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ARCHIVED DISCUSSION FROM 11/10/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) Canuck (11/10/01; 22:21:41MT - usagold.com msg#: 65088) @ Waverider Hello female Canuck of Vancouver from male Canuck of Ottawa.The very condensed version involving the holding of gold shares goes something like this. If and when TSHTF (I'm assuming you have heard this phrase) gold companies run the risk of government takeover and/or the profits/dividends from these companies will be subject to huge tax.I had difficulty with this theory a year or two ago and then someone described the hedge position(s) of Barrick. Barrick has huge reserves but apparently, because of its hedge structure, is fundamentally bankrupt when gold heads north of $360. (Placer apparently around $420). So what happens? Let's say gold spikes to $425, Barrick is underwater and various CB's are in serious trouble. Due to the hedging structure various government entities take over, bail Barrick out and take over the reserves. I forget the term used by many on the forum but it implies government takeover. Look at the hoodlums in behind the scenes at Barrick, Canadian and U.S. political yahoos. (ie: Mulroney and Bush Sr.)Have you ever wondered 2 things; why Canada has no gold reserves and what the Fed refers to as 'deep storage' gold? It is the 'bought' reserves from 'superhedgers'!!You are correct with the 'leverage' angle of a gold company and gold shares leading bullion but be very careful. A gold spike to $330 will 'lift all boats' but after that hedging policies show their true colour. Pull up a 4 year chart of Ashanti or Cambior and check the action of Sept/Oct. 99.Scarey!! Black Blade (11/10/01; 22:18:50MT - usagold.com msg#: 65087) NBR Interview: 11/09/01: Market Monitor-Frank Cochrane,President of Investment Timing Consultants http://www.nbr.com/trnscrpt.htm#STORY3 Snippit:KANGAS: You know, Wall Street had a rather muted reaction, it was somewhat positive, but it was all about the big decline in wholesale prices, not a real rally on that at all. Do you think there's some concern that the economy might be heading for a deflationary recession? COCHRANE: Well, if you look at the stock market, I would say no. However, I think that concern we'll rule out some time next year and that prices will start deflating, and they've started already, and I think we'll see a continuation of that going well into next year and into '03. So it's certainly a concern of mine and I think the stock market rate here has provided one of the great levitation acts, especially over the past six weeks. KANGAS: Well, on your last visit with us back on June 1 when the Dow was at 11,000, you were decidedly bearish and correctly so. So has the stock market's subsequent decline made you any more positive now? It doesn't sound like it. COCHRANE: No. In fact, I think that this is one of these times when the market has given us another reason to sell, an opportunity here to sell into this. If I look at the market over the, say, the next three, six, 12 months, I think very possibly through the end of this you're going to see stocks move considerably lower. You may have a rally next week but I'm saying in December especially when people realize the losses that they have, I mean- KANGAS: Give us a down side estimate of where you think the Dow could go. COCHRANE: Well, a year out, some time within the fourth quarter of '02, I would say that the Dow could be around the 5,500 level, the S&P 500 around 500, 600 and the NASDAQ Composite somewhere in the 600 to 800 level. If we look at historical valuations with respect to P/E multiples on the S&P 500, we're trading right now somewhere, if you believe the numbers, somewhere around 36, 37, and an overvaluation is 20. And that puts the S&P around 750. A fair value would be at 550 at 15 P/E and an under value would be at 10, and that would be right around 400 on the S&P 500. so right now obviously trading at the 1,100 and change level, the S&P 500 is very, very over valued, as is the Dow Industrials and the NASDAQ.Black Blade: Exactly my thinking on the US markets as well. We haven't seen anything yet. There is very little positive economic news to trade on. It will get very ugly as more earnings warnings, growing consumer and corporate debt, declining consumer confidence, and rising layoffs are made public. Current valuations of the market indices are grossly beyond any rational measure. Look for a retraction to historical valuations. That translates to a sharp reversal of the markets. In the meantime, get out of debt, get Gold and Silver portfolio insurance, be very selective (defensive) with investments, have cash on had for several months expenses, and get supplies of food and basic necessities. Prepare just as you would for a disaster or extended unemployment. In short - prepare for the worst and hope for the best. It certainly can't hurt and if all turns out well, then at least you will sleep better at night knowing that you're ready for any sudden economic or natural disaster. Black Blade (11/10/01; 21:55:05MT - usagold.com msg#: 65086) Recession to Deepen in Quarter http://biz.yahoo.com/rb/011110/business_economy_bluechip_dc_1.html Snippit:WASHINGTON (Reuters) - The U.S. economy is in for a rough ride over the next few months as a recession deepens but the downturn will be relatively short-lived, economists in the closely watched Blue Chip survey said on Saturday. Black Blade: "Short-lived?" It has been in a "downturn" since March 2000! And all the current data suggests that it will get much worse. Netking (11/10/01; 21:44:43MT - usagold.com msg#: 65085) Auspec Auspec(65075)Request to CPM sent . . .Ag Bugs - Good silver jewellery looking cheap in the shops here today, but pity there's no bullion though. All Sterling silver in two well stocked local Jewelers shops are on special, one less 25% & the other less 30% . . . Christmas shopping for the wife & daughters now taken care of! auspec (11/10/01; 20:14:28MT - usagold.com msg#: 65084) Crashmaker Snippet p. 956 Speaking of the book: "The Protocols" published by the National Front of the Russian People;"So what's in here I ought to know?" asked Whitman."Four things you already do," Maxfield responded. "Three of them right, and one wrong. First, individual liberty's an illusion the masses seek, but can never achieve. Second, any attempt by the masses to govern themselves must result in chaos. Third, only an elite can rule, and must do so by force and fraud. That's the Protocols' troika of timeless truths.""And its error?" asked Whitman."That the rule of the elite in the modern world depends on control over money," Maxwell explained."That's false?" Whitman expressed surprise at the thought."Obviously," his boss chided him for being so obtuse. "The real source of power's control over RESOURCES and PRODUCTION. Those things constitute wealth. Money's just a medium of exchange.""A medium of exchange can command wealth," Whitman objected weakly."It can seek wealth," Maxfield corrected him. "But the ability of owners to withold things from sale for money will always defeat the ability of bankers to issue paper currency or generate deposits. A medium of exchange is useless unless the producers of real wealth are willing to trade valuable for it. So, in thelong run, the producers decide what's to be used as money." ENDComment: Control over resources and production? There's not a resource grab going on, is there? At this late hour I can't think of a single company that is in the hands of the elitists, and if they had 1 or 2 they would be surely satisfied, no? I trust our authorities implicitly, don't you?Pandagold/sector-- We shall soon see what is 'exhaustible' and what is not. Yes, they have much power, almost unimaginable, but gods they are not {don't tell them, they'll be upset}. RS (11/10/01; 20:01:23MT - usagold.com msg#: 65083) @ Pandagold - ( 11/10/01; usagold.com msg#: 65079) Pandagold, you said:The real root cause of our most serious problems is not of oil or gold, or money, it is about POWER and ensuring it is preserved.-----------------------------------It is through society's acceptance of fiat currency that WE have GIVEN them that power. This is truly a sad thing."The rich rule over the poor and the borrower is servant to the lender." -- Proverbs 22:7-M.K., Thank you for providing us with this forum. Zenidea (11/10/01; 19:53:16MT - usagold.com msg#: 65082) Henry. re Barns/Gauss It appears that you may well be right regarding a unit of area 10-24 sq cm used in nuclear physics to measure cross sections as opposed to gauss (German)? :the cgs electromagnetic unit of magnetic induction equal to the magnetic flux density that will induce an electromotive force of one abvolt in each linear centimeter of a wiremoving laterally with a speed of one centimeter per second at right angles to the magnetic flux. :) Dragged out the dictionary. Good pick up.Just thought I would pop in some facts about Gold since this is a gold discussion forum. Hope I wasnt to cheeky?, its just that this IS a beloved metal as you say and sometimes I feel it deserves by its properties in its own beautiful right some core mention.Now being able to turn it into its crystal form as nature does would be the money spinner to end all discussion I think. Imagine the premium on that!. Any tips Henry?. So far trying to manage the facts to that end with Gold is abit like trying to steer a herd of cats. sector (11/10/01; 18:09:08MT - usagold.com msg#: 65081) @pandagold Out of Gas...Out of Gold It matters not how powerful the driver is, or what his pedigree, or how big his biceps are, or how pretty his girlfriend is, or if he is a Yankees fan, or how fast his interceptors fly, when his fuel tank runs dry, the car stops.Selling physical gold from US reserves is as necessary to suppress the world price as gasoline is needed to drive one's car. When yer out yer out. Nixon was moved to default on our gold contracts in the early 70's because of excessive French draw downs of US gold reserves. The US was more powerful then. So being powerful didn't preclude us from the [then] unthinkable gold default. Because of reporting requirements, the Treasury has found it necessary to utilize the Exchange Stabilization Funs as a conduit to move US gold reserves to the "market" to be sold below market values most likely via currency swaps with European trading partners [Germany].The operative force in play is the constant draw down of an exhaustible resource being used to support an unbacked currency. This draw down cannot be clearly seen but can be inferred in the IMF New York Fed gold earmarked exports which have run at 40 - 60 tonnes per month of late.Therefore, a date in the future exists when the US will have exhausted its supply of physical metal with which to manipulate the international gold market. A gold price spike will then occur. Beyond the spike, gold will settle sell at it historical equilibrium level.Scholars of currency crises (Obstfeld) use gold as a prime example of an exhaustible resource in their writings on currencies. It actually isn't rocket science, though the macro economist whizz kids would argue that point.Paradign shifts are very difficult to manuver through. Especially when they involve one's own money, not to mention one's political belief mechanisms. BR549 (11/10/01; 17:46:35MT - usagold.com msg#: 65080) Again & again? Pandagold (msg#: 65079)--"Before I turn in for the night, there is one point I would like to make. I keep reading again and again posts that claim this or that can't be manipulated for long. Even some saying, or doubting, things can't be manipulated."Panda—I am confused. I went back in the archives to 11/8 and only found one poster who used the word manipulation (or anything beginning with the letters "manip") who posted that they didn't think that manipulation was "evil" and was possible in reference to their post. It was yours---"Blackblade Barrick and Anglo Gold are not to be underestimated - they are well and truly in the hands of the 'brotherhood'. In other words they are most unlikely ever to be 'victims' of any manipulation policy towards gold."I am confused. Did I miss these other "again and again" posters?BR549 Pandagold (11/10/01; 16:49:07MT - usagold.com msg#: 65079) A nation without borders Before I turn in for the night, there is one point I would like to make. I keep reading again and again posts that claim this or that can't be manipulated for long. Even some saying, or doubting, things can't be manipulated.What this tells me is that some people (many people) have no idea of the power of those 'in charge'. Besides vast wealth that would surpass any nation on this earth, that is 'real' wealth - real estate, commodities, key industries, distribution, wholesale, retail. They have control of the underworld by having, long ago, organised international crime into a multi-trillion dollar industry, plus information source, and 'terrorist' network. (that is a great source of untaxed wealth).They have also control of all key international financial institutions, and banks. They have key members of the elite network in high places either directly or indirectly in most countries. I will leave it there, otherwise one goes into overkill.Do you know how much one trillion dollars is? Did you read the estimate (rough), in an earlier post, of how much even the Rothschilds - in their own right ( that is apart from the network) are worth.It is IMPOSSIBLE to think big enough, just as it is impossible to count the stars, or conceive that there are more stars in the Universe than grains of sand upon Earth.The total amount of gold on Earth is peanuts to them.The real root cause of our most serious problems is not of oil or gold, or money, it is about POWER and ensuring it is preserved.To help you, try to think of another nation without borders,(almost like some believe there could be another world running parallel to ours in another dimension) Well, theirs is not in another dimension - not one with sci-fi connotations. Theirs is quite real, yet it is veiled because of most people's inability to conceive it.Believe me, I do understand if you find this difficult to digest. And I will make allowances for any cynicism, so fire away. Galearis (11/10/01; 15:03:18MT - usagold.com msg#: 65078) @auspec You missed one on silver... As you know there are many, many ways to wag this (Hi Ho) silver dog that does not pertain one hundred percent to drying off, or kennel rattling tricks. Now that I have used already up a lot of metaphorical leeway, the one story they have not used before is the hot flush (excuse me) hot flash around colloidal silver, a aqueous solution of silver nitrate. As you know silver is highly reactive to certain elements - most notably chlorine, bromine and iodine - and hence additional multi-billions of ounces are present in the world's oceans locked up with these latter elements and nitrates.The Kodak Corporation, as we speak, is undertaking mining activities of water at depth as a source of unexposed photo-active silver bromide, silver iodide and silver chloride, and surface zone areas that will be a source of silver nitrates. Pharmaceutical interests, at present, have not expressed an interest in this area as of yet. (Grin)G Pandagold (11/10/01; 14:25:20MT - usagold.com msg#: 65077) Sorry I goofed #65070 The first 'Harmony' should have been Homestake (HM) and I got the letters out of sinc for Harmony which has been corrected by Henri (thanks) I try to do too many things at once. Mr Gresham (11/10/01; 14:03:25MT - usagold.com msg#: 65076) Henri Ah, are you too "....repent(ing) at leisure"? The life of the current historian is so underappreciated. The re-education camps are always there, sending us out to dig ditches and fill them in again.May our "repentance" here, better called just "waiting", of buying in during a long basing period, be a short one going forward. The risk/reward certainly looks better than the other association mentioned... auspec (11/10/01; 12:58:41MT - usagold.com msg#: 65075) Silver/Galearis/Pandagold/Netking www.dontfoolwsilver.grp Have you guys ever seen the tail WAG.............THE ENTIRE KENNEL???? Nope, none of us has or likely ever will. Thus, our silver can only be toyed with for a prescribed period of time before 'reality-day' arrives along with more 'ration'-ality. The silver band stretches tighter because {speaking redundantly} of the enormous amounts of uneconomically CONSUMED {gone} silver, as well as the precarious position of remaining above ground supply. What remains available to be used in what can only be called a squandering manner? We are left to only guess the time not the event.Very easy to blame market imbalances on China so this is the tool that is used. Rumors take on reality. Trot out the digital photography slant numerous times a year, make a few oceanic discoveries, toss in the China factor and next thing you know: VOILA! A Dustin Hoffman/Robert DeNiro block{silver}buster, except more amateurishly produced.I checked the kennel and it is on sound footings, not a micrometer of back and forth movement. Those that would attempt same are purely delusional. Hell, they can't even decelerate the annual silver defecit, much less balance it, much less bring silver into economic production. I-N-E-V-I-T-A-B-L-E doesn't seem such a hard word to spell from this perspective. Of course my mind is not cluttered with a lot of Myron Schoales {sp?} mathematical wasteland formulas.******NEWSFLASH*********: Just in from the Swiss/Carlyle PM Containment Corp................ "NEW TECHNOLOGY used in wartime use of silver components now allows for retreivable silver matter from missiles. Called BoomerAg, it also picks up any extraneous atmospheric Ag it comes into contact with, and we actually end up with more NET silver as we go. Lockheed has kept this discovery under wraps pending, now completed, satisfactory field tests."You heard it here 1st folks, link provided above. Hope it is working. I've gotta run try to sell my couple remaining silver coins while they still have value.P.S. Murray, would you request my e-mail from cpm for a sub-equatorial question from me? Thanks. Galearis (11/10/01; 12:05:15MT - usagold.com msg#: 65074) @ Netking and pandagold your stuff.... Netking: yep.Pandagold: ditto and most of us R.I.P on this fine forum. Netking (11/10/01; 11:30:58MT - usagold.com msg#: 65073) China & Silver - Auspec etc Sir Auspec(65066), thanks for the Morgan silver link.I (and others here as well as Ted Butler) have been saying for months that the PRC are N O T dumping Ag on the world/US market, despite a few poorly written pieces on PM's in Cyber Space that say otherwise, there is just no evidence. There is evidence however of "wag the dog". There is no love lost between the "King of the East" and the USA & there is nothing to indicate even allowing for various OWG & NWO theories/scenario's that they would co-operate in any way by dumping their own strategic stockpiles of Ag to help the USA who had done the same thing years earlier. There is also no evidence that their recent confirmed acceptance of entry to the WTO(World Trade Organisation)shortly was precipitated by any Ag "dumping to get votes", Mr Moore's leadership (and Kiwi nationality!) would pre-empt that scenario, in any case the "dumping" has been "happening" for years. What is factual is the Chinese ability to very efficiently and cheaply refine precious metals that are in concentrate form & then export this. The PRC have been importers of silver concentrate and then exporters of the same in a diffferent form, this is confirmed.I remember reading an article months back outlining an analysis that the PRC were turning to be net importers of gold (now) and that whilst they were self sufficient in silver(currently) they were considered to become net importers of silver in the future aso.The "China increases silver exports by 600%" headines that we have seen for year after year are utter rubish. Obviously, silver is coming from sources we can't indentify, from leasing. Whether it is from The Central Banks of the Phillipenes, or the PRC, is immaterial. This is source is highly uneconomic and unsustainable. But take a look for substantiation on the China flows, and you won't see squat.These China stories may be made up by GFMS, and I challenge them to verify their statements. It's always, they know privately, but can't back it up publicly. It's pure "rubbish", just like their inventory figures. To think the Silver Association publishes GFMS's work as fact, is a disgrace. If they can't back up what they claim to be is true, just assume what they're saying is garbage, and we'll be safe.- Netking Henri (11/10/01; 11:03:01MT - usagold.com msg#: 65072) Harmony ADR is "HGMCY" Pandagold (11/10/01; 10:56:53MT - usagold.com msg#: 65071) China, Russia, gold and silver I have mentioned China and gold many times in the past. I have also said to watch China nd Russia very closely. They are colluding quite closely in many areas behind the scenes.This may bring a few sharp comments I know from some posters here, but there is nothing 'sinister' in this. It is because they can't trust the US ( by that I mean those who run the US) Many of things that more and more people, even many posters here, are beginning to notice have not been lost on leaders of other nations. Everyone is thinking - who the hell is next?Gold will move ( substantially) in its own right mainly as a commodity when other things are in place - ie euro. But I am convinced ( with a capital 'C') that silver will make the break first - certainly from where it is now.If gold were to do anything before that - it will be for suckers only. ('that' meaning silver not moving and euro still shaky)In fact, I repeat again, gold will makes its move when the last goldbug is lying on his back - and I don't think there are too many on their feet at present. (IMHO) Pandagold (11/10/01; 10:38:19MT - usagold.com msg#: 65070) Tedw: Mining stocks moving with gold price. Mining Stocks moving with the gold price. The North American ones, unhedged, are ones that will tend to move with the gold price all other things being equal. By that I mean without such things as take over activity to be considered.Newmont (NEM) is reasonable, and Agnico Eagle (AEM) Harmony was (HM) but there is other activity there at present relating to Barrick (VERY hedged)South African: Harmony (HMGCY) an ADR tedw (11/10/01; 09:54:25MT - usagold.com msg#: 65069) Gold stocks http://www.usagold.com A question for the round table. Has anyone noticed which Gold mining stocks tend to correlate most closely with the price of Gold. In other words, which moves upward the most when gold rises and which moves downward the most when gold falls?On another note, I would like to comment on the Reg Howe suit. After 50+ years on this planet in the United States of America, it is hard to have any faith in the American Court sytem. My observation is that when the extremely powerful monied interests and the rule of law collide, it is most often the rule of law that loses. As long as we haveFederal Judges with compromised integrity, that will continue to be the case. Cynical I know, but I percieve it to be the truth. Galearis (11/10/01; 09:24:14MT - usagold.com msg#: 65068) @auspec re silver and China Yes that's a convoluted way of saying that ..... The Chinese government is not stupid. They well know the "value" of a paper driven/rationalized spot market and most assuredly are taking a similar stance re silver as Russia is to gold and palladium. Russia is not selling its precious resources into the paper market and China, that is culturally much more respectful of pms, would be even more reluctant to do this. (Note that Pd paper price has collapsed in the face of almost no metal out there!). I am looking forward to the time when gold paper goes ahead of Pd paper. (smile) If "they" don't watch it, this event could even happen.The Chinese also know that their new gold market (silver too?) will put additional pressure on New York. I would expect, under these circumstances that the Chinese gold market will come to pass sometime after January next.....Yes?(Smile)Regards,G. BR549 (11/10/01; 08:36:24MT - usagold.com msg#: 65067) Enron-Was this a derivative meltdown? http://www.enron.com/corp/sec/ Hipplebeck (msg#: 65059)---"Question about Enron"Was this a derivative meltdown?" BR-Yes"Does anyone know what happened here?"BR-See below"I read that it had something to do with off-balance-sheet.Does anyone know what that means? "BR-Yes, the SEC caught Enron's Corporate Officers (Executive Vice President and Chief Financial Officer of Enron)owning derivative hedge funds to the detriment of the stockholders. An abuse of their power that smells of violation of insider trading regulations.FROM ENRON---"Enron, like many other companies, utilizes a variety of structured financings in the ordinary course of its business to access capital or hedge risk. Many of these transactions involve "special purpose entities," or "SPEs." Accounting guidelines allow for the non-consolidation of SPEs from the sponsoring company's financial statements in certain circumstances. Accordingly, certain transactions between the sponsoring company and the SPE may result in gain or loss and/or cash flow being recognized by the sponsor, commonly referred to by financial institutions as "monetizations." ""The financial activities of a wholly-owned subsidiary of LJM1, which engaged in derivative transactions with Enron to permit Enron to hedge market risks of an equity investment in Rhythms NetConnections, Inc., should have been consolidated into Enron's financial statements beginning in 1999."BR-This is from Enron's financial statements required by the S.E.C. It seems that Enron had to go back and restate a $1.2BB (that BB=Billion) reduction in shareholders equity as a result of its officers playing the derivatives game for 1997 – 2000. Who was involved---"information regarding the two LJM limited partnerships formed by Enron's then chief financial officer, his role in the partnerships, the business relationships and transactions between Enron and the partnerships, and the economic results of those transactions as known thus far; and transactions between Enron and certain other Enron employees."BR-Once the SEC initiated this probe the results produced caused a devaluation of Enron's shares by 90%. This caused Dynergy, Inc. to acquire Enron for $23BB. There is also some question as to the involvement of the Royal Bank of Scotland Group Plc in the derivatives scam (and the CB Bank of England). So what you have here are insiders playing the derivatives game with hedgers outside of Enron to the detriment of the stockholders. The problem, as with CB's, is that the financial reporting of derivatives is not reflected on financial statements. Look at how long it took for these abuses to surface. Another valid argument to change GAAP to report all derivative transactions for investors to evaluate. CB's should do the same thing.Regards,BR549 auspec (11/10/01; 08:12:03MT - usagold.com msg#: 65066) Silver Piece http://www.silver-investor.com/WoFat.htm "If China has a strong dislike for America, as the Los Alamos National Laboratory/Wen Ho Lee episode (concerning our Trident II launched W-88 warheads miniaturized with no loss of power) and the indignation over an American reconnaissance plane making an emergency landing on Hainan Island last March 31, strongly suggests, why would they wish to help us by dumping tons of (supposedly) Chinese silver on the world market, at the very time when U.S. stockpiles are shrinking to embryo size? We have a military action now in Afghanistan, and Lockheed Martin has been awarded a $200 billion contract from the Pentagon to build military jet aircraft. All this manufacturing and military equipment requires silver for optimum electrical conductivity. If China wants to damage the U.S., a good way would be to not dump their silver at cheap prices, contributing to our war efforts. The rational idea in light of the history of the Chinese regimes dislike of the West (Chinese nuclear test at Lop Nur, October 20, 1964 as one of many examples of long standing militaristic intentions; at this time, Taiwanese pilots flew some of our U-2 spy planes) is that they are actually withholding silver produced on Chinese territory for their own war plans and infrastructure development, including superconducting transmission power lines." ENDComment: China dumping silver? Ha! Henri (11/10/01; 07:51:46MT - usagold.com msg#: 65065) Zenidea Thanks for posting the physiochemical characteristics of our beloved substance. I thought thermal neutron apture cross-sections were measured in "barns" what is this magnetic component you have attached to it? Is this an Australian unit of measure? BR549 (11/10/01; 07:50:25MT - usagold.com msg#: 65064) Gold Shares relative to the gold price http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256AF9006048E7?OpenDocument Waverider (msg#: 65054)----"I have a question I'd like to toss out. BR549: Derivatives and CB's (#65007) and I quote, " The only sure way to hedge yourself against the gambling of the CB's is to buy physical Gold. You can't lose". Now, my immediate thought was, "Yes, that sounds fairly absolute, but what about gold shares?" Lo and behold, as I scolled to Brett Woods (#65029) I find, "But Dines strongly favors gold shares instead of bullion, because gold shares pay dividends and tend to move ahead of the price of the metal itself...So what role, if any, should gold play in your financial portfolio?...Gold bullion doesn't have much of a place, in my opinion." My baby question: What are the comparitive merits/risks/advantages/disadvantages/of these two perspectives?"BR-An excellent question. I put my machine on search and found this article written recently that argues that South African gold price runs ahead of gold shares. The charts are available in the link. It does not mention dividends or non-S. African shares but I would imagine it still holds true."There is a nonsensical idea amongst many analysts that South African gold shares are running ahead of the gold price and are over valued. They must be looking at different data to me. The JSE Gold index is shown relative to the Rand Gold price in which the mines receive their income. It is very clear from the chart that the JSE Gold index is well UNDER valued compared to the Rand price of gold. A quick look at the oscillators clearly shows that they are both in UNDER valued territory."This is the chart upon which the gold critics base their analysis, the JSE Gold index against the $ Gold price. This is an exceptionally powerful chart and the oscillators are indicating a major move in the near future. The critics analysis indicates that when the relative strength line moves up to the 0.06 levels of the previous peaks that the gold shares are over valued. What they are forgetting is that all this data occurred in a bear market. This is a bull market with totally different parameters. In my analysis there are NO signs of the gold shares being over valued, only the continuation of an extremely powerful upward thrust until the end of the year when I expect to see the JSE Gold index close to 1900 from its current 1350."BR-The other factor to take into consideration is that if one owns gold shares instead of physical Gold, what time period will it take to liquidate your shares in case of catastrophic economic collapse. As with all "paper" investments, IMHO, you don't have the security that you do holding physical. Regards,BR549 Henri (11/10/01; 07:46:57MT - usagold.com msg#: 65063) Waverider Perish the thought...for my part the inquisitions that tire me are domestic...such as what have you been doing all day nothing around here I can see...but darling-love-of-my-life-with-a-heart-of-gold I must keep track of how evil events of the world today will impact our collective safety and take appropriate precautions doesn't usually cut it. OK out to finish painting the eaves with goop that contains mold-resistant acetyl-choline inhibiting polyunsaturated bad stuff. And I thought the threats from terrorists were evil. Dang those nasty mold colonies...they obscure the golden beauty of natural wood grain.As for mining shares...I believe the trail has a good run down on the sequence of events. Mining of money is just not something that governments can allow just anyone to do independently...they will obviously need the governments help.I think there is some hope...at least initially...for the unhedged miners...those who have not promised to deliver gold in the future for candy today. When they cannot deliver what they promise the government has an easy back door into their ownership of alleged reserves in the ground at least in legalese. Once the government owns this "deep storage" gold it will probably be vastly inflated to suit their needs. Getting it out of the ground? Ha ha ha Canuck (11/10/01; 06:53:24MT - usagold.com msg#: 65062) Greenspan's Fine Mess : Hamilton setting up for Inflation/Deflation debate http://www.gold-eagle.com/gold_digest_01/hamilton111201.html "I am well aware of the great debate currently raging between the inflation and deflation camps, and as soon as we have gathered enough information so I am absolutely sure that I can write a good essay that will offend both factions, I will hammer out a Zeal essay on inflation versus deflation""But far before monetary inflation affects prices, the supply and demand of every individual good and service on the planet primarily determines their respective prices.""...the classical definition of inflation of relatively more money chasing after relatively fewer goods and services must be expanded. Now it should be relatively more money chasing after relatively fewer goods, services, AND investments.""Every analysis of inflation versus deflation MUST take into consideration that monetary inflation can flood into intangible assets today as easily as it can flood into goods and services in the usual tangible economy""Greenspan's Fine Mess will drive bond investors out of the US debt market with his disastrous negative real interest rate policy. While Greenspan probably hopes the bond players will throw up their hands in disgust and buy US equities..." Canuck (11/10/01; 05:43:36MT - usagold.com msg#: 65061) Euro Countdown 52 daysUS$/Euro 0.894 Grubstaker (11/10/01; 05:36:29MT - usagold.com msg#: 65060) 20/20 HINDSIGHT http://www.fas.org/irp/congress/2000_hr/hr_020200.htm Although a lengthy report to US Senate dated 3/2000 all of the elements which have played out in recent events (9/11/01) were documented and addressed. Scroll down to read the CIA Director's Statement on terroristic threats against the United States. Conspiracy advocates, radicals and anarchists posting "information" should really know of which they speak. I really enjoy this sight and am disappointed at the sometimes crude and unfounded political remarks against the USA..the name of this sight IS...USAGOLD... Hipplebeck (11/10/01; 05:26:31MT - usagold.com msg#: 65059) Question about Enron Was this a derivative meltdown?Does anyone know what happened here?I read that it had something to do with off-balance-sheet.Does anyone know what that means? Black Blade (11/10/01; 03:50:02MT - usagold.com msg#: 65058) National Debt Still Rising http://www.publicdebt.treas.gov/opd/opdpenny.htm The National Debt continues to rise and this doesn't even include recently proposed allocations for 9-11 related events and tax stimulus packages put before Congress. And the "Budget Surplus?" There never was one. Look for the National Debt to rise substantially going forward. In a word - "Grim" Black Blade (11/10/01; 03:43:10MT - usagold.com msg#: 65057) Fed's Gramlich says mortgage default risk rising http://biz.yahoo.com/rf/011108/n08102492_1.html Snippit:WASHINGTON, Nov 8 (Reuters) - Federal Reserve Governor Edward Gramlich said on Thursday that figures showing a recent increase in tardy mortgage payments were worrying in the face of a weak economic picture. The Fed governor said increases in measures of late mortgage payments compiled by the Mortgage Bankers Association and the Department of Housing and Urban Development were a reason for concern. ``While the full economic implications of the 2001 slowdown and tragic events of 2001 are not yet known, these debt statistics may increase further as households struggle to meet their obligations in the face of significant layoffs,'' he said.Black Blade: Definitely it is better to be out of debt. It is a good feeling - a liberating feeling, to be out of debt free and clear. Unfortunately the society that we live in stresses "Buy, Buy, Buy…" to live for today and not worry about tomorrow. If at all possible, get out of debt, get basic necessities and food items, get Gold and Silver portfolio insurance, and be very selective with your investments. It is going to be a rough road over the next several months - possibly years. Get just as prepared as you would for a severe natural disaster or an extended period of unemployment. These warnings that we have seen from the FED governors lately should suggest that not all is well with the economy and with the "signs" such as the growing "Bone Pile," rising consumer and corporate debt, falling corporate earnings, etc. becoming more evident every day, that should be sufficient warning to all. Black Blade (11/10/01; 02:08:58MT - usagold.com msg#: 65056) Saudi's golden opportunity http://globalarchive.ft.com/globalarchive/article.html?id=011109001262&query=gold Snippit:Oil is not the only valuable commodity buried beneath the sands of Saudi Arabia. There is also a treasure trove of gold, silver and other metals, according to a new survey reported yesterday to the Geological Society of America annual meeting. The metal deposits are in the western third of the kingdom, which has largely been overlooked by geologists because of its low suitability for oil. Saudi Arabia supplies 11 per cent of the world's oil from wells in the north-eastern part of the country.Black Blade: Sand, Gold and Oil. Actually there is also potential of copper and iron ore deposits as well. They could take advantage of these resources someday as they will have to diversify out of oil. Mr Gresham (11/10/01; 00:00:14MT - usagold.com msg#: 65055) Waverider OK, I'll bite. Keep reading the Trail. FOA mentions several times this year the different ways in which future politics may intercept the profits from mining stocks.The question IMO comes down to, whose hole is the shiny in? Yours, or theirs. If it's still in theirs, well then, they'll expect you to do a whole lotta sharin' before you see it. "Many a slip, 'twixt..." ah, 'twixt mine and deposit slip? (How's that one?) ViewYesterday's Discussion.
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