Welcome to the USAGOLD Gold Discussion Archives. Looking to buy gold coins and bullion? The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets. To join the debate request a discussion password here.
The opinions posted by all guests at this forum are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of this forum shall therefore not be construed as equivalent to endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.
ARCHIVED DISCUSSION FROM 10/11/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) Giovanni Dioro (10/11/00; 23:51:24MT - usagold.com msg#: 38826) The Nature of "Savings" Messrs. Asher & Mulligan, The key to savings is that instead of spending on consumption, savings are plowed back into the economy to be used in the capital formation of machinery, factories, and equipment. High savings ratios and high standards of living go hand in hand. On the contrary low savings rates ultimately leads to lower standards of living.Differentiate a nation's savings going into the capital formation of plants, property and equipment from that of a nation playing a game of greater fools, throwing money at some 100 P/E company that has very little capital formation. And so it goes, a bubble grows. SHIFTY (10/11/00; 23:26:49MT - usagold.com msg#: 38825) lots of red in Asia http://finance.yahoo.com/m2?u Taiwan getting hammered tonight. Down -235.54 -3.90% $hifty Peter Asher (10/11/00; 22:55:21MT - usagold.com msg#: 38824) Mr. Mu;;igan & Giovanni You said >>>>>Today's paper asset bubbles were built by American'ssaving in 401k's, mutual funds, and pension funds.<<<<<That is not ‘Saving', That is ‘Spending'!The money is spent on acquiring shares of corporations. There is no obligation to those shareholders to give them back a single dime of that money they have parted with. They have only an asset that they ‘Hope' to sell to someone else for more then they paid for it.Unless in cash or Gold/Silver, ‘Savings' are really funds ‘Lent' to the bank and carrying an obligation to be returned on demand or at a specified time.And while on the subject of the negative savings rate, consider that one of the factors lessening the demand for gold, is that buying it is really a saving activity as opposed to investment. Saving is "out of favor" these days and therefore that aspect of gold acquisition has vanished. Midas Mulligan (10/11/00; 22:14:49MT - usagold.com msg#: 38823) Reply to Giovani I stand corrected, savings RATE, as opposed to savings amount, is low but I think that's because, IN ADDITION, they overborrow as much as they oversave. Together this means they underconsume relative to the amount they save, borrow and invest, and that's what inflated the dollar denominated asset bubble and deflated the price of gold. The public has been taught to believe that perfection is impossible ("nobody's perfect") and thus they ignore, and invest against gold, which is perfect money, and live for the dollar, which is imperfect money, and on the standard of "in god we trust"(feelings) versus "in gold we trust"(fact). They have it backwards. justamereBear (10/11/00; 21:45:44MT - usagold.com msg#: 38822) To All There has been some discussion on the forum regarding $30,000 gold and inflation that I can't seem to get my mind around.Perhaps someone out there is a history buff.If we go back to the US civil war, can anyone tell me what the Confederate dollar was worth in the aftermath of the war? Was there any provision for exchange into the currency of the North? How did the changeover from South to North currency play out? To my mind there are similiarities between that scenerio and a failure of fiat currency, except that I doubt there will be an interested, or a benign group, who will, or will be able to, take the fiat in exchange for real money.If that is the case, I suppose you might call the result inflation, all the way to infinity, because the paper will be worth zero.Can anyone enlighten me? Giovanni Dioro (10/11/00; 21:30:44MT - usagold.com msg#: 38821) America's Dismal Savings Rate Midas Mulligan,Generally speaking the savings rate declines as interest rates drop, and people borrow more at the lower rates. Relatedly, lower interest rates generally give rise to higher asset prices, which creates a wealth effect and in turn leads to even more borrowing and spending. All this leads to a lower savings rate.The savings rate is simply found by subtracting spending from earnings. And paper gains in stock portfolios (asset bubble), do not contribute to the savings rate. If anything it shows how much markets have been leveraged, as high asset prices are used to secure more loans.So in fact, it is the asset bubble that has made a major impact on the decline of america's savings rate by encouraging people to borrow and spend more. Canuck (10/11/00; 21:08:50MT - usagold.com msg#: 38820) @ Megatron I hear ya pal.My wife's on-line account added a new feature a couple weeks ago; it was a rating of the stock from 1 to 5, 1 being 'strong buy' and 5 'strong sell'. I typed in a few tickers and got 'buys'(1.6 & 1.7) and PCA.TO got a strong buy (1.4). I punched in a few more and a few more and the worst I could get was a 'buy'. Finally I typed in some ultra-loser stocks that no one would buy and still got 'buys'. I inputed every ticker that I know and NEVER received anything lower than BUY. I guess it's safe to buy any piece of crap company.If I recall correctly ,you are north of the border? Recall the horrific scandel with the large bank in Canada this summer? That's a hint with the on-line broker.Anyway that was my turning point.Thanks for your story.@Nickel62Thanks for the answer. Midas Mulligan (10/11/00; 20:44:52MT - usagold.com msg#: 38819) Reply to total amateur :the world is on the gold standard as it's always been Gold is the always the standard it's just that the world lives against it since it lives against reality, ie. is irrational. So the question is when will the world live for ,and not against, gold,reality, and thus themselves. When they live against it they depress it's price relative to the price of assets denominated in dollars while raising it's value relative to the value of assets denominated in dollars. When the live for it, vice versa. They will live for gold, reality, and themselves when they can perceive that gold is the best investment, which will be when it's at it's peak price. megatron (10/11/00; 20:18:21MT - usagold.com msg#: 38818) 'THIS HAS GOTTA BE IT!' For 3 years I've been waiting for a'sign', telling me that yes, this has gone too far. P/E's over 200 don't do it for me. Vapour stocks didn't faze me. MonkeyDEX was cool. But in the Oct.2000 issue of, what else, OnLine Investor, is a new piece of software called WIZETrade. It's simplicity itself. Type in the stock symbol and press go. If the button flashes 'green' you buy, if it flashes 'red' you sell! The interface even looks like a slot machine. This is the most insane f^%$^^$ing thing I've ever seen. I couldn't laugh anymore, I'm near death! I'm phonin' the guy with the monkey and tellin' him 'It's over pal'! From this point on any investment advise is pure worthless bulls$#,because now I have witnessed the 'Real' thing, the Fifth Horseman,perpetual motion, thermodymanics has been conquered, it's all true Aaaaaaa. Run away very quickly! lamprey_65 (10/11/00; 20:04:18MT - usagold.com msg#: 38817) A Picture... http://www.contraryinvestor.com/mo.htm ...worth a thousand words. Check the graphs at the bottom of the page.Oh, boy. nickel62 (10/11/00; 19:44:41MT - usagold.com msg#: 38816) Canuck let me take a try at your question as to why the Precious Metal stocks get kicked down in a down market. Well I think that all of us here are fairly familar with the fact that there is not a lot of other people out there who might become supporters of gold or gold stocks as long as they are not going up. The modern market is largely composed of momenteum followers who will literally buy whatever is moving. The last thing the powers that be want is these slavish purchasers to have the notion that perhaps the new leadership is in the precious metals. Oil stocks maybe if they have to have something because we really can't control them anyways but the gold stocks would lead to a flow of funds into the very thing they have been depressing and make their cost of continuing to hold it down very great indeed. The thing that few have grasped is that this entire charade is based on Rubin's astute awareness as a Wall Street trader that almost all investment "professionals" are really gutless trendfollowers who will quickly fall into line behind whatever leadership they think will save there ass. The absolute last think the powers want is the syphoning off of the money flow to other areas. NOT only because they are not benefiting from it if they do but also because they would then have to begin to cover their sizable shorts. Gold stocks I am sorry to say will only go when it is clear that they have totally lost control. And then if they are still in business only the unhedged miners will go. Midas Mulligan (10/11/00; 19:29:24MT - usagold.com msg#: 38815) To the Contrary... American's Oversave Over and over in this forum and elsewhere I here the comment that American's don't save enough. They in fact save way too much. Today's paper asset bubbles were built by American's saving in 401k's, mutual funds, and pension funds. They save so much because they were educated to believe that death and taxes were the only certainties in life. This oversaving inverts the money multiplier or stifles the velocity of money which causes disinflation and depresses the price of gold and the relative spirits of gold investors, though it pleases the absolute spirit due to the opportunity for dollar cost averaging. The true certainties in life however are life and gold, not death and taxes, and when the market bubbles burst and slowly and steadily deflate sending the price of gold sky high in response to inflation, then they will learn happily that they were wrong, but will pay a very high tuition expense which will be the price they buy gold at after it's risen from those who owned it before the rise Midas Mulligan (10/11/00; 19:09:51MT - usagold.com msg#: 38814) Gold's destined to be a standard and a cheap commodity Once the stock and bond market bubbles eventually deflate creating inflation the price of gold will, in reference to Shifty's comment, takeoff like the space shuttle Atlantis. Those who own gold will sell to the public at the top which I'm predicting to be between 10,000 and 15,000. That will end the "God" (In God we trust), ie., the arbitrary or subjective dollar standard, and put the world on the gold, the fixed or objective dollar standard, and from that time on the price of gold will fall sharply and the value of the dollar will soar as production explodes as the mind of the individual is free from any and all atatist controls. When gold plummets it will then be used as an industrial commodity as well as a monetary standard because it'll be so cheap and as other commentators here have said, it's the best conductor of electricity etc....etc... And if you've ever wanted to experience the feeling of exhiliration that a person aboard the space shuttle feels as it blasts off into outer space, buy gold or gold stocks etc... and feel the thrill of it's price soaring. lamprey_65 (10/11/00; 18:58:01MT - usagold.com msg#: 38813) Aristotle Yes, I think we're on the same wavelength.The definition of dollar in the dictionary should be: 1/xxx an ounce of silver (or gold).Kind of like saying 1 troy ounce=480 grains=20 pennyweights. "Dollar" is reduced to nothing more than a more convenient way to say, "1/xxx of an ounce." -- nothing more, nothing less. Gandalf the White (10/11/00; 18:49:47MT - usagold.com msg#: 38812) Just change the RULES again --- OR --- NEW YORK, N.Y., October 11, 2000 - The New York Mercantile Exchange will raise the margins on its October 2000 platinum futures contract as of the close of business today to $3,600 from $1,600 for clearing members; to $3,960 from $1,760 for members; and to $4,860 from $2,160 for customers. ===OR --- Hold physical and do not worry about "margins" !!<;-) RossL (10/11/00; 18:45:22MT - usagold.com msg#: 38811) Aristotle - quiz 1. Short the bank stock. Maybe.2. Maybe short the affected currency.3. Must choose (B) Cavan Man (10/11/00; 18:44:05MT - usagold.com msg#: 38810) Sir CB2 At least that GE multiple is "trailing" and not "projected" (smiling, broadly). Aristotle (10/11/00; 18:36:24MT - usagold.com msg#: 38809) You're right on top of it, lampry_65 -- with one small step to the right This is good ----"As I see it, as long as coins were produced of silver or gold, it all made sense. Once paper money began to be used, however, the government started to get cute with things (like a fractional representation...didn't have to have XXX ounces on hand to print more "dollars") and that is what killed the standard."But more to the point that is all important, as much grief as we all rightfully heap upon the effects of fractional reserve lending, there is no possible way (within banking as we have all come to know it) for "full reserve banking" to exist where the "Reserves" and the "Currency" are the same thing. As soon as a bank makes the tiniest little loan to a hopeful borrower (such as a farmer or an entrepreneur), the bank's reserves of hard deposits experience a measure of depletion as the borrowed currency is put into use.You offered as a potential solution---"Why not call the standard (gold, silver, etc.) what it really is -- true money...with paper just being the representation of that true money? For instance, 1 Dollar = 1/10 gram of gold..."Given the inability of governments to constrain themselves to playing within the "Rules of the Game," and given the natural expansionary effects of private/commercial banking on the apparent money supply, I see the advantages of an alternative proposal to yours.Would you rather stand by your suggestion to find yourself holding many many tenth-grams of gold of which the government proclaims the value to be fixed at One Dollar per each tenth and issues paper bills to that effect;--OR--would you rather find yourself holding many many tenth-grams of Gold over which the government has NO say, but rather the Free Market decides what value is held by each tenth?Under this second alternative, as the banking system naturally expands the currency, or as the government cheats at the rules, the Free Market valuation compensates the Gold holder accordingly. The Free Market takes the handcuffs off of fair (high!!) Gold valuation that a government/banking/GoldStandard can only manage to inhibit in the interim.Gold. Get you some. ---Aristotle Canuck (10/11/00; 18:27:54MT - usagold.com msg#: 38808) Miscellaneous I forget the name of the person that tracks the POG up after 4:00pm eastern and down after 8:30am EST. The POG has been knocked about in N.Y. alot the last few weeks. The 'stats' would show the 'management' quite clearly now I am sure.Question: Why are the PM stocks beaten unmercifully during this greater equity downturn?Canuck. Aristotle (10/11/00; 18:03:00MT - usagold.com msg#: 38807) A Golden Pop Quiz for all you contestants at home HISTORY1. Step back in time to "the good ol' days" (c. 1900) when America was on a traditional Gold standard and ALL banks were effectively bullion banks. If reliable research led you to the early conclusion that the bank holding your deposits was overextended and borderline insolvent, would you: a) act to leverage this position by investing your available banknotes and bank deposits into ownership of that same bank's corporate stock? --or-- b) avoid the inevitable bank run by being among the first individuals to calmly exchange your bank notes and withdraw your bank deposits in the form of Gold coinage?ECONOMICS2. You find yourself in modern times within a country in which your research reveals that conditions are ripe for a financial crisis and potentially severe devaluation of the national currency. Would you: a) invest your available currency savings and portfolio assets in the "safety" of moderate-yielding government bonds, and also seek various "less economically informed" counterparties with which to contractually arrange a leveraged wager on the extent of the expected devalution in order to potentially increase your legal claim on future gross holdings of the same national currency? --or-- b) eliminate your exposure to the risk of currency devaluation and to counterpary default by acting early to spend/exchange your tenuous national currency for tangible items of wealth, such as Gold?COMMON SENSE3. You are sitting at your computer in October of the year 2000, reflecting on your life's acheivements and the vastness of the numbers within the paper portfolio you've accumulated during these heady economic boom years---accumulated both through hard work and traditional investments coupled with good luck/timing. Research reveals that bullion banking (see question #1) still exists in an international scope, operating in tandem with our common fiat currency system of banking. Research also indicates the warning signs of overextension and potential insolvency of the bullion banking System. Although you are not a bullion banking depositor or account holder, prudence and opportunity inspire you to: a) reallocate currency and portfolio holdings into bullion banking stock and the stock of their various account holders (e.g. hedge funds and mining companies), and seek these same customers of the bullion banks as your trusty counterparty in various financial contracts designed to leverage your exposure to to the inevitable collapse? --or-- b) reallocate a prudent portion of your currency and portfolio holdings into physical holdings of the single item which, through its relative scarcity and contractual unavailability, will facilitate the banking collapse as it becomes the most vigorously sought-after financial asset in the history of human endeavor?Gold. Get you some. ---Aristotle SHIFTY (10/11/00; 17:34:17MT - usagold.com msg#: 38806) The space shuttle WOW Just watched the space shuttle go up from my front yard. The best looking one I have ever seen. The nearly full moon and that tower of smoke and flames with the sun turning the trailing smoke various shades of crimson. Now if only gold would be allowed to do that. WOW!$hifty Turnaround (10/11/00; 17:31:30MT - usagold.com msg#: 38805) I Love Our Wizardly Big Brother Black Blade (10/11/00; 04:16:10MT - usagold.com msg#: 38765)RE: Turnaround"I think you got the job! At the BLS that is ;-)I wouldn't have come up with that in a million years. That's really good - cheers - Black Blade"Nah, nothin' to it. Most of it was pulled from one of Alan Greenspan's Congressional spewfests:http://www.bog.frb.fed.us/BOARDDOCS/hh/1999/july/testimony.htm"… The acceleration in productivity owes importantly to new information technologies. Prior to this IT revolution, most of twentieth-century business decisionmaking had been hampered by limited information. Owing to the paucity of timely knowledge of customers' needs, the location of inventories, and the status of material flows throughout complex production systems, businesses built in substantial redundancies. …"--AGContrast this little thought with your "Hydrocarbon Man" series, or with the gold market. I wonder which is correct, hmmm?Then a few New Economy phrases were sprinkled in, mostly from:http://www.dack.com/web/bullshit.htmlStuff like "disintermediate front-end markets".See? Anyone can be a government or Fed spokesperson. Which reminds me- I wonder if our beloved maximum leader Alan Greenspan uses a computerized speech generator? Most of his droning has that robotic sound and feel to it. THX-1138 (10/11/00; 17:30:34MT - usagold.com msg#: 38804) Gold price munipulation I am in a good mood today.Watching the gold price being constantly pushed down during US trading is extremely funny.Like watching a game of tug-o-war. I just hope the price stays down until I can get the 100 ounces I am trying to accumulate. Only have about 15 ore to go.I was getting worried yesterday when the POG went up. Was afraid I wouldn't be able to convert this coming friday's paycheck into gold at such a low price. The lower the $ price, the higher the physical pay raise. Yeehaw!Come on gold cabal. Keep the price down until after Friday! lamprey_65 (10/11/00; 17:30:01MT - usagold.com msg#: 38803) Also... Many of the founding fathers were fervently opposed to ANY thought of fiat currency. They had first hand experience of the after effects from the paper currency (fiat) floated during the Revolutionary War. That's why they "fixed" the dollar to a set amount of silver.If I remember correctly, the idea was even floated that anyone who proposed a fiat (paper) currency should be shot! (Sounds like a Patrick Henry idea!).From 1796-1964, all dimes, quarters, half dollars and dollar coins were 90% silver.Smart fellas, no? lamprey_65 (10/11/00; 17:18:54MT - usagold.com msg#: 38802) Aristotle Why not call the standard (gold, silver, etc.) what it really is -- true money...with paper just being the representation of that true money?For instance, 1 Dollar = 10 grams of silver (or 1/10 gram of gold)....just examples off the top of my head, but I think you get the idea.Wasn't a dollar ORIGINALLY DEFINED, way back in the 1700's, as .7736 ounces of silver? As I see it, as long as coins were produced of silver or gold, it all made sense. Once paper money began to be used, however, the government started to get cute with things (like a fractional representation...didn't have to have XXX ounces on hand to print more "dollars") and that is what killed the standard.Could be wrong...any thoughts?Thanks,Lamprey beesting (10/11/00; 16:56:25MT - usagold.com msg#: 38801) Try this URL on Last Message. http://www.bis.org/about/index.htm .......beesting. CoBra(too) (10/11/00; 16:51:05MT - usagold.com msg#: 38800) - NO Subject intended - On a clear day like today you can see forever and never, ever forget to buy the dips - after all it was only Motoroladipping 19%, while Lucent and Yahoo continued dipping in solidarity and, of course on profit concerns. In the meantime GE's 3rd. Q. earnings have been up 20% - on "real" energy systems vs. virtual "inter-tech" non-profitability! Gee! GE, a former old economy co. is at long last making some real 'money" again - virtually intriguing? No? - So, how do you rate a stock, trading at 57 P/E and making real? profits? ... What a dilemma! future price discovery of about 90% of the main indices will be tied to the potential of virtually sub-zero earnings potential. Another great way to subsidize the virtual federal budget surplus - in full view of the twin deficits and the historical sub-zero US savings rate - "It's going to be a real freezing winter", say's Uncle Scrooge - before settling down to contemplate the "virtual" liberty to vote for or against another TV talking head... telling you about the great new discovery of current account and trade balances being negative - IS POSITIVE - for your $'s HEALTH! As I'm far from being anyplace near your Surgeon General, I don't wann'a beat about the Bush - though I personally hope he'll qualify, though as a drawback, GWB did not invent the INTERNET - which may come in handy as the Naz-Duck's getting more Gory with the day - ... and "cut it out" may becoming 'dernier cri' ... Still, wishful thinking, while indices do the same and POP.G (price of Paper Gold) gets bashed -virtually! ... Try to bash physical - if you've got some left in the vault's - or POO before POG'in' - as it does'nt really matter how or why you default - again, does it? - cb2 beesting (10/11/00; 16:46:53MT - usagold.com msg#: 38799) To refresh a few memories on how the BIS values the U.S. dollar to Gold! http:www.bis.org/about/index.htm <<The gold franc of the BIS has a gold weight of just over 0.29 grams offine gold, which is identical with the gold parity of the Swiss franc fromthe foundation of the BIS in 1930 until September 1936, when the Swissfranc's gold parity was suspended. The BIS employs the gold franc solelyas a unit of account for balance sheet purposes, with assets and liabilitiesin US dollars being converted into gold francs at the fixed rate of US$208 per ounce of fine gold (equivalent to 1 gold franc = US$ 1.94) andall other items in currencies being converted into gold francs on the basisof market rates against the US dollar.>>Those in the Know are Buying....Gold....beesting. Aristotle (10/11/00; 16:20:51MT - usagold.com msg#: 38798) Replies for totalamateur 1) "What would hapen to the POG if a nation declared it would adopt the gold standard?"Let's say this arbitrary country used a currency called the "Papre." If they went on a traditional Gold standard, then the monetary authority of the nation would effectively lock the "Price of Gold" unwaiveringly to some fixed amount of Papres that seemed suitable at the time. The official and effective POG would become XXX Papre, where XXX represents some fixed number like our own old Gold standard where the "Price of Gold" was fixed at 35 dollars.2) "Would it be feasible?"Is it doable? Yes. Is it sustainable? History says no. It is doubtful that the management of and adherence to the rules of the system would survive far beyond the novelty phase. Ultimately, that would be determined by the nature of that nation's economic interaction with international markets.3) "What if a country decided to peg its currency to the Euro? Isn't that in a way also like going on the gold standard? At least by 15%?"Pegging to the Euro (or any other currency unit outside of the nation's creative/administrative jurisdiction) would be fundamentally similar to a return to a Gold standard as we discussed above. In this case, the local "Price of Euros" would become fixed at XX Papre. Fifteen percent? No. In for a penny, in for a pound.4) "Would the OPEC countries get away with declaring that from a certain date the Euro and the Dollar were on an equal basis when it comes to paying for oil?"The producer of a good can get away with charging whatever a willing marketplace will bear. Does your "equal basis" mean that the price in each currency would be the same? If so, then international forex traders would seize the arbitrage opportunity to bring the currencies to parity. If "equal basis" means that both would be readily accepted at the buyer's choice, an extension of thought from Gresham's law would predict that dollars primarily would be offered for oil, even as the price sailed away, taking all other dollar prices with it.That is why Gold is from now forward a vital component to viable savings.Get you some. ---Aristotle Midas Mulligan (10/11/00; 16:09:39MT - usagold.com msg#: 38797) Reply to total amateur First let me define the term "gold standard". That is when there is no central bank and all paper currency can be directly exchanged for gold at private banks, thus providing self regulation of the banking system. The best book on the gold standard is Richard Salsman's "Gold and Liberty" available at 2nd Renaissance Books (18007296149). A true gold standard can not be legislated. A pseudo, or state legislated gold standard, existed during much of the 1800's throughout much of the world and gave the world relative price stability and prosperity but because it wss only relative and not absolute it failed in violation of Gresham's law and paved the way for central banking. The only way to establish a gold standard is to allow and catalze, the opposite of a gold standard, a centralized economy, run it's course to inflationary failure which will naturally establish gold as the standard. So when the markets eventually fall and cause the price of gold to rise in response to inflation gold becomes the standard and those who are intelligent and wise enough to own it become the gold standard bearers or rulers/legislators. Aristotle (10/11/00; 15:39:07MT - usagold.com msg#: 38796) Journeyman, your (10/10/00; usagold.com msg#: 38711) is exactly what I was driving at in a post to Black Blade You provided a clear description worthy of a second look--------"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......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 [or rather, Paper 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."------Someone who had an appreciation for this line of reasoning had asked a few days ago whether it was likely that the price could fall absurdly low. As you and I have tried to show, those with a vested shorting interest could be content to simply create paper supply as needed to stifle the price in this "comfortable" range.It must be said, however, that a scenario is not too difficult to envision where the market participants catch on--and Wolavka gives up his optimistic regard for these instruments--and no buyers step forward to bid on the available supply of Gold futures. Theoretically, the price could fall to zero on this complete absence of "buying" interest. (I say "buying" interest because the players are not actually buying anything, they are simply putting down a margin to participate in the wagering process.) But, we all know that that won't likely happen because the shorts would simply seize that opportunity to close out their positions. And at this point, the Gold futures market would be dry-docked.But as we await the inevitable, the potential certainly exists for considerable volitility (up but mostly down), depending on the the steadiness and resolve of the shorts who are calling the tune on paper Gold and therefore price discovery. And to reinforce the important part of this point, rising premiums will adjust the "take home" price of physical Gold to reflect the demand stresses on the physical market during such a time as the paper prices do not and can not reflect metal liquidity crunches.Gold. Get you some. ---Aristotle totalamateur (10/11/00; 15:11:19MT - usagold.com msg#: 38795) Gold Standard Dear Forum Readers and Posters!What would hapen to the POG if a nation declared it would adopt the gold standard? Would it be feasible?What if a country decided to peg its currency to the Euro? Isn't that in a way also like going on the gold standard? At least by 15%?Would the OPEC countries get away with declaring that from a certain date the Euro and the Dollar were on an equal basis when it comes to paying for oil? wolavka (10/11/00; 15:03:21MT - usagold.com msg#: 38794) sticking my neck out crossed fast track no resistance tonite to up side.dec gold. wolavka (10/11/00; 14:40:26MT - usagold.com msg#: 38793) cleaned out the suckers position squaring over, time to burn some shorts.Why wait gold on the move beesting (10/11/00; 14:40:20MT - usagold.com msg#: 38792) Watching from the Sidelines! http://quote.yahoo.com/m5?a=1&s=XAU&t=EUR It looks like every share market in the world has gone down in the last 24 hours, and in the U.S. with very heavy volume.Also on the FOREX it looks like most currencies worldwide lost value in relation to the U.S. dollar, "EXCEPT" the British Pound! Question, why not the British Pound??The POG in Euro's = $312.07...steady as she goes.....one gram of Gold = about $10.00 in Euro's!Something big worldwide may be happening in the financial paper markets????....If you have U.S. dollars to spend for Gold, think about getting some ASAP, while exchange rates are in your favor!!! Not meant for financial advice......beesting. Phoenix (10/11/00; 14:15:43MT - usagold.com msg#: 38791) SPR Buyer News http://www.slb.com/ba.cfm?baid=1 Euell Claims Oil Firm Collusion Blocking SPR DealWASHINGTON, Oct 11 (Reuters) - Pipeline company Euell Energy is demanding an investigation into alleged collusion by oil companies which the firm's chief executive on Wednesday claimed has stopped Euell completing its deal to lift crude oil from the U.S. Strategic Petroleum Reserve (SPR). Renard Euell, chief executive of Euell Energy Resources in Aurora, Colo., told Reuters that oil companies had backed away from preliminary deals to take Euell's three million barrels of SPR crude which meant the company could now not secure the financial letters of credit needed to lift the oil. "On Friday we had commitments for a letter of credit. By Tuesday those same folks decided they are not going to do that", Euell said. "We are calling for an investigation and for the three million barrels to be put in limbo until we have (Attorney General) Janet Reno investigate the anti-trust and collusion that took place. I will give the names of the refineries and people to her," Euell said. The Department of Energy (DOE), at the direction of President Bill Clinton, loaned or swapped 30 million barrels of crude oil from the 570-million SPR to ease possible supply shortages for home heating oil along the East Coast this winter. Most of the oil was allocated to well-known market players such as BP Amoco Plc and Valero Energy Corp but the DOE has come under criticism for swapping one-third of the crude oil to a trio of companies, including Euell, with little or no experience in the oil market. Euell said oil companies had shied away from buying Euell's crude when prices started to move higher because of rising tensions in the Middle East. A Department of Energy spokesman declined comment on specific financial discussions but said that Euell's three million barrels of crude would remain in the SPR if no letter of credit emerged by close of business on Thursday. The DOE could choose to reoffer the oil later, he added. Lance Stroud, who runs Lance Stroud Enterprises from his New York apartment and was awarded 4 million barrels from the SPR swap, remains hopeful that he would obtain his letter of credit by the Thursday deadline. Stroud said that the oil industry was a close knit group, making it difficult for smaller outsiders to obtain the necessary backing, but made no claims to collusion. "It's a close knit family, the oil industry is a close knit family," Stroud said. Euell, an African-American businessman, said that discrimination has also played a part in blocking his firm's deal for the crude. "We don't believe there is one white company in the U.S. that could bring 115 percent of collateral and not be able to get an irrevocable letter of credit, especially when they have three million barrels sitting there," Euell said. The SPR release has been criticised by Republicans as an attempt to drive down prices and win votes in the November election. MarkeTalk (10/11/00; 13:54:43MT - usagold.com msg#: 38790) Today's "Bear Market Delights" Today's stock market has served up two tasty '"bear market delights" for the hungry bear: Lucent Technologies and Motorola. Lucent's earnings were subpar and investors knocked the stuffing out of it--down about 8 points to 21 per share. Motorola's cellular business is slowing (along with all of its competition) and this stock dropped 5 points on that news. Both of these have dragged the stock averages down. Dow Jones was down earlier 143 points, Nasdaq is down 50 points and the S&P 500 is down about 19 points. The slow and steady erosion of stock values day after day (with only brief intermittent rallies) is the true hallmark of a bear market. As Richard Russell, one of my favorite newsletter writers, likes to say: This is a "stealth" bear market and we are just in phase one! Leigh (10/11/00; 13:54:07MT - usagold.com msg#: 38789) Shifty How about, "Then Algore said, 'Hey, those are my chickens! I remember raising those very ones on my farm in Tennessee. Give em here.'" SHIFTY (10/11/00; 13:44:18MT - usagold.com msg#: 38788) I heard a good one today. George Dubya asks Algore " If you can tell me how many chickens I have in this sack I'll give you both of them. Al thinks hard and takes a guess. " 5?"$hifty wolavka (10/11/00; 13:19:07MT - usagold.com msg#: 38787) BVN Last year goldman sachs had their hands on this one, don't know about it now??????????????? wolavka (10/11/00; 13:02:04MT - usagold.com msg#: 38786) Violent tonite/ tomorrow Gold and grainswheat market is inverted. Galearis (10/11/00; 12:19:25MT - usagold.com msg#: 38785) @ Parsifal Offense??? If you took my statements as somewhat aggressive in tone, it is I that should be delivering the apology. Dry words on a page are not always a suitable medium for expressing tone.My intent in my not so much a rebuttal to your post, as to try to place in context what a $30,000/oz physical gold price would mean to our living standards. Perhaps we who store our wealth in gold will best muddle through should this come to past, but what a murky, depressing place for the rest of humanity! We would, of course, have to live in this space along with them. (With all those guns around too!)Peace and best wishes to you kind sir or madam....G. goldhunter (10/11/00; 12:06:53MT - usagold.com msg#: 38784) Hi Mr.Knallgold...#38772 Thanks for your example and interest. It is my contention that futures/physical will be neck and neck at your 460 level...I will grant you, though, that Comex limits of 75 per day can restrict the price increase for that day...in your example, the Comex contract may need a few days to "catch up"...it often happens in pork bellies...both ways!!!I will also offer that gold trades world wide, and there are professional traders that certainly trade differences between spot and futures (arbs) and most likely woul seek to keep any difference to a reasonable? level, whatever that might be.Here is hoping to see you at 460 and compare the difference.Cheers! for $460! Lafisrap (10/11/00; 12:00:24MT - usagold.com msg#: 38783) Galearis Sorry to offend you (and any others) with my cheering for $30,000 gold. Actually, I'm not so sure of how offensive that is, but you have my apologies just the same. I certainly feel reprimanded.About the difficulties associated with hyperinflation, yes, those will probably be terrible. If hyperinflation is to come, it's best to prepare, especially if the rest of your extended family is not prepared. Many thousands of people have put their faith in weak financial instruments that do not offer the safety of gold.Did you look at the M3 chart? Do you have any comments on that chart or on the things I stated about its trend? Parsifal TownCrier (10/11/00; 11:29:30MT - usagold.com msg#: 38782) Some parameters of the EU project http://www.europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=SPEECH/00/356|0|RAPID&lg=EN Total tax harmonisation is not EU goalThe European Union's Taxation Commissioner Frits Bolkestein said in a speech recently that there is little need for region-wide coordination of national policies on direct taxes, even though a a high degree of harmonisation was necessary (and already significantly accomplished) in Euroland on indirect taxes. He explained that the reason as follows... "within the Single Market, Member States are required to eliminate tax obstacles facing private individuals and businesses who wish to work and operate freely in the Internal Market. After all this is what the European Union is about. It is intended to ensure the free movement of goods, services, persons and capital."Contrasting this position between indirect and the direct taxations policies of member states, while speaking Monday in Barcelona, he said, "There is, for example, no compelling need to harmonise the personal income taxes of member states unless they entail discrimination, double taxation or unintended non-taxation in cross-border situations. Harmonisation would in any event be difficult since such taxes are deeply rooted in social and political preferences and traditions. Such taxes can generally, therefore, be left to member states even when the European Union achieves a higher level of integration than at present."He elaborated further later in his speech:"Tax competition can be very healthy. It can act as a brake on a government's capacity to appropriate and spend resources. It obliges governments to offer the best possible services at the lowest possible price in terms of taxation and therefore leads to better public management.But tax competition can become harmful if it undermines Member States' capacity to finance essential public services. It is possible for enterprises and individuals to arrange their affairs so as to benefit from low-tax jurisdictions for taxation purposes and high tax jurisdictions for the purposes of receiving public services. This so- called "free-riding" leads to a race to the bottom in taxation and in the provision of public services and in the end all countries are worse off....Member States agreed that co-operation against harmful tax competition was preferable to continuing the race to the bottom and the increased use of retaliatory measures against each other. The result was the tax package agreed in December 1997." wolavka (10/11/00; 11:00:22MT - usagold.com msg#: 38781) Mr. Gresham Three in one , I like that, an oil.One thing is for sure, tonite Mr Gore will address Mr Bush as not 1st not the 2nd but the terd. wolavka (10/11/00; 10:55:48MT - usagold.com msg#: 38780) downdraft nothing more than squaring. Mr Gresham (10/11/00; 10:47:13MT - usagold.com msg#: 38779) PPT Hey, hey, whaddya say!PPT all the way!New York, New York, center of financial power. Until it isn't. Mobilize that peasant labor --> faith/belief in system --> tax money --> pools of fiat contracts to fight the POG, while you accumulate personal stashes (of what?)How DID those Pharaohs get their subjects/slaves to build all those pyramids? That's a lotta late nights away from the kids.Wolavka, you're influencing my thinking/writing. Is this Russian, Polish or Czech humor? TownCrier (10/11/00; 10:27:45MT - usagold.com msg#: 38778) Sir Zenidea...you are most welcome, it was my pleasure All in a day's work, you know...Cheers. TownCrier (10/11/00; 10:21:40MT - usagold.com msg#: 38777) An important lesson ... HEADLINE: Why gold soared in banana republic http://www.smh.com.au/news/0010/11/business/business16.html Potrfolio performance of product vs producerThis article begins with a very interesting observation: "You wouldn't think that the Australian dollar gold price was at a record two-year high if you were using share prices and the ASX's Australian Gold Index as a guide."Following the numbers reveals that in Australia, gold was recently quoted at A$507, a two-year high and up 11.5% over the lows seen in August. This is in telling contrast to the performance of the mining stock, with the Australian Gold index falling from 757.6 in August to 692.1.Producers are down 8.6 percent while their product is up almost 12 percent. wolavka (10/11/00; 10:04:42MT - usagold.com msg#: 38776) scumballs just hit 274 dec, i'll buy thank you. Galearis (10/11/00; 09:17:48MT - usagold.com msg#: 38775) DOW and NASDAQ FWIW at this time: DOW down 142; NASDAQ down 118 Galearis (10/11/00; 09:11:05MT - usagold.com msg#: 38774) @ Aristotle, Oro & Parsifal Aristotle and ORO: both of you made the case for the value of gold most succinctly. I once bought a stick pin with a gold nugget attached for $40. Upon turning it over I discovered that the "good" side (that which "looked" like a nugget) hid the pin attachment side which turned out to be the base of a pair of gold crystals. The "value" as a museum specimen was many multiples (100s)of the relatively lower end jewelry value. However, this mineralogical niche market, although an order of magnitude smaller than the jewelry trade, would require an effort on my part to find a buyer. Parsifal: I for one (as I am sure is the case for others on this forum) am not looking forward to $30,000 gold. I for one (as I am sure is the case for others on this forum) am not looking forward to the time I will have to pay $100 for a cup of restaurant coffee. That is, if I can even find a restaurant still in business in this possible end game environment. Midas Mulligan (10/11/00; 09:07:59MT - usagold.com msg#: 38773) The Differences and Similarities between 1913-1930 & 1983-2000 They were both periods of credit expansion by the Fed which fueled technological booms and paper asset bubbles, but the 1913-1930 boom and bubble was essentially inflated by margin credit (a hot air bubble) and thus when it bust and burst it created a deflationary vacuum (what Keynes called a "liquidity trap"). Today's boom and bubble is inflated by actual fiat paper which when steadily deflated, and not burst so there's no crash, will create an inflationary flood ("liquidity trap release/escape") and thus an eruption in the price of gold. Knallgold (10/11/00; 08:44:32MT - usagold.com msg#: 38772) Futures versus Freegold If I got this right from the discussion between goldhunter and Aristotele:futures will always run together with physical Gold'says goldhunter.Aristotele disagrees.Well,lets make an example with an event I expect in the not too distant future:ECB announces a new free physical Gold market.Paper POG shoots up 40$ to 310$ in anticipation of higher prices.New old market opens,first paid prices are reported with 350euros (1$=1euro assumption).Paper market readjusts also to 350$.Good.Hunter is right.BUT,IF,new Gold market reports paid prices on first day at certainly possible 500-600euros???Comex goes limit(!) up to 385$.Next day,new market bids 777euros,Comex again,"only" limit up to 460$.This paper-pogdog is way behind!FreeGold does not know limit up (as I understand it)'so we have diverging prices inherent.Comex changes rules?During the game ?Guaranteed?Certainity/credibility? wolavka (10/11/2000; 8:43:22MT - usagold.com msg#: 38771) Break them Crush them with margin calls!!!!!!!!!!!!!!!!!Gold hang on. Going higher Black Blade (10/11/2000; 8:29:30MT - usagold.com msg#: 38770) USS Liberty http://www.halcyon.com/jim/ussliberty/ Is Israel capable of defending itself against it's Arab neighbors without our help? The link suggest that they can. Note the Govenor Clinton proclamation at the site. Strange! The following link is eyewitness testimony of the attack.http://www.washington-report.org/backissues/0693/9306019.htm Black Blade (10/11/2000; 8:02:37MT - usagold.com msg#: 38769) IEA predicts winter oil shortage Source: Financial Times By Andrew WardGlobal oil supplies remain "stretched", leaving the northern hemisphere vulnerable to a winter fuel shortage, the industrialised world's energy watchdog warned on Tuesday. The International Energy Agency said increased output from producer nations and the release of 30m barrels from US strategic reserves would not be fully absorbed by the market until the new year. The system is strained and running hard just to keep even," said the organisation's monthly report on the oil market. The IEA is the energy security arm of the Organisation for Economic Co-operation and Development. The report, combined with mounting concern at political tension in the Middle East, the world's most important oil-producing region, set a bullish tone in the oil market on Tuesday. November Brent Crude, London's benchmark futures contract, climbed 61 cents to $31.37. The IEA said global stocks remained "extremely low" and the market was "fragile", suggesting that oil prices - which reached 10-year highs of $38 last month - were unlikely to weaken significantly in the short term. "The global energy market is coming to grips with the reality that there are physical limits on what can be accomplished before the winter," it said. The distribution system was "stretched and lacks flexibility", resulting in a lag between an increase in crude output and an easing in consumer supplies. "Forcing more crude into a capacity constrained system won't correct [the] situation . . . overnight," it said. Refineries in key markets, such as the US, were working close to full capacity, pipelines were full and the world fleet of oil tankers was in high demand. "If everything runs smoothly then we will get through the winter without major disruptions and all the nervousness and anxiety will be for naught. But for the moment the market remains on edge, and prices are responding accordingly," it said. But the report said supplies would be eased in the first quarter of next year when the effects of increased output begin to kick in. Analysts forecast that the price per barrel could fall to $27 in the medium term and $20 by the middle of next year. Black Blade (10/11/00; 07:22:26MT - usagold.com msg#: 38768) Wild Ride on Wall Street - Hang on Tight! http://www.gold-eagle.com/gold_digest_00/droke101100.html The futures are down across the board. The S&P Futures are down -3.30, but the NASDAQ Futures are down -47.00 (well below fair value) after being down as much as -75.00. Lucent came out with lower than expected earnings, but other companies met targets. That is not good other as the expected analysts earnings are for us peons, and there is another number called the whisper number which is some "secret" expected earnings number that isn't for the crude, rude and uncouth peons. Unbelievably, most analysts still claim that the NASDAQ is in a corection phase - OH REALLY?. Anyway this looks to be an interesting open on Wall Street. Oil prices are still well over $33.00/bbl after bouncing under $34.00/bbl overnight. The API inventory numbers really show a very critical shortage of distillate supplies and also there now is a very real possibility that the only way to conserve enough supply to get through the winter months is by sharply raising prices. The IEA report earlier this week predicted record high prices for heating oil and natural gas. Obviously this is the government's way of saying this is "fair warning." Gold is steadily gaining ground and is up +$1.40 at $273.30. The worldwide markets were awash in "red" and we can definitely expect the same on the US side of the pond. Most currencies have also gained on the USD expect the Canadian Loony which can't seem to get in gear when everyone else is off and running. The link posted above is a good write up that covers the reasons for the debacle on Wall Street. This Tech bear market (yes it is a bear market!) is not a unique occurrence. The drones says it is different this time - BS, it is more of the same! Once it was "Radio." The New Economy" stocks prior to 1929 were radio stocks led by the Grand Daddy - RCA. Don't remember the others? I don't either but then you can't blame me, they haven't existed for nearly 70 years. In the 1960's it was "Tronics" or "Onics" as a pre-fix to the stocks of the day. Most of these "New Economy" stocks were electronics stocks. But that's not all - Oh No! There were also the "Nifty Fifty" stocks. These hot stocks of the "New Economy" were the 50 best growth stocks of the day that would be around forever and always be profitable. Yeah, you know them - stocks like Polaroid!!!! The only thing that will be different this time is the severity of the crash and the number of small investors that get burned - make cremated! - Black Blade ORO (10/11/00; 06:48:50MT - usagold.com msg#: 38767) Taurus - To strengthen Aristotle's already strong explanation All goods and services are given value by their consumers. The subjective values that are placed on these items of commerce result in prices being set so that those supplying product and those consuming it are both satisfied sufficiently to engage the trade. Those consumers who value the item less than the market price are shut out of the market and constitute an unsatisfied potential demand. Those suppliers that value their product at a higher price than that currently set in the market are potential suppliers (it does not matter in this discussion why it is that producers may value their supply above the market - production costs - expectation of better future prices - whatever).No industrial/producer good can have any value at all without the consumer's desire to obtain the goods that are produced from it. Characteristics of gold that make it desirable to its consumer include rarity. This puts gold (and silver) in the same category as art works and other collector's items, which constitute the more permanent components of wealth, the items whose main consumer use is possession. Whereas the money usage makes gold a measure of wealth, it should also be understood that it IS wealth. Concept monies are only possible measures of wealth and contain no intrinsic value in the eye of their consumers. Values of concept money are completely derived from the value of that which may be purchased with them, or of the security put up against the loan that created a credit money. The market value of concept money is completely derived from consumer preferences for things that are not concept money.The value of gold as an industrial commodity results from the same consumer choices as to the desirability of the products that use it as does the direct holding of gold.Some items have no direct use for the consumer but are necessary for the production of consumer goods. It is the consumer's demand for the product/service using this item that provides it with value.As to industrial uses; prior to the invention of stainless steel and the discovery of the other noble metals, gold was the only material known to man which would not change in appearance or in composition over time. This made it useful in industry well before people knew to call their productive activity by that word. When an item was made for beauty, gold was applied to the surface in order to preserve the efforts of workmanship and art. Then gold was applied to items of lesser permanence in order to make them appear valuable or of quality. Gold became the preferred material for jewelry because of its resistance to chemical damage as well as for its color. But most of all it was because it was rare and therefore an emblem of wealth. Much of the essence of jewelry is the display of wealth. Even after decades of synthetic stones of superior beauty being available, natural stones command a substantial premium. It is the mark of discriminating taste that the bright and sparklig substitutes are rejected in favor of rarity in the appeal of a jewel. Taurus, the point of your message was a distinct rejection of the valuations of the individuals that consitute the market place. You are rejecting their preferences in favor of your own narrow view from among the cogs of the machine that makes the goods/services that people want. Yet it is these preferences that have caused the machine to be built, and that induce value into the various commodities you do seem to value. If gold is "useless" other than its use as money or as a plating material, so are all of our personal choices as to what to consume and how much to pay for it, and so we all are "useless". Shermag (10/11/00; 06:18:55MT - usagold.com msg#: 38766) Circuit breaker day? Red everywhere east.Momentum badly broken.Cisco's turn?Games over.Release the golden prisoner. Black Blade (10/11/00; 04:16:10MT - usagold.com msg#: 38765) RE: Turnaround I think you got the job! At the BLS that is ;-)I wouldn't have come up with that in a million years. That's really good - cheers - Black Blade Zenidea (10/11/00; 03:30:58MT - usagold.com msg#: 38764) Randy ( sitemaster) Many thanks my friend and infinite blessings for taking this initiative. Such a spontainious email , warms the heart ! .You trumped for me the pick of aussie inviting passwords and I am confidentialy smileing from ear to ear . Cheer's. wolavka (10/11/00; 03:21:25MT - usagold.com msg#: 38763) swiss franc see some resistance at 5830 in dec , than watch out. not investment advice. Parsifal (10/11/00; 02:34:40MT - usagold.com msg#: 38762) M3 chart going vertical: timing http://www.piraz.com/wmrn.htm Thanks for the link, Mr. Gresham.Looking at the M3 Money Stock chart at the above link, I see several inflection points at which the rate of acceleration increases from <= 0 to > 0 (2nd derivative turns positive). At those points, the curve starts to behave like the points in a parabolic curve on their way to going near vertical. It looks like the 2nd derivative always turns negative (rate of acceleration slows or turns negative), but the inflection points appear to be followed by segments of increasing length in which the rate of acceleration remains positive.When the M3 chart goes near vertical, we are in uncontrolled hyperinflation, no? Many of us have our wealth safely stored in physical gold. But it is natural to ask when the POG will explode. (I sure do need the POG to go to $30,000!) So, I ask myself when that will be. The M3 chart may provide clues.It's easy to see that a major change took place near Jan 1995 (Robert Rubin at the Treasury?). The curve, overall, is not necessarily parabolic. However, the further the curve is traversed, the more it acts like a parabola, the steeper its slope, and the more frequent its inflection points that result in longer and longer segments in which the acceleration is positive. I cannot tell from the chart, but it appears that inflection points previously occurred more frequently, but resulted in shorter segments in which the rate of acceleration was increasing. Perhaps that indicates some efforts to suppress natural behaviors that later self correct?Making a rough guess as to when the POG will take off (go above, say $2000 or higher), and pegging the big POG increase to US hyperinflation (which would show on the M3 chart as near vertical), it looks to me like it's going to happen by late spring 2002 at the latest, and quite possibly before that. But things might change. I'm just guessing. Parsifal Turnaround (10/11/00; 01:42:48MT - usagold.com msg#: 38761) Pay No Attention to that Barrel Behind the Curtain Black Blade (10/10/00; 22:35:18MT - usagold.com msg#: 38751)"--API: US distillate stocks down 3.310 mln barrels in latest week--API: US PADD 1 reformulated gasoline stocks +1.0 mln bbls--API: US gasoline stocks down 936,000 barrels in latest week…Black 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 andmixtures of gasoline to meet EPA mandated clean air policies. …In short, look for higher - maybe much higher petroleumprices going forward. This has to show up in inflation - CPI/PPI notwithstanding."Well now, Sir Black Blade, this depends on what the definition of "is" is.Aren't you neglecting the incredible advances in barrel technology, particularly in the past few years? Cutting-edge barrels, using the latest in high-tech materials, coupled with the acceleration of productivity gains at barrel-fabs deliver end-to-end functionalities while maximizing compelling convergences that embrace scalable metrics for deploying turn-key supply-chains. Increased labor productivity has directly limited the rise of unit barrel costs. This good inflation performance, reinforced also by falling barrel prices, in turn has fostered further declines in inflation expectations over recent years that bode well for pressures on costs and prices going forward. More intriguing was the remarkable surge in barrel technology investment after 1993, which suggested a marked increase in the hedonic barrel deflator rates of return on the newer technologies.The acceleration in barrel productivity owes importantly to new information technologies. Prior to this IT revolution, most of twentieth-century business decisionmaking had been hampered by limited information. Owing to the paucity of timely knowledge of customers' needs, the location of inventories, and the status of material flows throughout complex production systems, barrel businesses built in substantial redundancies.The global village has been an ever-shrinking community of fellow-travelers, especially since I invented the internet. As the peoples of the world grow closer and engage one-to-one supply-chains, distances get smaller, which means less gasoline and diesel is needed to travel from one place to another.Forward sales of benchmark 10-year T-Barrels on the books of the Strategic Barrel Trust Fund will reinvent mission-critical relationships for our children's heating ands transportation needs, assuming they engineer transparent relationships and have their proper papers in order.These developments have created a broad range of potential innovations that have granted firms greater ability to profitably displace costly factors of barrel production whenever profit margins have been threatened. Moreover, the accelerating use of newer technologies has markedly enhanced the flexibility of our barrel productive facilitiesThis has confirmed the earlier indications of an underlying improvement in rates of return on the newer barrel technologies and their profitable synergies which generate dynamic metrics and deploy leading-edge deliverables with the existing capital stock of barrels. SHIFTY (10/11/00; 01:05:16MT - usagold.com msg#: 38760) Ponzi and the fat lady A quick check of the ponzi shows 6,882.47 for Tuesday 10/10/00. That's still 68.94 ponzi points higher than it was on 4/14/00 when it dipped to 6,813.53. I think its going to hit a new low today.:)Is that a fat lady I hear warming up in the distance?$hifty SHIFTY (10/11/00; 00:28:12MT - usagold.com msg#: 38759) Asia/Pacific http://finance.yahoo.com/m2?u Nikkei 225 down -314.15 -1.98% Lots of red ink in Asia tonight.$hifty Giovanni Dioro (10/11/00; 00:23:55MT - usagold.com msg#: 38758) Presidential Elections and the Equities Markets I am almost getting the impression that they are engineering a slide in the equities markets to aid George the Third to get into the white house.As we know a deteriorating stock market and economy can make the general public disgruntled towards the incumbent party, and the NASDAQ's big drop over the past month or so may very well be having this effect of decreasing the support for Gore, and in turn increasing the support for George the Third.I have thought for many months now that they would put a conservative in the white house, crash the markets, and then as a result, america would be begging for a left wing radical commie democrat for the next election. A little modern day Herbert Hoover to Franklin Day-Lah-no Roosevelt, if you think history will repeat itself.And if that is the case, who will be the FDR of the 21st Century? Aristotle (10/11/00; 00:23:46MT - usagold.com msg#: 38757) Taurus -- I didn't realize you shared the author's opinion, otherwise I would have been more diplomatic expressing my opposing viewpoint A lesson for me learned the hard way--I shouldn't have said the author fell on his face at the point where his own view differed from the Greek scholar. To say he was simply wrong would have been more tactful.You suggested that you and I are perhaps actually saying the same thing but in different words. My perception to that is a definate "no". If you were left with that impression from my (10/10/2000; msg#: 38672), then I apologize for the ambiguity in my poorly crafted post.I don't know where to begin in showing the difference in our positions, so I'll just start with the first point of yours and work through your post to voice my differences wherever it seems most effective to do so. But at the very least, I encourage you to scroll down to my original post for yet a second honest attempt at deciphering my unusually succinct commentary.You said ----"Prior to the circuit board era, gold had NO industrial value. Only ornamental value. To coat the dome of a mosque with gold leaf ... 'Conspicuous consumption' if ever there was such."-----Why do you focus on "industrial" use in determining what the old "commodity usage value" for Gold might have been? Gold was valued for its use in dentistry long before circuit boards came along. And this aside, if Gold had no old world practical usage as you imply, then why would the gilding of a mosque be characterized by yourself as "conspicuous consumption"?? Since when is it conspicuous to find an outlet for a pile of unwanted inventory? Surely it isn't conspicuous consumption to cover a roof with shingles, or to cover a wall with paint. Wouldn't you admit that Gold would in this old world sense enjoy, at a minimum, the same type of "industrial" valuation as shingles and paint? And at this point, I would also encourage you to reevaluate your penchant to discount the "ornamental/jewelry" usage value of Gold. Just because it may seem impractical or frivolous to you does nothing to alter the motivations and real courses taken in our human history.After drawing attention to my premise where I said, "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," you emphatically indicated that you did not agree that this was self-evident. Your casket analogy did not make your case. Nobody reading this forum would think for a second that a burial casket was as useless as you try to imply that it is. I have yet to attend a funeral without one in regrettably full use. You seem to have overemphasized the inevitable and focused only on the fact that after the funeral is over and forgotten, the casket would *become* useless. That is a different matter entirely, and is not what the family is paying for when they buy the casket. Given this after-the-fact mindset, wouldn't you also say that the food you are about to buy for lunch is also useless, inducing a paradox that people are actually willing to pay for the "inevitable sewage"?It is important that you come to an understanding of this premise because it is fundamental in understanding the evolution of monetary usage during the development of human civilization.Putting that issue aside, I believe the core issue you are trying to convey is articulated in your words -----"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."Let's consider soapscum, or to make this more interesting, lets consider the residual froth that clings to the interior of your pint glass after enjoying a Guinness Extra Stout. Either of these are about as useless as a commodity can get. In fact, they are SOOOOO worthless that I would think, according to your premise, that they would enjoy tremendous value as money, especially after being scraped free and conveniently collected into little jars for portability and divisibility. But no. Anyone who followed my earlier writings would know that these commodities would never be brought into serious evolutionary contention for monetary usage by the marketplace.On the first portion of your point, you will also want to give consideration to the merits of the notion I expressed in my earlier post whereby the entrenched utility of a commodity in use as money by a highly developed marketplace becomes so much more highly-valued for that usage than for its function in any other usage that any subsequent commodity effects (which would in this case be true examples of "conspicuous consuption"--using Money for decoration or industrial plating) would be greatly muted. This disparity in usage values seems to be the primary source of your specious conclusions about money and its underlying value. In a modern sense, does the occassional commodity use of our currency for such "conspicuously consumptive" use as bathroom wallpaper affect its monetary value? If you think about it, whether we talk about monetary Gold or dollars, putting a quantity into "industrial use" would appear to the marketplace as indistinguishable from putting that same quantity into savings.On a final note, I'm puzzled by your comment-------"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?"-------As I'm sure many long-time visitors here will attest, I have gone to such lengths to shine light on "truth" that I have frequently taken unpopular stands that argue at length AGAINST some of the popular preconceived notions of the "typical Goldbug." However, I'm confident that everyone who has troubled themselves to read any small number of my posts has come to understand that when I take such postions, it does not mean that I am anti-Gold, but rather attempting to facilitate a more fundamentally grounded understanding of Gold's uniquely important role within the monetary context of economic affairs.Gold. Get you some. ---Aristotle SHIFTY (10/11/00; 00:12:17MT - usagold.com msg#: 38756) JavaMan your post # 38720 I enjoyed your link. funny stuff.$hifty Peter Asher (10/11/00; 00:01:37MT - usagold.com msg#: 38755) Why does this not surprise us http://news.excite.com/news/ap/001010/19/risky-business-loans Problem Loans IncreasingOf a total $2 trillion in large business loans this year, 3.3 percent, or $63 billion, were considered troubled - up from 2.0 percent in 1999 and 1.3 percent in 1998, the lowest level of the decade. ViewYesterday's Discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.