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ARCHIVED DISCUSSION FROM 3/10/2001
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Sierra Madre
(3/10/2001; 22:41:48MT - usagold.com msg#: 49764)
I wish Journeyman would happen to read this...
Sir Journeyman, I have read with interest your postings, from I have learned that your background is in professional gambling. That you were successful in this career, is proof of your high intelligence.
All my life, I have been interested in monetary matters and especially gold.
Back in the 60's, I convinced my father that gold had to explode. He took his savings out of B of A and transferred them to a Swiss account, which I helped him open.
He got in at something like $36 oz., and was wise enough to cash out at $600+, and then put the money into bonds yielding some 15%. He was a shrewd man with money, shrewder than I. Anyway, at the time I had no spare cash for investing.
Another "once in a lifetime opportunity", as I used to call it, is at hand. At the time, late 60's, it was clear as day to me that that was a situation where loss was virtually impossible; and so it appears again to me, today. Thank you, bullion banks, CBs, forward sellers, bad-mouthers of gold, for allowing me to accumulate all these years! Heartfelt thanks!
Where does gambling come in?
I have the "edge" that you mention, Journeyman; indeed, we all have that "edge"; the "edge" in buying gold consists in this: we DON'T know an enourmous amount of things - but we know ONE thing, and that is our "edge" - that ALL paper money eventually depreciates, and gathers speed in its depreciation. Only gold remains.
It's been a long, long, time, but our day is coming. Perhaps soon, perhaps not. But, it shall come. As sure as day follows night.
Sierra
gidsek
(3/10/2001; 22:14:25MT - usagold.com msg#: 49763)
err Canuck ...
SWC is a PGM producer, not gold which was my point ... sorry.
gidsek
gidsek
(3/10/2001; 22:12:48MT - usagold.com msg#: 49762)
Canuck @ stock behaviour
Have a look at SWC Friday afternoon performance if you haven't already.
gidsek
Mr Gresham
(3/10/2001; 22:11:09MT - usagold.com msg#: 49761)
Tree in the Forest
Aye, that I did... chasing ancestors or wizards or such. 1975 -- my mother was reading Mary Stewart's Crystal Cave, as I stopped by on my way to the airport. I asked to borrow it, but she was too much into the story to give it up. When I finally read it after my two weeks travel, I found I had coincidentally tracked much of Merlin's story in my wandering in Wales and the West Country.
Stocks, Lies, and Ticker Tape
(3/10/2001; 21:42:49MT - usagold.com msg#: 49760)
Bonedaddy
I have wondered about that also. The eventual foreign flight from the fiat $ concerns me. Not in an economic way as is frequently levied on this forum with rates of every conceivable description, but in a geopolitical sense. It does not make much sense to be a belligerent to the country whose currency you hold as much of your "reserves". What is gained if you go to war and defeat that country? Talk about a loss leader! However in the absence of such an economic umbilical cord, the potential gain is obvious. To conquer today may not mean an initial military victory, but an economic triumph that softens the industrial capacity and will of the populace to counter their country's shrinking influence around the world. Vital industries can be lost due to "economics" and reliance upon foreign sources is the disease of the third world.
My paranoia gene tells me to keep looking over my shoulder if too many umbilical cords are cut, and then are attached to another "common currency". Interesting days lie ahead.
ET
(3/10/2001; 21:30:26MT - usagold.com msg#: 49759)
Bonedaddy
Hey Bonedaddy - nice to hear your thoughts!
"Was it any more foolish for a fellow in Asia to buy US paper than it was for a fellow in NY to buy Yahoo at $200 per
share?"
Har! No difference at all partner! True believers.
Stocks, Lies, and Ticker Tape
(3/10/2001; 21:16:30MT - usagold.com msg#: 49758)
Carl H
I hope you are right about confiscation. There are so many forms of gymnastic endeavors attempted by the gold biz regarding this. Pre '33, numismatic, "jewelry", etc. It is a weight around the neck of anyone who holds physical. I bet sales of physical would increase exponentially if there was no such concern. I am bullish on gold because I respect the lessons of history. Unfortunately those lessons also recount past confiscations. Too bad "freedom from gold confiscation" isn't the third certainty to go along with "death" and "taxes"!
SteveH
(3/10/2001; 21:06:02MT - usagold.com msg#: 49757)
This is good
www.kitco.com
repost:
Date: Sat Mar 10 2001 22:28
kapex (This was good!) ID#130128:
Copyright © 2000 kapex/Kitco Inc. All rights reserved
Date: Sat Mar 10 2001 11:38
dhahabu ( All it takes is one hedge fund ) ID#279447:
Copyright © 2000 dhahabu/Kitco Inc. All rights reserved
Despite what Uptick says about how liquid the gold market is, it is still a pretty small slice of the world market pie.
With all that has been bandied about on Kitco regarding collusion, cartels, cabals, governmental stifling of
markets, and with GATA in the background, the single most significant ( for me ) issue weighing in favor of
governmental implication in the gold markets has been the silence.
GATA and Frank Veneroso make a pretty good case for the short market. Is it collusion? Perhaps, perhaps not,
the argument is still bouncing around on center court. Since it is impossible to prove one way or the other right
now, we can only watch the silence.
Circumstantial evidence as well as real evidence of shorts in the commitment of traders reports indicate that the
short position is very real. Why these shorts exist and haven't been run is the silence I listen to. Everyone talks
about hedge funds as big fish that love to gobble up little fish and even other big fish if the opportunity presents
itself. What exactly has kept a big hedge fund from making a run on the gold market? In the Clinton years nothing
was what it seemed. Productivity gains, inflation numbers, dollar strength, market strength, it all was a little too
pat, government reports always seemed to reflect what the market wanted to hear. The links between Goldman
Sachs and Rubin, the circumstantial evidence that always seemed to show up the same names.
Was an order issued by the Clinton presidency, "Leave gold alone or the US government will …?"
In any case things have changed, we now have a new president and a new perspective. Has the order been lifted?
If it has, we would expect to see a hedge fund start taking possession of physical gold. Not that paper stuff that
there seems to be an abundance of. Lease rates would go up. The gold price would climb. You know, free
market stuff. Supply and demand stuff. It is too early to tell, but if that Veneroso 15,000 ton short position is
getting ready to be run, the fireworks are going to be pretty spectacular.
One writer this week indicated that the BOE gold sales are in fact a mechanism to hold the British Pound from
advancing against the Euro for trade reasons. Central Banks have been purported to be selling gold as a reserve
because it has no place in modern banking. Now we suddenly hear that the BOE doesn't want so much gold
because it may make the pound worth more against the European currency. So what is the REAL reason London
is selling gold? Is the story going to change? If that 15,000 ton short position gets run then gold as a reserve will
suddenly be in high demand by the Central Banks who just a few short months ago didn't think they needed it.
Interesting days indeed.
Chris Powell
(3/10/2001; 20:59:08MT - usagold.com msg#: 49756)
Sunday New York Times takes note of stirring in gold
http://groups.yahoo.com/group/gata/message/709
Sounds like they'd really prefer
not to believe it....
To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:
gata-subscribe@yahoogroups.com
Gold Trail Update
(3/10/2001; 20:58:12MDT - Msg ID:49755)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
Carl H
(3/10/2001; 20:48:49MT - usagold.com msg#: 49754)
Stocks, Lies, and Ticker Tape
In reply to your post yesterday regarding confiscation, I regard physical confiscation as unlikely. It was not all that successful last time around. I have seen a statistic that they only got about 10% of the gold that way. I think that this time around it will simply be taxing the profits upon sale as ordinary income. This should get them at least 20% of the take instead of 10%. I recall reading that the tax status of gold and silver bullion has been changed to ordinary income. Does anyone know if this is true?
Bonedaddy
(3/10/2001; 20:20:39MT - usagold.com msg#: 49753)
Megatron...
.... often I have wondered the same thing. What kind of idiot, you ask? The world is filled to overflowing with idiots of all kinds. I think the reason so many of them are willing to hold our worthless paper is that the only other choice they see is some "lesser nation's" worthless paper.
Was it any more foolish for a fellow in Asia to buy US paper than it was for a fellow in NY to buy Yahoo at $200 per share?
What would happen to the world economy if alot of people, all of a sudden, realized that the good ol' US of A was going to try and print it's way out of the Social Security debacle? Let that thought stop you cold for a moment! In just a few years time, that is exactly what will have to be done. No wonder the politicos like to drag out a lot of confusing charts and statistics when discussing SS. Yes, I believe there are as many kinds of idiots as there are fiat currencies. Let us be thankful that there are enough of them to keep the price of gold affordable for a little while longer.
I suppose they will soon say, " ALL YOUR DEBT ARE BELONG TO US!!"
Tree in the Forest
(3/10/2001; 19:56:42MT - usagold.com msg#: 49752)
Leigh, Galearis
Leigh: Lady Leigh you have the memory of a teenager! You must be 18. Am I a flatterer or what?<grin>
Galearis: Well you certainly are correct about the gold carry trade. There is no profit at these lease rates. What were they last, approaching 7%? So the message to the players is that this game is over. And you are right about things just hanging on. It's a house of cards and just a matter of time. Now all we have to do blow!
Cavan Man
(3/10/2001; 17:23:04MT - usagold.com msg#: 49751)
canamami 49738
Some us want to get out from under the gold equities we own; that's why. Will be visiting your fair city this summer. Thank you for the information some months back. CM
SteveH
(3/10/2001; 17:20:07MT - usagold.com msg#: 49750)
Summers quoted as saying current period more like
http://www.economist.com/finance/displayStory.cfm?Story_ID=526387
pre-1945 recession.
goldman sachs economists;not analysts mentioned too.
megatron
(3/10/2001; 16:53:27MT - usagold.com msg#: 49749)
Important Numbers
Keep in mind these numbers this week:
S+P 500- 1226. Very strong resistance at this level. If it breaks down below this for any extended period there could be some fireworks to the downside.
And of course later on, Gold-$334. Look out for fireworks above!
megatron
(3/10/2001; 16:47:49MT - usagold.com msg#: 49748)
Question
Can anyone answer the question of why there are so many foriegn holders of US debt who continue to hold it without a proper audit of the US gold holdings? What kind of idiot would hold that much 'paper' without a proper accounting?
Do they supply the figures to the govt officials but not the public?
Galearis
(3/10/2001; 16:36:28MT - usagold.com msg#: 49747)
@ topaz, a lease rate conjecture....
NO choice but to lease....
As Trail Guide alluded to, the carry trade is dead - and had its swan song with the Washington Aggreement. That was the end for this money tree for many. The rest (including the BOE auctions) are bail-outs and stall tactics to give time for some of those shorts to return the borrowed gold - and you can bet this priviledge is only extended to a favoured few.
To me, the spike in lease rates recently is the sign of another major relationship change that will affect the physical market equally as trumatically as the W.A. The ECB group now knows(?) that they have likely received (back) all the gold they are likely going to get. The POG, for whatever it means anymore, has been for some time now BELOW (inflation, inflation, don't forget inflation!)the level it was just prior to the W.A. I think the paper market HAS collapsed. How could it express a POG well below the bottom and even represent ANY aspect of normality. The other factor in the game is COMEX itself. It CANNOT cover the calls. We ARE there! The problem is seeing how long there, will be here, yes? (smile)
Bottom line: they have run out of liquidity in this market.
The paper market needs SOME liquidity to substantiate itself as real.
I expect another shift as dynamic as the old W.A. very soon. One can only speculate what form that might take.
Nobody is leasing gold now to make money. They are leasing and rolling over just to stay alive.
But I might be missing something. It has been known to happen....
Regards,
G.
Leigh
(3/10/2001; 16:31:05MT - usagold.com msg#: 49746)
Tree in the Forest
When FOA burned the stock certificate, he wasn't trying to give an "all paper will burn" demonstration, though it may sort of seem that way!!!
Leigh
(3/10/2001; 16:25:34MT - usagold.com msg#: 49745)
Tree in the Forest
TITF, I remember that! But I don't remember the date. It was late summer or early autumn 1999, right after a BOE auction. Goldfields had successfully bid on some of the BOE gold and made a public announcement about it, saying that they felt the gold was underpriced. FOA was so impressed by Chris Thompson and his brave action that he bought some GOLD stock and then, in front of some of his friends, burned the stock certificate (indicating he would never sell it).
Sorry I can't point you to a date, but that was the occasion. FOA did mention about it once or twice again after that.
Canuck
(3/10/2001; 16:22:24MT - usagold.com msg#: 49744)
@ canamami
Thanks for posting Don Coxe's conference call site. I always listen to his calls and for some reason my old 'favorite' did not work. I have marked the new.
Mr. Coxe's commentary on March 2 was most interesting. I follow his rationale re the increased liquidity in recent years due to 'speed of monetary transfer' but I have to question one of his points. Even if a currency flow is quickly available(liquid) say from USD to another the resultant US price of gold will rise, yes? He did 'skate' around the issue of simultaneous major currency issues whereby gold may (will) still be the alternative of choice.
I sense the simultaneous problems with Japan, England, U.S. and possibly Europe (in general) may be something Mr. Coxe would not want to discuss in the near future!!
Did you catch the slamming of the 'DUCK' in his article in todays National Post?
Regards,
Canuck
Canuck
(3/10/2001; 16:09:00MT - usagold.com msg#: 49743)
Japan's ailing financial system
http://washingtonpost.com/wp-dyn/articles/A44049-2001Mar8.html
Approximately a third to halfway through the article the question of choosing the hard or soft landing was ignored and 'no landing' was choosen.
If Japan now picks hard landing (to get the pain over and done with) how would this affect the US and US$?
Thanks.
Tree in the Forest
(3/10/2001; 16:00:24MT - usagold.com msg#: 49742)
Mr. Gresham
Did you really spend a nite in the car in a Welsh wood? Cool!
Tree in the Forest
(3/10/2001; 15:57:38MT - usagold.com msg#: 49741)
Beesting, Randy
Beesting, I find it very interesting that Au shares all dipped except GOLD. Maybe insiders know something. Didn't Trail Guide once tell us his share holdings (under duress I'm sure<grin>) and wasn't GOLD one of them? I did a search of the Gold Trail to see if I could find this info but couldn't find anything. Randy, do you remember where this info is or what TG said? Thanks.
Topaz
(3/10/2001; 14:26:15MT - usagold.com msg#: 49740)
Lease rates - an observation.
http://www.lbma.org.uk/2001gofo.htm
If you find conjecture abhorrent, scroll on by.
The link goes to LBMA lease rates page where we find this current "hike" is built on solid foundations and is more a gradual rise than a spike.
From (app) 1 Feb, the close-in rates have been grinding slowly upward and MK's "feeling" that the Clinton/Bush changeover has marked a fundamental change in the market is given much credibility by this.
If one compares the WA spike of 29-Sept 1999, we find 2 completely different "patterns" in place. (scroll down, click "home", go to "stats" click on 1999 in lease (gofo) box)
Gold carry trade is dead at these rates and I'm thinking that without metal to generate paper, those parties so inclined will be unable to provide the "basic ingredient" to move the market lower.
So IMO the achilles heel is now (1) those holding existing paper who "smell a rat" and try to convert to physical..and (2) Aussie hedged miners who, as of Friday, are on the rack for margin calls.
Pamp (the website) indicate a spike in rates is usually a precursor for a CB sale or somesuch so next week is shaping up as a "defining moment" in GOLD......Bring it ON!!
Mr Gresham
(3/10/2001; 12:52:48MT - usagold.com msg#: 49739)
Warren's Words
http://www.bearforum.com/cgi-bin/bbs.pl?read=121168
from Berkshire report: (follow thread to link to entire report)
"What actually occurs in these cases is wealth transfer, often on a massive scale. By shamelessly merchandising birdless bushes, promoters have in recent years moved billions of dollars from the pockets of the public to their own purses (and to those of their friends and associates). The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them. Too often, an IPO, not profits, was the primary goal of a company's promoters. At bottom, the "business model" for these companies has been the old-fashioned chain letter, for which many fee-hungry investment bankers acted as eager postmen. "
canamami
(03/10/01; 11:55:55MT - usagold.com msg#: 49738)
Question re possible inconsistency
If the POG is meaningless and "paper will burn", why all the excitement with the rise in the POG and the lease rates? I recognize there are different species of goldbug on the Forum, so some would be excited by the POG going up, and others not care. However, as individuals, I believe we all should strive to be consistent and coherent in our beliefs. One should not get excited by the rising POG if one previously opined that the COMEX price is irrelevant. Just my rant for the day.
canamami
(03/10/01; 11:49:28MT - usagold.com msg#: 49737)
Don Coxe's March 2, 2001 conference call
http://www.jonesheward.com/commentary.cfm
I post this link because the first 10:30 concerns gold, as does the entire period from 31:00 onwards in response to a question from Harry Bingham. I wonder if there would have been a difference if the call were dated March 9, 2001, given the continued rally in the POG and the lease rate increase.
admin
(03/10/01; 11:12:07MT - usagold.com msg#: 49736)
Announcement/Opportunity/German 20 Mark Gold Coins
http://www.usagold.com/onlinestore/special.html
We have secured the price on a large number of German 20 Mark gold coins and can hold the price now posted at our on-line store page for the weekend. We had considered taking the offer down with so much volatility in the market, but decided instead to secure prices and keep the offer up. Luckily we were able to secure prices this morning.
If you believe the gold price will be going higher Monday, here's an opportuniyy to lock in the price now by purchasing the German 20 Mark gold coins. This offer expires 7am MST Monday morning (3/12/01). Normally, there is a $5,000 maximum online order per customer per 24-hour business period or weekend -- roughly 60 German 20 marks. We are upping that maximum to $10,000 for this weekend only. If you have to use separate credit cards enter your orders for each card separately. There is a limit to the number of orders we can accept. We will be monitoring the on-line store and make an announcement here when we've reached our limit. Orders will be filled in the order received with a maximum of 500 coins offered for the weekend. So it is in your best interest to order early.
Background for the coin is provided at the above link which also leads you to our on-line order page. It's all secure and easy to use.
Of course, we don't have a clue what's going to happen Monday, but we offer the following updates from various sources to aid in your decision making process:
----------
"New York, March 9 (BridgeNews) - COMEX Apr gold settled up $5.4, or 2%, at $271.5 an ounce, ending near its intraday high of $271.7--its strongest level in two-and-a-half months. The move was linked to another spike in lease rates, pushing Apr past $270 resistance, which triggered call options at that level to be exercised. Friday was Apr options expiry, and there was open interest of 6,563 at the $270 strike price at the end of Thursday's session."
----------
"New York, March 9 (Dow Jones) - Comex Apr gold up $4.20 at $270.30/oz on buying by "trade houses others that can't afford to run shorts because unable to borrow it overnight" with short-term lease rates much higher, says bank trader. Notes profit-taking near highs by those who bought cheaper. Views $271/oz as breakout level. . . . Spot gold breaks $270/oz resistance with move toward $272, then $277 now likely, said Deutsche Bank analysts. US speculator short covering is to be expected prompted by high lease rates, they said. At $270.95/oz."
----------
UBS/Warburg, the Swiss bank, reports strong gold buying by same bank in both New York and Asian markets Thurs/Fri. Gold in badwardation. Market very volatile. Says UBS, "There is very little supply of options in the market at the moment and with the gold forwards at similar levels to the spike in 1999, the options market is very nervous that we may see gold spike much higher. . . . the usual sources of gold lending have lent all they can.Although there are undoubtedly other sources of liquidity out there to be tapped, this will take time to be mobilised – a number of days (weeks?) rather than hours. With liquidity now considerably impaired in the forwards and options market, gold looks now set to trade higher still."
----------
Using our on-line ordering facility, you can lock in your price now, if you so wish.
Thank you.
Canuck
(03/10/01; 08:00:07MT - usagold.com msg#: 49735)
@ beesting @ all
Many posts re: the whack of gold stocks 3:00-4:00pm yesterday afternoon.
At first glance it looks like a hedger/non-hedger affair but I don't think so. Went thru daily activity of a couple dozen stocks from 3:30- 4:00 and although it appears the hedgers took the hit mid-cap hedgers (ie:K.TO) actually held or went up.
It appears that the 'hit' was either:
a) the PPT taking a shot at the XAU.
b) traders locking in a profit weary of the week-end's
activities, possibly lease rates dropping due to release of metal.
Also,I am having difficulty seeing b) because many mid-caps actually went up at the close (AGE.TO, FN, G.TO). If the worry was a change of fundamentals why was it limited to the majors?
The hedge/non-hedge argument is too early to consider, IMHO.
The rise of POG from the mid-260's to low-270's will not impact any major hedgers. My knowledge is ABX will not see any difficulties until around 360-380 and PDG at around $400.
FN was a most interesting story; up a buck and AGE/AEM had a good day. As an aside the non-hedger PAA was flat to slightly up.
The scenario that I am looking for (and this is a major reach) is that the $360-$400 window is in sight thus the bailing out of the 'major hedgers'.
As Galearis so astutely mentioned the other day, "....don't hold the paper too long......" Maybe the paper clowns see the end?
I remain holding mid-cap non-hedgers and I remain holding the 'non-hedged', 'non-paper' metal. To my knowledge there are no liens/forwarding/call/put/options on the physical buried in the 'backyard'. (smile)
Have a nice week-end.
Canuck
Orville Goldenbacher
(03/10/01; 07:46:18MT - usagold.com msg#: 49734)
Prime rat ready to abandon sinking ship.....
http://ap.tbo.com/ap/breaking/MGAKTA8F5KC.html
Japan's Prime Minister Expresses Readiness to Resign
Cavan Man
(3/10/2001; 6:47:24MT - usagold.com msg#: 49733)
Sierra Madre 49726
Face East my friend.
Artie Farkle
(3/10/2001; 2:47:22MT - usagold.com msg#: 49732)
Seeker of the Grail
It seems to me that currency and fiat are not necessarily the same.
To me, fiat means print at will. Currency, if exchangeable for a specified amount of gold, silver, or some other commodity is not fiat.
Now I suppose that if the backing was perfect, There would be an exact one to one match. If a bill of currency was destroyed, the one to one match would be out of balance thus, one would have to have faith that the currency was regulated to hold the balance to as close to one to one as possible.
That said, one thing is for sure, gold or silver cannot be fiat in this world as we know it. : )
Old Yeller
(3/10/2001; 2:35:42MT - usagold.com msg#: 49731)
Sleep well,gold shorts
Soothing words from the experts in New York;
"strong dollar remains a cap on market"
"against all odds,in light of how much short covering commodity funds have already done"
"acknowledging gold's bearish long-term fundamentals"
Mr Gresham
(3/10/2001; 1:19:24MT - usagold.com msg#: 49730)
Mackay: Contents
http://robby.caltech.edu/~mason/Delusions/
OK, this was from his "Extraordinary Popular Delusions" work of 1852. Was just starting to recognize the writing style...
Mr Gresham
(3/10/2001; 1:14:28MT - usagold.com msg#: 49729)
John Law & the Mississippi Bubble: A "Distant Mirror"?
http://robby.caltech.edu/~mason/Delusions/epd_mississippi.html
called "a good read" by another poster...I dunno, it looks like fun for a quiet weekend hour, but I'll see in the morning after a rest...
"Some in clandestine companies combine;
Erect new stocks to trade beyond the line;
With air and empty names beguile the town,
And raise new credits first, then cry 'em down;
Divide the empty nothing into shares,
And set the crowd together by the ears." --Defoe.
Sounds like someone turning paper into their personal reserve of gold...
ski
(3/10/2001; 0:29:06MT - usagold.com msg#: 49728)
January Consumer Credit
The Headline: JANUARY CONSUMER CREDIT SURGED 16.1 BILLION DOLLARS. A 5.3 BULLION RISE WAS EXPECTED.
The last time I checked, Christmas and big holiday spending takes place in December; not January.
So what were these consumers spending their money on in January? My guess is: Natural gas and electricity bills!!! It would be interesting to see how many utility bills were paid with credit cards versus a normal month.
ViewYesterday's Discussion.
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