USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
UsulThe growing property bubble#746625/1/02; 01:23:06,,2-284073,00.html

In 1977: bought for £12,500
Estate agents now value the property at £250,000.

Knallgold@IGWA#746635/1/02; 01:37:47

"In France, there are great concerns about North African black migrants who integrated into French society, and are now DIS-integrating from society as they take up radical Islam."

A reason why LePen got that much votes.The politicians should finally accept that there is an immigration problem in Europe and act accordingly.Not keep their heads in the sand any longer.And call them warners all racists etc.,the socialists famous fascism-cudgel.

Thank you IGWA for your post.For some reason the (NWO)establishment wants to keep this debate totally suppressed.

ME: maybe you know of the old/new links and friendship between the left terrorists (RAF etc.) and palestinian terrorists.

As a Swiss,I am naturally "neutral" (even though our governement calls us supporters of this old value now parasites,not solidaric with the world).But I know whom I should help in the ME conflict.

UsulFar north's gold fever#746645/1/02; 01:39:57,5478,4235904%255E462,00.html

They are drilling a 1000m deep hole- just to see what's there.

Such a lot of effort to dig up a "barbarous relic"!

This phrase was used by John Maynard Keynes in his 1923 book: "A Tract on Monetary Reform".

His argument was "that the gold standard after World War I was nothing like the gold standard of earlier years"-

- and that "the stability of gold now depended increasingly on the policies of a few central banks"

Perhaps it still does... for as long as they have the upper hand. Have I not heard that there is a structural deficit in the supply and demand of gold, and that the demand is only met by the dishoarding of official gold? The blip up in price at the announcement of the Washington Agreement testifies to their influence.

Sometimes, there comes a drought of such magnitude to make ground thirsty for water that can no longer be slaked by its rivers. Then the inhabitants of that great inland desert will pay the "going rate" for their water!

Black BladeMega-Hedger Barrick 1Q earnings fall on lower sales#7466505/01/02; 04:17:43


TORONTO, May 1 (Reuters) - Barrick Gold Corp. (Toronto:ABX.TO), the world's second-biggest gold producer, said on Wednesday its first-quarter earnings fell as declining gold sales failed to offset a higher average realised gold price. Barrick, which has extensive gold properties in North America, South America, Africa and Australia, reported earnings of $46 million, or 9 cents a share, for the period ended March 31, down from $87 million, or 16 cents a share, for the same period a year earlier. This lagged the expectations of 13 analysts polled by Thomson Financial/First Call, who had forecast earnings in a range between 11 cents and 14 cents, with a consensus earnings estimate of 12 cents.

Black Blade: Lowered earnings and they didn't even make the lowered earnings estimates. Hmmm…

Black BladeGold To Consolidate Before Trying $325/0z #7466605/01/02; 04:26:32

Gold To Consolidate Before Trying $325/0z In Late '02-CBA

SYDNEY , May 1 (Dow Jones) - Gold is likely to take a breather after its rally late last week before a brief push to US$325 a troy ounce in the second half of calendar 2002, the Commonwealth Bank of Australia said Wednesday in its monthly precious metals report.

The report also noted improved fundamentals for gold, as the past month's rally to decisively break the US$300/oz mark had little to do with short covering, which the bank said was the key factor in previous rallies above US$ 300/oz in recent years....

Black Blade: Whaddya know, and after they sold off all the bank's Gold a couple of years back. Trying to keep up with the Brits I guess. Hmmm…

Black BladeAustria gold coins sell briskly in Japan#7466705/01/02; 04:38:15


Austrian gold coins featuring the Vienna Philharmonic Orchestra have been selling in record volume in Japan after Japanese maestro Seiji Ozawa conducted the New Year concert in Vienna on Jan. 2. According to Austrian Mint officials, 60,000 ounces (about 1.86 tons) of the gold coins were sold in Japan from January to April, five times the volume in the same period last year. The volume of Austrian gold coins sold in Japan in the four months has already exceeded the entire foreign sale last year, they say.

Black Blade: Japanese sales are still booming!

Whoa! This is not good! Mega-Hedger Barrick's earnings of 9 cents a share are only "operating earnings" and not "net earnings"! I smell trouble!!!

Canuck@ Cavan Man#7466805/01/02; 05:09:45


I hate virtuous circles!

PizzBlack Blade#7466905/01/02; 06:54:38

Re: Barrick Earnings

Nothing to stop a company from underreporting earnings from the accounting profession. Conservative accounting to take the heat off gold shares to take some heat off spot, therefore their hedgebook???

Was that your hmmmm.. or just the fact that they're hedgers?


Mr GreshamMorning Wake-Up Apology#7467005/01/02; 07:28:34

I know there were several posts addressed (at least partly) to me that whizzed by in the past week. I couldn't come back to them (at least I got to scan the Forum that day) and probably won't be able to do them justice in near future -- so that's probably just water under bridge. Sorry for that, and other past ones I might have missed altogether!

I think it's important that we respond to each other ('s non-argumentative posts) here, as that's what brings out the best in any forum -- when you know that someone is at least listening.

It seems some busy days we have the choice of (1) reading without being able to comment on all the good ideas just read, (2) posting without reading (huh? what's THAT about?), or (3) reading down from the top far enough to find something provocative (+ or -) and respond to that. None very satisfying, but necessary when you want to "have a life" elsewhere.

This is just to let you know that I can't stand the thought of missing something good, so I'll at least dip into just about every post (obsessive-compulsive?) to see if it grabs me. Even after eyes and brain have just about stopped functioning at day's end, gotta have my fix!

Just knowing that good minds are catching, sorting, and filtering the day's events does it for me. Thank you!

Econoclast"GoldTrust Receipts" are made of paper, No?#7467105/01/02; 07:45:50

The second half of this year is going to be Very Interesting! The "prescription" for the economy is going to be higher interest rates, but how can the FED do that without blowing up the derivative books of the banks?
Policy/management is going into uncharted territory. Isn't gold for protection during those "uncertain" times?

Mr GreshamDip Day?#7467205/01/02; 07:48:26

Oh, and I was going to propose (semi-humorously?), if we're not about to take up a Spike Day contest, how about a Dip Day one? Or, more to my interest, what price level of the current or next dip do YOU think will be the take-off bottom for the next wave up? And what dip level would interest YOU in breaking open that piggybank (college savings fund, Savings Bonds tucked away, etc.) for another allocation AU-ward?

Interesting that the commentaries in the financial world now speak with such confident inevitability about a "push to US$325" this year, conceding a rate of return more than 10% annually going forward. (If it goes up 20%, they feel they'll have been covered by their milder positive prediction.)

If any financial advisor had what they believed was a nearly-guaranteed 10% return before them, on ANY item, could they neglect to put it before a client for consideration? Especially since the world's stocks in general would have to be considered at best a neutral near-term choice.

But they're commenting on this so off-handedly, as if this was just detached predicting or news-watching, and not something to be acted upon for one's long-term financial well-being. Perhaps it's the parallel "other story" that goes along with it, that everyone's soft-pedaling: the likely/possible/potential Dollar breakdown, and world system lockup possibly resulting from it. (Physical gold is the REMOVAL of monetary value from the banks playful hands!) Maybe they can only "break it to us gently" as we the public awake from our "Quickened" dreams of life on Easy Street in early retirement.

YGMThe Poor old Canadian Peso.....#7467305/01/02; 08:03:24

It's Our Government That's 'Looney'......

Canada sold 95,000 ounces in Feb./02 and has 1 million left of a total of 22 million ounces in 1979. Believe it or not, we wonder why our dollar is worth 62 cents U.S. At one time the Canadian dollar was worth more than the U.S., but now with US T-Bills and other US Paper Promisary Notes as backing for our currency we have little hope of seeing the strength of a realistic Canadian $ that we had in the 1970's.....Ahhh the power of the Banking Octopus and it's stealthy far reaching theft of Nations.......Not much left to take after all they own most of the land/property by way of Collateral Loans.......Peasants and Peons in our own lands.......YGM.
EconoclastI was struck with a thought while thinking on this statement#7467405/01/02; 08:20:52

Physical gold is the REMOVAL of monetary value from the banks playful hands?

If I trade a dollar for physical gold, now I have privacy for the wealth represented by that dollar, safety for it, security for it. On top of all that, I believe that it is the investment of a lifetime right now.
But follow that dollar. It went to Mr Kosares' firm. From there to his supplier (a bullion bank?) From there to either a central bank, a goldmine, or someone else who sold their gold. From there, continually onwards and outwards. That dollar is still sloshing around somewhere representing a liability owned by the FED.
Where am I going with this? I'm not sure. But it seems like I received the primary benefit out of the whole thing.

YGMMr. Gresham#7467505/01/02; 08:31:09

Dip Day...

Could it be that we've already passed it :>)

Terrible tuesday for the shorts?......YGM

PizzYGM#7467605/01/02; 08:32:42

RE: Canadian Peso

Sell a little gold, prop up the "peso" a bit and tread water til the US buck catches "down" with your "peso".

Then we can have the loonie greenback as the new North Amercian fiat. Sounds a bit like a new species of waterfoul. Ought to make the environmentalists happy, and at least that might be one voting block for the new protected species.


YGMWhat's up w/ Spot?#7467705/01/02; 08:39:47

Watching Bullion Desk Link...

Spots jumping around like a cat w/ turpentine on it's butt.
+1.50, -.20, +1.20, -.10, +1.30, -.20, +1.10 looks like the buyers are given em hell in the pits.....YGM

USAGOLD Market Commentary"Quietly, Happy Gold Investors" Assess Future Prospects#7467805/01/02; 08:55:58

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.

"For more than 2000 years gold was viewed by generation after generation as a safe haven in times of crises. Gold was an insurance asset, in fact, formuch of the time the only insurance asset. 2000 yearsof history is not wiped out within two decades. This wave of global prosperity cannot continue forever, andI believe, history is busy proving that right now as we speak."
- - - - - - Ian Cockerill, CEO, GoldFields

Gold Market Brief (5/1/02) . . . Gold inched forward in New York this morning after a relatively quiet night overseas. There are reports of renewed physical buying in Japan and bank covering in Europe -- and this is kind of steady supplort that some analysts claim has put a floor under the gold market. Gold has eased back a little in recent days in concert with reduced tensions in the Middle East, but the pullback has been less than what the bears had anticipated. "Gold still looks like it's breaking out of formation and still showing surprising strength," Alaron's Phil Flynn told CBS Marketwatch. "People are going to more traditional investments on concern in the stock markets." The safe-haven metal has enjoyed something of a resurgence over the past several weeks in response to tensions in the Middle East, strong Japanese buying, bullion bank and mine company covering, and a general sense that world equities markets still have their worst days ahead (the DJIA is down 95 as we go to fetch this over to the server). The dollar, which had experienced a selloff last week, seems to have stabilized for the moment but doubts have begun to surface about the long term despite repeated comments from the U.S. Treasury Department that the strong dollar policy is still in force. The markets do not appear to be convinced. Reuters reports that "the dollar appeared to have stemmed its fall by Wednesday, but hard-hitting liquidation in gold was unlikely." Reuters quoted one trader as saying "Most people are long in gold but they're long at lower levels, so there is no panic around in either gold or silver. People are just sitting there quietly happy." So to all the happy gold owners, I bid you good day. See you back here Friday.. . . . . . . . . . . .. . . . . .MORE (See above for access to the full Briefing)
Michael J. Kosares is the author ofThe ABCs of Gold Investing: Preserving Your Wealth through Private Gold Ownership, editor of NEWS & VIEWS: A Quarterly Review of Forecasts, Commentary & Analysis on the Economy and Precious Metals, and president of USAGOLD/Centennial Precious Metals, Inc. He has nearly 30 years experience in the gold business. He also writes these (almost) daily reports and commentaries.

RobotGuyGO LOOOOONIEEEEEE!!!#7467905/01/02; 09:57:32

Gauntlet-Runner2("GR2")Like Nitro on a hot sunny day.#7468005/01/02; 10:32:43

If Newmont closes above $30 today. That has the psychological impact of a cinderblock falling off a skyscraper and crashing into a CEO's Mercades. So where is the rally in the Diamonds, Ques and Spiders? This is not your fine house. This is not your beautiful wife. How did you get here?

"Hey boys how about we take out some of the liquidity out of this market before we can't sell a share. We'll blink around the bid and say quiet prayers over the ask."

Darth Vader is back and the Jedi bulls forgot their flashlights. Dumb jedi, go back to the desert and eat porrige. Luke, the force isn't with you. Newmont is becoming Mount McKinley. Dig a small hole and try to climb in.

The CoinGuyAll#7468105/01/02; 10:34:28

The dollar is looking extremely ugly on the intraday chart.

The CoinGuy

YGMPrinting Press Mania....#7468205/01/02; 10:44:21

Poor old Alan......

Greenie running those presses creating more toilet paper from 'Airy Nothing' for so many years is probably sweating bullets right now. Him and many more I suspect. The paper of yesterday is tomorrows firestarter.....Dump paper & buy some of MK's beautiful coins, before your buying power dwindles like the Loonie.....*If I knew then what I know now, I'd have twice as much of the Yellow stuff.....(Voiced by many Canadians)*
sourdoughBlack Blade (05/01/02; 04:17:43MT - msg#: 74665)#7468305/01/02; 11:00:10

Concerning Barrick.
A few years ago TRIZEC HAHN secured a loan that I believe was (backed)convertible into Barrick shares somewhere around the 30/31 dollar range. I forget exactly how many shares was involved but I think it was "many millions of shares.
At the time I thought it was probably organized by J.P. MORGAN because they had a board member and connections with Trizec Hawn.
I saw a release yesterday that a reorganization had taken place a Trizec Hawn (having not followed the company, I was at a loss to what they have done).
The question I have: WHAT IS THE SITUATION REGARDING THIS CONVERTIBLE LOAN? I always wondered, although it appeared that TRIZEC and Munk appeared to exert control over Barrick,If in reality, a great deal of that control was actually held by those bondholders. I tried at the time to find out from Barrick who held them, but that was a dead end.
Anybody up on these bonds?

sourdoughConcerning Barrick#7468405/01/02; 11:49:16

Follow up.
I think "oli" moved up in Barrick at around the same time.
The "angle" I was trying to research back then, was the possibility that Munk and his group, Bush,Mulroney, etc. had sold their souls and the gold industry, in return for Trizec access to cheap money, and access to perhaps government and/or big financial entity leases for their buildings.
If a large entity gave notice they would not be renewing their leases on certain buildings, the owners might sell them at a discount. Then Trizec with money and a promise that "lucrative leases would be forthcoming under Trizac ownership, would be to great a temptation for Munks TRIZEC HAWN. If the governments and big banks were interested in manipulating gold prices through Barrick hedging, this could be the link.
I could never find a link for the building/lease angle, but that sure doesn`t mean there is not one.
I think it would be a great project for a financial investigative reporter,time has passed and the trail might be a little clearer. Is there any here?

BelgianGold Wars....#7468505/01/02; 12:02:27

Sir Lips Ferdinand signaled record interest in his book : Number 44 out of 3 million at ! Congrats to you Sir.

In the mean time, the UN-free press (media) and analysts (gold-authorities) continue quessing the future price (not Value) of Un-free Gold, during its raging war !?
The present POG compensation for dollar decline is mediaticaly explained by the goldminer's declining hedging !
No, no POG is not rising because the dollar has changed trend...nonooooo ! And goldbugs must already be *pre-conditoned* with a POG stabilizing at the preset number of 325$. This corresponds with an oxygenated dollar level that "they" want to reach with "the" management.

And surprise'surprise...325$ is a very visible and important TA-TI point ! Oh boy what a lot of co-incidences !

Conclusion : Gold is on its way to heaven. No matter what levels or targets are fixed on the program of any anti-gold warrior . No matter how much different coctails of derivatives there are out there. No matter if or not these derivatives can be unwinded/untangled orderly or not. One day any kind of gold- management (enforced or not) will have to abondened when the ship (dollar-debt) capsizes and makes plent of water.

Those who turn their backs to the different aspects of this growing Big Brother world and are strong enough to remain FREE individuals...will keep on accumulating GOLD !
Sir Gresham, I strongly suspect you are also one of these Freedom lovers and hesitate / doubt as to find the right moment for having excess paper exchanged for the precious.
I've done so almost completely for myself. The only paper left is for settlement of daily expenses and enjoyment of some materialistic aspects of life.

On BBC hardtalk (tele) today, the Italian representative of the triumvirate (Belgium/France/Italy) preparing an Euroland constitution...was enlightening. Giscard d'Estaing (France) is an aristocrat and a passionate french world citizen. Euroland is fully engaged in the competitive run for ...alternative supremacy and UK fully EMU integrated is
part of a big jump forward. Another 10 countries out of 25 must join EMU as soon as possible (2003/2004) before the present 12 nucleus has run too far away. Always take into consideration that the fundamental of this Euroland expansion is the euro ! And euro is antipode of the dollar, in itself the worst enemy of GOLD ! The political unity of Euroland is NOT an absolute priority. We will agree to agree on a minimum minimorum. The euro-stability is the one and only basis (first half decade) for ensuring progress and prevent failure. Any Euroland failure would be a disaster. This places the US for a very difficult dilemma analog to what happened in 1940/45 .

This very, very fundamental aspect has been communicated by us through A/FOA in exclusivity and for free. It is the one and only explanation *why* Gold is behaving and has behaved as such. UNFREE GOLD serving two masters (dollar/euro) with a different timetable / agenda and manoevered into a condition where both have no point of return.

Under these conditions, GOLD prefers to remain "low profile" for as long as possible. Never tell the full truth and the real reasons behind any great story. Gold was/is and will remain *exclusive* ! It is the currencies that will be affected and be spotlighted for everyone to see.
I'll stubbornly repeat that there is not enough Gold for balanced and proportionate distribution. It would become so enormously Valued (in currency prices) that new imbalances would arise. That's why it will be managed as a reserve with a certain limit in its importance. So far a reasonable solution to avoid total and destructive collapse. Once Gold will be Valued into the many will become automatically and unfortunately out of reach for a large majority of people. New candidate owners that is.

Why talk today, about Gold Valued into the thousands when the present rise from 253$ to 312$ is only a ridicule 20% ?
Because I do personally believe that we will never see 250$ never again as I (myself) will never be 20 years young and Gold is aging / riping for its permanent rise to heaven.
And yes indeed, I'm told never to say never. Than let me put it this way : If Gold crashes under 250$/200$...Euroland will have failed ! But it can't and will not fail ! Brrrrr.

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miner49erEconoclast @74671 - the Big One...#7468705/01/02; 13:55:17

My grip is surely slipping, I think I've lost my hold... yes I think I've lost my hold,
I cannot get insurance anymore... they don't take credit on the gold...

Peter Gabriel - Blood of Eden (I know he wasn't thinking about this kind of stuff, but weirdly enough, it sure fits...)

Your mention of derivatives going kabloom... Was just thinking about that myself, earlier. The expected prescription is, of course, to raise rates. Yet as you correctly point out, the derivative books are all crying for mercy, "just a little bit lower, just a little bit longer..." And as long as the spin can convince enough people that inflation is being contained, and that things are gonna turn around any day now, the Fed can play this put-it-off-'til-tomorrow game.

Yet, not only of course, are there derivatives issues, but as we've discussed here ad nauseum, there is the issue of looming and very bad debt, en masse, whose repercussions throughout the system leave the U.S. most likely to just make the books balance, and print whatever is necessary to do that. This, opposed to the classical prescription of permitting contractionary forces to do their cleanup work (of which higher rates are typically a major component).

Those who frequent here have a pretty good handle of what the arguments are surrounding why the classical methods won't work this time, whether they agree or not. But the general public, and the officials they elect, essentially have only this level of understanding, and usually an inaccurate and superficial appreciation of the dynamics at play, to begin with.

As such, once inflation begins to be truly felt, and persistent, the pressure will be on for the Fed to explain why it is not raising rates. It finds itself in the economist's endless dilemma of trying to "'splain it." Never mind any potential illicit behavior, the task of making people, on a large scale, understand the sordid maze of dynamics involved in few words, is next to impossible.

The dilemma is this: With a "hard" science, like physics, or neurology, people are willing to give the benefit of the doubt to the experts, because they accept their own ignorance in the field, appreciating the complexity of the discipline. With the "soft" science of economics (like religion, philosophy and sports), everybody thinks they know it all, just because they read a "how the economy works" sidebar in USA Today once.

As long as confidence in the priests of this bestial religion is sustained, Fed heads, and other members of the mumbling class, can say pretty much whatever, and people just nod their tacit approval, letting others do the job of interpreting the entrails.

When things go south, people want clear, concise, sound-bite answers. And they want them now. This requires a communication's savvy that scarcely anyone (self-included) has harnessed. Unless they can rouse the public to their side with authoritative one-liners like, "Render unto Caesar...," (probably bad example...), or the like, they will lose them. And since they really cannot explain themselves in 6 words, they will have to fend off tremendous pressure to cater to the demands of the public, and Congress. Opposition economists will all have their Warholian quarter hour. They will appear sober, and even-handed -- all convincingly touting the wrong measures. People will listen, and soon will be discussing financial / economic esoterica with grand sophomoric confidence, using buzz-words that were entirely absent from their vocabulary two weeks prior. Then other crisis will break out, and Congress will be pressured to "do something." (Anything.) And they will.

It may be here at this juncture, that the global linkage of derivatives will bring together Japan, the Argentinas of the world, the Mid-East, and all the other cracks and fissures into one critical fault line. Our currency has become effectively good at little more than providing instantaneous depth and liquidity for risk mitigation tools and speculation. For this reason, the Federal Reserve may well be entirely incapable of raising rates ever again. (I tend to lean in this direction, myself.) The breaking point might be that day when: 1) either the Fed perhaps should blink and raises rates -- to its peril; or 2) the day the dollar-holding public (foreign and domestic) loses confidence in why the Fed does not. This will be because the public's understanding demands for rates to rise under these conditions, and they will no longer buy the reasons the Fed is giving for not raising them. Could this cause the great flood-gate busting exodus? It is perhaps already happening, somewhat quietly and orderly, as we speak.

The third, and least probable scenario, would be for all the world's dollar holders to simply acquiesce in the status quo, and just let the Fed keep printing dollars into oblivion. Here, theoretically, dollar recycling into financial-instrument blackholes would allow the perpetuation of the system, as dollars are kept out of pricing goods and services. This is what the Fed is likely going to do (to prevent derivative's whoopsies, and keep the dreaded deflation at bay), but the dollar holders will surely begin dumping them by the shovel-full at some point, and this will bid up the real world costs of things we make and do. This point will most probably be the day that the stuff we really, really need (oil) starts to become prohibitively expensive.

That day indeed may not be brought on by Mid-East producers suddenly demanding higher prices out of the blue, and without clear and compelling cause to the public. It may well follow the very template I've outlined above. Just look at the dilemma of oil companies right now, as they are on the grill. None of them are even trying to explain the currency issues, and macro-economic reasons behind oil prices rising. All the conversation is orbiting a very small micro-economic universe. This is all the public is focusing on (just listen to the talk shows). The micro issues themselves are difficult enough for people to get their arms around, since most don't spend any time delving into them normally (why should they?). Yet, suddenly water-cooler expertise now includes gasoline refining processes, and oil grade differentiation among its repertory. Brought to critical mass, this semi-informed pressure will inevitably force itself in the wrong direction, and to the wrong conclusions. The current mood is for the Government to fix everything. Perhaps under the banner of the "national security," things like the current Big Oil inquisition will find the industry again reeling under the burden of ever more heavy-handed, clumsy Big Government regulation. Price caps, the ever-popular "windfall profits" extortions, and legions of newly-hired government "regulators" poking into every nook and sphincter they can find. All this to the delight of the public, and oil-hating politicians... This of course is just shooting ourselves in both feet. The subsequent additional trauma to our economy could bring about such justifiable and obvious reasons for discrediting our dollar, that we may no longer be capable of crying foul about oil producing nations wanting more dollars for their product.

This is the way the world ends, not with a bang, but a FOX News opinion poll...

Many people who follow this stuff are all looking for what the last straw will be. Perhaps this be it? And driven not by back-room machinations, or even the indiscreet emissions of someone's hedge book, but by the brazen demands of the general public at large, unwittingly asking for its legs to be lopped off at the knees. How sad, yet (at least in my mind) how very, very plausible...

All the best, (what is it now? 87 days and counting to privately obtain the precious yellow...?)

btw... Mr. Gresham @ 74670 - You, good Sir, are truly an asset and a blessing to this forum... Thank you for your feedback and comments to so many different posters. It is something we all deal with, wondering whether anybody "really reads this stuff..." What takes 2 minutes to glance through may have taken someone 5 hours of precious time from "real life" to compose... Notwithstanding the cathartic benefits of having somewhere to communicate, what no one around us in real life cares about, it is so very beneficial to have feedback. Hopefully it is positive, but even sincere requests for clarification, or cool-headed, friendly argument are sought by most. So again, thank you...

CoBra(too)After Cold Wars - It's Gold Wars #7468805/01/02; 13:58:58

Or is it just that we'll all go to Mars or the Stars as old Frankie Boy sung of Grace Kelly - the latter, though still late Duchess of Grimaldi of Monaco.

- Anyway- all seems possible as at the blink of (who's, BTW) eye, the SM's turn around and list their first meaningful adavance in a while. After all its the first of May - a typical socialistic/communistic labor day - and that's where probably all the jobs are to be found - anyway ... far away from the western ex- capitalistic, free-market- trade and globalistic post industrial societies - who in hell would need them please? ... as we thrive on services of the financial gender, mostly - remember GE and its costly de-(activating)productivity ..., with glee I'm watching the footsteps of GI-ants waging a global s'WAT to the detriment of liberty, truth and decency ... So WAT - a global threat to whom, by whom and for/or against whom? ... Do you know? No, and so I can only speculate against all and in particular "humanity" - and I hope to be wrong! too ... cb2

Black BladeRe: Pizz and sourdough – ABX Earnings?#7468905/01/02; 14:13:30

It is very difficult to find "net earnings" in Barrick's financial statements. I have tried in the past by digging into their 10-Q's. They tend to report "operating earnings" which is essentially the same as Pro Forma earnings. These are earnings "before all the bad stuff" – like maintenance costs, certain capital costs, etc. That is why it is so difficult to get a handle on the true earnings. Even with this favorable treatment on the earnings statement, they were unable to meet lowered earnings estimates although the POG has been rising. I noticed that Placer Dome (and others) has done the same kind of phoney accounting in the past but I am not aware of how they are reporting lately. Simply put – this kind of accounting is deceptive when investors really want to see the actual bottom line.


- Black Blade

Gandalf the WhiteYES, CB2 -- It's NOW Gold Wars !!!#7469005/01/02; 14:22:55

CoBra(too) (05/01/02; 13:58:58MT - msg#: 74688)
After Cold Wars - It's Gold Wars
Sorry, no time to chat, just like Mr. G., --- only had time to screen the Forum -- The Paper Gold guys had control of the COMEX after "Noon NY" today --- BUT things are HEATING UP and SPIKE is getting rested for the BIG JUMP !!
Like Aragorn III spoke about, "THUNDER IN THE NIGHT" !!!
Is everyone ready ?
Off to see what the Nazguls are about (Swing Shift).

Black BladeGold bulls see further big gains#7469105/01/02; 14:38:51

Questions arise about hedging at Barrick Gold


Barrick failed to meet Wall Street earnings expectations Wednesday. In their conference call, Barrick executives fielded numerous analysts' questions about the company's hedged sales of gold, a strategy seen by some as risky if bullion prices rise sharply. Those questions, from JP Morgan, Goldman Sachs and others, were met by Barrick executives who assured investors they were monitoring the situation.

Barrick said that for the remainder of this year it will sell half its gold production in the so-called "spot-deferred market" and half in the spot market. The company said its delivery of the metal for hedged sales fell a net 200,000 ounces. Investors increasingly are demanding that gold companies sell their ounces in the spot market, thus reducing any global selling pressure of the metal and eliminating complex accounting practices linked to hedged sales.

Barrick and others use "written calls," options contracts, and other derivative devices to hedge against possible falls in gold's price. Douglas Pollitt of Pollitt & Co. in Toronto says Barrick's confusing account statements may make investors nervous. "The real story here is how they are turning their written calls into Variable Price Contracts, which no one really understands," Pollitt said after the Barrick conference call. "Why not seek absolute transparency?"

Black Blade: It appears that the Barrick conference call did not go over very well. The practice of shorting Gold by a Gold miner has raised a lot of concern lately in the investment community and for good reason. Mega-Hedger AngloGold has been unwinding their hedge book since they lost out on the Newmont-Franco bidding war for Aussie miner Normandy. The day of the hedger is over. Forward sales make no sense in a rising Gold price environment.

AristotleA tale of two investment mindsets#7469205/01/02; 14:46:40

If you were a wealthy man and wanted a secure position in, say, a strongbox containing 100 kilograms of Gold Sovereigns, then to accomplish that goal you'd have to pay the market price. It's a simple and obvious concept, and today it would cost you around One Million Dollars. You'd then have clear ownership of a very impressive box of wealth, yours through thick and thin to use as you'd please.

In your mind's eye you envisioned an appropriate quantity of Gold for your personal circumstances of wealth, and so you bought it (that being the standard way of getting things, you know.)

Then one day your close friend says to you, "Hey, I see the Gold market is really heating up these days. You were sure smart to buy Gold like you did back there. Ya know, I've been thinking a lot, too, lately... about putting $1 million into Gold. When do you think I should do it?"

"Well," you reply, "if your goal is to put One Million Dollars into Gold, then the timing really doesn't matter at all. What I mean is, assuming you've got the money, you can do it at any time, so you might as well do it whenever it is most convenient for you."

He looks at you inquisitively, having expected somewhat more sophisticated investment advice about market movements and timing. You take note of his dull expression, so you decide to elaborate.

You continue, "Look, putting One Million Dollars into Gold is very easy. But on that matter, really, who am I to talk -- I've never done it." You smile.

"But I've seen your Gold!" he protests. "I thought-"

"You thought I had put One Million into the Gold. I didn't." You explain, "What I actually did was this: I set out to buy 100 kilograms, I chose Gold Sovereigns, I paid the nice man at Centennial Precious Metals. The bill came to One Million Dollars."

"That's what I've been saying," says your friend. "You put $1 million into Gold..."

"No," you interject. "You're not listening to what I'm saying. Here it is again. For my financial security I had an interest to buy over twelve thousand Sovereigns. That's what I did. It happened to cost $1 million. You, on the other hand, simply want to put One Million of your Dollars into Gold. You can do that at ANY time, now or in the future. So what I'm saying to you is to do it whenever it happens to be convenient for you to do it."

"Huh?" shrugs your friend.

"Look," you say, "carrying about 50 pounds at a time, it took me four trips back and forth to the truck to carry in all my Gold to my vault. Oh, my back! But that was then, and this is now. As you've already noticed and pointed out, the Gold Market is indeed heating up. I'm guessing that if your willing to wait a while to convert your target of One Million Dollars into Gold, you might be able to carry your Gold home easily in a small thin paper bag, with room to spare for an sandwich and an apple for lunch along the way. Quite convenient, indeed!"

Gold. Get you some while it's still inconveniently heavy for the price. --- Aristotle

miner49erWhat is the sound of one currency inflating...?#7469305/01/02; 14:50:50

btw... fwiw...

The last 5 business days' "temporary" open market operations from the Fed: (the second link is to the HOF posting of the inestimable TownCrier - an excellent lesson on repurchase agreements...)

5-01: $8 billion
4-30: $5 billion
4-29: $7.5 billion
4-26: $6 billion
4-25: $5 billion 28 day RPs + $5.5 billion ovenights

bail out souring bets, stave off crunching credit, and rocket fuel for the market indexes...

UsulBoom-bust fears after biggest monthly rise#7469405/01/02; 15:12:18,3604,707925,00.html

"The news that the price of an average home has now topped the £100,000 mark came hours after the Bank of England's deputy governor, David Clementi, said there was no "bubble" in the property market and hinted that interest rates were not about to rise because of house prices...

"The Nationwide said that after adjusting for inflation, average prices were now for the first time higher than they were at the previous peak reached in the summer of 1989 during the final days of the "Lawson boom". In the five years that followed, 400,000 homes were repossessed and one in four property owners fell into negative equity as prices fell steadily."

JadeUS Dollar Index#7469505/01/02; 15:12:34

This is the time to keep a weary eye on the US Dollar Index. We have a major juncture at this date. The sloping upward support line for the dollar for about the last 10 years was resting on 115 Tuesday [which has not been penetrated]. The sloping upward support line from the year 2000 was resting on 115 on Tuesday [which also has not been penetrated]. The downward trend channel for the last four months has the bottom of that channel resting on 115 [and also has not been penetrated to further downside]. Today at 114.6, we broke through all "three" of these trend lines at this juncture every so slightly. The fact is, we broke through. There is no doubt many FX traders will be looking at the charts tonight [with a weary eye on the USD Index action over the next 48 hours]. No need to tell you what this may do to the price of Spot Gold here.
Solomon WeaverNice little story Ari#7469605/01/02; 15:13:20

Very yes to two posts down.

We kings and philosophers of old have the same minds.


RockThe Tale of two investment mindsets#7469705/01/02; 15:44:58


Very well put Aristolle, the moral of the story is when the USD is only worth about 20 cents buying a million dollars worth of gold isn't going to go far. He certainly isn't going to get 12,000 gold Sovereigns with his million like the other guy did. What took you three trips to the truck to get to your vault will only take him one trip with a brown paper bag. LOL that was a good one.

Sir Rock

BoxmanAristotle messege #74692#7469805/01/02; 15:49:17

"Gold. Get you some while it's still inconveniently heavy for the price. --- Aristotle"

That has got to be the best line of the year. A real keeper. Thanks for the chuckle.

CanuckBig rumour stirring#7469905/01/02; 15:53:20

A note to Canuck friends near Ottawa.

An informed buddy big in the freight/shipping business informed me today that 50 cargo/freight ships have arrived in Montreal.

Rumour is stirring that a major tech firm in Ottawa is pulling the plug and heading back to Europe. I asked him who he had his eyes on.

He said no way to be sure on any of the rumour, too early to be placing bets, but his first guess was Alcatel.

If true, whomever it is, it will murder 'silcon valley north'.

I'll keep my ears open.

The Invisible HandGATA negates property rights#7470005/01/02; 16:42:25

I'm sorry, I'm late, I've been away in the last 24 hours, but
"[GATA] Press release on suit against Kinross by Berger & Montague and Reg Howe"
"Since the 1998 merger pursuant to which Kinross acquired
control of Kinam, as alleged in the complaint, Kinross has
consistently and repeatedly acted to impair the value of
Kinam Preferred Stock in order to facilitate a subsequent
purchase at an unfair price, culminating in the coercive
and illegal Tender Offer of February-March 2002."

I worry:
If the value of the stock has been impaired why did the holders not sell their stock?
What's an unfair price? Earlier the press release said that Kinross violated the "best price rule" promulgated under Section 13(e) of the Securities Exchange Act of 1934. Is the best price the same as a fair price? Or is the best price the price before the action to impair the value of the stock and the fair price then the price resulting from the impairment? Who can determine this? By what standards?

I wonder what gold stands for in GATA's eyes, but for me it doesn't stand for the allegations against Kinross.

And the email to contact Berger & Montague, P.C. is This email address is being protected from spambots. You need JavaScript enabled to view it. . How can investors be protected if their property rights, including their right to sell, are not recognized?

BelgianGold Wars#7470105/01/02; 17:44:38

Today's strong dollar-decline NOT compensated with POG rise !? Strange !
Who is selling the dollar, with how much power and what target ?
What about the short positions (5.000 >>> 26.000 mt) of the bank-cartel (Deutsche/JPM-C/GS etc) ? Howhowww.
This must be a conflicting situation for at least one side of the equation. A too fast declining dollar not correctly corresponding with expiry dates on the massive derivative short positions on Gold !
Could we see both dollar and Gold declining ? If so, someone will use declining dollar-reserves to buy Gold at spot and provoke POG rise for compensation ? Or am I jumping too fast to conclusions/suppositions and is the today's anomaly due to 1 of may inactivity in Europ ? Thoughts anyone ?

Black BladeUS Dollar Diving!#7470205/01/02; 17:55:59

Has anyone been watching the US Dollar Index plunge today? It has fallen sharply below 115. This is definitely going to be positive for Gold.

- Black Blade

Black BladeU.S. Banks Curb Corporate Loans in Steepest Decline in 30 Years#7470305/01/02; 18:11:25


New York, May 1 (Bloomberg) -- U.S. banks have been hitting the brakes on loans to companies harder than at any time in at least three decades, tightening standards and refusing to finance businesses that don't retain them for other services.

Black Blade: This shows how much confidence the banks have in the US "economic recovery". Of course we already know that the economic recession is deepening and certainly corporate earnings have failed to materialize. Without consumer spending and companies burdened under crushing record debt, it is no wonder then that US banks are tightening their standards for loans. So while the bankers Wall Street pimps bark that all is well, just pay attention to what they do. This recession is poised for further decline. There is no fundamental reasoning that suggests otherwise.

Black BladeProbe of analysts reportedly widens#7470405/01/02; 18:17:44

SEC seen asking 10 firms for data


WASHINGTON - Amid reports that regulators are asking 10 major Wall Street firms for information about their research policies, the head of the Securities and Exchange Commision said yesterday there was enough ''questionable conduct'' by Wall Street analysts to merit an inquiry into whether fraud was committed.

Harvey Pitt, chairman of the Securities and Exchange Commission, spoke in a television interview a few days after the SEC launched an investigation to determine whether analysts rated certain stocks highly just so their firms could obtain lucrative investment-banking business. ''I think that there is evidence of enough questionable conduct that we owe it to the public to satisfy ourselves'' whether there was fraud, Pitt told the CNBC financial television network.

Pitt's comments come as the SEC begins ramping up its inquiry and top Merrill Lynch & Co. executives prepare to meet with New York Attorney General Eliot Spitzer this week to present a settlement offer, people with knowledge of the matters told The Wall Street Journal. Spitzer and the SEC are looking into whether investment houses, such as Merrill Lynch, Salomon Smith Barney, and Morgan Stanley Dean Witter, mislead investors with overly optimistic research on companies that also did business with their investment banking documents.

Black Blade: Note that New York has its own investigation underway. The obvious conclusion is that there will be many lawsuits against the Wall Street investment houses. This could become bigger than asbestos and tobacco litigation. This story has a long way to go. Wait until more dirt is dug up as these investigations proceed.

Black BladeUSD Index Chart#7470505/01/02; 18:20:27

Take a look now before the chart switches over the next 24 hours. The huge dive of the USD!

- Black Blade

Chris PowellBarrick moving on AngloGold, explaining Anglo's strange talk#7470605/01/02; 18:42:32

Barrick moves on AngloGold, explaining
AngloGold's talking up the gold price
before it finishes covering its shorts.

To subscribe to GATA's dispatches
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Black BladeNatural gas futures prices rise as oil prices drop #7470705/01/02; 18:49:00


HOUSTON, May 1 -- The June contract for natural gas jumped by 23.4¢ to $3.80/Mcf Tuesday on the New York Mercantile Exchange, but other petroleum futures prices were down. The NYMEX June crude oil contract fell 28¢ to $27.29/bbl, while the July position lost 19¢ to $26.93/bbl.

After the close of the NYMEX session, officials of the American Petroleum Institute reported US crude inventories increased by 7.6 million bbl last week to 325.6 million bbl. Distillate stocks also were up by 2.7 million bbl to 121.2 million bbl. However, with the nation poised for the start of the summer driving season, US gasoline stocks dropped 1.6 million bbl to 210.5 million bbl.

Black Blade: Note – even though injection increased last week by 38 bcf, that is slightly more than half of the prior weeks injection. Also, as storage levels are much higher, this has much to do with several new storage facilities in the wake of last years energy crisis. With lower NG exploration and production there has been essentially a transfer NG from existing wells to storage and very little increase in reserves. This is an unsustainable situation that will lead to additional future price spikes when supply is drawn down and few new wells are in production. Currently NG is at $3.70 Mbtu.

Solomon WeaverUSD Forest for the Trees#7470805/01/02; 18:49:58

Hey Black Blade

Yes...looking at the 24 hours scale on NYBOT DXY really does look like going over niagra falls.

To get a little perspective, I walked the plank out each time increment to 1 yr on the chart options and noticed that the chart of the last month, since we broke below the 50 day moving average is a lot like the month of Jul 15-
Aug 15 2001 since we broke the 50 day before.

113 seems to have been an interesting support....and then just as we were heading for new lows...Sept 11 came along and the trend is reversed.

It makes me wonder if another terrorist event happened today if the world would run back into the dollar.

Poor old Solomon

PizzBelgian#7470905/01/02; 18:59:26

Re: Dollar Sell Off

It appears that Sec. O'Neil did not defend a strong dollar policy at the Senate today. His basic comments were no comment with the reasoning that he would not give speculators ammunition.

My feel is the speculators are getting out.

As far as gold not going up accordingly, same old story -trench warfare and close combat. The shorts have their back upagainst a 310 311 wall with a fair size abyss behind it???

Same with DOW. Feels like foreign money (that's a guess on my part)or big US money may be moving to calmer waters. Pressure on all markets right now.


YGMBarrick, Anglo & Godsell#7471005/01/02; 19:04:28

& the GATA CREW.....

Things in Gold's world are getting more explosive by the week.....Makes you wonder what's next.....Not just interesting times but now "Exciting" as well....

Gold Advocates owe a great deal to Bill, Chris, Reg, & GATA in the mix of all we now see and hear.....



Solomon WeaverJim Pupluva's Market Update is quite rich today#7471105/01/02; 19:17:27

Don't miss today's comments....

I also realized in reading them that most of my friends and co-workers would think he's crazy....but just like Black Blade...he nails everything to the wall.


Black BladeRiders On The Storm - Puplava#7471205/01/02; 19:33:45

Energy Will Be A Permanent Problem


This time around, our energy crisis is not temporary. It will become permanent unless we do something about it. Unless we solve it, our future prosperity and that of the world could become imperiled. We have been fortunate in the U.S. in that our excess demand for energy has been supplied by imports from OPEC and other foreign producers. This has come at the expense of a deteriorating trade deficit. However, a day is coming in the not too distant future when our voracious appetite for energy will compete against the demands from emerging world economies. The desire of growing populations in lesser-developed nations to maintain and increase their standard of living intensifies the demand on the world's mineral resources. The United States, with only 5% of the world's population, uses about a third of the globe's annual energy supplies. As we import more of our energy and raw materials (resources in which we were once self-sufficient), we will increasingly lose control over our future economic destiny. Many in the U.S. just don't get it. The era of cheap and abundant energy is gone.

Energy and minerals are the basis of our modern civilization. Without these resources, nations are doomed to remain at poverty levels. If denied access to supplies, countries will either resign themselves to a position of poverty or as in the case of Japan in 1941, go to war. With no new frontiers to explore, nations will continuously face conflicts and jostle for position for access to the earth's raw materials. Future military conflicts like the Gulf War and the current conflict in the Middle East will be over access to the earth's remaining resources of energy, water, fertile soil and other base minerals. It is for these reasons that we must begin now to solve this crisis. The severity of a recession, or the strength of a recovery, will depend on the job that is done.

Black Blade: Puplava tackles a boatload of information in this Storm Watch update. Not just energy, but debt, corporate spending, etc. In short he presents his case against an economic recovery. As I have been hitting hard on myself for since 1998. This is the culmination of a series of events that are converging to form the "Perfect Storm". Definitely well worth reading – warning – it is long and covers quite a bit of material.

BTW, I see he gives a thumbs up to USAGOLD at the bottom of the page.

Black BladeStates Pressing Analyst Probe #7471305/01/02; 20:10:00


State regulators are moving ahead with a coordinated investigation of conflicts of interest among stock analysts on Wall Street, sources said yesterday, to the dismay of the securities industry, which is backing a Securities and Exchange Commission-led probe of the issue. Officials from at least five states -- New Jersey, Connecticut, California, Alabama and Massachusetts -- spent a day last week with representatives of the office of New York Attorney General Eliot Spitzer to study his work on Merrill Lynch & Co., the sources said.

Black Blade: First it was the SEC, then New York, and now more states are getting onboard. It looks like a massive deluge of lawsuits, fines and possible prison sentences are in the offing.

Black BladeArgentina Pays Record 95% Rate at Central Bank Debt Auction#7471405/01/02; 20:17:40


Buenos Aires, April 30 (Bloomberg) -- Argentina's central bank paid a record 95 percent interest rate to sell 61 million pesos ($20.7 million) of 15-day bills yesterday to help shore up the currency.

Black Blade: From the frying pan into the fire.

BTW, the USD is weakening further.

Solomon WeaverWhere liquid dollars are flowing in from#7471505/01/02; 20:56:21

2/3 of all homeowners have gone to the fountain of second mortgages


Gauntlet-Runner2("GR2")I won't eat at the following restaurants:#7471605/01/02; 21:10:47

A basic warning about Eco Bay. Watching large block orders coming across all yesterday and today. MM was not refreshing his ask. (means he has like an unlimited amount of float for sale) So it's going the way of Crystalex down for the count. Top execs wanted to raise near $20 million to reduce debt by floating more sheers out. Why can't they just work for a living. Anyway, it's new junk like the old junk. Newmont came in and took Eco's silver mine and did a 100 million debt for sticks swap. Now why would Newmont go for the silver mine when probably it could have gone after any of the other gold mines that Eco had? Must be some important silver in them hills. With US western electricity costs being so high, that is going to factor in to recovery cost of revenue. I'm jest a warning ye of the 10Q and 10K's statements that can be taken either way. Double talk is becoming profound in them. Every minor miner has some fly in the ointment. It's can they flick it out with some operation in a third world area where they can get away with using the giant trucks and super scoops. TVX is going to have a tough time trying to mine the Olympias project with the threat of the town above collapsing into the "project". How many millions did the "godfathers" reep on that one. Turn it into an olive grove. With the hope of a ten for one reverse split, wow, I get less and it's more. No, not for me. Another MM with megafloat to pawn off.
But no flunkie miner review is complete without a mention of Las Christas, the problem child with a multiple split personality. Gold Reserve does have a valid claim to its Brisas consession IF the CVG "feels" good enough about it to not take them into its kangaroo court. Vanessa (not the babe) just the small open door for Placer Dome's "back entrance". CVG was crying when Placer pulled out, Vanessa isn't rich enough to steal from. Anyway, who is going to clean up all the mercury spillage that covers the Cristas toxic waste site? Wildcaters seem to leave a practical joke behind. Then what amazes me when they calculate production costs with 95 cent per pound copper, billions of tons of copper. So do we cover the earth with copper cookware? Extra copper plumbing for the cold water side? The price of copper isn't going to skyrocket with a post 1929 world recession??? Oh, but this is a semi-semi precious metal the copper is, and the world needs more and more now that we are going to fiber optic cables made of glass. Well it's a TKOCF sort of thing and the public just doesn't understand. "Talk like a goldmine, walk in circles like a copper pit". Place-your-dime on the big copper price wheel and that's all Placer Dome is, a multinational copper biz dancing with the goldminers but it can't get in step. Well, when you see the sun come up tomarrow it's really beemin bright. Take refuge Juliete its all going into the bank.

sourdoughTrizezhahn exchangeable debentures (ABX)30 million shares#7471705/01/02; 21:35:13

I found the paper related to exchangeable debentures issued by Trizechahn.
They appear to be exchangeable by the holder at 32 ABX shares per U.S. $1000 on the first 8.9 million shares.
The other debentureS have a rate of 52 ABX shares per U.S. $1000.
They secured a loan by pledging over 30 million shares of Barrick.
It appears they have an option to exchange cash for the shares at the then present rate.
So, somebody has a lean on 30 million Barrick shares.
As Trizechahn reorganizes I naturally wondered if they were having troubles.
When Gold runs,
Will TRIZEC be in a position to hang on the shares?
How much money is likely to be made on those shares?
How much "clout" would a 30 million share holder have/HAD over ABX hedging policy?
Myself, I thought this loan structure could have implications that more than meet the eye.
I would appreciate if someone could take a look at the loan and comment if I have understood correctly.

Gauntlet-Runner2("GR2")While they're going up, they're still go down#7471805/01/02; 21:46:56

A currency gaining strength attracts foreign capital. A weakening currency repels foreign investment.

How many of the market analysis wizards understand that a falling dollar pulls a vacume on every equity listing including the index options, including bonds, including real estate in USA. Hence the beginning of the bull market in commodities of which GOLD is king.

The entire capitalization of all the goldmines in the world is less than the price of McDonalds corp. (50 billion) So when do we see millions of ounces served daily? I try to tell people about gold so they don't get hurt in the next big crash, but they haven't a clue and think you're nuts for speaking of reality.

sourdoughTrizezhahn exchangeable debentures (ABX)30 million shares#747195/2/02; 00:44:07

Can anyone make the argument that Munk, aka Trizechahn would prefer that ABX does not climb in price to be in the money on these debentures?
Can the same be said for any increase in the ABX dividend?
Dividend (ABX) is a factor in determining interest rate of debentures.
If gold were to rise and carry ABX with it into and above exhange rate, Munk would be at risk of either losing the 30 million ABX shares and the capital gain, or if he wanted to keep them, it would cost the higher price.
It would appear to me that the best thing for Trizechahn would be that gold and Barrick just stumble along at a price low enough to prevent exercise and necessity for Barrick to increase the dividend until the time they can pay back the loan.
This would be a good deal on interest rates if things don`t get out of hand and the gold price doesn`t drag Barrick up to high.
Can anybody see it this way, besides me?

UsulRich finds in volcanoes#747205/2/02; 01:07:31

"The submarine mountains contained some of the world's richest mineral deposits, including copper, lead and zinc, and gold at six parts per million - twice the ratio of gold mined at Macraes Flat near Dunedin"
UsulTokyo hits back at downgrade#747215/2/02; 01:28:24

"The Ministry of Finance has sent a letter of complaint to Standard and Poor's and Moody's, questioning their objectivity and reliability...

"Your explanations regarding rating decisions are mostly qualitative in nature and lack objective criteria, which invite questions about the larger issue of the reliability of ratings itself," a summary of his letter said."

UsulHow Wall Street's Analysts Fooled Public on Verisign#747225/2/02; 01:31:22

"Even after their research is proven wrong, analysts are fooling with the facts to make it look as if they got clients out of the way of a collapsing stock..."
UsulStock market in dead-cat bounce#747235/2/02; 01:32:44

"...nothing more than a bear market rally..."
UsulDow breaks 10,000#747245/2/02; 01:34:17

Aaaaargh! It's deja vu all over again!
UsulFiber-Optic Overdose Racks Up Casualties #747255/2/02; 01:40:02

" "We may have put 80 years' worth of capital into the ground," said Vince Tobkin, director of the technology practice at consulting firm Bain & Co., referring to a massive installation of underground fiber-optic networks..."

"In time, however, Wall Street and the banks began to realize that the telecom overcapacity was so profound (less than 10 percent of all that fiber-optic wire is being used, for example), and unit prices were falling so fast (the cost of a cellular minute fell 25 percent in a year), that it was unlikely anyone was going to make any money anytime soon"

The overcapacity, malinvestment and corruption caused by a boom/bubble/bull of such magnitude will not be purged overnight! The bust will be pro-rata, IMHO. (Oh yes, and gold should serve well to preserve wealth in such an environment).

SpartacusO'Neill Unbowed on Dollar #747265/2/02; 01:41:44

By Paul Blustein
Washington Post Staff Writer
Thursday, May 2, 2002

Practically everyone who spoke at a Senate hearing yesterday agreed that the U.S. dollar is too strong and that America's trade deficit is dangerously high – everyone, that is, except the man who mattered most, Treasury Secretary Paul H. O'Neill.

And at the beginning of his testimony, he made it clear that he wasn't about to depart from his support for the policy, first articulated during the Clinton administration, that a strong dollar is in America's interest. The strength of the dollar against the Japanese yen, euro and other currencies makes U.S. exports more expensive on world markets and makes imports cheap, thereby causing the trade gap to widen. But O'Neill said he wouldn't alter his position.

"As I read the wire clips from around the world this morning, there's apparently some breathless anticipation [in currency markets] that I'm going to say something to intentionally indicate a change in policy position or direction," he told the panel. "I want to assure you at the outset, whatever I may say, that is not the intent."

SpartacusBritish funds cut U.S. holdings, go euro#747275/2/02; 01:50:09

LONDON, April 30 (Reuters) - British fund managers are shaving back exposure to U.S. assets in favour of the euro zone, driven by concerns that despite an economic recovery U.S. profits will not grow fast enough to justify valuations.
Usul"Bush administration... could default..."#747285/2/02; 01:57:59

"Faced with a plunge in tax receipts, the Bush administration will run out of ways to maneuver around the federal debt ceiling and could default on payments to bondholders on June 28, sooner than previously expected, a senior Treasury official said yesterday"

Does this spell increasing risk? Yields are compensation for risk - and here, circumstances are pointing towards raised interest rates. As Bill Gross of Pimco (no small-time money manager) has pointed out, nonfinancial corporate sector debt as a percentage of cash flow has risen to record highs, and they have apparently moved to short-term debt which is over-sensitive to rate hikes, thus putting Greenspan between a rock and a hard place. He is loath to raise rates because that would increase interest repayments big time, affecting both corporate and private sectors who have loaded up on cheap debt. But in being so constrained, he is asking for inflation to break loose. Yet if he raises rates too much, interest repayments will kill the retail economy stone dead. Greeny is balanced on a knife edge between an inflationary or deflationary recession. Gold should be useful to preserve wealth in either environment, IMHO!

"Does Greenspan dare do more in this next tightening cycle? Nay – he will do less once the 9/11 emergency reductions have been taken back to a more normal 3% or so. Too many big time 'players' on the short side. The systemic risk is certainly anything but de minimus... And because Greenspan must keep short rates relatively low, the risk of inflation in future years will be greater than otherwise..." - William H. Gross, April 2002

Black BladeOil Falls as Arafat Emerges From Compound#747295/2/02; 03:15:52


SINGAPORE (Reuters) - Oil prices fell about one percent on Thursday as Israel ended a siege of Palestinian headquarters in Ramallah, easing fears of a spread of violence and potential supply disruptions from the oil-rich Middle East.

Black Blade: I wonder if he saw his shadow? If he did does that mean 6 more weeks of winter?

Spartacusthe Indian gold market #747305/2/02; 04:14:21

Gold Shortage Now
George Walker
May 02, 2002

--It is absolutely fascinating to observe what is currently occurring in the world gold markets, as suddenly there seems to be a notable gold shortage. I estimate the shortage to be somewhere in the neighborhood of a 300 plus tonne annual deficit range. That is a rate of 25 tonnes per month. This shortage can be readily confirmed by monitoring the Indian gold market.--

CanuckGodsell out of WGC, Chris Thompson in#747315/2/02; 04:30:48

"German buying being a significant factor was first brought to my attention by way of Chris Thompson of Gold Fields Ltd. As he is now replacing Bobby Godsell of Anglogold as head of the WGC, I would assume that he knows what he is talking about"


I was unaware of this!! This is good news.

TopazNo pressure, if lease rates are a guide.#747325/2/02; 04:47:05

Lease rates have laughed off the current uptick - which indicates most of the momentum has been created in the many forms of paper investments available to the "astute" Gold investor....sheesh!
On another front, Koisumi san has just completed a visit to Australia. Apart from the now mandatory visit to a War Museum, he discussed a Free Trade agreement with OZ. (thats the give us your resources....for FREE) however this time I feel it's different -
His visit comes hot on the heels of a Chinese Delegation - last week - and US noises re Free Trade of late.
Looks like World trade is Polarising into an US-v-Them situation quite quickly.

Black BladeDollar Stays on Defensive#747335/2/02; 04:51:45


LONDON (Reuters) - The dollar struggled to pull off multi-month lows against the euro and the yen on Thursday as doubts over the United States' commitment to a strong currency persisted.

"We have seen a complete sea-change in sentiment toward the dollar, and people are now just looking for excuses to sell," said Neal Kimberley, manager at Bank of Tokyo-Mitsubishi in London.

The greenback, already reeling on concerns over the pace of U.S. recovery, suffered one of its biggest one-day falls this year on Wednesday after U.S. Treasury Secretary Paul O'Neill failed to convince markets over his country's commitment to a strong dollar policy.

Black Blade: The USD must weaken in order to narrow the booming trade deficit. Exporters can not compete in foreign markets and at the same time the recession deepens.

Topaz@Canuck#747345/2/02; 05:14:20

Perhaps we may see a shift from promoting "value-adding to the Barbarous relic" eh? ...good link.
Black BladeIEA Urges U.S. to Boost Production#747355/2/02; 05:30:07


PARIS (AP) — The United States must increase production of oil and natural gas if the country is to meet its future growth in energy demand and reduce its dependence on imports, the International Energy Agency said Tuesday. ``A secure energy supply is essential to underpin economic growth,'' IEA Executive Director Robert Priddle told a news conference, after the agency released its review of U.S energy policies.

The Paris-based agency said current domestic production of natural gas — which is growing at 4 percent a year — was not enough to meet growing demand, and urged the United States to step up drilling in new areas both onshore and offshore. ``We'd like to see an opening up of the Arctic reserves in an environmentally sensitive way, because the U.S. needs new sources of supply,'' Priddle said.

The IEA also encouraged the re-licensing of existing nuclear power plants in the United States, saying that it would ensure a continuing, substantial component in power production. No nuclear plants have been constructed there since 1973.

Black Blade: Even the IEA (a French organization) understands that the supply of energy is important to the US economy and also a national security issue.

LeSinGold Dinar + Islamic Financial Principles @ "The Times They Are a Changing"#747365/2/02; 06:50:32

Thursday May 2, 3:29 am Eastern Time
10 Central Banks To Form Advisory Body On Islamic Financial Services

SINGAPORE -(Dow Jones)- Central bankers from 10 Islamic countries have agreed to form an umbrella advisory body based in Kuala Lumpur to promote the application of Islamic law in their financial services industries.

The Islamic Financial Services Board, or IFSB, will set principles and adapt existing international standards consistent with Islamic law, or Shariah, according to a news release from the International Monetary Fund.

The agreement, reached on the sidelines of the recent IMF and World Bank meetings in Washington , D.C ., concludes two years of talks among the central bankers, the Islamic Development Bank and the Accounting and Auditing Organization for Islamic Financial Institutions....



"Malaysia plans to initially use gold dinar within small group "

"MALAYSIA plans to initially use the gold dinar as a currency for trading with a small group of countries, in the hope it would slowly gain international acceptance.
"We are trying to work it out with three or four countries that we have close ties with,’’ said Prime Minister Mahathir Mohamad, who proposed the system last month to reduce the risk of speculation in bilateral trading. "

"The Arab and Gulf states ... maybe they'll accept it,Ehe told reporters after attending a Labour Day function in Kuala Lumpur yesterday."

"Some Islamic countries have proposed using the dinar, which is a gold-backed standard, in international trade instead of the US dollar. "

"The prime minister, who recently visited Libya, Bahrain and Morocco, said the three countries had responded enthusiastically to the plan."

"He said however that no deadline had been set for the launch."

"We have to solve the problems first. There will be lots of problems,EDr Mahathir said, adding that Malaysia intended to host an international conference on the subject."

"He said gold was also open to some risk of speculation but it was safer than conventional currency, which had no intrinsic value and could be manipulated indefinitely. "

"You cannot speculate too much in the price"

LeSin"Some Islamic countries have proposed using the dinar, which is a gold-backed standard, in international trade instead of the US dollar. "#747375/2/02; 06:55:20

GOLD - "InStead of the US$"

Worth Repeating - sort of drives the message home,yes?

"Some Islamic countries have proposed using the dinar, which is a gold-backed standard, in international trade instead of the US dollar. "

Cheers "S"

nickel62Watching the Swisss lower rates and their Franc sink in currency markets...made me think!#747385/2/02; 07:09:44

The power that the world has given the US dollar to be the determinate of foreign trade has loosed a terrible tyranny in the world.
The current global trading structure allows the US and it's paper reserve currency the power to determine what the competitive position of all the world's people will be. As long as the US Federal Reserve is allowed to continue their relative monopoly on what is money they can force the rest of their trading partners to do things that may not be in the longterm best interests of those partners economies or their people.

When we can bubble our stock valuations and at the same time put downward pressure on the spot prices of any commodity we chose, the trading/banker establishment in the US can effectively vacuum up the value added from all those other countries that we trade with.They demand that our trading partners recycle their US dollar earnings from exporting to the US to be invested in US Treasury securities which lowers US interest rates even further, or they will be excluded from our domestic markets. They create freely floating currencies that allow them to determine the cost competiveness of all countries by changing the cost basis of the production and they fuel their own production by lending dollars to buy more US dollar denominated machinery and other production inputs at the then prevailing currency exchange rate.

By setting the spot price of commodities through market pressure acheived with unlimited leverage from Derivatives and unlimited US dollar credit creation the US can "set" the price of any commodity or currency at a price which doesn't even allow for the coverage of the costs of production of that product. This effectively makes the producers of these commodities slaves producing for a market in the US that pays them less than it costs them to produce these products if the true costs of the capital investment inputs are taken into account.

By controlling this process the transfer becomes a form of servitude. IF a country like Switzerland wants to fight against this process we will simply allow their currency to appreciate and their export industries become uncompetitive. If they fight the US dollar hegemony of these markets they will be destroyed by their own strong currency. If they argue about the gold dishoarding they will be rewarded with a Swiss Franc so highly valued their economies will suffer.

So our colonialism becomes irresistable for even the strongest countries and for the second and third tier countries of the world it is total slavery...produce at the market price we control or slump into recession and deperession from your lack of an exportable basis for your economy. As their industries become unable to replenish their capital base because the price we allow them to earn for their output is insufficient to earn them the ability to have any national wealth savings they are sucked further and further into the game.

They borrow from the IMF in US dollar loans to survive and this very borrowing then becomes further demand for dollars that allow their servitude to be perpetuated. A vicious new form of economic colonialism that robs the value creation of the whole world and transfers it into the hands of a small group of traders in the money centers of the west.

Our trading partners must return their export earnings to our capital markets through the US Strong Dollar policy and its various dictates or be denied access to the US market. Price your product at the lowest world price we can manipulate or be made totally reduntant and suffer the political turmoil in your own country as your population is forced into unemployment levels that are untenable.

The only answer is to make this monster visible for the victims before they fly another plane into the infrastructure of the beast to draw attention to the scheme.

nickel62In light of the previous commnets it is easy to see the entire crux of the US relationship with Isreal and the various oil producing countries of the Middle East...#747395/2/02; 07:18:53

In a nutshell the Saudis and the Iran/Kuwait/Iraq petroleum reserves(that are all fairly tightly located in a relatively small geographic area) contain the worlds lowest cost petroleum production. IF the US/UK were not able to ensure the control of these reserves then the price could be set at whatever level those who did control those areas wanted to charge..the game would be over...and the US/UK would be the servants and not the masters. The support of Isreal and its only populous possible combatant Egypt with unbelievable levels of direct foreign aid only makes sense in this light. We have the Isreali enforcer in the region to keep the muslim slaves in line..the royal family is there after all only because we put them in power and back it up with the US military might, but we need a close local power to punish those who might take actions against our control and that is the function of Isreal pure and simple...the other is all just dross to confuse and justify the process..It is time that we understood what we are really doing and see if the US population are really willing to lose their sons in the process.
CoBra(too)Barrick's Hedge Book - Already under Water!#747405/2/02; 07:21:31

Says Doug Pollitt - No wonder the co. is looking for more physical to keep the game afloat a little longer. Bill Murphy's take on Barrick trying a fast one on Anglo Gold is probably a bit premature in MHO as the real power behind Anglo Gold is Anglo American ... We'll see - cb2

" Globe says Barrick's profitable hedging days wane"

Barrick Gold Corp ABX
Shares issued 537,813,627 May 1 close $32.14
Thu 2 May 2002 In the News
The Globe and Mail reports in its Thursday, May 2, edition that Barrick
Gold saw its profit for the first quarter of 2002 fall almost 50 per cent
from the same period a year earlier as its ability to make money from its
hedge-trading activities diminishes. The Globe's Allan Robinson writes that
profit for the three months ended March 31 was $46-million or nine cents a
share, compared with a profit of $87-million or 16 cents a year earlier
(all figures U.S.). Last year's figure included a $52-million non-hedge
derivative gain. Barrick's revenue was $478-million, compared with
$499-million last year, as a result of lower production and prices on its
gold sales. The fair value of Barrick's hedge position has declined to a
loss of $127-million, down from a surplus of $356-million at the end of
2001, says Pollitt & Co. analyst Douglas Pollitt. "In the past, the company
booked gains from its hedge book into earnings," says Mr. Pollitt. "Now
they are losing money on the books." Barrick says that $483-million swing
in the off-balance-sheet item is mainly a result of the $23 rise in the
price of gold, and it represents 22 per cent of the gold reserves, which
are hedged.
(c) Copyright 2002 Canjex Publishing Ltd.

Hipplebecknichel62#747415/2/02; 07:29:41

Well said sir!!
It came home to me solidly when I was watching that pbs special about the global economy.
They showed a man in India with some sort of grains piled up on his wagon being drawn by oxen. He was on his way to the market, and the commentator stated that the price of his grain was being set in the Chicago mercantile. This just makes me sick to see that some greedy suits who probably have never even stood in a field of grain are setting the living level of someone on the other side of the world. How can this possibly be? I cannot wait to see this system fall.

On watching the Middle East, I see that the media thinks we are on a safer road, but the only thing I see is that Arafat is being set up once again to be a policeman against his own people to "stop terrorism" It is all a joke, because no matter what window dressing they put on it, the big war is inevitable. No matter how much dancing around the subject they do, the war is about which flag flies over the temple mount. It is possible I suppose that we could all go into another period of "negotiations" while more settlements are built and things are consolidated on the ground, but don't expect it to last very long. The war is about Jerusalem, and the clock is ticking. Things will have to come to a head sooner or later. Economic collapse or world war? which comes first?

CoBra(too)@ Nickel #747425/2/02; 07:51:46

Sir, I fully concur with your recent posts. I'm also grateful, that these thoughts have been forwarded by an North American - hope I'm correct here - instead of any other nationality... Who may have held these notions for quite some time - though, reluctant to state it officially
due to the concern of passing the blame and still benefitting ... Thank you cb2

PS - Hipplebeck - It's probably not so much Jerusalem or Bethlehem - it's probably in all reality about the availability of cheap oil ...

nickel62Yes, I am a north american,#747435/2/02; 07:56:02

I am saddened that it has become necessary to state the obvious about my countries actions..seems it should be taught in school. But that is probably one of the reasons our public schools are allowed to remain so abysmal. Our world wide media gives brain washing a bad name, as we all know.
YGMLeSin...Islamic Law....Re-Financial Transactions....#747445/2/02; 08:04:40

You Posted.....

Thursday May 2, 3:29 am Eastern Time
10 Central Banks To Form Advisory Body On Islamic Financial Services

SINGAPORE -(Dow Jones)- Central bankers from 10 Islamic countries have agreed to form an umbrella advisory body based in Kuala Lumpur to promote the application of Islamic law in their financial services industries.

The Islamic Financial Services Board, or IFSB, will set principles and adapt existing international standards consistent with Islamic law, or Shariah, according to a news release from the International Monetary Fund. Etc....

Here is a brief of Islamic Law............"NO USURY

The Return of Islamic Trading


During the last two hundred years the Muslims have been forced to abandon their own way of conducting their public affairs. Thus Islamic Law has been progressively reduced to a code regarding only individual and sexual matters, while at the same time the ruling of trade and industry has been abandoned. The Murabitun are the first group of activist Muslims,who after this period of darkness, are re-establishing the practice of trade which is declared Halal (permitted) by the Shariah and are abandoning the usurious practices that have corrupted the commercial life at the present day. The Murabitun are leading other Muslims to return to the practice of Islamic Trading.

The Islamic Model concerning trade is based around the prohibition that Allah has made clear in the Qur'an:

(Qur'an 2, 275)

Allah also says in the Qur'an:

(Qur'an 2, 278-279)

We acknowledge that the crime of usury is being committed daily against all humanity by the banking system, resulting in the death of thousands of people throughout the world, the starvation of many others, the creation of the unnatural phenomenon of unemployment, the destruction of small businesses and the general impoverishment of most of mankind.

In the face of these well known disasters, at the time of a general recognition that the role of the banks is not innocent, when the majority of analysts recognise that interest debt is a direct cause of death and stagnation in poor countries. Everybody dislikes the banks, but are made to believe as if it were their own thought, that we need the banks! and there is nothing we can do about that! In the face of a general climate of resigned helplessness the Murabitun are creating active solutions. The way out of this usurious banking system must be based on the Islamic Model, in which usury is incompatible with life, proving that WE DO NOT NEED THE BANKS. Part of the model consists of the re-establishment of a successful network of Halal Trading throughout the world, that does not involve any form of interest-debt, control of products by speculative Future and Stock Markets, or any mediation of a bank.

The Islamic Model restores the economical power hijacked by the banks and the state to the common people. It is harmonious to the legitimate aspiration of the ethnic minorities who yearn for total emancipation from the grip of the modern banking-oriented artificial states in order to rule themselves. It returns the life to the impoverished workers by the rooting out of the parasite: The banks that live off the workers' work. In the Islamic Model unemployment does not exist, and the worker is not a slave of a salary, but enjoys his own business, usually in association, free from the compulsion of having to work for someone else for a paltry wage. In the Islamic Model multinationals and hyper-markets are eliminated; rather than one owner and one thousand employees as it is the case in any hyper-market today, in the Islamic Model we have a thousand free owners in an open Free Market. The Islamic Model removes any form of monopoly that has made everybody a humble salaried worker and thus gives a chance of independence to the self-motivated individual in a 'Free-Market-without-usury'.

The Murabitun are promoting the creation of this new way of trading ;or rather, the only one; consisting of:

Minting and putting in circulation of Gold and Silver coins.

Building Free Markets, regulated according to the Islamic Law.

Restoring commercial routes with caravans and fair contracting models.

Restoring the guilds as autonomous institutions of production

Establishing the authority of Judges to rule the commercial disputes.

The Islamic Law guarantees the removal of the smallest trace of usury from commercial agreements, thus guaranteeing the equity in the contracts.

**Now here is a model for CB's and the power behind the scenes to wage war if ever there was one....Noone could imagine the CB cartel of the western world allowing "NO USURY".............YGM.

YGMVery Excellent Post......#747455/2/02; 08:31:33

nickel62 (5/2/02; 07:09:44MT - msg#: 74738)

My hats off to you for your clarity of thought....I think that the youth of today who protest so strongly against the WTO etc "ARE" on the right track.....Maybe there is hope as always in the 'Next' generation.....Keep those thoughts coming......Regards..YGM
Hipplebeckcb2#747465/2/02; 08:35:48

Please excuse if I sound harsh, but keep your eye on the ball. It is ALL about that one piece of real estate at the temple mount. Whoever controls it, controls the covenant of the god of Abraham. It is not even about the Palestinian state. The war will be fought after all the hype that can be mustered becomes transparent and all the beating around the bushes leaves only the Jerusalem problem obviously insolvable. The temple mount is the ball. If you want to know what's really going on, keep your eye on it. The rest is just negotiating chips to get leverage for the real prize.
Gimli_FWIW: Usury prohibited in Old Testament too....#747475/2/02; 08:46:05

Both Islamic and Mosaic Law prohibit usury. Hmmm....

Lev 25:36-37 Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.

Deut 23:19 Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:

miner49ernickel62 @74738#747485/2/02; 09:06:36

That was an excellent post, Sir... Your concise summarization of what is often referred to as "Dollar Hegemony" is a must read. Segue from there to the Foundation Posts of FOA in Archive I, and you will see him using these particulars to build the case for the development of an alternative currency to break this monopoly.


YGMNow I Wonder How Many Knew That??#747495/2/02; 09:13:18

Gimli_ (5/2/02; 08:46:05MT - msg#: 74747)

That info sure took me by surprise.......
CoBra(too)OK - Hipplebeck - #747505/2/02; 09:49:30

Let us be conciliatory and say it's about the ... lberg! - Mt. of Olives? may be the accepted translation, though that kind of oil has (en-)lightened the benighted for centuries ... anyway, I offer you the olive branch - cb2 ;)
sectorThe National Debt Default Thingy...maybe it's nothing...but Peter Fischer [Mr. Smash Gold] is in it and acting afraid.#747515/2/02; 09:55:05

U.S. Could Face Debt Crunch on June 28
Treasury Running Out Of Room to Tap Funds

By Glenn Kessler
Washington Post Staff Writer
Thursday, May 2, 2002; Page E01

Faced with a plunge in tax receipts, the Bush administration will run out of ways to maneuver around the federal debt ceiling and could default on payments to bondholders on June 28, sooner than previously expected, a senior Treasury official said yesterday.

On that date, the government must make more than $60 billion in semiannual interest payments to trust funds, primarily Social Security. While that is a paper transaction, consisting of new bonds, it counts against the government's $5.95 trillion debt limit. Officials said the Treasury plans to start using a variety of budget tricks later this month to keep the government below the debt limit, but they will not be enough to prevent default on June 28 if Congress does not raise the limit.

"The end of June is really the end of the party. There isn't anything past that," Treasury Undersecretary Peter Fisher said in an interview yesterday. "It is necessary that Congress do this before the end of June. We expect they are going to do it before the end of June. They need to do it before the end of June."

The administration asked for a $750 billion increase in the debt limit in December, but the request has stalled on Capitol Hill. Republicans have historically been reluctant to vote for an increase in the debt limit, while Democrats have blamed the president's tax cut last year for the current crisis.

"Every day, new information is released confirming that the budget surpluses of the 1990s have been squandered and the government is sliding back into bigger debt and deficits," said Rep. John M. Spratt Jr. of South Carolina, the senior Democrat on the House Budget Committee.
Wherever Fischer is... gold is too. So all his budgetary sabre rattling portends some kind of hidden link between the debt ceiling and gold.

Lord knows M3 is already more than $2 Trillion above the debt ceiling.

The June date also matches reliable GATA's insider comments on a key stress time...we'll see.

PizzBanks running for Cover#747525/2/02; 09:55:53

Just trying to put a few pieces together.

Dollar falling.

Argentine banking crisis.

Japanese Banking Crisis looming.

Islamic community talking gold backed international currency (again).

And US banking being cut back world wide.

Snippit from above link:

London, May 2 (Bloomberg) -- Lehman Brothers Holdings Inc. fired 10 percent of its European investment banking staff, while J.P. Morgan slashed 23 percent of its Asian bankers as Wall Street firms pull back from foreign expansion.

Combined with this yesterday:

05/01 00:11
U.S. Banks Curb Corporate Loans in Steepest Decline in 30 Years

Now, not trying to be too much of a Cassandra, it sure is starting to appear to me that the beginning of the end of Dollar dominance may be upon us.

The multi-national banks appear to be going into "bunker" mentality.

Conclusion: There can be NO recovery anywhere in the world in the near to medium term with contracting banking.

Now, is every one shoring up for the recession/depression from hades, or is a financial nuke ready to go off?

My mind keeps flashing back to LTCM. It's common knowledge that they darn near started a world wide financial collapse, and LTCM has been called a lemonade stand as compared to Enron, let alone Argentina, and Japan's comming problems. ARE WE THAT MUCH BETTER PREPARED TO HANDLE THIS SIZE OF CRISIS? I wouldn't want that bet.

Gold? It's getting harder and harder to see how they can continue to hold the price down. With the mines cutting/covering their hedgebooks, the shorts have been swimming against the tide. Now, with the dollar dropping too, it has to be almost like trying to swim up a waterfall.

Something has to break IMHO.


Simply MeUsery#747535/2/02; 09:58:49

Gimli_ (5/2/02; 08:46:05MT - msg#: 74747)
FWIW: Usury prohibited in Old Testament too....
Both Islamic and Mosaic Law prohibit usury. Hmmm....

Me: True. But the prohibition on usery is often interpreted to apply only to ones own kind. In other words the Muslims were not to charge other Muslims interest. And Jews who charged more than a certain percentage interest to other Jews were looked upon as criminals (much like we view loan sharks today). All other races and religions, however, are fair game.


RobotGuyPrepare DOW, Elliot wave theory is upon you!#747545/2/02; 10:08:18

RobotGuyAlas; prepare GOLD, Elliot wave will apply to you also.#747555/2/02; 10:16:14

YGMThom Calandra...#747565/2/02; 10:19:40{EA415BE8-822D-472D-8DCB-F97E3B205FC6}



Americans: How to wave yellow flag
Individuals slowly accepting gold among investments

By Thom Calandra,
Last Update: 11:46 AM ET May 2, 2002

SAN FRANCISCO (CBS.MW) -- Some of us may be sitting at our computer terminals, thinking, "I can't bring myself to buy gold because I think it is un-American. Or anti-economy."

After 9-11, who wants to be un-American?

Gold companies are this year's best-performing stock market investment. Just take a look at the CBS MarketWatch industry analyzer. Yet investment demand for gold, gold coins and gold mining companies still represents only a sliver of the activity in technology stocks.

Investors just the other day exchanged more than $3.3 billion worth of the vaunted cubes. Cubes are the trading slang for the Nasdaq 100 trust securities (QQQ: news, chart, profile) that represent America's faltering tech stocks. But on a good day for gold mining companies, Newmont Mining (NEM: news, chart, profile), the world's largest producer of the metal, will see only $200 million or so of its shares change hands.

To be sure, the lure of gold is gaining currency. Futures traders of small lots (fewer than 200 contracts) on New York's Comex are net long more than 100 tons of the metal for only the fifth time. Helping is the fact that gold's price is decisively above $300 an ounce, and looking like it will stay there. See related story.

Plus, there are anecdotal signs sales of America's Gold Eagle coin are picking up, albeit slowly. Sales of U.S. Mint gold coins, priced at $318 per Eagle, are still well below levels of 1998 and 1999. See chart.

Cont'd @ Link...

RobotGuyPaper Indicators#7475705/02/02; 11:00:40

I've been monitoring a number of small mining company stocks over the course of the last two years, and I've noticed that not until recently are the thought patterns of your tech type investors entering into the PM mentality. We are at the bottom of a semi-parabolic wave pattern created by word of mouth and pain of lost tech monies. As Calandra has pointed out on more than one occasion, there are relatively few investors in the precious metals markets relatively speaking. These investors have proven to the world that they are willing to play the money game on a worthless stock just to be 'hip' with their colleagues. I know a few individuals who scoffed at the idea of investing in PM's a couple of years ago, but I believe they were basing their attitudes on the opinion of the market cheerleaders at the time. People have been beating down the PM markets for years, so much so that there is a grand negative opinion toward the whole idea. This idea, or attitude, is slowly transforming as we see more positive news and recommendations pertaining to the PM markets. By word of mouth the profits made in these markets will be shared and the news will spread exponentially. Perhaps some of the major tech stocks were worth one tenth or less than what they were trading for, but money driven individuals do not care any longer of the value of a company, that type of knowledge requires research. Many of today's investors are only curious to know what the price per share is, and if their favorite cheerleader mentions it in a positive way.
The trend I've been seeing lately with the smaller mining companies indicates that we are on the verge of this 'breaking trend', and no matter what the actual worth of a mining company may be, if it's 'hip' the lemmings will buy. Some people will invest in a mining company without even doing any research. If a company has the term mining in it's title people will buy it even if the focus product is lead.
Some have already been suggesting that a number of mining companies have already surpassed the actual worth in value of stock, but they are assuming that the price of gold will not surpass it's current levels.

Now for you paper haters, it's not all bad for gold. Big players will see the supply and demand side of things and play with both market shares, and physical to achieve their desired goals.

Soon,... Very soon.

Sierra MadreGold graph is very jumpy!!#7475805/02/02; 11:53:58

Hi everyone!

I'm not a chart reader, don't go in for all the "technical analysis" stuff, BUT...

I just checked out today's gold graph at a neighboring site a few minutes ago, and gold is acting very nervous, it seems to me. Jumpy; up/down, up/down; some steep falls tell me that TPTB are fighting a desperate battle to get the confounded yellow metal DOWN, but it won't stay down.

This yeller dawg has his teeth into JPM's arse and the lousy hound WON'T LET GO!

Rather amusing, I must say. Not too sorry for the shorts.


GraefinThanks Nickel62 and Hipplebeck...#7475905/02/02; 12:27:00

Thanks for the great posts...and that was just a reminder of what we're up against. I was raised in the United States, but have spent the last year in Germany, an indefinate stay. Once you're out of the fishbowl, the global problems the United States faces with the rest of the world becomes more glaring, more real. Yes, it frightens me a bit to see where the U.S. is headed...and speaking as an American, all of us were raised in a very spoiled lifestyle compared to the rest of the world. Count your blessings and be happy with what you have; you never know when you may lose it.
Peace and Balance
- Gräfin

PizzSierra Madre#7476005/02/02; 12:31:43

Astute observation for a non technitian and I like your style with words.

Most technical people call for resistance in the 325 range. I don't see that much resistance there other than the current upward trading channel. One thing the tech's forget is that in a major short squeeze (like we have brewing now) the lines don't mean squat. If this thing pops and a few majors start covering, we'll run to 375 - 400 fairly easily, IMO.

Let the bleeding begin.


RobotGuyGoing DOWn?? Heheeheeheeheahahahahaaaaa (evil laugh)#7476105/02/02; 13:28:56

YGMFINALLY.......Silver Getting on the Media Radar Screen#7476205/02/02; 13:46:07

It's a start.....I have alot of faith that the Silver Bull will be running amuck within the next few months.....As Gold news eclipses all else at present, Silver too will have enough media attention soon enough...IMHO.....I still refuse to believe Silver will not again trade back at or near 1/20th multiple of Gold as it has done historicaly.
With Gold at $500.00 p/oz.....Hmmmmm! & don't waste breath telling me it's different this time because I still believe Silver "IS ALSO MONEY"!......YGM.

Solomon WeaverSilver is money#7476305/02/02; 13:53:32


There was a comment on the forum that it was sad that "Agentina" was having money problems when their name is a cognate of money in French "argent" means both money and silver.

The use of Ag to designate silver in the periodic table comes from Latin roots.....

What I wonder is, which came first silver or money, cause I sense that they have been one and the same for a long time.

POS (poor old Solomon....or price of silver....which ever you prefer)

PizzYGM#7476405/02/02; 14:04:27

Agree with you on silver, but I had to chuckle after scanning the link.

I guess it doesn't matter if they're right for all the wrong reasons. . . . .

With all the talk of recovery, has anyone actually come out and said just what segment of the economy is supposed to lead the way - oh, I forgot the government, now who's going to lend them the money!!!!


R PowellYGM#7476505/02/02; 14:32:43

Can we only hope for 1/20th dollar evaluation of silver to gold? From CPM, 5/2/02

"Private investors held about 2 billion ounces of silver in 1990, excluding coins, and are now estimated to be holding about 404 million ounces, CPM said. That would be enough to cover the supply deficit for "three to five years," Christian said."

How much gold is available? Don't include coins as the above silver guesstimate doesn't. We'll probably need a multiple of the present prices of gold or silver before coin melt starts to add to supply. I guess we'll have to endure a silver price pullback from $38.60/ounce to $29.40/ounce when coin melt adds supply but IMHO this will be only a temporary downturn before the second leg up to $100+/ounce. With POG at anything less than $2000/ounce we will have exceeded the 20 to 1 ratio!!?
Sound okay?

AndúrilSolomon Weaver you ask 'which came first silver or money...?'#7476605/02/02; 14:34:09

Silver was birthed and for billions of years borne about upon the celestial bosom of Mother Nature. Silver, as also gold, silica, iron, on and on; they may be found in corners where no breath of life has ever stirred the fabric of the mind of God.

You say of silver and money 'I sense that they have been one and the same for a long time.'

First was silver, now what of noney? These various atoms of God are apart from money, money being offspring of the fabric weavings of modern Man, but no less wondrous therefore. A subcreation, if you will. To mix them, God's atoms and Man's money, in one thought and use is to nurture the growth of discord as two worlds collide.

Can you find the wisdom to tread the true path of harmony?

Step this way. There is a shortcoming: the Absolute of PROPERTY OWNERSHIP that Money does not, can not, manifest...

It is thus that you would cheapen the original Creation. Proof is deep. Many bones there have lived with what you see here written.

The HoopleYGM#7476705/02/02; 14:44:36

Wall Street is right, you need a diversified portfolio. That's why I am 75% gold, 20% silver and 5% cash. I can't predict which metal launches first so I think you need both. Since our hosts here will sell either (silver begrudgingly?) it's worth an occasional mention. Any non-suppressed rational commodity would have long ago looked at the dwindling silver reserves and already have a price explosion priced in. It will probably be $5 the day it goes off the cliff. Talk about the ultimate barbarous relic, in 1999 100# of silver would have only bought 15 or so shares of Amazon. Even today 100# would barely pay for an old beater automobile. Methinks some day 100# will buy my vacation property in the South of France.
PizzBeware of slow steady slides #7476805/02/02; 15:03:51

Good article on invesment advisor sentiment.

Complacency usually means down, more than just physical objects can fall due to their own weight.

Should coincide with spike up in PM's. SM's hanging by fingernails, PM's beatin' on the door.


Why don't the gold shorts just buy enough 315 or 320 call contracts and then cover their shorts? They'd probably make money even after the spike pullback - or is this just too simple? Anyone?


mikalSilver#7476905/02/02; 15:22:12

@R. Powell- "Sound OK?" Yes, that's just fine by me, for starters. Just let us know when you trade out (or in)!..... @Anduril- Great analogy: stars. And isn't it interesting- gold and silver (& platinum?) cannot be made, were never made, and did not originate on Earth. This is because of the extraordinarily high temperatures required to form these elements, temperatures in gaseous condensation. What we have is from comets & meteors.
YGMA Shared Passion......#7477005/02/02; 15:39:54


Possibly wrought from the fusion of the dust cloud that created this beautiful blue planet, who knows....Silver & Gold however created have as all precious things (even Woman) brought joy to some, sorrow to others....It is with a great sense of peace that we the few look to them with clear and unclouded minds to use for the betterment and sustenence of loved ones....We share the passion and we will share the future, we the few.......YGM
mikalCan't leave out:#7477105/02/02; 15:39:59

Meteorites and asteroids also carried the elements to Earth, where they are also found in metallic alloys or compounds.
R PowellPizz#7477205/02/02; 15:55:29

Good question.
You asked, "Why don't the gold shorts just buy enough 315 or 320 call contracts and then cover their shorts? They'd probably make money even after the spike pullback- or is this just too simple?"

I think it's brilliant, not legal, but brilliant. Legality or morality has never been a deterrent to their greed in the past, it won't be now. They could also sell put options (the right to sell at a set price for a set length of time) and collect the premium (cost) for these too! They'd then cover their short position, elevating POG well beyond any of the put strike prices and pocket the premium with no liability. All the calls would become in-the-money options and could be spread out for several years to reduce capital gains taxes. They could also corner the market while they're at it and then squeeze the shorts! Oh, what fun, mayhem, and profit could be wrought! Only one problem other than the legal one, is there enough physical gold available to cover their short obligation? If not, are there any lease clauses that would allow them to repay with greenbacks?
Maybe they could establish a gold to copper ratio and repay with copper. They won't find enough silver!
I've never heard or read anywhere exactly how leased metal repayment is settled if the physical is not attainable. Many have asked but I've never seen any reply other than opinion. Anyone know??
With the lack of transparency in OTC markets, the present shorts may already have an exit plan. Or maybe enough money has been safely stored in some secret retirement locations that the exit plan involves no more than a one way plane ticket. "J P Morgan you say? Nope, come to think of it, we haven't seen him or Mr. Goldman Sacks at all since POG spiked up. What's up? Does he owe you gold?"

mikal@YGM#7477305/02/02; 15:58:10

After reading your post I realized I left out a qualfier that I'd meant to place in my first post. That is the birthplace of Au and Ag are distinct from the other elements of the periodic table, including if I'm correct, rare elements like platinum.
BoxmanIs Blake Blade ghost writing for Puplava?#7477405/02/02; 16:08:14

I swear, if the word "grasshoppers" were in this article, I would be convinced that Black Blade had written todays article.

Maybe he is a lurker here?

What next from Puplava, advice on stocking up on PMM's, cash, food stocks, and to get out of debt?

PizzR Powell - Educate me a bit#7477505/02/02; 16:09:01


I don't trade futures, but I've bought and sold a few puts and calls on stocks and indexes, but why couldn't someone who was short futures LEGALLY buy out of the money calls as a hedge?.

thanking you in advance,


mikal@R. Powell#7477605/02/02; 16:24:38

You ask "how leased metal repayment is settled if the metal is unattainable." It's been said the leasee companies or banks would default with full or partial payment coming from liquidation. That is, if the futures markets, either US or overseas, do not suspend or cease operations.
PizzComment on Market Comments#7477705/02/02; 17:37:29

I don't know how may listen to all the 'advisors' and 'analysts' comment on the markets during the day, but today is almost laughable.

Nearly all are coming across in total disbelief that the markets are not rallying. Where did these people get their credentials? Out of a Cherrios box? I'm surprised someone hasn't floated the idea that the markets since 911 are lagging indicators.

The reality of the fact that our government has been pumping the numbers and lying to us is about to set in. The PTB need something to blame real quick, their aren't any more rabbits in the hat.

911 delayed investment syndrome sounds pretty good to me. Maybe everyone who's losing money can apply for some sort of government aid. Gee, if we weren't suffering from this syndrome based upon 911, everyone would still be pumping money into the markets and we'd all be rich and retired.

Losing my objectivity over the circus. . . . . .


R PowellPizz#7477805/02/02; 17:56:42

Pizz, indeed you can buy or sell futures contracts and/or options on the same to your heart's content. The intentional manipulation of market prices is what is considered illegal. The exchanges are self regulatory and the obvious question becomes when does a position become large enough to be considered manipulation?
In "Silver Bulls" Sarnoff explains that the Hunt brothers never (in his opinion) squeezed the silver market. The regulators saw a large long position from many sources (some from the Mid-East) and decided that there was a squeeze even though the Hunts agreed to forego adding to their sizeable position, agreed to roll over long positions further out in time away from the current (deliverable) or nearest contract month and even exchanged long contracts for physical from Mocatta (big short at the time). There never was an extraordinary call for delivery. However, the regulators protected the shorts who were the big boys at that point (all the small shorts had been forced out). They did this by increasing the margin requirements and finally ordering that only liquidation orders could be filled. This meant the only way to buy was from an existing long forced to sell. The bid-ask price was therefore always settled at the bid price and the price tanked to finally bottom at $11.70. What determines manipulation? Who makes the rules? I am a trader but physical ownership is, of course, safer that playing in the casino. The allure of the casino is the amount of potential fiat gain that can be held with a small margin but the game's rules seem subject to change by the "regulators" who are supposed to prevent manipulation.
In my opinion, small price moves in all commodities are "manipulated" almost all the time from the local floor traders trying to scalp a few bucks, through the computer activated trades and technically oriented trading programs which will trigger stops causing price movements (channels with support and resistence) and, of course, by the big known and unknown players.
Myself, I try to maneuver among these while buying and selling, selling and buying for small gains while desperately trying to always keep long positions rolling over into the future so that I'll be on board when the big move comes. I also hold physical silver (thanks CPM).
Like yourself, I'm a very small player but I enjoy the game!

R Powellmikal#7477905/02/02; 18:20:38

I tend to think that the reportedly 5000-15000 tonnes of leased gold can not be repaid from existing supply and will have to repaid slowly over time with many contracts rolled over numerous times. I believe the same situation exists in silver with an even smaller chance of being repaid with metal.
I fully agree with you that if the leases are called, many will have to be repaid with assets other than metal. I wonder what qualifications were originally required for leasing. Were T-bills or other collateral put up as assurance? How about gold leased on the condition that it be sold back to the bank that leased it with the further stipulation that the party that leased (and is now paying interest) can buy back the same gold in the future to then repay (in metal) the bank that originally leased. This provides capital for investment to the lessor and interest to the bank on gold that never moved from the vault. The physical gold is never at risk! Of course, much gold has been irretrieveable sold into the market to supply the ongoing supply/demand deficit. With physical default here, I'm sure the banks will grab anything of value they can attach. How can this not raise POG and POS!/?

Gauntlet-Runner2("GR2")Reading the fundamentals.......... because they were there!#7478005/02/02; 18:31:01

If we can remember back that far, the reason interest rates skyrocketed in the late '79, was because the FED had to borrow money on the open market competing for loans with businesses. It absorbed all the short term money supply and brought on a national business shutdown. And the same situation is setting up in coming months. Tax revenue is falling while national debt interest payments are coming due. This fact to me is like the busload of bureaocrats stopped on the railroad tracks to take pictures of America's last urban wilderness. The stock market seems to be trending flat. Individuals are sending in their money into mutual funds while insider selling is preventing the blue chips from rising. So we have seen gold and the DOW rise together, that doesn't really matter much. The serious inversives are:

1. British investment repatriation as they turn to the strenghtening Euro.

2. The US national debt "baby buy my bonds" impending crisis, with falling tax revenues.

3. When Sadam decides to do a cruise-by through the Gaza strip.

4. The Japanese banks collapse while their whole country looses its former business model with an export driven economy in saturated US markets.

The eventual outcome is that the strong dollar policy is being undermined by fundamentals. As Japan seeks to distance itself from the falling dollar, it will be calling out for an asian currency bloc as a "plan B". The deal is already foreknown.........."You want us to lay off the gold buying binge, well then give us the alternative we need to stabilize our region with.......and asian currency bloc."

As anything that developes in Asia the "bottom up method" is how processes begin having a weak central gov't, major corporations form mergers and begin swapping stock, trust builds, then the pressure is put on banks to do likewise. Finally last of all the politicians become the "explainers" of their "own new ideas" that the behind the scenes business leaders told them to say. In any school of fish you'll be hardpressed to find the leader, but all the fish know. The US will put pressure on Japan to selloff this imported gold. For the currency bloc, I think they'd do it. Japan needs to create a stable fiat currency so its people can stop buying gold to appease the US Fed. For the US to loose that chunk of the empire to another currency is better than to loose its whole reserve currency capabilities throughout the rest of the world due to a runaway gold price. However, I think iy would only delaay the foreboding event. We're on a big island from Maine to Georgia with a spoiled population that only cares about getting bread and a circus*, (spelled Nascar). I have to be a realist. We need to see the cards on the table. Japan would rather negotiate to release itself from the falling dollar problem but it has to make many friends in Asia before it can say goodbye to the US as protectorate. The US will say, "If you sell our dollars and bonds, we'll let piracy on the high seas eat your industries for lunch." So since Japan is afraid of China, and Taiwan is afraid of China and Japan, they can't dump the dollars so easily. They want our ships in their waters. They can only sell off bonds and dollars slowly and blame private investors. This is all my own spin from my chair that can spin and my mind that has spun. Looks like gold is going to bounce around 305-308 and slowly lift off into its own radical upswing. I expect doldrums until this gov't debt crisis hits like a baseball through the glass window. And/Or the day will arrive when Barrick and Placer formally announce an end to hedging. They are under pressure now to do this or their stock prices will drop. Feel free to correct or expand on any topic here.

I'd like to hear your comments about what Japan is going to do with failing banks. Good days in gold to all. -GR2

Canuck@YGM#7478105/02/02; 18:34:38

From yours:

"I still refuse to believe Silver will not again trade back at or near 1/20th multiple of Gold as it has done historicaly"

'Ballsy' call; isn't the silver bull/silver bear debate interesting? I refuse to make a call regarding silver. The bull camp touting that the silver hoard is gone. This sounds most bullish at first glance but let's examine the superhoard of the US many years ago, some 4 billion ounces.
What does it have now, none.

What does this mean?

Well I think it means that the government doesn't need silver anymore and it has sold it. In the barest of terms what does it need silver for, it doesn't need to make anything made of silver, does it??

Why would any government hoard silver? Why not just hold the already recognized metal reserve, gold? The US does not hold anymore silver, so what?

The photography thing bothers me too. Sure there is the debate of 'no silver impact' but who can really confirm the widely divergent numbers. When you walk into the retailers the fact remains that the proportion of camera merchandizing is slanting towards digital. It seems to me that the tradtional film camera's are increasing in price while the digitals are decreasing. Have you noticed this trend?

The other thing is the dealers, one was so bold to tell me that buy gold (insurance/wealth preservation, etc) but silver "will be used as a doorstop." That's from a guy trying to sell me silver. I asked him why, he said "silver has been completely de-monetized, gold is still money in the central banks view.....silver is used to make cheap jewellery and trinkets but gold is still stored in big bars in big vaults.."

The dishoarding of silver will end of course and silver will have a rebound, especially if people run wild in the early moments of mayhem but I don't think we are going to see the traditional 20:1 gold/silver ratio. I bought a significant pile of it after I had piled into gold during Y2K. My thinking was to have 50/50 gold/silver but in the last year I have gone back to gold. I hold (in dollar terms) about 60/40 now and will continue with gold from here on out.

I have a 'buy' on gold and a 'hold' on silver.

Gauntlet-Runner2("GR2")Silver and Gold futures patterns are totally different...........#7478205/02/02; 19:04:58

The question of "How high can silver go?" Has its answer in the supply and demand equation. At what price do the holders of above ground supply begin selling into the rally to take profits? From our current charts it's like 50 cents. The slow rise up then a big selloff. I don't see a slow buildout rollup in price like in gold. The runaway in palladium from awhile back proves that a non-precious metal can take on precious metal characteristics as an investment medium when palladium is only an industrial metal and silver is an industrial metal with age-old sentimental superstitious ties to gold. Ratios of bygone eras in the US have little to do with the attitude of India and China which still have mega-tons of silver to sell. My question is AT WHAT PRICE will they sell. You assume silver is like a baby raccoon following gold wherever it goes for no reason. Nothing has to follow anything. It's more emotional (their ratio) and has nothing to do with logic, it DOES have alot to do with consumer electronics which aren't going away as long as we have electricity. Society is gadget crazy and that is the ace card of a silver bull.
sector@GR2...Japanese Banks#7478305/02/02; 19:16:38

"Whjat will Japan Do About Its Banks?"

Nationalize them.

En mass. Since they will not honor uninsured deposits, elderly Japanese [60s and 70s] holding more than $85,000 will lose their life savings...savaged for their frugality.

The pre-April 2003 proceeds from such a nationalization will provide at least $600 Billion in fresh funds to cover the $1.5 Trillion in aggregate bad loans.

If the government waits for April 2003 the move will be a single coup.

Unlike the US, the Japanese people have nothing to revolt with.

The revenge of the Ballots? The LDP will simply proffer yet another Koizumi-style puppet to speak platitudes.

The key element here is that portion of Japanese savers who have already guessed the government's strategy [No doubt with Robert Rubin's counsel] and are quietly moving to gold.

YGMCanuck...#7478405/02/02; 19:27:57

Silver Wonderings.....(that we all share)

Canuck, I pretty much agree w/ all you've said and like you hold only a % of AG. (25% in my case) But I do feel it will always be as good as Gold in terms of buying power, only of less value obviously. I try to keep in mind the old adage that money goes where money is. Now we have a few well known examples such as the Buffet hoard and others. But one of my strongest support feeling for Silver upswing is the fact that the Central Fund of Canada, with a major shareholder base of Bankers, Lawyers and other high end financial folks holds over 1.2 Million Oz (last time I looked) of Silver. I'm sure we could come up w/ other PM funds/Hoarders that hold similarly high volumes as well....
Probably I like yourself and others know at the very least if a total financial armageddon or an armed one ever comes about we can use it for Barter at worst.....It's the only way I have f being diversified outside the world of paper..
& BTW>> Thanks to all for entering my 25 cent silver rant :>)

Black BladeUS will likely face 'major' natural gas supply problems #7478505/02/02; 19:29:35


HOUSTON, May 2 -- So far this year, US natural gas production is declining faster than first anticipated, said Raymond James & Associates Inc. in a recent report. And with this fall in gas supplies, gas prices are expected to creep higher later in the year, RJA said: "For the past 6 months, our mantra. . .has been that natural gas will be the key driver of US energy stocks and that lower US natural gas supply will drive gas prices higher."

RJA had considered its earlier expectations that US gas production would fall sequentially 1.5%/quarter during 2002 as "out on a limb," which would result in a 5-6% year-over-year decline in gas production by midsummer. "About a month ago, we were surprised by our preliminary first quarter [exploration and production company] production survey that suggested first quarter production may be down sequentially close to 2% and year-on-year down by 3%. In the past week, however, even that bullish estimate has been eclipsed by the actual production announcements from the E&P companies," RJA noted.

"We now have a statistically significant sampling of US E&P companies that tells us that not only is US gas production falling, but it is falling faster than even our bullish projections," the analyst said. ". . .E&P companies are reporting first quarter 2002 production down 2.9% from the fourth quarter of 2001 and down 6.7% on a year-over-year basis."

RJA noted that while totals will likely change over the next few weeks as more production reports trickle in from other E&P companies, ". . . [I]t is becoming clear that the US is facing a major natural gas supply problem that is likely to lead to higher gas prices over the summer and a potential gas price explosion next winter."

Black Blade: As I have said, we are being set up for a severe energy crisis. I think that it more likely that supply problems will surface this coming winter, however, these analysts think that the supply crunch will come sooner. Drill rig rates have fallen off a cliff and there is very little replacement of reserves. Higher energy costs will hit consumers and corporations very hard. In short – scratch one US "economic Recovery" this year.

USAGOLDCanuck, Anduril, Solomon, Hoople, et al#7478605/02/02; 19:35:28

Go back and check the history of silver. Anyone here know the circumstances behind Bryan's Cross of Gold speech? Anyone here know who was one of Bryan's biggest financial supporters (if not his biggest financial supporter)? That was a long time ago, but this analysis addresses the circumstances of Nature that affected the price of silver then and still address it now. By the way, I had a client come into the office to buy some gold at the beginning of my career who remembered seeing Baby Doe Tabor from the window of Denver's Brown Palace Hotel peddling her bike down 17th Street. She was wearing newspaper for clothes. Ten years earlier at her mansion on Capitol Hill, she played hostess to the grandest parties ever seen in Denver -- then and now. By the time she was seen peddling down the 17th Street, her husband, Horace Tabor -- the Silver King -- had gone from rags to riches and back to rags again.

I am not worried about silver from an "investment" point of view, because an argument could be built for it. (I once owned a silver mine -- and a rich one, alas geologically but not financially.) Just like I do not worry about copper from an investment point of view. However, I do have a problem with those who think that silver is somehow a substitute for gold, just like I have a problem with the philosophy that owning a piece of paper that represents a mining company is somehow a proxy for the real thing. Neither are. There is no substitute for gold. Someday, even those who promote the proxies will come to understand the difference -- if they haven't already. There is a place for each, but we shouldn't confuse what each means to the investor.

By the way, I believe the classical definition for "money" encompasses the combination of form and function.

Multiple Choice:

Money is
a) a medium of exchange
b) a store of value
c) a unit of account
d) all the above

Hint: In the modern era, none of the things we call "money" encompass the definition -- not the dollar, not gold, not silver. Interestingly, gold and silver coinage came about because in ancient times only the government (the king) as a disinterested third party could be trusted to act as arbiter in its issuance. Money had to do with weight and purity. Now, because the government cannot be trusted to issue money, savers are forced to purchase gold at weight and purity as a portfolio insurance.

The wheel of history turns. . . . .

YGMGoogle Search....Silver Hoards.....1-10 of 8,360 Items found in .11 sec#7478705/02/02; 19:41:39

Jeeeez! Black Blades Viking Ancestors are everywhere here on the first page :>)

Off to read & dream of the Viking plunders for a bit....

YGMBlackbeards Treasure...."In Pennsilvania".................OK!#7478805/02/02; 19:53:26

Spanish silver buried in Emporium, Pennsylvania! Several tons of silver bars from a sunken Spanish galleon were recovered by a Captain Blackbeard (not the notorious pirate, Edward Teach) who hoped to transfer the silver to a British ship at Baltimore. Fearful that others would follow the ship to seize the treasure, it was secretly loaded into six carts and sent overland to reach a friendlier Canadian port. The War of 1812 broke out while the silver was en route and Captain Blackbeard decided to bury the silver in the mountains past Emporium. He left a guard, Colonel Noah Parker, who built a castle in the area and kept the curious away. Blackbeard died before he recovered the silver and legend has it that the silver is still there.

**Hey this (Silver Hoard)is becoming the most interesting search engine find in a long while :>))

Black BladeScandals shred investors' faith#7478905/02/02; 19:54:51


Fired Andersen auditor David Duncan pleaded guilty in April to obstruction charges. The Enron and Andersen scandals are helping erode investors' trust in companies. A drumbeat of corporate misdeeds has helped crush stock prices and eviscerate pension plans. But the biggest victim may be trust — investors' trust in financial advisers, stock analysts and Corporate America. During the bull market, corporations and those who ran them seemingly could do no wrong. Now they're feeling the backlash, in the form of congressional hearings, bankruptcy trials and investor outrage.

Trust keeps the financial system together. Once lost, it can take years for Wall Street to regain it. Signs of how badly trust has eroded are everywhere. Investors are starting to give up on the stock market and are plowing money into their homes instead. And Congress is warming up to write new business regulations. Unless Corporate America moves quickly to regain public confidence, Wall Street could languish for years.

Black Blade: Unfortunately most CEOs, executives, and boards of directors only care about getting ungodly amounts of compensation, fat bonuses, diluting shares, hiring friends, and looting the very companies that they serve for personal gain. Enron, Qwest, Global Crossing, Barrick, Worldcom, Arthur Andersen, etc. are only the beginning. If you choose to play the market, be extremely careful – there are a lot of criminals (wolves in sheep's clothing) out there.

Gauntlet-Runner2("GR2")Behind the scene in OZ there were only children.#7479005/02/02; 20:12:01

In 1994 I was in Japan and I went into a bank in Osaka to max out a credit card to convert it to Yen as it was ready to rise against the dolar. I saw with my own eyes about 40-50 "kids" like 20-28 in the bank shuffling through index card inventory files with filing cabnets all over the office. Everyone dressed so fine without a computer anywhere. I couldn't believe what I saw. This was 1950 in the twilight zone of finance. It was easy to see how bank loan policy had no way to see the big picture from a protracted view. There were hardly any older people in the whole bank. I never saw such a mess of opened file cabnets and index card files in my life, with stacks of papers everywhere right in plain view of the public counter. Talk about having a lack of ability to assimilate information? no don't talk about it, investorsan. We have money good invested in company alot!
USAGOLDBlack Blade. . .#7479105/02/02; 20:16:06

Thanks for "Scandals Shred Investors' Faith."

Have a real life story for you as part of today's business which supports your advice. . .

Had an individual call who had a retirement plan. . .I say "had" because now most of it has evaporated. Had the plan at one major brokerage which burned a chunk of it, so he moved it to another major broker where another chunk of it disappeared. Now he says he's going to gold where he understands what he's got. The conversation concluded with a lament we hear often at USAGOLD / Centennial Precious Metals: " I wish I would have had the wisdom to move it into gold sooner." If you go by market valuations, we still have substantial downside potential on the stocks of many of the top companies. Real market pros like Richard Russell keep telling us this, but so many stay in the stock market despite the losses and abuses. They believe that the "market's coming back" when history tells us that a bear market can last ten to fifteen years. The fact of the matter is that it's far from late in the game as far as gold is concerned. We are doing a very active business in gold retirment plans and I suggest that if anyone's thinking along these lines to contact George Cooper at our offices. He does a lot of this. And those who have made the move are looking alot better now in a Gold IRA than they would have been if they left it in stocks or money markets.

TrapperTo silver or not to Silver#7479205/02/02; 20:18:49

I have an idea that the next big industrial use for silver will no doubt be super conducting. With in next energy blow up it should get some real usage. I'm not sure about the old 16 to 1 ratio as I am about the public going nuts once the whole PM market comes to life. I bought and sold in the 70s and 80s and the higher the price the hotter the action. Silver is also a small market it won't take much pressure to move it up. I'm also not so sure China has all that much to sell. I don't belive there is any real info as it is still a state secret as what is mined and held. But just ask anyone over say 35 if a pre 1964 dimes has any exta value...yep most still belive silver IS money. Live small.

Black BladeApril pink slips up 10%: Challenger #7479305/02/02; 20:34:28


CHICAGO (CBS.MW) - Announcements of job cuts by major corporations rose about 10 percent in April to 112,649, according to a monthly survey by outplacement firm Challenger, Gray & Christmas.

Black Blade: And so it goes, the "Bone Pile" grows.

Black BladeTreasury Running Out Of Room to Tap Funds - Bill Come Due On June 28!!!#7479405/02/02; 20:45:10

U.S. Could Face Debt Crunch on June 28


Faced with a plunge in tax receipts, the Bush administration will run out of ways to maneuver around the federal debt ceiling and could default on payments to bondholders on June 28, sooner than previously expected, a senior Treasury official said yesterday.

On that date, the government must make more than $60 billion in semiannual interest payments to trust funds, primarily Social Security. While that is a paper transaction, consisting of new bonds, it counts against the government's $5.95 trillion debt limit. Officials said the Treasury plans to start using a variety of budget tricks later this month to keep the government below the debt limit, but they will not be enough to prevent default on June 28 if Congress does not raise the limit.

"The end of June is really the end of the party. There isn't anything past that," Treasury Undersecretary Peter Fisher said in an interview yesterday. "It is necessary that Congress do this before the end of June. We expect they are going to do it before the end of June. They need to do it before the end of June."

Black Blade: "Crunch Time" as they say. Raise the debt ceiling or be in default. Can anyone say "Argentina"? I knew you could.

Black BladeRe: MK – Scandals and IRA's#7479505/02/02; 20:58:27

It gets even worse. Some company pension plans can legally be raided by the corporation to meet debt payments. This usually does not happen unless the company is in deep financial trouble. Obviously the employees get badly burned. Unfortunately most 401K type plans don't have a Gold investment option. However, additional contributions to a traditional or Roth IRA can be made by most everyone. The amount that can be contributed rises to $3000.00 this year and up to $3500.00 for those over 50 years (I think it's over 50) for the "catch up" option – rising $500.00 each additional year (starting this year) to a maximum of
$5000.00. If you have an SEP (as I do) or another self-employment 401K the amount that can be contributed is considerably greater.

The news of scandals and government chicanery is running rampant these days. It appears that things are not getting any better either. When the next energy crisis hits we will see Gold strongly outperform as we have seen it do before. Meanwhile most all other investments will collapse.

- Black Blade

Black BladeInsider sell ratio tells investors to 'stay clear'#7479605/02/02; 21:07:19


Company insiders have recently started betting against a near-term rebound in North American technology stocks, selling down stakes in their own companies, new research shows.

Black Blade: If corporate insiders won't buy their own stock – should you?

Black BladeThe Wildcatters Wildcard #7479705/02/02; 21:21:50

Adversaries of the Economy, Then and Now


We are witness to a memorable turning point in the domestic economy. It not only continues its positive momentum but it also renews its resistance against strengthening, contrary developments. The voices representing the economy's threats seem also to gather in number, with more articles than ever published about the coming crash in the housing markets, consumer debts, and corporate defaults.

The housing market's crucial role in the overall economy is getting much attention. The housing market has replaced the stock market as the central force in a new version of The Wealth Effect. Unlike the stock market, however, the housing market involves many tangible parts of the economy such as construction and raw materials, and it has enormous, lasting influence upon consumption. For these reasons among others, the housing market is the single most important market to watch going into the second half of the year. It seems many others think so.

Black Blade: An interesting article on the housing bubble, oil, and various wildcards that can wreck havoc on the economy.

shelllusR POWELL/ PIZZ--TACTIC FOR TRAPPED SHORTS#7479805/02/02; 21:24:15


goldquestThis is how they did it before.#7479905/02/02; 21:47:30

Could it happen again? Maybe, but not without a new revolution.
The HoopleMK, proxies#7480005/02/02; 22:00:17

I don't confuse silver for a gold proxie, however it still seems more of a store of wealth than anything printed on paper including mining stocks. If you want gamble in fiat (I don't) that's fine, you just have to always be aware that nearly all paper is in essence a derivative. Gold stocks are basically that too: they derive their value from the gold that lays mostly underground. When I hear people decry derivatives I wonder how many actually realize even the FRN's in their wallet are little different. They can lose 50-100% of their value in a fortnight. They derive their value from a Federal Reserve deperately trying to convince us they somehow have worth. I guess being long dollars is saying you are bullish on bankrupt,indebted,leveraged government. My early life was spent growing up hearing depression era stories. I learned to always have not only plan A but plan B and C. It serves me well in business and I view silver as my plan B. Plan C involves off-topic subjects that pertain to survival. I would always advise people to focus on gold for wealth preservation. I would never advise anything printed on paper.
LeSinGold Paper "Discounted" just like Cohen's Lamb Chops#748015/3/02; 00:29:14

A woman goes to her butcher Feinberg and asks the price of lamb chops.
"$2.50 a pound," he tells her.
"But Cohen across the street sells them for $2.00 a pound," she protests.
"Nu, so go buy from Cohen," says the butcher.
"He's all out," she explains.
"Oh," says Feinberg, "when I'm out of lamb chops they're only $1.50 a pound."

When I was a student in California during the 1960s a Hollywood Khosher Deli Owner told me the above joke.
Some how with regard to Gold it is not a joke.

Cheers "S"

SpartacusPressure on dollar forces O'Neill to speak in riddles#748025/3/02; 00:51:13

The US may be the most powerful nation in the world, but on the subject of one of the biggest threats to its economy its has almost no voice.

The critical issue of the value of the dollar has forced Paul O'Neill, US treasury secretary, to speak in riddles.
The result has been a confused signal. The message emerging from Mr O'Neill has been that the strong dollar policy remains in place. But he has not opposed the recent fall in the value of the dollar, stating that the market should be left to decide the currency's level.
Causing the dollar to weaken at the moment would be particularly easy, given the vulnerability of US asset markets, analysts argue.

The problem would be controlling the speed. A gentle fall in the dollar would be viewed as a blessing for the US by most economists. With consumer spending and corporate investment likely to be held back by debts accumulated over the past few years, a gentle kick to US exports would thus provide a welcome fillip to the faltering recovery.

A sharp fall in the dollar, by contrast, would probably be extremely disruptive for US financial markets, and would risk provoking an exodus of foreign investors from the US market.

This is considered a growing threat by many currency strategists.

The current account deficit, which is running at about 4 per cent of gross domestic product, means that the US needs to attract a net $1.5bn (£1.04bn) in foreign inflows every day to prevent the dollar from falling. But with US equities underperforming the eurozone and Japanese markets, it is becoming increasingly difficult to attract investment.

"Even though Mr O'Neill seems aware that the strong dollar policy does not mean very much, he is forced to keep intoning it," says Ray Attrill, director of research at the economic consultancy 4Cast.

"Any change of rhetoric could trigger waves of selling of US assets in the current environment."

UsulXerox drops after debt is cut from junk to crap#748035/3/02; 00:52:43

Once again the problems of loading up on debt, possibly as a result of the rosy euphoria of a (now fading) mega-bull market in stocks, and an easy money policy from Greeny, are highlighted. Here and there, potential risks in bonds are materialised, and as they do so, interest rates pop up out of the general bond population like tent-poles.

Picture this: A Xerox machine, its LCD display flashing "Out of funding! Please re-fill!" But the funding supplier has the Xerox machine's owner on hold for non-payment of bills.

SpartacusDuisenberg says US c/a deficit unsustainable over time, risk to world economy#748045/3/02; 00:55:12

European Central Bank president Wim Duisenberg said the growing current account deficit of the US poses a risk to the world economy.

"I hope it can be contained in due time, because over time I regard it as unsustainable," said Duisenberg speaking at the ECB's regular news conference.

UsulArgentinian Tears#748055/3/02; 00:57:06

Growing Crisis Leaves Argentines Feeling Helpless

"Argentina's problems are legion -- and, many say, date back to decades of poor leadership and overdependence on the government. Officials here contend the current crisis, however, stems from the nation's corruption-filled transition to a free-market economy in the 1990s, a time when the nation became reliant on massive International Monetary Fund loans and government bond sales to finance overspending"

IMF teats and a dogmatic institution of a "free market" are not a panacea. Once again we see the result of application of formulaic "solutions" without wisdom leading to disaster.

UsulThe future fuel crisis?#748065/3/02; 01:22:15

"A line of red London buses are parked unable to move, after trucks blocked the streets around Hyde Park in central London on Wednesday, as the fuel crisis which is gripping Britain continued..."

The army has deployed 80 fuel tankers loaded with reserve fuel at strategic locations across the U.K., a Defense Ministry spokesman said today. The tankers were on standby in case Downing Street required them to distribute fuel for essential services..."

This is not fiction- it really happened just 2 years ago, from relatively small price rises with no actual shortage of supply. Was it the result of genuine protests, or could it have been a "trial run" to test systems and highlight what measures would be needed in the event of worse crises to come, as the Hubbert peak timeline advances? Casting conspiracy theories aside, complex systems and even human relationships often give us advance warnings in the form of seemingly minor upsets ahead of time. Those who understand these warnings and take sensible precautionary measures ahead of time are wise.

There is no shame in taking precautionary measures against a risk even if the anticipated crisis does not happen- that is the nature of risk. Why not have at least a percentage of your assets in a risk-resistant form such as gold?

Black BladeMalaysia sees small group first in gold dinar trade#748075/3/02; 01:33:21


KUALA LUMPUR, May 1 (Reuters) - Malaysia said on Tuesday it planned to initially use the gold dinar as a currency for trading with a small group of countries, in the hope it would slowly gain international acceptance. Some Islamic countries have proposed using the dinar, which is a gold-backed standard, in international trade instead of the U.S. dollar.

"We are trying to work it out with three or four countries that we have close ties with," said Prime Minister Mahathir Mohamad, who proposed the system last month to reduce the risk of speculation in bilateral trading. "The Arab and Gulf states...maybe they'll accept it," Mahathir told reporters after attending a Labour Day function. The prime minister, who recently visited Libya, Bahrain and Morocco, said the three countries had responded enthusiastically to the plan.

Black Blade: The Gold standard to return? There is a move to bring about the Gold Dianr and Silver Dirham in Dubai to be used as currency as well. Time will tell.

Black BladeLeading gold miners cut hedge books#748085/3/02; 01:41:14

LONDON, May 2 (Reuters) - Gold miners are racing to ditch their hedge books in a move to take advantage of rising prices for the precious metal, which last week hit its highest in more than two years.

Following is a profile of the intentions of leading miners to reduce the amount of gold sold into forward markets.



World's largest gold producer Newmont Mining Corp has vowed not to hedge a single ounce of its output to take advantage of higher spot prices. But in acquiring Australia's Normandy Mining it now carries hedges on some eight million ounces of future production.


World number two gold producer Barrick Gold Corp says it will not increase its gold forward sales programme but will put more emphasis on spot sales. Barrick said last month it will sell half its gold output this year at a minimum price of $365 an ounce, with the balance to be sold on the spot market.

The company's hedge book at December 31 included 18.2 million ounces in spot deferred contracts, or 22 percent of reserves. Barrick began hedging 14 years ago when the market allowed producers to lock in higher prices and lower risk by borrowing gold from central banks, which gave it liquidity assurances during a capital intensive time.


Close to three years of its annual output of around 2.5 million ounces of gold is estimated to be hedged, according to analysts. Placer has said it will reduce its hedges to under 50 percent of output.

The company said its hedge programme has realised a $65 per ounce premium over a gold spot price of $290, and as of the end of the first quarter this year mark-to-market value of the programme was $235 million at a closing gold price of $303.



South Africa's biggest miner has cut its open hedge book by 1.7 million ounces to 12.9 million ounces in the first three months of this year. Its hedge book was reduced by another 643,000 ounces by the end of April.

Anglogold had 106,897 kg of gold sold locked in forward prices ranging from 89,939 rand/kg in 2003 to 163,895 rand/kg in December 2011. The rand gold price is currently over 100,000 rand/kg. The group had eliminated the low-price rand gold forward contracts for the rest of 2002.


South African miner unhedged to gold price. The firm has repurchased the 420,000 ounce hedge position resulting from its new Damang mine in Ghana.


Is unhedged but will deliver production into its newly inherited hedge books from Australian acquisitions New Hampton

(510,000 ounces) and Hill 50 (1.35 million ounces).


Durban Roodepoort Deep (DRD) has spent $5.6 million to reduce its hedgebook to below 400,000 ounces as of the end of March and aims to close it by July 1.


Gold hedging by Austrlian miners fell nearly eight percent in the December quarter, according to the Australian Gold Council.


Australia's newly formed Aurion Gold Ltd plans to reduce hedge exposure in both reserves and annual production over the next five years to gain wider exposure to a rising gold price.

Asutralia's NEWCREST MINING and WMC Ltd have also reduced their hedges.


Papua New Guinea miner Lihir Gold Ltd said last month it would continue to hedge up to a third of its annual mine output of around 648,000 ounces.



Ashanti Goldfields Co Ltd last month agreed interim deals on margin-free hedge trading with all its active counterparties as it restructures its debts.

The company said in a statement that Barclays Plc had reached agreement with Credit Suisse First Boston to take over its Ashanti hedges, and that agreements had been reached with all the miner's active counterparties.

Ashanti in 1999 sustained due to heavy hedging losses when a sharp rise in prices left it holding huge losses on short positions in the forward market.

Black Blade: Only insecure losers sell forward their production. Note that the hedgers have lagged the Gold Bull Market. As a general rule - The lower the hedge position the better the share price performance.

BelgianEuroland#748095/3/02; 01:43:20

Wim Duisenberg (ECB) : ...The US trade deficit is a serious threath to global *Stability* !!!...
The French Le Pen syndrome with call for euro-sortie for french not on any EMU agenda and is radically out of the question !!!...
Wim is talking and acting firm and confidently !

Next to the unresolved US/WORLD steel dispute, US massive subsidies to domestic agriculture is in sharp contrast with serious efforts (+ results) in Euroland to do exactly the opposite at home !
Add the massive and prolonged confetti-feed to the US war-industry...and make your own conclusions about the differences in currency (dollar/euro) managements.

A major Belgian bank (small in global terms) stopped with its tradition of *silver* and *platina* sales ( Physical ) (to clients)! Nothing changed for Gold ! VAT on silver/platina/other remains 21% and zero % for Physical Gold ! What better evidence can you find for making the difference between "industrial" or "monetary" metal(s) !!!
If there is such a tremendous unbalance in the silver-world...why isn't this metal acting as palladium did ? Don't shoot your humble pianoplayer,please. Thanks.

UsulHome loan rates rise#748105/3/02; 01:46:24

As the scattered tent poles of isolated (yield)=(risk reward) spikes pop up, they start to lift the general fabric.

Thanks to Mrw on Kitco for spotting this link.

Black BladeBarbarous Relic Files - Huge quantity of gold, silver seized#748115/3/02; 01:49:33


Chennai, May 2: The Tamil Nadu police seized 38 kg of silver ornaments, Rs 4 lakh worth of gold jewels and Rs 13 lakh in cash following the arrest of two persons yesterday, Director General of Police B P Nailwal said today. The seizure could lead to the recovery of more gold and silver jewellery, he added.

Displaying the ornaments and cash, the DGP said the arrests and seizures were effected by the special teams formed following the alarming number of burglaries in isolated jewellery shops in Chengalpattu East district from November last.

Stating that four more persons wanted in connection with the robberies were absconding, he said the 38 kg of silver ornaments and the cash were recovered from the arrested persons while the gold jewellery was seized from a receiver. Interrogation of the arrested revealed that they had stolen 8.25 kg of gold jewellery and 75.5 kg of silver totally valued at Rs 40 lakh, he added.

Black Blade: What a waste of time – burglarizing all those shops and only finding barbarous relics. Hmmm…

Black BladeSpot Getting A Little Frisky Tonight#748125/3/02; 02:27:14

Gold is moving higher along with other PMs and Petroleum. Earlier CNBC had a guest on that said Gold and Oil are not good - therefore the only conclusion was that they are losing their grip ;-)

The unemployment rate of first time claims is still far above the recessionary level of 400,000. The unemployment data for last month comes out in a few hours. Also, Sec. O'neill hinted that the Treasury will not interfere to keep the USD stronger against other world currencies. The USD has weakened as is expected to continue to weaken. "Interesting Times"

- Black Blade

Black BladeEnergy Leaders to Meet Privately#748135/3/02; 04:11:13


DETROIT (AP) -- Energy ministers from the Group of Eight nations plan to discuss the need for a stable, secure and environmentally friendly energy supply during the second day of an energy summit.

U.S. Energy Secretary Spencer Abraham told delegates Thursday that the world's energy challenges will become more acute over the next 20 years as countries face increased demand and try to balance energy growth with environmental protection. All eight countries face similar energy challenges, including demand, growth and inadequate infrastructure for future needs, Abraham said during a luncheon policy address.

In the United States alone, it's estimated that by 2020, oil consumption will increase by 33 percent, natural gas consumption by more than 50 percent and electricity demand by 45 percent, Abraham said. The infrastructure to handle the increased use doesn't exist, he said. For example, to accommodate the projected increase in electricity demand, more than one power plant per week will have to be built, he said.

Abraham also said that over the next two decades, world oil consumption is projected to increase from about 75 million barrels per day in 1999 to roughly 120 million barrels per day in 2020.

Black Blade: The key point here is that the infrastructure does not exist for expanding production and delivery of energy. Rabid environmentalism and their political influence guarantees that we are headed into a severe energy crisis of epic proportions. The end result is the collapse of most modern economies (except perhaps the most primitive agrarian economies). As always get prepared, get outta debt, get Gold and Silver portfolio insurance, get enough cash on hand for several months expenses, and get a nonperishable food and basic necessities storage program started.

SpartacusThree Cheers for a Weak US Dollar #748145/3/02; 04:38:25

---As the US dollar becomes more unloved with each passing day, investors are growing increasingly nervous about a dollar correction or worse still, a dollar collapse. The main fear is that a steep and sudden depreciation of the greenback could trigger a rush to the exits among foreign investors in US securities and precipitate a spike in US interest rates and a swoon in US financial markets.

We don't buy this doomsday scenario and are predisposed toward the call of our currency strategists. They envision an orderly, broad-based decline in the dollar over the medium term (two to three years), a forecast that nevertheless gives clients the shivers. Recognizing the risks associated with a weak currency, we think market participants are too focused on the negative implications of a weaker dollar. ---

Spartacus: A modest devaluation would be good for America, but then again will it be a mild dollar correction?

Black BladeU.S. layoff plans rose in April #748155/3/02; 05:24:25


NEW YORK, May 2 — Layoff announcements at U.S. firms bounced back up in April after a drop in March in a sign that the recovering economy could take some time to gather steam, Challenger, Gray & Christmas said Thursday.

Black Blade: There is a growing consensus among corporate CEOs (if CEOs such as Jack Welch, Wayne Huizenga and other guests on CNBC are to be believed) that the unemployment picture will get worse in face of growing layoff announcements, excess capacity, decreased capital expenditures and growing inventories.

RobotGuyI know it's around here somewhere.#748165/3/02; 05:41:52

Charts and graphs would indicate to mine own inexperienced eye that we are on the brink of major shifting. Perhaps Friday is a good day for indecisiveness. DOW will fail in a big way very soon. Of course I don't have my license in cheerleading, so you don't need to take my word for it. Average investor? Getting tired of everyone else doing the profit taking?
I don't know what's going to cause the big dip, but I'll bet my holey t-shirt we're going to see a big dip real soon. Yesterday I wrote "Prepare DOW, Elliot wave theory is upon you," well, it didn't happen yesterday, so you know how much you can trust my ideas.

Have a marvelous day all!!


LampreyUnwinding Hedgebooks#748175/3/02; 06:23:59

I've noticed that many of the hedged gold producers are closing out their hedge positions by "delivering into our hedge book"...

That tells me that whoever is on the receiving end of the forward sale (the buyer) is still getting quite a bargain in price. I'm not seeing much talk about closing out hedge positions by cash purchases (Durban Deep's plans not withstanding).

So, can we conclude that the lack of new forward sales is partly responsible for slowly driving the gold price higher and we won't see a true breakout in prices until a critical mass of these forward sales are "delivered into", thus forcing buyers to pay current market prices for future gold sales?

Golden BearAbbey Jo on CNBC after yesterday's close#748185/3/02; 06:37:59

Amusing quote by Abbey that GS has always used GAAP based analysis to arrive at their forecasts for stocks and the major indices - yeah right!

Her predictions for the major market averages have been ridiculously high for the last 2 years, and still going lower.

Pro forma earnings? What pro forma earnings? Just like the recession that never happened...

Black BladeUnemployment Soars to 6%#748195/3/02; 06:44:05

Unemployment jumped higher by 43,000. That is 6% from 5.7% and it will get worse. Unemployment announcements are rising sharply. This is confirmation of a deepening recession – in spite of CNBC drone Larry Kudlow's assertions that "all is well", the unemployed are just lazy bums and that the benefits extension was a fool hardy move by Congress. The "Bone Pile" is growing! In a word "GRIM".

- Black Blade

Golden BearRobotGuy (msg#: 74816) I know it's around here somewhere.#748205/3/02; 06:48:25

It's almost there, S&P needs to go to 1100-1110 before she turns and heads lower, some time next week... the old gal had to take a breather before slaughtering the next lot of sheeple.


miner49erTrade Settlement in Malaysia - Old Wine in New Wineskins...?#748215/3/02; 06:51:56

(Note - I put this together actually back on March 31st, but frankly forgot about it... So I've dusted it off a bit, and decided to throw it out now, for any who care to read it. ALSO -- the link is no longer valid, unless you can search their archives, but you can find a number of snips from these articles back around this time on the forum archives, if anyone finds the need.)

The other day there was some discussion regarding Malaysia's plans to institute a gold payment mechanism to manage settlement in its international trade. The discussion arose out of an interview with Prime Minister Dr. Mahathir Mohamad of Malaysia as reported by several news organizations.

I admire Dr. Mahathir, as he demonstrates again his willingness to adhere to convictions and principle, even in the face of enormous pressure from the Beast. Although castigated in 1997 for his stance restricting speculative currency movements, his country withstood much of the ravages of the tsunamic lava flows of "hot money" that laid waste the financial landscape of his neighbors.

Looking over the information provided in news accounts of this interview, I saw some things that raised a few questions, though. Dr. Mahathir envisions the use of the Islamic gold dinar to be the means of account settlement in trade between countries. He highlights the general plan of how the gold exchanges would take place. Using a two country example to simplify the illustration, the trade balances of each country are calculated using their respective local currencies, and are then priced in gold, which is employed as payment. It is also used as the medium to conduct these exchanges. In order to reduce the physical movement of gold, these balances wash each other out, so only the amounts in surplus or deficit are exchanged. (Essentially, convert and net...) To further eliminate unnecessary movement, credits or debits can be applied to these imbalances. The assumption here that Dr. Mahathir makes is that the price of gold is reasonably stable. “Its value [gold] may appreciate or depreciate according to the world’s demand and the demand in a given country. But the fluctuation would be minimal,” he said.

Malaysia seems to want to restore gold to its historic prominence, but risks conducting affairs according to the old ways of doing business. They evidently do not wish to fix the price of gold, yet pursuing this course of action, it seems, will make this nearly unavoidable. I would like to analyze this situation in terms of the discussion of money for which we began laying a groundwork the other day [#71878].

A quick review... Money is defined as that means, which takes an individual's inarticulate, and unquantifiable appraisals of things, and translates them into commonly understood terms, so that the individual and others inside this universe of commerce can fluently dialogue about their prices. The currency of the realm is any mechanism that satisfactorily expresses, and transmits, these monetary evaluations. Its primary purpose is to facilitate commercial/financial exchange. Chief properties of the currency must be 1) its ability to dynamically adjust to changes in society's appraisals of these things; and 2) its ability to predictably suspend the considered value held by the parties of any given exchange for the duration of the transaction.

In the past, this was attempted by pegging the currency to a fixed gold ratio (or some derivative of this function). The emerging paradigm seems to want to let currencies discover their value through a truly free exchange ratio to any and all commodities, paramount of which is gold. As we discussed previously, our legacy of commodity-backed currency causes us to confuse the currency instrument with the real wealth denominated by it. This is why we can lend something that has no intrinsic worth, or anything backing it that does, claim it to have stable value, and do it with a straight face. Effectively, our "money" today is nothing more than an irredeemable, you-must-use-it credit claim. And callable, too.

First gold, then gold certificates, gold notes, then contracts for gold not yet born. Then default. We have spiralled so long and far down this vicious vortex, that the intolerable systemic default of the current quasi-gold standard is imminent. Not only will the powers, that exist by virtue of this precarious structure, fight to the death to keep it intact, the more astute among them also recognize the serious threats to U.S. national security (and by extension, global stability) from the instability such a collapse would incite -- especially in this day.

Therefore, the show must go on. This is the inevitable, inescapable result of a system that pegs its currency to a commodity in order to give it worth. The intent may originally be to enhance its currency property of temporarily sustaining value for its immediate transactional use. This quickly gives way, however, to the impression of lasting value being stored in the currency, which then causes it to be perceived as a real asset in the minds of lenders and borrowers alike. This is what ultimately breaks the system. Currency is not meant to be construed as a long term value store. To the degree that it does or should have non-monetary worth, is only to the extent that this property is necessary to make commercial transactions easier for that particular economy. It should contribute to the medium's ability to adequately convey the monetary appraisals held by its users. Otherwise these monetary appraisals end up becoming distorted, and inflexible, as those forces take over, whose interest it is to control the medium's monetary use, by manipulating its non-monetary value. Once currency is wrested from its natural role of expressing fluid monetary processes, and becomes bound in contracts of fixed convertibility, it no longer serves to represent dynamic value concepts, but fixed and arbitrary value illusions instead.

Thus gold in the Malaysia plan (if it works as described in these [very] summary accounts) is set up for a fall. I want to point out that their plan may actually work differently, but owing to the likelihood that the editors undoubtedly perceive things through traditional understanding, they may well have reported the whole affair with the wrong slant. That said, we'll approach our analysis with what we're given.

In the first place, it fails its exchange facilitator role right out of the gate, with concerns about gold's physical movement. The purpose of these account credits and debits, according to the article, is to further diminish the costly transportation of gold. It is obviously inefficient if one designs a process in which gold is to be a vehicle for account settlement, and then has measures put in place before the fact to accommodate transactional obstacles brought about by inherent attributes of the medium.

Additionally, in mandating settlement in gold, we instantly introduce the prospect of default. By permitting credits or debits to be applied against balances ("...the surplus or deficit can be credited or debited against future imports and exports."), it seems we only perpetuate the present dilemma. If the trading partner is gold-poor, then deficits on the part of this country must be met with a gold debt, whose purpose is not for some administrative benefit of efficiency, but genuinely a need for more time to make good. If the gold price fluctuates significantly, and moreover obtains a new, higher plateau, this only exacerbates the situation of the gold debtor. Simply, an agreement that mandates payment with physical delivery fosters an environment of defaults and non-performance, and invites efforts to keep the price down.

Other considerations... Say I run a deficit to you one month, and you agree to let me make up the balance later -- ostensibly for the above-mentioned administrative purposes of reducing gold movement. I compensate you for the delay either with interest payable, or a fee. I do indeed, currently have the gold, but find our negotiated settlement to be more cost effective than the costs of moving the metal itself. Now if the gold price remains stable, or moves in a creditor-friendly direction, then it won't be long before you prefer to just hold onto this paper, as it is effectively stronger than gold, so long as confidence in its convertibility is maintained. It won't be long before this "good as gold" paper is traded, speculated upon, hedged, lent against and lent itself. Then in order to help our speculations, or rescue our over-extensions of credit, assistance will be provided to make sure the gold price doesn't "get out of hand," and we will all agree that it is better for us to manage the indiscriminate volatility of the markets, so as to promote overall stability. Thus we are back once again to fixing (or "managing") the gold price.

Let's look at this yet another way. It appears that transactions will take place in the local currency, and be priced to gold at some point after they are recorded. So now the whole gamut of tricks will be employed to ensure the best exchange rate, from the simple attempts to "time" the transaction's entry to the books, to the panoply of hedging practices currently employed in today's environment. This is so because the transactions are not settled with actual delivery at the time they occur, hence creating all the opportunities to abuse the float that exist today. Since the goal here is to secure the best price, the pressure will continually and always be to depress gold relative to the local currencies.

FOA maintains that the way the Euro courts will avoid these problems is by not enforcing contracted terms that require physical gold delivery. Cash settlement will be the typical workout. In response to the conclusion that this would simply cause contract dealings to take place outside the Euro court jurisdiction, he contends that there will not be any substantial, organized markets in which to do this after the current dollar market cracks up. You could make whatever deals you wanted, but you would not find anyone willing or able to enforce gold delivery, if one party decided to back out. With no one able to bind your counterparty to delivery, you would find it hard to even organize a market to deal in gold paper, as there would be no incentive. The effect of all this, according to FOA, is to drive gold dealing mostly into the physical spot markets. Gold in this environment becomes something that cannot be inflated through credit use (with its subsequent debasement, and defaults). [FOA #78, 6/19/01]

A note that is issued by an entity that owns substantial real-wealth assets free and clear, is genuinely productive, and keeps its debt within check relative to its assets and income, is likely to be used, holding its worth not on the basis of contracted convertibility to the issuer's assets, but simply on the basis of who the issuer is... on his authority... in his good name. This concept is not new and has existed forever. What is different is to contemplate this in the realm of an international currency. FOA discusses this point in addressing some of the very fundamental concepts behind the design of the euro:

"Not long after the US defaulted on it's gold loans,,,, dollars held as gold certificates,,,,,, major thinkers began the long process of forming another world currency. One that would not maintain the fiction of a gold standard with the somewhat fixed gold prices inherent in such a system."

"[ ... ] After operating on a fiat system for 20+ years people are starting to realize that the only thing that backs a currency is the real productive efforts of their people. Yes, over time we always borrow more than our productive efforts can pay back and proceed to crash the money system. But what else is new? (smile)

"We call this a money's "timeline" [ ... ] "

"It seems people saw something else that would make the Euro unique. Paid up assets also stand behind circulating money. Indeed, if someone ow[n]s a $100,000 dollar piece of land , has a good producing job and borrowed $50,000 against his land,,,,,, the world is likely to circulate that debt note as a fiat land backed currency. But, if his gold (the land) is worth $1 million in a free physical market,,, AND RISES FURTHER IF CURRENCY SUPPLY OUTPACES REAL PRODUCTION,,,,,,, and his other debts are relatively low ,,,,,, the same note would circulate just as effectively if the $50,000 was borrowed against his name alone." [FOA #7, 2/26/00]

A currency designed to work in an environment where gold is exchanged free of the impediments of paper manipulations, is likely to be used by those who want physical gold -- as it is not threatened by gold. This is diametrically in opposition to the current reserve currency paradigm. They would seek to use this new currency as the medium with which to conduct their business. It's simply easier (and less costly...).

If an oil producer wants to take partial payment in gold, even a miniscule portion, he simply cannot get it in markets that trade at today's prices. His bona-fide, serious, and completely backed demand, introduced directly to this system would kill it because there simply is not ever going to be enough actual gold to meet this demand at current price levels. But if we should let the price rise to obtain its market level, it would fight this with maniacal desperation, as the entire system relies upon gold at the present artificially low prices. Every kind of pressure, intimidation, compromise and creative forward financing would be deployed, all in an effort to thwart delivery (or at least postpone it into the sweet bye-and-bye). Just do anything to prevent exchange at the offered price...

But isn't the currency supposed to facilitate exchange? It seems if I try to use THIS currency to get the job done, it will prove woefully inadequate for the task. This currency does not freely express the value estimates of buyers and sellers in its markets, so necessary to facilitate transactions. Rather it handicaps and sabotages the effort instead. The policies of its issuers by design do not allow the instrument to perform its job correctly. So, if a new currency ascends from the horizon, whose design is to make the process a lot less painful...

Will the euro be ideal? No, it will have its own pressures that cause its own imbalances, and subsequent destruction. It will have its own timeline... birth, youthful beauty, age and treachery, and ultimately death... But the point is not to create the perfect system, which in an imperfect world is impossible. It is just to identify reality (political, technological, predominant world-views, etc.), and put something together that most successfully accommodates the dynamics at work in that season. That said, it seems a currency modeled like the euro, would better serve the demands of modern international trade settlement. The application of gold is best left as something physically acquired with the surpluses in an open (and free) marketplace.

The Malaysian concept (at least as far as we’ve been introduced to it) is not unlike putting old wine into new wineskins. They correctly wish to allow the free pricing of gold, they also seem to want to elevate gold to its traditional status as "the" premier wealth holding [new skins]. They err, however, in trying to use gold as a currency [old wine]. They confuse the concepts of money, currency, and wealth. They mistakenly wish to make gold function with the dynamic properties of currency, while still attempting to establish in it the longer term, fixed value attributes, required for something you issue paper against. In this day that role is inefficient and inappropriate, as it leaves gold subject to endless manipulation because of these dual conflicting roles.

I know that if you put new wine in old wineskins, the skins burst from the action of fresh fermentation. I don't exactly know what the outcome is of putting old wine in new wineskins, except that it doesn't make sense. (I suppose all you would get is leathery tasting vinegar.) Albeit the interview snippets give only a very removed glimpse into what the Malaysian plan contains. Nonetheless it seems there is a lot of room to "work" the system. However, I'm certain they have thought this through much further than I could even fathom, and have the bases covered. With that, may it be then, that Dr. Mahathir's Malaysia prospers, and their trade surpluses avoid the entanglements of the paper-plying middlemen, and are instead deployed in prudent investment, and in the outright acquisition of this grand metal of the kings...


RobotGuyGood or Bad?? I can't figure out what the message is of this article,... I think it's good but,.... Help me out here!#748225/3/02; 06:53:56


NEW YORK (CBS.MW) -- The gold timing newsletters tracked by the Hulbert Financial Digest are not all that excited about gold right now. Their average exposure to the gold market is just 37.5 percent, with the remaining 62.5 percent allocated to cash.

If you're a contrarian, their tepid feelings about bullion are good news, both for gold itself and the shares of gold mining companies.

I frankly am surprised that today's gold timers are not more enthusiastic. With the yellow metal exhibiting more signs of life than it has in years, I would have expected nearly ubiquitous exuberance among the gold-timing newsletters. After all, that is exactly how they reacted every other time in recent years in which bullion rallied to the $300 per ounce level.

But not this time. After briefly jumping to 90 percent in early February when bullion rose to the $300 level, the HFD's gold sentiment index has steadily declined to less than half that level today. Yet bullion actually is higher today than it was three months ago.

This is a textbook case of what is often seen at the beginning of sustainable rallies. As contrarians constantly remind us, bull markets don't like company; they thrive when relatively few advisers and investors have jumped on their bandwagon. This is why contrarians were not particularly surprised that gold's rally stalled in mid-February, the point at which virtually all the timers followed by the HFD had become bullish. Today, in contrast, gold at $310 per ounce has fewer cheerleaders than it did three months ago when gold was trading at a lower price.

Incidentally, this sentiment picture for gold is just the opposite of what prevails for equities. In that arena the average adviser has been stubbornly optimistic in the face of a significant decline, which is why I grade sentiment among stock timing newsletters as bearish.

Black Blade"Interesting Times"#748235/3/02; 06:56:59

Gold is moving higher now, while the USD is dropping like a rock. Petroleum is higher. Speaking of petroleum I will review some literature:

The Prize: The Epic Quest for Oil, Money, and Power

Hubbert's Peak: The Impending World Oil Shortage

Geodestines: The inevitable Control of Earth's Resources Over Nations and Individuals

The Coming Oil Crisis

Not to mention my studies of the depletion of other resources such as clean water, minerals, and metals. The economy is rather fragile right now and cannot withstand a sucker punch from declining energy. As I have said before, the real sleeper is in Natural Gas as it is the only growing source for electricity. Forget about nuclear, coal, oil, hydroelectric, and renewables. If the production of NG falls and reserves are not replenished – the US economy is toast.

As always, get out of debt, get Gold and Silver portfolio insurance, get enough cash on hand for several months expenses, and get a nonperishable food and basic necessities storage program started. In other words prepare as you would for an extended period of unemployment and even a serious natural disaster. Prepare for the worst and hope for the best.

- Black Blade

RobotGuyGo on now spot, do what it is you do best!#748245/3/02; 07:04:23

Black BladeGold Shares Predict A Strong Gold Move?#748255/3/02; 07:15:34

I see that GOLD, HGMCY, and DROOY been been moving strongly higher and have crowded out a lot of tech names on the ticker this morning. That is usually a positive sign for Gold as shares front run the physical metal. Since the unemployment data was released the POG jumped higher and USD Index dropped hard. Also, market futures are all down and no one is likely to want to hold stock ahead of the weekend in this crummy investing environment.

Could get very "interesting" today. Can't wait to see the look on the "Mummy's" face tonight if the markets tank and the POG rockets.

- Black Blade

nickel62Thank you to all who commented on my post...I appreciate the response..and hope it was helpful. goldquest I read the URL you posted about the particulars of the gold confiscation and found it chilling in it's implications...all here should read it as we are clearly now in a state of national emergency again...#748265/3/02; 07:22:55

The ramifications for all of us who refuse to have our savings captive of the elite controllers of the judical system are obvious and terrifying.
RockThe Level of deception #748275/3/02; 07:27:31

Hi all, I really burns me up to see people like potato head Neal Cavuto of CNBC and Larry Kudlow who have not deviated from their long held views, there is nor ever was a recession after all the techincal indicators just arn't there. Has these fools been following the stock market lately? How about the unemployment numbers? They announced yesterday that they are going to have Sec of Treasury Paul O'Neil back on CNBC but I missed it yesterday.

I guess after his previous statement or should I say non statement about the dollars future didn't go over that well with the CNBC Cheerleaders and they are blaming him for the down turn and negative sentiment of the dollar lately.

I can't stand the whole bunch of them and I can't wait to see them proved wrong. One stock broker on CNBC recently being interviewed by Maria Bartaloma said he quit and joined the coast guard because his life was threatened. Well thats what happens when you lie to people and people loose their lifes savings. well gold looks good today, go gold. have a great weekend,
Sir Rock

Gauntlet-Runner2("GR2")The Bulls are still loose at this Rodeo in gold#748285/3/02; 07:37:47

Sometimes I get tired of speculation and the "when is it really going to happen?" question. Looking at the simple facts. Gold price breakouts have been occuring in approx. 4 month intervals between points of rapid ascent.

We have factual data within the past year of these periodic POG breakouts:

1st= mid May 2001 was a $22 spike with a fallback of $22

2nd= mid Sept 2001 was a $20 spike with a fallback of $15

3rd= late Jan 2002 was a $25 spike with a fallback of $10

So a plain vanilla prediction.........
Next~late June 2002 says a $30 spike with a fallback of $5.
(this is a lean-bean analysis with no fudge factor involved)

Am I really "making this up?" That is from a 1 year gold chart. The slower your time frame the more meaningful it is. For a more current analysis, we can see each spike was "framed" in a head and shoulders pattern. We have passed midway between the first shoulder and the center crescent midpoint awaiting the next first shoulder of the coming June~~~$30 spike~~~. So I'll give you 10 more trading days for POG to rabbit hop up to 315 not 312, and to go flat across not dropping back much over a buck if at all. Then it does the doldrums till mid to late June when the plaster gets knocked off the ceiling and a big hole is discovered in the basement of the stock market where the meteorite landed. Goldshares should do the "giddy willies" volatility reprieve scaring everyone in them attracting millions of minions. Hedged stuff is going DOWN not up and unhedged stuff is doing the air glide off the snowboard jump. Yes we are in for a wild ride. And the folks in the mountains still do not believe we ever walked on the moon saying it was all done on a stage in Hollywood to fool the American people. Have to love the mountain people though, the folks stashing gold and PGMs.
Because Spot is a good pet but he just likes to sleep alot between hunting seasons.
"Hey it's mid June and I have to pay like a $50 premium per coin now............." -history, be a part of it, buy now and make it happen. -GR2

nickel62Paraoia or just historical awareness?#7482905/03/02; 07:51:03

After having read goldquests post of the URL describing the gold confiscation of Roosevelt in the spring of 1933, I am wondering if the current "war" "emergency" or whatever is really not sufficent justification to confiscate anything the government feels is necessary. My ownership in gold mining stocks and gold coins in a federally liscensed bank safety deposit box(complete with security cameras watching what I put in and take out) is really safe from any future confiscation. If ,as we postulate here, the stakes are as great for the established powers as they appear, it will be a minor step for the government to grab whatever they need to refinance their control. The large gold mines are no doubt aware of this and realize that their resistance would be futile and therefore they have either become part of the group such as Barrick, Placer, and AngloGold or they remain strangely silent like Newmont and the few other majors. The need to put value back into the currency at some future date makes the nationalization of a gold mine a minor issue. If the Congress of the United States could abrogate all of the gold clauses of all the millions of contracts that existed in commerce in the 1930s what is really to stop them from forcing a sale or confiscation of individually held gold in a "crisis" like the war against terroism. The flimsy justifications that the government used in the 1930-1970 period to make ownership of gold a felony is almost unbeleivable in light of the Constitution of the United States. Yet they did it. To hoard became a crime, to not comply with the consfication became a felony. To have property which the banking system could not control was a punishable offense...Amazing.
Black BladeGreenspan: Options Rules Need Changes#7483005/03/02; 07:52:00


SEA ISLAND, Ga. (Reuters) - Federal Reserve Chairman Alan Greenspan on Friday strongly urged U.S. regulators to overhaul rules on stock options, saying the Enron debacle highlights the need to add clarity to corporate accounting.

The Fed chief said the current system, which does not force companies to expense stock options granted to their officers, distorts the corporate profit picture and poses risks to the marketplace.

"The seemingly narrow accounting matter of option expensing is, in fact, critically important for the accurate representation of corporate performance," Greenspan told a financial markets conference convened here by the Atlanta Federal Reserve.

Black Blade: I agree, these overpaid charlatans posing as corporate officers are looting the companies bank accounts without any accountability. There give the shareholder "the finger" while they and their friends abscond with the cash, ultimately leaving ruin in their wake.

Brett WoodsAustrian gold coins hot items#7483105/03/02; 07:54:58

VIENNA (Kyodo) Austrian gold coins featuring images of the Vienna Philharmonic Orchestra have logged record sales in Japan since Japanese maestro Seiji Ozawa conducted a New Year concert in Vienna on Jan. 2.

According to Austrian Mint officials, 60,000 ounces (about 1.86 tons) of the gold coins were sold in Japan from January to April, five times the volume registered in the same period last year and in excess of total overseas sales last year.

The gold coin series, first issued in 1989, is known formally as "Vienna Gold Coin Harmony," with the Vienna Philharmonic Orchestra as the central theme. Violins and other musical instruments are featured on the flip side of the coins.

Austrian Mint officials said they are pleased with the sales surge in Japan and said Ozawa's New Year concert triggered the popularity of the coins.

Austria sold 20,000 ounces of the "Harmony" gold coins on the domestic market last year and 50,000 ounces overseas, 80 percent of this total in Japan alone, according to the Austrian Mint.

Four different "Harmony" coins are in circulation: 1 ounce, half ounce, one-quarter ounce and one-tenth of an ounce.

According to coin dealers, the 1-ounce gold coin fetches 46,600 yen in Japan at coin retailers.

The Japan Times: May 2, 2002

Golden Bearnickel62 (msg#: 74829) Paraoia or just historical awareness?#7483205/03/02; 08:01:11


"To hoard became a crime, to not comply with the consfication became a felony. To have property which the banking system could not control was a punishable offense...Amazing."

Do you think your bullion in that safety deposit box is beyond confiscation? That's not a trade I would bet on...

Paranoia is almost healthy when dealing with beaurocrats!


Black BladeGlobal: Debating the Current Account #7483305/03/02; 08:01:22


There's a sharp difference of opinion in Washington these days over the implications of America's gaping current-account deficit. The Bush Administration has taken a fairly blasé stance, suggesting that the external gap isn't a big deal -- that it is nothing more than a by-product of a voracious foreign demand for dollar-denominated assets. A few blocks away, the International Monetary Fund puts it quite differently. In its just-released World Economic Outlook, it highlights the US current-account deficit at the top of a list of imbalances that have the clear potential to jeopardize any recovery in the global economy. Who's got it right?

Black Blade: An interesting question posed by Stephen Roach.

BTW, did anyone notice that last months unemployment numbers were revised downward? In March, firms had cut 21,000 jobs, a sharp downward revision from the 58,000 increase estimated a month ago. That's sixth straight consecutive downward revision!!! Can't the BLS get it right? As I have been saying, it is easy to statistically massage the data. Of course after the fact, revising data is quickly forgotten by wall Street.

nickel62Sign of the times! Closed banks being made into convenience stores, bakeries and 7-11s#7483405/03/02; 08:06:14

Hanamasa is among a crop of companies that, thanks to declining land prices and an ongoing rush by merging banks to shut down overlapping branches, have secured a foothold in prime Tokyo locations.

Hordes of other businesses -- from convenience stores to bookstores to restaurant chains -- have also made advances recently.

In what was formerly a bank vault, customers are served "soba" buckwheat noodles at the Ueno outlet of the Takadaya restaurant chain in Taito Ward, Tokyo.

According to the Japanese Bankers Association, the number of branches of city banks, which have realigned roughly into four megabank groups in the last 2 1/2 years, has been steadily declining.

As of Sept. 30, the number of domestic city bank branches stood at 2,408, down 233 from March 1999.

Black BladeDive! Dive! Dive!#7483505/03/02; 08:11:45

The USD Index is crashing (see graph at link). Meanwhile Gold is moving solidly higher. People are concerned that the much touted "recovery" is nothing but a pipedream. Also the amrket indices are hammered - it's only a matter of time before the word goes out from Washington and Wall Street to: buy! buy! buy! Just as in days of past panics. JP Morgan was famous for propping up the markets and now we have the "Presidents Working Group on Financial Markets".

"Interesting Times"

- Black Blade

nickel62Well it looks like Tokyo #7483605/03/02; 08:11:53

Only has 2175 more bank branches to go...I hope there is a need for that many new noodle shops!
nickel62Golden Bear#748375/3/02; 08:17:53

No, I guess it is fact that was what was so terrifying about the historical account. I was wondering about the real upside of my gold mining stocks as well. As a major part of my retirement and my investment future there positon is of concern as well. And this from a gold stock analyst.
AU_Poor@Black Blade - Greenspan on stock options#748385/3/02; 08:21:51

I recall reading that Microsoft would have lost $8 billion last year (instead of a net of $X billion) if stock options were counted as expenses. Conveniently, Microsoft et al ARE allowed to deduct the options against income for tax purposes.

Any guesses how SMs and PMs might be affected by this very remote possibility?

Greenspan is the "good guy" now on record to do the right thing, but I would bet his marching orders are the opposite.

nickel62With apologies to Black Blade for adding to his snippits...on the Morgan Stanley Stephen Roach article....#748395/3/02; 08:26:53

Massive and ever-widening external imbalances can not be financed easily in perpetuity. They require ever-greater volumes of capital inflows that eventually lead to a point of saturation insofar as foreign holdings of dollar-denominated assets are concerned. That's all the more pertinent in light of our current-account deficit forecast of nearly 6% of GDP in 2003 -- and its concomitant external financing need of nearly $2 billion of foreign capital inflows per day. If such a massive external funding requirement doesn't lead to a saturation of the foreign appetite for US assets, I'm not sure what will. Just because America's external financing was manageable in the 1990s doesn't mean it will be so as the as the ever-widening current-account deficit now ups the ante on capital inflows. Needless to say, that conclusion is in direct contradiction to that of the capital-flow-driven justification of the Bush Administration.

Interestingly enough, there are signs suggesting that this point of saturation may now be at hand. As Joe Quinlan and Rebecca McCaughrin have recently noted, the portfolio portion of capital inflows into the United States has slowed dramatically in early 2002 (see their 1 May dispatch, "US Portfolio Flows Update -- Precarious Underpinnings"). Over the first two months of this year, foreigners purchased just $27 billion of dollar-denominated assets, a dramatic reduction from the $100 billion pace in the first two months of 2001. Meanwhile, foreign direct investment into the United States -- the other major piece of the capital inflows equation -- has also slowed dramatically. FDI into the US was $158 billion in 2001 -- only a little more than half the $295 billion average pace of 1999 and 2000. Fully two-thirds of this slowdown is traceable to diminished FDI activity from Europe; that's largely a reflection of a dramatic downshift in the cross-border M&A cycle -- a trend that has continued into the early months of 2002.

One by one, the sources of foreign capital inflows into dollar-denominated assets seem to be drying up. First, it was equities, an understandable by-product of the post-bubble climate. Then it was FDI, reflecting the pronounced downturn in the global M&A cycle. And now it appears that foreign purchases of US bonds are on the wane -- initially Treasuries and, more recently, corporates. Needless to say, this draws the key premise of the current-account defense of the Bush Administration into serious question. To the extent that the capital account is turning, current-account financing difficulties can only intensify. The recent weakening of the US dollar in foreign exchange markets rounds out the picture. This should hardly be surprising -- currencies are the relative price that often picks up the bulk of the arbitrage between current- and capital-account disparities.

Black BladeUSD Index Plunges!#748405/3/02; 09:02:06

Well look at that will ya! The USD just tumbled below 114! Gold should respond by rising. Meanwhile, there is absolutely no positive news for the economy. In a word - "GRIM"

- Black Blade

Mr GreshamYumpin Yiminy!#748415/3/02; 09:17:53

I think we got ourselves a gusher, Pa!
USAGOLD Market CommentaryTanks Roll in MidEast; Gold Rolls on the Comex; Dollar, Dow Sink#748425/3/02; 10:00:26

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"For more than 2000 years gold was viewed by generation after generation as a safe haven in times of crises. Gold was an insurance asset, in fact, formuch of the time the only insurance asset. 2000 yearsof history is not wiped out within two decades. This wave of global prosperity cannot continue forever, andI believe, history is busy proving that right now as we speak."
Ian Cockerill, CEO, GoldFields

Gold Market Brief (5/3/02) . . . Gold worked its way higher this morning renewing its assault on two year highs as the Labor Department reported unemployment at a 7 year high and Israel mounted an assault of its own on Hamas strongholds in the West Bank city of Nablus. Hopes that some progress was being made in the conflict between the Israelis and Palestinians were delivered a set-back when Israeli Prime Minister Sharon stated his refusal to sit down at the peace table with Yasser Arafat, and Republicans in the U.S. Congress began to register their disapproval with Bush administration handling of the problem. There are reports this morning of physical buying in both Europe and North America on the back of these developments and attendant concerns about further weakness in the U.S. economy and the wobbly dollar. U.S. stocks are getting hammered. Gold's advance today is without the help of Japanese gold buyers who are celebrating the Golden Holidays. The World Gold Council reports that buying in India has picked up its gold buying in advance of the upcoming wedding season. Alan Greenspan delivered a blow to the stock market today by calling for the inclusion of employee options on the expense side of corporate balance sheets. Reporting and regulation of option positions could put a large number of already fragile blue-chip balance sheets underwater.

The safe-haven metal held its own all week despite a steady drumbeat of negativity from the bears, and concerted attempts to drive it lower. Owners of the metal seem to be in it for the long term with the steady flow of news on losses, abuses and criminal activity in corporate America adding the backdrop.The firm tone gathered pace this morning as negative news seem to hit the markets from all directions. "Gold still looks like it's breaking out of formation and still showing surprising strength," Alaron's Phil Flynn told CBS Marketwatch. "People are going to more traditional investments on concern in the stock markets."
The safe-haven metal has enjoyed something of a resurgence over the past several weeks in response to tensions in the Middle East, strong Japanese buying, bullion bank and mine company covering, and a general sense that world equities markets still have their worst days ahead. The dollar, which had experienced a selloff last week, steadied some this week, and then tipped its nose this morning and took a dive. Doubts have begun to surface globally about the dollar's long term value despite repeated comments from the U.S. Treasury Department that the strong dollar policy is still in force. The markets do not appear to be convinced and the general lack of confidence on a global scale is showing up in the gold market.
Have a good weekend. See you here, Monday.

PippinJudiciary Crisis ?#748435/3/02; 10:13:31

WASHINGTON –– President Bush accused Senate Democrats on Friday of "endangering the administration of justice in America" by balking at many of his judicial nominees.

Declaring a vacancy crisis on the federal bench, Bush said, "Justice is at risk in America and the Senate must act for the good of the country."

The sharp challenge to the Democratic-controlled Senate reflected a mounting fight between the White House and Democrats over the shape of the federal judiciary. Democrats have objected to the nominees on many grounds, including their contention that Bush's candidates tend to be conservative.

The standoff is a warm-up for what both sides predict will be an enormous fight if Bush gets a chance to fill a Supreme Court vacancy.

YGMGold Lease Rates.......Up, Up. & Away.......#748445/3/02; 10:23:14

More pressure on the Cabal.....Must be alot of Valium being prescribed in Manipulation world.......Here's hoping our greatly missed Sage..."FOA" is enjoying a sunny beach somewhere and watching the great 'Unraveling' on his laptop!

Sure do wish he'd drop by with some of his perceptual Gold thoughts tho!....

YGMXAU.........We will see 90 by June 30th????.........Hmmmmm....OK!#748455/3/02; 10:48:31

Up to 78+ again....Go Baby!
YGMLease Rate Graph...#748465/3/02; 11:04:37

Was messed up earlier....

Cause it 'was' showing huge gain earlier.....Sorry!
Sierra MadreThe posts today are of exceptional quality!#748475/3/02; 11:09:27

Nickel62, Miner49er...excellent stuff. Unique.

Miner, I'll have to read carefully - must be going now, will be back later. Mahathir is perhaps the ONLY head of government who is doing any thinking. Truly amazing.

Nickel62, your historical post brought to mind the life of Richard (?) Cantillon, during the John Law episode in France.

Cantillon made a bundle before the bubble popped - he saw it all coming, quite clearly - and slipped out of Paris very quietly. Lived the rest of his life comfortably in London. Unfortunately for him, his cook murdered him one night.

Cantillon wrote THE first book on economics of modern times, which few people know about.

Today, looks like gold is really turning vicious. I do believe we have reached a turning point, and gold will run away from the controllers. They will attempt a comeback - but not to return to present prices, just to control further rises - after a substantial rise, when the weakest holders begin to think of "taking their profits" (those ninnys who still think in dollars). That's when the controllers will mount their counteroffensive, to stem the further rise. They may be successful, but only for a time.


nickel62The Golden Cheesehead memorial post#7484805/03/02; 11:15:43

miner49erSierra Madre @74847#7484905/03/02; 11:28:37

I will be 100% away from all electronic access after this afternoon for a week, so if you should proffer any comments, please don't take it as rude when you don't hear from me... I will get back after my return.

Also, the paragraph where I hypothesize an oil producer buying in the current market, where it says: "it would fight this with maniacal desperation," the "it" should read: "the system" so as not to confuse "it" with the oil producer...

Thanks for taking the time to read...


RobotGuyHow long can the FED continue to pump more money into the system to try preventing it's inevitable slide?#7485005/03/02; 11:29:39

RobotGuyDOW was practically in freefall this morning until it magically halted around the "psychological" 10000 mark. Hmmmmm.#7485105/03/02; 11:33:13

Mr GreshamUnemployment#7485205/03/02; 11:40:32

Gee, and I thought unemployment was supposed to be GOOD for the stock market -- means the Fed will have to lower interest rates (snarf, snarf)...

"When I use a word, it means just what I choose it to mean - neither more nor less..." -- Was that the Red Queen, or Humpty Dumpty? no matter

AndúrilRobotGuy 'How long...?'#7485305/03/02; 11:43:43

There is no limitation on the flow of money possible. At any flash in time! Choose gold for while you sleep. Choose gold for your weekend. Choose gold when life calls you away from your monitor. You think you can stand toe to toe with the Fed, quicker on the draw than they? If you think that you will not blink first, then you are already dead. This is why gold is held by men of wisdom, by men full of life.
USAGOLD / Centennial Precious Metals, Inc.Hard assets... Easy access!#7485405/03/02; 11:48:12

Golden Goal

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

YGMGold Hedgers, Silver Miners, Bubble Money#7485505/03/02; 11:54:07

When the Writing's on The Wall.......

Bullion moves approx 5 $, ABX & PDG move 2% or less. Two known Silver miners PAAS & Apex move 9+% and 2+% with silver up $0.06....To my tired eyes this appears to have the earmarks of serious PM investment of Bubble dollars coming out of the Dow & Duck...Imagine when all those Bubble Dollars get after the trend. We all remember the buying frenzy of Dot. Com madness, well all that Fed Wallpaper is still circulating and needs a nest.....

FWIW....Some Silver Stats from past PM Bull Markets, from GE Pages....

"Silver's price hit an all-time high of $52.50 per ounce in 1980, subsequently falling to its recent history low of $3.51 in 1991. Among the most prominent precious metals (gold, platinum and silver), silver tends to be the most volatile in price. In the 1979/80 precious metals bull market, silver's price increase was double gold's. And during the 1982 price surge, silver tripled gold's percent price increase. In the 1985/87 rally, silver just nosed out gold (96% to 79%). However, silver's percent run-up in the 1993 bull market was again twice that of gold."

**Now I'm not advocating AG over AU as investment as I believe Gold is going to be different this time, but some of us need a dose of history to justify our holding of Silver in even small percentages of overall PM's.....YGM

RobotGuyAnduril#7485605/03/02; 12:25:07

My apologies, I regret to inform you that I am not aware of the entire meaning of your message. I was implying in my previous post that it is very unwise for a nation's government to continue with ineffective and possibly harmful counter measures to prop up a hollow economy. Do I "think I can go toe to toe with the FED?" ? Not sure exactly what is meant by this question. Perhaps I have misinterpreted your intended message, but it seems apparent there are insinuating undertones in your message. I apologise if I have offended you in any way, perhaps it will be wise of me to not participate in this forum, but merely observe.


da2gWhat economic recovery?#7485705/03/02; 12:31:42

Seems like the preferred footware provider to da2g, Florsheim, is unfortunately going out of business. I was able to procure several pairs of Florshiem Imperial Wingtips at a hefty 58% discount, however.

More bones to Black Blades bone pile. Where does it all end?

AndúrilClearing the message for RobotGuy#7485805/03/02; 12:35:58

Sorry, not YOU the individual, personally. Use of word 'you' was to be understood as general references, equal to 'citizen' or 'saver' playing dangerously with dollar accounts.

Healthy and happy with gold is better.

The Traveler@Nickel62 (#74829)#7485905/03/02; 13:01:52

Do not doubt that your "property rights" will be trampled in the crisis to come.

Since my first visit here three years ago, it has been my constant theme that socio -political pressures will determine your financial survival in the post – dollar world. If all paper burns and the debt supported real estate market collapses (no lenders thus no buyers), how likely is it that the masses ** many of whom have lost their home equity, 401(K) and/or jobs** will demand of Washington a quick fix at any expense! People go berserk now over a 10-cent increase in a gallon of gasoline or a $1 ATM charge. Ponder the social unrest in Argentina – and they have been through this twice in the last two decades. By contrast, Americans are currency crisis virgins!

Remember – less than 1 in 1,000 Americans own any gold coins or bullion and less than 1% of them hold coins or bullion in quantity. Do you not believe their jealous cry will be "Its not fair!" or the campaign slogan will be "To get America rolling again, lets redistribute the PGA's windfall." Your Uncle did it to the oil industry in the late 1970's.

The Fed currently punishes savers with a negative real return to the benefit of debtors. Will not your Uncle also favor the electorate over the PGA in the crisis to come? Bet big on it!

Outright confiscation? Not likely as your Uncle cannot stand behind the legal tender laws as he did in the 1930's. Besides, its simpler just to tax you at a 70% non-capital gains rate. For the youngsters here, 70% was the top marginal rate of the tax code prior to Ronald Reagan's 1981 election.

With the "money laundering" reporting that your PM dealer will soon be required to do – which might now cover numismatic coins and possibly impose a withholding rate to be tendered to the IRS along with his report on your transaction – your windfall will be exposed for your Uncle to tax. Direct barter transactions can easily be taxed as well by incentives to report.

Even if you are lucky enough to have gotten or to get your physical to the EU, reporting requirements there will still tell your Uncle that you had a windfall and thus owe taxes.

Only if the unraveling of three decades of financial experimentation becomes very harrowing will gold be confiscated outright at a "fair" price (smile). Then a two-currency regime will be decreed by executive order - one as a domestic peso-like fiat and the other an international, gold backed currency that Americans will not be permitted to hold even in overseas accounts (SSN and passport numbers will betray you). We will still need to import five million barrels of oil per day despite harsh conservation measures and the producers will want to be paid in something of value. But this too will flop as having twice been burned, the Euro with all its warts will be favored as the new reserve currency by Central Banks whose trade is in a net surplus.

In summary, the welfare establishment hates gold and PGAs and will do all in its power to punish them for their self-sufficiency.

Best regards to all,

The Traveler

BoilermakerThe SM#7486005/03/02; 13:12:29

It looks like the PPT had to get into the market about 10:00AM today to kill a rout. Can any one tell me if this one-sided game can be played long term without risk? It seems there should be a lot of negative paper out there ready to implode. How/when does this happen? Who gets run over?
axUSD AX INDEX BREAKS BELOW 99.70MG !#7486105/03/02; 13:30:49




GoldnSilver2002People always ask for a date.#7486205/03/02; 14:06:02

If one looks closely at the 1 year chart for Gold,one sees the cabals fingerprints on every rush.As it accelerates upwards suddenly it is pushed down.But lately Gold has responded to every plunge as one last oppurtunity to get some at artificially low prices.Instead of hating the cabal'some of us must toast them.Firstly they allow the average joe to buy in at prices they can actually afford.Secondly,their folly has helped bring about some of the influences which will ultimatley send gold much furthur than if it had been left alone all these years.We always see the day "it" began in retrospect.In my opinion,if one looks closely one can see it has begun.The media wont tell us until wisely they proclaim "we knew it all along",pretending to have warned a clueless public."gold whats Gold?",many will proclaim.

Clearly Gold is starting to Hammer on the castle doors,the support beams are starting to snap,and some of the foot soldiers(shorts,hedgers) are starting to abandon their positions and run to the hills.All we need now is something to happen to the us economy,that "no one foresaw".Enron was the iceberg?Sept 11 was the end of war on terror? The media is telling us the truth?Dont ask for a date,if anyone knew that the twin towers might still be standing,but they arent are they.Gold to the moon?Your damn rights it is and soon!!

Cavan ManThe Traveler#7486305/03/02; 14:21:39

Thank goodness for dual citizenship.
TownCrierThe latest personal look at the men behind the big desks#7486405/03/02; 14:25:08

Some excerpts from updated commentary courtesy of our friends at Central Banking Publications Ltd.

The two unmanned seats on the Federal Reserve Board of Governors look like they might finally be catapulted back into action, so that the board could be firing on all seven cylinders before long. The empty seats have been languishing uncomfortably in the background while the board has been working overtime with just five members participating. But it is widely reported that President Bush has now singled out two possible candidates for the board: Princeton economist Ben Bernanke and Federal Reserve official Donald Kohn. ...(more)

Viktor Gerashchenko, may no longer run the Russian central bank, but he still knows how to grab the headlines. With his usual dry wit, he has been poking fun at the snail-like Russian bureaucracy - of which he was once a part - complaining that they were fumbling over his pension application. The press loved it: "If I don't manage to get the pension bonus awarded to former state employees I'll have to work." He said that he was toying with the idea of becoming a road sweeper, and that at least in that way he could realise his childhood dream of keeping Moscow's streets clean - which is more than he did, some say, for Russia's banks.

The old-style council of the Bundesbank has undergone sweeping changes as part of changes bringing the bank in line with the new era of the European single currency.

YGMA "Must Read"......Thom Calandra...'The Bull' in 'Bull-ion'#7486505/03/02; 15:16:16{C8028807-6DC1-48BB-B233-4375B05E226D}

BTW...When I used the Central Fund as a point of interest for Silver ownership awhile back? Well was I ever behind the times. They now hold over 8,000,000 oz of AG....

Read on......Thom's best yet.....

GraefinLatest from Arch Crawford...5/1/2000#7486605/03/02; 16:21:04

Crawford Perspectives 5/1/2
by Arch Crawford

"The planetary aspects affecting GOLD/Oil tonight are the following:

Jupiter quincunx (150 degrees) to Neptune 9:45pmEDT and
Sun square (90 degrees) Neptune 8:11amEDT

GOLD opens at 8:20amEDT

We believe that a near-term TOP is forming, and may already be in place.
If the aspect power maximizes on Wed. OPEN, there may yet be another POP to new highs for the move by then. The Timing is much better/closer in Gold than in stocks, which may show strongest price moves or tops/bottoms +/- 1-3 days. GOLD often makes the turn within Minutes of the aspects!

In any case, we expect some reasonable consolidation against an overbought condition.

We are selling a portion of positions this afternoon, and will Sell More on Wed. OPEN!

For short term trades, we will actually take new SHORT positions.

For anything longer, we will hold Core Positions in Gold & Gold Stocks, for much higher prices later.

We will attempt to Cover Shorts and reposition long side at undetermined future lows."

Arch Crawford
Crawford Perspectives

- Gräfin

RockThe Traveler#7486705/03/02; 16:41:04

That was a very mind provoking thesis my friend, thank you for your time. I have a quick question for any of you brilliant knights or ladies of the round table. From time to time I have heard at the table that safe deposit boxes may not be a safe place to store our gold in these times where the gov't can inspect and even confiscate our gold should we go to withdraw it during a financial meltdown of sorts. I would assume that many of us has at least some of our gold in those safe deposit boxes.

Do any of you recommed storing all of it at our homes using construction concealment, burying at the farm and so forth. As far as I'm concerned I have a sophisticated alarm system, a huge watch dog, a few high powered weapons and so forth yet I still don't believe in storing the whole enchilatta (which really isnt that much in the first place) all at the ranch. Any suggestions would be appreciated.

And I'll concur with Black blade, store some extra non-perishables at the house and some extra bucks for a few months you never know if and when public services could be shut down for one reason or another. Take care and thanks for everything.

Sir Rock's story time...#7486805/03/02; 17:07:19

A few years back I was employed in a money-handling position. After a criminal investigation regarding the embezzlement of hundreds of thousands of dollars, my employer put new safegards in place, however, those safegards must be logical. As always, I tucked my deposit cash into a regular envelope and marched over to the cashier's office, but after the review of money-handling, my direct supervisor wanted me to use a brown zippered bag with a lock on it. Good god! I remember telling her, "Why don't you just put a siren and red light on my head as I walk with the cash??"
The moral of the story?
I continued to take my cash deposits over in plain envelopes, but varied my routes each time I left. Leave a trail which no one can follow and blend in with everyone else.

- Gräfin

Gauntlet-Runner2("GR2")Russian soldiers leave gold behind.#7486905/03/02; 17:17:45

I like the contrast between the blue and the gold.

But when it's all said and done,

"Mail picture of boat" still comes to mind.


"Sorry honey I spent all our money on physical gold, so we can't have any kids" because I can't sell it with the premiums that it cost me to get it. I'm feeling blue.-GR2

USAGOLDNickel 62. . . .Your 74829#7487005/03/02; 17:21:35

It is interesting to see the light go on in individual's the way it did for me some time ago. Quite a jolt once the realization sinks in that gold ownership in the United States is a privilege not a right. For a real revelation read "From Constitutional Republic to Corporate State: The Federal Reserve Board, 1931-1934" by Dr. Walker F. Todd (1995) as excerpted in "How You Can Survive a Potential Gold Confiscation" by myself and George R. Cooper. In that inclusion as an Appendix to the report, Dr. Todd tells the chilling story of a confrontation between Senator Glass (of Glass-Steagall fame) and Franklin Roosevelt the night before Roosevelt's inauguration.

Senator Glass confronted Roosevelt on his plan to close the banks virtually as his first act as president telling him he didn't have the authority. Roosevelt replied that he intended to get the authority which he promptly did for that and other eggregious acts: On March 3rd, 1933 Roosevelt closed the banks. On March 8, 1933 he requested from the banks a list of all persons who had withdrawn gold or gold certificates from the banking system. On April 5, 1933, citing a "national emergency" (which Glass considered preposterous and Hoover likened to the Nazis setting fire to the Reichstag in order to usher in Hitler's "emergency" rule blaming the fire on the Communists), Roosevelt confiscated Americans' gold. On December 28, 1933 Roosevelt issued an additional Executive Order exempting gold coins minted 1933 or earlier from confiscation as collector items. Anyone who thinks that the precedent does not exist for another confiscation or that the U.S. government under pressing circumstances would somehow by-pass that temptation doesn't completely understand the reasons for confiscation in the first place.

Repeatedly, in the documentation you see justifications like "to protect the currency system of the United States," "private hoarding. . .poses a grave threat to peace, equal justice," etc. In the first confiscation executive order, Roosevelt has the temerity to refer to Americans as "subjects of the United States." Comtemptible as it is, we must understand that governments will do what it takes to survive, Argentina being the most recent example -- and that to me is the real lesson of the "Tears of Argentina." It is also apparent that the gold confiscation did not occur so that the government would end up with some sort of windfall. The gold confiscation occurred so that the government could open the field to pursue its monetary policies without worrying that the population would head for gold in protest and in order to protect itself. How can anyone who comes to these essential understandings say that it wouldn't happen again?

Once again, the key is pre-1933 gold coin ownership. As the study shows, these items traded freely in the United States between the confiscation in 1933 and re-legalization in 1975 We believe they provide the best chance for you to come-in under the radar because precedent gives them special standing. As a small and out of the way market, they were not a threat to government plans in 1933. They will not be threat in the future. We continue to believe that they provide the best chance for investors to hold on to their gold even if we have a repeat of 1933. Note, we say "best chance" not gaurantee.

As renowned currency expert, Dr. Franz Pick said many years ago "It is an idiosyncrasy of governments that although they may prohibit ownership of gold in any form, they are reluctant to touch collections of numismatic gold coins. Today (in the early 1970s), there are some 49 counties which forbid ownership of gold by their citizens, but do allow holding gold coins for numismatic purposes." By precedent, "numismatic" has become synonomous with coins dated 1933 or earlier, as Mr. Cooper goes to great lengths to show in "How You Can Survive a Potential Gold Confiscation."

To receive the document in full in pdf form, e-mail

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

and we will forward it to you free of charge.

The monograph includes an update of Henry Mark Holzer's "Chronology of Documents Relating to Gold Confiscation" by George R. Cooper, JD. Henry Mark Holzer was Ayn Rand's attorney.

HOOSIER GOLDBUGCONFISCATION!#7487105/03/02; 17:28:17

Traveler, if your thesis (confiscation, taxation, property rights trampled, etc.)is any way on the correct path it will go after the dollar burn, WHY should we continue to purchase GOLD coins from our most respected Mr. Kosares at CENTENNIAL PRECIOUS METALS????????????????
From my interpretation of the archives of ANOTHER and FOA, your position on the matter is in direct contrast to theirs!
What information are you privy to that substantiates your claims/predictions. I shall discontinue my purchases of GOLD coins until this matter can be resolved. THANKS in advance! d.j.p.-HOOSIER GOLDBUG.

USAGOLDAddendum. . .#7487205/03/02; 17:33:29

I should have added to my post below that there is a misconception among investors that pre-1933 gold coins carry very large premiums over their gold content. That is simply not the case. Please call either George, Marie or myself to discuss the details. Most are pleasantly surprised at how close these items trade to the gold price. Also, they follow the gold price up and down just like bullion coins.

P.S. Sorry for the spelling errors below.

USAGOLDHoosier. . .#7487305/03/02; 17:37:10

Pls read my post below and contact This email address is being protected from spambots. You need JavaScript enabled to view it. for a copy of the report. It's not as bad as you think. It is better to understand the dangers of avalanche and make the proper adjustments in one's plans, than to ignore the dangers and find yourself totally buried. . . . . .
Gauntlet-Runner2("GR2")Hoosier Goldbug#7487405/03/02; 17:53:06

The Traveler is right about the big brother "cameras on every corner" future we face. Trust in the outback where in Revelations it says, "the woman flees into the wilderness where she has a place prepared for 3 1/2 years from the face of the beast." It has the speed of the leopard and the teeth of iron with claws of brass.
Buy more gold not less because by HIS grace you can use it to survive! At about the same time the beast goes hard after the free the sun heats up and as the polar ice caps melt and Greenlund becomes farmlund the Mississippi delta is looking like the gulf it ran into. Manhattan becomes Venice. And every oceanfront city on every coastline on earth is like 10-20 feet underwater. So the picture of the boat is important.

So when they talk of gold confiscation, that is elementary and "assumed", all goldbugs who know their history have read about how safety deposit boxes in 1933 had tags put on them, "To be opened only in the presence of a government inspector."

Buy it, hide it, wear it, tell it to your closest kin, but don't expect to be popular with it when hyperinflation hits. The best thing you can do is to get your relatives into gold so they don't end up moving in with you.

PH in LAIs the sky really falling?#7487505/03/02; 18:07:44

If we are to believe the "Chicken Littles" of this forum who run around crying "The sky is falling... keep a few month's worth of cash laying around, and plenty of canned food, etc in case everything goes to pot..." all our precious gold will soon be confiscated and/or taxed.

This is pure ego-centric logic at work. Let me re-phrase their positions:

"The main purpose of government is to take everything away from us small (but honest) folks. The small honest citizens must eventually lose everything and the easiest for all concerned is for the government to take it from them... if not by outright confiscation then by 70% tax rates."

But why then did the government not "call in" all the stock certificates during the tech bull market? I didn't see them going house to house calling "Turn in your Yahoo!" when it was at $250. No 70% taxes on profits either. Windfall or not!

Why is it that everything must be painted in such negative terms?

RockHoosier Goldbug#7487605/03/02; 18:10:11

Don't be alarmed my friend, thats why its important to consider those pre-1933 euro gold coins that USA Gold has and like MK said the premiums are as cheap as that of American bullion. As for me I have disversified my gold portfolio having some of each, a little American bullion and some pre-1933 French Roosters and Swiss Helvitas.

The fact is no one really knows what to expect from our government in times of a monetary crises but if and thats a big IF they were to pull that same stunt as they did in 1933 and decide to confiscate gold at least you would be protected by having some of those pre-1933 coins which would give you a valid argument to keep your gold as anything deemed rare or religous was exempt from confiscation.

Even knowing that the confiscation word is something I dont like to hear that didn't stop me from obtaining gold. If worst comes to worst the gov't buys it back from you anyway so you didnt lose anything but in effect your much better off knowing you have gold to protect yourself and your family and you have a hertiage to pass on to your children in these volitile times we live.

So don't be discouraged and sit on the side line and let a great opportunity pass you by. This train won't be stopping here again so get on and enjoy the ride while the fares are affordable. Nobody and I mean nobody knows what the gov't may or may not do but one thing we know here at the round table, get yourself some gold and you'll be glad you did. Cheers, even with all of America's faults we still live in the greatest country on the face of the earth.

Sir Rock

RockGraefin#7487705/03/02; 18:35:04

"Leave a trail which no one can follow and blend in with everyone else." Good advise Graefin.
Au-someRe: Gold Confiscation#7487805/03/02; 18:56:28

I'm all for it. When things get bad enough and the price of gold gets high enough, I say we all march on Ft. Knox and confiscate the governments gold.
What? You think I'm kidding?

R PowellComparisons#7487905/03/02; 19:12:35

I've often heard of the value of one ounce of gold being roughly equal to the cost of a good suit.
Being extra partial toward the poor man's gold I sometimes look for comparisons to the value of one ounce of the white metal.
Today's close,
July silver 461.50
July soybeans 461.25
One ounce silver will buy one bushel of beans with one-quarter of a penny in change. I don't know why I find this interesting but there may be some future value in such trivia.?
Besides, I had to say something before wishing everyone- Happy Weekend!!

YGMThe Term "Chicken Little".........#7488005/03/02; 19:34:30

Wasn't that phrase coined.......

by a Wall St Anal-yst a few months before the crash of 29?

Seriously tho as the historical malfunctions of humankind do and will repeat themselves in one form or another thru the ages, they definately will increase in intensity and severity, primarily due to over population and dependancy on modernization of basic living needs....One only has to watch the fools on the "Survivor" series to see how patheticaly helpless a few adults are when deprived of basics for a mere 39 days. With knives, pots, shelter, fire
and a tropical island & sea they cannot even fashion wooden hooks, bamboo fish/crab/shrip traps or dig a pit to trap that fat wild pig. Makes me embarrassed to watch the fools.

Well folks the cities are full of millions of such helpless fools....The sky isn't gonna fall, but people are when times get bad enough....And the dirty 30's won't hold a candle to what we'll get next time....WW 2 was won with a nuke but we've not seen a war fought with them....You don't have to be a fatalist to want to speak out or to be one of God's 'Watchmen'.....There are many such Watchmen out there even tho they themselves may not realize it.....YGM.

Black BladeSlouching dollar, shining gold #7488105/03/02; 20:22:34

The weakening U.S. currency, rising precious metals reflect investors' worries.


NEW YORK (CNN/Money) - The mighty have stumbled and the meek have inherited the Earth. Something like that happened this week in the $1.5-trillion-a-day currency market, which hammered the U.S. dollar, one of the most-clamored for assets over the years. Gold, that perennial cellar-dweller, rose to a new two-year high. Growing concern about the health of the U.S. economy relative to its overseas counterparts has hurt the dollar, which is down about 6 percent against the yen and euro this year. And two years of sinking stock prices have driven investors into tangible assets considered safe havens, like gold.

"I think what has changed is the market's outlook for the U.S. economy," said Alex Beuzelin, chief market analyst at Ruesch International. "The market is now unsure of the economy's ability to sustain its growth rate beyond the first quarter of the year."

A weaker currency brings pros and cons. It helps companies dependent on exports become more competitive since they can sell goods more cheaply in international markets. In addition, a weak dollar boosts overseas profits when those same companies convert sales abroad into U.S. currency. That's also the case for investors buying international stocks. A soft dollar boosts those returns. And strengthening overseas currencies could draw bargain-seeking tourists to U.S. shores.

But for an import-hungry country like the United States, the weak dollar makes imported goods more expensive, raising inflation. That, in turn, could suffocate the fragile economic recovery that the Federal Reserve, the nation's central bank, is trying to engineer.

Treasury Secretary Paul O'Neill inadvertently waded into the currency market this week. In remarks to Congress Wednesday, he said the Treasury Department's official support for a strong dollar has not changed. But he also signaled doubts about the effectiveness of government moves to support the currency, suggesting the United States won't try to stop the dollar's recent slide by stepping into international currency markets to buy dollars. Such moves are always risky because government purchases can be ineffective given the huge amounts of currencies traded daily by banks, insurers, companies and other institutions.

As for gold, it touched $312 an ounce this week, the highest since February, 2000. The gains come as investors seek alternatives to stocks. The Standard & Poor's index of 500 largest companies is down about 6 percent this year following two annual losses as Corporate America suffers its worst profit slump in more than 30 years.

Black Blade: The need to hold Gold is ever more important as the USD falls precipitously. It will deteriorate further as the next energy crisis looms on the horizon. The state of California is toying with yet another fuel standard that will raise the costs of energy. Rising energy costs drop straight to the bottom line. Look for a new energy crisis late this year to late spring of next year and energy supply is consumed with little replenishment of reserves. As always, get out of debt, get enough cash on hand for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities program. Best be prepared that to leech off of others should disaster (economic or natural) hit home. We insure for all manner of calamity and yet there are those foolish people who argue that we should be exposed to other dangers. Prepare for the worst and hope for the best. There is no downside to being prepared.

sectorWho are the Fed?#7488205/03/02; 20:24:45

Judge them by their acts.

In July, 1994 Warren Christopher [Executive Branch SECSTATE] gave Alan Greenspan a letter that authorized him to take two board seats on the Bank of International Settlements [A private corporation]. No other person in US government is allowed to hold such a board seat, let alone make interest rate policy that benefits the private BIS...a flat conflict of interest. The BIS controls vast amounts of gold. The Executive Branch cannot grant to itself powers not granted to it by the Constitution.

A scheme to manipulate gold ensued. It was designed to inflate multiple bubbles and ultimately dollarize the world. In June, 1996 an orgy of US reserves gold selling broke the back of the world gold market, thus smashing the economies of Sub-Saharan Africa. Numerous gold carry trades developed profiting many Wall Street banks who are the United States Federal Reserve system.

All the Fed board members knew this...they all approved it by their continued service. They knew the effect on third world nations, they knew there would be collateral damage to real, human victims. Clinton's "I feel your pain" speech from the gangway of his Boeing 747 ranks as supreme hypocrisy...HE drove home the blade of economic ruin in Johannesburg.

The United States Federal Reserve system took, under the leadership of Alan Greenspan, a course of action they knew to be immoral. They decided that the US could not grow in a free market system...that the US could no longer compete on the world economic stage without a rigged system. They did not ask congress, industry or anyone else.

The academic basis for this ideology of corruption was written by Lawrence Summers in 1988 and published in the Journal of Political Economy [Gibson's Paradox and the Gold Standard]. Robert Rubin front ran the needed interference to fully implement GoldGate.

The massive interest rate derivative book held by JPM was given birth within days of the June 1996 COMEX gold selling orgy...from near zero to a peak of $20 Trillion dollars. Now drastically cut to $16 Trillion presumably in fear of the coming gold rise "disaster".

Incredibly, the entire edifice of the mid and late 90s US economic boom was constructed on the premise of a manipulated gold price. All of it. The tech bubble, the real estate and especially credit bubbles. Many analysts have stopped short of the truth preferring to be impressed by the sheer size of the various financial "structures".

The COMEX gold market rigging had almost nothing to do with trading commodities and its piddling profits. It was "THE ECONOMY STUPID" on steroids.

Now, after the bubbles have started bursting we see deficits because tax receipts were bloated by the false bubbles. We see the beginnings of a true disaster...a failed scheme...a mutated monster gone wide beyond all control.

Alan Greenspan is by inspection an analytical. Their worst fears are to be criticized and they will do anything to avoid loss of face. Destroying the world's number 1 economy is loss of face so we can be absolutely positive he will have to be removed from office and will NEVER admit failure. Lawrence Lindsay is close to the President but he too has economic blood on his hands since he was a FOMC member at the critical junctures of GoldGate. We may not get distress help from him.

So the economic train wreck approaches. The Fed is low on gold to sell and is obviously managing a retrenchment tactic….first to $310 [As we have just seen]...then to $325, then $350 and on up.

That's their game. The problem is that the spec world knows it and is marshalling all its resources to smash the FED and its cabal. When all their physical has been used up their will be no ceiling to the dollar price of gold.

When judging what the government may or may not do...keep history in mind.

Black BladeA Crumbling Earnings Foundation#7488305/03/02; 20:37:13


Investors are slowly beginning to realize that the outlook for corporate earnings cannot come close to supporting excessive market valuations. Although March factory orders rose 0.4%, the key nondefence capital goods ex-aircraft number dropped 3.6%, indicating no rebound in corporate capital spending. Initial unemployment claims fell 10,000 to 418,000, although the prior week's claims were revised upward by 7,000. Since the recent distortions created by the extension of benefits have now worked their way through the system, the plus 400,000 figure remains quite high. Anything over 400,00 usually indicates a declining economy. In addition continuing claims continued to rise while the April Challenger report showed a renewed rise in layoff announcements after a few months of decline.

Black Blade: As one who is on the "Bone Pile" – "I fear no evil" – As I have prepared for the worst and am quite comfy. I have a good supply of nonperishable food and will be doing a lot of fishing in some high mountain lakes and streams before long. While the exposed leeches suffer under these conditions, I look at it as a vacation. I have my PM holdings regardless of what happens to the economy, I am completely out of debt, I have cash on hand, etc. I see that I now have a lot of company coming down the road as unemployment rises, and it will get much worse. I would imagine that those who are prepared such as myself are not worried, while those who are unprepared are living in fear are the pink slips are spread about the offices and the manufacturing floors. I know – it's Darwinian – but that's life. The only person you can count on is you. Prepare for the worst and hope for the best.

mikalProtect yourself!#7488405/03/02; 20:38:12

Ya wanna a collectible? I'll git ya one, make that more din one. Consider protectin yer cash with dis: USofA State quarters slabbed er raw, yer chouse. Proof Silver Eagles, certified MS-69, PCGS er NGC, yer chouse a slab. And my famleez favorit: Colorized coinz like ya ain't never seen!
TownCrierVision and position...#7488505/03/02; 20:40:06

Sometimes' times those who see farther find themselves eventually at the helm for their vision, and sometimes those at the helm see farther due to the benefits of position. And, of course, one does not end where the other begins.

With that, if may prove useful to have a look at these recent comments by new Gold Fields CEO Ian Cockerill. (see link above) (Forgive the small graphs. They are as good as I had to work with, but they are better than the text-only format I've had provided here since Wednesday. --Randy)

Today I want to talk about a few of the myths about the gold industry, but in the process I would like to give you my perspective of reality as I see it in the business today.

...During March 2001 there was a turning point in the price of gold. What you see from here on out is a gold price coincidently testing new highs and concomitantly creating higher lows.

We are seeing a new trading channel, with a general upwards trend, developing. In my opinion, this is a systemic response to the increasing risk profile of the world. Over this period we have seen an upsurge in interest in gold from retail investors, especially in Japan and Germany as well as institutional investors world-wide.

...If we are living in an era of renewed interest in gold as a reserve asset and, if new mine supply and reserves are indeed going to decline as rapidly as I am presenting to you, where are we going to get the gold from?

At Gold Fields we track approximately 90% of all gold hedge books around the world on an ongoing basis. Let me give you an insight into some of the conclusions that we have reached:

** With currency movements over the past 6 to 12 months, and at the current gold price and exchange rates, a significant proportion of global hedge books are under water for the next few years;

** At a gold price of US$312 per ounce and at current exchange rates, the non-US gold book goes underwater. This is exacerbated for some producers by currency hedges that are also under water;

** Ironically, at higher gold prices some balance sheets start to deteriorate rapidly, owing to the marked to market values of their hedge books. You might argue that being "margin-free" ameliorates the situation; then again, the Bankers may not.

What this demonstrates is that there is no free lunch. The hedging of previous years is now coming home to roost and companies who have pawned the family gold, may have to face serious challenges and tough questions from shareholders.

But it is not only the hedged producers who are facing the music. At levels above US$312 gold price, the entire hedging food chain is at risk, including the bullion banks.

I think it is fair to say that, in this scenario one should not expect any Bullion Bank or Central Bank to extend to a producer with a hedge-impaired balance sheet, the luxury of even more hedges. One knows that the hedging game is over when the Bullion Banks start to get out of the business, as we have seen recently.

.....If everything that I have said today turns out to be reality rather than myth, then the Gold Industry has a very interesting time ahead of it.

...Ladies and Gentlemen, I believe that the gold market is about to experience a renaissance. As an industry we should join together to promote to investors, consumers and central banks alike, a compelling case for gold.

Very good stuff! Be sure to read it all.


Cavan ManHey PH....#7488605/03/02; 21:20:49

Great point! However, I personally think confiscation is likely; at some point anyway. What's different today vs the post London Gold Pool gang is the gold market is really screwed up badly with derivatives. Further, let's not forget about the IRD's. What a mess. Caution my friend.

Your old nemesis....CM

Black BladeRuling Could Delay Wyo. Gas Exploration #7488705/03/02; 21:37:09


Oil and gas interests are reviewing an Interior Department administrative ruling that could potentially delay President Bush's plan to expand coal-bed methane gas exploration on 4 million acres of Wyoming's Powder River Basin before they decide on what steps, if any, they can take. Environmentalists say they believe Friday's ruling sets a precedent that could be applied if they decide to sue to invalidate the current gas leases. "That could throw this whole project off by years if all the leases have to be redone," said Tom Darin, attorney with the Wyoming Outdoor Council.

Black Blade: One more step toward the next energy crisis.

Sierra MadreMiner49er: your post this morning No. 74821#7488805/03/02; 21:52:44

About Mahathir: the man is ahead of all other Presidents and Premiers in the world, because he is at least TALKING about gold and silver. Trouble is, the world has been adrift for so long, the old system has been forgotten and no one living remembers exactly how it was set up. So he and his advisers are quite likely to make serious mistakes. Of course, the news reports are tantalizingly vague, and that doesn't help our speculations.

The image of that H G Wells film, I believe it was "The Shape of Things to Come" - ominous title!- comes to mind, where an insignificant despot clothed in fur wants to coerce a young "New Age" pilot who falls into his hands, into getting his old, broken down biplane into working condition. A most interesting film, quite apropos for the present times, by the way. From the 30's. Technology is part of a system, when the system evaporates, so does the technology. Thus, there is no return possible. We're "Outward Bound".

Once a system as complex as the international monetary system of yore has been destroyed, it appears to me that any reconstruction is out of the question. These things are the product of true "Evolution" and take centuries to build up. In politics, there is no such thing as "Reform" or "Return to Constitutional Government".

Destroying an ultra-complex system is like cutting down a giant Redwood. Once it's down, that's it. You no longer have a huge tree, you just have lumber. And you won't have another giant for centuries.

I think that the dollar will HAVE to persist for much longer than we visualize, because there is nothing else, at present. The Euro? Yes, but...what would a real, savage War in the Middle East do to Europe? No oil...kaput!

It is my feeling that the dollar is going to go down the tubes rather quickly, but, it will still be used. It has to be used. The system will be progressively weaker, with more and more patches and stitches, currency exchange controls(?) and other makeshifts. The downfall will be in relatively slow motion (fast in historical terms).

At the end of the road, nations will have to take stock of what to do, on their own. The master, USA, can no longer hold the fort. (The Legions are called back to Rome). Utter chaos will prevail. International trade will stagnate, and
finally, there will be no more beating about the bush. You have gold, you buy our goods. No gold, no goods. Very simple. Or "vely simple".

At that point, the hundred and some odd fiat currencies of the world will compete in devaluations, and some currencies will devalue far more than others, until a new relative status emerges. The more productive nations devalue less, the less productive devalue more.

The way things will turn out will seem obviously necessary when we get to see them happen. Think "simple"! Think "stupid"!

Sorry I can't address the much deeper thinking contained in your interesting post; I must confess it is over my head most of the time. (I'm slow on the uptake).

Some anecdotal comments:

Visiting Houston these days. Commerce SEEMS very slow - is it just me? Tax base on my Texas home went up from $76,000 to $141,000.'s not going to kill me, but what about the neighbors? Losses on the S.M. or no gains, and taxes go way up? "In a word, GRIM". I've heard that somewhere before...

And lastly: I read where Charlemagne (crowned Emperor of the Holy Roman Empire at Christmas, A.D.800) carried out the most important monetary reform in the history of Europe. Let's see, that was 1,200 years ago, and we haven't seen his like again, yet. Things are not going to be fixed up any time soon.

Maybe we should begin to think seriously about: IN GOD WE TRUST.

Thanks to all for patience in reading.


Black BladeWorld energy crunch worsening#7488905/03/02; 21:59:56,1113,2-13-46_1176658,00.html


Detroit - As the world's appetite for energy grows, the challenge for all nations will be ensuring that supplies of oil and gas, and the infrastructure needed to transport these fuels, remain stable and secure, US Energy Secretary Spencer Abraham said.

Black Blade: It's already a done deal. Expect to see the energy crunch get worse with tightening supply.

Cavan ManSierra Madre#7489005/03/02; 22:20:19

Russia sell oil in Europe. Though the dollar settles the trade, a small amount of Euro in tandem completes the bargain.

PS: Charlemagne was overrated. In that age, Irish monaastics played a much more vital role in the evolution of the west. Cheers.....CM

Golden BearA must read for those who value liberty and justice!#7489105/03/02; 22:42:46

Congressman Ron Paul's TV Gaffe
By Congressman Ron Paul - House of Representatives

The other day, I made a huge "gaffe" on national TV: I told the truth about the crimes of the U.S. government. As you can imagine, the ceiling fell in, and a couple of walls too. Congressman are supposed to support the government, I was told. Oh, it's okay to criticize around the edges, but there are certain subjects a member of the House of Representatives is not supposed to bring up. But I touched the real "third-rail" of American politics, and the sparks sure flew.

I was interviewed on C-SPAN's morning "Washington Journal," and I used the opportunity, as I do all such media appearances, to point out how many of our liberties have been stolen by the federal government. We must take them back. The Constitution, after all, has a very limited role for Washington, D.C.

If we stuck to the Constitution as written, we would have: no federal meddling in our schools; no Federal Reserve; no U.S. membership in the UN; no gun control; and no foreign aid. We would have no welfare for big corporations, or the "poor"; no American troops in 100 foreign countries; no Nafta, Gatt, or "fast-track"; no arrogant federal judges usurping states rights; no attacks on private property; and no income tax. We could get rid of most of the cabinet departments, most of the agencies, and most of the budget. The government would be small, frugal, and limited.

That system is called liberty. It's what the Founding Fathers gave us. Under liberty, we built the greatest, freest, most prosperous, most decent country on earth. It's no coincidence that the monstrous growth of the federal government has been accompanied by a sickening decline in living standards and moral standards. The feds want us to be hamsters on a treadmill--working hard, all day long, to pay high taxes, but otherwise entirely docile and controlled. The huge, expensive, and out-of-control leviathan that we call the federal government wants to run every single aspect of our lives.

Well, I'm sorry, but that's not America. It's not what the Founders gave us. It's not the country you believe in. It's not the country I believe in. So, on that TV interview, I emphasized not only the attacks on our property, but also the decline of our civil liberties, at the hands of the federal police. There are not supposed to be any federal police, according to the Constitution.

Then I really went over the line. I talked about the Waco massacre. Bill Clinton and Janet Reno claim those 81 church members, including 19 children, burned down their own church and killed themselves, and good riddance. So they put few survivors on trial, and threw them in prison for 40 years.

We're not supposed to remember that the Bureau of Alcohol, Tobacco, and Firearms--talk about an unconstitutional agency--rather than arrest David Koresh on his regular morning jog, called in the TV stations for big publicity bonanza, and sent a swat team in black masks and black uniforms to break down his front door, guns blazing. They also sent in a helicopter gunship, to shoot at the roof of a church full of innocents.

The Branch Davidians resisted, and after a heartless siege of almost two months, and after cutting off food, water, and electricity, and playing horrible rock and roll through huge speakers 24 hours a day, the feds sent in the tanks to crush the walls of the church, and inject poisonous CS gas. Now, CS gas is banned under the Paris Convention on Chemical Warfare. The U.S. could not use it in a war. But it could and did use it against American civilians.

After the tanks did their work on the church, the place burst into flame, and all 81 people--men, women, children, and babies - were incinerated in a screaming horror. Did some feds set the fire? Did the flammable CS gas ignite, since without electricity, the parishioners were using lanterns? Did a tank knock over a lantern, striking one of the bales of hay being used against the thin walls as a "defense" against bullets? Or did the Davidians, as Clinton and Reno claim, kill themselves?

A new documentary- -Waco: The Rules of Engagement- may show, through FLIR infrared photography, FBI snipers killing the Davidians by shooting through the back of the church, where no media cameras were allowed. This film won a prize at the famed Sundance Film Festival. It was made by people who took the government's side, until they investigated.

Whatever the truth, there's no question that an irresponsible federal government has innocent blood on its hands, and not only from Waco. And the refusal of corrupt and perverse liberals to admit it means nothing.

In my r~interview, in answer to a caller's question, I pointed out that Waco, and the federal murders at Ruby Ridge- especially the FBI sniper's shot that blasted apart the head of a young mother holding her baby- caused many Americans to live in fear of federal power. Then I uttered the sentiment that caused the media hysteria: I said that a lot of Americans fear that they too might be attacked by federal swat teams for exercising their constitutional rights, or merely for wanting to be left alone.

Whoa! You've never seen anything like it. For days, in an all-out assault, I was attacked by Democrats, unions, big business, establishment Republicans, and- of course- the media, in Washington and my home state of Texas. Newspapers foamed at the mouth, calling me a "right-wing extremist." (Say, isn't that what George III called Thomas Jefferson?)

I was even blamed for the Oklahoma City bombing! And by the way, I don't believe we've gotten the full truth on that either. All my many opponents were outraged that a Congressman would criticize big government. "If you don't like Washington, resign!" said a typical big-city newspaper editorial.

But the media, as usual, were all wet. (Do they ever get anything right?) The average Congressman may go to Washington to wallow in power, and line his pockets with a big lobbying job for a special interest (so he can keep ripping-off the taxpayers). But that's not why I'm in Congress. It's not why I left my medical practice as a physician. It's not why I put up with all the abuse. It's not why I refuse a plush Congressional pension.

I'm in this fight for a reason. I want to hand on to my children and grandchildren, and to you and your family, a great and free America, an America true to her Constitution, an America worthy of her history. I will not let the crooks and clowns and criminals have their way. I'm in Congress to represent the ideas of liberty, the ideas that you and I share, for the people of my district, for the people of Texas, for the people of America. That's why I'm working to stop federal abuses, and to cut the government: its taxes, its bureaucrats, its paramilitary police, its spending, its meddling overseas, and every single unconstitutional action it takes. And not with a pair of nail scissors, but with a hammer and chisel. Won't you help me do this work?

Not much of the federal leviathan would be left, if I had my way. But you'd be able to keep the money you earn, your privacy would be secure, your dollar would be sound, your local school would be tops, and your kids wouldn't be sent off to some useless or vicious foreign war to fight for the UN. But Jefferson and the other Founders would recognize our government, and our descendants would bless us. By the way, when I say cut taxes, I don't mean fiddle with the code. I mean abolish the income tax and the IRS, and replace them with nothing.

Recently, I asked a famous Republican committee chairman-who's always talking about getting rid of IRS- why he engineered a secret $580 million raise for the tax collectors. "They need it for their computers," this guy told me. So the IRS can't extract enough from us as it is! The National Taxpayers Union says I have the highest pro-taxpayer rating in Congressional history, that I am the top "Taxpayer's Best Friend." You know I won't play the Capitol Hill games with the Capitol Hill gang, denouncing the IRS while giving the Gestapo more of your money. Or figuring out some other federal tax for them to squeeze out of you. I also want to abolish the Federal Reserve, and send Alan Greenspan out to get a job.

The value of our dollar and the level of our interest rates are not supposed to be manipulated by a few members of the power elite meeting secretly in a marble palace. The Federal Reserve is unconstitutional, pure and simple. The only Constitutional money is gold and silver, not notes redeemable in them. Not fed funny money. Without the Federal Reserve, our money could not be inflated at the behest of big government or big banks. Your income and savings would not lose their value. Just as important, we wouldn't have this endless string of booms and busts, recessions and depressions, with each bust getting worse. They aren't natural to the free market; they're caused by the schemers at the Fed. President Andrew Jackson called the 19th-century Fed "The Monster" because it was a vehicle for inflation and all sorts of special-interest corruption. Let me tell you, things haven't changed a bit. I also work to save our schools from D.C. interference. Thanks to the feds, new curriculums not only smear the Founders as "racist, slave-owning elitists," they seek to dumb down our students so they will all be equal. "Look-say" reading and the abolition of phonics has the same purpose, and so does the new "fuzzy" math, in which there are no right and no wrong answers. That must be what they use in the U.S. Treasury! It's certainly what they use in the U.S. Congress.

But ever since the beginning of federal aid to education and accelerating with the establishment of the rotten Department of Education, SAT scores have been dropping. Schools, with few exceptions, are getting worse every year. To save our kids, we must get the sticky fingers of the feds off our local schools, and let parents rule. That's what the Constitution says, and the Bible too.

And then there's my least favorite topic, the UN. World government is obviously unconstitutional. It undermines our country's sovereignty in the worst way possible. That's why I want us out of the UN, and the UN itself taking a hike. After all, the UN is socialist and corrupt (many votes can be bought with a "blonde and a case of scotch," one UN ambassador once said). It costs many billions, and it puts our soldiers in UN uniforms under foreign commanders, and sends them off to unconstitutional, undeclared wars. When Michael New, one of the finest young men I've ever met, objected to wearing UN blue, he was kicked out of the American Army. What an outrage! Not one dime for the UN, and not one American soldier! Not in Haiti, not in Bosnia, not in Somalia, not in Rwanda. I know its radical, but how about devoting American military efforts to defending America, and only America?

Such ideas, said one newspaper reporter, make me a maverick who will never go far because he won't go along to get along. Darn right! What does "go far" mean? Get a big government job? To heck with that. And I won't sell my vote for pork either. When I walked through the U.S. Capitol this morning, I got angry. The building is filled with statues and painting of Jefferson, Madison, and the other Founders. Those great men sacrificed everything to give us a free country, and a Constitution to keep it that way. When I was first elected, I placed my hand on the Bible and swore an oath to uphold the Constitution. That's exactly what I'm fighting for. But such ideas drive the liberals crazy. That's why I badly need your help. I've been targeted nationally for defeat. The Democrats, the AFL-CIO, the teachers union, big business PACs, the trial lawyers, the big bankers, the foreign-aid lobbyists, the big media, and the establishment Republicans want to dance on my political grave. The Fed, the Education Department, and the UN are anxious to join in. They can't stand even one person telling the truth. And they're terrified when that truth gains the people's support.

The TravelerThe Ongoing Currency Wars#7489205/03/02; 22:48:12

Just a few quick thoughts.

First consider the many legal precendents already in place.

Should America be in imminent danger of losing its reserve currency status and the "exhobitant privledge" that trades paper dollars for real goods made abroad (read: What? You want us to pay as we go?), do you not think your Uncle will go to ANY lenghths to defend the US$? Progressively trampling the rights of less than 1/10th of 1% of the electorate will be seen as a small price to pay for the vaunted American way of life? Think of this as a delaying tactic in the defeat to come.

Next, can you logically dismiss the above if you believe in the existance of the Plunge Protection Team or the Gold Cartel that GATA fights resolutely?

To confiscate Yahoo or any other high flying paper in the absensce of a national crisis is ludicrous. First it would effect to many of the electotorate and second - Who wants more paper? But all sellers paid taxes on their YAHOO gains.

Second, BUY all the physical gold your understanding permits. However, unless you are prepared to hold gold for generations, you also need to consider how you will eventually reap your NET rewards.

Time reveals all mysteries.

Best regards,

The Traveler

Mr GreshamGolden Bear -- Thanks!#7489305/03/02; 23:03:23

Damn! I'm gonna make the liberal side of me (what's left of it) write a check to help keep Ron Paul in office.
Black BladeMailbox bomb letter text#7489405/03/02; 23:27:40


WASHINGTON (CNN) -- The following is the wording of a letter found with a pipe bomb in a mailbox in Scott County, Iowa. It is not known if it matches letters connected to other mailbox pipe bombs:

Black Blade: Now there's another nutcase on the loose dropping pipe bombs into mailboxes. We still don't have the guy mailing Anthrax either. Quite a strange letter too.

AristotleDon't miss this one from the Globe and Mail! "Is U.S. dollar losing its currency?"#749095/4/02; 16:40:06

Golden BearExcellent as always from Doug Noland#749105/4/02; 17:06:41


In light of the abrupt change in dollar fortunes, the Treasury's monthly report of "Foreign Purchases and Sales of U.S. Long-Term Securities" takes on considerable relevance. February's report certainly makes for interesting reading. While two months do not a trend make, February data confirms January's marked slowdown of foreign flows after the fourth-quarter's boom. Net monthly inflows into U.S. securities averaged $53.6 billion during the fourth quarter and $42 billion for all of 2001. For the first two months of 2002, net flows have ebbed markedly to $14.6 billion. After being net monthly buyers of $12.7 billion Treasuries during the fourth quarter (avg. $1.5 billion buyers for 2001), foreigners have turned sellers to the tune of $8.5 billion. During 2001, foreign-sourced purchases accounted for a monthly average of $13.8 billion of agency bonds and $19.7 billion of U.S. corporates. So far for 2002, these average monthly inflows have dropped to $5.1 billion and $11.4 billion. Foreigners purchased a net $2.4 billion of stocks each month last year, but have averaged only $638 million so far this year.
During the fourth quarter, the financial centers of the U.K, Japan, and the Cayman Islands combined to average $25.6 billion of monthly long-term U.S. security purchases (48% of total global purchases). During the first two months of 2001, these flows have declined precipitously to average only $3.0 billion (21% of total). After averaging $8.6 billion in monthly net purchases of agency bonds during the fourth quarter, January and February purchases have averaged just $270 million. This is despite the Cayman Islands averaging about $130 billion, or 57%, of total average monthly agency trading volume. Is there a relationship between the abrupt decline in flows from the three major financial centers and escalating corporate Credit problems?
The foreigners don't like the stench of Corporate America...

Golden BearJust waiting for that gust of wind to blow down the American financial house of cards.... #7491105/04/02; 17:38:36

Link on previous post

When discussing derivatives, Alan Greenspan often uses the terminology "the unbundling of risk." Recently (April 22, 2002) he remarked, "New financial products have enabled risk to be dispersed more effectively to those willing, and presumably able, to bear it. Shocks to the overall economic system are accordingly less likely to create cascading credit failure." We take the exact opposite view: Derivatives and "financial engineering" generally isolate, extract, and specifically"Bundle" risk (interest rate, Credit, currency, equity, gold, etc.). And this is not some arcane intellectual debate, as it is our view that this "Bundling" has now set the stage for precisely the types of "cascading credit failure" and inevitable "shock to the overall economic system" that Greenspan apparently believes are "less likely." Despite assurances otherwise, there is no doubt that "unguarded" Credit excess has created unprecedented risk that is increasingly concentrated with the GSEs, Credit insurers, and within the murky realm of global derivative markets. Furthermore, this "Bundling" reached new extremes last year, as financial intermediaries lent aggressively while issuing liabilities amounting to about $900 billion of new broad money supply. There was also unprecedented growth in the Credit derivatives market. We believe the Credit issue is now becoming critical, as recent developments have witnessed a dramatic escalation of the unfolding telecom and U.S. corporate bond market dislocation. We see indications of a serious developing problem with the "Bundling" of Credit risk – a dislocation in the global Credit derivatives area.
slingshotFlight to Quality#7491205/04/02; 18:33:46

Put a Smile on your Face

Just came home from a cruise in the West Caribbean and made a stop at Conzumel. At this port of call the touristas were buying loose precious and semi precious stones, Gold and silver jewelry to the max. The stores along the waterfront were full. Five cruise ships pulled in at one time. For some there purchases would be duty free and no tax.Yes sir those GREENGO DOLLARS were moving fast. Silver one ounce rounds were going for $25.00 US. So the US Silver Eagle is a real bargain.
The touristas are getting close. All they need to do is switch to bullion AND AWAY WE GO!
So what else could be better? Went to Mel Fishers museum
to see the Riches Of The Atocha. There I was able to hold a 74 oz. bar of Gold form the treasure. Now I'm telling you if that does not make you a Goldbug, you don't have a pulse.
Yepper,everyone wanted to put there grubby little hands on that bar. Just made me smile. Too bad they did not realize that they could have their own gold in hand.

So be positive. Time is on my side. Yes it is. Love them Rolling Stones.


Black BladeBuffett Tells Fans About Investing, Fraud#7491305/04/02; 19:41:59


OMAHA, Neb. (Reuters) - Omaha's Civic Auditorium was packed to the rafters on Saturday to hear Warren Buffett and his business partner Charlie Munger describe their unique approach to long-term investing and slam fraudulent practices hurting U.S. companies. "Many of the crooks look like crooks," said Buffett. "They have a smell about them." "Wall Street loves them as long as they are pushing out securities," he added.

Turning to the troubled area of corporate accounting, Buffett predicted that derivatives -- a major business for failed Enron Corp. -- would trip up other firms in the future. "There's no place with as much potential for phony numbers as derivatives," said Buffett. Munger went further: "To say derivative accounting in America is in the sewer is an insult to sewage."

Black Blade: I guess he won't be investing in JP Morgan Chase, Bank of America, or most any other investment bank anytime soon.

Black Blade'Locust Cycle' May Bug Street for Years#7491405/04/02; 19:44:48


NEW YORK (Reuters) - The stock market may be in the early stages of the "Locust Cycle," a plague that brings investors years of unappealing returns before the good times start to roll again. If this is the market's destiny, then people should abandon their deeply ingrained belief that stocks always bounce back. In other words, the "buy on dip" mentality may not be the smartest strategy.

Indeed, one of the biggest fictions on Wall Street is the market always comes back. It's a mindset formed during the 1990s when stocks were the great wealth spinners. "That's what happens during bull markets -- the market always rebounds, that is, until it ends," says Ray DeVoe, veteran Wall Streeter and publisher of the DeVoe Report. "This is most investors' only experience in the stock market during the 18 years of rising prices."

He believes that investors, itching for a return of the bull market that hung on from 1982 to 2000, may instead be faced with a profit drought that could last for years. It's called the "Locust Cycle," in which the crop-ravaging insect lies dormant for 17 years and then awakens for 17 years of activity. "People do not realize that there can be long periods when the market goes nowhere or acts poorly," DeVoe says.

It happened after the crash of 1929 and again at the conclusion of the "Nifty 50" market in the 1970s. After the 1929 bloodbath, the Dow Jones industrial average went into a head-spinning plunge of 82 percent by the summer of 1932. Then, it took the Dow 25 years to return to its pre-crash high, says DeVoe, who was born the year after the 1929 debacle.

Black Blade: Locust Cycle? A Grasshopper of a different stripe. The markets have had their run, and now that the American consumer has come face to face with reality after years of complacency, environmental brain washing and in general a life in "Fairy Land". They are about to wake up to the realization that goods just don't magically appear at the supermarkets, gasoline from gas pumps, and electricity from the socket in the wall. Now that those costs are rising, they will be less likely to put cash intro the stock markets. The smart ones will be paying off debt and preparing for rough times.

Black BladeDollar Has Biggest Drop Since January on U.S. Jobs Report#7491505/04/02; 19:46:08


New York, May 3 (Bloomberg) -- The dollar had its biggest drop against the euro since January after a report showed the U.S. jobless rate reached a 7 1/2-year high in April, fueling concern an economic rebound may be slower than projected. The Standard & Poor's 500 Index dropped to a six-month low this week on skepticism about the strength of the U.S. expansion, which also reduced demand for dollars needed to buy shares.

Black Blade: Let's see, first the financial media Trolls brush off the rising unemployment rate as a backward looking indicator, and now they are concerned that it is leading to a drop in the US Dollar? I got news for the Trolls; the unemployment picture is going to get much worse. Especially so as the costs of energy rise in the face of declining petroleum production and the loss of consumer confidence as stocks decline to match historical values (not to mention the lack of growing corporate profits).

USAGOLDBlack Blade and ALL. . ..#7491605/04/02; 19:53:23

This is an incredible statement from one of America's top money men and one who has made his money in the securities' business:

Munger went further: "To say derivative accounting in America is in the sewer is an insult to sewage."

Black BladeO'Neill Protests, Markets Scent Shift#7491705/04/02; 19:55:21


U.S. Treasury Secretary Paul O'Neill told Congress on Wednesday he did not want to signal a change in currency policy. But that is exactly what markets saw -- a shift away from the long-standing "strong dollar" policy. With the dollar already under pressure, the shift may be a timely one. It would allow policymakers to gradually weaken the currency to address growing concerns about how to finance both the huge U.S. current account deficit and the newly returned U.S. budget deficit. The United States has run a trade imbalance for years, but signs global demand for U.S. assets, needed to fund the trade gap, is waning has heightened concerns about deficits.

Black Blade: The weaker US Dollar is a given. The USD must be weakened in face of record trade deficits over the last several months with no end in sight. The upside is that the US Dollar denominated POG should strengthen further.

WaveriderArgentina Seeks Loan to Avert Default on World Bank #7491805/04/02; 22:44:47

"Argentina asked foreign governments and lending agencies for a 30-day loan to avoid defaulting on $800 million due to the World Bank mid-month, Economy Minister Roberto Lavagna said.

A loan would keep a Latin American country from joining Afghanistan, Sudan, Liberia, Somalia, and Zimbabwe as countries that have fallen into arrears with the World Bank and IMF. Negotiating 30-day credit will be difficult because Argentina's tax revenue has plunged, the country remains in default with bondholders, and banks are seeking government assistance to overcome insolvency caused by January's devaluation, analysts said."

Waverider: More tears for Argentina as it appears there are no immediate solutions to their economic dilemma.

~Black Blade - you recommended a few books a while ago but didn't give the authors. The titles are "Green Monday" and "Hubbert's Peak". Actually I found "Hubbert's Peak: The Impending World Oil Shortage" by KS Deffeyes - is that the one? Do you have the author for "Green Monday"? TIA!

~Slingshot - Sounds as though you had a great vacation. Your observation of others reactions to the Gold bar is interesting - Gold seems to captivate those who lay eyes on it. I've been thinking that it may be easier to engage people in discussion about Gold by having it readily visible, so I'm having a Maple Leaf coin made into a pendant. As Aristotle said - "do your part to free it from the banking system - tell a friend". Well, I try to talk to friends and colleagues about Gold and it usually goes right over their heads...not even a passing interest regardless of the approach I take. I've never been one for jewellery but maybe a Gold coin will catch attention and open the door to discussion. We'll see... Cheers!

Black BladeRe: Waverider – Books#7491905/05/02; 00:58:09

The following books are listed along with author and a short description by reviewers and myself:

1. "The Prize: The Epic Quest For Oil, Money, and Power" By Daniel Yergin, 1993. The book furthers ones understanding of the United States' place in this history which, in turn, helps us to understand why oil is a vital national interest to the most powerful nation on earth. With this in mind, the book helps one to understand not only the influence people like the Samuel brothers, the Rothschilds, and the Rockefellers had on the development and growth of the industry, but most importantly how and why this industry has such influence on the direction of U.S. foreign policy.

2. "Hubbert's Peak: The Impending Oil Shortage" By Kenneth S. Deffeyes, 2001. This book has been on the top 10 list and is one of the books recently seen carried by George Dubya. Kenneth S. Deffeyes was a protégé of M.King Hubbert at Shell and is currently a professor of Geology at Princeton University. He delivers a sobering message: the 100-year petroleum era is nearly over. Global oil production will peak sometime between 2004 and 2008, and the world's production of crude oil "will fall, never to rise again." If Deffeyes is right--and if nothing is done to reduce the increasing global thirst for oil--energy prices will soar and economies will be plunged into recession as they desperately search for alternatives. It is no wonder then that Oil Men like George "Dubya" Bush and Dick Cheney have read this book.

3. "Geodestinies: The Inevitable Control of Earth Resources Over Nations And Individuals" By Walter Lewellyn Youngquist, 1997. GeoDestinies helps to identify the forces that will determine our future. Some of these include the exponential population explosion, the ever-increasing demand and use of fossil fuels and other non-renewable resources, the degradation of our soils and groundwater, the truths and misinformation concerning alternative energy sources, and the relationships between natural resources and politics, economics, and our culture as a whole.

4. "The Coming Oil Crisis" By Colin J.Campbell, 1997. During 1997, an academic debate of immense significance for the future of civilization began to surface in a remarkably diverse array of media. The debate concerns the question, is there enough crude oil left in the world to get us to 2010 without a historically unprecedented discontinuity. The whole character of society in the 20th Century, and of its history, economics and politics is more a product of oil than of any other factor. The crucial question which Campbell addresses in his book is how much oil remains to be found and for how long global oil resources can continue to support the expected growth in demand. Having access to Petroconsultants' extensive database, he has carried out a detailed and comprehensive analysis of historical production data and of the Earth's ultimate oil potential. His estimate of the ultimate oil reserves is 1800 billion barrels of which 1600 billion barrels have been discovered, and he predicts that there are only a further 200 billion barrels yet to be found. His most crucial pronouncement however, is that once the global mid-point of depletion has been reached, production rate will decline.

5. "Green Monday" (out of print – Financial Thriller) By Michael Thomas, 1981. Financial Thriller – I believe about Gold, Oil and the Middle East – I haven't read it. Though I remember that Randy (our Admin guy) mentioned it once in passing. It sounds interesting enough that I just ordered a used copy tonight from an online book retailer.

6. "The Skeptical Enivornmentalist: Measuring the Real State of the World" By Bjorn Lomborg (Academic and former Greenpeace activist), 2001. Lomborg than correctly pointed out that incentive structure for the career environmental scientist/activist tilt them to communicate bad, or even alarmist, scenarios. Basically, it is money (donations and government grants) and livelihood (career and fame.) Similarly, the media is incented to communicate "news" that attracts a large viewership - the only real news is bad news. He merely points out that if we use scientific methods (rather than faith) and make claims responsibly (rather than based on self-interest), the populace will have a better understanding of the true state of the environment, and resources can be directed to the areas that are truly a source of concern. But of course that might well mean that less governmental money, and less environmental research jobs. Lomborg did not make many friends of the environmental stripe by publishing this book

7. "The ABCs of Gold Investing : Protecting Your Wealth Through Private Gold Ownership" By Michael J. Kosares, John Ritland (Illustrator), Rod Colvin (Editor), 1997. Of course our Host's book is listed as a recommended listing along with the previous literature. Now for the first time under one cover, novice investors will find thorough guidelines for making good decisions about private gold ownership. In The ABCs Of Gold Investing, gold investment expert Michael J. Kosares (with 25 years experience in the field) emphasizes the asset preservation qualities of gold at a time when investor uncertainty about the economy has led many to seek asset diversification. The ABCs Of Gold Investing covers a range of topics, from understanding gold's role in combatting inflation and deflation to how to select a gold firm. Kosares also examines reasons why gold has become an essential in many American portfolio and why that trend is likely to continue. – Midwest Book Review. Heck, if you ask I am sure he will even sign the book for you. (You can even buy thye book here online from the Castle, as well as "In the Footsteps of Giants" - introduced to me by a friend).

8. "The Power of Gold : The History of an Obsession" By Peter L. Bernstein, 2001. Though I don't necessarily agree with all of Peter's conclusions, he does put together an interesting (and gory) picture of the history of the "barbarous relic". Peter Bernstein quotes the immortal words of King Ferdinand of Spain, who once declared: "Get gold, humanely if possible, but at all hazards--get gold." As ensuing chapters reveal, man's obsession with finding, keeping, selling, and evaluating gold has rarely been a humane adventure and has always been a hazardous one. If anything, the book does describe events through history concerning Gold that we know have influenced the course of history for over 6,000 years. Although he doesn't cover it, the earliest evidence of Gold influence in World culture is perhaps as early as 4,000 B.C. as evidenced by unearthed Thracian treasures. Other than the historical view presented I think that he tends to miss the point of Gold ownership in today's world and the necessity of having Gold as part of a diversification strategy. For that I would recomment MK's book.

Aside from "Green Monday", which I haven't read yet, I would recommend the other books as a good start to understanding the approaching financial crises as our critical economically extractable resources become depleted and how to prepare for the ensuing financial meltdown. Actually, I have yet to read the entire "Hubbert's Peak" and "The Skeptical Environmentalist". Anyway, so much good literature and so little time, but that is what life is – a lifetime of learning and accumulated knowledge. Cheers and happy reading!

- Black Blade

Mr GreshamGolden Bear -- House of cards#7492005/05/02; 01:20:33

I was going to select that same Noland passage:

"Greenspan: "New financial products have enabled risk to be dispersed more effectively to those willing, and presumably able, to bear it. Shocks to the overall economic system are accordingly less likely to create cascading credit failure."

Noland:" We take the exact opposite view: Derivatives and "financial engineering" generally isolate, extract, and specifically "Bundle" risk (interest rate, Credit, currency, equity, gold, etc.). And this is not some arcane intellectual debate, as it is our view that this "Bundling" has now set the stage for precisely the types of "cascading credit failure" and inevitable "shock to the overall economic system" that Greenspan apparently believes are "less likely."

G: Reading the two opposing views of derivative risk just now over at Noland's site put me back to a few hours ago when my daughter was reciting to me in full detail the story of The Emperor's New Clothes, which she has just learned to read.

Greenspan and his "wise" advisors are obviously the smartest people in the land and certainly could not be found to be walking through the city buck nekkid now, could they?

I actually had some thoughts yesterday for a "bell curve" of mathematical precision in finance, which I get every time I read the list of "Greeks" in options, and when I hear about delta hedging. The pioneers in financial mathematics (and computer modeling) got an edge over some others in the trade, but it has led to a computerized "arms race" in competitive modeling, till no one has any useful edge now, compared with the systemic risk overall.

These people are so enamored of their precise formulae, they can't get over it, and they can't admit that all their competitors are using the same formulae. The edge now cannot be in getting a slightly finer-tuned formula to beat them by a tiny margin; the edge must be to get the hell out of the game before it implodes. What! -- and give up my paychecks and commission bonuses!

I still imagine that Greenspan's disaster recovery scenario is to triage the strongest of the "wounded" firms with Fed cash, close the worst ones by merging into selected survivors, which will take "haircuts" on their portfolios and hope to continue. The public will be measured for its remaining confidence in The System, and an appropriate image of the financial industry will be supplied to meet that remaining credulity. "Bad" banks etc will be exposed in the media and despatched publicly, and good ones will be lauded for "stepping in to save the public's hard-earned savings". 'Twill be a PR campaign they'll view with awe ages hence!

The Federal Reserve and FDIC created a fiat money system in which all banks could partake as franchises ("McFed"?) staying within certain industry-supplied rules, and competing only in approved ways. That system will morph itself as necessary and possible to conform to a new financial landscape, presenting whatever faces and names it believes will bring in the greatest overall cash depository result.

That Antal Fekete essay recently about the Fed deepening the 30's Depression by liquefying the banking system through T-bonds while starving the manufacturing sector, comes to mind as an example of the sway of the financial sector over all others, at whatever cost in human suffering.

Banking and its machinations have been such a big part of our U.S. history in EACH century; it is really hard for me to hear paeans about this "wonderful country of ours" (I know which parts of it _I_ think are wonderful) without thinking of the blindness of its inhabitants to the financial control mechanisms ruling their lives.

Blind patriotism seems to me almost a pugnacious, pathetic denialism by those who are trying to fight their way out of the paper bag of their own forgiveable ignorance, constructed out of media propaganda, economic mis-education, and mathematical innumeracy. A product attacking its fellow products.

Revolution against such a system will require one part learning mathematics, two parts education in economic fundamentals (such as Austrian), and two parts sheer orneriness at being lied to one's entire lifetime.

Gold StandardJust for a laugh!#7492105/05/02; 03:44:48

Have any of you Lords and Ladies of the Realm of Gold stumbled across the above site?

It is full-on propaganda from the Cabal to you:

The threat of a financial crisis does not yet seem close enough to warrant a run out of the U.S. Dollar, particularly since the present U.S. administration seems to favor a strong dollar.

There has been a lot of talk about some mining companies planning not to hedge as much as they have in the past. We are surprised at how many people take this talk seriously, which we regard as somewhere between foolish and ridiculous. The futures market exists for the benefit of miners to take advantage of high prices when they occur in the futures market. A miner can lock in a good profit in the futures market when prices are right.

If a mining company passes up the opportunity to lock up a good profit, he will then be speculating instead. Sometimes he will be right and other times he will be wrong. The subject of hedging has been discussed for centuries and there are many different attitudes toward it. However, most businessmen agree that if you can lock up a profit rather than speculate, you should do so.

Those miners who decide to speculate rather than hedge at a profit put their companies at risk if the price goes the wrong way. For an ongoing business not to hedge in a good profit, would be considered irresponsible or just plain greedy by some. Solid, long lasting companies are usually not based on speculation.

So far, in spite of reports of hedging cutbacks, we are unable to see the affect of any cutbacks as the industry remains hedged at high levels.

<End Snip

Well worth a look and a laugh, especially when cracking the champagne after Monday's trade.

Cheers and Golden dreams, all!

Black BladeGold Standard#7492205/05/02; 04:00:54

So....that's where S J Kaplan went (snicker). I guess he will be just as successful there as on his old site. How pathetic. Relying solely on COT as an indicator for POG direction. How bizarre. let's see here, didn't SJ Kaplan go "significantly Bearish" just as when the current Gold rally began and then go long the QQQ? Hmmm...

Just because these guys are losing their shirts they decide that they must trash anything that is moving higher - particularly Gold. They are in for a very big surprise (so far they have been creamed).

- Black Blade

BoilermakerBusiness Week Cover Story#7492305/05/02; 05:31:00

MAY 13, 2002


How Corrupt Is Wall Street?

New revelations have investors baying for blood, and the scandal is widening

When Debases Kanjilal, a Queens (N.Y.) pediatrician, picked up his phone in early 2001 to call lawyer Jacob H. Zamansky, he had no idea he would whip up a full-fledged hurricane on Wall Street. Kanjilal claimed he lost $500,000 investing in Infospace Inc. (INSP ), an Internet stock he says his Merrill Lynch & Co. (MER ) broker urged him not to sell when it was trading at $60 a share. By the time he sold, it was down to $11. Zamansky filed a novel arbitration claim against Merrill in March, 2001, in which he argued that its star Net analyst, Henry Blodget, had misled investors by fraudulently promoting the stocks of companies with which the firm had investment banking relationships. That lawsuit led directly to an investigation by New York State Attorney General Eliot Spitzer, who stunned Merrill and its Wall Street brethren three weeks ago when he made public some shocking e-mail exchanges between Merrill analysts and bankers.

That was just the start. Now, Spitzer is investigating Salomon Smith Barney, Morgan Stanley Dean Witter (MWD ), and at least three others. The Securities & Exchange Commission has launched a probe into practices at 10 firms, while the Justice Dept. is pondering an inquiry of its own. And plaintiffs' lawyers are advertising for clients and filing new suits daily.

The widening scandal has plunged Wall Street into crisis. The resulting furor is more thunderous than the one unleashed by Michael R. Milken's junk-bond schemes in the 1980s, the Prudential Securities limited-partnership debacle in the early '90s, or price-fixing on the Nasdaq later in the decade. In part, that's because many more individuals lost money in the recent market collapse than on earlier scandals.

But uproar over the relationships between analysts and their investment banking colleagues has also grown because it comes on the heels of several other scandals that raise big questions about how Wall Street operates. Already, probes are under way into Wall Street's shady initial public offering allocation practices, as well as its crucial role in setting up and selling the partnerships that led to Enron Corp.'s collapse. Worse, execs at many firms may have made a bundle investing in the partnerships, even as those same firms advised clients to hold Enron stock virtually until it went bankrupt. It all makes Wall Street seem rigged for the benefit of insiders as never before.

The damage goes way beyond the tattered reputations of the firms and their beleaguered analysts. The entire economy depends on the financial system to raise and allocate capital. And that financial system, in turn, is built on the integrity of its information. Should investors lose confidence in that information, it could deepen and prolong the bear market, as wary investors hesitate to put money into stocks. And it could easily put a damper on the economy if companies are less willing--or less able--to raise capital on Wall Street. "One of the precious things we have is the integrity of the financial markets. If that changes it could have dramatic repercussions on the dollar, on domestic inflation, on the economy," says Felix G. Rohatyn, former managing director of Lazard Freres & Co.

Wall Street has always struggled with conflicts of interest. Indeed, an investment bank is a business built on them. The same institution serves two masters: the companies for which it sells stock, issues bonds, or executes mergers; and the investors whom it advises. While companies want high prices for their newly issued stocks and low interest rates on their bonds, investors want low prices and high rates. In between, the bank gets fees from both and trades stocks and bonds on its own behalf as well, potentially putting its own interests at odds with those of all its customers.

But in recent years, those inherent conflicts have grown worse, as the sums to be made by overlooking them have grown enormous. That's because since the repeal of Depression-era banking laws, megabanks such as Citigroup (C ) and J.P. Morgan Chase (JPM ) are allowed to do everything from trading stocks to lending money and managing pension funds.

Chinese walls--jargon for the strict separation of the different lines of business conducted under the same roof--were supposed to keep the bankers honest and free from corruption. But a series of scandals since the early 1980s has eaten away at those foundations. The final blow, however, was the tide of money that flooded over Wall Street during the great tech bubble. Between the last quarter of 1998 and the first quarter of 2000, the tech-heavy Nasdaq market index soared from 1,500 to more than 5,000. Many investors made out like bandits. So did the investment banks. During the same period, according to Thomson Financial/First Call, Wall Street earned $10 billion in fees by raising nearly $245 billion for 1,300 companies, many of them profitless tech outfits that later blew up. The bubble burst in the spring of 2000, wiping out more than $4 trillion in investor wealth. "The fact is that a bubble market allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them," wrote famed investor Warren E. Buffett in his annual report to Berkshire Hathaway (BRK.A ) shareholders last year.

Staking their claim in the gold rush, Wall Street firms ramped up in the late '90s, hiring hordes of analysts, many of them inexperienced. New investment bankers were hired as well. A feeding frenzy set in as rivals fought to grab a big share of the market to bring companies public. At the same time, a new cult of equities came to life, as individuals invested in stocks as never before. True, many investors ignored common sense. Still, as analysts applauded stocks, trumpeting their picks on CNBC and other media, investors bought. "Investors took everything at face value, which was understandable. There wasn't a lot of information, and it was of varying quality," says Michael E. Kenneally, co-chairman and chief investment officer at Bank of America Capital Management Inc.

Only now are the ugly details of the conflicts at play being laid bare. In some of the e-mail turned up by Spitzer, analysts disparage stocks as "crap" and "junk" that they were pushing at the time. The e-mails are so incendiary that they threaten to thrust Wall Street into the sort of public-relations nightmare that Philip Morris (MO ), Ford (F ), Firestone, and Arthur Andersen have endured in recent years. All the ingredients are present: publicity-hungry attorneys general, packs of plaintiffs' lawyers, and potential congressional hearings. "The last thing the industry wants is...the drip-drip-drip of new stories every week," says Howard Schiffman, a former SEC Enforcement Div. lawyer now practicing privately in Washington.

More explosive documents may be on the way. Both Spitzer and the SEC are seeking from more than a dozen firms papers and e-mail related to analysts' recommendations and their potential conflicts of interest. While nobody knows what evidence will emerge, other firms will have their own smoking guns. And analyst pay is likely to emerge as a hot-button issue. Zamansky, for instance, claims that he has seen contracts from investment banks promising analysts 3% to 7% of all the investment banking revenues that they help to generate.

That would be clear proof that analysts were being paid to help the firms' banking clients, often at the expense of investors who expected objective advice.

The financial implications of this mess are enormous. Based on the evidence that has already emerged, Merrill is facing potential fraud claims by every retail investor who purchased any stock that Blodget & Co. may have insincerely recommended. If analysts covering other industries at the firm harbored similar doubts about the companies they hawked, the number of claimants will expand exponentially. Should other financial firms have similarly embarrassing documents in their files, Wall Street could easily be facing billions in potential liability. In a report released on Apr. 24, as the fiasco was unfolding, Prudential Financial analyst David Trone estimated the issue could cost Merrill alone $2 billion.

Heads could roll, too. If prosecutors conclude that firms are guilty of systemic fraud--rather than harboring a small group of rogues--research directors and other high-ranking execs could be vulnerable. That's why the way analysts were paid is such an explosive issue. In egregious cases, criminal prosecutions are possible. Although regulators have never thrown an analyst in jail for fraudulently recommending a stock, experts say that could happen if public outrage flames high enough. Spitzer, whose tough New York securities statutes give him unusually broad power to file criminal suits, says he won't stop short of structural reform. "I'm continuing to negotiate [with Merrill]," he told BusinessWeek on May 1. "They've been fruitful discussions, but negotiations can break down over a range of things. At this moment, we have significant issues that have not been resolved."

Over the long run, a risk bigger than legal penalties could be new restrictions that Spitzer or others place on the way investment banks do business. On May 8, the SEC is scheduled to approve new rules forcing analysts to limit and disclose contacts with investment banker colleagues. But there's good reason to question whether these steps will be enough to satisfy the industry's critics--some of whom seek a separation between investment banking and analysis. At the moment, such radical change is a long shot. But if the Democrat-controlled Senate latches on to the analyst issue, it could trigger embarrassing hearings or proposals for more stringent rules. "Other shoes will drop," says one securities-industry lobbyist. "If [Salomon's Jack] Grubman or [Morgan Stanley's] Mary Meeker turns up [in similar evidence], the sky is the limit" for this issue. "It has big legs."

It was never much of a secret that analysts who work at investment banks often work against investors. Sell ratings now make up less than 2% of analysts' recommendations, up from around 1% during the bull market, according to First Call. Analysts are under pressure from the companies they cover, as well as from big institutional clients who may own the stock, to give positive ratings. Michael Mayo, senior bank analyst at Prudential Financial, recently told the Senate Banking Committee that he had been exhorted to stay bullish throughout his career, from both his former employers and the companies he covers. Otherwise, he said, he doesn't get the same access that others do, which gives him a harder time making nuanced stock calls. "It's like playing basketball with one hand tied behind your back," says Mayo. Analysts also need to shine in surveys such as Institutional Investor's annual rankings, in which money managers vote for their favorite stockpickers, so they spend too much time lobbying clients rather than crunching numbers. "Analysts get focused on saying what they think the client wants to hear to win the vote," says Henry J. Herrmann, chief investment officer at Waddell & Reed Inc., a money manager.

The biggest factor now contaminating the system is compensation. To an ever-increasing degree, analysts' pay is tied to how much investment banking business they bring in. According to a Merrill memo released by Spitzer, Blodget detailed how he and his team had been involved in 52 investment banking transactions from December, 1999, to November, 2000, earning $115 million for the firm. Shortly thereafter, Blodget's pay package shot up from $3 million to $12 million. Charles L. Hill, First Call's director of research, says that when he was a retail analyst 20 years ago, if he helped investment bankers with a new client, he would get a small reward at year's end: "But it was the frosting on the cake. Now, it is the cake."

It would be an exaggeration to say analysts alone are to blame for Wall Street's woes. There's a much deeper problem involving everyone from credulous investors to deal-happy investment bankers and execs looking to fatten their wallets. "It's finally dawning on people that this incentive system we've given managers based on the value of stock options has encouraged management to puff up their companies a lot," says Robert J. Shiller, an economics professor at Yale University and author of the 2000 best-seller Irrational Exuberance.

Even so, experts say a lot of the corruption oozing from Wall Street has to do with an erosion in investment banking ethics and practices. It goes clear back to 1975, when fixed trading commissions were ended. Until then, investment banks had been able to make big bucks off pricey trading commissions. Slashed commissions meant the firms were forced to derive more revenues from investment banking business. "There's a real sense of sadness over what has happened in investment banking. It's not about what's right for a client, it's all about jamming a deal down a client's throat," says an ex-analyst who recently joined a hedge fund.

Consider Enron, which has paid $323 million to Wall Street in underwriting fees since 1986, according to Thomson. Goldman, Sachs & Co. (GS ) pocketed $69 million of that, while Salomon made off with $61 million, and Credit Suisse First Boston took $64 million. Indeed, two of CSFB's investment bankers, after helping to design Enron's off-the-books partnerships, sat on one of the partnerships' boards. According to a complaint filed in Houston Federal Court on Apr. 8, investment bankers generated megaprofits from secretly investing in Enron's hidden partnerships. Meanwhile, many analysts continued recommending the stock to the bitter end: 11 out of 16 analysts who follow Enron had buys or strong buys less than a month before the company's bankruptcy filing.

Enron may be an extreme example. Still, in the past, tradition and ethics played a large role in keeping investment bankers loyal to their corporate clients. Indeed, Wall Street itself used to have much more of an interest in guarding its reputation. Says Jay Ritter, a finance professor at the University of Florida: "These days, bankers are far more focused on short-term profits than on their long-term reputations."

That's likely to get worse as investment banking business continues to dry up. The amount being raised in initial public offerings is way off its 2000 highs. Now there are far fewer mergers and follow-on offerings taking place. Because of this, it's unlikely that Wall Street, after all its hiring during the tech bubble, can sustain its profitability. Goldman Sachs estimates that five of the top investment banks on Wall Street will have to get by on $2 billion less than the $16 billion in net revenues they racked up in 1999. If investment banks roll back to 1999 staffing levels, Putnam Lovell Securities estimates that banks will have to shrink their payrolls by 5%--putting over 13,000 out of work.

But no matter how much Wall Street shrinks, its credibility must grow again. Firms have already taken some steps, such as eliminating direct reporting by analysts to investment bankers. But the Street and the SEC still must hammer out a solid, enforceable code of conduct. And if strong reforms in how analysts are compensated aren't pursued, focusing on increased disclosure will do little to end the abuses. Beyond that, regulators may need to go after the firms' top brass--the folks who set the procedural as well as ethical tone. And the Street should take great pains to monitor itself in an effort to restore investors' confidence. "If Wall Street knows what is good for it and what is good for this country, it will very definitely clean up its act," says Rohatyn. Adds George H. Boyd III, head of equities at New York's Weiss, Peck & Greer: "This is an industry of trust; it's one of its key assets. If [Wall Street] loses it, it is going to have to invest in getting [that trust] back and putting in the controls to rebuild it. Without that trust, there's nothing."

Merrill Lynch apparently knows this. At its annual shareholder meeting on Apr. 26, Chairman and CEO David H. Komansky took an unprecedented stand on the analyst debacle, saying: "We have failed to live up to the high standards that are our tradition, and I want to take this opportunity to publicly apologize to our clients, our shareholders, and our employees." Other apologies may follow, as firms desperately try to assuage potentially litigious investors and unyielding regulators. But for Wall Street, just saying sorry at this stage may prove to be too little, too late.

By Marcia Vickers and Mike France, with Emily Thornton, David Henry, and Heather Timmons in New York and Mike McNamee in Washington

Boilermaker comment: Corruption borne of greed will do more to damage the US than any foreign enemy or terrorist campaign could have ever hoped to accomplish. Government regulators and institutions, ie., SEC, Treasury Dept. and the Federal Reserve, have aided and abetted the process.

At least the "Mainstream Media" is finally taking the blinders off. That's a first step in correcting a problem that will cause many years of pain.

Golden BearMr Gresham (msg#: 74920)#7492405/05/02; 06:05:06

your excellent conclusion to a very probable playout of the future:

"Revolution against such a system will require one part learning mathematics, two parts education in economic fundamentals (such as Austrian), and two parts sheer orneriness at being lied to one's entire lifetime."

Include here the dissemination of profound words by those who have positions of authority and favour justice and liberty for all - eg Ron Paul and Reg Howe et al.

My only concern is that a large proportion of the population do not want to take that level of responsibility for their own lives and want to be nurtured by Big Brother - oops I mean the government. Look at Argentina - the masses refused too educate themselves after all the turmoil they had suffered in the past, and still were on the receiving end of this current default and devalution of their currency - and want the government to fix it so that it's the way it was before and they can then go on their merry way in fantasy land.

Through all this chaos, I have not heard one story of Argentinians accumulating gold bullion, instead they are substituting one form of confetti with another thinking they will be safe next time. Old habits die hard, just like their owners...

Black BladeGolden Bear - Argentina#7492505/05/02; 06:18:10

The Argentine economy and banking system collapsed so fast that most Argentines were caught flat-footed. There simply was no time to exchange "confetti" for precious metal. Of course there were some who were buying Gold jewelry with fast depreciating pesos in a last ditch effort to get something of value. Also, if you were a bullion dealer and you saw the excessive rampant inflation would you exchange your value-gaining bullion for fast depreciating "confetti" or high-tail it with your bullion? I know what I would do. The time for buying Gold and Silver is past. The Ants survive while the Grasshoppers starve.

The economic disaster is starting to have effects in Brazil, Uruguay, and now Chile from what I hear. I also heard that large numbers of professionals are applying for visas to leave Argentina. Also, Argentine farmers are only selling produce for export. It looks to get more "grim" as this situation progresses.


- Black Blade

Golden BearBlack Blade (msg#: 74925) Argentina#7492605/05/02; 06:23:35

Greetings Sir,

I totally agree, however, did not Argentinians suffer rapid inflation due to a devaluing currency a decade ago? A wake up call that was not heeded.

It was too late when the SHTF, but they had a decade to get smarter....



Black BladeGolden Bear#7492705/05/02; 06:40:52

Indeed, however, even with second chances most people never learn (sigh). It's human nature to only think positive. Unfortunately the "Grasshopper" mentality is prevalent in all societies. When things go bad - they can go bad very fast when people least expect.

In the US we had the energy crisis last year, and yet no one has learned. In California they have shelved plans for extensive transmission grid upgrades and power plant contruction. We are headed into another energy crisis because of false hopes that there is excess supply (which is a mirage due to new storage, higher demand, less drilling, etc.).

When the inevitable happens in the west as the economic recession deepens, we may find ourselves just like the Argentines. The country sold off their official gold. The people were not able to withdraw depreciating pesos and they rioted for food. Some lucky few here at the forum were able to accumulate some Gold Argentine pesos.

As always, get out of debt, get Gold and Silver portfolio insurance, get enough cash on hand for several months expenses, and start a nonperishable food and basic necessities storage program. I had been saying this long before the Argentine mess, and how well off they would have been if they were following such advice. Hopefully we here will not experience such things, however, we did in the 1930's (The Great Depression).


- Black Blade

Max RabbitzA wee bit from Scotland this Sunday Morning #7492805/05/02; 07:13:08

From YOUR MONEY: Weak equity market sees investors making a new gold rush by Ian Williams.

"China's central bank is the most interesting example. China has exchange reserves of $700bn, of which about 2% is in gold. Last year, the Chinese declared their intention to increase this to between 10% and 15% of total reserves but were "persuaded" by the Americans to keep their reserves in dollars and treasury bills in return for American support for China's application to join the World Trade Organisation. Now that China is a member, it can change its reserve mix to whatever it wants."

Max: I figure 10% of $700bn is equal to 7056 tons of gold at $310 per ounce. How long will they wait?

Golden BearBlack Blade (msg#: 74927)#7492905/05/02; 07:19:20

I have been contemplating your regular final words for quite a time, and am now beginning to research the process of food storage, as I see things deteriorating steadily just like yourself...

Thanks again for being persistent with this message as it helps keep it at the forefront of our minds so that we do not lapse into forgetfullness and distraction.

On that note, I bid you goodnight from the land of Oz.

EconoclastMax--I think they'll be waiting a loooong time...#7493005/05/02; 07:59:19

If they want physical gold, it is not to be found in anything remotely approaching thousands of tonnes at these prices. There is already a supply/demand deficit when only a few hundred tonnes per year are being accumulated for investment. They will only be able to get that gold through DRASTICALLY higher prices, war(s), or a radical realignment deal in the CB world (with US gold obviously playing a major part).
The British auctions, which were heralded as being sooo important were only 25 tonnes each, and there was twice as many buyers as could be filled! The Chinese want 7000 tonnes--Good luck!
I imagine they do have a lot of dollars though.....

RockGolden Bear#7493105/05/02; 08:30:44

Taking Black Blades Advise on Food Storage

Starting a food storage program makes practical sense. I remember when hurricane Andrew hit South Florida as I have family that lived through it to tell the story. They were left without food staples and fresh water for well over a week depending on where you were located. I also remember seeing TV footage of those long food lines during the great depressoin of 1929.

Why is it that we don't learn from history? So many of us have never been without in fact we have only experienced the abundance of the good times yet we look around us and see all the uncertainity in the world yet we still don't take heed.

I started my food storage porgram at the onset of Y2K and believe me when I tell you I was called every name in the book when I tried to direct others to buy gold and start a food storage program.

I have never been influenced by the majority because in my brief existence on this great planet I have learned that the majority is usually wrong.

One good place to consider for some ideas concerning an emergency food program is places like Eastern Mountain Sports. They have a large line of dehydraded foods in vacumed packs which have a shelf life of 5 to 10 years. All you need is water and presto, your eating lazayna, or beef stew or a variety of different food choices.

Pick up a small fuel stove that can be hooked up to either propane, white gas or kerosene. Think about this for a minute, we pay large insurance premiums on our vehicles and rarely see any of that money come back to us in tangable form yet when you pay for your food storage program you have the same security that you have when you pay your insurance premiums but at least you have something tangable to account for your money, its the same principle as owning gold in some ways.

And needless to say the peace of mind you have for doing it.
Always remember the 4 G's : God, Grub, Gold, Guns.
Have a great day.


Max RabbitzEconoclast, Your are absolutely right. #7493205/05/02; 09:02:39

The Chinese will have a hard time getting that gold. However, in the meanwhile they may have something even more valuable.

They must be aware of their ability to blackmail the dollar system with threats of massive gold purchases. I wonder what benefits, in addition to gaining World Trade Organization membership, they have been able to extract. Remember the stories of Chinese obtaining U.S. nuclear and missile designs during the Clinton years, and delays and interference by that administration in the investigations. I remember one undercover investigation was leaked to the NY Times prematurely, as FBI director Louis Freeh refused to ask for a delay in publishing. Also, there were stories of classified documents at Los Alamos given to visiting Chinese scientists by the Secretary of Energy Hazel O'leary. Then there were technology export regulations that were removed from State Department overview to that of the Commerce Department, with an apparent Chinese agent given a top spot in that department.

Is Taiwan the next payoff? Or perhaps a transfer of U.S. gold to China under the table at sales prices.

I for one do not wish to stand in the gold line behind the Chinese……in addition to the Japanese. There can't be much time left.

sectorGold and the Mainstream Financial Press...It's Radioactive#7493305/05/02; 09:54:32

Why the WSJ will never write about the Gold Bull.

It is a very simple premise. The Wall Street mainstream financial press is an extension of the Federal Reserve System. The Fed's mouth-piece.

The self appointed journalists of the Wall Street Journal are as biased against gold as the networks are against anti-liberal viewpoints. They can hardly be otherwise when they crave the favors of the moneyed princes of the Fed. The cocktail parties, the chauffeured limousines, the awards could they possibly kiss all that off? To protect and defend journalistic integrity? What does integrity have to do with it?

The only investment class that is clearly moving upward these last few quarters is gold equities...not to mention the metal's move from $285 to $312 [10%] in just a few months.

Has the WSJ written about this new "Growth area"? No. Will they? No. To do so would constitute an insult to the Federal Reserve System and would cost the paper dearly. So there will be no report on gold unless it's negative in the main.

Several top reporters have been given deep details of the gold scandal and have sat on the story like heavy Buddha. Hypocrisy at work.

They failed to expose Enron when anyone remotely curious had the facts of corruption...the offshore connections were after all old hat because of the Hamanaka/Sumitomo copper fraud perpetrated by JPM.

I personally can attest to the pervasive influence of the JPM goons. I spoke directly with a lead attorney in the plaintiff's Sumitomo/JPM case. He was interested in data I created and whether it applied to copper. It didn't but I offered that JPM would be hurt by the gold market implications. "Your gold stuff will hurt JPM?" "Badly", was my answer. The attorney hung up so fast I thought his handset must have been burning him. Even adversarial plaintiffs are afraid of JPM and the Fed.

A corrupt press goes hand-in-hand with a corrupt Fed.

The brokerage scandal gets coverage because it doesn't threaten to unmask the fiat currency charade. Brokerages come and go as long as they push paper…why should the Fed care?

But writing about gold and its recent successful inroads threatens the continued dominance of unsupported paper currency and therefore the entire United States and world operational platform.

If the US currency fails the US fails. The story about gold is therefore radioactive…it must be killed.

Mr GreshamNew Jersey post office renamed for passenger on hijacked plane who uttered words 'Let's roll' #7493405/05/02; 10:02:58

Todd Beamer: "Let's roll"

(To be in the history books with "Don't fire until..." and "Damn the torpedoes..."?)

When it's time to get up out of your seat...

Mr GreshamGolden Bear#7493505/05/02; 10:28:25

With regard to the toppling of "big brothers", I've wanted for awhile to mention one of my most strongly remembered scenes from the movie "Dr. Zhivago".

The czarist officer is trying to rally the fleeing Russian troops (WWI) to go back and fight the Germans. He steps up on a barrel, standing on the lid, and waves his sword while he yells at them. They ignore him. Then the lid tilts or caves in, and he is plunged waist-deep into the barrel of water. He raises himself back up, sputtering, and bemoaning the spoiling of his fine uniform.

A passing veteran seargeant laughs, raises his rifle, and shoots him.

In the end, tyrants look ridiculous. They always overstay their loss of credibility.

Eastern European regimes (Ceaucescu for one) fell with about as much regard, once the crowds in the street saw that they were unified, and the soldiers were sympathetic.

Regarding banking, my guess would be that Robert Rubin at Citicorp has migrated to the designated strong rallying point. JPM is the sacrificial or scape-goat, with the derivs heaped high on its back, to be driven out of town.

When they had the Continental Illinois electronic bank run, the Fed backed anyone's deposits at all amounts, and the gov took over ownership.

In a modern run, circling the wagons, the Fed would let it be known it was bankrolling Citicorp and a few other strong regionals (politically-connected?) and you would be allowed to transfer your deposits there, in fact the Fed would do it for you, minus a "haircut" fee.

The money supply would reduce in one swift crunch -- but it would be the shaky flaky fringe money getting lopped off fast, like a cancer surgery, and leave the "strong" core money secure, at least for a business cycle longer. (If the Fed exists for ANYTHING, it is to create -- AND DEFINE -- the "what is money" question for our society.

The removal of worry over the middleground of financial institutions collapsing would be the smartest thing they could do to "sauve qui peut" -- save what they can for another day's profit.

Had another thought rattling around somewhere, but -- hey, when the coffee cup's on empty, and the baby's been screaming for a diaper change (just kidding) for half an hour, time to go...

(BTW, it's time for a re-linking to Bill Parish's site -- I read the essay here way-y-y back, so I'm not thinking of it's content in terms of this post, but it's probably close to relevant.)

mikalEconomy in Balance on Mideast Conflict#7493605/05/02; 10:42:52


May 05, 2002 11:17 AM By Jon Herskovitz
NEW YORK (Reuters) - It may be hard to look at the bloodshed in the Middle East through the dispassionate eye of economics, with Israeli tanks rolling through Palestinian streets and suicide bombers setting off blasts that kill and maim dozens at Israeli markets.
But shock-waves from the conflict have not only pushed up prices at the gas pump, they have also hit investor confidence, dampening stocks, and added a few pennies to the cost of some products due to higher fuel and transportation charges..............
......Economists reckon that each rise of $1 a barrel in oil prices causes U.S. gross domestic product to shrink by about 0.05 percentage points. It is also like a tax on consumers as it raises prices and cuts into their buying power.
Federal Reserve Chairman Alan Greenspan said in April that energy prices had not yet risen to a point that would sap spending but warned a lasting surge in the cost of oil could have "far-reaching" consequences.
............"This is the kind of situation that is so fluid that there isn't a single story that everybody can bite into," he said. link for more or visit the USAGOLD Live News page

Cavan Man@USAGOLD#7493705/05/02; 11:48:49

Christos Aneste!
WaveriderBlack Blade#7493805/05/02; 11:49:16

WOWWZZERS....Thank You! :)

I certainly have my reading cut out for awhile with these fabulous books. Yes...learning keeps the mind optimally fit as exercise keeps the body fit. Cheers!


USAGOLDCM. . . .#7493905/05/02; 12:25:05

Christos Aneste! My friend. . . .May you and your family have the best of Easters.
GoldnSilver2002Holy CR@p,JPM a scapegoat?#7494005/05/02; 12:26:06

To my understanding JPM has a position in the tens of trillions in the derivatives market,the failure of JPM will not be a pleasant day.The gdp of the usa is 6 trillion ,give or take a trillion for accounting.To simply lose years of a countries wages is bad for everyone.As of now,americans,perhaps the most gun lovin'shoot em up and haller bunch of them all,has been acting very sanely.The american people have probably shown up their middle eastern far.

I would like to see what happens when Bush declares,"it is illegal to own gold in the u.s.a!"If JPM were to collapse,it would be almost pointless to have money(fiat) in the bank,just ask the argentinians.Even if one had gold,would it be prudent to lug 1 to 10 kg bars around?No,i believe something'some form of batering/accounting will arise but the paper experiment(fiat) will be over soon.The house of cards isnt collapsing,it just on fire at several key points.On the one hand they wipe out wealth,on the other, debt also, because everybody in the chain including the government is broke.If no one pays no one, then you can have all the debt you want because hey,"how do you get blood out of a stone?"

What the hell is my point?At this point this site isnt just a place to herald the forthcoming rise of gold,but what to do when that happens?Which banks will stay intact?Will banking around the world collapse?What forms of gold should one hold?And why silver(the average joes money) is a highly valid alternative to gold.Will the stock market survive as it did in 1929 or will all wealth be eliminated in one quick day?Please do tell,ive got a ton o gold n silver,the problem is what now?

BelgianThe monetary feast (Aristotle # 74909)#7494105/05/02; 13:02:50

Allow me some reflextions on your latest post.
The US as "banker of the world" is running a trade deficit
(1 billion $) to the equivalent of * 100 * metric tonnes of Gold PER DAY ! Ten times, daily Gold uptake ! This to have a better idea of what 1 billion dollars a day means in relation to the *Value* of 100 tonnes of Gold.

Dear Sir Aristotle, Gold was set Free and had a premature and aborted run in 1971 (to 1980) ! But suddenly the "central bankers" decided that they still had a chance / possibility to postpone the inevitable day of reckoning. They gathered all their concerting forces (worldwide) to lower the Interest Rates with almost zero as a target ! WHY ? Simply the only way left of declining the "automatic" DEBT GROWTH and give a desinflating economy the (futile) chance to catch up with debt and a degree of repayment (rotation/liquidity). And oh wonder...they succeeded in lowering those abysmal rates and artificial oxygenation of economic activity ! And here we are, at the end and emptyness of the tool-box. The consequential, building (irreversible) trade deficit and now increasing unemployment (6% and rising).

Those central bankers (brightest minds) were/are and will always be, political puppets on that used string. They delayed (aborted) the '71/'80 Gold rush and must FACE this *solution*, again, only 20 years later. It is in this context that your explanation/interpretation of the WA ('99) is *Very* plausible and very close to reality.
The cleariest of signals that the extension-time of intervention has run its cause and is already in over-time.

The coming Free Gold Market will be more frightening than the 1971/1980 attempt ! The illusion of being capable to domnesticate debt, will slowly but surely fade with a global economy not being able to expand on this monetary mismatch. Every possible relance will be a false one and doomed to fail, faster and faster. FREE GOLD WILL IMPOSE ITSELF !

Analog to what will happen this summer : The US/ISRAEL/ME/EUROLAND/RUSSIA, meeting to *IMPOSE* peace in the ME. Note the participation of Russia !

Gold was always ment to be Free and the banking system only denies this temporary. This past 20 years of "denial" will play a capital role in the evolvement of the Gold Revaluation. It will *not* be a halve job, imbedded in all sorts of compromises (crisis management). No Sir, it will be a Plain Vanilla FREE GOLD MARKET and nothing less !
Those who lost sight/touch of Gold will soon join the stampede/rush. Those who never understood it, will learn on the way to Gold's proper place and function within the monetary matters. The Jhonny come latelies will have to pay the big ticket at full price, sorry VALUE !

Nice and peacefull end of the week to you and all other forumers.

AristotleMax Rabbitz (05/05/02 msg#: 74928) and the Chinese#7494205/05/02; 13:39:12

Thanks for sharing the numbers. When people read your comment (you said, "I figure 10% of $700bn is equal to 7056 tons of gold at $310 per ounce. How long will they wait?")
I hope people will also pause to remember my post from last week. The one about the conversation between two friends, one who bought a quantity of Gold, and one who merely wanted to exchange a quantity of notional money for Gold. As we'll recall, the latter of these two distinct objects can be the much easier to do.

With that said, maybe the Chinese are willing to wait until the full $700 billion can be converted into a convenient little lump of Gold the size of a teapot. Just think of the expenses they'll be spared in building their vault! On the other hand, as a nation we were foolish to get our Gold so early while it was inconveniently heavy for the price. We ended up with so very much Gold (for the price paid), that we had to spend a fortune on the design and construction of of massive vaults at Ft. Knox. Sheeeeeeeesh! Looks like the Chinese may have outwitted us. <wink>

But I'm sure it will be as FOA suggested. The U.S. will find its overall financial position and well-being best preserved by parting with a measure of our National Treasure. Ballast is rendered no less important simply because it must at time as these be offered unto the storm. After all, what good is "Money" if it can't be spent at times of dire need? Whether ours or another's, I expect the Chinese will make off with significantly more than a teapot-sized lump of Gold in exchange for their generous holdings of our debt securities.

There was a time when the political leaders of the "Free Peoples" of the earth, in rebuilding a war-shattered financial system, didn't want to let the value of Gold run because it would have provided a windfall boon to their adversarial counterparts in Africa and Soviet Union who were leading miners of the fresh metal.

So we got what we got, and have come to where we now are, one step at a time as economic and sociopolitical developments have allowed. Free markets will prevail in the end, of that I'm sure. The rest is just details for others as they seek to achieve the smoothest, most politically acceptable transition. But of course, nothing ever goes as smoothly as planned, and like two electrically charged ends being brought carefully closer to contact, an arc will suddenly complete the circuit ahead of "schedule" ... a variation of deliverance for Aragorn III's "lightening in the night" scenario.

Gold. Get you some ...there's electricity in the air. --- Aristotle

AristotleBelgian -- "FREE GOLD WILL IMPOSE ITSELF !"#7494305/05/02; 13:50:24

Elegant in its accurate simplicy. I bow to you, good Sir!

Gold. Get you some. --- Aristotle

USAGOLDBelgian. . .Aristotle. . . .A Simple Thought. . . .#7494405/05/02; 14:23:16

As you say, we are in a time of transition in this fiat economy and it seems to me that when we look at the performance of various economies in times of transition, gold more often than becomes the most practical and reliable arbiter between the "old" and "new" economies -- no matter where you happen to live. Another analogy would be to say that it even serves as a bridge between the eras for those with the wisdom to use this transition tool to his or her advantage. In 1933, in the United States and in Europe -- gold served its owners well. In 1971 as well. In 1997 in Asia -- gold again did its job. And in Argentina in 2002 -- what would any Argentinian rather have owned?

Argentina, Russia AND the United States (should it become similarly afflicted) will not cease to exist and function as countries. Nor will their economies disappear -- though their currencies very well could (if they haven't already), if not in name at least in functionality. The system carefully constructed to support that currency could very well -- and probably will -- crumble as well. Cycles -- despite what the New Economy mavens -- would have had us believe are the only consistently present reality on this planet. Heeding that. . .one would be well advised to assume that a transition is inevitable and take the necessary precautions while one can, especially when one sees nothing but warning signs all around.

When one takes the sum of problems and corruptions at loose in the Amerian economy today -- from the sewage of derivatives accounting as Mr. Munger so inelegantly but forcefully put it yesterday to the rolling scandals on Wall Street of which the atatvistic analysts are just the most recent -- one must conclude we are observing symptoms of something deeper and more sinister at work than a few loose cannons. Who among us is willing to risk his or her hard won wealth on a bet that such symptoms DO NOT represent fatal, if not immobilizing, disease? Messrs. Buffet and Munger certainly do not appreciate the "smell" emanating from Wall Street these days. For the individual who does not know the form this transition will take, gold is a convenient parking place until things get sorted out. Traditionally, those who have make the Golden Choice tend to weather the storm and emerge on the other side prepared to take advantage of whatever opportunities might present themselves. Rubles, pesos, dollars and yen may dry up and fly with the wind, but hard metal -- detached from any politics, any system, any quid pro quo -- anchors wealth. Real wealth as you call it. Free gold as you foresee . . .in a Time of Troubles.

Sierra Madre made the interesting point several days ago that great pieces of real estate, antiques and art are available in Argentina for those with the assets to buy. And what is required to buy? Hard money. Something the recipient (seller) can utilize for his or her own purposes.

Aristotle: It's great to have you back.

Belgian: I wish you much success in tending that garden. It has already been an interesting spring.

slingshotRock msg# 74931#7494505/05/02; 14:42:29

Again we approach the Hurricane and Fire Season in Florida.
Again I will see the very limited preparation taken by the general public to ease the effects of these natural disasters. We live on a dynamic planet constantly changing
with tornados, earthquakes,mudslides, blizzards,floods and volcanic eruptions. If these natural disasters are not enough,
the man made ones only compound the need to take precautions. Living near a oil refinery,nuclear power plant,or chemical plant, and the threat of terrorism could be a nightmare. Each event although having simular effects will have its own particular precautions to be taken. Depending on where you live, you may be subject to one or more of these possible problems. For sometime, we here at this forum, have been sounding the alarm for a disaster on the horizon, that will touch everyone on this planet.
It is a prediction with a sound basis and one we have time to prepare. The coming collapse of the worlds financial
markets. In the past, as well as in the future, we will try to warn others. Only to be laughed at and ridiculed because they either can not see or refuse to see our point of veiw.
We Goldbugs,(Chicken Littles), are a rare bunch consisting of doctors, teachers,real estate agents,oil rig workers'surfers,wrench turners and those who deal in Gold.
We are from the USA, China,Australia,Canada, Belgium and other points of the world.
In the furture we will have to make a decision as to whether or not to help those who laughed and ridiculed us in the past. Despite all the tough talk,(here and at other sites)
we in the end will take on the extra burden of helping others. Thats just the way we are. Truly a rare quality in todays world.
In conclusion, we must stay on the trail and try to enlighten others for if we do not, who will?

Thanks to MK, R, and all those at USAGOLD.


USAGOLDSpeaking of gardening. . . .and simple thoughts. . .#7494605/05/02; 15:07:55

How many have seen the movie Being There? I had the opportunity to see it again for the first time in many years on one of the local television channels -- an extraordinary movie based on the book by Jerzy Kozinski. Peter Sellers plays the role of the simple (simpleton) gardener who casually states gardening principles and they are taken as incredible insights by those around him -- to the point that he becomes an confidant to one of America's wealthiest men and and advisor to the President of the United States. The concept works well because gardening is a metaphor for life, and because Sellers of course intends nothing by any of his allusions. He is simply talking about the only thing he knows -- gardening. We come to find out in the movie that the country is indeed run by a conspiracy, and in the end the simpleton -- who could care less about the direction of the country -- walks (Chaplinesque) on water testing the depth with his umbrella which he is using as a walking stick. None of this has anything to do with the subject at hand except as a side bar to Belgian's garden -- long may it grow, my friend. Life is full of double meanings, hidden growth, realized and unrealized potential. Sometimes we yearn for things that are fully within our grasp and we don't even know it.
axU.S. SECURITY DEMANDS MORE U.S. GOLD RESERVES#7494705/05/02; 16:29:46


Citizens of the United States should be concerned foremost with
the absolute gold tonnage held by the U.S. Treasury to back the
U.S. Dollar.

The U.S. Dollar is the world's reserve currency. It is the reference currency by which all other currencies are measured. It makes no
sense for the United States to hold foreign exchange reserves of other
countries since its own currency, the USD, is the primary currency.

What the United States must do, for its own security , is to hold as much
gold in its treasury as possible to back its own U.S. Dollar.

The U.S. Treasury must buy more gold either on the market or off market (private
placement from Swiss/German CFB etc. ) at every opportunity.

U.S. Gold reserves have the highest percentage of gold in their reserve
composition compared to foreign currencies but this is only a relative indicator.
Foreign countries must include substantial percentages of foreign currencies in their
reserve composition, particularly the USD, since the USD is the world's primary

Since the US dollar is considered to be the world's reserve currency, there is no natural
limit to the amount of gold that should be in the US Treasury to back
this world reserve currency.

This last point is the key :


The only rational way to " pump money into the system"
is to greatly expand the money supply and back it with
substantially higher gold reserves. This offsets the
concommitant devaluation of the U.S. Dollar and inflation
that ensues from such monetary expansion.


LeighWaverider#7494805/05/02; 16:44:26

This link to the U.S. Mint screensavers will allow you to download Eagle Program (gold, silver, plat) screensavers for your office computer. Your screensaver will be the talk of the office, and you should get lots of inquiries about gold! It's a lot safer than taking coins in to work!
goldquest@ ax Ref: Gold Reserves#7494905/05/02; 16:50:40

My guess is that the U S has more gold accumulated than most of us care to realize. When the time is right, gold will again play a major role in world finances. The U S will not be caught short in the world game of monetary chess. All the more reason to be in the gold game now, through physical and gold stocks.
Cavan Man@Aristotle#7495005/05/02; 17:17:14

The path is so clear.
Golden Bear@Rock, @Mr Gresham,#7495105/05/02; 17:32:40


Thank you for the words of support and information. Regarding the 4 G's, Australians are banned from owning any handguns and semi automatic rifles. Hunters with permits can own single or double barrel shotguns, but that's about it. It will have to do...

Mr Gresham,

thanks for the laugh - I was 14 when Dr Zhivago came out and my Dad being a history buff took us to see it at the drive in. Damn 3 1/2 hr movie nearly killed my brother and I from sheer boredom (11 and 14 year olds don't have the same sense of history as we older and wiser folk), I do believe it would have quite a different impact on me seeing it now.

As for the government allowing a controlled failure of some institutions, the assumption is that they can control it at all. Like a nuclear reaction, once you get to a certain critical level of cascading fission run amuck, it is impossible to stop. Will this time be the financial Chernobyl that scorches the whole financial landscape leaving those with their golden antiradiation suits left standing? Are we seeing this fission reaction beginning now in gold's upward move, ready to go parabolic? Only time will tell....

Thanks for the reposting of Bill Parish's link. Will read with interest.



WaveriderLeigh#7495205/05/02; 17:44:45

Thanks for the tip. I'll try it as a screen saver at the office and see what the responses are. I wasn't thinking of loose coins, but a Gold coin made into a would be visible and relatively safe. I'm trying to think of some creative ways to engage people in discussion about Gold...stimulate their curiosity as it were so they're motivated to learn more. Thanks again for the tip, always appreciate your thoughts and contributions. Cheers!

Golden Bearax (msg#: 74947)#7495305/05/02; 17:47:01

It is not possible IMHO for the USA to accumulate bullion in sufficient quantities to offset the exploding printing and flooding of fiat into the system. The scarcity of gold and its use in a gold backed monetary system has its main function of limiting this printing of confetti, and is one reason Nixon severed the last remaining link between the two.

As for the USA gold reserves, the assumption is that no other country has a claim to what is in its vaults, and who knows what will happen if the USA defaults on these claims if in fact they do exist...


InterstateFood Storage#7495405/05/02; 17:57:05

Reading this forum everyday is like getting a huge dose of knowledge. I thank each of you.

I noticed that food storage was mentioned a few times today. Good. But, I have one suggestion. Don't rely heavily on dried foods because of the water that is needed to rehydrate them. Buy plenty of juices and other ready to drink liquids. Someone (Rock, I think) mentioned hurricanes. Living in Florida, I have been through several and the water supply either cannot be pumped through the municipal pipes because there is no electricity or the water supply gets polluted. It is almost unbelievable how much water a family uses in one day. The first storm, we had 50 gallons of stored water. Electricity was off for 6 days. We were very frugal with our water and still, we were using our last gallon when the power came on. One gallon per person per NOT enough.

What we are preparing for will probably last longer than 6 days. Food? Yes. Medicines? yes. And lots and lots of water (drinking, baths, brushing teeth, washing dishesand clothes, cooking, etc.) Most of us know this but as was mentioned, constant reminders are good.

For the summer, several battery operated fans. Of course, there are hundreds of survival books and info on the web. Just use the info in them.

Later, Interstate

mikal@Golden Bear#7495505/05/02; 17:57:59

If the USA gold reserves are ever auditted and found to be the 8000+ tons claimed by some- Who owns it? Its been said the Federal Reserve took ownership and custody from the US Treasury Dept. If this is so, wouldn't that make it easier to swap physical under the various scenarios discussed here today? After all, birds of feather flock together, even the scavengers.
slingshotSeige Engine#7495605/05/02; 18:17:33

Gold above $300.00 and climbing

It has been many days and nights that the castle has been under attack. Each day Sir Howe and his men move closer.
The Lord of the Castle has not slept well for stone by stone has entered his courtyard, his main hall, knights barracks and stores. Each day he waits the Goldbugs and their machine become more accurate. He must do something but what? Should he mount an attack with heavy horses? It is a long way across the field to their lines.As he gives thought to his battle plan he is again called to the wall.
The stones are now striking at the base of the tall tower.
Why would they be doing that when they could easily bring down the front gate. It becomes apparent as he watches the debris fall into the moat. First bring down the tower into the moat and make a second crossing. Then bring down the main gate. He would have to split his men to defend the castle. Divide and conquer.

mikal@Waverider#7495705/05/02; 18:22:41

Those are both good ideas. I have seen them both. You may wish to call around your town, to the coin shops. I have purchased used sovereigns, a small panda, and other coins in 14kt bezels that way. Never paid much over melt. Some of them get a little "sweater rub" on the back or suffer from polishing, so they sell as used/circulated coins. Kind of like "wearing your colors". Definitely a worthy and subtle fashion statement or accent. The US Mint has featured gold -bezeled Eagles in their catalog, for a price (soon to be value ;))
Mr GreshamGolden Bear, slingshot#7495805/05/02; 18:27:08

Nice to have a poster from Oz here (have we lost a few?)

Of course they MUST assume they can control the meltdown -- they're the Fed and it's their job, their reason for existence. They might fail, but they have to pick their best shot, whatever the likelihood.

What they need to do is pick the point of inflection, both timewise, and dollar implosion-wise, where the first level of collapse has exhausted itself a bit. What they trade on is ===== CONFIDENCE ===== and the desire to believe. If people during the collapse are afraid their world is ending, and the Fed (with media help) steps in to "restore confidence", that desire can be rounded up to sandbag the levee one more time. There are probably studies of how a collapse has been "sandbagged" in other countries (Russia '98?) and a recovery core preserved for favored players.

Slingshot -- helping people. Of course we will, but the task will be so large, it's like trying to pick up Titanic survivors in a rowboat -- they'll swamp you in minutes.

Better to use what we've LEARNED here, about money and its use in exchange systems. Local barter-type moneys sprung up during the Depression, and experiments in recent years (LETS, Ithaca NY) have touched on alternatives to centrally-printed dollars.

Helping people identify the source of their impoverishment, and how to isolate and cut off the economic leakages out of their communities in time to maintain some living standards, by using the local resources and skills at maximum efficiency, and keeping the benefits close to home...

Golden CalfThe US$, Gold, and conventional thinking#7495905/05/02; 18:30:11

Much of what's been written, said, and perceived
is what can be expected rhetoric, in any market
I've found it helpful to take the longer view
point, which often shows that a short term trend
may be just that, and may often confuse and confound
those that look at, and study it.

The dollar sure looks like it is about to plunge,
Take a look at the index both weekly and monthly
and see if you might not change your mind.

The opposite might be true for gold.

Cavan Man@Aristotle#7496005/05/02; 18:37:01

A retreat, hastily beaten, might take 3-4 years in our ancient, favorite market. Recently, I read a general chastisement of the US current account imbalance by Mr Prodi. The term, "political will" was used. Where have we heard that before?

Gold is political dynamite. Understanding the politics is step one in an education to last a lifetime.

Gauntlet-Runner2("GR2")ramblings#7496105/05/02; 18:41:19

So how many sunken Spanish Galleons do they have to find to replenish the gold that is supposed to be in Fort Knox? If they can walk on the moon, can they walk around under the great depths of the sea. At $1000 or $2000 per ounce gold everybody and his brother will be fitting on tanks and playing with metal detectors. Out west there won't be any unemployment either. Just stand upwind of the dust. So gold has all its own industries associated with it. There are tons and tons of treasure out there but the cost of recovery and the risk of finding nothing are still too great. Mel Fisher will be passing out free donuts soon enough. That's what I think will happen. The price will fly upwards and bring capitalism forces into play and then "supply" will somehow arrive. The lag time though is going to prevent any breaking of this pending rally. It was 20 years ago when this scenario set up like it has. It is still not believed. It's going to knock paper-man off his chair. Then millenium-gold man will take his chair and drive his car and live in his house, and walking quietly to the mailbox sipping cappachino slow. ...................-GR2

"For a nation is no greater than that nation's womens ability to raise good children" -Iroquois Indian proverb

So let the Espaniolistas cross or borders, no one wants to dig potatoes or hang drywall anyway. Yes, open immigration for Tiawan and Korea and whoever else wants to work for a living so we can tax something. We could beat Japanese industry with Chinese industry seeing as they both hate each other so much. America could use about 40 million gold stashing oriental women too, complete with rice cookers. Then the slack out there "runnin witda bruthas" gets replaced. OK I'll stop there. Back to gold: It seems to be doing quick reactions to the dollar's fall. I think it was arbitrage dealing that made the POG rally on Friday. Gold didn't go up the whole US economy fell down by 5 bucks (the devaluation has already started).

RockInterstate --- Food Storage#7496205/05/02; 18:51:29

Your right about needing extra water to use with those dehydrated foods. Water has about a year shelf life and even longer if you add a little clorex. I picked up six 50 gallon blue plastic FDA barrels right on the internet. Assuming one has the place to store them ( basement ) they arn't expensive at all and well worth it if you have the space.

I also picked up about 8 of the 15 gallon FDA barrels as well and I wish i had gone with all 15 gallon barrels in stead of the 50 galloners because the smaller barrels are easier to change the water than the big boys but bottom line is water is the most important resourse you can have when it comes to survival.

I have canned goods also and they have a good two or three year shelf life so that works good also. Juices I found go bad after about a year and you can drink them before they go bad but water is easy to change every year with less cost. And your right about a gallon a day per person "miminal" to use, for drinking 2 quarts, cooking, tea, coffee another quart and a half) and washing yourself down with a wash cloth, brushing teeth ect can go into even more, bottom line under two gallons per adult should be suffice.

Thanks for your imput and your right if you don't have the room for water storage then suppliment with juices and bottled water is the next best thing. But keep some drinking water on hand thats for sure. Thanks for your imput, we all need to know the pluses and minuses as we consider the options and unique circumstances each of us have.

Cheers, looking forwared to a big day tomorrow at the NYSE go gold.



slingshotMr Gresham Msg#74958#7496305/05/02; 19:02:47

Helping others

I do agree with you sir. We can only hope there is enough of us with the necessary skills to go around to accomplish what you stated in your last paragraph.

YGMFood Storage...............Helpful Tip!#7496405/05/02; 19:04:48

Vacuum sealing foods in Mason Jars is the absolute best way and also the least expensive....You buy flour, beans, rice etc etc in bulk w/o the preservatives found in freeze dried stuff....Anything dry can be stored for eternity this way.....Seeds for gardening have an endless mortality rate.....Ammunition stays moisture proof.....Sealing in Bags is OK for shorter periods of time but Jars are cheap and stack well in basement pantry.....Onion seed normally is only viable from one year to the next and beyond that won't germinate well.....Tests have been done with Vacuum sealed onion seed after 10 yrs, and better than 90% sprouted.....Any survival minded folk should have this unit if only to keep your Gold from tarnishing or oxidizing :>))

Hope this info is useful to some......YGM.

PS: Medicines (pills etc) store for years this way. Air is definately a deterrent to longevity of many things we take for granted on store shelves.....Heck if Boy Scouts can "Be Prepared" what's wrong with grown folks with responsibilities of family life doing the same......HUH!

Golden Bearmikal (msg#: 74955)#7496505/05/02; 19:21:33


I agree, and let us not forget that the Fed is a private corporation. Who do they serve and if they have control of the bullion, who knows what kind of deals have been done under the table...


Black BladePetroleum and PMs Lower #7496605/05/02; 19:23:50

The POO is lower on news of a deal being struck between the Israelis and Palestinians over the Church of the Nativity standoff in Bethlehem. Meanwhile tensions are still high after Israeli forces killed a Palestinian mother and her two children. It appears that there may be some deal in the works and so the POO is falling in response. Natural Gas has fallen in sympathy.

Gold is off slightly, though this too may be a muted reaction to the Middle East situation as well as sllight gains in the USD Index. If anyone is interested - the platinum lease rates are still rather high (in the 8% range). There is growing concern that the Russians may be unable to deliver PGMs from declining production at Norilsk. The only reason that PGMs haven't rocketed lately is due to the deepening Global Recession.

Wall Street will still be mired under relentless scandals, growing unemployment and declining corporate earnings. There just isn't any capital expenditures from US businesses to keep this house of cards standing much longer. In a word - "GRIM"

- Black Blade

Golden BearGolden Calf (msg#: 74959)#7496705/05/02; 19:27:36

You are right, the dollar's current fall is only a beginning trend on the shorter time frame. All it takes is the trend to continue in the shorter time frame to become a longer term trend with a substantial price movement.

Time will reveal all...


Gauntlet-Runner2("GR2")Golden Calf#7496805/05/02; 19:34:21

I saw the charts. Looks like a technical bounce is about due a little lower. Still it is coming off a 3 mtn. top and the whole six month pattern is a high handle. Major resistance is at 10400. OK so say it bounces up and heads back up. Who is going to show up for $22 Billion of 5-year bond sales in late June? Have you ever tried refinancing your house with bad credit and no job. That's OK too because they can just raise the debt ceiling above 6 TRILLION doll hairs. With a 1 to 1 conversion ratio of doll hairs to dollars, which side of the trade would you want. Our currency is redeamable in Chinese made goods, plain and simple. Without the China trade the prices of goods would skyrocket. We export inflation and import deflation. US dollars used to be redeamable in hot tech stocks. Now these companies have no earnings and European blue chips will be catching a free ride as the dollar falls.

Off of this one year "leg up" of the dollar, which way will it go next? Cycles happen. The Clintoons had it all rigged so well. Bush isn't that slick of a liar. He doesn't look like JFK nor does he talk like Elvis. The past cycle cannot be repeated. We are in a depression and at best it will end up in stagflation. It could take between 5-10 years for it to recover after all the bad credit is wiped out. You'll see clothing styles change over the time period. M-3 dollars are "suspended" in derivative casinos. If they unwind the derivatives market it brings all that money back out looking for a home. If China ever gets tired of holding our bonds then how can we sell more? Bond sales are keeping the dollar up, leveraged faith. They got China to buy Japan's bonds. So the shell and the nut game goes on. Greenspan already admitted they cannot measure M-3. So the FED policy revolves around data collected domestically. The house has to be surrounded by sandbags to keep this M-3 out like a flood. That is why they invented derivatives to soak up excess M-3. It's larger than life. Our minds cannot grasp the meaning of a $16 Trillion net short position in gold derivatives. They could just close all the banks and issue new funny money. One currency backed by gold for foreign exchange and worthless scrip for those stuck on this big island. That is basically happened after 29. The foreign banks raced after all the gold certificates they could get and then they redeamed them at the treasury. FDR was forced to confiscate gold to redeam the bearer notes. China functions with a currency no one else wants. What makes you think the US won't one day end up the same way. You tell me of the fall of Rome, I'll tell you of the fall of Pompeii, the fall of Sodom was before that, and a giant flood that made the grand canyon came before that.

A weak culture will always be superceded be a stronger one.

Golden BearMr Gresham (msg#: 74958)#7496905/05/02; 19:38:33

Ah yes, the confidence game... what a fantastic game of chess we are all involved in.

Japanese politicians, having pulled out nearly every trick in the bag over the last 10 years to convince its people that all is OK are now seeing that everything in this universe is cyclical...push the pendulum too far to the right, and it will eventually swing back to the left. They are in the process of running out of force to keep that pendulum suspended on one side.

Might not the Fed soon be in a similar position?


Cavan ManPOG#7497005/05/02; 19:39:10

In the medium term, the valuation of one ounce of pure gold has nothing to do with the Palestinians and Arabs; nothing to do with natural disasters; nothing to do with US equities and nothing to do with charts and graphs and stars and soothsayers. The reason to buy and hold gold now is purely monetary. Yes, I know many were saying same twenty years ago and yes, it is different this time.

Don't hope for bad news in the headlines. Buy gold.

IGWASurvival! Now We're Getting Down To It!!#7497105/05/02; 19:51:18

Good to see the site evolving - never mind about gold, water and food is what you'll need.

When the World Council bans gold, they may come looking for your water & food too. To share with those who didn't plan ahead. Sounds fair to me.


igwa "Always looking on the bright side"

slingshotCavanMan Msg#74970#7497205/05/02; 20:11:45


Just Buy Gold!

slingshotIGWA Msg# 74971#7497305/05/02; 20:24:23

Think Again

Watch out for those anti-hoarding laws IGWA. They'll getcha.

Black BladeHow Corrupt Is Wall Street? #7497405/05/02; 21:26:17

New revelations have investors baying for blood, and the scandal is widening


When Debases Kanjilal, a Queens (N.Y.) pediatrician, picked up his phone in early 2001 to call lawyer Jacob H. Zamansky, he had no idea he would whip up a full-fledged hurricane on Wall Street. Kanjilal claimed he lost $500,000 investing in Infospace Inc. (INSP), an Internet stock he says his Merrill Lynch & Co. (MER) broker urged him not to sell when it was trading at $60 a share. By the time he sold, it was down to $11. Zamansky filed a novel arbitration claim against Merrill in March, 2001, in which he argued that its star Net analyst, Henry Blodget, had misled investors by fraudulently promoting the stocks of companies with which the firm had investment banking relationships. That lawsuit led directly to an investigation by New York State Attorney General Eliot Spitzer, who stunned Merrill and its Wall Street brethren three weeks ago when he made public some shocking e-mail exchanges between Merrill analysts and bankers.

Black Blade: A lot of heads are gonna roll. The likes of Henry Blodgett and Mary Meeker have left a lot of destruction in their wake and now brokerages across the land will be fines, sanctioned, and buried under an avalanche of lawsuits. This is just the beginning, wait until the telecom losses bring out the next wave of angry investors seeking retribution. And remember the day-trader a couple of years ago that killed his family and then went on a rampage killing day-traders and employees? "Interesting Times"

IGWASlingshot#7497505/05/02; 21:27:01

Yep. And it's hard to hide 20,000 gals of water.....
Black BladeNatural-Gas Prices Rebound After Falling Most of Last Year#7497605/05/02; 21:55:04

After falling most of last year, natural-gas prices have rebounded strongly, confounding experts who had expected healthy inventories and lackluster demand to keep prices in check this spring.

The higher prices are starting to translate into higher electricity bills in some parts of the country. They have also set the stage for steeper gas-price increases later this year, should demand from power plants and industrial users pick up.

Spot natural gas was trading at about $3.65 per million British thermal units late Friday. That is still down from about $4.45 per million BTUs a year earlier, but up more than 80% from late January, when prices appeared to have bottomed out from a long, steady decline following an extraordinary price shock in late 2000.

Black Blade: These higher energy costs will eat into consumers wallets and drop to the corporate bottom line. What many analysts don't understand about the rising natural gas price is that drilling activity has fallen off sharply and without the replacement of these dwindling reserves we are looking at the very minimum of a replay of last year's energy crisis and probably an energy crisis of epic proportions. The analysts are quick to point out that NG inventory is very high. That may be true, but without a growing injection that supply will be drawn off just as quick. Not to mention that several new storage facilities have been built in order to feed the growing number of natural gas-fired power plants. What may be developing is a looming energy crisis that could hit hard when least desired (late winter-early spring). Rabid environmentalism has resulted in the loss of Alaskan energy reserves from ANWR and now the focus of environmental extremists is on the Rocky Mountain reserves from Montana to New Mexico (a major source of energy for the Rockies and California). In short, the long touted US economic recovery is very much in doubt.

Black BladeWhy gold regained its glory #7497705/05/02; 23:24:02


Gold Fields president and chief operating officer-designate Ian Cockerill put it this way at the Paydirt Conference in Perth in March: "As they say in the movies, if it walks like a bull, and talks like a bull, then a bull it is."

Anglogold's chief executive Bobby Godsell is positive gold will hold onto its current prices - Friday's $312 per ounce was a 26-month high - and the group is reducing its hedge book dramatically. (Miners hedge or sell forward output to lock in prices as a protection against price falls. They lose out, however, if prices rise above those that have been contracted.)

Gold and the US dollar, the saying goes, enjoy a counter-cyclical relation: dollar strong, gold down; dollar weak, gold up. But it is perhaps simplistic to attribute gold's good fortune only to the plight of the US dollar - which has lost clout over other currencies.

The big question, though, remains: How long can it last? "You may as well ask, 'How long is a piece of string?'," says Cockerill. Vague answer and probably a stupid question - but then he did suggest the dollar's recovery was still a long way off. "There was a time when people spoke of gold as a barbarous relic, that its time was over."

That was just two decades ago, but, as he points out, gold has been viewed as a safe haven, an insurance asset, if not the only insurance asset, for two millennia. "Two thousand years of history is not wiped out within two decades." And despite the fact that demand outstrips new mine supply by more than 1 000 tons a year, the market is comfortable that supply deficit can be serviced from new mine supplies, supplemented by Central Bank sales and producer hedging. Cockerill points out that there has been very little investment in reserve replenishment or exploration since 1997. But a higher gold price, on a steady fixed course, could address that.

Black Blade: The situation is that world Gold supply will continue to decline in the face of declining mine reserves and virtually no new exploration. There will be no supply from Central Banks (never was) as they only trade among themselves for the most part. With a weakening US Dollar, tensions in the ME, declining stock markets, insolvent banking systems from Argentina to Japan to Russia to (insert name here), unwinding of hedge books, etc. The POG is more than likely to move to much higher levels over the next several months.

Sierra MadreSierra Madre reporting from Norwegian Majesty, mid Atlantic...#7497805/05/02; 23:46:30

Had a very interesting conversation with a prominent Peruvian lawyer from Lima this evening, on this cruise ship sailing to Bermuda.

This lawyer was strongly impressed with the argument for a silver currency for Peru - one of the largest producers of silver in the world. It was fascinating to see how the idea took hold.

The I.M.F. is seen, in Peru, as a vindictive institution that imposes policies completely detrimental to Peru. For instance, absolutely no assistance to agriculture is to be allowed; this, while the U.S. passes legislation in favor of $180 billion in agricultural assistance to U.S. farmers over a 10 year period!

There is only ONE way to achieve some sort of national independence with regard to policies which favor the nations of Latin America, and that is through a monetary system that is not parasitical on the U.S. dollar - a money that has its own intrinsic value, and thus does not have to rely on reserves of U.S. dollars. Otherwise, Latin America will be forever dancing to the U.S. dollar tune.

Once ideas begin to germinate, there is no telling what the consequences will be.

The President of Peru may soon be hearing about silver, and as he is struggling to retain popularity, and has no clear program for his country, he just MIGHT take up the flag of monetary reform based on silver.

So much material on usagold this evening! Hard to read it all! Exciting times; this intellectual ferment heralds BIG changes ahead. Is it too far-fetched to compare with the ideas that were being discussed in the Colonies in 1775? Look at what happened in '76.

The Revolutionary Patriots in America had their "Committees of Correspondence" to exchange views. This the internet provides today.

"Don't tread on me"


Gandalf the WhiteSPOT is getting ready to JUMP !!!#749795/6/02; 00:30:31

SpartacusUK's Griffiths sees UK in euro within 2 yrs#749805/6/02; 01:23:22

Nigel Griffiths, the Small Business Minister, predicted that the UK will adopt the euro within two years.

He told The Times newspaper: "I think we will be in (the euro) within two years if things go as they are and we meet our economic tests, and my hunch is we will."

BelgianUSAGOLD # 74944 The Golden Choice#749815/6/02; 03:18:35

Gold, at present, is indeed a Very convenient parking place, from all possible points of vieuw. The massive proliferation of Debt-Weed into the economic garden must be destroyed together with many good crops, before new harvests can be organized. The actual rolling scandals are an addition to the underlying mega-scandal of currency falsification ! This is * SYSTEMIC * ! And it is the full meaning of "systemic" that is not understood by the masses.
They still do mix accidental cyclic waves (infla/defla-blahblah) with systemic linear detoriation (permanent currency depreciation). Two completely different processes.

Gold's parking place will evolve to a Gold headquarter and later on to "the" reference anchor-point.

Compare this process with what happened (accidently) in France on the political arena. Ultra conservative and anti Euroland, Le Pen, lost his retrospective nostalgia, against a modern reality of European unification. Five years ago, everyone talked (cynicaly) about the euro as zeuro (zero) !
See what a difference a (voting) day makes !

The balancing between trust/distrust of a currency and its GoldValue, remains a very, very delicate and difficult task for all monetary managers. The "perceptions" of the general public with regard to their respective currency and its alternative(s) require a lot of emotional intelligence from the ones who have this job of perception-management.
Panic and euphoria are so close to each other. Therefore, GOLD must operate under cover !

Black BladeAsia Awash in Red#749825/6/02; 03:40:31

Asian markets are negative this morning. Today should be an interesting battle as foriegn nations struggle to maintain a weaker currency against the USD. Foriegn manufacturers are working overtime to maintain a weaker currency for manufacturers to export cheaper goods to the US. Even so, the USD in grossly overvalued. It could get interesting today in NY.

- Black Blade

Black BladeIraq to resume oil exports overnight on Tuesday #749835/6/02; 04:17:10


BAGHDAD: Iraq will resume oil exports, suspended for a month in retaliation for Israel's West Bank offensive against the Palestinians, on the night of Tuesday-Wednesday (May 7-8), state television announced here Sunday. The decision to resume crude exports halted on April 8 was taken during the weekly cabinet meeting chaired by President Saddam Hussein following the failure of other Arab oil producers to join the embargo, it said.

But "brotherly Arab oil producers did not respond to the Iraqi initiative by taking similar steps such that everyone would succeed" in achieving the objectives of the boycott, the cabinet said, according to the TV report. Iraq, which exports around two million barrels of oil a day, halted crude exports on April 8 for at least 30 days in protest at Israel's military assault on the West Bank, which the Palestinians say killed hundreds, and US support for the Jewish state.

Black Blade: Oil prices have dropped overnight. Iraq threw a party and no one came. Besides, the US imports about 1 million bbl/day of Iraqi oil.

Black BladeUSD Gains, PMs Fall, Petroleum Falls#749845/6/02; 04:48:06

World currencies are falling against the USD, Gold is lower, and petroleum prices are falling hard on reduced recession demand.

- Black Blade

Black BladeBillionaire investor Warren Buffett predicts a nuclear attack on America #749855/6/02; 05:11:27


OMAHA, Nebraska - Investment guru Warren Buffett (news) offered a bleak prediction for the nation's national security, saying a terrorist attack on American soil is "virtually a certainty." Envy and dislike of the United States have fueled rage against the country even as the ability to build a nuclear device has spread, Buffett said Sunday at the final day of Berkshire Hathaway Inc.'s annual meeting. "We're going to have something in the way of a major nuclear event in this country," said Buffett, the firm's chief operating officer. "It will happen. Whether it will happen in 10 years or 10 minutes, or 50 years ... it's virtually a certainty." Washington and New York would be the top two targets because terrorists want to traumatize the country and kill as many people as possible, Buffett said.

Black Blade: Well, if the target is Washington I don't see much downside. That's one way to clear out the deadwood.

Golden BearBlack Blade (msg#: 74985)#749885/6/02; 05:46:36

"Well, if the target is Washington I don't see much downside. That's one way to clear out the deadwood."

For a potentially horrific topic, your comment is damn funny!


RockWarren Buffet lashes out calling Wall Street Crooks#749895/6/02; 05:46:54

For the second richest man in the world call wall street crooks upset quite a lot of people out there but he expresses our sentiments exactly.

"Snippit" "Many of the crooks look like crooks," said Mr Buffett. "Wall Street loves them as long as they are pushing out securities." Mr Buffett, known affectionately as the Sage of Omaha, said a good way to spot possible frauds was to keep a close eye on those companies that reported results using Ebitda (earnings before interest, tax, depreciation and amortisation).

Mr Munger, 78, also sounded a warning over companies involved in derivatives, saying. "To say derivative accounting in America is in the sewer is an insult to sewage," he fumed.

Mr Buffett also backed a call made last week by Alan Greenspan, the chairman of the US Federal Reserve Board, to clamp down on the "shameful" way that companies inflated their profits by excluding employee share options from the main body of their accounts.

He did not expect regulators to heed Mr Greenspan's call, however, because chief executives were lobbying hard in Washington and "get what they want every year".



Mr GreshamMuddy Puddles#749905/6/02; 06:06:51

Sometimes it's best just not to say anything...
Golden BearMythical (msg#: 74986) Ponderings from former knights#749915/6/02; 06:16:50

Firstly, I don't recall Another or FOA putting a time limit on when their view of the future would transpire... strike 1.

Secondly, the quote..

" It's already stamped, minted, on their coins: $1 Silver and
$50 Gold. Dollars of a New Reality."

is an absolute farce. Since when did the Fed and US Treasury become Gods and decided what the intrinsic worth of bullion would be by stamping some arbitrary value on their minted coins... strike 2.

Thirdly, the quote..

"Sure, the Europeans are good people. I'm not denigrating them. And they too
are no dummies. Sweeping their Euro pride aside, they know the strength of the
US$ is a favorable situation. Else their exports crash. Their jobs crash. Their
entire economies crash. First. The USA may crash as well. But recovery, if it
comes will be US$ based, and the priming engine will be the USA economy."

he got his argument ass backward. The dollar will sink when it is perceived that the US economy is going down the toilet, and they will not reinvest dollars into dollar denominated assets. Their exports will continue, allbeit at a continually slower rate, but they have already realized that US asset classes are way overvalued for the returns (if any) they currently provide and are turning off the taps... strike 3.

Thai Gold,'re out!


Black BladeAnalysts' pay linked to winning banking deals-WSJ#749925/6/02; 06:23:46


NEW YORK, May 6 (Reuters) - Analysts were offered bonuses and a percentage of the profits from investment banking deals in recent years, job contracts from major Wall Street firms show, the Wall Street Journal reported in its online edition on Monday.

Black Blade: Another smoking gun? Hmmm…

Black BladePeregrine Systems Announces Internal Accounting Investigation#749935/6/02; 06:30:53

SAN DIEGO -(Dow Jones)- Peregrine Systems Inc. (PRGN) is conducting an internal investigation into possible accounting problems and announced the resignation of its chairman and chief executive and chief financial officer. In a press release Monday, Peregrine said its board authorized an audit committee investigation into possible inaccuracies brought to its attention by KPMG, the company's independent auditors. KPMG was hired by Peregrine in April to replace Arthur Andersen LLP for the audit of the company's recently completed fiscal year....

Black Blade: Yep, another accounting scandal. Guess who the auditor is. Of course it's Arthur Andersen! Who else could it be? PRGN is off over 50% this morning as they will go tits up just like other AA audited companies.

Black BladePeregrine to investigate accounting, CEO, CFO quit#749945/6/02; 06:34:53


SAN DIEGO, May 6 (Reuters) - Software maker Peregrine Systems Inc. (NasdaqNM:PRGN - news) on Monday said it was investigating potential accounting inaccuracies and announced the resignation of its top two executives. The company said the focus of the probe is $100 million of revenue recorded during fiscal 2001 and 2002. Transactions were recorded initially as revenue from indirect channels and may have been written off in later quarters, it said.

Black Blade: well well, now they are dropping like flies. Legal investigation rumors are now flying!

Black BladeBHP Billiton drops Andersen after 60 years#749955/6/02; 06:48:26


BHP Billiton, the world's biggest resources group, has dumped Andersen as its auditor after more than 60 years of service. The move, which comes less than a month after News Ltd, the Australian arm of Rupert Murdoch's media group, also dropped the embattled firm, is a blow to Ernst & Young which is taking over Andersen's local practice.

Black Blade: Interesting move as today is the first day of the Arthur Andersen trial. Paper Shredder extraordinaire David Duncan is expected to testify. Meanwhile, companies are dropping AA like a hot potato.

Cavan ManMr Gresham#749965/6/02; 07:27:20

InterstateAnderson Accounting Firm#749975/6/02; 07:49:29

Yes, BB, and I also saw that Bank of China, Hong Kong has switched from Anderson to Price Waterhouse.


Interstate@Leigh#749985/6/02; 08:17:46

Leigh, what's the point? I'm sure that Mr. Vronsky likes to make his own decisions. Reminds me of how teachers (Mr. Vronsky) think that a tattle-tale (Leigh) is suggesting that the teacher is unaware or has no concern for what goes on in his classroom (forum).

Even I, who seldom posts (but always reads) could tell what was/is going on. Please don't taint this elite forum.

Well wishes,

YGMWhat's Up With This..........Russian Market 1929 style????#749995/6/02; 08:40:05

Russia Moscow Times ^MTMS 8:54am 3417.18... -1455.70... -29.87%

Are these numbers for real????
LeighInterstate#750005/6/02; 08:42:06

Hi, Interstate. I understand how you feel, since I have seen other people get ratted on and felt incensed about it. This particular issue goes deep (lots of behind the scenes stuff) and has to do with someone who has made a serious personal vendetta of trying to harm this site.

I realize that Dr. Vronsky is capable of making his own decisions. I just thought he could use additional information. He can do what he wants to with it.

Again, I apologize to the many good people who had nothing to do with what happened last night and this morning.

Mr GreshamSierra, IGWA#750015/6/02; 08:48:24

IGWA: "Always looking on the bright side"

Now I'm gonna have Monty Python in my head all day (whistling included)

Sierra: Great post -- hope the cruise is as good. It's an amazing thought to imagine that an random meeting could spark an idea like that -- it's already so logical an arrival point for several Latin American countries -- but, with all the Harvard-trained (apologies to Reg & Vieira) lawyers running things, you never know what fiatic orifice they need to pull their heads out of...

Mr GreshamLeigh#750025/6/02; 09:04:56

If you've been on other, unmoderated, forums, you know what a "troll" is. A troll is a poster whose intention is to disrupt the forum, ridicule other posters, and made the forum fail in its purpose of sharing information and opinions.

The amazing thing about this place is that (I don't think) we've ever had a troll around here. We've had ornery, argumentative opinionators, but I think there's even room for a couple, some have even been among our most helpful posters in elucidating ideas, and they have usually been willing to hear it when someone else says to them: Whoa, enough.

I missed lots of arguments (tend to skip over long posts that look like repetition) in days of yore, and most of them should have ended with "agreeing to disagree." If someone will not take that advice, then they are indeed tending "trollward".

In order to "watch this new gold market" together, it takes open, CIVIL, minds. I think any gold forum should be open to those who wish to abide by that standard. (And limit their consumption to one Negra Modelo -- mea culpa -- while posting ;) ;) ;)

RobotGuyHey There!!#750035/6/02; 09:29:02

Today seems to be a very silent day all around. No gold bouncing, no real market activity, no new mayhems starting in the ME, all the robots are behaving here at work, I think I'll take the day off and go hiking. It's pleasantly warm here in southern Ontario, and the air smells of spring. (I don't live too close to any major metropolis)

Perhaps spike will come tearing out of the brushes and startle us all!



YGMVery Interesting 4 Page Article.....#750045/6/02; 09:43:43,8599,235385-1,00.html

Inside Saddam's world...Very revealing views...
USAGOLD Market CommentaryHedge Funds Riding Golden Stallion. . . .#750055/6/02; 09:57:30

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.

Gold Market Brief (5/6/02) . . . Gold is off slightly to start the week after Friday's solid foray toward the $312 resistance mark. Trading was quiet overnight with tensions easing for the moment in the Middle East, the dollar holding its own, and holidays in both Europe and Japan thinning the ranks. Last week's Commitments of Traders report showed the net fund long rose to 46,067 contracts from 39,665 the prior week. If the past trend remains in place -- longs getting in for the medium to long term -- this nearly 20% increase might very well serve as fuel for the fire in the bull camp as the week progresses. IFR/Pegasus' Timothy Evans told Reuters, "The magnitude of the accumulation points to an eventual sell-off, but we don't want to sell until the funds have run out of ammunition. A price top remains a few weeks away." If the funds -- meaning of course "hedge funds" -- are indeed what's behind the Comex action then that eventual "sell-off" might not be as deep and treacherous as the bears might wish. Hedge funds have a tendency to get on a horse and ride it 'til it drops. Gold will likely be no exception. This could in turn trigger more short covering down the road -- an event that could very well blow the lid off the gold market.

MarkeTalkTreasury reporting requirements for gold#750065/6/02; 11:15:29

Ever since news broke on April 23rd that the Treasury is introducing new dealer reporting requirements for gold I have been pondering the form and content that such regulations might take. See my post #74183 of that same date. I don't think for one moment that any of this is related to anti-terrorism but rather it is about gaining total financial control over our lives. Gold represents ultimate money and thus freedom from a collapsing paper money system. And the insiders in Washington know what is happening--notwithstanding assurances from Paul O'Neill last Friday on CNBC.

Now let us assume the Establishment's premise that gold is being used to finance terrorist activities against the US, then it makes sense for the Establishment to implement rules and regulations to track the purchase of said gold. It makes no sense to have dealers such as Centennial report only when a suspected terrorist sells back to us because the dastardly deed will have already been committed. Thus, I predict that all purchases from dealers will be subject to reporting requirements. The only question is: Will there be exceptions for small purchases. Logic says "yes" but when did logic ever convince government bureaucrats of anything?

The second item worth noting is possible investor reaction to the reporting requirements. In my memorandum entitled "How You Can Survive a Potential Gold Confiscation" (which is available from Centennial by e-mail) I pointed out that 1984 was the year when the IRS introduced dealer-reporting requirements when gold was sold back from the public. This new requirement caused gold investors to dump their Krugerrands and Maple Leafs en masse and to buy U.S. $20 gold pieces. The premiums on these coins took off like a skyrocket. In fact, I believe that the IRS requirements were a major factor behind the rare coin bull market which peaked a short five years later in 1989.

I firmly believe that the spectre of the new dealer- reporting requirements will cause gold investors to flock to the pre-1933 gold coins (both U.S. and European). We have already seen evidence of that trend here at Centennial over the last 12 days. And the premiums on U.S. coinage are rising, in some cases rather dramatically. I also believe that we will be shocked at how dramatic the increases will be. My advice remains the same as ever: Acquire gold at these cheap price levels but be sure to buy the right kind of gold (pre-1933 coins) for maximum privacy and protection. And now you can expect to receive an added bonus: extra profit due to the limited number of pre-1933 coins available. Don't wait until the crowd hears about this.


Cavan Man@Marke Talk#750075/6/02; 11:48:46

The dealer reporting requirement on Maples and Krands was meant to encourage sales of Eagles (new at that time). I can still sell up to 20 ounces of either (KR or M) without a report required. That is my understnading. Please correct me if I am in error

If you are required to tell a third party who your customers are, how does the third party really gain? Information for information's sake is worthless.

Old YellerThe Enron 9#750085/6/02; 12:06:33

Wonder where the Enron story went?

Calm before the storm,this legal tome sounds like quite an explosive document.Good discussion on the ramifactions of repealing the Glass-Steagel.

YGMGATA .....E-Mail#750095/6/02; 12:21:01

Quiet enough for complete post here.....


By Thom Calandra
May 6, 2002

SAN FRANCISCO (CBS.MW) -- Berkshire Hathaway's Buffett is
an insurance executive, so he's entitled to talk about risk from
nuclear bombs.

Why shouldn't he? Palestinian supporter Sultan Abul-Aynayn
not so long ago was quoted as saying, "If one hair on the head
of Yasser Arafat is harmed, the U.S. had better protect its
interests around the world. We are not like Osama bin Laden,
but we have our own style of response."

That's "a chilling warning," says James Dines, editor of
pro-gold The Dines Letter in California. "Should the safety of
all Americans depend on Ariel Sharon's decision whether or
not to kill Arafat?" Sharon was in Washington on Monday,
headed to the White House.

But Warren Buffett, the world's second richest person, also
talks about derivatives. He and his right-hand man rate
derivatives somewhere below sewage. As the head of a
large, multi-billion-dollar enterprise, Buffett and his partner,
Charles Munger, are qualified to talk about the use of
options, futures, lending, leverage and other practices
known commonly as "derivatives."

Buffett figures derivatives will mess up lots of companies.
Berkshire Hathaway's reinsurance unit, General Re, is
registering some losses as it closes the loop on derivatives
contracts. Munger was quoted this weekend, at the annual
Buffett-fest, as saying, "To say derivative accounting in
America is in the sewer is an insult to sewage."

That would make Dell Computer (DELL), in a $1 billion-plus
derivatives boo-boo, an insult to sewage.

That would make scores of companies that take
off-balance-sheet hits to earnings because of their
once-fancy artificial hedges, joint ventures and extreme
leverage -- an insult to sewage.

Those derivative tangles include, in a strange twist of
fate, a few hedged gold companies. The gold sector is
among the North American stock market's biggest gainers
this year.

John C. Doody, editor of the numbers-crunching Gold Stock
Analyst newsletter, figures Barrick Gold in its latest reported
quarter saw the mark-to-market value of its so-called hedge
book drop to a negative $121 million as of March 31 from a
positive $380 million on June 30, 2001.

Barrick, one of the world's largest bullion miners, uses
written "call" option contracts and other derivative devices
and gold lending practices to enhance the price it gets for
its ounces of gold. The so-called hedging in the
"spot-deferred market" works well when gold is flat or down
in price, not so well when gold prices are rising, as they are

Doody at Gold Stock Analyst puts the negative swing of the
company's hedge book at $507 million. "This swing far
offsets the net profits earned of $46 mil in the first quarter of
2002 plus the $66 million in the third quarter of 2001 plus the
$82 million in the fourth quarter of 2001. The net is a loss of
$313 million."

In a conference call last week, Barrick's executives assured
questioning Wall Street analysts, who asked numerous
questions about the company's gold-hedging, they were
monitoring the situation. Yet some observers are not

"The sensitivity of the derivative portfolio now stands at
about $21 an ounce," says Douglas Pollitt at Pollitt & Co.
in Toronto. "Each $1 an ounce upward move in the gold
price sees the mark-to-market (of Barrick's derivative
contracts) drop by about $21 million. At $350 an ounce,
the mark-to-market would be over $1 billion in the red."

Gold prices this year have risen to $312 an ounce from
$270 at the start of January.

Pollitt calculates the notional value of Barrick's
spot-deferred contracts at 18 million ounces. "Add to this
another 5 million in written call options, (which the company
now calls 'variable priced sales contracts'), and, one way
or another, the company is short about 23 million ounces
of gold. This is a fantastic number and begs the question:
Could Barrick cover even if they wanted to?"

CBS MarketWatch placed a call to Barrick's Toronto
headquarters on Monday regarding the company's
exposure to the hedged market and was awaiting a

The writer of a call option is giving the purchaser of that
contract the right to buy something, in this case gold, at
a strike price written in the contract. In exchange, the writer
of the option receives a little money, a premium. The
strategy for selling a call option is usually to enhance the
value of a security or a commodity when the investment is
declining in price, something that had been happening to
gold for years, until January.

Barrick, to its credit, said in its report to investors that
it will reduce exposure to hedging this year. The Toronto
company, world's second largest gold producer after
Newmont Mining, says it earned $46 million for the March
quarter, down from $87 million in the year-ago three-month

Barrick, according to its quarterly report, sold half its gold
in the spot-deferred market for $365 an ounce. The fact that
it sold the other half in the spot market was a first for the
company. Barrick stated it expects half its gold for the
remainder of the year to be sold in the spot market, where
an ounce of gold is attached to no derivatives and gets
exactly what the spot market is dictating for bullion.

Barrick also estimates that for every $25 increase in the
gold price, the company's annual earnings and cash flow
rise by approximately $70 million. "In total, 22 percent of
reserves, or 18 million ounces, are sold forward using
spot-deferred contracts at an average minimum price of
$344 per ounce, deliverable at the company's option
over the next 15 years," the company stated to investors.
"This position is down from 18.2 million ounces in the last
quarter of 2001 at an average price of $365 an ounce."

Of course, if gold prices were to shoot far higher, in rapid
fashion, Barrick, as a writer of call options, could find itself
required to deliver gold to buyers at prices that are below
the spot price of gold. Other distortions of the gold market
are possible in a gold rally.

Pollitt, the Toronto analyst, says theory and reality are like
night and day. "Converting dollars into gold is quite different
than converting gold into dollars," he said Monday morning.
"When the dreaded yellow metal was in the doldrums and
nobody cared, well, Barrick might have had a way out. But
now? Now you've got good company on the bid, now
you've got all those dollars chasing what little gold is left.
And any whiff that Barrick had stepped into the ring looking
for 23 million ounces would set the market ablaze."

Large gold producer Anglogold in South Africa this year
said it would continue to reduce its reliance on the
forward-sale, or hedging, of its gold production.
Non-hedged gold miners, led by Gold Fields of South
Africa, have seen their stocks outpace the gains of hedgers
Barrick and Anglogold by wide margins this year. Gold
Fields, its shares poised to shift to the New York Stock
Exchange on Thursday, is up almost 175 percent this
year vs. a 30 percent stock price gain for Barrick and
60 percent for Anglogold.

The use of derivatives in many different forms has
supporters, lukewarm and otherwise. Federal Reserve
Chairman Alan Greenspan in February testimony said
derivatives have "contributed to the development of a
far more flexible and efficient financial system."

Greenspan was not referring to any particular industry,
like waste management. Those sewers are best left to
derivative accountants, Buffett and Munger would say.


YGMBarrick the next Enron?...........Go Gold>>>>>>#750105/6/02; 12:25:15

Staggering Numbers........

"The sensitivity of the derivative portfolio now stands at
about $21 an ounce," says Douglas Pollitt at Pollitt & Co.
in Toronto. "Each $1 an ounce upward move in the gold
price sees the mark-to-market (of Barrick's derivative
contracts) drop by about $21 million. At $350 an ounce,
the mark-to-market would be over $1 billion in the red."

YGMGold vs Silver#750115/6/02; 12:29:08

Article by Steve Saville......
YGMBarrick soon to be caught in a "Short Squeeze"#750125/6/02; 12:39:54

What Justice It Would BE!


Pollitt, the Toronto analyst, says theory and reality are like
night and day. "Converting dollars into gold is quite different
than converting gold into dollars," he said Monday morning.
"When the dreaded yellow metal was in the doldrums and
nobody cared, well, Barrick might have had a way out. But
now? Now you've got good company on the bid, now
you've got all those dollars chasing what little gold is left.
And any whiff that Barrick had stepped into the ring looking
for 23 million ounces would set the market ablaze."

****ABX buying in a squeeze and contributing to their own demise. Only one thing regretable.....Sheeple shareholders left with the empty bag.....Talk about food for a future "Class Action Lawsuit".....The days just keep getting more Interesting!

USAGOLD / Centennial Precious Metals, Inc.NGS graded MS61 $10 Liberties (assorted 1800's). For bullion and other selections, please call us!#750135/6/02; 13:25:18

MS61 Graded Liberties

A picture may be worth a thousand words,
but gold in hand can be...


Call Centennial for Arrangements or Order Online.

Old Yeller"If there is a bank run,you want to be there first"#750145/6/02; 14:05:59

Interesting look at the nagging doubts piling up on the bond investor's psychology.

"There is a rising group consciousness that is leaving even some bond investors immobilized,because they don't know what information they can trust and what they are going to do next.It has gone beyond simply worry."

Is the next stop the Treasury bond market?

That statement could apply equally well to the Fed,the Treasury and the BLS.

GoldflyWell, here at least is something different.......#750155/6/02; 14:24:38

Gold is spiking up early overseas....
Gandalf the WhiteWELCOME, SPIKE !!!#750165/6/02; 14:24:52


Gandalf the WhiteNice to see you and SPIKE again, Goldfly !!#750175/6/02; 14:30:04

Ari is now back and I am awaiting the return of Aragorn III.
Just had a roll of THUNDER here -- first that it has happened for quite a while !!!
Aragorn's "LIGHTING" should follow soon.

The HoopleGandalf the White#750185/6/02; 14:37:49

Spike's been eating steroid-laced Kibbles n' Bits. He's on his way to Toronto to hike his leg on the ABX schrubs. They probably will die.
RobotGuyInteresting After Hours Activity#750195/6/02; 14:46:58

I've noticed before the little bit of activity with POG, but usually it dips down momentarily and then back to it's current level. Whose market does this area cover? COMEX closes around 2:00pm eastern usually.
Black BladeWall Street Workers Face Worst Market In 40 Years#750205/6/02; 14:48:31


Securities firms have cut 40,000 jobs in the past year, forcing many traders, bankers and analysts into unemployment in the worst Wall Street job market in 25 years. With few job prospects, some are struggling to stir up fresh leads, while others, lucky to have severance pay or low living expenses, are pursuing long-ignored dreams and passions.

``The music has completely stopped in some parts of the industry,'' said Larry Post, founder and chief executive of, a Web site for trading, banking and other security firm positions. ``Wall Street over-hires and over-fires. Right now, we're in over-fire mode.'' Of the 40,000 lost jobs -- the most since Richard Nixon was president, according to the U.S. Department of Labor -- 20,400 were in New York City. Across the nation, unemployment last month climbed to 6 percent, the highest since August 1994.

Black Blade: The Wall Street "Bone Pile" will grow as new investigations and law suits are about to commence with revelations that securities analysts were compensated for bringing in corporate business in a clear conflict of investors interests. Look for $Billions in lawsuit judgements and possible legal action by the SEC. These revelations have had a profound effect on Wall Street today with the DOW down nearly 200 pts., NASDAQ down nearly 35 pts., and the S&P 500 down over 20 points. It should drop much more as the market indices remain grossly over-valued.

Also, Winn-Dixie announces that it will contribute 5,300 to the growing "Bone Pile".

jayzeeDow loses after PM market closes#750215/6/02; 15:05:51

I have noticed that on down days for the Dow, the PPT keeps the loss small until the PM market closes, then it lets it freefall!

I believe that they are trying to prevent investors from going from stocks to precious metals in a panic.

Black BladeLower USD, Higher Gold, and Wall Street#750225/6/02; 15:27:45

The USD should continue to drop overnight as the foreign investor is not interested in USD denominated investments anymore. The recent market action, lack of corporate earnings and the prospect of FED inaction tomorrow may mean that dollars will leave US shores. Also, Moody's has announced that any legal action against Wall Street firms and bankers "will" result in credit rating downgrades. This is not a pretty picture for Wall Street. The result is that investors just might seek out safe havens – like Gold – until all this blows over. IMO it cannot "blow over" until all the excesses are squeezed out of the markets. Hold on to your pants because it's going to get mighty rough!

- Black Blade

TownCrierAnother end-of-day snapshot...very similar to that provided last Monday#750235/6/02; 15:48:41

stocks down
bonds down
dollar down
commodity index down

gold UP

Two Monday's in a row.

Contrary to popular belief, gold is not *necessarily* tightly correlated -- positively or negatively -- with the various markets in stocks, dollars, or commodities as a group. Thanks to the particulars of its market's means for price discovery, gold has tremendous potential for independent movement upward regardless of all other market performance -- assuming the physical trade succeeds in shattering the prevailing paper illusion. A "one-time adjustment" is called for. Without it, gold remains a very safe and stable insurance policy. With it, gold becomes the investment permormer of a lifetime. You can't really lose, whatever the outcome. So, the question goes, are you in?


GraefinRiding the Golden Bull#750245/6/02; 16:25:20

Hey guys...ah, girls too...the hubby found an excellent with the current gold market and recent market history. Here are some snips:
By Derek K. Van Artsdalen

Snippet 1: "The question got me thinking, though, about what we gold and silver bugs might expect when the next true gold bull market begins. How high is high? For that matter, how do we know for certain when the bull's run has actually begun? And, finally, what signs do we look for to clue us in on when the bull has ultimately run its course?"

Snippet 2: "Of Tulips and Technology

To begin with, how do we know when a gold bull market has actually started? In answering that question, it's important to make a crucial point and one which all precious metals investors should understand clearly: bull markets always begin for a reason (or, more likely, for several reasons). In other words, a commodity doesn't increase drastically in price just because it appears to be undervalued. Or because it holds sentimental value (think of the poor fellow who purchased gold at $400 per ounce in the late ‘80s or early ‘90s, only to watch it languish for the next decade or more!). And it certainly doesn't rise just because it appears inexpensive relative to its chart history.

No, my friends, gold will never rise merely because a group of diehard investors wants it to rise. It will rise in value, as all other commodities from T-Bills to tulips, from pork bellies to belly dancers, from bonds to Buicks, for one reason and one reason alone: perceived demand begins to exceed perceived supply. Until that happens, expect the price of gold to remain relatively stable and range-bound.

Why do I use the word "perceived"? Because it is the average investor's perception that motivates him to invest (or dis-invest). When the Dutch tulip mania was unfolding, there was never an actual shortage of tulips -- only a perceived shortage. The average investor, not understanding the situation, concluded that there just weren't enough doggoned tulips in the world, and he began paying outrageous sums of money for them. As with all manias, reality ultimately asserted itself and proved, after all, that tulips were in quite plentiful supply relative to actual demand, and the price came plummeting back to levels which few investors imagined they would ever again witness only weeks prior to the inevitable crash. (The old saying is that trees don't grow to the sky. Evidently, this is equally true for tulips.)

We need look back no farther than 1999 and early 2000 to see a modern example of a classic mania: the now-infamous NASDAQ "bubble." Here was a situation where the perceived need far exceeded the perceived supply. To use just one example, investors (be honest now: were you one of them!?) were crawling over each other to buy up all the telecom and fiber optic companies they could identify, because everyone "knew" that there just wasn't enough fiber in the ground. We all know now, of course, that the actual supply/demand fundamentals were a far different story. But we didn't realize how overbought this and other tech sectors had become (unless we were members of LeMetropoleCafe!) until hundreds of billions of investor dollars had been squandered forever on various telecom, biotech and other technology-related "investments."

So what do the prices of tulips and tech stocks have to do with the present-day gold situation? Just this: as the GATA camp has been shouting from the treetops for years now, the artificial price manipulations of the gold and silver markets have given investors the perception that gold and silver supplies far exceed gold and silver demand – the exact reverse of the situation which develops in a mania. The reality is, both gold and silver usage are increasing annually while supplies are actually declining! "Holy Conspiracy, Batman! The Joker is secretly confiscating their wealth while the citizens of Gotham dance in the streets!" And before you know it, investors around the world, believing they were investing in a legitimate free market, were WHAMMed, BAMMed and KA-POWed out of their hard-earned dollars, rubles, pesos, francs and rupees."

Snippet 3: "Which leads me back to my original point: what are the characteristics of an emerging – and a dying – bull market in gold, and how do we make a buck or two from the historical lessons?

First, if we look back at the most famous gold bull in modern history from August 1979 to September 1980, we find that its foundation was being laid far earlier, beginning about mid-1977. To re-emphasize, bull markets happen for specific reasons, and the reasons back then were legion: economic imbalances, high unemployment, high interest rates, large trade deficits, etc. Other than the high interest rates, do any of these things ring a bell today?"

Okay...enough snips...go click on the link and enjoy your read!
- Gräfin

SiochainLots of Gold Shorts #750255/6/02; 16:34:13

From the Daily Reckoning:
"- But even though things are looking a little rough for
the economy at the moment, a short-term stock market
rally would not be a total surprise. That's because many
of the short-term sentiment indicators like the "Bullish
Consensus" and the "MarketVane" are registering fairly
extreme bearish readings, which, from a contrarian
standpoint, is bullish.

- The opposite phenomenon is occurring in the gold
market. Suddenly, everyone seems to be bullish on gold.
That's quite a change for the "yellow dog." Over the
course of two superb decades for stocks, most investors
learned to hate gold, or at least to ignore it. But now
that stocks are flirting with three straight losing
years in a row - for the first time since the Great
Depression - gold doesn't seem so repugnant anymore. In
fact, it is becoming dangerously close to being popular!

- Most of the short-term sentiment indicators on gold
are very bullish, which therefore is bearish.
Furthermore, the commercial traders (considered the
"smart money"), tracked by the weekly commitment of
traders report, have amassed their largest short
position in gold in more than six years.

- Such extreme Commitment of Traders readings are
certainly not foolproof indicators of market direction,
but they do suggest that the metal is close to a near-
term top. As for the long-term, who knows? But gold
probably deserves the benefit of the doubt, given the
precarious state of the U.S. dollar.

- The U.S. current account deficit is running close to
5% of GDP. In other words, we borrow more than $1
billion a day from foreigners just to keep the lights
turned on at America, Inc.

- This massive current account deficit will not be a
problem, the experts assure us, so long as foreigners
continue to invest in the U.S. But the dollars' recent
weakness suggests that some foreigners, at least, are
withdrawing from the U.S. already.

- "The most interesting development of late in global
markets has not been the renewed weakness on Wall Street
but the wobbles in the U.S. dollar," says Christopher
Wood of "The intellectual rationale
for pouring money into America in recent years, namely
superior investment returns, has now been proven false
given that this is the third year running that the U.S.
stock market has so far failed to deliver positive

- Wood continues: "The Economist proclaims in its latest
issue that the American current account deficit is 'an
accident waiting to happen.' This may not be a
particularly original statement. But, however seemingly
banal, it happens to be true..."

*** While nearly everyone waits for the resumption of
the bull market in stocks, most people expect the rally
in gold to end any minute. "Equities always reward
patient, long-term investors," say Rukeyser's elves and
other mythmakers. "Gold, on the other hand, always
disappoints," they say. Gold timers were 90% bullish in
February. But now that the metal is $10 higher, only
37.5% of their money is in gold; the rest of it is in

*** "This is a textbook case of what is often seen at
the beginning of sustainable rallies," explains my old
friend, Mark Hulbert. "As contrarians constantly remind
us, bull markets don't like company; they thrive when
relatively few advisers and investors have jumped on
their bandwagon. This is why contrarians were not
particularly surprised that gold's rally stalled in mid-
February...Today, in contrast, gold at $310 per ounce
has fewer cheerleaders than it did three months ago when
gold was trading at a lower price."

*** Gold up...dollar down. You might want to get used to
the sound of might be in the news for a long
time. Last week, the dollar had its "biggest drop since
January," according to the Bloomberg report. Since the
end of March, the greenback index is down 4.3%. Friday's
trading left the euro up 142 points - to 91.52 cents.
The smart money is leaving the dollar and moving to
gold.: shorts...#750265/6/02; 16:51:18

I wonder if they would go well with my turquoise socks!
Solomon Weaver50 day moving average of Gold spot hit $300 today#750275/6/02; 16:52:11

SiochainGive up your gold (No Way!!)#750285/6/02; 16:55:22

Interesting....another wants you to turn your gold in....for your best interests, of course!!!!

"As the stock markets continues its ominous declines (The S&P's made 6 month lows last week), as the USD continues its precipitous decline (the Euro made a 7 month high on Friday), the gold market is seeing investor interest ramp up to levels not seen in 20 years. While the tragic events of September 11th, and other terrorist actions, have prompted the purchase of gold by those seeking a "safe haven" in a increasingly frightening world, those levels of demand are nowhere near the quantity nor the consistency of interest presently seen. The purchases of gold due to sudden fears by the market tend to be fleeting in nature, but such demand, when fueled by economic reversals is of much greater consequence.

There has also a "sea change" in the nature of such investment demand. Previously, buyers of gold participated in the "physical" markets, buying bars or coins. Now, recent buyers of gold are demanding "paper" gold through the derivatives, futures, or options markets. They want the leverage and the safety and security of dealing in a completely regulated environment. This trend can be summarily proven by looking at the volume of business recorded by the LBMA vs. that which occurs on the regulated futures markets in New York. Trading volumes in London, the largest "physical" gold market in the world, continue to post lower results, while open interest in New York continues to rise to recent record levels.

We are also seeing that the old-time investors in gold are actually selling into this rally, and not much physical buying is occurring. When investor interest in physical gold is high, premiums on gold coins rise. Even as gold continues to make 2-year highs, premiums on gold coins such as US Eagles remain quite low and well below replacement costs at the US Mint. Perhaps even a better example is the sad case of US $20 Liberty Head gold coins in XF/AU condition (slightly circulated). These numismatic coins, which were minted from the 1850's to 1907 (now almost at least 100 years old), are trading in the market for just $15 to $25 USD (each coin contains .9675 oz. of pure gold) above their precious metal melt content, probably as low a premium as has been seen since the 1970's. This fact would certainly infer that "old-time" investors are selling as new investors are buying. But the new investors are seeking investment venues with greater transparency, greater leverage, and greater security, and are shunning the old investment vehicles such as coins.

I would expect that this trend will continue, to the financial detriment of those owners of physical gold coins and bars. I urge readers of this commentary, who hold physical coins, to call our offices (afternoons are best) for a discussion of possible strategies to avoid further losses. Historically, on many sharp gold rallies, such coins have traded at or below spot, and if gold continues to rally, as many analysts and I foresee, gold coins may continue to lose value in relation to their gold content. "

Siochain...If holding real gold is such a "bad investment"...wonder why they want to take it off your hands...hmmmmn

Now our cry must be to not only get gold...but hold it...tightly!!!

Siochain@ Robot Guy#750295/6/02; 17:00:15

I thought someone had mentioned that these late blips were related to trading still open in Mexico...not sure but a possibility
R PowellGold and silver trading#750305/6/02; 17:13:04

Thebulliondesk site has gold up 1.90 and silver up .03.
I've heard that gold starts trading again at 4:00 EST after the stocks close and a few hours after Comex close. Where this happens is a mystery unless it's electronic trading?? I believe downunder trading starts at 6:00 EST and Hong Kong starts at 9:00. Anyone know for sure?

GraefinR Powell#750315/6/02; 17:21:41

DownUnder should start at 6pmEST, dunno about Hong Kong.
- Gräfin

SiochainGATA...LIPS...And GOLD#750325/6/02; 17:36:55

"Ferdi Lips Spotted The Gold Rig That Is Coming To An End Six Years Ago

With both London and Japan closed, the gold trading was very subdued in the U.S.

The Comex open interest continues to explode as it rose 4,958 contracts to 189,735 contracts on Friday. The bullion dealers, or uniformed gold commentators, will say that is bearish as the specs keep piling in. I say the opposite. We are coming closer and closer to that commercial signal failure. That is when the commercials are buried by the specs and it gives force to the grandest commodity moves of all. That was the case in 1993 when gold exploded higher and in late 1996/1997 when gold collapsed.

Another bullish gold technical indicator from a Café member:

Again, two very reliable indicators, the put-call ratios in both the gold futures and the XAU continue to be unbelievably subdued. I think that on only one day last week did the XAU have more calls than puts. At trading tops you can look for ratios of around 10:1. The Hulbert article is also most revealing. Chuck C


By Ian Williams

THE price of gold rose last week to $309 an ounce - and at one point was $312, its highest for two years, a period during which the FTSE gold mines index gained 55%.

This highlights the counter-cyclical nature of gold relative to bonds and equities. A multitude of factors - technical, fundamental and cyclical - are responsible. But one thing seems certain: the price can go considerably higher, outperforming even the previous peak of $850 an ounce in January 1980.

Analysis points to a multi-year bull market developing for both gold and gold stocks, supported by such diverse factors as a 900% increase in Japanese gold imports this year, China's desire to increase the percentage of its reserves held in gold and changes in forward selling by major gold-mining companies.

China's central bank is the most interesting example. China has foreign exchange reserves of $700bn, of which about 2% is in gold. Last year, the Chinese declared their intention to increase this to between 10% and 15% of total reserves but were "persuaded" by the Americans to keep their reserves in dollars and treasury bills in return for American support for China's application to join the World Trade Organisation. Now that China is a member, it can change its reserve mix to whatever it wants.

Siochain...that last paragraph is interesting,,,wouldn't you say....the rest of the article gives a good summary of what has been going on behind the scenes and GATA's learning & leading

PizzMarkets#750335/6/02; 17:44:52

Anyone else getting the feeling that SOMETHING is just not quite right.

Technically gold is right up against a trendline. A couple gold stock I follow are right at new high's or slightly below, and the SM sold off last hour and aftermarket gold moving up befor Sidney. Feels like a breakup for gold and down for markets.

Now, FED meets tomorrow, after a week+ of crashing dollar and the quarterly refunding later this week.

I'm just trying to figure who's going to come to the auction at these prices with what appears to be a growing perception that capital may be starting to move away from US.

I can think of two reasons why Greenspan might be strongly considering raising rates tomorrow. (1)It'll drop treasuries and therefore give a bit of a boost to the treasury bill auction, and (2)has anyone figured out who the PTB is going to blame for the recovery that never was?? Raising interest rates would sufffice as the macro economic numbers continue to deteriorate. Some reason is going to have to be given sooner or later. Maybe Greenie will walk the plank for the admin on this one. Or maybe (if rates do go up) he'll just blame all the positive govmt stats.

Just musing, but again, something doesn't feel quite right.

Siochain: Thanks for the Kaplan laugh. Any of his customers stupid enough to by that line of BS should sell.
Physical may jst be getting a bit harder to find (smile).


nickel62Kaplan, I couldn't believe that post????????#750345/6/02; 17:49:55

Is that the same guy who gets qouted on Kitco all the time? A little help here I have heard the name but never knew who he was. Thanks before hand.
MarkeTalkCavan Man, IRS reporting rules on K-rands & Maple Leafs#750355/6/02; 18:12:04

I have read your post in response to my post, as you invited me to comment. I have to disagree with your analysis concerning the reason why the Treasury Department introduced dealer-reporting requirements in 1984. Firstly, the IRS missed out on billions of tax dollars after a spectacular run in gold and silver to heights never seen before. Investors cleaned up in the bullion market and many did not pay any taxes at all. Secondly, these new rules were drafted and timed to go into effect as the gold market was surging again towards $500 from its lows of $282 in August 1982. Spot gold hit $500 on a couple of occasions between 1983 and 1987, the last being in December 1987. Go back and check the charts. I know this information like the back of my hand because I was working for another precious metals company at the time. Every swing up and down would invite investors to sell back to dealers and the investors would pocket the profits. But with new dealer-reporting requirements in place, there was no way to escape the tax man.

Thirdly, the new US Eagle gold coin was not introduced until 1986, two years after the 1984 rules went into effect. It can be argued that one of the reasons for the new US Eagle was to tap into the growing interest in gold coins and to take profits away from Canada and South Africa. But why did the IRS fail to place the US Eagle on the list of reportable transactions by dealers? Could it be the same reason why the IRS failed to place the Austrian Philharmonic, Chinese Panda and Australian Nugget/Kangaroo on the same list? I believe so and that the reason was inertia on the part of the IRS. In other words, the IRS simply overlooked these others coins. But with the new proposed regulations due out in the next 60 to 90 days, I believe those "loopholes" will be a thing of the past.

As far as your comment goes regarding the sale of 20 Maple Leaf gold coins without any dealer reporting, that is true unless you sell back 20 coins every week or every month in an attempt to circumvent the intent of the law. The IRS advised all of the dealers many years ago and warned us against so-called "structured transactions" which evade the strict reading of the law but not its intent. In fact, I received a phone call recently from a client who had done business with a competitor who was the object of a government sting operation. Government agents set up cash purchases of less than $10,000 each time (in compliance with a strict reading of the law) but they visited the gold dealer several times over the course of six months. The coin dealer failed to fill out the required currency transaction reports (for cash deals over $10,000) and he was found to be in violation of the IRS regulation. The feds seized all of his inventory and bank account and he was out of business left to fend for himself on the street corner. This is one of the reasons why Centennial made the decision many years ago to avoid cash deals altogether.


mikal@Pizz#750365/6/02; 18:18:03

Those ARE two very good reasons why the FED may raise interest rates tomorrow or at ANY time they see the need. Imagine what would happen to the dollar. If higher rates undermine foreign and domestic confidence in low inflation or quick recovery. If corporate cash flow, earnings, & profits suffer from higher debt payments. If stock prices and credit ratings suffer. If consumer and corporate borrowing and spending suffers.
R PowellPizz#750375/6/02; 18:37:32

That "feeling that something is not quite right" must be contagious but with me it refers to silver. I sense weakness and hope silver's good friend gold can help by setting the pace. Gold seems to have great support. David Morgan recently said that silver's upside moves seem supported by silver as a monetary metal while the downside moves appear as silver trading as an industrial metal.
If POG can lend some support now, I believe silver will return the favor later.

Perhaps soon the Greenman will face that awful decision of having to raise rates to save the dollar knowing that this may tank the debt ridden economy. Or, will he leave the dollar to sink or swim without intervention (rate hikes) protecting the equities?
Does POG care either way? Probably not, it's either up or up at a faster pace. Close your eyes now and repeat three times, "Silver is money too! Silver is money too! Silver is money too!"

mikal@Pizz#750385/6/02; 18:40:19

Re: Your reason #2 for hiking Fed Funds Rate. It seems we will get a repeat of 1929 and 1932 where blame was diverted, like the majority do today. They still haven't learned either. So, what reason will we get for the nasty downturn, besides 9-11? Greenspan? Bush? I hope Christian's terrorist suggestion was wrong. I wish it were a UFO announcement or a Second Coming, but I don't think so. Then what will it be? There is only one way to find out. ; ) CALL To Contest!
Black BladeArgentina inflation soars#750395/6/02; 19:03:25

Argentine prices have risen 20% so far this year following the devaluation of the country's currency the peso, officials have said.


The prices of fresh eggs and vegetable oils, as well as the prices of computers and televisions, have risen between 100% and 200%, according to a survey by the Argentine business chamber CAME. The sharpest price increases were seen in April, raising fears that there could be worse to come. "On Monday the official inflation rate [for April] will be announced, and it will be around 10% [for that month alone]," said cabinet chief Alfredo Atanasof in interviews on Sunday.

Black Blade: Argentina has seen several "food riots". This "Soylent Green" scenario will play out over and over. "Interesting Times"

Gauntlet-Runner2("GR2")Mikal#750405/6/02; 19:10:49

If the FED raises interest rates it's a notice to the world that they don't care about the "recovery". They have to keep interest rates low and let the dollar come down slowly. To throw out whatever recovery is happening by raising rates would damage the "We're OK and you're going to be OK" image. Perception becomes reality when there are more variables than constants in the equation. They have to decide who they don't mind stealing from more........the foreignors holding bonds who can't vote or the general population that needs its jobs. Americans would rather have a weak dollar than no dollar at all. Bring on inflation, half the people you talk to all think a little inflation is good. It's the pain tolerance level of the foreign bond holders that the FED will test. When the Sheiks and the Kings of the East (Asia) start complaining then the FED will raise rates and not until.

The geldshares are getting tight. For every seller there are 1.3 buyers and the shorts are going to be panicing every morning. They are trying hard to knock them down but there are a million "snapper blues" nipping at the bait. No matter what we do, there is more bad news coming out keeping fear alive and well. What is blowing people's minds is the way the POG won't fall back. Their shorting efforts are like throwing water on a dry sponge. One of the "true barometer issues" CEF is running up and all it has is metal in its vault. So we see more lemmings would rather trust those accountants than own the metal themselves. Some day "point click buy is going to turn into, point click "How come I can't access my broker" Oh yes, it's because they make you broker. So I'm saying that symbol is a good overlay to the POG to test for bullish sentiment. The divergence would show that one is going to catch up to the other. The point at which money runs hard into the metal vs the shares is still in flux. No one has to buy the shares it's just too easy. I'm sure glad the mining executives are so much more noble and honest than the folks at Enron. It's amazing how all the saints decided the run goldmining companies. Yeah I'm OK and you're OK. (So far today. If you aren't on the lookout for large block order sales and sly dilution attempts, then yer a sleepin too much and awake not enough.

I took the "Land-O-Lakes" butter label to my scanner and for my wallpaper I've got the little indian maiden holding out her bar of gold. A tribute to all the Tokyo-mamas buying gold up making it all happen.
When you need peace and quiet just watch the bird. Found it on a recient web expedition.

sectorFOMC Rate Increase?#750415/6/02; 19:13:16

@piz...It's not in the cards kind Sir.


For each 1% increase in Fed Funds there is a 35% increase in US corporate interest costs.

To suffer an interest rate hike just now would surely smash the SM. Corporate leaders are desperate for any bottom line juice, never mind the widespread accusations of fraudulent accounting with which they now must constantly deal.

No, Mr. "Can't Make a Decision" Greenspan will default to his dominant personality trait...ignoring the approaching freight train.

The gold fraud cabal faces, as GATA's Bill Murphy says, a new adversary. A foe of unknown strength and unmeasured tenacity…an enemy that has special intelligence regarding the plans and backing of the Fed and Treasury…An enemy that has organized and is lean for a protracted fight. This isn't some rogue hedge fund or eccentric billionaire or some trendy boutique group. These people are hardened, fearless shock troups that know the Fed's gold defenses are as vulnerable as the Maginot Line. They are determined.

Even if the Fed raises interest rates soon, and the dollar stops swooning, it won't matter to this new Fed enemy because they understand the physical mechanics of the years-long gold suppression and have moved to exploit the Fed weakness. The dollar isn't the gold-link it used to be. "It's the physical...stupid" is their silent war cry. The Fed has sold all it can sell comfortably. The Fed acolytes are on the financial ropes with their gold derivatives [JPM, CitiBank have dumped tens of billions in gold derivatives of late and they still have many tens of billions to go].

The mighty a fight for its life.

Make no mistake. If they fail to cap gold in the coming months they fail as an institution. For as surely as the Enron, JPM and Mahonia offshore scandals followed the Moody's downgrade of Enron, there will be a gold scandal. It will be necessary to explain $400 [Much higher likely] plus gold prices. The stories will emanate from the NON-financial press. A flood of questions will follow.

The perpetrator will be revealed to be the Federal Reserve. They sold our gold to create bubbles. They roped into the scam the British in too. The Germans will roll as Deutsche Bank coughs up its golden hairball as well.

At the end, the Fed will be "…lying in a burned-out-basement…" as Neill Young so aptly said in… "After the Gold Rush.

Gauntlet-Runner2("GR2")(No Subject)#750425/6/02; 19:14:19

Here it is.
mikal@Siochain#750435/6/02; 19:49:17

WELCOME Back Lady.
Black BladeAfter Hours#750445/6/02; 19:56:56

There is a bit of interesting action perking up in after hours trading. Notice that Gold is up about $2.00/oz. and the USD Index is in retreat again (soon below 112?). After such a dismal day in NY, it is no wonder that foriegn investors are ready to bail.

- Black Blade

mikal@GR2- Nice dove art#750455/6/02; 20:01:34

"A dove got caught in the rafters last night. I had quite a time trying to get her out. She hit her head several times in panic. Only when she was stunned was I able to care for her.... in this world, the pursuit of love and compassion is not without pain and confusion." -Deng Ming-Dao, 365 TAO
Cavan Mansector#750465/6/02; 20:02:36

Who is this new adversary? Sorry to say I am not a cafe member.
slingshotGold $313.30#750475/6/02; 20:02:49


Car 54 Where are you?

Wake up Joe, (Joe Sixpack) Their calling us.


da2gCavan Man- Belated Easter Greetings#750485/6/02; 20:06:12

Christos Voskres!

Sorry I missed your greeting yesterday.

Pizz@sector - more musings on a rate hike#750495/6/02; 20:06:27

Appreciate your response and I agree with your statements.

My concern is more abstract (for lack of a better term due to my limited diction) and more directed towards the $ and our debt - a much bigger problem than gold derivitives, which are, IMHO, still a major problem.

The dollar drop has the potential to take Japan down for the count, banks first. Japan hasn't much incentive to keep holding our debt, dollar or bonds. Major problem. If our bonds drop, the housing market starts to implode with higher long term rates. If the dollar continues to drop, inflation goes up with the same effect.

A quarter point rise firms up the dollar and debt. It also will nearly completely remove the limited inflation fears and have very little efect on long term rates. It would also, IMO, send gold back down to the bottom end of the trading range (295 - 300).

Slam corporate American and the Stock Market. You bet, but their going down anyway. Why not get some mileage out of it? Most analyst I'm listening to are looking for the washout of the markets before they start committing new funds.

Corporate earnings are already going down, and O'Neil's already basically said "tough".

Greenspan is also into tweeking. We're too close to November elections to have any type of dollar crisis get worse. Democrats will want tax relief repealed or raise taxes, Bush & O'Neil won't go that route.

Proverbial "Catch 22".

Odds say your right on the "do nothing" senario, but I also hedge against the "blindsides". Greenie cost me a bunch once in my trading days and if anything, he has his own agenda and he happens to be O'Neils spear-chucker.

Interesting times and thanks again for the feedback.


Cavan Manda2g#750505/6/02; 20:09:30

Alithos aneste!
PizzBlack Blade#750515/6/02; 20:18:19

Would it be too much to ask if you have any experience or recomendations on some of the solar battery chargers, radios, flashlights, and lanterns available?

Not too many manufactures that I can find on the net, and the prices just don't seem to be high enough for me to be comfortable that I'm not buying junk - stange way to look at it (and if I ever do get ripped ordering on the net, it will probably be a doozy), but competition in that market seem a bit slim.

(Thanks also for all the energy posts. I don't have the time to be as informed as you make me, and it is appreciated.)


YGMNew Use For GOLD & SILVER......#750525/6/02; 20:29:31

Japans Sumitomo Metal Mining Develops Special Conductive Film..May 2/02.........

Scroll @ Link......Conductive film for Cathode Raytube CRT Monitors using Silver & Gold......

**Excuse me if someone already posted this. I just found it surfing around Bank news sites.....YGM.

BTW...Anglo-American getting into Copper??? Didn't read this piece yet...

PizzR Powell - Silver Sinking?#750535/6/02; 20:41:18

Hang in there buddy. You've got the leveraged play of the decade, assuming we're right on gold. It will just take a bit longer.

Every time you get nervous about silver, just imagine gold at a paultry 1500 to 3000 bucks an ounce and the banks in deep ______. Is gold going to be money? No - wealth. It will be too expensive to buy or trade by the masses.

If (When?) TSHTF, and I think it's going to, silver will be the alternative medium of the masses, in the hundreds of dollars an ounce with a lot of junk silver and old coins for trading and small purchases if it comes to that.

Personally, if it gets real bad (let's hope not), I'll take a hack saw to a 10 oz bar of silver for a small purchase. Chop up a maple - I don't think so, cause my gold will be buried so deep . . . waiting for the dust to settle.

General Public is virtually ignorant of what is going on and transpiring. It'l take another crisis or two and some time, but its coming.


YGMV.A.T. Being lifted from Gold in Korea? Possibly June.#750545/6/02; 20:46:33

One more Asian country will be buying more Gold...OK!
Pizz@Mikal#750555/6/02; 20:51:05

I really don't have an answer (rate hike may work) to my own statement on just what the PTB are going to say when all their bullish BS comes home to roost, but I do feel someone or something will have to be "tossed under the bus". (That's car biz lingo for blaming everyone but yourself.)

I'm expecting the government to start hedging their 'bets' a bit. Going to be one heck of an off major election this year, mud throwing by the supertanker load.

Thanks for the feedback.


Black BladePizz – Solar Power Packs#750565/6/02; 20:55:53

I am afraid that I do not have much experience here. However, I have a friend who has a solar powered and "crank up" radio (Kaito Solar AM/FM/Shortwave Radio) that seems to work well without batteries (it will also operate on batteries). The crank charges the radio for a time as the slow unwinding action generates electricity. I understand that each full cycle lasts at least an hour. There are also lamps that operate the same way such as the Solar Dynamo Rechargeable Lantern (solar powered lantern does sound a bit redundant doesn't it?). There are even solar-powered battery chargers available. There are several brands of these kinds of items available. You could do an internet search under "emergency radio" or "earthquake preparation" or something similar – you should be able to find something similar.

I just have the usual Coleman lantern, oil lamp, candles, flint and steel and battery operated gadgets, however, these other "emergency" items should work out well and that they can work without batteries is a plus. Fortunately I have a hideaway in the mountains where I could live a more "primitive" life if necessary. However, I am used to that kind of life due to work and up-bringing whereas someone with a family to look after would perhaps like something much more convenient. I don't think that you could go wrong by preparing for any emergency and these items are a good start.


- Black Blade

Gandalf the WhiteThe Hobbits are CELEBRATING breaking through $313.#750575/6/02; 20:57:02

NEXT hesitation stop is $325.

sector@CavenMan...The Fed's New Gold Buying Adversary#750585/6/02; 21:13:02

We don't have names but we know addresses.

We don't know them all but we know enough.

One gains perepective on who is buying now by observing who bought in Feb. but is quiet now.

It isn't the arabs but they count.

In the end... they will win...big. It's the patience thing.

Gauntlet-Runner2("GR2")Are the Kangeroos Hopping in Sydney?#750595/6/02; 21:15:45

Somebody actually started buying gold down under. Kicking kiwi koalas batman. No more selling on the Isles of Perth. Yes, mates we'd might better cover our hedgebooks before we get covered up 6 foot under down under right.
Canuck@ Pizz, All#750605/6/02; 21:27:46

For some reason I've been tuning in on 'the inside information' scoop for the last year or so.

I didn't see the SM sell off but if my (inside) guess is correct I wouldn't be surprised with an increase tomorrow.
Was the sell-off abrupt/intense this afternoon?

On the other hand, gold powering ahead flys in the face of this guesstimation.

We shall see soon enough.

Black BladeHole in Ohio reactor vessel, cracks in South Carolina plant raise biggest nuclear safety questions since TMI #750615/6/02; 22:08:22


WASHINGTON (AP) A nuclear reactor in Ohio is found to have a large hole nobody thought possible, burned almost through its six-inch protective steel cover. Cracks of a type never seen before are discovered at a reactor in South Carolina, triggering widespread inspections. Both events caught industry leaders and government regulators by surprise, and they are fueling new questions about aging nuclear power plants and plant inspection programs.

Black Blade: More problems found in the nation's nukes. When boric acid corrosion was found at the Davis Besse reactor in Ohio, the NRC demanded that all 68 other nukes of similar design be inspected. Now another near miss has been found. More inspections are likely and the resulting shutdowns will likely result in increased draw-down of the NG supply.

Gauntlet-Runner2("GR2")POG + 30 is what we might see.#750625/6/02; 22:14:19

From the increasing magnitude of each 4 month POG price breakout, we are scheduled for a $30 spike with a fallback of only $5. Whatever price it bases at for now is what I'm adding that $30 to. Charts are the sum collective of all the traders in the world. Their footprints are in the cadence of history across the gold dust sprinkled trail.

"Paper-man where art thou? Who told you that paper was money? Did you go to the banker and eat from the tree it was known that you shouldn't eat from? The tree of usury and unjust gain?"

Chris PowellMore indications that Barrick is frantic to cover#750635/6/02; 22:17:39

More indications that Barrick is frantic to cover
its shorts through combination with AngloGold
and Gold Fields:

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.

CanuckEnron memos reveal plans#7514405/07/02; 20:13:25

slingshotSeige Engine#7514505/07/02; 20:25:37

After a day and a half of bombardment to his refuge ,the Lord of the castle wanted to look at the damage being inflicted. He was confident his fortress would withstand the assault for some time untill he peered over the wall. What he saw was a flaw in the construction The builders had made it thick by building two thin walls and filling the space between them with discarded material. As long as the outer remained intact the fill stayed in place. Now, as the Goldbugs and their machine have pierced the outer part of the wall, the fill is pouring out making a ramp even before the tower falls. He knows now time is short and calls his Knights to plan his defense.

PizzJPM#7514605/07/02; 20:31:11

Now I know why JPM puts were unusually strong today.

Might be a bit interesting in the morning.


sectorLeonard Kaplan...A Babbling Brook of Wierdness#7514705/07/02; 20:34:01

The Prospector Report May 5

"...We are also seeing that the old-time investors in gold are actually selling into this rally, and not much physical buying is occurring. When investor interest in physical gold is high, premiums on gold coins rise. Even as gold continues to make 2-year highs, premiums on gold coins such as US Eagles remain quite low and well below replacement costs at the US Mint. Perhaps even a better example is the sad case of US $20 Liberty Head gold coins in XF/AU condition (slightly circulated). These numismatic coins, which were minted from the 1850's to 1907 (now almost at least 100 years old), are trading in the market for just $15 to $25 USD (each coin contains .9675 oz. of pure gold) above their precious metal melt content, probably as low a premium as has been seen since the 1970's. This fact would certainly infer that "old-time" investors are selling as new investors are buying. But the new investors are seeking investment venues with greater transparency, greater leverage, and greater security, and are shunning the old investment vehicles such as coins.

I would expect that this trend will continue, to the financial detriment of those owners of physical gold coins and bars. I urge readers of this commentary, who hold physical coins, to call our offices (afternoons are best) for a discussion of possible strategies to avoid further losses. Historically, on many sharp gold rallies, such coins have traded at or below spot, and if gold continues to rally, as many analysts and I foresee, gold coins may continue to lose value in relation to their gold content. ..."
What is this bozo talking about? Did I miss something?
I bought some American Eagles in the fall at a delivered price of $280 The margin has risen to at least 3% since and of course there's the pog at $312. I think of it as undeveloped real estate in a prime area…an emergency fuel supply should the incompetent government do what we all know they are going to do.

Occasionally Kaplan makes a modicum of sense when speaking about bullion bank matters...then this latest rant comes along.

He speaks of transparency in COMEX paper? Who are the COMEX longs, by name? The TOCOM lists them for all to see. For example anyone can see that Mitsui, Sumitomo and Mitsubishi are all short gold in open interest by 96% to 99% of all contracts and all have been that way for years. Nobody stakes out lop-sided futures position like these without an official backer...most likely the BOJ. Get rich in COMEX gold futures…buy from Leonard…none of that untrustworthy physical…there's no leverage.

So the learned Mr. Kaplan wishes us to believe that the paper COMEX is as good as the real thing in if the TOCOM really DIDN'T default a few years back on it's platinum contracts. More than a few people have suggested that the COMEX will default on its gold contracts when it becomes clear that the shorts [Read JPM, Goldman Sachs et, al.] don't HAVE the gold. But don't worry… one will receive perfectly good paper from the COMEX…less a bit of leverage, of course.

Kaplan might as well wear a cardboard sandwich for the cabal. What a worthless shill.

sector@slingshot...About the seige engine#7514805/07/02; 20:37:37

It's called a trebuchet...and it works a little like your handle throwing a 250 pound stone ball 800 feet.

mikal@Slingshot Re: Siege #7514905/07/02; 20:48:53

ROFLMAO! Encore! Encore! Silver Feather gazed upward, her attention fixed on the golden pall radiating from the rising moon. This is a special juncture, she knew, occurring only when the elements are at a peak of harmony. The wolves howls seemed to rise in tandem, calling "TOOoo DAAaa MOOoon" She drew her slingshot from its sheath, and let the moonlight fall upon it, singing, and rejoicing.
slingshotsector#7515005/07/02; 20:49:45


Thank you sector. Yes truly a marvel of its time. I just could not remember the name.
Two designs were one with a solid counterbalance mostly made of lead. The other design had a wooden basket or box.
Range and accuracy determined by adding or decreasing weight to counterbalance'size of projectile(stone) or adjusting lenght of the sling.Not a nice thing to see if you lived in a castle.

I'm going to have to write that down.;O)
Thanks again

ArcticfoxAnd so it continues... I wonder what Sharon's response will be??#7515105/07/02; 20:49:56

WASHINGTON (AP) - Hurrying home after a suicide attack killed more than a dozen people in Israel, an enraged Israeli Prime Minister Ariel Sharon declared Tuesday there was no way to move forward on Mideast peace with a Palestinian Authority that he called a "terrorist and corrupt entity."
Sharon, cutting short his visit to Washington after the attack, vowed to keep up Israel's campaign to stop Palestinian terror attacks.

"Our work is not done," he declared. "The battle continues and will continue until all those who believe that they can make gains through the use of terrorism will cease to exist - cease to exist," the prime minister declared in a hastily called news conference before leaving for Israel.

Without mentioning Palestinian leader Yasser Arafat by name, a bitter Sharon declared that the attack provided "proof of the true intentions of the person leading the Palestinian Authority." Sharon has been resisting entreaties from President Bush to negotiate with Arafat to get the Arab-Israeli peace process on track.

Sharon, who learned of the bombing during an Oval Office meeting with Bush, declared over and over that those who support or fund or perpetrate terrorism are "guilty, guilty." Earlier in Sharon's visit to Washington, the Israeli government presented U.S. officials with a dossier laying out what it said was evidence that Arafat was a sponsor of terrorism against Israel, a charge the Palestinians denied.

"Israel will not surrender to blackmail," Sharon declared. "Israel will not surrender to blackmail."

He said the Israeli military offensive against militants in Palestinian towns and villages had made great strides in rooting out the terrorist infrastructure but that the job clearly was not done.

"He who rises up to kill us, we will pre-empt and kill him first," he said.

Sharon, speaking first in Hebrew and then in English, said he was departing for Israel "with a heavy heart - heavy with grief and heavy with rage."

He said it was "the rage of each and every Jew in the world."

The address was carried live on television in both Israel and the United States.

AristotleSector on Kaplan#7515205/07/02; 20:53:35

The best take on Kaplan's comments that I've yet to hear were posted in the small hours of today.

Andúril (05/07/02; 01:50:36MT - msg#: 75071)

I think his point is well made. These are the words of a dying man.

If indeed the Gold chapter of JP Morgan's derivatives book goes down in flame, what do you think that will do to the confidence in counterparty performance not just the OTC Gold derivatives, but the exchange-traded COMEX ones as well?

Would anyone in their right mind be a buyer of COMEX futures???! Can a market survive under conditions of ASK/NO BID? No... I thought not.

Real Gold. Get you some. --- Aristotle

slingshotsector#7515305/07/02; 21:16:05

Just one more laugh

I drew a picture of a trebuchet before I knew what it was called and went around asking, Do you know what this is called? My favorite answer. I don't know, what is it?

Good Night All

YGMThe Fortress Of CPM Castle.....#7515405/07/02; 21:39:58

Is a Bastion of Wisdom & Sanity.....

....And although I never brought much wisdom to the tables I've gained much, "AND" if it were not for these halls and the priviledge of roaring out my rants of indignation and outrage amongst those who educated and calmed such as I, then I fear my sanity might have been questionable...As it stands I owe more than one could ever hope to repay by thanks alone....What a good day this was, as they have been of late and shall continue to be in future. We are prepared to face the future as few percieve it to be....

Many here will look back on this adventure many years hence and be wistful of past challenges met and battles fought and won......This is just another time and chapter in the great history book of GOLD!.....YGM

balzacAs Butch Cassidy said" Who are those guys?"#7515505/07/02; 22:53:07

RE: J Sinclair's essay.

Can anyone tell me if Hung Fat & Dr. NO exsist in something

Other than Nom de PLume? Or we merely watching fiction?

Who are those Guys??


Black BladeNew Coalition, Citing Natural Gas Reserve Report, Warns of Supply Crunch Due To Unwarranted Price Volatility #7515605/07/02; 23:06:03


"We all must be very careful not to fall into a false sense of security; as a result of unwarranted price volatility, U.S. gas supplies are very much at risk," said Arthur Corbin, president of the Coalition for Energy Market Integrity and Transparency (EMIT) and president and general manager of the Municipal Gas Authority of Georgia. "A careful reading of the AGA report reveals that the top 30 companies that hold half of U.S. natural gas reserves did not add enough reserves in 2001 to replace production, even though the average price they received for their gas was over $4.00 per thousand cubic feet, well above historical averages."

Private investment banker and energy industry analyst Matthew R. Simmons, Chairman and President of Simmons & Company International, cautioned that the AGA report "could create a very false sense that things are well in natural gas just as the country's daily supply is poised to drop by what could be a genuinely tragic surprise."

Simmons said, "Every American should now be aware that the exploration and production industry embarked on the greatest drilling boom for more gas supplies in U.S. history during 2000 and 2001, shattering the prior record of gas wells completed in 1981 by over 1,000 more wells -- yet daily gas supply stayed flat. The drilling boom peaked at the end of last summer. Drilling for gas has now dropped 45 percent, which is just starting to be felt in daily gas production. By the time the country experiences the full impact of this drilling collapse, daily supplies could drop by 10 percent or higher."

Black Blade: We will likely see an energy supply crunch late this year or early next year. Reserves are not being replenished. No economic recovery this year.

goldquestWorth a re-read#7515705/07/02; 23:22:55

JPM should have heeded this commentary back then!
GoldflyGolly, this was interesting...#7515805/07/02; 23:32:49


The Board may provide, at any time, by Rule or resolution that there shall be no trading during any one business day or trading session day in any commodity for futures delivery in any specified month or months at prices more than a fixed limit above or below the settlement price for the preceding business day. At the discretion of the Board, any limitation provided in this Rule §6.09 may be changed or suspended or temporarily modified from time to time and without prior notice. Trading in options contracts shall not be subject to price fluctuation limitations.

GoldflyHmmmm.... This too. #7515905/07/02; 23:42:45

This part:

Maximum Daily Price Fluctuation
Futures: Initial price limit, based upon the preceding day's settlement price is $75 per ounce. Two minutes after either of the two most active months trades at the limit, trades in all months of futures and options will cease for a 15-minute period. Trading will also cease if either of the two active months is bid at the upper limit or offered at the lower limit for two minutes without trading.

Trading will not cease if the limit is reached during the final 20 minutes of a day's trading. If the limit is reached during the final half hour of trading, trading will resume no later than 10 minutes before the normal closing time.

When trading resumes after a cessation of trading, the price limits will be expanded by increments of 100%.

Options: No price limits.

GoldflyBut what about spot?#7516005/07/02; 23:49:13

Anyway according to my calculations, a gold futures contract could close at not quite $5 million/ounce tomorrow.

Oooh. That's making my scalp tingly.

Black BladeGold prices seen set to climb further#752345/8/02; 19:13:17

Canuck@ YGM#752355/8/02; 19:17:54

Best to take profits now.

I have been watching the POG for 4 years now. IT IS A FUNCTION OF THE US DOLLAR. I am sure there is a linear equation of POG/USD/YEN/POUND/EURO/FRANC.

Study that question and answer yes or no before proceeding to fact #2. If yes proceed to #2.

Gold is inverse to the USD, so should the USD rise gold will fall. We witnessed that large today. Should there be a demand for gold and a supply of dollars gold will rise. We saw a frenzy in Japan in Jan. and Feb. but there are no stories in March or April. Demand has wained. If yes proceed to #3.

The economic recovery is about as clear as the non-economic recovery. Stocks, particularly the Nasdaq, who have taken a 60-80% beating, as a whole, have been trending the 1500-1800 mark for a long, long time. It is entirely possible that the bottom is in for tech shares? If yes, proceed to #4.

Let's say, for the most part that gold stocks have doubled (100%). Let's say that tech stocks have been quartered (25%). By virtue of the CONTRARIAN definition, should we buy tech stocks? By virtue of currency valuation and import/export imperatives must Japan and its equals export to maintain economic viability. How could a valuation of say, 100 yen to the dollar possible exist? If yes, proceed to #5.

As a student of demographics, and the reader of "DOW, 36,000" I understand that governments will twist the numbers in a grotesque fashion to acheive the results demanded. Governments must provide 'old-timers' will mega-fiat-bucks in as little as 10 years. Everyone must be rich for there will be no hand-outs. If yes, proceed to #6.

There is no alternative to the USD. Not at this point. Gold is cool but not today. The world is dollarized, there are trillions of dollars sitting on the sidelines waiting to be deployed. Gold had its run but things were not GRIM enough. The US would not BLOW its international standing over 2 huge skyscrapers. The rowdy Islamic community will be beaten into submission, Iraq may or may not take a major hit. Maybe it should? It would be in the best interests for the US to whittle Hussein back a notch or 7.

A major chartered bank lowered long-term interests rates today, usually the major CDN chartered banks follow suit. Why would CDN banks lower mortgage rates today? Well, one housing starts fell off a cliff today. (10.4%) They are not worried about inflation? They sense a switch, mortage money demand is waining, money is moving somewhere? JPM had a stellar day today, contrary to the isssues raised last night. The market expects JPM to increase profits.

A shift back to the bubble?

Take profits now??

Black BladeCrude Oil Jumps as Israel Considers Response to Suicide Bombing#752365/8/02; 19:21:45


New York, May 8 (Bloomberg) -- Crude oil jumped to a one- month high after a suicide bombing that killed 15 Israelis renewed concern that escalating violence might disrupt supplies from the Middle East, which pumps a third of the world's oil.

Inventory Decline

Oil prices also rose after the American Petroleum Institute reported a larger-than-expected decline in U.S. inventories. Supplies last week fell 4.5 million barrels, or 1.4 percent, to 321.1 million barrels. Analysts surveyed by Bloomberg before the report expected a decline of about 750,000 barrels.

Black Blade: The Oil inventory level is not much different from last year's energy crisis levels. Meanwhile Oil hovers just below $28.00/bbl and NG is at $3.75 Mbtu.

Canuck@ YGM#752375/8/02; 19:26:37

..and all those investments banks, they will be cleared of all wrongdoings. An article in the Globe and Mail alluded to ML's plea bargaining already. Enron and AA will be slapped 'on the wrist'.

I guess what I am saying is, "to what danger is the USD in at this present moment?"


CanuckBB just nailed it#752385/8/02; 19:40:43

Oil is at $27 and NG is at $3.75.

The 'energy' bears say there is a $5 war premium built in. So let's be bearish, oil $22, NG $3.25.

The economy has lots of room to rock, the failure zone last time was $37, $10. Will Russian oil play a role this time? Will Canadian NG play a role this time?

Is energy a stopper again this time, probably, is gold a 'walker' until then or do we see a sub-300 gold again?

Curious, devil's advocate if you will?

Black BladeExperts predict fuel crunch for developing countries #752395/8/02; 19:44:11


HOUSTON, May 8 -- Energy demand is growing in developing countries that may be hindered by the lack of investment in exploiting their own energy resources, said a panel of industry experts at the opening of the 4-day Offshore Technology Conference in Houston. That demand is growing fastest in China and India, with their burgeoning populations. But in focusing on India and China, "we may be forgetting other parts of the world," warned Matthew R. Simmons, president and founder of Simmons & Co. International, who mediated the invitation-only 2002 OTC Energy Roundtable on Monday.

The combined populations of the 13 member countries of the Organization of Petroleum Exporting Countries, plus Mexico, have escalated to some 600 million today from 180 million in 1970, said Simmons at a press conference following that 4-hour session.
"By 2030, their [combined] population could be larger than [that of] India," he said. "History shows that countries only begin to slow their population growth after they become prosperous."

Regions of Asia—China, India, and South Korea—and of Central and South America will be hot spots for future demand growth, with consuming patterns increasingly similar to that of industrialized nations, EIA officials predicted. Those areas are expected to account for about half of the projected new increment in world energy consumption and 83% of the increase for developing countries.

He [Simmons] said, "Over the last 30 years, world oil demand has grown by about 25 million b/d, and maybe 60% of that has come from offshore." But maintaining that level of supply over the next 20 years will be difficult at best, especially from conventional sources. "Many [of the roundtable participants] said, 'Thank goodness for unconventional oil resources, such as oil sands,'" Simmons reported. Such resources will become a bigger factor in supplying the world's growing demand in the future, "unless demand peters out, which means our economy will have petered out."

Black Blade: With most Oil fields in decline, growing populations, modernization and industrialization, most Third world nations will demand their "fair share" of the Earth's dwindling energy supply. Costs are rising and if we must depend on costly unconventional energy supply we will never again see the economic growth of the past several years.

Black BladeFlap over gold derivative "firings" #752405/8/02; 20:02:09


PRINCETON, New Jersey ­­ Gold bug extraordinaire Bill Murphy reported in a circular to readers of the LeMetropole Web site that JP Morgan Chase's derivatives operations are in chaos. The bank flatly denies the claims and Miningweb has verified that at least one of the executives said to have been "fired" is still on staff.

Donald Eckert, global bullion risk manager at JPMC New York, was contemptuous of the claims and says nobody has been fired in the derivatives or bullion trading departments. He also denied Murphy's report that JPMC managing director of global commodities, Dinsa Mehta, was axed "two weeks ago". Eckert says Mehta volunteered for retirement after the global forex options, forex and gold trading desks were rationalized into a single department. "He was not fired at all, he chose to resign."

Another wrinkle is Mehta's involvement in the Enron fiasco. The House Committee on Energy and Commerce in March called on JPMC to provide copies of any correspondence involving Mehta and Enron's Mahonia subsidiary. When Enron collapsed, Mahonia owed JPMC billions of dollars, which insurers are now refusing to cover because they say the energy transactions were fraudulent. Mehta's precise role in Mahonia is unclear, but he is said to have boasted to colleagues about the fees the transactions generated for JPMC, and which presumably translated into handsome bonuses. The structure of the energy trades was nearly identical to gold hedging with which Mehta would have been especially familiar.

Indeed, Mehta is well known as an arch proponent of hedging and says routinely that gold has been "stripped of its monetary attribute by the globalisation of the international financial system" and that gold has lost its "crisis currency" role.

Black Blade: A lot of damage control perhaps. Mehta left to "pursue other interests". It is apparent that has served as apologists for the hedge fund miners for some time.

mikalBullish story from a stealth headline#752415/8/02; 20:11:23

Media speculation is yet again heralding a totally new currency environment! You gotta love the second half of this:

05/09 02:02
Dollar, Little Changed, May Extend Gain After Rally in Stocks.....snippit.......................................
The U.S. currency hovered at 128.95 yen after touching 129.07, its highest since April 25. Against the euro, it was little changed at 90.47 U.S. cents, after having its biggest gain in 3 1/2 months yesterday...........................
...``The current level is likely to persuade Japanese companies to buy the yen,´´ said Kenji Takei, a currency sales vice president at the Tokyo branch of Societe Generale SA.
The yen also may be helped by expectations a report due today will show Japan's index of coincident economic indicators in March rose to the level that signals growth, suggesting the nation's recession has passed the worst.
The index, which measures current conditions by tracking indicators such as power usage, wholesale sales and production, probably rose to 50 for the first time in 15 months, according to a Bloomberg News survey. The report is due at 2:00 p.m. Japan time.
Latest reports showed March Japanese factory production rose for a second month, the jobless rate unexpectedly fell, and salaried worker-led households' spending rose.
In other trading, the dollar was little changed at 1.6087 Swiss francs and at $1.4563 per the British pound.END...... Yes, it looks like your writers ended up far from where they started, Mr. Bloomberg.

mikalMedia spinning with a new twist-"Cover your backside"#752425/8/02; 20:37:37

Say it isn't so! Yes, you've done it again. Reporting from both sides of your mouth. Never mind, these days you're running par for the course. But this one is so gold bullish, it's a wonder where you ever came up with that title: "Where dollar leads, Euro follows", LOL! Click link or USAGOLD News Link
CanuckTen o'clock news just on#752435/8/02; 20:41:36

Here's the lead:

"Stock markets had their best day in a long, long time. Housing starts were down 10.4% in April and 2 of the country's banks have lowered long term rates by 15/100 of a percent."

Forget all the conjecture and speculation, this is a three-fold reversal:
b)housing starts
c)trend of long-term interest rates

What does this mean? Banks don't reverse trend all of a sudden.

GOLDENPROPHECYmahendra sharma#7524405/08/02; 20:57:02


CanuckI don't get it#7524505/08/02; 20:58:56

Checking the Kitco chart for the billionth time today, one sees that gold powered to a New York, three day high of $312.60 at 11:15 where it was whacked four bucks. Unlike Tuesday it was unable to recover.

If I recall Cisco released last night afterhours and while the Dow surged ahead this morning so did gold.

So, checking the graph again, what would explain a $3.60 surge from 8:45 to 11:15 followed by a 4 dollar crash from 11:15 to noon?

So given that Cisco was a known and the SM was a known what explains the sudden reversal except for blatant manipulation. Ask yourself this, given that everything else was in a constant linear slope, what causes gold to reverse in so much a drastic fashion at such an obscure time of day?

What is that? What happened at 11:15 that was so anti-gold??

YGMCanuck.....#7524605/08/02; 21:49:21

What Profits?

My man if I had 50,000 oz of Au and had a $10.00 profit I'd probably sell and forget all this financial crap and crime perpetrated by scumbag bankers...Kinda get on with what's left of my life @ age 53. I'm as much of a cynic when it comes to the power of the Bankers and the Elite over our lives as I am the optimist on the future of Gold. The last few years have bin an emotional roller coaster for us all.
...Now as I'm no longer involved in Mining or playing the
SM, I'm kinda content to wait & see if all I am optimistic about (Gold) will win over the cynical side (Bankers & Scumbags). I think I'll just rattle along & do my little part til the SHTF & the Car-tel runs out of gas.........
If anyone can play the swings in PMs and the SM & win w/o having a nervous breakdown...Well more power to them.....

As I've mentioned in past "GREED IS IT'S OWN EXECUTIONER"

"PHYSICAL GOLD" Buy It, Hide It, & carry on with life!

mikalMy, my. Asian eye. Something seems the better buy.#7524705/08/02; 21:50:13

(AFX-Focus) 2002-05-09 03:10 GMT: Forex - Dollar eases in late morning Tokyo after earlier short-covering
TOKYO (AFX-ASIA) - The dollar eased in late morning after sharp gains made overnight on short-covering...... "The market was obviously short the dollar. It's only a correction so far," said Nami Ito of the forex division at Barclays Bank...................Ito noted recent talk that Japanese portfolio investors may have started to send funds overseas for the new fiscal year after disappointing speculators earlier in April.
"Some say that, but we haven't seen much yet," she said.
"People are talking about Moody's. Some say that if they cut by two notches, that will be the end ... and the dollar will go down," she added.
Moody's said it may cut Japan's sovereign rating by up to two notches, adding that an early decision may be made, with speculation that an announcement is likely this USAGOLD news link for more

Black BladeThe Barbarous Relic Files – 521kg of gold dust seized#7524805/08/02; 22:19:58

Welkom - The Free State's infamous G-hostel near Welkom, and parts of Moletsi Hostel, were raided on Tuesday and 521kg of gold dust were confiscated, police said. Police, intent on ending the hostels' illegal melting activities, also confiscated gas cylinders, scales and other equipment used to process the gold concentrate. Superintendent Sam Sesing said although nobody was arrested during the Operation, called "Shapa", police were dedicated to dealing a hard blow to gold theft and would continue their raid on Wednesday. "G-hostel will never be a safe haven for criminals anymore. Disruptive actions like Operation Shapa will be sent from time to time and will hit the criminals where it hurts most," said provincial commissioner Moranodi Gaobepe.

Black Blade: The police sure waste a lot of time over a "barbarous relic" destined for the dustbin of history. Hmmm…

YGMBlack Blade#7524905/08/02; 22:25:55

521 KG of Flour Gold......

Well now I'm drooling...The fineness would make it almost pure Gold....@ 2.2 lbs p/kg uuuugh! I shall have nightmares tonite....Where the heck was this place Welkom?
Black BladeEx Nippon Mining & Metals workers arrested in gold fraud#7525005/08/02; 22:31:50


Police on Tuesday arrested former employees of Nippon Mining & Metals Co. and scrap suppliers in Oita City on suspicion of defrauding the company out of more than 300 million yen by misrepresenting gold levels in scrap it bought. In the scam, they took samples from delivered scrap in September and October last year to add gold to them, creating the impression that the overall gold content was higher, according to the police.

Nippon Mining & Metals decides the purchase price of scrap based on the gold content of samples. An in-house investigation by the firm found the overall gold content of the scrap was lower than the samples, prompting it to file a complaint with the police at the end of last year.

Black Blade: Going to prison over a "barbarous relic"? What's the point? Hmmm…

Black BladeYGM #7525105/08/02; 22:33:19

That's a story from South Africa.
Black BladePrice rally puts gold hedging out of fashion#7525205/08/02; 22:47:02


Gold companies are famously divided into hedgers and non-hedgers. Those in the hedging camp have been on the defensive lately, while the others are gloating. The sustained rise in the gold price and a rosier outlook for the metal have made selling forward less attractive to both producers and shareholders.

Black Blade: The day of the hedger is over. It's the dawn of a new age where hedgers are irrelevant.

balzacInconsistencies ???#7525305/08/02; 22:51:38

An interesting observation: Dow up 300 pts,Gold down $3.00.

However my 4 PM Funds lost only 2 cents.

Just previously when gold jumped $3.00 , the Funds

went up 25 to 30 cents. Explain that one. PLS.


Black BladeBarrick dismisses rumors of Gold Fields deal #7525405/08/02; 23:00:02


TORONTO, May 8 (Reuters) - Barrick Gold Corp. (ABX), which has grown to become the world's second-biggest gold producer through a series of acquisitions over the past 20 years, threw cold water on Wednesday on rumors it was poised to swell further by taking over a South African producer. "The rumors about South Africa are just that. While we assess opportunities and we are familiar with opportunities, they are just rumors," Randall Oliphant, president of Toronto-based Barrick told shareholders at the company's annual meeting.

Earlier this week a prominent mining Internet site reported that Barrick and AngloGold Ltd. (ANGJ), the third-largest gold company, would team up to buy Gold Fields Ltd. (GFIJ), the fourth-largest producer. "These rumors are creative, but it's just somebody creating this stuff at home in their basement," Oliphant told reporters after the meeting.

Black Blade: As I had pointed out to Tim Wood on the, the rumor was senseless as Barrick does not have the means to takeover Goldfields and such a merger would not likely pass muster with the largely anti-hedge shareholder base. Besides, the Goldfields share price has rocketed higher while the Barrick share price has barely budged by comparison. No Goldfields shareholder wants that Barrick albatross hanging around their neck.

The Invisible HandLook at the title!#7525505/08/02; 23:13:31

Market Summary, by Rob Peebles
Atlas shrugs, stocks rocket
May 8, 2002
Is it really that near?

RobotGuyDear Golden Bear,#7525605/08/02; 23:23:04

An opinion in this forum,to me,is just as valid as a fact. As far as I'm concerned there is nobody who might predict the future accurately no matter what calculation you choose to endeavor upon. E = m c/squared is a formula that humans have accepted as truth, but in reality it is a formula that will be proven wrong before long.

I am very greatful of the opinion of my fellow human, as to me it is just as valid as a written law. Thank-you for your continued support.


GoldflyYGM.... a link#7525705/08/02; 23:28:34

Black BladeLouisiana-Pacific to Cut 4,400 Jobs#7525805/08/02; 23:28:54


PORTLAND (Reuters) - Loss-making building products company Louisiana-Pacific Corp. announced a radical restructuring on Wednesday to cut debt that included the sale of several businesses and the loss of 4,400 jobs. The company said it would divest 935,000 acres of timberland in three states, along with its lumber and industrial panels operations, in a move to maintain investment grade credit ratings and focus on profitable businesses.

Black Blade: Logging company whittles down work force. Sending off more to the growing "Bone Pile".

Black BladeAndersen: 2,000 Workers to Join Deloitte#7525905/08/02; 23:35:43


CHICAGO (Reuters) - Embattled accounting firm Andersen LLP said on Wednesday about 2,000 of its workers will join rival Deloitte & Touche, as it reshapes itself while facing a criminal charge from its role as auditor for bankrupt energy trader Enron Corp.

Black Blade: That's 2,000 rats jumping off the burning derelict Arthur Andersen.

WaveriderCisco casts a spell on the markets#752675/9/02; 08:07:38

YGMCanuck.....#7526805/09/02; 08:35:42

Your Questions/Comments Yesterday.....

Sorry for not giving more than a babbling answer to your two questions & commentary posed yesterday, but you left me in the dust with all I read. I can see you have an economists mind and might possibly be seeing things from a perspective gained over the last few years while the bubble was inflating. I am no economist nor do I understand the workings of such. This I believe....the Bubble is over!
This is what Greespan has known he had to accomplish for some time w/o putting SM's into crash mode....Gold has "NOT" even begun to have it's run....As for an alternative to the US dollar, well if one percieves that the US dollar is going to loose value whether intentionaly or by circumstance, then one would switch some dollars to PM's, Euro's, Dinars or maybe even Loonies. Just think repatriation on US dollars and how that would change the financial landscape for the US markets and investors....Think of the benefits to US producers with a lower US dollar....As for Banks reversing trends, well one who knows the history of Banks should realize they can be the most inventive and unpredictable of entities....Why they even close their doors and abandon those depositors who freely trust and give them the cash to be in business in the first place....Scotia in Argentina is a good recent example....No Canuck the highest powers want the bubble over, it's only the Fund managers and the Brokers handling the Trillions of Fed Bubble money floating around that want to keep the ship afloat....It ain't going to happen! The Banks can relieve rates all they want, they can issue Bonds til hell freezes over. The die is cast and they cast it with Greed! Remember 'North of 49'and his Banker Executive nieghbour? Remeber the comment he made to N 49? Is it happening already he asked! Well that was 3 years ago and now it is happening....I know a fellow who's father in law was a past CEO for Royal Bank, they both have said the only future was physical Gold/Silver as the system was then and now on the edge of Collapse/Restructuring....I know you've read most all the same info over the years as me, but I truly hope in the interest of a fellow Canadian you've read

PS: Keep that AU/AG out of the so called Safety Deposit Boxes....History always repeats in one form or another....

YGMWaverider.....#7526905/09/02; 08:52:32


You know if I was a wall st paper boy I'd be looking for that co like Cisco on a daily to weekly basis. Knowing that there's Billions of worried and homelss dollars looking for a temporary roost is all one needs to see in the bigger picture. In and out, in and out! Eventually all this cash will find a longer term home in PM's, but not before much of it evaporates back to the airy nothing it was created from in the first place....I'm possibly over simplistic but many are lost in the fog of the system! What people don't know or refuse to acknowledge is the simple fact the system may be on the verge of chrysalis....YGM
Mr GreshamYGM#7527005/09/02; 09:05:13

If I had time to read only one post today (for now, true), and one sentence in it, your "Eventually ..." below essentially sums up everything we've observed, and written here, over the years. On the run...
YGMJPMC & Dinsa#7527105/09/02; 09:08:49

From Mining Web Message Board.....

Comment on Flap over gold derivative "firings"
Date 2002/05/09 Thu

Name Mark McCabe
Email Address This email address is being protected from spambots. You need JavaScript enabled to view it.

I ran the biggest gold hedging book for Chase right up until the merger with JPMorgan.
This is email correspondence from Bob Davis when I asked if Dinsa Mehta resigned. His response is below.
I'm sure u guys can work it out


Mark McCabe.


Hoo yers gannin old son?

I'll reply more thoroughly another time. U still long gold...?....$311.00
trading my son.
I think 'resigned' is not quite the description some would use for the 'D'
man but a lot of changes going thru in Snr management.

Call you soon. know...number one again...

YGMPaul Van Eeden...Gold's Secular Bull Market........#7527205/09/02; 09:25:01

Plus $400.00 p/oz Paul? Well that's a good start! Try 3 TIMES THAT in future years........YGM.
Old YellerSpotlight on the new Fed boys#7527305/09/02; 09:35:34

Boy,they lay it on pretty thick here about Greenspan's "inflation fighting" credentials.

Presided over the the biggest asset inflation binge
in recorded history,yet he's an inflation fighter?

Let's let this thing resolve itself first,the experiment is still ongoing.

Gandalf the White<;-)#7527405/09/02; 10:16:15

OK, SPOT, Time to start that new dance .. The NOON NY HOP !!

YGMVery Worthy Repost.....From one of our Bretheren across the way....#7527505/09/02; 10:33:10

Mahathir-Bush meeting, REAL purpose of meeting is to discuss the GOLD DINAR!
(Gr8AuAgGuy) May 09, 12:03

Just how concerned are the PTB about GOLD and GOLD backed financial instruments?

Isn't a new financial GOLD backed Islamic DINAR being created in Malaysia? IMVHO Mahathir is being summoned to find out how far along they are in creating the GOLD DINAR! Most likely Mahathir is going to be threatened with a quick trip to the wood shed if he doesn't delay or destroy GOLD DINAR plans.

The spin is: "Malaysia gives short shrift to militancy and deviancy and in the case of terrorism, one of our strongest supporters has been Malaysia," he said. (Yeah, Malaysia is a military dictatorship)

During his visit from May 13-15, Mahathir is due to make a landmark visit to the White House to meet Bush and will also hold talks with other top U.S. officials. (top US officials = the ones who can hurt you!)

Electrical and electronics account for over 60 percent of the total goods sold by Malaysia, of which about a fifth ends up in the United States." (The IT and Tech sectors are swirling in the sewage systems).

YGMMahethir Mohamed & Gold Dinar#7527605/09/02; 10:49:08

For a little background...Link
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YGMWatch For the Next Move of Brokerage Houses........#7527805/09/02; 12:19:59

(After they re-position house accounts in PMs.......)

As the PM stocks go higher in value , so too will the Miners IPO's and Stock Offerings go ballistic...As with the Dot Com craze the Brokerage Houses will be tripping over each other in their haste to gain commissions...Public offerings mean $$$$ in company coffers both by sales and participation and that means promotion of same....Hence companies like Morgan et al will be on the bandwagon driven by Goldbugs....Heck they may even hatch another BRE-X ...
....Like I say 'History Repeats' And we're at the party long before the Band...Watch and see if the spin doctors aren't yapping about Gold on CNBC 6 mo from now......YGM.

"GO GOLD, GO PHYSICAL, & GO GATA" & Goin for a Cerveza!

AristotleYGM, you old goat! You're (hypothetically) wealthy and you don't even know it!#7527905/09/02; 12:36:44

Let's invite everybody to have a closer look at your comments from yesterday.

Hey everybody! Have a look at this hypothetical, and tell me what you see.

Do you see a man who is a simple $10 profit away from being a half-millionaire, or do you see a man who is truly wealthy?

Our most worthy Sir YGM said: "if I had 50,000 oz of Au and had a $10.00 profit I'd probably sell and forget all this financial crap and crime perpetrated by scumbag bankers...Kinda get on with what's left of my life @ age 53."

You know I luv ya, so don't take this wrong when I say (hypothetically, of course) "Good God, Man! What are you thinking?!" (Or maybe you were playing devil's advocate? If so, I missed it.)

Profits-schmawfits. No, seriously. In my mind, having the comfort and security of 50,000 ounces of Gold wholly-owned in your possession makes you a VERY wealthy man any way you slice it.

But let's boil it down to dollars, since that seems to be your affliction for the moment. If indeed Gold was just a trading vehicle for you (in this hypothetical,) buying low and selling higher (for $10 profit per ounce) would net you $half-a-mil. Not bad.

But profits or no, and keeping this in dollar terms (because those 50,000 ounces don't seem to impress you very much in their own terms,) that quantity of Gold currently represents $15 million in purchasing power. Most importantly, it's a tangible asset, like your land, that can't be destroyed overnight by a simple national policy change or loss of confidence in the banker's game.

You knew this. <wink>

Gold. Keep you some. --- Aristotle

YGMAristotle.....#7528005/09/02; 12:58:45

)">From one ole Goat to Another :>)

Lets just say there ain't no 50K oz and if there was I'd keep 49 of them and have a little rest in the sunshine....
But as for wealthy, well my health and that of my family is great and I'm keeping what little AU/AG I have set aside as per a simple fellow with simple needs I guess (hypotheticly) I'm wealthy.....Sure could stand a little more time on the Mojos River (Bolivia)tho.....Nothing like seeing that yellow in the Dredge Runs and no Yukon Brrrrrr Cold! One Cerveza and my daydreams head 4000 mi south :))


TownCrierIs this really what the "gold as money" folks want to see more of?#7528105/09/02; 13:14:09

NEW YORK, May 9 (Reuters) - ...Some borrowing of 10-year gold suggested a producer was putting on a long-term hedge to lock in prices for gold reserves, one dealer said.

Bottom line: Gold as property is the better usage. As "property" its supply can't be inflated through the banking system. As "money" it can -- as we see here in this article.


RockYesterdays celebrations todays deliberations#752825/9/02; 14:29:39

Hate to say i said so but I pegged it right on the nose yesterday concerning the stock market. It couldn't even sustain for over a day, what a joke! Cisco's shoulders just arn't big enough to carry the weight of the entire sector. It almost looked like this dying market took one last big gasp of oxygen and appeared for a brief moment that it was going to get back up and fight but then it just fell back over like a dying man on an EKG machine that just went flat line.

Meanwhile on concerning the ME, the media is now reporting how Arafat said no more bombing in his arabic tongue, what wonderful great news did you hear that knights and ladies? I'm surprised the markets didn't soar to new heights since there don't appear to be no imminent sign of war now that Arafat made his grand speech. I think we can all sleep better now with those comforting words from the former pultzer prize winner of the PLO.



USAGOLDSierra Madre. . ."Brazil's Cardoso slams behaviour of investors. . ."///////////// ALL: Old Brazilian Gold Coins to be Offered#752835/9/02; 15:05:19

What do you think of the theory making the rounds in the gold market that we may see the Domino Effect in Latin America -- Argentina, then Brazil, then Mexico? Just saw the reports about Cardozo complaining about Brazilian debt being downgraded.

"Morgan Stanley, Merrill Lynch and ABN Amro advised clients to cut Brazilian debt in their portfolios. . ."

All: Soon as Randy get's the backroom work completed we will be offering some one-half ounce Brazilian coins from the 1890s. These are beautiful coins from Brazi's Republican period. There are only a handful available and we have never had anything like this before. I would suggest that anyone who bought the Uruguayan 5 Peso coins and the Argentinos, add these while you can. We will be offering sets of six coins, I believe it is, various dates in the 1890s. Some are scarcer than others but we will offer them all at the same price. The sets will carry a slight discount/encouragement for those with a collector bent who'd like to have all the dates we are offering. We will only have 20 of those so I suggest you act quickly. I think we all know by know how these things go. If its popular, it might only last a few days. Beyond the 20 sets (first-come, first served) you will be order from the hoard whatever date(s) you wish. I think you are going to like this offer.

So get ready. . . . .

Randy is working diligently behind the scenes to make ready for this interesting offer.

slingshotSiege Engine#752845/9/02; 15:38:14

Time Is Running Out.

The Lord of the Castle has burned the Midnight Oil with his Knights and has failed to comprise a viable battle plan.
All of strategies revolved in only the defense of his citidel and with the size of his garrison provided very little offensive capabilities.
The trebuchet has been effective as it relentlessly batters the wall below the tower.
It is morning and the first light of day begins to shine into the room and replaces the candlelight upon his maps.
Suddenly, there is an alarm for all to man the walls.
There is more excitement. As he ascends the stairs he can hear the comments of his men and he knowns fear when he hears it.

He looks out beyond the field and into the rising sun.
For a momment he is blinded but soon sees the open green field below and what now stands just in front of the treeline far away.

The Goldbugs have formed ranks. Three and four deep and the full lenght of the treeline. They are armed with shields and swords. Bows and maces. Standing shoulder to shoulder.
They begin to bang their shields and shout.

The Lord of the castle turns and looks into the face of his Knight standing next to him.

Sierra Madre"Domino effect" to affect Brazil and Mexico, after Argentina...#752855/9/02; 15:50:11

It seems to me that Mexico is in a special situation at the moment - oil is strong and that is a very important factor for the Mexican economy; so that would help contain the "contagion". Also, Mexico is next door to the U.S. and is being wooed by the Establishment. Everything is cozy and Mexicans are good boys, they do their homework and behave themselves. Good marks for them, good credit ratings for the nice little boys. All this is preparation for takeover, IMHO.

Argentina is left twisting in the wind. It's a matter of "triage". You know, when there is an accident, the medics look over the wounded and they sort them into groups: the dying are just left to die. No use wasting time and resources on them.

Scotiabank leaving Argentina, just closed its doors and said goodbye! This is without precedent, so far as I can see. These people really need silver desperately! But, not a single brain there to suggest it.

My wife says the people there are broken; not only broke, but broken. A human tragedy.

Brazil might cave in. When governments start blaming investors etc. you just know that something is going to happen. Of course, with paper money, what else but ANOTHER collapse? When will people learn??


kludge@Rock#752865/9/02; 16:03:31

Yes, it's a sad fact too that the price of gold tends to flourish in bad times. Peace and prosperity are bearish for gold. This, IMO, explains gold's recent rally. Sadly, it'll probably go higher once Israel responds to the latest suicide bombers. I was hoping to keep adding to the collection at less than $300 delivered - but it seems pretty obvious that many will lose much before we get back to those days again.
Golden Bearkludge (msg#: 75286)#752875/9/02; 16:19:24

"Peace and prosperity are bearish for gold."

Greetings Kludge,

the prosperity in your quote is illusory, built by decades of inflation of the money supply of countries around the world, fooling their populations that they are becoming wealthier year over year...until BAM! - Another Argentina occurs, leaving most with very little.

Nothing is bearish for the value of gold bullion, only paper gold, which is also part of the grand illusion.


BelgianThe Gold-Conglomerate and the TG's Architects.....#752885/9/02; 16:26:56

Got inspired by the Arctifox posting (Thanks Sir) on James E. Sinclair (Mister Gold) and Chris Thompson's (WGC) statements as outgoing CEO of Gold Fields :
The Gold conglomerate is suspecting the existance of Architects (builders) that will use/incorporate Gold as a building material, with new applications, into the coming *new* currency construction ! Chris Thompson wants to make it possible for *INVESTORS* to buy and hold (!!!) Physical Gold. You don't decide such a policy lightly without some assurance (probability) that it will be (remain) succesfull well into ther future. It is some evidence for a growing concensus on Gold's future, without to much rear-mirror looking. Miners with their paper-shares of risky underground gold want to create another kind of paper, representing more safe (?) aboveground refined Gold.
A first step to connect "Funds" (pools) more directly to liquid Physical as an *INVESTMENT* and not as a strictly currency hedging (speculative) instrument.

...WE NEED TO MAKE IT (GOLD) POSSIBLE FOR THEM (investment universe) TO OWN GOLD !!! (Thompson)

An old timer poster once said that Gold was/is NOT an *Investment* ! I still don't agree with it, and probably never will. Thompson seems to share that *investment* argument and will most probably succeed in bringing the message across. He (they) must feel the backing of the Architects !? And all this while the precious is so heavy for its humble with me Aristotle.

Canuck@ YGM #752895/9/02; 16:55:00

Dear Sir,

I also wish to apologize to you (and anyone else reading my distorted rant yesterday).

I almost went beserk this morning and swung a load into tech stocks. I shook my head, walked from the PC and went to work. The power of sidelined money ('cash') at this moment in time is scarey. We saw a hint of the mountain of cash yesterday. Where (and when) will this money be deployed?

I don't remember North of 49's neighbour, please remind me. Can you elaborate on the R.B CEO?


Mr GreshamLeSin#752905/9/02; 17:10:12

The Vaughn piece was great this morning -- good catch! All about the contending PTBs and how Barrick is set up to take the fall, while Anglogold goes on to carry the flag for the winning factions -- this is how these things grind out in other industries (and economic wars), so it rings true for the gold industry too. While our fortunes ride as the froth on the waves thrown out by these big tankers steaming by...
Mr GreshamAntal Fekete: Revisionist View of the Great Depression#752915/9/02; 17:24:29

A must read. Could start up discussion of fundamental fundamentals, "like in the old days" around here. This guy is on to something -- I wonder if there's a critical response to his thoughts, which I have not read elsewhere. The implications for the present are, of course, for a Greater Depression as a reflection of a greater destruction of capital.

I'm halfway through; all I can think of off the top of my head is, if you have an annihilation of productive capital, you are left only with a certain collection of tangible assets, an uncertain ownership and debt structure, and a question about how to regain productivity.

An "activist" government is likely to repeat Roosevelt's errors, and keep things muffled. End up with a "mafia economy" like Russia's in the 90's. Sure would like to hear what is developing out of that.

YGMCanuck....#752925/9/02; 17:28:18

Hi...Hey no apol'gs needed for anyone I can see! Sidelined money? Well others here (everyone) besides me could answer that better than I, but I feel in my gut that it's jumping in and out of anything that has a chance of even small moves. If the volume is big then they can shift out quickly. Hence the distortion we see when the SM's go up one day and down the next! Like a rabbit running from a fox and every hole he jumps down is crowded. I think smart money is also always patient money and has been moving to PMs for awhile and they've got the same befefits as those who tagged on the coat-tails of Gold Manipulation scam. That is they know the Cabal will dump all over the longs and shake out the weak hands repeatedly. Every time Gold & PM stocks move up they get the velvet hammmer and somebody gets cheap entry again...Just a vicious cycle! As for the N 49 over the fence conversation with the Banker exec nieghbour...Well that was heresay but from a rather good source and seemed very relevant and real at the time....When
North 49 asked him again days later to elaborate on the comment "Oh No is it happening already" he declined. This comment was made because Gold was having a run & GATA was just getting in full swing, and the Banker seemed to sense a calamity was going to happen and he'd known it would someday come.... Rather like the conversations I've had with the son in law of a long past CEO of R Bank Canada. He said his father in law has coached him for years to invest in PM's for the long haul and keep very little in Banks and paper....He told him that GATA was dead correct in their assumptions with respect to Gold Manipulation and the Bankers knew at some point the cat would be out of the bag.
I suggest you read "The Sting" (Mr Johnson's Letter to his son) if you can find it in the Gold-Eagle archives........
PS: I think my R B guy is in the know as he deals in 100's of tons of Gold....All I got was advice :>))

YGMCanuck....The Sting.#752935/9/02; 17:38:46

BTW...this letter has probably caused more controversy than most any article I've read.....Not withstanding Reg Howes and GATA papers......YGM.
YGM"NEW"....Who Controls The Federal Reserve?...Part 1.#7529405/09/02; 18:02:31


Now that we know the Federal Reserve is a privately owned, for-profit corporation, a natural question would be: who OWNS this company? Peter Kershaw provides the answer in "Economic Solutions" where he lists the ten primary shareholders in the Federal Reserve banking system.

1) The Rothschild Family - London 2) The Rothschild Family - Berlin 3) The Lazard Brothers - Paris 4) Israel Seiff - Italy 5) Kuhn-Loeb Company - Germany 6) The Warburgs - Amsterdam 7) The Warburgs - Hamburg 8) Lehman Brothers - New York 9) Goldman & Sachs - New York 10) The Rockefeller Family - New York

Now I don't know about you, but something is terribly wrong with this situation. Namely, don't we live in AMERICA? If so, why are seven of the top ten stockholders located in FOREIGN countries? That's 70%! To further convey how screwed-up this system is, Jim Marrs provides the following data in his phenomenal book, "Rule By Secrecy." He says that the Federal Reserve Bank of New York, which undeniably controls the other eleven Federal Reserve branches, is essentially controlled by two financial institutions:

1) Chase-Manhattan (controlled by the Rockefellers) - 6,389,445 shares - 32.3%
2) Citbank - 4,051,851 shares - 20.5%

Thus, these two entities control nearly 53% of the New York Federal Reserve Bank.



May 9, 2002 -- SYNTHETIC leases come and they go, but they apparently don't leave a trace. In the world of pro forma earnings - which I believe is Latin for "companies can report whatever they want" - nothing can come between what a company says and what Wall Street wants to hear.

Black Blade: I brought up Cisco's "synthetic lease" issue before and I had thought about again when Cisco brought up their earnings "Home Run", but then I decided why should I be the "turd in the punch bowl". I also thought about the non-expensing of options. Whatever. They are not alone. Microsoft, Novell, and Oracle also has engaged in this shell game. But hey, who cares about "off-the-books" accounting anyway – just ask Enron.

Black BladeU.S. Economy: Number of Workers on Unemployment Rolls Swell#7529605/09/02; 19:25:11


Washington, May 9 (Bloomberg) -- U.S. worker claims for jobless benefits fell less than expected last week and the number of Americans collecting aid rose to a 19-year high, suggesting the labor market isn't improving as the economy recovers from recession.

The unemployment rate, which rose to 6 percent in April, a 7 1/2-year high, may climb as high as 6.5 percent in coming months as companies are slow to hire, Rupkey said. A labor market that shows few signs of improving helps explain why Federal Reserve policy makers this week left the overnight bank lending rate at a 40-year low of 1.75 percent, where it's been since December.

Fed Chairman Alan Greenspan said job growth is critical to the recovery because consumer spending accounts for two-thirds of the economy. ``Perhaps most central to the outlook for consumer spending will be developments in the labor market,'' he told Congress last month.

Black Blade: Aside from there being no economic recovery, the "Bone Pile" is at recession levels. 19 years ago (1983) the US was mired in a very deep recession. Then too, Pres. Reagan extended unemployment benefits. The point that should be foremost in every ones minds is that today the data is massaged with various filters (such as "seasonality") that are a government scam designed to hide the God awful truth. The US propaganda arm – the Bureau of Labor Statistics engages in this same activity in calculating the CPI and PPI, among other government statistics. The BLS could put Arthur Andersen to shame. Just wait until the recently announced layoffs begin to occur.

YGMCanuck....All...One Last Link & I'll Butt Out....#7529705/09/02; 19:30:04

This is a keeper......"The Greatest Story Never Told"

Winston Churchill and the Crash of 1929.....

The more this stuff gets around the more folks will own Gold and Silver....The Banker Cabal hates transparency and the Web puts the light of day on anyones screen that takes the time to learn the truth....YGM

Black BladeContinuing claims at 19-year high - "Bone Pile" Files#7529805/09/02; 19:32:13

Import prices jump as dollar weakens, oil surges


WASHINGTON (CBS.MW) - The number of American workers receiving state unemployment benefits rose by 61,000 to a 19-year high of 3.8 million in recent weeks, the Labor Department said Thursday.

Black Blade: A song for the BLS – "No Where To Run, No Where To Hide".

YGMDevvy Kidd Article Index#7529905/09/02; 19:42:29

Hope somebody reads this stuff. Some here have for years but it should always be shown anew, for those who have not...YGM.
Black BladeIBM workers fear the axe #7530005/09/02; 19:43:36

Employees union says layoffs expected to amount to as much as 10% of U.S. work force.


NEW YORK (CNN/Money) - Workers at International Business Machines Corp. are bracing for layoffs that could affect as much as 10 percent of the company's U.S. work force, according to a representative of an IBM employees union. "People are getting very nervous inside IBM," said Lee Conrad, national coordinator for the Alliance@IBM, an affiliate of the Communications Workers of America representing about 4,000 IBM employees. "There's a real sense of foreboding," Conrad said.

Conrad said some IBM divisions, including its server and microelectronics divisions, already have begun quietly telling some employees to expect layoffs starting as early as next week. "We expect announcements to start coming next week and continuing for the next three weeks after that," Conrad said. "We're hearing anything up to about 10 percent across the board." Roughly 160,000 of IBM's global work force is based in the U.S.

Black Blade: We are looking at perhaps 16,000 marched off to the growing "Bone Pile". I brought this possibility up about IBM a few days ago. It finally has come. The earnings picture for IBM is – shall I say it? – "GRIM"

Mr GreshamYGM == The Sting#7530105/09/02; 19:45:38

I remember that one from back when we were first getting started -- makes more sense now to me -- sounds like someone else we know, who may even know some of the same people. Far-fetched as a plan to be kept secret, but maybe the vanity of some people just makes it "unthinkable" and easy to "hide" even if the action is right there under their noses.

Others know they can switch sides ("Ah, yes; our chalet at Gstaad!") when they need to; others may believe they were giving Americans a better life for awhile -- who can argue with "Good Times"? "It's Morning in America."

goldquestFrantic Friday Approching#7530205/09/02; 19:54:14

Gaza Strip errupts, Dow and Naz loses all of their gains made Wed.
Gold crawls out of the foxhole and continues to march. Gold closes at $316.00 + - .50

Black BladeBush's master oil plan#7530305/09/02; 20:09:15


With so many new international crises erupting every day, it is hard to detect any clear forward direction to American U.S. foreign policy. At times, it appears that providing a response to the latest upheaval is about all that Washington can accomplish. But beneath the surface of day-to-day crisis management, one can see signs of an overarching plan for U.S. policy: a strategy of global oil acquisition.

In recent weeks, the Bush administration has taken bold steps to implement this strategy in several far-flung regions of the world. In the Caspian Sea basin — said to harbor the second biggest reservoir of untapped petroleum after the Persian Gulf — the United States is building new military bases and providing training to local defense forces. In Colombia, U.S.-equipped government forces will soon be guarding the Occidental Petroleum Company's Cano Limon oil pipeline. And in Venezuela — America's third largest supplier of oil — U.S. embassy personnel reportedly met with leaders of an abortive coup against President Hugo Chavez.

But it is also true that the areas that are garnering the greatest degree of attention from Washington — the Middle East, the Caspian Sea basin, and the Andean region — are also areas that figure prominently in the administration's long-term energy strategy. The aim of this strategy is simple: to procure as much of the world's oil for ravenous U.S. markets as possible. With domestic U.S. production facing progressive decline and national consumption rising with every passing day, the United States must obtain more and more of its oil from abroad.

Black Blade: The major point is that the US is running out of "cheap energy" that is easy to get and abundant in supply. The need for energy to fuel the US economy is critical and as described in the article we will use military force at all costs to get it. Without an adequate supply of energy, the US is just another Third World country.

NomadTax Collections Down and Down and Down ...#7530405/09/02; 20:09:16

ASHINGTON, May 9 — The Congressional Budget Office said today that tax receipts through April were $75 billion below its projections, insuring that the federal budget deficit this year will be far bigger than anticipated.

Confirming preliminary figures made public by government officials several weeks ago, the budget office said receipts were $60 billion lower than projected just in April, the month in which revenues typically surge as individuals file their income tax returns.

The shortfall reflected the downturn in the economy last year, especially after the Sept. 11 terrorist attacks.

Economists said the problem appeared to stem in particular from the lackluster stock market, which generated little in the way of capital gains and depressed compensation among people who are paid partly with stock options.

Before the shortfall became apparent, the budget office had been projecting a deficit of $46 billion for the fiscal year that ends Sept. 30. A $75 billion shortfall would bring the deficit to $121 billion. The total federal budget this year is about $2.1 trillion.

But the deficit is likely to be even bigger, perhaps by as much as $150 billion, by the time the government closes its books on the year, economists said.

EagleOneFifty seven years ago#7530505/09/02; 21:02:31

Do any of our world-wide posters remember the anniversary of V-E day? I propose that few here, if any, would be collecting gold if Nazi Germany had won the war and if the United States had not rebuilt Europe through the Marshall Plan. US bashers sometime need to be reminded to be thankful for their very existance. End of rant. I will not comment further or reply to dissenters.
YGMMr. Gresham...#7530605/09/02; 21:06:47

Yes I agree wholeheartedly, it does seem much more relative with what we now see going on ie: Japan etc. I had to re-read myself as it's been a couple years since last read.
Yes Vanity and narrow mindedness make their mission much too easy. It does sound like a couple fellows we know :>)
It sure reinforced my belief and perception of other info I've rec'd.....It is still not easy to believe or comprehend even after all these years of reinforcement at many levels.....As FOA likes to say..."Interesting Times We Live In, Yes"....We trudge on & "PERSEVERE" together!

YGMEagleOne...#7530705/09/02; 21:18:44

Speaking for myself only...

I have the greatest respect for the men & women of the US armed forces....I learned from my father the reality of what the USA stood for and what a world we'd have had if not for the tenacity, courage and lives lost by them. I think one must not confuse criticism of US monetary policy with our love of the greatest free nation the world has ever seen....I'll stand up for an honest American anyday, anywhere!...Regards & Good to see you here...You remind me of an old friend at Gold Eagle...(goArmy)....YGM.
JCTexYGM (05/09/02; 18:02:31MT - msg#: 75294)#7530805/09/02; 21:48:10

I won't tell anybody what else is on that site, if you won't. Michael might jerk our privileges, here, if he finds out.

At best, he might make us wear tinfoil helmets when we post here.

If the tax-paying public ever gets off its dead bu## and figures this Federal Reserve thing out, they will revolt. I hope I live long enough to see it. It's deserved.

Black BladeMay Department Stores to Lay Off 1,200 Kaufmann's Employees#7530905/09/02; 22:15:27

PITTSBURGH -- May Department Stores Co . (MAY) will lay off 1,200 employees at its Kaufmann's stores as part of the recent consolidation of Kaufmann's and Filene's stores.

Black Blade: The ones who are left will be more "productive". I guess next month's productivity data will improve. 1,200 off to the growing "Bone Pile".

PizzConfirmation of the coming Storm#7531005/09/02; 22:18:19

Or when the short term hype over the last 9 month causes more pain and suffering than prudence, truth, and intelligent management could have done a meer year ago.

A story:

A short 9 months ago(prior to 911) a new and somewhat controversial CFO sat in board meeting and advised the stockholders that in his opinion, the 20 year expansion that their industry had been priviledged to participate within, was coming to an end.

The advice given was to consolidate, shore up cash resources, cut marketing expenses, and forego the expansion plans currently on the agenda. The major stockholders were all successful marketing types, more worried about their tax bite resulting from an excessive amount of short term debt accumulated over the past 20 years that was returning a compounded 5% annual return. The businesses had been financed with short term debt rather than capital, and all profits had been rolled into more entities, and more short term debt, and more profits up to that time.

Needless to say, the standard media/economic hype we (still)listen to everyday was thrown back at this CFO, and being new, his career at that time was challenged to say the least, and his advice was treated as as something less than the little boy who cried "wolf".

As September rolled around, business was flat to declining, but with The FED having lowered interest rates aggressivly all year, the turnaround was just around the corner (right!). The stockholders knew cash flow had deterioriated, but not to worry, the FED induced recovery was just around the corner. Besides, even though sales were down, interest on the short term debt was so low, that inventories were being increased in anticipation of the boom to come.

Then 911. No problem the stockholders said, the FED is taking care of us, and it's short term. Besides, so what if we go to war, war time economies are bullish - where private industry slows, the government will pick up the pace. What? Stop the expansion and take a loss as the CFO recommends? If we do that, we won't be able to meet our current expectations for 2003. What, we have a cash flow problem? Don't worry, it's there if we need it. What? You say we need capital rather than more short term debt? We haven't for the last 20 years, you'll just have to get along with what you have and we can always borrow more.

Well, now it's a short 6 months later, and the stockholders are now looking at their cash position, their exponetially increasing losses, a refinancing program that took 3 months to put together, and the cash generated from the refinance which will be burned within the next four months.

Their current cure? Cut administrative expense 30% which will have about the same net effect as losing 99 dollars instead of $100. But the good news? The CFO will not be able to function, and the financial reporting will deteriorate to the point that they will be able to plug their own numbers into the financial statements in a vain attempt to keep their financing lines intact (with a little Enron type accounting).

Think the above is fiction and it's happening world wide? Think again. I'm as bout as close to this CFO as you can possibly get, all I have to do is look in the mirror.


PizzCorrection to last post#7531105/09/02; 22:22:54

Insert "not" before "happening" in the last paragraph.


Mr GreshamPizz!!!#7531205/09/02; 22:36:06

YOU'RE the guy! So much of what you arrive at comes from common-sense (and personal experience in) accounting -- look at the Antal Fekete link and see if he's on track with the "Law of Assets" and "Law of Liabilities", if there IS a silent plundering of productive assets by balance sheet transfers as interest rates fall (artificially via Fed monetizing, and gold prohibition or inhibition)...
HoratioBarrick & Anglo#7531305/09/02; 22:47:17

I posted here about a year ago that hedgeing was a plot by S.A.mines to get assets out of S.Africa.The idea was to borrow gold from central banks ,give them a mortgage on the mines assets.Then sell the borrowed gold and transfer the cash out of the country to avoid confiscation from the Marxist S.African politicans.The confiscators would get the mines alright,but 10 years of future production would belong to the bank!A brilliant ploy!!My theory was when they got all they could get ,hedging would be over!!
Here's the final part of the plot....Barrick merges with Anglo,Anglo transfers real assets to Canada...Barrick transfers hedges to S.Africa and spins off that division back to S.Africa for the final coup ...The time is near....

WaveriderJapan's rating wars: Whose default is it? #7531405/09/02; 22:51:53

"It's time to give Japan a break on falling sovereign ratings - like maybe another decade, to be fair - and give the lousy economy opportunity to right itself. And to really square things, just roll the ratings back up to AAA, where the world's second largest (and least likely to default) economy belongs; not surfing rat-bottom in the pile of Group of Seven industrial countries.

That is just about the gist of the message the Japanese government sent in what appear to be unprecedented letters to the top three international rating agencies - Standard & Poor's, Moody's Investors Service and Fitch Ratings - just before Japan's Golden Week holidays began in late April."

Waverider: A good article on the consequences of another downgrade of Japanese government bonds. Moody's is expected to downgrade to single-A as early as next week, putting Japan on the same level as Hungary, Malaysia and Botswana.

PizzMr. Gresham#7531505/09/02; 23:02:46

Re: The Fekete link.

I've read this before, it's extremely long, confusing, and has the tendencies to mix a lot of apples and oranges together. It has some merit, but I really question the practicality of the message. I'll try to give it some thought this weekend and summarize, but keep in mind, it may be an accountant(s) that finally bring our current financial world to it's end, but it will only be by showing that the emporer really has no clothes. (Typing and spelling are really a _____ when your mad and a few scotches into the wind) Cash is what kills commerce, and the only reason Enron failed was their ability to keep borrowing was severly curtailed.

I'm probably rambling, so I better read some light stuff and get off the keyboard.


YGMJCTex (05/09/02; 21:48:10MT - msg#: 75308)#7531605/09/02; 23:05:40

I Still Have my Tin Hat.....

Curious @ GE Forum gave me one years ago....I wear it when I go to various sites looking for Gold among Pyrites...
(grin) It keeps the Alien Bankers from reading my mind and
deflects brain pulse weapons quite well....Tinfoil works also, but hammered Gold is best.....YGM :>)

Mr GreshamPizz#753185/10/02; 00:32:45

Ok, well, I hadn't guessed if you had -- this seems a new version, but contains the same "cause of Depression" from a month or two ago.

The stringent requirement that all assets be booked at least favorable of cost or market, as with liabilities does give room for some legit fudging methinks, as you're allowing for a dissolution that will likely not happen before many profitable years.

The idea of lower rates raising the liability of existing debt -- only if you have to buy it back at market in the interim(?) does it hurt -- you redeem at maturity at face, or some are even callable. Or they re-fi, as done today. Performing debt, never expected in repayment.

But the idea of giving the bond speculators a run with the national checkbook, new ground, no?

More thoughts, but I'm off to Z-land, too...

Black BladeGold Higher, Oil Higher, and USD Getting Hammered#753195/10/02; 03:05:26

Gold is higher this morning (btw - look at the PM lease rates), oil is recovering toward $28/bbl, and the USD is getting hammered while all major currencies are rising.

Also in the news - Boeing is under investigation for "cooking the books". Yep - another accounting scandal is breaking this morning.

- Black Blade

Black BladeLease Rates#753205/10/02; 03:10:08

PM Lease rates are all up across the board. Pt is still at high levels - mostly due to there being very little delivery out of Russia, depleted Russian stockpiles and some occasional labor problems in SA.

- Black Blade

Black BladeRed Around The World#753215/10/02; 03:16:11

Markets everywhere are in the red. US futures are mixed so far. Actually, a slightly positive market futures at the open has been negative for the day. There is no positive news to trade on so far and the outlook for the US economy is "GRIM".

As always - get outta debt, get Gold and Silver portfolio insurance, get enough cash stash for several months expenses, and start a nonperishable food and basic goods program. In short - prepare for the worst and hope for the best.

- Black Blade

OperativeUS Treasury Secretary Heads to Africa#753225/10/02; 03:19:18

Secretary is "concerned" about poverty in the region.
This article is a prime example of government doublespeak.
Note to all in the region: Run, Hide your GOLD!

Black BladeIBM to Lay Off Up to 8,000#753235/10/02; 03:22:14


NEW YORK (Reuters) - IBM Inc. plans to lay off as many as 8,000 workers, or 2.5 percent of its worldwide staff, as the leading computer maker battles a slump in technology spending, the Wall Street Journal reported in its online edition on Friday.

Black Blade: The "Bone Pile" grows.

Also, just out in the news. The mailbox bomber said that see was trying to make a "smiley face" on the map (bombing pattern). There you go people – and you thought they only come out at night.

OperativeCan't Wait To See The Wall Street Spinmiesters Dance To This#753245/10/02; 03:24:12


(Headliner from Drudge this AM)

Black BladeDollar Struggles Again Pre-Wall Street#753255/10/02; 03:33:56

By Natsuko Waki

LONDON (Reuters) - The dollar came back under pressure across the board on Friday after a fall on Wall Street, although its losses against the yen were held in check by talk of an imminent credit rating downgrade for Japan.

Black Blade: There has been a rumor floating around the last couple of weeks that Japanese debt will be downgraded a couple of notches. Some speculation is that Japanese debt is no better than "Junk". Gold buying should still be strong and any significant downgrade will likely stir up more Japanese Gold buying.

OperativeNow Here is Something you don't often see...#753265/10/02; 03:56:07

All Regional Indices Bleeding RED. Looks like another Malox day for the street.
LeSinRussian Oil Most Tempting - Cheap In The Beginning - Then Bang! The Bear Will Demand Euro Payment#753275/10/02; 05:54:28

Russia's new role: "Stable Source" for Western World's Oil
Ocean pipeline plan "for gas to Japan"

by Michael Stedman
issued on 05.07.2002 (MST)

[printable version]

Energy ministers of the G8 industrial nations have confirmed "Russia's new role as a major source of stable energy for Western economies in the future," a report said yesterday (Monday) after they met in Detroit.

Russia's envoy, Energy Minister Igor Yusufov, used the forum to confirm the state was keen and set to see the industry's activities upgraded, Moscow analysts noted in a report saying the minister said the government sought to encourage Western investment in the sector to boost production.

This would also help develop export markets for crude supplies as well as higher-earning value-added oil products, he was quoted as saying. Yusufov's comments give further substance to remarks already on record from the minister that Russia sought expanded refining capacity to produce multiple products sheltering it from swings in an unpredictable market for crude.

This has already led to reportedly dramatic increases in fuel oil, diesel and gasoline exports to European markets.

A research note on the Detroit meeting from Moscow investment bank Troika Dialog quoted reports saying Yusufov believed the United States could become a "partner allocating considerable financing to the energy sector of the Russian economy."

Analysts also noted comments that the minister had called on the European Union to increase its own investment spending in the Russian energy sector to ensure growth and stability of supply.

Several recent reports have referred to new moves under way to develop Russia's oil industry, pursuing what observers believe is its goal of becoming the global industry's giant, surpassing even Saudi Arabia's paramount position.

Russia's February move to establish a working group including leaders of the country's top oil companies has geared up the drive to address structural problems, according to observers from respected U.S. analytical think-tank

Acquisitions, infrastructure upgrades and new field development in northwest Russia, Siberia, Central Asia, the Balkans and Central Europe were powering the push ahead, they said.

Further news now from the Detroit meeting said that to cut transportation costs, Russia had plans to build new deepwater terminals and ports on the shores of the northerly Barents Sea.

And reports attributed to the newspaper Nihon Keizai Shimbun added that Russia would ask Japan to join it in a major natural gas pipeline project linking Japan and a Russian city.

The plan was unveiled, Troika Dialog said, when the Russian energy minister met Japanese Economics Minister Takeo Hiranuma in Detroit. The project is said to entail transporting natural gas from Nakhodka, facing the Sea of Japan, by way of sea-floor pipelines.

Other moves analyzed by Stratfor a few days ago said Russia and Croatia had now agreed to link up two of their oil transport networks, increasing Russian oil companies' export capacity and boosting Russia's economic presence in the Balkans.

The two state-owned transport firms Transneft and JANAF plan to join together their Druzhba and Adria networks in what was seen as a multiple coup for Moscow, a commentary said.

This would mean an almost wholesale switch for Bosnia, Croatia, Slovenia and Yugoslavia from Middle Eastern to Russian oil supplies. Total demand of around 250,000 barrels a day was set to increase quickly as the states recovered from the Balkan wars and lined up for European Union membership, the analysts said.

Russian producers would win permanent access to the Adriatic Sea through the Croatian port of Omisalj, a deepwater harbour capable of supporting tankers larger than those at anchor in any Russian port.

"Washington has dropped its quiet opposition to Russian export routes, opening a number of doors to Russian companies," Stratfor observed.

"Since Russian oil can compete on the U.S. market only when delivered in supertanker-sized quantities, the Adria-Druzhba linkage raises the possibility of Russia directly supplying the United States," its commentary said.

RobotGuyMiddle East and Stock Market Cheerleaders.#753285/10/02; 07:17:28

I wonder wonder wonder, what we're going to blame today's wall street calamities on. There is no longer a standoff at the church of the nativity, no surprise bombings anywhere, no surprising negative economic tragedies,.... What are the cheerleaders going to blame today on, if there's no global catastrophe? Will we finally accept that we are indeed not in a recovering market? In the 'positive' news, we have had record sign-ups for internet stock trading companies for the month of April. Great, more suckers for the sucker rallies! Poor souls. Looks like we might see some yellow action today.

Surfs up!!


RockRobotguy#753295/10/02; 07:33:48

What Excuse for the Market's decline with no major news!

You forgot one Robotguy, anthrax at the Fed, oh but those were false positives. After all we don't want the stock market to react too violently.


RockMore Lies Revealed on CNBC, home of the Wall Street Cheerleaders#753305/10/02; 07:41:17

Clip: Special Report
Cramer's Troubles Could Get Worse
Victoria Murphy, 05.09.02, 2:33 PM ET

NEW YORK - Loudmouth CNBC commentator James Cramer has one more reason to yell: His nemesis, disgruntled former employee Nicholas Maier, is turning out to be a bigger thorn in Cramer's side than we predicted.

In April, broke the news that Maier, 33, who used to be a trader at Cramer's hedge fund, had been feeding information to the U.S. Securities & Exchange Commission about Cramer & Co.'s allocations of initial public offerings from Goldman Sachs (nyse: GS - news - people ). The SEC is conducting an investigation into the way investment banks apportioned IPO shares to clients during the height of the bull market.

Now it turns out that Maier may have also persuaded the office of the U.S. attorney for the eastern district of New York to look into Cramer's trading. Maier boasts that, in March, he spoke with the government and handed over the transcript of his taped interview with another former trader at the hedge fund. The interview was conducted as part of his research for his book, Trading With The Enemy, a tell-all about Maier's days at the raucous Cramer & Co. trading desk.

Cramer's lawyer, Eric Seiler, says that his client "is not under investigation by any U.S. attorney on any subject." Linda Lacewell, an assistant U.S. attorney, would not comment either way as to the possibility of an investigation into Cramer. But the trader in the transcript, who spoke on the condition of anonymity, has confirmed that he has since been interviewed by lawyers in the U.S. attorney's office.

The transcript includes some eyebrow-raising anecdotes relating to Cramer's cozy relationship with CNBC television personalities Maria Bartiromo, David Faber and Mark Haines. Since leaving his hedge fund, Cramer has joined the network as co-host of the nightly CNBC yakfest, America Now. He also frequently cavorts with Haines and Faber on its morning show, Squawk Box.

In some instances, according to the taped interview, Cramer would call the anchors with a possible news lead on a company after he had already established a position in that firm. Says the trader in the taped interview: "Before he'd call Maria maybe we'd buy five or ten thousand shares of something. You know, the name that he was about to mention. He would position the firm so that when it did come out, it would be the positive or negative short or long, depending on, you know, what information he gave."

The CNBC relationship allegedly worked both ways, with Cramer making trades based on information he gleaned from the on-air talent. One tale that came up during the trader's interview with assistant U.S. attorneys involved profit made on Salomon Inc. just before an announcement that the investment bank was being bought by Travelers Group in September 1997. The trader recalls Cramer saying, "That's one for Faber."

A CNBC spokeswoman denies any wrongdoing and says the network has not been contacted by any legal authorities and has no knowledge of any investigation into the network or its anchors' actions. "CNBC has the highest journalistic standards in the business. David Faber, Maria Bartiromo and Mark Haines have the utmost integrity and any allegations otherwise are completely without merit," says Amy Zelvin.

Cramer was too busy to be interviewed by today. In an earlier e-mail, he dismissed Maier's incessant attacks this way: "As someone who had a great record that was made from years of working harder than just about everyone, I find the whole thing insulting."

Maier's decision to go public with this latest tidbit may have much to do with his need to bolster his own credibility. His book came under fire when its publisher, HarperCollins, acknowledged that three pages contained false assertions that Cramer traded on inside information about hard drive maker Western Digital. "I regret the error, but it was simply that we were investigated regarding a different stock," says Maier. He also concedes that his book has sold poorly, a fate that is unlikely to befall the glib and popular magazine writer who used to be his boss. This week Cramer is launching a tour promoting Confessions of a Street Addict, his confessional about what went wrong at his once-highflying Web publisher

Cheers fellow goldbugs are long awaited days are here!


RobotGuyBlack Blade provided us with this link some time ago#753315/10/02; 07:43:33

Looks like there's quite a bit of red out there, that's probably what we're going to use for today's excuse.


RobotGuyHey Rock! Thank-you for that clipping, it strengthens how I feel about cheerleaders. #753325/10/02; 07:48:12

R PowellOptions expiration day#753335/10/02; 07:58:20

Today is expiration day for the June gold and silver options. In the past there has been a recurring pattern of metals' prices gravitating towards prices reflecting multiples of $5.00 such as 280, 285, 290, 300 etc. This may have been co-incidence or it may have been very short term manipulation by the big money options' writers.
Perhaps, as many are now saying, if the gold market has been "freed" we'll no longer see this pattern. Will POG close today near $310 or even $305 to minimize call option payouts? How have the shorts been unwinding hedges? Have they simply bought back that which was sold or have they limited or offset loses with long calls? Have the miners and other big shorts (bullion bankers) been buying calls so that POG close on expiration day no longer concerns them?
The last few months have repeatedly amazed me with POG bouncing up quickly after every downturn. This has been a joy to behold. There appears to be tremendous strength just under whatever level POG closes at. New longs or fewer shorts? The open interest increase would indicate new long positions. If this trend continues the weak investment shorts will disappear leaving only those who actually possess physical as potential sellers. I don't think we have reached this point yet but it will happen if POG moves up substantially. I'm guessing that any initial explosive move upward will result more from a lack of sellers than from a herd of buyers. The herd will arrive later.
Isn't this fun! Any thoughts?

JimboFlooding the market?#753345/10/02; 08:01:39

Matt Krantz in today's USA Today ("Gold rush could signal trouble") makes some statements that seem ill-conceived. One in particular bothers me:

"So should you buy gold? Not necessarily. For one thing, if the dollar stabilizes, the gold rally could peter out, Johnson says. Also, if gold continues to soar, companies can tap new mines and flood gold onto the market, which could bring prices back down."

First, I don't see the dollar stabilizing for quite some time. Second, it doesn't seem logical that gold companies would "flood gold onto the market," as he states. After all, wouldn't it make more sense for these companies to control the gold supply and keep prices high?

Does my logic make sense, or are Krantz' arguments sound?

PizzMr. Gresham#753355/10/02; 08:02:48

Agree with bond speculators and their ability to work the system. Aritrage has been a money maker for shrewed sophisticated operators ever since high speed computers - about 15 years. Greenspan likes to think of it as market efficiencies, but I see it as no different than a bank employee who clips mathmatical rounding variances (one side only) and deposits them into his own account.

Nice thing about market efficiencies, they tend to redistribute capital quite effectively, but the trick is to find where the capital has been going. My gut tells me to imagine all fiat and digital currencies, paper derivitives, etc. as smoke in the air and that there is this big machine out there slowly sucking it in. The output of this machine is gold, and it's being deposited in quantity into a lot of very deep dark basements.

Time will tell, but time is getting short. Going to be one wild ride very shortly. We all have a ticket on the biggest rollercoaster ride anyone can possibly imagine. Too bad no one is telling the masses that they have to bring their own seatbelts and probably need some heavy metal to hold them down (smile).

Off to the saltmines.


kludgeRE:"Gold rush could signal trouble"?#753365/10/02; 08:19:52

I think Mr. Krantz has that backwards.
Golden BearJimbo (msg#: 75334) Flooding the market?#753375/10/02; 08:26:38

Don't let this kind of two-bit analysis distract you from the big picture. No matter whether the US dollar is going up or down, bullion is doing its own dance. Compare charts of spot vs dollar since september - no obvious inverse correlation.

The dollar will head lower when foreigners are pulling their money out of the US. But the money going into gold currently is not necessarily money that has been pulled from US.

Keep your eye on the golden ball, that's where the big money has been going, and by the looks of things, will continue for quite a while...

As for new mine production, is this clown suggesting that gold producers can bring new production online tomorrow, or maybe next week? I don't think so.


YGMMIDAS Bulletin.....#753385/10/02; 08:36:23

Rats Jumping Sinking Ship......YGM.

Big option writer UBS Warburg has been buying physical gold
in the cash market. JP Morgan Chase's derivative
department is also a buyer. That should be an explosive

YGMFutures & Currencies....#753395/10/02; 08:40:21

Could be a 3-4 $ up day for AU..

All currencies up against Dollar....June /02 PMs all up except Plat......
YGMJay Taylor Report........"Excellent Take" "As Usual!"#753405/10/02; 08:48:48


That in a nutshell is why I believe Ian Gordon and Ron Gilchrist are exactly right in calling for a major depression and a gut wrenching deflation in America, the likes of which we have not seen since the 1930's. And I think signs are indicating David Tice was right to suspect the first real signs of big trouble for the U.S. economy will become visible when the dollar begins to tank. The spoiled rotten 60's generation (my generation), which took over the White House with Bill Clinton in the early 1990's, continues to live their adult lives as they lived youthful years. Live for today and to hell with the future. Don't worry about personal responsibility. Let the government take care of you and your family and its problems. Most folks never stop to think that attitude might result in declining levels of freedom.

But now the time has come when I'm afraid we are about to pay for the excesses of our past. As foreigners understand they have been deceived by market interventions and corporate lies and distortions, the reaction is not likely to be kind to America. We may now be witnessing the first glimmer of a transformation out of the dollar and into other currencies and gold.

SiochainBig Gold Buying#753415/10/02; 09:05:44

Midas/Cafe Gold Bulletin

"Big option writer UBS Warburg has been buying physical gold
in the cash market. JP Morgan Chase's derivative
department is also a buyer. That should be an explosive

JCTexYGM (05/09/02; 23:05:40MT - msg#: 75316)#753425/10/02; 09:09:44

"...keeps the Alien Bankers from reading my mind..." - been lalughing at that one all morning.

Isn't it a shame that we have to go to all sorts of places looking for news that hasn't been doctored? When the crash comes, the real story will be how the press lied to the public all these years.

SiochainYGM#753435/10/02; 09:13:16

Sorry for the're are fast on the let's hope the second post doubles the buying...Cheers!
NomadDeflation City ...#753445/10/02; 10:13:26

Snippit :

WASHINGTON — U.S. inflation has limboed to such a low level that a handful of economists think it may be getting too low. Some even say the Federal Reserve may keep rates where they are for a while to foster price pressures — unheard of just a few years ago.

"For the first time in my lifetime I can say that the Fed does not want the inflation rate to go any lower," former Fed governor Lyle Gramley, 75, says.

PizzR Powell/Mr. Gresham/All#753455/10/02; 10:42:51

Agree with your thoughts regarding multiples of $5. Strike prices are where the wars are fought.

Now, as far as the big boys playing big games? Mr. Gresham has me thinking on bonds, balance sheets, and capital. I commented earlier this morning on where the balance sheet capital, or capital in general may be drained off by manipulation. This can be gold, fiat, etc.

Rich, you're watching the paper PM markets for signs on expiration today, but I'm going to comment on the paper SM's and futures, because I'm watching them for signs. Next week is SM options expiration and I'm watching JPM thrashing around.

Now, we have an idea that JPM may be getting out of the derivitives business, at least to a certain extent. We also have all kinds of rumors about them. If JPM needs a hit to keep earnings up, and I have to think their bond portfolio may be suffering a bit right along with their gold position. Now, what piggy bank will they rob? Lets make a case for the SM funds - the sheeple's invested money.

According to a floor trader interviewed on WebFn, JPM was a HUGE buyer of S&P futures on the SM spike up earlier this week. He also speculated that they might also be heavy buyers of stocks themselves. This may be partially right, but I think they went heavy short on the stocks at or near the top of the rally, but still long the futures. Why? We had no follow thru to the rally and that's indicitive of distribution and big money shorting at the top.

Now, if JPM went huge long on the futures, someone sold. Here's were the funds step in and write calls or sell futures (their portfolio covers them) for short term income.
If this is the case, the unwinding of the futures positions that take place during option expiration week will have a major downward bias. Right now JPM and or others COULD be short stocks and long the futures. When they roll out of the futures next week, their short position will become very profitable, and is also how capital is drained out of our SM into the major banks. You gotta be a big, big player to make this work. (Is it a wonder why Greenspan likes the derivitives markets?)

Now, where will the capital go? I have a hunch some of it will be used to cover the problems in someone's gold derivitive department. Up, up and away.

Rich, does this kind of senario fit the gold market in reverse? My feelings say yes.


RobotGuySir Gandalf#753465/10/02; 10:48:14

Thou shouldst be calling our friend spike!


sector$311.75...Mighty Close to closing time to be going up that high.#753475/10/02; 11:04:16

The kind of action one would expect if the cabal were "capitulating" on the $310 strike

YGMExcerpt from Jay Taylors Report...James Turks..."Fear Index"#753485/10/02; 12:08:07

This is one winter I'd 'Welcome'.........ygm

If, as the Kondratieff winter unfolds, we suffered just a moderate amount of anxiety over the dollar as happened during the last Kondratieff summer, we might reasonably expect a nine fold rise above the current price of gold to $2,800/oz. If on the other hand, during the impending Kondratieff winter, the ratio moved up toward 30 times as it did in last Kondratieff winter, simple arithmetic takes us to a price of $9,360/oz.


YGMJapan To Send Gold Soaring....Stewart Bailey & Peter Gonnella Apr 17/02#753495/10/02; 12:22:02

I missed this report but if it's a repost for some it's a reinforcement for others.....Sorry if it's old news!....
Still good reading none the less....Makes the 'Sting' seem ever more real when we focus on the Dollar and Japan! IMO..

The CoinGuyThose Gold Locks of hair must be seeping into his brain#753505/10/02; 12:25:07{6DF826ED-429D-4732-AA49-128747DD5497}

I've noticed Thom has been increasingly bearish over the last few months, but it's starting to look like he's been reading the Trail...

Good Weekend to all,

The (Physical) CoinGuy

Mr GreshamCalandra#753515/10/02; 12:25:29

He's bubbling over today... (on the run)
YGMMr. Gresham.....You're Here...#753525/10/02; 12:40:23

I've Been Saving these for you.....

Re: your feelings on "Far Fetched Plans" and peoples Vanity keeping them from questioning "The Unthinkable"...........

***Three Quotes I keep on my desk top for a constant reminder of keeping an open & questioning mind......
I thought you might like these also! The last one is my favorite. Have a good wkend all....YGM.


If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen. -- Samuel Adams, speech at the Philadelphia State House, August 1, 1776

The ultimate result of shielding men from the effects of folly is to fill the world with fools.
-- State Tamperings -- Herbert Spencer (1820-1903)

There is a principle which is a bar against all information, which is proof against all arguments and which cannot fail to keep a man in everlasting ignorance -- that principle is contempt prior to investigation. -- Herbert Spencer (1820-1903)

WaveriderDeutsche Bank, Credit Suisse Ratings Cut by S&P#753535/10/02; 13:45:23

"Deutsche Bank AG and Credit Suisse Group had their credit ratings cut by Standard & Poor's on concern a drop in investment banking revenue and increased competition have hurt two of Europe's biggest banks.

Deutsche Bank, Europe's largest bank, was lowered to ``AA-,'' S&P's fourth-highest rating, from ``AA,'' the first reduction in three years. Credit Suisse, the parent of investment bank Credit Suisse First Boston, had its rating cut to ``A+'' from ``AA-,'' S&P said.

Global banks' ratings are under pressure as revenue dries up for underwriting stocks and bonds and advising on mergers, and loan losses mount. J.P. Morgan Chase & Co. and Merrill Lynch & Co., both put on ``negative watch'' by S&P, are among banks whose ratings may be cut.

``We wonder if this is just the tip of the iceberg,'' said Richard Thomas, a credit analyst at ABN Amro in London."

Black BladeWorld Gold Council chief resigns #753545/10/02; 14:15:22

The organization of gold mining companies also said it is looking to restructure and remodel.


NEW YORK (Reuters) - The World Gold Council said Friday its chief executive, Haruko Fukuda, will leave her post on June 30, and the WGC will look to restructure and remodel itself.

Black Blade: "To pursue other interest"? Although as far as I can tell, she seems to have done a fairly good job.

YGMProud to be Canadian eh!.......#753555/10/02; 14:15:28

Sometimes I'd like to Burn My Passport.......

*From American Freedom News*


Canada's socialist prime minister offers
sanctuary to 13 militant Palestinians hiding
in Church of the Nativity..........

Jean Chrétien yesterday tentatively offered sanctuary in Canada to 13 Palestinian militants who have been under siege in Bethlehem's Church of the Nativity since April 2.

*Sell the rest of our Gold Cretien! Focus on what you do best like bankrupting the Nation. We already know you're the worst embarrassment we've ever had for a leader!!!!!!!

By the Lord Harry, I was a mellow fellow til I read this today.....Now 10 Cerveca and two pitchers of Margueritas
won't quell this fit of rage......Send our Troops over there (Afganistan) & they have to buy their own boots and equipment, we hear they're also buying food to eat & they made the trip in a Zodiac (our Navy)....I think I'll mail Cretien my passport, I really do......Arrrrgh!....YGM

darkhorse@YGM#753565/10/02; 14:25:11

This must be the new "official" way of getting terrorists into the US. They've tried (and sometimes succeeded) doing it covertly before, now we've got transparency! I empathize with ya, buddy!
darkhorseoops...#753575/10/02; 14:28:08

make that last post read "..."official" way of terrorists getting into the US." Kinda transposed my lysdexia must be catching up with me again.
PizzSanctuary#753585/10/02; 14:28:16

Great, and with a Swiss cheese border. . . . .

Have a good week end all.


White RosePayback for Canada#753595/10/02; 14:33:22

We dropped some bombs and killed 4 Canadian soldiers in Afghanastan a few weeks ago. We ignored the fact that we were told they were operating in that area. We compounded our error by acting like it was a nothing.

Is this payback? Of course offering sanctuary may be very different than actually having to go through with it. It all may be part of some international grandstanding.

CoBra(too)Rating Cuts - On heavy financial Enterprises ! - #753605/10/02; 14:47:54

Hello - Sir Waverider - Seen your comments on CS and DB's credit rating cuts by S&P - while JPM, ML are on negative ratings watch. ... Reminds me of the guy, who sees the splinter in the other guys eye, while straining to see beyond the log in his own eye!

... As Cisco, the Kid told the story the other day - don't ever give up on real tech growth - and as long as you can beat the expectation of Wall Street - you'll get away with no growth at all - what an idiotic game to play ... on to the final dooms day and just consider Cisco is trading at 20% of it's high ... meaning you've lost 80% - if you've been lucky enough only to buy it at the highs and not at the dips also! Reciprocately - you would just about need an 800% capital appreciation to ... yeah, to just make it back in "nominal" terms - ... and that's really extremely ... UN-likely - or is it?

Meanwhile, you could have resorted to the barbarous relic, which has so far appreciated a bit - though only enough to make you wonder, why you ever ponder'd fiat as a medium to calculate your long term goals - such as saving for education, housing and finally retirement - as you can clearly see now - to the end - or forever ... all of it has gone the way of decay ...

... Haven't seen any agency re-rating the weight, nor the credit of an oz of gold lately - have you? ... cb2

YGMWhite Rose #753615/10/02; 14:51:24

If Only It Were That Simple....

We just get one bought, paid for and moronic leader after another.....At least Doris DAY is not the Opposition Leader anymore.....Ah well I'm over my rant and it's safe to walk around me here again :>) Think I'll go out and talk to the Horses and when I get to the rear end of one I'll lift the tail and tell Cretien what I think......
TownCrierLast chance to order these Graded MS61 $10 Liberties online#753625/10/02; 15:06:30

Soon to be replaced by the Brazilian 20,000 Reis gold coins from the late 1800's (each with a whopping 0.5286 ounces of gold). They are nice! If these aren't the most beautiful manhole covers you've ever seen, I'll eat my keyboard.

There aren't many, so call Centennial now if you feel like jumping the gate.


TownCrierIf you only read one article today...#753635/10/02; 16:13:54{6DF826ED-429D-4732-AA49-128747DD5497}

Thanks to Mr Gresham and The CoinGuy for posting this link earlier today. Here are some notable excerpts:

...A month from now, a year from now, five years from now - you choose the timing, because I won't - the price of an ounce of gold will be three to six times what it is now.

...By then, the euro will be worth a ton more than 91 cents. So will the Canadian dollar and the Australian dollar. By then, overseas investors long will have stopped hoarding U.S. securities...

...There are some who believe that when the red ink in the U.S. current account surpasses 5 percent of gross domestic product, all heck will break loose in financial markets. Stephen Roach at Morgan Stanley is on record saying a "hard landing" for the dollar, and with it the boatloads of U.S.-linked securities in foreign portfolios, may be inevitable. "A crisis of confidence is not inconceivable," Roach writes.

...I submit that with that swollen account deficit and the dollar's decline will come (has come and is coming) an explosive move up in the price of gold. The $310 metal, up almost 20 percent this year, one day will sell for a price that reflects a cascading American balance sheet.

...Ian McAvity ... says the gold-price trigger may be days or weeks away.
------(click link for full article)------

Did you ever think you'd see such pro-gold material in the mainstream media? Hinting at gold's potiential, there are millions of investors out there who have yet to even consider adding gold to their portfolio holdings. When the herd turns and begins to run this way, you won't want to be caught sleeping in the path of their thundering hooves. Make your move (to buy) now and head for the high ground.


R PowellStrong finish for the week#753645/10/02; 16:24:03

Stocks down
Dollar losing strength
POG up
POS up
Gold mining stock indexes up (XAU = 79.90)
Peoples' television stock picking channel still endlessly wondering about analysts' integrity (duh)
Daughter's guinea pig gave birth to six baby pigs!!
Papa guinea pig recovering from yesterday's visit to the animal hospital. Yes, there will be no more baby pigs. Poor papa.
Gold and silver look strong. Silver may be looking at the approximate 475 level again soon. The technical analysts often mention the fourth attempt at breaking through as the charm. Hope so.
Happy weekend to all !!!

BoilermakerJimbo, Flooding the Market#753655/10/02; 16:26:38

Unlike oil, there is little spare shut-in gold production capacity available. Some mines have closed and some of these can be reactivated but only at much higher prices. Ofsetting any mine reopenings will be the negative effects of years of high grading that have depleted the higher ore grades in many mines. Low prices have forced miners to exploit their lowest cost reserves and at the same time put off exploration for new reserves and maintenence of existing mines. I expect that it will take a price north of $500/oz and an investment climate free of government interference in the markets before large scale investment takes place. Once that hurdle is passed, wait another 5 to 7 years before you see the finished product. Miner profits will also lag the POG increase because they will be catching up with long neglected exploration and mine maintenence.

Gold mining has a tremendous inertia that works in both directions.

Have a good weekend to all of my dear gold bugs.


jlfletcGR2?#753665/10/02; 16:50:08

Where can thoust be, sir knight?
Arcticfox(No Subject)#753675/10/02; 17:53:04

But unless you're invested in gold, this rally may actually be a reason for concern. It could be a clue the stock market is in more trouble than many realize, say analysts who study the metal.

shelllus1-henry ford 2-dustbowl#753685/10/02; 19:05:36

'It is well enough that people of the nation
do not understand our banking and monetary system, for if they did, I believe there
would be a revolution before tomorrow
morning."----HENRY FORD


Black BladeOPEC Likely to Extend Oil Cuts, Supporting Prices #753695/10/02; 19:20:45


Saudi Arabia and its colleagues at the meeting supply almost a third of the oil the world consumes. While no decision on production will come until OPEC meets in June, the ministers plan to discuss the future of their biggest revenue-producing industry at a time when economic growth is lower than normal.

``Supply and demand are essentially balanced, giving OPEC no reason to adjust output,'' said Brad Bourland, senior economist at the Riyadh-based Saudi American Bank. ``Prices could actually slide further in the next few months if tensions in the Middle East ease.''

Most members of the Organization of the Petroleum Exporting Countries need oil above $20 to ensure they have enough cash to avoid going into debt. Saudi Arabia, the largest producer, faces an unemployment rate near 15 percent and near zero economic growth.

Other nations at the meeting of the Organization of Arab Petroleum Exporting Countries in Cairo include OPEC members Algeria, Iraq, Kuwait, Libya, the United Arab Emirates and Qatar and non-OPEC states Bahrain, Egypt, Syria and Tunisia. The group gathers every few years to discuss topics ranging from trends in world oil markets to financing the next generation of oil fields.

In the first quarter, oil supply and demand was equal at 76.3 million barrels a day, and oil use this year will increase by 440,000 barrels a day, the International Energy Agency estimates. Arab producers consider a ``normal'' level to be four times that amount.

Some analysts say keeping supplies in check may send prices to $30 a barrel and hurt the economic turnaround by making it more expensive to buy products such as gasoline, jet fuel and heating oil. Oil prices ``will go just up further, there's no doubt about that,'' said Leo Drollas, deputy director of the Centre for Global Energy Studies, a London think tank founded former Saudi oil minister Sheikh Zaki Yamani. ``That will hold back economic growth.''

Black Blade: Looks like the Global Recession has taken a toll by lowered increases in demand. However, oil producers are determined to keep prices profitable and that means an economic recovery in the west is highly unlikely anytime soon.

sectorCabal Not Dead#753705/10/02; 20:11:10

...Like an Aircraft Running Low on Fuel ...They Can Still Attack

SECTREAS O'Neill launches an Africa "I feel your pain" tour with entertainer Bono.

Can you believe it? Will Mr. O’Neill turn out to play a mean set of drums?…or perhaps bass guitar?

They will strangely bypass South Africa...maybe they're afraid of getting AIDS.

This oddity has me thinking that one reason for the money boss to be out-of-town is to keep from answering tough questions that result from a pending controversial decision's.
…Such as a decision to sell IMF gold….Proceeds to go of course to help the poor…Not to mention the further destruction of South Africa's economy.

The last time this idea bobbed up from the vast Clinton brain trust, it quickly sank because the Congressional Black Caucus killed it...Bad for Sub-Saharan economies. The problem today is that the CBC has little clout...even IF they fully grasped that their "Friends" in the Democratic Party actually stabbed them in their financial backs throughout GoldGate.

To attempt such a move today, with three years of factual evidence posted at and regarding the Fed's JPM and their nefarious acolytes, would only serve to draw even more attention to the scam of GoldGate. It would be akin to pulling harder on a Chinese finger puzzle.

Nevertheless, Greenspan may be up to the challenge and try to pull his fingers out of their joints.

Should such a move be launched it will no-doubt fail... but the more important point is that an exquisite buying opportunity would present itself.

So...let's see if the bureaucrats at the Fed can live up to their lofty salaries and chamfered limousines. Let's watch them take their best shot...and keep our powder DRY.

Black BladeGold rush could signal trouble#753715/10/02; 20:46:32


Investors fed up with the gloomy stock market may be missing a bull market that's glittering right in front of their faces: gold. Even while blue chips and tech stocks are in the dumps, the price of gold is on a tear. Stocks of companies that mine gold, which are closely tied to the price of gold, even hit two-year highs this week.

But unless you're invested in gold, this rally may actually be a reason for concern. It could be a clue the stock market is in more trouble than many realize, say analysts who study the metal. "The gold market senses a continuation of the bear market in stocks and rising inflation," says John Hathaway, portfolio manager at Tocqueville Asset Management. "Nothing else is working." When investors start buying gold, they're bracing for trouble. They're essentially turning away from the stock market and saying they'd rather protect the assets they have than risk losing more.

Unfortunately for non-gold investors, everything that's propelling gold is likely to be bad for non-gold stocks, says Mark Johnson, manager of the USAA Precious Metals and Minerals fund. Rising oil prices, fears of inflation and concerns about Middle East unrest all go into a stew of things that boost gold, he says. Most important, the weakening U.S. dollar is causing nervous investors to buy gold for safety.

Anxiety about the U.S. economy and stock market is rising. Investors buying gold are betting problems such as rising oil prices and terrorism are being underestimated, Johnson says. Gold's performance is a warning that the market is not safe yet, says Bernie Schaeffer of Schaeffer's Investment Research. "A prudent investor would look for ways to survive if the world remains an unfriendly place," he says.

Black Blade: A fairly good article until the end where the author shows his ignorance of the Gold industry. Mark Johnson, manager of the USAA Precious Metals and Minerals fund suggests that Gold can be "magically" produced by "tapping" new mines. Obviously he never worked in the mining business and why he manages a PM fund if he doesn't even grasp the most basic concepts is beyond me. It takes a minimum of 5 years to bring on new mine production and that's after exploration proves out the deposit. After several years in the business I know. I swear most people on Wall Street are complete idiots.

slingshotThe World Today#753725/10/02; 20:47:58

Moving at the Speed of Light

There are some of us who remember when things moved at a slower pace. With each new discovery and inovation we think how much time we save only to be caught in a trap as we compress more activity in the same amount of time.
So what has this to do with Gold? Maybe nothing. I just have the impression that one reason why the gereral public has very little interest in gold is that they are busy making ends meet in their daily lives. Actually, Goldbugs are caught in some type of time displacement with the public instead of moving fast, are in slow motion. Over time they speed up and eventually synchronize with us. Until they take a good look at what is happening,to employment,
real estate market, savings, credit debt, savings etc, they will continue to do the things they do and live within their comfort zone.
They don't realize they are running out of time. What a shame.

WaveriderBlack Blade#753735/10/02; 21:03:50

You may find this article interesting from the Gulf News dated Tuesday May 7, 2002 (pdf), titled "Arab States Urged to Boost Internal Trade" by Nadim Kawach. It's about increasing inter-Arab trade of oil and gas, but what caught my eye was this..."The seventh energy conference comes at a time of significant economic and political developments...the tendancy to form regional economic blocks is gaining pace as the new world order emerges in finance and energy." Hmmm...I think the Arabs have a lot more up their sleeve than they're letting on. Cheers,


TownCrierTighten your belts, gents!#753745/10/02; 21:08:42

Drop one of these hefty (0.5286 troy ounce) Brazilian coins in your pocket and things could get breezy if you don't cinch up first!

(You may have to click your browser's REFRESH button if you still see the Liberty offer at this link.)


Black BladeWalloped dollar to accelerate gold#753755/10/02; 21:12:52{6DF826ED-429D-4732-AA49-128747DD5497}

Toronto veteran explains the de-hedging scenario


This column isn't about Aldridge, the American short-story writer who quit school at age 13 to write for 19th century magazines. I just put it there so you can turn away from this column now if you don't want to hear my view of markets in coming years - a view that essentially is the gold story with some dollar-trimming and a swollen current account deficit for good measure.

A month from now, a year from now, five years from now - you choose the timing, because I won't - the price of an ounce of gold will be three to six times what it is now. By then, the world's money flows will have stopped way short of the fiber-optic fork in the ocean that leads to New York. y then, the euro will be worth a ton more than 91 cents. So will the Canadian dollar and the Australian dollar. By then, overseas investors long will have stopped hoarding U.S. securities in their digitized central banks or their frosted chalets. (As I write this, the flow of fur-ner money into dollar-denominated assets is falling sharply, to well less than half the average monthly flow of $44 billion we saw last year.)

There are some who believe that when the red ink in the U.S. current account surpasses 5 percent of gross domestic product, all heck will break loose in financial markets. Stephen Roach at Morgan Stanley is on record saying a "hard landing" for the dollar, and with it the boatloads of U.S.-linked securities in foreign portfolios, may be inevitable. "A crisis of confidence is not inconceivable," Roach writes. (Six or nine months from now, you can go back to Roach's report and long for the good old days, when a euro was worth just 91 cents.)

I submit that with that swollen account deficit and the dollar's decline will come (has come and is coming) an explosive move up in the price of gold. The $310 metal, up almost 20 percent this year, one day will sell for a price that reflects a cascading American balance sheet. With U.S. households living off their spree of credit-card and mortgage debt, the perpetual stock and housing market bubbles in this country (and in most of the world's major cities) will hiss, hiss, hiss.

In coming weeks, I hope to bring you several high-profile money managers and (of course) mining executives who state better than I do the case for, as Tocqueville Gold Fund (TGLDX: news, chart, profile) manager John Hathaway put it to me, "a big number" for the gold price. Whether that big number comes from a sinking dollar, or the $63 billion of gold derivatives on the books of U.S. banks and trust companies (as of Dec. 31), or creeping inflation, shocking deflation or, Lord help us, bigger and more deadly exploding mailboxes, remains to be seen.

Ian McAvity a newsletter writer who keeps paper files of every chart, stat and mining press release, stretching back 25 years, points to a pending rush by hedged gold miners to reduce the amount of gold they are forward-selling. As Gold Fields Ltd.'s (GFI) top executives, Chris Thompson and Ian Cockerill, put it this week from New York, the forward-sale of gold is a source of supply in a falling gold market, spurred by bullion banks and central banks that lend their gold reserves in search of incremental income. But in the current market, where gold relentlessly sets new highs, the scramble to close forward-sale contracts - to de-hedge and return to the spot market for bullion - is a source of potent demand in a rising gold market.

South Africa's Gold Fields and several other large miners, such as Newmont Mining (NEM), have virtually no hedged sales of gold. In other words, the miners who don't cross-dress their portfolios with frilly futures contracts, options and other derivatives, sell an ounce of gold for whatever it sells for in the spot market.Andy Smith, the London-based precious metals analyst at Mitsui & Co. whose work in this field sets him apart from most Wall Street gold analysts, estimates there are 3,000 tonnes of gold on mining companies' hedge books.

Black Blade: This is the same story that I and many others have put forth, however, when Thom Calandra spins it, there is a certain poetry. Many appear to be getting much more bullish than they did when the general consensus for the POG was about $300 to $305 for this year. As the POG powers past these levels the analysts reset their targets even higher. Some are holding the POG target at $325 while others are projecting $400 per ounce and beyond. And yes. The day of the hedger is over. Those hedgers who are exposed when the POG breaks loose will quickly find themselves under new management (and ownership) while old management face the wrath of screwed shareholders.

mikal@Sector#753765/10/02; 21:25:36

IMF has it's hands tied now that GATA's message is well distributed. The Europeans and the Congress, the Japanese and Chinese, to name a few, stand in the way. I believe they have plans to sell IMF gold, along with German, Swiss, and others, after gold stabilizes at a much higher value. Then sales will be restricted, like the Washington Agreement. And the Congressional Black Caucus probably has more power today than ever! Every time I drive through my city, many long-negected, typical inner city blocks greet me. Is there a government benefitiary or program that spends or operates perfectly? It's a myth that city dwellers get more than their fair share of tax dollars. Because what ALL of us need is a powerful caucus, not taxation without representation. If the government wanted to eliminate blight, they could do so overnight. When you can't start a small business in this country anymore, government will take them over.
Black BladeRe: waverider#753775/10/02; 21:27:43

Thanks, I'll check it out. Also, there is a movement in Dubai and Kuala Lampur to use gold dinars and silver dirhams as currency and for trade among muslim trade in the ME and Asia. The point is to conform to strict Islamic monetary beliefs (such as eliminate usury) and to create a stable PM currency. Given the number of Islamic countries and some not quite so stable or honest, this is a very good idea and it frees these countries from blackmail by other nations outside their sphere of influence.

BTW, I am reading "The Skeptical Environmentalist" again, however, you might want to read "The Prise: The Epic Quest Foe Oil, Money, and Power" first. It is less science and math intensive but it covers some rather interesting history of the power of Oil interests (western and Arab for example). It really puts things in perspective. Cheers!

- Black Blade

Bulldog(No Subject)#753785/10/02; 21:58:33

So we participate here in the great gold run, but how many of us has actually convinced our circle of friends to buy physical gold? A couple of my friends bought shares in a number of gold stocks 5 years ago or so. We were so foolish, we thought the craze was smoke and mirrors.
When the crash came, gold stocks would go through the roof.
I got my RRSP statement today, and in the last quarter, my portfolio is up by 50% over the last quarter. Problem is I have Bema at about $8, Miramar about $5 and so on. I no longer buy stock. It's a sucker's game.

My wife and I were visiting my "y2k retreat" last week. I was doing an inventory of my food storage program and my stash of "currency", paper and physical. In Canada, we have changed our five and ten dollar bills. I took home both denominations since they are no longer current. The point was made when I was handling my physical gold and silver. No government can issue a facsimilie, only the real thing counts.

Of all my circle of friends, only one, my brother has followed my urgings to buy physical. He bought a 100 oz bar
just to get me off his back. Even now when his purchase has increased by $30/oz, he is not a fan.

This shell game is about done. Here in Calgary, the office space vacancy rate is on the increase. Last year there were takeovers in the oil patch by U.S. interests to the tune of $25 Billion. Once they rationalize their staff, they no longer need the people or the space. Canada is a secure supply of natural gas and oil to the U.S. Frankly, I think we should turn off the tap briefly to foster a reasonable settlement of the softwood lumber problem. It is not hard to fathom why most of the world dislikes the U.S. Now they are going to subsidize their farmers. I guess we take it in the ear there too. I would also like to see the Canadian government bring our troops home from Afganistan.

We can't afford to supply proper uniforms or rations. I read today that many of our troops have lost 20-30 pounds in the five months they have been in Afganistan. Then our P.M. offers sanctuary to a bunch of Palestinian fighters from the church of the Nativity, go figure.

I think this is quite a day. The Dow closed below 10,000.
There may be some brief rallies authored by the mutual fund managers, but this is a done market. I hate buying gold at over $300 but in a short time we will marvel that we did not buy more at this price.

YGMBulldog.....#753795/10/02; 22:26:25

Good to see you here nieghbour....Just 2 hrs SW....YGM
Chris PowellMore than one departure at Morgan Chase#753805/10/02; 22:31:17

More than one departure at Morgan Chase.

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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Black BladeFollow The Smart Money?#753815/10/02; 22:54:31

I came across a financial report that puts forward some interesting points. I am not about to tout any particular stock, but the report concerns a Silver miner (Apex Silver Mines – SIL). Silver hasn't really blasted off yet, however, if the large purchases of SIL shares by hedge funds is any indicator, then we may be observing an institutional money rush in progress toward the PM side of investing and out of the general stock market.

Three hedge funds (Moore Capital, Pequot Capital, and Soros Management – George and Paul Soros) hold about 28% of SIL. The flagship mine San Cristobol in Bolivia holds about 470 million ounces of silver (proven and probable reserves) and hasn't even begun mining. Why would the so-called smart money run toward PMs while the Wall Street Pimps and financial media Trolls taunt and ridicule Gold and Silver investors? These hedge funds are not alone. Bill Gates CEO of Microsoft holds over 12% of Pan American Silver (PAAS) through a holding company, and the "Oracle of Omaha" Warren Buffett and Charlie Munger through Berkshire Hathaway hold over 130 million ounces of Silver offshore and out of reach from the US Governments grubby paws.

Note that Silver has not really rallied substantially though these titans of the financial world are grabbing hold of the PM sector. Who knows how much Gold (if any) they hold (probably a lot of Gold under wraps). Obviously these people are expecting something to happen or are at the very least are taking some precautions. While the Soros brothers and Bill Gates are betting with Silver mining shares, Warren Buffett (the most successful investor in history) has grabbed a sizable chunk of physical Silver. Considering the shifting fortunes on Wall Street, the decline in the US Dollar, deepening recession and the increasingly bearish streak running down Wall Street, we could be looking at a major shift into precious metals that could make mania look like an obscure abstraction of days gone by in comparison.

As always, get out of debt (at least try), get Gold and Silver portfolio insurance while still cheap, stash cash for several months expenses, and start a storage program of nonperishable food and basic necessities. Prepare for the worst and hope for the best. At least "follow the smart money" by getting insurance against the coming economic calamity.

- Black Blade

YGMBlack Blade...#753825/10/02; 23:37:31

A Good Thread for Discussion.....

Samrt money & Silver...Excellent heads up post...To my mind what we see & know concerning AG hoards is only the tip of the iceberg of missing (unaccounted for) Siver in the world...I sure would hope others will follow your thread here if MK doen't mind...It may give a better understanding to those accumulating Gold just where this game is headed!
How much Paper is owned by old money in Gold & Silver we know nothing of......?? CEF is I know held (big blocks) by Bankers, Lawyers and other smart money....There's many avenues to pursue here & a picture could be formed by pooling information such as yours & others......YGM

Black BladeHow To See Past The Accounting Trickery – Dividends!!!#753835/10/02; 23:50:49

Investors are surprised at how they were taken in by the Pimps of Wall Street and the Financial Media Trolls. On a daily basis we hear of accounting scandals, restated earnings, shareholder lawsuits and SEC investigations. How can Wall Street get past this jungle of deception, past the ambush of dishonest corporate executives, auditors, and accountants, and through the minefield of SEC investigations? The answer may be as simple as a "dividend check".

After struggling with "Pro Forma" earnings (earnings after ignoring all the bad stuff) and other dishonest tactics such as "off the books accounting", synthetic leases, etc. perhaps something as simple as a dividend check may be required to keep the corporate charlatans of Wall Street honest. You can hide a lot of problems in the convoluted balance sheets of corporate America, but it is very difficult to argue with a dividend check.

Just before the Great Depression people knew well the deceptive accounting practices of Wall Street. However, a measure of fiscal health was the dividend check. Corporations that paid out dividends from a percentage of earnings were more likely financially healthy whereas companies that did not pay dividends were suspect.

From 1960 to 1994 companies paid out from 43% to 64% of their earnings as dividends. That's hard to argue with. There were few SEC investigations in those days as well. Then after 1994 dividends were considered "out of fashion" and relics of the past. Greed took over in the board room as director "rubber-stamped" decisions by executives as long as they got a piece of the action and friends were brought in at the expense of the owners (the shareholders). In effect they and the executives got to plunder the companies bank accounts with obscene compensation – screw the shareholders. As a result dividends fell to 1.2% by 2000.

What excuse did these crooks use? They simply stated that long-term capital gains taxes were less than short-term capital gains (such as dividends). That's true. However, this opened another can of worms. This led to the explosion of the, tech, and telecom manias – an explosion of companies that did not have to prove their financial fitness – let alone a business plan. A new paradigm was born to fit to the "New Economy". Dividends were for the old "Fuddy-Duddys" who "just didn't get it". In the end nobody got it. No one understood these businesses and as they failed apparently Wall Street didn't either. Well over $5 TRILLION went away into the ether – vanished like a wisp of smoke never to be seen again. All that cash gone – "Gone to Money Heaven".

In December of 1994, the Financial Accounting Standards Board created by the SEC and under pressure from the corporations and politicians dropped a proposal to classify stock options as a form of compensation as an expense. Suddenly a new corporate scam was born with complicit politicians (such as major cheerleader and committee oversight chairman Sen. Joseph Lieberman D-CT no less). It took corporate managers and board members no time at all to realize that if the share price went up – they would make a fortune on their options (and the hell with what the owners – the shareholder thought – screw em). The corporations stopped paying dividends and bought back shares and built factories (even if they weren't needed".

The plan worked out well as the Bull Market surged. Many made fortunes and even shareholders fared well (at least the ones who got out while the getting was good). Corporate managers and board members made fortunes. When the smoke cleared many began to question items on the balance sheets. Soon the house of cards began to tumble. Soon one, tech, and telecom after one another collapsed as the whole financial base was exposed as a fraud. Many companies simply vanished while others are just a shell of their former selves. Today investigations are the order of the day from Enron, Arthur Andersen, Global Crossing, Qwest, Merrill Lynch, JP Morgan Chase, etc. The investor watches as the corporate managers and board members walk off with obscene gains while the poor investor is holding tattered shreds of shares. Soon the investor may simply ask for dividends instead – and that alone could make the modern day corporate executive and board member tremble with fear - they will be forced to be honest with the corporate balance sheet.

- Black Blade

Black BladeYGM - Silver#753845/10/02; 23:54:12

I believe that MK and the Castle Guards also supply Silver and numismatic Silver (graded Morgan Dollars) if I recall correctly. Cheers!

- Black Blade

Black BladeEIA makes smooth takeover of reporting duties #753855/11/02; 00:22:02


HOUSTON, May 10 -- The US Department of Energy's Energy Information Administration took over weekly gas storage reporting duties from the American Gas Association in an apparently smooth transition this week, despite earlier fears among industry participants that the move might obscure summer market fundamentals.

Storage outlook

Meanwhile, Adkins said, "We believe a combination of rapidly declining US production, as well as a modest recovery in demand, will lead to summer injections that are 40% below 2001 levels on average." Gas producers representing about half of total US gas supply have reported their first quarter production this year was down 2.5% from the fourth quarter of 2001 and by 4.5% on a year-over-year basis (OGJ, May 6, 2002, p. 7).

"While US gas production is not likely to fall another 2.5% in the second quarter of 2002," Adkins said, "we do believe that it is likely to continue falling sequentially by at least another 1.5% next quarter. "That means that the year-over-year gas supply gap should continue to widen to over 6% (3 bcfd) as we move through the summer."

He said, "Because a supply problem is much harder to correct than a demand problem, we believe falling US supply will be the driver behind natural gas prices over the next 6-12 months." Moreover, Adkins said, "With strong oil prices raising the switch point for residual fuel to nearly $4/MMbtu, as well as anecdotal evidence that the manufacturing sector is recovering, we can conservatively model a modest increase (2 bcfd) in demand for natural gas this summer." The result, he said, is that gas storage injections should average 40% lower this year compared with last year.

"Consequently, we believe that volumes of working gas in storage will not reach 3,000 bcf by Nov. 1 and that the underlying supply problem facing the market could create another natural gas shock next winter," said Adkins.

Black Blade: As I have stated for some time now, we are likely headed into a NG energy crisis late this year or early next year unless a very aggressive drilling and production program gets under way. That is very unlikely especially now as rabid environmentalist extremists are now fighting energy production on the Rocky Mountain Front after they successfully blocked ANWR. Count on very severe energy shortages similar to last year and scratch one US economic recovery.

TownCrierWRAPUP - US stocks, dollar drop; bonds, gold, oil climb#7538605/11/02; 00:46:42

NEW YORK (Reuters) - "People are intimidated that they are unable to guess this market," said Stanley Nabi, managing director at Credit Suisse Asset Management, which oversees $269 million worldwide. "Whether you are a professional or trader or speculator you have egg on your face. There is fear of a liquidity crisis at telecoms, fear of a weak dollar, fear of higher interest rates, fear over more confrontation in the Middle East."

..."The mood is very downcast right now and people are just really skeptical on stocks," said Brian Pears, head of equity trading at Victory Capital Management. "They are getting disappointed with the fact that Wednesday didn't mean so much."



TownCrierRecord British trade deficit of £3bn#7538705/11/02; 00:52:10

Britain's exports to the 12 members of the single European currency have collapsed, raising fears that the UK is paying a high price for staying outside the euro.

The UK's trade deficit with the euro area has ballooned from just £300m two years ago to a record £1.87bn in the first three months of this year, according to the Government's own figures published yesterday.

...The slump contributed to a record global trade deficit of £3bn in March, which may force the Government to cut its estimates for economic growth.

...Diane Coyle, the managing director of Enlightenment Economics, a consultancy, said factories were relocating from the UK into the euro currency area."This can only get worse as Britain stays out of the euro," she said.

That pretty much sums it up. You don't have to be a weather man to know it's raining.


WaveriderMassive Daily NASDAQ Rallies#7538805/11/02; 01:07:53

"On Wednesday May 8th, the day following an apparently positive earnings announcement by NASDAQ bubble darling Cisco Systems, the King Bubble of the NASDAQ speculative mania which still has throngs of fanatical followers, the besieged NASDAQ index exploded upwards with great fury, reaching for the heavens in a rally of Biblical proportions. In a single trading day the NASDAQ composite rocketed up by 122 points, 7.8%, to 1696! It was truly a wondrous sight to behold.

After the markets closed on Wednesday we began crunching the numbers and found that the May 8th 7.8% melt-up was the 8th biggest daily rally in the three-decade history of the NASDAQ. Quite impressive! In digging deeper it soon became apparent that massive record-breaking single-day bear market rallies in the NASDAQ exhibited very important distribution patterns of which all investors and speculators need to be aware. These revelations to us led to this essay on massive single-day NASDAQ rallies."

The bottom line is that record-breaking massive single-day rallies in an equity index are almost always short-covering rallies in primary bear markets. Whenever investors witness a spectacular daily rally in the NASDAQ or other stock index that is among the largest ever, they should not interpret it as a joyous sign of a turnaround but they should run for the hills to preserve their scarce capital from the evolving hungry and vicious bear.

Waverider: ~ Randy, those 'managing directors' would do well to read this gem from Adam Hamilton. Cheers!

Golden BearChris Powell (msg#: 75380) More than one departure at Morgan Chase#7538905/11/02; 01:18:57

Greetings Chris,

I googled for Dinsa Mehta as Bill suggested in his message to the yahoo GATA group, and found this from Feb 99....
Buffett blows it
Modern Midas 'made a serious mistake'
By Samantha Zee, Bloomberg News

Warren Buffett, the second-richest man in the U.S., may have gotten it wrong when his Berkshire Hathaway Inc. spent about $650 million buying silver.

The Berkshire chairman revealed a year ago that the company had bought 129.7 million ounces of silver -- equal to a quarter of the world's annual output. He was betting that demand would outpace production, as it had for years, and send prices higher. Since then, silver has fallen almost 15 percent.

Commodities are an unusual asset for Buffett to hold. The 68-year-old investor (pictured at right), whose 40 percent stake in Berkshire is valued at $36.7 billion, got rich by investing in stocks of companies such as Coca-Cola Co., Fannie Mae and Gillette Co.

"Buffett made a serious mistake," said Martin Armstrong, the biggest individual silver trader on the New York Mercantile Exchange and chairman of Princeton Economics Institute, an economic forecaster. "How many more billionaires will it take to push silver higher? The demand just isn't there."

The Omaha, Nebraska-based Buffett hasn't said what he's done with the silver -- or even if he still owns it. (A spokesman for the company declined to comment.) If he does, the investment has fallen short of the returns investors have come to expect from him.

Buffett bought silver when it averaged $5.06 an ounce on the New York Mercantile Exchange. Based on that average, he'd earn 11.7 percent on his investment if he sold it all now. Buffett could have earned 40 percent in the same period by buying shares of a mutual fund that mimics the Standard & Poor's 500 index.

To be sure, his investment has become more profitable in the past month -- silver reached a six-month high of $5.81 Friday before closing at $5.642 an ounce, down 11.8 cents. Still, with weak economies in Asia and less demand for luxury items, such as jewelry, prices probably won't go much higher, and could fall, analysts said.

"Even though the fundamentals for silver haven't changed in the past year, the outlook has, and it's weakened," said Dinsa Mehta, global head of commodity risks at Chase Manhattan Bank in New York. This year, silver belongs in a range of $4 to $6 an ounce and "not any higher," Mehta said.

Owning a commodity isn't like owning a stock. Silver doesn't pay a dividend, and Buffett's big investment won't influence silver supply or demand the way it would a company's management. About the only way commodity speculators make money is by selling at prices higher than the initial investment and storage costs.

Chances are Buffett hasn't sold his stake yet because any large sale during the past year would have been conspicuous, traders said.

"Once there's a big player in such a small market, if he ever turns a seller, it seems that the market is finished," Armstrong said.

Berkshire will disclose the value of its investments, including silver, by mid-March, when the company publishes its annual report. While Berkshire probably hasn't lost money on silver, investors who followed Buffett into the market probably were hurt the most.

Buffett started buying July 25, 1997, a week after prices reached a four-year low of $4.145. By yearend, inventories monitored at U.S. exchanges had dwindled 37 percent and traders guessed supplies were being shipped to London, where warehouse stockpiles aren't disclosed. Silver rose to $6 an ounce.

Shrinking inventories sparked speculation that silver was being manipulated. Traders were convinced someone was cornering the market, as in 1980, when the Hunt brothers of Texas tried. Phibro Inc., a unit of Salomon Smith Barney Inc., caught much of the flak.

Buffett disclosed he was the buyer on Feb. 3, after a trader sued Phibro, accusing the firm of manipulation. The next day, silver closed at a nine-year high of $6.615 an ounce and jumped to $7.50 two days later as some investors concluded Buffett was right.

"Everyone was relieved," said John Simko, chairman and chief executive of Sunshine Mining and Refining Co., a Boise, Idaho-based silver producer. "After all the speculation about manipulation, if anyone was going to buy silver, you'd want it to be long-term player like Buffett."

Some investors figured silver would shoot up to $10 an ounce. Problem was, Buffett wasn't acquiring any more silver. He made his last purchase on Jan. 12, 1998, according to Berkshire Hathaway's annual proxy statement, filed with the Securities and Exchange Commission three months later.

Without a big buyer, silver began to fall. It reached $4.585 two months ago, the lowest since September 1997 and 39 percent lower than the high reached after Buffett's announcement.

Berkshire's silver investment is just 2 percent of its assets, "but it's a big stake for the silver market," said Armstrong, the silver trader. "He was buying silver on price dips. That works in stocks, but not in commodities. People ran the price up, let it slip, wait for him to buy and run it up again. Now he's basically stuck with silver."

Buffett's investment is profitable, at least on paper. In an SEC filing, Berkshire Hathaway said the 111.2 million ounces of silver it held at the end of 1997 was worth $97.4 million more than the company paid. Buffett also has loaned some of his holdings, charging borrowers interest. With one-month interest rates on silver below 4 percent, returns from lending fall short of those from other Berkshire assets.

"Buffett's bet hasn't paid off so far," said Andrew Kilpatrick, a stockbroker in Birmingham, Alabama, who wrote Of Permanent Value: the Story of Warren Buffett. "Buffett's a long-term investor and usually takes a stake in something for five to 10 years. There are many investments that he's had for 25 years, so holding silver for a year is like a day-trade for him."

Even a losing investment would do little to curb Buffett's returns. Berkshire Hathaway stock rose 34 percent on average during the past five years, compared with 25 percent for the S&P 500. It closed Friday at $71,600 a share, down $300.

Lower silver prices could prompt some exploration companies and primary silver mines to cut expansion plans or curb production, which could help boost prices, analysts said.

Still, weak currencies in Latin America, which accounted for a fifth of the world's silver production in 1997, could keep mine production costs low in dollar terms, analysts said. And industrial demand for silver could weaken as digital photography replaces traditional silver-based films, which account for more than a quarter of world demand, analysts said.

Some investors aren't sure why Buffett veered from his strong record in stocks to dabble in commodities, though they're not about to abandon Berkshire Hathaway because of it.

"I don't fully understand what happened with silver, but Buffett works in mysterious ways and he's lost more than I have on this," said David Carr Jr., president of Oak Capital Management Inc., a money manager in Durham, North Carolina, who owns Berkshire Hathaway Inc. shares. "But I like to say, in Buffett we trust, all others have to pay cash."
Buffett has prepared for the carnage which is coming some time in the future - he is big on insurance. I think a bull market in Optometrists is just around the corner. With all this short sighted forecasting over the last 5 years, the masses are going to need new prescription glasses to see the intrinsic value PM's have had for centuries, and will continue to enjoy when the SHTF.


Hipplebecksaving Argentina#7539005/11/02; 02:04:13

I wish I could throw together a
combination of all that extra silver
that I keep hearing about,
Hugo Salinas, and Argentina
and save those people who
are in such desperate need
of a new system. As a matter
of fact, maybe it could
be the start of something
that would spread.

Black BladeRe: Golden Bear – Armstrong, Mehta, and Buffett#7539105/11/02; 02:09:58

That's an interesting article in many respects. Note that Martin Armstrong is in prison for engaging in con games and fraud, and Dinsa Mehta is out of a job. I would also note that if Dinsa Mehta is so much more intelligent about investing, how come Warren Buffett is a multi-billionaire and Dinsa Mehta is not? He also mentions that Buffett could have made more by investing in the S&P 500 index. Not now. The S&P 500 has lost over 30% in the last couple of years. Dinsa Mehta is not so smug these days. Of course with his recent "resignation" and the SEC probe into his dealings at JP Morgan Chase, he just might get to meet Martin Armstrong face to face. I just suggestion to Mr. Mehta is – "whatever you do - don't drop the soap".

- Black Blade

Black BladeFilm still king, claims Kodak#7539205/11/02; 02:45:43


Digital cameras not ready to replace 'old style' just yet. Digital camera technology is not likely to replace chemical-based film for some time, according to Eastman Kodak.
Chief executive Daniel Carp said that film is still king despite a slump in the US market and the industry's shift to digital imaging. He explained that there is still room for growth in consumer film, particularly in markets like China and India where only about one in five households own a film camera. Kodak has opened 1,500 photography stores in India and China, and film sales have risen in both countries. Emerging markets now account for about 20 per cent of Kodak's film sales.

"A lot of cameras using film are still being sold," Yannas said. "And you have to remember a few billion film cameras have been sold over the last 20 years. Are the people that own the cameras going to throw them away? [They] most certainly won't. "Film," he said, "will be a cash cow for decades."

Black Blade: Traditional film sales are expected to rise. So much for the touted demise of Silver in film. Silver use in the film industry will be around for decades (at least).

Black BladeThe Barbarous Relic Files - Golden week for jewellery trade #7539305/11/02; 02:59:35


HONG Kong's watch and jewellery retailers had a ``golden week'' when tens of thousands of mainlanders came during the Labour Day holiday looking for gifts. Firms were yesterday still adding up the proceeds of the bonanza from the mainland's just-ended week-long holiday. About 54,300 mainlanders arrived in Hong Kong as part of 2,330 tour groups from April 30 and Monday this week, according to Immigration Department figures. Increasingly affluent mainlanders had made a big impact on otherwise gloomy retail sales, industry leaders said, spending HK$3,000 to HK$10,000 on purchases in Hong Kong's jewellery stores. Hong Kong Jewellers' and Goldsmiths' Association chairman Leung Sik-wah said he expected his organisation's 300 members to see a 20 per cent increase in takings over the holiday period.

Black Blade: Just wait until all Chinese mainlanders are able to purchase Gold. Flocking to Hong Kong for "barbarous relics". Hmmm...

Hipplebeckmidnight ramblings#7539405/11/02; 03:05:53

I'm thinking the most important factor to take into consideration at this point in all markets is the Isreali/Palestinian conflict. I have a feeling that we are in an economic war already. I have seen reports lately that there are many countries that are boycotting American goods.
This is a sign of economic war isn't it?
It looks to me like we are heading towards a war between Isreal aligned with the US against the Arab states and maybe some others who are Muslim. Who knows how Russia, China, and Europe will react. It looks like a pretty sure thing to me because I don't think either the Isrealis or the Arabs are going to give up the temple mount.
Lets look ahead. The Saudis have stated that they will not use the oil weapon. Will they need to? The Saudis are the defacto leaders of Islam, so what they do has a great influence on all Islamic countries. The Arab countries are leaning towards unification since they have all seen how the US plays one against the other and turns on those who were puppets only a few years before. They also all have reached the end of patience in the endless negotiation problem because they see East Jerusalem and the Al Quds slipping away as Isreal makes new reality on the ground with settlements and evictions.
I really think that the war is being played out as heavily in the economic forum as the political or military forum, so we are probably looking at quite a few more shocks. It's a kind of a covert war without guns. So far, I don't think the Bush administration is winning a whole lot of friends, so I expect that there are going to be some surprises coming our way. Be safe, hold Gold.

Belgian@ Towncrier#7539505/11/02; 03:42:15

Knew that you were going to mention the record Britisch trade deficit with Euroland (Yeahhh) ! That's the way it works. This trade deficit is "the best" argument to convince all the euro-reluctant brits to vote for EMU.
Those naughty architects at BIS and their funny currency-floating-games ! Hahahaaa. Something similar will happen with the eagle-paper ($).

Lesson : Forget about military force being an exclusivity.
It's the paaaaaaaperrrrrrrrrr floatsssssssssttttt.
Nice wee to you Sir Randy.

Golden BearBlack Blade (msg#: 75391)#7539605/11/02; 03:53:33

Thanks for the Martin Armstrong update BB, it rounds out the current state of play nicely.


Black BladeStock Options Worry Some Investors#7539705/11/02; 04:22:49

Investors Voice Concern to Securities Exchange Commission About Executive Stock Options


WASHINGTON (AP) -- Investors are expressing their concern to the Securities and Exchange Commission about company executives' stock options, about the accuracy of corporate financial reports -- and about the SEC chairman's own prior association with "pirates of Wall Street." The fallout from Enron's collapse overshadowed the agency's first "investor summit," held Friday at its Washington headquarters and broadcast over the Internet and on cable television.

Black Blade: Obviously these charlatans are grossly over compensated. "Pirates of Wall Street" about sums it up.

Black BladeGoodrich cut 1000 jobs in 1st-qtr, to cut more#7539805/11/02; 04:32:29


NEW YORK, May 10 (Reuters) - Aerospace and industrial products company Goodrich Corp. (NYSE:GR) said it cut nearly 1,000 jobs during the first quarter of the 2002, and had another 980 jobs still to be eliminated.

Black Blade: Medtronics to layoff 800 and Sprint to layoff 300. The "Bone Pile" continues to grow. Some recovery eh?

Boilermaker"Lunatic" Label Fires Up Wild Bill Murphy#7539905/11/02; 04:40:10

As if Bill needed any more baiting, Dinsa Mehta pours salt on the wounds. I love this guy.

Le Metropole Members,


>Gld hedging mastermind contemplates retirement

By: Tim Wood

Posted: 2002/05/10 Fri 14:00 | © Miningweb 1997-2002

PRINCETON, New Jersey -- The man credited more than
anyone else with spawning the gold hedging boom of the
1990s genially shrugs off talk that he has been fired.

The news surfaced in a report circulated by Gold Anti-Trust Action Committee chairman Bill Murphy. The affable and
urbane Mehta said of the rumours: "An endearing feature
of the gold market is that it has had a hard-core of
conspiracy theorists providing sideshow entertainment for
twenty years. Their consistency in occupying the lunatic
fringe is admirable.

As head of Global Commodity Risk and Global FX Options for
the giant institution, Mehta says he advocated combining
the bank's foreign exchange businesses as a single asset
class and Bullion was positioned into that grouping. This enabled Mehta to contemplate moving on to retirement....


Just a coincidence? Bill Demchak, global head of structured finance and credit portfolio of J.P. Morgan Chase, resigned
on April 18 of this year. That was just about the time
Dinsa Mehta "supposedly" resigned. Vet Mehta, like
Demchak, came from Chase and was with them for 16 years.
The smoke is bellowing from Morgan's NY headquarters.
How come they both decided to give up lucrative careers
at the same time at such young ages?????

So two of Morgan's brain power all of a sudden decide to
RETIRE voluntarily at the same time. DUFUS America,
no longer! You cannot buy this Enron drivel.

There is no free press in America. If there were, there
would have been an honorable discussion of what GATA
and Reg Howe had to say, ie, as so many other debated issues
such as health, etc, get discussed ad nauseum.

Why has the GATA evidence of gold price manipulation been
EMBARGOED by the US PRESS? Wrong am I? Do a Google Search
like Nick Laird of Australia did on the fired and corupt
Dinsa Mehta, a cabalist of The Gold Cartel, and see how much
you find on GATA or Reg Howe from the WSJ, NY Times,
W Post, Reuters, Bloomberg, etc, on one of the biggest
financial scandals in US history.

What a stink this is. The good news is that the GATA ARMY
is on a roll. We will bury these arrogant bums?



Black BladeHedging vs. Non-Hedging Gap Widens#7540005/11/02; 04:43:36

Yep, non-hedgers win hands down.
ArcticfoxPertaining to equities Cochrane states "sell in May and Go Away"#7540105/11/02; 05:49:38

5/10/02: Market Monitor --Frank Cochrane, President of Investment Timing Consultants

JEFF YASTINE: Our Market Monitor guest this week is Frank Cochrane, the president of Investment Timing Consultants, an investment advisory firm based in Farmington Hills, Michigan.And welcome back to NIGHTLY BUSINESS REPORT, Frank.


YASTINE: You were quite bearish the last time you were on the show, that was November 9 of last year where you were talking to Paul. Are you as bearish now as you were then?

COCHRANE: In fact, I think the next six months will be a major problem for the markets. What's happening right now is we're seeing a lack of confidence as far as investors are concerned, and for very good reason. The accounting woes, what they're hearing from the analysts, they wonder if, in fact, that's true or not, and companies such as GE, Tyco, Xerox (XRX), saying earnings aren't really what they are, we're restating them, are really lending credence to that. In addition to that, the employment picture is really not that positive. So I think those things coupled with the fact that the economy is on another downturn I think will reinforce that notion.

YASTINE: Now the last time you were on the show you gave Paul some targets, and these were for the fourth quarter of this year, sometime in that period. And you said the Dow at 5500, the S&P 500 at 500 to 600, and the NASDAQ at 600 to 800. So you're talking about a wholesale cutting in half of the major indexes.

COCHRANE: Yes I am, the situation in the Middle East still exists, I believe that the market went through a parabolic upswing from 1994 to, say, the first quarter of 2000. If you follow that, then we're going to witness a parabolic collapse - or a collapsing parabolic. And that will take these averages back down to the break-out level of 1994, which is right around 5000 on the Dow, say, 600 to 800 on the NASDAQ, and right around 500 on the S&P 500. In addition to that, if you look at simple valuation methodology, the P/E on the S&P 500 right now is 35, 30, depending on what number you believe, to get it back to a fair value would take it down to about the 400 level. So I think the earnings are going to either have to come up or prices are going to have to come down. And I think it's going to be the latter.

YASTINE: What about, and I don't want to belabor this, but what about the economic rebound that economic data appears to be pointing to, at least at this time?

COCHRANE: Housing is starting to slip again. Yes, the productivity numbers were strong. But that's going to stab in the heart of employment. You don't need to hire new people if the current skilled worker is working and being productive. So I don't think the economy, I don't think that's going to help in the longer term.

YASTINE: Again, when you were here last you gave us three longer term buys, Northrop Grumman (NOC), which is up 25 percent since then, United Technologies (UTX), up 21 percent, and Johnson & Johnson (JNJ), which is up about 4 percent. Would we hold onto those if we bought them at that time?

COCHRANE: Yes. I really don't like any stocks other than, say, gold stocks at this point time. However, obviously defense stocks will do well, I think, in this environment over the course of the next year. So certainly I would hold those.

YASTINE: All right, so let's talk about what would you be buying here if anything? you'd be buying Nightly Business reportgold stocks. They've already had a good run. Newmont Mining (NEM) is up something like about 50 percent just in the past four or four-and-a-half months.

COCHRANE: Yes. But gold was in a bear market basically for the last 18 years. I think we're starting to see the beginning of something huge. And I'm not talking about buying gold for the next six months, I'm talking about buying gold for a long - low gold stocks for a long period of time. So...

YASTINE: Any particular picks on that?

COCHRANE: Well, I would look at gold mutual funds, certainly. You can look at Newmont Mining, American - Barrick , Gold Fields (GOLD), any one of those I think you'll do well, just hold onto them. I'm not saying take your entire portfolio and put it in that. I would also raise a lot of cash here. Again, the next six months, I think, are going to be very, very sour for stocks prices as prices move lower. And in addition to that, I might have some short sell recommendations, anything in technology, more or less. But certainly I would look at the QQQs, which the NASDAQ 100 tracking index. IBM (IBM), I think, has a very good possibility of going down to the 40 to 45 level. And Dell Computer (DELL) I think can go down to the 10 to 15 level. So those are stocks that I would sell. I think they're overvalued here. There's too much P in this market and not enough E.

YASTINE: At what level? We have about 30 seconds left or so. At what level would the Dow turn you bullish? When it got down to 5500?

COCHRANE: Yes. I think in the 5000 to 5500 level. What we need to see is major capitulation, we're not even close to that yet. People are waiting for the next rally, a la last Wednesday, to sell into. We are not going to see - we will see rallies along the way, but nothing significant. But yes, those levels that I mentioned earlier would interest me in stocks.

YASTINE: All right, sir, we have to buckle our seat belts, it's going to be a bumpy ride is what you're saying.

COCHRANE: I think sell in May and go away.

YASTINE: OK. Frank, it was good talking to you.

COCHRANE: Great. Thank you very much.

YASTINE: Our guest, Frank Cochrane, president of investment timing consultants.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2002 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED

ArcticfoxI forgot the link for my previous post...#7540205/11/02; 05:54:50

Cavan Man@sector and IMF Gold#7540305/11/02; 07:48:31

In a world where a sizable population of governments and their bankers have chosen to operate a system that prices gold to market and depends on a solid gold underpinning; I think any attempt to sell IMF gold would be a "last straw" that could propel the world into a dangerous level of economic disagreement. Nope, I think the lumps are going to be handed out and taken and IMF gold saved for a rainier day IMHO...CM
sectorThe Fed is Desperate for Gold to Sell#7540405/11/02; 09:30:57

@CavenMan: Drawing Attention to GoldGate by "Selling IMF Gold"

Anything goes. But there are many, many more referees now.

The situation is indeed dire. The Fed's lap dog, Deutsche Bank has actually INCREASED its gold derivatives to about $40 wonder Ernst Weltke is running around babbling about selling bullion for "Interest bearing" equities.

As for JPM and Mehta, they are in trouble and dumping interest rate derivatives by the Trillions [$5Trillion last Qtr(20%)]. The Q1 2002 report is right around the corner and will tell a tale indeed. My guess is that JPM has dumped another 20% in IRDs and another boatload of gold derivatives.

Just where these derivatives are going is another question. How may "Dummest guys in the room" can there be? A five-year derivative maturity just can't be evaporated without producing the borrowed physical gold. This little fact is the fly in the ointment that has been the death of the gold manipulation plan from the beginning.

Spinning the death of JPM...What fine entertainment it will be!

It's already started...Mehta running his red-herring mouth about conspiracy theorists...this, from the guy who implemented Mahonia's offshore, tax- avoidance operations. It's like Kenneth Lay blaming Enron's losses on the S&P rating system...

"Our credit's GOOD! Didn't you ratings bozos visit our sixth floor, trading studio and see for yourself?

So…will the IMF gold sale story float next week?

There is no escape for the Fed and its now impotent banks. They may try anything.

R PowellGolden Bear#7540505/11/02; 09:35:25

Thanks for the silver/Buffett article.
Can I add that the author is not correct in stating that the Hunts tried to corner the market in 1979-1980. They entered the market in 1974 and had been rolling over long silver positions for years along with accumulating physical. There was also a group buying through Norton Waltuch of ContiCommodities. These included the Saudis and other middle east oil interests.
After the POS ran up enough to chase out the weak shorts, only the bullion banks and silver producers were left to take the short side. These basically total original costs plus storage and then sell at a higher price in the futures markets.
Even though trading was normal in the Oct. 1979 contract (normal as in no squeeze) a Mr. Jarecki of Mocatta Metals became worried over the situation. He influenced the market regulators, "So on Sept. 4, 1979, at a Comex board meeting, Dr. Jarecki suggested that silver margins be raised to $3,000 a contract, and daily trading limits doubled from twenty to forty cents. The board so ruled."
Then Walter Goldschmidt, the president of Conti, assured the board that there would be no squeeze, and instructed his traders not to increase long positions in the Dec. contract. But fear prevailed and the board, made up of many of those holding the short positions, soon limited the number of contracts allowable by an individual.
Eventually margins were tightened and then "liquidation only" orders were allowed to be traded. This order, of course, tanked the price of silver.
The Hunts during this time had complied by reducing their long position, rolling over contracts to future months (assuring no call for delivery in the current month which meant no squeeze) and had even offset positions with EFP (exchange for physical) deals with Mocatta, thus reducing Mocatta's short risk exposure. The Hunt's even offset for less than 99.9% silver in some cases. Paul Sarnoff in "Silver Bulls" my sourse of this information, is very clear that there never was a squeeze or even the threat of one! He backs up this contention with the open interest numbers from the Oct., Dec. 1979 and March 1980 contracts.
Mr. Sarnoff, at the time, was working for ContiCommodities where Waldech traded and personally knew many of these players. He was also a friend of our own CoBra.
What is of interest is that the guards of the Comex, making the rules, are self-regulated. Also, Sarnoff states that Goldschmidt, head of Conti, had a sign in his office that said, "He who holds the gold, makes the rules." This book was copyrighted in 1980. I'm halfway through my second reading. It's probably worth at least three but I have to return it to the library very soon as it's out of print and is an inter-library loan. It, like "When Money Dies" by Ferguson, were both recommended reading from the USAGold forum. Quite a place.
Happy Weekend and Happy Mother's Day to those who qualify !!!

Golden BearR Powell (msg#: 75405)#7540605/11/02; 10:02:05


I too noticed the erroneous Hunt corner comment in the article - I also found a copy of Silver Bulls at my wife's university and am reading it at the moment.

Thanks for the summary, and the recommendation in the first place to read it.


Old YellerFocus on Bush trade hypocrisy#7540705/11/02; 11:14:40

Good viewpoint on Bush's erratic and self-serving behaviour and the detrimental repurcussions on the world economy.

Many worldwide dollar holders are still held in sway of the myth of US economic dominance and open trade policies.These myths are now being exposed on a daily basis,and not just in the alternative information outlets that most of us frequent.The farm bill is an atrocious attack on free trade,giving blatant hand-outs to companies hardly in need of government largesse.The fact that Bush's "principles"can evaporate so easily in obvious vote buying,does little to invigorate claims that American economic policies are to be emulated by those further down the chain.

Why should the world accept the dollar based monetary system when the issuer of the scrip has so little regard for the wellbeing of other less fortunate nations?

Economic hegemons should lead by example,or they should be stripped of the "exorbitant privilege".It's as simple as that.Economic problems should not be solved on the backs of other,less fortunate players.`

jayzeeBuffett's Silver#7540805/11/02; 12:29:02

I have read the Buffett was forced to lease his silver which put that silver back on the market to hold down the price. It was threatened (or implied) that the government would give him a lot of trouble (IRS, etc.) if he did not cooperate.

Without the leasing, silver would have risen in price like Buffett thought it would, but TPTB could not allow that.

Cavan Man@sector#7540905/11/02; 13:14:57

Since so many of the gold derivatives are essentially private contracts, we do not have all the fine print. Perhaps they can be settled in FRN's. I cannot believe the FED and the US government have backed themselves into a corner with no way out. They've got options or at least believe they do. Default is an option. Inflation is an option. A change in legal tender status for the current dollar is an option. Taking the medicine is an option also if some among you have already been vaccinated. There must be other options?? Financial meltdown is not an option. Selling the IMF gold is not an option because there are several guns pointed at our heads. They'll work it out and a significantly higher POG will be one of the end results.

Cavan Man@USAGOLD or Towne Crier#7541005/11/02; 13:19:23

What are your opinions regarding IMF gold sales?
Cavan Man@ Forum#7541105/11/02; 13:20:25

Would anybody else like to weigh in on the potential of IMF gold sales? TIA...CM
Cavan Man@sector and FORUM#7541205/11/02; 13:23:40

If IMF gold is sold, wouldn't that be the end of SDR's and the "system" that was previously agreed to? I'm on thin ice (as usual) with knowledge but wouldn't IMF gold sales be the end of the current global monetary regime as we know it? Hopefully I've asked a good question for discussion and the best and brightest here will respond.
R Powelljayzee#7541305/11/02; 13:25:51

I've also heard many rumors and much speculation concerning Buffett's silver purchase and whether or not he has sold or leased some or all of it since then.
He started buying in the summer of 1997 and was not discovered until his broker, Philbro, was sued for market manipulation. He then disclosed that he had bought 89 million ounces and would purchase 40.7 million more. Interestingly enough, the suit was then dropped. Was there a deal made behind the scenes? I've speculated that the final 40.7 million ounces may have been settled with lease agreements thus delaying the date of actual physical delivery and in exchange for this, the suit was dropped.??
I've never seen anything definitative to answer the question. I don't think Buffett, being a buy and hold type guy, would sell at a loss. I've always been encouraged that he bases his investments on fundamental, supply and demand speculation. He also is reported to have the patience of Job so perhaps he's happy to place an open order to sell at a much higher price and wait.
Do you have any sources of opinion regarding Buffett's hoard? I'd love to have access to what he knows but, since that's not going to happen, I can only watch what he does. Of course, he knows that so the first thing he did with his silver was to deposit it in London where disclosure laws are more favorable towards privacy. Pretty smart fellow, that Warren. He also has a great sense of humor, similar to Will Rogers and Mark Twain.
Any other sourses of information??

R PowellQuote of the Week#7541405/11/02; 14:03:02

I just finished the rest of yesterday's forum, those posted after my brain entered sleep mode.
I greatly enjoyed Black Blade's final sentence in post 75371, "I swear most people on Wall Street are complete idiots." And here I thought they were just half-wit salesmen.

CanuckEuro storming#7541505/11/02; 14:18:54

Euro at 93.5 against USD?
mikalTV Financial News#7541605/11/02; 14:23:25

An anecdote today from another forum re: a cable tv news feed on gold scrolling along the bottom of the screen- gave the closing POG in Hong Kong. Along with interviews and other exposure, gold is phased back into awareness. This conditioning will naturally advance with time, adding fuel to the PTB's financial concepts and portfolios. This isn't such a hidden agenda anymore! @Cavan Man- Good points re: IMF!
AristotleThanks for the repost (#:75399) Boilermaker. I LUV Bill Murphy!!#7541705/11/02; 14:29:31

I like to cheer for the underdog, and Murphy is such an oaf he'll always, always always be an underdog, bless him.

Mehta, working for a very prominant commercial U.S. bank, gives him (Murphy) the goods, and instead of getting to the heart of the issue as we all have done, he just snarls and chases his tail for awhile.

Mehta says, "Bill, the world is changing."

Bill's reaction, "Dinsa, you need a breathmint."

Pause to appreciate the plain vanilla fact that Mehta is on the outs. Discussions of whether it was under duress or freely is itself a sideshow to the main event.

Since Bill likes to pretend he's hanging with the big boys in the world of Gold, let's help him out by showing him the one important thing Mehta conveyed through Tim's article at the Miningweb:

"Mehta says he advocated combining the bank's foreign exchange businesses as a single asset class and Bullion was positioned into that grouping."

Let me repeat this point: this comment didn't come from Euroland where we've all already been impressed by things like their "Washington Agreement" and the well-defined position of Gold with foreign exchange among the Eurosystem's reserve assets. No, the significance is that we now see this comment coming from none other than JP Morgan in the very heart of Financialand, U.S.A.

Gold. Get you some. --- Aristotle

PS. Nothing wrong with being an oaf. I, too, am a snarling tail-chasing oaf.

LeighCavan Man re IMF#7541805/11/02; 14:48:40

Cavan Man, this is from an old document my husband recently unearthed in his father's filing cabinet:

....Basically, what happened (in September 1975) is that the International Monetary Fund (IMF) was shot down as manager of the world's monetary system and was replaced by the Bank for International Settlements (BIS) in Basel, Switzerland. It is the most important single monetary event since the Bretton Woods Agreement of 1944, which created the IMF. It is one of those events which change history.

If it had not been for a Reuters dispatch in the small hours of Tuesday, September 2, 1975 we would not have caught the key phrase... "REAL CONTROL IS THE RESPONSIBILITY OF THE BIS." These eight fateful words were part of the longer message detailing the Gold Agreement reached on 8/31/75 by the "Group of Ten" finance ministers who met quietly on the Presidential yacht "Sequoia" anchored in the Potomac River on the two days preceding the IMF's annual meeting. This Gold Agreement was widely trumpeted in our press as being a final defeat for gold. Nothing could be farther from the truth, as we shall see. "REAL CONTROL IS THE RESPONSIBILITY OF THE BIS." Thereby hangs quite a tale.

The IMF and the BIS have been fighting since 1944. In that year, World War II was drawing to a close. Europe and Japan were bombed-out wrecks. There was no business - their only business was war. The only country that had any sort of an economy was the United States, which stood supreme. Our cities and industries were intact. We had $25 billion in gold. Nobody else had any. We were absolute Number One, in a position to dictate what the shape of the postwar world would be. So we called a meeting of the world's financial leaders at Bretton Woods, New Hampshire to tell them what an American peace would mean.

However, there were two jokers in the deck. The representative for the U.S. was one Harry Dexter White, a brilliant economist, soon to be identified as a Russian agent. The British representative was the famous economist John Maynard Keynes. Keynes was either a Communist or a Fabian Socialist, whose theory of deficit spending has warped the thinking of two full generations of economists in this country and England, with disastrous effects on the entire Free World.

Both White and Keynes insisted that the Bank for International Settlements be dismantled, and that the IMF be the only monetary authority.

The Bank for International Settlements was established in 1920, after World War I. Its name describes its functions exactly. It restored the prostrate economies of Europe and provided the machinery for settling debts of countries whose currencies had no meaning. The BIS represented then, as it does today, the hard-money, gold-oriented central banks of Europe who understood that the way to keep Communism from taking over the world was to stop the debauching of currencies which creates inflation and despair everywhere. No wonder Harry Dexter White and John Maynard Keynes wanted to destroy the BIS.

It was a close thing, but the BIS survived. Thus the battle lines were drawn between the IMF and the BIS, each going for the jugular of the other. At first the BIS was pitifully weak, and the IMF had things its own way. The dollar was supreme. Gold was fixed at $35 an ounce, and the dollar was officially declared to be the world's reserve currency. This meant that the dollar had the same value as gold and could be legally held as a reserve in each nation's treasury.

What all this led to was that the U.S. could simply issue dollars to buy whatever it wanted all over the world, and the other nations had no choice but to accept the dollars whether they wanted them or not. Thus was the world inflation started which would prove so devastating to other nations, but so helpful to the Russians. For some years no nation dared oppose the U.S. in all this, because we provided the military shield against Russia.

But the various nations were recovering from the war, and in 1957 the BIS people began to fight back. De Gaulle became French president in 1957, and he decided to test the theory that the dollar was as good as gold. He began to turn in dollars for gold at the $35 rate. This caused dismay in Washington, and De Gaulle was smeared in our press as the incarnation of evil. Other nations such as Germany, Italy, and Switzerland also began to claim our gold, adn in 1961 President Kennedy forced the Europeans to form the London Gold Pool to support the dollar at $35 an ounce.

The gold drain continued until one horrendous week in March, 1968, when the Gold Pool lost about $4 billion. In a panicky weekend meeting in Washington the Gold Pool was ended, but not until our $25 billion in gold had been cut in half, to about $13 billion. This dreadful gold run ended with the so-called "Gentleman's Agreement," in which the various Central Banks agreed by handshake not to buy gold in the open market. This preserved the shaky fiction that gold was still worth $35.

I first became aware of the BIS in late 1971, when an obscure item in the Federal Reserve Bulletin indicated that something called the Bank of International Settlements had bought ALL of South Africa's gold production for that year. After many inquiries it began to dawn on me that the BIS was the agency by which the Central Banks were buying gold for their own account. The BIS was not a party to the "Gentleman's Agreement," and not bound by it. The BIS could buy gold for its members' accounts and never report it to the U.S. or the IMF. By a coincidence, South Africa became a full voting member of the BIS in 1971, the first non-European nation to be so honored. (The U.S. and Japan were not then voting members, though they were permitted to attend BIS meetings as observers.)

CM, gotta go make dinner. If you're interested, I'll finish this up later.

R PowellGood Numbers#7541905/11/02; 14:56:59

Today's IBD, from page B2 where "Market Sector Indexes" list 19 different sectors with both the three month change and YTD change.
The very first listing is "Gold Index"
Since Jan. 1 +64.68%
3 month %change +32.28%
This same sector is shown with a chart on page B4 which also lists "IBD's 197 Industry Group Rankings"
There are, as the title indicates, 197 groups.
Yes, No. 1 is "Metal Ores-Gold/Silver" with 43 stocks in the group and the same YTD +64.6% gain.

Even if my friends still disregard my rantings of coming higher gold and silver prices, readers of the IBD will be hard pressed to overlook this news.
The guys next door have been trying to equate the higher XAU and HUI index numbers with coming advances in POG and POS. They've concluded that either mining stock company share prices must now be overpriced OR the price of the underlying company products (gold and silver) must be undervalued and due to rise. This seems logical. There are some good technical analysts there who discussed the matter and concluded that every point advance in the XAU should roughly corrolate to a $4.00 rise in the POG. If they're anywhere near right, POG/POS are now much too low. What? You knew that. It now seems certain that the stock prices are preceding and heralding POG and POS advances. I haven't the knowledge to say if this has been the case historically or if the reverse will be true after Joe and Jill momentum investment drives metal prices well beyond their "true" monetary valuation. I was totally ecomically ignorant during the 1980 bull market. Does anyone remember?

Cavan ManAristotle#7542005/11/02; 15:00:28

Ari....Thanks for picking that out. You're RIGHT! The comment went right over my balding head.
Cavan ManLeigh#7542105/11/02; 15:03:49

Thanks. I am very interested. Can you quote the source precisely.
LeighCavan Man#7542205/11/02; 15:08:12

I'll finish it after dinner. It gets more interesting! I believe it was written by a businessman in my husband's hometown, and it was a personal letter written to his sons. I don't want to quote the name and address because it was a private letter. The written is not a "public" figure, as far as I'm aware.
Leigh"writer" not "written"#7542305/11/02; 15:08:59

I'm having trouble spelling today....
R PowellLeigh#7542405/11/02; 15:24:44

Regarding 75418

Yes, please do continue!

Cavan ManLeigh#7542505/11/02; 15:38:01

I have seen it but please continue. It is about "the sting".
LeighCavan Man#7542605/11/02; 15:55:28

....Perhaps you can see why I became a BIS-watcher. Slowly I began to see that the BIS was managing and manipulating the entire gold market. They kept things cool, always held the low profile, and concentrated on winning by changing the rules of the monetary game. The first big change came in late 1971. It was a classic.

In August, 1971 President Nixon devalued the dollar by 10% and announced that we would deliver no more gold at $35 or any other price. Within a few months President Pompidou of France, a key BIS member, met Nixon for two days in the Azores. Pompidou persuaded Nixon that since the dollar had been devalued by 10%, gold should be raised by the same 10%. Nixon agreed, and announced that henceforth the official price of gold should be $38.00 an ounce. I shall never forget the look on Pompidou's face as he stood with Nixon in front of the TV cameras after that meeting. He looked like the cat with canary feathers all over him. He knew that the myth of $35 gold was finished, because if something can move an inch, it can move a mile.

So the gold rat-race was on. In a matter of months, the price of gold roared up to $70 an ounce, corrected to $60, then took off for $130, had a stiff correction at $90, and then headed for almost $200 before coming back to its present level just over $150. Pompidou had changed the rules.

That was the big change, until this most recent one on September 1, 1975. How does the BIS get its way, against the U.S. and the IMF?

I am virtually certain that the BIS gets its way by using our debt against us. This is the way all high flyers are brought down. The Europeans, Japanese, and Arabs have such enormous amounts of U.S. Treasury bonds that they can blackmail us any time they wish by refusing to renew these debts when they come due. If only about one-fifth of this debt were presented for payment in one month, it would close our banks. It is that simple!

With President Ford frantic to be elected in 1976, the last thing he wants is a banking crisis. So when the BIS boys come at him with that sort of a threat, he knuckles under like a pussycat, and the BIS gets back in control. How do you like that for a script?

Despite the fact that the press brayed all over that this September 1 Gold Agreement was a smashing defeat for gold, let's look at some other things the BIS crowd won:

1. Central Banks can now buy gold for their own account. No U.S. president since Roosevelt has ever agreed to such a thing.

2. The IMF is going to return one-sixth of its gold to the original contributors, at $35 an ounce. This was heralded as "phasing gold out of the system," but all it is is phasing gold out of the way. In five more years, the IMF won't have any gold at all, so it is the IMF that is being dismantled. This means that no IMF or U.S. sale of gold will ever depress the price.

3. The official price of gold is now abolished. This means that the only actual price anywhere is the market price. Each nation thus has a vested interest in seeing that the market price goes as high as possible. This includes the U.S.

4. There will be no official price for gold for two years. Translate this that there WILL BE an official price in two years. In other words, Mr. Ford agreed to make the dollar convertible into gold at whatever the price of gold is in September 1977, long after he is either defeated or re-elected. No skin off his nose here.

Well boys, that is what I wanted you to know. (Semi-personal stuff concludes the letter.)

Cavan ManThanks Leigh#7542705/11/02; 16:06:43

That's a different tale. The BIS: CBers bank. Who is the BIS's bank? Who's at the top of the food chain.
Paper AvalancheCNBC on Friday#7542805/11/02; 17:05:22

Greetings! Long time lurker, first time poster. Did anyone notice yesterday on bubblevision (CNBC) that there was a split location broadcast? Ron Insana was at the NYMEX (or maybe it was the COMEX) and Sue Herrera was on the usual set on the floor of the NYSE. I thought that it was a watershed event when CNBC began to show the price of gold along with the futures in the lower right hand corner of the screen before the market open. That was just a few weeks ago. If they begin to broadcast the Market Wrap show with Ron and Sue from the commodities / stock exchanges from this point forward, then this will tip the media's hand that they have bought the new paradigm of gold and they don't want to be late to the party. If I see on CNBC this Monday that this has become a permanent fixture of the Market Wrap show, then its time to bet the farm. I will be giving a call to our gracious host, Mr. Kosares to "load up."

Did anyone else see yesterdays CNBC show that I am citing? If so, are you aware of this being a one time deal (I only saw the last 30 minutes and didn't catch if this was a special show).

This whole gold thing is too much fun. Take Care. The paper avalanche is on its way.


Golden BearFrom The Daily Reckoning Weekend Edition#7542905/11/02; 17:17:13

FLOTSAM AND JETSAM: Uncle Harry serves up a delicacy at
the Dos Passos table at Le Metropole Cafe. Could gold
could go as high as $529 an ounce?

The Dollar And Gold
- Harry Schultz

"...The dollar in modern economies and modern psychology
plays three distinct roles.

1. ÿIt is in a practical sense an income
earning vehicle held both as a reserve currency
externally by individuals and governments.
2. ÿIt is the common share of The United States
3. ÿIt is the largest world medium of exchange
in facilitating the transfers in world trade.

The Dollar therefore is the world's largest trading
market in itself. Historically, during periods of US
dollar strength the demand for gold has weakened. It may
be said that the there are only three markets that need
to be fundamentally understood, and the knowledge of all
other markets are then in your grasp. Those markets are
the US 10- year bonds, the US dollar and Gold.

The 21 year disdain for gold and relative attraction of
the US dollar has not declared Gold dead. Gold is quite
alive as it has efficiently played its role in the three
part relationship between the key markets that reflect
all else tradable in the world.

Budget Surpluses in the US and healthy Current Account
Balances due to ebullient stock and bond markets on
balance during the past 21 years has cast a long shadow
over gold. Gold is and will remain a currency investment
vehicle which runs counter to the concept that
government are running the financial household
prudently, therefore the modern concept that real
lasting value lies in paper assets. It does not matter
if we are discussing the Roman Republic, the Weimar
Republic or Argentina today; the concept is just the

Great Britain played, in the early 80s, with every
plausible excuse to accept growing Current Account
Deficit Balances as acceptable. The Bush financial
administrators are doing the same today. It is not
surprising that the USDX (US Dollar Index) which had
risen from 65 to 121 has formed a Head & Shoulders top
technical price formation with deteriorating momentum
indicators. This formation is looking every day more
like a confirmed top on the long bull market for the

Where can the US Dollar go?

For two generations our money managers and business
school students have experienced a declining on-balance
gold market price. Central Banks have sold their gold
reserves, attaching those sales to many reasons from non
performing asset to barbarian relic.

It has been politically incorrect to discuss gold in the
halls of ivy attached to the word currency. That
Jurassic Age concept, as the business students and
modern money managers feel, is believed to be a relic of
the unenlightened period of gold exchange standards and
the discipline of the exterior trade forces upon a
nation's economic condition.

They would ask: How could a major power stand for such
nonsense if gold was flowing in or out of the treasury?
Was it not more productive to control the printing of
paper along with every other economic factor and markets
while handling the news media as the spin city tool of
economic well being? Well, it has worked, but there may
be limitations.

The crack in the armor of any "controlled economy" is
that in time, ever more & then too much needs to be
controlled. Assuming our technical reading of the USDX
and the strength of the US Dollar is correct, then what
is that market responding to? It is the growing US
budget deficit and growing US current account deficit in
an environment of a lower US stock market and
potentially lower US bond market later this year. There
is no question about the US budget deficit and there is
no question about the deficit condition in the current

History is a great teacher of how people who are in fact
the market, react to economic circumstances. It is also
a historical fact that all large current account deficit
conditions with concurrent large budget deficits cause a
significant fall in the market value of the country's
currency. In fact, what history says is that such a fall
would occur at the time that the current account deficit
reaches 5% of the GDP or similar past measures. Further
the fall in the currency usually amounts to 38% to 42%
of its previous bull markets. How high can gold go as a
result of a fundamental decline if the US Dollar?
In my opinion, based on the 40% mean decline in a
currency, considering this historical perspective and
relating that to the gold price, a one year fundamental
US dollar bear market measured by the USDX that results
in the USDX at 111-112 would place gold at but not above

A two year bear market in the US dollar in which at any
time the USDX sold to 99 and a gold price of $529 is
possible. This will result from the 5% GDP 40% currency
market revaluation precedents.

The bullish wild card for the gold price is the
extremely large short spread position on gold bullion
via gold derivatives represented by the gold producer's
hedge positions of a proportion few even today would
consider possible unless they did the research (as we
have) and saw the figures for themselves..."

Golden BearAlso from the Daily Reckoning#7543005/11/02; 17:28:36

The Cisco Mirage...

The Daily Reckoning
Weekend Edition
May 11-12, 2002
Paris, France
By Addison Wiggin

MARKET REVIEW: Cisco Head Fake And The Price Of Gold

"Want an interesting exercise?" asks the untiring John
Mauldin, fresh back from Mexico. "Go to Get a quote on Cisco. At this moment
the consensus estimated forward earnings are projected
to be $.35 with a Price to Earnings (P/E) ratio of 59."

"But if you go to and retrieve the same
information, you find they suggest earnings at $.15 with
a P/E of 102. If you look at the 2001 year fiscal year-
end for Cisco, you find losses of over $1 billion
dollars. ÿ

"Who is right? Looking at the actual quarterly tax
filings, apparently uses past or trailing
actual earnings. Bloomberg uses projected pro forma
earnings, and of course don't refer to those
inconvenient write-offs that will happen later this
year, which will possibly once again have the company
showing a loss."

And so... the same "company which said this week," Mauldin
continues, "'Sales are flat, we are not sure when we
will see some real growth, but we fired a lot of people
and cut costs so we made more money than you guys
projected,'" goosed the Dow up 300 points Wednesday.

But these days, Enron-weary investors tire more quickly
of such bull market shenanigans. The Dow gave most of
the rally back by the close on Friday, leaving it just
shy of 10,000... down 66 for the week. The Nasdaq and S&P also
fell... each for the third week in a row.

Meanwhile gold has been attracting attention as if it
were the late '70s rather than the early '00s. "A month
from now, a year from now, five years from now - you
choose the timing because I won't," wrote
CBSMarketWatch's Tom Calandra yesterday, "gold is going
to be trading three to six times what it is now."

AristotleCavan Man, I'll give the IMF Gold sales a go#7543105/11/02; 17:36:29

Since I continue to hold that One previously-promised post close to my vest for the time being, I'll try to make up for it by jumping into this issue a little bit. Can you help me out by telling me which of the recent days at the forum had some of the preliminary talk on IMF sales? Then I'll be able to look it over and respond more specifically to the particulars of the issue being raised or questioned. However for now, frankly, seeing some form of revival of their 1999/2000 off-market "sales" program would not only fail to surprise me, I'm expecting it some day.

On another note, I took a look through the Gold derivative dialog between you and sector. What got my interest was the part where sector said,

"Just where these derivatives are going is another question. How may "Dummest guys in the room" can there be? A five-year derivative maturity just can't be evaporated without producing the borrowed physical gold."

Derivatives, like Tolstoy's "War and Peace," lots of people talk about it but few of them have actually read it. You made this point nicely with your subsequent comment about our access (none) to the fine print on these private contracts.

Let's back up a bit. When looking at the available figures on the quantity of outstanding Gold derivatives, many Goldbug commentators blithely say that there's no way that real Gold can possibly be found in adequate volume to ever close out these derivatives.

Well, my friends, I submit to you that this same thinking should pose quite a problematic little riddle: Where did the necessary quantity of Gold come from to write (initiate) these derivatives in the first place?!

To be sure, an impressive volume of derivative business has ties to physical settlement, but much does not. It's purely notional from beginning to end, often serving a hedging or cashflow purpose to sophisticated participant in a Perfect World (a key point), and sometimes giving a lesser party the illusion that they have speculative exposure to (or actual ownership of) Gold. They don't. COMEX futures or options provide a good, high-profile example of this latter condition. Additionally, here's a very important news flash. We DON'T live in a Perfect World.

Not only can a "five-year derivative maturity" be "evaporated" without producing the physical Gold, it's highly likely that it was written without the Gold to begin with. Such is the nature of many swaps forming the bulk of derivative volume. Simply put, huge notional value, conjured at will, underlies contracts to exchange cashflow between counterparties based on financial indicators. For any desired notional principle, commodity swaps based on fluctuations of futures contract prices really are little different than interest rate swaps based on fluctuations in LIBOR.

Because these frequently represent nothing more than a two-way cash flow, (often in which only the differential is paid -- netted out if the counterparty service payments are on similar schedules) it's possible for one counterparty to terminate the agreement prematurely without affecting the outside market in and of itself. The consequences would be a reduction in the outstanding derivative position, and there is a possibility that the other counterparty has unwanted "exposure" and replacement costs to fill the original term of the truncated swap.

Of course, the counterparty's action following the premature termination is forevermore unpredictable -- depending on their original motivations for participation. If this swap was part of balancing exposure within an elaborate book, then laying off this risk becomes an important incentive to do more than merely accepting the swap's termination. It also shakes confidence in counterparties, and where Gold is concerned, it begins to undermine the important illusion that derivative instruments are viable substitutes for Gold. And so it begins, but not quite in the direct way that many people tend to think.

I'll leave it there, for all the obvious reasons.

Gold. Get you some. --- Aristotle

R PowellPaper Avalanche#7543205/11/02; 18:21:26

There is an occasional poster who once stated that he saw this forum as a chance to learn, profit and have fun. He often appears when silver is mentioned. Your "This whole gold thing is too much fun." reminded me of that. Personally, I spend a great deal of time researching commodities but I've never taken myself very seriously. I don't mean to belittle what gold represents politically which is serious business (liberty) but I appreciate fun (humor) everywhere. Glad to see you mention the same.

Canuck@ Aristotle#7543305/11/02; 18:27:15

"Since I continue to hold that One previously-promised post close to my vest for the time being....."

Yes, you do.

Golden Bear@Aristotle#7543405/11/02; 18:35:56

And I'm wondering what set of circumstances are required for that post to be made public.... fascinating.
YGM"YOU FEW"#7543505/11/02; 18:42:51

Hark, good people, come gather round,
Come listen to my ramble.
I raise my voice, to warn you few,
Beware the Bankers gamble!

The paper pushed, with naught but ink,
While they lust for Gold and Silver,
The promise made, in Paper trade,
Is one they can't deliver!

Now history repeats itself,
While mongers con the fool,
A fraud on you they perpetrate,
And Paper is the tool!

Aye, my friends, your Gold you trade,
For Bankers worthless Paper,
They're after all, all you're worth,
The Banker's greatest Caper!

What now you say, can we regain,
Our lives worth saved so dearly?
Ah yes dear hearts, we shall design,
To turn the tables clearly!

These men have faults, they're quite depraved,
They think mankind so blind, no clue,
So print and press, both night and day,
And give this Paper false value!

Awake you few, we must conspire,
To give Paper back when able,
Buy Gold and Silver, to keep and hold,
And hence we've turned the table!

Now when in future, not yet seen,
Banks locked, all darkened and despaired,
Some of you, past vision gleaned, remain,
The wealthy few, too few whom, made safe, prepared!

......YGM. (bored here obviously)

LeighYGM#7543605/11/02; 18:48:18

That was great!!! I wish you'd been here a couple of months ago during our poetry contest. You are very talented.
R PowellAristotle#7543705/11/02; 19:01:22

Thanks for your thoughts (75431).
If I'm reading correctly you said that a great deal of the huge derivative position that GATA and others claim amounts to an unpayable debt is, in reality, speculative bets that (1.) will be settled in fiat (2.) don't amount to the full value of the contract (or anywhere near full $ value) but rather the difference determined by the change only in the underlying asset.
Example: If I sell one future contract of gold at $320, I've sold 100 ounces at $320 = $32,000. However, if I offset by buying back the same contract with gold at $330, I've lost only $10 x 100 ounces = $1000.
The offsetting of so much of this seems confused with the total dollar value which would be needed to deliver or take delivery which so seldom happens.
Have I got this right? If so, I'm glad you said it as I've seen so many get flamed for so stating. I hope I've understood correctly as I agree entirely.
As for physical actually sold into the market over the many years of the gold-carry trade, that many be another matter, if it was really physically sold (and gone) which has been much discussed but, to my knowledge, never definitely answered. I remember MK saying that the actual amount of central bank drawdown, over these many years, amounts to only about 3000 tons.
Am I reading this correctly?

Golden BearYGM (msg#: 75435) "YOU FEW"#7543805/11/02; 19:17:35

Inspired writing YGM, Thank you. The new call to arms for all Goldbugs methinks...
sectorIs there Gold in Gold Derivatives?#7543905/11/02; 19:22:51

Somebody [The IMF] seems to think so...


Where did the necessary quantity of Gold come from to write (initiate) these derivatives in the first place?!

Gold Loans and/or swaps.

As to the question of whether the underlying financial instruments can be evaporated without accounting for the original gold, I offer the opinions of the IMF's 1999 Santiago, Chile Conference as described in this previousy unpublished manuscript:

Seeing Double

The IMF Admits to Double Counting Gold Reserves in Gold Swaps

In a recent seminar on gold swaps and gold loans the IMF has admitted to double counting gold reserves.

The Twelfth Meeting of the IMF Committee on Balance of Payments Statistics, Santiago, Chile. The Macroeconomic Statistical Treatment of Securities Repurchase Agreements, Securities Lending, Gold Swaps and Gold Loans. October 27-29, 1999

This meeting held important discussions on gold swaps, repos, gold loans, their definitions, legal implications and rising gold swap and gold loan volume as an IMF financial transaction class: <> Page 9

Gold Swaps

"Under a gold swap, which, in principle, can only be undertaken between monetary authorities because gold swaps only involve monetary gold, gold is exchanged for foreign exchange deposits (or other reserve assets) with an agreement that the transaction be unwound at an agreed future date, at an agreed price. [Emphasis added]

On page 12 there is a full-page table, a kind of checklist, showing similarities and differences between gold swaps, gold loans, repos, securities lending etc foreign currency liabilities incurred by gold swaps are also discussed.

Then on pdf page 17 there is a particularly clear passage with references to the BPM5 [Balance of Payments Manual fifth edition] Para.434

" Deposits (in foreign exchange) acquired by the central bank initiating the arrangement are treated as reserve assets because the purpose of the exchange is to provide the central bank with assets that can be used to meet the country's balance of payments needs. Reciprocal deposits acquired by the partner central bank also are considered reserve assets. Arrangements (gold swaps) involving the temporary exchange of gold for foreign exchange deposits should be treated in a similar fashion"

In other words, gold swaps are to be considered transactions in the underlying instruments (monetary gold and foreign exchange) and not as collateralized loans.

In assessing what is the appropriate treatment of repos, securities lending, gold swaps and gold loans it is important to bear in mind that the substance of the transaction, rather than just the name used to describe it, be examined so that the principles in these systems are not overlooked." [Emphasis added]

In section VI Recommended Treatments on page 22:

3. For Gold Swaps

(i) that they be recorded as collateralized loans when exchanged for cash
(ii) that the cash provider may or may not record the loan asset receivable in reserve assets, depending on whether it meets the reserve asset criteria
(iii) that the cash provider record a memorandum item "gold held under gold swap"

4. Gold loans/deposits

Gold swaps pose particular difficulties because of the implicit change in nature involved in the transaction (from monetized to nonmonetized). For monetary statistics, the present treatment is to record a transaction. To change to recording no transaction would involve making substantial changes to some time series. On the other hand, the Provisional Operating Guidelines for the Data Template on International Reserves and Foreign Currency Liquidity treats gold loans/deposits as if there had been no transaction. The full implications on monetary statistics need to be fully explored before a recommendation can be made on the appropriate treatment of these transactions. [Emphasis added]

On it's face this document has significant value to those interested in finding the truth about gold swaps and loans. It seems to represent a detailed accounting seminar, containing a kind of play book on modern IMF gold swaps and other advanced financial methods. On page 36 of the document I find detailed accounting examples for the treatment of gold swaps, complete with alternate conditions for differing prices of gold (Although never a rising gold price condition and always oriented towards the central bank seller of gold). The examples show starting and ending balances in detailed tables. There are ten more pages of gold swap and gold loan examples complete with the following comment at the bottom of page 36:

"...[As a result of the gold swap between countries G and H]...What has happened here is that global gross international reserve assets have been increased (in this case, by 3000) 39. However, global net international reserves remain unchanged, that is, taking the loan payable by G into account."

39 This effect, of increasing global reserve assets through a gold swap — when treated as a collateralized loan — compares with the recommended treatment for a repo as a collateralized loan. In the latter case, the repoed asset, while retained on the balance sheet, is removed from reserve assets and is reclassified to portfolio investment and has no net impact on global reserves. This is not the case with gold swaps." [Emphasis added]

I read this passage as recognition by the IMF that gold loans and swaps falsely increase the global net reserve — an important IMF admission of accounting culpability in the public reporting of gold reserve assets. Could this questionable practice be the source of the West Point "custodial" gold classification, which I brought to light on March 7, 2001 in letters to the Treasury's legal counsel? Could it be that an honest treasury accountant recognized that the West Point Mint gold (20% of US totals) had moved out of US ownership as a result of one of these "gold swaps" soured by the Washington Agreement gold price rise and that we were now only its "custodian"?

In addition, on page 41 we find even more clarity from the IMF as it discusses their questionable gold reserve accounting practices:

"[Regarding the gold loan example between {country} K and {country} J] The net result is that no transaction is recorded by the monetary authority. There are unsatisfactory aspects to this situation. Firstly, the gold would be recorded in two places at the same time, in different classifications. On the one hand, were the gold loan to be recorded as part of reserve assets, it would be monetary gold. On the other hand, the gold, the actual physical gold, which was demonetized and either held by {country} K or {country} K has sold into the market (or had it exported), will be recorded as part of the inventory of the commodity gold. Secondly, if the gold loan receivable is included as part of international reserves by {country} J, there is no counterpart entry in the system to {country} K's loan payment to {country} J. As a consequence, the system will be out of balance on two counts: for the commodity and for the loan financial instrument, the result of the dual nature of gold."

In the following paragraph the IMF offers three possible solutions: (i) not to classify gold loans as monetary gold (ii) to record a gold loan as a transaction in the commodity gold and (iii) create a fictitious loan liability.


This IMF Gold Swap Seminar document admits double counting of world gold reserves as a consequence of gold swaps and gold loans. It also expresses serious internal concern that generally accepted accounting standards have been breached by this practice. The level of concern is such that the IMF offered no recommended monetary statistical treatment for gold loans/deposits. In light of the seminar workshop nature of this meeting combined with its ten pages of gold swap, gold loan and gold deposit examples it is reasonable to conclude that gold swaps and gold loans are not an insignificant component inthe IMF's activities. Moreover, it shows that there is rising internal IMF unease over gold swaps and gold loans per se. This document also confirms the liability mechanism (double counting) by which a vast gold short position (Estimated at 12,000 tonnes) has accumulated as previously reported by Frank Veneroso. Finally, since the FOMC transcripts show the US to have participated in gold swaps "Swapping Lies…Fed and Treasury Hanging Themselves" - anchor353442 the Federal Reserve must have therefore double counted its own gold reserves in accordance with these still current IMF procedures, thus calling into question how much US gold is US owned…if any.

August 28, 2001

1. The September 2000 US Mint change in designation of 1,700 tonnes of West Point Depository gold bullion reserve to "custodial" classification may be an inadvertent manifestation of treasury double counted gold.

Cavan ManAristotle#7544005/11/02; 20:01:04

Hi. Thanks for your thoughts. I am just an instigator; trying to dredge up some discussion about the IMF. The gold if any within their friendly confines must be the very last card in their hands. I think they will leverage it at a higher price in some sort of necessary transition rather than pulling the old B of E funny business.

PS: Sector.....Thanks also...CM

R Powellsector#7544105/11/02; 20:04:00

Can I state the obvious? That's not easy to follow.
If I made an analogy that the IMF has taken two mortgages on the same house, both mortgages for 100% appraised house value, would I be close?

The Invisible HandNovember or March – decision on UK euro entry#7544205/11/02; 20:43:32,,182-293441,00.html

Snippets from tomorrow's London Sunday Times

YOU have to pinch yourself sometimes to believe it. But we are within months of one of the most momentous decisions ever to be taken by a British government.
That decision — whether to join the euro — is at most 13½ months away, and probably quite a bit less. The two most likely dates for the Treasury to publish its assessment of the chancellor's five economic tests are November and March. It seems unlikely that we could go through another budget without a decision on the euro.
On the surface all is calm.

Even so, some senior Treasury officials — not necessarily those engaged in the nitty-gritty of the assessment — are involved in the comprehensive spending review, which will not be finalised until July. So are the chancellor and his advisers. That is why autumn looks to be the earliest.

Off stage, however, things are happening. The Treasury denies that the government is in paralysis over the appointment of Sir Edward George's successor as governor of the Bank of England because of uncertainty over the euro

It was left to Ernst Welteke, the Bundesbank president, to suggest that euro entry would do more for Britain than for the existing euroland countries.
He believes that because about 10 new members will enter the EU in two or three years’ time, there is a window of opportunity for UK euro entry. The Bundesbank thinks the euro would be strengthened by UK participation.

The euro has recently gained about 5% against the dollar, consolidating a position above 90 cents. This is despite an unhelpful backdrop of strikes by the IG Metall union in Germany and mixed economic data from euroland.
Euro bulls say this marks the start of a process in which, finally, America's $400 billion current-account deficit will start to weigh down on the currency. CSFB notes that the dollar has moved in broad seven-year swings in the floating-rate era that began in the early 1970s, and that this could be the start of a seven-year bear market.

Where does that leave us? Public opinion is not an insurmountable barrier to euro entry and neither, it seems, are the five tests.
The National Institute of Economic and Social Research, in a three-page analysis, has just declared that the tests have been met and it has not been as seriously challenged as might have been expected. If this was a dry run for the official assessment, which will be hundreds of pages long, pro-euro voices will have been encouraged.
What euro entry does not pass, of course, is the common-sense test. One can argue that there is a serious "one size fits all" problem for euro entry — that it is not an optimal currency area. But there is no need to go so deep. Through design and luck Britain has a successful policy framework and has been doing very well.
Would that performance improve further inside the euro? It could — but it would be a huge risk. The downside of entering at the wrong rate, the wrong time and for the wrong reasons would be enormous. Common sense dictates that if it ain't broke, why try to fix it

sectorTwo Mortgages on the Same House...Its Much Worse...#7544305/11/02; 20:55:59

The Second, Third and "Nth" Mortgage [For the same house] has been let and then sold by many players.

The IMF participating banks, which are the vast majority of central monetary authorities and their member banks, have lent and swapped gold and have double counted that gold on their books. The lender and lessor BOTH get to claim they own the same lent or swapped gold according to IMF rules. Never mind that IMFs own accountants object to this obvious accounting ruse.

This action has overstated the world gold reserve numbers by vast amounts and understated the huge physical gold liabilities of the lenders or those who were dumb enough to participate as counterparties.

That gold has been used in a large web of derivative instruments and must be returned at some point.

The Washington Agreement gold price rise consumed at least 1,700 tonnes of US physical gold. This gold was first accounted for in the West Point FMS report. Then, James Turk and Andrew Hepburn found , in the GAAP compliant US Consolidated Financial Report 2001 in "Gold and Foreign Currency" as an extraordinary $20 Billion book-entry item.

To imply that there is a painless exit to the accumulated gold derivative/loan problem is incorrect. The double counting of gold is another Enron-Style scandal waiting for the trip wire.

silvester@all#7544405/11/02; 20:59:07

I've read you for years now. Long enough to get a real understanding. Had time so far to only skim todays work but can tell I must take my time with this. Amazing information available right here. Thanks so much to all.
Canuck@ Aristotle, anyone.#7544505/11/02; 21:23:17

A little story, if you have the time. The underlying theme is my ignorance of derivatives.

A derivative, as it has been explained to me, is an 'investment' borne (derived) from an underlying asset.

Is this a leveraged 'bet' to protect oneself from the untimely movement 'away' from one's hope? I understand this to be the traditional commodity 'hedged bet'.I understand that if a farmer has corn to sell and anticipates to sell at harvest at $X per bushel he may 'hedge' production in the form of a put option at X-Y so that in the event of a downturn in the price of corn he will maintain anticpated profits. Speculation, however is another thing.

ORO once mentioned that a horse race is a 'deviratives' game, a bet. Thousands may be placed on 'Flash' to win but regardless on the outcome of the race 'Flash' is not on the auction block. Cash exchanges hands until the next expiration (the next race). In the next race, millions exchange hands, 'Flash' does his thing, the underlying asset (Flash) remains a horse. The house, aware of 'Flash's' attraction to 'interest', demands a premium, bets are placed, monies are exchanged and he gallops to victory again. Flash is a star, a money magnet. His inherent VALUE increases, he may win the race, but he wants a bigger cut of the prize money, his purse increases from $10,000 a race to $100,000 and finally to $1,000,000. In the second last race, 'Flash's' 'interest' is overwhelming, billions of dollars are bet for the win, his cut is unbelievable. His owner boasts that he is worth $3,500 per ounce. Now is this his real worth or a worth derived from the unbelievable bets placed on him? The bets have increased his worth, yes? The horse has a spill in the second corner throwing the jockey, 'Flash' has torn a tendon in his knee, several months to recover. As time passes, bets fly that he will never recover. A miracle prevails, he is running after 6 weeks. The final race of the year draws near, 'Flash' over 3 seconds slower in the 1 and 1/8th looks doomed but as each day passes his time inproves. On race day he is still half-a-second off his prime but 'interest' is unbelievable. Billions of dollars are laid, but the usual odds are waining. 'Flash' falls and falls, finally odds at the post favour him at 3:2. The horse runs his heart out but the tender knee proves too much, he loses in a photo finish.

Does this have anything to do with gold? I hope not!

I will bet you that gold is not $10,000/oz. next week. I believe that is called writing a 'call option'. I will bet you that gold is not $20 next week. I believe that is called writing a 'put option'. I have no gold to back up my big mouth, I believe that is 'naked' writing. I will bet you that gold is not $31,000/oz. in the next 50 years. Let's see what kind of 'action' this brings.

I bet you that gold hits $313 next week. I want to offer that bet. I believe I want to buy a 'call option'. So let's say a million people agree with me and want this 'interest'.
And a half-million disagree. So now we have some 'odds'. The 'bet' is placed. A 'bookie', of course, is going to look after things for his cut. Gold rises next week to $312.80 and I lose the bet, the money is sorted out, end of story, yes?

Ok, the following week the USD has ailments, the ME gets erratic, a host of gold bull rumours break and gold has 'calls' of $321. Billions of dollars are bet, managed by the house of 'Comex'. So we have a pile of money placed 'long' and little 'short' putting the odds at some 10:1 at $321.

Now here is the sticky part. The longs/shorts are aware of ALL the supply/demand fundamentals, and ALL the technical mumbo-jumbo, and ALL the political ramifications.

How is it not possible then, that the vast disproportionate amount of money bet, naked, covered or otherwise, not going to move the spot (real) price of physical gold?

I don't know if I said that correctly. If a zillion people are betting gold up and a million are betting it down, sentiment (and logic?) will bring it up, yes? I see gold stocks as a intermediate,(between gold and options) if the stocks lead up, will gold not follow? Are the traders not implying confidence and leadership in the metal? Does the old handle of buying a (good) gold stock and having a permanent 'call option' on the price of gold not have merit?

I am sorry about this probable non-realistic view of derivatives but man-o-man am I having a hard time with it. I hold an ounce of gold in my hand and I see the 'Real McCoy'. Leaping from gold in hand to 'paper' bets is proving to be a mind-bender.


Canuck@ R.Powell#7544605/11/02; 21:42:05

The amounts of CB held gold is on the WGC site. Black Blade and I discussed the physical 'shell game' goings on. Yeah, 'swap and loan', 'shell game', call it what you will gold is being held, not sold!!!!!
Canuck@ sector#7544705/11/02; 21:47:43

You are a good man, Mr. sector.

Thanks for the reminder about the 'double -counting' accounting. Maybe that Phillipine CB 'admission' article is due at this time. The one where they said a pile of gold was leased (gone) but was still on the books as 'inventory'.

The article was part of their quarterly 'reserve disclosure'. This article was followed by a few similiar versions, including your aforementioned story.


CanuckGod fearing JPM analyst's new outlook for gold#7544805/11/02; 21:52:57

Max RabbitzPositive Gold Story and Leigh#7544905/11/02; 22:20:29

"Bullion for you: it's a new golden era" by Leo Lewis from the UK of all places. Positive for gold but nothing really new except for maybe this....

"The (Washington) accord has brought a new sense of order to the market, effect eliminating many of the sudden price plunges that accompanied the old announcements of central bank sales. It out in 2004, and many are expecting a renewal of its terms, probably for at least a decade."

Thanks Leigh, It sounds like it could have been written by Another or his Friend, Sir Douglas.

"I am virtually certain that the BIS gets its way by using our debt against us. This is the way all high flyers are brought down. The Europeans, Japanese, and Arabs have such enormous amounts of U.S. Treasury bonds that they can blackmail us any time they wish by refusing to renew these debts when they come due. If only about one-fifth of this debt were presented for payment in one month, it would close our banks. It is that simple!"

Mr Greshamsilvester#7545005/11/02; 23:14:28

I think you've caught the essence of reading and participating here. We keep going over things from different angles (like Canuck going through derivs so thoroughly) until we get it, until it sinks in. When we look back just a year or two, we see how completely brainwashed we've been most of our lives, sleepwalking really, with regard to the valuing of our labors and savings by this monetary system. A mass hypnosis we are trying to wake up from. On this basis, it shouldn't be embarrassing that it takes us so much work and helping each other see our way.

It isn't just about "money", or about picking a "get-rich" investment.

Gold is just the flashlight in the dark, and a flicker now and then seems to be enough to light the Trail, at least on the wide, level parts. If there are any sudden drop-offs ahead of us, I hope someone will sing out in time...

Black BladeBullion for you: it's a new golden era#7545105/11/02; 23:36:34

As shares lose their lustre and the dollar rusts, the metal is dazzling investors. And this time it's no flash in the pan


As global stock markets falter, and share portfolios continue to dwindle in value, many fund managers are coming to an alarming conclusion: their wedding ring may be the best-performing asset they own.

We are now more than a third of the way into 2002, and the much-vaunted recovery seems to be having trouble taking hold. World politics are messy, oil prices high, equities look dangerous and even the mighty dollar has taken a beating. Is it a coincidence that, for the past four weeks, the price of gold has stayed above $300 an ounce, and is still rising?

Not only is this the metal's most sustained run over $300 for four years, but it comes on the back of a long rally that has lifted gold by more than 16 per cent over the past 12 months. It has significantly outperformed the big stock indices in all the leading economies, and strategists take the surge in gold as a sure sign equities will stay in the doghouse for some time.

But this latest rally has raised some serious questions about the precious metal, and even the gold cynics are taking a second look. The price rise is looking far more sustainable than at any time in the last five years and there are already analysts suggesting that the days of weak, volatile gold could be over. Bullion is suddenly looking like a serious asset class again, and the emphasis now is on working out what factors are going to keep the good times rolling.

Black Blade: Yep, it sure looks like Gold will be doing much better. Tonight I was throwing back a few with an acquaintance with ties to Barrick. He say's that there is some very serious concern at Barrick that the POG may rise to $350/oz. And if it does the losses could be in the $Billions. I didn't press him as he appeared as if he had already said too much. I think that is the reason behind the sudden change of heart at Barrick and AngloGold about hedging and their sudden interest in unwinding the hedge books. I haven't talked to my contacts with ties to Placer Dome, however, I suspect they too are beginning to feel the heat as well judging by the pathetic performance of the share price. The day of the hedger is over. If you have these dogs – unload them and at least get into something with more prospect of a viable future.

ZenideaVelocity#7545205/11/02; 23:52:32

It has been a while since I have posted and to those whom remember me I have this hobby of travelling from Australia
to Asia using Hong Kong as a hub to Gold/metal detect the beaches once or twice a year. I guess that I differ from most posters in that I can assure that gold is worth 600 + right now in that ( apart from waiting for the graph to move ) all it needs is velocity i.e heat !. So beat it, stretch it, break it, fuse it, talk to it, think about and FORM it and re-sell it and do it all over again. But perhaps I am off on another tangent?. Hydrogen gas and its invisable flame has its benifits !. and how much will the gas cost ? well less if one turns up the velocity dial :).
Black Blade knowingly knowing that you know asia somewhat
your post 75393 got me in ( grin ), in that one needs to constantly reaffirm to the usagold community the clout this yuan economy has.
All: and the wise up is that one may well find that the fabrication fee in Hong Kong is running at 2 % for 24 carat over the current international price/exchange rate.
Astonishing isnt it , but thats what a word like velosity does. Yes and fly it back if you get my drift.
One tip though , if you enter a jewelers shop in HK ,
Never ever say "just looking" as it will be looked apon impolitely. You may find 10 people greeting you with a chair and a glass of water placed under your nose within seconds and its not meant to be intimidating but just part of the culture so sit and accept the hospitality , point , and if there is nothing you like , smile, get up and leave.
If you are chasing a diamond with Au you can be abit cheeky and take in your own eyepiece for examination of the article but know your (IF, ssv1 lingo ) etc re: quality, cut and carat. Always get the certificate !.
Find/buy gold and procreate !

AristotleSector, before I read any further into your comments, from your opening I see we have crossed wires#7545305/12/02; 00:47:42

I posed the vitally important (yet rhetorical) question: "Where did the necessary quantity of Gold come from to write (initiate) these derivatives in the first place?"

And you responded: "Gold Loans and/or swaps."

Please understand now that the vast majority of the commentary I provided was about the essence of Gold swaps. In that light, the swaps are *are* ARE the derivatives in question!!!!

Now, with this understanding, how can you say that swaps themselves are somehow the supply of Real Gold that stands behind the open end (as opposed to the settlement end) of these billions of dollars worth of Gold derivatives? Please do a second fly-by of my previous post and appreciate the truth of the matter that for all practical purposes the Gold leg of the swap agreement is purely notional. With that, everything I've offered should hopefully fall into place.

Gold. Get you some. --- Aristotle

Golden BearCanuck (msg#: 75445) @ Aristotle, anyone. #7545405/12/02; 00:53:42

"I am sorry about this probable non-realistic view of derivatives but man-o-man am I having a hard time with it."


To the contrary Sir, your analogy is apt, your understanding far above the average. Only the players have different names and the surroundings are elsewhere...


Black BladeBarrick Bankrupt At $350 Gold?#7545505/12/02; 01:20:41

Whaddya know, after I had talked with my friend (with ties to Barrick) earlier tonight, I should come across this article by Chapman referring to Barrick's hedge book being seriously under water at $350/oz. Gold and questionable corporate viability. That's either confirmation or one hell of a coincidence.

- Black Blade

BelgianJapan is at war with itself. (Kathy Wolfe)#7545605/12/02; 02:52:27

Japan and the IMF....
Wall Street *ratings* on JGB (Japan government bonds)...
Weak dollar predicted...
IMF PC april 21 / 2002...
Yen (Japan) is the world's largest creditor nation...
Money this "hot" can flow somewhere else on a minute's notice...
*Physical* economy threatens to go under...

Yes, Lady Leigh, the IMF and BIS are fighting about the crescendo of *systemic* crisis of the floating confetti.
See UK's adherence to EMU, against this background. Euroland (and some others) are fed up with the menacing overreach of the US (dollar in particular).

The inevitable awakening shock will be GOLDEN ! IMF and BIS are our guarantee to that !

Happy mother's day to you and all other Ladies around this fine table.

RennyLife with Gold#754575/12/02; 04:41:12

Hi all,

I'm new to these parts and new to the whole area of finance and gold and markets as well. I have read the Thoughts of Another and am partway thru the archives of Friend of Another. I have a question about what happens when things finally crash which I have not seen answered on a level where I can understand it.

It's said that those who own physical gold will ride the storm better than others. So for the moment let's assume that the US$ has finally reached the end of the line and the whole infrastructure has crashed. Let's also say that an ordinary individual has no debt (everything paid off), has $30,000 in FRN's buried in the back yard and has 50 - 1 oz. gold coins and 500 - 1 oz. silver coins stashed away.

Since gold (and silver) is actual wealth and is not to be used as 'money' how does this person operate on a day-to-day basis? The FRN's would be worthless, right? And except for a limited number of applications barter (in today's world) is not really an option. So if gold is not to be 'spent' but remain a personal asset (like property, car, etc.) how does life go on? How does having gold as an asset allow one to conduct business? TIA


ps As I am having trouble with the concept I hope I have framed my questions properly.

Golden BearRenny (msg#: 75457) Life with Gold#754585/12/02; 06:05:35

Greetings Renny and welcome,

you are part right. Your gold bullion is to be held as wealth, and the silver used for day to day transactions - each silver ounce will have such worth that it could take care of many days or more worth of basic necessities...

In the worst case scenario where currencies are vaporizing everywhere, this situation would not be allowed to create a vacuum with no legal tender for any great length of time. TPTB will attempt to construct a new medium of exchange as happened in Germany in 1923... whether it will be paper confetti or bullion remains to be seen.

My personal opinion is that they will attempted to role over into another paper cycle - but will the masses fall for it?

We certanly live in interesting times....


Humble PiePost #75457 Renny#754595/12/02; 06:59:08

Finish your trip through FOA's posts'and I feel you will find most of your questions answered.
Cavan Man@sector#754605/12/02; 07:01:55

Yes, it will be a scandal of colossal proportions. Billions will be lost (in dollars) but the liquidity river will rise. Remember the S & L bailout? He who has the gold will hold it and keep it. Those that have been preparing for that rainy day with metal and Euros will fare better though all of us will take some lumps. I can see it all now. Around $350 she'll blow up. Take care friend..CM
slingshotA Message#754615/12/02; 07:55:19


If your reading this, and you forgot Its Mothers Day.
You might be in thr DOGHOUSE.

Happy Mothers Day to all the Ladies.

YGM....DINSA MEHTA....MARTIN ARMSTRONG....NINA MEHTA....#754625/12/02; 07:57:29

YGM Note.....I've posted the entire article here for a reason. The relationship of Nina Mehta to Dinsa Mehta as yet is unclear. Martin knows something and won't talk. Who would! Saffra's death was a message to all who know too much! There are other Derivatives expose` type stories at the main page of Derivative
Trying to play Sherlock Homes in the nether world of the Gold manipulation CABAL is dangerous....Bill Murphy is more correct than most would believe when he states...........

The Woes of Martin Armstrong
The feds say the former offshore hedge fund manager scammed investors out of $1 billion. But the imprisoned armstrong says he's only guilty of knowing the whereabouts of too many financial skeletons.

By Nina Mehta

Martin Armstrong, former chairman of Princeton Economics International Ltd., and now prisoner #12518-050 at the Metropolitan Correctional Center in lower Manhattan, arrives for his interview in the eleventh-floor visitor's room carrying a paper manuscript box marked EVIDENCE.

The room is a low-rent affair with a row of barred windows, stacks of cheap plastic chairs, and a chunky metal-encased camera that stares down at us from its perch high in a corner. Armstrong's fingernails are long, and there's an air of sour indifference about him.

After a quick handshake and chat with his court-appointed criminal-defense lawyer, Armstrong faces his guest, the small tape recorder clicks on and the interview begins.

To federal authorities, Armstrong is a mega-swindler, a Ponzi scheme operator who bilked Japanese investors out of $1 billion. According to documents filed in federal court last year, Armstrong sold $3 billion in promissory "Princeton Notes" to Japanese corporates, invested the proceeds in risky currency and commodities transactions, racked up huge losses and then concealed the losses from investors.

He was indicted last September on criminal securities fraud by the U.S. Attorney for the Southern District of New York, and released on a $5 million bond. He has been accused not of theft, but of misleading clients about financial losses and using new funds to mask those losses. In January, when he failed to hand over corporate files and assets to the court-appointed receiver for his companies, he was charged with civil contempt and incarcerated in the high-rise prison a few blocks from the World Financial Center. He and his two offshore companies, Princeton Economics International and Princeton Global Management Ltd., were also slapped with civil suits filed by the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Armstrong, however, believes he's an innocent man who has been silenced because he knows too much. He sheds his nonchalance as the interview proceeds, picking up intensity; by the end, he's calmly skywriting accusations about the motives of those involved in the case. After nine months in prison, he remains staunchly uncooperative and, in his view, uncowed. "They think that by putting me in here they'll get me to plead guilty and cut some sort of deal, so it makes it easy for everybody," he says. "Bullshit. I'm not going to do it."

"This is not an unusual situation," adds Martin Siegel, his attorney, pointing to the federal government's willingness in the Wen Ho Lee nuclear-secrets debacle to build a legal case on speculation and rickety evidence. "It's not as rare as people think it is. It's standard operating procedure."

Chain of Events

Armstrong says he knows how the river gods of finance operate. He knows about Republic Bank and Warren Buffett conspiring to manipulate the silver market in September 1997. He knows the names of the vultures who have attacked third-world currencies. And, from his ringside seat in the capital markets, he has witnessed the impotence of U.S. regulators to do much of anything about this grim circus. "Things got out of hand," he says of the Asian crisis that started in 1997 and matured over the next two years. "That's part of the reason why, once this began with me, all of a sudden Tiger Management starts closing down and everybody's running for the hills—because of what could possibly come out of the case."

Armstrong also believes he's being silenced because he knows too much about the backroom dealings and dissolute ways of Republic National Bank, which merged with HSBC Holdings, the British banking conglomerate, at the close of last year. Republic New York Securities Corp., a Republic subsidiary, acted as the custodian of Armstrong's brokerage accounts.

When Armstrong was arrested last fall, the news nearly scuppered the HSBC-Republic merger. Republic's share price was punched down $10, and Edmond Safra, the bank's billionaire founder and one of the world's richest men, was forced to personally trim his takings from the merger by $450 million in order to save the deal. In late November, about a month after Armstrong declared he would subpoena documents and tapes of specific phone lines from Republic to buttress his defense against securities fraud, Safra was killed in strange circumstances in his home in Monaco.

Armstrong, however, does not think Safra was offed because of his case. He brings up Russian money-laundering and what he describes as a coup to remove Yeltsin from office. According to Congressional testimony by a Republic deputy general counsel, Republic was the bank that tattled on the Bank of New York's involvement in Russian money-laundering in 1998. But Armstrong thinks Republic was playing both sides of the law. "Republic instigated the Bank of New York deal," he says. "That particular money-laundering deal was given to the Bank of New York, and that particular deal led directly to the Kremlin, which caused Yeltsin to resign."

How does all this connect with Armstrong? "I would have been, through this civil case and the criminal case, the first person ever to get Safra on the stand," he asserts. "I don't think he was killed specifically for anything particular in this case. But Safra had a reputation for being involved in a lot of money-laundering—for CIA stuff, for Iran-Contra...If I got him on the stand, some of this might have come out."

The Safra connection now qualifies as spilt milk. But Armstrong saves his strongest criticism for Republic Bank.

Republic, he says, was worried about losing its banking license in Japan. The Financial Supervisory Authority, Japan's regulator, had begun cracking down on so-called tobashi deals. Throughout the 1990s, Japanese pension fund managers and corporates were underwater on their investment performance as the Nikkei fell. But according to Japanese accounting rules, the losses didn't have to be shown until realized. Instead of simply taking their lumps, Japanese managers scrambled after products they could swap for their crippled portfolios. Credit Suisse First Boston and a dozen other Wall Street firms answered their cries with complicated fixed-income instruments that carried short-term embedded options—instruments that were deemed acceptable at the time but that eventually led the FSA to accuse CSFB of illegal activities and yank its licence to do business in Japan. Cresvale International, a Hong Kong-based brokerage subsidiary of PEI (and the entity through which the Princeton Notes were sold), was among the firms doing these tobashi deals in Tokyo.

The funds for Armstrong's Japanese note-holders were supposed to be held in segregated accounts at Republic New York Securities. But federal authorities believe that when Armstrong started running into trouble, he dumped everything into one pool in order to conceal losses. According to documents, this was by William Rogers, head of the futures unit at the Republic broker-dealer, who oversaw Armstrong's accounts, at his client's behest. For his part, Armstrong says that Republic collapsed the accounts, perhaps to confuse or mislead Japanese regulators clamping down on activity it no longer wanted to tolerate.

The Princeton-Cresvale scandal came to light when a Japanese regulator noticed that more than 200 run-of-the-mill net-asset-value letters sent to Cresvale clients had been signed by Rogers, rather than a low-level employee. Republic Bank conducted an internal investigation, discovered that money was being moved around between accounts in a giant shell game, suspended Rogers and James Sweeney, president and CEO of the broker-dealer, and alerted the Feds. Documents filed in court last year by the SEC indicated that Armstrong had "caused" the misleading NAV letters to be written.

Since then, it appears Republic has cooperated with the authorities and has not been charged with any wrongdoing. Rogers and Sweeney have also not been indicted or charged with any securities-law violations. (Republic declined to be interviewed for this article.)

Armstrong denies that he cheated clients and ordered the Princeton accounts to be collapsed. Indeed, he lays the blame for all problems on the Republic broker-dealer. Its back office, he says, was a disaster—and the bank's internal memos will confirm that Republic knew about sundry accounting indelicacies and back-office gridlocks. HSBC now has a gag order on him and is trying to block access to memos and tapes of conversations he's seeking through the discovery process. At least one group of Japanese corporates is suing the bank for fraud. "[Republic's] argument is that it would be unfair that any discovery I had from the criminal case would be turned over to the Japanese to help them in their suits against Republic," claims Armstrong.

Not surprisingly, a number of questions remain. Republic argues that Armstrong pulled the strings for the entire securities scam. But why didn't anyone at Republic worry that 90 percent of all the business in the futures division was generated by Armstrong's Princeton companies, as has been reported in press accounts? Under what rock was Republic's due-diligence task force sleeping when the Princeton accounts were being messed up?

Armstrong's story is equally hard to credit. How could Armstrong not notice that hundreds of millions of dollars weren't where he thought they were? And if he lost tens or hundreds of millions of dollars by betting wrong on yen-U.S. dollar, as is speculated, is it possible he wasn't such a great trader after all?

Legal Eagle

Answers to these questions are not likely to surface until the criminal case against Armstrong comes to trial, which may not be until this time next year, says Armstrong's lawyer. Meanwhile, the prisoner from Maple Shade, N.J., spends his free time in the law library at the Manhattan Correctional Center, grinding out legal briefs and letters. He jokes that Siegel, his lawyer, expects him to pass the bar exam.

The former PEI chief has gone through about half a dozen attorneys over the last 13 months. Last September, he wired $1.3 million in advance retainer fees to three law firms from his Princeton companies hours before a court-mandated asset freeze. Some of the attorneys abandoned Armstrong's defense after Alan Cohen, the court-appointed receiver from the New York law office of O’Melveny & Myers, required them to surrender the fees. Other lawyers were fired by Armstrong. Although he now has a court-appointed attorney for his criminal case and another one for his contempt charge, he is representing himself in some of the civil suits being brought against him—and in any event appears to be calling the shots in his legal defenses.

Yet for all the current focus on his criminal defense case, much of Armstrong's time this year has been spent fighting his civil contempt charge. He now belittles this as a "side show," but over the months he has fired off a round of legal salvos damning the receiver and Judge Richard Owen, the federal judge for the Southern District of New York who is presiding over his civil cases, for various abuses of law and violations of his civil rights.

These documents won't win plaudits from the ABA for their display of dispassionate legalese. They're forceful screeds, written in seeming haste with a ragout of typos and mistakes, but with full citations from case law and the statute books. Armstrong doesn't enumerate his complaints in calm, measured paragraphs as much as hurl poison darts at all involved—from his former lawyers, some of whom he dismisses as spineless, to the judge, who he suggests should recuse himself from the case because of unlawful ex parte discussions with the receiver, one of his former law clerks.

Ego Games

In a series of high-octane motions, Armstrong argues that the receiver is a shill for the New York District Attorney, and that he has operated in bad faith by embellishing the record, misleading the court and manufacturing evidence. He upbraids the receiver and the judge for a string of improprieties, writing that the civil contempt charge "has been brought for punitive purposes with malice and indicitiveness of forethought with the intent to disrupt my defense, prejudice my case and deliver to the US Attorney a tactical advantage in my criminal prosecution."

"How the Receiver could not find a 6 foot suit of armor or marble antiquities prominently displayed in my former office is simply inexcusable particularly when he is demanding my incarceration for failing to produce these very items."
—Martin Armstrong

He maintains that Cohen has an "Alter-Ego" reason for wanting to be receiver. He believes Cohen has devalued key parts of the Princeton companies and inflated the value of missing assets in an effort to buttress the government's case "that this [whole operation] is somehow a fraud that had no means of meeting its obligations." Cohen's reason, according to Armstrong: he wants to bill more hours. The receiver is not interested in running the Princeton businesses but in milking "his new found money-machine behind the cloak of your Honor," writes Armstrong.

In a related vein, he contends that Cohen has not done his duty to properly manage the Princeton companies under his receivership. For several weeks last fall, says Armstrong, the receiver didn't pay the staff of Princeton Economic Institute, an independent research organization with various ties to Armstrong (which the court eventually declared part of his corporate assets), so most of the employees left. He adds that the receiver didn't cooperate with banks, accept credit card orders from prospective customers, or respond to a group of clients that wanted to purchase the Institute—all told, that Cohen's handling of business matters has been the work of a layabout caretaker.

Where's Livia?

Perhaps a few odd twists to this case are to be expected. Like, for instance, the corporate goods on the receiver's Most Wanted list. The items still at large include 102 gold bars (worth $1 million), 699 gold bullion coins, $13 million worth of rare antique coins, a $750,000 black bust of Julius Caesar sculpted in the first century A.D., a bust of Emperor Commodus, a bust of Empress Livia (the wife of Emperor Augustus), seven cuneiform tablets and other rarities. In 1997 and 1998, says one coin dealer deposed by the receiver, Armstrong was among the world's largest buyers of rare coins minted in ancient Greece and Rome; his purchases influenced international coin prices.

Armstrong's criticisms of Cohen are also fluted with a droll, almost slapstick disdain. The receiver mistook a calendar shaped like a silver bar for silver bullion and a gold-plated paperweight for the real thing, he says. These were not "corporate assets" and were not "hidden" in his West Windsor, N.J., office. He tut-tuts the receiver for not immediately locating certain antiquities. "How the Receiver could not find a 6 foot suit of armor or marble antiquities prominently displayed in my former office is simply inexcusable particularly when he is demanding my incarceration for failing to produce these very items," he moans. In light of such lapses, he wonders, "how can the court accept [Cohen's] declaration claiming he found no coins?"

After armstrong predicted the July 20, 1998, high in the u.s. equities market, the cia called, wanting to know how the institute's proprietary models worked.

Armstrong further charges the receiver with abusing his court-appointed powers by acting as his prosecutor. Cohen, he says, is helping the D.A. make his case by not forcing those who cooperate with his office to fork over "tainted" corporate assets. He points out that Tina Mustra, his former executive assistant and one-time fiance (who continues to work at the Institute), still has a BMW, an ancient coin necklace and other gewgaws that came from the same pool of corporate assets the receiver has since seized. There's a quid pro quo at work here, he says—her deposition and help in exchange for her being allowed to hang on to her goodies. He claims this is extortion, then reminds the judge that extortion by a representative of the court is punishable by a fine and up to three years imprisonment. The receiver, he adds, also engaged in other acts of bribery.

Armstrong has charged Judge Owen with a number of legal no-no's as well. He writes that the judge has displayed animosity toward him, that the judge is irreparably "pro-government," that he has no jurisdictional leg to stand on since this case involves offshore entities, and that his behavior has possibly contaminated "the independence of the judiciary and as such constitutes prejudicial conduct." In June, Armstrong filed an official complaint against the judge for misconduct, alleging that he had engaged in extra-judicial discussions with Cohen about the Princeton companies and that a Special Master of the Court should be appointed to untangle this case's hoary mess of truth and lies.

Bad Facts

Perhaps one of the more indisputable facts in this legal saga is that Armstrong is not a temperate defendent. He has not cooperated with authorities, and his allegations have kept the receiver's office and others on their toes. When questioned about some of Armstrong's claims, for instance, Tancred Sciavoni, the receiver's counsel at O’Melveny & Myers, immediately e-mails dozens of legal documents and depositions disputing item after item in the lavish wreath of criticism Armstrong has tacked on the receiver's door.

In fact, Armstrong's facts don't quite fit. The suit of armor and other busts from his office were not on the laundry list of missing goods that ultimately led to his incarceration for civil contempt. Corporate assets were frozen by court order, never by the receiver's whim. Armstrong's windy explanations of the whereabouts of certain assets were found by the judge to be a legal nullity. (A deposition of Armstrong's chauffeur, for instance, negated his claim that he gave the 102 now-missing gold bars to Akira Setogawa, the head of Cresvale's Tokyo office, in a New Jersey parking lot in June 1998.) In addition, the group of investors that inquired about purchasing Princeton Economics Institute was not taken seriously since it was represented by a long-term friend of Armstrong's who refused to name the investors. Receipts, affadavits, wire-transfer letters and legal documents buttress the receiver's findings and fly in the face of Armstrong's statements about the disposition of assets and the course of events.

At the same time, it's worth noting that Armstrong's cycles-based models have had some spectacular successes. He may now be mocked in the media as a peacocky market predictor who guessed wrong about his own life's work in a big way, but he called the high of the Japanese Nikkei in 1989 months ahead of time—the Nikkei peaked the last week of December as he said it would, then crashed like a tsunami, casting off 40 percent of its value in a matter of weeks. (This was the reason for his close ties to Japan's Ministry of Finance and why Japanese corporates clamored to attend his conferences and buy his Princeton Notes.) More recently, and again months ahead of time, Armstrong predicted the July 20, 1998, high in the U.S. equities market—to the day. After that morsel of prognostication, claims one source, the CIA called Princeton, wanting to know how the Institute's proprietary models worked. Needless to say, Armstrong rebuffed them.

A prison attendant waiting in the vestibule area raps on the window. Time is up. As Armstrong leaves the visitor's room at the end of the interview, he doubles back to ask a few questions about the documents sent by the receiver's office. Three days later, a letter arrives from jail.

There are additional conspiracy charges and new information about the markets being rigged. "You will no doubt try to portray me as some greedy thief who is secreting assets," he writes. "I am 50 years old and they threaten me with 25 yrs. I wouldn't live to enjoy any assets. If I had them, I would turn them over because I could earn more than enough outside to hire a 1st class defense. That they will never permit." Switching tacks, he continues: "I am the guy who knows all the dirty little secrets and how the SEC and CFTC will never go after the big boys because it will destroy much of Wall Street if the truth ever gets out. They want the average person to believe the markets are fair and safe because they regulate them."

Whatever the elastic truth of this case, Armstrong will eventually have to decide how fair and safe the U.S. legal system is. In the interim, he concludes, "They play a nice shell game. They keep your eye on assets while the real story goes untold."

Mr GreshamMoney (and gold) as a Tool#754635/12/02; 08:42:12

Some driving-around thoughts (incomplete, but hopefully quick) from this week:

I remember one of Gary North's essays talking about the origin of money as one of humanity's greatest inventions, or Tools. It allows the easy exchange of unlike goods and services, and holds value in order to suspend or defer exchanges across time.

Although I've worked in the abstract ("symbolic manipulation") fields for most of my adult life, the first good income I made in my twenties was in construction, and only when I had found and mastered a set of good TOOLS. It really made an impression on this over-academicized mind. I learned to take _very_ _good_ _care_ of those TOOLS.

Money, as a Tool of civilization's advancement, has the five characteristics of (help me here again, gang, if I'm off): Utility, portability, divisibility, durability, rarity.

(Found link above while searching for the 5th one. "Essay on Money by Dr. John Witherspoon" (signer of Declaration of Independence) from site's intro:
"This essay may have planted the seed that germinated in the mind of Roger Sherman and became what is known as the "hard money clause" of the Constitution, Article 1, Section 10.")

G: Gold and silver began in ancient times with some commodity usefulness, then added on the monetary utility.

Fiat paper certainly carries the first four characteristics (well... durability counts, I guess, if you can easily replace worn FRNs at the bank), which is why it gets its run, every so often.

("Utility", fiat only gets as a utility in its use as "money" -- not the a priori commodity usage of physical "moneys". Kind of a self-referential or self-validating "utility", eh? A "fragile" utility, rather than a robust utility.)

But, --- but --- "Rarity"... that one's a stretch. Rarity in MY hands, yes. ;-) But at the source -- the Fed's monetization computers and the credit issuers' ledgers, no. Only by some sheer force of collective willpower could fiat's Quantity have been regulated to approximate "Rarity".

So, we're being asked to use and accept a Tool which is flawed, and whose flaws are not being compensated for (as promised) by human ingenuity, but instead, magnified.

A Tool, not necessarily flawed, but, human weakness being what it is, and the accomplishment of deception and propaganda working as they do, the effect is to knock out that 5th necessary characteristic of Rarity.

But if everyone is forced to -- or chooses to (for awhile) -- use the flawed Tool (and all the houses are built crooked, or their siding warps in 10 years) then everyone using it sort of gets away with it. For awhile.

And then...maybe everyone sort of wakes up... for awhile ("for awhile" -- story of human history?)

Gold is not necessarily THE monetary storehouse for ALL time, or EVERY time. (Haven't read Jastram's "Golden Constant") But it is the Tool to which humans have returned after failed experiments with flawed Tools, -- who knows how the course of an experiment shall run? -- and the factors and signs pointing to a likely return in OUR time are in full array.

WaveriderSBC, Lucent, Rivals Paring 120,000 Jobs; More Cuts Expected#754645/12/02; 09:11:52

"SBC Communications Inc., Lucent Technologies Inc. and rivals this year have announced plans to shed more than 120,000 workers. Investors expect thousands of additional cuts as demand for telecommunications services falls.

``No one is growing right now,'' SBC Chief Executive Edward Whitacre said at an investor conference May 6. ``When will things turn around? Who knows? If anyone tells you they know, you better not believe it.''

Waverider: Some of these castaways have already found their way to the Bone Pile...the article sure puts the extent of downsizing in telecommunications into perspective.

Mr GreshamRenny#754655/12/02; 09:23:18

Watch out -- don't let those FRNs get moldy out there! Probably have to turn 'em over at least once a year, depending on climate.

A question I've wanted to start in on many times -- where will PM coins be usable? They will most likely first be exchanged for paper.

There will always be fiat paper currency (think "pesos" here) accepted at some rate. And there will always be money-changers (think 3rd world street corners here) when differing moneys trade side-by-side.

If PMs get popular, every pawn shop, camera shop, bank, -- maybe McDonald's, 7-11, and Starbucks ;-) -- and even your local bartender, will be ready and willing to swap some paper for metal. And they will compete for exchange rates with all others known to be doing the trade -- they will also trade on their advantages in accessibility, trustworthiness, and discretion.

Here is where our host and his fellow coin-dealers come in for special respect from us: They are the ones who upheld the availability of PMs in unpopular times. They stood their ground.

In the tradition of "no good deed going unpunished," I ask:

When things turn, and the market flocks to new players, large or small, how will you remember them? For the profits on these small exchanges will be spread widely, and the newcomers will probably reap the bulk of them. Dealers like MK will probably have to make a new business model in the midst of a new market. May their head start now in slower times translate into future success in the fast new one.

slingshotRenny Msg.# 75457#754665/12/02; 09:23:24

Got To Know When To Hold Them, And When To Fold Them.

Well Renny, I guess you are asking what are you suppose to do once you have it. If it all goes to H-ll in a hand basket the saying He who has the Gold, makes the rules, will be truer than ever. This is in my opinion,it is just accumulation, holding, and selling of assets. The accumulation at this time has been the easy part. Get what you can without putting yourself in trouble. Holding on to these assets require a little more use of the Grey Matter. Security and planning to
use some,and hold some for wealth preservation. Finally the selling of what you have accumulated. This may be considered a unknown.
You just have to come up with your own plan. I figure that Gold is an investment/insurance and a vehicle use to get what I desire. If all goes my way, I will purchase 50 arces of land. When I first started I just wanted to get a 4 wheeler for the woods. Then I thought, I need some woods for that 4 wheeler. You have to have the assets so when opportunity knocks, you can jump on it. Afterall is that what all the Big Boys did in the 30's. They position themselves before the crash and got everything dirt cheap.
So it will be in the furture.I just want a piece of the pie.
Now I don't want to get too smug about things, but for alittle while I feel I will be in the drivers seat.
I am not a financial advisor. Just your average Joe Sixpack that happen to catch on a little faster than others.
You will learn to barter and will get burnt afew times.
There is more to owning Gold than just buying it.
This touches upon the moral issue of gold. Looking back upon history there were those who drove families off their land.
I can tell you that I have friends who lost land to immenent domain or for whatever reason the PTB drummed up.When I purchase my land I will ensure that it will cause no more misery already inflicted by those who have created this monster. I remember the farmer and the selling of his land, and the selling of homes on the steps of the court house in Atlanta just a short time ago.
Hope I made sense.

pdeep"There is no housing bubble"#754675/12/02; 09:28:50

Greenspan's recent pronouncement reminded me of the Zen aphorism that denial is an affirmation. James Grant puts it differently: "Asset prices are set on the margin, while debt is forever." I have been trying to come up with scenarios where real interest rates rise, bidding for the housing market comes to a standstill, refinancings come to a standstill, housing prices deflate, consumer purchases also come to an end, the consumer-driven portion of the economy stalls, and mortgage debt goes into default. The only clear thing is that gold, which can still be bid on by someone outside the US will retain it's value, while real estate, since housing is not fungible, cannot hold value as it depends on a domestic market. Somehow I doubt that the financial plutocracy will respond with the best interests of Americans in mind. Lower short term rates even further? Probably not, since long-term rates would rise as bond holders demand a higher interest rate premium. Bail out the GSEs? That would require a huge influx of cash, which would have to be borrowed from the markets, and interest rates would rise anyway. Monetize treasury debt? Same result. Moving along a more paranoid direction,(Why do you rob banks? "Cause that's where the money is.) One source of identifiable cash at this point would be people's IRAs and 401Ks. Make them buy Treasury debt at a discounted rate? Might cause some ill feelings, and the shift from equities to paper would further tank the markets (though it might bring P/Es back into line!) Outlaw private investments in Au and Ag? Aside from ill feelings, that would work only if those assets represented a significant part of the liquidity needed for a bail out. Any ideas out there on how this is going to play out?
Mr GreshamCanuck: Derivatives#754685/12/02; 10:14:34

Your essay last night got me started on my next turn of the thinking-wheel (creak, creak, groan) inside the cranium: How does a derivative trade affect (displace?) trade for the underlying physical?

(And FOA has stated pretty forcefully that SOMEONE has to buy more physical, for the paper gold longs to have their "10-baggers". IMO, doesn't mean there won't BE 10-baggers in paper -- but that this time, it might happen in physical, first, or only.)

My first (and perhaps only) thought is to compare gold with a consumer commodity, like coffee. You know there will be a certain amount of coffee people will drink -- not an unlimited demand, even if it were free. And there will be a certain amount grown, subject to weather conditions, etc.

Then you may make your bets on those prices, without having to go down to the dock with your pickup truck and offload a giant crate of coffee beans. Subject to those criteria, there are not likely to be so many paper players that they distort the proportions between the paper and the physical markets.

Gold is different from coffee (maybe?). In just about every way.

It is possible to have NO paper market (ancient times, gold standard times). It is also possible to have a paper market swinging its weight around disproportionately, as everyone temporarily assumes that SOMEONE ELSE will buy the physical. (And in a down market, there would be less psychological pressure to actually pick up the physical.)

In a gold paper market, you're not betting on an arbitrage between consumer tastes and weather conditions, but on political upheavals, banking meltdowns, wars and stock manias, and use of the common public purse to alter financial results for the benefit of a select few -- all that healthy stuff. Whew! That has ALL the potential for an abstracted ("paper") set of side bets to get going.

Just as a war hysteria gets going over an Archduke's demise, and a scrap iron embargo (Japan 1930's), runs its course, and 10 years later everyone can ask: "What was THAT all about?"

I wonder if strong paper markets (intermediation between two items: a commodity and a "money", or between two "moneys") are a phenomenon when two "moneys" are each strong, and each competing with the other for supremacy. Gold and Dollar. Then someone will be confident to bet on movements between the two, believing he'll get paid off in one or the other.

Kind of the automatic "boiling off" period before a currency transition?

I can't imagine much of a "paper gold" market in Argentina at this point. Only a "pesos for physical" one, with daily quotes for immediate delivery. No futures.

Sure hope that "someone else" will buy all that coffee I've bet my derivative money on. I don't know about you, but I like to DRINK my coffee first -- physically -- about one cup'll do me right... (Anymore, and I'll just go on, and on, and... ;-)

mikal@Renny-Re: Gold into ?#754695/12/02; 10:21:58

Just a few more choices you have for using gold: *** Hold as a nest egg wealth preserver. ***Use as collateral for a loan in the new banking system? *** Trade for new Treasury Currency dollars at precious metals dealers/jewelry dealerships, e.g. Centennial Precious Metals.
YGMMore on Derivatives.....#754705/12/02; 10:29:39

Derivatives and Speculation:

The job of a derivatives trader is like that of a bookie once removed, taking bets on people making bets.

Mr Greshampdeep#754715/12/02; 10:33:44

You covered just about everything in the long view, in just one short paragraph.

"people's IRAs and 401Ks" -- I can't help but watch Japan for this one. The people (mostly older savers) think they own X trillion yen in savings. The gov owes X trillion yen in debt. What makes me think that the savings are a pile of fill dirt sitting next to a hole, waiting to get shoveled in? "Arigato" -- "Thank you very much!" Government at work, filling the national potholes. Problem solved. Money gone. Back to nothingness.

Yes, I think tax-deferred retirement savings (Why do you need the tax deferral if your 401k is SHRINKING?) will get rolled into Treasury debt (attached to Social Security?) as the debt gets actuarially unpayable under current rates.

Give people half a loaf, with a future hope of recovery, and they won't revolt. They can't do the math, for one. They're lottery players anyway. "Their money was just lying around, so we thought we'd pick it up for them." -- GS

Housing -- All I can imagine that highly-leveraged buyers right now are doing in getting on the about-to-crash real estate price bubble train, is getting a "Possession is 9/10 of the law" hold on something tangible.

After the first spate of repos, a "mortgage moratorium" or national workout process will come into effect, giving them a payment obligation commensurate with their market values, and letting them stay in their homes. Call it a "rent reduction" if you will, for the homeowners, as the GSEs write-off a trillion in debt, monetized by the Fed or not. And savers lose everything they put in alongside the Fed- and credit bubble-created money.

Old YellerWhen economics becomes religion#754725/12/02; 11:07:08

It happens when the science of economics no longer has a valid unit of measurement.

Thanks to all for the fine posts here this weekend,I'm going to print up the proceeding for later referral.

Mr GreshamNothing New Under the Sun#7547305/12/02; 11:07:59

"Men may think what they please, but there is no contending with the nature of things. Experience has every where justified the remark, that wherever paper is introduced in large quantities, the gold and silver vanishes universally. "

The Witherspoon link is pretty good, tempting to miss out on a sunny day outside. (Resist, resist...)

It is embarrassing to live in these "modern" times, and find that "we" (whoever that is, Kemo Sabe) have learned nothing in 200 years. Or perhaps only that "schemers will scheme" and "believers will believe", is that enough?

Or, perhaps that one who was naive and gullible in his twenties, is seasoned and wary in his 50s? As might be a nation in its youth, versus maturity? (Hmmmm...not sure about that one.)

Anyway, we can choose to use our painfully-acquired wisdom to counsel others against unneeded losses, a task perhaps akin to spooning out the ocean, but a worthy one -- taken in moderation.

Now -- out the door, and into the hammock!

The CoinGuyEURO/USD Chart#7547405/12/02; 11:43:52

I believe i saw a post on this yesterday, and will admit, I just skimmed over it, but was doing some research, and happened to run across it again. I wasn't aware currencies traded after 4:00 EST on Friday, but this looks like a 200 basis point gap to me?

If it is in fact, not a mirage, it appears as though there's a move away from the dollar, and over the weekend to boot.

I'm holding opinion until tomorrow, but I don't like what I'm seeing here.

The (physical) CoinGuy

UsulHyper-inflation#7547505/12/02; 12:09:08

If a currency should crash and burn in a fire of hyper-inflation, then for a time physical wealth is the only thing that will hold its value.

In ancient times (e.g. Roman) the gold coin was reserved for major business use, while silver was used for more common spending, and copper for small change.

In the event of fiat currency inflating faster than convenient for the conversion of single gold coins, such that you may find that the paper you received for your gold is worth a lot less before you spend it, it would seem appropriate to convert gold coin into silver first.

Here then is where silver comes into play- and where a demand for the "poor man's gold" in mundane usage causes the price of silver to rise with gold, and justify the foresight of those such as Warren Buffett.

YGMAlso From Mr Gresham's Link.....#7547605/12/02; 12:16:45

Thanks Mr G.....Good link...

NATIONAL EMERGENCY: (as defined in Black's Law Dictionary) A state of national crisis; a situation demanding immediate and extraordinary national or federal action. Congress has made little or no distinction between a "state of national emergency" and a "state of war". Brown v. Bernstein, D.C.Pa., 49 F.Supp. 728, 732.

Here are but a few of the Executive Orders that have been promulgated by Presidents from both parties:

EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports.

EXECUTIVE ORDER 10995 allows the government to seize and control the communication media.

EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals.

EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms.

EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision.

EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions.

EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons.

EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft.

EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations.

EXECUTIVE ORDER 11005 allows the government to take over railroads, inland waterways and public storage facilities.

EXECUTIVE ORDER 11051 specifies the responsibility of the Office of Emergency Planning and gives authorization to put all Executive Orders into effect in times of increased international tensions and economic or financial crisis.

EXECUTIVE ORDER 11310 grants authority to the Department of Justice to enforce the plans set out in Executive Orders, to institute industrial support, to establish judicial and legislative liaison, to control all aliens, to operate penal and correctional institutions, and to advise and assist the President.

EXECUTIVE ORDER 11049 assigns emergency preparedness function to federal departments and agencies, consolidating 21 operative Executive Orders issued over a fifteen year period.

EXECUTIVE ORDER 11921 allows the Federal Emergency Preparedness Agency to develop plans to establish control over the mechanisms of production and distribution, of energy sources, wages, salaries, credit and the flow of money in U.S. financial institutions in any undefined national emergency. It also provides that when a state of emergency is declared by the President, Congress cannot review the action for six months.

The Federal Emergency Management Agency has broad powers in every aspect of the nation. General Frank Salzedo, chief of FEMA's Civil Security Division stated in a 1983 conference that he saw FEMA's role as a "new frontier in the protection of individual and governmental leaders from assassination, and of civil and military installations from sabotage and/or attack, as well as prevention of dissident groups from gaining access to U.S. opinion, or a global audience in times of crisis."

All these Executive Orders are there for the purpose of responding to National Emergencies such as Invasion, war, etc. But one thing sticks out: there are no laws *preventing* the government from enacting them willy-nilly, with or without such an emergency. Thus, we are saved from arbitrary installation of a pure dictatorship, simply by the whim or "good feelings" of individuals within our government... rather than by the quaint premise of "rule of law".


Sorry, that's been declared irrelevant, by the action (or more often the inaction) of a Supreme Court that has let such Executive Orders stand without contest.

YGMMini ... Bank Gold Run.....#7547705/12/02; 12:23:10

Gujarat banks face heavy withdrawals
The Times of India; May 12, 2002

SURAT: Over 400 depositors made a beeline to Valsad People¡s Co-operative Bank at Valsad on Friday to get back their gold mortgaged with the bank against loans taken by them following reports of Rs 27 crore loss made by the bank in trading in government securities with Mumbai-based Home Trade.

YGMWe'll be seeing alot more of these in Wks/Mo's ahead!#7547805/12/02; 12:35:54

And many will be private placement......First the "Smart Money" then the public!

Fri May 10, 2002
Silver Standard Closes $16.8 Million Private Placement:

Hmmmm! I wonder who has that much foresight/insight/cash to Gamble on a Miner of the "Other" Barbarous Relic, that poor mans Gold, "Silver".............Bet on "Smart Money"

UsulBT cuts jobs at IT division#7547905/12/02; 12:43:13

"British Telecom is to cut about 2,200 jobs from its IT services division Ignite"

More bones for the bone pile.

goldquestLots More Crash to Come#7548005/12/02; 12:51:33

Still time to catch the Gold Express
slingshotUsul Msg.#75475#7548105/12/02; 13:05:39

Hyper Inflation

Calling your attention to Poors Mans Gold. At this point in time I am very excited at what can happen in the near months in the PM market. As I see it Gold will be the first to climb. Silver will have some lag time but will follow.
I see Gold going to $500.00 and when all this coverup comes to light there will either be no more gold to have or will be priced out of reach.I hope it is just priced out of reach. That is when I feel silver will come alive. What I am really interested in is this transition period on the way up and how I am going to trade silver for gold. If silver goes to $50.00 and Gold to $500.00 I'm trading upward. Should it go to 10 to 1 I am playing with the houses money. Silver at $4.60 and even with a $.50 premium who cares.Its cheap. I'm in on the bottom and the growth potential is enormous. I am fully aware the cards may not fall this way. The percentage of winning is in my favor. Timing is the key.

Mr GreshamPaper Avalanche: Welcome and thanks for Media tip-offs#7548205/12/02; 14:03:04

The tube is long dark and always cold 'round here, so thanks for the tip-offs. The media's bandwagon approach (to just about anything) is the factor I still find curious -- are they operating under direction from above (those "editorial guidance" meetings), or just looking to scoop the competition for the next big story? Why the sudden bursts of enthusiasm?

(Hoping people will forget they ever hyped the stocks now rotting in portfolios everywhere... "What! You didn't buy the gold?!? We told you, didn't we? Ah, er, once or twice, a couple months back...")

At this point, the only way that the market can "make the most players wrong" (as markets are known to do) is to spike incredibly, and soon, IMO. Otherwise, this keeping company with the media pros(titutes) might be cause for some discomfort among the PGA community.

Or maybe they're the "Johnny-come-lately" equivalent to our "Stopped Clock Society". We get to be right, for once, finally, and they do, too. Curiouser and curiouser.

Mr GreshamBank runs: Academics will study anything...#7548305/12/02; 14:22:38

...including things everyone is supposed to ignore.

Something I like to "Google" a couple times a year -- "bank runs". Something akin to gold deriv contract defaults, as well. The model probably approximates... And you KNOW the Fed's academics have modeled ALL of these situations -- why, their reports are gathering dust on shelves even as we write. The study of such events is so the Fed will have the best _understanding_ of what is going on at any moment, not that their is a policy of, or ability to, entirely prevent them.

Want to see some real equations in action -- Yikes! Skip 'em and read the story in between.

"If bankruns are triggered by sunspots, then the optimal contract to the pre-deposit game can have a run equilibrium if the propensity to run is small."

can't snip from a .pdf

RennyGolden Bear, Humble Pie, slingshot, Mr Gresham, mikal#7548405/12/02; 14:22:46

Thanks for all the input. It really helped. I'll keep reading and studying and someday I'll have a good handle on it all.


AristotleSlingshot, "If *if* IF silver goes...who cares. Its cheap."#7548505/12/02; 14:31:25

Ounce per ounce aluminum is cheaper, and iron's below that. On and on we could take this line of thinking to reveal that your strategy is grounded more in fanciful notions than in economic fundamentals. Can I get you to admit, at a minimum, that wishful thinking might get the upper hand from time to time?

Usul, you've succeeded in making the most compelling case for silver that I've ever seen in your noon post titled "hyper-inflation." Even so, I fail to be convinced of any role for silver holdings as a pre-emptive investment opportunity. It seems intuitive to me that silver will be a poor sister to Gold's performance. Getting right to it, you suggested:

"In the event of fiat currency inflating faster than convenient for the conversion of single gold coins, such that you may find that the paper you received for your gold is worth a lot less before you spend it, it would seem appropriate to convert gold coin into silver first."

I would like to point out two avenues of contrary thought. First, and easiest to tackle is that of obtaining value. What I foresee is this: upon the arrival of the moment of Truth, there will be a very swift initial upwards revaluation of Gold that outpaces the general rate of inflationary price hikes seen by any other market... goods, services, you name it.

Therefore, if indeed financial circumstances compel an early Gold owner to dip into his or her Gold savings, they will already have a notional dollar value in mind which is necessary to pay their current bills and expenses. At this point, they are so far ahead of the game due to Gold's gain in value that they would view as trivial any short term losses on any excess currency received (i.e., beyond the notional value immediately needed) in the process of cashing in their smallest Gold coin.

Additionally, on top of the Gold revaluation, there is the matter to consider of the time frame of the hyperinflation that affects the marketplace in general. I can't imagine any circumstances where this conditon of hyperinflation would drag on for a span of many years. Dollars may be reduced to pennies in value, but the time will soon enough arrive where all prices begin to restabilize at considerably higher prices (under more moderate rates of annual inflation.)

It would be only during this brief window of rapidly rising prices that silver would seem attractive for playing the role you've described. But even then, as a collector of intermediate dollars it would be in competition with other tangible assets along with some pretty strong notions about the benefits of a fully-stocked kitchen pantry, etc.

You see, Gold is the primary runner. With silver in the role as merely a temporary parking place for intermediate funds, even if it's price began to outpace that of the hyperinflation in general, you'd still be up against the same wall you tried to paint in your example, just one step further down the hierarchy. Does aluminum come next? If so, where does it end? This takes us back to my opening remarks, and with that I'll close.

Just one man's opinion, but from where I sit, I see Gold as the primary runner in this upcoming dash.

Gold. Get you some. --- Aristotle

slingshotGold Out of Reach#7548605/12/02; 14:48:38

General Public

The words of Black Blade to get out of debt and put some away for that rainy day shall ring true in the future. If indeed right now. I think I shall revise my opinion that the general public will be out of reach to buy gold. The low savings rate, unemployment highs, Mortage defaults,bankruptcies and pouring money back into the stock market may make it impossible for the general public to buy gold even at $313.30. I would think that the buying volume at least in the US would be higher considering the good news about gold. Is this what TPTB wanted with only a few to take advantage of the low price of gold. Thus making their game of derivertives and hedgeing almost impossible to beat. Japan gave them a kick in the butt and India and China is in the race. I'm afraid because of the wild lifestyle the USA may not be able to pitch in and help.

slingshotAristotle Msg.# 75485#7548705/12/02; 15:14:59

Fanciful Thinking

The best laid plans of mice and men sometimes go astray.
It is true there is some fanciful thinking on my part. Silver went to $50.00 and Gold to $800.00, why not again.
There are simularities now as there were then.
People do not recognize Aluminium or iron as a means of money. So the their value would only increase in their demand in construction. So I would rule them out as a means of storing wealth. May I add that salt was worth more than gold in the history of man. Silver is recognize by the public deep in their minds and fear, greed and the unavailability of the metal will push silver into the spotlight.

HenriWelcome Renny!!#7548805/12/02; 15:44:10

Your question is well founded and not a lot of discussion has been bantied about here on this topic. I don't have an answer for you either...In such a situation as you describe, New realities will be in place and if you had to make a best pick as to which asset would get you furthest under such conditions, I am thinking gold is right among the leaders.
CoBra(too)Ian McAvity - The Master of TA and More ...#7548905/12/02; 16:11:08

On the Cafe's Site Ian McAvity - the l.t. is debating the Lac (Mineral's) POG Gap - where the the co. was forced to
fill a spot deferred forward fiasco! ... and POG from the on outperformed the gold mining shares -

Yes - it will happen again - and we even may be close as the gold derivative books of the crooks are getting ready to implode ... here's a section of Ian's (hi)-story ...

"The big pdf is a section of charts from a Chart Book I did in 1980, illustrating that shares vs. metal took turns leading/lagging each other. I believe I was the first to write about a shares/metal ratio - with one example included here from a 1974 edition of my newsletter! I think we will see a phase somewhere above the $325/340 area where bullion will dynamically out-perform shares... to the frustration of many gold stock investors. It was this work that led to my original involvement with Central Fund in the 1983 conversion to a bullion based fund. I felt the market needed such a vehicle for those periods where shares couldn't keep up with bullion."

... Every vehicle has its day - only physical gold doesn't decay - as long as you put it away, savely - for the rainy day ... and yes -
catch a falling star and put in your pocket
- save it for a rainy day ... Even cb2 may pick up a grain of wisdom or 2 ... once in two whiles ... see u!

R PowellGold/silver as money #7549005/12/02; 16:23:38

If we are unfortunate enough to see inflation or even hyper-inflation as some suspect then indeed the value of paper money (defined by what that money can buy in the short term) will become volatile losing value over time. Is this any different that what now exists? The change will be the rate of depreciation.
At some future date when this depreciating dollar value becomes acute then the true value of wealth stored in metals might be harvested as a conversion into fiat (a greater amount than before inflation) for quickly buying whatever is desired. Personally, I hope to convert and spend immediately on debt removal. Metals' profits exchanged for unmortgaged home ownership and no other bills whatsoever except those monthly payments for the necessities of life. I'll even attempt to pre-pay bills before they rocket higher.
If the currency fails badly enough as in the Germany of the early 1920s, some bartering will probably arise but as Ferguson explained in "When Money Dies" fiat was still used a means of exchange. But it was spent immediately while it still had value. Ferguson described the government as being totally broke (tax amounts almost worthless by the time collected), those relying on fixed pensions as starving and some farmers selling part of one year's crop for the numerical amount of fiat to entirely pay off multi-year mortgages.
If hyper-inflation comes, gold and silver will be exchangeable wealth for barter or exchangeable for fiat, in all probability. Once exchanged for paper, remember, as the German workers did, to spend it before the day ends! Many would only work if paid daily. Checks were totally unacceptable.
Regular readers please excuse me but I've recently seen questions of how gold and silver will be used after the shan hits the fit so I mention once again Ferguson's work which gives some history of just what did once happen in this regard. Great book!

YGMUSA,.....Land of the Free???? False Illusion My Friends!!#7549105/12/02; 16:32:23

Just til there's International Tension or Economic/Financial Crisis...THEN


EXECUTIVE ORDER 11051 specifies the responsibility of the Office of Emergency Planning and gives authorization to put all Executive Orders into effect in times of increased international tensions and economic or financial crisis.

****So there's a repeat of 1929 or a terrorist nuke (threat)
maybe not even a small explosion? And all the Executive Orders can be implimented! These previously posted EO's are all within the last 15 yrs people. Read them! Just what does the ownership of Farms, Abandonment of land, Control of HWYs, Seaports, Railways, Communication Media, Food, Health,Education, Instituting Work Brigades AND Establishing new areas for Population have to do with a Stock Market Crash or a mere "THREAT" of International Tension?????????

Talk about food for a conspiracy theory! Just what the hell does the US Gov't expect or have planned....And we worry about CONFISCATION OF GOLD LAWS in the future....These Presidential decrees paint a picture of a Country "ENSLAVED" by it's own elected government and laws enacted by whims and one man's perception of reality......

I put it to you that if these EO's were ever instituted the average citizen is never going to get to that Cabin in the hills to weather the storm....Any enemy of the USA can very
easily create Armegeddon from within the country by causing these executive orders to be initiated....They know as we do, the American People would revolt and then...........
Unbelievable that maybe 98% of the masses know not or care less that this is the reality of a Government run by OLD MONEY! Nowhere to run to, Nowhere to hide, & nobody cares!

Many, many people who 'THINK' if they own a little of the 3 G's, that they're prepared for anything, should think a little harder......YGM

PS: None of this rant is intended as criticism or self rightous thought, it is purely thinking out loud and my own personal realizations being brought out in the light of scrutiny by respected peers.......All of what I've just written has me thinking I must reconsider alot of my plans, and my reaction time to less than catastrophic events that seem very soon inevitable.......YGM.

R PowellRate of depreciation#7549205/12/02; 16:39:22

Basically I can't think of any reason why greatly appreciating or depreciating currency should interfer with the exchangeability of gold for paper or paper for gold. What will change won't be the gold, it will only be the amount (numbers) on the paper and the rate of depreciation of the paper.
Strangely enough, Ferguson also described business hamstrung by the lack of currency. By the time it was printed and placed in circulation, even though always in larger numbers, it had depreciated to worthless. The time rate of depreciation was too great.
Someone here recommended both "When Money Dies" and "Silver Bulls". Both are out of print (hard to find) and both were tremendous!

BoilermakerLeonard Kaplan's 5/13 Commentary#7549305/12/02; 16:46:37

It looks like LK has finally seen the light and has even started quoting Tom Calandra. This is a sea change for a gold analyst/advisor who has been in total denial about the possibility of gold suppression theories. We gold bugs should embrace this long misguided prophet and bring him into the fold. I think that our gracious host, MK, could complete this poor man's conversion.

May 12, 2002
For markets of May 13th INDICATIVE LEASE RATES

(Based on 30 day maturities)
JUNE GOLD 311.30 GOLD .25/.75%
MAY SILVER 4.670 SILVER 1.25/2.25%
JULY PLAT 520.80 PLAT 3.00/8.00%


While the gold market was, officially, lower in price for the last week, down a bit over a dollar, this market continues to look, act, and feel like a bull. Every attempt to plumb technical support levels, every test of lower prices, was met with buying by speculators, investors and the commercial trade. Repurchases of gold, formerly sold forward by gold producers, continue to be the predominant supportive factor as more and more firms announce either their intentions to reduce to size of their hedge books or the news that they have already done so. As an example, even the greatest advocate of the aggressive use of derivatives, Barrick, announced that even they are looking to reduce the size of their hedge book. The financial press keeps assigned a "war premium" to the price of gold as events in the Middle East continue to escalate into more violence. This "war premium" has some validity, in my opinion, but that is only the easy answer, compact enough to satisfy casual readers in the press but not truly indicative of the bullish nature of the market.

Silver was up 5.5 cents for the week and is now knocking on the door of massive technical resistance levels at the $4.75 to $4.80 price levels. While silver prices have been to these levels on numerous occasions over the past couple of years, and failed, this time may be a bit different. For the last week, there has been much talk of one major New York firm borrowing silver heavily, and silver lease rates have risen to 1.4% for the one-year maturity from about 1%. With one-year Libor rates now at 2.63%, it wont take much of a rise in lease rates to force the silver market into backwardation, traditionally a most bullish signal. Speculators in this market still remember, all too well, last years meteoric rise in lease rates and the resultant bull move that was created. This time, speculative forces seem a lot less anxious to short the silver market. While I still like being short silver at these levels, predominantly as a minor hedge against long gold positions, I would only do so lightly. More importantly, should silver ever be able to rear its head above the $4.80 price level, I do expect a very large move to the upside. While the odds still favor that silver will fail at these levels, the chances are now not as certain as before. Silver prices in the next week or two will first be watching lease rates, and will, secondarily, be watching the price movements of gold.

Platinum prices were up almost $4 for the week, as this market remains rather uncharacteristically becalmed. From a positive bent, industrial demand appears to be surprisingly robust, with car sales much stronger than many anticipated, and with jewelry sales still rather strong. On the negative side, last week saw a major player liquidating very large long positions on the exchange in New York (at what is thought to be large losses), and the beginning of Russian selling of platinum in London. Lease rates in platinum rose a bit last week, but not enough to really cause the market any major concern. Price levels appear rather attractive here and clients of the firm were advised to take smallish long positions.

Getting back to the gold market, where rising prices can be attributed to many external influences such as the precarious state of the USD, the continuing decline in the equities markets, etc; the dominant feature, in my opinion, is that gold producers are buying back their previously sold gold in the hope, or the expectation, of higher gold price levels to come. Last weeks commentary mentioned how truly exceptional such a turn of events has been. One naturally expects that the only seller in any bull market would be the producer of that product, now we have the situation where even the producers are buying. Question...who is left to sell?

Andy Smith, the noted analyst from Mitsui, estimates that there is still about 3000 tons of gold sold forward on the books of mining concerns. As prices continue their bull run, such mining concerns will get more and more twitchy to repurchase these tons in the marketplace. To quote Mr. Thom Calendra, of CBS Marketwatch, "A month from now, a year from now, five years from now....the price of gold will be three to six times what it is now". Perhaps a bit of literary license in his estimates, but nevertheless, it is clear he is bullish.

On the other hand, lets look at the opinions of SG, a decided bear on gold prices. This international bank is "not convinced" that gold can sustain itself above the $300 price level and it remains "skeptical" about the metal's upside potential in the long run. Much of their opinion is based upon the hypothesis that the USA economy will soon turn around and that the USD is due for further appreciation in the shorter-term. To quote, "It does not seem that fundamentals specific to gold are sufficiently bullish to counteract further appreciation in the Dollar". And, believe it or not (I don't, at all), they foresee increasing sales by the Central Banks of the world, as "Central Banks will lose the incentive to lend, with short term lending rates near zero.....the only alternative for Central Banks seeking leverage is to sell".

It is always beneficial to examine the market from both sides, to hear both the pro and con arguments in any discussion of the gold market. But, personally, I see the arguments put forward by SG as most improbable. Readers are welcome to form their own opinions, but I do not envision the case where the USD will appreciate handsomely in the near future. Just look at the charts.

The German Finance Ministry announced that it would make over $82 Million USD from its issue of the first commemorative gold coin. This issue was HEAVILY oversubscribed by investors and collectors and a little over 10 tons of gold was withdrawn from governmental reserves for this use. With such success, I would imagine that we would see more of the same, both from Germany and other nations. Please note that these coins were sold for far more than the gold price, allowing such a large profitability to the issuer. Investors who buy such coins should be betting on their growth in numismatic value, and not the price of gold, as gold would have to rise very sharply for these buyers just to get even. But, perhaps such a success indicates that the public is much more keen on buying gold, and gold collectibles, than before.

Mr. Chris Thompson, the incoming head of the World Gold Council, appears to be restructuring the organization as per his promises. This gentleman understands, perhaps better than many in the industry, that the future of gold prices depend heavily on investor demand, and that jewelry, while a mainstay of demand, will never create higher gold prices that have any degree of sustainability. Haruko Fukuda, formerly Chief Executive, resigned.

Paper AvalancheAristotle: Silver going the way of Aluminum#7549405/12/02; 16:47:09

I would agree that gold is the ultimate store of value, bar none. It is the superior metal in moentary use and desirability. I have been drawn to this forum as part of my self education, which includes the study of econimic history and the fate of all fiat money schemes. In each, the outcome is the same. The paper money eventually fails. I cite this historical truism in order to posit the notion that cycles repeat themselves. I believe that we can agree on this point. With that said, can you cite a period in history where gold was the supreme monetary tool absent a roll for silver? Silver and gold have experienced monetary duality in the Bible, in the Constitution and countless other times throuhgout history. It is with the notion that silver will fall by the wayside when the inevitable revaluation of gold occurs that I kindly disagree. With that one exception, I tend to agree with all of the ideas discussed and explored on the Golden Trail.

One last note, either you agree or disagree that, as Alan Greenspan has stated, "the laws of supply and demand cannot be conned." If you agree, then it is exceedingly difficult to reconcile this accepted premise with the fact that there exist only 300-500 million verifiable ounces of silver and roughly ten times that amount of gold above ground. There will be a price explosion in the price of both gold and silver. Gold will be affected by the collapse of the dollar more so than supply and demand, silver will be affected primarily by supply and demand but will incrase in sympathy with the rise in gold.

As always, JMHO. I thank everyone on this forum for his/her contribution to my enlightenment.


R PowellCoBra(too)#7549505/12/02; 16:56:36

Some of the neighbors have been hashing numbers about in an attempt to equate the XAU index gains with POG increases. I believe they settled on an approximate ratio of one XAU index point move equalling a $4.00 POG move. Hopefully, both moves will be higher.
They also agreed that the mining shares have surpassed the metals' prices and concluded that POG and POS must now rise OR the mining stocks are overvalued. Also, they're predicting an XAU of 90 on this present advance. Interesting that your article speculates that stock vs. metals' price advances may fluxuate when so many are trying to decide which leads and which follows.
This reminds me of a question concerning a chicken and an egg. I believe it was a Rhode Island Red chicken. Nothing was mentioned about the egg.
I greatly enjoyed your friend Sarnoff's book and will be on the lookout for more of his work.

R PowellPaper Avalanche #7549605/12/02; 17:02:00

Your silver thoughts

Here, here!!!
Well said.

slingshotYGM#7549705/12/02; 17:11:05


Who do you think are going to enforce all that stuff?
Law enforcement? National Guard? Our Military?

Law Enforcement will be going after more crooks than ever.
National Guard will have to guard airports again.
Our military will be overseas fighting in the ME

Who is left? Foreign Troops. OOOPS, Lunatic Fringe.

Tell me the question asked the Navy Seals at 29 palms if they would fire upon US citizens was just a only a hypothetical question.
Today anything is possible.
Get some gold to bribe them at the checkpoints.

mikal@Paper Avalanche#7549805/12/02; 17:55:46

Some silver money uses should arise where silver is plentiful- China, Russia, Mexico, S. America , out of necessity alongside gold. The past is full of instances as you say, where the twin metals shared a monetary role. But silver isn't a reserve asset held on the scale of gold, foreign currencies and bonds. The transition by the movers and shakers into gold has been aided by artificially low prices, by its status as an international unit of debt settlement, and its recognized liquidity. As a means of revaluing the Euro by marking the Euro to the market price of gold periodically, we see the beginning of the new financial systems. Gold accumulates slowly into strong hands over centuries, is known for indestructibility.
YGMslingshot #7549905/12/02; 18:01:26


Who knows. The scope of it is beyond comprehension, but then so are the laws these EO's have at their disposal.
It's the why and wherefore of such laws I'd like to comprehend. Then if I could comprehend how they get away with it/them in the first place....It still makes a mockery of the Adage..Land of the Free.. Only so long as big brother allows us to act like we are in my books.......
Sheeple isn't the word for those that are lulled into a state of being complacent with power like this. When such laws are thought up those that advise and formulate sure as heck would go to the scenario of enforcement or why waste the time dreaming them up in the first place....When one lives on a mtn surrounded by Jackals he better take a long look around before heading into the valley....Thanks for your thoughts BTW........YGM.

IGWAWatch Out! The World Council Is Closer Than You Imagine...#7550005/12/02; 18:13:13

As I've said previously, anyone is naive to think that the totally corrupt PTB are going to just let gold sky-rocket, and see all they stand for reduced to ashes.

It won't happen. They won't take prisoners. They have the power, the mis-information to keep the gullible sheeple on-side, & if it ever comes down to it......the guns.

Below is a quote from the Gold Eagle site,(, Taylor on US Economy, Markets & Gold. He refers to James Sinclair - a bit of a 'bug' himself:
(sorry I'm technically challenged & can't provide links)

"Overall, Sinclairs concerns should be hugely bullish for those of us long gold. But we must be careful because if the gold price suddenly rises to $1,000 or so, government may do anything, rational or not to try to settle things down. Their concern for our Constitutional rights may well take second or third place to their goal of keeping control of money and power, even those rights are not granted to them in the Constitution."

I think what he's trying to say is that the Govt may well ban the holding, selling or trading in gold when things get out of hand.

Of course, it won't last forever. Truth will prevail. Eventually. So you can pass on your gold to your great, or maybe great-great, grandchildren. They'll love you for it.

But in the mean-time:

Candles & beans. Get you some.

igwa. 'ALways Looking On The Bright Side"

Paper Avalanche@mikal#7550105/12/02; 18:24:32

mikal - your post reinforces my contention that different forces will act to propel both gold and silver to the moon. You mentioned that those countries with plentiful silver supplies may include silver in a monetary roll. I agree. However, is it not also conceivable that those countries with less than plentiful silver supplies will realize increases in the price of silver with respect to its respective fiat currency due to the lack of abundant supply (possibly even greater than those with ample supplies)? Again, I gravitate to AG's quote.

We have all rejoiced about the central banks' inability to control the gold market recently. As we well know, their primary reserve, aside from US$ and other currencies, is gold. However, they do not have silver to stifle any price explosion. To that end, I would contend that once the laws of supply and demand begin to override the manipulation of the silver market (paper silver) that not even the central banks will be able to sell into the market to avert the meltup.

I would further contend that it is impossible for the gold paper market to exclusively fail. I believe, and it only makes sense to me, that once physical gold breaks from the paper price that silver will do the same. At that point, the law of supply and demand will come into play. Given that there exists ten times the amount of physical gold in deliverable form than there exists silver, I find it impossible to believe that silver will be discarded by those who are looking to jump on to the PM band wagon in any way possible.

Did people ask themselves during the dot com boom what the underlying business was? No. They asked simply if the stock was a dot com. If so, buy with wreckless abandon. Likewise, once the PM train leaves the station, people will simply ask "is it a precious metal?" and they will buy with maniacal fervor.

Since I am new as a poster I would like to disclose that I am 60% in physical silver and 40% physical gold. Thus, I am partially biased to that degree.


Mr GreshamSun-Day! An FOA/A kind of day...#7550205/12/02; 18:38:15

I am pleased to report to the Forum that this afternoon, sensing turbulence in the marketplace, I closed out all paper positions, and initiated a major long position in the textiles. Specifically, a derivative of cotton with many physical threads bundled together to reduce risk of collapse. No counterparties were on hand to challenge my complete control of this trade.

Meanwhile, certain long positions in the cereal grains (I call it my "green" portfolio) grew even longer, while I monitored my textile position very closely throughout the afternoon.

Unfortunately, I was stopped out of the specialized international malt-grain options that had recently occupied a very cool segment of the real estate market next to the raw land where I have placed most of my "green" portfolio for closer watching from my textile position.

(Having failed to find brokers suitable to tend this portfolio, I have kept it a self-directed holding, although the tools used to screen and re-balance my "green" holdings currently require a sharpening of their focus.)

Nonetheless, a certain dividend from my Calfornia agricultural acquisitions matured nicely and got me through this period quite well.

Backyard. Sun. Hammock. Nap. Awake, alert, at last.

ANOTHER prints out to 34 pages. I got halfway through reading as the sun slipped behind the trees. It never fails to grow on me each time through it. We are the sidelines observers, and direct participants, in one of the most amazing stories that could be told in our lifetimes.

Thanks to Randy for putting it together. Thanks to FOA that many-talented thinker and writer for sending it our way. You've knocked yourself out for us these many years; I can only imagine what fire you'll be spittin' when you return. "Happy Trails to you, until we meet again..."

da2gThe great silver and gold debate#7550305/12/02; 18:43:08

I have been watching the great silver versus gold debate for a while with some interest. I have no presumptions as to what will eventually transpire, or what the transient or long-term relative valuations of the two metals will turn out to be. However, for the sake of argument, let me assume the role of legendary gold trader Wo Fat (book’em, Danno!). Would it not be relatively easy for me to first squeeze the paper and/or physical silver market? Rumor has it that Warren Buffet has been close to doing this on at least two occasions. What is to stop me, Wo Fat, from doing the same?

My supposition is that any run on silver would result in a tremendous physical and paper demand for gold. How many of us here who hold silver would consider trading to gold should the ratios change in silver's favor? How about a silver run to ten or twenty dollars or more? In addition, how much interest in gold on the part of the general public and professional traders might this generate?

I suggest that if the goal was to crater the paper market, such a move should have already occurred. It likely hasn't as Wo Fat is still able to accumulate gold at a relatively low price, and that ruining the paper markets is not yet in his best interest. Long term, the accumulation of physical gold at current prices is likely more attractive than accumulating substantial fiat. Should the day arrive where the physical is no longer available in any reasonable size and at a reasonable price, the next logical step would be to pursue substantial amounts of paper. Likely there is more than one Wo Fat, and perhaps they stand facing each other with loaded pistols threatening to run the paper while carefully accumulating what physical they can. Who will pull the trigger, and when, remains the ultimate question.

LeighMr. Gresham#7550405/12/02; 18:45:44

Went to Sam's Club, huh?
mikal@Paper Avalanche#7550605/12/02; 18:55:50

Thank you for your posts. I enjoy your many sound opinions. Please realize, I don't "contend" that the banks cannot sell silver to prevent a price increase, after TSHTF, paper options aren't options, manipulation of price by shorts, leasing, derivatives ends. Also, that I don't "contend that it is impossible for the gold paper market to exclusively fail." It is not true however, "that there exists ten times the amount of physical gold in deliverable form than there exists in silver". Trying to get gold will not be easy, even then the price will astound you.
Black BladeGujarat banks face heavy withdrawals #7550705/12/02; 18:58:44


SURAT: Over 400 depositors made a beeline to Valsad People¡s Co-operative Bank at Valsad on Friday to get back their gold mortgaged with the bank against loans taken by them following reports of Rs 27 crore loss made by the bank in trading in government securities with Mumbai-based Home Trade.The maximum rush is among those who have taken loans against gold ornaments and the recovery by the bank in the last three days amounted to over Rs 1 crore, Desai informed. The bank has enough liquidity fund and hence depositors should not feel insecure, Desai said.

Black Blade: These loans were started a couple of years ago and the response was rather dismal to begin with. At the first sign of trouble those who loaned their Gold are quick to return to get their "barbarous relics" back. Interesting though is that the regular currency depositors do not seem to be too concerned. Nobody really trusts a bank - anywhere in the world.

Now that the fish are cleaned and stacked in the freezer, time to swill some Negra Modelo and do some reading.

Mr GreshamLeigh#7550805/12/02; 19:01:00

In my dreams.

(Actually, I warmed up -- and then conked out -- on that BIS letter you posted. THAT was an amazing find. We're weaving together more of the background story, but I'm sure we'll never see all of it, either before events shift, or afterward in a tell-all book.)

Paper Avalanche@mikal#7550905/12/02; 19:22:07

contentions, posits, notions, etc. are simply that - I very much appreciate your thoughtful reply - I do loosely accept much of the "gold only" argument in its own academic, theoretical arena - however, I lack the ability to envision gold going stratospheric and silver being wholly disregarded - to that end, I would imagine that we have each allocated our assets accordingly - I am beginning to focus my accumulation efforts from silver to gold - have a terrific week!!!


slingshotDa2g#7551005/12/02; 19:22:48

Silver to gold conversion

I am one willing to trade /sell silver to acquire gold.
Yes gold will be the top dog and thats where I want to go.

What do you think the POG will be when silver goes to $10.00
$20.00, $30.00?
What do you think the time interval between increments in the silver price will be?
Do you think silver will detach from gold and run flat?

Canuck@ Mr. Gresham#7551105/12/02; 19:30:32

From yours:

"My first (and perhaps only) thought is to compare gold with a consumer commodity, like coffee. You know there will be a certain amount of coffee people will drink -- not an unlimited demand, even if it were free. And there will be a certain amount grown, subject to weather conditions, etc."

Interesting thought; it sounds like you are making a case for futures. Leverage perhaps in the 'SECOND DEGREE'.

YGM had a post earlier today with several 'links' within 'links' pertaing to deviratives. Here's a quote from Keyes (1936);

"Professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not the faces which he himself finds the prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of one's judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree when we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practise the fourth, fifth and higher degrees."

Note the mention of second, third, fourth, etc. degrees of speculation/leverage/'gearing'.

So back to your 'futures' quote.....and bring on options on futures, the third degree. Thinking back to the 'horserace' analogy that I began last night why would there/could there be a limit on the 'bets' placed? 'Bets' placed on gold have no limits, do they? Why do we see the 'interests' in gold continually wain in terms of physical? We have heard & seen that some 98% 'interest' in gold is paper, 2% in is physical.

FOA has 'bet' long on physical, Fred is long GOLDSTOCK (the second degree), Johnny is long futures (3rd), Billy has options in Dec. at $360 (4th), and Canuck has 'bet long' that FOA, Fred, Johnny, and Billy are going to make big bucks. (the fifth degree).

Let's look at the leverage, just for sport shall we. Let's suppose each player has ponied up a million bucks.

Gold rises from $311 (today) and closes the year at $390.

FOA has made $79 per ounce and has made $254,018.97.
($1,000,000/311 X 79)

Fred has made a $1,000,000 in profit. GOLDSTOCK was making a profit of $79/oz. at $311, thus GOLDSTOCK profit has doubled.

Johnny, through the miracles of leverage made $2,000,000 in profit.

Billy, leveraged through the use of options made $10,000,000. (that big bad '10-bagger'!!!!)

And Canuck made $626,000,000 because some dork bet me 626:1 that the 4 could not get 10 million out of a million betting on gold!!!!!!


mikal@GP Re: Self-proclaimed "Prophets" and Astrologers#7551205/12/02; 19:40:17

What I'm reminded of is a "900" number. Dial 1-900-***-****. If it works for you, fine, if you can afford the call and the risk of loss. Who would expect anything more from a stranger. We know they miss many "calls". A real prophet isn't going to sell you anything. Mahendra apparently uses old Indian astrology. Why does he miss so often?
da2gslingshot- response#7551305/12/02; 19:43:01


I unfortunately have no idea as to the future relative prices of silver versus gold, nor to the timing of the rise.

My gut tells me both will rise on a purchasing power basis versus most things worth purchasing. I suspect that there has been a similar amount of shenanigans in the silver market as with gold. I believe that it was George Soros that said that betting against the government is a sure bet.

Ideally, for me, the run in silver would preceed that of gold, perhaps for the reasoning outlined below. This may in fact mean that they both rise together, with silver moving on a higher percentage basis. Should this be the case, I would like to tender my silver for gold, if available. This is by no means guaranteed, however. I do think that even if gold runs first, and far outruns silver on a percentage basis, silver will still have real value when compared to other items (particulary those whose value relies on credit- homes/cars,etc). Perhaps in retrospect, in a few years, I will have wished I had put it all into gold, but I don't see how I can get hurt too badly with a mix, particularly with the potential trading benefit of silver to gold.

da2gaddendum#7551405/12/02; 19:54:11

Let me add that I have already traded some silver (and platinum)advantageously for the yellow. I had purchased some physical silver some years ago in the high three dollar range with gold in the mid three hundred range. When gold was in the two sixty area, and silver closer to five dollars, I traded in a portion of my silver holdings for gold. Like for like, it was a tax free transaction, and better than purchasing the gold outright for three fifty. However, hindsight is 20/20, and I wish that instead of silver, I had bought Yahoo! Live and learn.
slingshotDa2g Msg.#75513#7551505/12/02; 20:03:14


We await the rise in both metals. Thank you for your response.

Canuck@ Coinguy#7551605/12/02; 20:05:29

Glad you saw that too.

What the heck was that 93.5 Euro thing all about anyway?

Black BladeSwan Dive In Asia#7551705/12/02; 20:09:28

Markets in Asia awash in red with the Nikkei off about -200 points. The USD is down below 114. The POG is treading water, and petroleum prices fell off a cliff as the Gaza Strip invasion is off, though OPEC will not increase production in spite of falling oil inventories. Oil inventories are down despite a deepening recession. "Interesting Times"

- Black Blade

Mr GreshamCanuck#7551805/12/02; 20:20:55

Kind of a Trifecta?

Oops -- yells from across the moat -- back over to the neighbor's barbecue...

Canuck@ Coinguy#7551905/12/02; 20:21:00

Another take at the 93.5 Euro; a double dip this week-end??

What's up with that?

Black BladeThe Barbarous Relic Files - Ancient Gold Coins Found in Shiraz#7552005/12/02; 20:55:41


TEHRAN -- When the city gas personnel where digging the ground in Neyriz, some 222kms to the south of Shiraz, on Wednesday afternoon to lay city gas pipelines they noticed a number of ancient gold coins buried inside a vessel. An eyewitness told IRNA in Shiraz that the coins were unearthed near the Kawir (desert) congregational mosque of Neyriz in the vessel that is estimated to be about 1,400 years old (nearly the time of the advent of Islam).

Black Blade: Don't ya just hate it when that happens? Trying to lay out some gas lines and those "barbarous relics" pop up and ruin everything.

Mr GreshamEuro blooper?#7552105/12/02; 21:31:43

So it shows up on all three channels? Cat out of bag? Someone front-running an announcement? The "Do not open till June 11" envelope got out of ECB headquarters on 5/11?
WaveriderGold price unlikely to rise sharply #7552205/12/02; 22:06:09

Snippit: Dubai
"Gold has been in the local news recently for various reasons, one of which was the attempt by the authorities to try and ensure more gold is traded on these shores..."

Waverider: This is a rather elementary article and the author fails to mention some key factors in Golds favor such as the shift to non-hedging within the industry. He'll be nicely suprised when time proves his conclusions erroneous. Nevertheless, it's interesting to see what's being reported in the Arab mainstream media.

~ Black Blade - I lucked out yesterday and found a used copy of "The Prize..." in excellent condition. Also picked up "Hubbert's Peak" which I'm currently reading. In fact I have a accurate are the OPEC nation reserve estimates? I'm thinking as oil reserves are a vital component in Hubbert's analysis, its validity is dependent on accurate reserve data. I remember you saying a while back that the Arabs keep their reserve estimates secret (yes?). How accurate is the data Petroconsultants used for predicting peak world oil production?

BTW - I'm envious...grew up with a fishing rod in my hand, I just don't get out as much as I'd like to! Cheers!

Chris PowellA prescription for the World Gold Council, and gold itself#7552305/12/02; 22:20:39

A prescription for the World Gold Council, if it really
wants to restore gold's place in the world:

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

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

Mr GreshamCanuck: Derivatives & horse races#7552405/12/02; 22:41:56

Getting closer. Something to do with how the horse doesn't care who bet how much and in what way -- he will run as he will run. Also, the bettors are not expected in any way to help the horse run. So the horse's movements are purely independent of the bets on his movements.

Somewhat likewise, the bets on coffee prices are based on some independent factors, like weather and local politics, and some interwoven factors, like producer decisions on how much coffee to grow, after the producers check in on how the derivatives markets are going.

Gold on the other hand -- so FOA's view goes -- is diminished in its price increases by the venting of demand into paper markets. Those who would have bought physical expend their option premiums and futures spreads on price bets.

The futures and options may be partly bets on underlying production in gold mining areas, but they are much more bets on central bank actions, and on larger monetary and economic movements. Movements which can come around and bite the markets in which those bets are made, too.

If gold existed in a free producer/purchaser market, would "paper trades" detract from physical demand? Or would the shorts/call writers on opposite sides of the trade represent a balancing force that neutralizes the effect, as they take equal risks on price movements, and bring new cash to the market?

In this real world, long gold bets represent the distrust of paper monetary systems by a small number of investors. Monetary authorities have tried to neutralize the effects of physical purchases, as well as muffle the signals that would be given in paper markets if the shorts were seen to be losing. However, it certainly seems to make their job easier if they have paper players on their side who bet down the paper price, knowing that the authorities will lean on the physical.

A powerful non-market bias introduced on EITHER the paper or physical side can serve the purpose of control, and the paper/physical split makes that control easier.

Example to test FOA's complaint about paper: Gold advocates could, at the one extreme, bid up the POG indirectly by buying mountains of calls, adding unrealistic premiums to them. Then some traders might buy physical in order to sell these as covered calls. That's in a free market -- for in a controlled one, the traders would believe they'd never have to cover their sold calls. Either way, the effect seems weak.

The present "divided" effort also seems easy to defeat, perhaps the easiest (?).

But it would certainly be most effective to bid up POG by just buying the physical ourselves. In a free market, but especially against a market manipulation situation. To crack the logjam.

I see agreeing with FOA's view at first glance; then I wonder if it can be that simple. (Is it really the difference between a coffee-type commodity, where the derivs are just slicing up and timing the commodity's actual purchase price differently? And a monetary instrument like gold where the derivs might represent demand diverted in something else entirely than an ounce of shiny stuff?)

(Or could it be that, in a situation of increasing volatility, the paper derivs actually INCREASE the effects on POG, once the price gets rolling, as you've lured in the short players, who must then buy their ways out? Bwa-ha-ha-ha! We shall see!)

Oh me, oh my! I'm just trying to frame the question now, because I just can't think that much further about it right now -- how did we even get started on this today?

The CoinGuyCanuck#7552505/12/02; 23:28:00

Just Checking in...

Real interesting chart, nice to see it back in pattern. Really don't have an explanation, but it did catch a few peoples attention. From recent experience, only the gold chart moves like that...

The CoinGuy

Black BladeRe: Waverider – OPEC Oil#7552605/13/02; 00:01:14

The link is a report from Simmons Intl. that covers some of your question (pdf file). No one outside of OPEC knows for sure when the Saudi fields will decline (they may already have). The largest fields (such as Saudi's Ghawar Field) have been producing for over 70 years. What we do know is that Saudi can boost production by another 2 million bbl/day at most. Most all other OPEC members have produced at capacity during this last energy crisis and therefore have little room for expansion. Most any new production will be more costly smaller fields and non-conventional sources.

That's a good find (The Prize). It is a lot of material and I highly recommend it as reading for understanding the history and forces behind international corporate and political power. It sure puts a different light on world events. "Hubbert's Peak" is a bit more technical for most people, though it does present some interesting debate to the eventual overall peak of "cheap" oil production. Also, no new large fields (Super Giants) have been discovered sine Mexico's Canterell Field in 1976. The worldwide demand for "cheap" energy continues to grow along with the increasing population, growing economies and modernization of the emerging markets. Even if Saudi production (or OPEC for that matter) could be increased, it is doubtful that it could keep up with demand for long. The former Soviet Union Oil is a help, but that is not likely to be much help as they are producing at capacity in spite of production cut agreements. Also, Russian Oil is more costly than Arab OPEC Oil (Russian lifting costs are about 4 times greater) and Russian fields have been mistreated and mismanaged for several decades of inefficient rapid extraction under the old Soviet Union management.

There is much more to the "energy" picture. Demand continues to grow for energy in the US economy as a result of the "New Economy". The "New Economy" is particularly energy intensive. As more server farms are built, more powerful computers manufactured, more telecom capacity used, etc. there is actually much greater need for additional energy. However, there are bottlenecks everywhere due to location of power plants and transformer stations, NIMBY, lack of transmission grid and pipeline capacity, etc. and add to this rabid environmentalism opposing new hydrocarbon exploration, power plant construction (and operation), nuclear power construction, mining, and new technology. A "crude" awakening is in store for "Hydrocarbon Man".

Cheers and Happy Reading!

- Black Blade

Black BladeW.Kansas Farmers Abandon Wheat Acres#755275/13/02; 00:13:11


FARM SCENE: Western Kansas Farmers Culling Cattle Herds, Abandoning Wheat Acres In far western Kansas, where no substantial rain has fallen since August, dry conditions are approaching Dust Bowl levels. The region is so parched that even some irrigated fields have been lost. The level of damage isn't known yet, but the statewide wheat yield is expected to be down almost 10 percent from a year ago.

The drought is affecting cattlemen, too, as pastures become so dry that they can't turn their livestock out. At the local auction yard, owner Steve Schneider is having a busy day with his dairy cattle auction and bracing for a beef auction the next day expected to be busier than normal. The number of cattle running through his sales rings are up 20 to 30 percent over a year ago. "Some are liquidating their herds, some are culling a few and trying to hold on," he says. "But the dry feed is running out."

Black Blade: The "New Dustbowl" is reaching from Canada through the mid-section of the US to New Mexico and Texas. It's eerily like the Great Depression era all the time.

SpartacusJapan told to face up to debt trap#755285/13/02; 00:37:02

By Ann Saphir

International ratings agency Fitch yesterday hit back at Japan's criticism that it was wrong to lower Japan's credit rating, saying the nation may fall into a "debt trap" that could force the government to reschedule bonds or print money to avoid a default.

Japan's debt - which the government estimates will reach ¥693 trillion ($A9.96 trillion), or about 140 per cent of gross domestic product, by March - was on an "unsustainable path", said Fitch president Stephen Joynt.
Fitch suggested Japan might be headed for an Argentine-style debt restructuring to avoid default if the government didn't take steps to rein in debt, reverse a two-and-a-half-year slide in consumer prices and pull the world's second-biggest economy out of its 12-year slump.

"In the absence of corrective action, Japan could be caught in a debt trap from which it can escape only through monetisation or default," Fitch said.

In that case, Japan might reschedule its debt rather "than risk financial collapse and the economic instability" of printing money to pay it off.

Black BladeBreaking the Banks#755295/13/02; 00:50:35

Think Spitzer is tough? Wait till the angry throngs get through with Wall Street.


In early April, a square-jawed reformer named Eliot Spitzer shook with Poseidon-like force at Merrill Lynch's rickety reputation for research and left it in shambles. The New York State attorney general unearthed now-infamous e-mails in which Merrill analysts derided stocks they touted to small investors as "dogs" and "pieces of junk." Within days Merrill switched from outrage to surrender: At its annual meeting in late April, CEO David Komansky abjectly apologized to his clients.

The threats against Wall Street lurk in two corners. First, the settlements with New York and other states over corrupt research will be costly, especially for Merrill. Spitzer is demanding around $100 million in fines. But dozens of other states and their chagrined Merrill clients will likely win lesser amounts. David Trone of Prudential Securities reckons that Merrill will have to pay between $500 million and $1 billion. Spitzer is now examining Salomon Smith Barney, Goldman Sachs, and other firms. If e-mails show that their analysts purposely misled investors, they may face Merrill-sized payments too.

Perhaps more damaging, however, is that Spitzer's investigation could add momentum to civil suits over Wall Street's handling of IPOs. A Who's Who of class-action attorneys, from Fred Isquith to Mel Weiss, have filed 310 lawsuits against 45 underwriters and the flimsy startups they brought public, demanding $50 billion to $60 billion in damages. Investors are mostly ignoring these suits, given the precedent (Credit Suisse First Boston settled a similar case last year with the SEC for a modest $100 million). "The market underestimated the financial threat to the other firms when the SEC and the Justice Department failed to file more serious charges against CSFB for market manipulation," says John Coffee, a securities-law professor at Columbia University. An aggressive SEC investigation could immensely strengthen the civil lawsuits.

And the SEC, clearly embarrassed by Spitzer's crusade, is anxious to show renewed zeal in punishing wrongdoing on Wall Street. The agency is now pursuing a charge far more serious than inflated commissions, a practice known as "laddering." Under laddering, an underwriter agrees to give fund managers IPO shares only if they agree to buy even more shares at higher prices after the stock goes public. Laddering inflates the prices that small investors then pay and is "blatantly illegal market manipulation," says Coffee.

FORTUNE has learned that the SEC may have found a smoking gun. On April 29, the SEC's New York office summoned Nicholas Maier, the former syndicate manager for hedge fund Cramer & Co. and author of the recent Trading With the Enemy, to testify. Maier confirmed that firms he dealt with regularly engaged in the practice. The SEC lawyers then showed Maier a document, known in the trade as an IPO "book," from a leading Wall Street firm for a 2000 offering. The lawyers made it clear that they believe the sheet demonstrates laddering by showing the amounts and share prices at which the funds promised to buy a stock before it opened for trading. Typically, the banks dumped the shares shortly thereafter.

Black Blade: I have said this scandal will be very costly – especially now that the trial lawyers are certain to come crawling out of the woodwork. It is interesting that CNBC's new "journalist" – one James Cramer is now likely to be a target for an SEC investigation. There's one scandal after another on a weekly basis anymore. "Interesting imes"

SpartacusA New Dirigisme in Japan?#755305/13/02; 02:58:55

by Marshall Auerback

Is Japan about to turn its back completely on the tide of globalization? One might suspect so after a series of increasingly nationalistic rebuttals to its bank reform package, a marked change in tone from one what normally expects from Tokyo's meek and uncontroversial officials. In its semi-annual World Economic Outlook released a few weeks ago, the IMF called on Tokyo to compile an extra budget to boost the economy and said the Bank of Japan should ease monetary policy more aggressively, even if that meant a weaker yen. Japanese officials responded in uncharacteristic fashion: they blasted the International Monetary Fund, saying its prescriptions for the nation's ailing economy were "unprofessional" and "out of focus."
But the Japanese have long been worried about the unpleasant side-effects of a substantially weaker yen, particularly in regard to the destabilizing impact that such depreciation might have on the rest of Asia. In fact, many recent statements by leading Japanese officials almost suggest a desire to turn Japan back into a financial island, to retrench through a heavily dirigiste economic program in which capital controls, or some form of government-directed control of the banks and other financial institutions (which discouraged the export of capital), might be in the offing in order to avoid the prospect of collapsing yen that could engender a downward spiral into hyperinflation.

Finance Minister Masajuro Shiokawa said the IMF's call for an extra budget "Amounts to meddling with domestic affairs." Added Economics Minister Heizo Takenaka, "I think their call for an extra budget is out of focus. I don't understand why they would ask for an extra budget which requires more debt issuance. On that point, it's hard to say that their assessment is professional, especially when there is talk of further downgrades of Japanese government bonds."

If this is what is being said publicly, one wonders what is being said behind closed doors. Such expressions from Tokyo's officials are without precedent. They imply the embrace of a more Japan-centric outlook, which would be consistent, both economically and culturally, with Japan's post-war history.

Though Westerners are inclined to believe that a high level of government intervention will not solve Japan's problems, it would not be surprising to see the Japanese attempt to revert to this type of system, given their suspicion and evident profound distrust of the so-called Anglo-Saxon model of development.

A more dirigiste approach might avoid excessive yen weakness, if it is accompanied by the expedient of capital controls, in effect a reversion to a pre-1980s economic model for Japan. But it may result over the long term in a loss in efficiency in resource allocation and create huge global dislocation should the Japanese seek to withdraw their capital from other parts of the world, notably the US. It is therefore worth keeping a close eye on Tokyo in the next few months, as any such moves toward aggressive capital repatriation might prove to be the precipitating event which finally brings this era of credit bubble finance to a dramatic close.

Black BladeEnergy Crisis – The Perfect Storm#755315/13/02; 03:08:16

Since last year's energy crisis, Americans have become complacent once again. We are set for a replay of the "energy crisis". Petroleum prices are likely to rise much higher. Meanwhile enjoy the current low energy prices while we can. The low energy prices are due primarily to the deepening economic recession and fair weather. This has led to a state of complacency where low energy prices have led to shelving plans for new power plants and upgrading the decaying antiquated energy grid. A number of events are converging to create the energy equivalent of the "Perfect Storm".

More and more, Third World nations such as China and India are increasing their demand for a growing share of the world's energy supply. This demand will accelerate. If the world pulls out of the economic recession, the rate of energy consumption will increase rapidly. Even without an economic recovery the rate of energy consumption will accelerate along with the growth in world population.

The "New Economy" has driven the consumption of energy through the roof. The rapid expansion of the Internet, telecom, and computer use is putting an enormous strain on the energy grid. There has been a huge build up of energy intensive "server farms" with about a new one built every week. One server farm consumes as much energy as 8 forty-story buildings. It is expected that there will be a need for several thousand more "server farms".

One point to consider is the seriousness of our nation's energy bottlenecks. Due to rabid extremists in the environmentalist community and NIMBY, there is not much likelihood that we shall see much improvement and upgrade to the decaying energy grid. In spite of Enron problems in California last year, the energy grid was seriously overloaded. Similarly problems of an overloaded energy grid almost occurred several times in New York City and parts of the US northeast.

Several attempts to build new power plants were shelved due to environmental and political opposition, and finally due to the collapse of the US economy. The facts are the US will need at least 300 new power plants in the next 3 years and at least 1,300 new power plants within the next 20 years. We will also need 50% more natural gas over the next 8 years. Exploration for natural gas and oil in the US has fallen off sharply. In fact natural gas production has been flat to declining in spite of last years record drilling, however, now with less drilling activity falling off we are certain to be set up for a severe energy crisis of epic proportions. These problems are even more acute as Republicans and Democrats are caught up in a political pissing match.

The Arab OPEC members control much of the world oil supply. Saudi controls as much as 25% of the world's crude oil reserves. Should the current monarchy lose control we could see crude oil prices easily spike over $100/bbl throwing the world into economic chaos. A revolution in Saudi is a very real possibility and therefore the threat of an economic calamity is very real.

Put another way, the Arabs hate America and all that it stands for, and as radical fundamentalists gain power and influence we shall see more instability in the Middle East and terrorism in the west. In Saudi, the people are increasingly unhappy with the ruling family of Saud. The Saudi regime pays off the Wahabbi clerics to keep them under control and those funds find the way to terrorists around the world. The Wahabbi clerics control Saudi education and the "religious police". They also teach that anyone who does not believe as they do are "infidels" to be destroyed. That to kill the "infidel" is honorable and should you die in this "jihad" you will die a martyr with special afterlife rewards. Is it any wonder then that 15 of the 19 hijackers on 9-11 were Saudis? The Wahabbis teach a perverted form of Islam, however, they are gaining influence as more and more desperate impoverished and oppressed Arabs grasp at straws for a better existence.

We have seen these events play out before. It will be much worse in coming years. We saw the effects of the 1973 Arab Oil Embargo resulting from the western support of Israel in the Middle-East war. The result was long gas lines and the start of the worse economic crisis since the Great Depression. In 1979 Islamic fundamentalists overthrew the Shah of Iran and again Oil prices spiked. Again the US was thrown into a severe economic recession. Shortly afterward the Soviets invaded Afghanistan and that aggravated the economic recession in the west. In 1990 it was Saddam Hussein and his military excursion into Kuwait that triggered yet another Oil and economic crisis. It also ultimately sank Daddy Bush's reelection. Remember the slogan "it's the economy stupid!"? Every postwar recession has been preceded by an energy crisis. This time is no different. The energy crisis that began in 2000 crisis triggered the current economic recession (or at the very least pushed a weakening economy over the edge).

The coming energy crisis is certain to push the economy into the abyss. We have made absolutely no progress to stop or mitigate the effects of a prolonged period with insufficient energy. The ruling Al Saud family is shaking in fear of civil war. Osama Bin Laden has taught that America is the Great Satan, he and his followers are incensed that "infidels" set up base on Saudi soil. He has also complained that the price for oil should be $144.00/bbl and that Saudis should be reimbursed for past oil sold to the west. It is his belief that he could incite the Saudi people into revolution and seize control of Saudi and establish an Islamic regime. So far the Al Saud family has successfully paid off the Wahabbis and Islamic charities to avoid civil war. If Saud falls, then Islamists will control another 25% of the worlds oil reserves (260 billion bbl).

They are not alone. The Islamic fundamentalists are gaining power and influence everywhere. Arabs by and large in many countries dislike Americans. Many would be surprised to know that Kuwaitis are turning against Americans, even after the US saved their butts. Surprisingly, in the democratic sheikdom of Kuwait the fastest growing political party is the Islamic Fundamentalist Party. The Arab Middle East oil producing region is a ticking time bomb and it is only a matter of time before the world is thrust into an economic collapse that will make the Great Depression look like a picnic. Hell, all it would take to put the world at risk would be a terrorist attack on the Ras Tanura oil facility that pumps 5 million bbl/day.

There is no stopping the coming energy crisis. It is way too late to prevent it now. Politicians have squandered the last opportunity for energy independence. It is only a matter of time before the economy is toast. The only thing left to do as patriots is to forget about trying to prevent the next energy crisis and economic collapse and start preparing by looking out for "number one". In other words get out of debt as soon as possible, get Gold and Silver portfolio insurance, stash enough cash for several months expenses, and start a storage program of nonperishable food and basic necessities. Prepare for the worst and hope for the best, though in my opinion it is far too late to prevent the coming disaster – a global energy crisis of the likes never imagined or experienced.

The "smart money" appears to agree. Warren Buffett and Bill Gates have prepared some by buying into Silver in a big way. They also have invested billions of dollars in energy. Buffett took over MidAmerican Energy and Bill Gates has taken positions in many energy companies. Obviously the "smart money" can detect something big on the horizon. That something is the coming storm clouds of a brewing energy crisis. It does seem interesting that these people would invest in Silver and Energy so heavily at this time.

The US consumes about 20 million bbl/day and produces only 5.8 million bbl/day. As the price of oil rises the US economy suffers. The events of 9-11 did absolutely nothing to wake up Americans to their vulnerability to a new energy crisis. Complacency has once again led Americans into a false sense of security. An energy crisis of epic proportions is already in the cards and there is no way to stop it from happening. The energy equivalent of the "Perfect Storm" is coming.

- Black Blade

SpartacusNo Such Thing As A Free Lunch#755325/13/02; 03:13:52

by The Mogambo Guru

"...Forget the idea of a rebound. We ate like pigs at the diner, drank like hopeless alcoholics at the bar, and spent like irresponsible children at the toy store. And now comes the proof that there is one triumphant truism, one shining economic law that cannot be contradicted. Namely, there is no such thing as a free lunch..."

Black BladeGold and Silver Higher#755335/13/02; 03:37:07

Gold is up a buck and Silver is up 2 cents. So far it looks like a slow start. Meanwhile the USD is lower against most major currencies.

- Black Blade

Black BladeCNBC Troll Snarls#755345/13/02; 03:55:58

I just heard CNBC Troll Liz Clayman say" Gold is up 20 cents. There was an article in Barron's this weekend that says there is a supply crunch". Then she curls her brow and twists her lips and then snarls "But they mine 5 million ounces a year supply crunch?" What do you expect?

- Black Blade

Golden BearMore Argentine tears...#755355/13/02; 04:48:24

"...The nightmare inflation scenario now appears to be unfolding in Argentina, with the headline, "Inflation Estimated to Reach 90% in 2002." Also from Bloomberg: "Argentine consumer prices rose 10.4 percent in April, the biggest monthly jump in more than a decade, as the currency devaluation drove up the cost of food and fuel. April's inflation rate is almost equal to that of the first three months of the year combined. Prices rose 21.1 percent in the first four months of the year, the National Statistics Institute said. Producer prices rose 19.7 percent in April from March and rose 60.7 percent since the beginning of the year. April's inflation rate was the fastest since September 1990, when it surged 15 percent, and brings the year-to-date rise in prices to 21 percent..." Bloomberg quoted an economist: "This is a straight road toward another social explosion. It's just a tremendous hit to the wallets of the poorest sectors of society..."

GB: The article continues quoting comments of rising inflation pressures by the ECB, Reserve Bank of Australia, South Korea, Mexico and a host of others.

Golden BearMore from Doug Noland...#755365/13/02; 05:06:54

"...Nowadays, the government-sponsored enterprises - because of the implied backing by the U.S. taxpayer - have virtually unlimited capacity to issue top-rated securities to be intermediated through money market funds. This is an historic development. At the same time, bankers or other loan originators can make risky loans and immediately package and sell them to Wall Street. Wall Street investment bankers then create a trust to acquire these loans. This trust purchases interest rate protection in the derivatives market, credit protection from credit insurers, and calls upon a money center bank and pays a small fee for a back-up credit line or liquidity protection. Now, the trust has created the necessary structure that allows it to go to the rating agencies and receive a triple-AAA rating. Equipped with this top rating, the trust issues pristine liabilities - asset-backed commercial paper - to the money market, raising funds to acquire loans.

Through this process, risky loans are transformed into perceived safe money and, importantly, loan quality poses no limitation on money creation. With structured finance, virtually any type of loan - commercial, consumer, mortgage, prime or subprime - can be monetized.

It is this mechanism - with the capability of transforming essentially endless risky loans into perceived safe financial assets - that has so profoundly changed the nature of monetary analysis. And since there is basically insatiable demand for this "money," - the residual of lending - contemporary credit systems enjoy virtually unlimited capacity to create credit. That is, of course, as long as the perception of the soundness of money is maintained.

With contemporary credit systems cut loose from both traditional inherent constraints and central bank controls, the analytical focus changes. We must now be concerned as to where this credit is being directed - how this created purchasing power is spent. What are the resulting inflationary manifestations? Is the additional purchasing power going to consumer goods and services, manifesting into higher prices or larger trade deficits? Is it going into capital investment? Or is it going into asset markets, fueling bull markets in stocks, bonds and/or real estate?..."

GB: No wonder Warren Buffett won't go near anything he doesn't understand, this sounds like LTCM but on a gigantic scale...

Canuck@ GB#755375/13/02; 05:20:31

Good job buddy!

From yours:

"We must now be concerned as to where this credit is being directed - how this created purchasing power is spent. What are the resulting inflationary manifestations? "

When, not if, the PTB lose control of the 'correct' channeling of money is the day TSHTF. A few posters have commented that when a small percentage is re-directed away from a saturated destination, say to commodities, will be our day.

CanuckDork question of the day#755385/13/02; 05:37:33

A little embarrassing, but is Palestine not a country?

Does this amount to a civil war? Probably far too simplistic a term.

I was watching the news last night and heard that the Israeli parliament is not going to allow Palestine it's own state. I heard that Gaza has a population of approximately one million Palestinians. What is the reference of the Gaza strip? West bank?

Any references to geography/history in the region? My manager who was born in Jerusalem (sp?) has explained the 1967 war, the land takeovers etc., but obviously I am behind the curve here.


Golden BearCanuck (msg#: 75538)#755395/13/02; 05:49:19

Hey Canuck,

Gaza Strip and the West Bank are Palestinian controlled territories, but the state of Palestine does not exist.

Found the above link for you on the fly.


Gold Standard@ BB - The Perfect (energy) Storm#755405/13/02; 05:53:57

Sir BB, I must say that my outlook is not as "black" as yours.....

I believe that civilised society has the ability to change and flow as the result of the collective decisions of millions, slowly but imperiously creating the society that the majority desires, irrespective of the will, and the laws, of government (or any other organisation for that matter).

Let us call this movement of civilised society "the Collective". What it means (in colloquial terms) is a sufficient number of members of the Collective unilaterally opening their windows, and shouting "I've had enough, and I'm not taking any more!"

An example is the Vietnam war fiasco, where by 1973 the opposition to the war transcended the students, the hippies and the "peaceniks" of the period - it was the mothers and fathers of those coming home in body-bags, and all those who saw it all on television, who stopped the lunacy.

Today, the Collective has enjoyed 30 years of uneasy peace, and relative prosperity. The Collective enjoys their peace, and particularly enjoys their prosperity, which is substantively based upon, and irrevocably linked to, energy consumption.

My belief is that the forthcoming energy crisis is going to stir the Collective like NOTHING has before.

This forthcoming energy crisis is not going to destroy America - rather, it is going to be the catharsis of the Collective itself, the destruction of the "values" created and sustained for the last 30 years, the "nimby" syndrome, the warm-and-fuzzy tree-hugging syndrome, and all other socially and politically correct viewpoints.

You see, Sir Black Blade, the most important aspect of the Collective is its ability to protect itself, to ensure its way of life, and energy consumption would have to be the most important indicia of the Collective's general economic well-being.

The Collective, once it receives a shock that it never has experienced on such a scale before, will fight for its own survival. If this means a quickly and shoddily constructed nuclear power station right next to your log cabin, this is exactly what will happen.

I, too, fear the future, but for different reasons. We need energy in order to sustain the desires of the Collective. However, the current emphasis is upon "Old World" energy sources, and not renewable and non-polluting energy sources.

A significant amount of environmental harm may come to pass if the Collective has its way .... no-one seems to realise that energy consumption is price elastic (i.e. no matter what the price, we will still pay for the privilege of using energy), and that such general acceptance of price-elasticity should be steered towards renewable resources sooner rather than later.

Sir BB, not a criticism, hopefully more of a constructive viewpoint!

PanAround 118 countries including several in the Middle East lend more than 35 percent of their gold reserves.#755415/13/02; 06:09:11

Monday, May 13, 2002.

Lebanon is by far the largest holder of gold reserves in the region, at 9.22 million ounces at the end of 2001, followed by Saudi Arabia with 4.6 million ounces, Kuwait (2.54 million ounces) and Egypt (2.43 million ounces). At 62.2 ounces per head, Lebanon has the highest level of gold to population in the world. The decline in gold prices recorded in the past ten years had led to a substantial loss in the value of gold held as reserves by central banks around the world. Global gold reserves dropped in value from $340.1 billion at the end of 1991 to $259.6 billion by the end of 2001, a decline of 24 percent. For the Arab countries, the value of gold reserves held by central banks and monetary institutions fell from $8.16 billion to $5.8 billion over the same nine-year period. This represents a loss of $2.4 billion or 29 percent, supporting the argument that maintaining reserves in the form of gold is inefficient in comparison to foreign exchange and other assets.

In addition, holding reserves in the form of gold also carries a substantial opportunity cost. Traditionally gold earned no return unlike financial securities such as Treasury bills or bank deposits. Although this has changed in recent years with the development of the gold leasing market, which allows central banks to earn around 2 percent a year (depending on maturity) on the gold holdings they are willing to lend to the market place, this is still considerably lower than the return on other assets. Around 118 countries including several in the Middle East lend more than 35 percent of their gold reserves.

Gold reserves have historically been used as a hedge against inflation and as a support for the exchange rate of the domestic currency. Gold is looked upon as one of the few assets not prone to inflationary worries overhanging paper money. The precious metal is liquid and is universally accepted as a means of payment and provides diversification as a reserve asset. It is also looked upon as insurance against such events as war, or the international isolation of a country, especially if accompanied by the freeze of the foreign reserves that the country holds with international banks. Studies show that gold has been negatively correlated with the US stock markets as measured by S&P 500 index for the decade ending in December 2000. In certain cases such as Lebanon, holding gold has become a legacy that makes it very difficult for politicians to even discuss the prospects of selling the precious metal.

LeSinTony's UK Shifts Closer To EURO #755425/13/02; 06:24:10

Blair's 'battle plan' for the euro
By Philip Johnston, Home Affairs Editor
(Filed: 13/05/2002)

TONY BLAIR'S chief strategists have drawn up a secret "war plan" for a referendum on joining the euro, possibly as early as next year, The Telegraph reveals today.

A report from the Prime Minister's personal polling consultancy suggests that for the first time the referendum is now winnable, though it admits that resistance remains strong. However, Mr Blair still has much to do if he is to convince the electorate to take such an historic step.

In a blunt message to the Prime Minister - almost a year after he won a second landslide election victory - the report says Britain is "in a pessimistic mood" and voters view the Government with "distrust and cynicism".

It adds: "People have a great deal of uncertainty and, increasingly, see less progress. A majority now thinks the country is headed in the wrong direction, a malady since the beginning of the year."

The findings are contained in a report on the prospects for a euro referendum compiled by the research consultancy GGC/NOP. Its co-founders, Philip Gould and Stanley Greenberg, are the Prime Minister's main advisers on public opinion.

Their report, which has been obtained by The Telegraph, says the "yes" side is still 14 points behind the "no", with 41 per cent support to 55.

But it adds: "The fact that more than 40 per cent of the country is now prepared to vote 'yes' represents a kind of milestone. We still trail significantly in the euro referendum but now seem in reach for the first time."

The gap between the two sides falls to six points among those who say they are likely to vote and narrows further to just three points once the Government has signalled its support for a "yes" in the nation's economic interests.

This means that Mr Blair is working on the assumption that he might be able to enter a referendum campaign almost level-pegging with the "no" campaign. However, the Government may be too estranged from ordinary voters - including Labour supporters - to sell the "yes" message effectively.

A "sizeable bloc" of Labour voters is growing disappointed with the party and there is a perception that the Government is "arrogant and out of touch with ordinary people". Only half of Labour voters support joining the euro.

The existence of the report - described as "a first baseline survey on a potential euro campaign" - confirms that the Government is stepping up preparations for a referendum. In the past, Mr Gould has been Mr Blair's most sceptical adviser on the prospects for a "yes" vote.

Two years ago, he said the "fundamental divide" running through the country on Europe meant Labour "will never create anything like a national consensus on the euro".

GGC's conversion to the possibility of a successful campaign is a significant political development, given Mr Blair's burning desire to cap his time in Downing Street by taking Britain into euroland. It also explains why some ministers have apparently been given the green light to talk up the prospect of a referendum as early as next year.

For its latest assessment, completed just a few weeks ago, GGC/NOP carried out the largest survey yet on the euro, backed up by "extensive focus group" polling, to establish whether and how a referendum could be won.

"There is considerable evidence confirmed in this poll that we have moved up to a new level of support," it says. "The emotional strength is still on the other side and we still lose but there are historic developments that have shifted the balance somewhat."

The report, whose author is unidentified, adds: "For the first time, I am beginning to believe this is a winnable exercise, with an identifiable strategy - and not one that requires that we remake British history and culture.

"Our ability to move to the next step will depend in part upon whether the Government is able to reconnect with many of those who have become disengaged from Labour since the mid-1990s.

"Creating a new bond is a precondition for further gains. It is also necessary if we are to keep alienated and perhaps rebellious anti-euro voters from rushing back into the electorate and wrecking the referendum." The pollsters then set out where current support for the euro lies and how to construct a campaign that would result in a Yes vote.

From the possible gap of just three points, whether the referendum was won or lost would depend upon the strength of the campaign. "Indeed, it is difficult to imagine moving ahead prior to an actual referendum campaign."

The report says there are powerful counter forces at play, not least the "pessimistic mood" in the country and voters' negative perception of the Government.

Yet support for the euro is rising even as Mr Blair's personal stock is falling because people have a more positive view of Europe. Since euro notes and coins began circulating earlier this year voters also increasingly regarded Britain's membership as inevitable.

"The sense of inevitability is a new piece in the dynamic, placing the euro on some kind of historic trajectory," says the report. "About 40 per cent now believe the Government's decision should happen now or in the next year."

The report underlines the important role to be played by Gordon Brown, the Chancellor. "Two thirds say if Gordon Brown and the Treasury say the euro meets the tests, 'then joining probably makes sense for the country'. This is rooted in an underlying sense of economic well-being."

Ministers will be furious that the private opinions of Mr Blair's private pollsters have again been made public two years after the Government was rocked by a series of disclosures describing the New Labour brand as "contaminated".

20 February 2002: Hain hints at early vote to scrap pound
6 January 2002: We still don't want euro, say Britons
25 October 2001: 2003 target for vote on euro
9 February 2001: Blair slip starts euro countdown
19 July 2000: New Labour is object of ridicule, Blair adviser warns in fresh leak

SiochainUK in Euroland#755435/13/02; 07:30:22

Except for some unforseen and unlikely event,,,,the UK IMO will definitely be in the Euro block sooner rather than later.

I found it quite interesting that when Queen Elizabeth II spoke for only the fifth time before Parliament not long ago,,,,in clebration of her 50th anniversary as Queen....she noted about 6 or 7 REALLY MAJOR EVENTS during her reign....and one was the advent of Euroland.

This to me was a clear cut signal and blessing is now just a matter of when

BasilGold Standard--Renewable Energy#755445/13/02; 07:38:48

The scenario you apparently envision cannnot occur without serious disruption of witless domestic energy wasting habits.
The planet cannot support multi-billions driving single passenger occupied Excursions at 80 MPH hither and yon as we presently do.

The issue may become whether or not the system will even continue to tolerate such abuse by Americans.One way or another I suspect it will begin to unravel soon.What will trigger this is debatable.

Agreed this should ultimately lead to sea change innovations -- major tech breakthroughs in energy generation and utilization.

In the interim things will become unpleasant.

BoilermakerEnergy Crisis- The Perfect Storm#755455/13/02; 07:52:19

Black Blade and Gold Standard

I have no doubt that an energy crisis looms on the horizon. It is forming (like a perfect storm) from conventional supply/demand forces and from ME politics and conflicts. The Arabs have the ability of plunging the world into a crisis at any time for any reason. The only thing that prevents them from pulling the oil trigger to send the US economy into turmoil is the fact that there will be worldwide economic collateral damage such as Europe and Japan. They did it once before and the resulting damage took years to heal. However, when the fundamentalists take control of Saudi Arabia all bets are off.

The most unfortunate situation for the US is that unlike Europe and Japan, who have always maintained extremely high taxes on oil products to reduce per capita demand, the US has always pushed for lower energy prices as a populist political objective. US oil producers are regularly demonized when prices increase and if prices rise too much Congress starts to make punitive noises such as windfall profits taxes. When prices plummet, no price supports are enacted such as they are for farmers. This anti supplier bias severely inhibits investment for alternative more expensive energy sources. Anyone who invests in alternative energy development does so at considerable risk.

Unless and until the people of the US "Collective" are educated to the energy facts of life our policy makers will continue to march us towards the storm. I see no leadership that will change this course. I don't even see the industry sponsored efforts such as Mobil used to advertise.

Like gold, oil (and NG) have beem supressed too long and will rebound accordingly.

So be prepared for a killer crisis.

WaveriderEnergy watchdog sounds warning on oil output#755465/13/02; 08:20:10

"Oil producers should prepare to increase output or risk launching the market back on to the switchback ride of 1999 that saw industrialised countries' stocks plunge and prices soar, the International Energy Agency said on Monday.

In its latest monthly report, the IEA, the OECD's energy security watchdog, issued a thinly veiled plea to the Organisation of Petroleum Exporting Countries to consider raising exports when it meets next month.

"In 1999 markets demonstrated that they can turn quickly, contributing to extreme price volatility and instability. Producers will need to make timely decisions to meet market demand," the report warned.

If output cuts by Opec and its allies - principally Norway and Mexico - remained in place, and given that Iraq has already taken 45m barrels out of the market with the export suspension it ended last week, OECD stocks would head for the bottom of their five-year range by the end of the third quarter, said the IEA."

Tevye?Debt Free Nations?#755475/13/02; 08:21:32

I was attempting to explain some of the world's financial problems with debt (such as Japan, Argentina, US, etc) to my son the other day. He asked a pertinent question. Are _any_ of the worlds countries not debtors? Has every nation put its children in future bondage? On the one hand, we guessed at a few trivial examples, such as Monaco or Andorra, On the other hand, the only country we felt sure was not a debtor was the Vatican - but they don't produce many children so what does it matter!!

What say you all - where in the world is the future not mortgaged? And what sort of political will, (or collective) will be produced by these children as they come of age?

...if I were a rich man, ....

WaveriderSilver Lease Rates#755485/13/02; 08:32:26

The silver lease rates are up again today and in backwardation suggesting a shortage of physical silver.

Smile Rich :)

Cavan ManA victory for truth and common sense....#755495/13/02; 08:40:25

S&P USES operating-earnings data to calculate some of the most widely watched stock-market ratios, including ones tied to the S&P 500-stock index. The firm's move to stricter standards underlines investors’ craving for reliable financial snapshots of publicly traded companies in the wake of accounting scandals at collapsed energy trader Enron Corp. The most controversial of S&P's new standards would treat employee stock options as a quarterly expense against earnings. The matter has drawn attention in Congress where Sens. Carl Levin (D., Mich.) and John McCain (R., Ariz.) have proposed legislation that would require companies to show their stock options as an annual expense or risk losing certain tax breaks.
Generally accepted accounting principles, set by the Financial Accounting Standards Board, set standards companies must use for reporting net income. But companies aren't precluded from publicizing other earnings measures.
S&P, best known for evaluating companies’ credit ratings, has no enforcement power, of course. But its use of the new standards internally, especially when calculating such market bellwethers as the price-to-earnings ratio of companies contained in its S&P 500 index, will make its methodology hard to ignore.

Most immediately, the approach will provide ammunition for those who think the market is too expensive. Using current definitions of operating earnings for 2002, the S&P 500 is trading at a price of about 22 times estimated 2002 earnings. However, using the new definition of core earnings that S&P has just developed, the ratio rises to 30, officials said.
"When you realize the average price/earnings ratio for the last 50 years has been 16 times, you can see that the market is overvalued," said David Blitzer, chief economist for S&P. "The new definition shows that the valuation today is extreme." Besides treating stock options as an expense, S&P will include restructuring charges from continuing operations, even as pension-plan investment gains will be excluded. S&P's new stock-option standard alone will ratchet down its estimated earnings this year for companies in the S&P 500 index by an average of 10%, S&P officials said.

The move by S&P, a unit of McGraw-Hill Cos., represents the latest twist in the growing controversy over "pro forma" profitability measures, which are calculated by many companies across all industries "as if" certain normal business items — usually expenses —didn't exist. Companies label these nonstandard profit measures with terms such as "pro forma earnings," "core earnings" or "operating earnings." S&P is responding to investor concerns about such measures, including that wide variation in how such numbers are calculated makes it difficult to compare companies’ financial performances. Late last year, S&P said it would seek to create industry standards to eliminate some of the confusion.
S&P's new definition of operating earnings is particularly tough on technology companies, which generally depend on stock-option compensation more heavily than many other companies.
But the exclusion of pension-plan gains, in turn, will be more painful to old-line industrial companies with large pension plans. Moreover, S&P will include annual pension costs even as the investment gains are factored out.

"People will be unhappy about taking out those gains," Mr. Blitzer said. "Everybody has been living off the fat of the bull market." Because of quirks in pension-accounting rules, "even if you lost money last year, you could still show positive numbers by using a three-year average."
Other items S&P favors including in core earnings: write-downs of assets which are depreciable (a write-down is recorded when the fair market value of an asset drops below its net book value) and the cost of buying outside research-and-development services.
Among other items that it says should be excluded from core earnings are goodwill-impairment charges. Goodwill represents the difference between the price paid for an acquisition and the fair market value of its identifiable asset. Other exclusions: unrealized gains and losses from hedging activities and merger-and-acquisition related expenses.

Copyright © 2002 Dow Jones & Company, Inc.
All Rights Reserved.

White HillsRollover#755505/13/02; 08:57:13

I have posted before on the subject of the 1981 movie "Rollover" and circumstances today seem to point out the Prophetic scenerio of the movie. Its basic story is the Arabs getting out of the dollar denominated investments and into GOLD. The result is the collapse of the dollar and hyperinflation world wide.It is still available at video stores and if you haven't seen it you should as more and more it seems very possible. Could this threat be what is causing the US to tiptoe around ME situation.I don't know who wrote the screen play ,maybe FOA? It is Spring in the Desert. FOA where are you? White Hills
Black BladeSaudi oil: How strategic?#755515/13/02; 09:44:21


If oil exports from Saudi Arabia are interrupted, the world price could triple to more than $60 a barrel (42 gallons), at least for several months. How vulnerable is the United States and what should be done to prepare for this eventuality?

The attacks of September 11 have exposed some of the fissures within the kingdom. On the one hand, the royal family has been supporting, financially and politically, the terrorist al Qaeda to assure continued backing from fundamentalist Islamic clerics. On the other hand, the regime has permitted the stationing of U.S. troops in Saudi Arabia to protect against incursions from Iraq. But the presence of foreign troops also heightens the danger of internal rebellion; it creates resentment among the growing number of well-educated but jobless Saudis, and incites the anger of fundamentalists against the regime that tolerates — as Osama bin Laden puts it — "infidels on holy Islamic soil."

Black Blade: Now this sounds familiar. "Interesting" scenarios are presented by the author – "Fred Singer". OPEC has no reason to increase oil production as the official line is that the economy is "recovering", so therefore there is no incentive to lower oil prices. Notice that Oil and NG prices have collapsed today.

USAGOLD / Centennial Precious Metals, Inc.A Rare Treat!#755525/13/02; 10:37:17

Brazilian 20000 Reis
Big Country... Big Gold
Over One-Half Ounce

A rare treat by the new Republic of 1889

Call Centennial for details, or order online.

Black BladeLease Rates#755535/13/02; 11:29:51

Quite a jump in Silver lease rates. Platinum lease rates are still quite high as Russian exports have not effectively materialized - no surprise here. Gold lease rates are generally higher.
Black BladeOil fuels US army role in Georgia #755545/13/02; 12:09:51,6903,714160,00.html

Nick Paton Walsh in Tbilisi finds that pipeline protection is a key motive behind a US operation training Georgia's army to fight terrorists


Anti-terrorism is not the only reason for the relationship between the United States and Georgia. Georgia is also the shortest route between the [oil reserves] of the Caspian Sea and Turkey.' An international consortium of oil companies including BP, America's Chevron, Russia's Lukoil and France's Total considers Georgia the ideal route by which oil from Azerbaijan and Central Asia can reach Turkey and the West.

The present single pipeline is soon to be joined by two others, more than doubling the network's capacity. American training helps protect the pipeline - and its steady supply of oil to Western cars. BP recently sent a risk analyst to the area to explore opportunities for expansion. 'The pipelines will of course benefit from the military presence,' said a BP spokeswoman. 'It is in British interests that the pipeline works. BP is a major sponsor,' Katcitadze said. The British military has been giving the Georgian army English language courses, for years, he added.

Black Blade: It's always about oil. Most twentieth century military conflicts in the world are partially about oil.

Waverider – You may find this is a point made in "The Prize".

Black BladeUS companies face new pressure on stock options#755555/13/02; 12:23:40


US companies will this week come under increased pressure to deduct the cost of stock options from earnings. Standard & Poor's, the stock indexing and credit rating group, will announce on Tuesday that it will change its assessment of corporate performance to take into account the cost of stock option awards.

S&P has decided that for all companies included in its US indices it will deduct stock option expenses from its calculation of operating earnings. S&P also plans to detail how its new approach, which will exclude items such as pension gains, and gains and losses from asset sales, would apply to the earnings of such market bellwethers as General Electric and Cisco Systems.

Advocates of stricter accounting standards claim corporate America is opposed to change because it would affect executives' remuneration. Earlier this month, Warren Buffett, the influential investor, described the corporate lobbying campaign against reform as shameful. S&P's decision, which follows months of discussions with the investment community, will not alter the accounting rules but it will put pressure on companies to supply more information about the cost of stock options and other data. One person close to the group said S&P would be "active in trying to take this formula and promoting it".

Mr Blitzer, who headed the S&P review, also says in Monday's article that companies should make "a clear distinction between pension investments and corporate earnings".

Black Blade: I hear a mad rustling of papers in the accounting offices at Cisco, Microsoft, Oracle, Novell, etc. I am sure that these companies are scrambling to find other accounting tricks to deceive their investors. These rules changes could seriously impact corporate earnings reports.

AristotleThe (Personal) Gold Standard revisited#755565/13/02; 12:37:34

In this representative democratic republic system of ours, we each have (most notably) four votes apiece to change the world more to our liking. Actually, we have those votes, and also the persuasive powers of our convictions to lobby our leaders for change. The sad truth is that we remain a tiny voice lost in a wide crowd. So where do we turn to improve the quality of our personal experience and interactions with the world at large?

As near as I can tell, the primary appeal among some of us for a return to a Gold Standard is for the integrity it would bring to our monetary system. At least that seems to be the prevailing perception, anyway. (A false one, but that's the topic of previous post.)

The truth of the matter is that if we pause to consider the monetary system as a whole, we quickly realize that it's far more complex and runs far deeper than the superficial quality of the coins that happen to be jingling in our pockets. Given the nature of the system, money (and its integrity) can be no better than the commercial integrity of our banking institutions against a political backstop that has the wherewithal to change the rules smack in the middle of the game.

As we've seen in real life, the form of our currency may be Gold one day, then cupro-nickel the next. You may vote and lobby to the end of your days, and if you live to be a thousand this won't change a thing.

So what's the next best thing? Get on with your life!!! Take a good look around, make the most of the situation at hand, and apply your energies where they might have meaning. Ply your trade and be a success. After all, the nature of your money is secondary to your real concerns. Or it certainly should be.

Sure, sure, the integrity of the Monetary System is very important to all of us. After all, it plays an important role in facilitating the human business of, well... BUSINESS! We try to organize our lives and our operations so that we can plan ahead and reasonably know that our future will be secure. In business, we do that through the wonderful invention of contracts. Contracts to build, contracts to buy, contracts to borrow, and any variation you can imagine. Our development of the Monetary System grew out of our human desire to plan forward. For future security.

A huge *huge* HUGE mistake that many people make, however, is in somehow confusing their personal security with the integrity and fate of the money they use. Note that I said only "money" and not "Monetary System." To be sure, our personal security is very much intertwined with the Monetary System because it forms the backbone of our network of contracts. But that's independent of the monetary unit itself. The System can thrive, and the human business of business can thrive, even as the money within the system suffers a well-recognized long slow sliding death by inflation.

Let me put this as simply as I can.

If your physical or emotional well-being depends upon the fate and integrity of your monetary unit, then something is seriously out of balance. You have placed way too much of your own life's future security on a throw of the dice.

Understand this: the integrity of the Monetary System is more important than the Money itself. As a result, (and we've seen this constantly occur in our real lives,) the value and nature of our currency will always be sacrificed as necessary to save the integrity of the System. Gold one day, paper the next. We can do nothing to change this, nor should we really care if we don't allow ourselves to be overly exposed to the effects of a diminishing (some would say "dishonest") unit of money.

So what's to be done? Readjust your position! Money is merely the ethereal middle-ground of contracts, and in our quest for security, this is no place to live! Put yourself on a Personal Gold Standard. Carry from month to month or quarter to quarter no greater quantity of money than you reasonably expect you'll need. Take your paycheck, earnings, income, whatever; drop it in your checking account, pay your bills, contemplate an attractive investment or two, buy some new patio furniture, and roll the purchasing power represented by any leftover money into Gold.

In the end, you'll find that even though you must chart a course through a life surrounded by "dishonest" ever-failing money, you can take comfort that your actual savings are "honest" and secure, come what may. And that's what you really wanted all along, right? Security.

Gold. Get you some. --- Aristotle

YGMAristotle...#755575/13/02; 13:34:12

Wonderful Post......Sage Advice......

You said: So what's the next best thing? Get on with your life!!! Take a good look around, make the most of the situation at hand, and apply your energies where they might have meaning. Ply your trade and be a success. After all, the nature of your money is secondary to your real concerns. Or it certainly should be.

**Off to buy some new patio furniture and a hammock, thanks for rounding out my day.....YGM :>))

RockJust Rambling Out Loud#755585/13/02; 13:49:57

Greetings all my good friends here at the castle, I read in the paper yesterday that they think 4 possible nuclear reactor centers could be targets of a terrorist attack on the 4th of July. There was information gathered by top level intelligence reports to suggest this is something that should be put out to all goverment agencys but due to the last few warnings that didn't materialize they decided not to go with the media on this one.

The FBI apparently screwed up on the twin towers 9-11 because they did have intelligence that pointed to arabic individuals at flight schools that were possible preparing for an airplane suicide attack with the twin towers a possible target. Supposedly three days after the FBI gained this intelligence the towers were reduced to dust. I get so upset just thinking about it.

But regardless of all of that and to get to my point is that there are so many warning signs of dangerous uncertainties all across the globe as well as the USA which we recently found out. As a free democratic society we are so vulnerable from so many different levels of attack such as our food chain, water, energy grids or a host of other ways of sabotaging our vital infractructures. We know the terrorist are after us, that much we do know. And knowing that how many have prepared to handle it "when" it happens, notice I didnt say if. Even the Secretary of Defense says its expect something to happen again.

But yet so many of my friends and even some family members fail to take the heed and quit taking everything for granted. I keep telling them after 911 everything changed. They think nothing is going to happen to them and they'll will be provided for me because thats the way its always been. Someone here at the table mentioned the same thought a few days ago saying its going to be time to pay up for all those good times.

Anyway, knowing the terrorist are after us, they want to take us down anyway they can and we know the extent they are willing to go. How do you deal with a suicidle brainwashed manic? Look what happened at Pearl Harbor and look how we had to deal with them, we had to drop the A bomb because they were running havoc on us.

All i want to say to anyone who is contemplating on whether they should take the big first step and buy gold is that it will be one of the wisest things you can do for yourself and your family's financial security. I had to buy it also for the first time in 1998. Everyone here at the castle has taken that first step and we know it was a wise and prudent decision.

I know I don't regret it. I watched it go down to $260.00 an ounce and I got mine at 290.00 an ounce and did didn't worry a bit becuse I knew it was only a matter of time before it would shoot through the roof. I purchased gold for the long run not the short run because its not a good thing to have the day traders mantality when dealing with PM's. But i still love seeing it jump up from day to day.

Anyway getting back to my ramblings, we've been talking about that big house of cards ready to fall, the signs are all around us that we live in very fragil times and not to take everything for granted because anything can and probably will happen so be ready for it. As my good friend Sir BlackBlade puts it now and again, to prepare a food storage program and put away a little cash for a few months, get some gold and silver portfolio insurance and you'll be glad you did, your very life can depend on it.

Thanks for listening, I'm rambing today.


mikal@Rock, Aristotle#755595/13/02; 14:14:47

Excellent work. "A few honest men are better than numbers."-Oliver Cromwell, letter to Sir W. Spring, Sept. 1643
SiochainHey...we're Polite Society Now!!!!#755605/13/02; 14:20:01

From the Daily Reckoning:

- How rough is it out there in the stock market these
days? Here's a clue: Despite the biggest one-day rally
of the year last Wednesday, all the major averages
finished the week in the red. The NASDAQ, for example,
soared nearly 8% last Wednesday. And yet the tech-laden
index still managed to drop 0.8% for the week. Likewise,
the Dow fell 0.7% and the S&P 500 lost 1.8%. That's

- Most investors aren't accustomed to this sort of
thing...(We used to call them "bear markets"). Stocks
are supposed to go up, aren't they? In fact, aren't
stocks supposed to go up at least 15% per year?
Something is wrong here.

- The stock market's frailty is as astonishing as the
gold market's resilience. It's as if a mad scientist
lured these two markets into his laboratory and
fiendishly swapped their DNA. The stock market seems
dejected and full of self-loathing. It rallies
occasionally, merely to stumble even lower than
before...just like the gold market used to do. The gold
market, on the other hand, is brimming with confidence
and vigor. It rallies and holds its ground...just like
the stock market used to do. Hmmm...pretty weird.

- Gold is very "well bid," as the traders would say. And
gold stocks are even more popular than the metal itself.
Despite the fact that the yellow metal slipped about
half a percent last week, gold stock mutual funds jumped
4.7%, according to Lipper Inc. Year-to-date, the gold
funds have advanced a sparkling 53%.

- The higher they climb, the more fans they attract and
the more vocal longtime gold bulls become. One by one,
the gold bulls are emerging from their bunkers and
attempting to rejoin polite society. The assimilation is
made easier by the fact that polite society itself is
becoming increasingly bullish about gold, for the first
time in a more than 20 years.

slingshotRock and Aristotle#755615/13/02; 14:36:37


Great Posts.

Chris PowellCBS finds GATA's Murphy at the front in the gold war#755625/13/02; 14:37:26's Thom Calandra finds
GATA's Bill Murphy at the front in the gold war:

To subscribe to GATA's dispatches
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you don't have to go look for them,
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The VictorianThe housing bubble and foreclosure rates#755635/13/02; 15:20:18

I seldom post a message, and am content to lurk and absorb the wealth of knowledge found here, but I have to share the contents of an email newsletter I received today. I receive this emailed trade publication routinely, but am generally too busy to read it. Today's headline caught my eye as it concerned appraising properties taken back by the bank through foreclosure. The comments about the housing bubble bursting and the expected increase in foreclosures are so nonchalant it amazed me. Excerpts below:

"Unless you are in a very unusual market or have some
extraordinarily loyal clients, you are already seeing volume decrease.
Unemployment is now at about 5.7%, the highest level in a decade. It continues to increase. At the same time, interest rates began to move upwards. In part, this was due to the system being jammed up with refi applications, but that has now begun to decrease as well. What does that
mean to you? It means that the overwhelming work loads are starting to disappear. The bubble has already burst. Sure, it is possible that it can inflate again, but when and for how long? If you really know the answer to that, call me and we can make some money trading bonds. In the meantime, most sane appraisers will look to ensure that they have
adequate work levels."

"At our NAIFA Education Conference in Reno, Bill Pena of Fannie Mae told us that he expected foreclosures to increase substantially in the next 6-18 months. At least one of HUD's Management and Marketing (M&M) firms expects foreclosures to double in the same period. Other clients have given similar projections. This represents a tremendous increase in appraisal orders, but this work will go to those who know how to do it."

These views seem to substantiate the opinions of many here in the forum that the economy is not rebounding, and we are in for tough times ahead. The consumer, particulary many homeowners, have gotten too deeply into debt, and a great many will not be able to depend on stock market gains, or other investments, to bail them out. For many, it's too late to grab onto the golden bandwagon as it passes by, but I do believe the astute investor, who still has some money left to invest, will soon see that the gold rally is sustained. Market fundamentals have changed.

I believe in owning mostly physical gold, but we have recently purchased a few shares in a couple gold mining companies. I thought we were already too late to the party considering how much gold shares had risen this year, but since early April we are up 27% on one, and the other, purchased a week or two ago is already up 11%.

I'm trying to encourage people who will not take the plunge and buy physical, to buy a few gold shares. Once they see the momentum, I think they will develop a greater interest in gold, and hopefully they will do the intelligent thing, and invest in physical as well.

Cavan Manmikal#755645/13/02; 15:30:55

Dear Sir: Mr. Cromwell was a butcher: a cruel and brutal murderer. Though he may have lived in a castle, I bemoan the fact that his memory is echoed here.
mikalRetail sales hit #755655/13/02; 15:44:03

Tepid April: General Retail Sales Up Modestly-- 5/10/2002

snippit.......While some analysts said that sales overall would better than expected, considering such factors as bad weather and a March Easter, they cautioned that there will not be a surge in consumer spending soon. As Carl Steidtmann of Deloitte Research told the Wall Street Journal: "Consumers are running out of purchasing power...Retailers are going to struggle."......Click link for more.

IGWA"There's None So Blind As Gold Bugs With Heads Deep In Sand"#755665/13/02; 15:54:45

Expert financial commentators like Messieurs Taylor & Sinclair have a reputation for accurate calls in gold/investments but when I quote them (from the Gold Eagle web site) in a post yesterday as saying that the Govt will not allow its power to be eroded in the coming crisis, and that it may do irrational things - when gold goes to $1,000 - that are against the Constitution (that means banning the holding, selling or trading in gold, my friends) the silence here is deafening.

There's a simple reason.


Many posters on this site have a big stake in gold - physical, stocks, paper, and all the psychological baggage that goes with it. You are terrified the government will do what it has done before, that is, make the holding, selling or trading of gold illegal. It's your secret nightmare.

So what do you do? Don't mention it! Don't even think about it! Ignore any post that has the temerity to bring it up! Bury your heads in the sand and hope it all goes away….!! How cowardly.

Hello, hello, anyone at home??

Please, tell me it's different this time - refute my argument that they will do exactly what they have done before. Are our politicians more honourable? More trustworthy? Do they have the greater good of humanity at the forefront of their thinking? Don't make me laugh!

You - a small group of elite 'True Believers' - should be ashamed of yourselves. You know that the lie of fiat currency is going to destroy everything, and you roundly condemn those who cannot, or will not see.

But you are guilty of the very same thing by refusing to acknowledge what respected commentators are saying. How ironic!

Sadly, I see some of you repeating the despair of poor old Jessie, when he was confronted with the truth. Don't say I didn't warn you.

No doubt Black Blade will follow this with another post about the deteriorating world situation in oil or whatever, leading to crisis. Artistotle will implore you to buy gold. And no one will dare mention the unmentionable…

The truth will not only set you free, but save you from financial ruin. But first you have to overcome your fear.

The question is, will this post be enough to have me banned from the site (by popular demand, perhaps?). If you don't see my cheery words again within a week, you'll know fre