USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
Mr GreshamBlack Blade#709263/1/02; 01:43:11

"As you can see, I have no confidence in the government or in man for that matter. "

Maybe I just feel like sticking my finger in the electric socket, but while we're enjoying the afterglow of all the appreciation for you, and popping Modelos all around, I'll ask if you've really reconciled all of your beliefs.

EarthFirst or Sierra Clubs aside, do you really think that there is a "Should" attached to Americans wanting "cheap energy"? And if those "free markets" can bring it to 'em, by gum, let's make sure we drill anyplace XOM wants.

I'm as glad for cities as you are, and I'm glad OTHER people like 'em, too. If everybody spread out evenly, we'd feel a lot more crowded on this little rock, you and I. They stay where they are, fine with me. But more and more, they spread out. The open places are filling in.

If you had to pick a number, how many humans do YOU think the breeding should have stopped at?

My number is about 1 billion. In other words, the other 5/6 should never have happened (which is kind of a hard topic to bring up in a conversation among 6 people "Who the %@$! do you think YOU are buddy?!? Are you saying that you're the only one who should be here?") Sheesh.

But given they are, and we are, how are we going to figure the carrying capacity -- LONG-TERM -- of this place? No limits? If so, then when? Do all 6 billion get to run rampant like we've been doing here? Just another animal doing that die-off thing.

Anyway, I don't want to get too far into this. You've probably done more as an individual to LIVE a conservationist ethic than most who preach it. And I'll bet you're speaking from more than a little experience in the resources field. (So you feel you can "talk on the wild side" a little more. (?) Plus that feeling of "Don't fence me in.") But I don't know that that cinches the case.

It took me a lot of years to get out of breathing everyone else's exhaust fumes. Got my kid growing up without 'em too now. (Got my own trees I can go hug, too, when I'm feelin' lonely -- {smile} )

I figure, if I'm not sure which way the argument shakes out, then let's make sure we don't fritz up the place before we are sure, rather than let Dick Cheney and Ken Lay rea$$ure us everything'$ all right, so let them go ahead, plea$e.

Do you really want every teenager who feels like tooling around in his dad's SUV every Friday and Saturday night to have 99-cent gas from now until it runs out, and whatever aftereffects of getting it are with us to stay? Don't make "environmental" a curse word; we live in it.

Talk more about who and how you would trust to go after those scarce resources; and when. My answer is: not these guys, in Washington or in Houston, and not now. Like you, I just "have no confidence".

Mr GreshamRon Paul & Greenspan#709273/1/02; 02:18:28

From GATA, here's the first account I've seen of the blipped-out exchange, where Paul first compared the Fed's operations to Enron's. (OK, now I see Chris P posted the yahoo groups link Wednesday night -- I'll leave this up, I missed it before, others may have too...)
Mr GreshamReading further...#709283/1/02; 02:24:04

Oops! Randy got the whole Paul/Greenspan exchange transcript in -- I think Weds. just flew right by me! Busy times -- and now, I'll take Black Blade's cogent advice: "And I might add - begin sleeping well at night. " Amen.
Mr GreshamNovak on Liquidity Crisis#709293/1/02; 02:43:54

OK, so I stayed up. This is the first mention I've seen of those verboten words in the main press.

"''Whenever you have a liquidity crisis, the last thing bankers are going to do is warn about a liquidity crisis,'' a corporate financial expert (who asked not to be identified) told me. ''They worry it might set off a panic.'' As an example, he cited the lack of warnings three weeks before President Franklin D. Roosevelt was forced to close the nation's banks."

And when you're sitting in that theatre, hedonically enjoying all the entertaining enhancements Hollywood can supply, remember not to use that incendiary rhetoric.

Of course, someone finally has to call fire "fire". The bearer of bad news gets is head chopped; the authorities have done their jobs (Not!), and the arsonists who set the theatre on fire go on to write their memoirs and take $25,000 speaking engagements.

Black BladeRE: Mr. Gresham - Gold Morning#709303/1/02; 03:37:40

Nature has a way of culling the herd as it were. Occasionally some disease runs rampant through civilizations to knock off a few to thin out the population. There were some excellent examples in the dark ages such as when the bubonic plague swept through the populated areas. I can almost hear the clatter from the wagons and the cries from the streets "Bring out your dead". Small pox also did a number on man. Perhaps another plague such as Ebola or some variant could sweep through the civilized world. At one time I had thought that perhaps HIV would be the culprit.

Of course man tends to kill each other in meaningless wars. Why? I don't know, but I think that man kills other men because he likes it. Then again the nations leaders, their relatives and friends aren't the ones going off to battle.

I am reminded of the scene in the movie "The Matrix" where the agent is talking to the restrained Morpheus and he says: "I realized that you (humans) are not even mammals. You use up the resources in one area and when those resources are used up you spread to another area. There's another organism like that. You know what that is? A virus!"

Nature has a way of cleansing itself and the Earth is quite resilient. Whether the "virus" is contained as natural selection weeds out the weak through disease, war or famine I don't think that it matters. For all of mans great feats of technology and advancements he sure pulls some really stupid stunts. The list of examples from history is almost endless. Yeah, I guess that I really don't have much confidence in my fellow man. Like you I am sure glad that most people like cities. I only hope that they stay there.

Kind of funny isn't it? The city dwellers flush there sewage into the worlds oceans, they dump their garbage out in the country, then they have the gall to deride those of us who explore for, develop, and provide the resources for them to live the comfortable lives that they now enjoy as earth rapers and defilers of the environment. I find that curious.

Speaking of Negra Modelo, I think I'll have another. Cheers!

- Black Blade

Black BladeOPEC Chief Sees Cuts Lasting All Year#709313/1/02; 03:57:05

LONDON (Reuters) - OPEC Secretary-General Ali Rodriguez said on Friday he saw the cartel maintaining stringent oil production curbs for the rest of this year to lift prices back to OPEC's $22-$28 per barrel target band. In an interview with Reuters, Rodriguez said he was confident that rival oil power Russia would prolong its crude oil export cut into the second quarter, to match the time scale of OPEC's reduction.

Black Blade: I am surprised that the Russians haven't cheated on their quotas more than they have. The higher oil prices must be weighing heavy on the US economy and be holding down any perceived economic recovery.

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Black BladeGold at $335 Still In Play#709333/1/02; 04:34:00


Gregor Krall, his counterpart at NIB Securities, isn't as enthusiastic about gold's immediate prospects and says it "still may battle on the upside for the moment" although he reckons the latest surge in the platinum price could be supportive of gold's cause. Krall says he would remain a buyer of gold at around $290 and thinks there is potential for a move towards the $330 to $335 mark in the next two to three months.

"It's hard to quantify when," says Krall, "it could be in a few weeks, could be in a few months." As for shorter-term levels, Krall sees support at $294 as the dollar gold graph had formed a "small double bottom" at that point. On the upside Krall pinpoints $301.50 and then $307.50 as key resistance levels.

Black Blade: "Interesting"

kludgeRE: ANWR #709343/1/02; 04:56:10

IMO, explore, drill, and cap ANWR. An in-ground Strategic Reserve that's ready to pump on short notice. Find other domestic reserves - and place an "X" on the map. Oil is cheap, bottled water costs more. OPEC has no choice but to sell it, unless sand suddenly finds a market.

At roughly 600,000(?) barrels a day from ANWR it would be little more than a drop in our daily bucket of usage. I think it would be better used as an, albeit small, trump card in our dealings with OPEC. It also leaves some for our children and grandchildren, when it's value will almost certainly be much higher.

Pump OPEC dry of cheap oil first, save ours for us and our friends in the future.

BB: wasn't that reference to "cockroaches" in The Matrix? Could be wrong, only saw it once.

Black BladeRE: Kludge - ANWR#709353/1/02; 05:44:43

Actually the ANWR would be more economic as we already have the pipeline and means to draw of the reserve. It is estimated to be roughly equal to Prudhoe Bay's reserves. The Alaskans favor the project and they resent the lower 48 interference in what they consider an Alaskan resource (not to mention the royalty checks). It may be drilled and extracted coincident with North Slope NG and the proposed NG pipeline. There are enough votes to pass drilling in ANWR if it ever reaches the Senate for a vote.

I am sure it was "virus" as I have the tape and just watched it last week. It is quite a odd thought provoking film. Cheers!

- Black Blade

nickel62A very good analysis of what happened in Argentina and why#709363/1/02; 05:48:53

It is time for Argentines to cash in their experience with government power, government law, government regulation, government money, and government care. They attended a hard school and paid high tuition. It taught all who cared to learn that, after every conceivable political device has been tried and found wanting, there remains freedom. When political minds are unable to concoct yet another law or regulation, another scheme or another care, there always is freedom. It is the very last hope, short of despair.


Black BladeSEC backs Andersen offer#709373/1/02; 06:05:00

Agency urges plaintiffs to accept $750M settlement, but attorneys balk.


NEW YORK (CNN/Money) - The Securities and Exchange Commission is urging plaintiffs suing accountant Arthur Andersen for its role in Enron's collapse to accept a settlement totaling $750 million from the Big Five firm, according to a published report Friday.

Black Blade: Arthur Andersen has been fired by some clients so far. I would expect that many more corporations will cut their ties. I also expect many more lawsuits. They will likely face lawsuits from angry Global Crossing investors next with many more to follow.

USAGOLD / Centennial Precious Metals, Inc.A new feature of News & Views. Sign up for access and don't miss a thing!#7093803/01/02; 06:14:08

Myths & Realities

Myth: Central banks are massive sellers of gold and that's why the price has been held in check.

Reality: In 1950 central bank gold holdings were 33,000 tonnes. By 2000, the central banks housed 30,000 tonnes. Through all the announcements, the threat of sales and actual sales -- the London Gold Pool of the 1960s, the U.S. Treasury and International Monetary Fund sales of the 1970s, the European central bank selling of the 1980s, and the Australian, Argentinean, Belgian, Dutch, British and Swiss sales of the 1990s and 2000s -- less than 10% of the gold sold actually left the central bank network. From this one might conclude that official sector liquidations have been off-set for the most part by official sector acquisitions. Central bank gold selling has been a sound and fury signifying nothing.

Chart Courtesy of the World Gold Council / London

RobotGuyBlackBlade ---- Resiliant mother nature#7093903/01/02; 07:42:38

One of my favorite topics of discussion. I believe there are way too many humans on this planet. Plagues and diseases that would have otherwise killed millions of humans in recent years have been hindered by the presence of our medical professionals. People are forcing children to have sex with them for food rations in starving countries. Why do they do it? Who knows. What allows them to do it? Because there are so many people that they can't feed themselves, so they'll do anything for survival. North America is obviously less densly populated than most other countries in the world, and we might even have the capacity to be self supporting. Native tribes of North America would battle over fertile grounds and good hunting areas, and once an area was depleted of most of these things they would move to another area and battle for that. I don't think we've really changed all that much, our tribes are much bigger, and we've got better weapons, and we have bigger wars. If this instinct is buried in our self conscious, I think we're in for a big ass war in the near future. If you lived in an arid country and your people were starving and dying, wouldn't you go to war for a fertile land so your people could survive? What if you thought you could somehow overpower North America? I know it sounds riddiculous, but it's not impossible.

Mother nature has come up with some fantastic ways of challenging humans in order to flush the system. I don't go to doctors when I'm really hurting with what might be the latest cold/flu, whatever. I like to allow my body to attempt a recovery, if one day I get some virus and I don't make it simply because I didn't go to the doctor, then I've given back to mother nature all of the wonderful things she's provided for me.

Warped RobotGuy.

RobotGuyTo add to my previous post#7094003/01/02; 07:58:26

There is one thing in the back of my mind that always haunts me. I have been a contributor to the 'modern world'. I drive a vehicle, I work in the automation industry, I consume commercial goods and energy and I play my part in the ever expanding human snowball. My dream? To save enough money to buy the piece of land that will allow me to be 100% self supporting.
uponroofsector/usagold/all#7094103/01/02; 08:08:32

What do you make of the above link?
SpartacusJapan#7094203/01/02; 09:06:46

The BoJ talks of systemic collapse By Victoria Marklew from Northern Trust Company:

---We've tended to criticize BoJ Governor Hayami in the past for a lack of realism and for spending too much time chastising the government and not enough focusing on the economy's woes. But yesterday, he stepped up to the plate in quite a remarkable way - not, of course, in actually doing anything but in terms of what he said.

Policy-wise, the BoJ symbolically eased again, raising its monthly purchases of Japanese government bonds from ¥800 billion to ¥1 trillion. However, of more interest was the statement released after the bank's policy-setting meeting this morning, which contained six main paragraphs. The first noted that extremely accommodative conditions are being maintained in the financial markets, and that the year-on-year growth rate of the monetary base has reached nearly 30%. The second pointed out that, with the fiscal year end approaching, liquidity demand may increase and so it is crucial "to secure financial market stability." The third paragraph outlines a promise to provide liquidity to meet a surge in demand irrespective of the current account balance target of ¥10-15 trillion; the increase in JGB purchases; a loosening of the conditions under which banks can use the Lombard-type lending facility for the period March 1-April 15; and finally, a further broadening of the range of eligible collateral for lending.

It is the first measure that is crucial - the bank is promising to do what it can to ensure no March 31 liquidity crisis. Then comes paragraph four: "To realize the full permeation of the effects of strong monetary easing, it is essential to strengthen the financial system and ensure its stability by making a swift move to resolve the non-performing loan problem. It is also vital to make progress in structural reform." Paragraph five states that, to exit from deflation, "it is indispensable to revitalize economic activity and to bring the economy back to a sustainable growth path through decisive steps including those described in paragraph four." The final paragraph says the BoJ will "continue its utmost efforts as a central bank" by providing liquidity and by "preventing systemic risk from materializing as the lender of last resort."

In his subsequent press briefing, Hayami said "If we speed up the disposal of bad loans, banks' capital would inevitably decrease. And it's a matter of who comes up with the funds … I think public funds should be injected promptly." The earlier the better, he said, possibly by March 31.

Let's make this clear: The governor of the central bank of the world's second largest economy, and one that is home to some of the world's (theoretically) largest financial institutions, has just said that he is having to act to avert a systemic crisis, and has called on the government to recapitalize the financial system as fast as possible. The monetary base is expanding rapidly, and the M1 money supply measure has been increasing sharply. Nominal GDP is contracting while real interest rates remain positive. The cost of maintaining the huge public sector debt is rocketing.

For the past decade, successive Japanese governments have been able to duck responsibility for straightening out the economy's problems because the nation is so rich - huge current account surpluses and foreign exchange reserves, and the fact that most government debt is internally held, make Japan the world's largest net creditor. But read the previous paragraph again. At some point, the financial sector and/or government bond market and/or currency is going to collapse. It's just a question of which comes first, and how soon. ----

USAGOLD Market CommentaryThe Last BOE Sale on Tuesday; Gold Market "Occupation" to End#7094303/01/02; 09:10:03

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"For those who want to buy [gold], the temptations are greater and the justification is stronger. Those who have listened to the naysayers [on gold] have probably missed the recent rally [up 19% from April 2001 lows]. So what should they all do now? Buy on the dips, betting that gold can bounce back over $300 and go a little further." Jonathan Fuerbringer, The New York Times (2/24/02)

"We expect that this [gold] rally may prove to be less of a temporary blip and more of a trend.'' Howard Patten, BarclaysCapital

Gold Market Brief (3/1/02). . . . . . Gold continued its languid drift in a southerly direction biding time in advance of Tuesday's Bank of England sale -- the last in the series. Reuters reports "One large commission house bought three 300 lot chunks early on, according to sources, only to be met by selling from an investment bank." Traders put support at the $295.50 level and resistance at $297.00. Will the market celebrate the end of the BOE gold market "occupation" with a major rally? I'm sure that Eddie George and the Blair government will be happy to see the sales come to an end given the amount of heat they've taken since the first gold left for stronger hands three years ago. At the same time, the British people are unlikely to forget a program that lost the British government a great deal of money and accomplished none of the goals stated by Exchequer and central bank officials throughout the process -- chief among them turning 300-tonnes of gold into paper currencies from which they were supposed to receive a return. Over the past year gold is up in the neighborhood of 20%, the euro has cratered and the dollar approximates a return in the 2% range. So much for central bank prescience when it comes to money matters. As we all know there were other reasons for the sale -- unstated reasons -- probably having to do with British commercial banks in trouble on their gold loans and the BOE was merely fulfilling its legacy as a lender of last resort (only this time it cost them in more than just paper and printing costs.) We stated that as the real reason for the sales the day the auctions were announced. We stick to that thesis. Central banks, as we have said in the past, do not sell gold because they want to but because they have to -- the BOE being no exception.

Along these lines, we think you will find the first installment of our Myths & Realities series an interesting retrospective. Short & Sweet is immediately below. Please scroll. I had planned to update Short & Sweet this morning as I have tracked some interesting new material, but we've been hit with a blizzard here this morning and I ought to try to make my way to the office. I'll try to do something later this afternoon if its a quiet day at CPM, or possibly Saturday morning, since it appears we'll be socked in. In particular, James Grant had a particularly interesting essay recently that I would like to dig into. Have a good weekend, my fellow goldmeisters.

Gandalf the WhiteHi Ho SILVER !!! #7094403/01/02; 09:56:33

WOWSERS, look at a silver chart right now !

Gandalf the WhiteJump SPOT, JUMP !!#7094503/01/02; 09:58:12

CoBra(too)Is the Mini-Recession Over, or is it a Mirage?#7094603/01/02; 10:01:06

In view of the host of recent positive economic numbers, even Greenspan is positive, while not yet convinced. As it seems the consumer is still the main "culprit" for this fast turnaround, if it is a turnaround.

Dr. Kurt Richebächer titles - Recovery Mirage!
"This unprecedented profits carnage is really the most ominous feature of the U.S. economy's present downturn. Equally unprecedented and ominous is something else: the fact that this recession has occurred in the face of the most rampant money and credit deluge in history".

Not much to add to Dr. Kurt's musings. Except that this hoped for recovery again is brought about by the american consumer. How much more blood can be squeezed out of the already financially kaput consumer in view of an ever growing debt- and RE Bubble?

If the stealth wealth of the consumer is the only foundation for recovery, I would suggest that it can't be much of a recovery, come reality.

There will be no lasting economic recovery until the imbalances of the boom 90's are worked off, including the leveraged derivative pyramid, and real savings - the only source of capital and its investment are rebuilt.

Until that time, which may take a while PM's will be the only safe place to be.

IMHO - cb2

SiochainQuestion#7094703/01/02; 10:02:26

PMs are still my prime purchasing which I continue to add...but I am considering buying some gas/oil and water that are not impacted by Middle East ...just starting my research

I know some of this board have experience in this area...any suggestions of companies I should include in my DD review

As always


You're a great Board!
PS I did buy my shotgun one is going to mess with my PMs ..or family!! (will add handgun)

Mr GreshamBlack Blade#7094803/01/02; 10:18:38

Way to say it, bro. Maybe being a "doomer" means just having your eyes open enough to see when you're living your lifetime on the downside of a longwave trend. (Or waiting for Nature's next "surprise".) And having the spirit and love of life enough to enjoy it while you're here.

Raising a cold one (later, not at this A.M. moment. I'm trying to catch some Dow puts in another window) to Courage and Intelligence, though. They seem a strange anomaly in the long slide to Entropy.

Gandalf the WhiteOK -- Goldfly !!! It is TIME to let SPIKE OUT !!!#7094903/01/02; 10:25:02

sector@uponroof...The Fed's Equity "Derivitive" Plans#7095003/01/02; 10:53:59

It seems from your Fed link that they are implementing the legislation that Congress has foot-dragged on. Others are studying the release more closely so I will wait until we have more minds on this.

Glass/Steagall's repeal permitted lots of stuff so this may just be a calibration that allows banks to own derivatives as hedges but not equities [But what's the real difference anyway?].

This may, just may be the vehicle that the Fed uses to "distribute" gold derivative losses to all other member banks in order to avert a collapse of JPM.

This piece appears to be an important indicator when viewed with the other cabal moves of late...they are not the moves of a confident, in-control group.

Japan is the key to me. Mrs Watanabe has the economic future of the Western World in her hands. If she, and a group of her friends, buys 122 ounces of physical each, then we see tens of thousands of tonnes of new demand...and the fall of the Japanese banks with the fall of JPM as a won't take
long to play out.

Cavan Man@CB(too)#7095103/01/02; 10:58:50

Expansion and turnaround will require business (capital)spending. That's my reckoning. (IMHR)
Cavan Mansector#7095203/01/02; 11:06:07

RE: Japan

I think Japan is beaten psychologically (that's important I think) and if I am right, there will be heck to pay globally. I mean, put yourself in the average guy's shoes. In Japan, the situation has steadily been going from bad to varying degrees of worse for over ten years. What has been coming out of Japan in the context of offial announcements does not even appear to be a glimmer of hope for improvement. The cure is strong medicine. They won't take it.
CoBra(too)Capital Spending!#7095303/01/02; 11:14:35

@ CM -Expansion and turnaround will require business (capital)spending. That's my reckoning. (IMHR)

Exactly, my friend. And real capital spending can only come from real savings, derived from real earnings.
The consumer and most of corporate america has spent today on (potential) future earnings.

Kind'a interesting the POG spikes on a day as today.

Regards cb2

Galearis@Mr. Gresham#7095403/01/02; 11:22:26

Well said, sir your #70926

Yes, all sides tend to stick heads in the sand when it suits a perceived self interest. Many who label the environmental movement with perjorative names are most often those who have a vested interest in a status quo that is profitable for them OR have choosen to believe a position of convenience for them without the benefit of having looked closely at the other argument. Often the solution to this is just taking the time to care and look at what is being destroyed. If a population does not care about an ecology that is the foundation of their collective lives, the consequences of neglect would seem assured. Having gotten my own feet wet "out there" (in the environmental sense) I can attest that the worries are real. But my arguments not only go unheard when stated, they are not even comprehended. It is easy to become discouraged.

And so we humans are increasingly having to make a choice between the "good life" of economic freedoms and the dictatorship results of these excesses. That the results go unpercieved say more about the human ability to look the other way, a stand on cultural/religious positions, a neglect any educational level of comprehension in the areas, or for the elitest the ability to handle tricky political situations caused by ecological damage in a more tricky mannor than their tree-hugging adversaries. But guess who gets the funding?

The problem with capitalism and free enterprise is that the ecological world does not function on the same principals. There is no such thing as profit in a closed system.

Or from another point of view: the debts of an economy can be paid back in time with pain and consumption adjustments; the debt to the world is increasingly not redeemable in the important areas insulted.

An interesting quote: "I have no confidence in the government or in man for that matter." Ironically the environmental side often says the same thing.... So far they have far more the reasons to complain. And perhaps they hold the high ground too, having deep concerns for what for many is mere abstraction, as opposed to their opponents who wish only to be rich on the more philistine measures of perception.

Best regards,


SiochainBelievers battle naysayers; Greenspan talkin' oxen#7095503/01/02; 11:29:46

Interesting how much "they" may be at $100 LOL....vs higher gold prediction...and the fight goes on...but it looks like it's just a matter of short time when maybe they will be saying gold might "fall" to $300

Tom Calandra (partial)
SAN FRANCISCO (CBS.MW) -- The price of gold is trying to keep its head above $300, with little success. Yet shares of the riskiest gold mining companies, the so-called junior exploration companies, are at their highest points since late 1999.....

"Gold stocks had a very good year last year, and they remain the top-performing sector this year," notes Robert Bishop, editor of the longstanding Gold Mining Stock Report. "Despite this, gold funds are not reporting new inflows of cash, and I sense there is a significant amount of disbelief associated with gold's recent flirtations with the $300 level.....

"Veteran gold investors, like Bishop at Gold Mining Stock Report, acknowledge the price of gold needs to notch more gains to keep the high-fliers, well, flying. "Almost nothing in the gold stock sector is cheap at this time," he is telling clients. Yet Bishop is very optimistic that bullion will continue its slow march across the $300 level and beyond. "My expectation is that the days of gold trading below $300 are severely limited."

Andy Smith, a Mitsui Precious Metals analyst in London, says "gold's ambitions as a contender (have been) left on the ropes." Smith points to recent testimony by Alan Greenspan, who chronicles the recuperative powers of the American economy. The strength of the dollar and a steadily recovering U.S. economy could force gold to "sink at least to one knee," says Smith, who predicts gold years from now will trade below $100 an ounce.....

Smith, in his just published report from London, adds a caveat to the Greenspan myth of the perpetual greenback: "What if, defying decades of honed performance, the perpetual progress machine of fiat money took a step backwards? Then, as Mr. Greenspan told the numismatists: 'We may have to go back to seashells or oxen as our medium of exchange.' " (Richard Nixon severed the price link between gold prices and the U.S. dollar 30 years ago.) The Fed chief added, "In that unlikely event, I trust, the discount window of the Federal Reserve Bank of New York will have an adequate inventory oxen."

Greenspan, in congressional testimony this week, clarified his oxen talk, saying the system by which the world's currencies trade against one another appears to have been successful, but he was not about to predict how long that would last. Smith, the analyst, is pessimistic about gold's role in the electronic economy yet still thinks there is room for gold prices to go higher this year.

sectorRigging the GDP Numbers...The True Clinton "Legacy"#7095603/01/02; 11:41:41

A true and fair view of productivity
Alan Greenspan has endorsed an overstatement of US economic performance comparable to Enron's accounting methods, says John Kay – Financial Times
Published: February 28 2002 19:36 | Last Updated: February 28 2002 19:51

The collapse of Enron has shaken markets because it has reminded everyone that corporate accounts are interpretations, not facts. Even the most conservative of accountants has been under pressure to find statistical confirmation of the stories of heroic leadership, organisation transformation and technological revolution. Everyone knew these things were true, even if data were sometimes slow to reveal it.

This hubris distorted perceptions not only of the performance of US companies but also of the performance of the US economy itself. We talk about economic growth as if it were objective fact, like population growth or temperature. But national income accounting is every bit as much a subjective enterprise as the private- sector accounting on which it ultimately depends.

When politicians and pundits talk about economic growth they are referring to movements in the level of gross domestic product at constant prices. This concept is measured gross - no account is taken of asset depreciation or obsolescence. And GDP is deflated by a price index so that it represents the volume, rather than the value, of output. Such deflation was easy when output was mostly steel but is much harder in the knowledge economy.

A bar of steel is - more or less - a bar of steel: the volume of computers is an elusive concept. As computer prices have fallen, people have got more computer for their money.

But how much more? Statisticians use two main techniques. One is to track the falling price of the same computer. The other is a technique known as hedonic price measurement, which allows for changes in the quality of goods. Depending on how you do the sums, the fall in computer prices in the past five years ranges from 30 per cent to 75 per cent. Britain is relatively conservative while the US is very aggressive.

This makes a big difference. Real expenditure on computers in 2000 in Britain was about £10bn. The UK's Office for National Statistics estimates that computers that cost £10bn in 2000 would have cost £18bn in 1995. But if US price indices were used, the figure would be £37bn. The difference amounts to 2 per cent of British GDP. Over the five years, Britain's reported growth rate would have been almost ½ per cent a year higher if UK statisticians had used US price indices.

So what is the right answer? We are not trying to measure the benefits of computers. These may well be much larger than £18bn, or even £37bn, but such effects are already included in the output of the industries that use computers.

The £18bn figure is an attempt to answer a different question. What part of business spending on computers should be capitalised, rather than treated as a cost against current output, because it contributes to future rather than current output? General accounting practice allows you to avoid charging such expenditures against profits, with two qualifications.

You must capitalise it at its actual cost, not at some hypothetical measure of what it might have cost in the past or be worth in the future. And you must write off capitalised expenditure over the lifetime of the asset.

The rules for measuring GDP do not impose either of these conditions. They allow extravagant revaluation. And they do not require depreciation of the capitalised expenditure.

Under standard accounting principles, the maximum expenditure you could capitalise would be the whole of real spending on computers in 2000: £10bn or so. And you could justify this only if you could argue there was no need for any write-down of previous expenditure on computers as a result of scrapping or technological obsolescence.

My estimate is that the replacement cost of the stock of computers in Britain in 2000 was probably about £20bn. Available computing power probably rose in 2001 by 20 per cent or so as a result of net new investment, minus depreciation and scrapping. Because of the falling price of computers, this larger stock of computing power was probably not worth any more at the end of the year than the smaller stock was worth at the beginning.

A kindly auditor, such as the Andersen folk down in Houston, might allow you to treat £5bn or so of computer expenditure as capitalised. If a commercial company seriously proposed to credit £37bn to its profit and loss - on the grounds that this is what it might have had to pay if it had not bought them so cheaply - its directors would certainly face a congressional committee and probably end up in jail.

The bottom line of all this is that published data on GDP probably overstate output growth in the UK over the past five years - but by less than 1 per cent. Economists have known for years that constant price GDP was a flawed measure of output. But until the information and communications technology (ICT) revolution, errors were small and were offset by the advantages of data series that were comparable over time and between countries. US statisticians were quick to see the difficulties falling computer prices might pose and adopted a procedure called chain linking to reduce the distortions. Britain's ONS will follow but has not yet done so. The problems of interpreting US accounts are both complicated and reduced by chain linking. But the aggressive US assumptions about ICT price falls mean that the difference between GDP growth and output growth is larger in the US than in Europe.

Over the period 1996-2000, ICT investment contributed almost 1 per cent a year to reported US growth. Simply substituting net investment at cost for gross investment at revalued prices reduces this by about half.

The effect is that reported US GDP growth overstates the real growth of US output by about ½ per cent a year over the period. This accounting difference is equivalent to the main part of the productivity miracle that still enthuses believers in the new economy.

It is not just US companies whose figures are now in question. USA Corp capitalised much of its software expenditure, revalued that expenditure at the highest price it might ever have paid, calculated its profits without any depreciation of revalued assets and announced stunning results to its investors on the basis of these assumptions.

Who were its officers at the time? Bill Clinton, the former chief executive, may be spending more time with his family. But Alan Greenspan, who has repeatedly argued that US economic statistics should be more consistent with the optimistic reports of US business people, is still the chief financial officer.

A downward spiral...shown above in exquisite detail...unstoppable. Rotten to the core...ith Greensapn at the helm...a perfect "evil axis" chump.

He will never, ever admit falibility or culpability in the coming meltdown. He will continue to babble on in FedSpeak to the wonder Lawrence Meyer quit in disgust.

GoldnSilver2002Everything is the same today,as it will be tomm,as it was before...not!#7095703/01/02; 12:24:42

Finanaces aside,the world is facing more than financial problems,we have holes in our ozone,fish stocks dying,forests depleting,population growing,deseases increasing,record debt and the middle east is heating up.At any time now we could have another terrorist attack,a collapse of japan or jpm chase,an earthquake in california
or any other host of natural factors which play into golds hands.On top of all this people are living and working longer.All of these factors did not exist before and have absolutely no intention of going away.So what do we do?The same as Japan ,bury our head in the sand and say"it will go away if i ignore it!"The current system we are running is not maintainable and at some point any one of these natural
factors could come along and rip any financial equation to shreds.Greensapn should have said " We may have a moderate recovery barring anyone of a hundred natural factors which are more likely to happen than the recovery itself!"

BoilermakerCurmudgeonry#7095803/01/02; 12:32:31

I'm proud to be a certified gold curmudgeon. My wife isn't always so pleased about it. Curmudgeons will inherit the gold. Alan Greenspans shiny New Economy will be repossessed by the gold curmudgeons of the world when he can't make the payments. Thanks, Alan.

Good weekend to all

Mr GreshamValuing Mine Reserves#7095903/01/02; 12:59:08

Not my topic much, but some may find it a "deeper dig" into mining values...
neer-do-wellCavan man Siochain niclkel62#7096003/01/02; 13:54:38

Cavan man..Your remarks about the pschology of the Japanese rang a resonant line of thought with me. I've had some business dealings with Japanese. I expected them to be "honorable", they were not. So since my wife was teaching the language I studied it for about a year,ugh,after 5 years I can barely remember how to say hello. Oh well, I just wanted to cuss them out in thier own language anyway. The answer to the banking crisis will be the result of concensus of one particular group ( as per custom), that group in this case will be the flag officer club of the imperial navy. The navy might be gone but the club remains.

Siochain... If you buy a handgun consider the likelyhood of using it without a moments notice. You can't afford to fool around with a safety and chambering a round etc. Automatics are very sexy but a ole double action revoler is mighty handy.

Nickel62..Freedom as a last resort! Beautiful thought! Every one of us lives at the edge of a legal abyss surrounded by lawbooks. Laws protect us?
Hmm, Argentina? It's warm there huh? Someplaces.

JonStock Market Activity#7096103/01/02; 13:57:05

Defies any attempt to rationalize. Could it be the ESF to divert attention from PM? This certainly would explain AG's recent comments. Or am I getting paranoid?
Rockgoldnsilver2002#7096203/01/02; 14:23:53

well said Sir Goldnsilver.
R PowellUp everywhere except for bonds#7096303/01/02; 14:42:07

Dow +262.73
Duck +76.50
S+P +25.60
USD +0.21
Gold +1.30
Silver +5.0
CRB +2.72
Bonds were down
Happy Weekend!

R PowellMr. Gresham/ too many of us#7096403/01/02; 15:00:37

My dad used to say that this earth is a beautiful, wonderous place with only one flaw, that being too many people. He also held the opinion that this was only a temporary problem and wondered if the next dominant species would fair better after us. He was a kind, honest, hard working soul but his opinion of mankind bordered upon contempt. He thought quite a bit less of government.
I have a feeling that next week's BOE auction may not turn out as business as usual. I sense a disconnect between the equities index numbers and precious metals prices. POG and POS are coming of age, less dependant on other economic occurances. Not now nor ever free, but prices may be set more by precious metal market forces and less as a reaction to other markets' fortunes. Anyone else "feeling" any premonitions?
Happy weekend to all!

nickel62An Article from "The American Free Press" (Yes there is one) #7096503/01/02; 15:41:07

Will Greedy Moneylenders Collapse World Economy?

A recent lawsuit is exposing a risky scheme in which the federal government and some of the world's biggest banks are conspiring to keep the price of gold low in order to boost profits and prop up the United States dollar.

Exclusive to American Free Press

By Mike Finch

A lawsuit has been filed in federal court alleging that the U.S. government, with Wall Street's biggest banks, has been conspiring in a scheme to keep the price of gold low in order to boost profits for the world's biggest bankers while artificially keeping the U.S. dollar strong internationally.

Reginald H. Howe of the Gold Anti-Trust Action Committee (GATA) has filed a lawsuit (Case No. 00-CV-12485-RCL) in U.S. District Court in Boston against the bigwigs of the Treasury Department, the Federal Reserve and several banks for "damages arising out of manipulative activities in the gold market."

The suit alleges that since 1994 the government has been collaborating with the world's top banks to keep the price of gold stable. The banks do this for profit, and the government does this to fool the world by making the dollar look much stronger than it is.

Alan Greenspan, chairman of the Federal Reserve Board and William McDonough of the Treasury Department, and banks such as Chase Manhattan and J.P. Morgan are among the alleged conspirators.

"This manipulative scheme," plaintiffs said, "appears directed at three objectives:

* To prevent rising gold prices from sounding a warning on U.S. inflation;

* To prevent rising gold prices from signaling weaknesses in the international value of the dollar; and

* To prevent banks and others financial institutions, which have funded themselves by borrowing gold at low interest rates and are thus short of physical gold, from suffering huge losses as a consequence of rising gold prices."

Since Roman times gold has been an international monetary unit. It is a commodity that cannot be grown or reproduced. Because of this, much of the world looks to gold as a yardstick for the value of different currencies-even the U.S. dollar-until recently.

In the United States paper money was backed by gold until 1934 when President Roosevelt ended the do mestic coinage of paper money. Until 1934 you could trade your paper money in for gold coins-even at your local bank. Gold backed the U.S. dollar in international monetary dealings until 1971, and was therefore the ultimate measure of the American dollar as well as other world currencies.

In 1971 the United States ceased redeeming dollars for gold. Since then, the international payments system has "moved to floating exchange rates with no currency convertible into gold at fixed parities," said Howe. Paper money, which once was anchored concretely to the value of gold, was now set adrift.

Even though paper money was no longer formally mea sured by its gold backing, gold was consistently used as a barometer for inflation here and abroad. There fore, if the government could control the value of gold, it could falsely control the value of the dollar.

Right now the International Monetary Fund has shoe-horned the world into using the dollar as the international monetary unit; therefore the world has interest in the dollar's stability.


According to Howe, the Exchange Stabilization Fund and the Federal Reserve System have not been open in their dealings in the gold trading market. He said that the government is underwriting the gold loans of the big banks, and the big banks are trading to keep the price of gold stable.

The government is helping the banks manipulate markets to their mutual benefit. But the goods economy is based on manipulation of the gold price, not the true value of the dollar, he said.

"At least half of the Senate is aware of this but are doing nothing about it," said Bill Murphy, researcher and founder of GATA.

In dealing with public officials, Murphy said, "I've gotten the distinct impression that this is a national security issue."


The complicated scheme, Howe said, goes something like this: The big banks borrow gold on paper at very low interest rates and then sell it on the open market. The bankers then use that money to purchase stocks or even high-risk derivatives which yield higher returns. The banks then make a killing on the deal if their stocks or options appreciate.

According to Wall Street analysts, many of the world's biggest banks hold trillions of dollars in derivatives. For example, J.P. Morgan's derivatives holdings now stand at $29 trillion-nearly three times the United States' annual gross domestic product.*

The risk for the banks comes in the fact that they can only pay back the original loans so long as the yields on their purchased stocks are greater than the cost of the borrowed gold. If the price of gold were to go up even slightly, analysts note, financial companies like J.P. Morgan, which holds about 30 billion dollars in gold, could go belly up.

If gold increased in value from just $300 to $400, big banks like J.P. Morgan would then have to pay a great deal more to buy their gold back to pay off their debts.

So, in order to prevent the total collapse of the world's largest financial institutions, says GATA, big banks and the government have collaborated to artificially fix the price of gold.

The group alleges in its court complaint:

"Annual new mine production of gold in 1999 was approximately 2,500 metric tons, about the same as in 1998 and as estimated for 2000. At the same time annual gold demand is running at over 4,000 tons. Notwithstanding the annual excess of demand over supply . . . the deficit between new mine supply and demand, which has been growing steadily during the period covered by this complaint, has been met by scrap recovery, by some sales of official gold, and most importantly, by leased gold mostly from central banks."

Under the basic market principle of supply and demand, if the supply is the same as the demand, the price of a commodity will stay the same. What GATA and other people are arguing is that the supply is much smaller than the demand, so the price of gold should skyrocket. They say gold should be worth about $600 an ounce. But because the big banks and government are interfering, the price of gold has not changed. The government and big banks are creating a false gold market for their own profit.

If this is true, what happens when the bankers run out of real gold and paper to satisfy the market demand?

The price of gold will skyrocket, inflation will be back with a vengeance and big banks will have to pay the piper, says GATA.

One byproduct of this scheming has been the devastation of economies of the developing world. Sub-Saharan Africa, dependent on its commodity income, is being cheated out of the true value of its gold and consequently out of other natural resources.

Defendants in the GATA suit are the Bank for International Settlements, Alan Greenspan, William J. McDonough, J.P. Morgan & Co. Inc., Chase Manhattan Corp., Citigroup Inc., Goldman Sachs Group, Deutsche Bank AG and Lawrence H. Summers, secretary of the treasury under former President Bill Clinton and the current president of Harvard University.

CoBra(too)There's a Reason ...#7096603/01/02; 15:58:36

in every season,
as all is told -
to accumulate


'T was a good day - say's I -
All signals are green - like the green in span - and only one of the nifty 50 Wall Street scammers felt happy to go along with the spammers.

Bill Fleck has this to say - even if I may take the liberty to only post snippets - as it's similar to what I've had to say - or what?:

"Versus Expectation' Equals Speculation Japan was again firmer overnight, as were our futures. Europe wasn't doing a whole heck of a lot. When the casino opened for business, it bolted out of the blocks, ran straight up into the Michigan Consumer Confidence data, which was slightly lower than expected at 90.7 versus expectations of 91 (obviously not a big difference), and then backed off. Next, with the release of the NAPM (now called ISM) survey results -- 54.7 vs. expectations of 51 -- a protracted explosion ensued, such that after the first couple of hours, the Nasdaq was up 2%, the Dow was up 1% and change, and the S&P was up about 1%. The mighty, mighty SOX was leading the charge, up 6%. (More about the Sox later.) The bank stock index was dogging it, up about 0.5%.

.. and more, though Fleck say's ... you can't go (be) too wrong acquiring some insurance (As some do it at Black Jack)
- OK - it's time to double up - your gold!

Oh, I daresay, considering the elevated price? (vs what, which and whom?) ... cb2

TrapperRobot Guy#7096703/01/02; 16:24:50

Your statement: If you lived in an arid land and my people were dying would't I just go to war for the other guys resources. NO WAY! Thats why God gave us a brain. In the old days that was the only option but today we have done something different...Advanced. The eco folks hate it but it keep us from having to kill our fellow man just to exist. The problem (or any problem) is no water in an arid land. We take the salt out of sea water, we drill wells, we change the genes of our corn so it will grow in arid soil. we build aquaducts, Hell we go find an iceberg and drag the damn thing home...what ever it takes. We own our pleasured existince to men of the mind. Our intellect will solve these problems. The only reason to use force is keep evil from using it. Live Small.
Sochain the advice offered to buy a revolver is good advice. The "pucker factor" will come into play if you ever have to use it. Buy a good double action Colt, S&W, Ruger or newer Tarus in .357 mag 0r .38 spl.

kludgeBlack Blade#7096803/01/02; 16:26:57

I stand (well, actually sit - it's been a long day) corrected, Sir. Perhaps I will watch again.
<Agent Smith sits casually across from Morpheus who is hunched over, his body leaking and twitching.>
I'd like to share a revelation that I've had during my time here. It came to me when I tried to classify your species. I've realized that you are not actually mammals.

<The life signs continue their chaotic patterns.>

Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment. But you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area.
<He leans forward.>
There is another organism on this planet that follows the same pattern. Do you know what it is? A virus.
<He smiles.>

Good weekend to all.

Black BladeCould The Coming Energy Crunch Stop Economic Recovery Cold?#7096903/01/02; 16:41:44

Today (3-1-02) the market indices soared higher on reports of a rise in mortgage applications and industrial metal prices, along with a fall in corporate bond yields, helped to push a weekly indicator of U.S. economic activity slightly higher last week, according to the Economic Cycle Research Institute. The talking heads, media pundits, and an assortment of Wall Street pimps now exclaim that the recession is over and the economy on its way to a roaring recovery. I believe that these claims are somewhat premature. However, if this is the case then what will derail this recovery? The answer could be inadequate supply of energy.

The US economy depends on energy and the demand for new power and gas is unbelievable. The US is an economic superpower. Without the US economy, the rest of the world's economies are toast. Like it or not, abundant "Cheap Energy" is the engine that drives the economy. There were even those who claimed that energy was not important anymore with the rise of the "New Economy". One such voice was the Fed Chairman Alan Greenspan. The truth is quite different.

Last year when energy prices soared due to failing infrastructure and inadequate supply, the US economy floundered and then collapsed into economic recession. Much of this was simple lack of planning and public opposition to expanding energy supply. California experienced a severe energy crisis with rolling blackouts. The energy grid is antiquated and in serious need of upgrade and repair. There are bottlenecks everywhere in the system. Some regions (such as California) impose onerous taxes on energy that are passed along to the consumer. Opposition (NIMBY) to construction of power plants, transmission grids, pipelines, exploration and production of hydrocarbons, coal, and uranium has only intensified the problem.

Let's assume that the economy is in recovery. Then demand for cheap abundant energy will soar to levels at or above those during the last "Energy Crisis". We have not worked to resolve the last "Energy Crisis". America has an insatiable need for energy. The inadequate supply of oil and natural gas will drive prices skyward.

The Energy Information Administration (EIA) projects that demand for energy will rise by at least 40% by 2020. I got news for you; we are now an information service economy. What that means is more energy consuming server farms will be built, an increase in Internet traffic, more powerful computers, more telecom use, etc. This does not even account for the increase in basic industry as the economy recovers. Everyone will want their "fair" share of "Cheap Energy". There simply is not enough energy to meet this booming demand. It will get much worse and we are due for a repeat of the "Energy Crisis" that flung the US economy into recession.

Third world nations in Asia such as China and in Europe, Africa and Latin America will demand ever more energy as well. This will draw off supply of hydrocarbons to those regions as well. Many new discoveries in these regions will find increasing domestic demand.

Planned new power plant construction had been proposed for over 300 plants. Those plans have been shelved with lower prices resulting from the recession and warmer winter weather. There is no incentive to build there power plants and improve the energy grid under the current low prices.

Natural gas production is falling again after a season of record drilling and production. Low Natural Gas prices have reduced incentive to keep producing. If the economy recovers there will not be enough production and supply, and therefore a repeat of the "Energy Crisis" is inevitable. Natural Gas supply will be very tight as power plants struggle to produce electricity.

The Middle East and the Caspian Region are wild cards. Anything can happen there. The US is a hostage to the whims of every piss ant dictator in a volatile region. Instability in the region will make "Energy Independence" the rallying cry and top priority for years to come. Otherwise we had better prepare for many more wars for oil and terrorist acts on US soil.

I think that with the current complacency of Americans as far as "Energy Independence" and rabid environmentalism is concerned, we will not likely emerge from this recession anytime soon. Not unless we see a real concerted effort to establish a secure and abundant supply of energy. I don't see that happening anytime soon.

- Black Blade

kludgeAhhh, a handgun discussion!#7097003/01/02; 16:43:26

Might I also suggest a revolver for the following reasons:
1) no spent brass to trip over in the night on a hard floor.
2) fire multiple times while concealed in a purse or pocket, no "stovepipes".
3) simpler, more moving parts = more things to fail.

What Sir Trapper said also, .38 or .357, preferably a .357 - can always fire .38's and the added weight of the weapon will lessen the perceived recoil. Only six shots, but rarely is it required to reload to protect your home/family (Randy and the Davidians excluded). Firearms can certainly be worth their weight in gold, given the proper circumstances!

Cavan Man@CB(too)#7097103/01/02; 16:47:08

The unfolding spectacle is quite a sight. No question; we are heading for a crack up.
CoBra(too)@ CM - Remember September ... #7097203/01/02; 17:31:55

We've got to make the "mostest"! in corralling up the horses (some fiends say sheeple)in the OK Corral!

So may it be - Al G. is the Genie - gee, I could'a have known, should'a have listened and converted some of my FRN's to reality!

Forgotten ... as it seems ... though the reality of AG's liquidity spas'm - has diverted black beans (A. Anderson among these) to green peas.

Wish the peas would hold some - substance, though at least they're physical.

How about that, Pal?

I know, go gold and not the sweet JPMC peas of derivative extasy ... had my beans in New Orleans ...


BTW- keep what you've got in EU - it's your due.

Black BladeMarket Wrap Up - Puplava#7097303/01/02; 17:49:23

The Missing Ingredient


There are, however, caveats to this scenario. The one missing ingredient in the upcoming recovery scenario is profits. Companies may be making sales but they are doing so at the expense of profits. Companies right now are operating under a brutal competitive environment so corporations don't have pricing power. At the same time raw materials and labor costs are rising, which means profit margins are shrinking. It's a terrible environment to be doing business with rising costs and the inability to raise prices. This is the reason for the wide variances you now see in market forecasts. The optimists see a recovery leading to higher profits. The analysts and economists fall into this camp. On the bear side are the companies, and they are the ones looking at their top and bottom lines and remain skeptical. Then there is the consumer who isn't sure which way things are going for the household. It has become necessary to supplement living needs with debt. The ratio of debt and mortgages to disposable income is now at 105 percent. This means consumers have to finance consumption through credit cards or installment debt just to get buy. The savings rate is negative so there isn't a spare cushion to whether a downturn. In the meantime daily headlines still point to further restructuring ahead with more companies downsizing. That will mean more layoffs ahead which has to impact consumer spending patterns.

This vicious cycle is what is throwing cold water on Wall Street's hot recovery scenario. Consumers are still willing to spend money, but they will only do so if there are strong incentive to do so. On the other hand, companies can still increase sales, but they have to sacrifice margins to make those sales with profit killers such as rebates, zero percent financing or steep discounts.

This analysis is absent in any of the recovery scenarios. From a macro economic perspective, corporate downsizing and consolidation has a negative effect on economic growth despite what it might do for profits in the short run. When a worker is layed-off, he is forced to retrench on his spending plans. The two main drives of economic growth are public consumption, and capital spending by businesses, which is the most important of the two. When businesses expand and invest in new property and equipment, this increases business receipts because the new plant and equipment immediately generate additional income. At the same time because of accrual accounting, the new investment in the plant and equipment is expensed over time. Without any meaningful increase in capital spending by business, this recovery will have no legs.

Black Blade: I agree. Good article as Usual.

Black BladeWeekly Update - Puplava#7097403/01/02; 17:59:11

Crisis Intervention


The only difference between today and the inflationary era of Arthur Burns, Chairman of the Fed Board of Governors 1970-78 and Volcker's predecessor, is that under Volcker and Greenspan, confidence was restored in paper. People began to put their faith in paper assets such as stocks, bonds, and money market instruments. Instead of buying things as they did in the 70's, people invested in paper. The government was very careful to keep faith in paper alive. It was possible because the price of gold, an important barometer of inflation, was kept suppressed. Gold became the nemesis of all central banks. If its price rose, it signaled something was wrong with the financial system. As a consequence, it became necessary to keep its priced suppressed. This was made possible by central bank gold sales, gold leasing and the gold carry trade. Through the use of physical gold sales and paper gold sales it became possible to keep a lid on gold prices. These action, combined with discrediting gold in academic and financial circles, made the whole scheme work.

Black Blade: Good article.

sectorThe Fed Equity Derivatives...Japanese Gold FOG#7097503/01/02; 20:21:15

The opinion from other wise ones is that this Feb 21, 2002 rule making, or interpretation by the Federal Reserve involves the implementation of the early structure of the CFTC Reform Act of 2000.

What the ultimate effect will be remains in the future. To me [Happy not to be a lawyer] it seems like the big banks want to spread around lots of stock derivatives, futures and options to help "stabilize" the markets.

It won't work… in so far as investors know when they are being shafted. They know when things are unstable and when the government is fudging the numbers to cover a mess of their own creation.

Moreover, the current rise to a six-month high in the DOW is a thin facade. It is better to be long gold than short the stock market. This, because the Fed can and will print an infinite number of dollars to perpetuate their reign.

However, the limiting factor in their scheme is they cannot print gold to continue selling against a rising flood of concerned buyers in Japan and elsewhere.

No matter how many bogus articles about gold are floated to steer folks away [like today's above link], they only draw more and more interest.

The above piece from Japan offers bogus savings numbers saying that only 1% of savings are at risk. By direct calculation from the Japanese population and savings data posted at the official government website, there is $600 Billion at risk, mostly in the hands of the group 60s and 70s and up. They each have $150,000 and $158,000 of NET savings and that means they have over half their life savings at risk...exclusive of real estate holdings. This piece is just another attempt to obfuscate the truth about the pending train wreck for the Japanese government...noted for its Olympian skills in denial.

As April 1, 2002 approaches more and more will check and learn the worst…they are vulnerable. Like US tax procrastinators they will move at the very last moment. God forbid there should be articles about Mrs. Watanabe losing half her life savings because "It wasn't insured". Only 1.7% of the funds at risk is equal to 1000 tonnes at $300 per ounce.

They will overwhelm the central banks…it won't even be a contest. Today it's a powder keg. The slightest tilt and Eddie George's "Abyss" happens.

It will do no good for the casual observer to wait until that day to buy gold…for once the tilt goes, there will BE no gold to acquire…anywhere…at any imaginable price. ALL the available exhaustible rersource will be consumed in the speculative an instant [Currency Crises experts such as Maury Obstfeld, UCLA have modelled this dynamic for decades]. Thereafter, the resource will trade at it equilibrium level. BTW the level reached after the last great gold correction [1971]?

It was ten times. However, there really wasn't a multiple bubble, runaway economy combined with plunging confidence in corporate transparency and a war to boost pog like there is today. Figure ten X is a minimum.

The ominous pattern this week of a rising gold price succeeding against all the concerted efforts of the Fed implies that forces equally as powerful want to buy all the gold the Fed has. After all, it only takes $9.6 Billion to buy 1000 tonnes…not too much for a determined hedge fund manager or three who KNOWS the Fed is up against a wall. There must be fifty ways for voracious Wall Street, financial predators to get in on the fun.

The real question is when will the Fed capitulate and save at least a few thousand tones to fight another day. From an analysis of the Chairman's past behavior, a pattern of denial upon denial evidenced in the latest FOMC minutes from 1996, he may drain the entire Treasury of every last bar and then shrug and try to retire. Picture Greenspan pulling a "Skilling"..."Things were FINE when I left", "The GDP was primo...wasn't it"?

Cooler heads will prevail and remove the good MoTU...but only AFTER he has completely lost control…when gold hits around $350 per ounce.

Then the new MoTU will be brought in to be sacrificed...Argentina style.

Cavan Man@sector#7097603/01/02; 20:41:13

But what could save the day; surely something or somebody? There must be a better contingency paln than treading water.

After watching this pot boil for three years I am having a hard time being convinced their game is almost played out because I thought so three years ago!

Rx Gold@ Black Blade and Mr Gresham //cheap energy at what cost?#7097703/01/02; 20:45:07

Snip<Kind of funny isn't it? The city dwellers flush there sewage into the worlds oceans, they dump their garbage out in the country, then they have the gall to deride those of us who explore for, develop, and provide the resources for them to live the comfortable lives that they now enjoy as earth rapers and defilers of the environment. I find that curious.>

Speaking of flushing Black Blade, I see that you have your hand on the handle. The farmers in Montana are just about to get your ‘flush’ of coal bed methane produced water. This water, that is produced, is very high in salt and is being discharged now into the rivers. It is projected that there will be thousands of these wells soon. The farmers down stream are being forced to use this water to irrigate their crops. Salt water has a limiting action for growing crops as well as a more extreme function of affecting the soil structure so that after a few years nothing will be able to be grown on this land. And I mean FOREVER.

I can certainly see how these gas men have the right to develop their gas wells, but I think that they should be made to do it in a manner that doesn't degrade the high quality of the water in the Tongue River. If the farms are forced to take this salt water they will soon become unable to make a living while the developers are making huge windfall profits on cheap gas production. You may not live the city but you nevertheless are flushing your sewage on the unfortunate folks that live downstream.

I invite you to take a trip down the Tongue River Valley and see the 100-year-old farms and ranches and beautiful treed bottoms with hay meadows. As the Tongue meets the Yellowstone River the farms are enjoying the long growing season, good soils, and high quality water to grow a variety of crops. At one time this area produced all the vegetables for this part of the country. When the full force of the salt water reaches this area it will be quite a different environment. So when you call the city dwellers "defilers of the environment" you might just take a closer look at what you are.

CanuckCan anyone confirm this?#7097803/01/02; 21:20:48

From another forum:

"Jeffrey Skilling just warned of an upcoming deriviatives implosion for the USA economy.

He is on Larry King Live right now."

Hope this is true!!


Rx Gold@ RobotGuy // Dream#7097903/01/02; 21:39:30

snip <My dream? To save enough money to buy the piece of land that will allow me to be 100% self supporting.>

You might want to take a good look upstream or all your hard work and saving may be for naught.

Galearis@Rx Gold re salt poison#7098003/01/02; 22:10:07

A thought occurred to me as I read your post.

John Kenneth Galbraithe I thought developed a pretty good argument relating growth in population densities as having a detrimental impact on democratic freedoms. To paraphrase it went something like this: the closer people get to one another and have to respect each others rights the more these rights have to be legislated for by government action to quell friction- which in turn tends to limit the freedoms of those it ostensibly is supposed to serve. As a structural political paradox it is hard to beat.

From these tensions come the "property rights" argument. So the miners have more or less the right to polute a farmer's land - until the farmers lobby hard enough to present their rights to farm to the governing body to mitigate the negative influence from the mining rights. Until this happens both have equal rights to do exactly as well as they can under the then existing rights of law. Exactly the same situation would surface under firmer "property rights" laws whereby the landowner, if he chose, could cause untold damage to his neighbours until the injured parties got enough support from state or federal government to force respect. Again a problem of crowding when to solve one problem the solution is damaging to the other. And one wonders why there is corruption? Crowding of many economic activities inevitably results in winners and losers and "I was here first!" is seldom a sufficient argument.

For every gain there is a loss, for every loss there is a gain.



GoldflyCanuck - from the Larry King transcript.......#7098103/01/02; 22:22:24

KING: Was this, then, preventable?

SKILLING: I think Enron, when it all -- when it all is said and done, might turn out to be a little bit of the canary in the coal mine. That I think there are some structural things in the economy right now that -- unfortunately, a lot things happened altogether. The old, sort of, what they call the storm -- the perfect storm kind of analogy that a lot of things happened suddenly and once that -- once that domino starts falling, it's pretty darn hard to stop it.

Black BladeRx Gold - CBM Discharge#7098203/01/02; 22:36:26

As far as I know there is one producer - (Northern Energy) that is involved in the Tongue River discharge controversy. For the most part these CBM producers discharge into "holding ponds". I think that your argument has to be with the Californians who demand this "Cheap Energy", much as the Colombia bears the brunt of US action against growers of coca, it is the addict in the US that demands the product. The question is who is more culpable?

Aside from that I am not aware of the farmers and rancher involved. Those that I know are very happy with CBM as they have profited handsomely and it has saved their land from bank confiscation. Many a rancher that I have talked to is quite happy with CBM exploration and production. Many were worried that they would have to sell the family farm to take care of their families. Not every area is subject to alkali soil leaching (as you refer to salt).

As I have said, if you steal lands from the native Indian peoples (in this case the Shoshone, Blackfoot, and Cheyenne), then the minimum you could do is to steal the mineral rights as well. Cheers!

- Black Blade

WaveriderWorried Japanese go shopping for gold off the shelf#7098303/01/02; 22:48:40;$sessionid$KZFRXMIAAAXOTQFIQMGCFFWAVCBQUIV0?xml=/news/2002/03/02/world02.xml&sSheet=/news/2002/03/02/ixworld.html

"AFTER a decade in which stocks have slumped by 70 per cent, with property values halved and interest rates close to zero, the mood in Tokyo's financial district is almost universally gloomy. But in recent months, retailers of gold have been enjoying a boom in sales.

Japanese are turning to the precious metal, typically bought during times of war and crisis, as a safe haven. It is prized because it can be carried and stored easily and because it endures while currencies and economies collapse.

Waverider: There's really nothing new in this article that hasn't already been discussed here - but it's great to see Gold acknowledged as the ultimate safe haven by the mainstream media...word is getting out... Cheers!

Rx Gold@Galearis/ crowding#7098403/01/02; 23:01:04

A very interesting observation from one standing back and viewing the entire scene.

We have a saying in the west "water flows uphill, towards money".

The four Billion $$ expected to be produced from the gas wells is no match for over 100 years of history or present low farm income. Who cares if the farms will not be able to produce food in the future? We all buy our food from the store anyway. Maybe we can just import it cheaper anyway.

Thanks for the thought provoking post.

Rx Gold

Rx Gold@ Black Blade#7098503/01/02; 23:40:34

Fidelity and Redstone are the producers that are at this time dumping in the river. They do have some containment ponds for their discharge. These ponds are unlined and sit in the drainages. Water infiltrates to the ground from these ponds, which later ends up in the river. Some of the discharges are piped directly into the river.

The happy ranches you refer to are the ones that are lucky enough to own the mineral rights under their land. The ranchers that aren't so happy are the ones that have BLM administered lands and state lands on their ranch. On these ranches the gas boys just roll in and tear up the range putting in roads, waste water ponds, pipe lines, well sites, electric lines and noisy compressor stations ALL over their ranch. The Government leased these lands out from under the ranchers for around $3 acre without giving them even notice that they were going to do it. When they pump these large quantities of water it depletes the aquifer and the neighboring ranches suffer from lack of water for their stock. The neighbor might not want to ruin his ranch, but if he doesn't, the neighbor just sucks the gas out from under him.

There are two different aspects to this operation: ranch destruction in the area of production and farm destruction down stream. Both of these problems can be remedied by responsible production. If they want to produce the gas they should be make to either re-inject the water or treat it with RO (reverse osmosis). The gas boys don't want to do this, as it will cost them $$$. Much cheaper to dump it in the river. Some of these wells produce over $8000 of gas per day. If they weren't so greedy they could spend a few bucks and we could all live happily ever after with the lights on and food on the table.

I am not talking ‘alkali soil leaching’ when I talk of salt water. I'm talking about high SAR (sodium absorption Ratio) and EC (electro conductivity) and TDS (total dissolved solids). These are the measure of salts in the water. Over 60% of the soils in the Tongue River Valley are very susceptible to even low levels of salt. The salt combines with the clay particles and makes the ground impervious to water. There can be no leaching, as the soils can't move water through them any more. They become ‘Dead’.

Rx Gold

WaveriderBlack Blade#7098603/01/02; 23:54:11

"Ecuador's President Gustavo Noboa says he will use his remaining months in office to push through reforms deemed essential if the Andean nation's dollarised economy is to prosper. Mr Noboa denied that Ecuador's economy risked going the way of Argentina. "We've been getting back on our feet for the last two years and I'm optimistic about the future," said the president."

Waverider: Esto es verdad? Planeo para ir a Ecuador este invierno para que el art'culo agarr-- mi atenci--n. Los pensamientos? BTW para preparar, estudio el espa--ol y busco a gente para conversar. Si usted apreciar'a conversar acerca de oro, la econom'a, la pesca, el precio de arroz, mi direcci--n es mi nombre en Yo pienso divertido pero mi espa--ol es muy malo! Si no, entonces usted me ha salvado el trabajo de traducir! Gracias y las vivas!

Black BladeRx Gold - Coal Bed Methane#709873/2/02; 00:27:06

I wouldn't know about Redstone Gas Partners or Fidelity Exploration's operations, as I don't do business with them. I have minimal contact with JM Huber though. Most of my business is with companies out of Gillette. There are regulations as to the amount of discharge into the Tongue River and much of that is related to the amount of run off water flow. As you know there has been a drought the last two years here. Therefore the runoff levels have been very low. There may be recourse if these regulations are being ignored and the proper channels are through the regulating agencies and perhaps the courts. I seriously doubt that the revenue that you cite for Redstone is reflective of reality though, especially in view of the current low NG prices and the onerous pipeline fees involved. Besides, I am quite familiar with the geology and the questionable quality of the coals involved in this area.

As I have said - if one steals land from the original owners to farm and ranch, then there is no right to complain as I see it (after all I'm part Oglala Lakota Sioux - supposedly of the Tapisleca band). Life is not fair, nor is it supposed to be perhasps). It would appear that your argument is with the US Government and the energy addicts in California who demand that the methane be produced. There is certainly something to be said about owning the mineral rights. Like a bumper sticker I once saw - "The meek shall inherit the Earth, but not the mineral rights". Cheers!

- Black Blade

Black Blade¡Ola Waverider!#709883/2/02; 00:46:17

La manera mejor de aprender el idioma espa--ol es al imerse a s' mismo en el idioma y cultura. Yo nunca fui a la escuela para aprender el idioma. Yo aprend' de mi amigos de ni--ez y sus familias. Mis amigos eran Mexicanos y Cubanos. Yo tengo unos amingos de Espa--a y Basque amigos del region in el Norte cerca San Fermin (qué es un lengua muy diferente de castellano). Un colega académico m'o fue a ense--ar geolog'a en Chile. Él vivi-- primero en Chile durante tres meses que aprenden el lengua primero. Afortunadamente espa--ol es un idioma bastante fácil para aprender. ¡Suerte buena!

- Black Blade

BTW, my plate is full.

GoldnSilver2002Last boe auction,the well run dryeth...#7098903/02/02; 02:10:23

I must say i'm impressed in golds climb despite the dow up and the upcoming Bank of england auction on tuesday.One must wonder which bank will want to unload now?March could be a very bloody month for those in the gold derivatives such as JPM chase.Japans govt insurance on bank deposits over $75,000 comes off april 1st and the chinese say they will open their gold exchange in the first quarter.

Have you noticed the sudden rash of mergers in goldmines lately?They dont want to admit,they know gold is set to explode.But if they say so they will have to pay more for the smaller gold companies they are buying up.We saw gold jump up $25 in one week recently,and i believe March will be the month gold starts to shine.Those Japanese are shrewd and they have a lot of savings to go up in smoke.Once JPM gets in trouble,another of golds major foes will stumble.Bundesbank,another major player'showed its hand by bluffing a sale it cant do until 2004 under the washington agreement.

A good test will be how POG reacts to the last BOE auction,if it quickly rises through $300 afterwards it means the price only dropped so someone could buy more at a cheap price,once again fleecing Boe.

Christianboe auction#7099003/02/02; 05:59:20

The so called last boe auction is not the last auction. There will be a new anouncement soon. On this so called last auction, like all other auctions, no physical gold is (was) sold. It is simply an exchange of gold sold forward. The Bank of England and Greenspan are pulling a Skilling. Greenspan wants to drain the entire Treasury of every last bar of gold and place it into private hands. This is also true with the gold that so to speak belongs to the people of England. Same is happening to most other countries around the world. The Fed can and will print an indefinite number of dollars to support the stock market. Presently the Fed is the biggest buyer of stocks. It already owns the GSE's and in most part the bond market. The Fed is presently monetizing Japan's holdings of Treasury's. The only limiting factor of Greenspan's scheme is he cannot print gold. Hedge funds are buying physical gold to use as credit creation just like central banks use gold for. Soros, Gates, Buffet (sp) are all doing the same thing. Right now it is better to be long gold then to short the stock market. But this only works if corporations can put all this new money to productive use. Right now that is not happening. Our national on the books national debt and off book gold short positions are increasing at the fastest rate ever recorded in history. Real productivity is going down under the stress of too much debt. This military spending to commit destruction is not positive productivity. Nothing real is constructed that will help improve the living conditions of most people. Politicians like many trees in our dying forests have the same problem. They are crooket, not straight, have a crook, dishonest. --Greenspan at a BIS meeting said " "my dog can lick anyone.
nickel62GoldnSilver 2002#7099103/02/02; 08:26:29

Has there been a rash of mergers in the juniors that you are aware of? Or are you referring to the Newmont-FN-Normandy type of thing? I would be interested in any low profile mergers in gold mining companies. There are substantial numbers of old mines out there that if merged into one company might make a decent investment for a rising market. Dayton Mining, Aetna-Expatriate with the Wolverine mine, Freeport McMoran Copper and Gold and anybody who could ensure that the chance of confiscation by the Indonesian government was lower or a host of other properties which have languished with the decline of the last six years.
Siochain@Christian#7099303/02/02; 08:45:45

Well spoken....and let us not forget the drum beat for privatization of social security. This is but another ploy to get dollars into the stock market.

The stock market MUST be kept up no matter who gets hurt. Should confidence in the SM fall, there will be a rapid flight of investment out of US...and concurrently out of dollars. This, of course, can be brought about by other things re Japan...oil/Euro but I believe that as long as the Market can be held together with stirng and chewing gum and whatever else can be found....the game will continue.

This is a race against time...companies do not appear to be recovering, Yes, there may be some blips for inventory replacement in the near future...but the only thing holding us up is the consumer...question is...when will American consumers fully awaken to the shell and shill game?...and most of all, the loss of many priciples upon which The US was founded.

"The money powers prey upon the nation in times of peace and conspire against it in times of
adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than
bureaucracy. It denounces as public enemies, all who question it's methods or throw light upon it's
crimes. I have two great enemies, the Southern Army in front of me and the Bankers in the rear. Of
the two, the one at my rear is my greatest foe..corporations have been enthroned and an era of
corruption in high places will follow, and the money powers of the country will endeavor to prolong
it's reign by working upon the prejudices of the people until the wealth is aggregated in the hands of
a few, and the Republic is destroyed. --Abraham Lincoln

Rx Gold@ Black Blade#7099403/02/02; 08:53:17

Dear Sir
Rx Gold@Black Blade #7099503/02/02; 09:00:08

I see that you have changed your position from 'Holier than thou' to 'So, sue me'. As you know, there are lawsuits in place now and others that are in the works. All this does is make the shark profession richer (I have two in the family).

Rx Gold

nickel62Skillings Testimony #7099603/02/02; 09:20:16

I find that I just can not listen to so much bs in one sitting anymore. I tried to watch Larry King playing softball with Skilling and his lawyer last night and had to turn the channel. I tried to read the transcripts posted here this morning and couldn't make it more then half way through. How long is the US public going to believe this crap? I was the CEO and oh by the way creator of and sole employee of this thing called "the Enron wholesale merchant business" appropriately named Enron Financial. And Skilling expects the public to believe that while he was promoted to CEO in his early forties his ten years with the firm never allowed him to in anyway have any knowledge or involvement with the financial rigging that brought the firm down. My God man, do you think the entire world is as stupid as your regulators? This apotheosis of "Clinton speak" makes me even more sick than Hillary and Bill used to. Where are the questions about why since nobody seems to have a clue what happened at Enron, how about the simple obstruction of justice by the shredding of all the records that would have made liars out of these crooks. How about the "suicide" of the main potential witness? What has America come to?
nickel62The real meaning of Skilling's testimony!#7099703/02/02; 09:46:32

What Skilling said:SKILLING: Yes, Enron was a result of the merger in the middle 1980's of two pipeline companies. As the markets began to go through deregulation in the last 80's, that business became very tough. And in the late 80's, a decision was made to really kick off two new businesses: a wholesale merchant business, which was really to start participating in the new deregulated markets for natural gas, and an international development business that was building power plants and pipelines around the world. I was really brought in to start and manage that merchant -- wholesale merchant business.

What he meant: This was a simple bunch of boring businesses and I came in and got Wall Street involved in creating a supposed "energy trading business" that was built on slight of hand using accounting loopholes. We then started using the fabricated revenue growth to suck in unwitting investors who thought we actually were making money. I sold a lot of stock at the top but not all so that I could claim I was a victim if it all came tumbling down. Don't worry though I hid enough of the money from my stock sales that I will be fine no matter what happens. Why does my mother come out in public and call me a liar? I don't know she must have facts I don't chose to admit.

Mr GreshamRx Gold#7099803/02/02; 09:46:51

There's a point, perhaps more obvious to the outside reader than to the writer, where it turns from the topic to the personal. We've mostly done a good job of avoiding that here. I want to continue to value your contributions, as it seems you have been on some good topics lately.
admintedw - - - - - Forum Advertising Fair Warning#7099903/02/02; 10:24:01

As part of our rules, we do not allow advertisements, but we are not shy about billing those who "forget" the rules from time to time and inadvertently post a url to one of the mining companies, a competitor, etc. The fee per advertising post is $2500. You will be receiving a bill via the US Postal Service and by e-mail. Your prompt payment will be appreciated. Thank you for supporting the USAGOLD Discussion Forum.
Rx Gold@Mr Gresham#7100003/02/02; 11:46:45

An excellent point Sir. I have been out working and chewing on my response. I do realize that I made a mistake and although I can never take it back I can hope for forgiveness from the forum. I will certainly try to maintain in the future.

For those interested in the situation that we are discussing they may go to the above link to learn more.

Rx Gold

Rx Gold@ All#7100103/02/02; 12:15:30

Snip of link.

"At current market prices for methane, all 4 treatment or disposal options may be economically feasible." It seems clear that the industry can easily afford to treat and dispose of the produced water in an environmentally responsible fashion. And finally, on this subject of economics, complying with both state and federal laws and regulations is a cost of doing business and if some in this industry have failed to factor that cost into their business plan it is not the regulators nor the public's responsibility to bail them out or cut them a break.

We have the tools and the ability to solve these problems before they occur, we need the leadership, vision and cooperation to get it done. I hope we do not look back on this development at a series of environmental disasters that becomes the textbook example of what could have, or should have been done. We owe it to ourselves and to the generations that will follow to do it right the first time, to take the preventative measures that will protect our water quality and the environment and still allow the development to proceed and prosper

darkhorsePardon me if I'm mistaken...#7100303/02/02; 12:25:43

but I thought this forum was to center on gold, the economy and stuff like geo-politics and the influences it has on the former. I agree that oil/NG and energy in general has a big impact on our subject here, but it seems to me that some of the posts have turned more towards personal agendas than anything to do with our normal discussions. Anybody else notice this, or am I mistaken?
Cavan Mannickel62#7100403/02/02; 12:32:05

"What has america come to?"

My friend, we've come to the end of the "america" which, in my not so humble opinion is more than a place; more than just a piece of planet earth's real estate. America is at once a concept, a dream, and ideal, an experiment. Today, she is but a cipher of her former self. The future of this country is very clouded. I admit to loving this country dearly but, I doubt my children will be raised here.

May God have mercy upon us because no one else will.

Mr GreshamRx Gold#7100503/02/02; 12:32:14

Thanks for a reasoned response. I feel passionately about these things, too, when the information has gotten through my thick cranium. I'm about overdue to grab up my lance and ride off on my charger to make one of these causes my life (or next decade) legacy work. (Kinda boxed in at the moment, though.)

I'd just like it to be with someone like BB, who sounds like he's been around a few skirmishes, or you maybe, in my company. With that blood, I know that when he looks across at the other side, and tells me "Today is a good day to die. Bring it on, m***********s." we're gonna count some coup.

You never know what activities a good board could morph into or spin off. Good minds meeting at their best, weeding out the propaganda on all sides -- anything could happen.

BoilermakerWaste disposal#7100603/02/02; 14:36:45

Disposal of my (Ohio) oil well brine (production water) must be done by a licensed hauler who takes it to a disposal well for reinjection. In the good old days each well including mine had a "soup" hole next to it for surface brine disposal. Stricter disposal rules were established because sometimes brine was discharged directly into streams causing fishkill and downstream quality problems. It costs me about $2.00/bbl to dispose of production water and since my well is 50/50 oil/water I pay $2.00/bbl for water disposal for each bbl oil produced. Also in my production costs are the $3.00/ bbl oil discount that my oil purchaser pays me to pick up crude from my on-site tank battery, ie., if I were to call in a pickup today I would get $19/bbl instead of the terminal price of $22/bbl.

It's just a matter of economics whether the enviornmentally friendly disposal costs can be justified. Even as a producer I would much prefer to have the appropriate disposal regs established and then let the market price for the product determine if it's feasible to drill and produce.
The real problem occurs when the investment in production is started under the more lenient rules and then is changed so that the original investment would not have been justified.

This subject is appropriate for this forum because the same disposal/reclamation issues are faced in the mining and separation of gold. In fact one of my gold mining investments is currently prevented from mining their deposit due to a Montana ban on the the most efficient technology that is used by others with great sucess.

RobotGuy@Darkhorse re:Personal agendas#7100703/02/02; 15:11:39

I am responsible for some of these posts. I know what you're talking about, and I don't think it's a terrible thing. We're all sensible people, and I think some of us develop a closeness in this forum, and perceive others as our friends. Sometimes individuals share personal goals and desires with their friends in hopes for some sort of feedback, it's human nature. I do try to make an effort to keep my posts gold/market/political related, but sometimes I will veer slightly from those topics.
BoilermakerGE's Agenda#7100803/02/02; 15:25:27

Check out GE's latest ad strategy, real vs. paper.


"GE is touting its industrial and technological might, something that was considered passe by many during the go-go 1990s, says Jack Trout, a marketing strategist at the helm of Trout & Partners Ltd.

``This is the return of the big-time industrialist making stuff, selling stuff -- real stuff,'' he said.

Largely absent from the new ads are references to the company's financial services arm, GE Capital, which contributed a whopping 40 percent of GE's $13.7 billion in earnings last year."

``People understand microwave ovens and sonograms as somehow being useful. (Lending) is not typically the type of thing you associate with corporate munificence,'' said Bob Garfield, television commercial critic for Advertising Age magazine, and co-host of National Public Radio's 'On the Media.' ``Jesus didn't clear the temple of the toaster users, he cleared it of the money lenders.''

This smells like a smokescreen for a shaky credit business. Maybe not, but if they were serious they would put the accounting cards on the table and reveal details about what's in their finance business "assets" and the performance of these assets.

Black BladeRx Gold - CBM Data and Water Remediation Costs#7100903/02/02; 15:26:05


I understand that many coalbed methane producers had figured they could profit in the Powder River Basin at a price of gas from $.80 Mcf to $1.60 Mcf, the going rate today on the market has held steady for the past several months at over $5.00 an Mcf and is trading on the futures market today at over $8.00Mcf. The projections are that gas will hold steady at $5.00 over the next two years. Furthermore, the DEQ has also determined in a review based on industry's own economic analysis of water treatment and reinjection options that at a market price of $4.00/Mcf, "…implementation of the most expensive option (ion exchange at $1.42 Mcf) may a yield a net profit of $1.43 Mcf and could provide a sufficient rate of return to support full development of the resource.

Black Blade: Funny, I would like to know the source of this data. If you provide it please direct me to the source. Currently NG spot is $2.36 Mcf (variable depending on which hub - see URL). The futures prices are nowhere near those quoted in the article. Also that does not even factor in service and pipeline fees. Perhaps you could provide me production costs for the various producers as well. I do agree that there should be no breaks to any business, including the government subsidies for all users of the land, including the miners, gentlemen ranchers and farmers. It should be a pure free market play.

BTW, 23 N. Scott St. - isn't that the Sierra Club office near the intersection of Main and Coffeen? And aren't both these organizations affiliated. Hmmm…

Interstate@Cavan Man#7101003/02/02; 15:58:31

You hit upon a theme that I seem to hear more and more, and a possibility that I'd like to explore. "We are an EXPERIMENT". Several years ago I read a book (sci-fi) about another planet's inhabitants coming to this planet (earth) for the sole purpose of mining gold and returning it to their planet. However, the mining was very hard physical labor, so they created an experiment (us, humans) to be their slave labor. That was just the first few pages, then it went on to give the history of man and gold down through the ages and their relationship. but after many years, the eathlings learned the many uses and value of gold and decided they wanted to keep it from their masters, and the story goes on.

But it made an impression on me - one more possibility of our existence with our love of gold.
Thank you for reviving that thought. Later,Interstate

Rx GoldBlack Blade and Silver as $$ Money $$#7101103/02/02; 16:10:38

I am not sure of the info on the website that I linked to. You might contact them about that. I got the figure of $8000 per day from one well at a meeting that was put on by the Coal Bed Natural Gas group in Miles City last summer. They had a BIG dog and pony show with a great bar-b-q for the town folks. I was amazed at some of the information that they presented, such as a photo of the water coming out of a pipe directly into the river. The had provided some rocks to help prevent erosion, which was why they had the slide.

To get back to the 'real' buisness of the forum....

I was working in the mining camp of Silver Peak, Nevada while the silver boom was on early 80's. The mine in production at the time was the Sixteen to one and it was run by Sunshine Mining Co. The miners were contract miners and were well paid. They spent most of it at the three bars in town. I remember well the silver rounds that were freely bartered across the bar. At that time silver was fetching around $14-18 per oz. Sunshine miners could buy the silver directly from the mine in one oz rounds that were numbered. One round was worth $20 on the bar as they were hard to come by. Local folks bought them like candy from the bar keep. More on this latter.....

Anybody out there have stories of gold/silver being used as 'real money'?

Rx Gold

slingshotPiddily Report.#7101203/02/02; 16:18:45

Someones Buying, MORE!

Went to the coin dealer to pick up the usual. All the one oz. eagles were gone . He had one Krugerand so I pinched that and frowned at the tax I had to pay on it.But things have a way of turning for the best. After paying for the Krug, he mention he just recieved some silver. In his display was about 10/10 ozs. a 100 oz bar and plenty of 1oz. rounds. I asked him if business was good and he said yes.
I asked him did he have a lot of sellers when gold hit $300.00 and his reply was NO. In fact only ONE! In our conversation on Gold he mentioned that not only was there an increase in small purchases but large purchases of gold is on the rise. One took a month to fill.This news is good of course but, what he told me next made me pay closer attention. He said he had a family member working for a credit card company and the accounts he manages are those who are behind on the average of $35,000 for 90 days. His department is a large section and they have two shifts working. That is in my neck of the woods. I am beginning to wonder if the average household credit card debt is really only $8,000.

Soon we have the BoE auction . Followed by Japans cut in bank insurance for deposits April 1, 2002. Two major actions which should affect the price of Gold. BoE selling and Japan buying and Gold sitting just below the $300.00 level. And a mountain of debt that has not fully shown its face.

To borrow a line from one of our Presidents, "We have nothing to fear, But fear itself"

Piddily Report; All the News so Piddily, Others do not print it.


Gandalf the WhiteSORRY, Sir Slingshot !#7101303/02/02; 16:41:15

slingshot (03/02/02; 16:18:45MT - msg#: 71012)
Piddily Report.
Someones Buying, MORE!
Went to the coin dealer to pick up the usual. All the one oz. eagles were gone !
The Hobbits just had a payday and soooo --

slingshotGandalf the White#7101403/02/02; 16:46:17

All Gone

Got to love those Hobbits.


nickel62Bob Chapman sums it up as usual...#7101503/02/02; 17:36:39

Bob Chapman has excerpts from
The Toulouse-Lautrec Table

"If you think Congress is going to come up with
derivative regulations, think again. Most all of them
are paid off. They passed legislation over a year ago
allowing Enron type contracts to be done with absolutely
no oversight. Don't you get it, Congress has been
purchased. They don't represent you or us, they represent
the elitists. Derivative contracts have totally
undermined our financial system. Enron was unregulated,
as is GE Capital, because they are not a bank or
securities firm. Who advised congress to not regulate derivatives? Alan
Greenspan, Larry Summers, Arthur
Levitt and Robert Rubin, who else? The problem is the
Congress, business, government, academia, big labor
and politicians are all in bed with the elitists and
we get screwed."

Cavan ManInterstate#7101603/02/02; 17:50:47

That wasn't the type of experiment I was thinking of.
R PowellRx Gold#7101703/02/02; 19:23:49

You asked, "Anybody out there have stories of gold/silver being used as "real money"."
The link goes to Adam Hamilton's weekly offering explaining digital gold as money. Apparently it is being done.

Rx GoldR Powell #7101803/02/02; 20:16:03

It seems a little risky to me. Have you tried it?

I like the clunk fine silver makes on the bar. When you slap an oz on the bar everyone turns to look. Somehow it just doesn't feel the same with plastic.

Rx Gold

sector@CavenMan About the Timing Thing...It Could go on for allot longer...but then...#7101903/02/02; 21:54:43

What's different this time compared to the last three years is the Japanese cap on savings and its obvious relationship to a "bank bailout", allot less US reserves as a result of the WA, big hedge fund buyers and not the least GATA.

Strange as it seems GATA is the brightest illuminant and has dredged up all the pertinent facts to expose the operations of the anti-gold cabal. Each day brings more, although at this stage we certainly aren't releasing all we have. The old guard gold "analysts" have been conspicuously absent from this important battle.

Many intelligent people across the globe have been convinced by GATA and are acting on their convictions. But the biggest charge of explosive [Now with a lit fuse] is found in the exposed savings accounts of the elderly Japanese.

The government there is just plain corrupt and moms and pops know it and are in a bind as April 1, 2002 approaches. If the yen falls, even a little, a trigger mechanism is tripped. If a big insurance company fails, a trigger mechanism will be tripped since it would drag banks with it. If more banks fail after the deposit insurance deadline [two more little ones this week], even more problems happen since word of uninsured losses will travel like wildfire.

It all is at the point of maximum disequilibria moving to "D" Day in April.

The Japanese not going to act? Tell that to people who lived through WWII, total economic deprivation, and loss of confidence in government and now see half their life savings put at risk by a politician they elected to fix the LDP mess.

A 1.7% savings switch draws 1000 tonnes off the world market; a 17% switch draws 10,000 tonnes. The other Asian nations [With Shanghai's Gold Market Up and Running] are poised to join the fray. New York's COMEX has already been eclipsed by the TOCOM.

It's different this time…even without the aggressive hedge funds buying in NY.

Interstate@Cavan Man#7102003/02/02; 22:11:52

Okay. But I still thank you for reviving MY thought of another possibility for our love of gold.

However, I DO understand the type of experiment you were speaking of and we might be. Later, Interstate

tedwtest#7102103/02/02; 23:12:24

Old YellerContrary Investor#7102203/03/02; 00:17:29

Tackles a subject close to our hearts;foreign capital flows into the US,replete with the usual ominous charts.These numbers are truly astounding,coupled with declining world trade,the days of the gravity defying dollar may soon be waning.

Incredible flows into the corporate bond market,companies have been piling on the debt to retire stock,among other more noble pursuits.Which,of course,is great for options holders but not so great for a company's long term health.

Debt/equity chart is scary,declining profitability and rising rates bodes ill for the new bubble the financial wizards are desperately trying to inflate.

Black BladeTurmoil In India Could Push Gold Higher#7102303/03/02; 03:10:30


-- Concerns about escalating violence in India may have aided gold rally to $300

-- Narrowing silver spreads on Comex similar to tightening lease rates

"You have escalating reprisals within (India). You've got 150,000 million Muslims, 840,000 million Hindus. It's a tinder box," McGhee explained. "If you get domestic violence in India, it will spread to violence between India and Pakistan. Those are two nuke powers facing each other right now."

Black Blade: Hindus and Muslims are escalating the killing this weekend. The situation looks a lot less stable.

kludgeWorried Japanese go shopping for gold...#7102403/03/02; 06:15:10

Shops in Tokyo's financial district are reporting gold sales of more than double last year's. Largely because of demand from Japanese, the price of gold rose above $300 an ounce last month for the first time in two years.

At the Gold Shop, close to Tokyo's main railway station, customers can walk in and buy gold bars or, if they prefer, golden statues of Japanese deities. Displays praise the virtues of the metal and its long history.

The atmosphere is one of discretion. None of the customers wants to talk, and staff advise them in private booths, although discussions can be overheard. From one cubicle a man's voice mentions the sum of five million yen, about £25,000.

kludge: If this keeps up we'll never get back to < $300 an oz delivered.

Cavan Man@sector#7102503/03/02; 07:05:59

RE: Japan's timely affinity for AU

I once asked Reg Howe in an email how the grip of the paper market could be loosed to set the true and clearing price of the metal in positive motion. The great man (what is it about Massachusetts?) replied; only "massive buying" could do it. A favorite essayist here once remarked; "the (paper) market will fail going straight up or, straight down but fail it will".

No need here to debate the "straight down" dynamic but with Japan in position as they are, I do see how the market could fail soon and in an upward thrust of significant magnitude. Funny how only 1.7% of liquid assets could be categorized as "massive" in this context.

Gold should always have been allowed to find price point equilibrium in sovereign and global monetary affairs. It should not have been painted into a corner where it necessarily competes with fiat currencies. Our handlers once made and continue to make strategic and tactical errors.

Thanks for your comments.

mikalRevealing article too scary to stay up on Reuters for long#7102603/03/02; 08:22:51

Reuters article still up overseas:
CEOs shrug off upturn signs
REUTERS[ SUNDAY, MARCH 03, 20021:00:12 AM ]
BOCA RATON, Florida: Wrapping up three days of splendid seclusion, CEOs of many of America's biggest corporations still need convincing that the US economy is firmly on the mend.
"We're all in a quandary. The economists are telling us there is more strength that we feel," CEO Glen Hiner of building materials group Owens Corning said in an interview on Friday. "We'd love to believe what the economists are saying."
Federal Reserve chairman Alan Greenspan, as well as much of Wall Street's corps of economists, say the US economy is either over or very nearly over the year-old recession that has brought layoffs, plant closings and other corporate cutbacks.
Recent statistical evidence, such as a sharp increase in estimates of late 2001 GDP growth and a December jump in construction spending, bolster optimism about the economy returning to expansion.
But the CEOs, meeting privately amid the palms and golf courses of the Boca Raton Resort & Club, sho wed little enthusiasm for stepping-up hiring and investment spending any time soon, according to participants.
New spending on equipment, plants, advertising and research by businesses will largely determine the vigour of any economic recovery, according to Fed officials. Greenspan and many others predict a slow, extended pickup in business activity.
"I think they're all very cautious," Scott McNealy, CEO network computer-maker of Sun Microsystems Inc, said during a break from briefings by Harvard University's president, the US commerce secretary and others.
"I don't see anybody who's running around, going `Whee!´ That was there a few years ago, but it´s not there now," he said.
David Komansky, CEO of broker age Merrill Lynch and Co Inc, also reported that his peers at this year's Boca Raton meeting were wary of jumping too soon on business initia tives.
"I think most people agree that the economy statistically is well off the bottom, but yet most are still staying with a wait-and-see kind of attitude," he said. "They're kind of reluctant to make any significant kind of commitments yet and I think there, too, it's a question of them gaining confidence going forward."
John Snow, CEO of CSX Corp, the eastern railroad and transport group, said the meals and briefings on the world's changing workforce and education yielded no sign of en during boardroom pessimism.
"I think people generally feel the worst is over in this recession," he said.
Many CEOs interviewed outside the private events organised by The Business Council, an elite grouping of current and retired CEOs, said the US recession was just another turn in the economic cycle and a chance for big companies to ready for the eventual improvement.
"I don't find any air of discouragement," David Goode, CEO of railroad Norfolk Southern Corp, said. "People are planning carefully for the uptick in the economy. People are making sure their businesses are working well."
The short-term caution among the company leaders was also evident in a survey by The Business Council of 75 sitting CEOs released on Wednesday, showing three-quarters believed the economy was still in recession.
But 77 percent saw the downturn ending this year and about half predicted the recession would be over by June 30.
The US was, "not quite out of the recession yet, but there are some encouraging signs when you look at the fourth quarter figures, particularly sales figures, and the tremendous decrease in inventories that we saw," said Sidney Taurel, CEO of drug maker Eli Lilly and Co.
"Grasping at straws"? Some of these CEO's obviously are, others play dumb.

Mr GreshamCrosscurrents: Pictures of a Stock Market Mania#7102703/03/02; 11:34:25

This guy wallops a few out that you might not see elsewhere.
Mr GreshamContrary Investor#7102803/03/02; 11:36:36

And this one builds the continuing bear case with well-chosen charts, words, and humor...
slingshotAre things heating up?#7102903/03/02; 11:41:12

Nah! Just some precautions.

In the news today we read the U.S. Government is implementing a shadow government in case of a nuclear attack.
Also in the news. The govenment has increased the amount of sensors to detect radioative material around Washington D.C.

Their getting their Ducks in a Row and covering all the Bases.

Gold just Skooting along under the $300.00 level


mikalFDR, Gold, and Depression #7103003/03/02; 11:58:08

Echoes of ongoing presidential plutocracy: default, desperation, and currency devaluation!
FDR - The Thief Of America's Gold
By Patrick Chkoreff
As Franklin D. Roosevelt was inaugurated as president on March 4, 1933, Americans were in a state of panic. Banks were failing every day, and people clamoured by the thousands to withdraw their money. Ordinarily they might have accepted paper money in the form of gold certificates, but people feared that the government might simply resort to printing worthless money to meet the massive withdrawal requests. They didn't want paper. They wanted gold. Furthermore, people who had gold certificates rushed to redeem them for real gold....

Now the only people with a claim to gold in the Treasury were foreigners holding dollars. Since he was on such a roll, Roosevelt decided to rip them off too. On January 31, 1934, Roosevelt issued another Executive Order. Here he declared that the dollar was now only 59.06% of its former gold quantum of 23.22 grains. Now the dollar was only worth 13.71 grains of gold.....

By burglarizing the rest of the world, Roosevelt made the Great Depression even Greater. It was more Global because he had impoverished millions of foreigners, and it was more Persistent because he had ruined the good credit of the United States.....

In his excellent 1935 book Monetary Mischief, George Robinson claims that these gold reserves really did exist. Maybe so, maybe not. Either way, FDR was not honouring the redemption promise. The U.S. was now running a con game, having printed "gold certificates" that in fact could not be redeemed for gold at all.

Imagine if e-gold or GoldMoney suddenly began issuing new digital gold grams without having the real gold grams to match them. That would be theft and counterfeiting. Certainly creating even more fictional gold grams would not be the solution to this problem.

FDR engaged in theft and counterfeiting as a solution to a problem caused by theft and counterfeiting. A more honest solution would have been to make good on as many gold redemptions as possible, and then begin a massive liquidation of government assets to purchase gold on the open market until all redemptions were made. To avoid the pricing problems of sudden mass liquidations and mass gold purchases, the government might have offered gold bonds to those who would accept them. These bonds would be payable with interest in gold after a fixed time period..... government, but all private debts as well.

But that's just it--the government DID default on the redemption of paper currency, and it did bankrupt the country by deepening the depression and spreading it worldwide. Sadly, it did not bankrupt the government, only the indentured servants we like to call "citizens." (Brother, can you spare a dime?)

I must emphasize that when the government devalued the dollar and confiscated gold, they WERE defaulting on their redemption obligations. They didn't magically skirt the underlying hard reality just because some politicians signed some pieces of paper.

Some have said that FDR was faced with a dire national emergency, and did the only thing he knew how to do with the powers that had been granted to his new office.

To that I say: FDR was not granted these powers. He had no more legal authority to do what he did than my immigrant grandfather had. But that never stopped a president from doing anything to consolidate and maintain power. As a betrayer of the Constitution, FDR ranks right up there with Lincoln, LBJ and Nixon.

uponroofCramer...about to be exposed as a pump and dump artist#7103103/03/02; 12:55:57

Well....we all knew this was going on but now it's going to be in print. Might we someday see Cramer, Mark Haynes, Maria Bartiromo, David Faber et al at Senate Hearings? I would pay enormous amounts of fiat to see this.

"...In a soon to be released tell-all tale, former Cramer & Company employee Nicholas Maier accuses's co-founder of using CNBC anchors and his own television appearances to promote stocks that he would promptly sell, making a quick gain on the upswing..."

uponroofMeanwhile Cramer is busy throwing stones (in his glass house) at Hymowitz#7103203/03/02; 13:00:15

U G L Y.....

and bound to get uglier.

uponroofThe sad state of it all...#7103303/03/02; 13:06:54

"...The price of securities deregulation is rapacious financial practices, phony audits and a sham SEC..."

with thanks to felice22 for these 3 links.

SiochainGetting Ready for the next shoe to drop#7103403/03/02; 13:49:25,8599,214064,00.html

Times article (above}coming out tomorrow plus also check out Washington Post article

Drudge commentaryXXXXX DRUDGE REPORT XXXXX SUN MARCH 03, 2002 09:22:37 ET XXXXX

Sun Mar 03 2002 10:40:24 ET

New York -- In October, an intelligence alert went out to a small number of government agencies, including the Energy Department's top-secret Nuclear Emergency Search Team, based in Nevada. The report said that terrorists were thought to have obtained a 10-kiloton nuclear weapon from the Russian arsenal, and planned to smuggle it into New York City, a special TIME magazine investigation reveals.

Publishing sources tell the DRUDGE REPORT, the next cover story of TIME will headline: "Can We Stop the Next 9/11?"

The report hits newsstands Monday, March 4th.


The source: a mercurial agent code-named DRAGONFIRE, who intelligence officials believed was of "undetermined" reliability, TIME reports. But DRAGONFIRE'S claim tracked with a report from a Russian general who believed his forces were missing a 10-kiloton device.

That made the DRAGONFIRE report alarming. So did this: detonated in lower Manhattan, a 10-kiloton bomb would kill some 100,000 civilians and irradiate 700,000 more, flattening everything in a half-mile diameter.

Counterterrorist investigators went on their highest state of alert, TIME reports. "It was brutal," a U.S. official told TIME.

It was also highly classified and closely guarded.


Under the aegis of the White House's Counterterrorism Security Group, part of the National Security Council, the suspected nuke was kept secret so as not to panic the people of New York. Senior FBI officials were not in the loop. Former mayor Rudolph Giuliani says he was never told about the threat. In the end, the investigators found nothing, and concluded that DRAGONFIRE'S information was false. But few of them slept better.

Counterterrorism experts and government officials interviewed by TIME say that for all the relative calm since Sept. 11, America's luck will probably run out again, sooner or later. "It's going to be worse, and a lot of people are going to die," warns one U.S. counterterrorism official. "I don't think there's a damn thing we're going to be able to do about it."

The DRUDGE REPORT has been briefed on other revelations coming from TIME's investigation:

The Coast Guard is arming itself against a possible terrorist attempt to destroy a major U.S. coastal city by detonating a tanker loaded with liquified natural gas.

The Administration has recalled old CIA hands with experience in Central Asia. Says an Administration official: "You ended up going back to retirees because the bench was so light on Afghanistan. We're still trying to get up to speed."

This week, Tom Ridge's office plans to announce a new color-coded alert system to warn local law enforcement and the public about threats within U.S. borders, sources tell TIME.

While there is a genuine debate inside the government about whether Osama bin Laden is still alive, there is far less argument about what will happen after Washington is able to confirm that he is dead. A U.S. official told TIME last week that it is widely presumed that al-Qaeda sleeper cells will take retaliatory action once the terrorist leader is killed or proven dead.

"We're as vulnerable today as we were on 9/10 or 9/12," says presidential counselor Karen Hughes. "We just know more."


Filed By Matt Drudge

Black Blade@uponroof - Cramer#7103503/03/02; 13:57:06

Some here may remember that he was fired from FOX for touting stocks that he owned. He was under contract and he violated te terms by recommending shares of companies that he had an interest in without making any disclosure. It appears that he may be up to his old tricks again.

- Black Blade

Black BladeIndia Tops in Gold Demand#7103603/03/02; 14:27:56


The US is the second largest consumer of gold, but its total consumption is lower than 50 per cent of the Indian consumption. The popularity of gold as a tool for investment is increasing due to the global recession, especially in countries like Japan. This is the main reason for the spurt in gold prices in almost all major markets. But this would not destabilise the demand for the yellow metal, Sivaram said.

Black Blade: The WGC is promoting hallmarked machine made 22K Gold jewelry. This may be a good thing as the Indians have been ripped of by local jewelers with lower than stated Gold grades. Marriage season begins this month.

BoilermakerFinancial Astrologist#7103703/03/02; 15:47:40

This guy's schtick is astrology with a twist of financial savvy or visa-versa

``The only fundamentals I look at are P-E (price to earnings) ratios, and I keep a lot of technical indicators,'' he told Reuters from his Tucson, Arizona, home. ``But when the market is not following technical priorities, I immediately look at the sky.''

By many accounts, the 60-year-old Crawford, who has published his monthly ``Crawford Perspectives'' newsletter since 1977 and runs a hotline for stock tips, is the best of the bunch. After all, he is credited with prescient calls like forecasting the October 1987 crash.

Don't laugh! That 1987 call was partly pegged to a rare stellar formation the savant saw: the sun, moon, Mercury, Venus and Mars clustered tightly. To astrologically-savvy civilizations like the ancient Mayans it spelled trouble. Crawford promptly warned the sky would fall over Wall Street.

Ditto for his inspiration for another accurate call, the current bear market. That came from a huge planetary alignment in May 2000: Saturn opposite Pluto. This pointed to a decline in economic activity and Crawford warned his readers ``a Bloody Bear Market will be evident'' six to 18 months forward.

``The astrological stuff that I do is all statistical, it is as scientific as any non-astrological work that I do,'' Crawford said in the Southern drawl of his North Carolina roots.


The bulk of Crawford's advice is ``market timing'' -- when to be in or out of stock, bond and commodity markets and identifying major turning points based on technical indicators.

Crawford also has made good calls on individual stock picks. He recommended investors buy into gold mining stocks such as Newmont Mining (NYSE:NEM - news) in April 2001 -- the stock rose from about $16 to nearly $24. The pundit is bullish on the shiny metal itself, believing its long-term bearish cycles have turned and will be up for years.

Top rated financial publication Barron's has called this stargazer the ``Best astrologer on Wall Street'' and Kiplinger's Personal Finance magazine has raved about his track record. Timer Digest magazine, which tracks scores of market timers, named him the 1992 Long Term Timer of the Year and put him on its June 2001 cover.

``He has not beaten the market but there was a five-year period when he was one of the better (market) timers,'' said Mark Hulbert, publisher of Hulbert Financial Digest, which tracks newsletters and has eyed Crawford's work for more than 12 years.

Some 2,000 people, including top Wall Street hedge fund managers, subscribe to Crawford's $250 a year newsletter. The astrology bit is why many subscribers prefer to receive it at home, not the office.

``They don't want people to know that they take the newsletter because of the esoterica,'' Crawford laughed. ``They don't want people to think they are some kind of nut cases.''

I like his style and message.

CoBra(too)Chilling News from S.Africa! #7103803/03/02; 16:05:07

Or is it only Kebble-istic?

Gold boss barred from S. Africa
Mark Wellesley-Wood, the UK-born chairman and chief executive of Durban Roodepoort Deep, has been refused re-entry to South Africa ahead of litigation against former business associates, JCI Gold and Consolidated African Mines.

Whatever it is, knowing M.W-W. it must be more. A shadow of Zimbawe crossing over the sun of the socialist government may also foretell the fate of SA - in the end.

Very disturbing - though the cabal (if there is one - or two) will it find most distressing, when the largest producer is in disarry. Or will this be the final excuse to paper over the dirty game?

As much as i'd like to show my allegiance to Durban, Goldfields and Harmony - I'm rather leaving this country for good, and go physical (almost) only - (Hello Belgian), took me awhile, though got more to go.

Mesmerized, seeing through? cb2

WaveriderCoBra(too)#7103903/03/02; 16:22:05

Do you have a URL for that, or source? Thanks in advance,

WaveriderFound it! Gold boss barred from South Africa#7104003/03/02; 16:30:21

See link for the entire article. Cheers,

Black BladeIn fraud case, focus turns to auditor - Ernst & Young's practices are questioned in gold scam#7104103/03/02; 17:35:57



SAN DIEGO, March 1 - Surya P. "Pat" Patangay is a financial criminal. He says he had an unwitting accomplice: accounting firm Ernst & Young LLP. As owner of Sonali Corp., a small gold-jewelry seller in Oceanside, Calif., Mr. Patangay defrauded Wells Fargo & Co. out of $14.5 million during the late 1990s.

HE CONCOCTED documents showing his business generated sales of as much as $70 million annually-while actual revenue never surpassed $1.5 million. He stuffed vaults and safe-deposit boxes with more than 12,000 feet of fake gold chain to fool auditors. He rented postal boxes nationwide to create a phantom network of clients.

Black Blade: Yeah, another auditor is in the hot seat.

Black BladeReady to party?#7104203/03/02; 17:51:27

From The Economist Global Agenda


As more evidence emerges that America's economic recovery may have started, hopes are rising that the worst may also be over for the world economy. But it may still be too soon to uncork the champagne

Black Blade: Though media talking heads and Wall Street pimps along with Alan Greenspin are claiming that the recession is over, we still await evidence. There is still the "minor" problem of corporate profits. There are none. At the meeting of the nation's CEO's in Boca Raton, Florida, there was even less optimism. In fact the CEO's were rather pessimistic citing that there are no plans for expanding capital expenditures. That does not bode well for the economy. "Is this a stealth recovery?" Meanwhile the "Bone Pile" grows ever higher and as benefits expire, out of work workers are no longer counted among the ranks of the unemployed. They may be looking for early retirement or living off of what investments they may have or off of high interest debt credit cards and mortgages. Recovery? Ok, sure - why not. If it makes the pundits happy to live in a fantasy dreamland.

CoBra(too)@ Black Blade - Ready to party?#7104303/03/02; 18:27:04

Mon! You're right on!

I'm ready to party -
as I feel the recession
wasn't really on!

You've got to give the boyz some credit
as you know they won't see any debit!

... accumulating debt all along,
destroying any productive nation,
by future's expectation.

Or is it wanton speculation,
hedging the FRN's future -
by manipulation?

OK, let's party, Mon
as long as we can
service the 5% debt
over our income.

... and many thanks, Mon
for all your great posts
and please have 'em come
't won't bother, hey brother,
the hosts, Mon.

Thanks and take care BB - cb2

PS: Won't have to re-direct you to Dr. Kurt R.?
BTW - No(r)Way - I knew it!

Chris PowellGATA dispatches about South Africa's expulsion of Durban CEO#7104403/03/02; 18:35:16

GATA dispatches about South Africa's expulsion of
Durban Roodeport Deep CEO Mark Wellesley-Wood:

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.

uponroofPosting Wood's salery package as if he is some crook is an....#7104503/03/02; 19:46:05

indication of what's going on here....dirty politics.


This might provide an excellent chance to load up cheap again.

Siochain@Black Blade re Ready to Party#7104603/03/02; 19:47:54

I had dinner at one of my brothers's tonight and we discussed the comments from the CEO meeting....he completely concurred and then some!

My brother is one of the top execs in one of the top Cos involved in insurance etc

He says they see no recovery ...and in fact weakening. People in his Co are wondering who is on the next pink slip list. Surprisingly the place they are making any money is Japan where ther are deals to take over and run various concerns with no liabilities...the Japanese just want out.

I have never seen my brother as concerned...and believe me...he is in a position to know what's what with many of the Big Boys

copperknobberAu trading hours#7104703/03/02; 19:56:15

With thanks I join the lurkers who are compelled to post in order to learn. My gratitude goes to all who take the time at this site to advance the thirst for knowledge of our complex world. I am especially thankful for the tremendous effort of Black Blade. My question: Forgive me if I have missed the answer, but are any commodities or equities, other than gold, confined to reduced trading hours post 9/11? If the reduced trading hours have a negative impact, are there plans for changes?
Gandalf the WhiteThe "SPIN Doctors" are overdoing it !!!#7104803/03/02; 20:32:28

Corporate failure: Sato Kogyo president Hiroshi Yoshida bows at the end of a news conference in Tokyo after the Japanese builder filed for court protection in Tokyo District Court yesterday. Analysts say financial markets could take the failure as a sign of progress towards consolidating Japan's long bloated and coddled construction industry. Associated Press
Could the financial markets also "take this as something being rotten in Denmark" ?
NAW !!

DOWNUNDERRE DROOY -- - - - - -#7104903/03/02; 20:44:20

As to be expected DRD (on Aust ASX) is down 3.8% on quite high turnover(30.2K) for the stock here, considering its a public holiday in Western australia.

Having read all of the links re the story about DRD's MD being barred from re-entering the country I can only conclude that Mark Wellesley-Wood is a dead set Wanker!

This arrogant Pom should have had his paper work in order-its as simple as that. He should have had a business work permit-no question. As a DRD shareholder with a significant shareholding I can only hope that this Company gets its act together in a proper manner.

Less than a month ago 3 directors of DROOY (including MWW) sold shares in the Company and at a time when the share price was only just holding. This was serious stuff BUT luckily prices shot up from there --obviously without the help of the clowns that run the place. This company has to get its act together --- a lot of gold bugs have supported
this company & exemplary corporate behaviour is expected &

Black BladeAsia Rocketing Higher#7105003/03/02; 20:48:41

The Nikkei is rocketing higher by 553 points (over 5%). Happy days are here again. No more worries. Ignorance is bliss. Then again it could all be the Japanese PPT at it again with a fresh infusion of cash and worried Japanese buying anything ahead of April Fools day.
sectorNKK225 Rising on Government Equity Purchases...Little Birdy Says.#7105103/03/02; 20:50:38

Whew! They had me going for a minute there.
Was it 15 Billion yen they allocated to buy stocks?...or maybe it was 15 trillion yen.

Who's counting anyway...except for the remeining whipped puppies at Moody's and S&P.

Oh can bet the 60s and 70s crowd in Japan is counting THEIR yen and not falling for the NKK225 head fake.

ShermagMost of asia is sizzling now#7105203/03/02; 21:00:33

Taiwan, Japan, Singapore, and South Korea all up over 3% at this time, with Hong Kong up almost 2%.

Is it real, or is it Memorex?

Chris PowellBusiness Report's story on expulsion of Durban CEO#7105303/03/02; 22:44:04

South Africa Business Report's story on the
expulsion of Durban Roodeport Deep CEO Mark

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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Mr GreshamRecovery?#7105403/03/02; 23:28:47

Not sure I've got a fully-formed thought here, but the economy showing better stats due to money-pumping (of various types) is not necessarily the bear case for gold.

Gold rides on the two wings of inflation (prices up -- protect your purchasing power) and default (accounts at institutions lost in system seize-up). The middle ground -- stable, low inflationary growth -- is when gold rests.

Our case is that the middle ground has been squeezed down to a sliver, and that _structural_ imbalances are now built into, well, the balance sheets of the most important institutions. Whether the stats veer one way or another now is less relevant than whether they can steer down the middle to some soft landings in important sectors of finance.

Perhaps if all the counterparties could agree to something like 20% haircuts and start over in place, we would be spared the worst default scenario, with a payments system lockup. This is what AG must be trying to structure, and as such, he ought to be in touch (or basically backing up) the credit risk insurers like MBIA and AIG, and having backroom consultations with the rating agencies like S&P and Moody's, before they downgrade a JPM or two.

However in doing this he has to guarantee a boatload of liquidity and in the cases where it is firehosed onto a "situation" can he restrain its leakage into other markets? The signal of excess cash through the system builds pressure on eventual dollar devaluing vs gold.

These are games that might be played only with fiat -- as AG said last week it's still an experiment in process -- and with the greatest belief and faith in it by a prosperous population ever, he's got all the running room any central banker's ever gonna have.

In the greatest musical chairs game ever, the chairs are not being removed so much as morphed into "virtual" chairs, and everyone is still dancing busily around the remaining images of those same chairs. The question is whether some less trusting players (big ones) know that the "virtual" game is for the mass of suckers only and are putting their physical butts on some real chairs while they still can.

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Black BladeThird World Asian Markets Higher#7105603/03/02; 23:55:31

Nikkei finished at +638 (up nearly 6%). The Nikkei appears to have tugged the rest of the Third world Asian countries markets higher in sympathy. "Interesting Times"
BelgianCNBC-Euroland : GOOD NEWS (again)#710573/4/02; 02:08:45

Philip Manduca from Dexia alt.inv. Fund confirmed "strongly" again that Gold is "manipulated" and will revalue strongly during 2002 and 2003 ! Again the intervieuwer tried to ridicule Physical Gold and its Holders. But with very, very little conviction (seemed rather embarresd with his imposed nonsense-mantra) !!!

On the geo-political front, the visit of Eurolander Solana to the US about the situation in the ME, indicates that the Empire is losing allies overthere at a rapid pace. Arabian and Russian oil (included the 50% private oil) will bring POO into the 25$ - 28$ range for geo-political reasons !

CBII: Yes the present small DROOY-event is a small example of what can happen when Governments suddenly turn their attention to underground gold ! Say no more Belgian !

TownCrierCentennial is glad to call it "home", Denver becoming a world gold heavyweight#710583/4/02; 03:16:17

Chris Thompson, chair and CEO of South African Gold Fields announced that he is stepping aside for Ian Cockerill, formerly of AngloGold.

From the article:
--------Thompson will continue as non-executive chairman of the board but will relocate to Denver: "The move will allow me to become more effective," he said. The existing combination of the chief executive and chairmanship roles means Thompson is often too caught up in the day-to-day management to give the overall direction of the group appopriate time: "Chris's role will now become more Olympian," Cockerill said.-----------

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Black BladeGold Over $300/oz.#710593/4/02; 03:16:28

What the hell is this? Gold just popped over the $300 level.
Grubstakerthe NIKKEI "rebound" a.k.a. "another paper play"......GOLD responds.#710603/4/02; 04:21:12;jsessionid=5GYLGHB3L1TKOCRBAE0CFEYKEEATGIWD?StoryID=656735&basketId=US_COMKTNEWS&marketId=1





ANALYSIS-Lift from Japan short-selling rules to be brief
March 04, 2002 04:25 AM ET
By Risa Maeda

TOKYO, March 4 (Reuters) - Japan tightens its rules on stock short-selling this week, aiming to curb speculative sales ahead of the critical annual book-closing on March 31, but the rushed move threatens to disrupt trading and will do nothing to solve the country's underlying financial problems, analysts said.

Short selling involves selling shares you do not own in the hope of making a profit by buying them back at a lower price.

Tokyo's benchmark stock index, the Nikkei 225 .N225 , jumped 5.9 percent on Monday, extending the surge seen since the rules on short sales were included in the government's anti-deflation package on February 27.

Analysts generally doubted whether that effect would linger much after Wednesday, when the rules are implemented.

"Regulations do not change the world. Once short-covering is over, that's it for the market," said Masatoshi Kikuchi, senior strategist at Merrill Lynch in Tokyo.

Short-selling, particularly by foreign hedge funds, has been blamed for a sharp fall in the Japanese banking sector and wild fluctuations in Tokyo share prices in general in recent months.

Japanese banks now have to value their huge stockholdings at market prices. Most of the big banks are already forecasting net losses this financial year and the authorities are worried that weak shares will further undermine their financial solidity.

Currently, operators who borrow stocks to sell short are barred from selling below the most recently traded price.

From Wednesday, Japan's financial watchdog, the Financial Services Agency (FSA), will also ban short selling at that price. Henceforth, short-selling will only be allowed at a price higher than the most recently traded price.

Some analysts saw little inconvenience.

"The new rule is not particularly onerous. All it is doing is introducing the same rule in Japan as has existed in the United States since 1931, which is the 'uptick rule'," said Garry Evans, strategist at HSBC Securities

<end snip>

Another sucker rally..Has this aspect been topic for discussion /posting or did I miss it? This time Gold is speaking very loudly see GOLD climb along with the Asian Equities markets is more like a harbinger of what is to unfold..stay tuned here at USA GOLD......

Black BladePlatinum bolts higher at London fix, gold firmer#710613/4/02; 05:20:22


LONDON, March 4 (Reuters) - Platinum prices leapt to a seven-month high at the morning fix in London on Monday, as investors caught short by the Nikkei's strong rebound in Asia overnight struggled to cover their positions, traders said.

Platinum prices leapt over $20 at the fix to record their highest level since July 2001, after yen-based platinum futures had surged on Monday on TOCOM as spooked investors holding short positions rushed to cover as Tokyo stocks soared and the yen firmed.

Prices snapped up to fix at $512 an ounce, up from $488 on Friday afternoon. The last time prices topped $500 an ounce, was back in July 2001, when prices hit $504. ``The Nikkei went up and caught a few people short this morning. It's run into resistance here, but I think it has the potential to run away now it has cleared $500,'' a trader said.

Black Blade: The Japanese are hot on both Gold and Platinum. This suddenly explosive rise on the Nikkei over the last few trading sessions is surprising in that Japan's underlying economic problems (in particular the insolvent banks) have not been addressed. Also, I would be interested to see if Russia is making deliveries. They had depleted their stockpiles of PGMs in 1998. "Interesting Times"

SpartacusCongressman Ron Paul#710623/4/02; 05:25:27

Friday, March 1, 2002
Donald Luskin : The Greenspan Gadfly

---The Fed's chief congressional critic may be a little off the wall, but he's asking some interesting questions.---

KnallgoldBundesbank gold sale clarified (Kleine Nach(t)musik)#710633/4/02; 05:45:09

"mentioned that a prominent ---politician---(sounds
familar? Knallgold) had written a proposal suggesting Germany should sell a substantial chunk of its gold reserves...The whole move is Eine Kleine Nachtmusik to the conspiracy theorists' ears. .."

BoilermakerDROOY in SA#710643/4/02; 07:00:24

Hopefully this post does not violate forum rules about stock dicussion but the news on Durban has broader implications for SA investment in general.

I've been watching Durban Deep (DUR) on the JSE today and its holding firm and a little up at 3070 SAR. Only a little over 100K shares traded with a 30min time delay on the quote. Perhaps this fuss over their CEO is seen as a tempest in a teapot by the South Africans.

Any other reaction been seen?

TruthcasterIs the War going our way?#710653/4/02; 07:10:54

I just seen on the MSNBC website were more of our soldiers
were killed in Afganistan.
I think that if we see this every day it will wear on the stock market will wait and see today. May look for gold pop to, can't wait for the UK's last auction. :) truthcaster

Cavan ManGood morning Vietnam!#710663/4/02; 07:32:29

Story Filed: Sunday, March 03, 2002 11:19 PM EST

SURMAD, Afghanistan (AP) -- U.S. bombers pounded al-Qaida and Taliban positions in the eastern mountains of Afghanistan and allied forces clashed with the
well-armed fighters as a major U.S.-led offensive raged for second day Sunday.

U.S. and Afghan forces backed by the airstrikes engaged in ``heavy'' fighting against ``several hundred'' opposition fighters, said Maj. Ralph Mills, spokesman for
U.S. Central Command in Tampa, Florida.

Mills said that U.S. strike aircraft, bombers and AC-130 gunships were targeting enemy vehicles, mortars, troops and caves. He would not estimate how much
longer the fighting would go on.

Overnight and into Monday morning, U.S. aircraft carpet bombed the Shah-e-Kot mountain range of eastern Paktia province, where Taliban and al-Qaida forces
are believed to be hiding out in caves.

U.S. Chinook helicopters ferried in supplies to American and other troops in the hills following the start Saturday of a 1,500-strong coalition ground attack in the

One American soldier and three Afghan fighters were killed Saturday, the Pentagon said. Six Americans were injured and airlifted out, a doctor at Gardez hospital

The assault, which began with bombing raids late Friday, was believed to be the largest joint U.S.-Afghan military operation of the 5-month-old terrorism war.
Pro-U.S. Afghan troops approached the hide-outs from three directions to isolate the fighters and prevent them from escaping.

Afghan troops warned the operation was far from over.

``You can't do everything in one operation,'' said Raza Khan, an Afghan fighter recovering from Saturday's battle at the hospital in the provincial capital, Gardez.
``This is Afghanistan. This is a guerrilla war.''

Leaflets dropped by U.S. aircraft on the arid plains of the province urged residents to cooperate: ``Hand over Taliban and al-Qaida or you will be destroyed.
Come forward with information about Taliban and al-Qaida,'' read the leaflets, written in Afghanistan's two most common languages, Pashtu and Dari.

Sunday's airstrikes repeatedly pounded targets in the Shah-e-Kot mountains 20 miles east of Surmad and the Kharwar range to the west in Logar province.

The bombardments, which continued Monday, sent thick, black plumes of smoke above the snowcapped peaks and shook the ground in Surmad, where a
constant stream of bombers streaked overhead.

``In one minute I counted 15 bombs,'' Rehmahe Shah, a security guard at the intelligence unit in the provincial capital Gardez, said Monday.

One Afghan commander, Abdul Matin Hassan Kheil, said his men came under fire Sunday from mortars, heavy artillery and rockets fired from al-Qaida positions
where Arabs, Chechens and Pakistanis were believed holed up.

``You can see it is a big operation,'' said Kheil, who led 50 fighters at a front-line position. He said coalition forces were dug in about one mile from al-Qaida
bases in the Shah-e-Kot mountains.

At least three Chinook helicopters, which zoomed toward the mountains Sunday afternoon flanked by two jets, were supplying ammunition and food to American
forces still in the hills, he said.

Kheil estimated it would take a month to push the fighters from their mountain strongholds.

Saturday's ground attack, carried out in snow-covered mountains ranging from 8,300 feet to 11,600 feet above sea level, appeared to have made little headway in
dislodging Taliban and al-Qaida fighters who are regrouping in the hills of eastern Afghanistan.

``Firefights have been intense at times in heavy combat action,'' Maj. A.C. Roper, spokesman of the 101st Army division in southern Kandahar, told reporters

A U.S.-led force of 1,500 Afghan allies, U.S. Special Forces and troops from the Army's 101st Airborne assault troops had assembled for the battle, a U.S.
defense official said.

Central Command said that coalition partners participating in the operation include Denmark, France, Germany, Norway, Australia and Canada, although it was
not clear if all those countries were operating on the ground.

The Afghan allies made up the bulk of the force and approached the front from three different directions, some of them using pickup trucks rented for $200 from
the Gardez bazaar, Afghans said.

About 600 fighters accompanied by at least 40 U.S. soldiers approached from Gardez, north of Surmad, said Safi Ullah, a member of the Gardez town council,
or shura. Another 400 Afghans came in from Khost to the east, and an undisclosed number came from Paktika province to the south.

At least 70 vehicles carrying American and Afghan forces snaked around the back road behind Surmad to reach the front, said schoolteacher Rehmatullah, who
uses only one name.

A Surmad village elder, who identified himself only as Mohammed, stroked his unkempt, red, henna-streaked beard and pointed toward a mountain beyond a
stand of trees near the Shah-e-Kot range where the offensive was launched.

After the ground attack stalled, U.S. planes late Saturday dropped newly developed bombs designed to send suffocating blasts through cave complexes, military
officials said. The ``thermobaric'' bombs were tested in December and officials said in January that they would be rushed to the region for the war.

Afghan fighters recovering Sunday at Gardez hospital described the operation as two-pronged, with one group of Afghan troops and U.S. Special Forces
launching a frontal attack on the mountains and a second attempting to ambush from the rear.

Fighter Raza Khan said the American was killed when a pickup truck he was riding in was hit by a mortar shell.

Six injured Americans were airlifted out of the area by helicopter, said a doctor at Gardez hospital, Najibullah. Surmad residents said helicopters had gone into the
mountains amid heavy firing Saturday.

The first stage of the offensive was designed to cut the road from Shah-e-Kot to trap al-Qaida and Taliban forces in the mountains, said Safi Ullah of Gardez. He
said the plan also involved setting up checkpoints in the area to prevent them from escaping.

Pakistan closed its border to block fleeing al-Qaida or Taliban members and deployed extra army units and members of the Khasadar tribal militia to catch any
who try to cross the frontier.

The rugged, caved mountains around Gardez have been a hiding place for Afghan warriors since anti-Soviet guerrillas used them as a base for their fight against
Soviet troops in the 1980s.

Afghan officials say as many as 4,000 al-Qaida and Taliban fighters are regrouping in eastern Afghanistan and just over the border in Pakistan, urging the faithful to
wage holy war against U.S. forces.

Neither the former Taliban supreme leader Mullah Mohammed Omar nor al-Qaida chief Osama bin Laden is believed to be in the area.

Copyright © 2002 Associated Press Information Services, all rights reserved.

sectorMorgan Stanley Finds the Handle...Embraces Beardom#710673/4/02; 08:05:33

Global: The Heavy Lifting of Global Decoupling
Stephen Roach (New York)

The global economy remains locked in a US-centric mindset. With America now flashing early signs of cyclical recovery, the world at large is starting to breathe a collective sigh of relief. And why shouldn't it? The great global growth engine finally appears to be back on the tracks. Is the world economy about to reap the fruits of yet another US-led upturn?

Our "global decoupling" thesis argues to the contrary -- that the world will find it exceedingly difficult to stay the course of the US-centric growth paradigm that has been in place for most of the past decade. This outcome hinges on a US economy that is now facing an unsustainable external imbalance -- an economic recovery that begins with America saddled with a current-account deficit of about 4% of nominal GDP. Never in recorded history has the world's growth engine attempted to jump-start the global economy with such a massive balance-of-payments deficit. Indeed, the real risk is that this imbalance could get considerably worse if the world stays this course -- with the US current-account deficit rising to 6% in 2003, and considerably higher in the years beyond. That's the precisely the macro tension that global decoupling addresses. Such an extraordinary imbalance in the global economy is simply not sustainable. It could well give way either to slower US economic growth or faster growth elsewhere in the world -- or a combination of both.


The good Mr. Roach has yet to realize that the the bear's grail is also made of gold...but he's coming around.

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USAGOLD Market CommentaryAn All New Short & Sweet; Start the Week on a Golden Note#7106903/04/02; 09:35:11

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"These are treacherous times for investors." The Bank Credit Analyst

"The Treasury, the Federal Reserve and Congress have all taken a wrong turn together when it comes to the economy, and the people of the United States will have to pay the penalty." Adrian van Eck, The Money-Forecast Letter

SpartacusJ.P. Morgan/Chase#7107003/04/02; 09:46:45

By Douglas C. Noland from Prudent Bear Mutual



After Enron, they can't take the chance of having it come out with the wrong spin!

Among others, Citi, Morgan Stanley, Goldman, AIG, Merrill and GECC are likely very large netting counterparties. A downgrade, which looks increasingly likely, will force interesting disclosures there. Other counterparties will be the beleaguered Japanese banks and the large British, Dutch, German and, to a lesser extent, other continental banks. If the safety and secrecy of netting begins to unravel, this could be quite a story. They may, with the aid of the Fed, be able to again sweep this under the rug but we doubt it. ----

Spartacus:Dynamic hedging? Interesting...

Brett msg#: 71062#7107103/04/02; 11:11:15

Spartacus, that link to "The Greenspan Gadfly" led to a good read and provides a link to Mr. Greenspan's Testimony. Here is a further transcript of the exchange during Q&A after the testimony. It was previously posted by Michael Nystrom, editor of "" and "Stock Market Chronicles."

Following is a transcript of the [Ron Pual/Alan Greenspan] exchange:

"Chairman, if we get to this point (of the collapse of the dollar), which I suspect we will someday, I ask that we have hearings to debate the issue of what medium exhange we will have before the Fed starts using oxen as a medium of exchange...

"I feel that it is an important point, and I want to relate that to the Enron issue. In many ways I feel that the system you have been asked to manage is similar to being asked to manage an Enron system. Because Congress is notoriously in favor of deficit spending. We are currently expanding the national debt at $250 billion per year, and we have nearly a $6 trillion debt*. Now we create that debt by buying votes. We spend alot of money.

"Now, the Federal Reserve comes in and they buy that debt in order to maintain the interest rate that they think is the right interest rate. And they take that and use it as an asset. You put it in the bank, you call this debt that we created an asset, and you use it as collateral for our Federal Reserve Notes.

"So that's a pretty good scheme, and I think in the moral terms, as well as the economic terms, it is very similar to how Enron operates. I'm not convinced that this system works very well because alot of people here praise you for the adequate amount of liqidity, and that's what inflation is - you create more money, lower interest rates. Every time you ask for liquidity, every time you ask for lower interest rates, you're asking for inflation of the money supply. And I think what we fail to ever do is ask about the cost.

"Do we ever concern ourselves about the people who have had 2/3 of their income removed because they happen to be savers, and living off interest? We gouge them with interest, inflation, a loss of purchasing power, as well as taxing that. And a lot of people in this country have suffered from that particular system.

"Now the analogy that I would like to draw is something that you said in your testimony on page 13. And you have mentioned several times now that Enron may be a good lesson. And I think it is. And I'm not for more of this regulation by the SEC. I think you're correct that derivatives provide a market tool that is worthwhile. But you said the Enron decline is the effective illustration of the vulnerability of a firm who's market value largely rests on capitalized reputation, with very little if no physical assets.

"That's exactly what our monetary system is all about. And that's why I believe that the dollar is vulnerable. We in Congress do not have a responsibility to run Enron. Some other government has the responsibility to deal with fraud. We have a responsibility to the dollar. And I think that's what we fail so often to address around here.

"And you said that Enron provides the encouragement that the force of market discipline can be counted on over time to foster a much greater transparency. That's exactly what the market does with money. If you look at the rapid and sudden devaluations of the fiat currencies around the world, if you look at what happened to us in '79 and '80, that was the market coming in and enforcing vulnerability & transparency on us.

"Now, gold gives you a hint as to what's happening. Gold has sent a mild message in this past year, in spite of the fact that central banks and other continually sell and loan out gold to push the price of gold down. But there is a message there.

"So I would ask you, can you see any correlation between what you're asked to do in running our monetary system to that which Enron was involved in?"

Greenspan's response:

"I hope there are fundamental mean there are…'s ....ah,.. first, dealing with a fiat currency, what it essentially is that we are doing is that the currency is granted value by fiat of the sovereign, as it is said in the text books. The issue there is years past..uh..there have been, there's been considerable evidence.. that fiat currencies have been mismanaged in general and that inflation has been too often the result.

"What I was mentioning in the speech that you were referring to was the fact that there is some evidence that we're learning that lesson…learning how to manage fiat currency..ah...ah...I've always had some considerable skepticism about whether that in a long run can succeed, but I must say to you the evidence..errr...of recent decades is that it has been succeeding. Whether that continues is a forecast which I can't really on.

"The Enron situation is essentially one in which..ah..there was an endeavor to imply that earnings were much greater than they really were. That increasing debt was hidden. I can think of no reason to have done what they did with their off-balance sheet transactions, other than to obscure the extent of the debt that they had, and what was essentially squandered in that process was the reputational capital, which they had succeeded in achieving over a period of time...and I don't perceive that …er….that anything that we are doing as a central bank..ah.. involves anything related to that..I hope that ….uh…where we need to be transparent and indicate what we are doing, we do so and we do so except in those areas where it - as I mentioned to you previously- ah…inhibits the ability to actually function as a central bank. But as I say in summary I hope your analogy is inappropriate."

Paul's last word:

"I'll keep hoping."


Black BladeWelcome to the 'deflationary boom'#7107203/04/02; 11:21:07

Discounts, low rates likely to persist


North America has turned into one giant bargain bin, a fact that clearly haunts the dark corners of Alan Greenspan's mind as he casts his critical eye over an increasingly upbeat economic recovery.

Bargain basement prices may have saved the United States and Canada from recession but they will continue to crimp corporate profit and hang like a shadow over balance sheets loaded with debt.

Black Blade: The last few trading sessions on Wall Street have been amazing in face of no real supporting data. What phantom improvements to the GDP are due to lower oil and zero percent financing that yields very little if any to the corporate bottom line. Should get "interesting" over the next few days.

Cavan ManBlack Blade#7107303/04/02; 11:43:42

You see how much people want to believe. The market will eventually lighten their liquidity IMHO.
RobotGuyNY AU Close#7107403/04/02; 12:22:30

At least we're near $300 day before auction. What will transpire? How long will gold be 'pinned'? How long will it take before wary investors flood PM market? I keep waiting for one of those famed spikes most of you speak of, fifty dollar overnight jumps etc... I've not been studying PM's long enough to see a great spike. Is it possible that it could still happen? Or are too many people watching PM's too closely? Watched pot never boils?

"Heeeeeere spikey spikey!"

GoldnSilver2002Which big banks are in trouble?#710753/4/02; 13:32:03

Hi Spartacus,do you know which big banks in uk,germany and holland will be in trouble?Are we talking total closure or loss of profits?I have some accounts in these countries.
Black BladeThe Energy Time Bomb#710763/4/02; 13:55:44

The Energy Time Bomb

The US is despised by many nations around the globe. The very existence of the US depends on some of these nations. In particular, the US depends on the willingness of the Middle-Eastern nations to sell oil to the west. Without Middle-Eastern oil the western economies die. It is simple as that. US policy in the Middle East has created a crisis with increasing Arab rage toward the US.

Recently energy prices have fallen and reserves appear to be adequate. This has lead political and business leaders to become complacent. However, lurking beneath the surface lies a bubbling energy crisis in the making. Even though the economy is believed to be on the mend, it simply cannot grow without an abundant source of "Cheap Energy". What happens if and when the Middle Eastern OPEC members decide to turn off the spigots? What if the Russians and former Soviet Union republics (many that are under Fundamental Muslim influences) decide to hold the US hostage? The answer is simple - it is either war or Global Economic Depression.

Warm weather along with reduced demand for energy due to economic recession has lulled the American consumer-investor into a state of complacency. We are setting ourselves up for one of the most devastating energy crises in history. Oil, natural gas, and electricity prices will rise much higher. The problem will be extremely intense if the US is truly in an economic recovery.

I have mentioned many of these points before. Even now there is a rising global demand for energy. Emerging Third World nations like China, India, and regions like Latin America and Africa are demanding their "fair share" of dwindling energy resources. If the Global Economy is emerging from recession, then that economic recovery will be short-lived unless a serious global effort begins immediately to explore for and produce sufficient hydrocarbons.

Even with the economic recession is force, we see that increased demand for Internet and high tech gadgets are placing an extreme drain on the decaying energy grid. The construction of web server farms continues. Each web "server farm" uses the equivalent electricity of eight 40-story buildings. This has placed an unsustainable strain on the aging US energy grid.

During the last energy crisis, there were plans for over 300 new NG-fired power plants. Those plans have been shelved due to lower energy prices. This will constrain economic growth, let alone any economic recovery. The EIA has stated that the US will need at least 40% more energy capacity by 2020. That is an extremely conservative estimate by any measure. We will not likely even come close. In spite of record drilling activity, there has only been a 2% increase in NG production. Now drilling activity has fallen off by over a third.

OPEC has been crucial to the economic survival of the western nations for decades. Saudi owns at least 25% of all the OPEC oil and that regime is looking less stable all the time. It was Saudi that provided most of the terrorists that flew loaded passenger airliners into the World Trade Center. Yeah, 15 of the 19 hijackers were Saudis. Why did they do this? Because they despise us, our culture and everything that America stands for. But even more than that, they perceive the US as a supporter of their enemy (Israel) and our continued military presence (infidel presence) in their country.

As the US is the major supplier of arms and supporter of Israel, I would venture a guess that we will see more Arab terrorist activity on US soil and perhaps even an overthrow of the pro-west Saudi Monarchy in time. This could come from the militant strict fundamentalist Wahabi influence that controls the education and religious teachings in Saudi. The Saudi Monarchy routinely payoff Wahabi clerics to avoid civil war. That may not work much longer as evidenced by the increasing extremism of Osama Bin Laden and his Al Qaeda network. What if Al Qaeda just decided to destroy a major Saudi oil off loading center? The world price of oil would skyrocket and crash the world's economies.

To put this in perspective, the US consumes about 20 million bbl/day, while producing only a mere 5.8 million bbl/day. Although the US buys oil from around the world, if the Saudis alone turned off the tap, the whole of the western economies would plunge into economic depression. We are not an agrarian society anymore. Even if we were, the petroleum industry supplies the fertilizers and pesticides for US farmers.

It's déjà vu all over again. This is not completely unexpected unless you're brain dead of course. Remember that we've been through this before. In 1973 there was the Arab Oil Embargo in protest of the west's support of Israel during the Middle East war. Saudi was the driving force behind that. There were long lines at the pump and the US economy crashed.

Then in 1979, the Shah of Iran was overthrown and militant Islamic fundamentalists took American embassy personnel and tourists hostage. Not to mention the Russian invasion of Afghanistan and double digit inflation. All these events caused many to fear another disruption of oil supply and consequently the POO rose dramatically, again causing gas lines at the pump and severely crashing the US economy.

Then in 1990, Saddam Hussein invaded Kuwait and again the POO rose higher. The US economy sank. Then last year there was another energy crisis along with rolling blackouts that pushed the US economy into yet another recession. Every postwar recession has been preceded by an energy crisis.

The only choices that the west has left are to become "energy independent" which is impossible of course. The next best thing is to reduce dependence on Middle-East oil. Another point is that energy distribution must be made more efficient. It is time for people to stop whining about NIMBY. This is a national security issue. The energy grid is woefully inadequate for the task. Upgrades, improvements, and new transmission grids are needed as well as more pipelines. We also must develop new alternative energy sources though our options here are severely limited and the costs are very high.

So get ready and prepare. I don't expect to see any meaningful changes anytime soon. We could see an economic recession/depression of epic proportions sooner rather than later. So get out of debt, get cash on hand for several months expenses, get a food and basic goods program started, get Gold and Silver portfolio insurance, and hope for the best.

- Black Blade

RockRussia knew about the 10 kiloton nuclear weapon #710773/4/02; 14:03:49

Russia knew about the 10 kiloton nuclear weapon

IMHO, I mean think about it. How does Russia all of a sudden come up short on a couple of briefcases containng portable nuclear bombs? ( i can't wait to hear what jay leno says about this one) Russia is pulling a Shilling. I would have to imagine that kind of top secret inventory would have the highest level of security, i mean how many briefcase nukes are we missing? I've heard of company theft but this is ridicules.

I have a gut feeling that Russia sold it to the terrorist (or even gave it to UBL) knowing that it would be used against the USA. It would only benefit the commies for United States to have to deal with a nuke going off in NYC or Washington. Think about how that alone could shift the confidence and world power balance as well as the destruction it would do to our already weakened stock market and economy in general which was one of the terrorist goals from the get go.

And I think the terrorist are going to pull it off, it's probably aready been planned out and waiting execution. I hate sounding like a doomsayer but if i could offer any advice today to my friends sitting here at the table it would be get your house in order because its about to hit the fan!

And like i said i have a gut feeling its just a matter of time before they do it. On a side note i always thought the market hated uncertainty and i cant think of a more uncertain and unstable time as now, what gives? Rock

Cavan Man@sector#710783/4/02; 14:53:36

Dollar/Dow Inverse Relationship? (now what?)

Markets roar and dollar drops?! What do you make of it?
Black BladePossible Coup Attempt at DROOY?#7107903/04/02; 17:29:03

First DROOY CEO Mark Wesley-Wood is banned from SA. Then Executive Director Roger Kebble is banned from DROOY properties. Maybe this whole imigration mess was orchestrated in a possible failed coup for DROOY leadership. "Interesting" Kebble is no stranger to controversy and playing fast and loose with the legalities.

- Black Blade

Black BladeRig Count Lower#7108003/04/02; 17:48:18

U.S. rig count down 10, Canada down 49


NEW YORK, March 1 (Reuters) - The number of rigs searching for oil and gas in the United States fell by 10 to 782 during the week ending March 1, according to oil services firm Baker Hughes (NYSE:BHI). A year ago there were 1151. The number of rigs exploring for oil and gas in Canada was down 49 this week to 361 compared to 540 last year. The total North American rig count fell by 59 to 1,143, while last year it was 1,691.

Black Blade: There will be no "Energy Independence" at this rate. The Middle East oil producers have there foot on our throats.

Black BladePuplava's Market Wrap Up#7108103/04/02; 18:13:56


Profit Mirage

This nonsense of reporting pro forma numbers is widespread. It is used by companies when they report their earnings and by analysts when they make their projections. This information is widely disseminated by illiterate anchors when they report the results. By emphasizing pro forma results, analysts and anchors are allowing companies to go with any number a company chooses. Companies may now subtract any expense from pro forma earnings they want to ignore to arrive at a profit number that they desire to portray. The result is that we are creating an illusion of profitability that in reality does not exist. What is occurring with the reporting of earnings borders on fraudulent and unfortunately, the practice is so widespread. There are absolutely no checks and balances in the system. Companies report what they want as earnings. Analysts use the bogus numbers in their projections, and network anchors simply parrot the results like automatons without any objective questioning.

Get Ready for Earnings Season

For now this mirage in earnings and the economy continues and is what is driving the market's upswing. I suspect the mirage will continue, heavily supported by analysts and anchors for a while longer. In just a few weeks we will begin the next quarterly reporting season. Companies will be reporting or warning, whichever the case may be, their first quarter results. Everyone knows they are going to be negative, but the question is just how bad. What will be even more important to glean from these reports is what companies are saying about the second quarter and the second half of the year. Wall Street is projecting a pro forma increase in profits beginning in the second quarter. The real bottom line numbers should be negative, which is why they won't be mentioned.

Black Blade: And so it goes. I think that Alan Greenspin alluded to this as "Irrational Exuberance". Also the Japanese markets have been somewhat irrational as the Japanese version of the PPT has been involved in buying up Nikkei 225 index futures and shares ahead of the Japanese banks year-end reporting (this month). The insolvent banks must report the market value of shares they bought at much higher prices. That could be especially damaging, and therefore the big effort to push the Nikkei index higher this month. "Interesting Times"

SiochainThought for the Day (& further!!!)#7108203/04/02; 18:24:23

I picked up Chinese foos for dinner....and of course got a fortune cookie....I'm still laughing...may it be true for us all:

"You will have gold pieces by the bushel"!!!!!!!

I never saw one like that before....maybe the force is with us ...

Oh..and the second one "You are going to have a very comfortable old age"

Hey this a new marketing campaign...pretty neat!!

Black BladeVerizon to Slash Jobs This Year #7108303/04/02; 18:33:09


For the second year in a row, telecom provider Verizon Communications Inc. is cutting its employment rolls - eliminating the budgetary equivalent of 10,000 jobs.

Black Blade: The "Bone Pile" grows as more "Phone Bones" march off to the unemployment office. No - I see no economic recovery yet.

slingshotJulius Caeser#7108403/04/02; 19:03:51

Words from the past.

I thought it fitting on the eve of the BoE auction to draw a line from Shakespeares, Julius Caeser. Would there be any better warning to the cabel than the soothsayers, "Beware the Ides of March". Being the last auction and all the other events in the world could fair well for gold.

It is very quiet on the forum tonight.

We await tomorrow outcome!

Slingshot----------------------------<> CABEL

Cavan ManUS Equities/USD#7108503/04/02; 19:42:52

No one has commented yet upon the fall of the dollar today relative to the rise in US markets the today and yesterday.
There is a definite disconnect between the economy and the stock market. I do see the economy improving slowly and in small ways. I work in the streets of the USA. I do see it everywhere. However, this improvement is completely contrived by credit expansion; it is not lead by savings. I think the worst is yet to come for US markets. DOW:6000/NDQ:1000. Place your bets.

THX-1138Land Patents#7108603/04/02; 20:31:42

There have been some postings over at the other forum that have gotten me interested in Land Patents.

Has anyone ever gotten one?

Can you get one for gold mines, or mining claims?

sectorMarket Surge...Dollar Slip...It's "Nuttin Honey"#7108703/04/02; 20:41:25

The Japanese are pumping billions of yen into their market and the shorts are covering their over extended positions so we se an "Asian Rally". The rest of the hammered investor world sees this as their salvation and jumps on...lemming-like.

The dollar's drop is well within the control range and just doesn't matter any more. There are too many ways to manipulate the dollar. For example suppose that one wants to dissuade the Japanese from selling their treasuries. Well, just your SECTREAS get on a plane and tell them their coupons just went up 3%...5%...or n% so long as they DON'T sell the treasuries. Finance this by expanding the repos pool a little. Who's counting anyway?

The ball to watch is [For tomorrow at least] is the subscription for the BOE gold auction] and the countdown to the Y2K-like Japanese savings insurance cap.

To the uninitiated, this cap seems like reasonable banking prudence. However, it really is an attempt to bail out the insolvent banks by "accessing" the $620 Billion in uninsured deposits.

The government just "Nationalizes" the banks and all is well. Just like that... ten years of dull performing financials are, poof, erased. Replaced with freshly minted, vibrant banks.

Of course the uninsured portion of the elderly Japanese people will not be "Transferred" to the "Nationalized" banks...because, well, it wasn't insured...was it. One can bet the Western financial press will not cover this event any more than they have covered the almost 100% effective tax revolt in Argentina.

If this draconian scenario happens, the Law of Unintended Consequences will take over. The remaining "insured" savings of $620 Billion will be "transferred" to gold yielding a demand of 45, 000 tonnes...50 times the WGC's last year posted world demand.

Mrs. Watanabe has Mr. Koizumi and Mr. Greenspan by the balls.

R PowellAnother use for silver#7108803/04/02; 20:45:37

"If silver were to replace the arsenic in these wood products, about 80 million ounces would be consumed in the United States, based on the 1997 production figures. An additional 50 million ounces would be consumed in other countries. If other preservatives (such as creosote) were to be banned- several European countries are considering such a ban- even more silver would be consumed."
This would roughly double the world yearly deficit. Can any of our European friends confirm or deny that non-toxic preservatives are being sought? The article also mentions marine paint and preservatives for aquatic use.

axWhy Not a Direct Placement of Gold from German CB to other CB? #7108903/04/02; 20:53:40

Ken Gooding of Mining Web observes correctly that there could be something odd about
the German Bundesbank announcement. If:

a. The Germans really wanted to use the proceeds of a gold sale to improve their

it follows that

b. they would wish to maximize their profits on such a
sale, so

c. Why talk about it in advance?

d. Why even think about selling it on the open market?

e. Why not arrange a private placement of so many tons of gold
bullion with the central banks of Japan, China, Russia or any
other country which reportedly wishes to raise their gold
reserves and should be eager buyers?

R PowellCavan Man#7109003/04/02; 20:55:48

Instead of guessing how low the Dow can go, how about when the Dow index number = POG.
Have you seen the Schwab analyst calming investors on the TV ad?
" Yes, we're all a bit nervous. But, with a little Dow down, some dollar depreciation $3000/ounce gold, a few $200 silver coins and some throw-the-dart method chosen bonds, we'll all get through this difficult time. After all, we're in this for the long term!"
I paraphrased this a little.
The coming rise in metals prices will require patience before profits. Are we in for the long term, yes?

Mr GreshamPostive gold story at MSN Money#7109103/04/02; 21:07:55

Has somebody slipped something into the punch? These media guys are starting to sound positive, positive, positive. Do they know this is the kiss of death for JPM & USD, or has it been decided to let POG loose and sauve qui peut?

This guy is saying much of what we have said for several years (except confuses unhedged with "unleveraged") only we were just early, early, early. Don't ya hate it when ya do that? Oh well, we need others to make a party, apparently.

Of course, these press guys wouldn't be doing their jobs if they hadn't quietly been searching out a few sites like this and trying to read up a little background. Never letting on where they got it. But this guy utters not one of the derogatory insults we're used to.

I guess I had sort of been thinking from the FOA scenarios that the paper markets might melt without a prior positive peep in the press, but it looks like there is a growing momentum swing ahead. That oughta finish 'em for good, and, if FOA has been correct, before too many can get on board. Of course they will first think "Stocks, stocks, stocks", so let's see where they end up?

PizzR Powell - Cavan Man#7109203/04/02; 21:21:04

Rich - Hopefully not to start another AU/AG debate (smile), I haven't seen anyone mention for a while the fact that it's pretty hard to start and maintain an extended war without a stockpile of silver. We've sold ours, have we not?

I'm still playing a bit of paper, and the leverage appears to be in silver right now, technically and fundamentally.

Any thoughts???

Cavan Man - If the world starts to get a bit nervous about US debt (i.e. Japanese Bank liquidation of assets for liquidity) where are a few trillion dollars to go? US stocks will get their fair share since they are a weak asset play, but one of the larger markets. Dollars have to go somewhere. The banks can defer interest and debt payment for corporations for a long time.

I agree with Black Blade that there is no turn around in sight for the economy, but if the US dollar really starts to weaken, stocks will probably go thru the roof to new alltime highs. And since most people and the media look, see, feel, touch, and talk stocks, everyone will think a new bull market is in the works, when in fact the sky will be starting to fall. Could be the biggest blow off in history. We shall see, right now the shorts are running for cover. Volitility and knee jerk reactions are probably going to be the pattern for a while.

Just a few thoughts (worded poorly too),


WaveriderTHX-1138#7109303/04/02; 21:42:31

I obtained a US patent in 1998, and world rights (Patent Cooperation Treaty, Geneva) in 2000, (utility patents for a medical device) but have never come across Land Patents. As far as I am aware there are only three types of patents in the US - utility, design, and plants. Patent rights exclude others from manufacturing, using, or selling any of the numerous claims of inventiveness/originality identified in the patent within the jurisdiction of the patent. It seems odd to me then, that land, gold mines or mining claims could be patented. Unless, of course, land patents refer to exclusive rights outside of traditional patent definitions. Maybe others have more insight...Cheers,

Black BladeWaste Management to Cut 2,000 Jobs#7109403/04/02; 21:49:54

Waste Management to Cut 2,000 Jobs in Restructuring


HOUSTON (AP) -- Waste Management Inc. (NYSE:WMI) said Monday it will eliminate 2,000 jobs, including one layer of management, as part of a restructured business plan that aligns its collection, transport, recycling and disposal resources with market areas.

Black Blade: More "Bones" shuffle off to the growing "Bone Pile".

Black BladeAnalyst Fired Over Enron Sell Advice#7109503/04/02; 21:59:52

Analyst for Houston Office of UBS Says Was Fired for Telling Clients to Sell Enron Stock


HOUSTON (AP) -- A financial adviser for the Houston office of UBS PaineWebber believes he was fired last summer because he told clients to sell their Enron Corp. stock. "Enron management was not pleased and due to the employee stock option relationship UBS PaineWebber has with them, the pressure came from my corporate office to the branch level (Houston) to dismiss me," Wu wrote in the filing to the association, a securities industry self-regulatory organization.

"I told the truth to my clients," he added. Wu, who had been with UBS PaineWebber for about two years, was fired the same day he sent the warning to his clients. David Walker, a spokesman for UBS PaineWebber, confirmed late Monday Wu was fired for sending the e-mails.

Black Blade: Fired for doing his job correctly. It goes to show how ethical UBS Paine Webber is. Their way of saying "screw the shareholders".

Black BladeSwiss Seer Ends His Silence, But With No Welcome Tidings #7109603/04/02; 22:33:19


I think we are in a structural bear market that will last for five to 10 years. It is not a nice picture. But it will not go straight down. From time to time there will be fiscal and monetary stimulus. Markets will get oversold and will rise for awhile. Markets will zigzag downward. It will not be over until stocks trade at attractive valuation levels.

Black Blade: I agree. He makes several good points.

Black BladeCan't trust Wall Street, says Main St.#7109703/04/02; 22:46:57

Investors question analysts, expensive stocks


On gold ...

"I sold all my bond holdings . . . and put some more money in gold stocks. Why not? (See related story.) It appears you can't trust corporate managements, the auditors, or the Wall Street analysts. If Japan's economy falls into a black hole, U.S. investors will definitely feel it. Our president has a cavalier attitude about deficit-government spending that rivals Lyndon Johnson's. Given the current environment, I'll pass on dollar-denominated financial assets." -- Steve Westling, Atlanta

On mutual funds ...

"Mutual fund managers are sitting on billions of assets that are under-performing, some for three years and running. Yet they pull down millions in operating expenses and do so on a daily basis. The massive amount of money tied up in American's retirement accounts, mutual funds, is like a time bomb ready to go off. We can't expect the government to do anything to save this money even if they knew; e.g., Enron shareholders (ENRNQ) lose all their money in a company stock going bankrupt. Why not have the mutual fund managers work for the cities and have those millions go to the taxpayers instead of investment folks, who at the moment, don't seem to be doing much for the public except causing us discomfort and pain?" -- Rob Foley, Norwalk, Conn.

Black Blade: So who is doing all the buying on Wall Street? Hmmm… Meanwhile, the crowds rush to and fro looking for safe havens. With the surge on Wall Street I wonder if many will be convinced to jump in as "the water's fine".

El GringoMachu Picchu Vision#7109803/04/02; 23:21:29

Last May in Machu Picchu I had a vision that gold would hit US$370 by May 2002. I really must stop smoking that stuff.
Henry BowmanTHX-1138: Land Patents#7109903/04/02; 23:47:37

I went to the trouble of obtaining the land patent on my property in Oregon. I'm not sure having the patent does a lot of good without going through the laborious process of "perfecting" it. Even then, I've seen local judges just ignore it. You might be able to win your case if you had the time and money to fight it through the system.

For information: Most of the land in the US was originally granted by the gov't to its original owner via a land patent, or, as is the case throughout much of the West, granted by treaty. (For example, most California land originally passed by the Treaty of Guadelupe Hidalgo.)

You can obtain a certified copy of the patent on your land through the National Archives. In the patent the land is granted to the original owner and his "successors and assigns" forever. The idea is that you declare yourself to be one of those "successors and assigns" and build a body of circumstancial evidence supporting your claim. Then, your claim on the land supposedly pre-dates all local ordinances, EPA regulations, state and local tax laws, etc.

Theoretically, the gov't obtains jurisdiction over your land only through someone in the chain of owners having previously agreed to said jurisdiction. (My land is part of the Rogue Valley Wilderness Preserve because somebody back around 1950 sold an easement to the gov't. All owners since then are bound by that easement.)

By establishing yourself as the successor to the original patentee, you invalidate (theoretically) all those other restrictions. The legal theory seems sound. But the problem is no gov't agency is going to honor your patent without a fight.

Brett WoodsFlash Back#7110003/04/02; 23:50:07

Statement by the President of the United States
IMMEDIATE RELEASE -- August 6, 1945

Sixteen hours ago an American airplane dropped one bomb on Hiroshima, an important Japanese Army base. That bomb had more power than 20,000 tons of T.N.T. It had more than two thousand times the blast power of the British "Grand Slam" which is the largest bomb ever yet used in the history of warfare.

The Japanese began the war from the air at Pearl Harbor. They have been repaid many fold. And the end is not yet. With this bomb we have now added a new and revolutionary increase in destruction to supplement the growing power of our armed forces. In their present form these bombs are now in production and even more powerful forms are in development.

It is an atomic bomb. It is a harnessing of the basic power of the universe. The force from which the sun draws its power has been loosed against those who brought war to the Far East.

Before 1939, it was the accepted belief of scientists that it was theoretically possible to release atomic energy. But no one knew any practical method of doing it. By 1942, however, we knew that the Germans were working feverishly to find a way to add atomic energy to the other engines of war with which they hoped to enslave the world. But they failed. We may be grateful to Providence that the Germans got the V-1's and the V-2's late and in limited quantities and even more grateful that they did not get the atomic bomb at all.

The battle of the laboratories held fateful risks for us as well as the battles of the air, land, and sea, and we have now won the battle of the laboratories as we have won the other battles.

Beginning in 1940, before Pearl Harbor, scientific knowledge useful in war was pooled between the United States and Great Britain, and many priceless helps to our victories have come from that arrangement. Under that general policy the research on the atomic bomb was begun. With American and British scientists working together we entered the race of discovery against the Germans.

The United States had available the large number of scientists of distinction in the many needed areas of knowledge. It had the tremendous industrial and financial resources necessary for the project and they could be devoted to it without undue impairment of other vital war work. In the United States the laboratory work and the production plants, on which a substantial start had already been made, would be out of reach of enemy bombing, while at that time Britain was exposed to constant air attack and was still threatened with the possibility of invasion. For these reasons Prime Minister Churchill and President Roosevelt agreed that it was wise to carry on the project here. We now have two great plants and many lesser works devoted to the production of atomic power. Employment during peak construction numbered 125,000 and over 65,000 individuals are even now engaged in operating the plants. Many have worked there for two and a half years. Few know what they have been producing. They see great quantities of material going in and they see nothing coming out of those plants, for the physical size of the explosive charge is exceedingly small. We have spent two billion dollars on the greatest scientific gamble in history - and won.

But the greatest marvel is not the size of the enterprise, its secrecy, nor its cost, but the achievement of scientific brains in putting together infinitely complex pieces of knowledge held by many men in different fields of science into a workable plan. And hardly less marvelous has been the capacity of industry to design, and of labor to operate, the machines and methods to do things never done before so that the brain child of many minds came forth in physical shape and performed as it was supposed to do. Both science and industry worked under the direction of the United States Army, which achieved a unique success in managing so diverse a problem in the advancement of knowledge in an amazingly short time. It is doubtful if such another combination could be got together in the world. What has been done is the greatest achievement of organized science in history. It was done under high pressure and without failure.

We are now prepared to obliterate more rapidly and completely every productive enterprise the Japanese have above ground in any city. We shall destroy their docks, their factories, and their communications. Let there be no mistake; we shall completely destroy Japan's power to make war.

It was to spare the Japanese people from utter destruction that the ultimatum of July 26 was issued at Potsdam. Their leaders promptly rejected that ultimatum. If they do not now accept our terms they may expect a rain of ruin from the air, the like of which has never been seen on this earth. Behind this air attack will follow sea and land forces in such numbers and power as they have not yet seen and with the fighting skill of which they are already well aware.

The Secretary of War, who has kept in personal touch with all phases of the project, will immediately make public a statement giving further details.

His statement will give facts concerning the sites at Oak Ridge near Knoxville, Tennessee, and at Richland near Pasco, Washington, and an installation near Santa Fe, New Mexico. Although the workers at the sites have been making materials to be used in producing the greatest destructive force in history they have not themselves been in danger beyond that of many other occupations, for the utmost care has been taken of their safety.

The fact that we can release atomic energy ushers in a new era in man's understanding of nature's forces. Atomic energy may in the future supplement the power that now comes from coal, oil, and falling water, but at present it cannot be produced on a basis to compete with them commercially. Before that comes there must be a long period of intensive research.

It has never been the habit of the scientists of this country or the policy of this Government to withhold from the world scientific knowledge. Normally, therefore, everything about the work with atomic energy would be made public.

But under present circumstances it is not intended to divulge the technical processes of production or all the military applications, pending further examination of possible methods of protecting us and the rest of the world from the danger of sudden destruction.

I shall recommend that the Congress of the United States consider promptly the establishment of an appropriate commission to control the production and use of atomic power within the United States. I shall give further consideration and make further recommendations to the Congress as to how atomic power can become a powerful and forceful influence towards the maintenance of world peace.

Simply MeGold, Macro-Economics and Non-cooperative Game Theory#7110103/05/02; 01:06:18

Recently saw the movie "Beautiful Mind" about one of the founding fathers of modern game theory, Robert Nash. (If you find the movie inspiring, I would advise against spoiling it by looking up the man's real life story.) I knew from the start that he had shared a Nobel Prize.
What surprised the heck out of me was that the prize was in the field of economics!

Try researching Game Theory on the internet and most of what you'll find will be practically unintelligible unless you are a mathemetician.
BUT...try the link above for a plain English introduction.

How does Game Theory relate to gold? Gold is both political and economical. Game theory is being used in both arenas. It is being used to govern decision making in relationships maintained by various mining and investment companies, banks, and governments to gold.

I admit to only a very rudimentary understanding of the subject, but it looks to me like the forces that command gold have been in a Nash Equilibrium from '96. It's the mid-stage of a game where all the players have found a strategy that works well against all the other strategies being played. It works well enough for awhile, as everyone profits a little. But to really WIN the game, someone has to break equilibrium and take the big risk for the big gain.

In May of 2001, I think Greenspan signaled the beginning of the end-game when he lowered dollar interest to nearly match gold interest.

Maybe Greenspan's real name is "Magister Ludi" the Master of the Glass Bead Game (novel by Herman Hesse). I wouldn't be surprised if the mathemetician who gave me that book, about twenty years ago in Huntsville, AL, reads this forum. I think he knew, because he asked me to answer only one question, "What is the glass bead game?"

What do you think?

On the gold trail, looking for sign posts.

Mr GreshamSimply Me, El Gringo, Pizz#7110203/05/02; 01:51:44

Simply Me -- das Glasperlenspiel -- ah yes. Long ago, but it wasn't at Morbio Gorge, was it? No, I'll have to remember better before I see if I've been involved in a more complex game than I thought.

El Gringo -- I had a Machu Picchu dream, too, long ago -- didn't have any gold info in it, but, as I flew over it, a deep, almost thundering voice said "Now do you know why I built this place?"

Pizz -- Why does USD weakening promote a stock rally -- thought it was the other way? I can see it getting a boost from Japan flight capital, but weak dollar would give Europeans the jitters, no?

Simply Me(No Subject)#7110303/05/02; 03:15:48

Never been to Morbio Gorge, Mr. Gresham. Relax.
Simply ;)

TownCrierPuplava's 'Death of (Economic) Literacy'#7110403/05/02; 04:01:01

-------...lack of qualitative thinking is most evident in the world of politics and economics. What passes for understanding is strewn with emotion rather than reason. Without the ability to reason, and with only emotions as our guide, any understanding of economic or current affairs is devoid of meaningful analysis.

This is no more evident than the current discussion and debate within the financial markets. The late 60's and the decade of the 70's were a long period of rising inflation triggered by the U.S. abandoning backing the dollar with gold. After the U.S. went off a gold-backed dollar system, the Fed was free to print money at will, and it did. Inflation levels rose and the price of most commodities also rose to reflect the decline in purchasing power of the dollar. During this inflationary era, ordinary citizens and investors lost all confidence in the dollar. Instead, people put their money into hard goods.------------

---------In the last two decades whenever there was a crisis, the financial world clamored for even more money creation. Wall Street never questioned it. Rather, they encouraged it. On Wall Street there was a new love affair with money creation. Analysts and economists on The Street knew that in any crisis the Fed could be counted on to flood the financial system with liquidity and most of that money was injected into the financial markets.

A new crisis meant more money and higher stock prices. Everyone was happy with the arrangement. Politicians loved it because it made them look good when the economy and financial markets prospered. Wall Street loved it because rising markets meant more business through stock and debt underwritings and stock commissions. Most investors loved it because they saw their net worth enlarged without saving.----------

----------When central banks create money, they oftentimes can't control where it goes. In the 1970's the money went into things. In the 1980's, 1990's and our current decade, it went into paper. Inflation has two outlets. It can manifest in higher prices of goods and services or in higher prices of paper assets. They are one and the same. The only difference today is that we no longer call it inflationary. It is known as "investment return." If stocks go up 20% for five years in a row, it is called a new era or new paradigm. If real estate prices rise 20% a year, it is called a boom. The very fact that few question the inflationary implications of these two phenomenons is another example of the lack of economic literacy.--------------

----------There was only one problem with this whole scheme. Each new crisis required even greater amounts of money to quell it. Eventually, there would come a day when it would no longer be possible to keep inflating without adverse consequences........seen erupting in Argentina, Venezuela, and in Japan.-------------

(click URL above for full report)

Diversification into gold bolsters your portfolio against the diminished purchasing power of your local money and against other financial losses associated with these inevitable "consequences" of inflationary policy.


Cavan ManTownCrier#7110503/05/02; 04:02:09

When are the BOE auction results released?
TownCrierCavan Man, Announcements#7110603/05/02; 04:32:48

If all goes well and without unforseen difficulties, the auction results are to be announced within 45 minutes of the 11:30 a.m. (London time) close of bidding.

Simply adjust 12:15 p.m. Greenwich in accordance with your local time zone.


sstinsBOE Auction#7110703/05/02; 06:00:36

News Release -
HM Government Gold Auction Result: 5 March 2002

5 March 2002

The Bank of England announces that the gold on offer (approximately 20 tonnes or 643,200 ounces) has been allotted in full at a price of $296.50 per ounce. Details of the result are as follows:

Amount of gold on offer (approx.) 643,200 oz
Amount applied for 2,408,800 oz
Times covered 3.7 times
Amount allotted to bidders 644,400 oz
Allotment price $296.50
Scaling factor at allotment price 0.8197 %

All accepted bids which were made at prices above the allotment price have been allotted in full at the allotment price. Valid bids made at the allotment price have been allotted an amount of gold equal to the amount bid for multiplied by the above scaling factor and rounded up to the nearest 400 ounces.

By close of business in London today, applicants whose bids have been successful in whole or in part will be notified by the Bank of England of the exact weight of the gold bars allotted to them and the amount payable in respect of their purchase. Payment must be made in US dollars to the Bank of England's account at the Federal Reserve Bank of New York, no later than 12 noon New York time on 7 March 2002.

Note for Editors

On 7 March 2001, H M Treasury announced that the Bank of England, on behalf of H M Treasury, would sell approximately 120 tonnes of gold in a programme of six auctions of around 20 tonnes each in the financial year 2001/02 on the terms and conditions set out in an Information Memorandum that was published on 7 March 2001. This is the final auction in the programme of six and brings to an end the programme to restructure the United Kingdom's official reserves that was announced by HM Treasury on 7 May 1999.

uponroofThe argument for diversification .....buying physical#7110803/05/02; 06:11:35

It appears South Africa's other 'Durban Gold' product, which is a crop, is finding it's way to DRD board rooms. 'Disconnected' is not nearly strong enough when discribing Mr. Kebble. W.W. is nothing less than a miracle man to shareholders, and Kebble thinks he can pull this off?

The South African government is also hitting the bong it would seem as they 'just don't get it'. Someone has to be rewarded for business risk and fortune. W.W. deserves every penny for the job he's done. Watch out for the fires of socialism being stoked on this one thanks to Mr. Kebble's attacks on W.W.

Durban is a poster child for whatever could possibly go wrong in the mining industry....earthquake next?

nickel62Bristish Auctions....Pretty good bang for the cabal's buck!#7110903/05/02; 06:26:13

They successfully kept the gold price capped for almost three years with what around 600 tonnes of gold. They might have disenfranchised the British public of their gold but they must have made a bloody killing for the gold carry trade. Who is next in line? Will it work this time with the number of new acquirers of gold in the world growing exponentially? The 600 tonne question.
Black BladeSouth African gold output falls sharply#7111003/05/02; 06:42:57


Gold production is down more than 8% South African production of gold slipped by more than 8% in 2001, the Chamber of Mines of South Africa has reported. Gold output slipped to 393,254 kilogrammes - its lowest level since 1953 - from 427,981 kg in 2000.

Black Blade: Lower Gold supply coming to market. Add to this scenario that Gold exploration is almost nonexistent and that it takes years to bring a mine into production. In many cases mines will never be brought into production due to unfriendly business environments (i.e. TVX in Greece).

nickel62I just got work that Dayton Mining is merging with Global Pacific#7111103/05/02; 06:48:11

This is not, I repeat not an endorsement of either stock! I am just curious if anyone is familar with Global Pacific. I know the Dayton situation pretty well. I am a long suffering shareholder and would appreciate any insite into the properties of character of the Global Pacific company. THanks in advance.
nickel62SOrry about the misspellings..#7111203/05/02; 06:49:45

That should be " I just got word of the merger" and I would like information about the character of the various managers of Global Pacific.
Black BladeGold price rally 'likely to be short'#7111303/05/02; 06:51:17


SYDNEY, Australia (CNN) -- Gold's two-year high of $300 an ounce reached in early February is unlikely to be sustained, according to commodity analyst Poppy Liatis of Nomura Australia.

Black Blade: I smell fear among the anti-Gold ranks. Meanwhile, Gold looks like it could move higher today now that the BoE Gold giveaway program has ended. Look for a "full court press" by the media to quash any higher POG moves. Actually, the POG is rising a bit now. Hmmm...

Black BladeAll That Glitters is Not Gold - JP Morgan Chase I Too Deep?#7111403/05/02; 07:09:20


In recent years Morgan Chase has invested much of its capital in derivatives, including gold and interest-rate derivatives, about which very little information is provided to shareholders. Among the information that has been made available, however, is that as of June 2000, J.P. Morgan reported nearly $30 billion of gold derivatives and Chase Manhattan Corp., although merged with J.P. Morgan, still reported separately in 2000 that it had $35 billion in gold derivatives. Analysts agree that the derivatives have exploded at this bank and that both positions are enormous relative to the capital of the bank and the size of the gold market.

It gets worse. J.P. Morgan's total derivatives position reportedly now stands at nearly $29 trillion, or three times the U.S. annual gross domestic product.

Wall Street insiders speculate that if the gold market were to rise Morgan Chase could be in serious financial difficulty because of its "short positions" in gold. In other words, if the price of gold were to increase substantially, Morgan Chase and other bullion banks that are highly leveraged in gold would have trouble covering their liabilities. One financial analyst, who asked not to be identified, explained the situation this way: "Gold is borrowed by Morgan Chase from the Bank of England at 1 percent interest and then Morgan Chase sells the gold on the open market, then reinvests the proceeds into interest bearing vehicles at maybe 6 percent. At some point, though, Morgan Chase must return the borrowed gold to the Bank of England, and if the price of gold were significantly to increase during any point in this process, it would make it prohibitive and potentially ruinous to repay the gold."

Robert Maltbie, chief executive officer of and an independent analyst, long has followed Morgan Chase. He tells INSIGHT that "there are a lot of things going on in these companies, but we don't know for sure because much of what they're doing is off the balance sheet. The market is scared and crying out to see what's under the hood. Like Enron, much of what the banks are doing is off the balance sheet, and it's a time bomb ticking as we speak."

Just what would happen if a bank the size of Morgan Chase were unable to meet its financial obligations? "It's tough to go there," Maltbie says, "because it could shake the financial markets to the core."

Black Blade: I suspect that JPMC could "Ashanti" all over the market if the POG rises. JPMC has many problems lately from Enron, Global Crossing to the blow up on loans to Argentina. Interesting article during "Interesting Times".

uponroofnickel62 .... BoE#7111503/05/02; 07:09:52

You're absolutely right. We can take pleasure in the media reports regarding 'lost' value at the hands of the gold auction, but in fact, the 600 tonne sale reaped gold carry trade profits to compensate well over the losses through rising POG movement.

The cartel, however, are not able to publicly argue this point, who in by doing so would then be admitting guilt in their illegal transactions.

So enjoy the heat they take in the press and their inability to rebut with underlying, ill gotten, profitable gains....which are destined to be temporary anyway once PoG moves ahead with a vengance.

Perhaps that is when the media reports on irresponsible management will finally be focused on the deeper issue of long running cartel manipulation, not these's superficial misleading reports of bank/country losses through sale value misadventures.

Eddie's 'abyss' is always going to be there and it's something every single inhabitant of the planet should be concerned about. It's magnitude is serving as a diguise... too hard to grasp... but it's just a matter of time.

uponroofDisappointed ... ?#7111603/05/02; 07:40:47

Final BoE gold sale disappoints despite top price
By Adrian Dascalu

LONDON, March 5 (Reuters) - The Bank of England on Tuesday sold 20 tonnes of gold at its highest price yet, in the last auction of a three-year programme to more than halve the UK's gold reserves to 300 tonnes and modernise

The $296.50 per ounce award was the highest of the UK's 17 auctions and analysts said demand was a "reasonable" 3.7 times the amount on sale, but it disappointed those who had banked on a last-minute scramble to drive the gold
price back above $300.

Longer term, gold prices will draw little relief from the programme's end as other central banks line up to sell an asset no longer seen as a bulwark against financial turmoil. The UK is using the proceeds to stock up on
foreign currencies.

"It's an average have to measure it against expectations and some people were putting a (figure) three in front of the price," said Andy Smith, of Mitsui Precious Metals.

Spot gold (XAU-) was a touch higher immediately after the auction but eventually prices retraced and by 1328 GMT spot was indicated at $296.90/297.40, still up from Monday's New York close at 296.60/297.10.

Total gold sold through the BoE's series of 17 auctions since July 6, 1999, amounts to 395 tonnes, with revenues from the sales for the UK Treasury estimated at $3.3 billion.


Although the UK said its programme is at an end, other central banks are stepping up to sell their holdings as inflation, and the need to shield assets from it, fades.

Last month, Germany's Bundesbank, a previously committed hoarder of gold with reserves estimated at some 3,500 tonnes worth some $31 billion, said it did not rule out selling part of its gold for assets generating higher returns.

Under a five-year accord of 15 European central banks that expires in 2004, the Netherlands and Switzerland are already selling off their stores.

In a statement on Tuesday, the industry-funded World Gold Council (WGC) said the BoE's final gold sale "has again illustrated how misguided the policy is."

"If Britain still had that gold the nation would be more than 175 million pounds better off," the council's Chief Executive Haruko Fukuda said in a statement.

"The gold sales have also been quite costly in national terms because, after taking into account investment earnings on the receipts of sales re-invested in dollar, euro and yen securities, the net result of the gold sales overall has been a loss of about 175 million pounds ($248 million)," the WGC said.

The remaining 320 tonnes of gold in the reserves will be equivalent to only seven percent of gross reserves. "At this level the UK will have the lowest proportion of gold amongst the leading nations of the European Union," the
WGC said.

The previous auction on January 16 had the lowest number of bidders ever and was only covered 1.4 times, compared with a record eight times at the second auction back in September 1999.

The highest previous allotment price was $293.50 at the third auction in November 1999, while the lowest, at $283.50 an ounce, was at the January 16 auction this year.

At the end of the BOE sales, gold prices are just five percent higher than they were prior to the bank's 1999 announcement that it would start its sales programme, and for much of the period they have been lower.
uponroof- OK CB's... just sell everything... get it over with. If gold is so useless, SELL IT.

PizzMr Gresham#7111703/05/02; 07:52:26

Low dollar & Stock Rally

I'm still working on this in my head, but since we are going to have to finance a war in the midst of a depression, bonds have to go down and rates go up.

As bonds liquidate, the Fed must monetize them. I can't see banks/funds buying bonds into a down senario. The liquidity combined with our deficit dollars in circulation have to go somewhere.

I don't think this SM rally is demand driven, but dollar supply driven.

Our economy appears to have stabilzed somewhat also, call it the plateau of the first wave down. Now, corporations will start to raise prices - inflation. Chip prices have already turned. Oil is going up - more war related than recovery rated. More inflation.

I could be totally off base, and it could be just a seasonal fluke in the dollar. Only time will tell.

Off to the dentist. Maybe i'll get a better view under the nitrus - can't hurt!



WaveriderCanada Adds to Foreign Reserves in Feb, Sells Gold#7111803/05/02; 08:11:23

"Canadian foreign reserve holdings rose in February and the government sold 95,000 ounces of gold during the month, the Finance Department said on Tuesday.

Sales of 95,000 ounces of gold settled in February, leaving gold holdings at 1.0 million ounces on Feb. 28. The Canadian government, which had about 22 million ounces in 1979, has a policy of gradually selling off its gold reserves and replacing them with interest-bearing instruments."

Waverider: Canada was 22 million ounces better off in 1979 -what can I say without being rude...

CoBra(too).S. ISM's Non-Manufacturing Index Rises to 58.7 #7111903/05/02; 08:20:27

in February reports Bloomberg
By Monee Fields-White

Washington, March 5 (Bloomberg) -- The U.S. service economy expanded in February at the fastest pace in 15 months, according to an industry survey of executives, suggesting a recovery is under way.

The Institute for Supply Management's index of non- manufacturing business rose to 58.7 in February from 49.6 in January. A reading above 50 signals expansion.

``We are turning the corner,'' said Brian Wesbury, chief economist at Griffin, Kubik, Stephens and Thompson in Chicago, before the report. ``This is a sign the economy is expanding once again.''

Services companies, construction firms and other non- manufacturing businesses account for about four-fifths of the economy. The report, along with a February expansion in manufacturing for the first time in 19 months, adds to evidence the recession that began a year ago is over.

...cb2 - feels that four fifths of the US economy being in the service sector bodes well for servicing the surging debt. To add insult to Mr. Wesbury's above quote - debt is the only thing expanding in the US econmomy.

sourdoughJapanese organized crime#7112003/05/02; 08:21:51

Every once in a while someone does a story on how organized crime has managed to infiltrate into Japanese business.
Has anyone ever come across any $ figures for the amount of money they have under "their" control? Either through profits or persuasion?
One might wonder what demand they could bring to the gold market if they were to smell opportunity?
When all is said and done in Japan, it will be the same as everywhere else in the world. "HE WHO HAS THE GOLD, MAKES THE RULES".
Opportunity is knocking at their door. BUY OR DIE?

uponroofCanadian gold reserves#7112103/05/02; 08:36:49


Good thing their hockey teams brought home the gold. That just increased the national holdings by 12%....Just kidding.

Canada has a whopping 32 tonnes left. That's just ahead of Bangaladesh....Just kidding....I think

Perhaps they are confident in public lands holding reserves? If it comes to desparate measures could they build nationally run mines on public land?


GoldnSilver200220 TONNES OF GOLD,burp a nice lite snack!!#7112203/05/02; 08:42:15

Personally,i saw golds move through the boe auction price as a great sign!Let the central banks line up,20 tonnes wont do it anymore!We still have april 1st lifting of bank deposit insurance in japan,JPM chase settling of derivatives march 31st'spring campaign in iraq?(higher oil prices),lifting of interest rates and the chinese gold exchange's opening to look forward too.All the cartel can do is the odd newspaper article no one is reading anyhow.Gold has no where to go but up and those banks better line up and sell cause demand is growing but supply is shrinking.Dont look now but here comes golds friend..INFLATION!
USAGOLDUponroof. . .ALL#7112303/05/02; 09:03:24

That article (in your #71116) is pure propaganda. Anytime you see a flat statement made to look like a fact when its someone's opinion you can bet you are reading something cooked up by our financially correct commissars in London or New York.

I am referring to this forlorn lament thrown into the wind of the current economic tumult:

"Longer term, gold prices will draw little relief from the programme's end as other central banks line up to sell an asset no longer seen as a bulwark against financial turmoil. The UK is using the proceeds to stock up on foreign currencies."

1. With respect to central banks 'lin[ing] up to sell', there is the failure to mention that other central banks will be lining up to buy. Over the past years, despite all the rhetoric (and it hasn't changed much in terms of tone and content over that entire period from the quote above) -- all the announcements, threats of sales and actual sales -- the central bank have been relieved of only 3000 tonnes of their 'onerous' burden. That amounts to 60 tonnes a year -- a small star in the golden galaxy. All the foregoing assumes of course we will leave the course set down by the Washington Agreement -- an unlikely event since the WA was advanced for very good reasons by the central banks themselves (most of which had to do with regulating the proliferation of fractional reserve gold lending.)

2. With respect to 'an asset no longer seen as a bulwark against financial turmoil,' tell that to Alan Greenspan who repeatedly has stated that gold is precisely what this propagandist says it isn't -- a safe haven and bulwark against financial turmoil. Also tell that to the ECB which made it a point to include gold in its reserves as bulwark against financial turmoil including an attack on its currency. Tell it to the people of the United States, Europe, Japan, China and India who in the face of the building economic maelstrom have initiated record worldwide demand for gold.

3. So far the UK's 'stocking up on foreign currencies' supposedly for the sake of a better return has been a disaster for which Parliament ought to call Eddie George and Gordon Brown on the carpet. Leaving aside that these 'policy-makers' (we won't make the mistake of categorizing them as 'statesmen') have set Britain back decades in its attempt to retake solid ground in the world economic sweepstakes. Much of what Margaret Thatcher accomplished in rebuilding the UK among the nations has been cast overboard. Messrs. George and Brown should recall that Britain's rapid fall from the top was led by the pound sterling descending the depths of hell. Do Messrs. George and Brown really believe that tying the fortunes of the pound to the dollar, euro and (God forbid) the yen and abandoning gold the best policy?

Of course the propaganda serves its purpose with the unsuspecting public which takes much of what they read from the wire services as gospel. For those looking to gain a better understanding of the new post-Enron real world, however, articles like this need to be understood for what they are: Leftist propaganda designed to keep citizens savings 100% in dubious currencies that can only be defended by manipulation of public opinion. When that breaks down look out for tighter sanctions similar to what occurred in Argentina. If fiat currencies were inherently strong, the propaganda would be unnecessary. They wouldn't have to worry about a flight to gold. But fiat currencies are indeed experimental and they are are precisely the opposite -- they are inherently weak. They, therefore, need to be defended at every turn.

For reasons I have never been able to fathom, those responsible for these propagada binges cannot even sanction a modest diversification into gold (as we recommend here) for portfolio insurance purposes. Why is their fear so great?? That is the question every well-heeled investor must contemplate thoroughly, for it is there that they will find at the core what's wrong with the current economic system. These same 'advisors' would have you put all your money in stocks and bonds -- no matter how dubious the value of both the stocks themselves or the currency in which they are denominated. The gold industry on the other hand has been very moderate in its advice and a haven of sorts itself as the Wall Street mess unfolds daily on our TV screens. None of us will tell you to put all your money in gold, but we will tell you given the circumstances that a prudent diversification into yellow gold isn't going to hurt you.

WaveriderWellesley-Wood survives coup attempt#7112403/05/02; 09:09:01

"Mark Wellesley-Wood confirmed he would remain chief executive and chairman of Durban Roodepoort Deep [NASDAQ:DROOY] following a bungled attempt to remove him from the board today. Grant Fischer, non-executive director of Durban Roodepoort Deep (DRD) and a director of Roger Kebble's Rand Leases, had compiled a memorandum, approved by his legal team, recommending why Wellesley-Wood was contravening the law by remaining as chairman, and that he should be removed.

On Monday, Fischer called for an urgent board meeting in which he planned to submit papers from Home Affairs spelling out Wellesley-Wood's South African residency problems. In essence, the memorandum said that since Wellesley-Wood was in violation of South African residency regulations he should be removed as chairman and replaced by another. Pending Wellesley-Wood's efforts to return to South Africa, his position could be reviewed within three months, the memorandum said.

Instead Fischer did not call for the removal of his chairman; in fact, Wellesley-Wood received the unanimous support of his board including that of Roger Kebble whose executive duties were suspended by Wellesley-Wood yesterday. Fischer was also censured by the board for not following the correct procedures. For instance, DRD did not have copies of papers of correspondence with Home Affairs held by Fischer and which were used by him to motivate for the resignation of Wellesley-Wood."

Waverider: What a saga! I'm anticipating WW will be back in SA by the end of the week, if not before. Uponroof/Belgian -great argument for buying physical only, but so far I've held on for the ride. BTW Belgian, I'm in Europe this summer - if I lose on DROOY, lunch is on me! Cheers, gotta run, a great day to All!

USAGOLDWhoops . . . .#7112503/05/02; 09:17:52

Number 1. second sentence should read:

"Over the past 50 years. . . . ..etc"

Doesn't make much sense without it.

goldquestNew Ideas for Reducing Poverty#7112603/05/02; 09:25:29

Do you suppose gold will be mentioned as a solution?
goldquestcorrection#7112703/05/02; 09:30:59

Hope this one works
KnallgoldPOG in freefall?#7112803/05/02; 10:54:53

Greetings from FOA/A? Once the physical support is removed from the paperarena,Comex/LBMA to collapse on its own weight,you know,paper does not carry that much weight...

Maybe the Swiss are selling into the NPGM already?Announcement imminent?

escapethematrixJ.P. Morgan Loses Bid to Force Payments Over Mahonia #7112903/05/02; 11:10:29


U.S. District Judge Jed Rakoff sided with Citigroup Inc.'s Travelers Property Casualty, Safeco Corp., Liberty Mutual Insurance, St. Paul Cos. and other insurance companies today. The insurers had challenged contracts between Enron and Mahonia Ltd., an affiliate of the second-largest U.S. bank.

Rakoff said the insurers had presented enough evidence that the bonds ``WERE THE PRODUCT'' OF FRAUD BY J.P. MORGAN for him to deny the bank's bid for immediate payment.

Things aren't looking too good for our friends at JPM......
I hope that ANOTHER certain judge in Boston Federal Court takes note:).

uponroofBuba further denies intentions to sell gold.... #7113003/05/02; 11:53:18

This reinteration is necessary since the first indication of possible sales has stirred up those never dying freeloaders always on the lookout for government relief.

Now these socialists are seeing gold sales as a way to pay for their programs and are talking about it in the media....hence the further denial of sales by Buba.

Perhaps the debate is helping to bring PoG down today?

BelgianLet's KIS...Keep - It - Simple !#7113103/05/02; 11:57:34

This totally ABSURD stockmarket (US+Japan) rise, is plain evidence of Worthless-Debt-Dollar deluge ! Bush and Koizumi just agreed on using this paper-blowing in mutual interest.
Dow and Nikkei uber alles (above everything). Read K.Richebacher on debt (GE-example) and the conversation between FOA and Auspec on the US$ (archives-2001)!

How long will it take before another negative Gold-sale story (!) will pop up to replace the noisy UK (virtual) sales ? Shall we hire A.Smith with another POG=100$ campaign ? Or will cheaper, available, Physical (or guaranteed contracts), bring POO down ?

Remember that the US$ must destroy "itself", so no one can be blamed (fingerpointed) for it ! Euroland must be "sure" that the inevitable debtdollar flight is into the gold- euro (shaping the bonzai).

Palestinians are still building on a "provocative" pressure (atrocities)! Don't expect this to fade out in time.

Watch if LBMA volume picks up with rising interest rates, pointing to renewed carry trade with less and less Physical available with lower and lower paper-POG prices !?
(Waverider : misery scenario for your Drooy = 1 Belgian Beer for me :-)) Also note some (temporary) strengthening of Rand/Aus$ = less profitable underground gold = less available Physical = no exploration = more (renewed) hedging !?

uponroofRoss Norman from 'thebulliondesk'#7113203/05/02; 12:01:44

"...I think this whole exercise has been thoroughly misguided. As a result of it we estimate the Exchequer is $280 million poorer on the face it -- enough to buy a couple of hospitals. On economic grounds I don't think you can provide a strong case for moving out of gold and into currencies like the yen and the euro, both of which have depreciated, and the dollar, which provides a negative real interest rate. Against an asset which has appreciated over the period of time by 15 percent and does provide an interest rate over and above that.''

On central bank sales:

``There are central banks that want to leave and they're trying to form an orderly queue. I think these chaps are behind the times. Yes they've seen the gold market in a 22-year decline, but I don't think they're fully aware of the blueprint which the producers have to make gold significantly different..."

Belgian@ Uponroof#7113303/05/02; 12:26:51

Euroland monetary-affairs are NOT in the hands of the "left" but the "center-right" ! Socialist's have the quasi monopoly of the media. So it is easier to understand the duality of the socialist's public dreams and the center-right (monetary) silent reality(ies). This balance is here to stay as it has a proven track record ! Despite all criticism. No war - low level of terror - peace and prosperity. Hope it stays that way ?

KnallGold : I don't think that the Suisse will make public statements about their 1 tonne a day, keeps the dollar OKay.
That's what I understood when they said not to sell "per se" through BIS ! They (Swiss) must have a special task with their 1.300 tonnes !? Note that the UK's remaining 7% goldreserves + the 7% (virtual) sold = close to the 15% EMU gold reserve ???-!!! These 400 tonnes UK-Gold are still in Euroland circles, carefully hidden for temporary convenience. I do suspect the Swiss Gold flowing to the Lawrences of Arabia for their precious black flowing to Euroland. Nothing seems what it is. Regards.

uponroofJPM DENIED....#7113403/05/02; 12:52:37

``These arrangements now appear to be nothing but a disguised loan -- or at least have sufficient indicia thereof that the court could not possibly grant judgment to the plaintiff,'' Judge Jed Rakoff wrote in denying summary judgment to the U.S. bank, which is a leading Enron creditor. The judge was not expected to grant summary judgment, but the bank felt it had nothing to lose by making the motion.

uponroof- so that's 965 million on the line PLUS court costs etc, etc. U G L Y. These 'disguised loans' (FRAUD), which will be getting so much publicity in the future, will draw attention to their entire book.....including gold transactions. Can they stand the light?
Belgian-thanks for that insight. Unfortunately their words are attached to value. As long as they speak irresponsibly, and those listening are uneducated, gold will suffer.
Mitsui sold 3000 gold contracts today?

R PowellUponroof#7113503/05/02; 14:17:53

Buying and selling

I didn't understand if you were asking if true, or questioning the sale when you said,
"Mitsui sold 3000 gold contracts today?"
I heard the same next door earlier today but can not confirm or deny it's validity. Who is Mitsui and who bought these 3000 contracts today? Is this news to be seen as an explanation of today's POG drop?
Did you hear what contract month this refers to? Do you suppose if the news was reported that XXX Corp bought 3000 contracts today instead of reporting the selling party, that POG might have gained? One buys and one sells. If the total number of open interest stays the same, what has changed but the names on the players uniforms?
As Michael just mentioned with only 3000 tonnes of gold really sold (dishoarded) over 50 years by central banks, sometimes simply passing bullion around among different banks or Comex players produces only sound, fury and copy for news services, signifying very little. When POG goes up with increasing open interest, then, perhaps some fireworks!?

Golden BearUponroof. . .ALL#7113603/05/02; 14:59:24

Hello Uponroof,
your question in msg#:71123 -

"For reasons I have never been able to fathom, those responsible for these propagada binges cannot even sanction a modest diversification into gold (as we recommend here) for portfolio insurance purposes."

This article by Sean Corrigan explains why eloquently..


Golden Bear.

PS. First time post, but have been lurking for a while. Thank you to everyone for their time and wonderful insights and to Mr. Kosares for this forum to allow our thoughts to be expressed.

uponroofHi Rich..#7113703/05/02; 15:03:35

I saw that next door also and was hoping someone might amplify.

If Mitsui sold a large quanity of contracts in piece meal manner, or in light buying, it would knock down the price. There was also a circus at Buba today regarding gold sales...much ado about nothing but perception is reality.

We'll just have to Wait for clarification from cousin Chris and company tonight.

R PowellGolden Bear#7113803/05/02; 15:08:32

Welcome, and thanks for the link to Sean Corrigan's article.

uponroofRich....forgot to mention#7113903/05/02; 15:12:48

Mitsui is Andy Smith's house. Andy was not exactly bullish today in his remarks after the auction. He seems to be coming down on his previously bullish stance. At least that's what it looks like to me.

Golden Bear...

Thanks. Much appreciated. I've read that piece and it is truly inspired. His work requires (at least of me) to be read over 2 or 3 times to get completely all of the intricate yet powerful points. Love his use of words.

uponroofInflationary policy...#7114003/05/02; 16:01:41

Very interesting that Bush imposed tariffs on steel today. Keep an eye on this. Higher prices in 'all things steel' are sure to follow.

More importantly it is a "draconian" move to hopefully increase domestic production through penalizing cheaper foreign producers.

It all goes back to the dishonestly strong dollar....which is of course the root of all evil. Bush is trying to side step the real medicine, dollar devaluation.

An early signal of possible economic policy changes?

Black BladeBOE Auction a Disappointment? Ya Gotta Be Kidding Me!#7114103/05/02; 16:54:07

What an "Interesting" day in the Gold pits. I leave to talk to some prospective clients in Billings, MT this morning and after a stop at the Little Big Horn Battlefield, I return home only to see Gold lower by 1%. True the DOW sank 1.45%, but now I hear rumblings that the BoE auction was a disappointment for Gold investors. HUH?

This is the last BoE Gold auction (actually a giveaway to LBMA and UK-based Gold shorts). The auction was oversubscribed by 3.7 times even though it was an "invitation only" Dutch auction. The only losers that I see are the Brit peoples who were screwed, blued and tattooed by Skipper Tony Blair and First Mate Eddie "Little Buddy" George.

Meanwhile the reality of the overreaction to massaged dubious economic data caused the US equities markets to pull back as many investors awakened from their heady opiate-like highs only to discover that wishing for profits to appear doesn't make it so. While the Pimps of Wall Street and the Media Trolls continue to tout that the recession is over, or never was, America's CEO's are scratching their heads over where and how profits will materialize as they lay off many more workers and plan fewer capital expenditures. To say that this next "earnings season" will be a disappointment is an understatement.

Also Japanese are reported to still be buying Gold ahead of the "April Fools Day" surprise (how appropriate). More restrictions will be added over the coming year. The details aren't fully known, but it appears that the insolvent Japanese banks will only have insurance guarantees on accounts up to about $75,000 US for "all accounts inclusive". So it appears that the Yen tsunami will flow into different banks and under various names in different accounts, and even into an unstable Nikkei. I would suspect that Yen will continue to flow toward Gold, Platinum and possibly gemstones as well. "Interesting Times"

- Black Blade

Black BladeO'Neill Questions Recession#7114203/05/02; 17:23:04


KUWAIT CITY, Kuwait (Reuters) - Treasury Secretary Paul O'Neill said on Tuesday that the world's biggest economy was on solid ground and ``maybe'' had not suffered a recession in 2001. O'Neill, touring the Middle East for talks on economic and security, told reporters that contrary to a declaration by the National Bureau of Economic Research (NBER), which dates U.S. business cycles, a recession had not set in last year. ``It seems quite clear now that our economy maybe never suffered a recession,'' O'Neill told a news conference.

Black Blade: So this is America's "best and brightest"? No wonder that senile former Ku Klux Klan member Sen. Robert Byrd (D-WV) was able to make him cry like a baby. This guy is one dim bulb.

Black BladeDOW Theory Divide#7114303/05/02; 17:34:20


It looks like the Dow Theory buy signal we were muttering about in March 1's column (see "Nearly Out of the Woods"). But Russell, the old Bull Moose of the Dow Theory, is still stomping his hooves and snorting derisively. He's even speculating about market manipulation, an idea he's flirted with before (see "Methuselah Suspects Market Manipulation") but backed off:

"Blow baby, blow. Looks like the pros want to bring back the bubble. Can you blame them? ... Hey, Wall Street isn't a charity affair, it's a business--and the business is distributing securities to the public. That's right, Wall Street's business isn't collecting stocks and bonds, it's getting rid of them. Seriously, this did look like a blow-off, but we'll only know that in retrospect. I keep thinking of 1966 to 1974, those mini-bull and mini-bear markets."

He means the Dow's repeated feints at 1,000 from 1966 to 1982, which lured so many investors to their doom that Jim Dines of the Dines Letter named it "The Graveyard in The Sky."

Black Blade: I think Russell has it figured out. This see-saw action isn't just like 1966-1974, but just like 1929 to 1937 as well. There are always min-bulls and mini-bears within a general trend. That's not news. Amazing how economists are so quick to call the end of the recession when they completely missed the beginning of the economic downturn. We called it here at the USAGOLD forum early in 2000. Hell, I should get the Nobel Prize for Economics - those guys are nothing but shills (nod and a wink).

nickel62Man I really have tried to forget about Dayton Mining,#7114403/05/02; 17:52:38

It is merging with Pacific Rim Mining not the other company I suggested wrongly earlier.
Black BladeHappy days are here again -- or are they? #7114503/05/02; 18:00:11


Good news has many parents while bad news is an orphan. Now that the stock market is back to its highest level since last July, commentators of all kinds are rushing to jump on the bandwagon and proclaim themselves born-again bulls. Talk about irrational exuberance! Rosy Scenario is alive and well, and marching on the Street of Dreams.

One commentator is even going so far as to question whether we even had a recession in the first place! Whoa! Time to step back and take a deep breath. First of all, we did have a recession. If you don't believe me, ask the 1.4 million people who have lost their jobs over the past year, the companies whose profits fell by 50 percent or more -- the biggest drop in postwar history -- or the firms in the capital-goods sector for which a recession would be a step up from where they landed.

Black Blade: Exactly!!!

R PowellBlack Blade's Nobel#7114603/05/02; 18:08:18

I've been taking notes. I have you currently placed among the leaders but, remember, I only have one vote.
You're running neck to neck with some of the best. Price is an important consideration. Those who demand payment for their thoughts are at a great disadvantage in winning my vote. However, I never quibble over the price of a good book. Let your experience and opinions flow among the facts. Many will want an autographed copy.

AndúrilAdjustments for Mr. Black Blade on the employment of gold#7114703/05/02; 18:14:12

Of this Bank of England gold auction conducted for Her Majesty's Treasury on behalf of the Government of the United Kingdom, you have now said: "The only losers that I see are the Brit peoples who were screwed, blued and tattooed by Skipper Tony Blair and First Mate Eddie George."

How do you justify this position? Are you not aware that citizens in the form of "Brit people" (as with all other nations) have no personal claim upon publicly-held assets? As an American, do you expect ever to have and use "your share" of the Treasury Department gold? Or is it that even now YOU are the people being "screwed, blued and tattooed" as this U.S. gold is held fast? Think well.

A citizen anywhere has but one means to personally gain the benefits of gold -- the gold must be owned individually. Common sense has it to be bought in the ease of personal plenty (savings!), and liquidated when hunger pinches the tight belt and doom lingers to tip the balance.

You are hereby found guilty of mixing the subtle affairs of civilisation with the clear cut lives of single human being. Your sentence is to reconsider whether the "Brit peoples" as a society would have fared better in the absense of these sales, faced instead with a cascading default and collapse of the financial system. Does it surprise you so very much that a people must act at times even as a person must do? Liquidating gold is serious business, taken in light of the alternative consequences. But you see here only the outcome with no thought to the weighing of considerations leading to the decision.

Finding yourself an outdoorsman down to a savings of one last bullet, do you begrudge its utility to keep the wolf from the cabin door? Many give better comfort than one, but even the last ONE has a use! Britain has used but one of two. Sitting isolated and well fed beside your own warm hearth, why do you hear the distant shot from across the mountains and begrudge your "independent" neighbor the decision for its use?

uponroofSteel tariffs .........a major move by Bush......... Something big is happening? #7114803/05/02; 18:20:25

Nippon (Japanese) steel down 4% in early trading, Japan, Russia, Britain protesting tariffs....more sure to come.

American manufacturers, already smoked over the strong dollar handicap now must deal with rising steel costs in their raw material make up. They believe this will cost Americans 74,500 jobs....AND inflationary costs. They are livid.

Bush taking a very controversial risk, both economically and politically to save the steel industry. Will cost Americans 8 jobs for every 1 steel worker saved.

Oh.....I forgot.....just buy stocks and everything will be fine.

slingshotBehind the Trees#7114903/05/02; 18:27:21

Gold $300.00

Many times the Goldbugs have assaulted the cabals castle and even managed to breach its front gate, (Gold $300.00) only to be beaten back. Yet the goldbugs persist. They have the castle surrounded and the cabal has just so many arrows,just so many spears and just so much hot oil to rain down on their attackers. In the end they will only have the stone which entombs them to thrust against their enemies. But todays battle has brought something new. As the lord of the castle stands upon his high wall he hears sounds in the distance.
The sounds of axes and falling trees. Men with hammers and straining horses. He has heard of what these sounds mean.
Could it be what he most fears? A siege engine. An engine which can turn his walls into rubble.

I expected a larger drop in the price of gold. The distance to $300.00 is shorter. The media mentions gold more often than not. IMHO this assualt on $300.00 plus this time will endure.


Black BladeRE: Andúril#7115003/05/02; 18:49:55

The Gold never really went far. It just moved to another vault and title transferred to another LBMA member. The result was that the Gold auctions only served to diminish the wealth of the collective UK populace. All these giveaways occurred at a time when the value of Gold was low and the currency reserves were higher. Well gee whiz, that turned out well didn't it?

A socialist regime like the UK considers the Gold as assets held in trust for the people. As an American, I think that nationalism is just plain silly and I do agree that individuals who own physical Gold are better off. However, nothing beneficial was obtained for the Brit people by giving away their Gold. If anything the wealth in the Treasury decreased. In a sense - yes - "screwed, blued, and tattooed" they were. The people were played for fools. Yet, polls suggest that the majority were rather unhappy with the UK Gold giveaway from the beginning just as I am sure that Americans would be.

The ruling class has always taken advantage of the serfs. So apparently nothing has changed. This Gold giveaway is just but one example.

- Black Blade

USAGOLDBlack Blade, Anduril, All. . . . .Bundesbank Blinded by the Light#7115103/05/02; 19:03:17

Our thanks to Bill Murphy and GATA for this article. He's right. This is important.. . . . . . .

Bill Murphy says: "The most important news of the day was hardly mentioned ANYWHERE":

--Bundesbank reject suggestion for gold, FX sales--

FRANKFURT, March 5 (Reuters) – The German Bundesbank has rejected suggestions by some
government politicians that it could sell gold and foreign exchange reserves to plug holes in the public

"That would be a breach of the Maastricht treaty and would hurt the independence of the Bundesbank,"
said a spokesman for the Bundesbank on Tuesday.

The European Union's Maastricht pact forbids member countries from holding fire-sales of assets in order
to meet economic convergence criteria.

He reiterated that last month the German central bank ruled out large gold sales until 2004, the date when
the current Washington Agreement between major economies on the orderly disposal of central banks gold
assets expires….

MK Comment: Seems Bundesbank has had a change of heart. Unlike Britain which succumbed to the political/bullion bank sector, Bundesbank is trying to hold its integrity. I wondered whether or not the Bundesbank threat to sell was within Masstricht. It appears it was not! I was going to ask FOA if he thought Bundesbank would have made this announcement under a French ECB chairmanship. My guess is that this was a test flare which blew up in Welteke's hand. There was a great deal more to this than meets the eye. In my view, this was a test of what the EU was all about. Backtracking can be a good thing once cooler heads prevail. We'll see how the gold markets react. Things appear to have been made right.

sectorO'Neill...Not the Sharpest Tool in the Shed#7115203/05/02; 19:21:51

Black Blade; "Dim Bulb" indeed. The "No recession" remark is in the same league with the "You [complainers] are 60 days too late-the recession is over", 1930 remark by Herbert Hoover.

A dim bulb... HA! ...Why can't I ever draw a rich mope like THIS in a high-stakes poker game?

I think the SECTREAS may be in the ME to beg for more gold...too bad they are fresh out.

The Japanese "rally" may be over. Perhaps the corrupt government "market supporters" simply concluded that THEY ought to be recieving all that honor among thieves.

mikal@Anduril & BlackBlade#7115303/05/02; 20:07:45

The timing of the BOE sales has been coordinated with a gradual diminishment of the dollar as world reserve currency, record gold supply/demand imbalance, vanishing gold producer hedging, accelerating world demand for investment and to cover monolithic lending, short options and futures positions and derivatives. This dollar devaluation requires staging moves, including hoarding, missappropriation and POG losses to gold mines laborers, shareholders, and customers. Political appeassement and payoffs needlessly delay reforms, needed for a new gold market and economy. US Treasury current account imbalances should have been enough to erode dollar value. Overseas investments in US securities, corporate bonds, and equities are rapidly declining. It appears the last BOE sale was designed to precisely precede "cascading defaults and the collapse of the financial system", which Anduril notes was the "alternative" for the "Brit people" without BOE gold sales.
TrapperSell ALL the Gold#7115403/05/02; 20:29:49

What's the problem with the German centeral bank. The socialist have the right idea...sell all the gold and use the cash for all those collectivist programs. Just think of all the charity they could pratice with wealth that someone else produced.
But the question remains, why do the Germans or the French or the , pick your country need ANY gold at all. They all have the ECU printing the fiat. They just ask for some fiat and presto the truck backs up me unload these heavy boxes. Need more fiat? Just call the ECU and ask for another truck load.
I think the reason they ALL keep the gold is that in their heart of hearts some are not sure they won't need some real money. Live small.

Black BladeGold Demand Trends#7115503/05/02; 22:04:27

A 24 page report from the World Gold Council in pdf format.
miner49er"Let's all hold hands and buy and SPV..."#7115603/05/02; 22:31:56

Sir uponroof posted a link to an article a while back that mentioned an interesting financial "product" called a "synthetic collateralized debt obligation." This is a product that is designed to permit the buyer to sponsor an obligation in which he "swaps" the credit default risk on some debt instrument for a premium paid. This can be done in a direct arrangement with a counterparty or can be done through a special purpose vehicle (SPV). While the concept is similar using either a direct swap or an SPV, I will focus on the SPV, in order to point out some general characteristics about vehicles, and how this concept figures into an evolving understanding of what constitutes money.

[Note - after writing this I never got back around to the SPV as such, but will leave the introduction as is because I still find the example of this kind of instrument instructive regarding their extraordinary flexibility.]

In a synthetic CDO, an entity wishing to transfer risk pays a premium to an entity set up for the task (the SPV). The SPV assumes the risk on the instrument and ties it to a reference instrument(s). If the referenced instrument experiences a credit event, the buyer of the credit "insurance" would be compensated. The SPV may sell notes to finance the swap arrangement, and invest the monies received. The SPV has no assets transfered to it. The only assets it contains are incidental (invested funds from notes sold, and premiums received). In some ways it operates like a traditional insurance operation. The main role is risk management. Secondary to that is how the entity manages investor funds, and premiums. If effective, most will benefit from the relationship, the sponsor receives protection, and is compensated if a covered contingency occurs, and investors are commensurately rewarded as well. If a credit event occurs, monies are paid from the liquidation of invested securities, and investors are affected on the basis of the structured tranches in which they are subscribed -- a senior through subordinate hierarchy.

While an SPV exists, it has form and structure, and as such, can be defined, assessed for value, and traded. When the purpose for which it was created no longer exists, the SPV is also broken down and disappears.

The chief facet of a "vehicle" that makes it important here is that it facilitates a transaction. While for instance you might have your XYZ 7% 2005 denominated in rupees, and may well solicit some institution to find some group that will do a credit default swap with you, it is awkward to say the least, and a lot more costly. If there were not some means to mediate these exchanges in such a way as to make them more liquid, these exchanges would render little impact on the financial landscape, and would mostly never occur to begin with. Indeed they bear some of the characteristics of financial barter. And in the same way that the exchange of 3 loaves for 2 fishes is assisted and made efficient through the use of an intermediary, so the exchange of unlike financial instruments is similarly improved. Not only the exchange function is improved, but the price-ability and marketability, hence its liquidity, as well.

The defining characteristic of an exchange medium is its liquidity. Certainly the defining characteristic of money also is its liquidity. (If you can't spend it, it ain't money.) The two other chief properties of money are those providing a working unit of account, and a store of value. Yet these, so far as money is concerned, are inconsequential unless the medium to which they attach is sufficiently liquid; i.e., readily exchangeable across time and space.

Some say money makes the world go round. Actually in this respect, commerce makes the world go round. Money just greases the axis on which it turns.

Something that mediates (facilitates, improves the efficiency of) a transaction, must necessarily provide an acceptable, reliable, and useful means to make account of the proceedings. It must also be capable of storing, or suspending, the value of the items being exchanged for the duration of the exchange -- as this provides predictability and stability. If an entity can satisfy these requirements, it then has the fundamental qualities to mediate exchange within its universe. Does this make it a medium of exchange? No, not at all. Not until the entity gains broad enough acceptance, and use, among the participants in this realm, can it be thought of as such.

The term "medium of exchange" is born of our traditional schooling and concepts of money. Here the medium itself serves both as that which intermediates (facilitates, improves the efficiency of) a transaction, as well as being the focus and the stuff of the exchange (dollars, beads, gold coins, etc.).

In times past it was essential to link the medium directly to the exchange as electronic settlement conducted in a networked world did not exist. The very properties that made the transaction efficient were necessarily inherent in the medium. Parties accepting the medium in exchange for some good or service would either recognize the authorizing stamp on a piece of metal or paper as enforcing its role as tender, or accept the medium's intrinsic commodity value, thus recognizing subsequent acceptability (liquidity) when they should turn around and exchange it themselves. They had to ensure the stability of these exchanges across time and space since time and space were often very long and very far apart. Since the value of the medium was intrinsic or enforceably tokenized, the natural evolution would be to think of these media as not only something that held value throughout the life and scope of their commercial use, but as something that could be kept enduringly as part of one's overall net worth. The medium became not simply a "store of value" to stabilize current commercial transactions, but a "store of wealth" that was expected to hold its value indefinitely.

Today we live in a world of instantaneous settlement. We also access and process untold amounts of information just as quickly. This allows commercial opportunities to be identified, and business options exercised with super-human reasoning and decision-making skills. Endless possibilities are opened up to find and work "a good deal." The margins may be small, but "sure," and incomprehensible volumes of assets and liabilities can move around the world with the click of a mouse. This vast and ever-increasing financial and economic activity requires a transactable medium that not only can handle the tasks, but even drive the evolution of its own usage requirements as well. I speak of more than just derived and leveraged finance. Conventional business, on a global scale, requires unprecedented versatility as well. Even as our stick-figure barter of loaves and fishes demands a tool that smooths out the process, so the movement of super-volumes of cargo across the globe, over and over and over again, also requires something to go between buyers and sellers that is up to the task.

We see the word vehicle used increasingly in the stead of exchange medium. Why is this? In the rarefied world of nuance, ideas germinate in mental petri dishes. Gametes of thought combine and begin a zygotic progression of conceptual cell-division. What is planted at the outset determines the course of development. So the fineness of degree differentiating these two terms is not the accidental result of the "twinkle in their father's eye," but a deliberate usage to define the framework of the discussion going forward.

In Mr. Greenspan's speech discussing the makings of international currencies, he states, "there are efficiency gains to channeling international transactions through a single currency, passing demands and supplies for other currencies through trades involving a so-called vehicle." The concept he is advancing is that of the international currency finding value in its use as a vehicle for exchange. The inefficiencies to the buyer of either maintaining large stores of inventory in a grab bag of different currencies in order to speed up exchanges, or uneconomically procuring the necessary instruments on the spot, with its subsequent delays, and unpredictability, are mitigated by using a globally recognized, deep and liquid unit in place of the local currency to settle the trade. This is also acceptable to the seller, as he is able to easily re-exchange the vehicle units into his local currency, or invest the vehicle units themselves, depending on his business model.

The buyer converts to the international currency, not because of its lasting wealth value, but because of its usefulness in performing his transaction. The super-liquid markets should no doubt be able to absorb his currency conversion. Likewise the seller accepts the international currency, not because it is so valuable as a wealth-store, but rather because of its usefulness in pricing his goods in terms the markets understand, and work with.

What has happened here? The exchange of some good for some secondary currency has taken place. An international currency, acting as a vehicle, facilitated this potentially illiquid transaction by transforming the objects of exchange into units of recognized, accepted account.

The hallmark characteristic of a vehicle is that it carries things from one place to another. That which has been carried from a to b has been transferred. Transferring x from a to b in return for y being transferred from b to a is an exchange. The vehicle functions as a medium in this transaction, while not itself actually being exchanged. A vehicle more appropriately therefore could be called a "medium FOR exchange" as contrasted with the term "medium OF exchange."

[Technically it is more accurate to note that the vehicle is involved in exchange, but is not the focus of the transfer, but simply the means by which the transfer is made possible. The concept is still meaningful as presented however.]

The parties to this transaction really don't care what the medium is, so long as it does the job. Whatever does the job most expeditiously will end up being preferred for use. That which involves the least hands-on involvement, or active thought on the part of the exchangers will be chosen ("one-click" buying) because it introduces the least friction and encumbrance, which translates into additional costs -- tangible and intangible.

The purpose of this outline is to give a very simplified view of the vehicle concept, not to imply that these types of structures are necessarily simple in practice, or always so one-dimensional. But as a conceptual zygote, the notion of making a distinction between "medium of" and "medium for" exchange is essential. The subtle shift from linking lasting value directly to the medium, in the stead of allowing it to find its value through its functionality is what this exercise is about. Another excerpt from Mr. Greenspan's speech:

"Because the attractiveness of any vehicle currency grows as its liquidity increases, an international currency has a tendency to become a natural monopoly.

"If the underlying demand for one of two competing vehicle currencies falters for a reason not clearly perceived to be transitory, and its bid-ask spreads, accordingly, increase relative to its competition, demand will shift to that competitor. But that shift, in turn, will widen the bid-ask spread of the faltering competitor still more, inducing a further shift of transactions to the alternative currency. This process ends with the demise of the weaker currency as a competing vehicle and the stronger of the two becoming the sole surviving vehicle."

In the eyes of U.S. strategists, the dollar maintains distinct advantages as a superior instrument in which to conduct business in the 21st century economy. Looming catastrophes in Japan, derivatives markets, and elsewhere certainly give cause for serious re-examination of the structural aspects of the U.S. currency, and its financial system, though. Undoubtedly not a few good minds are steeped in this, and very much up to speed. The complexity of the entire affair is beyond any one person's comprehension. As such, I will not venture there. Nonetheless, however, the big-picture appears to be evolving as mentioned above.

From this standpoint we may be able to discern a divergence between the evolution of the U.S. dollar and the euro. Among other things, the euro seems to be establishing a tie to freely-priced physical gold as is witnessed by their regular marking of their gold stores to the current market price. In doing this the euro seems to be seeking a more traditional model for the currency. ECB thinking appears inclined to allowing the currency to function somewhat enduringly as a store of wealth, and not simply contemporaneously for its transactional use value. This by no means infers that the bank is taking on the liability of convertibility. Of course not. Allowing their gold reserves to rise or fall in value according to the market price does affect however the basic principals of reserve banking.

Leaving aside all the esoteric issues about loaned gold, who has what, who owes who, and so on, let's just look at what a significant price rise would do to the banking dynamics involved. Should gold rise from say $300 to $3000 an ounce, the ECB in marking reserves accordingly has just expanded its lending capacity 10x without mortgaging a single euro to future productivity. ECB member banks are quickly found with the luxury of keeping conservative reserve levels, writing down bad dollar debts owed them, and comfortably paying down dollar debts owed, while most importantly having plenty left to lend into a euro-zone economic expansion.

Should the U.S. maintain its current mark of something like $45, it must then keep finding justification for further dollar expansion. As we can see from the creative and albeit quite ingenious tactics employed over the past few years, they are hard-pressed.

Can the U.S. also decide to change its policy and let its reserves be valued at market prices? It will probably have to figure out some way to do this in reality, in order to settle outstanding obligations. But leaving this aside, the effects of such an action would be quite different in the dollar world. Mountains of existing debt, contracts and allerlei derivatives are structured on the current paradigm. This paradigm is based on a premise that the U.S. maintain a perception that the dollar is "as good as gold." This is the vestige of a centuries old fixed-gold policy in economic thought. To suddenly switch gears and revalue the asset to market prices, however, would have volcanic repercussions. Even incremental price adjustments would send tsunamic shockwaves throughout the financial markets. Yet doing nothing in the face of an unprecedented gold-price increase would make out the U.S. as not knowing what to do, with the likely reaction: loss of confidence, and capital flight.

In some respects this seems to be the inevitable outcome of fiat money. And no, I don't mean the paper-your-wall-with-it kind. To mandate a ratio between gold and silver, as was done for centuries, by sovereign decree; or to establish a fixed amount of gold or silver to be the value of a currency unit, again by the declaration of the governing authority, is this not the perfect definition of "fiat money?" And so the U.S. dollar, via the current contract markets, is in the last stages of a near thousand year evolution of this concept. It is not lost on them that they are at the end of an era. That is why they are seeking to create a new thing. They have to.

So U.S. strategy must remain, in the meantime, that which permits no significant rise in the gold price at any cost. There is a resolution to be had here, though. They are not simply hoping against hope until we all die, and those not yet born take up the mantle. Looking back at what Mr. Greenspan was quoted as saying above, the intimation is that if the U.S. can still capitalize on its core competencies -- its well-developed acceptability for its hyper-efficient transactional usage -- it could damage the euro, which has still yet to attain this level of utility.

With that underway, the euro would begin to falter, and "...if the underlying demand for one of two competing vehicle currencies falters for a reason not clearly perceived to be transitory ... demand will shift to [the] competitor [which widens] the bid-ask spread of the faltering competitor still more, inducing a further shift of transactions to the alternative currency. This process ends with the demise of the weaker currency as a competing vehicle and the stronger of the two becoming the sole surviving vehicle." Couldn't have said it better myself.

So here you have miner's view of the gameplan, as seen from the back row...

Good night all...

Black BladePuplava Market Wrap Up#7115703/05/02; 23:50:03


Still Overvalued by Wide Margin Russell goes on to quote Ned Davis Research regarding market valuations. At its peak in March of 2000, the total value of the US stock market approached 171 percent of US GDP. Currently it stands at 129 percent of GDP. When the bull market began in 1982 it stood at 36 percent of GDP when dividend yields were at 7 percent, and PE multiples on the major indices were around 7. Even with today's trumped up numbers, the major indices are grossly overvalued. To get back to normal valuations could mean the Dow would have to drop another 71 percent from where it presently stands. The Dow still trades at a PE multiple of 30 with a dividend yield of only 1.75 percent. The S&P 500 is selling at 63 times earnings with a dividend yield of 1.36 percent. In the case of the Nasdaq, there are no earnings since the majority of the companies within the index are losing money. The stock market is still grossly overvalued by any yardstick or standard of valuation. Authorities are still trying to hold up the markets by giving investors something to believe in. The spin is getting so thick that the markets are covered with a layer of fog that shows no sign of lifting. It has become a game of confidence the authorities are going to lose in the end. John Q. Public may not completely understand it, but he knows his neighbor just got layed-off, his monthly bills are going up, his credit card debt is rising in order to pay the bills, and his stock portfolio is still hemorrhaging from losses.

During the last bear market of the 60's and 70's, authorities fought and tried to prop up the markets with every tool at their disposal from fiscal spending to printing money. All that was accomplished was the inevitable was postponed for a number of years before a Middle East War, an energy shock, and a political scandal brought the financial markets down. We have the potential of the first two events becoming a reality in the Middle East and in the energy markets.

Black Blade: You know, maybe the US and Global economies weren't in Recession after all. It may have been a Depression instead. How foolish of me. Puplava gives a good run down on the days events on Wall Street and Main Street.

SpartacusJapan#711583/6/02; 01:23:22

Tokyo, March 6 (Bloomberg) -- Japan faces a significant risk of a two-notch credit rating cut because the government hasn't acted fast enough to end deflation, leaving the world's second-biggest economy performing below its potential, Moody's said.

Moody's, which has cut Japan's rating three times, most recently on Dec. 4 to a fourth-ranking ``Aa3,'' said last month it's reviewing the rating on yen-denominated bonds for another downgrade. A two- notch reduction would put Japan on par with Cyprus and Mauritius.

Black BladeMerrill to Look Past Pro Forma Numbers#711593/6/02; 03:02:18

NEW YORK (Reuters) - Merrill Lynch & Co. Inc. (NYSE:MER) is telling its stock analysts to use a variety of ways to gauge companies' financial performance, rather than just using the pro forma numbers highlighted by firms, the Wall Street Journal reported on Wednesday, citing an internal memo.

Merrill hopes to have the standards in place in time for the second-quarter earnings season, the Journal said. Merrill plans to focus more on numbers that are prepared according to generally accepted accounting principles, or GAAP earnings, the Journal said.

Analysts will be focusing on how cash flows compare with net income; returns on capital; returns on asset measures and the levels of receivables and inventories, the Journal said. They will also have to consider how earnings could be affected by pension liabilities, or underfunded pension plans, off-balance-sheet transactions and mark-to-market accounting, the Journal said.

Pro forma numbers, sometimes called cash earnings or operating earnings, are calculated by many companies excluding certain items, and have been criticized for making corporate results look better than they are. While many firms on Wall Street say their analysts look beyond pro forma earnings, Merrill may be the first big investment firm to adopt formal standards, the Journal said.

Black Blade: Life is about to get very "interesting" at Merrill Lynch for analysts. Now if all brokerages were to ignore Pro Forma crapola, we would see some worried looks on CNBC and CNNfn. The next earnings season could be a whole lotta fun.

SpartacusSwiss gold sale?#711603/6/02; 03:03:14

My german is not so good, but it sounds like the Swiss approved a proposal to sell "unnecessary" gold reserves with 1/3 of the profits to shore up their social security fund.. or something like that.

Can someone come up with a better translation?

TownCrierIf you liked miner49er's recent post...#711613/6/02; 03:04:53'll want to check out the latest update to the Forum's Hall of Fame.

In it, 'niner describes in easy-to-understand terms the tendencies of financial instruments to propagate, wringing new life out of monetary systems even as they degenerate.

(click URL above)

BullwayUS Steel Tariff#711623/6/02; 04:56:32

This is my first post. I have been reading with a great deal of interest to the comments posted. Keep up the good work.

The news today that George Bush is going to raise the tariff on steel coming into the US caused some concern in Australia. US tariffs usually do that here. I don't think that this was much of a supprise.It is a direct product of the high dollar policy. It is a desparate attempt to slow the erosion of jobs in the US as a consequence of the high dollar.

Tariff policies are an effect of an economy flooded with printed paper. As I mentioned it was not a supprise furthermore their are more tariffs on their way.

Tariffs can only mean higher prices. In other words inflation will be visiable for all to see. That's when gold will really hit it's straps.


TownCrier"One Land -- Two Stories": International editor Holger Jensen summarizes his Middle-east visit#711633/6/02; 05:18:45

OPINION HEADLINE: Locked in a deadly struggle, Palestinians, Israelis share at least one thing -- despair


----------...instead of the good life, Israelis live under the shadow of terrorism. Escalating bloodshed has sown despair in their society and fueled the worst recession in Israel's 53-year history. Tourism is dead, the value of the shekel keeps dropping and workers are being laid off by high-tech firms lining the highway from Tel Aviv to Haifa.

What makes young men -- and in two recent instances, women -- become human bombs? Despair, say the Palestinians. Despair that Israel will ever give them back their land. Despair at an occupation that the United Nations deems illegal but has allowed to last for 35 years. Despair at the hopelessness of a conflict that pits stone throwers, snipers and a few suicidal bombers against tanks, F-16s and Apaches.

We are besieged by the world's fourth-strongest army, they say. We are suffering state terrorism and collective punishment. Yet the world is so hung up on Israel's security, our insecurity means nothing.

Israelis echo that despair. We are a nation under siege, they say. Arab terrorists are killing our women and children in discos and pizza parlors. Our survival is at stake, so we have no choice but to fight back.-----------

Is there hope for a solution to the cycle of violence? Where to begin? Mr. Jensen continues:

------------...columnist Ran HaCohen, who writes for Israel's largest newspaper and teaches at Tel Aviv University, explains why he condemns the occupation more than Palestinian terrorism:

"Terrorism is not the occupation's twin brother," he wrote, "but rather its murderous offspring. Terrorism is horrible, but so is occupation and the former is the result of the latter. To stop the circle of violence, to stop terrorism, the occupation must stop first."

click URL given above to read this first of two scheduled summary articles, with additional photos from George Kochaniec

SiochainTarriffs & toher news#711643/6/02; 06:38:47

Well CFO of has resigned...hmmmn...wouldn't be worry over the books, would it????

Welcome Bullway...& yes the steel tariffs could lead to big morning newsletter put it this way:

"A much more troubling issue is the war going on over the steel tariffs that Bush called for yesterday. Now this is going to take a bit of explaining. Our steel industry is in shambles and there are several reasons for it. In the 50's and 60's the industry was so strong and the unions were so demanding, steelworkers were one of the highest paid labors in the country. And they carried the highest benefits and highest pensions. Life was good.

But foreign competition was a problem for them. so they would appeal to the Government for help and they would get it. See, here in the states, a company has to deal with environmental issues. If their smoke stack puts out more than a prescribed amount of particulate, they have to install expensive scrubbers in the towers. If their cooling water isn't recycled and cleansed properly, they get shut down. Then there is insurance which is up 1,300% in ten years, taxes, OSHA (occupational safety and health org.) to deal with etc. Its insanely expensive to operate a steel mill in this country.

So, even when the move was to tighten the belt, move from big steel mills to mini mills and increase production, they were still getting crunched by foreign imports. why? Because in Brazil they don't have OSHA. They don't have 5 years of environmental impact studies. they don't have worker safety standards. And they pay their employees 5 peso's and a chicken.

so, you have these foreign countries that can produce the steel, put it on a barge, and sell it here for less than it costs us to just produce it. Well its killing the steel industry. so a war has been waging for years over what to do about it. The people against trade tariffs say that the industry has to learn how to become more efficient, those for tariffs say that if we tax the imported steel, it would level the paying field. After a long pause, Bush has delivered his verdict and they are going to impose tariffs of 8 to 30% depending on the type and National origin of the steel. This isn't going over big overseas.

the European union has just met to decide what they are going to do in a retaliation strike. They came away saying they want monetary recompense for the companies effected. Oy. Basically we are on the road to some form of trade war with Europe, Russia and Asia. They too will want to tax the goods we send there, to make up for the money they are going to lose with the steel tariffs. its a nightmare. Where it all ends, who pays who, what gets taxed and on and on is all just starting to be talked about. There is no easy answers here folks.

We can't determine how this impacts us as it will take a long time for all this to dribble through the system. But right now its buzzing hot, and its a political lightening rod. Why did he do it? Well there is a good case for saying Bush wants to cement the voters from steel producing states. I would have to agree with that as the reason"

SiochainTitle correction#711653/6/02; 06:51:17

That's "Tariffs and Other News"...someday I'll get the hang of my three finger typing method!
Tommy PNEWS TAKES A BACK STAGE TO LETTERMAN!#711663/6/02; 06:54:06

uponroofTommy P#7116703/06/02; 07:37:20

Thanks for that info. I am hoping Jennings, and that smug liberal puss of his gets the hook also.

The Nightline/Letterman swap is an indication of things to come. Americans are so dumbed down from years of fat, easy living that news containing nasty information is becomming boring. Look for Letterman types to be doing the news, or a funzy version of it in the not to distant future. More traction down the slippery slope of disconnect from reality.

@Bullway/Siochain...Steel is going to be a major issue which could bring on retalitory economic measures from the world at large. Not to mention domestic strife from the manufacturers who now must deal with rising raw material costs on top of their strong dollar handicap. Bush, besides trying to buy votes, is trying to relieve the damage of the strong dollar. That in itself is interesting and perhaps a leading indicator of changes ahead. Another consideration is the international impact. Is there a country out there that sees this as the 'last straw' and now moves to retaliate in more serious terms other than a mere WTO formal complaint? It all adds up to much, and where it occurrs remains to be seen.

@miner49er...excellent work sir. I am going to have to read that piece a few more times to 'get it' in more complete terms. Very well written and a pleasure to comprehend as usual. I would appreciate your thoughts (brief) on the steel tariffs. Do you see any underlying motives besides votes? I cannot help but think this is beyond votes as the global fallout betrays the weight of the move. Is the steel industry that important to our economy or is there a more important reason below radar? All comments appreciated.

@Spartacus thanks for that heads up! Anyone able to translate (German?) the link regarding Swiss gold sales please try your luck. TIA

TownCrierWeekly Weekly Gold Market Summary w/ UK gold auction totals for the series#7116803/06/02; 07:58:43

Total offered 12,698,800 oz (394.98 tonnes)
Total bid for 44,432,800 oz (1,382 tonnes)

Total allocated 12,712,000 oz (395.39 tonnes)

Value of total allocated $3,495M
Average price achieved $274.98/oz

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miner49eruponroof @ 71167#7117103/06/02; 08:41:45

Greetings, uponroof - when we were kids we paid attention to the Fischer / Spassky chess match. From a distance we postulated strategy, second-guessed their moves, and always claimed to have a better move for the competitors each step of the way.

So with the steel issue, it might be interesting to hazard a guess as to what the real intent may or may not be. Very practically, it naturally involves votes, as elections this year are VERY critical -- Bush cannot (CANNOT) lose ground in either house, especially if it means an outright majority to the opposition. So, while the notion appears at this level purely "politics as usual," it does have significant impact from a national security / foreign policy perspective. ALL Bush's efforts will be frustrated and stonewalled if he loses control of the Legislative Branch. I wonder how much money China is giving to Democratic pols this year...?

While I feel confident in addressing the aspects of strategic activity in the currency arena, I could not do more than offer a child's view of possibilities otherwise. Two speculations circulate about the euro / dollar affair, and the strategies involved. One is that the euro faction is playing a wait-it-out strategy against the dollar, letting the dollar fall from its own mis-steps. The other is that this whole struggle is really as important as we make it out to be.

If there is any validity to these two notions, then perhaps the U.S. might find it in its interests to stir the pot. (As I don't know the numbers regarding steel imports, this may not be of any use if they are fairly small.) Steel tariffs, while certainly having value politically, also serve to put pressure on European exports. This is just one more body blow to the euro-zone economies. The ECB has tried to maintain a detachment from the political day-to-day affairs in these economies. As long as the pain-threshold is not breached, the ECB can conduct this sort of policy without much hassle. If the U.S. successfully squeezes euro-zone steel exports, it means just that much more pain in euroland. The political pressure for the ECB to do something, like lower rates again, would be turned up a couple notches. The ECB does not wish to succumb to this pressure, but will find it increasingly difficult if euro-zone economies suffer too much.

In my last post I emhpasize what others have pointed out, that the euro currency animal seeks to be a different thing altogether from its dollar counterpart. Part of the dollar strategy is to undermine this effort, and cause the euro to react in such a way that it begins to behave like the dollar. If they can achieve that, the dollar stands a good chance of winning. The euro is not designed to act like the dollar. Decades of planning have ensured this. If it changes course, it will venture into terrain for which it is not suited. It would be like using an Airbus to give guided tours of the Grand Canyon. Being a airplane, you could probably get the job done, but gosh, it was never designed to do that!

This is just a postulation off the cuff, as I haven't really given it that much thought. Neither am I proficient in steel issues. This also does not even begin to consider the effects on Japanese steel, or China, and other Asian producers...

There's an exercise for the mind... But unfortunately I don't have time to take this one on...

Thx for reading, good Sir...


Tommy PHow in the f.... did JPM get an UPGRADE#7117203/06/02; 08:50:03

TrapperMiner49er#7117303/06/02; 08:51:06

Your postulate that the EURO is using gold in a float is interesting. I have not to date been able to find that in print. Seems the EURO would not be a debt instrument would it not, if gold was at par a backing. If the EURO is a completly trustable fiat I can exchange all this cumbersome gold and silver of paper. I think the strenght of the EURO is in the fact that there is not huge debt associated with it. YET. It takes time for it to build up debt.
I am must likley wrong but I think the Euro is just a new pea added to an old shell game. The bankers and the polls needed more time and the EURO will give them just that. I would bet that another NEW fiat is being hatched right now.
My guess is it is for Aisa areas. The same model with a SHOW of gold with no direct exchange of course, but a large pile just the same. I have several ideas as to what "they" are up to but not any clear cut design. For sure us little people won't be included. Save gold & silver. Live small.

WAC (Wide Awake Club)@Belgian - Are we sure we don't want any terrorist incidents in Europe?#7117403/06/02; 08:58:36

BRUSSELS (Reuters) - A Brussels appeals court on Wednesday set May 15 for another hearing on whether Belgium has the right to prosecute Israeli Prime Minister Ariel Sharon (news - web sites) for alleged war crimes over a 1982 massacre of Palestinian refugees.

Lawyers said the final ruling would probably follow in June.

CoBra(too)@ Uponroof & Spartacus#7117503/06/02; 09:02:15

Though it's tough to reliably translate some of the swiss
particulars of their system, I'll give it a try:

Basler-Zeitung: Parliament offers Goldcompromise to Ständerat (Body rebresenting the Cantons in Federal Government).

After 30 years the gold treasure of the (Swiss) National Bank should be divided by one third each to the AHV (Allgemeine Hoheitsverwaltung, i presume- i.e. likely sovereign administration), the Cantons and the Federation (of Cantons), as long as the people and the Stände (Cantons) will not detrmine differently. The parliament has assented to this compromise on Tuesday. The only open question left, was what to do with the 20 Billion SFR, if the next generation should decide not to prolong the Swiss Solidarity Trust.

Referred back to the Federation (of Cantons)

The Federation of Cantons voted for the following ratio of distribution of the profits of the SNB - 2/3 the Cantons and 1/3 the Federation. Contrary to this (distribution)the Parliament has ruled to disburse the total capital for the AHV-Fund (Sovereign Admin. Fund) without the Cantons participation.
Finally it was agreed to adopt the 3/3rds. proposal of Ms. Lucreza Meier-Schatz (CVP/SG ... conservative Party)by a vote of 148 to 29.

- Seems to me the way to go - no sale, though give it back to the rightful owners, if not definetely to the people - at least back to more directly controlled entities.

Sorry for the bumpy translation - but hey! - I'm only a humble Austrian. Best to you cb2

sectorSelling the Last Bar...#7117603/06/02; 09:13:16

Sir Miner49er has rightly posited the draconian scenario [For the dollar] of a sharply rising gold price. Thus, he sees no alternatives except to sell the last bar "At all costs" to cap nascent pog rises.

There's a problem though and it has to do with Japanese elders and their $620 Billion in savings at risk. The Treasury of the United States simply doesn't have sufficient gold to sell into a loss of insurance Japanese demand spike. At most, the US has 5,500 tonnes remaining out of 8,000. This is reflected in the $20 Billion debit book entry of the Consolidated Financial Statement 2000, note 2 found by Turk and Hepburn. This figure makes no account of the IMF NY Fed regular exports of 40 tonnes per month until recently.

As bad as Sir Eddie George's "Abyss" will be, my view is that the Fed cannot afford to sell their last bar to hold $300. When they fail to stem the rising Japanese buying [TOCOM volume is up 4.61 times Feb. Y-O-Y( opposite the LBMA trends)], there will be none left to "manage" a retreat.

Thus the competing theories are: Will there be a "Retreat" strategy or is there to be a "Suicide" strategy? Since the Master of the Universe's dominant personality trait is avoidance of decision [At all costs] the likely choice between these distasteful options is to attempt an orderly retreat.

Indeed they seem to be implementing a retreat strategy now. We were at $270…now we fight for $ month will we be fighting for $320?

To be sure there will be an "Abyss" as gold rises under a voracious Japanese demand spike. The elders life savings therefore have the focus of government officials in the US AND Japan....
...All the while the Euro boys wait and watch.

Mr Greshamminer49er#7117703/06/02; 10:28:21

Just putzin' around on the 'Net, still half asleep, till I got here and saw your latest -- I'm hauling myself up out of the comfort zone and heading for a quadruple-shot wakeup coffee to bring back and sit with it -- I want to have all cylinders firing to get with this one...
miner49ersector @ 71176 #7117803/06/02; 10:34:29

Greetings, sector -- I think you have my conclusions off a little bit. Where you say that I see "no alternatives except to sell the last bar 'At all costs' to cap nascent pog rises," what I really see is that the U.S. recognizes this inevitability, and rightfully as you state, the ability to satisfy all claimants is impossible at current prices. What the U.S. is trying to do is develop a new paradigm for the currency, building on its coveted strengths of "hyper-efficient transaction utility" in the hopes of keeping the euro at bay. This is essential, as increased use of the euro as an international currency vehicle will take away much of the dollar advantage, and bring about the demise scenario. As long as their is no viable int'l currency vehicle competition, the dollar will continue to reign. (This doesn't mean they are out of dangerous waters, but they are still at the helm.)

So actually, I do see alternatives, in that the dollar planners see alternatives. Will they be successful for a while? Possibly. If it all falls apart, then you will probably see all the gold sold, but not at $300 or even $600. The workout will be much higher, so as to make it work-out. At this point, dollar holders will suffer merciless price increases, but that is just what will happen.

In the meantime, pressure, endless pressure will be brought to bear upon Japanese officialdom to restrain the public's gold demand. Maybe the U.S. could put tariffs on say steel for instance...?

cheers, good Sir...

miner49erTrapper @ 71173#7117903/06/02; 10:35:02

Hey Trapper, your comments are interesting. (Is the euro a new pea added to an old shell game, or just a new shell?)

I hope I am not giving the impression that the euro, or any unbacked instrument is something worth keeping as one's permanent wealth store. It need not go beyond mention that keeping the fruit of one's sweat and blood in the form of someone else's promises, and capacity to perform, is risky business. What seems to be at stake here is a dollar, extended about as far as it can go, trying to attract further use (expansion) by capitalizing on its functional value. Namely that it is usable as a reliable, deep and liquid, globally recognized and accepted medium for commercial and financial exchange. The euro on the other hand, is trying to differentiate itself from the dollar. It too needs to become this, but is deploying a different strategy. To go head to head with the dollar is useless, as it would have to undertake all the structural dynamics of the dollar, to do and behave as the dollar does. If this were the case, why use the euro when the dollar works fine?

The euro has come into being to address what became the fatal pitfalls of the dollar's policy in the past decades. This is not to say it will be ideal, or successful in the long term either. What I wish to portray is the inescapable fact that we live in a world of unbacked currency, and that this is not going to change. Therefore what are the advantages and drawbacks of the instruments we have to choose from? Where you refer to me supposing the ECB is using gold in a float, I presume you mean my correlation between its market-marking operations and its lendable reserves? If so, what this is all about, is a realization on the part of the euro planners that gold has for decades been undervalued by decreed suppression of its price. They know it can only go up, and substantially. It is not their intent, or is it necessary to make it convertible in the former sense. If you want gold however, you can go get it in the market at market prices, as much as you want and can afford. Fair enough, why should the banks socialize its distribution by managing its price?

So the ECB has a bunch of gold, say 10% of reserves. If a 1000% increase in the POG eventuates, then lendable reserves increase proportionately and gold-backed reserves are now 100% of current total reserves. Remember, these are not convertible reserves in the sense we traditionally think of vis-a-vis the old dollar paradigm. In that environment, policies that cause pressure on the currency / POG parity result in a drain of the bank's gold reserves -- where the POG is fixed. If the POG is allowed to float (and we infer this in the euro as they DO mark their reserves to market quarterly), then the reserves will function like any other bank reserves, bought and sold, lent and repaid as banking needs dictate. There is no particular need to have to have convertibility via the bank's bullion window, as institutions can buy it on the spot in the market at the same price, and as you can get it down the street at your local gold and silver dealer also for about the same (although I do suggest you use Centennial...). The end result is again, lendable reserves increase substantially. And the anticipated offshoot to this is quality and affordable funding made available for the euro-zone economies.

The next question is what is to prevent paper gold from again proliferating, and de facto setting the gold price like it does today. The simple answer is that euro-zone policy will not permit the kind of paper activity we see today. They will simply regulate it within their realm. Outside the realm the belief is that the horrendous discrediting of paper instruments in this arena believed forthcoming, will taint any efforts to rebuild Babel any time soon. (There is much more to be said here, and it is available in the FOA / Another archives. They handle these issues quite thoroughly. I could not even begin to cover it all here, and am running long enough as it is...)

True, if gold declines in value, reserves shrink, and deflationary pressures set in, but this is not anticipated They have no fear of a significant or sustained retracement of the POG once it gets going.

In the same way that the dollar has worked very hard at capping the POG for the very purpose of allowing it to remain a viable debt instrument, so the euro will work very hard at allowing gold to continually find its market value, as its very design causes it to benefit precisely as a debt instrument in a rising POG environment.

The euro in this case, for its life-cycle, will remain "trustable" currency -- but that precludes the understanding of the purpose of currency -- to facilitate commercial and financial exchange -- not to be a permanent holding of your wealth. That is what gold is so well suited for!

And contrary to natural inclinations, which we all have from our training in the tradition of money = wealth, the "weakness" of the euro is in the fact that there is not huge debt associated with it. As long as the debt is sound, the more the merrier. This is what banking is all about: lending. Viable economic endeavors funded by bank loans, and other credit extensions are how the world conducts business. The euro is doing everything it can to get more euro debt on the market. This generates the very use value that gives it credibility as a deep and liquid exchange medium.

The bottom line is store your hard-earned savings in gold. Use your investable funds, prudently -- understanding that they are not your savings. They are risk capital. Since investments are going to be denominated in some currency, take careful stock of the makeup of the currency in which your investment is named.

I hope this helped clarify my comments for you...


tau(Spartacus) Swiss gold sale?#7118003/06/02; 11:01:47

hope this helps. I gather that the sale of those 1300 metric tons is not imminent. It won't start before spring 2003. The discussion centers around the question of HOW these 1300 tons shall be distributed.

Intro from :
"For many decades, legal provisions existed which bound the Swiss Franc to a gold standard. In the new constitution ..... this link binding the Swiss Franc to gold was dissolved thereby enabling a revaluation of the Swiss National Bank's gold reserves. This showed that the central bank had assets to the value of 1300 tonnes of gold, which it no longer required to fulfil its monetary policy mandate. The question then arose as to how these unique assets should be used."

Proposal for distribution:

Knallgoldeuro/Swiss/BubaBOE#7118103/06/02; 11:11:53

miner49er (03/06/02; 10:35:02MT - msg#: 71179)

Excellent post-should make into the HOF (for the less bright like me)

Swiss sales: they have been legally approved since long,the big discussion is now where to go with the proceeds (the politicians favourite issue).

SS is okay,as an initiative by the conservative SVP is asking for.Paying back state debt:okay too.If they only waited a few years with selling,at prices ten times higher Switzerland could pay off all state and cantons debt (which is 200billions sFr.)!!! Someone just doesent like debt free entities,what a shame to mankind.Very sad.

A word to the "Solidarity" foundation: people don't like it at all,it was a result of extortion (a word used also by a Bundesrat=one of the presidents of Switzerland,Mr. Delamuraz) by the US and WJC.Look,we are in debt like any other nation,it even grew the fastest here (doubled between 1990 and 2000).We will fight the Sol.Found. and vote it down,period.

BOE finished,Buba cleared almost the same day,there won't be any Gold sales by them.So,Gold should have a free time now for some time !?

BoilermakerUSAGOLD/Centennial Precious Metals #711823/6/02; 11:39:24

As the lucky winner of one of the French Angels I want to acknowledge the receipt of same in today's mail and again thank our most gracious and generous host, Michael Kosares.

This beautiful coin of gold I will keep as my good luck token and unofficial membership badge at this forum.

WAC (Wide Awake Club)Focus-Gold's future seen shiny#711833/6/02; 12:06:46

LONDON (Reuters) - The gold market is emerging from cyclical lows, making gold miners a potentially attractive investment, according to Jeremy Metcalfe, chairman of UK-listed investment company Tiger Resource Finance
sector@Miner49er and uponroof...About the Steel Thing#7118403/06/02; 12:38:27

Australia reacts angrily to US steel decision
By Virginia Marsh in Sydney
Published: March 6 2002 07:25 | Last Updated: March 6 2002 07:59

Australia has followed the European Union in threatening to challenge the US at the World Trade Organisation over its decision to impose tariffs on steel imports, saying it would "fight tooth and tail" against the move.

"We're not going to lie down on this. The Americans are doing what they always do, they put their own interests first," said Ian Macfarlane, minister of industry. "The cap [on Australian slab steel] effectively puts a stop to what was an expanding market for our producers who haven't relied on government assistance to carve their place in the real world."

The "roof" has it right. Seems the atmosphere of gold cooperation may get a bit more strained in the near [Steel tariff] future. Perhaps SECTREAS O'Neill is even hearing that the Kwuaitis want their 79 tonnes of gold back? There seems to be no way to view international economics without gold being involved in some manner.

And Sir '49er... the euro factor is now clearer thanks to your eyes. I wonder if there is a magic formula between gold, the dollar and the euro such that when the yen gets to X, the dollar is floated to Y with a firm link to the euro and then gold is released to Z?

sectorBiggie Fund Looks at Gold...Likes It#7118503/06/02; 13:02:07

Fidelity US manager seeks solace in gold
6 March 2002 11:23:00 AM
BY JULIE HENDERSON - Technology stocks are unlikely to make the big comeback many US investors are looking for and may even contract more, says Fidelity's North American fund manager, John Muresianu who has moved overweight into gold to limit his risk against further volatility.

Muresianu, who is has been well-known in the fund management sector for several years and is something of a legend to the IFA sector, is taking what he describes as a "contrary" approach and staying away from defensive stocks while markets are still unstable.

Investor unease over US accounting procedures seen in the Enron affair and IBM leads Meresianu to believe technology, financial and blue chip growth companies have yet to take a further hit.

"The market still believes in technology and expects a comeback yet I think that future earnings and modulars will contract," says Muresianu.

"Although stock prices are down, they are not down as much as the fundamentals. Finance stocks are highly overvalued and derivatives exposure will show themselves as a big problem going forward, alongside a negative bid against blue chip growth companies."

Rather than retreating to traditional cyclical stocks, Muresianu has moved the 400-500 stocks held within his portfolio to put the larger weightings in small-cap value stocks, gold and energy stocks because they act in a risk-averse manner.

It won't take too many more guiys like this to add up to something "Too big to stop".

CoBra(too)@ Miner 49'er - Astute! --#7118603/06/02; 13:13:02

Thank you Sir for a great synopsis of reality.

I'm kind'a wonderin' what's new under the sun. Having read Arthur Hailey's "Moneychangers" a quarter of a century ago - I've just seen the ole book being republished - and everything A.H. has stipulated has come to pass.

Now the book was re-published and A.H. has written 'another'
introduction ... " ... is still a timely, appropiate read, though you must adjust ... mentally to those greater amounts of money and fraud ...

... There are some who believe - and the author (AH) is one - cb2 another - that the only real, honest money that has ever existed, is based on gold. A fact that the history of centuries confirm; and even now evidence is accumulating that gold's monetary eminence will soo be acknowlegded once more!

... until then, we may undergo some more "severe" testing of our "last" stratagem, where precious few will take the cue and hold on - in severe blasphemy of reality.

... Hope to see all of you - on the other side - of paper assets - and true value - unto, I'll stop stuttering - cb2

PippinFiat currencies, gold, M1-M2-M3#7118703/06/02; 13:59:36

I¡¦m new to this site, to assets management and economy ¡Kbut I love gold-related questions and I would be really thankful if somebody could enlighten me a bit concerning the following:

a) Notion of gold-based currency as opposed to ¡§fiat¡¨

I understand the advantages of a monetary system based on gold. My problem is that I only hear talking about coins and reserves of the various central Banks ¡V never about credit and the other ¡§monetary aggregates¡¨, as we say in French (M1-M2-M3), which also belong to the daily reality.
Hence my question: as soon as we have credit, we have a creation of currency, an increase of the monetary volume ¡Kwhich becomes ¡§fiat¡¨ in itself, because it is not backed by gold but by the assets of a debtor.
Assuming then that we have the same mechanisms as we have today, and that the only difference between our fiat monetary system and a gold-backed one is the collateral of the coins in circulation, I somewhat fail to see the difference between a crash in the two environments. Because fiat currency we have, and fiat currency we will still have.
I can imagine that one of the answers may be ¡§but the rules around credit will be more strict¡¨. Ok ¡V this is a question of discipline ¡Knot gold. Why can¡¦t we implement this discipline even before or without coming back to a gold-backed system?

Now, my ignorance has some limits, and I can well imagine that the owners of ¡§Reichmarks¡¨ would have maybe felt a bit more comfortable, 50 years ago, if they had known that their papers had been backed by 5000 tons or more of gold. So I understand some the advantages of a gold-backed system. But I remain stuck on the monetary aggregates¡Kƒº

b) Inflation / deflation

Are we sure that inflation/deflation is purely linked to ¡§fiat currency¡¨? I believe that that the Spaniards or Portuguese had provoked inflation when they had put the gold they had brought back from America into circulation. Inflation/deflation seems to be independent of the intrinsic value of the currency. Did I miss something?

BoilermakerUS Steel Industry#7118803/06/02; 14:28:34

The link will give you a quick summary of current imported steel and its impact on US domestic steel prices and volume. Having been in the business of marketing of capital equipment to the steel industry I am acutely aware of the industry's dire financial situation. Without protection I expect that nearly all of the integrated mills would be shut down within a few years. The mini mills would survive longer but no one would build new steel facilities in the US.

The US steel industry's integrated mills were mostly built before 1960 and are only partly modernized. About ten years ago I was proposing some equipment for Ford's River Rouge Steel Mill. One of their blast furnaces had been built by Henry Ford during WWI. Their power house boilers were built in the 30's 40's and 50's(one of which blew up several years ago killing several workers). Most of the Asian mills have been built since 1980 as a result of their government's providing incentives for basic steel capacity.

Big steel in the US reached its zenith during WWII and the 50's. It started its long decline when JFK denounced the steel industry price increases back in 1962. On April 10, 1962, six major US steel producers announced a sudden increase in steel prices. President John F. Kennedy was absolutely furious. He denounced the price increase in no uncertain terms. He said,

"Price and wage decisions in this country, except for a very limited restriction in the case of monopolies and national emergency strikes, are and ought to be freely and privately made. But the American people have a right to expect, in return for that freedom, a higher sense of business responsibility for the welfare of their country than has been shown in the last two days.
Some time ago I asked each American to consider what he would do for his country and I asked the steel companies. In the last 24 hours we had their answer."

From that time on there was little interest in investing in steel. It was similar to the tremendous negative impact that the "Windfall Profits" tax had on our O&G producers. Here are some factors behind the US steel industry failure
- lack of investment capital as noted above
- environmental/remediation costs for old mills
- high imbedded labor costs and inefficient work rules
- high pension/medical insurance costs
- inferior management

The raw materials for an integrated mill are iron ore, coal and limestone all of which the US has in abundance. Mini mills are basically scrap recyclers and they need a lot of electricity and natural gas for producing new steel. About 50% of US steel comes from domestic scrap. If we lose the iron-making capability of our integrated mills we will have to import about 50% of our steel.

The need to protect US steel boils down to whether or not we think that steel is a critical commodity for the strategic welfare and defense of the nation. Most industrialized nations view steel making as an important part of their infrastructure. However, it can be argued that imported steel comes from countries that are generally friendly to the US unlike much of our oil that comes from unstable areas. GW Bush apparently sees a strategic need and probably a political benefit. I tend to agree with him although a much stronger case can be made for protecting domestic energy producers. Trouble is they don't have a strong union and there's a natural antipathy towards "big oil".

Some day we'll be debating what should be done to the gold producers of this country who will be making unconscionable profits with $3000 per ounce prices. We will probably see a windfall profits tax or its equivalent imposed on them. Gold stocks will get hammered. That's why you need to have some coin.

GOLD6000Good gold stock move today in spite of down gold#7118903/06/02; 14:28:41

Newmont mining (NEM) has been trading in a range for weeks now but today it broke through and made a new closing high for the year.(See That's a real good sign since it's the stock that is being recommended as the bell-weather for gold stocks now! Real good! Yes! Real good!!!!
jlfletcContest#7119003/06/02; 16:11:03

I also want to acknowledge this forum and Mr. Kosares for his generosity in holding the POG guessing contest. I tied with Boilermaker for the prize, and Mr. Kosares was kind enough to part with an additional 20 Franc "Angel" so we could both have one. I just received it yesterday via certified mail. Very professionally packaged. It even came with a document stating that the actual packaging and shipping of the coin was video taped to avoid any problems. I have no problem recommending Mr. Kosares and Centennial Precious Metals. Great job guys!
Golden BearHow in the f.... did JPM get an UPGRADE#7119103/06/02; 16:33:22

Greetings Tommy P,

Deutsche bank is also named in the GATA vs BIS lawsuit as one of the defendents together with JPM and Citibank - what a coincidence.

One bank rating another, therefore lifting the market and themselves at the same time - all part of the ponzi scheme called Wall Street.

Golden Bear.

CoBra(too)@ Pippin - The Who?#7119203/06/02; 16:38:05

Welcome, Sir, though would you be kind enough to restate your questions from the fact - either being a frankonian major domus, or better caretaker or Pippin the Minor (Le Bref) King of the Franks? The man who adopted the church to inherit the title back in the seven hundreds.

The question of gold backed currencies was answered by a steady, non inflationary currency unto 1913; The year the FED was unconstitutionally set up to undermine the gold backed Dollar - and the US forfeited their constitution since (FDR, 1934 - Gold seizure for citizens and Nixon
defaulting the Bretton Woods Agreement against the rest of the world to default the gold exchangebale $ - Standard).

Since that time there was only fiat currency, for the first time on a global basis. And if it's M'whatever monetary aggregates is not a real distinction - it's seignorage, supremacy and in the end the currency of abduction and corruption.

It's not new. When the problems culminate you just forget about free trade and introduce tariffs, as first measure to beggar your neighbour. ( See 30% on steel imports - idiotically some-one said - one saved steel employee will cost 8 un-employed service related guys ... wow, considering, almost 80% of the US GDP is service industry - and financial - derivative - show ( as in Revue') without any real Re-venue, nor ROI, nor any other employ ... the US Hoi Poloi seems to go ... the way of every other empire ... usurped by politics ... democrats beaten by oligarchs, constitution by dilution.

Ok, Pip(p)in,
Sorry for venting, pick your M's - how about MZM - you know zero maturity and don't try to exhale some co2 into the wrong balloon - cb2

nickel62JP Morgan/Chase gets an upgrade..#7119303/06/02; 17:34:18

It is part of the manipulation dance. I first noticed it about thirteen years ago when the first waves of smart money started to realize that the money center banks were totally out of money since they had overlent to the developers and the office building market was collapsing. The normal reaction for a portfolio manager would be to sell all the banks, but no....the manipulators knew that unless the banks raised more money the whole system would go puff. So all the investment banks and investment firms joined on a pep rally for the bank stocks and each major money center bank raised billions in new stock offerrings or convertible debt deals. The key was the the powers that be including the Fed knew that the jig was up and that the recession needed more equity in the equation and that the Wall Street firms could be counted on to pass the hat amoung the less imformed. Which I am sure it is no surprise to the audience here is in no short supply in the professional investment world. The stock issues raised needed billions and the offical problems of the real estate markets and the office buildings that the banks had leant against went unannounced for another six or seven months till even the average Joe on the street could see that the developers were insolvent. WHat else is power for? This latest rally being led by the likes of GE and Citicorp sells surprisingly similar to that period in late 1989. I hope this sheds some light on the issue. The question is can they do it again. The answer is generally yes by the way , inspite of my sceptisism. Best wishes.
TownCrierMerrill Lynch may issue $1 billion of 30-year zero-coupon convertible bonds#7119403/06/02; 18:07:09

I'm sure there's a few of you reading here that will find this news of interest.


Cavan Man@miner49er#7119503/06/02; 18:08:01

RE: Steel Tariffs

Dear sir: I was scrambling at 4:15AM this morning trying to print your teriffic post of yesterday eve before I made for the airport. What a read and, thanks much.

My thought on the tariff issue (a momentous development) is simply that this consequence (likely unintended) is a result of the strong dollar policy which must remain part and parcel of the FED strategy you might have unmasked. A medium for exchange, despite possession of the attributes you enumerate as necessities, is inherently less valuable in that role if it is weaker relative to a competitor. Strong dollars love imports. I think we'll see more acrimony in the halls of the WTO as we move along the trail.

El GringoThe Aden Sisters.#7119703/06/02; 18:15:58

What has happened to the Aden Sisters? Those with a long memory with remember that they forecast gold to go to something like $3000/oz. At the time it was hitting $800/oz.
Probably they are now growing bananas in some Central American Republic.
I would be interested to know what their opinion on the gold price is today.

Cavan Manminer49er'sector,uponroof,CB(too)#7119803/06/02; 18:46:50

ANOTHER log on the currency war fire....

.....or am I delirious from too many airport "check ins"?

The real bite is flat rolled; that's automotive foremost I believe. GM just announced they have 1MM vehicle capacity idle. Over capacity At GM begets over capacity in flat rolled steel so mills scramble their margins and selling prices to keep their machines running. This factor combines with the strong dollar which for them is fortuitous. Also, you have the "legacy costs" of a retired steel industry in this country--onerous maybe. USS can't compete in that paradigm

Tariffs turn up the heat. Relationships strained; further deteriorate. Gold is at the heart of the matter albeit indirectly IMHO.

CoBra(too)@ El Gringo - Sounding a bit Ab-original ...#7119903/06/02; 18:49:58

Or is it Down Under?
... Sir, some of us not only remember the Aden Sisters - no, we've re-met them in N.O. ... and they're back to attack
the global fiat system.

And so am I - only started the "Crashmaker" ...

So please, Sir, get one thing clear - it's not paper gold nor mining stock - it is only physical possession of the metal to save you, personally, from another Argentine.

... Will never ever invest a dime in any Aussie Mine -cb2

Max RabbitzEl Gringo#7120003/06/02; 18:53:00

Isn't Lihir gold mostly sold forward? They need to hope and pray they get consolidated.

I've noticed and come to expect that gold prices drop for a few days after a British gold auction. Got to save face I guess. Show it wasn't all for nothing. Don't want to give the British press an open shot at them. It will all be old news in a couple of days. In the end the market always prevails. As long as men are corrupt, greedy, and deceitful gold will be valued.

My question is. If the Brits have sold off all but some 300 tonnes and have further leased a substantial portion, do they have any gold left at all?

Max RabbitzMiner 49'er#7120203/06/02; 19:07:19

I have greatly enjoyed your posts. They get to the essence of the issue and help me to see things differently.

"To mandate a ratio between gold and silver, as was done for centuries, by sovereign decree; or to establish a fixed amount of gold or silver to be the value of a currency unit, again by the declaration of the governing authority, is this not the perfect definition of "fiat money?""

adminEl Gringo. . .#7120303/06/02; 19:09:12

Please. . . .you sound like a mine company hot dog stand.

If you want to post ads for your favorite mining companies, please contact the office and make arrangements to pay the fee -- $2500 per mining company per post.

So far your at about $10,000 worth.

El GringoDon' cry for me Argentina!#7120403/06/02; 19:10:22

If I had the good fortune to live in Argentina I would certainly buy physical gold and bury it in the garden. Either that or spend the money being photographed on the corner of Caminito in La Boca,( opposite that great little bar) with the fabulous woman who sings in the street. She probably knows more about the value of gold than the rest of us put together.
El GringoTo Admin.#7120503/06/02; 19:15:54

My apologies but I thought news from Down Under would be of interest to investors. In the future I will only post comments that boost the buying of physical gold.
Max RabbitzFudging of EU deficits may hold a silver lining#7120603/06/02; 19:26:47

An article on the European Union stability pact limiting deficits to 3%. Here's most of the short piece written last week.

"Having Germany in the corner, wearing the dunce's cap, is an example of poetic justice. It was largely at Germany's insistence that the agreement was reached in the first place.

When the euro was little more than a gleam in the Commission's eye, one objection to it was the idea that nations would go wild once the currency was introduced. When countries borrowed in their own currencies, they could not go bust. They could always repay debt by printing money. In the era of the single currency, they can borrow in euros but not print them. Bankruptcy is now possible.

There are two answers to this. One is not to worry and let them go bust if they are silly enough. The other is to try to stop them.

There is a sensible answer and a silly one. Faced with a choice on economic matters between a sensible option and a silly one, it is always odds-on that European politicians will choose the latter. Once again they lived down to expectations.

The wish of German politicians was granted and the stability pact agreed. Now that Germany is on the way to breaking it, the Commission has its knickers in a twist.

IF THE Commission had taken its duties seriously, it would have warned Germany. This would have created a political storm. It would have been very embarrassing for the German government. In addition, our own Chancellor Gordon Brown - smarting under the
Commission's previous strictures on his Budget plans - rushed to Germany's support.

The Commission was then in a quandary. It only had the support of the Netherlands, Belgium, Austria and Finland. The heavyweights were against it. On the other hand, it was worried that failure to support the stability pact would weaken the euro.

The weakness of the single currency is, of course, extremely helpful to Europe. Without it, the current slowdown would have turned into a full-blown recession. But the Commission is European enough to feel that a grasp of economics is unpatriotic. Fudge therefore ruled. EU finance ministers have agreed no formal warning will be given to Germany or Portugal, on the understanding that they will try to do better in the future.

The official view now seems clear. The stability pact is a good idea, provided it is not taken seriously. This is good news. If the world economy stumbles, higher budget deficits will be needed to prevent a painful recession."

Max: If gold rises the EU should have no trouble providing the funds from their increased reserves (see Miner 49er) and Europe could have a nice stimulus. Selling/leasing their gold reserves would be silly.

mikal@Max Rabbitz#7120703/06/02; 19:30:53

The Bank of England was reported to be opposed to the gold auctions when they commenced, but the Treasury prevailed. You ask a great question: How much, if ANY, is left? Bill Murphy states that 7% of BOE reserves are now in gold, not counting leased gold. If that's 300 tons or less, or 7% or less, it's not enough to meet Euro entry requirements. This may mean they'd need access to US gold or unreported "black gold", or mining forward contracts on future production, if euro block entry were a natural. Or is it? Some have suggested a future currency block of certain Commonwealth nations/Gr.Britain/USA. Consider the amount of control and benefits this would afford British and other foreign bankers/financiers who already own our Federal Reserve. US, Australia, New Zealand, Canada, and Mexico gold and silver mines, cropland, military/industrial assets, technology, etc. South and Central America could be included. Bankers and Britain would acquire more influence in relations with big blocks including Asia, Arabic, and Euroland.
Cavan ManOn the War in Afghanistan#7120803/06/02; 19:44:25

Taken from today's FT oped pages

Snippet: A slip of the tongue by Tommy Franks, the Commander of US forces in Afghanistan, gave an unwitting glimpse at what has been uppermost in the minds of military planners.

Speaking to reporters on Monday he said: "First let me say that our thoughts and prayers go out to the families and the friends of the serivce members who have lost their lives in our ongoing operations in Vietnam". end quote

Cavan ManDOW/USD#7120903/06/02; 19:46:23

Markets up and DOW is down (again). Gold slides ( of course). Be patient. I forecast a squall in the gold market soon.
TrapperMiner#7121003/06/02; 19:47:01

Thanks for the response, enjoyed your lucid reply. I must agree with everthing save one point. Your view that the Europeans will not in the future engage in paper gold games. You sir have much more faith than I. Greed says it all. I am sure some will put the cause ahead of natural want for money and power but some won't.
What do you think would happen to the EURO, YEN, and ETC. if the US goes belly up in any kind of a big way. The type of thing, or worse, like we had in the '30's.
Live small.

TrapperMax Rabbitz#7121103/06/02; 20:17:48

Great post. Who becomes liable if say Germany goes belly up?
A problem not completly unlike the US and it's states.

Now where did I put the keys to the truck? We need to drive over the ECB and get another load of fiat...goverment workers pay roll due next week.
Could get interesting. Live small.

uponroofMiner49er, Cobra(too), sector, boilermaker, Cavan Man, all#7121203/06/02; 20:55:47

Out all day. Thanks for your discussions on steel and the Swiss sale. Steel "adding another log to the fire" for sure. Good thoughts from all.

Two things stick out in my mind tonight as I get ready for another early day tommorrow. Just enough time to post these 2 tidbits which both come from LeMet.

First from John Brimlow who is alluding to the recent CB involvement and the rumors of more to come as Japan's 'cards' clearly trump and threaten all CB gold:

"...Around 4% of Japanese savings would, at current prices, buy all the Central Bank gold. Since there are no foreign currency futures in Japan, gold futures are amongst the most efficient methods of shorting the yen.

Gold's friends need this encouragement because it increasingly looks as if the Central Banks are about to show their hand in the market. Reuters quotes Paul Lee, Dresdner Bank's Precious Metals chief in Australia, as saying "I think the central banks are capping the market at $300", which would normally be an incredible indiscretion for someone who could plausibly expect to actually deal with them. Another well known gold analysts flatly asserts that the Germans are about to announce a Swiss scale selling program, and that the Washington Accord will be renewed with a higher permitted sales limit. Those carrying scars from '96-'98 will be aware that he might actually know something.

But the fact is that serious observers have been well aware of this situation for some years. The fact that the managers are going public indicates the magnitude of the problem facing them..."

uponroof-This is vindication that we are (were) right all along... and that we will continue to be right in seeing their attempts fail due to natural market forces which always, eventually rule the day.

Second from the Indian prophet Mahendra who has made some amazingly accurrate predictions of late and who has singled out gold as about to reach "historic highs"

"Dear Bill,
Many people is asking me time for zone. Moon will change NY time at 12.25. It may not go immediately up in next minutes but in few hrs we will see impact. According to me very strong rally will come in coming days. Don't sell gold. As I predicted EURO, Japan and Nasdaq is moving up slowly. Thanks

This guy predicted back on Sept 8 (of 2001) that on Nov 27 2001 gold would begin to rise. Just by coincidence that date was the exact low of for the gold setback and marks the bottom for the move up now underway.

He also predicts that gold will reach historic highs in 2002-3. and..."Counterfeit in the U.S. dollar which is the heart currency for the world."

Both thoughts are powerful medicine for the recent pullback doubts. Gold market behavior is undergoing change daily. What is actually happening is no longer a planned procedure from the boardrooms of banks.

All we need now is granting of 'discovery' to proceed....which btw is a slam dunk if you have been paying any attention at all (Judge Lindsey).


Black BladePuplava Market Wrap Up#7121303/06/02; 22:29:23



It's becoming a battle between the bulls and the bears for the minds and pocketbooks of investors. This battle is being waged in the financial markets as the price of major indices rises one day, only to fall the next. Over the last few weeks the bulls have held the upper hand with the major averages recouping their losses for the year. As of today, only the Nasdaq remains in negative territory. The Dow has led the pack thanks to GM, who is projecting higher pro forma earnings this year. GM's actual earnings will be much less than their pro forma earnings, but pro forma numbers have become the new standard for reporting profits. We now have pro forma earnings and hedonically indexed economic numbers, which is what Washington and Wall Street reports to the investment public. The expectations for recovery both in the financial markets and in the economy are based on these numbers. It is a world of make believe; nonetheless, it is the new world in which we live.

Black Blade: And so it goes. Another good article. The market indices keep flying higher. I am making out well with my shares in the markets. However, this mini-bull is running on empty.

BTW, Gold looks like it might go below $290 tonight. Meanwhile the Nikkei is rocketing higher.

Black BladeBush Seeks Crackdown on Abuses by CEOs#7121403/06/02; 23:39:31


WASHINGTON (Reuters) - President Bush on Thursday will unveil a sweeping plan to crack down on corporate executives who mislead their shareholders, hoping to shore up investor confidence after the collapse of Enron Corp., Bush's biggest financial backer in the 2000 campaign.

Bush will propose holding chief executive officers accountable by requiring them personally to attest each quarter to the accuracy of their financial statements and disclosures, according to White House documents.

To punish accounting-related abuses, top executives would be forced under the plan to forfeit their bonuses and other compensation. In extreme cases, they could be barred from serving as officers or directors for other publicly held corporations. Bush also would give top officers and directors two business days to disclose that they bought or sold company stock. Currently, corporate leaders can go as long as a year or more without disclosing personal transactions.

Black Blade: It'll never happen. The US Government is bought and paid for. I hope that these types of regulations do pass, but I seriously doubt it. This could cut into bribes …. Er, I mean "campaign contributions" (wink wink).

Mr Greshamminer49er (03/05/02; 22:31:56MT - msg#: 71156)#712153/7/02; 01:30:36

I echo uponroof in needing a couple more reads to see how many layers of depth in our longtime forum topics you have peeled us down to.

You've touched on one of the things I was trying to get Oro to supply figures to illuminate FOA's assertion that the USD had received new and surprising (even to the Giants) strength as a transactional medium after its 70s swoon.

How much of this is there, and does it need to grow continually to provide dollar support?

Also, the possible strategies of the Euromeisters in getting into the game and playing a new hand as central bankers as the dollar era nears an end.

CoBra(too), Cavan Man, Knallgold, Trapper and sector had their appreciative comments (which I've only skimmed yet), so I expect that someone will do the right thing by you once more.

For now, I'm hoping that your writing sparks a voyage of looking into FOA's assertions to help us understand the battle going on behind the scenes. We need this corroboration, we need multiple perspectives on his views, and we will need them especially if he doesn't return to push our understanding forward another step. We can't count on his return, so thanks for taking the initiative to get us thinking about some of the topics unique to our group.

Black BladeGold auction may not be Britain's last #7121603/07/02; 03:28:44


London - The international gold market might not have seen the last of the UK's gold auctions, a leading precious metals analyst said yesterday. Tuesday's auction, the final in a series of 17, concluded the Bank of England's programme to slash the UK's official gold reserves by 58 percent from 715 tons. Mitsui precious metals analyst Andy Smith said that, with over 300 tons of gold holdings left, the bank could opt to resume its gold tenders in the future.

Black Blade: I hope that they do sell it all. Then I hope that the POG rises sharply while the pound get hammered as they are refused EU membership. That would be entertaining.

Black BladeThe Bug Bites#7121703/07/02; 03:42:38


Pollitt is what you might call a gold bug. He's wary of being portrayed as "a bit of a yahoo-because the gold business is full of yahoos, crazed folk that froth at the mouth." Still, more often than not, he looks on the bright side of the metal when others do not. He knows his views might be unpopular-heck, at times even dead wrong- but he continues to insist that bullion has long been undervalued. Pollitt's not the only one. "How do I put this without sounding irrational?" says Eric Sprott, director of investment policy at Toronto-- based Sprott Securities Inc., with a laugh. "I won't be surprised if gold shoots up in the $300 to $400 range this year."

Black Blade: Interesting article about bugs keeping the faith.

UsulWhat's the difference between a bank and an insurance company?#7121803/07/02; 03:43:41

"Shares in JP Morgan Chase, one of those heavily exposed to Enron, have fallen fast and will continue to fall far"
AndúrilThe confused leading the thoughtless astray...#7121903/07/02; 03:51:23

Thank you mikal (03/06/02; 19:30:53MT - msg#: 71207). You have done well to expose this leader as one lost in the woods:
"Bill Murphy states that 7% of BOE reserves are now in gold, not counting leased gold. If that's 300 tons or less, or 7% or less, it's not enough to meet Euro entry requirements."

Or is the conclusion your own? Think! You have not considered the meaning of this percent. Allow for the UK to shed more paper and the number grows... maybe to 100! It is meaningless from your angle.

So, you may say, leave the percent aside - 300 tonnes alone is not enough for euro requirements. Again you and your Murphy would err in thought. Think! A child knows that among TWELVE to the Monetary Union, ECB required near 770 tonnes from these members - total! Of this how much do you think the large German membership required put in? At 30 per cent share less than 250 tonnes of its 3,700 tonnes. A net gain with EMI returns!

You expect the United Kingdom to have a EMU partnership share greater than 30 per cent???

Consider two items, in this order.

Greece had 140 tonnes prior to EMU subscriptions to ECB calling for 20 tonnes. They opened vaults for only 8 and sought remaining 12 tonnes from... the market?! You think UK cannot too buy at need, whatever the price? Think!

Consider this! ECB subscriptions require 15 per cent of the share (a euro quantity!) be paid in gold form. As gold price climbs, less weight equals required 15% price-value. Think!

Looking at a drop of several dollars days ago your Mr. Murphy said that the German announcement demonstrated failing power to affect the market. Idle words from Murphy! He cannot see that the price could have run far without this public assurance of intent to deliver. A purchase of time - the falling domino found a steady hand - for now!

Travel the world over and you will encounter no public display nearer the mark than found in comments anchoring this monetary thread tracing back over many years. Very impressive. Applause for usagold, their stewards and guides most noble knights for steadfast service in a weary business casting light to the clueless, prompting the blind to see.

Black BladeGold hedges falling out of favour as price rises#7122003/07/02; 03:52:19


CANBERRA, March 6 (Reuters) - Gold hedges will taper off in the next year as mining houses seek greater price exposure, Virtual Metals Research & Consulting said on Wednesday. Hedging encouraged central banks to lend more of their gold, which would otherwise have remained dormant in vaults.

"Hedging really distorted the supply/demand balance, which had a short to medium term impact on the price," Virtual Metals chief executive Jessica Cross told Reuters. "But now it is coming the full circle and you could actually see the whole thing unwinding and that becoming supportive of the price," Cross said.

In the past two years, producer hedging has fallen by 116 tonnes, Australian Bureau of Agricultural and Resource Economics figures show.

Black Blade: The day of the hedger is over. Mega-hedgers Barrick, AngloGold, and Placer Dome had better rethink hedging going forward. They could be looking at bankruptcy should the POG rise hard and fast.

Black BladeEyes on Greenspan as Upbeat Data Pours In#7122103/07/02; 04:06:37


WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan is set to testify on the U.S. economy on Thursday with markets in suspense about what kind of spin he will offer on the recent run of upbeat economic data.

Some economists think that when the Fed chief gives part two of his semiannual monetary policy testimony before the Senate Banking Committee at 10 a.m., his tone may differ a bit from Feb. 27, when he delivered the first part to the House of Representatives financial services panel.

``I think Greenspan's going to be more optimistic,'' said Greg Valliere, managing director at Schwab Washington Research. ''This economy is not going to have a wimpy recovery. I think it's going to be robust.''

Black Blade: "Come on in - the water's fine" - AG. If this is a recovery then we will see strong Oil and Natural Gas prices. That will go straight to the bottom line and yet we see no improvement in corporate earnings. Hmmm...

BTW, the Yen has strengthen strongly against the US Dollars last night. "Interesting"

Black BladePetroleum Prices Higher#7122203/07/02; 04:17:50

Indeed, NY Crude is higher at $23.45/bbl and Natural Gas is higher at $2.62/Mbtu. Apparently the AGA NG storage levels are falling fast and petroleum prices are higher due to talk of a recovery and production cuts. The US Dollar has fallen hard last night and this would be bad for importers like Japan but good for local goods and services. Meanwhile Gold just languishes after somewhat encouraging results of the BoE giveaway. Did we dodge a bullet and avoid a severe recession/depression or is this an illusion? We shall see in the next few months. Also, war in Palestine is heating up between both sides and talk of eminent American attack on Iraq persists. "Interesting Times"

- Black Blade

CanuckWhat is happening?#7122303/07/02; 04:41:43

Gold and silver taking another thrashing this morning.

Can someone please explain to me (and probably others) in somewhat simple terms what is going on?

I am beginning to panic, I fear gold will break $290. Stocks have been holding up but I don't think they will much longer.

Thanks in advance.


BelgianThe Gold Trail#7122403/07/02; 05:26:53

The end of the UK sales + Bundesbank's message (to the US) do at least confirm GOLD's explicit Importance. But there must be more !? The financial whore, US$, (sorry) must be kept operating in an ongoing trade deficit that must be cemented into irreversibility. That's why the $-lady must be praised and the euro-tramp must be dispised. Welteke gave the dollar more political value than it deserves and has done so, most probably, for timing reasons ? See POO -pressure as background. Available Physical Gold can only flow in a depressed value ambiance ! We only guess about these possible flows. How long does the US wants to extend the political backing force for foreign dollars ? And does this has to be achieved with Physical flows (or promesses)?

Bear in mind that the ultimate Euroland target is to destroy the dollar-contract-pseudo-gold-market ! The dollar-game as an international derivative on derivatives has theoretically no limits in time and volume. The dollar must remain "credible" as long as possible. cfr. First signs of outright (inflationary) protectionism (unjustified against euro-steel).

EMU "SIMULATED" CB gold-sales are a politico-/-monetary Play. POG down for dollar upgrading, running for more weight to add on the self-destruction proces. In a later stage, POG explosively up for final dollar defense (what's left of it). We are in the process of the political transition of the reserve function of the dollar to the euro alternative. This is NOT a smooth and evident event !
This happening is not recognized by any commentator/obsever.
They all refuse constantly to put so many facts into a framework. And more precisely the latest Welteke statement.
FOA : Couting the Gold is easy, but counting fiat, in it's endless credit functions and derivatives, time and again proves an IMPOSSIBLE affair !!! The difference between "use-function" and "value-function" of our money, was most surely convoluted for political gain and banking credit interest (Bundesbank-?)

The dollar's faction's war on Gold is now lost as their whole system of fiat gold creaks under a load of FAILING CREDIBILITY ! That failing credibility is being driven home as the euro system (Welteke) pumps far more dollar based paper gold into the system than their actual physical gold sales.

Gold remains freely "convertible" whilst the management organises the continued un-free "trade".
Re-read Randy's @ The Tower msg #51093 (03/30/01): The management of Gold !

Oystercatcher Mgmt. Amsterdam (Technical Analysts) :
Let Gold work off its over-bought situation !

WAC: The Brussels/Sharon thing is a flag for many cargo's.
A multi purpose action in time as well as function. The only aspect of it, applicable to this forum is the euro-link to Arabian oil with a delicate balance on public sympathies. There are other facts (Brussels), more illustrative for this. This is certainly not a guarantee for terror prevention.

uponroofCanuck#7122503/07/02; 05:39:49

We are at the 292+- floor. Looking for support. CB implied future selling is moving into market sentimemt depressing prices.

As sector posted recently....the CBs are going to have to decide to fight 300+ with every last ounce, which would mean no escape plan, or allow some of their reserves for down the road manuevering.

The fact that CBs are now so involved, (too big a fight for the houses and BB's) amplifies the seriousness. Somewhere we have to now find the strength (Japan?) to challenge and beat CB threats of more sales (see my post re Brimlow last night).

I think we are going to have a very volatile month ahead of which the down side might be a weak hand shake out. Just my two cents.

Gotta run

miner49erTrapper @ 71210#7122603/07/02; 06:56:56

Good morning Trapper -

Regarding my "faith" in Europeans not to engage in paper gold. This was the same thing ORO would address. How do you keep people from playing these kinds of markets, when they are so profitable? In reality, I wonder how this will actually play out, myself. What I suggest, is that the euro folks will make the effort to regulate these markets in their favor, even as the dollar folks currently do the present markets. Areas outside of their jurisdiction will eventually find ways to do whatever they want, I imagine, but the expectation is that this will take some time after the anticipated decimation of the dollar-based contract market environment currently holding sway. In this "time" a lot of things can happen, and who can prognosticate? Probably, we will tend in the future to a single world currency as this will both facilitate global commerce, as well as hinder financial activity that behaves contrary to the policies of the currency issuers.

So as long as the euro works best in an environment of rising gold prices, regulations will foster this outcome. Even within the system, people will find ways to circumvent the regulators. So the regulators will keep regulating, and the circumventers keep circumventing, in the grand old cat and mouse game called "beat the system." Just like today.

Outside of their realm, maybe they just apply enough "influence" to the jurisdictions harboring the offending markets, that their own regulators make these markets a little less profitable? This influence does not just have to be about precious metals. Pressure can be brought to bear with just about anything, and in return for just about anything. Sound the trumpet about "human rights abuses" in mineral rich ABCLand, until you've exacted favorable trade concessions from them in return for putting the horn away. Just like today.

If the euro is at this time the chief reserve currency, euro-zone regulators will count on this to leverage their will. If oil is still what we use to light up the world, and it flows from euro-friendly countries, they can also provide assistance to encourage others to abide euro-zone regulations, where they are in oil's interests as well. Just like today.

This is nothing new. This is what all ruling factions do while they have the scepter. The U.S. has used the IMF to promote its own interests across the planet for decades. I have no reason to believe that this will not be the same with Euroland as well. They will have their own IMFs to influence policy across the world. They will make recommendations to various nations on how best to develop their economies, structure their governments, etc., and provide rewards (e-z loans, grants, military aid) for compliance, or punishments (sanctions, divestiture, military action) for those who don't go along. Just like today.

This is one of the main reasons it is the coveted jewel to be the issuer of the world reserve currency. It allows you to impose your will. That is why I don't think it's really so much a matter of "faith", that I conceive the plausibility of Euroland's controlling the operation of contract precious metals markets in the future, if they are at cross-purposes -- just as they should be able to influence, control, or manage other externals to their realm. Not forever, but for its season. It is just part of the human condition as shown all through history.

I also don't wish to make out that everyone is sinister. On an individual basis, people do things consciously and unconsciously that promote the things they believe in, and ultimately this finds itself in things that benefit them. When a collection of individuals acting for a common purpose (a government for instance), move together, the behavior is magnified out of human proportion, and can appear monstrous. Hence the perpetual metaphors of states and nations as "beast," "leviathan," and so forth.

There are certainly evil people, and evil ruling forces. There are also good people with beneficent designs. I personally make no judgement on any individual in either the U.S., or in Euroland as far as their intent. Only God can do that. What I wish to observe is the collective manifestation of the synthesis of all these participants: good, bad, and opportunistically ambivalent on the world stage. And the analysis suggests that there really isn't anything new under the sun...

Thx for reading good Sir,

Belgian@ Canuck#7122703/07/02; 07:19:02

A 2 cents (eurocent that is) guess of what might be happening, without reason for panic :
TA (TI) strongly suggests that euro is in the process of strengthening against the US$ !? The critical juncture (price-pattern-abcde-triangle) is pierced on the upside in favor of the euro. Automatically the US$ responds with more (endless) paper-gold-contracts ! Rightfull selfdefense sir ! That good old same reflex with more than 30 (70) years of age. Thanks Welteke for your (temporary) help.
Yes, goldmine holders (traders) might have reason(s) (again) to panic (?) for having shifted their etherical profits (once again) into Physical. You (any now many others) start to know my (FOA/A/CPM) boring mantra on this.

Compare the 2 year (+) pattern on euro/dollar bottoming chart and POG-bottoming chart. Similar, isn't it. A DIRECTIONAL MOVE is still in progress ! And why not A TEMPORARY up move in tandem for euro+dollar+Gold ? I am not trying to blow cold and hot simultaniously, but it are those GIANTS who do observe political will and its critical mass, for making their (the) decisive move. All other arguments are just noise, confusing noise.

Let them, about this economy that isn't ! Let them hide...hide...hide the building hyperinflation that is ! Don't lose your pants and shirt in the process, dear knight. Regards.
BTW : Harmony (HGMCY) is the FIRST goldmine that bluntly states that the best (one and only) support for Gold is actually : PHYSICAL BUYING ! That does makes sense to me...and you ?

Canuck@ Belgian/uponroof#7122803/07/02; 07:39:47

Thanks for the words of encouragement.

I expect a very shaky month and look to volatility going into 1Q02 earnings (mid-April). I suspect we will see the 'real effects' of the 'Enron-thingy' and the Japan issue by then.

I hope I (and others) are looking at this the right way.

SiochainInnuendos etc#7122903/07/02; 08:00:09

Smith is at it again....innuendo etc...yup...this is going to be one doggone fight....trying to shake out weak hands,,,and slow/reverse gold direction....definitely looks like no holds/lies barred

March 07 2002 at 06:34AM
London - The international gold market might not have seen the last of the UK's gold auctions, a leading precious metals analyst said yesterday.

Tuesday's auction, the final in a series of 17, concluded the Bank of England's programme to slash the UK's official gold reserves by 58 percent from 715 tons.

Mitsui precious metals analyst Andy Smith said that, with over 300 tons of gold holdings left, the bank could opt to resume its gold tenders in the future.

"The fat lady [of Threadneedle Street] may not have finished singing. Least transparent of all is why the music should stop at 320 tons left in UK gold reserves," Smith said.

"The question is: 'is this really the last UK sale?' The flaw in the so-called transparency of auctions is that the choice of 320 tons left in reserves after the auctions is completely opaque," he added.

Before Tuesday's auction a treasury spokesperson said there were no plans to hold any more sales after the 2004 expiry of the five-year central bank Washington accord, which capped sales at 400 tons a year......

Belgian@ Miner49er#7123003/07/02; 08:04:23

Thanks for your fine postings of recent, Sir !

The euro exists and will therefore keep on competing with rivalling US$ ! This rivalry has many aspects : monetary, geo-political and economical. But GOLD will always be inevitably "strongly" involved in this fierce competition ! Not as the good/bad/ugly thing but rather a strive for natural dominance. All tricks are permitted in such a game/play.
That's why Physical is and will remain the most safiest play for us as lilliputans. All other ventures are expeditions with the usual risk/reward fluctuations.


SiochainEuro ...$...&....?#7123103/07/02; 08:15:21

I have anticipated a drop in the $ over next 60 days....but I also have long thought we would move to perhaps three spheres of influence.

There is too much riding on the dollar to let it drop too far in favor of the Euro (Ok..we shall see what oil does...but I wouldn't put it past war/occupation to preserve relatively cheap oil in US)

Perhaps an intermediate step will be a three hegemony of Europe...the Americas (yes Canada/Mexico etc)...and Asia.

PizzCanuck#7123203/07/02; 08:26:19

Hey buddy, why am I getting the impression you're trading short term paper again?

DON'T! Buy the hard stuff. You'll sleep better. This is a long term game.

A few months back gold was 270 and silver 4.03. 290 and 4.44 are fine when looked at with the right perspective.

Miner 49er, Belgian, others, thanks for all the work. Still rereading posts - great work.

Re: Steel tariffs. Might be as simple as war. You cannot fight a prolonged war without a steel industry. Especially when it appears we will be alienating most of the rest of the world fighting it. I just can't imagine Bush bending to the steel industry only - why not auto's too? Something big this way comes - or already has and we just don't know it yet.


PippinCoBra(too) - which Pippin - #7123303/07/02; 08:35:14

Thanks for your answer, Cobra2. Concerning your question:

<<either being a frankonian major domus, or better caretaker or Pippin the Minor (Le Bref) King of the Franks? The man who adopted the church to inherit the title back in the seven hundreds>>

...Neither of them, I'm afraid. My reference is the Pippin of the "Lord of the Ring" (in the french translation - you may have a different name in english), a little Hobbit.
The one who made all those stupid things and made Gandalf furious so many times.
But above everything, the one who gazed into the wrong sphere...

A last question till next time :-) : is the figure indicated on the site above real and up to date? I believed that the question of the deficit had improved so dramatically that the money could be re-allocated (against Mr Greenspan's opinion, btw) ?

Tnx again.

Pizz(No Subject)#7123403/07/02; 09:42:52

Looks like big money coming out of US paper. Bond broke 100, dollar down, CRB gapped up, Oil up a buck, and Gold holding, firming even with all the negative press.

Gettin' REAL interesting.


RobotGuyPOG#7123503/07/02; 10:14:23

Is gold slowly dropping back to $280 level?
SiochainThom Callandra#7123603/07/02; 10:22:28


On currencies, Lane sees the dollar "tracing out a top." The dollar this week has lost an astonishing 5 percent against the yen and is fast losing ground against the euro. The almighty buck may be nearing the end of a 15-year bull run.

Lane and his team are taking a look at gold, the most unloved investment on the globe. "Everyone hates it but it is migrating higher. With interest rates heading higher and the dollar falling, at some point down the road, maybe because of Fed over-stimulation or fiscal distress, the market is betting there will be inflationary pressures," Lane says.

"People will do very well in the next six to 12 months in the gold sector,"

SiochainBroke 290#7123703/07/02; 10:43:49

Should get really interesting from here!
Tommy Pthere drive it right to $250.00#7123803/07/02; 11:07:16

Too much corruption in the ranks for any justice.!!! How sad things have become, for those who are able to see!
Siochain@Tommy P#7123903/07/02; 11:13:37

I'm certainly no expert in manipulations of gold....but I see this as a shake-out. The Big Boys do expect gold to increase this year....they need to buy low.,,and cover shorts. The small buyers/sellers are being spooked money is wandering around in search of a place...not bonds...not US markets....well lets close off gold from them ...& that's what it looks like. I see this as opportunity to pick up some hard gold.
KnallgoldEurogoldconcept:Moneyemanipation?#7124003/07/02; 11:29:40

"To mandate a ratio between gold and silver, as was done for centuries, by sovereign decree; or to establish a fixed
amount of gold or silver to be the value of a currency unit, again by the declaration of the governing authority, is this not the perfect definition of "fiat money?"" Miner49

If I'm reading (and thinking) right about this free Gold,not allowed to be called money again by the governement;the euro paper just offered as a humbly,more convenient medium of exchange for day to day transaction:

Will we,the people,finally,get our OWN money,liberated from any governement fixings???

uponroofSomething convulsive going on in the currency markets?#7124103/07/02; 12:22:50

Anyone care to explain the recent trend breaking going on with the dollar and yen? Does it have anything to do with gold's weak performance?

If I follow Greenspan correctly he is saying the dollar losing value is due to repatriation. If that's the case, and our domestic markets are running nuetral to bullish lately, what does that imply when the bear returns.

Oh I know...if the US markets turn down the foreign markets will also, losing ground, killing the incentive to repatriate....

Don't bet on it! The dollar's time is up IMHO.

Seems to me some major changes may be upon us. We shall see.

uponroofDollar in biggest fall vs yen since Oct. 1998#7124203/07/02; 12:24:43

All thoughts and opinions greatly appreciated
WaveriderYen Has Biggest Gain in Three Years as Japanese Stocks Rally#7124303/07/02; 12:34:38

"The yen had its biggest gain against the dollar since October 1998 as a surge in Japanese stocks spurred demand for the currency.

Investors drove the yen to its strongest level in 2 1/2 months as government efforts to boost shares pushed the benchmark Nikkei 225 average to a seven-month high. Japan is engineering a stock rally before the country's fiscal year ends March 31 on concern that recent declines in shares -- the Nikkei fell to an 18- year low last month -- may bankrupt banks, analysts said.

The currency was also helped by speculation Japanese companies may sell overseas assets to bring money home before they close their books at the end of March, said investors.

``This is not the time to be buying yen,'' said Sinche. ``Nothing fundamental has changed in Japan'' in terms of the strength of the economy, he said.

The dollar fell against the euro and the Swiss franc after European Central Bank President Wim Duisenberg said the decision by U.S. President George W. Bush to impose tariffs on steel imports ``may have something to do with the exchange rate of the dollar as it is experienced by its steel industry.''

Waverider: Interesting day on many fronts - the Japanese PPT may be effecting a change in investor sentiment that will probably be blown out of the water come April. The yen is likely being repatriated as March 31 approaches and on fears of rising interest rates in the US, but maybe also in backlash to tariffs on steel (US dollar is down against European currencies for same, as above). Oil shoots skyward today on increasing ME tension and fears of an Iraqi war. BUT...Gold did close over 290.00 - did Japanese sell off Gold today? As Mikal said weeks ago - expect volatility in the POG, and expect it to get worse...just hang on for the ride!

~Sir Miner49er - thank you for your brilliant exposition on the dollar/euro - a very pleasurable read, and reread for depth and breadth. It's a privilege to learn from you Sir! Cheers!

Siochain@ upon roof#7124403/07/02; 12:37:42

From one analyst:"as liquidation of long positions was seen in both New York and especially in Japan. Such liquidation is due to the apparent dissatisfaction of buyers in the market with gold's inability to cross the $300 level even when the USD appears to have broken down significantly. However, there appears to be good physical demand emerging from commercial and industrial users as we approach technical support levels. I would guess that the recent lows will hold but that any considerable rallies will have to wait until at least next week.

Even though the decline of the USD against almost all foreign currencies has been a supportive factor for gold, the large advances of global stock markets has moved the precious metals out of the spotlight for now. The psychology of the market has shifted quickly and the gold and silver markets seem on the defensive, with recent investors selling while the industrial and commercial interests are buying." (note those last few words!)

Additionally.... it looks to me as if Japan is pulling out every stop conceivable from banning shorts etc....the end of March is critical for them....they cannot allow the banks to fail thus have decided on the strategy of propping up the market any way they can....I would expect this to be cosmetic that cannot last but will cause a lot of damage now and after...JMO

Siochain@ waverider#7124503/07/02; 12:42:15

"speculation Japanese companies may sell overseas assets to bring money home",,,,I recently posted a note based on talks with my brother...and his Co (BIG) is picking up Japanese assets right and left

This is I believe part of the plan to escape the 3/31 pending catastrophe...or time

Black BladeThe Profitless Recovery#7124603/07/02; 13:14:41

If the recession's almost over, why are CEOs so anxious and investors so confused? One word: earnings.


The recession of 2001 was supposed to be nasty. You remember, we said so on the cover of FORTUNE in October, and so did a lot of other halfway-reputable people. But guess what: It may already be over. That's what the economic data are saying. It's also the opinion of virtually every economic forecaster out there, including Alan Greenspan. If the economists are right, the recession will not have been nasty at all. Just short. With only one quarter of negative growth (-1.3% in the third quarter), you could even argue it wasn't a recession, which is generally (although not officially) understood to be two straight quarters of GDP contraction.

But try telling that to the folks running America's corporations, who are as gloomy as the forecasters are cheery. Though it's up from the record lows of autumn, FORTUNE's Business Confidence Index (compiled from a monthly poll of financial executives) is still mired deep in recessionary territory. "We are not seeing any improvement,'' says John Dillon, CEO of International Paper and chairman of the Business Roundtable. Clearly the melancholy in executive suites is shared by investors. Since the post-September rebound petered out in January, the stock market can't seem to string two good days together.

Black Blade: Exactly!!! A lot of fantasies are dancing around in the heads of Wall Street Pimps and Media Trolls. Perhaps they simply can't see the forest for the trees. It must ultimately come down to profits and if there are no increases in profits, then there will be a lot of disappointed people this coming "earnings season".

Cavan ManUSD....#7124703/07/02; 13:17:20

Is getting creamed. The markets get curiouser and curiouser.
USAGOLDThe Way It Looks from Here. . . #7124803/07/02; 13:21:58

Let's see if we can get two plus two to = something useful.

Bonds down.

Yen up.

Japanese stock market up.

CRB up.

Let's see. . . . .

Maybe Koizumi went for the "devaluation thing" during GWB's recent visit???

With thanks to our own George Cooper on the analysis. (Japan selling bonds, buying own markets, reinforcing own banking system, driving up yen. In a word, "repatriation"

Open question whether or not it is with or without the Bush administration's blessing given the "steel thing."

Could be the start of something major.

Maybe we can get GC to post about it later. Watch for MarkeTalk. . . .

Gold down.

But we don't think for long.

BOE liquidity still wending its way through the gold market system. Could get interesting fast when that's over. . . .

Cavan Man@USAGOLD#7124903/07/02; 13:26:05

MK: The sharp drop off in the dollar and the action in the bond markets; doesn't that volatility have the propensity to wreak havoc with OTC derivatives a/k/a investment esoterica?
USAGOLDCavan Man. . .#7125003/07/02; 13:37:23

Yes, it does. If this is a quantum shift (too early to tell, but it looks like that could be the case), you could see a mad scramble as all sorts of positions are covered -- from commodities, to bond positions, etc.

Pizz, can you some shed additional light on the situation per CMan's question?

Welcome to all the new posters. Randy tells me European registrations are way up. A hand across the sea to all our fellow goldmeisters from the EU. . . . . . .

RobotGuySaddam and Converted Humanitarian trucks#7125103/07/02; 13:59:24

Rumors have it that Saddam Hussein has converted a number of humanitarian aid donated trucks into missile launch vehicles, despite Iraq's recent apparent willingness to go along with UN inspectors. So far in discussions, Iraq has responded reasonably well to suggestions that UN investigators would be interested in entering the country for the first time in two years to do weapons inspections. Allowing inspections officers into the country will be based on the condition of lifted, or completely suspended sanctions.

RobotGuy- Something seems a little weird here. Iraq seems to be a little too complacent. Obviously they've found some really good hiding places for their long range chemical and biological weapons. Unfortunately space satellites cannot observe all that is going on in IRAQ's massive cave complexes. Thermal resonance imaging is quite vague when it comes to underground observation, especially if the active manufacturing areas are underneath civilized areas. I wonder.........

Black BladeU.S. Natural Gas Prices Rise 18.75% In March on Colder Weather and Future Supply Concerns, According to Platts#7125203/07/02; 15:25:49


WASHINGTON--(BUSINESS WIRE)--March 7, 2002--Average U.S. monthly natural gas spot prices for March rose 18.75% from February, to $2.28/MMBtu, as cold weather swooped into the South and East, and forecasts for tighter supplies later this year fueled stronger price expectations, according to data released by Platts, the energy information, research, consulting and marketing services business of The McGraw-Hill Companies (NYSE: MHP).

``A number of factors combined to inject a jolt of bullishness into the March market,'' said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC's Gas Market Report. ``Many areas of the South and East that have not seen much winter this year finally got a shot of seasonable or below-normal temperatures this week. Additionally, there were a number of analysts' reports issued in late February that projected a strengthening of prices in the second half of 2002, largely due to anticipated production declines and a rebound in gas demand as the economy improves.''

Black Blade: Apparently natural gas supplies experienced the sharpest weekly decline in inventory in 8 years according to the AGA. This is on top of very high withdrawal rates that should drop excess supply rapidly over the next few months and with slowing production and exploration. Another "Energy Crisis" could be in the works. Currently the NYMEX spot is $2.79/Mbtu.

Solomon WeaverWhat is happening#7125303/07/02; 15:34:41

Canuck (03/07/02; 04:41:43MT - msg#: 71223)
What is happening?
Gold and silver taking another thrashing this morning.

Can someone please explain to me (and probably others) in somewhat simple terms what is going on?

. . . . . . . . . .


One thing that is happening is that we all seem to fall back and think that the spot price of gold today has a lot to do with the "value" of gold.......does a 3% drop or rise in price change the number of coins you have?

Another thing is that a single day does not a year the link above on page 18 there is a very nice graph showing gold price in 2001.....for all of last year, $290 would have been big upside news....take a peek.....

Poor old Solomon

Cavan ManBIZARRE#7125403/07/02; 15:35:56

1. Banking system "technically insolvent".
2. Debt/GDP Ratio unprecedented
3. Interest rates near zero; deflation rules.
4. Yen rising strengthens and equities explode.

1. Enronitis manifestations
2. Equity valuations at extremes.
3. Dearth of capital spending and savings
4. Culture of debt and another credit expansion.
5. Equities in bull market and dollar tanking

I am leaving out a lot got to run.

MarkeTalkMarket Turning Points: Major Cycles Dead Ahead!#7125503/07/02; 16:22:09

It has been some time since I last posted my thoughts. I have been watching the markets and events unfold each and every day. Today's action in the currencies (US Dollar and Japanese Yen), bonds, stocks and commodities leads me to believe that we stand at the precipice of a multi-year bear market decline in the US Dollar. I have been ruminating and cogitating on all of these matters and how they interact with each other. I have the benefit of access to many excellent sources of market intelligence (phone calls and newsletters)--some of which is conventional and some unconventional. So here is my analysis in a nutshell.

The markets are entering into a very dangerous time where economic dislocations and systemic failures can be expected. From a technical standpoint, a muti-year cycle in the US Dollar is due about now, roughly between March 15th and March 31st. This will be the top in the value of the greenback for some time to come--maybe forever. You can come up with a myriad of fundamental reasons such as: the phoney budget surplus under Clinton and Rubin; deficit spending by Bush due to the recession and post-September 11th attacks; introduction of the Euro; Enron scandal and fraudulent accounting practices, etc. Whatever you believe to be the reason, that is fine. I watch the charts and cycles which tell me WHAT and WHEN. WHAT is the US Dollar and WHEN is NOW. From a purely historical viewpoint, Caesar warned about the Ides of March (March 15th). So there it is again. One caveat however: cycles are not perfect, especially if everyone is watching and taking action. So we need to allow slippage of a week or so, which means today's market action may have signalled that the top is in.

Just a few other dates to keep in mind during this time period: March 19th is the FOMC meeting and release of the US Trade Balance (deficit); March 20th is the first day of Spring; March 27th is Passover; March 28th is a full moon as well as the release of the final numbers for 4th Qtr. GDP; March 31st is Easter (symbolic of resurrection and new beginnings); April 1st is the new Japanese banking regulations. It is difficult to find another time period of the year where there is a tight clustering of dates and events which coincide with cyclic turning points.

So back to today's market action. We have known for some time that Japan's financial system was in trouble. Report after report, new prime minister after prime minister, have talked about reform. But the stark fact remained that years of bad debts were being carried on the books as the recession dragged on and deflation strengthened its grip. I find it more than interesting and more than coincidental that George Bush timed his visit to Japan two weeks ago just before the markets are set to break down. In my humble opinion, it appears that Koizumi and Bush talked about Japan's problem banks and how to resolve them. I presume that they (or their financial people) discussed Japan's holding of $400-$500 billion of US Treasury Bonds.

From today's market action, it appears that Japan is selling off some of its US Treasury holdings (which is priced in US Dollars) and converting it into Japanese Yen for immediate repatriation to shore up failing Japanese banks. How else can we explain the fact that US Treasury bonds dropped almost two full points today while the US Dollar dropped 120 points to 116.80 and the Japanese Yen skyrocketed 236 points to 78.84 (March futures). At one point, the Yen futures were up 40 more points to 79.20. The laggards were the Swiss Franc and Euro, which are usually the most active. And we cannot forget to mention that US stock markets were down while the Nikkei 225 was up 185 points to 11,765.

All in all, the evidence points to a fundamental shift from a strong US Dollar to a weaker one. Given the crushing debt loads of government, corporations, and consumers, it appears that the financial powers have decided to allow inflation run its course and inflate away the problems. Of course, inflation has been evident in stocks and housing for some time, but those two items are politically correct inflation whereas price inflation and higher gold prices are not politically correct. Thus, the constant "tinkering with" and outright fraudulent manipulation of the various inflation indices (PPI, CPI, etc.). This conclusion that inflation is making a comeback can be seen in today's surge in the CRB Index to just under 200--after putting in a double bottom at 190 just a couple of weeks ago! The only laggards in the CRB today were gold and silver. Gee, I wonder why that is?? Could it be that cabalists,JP Morgan and Goldman, are doing what they always do?

In conclusion, we will look back at this time and kick ourselves about not buying more gold and silver at these ridiculously cheap levels. I don't believe JPM Chase or Goldman Sachs will be able to keep gold or silver under control while everything else is moving up big time. So once again, I appeal to the reason of all my clients--whether past, present or prospective--to take stock of this situation and to ACT. Mark my words: Once events begin to unfold with rapidity, you will not be able to get through to us here at Centennial. Even though we installed a new telephone system last summer, the volume of calls after September 11th made it difficult to get through. I anticipate the same thing will happen again. And God help us if any terrorist event occurs (nuclear or biological) in New York or Washington, D.C. Gold will skyrocket so fast it will take your breath away. You don't want to quibble over $5.00 here or there when gold jumps $100 in a single day. It can happen and it will happen some day. Count on it.


BelgianThe Gold Happening.....#7125603/07/02; 16:45:11

The contineous -"Building"- upon a -"Stable"- debt *System*
with -"Locked Down"- Gold prices ! (TG)

Building = 1933 >>> 1971 >>> 1980 ...70 years of different management styles in Gold Manipulation / Price Fabrication.
Stable = A political Gold market with no alternative.
Debt = More fiat for less goods/services.
System = Systemic and not responding to natural evidencies.
Locked Down = The only status wherein all this is possible.

*This* and nothing else is the sole explanation of Gold's behavior/fluctuations for the past 30 years and present. For as long as not one single main-stream-media, finance-analyst, is capable of writing down this conclusion publicly...we keep on waisting time with all or any attention given to these media. And the total lack of any *serieux* (seriousness) is evidence for the steady advance towards total collapse. Bedtime for Belgian hobbits.

TownCrierRestaurant revisted: "Waiter... we shall have the hyperinflation."#7125703/07/02; 16:56:26

HEADLINE: Greenspan Is Ready to Turn On the Inflation Machine

Aaron Task writes:
-------------...what if, rather than planning to squash inflationary pressures, Greenspan actually hopes to foster them, as Paul McCulley, managing director and chief economist at PIMCO, recently mused.

Greenspan "wants aggregate demand to firm sufficiently for companies to be able to 'take back' prevailing price discounts," McCulley wrote at PIMCO's Web site. "That's the 'take back' that is on his mind, not the bond market's fear of a 'take back' of last year's easing."

McCulley cited comments by Greenspan in his Feb. 27 congressional testimony that "part of the reduction in pricing power observed in this cycle should be reversed as firming demand enables firms to take back large price discounts." The following day, he noted, during a speech before the Labor Department, Greenspan discussed savers' appetite for risk and the long-term outperformance of equities vs. "less risky" securities.

Simply put, "Greenspan wants stocks to outperform bonds in the quarters ahead, and he's willing to underwrite a cyclical increase in inflation to bring about that outcome," wrote McCulley, who was not available for additional comment.--------------

In an earlier article, he also wrote this. Note the final thought:

---------- does the Greenspan Fed try to manipulate the markets, i.e., the Greenspan Put? Few serious Fed watchers would say it does, but "markets move on the relation between perception and reality," according to Woody Dorsey, an expert in behavioral economics and president of Market Semiotics. That many investors believe a so-called "plunge protection team" exists may be as important as whether it's fact or myth. Such beliefs may explain why many investors rode the markets down in the past 22 months, and why most continue to have faith in the stock market, and in Greenspan.

...most critically, the issue at hand is that the market hasn't cooperated with monetary policy for the past year. A lot of attention has been given to the failure of equities and long-term interest rates to respond to massive Fed easing.

Furthermore, the Fed has pushed the "real" well below 0% in an attempt to prompt investors to take money out of saving accounts and put it into the market.-------------

When zero interest rates weren't enough to do the trick in Japan, we now see reductions in bank deposit insurance come along to stimulate a move of money into economic participation. Wisely, the Japanese people have turned their minds toward gold.

It cannot be stressed enough. The Fed knows that money must flow like oil to lube the wheels of an economy, and further, simple money sitting in an account belonging to Ma and Pa American has big-time exposure to risk of losses in purchasing power -- particularly if foreign holders of massive U.S. bonds choose to liquidate rather than riding losers into the ground.

Move your money you must, but it comes down to this -- you can opt for stocks (thus rolling the dice on a future "Enron"), or you can opt for the tangible goods and hard assets that are at the very foundation of civilized life. Also bear this in mind, for it's a key issue: among the various non-corporate real assets, gold is the one best-suited to preserve liquidity -- an economic "wheel", so to speak, that is interchangable for monetary "oil" when needed. They know this in the far corners of the world. Now you know it, too.


CoBra(too)@ Marke Talk - Market Turning Points#7125803/07/02; 17:08:00

Sir George, you've penned an interesting scenario to which I would also subscribe. Though, haven't we seen these kind of turning points in the past and miracleously the turns returned to the old script of the play.

I'm not much of a TA guy, though it's been the craze for so long that I'd love to see a real, visible and established trend before joining the parade.

On a fundamental basis the "Turning Point" was hideously delayed and I would think you'r timing may be right.

One facet, which may speed up the process is the tariff on steel. A fact, which has infuriated all trading partners and may lead to severe repercussions. Wim D's. remarks left nothing to speculation as he openly critisized the strong Dollar policies in view of the structural indebtness of the US - internally and externally. (- Also (forget the author), though some bright analyst felt that every job saved in the steel industry will cost 8 jobs overall.)

Seems the old game of beggar thy neighbor has started in ernest again.

And just another thought, as most of the world's economists are becoming positive - just heard most of EU's forecasters see at least 2.5% growth in the second half - I'd have to ask - On what basis? Based on the latest set of economic numbers, relative to what fundamental BiaS seems more the construct of wishful thinking.

In conclusion, just let me quote a line from a recent essay by my favorite economist:

"The worst part of the bear market in stocks is still before us, and it will essentially involve the wholesale destruction of the pseudo-financial wealth that the bubble economy has created in the past years."
Dr. Kurt Richebacher

For gold - tomorrow may be a crucial day as the bigwigs tried hard to pull all stops below 290. I feel gold will come back in a big way - soon.
Regards cb2
PS - sorry didn't find time to respond today and will be away skiing for a week.

CanuckThanks for the notes today.#7125903/07/02; 18:25:49

Special thanks to MarkeTalk for the post earlier. I believe you nailed what my scrambled brain has been thinking but could not piece together.

A post sometime back by an occasional poster stills sticks with me. He (she) mentioned that with all the money pumping into 'the system' it's sometimes hard to pinpoint where 'inflation' will occur. In 1999/2000 it was very easy to see housing and the SM's flying high, 'good inflation' if you are a stock holder and house owner as MarkeTalk reminds us today. The 'moneymakers' want inflation 'channeled' into 'good things'.

Another poster again some time ago mentioned that the massive sums of money injected into the system in the last year (to two) intended for the same targets were lost 'to money heaven' with stock markets loses. The money injected to revive stock markets (and thus stock market confidence) was lost, resulting in 'no inflation'. This is perhaps a far too generalized viewpoint but stay with me.

So a month ago Bush heads off to Japan. Everyone watching this from a distance knows full well that the US has been up Japan's butt to inflate, inflate, inflate. The Nikkei after trending down for such a long time suddenly turns on a dime and I mean a dime, and is rising for no good fundamental reason whatsoever. The world markets keen to follow and sensing the abrupt 'political' change are charging at warp speed.

Now in the last year or so I have very keen on watching the price of gasoline in town. I commented recently that I have puzzled by the 25% back and forth pricing between 48 cents and 61 cents per litre. Today the price is 64.9 cents, gasoline has broken trend, look out, watch for it. As BB mentioned NG is up snartly and MarkeTalk mentioned the CRB is 'a cruising'.

The economy is still hurting fundamentally, there are dozens and dozens of articles debating the fact whereby P/E ratios are out of whack, earnings have not and are not improving, CEO's don't see the recovery yet the FED is pushing, pushing.

We have the (escalating) war(s), the accounting problems, bankrupt countries (how many now) and blah, blah, blah.
Japan and presumably others are 'channelling' money into gold, "can't have that" says the manipulative CB's, must 'channel' 'money' into 'productive' things, must redirect inflation.

I agree with everyone today, thanks for the notes. I personally have a six/seven week window where I am going to watch 1Q02 earnings and repercussions out of Japan. April is going to be a wild month. IMHO, Japan and the US have 'teamed up', maybe with or maybe without each others sincern trust, and have decided to inflate away. It will be interesting to see who is on board, Europe, Asia, the ME?
It also will be interesting to watch if the inflation 'channels' to the intended target.

Watch the CRB.

Black BladeMarkeTalk - Japan, Living a Life of Illusion #7126003/07/02; 18:30:05

Indeed, I thought it quite coincidental that the Nikkei 225 would stage a dramatic turnaround shortly after Dubya stopped in Japan and the Finance minister was summarily fired. Also the US Dollar has fallen rapidly which led me to believe that Japanese interests were calling home their dollar denominated investments. Yet the Nikkei 225 still rises higher on no real positive news. It appears that the new Japanese PPT is using some of the funds to stir up confidence in Japans failing financial system and probably to prop up the insolvent Japanese banks as well. Other market indices appear to be following the Nikkei higher as a matter of "monkey see - monkey do". Meanwhile the Nikkei is now 185 points higher at the open, merrily on the way to new highs?. Cheers!

- Black Blade

Black BladeAndersen May Face Criminal Charges#7126103/07/02; 18:47:55

WASHINGTON (Reuters) - The U.S. Justice Department is seriously considering bringing criminal charges against accounting firm Andersen for its role in the collapse of Houston-based Enron Corp., federal law enforcement officials said on Thursday.

Black Blade: In fact many companies have fired Arthur Andersen as their accountant. There is no more trust in this criminally corrupt and unethical accountant. Today Delta Airlines bagged and tagged Andersen. Any investor who discovers that AA is the accountant for any company that they have shares in would do well to reconsider owning those shares. AA has lost all credibility, especially after the details around Enron and Global Crossing have come to light.

R PowellMarkeTalk#7126203/07/02; 18:55:40

Market timing

Major market turning points
Hello again and thanks for the thoughts. We don't hear enough from you. I share your opinion of trouble ahead but I base my opinion on the many fundamentals repeatedly talked about. Fundamentals don't lend themselves well to market timing. I've paid to have this fact hammered into my thick head.
I often think that Batra's "Crash of the Millennium" will prove correct. Basically, his theory was that real wage purchasing power would decline leading to an economic downturn. He tried to time this but, maybe didn't foresee refinancing and the extreme extent that credit would be extended to the American consumer.
I agree that paper assets are doomed to declining value but I've been fooled so many times in thinking that a real significant turning point was at hand. Alas, I'm still thinking the same with the added thought that it will happen before Summer. With the renewed insane upturn of the equities markets, the downturn could easily become crash. If, by chance, not before Summer then it may not occur until next Fall. Again that elusive timing.
Your thoughts do invite an "ah ha, what we've been expecting is now occuring" but I've restrained myself from buying any S+P puts because of that old bugaboo- market timing. I have instead "traded" the silver market with limited success and "invested" in silver with long term paper and physical positions. The former are intended for fiat gain, the physical will be sold only in dire times.
Actually, this timing lament certainly supports overwhelming opinion that physical is the only way to fly. In this, I agree again that a few dollars up or down with POG is mere market noise. Patience is required.
Thanks again for taking the time to post. FWIW, the stars (according to market astrologer Arch Crawford) are also in agreement with the 27-31 of this month of March as the foretold crash dates! Hey, this guy did call the 1987 short term crash- about one month's worth of warning then. This time he gives us about three weeks. Who knows, timing?

Black BladeBlue Chip Clients Ditching Andersen#7126303/07/02; 19:11:04


Blue-Chip Clients of Arthur Andersen Are Severing Their Ties With the Accounting Firm

Black Blade: The name Arthur Andersen is synonymous with fraud. It is impossible to regain a good name when it has been tied to corruption and incompetence.

Black BladeOvervalued In Every Way#7126403/07/02; 19:22:56


No matter what the economy does or doesn't do, the market is extremely overvalued any way you look at it. A few days ago one of the anchors on CNBC stated as if it were fact, that the stock market always looks overvalued on depressed earnings. Unless we go back to 1932, this simply is not true. At the ten bear market bottoms of the past 50 years, the P/E ratio of the S&P 500 averaged 11.3 with a range between 16 and 7. The dates of these bottoms and the P/E multiples at the time are as follows: 1) October 1953, 9.0. 2) October 1957, 11.6. 3) October 1960, 16.0. 4) June 1962, 14.2. 5)October 1966, 13.2. 6) May 1970, 13.5. 7) December 1974, 7.0. 8) February 1978, 7.3. 9) August 1982, 7.1. 10) October 1990, 13.8.

Black Blade: Exactly!!! Good article.

MarkeTalkR Powell, timing the markets, Arch Crawford#7126503/07/02; 19:24:37

Thanks for the nice commentary on my post. After posting it, I forgot to mention Arch Crawford but I do so only with reservations about the methodology he uses, i.e. consulting the stars and planets. He has called tops and bottoms of markets on occasion, no doubt about it. And he is calling now for a "FINANCIAL MELTDOWN" between March 27-31. That is strong language. We shall see if he is right.

The cycle framework I refer to has a precedent of working in the past. I read a number of newsletters and I make mental notes of who is hot and who is not. The last time this similar cycle occurred was the summer of 2001 when it was forecast that the US Dollar would top out and decline sharply against the European currencies. The time period was the week of July 4th. Arch Crawford was calling for the top on July 5th, which coincided with the solar eclipse. Crawford was exactly on target and the top came in precisely on July 5th. The US Dollar declined from about 120 to around 112 (if memory serves me right). Based on this track record of the cycle framework, I am more inclined to believe that this cycle is the "real thing" and we should witness the beginning of the demise of the US Dollar.

Black BladePuplava Market Wrap Up#7126603/07/02; 19:47:48


Overvalued Stocks

The problem Wall Street and the bubbleheads on network news are having is selling over-inflated stock prices. Nobody would argue that the economic numbers have improved. It is in the interpretation of those numbers where the problem lies. Despite the obfuscation of facts the market still remains overvalued by any reasonable measure. Nothing is going to change that, outside a severe corrective process or an increase in earnings that borders on the miraculous. No amount of spin is going to propel markets to a permanent higher state of gravity. We are talking about irrefutable economic laws. I believe what authorities are ultimately hoping for is to gradually deflate a bubble without serious side effects. If they are able to manage that, we will have surely witnessed an economic miracle. If Mr. Greenspan can accomplish this he will become the financial equivalent to the Superman of the financial markets.

Black Blade: Again, the point is that the markets are running on illusions and fantasies.

TownCrierIf you only read ONE article all day, let this be the one.#7126703/07/02; 19:48:07

This article offers short and sweet support of my previous post.

HEADLINE: Dollar falls as non-U.S. assets draw buyers

------------The dollar fell sharply against other major currencies Thursday following an upbeat message on the U.S. economy from the Federal Reserve chairman, Alan Greenspan.

...the sentiment in the market is that a U.S. economic revival may not be good for the dollar, as a world in recovery may offer a golden opportunity to diversify out of U.S. asset markets to seek returns abroad.---------------

There's no way for the U.S. dollar to avoid the "great reckoning" that's due, but gold will see you through.


USAGOLDA Simple Thought. . . .#7126803/07/02; 19:58:12

When one celebrates his 54th, he wonders just what that day will bring. Well, this has been a good one. It is with great pride that I look back at the advent of this Forum and the astonishing collection of talent and brain-power it has attracted. I consider its creation one of the great achievements of my life. I extend my humble appreciation to all who see fit to gather here and share a part of themselves as regular contributors. Can I say more? Dare I ask, "Is there a place you'd rather be?" For many, myself included, I think not (family aside). But also, I am twice blessed -- not only with all of you but with an extraordinary staff as you can see from the posts by both George Cooper (MarkeTalk) and Randy Strauss (TownCrier) today -- just a sample of what this firm has to offer. They serve you as they serve this web site and our common aspirations -- spoken or not. Where else in this modern age could you find this level of dedication to not just an inert metal and but an idea -- from posters, to clientele, to staff. I am a proud man in this my 54th year. As we go into this time of renewal for all -- The Rites of Spring in all the world's religions -- I just want to give my simple thanks. Carry on, my friends, associates, clientele and working partners all -- my fellow knights of this Table Round. We have much work ahead of us.
SiochainMarke Talk#7126903/07/02; 19:59:02


Excellent points....much appreciated....though I tend to think rather than the demise of the dollar we are seeing the zenith ...followed by a declining slope but not yet a demise

There may be many interchanges between the three hegemonies of Americas/Europe/Asia re currencies over the coming months. SM may just reverse shortly and have another run up in summer based again on hope and impact of some restocking....and of course....some nice inflation to pump things up.

Also, we can't ignore the drums of war....if you want to talk about cycles...well ...April just may be a war sad since it could be averted but I don't think it is in the plans and views of hawks of all sides.

As to gold, we may have a higher low for a brief period especially as Japan plays its' shell games to keep banks solvent (temporarily)and weak hands are shook out... then gold might enjoy a sudden reversal to the upside...and it will keep moving...physical holdings will become very important to more people....JMO

SiochainHappy Birthday!!!#7127003/07/02; 20:09:09

And may they all be golden!!!

Thanks for this is real gold!!!!!

Cavan ManHear ye, hear ye....#7127103/07/02; 20:10:26

Good morning Japanese gold buyers.

I am watching the markets in awe and amazement. I simply cannot believe what I am witnessing!

If gold is not allowed to do its job under these circumstances and is unsuccessful in breaking out, is it possible the holders of gold paper, recognizing the failure of their golden and paper hedge(s) will sell the market into the tidy bowl?

Japan Economy Shrinks 1.2%; Business Spending
Plunges (Update4)
By Ann Saphir, with reporting by Minoru Matsutani and Daisuke Takato

Tokyo, March 8 (Bloomberg) -- Japan's economy shrank 1.2 percent in the final
three months of last year, leaving the nation in a deeper-than-expected recession
that may force more companies to default on loans and cut jobs.

The decline from the previous quarter capped the longest slide in gross domestic
product since the end of World War II. Economists had expected a 0.8 percent
contraction after a 0.5 percent decline in the third quarter.

The drop in GDP may spoil a monthlong rally that has fueled a 25 percent gain in
the main Nikkei 225 stock average. Analysts said the government hasn't done
enough to end deflation and reverse a five-year slide in bank lending, and instead
is relying on an increase in exports to the U.S. to spur a rebound.

``The days are gone when America gets better and the world heals,'' said Carl
Weinberg, chief economist at High Frequency Economics in Valhalla, New York.
``It took Japan 40 years to get into this hole, I don't see why it will take them
much less to dig itself out.''

The Nikkei rose 0.7 percent in morning trade, extending gains fueled by
expectations the U.S. has emerged from recession and tighter restrictions on
trades that seek to profit from a decline in stocks. The yen was recently trading
at 127.58 to the dollar and is on track for its biggest weekly gain in 3 1/2 years.

The economy was sunk last quarter by a record 12 percent slide in business
spending, as companies from smokestack industries such as steel to
chipmakers like Toshiba Corp. and Fujitsu Ltd. slashed capital investment as
earnings sagged.

Job Cuts

Japan's big four electronics companies -- Toshiba, Fujitsu, NEC Corp. and
Hitachi Ltd. -- have forecast a combined 1.42 trillion yen ($10.9 billion) loss for
the year ending March 31. All four tumbled into the red as sales to the U.S. fell
and they were slow to reduce costs.

Fujitsu will cut up to 4,000 jobs next fiscal year by closing plants, paying people
incentives to leave, and not replacing workers who quit, as Japan's biggest
business computer maker bids to return to profit, senior executive vice president
Takashi Takaya said. The company is eliminating 21,900 jobs this fiscal year.

Four of Japan's top five steelmakers, including Nippon Steel Corp., and NKK
Corp. expect a total loss of $1.6 billion this fiscal year as prices fall and they
take charges to entice workers to quit.

Some companies, like Nikon Corp. and Mitsubishi Electric Corp. are moving
factories to China and other Asian countries, where labor is cheaper, to lower

The shift abroad is also costing Japan jobs, keeping consumer spending from
firing. The economy lost 230,000 jobs in January, and the jobless rate fell to 5.3
percent from a record 5.5 percent in December only because people gave up
looking for work.

Looking to the U.S.

With demand at home weak, the government is looking abroad for growth.
Government officials helped engineer a 17 percent slide in the yen between
September and February to help boost exporters' earnings. Finance Minister
Masajuro Shiokawa today said he's not happy about the currency's 5 percent
increase the past week.

Other government officials are also looking to the U.S. to lead Japan out of
recession. ``We have to admit the economy is in bad shape,'' said Chief Cabinet
Secretary Yasuo Fukuda. ``The U.S. gives hope for an export-led recovery.''

Net exports -- exports minus imports -- subtracted 0.1 percentage points from
GDP last quarter. Exports dropped 2.7 percent and imports declined 2 percent.

``Japan is in the process of bottoming out,'' said Jesper Koll, chief economist at
Merrill Lynch Japan Securities Inc. ``Over the next six to 12 months Japan will do
what it has always done: stage an export-led recovery.''

Still, exports make up just one-tenth of Japan's $4.2 trillion economy. ``Even if
exports start to pick up that's only going to benefit a small part of the economy,''
said Hirotake Araya, general manager at Tokyo Shoko Research. ``Japan is in
serious trouble.''

Consumer spending, which makes up 55 percent of the economy, rose 1.9
percent in the quarter, after falling 1.7 percent in the third quarter and 1.1 percent
in the second quarter. People had to dig into their savings to maintain spending
last quarter, analysts said, a trend that can't last.

Failing Grade

Attempts by Prime Minister Junichiro Koizumi and Bank of Japan Governor
Masaru Hayami to restore the economy to growth have proven ineffective.

Hayami lowered interest rates to zero last March -- reverting to a policy he'd
dumped just seven months earlier -- and has since pumped trillions of yen into
the banking system in a failed bid to get banks lending again.

A separate report today showed bank lending fell 4.6 percent in February, the
50th straight decline from year-ago levels. Wholesale prices slumped 1.3 percent
last month from a year ago.

``Deflation is making it more difficult for companies to pay back loans, which only
makes banks even more reluctant to extend new loans,'' said Atsushi Nakajima,
chief economist at Industrial Bank of Japan Ltd. ``This will continue for a while,
as the government's doing nothing new to fight deflation.''

Koizumi, who came to power last April pledging a speedy clean- up of the
estimated 36.8 trillion yen of bad loans that are choking off fresh credit, hasn't
made good on his promises. With an average of 52 companies going out of
business a day last year, loans are going sour faster than banks can write them

Officials have resorted to tightening restrictions on sales that profit from falling
shares in a bid to boost stock prices to give some respite to banks, which must
account for their stockholdings at market value when the fiscal year ends March

Mr GreshamBirthday thought: MK#7127203/07/02; 20:31:14

Remember, Michael, you just get better, from here on. Call it a harvest or whatever, all your dues paid, your illusions banished back to wherever they came from. Those who will appreciate you mostly do now, strivings for other than your own self-respect seem wasted. A castle of the mind, a place where "everyone knows your handle (?)" (honest, I never kept up with those TV shows).

You've supported an academy of wisdom banished from this world's talk shows, and you've allowed us cheering company on cold nights. You do good work, and you share more than just the work with many, many more. These seeds will return to you in ways you never guessed, through more years than you might expect. Enjoy, and receive the appreciation offered, from all who pass through your gate...

uponroofJapan..... expressing ignorance regarding "abnormal" market behavior#7127303/07/02; 20:45:13

Huh!? I don't know what's going on here but it sure as hell stinks of deceit and desparation. One gets the impression that fear is just biding it's time before it enters for good.

"...Expressing concern about the yen's steep rise against the dollar in recent sessions, Finance Minister Masjuro Shiokawa said he suspected possible market manipulation — and hinted at possible intervention to dampen the currency's climb.

"After checking, and if such things are found, I think that steps may be necessary," Shiokawa said.

His vice minister, Haruhiko Kuroda backed up the notion, saying: "Foreign exchange movements in recent days have been too sudden and I don't think they reflect fundamentals. There have been abnormal movements..."

sectorThink Bigger and Badder#7127403/07/02; 21:21:49


The inexplicable yen turnaround, the inexplicable DOW/NASDAQ rise, the inexplicable "Productivity" Numbers, the inexplicable unemployment numbers, the inexplicable gold smashing effort [Requiring physical far over their normal COMEX suppressing, "maintenance level"], the inexplicable Japanese Finance Minister's negative comments about the inexplicable yen's rise...

These inexplicable events are all explicable IF one analyzes the threat of elderly Mrs. Watanabes taking a small portion of their life savings and placing it in gold.

As many here recall, only 1.7% of the savings at risk draws 1000 tonnes...more than the entire world's quarterly demand values.

If the monetary authorities came to this same realization, about the same time as others then they may have concluded that the threat of a massive gold demand shock is too great to ignore.

Therefore they implemented the only policy they could...jam the yen up, smash gold, dummy the "Productivity Numbers" even more than usual, pump the NKK225 by convincing Koizumi that inflation is an elixir, and most important of all don't TELL anyone ELSE at the Japanese Finance Ministry.

There is one other far more troubling reason for all this upward jamming. Monday is the six-month anniversary of 9/11. Perhaps the monetary authorities know more than they are telling about potential attacks.

Choose one from column A or one from column B.

Either one spells angst and panic at the FED. The normal Master of the Universe's Humphry/Hawkins blubbering was especially sugary this the face of anti-derivatives legislation which runs 180 degrees from his Fed policy.

The Japanese are buying gold as a hedge against the loss of their life savings...not as an investment "Opportunity".

My sister has just returned from Japan after 3 years. The "Average Japanese Housewife" diispises brokerage houses, stocks and particularly the government. Kouizumi shot their hero Tanaka and his foot with the same bullet. Their confidence in ANY finance plan is effectively zero. Will they move to gold? A little.

But that small amount will drain straight from the US Treasury.

SiochainIraq#7127503/07/02; 21:24:24

Quite a conversation going on at MSNBC ...Gen McCaffrey and another militray expert.....bottom line....we MUST go in and take out Saddam......AND we will have to stay for many years ....hmmmn....Iraq...Oil...OIL!

PS UponRoof...Having spent several months in Japan and with gov and execs....they know what's what....story is "face" and (implausable denialability

nugget0Listen to what was on Australian news at lunchtime today...#7127603/07/02; 21:35:00
click on to listen...

Shrinking economy predicted for Japan

WaveriderHappy Birthday MK#7127703/07/02; 22:22:49

What a privilege...I see that I share my birthday with distinguished company! A Golden Birthday to you Sir, and the best of Health. Thank You for the opportunity to participate on this most Precious Forum. Cheers,


mikalChina Summons U.S. Ambassador over Taiwan Minister Visit#7127803/07/02; 22:26:15

Timing is everything it is said. But the evolution of the world economy will be burdened by the consequences of tragic sequences for years, perhaps generations to come. Besides the Middle East powder keg of Arab/Israeli, Afganistan, & Iraq, escalating trade tensions over steel imports, and spreading global terrorism, the U.S. will provoke China using an unprecedented high level visit from a Taiwan defence minister. Another report now states the U.S. tells China it must talk to the Dalai Lama.
Friday, March 8, 2002
China Summons US Ambassador over Taiwan Minister's Visit
Beijing, March 8
China has summoned the US Ambassador in the country to protest against the US invitation to Taiwan's defence minister for a summit, terming it as a "violation of America's one-China policy".
Chinese Foreign Ministry spokesman Kong Quan said the Government has summoned US Ambassador Clark T Randt and submitted representations conveying China's serious concerns over the invitation.
"The US invitation to Tang, despite many representations from China, is an open violation of the one-China policy and the three joint Sino-US Communiques on bilateral ties", Zhou Whenzhong, China's Assistant Foreign Minister said.
Tang would be Taiwan's first Defence Minister to make an official visit to the United States since Washington switched diplomatic recognition to Beijing in 1979.
"The decision will also increase the arrogance of the separatist force -Taiwan Independence Force in Taiwan and damage Sino-US relations" Zhou said, adding that the Chinese government had expressed strong dissatisfaction and opposition to the move.
The latest row in Sino-US relations comes less than two weeks after US President George W Bush visited Beijing for summit talks with his Chinese counterpart Jiang Zemin.
Tang Yuau Ming,Defence Minister of Taiwan, which China considers as a rebel province, will be attending the March 10-12 defence Conference in Florida sponsored by the US-Taiwan business council to discuss arms sales to Taiwan.
Stating that the Taiwan issue has always been the "most important and the most sensitive" in Sino-US relations, Zhou said "proper handling of the issue is the key to ensuring stable growth of bilateral relations between china and the United States".
He said America should "recognise clearly the sensitivity of the Taiwan issue and the graveness of the country inviting a Taiwanese minister".
"If US strictly abides by the one-china policy and the three joint Sino-US Communiques, it should match its words with its deeds, and stop official and military exchanges with Taiwan, so as not to damage Sino-US relations'" Zhou said.

mikalHappy Birthday Michael Kosares and Waverider!!#7127903/07/02; 22:42:00

And thank you to you and all who share in our good fortune here. May this special day & all your days be illumined with unending joy and inspiration.
Simply MeHappy Birthday, MK !#7128003/07/02; 23:34:04

It's a little late for sending a card, so I'll just share one of my favorite T-shirt proverbs.

"I'm over the hill......
(picture old car straining and steaming over the top of a hill)
.......and picking up speed!
(picture car free-wheeling downhill with it's grill smiling brightly)

Many happy returns of the day!
simply me

Black BladeHappy B-Day MK#7128103/08/02; 00:02:06

I raise my frosty mug of Negra Modelo to ya! May all your Birthdays be Golden. Cheers!

- Black Blade

Gandalf the WhiteOOPS ! Sorry to have missed your Birthdays !#712823/8/02; 00:15:20

Hope both the KING of the Castle, SIR MK, and one of the "golden" Forum Posters, Lady Waverider, have many more years as good as these last few years. The Hobbits and I expect to see BOTH your names in the future "HEADLINES".
Happy Birthday, yesterday.

Black BladePGMs Rocketing#712833/8/02; 00:53:39

Though Gold and Silver have been hit for a loss, platinum is higher by $15.00 to $525.50/oz. and Palladium higher by $7.00 to $382/oz. Russian supply difficulties are likely to be surfacing again and Japanese are buyers of platinum once again.

Meanwhile Oil is holding well over $23.62/bbl and NG at $2.79/Mbtu. The USD is floundering in its 70+ year bear market at 0.00346 oz. Gold. And finally in spite of the economic devastation in Japan and insolvent banks teetering on the brink of collapse, the Nikkei 225 is 237.45 points higher at 11,885.79.

- Black Blade

TownCrier'The language of violence', Jensen's second of two summary articles of his observations while in Israel#712843/8/02; 01:11:23

The language of violence: In a land torn by strife, words pave the road that brings destruction to everyone's doorstep

It begins,

-----------Three Palestinian teen-agers are killed by Israeli tank fire while walking home from a soccer game in Gaza. The bodies are returned to their parents labeled "Terrorist No. 1," "Terrorist No. 2" and "Terrorist No. 3."

At a subsequent investigation, the Israeli tank commander said he saw "suspicious movements" and fired before determining what they really were. The three teen-agers then became what Israeli military spokesmen call "superfluous deaths."

Both sides engage in a curious doublespeak to justify the excesses of a conflict that grows bloodier by the day.

Palestinians, for their part, never use the word "terrorism" in describing attacks that kill innocent Israeli civilians. Suicide bombers are "martyrs" to be admired. Their blowing up of discotheques and pizza parlors are "operations" and the victims of those attacks are the "Zionist enemy." While many Palestinians make a distinction between Israelis killed in Israel proper and those killed in the occupied territories, they make no distinction between settlers and soldiers. Both the latter are fair game.----------

Includes an additional photo series by George Kochaniec. Click URL for full article.

In case you missed it a day ago, you can read the first article at the index for 'Inside Foreign Affairs' at the following address:

In the spirit of past price-guessing contests, and in the great tradition of organizational football pools, I wonder if we should take guesses at the day cooler heads prevail and a Palestinian State is formally recognized, leading to a more peaceful coexistence among God's creation?

"Not soon enough" starts the bidding.


USAGOLD / Centennial Precious Metals, Inc.Hard times call for hard assets...#712853/8/02; 01:16:01

Golden Goal

"For as long as cannons have thundered,
they have echoed
with the sound of men yearning for gold."

-- R. Strauss

Black BladeYen Takes Breather on Official Warnings#712863/8/02; 01:35:26


TOKYO (Reuters) - The yen took a breather on Friday after racing near three-month highs against the dollar, with warnings from Japanese officials giving the market pause for thought.

After the dollar suffered its biggest one-day fall in two years overnight and lost over eight yen in little more than a week, Japanese authorities expectedly chimed in with verbal warnings against speculative trading and a rapid rise in the yen.

Finance Minister Masajuro Shiokawa delivered early, saying Japan would consider action if it found any manipulative moves, though many were baffled by what he meant by ``manipulative.''

Black Blade: Japanese authorities want a weak yen against a strong dollar in order to stimulate exports.

SpartacusDollar#7128703/08/02; 01:43:50

Frankfurt, March 7 (Bloomberg) -- European Central Bank President Wim Duisenberg said an increase in the value of the dollar is the reason for the U.S. steel industry slump that led the Bush administration to slap tariffs on most imported steel.
``This deplorable action by the U.S. to protect its steel industry may have something to do with the exchange rate of the dollar as it is experienced by its steel industry,'' Duisenberg said at the ECB's monthly news conference.
The U.S. Treasury, which oversees the Bush administration's policy toward the dollar, had no comment on Duisenberg's remarks, a spokesman said.

Black BladeJapan's Economy Shrinks#7128803/08/02; 01:45:16


TOKYO (Reuters) - Japan's recession deepened in the final quarter of 2001 as business investment logged its biggest quarterly fall on record, putting pressure on Prime Minister Junichiro Koizumi to speed up plans to restore growth.

Gross domestic product, the broadest gauge of the economy's health, shrank 1.2 percent in the quarter, worse than economists had expected and the first time in nearly a decade output has fallen three quarters in a row, government data showed Friday.

The slide translated into an annualized 4.5 percent fall, bigger than the 4.0 percent forecast on average by economists. ``It's a very serious recession,'' said Takashi Kiuchi, economic adviser at Shinsei Bank.

Black Blade: Yawn….nothing new here. It is well known that the Japanese economy is a basket case. All of which makes the sharp rise of the Nikkei all that more puzzling if it were not for the Japanese version of the PPT and extreme fear of Japanese seeking somewhere - anywhere to park their Yen.

TownCrierHEADLINE: U.S. O'Neill Says Strong Dollar Isn't to Blame for Steel's Woes#7128903/08/02; 01:45:37

----------O'Neill, speaking during a tour of the Persian Gulf, said bankruptcies in the steel industry and the dollar's gains against other currencies are "not connected in my mind at all. They are completely separate."

...tariffs, which will be imposed on March 20 and remain in effect for three years, will raise the cost of steel in products from refrigerators to cars by as much as 10 percent, the administration said.----------

The ECB takes issue, but sadly, any elaboration by SecTreas O'Neill as to the "real" cause in not to be found in the article.

Tarriffs on imports. Great... just great. The minority in the export part of this industry dances while the domestic consumers get pinched with higher prices at this collapse (or should I say waning) in "Free Trade", as it were.

Inflation, by any other name...


TownCrierYikes! Let's try that one again.#7129003/08/02; 01:54:34

Tarriffs: The domestic producers (a minority) thus protected from low-priced competions (coming from international exports) surely dance for joy while at the same time the domestic consumers (a majority) get pinched with higher prices at this collapse (or should I say waning) in "Free Trade", as it were.

Inflation, by any other name...

(Anyway, you get the idea.)


SpartacusGreenspan & irrational exuberance#7129103/08/02; 01:55:10

Financial Times; Mar 7, 2002

In the summer of 1996, while Bill Clinton was surfing to re-election on a wave of equity market euphoria and spreading national prosperity, the mood inside the Federal Reserve in Washington was anxious.

Policymakers on the central bank's federal open market committee (FOMC) were concerned that the stock market had begun one of its periodic bouts of financial amnesia and was pushing equity valuations to levels that required increasingly far-fetched intellectual justifications.

Alan Greenspan, the Fed chairman, and his colleagues pondered what to do. Should they direct policy explicitly towards the goal of knocking some of the wind out of the stock market? Or should they keep their focus instead on real indicators of overheated economic activity - goods and service prices, wages - none of which were flashing any warning lights?

By the end of the year, Mr Greenspan had seen enough. In December he delivered his famous "irrational exuberance" speech. The Fed, it seemed, was going to do what was necessary to stop the explosion of an asset bubble of the sort that had done so much harm to Japan's economy a few years earlier. Whether through verbal warnings, higher interest rates, or perhaps even more direct measures such as imposing margin requirements, the central bank looked ready to stop the party.

When the market quickly resumed its ascent after a brief decline following the chairman's remarks, the stage looked set for a battle between the Fed and exuberant investors. But then Mr Greenspan did an odd thing. To be precise, he did nothing. Despite his warnings, there was no concerted attempt to rein back equity prices over the next few years.

The Fed made one small upward adjustment in interest rates in March 1997. But it was not until more than two years later - when the Dow had clocked up several thousand more points - that rates began to rise sharply. Even then, Mr Greenspan made clear that was aimed at a broadly overheating economy of which the stock market was just one component.

This inaction has always been something of a mystery to Fed watchers. Why did the central bank signal such obvious concern about the equity market and then not follow it up? It is not only a matter of historical curiosity but an issue with critical implications for monetary policy in the future.

The mystery only deepened last month when the central bank released the full transcripts of FOMC meetings for 1996. For the first time, they reveal the scale of the Fed's concern about rising equity prices in those early days of the technology-driven bubble.

Early in the year, the transcripts show that Mr Greenspan was not certain that the equity market was indeed a bubble. But by September, he was explicitly referring to it in such terms: "I recognise that there is a stock market bubble problem at this point," he said at the September 24 meeting - the day the Dow closed at 5874.03.

The most forceful argument for the Fed to act came from Lawrence Lindsey, one of the Washington-based governors. Mr Lindsey, who is now President George W. Bush's chief economic adviser, had been arguing for some time that the equity market was overvalued. "As in the US in the 1920s and Japan in the late 1980s, the case for a central bank ultimately to burst the bubble becomes overwhelming," Mr Lindsey said in September.

Why, then, was no action taken? Mr Greenspan has expressed doubt about whether it was the central bank's job to second guess the decisions of millions of individual investors. But this does not fit well with the remit of the central bank to "take away the punch bowl just as the party is getting going," as one Fed chairman put it.

A more plausible explanation is that Mr Greenspan became less certain the market was overvalued. In late 1996, the US was only beginning to see the outline of the improvement in productivity performance in which Mr Greenspan - correctly, as it turned out - became such a fervent believer over the next few years.

But productivity improvements could only ever justify a small portion of the rise in prices. Mr Greenspan himself subsequently fretted that the market was overvalued, telling a Congressional committee in 1999 that it was not a question of whether equity prices would adjust, but when they would.

It is also possible Fed policymakers felt any policy designed to puncture the bubble would cause huge damage to the rest of the economy. Mr Lindsey argued in 1996 that it was important that the Fed act early in the asset inflation process precisely to avoid this problem. But this put the central bank in a bind - the Fed could not be sure that equities had become structurally overvalued until prices had risen a long way out of line with historical trends. By then, the risks of acting to deflate them could have been too high.

A more likely explanation for the Fed's inaction is that Mr Greenspan and his colleagues may simply have felt constrained by their public mandate. It is not at all clear that the Fed could actively engage in a policy designed to reduce the wealth of the American people. Reaction to Mr Greenspan's "irrational exuberance" speech was highly critical. He was attacked by politicians on both sides.

The Fed is highly sensitive to such political criticism. Though it is operationally independent of political control, it derives its authority from Congress, which dictates the goals it should pursue through legislation. The Fed has undertaken unpopular policies on many occasions, but this was different.

If this is the true explanation, then a broader public debate is necessary about the freedom of the Fed to use monetary policy to end a bull market that the central bank judges has run out of control.

Black BladeJapan's Markets Defy Gravity#7129203/08/02; 02:00:04


TOKYO (Reuters) - Investors lined up to ``buy Japan'' on Friday, propelling stocks to another seven-month high despite a deepening in Japan's recession, while keeping the yen near 11-week peaks in the face of complaints by Japanese authorities.

Tokyo's benchmark Nikkei 225 average crossed the 12,000 threshold on Friday for the first time since August 9 as hopes for a U.S. rebound outweighed data showing Japan's recession extending into a third quarter in the final three months of 2001. The mood is in stark contrast to a month ago when fierce selling in stocks ignited fears of a ``sell Japan'' run on Japanese assets that many experts said could cause a hemorrhaging in the portfolio losses of banks and cripple Japan's financial system.

The yen took a breather on Friday after a meteoric rise overnight, but it looked resilient despite a chorus of Japanese authorities' comments designed to reverse its climb.

Many suspect the government's top priority may be to keep stocks strong ahead of fiscal year-end book-closings on March 31, to avert turmoil in the country's weak financial sector. The Nikkei's surge, especially after the government imposed tighter restrictions on short-selling, has sparked talk of a wave of foreign money coming into Japan, with some funds already announcing they would raise their weightings in Japanese stocks.

Black Blade: And so it goes. Living in an illusion. There is no fundamental support to suggest that the overvalued equities in the Nikkei 225 should be rising. "Interesting Times"

Black BladeJapanese gold rush amid fears of financial crisis#712933/8/02; 03:51:42


TOKYO, Mar 06, 2002 (Kyodo via COMTEX) -- Kakuko Arai at first could not decide what to do with the cash she obtained by selling her house after her husband died last year. She ruled out time deposits at banks because financial institutions seemed unstable, but thought stocks could also be risky since their prices are plunging. So she decided to turn some of her money into gold. "I'm afraid the banks would collapse, and I don't know too much about financial products," said the 61-year-old, who bought two one-kilogram bars of gold for about 2.7 million yen at a store in Tokyo's Ginza district. "At least with gold, I know it will not become worthless, whatever happens," she said.

Many Japanese investors worried about the health of Japanese banks and the government's plan to scrap a blanket guarantee on bank deposits on April1 are making the same choice as Arai, causing a bit of a gold rush in the nation. "A major difference from the other 'booms' in the past is that people are buying gold even though the price is rising," said Hitoshi Kosai, Tanaka Kikinzoku Kogyo's general manager for the precious metals division. Kosai said he thinks that although various other factors made investors think about turning their paper assets into gold, the nearing of the lifting of the blanket guarantee was the "final trigger" for Japanese investors.

"But the nearing of the end of the full guarantee made people really think about buying gold," he said. "This phenomenon is not seen anywhere else in the world at the moment." WGC's Toshima predicted that the trend will continue, and that the sales of the precious metal may rise sharply once again when the government lifts the refund guarantee for ordinary deposits in April next year. "I'm sure there are people out there who moved their money from time deposits to ordinary deposits for this year," Toshima said. "These people may think of buying gold in the second stage." Meanwhile, there are signs that some Japanese seeking safe havens are turning to other non-paper assets. Sales of jewelry and art objects in January rose 27% and 13% respectively from the year before at Mitsukoshi Ltd.'s main store in Nihombashi, said KazuoAoki, general manager at Mitsukoshi's corporate communications office. Many of the items, such as diamonds and paintings, were priced at several millions of yen, Aoki said.

Black Blade: Another story from the front lines. The smell of fear is very strong in Japan as Japanese look for safe haven wherever they can find it. Any hard asset will do - after all there is no real return (or even a negative return) on paper investments and in deposits at insolvent Japanese banks. Some even seek refuge in the Nikkei 225 as the government appears to be willing to prop up the market prior to year end "window dressing". Banks must value stock investments at market rather than at the purchase price. So it appears that the sharp rise in the Nikkei has less to do from citizen investors, but rather the new Japanese PPT and gullible foreigners.

uponroofsector#712943/8/02; 06:27:16

Thanks for your thoughts last night. As you say it all goes back to the enormous leverage the Japanese have regarding gold consumption.

Knowing this is the wild card in all these international monetary gyrations one would think the friends of gold would be in the thick of this, having their say. By that I mean an agressive advertising campaign in Japan promoting the advantages of gold.

I cannot help but think of that 52 million dollar marketing budget of the WGC. I have read that they are involved in Japanese advertising but I wonder to what degree. Japan, right now as their banking crisis looms, is perhaps the best chance gold has had in decades. To hold back and 'keep powder dry' is IMHO foolish.

Spend the marketing capital now in Japan! For that matter, pass the hat amongst the mines and raise some more...this is an all out war and perception is the battlefield.

GuidedReminder of Logic From the Giant's Perspective#712953/8/02; 07:03:55

If you knew that gold reigned supreme in all money matters, why would you promote it? In hopes that those of small wealth would be able to share in the giant's standard of living? Not unless this giant has non-human motivations like goodwill toward men.
We really know better. Instead, the giant uses every means, stopping at nothing, to convince the people of the village that there are far better investments to be had.

SiochainEconomy from SUNW & INTEL view#712963/8/02; 07:11:57

Notes from my morning newsletter:
"With all this so called recovery all over the place, it sure isn't showing up in these two monsters(SUNW & INTC). Intel said the wireless communications side of things still stunk. they were selling a few more servers however. they narrowed their guidance a bit, tightening the range that revenues would come in at. but probably the most telling thing said was this "We see no signs of an increase in the economy effecting our business as of yet".

Isn't that interesting? The biggest chip maker on the planet says that things might be rosy, but it isn't showing up at his company. We have heard the same things from Honeywell, GE, CIEN, and a host of other widely mixed areas. How can this be? How can the economists tell us all day/every day that things are going gangbusters, but the heads of the biggest companies on earth say "we don't see it?" Oh boy, don't get me started!

Listen friends, we are seeing an economic dead cat bounce. Nothing more. We don't see this as the start of some new roaring economy, no more than we think this is the start of some new bull market. We have taken great pains to explain how NO economy can go flat for 18 months without seeing a pickup as inventories work off. that is as normal as it gets. But, without a big move in demand, its no more than a dead cat bounce.

Intel says they don't see any big demand pop. GE said the plastics business is flat as a door. CIEN says they have no idea when a recovery is coming. Over and over its the same, "good" economic numbers, but major CEO's saying they don't see it. Can it be that CEO's are being cautious so they can come out later and beat the estimates? That is what a lot of folks think. Baloney. They would like nothing more than to beat their competitors to the punch and say things look great.

WaveriderIn imposing steel tariffs, U.S. hits allies hardest #712973/8/02; 07:13:17

"The controversial U.S. tariffs on steel will disproportionately hurt allies in Europe even though European companies have significantly cut steel exports to the United States in recent years, leaving political leaders in the region angered and perplexed why lesser allies are getting better treatment.

By applying the steepest tariffs on products made in Germany, France and Britain, the administration of George W. Bush has opened itself to sharp criticism from its closest friends."

Waverider: More on steel...

~Mikal, Gandalf - thank you.

Siochain@Waverider#712983/8/02; 07:17:17

Hope you too had a happy one...and future golden ones HB!!!
WAC (Wide Awake Club)Kmart to axe 22,000 jobs - The recovery as begun and there is no inflation#712993/8/02; 08:01:09

Bankrupt US retail giant has unveiled plans to axe thousands of jobs as the company tries to return to profitability.
The company said on Friday that it would close 284 stores in the United States and Puerto Rico, with the loss of about 22,000 jobs, or 9% of its total workforce.

SpartacusBIS#713003/8/02; 08:18:17

BIS' Crockett says central banks must focus on asset prices, not just inflation

----Bank for International Settlements general manager Andrew Crockett said central banks should not just focus on inflation, but also monitor asset prices for risks of financial bubbles.

"I see the risk that policy focussed only on inflation control, beneficial though that is, does not stop the inherent tendency of the financial system towards excess. During periods of expansion exuberance takes over, asset prices are pushed to high levels and then there is a reversal," Crockett said in an interview with the journal Financial Regulator.

"This is not easy to solve. I am not advocating that central banks should target stockmarkets or asset prices. However, if inflation in goods and services is under control, but inflation in asset prices (fuelled by credit expansion) is proceeding rapidly, that is a danger signal," he said.

Crockett said close monitoring of monetary and credit growth can give a useful pointer to the build up of asset price bubbles.

"In the days when central banks focused on credit expansion or monetary aggregates, you would notice rapid credit expansion and ask questions about the risks it was posing. If you are focussed exclusively on inflation you do not see the risks if they do not show up as increases in the price of goods and services," he said.

The switch to inflation targeting by some central banks has been successful in delivering price stability, but it has not prevented periodic boom and bust cycles in asset prices, which remain an unsolved problem, said Crockett.

And in the long run, it is difficult to maintain price stability without dealing with booms and busts, he said.

Crockett said there has been a correction in the asset price cycle which has been well managed in most countries, but which has been difficult to manage in Japan.

"In the case of Japan the unwinding of an asset price bubble has led to a very complex deflationary situation," he said. "(But) I don't see other industrialised countries facing the problem of deflation and impotence of monetary policy."

The Japanese financial situation may be more difficult than has so far been publicly acknowledged, and the most important thing is to carry through reforms beyond the banking system, to improve corporate governance, productivity and profitability in the economy as a whole. Interest rates appropriately when this becomes necessary.

"The Fed is very aware of what monetary policy has to do. They monitor the situation very closely. I have great confidence that they would move to tighten monetary policy when it became necessary to do so. Clearly, it is not necessary at the present time," he said. ----

SpartacusDefining Inflation #713013/8/02; 08:22:58

Defining Inflation by Frank Shostak

--On August 16, the U.S. government will debut of a new type of Consumer Price Index (CPI), one which it says will better reflect true inflation. --

sector@upomroof...The WGC and Other Distractions#713023/8/02; 08:37:01

Marketing gold in Japan is too much like competent action for the WGC to be interested. After all they are the lackies of the cabal. With their leading econo-slut Jessica Cross bleating about how hedging is so good...ooops...bad. Only people with letters after their names can smile so serenly when they have feet in their mouths.

The WGC follows the axiom: "There is only ONE person here who REALLY knows what's happening...that person MUST BE FIRED".

As for the Japanese...they are running out of small safes...they are standing in lines around ther block...they are back ordered 90 days supply of gold. This from a cafe supporter in Japan.

Sleep tight, the politicians and monetary authorities on both sides of the Pacific are exactly what gold bugs want them to be at this juncture...predictable and corrupt.

RockWorld Trade Center safe deposit boxes opened.#713033/8/02; 08:53:49

Did anybody catch that short segiment on CNN i think it was (although i usually give Fox my ratings) where a lady was permitted to open what was left of her safe deposit box that was in world trade center. the tv cameras were with her and panned a room where all the boxes were kept and to me they all looked pretty much like burnt tin cans but the lady was hoping to get some family relics and such and when she opened the box everything but two items was destroyed. Her rings were all blackened with the exception of a red rubie and i also noticed a few of what looked like one ounce shiney gold coins.

My question is can gold take a burning and still survive something like what happened at the WTC? i'm sure some of us have valuables in bank vaults too, I guess thats where the PM insurance comes in the picture right?

sectorA Japan Post I Wish I'd Written#713043/8/02; 09:16:44

Roger Bently Arnold

Japan and the rest of us

There appears to be a coordinated effort between US and Japanese financial institutions right now to get liquidity into the Japanese financial markets and economy ahead of the end of the fiscal year on the 31st of this month. However, this effort would also have to include the federal governments of both countries as well as the central banks. I do not make these statements lightly. This is however, after long consideration, the only logical conclusion I can draw from the movement of money into Japan over the past couple of days and month.

Japan is in its worst recession since WW2 and the BOJ Governor is worried about a run on banks by depositors within just the next few weeks. At the same time Merrill Lynch and others are advising clients to buy Japan. There has been no near term shift in economic policy in Japan that would warrant optimism and a reduction in country risk. No new economic legislation has been passed. No substantial reforms have begun. The BOJ continues to refuse to pump more yen into the banks although the desperately need it and without it will collapse very soon.

The Nikkei was up 237 points today even as the economic news was again terrible. Japan's economy shrank 1.2% in the fourth quarter of last year and bank lending fell for the 50th consecutive month in a row. Both of these are incredibly negative indicators of the trajectory of Japans economy. But, the stock market has jumped 27% in the last month while the yen has begun appreciating against the dollar.

Yesterday US treasury bond yields fell across the board, the dollar fell against the euro and the yen even as gold prices fell. This means that all of these investments were sold at the same time. That is illogical. As they are different assets classes they will often move inversely. The dollar and US treasuries declining simultaneously is fine. But, for gold and the dollar to fall precipitously, simultaneously, does not fit into any financial model.

Remember the inverse cyclical relationship between gold and the dollar. It is like a see saw, one goes up the other goes down. This means that as the dollar fell yesterday gold prices should have risen. The fact that they fell dramatically, $3.60 an ounce, is an indication of massive gold liquidation into the technical buying that would have been caused by traders speculating on gold rising as the dollar fell.

It is an indication that there is either 1) a large single seller, Japan, of both the dollar and gold or 2) a coordinated effort by very large financial institutions to liquidate both simultaneously. It is probably a little of both. This however would require prior knowledge of what counterparties would be doing because it violates financial rules. No gold trader is going to sell gold while the dollar is declining so rapidly on an intraday basis unless they know that others will be doing it and why.

The only logical conclusion I can draw from this is that Japanese banks are aggressively selling assets to raise cash to 1) meet liquid reserve requirements and 2) to buy stocks to bolster the value of equity reserves. At the end of the Japanese fiscal year, March 31, the stock assets of the banks are marked to market as an asset for reserve requirements and this year the governments guarantee on deposits at banks drops from unlimited to $75,000 per account. Both of these mandate immediate bank and equity cash injections in order for Japan to maintain the illusion of a solvent banking industry.

If it was only Japanese repatriation going on that would be fine and we could explain it. What is troubling though is the buy signal being put on Japan by Merrill Lynch and other western investment banks. This is illogical and can only be explained as a coordinated effort to buy Japan no matter what. That is called manipulation and I believe it is the only logical explanation for what is occurring.

In order for an investment of any kind to increase in value either the expected future risks have to decrease or the future rewards increase.

Neither is the case within Japan. We must then consider Japan within the context of the rest of the investments available in the world.

In that case we could only expect investments in Japan to increase in value in the face of negative domestic news if the downside risks everywhere else in the world were greater than in Japan or the upside potential everywhere else was lower than in Japan.

This too is not the case.

There is no logical case of any sort to be made for investing in Japan right now. Their economic, financial and political potential is decreasing on an accelerating basis technically, fundamentally, cyclically and secularly. There is literally no good news and no expectation that there will be good news.

The only logical conclusion is that the world is trying to prop up and postpone the collapse of the Japanese financial system and economy in an attempt to mitigate the negative shock consequences and potential cascading effect it could have on the rest of the world. The current events should give every investor in the world reason to pause and consider the potential near and long term economic prospects for world growth.

Carl HForbes Layoff Tracker#713053/8/02; 09:28:39

I have been watching the Forbes Layoff Tracker for some months. At first they had a running tally of layoffs. Then that tally got reset, I think when it passed or got close to 1,000,000. Since then it had climbed to around 80,000. Now they seem to have removed the tally all together and only have a listing of layoff headlines.

It really feels like we are in "The Matrix" some days.

Cavan Mansector#7130603/08/02; 10:32:36

Who does the author write for?
WAC (Wide Awake Club)Graverobbers dig for gold fillings - Barbaric acts in search of a barbaric old relic#7130703/08/02; 11:05:39

A team of gravediggers dug up scores of skeletons from French Riviera cemeteries and stole their gold fillings to make jewellery, police have revealed.

The gang of four worked as undertakers by day but by night they used their inside knowledge to raid graves around the Mediterrannean city of Nice.

They stole mostly gold fillings, gold teeth and wedding rings, which they melted down to turn into jewellery and sold to local traders. They were caught after an overnight stake-out, a police spokesman said.

BoilermakerGold durability#7130803/08/02; 13:28:04

Gold will melt at 1945degF and vaporize at 5380F... so chances are your gold will survive most fires in good condition and even if melted it will still be recoverable.
Silver a little less fire resistant at 1761F melting and 4010F vaporizing temps. If it's stored in a steel container the container will melt at about 2800F. It will not oxidize as do diamonds etc.

The maximum flame temperatures in a house fire reaches about 1800F but most of the time it is far less and your gold should be stored in a container that will protect it from direct flame impingement. Of course you can can store it underground where it remains fireproof.

Black Bladesector #71304 - Japan#7130903/08/02; 13:32:20

Exactly! As I have said the whole situation in Japan is nothing more than an illusion. There is no fundamental basis for a rapidly rising Nikkei 225 in the face of a deteriorating economy and a woefully insolvent banking system. In effect this is all "window dressing" ahead of year-end accounting. As far as selling the USD and Gold, this too is to shake confidence and shake loose Yen for propping up the Nikkei. It is all an Illusion. I wait to see how it all shakes out after "April Fools Day". Cheers!

- Black Blade

Black BladeRock #71303 - Gold Insurance#7131003/08/02; 13:40:36


That account reminds me of the TV cameras in Kobe, Japan after the big earthquake when an old woman shuffled through the ruins of her home and found a box. She opened the box and it held gold bullion while her cash was burned. Gold and Silver are forms of portfolio insurance and when we see these events on TV it drives home the point. While the Wall Street Pimps and Media Trolls hate to see this kind of coverage, it is undeniable that when it really counts one cannot beat physical Gold and Silver in desperate times. Cheers!

- Black Blade

Black BladeUnemployment Data - Bureau of Labor Statistics#7131103/08/02; 13:54:57


Total employment rose by 851,000 to 134.3 million in February, after seasonal adjustment; this increase more than offset a large decline in January. The employment-population ratio increased by 0.4 percentage point in February, returning to its December level of 63.0 percent.

Black Blade: The operative words here are "seasonal adjustment". There is of course no mention of those who have simply given up actively looking for employment and are therefore now considered "employed" as far as the BLS is concerned. The BLS acknowledges that these official unemployment numbers are bogus (as per BLS report 864 and 871). Meanwhile today Kmart announces the closure of several stores and the firing of 22,000 workers. Also, JPMC will be firing several workers as well. The "Bone Pile" continues to grow with the addition of "nonessential" people. There is even word that the US Post Office will cut loose 10,000 workers. Meanwhile, the Media Trolls are making it "official" after several months saying that layoffs are not indicative of a recession, however this morning the cry is - "The Recession Is Now Over!" "Interesting Times"

slingshotMK And Waverider#7131203/08/02; 14:10:42

Get your motor running! Get out on the Highway!

Wishing you both a Happy Birthday.



Black BladeJPM CHASE TO SWING AX #7131303/08/02; 14:12:26


March 8, 2002 -- J.P. Morgan Chase & Co. is preparing to hand out more pink slips in its investment banking division, in the latest sign that the slowdown on Wall Street isn't reversing anytime soon. In the next few weeks, J.P. Morgan will begin a new round of job cuts in its merger and client coverage areas within its banking arm, executives close to the firm told The Post.

The firm is considering reducing the staff of those areas by as much as 10 to 15 percent worldwide in order to reduce overhead amid an earnings drought, the executives said. The latest cuts, which will be focused largely on senior-level bankers, will put hundreds of bankers out on the street.

Black Blade: Gee what a shame.

slingshotMK and Waverider#7131403/08/02; 14:13:44

Screwed that one up too

BORN TO BE WILD is what it should say. Sorry.

USAGOLD / Centennial Precious Metals, Inc.Live life like you MEAN it...#7131503/08/02; 14:48:37

U.S. Liberty $10 Eagle
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Chris PowellDurban CEO will be allowed back in South Africa#7131603/08/02; 15:02:44

Durban CEO will be allowed to return to South Africa:

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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BoilermakerTreasury Market#7131703/08/02; 16:27:17

What will be the effect of the week's change in interest rates on the interest rate derivitives of JPM? Any other signs given by this move?

Treasuries Suffer Year's Worst Week
By Jon Herskovitz

NEW YORK (Reuters) - U.S. Treasuries plunged on Friday, wrapping up their worst week of the year, as strong employment data and an upbeat economic report card from Federal Reserve Board chief Alan Greenspan convinced bond investors interest rates will head higher in coming months.

CoBra(too)Warning : Histo(e)rical Rant - scroll by! #7131803/08/02; 16:57:22

As I was tidying my office today I was coming across a year end 1989 S&P's Stock Guide. Only 13 years back, though what a difference the new economy has made. Most of the old house-hold names are gone and the new ones are already on their way out.

The guide didn't now Amazon yet, but AMAX and Amax Gold are gone (the first to Cyprus and the latter to Kinross). Cisco was only known as "The Kid" and Yahoo was some weird shriek of victory. And Enron, which will historically be known as the equivalent of the GS Trust - the first mutual fund - back in 1929, used to be a back alley pipeline co.

Seems like history is catching up fast these days.

The global economy is (was, the elitists say?) at the brink and so is the monetary system. A system backed by nothing than promises of pay back at some time in the future.

In a future when we're either dead or the promised payback has depreciated (inflated) to a shadow of its original value (purchasing power).

When the last global creditor, the Japanese people turn to gold - notwithstanding the short term manipulation of the Yen and the Kabutocho - it may seem prudent for the lesser savers to rethink their investment strategy.

... and as the US is starting to turn to protecting what's left of their basic industry - the scenario is starting to get ugly in every reality. A reality, all the statistics of BLS and similar institutional statits can corrupt, but not correct.

The latest semantics of AG remind me of the walker (not johnny) of a tightrope, without a pole. Mildly positive on the economy - though not too positive,as it could mean higher interest rates. Poor guy, at his age he would probably prefer a classy nursing home with some Randian Ayn-gels.

OK, I'm off skiing and just want to repeat it's time to concebtrate on your investments returning instead of a return on your investment - got gold? - See U cb2

Canuck@ sector#7131903/08/02; 17:11:56

Re: your 71304, excellent find.

A must read for anyone concerned about Japan and confused about market actions in the last couple weeks.

Thanks sector buddy, clears some cobwebs.

SiochainDaily Observations#7132003/08/02; 17:56:08

If I may (not trying to sell anything!!...)but to provide source of good info) ... Roger Bentley Arnold puts out an excellent free daily newletter....well worth getting (either use above or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. )

Although he is involved in mortgages his take on the economy is excellent as evidenced by this morning's article on Japan and the Rest of Us

R PowellBirthdays#7132103/08/02; 18:05:16

A Happy One to each of you, Michael and Waverider!
Waverider, as a member of the fairer sex, I'll not ask but just assume that you are young or, as was Jack Benny repeatedly, just turning 39.
M.K., I beat you to 54 by three months. Whenever I'm called an old man, I stare over my glasses and reply, "I'll dance on your grave you young pup." Now that you've joined Methusala and me and the rest of the AARP club, you may find this reply helpful.
Another good answer when questioned as to the longevity of your consciousness; "I'm as old as my tongue and a little older than my teeth."
May we all live long enough to see both gold and silver fairly valued at least one more time. After that we'll pass the torch as we must.
Happy Birthday
Happy Weekend to All !!!!

LeighHappy Birthday#7132203/08/02; 18:27:42

A very happy (though belated) birthday to you also, MK and Waverider!!!! I hope you both had a wonderful day.

Good things seem to come in waves (a bad pun, but a compliment to you, Waverider) - my kids went to three birthday parties last weekend, and my daughter will be going to another one tomorrow. Last weekend we were very busy and ate out a number of times, and EVERY restaurant we were in had someone celebrating a birthday. 'Tis the season, I guess, though I never noticed March being an especially busy birthday month before!

MK, the jewelry you sell is exquisite. I've had no end of compliments on the little flower earrings.

Greetings and best wishes to all.

Black BladeOil and gas markets are poised for 2003 rebound, say industry executives #7132303/08/02; 18:32:44


HOUSTON, Mar. 8 -- Increased demand for oil and natural gas should push up commodity prices in 2003 or maybe even sooner, said a panel of five industry executives at a semiannual oil field service industry outlook breakfast Friday in Houston.

"Last year, industry [capital expenditure] was up 70%, because every company knew that, if they drilled a gas well, they would get rich," he said. But that huge jump in spending resulted in just a miniscule 0.5% increase in US gas production.

In fact, production during the fourth quarter of 2001 was down 2% from the same period the previous year, Papa said. That's largely because decline rates for US gas fields have escalated to an estimated 26% last year from 16% in 1990 and will likely hit 29% this year, he said. As a result, Papa predicted, "It will be extremely difficult to grow the US gas production base" before 2010, the earliest period by which a pipeline can be built to move Alaskan gas to the Lower 48.

Oil market fundamentals may be much tighter than many people think, said Matthew R, Simmons, chairman and president of Simmons & Co. International, Houston. Russia and other former Soviet republics are credited for 56% of the recent increase in oil production outside the Organization of Petroleum Exporting Countries. "But there are not reliable data to confirm that supply," Simmons said. "Some of that production gain may have been low-hanging fruit," said Simmons. If so, he asked, "Is that production surge sustainable?"

Black Blade: Even when drilling for NG was at a record there was only a miniscule 2% increase in production. We are headed to a record NG crunch once the supply overhang is depleted. The oil supply situation is more problematic. The US is hostage to the whims of the former Soviets Republics and OPEC. None of which is a desirable situation for the US. If the US is denied oil by either group, there will be war - there's no choice.

Black BladeBaker Hughes: US drilling activity continues decline #7132403/08/02; 18:51:18

By the OGJ Online Staff

HOUSTON, Mar. 8 -- Drilling activity in the US has continued to decline, with rotary rigs down 13 from a week ago-reaching 769 this week-and down from 1,158 rigs during the same period last year, officials said Friday at Baker Hughes Inc., Houston.

Similar to the trend seen last week, drilling activity was driven largely by declines in land operations and drilling for natural gas. Of the rigs working this week, 624 were drilling for gas, 15 fewer than a week prior. Meanwhile, rigs drilling for oil were up 2, reaching 144 for the week, with 1 rig remaining unclassified.

Black Blade: "Energy Crisis" part 2 coming soon.

WaveriderLeigh, R. Powell, Slingshot, Siochain#7132503/08/02; 19:01:56

Thank you, you're all very kind. may ask...but yes, 39 seems to roll off the tongue quite nicely (early/mid 40's and as fit as a fiddle)! I'm convinced that daily exercise is one secret to health, youthfulness, and longevity...and the others are...well...secrets! Cheers,

Black BladeWaverider#7132603/08/02; 19:12:36

I hear that! A couple of hours a day for a good solid workout burn in the gym and then you feel great the rest of the day.

BTW, Happy B-Day!

- Black Blade

Canuck@ sector#7132703/08/02; 19:15:00

In the last hour I have re-read your Japan post half a dozen times. It is indeed enlightening.

I went to the bank the other day and stopped at an ATM machine to grab a couple bucks. A very small notice was posted on the corner of the monitor, "ATM transactions have been increased from $1.25 to $1.50." The first thing I said to myself was, "How much money do these banks want to make?" This is after recalling that banks (ie: Royal Bank in Canada) had record profits in the last quarter. The second thing I thought was, "covering increasing loan loss provisions".

After your post today I am thinking about numerous posts whereby 'dumb-ass' decisions by government is (ultimately)paid by the 'little guy' and how this relates to the bank 'ATM increase'.

And now I think how banks = government, the 'monetary relationships' are probably far more scarier than one can imagine.

And here is my conclusion. Gold took a beating this week, maybe some 'irrational exurberance' of 'hot money' leaving the gold sector to chase what's hot. So be it. In 2006/2008 when the battle for oil/NG becomes ultra-fierce (rock-on BB)and demographics, such as the edge of baby-boomer retirement hits, this massive, manipulated, piece-of-sh*t money swindling charade will strike every man, woman and child across the skull with an anvil.

Japan is an old society that's been there, done that and got the T-shirt. It's a country that is tired, broke, out of resources, out of time and beat. End of story. Anyone that can't see out into a 10 year horizon is euchred.

Gold promised to break in 1999 and it promised to break in 2000. It was poised in 2001 and now gold yaps a storm in 2002 and 2003. It may be time and maybe, it's not, (a) I don't know, and (b) I don't care. This world is going to get very scarey soon enough. Anyone not preparing is not seeing the big picture, the 'long' picture.

I again thank you for your message today, it was 'cut-and-pasted' into my 'gold' book and is entitled "An All Call to Save Japan; If She Breaks The World Will Follow"

Have a golden week-end.


Black BladePuplava Market Wrap Up#7132803/08/02; 19:33:51


The markets could be in for a rough ride and this rally could be cut short if companies don't deliver as projected. More important than this quarter, which has already been pre-spun as a loser, is what these companies say about the future. Analysts are projecting very hefty profit gains in the second quarter. Many will be watching closely what companies say about the second half of the year. Judging by what companies are doing, such as selling off plants, writing down impaired assets and laying off more workers, it would be a miracle if these companies could deliver the high double digit miracles analysts are forecasting. The numbers are not adding up between what companies are reporting, what they are doing, and what Wall Street is projecting. Even the economic growth rates of 4 to 5 percent for the second half of the year don't look believable. Fed
Chairman Alan Greenspan also had trouble swallowing the jump in the activity numbers that were reported.

Black Blade: The investing public will be watching. Next "earnings season" could be a "make or break season". If earnings disappoint, then the markets could tumble hard and a lot of people will be asking a lot of embarrassing questions.

RocketmanTariffs & their unintended consequences#7132903/08/02; 20:20:30

Recent imposition tariffs are eerily reminiscent of a bygone era. Tariffs (like most regulations) invoke the law of unintended consequences. Some of the unintended consequences of the Smoot Hawley tariffs in 1929 were reciprocal tariffs. Another was that American farmers lost 25% of their market overnight. This led in turn to massive default on farmer's debt and bank collapses. 10,000 banks closed their doors in four years. Years of global economic turmoil eventually gave rise to world war II.

We ought to take a lesson from history! I understand the "fortress" America mentality and the pressure from the left which gives rise to this type of fuzzy thinking. Let us consider what the law of unintended consequences might bring us this time as we introduce tariffs on steel and lumber and what else? Might these tariffs be a trigger as they were in 1929? What effect will they have on an already faltering Japan (the second largest economy in the world)?

Black BladeMining boss can come back#7133003/08/02; 20:21:02,4186,2-8-24_1154105,00.html


Pretoria - Home Affairs Minister Mangosuthu Buthelezi has instructed that Mark Wellesley-Wood - the chairperson of Durban Roodepoort Deep gold mine deported last week - be allowed to return to South Africa. The minister said in a statement on Thursday that he had instructed the department to re-issue Wellesley-Wood's "temporary business permit, remove his name from the stop list and re-instate his visa exemption".

Black Blade: This soap opera is likely to continue. Roger Kebble has been booted from the board after his failed coup attempt. "Interesting Times"

Black BladeOil output cuts 'threaten US recovery'#7133103/08/02; 21:04:09


Opec's output is at an 11-year low Oil producers cartel Opec risks slowing down economic recovery in the United States unless its steps up oil production by 1 million barrels per day, a US energy agency has warned. Its current output quota is at its lowest level since March 1991, analysts say. Sticking to current output limits threatens economic revival not just in the US but globally, the US Energy Information Administration has warned.

"If this quota is observed, OPEC efforts to boost (oil) prices could result in prices well exceeding their target, just as the U.S. and world economies recover," the EIA said in its monthly Opec update.

Black Blade: Oil is the blood of the economy, without it the economy dies. It is no wonder that the US Government position is that OPEC should provide "Cheap Oil" to the US. Then again, are we not in an "economic recovery" as the Wall Street Pimps and Media Trolls say? Hmmm…

Black BladeAndersen hit again as it loses Freddie Mac#7133203/08/02; 21:29:35


Andersen suffered another blow in its battle for survival on Wednesday when it lost the audit of Freddie Mac, one of its largest clients by revenues. The professional services firm, which is threatened with ruin over its role in the Enron scandal, had been the only auditor of the giant US housing finance institution in its 32-year history. The defection follows that of Merck, one of the world's largest pharmaceuticals companies, last Friday, and raises further questions about the viability of Andersen's business.

Black Blade: The client list grows shorter day by day. Yesterday Delta Airlines dropped AA as auditor. They also agreed to plead guilty to criminal fraud in a plea bargain agreement with details yet to be released. They are the subject of numerous investigations, and numerous law suits have been filed against the firm. Any company that retains AA as auditor risks being tainted with the same brush as Enron and Global Crossing and earnings reports are suspect. "Interesting Times"

The CoinGuyBlack Blade; All#7133303/08/02; 22:32:58


Have'nt had the time to post as of late, but have been watching economic developments. Was surprised you hadn't commented on the "sudden" rise in black gold and giggle gas over the last few weeks; although felt you made up for it today...I call it giggle gas because of the gains in fiat I've had over the last few weeks. Sure made me giggle when I turned it into the yellow metal this afternoon.

As far as the general market goes, I guess I'll need to apologize, because I'm just not buying into the fantasy their screaming as a recovery, and I happen to think any future moves will be squelched by higher oil prices and natural gas. Not to mention a profits recession for business. In fact, I've never heard a bunch of cackling geese scream recovery this loud in my laugh; this alone doesn't allow me to be on the same side of that trade. An economic stimulus package? I thought we were never in a recession. Frankly put, I'm getting pretty damn scared at the incompetence; err or the obvious manipulation. Depending on which side of the fence your standing on...

My friends in the pits are scared of's looks as though we could or should be headed in this direction. Have been reading(or rereading) FOA's commentaries with serious interest. Between April and July of 2001 prove to be very interesting. His scenario is looking, well should I say timely, although not in a timely fashion? (Huh?) At any rate, his scenario is spot on...and look forward to any further updates in the future...

Had elk steaks tonight and was thinking of you as we were talking over the fire.


Stopped into a new local coin store today. Was throwing the usual salvos back and forth that I do when I meet a new coin dealer. Interesting thing was, I was interrupted twice. The first time was a phone call to inquire about mutual funds that hold bullion coins. The second was a person who had 500 dollars to invest in gold or silver, and wanted to know the proper route...

I asked my new friend does this happen often. I have to admit at this point I was pretty damn curious. He looked me directly in the eyes and said, "about ten times a day...tiring too".

Thought it was a nice nugget to pass along. There seems to be some interest from the general public out there. If you have any friends who inquire...lend them your knowledge, you probably know more than you realize.

I spoke to another friend, who initially called about a computer question after getting home. The second question was about Barrick taking over Homestake. Previously we had never discussed Gold, but knows I'm knowledgable on the subject. Come to find out he was a long-term shareholder of Homestake Mining.

As an Investment Advisor it was the easiest "sell" recommendation I've ever issued, but rest assured Newmont Mining will have a new shareholder come Monday.

Yes Michael I was listening.

Take care all,


Cobra(too) - A rant? not hardly...well reasoned opinions should be the order of the day. It was befitting; I received my new S&P book today. I mulled it over as I was looking over the Preferreds, but I mulled over what you had to say with more interest...

The CoinGuyHmm....#7133403/08/02; 22:37:26

Since my personal assistant isn't typing this I have to apologize for my own incompetence...

laugh = life in that second paragraph.

My best to all


uponroofJapanese Government Bonds(JGBs) ....more trouble.... #7133503/08/02; 22:40:48

Couldn't go into the weekend without finding something to consider regarding the Japanese situation.

More problems for banks who are holding JGB 'no win' dogs.

Issued: March 4, 2002
Bond-auction scare sparks talk of reform

"...A rumor is quietly circulating among traders that bids by financial institutions nearly fell short of offerings at the five-year government bond auction on Feb. 7. If bids fall short of offerings, confidence in auctions could be lost, sending long-term interest rates soaring.

The 1.18 bid-to-cover ratio for the day was a record low for a five-year government bond.

The only thing that saved the auction from a crisis situation was a major securities brokerage that bid at a lower price than anticipated by the market, even though it did not want to buy the bond, according to one market participant.

The auction's unexpectedly poor performance shook the government bond market. The yield on 10-year bonds rose to a 13-month high of 1.57%. Some traders say the yield would have risen much higher if bids had not matched planned sales..."

Issued: March 4, 2002
JGB market racked with problems
From Moody's monitoring to stalled reforms, bonds face long haul to recovery

"...The ministry is worried that government bond sales could add to Japan's economic woes. The financial system could fall into turmoil if banks with a large volume of government bonds suffer losses on their portfolios. If the rise in government bond yields, meanwhile, nudges banks to raise their lending rates and housing loan interest rates, businesses and households could suffer.

Saturating market

Another area of concern is that government bond issues are snowballing. In fiscal 2008, Japan plans to issue 127 trillion yen worth of debt to refinance older bonds reaching maturity. It will be difficult for the market to absorb the issues, which will reach 10 trillion yen per month, unless a wide range of investors are willing to buy.

The ratio of Japanese government bonds held by the public sector and banks is higher than the ratio for U.S. and European government bonds, while overseas investors hold roughly 6%, just one-sixth the amount of global investors' holdings of U.S. government bonds. Individuals hold less than half the amount of Japanese government debt than they do U.S. debt..."

Black BladeCoin Guy#713373/9/02; 00:16:20

It is quite a coincidence that tonight I had elk steak, spuds, corn and of course Negra Modelo. I can't wait to "accumulate" more game for the freezer.

I have been watching NG and oil for quite some time. Today NG reached $2.80/Mbtu and NY Crude is $23.84/bbl. It appears that NG will bounce much higher as drilling activity is falling off fast and as a critical commodity for domestic electricity production, we will see a repeat of the "Energy Crisis" that we saw last year in California. If there is an economic recovery as the pundits say, then we are definitely in trouble as there is absolutely no way that production could be ramped up on short notice. BTW, I see that Sen. Diane FineSwine (D-CA) is determined to restrict use of coal with some new carbon credit legislation. Yeah, that's just what is needed.

Economic recovery? Hmmm… I saw Labor Secretary Elaine Chou on the tube giving an interview on CNBC and alluding to there having been no recession. I wonder what rock she's been hiding under for the last couple of years. I guess the wealthy and powerful really are different than the citizen in the street. They have the attitude of Marie Antoinette - "Let them eat cake". When people like these live in an Ivory Tower, they simply do not see the world as it is but rather through rose-colored glasses. You could say that this is the "Stepford Administration".

Yes, I believe that the higher NG and oil prices accompanying rising demand will quash any attempted economic recovery. We now see that Dubya has placed tariffs on foreign steel to protect American steel makers as it is a national security issue. We should be looking at energy the same way. Without "energy independence" we are subject to being held hostage by oil producing regions around the world that despise America. We also have not done much to efficiently develop natural gas reserves, build up energy generating capacity or upgrade the decaying energy grid and build more NG pipeline capacity. Energy is an even more important national security issue. Without energy, there is no economy.

As far as the US economy is concerned, I just see so much manipulation of the data and dubious earnings reports based on wishful thinking (Pro Forma, operating earnings, etc.). This house of cards will come tumbling down eventually. As always I say get out of debt, get Gold and Silver portfolio insurance, get enough cash for several months expenses, and get a family (or personal) nonperishable food and basic goods program started. And of course hope for the best - but at the very least be prepared.

Anyway, I have another Negra Modelo to finish. Cheers!

Black BladePOG After Hours#713383/9/02; 00:20:59

I have noticed that after hours tonight, the POG has been so far +$1.10, the +$0.70, and now +$1.60. Now where is this after hours market? Strange indeed ;-)

- Black Blade

USAGOLD / Centennial Precious Metals, Inc.A complete gold education on demand -- yours for only $ 5.95 !#7133903/09/02; 05:35:51

The ABCs of Gold Investing

ABCs of Gold by MK"Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.

"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'

"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

TownCrierFor the same money I'd rather have 29,000 of these $10 Liberties#7134003/09/02; 06:59:18

(from The Scotsman -- March 9)

On 30 July the US government is to sell the most valuable gold coin in the world - the fabled 1933 double eagle $20. After it was struck, Roosevelt took the US off the gold standard in an effort to help the economy out of the depression.

All the 1933 double eagles were ordered to be destroyed but ten are known to have escaped into private hands. As they had never been "issued" as coinage, they could not be legally owned and were seized. The one to be sold jointly by Sotheby's and Stack's was returned to the US Mint in 1996 and has been authorised for sale, with an estimate of US $4 - $6 million.

One coin, or one BIG shiny pile. That equation solves itself.


CanuckBonds hammered#7134103/09/02; 07:03:21

CanuckUS debt hits $6.003 trillion on 2/28/02#7134203/09/02; 07:04:48

TownCrierBeen here yet?#7134303/09/02; 07:08:05

Q&A: What you need to know before you buy your first ounce of gold...
CanuckRunaway household debt#7134403/09/02; 07:08:27

CanuckConsumer debt#7134503/09/02; 07:13:03

Since 1950 consumer disposable income has been higher than expenditures (savings). In 1995/96 expenditures have been higher and are setting records.

This is a great read called "The Incomplete Recession"

CanuckGreenspan's death wish#7134603/09/02; 07:17:57

AG 'will allow' a pinch of rising prices to help corporate profits. No wonder the bond markets are freaking; how will the USD respond?

Risky business as the author notes.

TownCrierCanuck -- Re: bonds hammered#7134703/09/02; 07:22:33

From your article:
--------Yesterday, investors sold off bonds for the sixth consecutive day in both Canada and the U.S., sending the U.S. 10-year bond for its biggest one-day slide in four months after Mr. Greenspan said the economic recovery was "well under way," ......."It was ugly, a really bad day," said Corey Redfield, chief fixed-income strategist at U.S. Bancorp Piper Jaffray in Minneapolis. "The root cause of it is Greenspan. Yields shot up after his comments and they never looked back."

Just begin to imagine the worse slaughter in the 30-year bonds, were the Treasury still trying to issue them, that is! Maybe now more people are beginning to see the subject of this old topic a bit more clearly. Scroll down to my following post which can be found at the link given above.

site steward (10/31/01; 11:16:31MT - msg#: 64433)
SUBJECT: Suspension (Cancellation) of 30-yr Bond as a Financing Tool

TownCrierpreemptive comment#7134803/09/02; 07:33:06

Yes, I'm fully aware the near-Thirties are still on the market, but they are now in limited/diminishing supply, thus lending a modicum of price-support.

Related item, per Wed/Thursday's news, I wonder what success ML will have as they try to float their own version of the long bond...


WaveriderLocal gov'ts in dilemma over public deposits#7134903/09/02; 08:25:54

"The question of whether Japan's 3,200 local governments will withdraw public savings from banks in response to the planned end to the national government's full deposit protection has left politicians and regional bankers wringing their hands.

Prefectural governments face a dilemma over the need to protect huge public deposits at banks -- whether to withdraw them for investment elsewhere and risk frightening local residents into moving their own money or leave them in place.

Bank of Japan statistics show the 3,200 local governments had 19.9 trillion yen in deposits at 163 banks as of Sept. 30. Of the total, 99% is comprised of deposits of more than 10 million yen per account.

Responding to a Kyodo News poll in January, several of Japan's 59 largest local governments acknowledged the possibility that rumors or news of their governments withdrawing their savings to cope with the end of the full protection could prompt people to follow suit, leading to a series of bank runs.

Teruyuki Miyake, an economics professor at Wako University, said, ''Most local governments will likely shift bank savings in view of the abolishment of the full guarantee, as they fear they could be sued later by citizens if they lose pubic deposits by failing to take precautionary steps in light of the refund limit.''

Waverider: Japan just gets more interesting each passing day. Could this be the ignition switch for a bank run? A little ironic, isn't it...that it may be government leading the way! Cheers!

KnallgoldInterest rates rising#7135003/09/02; 09:22:21

As the interest rates begin to rise now,will we see more problems emerge at the IR-derivative monster JPM?What if we have a slow and gradual rise,can it help them?

Besides that, it tells me high inflation=higher Goldprices coming,Another problem eventually brewing at JshortPM's.

WaveriderQuote of the Day...#7135103/09/02; 09:31:54

"Oh most excellent Gold...who has Gold has a treasure that helps souls to paradise."

Waverider: A Golden day to All...heading up to the alpine for awhile - heli skiing if conditions permit...YEEEHAAA...

shadesjapanese deposit insurance#7135203/09/02; 10:15:18

when japanese banks cap deposit insurance at a level equivalent to 75,000 us dollars what would stop a depositor who has more than this amount to set up multiple accounts to stay below the cap?
KnallgoldReport: U.S. military told to prepare nukes#7135303/09/02; 10:52:45

China, Russia, Iraq, North Korea, Iran, Libya and Syria named.The first two are euro supporters.The $ is backed now ONLY by military power.
AU_PoorMore questions on Japan's deposit insurance#7135403/09/02; 11:18:33

Why would anyone keep ANY money in a banking system on the brink of a massive failure? Wouldn't such a failure deplete the fund, no matter what were the limits per account?

One of the largest potential financial disasters in hisory requires the one category of insurance which has been proven over the centuries...

Cavan ManKnallgold#7135503/09/02; 11:39:56

One can follow the Gold trail in addition to the Judeo-Christian heritage trail and readily see that it's "all leading up to something."
Old YellerShades;deposit insurance#7135603/09/02; 12:30:51

Shades of the S&L's in the 80's.They actively encouraged that strategy,US taxpayers provided the safety net,thanks very much.
Black BladeA richer market may be here to stay#7135703/09/02; 14:01:00

Investing tip: Is it a new bull market or a sucker's rally?


In recent years, stock valuations reached record highs -- even with the economic downturn. Standard & Poor's this week said the price-to-earnings ratio on its S&P 500 Index -- a widely followed barometer of the market's valuation -- reached an annual record of 46 for 2001. (S& P uses income from continuing operations figures, not pro forma.) By comparison, the historic average is 14.

"The historical average is no longer valid," said Joe Liro, equity markets strategist at Stone & McCarthy Research, a financial markets consulting firm. "I doubt if we'll ever see the S&P 500 Index price-to-earnings ratio at 14 on a sustained basis ever again."

Robert Shiller, a Yale economics professor, said even if there were structural changes in the economy and financial markets, the richly valued market hints at a "poor stock market outlook than has ever been seen before," with the worst-case outcome being "catastrophic 10-year decline." They contend that the mean-regression theory basically still holds. This means that the stock market may plunge to new depths or soar to great heights at times, but in the end, it would trend back to its average, even if it doesn't hit the number exactly.

Black Blade: Actually the S&P 500 now calculates the PE ratio based operating earnings. If the ratio was calculated based on net earnings then the S&P 500 would sport a PE ratio closer to 63. And this after the big pull back in the Index since March 2000. The statement by Joe Liro of Stone & McCarthy Research sounds suspiciously like the Irving Fischer statement in 1929 - "The market has reached a permanent plateau."

"Interesting Times"

Gandalf the WhiteBlack Blade's QUESTION !#7135803/09/02; 14:01:41

Black Blade (3/9/02; 00:20:59MT - msg#: 71338)
POG After Hours
I have noticed that after hours tonight, the POG has been so far +$1.10, the +$0.70, and now +$1.60. Now where is this after hours market? Strange indeed ;-)
- Black Blade
Just follow the USAGOLD's QUOTE trail LINK and you will see that there is a Saturday market opening "somewhere in the Orient" !
Now a question for you, Sir BB !
Is not the natural gas portion of the energy investment arena a slippery area, with the likes of Williams investing in communications spinoffs ?

Black BladeGandy - Natural Gas#7135903/09/02; 14:51:16


There are other potential Enron's out there. Even some utilities are into marketing energy derivatives and getting involved in areas far outside of their expertise. I suspect that we will see more companies get caught up in the fallout after Enron.

As far as natural Gas is concerned, there is no way that we can keep up with increasing demand under normal economic conditions. Thankfully we have a recession to slow down demand to the point where we have some supply build up, otherwise the "Energy Crisis" of last year would still be with us. However, this supply is being drawn down at a very rapid rate and could be gone just as colder weather arrives next fall.

Add into this equation that there has been a lot less exploration and production of NG so far this year and not likely to be any significant new drilling for the rest of this year, and we have the potential for a real energy crunch come next winter. There will be no new drilling in winter and not likely until next spring. Therefore the forecasts for a very tight energy supply in fall 2002 through spring 2003 are extremely likely scenarios.

Of all the forms of energy in the US, Natural Gas is the real sleeper that will catch the energy markets by surprise as most energy analysts are not competent enough to understand this area of the energy market. This is not oil where we can import barrels from the ME or anywhere else. Natural Gas is dependent on cheap abundant domestic supply.

With increasing demand or falling supplies, the higher energy costs will nail any corporate bottom line that depends on energy (and that includes about every corporation). Therefore a sustained economic recovery under current conditions is rather unlikely.


- Black Blade

The CoinGuyCommentary from the "Oracle of Omaha", etc...#7136003/09/02; 15:21:51

BB: I'm putting my vote firmly into the "sucker's rally" column. Too many divergences in the "real" eceonomy to feel any other answer would be appropriate.

ALL: Although I don't want the following to be a recommendation to buy a certain type of coin, or one metal over another, I thought I would provide a snippit from the CDN's Market in Depth Column from March 1st.

If you're looking to invest a portion of your assets in precious metals, our host is perfectly capable of giving you sound advice built on solid principles of diversification.


Some dealers are trying to buy some coins for their customers but they first need to touch base with them and explain about the changing sight-seen market. This market is selectively strong with those dealers holding the right material able to quickly sell at good levels. However they also know that when their inventory is chock-full-of rarities it is easy to to sell but VERY DIFFICULT to REPLACE the sold coins. And, after trying to replace some inventory following quick and easy sales, they realized that they would have to pay an even greater amount than they had just received. Consequently, the buying part of the show(Long Beach Show)is said to be extremely difficult.

Dealers know that they have to Bid aggressively if they are able to compete in today's vibrant market. They understand that want lists are easily obtained but very difficult to fill.

snippit end:

Among bullion type purchases, like the $20 Libs Michael was recently selling, I also collect coins of all types. I do this strictly for hobby, but do keep in mind these coins are gold/silver. Have been having serious trouble finding some key dates to several series I've been working on. Have had plenty of dealers say sure no problem, until they make that call to the supplier... Looks to me as though the strong hands are holding on to their pieces and looking for stronger prices going forward.

At any rate, even in this economic environment, the coin market remains robust. Which I believe to be a good sign.


R PowellContrary IBD headlines#7136103/09/02; 16:24:48

Black Blade asks, "Is it a new Bull market or a sucker's rally?"
Friday's front page headline of the Investor's Business Daily (IBD) reads "Greenspan Now Sees Recovery, In A Shift From Week-Ago View". Today's IBD headline says, "Biggest Payroll Gain In 14 Mos. Drives Last Nail Into Recession". Who was the great investor, in the early years of the last century who said, "When the shoeshine boy started giving me stock tips, I knew it was time to get out." It seems the only news that isn't announcing the end of the recession or slowdown is that news that is denying that there ever was one.

MarkeTalk and I were recently discussing Arch Crawford's "market meltdown" prediction for March 27-31. I've also been watching the 1160 S+P level, wondering if we might perhaps see a final great blowoff rally day in stock equities and then one big scary move down? I'm also phantomizing about POG bouncing off the $285 level and spiking higher as the stock indexes crash. But, for the moment renewed bubble insanity is the order of the day.
B.B. Please place my vote in the sucker's rally column.
Thanks, what's the total so far?

R PowellThe CoinGuy#7136203/09/02; 16:35:24

I always hate to single out any one poster here as I enjoy, profit and occasionally get a laugh from most everything written here. Besides, I can skip the ones that do absolutely nothing for me.
That said, I've found yours particularly interesting of late, probably as you are reporting just the type of information I'm most interested in. Keep them coming!

R PowellFavorable press#7136303/09/02; 16:54:52

From Friday's IBD, page A8, "Gold Still Glistens Atop Sector Ranks; Natural Resource Funds Strong, Too"
The manager with the best YTD record was interviewed.
"When returns on financial assets are uncertain or subpar, gold does very well." he said.
Hathaway said gold prices are in a new bull market that could keep them rising for five years.
Lately, it seems, many press articles have become much more friendly and investor positive toward the old barbaric, yellow, dust collecting and non interest bearing metal.
I hold no company stocks but watch the mining stocks indexes daily. Am I right in thinking that the XAU and HUI have gained more than enough so that POS and POG should be much higher? Also, the consensus from most conversations comparing metals prices with mining stock prices is that the company share prices lead the actual metals' prices by 6-9 months. If this past pattern again holds true, aren't we about due? Thoughts?

ShermagR Powell#7136403/09/02; 18:37:37

Who said, "When the shoeshine boy started giving me stock tips, I knew it was time to get out."?

I believe that was attributed to Joseph Kennedy.

ShermagBull market or a sucker's rally?"#7136503/09/02; 18:47:44

My vote: suckers rally.
Black BladeR Powell#7136603/09/02; 18:50:02

1) yes it was old Joe Kennedy who said that. He also became the first SEC commissioner under FDR.

2) Gold stocks tend to front run advances in Gold price. Share prices held up well until this last Thursday. Fundamentally nothing new as far as the economy. The same dillusional talk based on suspicious massaged BLS data. "Seasonal Adjustment" - that one's a hoot! "Hedonic deflator" is a good one too. I can't wait until we see what happens when "Chained CPI" comes out.

3) the total? Hmmm... I haven't kept a tally, but so far it looks like:

Suckers Rally: 3 Bear Market: 0


- Black Blade

Black BladeOOPS! Correction - "Suckers Rally or Bull Market"#7136703/09/02; 18:52:32

Of course now Shermag makes it:

Suckers Rally: 4 Bull Market: 0

- Black Blade

darkhorseBlack Blade#7136803/09/02; 19:32:18

Can I vote for a Suckers Rally AND a Bear Market?
sectorThem The Future's So Bright in Japan...Moody's Set to Downgrade Below Botswana#7136903/09/02; 19:48:17

Japan braced for downgrade as economy dips
By David Pilling in Tokyo
Published: March 8 2002 18:05 | Last Updated: March 9 2002 01:46
Japan's sovereign debt rating is almost certain to be downgraded, Moody's, the credit-rating agency, said on Friday.

The agency, which put Japan on negative outlook last month, said Tokyo's rating would probably fall a notch, but could drop further, which would be below Botswana, an African country ravaged by Aids.

"Even though theoretically we could confirm the [current] rating, it's very unlikely," said Thomas Byrne, senior credit officer, who said a final decision would be made by mid-May. The downgrade warning came after confirmation on Friday that Japan's economy had entered its longest recession since 1993. Gross domestic product contracted by a sharper-than-expected 1.2 per cent in the last quarter of 2001, extending the duration of the economic contraction to three quarters.

@shades...The reason that Japanese depositors [In large measure] will not choose to "diversify" their savings at risk to other banks is because 50 of those other banks failed last year...two last week. Moreover, the deposit pattern at smaller banks is toward withdrawals, not we already see their loss in confidence.

The aggregate Japanese savings at risk necessary to smash the cabal is tiny...10% to 17%. The higher figure will precipitate a 10,000 tonne demand shock.

The above figures ignore the increasing world demand and the plummeting world supply.

R PowellFavorable press#7137003/09/02; 19:48:50

I found this next door. Thanks to MotherGoose.
USAGOLDBlack Blade. . .#7137103/09/02; 20:02:12

I'm going with sucker's rally. How could it be anything else at these price / earnings ratios? But the top of the line suckers are the ones who believe that the inflation induced profits are real. My wife read me a snippet from a magazine tonight as I cheffed-up dinner (not a cook, not me! A chef to be sure) about how market professionals competely understand that the public has nearly no real knowledge about finance. It's the public that thinks its astute and that it can beat the market, while the pros know that there is no such thing as an astute practioner of the markets. The pros take advantage of that . . . . . . and that says more about how Wall Street got to where it is today, as well as most investors, than nearly anything else I can say.

P.S. I've had a Negro Modelo a time or two myself -- good stuff. You, sir, are a man of both consummate taste and consummate financial opinion. Rock on, BB!

R PowellAdam's Vote#7137203/09/02; 20:15:21

I just printed out Adam Hamilton's offering for this week. It's 9 pages and is titled "More Bear Market Rallies!"
B.B. I guess with that title we could safely assume that Mr. Hamilton's vote goes in the sucker's rally column. I do wish I possessed a market timing talent as bear market rallies (as Hamilton has often reminded his readers) are often quick and violent moves. However, too risky for me to trade.
If Crawford's predicted "meltdown" occurs or the market adjusts to the lower levels where most time honored valuation determining methods would place it, then this recent runup has just increased the distance it must fall. A "meltdown" or severe shock requires that stocks become greatly overvalued first. IMHO they have. All we lack is the spark. I also feel that POG and POS will strengthen their inverse relationship with the stock markets in the near future, especially when fear starts to replace blind momentum (mania) investing.

uponroofQuestions#7137303/09/02; 22:44:54

I don't mind telling you this last weeks action with the equity markets moving ahead...the CRB moving up...oil up...dollar down...AND of course---------gold down...was a bit hard to swallow.

Some very strange global manure being spread around these days....including the rally on Wall St.

ans: I do believe (in domestic equity market terms) we have just left the springboard, soaring upward rotating so impressively with triple spin...BUT...gravity will be calling the BEARass into the DIVE. No "W' recovery underwater. Judges holding up 9.0, 9.1, 9.3 9.2, 9.2 and 4.6 from the French judge.

Here's an even easier question...what's going on with the Nikkei?: Japanese government jam job..or..foreign investor insanity? ans: Both. Insanity is contageous.

Finally, a tough question: Who will get nuked first...New York, Washington....or half of the middle east?

CanuckHousing starts (Canada) down 12.8% in Feb#714033/10/02; 19:30:51

RobotGuyB.B. message no. 71391#714043/10/02; 19:34:16

It is so very ironic that not even a couple of weeks before Mr A.G. was using uncertain terms about the economy, but now all of a sudden he's very positive sounding. Is it possible to make that surprising of a turnaround? I think the U.S. Fed is using A.G.'s influence to get the lemmings to try to stimulate out of their own pockets, as it seems many are ready to buy on his word. What is easier than using someone else's money to make a gamble? What will they say after losing billions of dollars to false prophesy? Very interesting times my friend.
sectorNothging is Confirmed Until it is Officially Denied...#714053/10/02; 19:48:11

...or in the case of Barron's JPM weekend article...white washed.

The Wall Street "Journal" has morphed into a propaganda tool for the FED.
Who would have thought?

Black Blade"Interesting Times" #714063/10/02; 20:23:36

These are "Interesting Times". Yes indeed, suddenly Alan Greenspin is a very happy man. The US market indices are staging a bit of a turnaround much like the Nikkei 225. Something strange is going on. The US markets are grossly overvalued by any past historical measure and even while corporate debt is soaring and earnings are falling off fast into the abyss. What the heck is going on here? Something similar to what has happened in Japan perhaps?

Not long ago George "Dubya" Bush went on a trip to touch base with the Chinese leadership in Beijing. Along the way he stopped in Tokyo and Seoul. I don't think that he just stopped for a "spot of tea" and to Yuk it up with the Japanese Prime Minister Koizumi. This "visit" was just after new lowered bank deposit insurance guarantees were announced and Japanese citizens were snapping up kilo bars of Gold in a modern version of "The Gold Rush". Insolvent Japanese banks are teetering on the verge of bankruptcy (last year nearly 50 Japanese banks went tits up). The Nikkei 225 was also plunging in a severe Bear Market. What happened?

Shortly after Dubya's departure from Tokyo, the Nikkei suddenly rockets by several percentage points. This may be due to the new Japanese PPT shoveling billions of yen to prop up the Nikkei 225 and the desperate attempt by Insolvent Japanese banks to prop up the stock markets for "window dressing" purpose ahead of year-end financial disclosure on March 31. It should be noted that on March 31, Japanese banks must value shares at the market price and not at the purchase price. Suddenly there were new rules that were emplaced by Japanese authorities that restricted short sales by investment arms of banks - in particular foreign banks (sounds suspiciously similar to the TOCOM PGM defaults last year by dishonorable managers). If the Nikkei was allowed to remain at such low levels or even continue sinking, then a lot of confidence could have been lost resulting in a run on Japanese banks - however, this could still happen as the "April Fools Day" surprise approaches.

Oh to have been a "fly on the wall" during the meeting between Dubya and Koizumi during that "visit" in Tokyo not long ago. What was discussed" Obviously no one is talking. Could it have been a discussion about concerns of Japanese "interests" cashing in US Treasury Bonds? Could it have been about the weakening yen that could result in flooding US markets with cheap Japanese goods? A discussion of how the US version of the PPT (President's Working Group on Financial Markets) had kept the US markets in check. Perhaps it was a discussion about concerns of this disturbing "New Japanese Gold Rush" that had suddenly captured the world's attention. Perhaps it was all these things. Whatever was discussed the Nikkei soared to unimaginable gains in a short period of time. Could there have been collusion between the world's leaders of the two largest economies to inflate the market indices and to keep the "game" alive? Perhaps Bush and Koizumi are taking orders from others and are carrying out plans to keep the "game" alive. To me there is a rotten stagnant stench in the air and it seems to be coming from Tokyo, Wall Street and Washington DC. There is way too much coincidence for this to be "normal" market behavior.

- Black Blade

USAGOLDBlack Blade. . . #714073/10/02; 21:18:02

03/10 22:22
Yen Falls on Mizoguchi Currency Warning, Decline in Nikkei 225

Tokyo, March 11 (Bloomberg) -- The yen fell for a the Ministry of Finance's international bureau, signaled Japan may sell its currency to stem the biggest weekly gain in almost two years.

- - - - -

Last week in posting about the fall of the dollar versus the yen and the steel import restrictions, I mentioned that we weren't sure if the yen's appreciation was by agreement between Koizumi and Bush. The story now emerging is that things must not have gone well, and the two agreed to disagree to put it politely. It seems the Bush administration wants a weaker dollar and the Japanese are going to try to stop it from happening. We may be looking at a developing trade and currency war -- a good old- fashioned rendition of beggar thy neighbor.

If there was a lull in Japanese gold demand, I don't think its going to last long.

USAGOLDScrambled text#714083/10/02; 21:20:02

For some reason the Bloomberg story got scrambled.

Let's try that again:

03/10 22:22
Yen Falls on Mizoguchi Currency Warning, Decline in Nikkei 225
By Mari Murayama and Kanako Chiba

Tokyo, March 11 (Bloomberg) -- The yen fell for a second day after Zembei Mizoguchi, director-general of
the Ministry of Finance's international bureau, signaled Japan may sell its currency to stem the biggest
weekly gain in almost two years.

USAGOLDAll. . . .Something to keep the night owls from falling asleep#714093/10/02; 21:26:40

Tomorrow I will publish a new "Gold Myths and Realities" at the News & Views page (as part of our on-going series) in which we will reveal the answer to the following question:

Which are the three countries with the largest private investor gold holdings in the world?

Let's see some guesses just for fun. See if anyone can crack it. I think you will be surprised.

Note: This is private investor holdings -- coin and bullion.

Watch for the answer at News & Views tomorrow.

Black BladeAndersen Battles for Survival After Enron#714103/10/02; 21:36:55


NEW YORK (Reuters) - Prestigious clients are leaving in droves, criminal charges and billion-dollar lawsuits loom large, and peers hang you out to dry. That's the bottom line for Andersen, the accounting firm struggling to restore credibility shattered by its role in the Enron scandal.

Chicago-based Andersen, once the gold standard of its profession, signed off on Enron Corp.'s books and has been shaken to the core by the energy trader's collapse. ``I think at this stage, you would have to ask questions about whether or not they can survive,'' James Copeland, chief executive of Andersen rival Deloitte & Touche, told Reuters in an interview last week. ``I hope they do because I think the implications for the capital markets and for the profession itself would be terrible if they fail.''

Client defections are accelerating at Andersen. Longtime clients with prestigious names such as Merck & Co. (NYSE:MRK) and Delta Air Lines (NYSE:DAL) have dumped the firm as their auditor, and experts say more cop-outs are likely.

Black Blade: It's not easy being a criminal enterprise. Rumors are that Arthur Andersen has agreed to a plea bargain where the auditor will pay fines and give Congressional testimony about several other corporate frauds. Looks like "Interesting Times" are about to come to Washington DC and Wall Street. We should be reading more about this in coming weeks.

LimitUpThe Way It Is#714113/10/02; 21:45:33

There is alot of near-spaced analysis going on here at this Gold Bug site. The world economy's direction is a given. They have always, without exception, inflated their way out of trouble. It will be no different this time. When inflation rears its ugly head at the consumer level, gold will rise like the sun in the east, no exceptions. They can cook the statistics, but they can't fix our deficit spending. Debt will be paid back with dollars worth far less than todays value, and we will all be happy once again.
goldquestLargest Private Investor Gold Holding Countries#714123/10/02; 22:00:56

United Arab Emirates

balzacLARGEST PRIVATE GOLD HOLDERS#714133/10/02; 22:32:50

I would venture a guess from lurking here for the past 5 years and picking all your brains. The three countries are:

Saudi Arabia
United Arab Emirates

Love your contests !!!

Black BladeThree Countries with Largest Individual Gold Investment#714143/10/02; 22:34:46

I'll venture to guess that India is the country with the largest individual ownership of Gold, though it is mostly in the form of jewelry. Of course recently there has been the revelation that most of this jewelry is "under karat". That is an under cover probe by Indian authorities revealed that much of what was thought to be standard 22K Gold jewelry is actually much less. Indians tend preserve their wealth in the form of Gold jewelry that is recycled periodically as planting season approaches and at harvest time the proceeds are put back into Gold jewelry. Recently the WGC has begun a campaign to sell "Hallmarked" 22K jewelry in India. All indications are that this so far has been a flop.

Next I would say that the US is the country with the next largest population of individuals who own Gold investments. This would be physical bullion. The reason being the relatively large population of individuals who are much better off financially than individuals in most other countries. Also there are likely more individuals in the US who invest in Gold shares and mutual funds. There is the large jewelry market in the US. The last several years have been good for Americans and some cash inevitably found its way into Gold jewelry even though it is most low karat Gold.

Finally, things get a bit sketchy for country number three. If the current "Gold Rush" in Japan is any indicator we could see higher numbers in Japan this year. Japan's Gold imports in January jumped 10 fold. This year China opens up the Gold trade and that could change the whole Gold investment picture as well. Then if FOA/Another are correct about the Gold for oil scenario we could venture a guess about the Gold holdings in the Middle East. That would put the focus dead on Saudi since they are the largest oil producer. They also have large Gold jewelry bazaars and soon degreed programs for Gold jewelry making. Again, like Indians, Saudi citizens have large Gold holdings in 22K jewelry form. So Saudi could be number three even though by population they are a rather small country but with a lot of wealth and a disdain for interest bearing paper investments. They tend toward tangibles and therefore Gold is one logical choice.

If we were to consider Gold ownership per individual we should focus on some very unusual places such as Dubai with its large Gold jewelry bazaars and where a Gold dinar is being considered for daily currency transactions. This "currency" may spread to Malaysia and a few other Muslim nations as well. Another country would be Ghana where traditional Gold ownership has been ingrained in the tribal cultures for generations.

I await to read the "Gold Myths and Realities" article tomorrow.

- Black Blade

Black BladeOil Jumps Again as Iraq Says No to UN Arms Experts#7141503/10/02; 23:20:09


SINGAPORE (Reuters) - Oil prices extended a week-long rally on Monday after Iraq said it would not allow U.N. weapons inspectors to return, renewing traders' jitters about a showdown with the United States. Tensions between Washington and Baghdad flared again last Wednesday when U.S. representatives at the United Nations said Iraq was violating U.N. sanctions by converting humanitarian vehicles for military use.

Traders have become increasingly nervous about U.S. intentions over Baghdad and possible military strikes after President George Bush referred to Iraq in January as making up an ``axis of evil'' with Iran and North Korea which sponsored international terrorism and amassed weapons of mass destruction.

Black Blade: There still is the possibility of war in the region as plans were discussed about a possible two prong attack of 50,000 ground troops from the north and another 50,000 from the south with the possible involvement of Iraqi opposition members. Also leaked was discussion of Dubya's people researching the "nuclear option" to any conflicts around the globe. Meanwhile petroleum prices rose to $24.27/bbl for NY Crude and NG is at $2.80 Mbtu.

Black BladeAndersen seeks buyer, talking with Deloitte - WSJ#714163/11/02; 00:09:19


NEW YORK, March 11 (Reuters) - Arthur Andersen LLP's advisers have approached rival Big Five accounting firms about acquiring some or all of the firm, and talks with Deloitte Touche Tohmatsu have occurred, the Wall Street Journal reported on Monday.

Black Blade: Arthur Andersen is finished.

PippinTown Crier - Black Blade#714173/11/02; 00:43:18

Thanks for your answer. I contacted CPM indeed.
Black BladeWhy the Bears Aren't Backing Down#714183/11/02; 00:49:13


Despite a spate of favorable data, pessimists argue that the U.S. faces a long period of slow growth--or even a "double-dip" recession. They worry that the mild 2001 downturn left in place the imbalances built up during the late 1990s. "The recession was too shallow to create the efficiencies that a longer, deeper recession would have," says Donald H. Straszheim, president of Straszheim Global Advisors in Westwood, Calif.

Many economists believe consumers are getting tapped out even as the stock market and housing remain overvalued. And they worry that households and companies have overborrowed, while the U.S. is getting too deep in debt to the rest of the world. Says Morgan Stanley Dean Witter & Co. Chief Economist Stephen Roach, dean of the double-dippers: "The case for a double dip is just as compelling--if not more compelling--than a couple of months ago."

Black Blade: Definitely a "Suckers Rally". This is another good article that outlines what I, Jim Puplava, Lance Lewis, and many others have been saying for the last couple of years (some even longer). The excesses have not been squeezed out of the market yet.

BelgianSoros and UK / EMU entry ! #714193/11/02; 00:57:43

What's so important about this :
- Soros = A messenger for financial masters, wanting to spread their message / agenda across !
- Timing : End (?) UK Gold-reserve sales ! (rumors on further sales-?). Perhaps it was Welteke (Bundesbank) who took over some burden of the CB Gold-selling impression, job !?
- UK : Leaving the dollar-faction ! Why should they ? (haha)

Reread 2 TG msgs :
- #35569 respons to Cavan Man and theories on LBMA, evolving today, exactly as outlined in 8/26/2000.
- # 35549 respons to Henri, with perfect shematic overvieuw
of 1980 >>> 2000.

USAGOLD : Is it private Gold holded per citizen ? Or total private Gold holdings ? Thanks. Am very curious and it certainly might surprise us all.
India : Estimated 10.000 tonnes for 1 billion people.
Arabian oil states / Russia / Asians / etc : Is it possible to make any reasonable guesses with the enormous flows of unknown Gold ? France, Italy, Belgium always had packs of Gold-Philes in the past. No idea what's left of it. Am impatient to know.

Black BladeGold Almost Vertical In London#714203/11/02; 01:20:12

Interesting chart this AM. Not a bad start. Now if it only maintains momentum from here. Currently up +$1.40.
Old YellerUK/Euro issue#7142103/11/02; 02:37:26

Holtzman has discussed this topic in detail in the past.As I recall,he felt the main thrust of the BOE sales was a strategy to lower the pound's value for Euro entry.

Now,what about this 15% rule?

Old YellerBlack Blade#7142203/11/02; 02:49:21

http://hsgfx: This email address is being protected from spambots. You need JavaScript enabled to view it. /hussman/members/updates/latest.htm

New bubble antics,maddening isn't it?

These people(Wall St.,The Fed,the media)really ought to know better.Good comparison in here to the 81-82 double dip recession,that one was a doozy.

What are your thoughts on gasoline and refinery outputs for this spring and summer?

A sudden and prolonged jump in gas prices could bring out the Gatorade bucket.

Black BladeOld Yeller - gasoline, refineries, and even PGMs#7142303/11/02; 03:32:15

Gasoline prices usually rise in the spring due to increased travel, also known as the "driving season" on Wall Street. However, spring is also the time of year that many refineries shutdown for scheduled maintenance. This is also the time that gasoline and other distillate inventories are built up in anticipation of "driving season". The problem is that these inventories are not being built up to any significant levels.

The other wild card in all this is the increased tensions in the Middle East with the Israel/Palestine conflict heating up, talk of US military action in Iraq, Wahabi Muslim fundamentalist rumblings against the Saud monarchy, and recent increased tension and conflict among the regional Caspian states (particularly Chechnya, Russia, Turkmenistan, Georgia, Kazakhstan, Uzbekistan, and Iran). The whole region of the Middle East and Caspian/Asia Minor is a powder keg ready to blow up at any time.

Meanwhile, NY Crude is higher at $24.39/bbl and NG is at $2.80 Mbtu. Maybe we need less dependence on foreign oil. We will likely always be held hostage to foreign interests due to our addiction to hydrocarbons. If fuel cell technology ever becomes viable then we will use more NG than Oil distillates (just trading problems as supply of both is limited). Of course we will also need a more abundant and reliable source of PGMs for this technology. BTW, platinum continues to surge higher with high lease rates and now at $527/oz. Japanese continue to buy platinum and Russia isn't delivering again - no kidding. Cheers!

- Black Blade

Black BladeSteve Forbes on Gold#7142403/11/02; 03:40:48

I just watched an Interview with Steve Forbes on FOX, He said in effect that the Fed must increase liquidity to kick the US economy into high gear. He said that the proof of this is in the POG. He would like to see Gold above $300/oz. and hold at least $320/oz as proof. I can't argue with his reasoning though the result would be higher inflation (even with statistical filters such as hedonic deflators and "chained CPI").

- Black Blade

Black BladeGold and Oil Stronger#714253/11/02; 03:53:07

Gold is moving up nicely ahead of the NY open - up +$3.00 and Brent North Sea Oil higher by 64 cents. Could shape up to be an "Interesting" day on Wall Street.

- Black Blade

KnallgoldPOG#714263/11/02; 04:44:00

For some reason the last week was very important to lower POG below 290.Must be option related :-(
CanuckBB or anyone#714273/11/02; 05:05:50

What happens to the Nikkei (and other markets) after Apr. 1?

I refer to 'the shovelling of cash' and the restrictions of short selling. If short selling is reinstated would the Nikkei not plummet since its pre-manipulation was in the order of 10,000?

Can you venture a guess to the outcome of the currency devaluation between the USD and the yen? Will the J.A.Pan company wait until after Apr. 1 to devalue yen?


BoilermakerEnergy future#714283/11/02; 06:28:34

World energy production is for the most part in the "hunter-gatherer" stages using an analogy from the era that pre-dated agriculture. We have exploited and continue to exploit the easily found and naturally occurring energy resources such as oil and gas. In the US, many of the shallow onshore fields are substantially depleted (the low-hanging fruit is the current popular analogy). We need to go deeper and further offshore to find new reserves and into hostile places like North Slope and ANWAR. This is very expensive compared to the huge and easily produced Middle East resources and it is not surprising that the US is losing ground in its energy self sufficiency.

The free market will buy at the same market price regardless whether the product comes from a low cost producer or a high cost producer. The low cost producer's market share will increase at the expense of the high cost producer. The high cost producer will deplete their reserves and be unable to justify the capital investment needed to replace them.

If energy self sufficiency for the US is strategically important(which I believe it is) then the only way to acheive it is to have higher prices for energy. $25/bbl oil and $2.50/Mcf gas will not stop the US decline. Probably about $50/bbl oil and $10.00/Mcf gas would arrest the decline and grow the supply to self sufficiency. Part of the matching of US supply and demand would come from reduced consumption and part from new supply. Much of the new supply would come from non-conventional sources, eg., coal bed methane, oil shale, tar sands, coal to gas, coal to oil, etc. We would be forced to go from the hunter-gatherer mode of energy production to a technology based approach equivalent to modern agriculture.

The US has abundant supplies of hydrocarbons such as coal that can be processed into the more useful forms of energy, oil and gas. We already have much of the technical expertise and some experience with this technology. Eventually this will have to be done because even the reserves of the low cost producers will deplete. There is no alternative in the long run. Why not bite the bullet now, let domestic prices rise and invest in these technologies rather than spend the money on a military presence to secure our foreign sources?

$50/bbl oil would give us $2.00/gal gasoline. I can live with that and many others can also. Europeans have paid twice that much for many years without too much whining. Their problem is that most of the high cost of gasoline goes for taxes, not to the producers. Big cars and bigger houses are not a American birthright to be subsidized by cheap foreign oil.

Oil and gold going up. Fill up and load up while you can.

Jin-YinDefining Inflation#714293/11/02; 06:43:03

Good article on inflation and increasing consumer prices which are mutually exclusive however seen as the same animal today.

While increases in money supply ( i.e., inflation) are likely to be revealed in general price increases, this need not always be the case. Prices are determined by real and monetary factors. Consequently, it can occur that if the real factors are pulling things in an opposite direction to monetary factors, no visible change in prices might take place. In other words, while money growth is buoyant--i.e., inflation is high--prices might display low increases. Clearly, if we were to regard inflation as a general rise in prices, we would reach misleading conclusions regarding the state of the economy.

On this, Rothbard wrote, "The fact that general prices were more or less stable during the 1920s told most economists that there was no inflationary threat, and therefore the events of the great depression caught them completely unaware" (America's Great Depression, Mises Institute, 2001 [1963], p. 153).

How do they manipulate prices by 'pulling things in an opposite direction to monetary factors' which 'displays low increases?' Sorcery?

nickel62jim-Yin Not sorcery, but rather increased production!#714303/11/02; 07:05:42

By lowering trade barriers, such as NAFTA in the US and the introduction of the new technologies that allowed many things to be produced in new countries all around the world. This plus the ability to substitute one product for another gives you a lot of lattitude in moving in that direction while money supply is growing and the increase in the general price level is muted for awhile.
ShermagLargest Private Investor Gold Holding Countries#714313/11/02; 08:37:00


Nomaddeflation ...#714323/11/02; 08:49:23

I would first like to thank ALL of the posters for their willingness to share their advice and information ... I have been a steady reader here for several years, mainly because I get a more complete view of the world from the posters here than any other place on the web.

That being said, I would like to strongly recommend the following books, as they have done more to help me understand the world and the future of finance (and of course gold's place) than any others.

The first being 'The Fourth Turning' :

and the other, by Jeremy Rifkin, entitled : 'The End of Work'.

I have pasted a synopsis of the book below, but in view of the current Japanese crisis, I think it holds a lot of valuable pieces of information.

In my classes, I tell my students about a new Japanese factory for making TV sets ... output is over 5000 sets a day ... want to guess how many workers are employed at this new state-of the-art complex ?

the answer is : 5.

You do the math ... any way it comes out, automation is the end of most jobs, and a surefire indicator of the Great Deflation to come.

And on a personal note, just what skills does anyone have that cannot be done better by a machine ? Not many I think.

Best of Luck to everyone in the future ... it's gonna be amazingly strange and wonderful place (I hope :)


IN HIS COMPELLING, disturbing, and ultimately hopeful book, The End of Work (1994), Jeremy Rifkin argues that we are entering a new phase in history-one characterised by the steady and inevitable decline of jobs.

Worldwide unemployment is now at the highest level since the great depression of the 1930s. The number of people underemployed or without work is rising sharply as millions of new entrants into the workforce find themselves victims of an extraordinary high-technology revolution. Sophisticated computers, robotics, telecommunications, and other cutting-edge technologies are fast replacing human beings in virtually every sector and industry - from manufacturing, retail, and financial services, to transportation, agriculture, and government.

Many jobs are never coming back. Blue collar workers, secretaries, receptionists, clerical workers, sales clerks, bank tellers, telephone operators, librarians, wholesalers, and middle managers are just a few of the many occupations destined for virtual extinction. While some new jobs are being created, they are, for the most part, low paying and generally temporary employment. More than fifteen percent of the American people are currently living below the poverty line.

The world, says Rifkin, is fast polarizing into two potentially irreconcilable forces: on one side, an information elite that controls and manages the high-tech global economy; and on the other, the growing numbers of permanently displaced workers, who have few prospects and little hope for meaningful employment in an increasingly automated world.

Rifkin suggests that we move beyond the delusion of retraining for nonexistent jobs. He urges us to begin to ponder the unthinkable - to prepare ourselves and our institutions for a world that is phasing out mass employment in the production and marketing of goods and services. Redefining the role of the individual in a near workerless society is likely to be the single most pressing issue in the decades to come.

Rifkin says we should look toward a new, post- market era. Fresh alternatives to formal work will need to be devised. New approaches to providing income and purchasing power will have to be implemented. Greater reliance will need to be placed on the emerging "third sector" to aid in the restoration of communities and the building of a sustainable culture.

The end of work could mean the demise of civilization as we have come to know it, or signal the beginning of a great social transformation and a rebirth of the human spirit.

USAGOLD Market CommentaryAll New Short & Sweet, the Awaited "Gold Myths and Realities", Some Analysis on the Gold Situation in Japan#714333/11/02; 08:57:01

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Read the full commentary and related information here. (access codes required)

New visitors may review these selected portions provided at the Daily Market Report page. You may enjoy our 24-Hour NewsWire provided at this page, also.

If you would like to take full advantage of these insights and perspectives, made available from a leader with three decades of experience in the precious metals markets, then we invite you to request your personal access codes for the online News & Views. With your request, you will also receive a hard-copy introductory information packet on gold ownership which details the products and services offered by USAGOLD / Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

SiochainUS warns steel trade tensions may spread#714343/11/02; 09:37:22

US warns steel trade tensions may spread
By Guy de Jonquières and Edward Alden in Washington
Published: March 10 2002 21:22 | Last Updated: March 11 2002 01:14

The US administration has warned that strains in international trade relations could spread from steel to other sectors unless the European Union and Japan reflate their economies.

Grant Aldonas, under-secretary of commerce for international trade and one of the architects of the decision last week to impose steel tariffs of up to 30 per cent, said other sectors affected could include agriculture and semiconductors.

In an interview with the Financial Times, Mr Aldonas said: "We have told people over time that if you don't see stronger growth abroad, you end up seeing friction on the trade account," he said. "There is only so much patience that you have when you are talking about very serious macro-economic issues that have been out there for a long time."

This is the first time the Bush administration has linked the steel measures to larger problems in the global economy.

Mr Aldonas indicated Washington was determined to stand firm in the face of the international outcry its steel measures had provoked. "This is one of those situations ... where things have to get worse before they can get better," he said

PippinConfiscation - rules which will be applied#714353/11/02; 09:41:05

Reference is frequently made to the necessity to buy pre-1933 gold coins to prevent confiscation.

Question a) I wonder if the exemption granted to those coins in the past will be reconducted in the future. Do we have hints or indications that the rules of the road will be the same, the day the thing hits the fan ?

Question b) This rule of "pre 1933" was/may be valid for the USA. Do we have any indication about European countries (within and outside the European Union ?


SiochainNow add more war drum beat: Bush wants 25,000 UK Iraq force #714363/11/02; 09:52:42,1373,665114,00.html

(Part)Bush wants 25,000 UK Iraq force
Britain considers joint invasion plan
America has asked Britain to draw up plans for 25,000 of this country's troops to join a US task force to overthrow Saddam Hussein.
In a move which reveals advanced US plans for the next phase of its war on terror, Government departments are considering the plans ahead of Vice-President Dick Cheney's meeting with the Prime Minister tomorrow.

Cheney will come to London armed with fresh evidence against the Iraqi dictator, and will tell Tony Blair that United Nations inspections of Iraq's nuclear, chemical and biological weapons may not be enough to head off a new war in the Gulf

Jin-Yin@nickel62#714373/11/02; 10:47:37

That explains a lot more besides the current manipulation of gold. For awhile we wait.

If not sorcery, then how about ‘The New Alchemy’? How else can anyone explain the ease at which these trade agreements are passed without much ado about the damaging consequences to our production base? All in an effort to keep consumer goods, the price of gold and oil to supposedly politically correct levels and ultimately to keep the game going and the chips flowing at the Casino. Meanwhile inflation manifests in stocks and housing to keep us fat and happy. In the end, the politicians and media will blame citizens greed, ignorance, and lack of concern over frugality that will have gotten us into the mess in the first place. We will bow our heads in guilt as the media will have already formed our opinions and this will become truth.

He who controls the past, controls the future. He who controls the future dictates the present; something to that effect. Very few are aware of conditions preceding 1929 as our history of that time is long gone to memory heaven. Even possibly done by design. The similarities are unsettling. A new mix of frog legs and pup dog tails has been brewing for some time now.

At least being aware of future possibilities is more interesting than being hit from behind by a freight train full of spoon-fed ignorance. Thanks to all for answering questions and contributing to this great forum.

Black BladeMarket timers move to gold#714383/11/02; 10:49:48

Wall Street showing signs metal may rally


SAN FRANCISCO (CBS.MW) - Gold-timing newsletters are increasing their recommended exposure to bullion in a move that could prove prophetic. Still, with tension building in the Middle East and the dollar undergoing a rare bout of weakness, analysts are coming round to the prospect that gold will stage a major advance in coming weeks.

"The dollar, which has been so strong for many years even during this current downturn, is beginning to show signs of deteriorating, and one of the beneficiaries of this is usually the gold market," Lomma said in a new report that is beginning to make waves in Manhattan investment circles."

"The United States, for many years, has been a magnet for foreign investment," Lomma reasons. "This investment trend may be coming to an end. Many major countries are beginning to reinvest in their own lands once again, leaving the safety of U.S., dollar-denominated assets. A falling dollar, and with it higher gold prices, often signal commodity inflation in many natural resources, including steel, oil and even agricultural products. Lomma, charting a 22-year "down-trend" for gold prices, is very optimistic about the metal's strength.

Black Blade: Surprisingly quiet on Wall Street as most activity is centered on the 6-month anniversary of the WTC terrorist attacks. These certainly won't be the last such attacks either. No one can win a conventional war against the US anymore. However, we can't win a war against terrorism either. The face of war has changed. Now it will be a war of attrition with car bombs, suicide bombers, hit and run snipers, toxic chemical dispersal, and even possible dirty nuclear bombs as the weapons of choice. With the commitment of people who are willing to sacrifice themselves like this, we cannot win. They even strike at the financial centers of the western world. The next targets are likely to be the financial infrastructure of the US and Europe, and the major cities of Russia as Caspian region Islamic fundamentalists take on the Russian bear. There is also the very real possibility of a suicide plane attack on a major Saudi oil terminal in an effort to cripple the western economies and the economy of the perceived pro-western Saud monarchy. These are "Interesting Times" indeed.

TownCrierPippin -- Confiscation and the delicate art of keeping your property#714393/11/02; 11:13:39

The link above is a page to address many of the confiscation issues. Most importantly is the comprehensive memorandum of legal precedents that can be obtained at no charge by request. You'll find it at the bottom of the page following some helpful historical commentary.


PS. Not long ago MK offered the following comments on this very subject:
1. Gold ownership [as viewed by political leadership] in the United States is a privilege not a right as
Rep. Ron Paul has asserted the result of his own experience in trying to
get gold-owner favorable legislation through the Congress. No matter
what you think is right, or what you think is moral, ethical or legal,
that is the reality that we must deal with. What you do politically to
alter that is your business, but where the rubber meets the road is how
you design your gold portfolio in the first place to maximize your
ability to hold on to the gold you purchase.

2. The concept of ownership of pre-1933 gold coins as the safest form of
gold ownership with respect to the current law is borne of much legal
research and legal precedent, but it is not a guarantee that you will be
able to keep your gold if you own it in this form. However, it offers
the best odds that you will be able to retain your gold in the event of
a call-in. From 1933 when gold was criminalized and 1975 when it was
re-legalized, gold owners could own and trade in pre-1933 gold coins
like there was never a confiscation in the first place. You just had to
know and understand this loophole in the law. I encourage you to go to
the link above and request "You Can Survive a Potential Gold
Confiscation." All the reasoning is there in detail along with the legal
precedent (as Appendices) required for you to understand why moving in
this direction may be your saving grace. This is not a casual report the
basis of which we pulled out of thin air. It is built on the work of
intellectuals and gold advocates who have gone before us and laid some
very important foundational work -- including Donald Hoppe and H.M.
Holzer, Ayn Rand's attorney.

3. The Treasury Department will not come to your door knock on it and
demand your gold. They will simply make it illegal to trade in it and
that's all they need to do. When Roosevelt put the kabosh on gold, all
he was concerned about was bullion because he feared huge stores of
money leaving the imploding banking system for gold. (Consider how the
Argentinian government reacted similarly in their recent financial
meltdown). The U.S. government let the pre-1933 coins go because they
did not pose a threat to the currency controls the Roosevelt
administration was imposing. These are serious considerations that every
gold owner need understand.

4. You do not have to pay exorbitant premiums to get into this kind of
material. Some think you have to buy exotic coins with a Grand Canyon
between the metal value and what you pay. That simply is not true and we
can guide through this aspect of the process. Please call George Cooper
or Marie Ballard who are well versed in these matters.

5. As for Canadian, British and European laws at the time, we do not
know at this time, but we are hoping at some point in time gaining some
knowledge in that respect as our clientele grows in those countries. I
believe that the Nazi government in Germany confiscated gold, but I
don't know the details, just the Hitler quote that "anyone who deals in
gold should be marched off to the camps" or some such nonsense. Let me
just say this: For the premium you would now pay for pre-1933 gold coins
at a time when the gold price is artificially maintained at historically
low levels, it is a small price to pay for the peace of mind. When gold
moves as most of us think it will, that premium will be obliterated and
you will be glad you've done everything you can to protect your
holdings. Believe it!

There is much more I could say on this account, but I'll leave at this
for now. The ill-founded and unfair ties that the U.S. State Department
recently made between gold and terrorism were a warning shot across the
bow for some. It reminded us all how easy it would be for an
unscrupulous government to mount an attack on gold based upon erroneous
presumptions. Their real goal would be to limit its dissemination among
the population. These are important discussions now being entered into
at this forum. I only hope to provide some foundational thinking. Be
disciplined, my friends. Consider your alternatives as best case
scenarios not absolutes. There are no real guarantees as most of you
understand. One just does the best they can under the circumstances and
hopes for the best. Pre-1933 world gold coins fit those criteria. I
don't speak about this often publicly. This is the sort of thing I share
with our clientele normally in private. --MK

TownCrierJensen on Zimbabwe: Polls show despot loser if vote fair#714403/11/02; 11:21:53


------------Refugees fleeing hunger and political violence are braving crocodiles, barbed wire fences and South African army patrols in a desperate bid to escape across the southern border.

Seemingly unfazed by...[social/economic]...disaster, Mugabe says many of these problems have been "manufactured" by Britain and Zimbabwe's tiny white minority of 70,000. He accuses Tsvangirai and the MDC of being stooges of the whites, intent on returning the colonial era.

Tsvangirai, a former union leader, responds with one simple question: "Why is a country that was once the bread basket of Africa now a basket case?"

Two recent polls, one by the independent Financial Gazette newspaper and the other by a private institute headed by one of Zimbabwe's leading political analysts, show that Mugabe's popularity has plummeted and Tsvangirai would easily win a fair election.

But Mugabe's rubber-stamp parliament has rushed through electoral amendments forbidding civic and religious organizations from monitoring the poll. Military officers have been appointed to the election commission and only civil servants -- dependent on government jobs -- will be there to guard against irregularities.

Zimbabwe's Supreme Court struck down some of the amendments last week but Mugabe simply reinstated them by presidential decree. Opposition spokesmen say that's an open invitation to ballot stuffing.-----------

(click URL for full article)

Siochain@Town Crier#714413/11/02; 11:44:22

Could you please claify a point....I know I read that one consideration of whether a coin is numistic is that it have a value at least 15% over melt...does this hold for pre 1933?
Black BladeJapan braced for downgrade as economy dips#714423/11/02; 12:19:13


Japan's sovereign debt rating is almost certain to be downgraded, Moody's, the credit-rating agency, said on Friday. The agency, which put Japan on negative outlook last month, said Tokyo's rating would probably fall a notch, but could drop further, which would be below Botswana, an African country ravaged by Aids.

Black Blade: On that cheery note, I have to admit that I find the market action quite entertaining. US and Japanese corporations had better produce some profits or there will be a lot of disappointed investors. Of course big investment banks and their analysts could be open to a storm of lawsuits if investors go on the hunt for someone to nail to a cross. Obviously there is no way that most US corporations will even come close to bringing home the bacon as it were under these current lofty valuations. As far as the Japanese economy is concerned - what a basket case. "Interesting Times"

escapethematrixKeep an eye on Barcelona Summit March 15,16 2002#714433/11/02; 13:02:01

Trail Marker #125 10/25/01


------Blair says 2002 EU summit key for euro, economy -----
Thursday October 25, 2:41 PM EDT --

LONDON, Oct 25 (Reuters) - British Prime Minister Tony Blair said on Thursday the success of the euro and the wider European economy hinged on the EU's ability to push through
long-discussed economic reforms next year.

Blair, launching a Belgo-British conference in London, earmarked the European Union's Barcelona summit next year as a key staging post and said the success of the launch of euro notes and coins was crucial not just for the 12 euro zone members but for Britain too.

"We have an interest in this," he said, stating his policy that in principle his government wanted to join a successful single currency.

"Barcelona will be critical in how the world views the development of the European economy," Blair said.

If the summit is a success, it will help make the euro a success, he said.-----------------


Another thing we can count on and I mentioned this before:

The moment England is seen as even a "virtual" member of the Euro club; the world will jump on every physical ounce of gold available at whatever dollar amounts anyone will part with it,,,,,,,,,,,,,,,,, and sell every paper gold play into the dirt in the process!!

I say, know your dealer, buy your bullion early and watch for this act to begin. It's closer than you think!

Will we finally see some type of ECB "announcement" or "leadership statement" in regard to Gold/USD??
With the Euro now complete, these guys need to get their act together or continue to lose credibility.

BelgianToday's Geo-Political statements with financial implications.#714443/11/02; 13:07:53

China and France : Justice Yes. Disproportionate retaliation with an agenda, No. The US occupation in Central Asia, will not be tolerated. Iran, explicitely inviting Euroland for Middle East mediation, independantly from the US ! Bush not impressed at all (rememberance speach). POO touched 24$ (up 20% from 20$ low).
Saudi Arabia : Saddam can't be ousted without Israel/Palestine solution !
It is the rift between US and Euroland that is important to the Gold evolution. Not the high probability of war as such.

Old Yeller: UK can lower its pound, without the (virtual) sale of Gold reserves. What if UK-Gold was sold to ECB/BIS and temporary booked in an under the ledger construction, as transitional for later EMU-entry ? To move a currency or interest rate, just call the financial brotherhood for doing the job !

TownCrierSiochain coin question#714453/11/02; 13:34:47

Thanks for asking, and that's a very good question. But I assure you, your confidence in me (to answer it) is misplaced. My specialty (if it can be called that) is banking and monetary systems -- through which avenue I've come years ago to understand the vital importance of gold both within the system AND as a bastion of private wealth. (And hence, sometimes, when my incompetent web-coding skills are not being overwhelmed by various site update requirements, I even get to share a monetary tidbit or two here at the forum. But to be sure, numismatics are quite beyond my field.)

So, getting back to your question, all I can say is that when I can occasionally back my truck up to Centennial's doors, I prefer to haul away great quantities of coins such as the sovereigns or Swiss francs while paying low to modest premiums. And for certain, Centennial has the full spectrum from bullion to professionally-graded high-premium numismatic/collector gold available, too.

The bottom line, if you want the whole breakdown from someone with professional competence in the wide ranging field of gold investments including numismatics, I strongly suggest that you give a call to the brokerage staff in the USAGOLD/Centennial office. That's precisely what they're there for. (And with that, I'm off -- I've got some web pages to mend.)


PippinTownCrier - Confiscation (thanks) - Islamic Gold Standard#714463/11/02; 13:57:53

TownCrier - Many thanks for your very detailed answer. Looks I have to go through some reading indeed...

Something else, if I may. I just remembered the above article (along with its second part

The article was written in 1998, but certain sentences make it quite up-to-date given the circumstances :

Inflation-deflation is known as Riba al-Fadl in the Islamic world and it is prohibited. By establishing an economic bloc under a gold standard, the Islamic nations of the earth could eliminate currency fluctuations and establish the interest-free banking system that the Qur'an mandates.

I must confess that were I a moslem person, I could not help finding some interest in this idea. Would it be plausible in the present economic situation? A gold standard centered around a religion?

Old YellerBelgian#714473/11/02; 14:05:25

Holtzman posts on the UK and euro issue,10/25/00,12:07 and 10/10/00,12:02,civil engineering.It's excellent reading, not only on the BOE/euro issue.
TownCrierAdvantageous buying opportunity#714483/11/02; 15:12:39

Check out the chart in the latest weekly gold market update. You'll see ample evidence of a price-performance trend for gold in both dollars and yen, now being a good buying opportunity within that same trend.


mikalGold investment leaders game#714493/11/02; 16:01:06

India, Switzerland, then France? So many choices, so little chances!
Mr GreshamStephen Roach#7145003/11/02; 16:43:59

Also read the pieces following, on bonds entering bear market, and inflation expectations.
Black BladeCarrier to Cut 2,000 Jobs#7145103/11/02; 17:06:30


Carrier to Close Plant in Tennessee and Cut 2,000 Jobs by End of the Year

Black Blade: More nonessential "Bones" shuffled off to the ever-growing "Bone Pile". Too many from smaller compnies to list.

Mr GreshamSir Belgian: TG excerpts#7145203/11/02; 17:09:18

Thanks for bringing these forward #35569, and Henri's 35549.

"This currency systems and the evolving nature of our current society that created this system is in the process of radically changing it's paper wealth structure. The government, as an extension of that society begins to support and maintain the asset value of almost everything. This is the engine that drives an eventual hyperinflation. Not a typical business expansion inflation we are used to,
rather an all consuming, ending inflation that does not stop. At this point the concept of sound money takes a back seat to maintaining majority asset holdings on a permanent plateau. By extension, the official stance is moved to promote all paper assets as "national money". Stocks, bonds, business function and even general welfare is elevated to an equal footing with the need for a good sound money in your pocket. The mood becomes one of "what good is a sound dollar if we are deflating"? Check that one off your list because we are well on that road."

USAGOLD / Centennial Precious Metals, Inc.From today's NEWS & VIEWS...#7145303/11/02; 17:15:09

Gold Myths & Realities

Myth: The biggest holders of pivate investor gold are people living in third world countries with a history of currency problems, not industrialized countries like in Europe, the United States and Japan where investors can utilize modern, sophisticated and diverse
equities markets to hedge various economic uncertainties.

Reality:The big industrialized countries sit atop the rankings of world gold owners. The French at 3600 tonnes rank first. When combined with fifth ranked Germany, the two European Union powerhouses control nearly one quarter of the world's bullion and coin. The United States ranks second after racking up two big acquisition years in 1998 and 1999. Surprisingly, Japan ranks third and that's before the huge buying spree launched by the Japanese people over the past six months.

Chart Courtesy of the World Gold Council / London

Black BladeAvaya Cuts Jobs, Sells Stake to Warburg Pincus #7145403/11/02; 17:16:49


CHICAGO (Reuters) - Communications equipment maker Avaya Inc. on Monday said it will cut its work force by more than 8 percent (1900 jobs) and sell a minority stake in the company to Warburg Pincus Equity Partners as it adjusts to a lowered sales outlook amid the slowdown in communications spending.

Black Blade: Yep, more nonessential "Phone Bones" off to the "Bone Pile". That's OK though as they will be "seasonally adjusted".

Black BladeUSAGOLD - Private Ownership#7145503/11/02; 17:27:15

France at number 1? Who would have guessed? I suppose so. It was during the 1960's that the French government under Charles De Gaulle was cashing in Gold-backed US Dollars for the "real thing" until Dick Nixon slammed the window shut. Hmmm...

- Black Blade

Black BladeSEC Requests Documents From Qwest#7145603/11/02; 17:38:57


Securities and Exchange Commission Requests Documents From Qwest Communications

Black Blade: More Enron's? It appears that not only Qwest is under investigation, but that WorldCom is also being investigated by the SEC for fraudulent bookkeeping activities. There is rumor that Qualcomm could also be under investigation. It would appear that the chickens have come home to roost.

slingshotNomad Msg# 71432#7145703/11/02; 18:32:15

The end of the world as we know it.

I found your post most interesting. Your surmation of Mr. Rifkins writings indeed point in a direction that the world is in a state of transformation.An elite ruling class supported by legions in servatude. I hope that my following opinion does not come true, but my observations say otherwise.

Over the years there have been many discoveries and adaptations in the workplace. Truly changing the world. Automation combined with the assembly line has done both good and evil in our lifetime. The automation of the assembly line has increased production and inturned increased profits. Providing availability of a product at a lower price to the public. These two new inovations also created a new war. One of profits VS.workers/jobs.
Mr. Rifkins veiw of a split society could well be in the making. An automated assembly line that requires lower skill to operate enducing others to a non-exsistant job society.
At the very least a highly competative workforce accepting lower wages for a decreasing job enviorment.Taking into account the growing world population one can only imagine the job market in ten years.
Yet having an enlarged skilled/semi-skilled workforce would still be small to the overall population of the planet.
Is this the foundation of the elite class. Was NAFTA and GATT in essence to bring wages to an equalibrium? Were all these treaties for the benifit of mankind or PROFIT? Are we witnessing the grasp of the worlds finite resourses right before our eyes.Biosphere,Wildlife protected areas, No drilling for oil zones.
Gold being one of these resources would be high on their list. At this price it is being handed to us on a platter.
If they succede in reducing the workforce or lowering wages, who will be able to buy at this price?
They have planned it well and have both sides covered. Profit and Gold.
The Third Tier will be those who control the masses.
All the more reason to own gold in a uncertain world.

TrapperSir Boiliermaker#7145803/11/02; 19:14:49

I must agree that a big house and a big SUV are not an American birth right. It an Earned right. I have watched the socialist on the board rail against America for our lifstyles, but the question remains how did we come by that lifestyle. Here is a nation only 200+ years old with only medium natural resources, and our poor are the envy of the planet. All that oil is for sale on the open market the world can buy it all if it wants, stop complaining and go buy it. While they are at it buy a SUV and a big home too. The last time I checked our Bill of Rights did not have a copy right on it. Freedom made this all possible, and as we loose ours it is easy to see where we are headed. All that gold is just setting in big piles waiting to be bought, they can start there, I am. Live small.

HoratioJapan Reflation#7145903/11/02; 19:24:20

Japan can stimulate the western worlds economys simply by printing Yen.Send the Yen to the U.S.Treasury for distribution among the U.S.citizens.The Treasury would simply write a check to every man woman and child in equal amounts of $2500.00 with the provision that they spend it on a japanese import.Japan would end its deflation ,trade would increase,the trade deficit would end for the U.S.and we would cease to be the worlds biggest debtor.The Dollar could drop which would stimulate U.S.exports including food exports.Interest rates could rise somewhat without harm to the economy ,people living on savings and interest income would benefit and increase thier spending.Everybody WINS !!!!
TrapperSiochain#7146003/11/02; 19:26:23

I aked the same question here about the goverment deciding it need my gold more than I do. As I pointed out it was only pre'33 coins and bullion that were called in, because that was all there was. The 15% figure you mentioned I think was from the Council on tangible assets. To my knowledge there is no rule on what a collectors coin is. Then fact that our host has some fine $10.00 gold coins for sale should be evidence that not everyone turned them in. I'm sure with you on this if you get any ideas I would covet hearing them.
My plan is to have some pre'33, some 90% silver coins, and some PT coins. I have some Eagles which I will trade for fiat to pay off some bills etc. after the first big run up and hold the rest. Live small.

HoratioCommodity Inflation #7146103/11/02; 20:49:36

Look at the Backwardation in the Oats markets.Oats frequently lead the commodity bull markets.In previous gold bull markets the CRB was leading the way.Oats may be telling us something about a bull in Gold coming.
jinx44Town Crier--Zimboland#7146203/11/02; 21:27:11

I was there when Uncle Bob was a gook. The Brits let his ZANU-PF party thugs stuff the ballots through intimidation and murder to win in 1980. They got one man, one vote: and they will never have another real vote. It is interesting how marx appeals so much to greedy people who want power without responsibility. Pombere ne Hondo
sunnytest#7146303/11/02; 22:23:03

Black BladePetroleum Higher, Nikkei Dives#7146403/11/02; 22:34:01

Natural Gas prices are rising in after hours - now at $3.06/Mbtu and NY Crude up a penny. The Nikkei dropped 199 points (a drop in the bucket actually). Gold holds onto a slight gain. Meanwhile it appears that energy costs will likely continue higher.

- Black Blade

Mr GreshamNasdaq at 1929...#7146503/11/02; 23:32:07

...two days running. Hell-lll-oooooooohhhhh!
Black BladeBuffett lashes out at options #714663/12/02; 00:16:38

He calls stock deals 'shareholder abuse'


NEW YORK Warren Buffett, using the forum that Berkshire Hathaway Inc.'s annual report provides, has renewed his attack on the widespread use of stock options and the ways corporations find to ensure that executives will profit from options even if the company's share price declines.

Buffett, Berkshire's chairman, argued that stock options often did not give executives the same stake shareholders have in a company, as the shareholders will suffer if the price slides.

Black Blade: I have found that most CEO's and upper management executives are not worth their salaries by any extreme measure. Most CEO's are simply glorified conmen …… er, I mean PR people, who do not work in the best interest of the shareholder. Ken Lay, Jeff Skilling, Al Dunlap, etc. aren't the only crooked CEOs in corporate America. I remember when ex-CEO Warren Nenecker of bankrupt Pegasus Gold told the bankruptcy court that he and his cronies needed their multimillion-dollar "Golden Parachutes" in order to use their expertise to guide the bankrupt miner through bankruptcy. The Dim Bulb judge bought it! After all, these are the guys who drove the company into bankruptcy with some stupid decisions (like Mt. Todd in Oz). Meanwhile the miners didn't even get severance. I'm sure old poster Farfel could describe that whole debacle in a more colorful way than I. I am beginning to like Dubya's plan to "stick it" to corrupt CEOs.

Black BladeIndian gold imports likely to rise in next few days#714673/12/02; 00:28:32


NEW DELHI (Reuters) - Gold buying in India, the world's largest consumer, is likely to increase in coming weeks as global prices stabilise but demand will be sluggish after March with the end of the wedding season.

Black Blade: However, after the "April Fools Day" surprise in Japan, we could see increased demand from the far east.

Black BladeIndian Gold Jewelry#714683/12/02; 00:30:49

Nice picture of Indian Gold jewelry. (see link)
Black BladeAsia Awash In Red#714693/12/02; 00:47:09

The Nikkei 225 tumbles about 312 points at the close.
Black BladeO'Neill Seen Maneuvering on Debt Limit#714703/12/02; 01:00:22

O'Neill Expected to Use Technical Maneuvers to Postpone Congressional Fight Over Raising Debt Limit


WASHINGTON (AP) -- Treasury Secretary Paul O'Neill is expected to maneuver federal employees' retirement funds to let the government avoid breaching its borrowing limit later this month, congressional officials said Monday.

The move -- which is legal and was used by the Clinton administration in 1995 -- would let Congress postpone politically painful votes on raising the current $5.95 trillion debt ceiling. President Bush and O'Neill have repeatedly asked Congress to boost the limit by $750 billion by late March or risk an unprecedented federal default.

Black Blade: Of course there never was a budget surplus so this should be no surprise. "Interesting Times"

Mr GreshamAn Amazing Hour with FOA#714713/12/02; 01:19:33

Heard something about bonsai today, so I thought of reading his post on "A Tree in the Making". Couldn't stop reading -- next one, then the next one. Last spring he was highly energized at developments he was seeing. (Led to the "Big Fish" posts, about Alan G.)

As I've said before, I can't look behind the scenes into the actual markets that drive all this gold-oil-paper nonsense. Whatever this guy is looking at -- I can recognize his depiction of it for us as clear, coherent, and compelling. If it isn't about this modern gold market and currency transition (and I don't know what else it could be about), then it is a walk with an amazing mind, one that I greatly miss hearing from.

TownCrierFrom The Times, London, as reprinted in the Business Report of South Africa#714723/12/02; 01:40:40

HEADLINE: US feels the bite of an overaggressive dollar

Worth a good look. Recaps much for the mainstream world that some of us have been warning about here -- particularly the parts detailing with the side-effects of the dollar-centric international monetary structure.


----------In all countries, globalisation can be a cruel discipline. It destroys as it creates. It may produce "the greatest happiness of the greatest number" but it is natural for communities to fight for survival, particularly in their home markets.

We should have some sympathy for the US steelworkers, who are losing their jobs not for lack of skill but as a consequence of distant financial forces that have little to do with them. ...The real problem lies in the exchange rate for the dollar.

...How can markets overvalue the dollar by so much? The reason is that the US has for a long time had a strongly favourable capital balance....In the second Clinton term the runaway Wall Street boom attracted even larger inflows of foreign capital...The result was that the American external deficit widened, from a sustainable level to one which never looked to be sustainable. ...The rate of increase was explosive, doubling every two years. No economy can live with that.

The modern pattern of world investment is that Asia makes the savings, Europe is neutral and the US economy absorbs them. That means Asian policy decisions have a direct impact on the US economy and the price of the dollar.

The US is therefore both the beneficiary and the victim of the world's preference for dollars.

A dollar devaluation would naturally lead to a higher dollar gold price, which could be bad news for the central banks which have sold gold to buy dollars. Central bankers remain hostile to gold because it is an asset they can neither create nor control. [Randy's note: Remember, this was originally written for a London audience.]

Yet the gold price may be an interesting indicator of what will be happening; gold may be the little canary in the big mine.

In the past 20 years the gold price has fallen by 70 percent before making a modest recovery. In the 10 years before that it rose by 2 400 percent from the old price.

There is new buying in Japan, Taiwan and China, countries which help to fund the US deficit. Asian people have known paper money for a long time - China invented it. The experience has left them with a liking for gold.

The only type of money the whole world can devalue against simultaneously is gold, but that is a policy with more appeal to Chinese traders than to central bankers. In essence, the problem of the overstrong dollar looks at present to be insoluble.-----------------

Although I've excerpted a substantial amount of this material, it is highly recommended that you take time to read the full article to get this material in fuller context. (click link given)

And as far as the concluding statement goes, it is essential that you understand that the new financial architecture devised for the ECB in conceiving the euro monetary system completely nulifies the above-stated "official problem" with rising gold. In due course, the European Central Banks, and all who are following that model of "best international practices" will welcome rising gold.

In time, investors throughout the world will find themselves buying gold with surplus cash in a recurring act that has become as natural as breathing in and out.


TownCrierRediscover USAGOLD#714733/12/02; 01:46:43

Had a visit with a guy named Cliff. I took notes.


Black BladeEurope Solidly In The Red#714743/12/02; 03:06:20

Europe is awash in red. US market indice futures are strongly negative. The USD has strengthened as th yen has weakened once again. NG is higher while NY Crude has pulled back. Could be an "interesting" open in NY.

- Black Blade

Humble PieMr Gresham post#71471#714753/12/02; 04:15:52

I found myself doing the same thing last week,and likewise would very much like to hear from FOA/ANOTHER again.
Black BladeArthur Andersen Is Finished#714763/12/02; 04:17:36

Just coming over the wires, is a report that Arthur Andersen has until Thursday to plead guilty to charges of fraud. Otherwise, charges will be filed by the US Attorney General. It looks as if Arthur Andersen is finished as a corporate entity. They are in talks to sell assets to competitors. Their European arm is likely to spin off as a separate entity this next couple of weeks. They have also lost over 30 high profile clients since they were busted shredding documents. The latest clients to dump Arthur Andersen are Fedex and Riggs National Bank. Clients can't leave AA fast enough. It's as if they have contagious plague. The name Arthur Andersen is now synonomous with fraud, deception, etc. Last night former Fed Chairman Paul Volker said that Arthur Andersen had only three choices: Bankruptcy, Merge, or change policies. Personally I think that Arthur Andersen is toast. No self respecting CEO wants to be associated with a criminal enterprise. In other words - "Game Over"

- Black Blade

Gold StandardA Freudian Slip, or something more serious?#714773/12/02; 05:05:06

Bob Chapman's International Forecaster 9th March issue, contains the following. Can you spot the (deliberate?) error?

"The experts tell us the 11-month recession is over. We disagree. As usual the recession's effect is uneven. Thus far California has done well due to diversity. In January they added 30,200 new jobs, while Oregon lost 4,400 jobs, its 14th consecutive monthly decline. Hawaii and Nevada, which in each state travel and terrorism account for 30% of state GDP have been hit badly. Employment fell 10% and 3% respectively. Employment in Washington State is off 3% and Boeing continues to cut as many as 30,000 jobs. In the fourth quarter Arizona, Oregon and Washington saw construction employment fall 13.3%, 14.6% and 12.5% respectively. Some firms have hired employees back but how lasting that will be remains to be seen."

YES! The major industries of both Hawaii and Nevada. Is this a new "Axis of Evil", or an evil-minded spell-checker?

Don't believe everything that you read!

nickel62Gold Standard#714783/12/02; 05:31:48

With all due respect I don't get your point. Please elaborate.
nickel62I need some help putting this Gibson Paradox into english!#714793/12/02; 05:35:18

At the URL above is the actual paper that Larry Summers wrote in the eighties telling how a relationship existed between the real price of gold and the rate of inflation and real interest rates in the economy. I was origionally an english major in college and I am willing to try and translate this into a readable form for those that need to understand this but really need the minds that meet here to help with the challenge. Please read the above link and see if you can help put Mr. Summer's words into common english so that those who still wonder what is going on with the gold market can understand the process better. Thanks.
Belgian@ Gresham and Old Yeller...#714803/12/02; 05:54:18

Yes, indeed gentlemen...we are more and more in sync, with our shaped thoughts, around this splendid Gold Trail !
Take a very close look to what A. Fekete is exposing lucidely on the neighboring (GE) pages. With the exception of his Gold-Standard stubborness...the thoughts are profound and very illuminating. Soon, A. Fekete will join Another's solution to the unworkable g-standard !?

What striked me most was about the 100 Trillion derivatives (2000) from zero at 1971 :...The world all of a sudden developed a "insatiable" appetite for < in-su-ran-ce > !
Insurance of nothing more than hot air.

And it is not only POG who is dollar-supportive, but the actual yen-carry trade as well. This whole big picture of POG / BONDS / INTEREST RATES / BANKS / DEBT-PRICES etc...
was + is + remains, the Permanent evidence for THE final total collapse ! Evidence that is pointing from any different angle imaginable and therefore inevitable ! And certainly last but not least, the *DEJA VU* !
Regards to both of you faithfull Goldmeisters.

USAGOLD, thanks for the Private Gold stats. But have some problem with Indian stocks (1.100 tonnes) being 1/10 of what I thought they were ? Indian Gold-Jewelry is investment Gold to them, but probably not for the bullion-investment stats ?

The HoopleBlack Blade#714813/12/02; 06:09:05

According to last week's Barron's we have already surpassed our national debt limit. I was curious how they could be in violation of the statute and not say anything. Unless Barron's was wrong which is highly unlikely. I think O'Neill has some "splainin'" to do.
USAGOLDBelgian#714823/12/02; 06:31:10

Private investor stocks are coin and bullion only.

You are right. In much of the world, karat jewelry is viewed as a store of value with India being the prime example.

In this little study though, we didn't include karat jewelry.

Thanks, Belgian.

I thought the Belgium/Luxembourg stats interesting, but the most surprising to me was Japan.

Siochain@Trapper#714833/12/02; 06:38:25

I plan to talk with USAGold re whether 15% rule applies to pre add some lower priced pre 1933 as suggested in their excellent book. I have already some nice MS62/63/64 coins of various dates as bullion coins and definitely silver plus pre 1933 not far above melt price.

I wish I didn't have this gut feeling that the US "government" just might pull out some new trick to get all the gold should dollar fall hard...and it will fall though how much may depend on the "war" or make that "wars" effort(s) We have lost many freedoms and I fear more will go in the name of protection.

I figure gold coins can make a lovely charm bracelet or know they have bezels to insert coins and turn into jewelry...I can see all the forum wearing rhea latest gold coin earring!!!

At some point we will have to come up with some additional options...I hate to let PM out of my hands but maybe some will have to go out of the Country...but who knows where is safe

Hopefully my concern is for naught and that the US leaves gold alone or primarily goes after larger bullion bars. I've stayed with bullion coins for that reason.

Pre 1933 still looks like the best extra layer protection.....but with some of the game playing going on to prop up markets and keep the public unaware of true economic conditions...I guess I am not very trusting of even the 1933 protection...though best we have

Bullion can always be melted and reformed which is one way to consider.. Then there is the problem of getting metal turned in....a lot wasn't in 1933.

I'd like to hear from others - though this subject has been explored before - maybe we should look at worst case scenario and options...I certainly would like to hear some additional ideas for no one is going to take my PM_!!!!

"Scenes are now to take place as will open the eyes of credulity and of insanity itself, to the dangers of a paper medium abandoned to the discretion of avarice and of swindlers." --Thomas Jefferson to Thomas Cooper, 1814. ME 14:189
"The evils of this deluge of paper money are not to be removed until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions. Till then, we must be content to return quoad hoc to the savage state, to recur to barter in the exchange of our property for want of a stable common measure of value, that now in use being less fixed than the beads and wampum of the Indian, and to deliver up our citizens, their property and their labor, passive victims to the swindling tricks of bankers and mountebankers." --Thomas Jefferson to John Adams, 1819. ME 15:185 {shades of AG's cattle!!!)

RobotGuyPOG#714843/12/02; 07:11:25

Early morning bouncing again. Interesting.
nickel62Gold price moving!#714853/12/02; 07:22:56

Gold in New York $3.00 higher than at this time yesterday.
nickel62Powerfull stuff...#714863/12/02; 09:14:27

The Intelligence Of Nations
[Peter Brimelow writes: The Washington D.C. press conference held Friday, February 22, to publicize Richard Lynn and Tatu Vanhanen's new book on national IQ differences reportedly did not attract one member of the national media. Of course, this is partly because the national media is bone idle, intellectually incurious and obsessed with Beltway trivia. But it's also partly because, in the last few years, it's become sharply more difficult to discuss IQ in the establishment press. That's what we're here for at VDARE.COM. However, the discussion apparently goes on in the catacombs of academe, as Lynn and Vanhanen show. The implication of their work for immigration policy is enormous: if countries vary systematically in average intelligence, then the average IQ of the immigrant inflow can be controlled by selecting among those countries. In other words, the National Origins principle, embodied in the 1920s immigration reforms and repudiated as "discriminatory" by the 1965 Act, actually made perfect sense.]

By Philippe Rushton

See also: Steve Sailer on Lynn's Pioneer Fund history

IQ and the Wealth of Nations. is a brilliantly-conceived, superbly-written, path-breaking book that does for the global study of economic prosperity what The Bell Curve did for the USA. Richard Lynn and Tatu Vanhanen examine IQ scores and economic indicators in 185 countries. They document that national differences in wealth are explained most importantly by the intelligence levels of the populations. They calculate that mean national IQ correlates powerfully—more than 0.7—with per capita Gross Domestic Product (GDP). National IQs predict both long-term and short term economic growth rates. Second in importance is whether the countries have market or socialist economies. Only third is the widely-credited factor of natural resources, like oil.

One arresting fact emerges: the average national IQ of the world is only 90. Fewer than one in five countries have IQs equal or near the British average of 100. Almost half have IQs of 90 or less. This poses a serious problem if the book's conclusion that IQ = 90 forms the threshold for a technological economy is correct.

Lynn and Vanhanen review the theories advanced over the last 250 years to explain why some countries are rich while others are poor. These include: climate theories (temperate zones are said to be best); geographic theories (an East-West Axis is said to be best); modernization theories (urbanization and division of labor are said to be good); dependency theories (exploitation and peripheralization of poor nations are said to be bad); neoliberal theories (market economies are said to be good); psychological theories (cultural values like thriftiness, the Protestant Ethic, and motivation for achievement are said to be good). Some of these factors no doubt play a role. But it turns out that IQ that does the heavy lifting.

Next, Lynn and Vanhanen review the scientific literature and find that IQ is an important determinant of educational attainment, earnings, economic success, etc. In the United States and Britain, the correlation between IQ and earnings for individuals is approximately 0.35. (That is, cleverness is a fairly loose guarantee of economic success for an individual, but is significant across an entire population. If you bet on it at a gaming table you wouldn't win on every throw, but you would make a lot of money over an evening.) Of course, it makes sense that intelligence determines earnings. More intelligent people learn more quickly, solve problems more effectively, can be trained to acquire more complex skills, and work more productively and efficiently.

Nations whose people have high IQ levels also have high educational attainment and large numbers of individuals who make significant contributions to national life. On the flipside, nations with low levels of intelligence have low levels of educational attainment and few individuals who make significant contributions. Low intelligence leads to unfavorable social outcomes like crime, unemployment, welfare dependency, and single motherhood.

Lynn and Vanhanen prove that the widespread though rarely stated assumption of economists and political scientists—that all peoples and nations have the same average IQ—is wildly wrong. Their evidence documents substantial national differences in average intelligence. The highest average IQs are found among the Oriental countries of North East Asia (average IQ = 104), followed by the European nations (average IQ = 98), and the mainly White populations of North America and Australasia (average IQ = 98). Further behind are the countries of South and Southwest Asia, from the Middle East through Turkey to India and Malaysia (average IQ = 87), as are the countries of South East Asia and the Pacific Islands (average IQ = 86), and Latin America and the Caribbean (IQ = 85). Lowest are the countries of Africa (average IQ = 70).

Lynn and Vanhanen find that some countries do have higher or lower per capita incomes than their national IQ averages would predict. This is where having a market or socialist economy or sitting atop a sea of crude oil comes in.

Some of the countries with a higher per capita income than would be predicted from their average IQs are Australia, Austria, Barbados, Belgium, Canada, Denmark, France, Ireland, Qatar, Singapore, South Africa, Switzerland, and the U.S. Except for Qatar, South Africa, and Barbados, all of these are technologically highly developed market economies. Qatar's exceptionally high per capita income comes from oil exporting, which is actually managed and controlled by corporations and people from European and North American countries. South Africa's much higher than expected per capita income derives from the high performance of the industries established and managed by the country's European minority. Similarly, Barbados's above average wealth comes from its well-established tourist industry and financial services, which are owned, controlled and managed by American and European countries.

Some of the countries with lower per capita income than would be predicted from their average IQ: Bulgaria, China, Hungary, Iraq, South Korea, the Philippines, Poland, Romania, Russia, Thailand, and Uruguay. Most of these are present or former socialist countries. Iraq has suffered from losing the Gulf War and a decade of UN trade sanctions. The large amount of ethnic conflict in the Philippines decreased growth.

Lynn and Vanhanen provide a detailed examination how well IQ theory stacks up against its competitors. For example, two significant exceptions to the view that a tropical climate is detrimental to wealth are Singapore and Hong Kong, which lie in the tropical zone but are rich. Conversely, Lesotho and Swaziland are temperate, lying slightly south of the Tropic of Capricorn, but poor. These differences, however, can be explained in terms of intelligence theory. The people of Singapore and Hong Kong belong to the ethnic group with the highest average IQs; the people of Lesotho and Swaziland belong to the ethnic group with the lowest.

Modernization theories, according to which all economies would evolve from subsistence agriculture through to various stages of urbanization and industrialization, have worked for Western Europe and the Pacific Rim but have failed for the four remaining groups of nations (South Asia, the Pacific Islands, Latin America, and sub-Saharan Africa). IQ and the Wealth of Nations proposes that modernization theories describe Western Europe and the Pacific Rim because these countries have appreciably the same or somewhat higher IQs than in the United States. But they did not work for the other four groups of countries because average IQs are below the technological threshold.

But why did the peoples of East Asia, with their high IQs, lag behind the European peoples until the second half of the 20th Century? Well, China's science and technology were generally more advanced than Europe's for around two thousand years, from about 500 B.C. up to around 1500 A.D. But in the 15th century, Chinese inventiveness came to an end and from that time on virtually all the important advances were made by Europeans, first in Europe and later in the U.S. The explanation may be that Europeans developed the market economy, while China stagnated through authoritarian bureaucracy and central planning.

The failure of Japan to develop economically until the late 19th century is largely attributed to a regulated economy and isolation from the rest of the world. By 1867-68 a revolution occurred and the new rulers embarked on a program to modernize Japan by adopting Western education and technology, and by freeing up the economy by transforming state monopolies into private corporations. Much of the Japanese economic success in the 20th century was built by adopting inventions made in the West, improving them, and selling them more competitively in world markets. Japan thereby built up its motorcycle, automobile, shipbuilding, and electronics industries. Although it is sometimes asserted that the Japanese have not made any significant scientific and technological innovations of their own, this underestimates their technological achievements: the fiber-tipped pen (1960), "bullet" trains traveling at 210 km per hour, much faster than any Western trains (1964), laser radar (1966), quartz watches (1967), VHS video home systems (1976), flat screen televisions using liquid crystal display (1979), video discs (1980), CD-ROM (read only memory) disks (1985), digital audio tape (1987), and digital networks for sending signals along coaxial cables and optical fibers (1988).

African countries are at the opposite pole from China and Japan in national IQ. This may explain why they are such a major anomaly for modernization theory. The low rate of economic growth of African countries following their independence from colonial rule in the 1960s is one of the major problems in developmental economics. During the years 1976-98, the average rate of economic growth per capita GNP of the 41 countries of sub-Saharan Africa for which data are available is much lower than in the rest of the world. Many of the African countries actually suffered negative per capita growth rate. Economists have quantified all possible factors, such as climate, ethnic diversity, geography, mismanagement, unemployment and the like, and compared the situation to elsewhere in the world, especially Asia. They concluded that these factors do not provide a complete explanation and that there is some "missing element." Some have suggested the low level of "social capital," i.e., the widespread corruption and lack of trust in commercial relationships, poor roads and railways, unreliable telephones and electricity supplies, and the prevalence of tropical diseases such as malaria.

IQ and the Wealth of Nations identifies IQ as the missing link. Some of these "social capital" are actually manifestations of a low level of intelligence in the populations. Poor telephone services and electricity supplies, low agricultural yields, and the poor advice given by government advisory boards reflect low average IQ. With a mean IQ of 70, the populations of Africa cannot be expected to match the rates of economic growth achieved elsewhere in the world.

Finally, Lynn and Vanhanen peer into the future. They predict future growth is most likely in countries with high national IQ scores but currently bad economic systems. The countries of the former Communist Bloc—Russia, Poland, Bulgaria, and Romania, and the People's Republic of China, and Vietnam—are good bets.

What else can be done? Lynn and Vanhanen also list some of the factors, some environmental and some genetic, that might raise IQ scores and somewhat alleviate the disparities in national average IQ. These include: better nutrition, education and health; and ending the dysgenic fertility trends where the lowest IQ people produce the most children. (Obviously, immigration policy has a role to play too.)

The take-home message of IQ and the Wealth of Nations: national differences in IQ are here to stay and so is the gap between the rich and the poor countries. Political promises that the gap is temporary, and will be remedied by aid from rich countries to poor countries, or even by poor countries adopting appropriate institutions, will not be fulfilled. Such promises assume that all human populations have equal mental abilities to adopt modern technologies and to achieve equal levels of economic development. They do not. The authors sound a clarion call for the recognition of national and race differences in intelligence.

Adapted from:

The Bigger Bell Curve: Intelligence, National Achievement, and The Global Economy, 22 October 2001, (PDF version) in Elsevier Science journal Personality and Individual Differences)

TownCrierJensen update: Long-term effects of war against terrorism are still over horizon#7148703/12/02; 10:28:43

In purely military terms, Operation Enduring Freedom is a resounding victory. [However,] Afghanistan itself is less stable now than before the war. There has been a revival of warlordism, banditry and opium production. The new pro-American government does not have full control of the country and many of the warlords responsible for the murderous chaos that helped bring the Taliban to power have resumed positions of authority.

Looking beyond Afghanistan, the war had a contagious effect on South Asia and the Middle East. India and Pakistan veered closer to hostilities over Kashmir and the conflict between Israel and the Palestinians intensified to the point where President Bush finally realized it could undermine his global coalition against terror. Hence, a return to more active U.S. diplomacy there....
(click link for full commentary)

GraefinMAHENDRA SHARMA...further info?#7148803/12/02; 11:09:46

Reference uponroof's post:(03/06/02; 20:55:47MT - msg#: 71212) (3-6-2002)discussed an Indian astrologer, MAHENDRA SHARMA. I have already done a web search and haven't come up with much info on his predictions. Can anyone point me in the right direction?? Veilen Dank und Tschüss!
RobotGuy"Gold's time in the sun"#7148903/12/02; 11:19:44


SCOTTSDALE, Ariz. (CBS.MW) - The equity market's shakeout finally gave gold investors something to smile about, fund manager James Vail said.

"There's an old Wall Street adage that says 'Put 10 percent of your assets into gold and hope it doesn't work,'" said Vail, manager of the Pilgrim Precious Metals Fund (LEXMX: news, chart, profile).

Most recently, gold has been viewed as a safe haven amid economic uncertainty and "worked," producing solid, shiny returns. The $67 million fund is up 21 percent this year, compared to a 1.3 percent rise by the S&P 500 Index. On a three-year annualized basis, it's gained 9 percent.

Not only has the gold sector shown strong returns, but also has entered a period of consolidation, which Vail said he believes could benefit investors.

RobotGuy: It's nice to see the odd supporting article here and there.

TownCrierGermany promoting gold ownership -- whether sceptics want to see it that way or not#7149003/12/02; 11:22:13

HEADLINE: Bundesbank Says It Will Sell 10.9 Tons of Gold to Make Coins

--------Frankfurt, March 12 (Bloomberg) -- Germany will mint 500,000 100-euro coins weighing 7.75 tons (15.5 grams each) plus 100,000 200-euro coins weighing 3.11 tons (31.1 grams each). The Bundesbank said its sale of 3.3 tons was behind the drop in the euro area's gold assets by 36 million euros ($31.4 million to 126.766 billion euros.

he sale of ``3.3 tons of gold listed on the ECB's balance sheet is part of the volume the Finance Ministry requested from the Bundesbank,'' said Wolf-Ruediger Bengs, a spokesman for the bank. Selling the remaining 7.6 tons from the bank's reserves will affect the ECB's balance sheet in coming weeks, he said.

The government had announced its intention to sell gold coins earlier. It said it can't sell any more of the central bank's gold reserves before an agreement expires in 2004 and has no plans to use revenue from gold sales to plug the country's budget deficit.-----------------
Sure, they're being called "commemorative", but look for these coins to sell nearly at spot prices rather than the typical markup that commemorative items normally carry. Further, it is no coincidence that these 100 and 200 euro coins tip the scales at half-ounce and one ounce, respectively -- nice, tradable round numbers.

A statement is being made and sentiment is being fostered.


SiochainGraefin#7149103/12/02; 11:33:56

Above is link...use with care
78358nesara#7149203/12/02; 12:10:41

All right, my first qustion is going to be really dumb, so I get some points for knowing that.
What is NASERA? I keep getting emails about it and a search brings up such conflicting information. I know the astute members of this forum can put it in a nutshell for me.
Thank you

GraefinSiochain#7149303/12/02; 12:23:04

Thanks for the link!...and will use with care.
goldenpeaceSiochain#7149403/12/02; 13:27:10

Why "use with care" on the Sharma link?
The CoinGuyTC regarding your #71490#7149503/12/02; 13:30:46

If the last two paragraphs were lopped of, it might make for interesting reading. Then again, I am not fortunate enough to be Mr. Buergin's editor.

If we look at the last Mark commemorative sale as a precursor. Do you have any thoughts on how long the lines will be to purchase this coin? Sold out within an hour, a day? I believe so, and also believe your analysis of the article to be spot on. Thanks for the read.

good day to you sir,

The (physical)CoinGuy

RockNice Article Robot Guy#7149603/12/02; 13:44:12

like you said robot guy, its nice to finally read and hear some press for gold. it blows my mind how the wall street pimps all of a sudden after AG's recent speech on the economy say the recession is over. those so called stock experts are starting back up telling the masses to jump back in the market while the prices are low. i didnt know that you could say the recession is over on such short notice. are they allowed to just look at a few reports that look favorable and ignore the ones that don't? i thought all main indicators had to at least be heading in the same direction.

A few of the big economical woes that stand out in my mind are 1) the CEO's that recently met in boca raton said they had no intentions on spending capital in the near future, 2) the bone pile is still growing 3) the national debt and trade deficits cannot be contained, did i hear someone say 6 trillion?

we have a market that doesnt know what the future holds in terms or war or terrorism which makes an already uncertain market even more uncertain yet the wall street pimps act like theres nothing to worry about. all they want to do is pump up their interests and half of them don't even own the stocks their telling us to buy.

every now and then one of the commontators like mark hanes will ask one of these stock experts or ceo's what stocks they like then they'll do a follow up and say do you own it? from time to time i'll hear a no. what does that tell you? it tells me they recommend a stock for the public to buy yet its not good enough for them to own.

Siochaingoldenpeace#7149703/12/02; 13:56:28

First, I don't know that much about this astrologer....though I must admit that a few of his predictions are uncanny...yet I also know that there was much excitement re his post that gold would go to highs by last Friday...and I believe, based on posts on some other boards, a number of people acted on this and may have gotten burnt

Are there some people that can know from astrology or have a sixth sense...I am open to the possibility ...though I imagine there are many more who claim the ability than actually may be gifted

As to a curiosity...sure..I am curious after reading about him but I would not make my investment decisions based on his readings....that's just me....though I may check and see how accurate he is in the future.

PippinVolume of gold extracted till now vs. new trade volume#7149803/12/02; 14:29:02

The more I read the various articles dedicated to gold, the more I wonder about the proportion <volume of available gold> with <present trade and financial volumes>.
Would a come back to gold standard be possible (as proposed by the link above - letter to the Prime Minister of Japan) with the existing total volume of gold, even assuming that the "rules of the road" are respected by all parties (meaning regulations of the derivatives, reduction of the credit etc.)?
In other words: are we sure that the existing gold would be suffiscient to sustain the economy ?

Or are we not discussing about a gold standard, but just about asking the central bank to stop their gold sales ?

Black BladeArgentina Prepares to Start Closing Nation's Banks#7149903/12/02; 14:48:44


Fortaleza, Brazil, March 12 (Bloomberg) -- Argentina plans to start closing the weakest of the nation's 87 banks as early as next month and merge others as the government prepares to lift restrictions on withdrawals and money transfers.

A new state agency will begin assessing which banks to let fail after the April 15 deadline for depositors to decide whether to convert frozen savings into new government bonds, Finance Secretary Lisandro Barry said. Banks in Argentina face tens of billions of dollars of losses because of the government's default on $95 billion of bonds and devaluation of the peso, analysts said. ``After this process is over, some banks will be feasible and others will not,'' Barry said in an interview at the Inter-American Development Bank's annual meeting in Fortaleza, Brazil. ``Some banks will be closed, others will be merged.''

Black Blade: Even if Argentines kept their accounts in US Dollars they could still be burned. There will be another run on the banks. They will do well to purchase Gold. In a word - "GRIM"

Black BladeWarning! Wall Street is Ready to Pick Your Pocket#7150003/12/02; 14:58:41


Is the employment picture getting better?

On Friday the U.S. Labor Department announced that 65,000 new jobs were created in February. But the government also adjusted January's figures so that the net gain was really just 29,000.

That's better than losses suffered during each of the last seven months. But the February gain is very subdued, especially since so many adjustments are made to the job figures that - whether upbeat or downbeat - they are very untrustworthy.

But it's a start, right?

Maybe. Because the winter has been so mild and because December was such a bad month for hiring, it could be that February's gain is a mirage that's unsustainable.

Black Blade: Of course we already knew that. This is another good article by John Crudele. Though he could have delved deeper into the BLS statistical manipulation on government data. It is even more likely that employment rolls dropped as many exhausted their benefits just ahead of the extension. Could get "interesting" now.

-off to the gym - later

Golden Bear nickel62 (msg#: 71479)-I need some help putting this Gibson Paradox into english!#7150103/12/02; 15:32:44

Sir nickel62,

as I understand it, the article is trying to say the following, but in typical "lets play the expert" language:

1: Real rate of interest is the current Fed Funds rate (FFR) minus inflation.

2: As the real rate of interest drops, the price of gold increases and vice-versa.

eg: Greenspan started slashing rates in Jan 01, and reduced the FFR from around 6% to 1.75%. Now, if we subtract inflation - the real rate of interest has gone negative! So in real terms, it is COSTING you to save fiat! You are earning a negative rate of return. So people's wealth is being eroded - so they either go into debt (to be paid off in less valuable fiat later) or they move into precious metals as a store of value/wealth.

Looking at a 3 year chart of the $XAU, we see that gold stocks bottomed in November/December 2000 and began their upswing in January 2001!

The discussion regarding monetary vs nonmonetary use of gold implies that a portion of all gold production is used for jewellry, and therefore not available for monetary purposes. The implication is that gold is always scarce, and the small amounts of production have little impact in alleviating the global demand for it. It is therefore a stable store of value, with little prospect of erosion from inflationary processes.

I suspect you are already aware of the above, however it is easy for us to forget this correlation due to the fact that most people rarely think in terms of the real rate of interest, and the correlation to the gold price is missed.

I apologise in advance if my analysis is too superficial...



Black BladeGold Higher, Silver and PGM supply Questionable#7150203/12/02; 17:14:38

Gold just bumped above $295/oz. We may be slowly working our way back to $300/oz. Still that's a lift of $5.20 over the last three days. Silver supplies appear to be tightening some. There is a rumor that the US Mint may "suspend" some of the US Silver American Eagle program. If true, this may be due to dwindling Silver supply at the US Mint and the US Strategic metals depositories. I will continue to look for solid evidnce and official information. Meanwhile Platinum and now to some small degree palladium prices are still steady but likely to rise as the Russian suppliers are finding it difficult to keep up PGM production. Finally after not hearing from a couple of my Russian friends from Norilsk, they say that work is slowing and the most production PGM ores are not being currently mined.

Note: Russian PGMs are primarily by-product of Norilsk Nickel and Russian stockpiles have been depleted since 1998 when Russia scrambled for "hard currency" at the time of the "Russian Bond Default", rampant political corruption and organized crime. "Interesting Times"

- Black Blade

Nomad @ slingshot#715033/12/02; 17:44:10

Thanks for considering what I wrote :)

Since I live in China, I may have a bit different perspective on some things than others, but ... I see the (near) future as quite different from today. Life here, in the cities, is quite good for most, and for me a 'lao-wai' (foreigner) it offers a lot of freedom and a healhy atmosphere to live in. It may be something most 'brain-washed' westerners would have a hard time believing, but I think on several levels (not all, of course) life here is MUCH better, more healthy, richer, etc. than it is in the west, and certainly much more (quite ironic, isn't it :) considering the recent state of affairs in the USA.

It is also completely obvious that China is set to be the dominant world power within, say, 20 to 50 years. With the one child policy, the wealth of 4 families is funneling down to one child ... making your average chinese young person much richer, even without the phenomenal economic growth rate factored in. And most of the locals are born capitalists ... they know how to make money faster and easier than any other group I have ever met.

Other major global factors should be the increased life extension proffered by biotechnology. The stunning reports of current experiments means that those under the age of 40 should expect to make it t

Nomad @ slingshot#715043/12/02; 17:44:11

Thanks for considering what I wrote :)

Since I live in China, I may have a bit different perspective on some things than others, but ... I see the (near) future as quite different from today. Life here, in the cities, is quite good for most, and for me a 'lao-wai' (foreigner) it offers a lot of freedom and a healhy atmosphere to live in. It may be something most 'brain-washed' westerners would have a hard time believing, but I think on several levels (not all, of course) life here is MUCH better, more healthy, richer, etc. than it is in the west, and certainly much more (quite ironic, isn't it :) considering the recent state of affairs in the USA.

It is also completely obvious that China is set to be the dominant world power within, say, 20 to 50 years. With the one child policy, the wealth of 4 families is funneling down to one child ... making your average chinese young person much richer, even without the phenomenal economic growth rate factored in. And most of the locals are born capitalists ... they know how to make money faster and easier than any other group I have ever met.

Other major global factors should be the increased life extension proffered by biotechnology. The stunning reports of current experiments means that those under the age of 40 should expect to make it to nearly 100 years of age (in my opinion) and those even younger should look for 100+ years being commonplace by the mid-point of this century. When scientists are growing replacement organs in/on pigs today, it's pretty hard to argue that such medical advances will not vastly increase the lifespans of most westerners.

This huge increase in the number of 'old folks' combined with massively increased productivity due to even more automation/robots/computers will bring most governments to their knees, I think. The collapse of the USA's Social Security system will simply be the 'canary in the coal mine' in my opinion. The ONLY way to escape from this trap of massive spending on 'entitlements' would be to open the doors of western countries to a massive inflow of immigration, cheap workers willing to support the tax base of an older, richer, elite.

How to protect yourself ? First hope that your family members have much needed information or bio-techology skills ... if not, then I would suggest that you start living small NOW, before the inevitable 'restructuring' occurs. And how best to protect whatever assets one may have ? Gold of course :)


Nomad @ slingshot#715053/12/02; 17:44:11

Thanks for considering what I wrote :)

Since I live in China, I may have a bit different perspective on some things than others, but ... I see the (near) future as quite different from today. Life here, in the cities, is quite good for most, and for me a 'lao-wai' (foreigner) it offers a lot of freedom and a healhy atmosphere to live in. It may be something most 'brain-washed' westerners would have a hard time believing, but I think on several levels (not all, of course) life here is MUCH better, more healthy, richer, etc. than it is in the west, and certainly much more (quite ironic, isn't it :) considering the recent state of affairs in the USA.

It is also completely obvious that China is set to be the dominant world power within, say, 20 to 50 years. With the one child policy, the wealth of 4 families is funneling down to one child ... making your average chinese young person much richer, even without the phenomenal economic growth rate factored in. And most of the locals are born capitalists ... they know how to make money faster and easier than any other group I have ever met.

Other major global factors should be the increased life extension proffered by biotechnology. The stunning reports of current experiments means that those under the age of 40 should expect to make it to nearly 100 years of age (in my opinion) and those even younger should look for 100+ years being commonplace by the mid-point of this century. When scientists are growing replacement organs in/on pigs today, it's pretty hard to argue that such medical advances will not vastly increase the lifespans of most westerners.

This huge increase in the number of 'old folks' combined with massively increased productivity due to even more automation/robots/computers will bring most governments to their knees, I think. The collapse of the USA's Social Security system will simply be the 'canary in the coal mine' in my opinion. The ONLY way to escape from this trap of massive spending on 'entitlements' would be to open the doors of western countries to a massive inflow of immigration, cheap workers willing to support the tax base of an older, richer, elite.

How to protect yourself ? First hope that your family members have much needed information or bio-techology skills ... if not, then I would suggest that you start living small NOW, before the inevitable 'restructuring' occurs. And how best to protect whatever assets one may have ? Gold of course :)


Nomad @ slingshot#715063/12/02; 17:46:13

many apologies for the multiple post ... my computer had a heart attack and automatically hit the submit button a bunch of times.

... and that should have read 'life is much more FREE than it is in the west ...

sorry again,

R PowellGolden Bear#715073/12/02; 17:59:19

Gibson's Paradox

Excellent! Simple, easy to understand without all the financial jargon, is always good! Thanks

Black BladePuplava Market Wrap Up#715083/12/02; 18:21:14


Calling into question this miracle of miracles for earnings was a spate of warnings coming from the usual suspects in techs and telecoms today. Lucent warned it won't make its forecast this quarter. Lucent was joined by a call from analysts that Microsoft and Nokia will also disappoint on their numbers. The earnings game has just begun. I suppose we could always get a hypothetical miracle in earnings by the end of the year. Under this scenario, analysts lower earnings expectations to a point that even losses begin to look good. Companies can then beat analysts' estimates by a wider margin, which then could become the next big story.

Black Blade: Similar to what I have been saying. It is funny though - human nature that is. Someone here once said best: "The Sheep Will Be Sheared". I think that most of these people deserved to be picked clean as they simply are too lazy to diversify, buy cheap (value investing), and actually study corporate balance sheets before they invest. I mean really, come on now, this is not rocket science. First things first though - get outta debt, get Gold and Silver portfolio insurance, get enough cash for several months expenses, and start a nonperishable food and basic goods storage program.

R PowellBlack Blade#715093/12/02; 18:28:40

I had also heard that same rumor that the mint might suspend or cut back production of Silver Eagles. There was a one ounce but only 90% silver with the old buffalo nickel design coin minted a short while ago. It was sold out before many of us were even aware of it's existence. The mint will probably have to buy some silver sometime this year. Coins and jewelry together amount to only about 20% of total silver useage but, a press release of the mint buying silver may cause a stir in the silver market. I don't think it will trigger a huge, long lasting move but it will be a good trading opportunity. Industrial shortages will cause the big one. I've seen estimates that the U.S. Mint's yearly silver use is only about 1% of total use. Yes, please do keep your eyes and ears open for silver news!
I saw your mention of Farfel in the first post of the day. There have been laments next door of departed posters, most recently G-khan. This brought to mind the many who have left our ranks, Farfel among them. I used to kid him about his blood pressure when posting. Perhaps some of the oldtimers will read this and stop by at least to say "hello".
Thanks for the silver news.

slingshotNomad Msg#71505#715103/12/02; 19:49:38

Computers and Gold

I see computers are the same all over the world. They tend to have a mind of their own.
I invite you to post often for your point of veiw may add a new piece to the puzzle. There are others here more qualified to answer your questions about gold.
If China's people are emerging capitalist, this can be good for gold. I look forward to your posts.


CanuckAluminum is down in Toyko#7151103/12/02; 20:42:00

...but all PM's are up!
mikalUS Gov't Silver Stocks#7151203/12/02; 21:05:03

It will be nice for those who hold 2002 US Silver Eagles if its mintage were the lowest of all the years and it became the last year of issue. U.S. Govt. silver stockpiles are almost completely gone now. They will have to end the program, possibly using a gradual phaseout, before the end of this year. This could be because the Defense industry uses silver in virtually every high or low tech weapon system, component, and vehicle in escalating amounts. Or it could happoen when silver and gold secure their long-awaited license to trade free on world markets this year in step with supply and demand. Since this will redefine popular economic perceptions- highlighted by hyperinflation, high interest rates, expanding unemployment, bankruptcy and default contagions, competitive currency devaluations, social and political unrest, trade wars, regional wars, mining industry taxation and consolidation, etc. Gov't demand must compete with trade and investment buying, hedgers buybacks, shortcovering purchases, panic industrial hoarding/stockpiling, reduced mining outputs, and new uses/technologies.
uponroofJapanese crisis comes da judge#7151303/12/02; 21:40:48

Just finished reading Nikkeionline articles about the recovering Japanese economy.

Thanks to stock market intervention the banking crisis has all but gone away for good. Japan has discovered the power of rigging their casino...much like the US.

The clever beauty of papering over real loses with gummint manipulated overvalued stocks is becomming a very popular (and effective) tool in big mahoff paperbug boxes all over the globe. It will continue as long as those buying gummint primed and pumped overvalued stocks remain comatose to reality.

This is so contrived and phoney one wonders why the banks don't just turn all assets into stocks for the month while their helpers, Japan's clever 'reformers', start the stampede of repatriating gamblers on an even larger scale. POOF! Gee whiz, who knows, Japan might end the month with the strongest banking sector on the planet.

Meanwhile, back in the real world:

"...Japan's core private-sector machinery orders fell a seasonally adjusted 15.6 percent in January to 763.8 billion yen, due to a sharp fall in orders from nonmanufacturers, the Cabinet Office said Monday.
It was the worst month-on-month fall since the government began recording machinery orders in the current format in April 1987, a senior Cabinet Office official said...


"...Private-sector machinery orders are considered a leading indicator of corporate capital spending six to nine months ahead..."

Then there's the unemployment problem...

"...Meanwhile, Michio Fukuoka, director general at the Japan Federation of Employers Associations (Nikkeiren), told a separate news conference that Japan's labor market remains severe and the jobless rate could deteriorate further. "We need to be prepared for a rise (in the jobless rate) to 7 percent to 8 percent in the period ahead," he said..."


Screw all Bear cartel, I am having a Mehendra Sharma moment of my's what I see:

I see may be judge in Red Sox hat. Moon is facing him from window of treasury building. Judge frowning, not liking moon of O'Neill in face. Reading decree which make unhappy times for dollar peoples but gold holders smiling.

I don't hold single shares of Gold or any position in Gold market.

GraefinSiochain Re: GoldenPeace#7151403/12/02; 22:33:55

I wish I were clever enough to understand all the ins and outs of astrology, however I do believe it has its merit. I am very interested in reading what he has to say, but his readings must be tempered with insight and understanding. Interpreting future events through astrology are a set of probabilities and can be altered depending on advice heeded or ignored (I believe in this instance with the public as a whole). Accuracy is important and NO astrologer can declare 100% accuracy. I plan to read his predictions and tuck that information back into the proverbial "brain file" and see what happens. …In other words… please DON’T run through your neighborhood naked screaming, "I can heal, I can heal!"

Graefin78358: nesara#7151503/12/02; 22:49:55

Check the link above. Because no one else answered your question, I will. Actually...I did a search and found it. I guess that goes to prove that I am no smarter than you!
Black BladeAsian Markets Sink Lower#7151603/12/02; 23:09:47

Both the Nikkei and the Hang Seng have gone negative. Meanwhile NY Crude is higher by 45 cents to $24.65/bbl and NG is holding at $3.03/Mbtu. Gold, Silver, and the PGMs are holding up as well.

- Black Blade

GrubstakerNomad, welcome to the party.#715173/13/02; 00:25:17 msg#: 71505)
It may be something most 'brain-washed' westerners would have a hard time believing, but I think on several levels (not all, of course) life here is MUCH better, more healthy, richer, etc. than it is in the west, and certainly much more (quite ironic, isn't it :) considering the recent state of affairs in the USA.

The collapse of the USA's Social Security system will simply be the 'canary in the coal mine' in my opinion. The ONLY way to escape from this trap of massive spending on 'entitlements' would be to open the doors of western countries to a massive inflow of immigration, cheap workers willing to support the tax base of an older, richer, elite.

****I see you have "assimilated" well in your new enviornment becoming virtually indistinguishable from your "breathren"...a model candidate as they say.***

Pippin78358 - your question on Nesara#715183/13/02; 01:55:51

I also ran a few searches on the web, and I got a few additional links.


SpartacusFed#715193/13/02; 02:17:48

The discrepancy between what the Fed is telling us and what markets and data are suggesting remains a major issue. By Scott Brown from Raymond James & Associates

---A major issue that needs to be resolved in the next few weeks is the discrepancy between what the Fed is telling us (no near-term rate hikes) and what the data and markets are suggesting (that the Fed will need to be more aggressive in raising rates, particularly in the second half of the year). Fed officials would like to keep long-term interest rates from rising. Dallas Federal Reserve Bank President McTeer (votes on the FOMC this year) said that despite the expectation of a strong GDP growth figure for 1Q02, he saw no near-term upward pressures on inflation that would necessitate a Fed rate hike. The 2-year Treasury note has priced in aggressive tightening later this year.---

TownCrierNew visitors: Make the most of your internet access here!#7152003/13/02; 04:18:33

Request a gold information packet, and also receive your personal access codes to the regularly updated online newsletter, NEWS & VIEWS -- a client service page of Centennial Precious Metals that is also available to prospective your request!

How easy is that??! Request yours today!

SpartacusOil#7152103/13/02; 04:31:28

Iraq – oil and its currency impact.
By Hans Guenther Redeker from BNP Paribas

--The US has suggested that Iraq owns weapons of mass destruction, but Iraq has prevented UN weapon inspectors travelling in the country. Consequently, tensions in the Middle East are growing. Oil prices have already started to move higher also supported by higher demand coming from an improvement in the global economic outlook. However, the global economy is still fragile and a major rise in energy costs has not only the potential to dampen economic sentiment, but also increases the risk of a double dip global recession.--

LeighCould This Be True?#7152203/13/02; 04:55:06

This morning on Kitco neer-do-well posted this message:

"The Pakastan cops are transporting the shiek guy who was implicated in the abduction of Pearl out of the jail to a van and he holers out from underneath the towel over his head, 'Sell your dollars, America is finished.'

"Strange thing to say."

Has anyone else heard or read of this?

RockLeigh its true!#7152303/13/02; 05:33:14

i also heard that comment from the patistine prisoner yesterday on the news. i found it pretty bazaar to hear it worded like that. it made me think if he knows something that we dont know.
The Invisible HandPreview of the outcome of the GATA revelations#7152403/13/02; 05:38:04

Indonesia's central bank governor Sjahril Sabirin has been found guilty of corruption and jailed for three years.
He was found guilty for his part in a 1999 scandal at Bank Bali that led to the International Monetary Fund and World Bank to temporarily suspend loans to Indonesia.
The charges relate to a multi-million dollar fee Bank Bali paid to a firm with links to the then governing Golkar party.
Most lawyers and financial analysts had expected Sabirin to be acquitted.
He is the first person to be convicted in what has been a long-running case.
"Defendant Sjahril Sabirin is legally proven guilty of corruption crimes," presiding judge Subardi said in delivering the verdict at the Central Jakarta District Court.
The judge said the governor's role in the scandal had cost the state $90m.
Prosecutors had demanded a four-year jail sentence for Sabiran. He is to appeal against the conviction.
Sabiran was declared a suspect in the scandal in June 2000 and was last year detained for two months for questioning.
He has never stepped down from his position.
"I'm very disappointed with the verdict," he told reporters. "I could have resigned long ago. My principle is never resign."

UsulRecovery signs don't equal cheap shares#7152503/13/02; 06:35:29

And the oil price is responding to shrinking US fuel stocks and Iraq attack worries.
CanuckTelecom industry in trouble#7152603/13/02; 07:14:53

nickel62Thank you Golden Bear,#7152703/13/02; 07:18:24

I think you hit it on the head. It is interesting that apparently a thinker like Rubin was able to take this correlation and see that if he could move the price of gold down then he could move the real rate of interest down as well. Thus the beginning of the Strong Dollar Policy to attract the flows of capital from our trading partners back to our Treasury market to buy down the interest rates. It became a self fullfilling policy in a way. Force gold price lower through the means well known here and then force the price of interest down in US Treasuries which in turn attracted more international flows of money as portfolio managers outside the US were playing their normal game of follow the leader to those currencies and markets that offerred the best rate of currency appreciation and capital gains potential as interest rates declined and the value of the bond market increase. Thanks for your help.
CanuckRoach at his best#7152803/13/02; 07:20:56

SiochainRoger Bentley Arnold's Daily Observation#7152903/13/02; 07:24:09

Long...but I think you may find interesting :
"I have included an article below from concerning corporate liquidity. Although we discussed this topic on Sunday it deserves repeating. The bottom line is that insiders, also called smart money, are selling. They are selling personal stock and they are raising cash by selling stock for the company. Additionally, they are not borrowing money. Commercial and Industrial loan origination is falling along with bond issues; even though money is cheap. Neither of these is a good sign for near term economic activity in the US.

This activity is diametrically opposed to the financial strategies used by corporations at the beginning of an economic rebound. Executives do not sell what is perceived to be stock at depressed levels for themselves or their company if they believe the value of the equity will be much higher in the future. Additionally, if the they are planning on expanding from the bottom of an economic cycle, when interest rates are low and capital cheap, as it is today, they borrow money.

I know the investment bankers are telling us that the economy has rebounded. I know Mr. Greenspan and members of the financial media have said the same. The financial markets are pricing for an economic rebound with the 10 year treasury now yielding an absurd level of 5.30%. I believe it will be closer to 4% before the end of this year.

Now, although the bond market is a better predictor of future economic activity than the stock market, corporate insider activity trumps the bond market.

What the financial markets are predicting and what corporations and insiders are doing are 180 degrees removed from one another and can not be put in sync. There is no possible spin on this divergence that can make it logical. Either the markets are right or the executives are right.

So, let's look at that. The analysts are looking at the markets as self validating. Meaning that the higher they go the more likely it is that consumer spending will pick up and force corporations to borrow and expand. The executives from many companies however are telling us and have told us for months now that they do not see positive signs warranting their expansion and that the signs they do see indicate a deeper economic contraction rather than a rebound.

When asked about this dichotomy of sentiment last week by a member of the Senate banking committee Mr. Greenspan's response was something along the lines of the idea that Mr. Gates at Microsoft and Mr. Imelt at GE may be too close to their individual companies to make a rational decision about the economy. It was something like that anyway. What does that mean? Has Mr. Greenspan lost his mind? That's like saying I'm too close to my own financial position to determine whether or not I should buy a new car or a new house, etc.

This scenario reminds me of the Seinfeld episode wherein George was trying to break up with his girl friend and she wouldn't let him. He said point blank we are not going to see each other anymore and she responded with yes we are. And this went back and forth and it was very funny.

Right now we have the CEO's of several of the most prominent public companies in the US not only telling us they are not going to expand at the rate the market seems to be anticipating; but selling stock, validating that they mean what they say. But, even as they saying and doing this which should cause stocks and bond yields to fall, the markets and the FED are telling them yes you will expand at the rate we are expecting.

How rational do you think this is? Our analysts are reading tea leaves when all they have to do is listen to the companies. When Mr. Gates and Mr. Imelt and Mr. Buffet, etc. come out and tell me they are worried about future growth prospects I listen to them.

Japan - flow of funds report below the comments

Japan aggressively liquidated foreign stocks and bonds January and February of this year. This has been the case for the past several years. As March 31 is the end of the fiscal year many Japanese banks and other investors sell foreign assets and repatriate the money to Japanese investments in order to bolster balance sheets. Following March 31 the process reverses, as it surely will this year as well, driving the Yen and Japanese stocks lower.

The trend toward US investors buying during this time period and then liquidating just prior to the end of March has been a pattern learned by traders over just the past couple of years. It is similar to trying to play the December / January effect in the US.

You can also see in the numbers below that foreign purchases of Japanese stock were up in January but by the end of February many of these investors had already started taking their trading profits off the table.

The figures below, as released, do not include brokerage firm holdings. Why do you think that is? If you are a US based institution with substantial holdings in Japan, which you want to sell, you first need buyers. A good strategy might be to wait for a technical bounce similar to this one and then put a "buy" signal on Japan. You may be able to convince buyers into the market that you can unload positions too.

What do you think the possibility is that the people on the other side of these trades are retail clients at US based brokerage firms? And, that that is why the numbers here do not include brokerage firm holdings? What do you suppose the flow of funds will look like by the end of March, April and May? Do you think the funds will show net inflows to Japan or outflows from Japan? Every year for the past several years they have flown out immediately following the end of the fiscal year on March 31. If the pattern continues this year, and it will, who are the buyers going to be for the sellers outflowing money?

We'll see where Japan is trading in April. The Nikkei closed at 11,415 today, down 4.2% in the last 2 days. The YEN is at 129.34, down about the same percentage in the past 2 days. This will be our reference point as we discuss this issue in April and May. These are also close to the levels the existed when a retail buy rating was placed on Japan by some of the US based brokerage firms.

Japanese February Net Flow of Funds in Billions of Yen


Feb Jan

Foreign stocks: -36.5 -286.0

Foreign bonds: -637.1 -3,071.2


Feb Jan

Japanese stocks: -124.2 +234.2

Japanese bonds: -1,042.0 -1,236.8


Foreign stocks Foreign bonds

Life insurers -177.4 -442.0

Banks -4.0 +549.0

Trust banks +130.0 -283.3

Investment Trusts +19.4 -250.9

Breakdown does not include investment by brokerage firms. Figures are based on contracts and are rounded.

Articles Roger Likes

Insider selling up - Insider buying down


Corporate liquidity returned to extremely bearish last week after verging on bullish for the prior fortnight. The new offering calendar took off, as $8.8 billion of newly printed shares were sold over the five days ended Thursday, led by a $3.5+ billion GM convertible offerings. Indeed, add in the $3.5 billion sold Thurs., Feb. 21 and the six day new offering total was $12.2 billion. That the most over any two weeks since mid-December.

On the other side of the ledger, new cash takeovers virtually disappeared last week, at $169 million, after $925 million, including four $100+ million cash takeovers, were announced the prior week. Similarly, newly announced stock buybacks over the past five days, at $2.5 billion, were the least over the past four weeks. Up until last week, it looked possible that corporate investors might be turning bullish.

Unless last week's corporate buyers strike was just a pause, and cash takeovers and buybacks resume this week, it does appear that corporate investors are resuming adding heavily to the trading float of shares.

The trading float of shares grew by an estimated $17 billion during January - the biggest one month jump since June 2001. The only reason February's estimated float growth dropped to just $5 billion was due a jump in newly announced buy backs to $19 billion. Since only a small % of new buybacks actually get bought the first month after being announced, the actual float growth might be larger.

Notice that the float shrink sectors - cash takeovers and buybacks - the first two months of this year were a mere fraction of the amount done the first two months of last year. In fact, the $1.3 billion of new cash takeovers was the smallest two month total since we have been tracking.

On the other hand, there have been $35 billion of new offerings so far this year, virtually the same amount that sold during the first two months of last year. The major difference last January-February was that there were lots of float shrink activity as well.

We have been working with Thomson Financial to get a handle on insider selling of 144 shares. We now believe that the revised $4.2 billion from last December probably includes data from prior months. Similarly, we expect that the January insider selling number will be revised upwards next month.

LeighRock, Invisible Hand#7153003/13/02; 07:41:48

ANOTHER and FOA have been telling us in lengthy, eloquent posts for years to sell our dollars because America's finished, and hardly anyone (outside this forum) has heeded them. I wonder if anyone is going to listen to some lowlife prisoner yelling on TV now.

"I could have resigned long ago. My principle is never resign." Sounds like Greenspan to me!

SiochainRock/Leigh#7153103/13/02; 07:47:27

I heard the same thing...and was bothered by became a one run story apparently since I didn't hear it later in the evening...which bothered me even more

Yes it is strange....I also remember a strange poster on Raging Bull with Arabic name making predictions on how the stock market was going to crash & when..his last was on 9/10 ...and included a drawing of two tall dotted lines down the page and one short going across into the tall lines....after 9/11 a number of us reported it to FBI ,,,and believe me they were quite interested since you may recall there were some large shorts on the market right before 9/11

Whether there is validity to the new story or just scare tactics....we shall know in the time to come...but bin Laden wants the US economy destroyed

USAGOLD Market CommentaryOil, MidEast Tensions Fuel Physical Demand; "American and German Bank" Paper Selling Keep Price in Check#7153203/13/02; 08:13:32

Available online to all clientele and prospective clientele, NEWS & VIEWS Forecasts, Commentary & Analysis on the Economy and Precious Metals has again been updated.

Read the full commentary and related information here. (access codes required)

New visitors may review these selected portions provided at the Daily Market Report page. You may enjoy our 24-Hour NewsWire provided at this page, also.

If you would like to take full advantage of these insights and perspectives, made available from a leader with three decades of experience in the precious metals markets, then we invite you to request your personal access codes for the online News & Views. With your request, you will also receive a hard-copy introductory information packet on gold ownership which details the products and services offered by USAGOLD / Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Nomad@ Grubstaker / Slingshot#7153303/13/02; 08:19:51

... 'brain-washed westerners' ... I think you just proved my point, G.S. :)

In any case, I would be the last person to say that China does not have it's share of problems, just as every country in the world does. My point was simply that what the mainstream media is reporting about life in this country is far from the truth ... or as the chinese like to say, 'fei hua go pi' (bullsh*t) ... much like mainstream media reporting on gold for example.

As an example, I just asked my chinese friends if they are afraid of the government and their answer was that the government was not very honest and sometimes corrupt and very inefficient, but none of them were 'afraid' of the government ... in other words, pretty much the same opinion as regular 'joes' anywhere ... and none of them afraid to say so, out loud, in public.

In fact my experience has been that life here is capitalism on steroids ... my biggest problem is trying to convince ANY of my students that maybe being a successful businessperson isn't really going to solve EVERY single problem in their lives :)

and one last little piece of food for thought ... sometime in the next year or so, the government is going to legalize the sale and ownership of gold ... and right now most savings here are in the form of US dollars. With the asian crisis still fresh in most people's minds, a good portion of (1,300,000,000) people's savings should flow directly into gold. AND, the chinese government has been one of the few governments around the world ADDING steadily to an increasing stockpile of gold as a form of foreign currency reserves.

Chairman Mao is long dead, and anyone thinking China is still 'red' to the core is making a huge mistake in assessing world affairs.

just my opinion ...

p.s. thanks slingshot for your kind words.

nickel62Nomad#7153403/13/02; 08:26:44

I am sure that I speak for many of the western domiciled posters here when I tell you how valuable your observations are to us here in the North American geography mindset. We tend to not be able to understand how the people in asia are actually feeling. Thanks for the comments.
Siochain@Nomad#7153503/13/02; 08:48:59

Your views re China are appreciated. I've visited China many times and found the people as you say especially regarding openness, friendliness and their commentary regarding government

The only thing I would add is that my first visit was just a few months before Tinnamen Square and I was privileged to meet several students from Beijing University...they too were open in their condemnation of the government and yet no fear.....and look what happened

I've always found a major difference between the people (especially the college students) of China and the government's policies and positions

I do think China is an awakening dragon...I only hope that its leadership can change to match the views of the people otherwise we may be at daggerheads someday

Though to be fair...I wish the US government better reflected the principles on which this great nation was founded

JonLeigh's msg. #71522; reported in NYTimes this A.M. EOM#7153603/13/02; 10:04:27

Black BladeStudy Suggests Plenty More Bankruptcies Await#7153703/13/02; 10:43:02


The bankruptcy of Enron late in 2001 put corporate restructurings high on the investing public's radar, and already this year, several high-profile companies have sought protection from their creditors.

Expect that to continue, if a recent report is right. A study prepared by PriceWaterhouseCoopers predicts that 200 public companies will file for bankruptcy in 2002, down 22% from the 257 filings in 2001 but well above the average of 113 filings a year from 1986 to 2000.

The increase in corporate debt and the surge in speculative-grade issues in the late 1990s leaves many companies still at risk, the report contended. "It makes over-leveraged companies that have not yet declared bankruptcy vulnerable in the modest economic rebound expected in 2002," wrote Carter Pate of PriceWaterhouseCoopers in the report.

Black Blade: This report is way overoptimistic in my opinion. This crushing corporate debt will sink many companies as actual - net earnings are not forthcoming. I see that the US market indices are lower. I would expect a late day rally as the investment houses pump cash into the markets - the usual last hour pump and prime.

Gandalf the WhiteHobbits are suggesting that you hold on to your HAT !#7153803/13/02; 10:52:54

The Technical Analysis (TA) Department of the Hobbits Research Institute is seeing what they call an "UP FLAG" forming today and is calling for Goldfly to release SPIKE !

Tommy Pyahoo message boards#7153903/13/02; 11:03:14

Looks like Big Brother is watching, have posted several
articles on the JPM message board on Yahoo, they were erased,
as well, I visited yahoo again on the JPM message board, BUT NOW, there's no more message board!!! on any stock for that matter!!!! Can anyone help, does anyone know?
If I may quote....."Interesting Times"

PippinTommy - your post about Yahoo msg board #7154003/13/02; 11:08:59

Seems that the issue was temporary. No problem on my side.
PippinCPM Client Memorandum : "how you can survive a potential gold confiscation"#7154103/13/02; 11:43:00

I am reading this document as part of my education on gold, and I just want to share with all other newbies that it's not a waste of time.
As an example: page 17. Just imagine how we would feel, were we to read the following order tomorrow (ref "Executive Order #6102, 1933):

I as President, do declare that the national emergency still exist; that the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to peace, equal justice, and well-being of the United States, ...

Your possession of these proscribed metals and/or your maintenance of a safe deposit box to store them is known to the government from bank and insurance records. Therefore, be advised that your vault box must remain sealed ...

If it was done in the USA, it can be done anywhere on Earth. Europe included. Whaw.

I'll continue reading.

CanuckQuestion#7154203/13/02; 11:53:47

What happens if you are a gold producer that is unhedged, won't hedge, don't like spot prices and therefore don't want to sell at all.

If you can afford to hoard can you? I believe I heard a couple months ago that Goldcorp was going to hold onto some production for the future. Is any of this happening?

RockLeigh / the falling dollar#7154303/13/02; 11:56:42

you mentioned how Another and FOA warned about the dollar falling and that was "before" all this terrorism started. So if the dollar was on its way out before all these world events began happening think of how much closer we must be now.
CanuckQuestion#7154403/13/02; 12:09:55

Thinking back to Sept. 99 when the WA was announced. Spot ran in the order of 75 bucks. The WA represents a limit of 400 tonnes/yr, yes. What was the pre-WA selling number, ie: what was the amount selling prior to the 400 tonne limit?

I don't understand this big gold secret thing that the CB's have. The ECB does not seem to have a problem with this. They mark-to-market every quarter if I'm not mistaken; they have X dollars, Y yen, Z francs, and G gold. No secrets, no funny stuff, no hanky panky. If CB A and CB B and .....CB Z reported gold (as I assume fiat reserves, do they, must they?) then we would know CB held gold. We would see movement up, movement down, etc. Why do CB's report gold and some do not, why all this secret crap? Do all CB's report dollar held reserves, if not, why not, how do they support their fiat. Is so why do they not report gold held?

CanuckFurther#7154503/13/02; 12:11:59

In 1999 we reckoned that CB held gold amounted to some 33,000 tonnes, yes. How is this number derived? What is the number now? How accurate is the number?
VoyagerCanuck#7154603/13/02; 12:50:22

From Bill Murphy's Midas Report

According to World Gold Council, the twenty greatest official gold holding countries up to March 2002 are as follows:

Countries -- Tonnes -- Gold's % share of reserves*
1. United States - 8149.0 -- 56.7%
2.Germany -- 3456.6 -- 37.6%
3.IMF - 3217.3 – n/a
4.France -- 3024.8 -- 47.1%
5.Italy -- 2451.8 -- 47.8%
6.Switzerland -- 2149.7 -- 38.2%
7.Netherlands – 884.5 -- 46.6%
8.ECB (European Central Bank) -- 767.0 – n/a
9.Japan -- 765.2 -- 1.7%
10.Portugal -- 606.8 -- 37.6%
11.Spain -- 523.4 -- 13.2%
12.China -- 500.0 -- 2.1%
13.Russia -- 424.2 -- 10.6%
14.Taiwan -- 421.8 -- 3.0%
15.India -- 357.8 -- 7.2%
16.Venezuela -- 356.4 -- 26.2%
17.Austria -- 347.5 -- 20.2%
18.United Kingdom -- 314.8 – 7.5% ----(**)
19.Lebanon -- 286.8 -- 36.7%
20.Belgium -- 258.1 -- 17.9%

All countries holding - 29274 tonnes - 11.3%
Institutions holding - 4185.4 tonnes - n/a
World - 32692.3 tonnes - n/a
*The percentage share of total reserves held in gold of total foreign reserves, as calculated by the World Gold Council. The value of gold holdings is calculated using the end-November gold price of $282.30 per troy ounce.
**Includes the auction of 20 tonnes held by the Bank of England on Tuesday 5th March.
(1 metric tonnes = 32,151 troy ounces).


Now subtract approximately 15,000 tonnes of that central bank gold, which has been lent out, or swapped out. On top of that, the natural gold supply/demand deficit is running about 1700 tonnes per year. Then, throw the potential of massive gold purchases by the Japanese public. The big SQUEEZE is on the way!

Black BladeHoof and Mouth Disease in Kansas Likely!!!#7154703/13/02; 12:50:29

Just coming over the wires is a report that there may be 18 cases of Hoof and Mouth disease. If this is true, then the cattle industry could be under severe pressure as millions of cattle may have to be destroyed putting many ranchers out of business as had recently happened in the UK. Results of testing are expected later tonight. This will also affect the grain markets (particularly corn). As for myself, I consume mostly wild game. However, this is just one more nail in the coffin that could put more pressure on the already fragile US economy.

- Black Blade

Black BladeUSDA - Not Hoof and Mouth#7154803/13/02; 13:04:23

Just out as quickly as the story of a possible Hoof and Mouth outbreak comes word that results are already back. The results indicate that the lesions are not Hoof and Mouth. Dodged another bullet.

- Black Blade

USAGOLD / Centennial Precious Metals, Inc.A timely repost: This was provided two weeks ago at USAGOLD's News&Views and Daily Market Report#7154903/13/02; 13:13:06

Myths & Realities

Myth: Central banks are massive sellers of gold and that's why the price has been held in check.

Reality: In 1950 central bank gold holdings were 33,000 tonnes. By 2000, the central banks housed 30,000 tonnes. Through all the announcements, the threat of sales and actual sales -- the London Gold Pool of the 1960s, the U.S. Treasury and International Monetary Fund sales of the 1970s, the European central bank selling of the 1980s, and the Australian, Argentinean, Belgian, Dutch, British and Swiss sales of the 1990s and 2000s -- less than 10% of the gold sold actually left the central bank network. From this one might conclude that official sector liquidations have been off-set for the most part by official sector acquisitions. Central bank gold selling has been a sound and fury signifying nothing.

Chart Courtesy of the World Gold Council / London

darkhorse@Voyager/Canuck#7155003/13/02; 13:17:31

Don't forget China and their 1B+ population ready to dive into the legal gold ownership pool. Even if you can't do math real well, that means a whole lot of oz's will be removed from the vault.

Mr. it possible you'll be selling (much more!) gold to a much larger Oriental clientele by the end of the year?

VoyagerWorld Gold Holdings#7155103/13/02; 13:24:20

1950 33,000
2002 32,692

Net change (308)

TrapperDollar & China#7155203/13/02; 13:26:06

I to belive that the dollar will drop and drop hard, but Another, FOA, Belgium etc. and the Arab terrorist miss one thing. The dollar will still be here. The American people have more life left in them that all of you give them credit for. You might burn us down but we will rise from our ashes. If they waited 10 more years and watered down our population with more non caring immigrants they might destroyed us but they pulled the trigger too soon.
I have not been to mainland china but I have some friends who are in jail there for bringing bibles into the country...a nice place I'm sure. You are right about mans desire for capitalism, man is born with the desire to be free. Live small.

VoyagerWhere's The Rest#7155303/13/02; 13:32:32

If there has been 124,000 approx. tonnes ever mined, then where is the rest of the 91,000? In jewelry and coins?
RockPippin / How you can survive gold confiscation#7155403/13/02; 13:54:11

The gold confiscation act is still on the books as you know which is all the more important to do research before just jumping into buy gold. The only gold that was exempt from confiscation as most of us know was that which was considered "rare or religious." Also any gold coins pre 1933 would fall under that same catagory.

although i do own some american bullion because of its low premium rate and to add some diversfication and i like the fact that it is recongiziable by all US citizens and world wide but it could get confisicated if the gov't pulled that same stunt again as FDR did back during the depresssion. i also have added some european crowns to my portfolio some of which i have seened advertized from time to time right here on USA Gold. i like the euro gold because its protected under the pre-1933 law.

at least "if" and thats a big "if" the gov't was to reinact that law and confiscate gold again at least you would have a good argument if they were to take you to court.

Black BladeNatural Gas Use Projected to Climb 50 Percent Over Next 20 Years#7155503/13/02; 14:02:21

Natural Gas Use Projected to Climb 50 Percent Over Next 20 Years-More Than 70 Percent of New Single-family Homeowners Are Choosing Natural Gas


ATLANTA, Mar 13, 2002 (BUSINESS WIRE) -- Natural gas usage has grown by 35 percent over the last ten years and is projected to jump by 50 percent in the next 20 years according to the U.S. Energy Information Administration. Much of this growth is attributed to natural gas' energy efficiency and value, enhancement of home resale value and environmental cleanliness.

Energy efficiency

Gas heating systems have a longer shelf life than electric systems and provide precise temperature control with programmable thermostats. In addition, gas water heaters can deliver up to twice as much hot water as electric models in the same amount of time. Gas stoves offer the fastest, most precise cooking - even if the electricity goes out - and are preferred by most top chefs.

Environmentally friendly energy source

Natural gas is the cleanest fossil fuel, another advantage for many environmentally conscious consumers. Its simple chemical make-up compared to the more complex structure of oil and coal makes natural gas cleaner burning. According to the American Gas Association, using more natural gas could actually help reduce the amount of carbon dioxide in the air by about 10 percent of total emissions.

According to the Natural Resources Defense Council (NRDC), "Of the three fossil fuels that dominate the U.S. energy market, natural gas is by far the cleanest burning fuel. It is, therefore, a key part of NRDC's energy policy -- the bridge to greater reliance on cleaner and renewable forms of energy."

Black Blade: The problem of course is that exploration and production is coming to a standstill and depletetion rates are accelerating even as demand is set to rise this fall and winter when drilling activity is traditionally slow. Rising energy costs will keep any economic recovery in check.

LeighRock#7155603/13/02; 14:03:05

You know, Rock, you're right, and I'm glad you mentioned that. I've been uneasy all day thinking that someone was going to connect ANOTHER and FOA with the Pearl suspect since they have all predicted the downfall of the dollar. I think A/FOA were making this prediction based on their "dollar timeline" ending in unsustainable debt and low productivity. Add the Euro and their insiders' knowledge of central bank operations, countries buying up gold, etc., and they were easily able to make such a forecast.

I don't know what that Palestinian/Pakistanian guy (whatever) was basing his prediction on. Isn't it interesting that his muffled words from underneath a towel were blazoned all over the news, and A/FOA's predictions are hidden - like precious jewels - here in the archives of USAGOLD?

TownCrierLearn more about historical and potential confiscation and privacy issues here...#7155703/13/02; 14:18:18

Clear commentary and access to comprehensive info on legal precedent.
Black BladeTapping of methane hydrate gas raises energy hopes#7155803/13/02; 14:21:48


An intergovernmental research team has succeeded in tapping methane hydrate in an economically viable gas form for the first time, the Ministry of Economy, Trade and Industry said.

Experts call methane hydrate a promising energy source, though it has never been tapped in gas form before. The frosted solid substance, which has a composition similar to natural gas, could prove to be a major source of energy for Japan due to its abundance under the surrounding seabed. Methane hydrate, frosted at low temperatures under high pressure, is found under the seabed, 1,000 meters to 2,000 meters below the sea near the continental shelves, as well as under permanently frozen ground in Siberia, Alaska and other arctic areas.

Until now, the substance could be extracted only in costly solid form before being turned into gas, making underground gasification necessary for economic viability. The team dug three 1,200-meter wells, and then poured water heated to a temperature of about 90 into a methane hydrate layer about 900 meters underground. It then warmed the slush to about 40 and extracted methane gas through a pipeline, they said.

Black Blade: A lot of "Interesting" news out of Japan these days. Still, this is not likely to be a major contributor of "Cheap Energy" as most occurrences are at tremendous depths and the political realities are overwhelming.

PippinRock - Gold confiscation#7155903/13/02; 15:03:23

<<i like the euro gold >>

In fact, I know that there are Swiss CHF 20.-- gold coins minted AFTER 1933. To be accurate, I have some "Helvetia Switzerland 20 francs gold coins" dated 1949, looking exactly like the ones displayed on USAGOLD site; so the fact that coins come from Europe is no decisive criteria: the date has to be checked in all cases.
One reason more to choose our counterpart carefuly I guess.

Belgian@ Canuck and Central Bank's secrecy !?#7156003/13/02; 15:09:57

Some things are allowed / engineered, to be publicly exposed...other moves must evolve under (misleading) cover...a lot has to remain Top Secret ! Can't help it and can't change it. Sir, we are dealing here with matters of utmost importance and degree of confidence in confetti, all over the globe ! Goldsales / buys or currency-moves...devaluations and many other "operations", are only to be known by an elite (absolute) minority ! The *powers* and their closiest friends. Ordinary citizens are in a constant mode of self-defense against the un-expected.
Forget about that so called "transparancy". Reality / truth and fiction are a constant amalgame. We must keep trying to come as close to reality as possible, with the only weapon of intelligent deduction and analysis. Always ask yourself what "they" *want* us to perceive or believe or conclude.
So many tricks do exist and are applicated every second to mislead different layers of actors and reactors. Lies are as old as Adam and Eve. Point is of not getting frustrated with all these side-walks and follow the trail...your/our trail. It is the bundling of our efforts and criticism, here at CPM that leads us as close as possible to the true trail.

Any central bank is an institution of *trust*. Trust in "paper". Trust in an appropiate policy. Halve lies and halve truths will always sow futile confusion and unjustified trust. All history is biased and will always be.
It is only the very Big Picture and facts for everyone to see, that can lead to individual conclusion and consequently belief or dis-belief. Do we/you/I, believe in the nearby future *enormous-historical*, revaluation of Gold ? Yes, I firmly do !
Regards and good night from Euroland.

slingshotSomething to think about.#7156103/13/02; 15:15:40

China Legalization of Gold Sale and Ownership.

1,300,000,000 Chinese savings being turned into Physical Gold.Turning in U.S Dollars for Gold. Would the Chinese Government in an attempt to secure for its people,cheap gold ,legalize ownership sooner than next year. Although Japan is now in the limelight could China be waiting in the wings. Is China accumulating cheap gold now to be able to buy OIL to support an expanding industrial economy? The only drawback that I see is that China wants to be intact and avoid a major influx of westernization. Capitalism comes with its pitfalls. So I believe China will move into this experiment slowly.

IF Japan on or about April 1,2002, with their senior citizens uninsured banks accounts, goes into hyperdrive to buy gold, encourage China to legalize sooner?

What percent of Chinese savings are U.S.Dollars?

At What price will the Chinese still want to buy Gold?
$400/$500/$600 knowing the possibility of gold going 4 digits.

Oh Boy!


TownCrierA brief word to Belgian#7156203/13/02; 15:32:41

Limited feedback or not, I simply wanted to assure you that I, PERSONALLY, appreciate your continuing conribution to these important discussions.


miner49erBelgian @ TownCrier 71562#7156303/13/02; 15:56:34

Just checked in, and saw Randy's comments to you. Thought I'd take the opportunity to ditto them, good Sir. I also am greatly appreciative of your perspective and the analysis you bring. Thank you for your contributions...


balzacCONFISCATION TALK = FEAR MONGERING#7156403/13/02; 16:00:07

Why are you gentlemen so cofoundedly worried about confication? Your constant references are causing potential
buyers to fear holding gold. Do us all a favor and drop this topic, it's very counterproductive!


Golden Bearnickel62 (msg#: 71527)#7156503/13/02; 17:06:41


I followed the link to canuck's message (03/13/02; 07:20:56MT - msg#: 71528), and following Stephen Roach's piece, there is one by Richard Berner that begins with: "The bear market in bonds has begun, in our view".

This extends our discussion on Gibson's paradox further to include the following questions:

1: JPM's huge derivatives shorts on interest rates - are they to profit from the bull market in bonds, or are they another tool used to help drive interest rates lower and hold them there?

2: How rapidly are they able to unwind these positions if the bond bear market begins in ernest?

3: How does Gibsons' paradox play out in a rising rate environment?

Contrary to popular belief, bond yields rise due to increased perceived risk of inflation by bondholders, so they ask for higher yields to offset that risk...not because of "the economy is recovering!" as we here from CNBC bubbleheads. So as rates are going higher due to perceived inflation risk, does the real rate of return necessarily follow? For gold to move higher, Gibson's paradox must imply that interest rates are moving higher solely due to the inflation component, and the real rate of return is stagnant, or possibly moving lower...

Hmmm, now my head is starting to ache...

By the way, I used the Fed Funds Rate in my earlier piece for the real rate of return calculation as the defacto...Austrian economists do not use this I believe, but it was a good proxy for the example.


Siochain@Trapper#7156603/13/02; 17:39:31

I commend you on your message re America. I too believe that we will find a way out though it will be hard.

In the mid 70's and thru much of the 80's, American Companies were being devastated by Japanese competition..part related to trade laws but primarily the revolution in quality and resulting huge improvement in productivity,

I was very privileged to be associated with Dr. W. Edwards Deming who took the message of Quality to Japan...and they listened when the USA was complacent (though Japan failed to follow his advice on financials and what he termed the the "Western diseases")

Anyway...first we started to lose our auto business then other business fell to the Japanese. Japan thought they were going to dominate the world.

Finally we woke up and went to work....listened and studied Dr. Deming's principles and put them into practice. The efforts in quality and productivity improvements and ingenuity in development fired off a whole new economy. It was built by people who were empowered to find ways to improve.

Unfortunately at the same time our productivity/technological advances which put us back at the top of world economy was undermined market forces with a different agenda.

The unfortunate thing about Americans is that we don't really get to work until we are kicked to the ground...but once aroused...the spirit is still there

I see it in many Companies I have worked with...people at every level.

So yes, we will be probably kicked very hard because of the dollar explosion/implosion but I too trust that we will find a way to overcome ...just my take based on my experience working in Companies all over the world!

Black BladePuplava Market Wrap Up#7156703/13/02; 18:06:07

Better Reporting Demanded

There is another piece of the puzzle that seems to be emerging from the daily news snippets: companies are going to find it more difficult to goose their numbers to meet expectations. The heat is on after Enron for clearer and better reporting disclosure. Congress, the SEC, and the District Attorney offices are now looking more closely at what companies report to their shareholders. I predict that soon it will be the media coming under closer scrutiny. Up until now it has gotten a clear pass.

More disclosures and new investigations are still forthcoming that could be real investor confidence shakers. Today the SEC accused a vice president at GE of providing an illegal stock tip to a martial arts instructor. Congress is now expanding its investigation into the bankrupt Global Crossing, asking them to turn over their books as investigators look into questionable earnings practices, shoddy bookkeeping, and stock sales by company insiders with strong ties to the last administration. Global Crossing could become a scandal just as large as Enron. They are also the subject of an FBI probe. The SEC is looking into WorldCom as well. The company used its stock as currency to emerge from obscurity becoming the second largest long distance carrier. Now the SEC wants a major review of its books. Congress is stepping up its investigation into derivatives with the objective of tightening regulation of the derivatives market, which has remained largely unregulated. This could create potential major problems for J.P. Morgan Chase, the largest dealer in derivatives. The bank looks like LTCM on a combination of methamphetamine and steroids. The banking industry is furiously lobbying to prevent any interference with their practice of trading and issuing derivatives. For many banks like J.P. Morgan Chase, it has become their main business.

Black Blade: I agree, and it appears that the chickens are coming home to roost. Today more bad news for Arthur Andersen is that the DOJ does not want a plea bargain and they are set to file charges of fraud. It appears that some executives at AA will be going to prison. Yeah, it will be "Club Fed" and not a real prison, but still it looks like the end of AA. They are trying furiously to find a merger partner and now it appears that Deloitte and Touche only want the European operations. Arthur Andersen is finished.

Golden Bearnickel62 (msg#: 71527)#7156803/13/02; 18:45:56


my questions earlier (msg#: 71565) have been answered by this fantastic piece next door...

Corrections: real rate of return should have been real rate of interest in that piece, and your name, oops...sorry.


TrapperSir Balzac#7156903/13/02; 19:38:39

There is good reason to talk of confiscation many here have seen it done. The grand service of this type of msg. board is it inform one another. You should be aware of it too. Our host has built most of their business on " old coins" that might be able to weather a goverment confiscation. The premise being coins dated prior to 1933 might be considered rare and be legal to own and trade in after a goverment recall decree. My arguement is we need a pre emptive law for a right to own gold as it was only pre 1933 coins that were called in last time. Plan your day and work your plan. Live small.

TrapperSiochain#7157003/13/02; 19:55:51

Thank you. I did time in Viet Nam with the US Marine Corps as a squad leader, Platoon Sgt., and company sniper. I have all the faith in the world we will survive...or all die trying. I think of the productivity and ingenuity of the American people and marvel. We have a goverment that sucks over half of money from its people and still we are the engine of the world. What does A/FOA think would happen the the EURO if the US folds up? I'm not sure but I would bet gold that the people of the US hold most of the patens in the world, as dumb as I am I have four. Black Blade as hunter might even have used one of my fiber optic sights on one of his guns, but we are builders.
Siochain from reading your post I'm sure the blood in your veins is very red ( white and blue too). Live small my friend.

sectorJapanese "Insurance" Companies...Balls and Chain#7157103/13/02; 20:19:49

From FT.Com This Evening

asia pacific equities

Japanese life assurers on shaky foundations
Speculation over the future of Asahi could be extended to other companies in the troubled sector, writes Ken Hijino
Published: March 12 2002 18:54 | Last Updated: March 12 2002 19:15

An eerie calm covers the headquarters of Asahi Life which belies the storm of speculation about the future of Japan's fifth largest life assurer.

The small trickle of customers coming out of its offices seems to confirm these concerns. "From all I read in magazines and newspapers, it seems risky to keep a policy with Asahi," says Sakae Funo, a grandmother who took a trip from outer Tokyo to cancel a family member's life policy.

Asahi, with one of the lowest credit ratings in the industry, has long been seen as one of the weakest in a sector plagued by deflation, policy cancellations and poor investment returns.

It is one of three big Japanese life assurers to hold junk status. In February, it was downgraded by Moody's, the ratings agency, to Caa1. The other assurers are Sumitomo Life and Mitsui Life, both of which were downgraded by Moody's this week when the US agency revised down the status of eight assurers. They hold Baa1 and Ba3 respectively. The agency says their outlook remains negative.
They pay out through long term policies, around 5%...they receive about 1% Duh?
How long will it take for the next big roll-over? Not long. Will it take insolvent banks with it? Duh?
Will the frightened Japanese public take even more notice and take steps to protect their uninsured life savings?
Well...Let's just see.

JCTexBill Murphy enters China#7157203/13/02; 21:05:43

"...On that note it is my pleasure to announce one of the most significant developments since GATA's inception a little over 3 years ago.

Samex Mining of Vancouver, Canada, an outspoken supporter of GATA, has offered to sponsor the translation and hosting of the web site in Chinese. The site will look exactly the same except that the Chinese language will replace the English one. At least one article from each of the sections in the site will be translated from English into Chinese.

It will be up to Samex, but important future news, or articles, related to GATA will be translated into Chinese, as will be relevant MIDAS commentary from time to time.

Some of the material to be translated includes:

The supply/demand analysis of FrankVeneroso that was presented at the GATA African Gold Summit
Transcript of Congressmen Ron Paul's address given to the US Congress (Feb 14/02), where he announced his new bill
My presentation at The GATA African Gold Summit
The coverage given to GATA by C-SPAN
Emphasis will be place on the reasons for the Chinese investor to buy physical gold. That can be accomplished by making them aware:

*Of the 15,000 tonne plus short position of the western banks (loans and swaps)
*That the gold price has been artificially surpressed hundreds of dollar below its equilibrium price
*Why and how the gold price has been manipulated for 7 years.
*Of the extraordinary risk/reward ratio of buying physical gold right now – truly a once in a lifetime opportunity
*That the gold price fraud and manipulation is about to end

It gets better. In support of GATA, Samex will sponsor the hosting of the Chinese version of through an investment relations firm that is the largest Chinese financial portal in North America. It currently has a membership size of over 30,000 with a hit rate of 7.5 million and 2.1 million page views monthly on its own web site. It also covers the mainstream Chinese medias: newspapers, TV and radio..."

Canuck@ Goldenbear#7157303/13/02; 21:34:01

How are you Sir?

You are new to USAGOLD considering that I have been here since Nov. '98.

Welcome aboard!

You have an awesome handle, I expect mind-blowing participation. ;)

Are you from the 'old' days, ie: FOA, Aristotle and ORO?
If I see Aristotle in this lifetime I am going to kick his ass, I don't care if he is 90 years old. I went to the Megatron school of kicking old men's asses.

Ari is brilliant, I miss his secret, long term view. I feel subconsiously, responsible for his 'second coming'. I hope he can forgive me for his 'rough' return.


You said, "Contrary to popular belief, bond yields rise due to increased perceived risk of inflation by bondholders, so they ask for higher yields to offset that risk...not because of "the economy is recovering!" as we here from CNBC bubbleheads. So as rates are going higher due to perceived inflation risk, does the real rate of return necessarily follow? For gold to move higher, Gibson's paradox must imply that interest rates are moving higher solely due to the inflation component, and the real rate of return is stagnant, or possibly moving lower..."

The one thing, maybe the only one, that I have learned from this ASTUTE forum is that money will aways 'school' and 'chase' the investment with the highest ROI. This is probably Rule 1 of ECON 101 even before Rule 2, 'Supply and Demand' will dictate price.

Gibson's Parodox is not a paradox at all, it is Gibson's obvious statement of Rule 1; Econ 101. If I can invest in 'treasury securities' at 5% while while cussing an inflation index (whatever that may be?) of 3% I earn a 'real rate of return' of 2%.

'Real rate of Return', is the ROI that I realize after inflation, net ROI if you will, ROR = ROI-Inflation if you must. If inflation exceeds my investment return I an losing money simple being 'in the game'! Where do I plant my money to break even, a 'ROR' of ZERO!!!!

Better still, where do I plant my money on a 'real rate of return' that is undergoing a negative acceleration?

Would that be gold?


Solomon WeaverTrapper - yes we will survive....but all in one boat.#7157403/13/02; 21:44:24

Just picking up a little from below.....

Although Trapper notes the the Gummit sucks out half our money....a certain share of the money DOES actually go to good use for society...and as corrupt as some may think....the US does have one of the most open overall governmental processes...

Since I work in the high tech industry, I would note that many first filings for patents are US patents, but many of the scientists are expats from all over the world and much of the money supporting small research companies is global money that likes the freedom of our markets.

. . . .

Hey GATA going into chinese??? wow....

The whole world looks on and the Citizenry here is oblivious.

Somehow reminds me of card houses we used to build as kids in the early 70s from those computer punch cards that were used to "load memory". (My dad, a naval engineer used to bring home thousands of them, in retrospect I think he as a young 30ish fellow realized they made a cheap babysitter for a clan of lively preteens)....we would build massive card houses taking up more than half the living room and towering up 10 or more layers (often as tall as the smallest frye in the fambly)....usually we knew we were in trouble when the "edges" started caving in...and although repairs would be attempted, there was always the magic moment of the evening when suddenly and without warning the entire structure would collapse to a hectic pile of paper less than an inch tall. This moment was usually greeted with a mixture of ohhhs and ahhhs and laughs...and perhaps little congratulations on how well we had done before the end least it was a game.

Poor old Solomon

Canuck@ Voyageur#7157503/13/02; 22:13:18

Interesting that 'offical' gold holdings are slightly down to 'flat' considering all the 'sales'.

'Supply and demand' started this run and I am certain it will end this run. 'Paper' is derived from physical facts.

Physical supply/demand will trigger nervous trigger-happy dollar holders to print this into the history books. If this doesn't cement the cause then oil and demographics will.

Pick your poison 2002/2003 or 2006/2008.

Chris PowellGATA goes Chinese, thanks to Samex Mining#7157603/13/02; 22:16:21

GATA goes Chinese, thanks to Samex Mining:

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.

Golden Bearnickel62 (msg#: 71565)#7157703/13/02; 22:17:54


I really should be getting some sleep...

"1: JPM's huge derivatives shorts on interest rates" - should read longs.

Some other excellent articles on this topic are here:


Carl HRe: Tapping of methane hydrate gas raises energy hopes#7157803/14/02; 00:01:12

Black Blade:

I read some research papers about methane hydrates recently. If memory serves me, there have been more than 600 wells drilled offshore looking for it, and two of those wells yeilded small intersections with methane hydrates. Not a very good hit rate. Also, the stuff is a solid -- it can't flow horizontally like gas or oil.

My personal opinion is that it is another scare tactic to keep commodity prices down and it keeps some geology grad students off the street.

The list of funny stores the powers that be are putting out is getting more and more amusing -- Buba gold sales, the sunken treasure ship loaded with gold, etc.

Belgian@ Randy and Miner 49er#715793/14/02; 02:05:59

Fine to read your appreciation...but, believe it or not...I do own * A LOT * to the full USAGOLD team and poster-satelites !
So I'm still trying to pay off my enormous debt to you all, with the commodity of honest thought + sauce of loyalty to fine people. Thank you.

Great initiative from GATA to go Chinese. Russia / Middle East and Japan, might be next in line. *Not* to generate counterproductive -anti- dollar or US feelings / deeds, but
simply promotion of ** FREE GOLD ** as a near perfect answer for the negative (unjust) aspects of Globilization.
Yes Free Gold Trade has a lot in petto for developping a more "just" world !
100 million people are holding the totality of the globe's stocks and 50 % of these are in US hands. Extreme unbalance is unsafe for everyone. Give the powerless hard working folks an instrument (GOLD) to build on independance and dignity. Here I came to understand the full -power- of Gold in so many more aspects, of wich I wasn't aware before.

Gold's role is still regarded with scepticism because of the failure of the past Gold-Standard. The TG-alternative is a major re-adjustment of that imperfect standard thing.
Unfortunately, a currency-collapse will be needed to get the message accros. GATA going global with more solution oriented talk to the other (dollar) side, could spark more public interest into the fundamentals of Gold.
All Gold-Academics (growing bunch) should unite and build a frontline for FREE GOLD. I'm pointing my finger to WGC in the first place ! Democratize Gold and set it FREE ! Don't stick to your ancient, dying privileges ! A Gold Renaissance (rebirth) is in the cards. Save the currencies...prosperity and peace.

An analog attitude should be given birth to the economic and politico aspect of Crude Oil !!! Get rid of these old "power" cliche's and make a start for horizontal negociation with respect and *healthy* opportunistic mutual benefit. Wouldn't this be a nice start...restart for a better globalization ? We are in desparate need for "courageous" fore-runners ! The only alternative is inevitable disaster, not to remain isolated in the outbacks.

It is the enormous "intrinsic" Force of Gold that is frightening all actors to implement that FREE GOLD ! And yeahhh...this took quite some time before I could understand and phrase it. Makes it easier for answering the "why's" for the delay(s) of FREE GOLD FOR ALL.

USAGOLD / Centennial Precious Metals, Inc.Put a Foundation Under Your Portfolio#715803/14/02; 04:50:18

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call Centennial for Arrangements

TownCrierThe Economist weighs in on the Israeli-Palestinian issue#715813/14/02; 05:30:36

I'm providing this off-topic bit of reporting only in light of Holger Jensen's recent visit and series on the same topic. In a nut shell: very similar impressions are given.
Golden BearCanuck (msg#: 71573) #715823/14/02; 05:33:07

Greetings Sir Canuck,

I thank you for the warm welcome. I am sorry to say that I am not from the old days of FOA et al. I have been lurking at this forum for about 3 months, getting up to speed with Another's archives, and I'm still working my way (slowly) through the Gold trail - and what a trail it is!

I have been a bear for a long time, and through my research on the Internet, have found many valuable sites which have rounded out my knowledge of the world as it is today, and eventually led me to this site and

It has been these two sites that really opened my eyes at how precarious the global situation is at present, and gave me the nudge I needed to get into physical ownership of the wondrous metal.

With regards to real rates of return, I know your comments are true and correct, and they particularly apply to knowledgeable investors. However, even for astute investors, it can be difficult to get accurate figures on the rate of inflation due to the manipulation of CPI and PPI figures, and this obscures the calculation of the real rate of return. Therefore it may be easy to miss the fact that the real rate of return may be negative using true rates of inflation (if these figures could be obtained), as opposed to a positive real rate of return which is fictitious due to the fudged inflation figures. My thinking is that this is one of the key reasons the Austrian School refers to misallocation of capital due to incorrect assumptions by entrepeneurs regarding market conditions.


TownCrierSpeaking of Jensen...#715833/14/02; 05:34:34

There have been two updates you may not have seen (for those interested in foreign affairs):

(March 14, 2002) -- Mugabe steals a nation while the world watches

A South African Web site has attracted thousands of players with a new game that allows them to fire Zimbabwean President Robert Mugabe from a cannon into the International Court of Justice at the Hague. Called "Extradite Mugabe," the game was devised by university students on the assumption Mugabe would lose the just completed presidential election to Morgan Tsvangirai of the opposition Movement for Democratic Change. Unfortunately, Mugabe didn't lose the election. He stole it.... (click link for more)


(March 12, 2002) -- Long-term effects of war against terrorism are still over horizon

In purely military terms, Operation Enduring Freedom is a resounding victory. [However,] Afghanistan itself is less stable now than before the war. There has been a revival of warlordism, banditry and opium production. The new pro-American government does not have full control of the country and many of the warlords responsible for the murderous chaos that helped bring the Taliban to power have resumed positions of authority.

Looking beyond Afghanistan, the war had a contagious effect on South Asia and the Middle East. India and Pakistan veered closer to hostilities over Kashmir and the conflict between Israel and the Palestinians intensified to the point where President Bush finally realized it could undermine his global coalition against terror. Hence, a return to more active U.S. diplomacy there.... (click link for more)

TownCrierA cautionary "heads up" for our Canadian clientele#7158403/14/02; 05:48:21

HEADLINE: Dollar tumbles on Manley's comments -- Slides half a cent as minister questions competitiveness

(March 14, 2002) -- The Canadian dollar was sent reeling nearly half a cent yesterday after John Manley, the Deputy Prime Minister, said many Canadian companies could not survive if the currency were to substantially appreciate.

Mr. Manley said yesterday he worried that too many Canadian companies are profiting from a US62¢-dollar and that they would have trouble competing if the dollar were at US80¢.


The bottom line: does this mean the Canadian monetary authorities won't let the Canadian dollar stand if/when the U.S. dollar begins to weaken against the world at large? Meaning, it will walk in lock=step with the U.S. currency into the pits, (just as we expect from the yen)?

Gold diversification provides you with a safe view from the sidelines.


nickel62Great article!#7158503/14/02; 06:49:34

Monetary Sins of the West

The monetary system of the West, which is indeed the monetary system of the world that the West has foisted upon East and South as well, was born out of sin: sin of lies, thefts, and fraud. The original lie was that the government needed the people's gold in order to make the people's money stronger. The people responded to the call out of patriotism and faith in upright dealings, and turned in their gold in exchange for paper money. But no sooner did they do it than the government confiscated their gold held in trust and wrote up its value. Rather than making it stronger, the government has made the people's money "safe for devaluations and depreciation". The new monetary regime was bolstered by Draconian measures: ownership of gold was made a criminal offence. In a nutshell, it was lies, highway robbery, and deliberate fraud, epitomized in the United States by Franklin Delano Roosevelt's monetary legislative record; in other countries the form might have been somewhat different but the substance was certainly the same. It goes without saying that these measures were unconstitutional as they involved retroactive laws, confiscation of property without due process, and power-aggrandizement by a constitutionally limited government. But the perpetrators knew how to twist the legal system to prevent people from taking their grievance to court, or from getting satisfaction if they could. It was nothing short of an unscrupulous confidence game aiming at disenfranchising the people.

To this day the government has not been able to muster up sufficient moral fortitude to propose an amendment to the Constitution that would make its paper money, essentially a crib with an unwritten legend 'IOU nothing', to conform to its Covenant with the people. Later on the people succeeded in forcing the government to decriminalize ownership of gold. But this indulgence is still on a 24-hour basis subject to revoke, and there is no question of allowing the monetary unit with the unwritten legend 'IOU nothing' to be displaced by one with a written legend 'IOU gold' - on which our ancestors laid the foundations of Western civilization and the prosperity of the world in the 18th century.


Professor Emeritus, Memorial University of Newfoundland, recipient of the 1996 International Currency Prize, author of Whither Gold? E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. OR: This email address is being protected from spambots. You need JavaScript enabled to view it.

The Best Money in the World

There is hardly any university in the world today that would tolerate a professor publicly saying that gold still has a monetary role to play. Rather, professors are regimented and forced to parrot the propaganda line, such as Lie Number One, asserting that gold is a barren asset as it is not capable of earning a return to capital, quite unlike 'productive' paper currencies that earn interest when put out on loan. I must resist the temptation to develop the theme why it is ill-advised to limit the freedom of professors to say the truth as they see it in their professional capacity, even if it may not be pleasing to the ears of the powers that be. The task of a professor is to search for and to disseminate truth - rather than trumpeting government propaganda.

The statement that gold is an asset incapable of earning a return is a shameless lie. Facts speak for themselves: gold has been and is still being put out on loan for a consideration to all credit-worthy borrowers. There has been no interruption in this human activity throughout recorded history, not during the usury-witch-hunts, not during the World Wars, not during the revolutions, not during the gold embargoes, not during the gold prohibitions.

Not only has gold retained its monetary function of being lent and borrowed at interest, but gold is still a challenge to all paper currencies in a keen competition with one another for the title "The Best Money of the World". In point of fact, gold wins hands down: on most days the rate of interest on gold loans is well below the rate of interest on loans of paper currencies of any stripe or color. Even the Japanese yen which, thanks to the frugality of the Japanese people, has an eye-popping low rate of interest, comes out second to gold when loan contracts of similar duration are compared.*

Governments find themselves in a very uncomfortable, not to say dangerous, position. It is bad enough that gold gives the lie to sycophantic professors and other government apologists as they are pushing and peddling the virtues of paper money even as it is losing value at an alarming, if well-hidden, rate. (One of the best-kept secrets of history is that Dollar Almighty lost over 90 percent of its purchasing power during the 20th century, most of it in the fourth quarter after its link to gold was unilaterally severed by executive order). Worse still is the danger that people may start asking embarrassing questions: "If gold is the best money in the world as demonstrated by the lowest rate of interest on gold loans, then why can't we, citizens of this proud country, have it? Wouldn't it help producers in industry and agriculture, to say nothing of home-makers, if they could once more raise capital at 2 or 3 percent interest per annum, as they once did in the 'bad old days' of the gold standard?"


* It may be argued that the yen rate of interest is now lower than the gold lease rate. However, this is an aberration. The gold lease rate and the yen rate of interest are presently distorted (the former upwards, the latter downwards) by bond speculation and by the gold-carry trade. There is obviously a substantial exchange risk involved in holding yens, and so there is a depreciation premium incorporated in the yen rate of interest, making the theoretical yen rate higher than the gold rate of interest.

Lend or lease?

To deal with this contradiction between the teachings of officially approved economic doctrine and facts as demonstrated by the market, and to silence trouble-makers who dare ask silly questions about the possible merits of gold money, public relation managers decided to play a little semantic game. They launched Lie Number Two: gold is not lent, it is leased! "You say gold loans command the lowest possible rate of interest? Arrant nonsense! There is no such thing in our enlightened century as gold generating an interest income. Only paper money is capable to bring this miracle about. Gold may be leased, and an applicable lease rate paid, but that is a different matter altogether."

Here we have another shameless lie, one which a self-respecting public servant such as Federal Reserve Chairman Alan Greenspan who does know better, should not help propagate. It is a lie because, while it is true that there is a difference between loan and lease, a transfer of gold with no change in ownership unquestionably falls into the former category. The same gold is hardly ever returned to the lender, only its equivalent. Likewise, when money is lent, an equivalent amount is returned at the end of the loan period. By contrast, when a car is leased, exactly the same car, and not merely an equivalent, must be returned at the end of the lease period. For certain things quality control may be exceedingly difficult. We even have a word in the English language to reflect this fact: things that are not fungible cannot be loaned and so they must be leased. A large part of the reason why gold has been so successful in its bid to become the monetary metal par excellence has to do with the fact that gold is the most fungible substance on earth. Every ounce of it, 999 fine, is a perfect substitute for any other ounce, 999 fine, - regardless of which continent has produced it in which millennium.

Depreciation premium

The New York Times broke its silence on gold on March 11, 2001. In its Sunday edition it published an article under the signature of one Jonathan Fürbringer. Apart from its patronizing title A Stirring in the Long Suffering Gold Market, the article tries to be objective in explaining the technicalities of gold leasing. But then it goes on to pontificate on the question why gold can be borrowed at such a remarkably low rate as 1 percent per annum most of the time, and puts forth Lie Number Three: "The lease rate [on gold] is normally very low because the world's central banks have a lot to lend (sic)." For the third time, this is a lie. Gold commands a rate of interest lower than that payable on paper money loans because you know exactly what will be returned to you. In case of a paper money loan you don't. The only thing certain about a paper money loan is that it will be retired in depreciated units. Paper shrinks. Paper spoils. Paper is open to all sorts of destruction. You can protect it against fire, water, and theft, but there is absolutely no protection against the deterioration of good faith behind it. The only thing creditors can do is to demand a 'depreciation premium' to compensate for that loss. That premium (along with others such as a risk premium in case of a less than perfect credit rating) is added to the net rate of interest, making the market rate that much higher. There is no depreciation premium for gold loans. None whatever. One ounce of gold will always be one ounce of gold. Gold does not shrink. Gold does not spoil. Gold is indestructible. No faith or credit is involved in accepting it: you can test it with scales and acids if you don't trust the agency that has stamped it.

The low lease rate on gold is not controlled by central bankers. They are not the only ones lending gold. As a matter of fact, they are a newcomer to this business - evidencing that theirs is a concerted action with a hidden agenda.

Gold: Public Enemy Number One

To understand this hidden agenda fully we must grasp the fact that Western governments by covenant are supposed to be a government of limited power. Powers not enumerated explicitly in their Constitution or Charter are reserved for the people. Central banking was the device used to contravene this Covenant and to bring back unlimited government power from the Dark Ages through the back door. A government that arrogates itself the power to issue promises in exchange for real goods and real services, while having no intention whatsoever to meet the obligation but will issue a new promise every time an old one is presented at maturity, is not a limited government. It is a government of unlimited power. Banker Rothschild of Waterloo fame put it most eloquently, albeit somewhat cynically, when he said: "Give me the power to print money, and I don't care who makes the laws." An executive branch that has institutionalized money-printing is making a mockery of the legislative and judiciary branches - whether the latter realize it or not. It is making a mockery of free markets as well. Since all goods are encumbered with a first-refusal claim by the government, the markets trading those goods aren't free. Nor is the labor market, as laborers are coerced into selling their services for irredeemable promises. Labor contracts are pretty nearly meaningless as they are made in monetary units of uncertain value subject to depreciation and debasement. Central banking is but a front used to cover up this chicanery.

Of course, to a government and central bank that can stoop so low as to issue irredeemable promises to pay, gold is not just anathema. It is more. It is public enemy number one. Gold offers eternal challenge to government arbitrariness and coercion. Gold money is not dead, in spite of premature obituaries in the media. But if not dead, gold must be totally discredited, not just in words, but in deeds as well. And this is where central bank leasing of gold enters the stage.

"We'll make your virtue destroy you!"

Central bank gold is ill-gotten gold. It has been taken from the people fraudulently, by appealing to their patriotic feeling and faith in government. The fraud did not weaken people's trust in gold, on the contrary, as could be expected, strengthened it. The task given to central banks is to destroy that trust, by hook or crook, once and for all. A third-rate precious metal, palladium, is allowed to go up in price fifty-fold, and trade over $1000 an ounce, but everybody who touches gold must be taught a lesson. He must be made to burn his finger right to the armpit. The diabolic plot is to use the very virtue of gold that makes it the best money known to man commanding the lowest rate of interest, to destroy people's trust in gold. Through their greed unscrupulous bullion bankers and others can be enticed to take the gold at the low lease rate, sell it, and put the proceeds in high-yield government bonds. The sale will crush the price of gold. Should it still show signs of lingering life, it can be clubbed down again and again, with more and more leasing. (This bit of intelligence is through courtesy of Alan Greenspan.) Clearly, if it did not have the virtue of commanding the lowest rate of interest, then this stratagem to destroy people's faith in gold could not work.

Paper clips in the balance sheet

Central bankers are on the horns of a dilemma. On the one horn, they would love to use their gold in a dumping campaign to punish all those who trust their savings to gold. On the other horn, their gut-feeling tells them that outright sale may not be a good idea after all. They would give up the best kind of monetary asset that is nobody's liability, and replace it with the worst kind, namely, irredeemable promises of devaluation-happy governments. They would substitute a default-prone asset for a default-proof asset. Such a course could undermine the strength of their balance sheet, perhaps fatally, with incalculable consequences to the value of their banknotes.

Those central bankers who still read history may know that in the 1931 episode of the devaluation of the British pound the directors of the Bank of France were scurrying around the building to find overlooked assets, and they put not only the value of the building, but also the desks in the building, and the paper clips on the desks, into the balance sheet in the forlorn hope to cover up the losses that the bank had suffered due to the devaluation of the pound. Forty years later, in the 1971 episode of the devaluation of the dollar, the techniques of damage-control were more 'advanced' if also more disingenuous. The French government printed up special non-marketable obligations and ordered the Bank to put them in the balance sheet to cover up the hole created by the dollar default. Luckily for them, the cost of damage-control does not have to come out of the hide of the central bankers. It comes out of the hide of "you know who".

Even so, too big a loss may incur the wrath of the government. In 1971 the loss on the dollar assets was partly compensated by the gains on gold assets. But what if those gold assets are gone?

Have their cake and eat it

Central bankers have found a neat way out of their dilemma. They did something that nobody had ever done before, not as if it was for lack of trying: to have their cake and eat it. They leased their gold knowing that it would promptly be sold in the open market by the borrower, which could not fail to have the same effect on the gold price as outright dumping would. But, at the same time, they would still have the gold, well, after a fashion: if not in their vaults, then at least in their balance sheet. Central bankers do not care that through their gold leasing policy they are forking out obscene profits to the bullion banks. They let them borrow at the minuscule lease rate while pocketing a hugely inflated interest income drawn from high-yield government bonds in which the proceeds from the sale of leased gold have been invested. Well, that's just the cost of doing business. That's just the going rate of hiring the hit-man. But why worry? The obscene profits do not come out of the pockets of central bankers. They come out of the pocket of "you know who".

This is adding insult, and more injury, to injury. After the gold has been forcibly and fraudulently taken from them, the people are now made to pay the cost of the campaign to discredit it as a monetary asset.

Paper-gold alchemy

This is the plot. Will it work? Time will only tell. Gold has the habit of leaving the place where it is not appreciated, and going where it is. Clearly, leaders in the West neither appreciate gold nor would they know what to do with it if they did. So gold is taking leave of them and will end up in private hands. When it does and the government is out of gold, then the people will get their franchise back and will decide on the future of gold. There is no question that the restoration of gold money will be an option, with a good chance of being adopted.

Meanwhile, here is a more troubling question confronting the world, one that will keep haunting it until the gold saga comes to rest. Can a monetary system built on lies, confidence games, fraud, and coercion, long endure? The garbage heap of history is littered with defunct and discarded irredeemable promises issued by past governments that also tried their hand at making the paper-gold alchemy work. There is more room, no doubt, in that heap, awaiting more recent discards.

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

11 July 2001

LeighSiochain#7158603/14/02; 06:51:35

Last night I reread your story about how you saw a 9/11 prediction on another forum, and it got me thinking. Apparently there were a lot of people (Muslims) who knew the crashes were going to happen and were so gleeful about it that they were dropping hints all over the place. Nobody picked up on the hints because the 9/11 attacks were so outside the realm of normalcy (for our country) that they boggled the mind. Maybe that prisoner we were talking about yesterday does know something. But nobody will believe him because it's outside the realm of anything that the United States could be destroyed economically.

I wonder what he knows?

nickel62A very important piece of the financial puzzle!#7158703/14/02; 06:54:47


Antal E. Fekete
Memorial University of Newfoundland
St.John's, Canada A1C 5S7
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.


The Pharaoh's Treasure

According to the ancient Greek historian Herodotus the treasure of no Egyptian pharaoh was comparable in either size or value to the enormous hoard of Rhampsinitos. His treasury was housed in a huge stone building adjacent to the palace, and it was considered burglar-proof. The door was sealed by the pharaoh's personal seal and manned around the clock by armed guards. Rhampsinitos was present in person every time the seal was broken and the building entered. Therefore it was extremely disturbing when the pharaoh discovered that his treasure was being pilfered, albeit without any sign of unauthorized entry into the building. To find out what was going on the pharaoh caused a trap to be placed inside to catch any would-be thief as he was approaching the treasure-bins. To his utter amazement, on his next visit the pharaoh found that, while the trap had done the job of catching the would-be thief, yet this did not help him one iota to solve the mystery. More treasure was missing, together with the head of the would-be thief. There was no sign showing how the missing objects had been spirited out of the building. The identity of the thieves could not be established. It appeared as if someone had supernatural power to enter the building invisibly and pilfer the treasure without leaving any trace.

Pilfering the Wealth of Nations

The Great Depression seems to have presented a similar mystery. Productive enterprise came under pressure to liquidate debt and inventory, so excruciating had the debt-burden become. Those firms that could not liquidate fast enough were themselves liquidated. The Wealth of Nations was decimated as scores of once flourishing firms were going bankrupt. Nobody suspected that the loss of wealth might be due to plunder and pilferage. For a time governments bought nostrums prescribed by Keynesian and Friedmanite soothsayers to prevent similar disasters from happening in the future in the belief that the destruction of wealth was due to natural causes. But as depression struck Japan in spite of taking the prescription, and as other countries appear also to succumb to the Japanese disease, the peddlers of nostrums became suspicious as being impostors. In the absence of an acceptable theory explaining the Great Depression the danger of future depressions looms larger than ever in the horizon.

Our revisionist view presented here for the first time suggests that, far from being due to natural causes, the Great Depression was unquestionably the result of plunder and pilferage. The Wealth of Nations was being pilfered invisibly. Those responsible couldn't be caught because the thievery involved no physical movement of property. Whenever a dead body was found (such as that of LTCM, or that of Enron), the head was missing and the investigation could proceed no further. Public opinion has been lulled into the false belief by the economists' profession and by the financial media that there was in fact no pilferage, the phenomenon must be explained by the idiosyncrasies of the capitalist system of production.

Capital Consumption

It is a daunting task trying to change a consensus that has been nurtured through generations. Yet we must not shrink from exposing the crime if we know who the culprit is, even if our evidence will be laughed out of court. Here is our analysis. The thievery involved no physical transfer of property; it involved book-keeping transfers from the balance sheet of the productive sector to that of the financial sector. The root cause of the wholesale bankruptcy of productive firms was not the falling price structure (although it certainly helped) but, primarily, the falling interest-rate structure. As interest rates fell, bond prices rose, and with them rose the present value of debt. This caused the cost of servicing productive capital already deployed to rise as well. However, no allowance for the increased costs was made in the balance sheet. There was no recognition of the fact that falling interest rates caused the liquidation-value of firms to snowball, materially adding to liability. In other words, there were losses that were never realized and no charges to income against them were made. Moreover, this was the practice across the board. The failure to realize losses in the national economy meant that society has been consuming capital over a period of time. In the end productive enterprise was operating on the strength of phantom capital. Not only was capital consumption universal affecting all firms engaged in productive enterprise, it was going on unnoticed. The viciousness and violence of the reaction, when it finally came, was unprecedented. Productive firms were falling right and left, regardless of the demand for their products. Firms that were certified as being sound one day would go bankrupt the next. One of the lessons of the Great Depression is that capital consumption is the most treacherous form of credit abuse that may plague society, chiefly because it can go on unnoticed for so long before anyone can recognize it. Corrective action, when it comes, is too late. This highlights the importance of maintaining the highest accounting standards. Any attempt at compromise is a crime not only against the shareholders, but against society as a whole.

Once we have identified capital consumption as the cause of the Great Depression, the focus must be shifted to the question why the rate of interest was falling as long and as much as it did, making capital consumption possible. To be sure, without such a prolonged and pronounced fall in interest rates there would have been no universal mistake in accounting. Here we have to refer to chronology in order to establish the direct responsibility of politicians, in particular, the responsibility of one person, F.D. Roosevelt. The banks in the United States lay prostrate between Election Day, November 1932, and Inauguration Day, March 1933. As a consequence of the economic boom of the "roaring twenties" interest rates were steadily increasing, and bank capital was greatly weakened by the proliferation of non-performing loans. Rumors had it that Roosevelt, the Democratic candidate for the presidency would, in spite of his repeated pledges during the campaign to the contrary, "go off" the gold standard and devalue the dollar. There was a run on the banks. People wanted to withdraw their savings before the monetary mischief was sprung upon the nation. They trusted neither the integrity of the banks nor that of the politicians - not entirely without reasons as one might add in retrospect. Some revisionist historians even go as far as suggesting that rumors of devaluation were deliberately planted by Roosevelt himself. He did want the banks to fail so that upon inauguration he could declare a state of emergency and assume dictatorial powers. (Note that these allegations of revisionist historians have no bearing on my argument. Be that as it may, it is a fact that Roosevelt made himself unavailable during the interregnum, and refused to deny the rumors of an imminent devaluation, in spite of repeated appeals from Hoover.)

Wiping out Negative Net Worth

In the event, shortly after inauguration Roosevelt closed the banks. Later most of the banks were reopened and given a clean bill of health but, in reality, they were in a very sorry state rather similar to that of the Japanese banks today. They had a negative net worth. There were huge holes in their balance sheets. They could open for business only by virtue of the government's connivance allowing bank inspectors not to enforce the accounting rule that assets be carried at market value in the balance sheet. The banks had a strategy to wipe out negative net worth by mending the holes in their balance sheet - a Herculean task. On the assumption that interest rates would fall further, they could keep buying government bonds to let capital gains in the bond portfolio take care of capital insufficiency.

There was just one problem with that strategy. It was the risk that interest rates may turn around and start rising This would not only hurt the banks, it would turn the bond market into a "killing field". Field where the banks would be slaughtered. There were plenty of reasons, too, why interest rates could indeed turn around and start rising again. There was the continuing threat of devaluation of the dollar. There was the added threat of a huge inflation. (In the fullness of times, both threats became a reality.) There was a flight of capital from the country. The banks could not have concocted a riskier strategy to save their skin. But there was a godsend, turning the risky bet into a safe one. The risk threatening the banks' strategy was removed by a Presidential Proclamation.

Save the Banks, Ban Gold

Roosevelt called in gold coinage. He made trading in and owning gold (in forms other than jewelry) a crime. What has all this got to do with the banks' strategy for survival? Here is the connection, which has never been adequately explained by scholarship. The risk that interest rates might turn around frustrating the banks' strategy to wipe out negative net worth was eliminated by Roosevelt's ban on gold hoarding. Predictably, the ban had a deflationary effect on the economy as it started a downward spiral in the rate of interest. Before the ban those who wanted to manage their liquid wealth most conservatively would park it in gold. After the ban they were forced to park it in government bonds. The captive clientele for government bonds guaranteed that bond prices would keep rising, and interest rates would keep falling, for several years to come. The banks were given the green light to go ahead with their massive bond-speculation scheme. An orgy of speculation in the bond market followed.

Everybody knows about the bull market in stocks in the 1920's. Reams of books have been written on that subject. But nobody has ever heard about the bull market in bonds in the 1930's. Yet it is a fact that the volume of the latter surpassed that of the former by a factor of ten. The banks made obscene profits in the form of capital gains in the bond portfolio. For the next six years, while interest rates continued to fall, the banks and other firms in the financial sector got fabulously rich, while firms in the productive sector were being put through the wringer. The banks' profits were more than enough to wipe out negative net worth. Banks that had been technically bankrupt at the beginning of the decade were in ultra-strong financial position by the end of the decade.

Financial Vampirism

However, the banks' newly found wealth did not come out of nothing. It was not newly created wealth. It was existing wealth that was siphoned off the balance sheet of productive enterprise forcing it into bankruptcy in consequence of this financial vampirism. We may do well to remember that the banks' pilfering the Wealth of Nations was possible because of the falling interest-rate structure which, in turn, was engineered by the crudest form of government intervention in the market: the unconstitutional confiscation of the people's gold without due process.

This is not to suggest that Roosevelt was an accomplice or a stooge of the banks, or that he declared his ban on gold hoarding for the purpose of bailing out the banks. It is possible that there was a fortuitous coincidence. We may never know, and it does not matter. The fact remains that tampering with gold is tantamount to tampering with interest rates. It is a most dangerous expedient as it may have many unforeseen and untoward consequences.

This, then, is the revisionist view of the Great Depression. Without the gold ban the recession that started with the 1929 stock market crash would have been over by 1932. With the gold ban, the recession was turned into the greatest depression of all times. The man who was celebrated as savior ridding the nation of the curse of depression was in fact the one who had brought the disaster about. He pulled the gold trigger that released the murderous forces of bond speculation to prey upon the productive sector. It heralded the continuing fall of the rate of interest. Bond speculators, first and foremost the banks among them, were listening and got ready to move in for the killing. The vultures picked the bones of productive enterprise clean. And all this was done under the veil of anonymity. Nobody guessed that the Great Depression was a happy time for some. Well, for the bankers it was time for popping corks. Not only was their skin saved, but they became so strong financially that they could thereafter dictate government policy.

Don't Entrust Your Money to Desperadoes

Thus the chief culprit and the only beneficiary of the Great Depression was the banking fraternity. They profited from the disaster devastating the world economy. I now pick up the thread I left off in part two, and continue my discourse on the consequences of relaxing accounting standards. It was a colossal mistake to reclassify insolvent banks as merely "illiquid" and letting them open their doors for business. An illiquid bank, by definition, is one that can be considered solvent only by virtue of relaxing accounting standards, allowing the bank to carry an asset (usually a government bond) at acquisition price, regardless how low the current market price of that asset may have fallen. Why is this a mistake? Well, illiquid banks are desperadoes ready to take unreasonable risks with the people's money entrusted to their care. Illiquid banks have nothing to lose but their stigma of being insolvent. They should be closed down by bank inspectors without hesitation. Any compromise in relaxing accounting standards is foolish in the extreme. It invites great dangers affecting not only shareholders and depositors, but society as a whole. It is hard to imagine a dictum more insane than the one: "Bank X is too big to fail".

Cui bono?

We have argued that the Great Depression of the 1930's was caused by illiquid banks in the United States as they became the engine of an unprecedented speculative orgy in the bond market to drive down interest rates. We could also argue that the depression in Japan today is caused by illiquid Japanese banks as they have become the engine of another huge bull market in bonds to drive the rate of interest to zero.

There is more to this story than revisionist history. Our insight may help explaining the passing scene of our day. For the time being, there is no ban on gold hoarding today. But it is apparent that the gold market is being manipulated, possibly with government connivance. In trying to understand an unexpected or puzzling historical event, historians used to ask the key question: cui bono? (who is the possible beneficiary?)

It ought to be understood well that gold manipulation (i.e., conspiracy to keep the price of gold permanently in a low range) is deflationary. Just as Roosevelt's ban on gold hoarding, the present exercise in gold manipulation also has the effect of restricting demand for physical gold. The result is the same: interest rates keep falling, and for the same reasons. Liquid capital all over the world is seeking out the 'next best' alternative to gold as a conservative investment medium. It will find it in the form of government bonds. Once more, a captive market for government bonds has been created. As bidding for bonds continues, interest rates keep falling. Bond speculators are invited to jump on the bandwagon: the risk that interest rates might turn around and start rising, thereby frustrating the speculation, has been reduced by the gold manipulation. Before our very eyes (and not everyone has eyes to see this sort of thing) there is an orgy of bull-market speculation in bonds that started twenty years ago. The end may not be in sight yet. In 1980, interest rates in the United States were around 16 percent per annum. They have come down to around 5 percent. If the example of Japan is any guide, they still have a long way to go. American interest rates could follow the Japanese into the abyss. Why not? The mechanism to link the two rates is already in place. It is called the yen-carry trade. The speculator sells the Japanese bond and buys the American. This amounts to borrowing yens at zero percent (or thereabouts), converting the proceeds into dollars and lending them at 5 percent. The reward? Almost 5 percent - not bad for shuffling paper. Clearly, the effect of the yen-carry trade is to drive down the rate of interest in America, too.

The consequences of a falling interest-rate structure today are no different from those in the 1930's. There is capital consumption in the productive sector. There is a stealthy transfer of wealth from the productive to the financial sector. Cui bono? Why, for the benefit of the banks, of course. American and Japanese banks. Banks of any stripe or color. The worst part of it all is that the public is still in the dark about the invidious consequences of falling interest rates. It is told a tale about free markets deciding bond values and the value of gold. The ominous fact, however, is that both markets are rigged. They are like a casino where the dice are loaded for the benefit of the house.

$ 100 trillion worth of hot air

The truth is that there is no public benefit in bond, foreign exchange, and gold speculation. None whatsoever. The world could still go on without any of this trading, and no one would be any worse off. The overwhelming majority of the people, including all savers and producers, would be better off. Interest and foreign exchange rates were so stable under the regime of the gold standard that no speculator in his right mind would hold bonds or foreign exchange in the hope of speculative gain. Today not only do we have speculation in bonds and foreign exchange; since 1971 we have also allowed speculators to construct derivatives markets on the top of the bond , foreign exchange, and gold markets. The combined volume of these derivatives markets has snowballed and its size has hit and surpassed the $100 trillion mark! No misprint here. There is commitment to pay compensation for the fluctuation in the value of $100 trillion worth of paper. (Never mind that there is isn't nearly as much paper in existence, not even if we include the scum of the junk bond market.) For centuries before 1971, the grand total of paper so 'insured' was exactly $ 0 (zero dollar). In other words, in 1971 the world all of a sudden developed an insatiable appetite for insurance. In thirty years the world came up with $ 100 trillion worth of 'insurables' to bolster security. What security? Maybe financial security? No, we can't very well say that, not after the collapse of Enron, and not after the dollar having lost 90 percent of its purchasing power during the same thirty years. Then physical security, perhaps? No, not physical security. Not after the destruction of the twin towers of the World Trade Center, and not in the middle of a drama in two acts: oil war against Iraq. Then what kind of security is it that the insuring of $ 100 trillion represents? Search as you may, but you will find only hot air. The world was a much better and safer place for hundreds of years with stable interest and foreign exchange rates, and with a stable gold price, and without any insurance on hot air. Had it kept them that way, it could have earmarked funds for the eradication of poverty, hunger, diseases, illiteracy, or for any other noble cause.

The $ 100 trillion dollar market in derivatives created by the big American banks serves no purpose consonant with the interest of the national or world economy. It serves one purpose only: the aggrandizement of the profits of the financial sector, at the expense of the productive sector. The big American banks were as insolvent twenty years ago as the Japanese banks are today. Then they started their desperate bond-market gamble, trying to drive down interest rates. They badly needed capital gains in their bond portfolio to mend the enormous holes in their balance sheets. The gamble has paid off. Today the American banks are in a better financial shape. However, a high price for saving the banks' skin was paid by the productive sector. American firms producing hardware have been put out of business. Solid jobs in the productive sector were eliminated and replaced by soft jobs in the service sector. The plight of the American breadwinner who is now flipping hamburgers instead of pouring molten steel (and who may soon be out of any job) is in direct consequence of the orgy in bond speculation. Nor is this all. The depression in Japan may not stop at the Pacific. It may well portend to engulf America and the rest of the world.

Bond Speculation is No Zero-Sum Game

I am well aware that the sum $ 100 trillion is a 'notional' amount. We are not talking about $ 100 trillion worth of bonds being traded. We are talking about the combined stakes of bond speculators who have placed bets on the rate of interest, and want to profit as if they have owned bonds in that amount. But the profits, provided the speculators' bet comes off, are not 'notional'. They are payable in cold cash. Suppose, for the sake of argument, that most of the bets call for lower interest rates. In other words, most speculators would buy bonds as they expect their value to rise further. (This is a plausible assumption. No doubt this is exactly what Japanese banks scrambling to get out of bankruptcy are likely to be doing right now.) If interest rates did in fact go down and the price of bonds did go up, say 1 percent, then the speculators' profit would be $ 1 trillion in cash. Who is going to pay that?

Economists will tell you that the profit of one speculator is the loss of another. Don't buy that. It is arrant nonsense. It would be true only if speculation were a zero-sum game. This is the case for stabilizing speculation dealing with risks created by nature, for example, in the futures markets for agricultural commodities. Here speculators make money by resisting the formation of price trends. As there is no consensus whether the formation of an uptrend or a downtrend is more likely, speculators will be betting on either side of the market. But in markets where risks are man-made, speculation is not a zero-sum game. This is the case of destabilizing speculation. For example, in the market for bonds and its derivatives speculators make money by inducing and then riding price trends. They are on the same side of the market, which is practically always the winning side. Remember, speculators can influence the outcome by throwing their weight around. (Try to do that against the blind forces of nature!)

Why are risks in the bond market man-made? Because under the gold standard interest rates were stable. There was little risk that bond values might change. Risks were injected artificially when politicians forcibly removed the gold standard.

But if the profit of the speculator who bet on higher bond values and won is not paid by another speculator on the other side of the bet, then who is paying it? This is a crucial question and we must answer it very carefully. The other side of the bet was probably taken by a

PippinNickel - the Great Depression#7158803/14/02; 07:25:42

Nickel: your text was corrupted during the copy/paste, I guess. Hope my own extract below will be ok.

Sorry Gentlemen. I know I'm like a child who wants to show his toys every five minutes, but I cannot resist sharing my discoveries. My apologies if you have seen this extract 100 times already.
The following is another really clear explanation of the 1930 crisis by Mr Greenspan in ...1967 (Gold and Economic Freedom - link above).
Lots of things in two paragraphs only. A blessing for a newbie.

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates.

The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market -- triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.

In this text, Mr Greenspan does not appear as the most enthusiastic supporter of the Central Banks. Does anybody have any idea on what provoked his U-turn ?

barnacle billConfiscation talk=fear mongering #7158903/14/02; 08:17:43

Those potential buyers who may become fearful are also known as 'weak hands'. People with backbone - real Americans, will buy and hold, consequences be dammed.
Full speed ahead; damm the torpedoes!

AndúrilPippin: Mr. Greenspan's "U-turn"#7159003/14/02; 08:18:58

Quite simply stated, he "grew up". With age more often than not comes also maturity of understanding, wisdom for the blessed.

Change may be applied from many fronts, but also may come from within most easily. Is it not the dream of all gold-minded men not dispossessed of wisdom to play their hand at Central Banker if the world allows?

For his part, Mr. Greenspan has done well to define the function of the U.S. central bank as custodian of the monetary unit apart from the statist inclinations of the congressional government. Seen fully, institutional limitations hold him to fall short, to look on as European counterparts deliver the young man's dream.

Andúril"Mongering the fear of confiscation"#7159103/14/02; 08:58:00

Rumours of summer fire or winter cold the spring seedling may dismiss as words of idle fear. The aged oak laughs at these naysaying little wands full of the sap of life bending gaily in cool breezes about his knees.

Where the rash and reckless see idle notions, the old and wise reads the cautions of life. Where roots run deep and bark grows thick from many seasons, the storm warnings of confiscation do not dampen the spirit and need for gold. Experience learns to weather the storm with gold held in its proper form. Form and function. For each function to be served, the Voice of Reason speaks of the proper FORM. This Voice does not speak as saplings do, rashly discounting words to serve somehow as naive "solution" to rumoured storms.

As often seen, benefits of age and wisdom dictates steady course of actions often lost upon the young. Those leaping too early from the nest die on the rocks below, and yet they leap here and there...

sectorJapan Buying Gold...NYTimes Article#7159203/14/02; 09:22:01

Their numbers are wrong [$420 Billion light on the savings-at-risk]...but it's a start

March 14, 2002

Some Japanese Are Hoarding Gold


OKYO, March 13 — While Japan has had the world's fastest- growing major stock market this year and the yen has jumped nearly 3 percent against the dollar in the last month, a small but growing number of Japanese investors are preparing for the worst and hoarding gold.

With limits looming on bank deposit insurance, banks tottering under bad debts and the government printing money in an effort to create inflation, sales of gold are expected to come close to quadrupling this quarter, compared with the period last year, according to the World Gold Council, an industry group.

"The Japanese economy is very bad," Yujiro Isoda, a 67-year-old retiree, said after he had purchased two Austrian gold schillings at a downtown gold shop here. "The accumulated bad loans are still not cleared. How can I protect my property? Buy gold, that's what I thought."

Nearby, the shop manager hovered over a display counter where gold bars were arrayed like metal pats of butter. In February, he said, his gold sales were seven times those in February last year.

Below Japan's Zenlike surface calm, a big fish is roiling the lower depths: consumer unease about the direction of the yen, the economy and the banks.

On April 1, federal insurance on time deposits, currently unlimited, is to be restricted to $75,000 for each account; that cap will be extended to all savings accounts in April 2003. At the same time, stocks of some major banks bump along at penny-stock levels because investors know that several are effectively insolvent without another multibillion-dollar bailout from the government.
Fuminori Sato for The New York Times
Stores run by Tanaka Kikinzoku Kogyo sell gold to Japanese nervous about the economy. Isamu Ikeda shows the wares.

World Gold Council
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On the government side, public debt has ballooned to 140 percent of gross domestic product, the highest level of any major developed economy. Now politicians and economists are pressing the Bank of Japan to print trillions of yen to allow Japan to inflate its way out of its debts. From September through February, the markets responded, devaluing the yen by 15 percent against the dollar. This month, the yen has strengthened as Japanese companies have repatriated assets to close their books for the end of the fiscal year, March 31.

But Mr. Isoda's generation acutely remembers the trauma of Japan's postwar inflation, which peaked at 115 percent in 1947.

"I have experienced World War II and survived the postwar high inflation," he said. "I know that paper money can turn into rubbish, nothing. But gold can survive any time of history."

While some may dismiss Mr. Isoda's economic views as ultraconservative, they were generally endorsed the same afternoon last week in an executive dining room at the Bank of Japan, the nation's central bank.

"There is a gold rush going on," said a high official at the bank, which is responsible for controlling the nation's money supply. "People are buying lots of gold. There is uncertainty about the banks, about deflation and, finally, about inflation. Gold is seen as the best hedge against inflation."

Some investors, particularly younger people, are also shifting into dollars and euros, he added, in part because they did not experience Japan's roller coaster of exchange rates over the last 15 years. That shift is still relatively small, but Japan's bank savings are so big — 716 trillion yen, about $5.6 trillion — that American companies say even a tiny shift would mean a lot of business. Last year, Pimco, an American fund management company, said its Japanese accounts had increased about 90 percent, to $6 billion — an increase that Pimco said it hoped to match this year.

Since last November, the surge in Japanese gold sales has contributed to a 10 percent strengthening in world gold prices. Measured in yen terms, the jump was 18 percent. In Tokyo, the trend is most pronounced at the store visited by Mr. Isoda, where clerks have sometimes helped patrons load as much as 85 pounds of gold bullion — more than $300,000 worth — into shopping bags and lug the bags down the street to their cars.

"We don't know how they keep their gold at home," said Osamu Ikeda, a spokesman for the store's parent company, Tanaka Kikinzoku Kogyo. "Maybe in a safe, maybe in a bank safe deposit box."

In the last quarter of 2001, sales of investment gold — bars and coins, as opposed to jewelry or ingots used for industrial processes — hit 690,000 troy ounces in Japan, a 54 percent jump over the period in 2000. Itsuo Toshima, regional director for Japan and Korea at the World Gold Council, forecast that sales of bars and coins would jump to 1.45 million ounces in the first three months of this year, almost four times the level of the period last year.

"It is increasing very rapidly," Mr. Toshima said.

Japan's interest in gold reverses a long trend. Gold spiked as high as $850 a troy ounce in 1980, when the second Arab oil embargo sent inflation roaring and the Soviet invasion of Afghanistan caused stock markets to slump. But after those problems receded, investors around the world lost interest in gold because inflation was tamed and stock markets generated consistent gains. Gold now sells for about one-third that 1980 high — $293.60 an ounce in New York yesterday.

But with uncertainty clouding the Japanese economy, some investors see gold as a rock to cling to. Since a speculative bubble burst in 1989, stock and land prices have receded to about one-quarter of their peaks.

The most popular alternative — bank savings, which account for half of Japan's $10.5 trillion in financial assets — lost much of their appeal as interest rates shrank, recently to as little as 0.02 percent a year. On Monday, Shizuoka Bank said it would cut its interest rate for ordinary savings accounts to 0.001 percent from 0.005 percent; that move means that savers will get 1 cent in interest annually for each $1,000 on deposit.

But now the trade-off between ultralow interest and security is being shaken by the restrictions on deposit insurance and by a growing perception that some banks are insolvent. In the last year, about 50 small banks and credit unions have failed.

With the deposit insurance deadline looming, 21 percent of all time- deposit accounts over $75,000 were closed last year. Most of the money, about $200 billion, was moved into protected savings accounts, according to the Bank of Japan. Fear about the safety of banks now outweighs concern about fluctuations in the price of gold for many Japanese.

"Our customers don't care much about the gold price," said Yoshihiro Matsumoto, director of the gold section of Mitsubishi (news/quote) Material. "They just want to convert their bank account into gold."

Even if they do not bother buying and storing gold, some Japanese are still shying away from conventional savings. Bank managers sourly admit that some depositors have closed savings accounts, only to turn around and place the cash in safe deposit boxes at the same banks — or hide it at their homes.

James Terada, an American business consultant, remembers a visit he made last summer to an old classmate from his Tokyo elementary- school days: "He asked, in all seriousness, that if you stored yen bills in a jar, sealed it with wax, would the currency get moldy and spoil?" Mr. Terada said.

In a regional consumer confidence poll released last month by MasterCard International, the Japanese ranked as Asia's biggest pessimists.

Other nonpaper assets won favor in Japan this winter. At the downtown Tokyo branch of Mitsukoshi, one of the city's largest stores, jewelry sales rose 27 percent in January compared with last year, while sales of art objects rose 13 percent.

Overseas, Japan's new love affair has not gone unnoticed.

"The Japanese want something physical to put their money in," Paul Macarounis, a gold trader for NM Rothschild Australia said from Sydney. He discounted this week's run- up of the yen and Tokyo stock prices, saying Japan remained economically weak. "The reasons for buying gold are not going to go away in a hurry."
All of the main elements are described...the loss in confidence, failing banks, pog not being a big factor.

The fuse seems to be lit. At the least the Treasury gold "hoard" will be much, much less after April.

The big qusetion is when will the Treasury implement its exit strategy?...Asumming the mopes HAVE one.

PizzAuto Retailers#7159303/14/02; 09:55:00

I'm about as confused as I can get. After 30 years in the industry, I see NOTHING in the next year that can account for the increase in stock price of public retail car dealers over the last 6 months.

The manufactuers stocks have bounced strongly off of 911 lows, that I can understand, but to have the retailers double or even triple in price? Markets lead 6 to 9 months in theory, so how can the retailers out perform the manufacturers?

Manufacturers have world exposure and the US retailers have domestic exposure only? That would indicate a massive rebound in US consumer purchasing that the rest of world may not participate in as greatly? I don't see it.

New and improvced financing or huge discounts factory sponsored? Not much left there, and dealer competition would force margins down, so volume goes up, but profits stay the same or increase a little, but not nearly enough to account for this stock price appreciation.

A lot of stupid investors believing bubble vision and the rebound we're having? Possible.

An oil shock like the 70's (or worse) that would send retail demand for more fuel efficient cars thru the roof and the retailers making a killing on the limited supply available? This is my guess right now.

Any thoughts? I may be way too close to the industry, but right now business is TERRIBLE.


Cavan ManPIZZ#7159403/14/02; 10:12:56


Buy gold; a sensible option.
PizzCavan Man#7159503/14/02; 10:56:59

Did that yesterday, 25 Maples. (

My concern is that when markets as large as auto's are doing strange things, something big may be coming. I don't think th PPT is into retail car stocks, but the retail auto market is huge. MAJOR war, massive inflation, major bank failures or something within the next 6 months or so?

When the banks went in Argentina, cash went into anything tangible, cars big time because they were readily available.

Are the retail car stocks discounting an Argentine situation here, on the horizon?

Don't know, but I increased my gold on hand yesterday, and I shorted JPM today.

Interesting times


nickel62Pizz#7159603/14/02; 11:02:07

You are confusing stock prices with a reaction to a foreseeable future improvement in fundamentals. That is not necessarily what happens in Wall Street. The stocks might be reflecting collective belief that the cycle will turn soon and that the money trying to go into them in anticipation of that move has made the rise you see, or it might be that the investment bankers want to be able to do reflate, refinance, repackage the sector and are providing help in lifting the stocks. My only comment is don't be surprised at moves in stock prices that appear to be detached from fundamentals, most of the market has been for almost a decade.
EagleOneThe male grump syndrome - off subject#7159703/14/02; 11:57:28

I think this pretty well describes us. I feel much better now.
PizzEagle One#7159803/14/02; 12:06:56

Thought my problem was disjointed markets and reading too many negative posts.

Glad to see that its just hormones (smile). Off to the doctor for some help.


sector@PIZZ The DOW is "Controlled" ...#7159903/14/02; 13:05:41

...largely by an unseen money machine combination of FED repos and the "float" from JPM's now $16 Trillion interest rate derivative book. It is similar to the officially announced Japanese NKK225 "Price Keeping" mechanism and Kozuimi's newfound penchant to inflate the yen.

Imagining that we have free markets is like imagining proforma earnings to be real earnings. Therefore trying to find macro-economic causality to explain market movements under this charade consumes needless energy.

The most important underlying dynamic to today's and tomrrow's gold market is the inexorable drain of physical metal from the vaults of the Uniter States Treasury (CFS(GAAP) debit entries reveal that the 8,000 tonne "official" gold number isn't accurate).

Japan's approaching disaster and the move by it's elderly toward gold will be the factor that breaks the cabal. Mrs. Watanabe has simply had enough of empty LDP promises, pervasive corruption and the steady loss of yen value. They yen will resume all after April 1, 2002 and gold demand will rise like the tide. It is this demand and not the NY price that we all should be watching.

Buy the dips. There is a zero chance of $275. gold

GraefinMale Grump Syndrome:#7160003/14/02; 13:06:37

hmmmmm.....And I always thought "Male Grump Syndrome" was another man-associated disease commonly referred to as "PRH!"
Knallgoldsector and the US Gold (that was) #7160103/14/02; 13:48:37

"..(CFS(GAAP) debit entries reveal that the 8,000 tonne "official" gold number isn't accurate).."


BoilermakerIsaiah's Job by Albert Nock; The Remnant#7160203/14/02; 13:54:46

For those of you who have not read this article written in 1962 its well worth the time.

"What do we mean by the masses, and what by the Remnant?
As the word "masses" is commonly used, it suggests agglomerations of poor and underprivileged people, laboring people, proletarians. But it means nothing like that; it means simply the majority. The mass-man is one who has neither the force of intellect to apprehend the principles issuing in what we know as the humane life, nor the force of character to adhere to those principles steadily and strictly as laws of conduct; and because such people make up the great and overwhelming majority of mankind, they are called collectively "the masses". The line of differentiation between the masses and the Remnant is set invariably by quality, not by circumstance. The Remnant are those who by force of intellect are able to apprehend these principles, and by force of character are able, at least measurably, to cleave to them. The masses are those who are unable to do either..............

It may be thought, then, that while taking care of the Remnant is no doubt a good job, it is not an especially interesting job because it is as a rule so poorly paid. I have my doubts about this. There are other compensations to be got out of a job besides money and notoriety, and some of them seem substantial enough to be attractive. Many jobs which do not pay well are yet profoundly interesting, as, for instance, the job of research student in the sciences is said to be; and the job of looking after the Remnant seems to me, as I have surveyed it for many years from my seat in the grandstand, to be as interesting as any that can be found in the world.
What chiefly makes it so, I think, is that in any given society the Remnant are always so largely an unknown quantity. You do not know, and will never know, more than 2 things about them. You can be sure of those-dead sure -- but you will never be able to make even a respectable guess at anything else. You do not know, and will never know, who the Remnant are, nor what they are doing or will do. 2 things you do know, and no more: First, that they exist; second, that they will find you. Except for these 2 certainties, working for the Remnant means working in impenetrable darkness; and this, I should say, is just the condition calculated most effectively to pique the interest of any prophet who is properly gifted with the imagination, insight and intellectual curiosity necessary to a successful pursuit of his trade. "
I consider this forum to be an important meeting place for today's "Remnant" and the postings of A/FOA and other extremely astute contributors to be those of our "Prophets". The internet makes it possible to assemble tiny Remnants such as ours for the exchange of ideas and learning and will no doubt speed the day of reckoning for the masses and their hucksters.

PizzSector#7160303/14/02; 14:03:42

Agree 100%, but the auto retailers are small potatoes - CarMax, Lithia, Autonation, etc.

Now, I did a little more research, and it seems that big money is moving into mortgage backed and asset backed securities instead of treasuries and corporates - since the latter are backed by full faith (air) and earnings (whatever they may be - but more air).

Public auto retailers have access to asset backed markets where private dealers don't. If they can finance their sales, they will do vary well and since they are public they can sell their paper direct into the markets. Private dealers must go thru banks - not enough volume.

It's now appearing that (to answer my own question earlier) the markets may think that these retailers will do OK in a crashing bond/dollar financial asset senario since there is good demand for asset backed (auto loan)paper.

Ford, GM, Chrysler issue their own bonds to finance their retail auto loan portfolio and these corporate bonds carry all their issuer's baggage.

Under this senario, big money may just be heading for anything tangible. That means inflation - big inflation. Auto's depreciate, but if inflation pushes up the the value faster than the product depreciates . . . .Argentina here we come???

Anyway, enough speculation, and when I'm in doubt, I buy physical (makes me feel better) and short the banks (makes me feel even better - even if I lose at least my short sale expresses my opinion of these insitutions.)


Black BladeArthur Andersen Indicted!#7160403/14/02; 14:06:33

Just over the wires and on CNBC - Former Enron, Global Crossing, Fedex, etc. auditor Arthur Andersen has just been indicted for obstruction of justice. This is the end for AA. If they are found guilty they are prevented by law engaging in their business as they would be felons. Also, merger talks have broken off with Deloitte and Touche. It seems no one wants to touch this leper.

- Black Blade

Carl HRecent GATA Summary#7160503/14/02; 14:10:43

Can anyone point me to the recent summary of GATA's work that was posted somewhere? I can't recall where I saw it now.


Black BladeAndersen May File for Bankruptcy, Rejects Guilty#7160603/14/02; 14:15:09


Chicago, March 14 (Bloomberg) -- Arthur Andersen LLP may be headed for bankruptcy as purchase talks with rivals collapsed and the fifth-largest accounting firm told the government it won't plead guilty to obstruction of justice charges over the failure of Enron Corp.

``It's going to take a miracle for this firm to survive now,'' said Arthur Bowman, editor of Bowman's Accounting Report. Ernst & Young LLP, the fourth-largest accounting firm, and second-ranking Deloitte & Touche LLP abandoned negotiations to acquire Andersen yesterday

Black Blade: The end of one more criminal enterprise is at hand - "Check and Mate!"

BoilermakerEagleOne's male grump syndrome#7160703/14/02; 14:26:34

Enjoyed that article though I'm sure it doesn't apply to me. Today I've got the goldbug's grump syndrome due to the price decline for AU.

Did anyone get the impression that the cartel is targeting gold below $290? Seems like they let it ride higher for two or three days then try to hammer it down strongly. Must be worried about rising POO and CRB index.

SiochainGood Summary of today's action#7160803/14/02; 14:42:04

The Tiger Snarls(from MIDAS)

"Morgan Stanley bid up the April gold contract around noon, going to $292 bid. J.P. Morgan Chase immediately countered with $291.50 offered. Maneuvers such are those are done deliberately by big players to intimidate other would-be buyers. One might compare it to a tiger snarling if someone came in the vicinity, while it was devouring a meal. Don't even think about it is the message. This the sort of tactic The Gold Cartel has been using for years. In a bigger picture sense, it is also similar to what The Bank of England did with their gold sales. The intent is not to maximize gain, but to take action to bash down the gold price as much as possible and send a signal to gold investors to stay away.

The funds were big sellers this morning in gold with Goldman Sachs stepping up as the silver basher. John Brimelow noted the early gold volume was HUGE, 15,000 contracts – as much as all the volume yesterday. It dried up when physical gold pricing out of India stopped the decline above $290.

Talk about managing a market. Gold closed out 1997, 1998, and 1999 at exactly $289 per ounce. With all this has gone on since and is going on now, gold is only $1.50 away from that rigged number. Can there still be unbelievers out there?

The John Brimelow report:

Indian ex duty premiums: AM $5.33, PM $4.60, with world gold at $292.20 and $293. Above legal import point. It appears India decided to accept gold over $290, which means the leaders of the aggressive bear raid in NY this morning are likely to be disappointed.

The Japanese public was evidently disappointed, or at any rate uninspired, by the yen's 80bp rise in Tokyo this morning combined with the firmness of the $294/5 ceiling of the past few days. Commentary is divided as to whether they sold - Nihon Unicon gives pre eminence to "hedging sales by big trading houses" (ie arbitrage) and open interest only fell by 29,000 ozs, but they clearly did not buy much: volume was only 21,700 Comex equivalent (NY traded 15,867 yesterday).

There is also something of a shortage of vulture delicacies from Japan today. Two significant firms appear to have intimidated their banks into favourable restructurings. Reuters carries a story of a report by the research firm of Teikoku Databank, suggesting that bankruptcies this year will exceed the record of '84/5, and that public company bankruptcies are especially severe:

"In each of the first two months of 2002, a post-war high of four listed companies went bankrupt, something that had never happened until November 2001" The point is that defaults create problems for banks, and further alarm the public. Mitsui NY observes that the appearance of an account of Japan's gold buying in the NY Times could be construed as negative by contrarians: it could also be a sign of how deep rooted and big this development is. Click on:


From The King Report:
While today's gold trouncing by the cabal is most grating, take heart. The crooks are in big trouble. As of 2:45 central U.S. time:

*Bonds have tanked once again. The June futures contract just traded 97.31 and is reflecting much higher long-term interest rate down the road and much higher inflation.

*The dollar looks toppier and toppier. It was last seen at 117.79, down .67.

*The CRB is 203.21 and about to go into new high ground. The commodity move higher is very broad based.

*The gold shares are steady with the XAU up .34 on the day. Investors want in.

The gold price explosion cannot be that far off!

nickel62Arthur Anderson#7160903/14/02; 15:03:10

Couldn't of happened to a nicer bunch. I only hope that the rest of the crowd is soon to follow.
SiochainArthur Anderson#7161003/14/02; 15:38:32

Certainly well warranted...though I fear that Anderson is the chosen sacrificial lamb used to assuage the American public...See,,,Look what we did...Put our house in order...all's well with the world!!!!

The JPMs and C etc still need to be exposed much more than has been addressed in the media if the real villains are to begin to be brought to justice

slingshotKing of Grump#7161103/14/02; 15:40:53

No two ways about it!

But I have the cure for it. Its Spring Gobbler Season! Boss let me have a few days off. Who says Bosses are all bad?
So I'm headed to the woods.My Spirit lifted.
You'al have a great weekend.

Slingshot---------------<> Gobble, Gobble

sector@Knallgold...More on the GAAP version og the Treasury's Gold#7161203/14/02; 16:07:38

Turk and Hepburn have discovered the GAAP Consolidated Financial Report for the United States that reveals a $20 Billion debit for "Gold and Foreign Currency" in the 2000 Report.

This book entry therefore represents a variance from the oft-quoted figure for the gold reserves of the US. The amount $20 Billion matches nicely the 1,700 tonnes that the writer discovered was redesignated from "Gold Bullion Reserve" to "Custodial Gold".

Only under the GAAP constraints has the government moved closer to the truth of its gold holdings. Moreover, even this report still falls short of compliance with GAAP requirements. One must specify liabilities with greater precision than "Gold and Foreign Currency" for the same reason that a client cannot lump real estate holdings in the same category with livestock.

John Doe@Pizz#7161303/14/02; 17:57:55

Sometimes, the price rise in a stock is not always a purely economic artifact. A buyout could be in the cards, even across a whole (though tiny) sector.

Here's a thought. Suppose the manufacturers or the manufacturers' lenders anticipate a new and used auto supply glut, certainly not an unreasonable supposition at this point in the cycle. Under free market economics, this would require either a collapse in new production or a general collapse in vehicle prices, or both. None of these will be "acceptable" to either the manufacturers or their bankers. What would be some possible means to mitigate the effects of said glut? Unfortunately, one is best served these days, not by thinking like a manufacturer, retailer, or (laughably) economist, but as a banker/lender:

1) Restructure the industry so that supply equals demand - this will take years, plus lots of layoffs, write-offs, debt defaults, falling stock prices, no options compensation for CEOs, and maybe even bank failures.

2) Rapidly devalue the $USD so that domestic competitors are more competitive - this is easily in the cards, but the "rapid" part will instead probably happen over years in a series of steps.

3) Pump up demand so that every working couple owns two or more late model vehicles - done, done, and done, perhaps to the point of exhaustion.

4) Buy up all the independent auto retailers in order to at least partially rig new and aftermarket auto prices. Everyone "wins" (except the free market, once again) - fewer debt defaults (in the short to intermediate term), inventory held continues to adequately collateralize loans, existing cars loans are honored, new sales can more readily compete with used, etc. At this point, even sacrificing some sales at higher prices will be more than offset by maintaining the value of the installed base of autos. After all, no matter the price of the vehicle, some lender somewhere will be more than willing to extend a loan at easy terms and help keep the seemingly endless dollar expansion going for another day.

darkhorsemisc musings#7161403/14/02; 18:14:09

slingshot: ya gotta learn how to drawl,'s y'all, not you'al

Boilermaker: it's not been so far in the distant past that "they" could hammer gold down any/every day. Seems to me that it's a major step forward for us good guys that it takes them 2-3 days to "recoup" after a day of hammering that still doesn't do that much harm!

And as far as Arthur Anderson goes, it seems to me it raises the fear factor at least one notch for the rest of the business was bad enough that some were getting caught with their hands in the cookie jar after the Enron/AA exposure, but now the DOJ has thrown down the gauntlet. Me thinks there just might be a whole lot more "confessin" done before the end of next quarter.

Black BladeNatural Gas Withdrawal Rates Double#7161503/14/02; 19:40:31

The American Gas Association reported Wednesday 140 bcf of natural gas was withdrawn from US underground storage last week, compared with withdrawals of 132 bcf the previous week and 74 bcf during the same period a year ago. Robert Morris of Salomon Smith Barney Inc. is still projecting a 2% decline in US gas production this year, despite the start up of several deepwater projects. If not for an expected increase in deepwater gas, Morris said, total US gas production would drop 3%. Over the long run, he said, US gas market fundamentals remain tight, reviving interest in alternative supplies such as LNG and stranded gas reserves in the Arctic and offshore Nova Scotia.

The withdrawal of Natural Gas has nearly doubled (again)over last year as it has for the last several weeks (and this is a warm winter). It appears that the NG storage overhang is disappearing at a very rapid rate. Meanwhile exploration and production is falling fast as more and more drill rigs are withdrawn from NG fields. Also decline rates are especially high in many areas. The CBM and other nonconventional fields have decline rates that appear to be accelerating in some fields as many mature wells are depleted. Increases in exploration and subsequent production are not likely until late spring 2003. But by then we will likely be experiencing "California Energy Crisis - Part II".

Meanwhile the oil situation is getting very "Interesting" as the Wall Street pimps and Media Trolls tout a rebounding economy. If that is true then the market must be anticipating the economy resurgence. Therefore the lack of increases in OPEC and Non-OPEC oil production will result in higher prices. That is unless the investing public wakes up to reality as corporate earnings fail to materialize and crushing corporate and consumer debt become impossible to ignore. The rising costs of energy will cap any economic recovery as it is one cost that sink directly to the bottom line. Note that the FED will probably raise rates this June according to a former FED Governor.

The economic situation does not really look all that rosy when one digs into the corporate reports and gets past the bogus Pro Forma, operating earnings, and other meaningless drivel, then the economic situation looks especially dire. In a word - "GRIM" Meanwhile - Get out of debt, get Gold and Silver portfolio insurance, get enough cash on hand more several months expenses, and get a nonperishable food and basic goods storage program started.

- Black Blade

TrapperTo the board#7161603/14/02; 19:44:40

Does anyone have a transcript of Jimmy Rodgers from his appearence on Cavuto today? I was walking in the room and only caught a moment of the show. From what i did see Jimmy was very up on CRB in general. He made remarks if favor of grains and thhings of that nature. Cavuto asked him what he thought of gold. He said it should go up but the centeral banks have too to sell and are too willing to sell it.
This is a poor report I hope someone saw more of the show as I like ole Jimmy's calls and would like to hear a good report. Live small.

Canuck@ sector#7161703/14/02; 19:47:12

Just logged on and saw your 71612. I'm going to scan through the day and catch this "the 1700 tonne US gold loss has been verified" story.

First question, is this real and if so, why is gold not up $100 as this revelation is of the same magnitude of the W.A., probably more.

The US has lost 20% (1700/8200) of its gold?

CanuckQuote of the day#7161803/14/02; 20:01:19

"Anderson is the chosen sacrificial lamb used to assuage the American public...See,,,Look what we did...Put our house in order...all's well with the world!!!!"

I hope Black Blade saw this one. Here's the deal my friend, AA is taking the hit, Enron and the scaly Wall Street pimps are going to get away with this. The US government is in the process of sweeping the Enron debacle 'under the carpet'. Do you see it. The drag-it-out process is working, AA takes the hit, the crooks cover the tracks and as time marching on it will numb over.

Believe it!

What have you heard of anthrax in the last month? Oh and by the way, who were the delinquents, who is in court? I think I heard something but I forget.

Golden BearTrapper (msg#: 71616)#7161903/14/02; 20:21:04

Hello Trapper,

Jimmy Rogers has been on Cavuto quite a bit over the last 2 months, and every time, he says to buy raw commodities - cotton, oats, etc. Basically he is saying that the financial system is a ticking time bomb, and when it blows, people will only chase after basic materials... as for gold, he is keeping his cards close to his chest.

Quite amusing in one interview, Cavuto spoke his usual drivel about Enronitis being over, and that it would be good times from now on...

Rogers' response: "Are you out of your mind?!"


Golden BearPeso hits new low#7162003/14/02; 20:36:34

Argentina sliding further down the slippery slope...

Is this a view of the future on a global scale?

Carl HCanuck: Re 1700 tons#7162103/14/02; 22:29:18

This news has been out for a while now. Yes, it appears to be real. As for why it didn't cause a price spike -- I do not think that it was presented all that clearly and concisely and it was basically proof of what there was already significant evidence of.

One interesting question is why was the coin melt gold at West Point encumbered? Why not the good delivery bars stored elsewhere? Wouldn't the Gernmans have wanted good delivery bars as colateral? It seems that if there were good delivery bars available, they would have been encumbered first. I presume they are not already encumbered, or they would have shown up in the GAAP report. Hence, I suspect they are simply not there.

Black BladeIMF says current US equities vulnerable to correction on poor earnings#716223/15/02; 00:30:22


WASHINGTON (AFX) - US equity markets are currently pricing in a sharp rebound in corporate profits that is out of line with consensus expectations, leaving the market vulnerable to a correction, the IMF said. The markets "assume a sharp rebound (but) if that was not forthcoming ... that could result, could potentially result, in a backdrop in equity markets," said Gerd Haeusler, Director of the IMF capital markets department, in a press briefing.

"If this turnaround does not materialise, there is a risk of a market correction," the IMF said in the report. If earnings do not validate these market expectations, "the likely adjustment in asset prices and deterioration in credit quality could erode the still fragile business and consumer confidence," the report said. This is particularly a risk at a time of record high household and corporate debt levels in the US, Japan, and Europe, Haeusler said.

Black Blade: Of course we have discussed that here for several months even though the IMF is just now making this "Block Buster" revelation. The markets are so grossly overvalued that there is absolutely no other conclusion possible. The markets have priced in unrealistic expectations of extreme robust growth and earnings. This next quarters' earnings reports are going to be "interesting". I suspect that we will hear more of "Pro Forma" earnings, "operating earnings" and "one-time write offs", etc. and how corporate earnings have met or exceeded vastly lowered earnings estimates in an attempt to confuse dim investors. Gold and Silver portfolio insurance is in order.

Golden Dreams All!

BelgianPOG : Technical Interpretation in Falsified Markets !?#7162303/15/02; 02:46:54

POG should find its bottom within the next 20 trading-days.
A bottom situated between the present 291$ and 280$.
Interest rates (rising sharply) have come in sync with POG after sept.11 and nov.2001 abnormal decline (IR-bottom). POG seems to move within the MACD-waves with minimum 3 and maximum 6 months bottom to bottom cycles. POO (heading for + 25$) and
rising USTB-10yrs-% are putting upwards pressure on POG.
Note that the LBMA-volume from jan. into feb. increased by 23% as capping maneuver for POG (600 tonnes paper-gold per day). Euro / dollar exchange rate is pushing against resistance-line and dollar-weakness (against euro) is eminent ?

Impossible to gamble on POG low being 291$ or 280$. But as someone (?) mentioned here : 270$ seems out of the question!?
XAU (HUI) MACD bottom on 20nov'01, brings us 4 months to date. Very Low volumes, indicate (confirm) consolidation pattern with a possibility of the lows already in (corresponding with POG 291$) ? To get POG below 291$ and directing it towards the 280$, we need to see a break in surging interest rates. Not very likely with POO steaming to settle at around 25$ as average for the 21$/28$ range.

NIA and remember we are trying to make some conclusions within falsified markets. Long Term Momentum indicators for POG are still pointing firmly upwards and POG holding above 290$ for another maximum of 20 trading days...makes it a nice opportunity for justified further accumulation. Physical in Possession that is. 290$ >>> 350$ is a plus 20% reward with zero risk ! Compare with bond yealds of 5,5% and you can sit it out for 3 years, if necessary.

Curious if Euroland comes up with substance at Barcelona summit ?

WAC (Wide Awake Club)Sterling extends slide against euro- Prepare For Entry#7162403/15/02; 03:04:18

LONDON (Reuters) - Sterling has been knocked to its lowest against the euro in over two months after the single currency took advantage of strong German retail sales data to extend gains across the board.
JonMaqhendra's prediction:today's the day EOM#716253/15/02; 04:37:42

The Invisible Handeom?#716263/15/02; 04:57:40

What's eom? Is the the PassOver-Eastern crash?
JonEOM#716273/15/02; 05:31:26

EOM = end of message. Permits one to bypass posting a message in this area. Doesn't seem to work here,however, because msg requires text in msg area on this site. By the way, I misspelled Mahendra. According to him, gold will escalate TODAY. Silver will follow shortly. His career may be over today!
BoilermakerBeware the Ides of March#716283/15/02; 06:29:45

Things have gotten much too predictable lately.
Hopefully we will see something "interesting" today, the Ides of March. Things are starting out quietly enough but Fridays are a time for making decisions on how to weather the weekend. I've got my lifeboat in order and ready to launch, let the storm rage.

RobotGuyEconomic News?#716293/15/02; 07:40:02

I am so tired of this garbage. Phrases like "Investors are timid in pre-open activity as they gird for economic news." just boggle my mind.
One day the world economy is just peachy, and the next we're worried it might not be. Why don't we all just accept the fact that the market has to be lowered in value and roll with the punches.
I hate this slow drawing out process. Let's have hard times for a year, get back to original values, and start over. I need to know that the money I've put away for my retirement is going to grow, not sit stagnant for years to come. (Don't forget, I'm Canadian, Gold doesn't qualify as a retirement savings come tax-time)
Sure, this may have been the lightest recession we've ever had, but why make it last for five years? I'd rather have one really bad year, and five good years instead of six mediochre years.
Waiting waiting waiting......... keep those doggies waiting.................rawhide.
That whole instant gratification thing affects us all I guess. We'll keep beating a dead horse as long as we can get another two feet out of it.
Gold is my personal investment outside of retirement savings, but a twenty dollar hike isn't going to make me sell.
I'll be better off when markets are rolling again, and manufacturing processes need to be improved, and there aren't enough technically skilled people to fill the positions. Sure, I program robots, but right now everything is still very slow. I'm used to being able to pick and choose what job I want.


Tired of humdrum.

AndúrilRobotGuy, you should count blessings. Instead, may you live to experience INTERESTING times!#716303/15/02; 07:54:55

If you let your government tax incentives on retirement programs dictate your action, then you let them lead you by the hand down the path of their choosing. More independence of thought and action is warranted. Add to your gold in the form that wisdom calls for.
Buena Feramblings#716313/15/02; 07:56:45

Moses pleaded with Pharaoh, "let my people go"!

Pharaoh hardened his heart and refused until the judgements extracted Pharaoh's plea for Moses and Co. to leave (and please take all our gold with you!(read the story, its amazing))

GATA pleads with the US admin., "let the markets go free"!

The power-brokers have hardened their hearts .......

I sense intervention from on high is nigh (James 5:1-8, Rev. 17-18, Amos 8)

Keep accumulating the gold they through to us and get ready to move.

To quote a wise man, "There is nothing NEW under the sun!"

RobotGuyAnduril (I can't get that little accent thingy over the u sorry)#716323/15/02; 08:23:48

When I am reimbursed by my savings with monies taken from me through means of taxation, I have another lot that I might allocate to P.M. It only seems more reasonable to me this way. Thank you for your consideration. Is anyone here really that absolutely positive, or are we all really just dreamers of the same fantasy? I am happy to own gold, I don't rely on it as a form of stability. If gold were 5 cents an ounce and more abundant than aluminum I would still buy it.
RobotGuyMy prophesy#716333/15/02; 08:51:07

I would like to submit my prophesy. I prophesize that Mahendra Sharma book sales are going to drop off somewhat.


USAGOLD Market CommentaryMr. Yen Says Japan on Skids, Gold Drifts, Looking for Direction#716343/15/02; 08:57:56

Available online to all clientele and prospective clientele, NEWS & VIEWS Forecasts, Commentary & Analysis on the Economy and Precious Metals has again been updated.

Read the full commentary and related information here. (access codes required)

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If you would like to take full advantage of these insights and perspectives, made available from a leader with three decades of experience in the precious metals markets, then we invite you to request your personal access codes for the online News & Views. With your request, you will also receive a hard-copy introductory information packet on gold ownership which details the products and services offered by USAGOLD / Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

"Looking beyond these short-term speculative movements, we remain well disposed towards gold and take heart from the continued and widespread investor interest in bullion." UBS/Warburg

News & Views in full is posted at the Daily Market Report page for those would like to see what goes on at our restricted access page -- News & Views: Forecasts, Commentary & Analysis on the Economy and Precious Metals

A link is posted to

How Americans Lost Their Right To Own Gold And Became Criminals in the Process
(HM Holzer / The Committee for Monetary Research and Education, 1981. Special thanks to Elizabeth Currier.)
"How You Can Survive a Potential Gold Confiscation"

Mr. Holzer was Ayn Rand's attorney.


Short & Sweet. . . . . . . . . . . . . . . . . ARGENTINA IS BLAMING it economic crisis on the International Monetary Fund. "For 12 years the same (IMF) staff has been wrong about Argentina,'' Duhalde said in a telephone interview broadcast on Mexican radio. "They will look for scapegoats; say it is the (provincial) governors; that it is corruption. But the fact is these were wrong (IMF-endorsed) economic policies that landed us in this situation.'' . . . . . . . . . .GE CAPITAL IS IN THE MARKET for the largest-ever U.S. dollar-denominated corporate bond sale -- $11 billion. Market advantage or cry for help. . . . . . . . ."[SWISS-BASED HEDGE FUND OPERATOR] FELIX ZULAUF. . . believes that governments will compensate for a low savings rate and a declining stock market in part by going deep into deficit. He thinks governments will go into deficits of 3 percent and 4 percent of GNP. Central banks all over the world will not be able to stay a stable course. If the economies are weak, the central banks will not limit money supply to 2 percent growth. They will go to 10 percent or 20 percent or 30 percent growth, whatever it takes to support the system. And that will mean a devaluation of paper currencies. Investors will then turn to gold, as they are already doing in Japan." (Source: International Herald Tribune) . . . . . . . . . . . .


We invite to go to the links. We would also be happy to send information packet to those interested in looking into portfolio insurance.

"These are treacherous times for investors." The Bank Credit Analyst

TrapperGolden Bear#716353/15/02; 09:04:44

Thanks for the reply. I sure wish I could have seen Jimmy tell Neil " are you out of your mind ". Rogers used to be on CNBC alot in the past I have not seen hin there in the past couple of years, I think his honesty got him the boot. Rogers is right about gold the bankers and the cabal still have the hammer. I'm sure we will all get rich on our gold but I don't want to have to use my gains to pay for my place in the bob and drool room at the Shaddy Lane rest home for the aged. Live small.

RobotGuyQuiet in here today, everyone on vacation?#716363/15/02; 10:28:01

GraefinActually, just waiting for somebody else to speak up.#716373/15/02; 10:46:53

RobotGuySorry, I guess I should learn to keep quiet.#716383/15/02; 10:49:37

GraefinDidn't mean it that away!#716393/15/02; 10:55:21

Meant it as in somebody else other than myself!
GraefinBOO!#716403/15/02; 10:56:33

Mr GreshamSir Belgian#716413/15/02; 10:58:23

"290$ >>> 350$ is a plus 20% reward with zero risk ! Compare with bond yields of 5,5% and you can sit it out for 3 years, if necessary."

Thanks for the TA. This basic Risk/Reward seems like the only summary anyone needs to look at going forward. That's how I see it, as scared as I feel sometimes, from our past batterings.

But really, it's mostly been a suspension in time (I hear your frustration RobotGuy!), rather than a battering in price, if you're a recent arrival.

One good thing about manipulation: It puts a FLOOR under prices once the deed is done, and catching the rebound is only a question of time.

I guess you have to say, we are now closer to knowing if and how there is manipulation. To knowing if the paper market really is out of proportion to physical, and will fall away. We've paid for our front-row seats; let's watch the show.

The question for the rest of the world to discover is: Is this a "market" where high prices meet resistance, or, Is this a market where high prices drive shorts to cover, governments to further inflate, and knocks out all props and stops and runs them till they drop?

So many good posts, I have to let go by -- nose to the grindstone & all that...

PippinInterest Expense on Debt Outstanding#716423/15/02; 11:19:07

I found the above link (Bureau of the Public Debt Online) very interesting:

interests paid in 1988 amounted to $214'145'028'847.73
interests paid in 2001 amounted to $359'507'635'242.41

2002 looks promising also: October to January totalled $134.050.617.520.41.

What surprises me is that the progression of the debt itself does not seem to follow the same curve:

Sept 1997: $5'413'146'011'397.34
Dec 2001: $5'943'438'563'436.13

The rate seems very high also for a gov debt.

Did I mix or miss something ?

RobotGuyCanadian Debt#716433/15/02; 11:28:25

I think we put something like $10.00 CDN on our debt last year. That's only about 50 cents U.S. :)
RobotGuyBlack Blade must be away from his desk today.#716443/15/02; 11:37:08

Or he would have been all over this article.


VIENNA, March 15 — OPEC agreed on Friday to keep a cap on oil output for three months, leaving consumer nations to fret that crude prices might race out of control before the cartel eases open the taps.
THE ORGANIZATION of the Petroleum Exporting Countries is seeking to cement the price of its export basket in a $22-$28 a barrel range and wait for a global economic revival to lift crude demand.
"The price has only just entered the lower end of our band and we hope it moves higher as the economy recovers," said Venezuelan Oil Minister Alvaro Silva.
Oil prices have risen sharply in recent weeks after a fourth quarter slump, spurred higher by signs of an economic upturn and fears that the United States might target OPEC member Iraq for military action

(more to article)

A.Greenspan ---- 'Economy is picking up!'
OPEC ----------- 'Great, now we can raise oil prices!!'

RobotGuy; I guess speaking too soon can bite you in the ass.

WaveriderPippin: Mix 'n Match#716453/15/02; 11:43:20

At the above link I find the debt as:

09/28/2001 $5,807,463,412,200.06
09/30/1988 $2,602,337,712,041.16 increase of about 123%, while the interest paid increased around 68% over the same period of time. ?1997 popped into your calculation? Cheers, and thanks for the interesting link!

PippinWaverider - Ooops#716463/15/02; 11:56:58

I stand corrected - thanks.
WaveriderThe battle against blood money#716473/15/02; 12:10:57

"The merchants who throng the covered markets in old Dubai are used to all kinds of clientele. But even they may have been a little surprised to find, on one day in early March, a phalanx of Western business suits bearing down on them.

Yet stranger was the identity of those occupying the gent's tailorings: no less a personage than US Treasury Secretary Paul O'Neill, accompanied by more than 30 officials and Secret Service agents. Mr O'Neill was there to see for himself the hawala system of informal banking."

Waverider: Interesting article on money laundering and terrorist financing. Gold is NOT mentioned. My take on the previous article on the subject (NYTimes, I believe) was that US officials were miffed due to their naivity and ignorance of the tactics used in Asia to transport and trade Gold within the hawala, rather than a conscious intent to mar Gold by equating it with terrorism...then again..that could be my own naivity. Cheers!

TownCrierNotable items#716483/15/02; 12:18:11

From the report (link above):

"Apr gold on Comex opened slightly lower and was pressed down to a $289.30 low .... "There's been light fund and trade house selling. (Comex) open interest came in unchanged from yesterday, so trade houses came through and sold today," said a trader at an international bank in New York. The fact that open interest hadn't declined showed that despite a sizable price dip Thursday, speculative funds hadn't liquidated many of their long positions, spurring trade houses to try to force more liquidation before the weekend, he explained."

" interest in options had now surpassed open interest in futures contracts..."

Focusing on the last comment, while not exactly in the spirit of "Let them eat cake!", it is nevertheless tempting to spur on the derivative traders and say, "Let them trade options!" If you took notes during the extensive price-discovery offerings of two years ago, you'll know that options are pretty-near harmless, price-wise. Yet, if this trend continues, the physical metal market may all the sooner reassert itself out of necessity. What's the next stage of derivative development? Perhaps a leveraged futures contract on option premiums, or maybe an index-style contract priced simply on the level of open interest? It would all be laughable if it weren't so valid.


LimitUpDeer in the Headlights#716493/15/02; 12:36:50

I hsve a friend who is management at H/P. He expresses unhappiness watching his 401K lose half its value. He feels he won't be able to retire in 5 years as planned. With downsizing he now works 12 hour days. H/P laid off a supervisor and the position is now covered by himself and another supervisor. 12 hour days and no increase in compensation - he doesn't seem to mind. I suggested he cash out of his 401K (all H/P stock),pay the penalties and taxes and buy physical PMs. He gave me a strange look. I guess one of human natures problems is indecision. Did I give him sound advice?
Mr GreshamLimitUp: Deer#716503/15/02; 13:10:09

The thing is, that 401k was never collectible in its account-based form, to give him the "extra" five years of retirement. The demographics following early retirees in the coming 30 years or so will force many of them back to work, as the accounts would have to shrink in value, and not enough younger people willing/available to support him.

You gave him the only advice that would allow him to lock in its present market price, and he chooses to stay with the "safety" of the herd. Works (sort of) for gazelle on the Serengeti, but not for individual Americans at this time in their mass history. (And "America" is nothing if not a mass mental construct.)

As someone once said here, "Society is a fiction. There are only individuals."

Golden BearRobotGuy (msg#: 71629) Economic News? #716513/15/02; 14:31:46

Greetings RobotGuy,

I sympathize with and understand your frustrations. I watched the bull market climb from 1996 onwards knowing totally that stocks were overvalued and that all the economic statistics that stocks were valued on, were massaged. I waited for the Bear to strike day after day and reeled to see each day the S&P and Nasdaq romp upwards.

Having greater understanding of the way the world works (humbled by some poor investment decisions that went horribly wrong), I now see that for the individual it is critical to build a solid foundation that cannot break under any circumstances - a Golden one.

It is also important to resist those impulses that demand action, as they can lead to poor investment decisions.

Regarding work, the way the world is rapidly evolving, you must prepare mentally for rapid change whilst not yearning for action. Personally, I changed profession out of necessity 4 years ago and it was painfull. I am in IT at the moment which gives me some cushion regarding the future, but I do not want to become complacent lying on that cushion. So I am preparing and training again - Black Blade's repeated advice regarding preparations for a financial nuclear winter is wise, and it must be extended: to learn new skills that can be used in any future marketplace. For me, it means learning how to trade. It may sound ridiculous, but this is my line of thought. Backed by a Golden cushion, I am free to use whatever fiat currency will exist in the future (Euro?) to trade, and what futures contracts will always exist even in a financial meltdown? - Commodities!

It doesn't guarantee that I will be successful, but I see it as another skill that can be learned and applied.

As for tax induced financial planning, Anduril's advice is extremely wise - do not take it lightly. For in all our affairs, our personal sovereignty is fundamental, and therefore, all future decisions should be considered under the revealing light of "how will this affect my personal freedom". Just ask an Argentinian about freedom...


Black BladeBull run may wane if stock-propping fails By TOSHIHIKO MATSUNO#716523/15/02; 14:38:47


A buying frenzy sent Tokyo share prices forging ahead in recent weeks, lifting the key Nikkei average back above the 11,000 level. The market benchmark leaped roughly 20 percent in just a couple of weeks, a development rarely seen in recent years.The Nikkei average of 225 leading stocks soared 638.22 points to end at 11,450.22 on March 4 and has since repeatedly reclaimed the 12,000 level on an intraday basis, a level unseen since early August.

Tightened government controls on short selling set off a flurry of activity to cover short positions on the market late last month. Investors who had sold borrowed shares in anticipation of buying them back at a lower price were forced to unwind their short positions at losses. Often seen in the past, however, government efforts to keep share prices afloat artificially carry big risks.

After firms close their books on the year ending on March 31, Tokyo shares may face fresh selling pressure. It is feared that the administration of Prime Minister Junichiro Koizumi will now drag its feet on structural reforms, leaving crucially weak spots in the financial system unaddressed -- a scenario certainly most bearish for the Tokyo market.

The Government Pension Investment Fund has announced that it will earmark 1.7 trillion yen for investment in domestic stocks in fiscal 2002, up from 1 trillion yen for the current fiscal year.

Black Blade: It sounds as if I wrote this article. We have discussed these exact elements in the Japanese markets here and yet the conclusions in this article are the same. I don't think that the Japanese government will fool many for long. These artificial measures will not lead to a sustained Japanese Bull Market. This house of cards too will fall - and fall hard. Gold sales will likely surge higher after the April Fools Day Surprise.

BTW, notice how the US market indices have moved higher on very light volume lately? This does not look like a major Bull Market Trend at all.

Black BladeStill Grossly Overvalued....#716533/15/02; 14:47:22


We have been told in recent months that valuations are back to normal, that stocks represent great investments at these levels. We would suppose that there are values in almost any environment, but it seems to us that fair valuations for most of the household names are still far from the current reality. For instance? World-wide sales of all semiconductors were $139 billion last year yet Intel has a market capitalization of $221 billion. Are we missing something? Total industry world-wide sales of semi-equipment last year were $28 billion, yet Applied Materials market cap is $41 billion.

Black Blade: One big - DITTO! These valuations on the US markets are unsustainable unless we expect dynamic earnings growth for several years. Only in an analysts' wildest dreams!

JCTexBuenaFe/ ramblings#716543/15/02; 14:51:57

As I recall, it didn't work out too well for Pharoah and the boys. Probably won't this time, either; but it may take a little while longer.

My personal opinion is that FOA/ANOTHER tagged it: as long as paper prices physical, we ain't gonna go nowhere. Greenspan can just print "n cover, print 'n cover...

It's a rambling day.

PippinLBMA members - Enron Metals Ltd...#716553/15/02; 14:55:31,2231,5536,00.html

I just accessed the site of the LBMA and saw that Enron Metals was mentionned in the list of members.
Another web search led me to the following interesting article, which I decided to share with you.
My apologies if it has already been reported and discussed in this forum.


LME disciplines Enron Metals, accepts settlememt
By Reuters
Issue Date: Jul 17 2001

By Reuters

LONDON, July 17 (Reuters) - The London Metal Exchange (LME) said on Tuesday it had taken disciplinary action against Enron Metals Ltd (EML) for breaches of its regulations.

In a notice, the LME said EML had persistently failed to deliver warrants in time and failed to input trades into the matching system.

"Enron Metals Ltd submitted an offer of settlement to the LME, in which it admitted the charge and agreed to pay a fine of 190,000 pounds," the Exchange said.

The LME added that EML had cooperated throughout the dsiciplinary process so its enforcement committee had agreed to ratify the settlement.

EML is one of the LME's 12 ring-dealing members, which trade on the exchange's open-outcry floor. Its metals trading operation, the former MG Plc, is a unit of U.S.-based energy giant Enron Corp <ENE.N>. Enron acqired MG in May 2000.


The LME said that between August 1999 and February 2001 EML had persistently failed to ensure that warrants needed to settle its exchange contracts were delivered to the London Clearing House (LCH) by 1100 local.

A warrant is similar to a bearer bond, in that it denotes ownership of LME-registered metal stored in recognised warehouses.

These failures to deliver on time jeopardised confidence in the LME's delivery system, and the exchange's committee concluded that EML's systems for ensuring compliance with rules and regulations had been seriously inadequate.

Also, between May 2000 and February 2001, EML persistently failed to input trades into the LME's matching system, where trades are allocated by the clearing house.

Concerning both the inputting errors and the late deliveries of warrants, EML frequently provided explanations that were inadequate. "The LME recognizes that since EML became part of the Enron Group, greater resources have been devoted to improving systems and procedures. EML has also sought to reassure the LME that it is commited to compliance with the LME rules and regulations," the LME added.


Black BladeAnother sucker rally goes up in smoke#716563/15/02; 14:57:28

Commentary: Japan is no closer to solving its problems By Paul Erdman,


SAN FRANCISCO (CBS.MW) -- This time it was Merrill Lynch that launched yet another sucker rally in Japan. The reasoning behind their recommendation that you move your money into Tokyo: the worst is over over there, while over here we continue to face an uncertain future.

This is news to the Japanese, to put it mildly, but welcome news in that canny investors there could unload some of their cats and dogs last week on Americans dumb enough to believe this myth.

What was perhaps even more disconcerting than the misinformation put out by Merrill, was how many financial commentators in the US jumped on the Japanese bandwagon, heralding the leap of the Nikkei 225 over the 12,000 mark and the surge of the yen to 126 against the dollar, as only mild precursors of better news to come. Wrong again. Since then both the Nikkei and the yen have once again begun to head south.

Black Blade: A very good synopsis of the Japanese markets (especially the dumb Americans getting fleeced).

BTW, Arthur Andersen is going out of business. Sara Lee and Abbot LAbs fired this criminal enterprise today, and the list keeps growing.

Sore legs - nice day and a few hours cross-country skiing (feels good). Now off to the gym for a couple of hours.

Carl HInteresting Observation#716573/15/02; 14:58:51

This week we hired a couple guys from a temp agency to dig ditches for a project in our yard. I very surprised by their very good work ethic. Over the past few years, it has been really hard to find people that would get in and work hard on a job. These guys have been showing up at 7AM and working at a remarkable pace in rainy cold weather. So I asked them what their stories were, one of them was a software test engineer laid off from Adobe, the other used to manufacture contact lenses, but his job was moved to where there is cheaper labor. I found this very sobering.

Incidentally, it seems that they don't believe all the government statistics either.

Chris PowellNo, GATA hasn't gone Communist or anti-American#716583/15/02; 15:14:20

An explanation of GATA's Chinese initiative.

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WaveriderMerrill Lynch closes 19 branches in Japan#716593/15/02; 15:24:41

"In Japan, a unit of the US investment bank Merrill Lynch has closed 19 branches of its retail line, laying off 1,200 staff.

Observers say Merrill Lynch's corporate shake-up followed the retreat of several large foreign brokerages from some share dealing operations in Japan, which has been hit by a severe decline in the local stock market and a deepening recession."

Waverider: Interesting...Merrill Lynch launches a sucker rally in Japan while simultaneously closing shop! Go figure...or is there a method to the madness? Cheers!

Belgian@ Sir Gresham....#716603/15/02; 15:39:11

One more reflexion with Robotguy's outcry in the background : I WANT SOMETHING TO HAPPEN, ANYTHING !
Voila, it is exactly this "something to happen" that must be avoided AT ALL COST, ANY COST !! For the one and simple reason that if something happens...IT WILL BE DISASTROUS !
Each and every disaster has the same dynamics : A prelude with the stealth accumulation of the destructive, waiting to gain critical mass for explosion. Time needed for the accumulation is proportionate to the disaster. Much time is/was needed for the inevitable * change-inducing *, monetary/financial collapse. This time consuming prelude with ever smaller amounts of Gold available at absurd prices. Time for trading PHYSICAL GOLD with a guarantee never to remain stucked (holding) with worthless stuff !
Crude Oil (POO) is in a definite starting-process (oscillation) of massive dollar devaluation !!! More dollar-paper for that same old barril of crude. Remember the swing from 10$ to 34$ (1999 > 2001) without any particular reason ! A simple testcase for sampling the resistances and reactions (remember the massive strikes and US-reserves mobilisations). Future Hyperinflation is a CERTAINTY ! It will happen and it will be tsunamical.

Haven't found a more elegant and precious thing like Physical Gold in Possession as ultimate selfdefense for the coming disaster. estate are in no way substitutes for the drama in the make. Tsunamis have no mercy and are very destructive. Currency collapses, massive unemployment, stockmarket crashes, rising interest rates, defaults and a shortage of Physical Gold for broad distribution ! It happened before ! It is happening in many small pockets on the globe (long list) ! The US and the dollar are the last dominos. Don't let it happen prematurely or the chronic detoriation gets extra extension time ! POG's BEHAVIOR is the clue ! Palladium, Platinum, crude oil and many other exceptions are indicative for what will finally happen with Gold's RE-VALUATION at the day of reckoning.

RockBlack blade stays physical#716613/15/02; 16:31:20

hey black blade you sound like your in pretty good shape there big guy. cross country skiing with a back up of a few hours in the gym. sounds like a nice routein. as a personal trainer myself i do believe in a good balance between mind and body. i did 2 1/2 hours at the health club myself today. i know i'll sleep good tonight! have a great weekend everybody. and do know i enjoy reading all the posts on a daily basis and i have learned much from many of the locals that attend these meetings. thanks again!
Cavan ManJC TEX/Buena Fe#716623/15/02; 17:56:44

RE: The "essayist(s)" {only "ET" would comprehend)

It is all playing out now albeit slowly yet gathering steam. Not only do I recognize the markers I feel it in my bones. History can only be MADE within the confines of parameters already established (by history). Lesson: study history.

ShermagSome good tongue in cheek on Anderson from the Globe and Mail#716633/15/02; 17:58:15

"The book on Andersen"

"Who says Arthur Andersen won't get bought? Sure, the firm may be a massive liability, but only in the real world. You take $1 of liability, see, and you turn it into an asset. Start by capitalizing a few current expenses. Follow that up with stock options, which as any accountant (or is that consultant?) knows, are free. Lower the tax rate, maximize the goodwill, write it all off, sweep the debt off the balance sheet, write down inventory, mark up profit and presto: instant net value. And if that doesn't work, start the shredder."

R PowellRobotGuy#716643/15/02; 18:11:31

Wanting something to happen

Patience, my friend, patience. It will happen but nobody knows when. I believe the conditions exist that, when it happens, it may occur suddenly. Maybe not $100/day but nonetheless, a substantial move in a brief timeframe. Quick enough to leave those not ready in the dust, looking for a pullback entry point that may or may not present itself.
Jesse Livermore explained at one point that it was not his trading that made him the big profits but his waiting. For those not familar with it, "Reminiscences of a Stock Operator" is one of the best books I've read, financial or otherwise. Livermore often refers to patience. He possessed this uncommon trait. If we are right in thinking both gold and silver to be grossly undervalued in dollar terms, then a means of long-term investment seems the correct action. Then, we wait. Such a simple plan!

PizzR Powell Robot Guy#716653/15/02; 18:38:43

Reminds me of an old joke - Two buzzards sitting in a Mesquite tree. The caption reads:

"Patience - HELL - I'm going to go out and kill something!"

May work for buzzards, but I do agree it sure doesn't with investing.

We do need to find a different angle or senario to keep us busy. we've just about beat all these horses to death. I have this nagging feeling that there is still something out there that we're missing.


Black BladePuplava Market Wrap Up#716663/15/02; 18:58:02


The concept that stocks are cheap is based on the fact that stock prices have fallen off their highs. Prices where they were two years ago when the indexes peaked. Since prices have come down, stocks must be cheap. The actual truth of the matter is that stocks are much more overvalued today than when the indexes hit their peak because earnings have fallen faster than stock prices, making stocks even more overvalued, whether it is PE or PEG multiples. Earnings have fallen sharply, and in many cases, are negative. Growth rates have also fallen off so PEG rations are much higher.

The argument that stocks are cheap just doesn't hold water. In looking at past stock market bubbles, history shows us that once major bubbles begin to deflate, it usually takes between 1 to 2 decades before they recover to their former highs. After the stock market crash of 1929, it took the Dow 25 years to surpass its former high. After reaching 1000 back in the 60's, it would take another 16 years to surpass that benchmark. In Japan, the Nikkei reached its zenith in 1989 at 38,916. Today on March 15th, nearly 13 years later, the index closed at 11,649. It has lost 70% of its value and still hasn't recovered even though it has been more than a decade. It may be another decade before the index fully recovers.

There are other issues here such as credit risks, derivatives and quality of earnings that still haven't been addressed that will continue to weigh on the markets. It also needs to be realized that trends don't remain in place forever. Markets and investments change over time. Yesterday's winners become today's losers. The next cycle that has begun still in its formative stage is the new bull market in natural resources.

Black Blade: As I have been saying for quite a long time here - these markets are grossly overvalued by any logical measure. As Puplava points out - even though the market indices have retreated and prices of shares have pulled back - stocks are even more overvalued than they were at their peaks. The reason of course is due to falling earnings. This is not an economic recovery unless it involves the lack of corporate profits (not a likely scenario). This cannot o on forever - Operating Earnings and Pro Forma accounting not withstanding. Of course fewer auditors will likely sign off on questionable numbers in light of Arthur Andersen's demise (they will be tits up shortly). I believe that we will revisit the New Depression issue before long. So I say it once more - get out of debt, get Gold and Silver portfolio insurance, get enough cash on hand to meet several months expenses, and get a nonperishable food and basic goods storage program started. At least prepare so that you can sleep well at night should the unbearable happen. In other words, prepare to survive as you would if you knew that you were to be unemployed for a year or longer. In winter it's a tough world out there for Grasshoppers.

R PowellGolden Bear (71651)#716673/15/02; 19:01:06

"to learn new skills that can be used in any future market place. For me, it means learning how to trade."

I've been attempting to do the same for many years and probably will continue until death or dementia stop me. The appeal to me is my outlook that the markets are a great puzzle to be solved, if possible. Money at risk makes it real although some would say I'm merely gambling. But actually, I want the satisfaction of knowing that I did realize the right (and profitable) conclusion given the elements of the puzzle. Having spent most of my life working in one form or another of physical labor, I'd also like the satisfaction of profiting from the expenditure of brainpower. Most of my life's earnings have come by exchanging time and physical pain for fiat. Elevating this to self-employment eliminated some aggravation and increased pay but not to the level my greed desires.
This golden trail has altered the personal trail of all who follow. I'll treasure the adventure more than whatever profit is attained but I do not depend on trading to pay the bills. I'd love to be good enough to do so. Please beware, this most intriguing game has, of necessity, many traps and great danger.
Concerning gold and silver, I guess I'm simply asking, "What the hell are we going to do for fun long after gold is fairly appraised at $XX,XXX/ounce?" If one sees life's ultimate destination as death, then it's not the arrival I covet but the journey there I'll enjoy. "What a long, strange trip it's been" And more to come!
Happy weekend to all

The StrangerR Powell#716683/15/02; 19:12:24

R Powell....I too enjoyed Livermore's book (if that's who in fact wrote it). I think I got some pretty good tips from those pages. You probably recall how he described having traded himself into insolvency a few times, but not everyone realizes that he eventually lost it all one last time and committed suicide.

In this racket, everyone wins battles now and then, but it's winning the war that counts. Sadly, for all his fame, Livermore was no great success.

Black BladeRock - Getting Physical#716693/15/02; 19:21:25

Actually I do work out a lot (2 to 3 hours per day on average) to keep up good strong lung capacity as I like to hunt and fish and I hike into some rather remote areas where the possibility of success is higher. It does feel good to get that "burn" in the muscles and even though I am an insomniac I also get a good solid rest as a reward. Also I do like my beer (too much I suppose) - most notably Negra Modelo, Anchor Porter, Moose Drool and Fat Tire. Of course I need to keep working harder as I get older to keep that "beer belly" or "spare tire" off. Every year I tend to "fatten" up on wild game and fish in the winter months. As it is I could stand to lose about 20 lbs by the time good weather arrives for some high country fly fishing. Cheers!

- Black Blade

R PowellPizz#7167003/15/02; 19:25:06

Every once in a great while I meet someone who is actually interested in listening to my reasons why silver is going to at least double in price within a short time. Not very often, but once in a while. Without facts and figures to counter, some have thought and, perhaps rightly, asked- "If you are correct in all facts and conclusions, why then is silver so cheap now and why didn't it go up years ago?" This usually leads to an explanation of leasing (increased supply) etc.
However, it always makes me wonder exactly what you mentioned, "I have this nagging feeling there is still something out there that we're missing."
Me too!

And as far as beating on those dead horses goes, how about if we short-sheet Black Blade's bed instead!
Happy weekend!

Golden BearR Powell (msg#: 71667) #7167103/15/02; 19:48:42

Greetings Rich,

thank you for cautionary words of advice. I too have learnt that trading is a most difficult and dangerous game. I therefore am dedicating much time and effort to give it the best shot possible. In the mean time, I too will work to pay the bills.

I also derive immense pleasure in working on the this great puzzle called the markets, but it also provides another angle, just as important, if not more so. As a business, you need no shop front, employees, insurance and all the other expenses that are involved in having your own business. Further, you pick up your laptop and transport this business anywhere in the world, hook up your data feed and away you go.. and if the god's are smiling on us and we are successful, why not set up in a tax haven where all the rewards are ours. If it's good enough for Soros, then it's good enough for me(not that I can trade like Soros).

It's all about freedom, and for me, this is the greatest reason to have that Golden parachute.


R PowellHello Stranger#7167203/15/02; 19:49:04

I've read "Reminiscences" many times. The first time it was the story that intrigued me. Having finished I realized another reading was necessary because the worth- knowing advice was so well blended in the story that I missed most of it the first time through. It's worth a third read just to study Lefevre's writting style which reminds me somewhat of Hemingway.
Supposedly, Lefevre was not at all knowledgeable of any financial markets but was still able to produce this masterpiece after only a few interviews with Livermore.
Two others about him (neither as well written or as informative) are "Jesse Livermore" by Paul Sarnoff
and "The Amazing Life of Jesse Livermore" by Richard Smitten. I once lived in the hills where the television got only one channel. I put an antenna on the roof and then got one channel. We now have cable reception, untold channels and I still prefer to read. And guess what, it rubbed off on the kids! How about that!!
Happy weekend!!

Black BladeHigher natural-gas cost forecast#7167303/15/02; 20:29:51,1002,33%257E463515,00.html

Experts: Colo. stands to gain


Friday, March 15, 2002 - Consumers can look forward to cheap oil and gasoline, but prices may rise for natural gas and electricity, energy experts said Thursday at a Denver conference. Colorado's oil-and-gas industry stands to benefit because the nation's growing hunger for natural gas will require more drilling in the West, energy analyst Thomas Petrie said at the North American Energy Conference.

As the U.S. economy recovers from a recession and begins to grow, more natural gas will be needed to generate electricity. Increasing consumption of natural gas will push prices higher and spur the need for new sources in the Rocky Mountain West, the Arctic regions and from imports of foreign liquified natural gas, speakers said.

Petrie, co-founder of Denver-based consulting firm Petrie Parkman & Co., said U.S. natural gas production from existing fields will decline 29 percent this year, primarily because older wells in the Gulf of Mexico are being depleted.

Record levels of spending for natural gas drilling during much of the past two decades has failed to reverse the production decline, said Gregory Shuttlesworth of the natural gas division of New York-based PIRA Energy Group. "Those incredible surges of spending just didn't work," he said. Shuttlesworth said robust demand for natural gas will stimulate more production, especially from large fields of coal-bed methane found in Colorado, Wyoming, Utah and New Mexico. "You've got the gas, and the market desperately needs it," he said.

Black Blade: As I have said here before. An economic recovery will result in higher energy costs that nail the corporate bottom line. Depleting reserves will results in future higher prices as new exploration and production is shelved during current low prices. "Cheap Energy" is the fuel that powers the economy, and if that fuel cost more, then economic recovery (aside from lower corporate earnings and crushing debt) is in doubt.

JCTexCavan Man/you feel it in your bones#7167403/15/02; 20:44:22

History does have a way of showing up, again and again. Human-folks keep thinking that "this time, it's different." It isn't. It never is.

This learning patience [still] is no fun, but I'd da--ed sure rather be in this chair than the chair the shorts are in....coming at them from a lot of different directions and one of these days they'll run out of rope[s].....just like they have before.

Regards to you, CavanMan

Black BladeEnergy Bill Could Run Out of Gas #7167503/15/02; 21:14:40

Senate rejects strict efficiency standards


WASHINGTON - The Senate rejected strict new fuel efficiency standards Wednesday, virtually ensuring the energy bill will not make a major dent in oil imports. The only other proposal that may have done that, drilling in the Alaska National Wildlife Refuge, faces likely defeat in the Senate, with filibuster threats from Democrats.

Without the fuel standards and ANWR drilling, the energy bill is made up mostly of $16 billion in tax incentives during the next 10 years to encourage conservation and energy production including:

* $3.3 billion for energy from pig and cow manure, wood or plant waste, geothermal heat and the sun;

* $4.6 billion to benefit oil and gas producers with "marginal" wells that often pump less than 25 barrels a day;

* $2.1 billion to expand current tax credits for electric cars and clean-burning cars that run on fuels such as natural gas, hydrogen and ethanol-mixed fuels;

* $1.9 billion for investments in "cleaner" coal technology.

Black Blade: A lot of political posturing and pissing matches between both parties ensures that we will have higher energy costs here on out and more stress on a precarious US economy. Sounds ominously like the "Fall of the Roman Empire". "Interesting Times"

Golden BearPizz (71665)#7167603/15/02; 21:27:19

Greetings Pizz,

In reply to your words...

"We do need to find a different angle or senario to keep us busy. we've just about beat all these horses to death. I have this nagging feeling that there is still something out there that we're missing".

Something out there, there certainly is, and is revealed by Adam Hamilton in his latest weekly piece.

Interesting times dead ahead!


Old YellerThe world loves the dollar#716773/16/02; 01:15:26,,482-232364,00.html

"The only type of money the whole world can devalue against simultaneously is gold,but that is a policy with more appeal to Chinese traders than to central bankers.In essence,the problem of the over strong dollar looks at present to be insoluble."

Perhaps the people actually doing the work on this planet may decide they don't really care anymore what'appeals'to central bankers.Perhaps they will look at the experiences of the many victims of money based on deception and coersion and pick the true currency that would not deceive if freed from the banker's icy grasp;gold.Certainly the Japanese would be the most obvious trendsetters in this regard.

Certainly a tough path,many vested interests planning inventive,varied and time-tested ambushes.They can't stifle the true appeal of gold though,money that is not someone else's liability.

Black BladeSouth African rand falls on Mugabe poll victory#716783/16/02; 04:40:22


The South African rand weakened against the dollar on Wednesday as Robert Mugabe was declared winner of the disputed presidential election in neighbouring Zimbabwe, granting him a fifth term in office.

Investors feared that the poll, criticised by independent observers as flawed, would spark unrest which could spread across the border to South Africa. With the majority of the votes counted, Mr Mugabe had polled 1,634,382 of the estimated 3.1m votes cast, giving him an absolute majority against 1,170,590 for Morgan Tsvangirai of the opposition Movement for Democratic Change. "This outcome will only increase the danger of civil unrest and continues to weigh on the rand," said Commerzbank.

The rand fell to a low of R11.88 against the dollar by about 1000 GMT on Wednesday from R11.43 in Tuesday's late trade. Last Friday, it broke above R12 for the first time in eight weeks, having fallen 10 per cent earlier in the week.

Black Blade: There was no doubt that the fix was in. I was surprised that anyone had even bothered to vote. The difference between Rhodesia and South Africa is that in SA there are a lot of firearms and a lot of people who can use them effectively. It is doubtful that any "unrest" will spread to SA, although the weaker rand will benefit SA Gold miners.

Black BladeFour More Clients Leave Andersen#716793/16/02; 05:27:42

Four More Blue-Chip Clients Leave Arthur Andersen After Auditing Giant's Indictment


CHICAGO (AP) -- Four more Fortune 500 companies have severed long-standing ties with Arthur Andersen, reflecting increased concern about the future of the indicted auditing firm. Sara Lee Corp., Abbott Laboratories (NYSE:ABT) Inc., Northeast Utilities and Brunswick Corp. joined the exodus from Andersen on Friday, and others said they were considering firing the Chicago-based company. Combined, the four paid Andersen more than $15 million in auditing fees in 2001.

Accounting industry experts said the stream of defections is likely to turn into a flood in coming days after Thursday's criminal indictment of Andersen for shredding documents related to its audits of collapsed energy trader Enron. "Chances are now much greater than before that Arthur Andersen as we know it will not exist," said Itzhak Sharav, an accounting professor at Columbia University. "There is no great reason for clients to stay with them, assuming that sooner or later this indictment will spell the end of the firm."

Black Blade: Arthur Andersen is finished. The client list grows smaller each day as companies fire this criminal enterprise. After the collapse of Arthur Andersen clients Enron and Global Crossing and questionable accounting at Waste Management, we await for more Enrons to fall out of the woodwork. Perhaps now there will be probes into other areas such as investment banking and the risky exotic derivatives investments by major banks such as JP Morgan Chase.

USAGOLD / Centennial Precious Metals, Inc.There's a right way and a disastrous way. Build a foundation of knowledge for $5.95#716803/16/02; 06:50:50

The ABCs of Gold Investing

ABCs of Gold by MK"Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.

"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'

"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

JCTexBlackBlade#716813/16/02; 07:27:16

Adding the above link in case there are some new forum members that are unaware of the JPMorgan/ChaseBank derivatives activities and position.

Really appreciate all of your efforts.

USAGOLDConsider. . . .#716823/16/02; 09:39:42

What will happen when a major corporation gathers up its papers and books after leaving Arthur Andersen, walks into the offices of another accounting firm in the present environment, and asks them to pick up where the indicted Andersen left off?

Interesting proposition with respect to the implications to stock valuations and the overall equities markets.

A thought based on Black Blade's #61769: "Four More Clients Leave Andersen"

Among the primary portfolio assets, gold is the only one that is not someone else's liability and does not rely on a balance sheet for value. Unlike stocks and bonds, gold cannot be victimized by creative bookkeeping -- the government's or someone else's.

WaveriderS Korea accountants accused of malpractice#716833/16/02; 10:12:46

"South Korea's accountancy industry has been accused of widespread malpractice after financial regulators uncovered a web of accounting irregularities in the country's corporate sector.

Seven of the largest accountancy firms and some of their corporate clients have been accused of account-tampering that included inflation of profits and hiding of debt.

Seoul's Securities and Futures Commission has sought criminal charges against two companies accused of book-fiddling and recommended suspension of 26 auditors. A further 11 companies cited by the commission faced a range of lighter punishments.

"When major companies in a market economy falsify their books, they undermine the foundations of the national economy and the market system. We witnessed the devastating effects of such window dressing during the [1997] financial crisis," it said.

Waverider: MK - it seems that South Korea has similar problems in its accounting industry - the potential fallout in the equities markets was my thought exactly when I read this article. Cheers!

WaveriderProlonged period of Japanese repatriation in store.#716843/16/02; 10:35:37

"Recent MoF data confirm substantial repatriation moves as Japanese investors have been selling foreign bonds. This repatriation move is not yet complete and is likely to reach its climax in April. An out-performing Japanese equity market will accompany repatriation, with continued foreign investor buying of Japanese equities. The financial sector remains the Achilles heal of the Japanese economy.

The market has recently concentrated on non-performing loans of banks, but structural asset/liability mismatches within the Japanese life insurance system are also a major concern. Lifers have guaranteed payouts, but insurers have been too optimist regarding the return on their investments. Demographics suggest mounting payouts in the next few years, but with asset values declining and money market returns dismal, most life insurers are projecting negative cash flows. It seems to be inevitably some of these life insurance companies will go boost [bust], but while the government tries to reform the banking sector, a collapse of a major life insurer at this stage could create a financial sector domino effect.

Waverider: Earlier this week Moody's downgraded the financial strength ratings of eight Japanese life insurers including Nippon Life Insurance Co., Mitsui Mutual Life Insurance Co. and Dai-ichi Mutual Life Insurance Co. They're whining of course, arguing that the business environment is better than ever based on higher stock prices - scary!

WaveriderWhat's a Skirt Watcher to Do?#716853/16/02; 11:41:16

"IF you've been counting on the hemline index to foretell the high-technology sector's economic future, it may be time to find a new indicator for anticipating market movements."

Waverider: For the skirt watchers in the crowd...Cheers!

Sierra MadreI'm back from Siberia!#716863/16/02; 12:04:18

It's good to be back!

A few gold-related anecdotes for this Saturday morning, from days of long ago.

In the late sixties, I persuaded my dad to close out his account at Bank of America, and move funds to Switzerland and buy gold.

We watched and commented daily, with a certainty of an eventual rise in the price of gold. It was a unique situation: the downside was zero, the official price was $35.00 The upside was unlimited, virtually. A once-in-a-lifetime opportunity.

We watched all the events, Nixon's closing the "gold-window" (which was a default on obligations, of course) and then all the shenanigans of the London Gold Pool, the U.S. selling gold, etc. until the whole thing broke down.

Probably before the closing of the gold window, a U.S. congressman said that if the U.S. ceased to "support" the gold price at $35, gold would go to....$5 (five) dollars an ounce! What a lot of nonsense we heard!

Harry Schultz was in Acapulco about 1978, and there was a party with fireworks which ended with a display of "GOLD $300" in flaming letters and numbers. A few days later, gold did effectively go through $300. Sometime before that, there had been a sickening fall to about $100 from $180 or so, but it did not last, although it did scare some out of the metal, myself included. I did get back in at a slightly higher price, which cost me some gold. I learned my lesson there. Don't play with gold. Just keep it and forget about it, if you can.

Dad sold out at about $600.00. A ten-bagger! He got into US bonds at 15%. Dad was a smart businessman. By the way, Armand Hammer sold out a very large amount quite close to the top of $850.00/oz. He was a shrewd old fox with glittering beady eyes, and a friend of Dad's from the time when Hammer was "touching up" antiques which he had managed to squirrel out of the USSR thanks to his contacts. Hammer told us about his famous pencil factory in the Soviet Union, and his friendship with Lenin. He nearly choked to death once, when we were having lunch. Hammer was not a lovable person, I must say. There is a book out there, about the unsavory details of his life.

I was not able to profit from that gold operation - I did not have cash available at the time. I was pleased that Dad made so much money, though. (It all went to his 2nd wife, an ex-chorus girl. Such is life.)

Another anecdote:

About 1969/1970, I don't recall how I got the tip, but I was told there was an individual from Northwest Mexico who wanted to unload - seven tons of bullion! Wow!

In my youthful innocence I approached Bank of America offices on behalf of my company and inquired whether there was any possibility of financing this deal.

Well, you would have thought I was proposing financing for a chain of houses of ill repute! I was summarily brushed off, they were "not amused". So I got a first-hand lesson in the hatred of bankers for gold. (On second thought, the houses of ill repute, suitably packaged, might have been a doable deal.)

It was just as well, probably. That gold might well have had a very shady origin, to say the least. My father-in-law, a metallurgical engineer, suggested there might be a big problem with confirming the actual purity of the metal. And again, there was no telling how the owner came to hold that huge amount. All it would have taken, though, was about $6,500,000 U.S.

Fast forward to 2002: We are once again, facing a very similar situation. The control is going to break down. Gold will surge, of course. As before, we don't know when. We just watch and wait.

I have seen this movie before, so to speak. But, we can see it only one frame at a time. I know the ending - gold soars. But the details of circumstances in this showing, are obscure. Wars, destruction, revolution - and simply death from old age may come along with or before the finale.

Enough rambling - time to go out and enjoy another lovely day.

Peace be with you!


PizzUSA Gold#716873/16/02; 13:56:25

Changing accounting firms.

One very expensive and time consuming ordeal. It's tough enough when you can rely on the other auditor's work. I think a bit more due dilligence will be required as far as relying on AA's previous work.

Wouldn't look too good if something blew up and the new firm's only defense was that they relyed on the previous accountants work.

Any majors changing firms will have some pretty hefty reserves booked just to be on the safe side until the new accountants are confortable. Every company's internal accounting systems are different and it takes years for the outside accountants to become familiar with them.

Lower book earnings will be forthcoming.


Mr GreshamSierra Madre, Pizz, Waverider#716883/16/02; 14:20:39

Sierra! That was great! Thanks.

Pizz -- good perspective as always on what is really going on inside those offices, handling all of our friends' and neighbors' "retirement" "money".

Waverider: I'll have to read that several more times -- I've had to pretzel up (enough to almost choke upon) on my own contrarian views. ("If I think this is going to happen, then...") If I now have to take into consideration my former non-views (while, of course, viewing intently) of the indicator you mention, will I now have to view them in a manner contrary to my forthcoming views, in conjunction with any other indicators, or can I simply (hah!) devise a conjoined viewpoint based upon my nearly non-viewing of this as an indicator, but merely agree with myself? (With regard to whether or not I view it as an indicator, of course.) (Or, perhaps more simply than you would care to respond to at present, is the parrot dead, or isn't it?)

BelgianThe oil factor !?#716893/16/02; 15:25:25

The public, grand defilé of westerners at the house of Sauds in Arabia is evidence of "trouble". Publicly it is the matter of a viable Palestinian state for Saddam's skin (and cheap masses of oil). !-?
This is only a facade ! As long as cheap oil is needed, Palestinians will never obtain a viable state and Israel will never be blessed with lasting peace. Saudi Arabia is maneuvering itself (and allies) into a much more important role with many different possibilities of leverage.
Saddam (and Co) do understand what changed the world after 9/11 and do play a different game. The Middle East (Arabian oil) might succeed in overcoming the past divide and rule tactics from western oil-consumers ! No more "Kuwaiti" strategic blunders ? This with Euroland quasi neutral at the surface but more biased under the skin.

It seems as if the past "classic" ME-policies will not be applicable anymore ? A second attack on Irak will have much different consequences for a renewed illusion of cheap oil flows. No more understanding for the oil-fragility of the western (or eastern) economies. Don't count on (opportunistic) Russia as possible substitute (private or state oil/gas). The US as an already established military super power is pumping amazing amounts of additional money after this already recognized superiority. Euroland Galileo systems received an OK in Barcelona (Germany) as competitor for GPS, evidencing the will for euro-independance from US military. Energy in Euroland will be liberalized within a few years. Energy is Crude Oil in the first place. One and the same barril for one and the same amounts of euro ?

Euroland is moving step by step until it pulls the Gold card or better...waiting to receive the Gold card from the dollar-dealer in casino confetti. Optimism justified ?

BoilermakerEnergy#716903/16/02; 15:33:51

I concur wholeheartedly with Black Blade and others here that oil and/or gas energy prices in the US will be headed higher, possibly much higher, over the next years. This will happen regardless of economic recovery. We will likely encounter all of the following supply problems; a supply reduction from OPEC by voluntary cutback or as a result of war, continued depletion of domestic oil and natural gas or sabotage of oil tankers, refineries or pipelines. We've already seen some of this happening. We must understand that oil is no longer a free market due to the influence of OPEC. Just as the Central Banks of the developed nations have shackled gold and prevented a free, gold-based monetary system to develop, so has OPEC "fixed" the petroleum market. OPEC can maneuver the price at will to squeeze more money from consumers and then flood the market with cheap oil just in time to scuttle alternative energy projects that need high-priced oil.

At the risk of boring the forum with my "energy solution" for the US and other oil & gas dependent nations here is what I think can be done. I offer this to hopefully plant some seeds of thought that may flourish among the great thinkers of this forum. Energy is as important to the health of the US and the rest of the world as is a sound monetary system. Both are at great risk today.

There are some good models that we can examine that provide a roadmap to energy independence. An example that I think is most useful is one provided by South Africa and more specifically a South African company called SASOL (South African Synthetic Oil Limited). Please understand that I am using SASOL as an example of an energy converter and not as an investment recommendation.

South Africa's Energy Development

South Africa is relatively barren of naturally occurring oil and gas (although a large gas supply have recently been found offshore so that gas is becoming more abundant). SA has large reserves of coal and from the earliest years of the 20th century SA chose to employ "alternative" methods to produce the basic products that are built from hydrocarbons by using their plentiful coal resources. The following snippet comes from the website

"South Africa has a highly developed synthetic fuels industry, which takes advantage of the country's abundant coal resources and offshore natural gas and condensate production in Mossel Bay. The two major players are Sasol (coal-to-oil/chemicals) and Mossgas (natural gas-to-petroleum products). Sasol has the capacity to produce 150,000 barrels per day (bbl/d), and Mossgas 45,000 bbl/d. The ""(SAG) ended Sasol's annual $150 million subsidy in July 1999, which was designed to protect it against cheaper imported crude oil.
Sasol is the world's largest manufacturer of oil from coal, with coal liquefaction plants located at Secunda (oil) and Sasolburg (petrochemicals). Started by the government in the 1950s to help reduce South Africa's dependence on imported oil, the company was privatized in 1979. Coal is first gasified, then turned into a range of liquid fuels and petrochemical feedstocks. Sasol is upgrading and expanding its Secunda facilities to reduce costs and to help it remain competitive. The upgrades and expansion are tentatively expected to be completed by 2001."

My introduction to South Africa's energy program occurred several years ago when I had the good fortune to work on a coal gasifier study conducted by another SA company, AECI/Kynoch, that operated a large nitrogen fertilizers and explosives manufacturing complex in Modderfontein, SA. This plant, dating back to 1896, used coal for its primary hydrocarbon feedstock and is described at this website

I'm not sure why SA decided to take its energy and hydrocarbon future into its own hands but it did. Perhaps one of the SA contributors at this forum can shed some light here. I suspect it was not a free market driven process but one of government policy and implementation by private and government investment. Nevertheless it happened and SA is way ahead of the curve when it comes to energy independence. As an engineer I was extremely impressed by their alternative energy technology, much of which originally came from Europe. SASOL has taken basic process flow sheets and perfected the design and operation of large scale plants (where others have not). They used the same oil from coal process developed by the Germans in WWII (Fischer-Tropsch) and made a commercial plant. (In WWI, the Germans realized they needed to eliminate dependence on foreign oil. The Germans had all the coal they wanted, but lacked domestic hydrocarbon deposits. Two German scientists, Franz Fischer and Hans Tropsch, discovered a method for converting coal into synthetic diesel and gasoline, known as Fischer-Tropsch synthesis. The Nazi regime developed Fischer-Tropsch technology into an economical reality during WWII, producing synthetic fuel from domestic coal reserves.
Fischer-Tropsch synthesis works by mixing coal with steam and pure oxygen, gasifying the coal. The resulting mixture is called crude gas. Gasification yields chemicals that are locked in the coal; these chemicals are removed from the crude gas, producing synthesis feed gas. At high temperatures, synthesis feed gas will convert into diesel, petroleum, propane, fuel oil, paraffin, and butane through the Fischer-Tropsch conversion process.)

Of course SASOL with their Fischer-Tropsch process is but one of many processes that have been designed and built at least at the demonstration size level. The one thing that is common to all of them is the huge capital investment and several years of permitting, design, construction and startup that is necessary to build a commercial plant. This need for risk capital to build a plant that will not go on-line for several years producing a product whose price history is characterized by extreme volatility creates a dead end for most investors. Sort of like the gold mining business today where low prices have all but shut down exploration and mine development.

Naturally occurring oil and natural gas are but a tiny fraction of the earth's hydrocarbons available to man. Each country has vastly different resources of oil and gas and clearly the bulk of today's O&G resources lie in relatively unstable places. The days of the exploration/production (hunter-gatherer approach) of naturally occurring O&G are numbered. We must expand the potential O&G resource base to include coal, shale oil, tar sands, etc., which will not only increase reserves by orders of magnitude but will also free the market place from the vagaries of OPEC or any other cartel. Supply will stabilize because the investment in multi-billion dollar plants creates a high fixed cost structure that encourages continued throughput even with low prices.

What is needed to create this alternative energy industry? The technical part is no problem. It's been done for many years. Like the gold mining industry, we need higher and more stable prices. We are not dealing with a free market in gold or in oil. We all know that the market will eventually sort out the gold vs. fiat problem albeit with ugly consequences. Oil is the key variable in today's monetary mix as Another/FOA have so excellently revealed. I do not pretend to understand all of the intricacies between oil (or any other commodity) and money but I know enough to believe that the link is valid and inseparable. I suppose the best thing that we could hope for would be establishing the pricing of oil directly with gold. This would sort out the monetary con artists in short order and enable the energy industry to enter an "alternative" era.

Black BladeBoilermaker#7169103/16/02; 17:21:51

I hope you don't mind, but I passed your post along to the site above as I thought it would be of interest there and maybe stir up some controversy (especially among the resident anti-US, Greenpeace and Sierra Club crowd). Cheers!

- Black Blade

BoilermakerBlack Blade#7169203/16/02; 17:45:30

No problem with the forward. Hope it gets some flak. Maybe my "Sierra Club" son will see it and groan.
Black BladeOil Rally Harming Asia More Than U.S., Europe, Economists Say#7169303/16/02; 19:30:44