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ARCHIVED DISCUSSION FROM 2/18/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Peter Asher (2/18/2001; 21:48:01MT - usagold.com msg#: 48529)
According to Slingshot --Gold
Maybe this will entice panda to post again. ):-)
Thursday October 12, 2:09 pm Eastern Time

Press Release

Jewish Temple Coverup Video Released

LOS ANGELES--(BUSINESS WIRE)--Oct. 12, 2000--To
aid public understanding the growing violence in
Jerusalem's Temple Mount area, ``The Temple Mount
Dilemma'' documentary video was released Thursday
from Ken Klein Productions.

Today's escalating Mid-East crisis is centered around the Dome of the Rock
and the attempted resolution of the historic Palestinian and Israeli battle
for the Temple.

This 30-minute documentary includes background on the historical
significance of the Temple, an exclusive interview with Rabbi Richen, of
The Temple Mount Institute and the chief archeologist on the Temple site --
who both claim Palestinians are destroying Israeli ancient artifacts.

The Temple Mount Institute is committed to the belief that there will be a
third temple built on the existing Temple Mount. The Temple Institute is a
religious order committed to restoring temple worship instruments and the
officiating Jewish priests.

According to the Rabbi Richman, ``Nine months ago the Palestinians began an
aggressive program of vicious revisionist history on the Temple mount site.
Under cover of night Palestinians began to illegally excavate hundreds of
tons of Israeli artifacts below the 'Mosque of Asqa' in the stables of
Solomon. Their explanation: they were widening a door so more Moslems could
go down to pray. This is not true.''

The chief archeologist at the temple site confirms Rabbi Richman's
testimony stating, ``The Moslems are destroying precious artifacts from
both the first Temple and second Temple in an attempt to eradicate
archeological proof that validates Jewish territorial rights. The
excavation rubble has been cast into the Kidron valley and garbage dumps
around Jerusalem.''

Although Jewish ambassadors are aware of this crime against Israel, Prime
Minister Barak has kept this quiet because of the sensitive nature of the
Temple Mount.

According to Producer Ken Klein, ``Mr. Barak is fearful that if the
knowledge of this destruction becomes public, it would destroy the Mid-East
peace process. But a crime of this magnitude and nature cannot be hidden --
and I have the exclusive video offering proof of a major factor behind the
recent violence in Jerusalem.''




Hill Billy Mitchell (2/18/2001; 21:26:44MT - usagold.com msg#: 48528)
Our Metaphysical Medium of Exchange
FredBear @ # 48441

Please allow the following excerpt from your post:

"First, as always, we need to define terms. Inflation is defined as "an increase in the supply of money resulting in an increase in the cost of goods."

HBM comments:

Sir, your post stimulated my appetite for theoretical discussion. I would like to make a few comments in the area of economic theory, not so much to challenge anything you have offered but to simply stir things up a little in hopes of stimulating further theoretical discussion in this area. The talking heads including high profile economic professors and Federal Reserve authorities continually ignore the inconsistencies with theory that are often contained in their verbiage. To put it bluntly, what we most often hear is propaganda couched in politically correct language, the purpose of which is to hide the truth rather than to expose it.

These dignitaries do what they do intentionally, the supreme example of which is Greenspan, himself. Now you and I fit in an entirely different category. Our desire is to find the truth and to move it into a well-lit place where it can be plainly viewed by all. In so doing we must be very careful to stay within established economic theory, else our credibility falls by the wayside and our intended purpose is thwarted. Please take no offence at what follows:

You are correct in that we must first define the terms before entering into discussions of theory, however if we were to begin with an erroneous definition we would tend to end with an erroneous conclusion. Now I am not saying that what you have concluded is necessarily in error. I am just saying that if the definition of inflation is imprecise a shadow might be cast upon any conclusions drawn.

Let me offer this definition of inflation: - INFLATION – An increase in the rate of growth of a generally accepted medium of exchange which exceeds the rate of growth of those ITEMS available for exchange via the medium.

I use the word ITEMS in place of the usual phrase, GOODS AND SERVICES, because, as you correctly put forward, the world is in a continuous state of change, and the rate of change has been accelerating rapidly. The phrase, GOODS AND SERVICES, appears to omit equities and derivatives of all sorts. The reason for this is partly due to the fact that modern mediums of exchange appear to be and are often called paper, when in fact the better expression would be fiat.

Let me elaborate. If our medium of exchange is paper, then other pieces of paper denominated in our medium of exchange appear to be hybrid forms of that medium. They seem to be, simultaneously part of the medium and part of the items of exchange. A logical approach defies the possibility. Therefore I contend that the medium of exchange within a closed economy cannot simultaneously be one of the items exchanged. They are mutually exclusive entities. By the phrase, "closed economy", I mean the "little bitty working republicans and democrats and libertarians" who must cross international boundaries in order to consume in a currency other than the legal tender of the country in which they presently reside.

Now the truth of the matter is that our medium of exchange is not paper but rather it is nearly absolutely fiat. (I use the term, nearly, in deference to Sir Holtzman, who takes the position that there are no absolutes, or at least he doesn't care if there are any. {Smile}). Our medium of exchange appears to be spiritual rather than physical. No, that statement is too daring. Let me say that it is metaphysical in nature (of or relating to the transcendent or super sensible, supernatural, highly abstract or abstruse). It is more an entry on the books of the imagination than a physical or electronic debit or credit to a physical set of accounts. For this reason we find Greenspan, on occasion, admitting that he is dealing with something that he does not fully understand.

Equities, paper contracts, and derivatives of all kinds are not part of the medium of exchange. They are either items of exchange or they are derivatives of items of exchange. The point I am trying to make is simply this: If these ITEMS are a part of that which is exchanged then they are part of that which is being chased by our ever-increasing supply of money. They are not part of the supply of money, as our "dignitaries" so often want us to believe. I would even submit that they are not even pseudo money or "super money" as the good and wonderful and informative writer with the pseudo name, Adam Smith would have us to believe.

Please allow to me drift along a tangent for a moment. Let us discuss the "word", medium, and the phrase, "medium of exchange". Whether the subject is physical, meta-physical or spiritual, the word or phrase generally conveys the same idea. The idea of something moving from one sphere or place to another entails the requirement of a vehicle or transportation device to facilitate the relocation.

There is included along these lines the idea of human communication with the dead or at least other spirit beings
through the use of a medium, a quasi-spiritual being, who facilitates the passage of thought and understanding to and from the natural world to and from the spirit world. The Jewish and Christian bibles forbid this sort of pursuit. The Jewish idea of a mediator between God and man becomes the basis for the Christian position that there is only one mediator between God and man, the God-man, Jesus, the Messiah.

I go along this line to show the parallel, which re-enforces my contention that our 'fiat' money seems to be more supernatural than physical. The use of the words, medium and mediator, raise the eyebrows. Could it be that man cannot quite discover the true nature of the elephant due to spiritual, or should I say supernatural, blindness? When we touch the tail we think we are dealing with a snake. When we peruse the trunk we think we are handling a tree, etc. Whatever the medium of exchange seems to be to us at any given point in time governs our human actions in dealing with it. And so we have this problem that we (Greenspan and company included) do not quite know what we are dealing with due to our spiritual or supernatural blindness and are groping in the dark and trying to manipulate it, oblivious to the fact that it is so large that it could inadvertently step on us and we would be no more.

How huge is the problem? We do not understand the true nature of what we are dealing with. We do not know how much of our currency is lying dormant in overseas reserves. We do not know the rate of speed at which our currency is moving through our economy nor its susceptibility to an abrupt change in that rate of speed. And we certainly would not be able to compete with the rest of the world for our own goods and services should the rest of the world decide to spend their overseas reserves in our market for something of real value, something which we produce other than equities or paper derivatives.

I read this post to my wife, Judy to get her reaction. I wanted to see how she, not being greatly interested in economic theory, would react and if it would reach her in some way. She listened carefully to me as I read the above and responded as follows:

"Economics come down to this. You've got something that I want and I have to figure out what I have that would motivate you to exchange for what you have for something I have. It really comes down to exchanging needs and wants. What makes it complicated is that men surround it and bury it and dig it up and wallow it around with words. If men would just shut up and do it, it would not get so complicated." She continues:

"It's the most amazing thing. Last night at the furniture store I wanted a chair and they wanted my little pieces of paper. I was glad to part with my little pieces of paper to get the chair and they were glad to part with the chair in order to get my little pieces of paper. Now what's complicated about that?" (End of quote)

I tried in vain to convince her that those little pieces of paper were tokens of her stored production. That those little pieces of paper were not part of the items exchanged but that they were only the medium of the exchange of her stored production from her labor (she works very hard in our business) for the production of some other entity. I wanted her to see that the little pieces of paper were only getting the job done at the moment and that we could not be guaranteed that the little pieces of paper would as efficiently perform the same function tomorrow. You see she looks upon the little pieces of paper as items of exchange rather than the go between, the medium. It does not matter to her (she is an apathist in this area) what the paper was yesterday or will be tomorrow. Her assumption is that the paper will always function this way. If it works, do it. I might mention that she likes having lots of the green stuff around and piles it up as best she can no matter how much I howl. She almost despises the little round yellow things that she has safely tucked away because she cannot spend it without converting it into the little pieces of paper first. Yet on more than one occasion I have told her to go ahead and exchange it for paper and spend it for whatever she wanted or needed (bluffing of course). On each occasion she first asked me how much she could get per ounce. When I tell her how much she can get she always replies, "No way, that stuff is worth more than that or we paid more than that for it. Forget it, I'll wait, but when the time comes I am going to spend it, you can bet on that."

She says, "This complicating something so simple is a male thing." So what do I say? Nothing. We shall go along accumulating much less physical than I think we should, yet much more physical than she thinks we should. I suspect that our little compromise helps to keep me from going overboard on accumulation and helps to keep her from going overboard on consumption. One thing seems to be certain—once we get possession of the stuff she is in no mood to unload while the price is falling (to my great relief). My greatest concern is that she will not want to unload some of the stuff when it becomes over priced, yet still on the rise.

How does our personal conversation relate to the above? It proves that people get the medium exchange confused with the ITEMS exchanged. My lovely wife is right. It does get sort of complicated. Why do I feel that it is so simple? The answer -- Possibly because I am spiritually (supernaturally) blind.

Now that should clear things up once and for all. (Grin)

Respectfully,


HBM




Curious (2/18/2001; 21:08:52MT - usagold.com msg#: 48527)
Mr. Gresham # 48525 I can see why the mideast powers want Euros.
Look at the main products of the United States. Cars and trucks and heavy equipment that is also available in Europe and Japan, huge volumes of legal services and litigation and resulting awards and settlements, huge expenditures for corporate salaries, stock market and banking industry salaries and facilities, stock buybacks, and expensive retail distribution networks, retirements, taxes etc., a very efficient agricultural sector that will soon see hard times and increasing bankrupticies due to higher costs, lower prices from products they sell, lower production due to weather, natural gas shortages which cause higher fertilizer prices resulting in lower yields, a huge educational bureacracy that can not even produce high school graduates that can read, a nonfunctional political system where both parties have basically the same agenda except one is a little further left, etc. etc. etc. Perhaps their long term goal is less reliance on the dollar or to bail out before it crashes. Eventually the carrying cost on the $6 Trillion debt could become excessive if inflation increases and higher interest rates are required to keep the foreign money invested in US Govt. securities. If higher inflation, higher unemployment, and a loss of consumer confidence all happen at the same time and the value of the dollar declines drastically, the money could be repatriated quickly in a panic mode before the value falls further. If the foreign owners of dollars can see this risk, it would make sense to get Euros for oil. I am surprised that there was not more reaction to Iraqs plan to get Euros for oil they sell. Throw in dissatisfaction with how the US imposes its ideas on the world and the free ride that the US is getting from the balance of trade deficit along with the advantages of the dollar standard used in international trade and those overseas people are upset. If they panic, watch out below.

Curious (2/18/2001; 20:23:01MT - usagold.com msg#: 48526)
The Power of Gold a new book by Peter Bernstein copyright 2000
This book is a well researched and footnoted book by an economist with the zest of a historian that gives an excellent history of gold from Biblical times to current times. He discusses England going off the gold standard. I haven't read it all yet but it does go into the passions, strategies, Gold Standard, policy implications, background etc. The author mused that "The joke is that nothing is as useless and as useful all at the same time" (as gold). The book was published by John Wiley and Sons Inc

He is the president of Peter L. Bernstein Inc., his own economic consultancy to institional investors. One of the main points of the book is the passions that gold generates which leads people to react. The reactions may be irrational but if theses reactions impact the market, they need to be considered in my opinion.

Some of you may already be aware of the book but with the gold market acting negatively, this may help explain the long range potential of the golden ones and help make you feel better about it. Enjoy.

Mr Gresham (2/18/2001; 20:15:37MT - usagold.com msg#: 48525)
Attempt at Summary & Questions for Trail Guide
Sure, the House of Saud wants to lead the Arab world, but not at war. Only to maintain the delicate balance of its control at home, where radicalization threatens it. Peace and prosperity are what it needs. As I wrote before, it strikes me that, most likely, the Sauds probably want to be European residents (and not Texans --smile).

Digesting Trail Guide's posts of Thursday and Friday, #48286, #48325 and #48375 replying to raspberry, Mexpat and Chris Powell.

#48286. Paper and physical are "two separate markets" and one temporarily holds the other down. And, TG, I think you are saying that there are two widely separated physical demand groups -- One is too BIG to play in the price-setting mechanism and still get enough of what they want. And the other (us) is too small now to make a difference. You're trying to get the small ones into a single and appropriate market where they can have an effect (and stop giving bigger guys their money.) "Stop banging your heads against a wall; you'll feel better!" ("Besides, the wall's about to collapse anyway...)

So, Trail Guide, when some of the "big boys" play the two-sided game, taking the Bugs' margin money and buying physical with it, they must be COUNTING on a force majeure cash settlement at $400-600 while holding their physical on up into the thousands, right?

The wealthier, more conservative ones just ride the game by buying the physical as it comes available (kind of like an IPO from your favorite broker?)

My questions: Who gets the physical inventory put into the Comex "store window" (a pretty high priority item for paper sellers), and under what sequence of events would they stop that? ("Game's up") Does LBMA have any physical in-house, or is that those Swiss vault certificates, or something else? What other paper venues are there besides those? Do OTC bank puts/calls count, as those would be mostly going to larger more sophisticated "non-Bugs", wouldn't they?

#47986: The ECB/Oil story. If I can summarize my thoughts of looking past the transition to Euros: the oil guys (Saud family types) want some gold going forward, but looking far ahead, more want the things gold can buy, in Europe and around the world. If they can be there at the formation of the Euro, and be seen as a supportive engine for the Euro economy, they will be generously provided with all they wish for many generations to come.

They've received various brush-offs from the Dollar deal, and they were invited to sit down and discuss "mutual interests" with others similarly treated. Putting their strengths together, they saw they could go directly from oil to Euros (and European assets) with MOST of their oil production, without needing to pass through the thin gold markets, IF they did not crash the Fiat currency system of the world in general. (Their gold would tide them over, sure, but they would be picking their way through the economic rubble of the West, rather than buying going concerns.)

Fiat is what the working populations of the West will work hard and produce for (and buy oil with). Why put them off a good thing? They're sure not going to welcome an Arab boss coming into the depressed factory (picture Poland in 1990) and saying "I bought you for pennies; now get to work." Stay behind the scenes and keep the existing mechanisms going; they have value to new potential owners.

Why not hold stable Euro-earning bonds and stocks (they must be thinking) rather than entirely a stock of gold?

My question: Have Arab oil producers mostly diversified out of US bond/stock holdings already? Are they mostly hedged against dollar decline? Are they ensured that their oil earnings won't get lent out to deadbeats like in 70s, who won't get bailed out by Washington this time?

So, CBs have patiently supported dollar these decades until they understood how to and succeeded in building something that could replace it, and be a Profit Centre in their interactions with oil. Something they had envied seeing U.S. doing and profiting from...

(U.S. has probably said "OK, so you've gotta support us awhile longer; we're gonna stick it to ya these last couple years with money supply out the wazoo. And maybe you'll take us out, and maybe ya won't; we'll see, but we'll suck the last we can out of this franchise either way.")

"The ECB is now, outright, selling some of its actual reserves. -- (Trail Guide)" Have we seen this in the stats? Wasn't that in this week's posts somewhere?

The "bang for the buck" that spikes gold into thousands will come in large part from that offshore reserve cash no longer needed, and ECB saying "might as well brighten up the gold vault a little while we got it..."?

Europe's "Master Stroke": Does the "negotiated into EMU was gold's place in the world" show in any of the founding documents? In my mind, I associate that with Mundell's Nobel Award (a signal if ever I saw one), but is it in writings anywhere at the Euro websites (very few books I've seen listed on it)?

Euro doesn't have to compete with gold, just has to "outrun the Dollar." And let oil guys send their kids to Oxford and Sorbonne and Hard Rock Cafes around Europe.

Question: What is the South Africa role, we haven't discussed that much there? Sounds like Bill Murphy ended up meeting all those guys? (Maybe he should just start up the "Bill Murphy African Gold Fund" -- I'd buy a bit.)

Again to ask, the paper writers, when the bullion house structure goes "outside its dollar price band", are counting on a force majeure cash settlement, aren't they? Otherwise, they're now just using one credit card to make payments on another, digging the hole deeper? Must be a bailout assurance in there...

#48375: I loved that "flock of turkeys standing behind them" remark! What a perspective! Thanks, again.




Journeyman (2/18/2001; 19:31:50MT - usagold.com msg#: 48524)
Gold, Government, and "Gambler's Ruin" @Sir Randy, ET, ALL
http://commdocs.house.gov/committees/bank/hba50146.000/hba50146_0f.HTM#46

"... that an inevitable solution to the untenable problems and
imbalances arising from the natural forces imposed by market
discipline would be far superior than any alternate solution
which might be prematurely brought about by forcing the hand of
legislators and regulators." -Randy

Hi Sir Randy!

I think ET said it pretty well in his 02/17/01; msg#: 48451.

GATA, while "right" will have little direct effect on TPTB.
Assuming our assumptions here are essentially correct and that
there are indeed manipulations of gold thru paper gold and
involving US PTB attempting to quash gold's barometer function
relative to the dollar, exposing this could be dangerous to Bill
Murphy's health. But it wouldn't hurt market forces.

Any government action to reduce it's own machinations in this
area is as unlikely as it is that such a reduction would reflect
badly on "free market" forces - - - which, if governments are
indeed machinating, we clearly don't have.

And of course, especially in the long run, relatively free market
forces (_without_ the influence of governments) always make
"better" decisions than does "central planning," especially of
the more clandestine sort we're apparently dealing with in the
case of gold.

One question might be, "Can quasi-government action effectively
'deflate' this paper gold bubble that it caused?" One answer
might be, "Well it could, but they never seem to get it right."
The reason they indeed rarely get it right is that planning
future behavior requires accurate forecasts, and as Yogi has been
so kind as to enlighten us, "Prediction is very difficult,
especially of the future." This difficulty plagues TPTB just as
much as it does the rest of us.

If you listened to Greenspan's latest Q&A with the Senate Banking
Committee, time after time you heard them admit they don't put
much stock in their own economic forecasts. And, especially when
using fiat currency, monetary and fiscal policy, among others,
depend on accurate economic forecasts.

As a professional gambler, which many of you are too, (mhchuck
megatron, Panda, Hill Billy, Sir Peter Asher, Mr Gresham etc.) I
know that there is no such thing as a sure thing before the fact.
That's why most investment advisers suggest you diversify. But
few of these advisors know the correct name for the reason this
is good advice. When was the last time your investment advisor
warned you against "gambler's ruin?"

Gambler's ruin is a well developed subject area, especially among
gamblers and those who seriously study risk-taking. There are
relatively simple equations to calculate your odds of gowing
broke from following this or that bet protocol. But you don't
need any math at all to understand "gambler's ruin." Given the
uncertainty of forecasts, the simplist expression of "gambler's
ruin" is "don't put all your eggs in one basket."

This is the main reason government (and quasi-government) action,
by it's monolithic "one size fits all" nature (equal protection
under the law and "fairness" considerations, etc.) is highly
undesirable. Governments' monolithic decisions - - - for
example, should we raise interest rates OR lower them - - -
subject ALL of "it's" citizens to the EXACT same win-OR-lose
outcome of it's "one size fits all" gambles. We're ALL
subjected, whether we like it or not, to government's gambler's
ruin.

This "all or nothing" nature of government action contrasts
markedly with multi-lithic market processes where folks with
differing opinions (shorts vs. longs for example) not only bet
against each other on opposite sides of the same proposition, but
make "bets" in myriads of other different ways.

As a result, many more bases are covered, and while some segments
lose, some win. Thus the market process avoids "gambler's ruin
and the over-all economy operates much more smoothly with fewer
ups and downs and the "amplitude" of the swings which do occur is
damped.

As Greenspan says:

"If you are on a gold standard or other mechanism in which the
central banks do not have discretion, then the system works
automatically -to US House, July 22, 1998

Thus a gold standard, where things are automatic, makes forecasts
much more accurate since they don't include arbitrary decisions
proceeding from the arbitrary synaptic activity of central
bankers, but, rather, from the staid and un-exciting physical
constraints of gold mining.

Thus getting governments out of markets (providing they don't end
up using "getting out" as an excuse to get MORE involved) no
matter how it's done - - - GATA, court action, attrition,
revolution - - - would be an improvement. Then we'd have free-
market gold, less government interference in markets, and the
world might then avoid the mother of all gambler's ruin.

Regards,
Journeyman


Horatio (2/18/2001; 19:05:57MT - usagold.com msg#: 48523)
Panda
Panda, sorry to see you go.Would you post an email address or let us know if you decide to post elsewhere?.

slingshot (2/18/2001; 19:05:11MT - usagold.com msg#: 48522)
Lost Two Today.
The Forum today has beaten itself up. Controversial comments and off topics have ruled the day. The Forum has lost its senses. To some, yes. To the majority,no. It just goes to show us it is alive. What disturbs me most is that I did not get an answer from Pandagold. Would a cornerstone be a real issue to him? Let me be so bold and answer it for him. Randy, please bare with me as I tie this to gold. The cornerstone is a real issue to you. Unlike Sharon, the stone
is eternal, something to see. But, more what it represents.
The palestinians Can not allow this. It would give Israel
credibility to claim the Temple Mount. This Objective veiw could start war. One religion against another. Oil would be disrupted. Would the Saudis still be friends with the West if their brother went to war. Would they raise the price of gold to oil. Completly stop oil to the West. When our industries have no oil to produce our luxuries, what happens
to corporate profits. Down you say! Lay some people off.
When some are laid off. Investors look to safeguard wealth.
Flight to buy physical gold. Demand pushes up price of gold
and we are happy the C.B's depressed the price so we could buy plenty. Yea, Mundane. How many do you talk to each day have figured that out. If they did they would buy gold.

So, I'm out on the lunatic fringe. So be it.
Keep your comments coming.
Slingshot

Bonedaddy (2/18/2001; 19:05:10MT - usagold.com msg#: 48521)
Defending the right to own GOLD
http://www.thelibertycommittee.org
February 13, 2001

Dear friend of liberty,

House Concurrent Resolution 23 (H.C.R. 23) was submitted Thursday,February 8, 2001 by Representatives Ron Paul (Texas), Virgil Goode(Virginia), Walter Jones (North Carolina), Roscoe Bartlett (Maryland),and John Duncan (Tennessee). H.C.R. 23 expresses "the sense of Congress that President George W. Bush should declare to all nations
that the United States does not intend to assent to or ratify theInternational Criminal Court Treaty...and the signature of formerPresident Clinton to that treaty should not be construed otherwise."
H.C.R. 23 was referred to the House International Relations Committee of which Representative Paul is a member.
Representative Henry Hyde (Illinois), the new chairman of the HouseInternational Relations Committee, recently stated to Insight magazine(01/26/01), "I think that the defense of our sovereignty is one of the big issues currently before the International Relations Committee. This International Criminal Court [ICC agreement] that the president just
signed is an assault on our sovereignty. We would yield jurisdiction for criminal prosecutions for our citizens in foreign courts. I think that would be a serious mistake." Mr. Hyde continued, "Surely there's a principle at stake, and the principle is whether we yield jurisdiction,
hence part of our sovereignty, to a foreign entity constituted not by American citizens under the U.S. Constitution, which protects society and citizens, but to a foreign entity over which we have no sovereign control."
Opposition to the United States subjugating itself to the International Criminal Court is mounting. President Bush, members of Congress, former secretaries of the departments of State and Defense, the current Department of Defense, public policy foundations, newspaper editorial
boards, and columnists are opposed to us yielding our national sovereignty; yielding our judicial system; yielding our constitution to an international tribunal based in the Netherlands.

Opposition to the International Criminal Court is mounting among the American public. Since launching our nationwide petition drive just a few weeks ago, 19,782 people have signed our petition addressed to President Bush. However, it's not just the American public. People from Canada, Indonesia, United Kingdom, Namibia, Brazil, Israel, and
Belgium have signed our petition. One gentleman from United Kingdom wrote, "You can help save the sovereignty of all countries."
Our petition drive to President Bush has already started. If you have not signed our petition, please do so now. Today, our drive to get H.C.R. 23 passed begins. Therefore, please urge your U.S. representative to cosponsor H.C.R. 23 today. You can sign our petition and write to your U.S. representative by going to clicking "International Criminal
Court." The text of H.C.R. 23 is posted there along with numerous items about the International Criminal Court.
Please sign our petition, if you have not already done so, and write to your U.S. representative urging him to cosponsor H.C.R. 23. Please ask family and friends to do the same.

Thank you for your help!

Kent Snyder
The Liberty Committee
http://www.thelibertycommittee.org

P.S. Please note that some new members of the U.S. House are still in the process of setting up their E-mail and Web systems. Your message to them can be printed for mailing.






HOOSIER GOLDBUG (2/18/2001; 19:04:05MT - usagold.com msg#: 48520)
PANDA,PLEASE RECONSIDER!
Always enjoy you posts! What if all posters like you leave the forum???????? Where will we get our education from then? Kitco? Yea right! Instead of staying off this forum, promise never to return to Kitco! You will be sorely missed and will weaken the impact of this forum!

Orville Goldenbacher (2/18/2001; 18:42:49MT - usagold.com msg#: 48519)
Pandagold
Panda, wish you'd reconsider. I always enjoy reading your posts. Best wishes to you.

OG

ET (2/18/2001; 18:33:57MT - usagold.com msg#: 48518)
Pandagold

Hey Panda - sorry to hear you are leaving. I hope you reconsider. You certainly bring interesting insights to the table.

Old Arab proverb - "When you go shopping for wisdom, visit every tent in the bazaar."

I've always enjoyed visiting your tent!

SALMON (2/18/2001; 18:33:24MT - usagold.com msg#: 48517)
@Panda


It is a sigh of sadness I breathe, not relief. As a regular reader and occasional writer, I am extremely sorry to see you depart this forum. I always looked forward to your comments that I found very well researched and informative. "Empires of the Mind" was particularly thought provoking and an interesting way of looking at things. I am sure there are more readers who would also like to continue to hear from you. Perhaps you might consider posting on the weekend on occasion?


Mr Gresham (2/18/2001; 17:22:24MT - usagold.com msg#: 48516)
Panda
Thank you for your companionship along the path of ideas. Much success to you, and DO return upon some day when we may celebrate it. Agreed?

Pandagold (2/18/2001; 17:08:07MT - usagold.com msg#: 48515)
Dzaijyan from Panda

You may all breathe a sigh of relief, no more will I grace your columns with my postings, and rub so many of you up the wrong way with my controversial comments, for which I do not apologise.

No one in particular has brought me to this decision, no men with dark glasses at the door, no member of the website hierarchy, (in fact, Michael paid me my one and only real compliment, he has great foresight, and one of the few that when he opens a book, he also opens his mind) no fellow knight.

I need to devote all my attention to this market. There is money to be made, I have proved it, and I do not deal in derivatives.

All the information I have given I stand by 100%, and use it effectively every day.

I wish you all well.


Tree in the Forest (2/18/2001; 17:00:05MT - usagold.com msg#: 48514)
Mideast issues: IMHO they do relate to gold and what's coming
http://www.wnd.com/news/article.asp?ARTICLE_ID=21221
Some posters have expressed an interest in mideast issues and the plight of the Palestinians. The above link is a very interesting article written by Joseph Farah. Mr. Farah is the editor and CEO of WorldNetDaily. He is very knowledgable on these issues and he is also an Arab. If anyone is interested, he wrote a follow up article on Jan 10, 2001 and I'll post the link if you like.

Tree in the Forest (02/18/01; 16:08:05MT - usagold.com msg#: 48513)
Mr. Gresham, Belgian
Mr. Gresham: I agree very much with all of your posts and with Mr. Maybury. If you haven't done a search on "red mercury" you ought to. Here is your nuclear "sampler" if ever there was one and I am afraid we will have a sample or two someplace soon. Regarding leveraged physical, it does exist for gold but when one looks at all the fine print in the contract there are numerous caveat emptors including force majeure, counterparty risk etc. Taking possession of physical is best if what we think is going to happen, happens. I have always assumed that "oil" has taken delivery of considerable physical gold but not thru Comex. Comex is fine for the little guys, jewelers etc. "Oil" is so awash with petrodollars that they could never do anything serious on Comex. They could take delivery on everything in every Nymex warehouse including all metals, all ag commodities etc., burp and then say "What's for desert?" They must be getting physical from mines directly which they have interest in as well as buying forward contracts etc. PS: I believe that the Mideast conflict is extremely germain to what is about to happen vis a vis gold. I don't think this is off topic at all. Thanks for your very interesting and informative opinions.

Belgian: No cabal defectors amongst us? Are you sure? There are 2 or 3 posters here that I have always assumed had at least some inside info, no?

Chris Powell (02/18/01; 15:40:46MT - usagold.com msg#: 48512)
Chapman essay on gold price manipulation and GATA
http://groups.yahoo.com/group/gata/message/663
More evidence piles up about the culprits.

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714 (02/18/01; 15:31:32MT - usagold.com msg#: 48511)
Thanks, Mr. Gresham...
...no doubt oil can be sold for any currency, or even gold for that matter. I do not take issue with that. For instance, we already know that the Iranians currently accept yen for their oil. I only began to study these matters upon closely examining Another's old Kitco posts, looking for some explanation of what was happening to the gold market. It was then, upon studying this background material, that the facts of oil-for-gold trade began to emerge. I laud Another and FOA for their efforts to return us to a more honest currency, but I remain critical of their portrayal of this oil-for-gold business. If we are to get investors once more interested in gold as a financial asset, we need to shed these fringe theories and misrepresentations.



Mr Gresham (02/18/01; 15:26:13MT - usagold.com msg#: 48510)
"Too early at Gresham's party...."
I've had another thought lurking through the week about being "early to the party".

FOA has been gently prodding us toward learning about the idea of wealth preservation as a corrective to the high-spending, high-debt, high-paper, high-everything-except-common-sense '90s, '80s, heck, even '70s (when I had zip).

Easily-gotten wealth is easily lost again. Hard-worked for wealth is more carefully measured against that which it buys, as all retirement savings should be.

If gold surges, and we gain great dollar value suddenly, our minds may not quickly enough arrive at the seriousness with which we might ultimately want to take our good fortune. In short, we might blow it.

This period of watching and waiting together, without the instant gratification we sometimes think we would like, may be an essential "burning in" of an appreciation for the wealth we may someday possess. A sense of responsibility we might pass by otherwise. Part of "growing up" financially in these times when there seem to be no grown-ups around.

Mr Gresham (02/18/01; 15:14:19MT - usagold.com msg#: 48509)
714
Well, I'm not sure I'm so interested in what oil has been sold for in the past, or even the present. I've had this little pet peeve question lurking from my Econ 305 background (for which Oro probably has a corrective observation more quickly than I could piece it together from my past year as an Economist-in-Rehab), but it involves the word (I believe) "fungibility".

In other words, if all currencies are exchangeable, it doesn't matter what unit oil was originally sold for, but what final arrival currency (or good) it is held in for the longer-term.

Oil can be sold for dollars, and gold or Euros bought. Oil can be sold for Euros, and dollars or gold bought. If it reposes in a tanker off Kuwait, then currencies are sold, and capital assets price-enhanced. The final item would receive the price support, not the one it has passed through only as an exchange medium.

If SA leaves dollars in Chase NY, then dollars are supported. If it converts to pounds in London, then dollars are sold. Etc etc. What am I missing here?

714 (02/18/01; 15:11:56MT - usagold.com msg#: 48508)
oops...
...may I add that after printing the odd-numbered pages, FLIP THEM OVER when you load them back into your printer, so that, for instance, page 2 will be printed on the back of page 1.

Details, details...


Belgian (02/18/01; 15:10:06MT - usagold.com msg#: 48507)
Too early at Gresham's party....
Yes, I'll be glad to pre-taste the choice of golden snacks.
But your invitation to the party wasn't mentionning any reason (POG-rise) for having a party (Gold reunion). I came with a golden suit and all the other guests were dressed in paper fashion. Yeah, yeah...rain started ...and I had LOL with those naked bodies, running for cover (default). But what if we are in for another drought (32.000 ton-years) ? What if abundance of plastic (M3) is provided freely by the host ( A.G.)? I'll have a swim in the (debt) pool.etc..

Central Banks...here I come. Ohhhh boy, are they going to be impressed. Hmmmhummmm. I'll do my best.

714 (02/18/01; 15:04:44MT - usagold.com msg#: 48506)
Mr. Gresham...
...I suggest printing out the .pdf file after saving it to your harddrive. Adobe Reader has a nice feature where one can print the odd-numbered pages, then the even-numbered pages. Simply print out the odd-numbered pages, then without changing the order of the printed pages, load those back into your printer and then print the even-numbered pages. You'll then have 35 pages of printed material, front and back, which can be read at one's leisure. Thank you for your suggestion of summarizing the material, as I've been contemplating how to rework the webpage itself. All of it is worth reading, as far as I'm concerned, in order to get a feel of the issues of that day.

The oil-for-gold trade, as it often gets referred to here, is misrepresented and misunderstood. A study of the oil trade's history led me to conclude, quite positively, that oil NEVER sold for gold, nor was pegged to gold, outside of these royalty arrangements. And for oil to be sold for gold itself, on the open markets, would be unprecedented.

Thank you.


Mr Gresham (02/18/01; 15:01:37MT - usagold.com msg#: 48505)
Belgian
Yes, "audacious answers" -- that is what we seek. And so far, it is FOA who gives us our most developed picture. But we seek (1) to understand the relationships and balances he gives in his picture, and (2) verify if possible with "second witnesses."

CBs show equal or greater gold reserve now, no? Their books of course don't show physical vs "IOU", but I doubt they sell more physical now, unless there are contending forces within them. My question: At start of EMU, the 11 or so CBs agreed to transfer gold reserves to ECB. Did they also agree on individual levels they would hold out from ECB, and for how long? Wasn't there a remark about BOE selling its 1/2 of AU in order to "qualify" for EMU membership. In other words, it was going to ride on the coattails of Euro stability after joining anyway, and would benefit no further from its gold, so why not sell now and pocket the dollars in advance? That was my impression, anyway. (Same for Swiss?)

"Indeed , at a POG-level of 500$/600$...all these questions would never have been asked !" No questions; only regrets...

Further my "forget the mines" remark. Mines are different than investors. Mines may have gold in the ground, yes, but for 21 years they have lived on tiny cash flow margins of $10 this ounce, $50 that ounce, trying to survive as a corporate entity. Their thinking is not about $600, $2000, or any such. Indeed, mines MUST be short gold. They are committed to selling it just to pay expenses, even without a hedge on.

Until POG stays up for some interval (1-2 years?), the thinking of mine executives will not go beyond the nearest horizon, and we can expect them to behave accordingly. In this, I would support FOA's view that POG must lead.

Here's a thought I've been brewing on the supply/demand discussions about mines: We hear the idea about a small physical supply of CB sales, 25 tons here, 15 tons there, being able to hold off a physical demand price spike, while supposedly Comex's 400 (?) tons of open interest contracts hold off the rest of demand (while LBMA handles the big boys' paper deals offstage).

Why any of several Big players have not crashed the scene yet in an attempt to "get theirs" must be most likely explained by their being offered a seat at a Bigger Table. And I think FOA is telling us that the Euro participation is being portrayed as that "bigger table."

Part of their overall "wealth management" program. Much of it administered for them by the same European banks. Diversification. Avoid losing it all.

I would put a question for speculation: How many of 6000 Saudi royals have a penthouse in London? How many have or would like a chateau on the Loire? Not sure about a ski condo in Vail, but I'll throw it in. Davos, maybe. Buying basic industry in the Ruhr, or Czech Republic.

Figure out where the oil millionaires really WANT to live and raise families, and you'll have a guess where they've committed their money and gold? I'll bet Europe has long been the choice for most, and many just commute to their jobs as the Saudi Minister of Whatever, to keep their power base secure.

Insecure in Arabia, "new" arrivals in Europe, they need to cooperate with Europe to have their place secured, if they have dynastic visions of being new Medicis or Rothschilds.

I don't think we need to promote anything. Trail Guide's finely nuanced answers to Chris at GATA this week show that there are powerful forces on gold's side, awaiting proper timing. This is not something to bash your head against, but relax and enjoy the ride!

If there are questions of fairness and justice, these are addressed by our mentor, who doesn't seem too outraged by all this (even while watching his own wealth decline with POG). He's basically saying that powerful forces have been contending for a long time, we're not going to change that overnight ("man's gotta know his limitations"), and what small remedy you can do is to secure yourself some wealth and wisdom, share some with others (as he's doing), and hurt no one else while doing so. Sounds good enough for me!






Chris Powell (02/18/01; 14:54:13MT - usagold.com msg#: 48504)
Financial Times says strong dollar policy will be tested
http://groups.yahoo.com/group/gata/message/662
Financial Times says the U.S. "strong dollar" policy
is about to be tested:

http://groups.yahoo.com/group/gata/message/662

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them, send an email to:

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Belgian (02/18/01; 14:47:13MT - usagold.com msg#: 48503)
Exactly Canuck....
..."The Gold Expert(s)" !! Wonder who they are ?
For instance : was it pure coincidence (again) that B. Murphy has been talking to Thompson (Gold Fields) and NOT to any Oppenheimer (Anglogold) ? Nope it wasn't. Sorry for not elaborating on the forum, on, what I thingk, must be the real reason.
Yes there are other experts. Financial and Monetary academics. But they must all be politisised already. Can we expect an initiative from them ? Let's find one.
W'll see what will happen in march with BIS. Their answer might be a new starting point. The Gold-submarine, must surface to the public in free waters. Altough I am not a financial wizard, I'll adress word to the official gold-holders.(Gresham-CB-links). May I suggest we all try to do the same. Gold-activists unite. Don't let GATA + do the job, whilst waiting and watching. One lucky shot can provide a precious clue and anchor. We aren't exploiting this possibility.

Gresham : My house (kingdom) for Gold (horse) !!
Unfortunately, we can't live in a few kilo's of physical gold. But for the rest, your reasonning is fully compatable with the essence of wealth storage. Isn't this another perfect fundamental to base a gold-investment (marketing) campaign on ? Promote the value-idea of gold in comparaison with the widely accepted notion of house-property-physical-safe-haven. Awake the good in the consumption-slaves. Enhance (again) the notion of value with big V !

Isn't it bizar that diamonts (De Beers) goes private again ? Oppenheimer familly.
Isn't it Very bizar that media-attention is almost zero ?
What if ...yes...the bulk of gold-production, should go private ? Zero visibility !
Pfffffff, enough for this week-end. Take your share of the shiny, private too.





Mr Gresham (02/18/01; 14:00:04MT - usagold.com msg#: 48502)
Thought
Have you ever, through a misunderstanding of scheduling, arrived at a party extremely early? So early that you wondered about going home again to wait, but then with the tiring memory of the commute, and the likelihood of finally arriving late or even just staying home, you decide to stay and wait it out.

Spending a moment with the hosts (preoccupied as they are), getting to know the caterers (hmmm, cute one over there). Heck, I even helped them set up the tables once. More fun than most of the ones I've arrived on "the right schedule." Know what ah mean, Vern?

Belgian: Back at you -- need to hit the Trail for a minute's reading.

Belgian (02/18/01; 13:56:55MT - usagold.com msg#: 48501)
Gresham
Thanks for the CB link.
Gone work with that.

Belgian (02/18/01; 13:48:56MT - usagold.com msg#: 48500)
@ Mr Gresham
Yes Sir, this question-like thingking serves a few purposes.
Hoping for audacious answers, wich I want to compare with mine incomplete ones.
A continious effort to summerize the Gold-Happening with a concrete and universal, simple, and easy understandable language. This in contrast with intriging stories.

The Gold-Affair, contains a lot of paradoxes. These paradoxes, hide ONE fundamental clue. And that's precisely the one, who is challenging me. Yes, sure...all these paradoxes, have an explanation. But these explanations don't fit into the whole story. Most of our stories are build on false (not evidenced) premises. Are the Arab oil-producers buying physical ? Are the CB's net sellers of physical ? Are non WA allies, forced to serve the gold-raid with sales of physical ? etc..etc...
We are thriving on circumstantial evidence, rather than the black and white, naked thing.
Still no cabal-defector to help us out. And the world seems so unimpressed with the 5.000 year old valuestore's pricedecline...that is confusing me.

How easy it is to scare gold-holders to death, with a picture of 32.000 tons, waiting to hit the market. Nobody ever dared to place the WA in such a particular context.
This in combination with Anglogold's Hedge announcement, together with the Wave-theories (possibilities) of an minus 200$ price-zone. Yes, dear Sir...that's why all these questions arise with each new vieuwpoint of another poster.

Of course, there is NO reason to be afraid with physical gold at hand. We buy the physical, because we are afraid of all the other possible catastrophies. But again, this is no reason for not keeping up the effort for understanding what's happening. A 21 year price-slide is at the same time frightening and extremely challenging. But is a low price or an extremely low price the correct reason for accumulating a substantial portion of one's savings into the subject ? Indeed , at a POG-level of 500$/600$...all these questions would never have been asked !

Isn't it also very remarquable that so few people and funds are elaborating on gold ? The financial world isn't infested with dot.com instant billionnaires ? Where are all those classical value-believers ? Why isn't a WGC spending a relative insignificant amount of it's budget on an impressive Gold-Net-Campaign. Their task is to promote Gold as an investment. The jewelry will always sell itself, even into the most remote favella. Gold-Investing is done by another category of people. They need to be informed. I can't get this. And this discussion does not seem to make a chance to have a change for the good. Of course, WGC is only funded by a few miners under Anglo's leadership. Can they demand 2$ an ounce on already over-hedged Aussie/Canadian/US miners ? But why isn't any start given on a producer's consensus ? Is it still a matter of pure egos ? If I am totally wrong in my assesment...is it so difficult to explain why ? If Anglogold mentions "overhang"...what difference should it make, just to explain wich overhang they are referring to. Not willing to explain is cause for more doubt and distrust amongst
loyal gold-investors. It is this unexplicable dual behaviour that is pissing (sorry) me off.

What a difference with OPEC reunions. They come out with a clear statement and a price-target. Take it or leave it.
Gold-producers only find it important to announce higher forward selling. Whenever another industry gets into trouble...a massive (agressive) marketing campaign starts.

Gold-investors have no other partner than the gold-producers. The other partners are, silent "time" and "debt".
Gold has the reputation of being a "no brainer" ! Why am I breaking my head against this golden wall ? Keep on smiling, please !

FredBear (02/18/01; 13:03:24MT - usagold.com msg#: 48499)
Shermag (02/18/01; 09:07:01MT - usagold.com msg#: 48482)
Thank you for nice words. My first post was actually inspired by a post I read from ORO about the price of grocery items in aluminum or something a couple of days ago.

As for your "addition" to my thoughts, I welcome them with open keyboard. I completely agree that the natural gas-nitrogen fertilizer-grain crops link will be, if not already, in serious trouble.


Mr Gresham (02/18/01; 13:02:37MT - usagold.com msg#: 48498)
Belgian
http://adams.patriot.net/~bernkopf/
Link is to a Central Banks website collection...

Your best questions:

"Why do they [gold advocates] always include a standard warning, not to bet the farm on it?"

My question again: We get an 80% mortgage on our real estate. Apparently we're not too worried about its value going down. If a bank would give you an 80% financing of a physical gold purchase at these prices, how much would you buy?

(By the end of the next gold mania, people will be buying gold (1) at record high prices, (2) "with both fists", and (3) on credit. What a difference a few years will make!)

Paper gold now is a leveraged gold purchase with NO collateral and no possession. Why not a leveraged physical purchase? Why don't we trade real estate futures? Of course not; we can't imagine them as other than physical purchases!

One of the interesting sparks to this thinking was the observation in the past couple weeks (was it Noland? Kasriel? Puplava?) that only about HALF of corporate and consumer credit lines have been drawn out, even at this time of RECORD indebtedness. Something like 4 out of 7 trillion corporate, and 1.7 (???) out of 4 trillion available to consumer. It was an article about the "adverse selection" process going on in banking. (PGE, Lucent, Xerox, etc...)

"New money supply seeks inflation"; it goes to currently inflating assets. Upon reading the above, I immediately imagined all Wall Street's hotshots and big player institutions drawing out those credit lines to ride gold's upsurge, once confirmed. "The trend is their friend." They think they'll take the "middle out of the upswing", on leverage, with Fed-lowered interest rates (they think) to boost the return, and end up wealthier than ever, or at least bailing out from their bubble popping, plus a little left over. I'm pointing this out partly, also, as an idea of the boost gold can get once the trend is in, part of filling in FOA's scenario.

Next: Buffett/Soros/Gates probably not talking much, but perhaps Fleckenstein, or Gates' manager Michael Larson (both in PAAS) would have said more about the silver outlook.

Next: I always wonder about that "Arab 20-25 barrel per gold ounce" guideline. I'm sure they'd take whatever the opportunity offered, and I wonder what parameters they see themselves limited by. I appreciated 714's offerings last night toward that insight.

Do they (Arabs) really agree the physical market is too thin to run at, or have they been nibbling steadily since 1981? And just who is they? 6000 House of Saud princes? Who holds the family purse(s), and decides on the interaction with the gold market? Do the Sauds have a "Rothschild" model of themselves in mind for the centuries ahead? What a complex story that must be!

See what happens when you start asking questions?



FredBear (02/18/01; 12:59:29MT - usagold.com msg#: 48497)
Mr Gresham (02/18/01; 02:46:47MT - usagold.com msg#: 48475)
Glad to read that you like PBChat. And obviously you have follwed the saga.

Lately it has attracked some excellent new people.

Mr Gresham (02/18/01; 12:31:33MT - usagold.com msg#: 48496)
Deflation/Inflation
http://www.bearforum.com/cgi-bin/bbs.pl?read=112735
A long thread from bearforum. I haven't read through it yet, but when there are this many posts, there is usually some good thinking going on amongst this group, and on weekends they're usually at their most thoughtful...

Canuck (02/18/01; 12:27:23MT - usagold.com msg#: 48495)
@ Belgian
Your rambling of questions are superlative.

I would like to see a gold 'expert' answer your 'one-line' questions with 'one-line' answers so that novice physical advocates could use as a baseline for understanding.

Please keep 'pumping' the questions!!

Canuck.

Mr Gresham (02/18/01; 12:25:24MT - usagold.com msg#: 48494)
Forum Decorum
I remember my surprise the first time I saw a session of Parliament, with the open arguing and booing among the Members. The U.S. Congress seems to have adopted a more sedate means of interacting, at least in public.

I believe we have agreed to address each other in the latter format, somewhat akin to "If the Honorable Gentleman from Wherever will indulge my further question...", rather than direct challenges in provocative manner. This is out of respect for ALL the readers who are assembled here to learn.

I'd have to re-read the early morning posts to be sure, but I believe I started asking only about the Arab relation to gold and oil, in an effort to fill out Another's offerings with updated information. If I led us astray, my apologies.

The conflicts involving Israel seem like fruitless OT paths for us to embark discussion upon. But, if you need an exemplar for Forum responses, consider Oro's impassioned, yet fact-directed postings, which aim NO barbs at other Knights. These are the best way to limit an OT (off-topic) digression already underway, rather than furtering its degeneration into name-calling. You probably do not need any reminder of where that will get you.

slingshot (02/18/01; 12:00:05MT - usagold.com msg#: 48493)
Cornerstone. msg48484
Pandagold.
Would the placement of a cornerstone on the Mount be a real issue for you. Just curious.
Slingshot

Shermag (02/18/01; 11:39:30MT - usagold.com msg#: 48492)
Japan at a Fork in the Road?
Japan has been in the news lately with talk of it again falling into recession. It now seems probable that this will transpire, accompanied by a falling stock market, rising unemployment, and more significantly, rising bankruptcies. Thus after eleven years of stagnation, it once again finds itself facing a deflationary downward spiral.

Its banking system remains rife with non performing loans, with whisper numbers of non official loan service problems significantly larger than the reported numbers. This, even at the extremely low interest rates that prevail for many of the borrowers. Just beyond the non performing loans are borrowers that are barely able to manage the interest portion of their obligations. Many mortgagees face a future of a long grind to be clear of their debts.

Their stock market probes multi year lows, pushing levels of 13,000 on the Nikkei, a scant few hundred above 15 year lows. I remind that the index stood at 40,000 in 89. This creates more than just losses of apparent wealth of the populace. Because of their practices of cross ownership of each others shares among banks and large corporations, coupled with their policy of marking these share values to market and realizing gains or losses on their income statements, their solvency is threatened by the stock market slide.

This is a position Japan has found itself in many times since its real estate and stock market bubbles simultaneously burst in 1990. Each time it looked over this precipice, falling into it offered an unacceptable outcome. Thus, chastised and goaded by western governments and economists, they adopted various solutions that offered temporary respite at best.

They have overtly supported stock market levels. They have lowered interest rates to near zero levels to reflate, reduce burdens on borrowers, and devalue their currency in favor of exporters. And they have adopted the favored Keynesian approach of government deficit spending, throwing money around like sailors on shore leave. For their efforts, they have nearly the highest government debt to GDP ratio in the first world, and wonderful roads to nowhere.

All of these efforts have not delivered them to renewed prosperity as the Keynesians had promised. At best they have only delayed a reckoning with the problems. That day of reckoning may be close at hand.

As I see it, they are now at a fork in the road. One direction of travel is the deflationary trek they have steadfastly avoided to date. The other is an inflationary response, reliquifying their banking system reserves, essentially monitizing their bad debts. Neither choice is very palatable.

The deflationary approach threatens the failure of a large portion of their banking system. At the very least, it will impoverish many savers, whose deposits are lost. (The deposit insurance schemes will not support a large systemic failure.) There will also be a degree of seizing of commerce as the payment system locks up. As well, this will result in a breakdown of the conduit of capital from the hands of savers to the corporations who need it.

On the other hand, the inflationary response offers perils of its own. It will destroy by another means the savings crucially needed by an aging population for their impending retirement years. More than if they deflate? Hard to say.

Which road will they choose? I do not have an answer to this. It seems Trail Guide is clearly in the inflation camp. Where are you?

Shermag

Pandagold (02/18/01; 11:38:11MT - usagold.com msg#: 48491)
WW Oracle

What do you think gold is, something you just drape round your neck, or wear on your hand?

Gold is first and foremost a political metal, and that is why the POG is held down.

When there is conflict in the world, that is when gold comes to life - by tradition. When it doesn't, it tells the astute much.

Pandagold (02/18/01; 11:29:38MT - usagold.com msg#: 48490)
Criticism

Not only do I criticise Israel, but also, like a growing number of British people, I criticise Britain for acting , not as a bulldog, but as America's poodle. I want to hang my head in shame. Many of us have written to Blair to voice our feelings.

We are sullying the name of an airforce of which we were all proud when it stood against a mighty foe that could fight back, but bombing(with rockets fired from a distance) Belgrade and Bagdad who had no fighter defence - or much other defence for that matter, and with whom we are not at war, nor have a UN mandate for such atrocity - well, enough said, as words fail me, except to say, I am ashamed.

We are not making a safer world. We are creating terrorists, from whom, as always, the innocents will be the ones to suffer.

WW Oracle (02/18/01; 11:18:03MT - usagold.com msg#: 48489)
Is anybody going to relate Arab/Israeli stuff to gold?
I got my opinions, too, but this is a GOLD discussion board. If it can't be related to gold, this isn't the place to discuss it! Until The Forum regains its senses, I'm outta here!

Mr Gresham (02/18/01; 11:13:12MT - usagold.com msg#: 48488)
714, Oro, Belgian
714: I've had the "Secret History" link open before, read some of it, and have it up in a window now, but there would go my Sunday if I were to indulge my curiosity. This "William Kennedy" book is the kind of collection we hope we might have someday about the gold price mess we're in now, but of course we must do our digging and best guessing now before things move. Could you please summarize and point out the most relevant passages for us in your linked document so that it may offer readers here the widest benefit? The question before us is S.A.'s likely moves regarding oil, dollars, and gold.

Or, most to the point, why haven't they gone for a physical buy-up more quickly? Are they satisfied with participation in Euro future and future mining output? Have they accepted several "offers they couldn't refuse?"

Oro: The Peters book sounds like the kind of effort and answer we need to every instance of propaganda. In an era where history is forgotten almost instantly, the "shaping" of facts by interested elites is so easy. The reviews on the Amazon site are a read in themselves. The gyrations between opposing opinions on this matter make me despair of ever being able to trust anything as "truth" merely by the reading of a book, and yet that is how we must receive our remedial education in history.

I would think that Israel's best strategy would be the economic inclusion of Palestinians in the hope of a future "melting pot" effect, as perhaps Mexican- or Cuban-Americans are achieving.

Belgian: Great questions, as always. (Do you save these up for us all through your day, or do they all just occur to you and pour out when you get to the Forum?)

Pandagold (02/18/01; 11:09:56MT - usagold.com msg#: 48487)
714

Believe as you will, it is your right.

Galearis (02/18/01; 11:07:25MT - usagold.com msg#: 48486)
Oil and war...Will history repeat?
Perhaps many have forgotten (?)that prior to WW2, Roosevelt placed an oil embargo on Japan. It REALLY begs the question of whether there would have been a Pearl Harbour day December 7, 1941, if this policy had NOT been implemented. It also begs the question of whether Roosevelt KNEW what the inevitable results would be. Remember, the US was forewarned about the attack and yet did nothing substantial in defense.

My take is that he wanted the US to enter the war. Pearl Harbour was the pivotal (and somewhat expected) event to allow this.

Regards,

G.

Pandagold (02/18/01; 11:00:49MT - usagold.com msg#: 48485)
tedw

People are getting very wise, and a bit sick of this cry-'it's anti-semitic', every time someone raises some criticism of Israel. Have you not noticed, you can criticise with impunity anything on earth — including any religion nation ' anything that is except Israel?

This is not good for Israel, strange as they may seem to you. And there is a growing number of Jewish people, including myself, who believe this. It allows fanatics, within, to bring discredit on a nation, and people, that has much to offer, and a place to fill if treated as an equal enjoying both praise and criticism.






slingshot (02/18/01; 10:37:10MT - usagold.com msg#: 48484)
Pandagold. msg48471
Real issue.
If a Jewish construction crew went to the Temple Mount to set the connerstone of the Third Jewish Temple,would this be a real issue?
Sharon, went to the Mount and what a stir that was with all that increase in violence. This little patch of land is not about oil itself. You can say it has a connection because of its location. The West will never be able to stop the violence, for it can not and never will understand their
Religion,Politics,and Ideology. Mix this with hatred and you have one hot spot in the world.
Would it be serious if North Korea, invaded South Korea.
Maybe. China, goes for Tawian. Little hotter. Still no oil. Everything is connected to oil. Gold included. To think that the placement of a stone on a spot on the ground could have an effect on the price of Gold is something else.
Slingshot.

Peter Asher (02/18/01; 10:28:42MT - usagold.com msg#: 48483)
ORO msg#: 48476

Thanks for posting some of the conveniently forgotten history of how the settlers turned desert into farmland. Interesting how once a society builds it's affluence, it is seen as just being there without regard for the labor of the creation.

Israel was created by hard physical labor in the communal environment of the Kibbutz. Those who fight to obtain it now, have no more regard for it's founders than a day trader in Curtis Wright has for the two brothers who labored in their bicycle shop to create the Kittyhawk Flyer.

Shermag (02/18/01; 09:07:01MT - usagold.com msg#: 48482)
FredBear
Nice first post. I would like to go on a different tack for one of your points.

You Stated: "But unlike computers and cell phones, grains can quickly move from oversupply to undersupply with one kick from Mother Nature. Mother Nature can wipe out an oversupply of grains faster than you can say "inventory correction.""

It might not be mother nature, but energy shortage that kicks grains over to an inflationary rise. The very tight supplies of natural gas this winter have caused some manufacturers of nitrogen fertilizer to sell their contracted supply of gas, rather than produce with it. This will create a shortage of nitrogen that in turn will shift farm production away from nitrogen intensive crops, and cause a reduced usage in all crops. This, combined with cost rises of fuel and chemical pesticides will result in certainly less supply of these grains. How much, I do not know, but it merits watching.

This is a good example of how price inflation crosses from one item to another as price rises ripple through the entire economy.

Shermag

Belgian (02/18/01; 08:05:44MT - usagold.com msg#: 48481)
Gold... Silver ...and live-savings ?
Gold and silver advocates, are producing masses of sound arguments for extra-ordinnary revaluation of both gold and silver. Why do they always include a standard warning, not to bet the farm on it ??? Such wise approach is in sharp contrast with their convictions put at our disposal.

With POG and POS at actual prices...what are the risks, when having stored the physical at hand-reach ? What is the reason of this cold and hot talk (aegumentation) and duality in action ? Is doubt and fear still dominating and in the mean time an explanation why physical acquirements of these two metals is postponed ?

This attitude is very confusing, the more that Palladium, Rhodium and Platina have showed us the way. Both, silver and oil are consumed. People have no problem at all to take the opportunity of a periodical low oil price to stash lots of oil (energy) as reserves. Why isn't this same attitude possible for gold and silver ? Are gold-jewels endangered to get out of fashion for good ? And, or, will gold grow on exotic, genetic manipulated, trees in the future ?
Have we already made a comparaison with real estate and physical gold, investments as reserve-stores, for the next generation (our children) ?

Was there any manipulative paper-history in the Platina group and oil, before their price catapult ? If the silver trio Buffet/Soros/Gates are real believers in the white shiner...why doesn't anyone asks them what is wrong with gold, for not doing the same with it ? Or is it pure coincidence that this 3 "authorities" share the same emotionnal affinity for the silver metal ? Their opinion must be relevant.

Arabian oil producers have a 20/25 barril/goldounce relationship. What is GATA waiting for to explain them what is happening and get close to these physical adherents ?
Such an open and, eventual succesfull approach, could make a frightening, thundering noise. Goldproducers, delivering physical gold to oilproducers, directly and without BB middlemen, could give a very strong signal for their commodity.

Why aren't any of these pragmatic actions taking place in defense of gold ? Or is it that gold isn't attacked ? Or is the holly dollar-cow still ruling and keeping the lit of secrecy on gold for the time being ?
Does gold remains a strong political metal or not ? If we have to believe the media...there is no political reason at all to be very active in hiding gold as a stealth fighter.
So why keeping it in the dark ? Goldproducers and all other traders/holders... answer,please !

Oil (energy) and the future of its price is slowly becoming clear to all consumers. The oil cartel is softly preparing us for a much tuffer stance on future oilprices. We already silently learn to live with it. Nobody urges the UN to mobilise Saddam's reserves to be mobilised, as to lower the POO and support a reflation of the artificial wealth-bubble ? Money flows to the the happy owners of the oil commodity. There is no indication of worry or fear for POO getting out of hand. Why should an increasing POG, be so dramatic ? Why don't Central Banks deny, with a simple statement, that there just does not excists an endangering gold-short position ? And why don't we just ask them this question publicly ? Do we really have to go down south all the way to Pretoria, for mobilising the South African CB, to have that question asked ?

The Paper-Gold-Price, can only be sustained, as long as small amounts of sellers-physical gold is giving leverage to the paper-position. Therefore, WGC must provide us with the exact figures of who is still having physical gold for future sale. They must be able to make approximate price projections in function opf what is possibly left for manoeuvering. There must be a price-down-limit where the sale of physical gold becomes ridiculous for official goldholders. Goldreserves, stored for the past 30 years cannot be sold at a blatant loss ! This bottomprice must become public. UK/Switzerland...what do you reckon ?
Media, are you still with 32.000 tons of public property ?
Media, is this sale and lease of public property at idiotic prices, not socially relevant anymore ? Media, how do you explain your des-interest into this matter ? Is it a full-time Don Quichote business or what ?
Media, are you outright hating public gold holdings or just plainly ignoring it for God knows what reason ? No, naive belgian...only the price level will start the adrenaline flowing again. Thank you media.






tedw (02/18/01; 06:10:51MT - usagold.com msg#: 48480)
panda gold
http://www.usagold.com

Nice anti-semitic propaganda. Too bad its not true.


If your financial advise is a confused as your political advise, everyone would be well advised to not listen to you..

714 (02/18/01; 06:10:31MT - usagold.com msg#: 48479)
Good piece on Petrodollars...
http://www.georgetown.edu/users/johnsonj/oweiss/petrod/petro2.htm
"This paper addresses the economics of petrodollars and petrodollar surpluses, which have so far had two major peaks, in 1974 and in 1980, after which they tended to decline gradually at the beginning but sharply afterward, following the substantial drop in the price of oil since the last quarter of 1985. This paper also presents a contribution to statistical demand theory based on the demand for oil."



714 (02/18/01; 06:05:09MT - usagold.com msg#: 48478)
Pandagold...
http://home.att.net/~strat.gt/secret_history
...it is NOT true that the Arabs sell oil for gold. An examination of the history of the Middle Eastern oil business clearly yields this information. Once upon a time, in the 1930's, they sold the RIGHTS to their oil for gold. Aramco and other oil consortiums paid these royalties in gold, largely because countries such as Saudi Arabia had no currency of their own. But in a few years, with the outbreak of WWII, they were even accepting US$ for these royalties (though still pegged to gold) as the LBMA, where where Standard Oil of Texas and S.O. of California, Aramco's parent companies, were buying gold to pay the Saudi royalties. Furthermore, the oil was then owned by the Western oil companies as it was drilled, who then brought it to market in America, Europe and Asia, where it was sold for Western currencies. In the 1940's, a barrel of oil brought a little over $1US in the oil markets, and the royalties on that oil in Saudi Arabia was 4 gold shillings a barrel (approx. 22 cents), which I once figured as 153 barrels of oil for an ounce of gold. I've researched this history extensively and have documented some of the early oil history at the above site. From an Arabian, or Eastern, perspective, yes, one could argue that oil was indeed sold for gold (they gave us gold for the oil in the ground), but the fact remains that Middle Eastern oil has always been sold in the market for Western currencies.

(A word about the above site. AOL users probably will not be able to connect.)


SALMON (02/18/01; 05:42:16MT - usagold.com msg#: 48477)
Off topic
http://www.cnn.com/2001/WORLD/meast/02/18/iraq.airstrike/index.html

"But UK Prime Minister Tony Blair said Britain was ready to authorise further action if Baghdad continued to attack British planes patrolling no-fly zones."

I am still trying to find the reason for this attack. Did anyone hear of British planes being attacked by Iraqi previous to this attack?


ORO (02/18/01; 04:35:35MT - usagold.com msg#: 48476)
Israel - something to read
http://www.amazon.com/exec/obidos/ASIN/0963624202/qid=982493737/sr=1-2/ref=sc_b_2/107-4551240-9300553
I met Peters and discussed her book in a rather liberal setting. It is very non-PC to talk of the true origins of the conflict in Arab-Israeli relations. Where they begin is with the two faced English policy for their protectorate. A public pro Jewish face and an actual severe and intense anti Israeli/Jewish and extremely pro Arab reality. Like the good bankers that they were, they sold Jerusalem to two owners and proceeded to sit in judgment over the resolution of the conflict while taking only one side - the Arab side.

The palestinians are an artificial creation of the neighboring Arab states, the English, and Soviet propaganda.

Hysterical cries over the holiness of Jerusalem to Moslems started only after newly independent Syria, Egypt and Jordan faced the possibility of losing it. Prior to the Jewish settlement, the tiny city had no substantial moslem population. Indeed, prior to Jewish settlement, begun in the 1870s there was no substantial Arab population in Palestine at all. Under Ottoman rule, Palestine was the southern portion of the Turkish province of Syria, remarkable only in that the Alexandria-Istanbul railroad had only one stop there, other than to chop down wood to fire the engines. There was no one to resist the chopping since no one owned the land but the Turkish government.

Arab migration followed the Jewish settlement. Land was purchased by Jews at absurd prices from local effendis (in the Arab feudal system the effendi owned the land and shared the crop with the falach - the peasant). Effendis of the era got their land from prior Arab and Ottoman wars, and in contemporary (to the Jewish settlement) purchase and grant from the Turkish government. Jews bought swamps and desert and using modern techniques had brought them to produce rich harvests.

Anyway, it is a good read and very revealing of the one sidedness of the conflict - all of which is Arab.

It should be pointed out that Palestinian leaders in general and Moslem clerics in particular, have no intention to have peace with Israel. The problem of the conflict is not some sort of fight between two sides with equal claims. It is the one sided fight between a murderous liar who takes generosity to be weakness and an opportunity, and a people trying to defend themselves.

What is a compromise with murder, but death?
What is a compromise with a lie, but a lie?



Mr Gresham (02/18/01; 02:46:47MT - usagold.com msg#: 48475)
FredBear, Panda, John
Up late, Fred? Welcome to this Round Table of good company. And thanks for the lead; PruBear was my original read before Harry took many good posters to BearForum. That mannfm11 has got me reading there again, and I like the selections you placed on PB, too. I find myself wondering if I'm encountering old Yourdon TB2000 Y2k friends under new names; are we the same 55 people recycling around the 'Net?

I wonder how many actual short sellers there are? A minuscule fraction of the trading public? The PB Fund has been my only winning investment in a decade of being "Rationally Inexuberant".

Panda: When you see the fanatical look of hatred toward Israel on young Arab faces, you wonder if Israel indeed has "sowed the whirlwind" for many generations to come. Arabs and Jews co-existed in the ME for many centuries. Now they are thrown toe to toe in power struggles they cannot benefit from, but only hope to survive. Can we hope for a Gorbachev/Reagan, a Mandela/de Klerk rapprochement out of another generation there?

A large Israeli peace movement, and a smaller proportion of American Jews, are willing to criticize Israel's military preoccupation. They are a necessary, but probably not sufficient, condition to improve the Palestinian relationship. Could Sharon "go to China?"

On the negative side, one of my Most Likely Scenarios by which major nuclear weapons reduction worldwide would ever be achieved, as unlikely as that now seems, is for a "prophylactic" "minor" nuclear attack to happen somewhere that Western eyes can easily see on the major media and be permanently shocked, as "cleanup" and "recovery" efforts are made over a multi-year period and images of a mangled populace come to us. I'm afraid it is Jerusalem that has figured most often in my sad imagining. (I'm not sure the dark faces of India/Pakistan would have quite the same efficacy.)

John: Maybury puts it all together, doesn't he? Chaostan. Arabia will still have oil under it after some other power group has expelled the Sauds to draw upon their gold stashes in New York, London or Switzerland.

FredBear (02/18/01; 01:20:34MT - usagold.com msg#: 48474)
Mr Gresham (2/17/2001; 15:04:21MT - usagold.com msg#: 48458)
http://216.46.231.211/boards/user/non-frames/message.asp?forumid=4&messageid=27095&threadid=27072
If your looking for something to browse, try Prudent Bear Chat. You'll find better posters than at BearForum. There is a nice thread at the link provided. BearForum is actually a spinoff of PBChat. All the Eliott Wavers went to BF.
Enjoy.

Old Yeller (02/18/01; 01:16:35MT - usagold.com msg#: 48473)
California or bust
http://www.dismalscientist.com/todays_econ/te_021501_2.asp

Isn't it ironic that California is known as the golden state?

Good night,all;thanks for the great posts.

FredBear (02/18/01; 01:08:45MT - usagold.com msg#: 48472)
SteveH
Thank you. First post here. I enjoy the thoughts shared here.

Pandagold (2/18/2001; 0:32:33MT - usagold.com msg#: 48471)
Mr Gresham ; 714 and ALL Arabs Oil and GOLD
The Arabs, Oil, and Gold

If there is one thing the Arabs understand as much about as oil, it is gold. There exists within their world hotels where all the fittings throughout the hotel are pure gold.

The Arabs do not sell oil for dollars, merely because it is priced in dollars, but for gold - REAL: MONEY!

They have a yardstick in which one ounce of gold shall equal between 20-25 barrels of oil. And, one way or another, eventually, they make sure that they get that. Their remedy is if the US dollar gets inflated, they will EVENTUALLY up the price of oil.

This should give you a clue as to how they view the current POG - around $550-600 an ounce.

There is nothing mysterious, it's just a simple equation.

They go along with the West's need to keep their economies afloat, because that is their main market, and they have to work with the oil companies. The Arabs are not unreasonable.
they do not cut off their nose to spite their face.

Just one more thing. The US does not need Israel as a base to protect their oil interest. ( That is a lot of hooey). Far from it. The Arabs would be one of the US's greatest 'friends' if it wasn't for their 'uneven' support for Israel.

Supporting Israel, and their uneven approach to the Palestinian cause, is the greatest threat to the ME. It puts all the Arab leadership regimes in jeopardy, the fall of any one would send tremors through the region with disastrous consequences.

No one denies anyone a 'homeland', but that should apply also to the Palestinians.

The trouble in the Middle East is NOT about oil (though that is their only effective weapon). It is about Israel wanting to dominate the whole region. Israel would have nothing to fear from the Arabs if she was less beligerent and applied a little more give and take - ie a little more give and a little less take.

America has the answers, but the pro Israel lobbies have power way beyond their numbers of total US population. It is as simple, truly, as that.

PS I do not have sleeepless nights or suffer from a bruised ego because of those who challenge my posts. I believe in free thought as well as free speech.

I see very serious problems ahead if the real issues are not recognised and addressed.

Black Blade (2/18/2001; 0:09:28MT - usagold.com msg#: 48470)
U.S. feels California's energy pain
http://www0.mercurycenter.com/partners/docs1/036092.htm
Snippits:

Rising energy costs pounding Californians are rippling through the national economy and eventually could lead to higher prices for items ranging from food to furniture.

``I look at it as California's shooting itself in the foot,'' says economist Bill Watkins, executive director of the project. ``You're not going to see major investment in the state until this is resolved.''

``You're starting to see the inflationary impact of higher energy costs,'' says Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. ``It's going to cause a problem. I think this summer is going to be pretty interesting.''

Black Blade: Took the words right out of my mouth - "Interesting" indeed! Also a nice segment on higher agriculture costs due to high energy costs.





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