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ARCHIVED DISCUSSION FROM 10/10/1999
All times are U.S. Mountain Time
View Yesterday's Discussion.
HLime
(10/10/99; 23:54:53MDT - Msg ID:16027)
Differing quotes
Well it looks like it could be MY black Monday.
Bridge has Ag down 3 coppers to $5.52 while Kitco
has it off to $5.40. 12 cents is quite a price gap.
I still HOPE that Ag gets to $650 by Friday.
HLime
HLime
(10/10/99; 23:09:09MDT - Msg ID:16026)
jaydeevee & cobra(too)
Do you believe in black Mondays? The gold shorts have had all weekend to
stew in their own juices and cry on their margin calls. Perhaps not
this Monday, but one Monday soon Oz will lead the charge. They are the first
to act on weekend news or building panic.
Cobra(too) - yes I am an Orson Wells fan.
Later,
Harry
Black Blade
(10/10/99; 23:04:35MDT - Msg ID:16025)
GT, my apologies for the errant info...
Yes indeed, kitco seems to be down. I have noticed that lately they have failed us. Maybe this may be partly due to the increased traffic. I don't follow their discussion group too aften as it seems to be more of a "free for all" mess. I continually look for additional gold sites with regards to recent PM price action. Do you have any sites to recommend?
Golden Truth
(10/10/99; 22:56:42MDT - Msg ID:16024)
KITCO DOWN!
Looks like Kitco's discussion or chat room is down also.
GOLD gets its biggest move in 20 years and Kitco chokes!
We're all Doomed! :-(
G.T
Black Blade
(10/10/99; 22:50:50MDT - Msg ID:16023)
GT and Bonedaddy
GT, I was mistaken by an errant chart. However, the kind folk here at the forum and elsewhere led me to a site where futures prices are available. Actually I knew of the site but had forgotten since I had used Kitco so often. Try http://www.mrci.com
Bonedaddy, Yeah, I dig that name. I just happen to be a collector of firearms as a hobby. I don't live in an urban area (thank God!), but I do hunt and fish often. When in SE Asia I had/have the priviledge to live with several families in villages in the country-side. You would be surprised how many AK's, granades and RPG's I have seen stashed near the farm lands, "just in case". I also have seen similar items in S. America. I suppose my question is, Should we be any different? and why?
Bonedaddy
(10/10/99; 22:40:33MDT - Msg ID:16022)
Blade
I too believe that total chaos is not likely. I also heard the news about Colt. Although I don't personally own any firearms, I hear things from friends in the gun culture. My friends say, "A man is not armed because he owns a gun, any more than a man is a musician because he owns a piano." Most firearms in America sit unused in closets or lockers. Fifty years ago, there were many less firearms per capita, and many more "shooters". I understand that the Samurai developed total mastery the staff and sword, the weapons of their era. Do you suppose there are any of those types left lurking around in the civilian population today? Scary thought for a bunch of bad guys, huh? Anyway, as far as the number of guns goes, I think there will be "enough".
Golden Truth
(10/10/99; 22:39:57MDT - Msg ID:16021)
TO BLACK BLADE
Where are you getting your spot prices from? Can't be from Kitco i don't know why they even bother, I say if you can't get it right, fix it, or leave it, but don't torture everyone else!!
So if you wouldn't mind could you please post your link for all our sanity! T.I.A
G.T
Black Blade
(10/10/99; 22:39:14MDT - Msg ID:16020)
Close out sale in the bargain basement!
It doesn't matter too much if POG goes down...It will mean that I can do more bargain hunting! Au and Ag at fire sale prices! This won't last for long. Fortunately I sold some tech stocks last week before they dropped, I think I will pluck a few flowers from the gold/silver patch this week. I will gladly trade one currency (FRN) for another (Au/Pt/Ag).
Black Blade
(10/10/99; 22:33:04MDT - Msg ID:16019)
Goldspoon.....oops!
Sorry, wrong chart! All the horses are hung up at the gate, in fact they are having trouble getting them out of the barn.
Golden Truth
(10/10/99; 22:31:08MDT - Msg ID:16018)
GOLD DOWN $2.75?
Looks like more selling of paper GOLD contracts.
SPOT NOW $317.50 :-(
I think they are slowly lowering the paper price as a way to grind us down $2/day and to not attract any attention by a sudden move back down to the $250/oz-$280/oz range.
As F.O.A said this is a paper price and could go straight down, oh well i guess it will be time to buy more then. :-)
When is the action going to start again? I say "Lets Get It On"
G.T
Black Blade
(10/10/99; 22:21:37MDT - Msg ID:16017)
Goldspoon
Horse with no name is charging out of the gate (+9.00) while the other horse appear to be hung up in their stalls tonight. We may have to wait until the Europeans take over the reins for the next leg down the backstretch, eh?
Black Blade
(10/10/99; 22:16:05MDT - Msg ID:16016)
all
It would seem that any severe collapse of society and the economy that gold and silver would be an acceptable way to preserve wealth over time. Perhaps storing food suffs and ammunition would be a good barter tool as well. Personally I don't see a "Mad Max" scenario here, but if one is concerned about this kind of scenario, then these items would appear to be the direction to go. Meanwhile I will continue to acquire PM's, stock, and physical goods.
SteveH, I heard a snippet on the news that Colt was going to suspend orders for personal orders of firearms at the end of the month. They announced a layoff of 300, all this due to the the lawsuits brought by local governments. Do you know if this is a growing trend? I still have several firearms, loading equipment and ammo about, even the evil "assault weapons", but it would be strange if most companies were scared off because of this. The 2nd amendment would mean little if firearms were unavailable.
Bonedaddy
(10/10/99; 22:15:58MDT - Msg ID:16015)
Leigh,YGM, and kindred
Your kind thoughts are like oil poured on those rusty little wheels turning in my brain.
Bonedaddy
(10/10/99; 21:58:54MDT - Msg ID:16014)
ET, Thanks for the post!
Your third point, that a bank run today is not the same as a bank run when money was backed by something, really hit home with me. What your message has made clear to me is that it will almost certainly have to be inflation in the price of necessities.
(While, it may mean deflation in the price of other goods.) I have read about countries where store shelves have been stripped of necessitities because the currency was losing power so rapidly that people bought what they could barter with. What happens when the Fed dumps $200 Billion cash into the economy because of percieved Y2K problems? Are people going to act rationally and just deposit the money back into their savings accounts? Will they buy stocks? No, I think they will rush out and by essentials until there are spot shortages of the items and then of course the prices skyrocket. If they were going to save the money, there would have been no need to distribute the extra money in the first place. I have understood that there would be a huge distruction of "wealth" if stock portfolios plummet in value, but this is not the household "butter and egg money". If "invested" dollars, which are currently salted away in funds and accounts, were replaced by only half of their value in circulation out on Main Street, the inflation could be awesome. Got Milk?
Chris Powell
(10/10/99; 21:52:14MDT - Msg ID:16013)
Who's hedged and who's not?
http://www.egroups.com/group/gata/249.html?
Milhouse says you have to know.
Gold Power
(10/10/99; 21:46:06MDT - Msg ID:16012)
Canuck; physical and unhedged
Canuck,
I'm with you on the mix between physical and unhedged mining shares. Personally, I'm a little light on the physical.
In the back of my mind, though, I have always thought that at some point, some of the profits from mining shares in a gold bull market would have to be converted to physical in case the entire social, economic, and political system imploded.
We've never had to face that problem before, though. But if the ANOTHER scenario comes true, we probably will.
To quote ANOTHER: "We watch together, yes?"
Gold Power
Gold Power
(10/10/99; 21:40:54MDT - Msg ID:16011)
We have lost
Mr. jinx44,
Your conclusion on our current situation saddens me. I would have a hard time living if I thought that "we have lost" and that we are consigned to go through the rest of our lives, and that future generations are also doomed to the same fate, with liberty and freedom beyond our grasp.
Let's look at things another way for a moment: It appears to me that the socialists have lost. You might recall James Davidson's perspective in The Great Reckoning that the side of the socialist coin that allows no one to advance, the Communists, had fallen and now the side of the socialist coin that allows no one to fail, the American welfare system, would follow in its footsteps.
His timing was off, like many of us. But it appears time now for his perspective to come to pass.
It is the statist, socialist perspective that is about to be handed its just desserts.
The problem in the Soviet Union was that the people were such slaves in their hearts and minds that when they received the opportunity to construct a new and better society than the one just fallen, they didn't have what it takes.
I am hopeful that the collapse of the paper-money system of dishonesty and corruption will give some of us the opportunity to build a better system in its place.
I can never give up hope. I can never concede that "we have lost." The other side must win every time. We only have to win one time.
Thanks,
Gold Power
jinx44 (10/10/99; 20:49:23MDT - Msg ID:16008)
Goldseek and the tyrannies
I admire your cheery attitude about the future. I am at a loss to explain or understand your rationale that the phenomenon of "economic upheaval will usher in a series of tyrannical, socialist states" will not transpire. We are already there and we don't even know it. This current government in the US has no intention of allowing any meaningful freedoms to exist. Panem at circensum at all costs. We have lost.
Chris Powell
(10/10/99; 21:27:41MDT - Msg ID:16010)
Milhouse on prospects for hedged and unhedged
http://www.egroups.com/group/gata/249.html?
It's important to know who
is hedged and who isn't.
canamami
(10/10/99; 21:04:39MDT - Msg ID:16009)
POG -$319 - POS -$5.53
MCRI shows a continuation in the recent, relatively modest weakness in both gold and silver. Any idea what has caused the loss of momentum? I know it's minor, given the huge run we've had, but it would be good to see a resumption in the rally, notwithstanding the changes in margin, etc. How the game is rigged?! Why were there no changes in margin requirements when the shorts were nailing the POG to the wall?
jinx44
(10/10/99; 20:49:23MDT - Msg ID:16008)
Goldseek and the tyrannies
I admire your cheery attitude about the future. I am at a loss to explain or understand your rationale that the phenomenon of "economic upheaval will usher in a series of tyrannical, socialist states" will not transpire. We are already there and we don't even know it. This current government in the US has no intention of allowing any meaningful freedoms to exist. Panem at circensum at all costs. We have lost.
Canuck
(10/10/99; 20:02:27MDT - Msg ID:16007)
Goldpower
I am roughly 33% physical, 33% gold mining stock and 33% cash.
I like FOA's theories, the process seems conceivable; I am not 'in the know' well enough to debate. I'm running with the idea to a degree.
I like the 'unhedged' concept as well. The $30,000/oz. asset
in the ground bears little concern to the price of power. If
production goes up from $175/$200 per onze to $500/$1000 per onze who cares? It seems to me that if I have a 'piece of the action', that is, shares in a mine with thousands of onzes with no 'lien' I'm in good shape.
Comments.
Gold Power
(10/10/99; 19:50:22MDT - Msg ID:16006)
mine nationalization; global tyranny
gidsek wrote: "A part of the "all gold paper burning" scenario is if I understand ANOTHER/FOA correctly is political risk. In a new era in which gold backs currencies mines would be nationalized or taxed to death."
I see. Well, if that happens then the shares of the mining companies will become worthless if the holders are not indemnified by the new governments.
We have takings' laws in the U.S. Whether or not they would apply is still open for debate.
I do remember ANOTHER saying something to the effect that this nationalization would happen. He said that's why Australia could sell its gold.
Of course, what he's predicting is that the coming economic upheaval will usher in a series of tyrannical, socialist states throughout the world wherein liberty and property are confiscated by the state at will and the individual is left with no rights.
I don't think such an event can accurately be predicted. Many have tried such a thing, but have failed.
I see something else resulting from the financial carnage about to unfold:
I think we'll see a tremendous growth in the number of countries in the world; and the country will be defined by its ethnicity and religion -- the very things the New World Order hates about countries.
What I see coming is a failure of global socialism and tyranny, and the reimposition of nationalism and a checkerboard of economic and legal sytems throughout the world.
Such is the power of gold.
Gold Power
Gold Power
(10/10/99; 19:38:38MDT - Msg ID:16005)
Chicken Man
Chicken Man,
I think your statements are an argument in favor of my perspective.
You have mentioned the $500 level as one at which gold could not be mined economically. But the discussion here has pegged the ultimate price as so far above $500 that the level becomes irrelevant.
The issue is one of relativity. If the price of oil goes through the roof, gold will go with it.
It's the dollar that will tank; this is what FOA wrote earlier today.
The fact remains that there will always be a mining industry. If/when the dollar collapses, the relative value of gold will remain a constant.
It is now being unshackled from the paper trap that was laid for it. Gold will soon reestablish itself at the center of the economic universe.
Gold mines will be much more profitable -- relatively speaking -- than they are today.
The thing that will have to happen for gold mines to lose their value is for political systems, like the U.S. and Canada, to be destroyed and replaced with either nothing of substance or new political entities that do not hold the previous legal systems or contracts as valid.
Thank you,
Gold Power
gidsek
(10/10/99; 19:36:20MDT - Msg ID:16004)
Gold Power
A part of the "all gold paper burning" scenario is if I understand ANOTHER/FOA correctly is political risk.
In a new era in which gold backs currencies mines would be nationalized or taxed to death.
gidsek
Journeyman
(10/10/99; 19:34:52MDT - Msg ID:16003)
Al Fulchino: GOLD & SILVER TRADE ARE ALMOST IMPOSSIBLE TO SUPRESS
"It [the French ruling body, the National Convention]
decreed that any person selling gold or silver coin, or
making any difference in any transaction between paper
and specie [gold and silver coin], should be imprisoned
in irons for six years; that anyone who refused to
accept a payment in assignats, [paper money not
convertable to gold or silver] or accepted assignats at
a discount, should pay a fine of three thousand francs;
and that anyone committing this crime a second time
should pay a fine of six thousand francs and suffer
imprisonment twenty years in irons. Later, on September
8, 1793, the penalty for such offenses was made death,
with confiscation of the criminal's property, and a
reward was offered to any person informing the
authorities regarding any such criminal transaction. To
reach the climax of ferocity, the Convention decreed,
in May 1794, that the death penalty should be inflicted
on any person convicted of "having asked, before a
bargain was concluded, in what money payment was to be
made." -Fiat Money Inflation in France by Andrew
Dickson White, p. 109..................
.................................................................
None of these measures prevented people from trading using gold
and silver, and finally on November 13, 1793, the National
Convention , under terrifying penalties, closed the metals
exchange. The only way trade in "hard money" can be surpressed is
to make the hard money unavailable, which is why Roosevelt in
cahoots with the Federal Reserve Corp. stole our ancestor's gold.
Why are people so insistent on getting solid money for trade. The
vendors in Mr. Fulchino's examples MIGHT respond quicker to guns
than gold, but gold is the safest and best bet.
Regards, Journeyman
Whacked
(10/10/99; 18:57:55MDT - Msg ID:16002)
Gold & Power
http://www.usagold.com/cpmforum/
Power is a constant if you go by the historical trends - it is not a variable and should not be treated as such. Diesel is the prime component, at present, in the manufacture of electricity at minesites and mills. This is slowly changing in Oz to natural gas with the installation of a natural gas pipeline from Dampier through the Kalgoorlie.
Efficiency is a prime component on the Oz mining scene and the limitations that diesel present are already built into the equation. Remember that Oz leads the way in low cost production. The world generally wakes up eventually!
Journeyman
(10/10/99; 18:57:37MDT - Msg ID:16001)
ALALN GREENSPAN PUTS Y2K BANK FAILURES, G NORTH SCENARIO IN PERSPECTIVE
"The trouble is that there is a perversity of incentive in
this type of problem in that you can be extremely scrupulous
in going through every single line of code in all your
computer operations, make all the adjustments that are
required and get essentially a system, whether you're a BANK
or an industrial corporation, and say 'we've solved the 2000
problem,' and then find that when the date arrives, all the
interconnects [to other (banking) organizations] that
are now built-in start to break down. ...YOU CAN END UP WITH
A VERY SMALL NUMBER OF NON-COMPLIERS AND HAVE A VERY LARGE
PROBLEM." ...I mean for example, WE HAD A VERY MAJOR BANK IN
THE CITY OF NEW YORK A NUMBER OF YEARS AGO -- COMPUTER WENT
OUT. AND THE NEW YORK FEDERAL RESERVE BANK HAD TO LEND THEM
OVER 20 BILLION DOLLARS OVER-NIGHT. Now if we [the Federal
Reserve] weren't there, I can tell you that the system
would have been in VERY serious difficulty. So part of what
we're trying to do is figure out what we can do to assuage
whatever problems might arise. And it's a difficult exercize
because there's such a huge element of uncertainty in the
nature of the problem itself, but we're trying to come to
grips with it the best we can." -Alan Greenspan to Senate
Banking Committee, 25 Feb 1998 [caps & bolding emphasis
added.]
Regards, Journeyman
Gandalf the White
(10/10/99; 18:42:19MDT - Msg ID:16000)
Jump SPOT ! -- Jump!
Ok --- Au is now taking off ! Wakeup Spike Goldfly ! OR is he off with Eura ?
<;-)
Chicken man
(10/10/99; 18:37:26MDT - Msg ID:15999)
Gold Power @ Gold and Power....
Nice thoughts......I can see only one factor that you might be overlooking......in all your pencil pushing the price of "power" remained a constant.....Power is a large part in the process of finding one ounce of gold in a semi trailer of rocks.....all these rocks have to be crushed to very little rocks so the chemicals work......this whole process to get one ounce uses a lot of power(electricity,desiel fuel, etc)
If the price of energy goes up (doubles),would not that make some of those reserves to expensive to mine....? the day may come when mines can not make a profit @ 500....
SteveH
(10/10/99; 18:34:35MDT - Msg ID:15998)
Goldspoon
I'm on it. Thanks.
Steve
jaydeevee
(10/10/99; 18:18:13MDT - Msg ID:15997)
OZ calling! this volatility is killing me!
http://www/usagold.com
This morning & a few days ago, I posted that in Australia, I believed Acacia Resources was the best of the little-hedged gold stocks. I watched and puzzled as its share-price tumbed over the past few days as POG held! On Friday the share price closed at $2.66. This morning, ANGLO somethingorother has issued a takeover bid valued at some $3.30. At last,
the market seems to be distinguishing between hedged & unhedged producers. YIPPEEEEEEEEEE!!!!!!!!!!!
Goldspoon
(10/10/99; 18:18:01MDT - Msg ID:15996)
Steve H
http://www.mrci.com/qpnight.htm
The markets are trading futures for Mondays US markets open.
Here is a neat link
SteveH
(10/10/99; 17:53:08MDT - Msg ID:15995)
Dec gold now...
$322, up $.30 in overseas trading.
Are the markets open Monday in the US?
Goldspoon
(10/10/99; 17:53:00MDT - Msg ID:15994)
**Leigh...FOA***
You asked me...What are you saying -- that he's going to make a big spurt forward soon? Do you have a time frame? Will Golden Sun and Silver Moon overtake him, or will he stay $100 ahead forever? Glad you're back!!
****After going through the desert on a Horse with no Name...i heard this from his mouth.... Platinum is being set up as a tool to push gold to the $400+ level and kill the shorts at $390 DEC....How? by first locking the back door on platinum (raising the lease rates to 75%) while at the same time selling into the spot market on platinum to hold the price down. Now that the platinum shorts are trapped inside the house, set it on fire by buying platinum heavily....WHY?? Platinum is a thin market and can be easily manipulated in this way...Why?? to cash in on the Gold Market...Say What?? ... A huge price run in platinum would stampeed the whole herd... Thus set fire to the tender dry brush of gold and force the shorts of DEC $390 to cover.....CLEVER NO? ....The Platinum end game Gambit brought to you by those clever Swiss Gnomes...and European alies.....Think now... remember how platinum acted before gold began to move...and how gold moved just before the big anouncement??? Why has the platinum lease rate skyrocketed while the prices of Gold, Platinum, Silver has tracked sideways??.......
Just Remember Where.. you first read this....
****Leigh.. Gold Sun is the Star of this Show!! The fate of the worlds economy rests with the fate of Gold Sun in this race!!
**Now for the next leg of the race....Horse with no Name has been loaded into a Circus Cannon with me on his back...and is about to be launched swiftly ahead in this race!! When??
October 1999 on a Monday morning 3:00 AM USA eastern time...(when the platinum markets open in Zurick)....(tomorrow morning?)...
This will be the next shot in the Great Gold Wars Of 1999..and will start a World Economic War... The fate of Horse with no Name and Silver Moon will be tied to the fate of Gold Sun after that....If Gold Sun wins the WAR then Horse with no Name will enjoy his Moment of Glory in second place with Silver Moon Third.... If Gold Sun does not win the war then all three will be losers with Gold Sun... DEAD last.....
***Good Luck FOA!! ....ride as the Wind!!!
Al Fulchino
(10/10/99; 17:06:32MDT - Msg ID:15993)
SteveH/Thanks for #15968
I have a couple of scenarios for readers to think about.
#1 Man has accumulated gold for trade in case of extreme political and economic turmoil. He approaches a vendor of food, with his *money*. The vendor says, "tell u what will you trade me something I need such as gasoline or clothing.Don't need your gold maybe some other time. Thank you."
#2 Man offers gold to a vendor in times that are not as bad as the first scenario, but currency has been revalued and precious metals DO have an audience, since political environment is safe, and the vendor KNOWS that IF he takes your gold in exchange, he will find an audience for that gold to make other purchases. So you have a deal.
#3 Either of the first two scenarios prevail, this time you also offer gold, he declines and asks for some trade....you pull out your gun and say "bullets for your bread", he says
yes or no depending on his courage or whether he has a gun and is faster than you.
Always! Always! Always! Guns beat GOLD, especially when moral authority is on the side of the gun owner. So while we pray for safe political times, we never know, and cannot play it too safe.
Got your guns????
RossL
(10/10/99; 16:46:03MDT - Msg ID:15992)
The winds of change
Bill Murphy sez:
"I do not know exactly how all these deals work, as they
are very complicated. But I can't believe that a
responsible CFO of a gold producer could make a
statement like this. If I owned Barrick shares, I would
freak out."
Jim Ray sez:
"'As everyone on this list is surely aware, there is a
screwy situation in the precious metals (especially
gold) markets. The published spot price for gold does
not seem to be the market clearing price for actual
physical bullion. The prices published in the financial
press are for PAPER gold -- that is, for promises
purportedly payable in gold. But anyone who attempts to
buy large quantities of actual physical bullion for
immediate physical delivery/allocation is likely to be
stonewalled. From our vantage point it appears that
there is already a de-facto holiday involving the gold
bullion banks. Slow delivery and rationing differs
little from explicit default.'"
When I read this, I'm getting the same feeling that I had
that one day a few years ago. That day I read in the WSJ
about the geologist from BRE-X who "accidentally fell"
from a helicopter.
These are the marks of a sea-change in the market.
CoBra(too)
(10/10/99; 16:41:33MDT - Msg ID:15991)
@HLime - is your handle derived from the "3rd. man"
If yes, you may know postwar Vienna very well- though mostly from the underground or better sewage system (I don't mean it in any derogatory way) - It was a great flic - and if you believe in the land of OZ (again dow under)to further the golden case - please don't: Read again the Vancouver mystery of Midas (Bill Murphy)trying to meet up with Mr. Champion de Crespigny CEO of Normandy, the 'well' hedged # 1 producer of OZ for AU oz's, who didn't feel the urge of discussing his co's position in a more positive PoG scenario - at this particular point ( as an afterthought, maybe the champion of the cretin's can at least show some generosity and reemburse
Bill M. for his troubles) - As another afterthought, his companiy's margin calls won't even alllow him this kind o kind generosity.`
@FOA - @ABX - I've stated my feelings and analysis towards P.M.'s (sorry Peter Munk's) Co. as being a hedge fund - happily bedding down with the BB's (Best Bets - now Bovine Beasts)- 13.5 moz short! leased! forwarded! sspot deferred! or whatever you guys call your "premium option strategy" - IMO, PLEASE EAT YOUR CAKE -but leave some of the cream to your -frustated- shareholders.
I've said that before, but I do fear it is too late to even contemplate this outcome, as I suspect Peter's company is long reposessed by his friendly BB's. If that's to strong a postulation I'd be happy to argue about certain and other facts - with pleasure, but still facts!
Die Moral der Geschichte - don't ever again trust hedgers, cretins (-no, not Chretiennes- either,- beside the point) and under no circumstances ever trust CNBC - except as the leader of contrarian (NO- Maria Bartolomo) opinion.Heavy? N0 metal! Virtually yours CB2
Goldfly
(10/10/99; 16:26:58MDT - Msg ID:15990)
Hnnnnnn....Hnnnnnn......HNNNNnnnnnnn
Hey Spike! What is it boy? What are you looking at?
Hnnnnn....Hnnnnn
OOhhhhh, yeah. That new dog that moved in down the street. A Golden Retriever.....
Hnnnnnn....Hnnnnnnnn.....Hnnnnn
Spike, do you mind? You're drooling all over the windowsill. Let see..... Eura, I think her name is. Hey Spot! Don't you want to see? Quite a dish!
Ooorrrrooopht!
Eh? Well no accounting for taste, that's what I always say. Hey Spike, want to go for a walk? Hey?
Haahaahahhahhhaaahaaaha......
Yeah I thought so. How bout you spot?
Ooorrrrooopht!
Alright then, but remember, I'll have to tie you up in the back yard..... You know how those Bear children love to tease you through the fence when you're tied up!
Come on, Spike. Let's go!
Spot, somnambulistic. $319.70
Gold Power
(10/10/99; 16:06:21MDT - Msg ID:15989)
Gold in the Ground
I want to distinguish between types of paper gold because I think the shares of mining companies are getting short-shrift in much of the discussion here.
When you say "paper gold will burn like other paper investments," I can understand that in relation to futures, options, and other paper-gold derivitaves. But the shares of a mining company that owns gold in the ground is in a much different category of paper gold, in my view.
Shares of a mining company represent ownership in the mine and the gold the mine contains.
If the financial system of paper, fiat money blows up and disintegrates, this doesn't necesarily destroy all contract law. The shares of the mining company will still represent ownership in the mine, unless there is complete societal disintegration and the legal system is completely overthrown.
So stocks are a much different type of paper than derivatives.
I don't know exactly what the end of the highly leveraged fiat money system will bring. But let's suppose for a moment that society and civilization remain in tact. After all, society and civilization pre-date leveraged deriviatives. I imagine it will still be here after they are gone.
So gold settles at $30,000 an ounce. We don't know what other things will cost at the time, although we do know the relative value of an ounce of gold -- figuring its cost of production -- versus other items that people use in their lives.
There will still be a need for computers, automobiles, military equipment, furniture, housing, food, etc. The figure of gold at $30,000 per ounce is a statement about what will happen to the dollar, more than it is about what will happen to the mining industry.
There will still be a mining industry. The companies that own gold in the ground will have a commodity of great value. The shares of those companies, which represent ownership will also be a thing of great value.
The situation today is that the paper-money system, with its leveraged derivatives have given the perception that gold is unnecessary for a modern economy. $30,000-per-ounce gold means the paper-money derivative system has been destroyed and that gold is no longer unappreciated or under priced.
It has resumed its rightful place at the center of the economic universe.
So I think shareholders of companies with reserves of gold in the ground are sitting pretty. The market still does not believe the current upmove.
Go back a few years when gold traded around $380-$390. Reserves in the ground were capitalized for around $70 per ounce. When gold sold for around $280 earlier this year, there were a couple of company buyouts, where the buyout price came in at around $25-$30 per ounce.
With gold at $450, it would seem reasonable to value gold in the ground at $100 per ounce. So if a company had two million ounces of gold reserves, its market cap would reasonably be measured at $200 million.
Even at today's price of $321, it would be reasonable to value gold in the ground at $40 per ounce. Still, many companies on the Toronto Stocks Exchange are selling for half of that amount or less.
They can be picked up for pennies on the dollar of their intrinsic value. And if you believe gold will move higher, the value of the shares has nowhere to go but up.
Whatever replaces the dollar, the value of the companies with gold in the ground will be real and will be highly valued when gold is no longer artificially held down by the perception of success for the paper-money system.
So I can't buy into the theory that physical gold is the only way to go. Shares of mining companies with gold reserves will do quite well as well.
Gold Power
jaydeevee
(10/10/99; 15:49:16MDT - Msg ID:15988)
Aussie reply to HLime
http://www.usagold.com
In Aussie & Asian trading last Friday SPOT dropped all day. SPOT recovered in N.Y. , but did not hold up in the last few minutes of Comex trading on Friday night & finished down $2-30; though, luckily, still finished at $320. Still that $2-30 drop does nothing for sentiment here in OZ on this Monday morning. Gold shares in Australia, across the board, and in quality Aussie 'little hedged' mining companies continued their fall of the past few days. The way these shares have fallen, you would start to begin to wonder where 'the bottom is?' ; and you'd believe that POG was more around $285 rather than $320. It's SO STRANGE to see POG holding and quality 'little-hedged' mining shares continue to fall. On what basis do you believe? hope? that we Aussies can 'give 'em hell'? This is a serious question. Welcome any confidence inspiring replies.
HLime
(10/10/99; 14:36:11MDT - Msg ID:15987)
Two hours till showtime
G'day Aussies, give em hell.
Go silver go. Lets do $6.50 by Firday.
Harry
elevator guy
(10/10/99; 13:07:26MDT - Msg ID:15986)
post follies
That first post didn't go through, so I re-posted, and re-worded, hence the redundancy.
elevator guy
(10/10/99; 13:05:43MDT - Msg ID:15985)
A question for FOA
First, let me say, that from your insights, it is clear to me that the only place to stand against the downstream devaluation of the dollar is with the rock of real physical gold ownership.
Now concerning the "salmon" of leveraged investments, gold stocks, jumping upstream with "7 league boots", am I to understand that Gold Fields is uniquely positioned to weather the onslaught of dollar devaluation, due to some bullion holdings?
Or am I delusional, thinking that any paper investment could outperform gold, as the rug is ripped out from under our world of financial instruments?
Thank you!
elevator guy
elevator guy
(10/10/99; 12:56:44MDT - Msg ID:15984)
A question for Mr FOA
Does Gold Fields have a better prospect of weathering out the coming shift towards the Euro, and devaluation of the dollar, because they hold bullion? Did I hear that right?
FOA
(10/10/99; 10:44:17MDT - Msg ID:15983)
I'm sorry, I'm trying to run out the door!
ALL,
If you want to learn something about ABX, just read Bill Murphy's below. What an eye opener!!!
Gone now FOA
FOA
(10/10/99; 10:41:57MDT - Msg ID:15982)
(No Subject)
ALL,
FOA
(10/10/99; 10:41:55MDT - Msg ID:15981)
(No Subject)
ALL,
FOA
(10/10/99; 10:41:53MDT - Msg ID:15980)
(No Subject)
ALL,
FOA
(10/10/99; 10:41:51MDT - Msg ID:15979)
(No Subject)
ALL,
FOA
(10/10/99; 10:41:51MDT - Msg ID:15978)
(No Subject)
ALL,
FOA
(10/10/99; 10:40:41MDT - Msg ID:15977)
Comment
Chris Powell (10/10/99; 10:16:02MDT - Msg ID:15973)
Hello Chris,
What a great read from Mr. Murphy! Ph is right, all trails lead to the same end! thanks
elevator guy
(10/10/99; 10:30:44MDT - Msg ID:15976)
@aunugget
Barrick (ABX) is 100% hedged, but they say they have the option of deferring for 15 years, if the spot price is good, as so they can profit from the increase in the POG in the interim. See FOA's post below, to learn the fallacy of their claims.
To all experts here, please forgive any innacuracies.
aunugget
(10/10/99; 10:22:44MDT - Msg ID:15975)
Barrick Gold
Have any members determined what the total forward sales/dirivitives are for Barrick Gold? Ist time user.
Thanks,
GW
FOA
(10/10/99; 10:19:23MDT - Msg ID:15974)
Comment
ALL,
One last thing then I'll be away for a while.
I often hear about ABX having hedged with "spot deferred contracts" that allow them to defer the delivery of gold to cover. Perhaps for ten years! During this time they mine and sell gold at whatever high price comes along.
One thing they never offer is how they are going to cover their additional margin (do they need margin??) as these contracts are deferred. Are we to believe that the gold lenders are just going to sit back and allow the company to sell off gold in the thousands, making tons of money as they deplete their reserves? I don't think so! I would think that all the money ABX could make would be needed needed to cover margin in a big gold rise?? In addition, in the event of market disruptions (read that long term market shutdown) real gold would be "forced diverted" by the lenders to cover contracts. And let's not even think of the massive "inflationary" price pressures a dollar decline would bring to the operating cost of their US based assets. Just something to consider while we are "On the
road...."?
Good luck this week,,,,,,,,,,,,,,,,,,,,,FOA
Chris Powell
(10/10/99; 10:16:02MDT - Msg ID:15973)
A vengeful gold has come back from the dead
http://www.egroups.com/group/gata/247.html?
Latest "Midas" commentary
by GATA's Bill Murphy.
AEL
(10/10/99; 10:13:05MDT - Msg ID:15972)
ET: banks, money, etc.
Agreed, largely. The G North scenario is unlikely.
But his scenario is only one of several ways in which a massive evaporation (or huge intersecting delays/screwups) of electrons might take place -- stock market crash, bond default, y2k-related glitches, etc.
"The Fed can reliquify an institution with the stroke of a pen." ---- yes, assuming that telecommunications, electricity, etc., etc., are all working normally or near-normally, which is likely, but far from certain.
"although most banks use computers, they are not necessary for the bank to perform its main function, the clearing of commercial transactions. The banks can process checks and plastic by hand if necessary, just like they used to, although at a relatively slow pace when compared to today." ---- if banks were so crippled (and that WOULD be a crippling hit, to have to go back to manual like that) then all the more reason to believe that physical cash would have a BIG premium over bank-mediated transfer.
"There is really no reason for banks to close other than if their employees can't get to work or civil unrest makes it difficult to operate." <---- neither of which is all that difficult to imagine (in my twisted imagination, at least!)
"If either of these events were to happen over a long period of time. I would posit that all fiat, whether electronic or physical would have little value in commerce
because it carries no intrinsic value with it and would no longer represent a promise to pay." ---- agreed. The key phrase is "over a long period of time". I think that period would have to be 6 months at bare minimum, and that physical cash would likely have greater longevity than virtual bucks. Also, we gold-hearts must keep in mind that neither does gold, ultimately, have "intrinsic" value; its value is extrinsic, existing in perception as money (like greenbacks) -- objects which can be exchanged for things of use value -- rather than the (use-value) things themselves.
I am simply saying that the extrinsic value of greenbacks (the concerted, persistent perception of value across populations of 100s of millions of people) has a degree of momentum... less than gold, more than electrons.
"It seems to me the issue is not the return of any depositors money because that can be guaranteed, but what that money may purchase in the marketplace. The issue with a bank run today is the 'perception' of one losing his money, TV images of lines in front of banks, and a general loss of confidence. They are all perceptions of trouble when actually no trouble exists because the banking system can give you your money, guaranteed, because they are the ones that manufacture it." ---- they can give everybody all the greenbacks they want, whenever they want them? no way! not even close! that is, without an all-out 24x7xmonths effort to print scads of 100s and other big denominations.
"What they can't guarantee is purchasing power. A bank run of today would manifest itself as a run away from the banks and their fiat to hard assets." --- yes, and again, I look at physical currency and clad coins as a sort of semi-hard (firm?) asset, and one that could come in awfully handy in the (rocky and no doubt fitful) transition to a real money system.
FOA
(10/10/99; 9:54:23MDT - Msg ID:15971)
Reply
Neo (10/10/99; 7:34:08MDT - Msg ID:15966)
A question for FOA
On your proposal for Gold to reach $30000, could you please give me a value in Euros, which you feel Gold could reach.
Hello Neo,
I use this big gold figure because that's the best reference to understand just what the dollar is going to do. Another's group understood this some time ago and projected a trend line into this area. Basically the concept stated, in gold terms, just how far the world trading/economic system would withdraw from using dollar reserves. Obviously, it will take some time and a grinding realignment to reach anything in that level. Never the less, it has now started and will initially run into the thousands before anyone knows what happened. All currencies (the Euro included) will fall against gold at first. The turmoil will be too great to suggest otherwise.
The big difference in the Euros favour is that they are a closed economic system. Their economy can work running a trade surplus or a neutral position. Initially, any increase in gold reserve values will balance their new "financial" exports as the the crisis creates a run to hold Euros. They will not be exporting inflation, as the US does, rather external foreign holdings should balance increased gold reserves. Especially as they cover some of their portion of gold commitments by paying out currency or issuing treasury debt. This is the real reason gold will initially rise so quickly, this massive reserve build-up is exactly what will make the Euro work as the world's reserve. Instead of
selling debt based upon the taxing power of the state as the US has done for so long. Instead of trying to hold the dollar price of gold, the ECB will let the Euro price run. There is no need to worry that gold will drive out the currency from use as we have become too advanced to operate without a digital settlement. That function alone creates a new "value" function for paper currencies that never existed in days gone by.
Today, one can hold a Euro account at any Euro bank. It's there now for the taking. True, gold will outrun this currency, but even major bullion holders still must hold a digital currency for trade. And by the very nature of the present market, not everyone can own bullion to the full extent of their holdings. Physically, it can't happen for years (or until gold hit's the high numbers above). Most
big hedgers will own "allocated" gold and Euros, waiting for whatever mix their remaining " Euro paper gold" will be paid in (in a year or so?). We can all expect gold to be broken into very small trading vehicles as it's price rises. I doubt we will ever use it in actual trade outside the Middle East Dinar arena. Yet, even there paper money will still be used for international settlement.
I think few investors truly realize the "knife's edge" this dollar based gold market is on. Most of them cannot see that it cannot be "played" using paper. We must look past the "currency war scene in the valley" to grasp where gold will be valued after this transition works out.
Currently people talk about the US selling gold in some form of options or physical. Clearly they did not hear Greenspan's words (see PH's post) about the need for our gold to be totally "uncommitted" at this time. The only thing the present banking structure can do is throw more
money at the paper gold markets. In as much, they use cash margin bookkeeping to create more "gold-less" contracts to drive the price down. That's all, nothing more. For the paper player (most mine stock owner included) such a move would crush them. Yet, it can only end with a defaulted
gold delivery and a closed marketplace. Investors say the officials will never do that, but how will they continue to function this market? Presently, virtually all lenders are calling for their gold back or at the very least converting to a self liquidating schedule. As this first round of defaults roll in the managers are frozen to borrow gold so they stay off the bid side of the lending rates. Yes, they are using options, futures and the world OTC arena to cover their "bookkeeping", but it has the effect of building the eventual amount of physical cover needed.
England has done all they can do to help and now even they have signed on to the Euroland arena. Truly, this gold market is being sacrificed in the face of a major transition of world financial dealings. Perhaps the ECB will reconsider and cover some important people? No, I doubt it as gold has just been placed squarely in the middle of this realignment and the LBMA is in trouble, big time.
Besides, even the dollar/IMF faction are clearly behind a big rise in the gold price. They don't have to choose between making the industry whole or not. That decision has already been made, right there in Washington. They know the dollar price of gold is going way up because the oil/gold
connection disappeared with the Euro. You know they took the crude oil rise seriously now, because they are buying time by selling off the strategic reserve. If they do, we will look back on that move and see that the reduction of this "emergency" holding plays right into the hands of the oil
producers. We shall see.
On the Road..............
thanks FOA
AEL
(10/10/99; 9:10:40MDT - Msg ID:15970)
hill-billy
I, too, am more a lurker and learner than anything else!
I like the designation "quasi-fiat". It is of course fiat, but it (physical cash) has a different kind of existance than the electrons on the screen. Remember that the really great inflation has taken place in virtual bucks -- electrons on the screen -- not in physical currency. It is the electrons that will (or at least can) vanish suddenly in great number.
And whether we like it or not, the association of physical currency with "value", as "money", is deeply embedded in the popular consciousness. This way of thinking will not disappear overnight. It is possible that there could develop a disconnect between physical cash and electronic cash, in the same way that there might develop a disconnect between physical gold and paper gold. I find the idea that physical cash could lose its value inside of 48 hours to be inconcievable, short of sudden mass (divinely-inspired?) epiphany.
I agree that clad coins are worth stockpiling. In a big currency devaluation, clads would probably do better than paper. What would be a good guess at the installed base of coin-operated machines of various types? 100 million? 200 million? 500 million? too big to change, too big to fail.
My guess is that my 5 clad quarters will buy me one cycle at the laundromat even after the collapse of the buck.
ET
(10/10/99; 9:08:20MDT - Msg ID:15969)
AEL
Hey AEL - how's it going? I've read North's piece several times and I'm left unconvinced. I don't have it in front of me but if I remember right, he claims that physical cash will retain much value as a trading medium if banks close because of y2k problems. His view is that certain paper, FRN's, because of their longstanding usage, will retain value as the common medium of exchange because no other money would exist to fill this function in the public eye.
First, since all money they use is fiat, there is no reason for them to close because of possible insolvency problems. I've always questioned North's argument that banks will go bankrupt because the concept would only apply to a system where tangible assets could not cover tangible debts. Neither of these would be an issue with banks in this system. The Fed can reliquify an institution with the stroke of a pen. The more likely scenario is that the value of each piece of fiat would plunge in value.
Second, although most banks use computers, they are not necessary for the bank to perform its main function, the clearing of commercial transactions. The banks can process checks and plastic by hand if necessary, just like they used to, although at a relatively slow pace when compared to today. There is really no reason for banks to close other than if their employees can't get to work or civil unrest makes it difficult to operate. If either of these events were to happen over a long period of time I would posit that all fiat, whether electronic or physical would have little value in commerce because it carries no intrinsic value with it and would no longer represent a promise to pay. Some may still use it as a medium but it's purchasing power relative to real assets would plunge.
Third, a bank run today is not the same as a bank run of yesteryear. During the 30's a bank's paper did represent something tangible, gold. Today that is hardly the case as the paper today just reflects someones debt. Since the Fed is the final guarantor of that debt, it would seem they would find it in their best interest to guarantee people will not lose any money. So far, that is what they have done and I'm sure they will continue to do so. It seems to me the issue is not the return of any depositors money because that can be guaranteed, but what that money may purchase in the marketplace. The issue with a bank run today is the 'perception' of one losing his money, TV images of lines in front of banks, and a general loss of confidence. They are all perceptions of trouble when actually no trouble exists because the banking system can give you your money, guaranteed, because they are the ones that manufacture it. What they can't guarantee is purchasing power. A bank run of today would manifest itself as a run away from the banks and their fiat to hard assets. This is the run I think we are starting to see.
Regarding the above comments, I see little difference whether I leave my money in the bank or take it home. It will purchase the same. North's argument that the fiat money market would become two-tiered I believe is incorrect. If his scenario were to hold water, it would rest on the assumption that banks would close leaving clearinghouse operations down but other commerce intact. I fail to understand how this could take place for any longer than a few days before supplies at vendors ran out and couldn't be replenished because of the lack of a clearinghouse.
Let's look closely at this part of his argument. If the banking system were to shutdown for any length of time (lets say a month), would supplies last that long? I doubt it. But his claim is that cash would be more valuable as a medium. How could this be? I can't see my local gas station being able to buy gasoline from Texaco for cash. How would the cash get to Houston? No, it would require credit or the banking system to clear a check. Since the banking system is down, checks won't clear and credit would be useless as no method for final payment would exist. The result would likely be no gas for the station equaling no gas for me. This is just one example, but it shows that most business is not local and without a way to move money about the country and the world, commerce for the most part will stop.
Are computers necessary for banks to operate? In today's world, yes, but only to the degree that the volume of transactions remains this high. An economic depression could slow overall transactions down considerably making transactions clearable by hand but the more likely scenario is that those in the banking system will find computers that will work and clearinghouse operations will continue but perhaps at a much slower volume. Legacy systems might fail but all systems will not. The system on my desk could clear transactions if it had to. It only requires a working telcom and electricity.
In the end, I fail to agree with Dr. North. His vision of a world of commerce clearing with cash is farfetched. If the meltdown he envisions were to take place, the better medium to have would be gold despite the public's lack of knowledge. At any rate, the gold would at least insulate one from fiat currency depreciation which is no doubt in the cards with or without serious y2k disruptions. The banking system may be forced to go back to a gold standard just to insure its own viability in the public eye. We can only hope, eh?
Thanks for your thoughts as always AEL. BTW, Linux installation has gone well and is functioning flawlessly. My only need right now is a browser with a better cut and paste function. The browser inherent with Linux and Netscape's version leave something to be desired. Maybe its the operator. <g>
ET
SteveH
(10/10/99; 8:15:14MDT - Msg ID:15968)
Protecting gold
As you recall our discussion of Strict Scrutiny -- it is the courts ability to overrule the government or a regulation when one's rights are infringed.
The Emerson court (US v. Emerson, July 1999, Texas) ruled the Second Amendment to be an individual right. Previous to that the only Federal case to rule on the Second Amendment was to say it was a state right. Hence, many CCW (concealed carry) cases ruled in favor of the state as Strict Scrutiny didn't kick in since no individual right was infringed, rather a state right. The effect of one notable Fed case (US v. Miller) has been used time and again to strike down CCW carry cases. Now that has changed. Emerson' court unequivaclly states "...But there is no need to deceive ourselves as to what the original Second Amendment said and meant. Of course, properly understood, it is no limitation upon arms control by the states."
"Thus, concerns about the social costs of enforcing the Second Amendment must be outweighed by considering the lengths to which the federal courts have gone to uphold other rights in the Constitution. The rights of the Second Amendment should be as zealously guarded as the other individual liberties enshrined in the Bill of Rights."
In another section, "...even if there would be 'few tears shed if and when the Second Amendment is held to guarantee nothing more than the state National Guard, this would simply show that the Founders were right when considered essential, and so sought to protect those liberties in a Bill of Rights. We may tolerate the abridgement of property rights and the elimination of a right to bear arms: but we should not pretend that these are not reductions of rights.'"
The fight for the Second Amendment is much like the fight for a free gold market. Both are manipulated, both represent a return to the basics, and both confirm our heritage as Americans or as others remember Americans to be. The Emerson case is a significant stride forward that re affirms what all Americans and those who have emulated the US Constitution have always known the Second Amendment to be: an individual right and not one that only works at home, at work, or while hunting. No it is a 24-hour per day right that belongs in all places, not just where is socially acceptable. The right to bear arms far exceeds the right of the state police power (an often used defense against the Second Amendment in court cases) because it is an individual right that invokes Strict Scrutiny for law-abiding citizens who desire to carry concealed weapons anyplace and anytime as a manifestation of their Second Amendment rights, which they have understood all along and somewhere the courts (until Emerson) seems to have forgotten.
Hill Billy Mitchell
(10/10/99; 8:01:01MDT - Msg ID:15967)
AEL (10/10/99; 5:22:37MDT - Msg ID:15962)
You said to ET concerning cash:
" fiat money (I am talking about the *physical* stuff, here, not the electrons on the screen)"
I thought that phrase was quite amusing as well as provocative. I hadn't heard the phrase, "the physical stuff", applied to fiat money before.
I am mostly a learner and a lurker and have very little to contribute. It would be good if you and others could expand on fiat money in the sense of the different types, ie physical, paper proxies such as checks. It would be interesting to hear some comments on the possible scenarios concerning the physical stuff:
1) Federal Reserve notes
2) Paper checks
3) Pre 1982 pennies
4) Clad coins and Zinc (post 1981 pennies)
I believe that some of this could be classified as quasi-fiat or quasi-hard stuff
There was a time in the distant past that 90% silver and 40% silver was quasi-fiat money due to the fact that the intrinsic value was there but that intrinsic value did not equal or exceed the monetary value assigned to it. The same could easily happen to pennies, nickels, and clad coins and who knows what else should we experience an inflationary depression, ie copper could go out of site and a penny would be worth more than a penny (pre-1982 penny). The same could be true for nickels and clads.
I plan to have some paper money on hand to purchase last minute goods, which I may have forgotten to stock. I expect that the window for such purchases will be open for 3 to 48 hours max. I also plan to have some this potential quasi-fiat money in case it becomes acceptable as a medium of exchange when the paper FRN is worth zero. This quasi-fiat money would be the lowest grade of double play or triple play if you will.
Possible order in which quasi-fiat becomes real money or a commodity with intrinsic value in excess of its monetary value or even a numismatic item.
a) pre-1982 pennies
b) post 1970 Kennedy halves
c) Eisenhower dollars
d) Nickels
e) Clad quarters
f) Clad dimes
g) Zinc pennies
Any one?
Neo
(10/10/99; 7:34:08MDT - Msg ID:15966)
A question for FOA
I really enjoy reading your posts, as do many of us, and am constantly gaining in knowledge. On your proposal for Gold to reach $30000, could you please give me a value in Euros, which you feel Gold could reach. I ask this, as I feel the answer will allow a greater understanding on my part, of your thought process. Much appreciated.
Hipplebeck
(10/10/99; 7:16:25MDT - Msg ID:15965)
carnage
Yes, there will be carnage.
All those crazy people who shorted gold are going to suffer and have to make good, somehow, on their commitments.
Go bankrupt? Mostly not. They will be given time and liquidity. And who is going to be on the receiving end?
Who steered them into this mess? Who offered this wonderful deal where they could all get rich? Who baited them, hooked them, and is now reeling them in? The great gold scam of 2000. Take a little time, we will give you all the paper you need, but in the end you will return all of it to us.
Hipplebeck
(10/10/99; 6:58:23MDT - Msg ID:15964)
future currency
Currency wars or currency cooperation?
1 dollar=1 yen=1 euro
Someday, it will appear to be 3 currencies, but will, in reality, be one world currency
AEL
(10/10/99; 5:28:01MDT - Msg ID:15963)
oops! PS/E ratio
... of course I meant 1:100, not 100:1
AEL
(10/10/99; 5:22:37MDT - Msg ID:15962)
ET: cash
"The only way actual cash will do any good is if we
get a temporary collapse of the infrastructure with power and telcoms going down. For a few days it
might help in that scenario but frankly I consider that scenario rather unlikely. If the whole grid goes
down, it would likely stay down for quite awhile and I don't see how any fiat money would buy anything. <g>"
.... I do. Just by long force of habit. Many people know and have known, in their lives, nothing BUT fiat money. In fact, most people have no conception of what real money is or might be. This is a major learning curve, and it will not happen overnight, or in 2 weeks. Meanwhile greenbacks and clad coins will retain or perhaps even increase in trading value. It could take many months or even a year or so before fiat money (I am talking about the *physical* stuff, here, not the electrons on the screen) came to lose value. Bear in mind that the ratio of the physical stuff to the electrons (the PS/E ratio?) is similar to the physical gold to paper promises ratio.... perhaps in the neighborhood of 100:1. Gary North's massive deflation scenario (with respect to physical cash) is still a real possibility; not likely, but possible. I would expect that in that context the metals would go thru the roof as well. Indeed, *anything* tangible would go thru the roof as well.
Black Blade
(10/10/99; 00:49:18MDT - Msg ID:15961)
ET and e man
Indeed, I too have a bit of the physical as well as PM shares. First, one should get out of debt, and second, prepare for any emergency such as unemployment, natural disaster, economic collapse, etc. with food, water, fuel, firearms, PM's, etc. I do howevr like to play the paper-game. If anything, investments in the right defensive plays such as PM's should hold up well through most any scenario, short of a Mad Max doomsday event. As always, take care of your base survival needs first, then have fun.
ET
(10/10/99; 00:31:22MDT - Msg ID:15960)
e man
Hey e man - I wish I had more time to participate here. I thought your last message had some great insights in it concerning the value of things. It is sometimes difficult to sort out the true value of investments when the yardstick, as you pointed out, is changing in size. I think FOA and Another have it right regarding the fact that these changes generally only happen once in a lifetime, if that, and that is why they are so difficult for one to see. They, as well as others here have done a fine job of pointing out why one of these changes is likely to happen in the very near future.
In FOA's message he stated that the die has been cast and the run to gold has started in earnest. This brings up an interesting point about markets in general. Unlike futures markets which clear everyday, equity markets actually take some time to clear. If you were to sell stocks say Monday morning, I don't believe the trade would clear until late in the week. This presents a problem in a 'fast' market. Another concern might be the counterparty that purchases those equities. Generally small lots are handled by the floor specialists. We might see something like we saw the last couple of weeks in the options markets where trades do not clear because of liquidity problems with either the specialists themselves or their financiers. We could see all kinds of 'lock-up' type problems in stocks with normally low volume levels.
You asked what I've done to prepare for this and I suppose you know I consider y2k a great problem also, but primarily from an economic point of view. If all of this currency stuff wasn't enough to worry about, you've got serious economic ramifications likely to come from y2k. I guess you could say I've been prepared for years for the currency problem as I suspected it could happen at any time. As far as y2k, I've prepared as if I could lose my means of income for some indefinite period of time. I've gotten out of debt and have stocked up on enough stuff to see my family through some economic hard times. Just common sense stuff. I don't think the general infrastructure is in any great danger longterm but I do feel most people underestimate the interconnectiveness of the economic system, particularly from the monetary side. I expect banks to stay open and commerce to go on but at a greatly reduced pace. I had a discussion with some friends last night about taking money out of the bank and hiding it at home. I can't see how this will do much good as it's purchasing power will be the same in either place. The only way actual cash will do any good is if we get a temporary collapse of the infrastructure with power and telcoms going down. For a few days it might help in that scenario but frankly I consider that scenario rather unlikely. If the whole grid goes down, it would likely stay down for quite awhile and I don't see how any fiat money would buy anything. <g> I'm leaving most of my bucks in the bank and taking enough home to get by for a couple of weeks. I guess we'll see if this proves correct.
ET
Chris Powell
(10/10/99; 00:01:57MDT - Msg ID:15959)
Ted Arnold whistles past the graveyard
http://www.egroups.com/group/gata/246.html?
And look at all those new tombstones:
Ashanti Gold, Cambior, hedge funds,
gold brokers....
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