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ARCHIVED DISCUSSION FROM 5/10/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) beesting (05/10/01; 23:40:01MT - usagold.com msg#: 53391) Paper Money Finances War! Hi Sir Randy # 53362, thanks for responding to my post. I'll try to give a little more input to some of the points you have raised:Randy quoting beesting:<< you yourself have said, "Notice how the United Nations has not enteredmilitary conflicts in many years....WHY?? Answer, because military conflicts cost big money.">>beesting expansion of original thought:It's my understanding that Japan and Germany after WWII had new Constitutions drawn up forbidding military action on foreign soil.( Wouldn't it be nice if other nations made amendments to their Constitutions forbidding military action on foreign soil?) Most of the other members of the United Nations are also members in good standing with the IMF/World Bank who have many of them owing excessive amounts of foreign(paper) debt, IMHO in order to not accumulate any more debt most of these nations will only enter conflicts on their own soil. Randy:<<Are we to therefore conclude from your words that paper money is the more effective brake on wars of size?>>beesting:Quite the contrary Sir Randy, here are some of Ron Pauls words,I agree with his writings, begin quote:"Although it did not become apparent for decades, the Federal Reserve Act(1913) made possible the massive inflation necessary to finance our tragic entrance into WWI....etc etc. And(I had to read this twice) If a country inflates((Prints excessive paper money using Gold as collateral)) under a GOLD standard, Gold flows out of the treasury , hamstringing the government."*** Since a Gold standard enables the average person to restrain the government's attempts to inflate, control the economy,run up deficits, and fight senseless wars, the central planners had to eliminate this fundamental American freedom to own Gold....etc.etc End of Ron Paul quote.(talking about the Gold reserve act of 1934 which has since been repealed)***Lets see if we can elaborate on Congressman Pauls words a little bit.I take this statement to mean, if every American is using Gold in everyday transactions, the Department of the Treasury would be forced to issue "paper money,backed by nothing, as they did in the Civil war(Greenbacks) and wars are supposed to be approved by congress and the senate.....And We the People.(((My very favorite bumper sticker from the Viet Nam days.....""What Would Happen if Governments Declared War, and Nobody Showed Up""?))) Here is what Congressman Paul said about the greenback, quote: During the greenback paper money inflation of the Civil War, prices rose 183% while wages went up only 54%. During WWI inflation, prices rose 135% and wages increased only 88%.***When greenback-denominated prices rose during the Civil War, GOLD PRICES(Gold still circulating, especially in California) DIDN'T GO UP, so it was obvious to everyone what the cause of inflation was(PAPER MONEY!)...And this,,,, To finance our Revolutionary War, the Continental Congress issued paper money in great quantities. Over a period of about 4 and 1/2 years , the Continental currency fell from a value of --One paper dollar per one Gold Dollar, to about 1000 to one." End quote.beesting again:Lets see if we can tie together another event concerning Gold and Wars,,,Oh yes, wasn't the U.S. 1971 Gold default right in the middle of the Viet Nam War? Coincidence, I think not. Even with paper dollars circulating worldwide in ever increasing amounts, the proud U.S. Treasury defaulted on Gold. (International settlements were still made in Gold) Congressman Paul says, if the U.S. people were still using Gold in every day trade as mandated in the Constitution, the Viet Nam War may never have been financed by the U.S. taxpayer.... The United States(Read Taxpayer) has Never Been out of Debt Since the Civil War!!! Randy again:<<And yet in your concluding remark, you have indicated otherwise.Help me out here, beesting.>>beesting concluding remark from previous post today:<<So, lets put the debate(Gold vs Paper) into a different context lets say a Gold standard helps to prevent wars and a paper standard promotes wars and war like activities. Now, which would be your choice?>>beesting final comment:It seems obvious to me from the above examples, a paper money monetary system has been used in the past to finance all modern wars, sometimes using Gold as collateral to print paper money.However I think Congressman Paul makes a very good case when he states Americans on a Gold coin standard would balk at financing Wars on foreign soil, because Gold would come out of taxpayers pockets instead of paper. If you think people try to find tax loopholes now, using paper money, imagine what it would be like if we did use Gold coins for money and the majority of taxpayers understood what is talked about on this forum. By the way, those early U.S. Wars were fought at a time when there was no individual income tax, even the WWII individual taxes were very low.Thanks for Reading...off to bed....beesting. Black Blade (05/10/01; 22:51:20MT - usagold.com msg#: 53390) Market watch: Energy futures prices rise with gasoline market concerns http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=TOPST&ARTICLE_ID=100615 Snippit:HOUSTON, May 10 -- Energy future prices rallied Wednesday on international markets as traders reacted to a smaller-than-expected build in US gasoline stocks and reports of refinery problems in the Western Hemisphere. Wednesday's market reacted to that, along with reports of problems at Sunoco's Point Breeze refinery in Philadelphia, and speculations that floods and power outage would disrupt production at two Venezuelan refineries.Black Blade: The supply chain is somewhat in a precarious position where almost any miss-step could push energy prices higher. A new refinery problem could pressure prices because refinery utilization rates are maxed out and reformulated grades must be ready to be in place prior to the Summer months (especially in California and the Mid-West where prices are expected to be very high regardless). Transportation of goods will be passed on to the consumer and in turn fuel inflation. Buena Fe (05/10/01; 22:51:13MT - usagold.com msg#: 53389) The Spin http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOvtcnRS8RXVybyBQ 05/10 23:29Euro Poised to End Worst Week in a Month After ECB Cuts RatesBy Miki Anzai and Mari MurayamaTokyo, May 11 (Bloomberg) -- The euro was poised to finish its biggest weekly loss in a month, as traders said an interest- rate cut by the European Central Bank yesterday was so unexpected that it hurt the bank's credibility as an inflation fighter.............. WIM HAS GOT TO BE FUMING OVER THE SPIN THAT THE "CABAL" DESPERATLY EXUDES EVERY TIME HE MAKES A MOVE (OR DOESN'T), I THOUGHT THE EURO WAS GOING TO GO UP IF THE ECB CUT RATES! HEE HEE..MY GUESS IS WIM IS GOING TO ENJOY THE LAST LAUGH SHORTLY..........MY BET.....BEFORE THE END OF MAY WE GET THE FIRST MAJOR HICKUP IN THE PERCIEVED VALUE OF THE US BANANA. ORO (05/10/01; 22:38:17MT - usagold.com msg#: 53388) Randy - my regs Thanks Elwood for pointing it out.My rules are:1. contract with a bank be enforced.2. bank discloses what it does till the bank official is satisfied that the depositor knows what portion of his gold will be kept on reserve.These are common law rules that predate all existing governments with the possible exception of Switzerland. (The Brits changed their system).The one with the legalisms and twisted law are you, FOA, and all who support the ECB + hobbled gold concept. It is they who need to impose restrictions on what people want to do with their gold. The protocols FOA imagines are simple will turn out to be devilishly complex because a debt is simply a type of future delivery contract where the deliverable is a monetary unit. Putting an order for gold coin at USAGOLD obliges this establishment to ship gold coin within a certain time of receiving my tradable - most likely to be a dollar denominated instrument of some sort.A comment on oil as money sits in one of my old posts to FOA. It is a commodity with a falling marginal utility, great bulk, and not at all fit to be a money. The only form in which it can be used as money is as oil notes, redeemable in oil within some time of demand and issued by oil companies, bankers, speculators, etc. and probably organized in mutual fund form to aggregate what is a variety of different oil grades. Even then, having oil as a money leaves you with only those extremely large units for delivery. Oil reserves in the ground would be traded in this form, but what do you do when oil obtains a monetary premium - a value above its value as the input for distilation? Why, you have reconstituted coal oil and shale oil coming up in the wings with $40-50 production costs, and tar sands profitable already, and it would replace oil in actual use because oil is too precious in the ground where it can be used as money. In order to bring oil back into its relative pricing with competing products (for use as the distilate precursor) you would need bankers and oil companies to expand the oil note supply to the point where the monetary premium was diluted enough so that someone could use it for the purpose that gave it value in the first place. The dilution would bring about the familliar condition of there being waaaay more notes than there is known oil. As oil depletes from use, the leveraged oil note issuers would scramble to find more oil, and would eventually succumb to bankruptcy as there would be none that could be extracted at a cost lower than extraction from competing products. Oil notes would then become worthless. Gandalf the White (05/10/01; 22:31:55MT - usagold.com msg#: 53387) Right behind you and Peter of the House of Asher, MK ! http://www.thoseAholeswillpaydearlysoon.com! USAGOLD (5/10/01; 19:13:12MT - usagold.com msg#: 53372)Auspec. . . . Gotta love ya, good buddy.------I hereby nominate this url for CLHE-HoF (Hall of Fame) and looking for enobled seconds from this esteemed table. It is fitting. It begs to be done.++++++I too second this for the CLHE-HoF !<;-)PS MK --- Calling to SPOT right now. Black Blade (05/10/01; 22:31:42MT - usagold.com msg#: 53386) Cooler weather gives Calif. a break from blackouts http://biz.yahoo.com/rf/010510/n1078401.html Snippit:SAN FRANCISCO, May 10 (Reuters) - Cooler weather lifted some of the load from California's straining power grid on Thursday, sharply reducing the likelihood of rolling blackouts, state energy officials said. Though blackouts look unlikely over the next few days, the ISO warns May remains a tough month, with many power plants shut for maintenance needed to put them in top shape for the hot summer months ahead.Black Blade: Now that Summer is about to start, that little bit of confidence and very short repreive will soon evaporate with the return of normal higher summertime temperatures. Actually, I have eaten roasted Grasshoppers in SE Asia. OK, they were actually crickets, but the same thing really. When one is a guest, it is preferable not to offend the host - so "yummy these crickets are good." We are about to see some roasting in California soon and though I don't intend to eat Californian Grasshoppers, it too will be quite an "interesting" experience. These power failures will take a toll on the World's sixth largest economy and the shockwaves will ripple throughout the US economy (and beyond). A little gold could go a long way. Just waking up (5/10/01; 22:19:43MT - usagold.com msg#: 53385) @ Randy & FOA Dear Randy and FOA,I have been reading your arguements against a classical gold standard and for a dual system of fiat and "Freegold" Your main argurment is that because of credit expansion in a gold standard, the purchasing power of physical gold gets diluted and deprives us of a safe place to store wealth. Yet, it seems to me, that this will happen in your system also. Will not futures, options, forward sales and leasing develop under your envisioned system? Can you outlaw all these? What will be the cost? Will not some other form of paper derivatives based on gold develop?You say we are stuck with fiat for the rest of our lives, I agree (it would just about take divine intervention to change that!). But it would be almost as hard to put an end to paper gold. It would take an historic, unified, concerted effort of all the worldwide powers-that-be to put an end to paper gold. I believe we will be living with paper gold the rest of our lives also. Why would the-powers-that-be want to give us a refuge from their fiat through which they can rob us?You say the paper gold market will fail. What then? Just as with the silver debacle of 1980, there will be bankruptcies, defaults and lawsuits, but the system will go on. There may be a few rule changes to calm everybody down, and then it will be back to "business as usual".In response to your question about American wars and fiat: the Revolutionary War was financed with fiat. Hence the saying, "not worth a continental" and the clause in our constitution "forbiding the states to make anything but gold and silver, legal tender in payment of debt" Both the North and South financed the Civil War with fiat. America was the only combatant in WW1 to manage to retain their gold standard. One of the first things Hitler did when he came to power was institute the death penalty for gold possesion. A couple years later FDR confiscated our gold. Within a decade the whole world was at war.Fiat doesn't cause wars, human nature does, but fiat facilitates them.Kind regards,Bob Black Blade (5/10/01; 22:14:01MT - usagold.com msg#: 53384) PGM Market Report https://www.sogemin.com/website/Reports/new%20platimum.pdf PGM market report Black Blade (5/10/01; 22:12:35MT - usagold.com msg#: 53383) Silver Market Report https://www.sogemin.com/website/Reports/new%20silver.pdf Silver market report Black Blade (5/10/01; 22:11:11MT - usagold.com msg#: 53382) Gold Market Report https://www.sogemin.com/website/Reports/new%20gold.pdf Gold market report. Black Blade (5/10/01; 21:59:57MT - usagold.com msg#: 53381) Fewer Americans are saving for retirement amid falling market - Fewer are confident they'll have the funds they need http://www.msnbc.com/news/571266.asp Snippit:THE WALL STREET JOURNALMay 10 — The drubbing in the stock market in the past year, as well as growing concerns about the future cost of medical and long-term care, are taking their toll on workers and their preparations for retirement. A SURVEY to be released Thursday by the Employee Benefit Research Institute and others finds that fewer Americans are saving for retirement, fewer are confident that they will have sufficient funds to live comfortably in retirement, and fewer have tried to calculate how much money they need to save for later life.Black Blade: With fewer funds flowing into those retirement funds, a little more air is escaping from the bubble. Wonder how many have portfolio insurance for what they already have invested? Consider that Social Insecurity won't be there for most of today's working Americans. Already there are proposals to extend the retirement age a few years. It is the old carrot and stick game. As many approach the carrot - put it just a little further out of reach. Good scam though! Black Blade (5/10/01; 21:43:42MT - usagold.com msg#: 53380) Natural Gas and Oil Inventory Data Camel earlier today asked for some injection data, this is the best I can do on short notice - Week ended April 27 Crude oil prices have fallen back a bit as expected during the usual Spring build up of oil stocks. US crude inventories rose 8.3 million and 6.3 million barrels during the week ended April 27, vs. the previous week, depending on whose numbers one follows. The American Petroleum Institute and the Energy Department never agree on the data. Either way, oil inventories are up about 7% over last years levels. The problem isn't so much oil but how to process enough of it. Refineries are running flat out and many are due for Spring maintenance. June Natural Gas fell as well due to a rise in inventories bigger than expected. This also tends to occur in the Spring, yet this large increase in NG inventories was unexpected. The American Gas Association (AGA) said that NG inventories as of the week ended April 27, rose by 102 billion cubic feet to a total of 850 billion cubic feet. The AGA expected an average 85 billion to 90 billion cubic feet of natural gas to be added to inventories. In fact this helped to crush NG prices this week as a year ago NG inventories rose only 32 billion cubic feet. US stocks are still 30 percent below the five year average during the same period.Exploration and production of NG proceeds at a frantic pace. If supplies can be sufficiently built up before the big draw-down this Summer, then the question is whether there will be enough for the huge draw-down for the Winter heating period. Remember that 70% of US homes are heated by NG - not heating oil. Simmons and Co. Intl. Had done research where insufficient NG will result in numerous deaths (in the thousands) during a Winter cold spell. This obviously would impact the elderly and very young the hardest. The Summer draw-down will occur as the nation fires up the air conditioning where an additional 20% of electricity is consumed. It still looks like an ugly prospect with eventual higher NG and utility rates hitting companies earnings and consumers pocketbooks. The days of the phoney baloney market rallies are numbered. It would be prudent to build up those golden lifeboats for smooth sailing.- Black Blade Elwood (5/10/01; 21:03:40MT - usagold.com msg#: 53379) Randy (@ The Tower) (5/10/01; 18:26:42MT - usagold.com msg#: 53369) --------"I say, when the bullion banking system falls AGAIN (and it will) and the true value of gold is revealed in a moonshot, why should we tolerate the bullion banking system to be rebuilt so as to repeat the cycle of destruction? In the past, ORO has proposed a laundry list of new rules and regulations that he feels would keep the system stable. "-----Oh? Randy, could you reference a post where this occurred? I normally read this board every day, and I seemed to have missed that one.I love chucking water balloons just as much as the next guy, but this ain't that.Oro, your reasoning is sound, but as long as there are "large" traders willing to accept the fiat in trade for their real goods then there will be an exchange value for the fiat. Surely you realize that these large traders understand the fiat just as you do, right?Alternatively:"There would be an inevitable tendency for the less marketable of the series of goods used as media of exchange to be one by one rejected until at last only a single commodity remained, which was universally employed as a medium of exchange; in a word, money."From Ludwig von Mises, Theory of Money and Credit, pp.32-33."Just as in nature there is a great variety of skills and resources, so there is a variety in the marketability of goods. Some goods are more widely demanded than others, some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability. It is clear that in every society, the most marketable goods will be gradually selected as the media for exchange. As they are more and more selected as media, the demand for them increases because of this use, and so they become even more marketable. The result is a reinforcing spiral: more marketability causes wider use as a medium which causes more marketability, etc. Eventually, one or two commodities are used as general media-in almost all exchanges-andthese are called money."Murray N. Rothbard, What Has Government Done to Our Money?Oro, taking into account man's willingness and ability to use paper substitutes, what is the more marketable item today: gold or oil?Do you see that the world is under *two* bubbles, not just the one created by the inflation of the fiat dollar? There's another *huge* bubble. It's the one upon which the entire production structure of the world has been inflated. Cheap oil is what underpins it. (pun intended)Could it be that it's not the governments that are foisting these fiats upon the world, but the world's suppliers of oil who are insisting on the fiat in order to keep gold affordable? Can we think of it as "printing" oil?Thanks for your thoughts,Elwood megatron (5/10/01; 20:25:00MT - usagold.com msg#: 53378) Galearis/Tree /'Monetary metal' Sorry for the sarcastic post. I am in deep with silver, baby! Got those palladium profits locked down from last year(paper, by the way!) and have burned an image of the 5 year chart in my retina's, to be superimposed over silver chart!(10X over that period!) It's gonna be nuts! Peter Asher (5/10/01; 20:02:38MT - usagold.com msg#: 53377) Second to your motion, Michael! Maybe it you should file it for a new Forum domain name $:-) VanRip (5/10/01; 19:54:54MT - usagold.com msg#: 53376) Bill Fleckenstein's Column For those interested in Bill Fleckenstein's observations regarding gold, here's today's take:<God Save The Yellow Mastiff For those seeking alternative currency, it's been tough to find one. That's why we always seem to come back to gold. On that subject, next Tuesday is the BOE (Bank of England) gold sale. It's going to be very interesting to see how gold behaves behind that. Looking at the gold paper market at the Comex, it's clear that all the shorts have run out. Now some of the "black box types" are long the metal. In the past, whenever we have gotten to this juncture, gold has failed miserably. We've now got a little bit of froth in the market. If gold can do well after next week's BOE auction, that may indicate that things have in fact changed. Stay tuned.> Hill Billy Mitchell (5/10/01; 19:40:33MT - usagold.com msg#: 53375) Knallgold @ # 53332 per Derb link Most efficient cost of production per ounce of gold $250 per ounce since 1992 as per Derb link.Can someone tell us what the most efficient cost of production of silver per ounce is today.TIARespectfully,HBM Tree in the Forest (5/10/01; 19:33:37MT - usagold.com msg#: 53374) Randy-Comex gold Hi Randy. You ask so many questions and here I am a man of few words!<grin> I shall try to answer your post but it will have to keep til tomorrow. Tonight we must address some interesting Comex action today. June gold has an enormous open interest of 73,278 contracts and furthermore it's up today about 6000 contracts. This is a time when traders are thinking about holding, selling or rolling over June contracts, not adding new postions! FND is May 31, 3 weeks away. People holding into June are frequently considering taking delivery. According to sector over at GE, someone is desperately trying to prop up Comex with additional gold and the word is getting out that there's a gold shortage. Uncle Henry is sitting in the tub and getting very nervous Randy! He's wondering if his gold is safe! It's 10 o'clock. Do you know where your gold is? Rockgrabber (5/10/01; 19:20:26MT - usagold.com msg#: 53373) We are learning the hard way My faith rests for now on words such as these.Mr Jerimiah said what he new so well. He knew this, and did not even have near such insight as us. Here the words are.."I well know, O Jehovah, that to earthling man his ways do not belong. It does not belong to man who is walking to direct his own step." USAGOLD (5/10/01; 19:13:12MT - usagold.com msg#: 53372) Auspec. . . . Gotta love ya, good buddy.Keep trying this link, but I can't understand it -- it doesn't work for some reason:http://www.thoseAholeswillpaydearlysoon.com!I hereby nominate this url for CLHE-HoF (Hall of Fame) and looking for enobled seconds from this esteemed table. It is fitting. It begs to be done.Gandalf, are you out there? Goldfly? Spot? Where is Spot anyway? By the way, Gandalf, loved the photo you sent me (of Spot). Perhaps, you can make it available to all???Onward, fellow 'meisters. auspec (5/10/01; 18:44:39MT - usagold.com msg#: 53371) Corrected Link http://www.thoseAholeswillpaydearlysoon.com! . auspec (5/10/01; 18:42:54MT - usagold.com msg#: 53370) WHEN? http://www.getreadyforsomerealfun3rdqtr01! When was the last summer you remember that had a strong gold rally? When was the last time your gold/resource stocks started multiplying in price before your eyes? When was the last time it was consistently difficult to get through to your resource broker on the phone? When did your stockpile/hoard last appreciate 10 to 20% per month? When did you last experience "greed" instead of "fear"? When did your spouse last say; "Wow, great job HONEY". When did your friends last ask for your personal investing advice? When did you last use the black ink much more than the red ink? When did you last have a 5X? 10X? 25X? When did you last SELL HIGH? When was the last time you had a capital gains "problem"? When did you last celebrate a MAJOR investment profit? When did you last feel like you couldn't miss? When did you last................???Be ready, dammit! Randy (@ The Tower) (5/10/01; 18:26:42MT - usagold.com msg#: 53369) Tree in the Forest, what are your thoughts? You state a course of action:"If I store my wealth as gold, in the allocated vaults of an electronic gold bank and make my purchase with a plastic card and I earn my "interest" through an electronic broker via stocks, bonds etc., what do I need debt based reserve banks and their income taxes for?"First, banks don't charge income taxes. I believe your beef is more properly directed at the bloated size of government on that account. Governments are truly too fat, as are taxes taken in exchange for the low quality of services being rendered.Second, if you store your wealth as gold, within the framework of a standard banking system you have given me and all others the power to destroy the purchasing power of your savings. We could do this by borrowing similar gold to yours as a form of "checkbook gold" and spending it. The system inflates and then evolves upon the political will resulting from the inevitable dislocations that develop over time as economies cycle with the collective mood of it participants. To be sure, let me say this. Right now we have a commericial fiat currency banking system, and we also have a bullion banking system. They each inflate and thus destroy a degree of the purchasing power of the accounting unit they employ. While there is no upward limit to which paper can be inflated, there is a practical limit to which banks can inflate the contract gold supply before runs commence on the banks by their depositors. Do you currently have a leased gold account earning interest (or deferring your storage fees)? If so, you will surely learn this lesson at a dire price in lost physical gold.Because bullion banking has succeeded in destroying the current apparent value of all gold under its mountain of near-gold derivative contracts and accounts, now is a very prudent time to take your gold off the table, or to buy other people's gold deposits put out on lease as your civic duty to teach them a hard lesson.I say, when the bullion banking system falls AGAIN (and it will) and the true value of gold is revealed in a moonshot, why should we tolerate the bullion banking system to be rebuilt so as to repeat the cycle of destruction? In the past, ORO has proposed a laundry list of new rules and regulations that he feels would keep the system stable. Methinks he is more concerned about preserving bullion banking as an ongoing venture than he is about securing personal property rights. Perhaps he is merely preserving a vested interest in this field of study. What say you, ORO? Must you press down upon the brow of mankind your crown of bullion banking thorns? Must you crucify our tangible savings upon your cross-referenced gold banking ledgers? (With apologies to WJB)Tree, wouldn't you welcome the simple revocation/alteration of current facilitating legislation that allows our gold value to be jeopardized by banking corporations as we have seen throughout modern history? In my view, gold does NOT need the repayment obligations of loan contracts to give it value as claimed by the vocal gold standard shills for the bullion banking system. A wholly-owned savings asset as a safe haven from the fiat currency banking system shall be an adequate usage to give gold a very high and stable value. My view, and time will tell, but I am prepared today. Are you prepared for either outcome? JMB (5/10/01; 18:19:45MT - usagold.com msg#: 53368) SECTOR @ G-E has mentioned our TREE in the FOREST A very interesting post @ 18:06 Randy (@ The Tower) (5/10/01; 17:26:29MT - usagold.com msg#: 53367) More on monetary measurements (another mini-course in monetary policy for those who want it) http://www.ecb.int/key/01/sp010510en.htm The broadest measure of the U.S. money supply, M3, does not include certain dollars that have flown outside the U.S system of banks located at home and abroad. When you hear people refering to eurodollars, it is these U.S. dollars abroad to which that term refers.Hmmmmmm... I wonder if the ECB will refer to their owncounterpart currencies that are abroad as euroeuros. Or maybe dollareuros. Naaaaah...that's just stupid. Perhaps they will call them asiaeuros or amerieuros?Well, whatever they decide to call them, the ECB is now able to MEASURE them (they couldn't before). And just as is done with our own Fed's exclusion of eurodollars from the M3 measurement, the ECB is able to identify the growing quantity of "foreign-euros" and thereby gain an adjusted, corresponding view of the M3 money supply within the currency union. I wanted to ensure you understood that so that the following comments make sense, and you can thereby draw your own conclusions regarding the implications to the dollar and its use-displacement as I alluded to in the earlier ECB rate cut press conference.This follow-up is from the question and answer session as reporters posed questions to ECB president Duisenberg. Keep in mind from earlier, the ECB has within one pillar of montary policy strategy a reference value growth rate for M3 of 4.5%. Sorry this is so long, but once you **understand** rather than memorize a process, the working knowledge is yours forever. (That is, until the rules of the game are changed.)---------------Question:Mr. President. If the money inflow from foreigners was large enough to distort M3 figures upward by 0.5 percentage point as you said, should that not have pushed the euro exchange rate a lot higher? Or, put the other way round, has the euro been more or less stable recently at its present rate of 88-89 cents because of the inflow of money from outside?Duisenberg:Now, there must be a misunderstanding here. I talked about the distortions which occurred, and which we have already known for months that they were there, but we were not certain of their amount or of their dynamic development, let me call it that. It concerns the holdings of mutual funds, issued by euro area MFIs, by non-euro area residents. In the past we were not able to distinguish them from resident holdings of the euro area. We now are. So, it is a refinement of our statistical apparatus. It has taken us a fairly long time. But we are now - and it is only a matter of a few days I am talking about - able to identify them. You will find a full description of the technical details I am talking about in next week's Monthly Bulletin, in which a special box will be devoted to this topic, which I hope will remove your misunderstanding. From now on we will publish the amount of this distortion every month....However, there is one significant thing, which is included in my Introductory Statement. We also had the impression when we finally got the results a few days ago - and to be quite honest this was also new for me - that the magnitude of this first distortion I mentioned, which on average is about 0.5 percentage point, has been, and is gradually, INCREASING over time. [emphasis added]Question:Why is it a distortion?Duisenberg:Because it gives it a distorted image of what the M3 figures really are. It is not a distortion in the sense that it was wrong. But we are now in a position to identify elements which should not belong in the definition of M3, which so far we were not able to identify, even though the quality of our statistics is very high indeed. Now we are able to identify them. And also because, as I said, it is not only the absolute magnitude, but also the change in size of this phenomenon - if I may call it that instead of a distortion - that has monetary policy implications. The dynamics of M3 corrected seem to be less that we thought earlier.Question (translation):...is there any scientific way of explaining why two or four weeks ago, despite the fact that nothing much has changed since then, you seemed to assess things differently. I mean, four weeks ago we had the same situation as today, the same two weeks ago and the same today. Why did you change your assessment?Duisenberg:...Under the first pillar, we have this new phenomenon of correcting the, may I call it again, dynamics of the M3 developments. That is new. This makes us believes that, although before we thought we were approaching the reference value, now we know that, in fact, we have already been under the reference value of 4 1/2% for quite some time and increasingly so. So that, for example, is in itself new.Question:... if you take into account your new correction of M3, does it mean that actual M3 is only slightly over 4%?Duisenberg:If you take the precise correction: for the last figure we have, for example, the March figure for M3 - although that is only a one-month figure - as published was 5.0%. The correction for March can be put at 0.6. So that means that effectively we would be at 4.4. On average for the last three months, e.g. the figure for the period from January to March was 4.8 and the figure for the correction was 0.5. So that would take us to an average figure as related to the reference value of 4.3.---------------------------Bottom line: shed your own dollars for the safety of gold before the rest of the world rushes en masse to shed its holding of eurodollars. Such a flood will build upon itself and drastically impact the favorable exit exchange rate you can get still today. Tree in the Forest (05/10/01; 16:50:31MT - usagold.com msg#: 53366) Camel, PH in LA I ride to the defense of sir ORO. Not that he needs me to defend him. But I must say that sir ORO's "agenda" is, in fact, the Libertarian agenda, one which is near and dear to the hearts of many who post and lurk here. If the schism between governments and banks that Davidson and Rees-Mogg have postulated continues to widen, we may see a loss in the perceived value of both organizations.Central bankers are not gods, nor are they pond scum. They are somewheres in between as are we all. I think they must cringe every time a bozo bureaucrat from Brussels open his mouth. This is no insult to Europeans; we have the same here in the US only we call them beltway bozo bureaucrats. The bankers would probably be happy just to be allowed to do their job without political interference.Both government and banks are trying hard to prove their worth to us. As time passes and the internet and other technologies explode, the value of these two organizations diminishes. They are the blacksmiths of the modern era, slowly becoming an anachronism. The average sheeple doesn't see or understand this but it is true nevertheless.If I store my wealth as gold, in the allocated vaults of an electronic gold bank and make my purchase with a plastic card and I earn my "interest" through an electronic broker via stocks, bonds etc., what do I need debt based reserve banks and their income taxes for? The banks know this and eagerly seek to become electronic brokers as their original business slowly fails.And if the Fed and the Commercial Credit System derived from the Fed fail so that government can no longer bypass the constitution and hand out patronage, what do I need government for? So they can use fiat money to fund more wars in an effort to show us that we need them?These changes happen so slowly that we are hard pressed to see them. Only the perspective of history will illuminate the momentous events and tortured travails of our time. Randy (@ The Tower) (05/10/01; 16:12:58MT - usagold.com msg#: 53365) Federal Reserve Governor Laurence Meyer to a banking conference in Chicago: http://biz.yahoo.com/rf/010510/n10578535.html "There seems to be a widespread feeling, which I share, that additional, or at least improved, efforts toward limiting moral hazard, enhancing market discipline, and lowering taxpayer liabilities should and can be made." On the topic of banks being seen as too-big-to-fail, Mr. Meyer wanted regulators to ensure as a safegurard against imprudent institutional conduct "that stockholders can lose all, that existing management can be replaced, that uninsured creditors can suffer losses, and that the institution can be wound down and possibly sold, in whole or in part, in an orderly way."Reuters reports further that "Meyer's comments echoed those of Fed Chairman Alan Greenspan, who addressed the conference earlier on Thursday. Greenspan said reforming the financial safety net of deposit insurance and regulation should remain on policy-makers' agendas."But nevermind me. These are just more comments from, as ORO puts it, "derelict monetary boobs such as occupy the higher reaches of central banking and politics." Tree in the Forest (05/10/01; 16:04:37MT - usagold.com msg#: 53364) Silver not a monetary metal The "silver is not a monetary metal" mantra is very much akin to the "gold is a barbarous relic" bullsh*t. IMHO they are both propaganda. I say again, if it is so, then why the heavy manipulation? Why not let it trade like aluminum? And why is our illustrious ex-president still making trips to China and South Africa as if he was still in power and attempting to control the price of silver and gold? Maybe he is still in power. Or represents those who are. Mr Gresham (05/10/01; 16:03:05MT - usagold.com msg#: 53363) (No Subject) Knallgold: That Derb post was a keeper; lots to figure out -- can anyone else explain it?Invisible Hand: "I thought that when the reward of an asset diminished, its price decreased also." The traders must be infected with "Amerimania"? They will play until they run out of play money. At mania extremes, does the "invisible hand" come largely in the form of an empty wallet? (Later:) "Rationality restored" -- when I was young, I knew everything, too. Hmmmm -- I wonder what the attitudes toward wealth, savings, retirement among the Euro-Boomers, as opposed to US counterparts? Do they possess a "sandwich" mentality, with two generations of "socialism" overlaid upon centuries of wealth consciousness, soon to be flipped upon entering a new, and final, stage of life?Galearis: Well-spoken. "Human beings are extraordinary in their capacity for denial ...That is why the majority applaud interest rate cuts." Which is to say that savings in interest-bearing promises to pay will be a bad proposition for years to come, especially now that a should-be-saving generation (Boomers) is mired in debt along with its younger cohorts, and will beg for release. Some will gain it, and then find that the inheritances that might have comfortably sustained them have been decimated on arrival by these same forces.PH in LA: You've got a great way with questions. Columbo always gets 'em on the last turnaround one, "oh,... just one more question..." It will be fascinating to someday learn just what niche those two actually have in all this -- there is enough of the aficionado showing in FOA to suggest only loose attachment to an official structure, but I'm sure he'll come back with something about "The Patient Art of Growing a Tree." Or a Gold Advocate. You gotta admit it, man: The Zen thing works, makes us think, answers don't.He works hard, makes few mistakes, earns credibility the old-fashioned way. I'll repeat: this [Forum with its All-Star team] is that post-grad degree I never stuck around for, and further, it's watching the Great Game for our time, and we're in on it as participating observers. That's about as good as it gets.beesting: It heartens me to see "PEACE" mentioned once in awhile, and not merely as a casualty of "things as they be". Thanks! Randy (@ The Tower) (05/10/01; 15:58:39MT - usagold.com msg#: 53362) "Economic Sovereignty" A glorious-sounding term, to be sure.But let's think about this "relinquishment" for a minute, beesting.On the classic gold coin standard such as certain people say (or think) they want, there is no such degree of "sovereignty" is there? Well, sure, each nation could dictate the size and shape and design of the gold coins of the realm, but God forbid they ever tamper with the gold content once it has been decided. The "rules of the game" on such a gold standard are fixed, or heaven help them! Am I right? Not much degree of monetary sovereignty, is there?Certain people (you know who they are) would likely be quick to build on this and point out how such freedoms of "monetary sovereignty" are merely tools of the derelict political and banking elite to "stick it to" the common man.It therefore puzzles me when such strong proponents of a classic gold standard (with no sovereignty) will often cite this same relinquishment of national monetary sovereignty as an undesirable thing, a flaw within the eurosystem.Oh, wait, now I get it. <grin> This is merely a transfer of many "sovereignties" over to Single Sovereign, thus marking the first big step toward a NEW world order. (Which is apparently repugnant because we all concede that TODAY'S "order" is worth keeping for all time, right? <sigh>)You said, "Congressman Paul contends if Gold was used as a medium of exchange, governments ability to finance wars would be sharply curtailed."Since you've brought the topics of war finance into focus, how many of our known revolutionary, civil, and world wars were prevented by the brackdrop of a gold or bimetallic standard? (Caution, it is a trick question.)Congressman Paul notwithstanding, would you concede that where there's a political will, there's a way, under a monetary standard of any stripe? As individuals, you and I would be powerless to stop them in the name of gold, Mother, or Apple Pie.A government might in fact succeed nicely at funding a war effort with paper so long as the paper retained the future-use confidence in the minds of the munitions suppliers. But just as surely, the effort might soon be reduced to futility as the government overindulges and finds itself trying to trade paper having only burn value for the war munitions it seeks. A freely floating price for gold unattached to the paper currency would much more quickly transmit the level of monetary imprudence than would occur if the inevitable dislocations of bank runs were first needed to broadcast the degree of printing excesses under a gold standard.And while our government has had somewhat free-reign with fiat-paper indiscretions while gold's value has been hidden in a mountain of bullion-banking-style gold derivatives, you yourself have said, "Notice how the United Nations has not entered military conflicts in many years....WHY?? Answer, because military conflicts cost big money."Are we to therefore conclude from your words that paper money is the more effective brake on wars of size? And yet in your concluding remark, you have indicated otherwise. Help me out here, beesting. Tree in the Forest (05/10/01; 15:49:53MT - usagold.com msg#: 53361) ORO Re: Ashanti's crowded tradeI understand. This is the problem faced by all the gold shorts, no? Once they're in a fast market, their crowded trades will only exacerbate the situation.Re: Gold leasing at $35 to SDR 35The continuation of the official price of gold by the government at $42-$48 is a confirmation of the second default in 1971 and (perhaps) the Jamaica Accords. IMHO it is also an indication that the current 30 year workout period may be rapidly approaching an end. It is almost as if they are acknowledging that we are currently in a "twilight zone" in which gold is priced against a failing currency. The banks know this all too well. Davidson and Rees-Mogg have alluded to the broadening schism between banks and government and we see this fully in the schizophrenic split in gold pricing methods. Debt payments made by the US internationally at $525/oz are in Federal Reserve Notes, a separate currency not connected to the offical US dollar. It is a currency printed by the US mint, but sold at 4 cents per note to a private banking cartel operating under a franchise from the US government. Thus 2 different prices in two different currencies. And the $50 dollar face value on the Gold Eagle is, mayhaps, a glimpse of the future. R Powell (05/10/01; 15:48:57MT - usagold.com msg#: 53360) One and one half fer day I checked crbindex.com for the comex close price of gold and found it listed as unchanged. Under section 38, paragraph 5 of the Rules we find, "An indicator which has neither advanced nor declined during the day's trading shall be awared one half point for that time period (day)." Thus POG gets one half, lease rates were down slightly and the XAU continued on it's upward journey. So the day's tally shows one point for the XAU and one half point for the POG. That makes a one and one half fer day. Hopefully, cousin Chris will be posting good GATA news shortly and we'll get some press coverage. I read today's WSJ from cover to cover and found a total of one sentence on the Centaur mining company's demise and yesterday's rise in POG. One sentence on the commodities page. Go GATA Rich Buena Fe (05/10/01; 15:35:42MT - usagold.com msg#: 53359) Markets ultimately dictate rates Anyone notice that US 30yr T-Bonds got whacked today? I'd guess that those foreign CB reserve assets are starting to grow legs and crawl back up onto US shores........evolution or is it revolution! Com'n boys manufacture those bids........can't let the market fall (fail). Tree in the Forest (05/10/01; 15:19:27MT - usagold.com msg#: 53358) Yukon You asked: Re: FDR's E/O Consfiscating gold in 1933, can anyone show me where in our Constitution Congress has the power to give authority to the President to enact an Executive Order that has jurisdiction over the people of the fifty states?Also: Can anyone tell me where in our Constitution it is stated that Congress can re-delegate a power to a private group that we have delegated to them?Me: Perhaps you missed my post on the Commercial Credit System. The Constitution has been bypassed by clever lawyers and corrupt politicians. We now have a private monetary system enforced under law by our courts. See the dissertation I posted on April 22 13:42 #52341. It describes the legal underpinnings of the Fed and the IRS. It was written in 1984, author uncertain. In spite of all of the opposition to a central bank over the years, it is still with us. Mr Gresham (05/10/01; 15:05:40MT - usagold.com msg#: 53357) Randy http://www.usagold.com/goldenchalkboard/gc_otmarissing.html That Otmar really is something, isn't he? If we were collecting "Famous Central Banker" trading cards, I'd wonder if I should buy his now, and put them away alongside my Paul Volcker All-Star Years collection. Actually, I wonder if our Fed should scout him for possible free-agent status in the coming years when his Euro contract runs out? Whaddya think? He sure can write econ well, huh?Sounds to me like what he's saying is "We had to be vew-wy, vew-wy careful" starting the Euro. In other words, act like bankers (are supposed to act.)When they saw how ingrained a habit of a currency name could be -- the "dollar" today is not anything in substance the same as a "dollar" of a century ago, but U.S. residents sentimentally treat it as the same via a lifetime's daily habituation of earning and spending -- they saw the utter risk they were taking in trying to supplant "Francs", "Marks" and other names in Europe, let alone replace "Dollars" in world usage. Currency tribalism a danger. Never, never fight a war on two fronts (now which country was it learned that one in most painful fashion?) Vew-wy vew-wy careful. Tiptoe.And, you can read between his lines, the Keynesian era legerdemain by economists taught the public to consider "inflation" to mean only price increases, rather than currency overproduction. That set up the politicized expectation that an ECB must act in certain ways if prices went up faster or slower than expected, throwing off the currency maintenance function.The above sets in motion the wise compromise and strategy to seek a deal with oil, and offer it a seat at the table and a piece of a future pie, in exchange for helping Euro maintain some of that price stability. (I still don't understand how that trade settlement designation helps so much.)The competitive advantage of US enterprises has been described most sharply for us by Oro -- wonderful original work I have not encountered elsewhere -- and it seems Issing addresses some of that. Whether they move correctly to improve Europe remains to be seen, so it seems to me that FOA and Oro can differ on their expectations of success there, but only time will tell.Meanwhile, my impression is that FOA gives much greater weight to the independence of Euro management as a currency from the overall European economic management, AND more importantly, to its freshness as a competitor to the dollar that is sufficient to jog gold out of gridlock.FOA still sounds to me like more of a gold partisan than a Euro partisan. For our purposes here, it seems like the question is WHETHER, and HOW, the Euro will affect gold, rather than its long-term success as a fiat currency."When elephants battle, grass may get trampled, but they may also uncover some gold hidden in the bushes." beesting (05/10/01; 14:34:29MT - usagold.com msg#: 53356) Comments by Otmar Issing. Sir Randy, I think this statement from your link by Mr. Issing says it all!!SNIP:<<And the entirely new area-wide perspective that we needed over a group of sovereign states was simply unprecedented in history>>UNSNIP.Lets think about whats been said here:Without firing a shot countries are giving up their economic sovereignty. So, lets take an imaginary trip into the future and see how it would affect Americans.Say sometime in the future the value of the dollar became so low, Congress the Senate and the President decided to join the European Union and the "money" Americans were manadated to use was Euros. Wouldn't that make every American sub-servient to the whims of foreign bankers?????? Wouldn't we be giving up our economic sovereignty?From Congressman Ron Pauls book:"What is the one huge advantage paper money has over a Gold coin monetary system? Answer, history has shown us paper money is much more efficient at financing the purchase of "war" materials and has a direct correlation on who can bomb others." End of excerpt from book.Comments:Many, many Americans who don't even believe in war, have been forced thru taxation to contribute to acts of war. Notice how the United Nations has not entered military conflicts in many years....WHY?? Answer, because military conflicts cost big money. Congressman Paul contends if Gold was used as a medium of exchange, governments ability to finance wars would be sharply curtailed. This is one Goldheart who truly believes "WORLD PEACE" is even more important than Gold. So, lets put the debate(Gold vs Paper) into a different context lets say a Gold standard helps to prevent wars and a paper standard promotes wars and war like activities. Now, which would be your choice?Thanks for Reading....beesting. silvercollector (05/10/01; 13:51:31MT - usagold.com msg#: 53355) Galearis Dear Sir,If you have a moment will you email me please.silvercollector@hotmail.com Trail Guide (05/10/01; 12:55:28MT - usagold.com msg#: 53354) (No Subject) ALL,I have not gone anywhere and will be posting more as soon as I can. Don't take our (ORO's & mine) comments to each other as burning down the stage. My goodness, we can take morning water balloon shots at each other across the backyard fence and still share ice tea in the evening. (smile) TrailGuide Humble Pie (05/10/01; 12:34:16MT - usagold.com msg#: 53353) Letter from ANOTHER FOA, Let's have it , I'm more than ready for it. Randy (@ The Tower) (05/10/01; 12:28:00MT - usagold.com msg#: 53352) Comments by ECB chief economist Otmar Issing http://www.usagold.com/goldenchalkboard/gc_otmarissing.html I posted this two days ago. Read it.<whispered note to ORO: You owe it to yourself to read and broaden your perspective on the thoughts of those that you have recently referred to as "derelict monetary boobs such as occupy the higher reaches of central banking and politics, and at church altars and mosque towers.">Sincerely yours,A Free-thinking Derelict Monetary Lackey Mr Gresham (05/10/01; 12:13:16MT - usagold.com msg#: 53351) FOA, Oro Getting a sore neck from watching you two play that marvelous ping-pong as you do. Not time to read today's volleys yet, but my thought was about ECB's independence from the Brussels bureaucracy that Oro is so vehement about/against. Is it? Is ECB trying to manage a currency apart from the other government functions the others handle, so that that currency can compete (and outrun the dollar?). I would imagine that was part of the 20-year period of readying for the Euro, and creating a "currency without a country."My limited learnings about fiat management would suggest something like a Friedmanite standard of a fixed growth rate, such as 2% annual, to limit quantity and impose "scarcity" on the fiat. That would be the first responsibility, IMO, of a fiat central banker who wanted to do his job right, resisting other pressures. Next would be a bit of "taking away the punchbowl."AG is obviously writing the textbook on how not to do either; it'll be interesting to read your takes on today's ECB action. ECB is still not too worried about outrunning the bear, I guess, is it? Randy (@ The Tower) (05/10/01; 12:08:56MT - usagold.com msg#: 53350) Fed pumps up the volume, again For the second straight day the Fed has added nearly 700 million dollars ($696) as permanent reserves to the banking system through the outright purchase of Treasury securities for the System account.And while yesterday the Fed also added $3.0 billion via overnight repos, there was a similar operation today totaling $3.5 billion. Fed funds were trading below the FOMC target rate of 4.5 percent. Buena Fe (05/10/01; 12:06:23MT - usagold.com msg#: 53349) Trail Guide 53314 A reasoned/tempered response......Cheers. Randy (@ The Tower) (5/10/01; 11:46:30MT - usagold.com msg#: 53348) ECB explains its across-the-board quarter point reduction in rates (4.5% on the main rate) http://www.ecb.int/key/01/sp010510.htm ECB president Willem Duisenberg told a press conference today that after the Governing Council "conducted its regular examination of monetary and economic developments and analysed their implications for the maintenance of price stability in the euro area" decided a rate cut was in order, citing, "somewhat lower inflationary pressure over the medium term."Those who have been keeping their thoughts and eyes on our discussions of the implications the euro has for the dollar's legacy as international reserve currency had better take a good look at this portion of his remarks:"In order to explain today's monetary policy decisions in some more detail, let me share with you our assessment of the information provided under the two pillars of the ECB's monetary policy strategy."As regards the first pillar, also taking into account the latest available information, monetary developments no longer pose a risk to price stability. M3 growth has been on a gradual downward trend since spring 2000, reflecting the increase in the key ECB interest rates which occurred in the period from November 1999. The three-month average of the annual growth rates of M3 was 4.8% in the period from January to March 2001, which is close to the reference value of 4 1/2%."[Randy's note: OK, now pay attention to this following "significant" and "non-negligible" item, knowing as you do that such international euro use would effectively represent a displacement of dollar use.]Duisenberg continues, "In the past few months, some slowdown in credit aggregates has also been visible. In addition, as already stated on several occasions, there have been indications that the monetary growth figures are distorted upwards by non-euro area residents' purchases of negotiable paper included in M3. This has now been confirmed by clear evidence, and the magnitudes involved are significant. As regards holdings of money market fund units/shares by non-euro area residents, on which we now have solid statistical data, the distortion has become more sizeable over recent months and currently amounts to around half a percentage point. In addition, there have been non-negligible upward distortions to the annual growth of M3 as a result of non-euro area residents' holdings of other marketable paper included in M3, for which precise statistical information is currently being developed."The ECB will keep the public informed about ongoing developments in these categories of M3. As these factors can be broadly identified, the information content under the first pillar is ensured. Taking into account these upward distortions, as well as all information from the first pillar, it can now be concluded that there is no longer a risk to price stability over the medium term emanating from the first pillar." Cavan Man (5/10/01; 11:34:39MT - usagold.com msg#: 53347) PH in LA "That's because the Old World culture chooses not to close a gold window again".Trail GuideUSAGOLD 53314I believe some of your questions can be answered by the considering the above statement.It's my opinion that people beyond N. American shores have long, long memories and strategies that take decades to fully implement. ge (5/10/01; 10:59:49MT - usagold.com msg#: 53346) Brave New Fiat Trail Guide says "The leading economic countries (EuroZone in the future) would have but to establish a protocol that forbid the enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade. In this context, no banker would lend you gold to buy a house if, in a default, he could not claim your house in a court of law."Therefore, gold may not be used to trade goods and services.Thus ordered the Holy Roman Emperor. PH in LA (5/10/01; 10:49:57MT - usagold.com msg#: 53345) Just a mere interjection into the tirade. FOA:I'd like to add an echo to Camel's post (msg#: 53341).The thing about ORO's writings (which makes one wonder if he is not somehow related to Kitco's Mozel) is that he already has his agenda. Much as his learned and often informative comments try to camoflage it, he is rarely looking for objective truth or principle. Rather, he is trying to prove the viablility of his thesis, much as we all love him (smile, smile). You put your finger right on his weakest link when you say, "Gold as official money is dead at the starting blocks." Unfortunately, this is ORO's one agenda. So, of course, he is perfectly willing to loosen his ICBMs to defend it.For my part, your proposed solution just resonates right. In the present fiat system, there is really no refuge. The lords and masters have every tool at the ready to debase the product of my labors (ie savings) and the only defense against them is risk. "Invest in ________s!" they say. Fill in the blank with stocks, bonds, real estate, IRAs, (whatever) for all of which they have their fingers on the controlling strings. This is patently unfair. Once earned, the individual needs somewhere to put his savings where he can have control over them... somewhere beyond the managers' inflationary reach. In our system of voluntary slavery, they hold our noses to the grindstone and make us all work out our lifetimes. "Welcome to the machine," said Pink Floyd. OK, let's not take issue with that. Nor with the unfairness of one man's work being 'worth' more than another's (depending on whose son he is, or who he knows, or who likes him, etc). I won't even propose that topic. But once earned, why do they still need control over my savings? Has their greed no bounds?Your proposed system at least holds out the possibility of an asset designed to hold its value in the face of their inflation. Seems logical to me. Seems like a system we could live with. The only system that we'll ever get, will be one that we can all live with. Maybe not anyone's perfect sytem. Not ORO's utopian gold standard. But at least one that most can tolerate. Who among us can really tolerate a system that sucks the value out of our savings through their insidious inflation if their is no refuge? No defense? What is not quite clear to this observer is this: Is the system you see one born of your own vision in the manner of ORO's gold standard? Is it some form of wishful thinking, however noble and/or logical and well-meaning?Or is it, as a sytem, already mostly implemented? Do the European 'managers' already have the blueprint drawn up and set in place? You have mentioned ANOTHER's current reading of political postures/events on the part of the BIS. Please do not assume that we are not ready for this information based on the reaction from ORO. Some of his information has always been eye-opening and fascinating, but his weakness is his own political agenda. For those of us without a pre-conceived agenda, are you one of us? Are your thoughts the product of investigation? Of the truth seeker? Are ANOTHER's?Or even more staggering: Is ANOTHER actually one of the 'managers', one of the architects of the new system assigned the task of propaganda? Are you his publicist? This would explain why ORO's ICBMs seem to have such a personal effect. If so, why not declare your advocacy? And tell us, while you're at it, when the new system is destined to become fully operable. Our hopes have been dashed so often. Is this August, exactly 30 years after Nixon's surprise closure of the gold window, a significant date? If so, can you tell us exactly why? You once thought that a gold crisis would make the Y2K event largely irrelevant. You thought the Washington Agreement's spike would bring on the definitive default. Now it's 2001, and not yet. Now you say that GATA and Reg Howe's battle will be proven irrelevant... that the default is scheduled for before they could work their battle through the courts. How long could that take? A few years? Is there something out there, that you know about, that makes you say this? Or are you just betting on the numbers? On probability? Galearis (5/10/01; 10:46:08MT - usagold.com msg#: 53344) @ megatron, your #53320 Monetary silver... "But it's not a monetary metal". Yes, T.B. never came out anywhere in this article and specifically said that it IS, but he did say that historically that it WAS...through 5,000 years of use. And, as you know, the commodity uses of the pm have far outstripped its usefulness as a money metal, but a 5000 year history of multiple uses drives still the perception that it IS a monetary metal. The thrust of this particular piece delt with basic commodity supply deficits and the repercussions down the road. It is still involved in coinage - which reinforces the concept - and is, like gold, used in jewellry and DOES on the metal market mirror gold in its ups and downs. It also shares a public perception that is similar to that of golds.Perhaps it is the last point that is so easy to make. If one looks in on the Kitco graphs for both metals for the past couple of days, it can be seen very clearly. If the speculators were buying silver based on its commodity factor, then it would not reveal this connection - and would follow copper, for example, more closely. That it does not do this would seem to indicate that speculators are speculating on silver based on the same value perceptions that they hold for gold. That TOO will drive the market - and seems to be doing just that right now. Consider, please, by asking yourself a question: is the spike due to Kodak suddenly becoming worried about film production and buying on the spot market? Do you think these buyers are aware of Ted Butler? Do you think they are aware of the dangerous dynamics of a derivative driven metals market? These people are speculating on a paper market that they consider real, for the same reason as they speculate on a paper gold market. Ignore for the moment the physical component and focus on their goal to buy paper for a paper profit; that they do this is still driven on the perception of a percieved value for these trades based on the allure of precious metal. They are obviously unaware of the supply deficits in the metal or it would already be "SILVER TO DA MOON". It really IS as simple as that.Public perception drives markets. That the DOW does NOT mirror a present economic crisis is (and continues to be) a wonder to us all. Human beings are extraordinary in their capacity for denial and following their habit based routines instead of using a more clinical approach that culminates in doing some research. It would seem to be a mob psychology factor that is operant here: like a mob, the public I.Q. is some function of an inverse relationship to the numbers of individuals composing the masses. That is why the majority applaud interest rate cuts because of the band-aid, short term profits that it gives them. In short most would seem to be quite disconnected from reality and operate in a world that would seem to be much simpler than the reality. This too drives perception - often to the detriment of us all. The contrarian philosophy can be applied to almost every facet of human behavior, from politics and economics to child rearing. Even Karl Marx recognized it.... and it is fundamentally the reason that he held that free enterprise will ultimately destroy itself by undermining the support structures that maintain it. We will all be exposed fully to this for the next fifteen years, and you can also be assured that the truth will not set anyone free. Truth, as many of the moralists on this forum know, is usually the first thing to go.Silver, get ya some (smile)I'm off to Toronto again. But at least it isn't raining. Have a nice day on the forum.Best regards,G. ORO (5/10/01; 10:27:05MT - usagold.com msg#: 53343) Justamerebear and Camel - fawn on your detractors and denounce your supporters Let me commend Camel for noticing that there was a tirade, and berate Mr Bear for denying it.Justamerebear, perhaps you could spend a moment on points I made that are due for criticism, I would appreciate that.Thanks. justamereBear (5/10/01; 10:19:43MT - usagold.com msg#: 53342) Camel When all is said and done, and history is finally written, I am sure that we are all going to be wrong to a greater or lesser extent. In the case of Oro and Trail Guide, I would dearly love to have the time available to enter the debate, because the subject is interesting and important, and I have some disagreements with both, in this case, slightly moreso trail guide than Oro. You say that Oro raises an interesting point. I submit that it takes a certain amount of intelligence to raise an interesting point. One may like or dislike yours or mine or Oros way of presenting an arguement. However, I would hardly characterize Oros work as a tirade.j'Bear Camel (5/10/01; 08:37:49MT - usagold.com msg#: 53341) Injection rates/interest rates Hey Black Blade. How about giving us some updates on gas injection rates.Remember that the Fed is expected to lower U.S. interest rates next week. If that occurs then Euro rates will still be higher than U.S. rates which will still follow the game plan of directing capitol to the Euro.Trail Guide- I hope you won't let Oro's tirades deprive us of ANOTHERS thoughts.While he raise's an interesting topic, as we used to say in the 60's he tends to go on a "head trip", that is a labyrinth of words that have little connection to reality. You will only wear your self out trying to respond Chris Powell (5/10/01; 08:31:07MT - usagold.com msg#: 53340) Murphy address to GATA Africa Gold Summit in Durban http://groups.yahoo.com/group/gata/message/757 Here's the complete text.http://groups.yahoo.com/group/gata/message/757To 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 Hill Billy Mitchell (5/10/01; 08:04:12MT - usagold.com msg#: 53339) The Invisible Hand @ # 53335 - Rate cut surprise What surprised me was that the rate cut did not occur before now. They have similar problems as do we, though not so pronounced as the Euro is not in maturity nor is it a currency of reserve status, yet.I truly believe that they have been so worried about inflation that they were willing to force economic cooling and now the fear is more towards pronounced recession which in the end will always weigh concern about inflation. A mirror image of the US experience only just a lag behind, much like our national economy and politics, which lag behind the goings on in California.Convergence is upon us in short order.Very respectfully,HBM Hill Billy Mitchell (5/10/01; 07:54:31MT - usagold.com msg#: 53338) Buena Fe @ # 53336 The yield curve in Euroland has been negative (inverted) and the results are taking effect over there. Reality is setting in just as it has for Greenspan over here. No doubt there has been some arm twisting; however I am convinced that the ECB move is to soften the landing over there. This is a long and slowly moving process between the USD and the Euro, that is, until some unknown event triggers open economic warfare. Survival of the fittest is what is and has been going on for quite a long while. (6,000 years)Very respectfully,HBM The Invisible Hand (5/10/01; 07:44:36MT - usagold.com msg#: 53337) Rationality restored http://www.mrci.com/qpday.asp euro (futures) not up, but down 88.14 -0.28 5/10/2001 @ 6:29 Pacific Time Buena Fe (5/10/01; 07:34:09MT - usagold.com msg#: 53336) rate cut ...........ecb folds to presure I guess the ECB didn't want to start a war yet. The Invisible Hand (5/10/01; 07:29:00MT - usagold.com msg#: 53335) Eurozone rate cut surprise http://news.bbc.co.uk/hi/english/business/newsid_1323000/1323307.stm …The news gave an immediate boost to the European single currency, the euro, against the dollar, and triggered a surge in share prices in Frankfurt and Paris. …The Invisible Hand: I thought that when the reward of an asset diminished, its price decreased also. Or do I have to understand that the rate cut will give a boost to the European economy and thus (how?) strengthen the euro. Is economics no science? Or can anything derive from anything? The Invisible Hand (05/10/01; 07:18:50MT - usagold.com msg#: 53334) Oops URL - ECB surprises with rate cut http://cnnfn.cnn.com/2001/05/10/europe/rates/ Easier reference The Invisible Hand (05/10/01; 07:14:38MT - usagold.com msg#: 53333) http://cnnfn.cnn.com/2001/05/10/europe/rates/ ECB surprises with rate cut Euro zone central bank shocks markets with rate cut to counter slowdownMay 10, 2001: 8:43 a.m. ET LONDON (CNN) - The European Central Bank shocked the markets with a quarter-point interest rate cut on Thursday to counter a slowing in euro zone growth.The ECB lowered the interest rate to 4.5 percent, its first move in two years, from 4.75 percent. Only three economists out of 50 polled by Reuters expected a rate cut. … Knallgold (05/10/01; 06:44:56MT - usagold.com msg#: 53332) Strange theory by Derb http://ragingbull.lycos.com/mboard/boards.cgi?board=GOLD&read=3970 What do you mean? Cavan Man (05/10/01; 06:04:50MT - usagold.com msg#: 53331) Dear Sir FOA Truly, Sophia; ef-hah-ree-stow. ausome (5/10/01; 05:28:37MT - usagold.com msg#: 53330) POG positive again Up 5cents after being down all day in Asia. Go GATA Go Gold. Canuck (5/10/01; 04:39:51MT - usagold.com msg#: 53329) Bombshell? From the recent GATA messages:"There's going to be some very painful facts disclosed," said Murphy. "It's going to be bigger than Watergate." -END-As I, are you getting the impression that a bombshell is going to be announced today?Thanks to HBM and Mr. Gresham.Canuck. justamereBear (5/10/01; 00:53:11MT - usagold.com msg#: 53328) Black Blade 53321 Holland Black BladeHave you been there and seen that project? 50 years to pump out that Zee. These guys don't think small. A most amazing project. 3 or 4 years ago I spent a very happy week puttering around that project. They are making astounding progress. Well worth the trip, IMHO. But then, I love all of Holland, except Amsterdam.I wonder if the old windmills sliced and diced birds too?j'Bear ViewYesterday's Discussion.
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