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ARCHIVED DISCUSSION FROM 5/28/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) TheStranger (05/28/00; 23:51:04MT - usagold.com msg#: 31476) Journeyman and Gandalf Journeyman - Well at least we have found your hot button!Gandalf - Hey, old friend, with all due respect to Journeyman, if there were no SS, I would invent it. I think it is a good idea for a couple of very good off-topic reasons. In fact, I will accept it proudly when my time comes. But I don't want it ever to become anything more than what the name implies, Social SECURITY. "God bless the USA", I know, but let's keep it simple, studid, er..stupid! Leland (05/28/00; 23:26:24MT - usagold.com msg#: 31475) Simply Me May I add?...America has NEVER recovered from the GreatDepression...But has simply papered-over the problems. Simply Me (05/28/00; 23:17:16MT - usagold.com msg#: 31474) The Republican plan is bad...but the Democrats are worse. In re-reading my last post, I noticed it could be construed as a rejection of the Republican Party. It is. But the Democrats are worse...far worse! This country is crying out for a party to believe in. That's a fabulous opportunity for someone...and very dangerous for us little folks. Beware of politicians bearing gifts.Also, in the first paragraph..."studidest" should have been "stupidest". Haven't seen any movement in the Kitco graphs. I understand that American markets are on holiday...but surely there's something to track from around the world. Can anyone tell me what's up?By the way, enjoying everyone's posts. Have to admit to mixed emotions about seeing the end of the Gold paper market. Although I have no investments there and long to see gold break it's chains, it looks like gold's leap will be at the eventual expense of the American standard of living. And America's traditional way out of Depression is to cull the herd and put everyone else to work with a war. It's disconcerting to see the stock market go down as political relations with China heat up. I really like the Chinese people and Chinese culture. Just not their government. And the Chinese government has an Ace up it's sleeve...Russia.If Putin's changed into a democrat, I'm the King of England!Alot of good reasons to own gold these days.simply me Simply Me (05/28/00; 22:45:48MT - usagold.com msg#: 31473) Why stock investments won't work in place of Social Security. I think a recent commercial on CNBC says it best. "2% of stocks listed on the Nadaq will make you money. Why do you keep picking the other 98%?" While I'm all for prying as much money as possible away from the grabbit and putting it back into the wage-earners' hands, I think the Republican plan for putting Social Security money into the stock market is one of the studidest ideas I've ever heard of. Ask anyone who's seen their million dollar portfolio disappear over the last month. When your social security dollars are whittled down to zero, by bad stock picks, bear markets, whatever, in your 60th year....then what? Develope an appetite for dog food? If you vote Republican this year, stop practicing your golf swing and start rehearsing your lines...."Paper or plastic?" or "Would you like fries with that?"The idea of Social Security was sold to a generation that could no longer count on their children to care for them in their old age. The industrial age valued strength and youthfulness to run the factories and lured the youngsters to move away from multi-generational living on the farm to apartments and single-family homes in town. To the folks who voted in Soc. Sec. it was made to sound like not only a good solution, but their only option. Saving enough money to support even a median standard of living through all the years of retirement was unheard of. Retirement itself was unheard of. One did what one could until one couldn't do it anymore. Then, it wasn't long till the end. What the sons and daughters of the farmers lost by moving to the newly industrialized city was the their inheritance. It takes generations to build real wealth. They threw away what their parents built. Sold it for money that was soon used up. Sold themselves into slavery to the factory owners. Now, they too became dependent on Social Security to provide for them in old age.Retirement will simply have to disappear as a recognized and expected stage of life. Folks in their 40's and 50's now will probably have to work until they can't anymore. Which isn't all bad! Someone famous (can't remember who just now) said, "You'll rust out before you wear out." For a real life example, my grandfather worked as a naval architect till he died at age 84; on the other hand, my father retired from a large company when he was 60 and died at age 62.Social Security Tax. Phase it out and give us our money back so we can buy gold, silver, a home without a mortgage, and educate our children so they are well able to take care of us for that last couple of years after we get too old to work.Get some Gold for your Golden Years.simply me Journeyman (05/28/00; 21:37:54MT - usagold.com msg#: 31472) Mincing words @JavaMan JavaMan (05/28/00; 17:13:45MT - usagold.com msg#: 31464)Journeyman, All, SS bashing...JavaMan: Com'on Journeyman... don't sugar coat it for us. (smile) Yes, I know. I MUST try and stop mincing words! ;) -J.JavaMan:Actually, for a long time, I have wondered if Social Security benefits could be phased out. Somethinglike...if you're 64, you get 98% of your "benefits", 63 = 96%, 62 = 94%, etc. Then, at the same time,phase out the contributions in a similar fashion.+Ultimately, what they will probably do is just gradually raise the age of eligibility to 110.OK! -J.JavaMan:Isn't it the case though that the average individual has been recovering their entire contribution toSocial Security in only 3 ½ years?Something like that. Until a few years ago, it wasn't too bad a proposition because of benefit creep - - - and, of course, unlike late comers, early Ponzi participants can make out well. But the FICA tax percentage has been creeping too, as has the amount taxed. For those joining the work force today, it's a lousy proposition. -J.Regards,Journeyman Leland (05/28/00; 21:27:43MT - usagold.com msg#: 31471) A Timely Report -- Completely Off Topic High-energy nation could pull the plug on the power grid By LISA HOFFMAN Scripps Howard News Service May 29, 2000 - You grab a few cubes from the ice-maker for your iced tea, nuke a frozen pizza in the microwave, toss a load of wash in the dryer, notch up the AC, crank the stereo, scan in a couple of photos to e-mail to relatives, and sit back for an evening cruising the Internet. Upstairs, the kids are styling their hair, playing computer games and listening to the radio, while your spouse is in the basement office finishing the spreadsheet work that didn't get done that day on the job. That seemingly serene summer scenario is anything but that for those in charge of supplying electricity to the nation. Energy experts warn that the onset of the hot season, coupled with the recent acceleration in the wiring of America, is likely to bring months of power brownout and blackout alerts in unprecedented number. As demand drains supply, the cost of power for companies and consumers is headed for a dramatic uptick. Peak-time prices hundreds of times higher than usual are forecast this summer in some regions. Why? Combine a sizzling economy, an explosion of computer users at home and on the job, and a proliferation of other electronic devices ruled by microprocessors for work and play. The result is a ravenous appetite for reliable electricity that must travel over a lagging transmission system designed for a largely bygone era. "The system, designed as a two-lane road, is now being used as an autobahn or New Jersey Turnpike," said James Owen, spokesman for the Edison Electric Institute, an interest group of private electric companies. Particularly worried is the burgeoning high-tech industry, as well as firms engaged in Internet commerce or otherwise dependent on e-mail and similar online ways of doing business. For them, a blackout, or complete power failure, can be ruinous. From online stock trading outfits to such Internet merchants as eBay and Amazon.com, every minute the power is out can mean millions of dollars lost. Brownouts _ caused by intentional cutbacks in electrical juice _ also can wreak havoc on sensitive equipment, including that used by everything from ATM machines to auto mechanics. Surges or other blips, even those imperceptible to an office worker, can knock a microprocessor for a loop. The digital world, according to experts, demands a power supply that is essentially 99.9999 percent steady and reliable. Despite its stresses, the U.S. system is remarkably dependable, but even so, the average residential customer can count on glitches causing a cumulative seven or eight hours without power a year. That would be catastrophic for new economy enterprises, where a disruption as brief as "one-60th of one second is enough to make everything go blooey," said Karl Stahlkopf, vice president of the non-profit Electric Power Research Institute in Palo Alto, Calif. Estimates are that the economy will lose more than $25 billion a year as a result of power disruptions which, until the digital age, were far from rare but hardly so crippling. In the past decade alone, the power "load," or demand, has increased 35 percent while the capacity to get that electricity to users has grown only 18 percent. Conservative forecasts predict another 20 percent boost in demand ahead, but no more than a 4 percent hike in transmission capacity. A big part of the problem is that no one wants new power poles or stations near their homes or businesses. Complicating the situation is the ongoing deregulation of the power industry. "The country is increasingly sensitive to any type of disruption," said Jamie Wimberly, vice president of the Consumer Energy Council, a watchdog group in Washington. Already this summer, the Silicon Valley region of California, broiling now in a heat wave, is being warned by Pacific Gas & Electric to make a concerted conservation effort or face significant power problems and financial penalties. Energy experts expect the same situation to bedevil other parts of the country this summer, particularly in other high-tech hubs. Some technology firms are shelling out big bucks to build their own power plants to insulate themselves from disruptions. In Redwood Shores, Calif., for instance, computer hardware and software giant Oracle Corp. has spent $6 million to construct its own generators and substation system. The Energy Department and conservation groups have begun to amplify their calls for the country to cut back consumption through more energy-efficient appliances and power-stingy habits. Some in the industry are demanding more financial incentives to stimulate investment in the nation's power grid, coupled with fewer restrictions from the Federal Energy Regulatory Commission. "We have to build a type of electrical power infrastructure that will support a microprocessor-based society," Stahlkopf said. "We have very little choice."(Fair Use For Educational/Research Purposes Only.) R Powell (05/28/00; 20:06:55MT - usagold.com msg#: 31470) Market overload From USAGold (31446) "Of course that's when the word went out that an investor could sell calls but they would have to be taken in "at market"---which of course left holders at the mercy of the players. ... I expect that to happen again the next time we have a big run-up.." You're entirely right. When any market goes ballistic with more volume than can be handled, the traders respond by accepting buy and sell orders "at the market" only. Remember, transactions are still carried out by open outcry done by real, live people. They can handle only so much. I usually counter this possibility by placing limit orders (to be filled only at a certain price or better). These are open orders as opposed to day orders and are in place before any market overload occurs. Once the panic starts, most brokers will not accept these orders so place them early. Buying or selling anything "at the market" in times of turmoil is nothing if not risky. I imagine you might prefer accumulating quietly over time and selling, if at all, in a sane manner, but if you have any futures or options positions, plan how and when you can exit your trades Before the panic for the shorts/ celebration for the longs but turmoil for the market starts. Once again, I offer this as food for thought. I have no professional qualifications other than those insights earned the hard way. Trail Guide (05/28/00; 19:20:44MT - usagold.com msg#: 31469) Reply Hello again Michael,--------USAGOLD (5/28/2000; 10:50:58MT - usagold.com msg#: 31446)Greetings, Trail Guide. . .Let me Ramble a bit....as we slowly hike the crosscut--------Yes, I enjoy it when you "ramble on a bit" as in #31446 today. That post covered a lot of ground! While we are on that crosscut:I think that between Reg Howe and ORO, the ghostly fog is being removed from our gold markets. If they keep going this way, eventually, the whole world will see what kind black hole it is. These are the same asset-less securities they are buying into by trading (investing) in paper gold. This entire gold derivatives book has been one of the most "unseen", "least understood" paradigm to come along in some time. Most people little more grasp what our current gold arena is than they grasp what that dollar is in their pocket!I sit down the other day and spent a lot of time writing a very long post to take the next step. But, it became too blunt and outright. After some thought and discussion I withdrew with a firm conviction that this venue is still the right track. No matter how slow, events are unwinding as others are understanding the gold evolution. Yes, and doing it on their own. Here is the first beginnings of that hike, presented as a backdrop to your post today:--------At camp:Our gold market is in "evolution" not just suffering from the same bear effects old gold bugs promote and have documented from the past? If you agree that it's only a bear market and that it will reverse soon, you're in for a big surprise. The paper gold market you know, trade and love is about to end.OnwardCentral Banks have leased / lent some gold for a number of years and for no more than a tiny return. Even Alan Greenspan pointed out their willingness to do so. But the majority of that "real" gold never made it onto the "melt down" market as the media portrays. Early on (years ago) most of it was transferred to other Euro friendly CBs while setting a lending precedent for the Bullion Banks. We have made this point over and over and the ongoing CB figures prove it out. Further, what portion of this additional gold supply that went outside the BIS system of CBs, mostly ended up in real accounts under other names. Yes, these bullion bars are still alive and well. Representing the real wealth of someone, somewhere!Many try to build a position that this CB gold is gone, melted and will never return to their vaults. Well, it wasn't lend it out for next to nothing so they could count on it's return at today's values! Again, most of it is still in the BIS system waiting for revaluation once our current dollar market fails. The fact that virtually no one can name the physical buyers of all these deals calls into question the often stated premise that CB gold has been melted down for industry use. It wasn't!----------------Michael,Truly, the whole purpose for starting the Western paper gold markets with initial lent gold was so they (BIS / ECB) could eventually destroy our dollar gold market. But the dollar faction (USA) played this game because they never believed the Euro Bomb could be set off. It's that simple. This joint play was made on the "Western" weakness to own paper gold substitutes. American dollar backers thought this was just fine. Yes, the more these paper markets could be diluted with supply the lower the paper price would go as the dollar looked ever better. That in turn convinced ever more "old" "long term" bullion holders to give up their metal and hold leveraged positions that required less cash. Using gold stock options, gold stocks, futures options and futures themselves, investors began a long term trend of off loading bullion onto the market. Even sophisticated investors used "unallocated" bullion accounts that contained only a delivery commitment and no gold itself.This new "mind set" was, years ago, read perfectly by the political system! Nothing else could identify this trend better than right after the WA announcement. You noted how:----" " This is when management clamped down in some of the bullion banks, people fired, changes made. Of course that's when the word went out that an investor could sell calls but they would have to be taken in "at market" -- which of course left holders at the mercy of the players. -------- But what happened next? The whole market returned to trading the questioned paper! In the old days it would have been over with. No, they set the hook deeply and have the modern day gold bugs doing their political bidding for them. With every drop in the paper game, players double up to catch up. All the while leaving the real leveraged instrument, physical gold to be ever more acquired by those who understand the dollars current position. Truly, I am not expanding the perception too far when I say, "they don't plan on ever selling again for dollars". Our recent "TOCOM style default" is absolutely nothing to what is before us! -------------------------------------Nuts! MK, I have to quickly go. Will pick this up in early AM and finish. ThanksTrail Guide HI - HAT (05/28/00; 18:18:24MT - usagold.com msg#: 31468) tedw msg. 31467..........Silver "Which is it? Leasing or Official Sector Chinese Bullion Sales?I think it is criminal manipulation.War "accidents", are the Joker in the deck.This is not Memorial Day for nothing. tedw (05/28/00; 17:54:45MT - usagold.com msg#: 31467) China and silver http://www.usagold.com Ill expand a little on my thoughts on China and Silver.Ted Butler quoted from the Silver Institutes report in his recent article "Silver: The Big Lie"What Ted did not say is that the Silver Institutes Survey attributes OFficial Chinese Sector Bullion Sales for keeping the price depressed during 1999. I dont know what part leasing plays as Ted suggestst but clearly the Silver Institute fingers the Chinese as the culprit keeping the silver price down.Which is it? Leasing or Official Sector Chinese Bullion Sales?Surely, a question worth asking.And as I said yesterday, the war clouds with China are clearly on the horizon and what would that bode for the silver market (assuming a nuclear blast near where I live does not make all this a mute point)? jinx44 (05/28/00; 17:26:55MT - usagold.com msg#: 31466) To Rugen In reference to your service in "that" part of the world, perhaps we have common ground--1RLI, 44Para. RSVP alprice@worldnet.att.net . Adios Canuck (05/28/00; 17:20:20MT - usagold.com msg#: 31465) @ ORO Thanks for expanding the 'horse race'!!I walk in the footsteps of giants. JavaMan (05/28/00; 17:13:45MT - usagold.com msg#: 31464) Journeyman, All, SS bashing... "All EVERYONE in SS now holds at best is the bonds of a potentially bankrupt entity, USA Inc. Not only that, but they are bogus bonds. People THINK they have money in a retirement account. They have none. The money they paid was a tax. That is, every penny people sent to SS was spent, not saved. No one has any money left from the money they paid to SS. They have NO money in SS, they control NO fiduciary medium, SS owes them zero, nada. Period."JavaMan: Com'on Journeyman... don't sugar coat it for us. (smile) I can see the commercials now..."this is your future on Social Security", maybe they can show some wino in an alley or better yet, someone who is counting on Social Security for their survival. (In another 10 years they will probably be one in the same.)You said..."If telling this truth sounds preposterous, or worse, harsh to you, well what's become of America, and particularly it's political establishment?"JavaMan: what sounds preposterous is the idea of the government telling the truth at all. Does anyone think the president is going to want that message going out on his watch? Especially if he plans to run for reelection. Even if not, the incumbent party isn't going to want to go down in history being associated with "the great betrayal of the American people". The opposition would have a field day and win the next election in a land slide.Actually, for a long time, I have wondered if Social Security benefits could be phased out. Something like...if you're 64, you get 98% of your "benefits", 63 = 96%, 62 = 94%, etc. Then, at the same time, phase out the contributions in a similar fashion.Ultimately, what they will probably do is just gradually raise the age of eligibility to 110.Isn't it the case though that the average individual has been recovering their entire contribution to Social Security in only 3 ½ years? Journeyman (05/28/00; 16:48:00MT - usagold.com msg#: 31463) Use appreciated!! @Leland "I printed, now let's see, how many grandkids and great-grandkids? Now I remember...and each onewill receive a copy. Thanks!" -Leland msg#: 31458Thanx to YOU, Leland. It's nice to know once in awhile that some of the stuff I put here may do some good!Regards, J. Gandalf the White (05/28/00; 16:22:45MT - usagold.com msg#: 31462) Hey there Stranger ! Youse young whipper-snapper, just quit gripein bout SocSec bein "welfare" and keep payin them big bucks sews meese can continues ta keep them Hobbits in little round yellow thingies ! Tis "well and fair" fours all usins ol'e ones.<;-) -- (LOVE YA!) Leland (05/28/00; 16:11:11MT - usagold.com msg#: 31461) That's the Beauty You and I have some, and neither you, me, or Michael istellin'. HI - HAT (05/28/00; 16:04:28MT - usagold.com msg#: 31460) Leland....msg#31455.............IRA Gold "Approved as legal, now." Legal now, is the operative phrase.The locked-in visability of the wealth gold, may not be a good idea.Legal is seasonal in the District Of Deceipt. Journeyman (05/28/00; 16:00:35MT - usagold.com msg#: 31459) Do-it-yourself retirement: Calling a spade postscript @TheStranger, Leland, ji, ALL Under the conditions even today, gold would be a great retirement fund, in your own hands, tax free (if you choose) and you don't have to depend on SS, Congress, or the US Grabbit to keep their word.Gold. Retire on it! (with apologies to Aristotle)Regards, J. Leland (05/28/00; 15:46:52MT - usagold.com msg#: 31458) Journeyman I printed, now let's see, how many grandkids and great-grandkids? Now I remember...and each one willreceive a copy. Thanks! Journeyman (05/28/00; 15:37:56MT - usagold.com msg#: 31457) Calling a spade . . . @TheStranger #31448, Leland, ALL "It is precisely because SS is "welfare" that I hope the Bush proposal fails. SS was created becausemany people are inept at managing money and would otherwise have nothing on which to retire." -TheStranger msg#: 31448Many lose in the markets, but many losers lose because they are playing a game they don't understand. The numbers of people who think they're "investing" in the markets when they're really gambling in them today, blows me away. The markets also blew Soros, etc. and a lot of the other pros away too.Three thoughts:1. The markets are so dangerous that even the consumate pros can't handle them because the effects of monopoly megabyte (Federal Reserve) money/credit, lacking free-market controls, has caused malinvestment to reach wild-fire proportions. The result is, markets can't be anticipated at all -- just watch the fluctuations for one day. If you weren't buying and holding for the long run, you're losing.2. Assuming calmer markets under free-market credit and currency controls, which would presumably persist for longer periods without mega-credit induced gambling bubbles, a cultural tradition of truely _investing_ in the markets for retirement, not gambling, would build-up in the culture, and be passed from mother to son, etc.3. All EVERYONE in SS now holds at best is the bonds of a potentially bankrupt entity, USA Inc. Not only that, but they are bogus bonds. People THINK they have money in a retirement account. They have none. The money they paid was a tax. That is, every penny people sent to SS was spent, not saved. No one has any money left from the money they paid to SS. They have NO money in SS, they control NO fiduciary medium, SS owes them zero, nada. Period. Even if the speculations in 1. & 2. above are completely wrong and future markets are volatile and only attract gamblers, at least some of them would have something left by retirement age. Beats the h*** out of SS where everyone is broke and on statutory SS welfare. This means that no SS recipient has any money in his SS Ponzi account on which to retire and EVERY PENNY every recipient collects comes out of "our" pockets - - - or the pockets of our kids and grandkids."No Sir. I say leave it as the "welfare" that it is and don't let it get any bigger." -TheStranger msg#: 31448Now THERE's a notion I can whole-heartedly get behind. And it should be done right. First tell all Americans that the money they pay into F.I.C.A. is a tax as per:"The [social security] proceeds, when collected, go into theTreasury of the United States like internal-revenuecollections generally. 905(a) They are not earmarked in anyway." -U.S. Supreme Court in Steward Machine Co. v. Davis,301 U.S. 619 at 574, May 24, 1937and as such, isn't kept in any kind of retirement account, for them any more than is their so-called "personal income tax" payment.Next, since the payments are made under the general welfare provisions of the constitution, and come out of the general fund and not out of any special funds earmarked to SS employment taxes as per:"The [social security] appropriations when made were notspecifically out of the proceeds of the employment tax, butout of any moneys in the Treasury." -U.S Supreme Court,Steward, supra, at 577-578tell the American people that the welfare payments made to them under the welfare part of the SS statutes may be ammended, changed, qualified or cancelled at any time, and that at some unknown point, will undoubtedly be drastically reduced or even completely cancelled and that they should plan their finances accordingly.Finally, it should be explained in great detail that all SS payments come out of the pockets of those people now working, including their kids, grand kids, etc.As with any defective, dangerous product, the Gvt./SSA should run news clips and saturation ads (perhaps "this is your brain on drugs" commercials could be the models) explaining the dangers their product poses so people won't be taken completely by surprise.If telling this truth sounds preposterous, or worse, harsh to you, well what's become of America, and particularly it's political establishment?Regards,JourneymanP.S The Stranger, didn't mean to seem harsh here. It's not you, it's THEM claiming SS was to help the old and poor when along with everything else, it was instead, originally at least, designed to put more money in government-banker pockets -- when you can't collect a penny of SS Welfare payments until you're 65, but you're expected to die by the age of 61 - - - you tell me. HI - HAT (05/28/00; 15:33:05MT - usagold.com msg#: 31456) ji___________SS...Uncle Nanny Fiduciary Malfeseance One could further add that the "new monetary System", had to be instituted after the self-inflicted (conspiracy?),depression debacle.The Federal Reserve Masters broke the back of the Country and harvested the FEAR that would usher in the ever-more power grabbing Uncle Sugar. Whose paternity would now reach out and embrace all His childrens.1913 is truly the beginning date-time for our slide into REGIMENTATION.Ask not what your country can do for you. Leland (05/28/00; 15:11:33MT - usagold.com msg#: 31455) I'm Sure Michael Would be Very Helpful to Anyone Wishing to Put Gold Bullion Into a Retirement Plan I know very little about the subject. Gold American Eagles have been approved as legal investments to include in your IRA. ji (05/28/00; 14:26:51MT - usagold.com msg#: 31454) Stranger, Journeyman, Re: SS SS was created because the people that instituted the new monetary system at the same time knew that they would be stealing 90% of your productivity throughout a lifetime and it would not be likely that you would have any savings for old age. They could dangle this carrot in front of you and pay the "benefits" with devalued notes and not one in a million would see what was happening. Journeyman (05/28/00; 13:31:16MT - usagold.com msg#: 31453) Thanx for the link! @Leland msg#: 31445 The stuff those -- people -- get away with and their audacity - - or is it stupidity and incompetence - - is breath taking. Even more so than the gold leasing/banking debacle in that it's been going on continuously and so much longer! Well there's a limit --- you can't take more than 100% - - - or can you?Sorry to be so angry?? -- taking a close at Social Security always seems to do that to me.Leland, thanx for the eye-opening link, regards,J. ORO (05/28/00; 13:11:50MT - usagold.com msg#: 31452) Canuck - Goldie wins the race... The physical deficit is a well documented actual physical deficit that has accumulated over quite a few years and has had many gold market analysts scratching their heads. There is one thing in the horse analogy - let's say that the other horses are not silver etc. but dollar, Euro, Yen... Now the owners of the other horses have been prancing their horse round for ages and ages, but they are all workhorse breeds and a couple of them are pretty long in the tooth. The owners parade these with shiny silk and satin robes so that no one ever sees that they are workhorses - or that they are rather old. The owners give alot of interviews and have put up all they had for an enormous purse expecting that one of them will win the race, each thinking he has the chance and while negotiating among themselves how to orchestrate a three way split by which each gets some of the wealth the bettors put on the race. In the meantime, Goldie, an Arabian thoroughbred is sheltered from the crowd and nobody knows who the owners are. They don't interview and don't show the horse. All that is known is that this horse comes from a blood line that dates back centuries and that its predecessors have won all the races in which an invitation was issued, something that no one remembers but the owners of the workhorses who are now trying to extricate their fortunes from the purse. What will the owners do?Will they admit to having lost the race before they started and leave the arena with the race cancelled and the purse disbursed back to them and the funds back to the bettors and to the owner of Goldie, each taking their stake as a draw and living in infamous discredit for lifelong humiliation? Will they let the race go on and just plain lose?Will they put their bets on the winning horse, Goldie at the last minute knowing still that the bank would be broke if they won and the payout would still be small relative to what they lost? Will they try to negotiate a deal on how to distribute Goldie's winnings after the race by taking ownership stakes in Goldie, something that Goldie's owner had been suggesting for ages and has made it possible for anyone who wants to do so?What if Euro's owner was the only one who cut a deal with Goldie's owner and has a stake in her winnings?Since the odds have been staked so far against Goldie, the Big Race's pot would be bankrupt if you pile up so soon before the race, which some old-timers who remember Goldie's bloodline decided to do at the last minute despite the bad press she got. The odds could not be adjusted on time and the race track was not allowed to change the odds by the big players who put up the purse because they feared that people would see the improved odds as a good reason to put their bets on Goldie too, or worse yet, buy a stake in the horse and dilute the currency owner's negotiating power.The race has been delayed by a number of last minute negotiations, but finally the horses are out of the gate, the workhorses are using up all their energy as Goldie starts out at a mild trot just behind the others, not breaking a sweat. In the meantime, at the dark glass VIP box the owners are talking to Goldie's owners and among themselves, getting nowhere. Euro's owner, with the youngest workhorse and a stake in Goldie is quiet, knowing he has a sure second position and part of the purse. Outside, the crowd has many who took on the favorite, dollar, who is running ahead but is running out of steam quickly because his owners let him grow fat and insisted on keeping Goldie's bloodline out of him and on letting his undiciplined breeder trainer and jockey, veterans of many losses, to hold on to their jobs because they were familly.Have we any reason to place a bet in a bankrupt pot? Or should we take a stake in Goldie? Perhaps we should just sit it out because the "dark horse" has not been in a race in our adult lives but for the one cancelled in the middle some 20 years ago? R Powell (05/28/00; 12:44:51MT - usagold.com msg#: 31451) Trader, yes: Broker,no From Town Crier's 31211 of 5/24/00. "I don't want to scroll back through to find the exact post but I recall that Sir RPowell said he was a trader/broker?" I don't mind being unseen and therefore "taken" at the face value of my words. In fact, I consider this a positive aspect of the forum in that we all have this mask which denies any bias or preconceived judgements derived from our physical appearance. I know almost everyone here as I read everyday but I know all from what you have told me about yourselves and from this only. With this in mind, I would like to state that I am indeed a commodities trader but not a broker. I enjoy the research and challenge of trying to figure out where a certain commodity price will be in the future and I try to make a few bucks at this through the purchase and sale of options. However, concrete construction (floors mostly) pays the bills keeping a roof over our heads and food on the table. It's a sole-proprietor, one truck, one worker company. I own the company and I pour and finish the floors. This is not important information but I felt the disclosure necessary. Happy holidays to all, R.Powell (real name) tedw (05/28/00; 12:39:30MT - usagold.com msg#: 31450) Memorial day thoughts http://www.usagold.com To all those knights, true knights indeed, at this forumwho,when called by their country, went without fanfare or recoginition to do their duty. Korean war knights, WWII Knights, and Vietnam war knights. Let us especially remember those knights who went and fell from their steads never to rise again. Young knights with many tommorrows who gave all their tommorrows for all of our todays. A Golden sacrifice indeed worthy of the Gold Star which makes our Golden coins seem dim,pale, and earthly.True sons and knights of the American experiment,birthed by the blood of the faithful who valued liberty more than all. Courageous knights worthy of a golden heritage, who have set the real Gold Standard to which I aspire.Thank you for your service to our country.And may God bless you and yours. Canuck (05/28/00; 12:07:59MT - usagold.com msg#: 31449) @ Town Crier Thank you Sir for posting ORO's comment Thursday night.--------------------------------------------------------"The paper markets provide an investor with a means to play the price of gold. They do not reflect directly the availability of gold, just the availability of paper obligations denominated in gold. As such, the gold prices discovered by these markets are detached from the reality of gold supplies. The price of gold in these markets is the value of a fiduciary gold.""Just to complete the picture for you, spot prices, then, are arrived at by mathematical adjustment upon the price discovery of the trading on the most active futures contract--adjusted in order to account for the "time value" of the two funds involved...interest rates on the dollars and lease rates on the gold."----------------------------------------------------------I have read ORO's definition about a dozen times and there still is a piece of the puzzle that I don't understand. I will lay it out and I hope you or anyone else can walk me down the trail.".. the gold prices discovered by these markets are detached from the reality of gold supplies. "Why?I recall the analogy of the horserace. Spectators place bets on which horse wins the race, a paper money bet; they don't want to buy a horse, they want to win the bet and walk away with more money. Ok, so we have 'GOLDIE' who can run the race in a minute, 10 seconds. 'Silver' can run the race in a minute, 20 seconds and 'OLD 3 LEGS' who runs in 1 minute, 30 seconds. These times are based on numerous past races over the years. Just before the bell the odds posted look like thisGoldie 5:1Silver 3:1Old 3 Legs 2:1Why are the 'betters' going against 'Goldie'? Back to gold. Supply deficit is around 10,000 to 14,000 tonnes. Is this a physical deficit, a paper deficit, neitheror both? How does the paper 'betting' of gold keep the price down when it has ben stated that the natural equilibrium physical POG should be $500-$600/oz. Is it merely the magnitude of the short 'betting', just like the horserace above?Posts last week indicated that of all silver traded 2% is physical and 98% paper. Is gold at a similar ratio? I need to ask a final question. Are the physical gold holders under the belief that the short paper pushers now at a pivotal point whereby they cannot hold down the physical supply/demand price anymore? Is the fundamental supply/demand deficit causing gold to rise now equal to and soon to be larger than manipulative paper depressants? TheStranger (05/28/00; 11:35:18MT - usagold.com msg#: 31448) Journeyman It is precisely because SS is "welfare" that I hope the Bush proposal fails. SS was created because many people are inept at managing money and would otherwise have nothing on which to retire. Given a chance to invest their own SS accounts, they will fail. Then, as they approach retirement, they will vote for an even bigger safety net to be paid for by you and me. No Sir. I say leave it as the "welfare" that it is and don't let it get any bigger. Leland (5/28/2000; 11:14:01MT - usagold.com msg#: 31447) Comment From GOLD-EAGLE on the Reg Howe Analysis.. the derivitive market for gold & Reg Howe (Organ) May 28, 13:06 Here is my take on the scenario regarding the derivitive market. First of all, the total of all gold held by central banks are as follows: 1. USA registered to have 8100 tonnes 2. Euro zone + surrounding Euro areas= 13,000 tonnes 3. the rest of the world = 9000 tonnes. This total figure is really made up to two figures which when added together gives the total for each area. The USA has physical gold in tonnes to which we add the asset gold receivable (from gold loans) to get its total which is reported by the world gold council. The BIS is the bankers bank and as such all settlements go through it. They have on their books derivitives for the G10 at 26,000 tonnes of gold or 28,000 tonnes for everybody. Also what is known is the shortage of gold by mining companies e.g. Barrick at 13.4 million oz = (4174 tonnes) + Placer Dome + Anglo etc. we probably have for certainty a shortage of at least 7,000 tonnes and more likely 10 to 11,000 tonnes. Because derivitives is a zero sum game were you expect to have 50% winners and 50% losers, Reg doubled the known certainty short of 10,000 and in a perfect world one would get 20,000 total derivitive but instead the BIS is showing 26,000 -28000 or an extra 6 to 8,000 tonnes which must be added to the already shortage of 10,000 tonnes. What this means is that there are only 15,000-17,000 tonnes of physical supply left to our CB. The demand for gold each year is 4900 tonnes and the supply is 2500 tonnes. Henceforth, the entire gold supply of the world will be wiped out in 6 years. This is alarming and must be brought to the attention of the American people USAGOLD (5/28/2000; 10:50:58MT - usagold.com msg#: 31446) Greetings, Trail Guide. . .Let me Ramble a bit....as we slowly hike the crosscut And a Happy Memorial Day to you as well.With the derivatives mess, as outlined by Reg Howe, this morning at his Golden Sextant site, I can see why you've said so many times that the leverage is in the physical. He touches on something very important when he gets into the discussion about how much gold is actually on loan and how much is sold via the derivatives markets. I think the naked calls he refers to are much more prevalent than he even surmises. I remember right after the Washington Agreement was signed, the buzz among gold traders was the size of the naked call position that had to be filled. It was a wild, fearful scramble. This is when management clamped down in some of the bullion banks, people fired, changes made. Of course that's when the word went out that an investor could sell calls but they would have to be taken in "at market" -- which of course left holders at the mercy of the players. Odd that nearly every brokerage in the country was telling their options clients the same thing at the same time, don't you think? I expect that to happen again the next time we have a big run-up and then of course you verge on a TOCOM style default, as you have mentioned many times.I am among those who is beginning to believe that the loan pool isn't as big as some have hypothesized and that very little of the derivative position is represented by physical. This could go to critical mass -- especially when you consider that on one side of the equation you have dollar inflation ramping up creating ever more dollars and on the other side you have the derviative positions holding down the price. In essence more dollars chasing ever fewer ounces of gold. The gold will eventually disappear. Open interest is dropping in gold because no one with any common sense believes they can make a profit trading gold derivatives on the long side anymore -- the John Henry syndrome.Isn't it interesting, TG, that all these mega stock mutual funds (Janus, comes to mind), hedge funds (Quantum, Tiger, come to mind) and trading firms (John Henry) are having to close down or trim operations for essentially the same reason -- because they can no longer find anyone to peddle their positions to? Big enough to buy everything in site; but too big to find a buyer. These markets do eventually take care of themselves don't they? This is by far the most important development in the investment markets with huge social, economic and political repercussions and nobody is talking about it.Now we will have a splintering over the coming months into smaller entities, competitions should be renewed. I think this is healthy for the investment business, but the current "paradigm" will likely suffer. The warning is very clear to those who read the signs. In fact, the process has begun. As I say, the markets do eventually take care of themselves.A thought that occurred to me recently is that these gold derivative position might have been funnelled to Morgan and Deutsch to make it politically possible for a bailout to occur (via the "Too Big To Fail" Docrine) -- that bailout would be on paper products of course, but that could gun the price as they buy back their positions. In the end though, they will be left as we all know with some huge gold loans to pay at inflated prices -- their worst nightmare will have come to life.As for the GoldFields and FrancoNevada, I would like to know what they are thinking. (??) (One thing that comes to mind is that I have had some clever mining people tell me that the best gold is not what you are bringing up now, but what you will bring up in the future. Consider that one!) I do not think the two have enough metal to affect the price by keeping production out of the market. So I think that minesite.com might be overly optimistic there. Besides these are companies not countries. It would be a different story if South Africa were to cartellize and restrict production with Australia, or some such thing, but two companies representing less than 200 tons of production annually won't have anything but a short term effect. How much of that 200 would they be willing to take off the market? They do have bills to pay.I think they have something else in mind -- like a company with enough capitalization to attract big time mutual fund money. I don't know. Just guessing. I'll be watching with interest along with everyone else.Overall, I agree with you as you well know, TG: Physical gold ownership is foundational; these stock plays should be with capital you have for speculation. These are really two different approaches, two different investment vehicles. As I have said many times, gold stocks are stocks first and gold second -- Ashanti and Cambior being proof of the pudding. Many lost big money thinking they owned a gold play only to see the stock tank when the price of gold rose. Now there have been several lawsuits filed against Ashanti by those who claim they were never properly informed that Ashanti had become essentially an anti-gold mining company.Please realize, I'm not saying you shouldn't invest in gold stocks; I am saying that they are risky for many reasons and require a good eye. A good advisor is requried, but how do you find a good advisor? They all seem good to the uninitiated. At least if you read this site, you know that buying unhedged or lightly hedged producers is the way to go. But after that there are a dozen other considerations. Gold itself is less ambiguous. Any gold investor entering the gold stock arena should understand that stocks are not really a proxy for gold itself, and resist the temptation to load up because you think gold is going to explode and these stocks are going to rise ten times faster than gold, etc -- especially the so-called juniors. We have seen where that type of thinking can land you. There seems to be always something unforeseen. My advice would be to take a measured approach, stick with the blue chips, and don't take a position that's going to keep you up at night worrying.Enough of my rambling, trusted Guide. Speaking of unforeseen, have you seen any bears on this mountainside lately? What are your thoughts this fine Sunday morning? Leland (5/28/2000; 10:40:07MT - usagold.com msg#: 31445) Journeyman, As a Danger to America's Financial System...From 1937 to Date...Look at THIS http://www.ssa.gov/OACT/COLA/taxRates.html From the SSA website. Journeyman (5/28/2000; 10:13:28MT - usagold.com msg#: 31444) How About "Voodoo"? Pray for it!! @Leland, ALL http://www.zolatimes.com/v2.32/socsec_mythtext.html "In a May 15 speech he asked his listeners to "consider this simple fact: even if a worker chose only the safest investment in the world, an inflation-adjusted U.S. government bond, he or she would receive twice the rate of return of Social Security." That's an amazing fact; it's even more amazing when you realize that the Social Security system invests all its money in, you guessed it, U.S. government bonds." -PAUL KRUGMAN from Leland (5/28/2000; 2:27:38MT - usagold.com msg#: 31432)But there's just a wee tiny little accounting abnormality aboutthose bonds given to the Social Security Administration byFedGov:THEY'RE NOT ACCOUNTED AS A US GVT. LIABILITY. The "U.S.government bonds" that "the Social Security system invests allits money in" are not accounted as a FedGov debt on FedGov booksas are all other FedGov bonds!! This interesting accountingpractice is the heart of the so-called "Unified Budget." Innearly all political discussions in Washington D.C., when a polsays, "budget," you can substitute "Unified Budget." "Unified Budget" simply means any surplus SS taxes (FICA on yourpay stub) are spent by the FedGov just like any other tax take. This "excess" SS tax money is accounted in the Unified Budget asincome, a credit, an "asset." Thus, as with any other income,tax or otherwise, it REDUCES the FedGov deficit without creatingany balancing liability. Any normal bond-based governmentborrowings WOULD create a liability that showed up on the FedGovbalance sheet if standard accrual accounting were used. But NOTthe pseudo bond-based borrowing from SS, which would otherwiseshow up as an approximately $9 trillion additional liability,almost tripeling the $5.6 trillion "official" (on-budget)government debt to $14.6 trillion.When asked, Alan Greenspan verified the accuracy of thisaccounting procedure. {Greenspan quote}Why? Why would Alan Greenspan, correctly I might add, endorsethis apparent glaring accounting "irregularity?"BECAUSE, ACCORDING TO THE STATUTES, the F.I.C.A. (FederalInsurance Contribution Act) money taken from your pay (and youremployer) is a TAX, not a payment to a retirement fund. Thatmoney does NOT belong to you in any way at all. {Cong. Collins &Greenspan quotes here from TC01L & TC01M} I repeat, the moneythey take from you in the name of "Social Security" is NOT aretirement fund payment. It is a TAX, plain and simple, and assuch doesn't obligate the government extorting that tax from youand your employer to do a damn thing for you.When you receive that Social Security check, it is, by statute, awelfare payment. That's right, by statute, you're a welfarerecipient, just like the "food stamp folks" in the check-outline. {Greenspan quote on people don't like to think of it aswelfare.} This is not meant to disparge those people impoverisheddirectly or indirectly by the ~50% tax load government imposes onthem.I won't waste more bandwidth here. If you want the full story onthe statutory basis for my claims above, look up Journeyman(3/22/2000; 11:23:21MDT - Msg ID:27282) in the archives. For afull presentation of the SS problem in context, check out thelink in the header to this message.If you still think I'm a touch cynical about so-called "SocialSecurity" - - and wonder why - - consider the implications of thefollowing quote from well-respected ex-Senator Sam Nunn: "When Social Security was passed in 1935, life expectancy was 61 and retirement age was 65. This was actuarially sound." -ABC's This Week, 3 August, 1997I'm not a Bush supporter (or a Gore supporter either), and Idoubt that either has a clue to the true status of SocialSecurity OR the real advantage of the "Bush" SS reform programhis father's advisers have cooked-up for him. Shucks, theadvisors probably don't really know either - - - this is_politics_ after all. What happens when some future Congress confronts the choice ofeither paying the old folks empoverished by their predecessors --or paying themselves? HINT: History (as recent as Russia's) showsthat the old folks eat it. So the advantage of Bush's plan isthat perhaps folks who avail themselves of the "Bush" SS optionmay not starve; perhaps they'll be able to afford dog food.Bush plan or no Bush plan, our kids and grand kids aren't goingto like SS much. So how about Vodoo instead? Pray for it!!Regards & CYA,Journeyman TheStranger (5/28/2000; 9:34:05MT - usagold.com msg#: 31443) The Euro Rally This is from the current Barron's:"Europe's single currency rallied against the dollar last week, surprising investors around the globe. Indeed, many analysts doubt it will maintain the gains. Paradoxically, the euro's newfound strength came after the European Central Bank's decision not to raise rates in response to the Fed's recent move. It was seen as a hopeful sign the ECB is focusing on longer-term issues, not short-term gyrations in the currency. It ended the week at 93.35 cents, versus 89.90 cents a week earlier."Stranger's Note: The fact that Euro rallied after the Fed raised rates and the ECB didn't should testify to how disjointed the relationship between these two currencies had become. Despite what the article says, I would look for continuation of the Euro recovery back to dollar parity at least and probably beyond. Let's just hope it helps the dollar price of gold. Trail Guide (5/28/2000; 9:32:47MT - usagold.com msg#: 31442) Comment USAGOLD (5/28/2000; 8:54:26MT - usagold.com msg#: 31438)--------Would such a mining company restrict the amount of gold it placed on the market as mine.com seems to infer? ----------------A Great Hello to you USAGOLD!You have to admit it would be an interesting development for the bullion markets if a large sector even "Thought" about redirecting supply. Almost like channeling gold away from the contract markets? (smile)You know, that Golffields might be a good one to hold through "thick and thin" no matter what it's share price goes to? Oh, but if only investors would learn to reverse the "accepted" rules and place 90% of their hard money wealth in real gold and 10% in "the best gold companies". Then one could lean back and watch it all "play out" these next few months. No matter what happens. I'll be back later. Hope you (and every American) is having a fine Memorial day.Trail Guide Golden Hook (5/28/2000; 9:09:06MT - usagold.com msg#: 31441) TEST TEST Golden Hook (5/28/2000; 9:07:17MT - usagold.com msg#: 31440) (No Subject) TEST USAGOLD (5/28/2000; 8:56:05MT - usagold.com msg#: 31439) Link to minesite.com http://www.minesite.com/feature1.htm Article below. . . USAGOLD (5/28/2000; 8:54:26MT - usagold.com msg#: 31438) GoldFields/FrancoNevada Rumor: This Could Be Important As far as I know the merger deal described by "minesite.com" out of UK has not been verififed and must for the moment be considered rumor. It is neverthless extremely interesting and a potentially significant breakthrough. I don't know what all the implications are to such a merger though mine.com lists a few. Would such a mining company restrict the amount of gold it placed on the market as mine.com seems to infer? Now that makes for an interesting discussion subject.------------------MERGER OF GOLD FIELDS AND FRANCO NEVADA A DEFINING MOMENT FOR GOLD INDUSTRY.The moment when Gold Fields and Franco Nevada actually pledge their troth will be a defining one for the gold industry and it would be wise for the hedgersfrom Barrick to little Allstate Exploration to tear up their sell order tickets and throw out their bullion dealers’ telephone numbers. As for the bankers such as JPMorgan, Macquarie and Goldman Sachs who have wreaked such havoc in an industry they say they support, think again.The merger between the two would bring together not only the three best brains in the gold industry - Chris Thompson of Gold Fields and Seymour Schulichand Pierre Lassonde of Franco Nevada – but also create a new number two company wholly anti- hedging. Thompson dumped his company's hedge book at thetime of the statement by the central banks last September and anti-hedging is writ large in all policy statements made by Franco Nevada.Barrick would still be number one , but the combination of Franco Nevada, currently number five in terms of market capitalisation and Gold Fields, nownumber eight in world rankings, would start to run it close. And the companies have plenty of fire power. Gold Fields has minimal debt and Franco Nevada hasa bundle of cash.Interestingly , the Financial Times, not known nowadays for its coverage of the resources fields, got the story half right, but very wrong. It claimed that GoldFields was after Franco Nevada's wholly owned Midas mine and that the company had around C$1 million in cash and marketable securities. Actually the sumis nearer C$1 billion and it misses the point a bit that the Ken Snyder mine at Midas in Nevada is just a part of Franco Nevada's portfolio.More importantly, it is the leading precious metals royalty company in the world with high margin producing properties and royalty interests in the world'smajor gold camps and a total royalty portfolio spanning five million acres in six countries. It also, and this is a crucial key to the deal, has a royalty overBarrick's best property. Gold Fields, for its part, has 4 million ounces of production a year with cash costs dropping below US$200/oz next year. Its reservesof 74.4 million ozs are mostly in South Africa and it has an ambition to make an impact in North America.Together the two companies would have a market capitalisation that would attract generalist fund managers. This , in turn, would increase their leverage to a risein the price of gold. Together, also, they could have real impact on the supply of physical gold to the market. This is power with a capital P and the possibilitywill not be lost on bearish gold traders. Even now Gavyn Davies may be whispering a new message to Chancellor Brown, but as a politician he may be toostupid to take it in.28 May 2000 HI - HAT (5/28/2000; 6:52:50MT - usagold.com msg#: 31437) Premises The arguements for the productive values, outcomes, and modern necessities of a Fiat - debt-based, fractional reserve money medium will Ladies and Gentlemen soon have its apologists taking you to the etherial regions of modern Economics.Like the Spiritualists old preoccupation with how many Angels can dance on the head of a pin, it is given modern voice and status by the Economists, who rationalize the debt-money in exchange for service and commodity wealth IE.exchange of nothing for something of value, as how many consumers can dance on the head of a heroin needle.Injecting further debt-money to maintain life-styleIs as IMMORAL asInjecting heroin to maintain life.The Master Wolves ; those enfranchised -Big Government - Big Banking, can for only a time enjoy the "free" blood from an enforced perpetual motion killing machine. Rugen (5/28/2000; 4:19:00MT - usagold.com msg#: 31436) The Wolf and the Sheep The Wolf And The SheepSect. TwoOperation Trojan HorseThe JanissaryThe wolf's greatest problem is other wolves. In the days of the Ottoman Empire, the Turkish Sultan ruled Arabs, Seljuk Turks, Ottoman Turks, Khazar Turks, Kurds, and varied other wolf-packs going under one name or another. Each had his own problems and each had problems with the other. When ordered to mobilize to go to war, he would find them fighting among themselves. He would have to delay until he got the dispute worked out before he could start a campaign, then he would have to wait again when another fight broke out. At all times some of his followers were off invading a neighbor, or squabbling about this or that. Wolves are great on the hunt. But, getting them to the hunt and getting the hunt started wrecked the dreams of many an alpha- wolf. The solution was found - found in the least expected place - the sheep.Sheep have many qualifications necessary to be "super-wolves." Without a sheepfold, and without their Shepherd to teach them, they become what they are taught. Naturally trusting, single- minded, and dedicated, and with a substitute wolf-shepherd to tell them "wolf-right" from "wolf-wrong," and trained to war, their newly acquired "wolf- heart" causes them to become as vicious as any biological-wolf. Unlike wolves, they will fight to the last drop of their sheep's-blood. This is the sort of building material an alpha-wolf craves. An elite storm- troop, single minded, loyal to him alone. Of course, they must be kept loyal.The sultan recruited a force made up of indoctrinated-sheep. He sent emissaries to take young sheep by force. He bought others from child-stealers and kidnapers. He paid top dollar and took good care of his young "guests." They were slaves, but were never called "slaves." Even slaves object to being called slaves. They were called "Janissaries," but, since he paid them a "salary" - they were slaves.As mentioned earlier, rather than be the slave of another wolf, a wolf will drive a camel or a taxi, or almost anything rather than take a salary. "Salary-takers" are at the bottom of the pack's pecking order. To a wolf - the difference between being a plant manager and a floor sweeper is a question of degree. The salary makes both salary-slaves. Both are dependent on their salary- payer. A wolf, working for himself, at least keeps his pretensions and can dream of one day rising on the ladder to become an alpha-wolf himself. The salary is the wolf's slave-chain.1 The sultan fed his young guests well, he clothed them in the finest apparel, and had them converted to Islam. They were then trained to be warriors - janissaries - the alpha-wolf's salaried representatives.The "janissary," a sheep-slave with a wolf heart! The "leaven of the pharisees." They were the most fanatical group of warriors Islam has ever known. They had the discipline that came with 1,000 generations of selective breeding guaranteeing sheep- like obedience, and they had placed in their hearts the "jihad," the "holy-war" of the wolves. This force numbered 20,000 to 40,000. These disciplined, well trained warriors formed the spear-point of the Ottoman invasions of Europe, and they were almost invincible. The first wild-eyed sword-swinging heathen trying to separate the Christian's head from his shoulders often had blond hair and blue eyes. His hate- filled eyes and heart were filled with wolf-lore. The wolves honored them - they were elite. Most wolves feared them, but looked down on them at the same time, because they were "wage-slaves." In time, conditions changed. The janissaries were allowed to keep what they captured from the sultan's enemies, and in this way they amassed wealth, possessions, estates, slaves, and women. But, they were prohibited from marrying or keeping children bred by their slaves. In the wolf-world power comes from riches. "Great" wealth can only be inherited. Seldom can enough wealth be accumulated in a single generation to cause one to become a rival to the alpha-wolf.2 On the death of the janissary, his estate went to the janissary organization, and the organization became strong and powerful.The janissary not only faithfully fought Islam's wars, but their hereditary make-up made them remarkably good governors and administrators. In time they also provided the police, and relatively honest tax-collectors - in-as-far as honest tax- collectors can be found in a wolf society. In peace time they drew a salary from the sultan. In war time they gathered the loot from the enemies of their leader the Sultan. They were Islam's civil service and first line of defense.In time, these Janissaries took complete control. They ruled the Sultan and appointed his successor. They stopped the humiliating salary "slave-wage" and went into business themselves or took "tribute" (their protection money) from the wolves just as other wolves do. Being the most powerful with the powerful janissary organization to back them, they took most of the tribute. Now they were no longer "wage- slaves."3 It had become socially acceptable to join, and every wolf in Islam tried to enlist his children in the organization, drastically changing its composition in its latter days.4Some believe that clips showing blond-haired figures mixed in among the packs of dark-skinned wolves in mid-east newsreels may account for some of yesterday's "missing sheep" - now trained to be janissaries.5The American Red WolfRed-wolves, living around the Great Lakes captured the frontier children of the sheep, raised them as red-wolves, and gave them wolf-hearts. They became chiefs and medicine men. They were worse in their treatment of captured sheep than the red-wolves were. Having the natural discipline that came from their breeding - they single-mindedly sought to exterminate the white sheep. Their captors turned them to war and they obeyed with their entire heart. Their vision became the destruction of the flock. The names Simon Girty and Joseph Brandt come to mind. The smiling blond-haired stranger knocking at the stockade gate, begging shelter for the night - the one who held the door open for the wolf pack to rush in was the trusted one who then gleefully joined the massacre.The ravaged Sheep became careful. Many was the time Lew Wetzel, "Deathwind" himself, was bound hand and foot after entering a fort and released only when someone vouched for him. The janissary is the most feared of all foes because one cannot tell him by sight. His skin and smell are sheep, but his heart is wolf.6 Operation Trojan-Horse PoliticalWolves tend flocks of sheep with as much care as farmers tend cattle. They know all about them. It's their job. To prevent the unexpected, wolves station lookouts wherever sheep gather. Where the sheep appear agitated, or belligerent, lookouts are doubled and special care is taken.This care consists of inserting janissaries among the dissident sheep to take leadership if possible, and if that is not possible, to plant "disinformation." Rhodesia, surrounded by wolves, fought to victory. In the hour of victory their leader, Iaan Sheep, without consulting the flock, negotiated to turn the entire sheepfold over to the wolves: a magnificent coup resulting from prior careful and systematic wolf-planning. The elected ram has all the hall-marks of a janissary with a wolf-heart.South Africa, the most powerful nation in Africa, has been brought to her knees by a janissary who was given the leadership of the sheep-fold because of favorable mention given him in the South African "wolf-howl." In the U.S. the dissident sheep were given a leader. George Janissary. The George Janissary's third-party organization could have won the presidency. This would have given the sheep a grass- roots organization - something the wolves definitely do not want the sheep to have. So, George was shot and his organization fell apart. Later, George admitted to being a liberal all along. The conservative sheep of America's right wing are once again restless. To take charge and lead them in circles, the wolves have given them a distinguished janissary to be their leader, one who is being discretely promoted by the wolf-howl. The "sheep- leader" has a wolf-heart. He lies. He violates the Shepherds' laws.Rams who wish to take charge of the sheep in the future will have to pass through the filter of the Shepherd's Law if they expect be accepted by the sheep. If they pass through the filter, they won't be janissaries.Wolves Suppress Sheep RebellionWolves accumulate, take, steal, and monopolize. It's their nature. The Shepherd says that the land is to be divided among his sheep and never sold.7 Sheep law says that the land is never to be taxed, because missing a tax payment will cause the land to default to another.8Suppose wolves come to take a sheep's property and the sheep won't relinquish it, protesting that "the Shepherd" gave it to him and said that it is never to be sold. If he were allowed to get away with this, the rest of the flock might also defy wolf- authority and refuse to relinquish their land when foreclosed. This would create a problem. A sheep presenting a similar problem was a farmer named Kirk - Arthur Kirk. Such rebellion must be rapidly crushed as an example to others. A janissary strike-force composed of salary-slaves was sent to punish him.9 Wolves know that sheep will tolerate abuse from other sheep that they will not tolerate from wolves. They went to Arthur Kirk's farmhouse door and called him out. They called him names to incite him. When he came to the door - brrrrrup, bang! bang! bang! It was all over. Kirk, the sheep who showed defiance, was rapidly taken down. The point was made; Sheep who defy the wolf or his representatives, or who may become a rallying point, die. That's the way it is. The wolf-howl reported that another radical farm protester was shot by "peace officers" who were simply enforcing "the law of the land." Wolf Tribute Taxes I pay my taxes. I overpay my taxes. I encourage all others to pay their taxes. I have an accountant who tells me how much taxes I have to pay and I add extra to them. I pay under protest - but I pay.Some people use the legal system to lawfully avoid paying taxes. More power to them. However, I don't have the time or the expertise to do this. There is a very large tax-protest movement in America. At the root of the tax-protest movement is the knowledge that sheep cannot own land that is taxed. A single missed tax payment reveals who owns the land. The sheep know that the scriptures say that "the children are free" from taxes. So they go to the limit to gain exceptions so that they will not have to pay the present income tax. This infuriates the wolf who treats legitimate tax avoidance as unwillingness to pay tribute and is treason to themselves. One such person was Gordon Kahl. He was ambushed by Federal janissaries and killed. A bullet was fired into the back of his head. This type of death is a wolf trademark - the bullet in the back of the head. It leaves no doubt that the offender was executed by "the pack" for crimes against the pack. In China, the conquering reds killed millions of their opponents, each with a bullet in back of the head. In the USSR, millions were shot, a bullet in back of the head. In Poland, the reds killed the Polish officer corps - each with a bullet in the back of the head. Kahl's death was supposed to have been hushed up. But, in spite of wolf-howl disinformation, the message went out among the "kings and priests" that this killing was wrong. Kahl was really trying to obey the Law with his tax avoidance.10 The wolves say that Kahl was breaking the law by not paying these taxes, which thereby made him an outlaw. But the message among the flocks is, "Hey, this sheep was killed for obeying God's law!" This is not what the wolves want to hear. It is not what they want the sheep to be told.Another case at present is that of a "false witness." Janissaries claim that a sheep had in his possession a forbidden weapon. The sheep said his fingerprints were fraudulently planted on the weapon. If true, that is called a "false witness" which sheep-law calls unlawful. The accused sheep says that a wolf-janissary lied about the whole thing and that he is not going to play their game and go to jail for 5 to 10 years for something he didn't do. He then went to the top of a distant mountain where wolves couldn't get him.11Wolves cannot allow a sheep to wander off and form his own country. A Robin Hood in his Sherwood Forest is the last thing the wolves need. So, they sent janissaries to do a Kahl job, a Kirk job - on him. But, instead, the janissaries managed to do something that is against all sheep rules - something sheep consider "unfair." They killed a child. A young kid. "Women and children first" is as old as sheep-history. They are evacuated first from sinking ships, even when rams go down. Sheep always look after their women and children. Sheep are that way. Wolves aren't. Wolves are the first in the life-boats. Even the wolf- howl admits it. Remember the Greek passenger ship that went down and the passengers accused the crew of getting in the lifeboats first and leaving them on the ship to drown? That's the nature of wolves. The Titanic went down and those saved were women and children. The male passengers and the crew went down with the ship. It is the difference between a sheep- ship and a wolf-ship. The Weaver Massacre on the mountain at Ruby Creek got out of hand. The janissaries ambushed a sheep and killed one of his kids. The wolf-howl blacked it out outside the packs hunting area. It was only later that the sheep in other hunting areas heard about it. The Northwest wolf-pack hunting area gave the sheep a wolf- version of the story, but to this very day many other parts of the nation know nothing about it. The wolves know how to manage the sheep with their wolf-howl. They've had enough practice.They knew what would happen in the great valley if the sheep caught the smell of wolves making a kill. A sheep stampede could result! It has happened before. The German sheep caught the smell of blood as the wolves killed Russian sheep and they stampeded. It took the combined efforts of all the wolf-packs in the world to get them under control again. Wolves already have their problems with other wolves, they don't need the flock stampeding off somewhere. The next stampede could take a hundred years to bring under control. Perhaps never. The wolves made their Ruby Creek kill, and then stood still and waited to see what the sheep were going to do. Most sheep knew nothing about it, so they did nothing. A few were restless. As soon as these settle down and go back to acting like sheep - the packing house operation will start up again. The wolves have shown the sheep once more that there is no Robin Hood, and there's no Sherwood Forest where one can run away and hide. That's the way wolves manage sheep. Wolves Require Janissary BonafideTo be truly accepted as a janissary and receive the benefits that accrue to a janissary - a sheep must irretrievably divorce himself from the flock. That irretrievable step is often a capitol crime. The sheep who attacks his God and curses him can then be trusted by the wolves - but not by the sheep. The bridges are burned and the outlaw- sheep is considered "traitor" by the rest of the flock. He is THEN a fit candidate to become a "janissary."The change of allegiance may be sealed by the ancient ritual of marriage.12 Marriage is the ancient ritual that merges kingdoms, economic empires, and can be the blood union of wolf and sheep. It causes the offspring to inherit the characteristics of the wolf while appearing to be a sheep.13 This preferred offspring is needed to open the door to the sheepfold because the wolf disguised by a sheep-skin is the wolf most difficult to detect. The offspring of a wolf- sheep marriage is one of the most valuable acquisitions of the wolf-pack. Its lifetime job is opening the gates of the sheepfold so that the wolves may enter. The one who makes it possible receives special consideration.Next to the union of the sheep with the wolf is the bonafide of allowing one's child to be taken and united with a wolf. Sheep- law dealing with this infraction is strict. The father of the wayward sheep wars against his God if he refuses to disown his sacrilegious offspring.14 The sheep who refuses to disown his mixed off-spring may now be accepted as bona fide, he has a "wolf-heart." The wolves may now safely pay him the benefits accruing to a loyal janissary.In South Africa, a janissary named DeKlerkasheep - a sheep with a wolf- heart - has given his blessing to his son's marrying a black she- wolf. To obtain the substantial rewards a janissary receives - bridges to the flock must be burnt.In Germany, a wolf posing as a sheep was elected to the nation's highest office. He helped bring more than 100,000 sheep to trial for wolf-assault. Janissary judges have filled the prisons with sheep accused of assaulting wolves. In Russia, 35,000,000 sheep and their allies died in the teeth of the wolves. Not a single wolf has been found guilty. It would be against nature if they were. Wolves see nothing wrong with wolves doing what wolves do.Janissaries Protect WolvesAn injured wolf quickly falls victim to another wolf. "Red Brigade" wolves in Italy shoot victims in the legs so they can't walk. Being a cripple is one of the ultimate injuries inflicted by wolves on wolves. Wolves have this thing about hurting other wolves, breaking fingers, arms, and legs, to make cripples out of them. American red-wolves used to cut the Achilles tendon so the injured one could not dodge the blows of other wolves. Desert- wolves cut off hands or feet, or cut off eyelids to make their selected victims blind and forced to beg. It's what wolves do. Wolves can fight skillfully and well. But they prefer to use others to fight their battles: they pay them handsomely. Under sheep-rules this appears cowardly, but this is not the case. The wolves use sheep-janissaries to preserve the wolf from being injured and falling prey to other wolves. The highest example of wolf-skill is to fulfill the wolf motto; "use an enemy to kill an enemy." Wise sheep never talk down wolves. Wolves are often magnificent animals. They are strong and muscular. They are the end product of 1,000 generations of selective breeding - breeding the very best of those animals who survived doing what wolves do. I had a dog when I was in the Army. A German shepherd. His name was Thor. I used him to hunt people. I know something about dogs. I saw a coyote. A coyote is a wolf, a small wolf. My dog wanted that coyote. I told him to go get him. Then I began to have second thoughts. Maybe that was not such a good idea. I took a good look at that coyote. That coyote was nothing but a bundle of wire and steel muscles. My dog was good. He weighed 110 pounds. He was tough. But he was a dog and he was chasing a wolf. If my dog caught that wolf, he would probably kill him, but my dog would be hurt before it was over. So, I called my dog off. Fighting wolves is something that should never be undertaken lightly. Once started - it's for keeps. Wolves seldom take prisoners. There have been sheep-armies which held wolf-armies in contempt, and were exterminated as a consequence. Just because you are at the front and the wolves remain behind working in finance or in quartermaster, it doesn't mean that they are cowards. It means that they don't see the need to fight when they have gotten someone else to fight for them. And most believe they have more to lose by being injured. An injured wolf is sooner or later going to be attacked by another wolf. Among wolves there is no such thing as a "knight in armor" ready to rescue those in distress. Wolves can be family-oriented, musicians, merchants, traders, agitators, Mafia hit-men, or "wolves-on- patrol," but "knights" are butts of their jokes. I have played football against wolves and they weren't afraid to butt heads. I have fought them in the ring and they weren't afraid to get in your face. Wolves are a lot of things - but yellow isn't a trait. Don't get the idea they are yellow. When they back away and feign flight - expect a trap. They go by different rules. A wolf is a wolf. He is what he is. He was made by God to cull the flocks - and he does it very well. He forces the sheep to choose.15 ss of nep (5/28/2000; 3:56:12MT - usagold.com msg#: 31435) old news ? http://www.tv-u.com/china.html The McAlvany Intelligence AdvisorSPECIAL REPORT RED TIDE: THE CHINESE COMMUNIST TARGETING OF AMERICAMay, 1997 gidsek (5/28/2000; 3:21:11MT - usagold.com msg#: 31434) Niall Smith: Director, Deutsche Bank Securities http://mny.co.za/BusToday.nsf/Current/422567D900452FF8422568EB0056FEEE MONEYWEB: Is he Father Christmas or is he just a really smart guy? Niall Smith, director of Deutsche Bank Securities is with us and today Deutsche Bank came out with the warrant that you issued -- it's the Gold Fields C1, call 1, we'll go into that in a little while -- but you are offering a price which is above the last trading price. Now let's just talk about warrants. You brought the first warrants into South Africa, the market has developed very well, but what is a warrant?NIALL SMITH: Right, Alec, a warrant really gives an individual a cheap way to get into blue chip stock, and what they pay is about a quarter or even less of the price of the share, and they get the upside on the share.MONEYWEB: Now, when was this Gold Fields Call 1, or C1 warrant launched?NIALL SMITH: I don't know exactly, but probably, typically our warrants are a year and a half or so, probably about a year and a half ago, so I would expect about a year and a half ago.MONEYWEB: So a year and a half and now it's coming up for expiry on 15 June.NIALL SMITH: Yes, so about three weeks to go.MONEYWEB: Now for this warrant to be worth anything, Gold Fields Ltd share price has to get to R32.25.NIALL SMITH: Correct. The investor in the warrant makes the difference between the R32.25 and whatever the share price is, so if the share price gets to R35, they'll make the difference between R32.25 and R35.MONEYWEB: But at this point in time, the share price is R25. Now that would suggest theoretically the warrant is worthless?NIALL SMITH: Well, that's right, it's very close to worthless. I think if you do normal calculations on this warrant, it's worth maybe 2c, around there, 2c, 3c. However, we are running a risk business, these are our warrants that we've issued and in terms of that, there is a chance that the warrant goes above R32.25. There are about 48m to 50m warrants in issue, if that happens, we stand to lose R20m. It's not our business to lose R20m. So what we've decided to do, and we do this fairly often overseas, we've done it in South Africa before, and Sasol, Breweries and Barlow warrants, where they approach expiry, the warrant is not too far from expiry and strike price, we make a decision -- do we want to play roulette, do we want to go for red or black? Now, if we're wrong in going for red or black, we can lose R20m, so what we do is we make a conscious decision, it's better to spend 5c on 48m warrants. If people want to sell them, we'll lose a couple of million rand. That's fine, we're happy to lose one or two million rand, to save the probability of losing R20m.MONEYWEB: But why don't you just go into the market and buy as many as you can at 2c, which is where they last traded?NIALL SMITH: Well, Alec, it's the normal thing, if you bid for 2c, you'll get a few warrants, you won't get very many. Yesterday we traded -- I think it was just over 2m warrants we managed to buy -- so certainly if you bid up the price, you are more likely to attract sellers and, let's be honest, if you hold that warrant, your probability of making a profit is extremely low. So, if I was an investor, I wouldn't actually hold onto that warrant. I think it's a great price, sell now, from Deutsche Bank's point of view, we don't like risk, we don't like the probability of losing R20m or more so, although it's small, although the probability is maybe a few percent….MONEYWEB: Just explain why, how would you lose R20m?NIALL SMITH: Let's say the price jumped. The price jumped now, there's now time left for us to do anything about that. We can't recover that by buying the shares or anything, there's three weeks left. We can't recover that. If the price jumped to R30, went to R35, we've got 48m warrants in issue. Just simple calculation -- if the share price is R2 above R32.25, we lose huge amounts of money, huge. Now, in three weeks we can't do anything about that, so I don't like gambling. In terms of the desk we run, we run a business, we're here for the long term and I'm happy we'll spend one or two million rand, that's fine, that's the cost of issuing warrants. Now I don't want to say every warrant that approaches expiry we're going to pay these sort of numbers, but you can expect that we will pay up above ruling prices if warrants are coming to expiry and they're fairly close, or we think they're close enough.MONEYWEB: And if it's highly speculative like this one is ...NIALL SMITH: I think it's a highly speculative stock. MONEYWEB: Clive Roffey is talking about a catapult that's coming through and, if that were to happen end of May, he's got five days left now to get over $300 an ounce, so if that were to happen, if the gold price went over $300 an ounce, you'd be in big trouble.NIALL SMITH: Absolutely. You do the sums. R2 on 48m warrants, you start losing money, so we're not prepared to take that risk, we don't run our business like that, we say we'll pay the money, it costs us a couple of million. That's fine, we're happy to do that. We are here for the long term. We've got lots of warrants, and typically, as I say, we've done this before on SAB, on Barlows, on Sasol, and on the other warrants where we think there's a realistic, even though small, possibility, even if it's a 5% possibility, of a warrant expiring in the money, we'll pay the money, we'll take the pain, Deutsche Bank can afford that, but we don't like gambling.MONEYWEB: You don't know anything? There's nothing you can tell us about the announcement that came out yesterday from Gold Fields, saying they are involved in talks.NIALL SMITH: Unfortunately, I can't help you.MONEYWEB: But the fact is, that increases is your risk.NIALL SMITH: It does increase the risk, but I can't say anything, it might be good news, it might be bad, I don't know anything.MONEYWEB: What a fascinating development. All those people who bought warrants for 2c yesterday, Niall Smith will give you 5c for them now, but they've got to be a particular type, they're the Gold Fields call 1s and they expire on 15th June. Theoretically worth nothing, but who knows, Clive Roffey has been right before, and we've also got some discussions going on with Gold Fields Ltd at the moment offshore. They've warned us about it and some of the people were saying that they could be talking about a price of around R35. If that happens, then Niall Smith is going to look like a genius.By: Alec Hogg Leland (5/28/2000; 3:18:09MT - usagold.com msg#: 31433) If You Like Paul Krugman...Here's His Home Page http://www.mit.edu/people/krugman/index.html . Leland (5/28/2000; 2:27:38MT - usagold.com msg#: 31432) How About "Voodoo"? May 28, 2000 RECKONINGS / By PAUL KRUGMAN Money for Nothing? Economists don't usually make good speculators, because they think too much. Like the famous if apocryphal professor who refused to pick up a $100 bill, they tend to assume that if there were money to be had, someone would already have taken it. However, caution that can be a liability on the trading floor is an asset off it. Sometimes the observant do spot opportunities for large, risk-free gain -- $100 bills lying in the street -- that others have somehow missed. But a wise man doesn't assume that such opportunities will present themselves on a regular basis, and he certainly doesn't use that assumption as a basis for his family budget -- or his plan to save Social Security. It is a fact that historically stocks have been a very good investment. The best-known demonstration of that fact comes from Jeremy Siegel of the University of Pennsylvania, who has pointed out --in his book "Stocks for the Long Run" -- that during the 20th century anyone who was willing to buy and hold for long periods would almost always have done better buying stocks than bonds. So there wasn't a tradeoff between risk and return: stocks were just a better investment, period. It turns out that there was a $100 bill lying on the sidewalk (quite a few billion bills, actually) that for some reason nobody picked up. But many people have misunderstood what that observation means. It doesn't say that there is some natural law guaranteeing that stocks will always be a great investment; it says that historically stocks have been underpriced. Investors weren't willing to pay as much for claims on corporate earnings as they would have if they had properly understood how low the risks were. And a funny thing happened on the way to the 21st century: the price-earnings ratio -- the price of a dollar of corporate earnings -- soared. In the period studied by Professor Siegel prices were on average less than 15 times earnings, and stock investors on average earned a real return of 7 percent. Nowadays the price-earnings ratio is on average more like 30. Is this irrational exuberance, or did investors finally absorb Professor Siegel's lesson? Either way, that $100 bill has now been picked up. If stock investors now have to pay twice as much as they used to for a claim on earnings, and if profits grow in the future as they have in the past, those investors should now expect to earn only half the historical rate of return. And yet many of those offering plans to reform Social Security -- among them, of course, advisers to George W. Bush -- insist that stocks are the answer, and that it is safe to assume that stocks will keep on yielding 7 percent forever. And if you try to point out that buying a piece of corporate America is much more expensive than it used to be, they just repeat the mantra that stocks have historically been a great investment. In other words, that $100 bill was there yesterday, so it must still be there, right? Is the odd susceptibility of first-rate economists to such a naïve fallacy a triumph of wishful thinking over analysis, or a disingenuous bow to political expediency? Recent remarks by Mr. Bush offer evidence of good old-fashioned American disingenuity at work. In a May 15 speech he asked his listeners to "consider this simple fact: even if a worker chose only the safest investment in the world, an inflation-adjusted U.S. government bond, he or she would receive twice the rate of return of Social Security." That's an amazing fact; it's even more amazing when you realize that the Social Security system invests all its money in, you guessed it, U.S. government bonds. But the explanation -- which Mr. Bush's advisers understand very well, even if the governor does not -- is that today's workers are not only paying for their own retirement, but also supporting today's retirees. And if you think that's a minor detail -- that the question of how to meet existing obligations when workers are allowed to invest their contributions elsewhere is a side issue -- let me assure you that I too would have no trouble devising a painless plan to save Social Security, if you let me assume that a large part of the system's obligations would magically disappear. Or maybe "magic" isn't quite the right word. How about "voodoo"? (Thanks to THE NEW YORK TIMES, And Fair Use For Educational/Research Purposes Only.) ViewYesterday's Discussion.
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