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ARCHIVED DISCUSSION FROM 5/24/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) elevator guy (05/24/00; 23:42:41MT - usagold.com msg#: 31216) (Smile) Gotta sleep, 'nite all. :^D Black Blade (05/24/00; 23:36:01MT - usagold.com msg#: 31215) Elevator Guy When my times up, I'm gonna be buried with a jackhammer! It's the miner in me and old habits die hard. Who knows, I might be assigned to the DOT ;-) elevator guy (05/24/00; 23:29:13MT - usagold.com msg#: 31214) A little joke in this "vein" of gold disscussion. A man dies and goes to see the Peter at the gates of heaven.Peter asks "What it is that?" the man is dragging with him.The man replies that "These are gold bars, which are worth something forever."Peter shakes his head in amazement, and sighs "Why did you bring pavement?"For those without a clue as to why this is slightly humorously ironic, it is reported in the Bible that the streets of heaven will be paved with gold. TEX (05/24/00; 23:28:42MT - usagold.com msg#: 31213) Slow Death Big time lurker and a small time poster. As always,great discussion and posts day after day. However, why do I have this awful feeling that my physical investment is being slowly put to death via the old Chinese water torture......i.e. one little drop at a time? Simply Me (05/24/00; 23:14:06MT - usagold.com msg#: 31212) The New Rumpelstiltskins...or How to Spin a Bear into a Bull http://www.bloomberg.com/feature.html Don't Worry About a Bear Market "By David Pauly (Commentary. David Pauly is a columnist for Bloomberg News. The opinions expressed are his own. Published in the June issue of Bloomberg magazine.) New York, May 24 (Bloomberg) -- Delete ``bear market'' from the vocabulary of the stock trade. The lightning speed at which share prices move has rendered it obsolete."At the link, you'll find the whole article.Can the New Paradigmers SPIN a Bear into a Bull by pretending the Bear doesn't exist anymore? When my children were babies, they used to make scarey things go away by covering their eyes and pretending they didn't exist. At about 6 they found out that didn't work.My two cents on the paper vs. physical debate: I think the paper pushers are assuming that we all believe the old adage, "Make your money work for you." A stock broker probably came up with that line. In the real world, that dog won't hunt. You work (ie: provide a service or a product) for the money. Then you work to keep what wealth you've earned. Over the long haul and in times of real need, the best store of value is physical gold. History says so, banks say so, national governments say so. Holocaust survivors, Depression survivors, and The Fall of Saigon survivors say so. I think I'll place my bet on their wisdom.Who says the markets are better? Stock brokers?I'm not looking to put my money to work. I work for my money. All I want is a store of value that will be available to me and my family when times are hard. (I'm not a Democrat, so I'm not depending on Uncle Sam's hand outs. His price is too high anyway.) Physical gold (and some silver) is it. That's my savings. My "investments" are in me, my family, our home and our abilities.simply me TownCrier (05/24/00; 22:44:54MT - usagold.com msg#: 31211) BTD and Al Fulchino First, Sir Al:Al Fulchino (05/24/00; 20:43:00MT - usagold.com msg#: 31202)"TC, we need people like goldhunter here. I do not feel he has attacked anyone. Whether you like his comments or not, he does extol a method of investing. It may be contrary to many who are here, but I do not mind that he is a future's broker and watching you examine his line of thinking is wonderful and I look forward to his responses to you and TG because it bares, for all to see, each sides thinking. He is critiquing popluar thought on this forum, but that is useful to all who read here."---END quote---------------I agree completely with everything you've said. And as you've said, regarding the usefulness of examining all sides of thought on these various methods of investing, I have endeavored this evening to provide commentary to further the comparison. Perhaps I should have said nothing at all.But as I said in my previous post, it is the clear appearance of an effort toward self promotion, a laying of groundwork to solicit business interest at this (advertisement-free, no-cost) forum that has resulted in more vigorous counter-commentary on my part than would have otherwise been the case. If a someone such as beesting or Solomon Weaver or ORO were to suddenly find the need to share their own investment strategy and advice on the forum which turned out to be exactly this same trade, I may or may not offer a kind word about remembering to factor in counterparty risk, but that would be it. I'm not in the gold selling business, that is what MK does at Centennial--the company the pays the electric bills here. I'm just a lackey who mans the watchtower here on the fringe of the wilderness for the purpose of passing along news of gold, and making needed improvements to the design and content of this USAGOLD website. Granted, I could provide my feeble service to any particular business in nearly any sector of the economy. The very fact that I do it right here is testiment to my monetary philosophy and expectations for the future.I don't want to scroll back through to find the exact post, but I recall that Sir R Powell said he was a trader/broker?? If that is true, then R Powell is a model of how to discuss the issues here without a hint of self-promotion. I believe TheStranger is another example of an investment profesional who has also shown himself to be a model poster in this regard in these days of late. So, Goldhunter is more than welcome, in fact, encouraged to talk about the dynamics of the gold derivative markets, and also to speak of factors he sees coming to bear that will make either John Q. Public or America, Inc suddenly gain sway over the determined shorts which have established a most impressive track record. He can warn us of counterparty risk, or educate us about the institutional safety nets that are in place to catch us all when we fall. Something approaching a sales pitch, however, is contrary to the ground rules that were established with the creation of this branch of the USAGOLD website. But to reiterate, Al, I agree with your comments that it is useful to air every side of the gold industry, warts and all.Sir BTD, your 31204 post puts me at a loss for words...(certain to be a relief to all.) I do not have, what you call, "religious faith in the Comex/physical price divergence scenario." I do, however, have every confidence that we are currently working through a buildup of market forces not unlike a good old fashioned run on a bank as seen back in the days of gold coinage. However, given the international dimension of the current gold market, the "run" that is sure to come will be a doozy...far surpassing the impact of such related precursor events as the 1933 gold-confiscation banking holiday or the 1971 U.S. gold default. Regarding the "divergence" scenario, I rather doubt that COMEX futures prices will calmly march ever lower while physical gold prices (spot plus premiums included) calmly march higher. What I would expect "when all is said and done" (meaning that the market psychology has reached the threshold "bank run" stage) is a general lock up, massive counterparty default, or sweeping rule change to affect COMEX gold trading and the value of your COMEX contracts. Personally, I don't find the interest to be earned on T-bills to be worth the risk to be separated from my core position in gold with a paper gold substitute. If you are at ease with your current investment strategy, then clearly, 400 ounces is seemingly an adequate position for your personal comfort level. There is no shame there. But given what you and goldhunter have said, are you so confident in the suitability of COMEX contracts to function as proxies for real gold that you will put those other 400 ounces to similar good use, and earn the T-bill interest as frosting on the cake?Why do I speak of "truth" as I do? Because I am not here to make a sales pitch to help Michael capture your investment dollars in preference over other business. I see my efforts as a mini- (and perhaps pathetic) version of GATA. But rather than trying to expose deep levels of corruption or conspiracy, I endeavor with my time and energy to expose people to the realization of the shockingly inadequate monetary education they were (not) exposed to in high school or college.And with that, I shall blow out the candle up here and retire from the cool night air. Elwood (05/24/00; 22:24:57MT - usagold.com msg#: 31210) BTD (05/24/00; 21:02:40MT - usagold.com msg#: 31204) "The Comex has never before had such a divergence, yet you have absolute faith that such an event will occur."Better check your history again there. While it may be that the "Comex" never experienced this, that's not the same thing as saying it's never happened. The Comex has an extremely short history. Try 1869 New York, 1873 New York, 1931 London, 1933 New York/USA, 1968 London, 1971 Everywhere. That's just a few off the top of my head. Care to go further back? Rome?You people seem to think we're discussing the end of the world. That's not the case. What's about to happen to the dollar has happened many times before to many different currencies, but you're right. Of course, the Comex will honor all contracts when the time comes, because that's what they've always done. Those guys in New York will always take care of their customers first even if it means a loss to them. The bank clerks that were took out and hung in 1869 were all just victims of a terrible mis-understanding.Elwood onlychild (05/24/00; 22:14:43MT - usagold.com msg#: 31209) RE: Solomon Weaver (05/24/00; 21:46:23MT - usagold.com msg#: 31208) POS (Poor Old Solomon, not price of silver) Is the 1bn oz of silver you refer to the total supply on the planet? How does one arrive at a figure like that? If silver is four times as precious as gold, why is it not reflected in the price? Does Warren Buffet still hold a massive position in silver? OC Solomon Weaver (05/24/00; 21:46:23MT - usagold.com msg#: 31208) Did someone say "silver"? TownCrier (5/23/2000; 22:18:23MT - usagold.com msg#: 31130)Solomon Weaver (5/23/2000; 21:10:26MT - usagold.com msg#: Town Crier...you are cordially invited at any time you plan to come to the Finger Lake region of New York to enjoy a bit of water from that well....I will heartily agree with you that gold is the premium money.Given the modern concept of portfolio diversification, I believe that silver physical represents an interesting option along with physical gold. You see, as much as we like to theorize, neither of us can predict the Au/Ag relationship at any point in time.As I mentioned yesterday:Concerning both gold and silver there are three aspects:1.Industrial and utility demand (including jewelry, etc.)2.Investment demand (private gold hoards in coins and bars)3.Monetary demand (bank reserves). Also we should consider a coin minted for real circulation as monetary.The point which I was trying to make yesterday was that whereas physical gold has a distributed demand in all 3 aspects, physical silver is primarily demanded only in aspect 1. Thus, in a contrary analysis, silver has even more recovery potential in demand.In a flight to quality in assets, gold is certainly king but silver has many of the same qualities. There is hardly enough gold in the world to remonitize most trade with gold backing (without POG going to $20,000)and that is 4 billion ounces of gold...but there appears to be less than 1 billion ounces of silver and the price is 1/50 that of gold...or about 1/200 dollar value....i.e. from an asset "market cap" silver is less than 1% that of gold. That is the SUPPLY....price is "usually" a relationship between supply and demand.To see the picture clearly and not believe that silver could see a higher percent gain than gold (in a midterm PM bull)is not rational. To believe that gold demand and the end of leasing etc. will allow gold to skyrocket but that the same "setting free" of silver will not let silver skyrocket any faster than gold is being emotionally partisan to gold.As a matter of fact, given the small size of the silver market next to gold, and the fact that the insider cabal in silver is much more concentrated, I believe that silver could default and be set free faster than gold....meaning that the "silver launch" could precede the "gold launch"...in this event, wouldn't it be good to own some silver too?Let's think this through...let's say silver went from $5 to $15 (about 300%) and caused 1 billion ounces of shorts to settle in cash at that level to "save the banking system". Ticket price for the bailout is $10 billion....Now let's say that gold went to $1,000 (also about 300%) and caused 10,000 tons of shorts to settle at that level in cash to "save the banking system" Ticket price for the bailout is $200 billion.The way I see it, silver could run to $30-40 before "force majeur" is claimed....but gold breaking $600 would break the banks if the current paper structure is still in place.Actually, in the silver paper markets there is a large amount of paper (investment demand) and leasing. As a matter of fact, if one compares the dollars traded or contract sizes traded in the gold paper markets vs. silver markets on sees that the little silver market (500 million oz x $5 = 2.5 billion) moves quite a bit of money (about 1/10 of the gold volume, and about 1/2 of the average contract size)...compared to a gold market which at 100,000 tons x $ 10mio/ ton = $1 trillion or about 400 times the value of the gold markets.Another funny thing is that if you look at the vault stocks of silver and gold in the COMEX over time...there is usually a dollar amount of silver which is in the same order of magnitude of dollar amount of gold...i.e. 1/2 or 1/4 but rarely less than 1/10. Whereas less than 0.1% of the worlds gold is in COMEX vaults at any given time, in recent times as much as 25% of the worlds remaining silver has been in COMEX.It is my opinion that most traders on COMEX who trade gold and silver believe that the world probably has about 1/10 the dollar value of silver vs. gold....because they extrapolate from the usual vault ratios. They are unaware of how extremely thin the market is outside the COMEX...and that there is a much larger percentage of paper trading over the metal than with gold.The following numbers are estimates:Gold paper trading 1000 tons per day about %1 of the total physical. ($10 billion daily trading volume)Silver paper trading about 200 million ounces per day or about 50% of the total physical. ($1 billion daily trading volume).In a way, it seems that "hyperinflation" has advanced much more in silver paper than in gold paper.In the eyes of the modern traders gold and silver are fairly similar markets. In the eyes of many world citizens and politicians silver is simply a cheaper form of gold. When buying numismatic coins is once again a "good investment", I seriously believe that the price of of gold will be so high that silver will have to do for most people.You made a joke about gold for the rich, silver for the middle class and copper for the poor...but in truth you are right on the mark. The rich man will find gold an attractive place to set aside savings...the middle class might still afford silver..and the rest will have only fiat options.Mr. Town Crier, you must forgive me for continuing to return as a silver advocate on this most esteemed gold table.And do not believe that I would sacrifice gold ownership for the sake of silver...I see them more like a right and left hand.Poor old Solomon SHIFTY (05/24/00; 21:46:01MT - usagold.com msg#: 31207) BTD BTD: I have not wanted to get into this paper gold discussion, but your quote of Ezekiel 7:19 brought this thought to mind.Ezekiel 7:19" They will throw their silver into the streets and their gold will be like refuse; Their silver and their gold will not be able to deliver them in the day of the wrath of the Lord.They will not satisfy their souls , nor fill their stomachs because it became their stumbling block of iniquity."The reference to " They and Their " could be in reference to people that hold Paper metal . You know how the Prez told us it depends on what the definition of " is " is. Well...........Just a thought.$hifty goldhunter (05/24/00; 21:35:15MT - usagold.com msg#: 31206) Mr.Crier...Mr.Crier http://www.usagold.com Feeling a little testy are we? First, I solicit no one here.Second, Sir FOA either hit the "3" key by mistake when he posted $383.30 or made an honest mistake...my humoros reply was as said...you may mean $283... or you need a new broker...Humor...otherwise you need a new broker...give me a call...(maybe for you I should have said:"smile" so you would get the intended "funny"Third, My gold eagles...I buy them because of what I have learned here ...partly.Also I do believe that both "cash"gold, Eagles, bars, Krands etc. AND futures are both vehicles that will profit from the coming bull market.Last, It seems odd that IF YOU DISAGREE with another "professional's" opinion you would try and show him (ME) the door...not very hospitable of you...I will stay however...you, Mr. Crier will not be let off the hook...our 6 month "test" stands for all to watch.Goodevening. SHIFTY (05/24/00; 21:03:55MT - usagold.com msg#: 31205) cut and paste test This is a test . If you put a match to it , and it goes up in flames " it ain't gold!"$hifty BTD (05/24/00; 21:02:40MT - usagold.com msg#: 31204) TownCrier msg# 31184 TownCrier,Wow! You are starting to get a little strident in your zeal to support your position. In reading your posts and thinking about them today, I have come to realize what the deal is. You have an almost religious faith in the Comex/physical price divergence scenario. The Comex has never before had such a divergence, yet you have absolute faith that such an event will occur. I understand this attitude because I, too, have an absolute faith in something not seen, and in events that have never occurred but are prophesied to occur in the future. But my faith is in God, not gold. (Shall we call it the "big G" as opposed to the "little g"?). Let me document my case. Here is the performance of the active futures contract during the most recent dramatic price jumps. I don't have the numbers for spot gold prices to compare, but I assure you prices and physical did not diverge as you prophesy they one day will.Dec 1999 contract (closing prices):Sep. 20 $255.80Oct. 5 $326.00 (after hitting $338.00 as the high of the day)Apr 2000 contract (closing prices):Feb. 1 $285.40Feb. 10 $318.70I rest my case on this and 25+ more years of evidence. Your case rests on your faith in the accuracy of your prophecy. Let me say of you, "whether you realize it or not, you have now aptly discredited your siren song by your very distinct sounding of notes out of tune with a REAL world in which we must all live."You said to goldhunter, "You suggested your strategy's vindication would come ‘when all is said and done’, at which you promptly offer a specific date (Dec 1, 2000) as the proving ground! HA! I nearly pitched over the back of my chair and fell off The Tower!! I laugh indeed at your little ploy, and suggest that my position is not one to be fully appreciated on a randomly selected or knowable date (such as Dec 1, 2000), but truly at such a time ‘when all is said and done’. Since you feel comfortable applying your belief system to goldhunter, let me apply my belief system to you. You also have a shortsighted view. For when it is really all said and done, your physical gold and silver will be worthless. Witness the prophet Ezekiel:Ezekiel 7:19 ‘They will throw their silver into the streets, And their gold will be like refuse; Their silver and their gold will not be able to deliver them In the day of the wrath of the LORD; They will not satisfy their souls, Nor fill their stomachs, Because it became their stumbling block of iniquity.Perhaps you will object to my hypothesis, since you may not share my belief system. You may say gold will always retain value because it always has in the past. Likewise, goldhunter and I object to your hypothesis because we do not share your belief system. We say that the Comex and physical will not diverge because they have always moved together in the past. You cannot comprehend how we cannot believe what you do. That is the nature of true faith. A person with true faith believes absolutely in something that cannot be seen, and he cannot understand why others do not share his belief."When all is said and done", gold will be worthless. In the meantime, I'm trying to increase my wealth in the most efficient manner. You are prophesying an event to happen in the vague and nebulous future. I have to deal in the very real present. All you offer me as evidence of your prophecy is your faith, and your zeal is admirable. But I will base my actions on concrete evidence. The only prophesies that I believe are those that come from God.Goldhunter proposes a concrete test of the two opposing theories. You ridicule him ("I nearly pitched over the back of my chair and fell off The Tower!! I laugh indeed at your little ploy") for even daring to consider such a thing. Apparently you feel you are right, even if the event never happens in your lifetime, goldhunter's lifetime, or any of our lifetimes. There is no way we can prove you wrong; you can just say, "It just hasn't happened yet." As I said in my earlier posts, I will plan on those things which have the high probability of occurring, not the far-fetched ideas that have no historical precedent.I'm sorry if this post seems a little harsher than my prior efforts, but I was offended by your uncalled-for attack on goldhunter. You accused him of trying to solicit "innocents" into his "shearing house" of futures trading – when he has solicited no one and has been voicing reasoned and rational views that others of us share. You wished upon him a collapse of his business ("The sooner your futures business dries up…"). And yet yesterday you assured me that "Although you said you expected disagreement, please rest easy on that account. This whole thing is no different than you saying, ‘I plan on having a hot pastrami sandwich for lunch, and chips, too, are in my sight.’ How can I, or anyone, possibly dare to ‘disagree’? These are safe halls, my friend" (message #31124). Suddenly the halls no longer seem so safe for those who who lack the faith.As a final illustration of the religious nature of your belief system, let me quote your message #31200: "What I do take exception to are sales pitches that lead people away from following a path toward truth, particularly when it is done not to someone already hopelessly lost, but to those already on the path." If that's not the line of a pastor defending his flock, I don't know what is. SHIFTY (05/24/00; 20:46:12MT - usagold.com msg#: 31203) Topaz http://www.drudgereport.com/ VOILA!! You were right! I thank you ! No more multi-post/multi-links from $hifty! $hifty Al Fulchino (05/24/00; 20:43:00MT - usagold.com msg#: 31202) TownCrier (05/24/00; 20:25:04MT - usagold.com msg#: 31200) TC, we need people like goldhunter here. I do not feel he has attacked anyone. Whether you like his comments or not, he does extol a method of investing. It may be contrary to many who are here, but I do not mind that he is a future's broker and watching you examine his line of thinking is wonderful and I look forward to his responses to you and TG because it bares, for all to see, each sides thinking. He is critiquing popluar thought on this forum, but that is useful to all who read here. Cavan Man (05/24/00; 20:32:14MT - usagold.com msg#: 31201) Nikkei UP. Sucker's rally based upon the trade accord with China? How does this accord benefit the US? The Chinese will buy technology produced here with both hands. Are they buying our steel also? Does this open the US market ever wider for Chinese companies exporting here? I don't get it. The "made in Japan" of the 70's is, "made in China" today.What can we sell that nation that will even come reasonably close to balancing trade? TownCrier (05/24/00; 20:25:04MT - usagold.com msg#: 31200) Snake oil... Sir goldhunter, you have now offered the comment that "an opinion that futures (gold or otherwise) has no connection with "cash" is non-sense"What is it that you are calling "cash"?To be clear, in my (msg#: 31184) I said, "You know exactly how futures contracts are priced--having no necessary connection to real gold availability, but rather the supply and demand of the contracts themselves. And if you can't lure the innocents into your shearing house to maintain the illusion of a viable instrument, the game is over and only physical positions will carry the day."And in your own (msg#: 31115) you do indeed show that it is the futures contracts that lead the way on price discovery, saying yourself that "physical is (usually) priced from futures".To which I concurred, and made the following remark in (msg#: 31135) "That being the case, a person might make a grave error were he to expect the futures prices to broadcast a breaking point being reached with the physical market. The most favorable acquistion opportunity will be past before anyone can react."Further, in your (msg#: 31190) you said with the coolness of a cucumber, "Remember...it's not win or loose...it's just another vehicle to make profits..."You seem to discount the principle reason most people take a position in gold, that being a bastion against turmoil in currencies and general default against obligations. Gold, it must be admitted even by you, stands its own ground and is not the liability of another person. The same CANNOT be said of your futures contracts which come with a counterparty risk firmly attached, and the prospect for changes in rules mid-game.So, Mr. Futures Broker, what are we to do...buy a couple K-rands, and then flock to your door in want of futures contracts so as to bring about the higher COMEX prices so many people continue to look for in vain so that their K-rands gain in value? Better still is to sell our gold in order to have more money with which to bring to bear on the COMEX long positions. Surely THAT will be enough to send the determined shorts home with their hat in their hands. Give me a break. There is no force that can be brought to bear against any such determined short sellers save for breaking the credibility of the market altogether with the unavailability of real gold at these COMEX-determined prices.In your (msg#: 31180) you said "I gave a sort of pat on the back for a plan being instituted, a "well-done" if you wish...because the person took an idea to get ahead, and acted on it..." And in your first post yesterday (msg#: 31101) you also said to that individual "you have done a great job...you have come up with a trading plan, and you have put it into force...GOOD JOB! Developing and putting your plan into action is more than most will do for themselves."You imply that those of us who see the benefit in using our strong dollars to take ever more gold off the table as it remains available are somehow not to be similarly congratulated for coming up with our plan, putting it into force, and acting on it.You further said to this person, "Your plan is a very good one, with limited risk of dollar-loss...if futures stay the same, you simply roll forward, and you earn a T-bill return while you are waiting...I see this as safe, wise, and PROFITABLE when the "gap-up" arrives(eventually)..."Here is where the harsh slap of reality would surely set your head back among the land of the living. Where was your caution about COUNTERPARTY RISK while you were sending sunshine up his nether regions and whispering sweet nothings in his ear???! That very same "gap-up", were such a thing to actually happen again, could very well end up teaching your flock a tough lesson about counterparty risk. It is undeniable that the mini "gap-up" following the Washington Agreement created much termoil, and many traders complained of poor trade executions and adverse spreads. And yet, the determined shorts prevailed, and here we are today. They have surely learned a lesson that against even the most remarkably bullish bombshell, they can keep their cool, and keep selling futures into the ground. What has changed, or what will change in that regard? Only the day where your paper is discredited and physical is king.And finally, in your (msg#: 31190), you are quick to assure us all that "There is no rounding up clients here...no ulterior motives".Yet, let's review your path of breadcrumbs, and decide whether or not a pattern in taking shape and a foundation is being laid...In your (msg#: 31101), you said, "I wish more of my clients traded like you are trading..."Then in (msg#: 31152), you do more spadework with the "all-in-good-fun" comment: "Sir FOA...you probably "bought Dec. Gold at $283...not $383" or else you need a new broker...give me a call..."And then, in your recent (msg#: 31180) you provide the disclosure "I am a futures broker." (*gasp*! can it be true? I had no idea!)How many more posts will it be before we all know where to contact you so that we all might be further beguiled by your charms, separating us from our sure and steady path of truth, not to mention our hard earned accumulation of wealth?A final question. In your disclosure, you said in full, "I am a futures broker. (I have bought more Eagles than most lately.)"Why do you have these Eagles, when you are so clearing on an inside track for executing the same paper position for yourself that you so strongly supported for Sir BTD?As for me personally, I do not so much care what choices a person makes with regard to their individual investment dollar. What I do take exception to are sales pitches that lead people away from following a path toward truth, particularly when it is done not to someone already hopelessly lost, but to those already on the path. You should seriously consider pitching your wares at the internet stock chat sites. Given their performance lately, you will likely be able to drum up lots of customers, and thus keeping the COMEX market viable at least until the real gold runs out. R Powell (05/24/00; 20:17:33MT - usagold.com msg#: 31199) Good, honest coverage of COMEX gold trading http://www.swiss-financial.com/cotton_market.html Goldhunter, as you have identified yourself as a future's broker I thought perhaps you might know of a link where we could get blow by blow reporting of the floor trading of the gold market similar to what the above site provides for cotton. We'd love to know just who is buying/selling and when and how much. This link's coverage varies day to day of course but has stated (and named the buyer of ) that 500 Dec. calls at $0.63 were recently purchase in this market. Wouldn't we love to have similar insight into just who is buying/selling and for what months and how much etc. Does this type of reporting exist for the precious metals markets? Al Fulchino (05/24/00; 20:17:18MT - usagold.com msg#: 31198) REPOST REPOST but well worth it Why are banks against gold? -- Larry Parks (GOLD.com) May 24, 19:28 "Increasing gold prices threaten the financial sector's unearned profits: What does this have to do with gold? First, as noted above, if there were a link between goldand our monetary unit, the central bank and the FDIC would not be able to implement the subsidies and the unearned profits/revenues described above would not be possible. Those who profit from the creation of fiat money understand this and share a commonality of interests in suppressing gold. Second, gold is a dagger pointing at the banking system's heart because virtually allWall Street professionals, the establishment news media, and academia use the price of goldas a leading indicator of inflation. Money creation (a.k.a. bank credit expansion) and theprofits that flow from it depend on interest rates staying low. An increase in the gold pricewould signal imminent inflation initiating a chain of events that would be very detrimental to thebanking system: · Interest rates would be bid up;· Business relationships that were entered into based on lower interest rates, e.g., almost the entire U.S. home mortgage market is now linked to variable interest rates, would begin to unravel;· Bank assets would become impaired; · Derivative leveraging and the mismatching of assets and liabilities, which is the essence of commercial bank credit creation, called "fractional reserve lending," would unwind; · And, the profit bonanza would come to a screeching halt. Simply put, if the gold price goes up, the fiat-money-induced bonanza for commercial banks and for Wall Street firms, who garner transaction fees on the fiat-money creation and who also engage in subsidized gambling, will go away. In my view, this is what FederalReserve Chairman Alan Greenspan was alluding to when, before the Committee on Agriculture, Nutrition, and Forestry, U.S. Senate on July 30, 1998, he testified: ". . . central banks stand ready to lease gold in increasing quantities should the price rise." Larry ParksExecutive Director - FAMEFoundation for the Advancement of Monetary Education Cavan Man (05/24/00; 20:02:35MT - usagold.com msg#: 31197) SteveH No butter for me and I do prefer sea salt please.I'M here for the full length feature. Why am I thinking (just now) of Lawrence of Arabia? TG is Peter O'Toole--no way! (when you smile the whole world smiles with you).Something's rotten in Denmark....CM R Powell (05/24/00; 19:55:49MT - usagold.com msg#: 31196) Futures markets and manipulaters The futures markets as an industry provides a means of discovery for fair market value of a certain quanity and quality of a particular item at a certain time. It's a means of providing a market for the seller and a place to buy for the buyer. Speculation for profit in these futures provides the opportunity to the buyer or seller to transact business at any time. The market CAN be manipulated but is NOT the cause of manipulation. If a radio reports bad news, do you hate the radio? The radio is the means of communication not the cause or origin of the bad news. Futures markets are not going to dry up and cease to exist. What will happen is that the market will adjust when the manipulation ends and it will do so IMHO violently. Indeed, it may be the market itself that sends POG much higher, not the end of the market that does so. Again, one man's opinion. GO GATA! SteveH (05/24/00; 19:54:59MT - usagold.com msg#: 31195) First things first... Natural gas is going ballistic. There, I said it. All oil and gases are up tonight. Gold is limp. Same with silver. Euro came back a bit, but is holding for now. The Duck (NASDAQ) and DOW brought to Moneyline tonight the question, "Is the downside over?" Not by a long shot, baby! One analyst said he thought that the Duck wouldn't drop below 2900 (but if it did, that would be bad). Unfortunately for him, I have this nagging sense that he is suffering from the syndrome of wanting one thing and will bet getting another, as we gold bugs have been so infested with.Now, if you ask any true blue American what they think of gold you are likely to get a laugh and a shrug, "It's dead, man."Could it be this negative sentiment is the result of a disinformation campaign to take the consumer out of gold and keep them out? Certainly, the Brits and the ESF involvement in the gold market that is getting more and more visible thanks to Bill Murphy and the rest of us is just to small of a market to have the "people" involved. Somehow someone said once, "Let's trade gold between countries and keep the common folks out of it. To do that, we are going to have to create some small exchange where we can control the price but trade the big stuff behind the scenes. Then, we will put out the 'bad' word on the street that gold is dead and now just a commodity. That will accomplish what we want, yes indeedy." That this farce is allowed to continue while we all thought the game was fair, is a tad irritating. Since we have to watch it happen and even verbally complain from time to time, at least we can enjoy it. Before the intenet (BI), we would never had a clue all this was going on, until it was old news. Not any more. All that is now changed. Pull up a seat, things are just starting to heat up. Popcorn? Al Fulchino (05/24/00; 19:43:06MT - usagold.com msg#: 31194) correction I wrote:Al Fulchino (5/24/2000; 10:54:37MT - usagold.com msg#: 31162)TH/BTD/goldhunterThank you all for your exchange the last two days. It serves a wonderful purpose to match the trails side by side. should have been TG (Trail Guide) not TH... one needs to be clear if he is going to post...yes I should. Al Fulchino (05/24/00; 19:33:16MT - usagold.com msg#: 31193) (No Subject) HI - HAT (05/24/00; 18:32:40MT - usagold.com msg#: 31188)"I do trust the buried "CORE" gold and silver.Buried Treasure......Pirates have more fun."AF/ Hi Hat..where do u live?? <smile> Cavan Man (05/24/00; 19:04:06MT - usagold.com msg#: 31192) goldhunter Sir,You are talking about apples and many are speaking of oranges. Truly, both positions hold promise for profitable resolution.You apparently are not concerned with the monetary argument for physical gold ownership at this point in market history. That's OK. I for one am glad to have the choice between vanilla or chocolate.Post on! (good luck) Canuck (05/24/00; 19:00:09MT - usagold.com msg#: 31191) (No Subject) http://www.goldensextant.com/commentary8.html "In any event, anyone -- friend or foe -- with a spare $300 million who cares to bid $370/oz. for the full amount of the next British auction could more than likely crash the gold banking system with consequences far more serious than those threatened by the failure of LTCM. Not long ago Marc Faber publicly suggested to Bill Gates the investment merits of switching his almost $100 billion of Microsoft shares into gold." ---------------------------------------------------------Go Billy Go, smoke the BOE!!!!!!!!!Canuck. goldhunter (05/24/00; 18:40:15MT - usagold.com msg#: 31190) "Rounding up" the truth http://www.usagold.com Sir Crier...There is no rounding up clients here...no ulterior motives...honest, ethical people need none.We will see the true value of each "position" Dec 1, 2000...a 6 month "profit window" to see clear profits...a fair period for each...If you're not up to the challenge...?Remember...it's not win or loose...it's just another vehicle to make profits...By the way, an opinion that futures (gold or otherwise)has no connection with "cash" is non-sense..."believe it" Canuck (05/24/00; 18:39:39MT - usagold.com msg#: 31189) BOE Auction @ T.C., Canuck Gold, Strad MasterThe part of the auction that I have never followed is if I was really (desparate) short physical why couldn't I bid $325 (say $50 over spot for discussion sake) for 24 tonnes to ensure 'allotment' knowing (or hoping) that the next and last tonne was at or near spot. This example is probably far-fetched but since we can never know the bids who can say what happens.From T.C.,"While it is true that the entities eligible to bid at the UK auction are principally members of the LBMA, and therefore potentially able to engage in some form of collusion to bring about the $1 bid as you've suggested, the BOE reserves the right to reject the bids as it sees fit to do so. But also, because bidding is conducted in a closed and secretive manner, the potential for double-crossing or one-upmanship exists among the would-be conspirators, not to mention the left-field effects of bids by other qualified participants such as CBs and other BOE depositors with bullion accounts"---------------------------------This is what I alluded to Tuesday morning just before the auction. The bids can be managed to present a ratio that that doesn't rock the boat. Convenient that the bid ratio was 2.7 at a stinking 'nickel' over spot isn't it?Do you guys recall the article "2 Bills and a Scandal" (I think it was Howe). Imagine if Bill Gates (through correct channels) presented ten 25 tonne bids at a $100 over spot.Far-fetched and I am sure the bid would be allowed....not.The BOE auctions represent the imagination of the scum sucking vermon of the earth. I will find the article if anyone is having trouble. HI - HAT (05/24/00; 18:32:40MT - usagold.com msg#: 31188) TRUST I have been buying and holding gold and silver for 26 years,because, I don't trust the Federal Government, I don't trust the Law, I don't trust paper, I don't trust the markets, I don't trust the I.R.S., I don't trust the System.I do trust the buried "CORE" gold and silver.Buried Treasure......Pirates have more fun. Netking (05/24/00; 18:17:42MT - usagold.com msg#: 31187) Sir Town Crier(31179) TC - Thanks for sharing your wisdom, as usual it's worth it's weight in Gold. I long for a repeat of 1980's price of $500+, a gain of 1,000% up on current price levels. Cheers Netking PH in LA (05/24/00; 18:16:51MT - usagold.com msg#: 31186) Reposts Rare glimmerings of rational thought from that other forum today. Why don't these two guys move over here and save us the disagreeable task of wading through so much nonsensical rubbish to find their posts? Date: Wed May 24 2000 19:15 rhody (LEASE RATES: lease rates dropped across the board today,) ID#410367: Copyright © 2000 rhody/Kitco Inc. All rights reserved for all pms. Gold tightened the most, with spreads between short term and long term lease rates narrowing to .82%. The pattern is and has been the one month rate falls, but less than the one year rate. So, we slowly tighten, even as leasing itself dies. The quicker fall of the one year rate indicates a drying up of producer forward selling. All of this is bullish long term. An end of leasing/forward selling is what will set the pm market free. Next will come the death of options trade as the longs decide to exit this rigged market. Then with the first default, we do a TOCOM in gold or silver, and the fun begins. Bullion bank failure follow failure as owners of gold certificates show up for their metal, and find there is none. I wonder how many of those things have been printed for every ounce of gold in the vaults. Date: Wed May 24 2000 19:53 ted butler (@Rhody don't lose that number, you might use it when you get home) ID#370209: I'm a sucker for a well-turned phrase. In the grand "hedge fund in drag" tradition, where a simple phrase explains so much, Rhody goes down in history for...... drumroll,,,,,,,,,,,,,,,"do a TOCOM" Just perfect. Netking (05/24/00; 18:05:26MT - usagold.com msg#: 31185) R Powell Re; Futures(31183) Doesn't W.D.Gann's track record just make you so mad!..... "one day Roger Phipps!..." TownCrier (05/24/00; 18:02:23MT - usagold.com msg#: 31184) Sir goldhunter's 31177 wager... You said: "I'll wager that when all is said and done...Pick your gold price and will give it till Dec1, 2000, and we'll visit the shop for a quote to sell our physical Krands and we'll take the Comex close that day...Oh yes, do not forget to add "interest" on to the Futures profit."Whether you realize it or not, you have now aptly discredited your siren song by your very distinct sounding of notes out of tune with a REAL world in which we must all live. That is quite a feat for such a brief post! How did you do it, you ask?You suggested your strategy's vindication would come "when all is said and done", at which you promptly offer a specific date (Dec 1, 2000) as the proving ground! HA! I nearly pitched over the back of my chair and fell off The Tower!!I laugh indeed at your little ploy, and suggest that my position is not one to be fully appreciated on a randomly selected or knowable date (such as Dec 1, 2000), but truly at such a time "when all is said and done".You strike me as a futures broker trying to round up prospective clientele from among this convenient crowd that have gathered here on the close path of understanding the interplay of these various paper currencies and the closely related futures acting as the very necessary paper substitutes for real and reliable wealth to preserve the current system. The sooner your futures business dries up and the distraction of gold substitutes is no longer seen to satisfy the American appetite for gold in their portfolio, the sooner the real relative value of gold will become apparent to all...through much higher prices. This will happen with or without American investors (though sooner with) as the balance of the world is taking real gold off the table.You know exactly how futures contracts are priced--having no necessary connection to real gold availability, but rather the supply and demand of the contracts themselves. And if you can't lure the innocents into your shearing house to maintain the illusion of a viable instrument, the game is over and only physical positions will carry the day. And you KNOW it. And when is that day we speak of? "When all is said and done." R Powell (05/24/00; 17:33:29MT - usagold.com msg#: 31183) Physical and speculation Just want to add that "playing" in the futures market while sometimes profitable and fun can also be risky business and very costly. I know this from experience. And this is probably the biggest difference between physical in hand and leveraged speculation. I love both! Leland (05/24/00; 17:27:07MT - usagold.com msg#: 31182) From Our British Cousins Hooked on the Net Gamblers Anonymous in the UK GamCare Gambling charities are finding that a large number of 'day traders' are in need of help. Teresa Hunter reports BRITAIN'S two largest gambling charities report a surge in desperate pleas for help from people suffering from a compulsive urge to buy and sell shares. Gamblers Anonymous and GamCare revealed last week that they are seeing the first cases of distraught "day traders" - people who endeavour to make a fortune through a rapid turnover of shares - who are unable to kick the habit as losses mount. Although new to the UK, the practice is well-established in the US, where guessing the market wrong has resulted in murders and suicides. The charities fear that the recent sharp rise in internet trading will lead to an increase in incidences of people who, having already lost every penny they can beg, borrow or steal, are unable to resist one last punt because this time they know they've picked a winner. According to GamCare, which specialises in researching gambling disorders: "The numbers so far are very small. But, oh yes, it's started." Gambling on the stockmarket is no different from any other form of betting, says a spokesman for Gamblers Anonymous. "The difference between a compulsive gambler and an ordinary one is that when they make a loss, they just can't walk away." The numbers of people potentially at risk are rocketing. More people bought and sold shares in Britain this year than went to football matches, according to the Association of Private Client Investment Managers and Stockbrokers. Over the past three months internet trades soared by 150 per cent and now account for a quarter of all execution-only business. Overall, private individuals struck 6.3 million deals - 50 per cent more than in the previous quarter and by far the biggest volume yet seen. The internet is cited as the principle reason. According to APCIMS, online traders deal much more actively than conventional investors, which puts them at a greater risk. Furthermore, six in every 10 internet traders have invested at least 60 per cent of their portfolios in volatile stocks - the type that, according to conventional wisdom, should be reserved for a tiny part of your overall investment strategy. Justin Urquhart Stewart of Barclays Stockbrokers said: "It's got nothing at all to do with investment. It's just gambling and getting turned on by the thought of getting something for nothing." Jeremy Batstone of NatWest Stockbrokers said: "The tragedy is that it becomes like a drug for some people. It stops being about making money and gets to be about the buzz, the high you get every time you strike a deal. And the truth is that's a feeling that money can't buy." Howard Davies, chairman of the Financial Services Authority and Britain's chief financial policeman, has already warned that 70 per cent of day traders in the US lose money. So why do they do it? Technically day trading involves buying and selling shares within a day, which could include holding a position for as little as 30 seconds. At the end of the day, the books are cleared. In the US it is endemic, and not uncommon for people to abandon careers in the hope of making a fortune on the Net. It has been slower to catch on in the UK, largely because technology has advanced less rapidly, but also because deals over here are subject to 0.5 per cent stamp duty. This means you have to make a 0.5 per cent turn before you see any profit. Stamp duty is hardly a huge disincentive when it comes to a "10-bagger" a share which rises 10-fold in a short space of time and is every trader's dream. In Britain, day trading has come to mean aggressive internet trading that also takes in futures and spread betting on indices or stocks. So far, spread betting is throwing up the biggest problems, but it has been around longer. It involves betting on where a chosen stockmarket index or individual share price will be by the end of the day or in a few days' time. Spread betting is a two-way gamble. If you get it wrong, you may lose not only your stake but also a lot more money besides, depending on how wrong you were. And these losses can ratchet up at an alarming rate. The most notorious day trader of our time is George Soros, the man who nearly broke the Bank of England. A self-confessed gambler, he once boasted: "I play the game better and bigger than most." He pocketed £600 million on Black Wednesday by betting correctly that Norman Lamont would be unable to shore up the pound. But day trading is not strictly a new phenomenon. In 1815, Nathan Rothschild received advanced warning of Britain's victory at Waterloo, upon which he began selling Government stock as fast as possible. The rest of the market followed him like lemmings, believing that Wellington had been defeated. When the stock finally hit rock bottom, Rothchild placed a massive buy order and made a fortune when news of victory broke and prices soared. The advent of the internet has upped the stakes and increased the perils, intensifying as it does the speed - and the thrills - with which this kind of operation can be pulled off. It has also brought trading to everyone's living room. The biggest problem is that the internet has helped to blur the distinction between investing and gambling, says David Cohen, the psychologist and author of Bears & Bulls: The Psychology of the Stock Market. He said: "Five years ago, there was a defining line between people investing and those who were gambling. The internet has changed that." Dr Mark Griffiths, GamCare chairman, head of psychology at Nottingham Trent University and one of the country's leading experts on gambling addictions, agrees. He said: "The arrival of spread betting pushed back the boundaries between investment and speculation. The big difficulty with the stockmarket lies in the scale of the exposure. When you buy a lottery ticket you know exactly what your loss will be; with the stockmarket you don't." Those at greatest risk are newcomers who start trading when the market is rising. He said: "People don't engage in behaviour that they get nothing out of. They do it because of the rewards - initially, at least. It makes them feel good. They get a rush of adrenalin. Their heart races. Their self esteem improves." Urquhart Stewart describes the feeling as the "walking across Galilee factor". The young "electronic Henrys" who get a buzz from the internet started off in a rising market, he says. Some made a lot of money. He said: "But, unlike those of us who have been around a bit longer, they've never seen the downside." And once they become hooked, they need bigger and bigger fixes to create the same sense of euphoria. They have to bet higher and more dangerously. According to Mr Cohen, extroverts are the most vulnerable. He said: "It's all to do with the biochemical constitution of the brain. People literally can't help themselves. Extroverts are inherently sensation seekers who thrive on risk. Introverts are much more cautious." These people need a stockbroker to keep them under control. Mr Cohen said: "A decent broker will stop you doing crazy things and say: 'No, that's not a good idea'. They will do their damnedest to stop you making huge and disastrous mistakes." Financial advisers tell of 80-year-old widows and other normally cautious investors who recently started calling up with instructions to "sell everything and buy the internet". Margin trading, where investors borrow against the value of their existing portfolio to buy more shares, can only fan the flames. Killik & Co is the sole stockbroker to provide margin trading accounts at the moment, but American and Canadian-owned execution-only brokers are planning a big push in the UK. There is some evidence that recent setbacks in the US market coincided with banks closing in on debtors. A wave of margin calls also sparked much of the enforced selling that led to the 1929 Wall Street crash, and the ensuing global depression that lasted throughout the 30s. But that, as they say, is history.(Thanks to the TELEGRAPH, And Fair Use For Educational/Research Purposes Only.) R Powell (05/24/00; 17:24:19MT - usagold.com msg#: 31181) Trading vs Possession I enjoyed reading of both BTD and Trail Guide's decisions to invest/speculate/trade in the futures market. To those who condemn all futures and options trading, I submit that if enough long positions are bought, the price (currency price)of physical will rise. BTD explain his position very well. Trail Guide has taken the same position with (I believe) the intent of examining the financial returns of the COMEX position vs holding the same amount of physical. Please correct me Trail Guide if this is not correct. However, simply buying and holding a futures position is not trading (meaning action concerning one's position to make money). If this is the intent then buying and taking possession of physical gold makes more sense, no? I haven't the capital to take a similar position but do own gold call options which I trade. I buy near the money (current POG) calls and place orders to sell higher calls (further out of the money calls) for about the cost of my near the money calls. When the POG goes up my orders are filled and I regain my investment and still stand to make money on the difference in price between what I own and what I sold. Enough of this. My point is that trading on the COMEX and physical gold in hand are two entirely different animals. Physical possession is of course desireable for a multitude of reasons while trading futures or options is a business investment/speculation (mostly short term) and one most often meant to be "played" or traded. Even the American farmer might sell and repurchase the crops growing in his fields many times over between planting and harvest. The market offers him a longer time frame in which to secure a good price for his crop. Imagine the price of corn if every farmer sold at the same time just after harvest? Good for the baker but the farmer would go broke. I believe owning gold and/or silver is extremely smart and trading futures/options can be extremely profitable and great fun. Precious metals investment can also be done through funds that invest in futures, mining stocks And physical. The three are related but not the same and IMHO not at odds with each other as some seem to feel. All of this is simply one man's opinion and should be recieved as such. GO GATA!! goldhunter (05/24/00; 17:21:17MT - usagold.com msg#: 31180) Profit Vehicals... http://usagold.com Funny thing happened last couple days...A gold fan sold some physical, bought some gold futures (Comex) and the "Home Team" ganged up on him...(or her?)I gave a sort of pat on the back for a plan being instituted, a "well-done" if you wish...because the person took an idea to get ahead, and acted on it...What some should consider is thst we are all "team-mates" not opponents...We all care to see gold rise (it will)...and we are trading, buying, or positioning to profit from that increase in gold price.The "challenge" seems to be "whos' is bigger" and that isn't the point...All "longs" want to see the price rise...period.The investment vehical of choice seems to be the issue that bothers some...paper (futures) or physical (coins)...The commercials,& speculators big and small deal in both, and one or the other isn't right or wrong for EVERY case...We can all follow our FOA's example...Krugerands @ $292 ea.Or Dec. Comex futures @ $293.30 ...(today's prices...check it out)You will be surprised at the end...The difference will be tiny (in favor of futures, my bet)...and some will learn, some already know, and some won't believe nor care...We come to help each other...for profit...and when gold moves we will have profit...get ready. The Bull is coming.Disclosure:I am a futures broker. (I have bought more Eagles than most lately.) TownCrier (05/24/00; 17:03:07MT - usagold.com msg#: 31179) Reply to Sir Netking's morning question... You asked:"Sir Solomn Weaver & Sir Town Crier: So given your arguments in the dicussion of Gold & Silver, and Gold vs Silver, is not the propensity for percentage increase still greater (much) for Silver than Gold even if the currency (USD) takes a hit & we see the fundamental change of the currency link & store of value aspect (for Gold)?"I've got to come back to my comments offered yesterday, in part: >>>Which metal, as a whole world of probable events play out, will provide the superior wealth value in exchange for other assets (or currency) in the future? In my book, the market's failure to recognize gold's current role/importance in the monetary world provides the prime opportunity to benefit when perceptions receive their overdue reality check. ... Money/currency has a unique ability to take on "additional value" due to its role. Just look at the value found in Federal Reserve Notes. Were they not to find use as currency, their value would plummet.<<<In hypothesizing an answer to your question, I would start by making liberal use of Occam's razor (cutting away wild or fantastical possibilities) and building simply upon as few variables as possible. Once we have established such a basic projection (hypothesis, outcome, what-have-you), you are free to fold in whatever other elements you deem necessary to cover the bases for variants.With your starting point that the U.S. dollar "takes a hit", one might reasonably expect that the prices of everything would go up together and proportionately. That assumes that the dollar is uniformly devalued or discredited. Gold and silver would be in the same boat, and rise together...along with everything else. (In this sense, holding either one would maintain your purchasing power.)If the "hit" it takes is on the foreign exchange markets, then the prices of imported goods could be expected to lead the march to higher prices. Are gold and silver in the same boat? Well, as commodities, you can check our domestic production and use along with our import and export figures for the basis of a conclusion for short-term leadership. In the long run, however, the domestic-weighted prices will be pulled up to match the international (import)-weighted prices. But in reality, given its capacity as a monetary asset, gold would in either case react at light speed to reflect a falling dollar on the international exchange, and would lead the way to reflect higher prices.Each tradeable "good" finds its relative market value based on its use; and the demand for that use, when balanced against its supply, will result in the establishment of an appropriate price relative to all other things.So here we come down to the mental exercise. Given a general discrediting of the U.S. dollar, how will the local and global economy be effected, and what will be the subsequent demand and use for silver then compared to now and relative to the demand for all other things?Similarly, what will be gold's (new?) role at such a time? Real monetary demand among those "with eyes to see" will ensure that at the end of the day, not only will gold maintain its ratio above silver at a future higher price for both as quoted in any given national currency, but gold would in such a time greatly outpace silver based on gold's unique monetary role for all the world to see...Chicago and New York brokers included among them.You asked for the thoughts from The Tower, and there you have them. Salt not included. You will want to season them to your own taste preference. Farfel (05/24/00; 16:59:47MT - usagold.com msg#: 31178) The Naz bounced upward today as I forecast yesterday As per my post here yesterday, I expected today's Nasdaq bounce on account of this China WTO scam. I call it a scam because it has been expected now for several months and discounted into the market time and time again. What's more, the Chinese are notorious for pirating technology so good luck in getting them to pay for American tech products.In fact, why should investors even care about China? WHen China announced it would allow citizens to buy gold, the gold price did not react positively whatsoever, despite a potential billion new customers. The whole China WTO thing represents another great opportunity to get the small investors excited, pop up the Nasdaq, then sell another $40 billion of ipolockup stock into the euphoria.The Nasdaq is in full bear market mode and the proof is thatfor the last 15 minutes of trading today, the tech averages simply stagnated. Contrast that to any other time where the market races up some 200 points in an hour or so. Normally, in the old bull, the market simply continued racing upward right past market close. However the stagnation at the end occurred because pros were sellling into the "China expectation." It seems today's push job by the MM's to attract investor interest apparently failed.THe Naz might have some rally tomorrow but if it fails, then the next dump will be very dramatic. Monday is the next disaster day with another huge bundle of lockup stock ready to hit the market.Bonds were weak today, the dollar remained strong however. Not for much longer though.All this means the gold suppression efforts of the Wall Street Establishment will soon end as their attention will soon be directed exclusively to protecting the stock market bubbleThanksF* goldhunter (05/24/00; 16:55:50MT - usagold.com msg#: 31177) TownCrier:31173 http://www.usagold.com Hey Mr. Crier...Amway Distributor...that's a good one...I'll wager that when all is said and done...Pick your gold price and will give it till Dec1, 2000, and we'll visit the shop for a quote to sell our physical Krands and we'll take the Comex close that day...I'll wager that my futures "pencil" is sharper than your tongue...Oh yes, do not forget to add "interest" on to the Futures profit... SHIFTY (05/24/00; 16:45:27MT - usagold.com msg#: 31176) N.Y. Ponzi Nasdaq 3270.61 + Dow 10,535.35 = 13,805.96 divide by 2 = 6,902.98 Ponzi Up 109.57 Ponzi pointsThe ppt ( Ponzi Protection Team ) was busy today!!$hifty HI - HAT (05/24/00; 15:56:52MT - usagold.com msg#: 31175) DOLLAR EMPIRE They're bringing on the HEARTACHEOh can't you see ; Oh can't you see Hill Billy Mitchell (05/24/00; 15:47:03MT - usagold.com msg#: 31174) Official release http://www.bog.frb.us/releases/H15/update/ Official: Federal Reserve Statistical Release Release Date: May 24 2000 Rates For Tuesday, May 23, 2000Federal funds 6.47Treasury constant maturities: 3-month 6.0110-year 6.4520-year 6.5830-year 6.17upside-down spread FF vs long bond = (.30%) TownCrier (05/24/00; 14:51:51MT - usagold.com msg#: 31173) Sir Strad's question, and other comments to all While it is true that the entities eligible to bid at the UK auction are principally members of the LBMA, and therefore potentially able to engage in some form of collusion to bring about the $1 bid as you've suggested, the BOE reserves the right to reject the bids as it sees fit to do so. But also, because bidding is conducted in a closed and secretive manner, the potential for double-crossing or one-upmanship exists among the would-be conspirators, not to mention the left-field effects of bids by other qualified participants such as CBs and other BOE depositors with bullion accounts.In the end, gold remains available today at these prices thanks to the ability of paper substitutes to satisfy a portion of the investor demand, or to effectively draw forth future gold to satisfy today's demands. The prevalent complaints voiced against Barrick gold are a case in point, as are the actions or preferred strategies as voiced recently by BTD and goldhunter.As goldhunter would seemingly have it, everyone would be well-advised to be an Amway distributor directly, and forego the benefits of the actual products.As I see it, the dollar has been set up as a paper substitute for gold. But where that has failings which causes people to still seek the benefits of gold, yet another paper substitute was set up as a diversion: gold futures--the necessary partner of the dollar for an all paper world. Dollars could be used for currency needs, whereas gold futures would satisfy the unwary individuals' impulses to hedge their currency value for any potential collapse against gold. Unfortunately, these people do not realize that their strategy, while looking good on paper, remains in the long run to be one hamburger patty shy of a cheeseburger. Where's the beef?I'll tell you. While Americans have historically been notoriously experimental with banking and paper schemes to gain riches without effort, the rest of the world hasn't bought into this. Real gold remains in its role as real wealth and real money, and they are taking advantage of the U.S. disinterest, or should I say distraction, with the paper substitutes. (Hopefully you saw the post I provided recently on the World Gold Council's latest gold demand figures. On top of that you have the continuation of mind-numbing gold export numbers each month from the U.S.Dept. of Commerce.)If you come to gold with a mind to protect yourself against a failing of the dollar, how can you possibly hope to survive using a paper position that is in bed with that very same paper dollar system?Of course, if you are simply looking for a way to make easy profits with the premise of the continuation of a fully functioning strong dollar, then you would be wise to see early on precisely what true role is being served by the advent of these gold derivatives. You will find that your paper games are more fruitfully played (for paper profit) elsewhere in this wide economic world of options and opportunities.Paper contracts in any form (currency or futures) are the antithesis of gold, and to think that you (being any person in general) have locked in the ture benefits of solid gold ownership through an alternative use of a paper system (futures) is naive beyond my ability to comprehend.When real gold no longer comes to the table from the supply currently in weak hands, you will find that your gold futures contracts are no stronger than the dollar that denominates them. A tough lesson, to be sure, and yours to learn the hard way if you choose. Henri (05/24/00; 13:35:06MT - usagold.com msg#: 31172) Elwood Thanx for da linx! Elwood (05/24/00; 13:06:47MT - usagold.com msg#: 31171) Henri, Gold Exports http://www.geocities.com/goldtango/analysis1.htm See the above link updated for latest figures to March 2000. The Excel 97 file that holds the data is at:http://www.geocities.com/goldtango/goldxports.xlsElwood Clint H (05/24/00; 13:02:55MT - usagold.com msg#: 31170) PPT, can they do it? Well it looks like the PPT has had to step in four times today, so far. 10:00, 1:00, 1:45 and 2:15. It is getting difficult to hold all the markets up at once. Strad Master (05/24/00; 12:59:09MT - usagold.com msg#: 31169) Town Crier and Canuck Gold Thanks Thanks, good knights, for your kind and prompt reply. Now I understand, but it still makes little real sense to me. Why don't they all just bid $1? (That's what I'd do.) If the last remaining bidder bids $1, even if all the others bid $30,000 would they all receive the gold at $1? I know that sounds preposterous but I am just trying to comprehend what, to me, seems a very peculiar way of conducting an auction. Henri (5/24/2000; 12:39:42MT - usagold.com msg#: 31168) Town Crier its Kismet! I recall having done a exactly similar thing to you a week/month ago which you caught. My how the illusion of time runs apace! Could a month have gone by so quickly? Henri (5/24/2000; 12:37:11MT - usagold.com msg#: 31167) Help? I would like to get a good reference for the material presented a few days ago about the amount of non-monetary gold leaving the US since the WA. I think it was an artical by Howe or Venroso but I can't seem to locate it. Was it posted on this forum? A link? TIA TownCrier (5/24/2000; 12:31:39MT - usagold.com msg#: 31166) Sorry Sir Henri, and right you are.... It was indeed Sir Elwood I meant. Scrolling back I can see where I made the mental switch...there had been a post by PH in LA that mentioned both BTD and Henri in the subject line, driving out my own intent to craft my post to BTD and Elwood. Thanks for the good catch! Canuck Gold (5/24/2000; 12:24:55MT - usagold.com msg#: 31165) Strad Master (5/24/2000; 11:39:51MT - usagold.com msg#: 31163) The term "Lowest accepted price" is derived from the fact that the gold is sold to ALL successful bidders at the lowest price bid for gold that is still on the table after higher bid quantities have been allocated. For example, if there are bids for 10 tons at $290, 10 tons at $285, 3 tons at $280, 1 ton at $277, 2 tons at $275, 2 tons at $274, 5 tons at $273, 10 tons at $272, 10 tons at $271 and 10 tons at $270. The 10 tons at $290 are allocated, then the 10 tons at $285 are allocated, then the 3 tons at $280 are allocated and the 1 ton at $277 is allocated. That leaves 1 ton on the table to be pro-rata shared between the bidders for 2 tons at $275. The rules of the auction state that ALL the gold (even that for which a higher price was offered) will be sold at the "lowest accepted bid". Hence all the gold will be sold for $275. Normal auctions accept the prices offered but in the case of gold, that would have resulted in the average price per ton being $285.68, which is significantly higher than $275. Those rules were obviously designed to drive the price of gold down. CG TownCrier (5/24/2000; 12:21:47MT - usagold.com msg#: 31164) Sir Strad Master's question on the UK auction Hello, good sir! It all becomes clearer when you first are told that the auction is not your typical open outcry auction where participants can outbid each other in full view.It is a closed auction process whereby they submit written bids for a quantity of gold desired and their price. Knowing that there is a limited quantity of gold available at the auction, the incentive is to bid the price somewhat higher, because the highest price will be awarded all of the gold he bid on. If any gold remains, it goes to fill the next lower bid, and so on until the gold supply is exhausted.In the interest of fairness, with each party receiving their gold at the same time, the auction arrangements are that every successful bidder will be awarded their quantity of gold at the bid price that took the last remaining gold from the table...known as the lowest accepted price.One might be inclined to think that with the confidence that an ultra high bid will only secure the desired gold for a party, but wouldn't actually be paid by the top bidders, the psychology of such an auction arrangement could tend to produce favorable auction results for the selling party...each one bidding just a wee bit higher than they otherwise would.What is continuously interesting to me, is that the lowest accepted bid at these auctions has been consistently higher than the London morning gold fix price quoted shortly before. Why, I ask, would someone hassle with an auction process to pay HIGHER prices than could have theoretically been obtained at spot prices just moments before on the open market? I think the key term is that the gold on the open market could only be gotten "theoretically". Strad Master (5/24/2000; 11:39:51MT - usagold.com msg#: 31163) USA Gold Huh??? Could you clarify what is meant by the "lowest acceptedprice"?? I always thought that at an auction the winner was the "highest bidder". Is this a "Through The Looking Glass" situation where the winning bid is the lowest? That can't be, can it? (Shows how weird things have gotten when I can even entertain such a bizarre notion, eh?) I'm pretty smart but I just can't figure out what they mean by that in the context of an auction. Al Fulchino (5/24/2000; 10:54:37MT - usagold.com msg#: 31162) TH/BTD/goldhunter Thank you all for your exchange the last two days. It serves a wonderful purpose to match the trails side by side. Solomon Weaver (5/24/2000; 10:29:25MT - usagold.com msg#: 31161) Topaz , thanks for reminding me of the Islam money link Yes Topaz, I am familiar with the initiative to gring islam back on to a metal standard...with coins in circulation. The problem is, unless they have secret reserves of silver, there is no way to get enoung silver to introduce a serious program for Dirhams (at least not without driving the price of silver way above it's long term equilibrium value against gold.)Snippet from the link you gave:The Islamic Dinar is a specific weight of gold equivalent to 4.3 grams.The Islamic Dirham is a specific weight of silver equivalent to 3.0 grams.Umar Ibn al-Khattab established the known standard relationship between them based on their weights: "7 dinars must be equivalent to 10 dirhams." (in weight that is).Best wishes, Poor old Solomon Journeyman (5/24/2000; 10:15:27MT - usagold.com msg#: 31160) Predictions and blips @elevator guy #31149, BTD, TC, Trail Guide, ORO, ALL Elevator guy, I wasn't paying attention to the effects of that 8% over-night dollar drop. DURN it! Lucky to notice the reporting on that blip at all! If such a currency movement persists, however, you see all the classic effects of currency devaluation. But that's another topic.The only point of that part of the post was to point out that in today's mega-byte world:"As I testified before this committee in themidst of the Mexican financial crisis inearly 1995, major advances in technology haveengendered a highly efficient andincreasingly sophisticated internationalfinancial system. ...But that same efficientfinancial system, as I also pointed out inthat earlier testimony, has the capability torapidly transmit the consequences of errorsof judgement in private investments andpublic policies to all corners of the worldat historically unprecedented speeds." -AlanGreenspan to House Banking Committee, 16September, 1998Thus, if you are PREDICTING that the dollar MAY crash, you need to realize a major portion of the crash can occur so fast you won't even know about it till it's over. Especially if it happens in the middle of our night when over-seas folks are working, which seems to be the norm:The South Korean Won has depreciated 40% inthe last four days, down 10% in the firstthree minutes of trade last night... and itis predicted that the won will likely dropanother ten percent, the limit, againtonight. -CNBC, December 11, 1997If you're PREDICTING, either explicitly or implicitly, that the dollar WON'T crash significantly, you're still predicting, and - - - trust me here, THE ONLY RATIONAL WAY TO HANDLE ANY PREDICTION IS TO PLACE A _PERCEIVED_ PERCENTAGE ON YOUR PREDICTION. BTD, your honesty in laying out your "mistakes" should be VERY useful for those here who "have ears to hear" - - - or I guess now days, "eyes to read." From my standpoint as a professional gambler, and realizing at least two decades ago that the way most people "play" the stock market makes them gamblers who don't know they're gambling (they think they're "investing"), it occured to me that the habit of realizing two things would stand these stock/paper gamblers in good stead.1. Prediction is very difficult, especially of the future (Yogi Berra [Sir Hill Billy, gonna stick with this version for now -- took me awhile to decide]) or as von Mises puts it, "The future is always hidden from acting man."This means we can NEVER, NEVER, NEVER legitimately claim we are 100% sure of the outcome - - - - of ANYTHING. EVER. Often in retrospect, we think we were certain before hand, but we're only fooling others and perhaps ourselves. Which brings me to "rule" 2:2. To remind yourself, and keep your actions in line with the reality of 1. above, ALWAYS attach a PERCEIVED percent probability to any prediction. It's only a PERCEIVED probability because even the outcome of the best researched and calculated probability is ALWAYS "hidden to acting man" - - - until after the fact. This applies to ALL anticipations of the future, even that the sun will rise tomorrow. One day in the (hopefully) very distant future, it won't. One final tip: Many of the predictions we act on are not seen as predictions. Part of this is because they are often called by other names; forecasts, expectations, prognostications, etc. BUT the most dangerous predictions are those which are purely subliminal, unspoken, implicit and thus unrecognized. Good luck to all!Regards,JourneymanPlease disregard the partial posts of this message below. New ISP problem, I think. Journeyman (5/24/2000; 10:08:16MT - usagold.com msg#: 31159) Predictions and blips @elevator guy #31149, BTD, TC, Trail Guide, ORO, ALL Elevator guy, I wasn't paying attention to the effects of that 8% over-night dollar drop. DURN it! Lucky to notice the reporting on that blip at all! If such a currency movement persists, however, you see all the classic effects of currency devaluation. But that's another topic.The only point of that part of the post was to point out that in today's mega-byte world:"As I testified before this committee in the midst of the Mexican financial crisis in early 1995, major advances in technology have engendered a highly efficient and increasingly sophisticated international financial system. ...But that same efficient financial system, as USAGOLD (5/24/2000; 9:58:14MT - usagold.com msg#: 31158) Correction to Daily Report Near the end of the artcile I should have said:"It won't be long until the JP Morgan portfoliocommittee will be looking at the same set of criteria which caused John W. Henry to 'radically reduce'its operation."Henry is not closing down its gold operation. It is reducing it to 60% of the former position.Sorry Journeyman (5/24/2000; 9:58:04MT - usagold.com msg#: 31157) Predictions and blips @elevator guy #31149, BTD, TC, Trail Guide, ORO, ALL I wasn't paying attention to the effects of that 8% over-night dollar drop. DURN it! Lucky to notice the reporting on that blip at all! If such a currency movement persists, however, you see all the classic effects of currency devaluation. But that's another topic.The only point of that part of the post was to point out that in today's mega-byte world:"As I testified before this committee in the midst of the Mexican financial crisis in early 1995, major advances in technology have engendered a highly efficient and increasingly sophisticated international financial system. ...But that same efficient financial system, as I also pointed o USAGOLD (5/24/2000; 9:35:51MT - usagold.com msg#: 31156) Today's Report: " Gold Will Take No Prisoners" 5/24/00 Indications Current Change Gold June Comex 274.10 -0.60 Silver July Comex 5.01 -0.03 30 Yr TBond June CBOT 93~28 -0~02 Dollar Index June NYBOT 110.90 -0.15 Market Report (5/24/00): Against a backdrop of equities markets plunging globally, gold appeared essentially sidelined in Europe and Asia and awaiting direction from New York's COMEX. The worldwide equities markets sell-off began on Wall Street yesterday when NASDAQ shed almost 200 points and the Dow 120 points. Tokyo was down as much as 2.7% at one point yesterday before closing down 1.7%. Hong Kong,Singapore, Taipei, Sydney -- all followed suit. Europe didn't fare any better with Frankfurt down 1.6% and Paris down 1.9%. Technology stocks led the retreat with brokers worldwide complaining about a herd mentality at work. It seems that herds have this unpredictable tendency to run in either direction. "It's pretty crazy," said Louis Bernstone, European fund manager at Baring Asset Management Ltd. "Everyone's now saying, 'I don't know what's going on, but I'm going to sell it.' It's capitulation." So far, we've had good volume at Centennial Precious Metals, as the stock market has weakened over the past 30 days, with many investors deciding to shore up their sagging portfolios with gold. For months this website and others have implored investors to stay out of the gold paper markets -- options, futures and other derivatives -- so as not to serve as cannon fodder for the short- selling financial firms and hedge funds. It appears that this strategy is beginning to have an effect, not just because we and others have attuned investors, but because it has become apparent that something strange is going on in the gold market, and has been for some time. Bridge News reports this morning that "Giant US managed futures fund John W. Henry & Company, which has around $2 billion under management, said that its financial and metals portfolio has reduced gold exposure to 60% of average position size to address liquidity issues. It has also temporarily eliminated trading in silver since the market has seen lower trading opportunities and reduced liquidity." One doubts seriously that John W. Henry was long the gold and silver markets. Note the reference to "liquidity issues." One always needs someone to sell to in order to make a short position a reality -- thus the reference to lack of liquidity. In other words, the gig is up. On another subject, Bridge also runs this sketch on the Bank of England auction yesterday which elicited knowing chuckles in certain quarters: "The Bank of England announced Tuesday that it sold 803,600 ounces of U.K. Treasury-auctioned gold at $275.25 per ounce. The bank received bids for 2,134,400 ounces of gold but allotted only the expected 803,600 ounces,or around 25 tonnes, at the "lowest accepted price" as planned." Good plan. Only the Blair government could find solace in selling an important reserve asset at the "lowest accepted price." If Britain's plan had been in reality to sell its gold and put the proceeds into euros and dollars as it publicly announced, then they could have done it in one or two sales based on the heavy response from the first auction on (note yesterday's auction was nearly three times oversubscribed). But they have dragged it out for reasons only Gordon Brown and the rest of the Blair government truly understand. Eddie George, Governor of the Bank of England, clung to this near-ridiculous proposition yesterday endorsing the auctions as a "sensible portfolio diversification." What he failed to mention is that the euro has plummeted roughly 20% since the sales began and Britain began replacing gold with that currency for its reserves. During the same period the price of gold in pounds has risen comfortably as well -- so much for the "sensible portfolio diversification" argument. The World Gold Council, known for its general equanimity as the gold wars rage on, uncharacteristically slammed the aurophobic UK government for the sales saying "[the policy] suggests a degree of arrogance on the part of the British government in that it is now clearly flying in the face of majority wishes." The Council points to polls that show only 12% of the British public supports the sales, and 48% are opposed. Prominent gold analysts like Reg Howe of the Golden Sextant and John Hathaway at DeToqueville are researching the theoretical possibility that these recent central bank sales are little more than bail out operations for financial firms which have already defaulted de facto on gold loans and need the gold to pay back demanding creditors. With the British and Swiss sales, we are seeing to what lengths central banks are now willing to go in fulfilling their lender of last resort function. In simple terms the theory goes like this: If one of the commercial banks in your system is in trouble on gold loans, you are required to bail that bank out even if you can't print yellow metal. You are required to do that in order to forestall a rolling default which might cripple the entire national banking structure. So because you can't print gold, you raid the national treasury to provide the liquidity, the commercial bank is saved from default, the system limps on floating in a sea of paper derivatives hoping against hope a gold-buying herd running in the other direction doesn't overtake it, and make it impossible to rectify the situation. Just as an aside: If you back to the Daily Market Reports written when the British first announced their auctions, the theory outlined above was offered then. The weakness in the theory is that all we have is circumstantial evidence. We can smell the powder, but we don't have the gun. The strength of the theory is that it makes the most common sense under current market conditions, and that should be of value to current and prospective gold owners. So what does all this mean for the ordinary gold owner? It seems that creditors (both central bank and private) are fed up with running the risk of the gold carry trade. They have essentially been sold a bill of goods on gold loans. The argument that you can make a return on a moribund asset proffered by the bullion banks, does not hold water when you are in danger of losing your asset in a default because the speculating borrowers went overboard ala Long Term Capital Management. The Washington Agreement is probably aligned to that realization. As a result, it is unlikely that the lease pool will be growing any larger. Gold carry trade/forwarding departments are being closed down in financial firms around the world as reality sets it. It won't be long until investors small and large catch on that the greatest impediment to a rising gold price -- the gold carry/forward trade -- is in retrograde. Gold demand will increase markedly starting first with the big financiers who smell blood in the water and then spreading to the general public. The investor who gets in now by purchasing the physical metal itself without the trappings and dangers of leverage runs ahead of the crowd, and will be the most likely to benefit from the run-up when the carry trade is finally unwound. The other side will not give up easily. The building positions at JP Morgan are just more evidence of that. Stay away from futures, options -- gold derivatives of any kind. Own physical. Sit back and watch the show. It won't be long until the JP Morgan portfolio committee will be looking at the same set of criteria which caused John W. Henry to close down its operation. It may take some more time but gold will have its revenge. As a Rothschild spokesman recently said, "Gold will take no prisoners." That applies to Morgan as much as anybody. Have a good day, fellow goldmeisters. See you back here tomorrow. Henri (5/24/2000; 9:17:19MT - usagold.com msg#: 31155) Town Crier msg 31135, BTD, Elwood, et. al. I believe you will find that it was not I that had engaged Sir BTD, but Sir Elwood. Henri wrings his hands for no man, but thank you for being so kind as to presume to be able to read the intent of a mind that was not my own on my behalf :-).Now that you have drawn me into the fray, (although I hesitate to call it that since it seems to have been quite civil so far), I will engage it.Sir BTD, May I commend your courage in bringing forth your honest contention that what the future holds for us is unknown to all (and that all that is apparently held here in this forum in apparent reverence may all be just so much hogwash). Eccentric as I am in my beliefs on the illusion of time I found myself running with you on the unknown nature of what is to come. I likewise believe that what we think we may know of the "past" is equally unknown as the information with which we evaluate it (History if you will) is itself constructed of only those pieces that someone or some group who may have had an agenda or just as bad someone who was convinced that their interpretation of events is the only proper one to the exclusion and probable discard of information to the contrary. Wow, talk about run-on sentence structure.I also commend the courage of those your supporters who weighed in with you immediately. So often we have witnessed here the bashing of those running against the current "trail" mentality. We certainly need some more "openess" here and the exchange you incited appears to me to have been a marvelous example of how truly open minded and engaging this forum can be. I wish you well on your US dollar denominated strategy.If you recall, it was I that posted that gold should never be sold into currency, but instead, if need be to utilize its intrinsic worth, should be placed in escrow as collateral for a currency credit line. In this way you could have maintained the control over your original 300 Kruggies and performed the same actions that you did albeit the entire 300 would have to have been considered as wealth "at risk". Should the entire position have collapsed, then your legal entity formed to trade the position would have been subject to the margin calls on the doubled down position and then it would be your own moral hazard as to what to do in this case. Should the position profit handsomely, the principle minus carrying costs could disengage the escrow account, and the "profit" could be used to purchase more physical for the next go round.When considering the moral hazard, if ones own integrity is on the line (a circumstance no doubt preferred by your broker), that is you are trading in your own name, you have little choice in the matter but to forfeit the principle (escrowed gold) and to pay out the difference (margin) for exiting the long positions from another source should they go south of the excellant cover you have provided. Should you have traded in the name of a corporation, no different in many ways than the cabal trades, your moral hazard guide would be modeled by the actions of the cabal. If it is no shame for such a large BB to declare a bad trading position as insolvent and walk away, surely it would also be appropriate for you to follow suit. Since the escrowed wealth was a separate engagement not attached to the trading activity, your excess cash that you would have used to cover your margin and exit could then be used to unencumber the original asset since that debt was created first and must be settled first. Result? You still have your original 700 Kruggies out of a position that is attachable and your personal interity is intact. Meanwhile the credibility of your corporate entity that engaged the trade is in the same position as the many and much more substantial organizations that played the same game and lost...insolvent. If you think that anyone member of these organizations has not yet already extracted value from being employed by their organization and removed that value from attachment, you would be indeed naive. Now let's say you knew as a heavy player in the gold arena that your short positions would eventually eat you and that you could not exit without causing that very event. What would be your strategy to escape unscathed and even profit from the circumstance? Take your private corporation public and transfer the risk to the new stakeholders while you sell out your remaining stake in the venture. Leave a couple newbies who think they rule the world in charge and pump them up to believe it then head out the back door? (Goldman Sachs scenario?)Given this arrangement and the shenanigans to come would you really feel any remorse or moral hazard for having been forced into insolvency by the acts of entrenched entities that have gone down as well? Do you think the well heeled, the wealthy banking families ever lose their principle? Their objective is as mine, to create more wealth not lose it. Sure no one can read into the future least of all me but there is something to be said for pre-arranging the playing rules such that there is no real loss. Should I have done as I have indicated, I would not have taken long futures as the means of prospective currency gain. My strategy would have been to create a "reverse straddle". This is basically like the common straddle which is constructed using "out-of-the-money" options, one above the current price and one below. When the price of gold moves either up or down, one of the two positions comes "in-the-money and assuming a sharp move will recover the risk in the failed option side of the trade and profit as well.The "reverse straddle" is almost the same except instead of sitting on the horse facing its head, you are facing the horses a**. That way you can see what is coming up from behind to boll you over and prepare for the impact. In the current trading environment the POG moves in a range from $290/oz to $270/oz it may move down to test the previous low around $250. When it moves down purchase "in-the-money" calls they become cheaper the closer the strike is to market. Within their valuation is cash value which can be discounted as the actual risk premium. Premiums are usually lowest when volatility abates. Failing this (an environment of high volatility)one must pay higher premiums for the options. When the price moves back up to the $290 level purchase "in-the-money" puts. If the market stays within the trading range at expiration you still have two in-the-money positions which can be liquidated for the spread value. You will have lost the premium but are not subjected to unlimited up or downside risk. If the price moves sharply up or down, You have at least one option that is way in-the-money.Shorting gold futures is a game for those who have gold in hand to forfeit should the price rise. Long futures is for those who have lots of cash to cover their bet if gold falls. The big boys do neither. They know when push comes to shove they can blame their insolvency on unanticipated events and may even get "bailed out" by a lender of last resort. They see each entry into the market on either side as an opportunity to take someone elses hard won capital. Do you really want to be in a race with such a crowd?I think I would just keep the 700 kruggies under my pillow since that is certain and accumulate more slowly in a more commercial and less risky endeavor. BTD (5/24/2000; 9:05:23MT - usagold.com msg#: 31154) Elwood msg# 31143 and Trail Guide msg# 31148 Elwood, you said of me, "What's offensive is your public display of guilt and pathetic need for reassurance from others that you've done the right thing. To obtain that you've come here and attempted to damage those who are perfect strangers to you and have harmed you in no fashion." I apologize for whatever I have said that offended you so much. That was not my intent. Nor was it my intent to damage anyone. I'm not sure who you feel I was attempting to damage, unless it is Trail Guide. If that is your perception, then I am guilty of not being very clear in my writing. Trail Guide is an excellent thinker and commentator. I have no criticism of him, though I disagree on some of his predictions. My motivation was to help - to stir the discussion with an alternative (to this forum) viewpoint and perhaps to let people learn from my prior mistakes. As to your comment about my feelings of guilt and my "pathetic need for reassurance", I'm trying to figure out what you think I feel guilty about. And why would I seek reassurance from a forum where I know 90% of the posters disagree with me? That would be curious motivation, indeed.**********************************Trail Guide, thank you for your response. I want to repeat what I have tried to emphasize throughout my posts: nothing I have said was intended as a personal attack on you, but as a commentary on the veneration some in this forum accord your views.You wrote, "Anyway, my brand new BTD trade is up and running and I'm counting on him to update and guide me (us) on his success. Oh, rest assured, I'll keep my trade "on the table" until this all play's out! In fact, it's going to be posted on a "trail marker" on the gold trail. Just in case some lose their way." I think this will be a very constructive and useful exercise. I commend you for undertaking it. Regardless of which of us may prove correct, it should be educational.You said, "Of course, you could employ major leverage in the futures and gold shares and take the same major percentage paper hit such a position has had over the last few years. But then, we would never hear of it, would we. It seems the whole internet is full of gold stock owners (and future traders) that never lost money over the last 10 years, but suddenly brought their position "at the stock lows" recently (frown)." I think you pre-judge me harshly. If you re-read my original post, you will notice that though I got in near the bottom and rode the September spike all the way up, I also confessed that I increased my position at the top and rode it back down and took a substantial loss. So I don't think it is fair to lump me in with those who trumpet every winning trade and never mention their losing ones. The temptation is always there to brag about one's successes, granted. But I, too, noticed early in my trading experience the hypocrisy of the braggarts. For this reason, I generally do not mention either my wins or my losses. It is a humbling experience to brag about a big win and then take a big loss. When this first happened to me, I realized that it was probably happening to everyone else but they weren't telling me about their losses. I determined at that point to keep my trade results to myself. The only reason I gave details in my original post was to illustrate the points I was making. If you are going to track a trade similar to mine, I see no reason to post my trade results here. I don't want to expose myself to ridicule if I am wrong, so I will forgo the gloating if I am right. goldhunter (5/24/2000; 9:03:31MT - usagold.com msg#: 31153) Physical vs futurea : FOA's example http://www.usagold.com I just called MK's "store" to inquire about a Purchase price for the K-Rands...$282 per coin...Apples to apples applies here folks...Buy the physical today for $282 or buy Dec futures $283.30 and "earn" the TBill rate (3.25% for one half year)If we are going to compare we are going to compare fairly...Adjust your figures and "walk on" goldhunter (5/24/2000; 8:38:04MT - usagold.com msg#: 31152) FOA futures http://www.usagold.com Sir FOA...you probably "bought Dec. Gold at $283...not $383"or else you need a new broker...give me a call... Cavan Man (5/24/2000; 8:36:00MT - usagold.com msg#: 31151) Regarding TG It is the manner in which he responds to challenges such BTD's that serve to further endorse his authenticity in my mind. I am glad we can share his contribution courtesy of MK. Cavan Man (5/24/2000; 8:29:45MT - usagold.com msg#: 31150) Hey there Trail Guide... Whenever I travel abroad I strongly believe in taking "guided tours" whenever there is something significant to see or important to be learned. Here's to you from one who is glad to be in your company. elevator guy (5/24/2000; 7:41:51MT - usagold.com msg#: 31149) @Journeyman, 31136 Thanks, J-man, I didn't know that. I was not paying any attention to these matters in 1998, and so was completely oblivious to that event.So did the largest drop in 25 years make any signifigant changes in the US? It must have made Japanese goods in the US more expensive, which would hurt the Japanese economy, so maybe they hurriedly made adjustments to keep Japan stable? I remember when I was in the Marines in Japan in 1980, or was it 82, the Yen was about 220 to the dollar, and some were complaining at how the dollar had slipped!Some of us were taking Levis over there, and selling them. They were commanding $100 a pair to the willing, even back then. Trail Guide (5/24/2000; 7:33:47MT - usagold.com msg#: 31148) Comment Hello ALL:I'll have some replies / comments soom. Just not yet.I've been closely following (involved) the progress of the new iX pan European market. What a convoluted thing this is turning into. It still looks good and will ultimately transform the world stock trading arenas. Especially in that it will further along London's move into the Euro Zone sphere. We follow this very closely because once this Britain Euro link passes the (mental / political) half way mark of no return, it will also start a frenzied rush away from dollar based gold trading. Actually it will only make clear to many what has been in progress for some time. Stranding anyone, including governments, power brokers and the like into holding depreciating gold paper. This is all part of an extremely broad based transition from a dollar world. So, this is where my energy has been focused these many weeks. BTD, I was wanting someone to present a position such as yours so everyone could follow it. In fact, I'll place your position way up on a "pedestal" "for all to see" (SMILE). Here's what I did:I'm not too different from that fella Armstrong. You know, the one in trouble for being a big gold bear while he in fact had a lot of bullion himself! I think he kept in a hall way closet. Well, I'm not a bear on Physical gold, but am very bearish on paper gold. Who knows, maybe he was just acting out the very same premise myself and a few fellow banks are also doing? In fact now, today, is going to prove a very good time frame for this little exercise.So, after reading BTD's post I decided "not" to think for myself, but just follow his lead (smile)! I got up, went down my hall way and opened up the closet. Oh lord, I forgot how many Krugerrands were piled up behind that door! After opening it, they all slid out and just covered me up so as to almost crush me (huge smile). Three hours later, after digging out from under it all, I counted out 300 K rands, just as BTD did.Then I went down and sold them for $270 each (a rough fair, average price in today's market). Then I placed $81,000 in T-bills and placed these in a margin account. Then brought 3 - 100 ounce comex futures contracts. Boy this is fun after all! I purchased the Dec 2000s at $383.30. So, come Dec. I can pay #383.30 in full and have 300 ounces of gold. All the while earning some interest.Now, I don't know how long some of you have been around this market, but it seems we all learn a little something every now and again. But, any of you trading futures know just how hard it is to beat the "priced in interest" of a forward paper position. Much less beat out a full paid up physical holding ounce for ounce. Ha! Ha! I remember when there was no gold futures and how exciting the prospect was to have one. Some old dude, huh? Anyway, my brand new BTD trade is up and running and I'm counting on him to update and guide me (us) on his success. Oh, rest assured, I'll keep my trade "on the table" until this all play's out! In fact, it's going to be posted on a "trail marker" on the gold trail. Just in case some lose their way.Also:BTDs post #31098 said: ------ I enjoy this forum and all the theories posited here, but I thought a variant opinion might be useful.-------BTD, your position (opinion) is not in any way "variant" from typical Western thought. I bet 99% of the gold bugs employ your strategy, mostly in a much more leveraged form. What is "variant" here is our "new" future view of gold in the political world. You say:---------and many will probably assure me that the world is coming to an end (per FOA/Trail Guide) and that paper gold will be driven into the ground while physical gold skyrockets. -----My friend, it would only be the end of the world for paper gold traders. Indeed, if comex stays intact, I bet my physical will match your contracts ounce for ounce (smile). Something that cannot be said for a reverse situation I see coming. You see, our position is leveraged for a worse case, while yours can only keep up with mine in your good case! Of course, you could employ major leverage in the futures and gold shares and take the same major percentage paper hit such a position has had over the last few years. But then, we would never hear of it, would we. It seems the whole internet is full of gold stock owners (and future traders) that never lost money over the last 10 years, but suddenly brought their position "at the stock lows" recently (frown). My record is very clear and "unchanging" I might add. I have been buying physical gold all the way down from $360 through $280 and continue to do so. Indeed, a very large bulk of that was taken last year (around the spring) at $283+/-. I made several posts then as to why a combination of good supply (for large traders) and the $280 price for delivered physical made it an opportune time. Nothing has changed that position. Also, please check the rest of my posts to see that gold is not my only holding.You say:------Trail Guide is a very articulate and thoughtful commentator, but his ideas are just theories like everyone else's.---------------------------Well, my friend, I know you trade on facts alone. Your riches prove that, right (smile). For myself, I agree, theories are like "mouths", everyone's got one! Problem is, I never got anywhere investing in what others said. My position comes from following what a few people are "doing". The question is "do they know what they are doing?" Oh, they better! Because your wealth and lifestyle depend on it! Whether you know what you're doing or not! "In the Footsteps Of Giants"Trail Guide JCTex (5/24/2000; 7:10:47MT - usagold.com msg#: 31147) TownCrier (5/23/2000; 21:43:47MT - usagold.com msg#: 31124) TC, good post. You raised a particularly good point when you said, "How hard is it to imagine no interest in buying long gold paper?" You just defined me.I would not trade anything on the COMEX, for any reason. They condone manipulation or they would have straightened all of this out a long time ago. I just let a bucket-full of options expire; that is what I get for trading in a rigged [permission granted] paper market. I hold my physical gold, and it will be a very, very cold day in hell before I sell it. It is there for the inevitable change, crash, correction [whatever you want to call it] that is coming. My point: FOA and ANOTHER are right. How many people "out there" are like me?....won't buy paper, will buy physical. COMEX must collapse under it's own b.s. because the public will leave this market, and physical will rise because that is where we are going. To hell with them and their manipulated markets.I will trade the grains, cotton, turnips; but I won't try to trade gold, again. Black Blade (5/24/2000; 6:48:41MT - usagold.com msg#: 31146) Morning Wakeup Call! (A case of the shrinking Brit Peso!) Source: Bridge News Asia Precious Metals Review: Gold stable after overnight slipBy Hiroyuki Fujiwara, BridgeNewsTokyo--May 24--Spot gold was stable near U.S. $274 per ounce with sluggish trade on Wednesday in Asia after overnight slips following the U.K. Treasury's auction, dealers said. Platinum was supported by short-covering--buying from players who had sold--and massive speculative buying despite profit-taking capped price early in the morning, they said. Gold market sentiment was weaker as relatively less subscription at the overnight U.K. auction discouraged players from buying gold, dealers said. The Bank of England announced Tuesday it sold around 25 tonnes of U.K. Treasury-auctioned gold at U.S. $275.25 per ounce with 2.7 times subscription. The results failed to trigger short-covering in the seller-dominated market, while prices are unlikely to decline below the key $270 in the near term, they said.Black Blade: Asia action was a dud. But the Brit Peso is down.Europe Precious Metals Review: Gold quietly holds below $274By Gavin Maguire, BridgeNewsLondon--May 24--Gold prices slipped and held mainly below the U.S. $274 per ounce mark Wednesday morning in light trade after having eased below there overnight amid sluggish Asian trade. Dealers said spot metal was expected to continue lurking near current levels until "some news or aggressive action takes us out of the current range." Silver and platinum were unchanged from overnight levels in thin conditions. Sources said although the price achieved at Tuesday's Bank of England gold auction of 25 tonnes was more or less in line with market expectations, the low level of subscription seen--2.7 times--"could be deemed as bearish by those constantly on the lookout for bad things to say and think about the gold market," said one. However, he added that the results were "obviously too neutral to prompt anything other than a slight blip in the price and business is as usual today." "That goes to show how little significance the auctions are now to the overall scheme of things, and how stuck in its ways gold is at the moment. The problem is the longer prices stay range-bound like this the less interest is shown in the market by the bigger players--and obviously the fewer bigger players means the harder it is to break out of this range," he added. Dealers noted the southbound 10-day moving average around $274.40 this morning, and suggested that indicator had the capacity to cap trade in the near term. Silver trade continued to be subdued in a $4.96-5.00 range and spotmetal is expected to remain quiet around those levels in the near term, sources said. Platinum and palladium were virtually untraded at overnight levels.Black Blade: Europe action was a dud. At least the Brit Peso is still sinking, did I mention that? Platinum appears to have gained momentum to the detriment of Palladium. The GM and Nissan announcements have sparked speculation that Pt will be the big mover.John Henry cuts gold exposure, temporarily eliminates silver New York--May 23--Giant US managed futures fund John W. Henry & Company, which has around $2 billion under management, said that its financial and metals portfolio has reduced gold exposure to 60% of average position size to address liquidity issues. It has also temporarily eliminated trading in silver since the market has seen lower trading opportunities and reduced liquidity. (Story.18335)Black Blade: Why play a losers game when the market is manipulated. Hopefully C. Powell's GATA post last night will signal the death of the manipulation game (outta ammo!). Did I mention that the Brit Peso is significantly weaker?BOE's George: Gold sales part of sensible portfolio shuffle London--May 23--Governor of the Bank of England, Eddie George endorsed Tuesday the philosophy underpinning the Treasury's decision to sell some of its gold reserve. He rejected claims that the government had lost money switching some of its holdings from a stable asset into the struggling euro, and said that he thought it was part of a "sensible" portfolio diversification. (Story .14907)Black Blade: Yes, so sensible that he and Tony are under investigation over this mess. Could be a scandal in the works. Did I mention that the Brit Peso is sinking? Hmmmm………..UK gold auction in line with S African analysts' expectations Johannesburg--May 23--Tuesday's gold auction by the Bank of England was in line with local analysts' expectations, but opinion is divided on the prospects for the bullion price in the short term. "It's pretty much a case of ho-hum," said Angus Auchterlonie, gold analyst at SG Securities, of the sixth auction of 25 tons of gold by the UK central bank. (Story .18574)Black Blade: The anti-gold pundits are having a tough time keeping interest in the gold sales. Did I mention that the Brit Peso is still tanking?Indonesian minister says Freeport has agreed to cut production Jakarta--May 24--PT Freeport Indonesia has agreed to cut production at its Grasberg open pit gold and copper mine by around 30,000 tonnes a day, according to Indonesian State Minister for Environment Soni Keraf on Wednesday. The mining company has been under fire for allegedly causing environmental damage. (Story.10774)Black Blade: Yet another producer cuts back production! This time for a different reason. BTW, Did I mention…….., Oh never mind! Goldsun (5/24/2000; 5:55:13MT - usagold.com msg#: 31145) Prediction Predilection Predicting the future is simply a symptom of internalizing the notion that the future exists, which in itself becomes a prediction of the future. As is the prediction that the future will exist without our having been able to predict it.I predict this post will appear on the forum.Goldsun Netking (5/24/2000; 2:44:01MT - usagold.com msg#: 31144) @Sir Solomn Weaver & Sir Town Crier So given your arguments in the dicussion of Gold & Silver, and Gold V's Silver is not the propensity for percentage increase still greater(much) for Silver than Gold even if the currency (USD) takes a hit & we see the fundamental change of the currency link & store of value aspect(for Gold)? Elwood (5/24/2000; 1:38:04MT - usagold.com msg#: 31143) Bullion Banks, BTD Here's something to think about: What if American bullion banks figured out a way to cash-settle their short positions in dollars, while collecting their longs in Euros?*****************BTD, your reference to thinking for oneself was written of others in the context of placing a certain person who posts here on a pedastal.The use value of gold as wealth is obscure to most until it becomes time use it. Then its use value is obvious to all because its currency value has changed. Yes, I will never sell my gold unless I need to, then I'll trade it for whatever it is that I need.I don't object to your timing. What's offensive is your public display of guilt and pathetic need for reassurance from others that you've done the right thing. To obtain that you've come here and attempted to damage those who are perfect strangers to you and have harmed you in no fashion. I have nothing more to say.Elwood Hill Billy Mitchell (5/24/2000; 0:56:55MT - usagold.com msg#: 31142) Temperature Inversion I promised some solid facts concerning the current inversion situation. Be patient. I have been pulling historical records from the Fed. It has been very time consuming. I have yet more work to do before I post any results or definite thoughts concerning what I think the Fed is up to.Let us continue the present situation. Looks more and more like the real thing. If so we have time. Remember what we see today will produce results as much as a year or more from now.hbm Hill Billy Mitchell (5/24/2000; 0:50:29MT - usagold.com msg#: 31141) Official release http://www.bog.frb.us/releases/H15/update/ Official: Federal Reserve Statistical Release Release Date: May 23 2000 Rates For Monday, May 22, 2000Federal funds 6.52Treasury constant maturities: 3-month 6.0110-year 6.4420-year 6.5830-year 6.18upside-down spread FF vs long bond = (.34%) SHIFTY (5/24/2000; 0:50:08MT - usagold.com msg#: 31140) Topaz I will try it tomorrow! Need to get some sleep. I just printed your post. Thank you. $hifty Topaz (5/24/2000; 0:46:22MT - usagold.com msg#: 31139) BTD Welcome Sire,I must say- given your (self-admitted) financial stupidity in the past,you appear to be travelling just fine in the present <smile>Good luck to you! SHIFTY (5/24/2000; 0:45:23MT - usagold.com msg#: 31138) GOLD ( GOLD ) It's worth it's weight in gold!Good Night$hifty Topaz (5/24/2000; 0:28:42MT - usagold.com msg#: 31137) Shifty: Solomon http://www.murabitun.org/WITO/intro.html Shifty,I never thought I'd be giving comp instructions! ME! (a tech imbecile) anyway- here goes:You open the page you want to link to (in the case of the link for Sol above it's an Islamic Monetary site)Then LEFT click to highlight the address in the location box.LEFT click on EDIT (up top) & a little box comes down- one of the selections is COPY- click on that.(it just hangs around in cyberspace until you)-Go to the "Link (see instructions below)" box and click on that- your little cursor doover will show up in the box,then go back to EDIT and click on PASTE- VOILA!Solomon:Iffen you're lookin fer a few hours readin re: Ag coins and life in general sans Western influence try the link above. ViewYesterday's Discussion.
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