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Welcome to the USAGOLD Gold Discussion Archives. Looking to buy gold coins and bullion? The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets. To join the debate request a discussion password here.

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ARCHIVED DISCUSSION FROM 10/9/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Leigh (10/9/2000; 23:14:38MT - usagold.com msg#: 38658)
Black Blade
Great, GREAT story! As Rush is fond of saying, humor is rooted in truth.


Black Blade (10/9/2000; 23:09:11MT - usagold.com msg#: 38657)
A Day in the Life - Hey, we can dream can't we?
The pressure is still building as a developing energy crisis looms over the horizon, the Middle-East is on the brink of war, the world's equities markets are coming under ever more pressure as companies distribute earnings warnings almost daily, the GDP rises month after month, etc., and yet gold still languishes around $270.00 per ounce. When gold is allowed to rise, the run-up will be fast and furious. We have had 2 very minor previews so far. The first being the WA announcement were gold rocketed upwards toward $330.00 per ounce within a couple of days. Second, when Placer Dome Gold Inc. (PDG) announced that they would discontinue forward sales, gold shot up toward $320.00 per ounce and was still moving in an upward direction until hedge-fund Barrick Gold (ABX) announced that they would not only continue forward sales, but would increase them.

But the world is an uncertain place, and now the "oil card" comes into play as there is a severe shortage of heating oil and natural gas as we head into winter in the northern hemisphere. The manipulation of the CPI and PPI inflation indicators will not fool the average American as he/she gets the utility bill. Americans are fond of blaming someone whether it be the Big Bad Oil Company or OPEC. They tend to think of oil companies as charities whose only function is to bear the cost and give them "cheap oil". Sorry, but those days are over. It doesn't stop there either.

As the soccer moms in their SUV's cart around their spawn down to the park, to school, the store, etc. they inevitably must stop at the gasoline station. Again the manipulated CPI and PPI numbers become meaningless as they pay over $100.00 to fill both tanks. But then the food at the grocery store is also much more expensive as it had to be delivered by trucks powered by diesel, and the petrochemicals that were used for fertilizer and pesticides. It isn't just the food either. It is also the styro-foam and plastic wrappers made from petrochemicals. This is turning into one expensive daily excursion. That's still not all. Hubby is having similar episodes of sticker shock as he goes to work and home again. I guess that core rate number makes one feel much better now, right?

As Hubby and Soccer Momma put the spawn away for the night, they sit down and go over their portfolio of 401K and IRA statements. They feel really smug right now and are confident that they will enjoy an early retirement once the spawn go away to college. They chit-chat and sit down to the computer to reconcile the bank accounts, investment statements and bills as it has been a rather hectic week and they finally have time to catch up. They fire-up that computer made of petrochemical by-products and sucking electricity outta that socket in the wall. They click onto the internet and open up their online Quicken spreadsheet. Hubby starts gasping for breath while clutching his chest and Soccer Momma promptly faints away! In the next scene, the ambulance rolls up to the hospital emergency entrance and the attendants roll out the gurney with Hubby jerking about like a Mexican Jumping Bean everytime the EMT's spark him up with a few AMPS. No, this is not the e-trade commercial where Hubby has money coming out the Wazzoo! Turns out that Hubby's gonna be OK, he just got vapor-lock when he saw that retirement would have to be put off because the market had been tanking all week long and his high-tech portfolio went from $800,000 to $160,000 because one of his securities missed the whisper number by a penny. Now this "rocket-scientist" begins to consider Day Trading with the remaining $160,000! Sanity prevails because he realizes that these are retirements funds and there would be a 10% withdrawal penalty.

As the markets take a toll on families retire plans across America, people search for a safe haven. By this time, hard assets are gaining favor. Most are still skeptical about gold, but a few of the gold-kooks they know have been buying up what their brokers have always told them were sterile assets and don't produce an income. What to do? Must do something! The portfolio continues to flounder and decreases in value. Meanwhile inflation is now impossible to deny even as Hubby and Soccer Momma watch Ron Insana on CNBC interview Larry Kudlow and Bill Wolman about the deteriorating situation in the world markets. Ron turns to Larry and says "Larry, how high will the inflation rate go?" Larry responds "Come on Ron, there is no inflation because gold is essentially flat." Ron turns to Bill and says, "OK Bill, I just asked Larry about gold…" Bill is foaming at the mouth like a rabid chipmunk "I TOLD YOU NEVER TO MENTION THAT WORD AROUND ME!!!!" Hubby and Soccer Momma turn off the TV and are now really worried. What to do? They shrug their shoulders, eat dinner, stare at their spawn, and don't say a word.

The next day war breaks out in the Middle-East and OPEC cuts off oil from the west in an attempt to prevent the west from coming to Israel's aid. It isn't gonna happen anyway as the American politicians have completely drained the SPR oil in order to cap the price of oil and to keep Americans in the northeast cozy and warm during one of the coldest winters experienced yet. Gold explodes upward in price to the tune of $1000.00 per ounce, then $2000,00, etc. and it's only 10 AM eastern. They turn on the television and find out that the stock market is closed limit down. They notice Ron Insana talking to Maria Bartiromo, so they turn up the volumne. They are in shock as they listen to them talking about beautiful and heavy gold is as they each fumble with a stack of American Eagles while joking about the newly bankrupt Barrick Gold. They notice that the ticker is not running with stock tickers, but with tickers for Eagles, Maple Leafs, Krugerands, Philharmonics, etc. Then a news flash appears on the screen that says Gold at $30,000 spot. Hubby and Soccer Momma's jaws hit the floor with a thud! The next scene on the television is a news cast showing an ox cart with Eddie George and Tony Blair wearing big white dunce caps being pulled toward Hyde Park while angry Brits throw rotten vegetables at them. Suddenly the doorbell rings! Soccer Momma answers the door and a letter is delivered by courier. She hands it to Hubby and he opens it. He clutches his chest and dies on the spot. A hysterical Soccer Momma picks up the letter and sees that it is the hospital bill for 1 ounce of gold! No, that's not money coming out the wazzoo!


Peter Asher (10/9/2000; 21:47:16MT - usagold.com msg#: 38656)
ET (10/9/2000; 18:00:41MT - usagold.com msg#: 38644)
http://www.usagold.com/hall/hallfame2.html#anchor185281

That article on money needs a major correction to the following paragraph

>>>>>"C. The creation of Currency outside the Fed

Is the explosion in the amount of new currency an exaggeration? A few
current examples of currency creation, outside the Fed, help illustrate how
easy it is to "make money."<<<<<<,

To be correct it should read:

*****The TRANSFER of Currency outside the Fed

Is the explosion of the transfer of Currency via stock certificates an exaggeration? A few current examples illustrate how easy it is to obtain "Other Peoples Money" via the "Market Mania" of the moment.****

Per my "There's No Such Thing as Money "In" The Market " (Link above), and -- ORO (10/04/00; 21:02:16MT - usagold.com msg#: 38267) below

>>>>Obviously, where there is a seller there is a buyer and the money does not go away. It merely changes hands. Thus we do not put our money "into" a physical or financial asset, but we put it "through" the asset. The money is then free, in the hands of the former holder, to flow elsewhere- to chase after other goods or financial assets.<<<<<<

No money is "Created" when these stocks are sold at massive profit ratios. A multitude of new shareholders dollars now belong to the sellers of those shares.



Peter Asher (10/9/2000; 20:52:06MT - usagold.com msg#: 38655)
Taurus (10/9/2000; 19:14:30MT - usagold.com msg#: 38646)

Since you asked:

The two paragraphs from the author you quoted below are very close to being the ravings of an ignoramus!


>>>>"(5) It needs to have intrinsic value. And here, I believe, Aristotle was mistaken. On the
contrary, it needs to have ZERO intrinsic value; ZERO utilitarian, commodity value. The more
value a commodity has as a commodity, the LESS value it has as money because its supply can
be disrupted by outside events. Until the era of modern-day electronics, gold was admirable in
this respect. You couldn't eat it, wear it, or burn it as fuel. It had no practical, day-to-day value.<<<<

He said WHAT? "You can't wear it." He must live on the Moon and no astronaut ever visited wearing jewelry. Speaking of which, he then says:

>>>>"Wampum was fascinating. Beads made of clam shell. Little cylinders an eighth of an inch in diameter and a quarter inch long with a tiny hole drilled down the center. How do you DO that? And how could ANYONE be persuaded to trade an item of real value (food or a canoe or a prized bow) for pieces of clam shell? Of what earthly use was it? And if it had no USE, how could it POSSIBLY have been regarded as an item of value?<<<<

The true data is there in his own words. The creation of these beads was the zenith of their craftsmanship technology. It was admired BECAUSE of the difficulty in creating it. It was their jewelry and their art. This is like saying a Rembrandt is only worth the ‘value' of a square of canvas and the paint.

Gold and wampum, each in their respective culture were ‘Precious'! The whole thrust of "Asset Money" is that it always has a value no matter what may transpire within society regarding the ‘value' of "Credit Money"; which is purely and simply some form of "Entitlement Chit" and therefore subject to default.

As to "the LESS value it has as money because its supply can be disrupted by outside events."

That is the one problem with Gold as money that does exist. But compared to what can happen to Currency when "disrupted by outside events" it is minuscule: And eventually balances out over time.

I await the commentary from OUR Aristotle regarding this nonsesnse!


SteveH (10/9/2000; 20:51:40MT - usagold.com msg#: 38654)
RossL
It is what I thought. The divergence is quite apparent. Gold is undervalued by a factor approaching 2 to 3 times. Can you run the numbers of the Grams v oil chart for up to three standard deviations and give us the mode, median, and mean? Lots of work but the info will prove helpful.

Any stat jockies out that there that can comment on the amount of monetary momentum required to create such a divergence in oil v gold and why oil would all of a sudden sky rocket without gold. The traditional mechanism that glued these at the hip is broke. What is it folks?



ET (10/9/2000; 20:15:04MT - usagold.com msg#: 38653)
Ed Bugos
http://www.safehaven.ca/GIC100900.htm

From the article;

"Seven Reasons why the Fed is in an Inflation Trap

Reason #1; "The Sponge"

In order to avoid inflation and actually have deflation, the Fed is going to have to soak up all the excess dollars whose
speculative utility suddenly evaporates, but whose residual liabilities do not. I don't think that many people really understand
the implications for interest rates under a project with such magnitude as that. A recession would not be enough to prevent
inflation; the project would require a forced depression. The reason is that a recession would likely bring with it some form of what
conventional economics calls stagflation, the onset of which would probably arise from a weak exchange rate. The Fed would be
required to give up trying to balance growth with monetary discipline entirely, and get tough enough to do what Paul Volcker
eventually had to do.

Right. From man of the year to the bum who threw out the Plaza Accord, all in the span of maybe one term? it takes quite the
character to do the right thing while every man, woman and child in the country say he is wrong to take their livelihood away from
them? even if it was illusory to begin with. So before you accept that this kind of resolve exists, consider that Mr. Greenspan's
anecdotal assurances of structural productivity gains are conveniently supportive of the Fed's easy money policies. That being said,
anything less than pure "resolve" will result in a weak currency and continue to manifest in dollar inflation.

It is conceivable that had the Fed any aspiration for accountability (facing a similar predicament in 1971) when Nixon broke the
dollar/gold link, the Bretton Woods system possibly could have survived. Instead, they chose to let the dollar float, which
astonished populists who actually thought it would rise in value, vis-à-vis the gold price."

justamereBear (10/9/2000; 19:48:17MT - usagold.com msg#: 38652)
Taurus 38646

Good solid food for thought post, but I doubt such a complex philosophical matter is going to get a fast reply, if for no other reason than is is weighty, and requires thinking time.

One thing I did not see addressed re money; relative scarcety and/or difficult to obtain.

Hill Billy Mitchell (10/9/2000; 19:48:08MT - usagold.com msg#: 38651)
@ Turnaround
You said:

"...I wonder what took them so long to stumble onto this idea- maybe our Trail Guide knows."

Maybe they got their ideas from following the discussions on this forum.

hbm



Tomo (10/9/2000; 19:47:12MT - usagold.com msg#: 38650)
If black gold is dying, will gold gold leap to the throne again?
www.RunningOnEmpty.org
I moderate another 350-person egroup forum that researches and discusses the world's oil reserves and other energy matters.

Since starting in March, we have posted over 3,000 emails.

Although gold may be low at present, imminent severe shortages of oil that the public is yet unware of, may sharply increase demand for the traditional security of gold.

The gist of it is, the global supply of oil is about decline at a rate of about 3% per year, from about 2009 onward. The impact on every economy will be very, very severe. For example, there are presently 722 million cars in the world, 11,000 aircraft, and over a million decked fishing boats. There are 500,000 byproducts of oil.

Our investigation of alternative energy reveal that they will be grossly inadequate in energy quantity, and conversions themselves require large amounts of energy and some years to implement them.

In the expected chaos of hyper inflation as oil consuming countries flood their money out to the oil vending countries, I would like to ask fellow members whether you think gold may suddenly return to favour as the best security.

A more detailed explanation and authoritative evidence are available at www.RunningOnEmpty.org

Comments welcome.

Bruce Thomson
Moderator
www.egroups.com/group/RunningOnEmpty


Turnaround (10/9/2000; 19:23:37MT - usagold.com msg#: 38649)
Iraq dumps dollars


Aristotle (10/09/00; 00:59:58MT - usagold.com msg#: 38595)
"Hey there, Turnaround. It's good to know that Iraq has kept its humor while taking an important and symbolic first step.
The statement said that "the currencies which will be bought are the French franc, the German mark, the Austrian schilling, the pound sterling, the Dutch florin and the Italian lira".

The translation---

The statement said that "the currencies which will be bought are the euro, the euro, the euro, the pound sterling, the euro and the euro".

Simply grand. A policy statement that offers the display of diplomacy and comedy all rolled into one!

Gold. Get you some. ---Aristotle"


******

I did find that sentence puzzling- cannot a CB retain the individual currencies, perhaps as a hedge against a potential Euro ("Zero" in some circles) collapse? I don't know for sure, but Iraq's principal customers may be the aforementioned countries. Mentioning the pound is curious too, hmmm? I wonder what took them so long to stumble onto this idea- maybe our Trail Guide knows.




Taurus (10/9/2000; 19:23:12MT - usagold.com msg#: 38648)
Oops.
Oops. The word is 'alloy' and not 'allow'.

Hill Billy Mitchell (10/9/2000; 19:17:25MT - usagold.com msg#: 38647)
@ RossL 10/08/00 # 38580 & RAP
http://home.columbus.rr.com/rossl/hbm.htm
Sir RossL

You say to me:

"The newest chart is using the same inflation adjusted values. If you believe this approach is in error, then let me know."

My response:

Just got back from certain family commitments. Need time to digest and study before giving an opinion. May be a few days.

I was planning to produce information for a chart similar to the one I have been touting, only comparing real % price change comparisons over the 20 yr period between Gold, Silver, and Platinum, and possibly crude and or pladium. Only I was not going to do that until we had established a consensus of opinion as to which chart was the most accruate.

In the next few days I will come up with my readings on the best, in my opinion, chart and why it is the best. What the charts tell us is valuable only if what they tell us is very accruate.

I feel like a bumbling fool for being so persistent on this when I have not given much in the way of coherent reasons for my conclusions. Believe me I have good coherent reasons, I think(ha!) but haven't been able to come up with the time to present my reasons clearly to this forum. I hope to be able to do this before the week is out.

Sir RAP

Thanks for your interest. I get a funny feeling about the direction we are taking on this. I fear that if we are not careful we will come up with the wrong answer to the right question. Please be patient with me. It seems that things move so quickly on this site that by the time I get around to any conclusions on this grams of gold per barrel question that your answer may be here for you from RossL and others before I can get to it. So far what I have seen, the chart from RossL will require more time from my slow mind before I can get off the pot.

Respectfully

HBM



Taurus (10/9/2000; 19:14:30MT - usagold.com msg#: 38646)
Gold: Commodity or Money
http://www.pronetisp.net/~rbrown/
This is a quote from the book in the above-referenced link:

"Aristotle was a Greek philosopher, born in 322 B.C. He was a student of Plato. He became enshrined as an authority on all things great and small: ‘…one of the greatest thinkers and scientific investigators the world has ever seen.’ So says the encyclopedia…

"…so it is no wonder that Aristotle was interested in the… nature of money… Of course in his day, ‘money’ meant nothing more nor less than coined metal. The printing press was 1.7 thousand years in the future.

"According to Aristotle, the properties of good money are these:

"(1) It should be durable… Nothing surpasses gold in this respect…

"(2) It needs to be divisible. Gold, of course…

"(3) It needs to be portable… As a physical asset, probably only diamonds offer a more concentrated form of wealth [than gold].

"(4) It needs to be consistent. Grain can very in moisture content (and be heavy or light as a result). Gem stones have a wide range of flaws, colors, and sizes. Gold in its pure state is very uniform by comparison. But when you allow it, dilute it, adulterate it, and pass it off as pure, gold stumbles a bit.

"(5) It needs to have intrinsic value. And here, I believe, Aristotle was mistaken. On the contrary, it needs to have ZERO intrinsic value; ZERO utilitarian, commodity value. The more value a commodity has as a commodity, the LESS value it has as money because its supply can be disrupted by outside events. Until the era of modern-day electronics, gold was admirable in this respect. You couldn't eat it, wear it, or burn it as fuel. It had ho practical, day-to-day value.

"But who am I to question the wisdom of Aristotle? This is the man, after all, who brought you the fact that heavy objects fall faster than light objects as proven by the observation that rocks fall faster than feathers. ["Our" Aristotle is not being referred to here. Let us be clear on that.]

"As a schoolboy, I remember several classroom discussions of money. We compared barter to a primitive money system as well as to our own, modern, paper money system. The primitive money we discussed was always the wampum of the American Indian.

"Wampum was fascinating. Beads made of clam shell. Little cylinders an eighth of an inch in diameter and a quarter inch long with a tiny hole drilled down the center. How do you DO that? And how could ANYONE be persuaded to trade an item of real value (food or a canoe or a prized bow) for pieces of clam shell? Of what earthly use was it? And if it had no USE, how could it POSSIBLY have been regarded as an item of value?

"But before my contemplations (rudely referred to as ‘daydreams’) carried me to the point of asking the same questions about gold, the teacher invariably interrupted with a quiz for which I was invariably ill prepared.

"One text describes gold coin as ‘full-bodied’ money ‘whose value as a commodity for nonmonetary uses is equal to its value as money’. When the U.S. was on a gold standard, we had in circulation a mixture of full-bodied money and ‘representative’ money wherein paper certificates served as a substitute or proxy for gold.

"With full-bodied money the commodity itself, rather than a paper substitute, passed from hand to hand. Isn't it ironic that we used as a standard of value something that HAD no value? Full-bodied money is supposed to contain its own value within itself. But gold is useless; it has no value other than ornamental. In that respect, gold is the same as wampum. Something that DID have value would not work as the basis of money (as Chapter One sought to illustrate using wheat as an example)…"

So, the point seems to be that gold is useful because it's useless. It's useful (as money) because it's useless (for anything else). It's usefulness as money is inversely proportional to its usefulness as a commodity. That's why gold makes better money than silver. Silver can be USED for things; real, utilitarian things – photographic and X-ray film, for example.

Any thoughts from the Golden Knights at the Table Round?


Turnaround (10/9/2000; 19:07:20MT - usagold.com msg#: 38645)
The Spooky Spectres of Bretton Woods
http://www.plata.com.mx/plata/salinas9.htm

Probably the two spookiest things I learned here at USAGOLD were FOA/Another's prediction that "the dollar and gold will rise together" as the dollar prepares for its hyperinflationary burn, and ORO's explanations of currency collapses as dollar support mechanisms- the death throes of Bretton Woods.


*******

December 23, 1997

Hugo Salinas Price

The spectres of Bretton Woods [excerpted]

The fascinating articles which have appeared in the last few months in the financial newspapers,dealing with the crises in Southeast Asia, Korea and Japan, provoke a suspicion that the debacle we are witnessing is nothing less than a long-run consequence of the Bretton Woods agreements of 1944, which were drawn up, essentially, by two men: [the Fabian-socialistic one-worlder con artist Lord] John Maynard Keynes and Harry Dexter White. Out of their two minds was hatched our present world, in which the U.S. Dollar is the primary reserve currency for all Central Banks.

Consider the following line of reasoning:

… The precarious stability of all currencies outside the U.S. depends on the amount of U.S. Dollar reserves owned by the corresponding issuing Central Banks.

….No Central Bank can accumulate a growing stock of U.S. Dollar reserves, if its country does not export more than it imports.

… Thus, the world over, national economies have been oriented to exports - always in exchange for Dollars - as the mainstay for the respective national currencies and banking systems.

….As soon as exports of any one country seem to fade, the speculative sharks begin to circle. The
currency is deemed "overvalued". A devaluation is at hand.

…The Central Bank will raise interest rates drastically, to stem the Dollar hemorrhage and retain or bring in Dollars. The devaluation will wreck savings, and the high interest rates will devastate the productive structure. The Central Bank will continue to invest its Dollar balances in U.S. Treasury Bills paying less than 6%. Thus even the most severely afflicted countries are financing the U.S. Government, at a cost to themselves.

[Here he assuming correctly that the principle will never be repaid.]

…All countries in the world are in competition for U.S. Dollars, which they must obtain at all costs, for failure to obtain Dollars means devaluation, ruination of savings and financial havoc. Further, devaluations are contagious, for devaluation in one country will likely mean devaluation by others, as each strives to hold on to its exports and indispensable Dollar inflows.

…Everywhere, exporting has become the central economic activity. National economies are sacrificed for the benefit of exporters. Wage rates are depressed by devaluation, and savings are destroyed, so that exporters may export.

[WHEN the dollar devalues it will almost surely lead to external competitive devaluations, see for example:
http://www.mises.org/humanaction/chap31sec4.asp


"…If one looks at devaluation not with the eyes of an apologist of government and union policies, but with the eyes of an economist, one must first of all stress the point that all its alleged blessings are temporary only. Moreover, they depend on the condition that only one country devalues while the other countries abstain from devaluing their own currencies. If the other countries devalue in the same proportion, no changes in foreign trade appear. If they devalue to a greater extent, all these transitory blessings, whatever they may be, favor them exclusively. A general acceptance of the principles of the flexible standard must therefore result in a race between the nations to outbid one another. At the end of this competition is the complete destruction of all nations' monetary systems."]


The economic centre of gravity of all countries has been thrust outside their borders, placing them all in a condition of chronic instability. Since Dollars are the objective, the U.S. has to be the buyer, and the U.S. must run trade deficits to supply the world with export surpluses. How else are the Dollars to flow to the world´s Central Banks? Some analysts speculate that the U.S. trade deficit may reach $300 billion a year, and fear that whole areas of U.S. economic activity may be wiped out by the desperate export efforts of the rest of the world.

[This of course has now occurred, and then some.]

…Such is the prevailing condition in the world´s economy. Clearly, it is unsound for the world to depend on exports to the U.S. for national stability. And it is profoundly unsound for the U.S., to place itself in the position of buyer of last resort to the world.

…When economic collapse comes about, as in Malaysia, the globalists call for pulling down barriers to the flow of capital. However, their diagnosis of the problem lacks depth; the problem is not "free flow of capital"; it is not even, fundamentally, overexpansion of credit or other unsound banking practices, but rather, in the last analysis, the Bretton Woods system of Dollar reserves, that skews every economy in the world towards the objective of Dollars via exports, over everything else.


…Our very odd world monetary and financial system, built on the ruins of Bretton Woods, has produced an unstable world economy, and is headed for a serious conflict with nationalist sentiments the world over. Picture yourself playing "Monopoly" against a player that owns the "Bank"!

…If the world is out of joint because of the Dollar reserve system instituted by Bretton Woods, then clearly, what the world requires is a system where national currencies do not depend on Dollar reserves. And that can only mean one thing: gold reserves, and their corollary, currencies convertible into gold. Either that, or we shall be treated to the spectacle of a crumbling world economy, and virulent nationalistic reactions.

******

[Alternatively, we may be treated to the spectacle of one-world government- a large crime syndicate composed of member crime syndicates, similar to the structure of the American Empire and of the Federal Reserve System.]


ET (10/9/2000; 18:00:41MT - usagold.com msg#: 38644)
Money
http://216.46.231.211/guest.htm

A good analysis of what drives today's world.

From the article;

"C. The creation of Currency outside the Fed

Is the explosion in the amount of new currency an exaggeration? A few
current examples of currency creation, outside the Fed, help illustrate how
easy it is to "make money."

1. On July 24, Deutch Telecom announced the $50 billion buy-out of Voice
Stream (a Seattle-based American company). A $50 billion deal in America is
a 200 billion mark deal in Germany, where the size shocked the Germans.
Fifteen months earlier, Voice Stream did not exist as a public company, and its
net loss for the first quarter of 1999 ($77.2 million) exceeded its revenue ($66.8
million). It seems even the Germans are betting the never-ending financial
bubble will go on forever - or that huge new debt will be wiped out by even
more rapid inflation.

2. Then consider the "insiders" at a company called SPYGLASS (NASDAQ).
These people who founded the company, invested early in venture capital, or
work for the company, sold $19.7 million of stock "into the market" between
8/99 and 7/00. Insiders paid as little as one cent a share, and as much as $11.10,
and sold it as high as $91.37 a share. One founder acquired his initial stock at a
penny a share, and sold 50,000 shared (a tiny part of his total stock ownership)
for $11.38 a share. His creation of "new money" was $568,250 realized from his
earlier cash investment of $500. This is how the money game works - huge
monetary rewards for risk! There are thousands of companies like SPYGLASS,
some giants like CISCO (where the stock appreciation in a decade was six
cents a share to $60 a share), and some small or smaller like SPYGLASS.

3. Investment News (8/14/2000) wrote: "Corvis Corp appears to be defying
gravity...but that may be an optical illusion. The company has unproven technology,
no revenues, and only three prospective customers, but it has a market
capitalization close to that of General Motors." A July 2000 IPO, Corvis "caught
up" financially in its total "market cap" with all of the stock outstanding in
General Motors....in a month and a half of trading on NASDAQ the company
has no sales or earnings.

4. Reuters/CGES (8/24/2000) wrote: "This year's oil revenues for ten OPEC
member countries are expected to rise by 62 percent according to the
London-based Center for Global Energy Studies. The Center's chief economist,
Leo Drollas, said the 10 countries would earn $201 billion compared to about $124
billion in 1999."

Year 2000 Revenue Increases:

Saudi Arabia $27 billion
Kuwait $7 billion
UAL $8 billion
Qatar $3 billion

Now think! How would you feel about selling a year's production of your
depleting oil for $201 billion, as you saw Germany's largest telephone company
pay $50 billion for a dream company with no earnings?"

"Does an OPEC country continue to sell its depleting real oil reserves
at last year's price? Or, when a Venezuelan oil minister sees rich
nations creating new trillions of dollars in buying power overnight in
new digital high-tech currency, does he raise the price? When South
Africa and Russia, two near-bankrupt nations, see more money
everywhere except where they live, will they raise the prices on their
depleting asset that has increasing need in the technological world -
platinum? They do control the market! And if this begins a
domino-effect in price increases for all raw materials where either
basic reserves or production facilities are limited, isn't a rapid
increase in inflation sure to follow? Yes!"

Black Blade (10/9/2000; 17:56:28MT - usagold.com msg#: 38643)
Andy Smith Gold Bear Booted off GE
Andy Smith the alledged gold analyst tried to convince fellow Goldbugs at the GE forum to ditch gold and go long the NASDAQ in the middle of this Tech Bear Market. He was posting under the handle "Guru Brad" and Gold bear Ted Arnold posed as his wife with the handle "Galileo" and he/she was extolling the virtues of his superior intellect. Another poster with the handle "Klondike" couldn't deal with it any longer and while in the throes of temporary insanity and hallucinary angst made various accusations and promptly disappeared into the ether.

Of course that's all speculation on my part and I could be wrong ;-)

auspec (10/9/2000; 17:47:25MT - usagold.com msg#: 38642)
Hanging W Mr. Wolavka
Hey Friend,
It's about time to recoup some losses. This hasn't been much fun for quite some time! You are certainly the eternal optimist. Regards.

wolavka (10/09/00; 16:53:31MT - usagold.com msg#: 38641)
If we work together
tonite on globex we can push gold up 5-10.00.

JavaMan (10/09/00; 16:03:22MT - usagold.com msg#: 38640)
Hello All...

Well, I just got home from work and saw the good news! I had hoped to be in the running but didn't imagine I would win the contest for two reasons. First, the competition was strong with many great people submitting great entries. Secondly, it seemed almost too easy as I simply considered many of the things I like about USAGold and the observations just kept coming and coming so I felt the winning entry would certainly require a greater investment of mental energy.

Congratulations also to the other winners and to all of you at USAGold...you're the real winners!

Thanks, JavaMan

RossL (10/09/00; 16:01:43MT - usagold.com msg#: 38639)
Chart
http://home.columbus.rr.com/rossl/hbm.htm

SteveH, I changed the x20 x500 chart. Extrapolations are of the current prices changed by a -3% fudge factor to convert to 1999 dollars. This is not a highly scientific process, and the results may vary...

The final segments in different colors are estimates of where we are today. They are not based on annual averages like the rest of the data.


Black Blade (10/09/00; 15:27:45MT - usagold.com msg#: 38638)
Vast Energy Resource Locked Below Ocean Floor
Good Read

By Todd Eastham

WASHINGTON (Reuters) - When scientists think about energy resources, combustion -- and fire -- are often part of the equation. But ice? Fire and ice may seem like strange bedfellows, but a growing number of scientists believe the greatest store of clean-burning fuel available to future generations may lie frozen in combustible ice crystals below the ocean floor. This resource, known as gas or methane hydrates, is thought to exist in vast deposits below the world's continental margins where organic sediments have been trapped for many millions of years by pressure and cold. Preliminary evidence suggests these reserves may dwarf oil, coal and natural gas combined.

Charles Paull, chief scientist on a recent expedition to explore the Blake Ridge off the Carolina coast, said that formation alone may hold enough methane to meet U.S. natural gas needs for 105 years. ``Gas hydrates may make up about 5 percent'' of the sediment in this huge outcropping some 2,800 feet below the surface of the Atlantic Ocean on the margins of the North American continental shelf. Paull, a senior scientist at the Monterey Bay Aquarium Research Institute in Moss Landing, California, was co-chief scientist on a recent expedition of the Ocean Drilling Program, a 15-year-old international partnership to explore the mysterious world below the ocean floor managed by the Joint Oceanographic Institutions and funded in part by the National Science Foundation.

The largest international Earth science research project in the world, the ODP has seven international Partners representing more than 20 nations, including European countries, Australia, China and Japan. The program's drill ship JOIDES Resolution is arguably the world's most sophisticated floating laboratory, capable of extracting core samples from hundreds of yards below the deep sea floor and bringing them intact to the surface.

Gone Before You Look

That is essential, Paull said in a phone interview, ''because humans and gas hydrates are normally incompatible. They decompose very quickly in conditions where we are comfortable viewing them. It's only by accident that we even see any gas hydrates in nature. By the time you look at them the thing you're looking for is gone.''

Methane hydrates were first discovered below the Arctic permafrost by oil companies at the end of the 19th century, and it may well be in the Arctic that exploitation first becomes commercially feasible. That is because they are formed by a combination of relatively low temperatures and high pressures. ``At temperatures around 40 degrees below zero centigrade (-44 F), they can be found near the surface,'' said Paull. At 20 degrees centigrade (70 F), though, you have to look nearly two miles (3 km) below the ocean surface to find them.

Paull and John Farrell, acting director of the ODP, said the first commercial use of methane hydrates may be as a ``flood gas'' to increase efficiency of oil and gas extraction in existing wells in the Arctic, especially around Prudhoe Bay. ``A lot would depend on the price of natural gas,'' Farrell told Reuters in an interview. ``As with any natural resource, the feasibility of extraction is to a great extent controlled by price. If demand is high, then 15 years may be a reasonable goal'' for commercial extraction.'' Ann Trehu, co-chief scientist of the next gas hydrate leg of the ODP, thinks they may be found in even greater concentrations off the Oregon coast, where her team will drill into a formation aptly dubbed Hydrate Ridge, in August 2002.

``It's unique because massive concentrations of hydrates have been found on the ocean floor'' around this formation, she said in a phone interview. Hydrate Ridge differs from Blake Ridge because it is ``an accretionary complex ... (where) one tectonic plate is being subducted under another. In general, subduction zones appear to be rich in sediments'' and gas hydrates. Excitement Is Building While research is at an early stage -- just compiling a round inventory of hydrate formations around the world will take decades -- excitement is building and some scientists, including officials at the U.S. Energy Department, believe large-scale commercial exploitation could begin by 2015.

If oil and gas prices remain high over the next few years, the timetable could be accelerated. But huge environmental and technical obstacles remain. While methane is by far the cleanest-burning fossil fuel, when released unburned into the atmosphere it is a potent greenhouse gas with far-reaching implications for global climate, and the oceans themselves. Art Johnson, a senior scientist with Chevron Corp. in New Orleans, cautioned that commercial exploitation of this vast potential resource is ``years away and there are a lot of unknowns right now.'' But he added: ``The potential is so huge it's hard to walk away from it. With gas prices heading upward ... certainly there will be more interest in this. Right now, we're really just characterizing the resource. Is it massive? Is it finely disseminated crystals? Is it in the pore space of sand grains where it might be able to flow to a well bore? Is it even extractable? We don't really know yet.''

That may change within the next few years. The Japanese, who have few fossil fuel resources on land but potentially vast gas hydrate resources within their territorial waters, are pushing forward with research into extraction, Johnson said. ``Apparently their approach is to use hot water to try to disassociate the hydrates,'' releasing the gas into pools that can then be tapped using conventional methods, he said. ``If you drill well below where the hydrates are and find sand with geothermally heated water in it, you might be able to inject that into the zone where the hydrates are.''

Potential Worldwide Energy Source

Ocean surface water may be warm enough to dissolve the hydrates in some formations. And evidence suggests natural gas deposits underlie some hydrate formations, in which case it might be possible to drill down into the deposit, releasing the gas and reducing the pressure on the methane ice crystals. Reduced pressure alone might be enough to dissolve the crystals and release the gas. Joint Oceanographic Institutions former president Adm. James Watkins told a recent National Press Club luncheon he thinks methane hydrates ``have the potential to become a major worldwide energy resource.'' But he cautioned it is not yet clear whether the gas in these formations can be ``harvested in an environmentally safe way without releasing the gas that would become greenhouse gas'' or destabilizing continental margins, possibly triggering undersea landslides and potentially cataclysmic tsunami waves.

There is evidence that massive naturally occurring releases of these gases in the past have contributed to abrupt changes in the Earth's climate, as well as towering tsunami waves like one that wreaked havoc in northern Europe 8,000 years ago. And there is a further danger associated with existing undersea oil and gas lines: They may raise the temperature of the surrounding sea floor and trigger a release of gases that could create huge potholes in the ocean floor, thus rupturing those lines and leading to hugely destructive undersea spills. So whether this resource ever lives up to its potential as an energy source, ODP scientists figure they have little choice but to keep probing the ocean floors to learn as much as they can about the mysterious burning ice, which could prove either a great boon or a great bane to mankind -- or both. (NYSE:CHV).

Black Blade: Not quite feasible yet, This has been looked at and studied for many years and no one has quite figured out how to extract it. I was not aware of methane solids under the Juan de Fuca Plate though. How convenient - right off the coast of Oregon. Nevertheless, the technological obstacles are tremendous, like trying to catch a wisp of smoke in a gale. As I have said before, we plenty of hydrocarbons, it's just that the cheap hydrocarbons are fast becoming depleted.

BTW, record low temperatures across the US today as we wonder this will be a colder than normal winter with 24 year low inventories of oil and lower than normal NG storage. It could be shaping up to be an energy crunch of epic proportions!


Black Blade (10/09/00; 14:30:28MT - usagold.com msg#: 38637)
Israeli Ultimatum just Passed, and Arabs are United. We'll See if Barak is just blowing Hot Air or if he's Gonna do it.
DUBAI, United Arab Emirates (Reuters) - Saudi

Arabia warned on Monday that it and other Arab states would not stand idle if Israeli Prime Minister Ehud Barak acted against Lebanon and Syria. ``Barak has to think before taking any step...and nobody should think that the Kingdom of Saudi Arabia and the whole Arab and Islamic nation would just watch with their hands tied,'' Saudi Crown Prince Abdullah said. He was responding to a question by the official Saudi Press Agency (SPA) on the kingdom's position if Israel acted on its threats against Lebanon and Syria. Barak has threatened ``decisive action'' unless Lebanon and its political mentor Syria rein in the Iranian-backed Hizbollah group which on Saturday captured three Israeli soldiers and wants to swap them with Arab prisoners in Israeli jails. The crown prince did not specify what action would be taken by Saudi Arabia, the world's largest oil exporter and a key player in regional politics. The tensions between Lebanon and Israel erupted amid a wave of violence between Palestinians and Israelis that has killed at least 89 people, mostly Palestinians, and threatened to end the Middle East peace process. Crown Prince Abdullah said Saudi Arabia would attend an Arab summit in Cairo later this month to discuss the violence:

``We are with every Arab and Muslim stand that will strengthen the position of our brothers in occupied Palestine.'' He said Israel and other states involved in the peace process, an apparent reference to the United States, must see that Arabs and Muslims would not compromise on their rights in Jerusalem and its al-Aqsa mosque, Islam's third holiest site. ``We have a historic and legal right and a just cause...It is time for the Israeli side and to all who are involved in the peace process to realize what al-Aqsa means for us as Arabs and Muslims...There is no compromise on that,'' he said. The crown prince made his comments after visiting five wounded Palestinians evacuated to a hospital in Riyadh. SPA said he had also discussed the Israeli-Palestinian violence by telephone with Egyptian President Hosni Mubarak. Saudi Arabia's cabinet reiterated its condemnation of Israel's treatment of the Palestinians and said it would support any Arab action to help the Palestinians, SPA said. It had earlier reported that King Fahd had donated 30 million riyals ($8 million) to help the Palestinian people while crown Prince Abdullah had donated 10 million riyals.


Phoenix (10/09/00; 13:52:01MT - usagold.com msg#: 38636)
Energy Snippets, part deux (IMPORTANT)
More from the Wildcatter Weekly:

Headline: TRENDS IN THE US OIL MARKET PLAYED A MAJOR ROLE IN HIKING OIL PRICES THIS PAST YEAR.

All analysts agree a major change has taken place in the way the US industry buys oil, which has contributed to the threat of a shortage. Intensified financial competition in the nergy sector has resulted in the widespread adoption of "just-in-time" techniques, which allow companies to greatly reduce costs by reducing how much they pay in carrying fees. Joe Stanislaw of Cambridge Energy Research Associates says, "In one sense, we have gone from just-in-time (JIT) to almost not enough." Because companies are carrying only what is absolutely necessary, there is virtually NO CUSHION OF EXCESS INVENTORY TO DEAL WITH UNEXPECTED EVENTS. Exacerbating the problem in the US is the failure of Congress to take into account the effect of newly imposed regulatory changes on the commercial structure of the industry. Environmental regulations have also added to the problem by delaying the construction of necessary new transportation capacity.

My comments: If you read nothing else I write for the next 2 months, consider this carefully. The much talked about API inventory numbers will not be increasing any time soon. You see, the whole game of refining has changed completely in the last 6 months, and it's why even though there's ample crude (for today) on the water and in the system that inventories are not building. Refineries used to have 30, 60 or more days of raw crude at their facilites waiting to refine it. According to a major oil company executive I know, he recently said his company is now only keeping a bare minimum of oil on hand and buying it as they need it. Crude is so expensive anymore that no one wants to buy mass quantities (unless you're one-man shop buying SPR oil). Their company is now running under 30 days of supply and in the teens and they're AVERAGE in comparison to some. He mentioned one refinery in the Rockies, that is now has only 5 days of stock on hand!! 5 freaking days of quantity!! That's taking JIT to the extreme and creating a severe price spike possibility if supplies are interrupted for even a short time.



Phoenix (10/09/00; 13:35:50MT - usagold.com msg#: 38635)
Energy Snippets
Reading my energy newsletters today and a couple of things popped out.

From the Wildcatter Weekly (ipams.org):

HEADLINE: INCREASED DEMAND FOR NATURAL GAS IN THE ROCKIES AND THE WEST COAST WILL REQUIRE AN INVESTMENT OF $123 B-B-B-BILLION IN PIPELINE INFRASTRUCTURE OVER THE NEXT 10 YEARS.

So said Blaise Pool, manager of strategy and business development for El Paso Energy, speaking at the International Association of Drilling Contractors annual conferenc last week in Houston. 33%, or most of the growth in gas supply in the next decade, will come from the Gulf of Mexico with another 11% in Canadian imports. But gas from the Rockies, where coalbed methane fields are booming, will be up 14% percent and liquified natural gas imports will increase 6%. Pipelines have to follow the loads at electric generating power plants, Blaise said. He estimated the US would need 38,000 miles of new transmission pipeline, 255,000 miles of new distribution mains, more than 800 Bcf of working storage capacity, and 30 Bcf of interregional pipeline capacity.

My comments: B-B-B-B-B-Ble-ble, that's all folks. Cash out the market cap of Yahoo! and Dell and you've almost got it. Black Blade has alluded to it before, but natural gas is the critical heating resource, not heating oil. 53 million households use gas, while 7 million use heating oil. The future needs this infrastructure, yet it is being built ever so slowly due to EIS's, bureaucratic red tape, treehugger opposition, and low margins.

HEADLINE: A GROUP OF MORE THAN 500 GLASS, STEEL, AND CERAMIC FACTORIES IN MEXICO HAVE SAID THE RISING PRICE OF NATURAL GAS MAY FORCE THEM TO LAYOFF A TOTAL OF 250,000 WORKERS.

The Canacintra industrial group blames state-run oil company Pemex's monopolization for the increase in natural gas prices. Pemex defended itself, sayi8ng rising demand forced prices up. Pemex is looking forward to major profits this year from Mexican oil and gas production.

My comments: Man, NAFTA really stinks, it keeps exporting US jobs to Mexico where the costs are lower. Oops, I goofed. The article said it was MEXICO with the lowest cost of production in North America that may be having serious energy inflation in manufacturing. Whew!! I'm glad the American government is keeping citizens and companies up to date with *accurate* inflation numbers.




Black Blade (10/09/00; 13:25:04MT - usagold.com msg#: 38634)
Correction
About the Food-Chain (Fish story) - I might be mistaken, that probably wasn't the "Rainbow Warrior", it may have been the "Sea Shepard", the French sank the "Rainbow Warrior" in New Zealand I think. BTW, the indians drilled a whale (not sure what kind) on the last day of the hunt. Really was quite funny seeing grown Greenpeacers balling their eyes out and indians ceremonously praying and dancing atop the carcass and firing up the bonfires.

BOY! How I digree with a few cold ones!

Black Blade (10/09/00; 13:14:31MT - usagold.com msg#: 38633)
RE: Peter Asher - Wind Turbanes
Reminds me of a clause in the US treaties with the American Indians: "as long as wind blow - water flow" Cost of wind-generated power at operating wind farms is still higher cost. Wind is also politically incorrect with many enviromentalist as birds get beat up pretty bad as they fly into the blades (those blades can really get some rotation too!). They also require lots of open space to be of much use. The wind farm on Altamonte Pass in the East-Bay (N. California)is quite huge and is visible over thousands of acres. It really upsets some of those people. I guess these is one under construction in W. Texas as well. It should be interesting to see where it leads. Of course in the NW these were calls to tear down the dams along the Columbia and Snake Rivers because of the salmon runs. That's an interesting story as well - naturw in motion with a bit of help from man. The salmon go into Puget Sound and then hit the dam - Bingo! smorgasboard for the seals, of cource the concentration of that many seals in one location and - Bingo! smorgasboard for the Orcas. Then these are the native american indians drooling over the prospect of whale meat and Greenpeace chasing them off with their boats and ship "The Rainbow Warrior". Oh well, almost full circle ;-)

Phoenix (10/09/00; 13:13:06MT - usagold.com msg#: 38632)
Contest Congrats & Thanks
Congratulations to all the winners in the recent contest.
A tough task to grade. Each of you recognized completely deserved it. I saw many others that could also have qualified.

Thanks Townie & USAGOLD for letting me bring up the rear on the list. I am honored to be mentioned with such stalwarts in the keep of golden justice. And a hearty thank you for lighting the torches and keeping the mead glasses full around here. Methinks this little stone castle will become quite famous when the paper world burns.

Fly from the Fire,
Phoenix

wolavka (10/09/00; 12:43:03MT - usagold.com msg#: 38631)
Too late
Not out ? should be: Now gap up tonite+ tomorrow higher.

Peter Asher (10/09/00; 12:15:25MT - usagold.com msg#: 38630)
@ Black Blade & All
Wind turbines could be cranking up to fight higher
energy prices

The Associated Press
10/7/00 6:05 PM

PORTLAND, Ore. (AP) -- Soaring energy prices have brought new attention to a marginalized source of power:
the wind.

While wind-driven turbines aren't close to replacing traditional energy sources like natural gas, coal and
hydroelectricity, they could soon account for much more than the 1 percent of the power supplied to the Pacific
Northwest.

Utility executives and industry experts say wind could potentially supply up to 20 percent of the region's energy,
The Sunday Oregonian reported. Already a number of new wind-farm projects are under way:

-- A California company has proposed a new wind project in north-central Oregon near Condon. The project
would have 26 to 41 turbines and supply enough power to run more than 5,000 homes.

-- A Florida company wants to expand the Vansycle Ridge wind farm near Pendleton, as well as build a new
operation across the Columbia River in Washington. About 450 turbines will be located on dry-land wheat
fields and grazing lands, supplying enough power to run 70,000 households.

-- A Wyoming wind farm that delivers power to the Northwest through PacifiCorp and the Eugene Water &
Electric Board is undergoing its fourth expansion. The addition will supply power to 4,500 new households.

-- A Montana project in the Blackfeet Indian Reservation will create power for 6,000 households.

Wind turbines currently supply enough power to run 21,000 households, and that capacity will increase to
90,000 by winter 2001, according to the Renewable Northwest Project, a Portland-based group.

"This won't solve all of our energy problems, but it's clearly ready now to play a larger role, and it's at least a
partial answer to some serious environmental concerns," said Stel Walker, assistant professor of mechanical
engineering at Oregon State University and director of the Wind Research Cooperative.

Oregon State has been doing wind research since 1971, when it was one of two U.S. universities to study wind
as an energy alternative. But the 1986 Columbia River Gorge Scenic Area Act limited opportunities to expand
use of the technology. At 150 to 200 feet tall and with 35-foot-long blades, the turbines do clutter the landscape.
And low-cost power, available from federal hydroelectric dams in the Columbia Basin, also removed much of
the motivation to develop wind power.

The motivation returned, however, when the wholesale price of natural gas tripled over the past three years.
And uncertainty about hydropower, which supplies 54 percent of the region's energy, has grown amid
questions about whether to remove dams to help salmon.

The cost of wind power also has dropped, from 10 to 15 cents a kilowatt hour in the early 1980s to 3 to 5 cents,
because of advances in technology and government incentives. It's still more expensive than traditional forms of
energy, but experts think the price of wind power will continue to drop.



Broken Tee (10/09/00; 12:07:23MT - usagold.com msg#: 38629)
Oops
Sorry, that should read - by chance.

Broken Tee (10/09/00; 11:57:11MT - usagold.com msg#: 38628)
food fo thought
The 3 unheard of gentlemen/companies that received the SPR barrels of oils. Could they, by change, be major contributors to the Democratic party.

wolavka (10/09/00; 11:28:12MT - usagold.com msg#: 38627)
Set up
Tight dec range without run up on close will set this up for gap up. Don't get caught short.

Cavan Man (10/09/00; 11:19:19MT - usagold.com msg#: 38626)
elevator guy
Maybe it's the other way 'round. Good time to wring concessions for some vested interests.

elevator guy (10/09/00; 11:02:02MT - usagold.com msg#: 38625)
Hmmm.... Do you suppose?
Does anyone have an inkling as to whether or not the current action of Israel shooting rock throwers is linked in any way to the price of oil?

What I mean is, perhaps the spectre of war is used as a ploy to exert influence on OPEC?

Just a thought from left field....You know, where all the rest of my thoughts come from!

Black Blade (10/09/00; 09:39:35MT - usagold.com msg#: 38624)
Petroleum News Briefs and Fair Warning!
THE INDEPENDENT, London: "Raw material costs pushed up by crude oil price rise" by Andrea Babbington. 'A rise in the price of crude oil helped push up raw materials costs to industry last month, according to new official figures. Seasonally adjusted Office for National Statistics figures show raw material costs in September rose by 2.8 per cent, to stand 14.5 per cent higher than a year ago - the biggest year-on-year increase for 18 years. Oil costs were up 17.1 per cent to leave the price of a barrel of crude 71.5 per cent higher than it was 12 months ago. Despite the pressure of rising oil prices, factory gate inflation remained flat, with the annual rate of increase of goods leaving the factory gate unchanged from August at 2.5 per cent.'

Black Blade: Where oil goes, gold must follow. Think inflation - New Economy or Old Economy, Petrochemicals are so pervasive in manufactured goods and agriculture that increases will be passed along to the consumer.

INDEPENDENT, Asia: "US petroleum journalists say: Gas, oil to play key role in energy sector in 21st century.." by Faruque Ahmed back from US. 'US petroleum journalists have hold divergent views on the future use of gas and felt that oil and gas would continue to play a key role in the energy sector in the 21st century instead of being replaced soon by alternative energy sources. "I really believe that gas is going to play a growing role in the energy sector; oil will also remain a key player for longer time, said Cathy Landry, Washington Correspondent of Platt's Oilgram News...'

Black Blade: Of course! There really are no other alternatives! It was "CHEAP" petroleum that fueled this past Bull Market. BTW, Max Ansbacher this morning recommended that investors bail out of the stock market.

Mobil, BP Amoco and Royal Dutch/Shell have taken up about 60% of the Sinopec global offer of 16.78m shares...'

BOSTON GLOBE: "Bracing for oil price jump, N.E. rethinks its reliance" by Beth Daley. 'New Englanders have been warned before. Ever since the energy crisis of the 1970s, energy specialists said it was risky for them to rely so much on heating oil to stay warm. It's almost all imported, they said, and vulnerable to sudden price increases. Yet, as residents brace for a second straight winter of high oil prices, New England remains more dependent on heating oil than almost anywhere else in the United States. The six states have less than 5 percent of the nation's population, but consume a whopping 25 percent of the heating oil that is used in the United States….

Black Blade: Many record lows east of the Mississippi last night! Heating oil on the rise!


WASHINGTON TIMES: "Oil demand boosts U.S. dependence on foreign exports" by Patrice Hill. 'The extra 800,000 barrels of crude oil that OPEC has started pumping is a mere trickle in a world that consumes 76 million barrels a day. Americans are particularly thirsty for oil, sucking up a quarter of what the world produces and relying on oil for 40 percent of the booming economy's energy needs. Though the typical American grouses about paying near-record-high prices of around $1.55 for a gallon of regular unleaded gasoline, it costs less than bottled water and is downright cheap compared with the $3 or more many urban dwellers pay for a cup of Starbucks coffee...'

Black Blade: A national security issue to be sure and places the US at a severe risk!

So where does this all lead? - CYA! Get prepared and be ready as inflation and recession is already in the cards! If it doesn't hit before Bubba leaves office, pity the man who follows. He will end up with the same legacy as Herbert Hoover. But you can do something for yourself and your families. Get out of debt, get food stores and necessitiues, and get portfolio insurance - hard assets - Gold, Silver, and PGMs!



wolavka (10/09/00; 09:22:39MT - usagold.com msg#: 38623)
Don't be deceived
95% of brokers churn and burn, they have tried to degrade the only true store of wealth.

Time to rip some face off.

Black Blade (10/09/00; 08:54:55MT - usagold.com msg#: 38622)
Who's Right about oil- Part II


Bush's national-security point seems strained, since the reserve oil isn't being sold but "swapped"--the deal requires buyers to replenish the reserve. But that's not the only reason Gore and his advisers were delighted with Bush's response. Their fear had been that as temperatures dropped and the election approached, Bush would draw blood with his criticism of a Clinton-Gore "do-nothing" energy policy. Most people who heat their homes with oil live in New England, which is solidly for Gore, but a great many also live in battleground states like Pennsylvania and Ohio. Gore had only to think back to Jimmy Carter's 1980 re-election campaign for a time when high oil prices helped defeat a Democrat. By getting ahead on the issue, Gore could defuse the threat while burnishing his image as a fighter for the little guy. And when his opponent attacked the move, Gore could again paint Bush and Cheney as a ticket "of Big Oil, by Big Oil and for Big Oil." When Bush and Cheney stressed their plan to increase domestic oil production by opening the Arctic National Wildlife Refuge in Alaska to drilling, the Gore team was even happier. They quickly reminded reporters that Cheney's former firm, Halliburton, would reap windfall profits from such a move.

Even so, the issue is by no means risk-free for Gore. It reinforces his image as a malleable pol, so it's worth examining why he claims to have changed his mind. In February, when Bill Bradley, his primary opponent, proposed tapping the reserve to aid homeowners, Gore said the move wouldn't help boost supply, because if oil-producing countries retaliated by cutting production, "they'd wipe out any impact from releasing oil from that reserve." Gore now argues that circumstances have changed. The OPEC nations, he said last week, "pledged to increase oil production, and they have not." But the Clinton Administration says OPEC is now producing 3.5 million bbl. a day more than it did last March.

Gore's claim that Big Oil is guilty of "profiteering" may have more basis in reality. The heating-oil-supply problem stems in part from the fact that domestic refineries spent the summer making gasoline, because doing so ensured high profits. They didn't refine much heating oil because they didn't want to be stuck with large, high-cost inventories if the price dropped before winter. That didn't happen. Crude oil now costs about $10 per bbl. more than it did a year ago, and the domestic heating-oil supply remains dangerously low. So Gore found himself embracing a solution he didn't trust seven months ago.

Voters may forgive these second thoughts. But they might have a harder time reconciling his election-eve push for cheaper oil with a political career in which he has argued that high oil prices are a good thing because they help reduce consumption. In 1993 he pushed for a broad-based tax on energy consumption--the so-called BTU tax, which was killed by the Senate Finance Committee. Where is Mr.BTU Tax today?

There's also some hypocrisy in Bush's rhetoric. He spent last week complaining that for seven years, Clinton and Gore have had "no comprehensive energy policy," and yet it is Bush who has no long-term plan. The Bush website offers detailed positions on 23 different issues, from abstinence to taxes, but not a word on oil or gas. (Bush has scheduled a speech on the subject for this week.)

The timing of Richardson's announcement was geared not only to domestic politics but also to global energy politics. This week the OPEC heads of state are scheduled to meet in Caracas, Venezuela--their first such meeting in 25 years. Analysts don't expect much serious policy discussion at the meeting, but the Administration wanted its plan in play beforehand--with quiet support lined up from the Saudis as a way to help mute criticism from such OPEC members as Iran. The move is bound to displease those members who want and need high oil prices--countries such as Indonesia that could, as Gore warned last winter, reduce output in response. So the U.S. is treading carefully, describing its plan as a "temporary, precautionary, internal transfer of oil." Clinton and Gore hope that diplomacy has now succeeded in preventing an OPEC backlash, while also sending the signal that America is prepared to take concrete action to lower the price of oil. On Saturday the Venezuelan oil minister, Ali Rodriguez, the current OPEC president, spoke in support of the release. But will it work? In essence, the play is more about psychology than about supply and demand. By itself, a million barrels a day for 30 days is not enough to change the market equation drastically. Coupled with the threat of additional releases, however, it might be. But easing the burden requires more than a change in the spot price of crude. Domestic refineries are running at about 95% of capacity, and Richardson's estimate that the release could translate into an additional 3 million to 5 million bbls. of heating oil this winter seems optimistic. Since it will take 40 days or more for the oil to work its way from salt cave to refinery to peoples' homes, no one will know how effective the release was until after the election. In that sense, at least, it's a perfect pander for Gore.

--REPORTED BY JAY BRANEGAN, JAMES CARNEY AND ADAM ZAGORIN/WASHINGTON AND TAMALA M. EDWARDS WITH GORE


Black Blade (10/09/00; 08:53:30MT - usagold.com msg#: 38621)
Who's Right About Oil?-Time Magazine Part I

Who's Right About Oil?

Gore said tap the emergency reserve to show he takes the side of the little guy. Bush yelled, "Pander!" But can a pander also be smart policy?
BY ERIC POOLEY

To hear Al Gore tell it, George W. Bush and Dick Cheney are the oil-industry candidates, the men with Texas crude flowing through their veins. But in reality it is the Democrats who have the clout to meddle in the petroleum market. Last Thursday, Gore proposed that the U.S. control rising oil prices by tapping a small portion of the national Strategic Petroleum Reserve. A day later the Clinton Administration announced that it was releasing 30 million of the 570 million bbl. now stockpiled in salt caves along the Gulf Coast of Texas and Louisiana. The idea, said Energy Secretary Bill Richardson, is to correct extreme shortages in the heating-oil supply. "This is not political," he said. "The President wants to help the American people...have enough heat in their homes."

Six weeks before a presidential election, nothing that happens in official Washington is not political. And though many news reports have called this the first peacetime release of oil from the strategic reserve, it is not. The Clinton Administration has played election-year politics with the SPR before. In the spring of 1996, as Clinton was running for re-election against Bob Dole, gasoline prices shot up 20% in some states. Dole proposed repealing Clinton's 1993 gas-tax increase, and three days later the President responded. He seized on an obscure part of a bipartisan deficit-reduction bill and spun it as a relief measure for motorists. On a campaign trip to Florida, a state he had lost in 1992, the President announced that he had ordered the sale of 12 million bbl. from the SPR because the "rise in the price of gasoline...affects the take-home pay of working people who have to commute."

Sound familiar? Maybe SPR stands for Strategic Political Reserve. Clinton used it to inoculate himself against Dole. And Gore has used it to inoculate himself against Bush, who for months has been hammering Clinton-Gore for having no coherent energy policy. But unlike the one in 1996, this year's release was not something that fell into the Democrats' lap. It was debated for months--and initially Gore and Clinton were opposed.

Richardson began talking about the idea last January, and Gore let it be known during the primaries that he thought it was an ineffective way to lower prices. But as oil prices continued to climb, the Vice President's policy team became deeply involved in a months-long White House debate about tapping the reserve. Treasury Secretary Lawrence Summers opposed the release in a much publicized Sept. 13 memo, but a week before he wrote it, sources tell TIME, Clinton was already telling Saudi Crown Prince Abdullah that he was strongly considering tapping the reserve. They met in a suite at the Waldorf-Astoria in New York City during the U.N. Millennium Summit. Clinton's "objective was to get quiet support from the Saudis," says a source close to the talks. A few days later the President dispatched Richardson to Los Angeles to brief Prince Saud al-Faisal, the Saudi Foreign Minister. It couldn't have been a surprise to Clinton when Gore called him from the campaign trail last Tuesday and said he was going to come out in favor of an SPR release. Clinton was happy to let Gore propose the idea first so the Vice President could get a tactical boost just as Bush seemed to be regaining his balance.

And so the question is not whether the oil release is a pander but whether the pander is a good one or bad one--an effective policy that also wins votes or just a hollow gesture. The answer depends on whether this is a true oil emergency--and whether 30 million bbl. will help solve it. Anyone who has paid for a tank of home heating oil recently knows the problem is real. Heating oil now costs 67% more than it did a year ago; depleted inventories and high worldwide demand, along with forecasts of a colder than average winter, are expected to boost prices even higher. Last week 111 members of Congress--Democrats and Republicans, mostly from the Northeast and the Midwest--sent a letter to Clinton asking him to deploy the SPR. To dramatize the problem Friday, Gore held an event in Pittsburgh that featured a number of people battered by rising oil prices, including an elderly woman named Annie Young who said she didn't know how she was going to pay for heating oil since she already couldn't pay for her prescription drugs. "These prices are skyrocketing," said Gore. "It's hurting those on a fixed income, it's hurting young families... I want to reject the agenda of Big Oil and stand up to the apologists for Big Oil."

As soon as Gore came out for the oil release, Bush pounced on him for "playing politics." A Bush adviser calls Gore's position "manna from heaven" because it reinforces the claim that the Vice President will say and do anything to get elected. "The strategic reserve should not be used as an attempt to drive down oil prices right before an election," Bush said. "It should not be used for short-term political gain at the cost of long-term national security."



Black Blade (10/09/00; 08:28:25MT - usagold.com msg#: 38620)
Some Monday Morning Comedy from the people who predicyed $5.00/bbl oil!
Oil predicted to fall sharply to $22
By Diane Coyle, Economics Editor
9 October 2000

The price of oil is likely to fall sharply, boosting world economic growth, according to a report published this morning. The recent climb in prices to a 10-year high of $37.20 late last month was due to speculation, say economists at ING Barings. They predict a decline to $22 a barrel and below next year. Last week saw a significant fall in prices as the United States began to release oil from its Strategic Petroleum Reserve. The benchmark Brent price was close to $30 on Friday. Many analysts expect further falls, but there remains a good deal of nervousness about the effect of increased winter demand if the weather turns out to be cold. The lack of spare refining capacity is a particular worry, as increased crude supplies will not make any difference to such bottlenecks. However, Mark Cliffe, chief economist at ING Barings, predicts in his report: "The oil 'bubble' will burst, with a sharp downward correction in prices to $22 a barrel. The underlying supply/demand balance is moving firmly in favour of lower prices." He estimates that the oil price would have had to climb above $50 before the threat to the economy became as serious as the 1970s crises. As it is, the expected fall in the price will kick-start growth once again. "If this analysis is correct, then this promises a substantial improvement in the global economic environment," the report concludes. Lower oil prices would boost growth and profits and reduce inflation.

Black Blade: What ever it is that their smoking, it must be some good s!%#


wolavka (10/09/00; 08:19:40MT - usagold.com msg#: 38619)
Very sick
The middle east will explode , get out now.

Gold will go with it.

Black Blade (10/09/00; 08:17:53MT - usagold.com msg#: 38618)
NASDAQ getting SLAUGHTERED!
Congrats Java Man, Leigh, Pheonix, Perplexed, Nickel62 (Mr. INCO?), Tate, and Canamami! Whew, I think that's all of them. Thanks to all at castle for a fun time and a long stream of enlightening posts.

The NASDAQ is getting slaughtered this morning (down -87, and S&P down 10) with a few unhappy tech analysts getting all over the slow down in computer makers (IBM, Compaq, HP, etc.), and chip stocks (Intel, Advanced Micro, etc.). We could just slip below 3000 today, I expected before Friday, but who knows? Oil drillers and services moving up nicely right along with oil, this is a good sign as PMs are sure to follow, in spite of some nutcase analyst who actually said that metals would decline due to expected rising interest rates! HUH?


Black Blade (10/09/00; 08:03:21MT - usagold.com msg#: 38617)
Cannuck
Yeah, Paula Jones would rather disrobe for the whole world before she would in front of Bubba! So much for that legacy too! God's gift to women? I think not! ;-)

justamereBear (10/09/00; 08:01:47MT - usagold.com msg#: 38616)
congratulations Javaman and all

Lady Liegh 38612, (a winner and obviously one with a way with words) said it all and well. So I will plagiarize (and plagiarism is the sincerest form of flattery)

Congratulations Javaman on your very well deserved win, and to all the others who shared their thoughts. Thanks to USAgold for all the prizes, service, and ideas. Happy birthday.

And now I am largely gone for a week or so, altho hopefully I will find an opportunity to lurk.

Black Blade (10/09/00; 07:59:29MT - usagold.com msg#: 38615)
gerd be and all
The fact that most if not all of the SPR oil is not going to the US heating oil reserves was a no-brainer. There is no possible way for it to make it into the market. Bottle-necks are at every turn. The oil analyst continue to spout off that there is plenty of oil. These bozos just don't get it! It is first a capacity problem, and secondly a lack of "cheap" oil problem. When the majority of the SPR oil hits European markets, you can bet that some will splash onto Al Gore. Most interesting about this fiasco is that not all successful bidders are in the oil industry, but rather in the investment industry. And Bubba? - Good Bye Legacy!

Petroleum ready to run:

Heating Oil 0.954 +0.0246 +2.65 %
Crude Oil 31.63 +0.77 +2.5 %
Unleaded Gasoline 0.8645 +0.0195 +2.31 %
Natural Gas 5.07 +0.087 +1.74 %


















Canuck (10/09/00; 07:53:02MT - usagold.com msg#: 38614)
@ Black Blade
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=14537405
It appears that you were correct. One-third of SPR oil to refiners, one-third to be exported, one-third sold to Tom, Dick and Harry. What a laugh!!

I just emailed this article to 9 columnists of F-P for verification.

It's getting sad, very sad.

And the front page of yesterdays paper;

Milosevic rumoured to have fled to Greece with all the gold;
I guess he knows what's valuable and what is not. (LOL!!)

Paula Jones in next months Penthouse, hmmm!!

Yeltsin has written a book (The Presidential Marathon) outlining "...Mr. Clinton's notorious "penchant" for young women..."


wolavka (10/09/00; 07:25:15MT - usagold.com msg#: 38613)
funs over
Need some fund buying.

Leigh (10/09/00; 07:08:15MT - usagold.com msg#: 38612)
JavaMan
Congratulations on your very well-deserved win! Hearty congratulations to all the other winners, and a big thank-you to USAGOLD for the many valuable prizes so freely given today!

Happy birthday, and may there be many more!


gerd_be (10/09/00; 07:01:39MT - usagold.com msg#: 38611)
Strange story of the Strategic Petroleum Reserves (SPR)
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=14537405
Subject: Somebody Was "Napping" on Fixing Heating Oil Crisis

This is a slightly long story, but well worth reading through, as it almost defies any form of logic that so many bad things could happen to what is being billed as a sound part of Clinton/Gore's energy plans.

There seems to have been a screw-up in the recently announced SPR oil plan. If it is just a screw-up, it is of major importance. It could also become a realtime political scandal beyond any aspect of Whitewater. Since the tale is relatively complex, it may or may not ever get picked up by the national media. In my opinion, it certainly should.

In summary, here is what seemed to have happened:

A program to release 30 million barrels of SPR oil was announced on 9/22. The aim of this emergency program, as first announced, had no political overtones. It was a necessary act to prevent high heating oil prices in the Northeast. The decision to release these SPR barrels of oil was apparently made the previous Saturday afternoon at the White House. According to a story in the New York Times, Clinton was starting to get very worried about the high price of crude and the remarkably short levels of heating oil with only six weeks to go before the heating season began and also six weeks until the elections were held

(As the NYT story mentioned, Clinton might have been as worried about the impact on a heating oil problem for hurting Hillary in upstate NY as its impact on Gore.) A carefully coordinated plan to cool off the price rise of crude oil and heating oil was quickly figured out: SPR oil would be dumped on the market. But it now seems the only planning with any professionalism was how to choreograph this release to maximize its political gain, while also keeping the price of both oil and heating oil supressed at least through 11/7!

Within 24 hours of the plan being announced, various industry people realized it was extremely flawed in its ability to make a dent of furnishing extra heating oil. Our refineries are operating at effectively 100%. All the pipelines to take either crude or finished products are jammed full. There are no spare tankers or barges to get SPR oil or heating oil into the Northeast.

And the time it would take, even if these bottlenecks did not exist. to deliver extra heating oil to the Northeast would not occur until late November at best and the delay could last through sometime in January.

But all the bottlenecks are real, so the actual delay would be even longer. To counter these skeptics, the DOE announced they were speeding up the time when the contracts would be announced. (I do not believe the deadline of 10/4 to make the awards was part of the first announcement. But I might be wrong.)

There was also a growing skepticism throughout the industry that not enough industry players would even tender for this oil, though its terms were intriguing. If you got an award, there is no money to put up. All you have to do is give oil back next fall. And the 'best deal' would be decided by how much extra oil you agreed to give back.

Even on the morning of when the awards would be announced, the markets were filled with gossip that Richardson would end up with egg on his face when they could not find enough parties to even take free oil, since the system was so full it could not really address the problem of heating oil In the meantime, the heating oil problem was not getting better. It was getting increasingly severe. The heating oil problem which Clinton et al were wringing their hands about on Saturday, Sept. 16th was all bout low primary heating oil stocks.

In the entire East Coast were only 24 million barrels in primary stocks with no earthly idea what the stock levels were further down the delivery chain to the 7 million homes which need this for winter heat. (This number is for the reporting period ending 9/8/00 which would have been the latest information available when the White House meeting was held. ) This was a genuine heating oil crisis level by this date, as there were so few weeks left to get supplies in place before cold weather arrived in the Northeast. Once furnaces are turned on, heating oil stocks begin to decline.

Three weeks later, stocks have actually fallen by 500,000 barrels to only 23.5 million barrels on the East Coast compared with 48.5 million at same time last year. Winter weather is now too close by for there to be any way for heating oil stocks to get rebuilt before cold weather sets in. And worse, cold weather is now arriving in the Northeast. Various cities will see below freezing temperatures this weekend.

Back to the SPR plan. Despite all the rumors to the contrary, a beaming Bill Richardson announced on Wed. afternoon that all 30 million barrels of heating oil had been awarded. He did caution that heating oil was not "out of the woods yet, but there were lots of backs being patted that oil prices had retreated by $7 since the Clinton/Gore team devised this great plan.

On Thursday, the names of the 11 parties who got the government oil were released. The list included industry heavy weights like BP and Marathon. But it also names three entities totally unknown to any industry player.

The names were Lance Stround Enterprises, Burhany Energy Enterprises and Euell Energy Resources. Together, these three firms had been awarded the ability to take away from our SPR $300 million dollars, or 10 million barrels of oil. Moreover, they all got the high value sweet oil. In fact, they got about half of the sweet. A front energy story at Plattes Oilgram yesterday broke the first news of who these guys were. "Who are the saviors who will be turning oil into life-saving heat, the Platt's story asked.

Answer: three tiny firms with no apparent financial resources nor any experience in figuring out what companies like Exxon could not do. How to convert SPR oil into heating oil. (After all, remember that it was a heating oil problem which required our government to declare an emergency and decide to use 5% of our national insurance policy SPR oil in the first place.) A description of the three firms follows:

Lance Stround Enterprises is a one man firm located in the Harlem section of Manhattan. When Plattes called to interview Mr. Stroud, his mother answered the phone and said he was out "shopping for a letter of credit" for his new oil. He works as a grain dealer. This is his first experience in handling an energy deal. Nevertheless, he is now the proud owner of 4 million barrels of oil, assuming he can come up with a satisfactory letter of credit by next Wed.

According to the D&B on the firm, he expected total revenues for his grain trading of between $100,000 and $300,000 this year. With his new SPR contract, revenues will obviously soar!

Burhany Enterprises is also a small firm based on Cool Emerald Drive in Tallahasse, Florida. Like Stroud, there is only one employee, Ronald Peek. The only thing Plattes could find out about Mr. Peek is that he testified in 1998 at a Federal Reserve Hearing on behalf of a Florida Black business development advocate group. Burhany is now the proud awardee of 3 million barrels of our national security oil.

The final winner is Euell Energy Resources, located in Aurora, Colorado. Euell got the final 3 million barrels worth over $90 million. The company's website lists its business activities as "an integrated energy services company with operations that include natural gas and power marketing, diverse pipeline installations and construction management."

Mr. Euell spoke to both Platts and Oil Daily. He will apparently refine his SPR oil in "some of the refineries he holds stock in." He also said that his goal is to service the shortage of fuel oil for the East and the West Coast. (The DOE has failed to tell anyone that we might have a heating oil shortage on the other side of our country. I did not think this region even used heating oil.)

When Mr. Euell spoke with Oil Daily, he seemed to be changing his mind, as he said, "most of his oil would be turned into jet fuel or sold the electric utilities. (Perhaps this turned out to be what the refineries he is a stockholder in decided they wanted to do.)

These three firms now have contracts to begin receiving over $300 million of US government oil. They still have to post letters of credit by the end of business this Wednesday. Since a DOE contracting officer has to have made a "determination of responsibility" before the oil was awarded, I hope the same person is not assigned to check out the letters of credit.

The letters of credit will be tricky to create. Why? Because no body knows what oil will be selling for next fall, nor is there any assurance that these three individuals will even find someway to buy 10 million barrels, let alone get them back to the SPR. As to the financial ability of any of these firms, nothing is known from simply reading the Dunn and Bradstreet reports on all three.

The D&B on Mr. Euell does note that he went through personal bankruptcy in 1985 but also notes that all creditors were paid in full a year later. While Euell Energy is not Big Oil, is it 12 times bigger than the other two firms. It's D&B lists the firm as having 12 employees.

President Clinton told the press late Thursday that he was going to watch the heating oil situation like a hawk as it was critical to get this oil to the Northeast were it was needed. But early Friday evening, the Associated Press reported that Mark Mazur, acting head of the Energy Information Agency, announced that only about a third of the 30 million barrels of SPR oil will go to U.S. refineries.

The rest is apparently going to be sold into foreign markets, but Mazur said that they will "displace" 20 million barrels that refineries will not buy elsewhere. (I am not sure I understand this logic. Is the revised goal of the SPR to help lower our balance of payments or ease the logistics manager of a refineries job in lining up crude?)

If delivering only 10 million barrels of SPR crude to U.S. refineries becomes the final chapter of what was originally meant to save a heating oil crisis, it is worth noting that 10 million barrels of crude only translates into 800,000 to 900,000 barrels of high sulfur heating oil. On a cold day in the Northeast. this lasts about 12 hours or less.

It seems like someone has gone to alot of work and considerable security risk, given that these are SPR barrels, let alone financial risk that we never see a return of these swapped barrels, for a miniscule amount of heating oil that will show up to late anyway. The last part of this sordid story is "Thanks but No Thanks."

This was an article that was printed in the Oil Daily on the same day that Gore first suggested we should use SPR oil to solve a heating oil problem. According to the Oil Daily, a delegation from PDVSA, the national oil company of Venezuela travelled at their own expense to the Department of Energy just two days before Gore made this official first leak of what Clinton did the next day. They had been encouraged to make this trip by a democratic congressman from Massachusetts. They offered the DOE some of their storage terminals in the Bahamas to store heating oil which they would also supply from their refineries. (They were talking about real heating oil, and once it is in the Bahamas, it is only three or four days by tanker from ports in Portland, Boston, Providence or New York. How did the Department of Energy respond?

Thanks but no thanks. Our government believes that heating oil supply should be left to the private sector. (Did they mean the Big Three Oil firms: Stroud, Burhany and Euell?) This whole fiasco raises a laundry list of questions. Some need to be raised before our nation selects our next leader. The country will have to sort through a genuine energy crisis as the new Administration gets underway. A fiasco like this does not give me alot of comfort that Gore would leave us in really solid energy hands. I might be too harsh. Maybe a logical explanation for what now looks so weird will emerge. But it is time to start asking alot of questions and receiving alot of real answers. The story takes awhile to tell, but is worth hearing about."




TownCrier (10/09/00; 06:54:42MT - usagold.com msg#: 38610)
HEADLINE: Britons think euro entry 'inevitable'
http://news.bbc.co.uk/hi/english/uk_politics/newsid_962000/962951.stm
The Danish referendum aside, a recent opinion poll shows that by 2010:

61% of Britons expect to be using the euro, while only
26% think it to be unlikely.

Athough, in the near term, as soon as 2005:

52% of Britons do not expect to be using the euro, but
36% think they will.

Shermag (10/09/00; 06:50:30MT - usagold.com msg#: 38609)
Congratulations Sir Javaman
Well deserved! You echoed many of my feelings toward this excellent forum in words that were so much more eloquent than any I could assemble.

And many thanks to the good folks at USAGOLD for making this all such a success.

Shermag

wolavka (10/09/00; 06:48:34MT - usagold.com msg#: 38608)
little help
This is like pushing jello up hill.

TownCrier (10/09/00; 06:31:36MT - usagold.com msg#: 38607)
Hear ye! Hear ye! A select group of posters are invited to step forward to claim their precious metal!
The passing of this recent fortnight has seen The Tower actively engaged in many projects, certainly the most challenging of which was the process to review and distill the wide field of exceptional contest entries to those few recognized here. As a reminder of the stake, Centennial Precious Metals offered a quarter-ounce Uruguayan 5-peso gold coin as the grand prize, and tenth ounce gold bullion coins for the two runners up in this contest to celebrate the Forum's second birthday. The task to you, our visitors, was to either name the one specific development or event that would break gold out of its current price range, or else indicate the reason that you return to this Forum time and time again.

The difficulty of picking only three prize winners out of many, many insightful posts proved too great a challenge, so Centennial generously threw open its vault for the provision of additional prize metal for those that most closely contended for the gold. The big moment has arrived...

With the benefit of hindsight, we can now see that the contest for the grand prize was over as soon as it began. We are happy to announce that the Uruguayan gold coin is awarded to Sir JavaMan, who boldly offered the very first entry to the contest. In the final analysis, those of us judging this affair are all quite human here in The Tower, and Sir JavaMan's post appealed to our frail human emotions, allowing us to feel appreciated for our efforts involved in providing this website. Can you blame us? Just read these excerpts...

*****JavaMan (9/17/2000; 17:18:36MT - usagold.com msg#: 36853)
I, a USAGOLD "poster", keep returning to this Forum for many reasons. Among them are:
The fellow knights and ladies...who unselfishly share their wisdom and knowledge at the forum, and with an attitude of politeness befitting knights and ladies of the Table Round. Also, many of the values and views expressed at the Table are consistent with mine so there is a certain level of "like mindedness" to be enjoyed. Often, the discussions are an intellectually challenging experience and it is not uncommon to encounter a post that requires more than a casual or one-time read.

The Management and Staff...who have consistently demonstrated a high level of integrity in terms of how the forum is monitored. We have thirty words or more to articulate our reasons, but if I was limited to only one word, it would be "class". USAGold has class, which, first and foremost, is a reflection of the Management and Staff. As a result, visitors who recognize and appreciate this particular quality, find their chair at the Table to be a comfortable and rewarding one. Furthermore, they too offer an unselfish sharing of their time, knowledge, genuine concern, and accommodation both at the forum and behind the scenes - through email, for instance.

And now for some bullets:
The Web Site itself...there are no annoying advertising (especially animated graphics).
The twenty-four hour format...one hit provides access to all of the posts since the previous midnight.
The On-Line Offerings...where one can conveniently participate as their circumstances permit.
The Trail...the efforts of our Trail Guide / FOA do not go un-appreciated. Who IS that guy?
The Hall Of Fame...where the classic writings of such as ORO, Aristotle, and all the others can be easily navigated.

In summary, I would offer that USAGold (cyberspace gold) mirrors many of the qualities of physical gold: i.e. integrity, honesty, value, consistency, reliability, etc., etc.. Just as physical gold ownership provides a sense of confidence and peace of mind, USAGold and those who sit at the Table provide a similar experience by sharing knowledge, insight, and opinion that, likewise, promotes a sense of confidence and peace of mind. As physical gold is a true store of wealth, USAGold is a true store of informational and intellectual wealth. And its more than that, its a relationship.
These are the reasons I keep returning to the USAGold forum. Happy Birthday, USAGold and many happy returns!
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Thank you, Sir JavaMan, for making it all worthwhile. Our first runner up, Sir Tate, was awarded a tenth ounce gold bullion coin for his succinct yet entirely suitable and insightful commentary on the development that would break gold out of its price range. His post shows the key to be the physical market repercussions arising from mainstream exposure to the realities of the outstanding paper.

*****Tate (09/18/00; 20:31:12MT - usagold.com msg#: 36911)
... the one specific development or event that would break gold out of this price range, it would be run on physical metal. I call it HUNGER FOR GOLD that spreads around, caused by slowly rising worldwide inflation induced by currencies devaluation and meltdown that in turn would make impossible for FED and associated parties to continue POG manipulation.

[Now, check out this next portion of the post...a sound-bite statement that EVERYONE can understand...]
US Dollar inflation was already revealed in several ways.
Inflated US stock bubble revealed monstrous float of paper.
Rising price of Black Gold (oil) revealed falling paper value.
----------------------------------
Thank you, Sir Tate. Our second runner up prize of a tenth ounce gold bullion coin is awarded to Sir nickel62 for his important point reminding us to watch the international scene, and the powerful forces ultimately wielded by the masses beyond U.S. borders.

*****nickel62 (9/19/2000; 9:43:22MT - usagold.com msg#: 36953)
... the one specific development or event that would break gold out of this price range, it would be the realization that the value of the currencies of the European nations will be irreparably damaged by the continued acquiescence of their governments to the manipulation of the US dollar. This will be sparked by a resounding defeat of the referendum of the Danish people to accept the Euro and the realization that 300 million average Europeans do care about the value of their currencies being maintained even if their bankers and politicians do not. Politics will lead to changes in the movements of markets which will cause unforeseen events to undercut the ability of the US trading firms' computer models to continue to manipulate the game. Like all house of cards the game will then unravel in ways that no one can predict.
----------------------------------
Thank you, Sir nickel62. Honorable mention and a U.S. silver Eagle is awarded to Sir canamami for his insightful post along these same lines, though focused more upon the governmental side of international forces. An excerpt:

*****canamami (9/21/2000; 23:31:29MT - usagold.com msg#: 37161)
... the one specific development or event that would break gold out of this price range, it would be a material change in the embracement of gold by the official sectors (i.e., governments/central banks) of significant countries. In particular, this could be achieved by (a) a modest actual change coupled with a public announcement of the government's/central bank's new policy towards gold, or (b) a much more significant actual change, if that change were unannounced. For example, if the parties to the Washington Agreement announced that there now would be no further sales from those central banks, or if they announced the winding down of all leasing activities, this would greatly impact on the POG. The initial change in actual activity would be modest, but the psychological effect of the announcement would be significant. In a somewhat different vein, if the Chinese central bank started dumping massive amounts of dollars, said dollars being used to buy gold, but without an announcement of this new policy, the effect of the actual market activities would probably knock the POG out of its price range. ... In short, the official sector's policies and actions are the fulcrum upon which the POG turns.
----------------------------------
Thank you, Sir canamami. In this light, the very public Dollar-selling action of Iraq takes on special significance. Shifting gears again to the reasons we return to the Forum, we award a silver Eagle to Lady Leigh for a fine expression of the camaraderie we have all come to enjoy here at the "Round Table". A sample...

*****Leigh (09/20/00; 20:21:13MT - usagold.com msg#: 37075)
Why do I keep returning to USAGOLD? Because we're not afraid to take on hard topics here. In my day to day life, as I watch and talk with other people, I feel that they're living in a dream world that's about to collapse. I want to warn them, but I know my warnings will go unheeded (at best) or that I will be turned upon. I feel that I'm living in two worlds. One is the surface world of good times and buying and spending. I can function in it, but my mind is almost always elsewhere.

I crave the company of people who are living life in earnest. I want to sit at the feet of those more knowledgeable than I and understand why things are the way they are and whether there is a better way. At USAGOLD I find fellow searchers. The instant camaraderie we share is invigorating, and such a relief! At last I feel that I'm on terra firma, and the ironic thing is that the terra firma is in cyberspace! ... I always feel that I'm among friends here. Though some people would say we're only cyber-friends, we are all flesh and blood people only separated by the happenstance of life. Truly, our inner selves can shine through because we don't have to make allowance for our often clumsy exteriors.

Thank you, USAGOLD, for providing this lifeline to truth, wisdom, and friendship. This is far, far more than a gold site. It is an outpouring of people's hearts and souls.
----------------------------------
Thanks for the outpouring of heart and soul, fair Lady. We concur with your assessment. We also concur philosophically with the importance of the quest for education as expressed next by Sir Perplexed...education being the very essence of the Forum. For this, another silver Eagle is awarded as honorable mention. Some excerpts...

*****Perplexed (09/20/00; 01:27:18MT - usagold.com msg#: 37014)
I, a USAGOLD poster , , keep returning to this Forum because:
In my view, the beings created in the image and after likeness of God, were created to the role of information gatherer by means of experiences. In order to fulfill my function and advancement in the plan, I consider it my obligation to acquire the competence to, (as infallibly as possible) recognize truth. In a word-- EDUCATION.

We are literally awash in a sea of information, some correct, some erroneous, some erroneous by intent. For anyone with a true desire to know the answer to any question, the only requirements are an open mind and the willingness to invest the necessary time reading, compiling, analyzing, and correlating this glut of information. They must also be willing to examine, dissect, and if necessary, unlearn previous "truth". ... Because I recognize the limits on my time as well as education, and am not too proud to accept help from any of my present day fellow travelers, this Forum draws me like a bee to a honeysuckle vine, and a pirate to the Spanish plate fleet.

Because we have all acquired information, in a different, manner, under different circumstances, and even as different genders and nationalities, I am assured of acquiring a treasure trove of varying-- sometimes conflicting, (though not necessarily wrong) opinions, from which I may further my eternal goal. YOU GUYS AND GALS MAKE IT EASY. ... My heart felt thanks to all my friends on this Forum, especially to Michael and all the staff of Centennial. And to all you lurkers? They say that a stranger is just a friend that we haven't met. Looking forward to meeting you on the Forum.
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Thanks for your contribution, Sir Perplexed. This subject of education makes for a smooth segue to our final honorable mention award of a silver Eagle going to Sir Phoenix. Not only did his helpful lecture caution us about the proper valuation for a limited and depleting asset, it did so in a manner that was a joy to read. A sample...

*****Phoenix (09/20/00; 17:34:56MT - usagold.com msg#: 37062)
... the one specific development or event that would break gold out of this price range, it would be "DEPLETION." After a brief introduction, I will regale you with my theory. ... Myself, I remain a yeoman in many of life's intricacies as I find wisdom everywhere and from everyone I listen. I prefer it that way actually. Makes for an interesting walk. My history is of education in the oil patch as an engineer working for an independent oil and gas company in the shadows of the Rockies. However, there's not a day I don't enjoy getting my hands dirty, wielding a current day mace, a.k.a "Pipe Wrench" in one hand and a pair of "Channel Locks" in the other. If Arthur had used such tools, the grail may not have tickled his fancy so much, but I digress.

Since petroleum put coins in my bag, I study the future quite closely and come into contact with sources that garner keen insight on the true workings of the industry. In years past (i.e. pre oil-for-gold), I have always felt that the Middle Eastern countries were absolutely idiotic for not charging more for their finite supply of natural resources. This led me to the musings of ANOTHER at USAGold. The pieces of the proverbial puzzle finally made sense. Whilst we don't know if oil-for-gold is cast in stone, it remains the most logical and sensible conclusion. One a businessman like myself could appreciate. Since then, I've lurked for years on the board never truly needing to contribute. In that regard, the Black Blade is my compatriot in this castle as he does a robust job supplying energy news for consumption.

... Many of learned folks here know that a newly discovered oil field is a fixed size based on nature's whimsy. What you may not appreciate is that from the first day a well is drilled in an existing field or a new field, it's rate will decline from 2%/year to as high as 20%/year. That causes a well/field producing 1,000 bbls/day to drop to 980 bbls/day (2%) or 800 bbls/day (20%) a year later. That percentage is called the "decline rate," but the loss of the 20 bbls/day to 200 bbls/day is termed DEPLETION. (Take an average percentage and start multiplying the rates out a few years, and you can really see the dramatic impacts in even a few short years.) .... Most of the giant oil fields are fully developed in terms of wells and additional recovery methods. Their production rates are falling faster than even 10 years ago.

Onto today and tomorrow, now factor in crude demand growth of 2%/year from 76 MMBOPD to 92 MMBOPD in 2010. Then match it against 98% of current capacity utilized. Oh, and throw in the DEPLETION kicker of 2% to 20% loss for all existing oil production. The difference between demand and DEPLETION needs to be discovered and developed. Don't let your chariot hear these numbers, else its gas tank will gasp in terror.

... It's understandable why OPEC doesn't want the consuming world to know that the cupboard is bare in the future (they say it's a 800-billion bbl 80-year supply.) It's not in their current best interest or their long-term best interest to tell the truth regarding their oil. Simply wait till oil gets reset at a true equilibrium price. ... This "new reality" won't really hit until OPEC visibly starts losing production year over year at 2% to 20% ... This recognition of DEPLETION will dramatically revalue gold to its true equilibrium price (it will be well on its way by then.)

The gold price manipulation will end eventually as we wake up in a world without the oil to match our lifestyles and lacking the replacement energy resources. Time is on your side and DEPLETION is your silent companion on the journey.
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Thank you, Sir Phoenix, for reminding us that we can fool ourselves economically in the short term, but we can't fool Mother Nature in the long term. (And on a personal note, thanks for the Colorado School of Mines flashback. Go Orediggers!)

In conclusion, thanks again to all participants for making this event an overwhelming success! We're glad to have the archives stand in permanent testimony to the excellence of ALL the entries!!

For a final housekeeping note, prize winners are encouraged to e-mail Marie ( marie@usagold.com ) to ensure that we have the proper address for shipment of your gold and silver. And also, a final reminder goes to all first-time posters who submitted an entry for this contest. As promised in the contest rules, the first-time posters will get a Silver Eagle for exhibiting the bravery to break the ice. To claim your Eagle you MUST e-mail Marie with the Message Number for your post so that we can verify that this was indeed your first post at USAGOLD Forum. (Please no shenanigans on this. We'll be checking.) To qualify, the post must have been made during the duration of this contest...ending Friday, Sept. 22, 2000 at 5 p.m.

Canuck (10/09/00; 06:25:33MT - usagold.com msg#: 38606)
@ Steve H. @ Ross L. @ All
I have been following the 1 gm. gold/ 1 bbl oil discussion the last week or so.

Thanks for the comments; most interesting.

It appears that you guys have identified the disparity of late and the apparent role reversal; that is oil leading gold.

I have a couple thoughts and if I may pose a question.

Does it not seem possible that oil should lead gold during the economic cycle. As oil rises during robust times it then in turn causes inflation, economic peaking and finally a rise in POG?

Money chases investment yielding highest ROI, yes? Currency traders have bet the farm on the US$. It can be debated that the dollar is overbought, overvalued. Are oil producers simply aware that the dollars value is too high, consequently the POO has been racketed up to reflect this? Oil (let's call it a 'currency' for a moment) is inflated to match the dollar?

I recall FOA's recent statement, something along the line of, "... the rising POO has never been a supply/demand problem; it is recognition by oil producers of an inflated dollar.."

TIA,

Canuck.

SteveH (10/09/00; 05:13:35MT - usagold.com msg#: 38605)
RossL
Can you also extrapolate the x5x20 chart too?

Also, the 1gm of gold per bbl of oil obviously tracks, except we have broken out in 2000 from the standard deviation, which is obviusly an anomoly driven by an unusual market event, which I suspect to be the higher price of oil and gold's inability (for the moment) to track with it. This is as much an indication of unusual market event and supports circumstantially the manipulation of gold and/or oil.

It also tells us for the relationship to hold, gold and oil must rise together in lock-step. We can't have (under normal macro market conditions) a rising price of gold without a rising price of oil. Oil is now rising, creating this divergence from the norm. Gold will therefore sustain tremendous pressures the further the break out in oil. Whatever pressures of the past kept oil and gold in synch will be working against gold's divergent behavior. I suspect the greater the divergence, the greater the upward pressure on gold (or downward pressure on oil). This points back to the theory that oil and or gold can be driven by those who control oil and or gold. Either can be used as pressure on the other. Most of the time, gold appears to lead oil. It is different this time: oil leads gold.

SHIFTY (10/09/00; 05:09:50MT - usagold.com msg#: 38604)
JOE LIEBERMAN'S COUSIN FOUND DEAD... ( DRUDGE )
http://www2.haaretz.co.il/breaking-news/peace_process/329705.asp
Man's body found near Nablus; might be of missing settler
By Amos Harel, Shlomo Shamir and Ha'aretz Services

IDF troops discovered a man's body at the southern entrance to Nablus at about 7 P.M. on Sunday. The IDF is examining the possibility that the man is Hillel Lieberman, a settler from Elon Moreh who has been missing since Friday night.

The body has been transfered to the center of forensic medicine at Abu Kabir.

Hillel Lieberman is a relative of the U.S. vice presidential candidate Joseph Lieberman, according to sources in the Yesha Council of Jewish Settlements.

On Saturday, Israeli security forces opened a widespread search for Lieberman, 36, a resident of Elon Moreh in the West Bank and a father of eight. According to Israeli media, Lieberman was was last seen Friday, en route to a demonstration against the IDF's evacuation of Joseph's Tomb in Nablus.


RossL (10/09/00; 04:38:04MT - usagold.com msg#: 38603)
Grams Au per barrel of crude
http://home.columbus.rr.com/rossl/hbm.htm

SteveH, I changed the chart. Previously, I was using HBM's inflation adjusted data. I decided to ues real prices in dollars instead.

The gold price is divided by 31.104 to arrive at the dollar price for 1 gram of gold. The dollar price of crude oil is divided by the gold gram price. The result is what you see.

The final segment in red is an estimate of where we are today. It is not based on HBM's annual averages like the rest of the data is, so it may be misleading.



wolavka (10/09/00; 04:19:05MT - usagold.com msg#: 38602)
Okay
"The fly and the Mule."

Black Blade (10/09/00; 03:39:34MT - usagold.com msg#: 38601)
Going to be ugly on Wall Street this week, Petroleum will rise very nicely too.
Asian markets are getting ugly, petroleum is up across the board, and Au is up a buck.

Black Blade (10/09/00; 03:33:03MT - usagold.com msg#: 38600)
Israeli feared kidnapped in West Bank said to be VP candidate Lieberman's cousin
Source: Ha'aretz Services

Hillel Lieberman, a missing Jewish settler feared kidnapped and killed by Palestinians, is a cousin of U.S. Democratic Vice-Presidential Candidate Joseph Lieberman, according to sources in the Jewish settler movement in the West Bank. The senator has been apprised of his cousin's disappearance and is closely following efforts to secure his release, the sources said Sunday. Israeli security forces have opened a widespread search for Lieberman, 36, a resident of Elon Moreh in the West Bank and a father of eight, who has been missing since Friday night. Israeli media have said he was was last seen en route to a demonstration against the Israeli army's evacuation of the Joseph's Tomb shrine in Nablus. Hillel Lieberman's father, a rabbi, is a first cousin of the senator. There was no independent confirmation of the Palestinian Television report of his abduction and killing.

Black Blade: War for sure. Eye for an eye, tooth for a tooth.....



Black Blade (10/09/00; 03:31:06MT - usagold.com msg#: 38599)
Israeli feared kidnapped in West Bank said to be VP candidate Lieberman's cousin
Source: Ha'aretz Services

Hillel Lieberman, a missing Jewish settler feared kidnapped and killed by Palestinians, is a cousin of U.S. Democratic Vice-Presidential Candidate Joseph Lieberman, according to sources in the Jewish settler movement in the West Bank. The senator has been apprised of his cousin's disappearance and is closely following efforts to secure his release, the sources said Sunday. Israeli security forces have opened a widespread search for Lieberman, 36, a resident of Elon Moreh in the West Bank and a father of eight, who has been missing since Friday night. Israeli media have said he was was last seen en route to a demonstration against the Israeli army's evacuation of the Joseph's Tomb shrine in Nablus. Hillel Lieberman's father, a rabbi, is a first cousin of the senator. There was no independent confirmation of the Palestinian Television report of his abduction and killing.

Black Blade: Wae for sure. Eye for an eye, tooth for a tooth.....



The Invisible Hand (10/09/00; 03:20:21MT - usagold.com msg#: 38598)
Wall Street preview
http://finanzen.de.yahoo.com/
I'm not sure whether the Nemax 50 is a European or German kind of Nasdaq but it's losing more than 6 % for the moment.

wolavka (10/09/00; 02:51:23MT - usagold.com msg#: 38597)
97%
No brainer, pattern, chart, higher for dec gold. end of story.

SHIFTY (10/09/00; 01:54:22MT - usagold.com msg#: 38596)
Asia/Pacific & Europe
http://finance.yahoo.com/m2?u
Lots of red ink in the markets around the world tonight.

$hifty

Aristotle (10/09/00; 00:59:58MT - usagold.com msg#: 38595)
Hey there, Turnaround. It's good to know that Iraq has kept its humor while taking an important and symbolic first step.
The statement said that "the currencies which will be bought are the French franc, the German mark, the Austrian schilling, the pound sterling, the Dutch florin and the Italian lira".

The translation---

The statement said that "the currencies which will be bought are the euro, the euro, the euro, the pound sterling, the euro and the euro".

Simply grand. A policy statement that offers the display of diplomacy and comedy all rolled into one!

Gold. Get you some. ---Aristotle

Turnaround (10/09/00; 00:25:49MT - usagold.com msg#: 38594)
Iraq dumping dollars
http://www.voila.co.uk/News/afp/eco/001009051655.3h3wp1e2.html


BAGHDAD (AFP) - - Iraq's central bank has begun to buy
european currencies, following Baghdad's decision to
stop using the dollar, the INA agency reported.

The central bank said in a statement Sunday that it was "disposed to buying european currencies against their
equivalent in American dollars".
...
The statement said that "the currencies which will be
bought are the French franc, the German mark, the
Austrian schilling, the pound sterling, the Dutch florin and
the Italian lira".






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