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ARCHIVED DISCUSSION FROM 10/10/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) Mr Gresham (10/10/00; 23:39:21MT - usagold.com msg#: 38754) Mr Moto's Money Report http://www.piraz.com/wmre.htm Mr Moto, formerly of Bearforum and a commentator at Prudent Bear's site, researches and writes well on topics of our mutual interest... Black Blade (10/10/00; 23:30:45MT - usagold.com msg#: 38753) SPR Oil Carry-Trade? Special to TheStreet.com Will Strategic Petroleum Reserve Oil Make You Warm? Maybe NotBy Christopher Edmonds When the U.S. Department of Energy revealed the "winners" of the Strategic Petroleum Reserve lottery last week, you might have expected the list to read like a Who's Who of petroleum refiners. After all, the whole reason for releasing the 30 million barrels of crude is to make sure all Americans stay warm this winter, especially those using heating oil, manufactured from refined crude. "The temporary infusion of 30 million barrels of oil into the market will likely add an additional 3 million to 5 million barrels of heating oil this winter, if refineries could match higher runs and yields seen in the past," said Secretary of Energy Bill Richardson in announcing the plan to release oil from the Strategic Petroleum Reserve, or SPR. This column has noted the challenges refiners face in transforming the crude into distillate products. Now, however, there appears no guarantee that the SPR oil will ever make it to domestic refiners. Most of the companies receiving SPR crude aren't refiners or even directly related to them. Take a look at the winning bidders: Company Marathon Ashland Petroleum, LLC - 3.9 Million Barrels (MMB), Euell Energy ---------------------3.0 MMBBP Oil Supply Company-------------6.0 MMElf Trading, Inc. ----------------1.0 MMBEquiva Trading, Inc. ------------2.5 MMBMorgan Stanley Dean Witter -------2.05 MMBVitol, S.A. ----------------------1.60 MMBValero Marketing and Supply ------1.0 MMBBurhany Energy Enterprises -------4.0 MMBLance Stroud Enterprises ---------4.0 MMBHess Energy Trading --------------1.0 MMBSource: U.S. Dept. of EnergyWhile a couple of refiners are getting a piece of the action, a significant amount of oil is going to energy trading firms to be put to work in their general trading efforts. As it turns out, almost half is going to neophyte, possibly wannabe oil tycoons with little, if any, experience in the energy business. Take Lance Stroud Enterprises. According to Platt's Oilgram, an oil trade publication, the company has one employee, Lance Stroud, and is located in a residential section of New York's Harlem district. When Platt called to inquire about the company's bid, the mother of the former army intelligence officer answered the phone. Stoud, who has worked as a grain wholesaler and has never been involved in the energy business until now, was out shopping for a Letter of Credit (LC). Each winning bidder has until Monday to present an LC to the Department of Energy. Platts reported that Stroud has an LC offer from Banque Paribas. Interestingly, Paribas is the same bank that energy marketers say refused to stand behind an LC it provided to the Power Company of America, or PCA, a now-defunct power trading and marketing company that contributed to a near meltdown of the wholesale power markets in 1998. "This sounds way too familiar and ominous," says an energy trading executive familiar with PCA's blackout. Two other winners of SPR oil are also unconventional: Burhany Energy Enterprises is located in Tallhasee, Fla. Burhany also appears to be a sole proprietorship, with Ronald Peek listed as the company's only employee. And, Euell Energy Resources is a Colorado company with "operations that include natural gas and power marketing, diverse pipeline installations and construction management," according to its Web site. Neither Burhany or Euell could be reached for comment. However, a check of filings at the Federal Energy Regulatory Commission, or FERC, show no filings by Stroud, Burhany or Euell. And while there would be no requirement to register with the FERC to receive oil from the SPR, most "legitimate" energy trading operations "have regular dealings with FERC and would appear in occasional filings" says the trading executive. Together the three companies are scheduled to receive 10 million barrels of crude from the release, over 40% of the total. At the same time, bids from refiners like Conoco (COC:NYSE), Texaco (TX:NYSE) and Royal Dutch Shell were turned down. "A prudent operator would not sell to these [lesser known] types of organizations," says one oil analyst. "There is just too much risk. It's almost like the government is selling the oil to itself," suggesting the winning bidders will ultimately not qualify. If winning bidders cannot provide an LC by Monday, the Department of Energy is likely to "go down the list" to other bidders, according to the analyst. However, that will delay the process even longer. Only four of the 11 recipients -- Marathon (MRO:NYSE), British Petroleum (BP:NYSE ADR ), Valero (VLO:NYSE) and Vitol -- appear to have direct links to refiners. Even Morgan Stanley Dean Witter (MSD:NYSE ) received 2 million barrels from the SPR. Dipping into the SPR puts more oil into the market but there's no guarantee it will be turned into heating oil and no assurance it will even be put to use in the U.S. As this column noted last week, it's quite possible that an unintended consequence of the policy will actually be to reduce domestic inventories as refiners feel pressure to increase exports to boost profit margins. In fact, while a waiver from the Department of Commerce would be required, the SPR does not require that the petroleum released be sold, either in it's original or refined state, in the U.S. And, since following the barrels from marketer to trader to refiner would be nearly impossible, there's no guarantee the oil will even be refined in domestic markets, let alone see its way as heating oil to the Northeast. And a final rub: Each of the recipients of SPR oil had to agree to replace the oil between August and November of next year -- a period that is prime time for building heating oil reserves for next winter. So, at the very moment supply will be needed most, more than 30 million barrels of oil will be removed from the system, a move that could simply postpone the supply quagmire until next year, well after the presidential election. "The policy is troubling," says a former Department of Energy staffer who worked with the SPR. "You have to question the purpose of the SPR." In a statement last week, Secretary Richardson disagreed. "Through this exchange, we can help alleviate tight oil and heating oil supplies, help make certain that Americans can heat their homes this winter, and add to the nation's national oil insurance policy, all at the same time. That's a good 'rate of exchange' for taxpayers, consumers, and the nation." For everyone, probably not. But for Lance Stroud and Morgan Stanley, it's a heck of a deal. justamereBear (10/10/00; 22:44:44MT - usagold.com msg#: 38752) Oilman 38665 Interesting train of thought but some debate too. Will post this weekend as I type so slow, and have not time now RegardsA. Black Blade (10/10/00; 22:35:18MT - usagold.com msg#: 38751) Petroleum News! Bullish! Onslaught of Inflation to Follow! Rep. Hyde calls for FTC natural gas investigationUS Rep. Henry Hyde (R-Ill.) Tuesday asked the US Federal Trade Commission (FTC) to undertake an investigation of expected high natural gas prices this winter to determine if they are the result of collusion in the market. "I don't know what he means given the competitiveness of the industry," said R. Skip Horvath, president of the Natural Gas Supply Association. Horvath noted there are 8,000 producers in the industry. "If you took the top five, they only have a 17% market share, Horvath says. "That's a very low concentration." In his letter to FTC Chairman Robert Pitofsky, Hyde writes, "Last year when prices were lower, producers cut their production. That production cut has led to the current shortage with corresponding higher prices. Such production cuts could be a legitimate response to market forces. On the other hand, if they were done collusively, they could violate antitrust laws." Hyde said consumers need to know whether or not producers and utility companies deliberately diminished reserves of natural gas in order to drive the price up. "Industry sources are hinting in press reports that natural gas used to heat millions of homes may skyrocket as much as 90% in the month ahead, and I think we must move quickly to find out if and why that is true," Hyde said. Horvath said Hyde is correct in that prices are higher due, in part, to cuts in production after the industry received low price signals in 1998 and 1999. The good news is that higher prices are drawing more producers into the market to get more gas to market, Horvath said. For the week ended Oct. 6, the number of natural gas rigs working in the US and Canada rose to 833, up 27 over the previous week and 234 over the same period a year ago, according to the Baker Hughes rig count. "Producers of natural gas are individually working as hard as they can to bring more natural gas to the market. In fact, there are twice as many rigs today as there were in April 1999, when prices and rigs were at their lowest in recent history, indicating a tremendous response by producers," Mike Johnson, vice-president and general manager of Conoco Inc. explained earlier this year in testimony before the Senate Energy and Natural Resources Committee. Hyde said an FTC investigation of natural gas prices will send an important signal to producers and utilities that federal regulators are monitoring activity that might be considered anticompetitive.Black Blade: Rep. Hyde is an idiot. He and his henchmen have done more to destroy the energy industry and make it unprofitable. Now that market forces assert themselves he cry''s "foul!" They also had 27 years to persue a self-sufficient energy policy and they didn't even though they knew that this day was coming.THE LATEST API NUMBERSAPI Review: Crude, distillate up as inventories dip unexpectedly --API: US crude stocks down 3.926 mln barrels in latest week --API: US gasoline stocks down 936,000 barrels in latest week --API: US refineries operate at 93.9% in latest wk vs 94.4% --API: US distillate stocks down 3.31 mln barrels in latest week --APIs imply US gasoline demand 8.23 mln bpd vs 8.25 mln --APIs imply US distillate demand 4.30 mln bpd vs 4.06 mlnNew York--Oct. 10--American Petroleum Institute data showing domestic crude oil inventories unexpectedly fell nearly 4 million barrels last week pushed crude futures sharply higher Tuesday. The data also showed stocks of distillate fuels dropped 3.3 million barrels as refinery use dipped. At 1717 ET, NYMEX Nov crude was up 72 cents at $33.90 per barrel. They were "unexpected draws," said Tom Bentz, broker at BNP Paribas. The report is "bullish" for oil futures, although more than half of the crude inventory decline was on the West Coast, which typically does not represent overall U.S. supply and demand trends. Brokers and analysts had expected stocks of crude to rise more than 1.5 million barrels and modest distillate and gasoline inventory increases. The data shows crude stocks are 16.5 million barrels below year ago levels. Supplies of heating oil, which are a type of distillate, held steady on the East Coast and remain more than 50% below year ago levels. U.S. refinery utilization rates fell 0.5 percentage points of capacity as companies continued to enter fall maintenance programs. Gasoline stocks fell 936,000 barrels as demand was only slightly lower. Nov heating oil was up 249 points to $1.0220 per gallon, while Nov gasoline rose 169 points at 93.10 cents per gallon, both extending gains from Tuesday's floor session.--API: US distillate stocks down 3.310 mln barrels in latest weekBlack Blade: Obviously we need to release a lot more SPR oil! At least that is what we could expect to hear from Al Gore. Maybe we should draw some more oil to refine into heating oil? But wait……--API: US crude stocks down 3.926 mln barrels in latest weekBlack Blade: Well maybe that's not a good idea since crude oil reserves are so low. We could just cram more oil through the refineries and use the SPR oil, then we could ………But wait…….--API: US refineries operate at 93.9% in latest wk vs 94.4%Black Blade: Refineries are still running at near full capacity. Still gotta do some maintenance work and do it soon because it has been put off for a long time now in order to take advantage of higher margins for distillates. --APIs imply US distillate demand 4.30 mln bpd vs 4.06 mlnBlack Blade: Demand is up and winter is coming. This week many areas of the US had record low temperatures - so much for global warming. Looks as if petroleum prices are destined to rise.--APIs imply US gasoline demand 8.23 mln bpd vs 8.25 mlnBlack Blade: No surprise here. There is a slight decrease in demand. Could this be because "driving season" is over? Driving season refers to the summers months when the pundits and analysts claim that more gasoline is used because people are on vacation. I not going to touch that one!--API: US PADD 1 reformulated gasoline stocks +1.0 mln bbls--API: US gasoline stocks down 936,000 barrels in latest weekBlack Blade: Here is a potential disaster in the making. With limited numbers of refineries and a lack of refinery capacity, we still cling to the stupid idea that we need various grades and mixtures of gasoline to meet EPA mandated clean air policies. Clean air is nice and desirable, but there is no universal standard where supplies can be brought from region to another to mitigate shortages. One mixture of reformulated gas in one area is not necessarily acceptable in another area. Last summer's gasoline crisis in Chicago resulted from a pipeline explosion and production problems directly related to a particular grade of reformulated gasoline mixed for Chicago drivers. Congress was going to investigate oil company collusion and price-fixing here too. When congress goes on break from session, no one can claim that there is a brain-drain in Washington. In short, look for higher - maybe much higher petroleum prices going forward. This has to show up in inflation - CPI/PPI notwithstanding.BTW, tonight petroleum prices are advancing with NY Crude up another $0.62 at $33.80/bbl - on top of a sharp rise in price today. Heating oil is up $0.0254 at $1.0225, and NG up $0.06 at $5.20 Mbtu. Peter Asher (10/10/00; 22:25:59MT - usagold.com msg#: 38750) Shifty Received and answered. Taurus (10/10/00; 22:14:19MT - usagold.com msg#: 38749) Turnaround 38742 10/10 OK. Throw "cost effective" in there for me, will ya? Thnaks.-Taurus SHIFTY (10/10/00; 22:13:05MT - usagold.com msg#: 38748) Peter Ahser Mail Call$hifty Taurus (10/10/00; 22:10:23MT - usagold.com msg#: 38747) Holtzman 38687 10/10 I have been lurking at this forum for several months. I've just begun to post myself. YOUR post, however, was by far the best I have read to date. I have time to respond to just one section – "There's no place like dome." In it, you address the bigotry so evident in Jewish-Muslim relations.You said: "Actually, blowing up Jerusalem would be almost as offensive to Allah as would be blowing up Medina or Mecca. Jews are People of the Book. They share common heritage with Islam… A good Muslim regards Jews and Christians as confused but well-intentioned children who yet possess the ability to someday see clearly. A good Muslim bears them no ill will, either in thought or in deed. The act of raining down fire upon the city of Moses would be that of a madman, not a Muslim."I concur fully, WASP though I may be. Mohammed lived circa 600 A.D., The Qur’an (or Koran, if you will) says (Surah II, Verse 62): "Surely those who believe, and those who are Jews, and the Christians, and the Sabians, whoever believes in God and the Last day and does good, they shall have their reward from their Lord, and there is no fear for them, nor shall they grieve."And that's not all by any means. The same theme is repeated over and over: If you believe in God, and do good, then you have nothing to fear from God nor His judgment. That's a far different picture of Muslim belief than we see on CNN news (or ABC, CBS, NBC, Fox, NY Times, et Al.) with militant, crazed Muslims blasting automatic weapons into the sky for kicks. Which gives one pause for thought… Who controls the mass media in this country? Who would present such a biased image? (The uncensored Internet is great, isn't it?)In 1998 and again in 1999 I spent several months in Malaysia for my company. Malaysia has an official state religion. It is a MUSLIM country. Your passport will be stamped with a notice that drug trafficking is punishable by DEATH. (Not to mention that your son, if caught scratching up expensive cars, will be whipped in public.)I was more than an little apprehensive about the trip. Damned worried, if the truth be known. And I found, to my amazement, that these were the sweetest, gentlest, most honest and trustworthy people I had ever known. The makeup of their country is 30% Chinese, 30% Indian (Hindu), 30% Malay (mostly Muslim, not all), and 10% Christian. I was AMAZED at the smooth race relations and the tolerance and sense of humor and goodwill exhibited towards people of differing colors and beliefs. AMAZED! We TALK about New York City being a melting pot. We talk. They DO IT.We need to get off our high horse and learn something about the rest of the world. THANK YOU, Holtzman, for the EXCELLENT, EXCELLENT post. Chris Powell (10/10/00; 21:53:11MT - usagold.com msg#: 38746) German TV reports on gold market manipulation http://www.egroups.com/message/gata/561 It's getting around, folks, and GATAis doing it.To subscribe to GATA's dispatches by email and get them immediately so you don't have to go look for them, send an email to:gata-subscribe@eGroups.com Turnaround (10/10/00; 21:39:22MT - usagold.com msg#: 38745) the Midas touch Taurus (10/10/00; 21:01:43MT - usagold.com msg#: 38742)Aristotle 38672 10/10"The only commodity-cum-industrial usage that I know of for gold is to plate the gold "fingers" in electronic circuit boards. This is done for purposes of corrosion resistance on the maleplug-in portion of the board. There are a lot of circuit boards in the world. Probably 99% do NOT have gold plating of any kind. And, of the 1% that do, the gold plating is only about 30millionths of an inch thick; it takes an X-ray machine to measure it. It will be a long time before all above-ground gold is consumed in circuit board manufacture.Prior to the circuit board era, gold had NO industrial value. "Sir Taurus,I must respectfully disagree with this. Gold would make a much better ballast for a fin keel sailboat than lead, for example. It would make better corrosion-proof fittings and hull coatings, too. I would like to have all my house and motor wiring made of gold or silver, rather than copper or aluminum, as they are both more conductive. Many of the applications for bronze, copper, tin, lead, bismuth, etc. would be better served by gold. It is only due to its rarity that we do not have gold cans instead of 'tin' cans. Turnaround (10/10/00; 21:19:37MT - usagold.com msg#: 38744) Red Ink in Asia http://quote.yahoo.com/m2?u Looks nasty over there, e.g. Nikkei 15,554 Black Blade (10/10/00; 21:07:28MT - usagold.com msg#: 38743) Nickel62 and beesting: when I was a lad of 12 years I lived in Quonset Point Naval Air Station and late in Newport. I used to spend my days digging Quahogs (about a 5 gal bucket) and fish for flounder. Boy do I miss steamed quahogs and butter, and fish and chips with malt vinegar. That brings back a lot of good memories. Thanks! BTW, I used to make a few bucks digging fiddler crabs for the local bait shops. Taurus (10/10/00; 21:01:43MT - usagold.com msg#: 38742) Aristotle 38672 10/10 Believe it or not, I think we are saying the much same thing but in different words.The only commodity-cum-industrial usage that I know of for gold is to plate the gold "fingers" in electronic circuit boards. This is done for purposes of corrosion resistance on the male plug-in portion of the board. There are a lot of circuit boards in the world. Probably 99% do NOT have gold plating of any kind. And, of the 1% that do, the gold plating is only about 30 millionths of an inch thick; it takes an X-ray machine to measure it. It will be a long time before all above-ground gold is consumed in circuit board manufacture.Prior to the circuit board era, gold had NO industrial value. Only ornamental value. To coat the dome of a mosque with gold leaf or grace the neck of an Indian woman with a high-caret necklace. "Conspicuous consumption" if ever there was such. A phrase coined by Thorston Veblen in 1899 in "The Theory of the Leisure Class". Assigned reading when I was a freshman in college. PLEASE don't ask me what year that was.(EDITORIAL ASIDE: Is it not peculiar that I, a white American male who places a high value on gold, have more in common, in this respect, with a Hindu woman in India than I have with my next-door neighbor or with most of my relatives? Just a passing thought…)Silver, as opposed to gold, has many industrial uses –- photographic film and X-ray film most readily come to mind. Silver has been a monetary metal but has also been an industrial metal for 150 years (e.g. Civil War photos).As a commodity, the value of silver can be manipulated or impacted by commodity-related events. Say, for sake of argument, we have a monetary system based on silver (and not gold). If, in such a world, all the Chinese (20% of the earth's population) suddenly achieved permanent most-favored-nation trading status (could this HAPPEN? they've been the Enemy as long as I can remember) and became rich and purchased cameras and bought silver-based film, just THINK of what would happen to the price of silver… UP!And what would happen to the value of our silver-backed currency?Again, for the sake of argument, what would happen if someone invented a digital camera and put silver-based film makers out of business. What would happen to the price of silver then? DOWN! And what would happen to the value of our silver-backed money?In one scenario, the value of silver (the backing for our money) goes UP. In another scenario it goes DOWN. And our money, backed by silver, is whipsawed as a result.Point is that the more value a commodity has as an industrial commodity, the LESS value it has as money. Why? Because it can be influenced by commodity-related events. Conversely, the less value it has as a commodity, the MORE value it has as money. ESPECIALLY if coupled with other characteristics such as long shelf life, divisibility, portability, etc. GOLD fits the bill, far moreso than silver or anything else. Isn't that what YOU were saying? I really think we're saying much the same thing in different words. I will not argue the point further. But I do urge you to be not so defensive. Do we seek truth? Or do we seek vindication of the preconceived notions which we bring to the Table Round?Allow me, Sir Aristotle, to challenge you with an idea. Post 38672: Aristotle -- "To my mind, there is no disputing that the desirability of an item (any item) is found in it's usage value. If it is useless, it has no value. If we can agree that is self-evident…"Taurus (this post, here and now) -- I do NOT agree that it is self-evident. (But I do have to admit that you sound like me… ah… er… 40 years ago, give or take.)I once interviewed for a job in a casket factory. They made beautiful caskets. Exquisite. Walnut, cherry, mahogany, teak. Hand carved. Or, if not hand carved, at least carved by a laser in Chicago. Big bucks.OK. Form, fit, and function. What's your definition of quality? These things cost megabucks and were destined to rot in the ground, unseen. So what is a casket's "usage value" when its destiny is to decay, invisible, in Mother Earth? And if it is useless, it has no value. That is self-evident, according to one line of thinking… This is not an academic question. The paradox is that people pay thousands of dollars, every day, for these things. Many people. Many thousands. WHY? Functionally, mahogany has no greater "usage value" to a dead man than pine. Similarly, why do people place a value on gold? As a building-material-type commodity (with the singular exception of circuit boards) it is useless… Its useLESSness as a commodity is the singular feature that makes it so very useFUL as money. ’Tis a hard saying… lamprey_65 (10/10/00; 20:55:00MT - usagold.com msg#: 38741) Stranger No problem. Hey, after losing out on thousands in possible gains when I sold my speculative techs/i-net plays last year-September only to watch Greenie open the spigots for Y2K...I can say the markets are HUMBLING. Oh, yeah...throw in the last year of a dead gold market too!We're way behind in this sell-off, it's been brewing since the Spring of '98. Greenie has delayed it twice.We're in uncharted waters. As we're fond of saying here on USA Gold..."We watch together..." TheStranger (10/10/00; 20:35:40MT - usagold.com msg#: 38740) Canuck and Lamprey Canuck - obviously I was typing when you posted to me. Thanks for the message and for the salutations. Good to see you, too.Lamprey - Sorry to appear to contradict your effort so soon after it was made. We'll see what happens. Tomorrow will be interesting at least, that's for sure. Midas Mulligan (10/10/00; 20:32:49MT - usagold.com msg#: 38739) Journeyman, you are right ,I'm not a goldbug, nor a goldbug swatter so i'm a flop at either role. All I am is a normal person who is bored with life because I'm not free. I'm 32 years old and I have been waiting, killing time, since I was 4 for the markets to fall and gold to rise so I could live free without restraints by mediocri tee.(Cronee(us)) I'm not a Giant, nor a Titan, I'm an Olympian waiting to live on the standard of gold and make a mulligan out of all of history. TheStranger (10/10/00; 20:29:45MT - usagold.com msg#: 38738) The Heck Of It Is...It's Free! Well, it looks like tomorrow morning is going to be another tough opening for technology investors. Shortly after the market closed today, Lucent warned they won't even hit earnings forecasts which had already been reduced. Now they say earnings will actually be down this year over last. Wow. This was supposed to be a premier networking company in an era where that was the ideal place to be. Such news cannot bode well for Cisco, either, a competitor with a PE still absurdly clinging to 150 or thereabouts. In response to the Lucent news, Cisco fell some 3 points or so in after-hours trading, breaking below $50. No one can deny this was an important support level for Cisco. Much of the company's growth, of course, has depended upon using overvalued stock to roll up cheap acquisitions. A serious decline in this widely loved bellweather will thus strip the company of it's "stock in trade", making a self-fulfilling prophecy of the bottom line. Furthermore, with such an important tech holdout now breaking down, serious doubt is cast over whether the Nasdaq itself can hold above 3000 this time around. I am betting it won't.As if the Lucent news were not trouble enough for tomorrow's opening, both Yahoo and Motorola announced, after the close, earnings which may have been in line with estimates, but were nonetheless disappointing to those who care about revenues. Yahoo was down another $7.00 or so in after-hours trading. Motorola fell a similar amount.This all brings me to why I come here to the Forum. It just amazes me how much of what has been forecast here in the past two years has actually come to pass. I daresay, I have found no other place on the net which has offered as much in the way of accurate investment insight as this place has. And the heck of it is...It's Free!Still, we wait for the biggie, of course, which is a thunderous upward adjustment in the price of gold. Now that even the sacred cows of technology have been discredited and energy stocks have assumed a role of leadership on Wall Street, can a serious reversal in dollar/gold be very far away? I wouldn't think so.Steve H. - I LOVE IT when you call out higher gold prices. Just seeing your handle cheers me. Please keep it up! lamprey_65 (10/10/00; 20:18:35MT - usagold.com msg#: 38737) And what of gold? I guess that's the $30,000 dollar question ;-)Unless we have a real panic, it will probably take some time for the bull to get its legs.In a panic...I've got my front row tickets and I'm sure it'll be one hell of a show!Lamprey lamprey_65 (10/10/00; 20:14:04MT - usagold.com msg#: 38736) The Mother of all short covering rallies coming? Tuesday, October 28, 1997 - Nasdaq bottomsThursday, October 8, 1998 - Nasdaq bottomsWednesday, October 6, 1999 - Nasdaq bottomsWe are within inches of the May low...after the Lucent warning tonight, I wouldn't be surprised to see a panic type day tomorrow with support at 3000...then the mother of all short covering rallies as the dipsters try to avoid "missing the next bull move." Maybe, maybe not. Maybe it just spirals out of control.My guess (that's all it is) is that we'll see a sharp, short market rally before the market crashes below real support at 2600 (the SuperBull trendline from 1995 I spoke of several months ago). This line is doomed to fail -- the conditions of low commodity prices, excessive monetary growth, and foreigners rushing to the U.S. for safety no longer exist.The next long term support line for the Nasdaq is right around 1500.Sure, Greenie can lower rates...just like Japan tried to do 10+ years ago in a very similar situation. Didn't work for them and won't work for us.The Grim Reaper is getting very close. Selling in tech land is simply breathtaking -- but it is CONTROLLED...for now, anyway. Leigh (10/10/00; 19:41:59MT - usagold.com msg#: 38735) Welcome Back, Bill Murphy! http://www.lemetropolecafe.com Boy, it's good to have Bill Murphy back in action writing his Midas columns again! I was going through Midas withdrawal over the weekend. There's a good new article by Ed Bugos, too. Canuck (10/10/00; 19:21:59MT - usagold.com msg#: 38734) @ Stranger http://216.46.231.211/guest.htm Hello Stranger,How are you my man, long time no hear! Here's one I found that might prove interesting; inflation at 27%.-------------------------------------------------"But if there never is a crash that can't quickly be fixed by the "Greenspand Fed" – what does the ever-expanding creation of currency mean to you and me as we struggle to invest our "savings" in some real "store of value." Most people will not chose to speculate with their entire life savings, so each day it will become more obvious to people worldwide: when currency becomes a commodity, commodities (especially those with limited supply) become money. An index of the raw materials that we use and consume in our daily lives, like Jim Rogers Raw Materials Index, may become a more important inflation (and currency dilution) indicator than the government's monthly CPI figures. For the year 2000, the Rogers Index is up 27.53% for the first eight months of the year. This index of the raw materials that are used in our daily lives compares to the 2.5-3% annual increase in the CPI reported by our government (and applied to COLA's that affect Social Security and government workers pay and pensions). Conclusion:As people begin to recognize the real inflation and our inability to use any saved "money" (now currency) as a "store of value," there may be a move and then a rush to reposition financial assets that have been saved into real stores of value."--------------------------------------------------------End clip.Also interesting is the author's quote "...when a currencybecomes a commodity and when a commodity becomes a currency.." White Hills (10/10/00; 19:20:05MT - usagold.com msg#: 38733) Aladdin and his lamp Jouneyman, you asked about the Aladdin Hotel. It is beautiful you really have to see it. One of many here that defy discription. Sort of like the stock market they don"t care if you win or lose just so they get their percentage of the action. Was gone for a week to Georgia to visit our daughter and visited the Jeykll Island hunting and fishing club where in 1913 the Federal reserve was spawned. The tour guide spoke as if that was an honor or something. It is quite a place and you can see what big money really was in those days. If Greenspan had a lamp he could rub and call out the Genie to save the day, What would the Genie do? From all that I*can see we are heading for rough times. I am ready but most average people haven't a clue to whats coming. White Hills, By the way I have a place in Arizona located, where else, in the White Hills! It is 28 miles east of Hooveer Dam in striking distance of Las Vegas. HI - HAT (10/10/00; 19:17:35MT - usagold.com msg#: 38732) Junk Calls________Don't Answer IT I have caller ID. In the last 3 days Smith Barney and tonight Merril Lynch called the house. Salesmen I presume.Thats why I have caller ID, to screen out junk calls.I think the big boys and girls are sweating and running out of fresh victims to distribute too.At this time as we sit, big big money must be burning upthe wires, being electronicaly transfered around in the World like a pin ball machine.There is a danger of TILT.i SteveH (10/10/00; 19:14:13MT - usagold.com msg#: 38731) Peter, Gandalph...time to pay attention... Gold shows up $1.20 on Kitco. Could it be we will see a large spike tonight. Wake up all!!! Journeyman (10/10/00; 19:04:58MT - usagold.com msg#: 38730) Midas Mulligan, you're a flop! Mr. Mulligan,You didn't make a very good pseudo goldbug, and you're even worse as a goldbug swatter. Give it up.Journeyman Midas Mulligan (10/10/00; 18:56:30MT - usagold.com msg#: 38729) Shifty, and megatron, I like to play the role of devil's advocate for fun So remember, vote for Gore because even though you think he is a bore and a special interest whore at least in the end, when your polluted and poor, he'll be your friend, need I say anymore. Midas Mulligan (10/10/00; 18:55:44MT - usagold.com msg#: 38728) Shifty, and megatron, I like to play the role of devil's advocate for fun So remember, vote for Gore because even though you think he is a bore and a special interest whore at least in the end, when your a victim of poverty and pollution, he'll be your friend. Midas Mulligan (10/10/00; 18:49:07MT - usagold.com msg#: 38727) Shifty, you and your goldbugs will give in to "the force" that's against you, the force of "the man", the boss that yall foolishly oppose. As the phrase that pays says,"dont fight the fed". Big Al going to lower rates and that's good for inflating equity/bond bubble and deflating gold price. Greenspan and us bulls aren't "mice that roar" we're the man and our plan is to make you give in, "Gore you", if you will, by selling your gold to us. megatron (10/10/00; 18:46:32MT - usagold.com msg#: 38726) Midas Gilligan You are probably right on the 1st account about GreenScum inflating, since that's all he's done for 5 years. But you could be mistaken assuming 'goldbugs' will be 'crushed' due to the fact that most people who post here(not me) hold physical gold/silver and relish lower prices in order to buy more. Maybe your being funny, I dunno. beesting (10/10/00; 18:38:10MT - usagold.com msg#: 38725) Nickel62........Home. I was a member of the Thunderbolts in athletics. Team mate to "Snooky" Trafficante(SP) if you knew of him. What a small world.Kindest Regards....beesting. Midas Mulligan (10/10/00; 18:36:32MT - usagold.com msg#: 38724) Shifty, you and all your lame goldbugs are barbarian relics from the prehistoric keynesian past YOu don't seem to realize that Marty Zweig was right, "Don't fight the Fed". The Fed's going to lower rates after the election and further inflate the equities and bonds bubble and crush yall like the squirmy, shifty, bugs, goldbugs that is, yall are. Don't mess with Mr.Greenspan or yo'll pay the price once again. Sooner or later yall will be forced "to give in" and we will then buy up your gold and you'll finally know who "the man", the boss, is. Leigh (10/10/00; 18:34:59MT - usagold.com msg#: 38723) wolavka Dear wolavka: I miss Tolerant, too! I sent Bart an e-mail begging him to reconsider his decision to banish Tolly. It isn't right that one or two malcontents should have the power to force him off Kitco. Tolerant fans, unite -- and let Bart know how you feel! megatron (10/10/00; 18:33:00MT - usagold.com msg#: 38722) Javaman Your right, it's hysterical until you realize that this is the rare 1% investor that actually maybe did SOME research and knows about 'a' stock. What about the millions of people with mutual funds that don't even know 'what' the NASDAQ is?The goings on in the middle east are the least of anyone's problems here, with this kind of stupidity. schippi (10/10/00; 18:24:54MT - usagold.com msg#: 38721) 24 Hour Gold Chart http://www.kitco.com/charts/livegold.html Moving UP! JavaMan (10/10/00; 18:22:33MT - usagold.com msg#: 38720) Humor... http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=14525877 I just found this link Fleckenstein's page...it is histerical! nickel62 (10/10/00; 18:13:11MT - usagold.com msg#: 38719) Well Beesting I think maybe you are right now that you mention it there is a blue inside color to the shell. Quahogs were always very special knowledge to those of us who had experience digging quahogs in the little inlets surrounding the bays of RI. I bow to higher knowledge. I am from a little town called Westerly, RI in the extreme western corner of RI. Best wishes to you. What part of the area are you from specifically? I always loved the fact that no one else in college understood the jokes about Quequeg in "Moby Dick" quahog-quequeg seems to have been a sound alike for Melville as well. Oilman (10/10/00; 18:11:54MT - usagold.com msg#: 38718) DJ valuation From my work back in 1991, I have found that if you juxtapose the EPS divided be the US short term interest rate (eg fed funds rate) versus the DJ index in real terms, you get a pretty good correlation. The process works also well for the SP500, although at current levels, the index is clearly overvalued. It appearts that Greenspan has been using the same approach since 1996. wolavka (10/10/00; 18:05:24MT - usagold.com msg#: 38717) Mr. Tolerant I enjoy reading your postings, where ever you go let me know. Thank you. megatron (10/10/00; 18:04:44MT - usagold.com msg#: 38716) NASDUCK What I really gotta see is the repeat of last Oct.16. Anyone have a guess as to when Mr. Magoo will submit to the acute political pressure and open the spigots? They WILL NOT let er' go below 3000. Watch the phoniness between tommorow and friday! It will be palpable, the fear and scumbaggery as furious phone calls are made to Alan'JohnSteinbeck' Greenspan begging for the latest magic bullet. This is pure comedy! JavaMan (10/10/00; 17:57:22MT - usagold.com msg#: 38715) Mr Holtzman, your msg#: 38687 That was a fine piece of work. I think it may have given the term "civil engineering" a new meaning. Thanks for the contribution. SHIFTY (10/10/00; 17:13:15MT - usagold.com msg#: 38714) Midas Mulligan You remind me of a movie I saw a long time ago " The Mouse that Roared". All you need is a canoe and a bow and arrow. You and your friends can declare war, attack the USA , only in your case you lose, then collect aid, and corner the market on dot coms. Shifty TownCrier (10/10/00; 17:03:38MT - usagold.com msg#: 38713) Sir totalamateur... http://www.usagold.com/cpmforum/tools/goarchive.html "I was made aware of that some of you missed my posting, so here we go again..."So that posts (long ones in particular) need not be often reposted for the sake of anyone who may have missed them upon their birth, we provide an archive that is accessible at any hour of the day. Referring the interested party to the day and post number is not only effective and efficient, it is also the kindest way to assist our various daily visitors who have slow modems. beesting (10/10/00; 17:02:53MT - usagold.com msg#: 38712) Nickel62...Quahogs,Quahaugs...both spellings are right. Sir, we may know each other or been neighbors, long ago. I also grew up in that same area of the Northeast, I have dug Quahaugs with a home made "clam" rake, and pried mussels from rocks at low tide. My reference is from memory only but mussels have a thin brittle shell not suitable for long term use, IMHO. Whereas some of the larger Quahaugs have a deep blue to purple section on the interior of their extremely hard, thick, mostly white inner shell, very suitable for long term use, and almost as durable as rock.As a boy we were told the Narragansett Indians used this shell as "Wampum".Since "Wampum" seems to be well known in other areas also I would imagine it was also made out of other kinds of shells.Looks like today could be a turn around day for the price of Gold. Thanks for the input Nickel62, we'll watch these worldly developments together.....beesting. Journeyman (10/10/00; 16:58:07MT - usagold.com msg#: 38711) Paper gold & the powers that be @ALL Hmm. Paper & physical diverging? TPTB can't allow the "official" price of gold to rise as long as it's possible for "them" to prevent it -- it would serve as a red flag signalling dollar inflation in a way only the completely blind could miss. This in turn would clearly have the potential to precipitate Bigfloat home.On the other hand, they don't want to drive the paper price too low either -- they know that divergence is back-door to the same thing -- and it COULD cost them, potentially, a lot of gold bought by savvy outsiders.Their trick must be a proper balancing act, to the degree they're able, husbanding the physical resources they are willing and able to expend in the game and keep the balloon submerged just below the surface (at a stable price) as long as possible. As long as the demand for physical keeps rising, this is analogous to more and more air inflating the balloon. The "force" (amount of gold) necessary to keep the balloon just below the surface increases with the demand.The end game from this viewpoint would indeed be using paper to keep the official gold price down as long as possible because even when divergence occurs, this will still continue to disrupt the traditional price discovery. The gold prices quoted for quite awhile, even after there is no gold available for delivery, will still be these official prices. Until new markets evolve, this will dis-orient most traders and certainly the public and has the potential to disrupt the inflation "barometer" function of gold for some additional time period.If this is a correct analysis, then it suggests that this is the path things will indeed take.Regards,Journeyman schippi (10/10/00; 16:47:24MT - usagold.com msg#: 38710) Small sign of hope http://www.SelectSectors.com/xau10day.gif XAU, HUI, GOX 10 day Chart totalamateur (10/10/00; 16:23:09MT - usagold.com msg#: 38709) Gold and Truth! Gold and Truth! Is there a connection?I was made aware of that some of you missed my posting, so here we go again:There is a striking parallel to be found between your gold market and your 'spiritual market'. You are living in a time period where extreme materialism is prevailing and where spiritual substitutes have been accepted and been considered as adequate and the real thing for a long, long time now. By the same token as it takes a lot of faith to keep the Bible's ideas and thoughts close to heart and in general "keep the faith" as it is called, it takes a great amount of faith to keep and hold on to one's physical gold in these days. This applies whether you are a small guy and the owner of one little gold coin or a central banker with a vault full of gold bars!The Church, Christianity, religion and Christian faith has never been attacked so viciously and from so many sides as it is to day, with the Church and thereby the believers in God and Jesus being ridiculed and persecuted and even burned at the stake to entertain the public's lust for blood (Waco). Your government and the powers that be had no guilt in this instance, they said so themselves, and then it must be true, mustn't it? And all of you watching it all from your comfortable armchairs were equally innocent; after all they were a bunch of fanatics and weirdoes and had it coming! But come to think of it: What about Jesus and His disciples, weren't they a bunch of wandering hippies and dropouts as well? And Muhammed and his followers? Moses and his? Noah and his family, definitely off theirs! Etc etc etc... Sorry to digress like this, but this episode carried great importance and marked the beginning of the End of the World as you know it now!Anyway, back to the gold market: I propose that a familiar attitude that results in the burning of Christians at the stake is prevalent in the world of finance. There are believers in the lie; read: fiat currency, paper gold, and other papers, and you have believers in the real thing, the truth: real gold and actual, real, valuable commodities. The believers in the lie are in a solid majority; the majority seems somehow for a number of reasons to always be wrong. And sad to say, they are not satisfied being wrong themselves, they seek to persuade the undecided and the ignorant to come their way, and having done short work of them, they proceed to cover their own wrong choices and wrong-doing by ridiculing and persecuting the minority that holds to the truth with the hope of eventually getting rid of them altogether. The lie cannot coexist with the truth anymore than light can coexist with darkness. One side must win in the end. Real and sound money, if allowed to exist, will eventually drive out the lie that paper money is and be replaced with, yes, you all guessed right, gold and silver and even coppers for the smaller denominations. - What is new under the sun? (I am aware of the fact that it has been suggested on this forum that they can indeed exist and live happily side by side, but as one writer had said, time will prove all things, also that idea! A lot will be left for free men and free nations to decide and we will all continue to learn as we go.) I am here only as an observer, on a time travel back from the future, and it is very interesting to see how the thoughts of men are developing and helping shape the future where I already live. You forum writers are truly the avante garde of the economists of your day! Having served the Manufacturer in my time on Earth, I am now part of the 'maintenance crew' if you will. Although I have to admit it came as a shock to me the awesome responsibility that has been laid on my frail shoulders. But we work in team works with plenty of safeguards and have at our disposal the wisdom of all ages and all the help we need both from the folks that survived the cataclysmic End-time and are now inhabiting the New World and from the place you call Beyond, but which we call Home! The World is a different place than it was during "your" days, even if quite a few of you survived the devastation of the final days of horror, and are still there. Others of you that at one time or another had received the gift of Salvation or accepted Jesus in any way, shape or form, did even better than that and are now with us here in the Heavenly City. You couldn't take your gold with you, but you realized soon you did not need it as this place is to some extent made out of gold and that of a superior kind of gold than you were used to! You also realized that the debate about gold versus paper was only a tool that had been allowed to help people choose the truth instead of lies!The World is a much better place now: There is no more war, the physical environment of the South and East has remained mostly intact and untouched by the horrible devastation of the North. The evil monstrous cities has been destroyed and the survivors have been resettled in the countryside where they once again farm the land and have had to learn from them that stayed loyal to the soil. Not only are the cities destroyed, man himself realizing the damage they did, have banned them forever. Most people are producing their own meager and simple needs for food, clothing and shelter, and what they cannot produce they trade and barter with others that can, from each according to his ability and to each according to his need. They that will not work, don't eat either! There is no more welfare or social security for the lazy and the slothful!Since the love of money had become the root of all evil in your past generations, there is no longer any filthy lucre to pollute the economy. People are now exchanging commodities of real value, gold and silver of course included; and: it just had to be done: nobody is any longer allowed to accumulate more than his share. And none are permitted to suffer for lack of it.The cities gone, small towns and villages are the order of the day. They are better than they of the past; beautiful, well-planned and wisely organized; small circular towns with roads radiating out into the surrounding farms and countryside. No more gigantic smoke-belching Earth polluting factories and industries, no more roaring, self-destructive forms of rapid transportation which killed even more than even the evil diseases of your wicked civilization. This took a bit of time to implement; the old being gradually phased out through a mere lack of production of new vehicles and spare parts. Car factories were turned into assembly lines for farm wagons and carts and carriages and buggies.It helps to realize that the age you are now experiencing is but a twinkling of an eye; for thousands of years camel trains and wagon trains were occupying the roads, and sailing ships were gracefully plowing the seas. The fast hell-bent, destructive speed-that-kills of the past has been slowed down to a peaceful pace that your mind and body can better endure and survive and enjoy at a rate that gives you time to think and pray and observe the beauties of God's creation as you pass slowly by, and absorb the clean fresh air of an unpolluted atmosphere that you can breathe deeply and freely with plenty of time, instead of the nervous haste and reckless driving of the past and all its human carnage and vehicular wreckage. The wild world of past civilizations are gone!The Southern part of the World are again learning to shift for themselves, with their powerful, cruel northern neighbors gone. They had been seduced and persuaded into industrializing and borrowing billions that the rich north knew they were never going to be able to repay, but had only served to make them slaves and servants of the Northern lenders who literally owned those countries and told them how to run their affairs. Finally the South refused to pay and this had helped bring on the Great Crash of the North. The North eventually did themselves in through their own wars and the judgments of the Manufacturer culminating in the Great Battle also called (Armageddon). The South is now free, the Pharaohs of the North being gone forever.I am painting a picture of sheer and pure bliss here, but men are men, and all will not behave no matter how perfect the conditions are, so for the sake of the record; there are still rebels even in this almost perfect day and age. But all in all, this is Heaven on Earth; man is now free of disease, sickness, hurts, pain and early death, and if you can believe it; you even walk easier as gravity is lighter than in your day! The atmosphere is healed and there is full protection against the ultra violet rays from the Sun as well as cosmic rays. It may come as a surprise to you that what you called natural disasters were not natural at all; there are no more calamities like torrential rains, storms, hurricanes, volcanoes erupting, earthquakes, floods etc. The climate is perfect and temperate over most of the Earth where the majority of the people live. A lot was changed when the earth's axis had its angle corrected. The former polar regions are no longer frozen, barren wastes, but are temperate zones being populated and farmed! The deserts are long gone and are green and lush and flourishing! The trees are again bearing such abundant fruit that you can get most of your food from the trees, thus almost eliminating the hard work of tilling the land, except for diehard vegetarians! It is the Garden of Eden revisited!Well, dear forum friends; this is what has become of the World that you were so worried about and thought were too far gone! And I don't blame you one bit; I must admit things were looking quite bleak for a while. I too had my doubts and was about to throw in the towel a few times, but it just goes to show never to give up hope and to keep looking for that silver lining of those storm clouds. Tomorrow is wonderful, I can assure you, I am there already! You will not be disappointed, the future is everything you could ever hope for and more! What more can I say, except keep the faith, or get you some! Ha! And yes, since this is a forum for people seeking a certain amount of physical security in holding a bit of gold for a rainy day; yes, gold is God's ordained wealth storage, untamperable, enduring. We here wouldn't use the expression eternal, as that is reserved for the real goodies! Get you some, but just not too much! As it would be sad to end up with a heap when it's time to go and no pocket to put it in! Besides being the perfect money and a royal metal it is meant for a buffer in a tight situation. When my Big Brother, who was once a little weak Child, had to seek refuge abroad, my fellows made sure that his parents had some gold to tide them over till it was safe to return to their home land. In the same manner it can be a help to many of you when the Crash hits. As many of you are becoming aware, there will soon come a period when the Wicked One will demand that no one can buy or sell except they have his mark or his number in their hand or forehead. In that day a few brave souls will ignore his threats and use gold and silver as a means of exchange. In the same manner as the Truth is esteemed of low value and trodden under foot of men, so is gold; the two go hand in hand. But the day will soon come that both are honored and recognized for what their real value is! Signing off, but will continue to work from this side towards a liberation of gold from the stranglehold of the greedy manipulators. However, our hands are tied just now and we can only do so much, the rest is up to you, our work is largely limited to working through yielded human vessels. So get your signals straight and you won't go wrong. Your decisions and actions is what will tip the scales of balance in due time. Spread the Word: The Dollar is doomed, the Crash is here, the Euro will take over and gold is still the yard stick! Show time! This year, the year of change! wolavka (10/10/00; 16:18:26MT - usagold.com msg#: 38708) watch swiss franc watch this currency. lamprey_65 (10/10/00; 15:59:06MT - usagold.com msg#: 38707) Buena Fe Black Gold, indeed!Ugly, Ugly numbers. Of course, we know the reasons --refining capacity limits, shipping capacity limits, less exploration over the past few years because of abnormally low prices (gold is getting there too!), and of course the BIGGEE...demand, demand, demand.Americans are sucking up energy and so are the Chinese. When your people go from bicycles to autos -- now, that's a usage spike! Add in factories springing up like there's no tomorrow to take advantage of China's cheap labor and there's no wonder world demand is skyrocketting.And one more thing...I would not be surprised if the Chinese weren't spending excess dollars to stockpile oil -- just makes sense under the circumstances (Taiwan issue and an overvalued U.S. currency).Snow already here in parts of New Hampshire...could be a long (and pricey) winter. lamprey_65 (10/10/00; 15:40:59MT - usagold.com msg#: 38706) Midas Mulligan "What I want to do is get the Fed to lower rates so the markets rally."Under water, heh? Well, us bugs are used to that! -- join the club. Wishing that Greenie can lower rates to stimulate the markets may just be a waste of time though...lower rates will kill the dollar at this point, and a lower dollar means foreign money pulls out.Kind of a sticky situation, if you ask me...but that's what happens when you allow an equities bubble to form.We've made our bed...you know the rest. Beowulf (10/10/00; 15:27:31MT - usagold.com msg#: 38705) aunugget Thanks aunugget. I had a chance to buy one today and didn't know what it's content was or if it was overpriced. Cassius (10/10/2000; 15:25:18MT - usagold.com msg#: 38704) @Beowulf.........Gold content of an Austrian one ducat This coin is slightly greater in content than the US 1/10 oz Eagle. The one ducat has a fine gold weight of .1109 oz.Cassius aunuggets (10/10/2000; 15:22:51MT - usagold.com msg#: 38703) Beowulf - Austrian 1 Ducat Net gold content is 3.444 grams or .1107 troy ounces. Gross weight is 3.4909 grams, .9866 fine (restrikes).Hope this helps.... TownCrier (10/10/2000; 15:12:18MT - usagold.com msg#: 38702) Following Sir Gresham's Law http://www.usagold.com/anewdefault.html Mr. Gresham, we had a good laugh here in The Tower over your exchange with Sir Aristotle, and decided to oblige.Effective tomorrow, the only active page at the USAGOLD website will be the one linked above. Buena Fe (10/10/2000; 15:11:34MT - usagold.com msg#: 38701) black gold!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! http://www2.marketwatch.com/newscenter/default.asp?topic=3§ion=MWNews&doctype=rt 5:09 pm ET API POSTS 3.926 MILLION-BARREL FALL IN CRUDE-OIL SUPPLIES - BRIDGE NEWS 5:09 pm ET API POSTS 3.31 MILLION-BARREL FALL IN DISTILLATE SUPPLIES - BRIDGE 5:09 pm ET API POSTS 936,000-BARREL FALL IN GASOLINE SUPPLIES - BRIDGE Beowulf (10/10/2000; 15:07:42MT - usagold.com msg#: 38700) Question What is the gold content of an Austrian 1 Ducat Gold Coin?Anybody know?Beowulf Peter Asher (10/10/2000; 14:56:00MT - usagold.com msg#: 38699) (No Subject) Shifty ROFL ! Peter Asher (10/10/2000; 14:54:54MT - usagold.com msg#: 38698) Whoops! Corrections:1) Of bluejeans, not Off2) missing word >>> Back in Decmber of ‘98 I took the unpopular, even on the Forum, position that this allegedly‘New Paradigm' currency was NOT going to challenge the dollar and get gold airborne again. <<< CoBra(too) (10/10/2000; 14:53:00MT - usagold.com msg#: 38697) Mr. Holtzman, Sir ...` ... As I'm still in moving mode, I can't keep as close a track to the forum as I may be wishing. Your latest essay, though kept me glued to really read - instead of skim - and therefor I would like to thank you for a balanced, witty and great post - sincere regards cb2 Midas Mulligan (10/10/2000; 14:50:35MT - usagold.com msg#: 38696) Response to shifty Shifty, i'm dead serious. What I want to do is get the Fed to lower rates so the markets rally. When the markets rally that pushes down the price of gold because it becomes less attractive relative to paper assets. Then I hope to get my fellow statists to buy up all the gold available while its cheap and then hoard it to control it's price and keep you goldbugs from ever making any money off your stashes by selling it when the price rises and stimulating the economy to keep aggregate supply of goods and services high and thus inflation and the price of gold low, and goldbugs like yourself, downtrodden. The key is to keep the wimpy, nerdy, lame, ego-less, capitalists like Gates, Welch, McGuirk, Ellison, Buffet, Perot, etc... etc... under control. It's time all know who the man is, who's boss. spread the word! Peter Asher (10/10/2000; 14:45:52MT - usagold.com msg#: 38695) Ah Holtzman! Great Essay. A Brisk wind from across the Atlantic, blowing away the clouds of confusion and setting forth the issues in brilliant sunlight.Off Bluejeans, Bridges and the Bottoming of the Euro>>>>>>It's also quite possible that, after 20 years of cultural dumbing down, a currency crisis would elevate the trade value of bluejeans more than that of gold.<<<<Bluejeans have been international currency and my own experience of this reminds me of a forgotten tale of survival via Gold and Silver.The year was 1954 and I was fortunate enough to given a partial Wanderjahr at age 20 to peruse the ski-slopes of Switzerland. I became friends with an older man who was a ski shop owner and private instructor. Somewhat intimidated by the wealthy, aristocratic social environment of Davos, I would often spend evenings helping out in the shop, installing bindings etc and listening to tales of the recent past. Martin had been a"Four Event Man" before WWII (Downhill, slalom, cross-country and jumping). He had acquired a mass of trophies in Gold Silver and Bronze (Apparently they were the real thing, not plated, in those days). An alpine village had virtually no commerce during the war, other than the feeding and housing escaped allied prisoners who had to be, per the accords interned until the war was over. Martin lived for 5 years or so by slowly selling off his collection for it's metallic value.Oh yes, the bluejeans. He took some of mine in trade and said whenever you come here pack as many lee's or levi's as you can, labels off and washed once, they will not charge you duty then and the exchange will be a substantial premium over the dollar/franc ratio of your purchase price.He also set me up for a trip to Italy by selling me the then one and only metal skiis, American brand "Head" which were very cheap in Switzerland but Import-taxed highly in Italy. He had an old racing comrade from the thirties who likewise was a shop owner and instructor in Cervina who would then buy them.So, this leads right into your superb rundown of the Euro dilemma. The disparities in value due to duty and currency fluctuation could actually be something that, having been removed by the Euro, dampened some of the enthusiasm for self-serving productivity that seems necessary for Homo-sapiens to operate efficiently at this point of evolution. You have, of course, "nailed it" when you say >>>nor is it practical for an Irishman to abruptly go to work in Frankfurt am Main.<<<Back in Decmber of ‘98 I took the unpopular, even on the Forum, position that this allegedly ‘New Paradigm' currency was going to challenge the dollar and get gold airborne again. >>>>Much has been said about the potential of this "composite" currency to compete with the dollar. However, what quacks like the mark and the franc, also quacks like the lira and the peso. The Euro is, by packaging the Common Market, a currency equaling the dollar in its scope. But, the strength of the major currencies converting into it could be weakened by the historical vagaries of the other components. Therefore, the fact of UNPREDICTABILITY could actually drive assets INTO the dollar, and this could even be negative for Gold.<<<<<What seems to have occurred is that the Euro has made the participating nations somewhat of a ‘Collective', and this is an anathema to the free-enterprise yearnings of man. The combination of this along with the aspect the welfare-state makes the desirability of the Euro as a storage of value a bit shaky. One other aspect of the Dollar- Euro difference could be the underlying, privately held, non- residential real estate quantities of the two systems. If the holders of reserve currency do decide to "Bring them home to roost" I believe our "Spacious skies and amber waves of grain" have a far large inventory quotient than the Continent. All the better to collateralize the float.Lastly the Great Bridge Collapse:Anyone who has trouble conceiving of the ‘Unbelievable' might benefit from accessing an old black-and- white news-reel of the bridge in action. Can you conjure up an image of two kids playing jump-rope with a cut inner tube?The parallel of structural engineering to monetary engineering is intriguing. As I understand it. The bridge designers never factored in the wind effect on the solid bridge railing. When strong, pulsating gusts allowed back and forth movement, a rhythm got going, fed on itself and eventually overcame the underlying support forces and there was total failure. Supposedly, if they had designed an open grid railing, the wind could have passed through and not caused the disaster. I'm sure there is a message here for Mr. Greenspan!One other thing regarding you post: To quote ‘our' Aristotle regarding my HOFer , If and post deserves a nomination into the Hall of Fame, it is this one." Thanks again for the great read --Peter A. wolavka (10/10/2000; 13:00:31MT - usagold.com msg#: 38694) Diversification for gold Physical auStocks auPaper auWheat was a good diversification 13 days ago @ 250 now 275, position limit would have made 5,000,000 converted to any of 1st three and wait.Many commodities are turning up big time , war + only means higher prices.Don't listen to news media, ex. pockets of strength. nickel62 (10/10/2000; 12:42:58MT - usagold.com msg#: 38693) Beesting I beg to differ with your prior post on Wampum! Being origionally from the area around Cape Cod and Narragansett Bay where quahogs are found, I think you have mistaken them for mussel shells that are plentiful in the same area. The wampum was made from the blue interior of the mussel shell I believe and not the grey interior of the local clam variety, quahogs. Mr Gresham (10/10/2000; 12:40:03MT - usagold.com msg#: 38692) Aristotle Well put, Ari. The question really couldn't be put any better. We could just post that on the USAGOLD homepage and end the whole discussion right there, couldn't we, almost? SHIFTY (10/10/2000; 12:38:33MT - usagold.com msg#: 38691) Midas Mulligan Midas Mulligan : I just got in and saw your post. If in your last post you are serious, all I can say to you sir is " Don't let the drawbridge hit you in the ass on the way out!$hifty Aristotle (10/10/2000; 12:28:22MT - usagold.com msg#: 38690) The Golden Question -- to be settled personally by each individual for himself If you can't bring yourself to buy Gold now, while it's obtainable within $15 of its lowest price seen in Twenty-one YEARS, and within an economic climate where the stock market is looking vulnerable and while political tensions are flaring, then WHEN CAN YOU bring yourself to buy Gold????Get you some. ---Aristotle nickel62 (10/10/2000; 12:27:50MT - usagold.com msg#: 38689) Tony Blair's Nanny State doesn't like a free press very much! BBC told to cow tow or else! In a typical bleat from our new masters Tony Blair's government tells BBC to shove off if they think they are going to have any independence in this once great nation. UK clips BBC governors' wingsBy James Harding, Media EditorPublished: October 5 2000 20:40GMT | Last Updated: October 6 2000 16:35GMT The UK government is to strip the governors of the state-owned British Broadcasting Corporation of their regulatory powers after their decision to move the time of the main evening news broadcast in defiance of Chris Smith, the culture secretary. Government officials said the current system, whereby the BBC is regulated by its governors and commercial broadcasters are regulated by the Independent Television Commission, had become "indefensible" following the row over the nightly news. "The governors signed their own death warrant this week," one government official said. The governors decided on Monday to move the BBC news from 9pm to to 10pm in two weeks' time in an effort to pre-empt ITV, which is moving its own broadcast from 11pm back to the previous time of 10pm. Mr Smith had signalled his misgivings about seeing both of the UK's biggest broadcasters screening the news at 10pm, thereby reducing the choice for viewers. Those concerns were ignored by the BBC. When the decision on the evening news was announced earlier this week, Sir Christopher Bland, the BBC chairman, dismissed Mr Smith as just another "licence fee-payer . . . entitled to his point of view". The BBC is financed by a annual licence fee of £104 ($152) on all owners of television sets. However, the decision - and the comments by Sir Christopher - came just as the government is finalising the communications white paper, its plans for the future of media regulation. The government has now decided that the BBC can no longer justify being regulated by its own governors. They are likely to remain, but will operate more like a company's board of directors. Their responsibilities will be reduced to oversee internal performance, to make top appointments and ensure that the Corporation fulfills its remit. External regulation will be handled by a separate authority responsible for the entire broadcasting industry. Ministers have yet to decide on the final regulatory structure. One critical choice is whether to introduce a single regulator covering both communications systems and media content, or to separate responsibility for carriage and content regulation into two authorities. Another Whitehall official said Sir Christopher's comments had been "arrogant", but did not influence the government's thinking. Instead, the official noted that the ITC had been lobbying for the return of News at Ten for more than a year on the grounds that it was in the best interests of viewers. The governors had then moved the BBC's news to 10pm on the same grounds. The result of this "indefensible duplication" was that viewers had ended up with less choice, he said. Midas Mulligan (10/10/2000; 12:13:56MT - usagold.com msg#: 38688) Gold is for losers only It's time to buy stocks and bonds again now that the annual early fall correction is over and the annual late fall and winter rally is set to begin. After the election ends the Fed will lower rates to give the economy a needed boost and this will revive the bull market and depress the price of gold further driving you goldbugs into submission to the will of the collective and it's rule by mediocrity. After 20 years of decline in the price of gold it's finally time for you goldbugs, and all you wimpy, nerdy, pathetically lame capitalists like Gates, Buffet, Welch, Perot, etc..etc. ad nauseum learn who's boss. Holtzman (10/10/2000; 12:02:06MT - usagold.com msg#: 38687) Civil Engineering http://www.civeng.carleton.ca/Exhibits/Tacoma_Narrows/DSmith/photos.html Holtzman here,To Al Fulchino regarding (09/29/00; 17:20:01MT - usagold.com msg#: 37884), yes I'm still out here. I've been having problems with my link to the internet. Hopefully this will make it through...--------------If I can't afford it, I'll deny you it--------------Black Blade wrote in (9/13/2000; 0:17:33MT - usagold.com msg#: 36574), "Ps. Hey Brits! You're doing it all wrong. You don't block the refineries, you go on down to the shipyards and dump tea in the harbor. Trust me, we did this once before and look what happened. Why hell, it worked for us in the colonies. Cheers ;-)" Well, you chaps do call the stuff Texas Tea, don't you?Oh, what an unmitigated mess this has been. I recall some years back watching on the telly when a section of Los Angeles turned into a war zone. What struck me as particularly counterproductive was that the rioters were destroying their own surroundings. Romans, Goths, Vikings and Conquistadors all had the sense to visit someone else's neighbourhood before going berserk, but not those lads in L.A. Of course, the French have had a rowdy element ever since the Revolution, though to-day they have for the most part foregone beheadings for the eminently more intellectual pursuit of covering the roadways with rotting crops.And in past weeks the nonsense finally found its way to centre. What in the world did those short-sighted fools think they'd accomplish by preventing extant supplies of petrol from reaching customers? Of course it's more expensive to-day than it had been two years ago. Two years ago, petrol was as cheap as it had been in decades. Why it had gotten so cheap is something of a mystery, given that many present-day motorists will still be around when the last OPEC well runs dry. It's an insult to intelligence that these hooligans were complaining about prices which, in reality, are only returning to nearer their norms of a decade ago. What they've yet to get through their heads is that the price will unavoidably go higher yet as the next decade progresses.That price rise may be temporarily masked by a concurrent reduction in duties and other surcharges, but in time the raw price from any irrecoverably depleting commodity must rise to the sky. The price of broad plank old growth mahogany is drastically higher than that of dimensional pine, simply because no-one was husbanding the good forests for future generations. Likewise, fifty years hence when the Amazon basin is a dust bowl, our children will wish someone had had the foresight to restrain the clear cutters. Of course, the one positive outcome from the ultimate depletion of petrochemicals will be that our planet's atmosphere will finally be given a chance to recover. Unless of course we replace our petrol addiction with something even more noxious.And as far as emergency measures go, I'm pleased that the government's words and deeds turned more towards clearing off the obstacle-makers rather than towards caving in to their demands. At some point long after order is restored, it might be prudent to begin lowering the duty per litre, but not in such a way as to legitimise mob rule. --------------Where are we bound?--------------As a microcosm of the world economy, the EU economy (Euroland plus those of us not yet part of EMU) is likely to remain a patchwork of successes and failures. The core Euroland countries (Germany, France, Italy) appear to be benefiting from EMU, as are their satellites such as BeNeLux. Ireland, by contrast, is growing at a much faster rate than the core but is hamstrung by its participation in the euro and so is unable to take the steps necessary to prevent its local economy being savaged.The equally booming UK economy remains healthy at present due largely to its not yet having adopted the euro. On this issue, I find I'm torn between the desire for the UK to join Euroland in all haste so as to relieve our neighbours, versus holding back until we can incur the least possible damage to ourselves.Each of us face the same challenge every time we approach an escalator. Prior to stepping onto it, we're in balance. Once well aboard, we're in balance. But the transition from the one to the other is often quite unbalancing. What Parliament, BoE, LBMA, and every other acronym in The City are attempting is to make the UK's passage from monetary sovereignty into monetary union as non-jarring as possible, the effect of which is of a man hesitating at the threshold to the escalator trying to time his jump onto it.To extend the metaphor, what we in the UK have done to Ireland is that we have held her hand whilst she stepped onto the escalator, only to carry on holding though we have not followed her.But as viewed within Euroland, there is the expressed belief that the strong countries (France, Germany, Italy) will remain securely strapped into the euro's driver seat whilst the smaller members will be tossed about untethered in the back. Certainly to look at Ireland's recent history, that would seem to be the case.However, this is also the case within the United States. The dollar is tuned to maintain New York, Washington DC and, on occasion, California. As recently demonstrated with Chicago's higher petrol prices, the second-tier states tend to get tossed about somewhat more violently than the first-tier. And those states at the bottom of the heap (Mississippi, West Virginia, etc.) have little alternative but to export citizens to happier climes.The ugly truth of EMU is that some nations which willing adopted the euro were, whether they realised or not, committing themselves to becoming Europe's West Virginia. Again, this is the core reason why the UK held out. We want to be the EU's equivalent of New York. Nothing less will do. It is perhaps not as neighbourly a deed as might ideally be hoped for, but it remains Parliament's responsibility to do what best serves UK citizens, not necessarily what best endears us to the Continent.Because the states of the United States have been reduced to administrative subdivisions, and because most Statesiders speak the same language, there's only been one occasion in two hundred years when the disparities between the various states resulted in disunion. Instead, disparity is dealt with by migration. Upon realising that Arkansas is poorer than Kansas, disgruntled Arkansans pack up their belongings and become Kansans.By contrast, the situation in the EU is not at all that of a federal government able to dictate to its subdivisions, nor is it practical for an Irishman to abruptly go to work in Frankfurt am Main. Economic pressures which can be beneficially diverted by the U.S.'s structure are perfectly able to blow the EMU structure apart. We came uncomfortably close to witnessing that recently when (finally) intervention was undertaken to alleviate the stress.But that was only a temporary fix, and it merely forestalls, rather than avoids, the problem. I think it increasingly possible that, in the absence of true repairs, we may see abandonment of the euro by those Euroland nations presently being injured. The odds that this may come to pass were materially improved by Denmark's no vote on EMU last week. In effect, 53% of Danes were saying they had no desire to follow in Ireland's footsteps. Conversely, many Irish have since begun to wonder if it isn't still possible to repent and depart the euro system.There is every reason to believe that Germany, France and Italy will remain united under the euro, but unless dramatic improvement is made very soon, that industrial core may soon be all that's left of EMU 1999. Under that scenario, I think the UK and many of the nations which depart Euroland would patiently wait at the sidelines to again attempt monetary union under more favourable conditions.Of course, it's always possible the present union may be held together, either through financial remedies or through political will. In any event, it's clearly a very fluid situation. And that's all the more reason for those of us in and near Euroland to remain diversified in forms of wealth other than those of our various fiat currencies.--------------There's no place like dome--------------Someone here recently posted that, "Blowing up Israel and the Jews will, according to the Koran, assure him [Saddam] a place in paradise..."Actually, blowing up Jerusalem would be almost as offensive to Allah as would be blowing up Medina or Mecca. Jews are People of the Book. They share common heritage with Islam, only they haven't yet had the wisdom to accept the final chapters of the Book. Likewise, Christians are People of the Book, even though they've accepted a different set of final chapters. A good Muslim regards Jews and Christians as confused but well-intentioned children who yet possess the ability to someday see clearly. A good Muslim bears them no ill will, either in thought or in deed. The act of raining down fire upon the city of Moses would be that of a madman, not a Muslim.And while we're on the subject of religious tolerance, I should remind you that, in Muslim-governed Spain, Jews and Christians were respected as good citizens and trusted neighbours. The Christian barbarians like El Cid who laid waste to civilized Spain tolerated the remaining Jews just long enough to get them to translate back into Latin all of the Greco-Roman history and science which Christian Europe had forgotten. Then, as an odd way of expressing their gratitude, those same Christian invaders trod the Jews underfoot as enemies of the faith.Having said that, I do find myself wishing that the survivers of Hitler would refrain from taking similar actions against the people they forcibly displaced half a century ago. Will we never learn?--------------Bridge Over Troubled Water--------------When I see futures enthusiasts and various of the physical faithful going at one another over price discovery, the image that comes to mind is of two civil engineers arguing over a bridge. The futurist is saying that the bridge has to date served well in its intended function and that, all else being equal, it ought to carry on serving well for many generations to come. The physicals are saying that the name of the bridge might be Tacoma Narrows, and that bridge builders and bridge users alike should never forget that Nature enjoys surprising the complacent. http://www.civeng.carleton.ca/Exhibits/Tacoma_Narrows/DSmith/photos.htmlMy old reference to the paper money issued during the U.S. Civil War remains applicable here. Union greenbacks were, for all practical purposes, futures contracts. They were promises that the U.S. government would exchange them at face value for metal coin at some stage following cessation of hostilities. During the early years of the war when consumer confidence remained high, the price of any item was the same in paper dollars as in physical (coin) dollars. But as the war ground on towards what seemed the end of civilisation, consumer confidence eroded and paper began to diverge from physical.One day, a merchant might sell an item at five dollars in coin but require six dollars if paid in paper. The next day, that same merchant might require a seventh paper dollar because he'd just heard word from the front that things weren't going well. The day afterward, good news from the front might bring his prices back to parity.goldhunter makes a very valid point that the chart lines of Spot gold and the various Future golds closely mirror one another, and that the price differences between them are a consistently applied discount against the future value of money. This is an accurate description of a very well-architected bridge under normal conditions.Aristotle and Asher by contrast make an equally valid point that it's the assumptions you do not realise you're making which lead you into the worst trouble. Just because the bridge is beautiful, state of the art, well watched and has served without incident for a century does not mean it cannot begin to collapse this afternoon.The palladium market over the past year has very closely resembled the greenbacks/coin relationship I described above. The price of a one-ounce coin of physical palladium from day to day jumps around in only loose proportion to either the official spot or various future prices of market-traded palladium. History is replete with instances of the value of promises becoming suddenly and drastically different from the value of delivered goods. These instances are seldom long-lived but, like mere wind, they can destroy in moments what it took whole lifetimes to build.Most of us here is not at all that the official Spot POG may someday diverge radically from the near-term futures POGs. What motivates the hoarder of Krugerrands or Sovereigns is that there may again come a day when having a 210% profit in a contract somewhere in New York will be irrelevant compared to the value of having coin in hand on the ground right then. It's the difference between speculating on the future stock value of a pharmaceuticals company versus purchasing a first aid kit. Both are valid pursuits, but neither is a substitute for the other.Some drivers began noticing the Tacoma Narrows oscillations weeks before steel supports began snapping. These early adopters of caution equate to those of us here who acquire physical PMs and avoid futures markets. Some of us here not only avoid the bridge but attempt to warn others of the risk. They do this even though, here now in the early stages, some may occasionally mistake them for Chicken Little (the sky is falling). From their point of view, the desire to guide innocent people out of harm's way far outweighs any risk of embarrassment they might incur.At the opposing extreme, of course, are those drivers who enjoy the exhilaration of riding a roller coaster and yet remain confident they'll be able to dismount before the bottom drops out.WILL the bottom drop out? Of course. With the exception of the pyramids, nothing manmade has ever remained in place forever. The value of gold in hand has, on countless occasions throughout the centuries, gone from commonplace to unbelievably scarce in all-too-brief a time, and then rather quickly right back down to commonplace again.Even with the vast overhang of central bank gold looming above us, it would take months to mobilise London Good Delivery bars into new Sovereigns to fill frightened citizens' hands. A lot can happen in a month's time. The wagontrain to the stars in 1979-1980 caught everyone by surprise, except for the wise who bet that governments could not move quickly. Mind you, those same wise also moved back out of gold in 1980 because they bet that, once governments did get going, they then could not stop quickly.Precisely the same thing is currently happening in the palladium market. Russian ineptitude cannot quickly be worked around, but it makes it all the more certain that, come 2005 or so, palladium will be no more expensive than aluminium because by then everyone will have retooled away from it.WHEN will the bottom drop out on the gold vs. fiat struggle? It could start tomorrow, but it's just as possible that fiat might stay intact until 2800 AD. It's also quite possible that, after 20 years of cultural dumbing down, a currency crisis would elevate the trade value of bluejeans more than that of gold. There's simply no way to know until it happens.That's why I've been acquiring some physical gold in recent years: because the last time gold was this inexpensive by contrast with other forms of wealth was around 1919.But I also own paper monies and I own stocks (both mining and otherwise). If the pound/gold ratio goes from 190:1 to 20000:1, I for one fully expect to begin selling my Sovereigns in hand to the highest bidder, and to be completely sold out before the top falls back into the market. For the present, however, and until such a catastrophic shock might occur, my paper forms of wealth steadily generate enough additional paper to allow me to pay my bills.You will note that I do not regard any of my holdings as gambles, but rather as a judicious allocation of my possessions to places where, at any given moment, their sum total is not at great risk. It is, as you can see, quite the reverse of gambling.Indeed, I regard the futures markets as little different from a casino and so I avoid them utterly. Were I a miner or a jeweller, I would use those markets to hedge my future activities, but as a third party I have no desire to pursue "unlimited upward potential" at the risk of unlimited downward potential. That's not to say that such gambles have no place in any person's portfolio. Clearly they do provide a value to certain people, else they would be so rare as to not be a topic for discussion. I simply prefer a less disquieting set of holdings. Ask not for whom the bridge tolls.Yours,I.V. Holtzman beesting (10/10/2000; 11:21:47MT - usagold.com msg#: 38686) Wampum and Gold. Hi Sir Taurus,I have to make a remark about this part of your message #38646.Part of Your Post:<<The primitive money we discussed was always the wampum of the American Indian. "Wampum was fascinating. Beads made of clam shell. Little cylinders an eighth of an inch in diameter and a quarter inch long with a tiny hole drilled down the center. How do you DO that? And how could ANYONE be persuaded to trade an item of real value (food or a canoe or a prized bow) for pieces of clam shell? Of what earthly use was it? And if it had no USE,how could it POSSIBLY have been regarded as an item of value?>>My Comment:I think the author fails to take into account the time and labor involved in digging the clam shells,drilling tiny holes in them and stringing them.So we could say the value was a measure of time involved to create the finished product, not so much unlike the finished peices of Gold we gleefully fondle now-a-days.So it would seem the clam shells(Really called quahaugs,right Leigh?) were a STORE of wealth to not only use for barter but also use for payment of services rendered. How else could someone pay for, say a haircut, in those days?Looks like a small upward spike in Gold at this hour!Thanks for reading.....beesting. Mr Gresham (10/10/2000; 11:07:21MT - usagold.com msg#: 38685) Peter http://quote.yahoo.com/q?s=^VIX&d=3m This is the one I like to watch. Of course, I haven't placed any "paper" bets on market crash this time. Tsk tsk. Black Blade (10/10/2000; 10:54:32MT - usagold.com msg#: 38684) Replies Aristotle #38660: You proposed the following: Like a balloon in a swimming pool, the powers that be keep releasing pressure on the balloon (by selling supplies of paper Gold instruments into the demand as they deem necessary) to keep or sink it to further depths. Only when those constraining powers are revealed to leave the physical market and demand for Gold metal unsatiated will the price of metal rocket violently upward as the paper-influenced means of price discovery is abandoned. The metal is the key to the future.Black Blade (reply): Sure , why not, when you consider the transparent BOE auctions, BB gold leasing, and some of the monkey business in the gold market from the producer end, aren't these efforts designed for the sole purpose of capping the POG? Once they pull the plug either by ending the BOE auctions (or even the non-transparent Swiss sales through the BIS), tightening back on the amount of gold available for lease (a second WA agreement?), or the major hedgers (like Barrick or AngloGold) suddenly deliver into the leases rather than roll them over. The market would be sure to notice and the true supply deficit in relation to demand becomes obvious. Any of those possibilities could result in a rapid rise in the POG. Imagine how explosive a rise in the POG would be if all these possibilities occurred simultaneously. Obviously this could go on for a long time. BTW, I heard that an official investigation into the BOE auctions was very critical of the process. I'm not sure who was doing the investigation or if there is any recourse that could be taken as a result. I haven't heard anything more on that for a week or so.Netking #38663: I remember that the sinking of the ship occurred in port and took the life of a crew member. The "Rainbow Warrior" and her crew were in involved in disrupting some French nuclear weapons tests. The French frogmen (no pun intended) were apparently French military special forces types. Christopher #38664: I think that FOA/TG may be right about the paper trade markets in light of the recent palladium default on the TOCOM and margin requirement changes on the NYMEX. The current production of physical gold supply is in deficit to physical demand. This is satisfied by gold leases (sales) and some BB/CB sales (most of BB/CB sales are from one bankers account to another).When gold prices had shot upward in price at the WA announcement, many brokers/clients were told that they has to settle at market. There was a squeeze on and delivery or settlement at the "listed" price was not going to happen. As the POG declined, some contracts were settled at the lower price. If the paper price declines as you suggest, I would think that paper and physical would diverge into two markets with two different pricing schemes. No company can survive for long selling below the cost of production. I'm not sure if that was what you were alluding to, but that's my take on it. Peter Asher (10/10/2000; 10:52:08MT - usagold.com msg#: 38683) Is something up? We have Gold spiking up $3.00 and the Market in a sudden drop.News?? MarkeTalk (10/10/2000; 10:44:38MT - usagold.com msg#: 38682) NASDAQ approaching critical support The bear market in the Nasdaq continues its relentless decline. The Nasdaq is now trading below 3300 and is approaching critical levels around 3200. Today's "bear market delight" is Cisco Systems--the darling of darlings. Even though the stock is only down 2 points to around 53, the volume is a monstrous 46 million shares so far and it is still early in the trading day. This stock trades on average only 46 million shares each day. Hmm. I wonder which mutual fund is dumping this morning? The chart looks bearish as the price action has rolled over to the downside and now we see the pattern of lower highs and lower lows. There is some support around 50 and then blue sky below. All I can say is "Anchors away" for this stock!Gold and silver have popped up this morning, as the petroleum complex got a jolt from tensions in the Middle East. Crude oil is up $1.00, heating oil up almost 3 cents, and unleaded gasoline up about 2 cents. I watched as much as possible yesterday about the developing situation in Israel. The best program by far was Nightline with Ted Koppel. Tonight's program promises to be even better when he hosts a town hall meeting from Jerusalem with both Israelis and Palestinians who will take part. Peter Asher (10/10/2000; 10:41:42MT - usagold.com msg#: 38681) Cisco ESOPs The article doesn't specify if "Exercising" those options was calling in the stock and becoming shareholders, or simultaneously selling the shares for the profit.If the shares are sold, the tax on the difference between the vested price and the sale is paid by the employee/momentary shareholder out of the funds that came from the subsequent share purchaser. If the company had sold the shares directly, the company would have paid the tax out of those same funds that came from the subsequent share holder. The tax has not been avoided as such, either way it gets paid from the same source. The company is in fact worse off then if it had not issued the options but had instead sold those newly created shares themselves and acquired the after tax profit.So we have here another example of a Reporter telling a partial truth in order to rabble-rouse the citizens into righteous indignation over a nonexistent wrong. The company who issued the options now has a larger number of shares outstanding but it's ‘Value' at that moment is no different. Ergo the tax which WAS paid results in diluted share value to that company.HOWEVER! If the options are exercised only on the buy side and the employee holds the stock, then we have an interesting phenomena possible. If the price of the shares falls to the level of the exercise price and the shares are still held by the employee, then no tax was paid on the temporary paper profit BUT the company still had the tax write off on it.Bottom line; Company shareholders score one, Government, zero! Perplexed (10/10/2000; 10:11:01MT - usagold.com msg#: 38680) Congrats Cavan Man A very heart felt congratulations to one of the best forum members of the best forum on the web. Thanks again to Micheal, the crew and staff, for not only providing a meeting place of the mind,-- thus allowing those of us of the not so brilliant,(especially me) to rub shoulders with, and learn from the truly brilliant--- but an opportunity to really reflect upon, and articulate our reasons, purposes, and goals. Perhaps we have not solved the worlds problems but many of them have certainly been laid bare. To even be considered a contender is quite an honor. CONGRATS AGAINCAVAN MAN.Thanks Centennial, may you have many more posperious years.Less Perplexed wolavka (10/10/00; 09:21:47MT - usagold.com msg#: 38679) 300 let's go The Invisible Hand (10/10/00; 09:19:30MT - usagold.com msg#: 38678) test test wolavka (10/10/00; 09:14:32MT - usagold.com msg#: 38677) BUY buy more Chrusos (10/10/00; 09:13:33MT - usagold.com msg#: 38676) Giant Cisco Didn't Pay Any Federal Income Tax http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2000/10/09/MN3707.DTL&type=tech_article Article in San Francisco Chronicle about evryones favorite new economy company.SAN JOSE -- Cisco Systems, the second-most valuable company in America, paid no federal income taxes for its latest fiscal year thanks to a little-known corporate tax break on employee stock options. Microsoft, which ranks No. 4 in market value, did not pay any federal taxes either, it seems. Like many high-tech firms, Cisco and Microsoft are allowed to take a tax deduction for money their employees earn when they ``exercise'' options and buy stock in the company at a preset price.These options have become an increasingly popular way for businesses to reward employees, but they also have huge benefits to the companies themselves. The tax break was established decades ago, when companies doled out stock options to only a handful of top executives and the tax benefit they generated was minimal. But now that many companies -- including Cisco, Microsoft and most other new-economy firms -- give options to everyone, the tax break is becoming enormous. In Cisco's case, this benefit wiped out $1.8 billion in federal taxes, and probably more than twice that for Microsoft. Some people, even those who oppose taxes, think it is unfair that wealthy companies paid none to Uncle Sam. For the fiscal year ended July 31, Cisco had $23 billion in sales last year, $2.7 billion in net income, and its almost $400 billion market value is exceeded only by General Electric's. ``For a company that makes that kind of money not to pay taxes raises serious tax-equity questions,'' said Jon Coupal, president of the Howard Jarvis Taxpayers Association. He also said he believes it is ``hypocritical'' for Cisco to take this ``massive tax break'' and at the same time support Proposition 39, which would make it easier to raise property taxes on California homeowners. Prop 39 would allow local school bonds to be approved by a vote of 55 percent instead of the current two-thirds. ENTITLED TO DEDUCTION Cisco is entitled to a deduction for stock option income because ``in reality, that's compensation,'' and tax law has always treated employee compensation as a deductible expense, said Dennis Powell, Cisco's corporate controller. When an employee exercises an option to buy stock, the difference between the strike price (what the employee pays) and the market price (which is almost always higher) becomes taxable income for the employee and a tax deduction for the employer. Most Americans do not realize how enormous this tax break has become, because companies do not deduct employee stock options from the earnings they report to shareholders and the public. In fact, American companies fought long and hard to prevent employee stock options from showing up as an expense on their income statements, although they are happy to consider them as an expense for income tax purposes. Cisco's and Microsoft's annual reports make it appear as if they had paid billions of dollars in income taxes. Cisco's income statement for fiscal 2000, which was published about a week ago, shows net income before taxes of $4.34 billion, and a provision for income taxes of $1.67 billion. That number includes federal, state, foreign and deferred taxes. The firm's actual federal tax liability, buried deep in the report, was $1.8 billion. But in reality, the San Jose maker of computer networking gear paid no federal income taxes for fiscal 2000. That is because its employees earned more than $7 billion exercising stock options in fiscal 2000. That $7-plus billion deduction generated a $2.5 billion tax benefit for Cisco, which wiped out its entire federal tax liability. The benefit shows up on Cisco's cash flow statement. STOCK OPTIONS EXERCISED Cisco employees exercised ``an unusually large number'' of stock options during fiscal 2000, mainly because the company's stock price more than doubled, said Cisco's Powell. By comparison, Cisco's tax benefit from employee stock options was only $837 million in 1999 and $422 million in 1998. Unlike Cisco, which acknowledges that it paid no federal income taxes, a Microsoft spokeswoman would not say whether that firm did or not. But its annual report for fiscal 2000, which ended June 30, shows stock option income tax benefits of $5.5 billion, exceeding its $4.85 billion provision for income taxes. (Its actual federal and state tax liability for 2000 was $4.74 billion.) ``I'd say their federal income tax was next to nothing or probably nothing,'' said Robert Willens, a tax and accounting analyst with Lehman Brothers in New York. 714 (10/10/2000; 7:10:12MT - usagold.com msg#: 38675) re: Aramco documents http://go-here.to/secret_history Excerpts from "Secret History of the Oil Companies in the Middle East". Christopher (10/10/2000; 7:07:04MT - usagold.com msg#: 38674) Black blade, and a question BB,That was a wonderful story, I am still wiping my eyes over it. Thank you sir.Keeping in line with TG's posting Saturday where he speaks about the paper price of gold decending to near zero, I have a question. Is the common thread of thinking here that the paper price will actually reach zero before the game is up? Surely the game will end before it does. I imagine that the paper market will lock up ala Paladium style before the paper price gets too much lower. Is the cabal stupid enough to allow people to purchase gold for $50.00 an OZ (Secretly, I do hope so. That would be Christmas come early for me.) I have a feeling that the price couldn't get much lower than, say around $200.00/oz before the system threw the final bearing. I wonder how our good host M.K. would be able to survive an extended stay below $200.00/oz. How low can it go before it stops?Christopher wolavka (10/10/2000; 6:22:42MT - usagold.com msg#: 38673) okay I waited all nite, and now , and now??????? Aristotle (10/10/2000; 5:15:36MT - usagold.com msg#: 38672) THE Aristotle on money--a promised follow up to Taurus and Peter Asher Some of the comments I'll offer are essentially a reworking of those that I offered during a Thursday post on another comment of Aristotle's as used in a wider body of nonsense by author Stephen Zarlenga who tried to build this sad case--"History shows money is an abstract institution of society and government. As far back as 340 BC Aristotle wrote: 'Money exists not by nature but by law.' He's saying true money is a fiat (decree) of the law."In response, I said "We need not accept something just because Aristotle says it must be so. <big smile>" and then went on to suggest that Zarlenga's interpretation of Aristotle's comment might actually be suitable for what we all know as modern paper CURRENCY units, but it is distinctly not appropriate for MONEY in Full (unit of account, medium of exchange, store of wealth).Moving on to Taurus's post, this other author gives a better and broader glimpse into Aristotle's good grasp on the characteristics of "Money in full." He recounts--"According to Aristotle, the properties of good money are these:(1) It should be durable… Nothing surpasses gold in this respect…(2) It needs to be divisible. Gold, of course…(3) It needs to be portable… As a physical asset, probably only diamonds offer a more concentrated form of wealth [than gold].(4) It needs to be consistent. Grain can very in moisture content (and be heavy or light as a result). Gem stones have a wide range of flaws, colors, and sizes. Gold in its pure state is very uniform by comparison. But when you allow it, dilute it, adulterate it, and pass it off as pure, gold stumbles a bit.(5) It needs to have intrinsic value."Unfortunately, it is here that the author promptly falls flat on his face when he departs from the Great Thinker, speaking his own mind as thus regarding item #5 (intrinsic value), saying--"And here, I believe, Aristotle was mistaken. On the contrary, it needs to have ZERO intrinsic value; ZERO utilitarian, commodity value. The more value a commodity has as a commodity, the LESS value it has as money because its supply can be disrupted by outside events. Until the era of modern-day electronics, gold was admirable in this respect. You couldn't eat it, wear it, or burn it as fuel. It had no practical, day-to-day value."Let's back up in time and build on basics to take this step-by-step to show where the author went horribly wrong.To my mind, there is no disputing that the desirability of an item (any item) is found in it's usage value. If it is useless, it has no value. If we can agree that is self-evident, then it should not be difficult to follow how it is that a true monetary usage of a particular commodity item can naturally develop over time based on its uniquely convenient combination of qualities that include widespread desirability and ease of both divisibility and transfer--very much as we see expressed by THE Aristotle and listed above. Once this commodity has been sufficiently elevated to a primary monetary usage through natural marketplace selection based on its convenience and universal acceptibility, this currency usage adds further to its original desirability, entrenching its usage value as money at a level that exceeds its usage value for anything else.It is at THIS point that many economists and philosophers become easily confused regarding the true nature and value of Money, believing that such monetary usage of the commodity is somehow artificial whereas any other type of usage for the commodity is not. Sheeeeeesh. Gimme a break. They fail to grasp how this unique suitablity and use of a particular commodity to perform a full monetary role naturally endows it with a high desirability and usage value that is disconnected from its obviously lower usage value as perceived when viewed (with blinders on) only in serving functions as a non-monetary raw material.Gold. Get you some. ---Aristotle SteveH (10/10/2000; 5:07:00MT - usagold.com msg#: 38671) RossL At a minimum, the standard deviation and the average grams per gold would be most helpful. I would do it but don't have the raw data. Knowing the standard deviation will support my theory that we are in the 2nd deviation now and approaching three. It would be just nice to see where that lies. Just from looking at the chart, it appears that the mean grams v oil is around 1.75 per bbl. That is eyeballing it. Zenidea (10/10/2000; 4:55:03MT - usagold.com msg#: 38670) squatter huh ? I never did a test 38666 ? message pal and you have the number because i reapeatedly tryed to send out is it ?. I dont give a rats arse-umption the people here know me by my speech that has at least 20 phyciatric reports to back that up ....... match that pal :). and welcome if ya prepared to argue in an honorable and orderly fashion a relevant point .Friends are a plenty here :). ZZZZZZZZZZZZZZZ wolavka (10/10/2000; 4:53:35MT - usagold.com msg#: 38669) No interest overnite sideways, need a pop over 275 to start the ball rollin. 279 282 next.Still like wheatnot investment advice. RossL (10/10/2000; 4:42:27MT - usagold.com msg#: 38668) SteveH I'm not sure the statistical evaluations would be worth doing on the annual data. It would be interesting to see on a monthly or weekly data set from 1970 to the current time. Zenidea (10/10/2000; 4:36:46MT - usagold.com msg#: 38667) Waffle :) The industrial commodities; Rodium, palladium, Platinum and silver get yeah a hellover sight more :). Easy pickings on the beaches in wonderful Japan :) esp the Platinum rings but yeah we all know ... ! doing this hoo huh its not the Pt-Au we are always after its the rocks in them :). but its not the money or the love of money is it ?. its beauty ! for beauty sake in the end . All ficticious money really is as about as useless as balls on a priest . Black Blade keep up the middle east yarns mate I , look forward to em every evening :).... thanks all :). ZZZZZZZZZZZZZZZZZ Zenidea (10/10/2000; 4:27:52MT - usagold.com msg#: 38666) test test Oilman (10/10/2000; 4:20:20MT - usagold.com msg#: 38665) justamereBear 38491 The starting year for the HIV/Aids pandemic is an interesting point. The issue can be addressed by plotting a log-normal distribution, with time on the horizontal, and the level of infection on the normal. The distribution should plot as a stright line, curving over at the top end of the scale. If we assume that the global population was say +-3.5 billion in 1972, then we should achieve an infection level of one in 3.5 billion. I am not sure whether my previous correspondence on crude oil was published. I was working fairly late at night here, and the message might have gone missing. In short, there is a case from a fundamental point of view for determing the price of crude oil, based on the concept of economic return. If the economic rent is too low, no invests in crude oil production, and vice-versa. Typically, for a West African oil play (the current marginal oil play?), the economics pan out at a cash operating cost of $3/bbl, Exploration cost of $3/bbl and Capital reward of $3/bbl, giving an all in cost of $9/bbl. You can check these calculations by examining the financial statements of EnergyAfrica.com. The fundamental analysis is complicated by the costs of Production Sharing Agreements (PSA) or the corporation tax levied. My estimate is that to offset risk as well, crude oil prices need to be above $14/bbl, to make oil exploration and production attractive in the West African environment.Another way to approach the issue of fair and reasonable crude oil prices, is from the question of alternatives. One potential alternative is synthetic fuel. Sasol (www.Sasol.com) does give useful information in this regard. Assuming a fully economic project, based on inexpensive remote natural gas, the cost of white oil produced is approximately $25/bbl, or between approximately $18 to $20 crude oil equivalent. One can than equate this fundamentally-derived crude oil price to a gold price of $306 to $340 per oz, depending on the gold/oil multiplier and the validity of the approach.However, if crude oil output is peaking or close to peaking, as indicated by the Hubbert curve, and the crude oil market is tight, then a fundamental approach probably has limited utility in the short- to medium-term. Hope it helps! Zenidea (10/10/2000; 4:14:39MT - usagold.com msg#: 38664) 993A592DD1 smiles Keep an eye on copper !. There testing the Litmus on the Aussie $ again , sad to say but wooo hoo ! Kiwi $ getting hammered again .I ask why in Gods precious name are self sufficient countries ,reactor suffice , oil, gold , vanadium, iridium, diamond high tech/knowledge etc , energy giving countries feeling the pinch , and not the predator economies. i.e no material wealth ?.Is it stupid politicians or implicated politicians or clever ones ?.Leigh good to see you back again ,I am going back to HK looking for that needle in a haystack that the Japanese were supposed to have left , I went before but got nothing around Feb/March ( crazy huh ) hehe I have a litle story to tell you I used to go to the beaches in the early morning and afternoon and never more doing 4 hours in a stint you know so there are not so many people around but one day I went to Seko beach and it was crammed packed and I found as I dont miss anying of worth under 5$ or 10$ HK by ear ignoring the dross ( wrong pitch) that people were throwing money behind me , obviously I am turning around and picking up the booty , but as fast as I could bend over and pick it up it was there for the taking. Imagine that people trying to throw money in the sand in the one spot to keep me by them. The beautiful HK people were so curious in this device . hehe imagine that .... as fast as I can bend over and pick up money I did . Only the body stops me in the end :), after all I am now 40 :). Professional begging I humourously call it . hehe . Its so reassuring to be able to live freely around the world and do that which one Loves at the same time . Infinite Bliss !. Gold , get yeah some :). Netking (10/10/2000; 3:28:55MT - usagold.com msg#: 38663) Black Blade & Wolavaka Mr Black Blade (38634) - Re: Fish story. You are correct Sir, it was the 'Rainbow Warrior' that the French secret service sank in Auckland NZ. Incidently (some educational trivia) with the loss of one life of a sleeping crew member while tied at dock. The culprit's (well 2 of at least 3) were caught after a massive manhunt (without equal) but then only served a partial prison term before political intervention caused an early release. The two concerned were later given commendations back in France.Mr Wolavaka - I don't think the M/East will burn just yet buddy, a good chance to go short though very soon in a selected markets. Netking (10/10/2000; 3:08:02MT - usagold.com msg#: 38662) Rumours of wars... "...and ye shall hear of Wars and rumours of wars: see that ye be not troubled: for all these things must come to pass, but the end is not yet" (Matthew 24:6) Aristotle (10/10/2000; 1:11:56MT - usagold.com msg#: 38661) Public Service Announcement http://www.usagold.com/cpmforum/archives/7200010/default.html To all the weekday visitors who might typically skip the weekends, you definately missed a fine day of info on Saturday, including some good commentary by Trail Guide in the evening. Check it out.Taurus and Peter Asher, I'll take a look into money issues that I see you've been discussing. Give me a moment.Gold. Find you some on Saturday. ---Aristotle Aristotle (10/10/2000; 0:51:18MT - usagold.com msg#: 38660) Hi Black Blade. I sure enjoyed your long narrative. I can even see it happening--everything except CNBC rolling with the punches so smoothly.A question, if I might, on your recent post, particularly about the comment--"Like a balloon in a swimming pool, the powers that be keep applying more pressure on the balloon and sink it to further depths. When those same constraining powers can no longer keep control and lose their grip - POG should rocket violently upward."Would you completely rule out this alternative proposal?:Like a balloon in a swimming pool, the powers that be keep releasing pressure on the balloon (by selling supplies of paper Gold instruments into the demand as they deem necessary) to keep or sink it to further depths. Only when those constraining powers are revealed to leave the physical market and demand for Gold metal unsatiated will the price of metal rocket violently upward as the paper-influenced means of price discovery is abandoned. The metal is the key to the future.On a separate note, congratulations to all who increased their precious metal position through well-earned awards for their efforts in the forum's birthday challenge.Gold. Get you some. ---Aristotle Black Blade (10/10/2000; 0:24:33MT - usagold.com msg#: 38659) RE: Leigh Thanks, I was in one of my bored outta my skull moods. Au is slowly dropping in Asia but but all the peices of the puzzle are in place. Like a balloon in a swimming pool, the powers that be keep applying more pressure on the balloon and sink it to further depths. When those same constraining powers can no longer keep control and lose their grip - POG should rocket violently upward. Time to catch some ZZZZZZBTW, Congratulations! - Black Blade ViewYesterday's Discussion.
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