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ARCHIVED DISCUSSION FROM 3/6/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

SHIFTY (03/06/01; 23:32:32MT - usagold.com msg#: 49508)
YGM
Hey Ken you still with us?

Shifty

SHIFTY (03/06/01; 22:26:04MT - usagold.com msg#: 49507)
Kremlin stalls platinum, rhodium quotas
http://www.bday.co.za/bday/content/direct/1,3523,806030-6094-0,00.html
The delay is due to technical and legal reasons rather than rivalry between bidders for the quotas, sources claim
MOSCOW Russian action to finalise export quotas for platinum and rhodium has been stalled at the legal department of the Kremlin, Moscow sources say.

The new source of the delay, sources claim, is technical and legal, rather than continuing rivalry between bidders for the quota among Russian platinum producers, banks, and the state stockpile agency Gokhran.

Larisa Brycheva, the powerful head of the presidential legal department, declined to respond to questions. Brycheva provides legal clearance of all presidential documents before signing; her judgments can involve important policy issues, and shift the balance of influence in the Kremlin between contending interest groups, such as the platinum producers, the Central Bank and Vneshtorgbank, and state stocking and selling agencies like Gokhran and Almazjuvelirexport.

Nikolai Kozin, vice-president of Koryakgeoldobycha (KGD), the leading alluvial platinum producer, said he believes all the necessary approvals were given to the quota authorisation documents by the last week of February. KGD has been seeking its own export allocation to relieve the pressure it felt last year from Gokhran to deliver its platinum at a deep discount to the spot market price.

The mining company can produce between 130000oz and 200000oz of platinum a year, depending on the delivery, price, and financing terms it can negotiate. Last year, rather than sell to Gokhran, the company decided to stock metal itself, and wait for this year's quota decision.

Kozin said he is certain "it is not Gokhran that postpones the signing of the quota documents. Probably the delay is due to the purely technical reasons." He said he does not know when the quotas will be approved, or this year's shipments begin.

International market speculation that the quota signing for platinum is imminent halted the rise of spot-market prices for platinum last week the price peak was just under $615/oz , with resistance reported by traders at $625.

It fell to just below $577, with support reported at $560.

According to Yevgeny Ivanov, chairman of Rosbank, the quota documents may be signed "any day now". Rosbank is part of the Interros group, which controls Norilsk Nickel, Russia's largest producer of platinum group metals.

The group has lost influence and fallen afoul of several branches of the Putin administration in recent months.

Norilsk Nickel is delivering palladium to contract customers without delays, on the authorisation of a 10-year quota. Norilsk Nickel has asked the Kremlin this year for a five-year quota for platinum and rhodium, but Ivanov says he does not know if this will be granted.

He said the delay is "due to the lack of final decision of the state bodies on the volumes of quotas for state sales of platinum group metals".

He could not say whether it is Gokhran or the Central Bank that is the stumbling block. Last year, the Central Bank was not allowed to export any platinum, and it lost control of the bulk of its palladium stock to the Finance Ministry and Gokhran's chief, Valery Rudakov.

A substantial volume of this palladium is reportedly sitting in German bank vaults, where it was deposited by Rudakov as collateral for loans. Industry sources expect to see another tranche of up to 1-million oz of palladium released from this source to Switzerland by the end of March. The Russians and their German bankers performed a similar manoeuvre at this time for the past two years. The Central Bank has said it wants to resume buying of domestic platinum, in conjunction with the state-owned Vneshtorgbank. Vneshtorgbank received export authorisation last year for 161000 oz of platinum, and it applied for a larger quota this year.

Regarding Russian shipments of rhodium this year, Ivanov said he is confident that rhodium will be placed on a 5year quota, eliminating firstquarter delays in 2002. According to Johnson Matthey's interim review of the trade, last year Russian rhodium shipments jumped to 280000oz, a record for the decade.

Ross Norman, of The BullionDesk.com in London, said he expects this year's sales to be much closer to his estimate of annual production at 115000 oz. Other analysts have put the annual output figure for Russian rhodium at between a low of 70000 oz and a high of 118000 oz. "We believe Russian stocks (of rhodium) will be in a similar state to their platinum ones not big, six to nine months' production at best. So rhodium prices may, like its sister metals, remain pretty steady."

Russian production and stockpile figures are state secrets, and there are wide divergencies between the published estimates.



slingshot (03/06/01; 20:51:34MT - usagold.com msg#: 49506)
Journeyman msg.49499
I agree the danger of violence is a matter of frequency. The illusion created by the media is hyped and gives creditability and approval to the actions of the goverment to inflict violent and illegal acts upon the people. Can you say Waco or Taxes. Goverment, just one more reason to buy gold. The gang incident, Once. Drove into the wrong part of town I was unfamilar with. While back, Just a good scare. More alert of my surroundings.
Good night all!
Slingshot

Tree in the Forest (03/06/01; 20:47:07MT - usagold.com msg#: 49505)
Pandagold: War
I do not agree with you Pandagold. There may be plenty of hype but this will not be a small skirmish. It will be bigger than desert storm. I have info from other sources pointing to a larger war, possibly bio-chemical and thermonuclear. And terrorism in the US also possibly bio-chemical and thermonuclear. We might be looking at WWIII but probably not an Armegeddon like scenario. Defense stocks have been moving up for over a year now because smart money knows what's coming. Also see my previous post with a link to K wave analysis.

Canuck (03/06/01; 20:31:28MT - usagold.com msg#: 49504)
(No Subject)
So in conclusion WHO is buying, anyone looking to get out of the USD tightly strung noose around their neck.

So how does ME, China, Russia, south-east Asia and Japan look for starters?

Thoughts?

Canuck.

Canuck (03/06/01; 20:27:42MT - usagold.com msg#: 49503)
To other novices
Further,

It seems (from earlier today) that the Bank of Japan has warned the US (in 1997) that 'dumping' of US debt will occur if the bullying of the USD were to continue.

However with some 60% of reserves in USD one cannot boast of the 'dumping' of US debt without taking a beating at home. However, QUIET accumulation of gold (international currency of last resort; claims of debt, zero) while reducing foreign held debt may be 'in the cards'.

QUIET buying, QUIET buying, and when the hammer falls it will truely be earth-shattering.



Canuck (03/06/01; 20:19:43MT - usagold.com msg#: 49502)
To other novices
From ORO earlier;

"Market participants will prefer transparency because it is favorable to all parties, unless there is mutual interest in hiding this information from the public. Such mutual interest can only come from a condition in which bankers are overleveraged, having lent out too much of their client's gold, the major buyers still have outstanding delivery obligations owed by the bankers that can not be filled if gold depositors withdraw their gold, producers have oversold their future production and stand to become insolvent (see Ashanti and Cambior) if gold prices rise, and regulators have not filled their mission of regulating the industry and wish only that the system survive till they retire."
--------------------------------
This is a very, very good statement, please read and understand.

There is not transparency and openness in gold transactions because of the probable overextention of the sellors thus they must be quiet(and probably crooked). Buyers are quiet because they accumulate; if they boast of buying, it will inflate the price of gold. Earnest buyers love the sell, sell scorn of the media.

It seems (from the Another/Foa archives) that China and oil are purchasing gold. It seems Japan and Russia are possible buyers, maybe more than they let on. See the movement of gold from fiat currency to hard currency . This movement is the line that Another speaks of from South Africa through ME to Asia.

The picture becomes clearer, yes.


SHIFTY (03/06/01; 19:56:44MT - usagold.com msg#: 49501)
Randy (@ The Tower)
Randy did you drop Farfel a note?

$hifty

Journeyman (03/06/01; 19:33:34MT - usagold.com msg#: 49500)
Lightening struck; addendum

Much of the danger from other humans stems from "clique selfishness," that is, each group attempting to take care of their own at any expense.

This is a development of modern populations that are too large for face-to-face knowledge with each other - - - usually in combination with a lack of understanding of the advantage of trade because "division of labor" makes such trade a win-win situation.

Regards,
Journeyman


Journeyman (03/06/01; 19:26:05MT - usagold.com msg#: 49499)
It's true, people DO get struck by lightening @slingshot msg#: 49490

All those things you suggest about the "jungle" are good advice.
But you rarely need them. I've carried what most people would
consider extremely large amounts of cash around the world on my
person for over twenty-five years and have never been robbed.
Neither have any of my associates. Most cops retire without ever
firing a single shot in the line of duty.

How many times have you confronted a street gang? When was the
last time?

Danger of violence is a matter of frequency, and the idea we are all in
imminent danger is the monument to government-related violence - - -
AND the media's "dramatic imperative."

AND a large proportion of dangerous street gangs persist because
they are protecting their drug turf. In fact, a large percentage
of the "crime" that actually exists, perhaps more than 60%, does
so because a certain very arbitrary group of drugs have been
turned into so-called "controlled substances."

Relax. Even so, you probably won't be robbed.

When we carry money, we worry more about being robbed by
"organized crime with a flag." A few of my associates have been
robbed by these highwaymen.

Regards,
Journeyman


714 (03/06/01; 17:54:17MT - usagold.com msg#: 49498)
tg re: savings rates
According to Gary Shilling in his recent book "Deflation", savings rates RISE in deflation, and drop in inflation. If your holding a currency that's falling in value, why save it? Spend it on something tangible, like property or gold, that holds its value. Interestingly, with Japan's deflation over the last ten years, their savings rates have risen. Fwiw.



Chris Powell (03/06/01; 17:52:39MT - usagold.com msg#: 49497)
A South African appeals to U.S. treasury secretary
http://groups.yahoo.com/group/gata/message/698
Now if only the South African government
can raise these issues diplomatically
with the United States.


To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

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Chris Powell (03/06/01; 17:51:09MT - usagold.com msg#: 49496)
Operation Goldcrest begins in Belgium
http://groups.yahoo.com/group/gata/message/696
Start your own operation, wherever you are!

http://groups.yahoo.com/group/gata/message/696

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@yahoogroups.com


tg (03/06/01; 17:07:46MT - usagold.com msg#: 49495)
pandagold
Say it, as it is.

I like that in you

Pandagold (03/06/01; 16:35:26MT - usagold.com msg#: 49494)
Hyped tension in the ME

All you are likely to get is a quick fire knock-out strike against Iraq.(which would probably be done by the US and the UK) All this is Israeli propaganda to serve as an excuse.

The other Arab nations, like Egypt, will need their armies on alert not to attack Israel but to put down insurrection among their population who are likely to attempt an overthrow of their 'puppet' regimes when Saddam and many Iraqi people are 'murdered'. Which is one of the main reason that it wasn't done at the end of the Gulf war, or up until now.

Israel has the most devastating arsenal of weapons of mass destruction in the world next to the US, and the Arabs know it.

If Israel is ever destroyed it would be from within, and for that the whole Arab world would have to hold out an olive branch and leave them completely at peace, and withdraw all their labour - an unlikely event.

If there was any real substance to all this, gold would have moved up. It didn't do much in the Gulf war because even then there was 'no contest' and America, and TPTB, knew it.

tg (03/06/01; 16:07:16MT - usagold.com msg#: 49493)
(No Subject)
I am hoping some of the great minds out there may help.

My hypothesis is that during any periods of substantial inflation, the savings rate of US citizens was generally well into the positive ( and probably the same for Weimar Germany). Anyone have any figures

With negative savings rates, there is not enough liquidity about to force up prices, let alone room for the over indebted to take up more borrowings, no matter how attractive the rates. The psychological feeling of wealth is now fast disappearing in the U.S and people are no longer as confident about taking on debt.

Simplistic, I know. But valid none the less.

PS Greenspan is not the messiah, he is just a very naughty boy

andrew the kiwi (03/06/01; 15:51:14MT - usagold.com msg#: 49492)
MIDDLE EAST LURCHES TOWARDS WAR WITHIN 3 MONTHS
NEWS BRIEF: "Threat of War", Israel National News, Arutz Sheva Commentary March 3, 2001, http://www.israelnationalnews.com/news.php3?id=702

"Military historian Dr. Aryeh Yitzchaki was asked today how he reads the reported Egyptian decision to call up its reserves for "exercises." His response: 'All the classic warning signs are there, and it is clear that we are poised for war, possibly within two months. I don't want to scare anyone, but as opposed to IDF Military Intelligence, my opinion for the last two years has been that war will erupt in the spring of 2001, and it will involve not only the Palestinian Authority and Hizbollah, but also Egypt, Syria, and Iraq. The Egyptian Army does not need reserves - it's an army built on its standing force, and therefore Israel's denials of the Egyptian call-up are not relevant. The Egyptian Army is poised for war; it has created new regiments, has been training intensively, and has acquired the most up-to-date American equipment..."

As we reported in NEWS1056, the U.S. House of Representatives' Task Force On Terrorism And Unconventional Warfare, entitled, 'Approaching the New Cycle of Arab-Israeli Fighting', submitted to Congress on December 10, 1996, spoke of this upcoming war. The report said: "... Syria, Iran, Iraq, Pakistan, and Egypt are planning and building for a final, devastating war of annihilation against Israel. This includes acquiring nuclear, biological and chemical weapons (NBC) in a mix with conventional weapons, e.g., tanks, aircraft, and soldiers, all in massive, overwhelming numbers." [P. 43]

This line-up is now formed against Israel, with the lone exception of Pakistan. Syria, Iraq, and Egypt are now on full military alert, and hardly a week goes by lately within some Israeli or American official expressing concern over the preparations Iran is making to acquire nuclear weapons. Further, Iran has been supplying Hizbollah guerillas and terrorists with weaponry that will allow them to attack Israel from Lebanon in a conventional manner.

Notice the information here that Egypt is "forming new regiments". In addition to other war signs, forming new units, or reorganizing units and communications is usually considered a definite sign of war. Units and their communications needed to fight a hot war are very different than those needed in peace time.

Further, military "exercises" are very often the prelude to attack, because units can come up close to the enemy's border without causing a reaction from their enemy because they are just engaged in "exercises". This tactic is one of the oldest in the books, and is not fooling Israel, I am sure, given the general high state of military readiness and tension throughout the entire region. The only people who will be fooled by these "exercises" will be the gullible Western public.

Egypt is actually the latest Muslim nation to fully mobilize her forces. Syria mobilized her forces last December 12, 2000. This action immediately caused Israel to mobilize her forces fully. Syria has also encouraged the Hizbollah fighters in Lebanon to attack Israeli towns and villages on the northern border. Thus, Israel is threatened by Egypt on the Southeast and by Syria on the North and Northwest.

While I have not detected any military action on the part of the Jordanians, we do know that they have refused to renew their diplomatic post with Israel. Their "peace" with Israel is mighty cold these days.

The Palestinian Authority is also reorganizing their paramilitary forces -- the PLO -- to prepare for war against Israel from within. In this story reported above, we read: "PA Communications Chief Imad Falouji told a PLO rally in southern Lebanon on Friday ... that the PLO is now reorganizing to escalate the violence against Israel: 'We are going back to the '60s, '70s, and '80s. The Fatah Hawks, the Kassam Brigades, the Red Eagle, and all the military action groups are returning to work'." [Ibid.]

In the U.S. House of Representatives report quoted above, we see that the PLO has been assigned the task of attacking Israel from within, causing as much infrastructure damage as possible, preventing Israeli troops from moving freely to the borders, and forcing regular military units to turn back from facing their external borders to fight the PLO within. This action would weaken Israel's ability to fight against Syria, Iraq, and Egypt whose forces will be attacking from across the border.


NEWS BRIEF: "Iraqis out-smarted U.S.-U.K. Smart Bombs", by Ian Bruce, The London Herald, http://www.theherald.co.uk/news/archive/28-2-19101-0-24-33.html, February 28, 2001.

"IRAQ managed to decoy 20 of the 25 special standoff weapons dropped in the joint US-UK raids near Baghdad two weeks ago by fooling their guidance systems into exploding hundreds of yards short of their targets. NATO intelligence sources say only one of the five radar sites and command centres attacked was destroyed, two others sustained damage, and two were unscathed and remain operational. It is believed that the Iraqis used a combination of jamming and false signals to confuse the new Raytheon joint standoff weapons' global positioning system. The 40-mile range smart bombs depend on a last-second satellite fix to guarantee a direct hit."

"The US carried out a dress rehearsal to test the weapons a few days before the actual raids on Iraq. The 66 bombs launched by US navy aircraft achieved 100% success. In [real] action, they chalked up an 80% failure rate ... With global positioning, the weapons should be spot on target. But if you can emit a powerful enough signal to alter the satellite information being received by the bomb on its final approach, accuracy goes out of the window. Against hardened military sites, you need a direct hit to be sure of a kill. An aim point error of just a couple of hundred yards spells the difference between total destruction and a light peppering with shrapnel and minimum blast damage."

Apparently, the Serbian Communists who fought against U.S. forces have been sharing data with Saddam Hussein. Serbian forces were able to learn much of our technology during this air war against them, and developed certain strategies that countered much of our technological advantage. This article concludes with just such a strategy:

"The latest Iraqi trick of targeting allied aircraft with long-range radars and then launching missiles at them from unrelated positions was pioneered by the Serbs during UN intervention in Bosnia and Nato's aerial assault during the Kosovo conflict. They [Serbs] downed one British Harrier, an American F16 and a Nighthawk F117, the first stealth aircraft ever shot down in combat. US sources say privately that it is 'only a matter of time' before the technique brings results for Saddam Hussein."

As I stated in NEWS1474, Hussein's military commanders tested US and Israeli defenses and intelligence capabilities on February 22, when he took his theater missiles right up to the last stage of firing before he shut them down. Now, Iraqi military commanders know exactly what we can and cannot detect, how much time it takes us to react, and from which direction our counterattack will come. All of this is a prelude to war; and now, we discover that Iraq has learned to defeat our smart bombs and to inflict some casualties among the American and Israeli attacking aircraft.

But, the worst revelation is yet to come -- Iraq is reportedly nuclear-capable right now!

NEWS BRIEF: "Was This Saddam's Bomb?", Prophezine Newsbites, 26 February 2001, originally in www.sunday-times.co.uk/news/pages/sti/2001/02/25/stirevnws01015.html

"Intelligence agencies, including Israel's Mossad, insist that Saddam has never had the technology or the fuel to fulfil his ambition of creating a nuclear arsenal. Yet Leone, and other defectors who have corroborated his story, insist that Saddam not only has nuclear weapons but has tested them."

If this story is true, then Saddam Hussein has the capability right now to annihilate Israel, if he can only deliver the warheads he is reported to possess. Thus, the story of the Iraqi theater missiles recently parked near the Syrian border take on greater significance. Remember the charade we all were forced to endure as United Nations "inspectors" were tromping all over Iraq to discover any evidence that Hussein was building nuclear, chemical, and biological weapons, so we could destroy them? Remember how Hussein regularly defied the inspectors, with the U.N. meekly submitting to his belligerence? I believed then that this whole inspection nonsense was a public charade, and now this story confirms it.

Iraq has reportedly been mightily assisted in this effort by the Russians, and were able to buy the fissionable material from the International Black Market. Even as his people starved to death, Hussein was able to spend oil money like a drunken sailor to buy what he needed, for bribing officials from Brazil to South Africa when he needed, and to hide his weapons program from a United Nations inspection team that always gave him more slack than they ever should have given.

Remember that Hussein in the highest-ranking Freemason in the Arab world which means that he is fully cooperating with the Illuminati in its plan to produce Antichrist. Thus, Hussein's Masonry plus his leadership in the plan to produce Antichrist is also the reason President George Bush [Senior] pulled American forces off the attack on Baghdad, just when they were within 72 hours of overthrowing his regime. Now, you can see the full picture emerging, can you not?

As this story unfolds, we learn that Hussein likely has three warheads of three different technologies, each one more advanced than the previous one. This would give him a total of nine (9) nuclear warheads. "He [Iraqi scientist] said it worked on the principle of the Hiroshima gun-type bomb, in which high explosives drive pieces of highly enriched uranium together at high velocity. This triggers a nuclear explosion. Leone's design was unusual. The uranium was contained in a series of finely engineered tubes, like the control rods of a nuclear reactor. It was not the type of design one might find from a search of textbooks or the internet." Hussein has three of these Hiroshima gun-type atomic bombs.

Later in this interview, the Iraqi scientist claimed that Hussein now had three implosion nuclear warheads and three thermonuclear weapons. As I read the article, I attempted to keep a skeptical mindset, but was eventually won over by the journalist's interviews with Western experts on the many different technical aspects of the scientist's story. These Western experts examined the Iraqi diagrams and found them credible, other experts examined the claims that the material was bought on the Black Market, and found them credible, and American experts in satellite capabilities were able to confirm this scientist's claim that the Iraqi's had carried out a test explosion before the Gulf War. Finally, this journalist interviewed other Iraqi scientists who had defected, and was able to verify that this scientist was who he said he was, and that he was in the position of scientific leadership on the project to be able to know what he claimed to know.

Thus, this story claiming that Iraq now has nine nuclear warheads seemed exceedingly credible to me. But, American, British, and Israeli intelligences have been telling the world for a very long time that Iraq does not have nuclear capability now, and is probably two to three years away from developing such capability. Now that we know they have been publicly lying to us all this time, the question is whether they were also lying to key leaders within their respective governments.

However, the ultimate verification of the truthfulness of this story seems to lie in the reaction of Prime Minister Elect Ariel Sharon. This recent short story seems to indicate the truthfulness of the claims of this Iraqi scientist.

NEWS BRIEF: "Sharon: A Plan To Strike Iraq", British Sunday Times, February 26, 2001.

"The British 'Sunday Times' daily reported in its Sunday's issue, reporting Israeli military sources that the Israeli prime minister elect Ariel Sharon gave his instructions to the Israeli army chief of staff Shaoul Mofaz to prepare for directing an early strike to the missile- launching area in the west of Iraq.The Israeli radio quoted these sources as saying to the British paper that Sharon is planning to deploy neutron ( tactical) bombs to target this Iraqi area and destroy it, as intelligence information reported that Iraq is about to attack Israel by mass-annihilation weapons."

I find it hard to believe that Israeli Intelligence did not know that Hussein already has nuclear weapons, or that they did not share this information with Israel's highest leaders. However, Prime Minister Elect Sharon might have been attempting to assure his Jewish citizens that he was on top of the situation, and would act to preemptively take the nuclear warheads out. The one key piece of information this news story does give us is confirmation that these nuclear weapons are placed on top of the theater missiles Hussein has placed at the Syrian border, well within range of Israeli targets.

This story also confirms that Israel does possess the Neutron Bomb, and fully intends to use it during this upcoming war. We can also see the importance of Hussein testing the Israeli intelligence capability, the reaction time of the Israeli military, and the way in which American and Israeli bombers will attack his missiles. Hussein has spent over $10 billion and 20 years of work in developing these nuclear warheads. Hussein now does not want Israel to destroy the missiles on which these warheads will be launched before he can fire them. He fully intends to fire these missiles before Israel or America can destroy them.

THIS WOULD BE THE CATALYST TO END THE CURRENT FINANCIAL STRUCTURE. WHAT ABOUT THE IMPLICATIONS FOR GOLD, SILVER, OIL,.....


Mr Gresham (03/06/01; 15:46:42MT - usagold.com msg#: 49491)
Addendum
So much, so much here today. You outdo yourselves once more.

The inflation/deflation question from below moves forward in my mind to a question of a great wealth transfer (as these things always are). Think of the U.S corporate jungle, with its prey and predators awaiting a time of famine.

"Moral hazard" turns into market opportunity for these players. Some organizations will maintain enough of a balance sheet and cash flow to be chosen for survival and growth by swallowing the market share of the losers.

When AG inflates money supply, buys commercial paper of certain corporations, bails out certain mutual funds, he will be writing the structural framework of the recovery years. Those will be the equities to buy with conserved capital at turnaround time. The rest will sell for scrap value.

(How best to conserve capital to the other side of stagflationary debt default scenario is our topic here.)

So, the big banks, big PC box- and chip-makers, big retailers, don't need to have pristine 1955-style balance sheets. They've already leveraged "moral hazard" into their financial tightrope-walking. Somewhat like the S&L workout, they just need to be TBTBATF (that's "be allowed to fail").

(If they misjudge the OVERALL level of default, beyond what Fed & FDIC & GSE's etc. can handle, well that's another "brave new world" for them to operate in, kind of like Russia in the '90s with industry at least in possession of its productive capacity, if not the traditional means of financing. Right now, they would probably only be strategizing vs their immediate competitors in same or similar industries.)

They would see it as just needing to outrun the others in their industry, rather than outrun the bear.

slingshot (03/06/01; 15:20:00MT - usagold.com msg#: 49490)
Journeyman Msg.49485
Visited the webleyweb site to read article. Then scrolled down to Holtzman Msg. 49474. Everything from human nature, fiat money and the history of Rome. Very informative, but very dispersed. May I add some JUNGLE RULES and try to bring it all together. They do apply to Gold if you think about it.
The bad guy wants what you have.
You will always be attacked when conditions are least advantages to you and most advantages to your attacker.
If it can go wrong, it will.
Proper preparation prevents poor performance.
GO LIGHTLY.
Your most powerful weapon sits on your shoulders.
You reap what you sow.
Look for trouble and you'll always find more than you can handle.
There is always someone sharper, tougher, meaner, nastier, Hungrier, and more prepared than you.

To Note; On human nature. If you ever been confronted by a street gang. It can get very violent in a heartbeat.

Slingshot


Mr Gresham (03/06/01; 15:00:27MT - usagold.com msg#: 49489)
I/D: Effects of debt on
http://www.bearforum.com/cgi-bin/bbs.pl?read=119257
Here is a good discussion among Da Bears, which I hope you will not find excessively long, if I post the best parts from each contributor:

M. Uncle Walter
"Which of these is wrong?
"Am considering renaming meself Pooh, Bear of Little Brain. The following pair of statements have been bothering me for at least two years now.

1. The debt level in dollars is awesome. Therefore people will become wary of the dollar, leading to devaluation, hence inflation in the U.S.

2. The debt level in dollars is awesome. Therefore we'll see a huge default rate, wherein "dollars" (whatever they are) will vanish into thin air, increasing the value of remaining dollars, hence deflation in the U.S.

Perceptive bears please explain which of the above statements is WRONG! (You may prefer to explain that both are wrong. I hope that few bears claim that neither is wrong. )


Ripley
"Does inflation preclude default?
I don't think that it does, despite the expectation that one will pay off their debts in depreciated dollars in an inflationary period. If a debtor is unable to pay off their debts, or at least pay them off at a rapid enough rate to satisfy their creditors, the inflation or deflation rate is irrelevant. The debtor will default and/or file bankruptcy.

A related question concerns the macroeconomic effects of such defaults on a large scale. I would argue that as individual debtors default, the quality of securitized debt will decline, and so the purchasers of such debt will demand a risk premium. I'm trying to consider the effect of exchange rates here. Suppose that US debt is lower quality than European debt. Would the risk premium lead to a weakening of the dollar against the Euro? I am inclined to think so, though I may be wrong. There has to be a purchasing power parity argument that I can use to compare these "baskets of debt", but I haven't thought it through.

It comes down to the scale of defaults and the type of debts defaulted upon, and we won't know that until it happens. Consider Xerox's problems as a sort of "canary in the coal mine" on the corporate level and 125% mortgages to be the same sort of "early warning" for individuals.

I'm sorry that I haven't been more helpful.


J.Buck
"1. The debt level in dollars is awesome. Therefore people will become wary of the dollar, leading to devaluation, hence inflation in the U.S.

2. The debt level in dollars is awesome. Therefore we'll see a huge default rate, wherein "dollars" (whatever they are) will vanish into thin air, increasing the value of remaining dollars, hence deflation in the U.S.

Which one is "wrong"?
Eventually both could come to pass -- even one leading to the other.

However:
Right now I see #1 being the outcome we are looking at, with "things" the way they are.

Doug Noland (prudent bear), for example, leads the crowd looking for deflation. It seems to be the view most hold.

However, we cannot ignore key "elements of control" in place...like the Fed (Greenspan in particular).

The debt issue is just too horrendous for Greenspan to let market forces "take care of it". He has, and will continue to, look to inflate his way out of trouble by providing liquidity at any and all cost in order to short cut a debt crisis coming to a head.

All one needs to do is look at one example....LTCM and see which way his instincts go. Market forces are not what he sides with when the chips are really down...his rhetoric, notwithstanding.

Debt, if it can be "refinanced", can be rolled over (in the broadest sense of the word) repeatedly (and indefinitely) as long as the world economies remain -- relative to each other -- basically the same as we have now.

If Europe (for example) were to take over as the world economic leader, then deflation would be the likely outcome, here.

I sincerely believe that the Fed sees NO choice but to prop up the banking system -- and credit market in general...period. While AG is at the helm, I have NO doubt he will/would risk a revisit to the stagflation of the 70s in order to (hopefuly) avoid repeating the 30s (or Japan). If Volcker was at the helm, I think it might be different...though I cannot feel sure.

With AG, I am pretty positive. If you look at his 14 years as the Fed Chairman, his "successes" (and kudos) have come when he cut...and his "failures" when he raised.

His fed funds "ammo" can only run to zero -- but -- he can run the presses forever, like he did leading up to Y2K.

Faced with a disaster, he will inflate before he would take the pain to set the system right.

Someday, the pain will be unavoidable. But as long as the US is -- relative to the rest of the world -- the engine for the world economy, he (or a successor of a similar mind) can probably keep the balls in the air.

Anyway, that's my 2 cents worth (in 1970 dollars <>)

JB

nemax-90 {from Germany}
"Wouldn't it be reasonable to assume, that defaulting debtors lead to a significant decrease of "negative dollars" which will lead to a tremendous devaluation of equity and real estate assets (their natural counterparts) to keep the balance on the ledger?. I think, a deflation of the bubble, leading to more purchasing power with respect to stocks and real estate must not be mixed with an appreciation vs. foreign currencies i.e a rising dollar.

Will the foreigners, that so far delivered goods in exchange for paper ("investment opportunities"), demand more dollars for their merchandise in the future? I don't think so! What should they do with all those dollars? Naturally, if the US goes into R-mode, the demand for foreign goods will decline (which will have serious ramifications in those countries heavily depending on the US as a buyer). I'm afraid, that the dollar could - theoretically - lose its value altogether outside America. Of course this development will come to a halt as soon as the trade imbalances are corrected. In a slowing economy this may be achieved relatively soon, after all, the imbalance, however huge it may appear right now, represents only a small fraction of the overall GDP.

My prognosis:

There will be serious deflation in the USA, particularly in real estate and in stock prices.
There will be inflation in the price of imported goods
The dollar will drop vs. foreign currencies UNTIL a new equlibrium is found. I believe, it will lose to the tune of 25% to 40% vs major foreign currencies before it bottoms.
Once the demand has fallen because of the economic slowdown, the exporters (oil?) will be forced to lower prices which in turn will have consequences on their home turf.

regards, nemax-90

PS: Of cause, I'm not an economist - so consider the above just my personal, subjective musings about this issue.

Vilnis {in Latvia}
"Both statements are in part correct.

I forget who said this but: It is the hallmark of true genius to be able to consider two apparently inconsistent ideas and use them both to advantage.

The two ideas:

1. The debt level in dollars is awesome. Therefore people will become wary of the dollar, leading to devaluation, hence inflation in the U.S.

2. The debt level in dollars is awesome. Therefore we'll see a huge default rate, wherein "dollars" (whatever they are) will vanish into thin air, increasing the value of remaining dollars, hence deflation in the U.S.

The view from Riga:

The confusion, IMHO, comes from the fact that we still tend to think that the dollar is real, as in gold backed or restricted in some other way as to supply: i.e., restricted by the free market as for instance by the bond vigilantes or restricted by the moral character and good sense of America's political leaders. In such circumstances there would be lower prices in certain sectors as for instance in shares and real estate most prominently.

If, on the other hand, there is no restriction on the creation of dollars then the dollar would, as all paper currencies historically have, revert to its intrinsic value: the value of paper. There are many historic examples of this, most recently the USSR/Russia. In every case, it has been a political decision.

So, IMHO, it comes down to predicting what the political leaders of the USA will chose. This is not to say that they will chose one or the other. They can choose a combination or some middle ground. I do not, however, believe it is an economic issue. I think it is purely a political issue and one that will be based on the good sense and moral character of the American people. AG and Slick Willy reflect a significant part of the society that produced them. Every society has the leadership it has earned.

The answer is to be found by looking in the mirror.

My opinion? I am short the USA$, long the precious metals and short companies I expect to go out of business. I do not claim any special merit for my position and I am not the first person who has followed this plan. It appears to me that shorting companies that are merely overpriced could, if the USA$ really falls out of bed, be a financial disaster. If you are short USA shares, you are long the USA$. That may be part of the reason that the Prudent Bear Fund has done so poorly relative to the drop in NASDAQ or the Internet shares or________. To answer your question again: I think there is merit to both positions and investment decisions need to take that into consideration.

Short/m/2/0 (but hold real money)
Vilnis




ORO (03/06/01; 14:28:50MT - usagold.com msg#: 49488)
Journeyman - Japanese deflation vs. the US condition
Thanks for your latest 'flation post. A joy to read, as usual.

I want to add that Japan could suffer deflation (however mild) because it is a creditor nation, and has assets abroad to lose. It is only at last year's end that Japan's trade balance moved into negative territory (it still has a strong trade surplus with the US). It should be obvious that the enormous historical excess production not going abroad any longer, the local supply is being consumed locally. Thus Japanese yen expansion (see their huge growth in M1 as a result of monetization by BOJ), grew to match the existing production levels, to the point of eliminating net exports. Thus prices did not have to move up. The export driven economic policy of Japan that created (among other things) the enormous productive capacity there and denied Japanese the ability to buy their own product, was reversed some time ago, and Japanese are now consuming the whole of their production.

The second item of note, is that internal Japanese financial assets and some real estate kept for financial purposes (i.e. for resale or collateral for loans) had deflated substantially, thus eliminating some $5 trillion of purchasing power from Japanese hands (mostly in money substitutes in stocks and bonds) - only partially replaced with foreign assets, a sea of liquidity eliminating most of the default premium on bonds, and an expanded monetary base. As a result, one can only imagine a deflationary scenario in Japan. They still have many foreign assets to liquidate before they turn to a negative cash flow. Thus they may purchase imports to continue supplying local imports without exporting any Yen, but instead exporting some of their dollar income and assets.

In the US, a debtor nation, there is a different situation, most debt is of the household sector, and a minor portion is owned abroad. Commercial and government debt are 20% and 44% owned by foreigners, and some 20% of equity. Americans have seen purchasing power - in the form of money substitutes of bonds and stocks - grow mightily, and have seen a growth in home values in proportion to their debt, but much slower than their accessible financial assets (held mostly in inaccessible pension funds). Thus a Japanese price deflation is not as likely, with fewer net assets to lose than Japanese had, and with a substantial net trade deficit (5% of nominal GDP, 20% of volume GDP by my estimate). Thus a local loss of purchasing power through asset value loss would be gained back in income as prices rise in response to the closure of the trade deficit (commensurate with the loss of investment flows from abroad which must coincide with a fall in asset values, since someone must sell them in order for their values to fall, and so many of them are held by foreign creditors). The replacement of imports with local production would raise local prices and incomes relative to assets and debts outstanding, thus no price drag would be generally available as a result of Japanese style export trimming, but a price push would result instead. Not a price push according to the 5% nominal net trade deficit, but according to the volume net trade deficit of something like 20%.

Exporting nation dollar debts are shrinking (down 7%) relative to nominal dollar trade (up 25%) by a third. They are becoming far easier to pay off and thus the inducement to sell product for dollars rather than consume it locally is falling. As these dollar debt payments are made, the creditors in Europe and Japan (Korea, Malaysia, and China too) are going to have less dollars to use for purchasing dollar assets, but they will have more dollar income from the growth of their portfolios from prior trade deficits.

Thus while Japan has purchasing power abroad, the US faces purchasing power from abroad buying in the US at the same time Americans are also competing for the same production as import supplies dwindle and must be replaced with local manufacture. Thus prices are destined to rise both from lack of import supply and an increase in export demand. Where deflation would continue further is in the creditor nations where asset values will fall while the import flow into the US is diverted in part towards them.

The US is in a negative investment position, income flow negative, and trade flow negative.

Japan was strongly positive in investment position, income flow positive, and trade flow positive.

Should anyone consider for a second that out price patterns should follow Japan's?



Pandagold (03/06/01; 14:18:34MT - usagold.com msg#: 49487)
(No Subject)
For those who still doubt what this is all about

From an article in the' London Times' December 1997 by Janet Bush (no relation) headed "How the West cages Asian Tigers in IMF trap".

She quotes Mickey, Cantor former US Commerce Secretary, made to the Confederation of British Industry, that month:-

" He told his audience: "....the troubles of the tiger economies should be seized as a golden opportunity for the West to reasert its commercial interests. When countries seek help from the IMF", he said, ". America and Europe should use the IMF as a battering ram to gain advantage" ( economic gunboats up the river)

A battering ram? These are the words of a man who held a senior position of government. Many of these people were just moving up from one bowl of rice to two bowls of rice per day.

And you think this mentality would stop at manipulating gold to gain advantage?


Belgian (03/06/01; 14:16:19MT - usagold.com msg#: 49486)
ORO
Allow me to answer first the easy bits of your reply. Wich is, by the way, exactly, what I wanted to hear !

Media : no need to spend much effort on manipulating them. They just follow, events, the "lemming" way. With POG in a declining mode for 21 years...no probs.

WGC : cumulative demand/production deficit of 17.000 tons for the last 10 years : it is per definition totally impossible to gather a global correctly matching gold account! Russia, China etc...
I even don't consider their or anyone else's figures as to make any conclusions out of it.

Now the most interesting part : Screeming Sellers and Silent Buyers ! A /SHARING THE SAME MUTUAL INTEREST !
B / HIDING INFORMATION FROM THE PUBLIC !
Here we have to come up with plausable scenarios and actors. That's exactly the part where a lot of VERY DISTURBING "confusion" is installed. Not the least by ourselves. A collorfull series of bits and pieces from possible scenarios have incompleteness as main characteristic. The stories have no beginning or end.
We are collecting remains of a sunken ship, dispersed along the coastal line.

Actors with mutual interest : I only see two of them and all the others must be "intermediares" (go-between)(profit-pirates) :
1/ Goldproducers + 2/ goldholders . Not all producers and not all holders can be involved in the same mutual interest play. Before searching for the actors idendities, we must come up with the "motive" for the natural confluence of that mutual interest. Again a new series of possible motives has already been produced.

I humbly admit, not being capable of producing a complete story with high probability. As long as POG doesn't fly to the moon, it will remain an intellectual challenge.

Getting late and after zzzzzzzzmmm, hope we can come one step further into this gold-thriller. Thanks ORO...very stimulating. Feels good.


Journeyman (03/06/01; 13:38:23MT - usagold.com msg#: 49485)
How I learned to hate people and love government @Holtzman
http://www.webleyweb.com/tle/libe53-19990815-04.html

Sir Holtzman,

Excuse me for butting in and shooting from the hip; I guess I'm
on a hair trigger today for some reason.

Your paragraph - - -

"Peter, the upstanding but unobservant middle class citizen,
carries on working for two whilst the fiat currency in his
retirement accounts is steadily diluted by inflation. Fiat
provides government with the ability to 'sneak' taxes past Peter
in order to keep Paul well fed and less motivated to run amok in
the streets. In a gold standard system, the government would have
to overtly tax Peter in order to pay Paul... it's always easier
to be a pickpocket than a highwayman."

- - - ASS-u-MEs that government is somehow the "best" way, if not
perhaps the only way, we humans handle problems. This assumption
is not only patently incorrect (which I can document more than
abundantly) but the truth is just the opposite. The fact that
grown and otherwise intelligent adults believe the fairytale that
governments help the poor more than they hurt them is a monument
to disinformation, the power of brainwashing, and the modern
press.

Further more, humans, at least the ones I know, don't "run amok
in the streets" in times of disaster, we help each other. It's in
our genes, and any notion to the contrary is slander. Hobbes'
"war of all against all" is complete and utter malarky. Period.
Before government butted itself in, families took care of their
own and private charities took care of the rest just fine.

A quote from one of Pandagold's recent posts is apropos:

"The Christmas Truce was the last twitch of the 19th Century. By
that, I mean it was the last public moment in which it was
assumed that people were nice. It's the last gesture that human
beings are getting better the longer the human race goes on." -
Paul Fussell, University of Pennsylvania

Our model of human nature has been skewed beyond recognition by
government, pro-government propaganda and media's "dramatic
imperative." (See link for a passable presentation of this.)

In fact, governments create poverty. What's more, the more
govenments try to "redistribute wealth," supposedly to "the
poor," the more disparity of wealth they create. (If you don't
believe this, ask me.)

I can safely say that ALL of the excuses presented by the "macro-
econ" manipulation apologists, especially when put into practice
in the real world, not only fail to accomplish their PR-hyped
goals, they often accomplish just the opposite. There are very
good, logical, economic reasons this is so. Ask me.

Thus there's a high probability that, to the extent some Pauls
are ticked off and in danger of running amok, this is closely
related to some government machination, boondoggle or sell-out.
A great example (though by no means the only one): The "Great
Depression" --resulting in a lot of ticked-off Pauls-- was caused
by the illegal activities of the Federal Reserve (illegally
issuing unbacked paper promises to deliver gold it didn't have,)
itself the result of illegal laws passed by the U.S. government
in chartering it. Thus in actual operation, governments are
often a great source of disorder and chaos rather than the "font
of order" they claim and we assume.

Therefore, for order, morality, and the good of mankind
(including the "poor",) down with all government fiat currencies.
Period.

Regards,
Journeyman

P.S. Someone could of course argue that, because the dollar finds
itself as the "reserve currency of the world," dollar users have
benefited at the expense of the people in the rest of the world.
So-far. Anyone care to have that discussion?

P.P.S. I agree with your characterization of government as either
a pickpocket or a highwayman. Both actually.



Randy (@ The Tower) (03/06/01; 13:19:59MT - usagold.com msg#: 49484)
The Other Bubble
http://www.usagold.com/gildedopinion/CorriganBubble.html
Clearly, this link will serve you better!


Randy (@ The Tower) (03/06/01; 13:18:49MT - usagold.com msg#: 49483)
Thanks to Sean Corrigan for sharing this with us...
http://biz.yahoo.com/rf/010306/nat017642.html
For those who have not yet seen his commentary, "The Other Bubble", it is now available for viewing at The Guilded Opinion.

Personally, I am most delighted with it for recalling the 1997 June warnings offered by Japan's PM Hashimoto to this effect:
-----
'Our American friends were paying little attention to maintaining the value of the U.S. dollar as an international key currency, and we were tempted to sell off (bond holdings). In terms of funds, it is true that we have not really made the right choice, shall I say, or advantageous choice. By selling Treasury bonds, we might increase our gold holdings. That is an option we had. Among countries around the world, there are many who hold their foreign currency reserves in the form of U.S. Treasury bonds. As long as they continue to maintain the U.S. government bonds -- even when the U.S. dollar is weakening relatively -- it is because these countries are holding onto these government bonds that the U.S. economy is being maintained. Many people, in fact, don't realize this.'
+
`I hope the U.S. will engage in efforts and cooperation to maintain exchange stability so that we will not succumb to this temptation to sell off government bonds and switch our foreign reserves to gold.'
-----
If you can grasp the wider implications in this, then you are light-years ahead of the game.

Click the link to see the context in which Mr. Corrigan chooses to bring forth this quote.


ORO (03/06/01; 13:16:34MT - usagold.com msg#: 49482)
Holtzman - stressing a point
Holtzman,

The Roman Aristocracy lived in terror of their own Emperor and had themselves devoured by his need to increase the scope of bread and circuses endlessly. Emperors had to deal with the fact that they had created an increasing class of dependents close to home which must be fed and entertained lest they riot. Once far away lands were being abandoned, the provincial aristocracy was targeted. Progressively less of the aristocracy could survive, and practically the whole of them were killed and their property confiscated. Each generation of the aristocracy was smaller than the one preceding it. Even the Soviet elite, the "nomenclatura", could not take the terror against themselves that was necessary in order for them to retain their privilege. If you pay close attention to the names, you will see that the aristocracy of Rome had changed; that the 20 generations were not of the same families, and that fewer families belonged to it as generations progressed.

Your discussion of Paul, Peter, Mary, and Jackie ignores the fact that by taking from the one and giving to the other, the government is creating a negative sum game. As taxes and legislation/regulation driven income shifts grow, the marginal income from marginal effort is reduced, as is that from investment. The result is that in order to provide Paul with his food, grog, and clothes, the government not only eliminates those from the rest of the bunch, but also employs Elisabeth social worker to determine Paul's needs (Paul obviously needs Elisabeth to have an assistant so that she can get supervisor's pay), but also employs Nick to find out how much Peter, Mary, and Jackie earn, and how to take it. Most significant, however, it reduces the future gain from additional work and investment that Peter, Mary and Jackie will not do because they will see no gain from the marginal extra effort. The present value of that lost productivity, and that of Elisabeth and Nick who are doing unproductive work, is greater than all the benefits Paul, Elisabeth, and Nick and their successors will ever see. Thus the government's benefit to Paul of a square meal, a decent pair of shoes and a visit to the pub costs as much as a 15 course French dinner, Gucci shoes, and a bottle of Rothschild's best. Paul loses an opportunity for the job that Peter, Mary, and Jackie could have created had their income not been taxed or inflated away, and Paul loses the opportunity to buy the products of Elisabeth and Nick would have produced had they been working in the marketplace. The loss to the whole bunch over their lifetimes is equal to the portion of their life lost by dying an early death at age 32.
The ratio of lost productivity and direct benefit cost to benefit provided by government is at least 2, and most probably 4.


Randy (@ The Tower) (03/06/01; 13:04:16MT - usagold.com msg#: 49481)
Fed buys Treasuries outright for second straight day
http://biz.yahoo.com/rf/010306/nat017642.html
The Fed has once again injected permanent reserves to the banking system, this time with a purchase of $469 milliion in U.S. Treasury securites for the System Account in New York.

In earlier open market operations today, the System Account manager added $2.0 billion in temporary reserves via overnight repos....with the fed funds market trading over the FOMC target by 1/16th percent.

This activity has long since passed any point of parading as an exact science...a child could do it, adding billions in round round numbers with an eye toward saving the banking system from consequences of its past excesses. The value of the dollar shall suffer as a result. And given the quantities of overseas dollar-denominated holdings, in this action our monetary authorities are effectively saying, "We shall have the hyperinflation."

Old Yeller (03/06/01; 13:01:30MT - usagold.com msg#: 49480)
Whoops,I forgot the link.
http://www.geocities.com/goldtango/analysis1.htm

Just in case anybody out there is unfamiliar with Elwood's fantastic work.

Sierra Madre (03/06/01; 12:51:26MT - usagold.com msg#: 49479)
Thanks Holtzman for your interesting review of History

Just an aside on your commment on Egyptian emigration to Europe.

I have not heard of this emigration before, but it might well have happened.

Just by the way, Alexander Del Mar in one of his books, perhaps "History of the Precious Metals" (facinating!) says that the reason the Moslems were able to overrun North Africa so easily, is to be found in the fact that they promised liberation to all slaves held by the Christian masters. This because Islam forbids any Moslem to enslave any other Moslem - but enslaving Christians was acceptable.
This of course provided a great incentive to turn Moslem, for the large number of slaves in North Africa.

Perhaps a large number of Egyptians did emigrate North into Europe. But...they weren't the people known to us as "Gypsies".

The Gypsies themselves believe their origin was Egypt, and their songs mention Egypt frequently.

The fact is, they are mistaken about their origin. They are actually the descendants of a low-caste tribe that left India centuries ago. Their language has been examined and proved to be evolved from Sanskrit roots, with accretions of words, from places through which they moved over the course of centuries.

Gypsies are a most interesting subject of study. There are the colorful works of George Borrow, "The Romany Rye", "Lavengro", and "With the Bible in Spain" - which describes in hilarious terms, Borrow's fruitless efforts to Christianize the Gypsies of Spain, early 1800's.

This group has managed to avoid integration; they do not marry outside of the Gypsy tribe, and their notorious customs are indeed a refreshing contrast to today's ever more dull Disneyfied world. They do not have a written literature.

By the way, they love gold, today, as they did five hundred years ago. They keep it in their possession, and will splurge all their stash on a single grand celebration of some family event such as a marriage.

They call themselves the "Rom", or "the Men", and regard all wealth of those who are not Gypsies, as for the taking.

Sierra

Old Yeller (03/06/01; 12:45:33MT - usagold.com msg#: 49478)
Hey,gold shorts,is the handyman going to fix your problem again?

Watching the current backroom gyrations makes me think of a paragraph in Elwood's Gold Export Analysis;

"My grandfather once told me"Use the right tool for the job"Applying that here,we'd expect them to use physical flows only when nothing else will do.In'96 and '97 it took physical delivery of hundreds of tonsto get the price down from $400 to $300.Of course,we can assume the heavy hitters,to a man,know the difference between the paper and the physical so there's no way to "fill the gap"with them using paper.See the article on Golden Sextant by Reg Howe for a world class analysis of the derivatives"

Reminds one of the frequent question Butch and Sundance kept asking each other through the movie."Who are these guys?"

Galearis (03/06/01; 12:42:47MT - usagold.com msg#: 49477)
@ Mr Gresham (your 49470)
Displaced prose and praise (smile)
I thank you kind sir for your praise. But I am also mystified that I could inspire such a poem from so little incentive.

Perhaps it is a variation of the 1000 monkeys bringing forth a play worthy of Shakespear, but try as I may, I cannot see the poetry of mine words as compared to yours. (smile)(hence my monkeylike allusion)(big smile)

I just slapped this lease rate message on this morning on my way to my word processor. I have an orchid article to complete - but my post was definitely not a warming up exercise.

Notwithstanding, the lease rate plays do forcast some wild and toothy creatures coming out of the cages. Methinks (that Shakespear theme again) we should post some look-outs to watch for casualties. Most of us would know this as a default watch.

We are getting closer, faster

Now.

(J.P. Donleavy) (smile)

Best...

G.

Journeyman (03/06/01; 12:29:49MT - usagold.com msg#: 49476)
In search of "deflation" clarity -- and other topics @ALL

The following excerpts from tg msg: 49455 (notice the
capitalization emphasis which I added) - - -

tg's post: "But this time, there was LITTLE INFLATION. Why?
Because it is a "supply side" recession...more like the recession
in Japan of the last 11 years...or the one that followed the '29
crash in America. It is marked by too much capacity, which HELPS
KEEP PRICES DOWN. . . . For the first time in more than 50
years," says the FT, "the U.S. is experiencing a downturn against
a background of SUPPRESSED INFLATION. [Caps emphasis added -j.]

- - - illustrate a common confusion in discussions about
"deflation." Notice neither of the included statements claim
"MONETARY deflation," that is, a decrease in money supply. Quite
the contrary - - - they say LITTLE INFLATION and SUPPRESSED
INFLATION, which is not even "no inflation," let alone "monetary
deflation."

Thus it's clear that people using the word "deflation" in this
way have (understandably I guess) confused economic contraction
with monetary deflation. This is understandable because while the
U.S. was supposedly on the gold standard at the beginning of the
"Great Depression," the situation was indeed blamed on the
concurrent contraction in the money supply caused by the
discovery (in the form of bank-runs) that the Federal Reserve had
fraudulently issued "Redeemable In Gold On Demand" certificates
well in excess of the gold they had available to redeem them.

Especially for those individuals and businesses which had been
conned into borrowing this easy money, the literal monetary
deflation that resulted (because enough gold couldn't be
"printed" to cover, even with the government-FED heist of the
peoples' gold), this created an impossible situation - - -
including a huge number of bankruptcies.

We here at USAGOLD don't need to continue this confusion between
monetary deflation and economic recession in our posts. Do we?
There is no longer any constraint what-so-ever on money creation.
Or perhaps I should say that while as ORO so eloquently pointed
out recently, the only path to money creation that matters today
is the leverage from fractional reserve banking, the FED's
ability to monetize existing debt (convert it to credit ("money")
book entries) is limited only by the FED's "conscience."

Regards,
Journeyman

P.S. And another chronic and related bugaboo of mine: I just
can't resist reminding you that "dis-inflation" is still
inflation.

P.P.S. We may not have hyper-inflation (I suspect we will
though), but we definitely WON'T have MONETARY deflation, that
is, general prices won't fall, at least not for long!

What inflation does is to coax resources people and societies
would normally have stored-up for emergencies and retirement into
speculative ventures on new things. It encourages to some
degree, in other words, eating your seed corn.


Topaz (03/06/01; 11:59:03MT - usagold.com msg#: 49475)
Belgian
Good point on the War repairations Sir, though the cause/effect of that little skirmish are as deeply hidden as our (presumed) gold scam.
On the UK/Suisse "sales" it's comforting to note both Countries have recently been found "fit" to now join EMU and we wait with bated breath to see whether UK will suspend the Auctions. (Swiss have deferred via ballot... for the moment!)
Does it not strike you as odd that 125T per Month are being "re-allocated" through BIS without market movement (swiss) but whenever the UK auctions happen, the POG goes bananas?
Sir, if a pragmatic approach alone was all that was required to unscramble the gold egg, it would have been done years ago - alas, the bulk of research into this "most opaque" of markets, must remain conjecture.

Holtzman (03/06/01; 11:49:22MT - usagold.com msg#: 49474)
Sic Biscuitatus Disintegrat
Holtzman here,

--------------
Where have all the fiats gone?
--------------

Excellent critique, ORO. Your impressions of EU intent are very similar to mine.

Your vision of a 'reserve auri' is, as I see it, a third alternative distinct from the real euro and from my physical-gold-in-hand fiction. All I was attempting with my quickly invented mythical auri was a demonstration that a government which adopted such a thing would simply be surrendering one of its most potent weapons. As a result, of course, it could be relied upon never even to contemplate such a move. But I am intrigued by your 'reserve auri' as a third alternative that might have been yet wasn't.

There is one place I would beg to differ, however. You state that 'The mere existence of the fiat currency takes substantial portions of Joe's dinner, and takes away his best clothes.' Perhaps it depends upon which Joe we're speaking of. For clarity's sake, let's use names other than Joe.

Paul, the man with his hand out towards the government, receives crisp new fiat currency and immediately spends it to purchase Paul's dinner, Paul's cat's dinner, Paul's pint of the best, and Paul's new wardrobe, all before prices have a chance to rise.

Peter, the upstanding but unobservant middle class citizen, carries on working for two whilst the fiat currency in his retirement accounts is steadily diluted by inflation. Fiat provides government with the ability to 'sneak' taxes past Peter in order to keep Paul well fed and less motivated to run amok in the streets. In a gold standard system, the government would have to overtly tax Peter in order to pay Paul... it's always easier to be a pickpocket than a highwayman.

Mary, the observant me-first-society-second middle class citizen, realised some time ago that inflation causes to-day's debts to be paid off with tomorrow's cheaper currency, so she lives in a negative net-worth world until her personal debt spiral implodes into bankruptcy.

Jackie, the observant and savvy investor, never goes into debt for things which have no resale value, and he allocates his wealth across many classes of asset: some in his own domestic fiat currency in term accounts, some in domestic stocks, some in foreign stocks, some in gold, some in good furniture (Jackie will never waste money on particleboard), some in real estate, perhaps some in artworks, etc.

The point is that whilst Peter, Paul & Mary puff with indignation yet drag on through life under the pirate ship of their own government, Jackie's broadly allocated wealth continues to grow in the despite of any one government.

--------------
Bread and Circuses
--------------

I agree with the majority of your historical points, although of course I would read the tea leaves a tad differently. For example, you stated that 'Bread and circuses did little for their supposed beneficiaries in Rome, and ultimately destroyed the whole of the Empire.' In contrast, I would say that 'Bread and circuses kept Rome's huddled masses just content enough that nearly twenty generations of aristocrats could maintain a quality of life almost the equal of to-day's technological elite.'

You are correct in characterising my last post as 'All that is wrong' with the world as it is. However, it IS the world as it is, and it is the world as it almost certainly shall continue to be. Of all the different visionary groups to attempt building a different world, the most successful were the Bolsheviks, but even their utopia eventually caved in on itself. One cannot bottle up human nature indefinitely. It will, sooner or later, burst through any restraint devised.

The only thing which works is what has been proven time and again to work: keep the masses just sufficiently content and just sufficiently afraid of the ruling class. As Machiavelli pointed out, given a choice between being loved or being feared, it is more effective to be feared. Though he did allow that being both was best, if possible.

To-day, contentment is managed in the EU and NAFTA with a combination of government handouts, a sense of participation by way of voting for representatives, and the opportunity (for those with the will to pursue it) of raising oneself out of the masses and into the aristocracy. Contrast Nelson Mandela with Colin Powell. Both self-made men arrived in positions of power in nations where that was phenomenally unlikely, yet the U.S. system allowed it (indeed encouraged it) and so did not invite revolution as did South Africa.

However, fear is managed in the EU and NAFTA by the threat that special police units will come knocking if you break laws. And be assured they'll see you if you break the law, what with all the surveillance equipment around nowadays.

The details vary from era to era, but the pattern remains the same. A little over half a century ago, fear was focused around the threat that Stalin would get you (both within the USSR and in the West). For many centuries before that, it was the threat that god's representative the Pope would get you. In Rome, it was the threat that the Emperor would get you. In Egypt, it was the threat that the living god Pharaoh would get you.

Interesting thought: Egypt's Queen Cleopatra is nearer in time to us than she is to her predecessors who built the pyramids. One of the rare occasions when Julius Caesar felt humble was during his first visit to the Giza plateau. Those manmade mountains, already four times older than Rome, silently assured him that nothing he would ever accomplish would be as long-lasting. Eighteen hundred years later, they gave the same assurance to Napoleon.

For over twenty five centuries, Egypt had gone through dozens of dynasties punctuated by numerous chaotic periods wherein there was no Pharaoh. But time and again, the same form of government rose from its predecessor's ashes... until increasingly strong outside forces found Egypt. The ancient Hittites were barely superior to the Egyptians upon first contact, and were soon enough evicted. The Alexandrian Greeks supplanted the old ruling class but quickly went native and became Pharaohs themselves. But then came Rome.

After Rome got hold of her, Egypt became ruled from a distance. By the time the Eastern Empire abandoned Egypt, she didn't remember how to restore her own Empire and so fell victim to the Arabs who've had her ever since. Many of the non-Arab Egyptians were driven out of their homeland and migrated north through Constantinople into Eastern Europe... hence the word Gypsy.

In contrast, Rome as an Empire lasted only about four centuries and, thanks mainly to bread and circuses, it was not torn down by a revolt of its own native population. It was, however, weakened by bread and circuses, and both its popular resolve and its military readiness were eaten away. But even yet, had there simply been an ocean north of the Alps rather than the forests of Germania, we'd still be speaking Latin to-day. It was Rome's indefensible northern border which ultimately doomed it, not its style of government.

This ties in nicely with your points about landowners, ORO. A man should never place all of his wealth in his land (or in any other single asset class, for that matter). Americans have a stronger sense of land possession than do Britons or Europeans owing to their 'bang stop or I'll shoot' negotiating style. I expect there are still sections of the Pacific Northwest where it would be unwise for federal officials to barge in unarmed. Still, as demonstrated all too often, the government does have the resources necessary to come onto anyone's land and separate him from it no matter who he is.

Since few of us to-day are nomads, we need to acquire a place to sleep most nights, but we should also own enough portable wealth to allow us to run for our lives should such a dark day ever present itself. I recall reading somewhere years ago about an American who travelled across the U.S. wearing his wealth as gold coins sewn into his vest. As needed, he'd simply find a spot of privacy and cut out the required coin. Sadly, this wonderful lifestyle has since been made obsolete by metal detectors and strip searches.

As someone once said, the only certainties in life are death and taxes. However, as someone else later pointed out, the insertion of the Inland Revenue into one's business is made substantially more bearable by a generous application of emolument. Ahem.

Oh, and speaking of propaganda, ORO, it's quite illuminating to consider how symbols are employed and reemployed over the centuries...

--------------
Bundles of twigs
--------------

Americans are rightfully proud of their slogan, 'United we stand, divided we fall.' The phrase is often illustrated by first demonstrating how easily a single twig may be broken, then demonstrating how a tightly tied bundle of twigs is nearly impossible to break. This concept, of course, pre-dates the revolt of the Colonies by several millennia. The original American expressers of that phrase proudly adopted what they knew was a Roman symbol.

Repeated again and again in ancient Roman political and military art were images of pole-axes whose shafts were bound round with twigs. These objects were carried in processions and were either laid or mounted in places of honour in order to proclaim the power of SPQR (Senatus Populusque Romanum, Senate and People of Rome).

Those of you who collect U.S. silver coins should have a glance at the reverses of your Mercury dimes. You'll find the same symbol there, proudly declaring America's manifest destiny as the new Republic, the new SPQR.

Of course, Americans weren't the only ones who've ever thought of themselves as the natural heirs of Rome. To this day in the UK, royal maces are carried in procession and are laid in places of honour in Parliament in much the same manner as a twig-bound pole-axe was placed before the Roman Senate two thousand years ago.

But what of the Italians themselves since then? How in the world does the child live up to the reputation of a father such as ancient Rome? Not since the Renaissance have Italians been world leaders, and even at that pinnacle they were but a faint glimmer of Rome's original splendour. Time and again, Italian leaders have attempted to rekindle that ancient greatness, most recently Mussolini. As part of that attempt, he sought out every emotion-stirring image he could find from the glory that had once been Rome. Italy in his time was not so dissimilar to America of the 1770s: it was a patchwork quilt, most of whose inhabitants didn't think of their peninsula as a single nation. In the image of those weak twigs uniting into an unbreakable bundle, Mussolini found the rallying symbol he needed. He even adopted the original name for it.

North of the Alps, Mussolini's vision inspired another leader to unite the patchwork quilt of German-speaking peoples. Again, the bundle of twigs symbol was used, and its old name adopted, and both symbol and name were tarnished by the use. As, by the way, was the other Nazi-appropriated symbol, the swastika. Indians (of both sorts) and Chinese who visit Europe are invariably astonished to find that their millennia-old symbol for good luck has other meanings which may even attract violence. For precisely the same reason that swastikas are no longer tolerated in view, the bundles of twigs also fell from grace. Even America dropped them from her dimes. It did seem somehow inappropriate to put such a recently misused symbol behind the face of FDR. Still, it's often startling how truly close two things are which on face value seem so diametrically opposed.

So what's this name I keep talking about? Well you see, in America, those bundles of twigs are most often associated with the English phrase 'United we stand, divided we fall' and the Latin phrase 'E Pluribus Unum' (out of many, one).

But the Romans themselves used a single Latin word for those bundles of twigs: fasces (FASS-kes)... hence Mussolini's word fascist. As anyone who attended the movie Gladiator or saw the much earlier television programme I,Claudius can affirm, Rome was the original fascist state.

There truly is very little new under the sun, though the details do tend to get quite twisted from age to age, often entirely out of their original implications. For example, if one could run back in time, abduct a Roman-on-the-street from the time of Julius Caesar, bring him forward in time and show him around Westminster Abbey, the poor fellow would be absolutely mystified by the cross' place of honour in the building. What to many modern people is a symbol of supreme self-sacrifice on behalf of others was, to that 2000-year-old Roman, nothing more than a terrifying symbol of his nation's fascist iron will.

To put yourselves in that Roman's position, imagine jumping ahead to the year 4000 AD and being shown a vast room filled with headsman's axes and electric chairs, only to be told that this is a place of worship and that these tokens which seem nightmarish to you are in fact regarded by them as symbols of devotion. As Aldous Huxley put it, Ford's in his flivver, all's right with the world.


Yours,
I.V. Holtzman

Sierra Madre (03/06/01; 11:37:27MT - usagold.com msg#: 49473)
Old Yeller...thanks for the link to Salerno and his article on Mr. G

It is evident from the excellent article by Salerno on Mr. Greenspan, that Greenspan is suffering from what is truly a profound mental illness: Social Metaphysics.

Social Metaphysics is an illness or "disability" which was examined and defined by Ayn Rand. She coined the term herself. It is curious that Greenspan, who was a member of Ayn Ran's "Inner Circle", a very exclusive coterie, has succumbed to the mental illness defined by Ayn Rand herself.

Social Metaphysics is the mental stance or attitude of people who consider that what is prioritary in the world, in Existence, is not Reality, That Which Is, but the mental attitudes of significant people with regard to that Reality.

That is why Greenspan is so concerned with "perceptions".

For him, it is not the facts - the reckless increase in the Money Supply, for instance - that are important, but rather what people (of course, the important people, the movers and shakers) are thinking or imagining.

This disregard for reality and focus on perceptions of others as the ultimate and important reality, is actually a mental illness. So we can truly say that Mr. Greenspan is a madman. Notice how Greenspan, according to the article, has recourse not to reality dealt with through strict logic (e.g. Austrian theory) but rather through hunches, feelings which he cannot fully explain. A typical "witch doctor" as described in the Randian philosophy.

It is a sad comment on the state of the world's philosophy, or lack of philosophy, that Greenspan has mesmerized the whole world. The world has lost its way and is now run by a madman, a "witch doctor"; the fact that Greenspan is the most important financial man in the world, is terrifying.

All the more important, to accumulate gold. This episode in the history of the world is going forward into utter chaos.

Sierra


Henri (3/6/2001; 10:54:17MT - usagold.com msg#: 49472)
NPR spot
This morning NPR had a good spot on the Turkish currency exchange market and its gold exchange market around the corner. The broadcast proclaimed the Turkish hard currency market "the freeset market in the entire world"

Tree in the Forest (3/6/2001; 10:53:01MT - usagold.com msg#: 49471)
Encouragement to all goldbugs
To those who grow impatient or weary while waiting for gold to be released from its prison, a few words from one of our greatest presidents, dour Cal:

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

Calvin Coolidge

Mr Gresham (3/6/2001; 10:45:39MT - usagold.com msg#: 49470)
Galearis
http://www.kitco.com/market/LFrate.html
This is the best I could do in 10 minutes, under your continuing inspiration.

Lily leased a lotta gold
From sharks and alligators
But never saw their opening jaws
Because the Backward ate her.

Old Yeller (3/6/2001; 10:38:04MT - usagold.com msg#: 49469)
Never mind no clothes,the emperor appears unsure of his own existence
http://www.mises.org/fullstory.asp?control=620&titlenum=&FS=Greenspan

This is a rather revealing insight into the Maestro's thought processes.Rather long,probably somewhat off topic,but I'm sure this is going to be influential in our future trajectory.

Man,Mr.G is one unusual duck!

Journeyman (3/6/2001; 10:31:50MT - usagold.com msg#: 49468)
Arabian gold arbitrage @ORO, 714

If a 100% profit arbitrage was available in 40s Saudi, I can almost guarantee you SOMEBODY was playing it. One way new counters make money in the gambling business is called "smurfing." (The term has also been applied to some sort of drug-related thing.)

Typically what happens is that an American casino will offer a slightly better exchange rate than normal on, say, Canadian currency - - - if it's played at the table. The enterprising "smurf" finds a source of Canadian currency, and shuttles his funds through the Canadian-->American-->Canadian loop as often as possible.
The difference in rates can be quite low, in the range of even 1% and still yield enough to make quite a tidy profit.
These offers invariably attract enough smart players to cost the casinos money and cause them to end the offers.

So you can imagine what kind of attention a 100% profit would attract.

Incidentally, pro gamblers fan out across the world and no such opportunity goes unrecognized for long. A friend of mine discovered a similar opportunity in Latvia last year for example.

Is this relative to Saudi in the fortys? I think so. We humans are an opportunistic bunch, and professional gamblers that play casino games are only a sub-set of the gamblers that have been with us since our hunter-gatherer days. We have all those "carry trades" don't we?

SOMEONE knew about the opportunity - - - and he/she told friends. SOME took advantage, guaranteed. What volume? Don't ask me!

Regards,
Journeyman


ORO (3/6/2001; 10:21:39MT - usagold.com msg#: 49467)
Belgian - answers(?) - installment 1 - the sound of one hand clapping
Belgian,

In the interest of clarity I will touch on things you mentioned one by one.

First, you say
"… we still have not the slightest evidence of world-gold-buyers (accumulators)".
We do have the strongest piece of information on the presence of gold buyers, and that is the presence of gold sellers, advertised loudly in the media, and documented in the data collected by BIS and the OCC, as well as on the books of gold producers. Had there been no buyers there would have been no sellers. In order to have a clap one needs two hands. Someone bought the nearly 6000 tonnes of EMU member's leased gold, someone bought some 2/3 of Barrick's proven reserves while they were still in the ground, similarly for Anglogold's 1/2 of reserves. Years of production have been sold forward. Is that not evidence enough of buyers, and on a large scale? Also, there were people buying the 30,000 tonnes of net paper positions reported by BIS. The fact of people buying is obvious when you consider that there were people selling – not only what they have in inventory, but also what they expect to produce in the future, and what they hope to be able to supply later.

It is nonsensical to talk of selling without buying. It is proof positive of a propaganda effort that media focus is on the selling part, while buying is not mentioned. The buyers obviously prefer to have prices low because they can buy more gold that way. If many sellers have sold other people's gold, which is what gold leasing is all about, they share an interest with the buyers in seeing a low gold price for as long as further gold is made available at that price. The buyers would start their own propaganda effort for a high gold price only once no further substantial gold supply is expected to be forthcoming at these low gold prices, and there is no gain from the continued support of leveraged gold sellers (who borrowed gold in order to sell it).

Understanding this general principle of the relationship between interests is key.

We also have WGC data that is known to be an understatement of gold inflows through customs. When adjusted for measurement error due to poor sampling and due to the circumvention of customs by many of the gold buyers, the WGC data reveal a cumulative gold demand and production deficit that has accumulated to at least 17000 tonnes this decade alone. Due to the law of mass preservation, we know that the quantities supplied to answer this demand came from someone's inventory. We know 1/3 came from the CBs as leased gold. We know that there is a gold banking system containing allocated and unallocated accounts, of which no record is publicly available, and no reporting is required by any of the regulatory institutions. We can't know who exactly has done the selling, but we know that the gold must have come from some hoard (inventory), and that this is the only possible remaining source. The fact of a lack of publicly available documentation is not in any way opposing this notion. Perhaps the opposite; this fact of known existence and unknown scale and limited information on flows is enough for us to conclude that there is a community of interest within the gold markets (regulators, bankers, producers, buyers) to keep the statistics hidden, otherwise they would have published their full data on accounts outstanding (and reserves) rather than just net transactions on LBMA and outstanding derivatives. Market participants will prefer transparency because it is favorable to all parties, unless there is mutual interest in hiding this information from the public. Such mutual interest can only come from a condition in which bankers are overleveraged, having lent out too much of their client's gold, the major buyers still have outstanding delivery obligations owed by the bankers that can not be filled if gold depositors withdraw their gold, producers have oversold their future production and stand to become insolvent (see Ashanti and Cambior) if gold prices rise, and regulators have not filled their mission of regulating the industry and wish only that the system survive till they retire.


Old Yeller (3/6/2001; 10:05:13MT - usagold.com msg#: 49466)
C"mon everybody,let's challenge the limits

Has anybody else noticed the Wall St. shills have brought out the "wall of worry",again.

You know,maybe I'm unduly pessimistic,but it strikes me as more of a "wall of reality"and no safety ropes are being provided.Furthermore,there appears to be a lot of jagged rocks at the base.

VanRip (3/6/2001; 9:31:36MT - usagold.com msg#: 49465)
No 2 at Treasury
http://www2.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B71737A6C%2D02D1%2D4B95%2DBA46%2DE561A1EA9F0A%7D
http://www2.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B71737A6C%2D02D1%2D4B95%2DBA46%2DE561A1EA9F0A%7D

Sorry if this was posted earlier. Was on the wire this mornng.

>>WASHINGTON (CBS.MW) - President Bush on Monday tapped Kenneth Dam to be second in command at the Treasury Department, a post that will renew the close public and private sector ties the law professor already shares with Secretary Paul O'Neill.

As Deputy Secretary of the Treasury, Dam will play a key role in the international financial policy of the United States. He has been a critic of the International Monetary Fund, favoring scaling back the fund's activities and limiting the size of its loans, and has also been critical of past financial bailouts of countries.

Dam's nomination completes the roster of top officials at Treasury, including Friday's widely expected nomination of Stanford professor John Taylor to serve as Undersecretary for International Affairs. Taylor once advocated abolishing the IMF.

White House economic adviser Lawrence Lindsey has also been critical of IMF bailouts, and the Bush team is expected to be much more hesitant to approve large-scale international rescue packages than was the Clinton administration.

Dam served as assistant director of the Office of Management and Budget in Washington from 1971 to 1973, during O'Neill's 10-year service for the agency.

Their past extends to aluminum giant Alcoa Inc. (AA: news, msgs, alerts) , where Dam has been a director since 1987 and where O'Neill served as chairman from 1979 until he accepted Bush's nomination to head Treasury.

Dam has been a professor of American and international law at the University of Chicago Law School since 1992. Previously he was a vice president at IBM (IBM: news, msgs, alerts) from 1985 to 1992. Other public sector experience includes a stint as former Secretary of State George Shultz's deputy secretary of state between 1982 and 1985.

The nomination requires Senate approval.
Rachel Koning is a reporter for CBS.MarketWatch.com.<<


Pandagold (3/6/2001; 9:26:29MT - usagold.com msg#: 49464)
Oo-oops!
'Changing tide'

Pandagold (3/6/2001; 9:20:51MT - usagold.com msg#: 49463)
Journeyman: One I owe you

I owe you this. Didn't want you to think I was ducking. Hope I addressed your post correctly - well most of it. I apologise now, itf I didn't. Have to rush as must keep my eye on the market. When things happen, it will be sudden and without much, if any, warning.

Well, it took me a long time to wade through that #49342. Some of it re-your college betting pool was a little beyond me — the principle I understood. In fact I illustrated a similar principle when I talked about how an acquaintance of mine showed me, by personal experience, how easy the markets can be manipulated.

I understand all that you say, and, on the surface, that your comments are generally accepted.

It is not my aim, or desire, to tell others how to operate a strategy in the markets.

In many things in life, it depends upon mindset. As a qualified psychologist, I know how difficult it is to get people to be in control of their minds and channel their mind energies in a positive way. The vast majority of people are defeated in things they wish to do by FEAR, and are, as a consequence, skewed towards the negative.

This creates more fear...and so it goes on.

Another influence is that most have an inability to free their minds from the constraints put there from birth by 'well-meaning' parents, and some teachers who should never have been allowed to practise their profession.

We are NEVER taught to think big enough, and many do not possess the 'devious' minds that permit them to imagine that there can exist people who have such minds and who have been able to build up, over centuries, a network by which they have been able to create a power base that far exceed any government, past or present.

Those who control media, do so for much more than money, in fact sometimes they will run things at loss (financial). They know your weaknesses, and how you (general, not personal) are so easily influenced.

If you are wondering why I am dwelling on this, it is because I am addressing one of your sentences, a very important one to assure you — it is impossible, repeat IMPOSSIBLE, to over estimate those who are shaping and moving this world in a direction they choose. This will be the hardest thing I would have to get across to you, or anyone, not just hard, I can almost say impossible, if I apply the 'law of averages'.

TPTB, I can tell from the many postings, mean many things to many people. I do not intend to get into further explanations, it is not really important. Only when one accepts that such an entity (power structure) exists do things begin to make sense, and therefore free you from mental confusion, and wasted time and effort trying to figure things out, that appear irrational otherwise.

If you read my post carefully, you will see that I do not say it (trading) is easy, especially right now, before the tide has changed. I told you I am not getting over excited, but then one should NEVER, even when things are going very good. This leads to over confidence and error.

I honestly believe that those who can free their minds — open them fully, remove all indoctrination from false beliefs, take a good look at the history of man — ignoring the details (it is focusing on details which clog the brain, and deflect energy), and see things with a broad view, will see the truth. The truth really is out there.

You could make a movie illustrating everything I am trying to say, build it round a good plot and people would say 'Hey wasn't that something' But they still would not believe it could really exist. Like they see a warning on a cigarette packet but say 'well it may, or may not be, but if it did happen it would be to someone else, I'm different'. We are well and truly conditioned to think in a certain way.

Once again — who or what doesn't really matter. I do not need to know the geological properties of Icebergs, or how and why they are formed. All I need to know is that they exist and that they can sink the unsinkable. This is far from a perfect analogy but it should get the message across.

And, I am not from Missouri so no need to meet one to accept they exist. And no good sailor would ever believe, no matter how many times he had successfully sailed round the globe that he had conquered the sea.

I use a mixture of methods in my trading. I do rely a lot on charts, volume, trend lines, etc., and the direction of the wind. I also look at what the media by concessus of opinion is trying to get me to believe. On the top of this, from my belief in my assessment and understanding where TPTB are heading, and noting any problems that could send things a little off course for a while, I make my trading decisions.

Am I right 100% every time? No? One does not have to be. Market trading is not like sports betting it is not all over after one match. That is what I love about it.

Someone once said "Fear is a little dark room where negatives are developed" To me fear is a luxury that I reserve for those special occasions where all else has failed - As I mature those special occasions grow less and less — haven't had one for a long time.

When I have studied all my trading and reviewed all my errors, they have always been because my timing was wrong, or that I ignored the signs of the changing tied. Oh, I saw them, but ignored them. As for timing well, one gets better with practice and study, and remember — even a stopped clock is correct twice a day. In other words — you get a second chance (and usually a third and a forth.....

We attract what we dwell upon, therefore, be positive. Look for the opportunity and seize the day. It has NEVER been better for we mere mortals than with today's technology.

.

Pandagold (3/6/2001; 8:53:52MT - usagold.com msg#: 49462)
Journeyman: The Mind Manipulators

Naopleon was not only a great statesman, and militaty leader, but he had a good understanding of what is 'power', and had a prophetic vision of the future.

Two statements attributed to him that I remember from my schooldays ( a long tome ago) where I was blessed with one of the best history and geography teachers one could wish for are:-

" I would rather face a thousand bayonets than a writer's pen"

After he had conquered most of Europe, and he was on a high, someone said to him - "Now, what about China?"

He replied: "Let the tiger sleep, for when she wakes, all the world will hear her roar"

What has all this to to do with the present, and to gold?

More than you think, as you will see as events unfold.

It was the Russian weather that really defeated him, for had he taken Russia, there would have been no Waterloo.

Someone else made the same mistake more recently.

Galearis (3/6/2001; 8:28:57MT - usagold.com msg#: 49461)
Lease rates, gold and silver are in
serious
backwardation.

Now.

G.


Journeyman (3/6/2001; 8:03:20MT - usagold.com msg#: 49460)
That "barbarous relic" and other victims @Pandagold, ALL

Pandagold (03/04/01; msg#: 49360): "Up until the first world war
there was no history of hate between Germany and England. We are
both from the same stock, and if we were involved in any battles
it was both on the same side. Then suddenly, almost overnight we
were taught to hate. But, as that first Christmas of 1914 showed,
even though war had been declared, the hate was not there in the
common man. Who will we be told to hate the next time? It shows
how media ... is used to manipulate our thinking and our actions.
Control a people's thinking, and you control the people."

J-MAN: Indeed. "They" are so confident, they even have a key
part of the process nailed and named - - and sometimes they even
fess-up to the whole thing:

"Well Jim, it is very important in a democracy that you have the
support of the people. One of the reasons why George Bush [Sr.]
had to demonize Saddam Hussein was to get the support of the
people, and Bill Clinton has done the same thing, Vice President
Gore has done the same thing with respect to Milosevic." -Raymond
Tanter, Fmr. Natl. Security Council Staffer, WATCH IT!, MSNBC, 2
Apr. 1999, ~11:56:45 AM EST

"Demonization" is clearly a part of all "their" modern war-
mongering - - - and "they" use it elsewhere too:

_Gerry Spence_: "It was called the demonization of the defandant.
... Look what they did at Waco. They turned everybody against
those people at Waco. They said that they were sex fiends, and
that they were child molesters, and by the time it was all over,
the next morning after that fire there was a poll, and I think it
was by USA TODAY, that showed that 87% of America was in favor of
what the FBI did. Now here's what they did, they burned ...
twenty-two, twenty-five little kids, little babies on a, as if
they were on a spit, they burned those little children to death.
And the American public said "That's all right," and you know
why? Because [they] had been demonized, those people had been
demonized. ... they do this by pre-trial publicity. They did this
to Randy Weaver." -CNN Burden Of Proof, Oct 14, 1996, 12:45
PM{TC00G 08:05}

They did it to gold too - - - that "barbarous relic," remember?

Regards,
Journeyman


Cavan Man (3/6/2001; 7:31:56MT - usagold.com msg#: 49459)
714
Appreciate your comments and opinion very much. Best...CM

714 (3/6/2001; 7:08:11MT - usagold.com msg#: 49458)
Thanks, all...
...for the feedback. I do think we're splitting hairs on this oil issue at this point, and perhaps Belgian is right: How relevant is all this to the current market? My work in this area was simply to examine, and possibly verify, this oil-for-gold trade as it was being portrayed on gold forums.
More importantly, we need to "ground" ourselves a bit and get back to the basics of gold investing. Gold is perceived as such a "fringe" investment by almost everybody I know, one that is highly speculative, which of course, is not necessarily the case. I often wonder if gold forums aren't doing the gold industry a bit of a disservice by disseminating so many wild theories and conjectures. But of course, it is not my place to be a censor, nor would I care to be one.

I would urge anyone lurking here, who may be deciding whether or not to get their feet wet in the gold market, to go ahead and step in. There's an old adage, "Buy low, sell high." This is certainly a time to buy gold bullion "low". I got into gold investing in 1998, when the price was slightly higher, and cannot claim to have made much money on this end so far, but I've lost much more on some other investments. One in particular, a blue chip consumer company comes to mind, one that dropped 30% IN A DAY last year on an earnings report (they are blue chip!). And I certainly would have fared far, far worse in tech stocks (fortunately I have nary a dime on such stocks).

So go ahead, come on in, give Mr. Kosares a call, the water's fine....



Belgian (3/6/2001; 7:03:52MT - usagold.com msg#: 49457)
Topaz
Aren't we all complicating things un-necesarrely ? Do have oil producers the intention of saying something with POG ?
I don't think so. POG is momentarely in the ban of the Central Banks. And if one wants to give any signal at all...they will do this with the US$ - only- and the rest will follow. POO past (from 1990) and recent has IMO more to do with the unwinding aftermaths of Desert storm. The bills are paid. The liberator has been rewarded and the oil-producers want to get on with their live. Saddam and Irak's reserves are the joker in this card play.

Arab gold-stashers also see, that official gold stored for generartions, is no longer officially fostered as before.
The UK/Suisse - signal is a very strong one. One would think (hope) that they are profitting from EMU/Gold reshuffle, to accumulate silently. They probably haven't got the chance to accumulate enough dollar-surplusses to do the gold-trick. What do we know about the war-repayements and secret agreements to the US? Acquiring consideral amounts of physical gold is done at very low prices in tempo non suspecto and with enormous dollar-surplusses, lying idle. All the other rest (moves) is for speculative purposes. At this forum we must surely be part of a small cognant goldbuyers. The movers aren't moving IMO. This does not implicate that they are acting wisely.

If POG dives under total production cost of 250$, another move ŕ la WA, might signal that the goldreserves may be taken seriously. But the IMF 3.200 tons are still booked at 38$/ounce (number 3-holder). What difference does a periodical 50$ an ounce make for them ? Goldavenue.com, claims that the goldproducers were responsable for preventing another 10% sale of IMF gold. Again, who were the buyers, if any. Why has the goldproduction declined as to absorb the official sales ? Let us remain realistic and pragmatic, without unproductive fantasy. Let us encourage private gold-accumulation with solid arguments. Almost everything is in place to have a high degree of succes into the nearby but unknown future. We don't ask 2$/ounce for that. smile faithfully !

Topaz (3/6/2001; 4:36:45MT - usagold.com msg#: 49456)
Lease rates
http://www.lbma.org.uk/2001gofo.htm
Straight from the horses mouth.

tg (3/6/2001; 4:29:38MT - usagold.com msg#: 49455)
the receipe for deflation
http://www.dailyreckoning.com/
The FT goes on to point out (as Dr. Richebacher has already) that not all downturns are alike. Typically, the post-war pattern has been for "overheating" to produce higher inflation rates, which the central bank then stifles with higher interest rates, which produce the downturn. But this time, there was little inflation. Why? Because it is a "supply side" recession...more like the recession in Japan of the last 11 years...or the one that followed the '29 crash in America. It is marked by too much capacity, which helps keep prices down.

*** For the first time in more than 50 years," says the FT, "the U.S. is experiencing a downturn against a background of suppressed inflation. And just as the Fed's role in producing this period of weakness was relatively limited... so it may also be not much more than a bit player in determining how quickly it ends."

*** All the discussion, debate and whining about whether the Fed is going to raise or lower interest rates - upon which the entire nation turns its attention as if it were the Second Coming...and Alan Greenspan the Messiah - is probably nothing more than a sideshow. Higher rates didn't cause the collapse of the Nasdaq. Lower rates won't bring it back.



Topaz (3/6/2001; 3:55:51MT - usagold.com msg#: 49454)
Belgian
If I may butt in?
I consider the "all-pervasive" nature of POO is now being manifested in the continued tanking of global markets. IMO the price hike to "a little above affordable" is directly related to the INABILITY of POG to reflect current Fiat indiscressions.
What they're basically saying is, "let Gold better reflect the status-quo or learn to live (or die) with unaffordable OIL"
If gold traded freely, Oil would return to $12 o/nite.

Just guessing though!!

Topaz (3/6/2001; 3:23:55MT - usagold.com msg#: 49453)
Shifty: 714
Shifty,
Here we go again, Link showing wacko numbers (same as last week, during the spike)
714,
Can I echo Sir ORO's thought's re: your continued input here.
With a combination of both pragmatism and faith we will no doubt be able to roll back a lot more stones.
You Sir have demonstrated an ability to help roll back some of the heavier ones.

Belgian (3/6/2001; 3:15:23MT - usagold.com msg#: 49452)
Sir ORO and oil/gold(dollar) brainstorming
Is the oil/gold/Arab history of 30 years ago (before 1971), still relevant for today's extrapolations ? IMO, it is not. Things have changed dramatically. Kings and Princes have also been lured into stockmarket speculation as well. All that's left is the natural strong - physical gold - affinity of oil people.We are overackting this given in today's actuality.
We are trying to look into Gold's future and are ready to use historical events + today's evidence, for pragmatic projections. Oro, your detailed knowledge of what happened is not helping me in projecting, possible, gold-involvement and/or "strategy" by the Arab oil-producers.

Who can pinpoint the exact reason, why POO went from 10$ to 35$, without any POG move ? Vital importance ! Since we still have not the slightiest evidence of world-gold-buyers (accumulators)...we do have to remain sceptical towards old stories, wished to be repeated. If any identidy on this world, should have (secret) plans to accumulate a large amount of cheap physical gold...the biggiest paper-giant would not be able to suppress POG for such a long period of time. For how many years can you fool powerfull gold-investors ? With the offer/demand-balance, sitting as tight as it is for the last 5 years...where is the intuitive, gut-feeling, accumulation-reflex of the jewellery industry ?

In what sense is the oil/gold -past helping us, today, for jumping to conclusions. The POG high of 414$ ('96) and its decline to 252$ is the EMU-period. Also a US$ rise period (rebound from a dizzy decline) and POO decline. Now, AU/OIL/$ correlation before 1971 - after - and now : is there a fundamental difference or not ? And are the Arab oilproducers, proactive in this correlation or is gold simply, nothing more than a side-effect for them, closely related with their passionate affinity for gold as everything except a pure monetary and personal-power item ?

I would be glad to share the finding of answers on my own questions through search for contact with the Arabs. But for the time being I am on a Central Bank crusade.

My general question remains : QUO VADIS GOLD ?
And the answer must be found by the ones who are willing to accumulate or hold onto the physical ! How much investment gold-bars are stocked in Arab vaults ? Thanks for answering ORO.

And finally, a little teaser,...is there an analogy between the stockmarket en gold ?? Stockmarket-INDEXES , are keeping up relatively well against the reality of people selling shares, cleary evidenced by the decline Advance/Decline-indicator....and...a very low POG, with no evidence (?) of goldaccumulation ? Is it the ultimate preparation for "the auri" ?

SHIFTY (3/6/2001; 2:56:26MT - usagold.com msg#: 49451)
Lease Rates moving up
http://www.kitco.com/market/LFrate.html

Lease Rates

(Expressed as an annual percentage rate)

Gold
March 06 2001
Silver
March 06 2001
Platinum
March 06 2001
Palladium
March 06 2001

Bid
Change
Bid
Change
Bid
Change
Bid
Change

1-month
2.8375%
+0.5500
1.4375%
+0.5000
8.5375%
0.0000
3.5375%
0.0000

2-month
2.4750%
+0.5000
1.1750%
+0.4500
9.2750%
0.0000
3.2750%
0.0000

3-month
2.1488%
+0.3500
1.1487%
+0.4000
10.1487%
0.0000
4.1487%
0.0000

6-month
1.8000%
+0.1500
1.2000%
+0.4000
10.0000%
0.0000
5.0000%
0.0000

1-year
1.7225%
+0.0500
1.3225%
+0.1000
9.9225%
0.0000
5.9225%
0.0000






ORO (3/6/2001; 1:23:33MT - usagold.com msg#: 49450)
714 - comments on your 49448

Thanks 714 for your comments and questions. I very much appreciate your work and this discussion. The Arab oil countries and the house of Saud are not the core of my work, but have a significant bearing on it. Therefore, I stop looking when I have enough information that bears on my work. I can't emphasize enough the importance of the kind of detailed work that you point to and do yourself, but will warn of a couple of routine problems.
First is that of believing official positions, data, laws, etc. in a world as informal as that of Saud and even of today's Arabia. Think of it instead as a Mafia organization with the Saudi government being just one of its "fronts". Granted, that is where you will find official documentation. But this paperwork is nothing but an artificial record to cover up the reality of action and motive, not a source from which it may be revealed as written.
Second, the basic motives and principles of economics don't somehow disappear when they come into conflict with official law, institutions, and bookkeeping. They remain in action and over time will subvert completely any alternate intent. The stated purpose of an official government action is most commonly unrelated, or opposed to the actual motives of the people who arranged it. Often, this is also true of official organizations such as corporations.


Oro: "The particular arrangements for payments of royalty should be seen as part of a whole picture, one in which dollars flow in and out of Arabia and its Gulf neighbors, and gold accumulates both at home and in vaults abroad."

714: What money was flowing into Saudi Arabia besides royalties? Yes, we have local payrolls (at third-world pay rates, no doubt), and some Saudi suppliers, but what else? I thought I painted the broader picture in my #49422.
-----------------------------------------------------------
For example, in chapter 5, Brown notes the advance Saud requested from FDR of $6 mil per annum (4 mil oil barrel's worth per year, or $120 mil of today's dollars), and of Aramco's fear of Saudi expropriation of the concession in favor of British interests. State department mistrust of big oil and primitive despots brought them to push the job of Saud's support onto the Brits, who gave $40 mil ($800 mil in current dollars) over the period 1943-4. Aramco's situation (pg 107) was described by Brown as "'subjected to a squeeze play between the Saudi Government and Britain’ in which both were pressing the company to the limit."
Though Brown never specifies what it was that was "squeezed" out of Aramco, we can be sure that it included cash dollars gold and goods. As Brown writes in page 109 that Ibn Saud had in Dec 1942, while pleading for money to run his administration claiming that he is nearly broke, displayed "conspicuous wealth" to the US delegates who came to meet him. Included in the display, according to CJ McIntosh of the US delegation, was a 5000 American car caravan including Saud's brand new personal custom Packard with external handrails for guards to hold while hanging on to the car. The crown prince alone took 500 cars to move his household, and each princess had her own little fleet of curtained black limousines and hundreds of attendants. Obviously there was no shortage of cash (or goods) flow coming in.

On pg 115 Brown says Col. Eddy, the US representative complained to a congressional delegation of the English representative Laurence Grafftey Smith supplying American trucks, Jeeps, gold, food and other lend lease materiel in order to take the Aramco concessions.

By 1943, the State department resistance was overcome and funds flowed from the US government to Saud's variously labeled pockets, and from there to his various suppliers, friends, etc. The Brewster commission report (see Brown pg 170) indicated $100 mil of support to Saud by the end of WWII. With the British support, we have $140 mil, that on top of the royalties.

By 1950, 546,703 barrels of oil per day were produced in Saudi, and production was substantial by the end of WWII, approaching 300 thousand. That was quite a neat bundle of revenues to lose, wasn't it? $200 mil per year? As Aramco had to constantly protect itself from expropriation and odd maneuvers such as the Onassis attempt at gaining shipping rights, it was repeatedly raided by the Royals and their court for bakshish.

Second point is that the funds did not come "into Saudi Arabia", but into the hands of the Royals and their court who did not bring this money into the country. More likely, whatever funds did arrive in dollars were quickly removed from the government and the court to the separate treasuries of Saud and each of his princes and courtiers.
----------------------------------------------------------

ORO:"A 100% pricing discrepancy is alot of room for arbitrage on something as dense in value as gold, even in war times."

714:Where would King Saud, head of a remote and primitive desert kingdom, or his court/government conduct such an arbitrage? Or for that matter, the hangers-on or whoever else you imagine would conduct this arbitrage? You seem to be assuming modern market mechanisms were in place at that time in Saudi Arabia. They weren't! Not only that, there was no gold trading in NY or London during this period. Remember LBMA was closed during the war and there was no gold trade at that time under US law. For instance, we know Aramco went to the LBMA went to LBMA to buy gold, under special dispensation from the US government, to buy sovereigns for these payments before the war.
-----------------------------------------------------------

Gold continued trading in Hong Kong, in Cairo and Alexandria, in Casablanca, in Switzerland, Lisbon, Madrid, and even in London proper. That no official trading occurred is no indication at all as to whether such trade had taken place. The arbitrage I speak of is bringing gold to the holders of dollars anywhere in the world from where gold could be had at the official price, notably from the DeGaulle government in exile's funds in Canada, from the Dutch gold in the US and Canada, and from the central banks of neutral countries that could exchange dollars for gold. The gold could then be delivered to Saud and company with no more trouble than encountered in bringing him 5000 cars.

Arbitrage is older than the COMEX or the MERC or the LBMA, or the Chicago and Kansas grain futures markets. It is a fancy term for the common practice of using price discrepancies between two markets for profit.

As for the primitive Saud, he had Philby on his side among Western educated people to keep him informed of his options and of his interests (all, of course, for goodly fees).

The LBMA was not yet in existence.



714:Who were these hangers-on? I've never seen Brown refer to "hangers-on", or any other such references that use such a term. Could you be more precise?
-----------------------------------------------------------
Philby, for one, the various Emir's like bin Jiluwi, the eastern governor who is described in Brown's (pg 162) quote from Aramco's Marinovic describing a 1955 incident where Jiluwi announced that he was coming to pick up $200K for a loan, which was returned in Saudi silver Riyals two months later. Jiluwi was one of Saud's old war buddies and had the last word in the Eastern Province, capable of summary prosecution, judgment, and execution.

Examples abound throughout the book, so I will stop here.



ORO: "The thinness of the Jiddah market, even by the standards of that day, is not an indication of the conversion volumes, because those would have been outside that market precisely because it was thin. The point is the price."

714: Really? A thin market is not indicative of conversion volumes? Since when? I think it's safe to say that the dollar price of gold reflected the expectation of inflation (typical during wars) and that country's increased supply of US$ (tiny by today's standards) relative to gold. What Saudi moneychanger would particularly want this strange new currency, from a country that for all they knew, would lose the war? A thin market indeed, very thin. In every way.
-----------------------------------------------------------
Again, the conversion would definitely not have happened on the Jidda market, where Hajis were changing money because the market was thin, because the conversion would become common knowledge instantly, and because as good a price, or better, could be had elsewhere. The price is the only indicator of conversion, because the Shuk responded to any opportunity it could to arbitrage in this meeting place of Islam to any other market from Casablanca to Bombay.



ORO: "The US government's idea of the business was (and remains) the continued flow of oil, and that of the oil companies was the continued control of supplies to sell."

714: Well, if you read a bit more closely, you might realize the US government was very much at odds with Aramco on a number of issues. In fact, it was the US Navy which desired this oil more than any other government entity, for obvious reasons. In contrast, the State Department let Aramco know in no uncertain terms they were opposed to the building of the Dhahran-Riyadh railroad.
-----------------------------------------------------------
One thing to remember is that Hull, the war time Secretary of State, had requested and succeeded in having Jordan, and then Smith, the English representatives, removed by the English Foreign Office after complaints came in from Col. Eddy and congressmen visiting there, about the Englishmen's attempts at booting Aramco off its concession.

FDR and the rest of the administration was told of the significance of the oil findings in Saudi by his Secretary of the Navy and others in his administration, who were lobbied hard by Aramco parent companies. The group that used FDR as their persona (outside of the socialist idiots of the department of State) was sufficiently convinced of the importance of Aramco's concessions to have FDR draw a map of the Gulf for English Ambassador Lord Halifax splitting Iranian oil for the Brits, Iraqi and Kuwaiti oil an even split for the US and the Brits, and Saudi for the US (meeting of 2/8/44 – pg 111 in Brown). Then Secretary of War Harold Ickes’ expert on oil matters Lee DeGolyer was sent on behalf of the US government and came back with an astounding report of the region's potential, with his estimate of potential reserves reaching to 300 billion barrels, a third in Saudi Arabia, and stating that this would be very substantial for world politics from that point on. Aramco's concession interests were recognized even before that as identical to those of the US.



ORO: "The state is most nakedly the private domain of the elite in Arabia."

714:Has anything changed? Fwiw, you never did address the debt problems King Saud himself faced. They should be obvious in any read of Brown's book, where he commented on them extensively.
-----------------------------------------------------------
Again, Saud may have been a near bankrupt in his official kitty just as Saudi was officially "in the hole" for over $100 bil in 1998, while prince AlWalid had a $400 bil portfolio to manage. But that is just the point I am making here. The Saud royalty and their coterie were not identical to the government or the country, they engulfed the government as a subsidiary. The fact of the subsidiary being near bankruptcy did not diminish the rich parent organization.


714: I fear I've burnt up too much of Mr. Kosares' bandwidth on this issue over the last few days. I'll leave you with the last word for now. I'll be back in a few days or weeks, maybe months.

I suggest that MK and the rest of the forum would benefit from your insights on the oil matter.




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