margins collapse and he is bleeding money as his customers are canceling orders and going to the new business that is cutting prices in order to get himself established. The new business never manages to make a decent buck nor does the new business. Both fail to make their loan payments and the bank takes possession of the businesses and manages to recover 50% of the loans.

You have now lost the 20oz lent to the business, the 20 oz you put into equity, and fearing for the idiotic bank that invested in both businesses, you go to it to withdraw the 20oz, but those 20 oz were not available, and the bank gave you CB notes. You went to the CB to cash the notes just as the CB had lost its last oz of gold to the preceding customers, who had withdrawn the money when they heard of the new businesses popping up everywhere. The CB raised interest rates to 6% in order to get gold back from other banks and promises you will get your money back as soon as the gold comes in. But you are in good shape, you have CB notes, some who came later have only bank accounts, and the bank, having lost so much of its loans is now being pressed with 6% CB rates, which is more than he can cover, so he sells from his loan portfolio at 50% of face value in order to repay the CB the short term borrowings. The CB gets most of them back, but now the bank has negative book value and no CB notes, if things blow over, the remaining loans are going to give 5%-8% and remaining accounts at 2% are ok, the bank would eventually return to positive book. But depositors are already at the door seeking to get their money and others had written checks to deposit the funds at other banks offering 6%. The bank will have to be liquidated because at 6% short term rates, this bank can't get new deposits – it can only offer 2% - it is rapidly losing them. The court (or bank regulator) picks up the bank, settles its liabilities with the proceeds of the liquidation of assets at 50%. Most depositors lost 1/3 of their money, some more. You are lucky because you at least got CB notes, which the CB can now redeem in gold. You now have 40 oz and you come across the business in which both you and the bank put money, and the current owners want out because nothing is working with these low prices since the panic started. You pick up the business for the 40 oz.

Black BladeIs This a Recession?#5345905/12/01; 00:35:48


A recession is usually defined as two consecutive quarters of negative growth in the gross domestic product. But that definition is only a guideline. The official arbiter of recession is the National Bureau of Economic Research, a nonprofit group of economists. And it usually doesn't weigh in until several months after a recession has started. That's where things get scary. The last such "official" U.S. recession began in July 1990. Months earlier, though, the respected Economic Cycle Research Institute's leading indicators began heading in the wrong direction, causing the firm to accurately predict the coming recession. Indeed, the ECRI has accurately predicted the past three recessions and, more important, has never issued a false alarm.

Black Blade: Every postwar recession has been preceded by an energy crisis. We now have an energy crisis. If the BLS voodoo statistics were discarded and actual data were used we might see that we are now in a recession. Many of these statistical filters that are used to disguise the true state of the economy are relatively new. Many "hedonic deflators" were incorporated in the inflation data calculations during Daddy Bush's administration. Various versions of "seasonality deflators " were incorporated during the last four administrations. These phoney baloney statistical filters will have to be fine tuned further as the economy degrades beyond the point of no return and are increasingly difficult to hide behind contrived data.

working-kirkinterest rate cuts anti-inflationary#5346005/12/01; 00:51:06

Fred Bear
Thank you for your explaination. I suspected rates cuts were inflationary but with are the people yelling for rate cuts and how they were anti-inflationary, I got suckered.
It shows just how easy someone even knowledgeable can fall for The BIG lie. And if knowledgeable people are falling for it, it makes you wonder how people who because they are
under such pressure to make ends meet fall for the lies of newspapers and public schools and government officals. Because of the many BIG lies I wonder if you will see their faces when the revelation hits about inflation. There is a good chance instead of getting revelation people will just become more confused and angry. Just like with the energy
situation. THey don't realize it was the lack of construction in refineries and environment choke laws that lead up to the current problem. So you have many insisting on more or the same

geProhibition of the manufacture, sale, and transportation of alcoholic beverages#5346105/12/01; 01:22:24

The illegal production and distribution of liquor, or bootlegging, became rampant, and the national government did not have the means or desire to try to enforce every border, lake, river, and speakeasy in America. In fact, by 1925 in New York City alone there were anywhere from 30,000 to 100,000 speakeasy clubs. The demand for alcohol was outweighing (and out-winning) the demand for sobriety. People found clever ways to evade Prohibition agents. They carried hip flasks, hollowed canes, false books, and the like. While Prohibition assisted the poor factory workers who could not afford liquor, all in all, neither federal nor local authorities would commit the resources necessary to
enforce the Volstead Act. For example, the state of Maryland refused to pass any enforcement issue. Prohibition
made life in America more violent, with open rebellion against the law and organized crime.

Cavan ManUS Tax Cut#5346205/12/01; 08:20:28

GWB is now saying the tax cut can be used to help Americans pay for higher energy costs. Is this desperation in the context of getting the bill he desires or, desperation in the context of "there's not much we can do" in the short/medium term regarding higher energy costs?

The US economy runs on and needs low cost energy sources to maintain momentum.

ElwoodORO (05/10/01; 22:38:17MT - msg#: 53388)#5346305/12/01; 08:22:52

"In order to bring oil back into its relative pricing with competing products (for use as the distilate precursor) you would need bankers and oil companies to expand the oil note supply to the point where the monetary premium was diluted enough so that someone could use it for the purpose that gave it value in the first place. The dilution would bring about the familliar condition of there being waaaay more notes than there is known oil. As oil depletes from use, the leveraged oil note issuers would scramble to find more oil, and would eventually succumb to bankruptcy as there would be none that could be extracted at a cost lower than extraction from competing products. Oil notes would then become worthless."

Is the dollar today nought but an oil note?

LeighHill Billy Mitchell#5346405/12/01; 09:16:33

Just thought I'd tell you about the dinner with Mr. Ashcroft last night. You would have loved it, Hill Billy; in fact, I'm posting this because there are probably a number of people here who would have appreciated seeing this great man in person.

The dinner, sponsored by the Patrick Henry College Development Office, was held at the elegant Willard Hotel in downtown Washington. Mike Farris spoke for a while, we ate our dinner, listened to music, and then Mrs. Ashcroft (a former law professor and a lovely person) introduced her husband. She talked about how they had met in law school many years ago, and you could see a lot of affection and admiration between them. I had been hearing Mr. Ashcroft's name all day yesterday on the radio, and I was afraid he would be all worn out. Actually, he looked cheerful and refreshed. He made some interesting comments you might enjoy reading:

He talked about the words written on the Statue of Liberty: "Give me your tired, your poor, your huddled masses yearning to be free...." He said the words didn't say, "Give me your elites, your wealthy, your cream of the crop." Although alchemists for centuries have tried to turn base metal into gold (he was on topic), it has never been accomplished. However, FREEDOM is the elixir that can turn the most lowly members of society into people with self-respect and a bright future.

He mentioned that he has a three year old grandson to whom he has been reading nursery rhymes and such. As he was reading "Humpty Dumpty" one day, he realized that it could actually be a metaphor for our own country! Humpty Dumpty had a great fall - well, our country has certainly fallen from its bright beginnings. "All the king's horses and all the king's men," why, that means government! "They couldn't put Humpty together again." Message: Government isn't a solution to our problems. It's free people working together with a vision of greatness that will lift us out of the dregs into which we've fallen.

Mr. Ashcroft said that in his spare time he likes to write songs. One day, standing on his farm in Missouri, he saw a bald eagle flying low overhead. He wrote a song about it, which he recited for us last night. In the song the bald eagle stands for America, and though for a while it was endangered, it was now able to fly freely. He said this is the vision he holds for America.

I didn't know much about Mr. Ashcroft before last night, but seeing the sincerity on his face, hearing his reverent, hopeful words, and watching the kindly way he and his wife acted as they met the dinner guests who had come to see them made me realize that this is someone "real." Hill Billy, it would have made you want to burst with pride to be from the same state as this man.

After dinner (around 9:00) we took buses to the Capitol. Last night was warm and balmy, and we were almost the only people in the area of the Capitol at that hour. We had a private tour hosted by David Barton, a scholar who researches America's Christian heritage and who produces fascinating books and videos which contain well-documented anecdotes of the Founding Fathers' strong religious faith (see link above). We had the Capitol almost all to ourselves; only the security officers were around. The Capitol was incredibly beautiful and (at that hour) so quiet and peaceful. We toured until after 11:00 and then took buses back to the Willard Hotel.

I apologize for the long off-topic post!

Cavan ManLeigh#5346505/12/01; 09:31:05

He is a teriffic guy. The Willard; my, you were in the high cotton last night! A lot of good men are from MO right HBM?
lamprey_65Gold Weekly#5346605/12/01; 09:31:52

Gold closed higher for the sixth week in a row - and was up strongly during COMEX expiration week and before the Tuesday BOE auction. Gold mining shares continue to be heavily accumulated, even as Wall Street analysts are crowing about the end of the downturn in stocks.

Meanwhile, Greenspan talks of bank risks and (lo and behold) word on the trading floor is that BANKS were doing the buying in the gold pits this week.

Stay tuned.

Cavan ManLeigh#5346705/12/01; 09:36:40

Thanks for the link.
FredBearworking-kirk (05/12/01; 00:51:06MT - msg#: 53460)#5346805/12/01; 09:39:04

What concerns me the most about "knowledgeable people" is that since they do not have a clue about modern money dynamics, in the coming meltdown they will turn to the same people who caused the problem for a solution.

This ugly scenario is of course a continuation of The Big Lie. Television, IMHO, is the greatest propaganda tool ever invented. It has successfully programmed and conditioned non-critical thinking people to follow the chosen path. The path of the elites.

As for my central bank scenario, I forgot to mention that once everyone has there money and they now owe me $105, if they were to pay me back even the original $100, this would take ALL the money out of circulation and they would have no medium of exchange.

Therefore, in order for the medium of exchange to continue its function, the debt cannot be repaid. In a larger sense, more debt must be created than is repaid in order to keep the game going.

abudahhabOne Ugly Chart#5346905/12/01; 09:39:49,1655,cb1dusm1+1+cb2dusm1,00.html

The T-Bonds are breaking down badly. We are likely witnessing the beginning of a secular bear market for fix income securities.

If so, the great counter trend spread is to be short T-Bonds and long gold (or foreign currencies - EU, SF, JY).

Trail GuideComment#5347005/12/01; 09:57:47

ORO (05/12/01; 00:19:12MT - msg#: 53458)
FOA, you are missing the point of my disaffection entirely.

I'll get back to ORO's, but first PH.


Hello PH, long time no discussion (smile).

In your recent: ------ PH in LA (5/10/01; 10:49:57MT - msg#: 53345) Just a mere interjection into the tirade.----

You write:
-------------Rather, he is trying to prove the viability of his thesis, much as we all love him (smile, smile). You put your finger right on his weakest link when you say, "Gold as official money is dead at the starting blocks." Unfortunately, this is ORO's one agenda. So, of course, he is perfectly willing to loosen his ICBMs to defend it. ----------

I kind of agree with you, but I don't think this is his singular objective. He has a wonderful presence here as his commentary is coterie with the objectives of the forum. Still, I feel this is his most passionate objective and that's why I always hesitated to oppose it. Not that we would be the object of a tirade, rather that our thoughts would be rejected without "in context of the times"

-------------For my part, your proposed solution just resonates right. In the present fiat system, there is really no refuge. The lords and masters have every tool at the ready to debase the product of my labors (ie savings) and the only defense against them is risk. --------------

Oh boy! Don't you know it, PH! This is where I say that all of this is an evolution. Not so much in the changing aspect, but in the slowness of the process. Over years we (most especially Western minded savers) have come to accept the necessity of the "fiat settlement" function as it is needed in our modern economy. Ok, well enough, we can all buy that.

As such, we even understood the inflation price such a system's use places on us. People rebelled against it at first, as it started as an evil throw-back into the past experiences of fiat gold systems; where price inflation meant that the money was about to be destroyed and redenominated. Then, over time, as the dynamics of our world trade became better understood, this price inflation was
seen by most users as more of a tax that the system required to function. As long as it was low enough that we could out-gain it thru other investments, the benefits that our fiat trading economy provided was accepted.

We at first feared it, but in the longness of time we have grown numb to the slow hidden increases of this fiat inflation tax. In the US, especially, the full price of the tax is way, way above anything we imagine. Most of it hidden over many years in our "Dollar Reserve" function so as we do not conceive it's full impact upon our net worth.

Again, this world "fiat settlement tax,,,, this price inflation tax, would have been somewhat acceptable in an immoral sort of way, as society stole the productivity and efficiency gains (from those that could provide such) to pay for it. But, hidden theft is just too good of a process for our political system not to expand on. Just as I said in # 53425:

"""" It never starts out as "big corrupt government and their awful bankers" controlling the "good honest people",,,,,, rather,,,,, it's when a large enough segment of the "good honest people" are threatened with losing enough (gold) money that it could take down the economy,,,,,, they demand (elect into office) that their government and therefore bankers, expand the (gold) credit enough so as to slow the fall."""

When "We",,,, "this Us the political system is",,,, need someone else to cover our economic failings, the government does just what the "MAJORITY" demands and expands the inflation tax just a little more to cover it. Over the recent US dollar experiment, from 1971, "us Westerners" have built up an enormous inflation tax debit upon our dollar based assets. The full debit is unknown because the
dollar's reserve function has masked it's exchange rate value, there by covering up the real value of our dollar denominated assets. So,,,,,,,,,,,, to expand on your next:

-----"Invest in ________s!" they say. Fill in the blank with stocks, bonds, real estate, IRAs, (whatever) for all of which they have their fingers on the controlling strings. This is patently unfair. Once earned, the individual needs somewhere to put his savings where he can have control over
them... somewhere beyond the managers' inflationary reach. In our system of voluntary slavery, they hold our noses to the grindstone and make us all work out our lifetimes. ----------

PH, you are so right in this perception. As per my above, we invest in these assets, thinking that our out-sized gains are keeping well ahead of the inflation tax. Basically, people don't want or look for that special "somewhere to put his savings where he can have control ", because they don't think there is a problem. Can we blame them? Some of us even acknowledge that the CPI being so low is a fraud, but our other gains were so large we are still ahead! Still, just look at the lifestyle we all have because of our continued use of the Dollar Reserve Fiat.

Well, that's fair enough. We Westerners play at this game of currency cheating, but don't want others to think of it the that context. Further, if something is wrong, it was the fault of that big government and banking cabal that I never had anything to do with??? (smile)

I know that far too many think the system is healthy enough to go on forever maintaining their lifestyle. It won't. Currency systems come and go with time and our dollar is being phased out. Eventually, as the next reserve system unfolds, our US inflation rate will spike into hyper status. Not because the dollar or our economy is suddenly nonfunctional, but because all the past "inflation tax
deficits" that we built up over decades will come due. Then, not only the price of using our fiat system will be exposed,,,,, the price of all the political bailouts and American lifestyle enhancements will come due also. It will require a hugh devaluation of the dollar to cover this debt. It will appear to us as a sudden, hyperinflation, imposed on us by an unfair, European government,,,, out to get us. This is the perception ORO is, in a very small way, already bringing to surface.

Many hard money investors have evolved into "morphed goldbugs", no longer the real K-Rand carrying physical gold advocates they started out as. Now, they are wanting the dollar reserve to remain so that their dollar based gold industry investments can survive. Even wanting their leveraged paper gold to make it through the game intact. It won't.

Some of these "morphed goldbugs" want the paper gold
system fixed so it's fictional gold price can rise just enough to make their gold business investments pay off. It won't.

Not only will their "fighting the last war" strategy fail, they rile against any Thought that the Euro may cause all this convulsion to come about. So, they hurl everything they have at it as events play this drama into reality. In the process, our modern goldbugs sound more and more like
dollar advocates,,,,, and in effect their investments say they are.

The system will, in the end, completely fail to function in a way that reflects the physical price of gold bullion. Most of these goldbugs will eventually get some price gain as it all unwinds, but they will be standing at the fence looking in at real gold far out pacing everything in sight. Wondering why they even played such a game anyway. You see, our Western gold bugs are doing nothing more than your other investors, just trying to make some more dollar currency to beat the fiat tax of price inflation. They should be considering owning some of that "currency without a country" we recently heard USAGOLD talk about.

They, like most all the other dollar users will be in the same boat as our dollar's reserve function fails in a "game change" no one understands. The dynamics will rewrite our history books in:

""""what to do when the worlds one and only fiat currency is replaced by another fiat currency based on a gold wealth reserve instead of a gold is money reserve""".

Again, as MK pointed out, this new concept will create a "gold wealth without a country". Only most will perceive it as a new gold money without a country. That's ok, too.

You write:

-----Your proposed system at least holds out the possibility of an asset designed to hold its value in the face of their inflation. Seems logical to me. Seems like a system we could live with. The only system that we'll ever get, will be one that we can all live with. Maybe not anyone's perfect system. Not ORO's utopian gold standard. But at least one that most can tolerate. Who among us can really tolerate a system that sucks the value out of our savings through their insidious inflation if their is no refuge? No defense? -----------

You have a good political brain, my friend (smile).

-------why not declare your advocacy------

In the singular context that your question was asked,,,,,, I ask you, why should we? What would be added to our effort, what would be gained? More gold or fame? At this stage of life have enough of both. No, the basic value of the message would be diluted. Truly, I add that in this world the gift of understanding is expensive to package and the art of producing it is has no measurement of pay. For myself, it's priceless.

Thanks, PH
more to you later

CamelKing Wen#5347105/12/01; 10:50:57

Black Blade- You mentioned King Wen in your message, and as you probably know, King Wen is considered to be one of the authors of the I Ching. Actually the hexagrams are thought to have gradually evolved over many hundreds of years, but it was King Wen who first wrote them down while imprisoned by the tyrant Chou Hsin aound 1150 BC. They became the intellectual foundation of the Chou Dynasty which was considered one of the Golden Ages of Chinese history and it was one of the only one of the Chinese classics that was spared the famous burning of the books around 250 BC.
Cavan ManHello Trail Guide#5347205/12/01; 11:48:01

Do you suspect they have a plan over at the US Treasury to cope with these THOUGHTS ? Thanks...CM
Cavan ManPH#5347305/12/01; 11:49:03

Many thanks for the fine questions to TG.
Cavan ManTrail Guide#5347405/12/01; 11:54:09

"Truly, I add that in this world the gift of understanding is expensive to package and the art of producing it has no measurement of pay." (That is beautiful!)

"Art"; 'tis indeed. The gift of understanding is also priceless. I can only repay you and yours by saying that you've had tremendous impact on five lives. Shalom...CM

megatronTrailGuide/ORO#5347505/12/01; 12:12:25

If the TG scenario played out the price of gold(physical) would essentially be priced locally, as most of society(bond market) would have broken down, it would be worth whatever you could get for it. Possibly your life? Since most of the inflated crap we now own would be worthless, day to day transactions with gold within a collapsed system composed of angry,armed, TV educated idiots would be difficult. Silver would be far more 'useful' while gold would be 'hidden wealth'.
Cavan ManPH in LA#5347605/12/01; 12:12:58

No identity is revealed because it is more important to understand the "lesson". "Understanding" is the operative word. If an identity was revealed it would be like announcing that Buffet had just bought ___________(fill in the blanks); just another piece of digital data to trade on for profit wrongly defined. Who said and I paraphrase, with all thy "getting", get understanding!
Black BladeJimmy Carter's energy fiasco haunts Bush White House#5347705/12/01; 12:17:09


With electricity blackouts in California and prices rising steadily at gasoline pumps across the United States, Republicans recall the damage the 1970s energy crisis did to the Democratic president and ponder the prospects of George W. Bush being blind-sided by a similar crunch.

Black Blade: There will be no cooperation between the 2 major political parties as a resolution to the energy crisis will benefit the Republicans and that is unacceptable to the Democrats. The Democrats will fight a resolution as a means to point blame at the incoming administration for political gains. It is a case of a bunch of eunuchs fighting for control of the harem and not being able to do much about it should they actually take control.

Cavan ManUSAGOLD#5347805/12/01; 12:35:05

You have mail.
Black BladeSeizing Generators an Option#5347905/12/01; 12:37:30


SACRAMENTO--California Treasurer Phil Angelides said Friday that if generators raise their already exorbitant electricity prices this summer, the state will have no choice but to commandeer power plants to avoid a financial meltdown. Generators ridiculed Angelides' proposed solution to the state's power woes, claiming it would only worsen what is already a deteriorating business climate in California. They said such an action would scare off private investment in new power plants to fill the dearth of electricity supplies.

Black Blade: That would be interesting to see so many idle power plants in California. Power plants require fuel, and since the higher costs of power generation are related to the higher costs of fuel, it looks as if Kommissar Davis and his Komrades are only blowing smoke. Socialism is very inefficient so seizure of power plants is not a viable solution. California like other Third World countries will continue to experience energy blackouts. The California economy is about to hit the skids.

Black BladeEnergy Crisis Solutions Years Away#5348005/12/01; 13:02:36


President Bush declared yesterday that the nation faces an energy crisis that can be alleviated only by building more oil refineries, and said that an across-the-board tax cut is about all the federal government can do to help people cope with this year's blackouts and rising gasoline prices.

Black Blade: Unlike past energy crises, this one will be long-term. The end result is that we face an economic disaster that will make the energy shocks of the 1970's and perhaps even the Great Depression look like minor economic downturns. Now more than ever is the time to accumulate hard assets such as precious metals, real estate, basic necessities, etc. The warning signs are everywhere and are clearly unmistakable.

megatronBlackBlade#5348105/12/01; 13:30:58

One might want to hold off on the real estate purchases, as interest rates will be plunged to stave off deflation.
NetkingReal estate purchases#5348205/12/01; 14:06:44

A better scenario Mega. would be for them to rent/lease put capital into Ag., in the days to come a 1,000 Oz's of silver might buy a house, or at the worst a nice car yes. A 10,000 Oz position should put them into a seven figure net worth status.
JourneymanHistorical perspective as pallative for "free gold" malaise @Trail Guide, PH in LA, ORO, beesting, Turnaround, ALL#5348305/12/01; 15:17:05

Apparently I've been left out of this discussion as far as the
"big boys" go for some reason. However for those of you, now
officially four, I believe - - - Turnaround said he reads my
posts sometimes - - -

"Gold as official money is dead at the starting blocks." -PH in

I disagree. Those who wish to rob us (or have gotten used to
doing so) through inflation, monetary policy and fiscal policy,
etc. do, however, indeed devoutly wish it were. Why are you so
eager to believe their propaganda?

Gold may be indeed "dead" as far as _OFFICIAL MONEY_ (fiat) is
concerned - - - quite simply because those who wish to rob us (or
have gotten used to doing so) are the exact same folks who
manufacture "official money" and for completely obvious reasons
wish to _keep_ robbing us, and in fact, simply can't control
themselves in this endeavour. This is GUARANTEED to be their
ultimate undoing.

And it's true, they have temporarily gotten us into the habit of
thinking we don't have any alternatives. But so-what - - - soon
"official money," to the extent they are fiats, will be dead, or
at least shadows of their former selves, forced to be honest by
honest competition - - - from none other than gold.

"Journeyman," you're thinking, "how can you say such an off-the-
wall thing? No one does transactions in gold anymore! Besides,
as Trail Guide says, 'Over years we (most especially Western
minded savers) have come to accept the necessity of the "fiat
settlement" function as it is needed in our modern economy.'
Listen to Trail Guide, Journeyman, this fiat settlement function
_is_ necessary, for gosh sakes!! We simply couldn't exist without
it, Journeyman! You and ORO have finally gone off the deep end."

Well, we indeed need a "settlement function." But where is it
written that it must be a _fiat_ settlement function??? Please
cite chaper and verse. And it better come from a source higher
than government because their "fiats" - - - edicts declaring some
token or another to be "legal tender for all debts public and
private," etc. - - - have historically proven notoriously
impotent, especially in times of financial stress.

The one thing a modern banking system does that is valuable to
all of us is to let us make payments at a distance - - - we don't
have to drive into Richmond to pay in "cash." The banks do this
with paper-shuffling & mostly electronics. What they do is
essentially cancel out compensating transactions and end up with
a small balance that must be recorded, remembered, and eventually
actually transferred physically in Brinks, etc. trucks.

For example, suppose Bank A cashed a check drawn on Bank B for
$100 dollars, but Bank B cashed a check drawn on Bank A for $110.
There's no need for Bank B to send Bank A $100 and Bank A to send
Bank B $110. The only transfer necessary to cancel everything
out _immediately_ is for Bank A to send Bank B $10. Or they can
wait till later, keeping track of the $10 and perhaps the
balances will shift.

In practice it's only when a balance between banks becomes
excessively large that an actual transfer is desirable - - -
Brinks trucks are expensive, afterall. And in fact, as the
number of banks involved in the clearing system increases, the
necessity of transfers per institution tends to decrease,
especially when a trusted intermediary holds the excess and over-
sees the bookkeeping.

But, when transfers become desirable, Brinks trucks can transfer
gold too. That's originally exactly what they did.

As far as transactions settled in gold, they're once again
occurring quite regularly and at a rapidly increasing rate.
Check out the best known "electronic gold" web site and see for

Perhaps this is just a fad. If so, that's OK. But there are
good sound practical reasons too. Trail Guide regularly points
many out in his posts. For example:

"We at first feared it, but in the longness of time we have grown
numb to the slow hidden increases of this fiat inflation tax. In
the US, especially, the full price of the tax is way, way above
anything we imagine. Most of it hidden over many years in our
"Dollar Reserve" function so as we do not conceive it's full
impact upon our net worth. " -Trail Guide msg#: 53470

Have they gotten used to it in Indonesia, Russia, Ecuador,
Turkey, South Korea, etc.?


According to Fed Chief Alan Greenspan, 24% of current world trade
involves trade across national borders, which nearly always means
cross-currency (cross-fiat) trade. This means the trade value of
the currencies involved makes a big difference as to whether the
transactions are profitable for both parties. Any change in the
exchange rates, then, may make your widgets too expensive in the
other country, and worse if you have free trade, even in your own
country where your strong currency enables your countrymen to buy
foreign widgets cheaper than you can now make them.

If 24% of the world economy depends on cross-currency trades,
clearly it's extremely important to keep exchange rates stable.
So how do you do that with fiat currencies? In practice, there
aren't many options: Currency pegs (so many xs to ys is
"mandated" and the country(s) endeavour to keep it that way by
buying and selling each-other's currencies. Floating exchange
rates, where the currencies are free-floating and change as
market forces determine. Currency boards which over-see a strict
pegging and attempt to control internal monetary factors with an
iron hand to see the peg stays pegged.

Problem is, none of these schemes to control fiat exchange-rates
is very good. When asked at a Humphrey-Hawkins testimony whether
he liked a pegged currency, floating exchange rates or currency
boards, Greenspan replied that none of them work very well. And
therein lies the real problem with fiat currencies which, along
with the uncontrollable desire of their manufacturers to make
just a little more "for the gipper," all but guarantees their
ultimate demise.

Now imagine you're a businessman involved in such cross-fiat
trades (or a government being lobbied by such businessmen). At
least 24% of your business (and perhaps all of it) - - - and at
least 24% of your employees - - - depend on selling that 24% of
your widgets to another country in return for that other
country's currency. At the currently prevailing exchange rate.
Is it any wonder that about 60% of the approximately $90 trillion
in derivatives are interest rate (insurance) derivatives?

Ultimately a great deal of the political agitation that Trail
Guide points to to mess with the currency comes directly from the
unpredictable, uncontrollable nature of inter-fiat exchange
rates. Ultimately this can often lead to trade wars, trade
protectionism, and competitive devaluations. And the advantage
to having the additional printing-press advantage of "reserve
currency," to "currency wars."

A good place to look currently for some of the real-world effects
of unstable exchange rates is South America, particularly
Argentina, Chile and Brazil. (See the link in the header.) And
perhaps here at USAGOLD for front line skirmish reports on the
Dollar vs. Euro.

None of this, naturally, would be a problem if international
trades were conducted in transactions denominated in gold - - -
an ounce of gold is an ounce of gold in every country, regardless
of politicians, bureaucrats, bankers, laws or regulations. And
that equivalence persists, essentially, forever. That would put
an end to a large number of those folks agitating government for
special dispensation from the laws of supply and demand - - -
and/or bad business decisions.

THIS, along with "electronic gold" all but guarantees
international trade will migrate to transactional gold. And it
only makes sense that this use of gold for transactions will
further expand to interpersonal trade as well. It may be slow,
but it may be faster than any of us think.


And once again it baffles me how so many otherwise rational
people, particularly here on this site - - - and supposed gold
advocates at that - - - fight this logic, and do so in the face
of all the lessons of history.

I remember Carl Sagan explaining "geologic time" by showing how
long humans have been on the face of the earth. This time period
was barely perceptible. A persentation of "economic time" would
show an equivalently short life-time (or time-line) for our
"modern" fiat. Unlike man, however, fiat will almost certainly
prove to be a recurrent but short-lived fatal mutation which
always eats it's young and then kills itself.

Panic if you must, but transactional gold is destined to return,
probably for good.


P.S. Trail Guide, the only people running to governments and
agitating for special dispensation from transactional gold would
be incompetent businesses (not those vicitmized by the
unpredictible fiat exchange rates in today's "system") and
bankers and would-be tyrants nostalgic for the days when looting
the indigenous populations was so much easier - - - all you
needed was a printing press.

P.P.S. I don't think anyone need worry about ORO wilting under
the pressure. Same goes for me. If you feel I'm patently wrong
- - - or even mildly incorrect, please feel completely free to
correct me in as harsh a manner as you can muster. (I'm on the
road, so it may be a week or so before I catch up with such
corrective posts, however.)

megatronNetKing#5348405/12/01; 15:58:55

Way ahead a ya, baby! Look out above!
SanchoOro#5348505/12/01; 18:04:46

Regarding your post 53458, WOW---after trying to "digest" all this I developed a major obsession for some small island with a dog that always wags his tail to see me wherein I could practice a degree of self-sufficiency and retreat from coping with the homo-sapien species.
R PowellSomething for the silverbugs among us#5348605/12/01; 18:16:15

This prints out at three pages.

R PowellAnother one for silverbugs#5348705/12/01; 18:21:56

Seven pages in print for this one. Hope it's good, I haven't had a chance to read it yet as my Saturday "honey-dos" (painting) to some time today. Listened to the Red Sox ballgame while painting.

Hill Billy Mitchell(No Subject)#5348805/12/01; 18:46:42

Cavan Man @ # 53476


Soloman's daddy (David the King) told him that, I believe. You knew that but others may be curious. Mighty good advice, I might add.

Very respectfully,


R PowellJourneyman#5348905/12/01; 19:04:52

Thanks for the L. Reichard White link and your post. White has always seemed logical to me. I'm wondering if the whole world will have to be saturated with U.S. dollars before too many of them can start devaluing their worth or what/when will trigger their return (big float)? Of course, I also wonder what will cause POG to change into a four digit $ number and when this will happen and how fast it will happen once it starts. If it's happening now, I sure wish it would progress a bit faster. Thank again!

USAGOLDSpot the Dog. . . .#5349005/12/01; 19:37:32


You've heard me talk about Spot. And the very interesting posts about stirring this golden canine to life from Goldfly and Gandalf. Well, while we were busily discussing the issues of the day, our friend, Spot was on to bigger and better things having infiltrated the White House. Now the real story is here for you in picture form courtesy of our wizardrous friend, Gandalf the White.

P.S. I hope this works. I'm not as good at this sort of thing as Randy.

Well here goes. . . . .

If it doesn't, maybe Randy will fix it for us. It's at the server, Randy.

Cavan ManHill Billy Mitchell#5349105/12/01; 19:47:51

HBM: No, I did not know that. I read the Bible everyday (almost) as well as "The Ladder of Divine Ascent" by St. John Climacus (6th century Abbot of a monastery on Mt. Sinai)--not to be missed! Anywho, how 'bout we chase the white ball sometime in June over here? Middle of the month would be best. This email address is being protected from spambots. You need JavaScript enabled to view it.
Trail GuideComment#5349205/12/01; 19:54:32

Cavan Man,
Thank you so much for your kind words and respected interest. Onward, my friend! (smile)

--- Apparently I've been left out of this discussion as far as the-----

If you will just check your back to see that it is all wet. (smile) Not dry yet because of that water balloon I tossed at you in a recent post. No sir, if you write here, you are not out of it(grin).
Thanks for writing, I'll (and others) will be replying !

Black Blade,
Are you, by chance one of those people in the TV show "West Wing"? I'm always amassed at your ability to gather and organize so much material. Thought you were one of the upper level fellas?
Thanks for sharing.

Now, once again, back to PH:

PH in LA (05/11/01; 09:52:22MT - msg#: 53412)
Fiat legal tender vs abolishment of futures markets by fiat

------"This note is legal tender for all debts public and private"------So sayeth every FRN used in commerce. This is a topic that has been elucidated here at great length... even and especially by ORO himself. ----------Now, one supposes that any legal system that specifies that gold interest can be settled with any "note (which) is legal tender for all debts public and private" that no contract
could be enforced in gold. -------Does this mean the abolishment of gold as a monetary instrument? ------Are all gold transactions thereby abolished?-----

PH, you sure don't need any Gingko - Biloba to clear your thoughts. This post of yours hit the logic I was straining for,,,,, right on the head! I edited it to do like Randy (thanks Randy) sometimes does to mine. To allow for an expanded point.

Pulling from the thrust of my last comment to you; we all accept, use and somewhat prosper by using this fiat money called legal tender dollars. Further, we all pay our price inflation tax as a cost of doing business,,,,,,, as long as it doesn't get out of hand or we can cover it with other
investments. Or, at least, as long as we aren't able to see the real value destruction this tax is building up under cover of it's "currency reserve" power. However, for the purpose of grasping our reasoning here,,,,, concerning my recent trail walk talk about changing the collateral rules of gold,,,,,,,,,,,, lets look at your counter point to ORO.

He made a long reasoned post, expanding his thoughts on why no authority could enforce such a law. Yet, your point above presents the essence of this concept, in real life as we have lived with it for decades. Fiat dollars, as legal tender, are our money because court after court has upheld that our laws declare them so.

Some say that international law and protocols cannot have an impact? Well, they do when it's in the reining powers best interest. The US now and the EuroZone later. In present context; here we have 200+ million westerners and countless other world citizens,,,, all having lived a good portion of our lives using this very system,,, working under legal tender status,,,, and all doing so under our American law.

Yes, this legal tender fiat money,,,,, this concept of digital trading wealth,,,, is used by most as an "International Protocol" contract,,,,, made common through the IMF and the Jamaica Accords! It's the same US dollar system that made the settlement of debt in gold almost illegal and the common use of of our money a world wide obsession! How about that for not being able to make something stick?

Now; when I proposed to Econoclast (on the GoldTrail); that an understanding could be projected that gold could not be seen in a court of law as attachable collateral in any contract form,,,,,,,, some pointed out that this couldn't be done. Yet, in opposite reflection, it almost already has (smile)!

Our thrust is that; by taking physical gold out of any and all performing credit structures, one enhances the fiat credit process,,,,,,, but more importantly,,,,,, frees the ability of gold to value any and all currencies ---- against each other----- not against gold. Once in place, physical gold value would soar, but not do it as money,,,,, rather as an asset. In this fashion, raw gold value could not be inflated or deflated and in doing such would reflect it's possession value as wealth. Tradable wealth that you or any government could use to buy anything,,,,,,, as long as it was a payment in full without credit.

Some fear that a congress of laws would be required to control such a position? No, just one,,,, kind of like our legal tender law. How about "gold is not subject to collateral attachment of any debts public and private". Of course, gold loans could be written and entered into,,,,,,,, gold options could be created,,,,,, Bullion banks could do a huge business in lending gold and governments could lend it all! But, if any of these contracts defaults and ends up in a court of law,,,,, it dead at the door! I'll leave it to you to figure out how long this business would continue.

PH, we are staring at one of the biggest paper gold lending games ever created on the face of the earth. Further, it's about to completely fail as the main currency it's all written in "craps out" (had to throw in some of my gutter talk (smile)). When all of this washes out, how do you think the next reserve currency owners are going to preserve their hegemony? That's right, I knew you already understood all this.


ETFOA#5349305/12/01; 20:54:45

Hey FOA - thanks for your thoughts. You write in part;

"Keeping gold out of the fiat arena would be more simple than many hard school advocates envision. The key to that is
found in the implementation of international law. The leading economic countries (EuroZone in the future) would have but
to establish a protocol that forbid the enforcement of collateral attachment anytime physical gold is traded, lent or
involved in a trade."

Yeah baby! Now that would be great, eh?

FOA, I prefer free markets over your socialism. The idea of international currency laws is most repugnant. Seems to fly in the face of any kind of gold advocacy.

Max RabbitzBleeding Centaur#5349405/12/01; 21:00:40

It would appear that the good Knights have been much amused with jousting this week. But news from afar brought by Sir Powell (#53440) has me much baffled. A small Australian mine, named for a mythical (?) beast is said to have problems for selling gold yet to be mined at very poor prices, $440 Australian dollars out to the year 2000 and 9! Now this dollar now fallen to lower than low.... I figure the price to be $221 U.S. and no more($423AUD x 0.5218). Problems, indeed! They are now said now to be looking to close some 1,610,000 ounces or 50 some tonnes.

What I do not understand is thus. If going to be bankrupt and bond holders step up to be paid, why must those old hedges be unwound or be bought? Why not default and so what if they do? Give them (banks?) a shovel and say dig tell you're through. It is said there are others, in this far distant land, with similar thinking and problems to boot. Did they all hedge in this Kangaroo currency too? Would not most be or soon be in the same situation and the Centaur we see bleeding is but at the tip of the lance?

megatronCan't hold back!#5349505/12/01; 21:37:11

Anyone who could not profit or lock in from a $400 rise in the price of gold/$20 silver is a complete moron and should never go near any kind of speculation or investments, period. All this blah blah about monetary gold seems directed towards people with glacial decision making speed.
It's going to take a long time for either of these scenarios to play out. For real, intelligent traders, 1 week is a real long time, to put it in perspective.

GoldflyET...I bet you've heard of this guy.....#5349605/12/01; 22:10:42

Hey, maybe you ARE this guy!

Check it out....Justin Raimondo


An international hate campaign against Italian rightist leader Silvio Berlusconi is now going into high gear. The goal: saving the Euro-communist ("center-left") government now in power,and derailing Berlusconi's hopes of becoming Prime Minister in the upcoming [May 13]parliamentary elections. It's the same sort of drumbeat that greeted the rise of Joerg Haider, the leader of the Austrian Freedom Party, initiated for the same reason: Berlusconi, like the Austrians, threatens the socialist unity of the emerging European Union.

Chris PowellRecent international news stories about GATA#5349705/12/01; 22:28:15

Canada's Financial Post say gold can't possibly
sustain a rally:

South Africa's Business Report's dismissive story
about GATA's Durban conference:

South German News features GATA:

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.

Trail GuideComment#5349805/12/01; 22:36:34

Hello ORO,
I know I keep talking about your presentations, but as they say in hollywood; "that's the price of fame"!

ORO (05/12/01; 00:19:12MT - msg#: 53458)

You write:

------FOA, you are missing the point of my disaffection entirely. In my preferred rendition of a monetary system, there is no particular official money, just a legal recognition of a commonly accepted money (and no limitation on it being only one or many, if the markets leave one surviving money – probably gold – fine, if not then two or more are fine). Bankers have no charters, and their liabilities stand on their own. This is not a gold standard unless it turns into one.---------

Your heart is in the right place and you have a brilliant mind to keep it pumping. (smile) But, what this entails is us starting creation all over again. My friend, I have studied a little bit about old gold, it's progression throughout civilization's timeline and how we got to this point today. Yes, we may and most likely will return to a period that recreates what you say above. But, that will happen after this bunch of humanity gets through experimenting with it's fiat creations. ORO, the world is just not ready to go again where you are pointing right now.

You write:
-------Lenders and equity investors do not have the expectations you presented. Only bank depositors do, even then only those who think of a bank as a depository and clearing house rather than an investment fund like a money market. For savers interested in a gold vault and clearing
service the markets have long known to provide a service with minimal or nearly no risk. For everyone else, who is investor and saver, it is a traditional bank he seeks. No bond holder would ever imagine the promises in hand to be money or a good substitute for it. They are investments,
NOT savings. They are a fruit tree owned for the future fruit it is to bear, not dried fruit that will last

I agree. However, we are living at the very tail end of what we have called "this currencies timeline". True you are,,,,,, our current world of lenders and investors don't seek a separate wealth form in singular gold. They presently need only the one dollar currency to play with. This view is
indeed the extrapolation of their life's money experience, as they have know no other. I don't blame them and group their perspectives into one, calling it the "Western Thought".

To them, our present currency system will not fail to deliver their wealth, intact, against all odds. In this they save their assets in the position that the dollar's contract will stand. ORO, our society does not grasp the gut feeling that comes with currency default. When an icy stare of a contract specialist leans across the negotiating table and says "what if we walk"?

They walked in 1971 because of political circumstances (oil figured largely in this), they did it then because they wanted to. This time, the US will walk because it has to! Run the printing press, full out, and retain a super inflating currency system,,,,,, or drop the ball and be subjugated to entirely using the money of another nation block. This is the eventual checkmate.

In this, your investors and lenders will understand the need for Another asset beside their fiat. Another fruit that "will" last generations.

You say:
--------- You may have come across a Barron's article-------------It is not that people first had banking and then government came in to bail out the depositors by forcing everyone to accept bank paper instead of gold. It is the other way round, bankers were incredibly cautious when they were not granted any privilege, the few happy go lucky Wild West banks were not at all characteristic of the situation when the central bank was closed down (both the first and second banks of the US did not have their charters renewed).------------Your view is of a world in which people start out with groundless expectations to make foolish decisions after which they cry to government to bail them out. That has never been the case. It has always been government that made promises that it could not keep knowing that the people have no alternate government to turn to if the promises are not kept, and it is this same government that gave privileges and subsidy to banks so that they could
make promises they could not keep with impunity because all banks were governed by the same rules, leaving customers no choices and little opportunity (and therefore incentive) to practice judgment. The rules were not made to fit the customers preferences within the confines of the reality, they were set into law in order to frustrate him.----------------

But ORO, lets reason a moment? You are absolutely correct in the above and more! Yet, that portion of the story has made the case of every hard money author and it's still only part of the human play. Better said, it's only part of the perception.

Why do you think there were banks at all, back then? They existed to provide a service private people would not perform very much of,,,,,,, lend gold. Back then, nobody wanted to lend their money. Not to strangers, not to schisters,,,, and certainly not to family members (smile). Gold money was cash money and credit wasn't offered in mass. People were suspicious of each other and rightly so. We are all a bunch of crooks! Ha! Ha!

Now banks were, as they are today, just middle men taking your money, lending it to others and trying to profit from it. Back then, there was certainly a growing demand for credit, it's just that no one wanted to take the risk to lend. The same as today, there is (was) a dynamic growing demand for credit that is over and above the function of cash trading. (that is wealth for wealth or gold for
goods commerce) Banks were seen as filling this gap and taking the risk the private sector would not provide.

In this context one can understand that society created the demand for banks by wanting credit. By extension, our nation demanded banks and the service they provided. The very nature of society was to want to borrow and accept the risk of that credit, but not to lend with the the risk of losing
their own money. Both then and now this is a basic human trait. One of the reasons most would not keep their money in a bank without FDIC insurance. Don't mind borrowing it, but damn if I'm gona lose it???

So,,,,, this creature that was forced upon us was really something we demanded. You said above that:

-----this same government that gave privileges and subsidy to banks so that they could make promises they could not keep with impunity because all banks were governed by the same rules, leaving customers no choices and little opportunity (and therefore incentive) to practice

Oh boy, that paints them poor customers as little "darlings",,,,,, Cowboys, New Yorkers and Denver society that just lost their way? (smile) My friend, gold coin was money back then, you didn't have to use the banks for transactions and you didn't have to borrow it's money! We created the demand for their service then, because no one else would lend to us, period! There was choice,,,, there was opportunity to practice judgment,,,,,, you didn't have to borrow! However,,,,, when those little "darlings" lost all their money in railroads, cattle and silver mines (grin), they screamed to high heaven for more credit and damn the gold supply. Had they done their credit business with the wife's father-in-law, they would have been hanging from the nearest tree. Instead, they asked the government to "make them bad banks" lend more, no matter if they had it or no.

You state several questions:

------ Is it structured into human society that political representatives be crooks? ----
Almost as large a percentage as the electorate that chooses them.

----Is the balance of power between the people and their government fixed in nature so that government can always pull the wool over their people's eyes? ------
No, nature gives equal wool to everyone, both public and private.

----Are the people always going to be overwhelmed by government? ------
Only the ones that cannot out think government.

----Will people not learn from their own experience and from history? ------
Most never have and never will.

------Has the availability of instantaneous information and thoughts not changed anything?-------
The answer is no.

ORO, my trite answers are unfortunately true to reality. Ever more so today, we must deal with what can be done, not what should be done.


Further you went on to use my two examples, one of a gold loan and the other of paying for an asset. However this went out of context in the second as I was establishing an example of paying cash for an asset,,,,,, for a business,,,,,, for anything. The contrast was in not taking on credit to conduct commerce.

You say:

-----In the 100 oz loan,-------
-----In joining a partnership-------

---------I am sure you are aware of the difference between a loan and equity ------

Well, yes I am. In a further extension and clarification of my point; in paying cash for anything we are establishing equity in what we buy. Most financial thinkers try to limit the equity expression to mostly business or financial asset ownership. However, there is equity in any cash purchase. From shoes and cars,,,,, coats and houses,,,,,,,,, electricity (Black Blade) and natural gas,,,,,,, even
enjoyment equity in the theater ticket because of the great play one gets to experience.

The problem today is that few of us have established in our minds the dual nature of using our tradable wealth. Credit, we are all aware of as credit cards,,,,, debit cards and bank loans,,,, can and does buy our way. But the closest comparison to using gold in a final, non credit trade is seen in paying cash for everything. In this context, most people could relate to using gold as a trading asset where credit is not wanted.

However, in the gold not as collateral position; Greshams Law would do the work that our ancient gold owners understood. Gold would travel and trade on the road,,,,,, in our day that would mean buying what was dear and most wanted. Gold would be dear, super valuable and saved, in
possession as a wealth of ages. Giving legs to whatever fiat the world needs credit in. Fiat would be spent and valued for the credit qualities a digital currency could provide, right beside gold.

In closing I say,

Gold, the money it never was and the wealth it never forgot to be.

Thanks for your great mind, sir. Your comments are always welcome on this trail we walk.

"We watch this new gold market together, yes?"


Trail Guide(No Subject)#5349905/12/01; 22:48:10

Hello ET,

You say:

----FOA, I prefer free markets over your socialism. The idea of international currency laws is most repugnant. Seems to fly in the face of any kind of gold advocacy.----

Well, you certainly expressed you complete grasp of it all in that. I commend you sir, few can show so much with so little. ??

Good night all

SHIFTYold news articles on gold price#5350005/12/01; 23:56:08

Who posted them ???

I have not been able to keep up with all that is going on here at the forum since I got home last week.
While reading the news stories about GATA today, I am reminded of the news articles someone posted here about a year ago. Sorry I cant remember who it was. They were from back in the 70s. There was one that stands out in my mind. I remember it saying something about how the gold price could never double to $70.00 an ounce. I think it would be nice to read those articles again to compare with the media spin we are being treated to today.
Does anyone know who it was that posted those jewels?

How about a repost?


JourneymanFor lack of perception (and poor intel) the battle was lost @Trail Guide, ORO, ALL#5350105/13/01; 00:07:43

"Yes, this legal tender fiat money,,,,, this concept of digital trading wealth,,,, is used by most as an "International Protocol" contract,,,,, made common through the IMF and the Jamaica Accords! It's the same US dollar system that made the settlement of debt in gold almost illegal and the common use of of our money a world wide obsession! How about that for not being able to make something stick?" -Trail Guide (05/12/01; 19:54:32MT - msg#: 53492

That's the type of thing people always think (or at least say) when they institute their fiats. And especially reiterate strongly when their fiats are reaching the end of their time lines. And some are duped and many opportunists go along for the ride.

They said it of French assignats - - - up through their first nine-and-a-half years. They said it of German marks - - - until after WWI. They said it of the Brazillian currency just before the "real" and of the Ecuadorian sucre - - - until last year. They said it of the Turkish lira. Etc. They're saying it of the dollar. But if Trail Guide is correct, a similar fate awaits the dollar as well. And it's just around the corner.

The dollar's lasted only about 30 years unconnected to gold, only about three times as long as the French assignats. World fiat in fact has existed only for thirty years unconnected to gold.

I had many Polish friends that, since Russian communism had lasted for a whole 70 years, it would never end. That was before the Berlin Wall came down of course.

So what's different today than ever before in history that makes some folks here so optimistic about modern fiats??? In the above contexts, why is it so hard to imagine transactional gold?

The only possible difference today is that people (at least those with a "western" mind-set) don't seem to know they have gold as an alternative. But all the mythology still exists in the language and in our minds. Businesses well-know the problems with international exchange brought about by exchange-rate instabilities (and countries know of the instabilities brought upon their populations by the 24% of their businesses made unstable by unstable international exchange rates.)

As Judy Shelton suggests in "Money Meltdown,"

As the global economy increasingly becomes a reality with improved communications throughout the world, individuals in different countries will have less tolerance for the discretionary actions of fallible central bankers that undermine the value of money. Producers and consumers will want to deal directly with each other. A gold standard provides the common denominator for conducting business across national boundaries -- a sort of monetary Esperanto. National currencies function as dialects of the same root language, gold-backed money. -Judy Shelton, Money Meltdown (New York: The Free Press 1994), p. 259

The Central Bankers apparently suspect the truth as well as per their statement out of Jackson Hole about a year and a half ago that they were about to become extinct. That might explain why Alan Greenspan, an unrepentatant gold advocate, somehow got to be head of the Federal Reserve. After all, if some of us here at USAGOLD finally figured out that transactional gold was on our horizon, The Powers That Be must have had an inkling awhile back don't you think?

I should point out that Shelton assumes, as do Trail Guide and many others here, that some sort of intermediary in the form of domestic currency units need to be defined in each country and tied to gold. This indeed, as ORO points out, is not necessary except as far as the current generation of users is concerned. Transactions can, should, and will be conducted in grams and/or ounces of gold.

There is indeed much inertia in any attempt to get a given population to accept changes in it's culture. The decimalization of British currency and metrification are examples.

It was relatively easy to go from gold-backed dollars to fiat dollars because the fiat dollars were designed to mimic gold-backed dollars, and only careful observers noticed the counterfeit, and as Keynes noted of the inherent inflation, not one in a thousand could diagnose the results.

But gold is different and, with electronic gold, the transition back to it won't be that difficult. Gold has always been perceived by the population to be a more solid standard of value than fiat, the fiat _dollar_ included. (And a tip-o-the-hat to the noxious habits of the fiat mongers.) When was the last time you heard someone say "sound as the dollar?" People still say "as good as gold." And while they used to say "The _dollar_ is as good as gold," they NEVER said "Gold is as good as the dollar." Which is the _standard_ in peoples' minds do you think, gold or the dollar? And what about in India and China?

The world (if only the western world) has been off of gold for only thirty years. Want to bet we get back on it a lot faster than that, especially when the dollar dumps? Business is ready - - - remember that Barrons article.

I have talked to many folks about this, and despite the thirty-second attention-span and mind-set of trader-gamblers, the average person, even in America, is not aware that gold is dead. They still want gold, and when they become aware it is widely available in the form of electronic gold, many will jump at the chance to use it. I know seven already.


P.S. Most of these seven thought I was crazy to invest in gold, but they jumped right on the electronic gold bandwagon when it cruised by. Go figure.


The recent energy crisis is not the typical energy crisis that we have experienced in times past. This time the energy crisis occurred even though it was obvious to many and that it could have been avoided. Much of the problem arose due to inept government and poor planning. In short, the energy crisis resulted from strong economic growth and the demands of a new electronic-based economy and insufficient investment demand for energy beyond the current energy infrastructure to deliver any additional energy. The increased demands for energy finally overcame the available supply and ability to produce energy. The argument against price controls is that they don't work because reduced profits hinder investment and provide no incentive for the consumer to conserve energy. Under the regulated utility environment there was little incentive for investment to increase electrical supply and to upgrade infrastructure without a reasonable expectation of return on investment.

In the 1970's when there were energy crises, these crises were due to reduction in the supplies of crude oil. This time we have numerous crises that are not just confined to artificial supply disruptions. This time these energy crises have focused on the usual suspects such as oil supply, natural gas production, and electrical generation. However, this problem extends to even more basic areas of concern such as the shortages in refining, hydrocarbon transport, and electrical transmission that have exaggerated the current energy crisis into a series of panicky rolling crises. The decaying grid of basic electrical infrastructure is not sufficient to handle any new significant increase in electrical supply (as if any new supply will be coming online anytime soon).


The US economy will suffer as a result. Slowing economic growth may result in less energy consumption accompanied by a corresponding drop in energy prices. Higher energy prices will likely result in energy conservation. It is called the free market. Under utility regulation there are price caps that provide no incentive for energy conservation and a worsening of the crisis. Bottom line - energy is a limiting factor on economic growth and if steps to upgrade basic infrastructure are not taken immediately, then energy crises are likely to become a commonplace fact of life well known in the Third World. Each ensuing energy crisis is likely to cripple the system and consumer confidence as each rolling energy crisis becomes progressively more frequent and more severe. Just imagine what that means for the US and even the global economy! The system is under severe stress as there has been no incentive to upgrade or add capacity. It is unfortunately too late as I believe that it would take Herculean efforts never before seen in the history of man to overcome years of apathy and neglect. The old decaying electrical grid is in a sorry state of disrepair and is especially vulnerable to even the slightest malfunction which in turn produces greater stress on the system. It also goes well beyond electricity. Many of you may remember last summer when there was a midwest gasoline pipeline that was out of commission for a couple of weeks. The result was the loss of 200,000 bbl/day supply. The result was that in Chicago there were 1970's-style gas lines and closed gas stations.

Today, California suffers the indignity of living under energy conditions found in the Third World. Limited capacity to deliver electricity and natural gas to fuel power plants has pushed utility rates higher in the face of botched deregulation, in spite of price caps on regulated businesses. The result so far is the bankruptcy of the state's largest utility PG&E and the near bankruptcy of the next largest utility SoCal Edison. In order to add a little more electricity to the western grid, the Northwest aluminum industry agreed to close up shop for the next two years and sell their juice to the poor Californians. Although the state of California has had to face the music and admit that they royally screwed up, they only now have begun to add new electricity generation facilities. Guess what? They screwed this up as well. Not only are they threatening out of state producers and suppliers with criminal penalties and lawsuits based on perceived price gouging, they now are building NG-fired power plants without ensuring that they have the fuel to power them. True, no one has ever accused these budding rocket scientists in Sacramento of having much intelligence, but one would have to question the wisdom of a "build it and they will come" strategy when natural gas is in short supply and in high demand.

Other problems that will adversely affect the energy crisis are new age environmental policies and taxation. The various grades of EPA mandated fuels that are required from region to region also ensure that a uniform standard gasoline does not exist. This results in supply disruptions and higher costs for reformulated fuels. This also means that the market is forced to raise prices and impose disruptive demand reductions to bring demand in line with supply. Taxation also impedes progress toward developing supply and infrastructure. In the 1970's during the "oil shocks" when energy companies were making profits there was the incentive to upgrade and expand infrastructure and develop hydrocarbon production capacity. However, the US government responded with "Windfall Profits" taxes. Upgrades and infrastructure expansion promptly ended. There are now calls from some radicals for new "Windfall Profits" taxes to punish those who provide energy to the public. This threat has so far done some damage as energy producers, providers, and marketers wait for direction rather than expand energy supply. So here we are with a severe energy crisis that will take down the US and possibly the global economy.


There is not much that can be done by the individual to avoid the energy crisis. However, one could take steps to soften the blow from the economic fallout. Unless one is wealthy enough to retrofit their home for electricity generation with renewable energy sources, store hydrocarbons for home generators, or simply can well afford the higher costs of energy when there are no blackouts, then prepare for living as your ancestors did. Buy blankets, firewood, candles, batteries, lanterns, etc.

The basic necessities are the most critical such as food, water, and shelter. This is easy of course and takes minimal thought and preparation. I am not suggesting that anyone dig a bunker, crouch down with firearms, and guard their supplies from marauding hordes. I am simply suggesting that the economy may be in such disarray that the store shelves may not always be stocked if basic supplies cannot be delivered due to restricted fuel supplies. What should happen if one were to be unemployed for an extended period as the economy reels from the effects of the energy crisis. What about natural disasters that can restrict access to market or keep supplies from reaching the market. The average city supermarket keeps about 3 days of food stuffs in inventory - something to think about. I am not suggesting anyone get used to military-style MREs either. Just buy supplies of type of foodstuffs that you and yours would consume anyway - just have some extra on hand just in case. It is simple basic survival insurance. Besides, a typical American family could save a bit of cash by buying in bulk at a Costco or food warehouse for example. A few jugs of water with a drop or two of Clorox bleach can keep water potable for several months and inhibit the growth of microbes. These are just commonsense preparations.

There is of course the portfolio insurance aspect that we here have discussed before. These preparations sound much like Y2K mania doesn't it? I guess it comes down to one's comfort level and how well one can sleep at night should the undesirable effects of the energy crisis come to fruition. Most have cash invested in IRA's, 401K's, mutual funds, stocks, and bonds. When the economy falters and when one should need funds the most, this is the time when one's investments are likely to be under severe stress. Remember the Deflationary Great Depression? Well, maybe not. During the Great Depression, private gold ownership was illegal, however, Homestake Mining stock as a gold proxy saved some investors from financial ruin. Even the dividends rose substantially enough that some lucky investors were able to come though relatively unscathed with preservation of capital. Remember the stagflationary 1970's during the 2 recent oil shocks? Yeah, that's more likely. Remember how the markets tanked, everyone was wearing WIN (Whip Inflation Now) buttons, and fuel prices rocketed higher with long waits in long gasoline lines? Well, here again gold did very well. This time private gold ownership was legal and those who had gold were able to preserve their wealth and sail through those turbulent times relatively unscathed as well. In fact every postwar recession has been preceded by an energy crisis.


This energy crisis will surpass the last energy crises as outlined in the preceding paragraphs. Only this energy crisis is likely to precipitate an economic collapse that will surpass any economic crisis ever encountered in modern times. In spite of what new age economists may want to believe, it was "cheap" energy that fueled the Market Miracle of the 1990's. Unfortunately those in power squandered the golden opportunity with inept leadership. When additional energy sources needed to be cultivated and infrastructure upgraded and expanded, our leaders were asleep at the wheel. The mantra was that energy is no longer important with a "New Economy" and that "Pie in the Sky" fantasy has been proven to be a mere mirage. It is too late for any rescue without an aggressive vigorous expansion of hydrocarbon production, upgrade and expansion of energy infrastructure in the energy sector, relaxation of environmental regulations, and removal of punitive energy and profits taxes. For the individual, there is only preparation to meet basic survival needs and to insure one's portfolio with hard assets such as gold for wealth preservation. Indeed - this energy crisis really is different this time - it's going to be much worse than was anticipated. Why do you think that both George W. Bush and Dick Cheney, both oil industry insiders, are scared to death of this new energy crisis?

- Black Blade

Black BladeEnergy Industry Raises Production at a Record Pace#5350305/13/01; 00:59:55


The energy industry is drilling for natural gas, building gas pipelines and constructing power plants in response to high energy prices. The intense activity comes as President Bush prepares to unveil a national strategy to address what he has called an energy crisis. The policy is expected to emphasize streamlining of regulations, many of them intended to protect the environment, that Bush administration officials say have caused an alarming gap in energy supplies.

Black Blade: As I mentioned in the previous post, the only way out is an aggressive vigorous campaign of exploration and production of hydrocarbons and the building of infrastructure. Still, I believe that it is a matter of too little - too late.

Black BladeGas price linked to additive#5350405/13/01; 01:11:27

Bush could waive rule to add corn-based ethanol to clean the state's fuel


Just when it seemed California's energy picture couldn't get any dimmer, the specter of even higher gas prices is looming. President Bush, who has already angered Californians with his electricity policies, is expected to decide soon whether the state can opt out of the Environmental Protection Agency's rules to add an oxygenate to the gasoline supply. Without a waiver, refineries will be forced to add a corn-based product called ethanol to gasoline, a move California Energy Commission officials predict could increase prices at the pump by 3 cents a gallon.

Black Blade: Waive environmental restrictions on reformulated fuels in California? It stands to reason. Environmentalism is fashionable until it hits one's pocketbook. Then it loses its appeal.

How does that old Cheech and Chong song go? - Oh yeah, "Save the whales - shoot the seals."

Black BladeCustomers vent to state about rising power rates#5350505/13/01; 01:32:17


State regulators got an earful about their coming electric rate increase Friday, first from business groups concerned about the effects on companies and the economy, then from South Bay residents who said they are already feeling pinched by high energy costs.

``We don't have an energy crisis,'' Morgan Hill resident Vincent Scott Fiorenza, 31, told Lynch at the meeting at the San Jose DoubleTree Hotel. ``I think we have a leadership crisis when power companies are allowed to gouge. . . . What is being done to protect us from this fraud?''

Black Blade: Yeah, cheap energy is a guaranteed right. Utes are charities and should provide free energy to all. Amazing that there are still those who think that the energy crisis does not exist and that it is contrived by the energy companies for profit.

One should do a study on the high energy costs of the underground economy. Since this article is from California, maybe a study on the higher costs of the energy intensive indoor cannabis growing industry (California's number one cash crop). Will they use a hedonic deflator and instead factor in a replacement commodities such as Psylicibin mushrooms (hallucinogenic magic mushrooms) that require no indoor lighting? Hey if hedonic pricing is good enough for the BLS phoney baloney PPI and CPI inflation data, then why not for Californian farmers?

Black BladeBrazilian Candlemakers Smiling #5350605/13/01; 01:39:16


SAO PAULO, Brazil (AP) - As Latin America's biggest country braces for daily power cuts of up to four hours, Brazilians are gloomy. They fear increased street crime, riskier hospital visits and long walks up stairs in high-rise condos. Some even say rationing could plunge the country into recession.

Black Blade: Speaking of the Third World, just substitute California in place of Brazil in the article. See any similarities? Nuff said.

Golden Dreams all.

Turnaroundfood chains#5350705/13/01; 02:28:09

Journeyman (05/12/01; 15:17:05MT - msg#: 53483)

"Apparently I've been left out of this discussion as far as the
"big boys" go for some reason. However for those of you, now
officially four, I believe - - - Turnaround said he reads my
posts sometimes - - -"

I said I read most all of this stuff, J-man included. I type really slow and think even slowlier so can't contribute much. Usually it takes more than I can muster just to grok. Lately it's been like watching a team tennis match with 15 balls in action around here.


Trail Guide (05/12/01; 09:57:47MT - msg#: 53470)
"Well, that's fair enough. We Westerners play at this game of currency cheating, but don't want others to think of it [in] that context. Further, if something is wrong, it was the fault of that big government and banking cabal that I never had anything to do with???

PH in LA (5/10/01; 10:49:57MT - msg#: 53345)
"Once earned, the individual needs somewhere to put his savings where
he can have control over them... somewhere beyond the managers' inflationary reach. In our system of voluntary slavery, they hold our noses to the grindstone and make us all work out our lifetimes. -"

Hill Billy Mitchell (05/11/01; 10:12:34MT - msg#: 53413)
Mr Gresham @ # 53407

The following was in quotes in your post:

"Overall debt to cash flow levels in the EU are far lower than they are in the US, but on the other hand, much US household debt is not intended as borrowing so much as it is a hedge against the dollar." End of quote.

"Were you saying this or are you quoting ORO or someone else? I take exception to the statement no matter who has said it. American households have been borrowing money hand over fist since the 1993 approximate. It has been debt of little purpose other than consumption. Our nation of household borrowers has been borrowing for current consumption, period."

ORO (05/11/01; 11:34:14MT - msg#: 53418)
HBM - not Big Float

"If oil can be paid for in Euro (or Yen) the Triffin deficit will shift to these countries where industries will hollow out, trade deficits burgeon exponentially, and reserves will be wiped out in under one decade while import price inflation in the US wipes out what little trust the dollar retains at home (much less than people say they have and why empty
nester boomers have 3 empty bedrooms and a Rec room stuffed with unused exercise equipment)."

Some of the borrowing, or even the bulk of it, goes toward consumables, but there is merit in the idea that Americans are already pricing in inflation by borrowing. I'll gladly pay you next Tuesday in tiny little dollars for something real today. The Credit Bubble (or equivalently Debt Bubble) has priced a lot of savers out of durable goods and real estate. The combination of tax and fiat slavery has made it impossible for an even larger class of producers to bank anything at all. So what do you do?

With gold (and commodities) in a twenty-year bear there is no safe store of value for the middle class. Socialist Security tax steals and squanders what might have been put away for retirement; most younger people realize they will never receive a pension from it. I've had many conversations on this in addition to reading studies and poll results. The people I've talked with can rarely put their finger on any of the reasons for this. They often just say it's a gut feeling.

So sure, "we Westerners play at this game of currency cheating" to one degree or other, but most are not too consciously aware of it. I've never heard a political debate over some foreign intervention du jour get interrupted with "but don't forget, we trade little pieces of paper with them for real stuff'. Our slaves are higher up the food chain than their slaves.

gefood chains in imitation of Turnaround #5350805/13/01; 06:14:25

Trail Guide says "Had they done their credit business with the wife's father-in-law, they would have been hanging from the nearest tree".

:) ...lot's of loughter!... :)

Trail Guide also says "Again, the secret to navigating through changing times is not allowing others to control you. Indeed 90% of that power comes by controlling your own financial assets. None of us has to lose to experience change, but we must change not to experience loss".

As long as there is a safe distance in between, the man is a wonder to watch - with respect.

In passing, I still think that the classical gold standard is the best monetary regime I know of. Brave Old Fiat died, long live the Brave New Fiat politics makes me feel sad.

Humble PieLetter fron ANOTHER#5350905/13/01; 06:40:22

Trailguide/Foa Is this the day we will be treated to the letter from Another ? Have enjoyed all your post'and the give and take on the forum on the gold/fiat subject.
SteveHFacts #5351005/13/01; 07:34:59

In discussing many of the issues brought up at this forum with my friends and family, one issue always comes to light: facts. To say that gold will go to $10K per ounce soon, raises eyebrows and immediately loose credibility for the messenger. Why? Facts. To say that an energy crisis will doom our economy is a conclusion, not necessarily correct. What are the facts? When I have been caught in the conclusion vs. fact argument I have been forced to say, "Well, let's deal with the facts then."

When I read ORO, I get bombarded with facts and often times don't know what the conclusion is or was. So, facts can lead to many conclusions. Conclusions should never lead to facts.

The more neutral language remains in providing facts, making arguments from said facts, the broader the audience will be. When I forward a post from here or Kitco or gold-eagle to friends, I find the ones that get the most respect are the ones with the most facts, more neutral language. The ones that draw severe conclusions tend to be scoffed. That doesn't mean the conclusions are wrong, it just finds a larger critic.

Sometimes the larger the critic, the greater the convert the person will become. Converted to what, though? A friend told me and rightfully so, that the reason "you people" are so adament about this gold thingy is because you want the price of gold to rise and are trying to make that happen. He was right. We do want the price of gold to rise. In my case, I told him that the reason my passion is so great on this "thingy" is because I have lost so much money due to a continually falling gold price and wanted to understand why it was that gold continued to fall. I told him that there was nothing wrong with desiring a more free market in gold. He fails to understand why the US can not intervene in the gold market. He sees this as a logical extension of the power of the US to protects its interest. In a sense, he is correct. The issue with gold has been that governments don't oficially recognize it as a reserve (except for the Euro now) and yet "play" it as though it is. This dichotomy of commodity vs. money aspect of gold and how the G-7 play this is the issue.

Bill Murphy knows of this dichotomy. He believes that the government can not treat a commodity like a money without calling it money, which they fail to do, especially in light of the ESF allegedly suppressing gold, the commodity, because it will affect the dollar, the money.

The problem with the facts are that they are much the same as though that allow us to understand that stars twinkle and planets don't. We know of Universal bodies because of indirect evidence and facts that lead to other facts. Spectrum analysis and mathematics tells us much of our Universe. In the matter of the gold market, we have overwhelming amounts of circumstantial evidence that leaves us with little concrete information that leaves us with little choice but to grasp for straws at times.

The biggest reaction most have when discussing gold's role in international monetary affairs is that it doesn't. Few pundits admit or acknowledge gold plays any role whatsoever in international monetary matters. That it does, based on circumstantial evidence, merely discredits any conclusions of those who fail to properly factor gold's role. Most of the direct information on gold in the media tends to act as a contrarian indicator to the notion that gold isn't dead. The amount of negative press on gold simply highlights the above denial of policy makers have towards gold. They eschew gold's role, but in a way that is too strong. When things don't matter, they are ignored. When things matter but counter the status quo, the argument will always be adament denial and skepticism.

In my most recent discussions on the matter of gold and the world economy, the first reaction has been gold doesn't matter any more. It just doesn't matter. When I ask, "why is that?"

The response is "Because gold is a commodity like anything else." I say, "Then why is it that the G-7 central banks still hold gold as a reserve?" They answer, "Because if things go into high inflation or a world crisis, we still need gold." Hmmm.

So, I urge all of us to stick with the facts, tone down our conclusions that are based on the facts with neutral language and a conservative basis, because then we will have a better chance of bring back a free gold market that may help recompense us for our losses, since, as is my case, I don't want to cut my losses an move on.

ChristianThe Gold Business#5351105/13/01; 07:58:24

Those in the gold business are in the gold business to profit. Hedge firms are borrowing central banks gold and selling it to themselves to use it for credit creation gold valued at ten times commodity price. For many hedge firms it is a means of accumulating cheap gold which they borrow from central banks with no intention of returning it. These hedge firms sold the gold to themselves and are forcing the central banks to buy gold still in the ground at the cheapest possible price to replace the borrowed gold. Capital and power is being forced to sell out to gold credit creation hands. Most central banks have no way out but to increase their paper gold short position and somehow get the general public to buy their worthless stock at a grossly inflated price. 1/3 of all stocks listed worldwide have a net income less then what the chief excecutive officer makes. There are chief excecutive officers of major corporations who make $160 million or more working for companies whose net earnings are under $100 million. Most stock holders are brain dead. There is a reason for wall street to tell you to hold on to your stocks while they themselves are selling those shares. They want you to sell after the stock is delisted.
JourneymanHuman nature and the gold standard @Trail Guide, ORO, beesting, Turnaround, ALL#5351205/13/01; 08:26:15

I excerpted the following from -Trail Guide (05/12/01; 22:36:34MT - msg#: 53498):

"Why do you think there were banks at all, back then? They existed to provide a service private people would not perform very much of,,,,,,, lend gold. Back then, nobody wanted to lend their money. Not to strangers, not to schisters,,,, and certainly not to family members (smile). Gold money was cash money and credit wasn't offered in mass. People were suspicious of each other and rightly so. We are all a bunch of crooks! Ha! Ha!"

and further down:

"Is it structured into human society that political representatives be crooks?" -ORO quoted by Trail Guide
"Almost as large a percentage as the electorate that chooses them." -Trail Guide

Two quick comments:

1. According to Trail Guide, "Gold money was cash money and credit wasn't offered in mass."

So, you didn't borrow against future hours of your life to go to a fancy resaurant (and give more of your future hours to banksters in the form of interest). Instead you saved-up from the past hours of your production, had the same meal in that fancy restaurant - - - and _didn't_ pay interest to the banking establishment. You kept the amount you would have paid in interest - - - which gave you the appetizer in next month's fancy dinner. What's wrong with that? (Of course! - - - The bankers don't like it!)

Perhaps, you're thinking, "But there would be no money available for capital equipment and development. How then do you explain that the period up thru 1913 (the year we clandestinely went off the gold standard because of the passage of the Federal Reserve Act) was perhaps the most prosperous in American history with a growth rate well above 4% per year? Without modern credit, people would indeed be more careful what they gambled on, ah, invested in, but history strongly suggests that didn't mean they didn't gamble, ah, invest. There probably would not have been a .com mania, etc., if we were still on the gold standard. What's wrong with that?

2. I don't know who Trail Guide has been hanging-out with these days, but I do know that while I've run across crooks in my day, there are nowhere near the percentage of crooks among my friends and family - - or even among my acquaintences - - as there are in Washington D.C.

Further, even the crooks in D.C. are usually crooks for a good cause - - - from their own viewpoint. They're taking care of their own. But because of our biology, "their own" are _primarily_ their family and face-to-face acquaintences (lobbists), not the faceless constituents they only know exist by vote totals.

Thus even most politicians aren't an indictment of human nature, which is much nicer than we think these days. It's merely a mistaken belief that our small-group instincts which we've inherited from our hunter-gatherer ancestors, will work in large groups, but fail miserably when we attempt to make them work in these larger groups --- because we take care of our small face-to-face groups FIRST, often at the expense of the wider population.

Of course, there are those with hierarchical tendencies . . . (too far afield)

At any rate, the implicit conflict between our small face-to-face groups is way more than ameliorated by the "division of labor" and "comparative advantage" of trade. Thus "when goods cross borders, troops don't."

By the way beesting, AWSOME series of posts from Ron Paul and your commentary!!!!

SO, those things that facillitate trade increase the general well-being and decrease inter-group strife. That's one of the main reasons, if you care, you want a return to transactional gold.


CamelWho is John Galt?#535135/13/01; 10:27:51

Trail guide- Your just going to wear yourself out trying to debate with Oro because what your dealing with is much more akin to a religion than an economic theory.

I don't know if Ann Rand had become a cult figure when you were in college, but we had a small cadre of Libertarians where I went to school in the 60's and they are nice enough people except they have a very tightly drawn ideology thats hard to get around.

Lets see. Its been so long .Atlas Shrugged. Isn't that the bible of Libertarians. John Galt has established a small Utopian community somewhere up in some isolated mountain and has recruited indidviuals with various skills and talents to interact and this setting provides a vehicle for Rands economic theories and world view. Wasnt there some famous monologue by John Galt somehere in there that goes on and on about the socialists and I believe even the Christains were not spared her wrath. They were the two arch enemies of humanity.- As far as I can see Oro's economic ideas have never departed much from the basic ideas laid out in John Galts monologue, except that he is attempting to apply it on a macro- economic scale.

Sorry Oro .Been there and done that.Those Utopian communities don't work because human nature is not set up that way. Human nature in small groups is much more akin to the interaction of a pack of dogs.Eternal bikering. It doesn't mater what its about, because each individual feels a sense of discomfort if they are not in control. Its just hard wired that way and very few have enough self knowledge or insight to get beyond that. You can't extrapolate from Rands Utopian community into the broader world because her basic premise is false or at least incomplete to such a degree that its unreal. You would be sitting around all day trying to put a square peg into a round hole. It just wont fit.

So much of this type of debate seems akin to asking how many angels can dance on the head of a pin. Surely we are getting close to the time when the Arabs will begin accepting the Euro as payment for oil. At least that is a proposition that can be tested. Even if the world begins to keep half dollars and half euos as their reserve along the lines of what has been proposed in Argentina then great amounts of dollar denominated assets will be sold and be replaced by euro denominated assets. But wouldn't that require a huge increase in the supply of euros to match the "big float"of the dollar, and if the European central banks keep the 15% gold backing for the euro then they will be buying gold to match the increased volume of euros.

Of course Cheney has completely destroyed his credibility by nay saying energy efficiancy and conservation. Cheney is not an oilman he is a political hack.He never even worked a summer job in the oil industry before taking over at Haliburton, and the way I hear it he ran the company into the ground ..I would almost be willing to bet he has never even heard of Cambell . Never even heard of him! Why don't you come on down here to Texas and drill .There's plenty of oil down here if we could just get the government off our back. Baloney!!!!! The oil is GONE, and the government didn't cause this except in the sense that it didn't take timely action to prevent the exhaustion of our resourses.

There is said to be substantial amounts of oil in the Gulf of Mexico and the artic that can provide a short term fix but after that what.? To me it all seems very similar to what was done to the buffalo. It is the mindless, rapacious destruction of nature and to quote a line from the Dylan masterpiece of the sixties, "Its a hard rain thats going to fall".

David LinkleyA Fifty Tonne Default#535145/13/01; 10:30:44

Reuters: Some linked the [gold] buying to jitters about overhedging by failed Australian producer Centaur Mining and Exploration Co. Ltd., encircled by creditors after entering receivership in March."There has been a lot of volume coming across the ring," said Donald Tierney of Pell Brothers Futures. "People are coming off the phones for orders for 100, 200, 300 (contracts) at a clip. The market has come alive with this story." Hedging is used by many gold companies and can help them when prices stay weak. Through forward sales and options, a producer can generate cash flow and cushion its unmined gold reserves from the effects of a falling market price.

Meanwhile, the oversold position of the market has been halved in recent weeks of gold firmness. Some of Wednesday's fund buying will likely go against the 27,970 contract net speculative short recorded last Tuesday.

Wednesday's adjustments came amid anticipation of Tuesday's Federal Reserve interest rate meeting and Britain's bullion auction the same day, which will open the final round of smaller 20-tonne sales.

With short-term gold lease rates holding above 2 percent and expectations of additional U.S. interest rate cuts to spur growth, yield differentials are skewed in favor of gold, having recently promoted the move to 17-month bullion lows.


Linkley Note: While "hedging," the practice of selling gold production forward, might be a "cushion" for some, it can be a bed of nails for others, since the gold sold forward is borrowed and someday needs to be repaid. Centaur Mining and Exploration, the Australian company which sold forward nearly ten years of its production under the guidance of its bullion bankers, has gone bankrupt. The presumption that the borrowed would be repaid out of the ground has been turned on its head. Production has now been halted by the company and no one knows where the 1.61 million ounces of gold -- over 50 tonnes of the yellow metal -- is going to come from to repay the lenders, or, amidst the confusion of bankruptcy proceedings, if its going to be repaid at all.

JMBJOURNEYMAN#535155/13/01; 10:44:57

If you desire "transactional gold", how can you expect your future theoretical model to function efficiently, unless you price goods and services in terms of gold? e.g., "One Man's Suit" will cost 1 oz. and "Dinner for Two at McDonald's" will cost 1 gram.
R PowellMax Rabbitz / Centaur default#535165/13/01; 11:31:02

The Austrialian mining company, Centaur, after filing for bankruptcy, will probably default on part or all of it's 1.6 million ounce gold loan. This gold was probably sold forward for operating capital and is now gone. What recourse the lender has depends on the bankruptcy laws of that country but, if the sold forward gold originated from a central bank and passed through a bullion bank (brokerage), then the default by Centaur does not negate the bullion bank's obligation to eventually return the 50+ tons of gold.
Max asked in #53494, "If going to be bankrupt and bondholders step up to be paid, why must those old hedges be unwound or bought?" My quess is Centaur will do just that, leaving the brokerage lender to face the Central bank repayment obligation. More pressure boiling under the market. The bullion banks will be looking at the problem of replacing the 50 tons without upseting the market or panicing the other big short positions. In other words, it must be done without raising the POG. As always, this is just one opinion.

ElwoodCamel (5/13/01; 10:27:51MT - msg#: 53513)#535175/13/01; 11:56:56

A is A. But human nature is whatever you want it to be. This was Rand's message, and, to me, it is a better way to orient your world outlook. Perhaps the philosophy is "hard to get around" because there is no logical basis for its refutation, thus the retreat into the "human nature" ramblings and unsubstantiated statements such as "the oil is GONE".


Trail Guide, is it your belief that the gold debt denomination will not take place at all or just that it will occur outside the official system? (I think you're on record as saying it won't occur.) Unless this debt denomination is flatly outlawed I think it will pop up and expand.

It's like today when you open a savings account. The bank is "allowed" to delay withdrawals for up to 30 days, but, of course, none of them do that. I think it's pretty certain that there will be a demand. If it is allowed, it will exist I would think, and eliminating the legally-enforced contractual obligations to pay will create an entire "underworld" industry to enforce these contracts. Reference the contractual enforcement measures of the drug industry, but this would not be as limited in scope as that. Markets have a way of working around man's limitations on them. It's "human nature."


Peter AsherRich & Max & Dave#535185/13/01; 12:09:34

Dave, good to see you back, not much left of the "Class of ‘98."

The question of Centurar's 50 tons would I think hinge on who gets ownership of the in-ground asset. IF the holder of the ‘Paper Gold’ now being held over the flame (We knew this was coming, didn't we?) has a senior claim to the mine assets rather then being subject to debt apportionment, then they are only out the hard costs of mining for the first 50 tons and eventually could recoup on the profit beyond that.

Of course this assumes that even free from debt, the ore can be mined at a profit. If not, then the Gold lenders deserve the results of their mathematical stupidity.

Peter AsherJMB & Journeyman, ORO & TG#535195/13/01; 12:17:04

The answer could lie in this:

Instead of thinking of pricing things in terms of Gold; think in terms of pricing Gold in things

Black BladePower Industry May Face Boom-Bust Cycle#535205/13/01; 12:50:55


SAN FRANCISCO (Reuters) - The U.S. power industry, which has embarked on a $140 billion building spree to avoid more California-style blackouts, could see that boom turn bust, with too many megawatts chasing too little demand, industry analysts warn.

Black Blade: Interesting article, yet the author is quite careful to ignore the fact that building power plants accomplishes nothing if there is insufficient fuel available to generate power. Once built, these monoliths will serve as nothing more than idle monuments to the folly of man unless these strategic planners can deliver the necessary fuels. Wasn't it these very same analysts that completely missed the boat on energy matters that led to the current crisis? Hmmm… How bad will this recession get? We live in "interesting times."

Hill Billy MitchellTurnaround @ # 53507#535215/13/01; 12:58:37

Sir, you say:

"I'll gladly pay you Tuesday in tiny little dollars for something real today."

Not so! Americans are gladly paying Tuesday in tiny little dollars for hamburgers, clothing and oodles and oodles of consumables, but are buying very little in the way of hard assets. They are borrowing against what little equity they have in hard assets to continue the consumption binge. There is no savings (excluding tax sheltered paper investements) which would hardly qualify as hard assets. Household savings are nonexistent and have been for some time. Maybe I should be more clear. Real tangible (durable) assets are assets which will last longer than the loans against them as follows:

Maytag or Speed Queen washers and dryers
Antique furniture
Antique works of art
Precious metals
Diamonds (wholesale)
Guns and ammo
Fuel and water storage facilities
Unimproved real estate (not a good option at this time as mostly overpriced)

The following are not real tangible (durable) assets which will not hold value beyond the hopes of liquidation of debt against them -- consumables:

New automobiles

Nothing all inclusive in the above, just trying to make a point.

If any signigicant hedging against the dollar were going on gold and silver bugs would not complaining about POG and POS. Households will not significantly take part in hedging in this way this time around. There was some household savings with to participate in the 70's but there is nothing in the way of household savings available today. Also as I have said before, the brains to take advantage in this type of hedging have been sufficiently dumbed down. It aint gonna happen this time.

Very respectfully,


PS: In order to borrow money to by real tangibles one must have some sort of down payment. Not so with cosumables. Go figure.

Hill Billy MitchellLeigh @ # 53464#535225/13/01; 13:02:39

Thanks for your post. Will reply with another post at a later date. Off to see my mother. I think Michael loves you because of the warmth you add to this forum.



Black BladeThrill Is Gone for Productivity#535235/13/01; 13:03:39


A Labor Department report on Tuesday showing first-quarter productivity fell for the first time in six years left some wondering whether the miracle was a mirage. Though it is still too soon to say for sure, some analysts saw the new data as proof the surge in productivity was ''cyclical'' or temporary, a byproduct of the booming economy. If that is the case, the Federal Reserve may be hesitant to cut interest rates much further to revive the economy.

Productivity in January-March fell 0.1 percent at an annual rate compared to a 2.0 percent rise in the fourth quarter of 2000 and a recent peak at 6.3 percent in April-June 2000. Faster productivity growth in the last five years had been credited with holding down wage inflation while increasing the potential growth rate -- the rate at which the Fed thinks the economy can expand without much inflation. Without strong productivity gains, the threat of stagflation -- slow growth with rising inflation -- would rise, some argued. That could create resistance to the Fed continuing to cut interest rates aggressively.

Black Blade: A case for stagflation? Hmmm… What will Cheetah and the other Fed monkeys do next? Sounds like "Bungle in the Jungle" time.

turbohawgET, ORO#535245/13/01; 13:15:59

One might split the fiat vs sound money promoters on this forum into two gold bug camps: those who are looking at what gold can do for them and those who are looking at what freedom can do for them. It's curious to this silent onlooker that the fiat promoters can so easily overlook the fact that without freedom they may find restricted the utility of their gold, yet again. Oh, but with this statement by FOA from the Gold Trail as already noted by ET …

"Keeping gold out of the fiat arena would be more simple than many hard school advocates envision. The key to that is found in the implementation of international law. The leading economic countries (EuroZone in the future) would have but to establish a protocol that forbid the enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade."

… restricting (or losing ?) the utility of one's gold seems to be exactly what FOA, wittingly or unwittingly, is endorsing with his encouragement to slip our necks out of one fiat noose into Another.

It's acknowledged that the introduction of the euro may lead to more fiat convulsions and, at some point, help counteract on a relatively short term basis a break in the dollar. But that's no reason to grant blind acceptance to an instrument of elitist control. Quite the contrary. The ongoing breakdown of the fiat system and the socialist govts it supports should be recognized as a rare opportunity to disembowel centralized control and return power to the individual. Kick’em while they're down. Wouldn't this be the message of one truly looking out for the best interests of others ?

No thanks. We don't need no stinkin’ fiat !

ET, your posts throughout this debate and before have demonstrated that you have an in-depth grasp of money and freedom. As one whose circle of friends includes many whose lives are dedicated to the advancement of freedom, I must say that you take a backseat to no one in your ability to make the case.

ORO, from …

ORO (05/12/01; 00:19:12MT - msg#: 53458)
FOA, you are missing the point of my disaffection entirely. In my preferred rendition of a monetary system, there is no particular official money, just a legal recognition of a commonly accepted money (and no limitation on it being only one or many, if the markets leave one surviving money – probably gold – fine, if not then two or more are fine). Bankers have no charters, and their liabilities stand on their own. This is not a gold standard unless it turns into one.

… your point has been quite clear all along. One has to conclude that the failure to recognize it has been intentional. Is that failure due simply to the inability or unwillingness to argue the logic (perhaps because of an acceptance of serfdom) or because of an agenda that seeks to ensure that a certain banking and political clique retains its power to enslave and manipulate ?

You guys, along with Journeyman, Turnaround, et al, carry on. You may not change the thinking or the agenda of the statists in our midst, but you do bring a very important counter argument to those who may be led astray.

Apologies to FOA if my characterizations and suspicions are wrong, but I don't think they're unfounded.

SHIFTYold news articles on gold price#535255/13/01; 13:17:54

Who posted them ??? FARFEL ? ?

I have not been able to keep up with all that is going on here at the forum since I got home last week.
While reading the news stories about GATA today, I am reminded of the news articles someone posted here about a year ago. Sorry I cant remember who it was. They were from back in the 70s. There was one that stands out in my mind. I remember it saying something about how the gold price could never double to $70.00 an ounce. I think it would be nice to read those articles again to compare with the media spin we are being treated to today.
Does anyone know who it was that posted those jewels?

How about a repost?


Black BladeNatural Gas Inventory Rise May Lower Prices#535265/13/01; 13:33:59


Point - Now, utilities across the country are storing away natural gas at a rate that's almost three-times faster than normal to ensure adequate winter supplies for homeowners' furnaces. That pace might make the record prices a dim memory when the cold weather returns this winter. The industry stored 1.74 trillion cubic feet of gas from April to November last year, 12 percent below the average of the previous six years. Storage rates lagged because of the price rally, which was caused by competing demand from power companies that used the fuel to make electricity for air conditioners.

Counterpoint - U.S. gas inventories would rise to 2.9 trillion cubic feet by Nov. 1 if utilities maintained the storage-refill rates of recent weeks. That would put supplies just 3 percent below the 3 trillion cubic feet analysts say is necessary to guard against wintertime shortages. Filling storage depots at the current pace may mean higher prices this summer, said Adam Sieminski, an energy strategist at Deutsche Banc Alex. Brown Inc. in Baltimore.

Something else to consider - Prices rose last summer as new power plants with 22,000 megawatts of gas-fired generating capacity started up -- more than the 21,400 megawatts added between 1995 and 1999, according to a report this week from the U.S. Energy Department's Energy Information Administration. The power plants alone boosted total U.S. gas demand by 500 billion cubic feet, or 2.3 percent, in 2000. Power plants with another 25,000 megawatts of capacity will start up this summer, 14 percent more than the amount added last year.

Black Blade: Not a very rosy outlook no matter the "spin." Demand rising for new generation facilities, consumption at a record pace, storage still unacceptably low, a hotter summer or colder winter and then life becomes "interesting." What is the trade off? Higher prices now for lower prices later? It appears that prices will remain high for quite some time. Higher energy costs will likely push the US economy over the edge. We already see the damage has begun. Get the golden lifeboats ready.

Cavan ManCamel#535275/13/01; 13:36:06

Great post. I love AS and keep a copy on my bookshelf but skipped Galt's soliloqy--way too much ideology for its own sake for me. Tried to read Fountainhead but to this simple mind, it was more of the same. Give me something that works and that I can work with. A monetary system that allows for competition of fiat currencies and a free POG where I can translate my labor into safe harbor is a system that I can live with. I realize I cannot live in Utopia (as did Thomas More); 'cause somebody will eventually screw it up.
megatronJust the FACT#535285/13/01; 13:38:58

Fact #1; Any power handed over to elected officials/religions decays into tyranny, over time. PERIOD. Knowing this fact, there will NEVER BE a free market in ANYTHING that threatens their control of power. PERIOD. Until there is a complete breakdown of their ability to control the situation.
Fact #2. The battle for control of the worlds reserve currency will be fought in backrooms by sycophantic ELECTED goverment officials, not you and I with our little gold coins, and certainly not 'voters'. One will be nary different than another. Tyranny is tyranny. The amount of gold backing is/will be irrelivant. History has spoken, loudly!
Fact #3. Europeans are not smarter than anyone else.PERIOD. This has been shown time and time again. Because you hold more gold than him does not make you 'smarter' or more egalitarian towards the rable.
Fact #4. Any scheme/idea/dreamworld that allows government into the pricing of a commodity is doomed. PERIOD. They will eventually take it ALL AWAY. Over time. Inflation, fiat currencies,war, tax, you name it.

Gold is the ultimate storage of wealth because it CAN/WILL overcome the following laws, over time. Not until the tribal megalomaniacs lose their grip entirely. And by then a lot of idiots will have parted with their gold buying 'Euros' or some other concoction to separate the wise from the foolish.

Peter Asherturbohawg msg#: 53524)#535295/13/01; 14:07:40

BINGO!! " One might split the fiat vs sound money promoters on this forum into two gold bug camps: those who are looking at what gold can do for them and those who are looking at what freedom can do for them."

Re FOA's "to establish a protocol that forbid the enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade."

That would make gold a VERY unpopular asset to store value in IMO. One of the primary functions of a hard asset in the modern world is to be able to instantly collateralize some spending fiat in an emergency, without parting with the asset.

Deprive Gold of that function and you would REALLY tank it

lamprey_65History Repeating (Although not exactly)?#535305/13/01; 14:34:35

...Had a thought yesterday -- could it be that what we are now seeing is a not-so-perfect repeat of the late 60's to mid-70's stock market scenario unfolding? What I mean is in the late 60's we had a tech bubble of sorts (not as ridiculous as the recent bubble by any stretch) which went pop. When this happened, people ran to the big, liquid stocks -- the "nifty fifty" was AFTER this set-up that the '73-'74 bear market actually began.

Isn't this what we are now seeing with the Nasdaq fall-off and the DOW left relatively unscathed? Energy crises brewing and gold beginning to stir also.

Time seems to compress in the markets compared to yesteryear...if this is a similar scenario about to hit, I would expect the '73-'74 bear to begin this year or next and the bull market in gold to last 4-5 years (versus the nearly 10 years from the seventies).


USAGOLDWho was it that characterized socialism as "the#5353105/13/01; 15:31:36

promise of the serpent?" Born into the ardent communist Horowitz family of New York City, David Horowitz edited Ramparts magazine during the 1960s and was quite the socialist for much of his early life. He shed Marxism and converted to the conservative cause about a decade ago. There is little doubt that von Mises and von Hayek played a critical role in his conversion to free market economics. Most recently, he triggered demonstrations at Berkley, his alma mater, when he visited there to speak out against black reparations -- currently a hot political issue on America's campuses.


From a speech delivered by David Horowitz in Poland 1989:

"Why were we so wrong? Because all of us, Kolakowski* included, had our roots in the intellectual traditions of
the socialist left. Experience had taught us all to be anti-Communist, but our critique of socialism was based
on political theory and political considerations. We knew that totalitarianism was evil, but we thought that
socialism worked. We were wrong. It does not work. Economically, it cannot succeed.

While we were wrong, others all along had been right. All those years, outside the socialist tradition, there
had been voices crying in the wilderness saying that not only would socialism bring tyranny and suffering, it
would not work. Seventy-seven years ago, five years after the Bolshevik triumph, Ludwig von Mises wrote a
book on socialism that predicted the catastrophe we see before us. Socialist economy, he argued, was
economic irrationality, and socialist planning a prescription for chaos. Only a capitalist market could provide a
system of rational allocations and rational accounts. Only private property and the profit motive could unleash
the forces of individual initiative and human creativity to produce real and expanding wealth--not only for the
rich but for society as a whole.

Ludwig von Mises, Friedrich von Hayek, and the other liberal theorists of a free-market economy who warned
of this outcome are the true prophets of the reality we see before us--of socialist bankruptcy and Communist
retreat. Glastnostian democracy has not (and cannot) complete the socialist dream; it can only expose this
dream as a nightmare from which Communism cannot wake up. The only way to wake up is to give up the

* Leszek Kolakowski was among the first Polish communist intellectuals to see through the false promises of socialism.(1956)

MK: I am not the best of Biblical scholars but I do seem to remember that the promise of the serpent was that eating the fruit of tree would make Eve like God. . . . . a promise to which she succumbed. I was unable to find the exact quote which I took from memory. However, I did find this exchange with Chuck Baldwin in a recent interview:

David Horowitz: Because America is responsible for the atrocious behavior of China. You have to get the radical
mentality. Peter Collier and I have called it the "devil made me do it theory" of history. Why is Castro, who has made his
island an island prison, why is the gross national product lower then it was when he took power, why are they riding
around on bicycles instead of in cars like the rest of the 20th century? Answers: Because of America. It's the United States
blockade. It ignores the fact that the economy was ruined by his Socialist plans. It ignores the fact that the Soviet Union for
years gave Cuba five, six, seven billion dollars in aid per year, even though they only have ten million people. It ignores the
fact that all the rest of the world has traded with Castro from the beginning. It doesn't matter to them. The United States is
responsible. You know, why is China bad, why do they put people in jail, because the bad Capitalists the Imperialists made
China backward.

I was on a radio show yesterday talking about another book that Peter and I have done. One of the callers, a black caller - I
was talking about the affirmative action in the universities. Nobody in his right mind thinks that our liberal colleges are
systemically keeping blacks out, so why do we need affirmative action policies? The answer is, because blacks don't score
well on the tests. And instead of saying, "There's a real problem in the black community of educating its children, let's
blame whitie." So this guys explanation was slavery. You know, come on, how long are we going to blame slavery for all
the problems in the black community. It would be like every time a Jew did something wrong it's because of the Holocaust,
2,000 years of persecution. It doesn't seem to apply to the Vietnamese who come here into an alien culture where they don't
speak the language. I don't see very many Vietnamese protesting about the cultural bias of college admission exams. Yet,
blacks have been here for 350 years, they're complaining that there's a cultural bias in the tests. And nobody will say, this
is nuts, this is whining, this is just the old excuse game.

Chuck Baldwin: It goes back to personal accountability does it not? Liberals hate accountability.

David Horowitz: Well, yes. The whole difference is that liberals are people who believe that society is the root of all evil.
Either they've forgotten or they never believed what they read, hopefully as children in the first chapters of Genesis which
would explain to them that the problem of evil in the world is not society, it's us.

Chuck Baldwin: Exactly.

David Horowitz: Human beings had, not only a socialist paradise but Garden of Eden was better than a socialist
paradise. You didn't have to work, there was no pain, you didn't die. All you had to do was not to do one thing. Human
beings are ornery and they are prone to do bad things. That's why we have religion. That's why we have laws. And liberals
can't seem to get that through their head. They think the problem in our society is law enforcement. The problem is the

The link above will take you to Mr. Horowitz' site. I believe you will find him a more than interesting figure in contemporary American culture.

IronHeadMegatron - Recent History and Current Events#5353205/13/01; 15:35:44

Sir Megatron - Your post on fact vs. fiction reminded me of events which occured in SE Asia during the meltdown in that region, as well as Brazil and more recently, Turkey.

Having the opportunity to be in Thailand (Thai, by the way means "free") during the onset of the crises, I had first hand observation of a currency going from 25 baht to the dollar, to 54 baht to the dollar. Friends and business associates whom I was traveling with watched their paper wealth go up in smoke, unless they had the good fortune and foresight to be in hard assets, ie. gold or silver. Thai's really appreciate silver too; smart folks. Not real estate, as that tanked with the rest of the bubble when the Aian Tigers morphed into sleeping kitties. Gold actually was trading well above world spot price, although I don't recall exactly how much higher.

This fiat fornication hit throughout SE Asia as we all became aware, with a cascade that was only halted by the hand of international intervention in the form of additional printing of chits and taking of IOU's. Did those effected people in Asia find solice in one fiat (their's) vs. the stonger fiat (our's) - U.S., Euro, Yuan, whatever? No - it was the yellow dog that saved some. Turkey recently saw the same affect - did the lira vs. euro save many there? I suppose a few might have converted, anticipating the onslaught. But what if one day, the fiat fornicaters can't quite get a handle on a multitude of paper collapses, that breach the printers capability or acceptability?

Perhaps that day could coincide with the day we Americans quit buying enough Porsche, Gucci, and Ducati trinkets to sustain their contagion. Despite the current cost inflation that is starting to slap some sense of reality into the purveyors of milk and honey, Japan is a study in the deflation and depression that will be coming to a street near us all.

Your tribal idiots have lost control very recently as outlined, and gold HAS overcome the fiat pretense of wealth. It has traded on a free and open market with respect to the fiat of the land. Some day it might be the only sense of wealth and freedom, that even advocates will understand.

Oh, that double bottom in silver could align very nicely with Gann cycles, which point toward a silver lining coming in late fall, yes? Which if occures, would really set the stage for gold next year, YES?


schippiSelect Gold moves into First place#5353305/13/01; 16:30:52

Select Gold is currently ranked #1 over all
Fidelity's Select 40 sectors. This has not
happened in a very long time.

Al FulchinoUSAGOLD (05/13/01; 15:31:36MT - msg#: 53531)#5353405/13/01; 19:27:24

good post
auspecOut of Africa#5353505/13/01; 19:30:06

Snippet from Murphy/GATA:
"I learned more in a very special Saturday meeting with someone who knows the goings on in Africa. GATA's issues are very important because of the following:

*The Chinese are buying more gold in Africa than is generally known.
*The Chinese are offering billions of dollars in loans to appropriate Africans at very low interest rates - as low as .5%.
*The Chinese are as "cocky" as this person has ever seen them and they are everywhere in Africa.
*The African/Bush Administration relationship is deteriorating. The recent African meeting with Colin Powell did not go well. My source tells me to look out for increasing friction in the near future."

"This is a BIG DEAL and Café members have known the reason why for some time now. The Chinese are quietly buying up the gold market. They are smart cookies and surely know what Frank Veneroso told the summit attendees - and that is that the gold loans are 10,000 tonnes to 16,000 tonnes - not the 5,000 tonnes that the gold industry claims is the case. Frank explained the 6 different ways that he came up with the same conclusions - and I hope to have the transcript up at the Café of what Frank said sometime very soon."

"That means that the U.S. has a gold national security issue here. Next time, instead of a plane, it might be Taiwan and it might come at a time when our banks are tottering. What if the Chinese come to us and say we want Taiwan or we are going to sell our billions of dollars of reserves and replace them with gold reserves (after quietly and already loading up at cheap, cheap gold prices)?" END

Comment: The Chinese make footprints of Giants?

CanuckGATA#5353605/13/01; 19:56:37

Awfully quiet; news on the conference?
Canuckthanks auspec#5353705/13/01; 19:59:37

LeighIronHead#5353805/13/01; 20:27:57

IronHead, what are you doing posting here on Mother's Day? Is your mom around? If so, get her to post!

Thanks for the kind words, Cavan Man. I think I caught a glimpse of Mr. Greenspan on the "Green" Trail. He had a lot of blindfolded sheepies chasing after him. He was throwing dollar bills in every direction to divert them, but they wouldn't leave him alone. Here's the thing: I think he couldn't get over to the Gold Trail if he tried. Nobody would let him.

SteveHMurphy's revelation about Chinese#5353905/13/01; 21:01:33

Didn't Another state a few years back that the Hong Kong Chinese were also buying up all the gold they could get?
megatronIronHead#5354005/13/01; 21:25:48

Yes silver looks interesting, although it seems more from fundamentals/supply and demand than TA, IMHO
Chris PowellDurban Daily News reports on GATA conference#5354105/13/01; 21:37:11

A bit less of a sneer than the Mining
Web report.

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by email and get them immediately so
you don't have to go look for them,
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Chris PowellGATA Chairman Bill Murphy reports on the Durban conference#5354205/13/01; 21:38:14

Things have just started to happen in
South Africa.

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Chris PowellGATA "quiet"? You gotta be kidding!#535435/13/01; 21:42:34

Canuck, we've issued 18 dispatches in just
the last seven days, many of them about
the Durban conference, before and after.
They're all archived in public here:

If you're not on our emailing list, please
subscribe. It's easy and you'll hear our
news immediately. Just send an email here:

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We are anything but quiet, and we report the
bad along with the good, as fast as we can,
for free.

Chris PowellBusiness Day reports on GATA's conference in Durban#535445/13/01; 22:16:46

Business Day, the South African daily business
newspaper, reports on GATA's African Gold

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you don't have to go look for them,
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SHIFTYPeriodic Ponzi Update PPU#535455/13/01; 22:25:39

Nasdaq 2,107.43 + Dow 10,821.31 = 12,928.74 divide by 2 = 6464.37 Ponzi

Down 107.01 from last week.

Thank you Sir RossL for the link.



working-kirkOut of Africa (message 53535)#535465/13/01; 23:00:48

auspec (05/13/01; 19:30:06MT - msg#: 53535)

*The Chinese are buying more gold in Africa than is generally known.
*The Chinese are offering billions of dollars in loans
to appropriate Africans at very low interest rates -
as low as .5%.
*The Chinese are as "cocky" as this person has ever seen them and they are everywhere in Africa.
*The African/Bush Administration relationship is deteriorating. The recent African meeting with Colin Powell did not go well. My source tells me to look out for increasing friction in the near future."

Just finding this out makes me even more suspecious that the
Chinese would be selling their silver. Some on this forum
mentioned the Chinese were selling their silver to help
keep the cost down and I questioned this theory using common
sense that
1.) The Chinese were the last country to stop using silver for money

2.) While it made little sense to give away for them to
gave away their silver, it went beyond belief to expect
they would pay the frieght as well, especially when
there were a lot closer countries not only to pay a
preminum for whatever silver they had. )(India,
Russian and Turkey to name a few where silver would be prized.

Other pointed out The chinese want to use silver for chopsticks and for their own photography needs.

However, now I have heard the Chinese are secretly buying gold I can give a reason the Chinese are selling silver.

The Chinese are loudly proclaiming they are selling their silver as a means of disinformation. That would certainly
mean they are not interested in Gold. But just because someone is loudly yelling they are doing something, does not
mean they are doing it. It could be very well the opposite.
I think the Chinese are yelling they are selling silver to anyone stupid enough to listen (GSFM or whatever the initials are) but the sale isn't complete until you have the item in your hot little hands. And who is to say the chinese isn't selling their silver to themselves. A question few ask about the gold and silver shorts is if everybody is selling their precious metals then who is buying?

Anyway, I learn much from the other posters on this forum so
I would like to hear what you think of my theory?

The Chinese aren't selling silver, only saying they are in
order to buy gold and more silver secretly.

beestingHappy Mothers Day to All the Mothers,Leigh,& some more from Ron Paul.#535475/13/01; 23:15:32

Journeyman # 53512, blush,blush, glad someone reads this students efforts but I am learning so much more from you and the rest of the combined brain power here, Thank You, Thank You!

Although Congressman Pauls book was written over 10 years ago, I find so many things in it relevent to our on going discussions here at the USAGOLD forum, it's almost unbelievable.Here is some more,(hope its not too long) by popular demand, from Congressman Pauls "Money Book",between pages 185 to 217 begin quotes:

Ten Myths About Paper Money:
1.Paper money is wealth.
Fact # 1 Paper money is not wealth, it steals wealth.

2."Easy" money causes low interest rates.
Fact # 2 "Easy" money causes hard times.

3. Paper money is elastic.
Fact # 3 The paper money bubble expands until it bursts.

4.Paper money gets its value from the economy.
Fact # 4 Paper money cannot derive its value from the economy, for the government does not own the economy.

5. Legal tender laws instill trust in paper money.
Fact # 5 Legal tender laws install fear in the people, not trust in the money.

6. The low cost of printing paper money is an economic advantage.
Fact # 6 The low cost of printing paper money guarantees the declining value of paper money.

7. Paper money can pay for the "good" things government does for people.
Fact # 7 Paper money is a tool for the political redistribution of property.

8. Paper money eliminates the business cycle.
Fact # 8 Paper money causes inflationary booms and deflationary depressions.

9. A managed paper money gives stable prices.
Fact # 9 The greatest price increases and highest interest rates in history have been caused by paper money.

10. Politicians can be trusted with a printing press.
Fact # 10 Government will use all the power it is given, including the power to print unlimited quantities of paper money.End quotes.

(beesting note, Congressman Paul gives about a one page reason for all his facts)

And this from pages 202 & 203(Is he talking about the Euro?) begin quotes:......has prompted a group of economists, many of whom embraced Monetarism, to promote psuedo-Gold standards. Through this they hope to achieve the benifits of Gold by a loose linkage to it without imposing the required dicipline. they want to eat their cake and have it too.
The group of supply siders who promote pseudo-Gold standards are led by economists such as Robert Mundell, Jude Wanniski, and Arther Laffer. These economists reject monetarism but stop short of a ginuine Gold standard. Their efforts are not entirely wasted, but their program is frought with so many errors that there is a danger that it could impede the efforts being made for proper currency reform.....etc. etc....The over riding danger , however,is that when, out of desperation, we once again resort to the use of Gold, a psuedo-Gold standard, one that is bound to fail, will be accepted. This could make Gold vulnerable to all the trite anti-Gold critisms. If Gold is falsely discredited, true reform could be delayed for decades. This only increases the risk of persistant and serious economic and political termoil for the world. The choice between the real Gold standard and the pseudo-Gold standard is just as important as the choice between paper and Gold...etc etc.

And This.....
Only the Gold standard, whose purpose is to define and maintain the ""INTEGRITY OF THE MONETARY UNIT,"" is capable of achieving a sound monetary system in which""THE PEOPLE"", not the bankers or the government , are in charge. Prices than are flexible in the short run, yet on the long run a Gold monetary system allows for price stabilization, if not gently falling prices.

....And this, date unknown(before 1991):

[Testimony of the Honorable Ron Paul before the subcommittee on mines and mining Committee on Interior and Insular Affairs United States House of Representitives]

Thank you very much Mr Chairman, for allowing me to appear before your subcommittee this morning to discuss the feasibilty of establishing a Gold standard.
As you know, I have introduced, and other members have cosponsored, H.R. 7874, which is a comprehensive bill to place the United States on a FULL GOLD COIN STANDARD within two years of date of passage.(beesting, anybody ever see anything about this in the news???)Ron Paul again:
I believe such a standard to be not only desirable and feasible, but absolutely necessary if we are to avoid the very real possibilty of hyperinflation in the near future, and economic collapse. But in Washington we have 5 myths about the Gold standard:

Myth # 1 There isn't enough Gold.(Long Explanation)

Myth # 2 A Gold standard would allow Russia & South Africa to hold us hostages.(Another long explanation,,,written before 1991)

Myth # 3 Gold causes depressions.(Long Explanation)

Myth # 4 Gold causes inflation.(Part of long explanation)
....For most of the 19th century we had an imperfect Gold coin standard. In the 67 years prior to the beginning of the Federal Reserve system in 1913 the consumer price index in this country increased by 10%, and in the 67 years subsequent to 1913 the C.P.I. increased by 625%. This groth has accelerated since 1971 when President Nixon cut our last link to Gold by closing the Gold window.
In 1833 the index of wholesale commodity prices in the U.S. was 75.3 In 1933, just prior to going off the Gold standard, the index of wholesale commodity prices in the U.S. was 76.2 A change in 100 years of ONE percent. The index of wholesale commodity prices in 1976 was 410.2. Today the index is 612.3(date unknown?) For 100 years on the Gold standard wholesale prices rose only 9/10 of 1% In the last 45 years of paper money they have gone up 536%....etc etc.

Myth # 5 Gold would be speculative.(Part of long explanation):
""Still quoting Ron Paul", I find such an arguement amazing, for it is precisely because it is a commodity and not subject to manipulation(Remember written before 1991) of a bureaucracy in Washington or London that is desirable. If one wishes to speak of undesirable speculative influences one only need to look at the speculation in the U.S. dollar.
A Gold standard would eliminate all speculation about the poltical motavations of the monetary authorities in governing the supply of money. The great virtue of the Gold standard is that it removes discretionary power over the money supply from any one agency, thus ending the most fertile source of speculation. A Gold standard puts the power of the monetary system into the hands of the people and takes it away from the politicians and bankers, thus removing a potential vehicle for establishing a tyranny....etc etc. And this...For over 60 years the American people have been exercising faith(in the current systm)and they have suffered the worst depression and the worst inflations in their history. Let us hear no more of faith in men, but bind government with the chains of an honest monetary system-the FULL Gold coin standard.
In the Coinage Act of 1792 the Founders provided the DEATH PENALTY for any government employee who debased the money.(Gold) If such a penalty were inforced today how many members of the Federal Open Market Committee would survive the month? End of Ron Paul Quotes.

Thanks for Reading....beesting.

Jason Happystory idea: gold price suppression#535485/13/01; 23:45:57

story idea: gold price suppression
Sun, 13 May 2001 22:19:08 -0600
Jason This email address is being protected from spambots. You need JavaScript enabled to view it.
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An open letter to Fox News & Mr. Bill O'Reilly;

Are you afraid to cover certain stories? Doesn't the Fox station have ties with the Bush Family? Doesn't the Bush family have ties with Barrick Gold (ABX), a gold mining company that is heavily short the gold market and might be hurt by substantially rising gold prices? Even if these things are so, would that be a reason to avoid reporting on
the developing gold derivative banking crisis?! Actually, it might be a strong reason to cover it now!

GATA, the Gold Anti-Trust Action Committee Inc., at, has published numerous papers sent to congress about gold suppression, and is also involved in a lawsuit charging the U.S. Federal Reserve Bank, the BIS, and several large commercial banks with collusion to keep the price of gold low.

The longer gold is suppressed, the more dangerous the political game, particularly for those currently in power. Why is the major news press of the United States ignoring this story? Why?

I would think this should be covered by the news media now, and that we who support Mr. Bush, as I do, would want this to erupt now. If this scandal erupts now, it can be blamed on Clinton, where most of the blame should lie. The more time that passes, however, the more political and personal
blame will be assigned to George W. Bush.

It is a dangerous political game to allow fraud on this
scope and size to continue. The gold suppression scandal and banking crisis needs to be brought to light as soon as possible, and it deserves major news coverage.

Major Developing Items in the current gold scandal:

1. Many members of Congress have already received GATA's report, "The Gold Derivative Banking Crisis".
2. There is a federal lawsuit filed by Reg Howe against specific national and commercial banks such as Chase Manhattan Corp., Citigroup, Inc., Goldman Sachs Group, Inc., Deutsche Bank AG who are short enormous amounts of gold. see
3. The revealing of "gold swaps" by branches of the Federal Government, and the new label of certain U.S. gold being held as "custodial gold", which might now be owned by Germany?
4. GATA's recent trip to South Africa where several 100,000 South African black workers have been put out of work in the last year as gold mines close down in the current low price environment, which does not make sense in a free market world economy since less than 2500 tons are being mined each year and over 4000 tons are being consumed each

This final reason is enough to embarrass black leaders such as the Rev. Jessie Jackson, which should interest Mr. Bill O'Reilly.

Certainly the most compelling reason to begin covering this topic is that viewers and readers who hear the message and take action by investing in gold now at the current suppressed price have the most to benefit, and will respect most the news agencies who brought this to their attention.

Other online resources for your various news reporting
staff to begin their research:


Jason Hommel
This email address is being protected from spambots. You need JavaScript enabled to view it.
12641 Anvil Road,
Grass Valley, CA
530 274 3450

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P.S. To Mr. Vronsky and GATA:

I believe gold suppression is a political problem that we must address in a political way. We need to get larger segments of the general population in the United States involved, or we need to get the U.S. press involved, or we need to express our collective outrage more loudly and openly.

May I suggest that people who read Vronsky's editorials or GATA's dispatches, which I hope will both send this letter out, also take action and start writing letters to news agencies. I have sent the above to: This email address is being protected from spambots. You need JavaScript enabled to view it. , This email address is being protected from spambots. You need JavaScript enabled to view it. , This email address is being protected from spambots. You need JavaScript enabled to view it. as well as my local newspaper, The Union in Grass Valley, CA, at This email address is being protected from spambots. You need JavaScript enabled to view it. .

This letter will also be copied to various online forums, and may be freely and widely distributed via email to friends and family members.

IronHeadLeigh - Mother's Day#535495/14/01; 01:50:31

Hello Lady Leigh - Always such a treat to find your words of compassion, amidst the banter of the boys.

Yes, I am with Mom during this day of honor. She is however, not willing to enter the foray, which probably is for the better, considering her view of our economic debacle would make Sir Farfel's treatises look like a choir boy recital. After growing up in the depression era, working for 40 plus years, maintaining a "saver vs. risk taker" attitude and trusting the red, white, and blue to due right by its citizens, has left her with conservative savings and social security reflecting the past years of no "official" inflation, and now interest rates on CD's in the toilet due to the toady Fed Heads manipulations of rates, to placate their masters.

How many other older retired moms and pops are feeling the brunt of the soft asset credit/debt creation? What is to become of their future in a hyperinflationary environment, on a fixed (at the *old* rate) income? Or a depressionary environment where the fixed paper (mal)investments have disappeared due to massive default? Hope some believe in the golden rule.

Well, before I go into one of my depression dynamic tirades, suffice to say Mom is doing well and now reading all the Ayn Rand books she can get her hands on. She just turned 80 and is still sharper than the chrony politicians she reviles against. Oops.... considering the intelligence of some politicians.

Hope you got the country farm and are enjoying the fruits of labor in a garden - seems there are alot of gardeners among the goldhearts around here; must be an affliction of self sufficiency?


Strad MasterAnnouncement#535505/14/01; 02:20:25


Are again proud to announce the arrival of our latest model


o Generic Name: Eva Gabriella

o Supplier: Stork, Inc.

o Distributor: Kaiser/Permanente Medical Center

o Packaged Weight: 6 Pounds 13 Ounces

o Packaged Length: 22.5 inches

o Fuel requirements: Lactis maternis – 120 ml.

o Infusion Rate: Every two hours

o Performance at Peak Output: 160 Decibels @ 560 Cycles Per Second

o External Finish: High-absorption capacity polymer in a moisture proof matrix

o Additional Characteristics: Brown hair – Hazel eyes

o Copyright: May 13, 2001 (Mother's Day) – 4:44 PM Pacific Daylight Time

NetkingWorking-Kirk #535515/14/01; 02:36:24

They are not selling Ag, fact! Lets have proof from anyone that says otherwise, we'll get none. This has been an orchestrated littany of "disinformation" from those who have had the most to gain from it. The market forces are about to have their day though, we'll have the last laugh.
Go Gold, Go Silver, Go GATA.

NetkingR Powell (53487)#535525/14/01; 02:51:10

R Powell(53487)
Thanks for the silver links, and hope you survived your "honey-dos", ditto for me too, bless them.

NetkingRandy @ The Tower #535535/14/01; 02:59:29

Randy(53438)Where've ya been brother!
Do you have any more details on that PRC coin issue, sizes & content, prices in local currency, number minted & issued etc? They tell me that impossible you can do straight away however miracles can take a little longer.<smile>

Turnaroundnice people on Mondays#535545/14/01; 03:20:07

Hill Billy Mitchell (5/13/01; 12:58:37MT - msg#: 53521)
Turnaround @ # 53507

And Sir,

"Sir, you say:

"I'll gladly pay you Tuesday in tiny little dollars for something real today."

"Not so! Americans are gladly paying Tuesday in tiny little dollars for hamburgers, clothing and oodles and oodles of consumables, but are buying very little in the way of hard assets. They are borrowing against what little equity they have in hard assets to continue the consumption binge. "

Just so- the 'equity' pulled out as FRN bytes is anticipated (on some level, by some people) to shrink to zero, so spend it now, try to hang onto the house and the job, and wait for the river to empty into the sea. Most may not look at it from this viewpoint, but rather the 'greater fool' theory- the perceived appreciation in FRN numbers. Here's a thought- maybe folks know (again at some unarticulated level of consciousness) the good times can't last forever, so enjoy it while you can, it's been a great ride.

"There is no savings (excluding tax sheltered paper investments) which would hardly qualify as hard assets. Household savings are nonexistent and have been for some time."

Yes, on average. But the ~50% of American households "invested" in the stock market this time around certainly thought of it as saving for retirement- deferring consumption in hopes of making a killing. (Now of course we are in the confusion stage that precedes panic. I really am amazed this has not occurred yet.)

"Maybe I should be more clear. Real tangible (durable) assets are assets which will last
longer than the loans against them as follows:

"Precious metals"

These were tanking until recently, and are obviously still not quite on John Q.'s Etch-a-Sketch version of an economic radar screen. He'll be around, by and by.

"Guns and ammo"

Ammo is a one-shot affair, granted with a long bunker life. Not quite the same caliber as the other items in this manifest. (Guns are an interesting case, the demand has apparently been falling, perhaps due to market saturation, unconstitutional infringements on ownership and media psychobabble. Is this to be considered a medical device or a means of production- an alchemical transmutator for turning lead into gold?)

"Unimproved real estate (not a good option at this time as mostly overpriced)"

Improved as well- even a Pleasantville McMansion can't go to zero like some FRNs I know. Oth, it is very interesting that much new commercial and residential construction may not outlast the mortgage.

"The following are not real tangible (durable) assets which will not hold value beyond the hopes of liquidation of debt against them -- consumables:

"New automobiles"

Loans on new cars have a half-life of maybe 4 years (?), the cars last maybe 15 years (?) half-life. I'm guessing as I haven't looked up actuarial tables for these machines. This is a durable good, the second largest purchase an average producer makes. Consider the tale (in "Big Float", I think it was) of the Beamer dealership in downtown Jakarta- cleaned out in a matter of days by people carrying wads of rupiah. The point was not to "consume" the car but rather to trade into something -anything- with a lower depreciation rate.


Eh? Shame on them for eating?


A radio, Nintendo or TV set lasts about long enough to consider as a durable good, longer than a movie or baseball game anyway. My TV is 13 years old, I think it still works.

"Nothing all inclusive in the above, just trying to make a point."

So why evaluate the durability of a good in terms of the ratio of its useful life to the term of a loan against it? Because the lender does? Also, one can charge many consumables against credit cards at department stores, grocery stores, etc.

My point is different people have different rationales, strategies and circumstances. Some grasshoppers are eating their seed (and ours), others are doing other things. The harvest isn't all cut and dried.

"You have a nice class of peasants here in America."
--attributed to Boris Yeltsin

NetkingChinese PM buying cont.#535555/14/01; 04:03:54

Comment from Dave Morgan's;

"The Chinese are quietly buying up the gold market. They are smart cookies and surely know what Frank Veneroso told
the summit -- and that is that the gold loans are 10,000 to 16,000 tonnes, not the 5,000 tonnes that the gold industry claims is the case. Frank explained the six ways he came up with the same conclusion. This means that gold is a national security issue for the United States. Next time, instead of a surveillance plane, the problem might be Taiwan and it might arise at a time when our banks are tottering. What if China tells the United States, "We want Taiwan or we are going to sell our billions of dollars of reserves and replace them with gold reserves" -- after quietly loading up on gold at cheap prices?"
Netking Question; Are these same smart cookies also multi-tasking and dumping Ag at the lowest inflation adjusted prices in over 100 years when the price & demand/supply dynamics may be about to have the same as a nuclear meltdown?, surely even a drunk in Central Park could answer that one friends. regards NK

Canuck@ Chris Powell#535565/14/01; 05:00:11

Sorry; I did not mean 'quiet' as in non-vocal.

I await your report on the Chinese "buying more gold than was thought."

GoldflyStradmaster - Congratulations!!#535575/14/01; 06:26:17

Mother's Day was a good choice. How did you arrange that?
ETGoldfly#535585/14/01; 07:28:47

Hey Goldfly - how you been? Thanks for your comments but I'm not in the same league as Justin Raimondo. I do read all his articles along with the others at the site you mentioned. Thanks for pointing to the situation in Italy. I think it surely demonstrates the mindset of the European Union. I'm glad to see the Italian people telling the tyrants of Brussels where to stick it.
justamereBearStradMaster#5355905/14/01; 07:49:21

LOL and congratulations to you and Mrs. Strad. Envy you the birth of a new life. Only reason I would consider remarriage, More kids. My children are the most wonderful thing that eaver happened to me.


justamereBearOro#5356005/14/01; 07:52:34

As I said I am woefully short of time at the moment, but would love to enter your debate.
Have you ever considered that the supply of gold is rather fixed, whereas population, and productivity are not?


ETturbo#5356105/14/01; 07:59:32

Hey turbo - thanks! Your comments are most appreciated!

Yes, it would appear we have had all traditional arguments for sound money tossed in favor of some kind of argument best described as "we just can't help it". Any argument against gold and its free trade is an argument for tyranny, plain and simple. I'm glad we've had this little debate. Hopefully it has opened some eyes as to the real value of gold.

"The ongoing breakdown of the fiat system and the socialist
govts it supports should be recognized as a rare opportunity to disembowel centralized control and return power
to the individual. Kick’em while they're down."

Go, turbo, go!

Carl HNetking: Chinese Silver#5356205/14/01; 07:59:41

Do you (or anyone else) have any proof that the Chinese are NOT dumping silver?

Do you have any explanation for where the additional silver to meet demand is coming from?

Galearis@Netking and silvercollector re silver#535635/14/01; 08:46:52

You said:

"Netking Question; Are these same smart cookies also multi-tasking and dumping Ag at the lowest inflation adjusted prices in over 100 years when the price & demand/supply dynamics may be about to have the same as a nuclear meltdown?, surely even a drunk in Central Park could answer that one friends. regards NK".

Well, I managed to survive the Toronto of 2001 for a miraculous 4 days this time, and although it was not raining to add an additional factor of danger, I DID venture onto the 401 twice! (smile)

My apologies to sir silvercollector ( I so DO like your handle!) for not responding during this time and hello sir Netking.

The above question is always one almost constantly at the forefront of the mind, and to date (for years to date) fundamentals have made little difference to our precious, precious metals markets, yes? And yet we see them by necessity putting on the costumes of masquerade for affect - the lease rate signs that metal is being accumulated to imply sufficiency, the BOE auctioned gold to go to the delta hedgers to back the derivatives to depress the price.
We SHOULD see a major attack on both metals today.

We see the predictable signs, perhaps, as gold (and silver) lease rates are up in the face of a new auction, as they accumulate to sell in order to prepare the new stage for the next period of depressed prices after the auction. It would seem this supply does not stretch the same distance that it once did, yes?

Although these times they are a ending, isn't it amazing how long they have done this with success? It is also not a given, in spite of a lot of spin to the contrary, that the times they will be ending anytime soon either.

In my worst case scenario opinion they will continue to be successful at this manipulation until the EURO is physically launched - and beyond if they can do it. Guaranteed they will do this with both gold and silver until there is no metal left. If necessary! Both the USD camp and the EURO camp require this - if necessary - to protect the world financial system. Whatever gold is left in the vaults will be the fulcrum to the new value of the metal - as will the production of the surviving miners.

The shorts will be then perhaps be allowed to cash out with relatively(?) /deflated or worthless dollars and the worst case scenario (for silver especially) is that they will cap the price. Industrial demand will be through the roof, but the price will STILL be artificially low and there will be NO metal to be had. Of course this will take down more than a few rather necessary manufacturing interests, but thank goodness the financial system (banking) will only be mauled and not destroyed. Please note, that the tone of the last statement does not transfer past the keyboard.

In taking your statement above at face value, that they can do this with such impunity for so long implies a disaster. The real question is how they will get away with it? Is Goldman Sachs as a MAJOR silver short all THAT worried about its situation? Or is there an "understanding" between them and certain other interests that gave them the confidence to take this road in the first place. Goldman and others of this ilk have been traveling this same road to many destinations in many different financial environments and the two things that come through with clarity is their flexible ethics and their great talent for survival.

Although I HAVE been drunk (not very often -honest!), I have never been to Central Park (can it be as bad as Toronto during rush hour? [smile])As usual in such a corrupted market environment there are always more questions than answers. And fundamentally (sic) I can't answer this one either. None can.



Mr GreshamSir Strad Master (5/14/01; 02:20:25MT - msg#: 53550)#535645/14/01; 09:01:42

What a wonderful announcement! And Eva Gabriella is a name that the angelic hosts are repeating amongst themselves with approving nods even now.

You will favor us with announcements of any future on-line radio performances (perhaps in joyful celebration of her arrival) that we may tune in to, won't you? After all, yours is the only actual voice amongst all of our comrades here that I have been allowed to hear. And I would like to again.

justamereBearSteveH Black Blade Journeyman Auspec/Working Kirk @ All#535655/14/01; 09:05:43

Several posters logic made me think that they might also have an interest in the book, "The Alpha Strategy" By John Pugsley. It is a bit dated (early 80's) and written to cater to the audience that existed at that time, ie the bogeyman of the day was inflation. However his arguements that the system is a ripoff are equally valid today.

Black Blade
53502 Right on!!!
53526 How many feet, average or about, are required to produce a megawatt hour of electricity? You say 22,000 new megawatts coming on stream. How much gas does this require? Is there any available slack in pipeline transmission? My suspicion is not. How many cu feet does a large tanker carry? My suspicion is that these 22,000 megawatts need a lot more transmission capacity than people really think. If one could put it in real numbers, eg. 500 new tankers will be required to supply the new electricity generation, the fact would become more real. That of course assumes that the producers can produce indefinitely, and since we have a finite supply of hydrocarbons, and are finding less each passing day, there is credance to the idea that there may not be much more to discover.

Journeyman 53512
One element that few seem to touch on is that the banks particularly (and the insurance companies) make wonderful concentrators of money. Many small deposits concentrated for a large loan to, for example, build a large factory, and thus create jobs. etc. etc.
Still really enjoying your posts.

Steve H.
53510 Interesting arguement.
53539 The Taiwanese also, have been for many years, buying gold with surplus US$ So much so that in the mid 90's the US government was officially complaining. These holdings are apparently not held as central bank reserves, but in a wholly owned subsidiary, where it does not show up on the books. From what I have been able to glean, the numbers are VERY large.

Auspec/Working Kirk
Given what I understand to be a love of precious metals by the Chinese, I would think that the buying and selling of gold and silver in Africa would more likely have the motive of influence than anything else. They might be using it as a tool to wrest influence or control away from other parts of the world (including US) Bring Africa into their sphere of influence by using PM as a sort of bribe????

Thats all folks, Back to the grindstone


justamereBearGoldfly 53510#535665/14/01; 09:13:31

I lied in my last. Here I am again.

Have you ever considered that Mothers day is 9 months after fathers day? Simple arithmatic. :>))


geRavi Batra & Credit#535675/14/01; 09:42:32

Begin quote

"… we don't have a free enterprise economy. It is touted as a free enterprise economy but we really don't have that. In fact, what we have are regional monopolies or a monopolized economy.
Some people call it "Crony Capitalism." The main feature of a monopolized economy is that the fruit of rising productivity goes to owners of capital, not to the employees. So there occurs a rising gap between productivity and wages. Wages are the main source of demand and productivity is the main source of supply so with the rising gap between wages and productivity there is a potential for a gap between demand and supply. And that has been occurring in the U.S. for many years now. So
the question is how have we stayed afloat for so long with supply rising faster than demand? The answer is demand has remained artificially high through the creation of debt, either from government, consumers, corporations and foreigners. All this debt has combined to lift up demand to
the level of supply. But debt created prosperity cannot last forever. So we have gotten into this mess by: First, allowing wages to lag behind productivity and secondly by artificially bolstering demand by creating a tremendous amount of debt". …

End quote

It follows that in a classical gold standard without fractional reserve banking, wages have to increase to equate demand to supply.

Carl HSouth Africa Soverign Risk#535685/14/01; 09:49:07

Does anyone have any thoughts on how great the risk of nationalization of the South African gold mines is? I'm particularly concerned if there is a backlash against the US/UK for manipulating the gold price.

Also a related question -- would I fair any better in such a situation if I were holding actual South African stock rather than depository receipts?

FredBearCarl H (5/14/01; 09:49:07MT - msg#: 53568)#5356905/14/01; 10:34:27

If you are worried about SA's sovereignty, why not hold Kruggerands instead of paper?

They're much prettier.

Hill Billy MitchellTurnaround @ # 53554#5357005/14/01; 10:34:35


I think you and ORO are looking at one side and I am looking at the other side of the same coin.

Sometimes we on this forum, due to time constraints, fire from the hip rather than taking some time to zero in on our target. I fear that that is exactly what I have done by offering my remarks concerning ORO's statement about U.S. households hedging against the dollar. You have come to his defense. I have been unfair to both of you. Please allow me some time. In a day or two I will prepare a lengthy response as to what I am really trying to say. I doubt that any of us disagree on this issue. The big problem is my lack of patience in taking the time to properly cover my side of the coin.

On another subject: have you noticed that POG has held up rather well in the face of this strong advance in the USD Index, since the surprise rate cut by AG in mid-April. Maybe I am reading this wrong but it sure seems like a strong signal for the direction of POG. Na, when the dollar begins to tank POG will probably tank with it. The simple fact that nothing seems to make sense in market relationships should give us heart. Trying to defy the laws of gravity does not bode well for those who try it. Let me offer my imprecatory prayer now: -- "How long O Lord?"

Very respectfully,


nummus aureusCongratulations Mr. & Mrs. Strad Master!#5357105/14/01; 11:18:56

(I have an extra Marshall Power Brake I can lend you.)
Now I see why you have not been posting as regularly as you once did (:-0} fiddling around home!
It's probably too soon to register her for a screen name and password here on USAGold, but let us know when she can hold a gold eagle by herself. My experience is girls are faster than boys in this regard, and much more content with a gold coin in both hands, (and seldom out grow it.)

Carl HFredbear Re Kugarrands#5357205/14/01; 11:19:21

I do hold physical gold and silver. Both paper and physical have advantages and disadvantages:

Physical advantages:
-Very low risk of loss of value.

Physical disdvantages:
-More cumbersome to deal with (shipping is a pain, especially with silver)
-Risk of theft (by government or others)

Paper Advantages:
-Leverage (e.g. Durban probably has 20 to 1 leverage on gold)
-Easy to deal with.

Paper disadvantages:
-In the case of South Africa, soverign risk.
-Coerision of corporate management by the cabal.

turbohawgRon Paul Watch#5357305/14/01; 11:48:13

Beesting and others, it's unconfirmed as yet, but word is there's a good possibility that Congressman Paul will be one of the guests tonight on Hannity & Colmes on Fox News. The topic: U.N. funding.

Stay tuned.


Sierra MadreHill Billy Mitchell...about hasty writing#5357405/14/01; 11:56:21

I picked up a set of "The Rambler", 11th edition about 1789, in Boston while on a visit. These books are crammed with Dr. Samuel Johnson's wisdom. He was the pre-eminent man of letters in London's 18th Century and was not only erudite, but wise: not the same thing! A thoroughly good man. (Didn't like Americans; he had his reasons; note, that I don't say he was right in that opinion)
Well, I find in one of his numbers of "The Rambler", a weekly publication he put out for some years, that he says many writers commmit the mistake of thinking that what they write in haste, will be clearly understood by readers. He who writes in haste, will often not be aware that his readers cannot guess what he is really thinking, since they only have his words to go by. So he warns against writing in haste. You have mentioned the same problem.

I take the opportunity of mentioning that those of us who are hoarding gold, are doing something that has not been the rule through history. We are taking advantage of a unique, once in an age - not once in a lifetime - opportunity of accumulating a stock of precious gold at ridiculously low prices. Hoarding gold was a relatively rare activity throughout history. Gold was held, by economically active people, as an inventory for liquidation of obligations and as a stock for investment in current economic activity. Thus, this hoarding which we are engaged in, is something completely out of the ordinary, something not generally present in "normal" times. This is why we are subject to opprobium by the generality of mankind, who do not understand the nature of our times. We are those who see more clearly, and we are necessarily few.

I think we should reflect that not only are we hoarding gold, our "positive" action, but we should also understand what we are NOT doing. What we are not doing, is "investing" as the world knows it today. We are really and actually on strike, in the Randian sense.

We are on strike, refusing to act in the "normal" manner, because we are unsatisfied with the conditions under which we are asked to perform the act of investing. We are the object of ridicule (which masks the fear felt by those who do not want to understand our position) because our actions do not fit the general pattern. Thus we are denigrated as "goldbugs".

When I am offered a GOLD BOND, issued by a serious company or a serious government, in a legal framework which will offer me guarantees, I may abandon part of my strike attitude. I may consider investing, because the conditions satisfy me. Not before that, will I part with any gold.

I think that at present, "normal investors" will in due course, abandon equities (not totally of course; some equities will remain interesting for the general market, even in the event of a panic) and head for US Treasury obligations. But, the enormous, gigantic debt load in the US and the world generally, will force a corresponding inflation of the money supply, in order to provide liquidity for that debt: make it payable, of course, but in ever smaller dollars or euros or what-have-you.

Those "normal investors", US persons and foreigners, who thought they were secure in US Treasuries, for instance, will find that they have only one alternative to "guaranteed confiscation": precious metals. Then, the current will shift in our favor, and it will turn out we are the wise men.

This is a certainty, confirmed by a fortune cookie message I got at a Chinese restaurant last week, which reads: "You will soon be sitting on top of the world". This is without a doubt, a message from on high. As good as any other prediction, anyway.


Centennial Precious Metals, Inc. / USAGOLDHard assets... Easy access!#5357505/14/01; 12:02:38

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beestingReply to Carl H #53568.#5357605/14/01; 12:09:43

Hi Carl,part of your message:
<<Also a related question -- would I fair any better in such a situation if I were holding
actual South African stock rather than depository receipts?>>

Carl, years ago I inquired about this same thing, here is some of the info I uncovered.
1. You have to hire a broker in South Africa to buy or sell stock for you.
2. If you take delivery of your stock certificate, if you are not located in South Africa, it may be hard to sell.
3. South Africa will not send(Paper) Rands out of the country, you have to have someone convert your Rands into your local currency, in South Africa, if you recieve dividends or when you decide to sell your stock.***
4. Tax laws may be very different there.

***NOTE: In the not to distant future Electronic-Gold accounts may make it much easier to convert currencies and/or Gold without going thru the current banking system, and with lower fees.If at some point your South African Broker has access to Electronic-Gold services and you have access to Electronic-Gold services, your prayers may be answered. See Sir Journeymans many posts concerning the new age of Electronic-Gold,,,,Banking?

IMHO, for the first time in my memory, physical Gold ownership may outpace paper Gold on rate of return, in the not to distant future,,,not investment advice.
Hope This Helps....beesting.

beestingThanks Sir Turbo, good to see you back.#5357705/14/01; 12:16:24

I live in a kind of remote area and T.V. reception is terrible, so I don't watch T.V. at all. Tell us here if Congressman Paul talks about Gold or related stuff.

Randy (@ The Tower)Fed lending long term as though a 50 basis point rate cut were already in the can.#5357805/14/01; 12:21:37

The Fed continued it's currency-pumping operations today as it added to banking reserves...the prerequisite to commercial lending which further expands the money supply on a system-wide basis.

With the FOMC meeting this week, it is instructive to see what the System Account Manager is doing at the eleventh hour.

While the fed funds market was trading today at a shade under the current FOMC target rate of 4.5 percent, the Fed added plenty more reserves to the banking system through several operations.

To begin, there was $2 billion in reserves added through 28-day repurchase agreements...and notably, the collateral was accepted at a stop out rate at very near 4.0 percent.

Next, the Fed added another $5.3 billion to banking system reserves via 3-day Rp's.

And finally, there was the bond-supportive action of the Fed's outright purchase of Treasury securities, effectively adding $730 million in permanent reserves.

Don't delay. Buy gold today!

Peter AsherMothers Day Births on Both Gold Forums#5357905/14/01; 13:02:47

Could this be an Omen
(Marge) May 13, 12:29Gold-Eagle

Little fingers curl up tight to make a tiny fist,
As fairy lips purse out as if to make a gentle kiss. . .

Eyes, wide as a kitten's, and little button nose,
You look like someone's angel--down to your pudgy toes.

Although you are so wrinkled and your face is still so
And the only song you seem to know sounds like a
shrilling wail,
When you are here before me, finally, I feel complete.
I've waited so long, sweet GOLDEN child. . . at last, we
finally meet.

Strad: Congrats on (#4?) and well done on the creative post!

NetkingPRC - Silver exchange formed. Gold to follow#5358005/14/01; 13:14:10,1073,13833-102008,00.html

The link an interesting read, confirms our recent GATA story.

Galearis/Carl H - Galearis Thanks for your comment, good points. Carl I believe it's the job of those who "peddle the story" to the market to provide the proof of this. However Ag bulls are relaxed(I am a physical buyer), yearly production over consumation deficit is unchanged, inventories are...has anybody seen where they have gone! So where does it come from?...leasing my friend...leasing. The more this happens, the more "bang for our buck" will we get when "July 4th" comes...enjoy!

Cavan Man#1 Reason To Buy Gold#5358105/14/01; 14:10:55

#1) A free trading gold market in China in thirty days or should quickly put great strain on available, above ground supplies. There are a lot of people over there and, gold ownership is a part of their culture.
Simply MeInterview with Prince Al Waleed on CNBC tonight at 6pm Eastern#5358205/14/01; 14:12:56

Heard this morning that a pre-taped interview with Prince Al Waleed will be presented on CNBC tonight at 6pm Eastern. The Prince rarely gives interviews, so I thought the information would be of interest to many folks on this forum.

STRADMASTER: Congratulations on the arrival of Eva Gabriella! What a lovely name! I hope that you will give us little updates on her growth and accomplishments in your future posts. Peace and harmony to your newly enlarged family!


Randy (@ The Tower)Asian musings.... points to lessening support for dollar as center of the monetary universe.#5358305/14/01; 14:19:05